振华重工2019年年度报告(英文版)

Stock code: 600320 900947              Stock Name: Zhenhua Heavy Zhenhua B-share




  Shanghai Zhenhua Heavy Industries Co., Ltd.

                            Annual Report 2019
Section I      Definitions                                                 1

Section II     Company Profile and Principal Financial Indexes             2

                                                                           6
Section III    Business Profile
                                                                           7
Section IV     Discussion and Analysis of the Performance

Section V                                                                 18
               Important Events

Section VI     Changes in Ordinary shares and Shareholders' Situation     31

Section VII    Preferred Shares                                           36

Section VIII   Directors, Supervisors, Senior Executives and Employees    37

Section IX     Corporate governance                                       43

Section X      Related Information on Corporate Bonds                     45

Section XI     Financial Report                                           46
Section XII    List of Reference Documents                               177
                            Important Notice

1   The Board of Directors, Board of Supervisors, directors, supervisors and senior executives
    of the Company hereby guarantee the truthfulness, accuracy and completeness of the
    contents carried in this annual report, guarantee no false record, serious misleading
    statement or great omission carried in this annual report and guarantee to assume the
    legal responsibilities jointly and separately.
2   All directors of the Company are present at the board meeting.
3   Ernst & Young LLP. (Special General Partnership) issues the standard audit report
    without qualified opinion for the Company.
4   Zhu Lianyu, the chairman of the Company, Huang Qingfeng, responsible person for
    accounting, and Zhu Xiaohuai , the person in charge of accounting organ (accountant
    in charge) hereby declare that the financial statements in this Annual Report are true,
    accurate and complete.
5   Proposal for profit distribution or common reserves capitalizing during the reporting
    period reviewed by the board of directors
    Profit distribution proposal for 2019: based on the total share capital registered on
    the registration date of the implementation of equity distribution, a cash dividend of
    RMB 0.5 per 10 shares (tax-included) will be distributed to all shareholders from the
    undistributed profit as at Dec 31, 2019. The total cash dividend to be distributed will be
    RMB 263,417,675.05 based on the total share capital of 5,268,353,501 shares as at
    December 31, 2019.The Company will neither distribute the bonus shares nor transfer
    the capital public reserves into the paid-in capital.
6   Risk declaration of forward-looking statements
    □Applicable √ Not Applicable
7   Does the Company have non-operating funds occupied by the holding shareholder
    and its related parties?
    No
8   Does the Company provide the external guarantees in breach of the stipulated
    decision-making procedure?
    No
9   Major Risk Warning
    The company has described the related potential risks in this annual report. Investors
    may pay attention to the same. Please refer to discussion and analysis of the
    performance and related chapters for the risks the company may be confronted with in
    the future development.
10 Others
    □Applicable √ Not Applicable
Section I                    Definitions


I. Definitions

The terms used in this report shall be defined as follows, unless otherwise specified:


                                                 Definitions of high frequency terms

 Company, the Company                                Refers to        Shanghai Zhenhua Heavy Industries Co., Ltd.

 CCCC                                                Refers to        China Communications Construction Company Ltd.

 CCCG                                                Refers to        China Communications Construction Group Co., Ltd.

 CCCG HK                                             Refers to        CCCG (HK) Holding Limited

 Reporting period                                    Refers to        From Jan. 1, 2019 to Dec. 31, 2019




                                                                                                                          1
Section II                          Company Profile and Principal Financial Indexes


1 Company Information


    Company name in Chinese                                     上海振华重工(集团)股份有限公司

    Abbreviation of the Company name in Chinese                 振华重工

    Company name in English                                     SHANGHAI ZHENHUA HEAVY INDUSTRIES CO., LTD.

    Abbreviation of the Company name in English                 ZPMC

    Legal representative of the Company                         Zhu Lianyu


2 Contact information


                                                                Secretary of the Board of Directors

    Name                                                        Sun Li

    Address                                                     No. 3261, Dongfang Road, Shanghai

    Telephone                                                   021-50390727

    Fax                                                         021-31193316

    E-mail                                                      IR@ZPMC.COM



3 Basic Information


    Registered address                                           No.3470, Pudong South Road, Shanghai

    Postal code of registered address                            200125

    Office address                                               No. 3261, Dongfang Road, Shanghai

    Postal code of office address                                200125

    Website                                                      http://www.zpmc.com

    E-mail                                                       IR@ZPMC.COM


4 Information disclosure and placement location


    Newspaper designated by the Company for information
                                                                 Shanghai Securities News, Hong Kong Wen Wei Po
    disclosure

    Website designated by China Securities Regulatory
    Commission (CSRC) for publishing the annual report of the    www.sse.com.cn
    Company

    Placement location of the annual report of the Company       Securities Affairs Office




2
5    Stock information


                                                             Stock Information

    Stock type                Stock exchange                 Stock abbreviation         Stock code      Stock abbreviation before change

     A-share          Shanghai Stock Exchange (SSE)            Zhenhua Heavy              600320                ZPMC Industries

     B-share          Shanghai Stock Exchange (SSE)           Zhenhua B-share             900947                         -



6    Other relevant information


                               Name                                      Ernst & Young LLP (Special General Partnership)
     Public accounting
                                                                         Room 01-12, Floor 17th, Ernst & Young Tower Oriental Plaza, No.1
    firm engaged by the        Office address
                                                                         East Changan Street, Dongcheng District, Beijing
    Company (domestic)
                               Signed by the Accountants                 Liu Wei, Gu Chengli


7    Main accounting data and financial indexes in recent three years

     (I) Main accounting data
                                                                                                                  Unit: Yuan Currency: RMB

                                                                                                         Year-on-year
                     Main accounting data                          Year 2019             Year 2018                            Year 2017
                                                                                                          change (%)

Operating revenue                                                24,595,587,883      21,812,389,644                12.76     21,858,814,000

Net profit attributable to the shareholders of the listed
                                                                   514,930,143            443,005,092              16.24       300,195,422
company

Net profit attributable to the shareholders of the listed
                                                                       311,117,615        121,335,528             156.41       277,837,568
company after deducting the non-recurring profits and losses

Net cash flows from operating activities                          1,290,213,109           553,943,979             132.91      1,332,209,274

                                                                 At the end of          At the end of    Year-on-year        At the end of
                                                                     2019                   2018          change (%)             2017

Net assets attributable to the shareholders of the listed
                                                                 15,543,404,014      15,185,861,952                 2.35     15,011,306,366
company

Total assets                                                     74,410,783,300      70,598,364,627                 5.40     67,519,953,829



     (II) Major financial indexes

                 Major financial indexes                    Year 2019        Year 2018         Year-on-year change (%)         Year 2017

Basic earnings per share(RMB/share)                            0.098            0.084                               16.67             0.057

Diluted earnings per share (RMB/share)                         0.098            0.084                               16.67             0.057

Basic earnings per share after deducting non-
                                                               0.059            0.023                              156.52             0.053
recurring profits and losses (RMB/share)

Weighted average ROE (%)                                        3.39             2.92                               +0.47              1.99

Weighted average ROE after deducting non-recurring
                                                                2.06             0.80                               +1.26              1.84
profits and losses (%)



                                                                                                                                             3
       Notes to the main accounting data and financial indexes in the past 3 years before the end of the reporting period
       □Applicable √ Not Applicable

8      Differences in accounting data under domestic and overseas accounting standards
     1.Difference in net profits and net assets attributable to the shareholders of the listed company in the financial
statement synchronously disclosed under the international and national accounting standards
     □Applicable √ Not Applicable

     2.Difference in net profits and net assets attributable to the shareholders of the listed company in the financial
statement synchronously disclosed under the domestic and overseas accounting standards
     □Applicable √ Not Applicable

       3.Explanation for differences between the domestic and overseas accounting standards:
       □Applicable √ Not Applicable

9      Main financial data in 2019 by quarters
                                                                                                                            Unit: Yuan Currency: RMB

                                                                                   Q1               Q2                    Q3               Q4
                                                                              (Jan. to Mar.)   (Apr. to Jun.)       (Jul. to Sep.)   (Oct. to Dec.)

    Operating revenue                                                         4,776,791,974    5,409,998,760        5,351,591,749    9,057,205,400

    Net profit attributable to the shareholders of the listed company            98,988,791        123,433,885         20,809,039      271,698,428

    Net profit attributable to the shareholders of the listed company
                                                                               -134,306,822        172,856,694       145,747,664       126,820,079
    after deducting the non-recurring profits and losses

    Net cash flows from operating activities                                     59,817,552          1,002,962         30,455,376    1,198,937,219

       Notes to differences between the quarterly data and the data in periodically disclosed reports
       □Applicable √ Not Applicable

10 Non-recurring profit and loss items and amount
       √Applicable □Not applicable
                                                                                                                            Unit: Yuan Currency: RMB

                                                                                   Amount in            Note (if        Amount in      Amount in
                   Non-recurring profit and loss items
                                                                                     2019             applicable)         2018           2017

    Profit or loss from disposal of non-current assets                                49,091,913                       155,557,716      13,285,984

    Government grants included in current profits and losses except
    for government grants closely related to the Company business,
                                                                                      93,271,980                       114,412,517      83,502,544
    in line with national policies and obtained by quota or quantity at
    unified state standards

    Profit or loss on changes in fair values of financial assets held
    for trading and financial liabilities held for trading and investment
    income obtained from disposal of financial assets held for trading,
                                                                                    146,517,397                         74,200,750      20,563,270
    financial liabilities held for trading and available-for-sale financial
    assets, except for effective hedging operations associated with the
    company's normal operations

    Reversal of provision for impairment of receivables subject to
                                                                                                                       150,327,138                 -
    separate impairment test




4
                                                                       Amount in           Note (if      Amount in      Amount in
                 Non-recurring profit and loss items
                                                                         2019            applicable)       2018           2017

 Other non-operating revenue and expenses except for the above-
                                                                         -18,553,180                     -67,069,856    -70,077,032
 mentioned items

 Affected amount of minority equity                                      -23,013,076                     -30,908,588    -14,565,022

 Affected amount of income tax                                           -43,502,506                     -74,850,113    -10,351,890

 Total                                                                  203,812,528                     321,669,564      22,357,854


11 Items measured at fair value
     √Applicable □Not applicable
                                                                                                            Unit: Yuan Currency: RMB

                                                                                                                        Impact on
                                                                  Beginning            Ending            Current
                               Item                                                                                      current
                                                                   balance             balance           change
                                                                                                                          profits

 Jiangxi Huawu Brake Co., Ltd.                                     102,163,301         132,211,332      30,048,031      30,048,031

 Qingdao Port International Co., Ltd.                              476,713,253         510,671,771      33,958,518      33,958,518

 China Railway Signal & Communication Corporation
                                                                   591,773,048         479,560,537     -112,212,511    -112,212,511
 Limited

 Shenwan Hongyuan Group Co., Ltd.                                      889,792           1,119,345         229,553         229,553

 COSCO Shipping Holdings Co., Ltd.                                            0        585,555,555     585,555,555     165,555,556

 Derivative financial assets                                        44,481,806          22,235,244     -22,246,562     -22,246,562

 Derivative financial liabilities                                             0         -7,312,741       -7,312,741      -7,312,741

 Equity instrument investment                                        8,438,278           8,438,278                 0             0

 Hunan Fengri Power & Electric Co., Ltd.                            20,398,051          24,348,689       3,950,638               0

 CCCC Highway Bridges National Engineering Research
                                                                    18,693,215          17,649,136       -1,044,079              0
 Centre Co., Ltd.

 CCCC National Engineering Research Center of Dredging
                                                                     7,837,146           9,005,378       1,168,232               0
 Technology and Equipment

 Shanghai Zhenhua Port Machinery (Group) Shenyang
                                                                     2,271,400           2,865,664         594,264               0
 Elevator Co., Ltd.

 ZMPC Ningbo Transmission Machinery Co., Ltd                         5,308,514           7,241,610       1,933,096               0

 Shanghai Zhenhua Gangkou Machine (Group) Longchang
                                                                       818,203            870,791           52,588               0
 Lifting Equipment Co., Ltd.

 Total                                                            1,279,786,007    1,794,460,589       514,674,582      88,019,844



12 Others
     □Applicable √Not applicable




                                                                                                                                      5
Section III                   Business Profile


I. Main business, business model of the Company and the industrial profile during the reporting period
     The Company is a famous heavy-duty equipment manufacturer, and a state-owned listed company on A and B shares,
with the headquarters in Shanghai and multiple production bases in Shanghai and Nantong. It is also the biggest port heavy-
duty machinery equipment manufacturer in the world. The business scope of ZPMC mainly covers: marine heavy industry,
heavy special steel structure, marine transportation and installation, system integration, engineering general contracting,
electrical product, software development and integration, investment and financing business, integrated services; It is also
actively expanding smart industries, livelihood consumption, integrated development and digital industries. At present, the
products of the Company enter 103 nations and regions.
     The business scope of the Company covers: design, construction, installation and contracting of large port loading
and unloading system and equipment, offshore heavy equipment, engineering machinery, engineering vessels and large
metal structural parts and their parts and components; ship repair; leasing of equipment; leasing of self-owned houses;
leasing of self-produced crane; sales of the products made by the sales company; international sea transportation by special
purpose vessels that can be transported with the whole equipment; specialized contracting of steel structure engineering;
construction of electric construction engineering; and construction of electromechanical installation and construction
engineering; research and development, installation and sales of oil and gas exploration equipment and mechanical
engineering equipment; design of marine engineering buildings; technology development, technical consulting, technical
services, and technology transfer in the fields of computer software and information, computer network, mechanical
technology, environmental protection technology, new energy technology, intelligent technology; installation and maintenance
of railway and urban rail transportation equipment and accessories; property management; loading, unloading, handling
and storage; parking lot (warehouse) operation and management; import and export business of goods and technologies (In
case of quota, license management, special regulations, quality inspection, safety inspection and construction qualification
requirements involved, it shall not carry out the business activities before obtaining the corresponding qualifications or
licenses in accordance with the relevant national regulations).[Items subject to approval according to law can be carried out
only after such approval is granted by the competent authorities]

II. Explanation for major changes in prime assets of the Company during the reporting period
    □Applicable √ Not Applicable

III. Analysis of the core competitiveness during the reporting period
    √ Applicable □ Not Applicable
    There was no material difference in the core competitiveness of the Company during the reporting period.




6
Section IV                           Discussion and Analysis of the Performance


I. Discussion and Analysis of the Performance
     In 2019, under the guidance of the "One Entity with Two Wings" strategy, the Company proceeded with confidence,
seized development opportunities, and took innovation as its source of power. Through continuous deepening of reforms
and continuous improvement of management system construction, the Company's core competitiveness was further
consolidated. Its business segments are developing with steady progress.
     During the reporting period, the Company's leading position in the port machinery business was further consolidated.
It explored new market of port machinery products, and the business entered 103 nations and regions. Many new domestic
and international projects have been signed for the automated terminal business. Offshore destocking work of offshore
engineering has achieved periodic results, and has successfully delivered several large offshore projects. The steel structure
business has improved significantly, and the amount of newly signed contracts has increased sharply. Investment business
projects under construction progressed steadily, signing the first operational investment project. For the marine service
business, the expansion of the high-end shipping, installation and offshore wind power general contracting business markets
are further strengthened. The market share of the electrical business and the market influence of the EZ brand have further
increased. Progress has been made in integrated services, and after-sales service quality and contract value have been
improved. The general contracting business continued to proceed with steady progress.
     Emerging business achieved remarkable results. In the smart industry sector, the port automation business leverages
5G technology, the smart parking business has blossomed in multiple ways, and the warehousing and logistics business has
achieved a breakthrough. In the livelihood consumption industry, it focused on old residential area renovation, prefabricated
construction, security and other services. While accumulating project experience, new markets are gradually opened up.
It conducts in-depth development of integrated development industry. Digital exhibition industry continues to improve. The
Terminexus e-commerce cloud platform continues to be optimized, and the Company's ERP, PLM, ECM and other digital
projects are progressing orderly.

II.Performance during the reporting period
     During the reporting period, the Company realized the operating revenue amounting to RMB 24,595,587,883,
representing a year-on-year increase of 12.76%; the total profit was RMB 590,872,197, with a year-on-year increase of
10.02%; the net profit attributable to the owner of the parent company was RMB 514,930,143, with a year-on-year increase
of 16.24%.

1   Analysis of the performance
    1. Analysis table of changes in the related items in profit statement and cash flow statement
                                                                                                      Unit: Yuan Currency: RMB

                                                              Amount in the current    Amount in the same
                               Item                                                                             Change (%)
                                                                    period            period of the last year

 Operating revenue                                                 24,595,587,883          21,812,389,644           12.76

 Operating cost                                                    20,590,531,322          18,082,285,752           13.87

 Selling and distribution expenses                                   122,517,036              115,541,161            6.04

 General and administrative expenses                                1,095,131,287           1,142,337,348           -4.13

 Research and development expenditures                               887,096,178              672,614,073           31.89

 Financial expenses                                                 1,496,586,414           1,522,264,813           -1.69

 Investment income                                                   174,600,552              116,030,979           50.48

 Income from changes in fair value                                     88,019,844              44,481,806           97.88



                                                                                                                             7
                                                                      Amount in the current       Amount in the same
                                    Item                                                                                   Change (%)
                                                                            period               period of the last year

    Losses from credit impairment                                              -38,761,593                           -           N/A

    Gains from disposal of assets                                               49,091,913               155,557,716          -68.44

    Net cash flows from operating activities                                 1,290,213,109               553,943,979          132.91

    Net cash flows from investing activities                                 -1,547,161,450           -2,779,460,550          -44.34

    Net cash flows from financing activities                                   141,933,820              -408,453,790         -134.75


       2. Analysis of revenue and cost
      √ Applicable □ Not Applicable
      The increase in the research and development expenditures was mainly caused by the increase in the expenses for
research and development projects of the Company.
      The increase in the investment income was mainly caused by the increase in the cash dividends from the financial
assets share investment of the Company.
      The increase in the gains from changes in fair value was mainly caused by the increase in the gains from changes in the
fair value of share investment of financial assets held for trading.
      The changes in the losses from credit impairment was mainly caused by the implementation of the new financial
instrument standards by the Company and reclassification of losses from credit impairment.
      The decrease in the gains from disposal of assets was mainly caused by the decrease in the net gains from the disposal
of fixed assets.
      The changes in the net cash flows from operating activities were mainly caused by the increase in the payment for
goods and project payments received from the Company for the sales of goods and rendering of labor services.
      The changes in the net cash flows from investing activities were mainly caused by the decrease in the cash paid to
purchase and construct fixed assets.
      The changes in the net cash flows from financing activities was mainly caused by the increase in bank borrowings.


       (1) Main businesses by sectors, products and regions
                                                                                                                 Unit: Yuan Currency: RMB

                                                         Main business by products

                                                                             Year-on- year
                                                                                                Year-on-year
                               Operating                      Gross profit     change in                         Year-on-year change in
          Product                              Operating cost                                     change in
                                revenue                         rate (%)       operating                          gross profit rate (%)
                                                                                              operating cost (%)
                                                                              revenue (%)

Port machinery               16,458,563,164 13,240,912,286        19.6              9.8                 16.1                     -4.3

Heavy-duty equipment          1,491,597,749     1,218,182,031     18.3             -45.7                -53.3                  +13.3

“Building-construction”
and project                   2,564,145,018     2,428,961,159      5.3             74.9                 66.9                    +4.6
construction items

Steel structure and
                              2,709,430,977     2,571,473,994      5.1             73.8                 55.3                   +11.3
related income

Marine transport and
                                989,117,844       959,513,561      3.0             19.6                 17.9                    +1.4
others




8
                                                            Main business by regions
                                                                                  Year-on- year      Year-on-year                     Year-on-year
                         Operating                                Gross profit
         Region                           Operating cost                       change in operating     change in                     change in gross
                          revenue                                   rate (%)
                                                                                   revenue (%)     operating cost (%)                 profit rate (%)
Mainland, China        12,346,088,297      11,200,513,063               9.3                   22.9                    11.8                    +9.0
Asia (excluding
                         3,469,961,193         2,482,979,665          28.4                   -17.5                     -1.3                   -11.7
Chinese Mainland)
North America            2,205,954,534         1,717,614,143          22.1                     8.7                      1.3                   +5.6
South America              963,140,369          854,282,718            11.3                    -7.4                   40.3                    -30.2
Europe                   3,416,405,499         2,988,874,732          12.5                   118.9                   133.9                     -5.6
Mainland China
                           697,069,989          349,377,373           49.9                     5.0                    22.5                     -7.2
(export sales)
Africa                     761,455,510          513,591,812           32.6                   -49.5                   -54.1                    +6.8
Oceania                    352,779,360          311,809,525            11.6                  -33.6                   -26.1                     -9.0

     Notes to the main business by sectors, products and regions
     1: The amount listed in “Chinese Mainland (export sales)” in “Main business by regions” was the main operation income
from the export sales of this Company to the overseas subsidiaries or the related parties of the Company and then sales to
the related projects of the domestic customers.
     2: The Company expanded the business in Europe in this year, resulting in the corresponding rise in operating revenue.

    (2) Analysis table of cost-volume-profit relationship
    □Applicable √ Not Applicable

    (3) Cost analysis table
                                                                                                                                               Unit: Yuan

                                                                      By products

                                                                   Proportion in                       Proportion of the one
                                                                                      Amount in the
                                                 Amount in the      total cost in                      in the same period of Year-on-year
     Product        Items of cost structure                                           same period of                                             Notes
                                                 current period     the current                        the last year in total   change (%)
                                                                                       the last year
                                                                     period (%)                             costs (%)
                                                                                                                                                Normal
                    Raw material cost, labor
Port machinery                                  13,240,912,286                64.8 11,405,896,707                        63.6         16.1     operating
                    cost and production cost
                                                                                                                                              fluctuations
                                                                                                                                                Normal
Heavy-duty          Raw material cost, labor
                                                 1,218,182,031                    6   2,608,895,653                      14.5         -53.3    operating
equipment           cost and production cost
                                                                                                                                              fluctuations
Engineering                                                                                                                                     Normal
                    Raw material cost, labor
construction                                     2,428,961,159                11.9    1,455,633,864                       8.1         66.9     operating
                    cost and production cost
projects                                                                                                                                      fluctuations
                                                                                                                                                Normal
Steel structure and Raw material cost, labor
                                                 2,571,473,994                12.6    1,656,155,935                       9.2         55.3     operating
related income      cost and production cost
                                                                                                                                              fluctuations
                                                                                                                                                Normal
Marine transport    Raw material cost, labor
                                                   959,513,561                 4.7      813,493,342                       4.5         17.9     operating
and others          cost and production cost
                                                                                                                                              fluctuations

    Other information about cost analysis
    None.



                                                                                                                                                           9
     (4) Particulars about main customers and suppliers
    √ Applicable □ Not Applicable
    The sales volume of Top 5 customers was RMB 3.81165 billion, accounting for 16% of total annual sales volume; the
sales volume of the related parties in that of Top 5 customers was RMB 1.44365 billion, accounting for 6% of total annual
sales volume.
    The purchase amount of Top 5 suppliers was RMB 3.68803 billion, accounting for 14% of total annual purchase amount;
the purchase of the related parties in that of Top 5 suppliers was RMB 1.55912 billion, accounting for 6% of total annual
purchase amount.
    Other notes
    None.

     3.Expenses
    √ Applicable □ Not Applicable
    The research and development expenditures of the Company in 2019 was RMB 887,096,178, representing a year-
on-year increase of 31.89%. The increase was mainly caused by the increase in the expenses for the research and
development projects of the Company.

     4. Investment in R&D
     (1) Detail table of investment in R&D
     √ Applicable □ Not Applicable
                                                                                                                Unit: Yuan

 Current expensed investment in R&D                                                   887,096,178

 Current capitalized investment in R&D                                                 26,086,662

 Total investment in R&D                                                              913,182,840

 Proportion of total investment in R&D in operating revenue(%)                               3.71

 Number of R&D employees in the Company                                                     1,695

 Proportion of number of R&D employees in the total
                                                                                            19.48
 employees of the Company (%)

 Proportion of capitalized investment in R&D (%)                                             2.86


     (2) Explanation
     □Applicable √ Not Applicable

     5. Cash flow
     √ Applicable □ Not Applicable
     The net cash flow from operating activities was RMB 1.290 billion, mainly caused by the increase in payment for goods
and project funds received from the sales of goods/rendering of labor services; The net cash flow from the investment
activities was RMB -1.547 billion, mainly caused by the decrease in cash payment for purchase and construction of fixed
assets of the Company. The net cash flow from the financing activities was RMB 142 million, mainly caused by the increase
in the bank borrowings by the Company.

2    Explanation for the significant changes in profits due to non-main business
     □Applicable √ Not Applicable

3    Analysis of assets and liabilities
     √ Applicable □ Not Applicable




10
    1. Assets and liabilities
                                                                                                                                 Unit: Yuan

                                                             Proportion of the                     Proportion of the
                                        Amount at                                   Amount at                             Year- on-
                                                            amount at the end                    amount at the end of
               Item                   the end of the                              the end of the                         year change Notes
                                                           of the current period                  the previous period
                                      current period                             previous period                             (%)
                                                            in total assets (%)                  in the total assets (%)

Financial assets held for trading      1,739,792,062                      2.34                 -                 0.00     100.00%

Financial assets measured at
fair value through the current                         -                  0.00       52,920,084                  0.07      -100.00
profit or loss
Notes receivable                           5,650,000                      0.01      189,371,105                  0.27       -97.02
Receivables financing                   406,408,604                       0.55                 -                 0.00     100.00%
Advances to suppliers                   935,878,777                       1.26    1,681,187,715                  2.38       -44.33
Non-current assets maturing
                                       1,313,203,581                      1.76      894,638,424                  1.27        46.79
within one year
Non-current assets                      720,183,574                       0.97    1,152,476,439                  1.63       -37.51

Available-for-sale financial assets                    -                  0.00    1,214,533,554                  1.72      -100.00

Other equity instrument
                                          61,981,268                      0.08                 -                 0.00       100.00
investment
Construction in progress               4,380,489,888                      5.89    3,050,468,292                  4.32        43.60
Short-term borrowings                 22,001,319,380                     29.57   16,554,687,487                 23.45        32.90
Advances from customers                 822,987,986                       1.11      494,744,374                  0.70        66.35
Non-current liabilities maturing
                                       7,287,484,513                      9.79    4,209,532,510                  5.96        73.12
within one year
Long-term borrowings                   8,413,339,986                     11.31   15,097,725,259                 21.39       -44.27
Other non-current liabilities           376,626,821                       0.51      288,474,696                  0.41        30.56

     Other notes
     The changes in the financial assets held for trading were mainly caused by the implementation of the new financial
instrument standards by the Company and reclassification of financial assets.
     The decrease in financial assets measured at fair value through the current profit or loss was mainly caused by the
expiration of the forward foreign exchange contract purchased by the Company.
     The decrease in the notes receivable was mainly caused by the implementation of the new financial instrument
standards by the Company and reclassification of financial assets.
     The increase in the receivables financing was mainly caused by the implementation of the new financial instrument
standards by the Company and reclassification of financial assets.
     The changes in the advances to suppliers were mainly caused by the increase in the carry-forward of advances to
suppliers upon the arrival of the productive materials purchased by the Company.
     The increase in the non-current assets maturing within one year was mainly caused by the increase in the long-term
receivables maturing within one year.
     The decrease in other current assets was mainly caused by the decrease in the deductible VAT input tax of the
Company.
     The decrease in the available-for-sale financial assets was mainly caused by the implementation of the new financial
instrument standards by the Company and reclassification of financial assets.
     The increase in the other equity instrument investment was mainly caused by the implementation of the new financial
instrument standards by the Company and reclassification of financial assets.
     The increase in the construction in progress was mainly caused by the increase in the large machinery and engineering
equipment in progress.


                                                                                                                                        11
     The increase in short-term borrowings was mainly caused by the increase in the short-term current fund loan required
by the production of the Company.
     The increase in the advances from customers was mainly caused by the increase in the payment for goods received in
advances from customers.
     The increase in the non-current liabilities maturing within one year was mainly caused by the increase in the long-term
bank borrowings maturing within one year.
     The decrease in the long-term borrowings was mainly caused by the increase in the long-term borrowings maturing
within one year.
     The increase in the other non-current liabilities was mainly caused by the increase in the output tax to be carried
forward.

     2. Particulars about main restricted assets by the end of the reporting period
     √ Applicable □ Not Applicable

                            Book value at the end of the
          Item                                                                      Reason for restriction
                                      period

                                                           Special fund, letter of guarantee from the bank and guarantee fund
 Monetary funds                        242,272,475         for L/C collected from the overseas projects and deposited in the
                                                           overseas supervision account

 Fixed assets                      5,694,247,285           Collateral for loan

 Long-term receivables             4,482,230,928           Hypothecation for loan

 Total                            10,418,750,688           /


     3. Other information
     □Applicable √ Not Applicable

4    Analysis of operational information of the industry
     √ Applicable □ Not Applicable
     The value of the newly concluded contracts by the Company on the port machinery was USD 2.96 billion, with a year-
on-year increase of 11.61%. The value of the newly concluded contracts on marine engineering products and steel structure
was USD 1.463 billion, with a year-on-year increase of 62.02%, among which the one on steel structure was USD 697
million. The value of the newly concluded contracts on investment business was RMB 2.037 billion, with a year-on-year
increase of 5.05%.
     In the port machinery industry, the increase in market demand for traditional new equipment has slowed down.
Businesses such as the construction of automated terminals, after-sales maintenance and renovation of existing equipment
have become new bright spots in the market. With the official commercialization of 5G technology, cutting-edge technologies
such as 5G, artificial intelligence and big data will accelerate the transformation and upgrading of the port and shipping
industry.
     In the offshore industry, as the country attaches more importance to the development of the marine economy, the
demand for offshore supporting services such as energy exploitation, transportation, and installation will increase to a certain
extent, but the trend of international oil prices still brings uncertainty to the recovery time of the offshore industry.
     The steel structure industry benefited from the increase in investment in infrastructure, and the overall situation of the
industry is more optimistic. However, due to the low access threshold, the competition is fiercer, and the efficiency needs to
be further improved.
     The investment industry continues to be optimized, driving the entire industry chain to a new development track.
Domestic investment in industries such as manufacturing, infrastructure, and green energy has entered a stage of high-
quality development. For a long period of time in the future, funds will continue to be biased towards the common benefit of
supply and demand, advanced manufacturing and livelihood construction with multiplier effects, infrastructure construction,
and other fields.



12
     For emerging industries, the exploration and application of 5G and digital technologies will continue to empower
manufacturing. The reconstruction of old communities, the construction of prefabricated buildings, and the construction of
smart cities are in line with the needs of the times and present strong development potential. With the support of national
policies, the integrated development industry has gradually optimized its market environment, gradually consolidated its
industrial foundation and integrated its content.

5     Analysis of investment
      1.Overall analysis of external equity investment
      √ Applicable □ Not Applicable

Investment amount by the end of reporting period                                                                            4,644,773,553

Changes in investment amount (RMB)                                                                                            654,438,239

Investment amount in the same period of the last year                                                                       3,990,335,314

Change in investment amount (%)                                                                                                         16.40

     On January 9, 2019, the fourth meeting of the seventh Board of Directors of the Company deliberated and approved
the Proposal on the Subscription of Non-Public Issuance of A Shares by COSCO SHIPPING HOLDINGS, and the Company
subscribed 111,111,111A shares issued in a non-public manner by COSCO SHIPPING HOLDINGS with the self-owned fund
amounting to RMB 419,999,999.58. During the reporting period, the Company has completed the subscription of A-shares
issued in a non-public manner by COSCO SHIPPING HOLDINGS.
     (1) Significant equity investment
     □Applicable √ Not Applicable

      (2) Significant non-equity investment
      □Applicable √ Not Applicable

      (3) Financial assets measured at fair value
      √ Applicable □ Not Applicable
                                                                                                                       Changes in
                               Initial            Initial              Final          Book value    Profit or loss
                Stock                                                                                                owners’ equity       Accounting          Source of
Stock code                  investment     shareholding            shareholding at the end of       in reporting
             abbreviation                                                                                              during the            subject            shares
                                cost         ratio (%)               ratio (%)        the period       period
                                                                                                                     reporting period
                                                                                                                                         Financial assets     Purchase on
03969        CRSC           617,854,000                     1.40               1.40   479,560,537   -112,212,511        -112,212,511
                                                                                                                                          held for trading       market
                                                                                                                                         Financial assets     Purchase on
06198        Qingdao Port   308,515,588                     1.59               1.59   510,671,771     33,958,518          33,958,518
                                                                                                                                          held for trading       market
                                                                                                                                         Financial assets
300095       Huawu Stock      11,071,606                    5.88               5.88   132,211,332     30,048,031          30,048,031                          Contribution
                                                                                                                                          held for trading
             COSCO
                                                                                                                                         Financial assets
601919       SHIPPING       420,000,000                        -               0.91   585,555,555   165,555,556          165,555,556                          Subscription
                                                                                                                                          held for trading
             HOLDINGS

      Stock equity held in financial enterprises
                                                                                                Changes
                  Initial          Initial              Final    Book value at Profit or loss in owners’
    Object                                                                                                                              Accounting            Source of
               investment      shareholding         shareholding the end of the in reporting equity during
    name                                                                                                                                 subject               shares
                   cost          ratio (%)            ratio (%)      period        period     the reporting
                                                                                                 period
Shenwan                                                                                                                             Financial assets
                    200,000              ﹤0.01                    ﹤0.01        1,119,345          229,553            229,553                               Subscription
Hongyuan                                                                                                                            held for trading




                                                                                                                                                                          13
6     Sales of significant assets and equities
      □Applicable √ Not Applicable

7     Analysis of the primary holding companies and the joint-stock companies
      √ Applicable □ Not Applicable
                                                                                                                    Registered                       Net profit/
        Company Name                                       Main product or services                                                 Assets size
                                                                                                                      capital                          (loss)
                                    Construction and installation of large-scale port equipment,
                                    engineering vessels, offshore heavy equipment, mechanical
Shanghai Zhenhua Heavy
                                    equipment, gear box for wind power generation equipment; large-
Industries Group (Nantong)                                                                                            591,102,663    1,454,550,119    47,393,360
                                    sized reverse branch, transmission mechanism, dynamic positioning,
Transmitter Co., Ltd.
                                    large-sized anchor windlass, offshore oil platform lifting device and
                                    components; design and manufacturing of the accessories.
Nanjing Ninggao New Channel         Engaged in the construction, investment and management of
                                                                                                                      100,000,000     573,330,814     33,186,360
Construction Co., Ltd               Nanjing-Gaochun new channel project.
                                    System integration design, R&D and manufacturing of tunnel boring
                                    machine with the diameter of over 6m; system integration design,
                                    R&D and manufacturing of tunnel boring machine (TBM) with the
                                    diameter of over 5m; design, R&D and manufacturing of marine
                                    machinery and parts, cranes and parts, bridges and high damping
                                    bracket for buildings; sales of self-produced products. Whole sales
Tianhe Mechanical Equipment         and import & export business of marine machinery and parts, cranes
                                                                                                                      681,627,100    5,116,525,525    71,810,934
Manufacturing Co., Ltd of CCCC      and parts, bridges and high damping bracket for buildings (if no
                                    commodity controlled by the national trade, designed quota and
                                    license is involved, the related national rules will prevail); installation,
                                    maintenance, leasing, consulting, technical services for its self-
                                    produced products (foreign capital proportion is less than 25%) (as
                                    for the items requiring the approval, carry out the business activities
                                    after obtaining the approval from the authorities)
                                    Operation of international offshore sea transportation; ordinary
Shanghai Zhenhua Shipping Co.,
                                    cargo liner traffic in the middle and lower reaches of Yangtze River;             120,000,000    1,741,180,746    -63,701,126
Ltd
                                    transportation of port machinery.
Shanghai Zhenhua Port               Design, manufacturing and sales of port machinery, engineering
                                                                                                                   HKD 50,000,000   14,248,751,060   -231,684,714
Machinery (Hong Kong) Co., Ltd.     vessel, steel structure and other parts
                                    Sales of port loading and unloading machine, bulk cargo and
                                    container machine, port engineering vessels (including floating
Shanghai Zhenhua Heavy
                                    engineering crane), material handling mechanical products and
Industries Port Machinery General                                                                                   2,184,730,000    2,843,353,791     -7,940,921
                                    parts, sales and technical services, installation and maintenance,
Equipment Co., Ltd.
                                    technical consultation of all types of machine and equipment, key
                                    parts of the raw materials and accessories equipment.
                                    Installation of heavy port equipment, engineering vessels, heavy
                                    metal structure and its parts; manufacturing and installation of gear
Nantong Zhenhua Heavy
                                    box, container yard crane, super heavy-duty bridge steel structure,             1,154,936,900    3,732,350,208     3,240,217
Equipment Manufacturing Co., Ltd.
                                    heavy marine machinery equipment; leasing of cranes; specialized
                                    contracting of steel structures etc.
ZPMC Qidong Marine Engineering
                                    Machinery manufacturing                                                           303,000,000    2,014,831,008   -142,837,846
Co., Ltd.




14
                                                                                                         Registered                       Net profit/
          Company Name                                 Main product or services                                          Assets size
                                                                                                           capital                          (loss)
                                 Agency of international land transport, air transport, ocean
                                 shipping and domestic freight; sales of large-scale port equipment,
                                 engineering vessel equipment and marine materials at home
Shanghai Zhenhua Ocean
                                 and abroad; construction of ocean engineering and leasing of              100,000,000     675,537,033      5,468,768
Engineering Service Co., Ltd
                                 engineering vessels; import and export of goods and technologies,
                                 transit trade, trade between enterprises and trade agency within the
                                 free trade zone.
Zhenhua Pufeng Wind Energy
                                 Installation of offshore wind turbine                                  USD 16,326,531         645,570     -7,434,259
(HongKong) Co., Ltd.
CCCC Financial Leasing Co., Ltd. Finance lease                                                           5,000,000,000   41,279,094,102   386,156,164

China Communications
                                 Construction of port, waterway, highway and bridge.                    USD 50,000,000     253,126,692     -8,972,397
construction USA. Inc
CCCC Estate Yixing Co., Ltd. Real estate development                                                       900,000,000    1,537,005,529    -2,269,490
                                 Fabrication and installation of steel structure; construction of
                                 the foundation for offshore wind power facilities, installation and
Jiangsu Longyuan Zhenhua
                                 maintenance of equipment; construction and maintenance of                 260,000,000    2,693,210,398    33,230,880
Marine Engineering Co., Ltd
                                 submarine cable system, construction of marine engineering;
                                 installation and maintenance of equipment and leasing of equipment.
Greenland Heavylift (Hongkong)
                                 Marine transport                                                       USD 91,975,158    2,244,921,836   -18,416,656
Limited


8    Particulars about structured entities controlled by the Company
    □Applicable √ Not Applicable

III. Discussion and analysis of the future development of the Company
1    Industrial structure and trend
      √ Applicable □ Not Applicable
      The demand for port machine products remained stable; the overall profitability of upstream shipping companies from
the recent situation is conducive to the long-term development of the terminal industry; the development of automation and
intelligent technologies will continue to empower terminals and lead the future development of global terminals. Driven by
the upsizing trend of container shipping, the shore bridge heightening market will continue to grow; due to the superposition
of various factors such as port group integration, terminal re-planning, equipment re-maintenance and re-manufacturing, the
equipment relocation market will also maintain a large growth space. Due to the continued fluctuations in international crude
oil prices, the development of offshore oil and gas projects and related equipment demands remain to be seen. It is still a
common phenomenon in the industry to obtain steel structure orders depending on the general contracting of the project.
Large, heavy and special steel structures with high-tech added value are still the direction of efforts for steel structure
enterprises to improve the industry competitiveness. With the deep development of green renewable energy, offshore
wind power is expected to become the first choice for clean energy in a certain period in the future. As an important basic
equipment for the construction of wind farms, offshore wind power installation vessels have broad development space. The
integration of the Yangtze River Delta, the development of emerging regional markets such as the Guangdong-Hong Kong-
Macao Greater Bay Area, Xiong'an, Hainan and Fujian, and the launch of some major engineering projects have placed
higher demands on the investment capabilities of enterprises.
      The livelihood consumption such as elevator installation, three-dimensional garage products, smart logistics, marine
ranch industry and other fields has vast market space. In the future, the digital economy model will benefit from the
improvement of the network scale effect, realize the rapid optimal allocation and regeneration of resources, and further form
an economic form of high-quality development. The development of the digital industry will face greater opportunities for
development.




                                                                                                                                                    15
2    Development strategy of the Company
      √ Applicable □ Not Applicable
      By taking “equipment manufacturing“ as the entity, “capital operation” and “Internet” as two wings, it aims to build
“Flag + Flagship” of Chinese national industry. “One Entity with Two Wings” strategy is a new strategy for transformation
and upgrade of the Company after objectively analyzing the development stage and orientation of the Company, based on
national and industrial development trend at present and in future, around “Industry 4.0”and“Made in China 2025”, by firmly
seizing the development opportunities of the reform of state-owned enterprises “Double Hundred Action”, in combination
with the development features of equipment manufacturing industry. “Capital operation” will help the Company to extend the
industrial chain of the port machine business and create the whole industrial chain of marine heavy industry and offshore
wind power; help the Company and the customers as well as the partners to form a community of a shared future with the
capital as the tie. The digitized transformation and upgrade of the Company under “Internet” can accelerate the upgrade
of the information system in an all-round way and create the cloud platform through the top information-oriented design
of the Company to offer more convenient, efficient, intelligent and integrated service to the global customers. Meanwhile,
by using 5G technology as a carrier, we continue to enrich the concept of "Internet" and use smart port construction as a
breakthrough to further expand the rich connotation of "+ 5G" and apply 5G technology to various fields such as strategy,
design, manufacturing, products, services, etc. to promote the quality revolution, efficiency revolution, power revolution of the
Company.

3    Operation plan
      √Applicable □Not applicable
      Guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Company fully
implemented spirit of the 19th National Congress of the Communist Party of China, the second plenary session of the
19th Central Committee of the Communist Party of China, the third plenary session of the 19th Central Committee of the
Communist Party of China and the fourth plenary session of the 19th Central Committee of the Communist Party of China,
and the spirit of the Central Economic Working Conference and the meeting of leaders of central enterprises, stayed close to
its striving goal of becoming the excellent company worldwide with the international competitiveness and continuing to build
the “Flag + Flagship” of China’s national industry, followed the general principle of making progress while working to keep
performance stable, and persisted to the new development concept and the strategy of “One Body Two Wings”, focused on
improving the company development quality and capacity level, continued to deepen reform as the main force, promoted
the green, high-quality development, and comprehensively carried out reform, development and stability, to guarantee the
steady, sustained and healthy development of all tasks of the Company.
      The Company will try its best to expand the business related to the port machinery market and continue to increase
the development and promotion of the market of automated terminals. It will seize the market opportunities in "the Belt and
Road” countries, intensify the promotion of domestic accessories for port machinery products, and increase the market share
of autonomic electric cabinet and gear box. It will continue to fill the gap in the product chain of port machinery, and expand
the market for port machinery mobile machines, such as the straddle carrier, front-facing cranes, reach stacker and forklift.
Through the integration of resources, the Company will improve user experience, and expand the Company's full life cycle
service market rapidly and steadily. The Company will fully support and expand the port machinery renovation, relocation
and other value-added service markets; fully support the unified sales of spare parts and accessories, to quickly form the
competitive force of the Company's port machinery services.
      For ocean engineering, the Company will continue to reduce inventory and improve profitability simultaneously, do a
good job in contract performance, risk prevention and benefit improvement regarding the leased drilling platforms. It strives
to make breakthrough in ocean engineering EPC; continue to consolidate the research and development capabilities of
traditional engineering ships and promote the market-driving competitiveness via the competitiveness of ocean engineering
technology; for steel structure business, the fine steel structure manufacturing and EPC are necessary, where the correlated
market should be formed, together with the prefabricated building business developed by the Company, to improve the
diversity and profitability of steel structure products; bring into play the integrated advantages of advanced ocean engineering
and transportation equipment in different levels and types to vigorously expand the ocean engineering EPC, including
transportation, installation, operation & maintenance and disassembly; form the joint force of different units of offshore wind
power business, and consolidate offshore wind power equipment and construction advantages to strive to improve the
profitability thereof; focus on the Company's internal and external markets, continue to consolidate and expand the traditional
port machinery electronic control market, and put effort into business development, including automatic tire cranes, remote
renovation, and shore power for ships; strive to increase the market share of mechanical and electrical EPC; do a good


16
job in the intelligent manufacturing business projects under construction, and steadily improve the Company's intelligent
manufacturing level; actively explore investment opportunities related to the main business, promote the construction of
"Zhenhua incubator for mass entrepreneurship and innovation" through innovation, and give full play to the leading force of
capital operation.
     Aim at the huge development opportunity of the country's strong support for intelligent parking, accelerate the
implementation of projects through technological innovation and business model innovation, and take intelligent parking
as the starting point and breakthrough of the layout of intelligent industry, letting them continue to expand into areas such
as intelligent logistics and intelligent ocean, to promote the implementation of projects of different intelligence scenarios;
strengthen the cooperation with the government, universities and industry institutions, make effort to promote the renovation
of old residential areas, campus security and other livelihood projects; give full play to and accumulate the Company's
internal and external advantages in participating in the construction of marine ranchings, accelerate and expand the
development of breeding equipment market, and accelerate the design and implementation of business models; attach great
importance to the digital economy, accelerate the digital transformation and upgrading of Zhenhua, accelerate the cultivation
of the digital industry, and turn data, flows and platform value into cash.
     The Company will focus on national strategic opportunities such as the coordinated development of the Beijing-
Tianjin-Hebei region, the integrated development of the Yangtze river delta, the construction of Yangtze river economic belt,
Guangdong-Hong Kong-Macao Greater Bay area, Xiong’an New Area, Hainan Pilot Free Trade Zone, Northeast Fujian
and Fuzhou on the sea, and make systematic plans for the development of strategic regional markets. Give full play to the
Company's strong operating strength in overseas regions, integrate the industrial chain advantages, and actively develop the
overseas project EPC market.

4   Potential risks
     √Applicable □Not applicable
     Market risk: the growth force of the world economy is weakened, the increase in the international trade slows down,
the trade friction between China and USA and the challenges from the deglobalization trend on the global economy impose
some uncertainties on the development of the Company. The market competition of the container port machinery is still
fierce, the ocean engineering industry is slightly resuscitative, but the sign of reverse turnaround and upgrade is not so
remarkable. Other new businesses are still in the infant stage.
     Countermeasures: the Company will study and determine the current political and economic situation in depth, highly
concern the market change and carry out the benchmarking management like the high quality companies in the same
industry, deepen the reform, tamp the basic management, enhance the risk resistivity, optimize and adjust the market and
business structure, seek for increment from the strategic opportunity, business expansion, internal and external cooperation,
investment, acquisition and overseas projects, accelerate the structural readjustment and resources integration and
accelerate the sustainable development of the enterprise through the transformation and upgrade.
     Financial risk: it mainly includes exchange rate risk and credit risk.
     Countermeasures: Lock in the forward exchange rate through rational planning, control exchange rate risks, gradually
reduce the foreign exchange liabilities, pay attention to the research on policies and strategies of foreign exchange risk
management, closely concern the changes in exchange rates, regularly analyze the trend of exchange rate, strictly conduct
the approval procedure related to the transaction of the financial derivatives, do well in statistics of the products, currencies
and exchange rates, further tamp the basic work of the foreign exchange management and reduce the Company’s exchange
rate risk. By arranging favorable settlement terms in the contract (If a contract linked to the RMB exchange rate is signed,
settlement of exchange should be done as soon as possible as the proportion of advance payment increases.), or control
and lock in the exchange rate risks with proper financial instruments or means.
     As to credit risk, reduce raw material reserves, cut down the capital expenditure, adjust the Company’s debt structure
in many ways (such as medium-term notes, short-term financing bond, perpetual bond), strengthen the collection of the
accounts receivable, reduce the amount of bank debt step by step and reduce the business risks of the enterprise.

5   Others
    □Applicable √Not applicable

IV. Explanation for non-disclosure in accordance with the accounting standard due to being not applicable to the
provisions of the standard or state secret and business secrete and other special reasons
    □Applicable √Not applicable

                                                                                                                              17
Section V                        Important Events


I. Proposal for profit distribution of ordinary shares or convention of capital reserves into bonus sharess
1      Formulation, implementation or adjustment of cash dividend distribution policies
     √Applicable □Not applicable
     According to the requirements of the Circular on Further Implementation of Relevant Matters Concerning Cash
Dividend Distribution of Listed Companies (ZJF [2012] No. 37) issued by the CSRC, as proposed by the 10th meeting of
the Company’s fifth session of Board held on August 21, 2012, amendments were made to the Articles of Association of the
Company concerning profit distribution and cash dividends policy, and as a result, the dividend distribution standard and
proportion became clearer, related decision making process and mechanism were compete, and the minority shareholders’
legal rights and interests were fully protected, giving them the opportunity to fully express their views and demands.

2      The Company’s plan or proposal for profit distribution of ordinary shares, plan or proposal for the convention
of capital reserves into bonus shares in recent 3 years (including the reporting period)
                                                                                                                Unit: Yuan Currency: RMB

                                                                                      Net profit attributable
                                                                                                                  Ratio of the net profit
                   Bonus                                                                 to the ordinary
                                 Dividend for          Shares                                                       attributable to the
     Year for      shares                                            Amount of        shareholders of the
                                every 10 shares    converted for                                                  ordinary shareholders
     dividend     for every                                         cash dividend    listed company in the
                                  (Yuan) (tax     every 10 shares                                                 of the listed Company
 distribution     10 shares                                         (tax included)   consolidated statement
                                   included)           (share)                                                     in the consolidated
                   (share)                                                           in the year for dividend
                                                                                                                     statements (%)
                                                                                           distribution

      2019            0                0.5               0           263,417,675           514,930,143                     51.16

      2018            0                0.5               0           263,417,675           443,005,092                     59.46

      2017            0                0.5               2           219,514,729           300,195,422                     73.12


3      Shares repurchased by offer in cash and included in cash dividends
       □Applicable √Not applicable

4      If the profit is positive in the reporting period and the profit of the parent company available for distribution
to the ordinary shareholders is positive but the Company does not represent the plan or proposal for profit
distribution of ordinary shares in cash, the Company shall disclose in detail the reasons and the purpose and use
plan of the undistributed profit
       □Applicable √Not applicable

II. Fulfillment of commitments
1      Commitments of the actual controller, shareholders, related parties, acquirer, companies of the Company in the
reporting period or ongoing at the period-end
       □Applicable √Not applicable

2      If there is earnings forecast for the assets or projects of the Company and the reporting period is still in the
earnings forecast period, the Company shall explain whether the asset or project reaches the original earnings
forecast and give the reasons
       □Reached □Failing to reach √Not applicable


18
3   Fulfillment of commitments on the performance and its impacts on goodwill impairment test
    □Applicable √Not applicable

III. Fund occupation and progress in returning scheme during the reporting period
    □Applicable √Not applicable

IV. Explanation of the Company for Accounting Firm’s “auditors’ report with nonstandard opinions”
    □Applicable √Not applicable

V. Analysis and explanation of the Company of the causes and the impacts of the major changes in accounting
policies and accounting estimates or correction of significant accounting errors


1   Analysis and explanation of the Company on the causes and the impacts of the changes in accounting policies
and accounting estimates
    √Applicable □Not applicable
    See “V.41 Changes in significant accounting policies and accounting estimates in Section XI” for details.

2   Analysis and explanation of the cause of correction of significant accounting errors and their impacts by the
Company
    □Applicable √Not applicable

3   Communication with former CPA firm
    □Applicable √Not applicable

4   Other description
    □Applicable √Not applicable

VI. Engagement and dismissal of the public accounting firm
                                                                                                              Unit: Yuan Currency: RMB

                                                                                             Now engaging

 Name of the domestic accounting firm                                        Ernst & Young LLP. (Special General Partnership)

 Remuneration of domestic accounting firm                                                         4,700,000

 Audit term of the domestic accounting firm                                                               4


                                                                          Name                                  Remuneration

 Accounting firm performing internal control audit   Ernst & Young LLP. (Special General Partnership)              450,000

    Particulars about the engagement and dismissal of the accounting firm
    □Applicable √Not applicable

    Particulars about reappointment of the accounting firm in the auditing period
    □Applicable √Not applicable

VII. Risk of suspension of the listing
1   Cause for shares suspended from listing
    □Applicable √Not applicable



                                                                                                                                   19
2     Countermeasures to be taken by the Company
      □Applicable √Not applicable

VIII. Termination of the listing and its reasons
      □Applicable √Not applicable

IX. Events related to bankruptcy and reorganization
      □Applicable √Not applicable

X. Major lawsuit and arbitration issues
      √Existence of major lawsuit and arbitration in the year □No major lawsuit or arbitration in the year

1     Lawsuit and arbitration already disclosed in provisional announcement, without follow-up progress
      □Applicable √Not applicable

2     Lawsuit and arbitration not disclosed in provisional announcement, or with follow-up progress
      √Applicable □Not applicable
                                                                                                                                                         Unit: Yuan Currency: RMB
In the reporting period:
                                                                                                                      Estimated
                            Party                                                                  Amount                                                 Results of the   Execution of
                                       Type of                                                                      liabilities and        Progress
  Plaintiff   Defendant   bearing                                                                 involved                                                    lawsuit      adjudication
                                     lawsuit and     Background of the lawsuit (arbitration)                       amount caused          in lawsuit
(applicant) (respondent)    joint                                                                in lawsuit                                                (arbitration)    of lawsuit
                                      arbitration                                                                     by lawsuit         (arbitration)
                         liabilities                                                            (arbitration)                                              and impacts     (arbitration)
                                                                                                                 (arbitration) or not
                                                    At the end of February 2014, the Company
                                                    completed the acquisition of the former
                                                    Jiangsu Daoda Ocean Engineering Co.,
                                                    Ltd through capital increase and held 67%
                                                    of the shares. At the same time, it was
Shanghai                                            agreed that the losses of the company,
Zhenhua                                             was borne by the former shareholders
Heavy                                               including Nantong Huafu Port Co., Ltd, Li
              Nantong
Industries                                          Aidong and Zhao Xiaohua before February
              Huafu Port
Co., Ltd,                                           28, 2014. During the subsequent business                                            The case is still
              Co., Ltd, Li   None      Lawsuit                                                  368,722.000.00            0                               Not yet judged Not yet judged
and ZPMC                                            process, it was found that the former Daoda                                            pending
              Aidong, and
Qidong                                              Company untruthfully disclosed some
              Zhao Xiaohua
Marine                                              matters of lawsuit or debts, resulting in a
Engineering                                         series of losses of the Company. Through
Co., Ltd.                                           the related audit and readjustment etc., it
                                                    was deemed that the loss of RMB 368.7222
                                                    million Yuan should be in borne in the
                                                    former shareholders and the lawsuit was
                                                    prosecuted again after an inconclusive
                                                    press for payment.



3     Other description
      □Applicable √Not applicable

XI. Punishment to the listed Company and its directors, supervisors, senior executives, controlling shareholder,
actual controller and acquirer and the rectification
      □Applicable √Not applicable

XII. Particulars about the credit conditions of the Company and its controlling shareholder and the actual controller
during the reporting period
      □Applicable √Not applicable

XIII. The Company’s equity incentive plan, employee stock ownership plan or other incentives to the employees and
their impacts



20
1     Related incentives disclosed in provisional announcement, without progress or change in follow-up
implementation
      □Applicable √Not applicable

2     Incentives not disclosed in provisional announcement or with follow-up progress
      Equity incentive
      □Applicable √Not applicable
      Other description
      □Applicable √Not applicable

      Information about employee stock ownership plan
      □Applicable √Not applicable
      Other incentive measures
      □Applicable √Not applicable

XIV. Material related transactions
1     Related transactions relevant to routine business
      1. Events disclosed in provisional announcement, without progress or changes in follow-up implementation
      □Applicable √Not applicable

      2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation
      □Applicable √Not applicable

      3. Events not disclosed in provisional announcements
      √Applicable □Not applicable
                                                                                                                                                                         Unit: Yuan Currency: RMB
                                                                                                                                                                                                     Reason
                                                                                                                                                      Proportion                                    for great
                                                                                                   Pricing                                               in the     Settlement                    differences
                                                          Type of                                                  Prince of
                                                                         Content of related       principle                      Amount of related      amount        mode of                       between
        Related party               Relationship           related                                                  related                                                       Market price
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                                                        transaction                                              transaction
                                                                                                transaction                                          transactions   transaction                    price and
                                                                                                                                                          (%)                                        market
                                                                                                                                                                                                      price

China Road & Bridge             Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
                                                                                                                 1,678,140,641       1,678,140,641           0.07                 1,678,140,641        /
Corporation                     parent company           other inflows    lease of assets      on market price                                                         fund

CCCC Financial Leasing Co.,     Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
                                                                                                                  667,073,687          667,073,687           0.03                  667,073,687         /
Ltd.                            parent company           other inflows    lease of assets      on market price                                                         fund

CCCC Second CCCC Second         Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
                                                                                                                  337,523,772          337,523,772           0.01                  337,523,772         /
Harbor Engineering Co., Ltd.    parent company           other inflows    lease of assets      on market price                                                         fund

Jiangsu Longyuan Zhenhua                                Selling goods/    Project income/       Pricing based                                                        Monetary
                                Joint venture                                                                     248,918,845          248,918,845           0.01                  248,918,845         /
Marine Engineering Co., Ltd                              other inflows    lease of assets      on market price                                                         fund

China Communications            Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
                                                                                                                  231,935,329          231,935,329           0.01                  231,935,329         /
Construction Company Ltd.       parent company           other inflows    lease of assets      on market price                                                         fund

CCCC Second Highway             Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
                                                                                                                  230,557,910          230,557,910           0.01                  230,557,910         /
Engineering Co., Ltd.           parent company           other inflows    lease of assets      on market price                                                         fund

CCCC First Highway              Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
                                                                                                                  126,158,585          126,158,585           0.01                  126,158,585         /
Engineering Co., Ltd.           parent company           other inflows    lease of assets      on market price                                                         fund

CCCC Electrical and
                                Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
Mechanical Engineering Co.,                                                                                       124,928,355          124,928,355           0.01                  124,928,355         /
                                parent company           other inflows    lease of assets      on market price                                                         fund
Ltd.

CCCC Third Harbor               Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
                                                                                                                  113,127,045          113,127,045             0                    113,127,045        /
Engineering Co., Ltd.           parent company           other inflows    lease of assets      on market price                                                         fund

Road & Bridge International     Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
                                                                                                                   95,683,938           95,683,938             0                     95,683,938        /
Co., Ltd.                       parent company           other inflows    lease of assets      on market price                                                         fund

China Harbor Engineering Co.,   Holding subsidiary of   Selling goods/   roject income/lease    Pricing based                                                        Monetary
                                                                                                                   45,102,497           45,102,497             0                     45,102,497        /
Ltd.                            parent company           other inflows         of assets       on market price                                                         fund

CCCC Third Highway              Holding subsidiary of   Selling goods/    Project income/       Pricing based                                                        Monetary
                                                                                                                   30,678,385           30,678,385             0                     30,678,385        /
Engineering Co., Ltd.           parent company           other inflows    lease of assets      on market price                                                         fund




                                                                                                                                                                                                           21
                                                                                                                                                                                                      Reason
                                                                                                                                                       Proportion                                    for great
                                                                                                    Pricing                                               in the     Settlement                    differences
                                                            Type of                                                 Prince of
                                                                           Content of related      principle                      Amount of related      amount        mode of                       between
        Related party                 Relationship           related                                                 related                                                       Market price
                                                                             transaction          of related                        transaction         of similar   associated                    the bargain
                                                          transaction                                             transaction
                                                                                                 transaction                                          transactions   transaction                    price and
                                                                                                                                                           (%)                                        market
                                                                                                                                                                                                       price

Installation Engineering Co.,
                                  Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
Ltd. of CCCC First Harbor                                                                                           28,657,101           28,657,101             0                     28,657,101        /
                                  parent company           other inflows    lease of assets     on market price                                                         fund
Engineering Co. Ltd.

CCCC - SHEC Third Highway         Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
                                                                                                                    26,395,514           26,395,514             0                     26,395,514        /
Engineering Co., Ltd.             parent company           other inflows    lease of assets     on market price                                                         fund

                                  Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
CCCC Tianjin Dredging Co., Ltd.                                                                                     21,822,759           21,822,759             0                     21,822,759        /
                                  parent company           other inflows    lease of assets     on market price                                                         fund

CCCC Marine Engineering &
                                  Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
Technology Research Center                                                                                           8,345,339            8,345,339             0                      8,345,339        /
                                  parent company           other inflows    lease of assets     on market price                                                         fund
Co., Ltd.

Hong Kong Marine Construction     Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
                                                                                                                     7,992,047            7,992,047             0                      7,992,047        /
Limited                           parent company           other inflows    lease of assets     on market price                                                         fund

CCCC Fourth Highway               Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
                                                                                                                     7,874,250            7,874,250             0                      7,874,250        /
Engineering Co., Ltd.             parent company           other inflows    lease of assets     on market price                                                         fund

No.3 Engineering Co., Ltd.
                                  Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
of CCCC Third Harbor                                                                                                 7,230,066            7,230,066             0                      7,230,066        /
                                  parent company           other inflows    lease of assets     on market price                                                         fund
Engineering Co., Ltd.

CCCC First Harbor                 Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
                                                                                                                     6,829,633            6,829,633             0                      6,829,633        /
Engineering Co., Ltd.             parent company           other inflows    lease of assets     on market price                                                         fund

CCCC Tunnel Engineering Co.,      Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
                                                                                                                      6,135,411           6,135,411             0                      6,135,411        /
Ltd.                              parent company           other inflows    lease of assets     on market price                                                         fund

No.4 Engineering Co., Ltd.
                                  Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
of CCCC Second Harbor                                                                                                6,037,290            6,037,290             0                      6,037,290        /
                                  parent company           other inflows    lease of assets     on market price                                                         fund
Engineering Co., Ltd.

                                  Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
CCCC Tianjin Dredging Co., Ltd.                                                                                      4,716,981            4,716,981             0                      4,716,981        /
                                  parent company           other inflows    lease of assets     on market price                                                         fund

China Communications 2nd
                                  Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
Navigational Bureau 3rd                                                                                              3,750,000            3,750,000             0                      3,750,000        /
                                  parent company           other inflows    lease of assets     on market price                                                         fund
Engineering Co., Ltd.

Shanghai Communications
                                  Holding subsidiary of   Selling goods/    Project income/      Pricing based                                                        Monetary
Construction Contracting Co.,                                                                                           12,236               12,236             0                         12,236        /
                                  parent company           other inflows    lease of assets     on market price                                                         fund
Ltd.

No.2 Engineering Co., Ltd.                                                    Consigned
                                  Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
of CCCC Third Harbor                                                       processing for the                     1,559,123,096       1,559,123,096           0.08                 1,559,123,096        /
                                  parent company            services                            on market price                                                         fund
Engineering Co., Ltd.                                                          Company

                                                                              Consigned
CCCC Fourth Highway               Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
                                                                           processing for the                      326,099,884          326,099,884           0.02                   326,099,884        /
Engineering Co., Ltd.             parent company            services                            on market price                                                         fund
                                                                               Company

No.2 Engineering Co., Ltd.                                                    Consigned
                                  Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
of CCCC Fourth Harbor                                                      processing for the                      166,442,076          166,442,076           0.01                   166,442,076        /
                                  parent company            services                            on market price                                                         fund
Engineering Co., Ltd.                                                          Company

                                                                              Consigned
CCCC Third Harbor                 Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
                                                                           processing for the                      138,044,572          138,044,572           0.01                  138,044,572         /
Engineering Co., Ltd.             parent company            services                            on market price                                                         fund
                                                                               Company

Xing An Ji Engineering Co.,                                                   Consigned
                                  Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
Ltd. of CCCC Third Harbor                                                  processing for the                      126,919,874          126,919,874           0.01                  126,919,874         /
                                  parent company            services                            on market price                                                         fund
Engineering Co., Ltd.                                                          Company

                                                                              Consigned
CCCC Third Highway                Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
                                                                           processing for the                      102,954,724          102,954,724           0.01                  102,954,724         /
Engineering Co., Ltd.             parent company            services                            on market price                                                         fund
                                                                               Company

                                                                              Consigned
CCCC Second Harbor                Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
                                                                           processing for the                       44,626,778           44,626,778             0                     44,626,778        /
Engineering Co., Ltd.             parent company            services                            on market price                                                         fund
                                                                               Company

CCCC Water Transportation                                                     Consigned
                                  Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
Planning and Design Institute                                              processing for the                       44,003,688           44,003,688             0                     44,003,688        /
                                  parent company            services                            on market price                                                        fund
Co., Ltd.                                                                      Company

China Communications 2nd                                                      Consigned
                                  Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
Navigational Bureau 3rd                                                    processing for the                       37,974,356           37,974,356             0                     37,974,356        /
                                  parent company            services                            on market price                                                         fund
Engineering Co., Ltd.                                                          Company

                                                                              Consigned
CCCC - SHEC Second                Holding subsidiary of    Receipt of                            Pricing based                                                        Monetary
                                                                           processing for the                       32,728,018           32,728,018             0                     32,728,018        /
Highway Engineering Co., Ltd.     parent company            services                            on market price                                                         fund
                                                                               Company

                                                                              Consigned
                                                           Receipt of                            Pricing based                                                        Monetary
ZPMC Southeast Asia Pte. Ltd      Associated company                       processing for the                       31,842,242           31,842,242             0                     31,842,242        /
                                                            services                            on market price                                                         fund
                                                                               Company

                                                                              Consigned         Pricing based
                                  Holding subsidiary of    Receipt of                                                                                                 Monetary
CCCC Tianjin Dredging Co., Ltd.                                            processing for the                       30,385,226           30,385,226             0                     30,385,226        /
                                  parent company            services                            on market price                                                         fund
                                                                               Company




22
                                                                                                                                                                                                    Reason
                                                                                                                                                     Proportion                                    for great
                                                                                                   Pricing                                              in the     Settlement                    differences
                                                             Type of                                               Prince of
                                                                         Content of related       principle                     Amount of related      amount        mode of                       between
        Related party                  Relationship           related                                               related                                                      Market price
                                                                           transaction           of related                       transaction         of similar   associated                    the bargain
                                                           transaction                                           transaction
                                                                                                transaction                                         transactions   transaction                    price and
                                                                                                                                                         (%)                                        market
                                                                                                                                                                                                     price

                                                                            Consigned
                                   Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
CCCC Shanghai Dredging Co., Ltd.                                         processing for the                        27,320,344          27,320,344             0                     27,320,344        /
                                   parent company           services                           on market price                                                        fund
                                                                             Company

                                                                            Consigned
China Communications               Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                        17,482,045          17,482,045             0                     17,482,045        /
Materials & Equipment Co., Ltd     parent company           services                           on market price                                                        fund
                                                                             Company

                                                                            Consigned
CCCC Second Highway                Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                        12,744,480          12,744,480             0                     12,744,480        /
Consultants Co., Ltd.              parent company           services                           on market price                                                        fund
                                                                             Company

                                                                            Consigned
China Road & Bridge                Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                         9,772,546           9,772,546             0                      9,772,546        /
Corporation                        parent company           services                           on market price                                                        fund
                                                                             Company

ZPMC Mediterranean Liman                                                    Consigned
                                                           Receipt of                           Pricing based                                                       Monetary
Makinalari Ticaret Anonim          Joint venture                         processing for the                         9,022,814           9,022,814             0                      9,022,814        /
                                                            services                           on market price                                                        fund
Sirketi                                                                      Company

Installation Engineering Co.,                                               Consigned
                                   Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
Ltd. of CCCC First Harbor                                                processing for the                         7,202,999           7,202,999             0                      7,202,999        /
                                   parent company           services                           on market price                                                        fund
Engineering Co. Ltd.                                                         Company

                                                                            Consigned
China Communications               Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                         6,970,318           6,970,318             0                      6,970,318        /
Construction Company Ltd.          parent company           services                           on market price                                                        fund
                                                                             Company

                                                                            Consigned
CCCC Shanghai Equipment            Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                         4,533,910           4,533,910             0                      4,533,910        /
Engineering Co., Ltd.              parent company           services                           on market price                                                        fund
                                                                             Company

Shanghai Communications                                                     Consigned
                                   Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
Construction Contracting Co.,                                            processing for the                         3,843,677           3,843,677             0                      3,843,677        /
                                   parent company           services                           on market price                                                        fund
Ltd                                                                          Company

CCCC Highway Bridges                                                        Consigned
                                   Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
National Engineering Research                                            processing for the                         2,449,541           2,449,541             0                      2,449,541        /
                                   parent company           services                           on market price                                                        fund
Centre Co., Ltd.                                                             Company

CCCC Marine Engineering &                                                   Consigned
                                   Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
Technology Research Center                                               processing for the                         1,599,377           1,599,377             0                      1,599,377        /
                                   parent company           services                           on market price                                                        fund
Co., Ltd.                                                                    Company

                                                                            Consigned
CCCC First Highway                 Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                         1,153,073           1,153,073             0                      1,153,073        /
Consultants Co., Ltd.              parent company           services                           on market price                                                        fund
                                                                             Company

Shanghai China
                                                                            Consigned
Communications Water               Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                         1,008,394           1,008,394             0                      1,008,394        /
Transportation Design &            parent company           services                           on market price                                                        fund
                                                                             Company
Research Co., Ltd.

                                                                            Consigned
CCCC Third Harbor Consultants      Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                           400,000            400,000              0                       400,000         /
Co., Ltd.                          parent company           services                           on market price                                                        fund
                                                                             Company

                                                                            Consigned
CCCC (Zhoushan) Dredging           Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                           350,748            350,748              0                       350,748         /
Engineering Co., Ltd.              parent company           services                           on market price                                                        fund
                                                                             Company

No.Three Engineering Co.,                                                   Consigned
                                   Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
Ltd. of CCCC First Highway                                               processing for the                           343,394            343,394              0                       343,394         /
                                   parent company           services                           on market price                                                        fund
Engineering Co., Ltd.                                                        Company

                                                                            Consigned
CCCC First Harbor Consultants      Holding subsidiary of   Receipt of                           Pricing based                                                       Monetary
                                                                         processing for the                           128,440            128,440              0                       128,440         /
Co., Ltd.                          parent company           services                           on market price                                                        fund
                                                                             Company

                                                                            Consigned
CCCC Fourth Harbor                                         Receipt of                           Pricing based                                                       Monetary
                                   Holding subsidiary                    processing for the                            86,849              86,849             0                         86,849        /
Engineering Co., Ltd.                                       services                           on market price                                                        fund
                                                                             Company

CCCC Shanghai Equipment            Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                       Monetary
                                                                                                                   51,424,063          51,424,063           0.00                    51,424,063        /
Engineering Co., Ltd.              parent company            goods        for the Company      on market price                                                        fund

ZPMC Changzhou Coatings                                    Purchase of   Providing materials    Pricing based                                                       Monetary
                                   Associated company                                                             145,138,516         145,138,516           0.01                  145,138,516         /
Co., Ltd.                                                    goods        for the Company      on market price                                                        fund

CCCC Tianjin Industry and          Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                       Monetary
                                                                                                                    1,669,824           1,669,824           0.00                     1,669,824        /
Trade Co., Ltd.                    parent company            goods        for the Company      on market price                                                        fund

                                   Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                       Monetary
Chuwa Bussan Co., Ltd.                                                                                             36,202,211          36,202,211             0                     36,202,211        /
                                   parent company            goods        for the Company      on market price                                                       fund

CCCC Tianjin Harbor                Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                       Monetary
                                                                                                                    9,951,061           9,951,061             0                      9,951,061        /
Consultants Co., Ltd.              parent company            goods        for the Company      on market price                                                       fund

Shanghai Jiangtian Industrial      Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                       Monetary
                                                                                                                    9,429,667           9,429,667             0                      9,429,667        /
Co., Ltd.                          parent company            goods        for the Company      on market price                                                        fund

CCCC Tianjin Dredging Co.,         Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                       Monetary
                                                                                                                    5,475,264           5,475,264             0                      5,475,264        /
Ltd.                               parent company            goods        for the Company      on market price                                                       fund




                                                                                                                                                                                                          23
                                                                                                                                                                                                               Reason
                                                                                                                                                         Proportion                                           for great
                                                                                                   Pricing                                                  in the      Settlement                          differences
                                                             Type of                                                Prince of
                                                                         Content of related       principle                         Amount of related      amount         mode of                             between
        Related party                  Relationship           related                                                related                                                             Market price
                                                                           transaction           of related                           transaction         of similar    associated                          the bargain
                                                           transaction                                            transaction
                                                                                                transaction                                             transactions    transaction                          price and
                                                                                                                                                             (%)                                               market
                                                                                                                                                                                                                price

                                   Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                             Monetary
CCCC North Industrial Co., Ltd.                                                                                       3,841,523             3,841,523               0                        3,841,523           /
                                   parent company            goods        for the Company      on market price                                                              fund

CCCC Marine Engineering &
                                   Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                             Monetary
Technology Research Center                                                                                            2,451,616             2,451,616               0                        2,451,616           /
                                   parent company            goods        for the Company      on market price                                                              fund
Co., Ltd.

CNPC & CCCC Petroleum              Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                             Monetary
                                                                                                                      1,475,121             1,475,121               0                        1,475,121           /
Sales Co., Ltd.                    parent company            goods        for the Company      on market price                                                              fund

China Communications               Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                             Monetary
                                                                                                                        380,531              380,531                0                          380,531           /
Materials & Equipment Co., Ltd.    parent company            goods        for the Company      on market price                                                              fund

CCCC Third Harbor Consultants      Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                             Monetary
                                                                                                                        353,982              353,982                0                          353,982           /
Co., Ltd.                          parent company            goods        for the Company      on market price                                                              fund

CCCC Shanghai Channel              Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                             Monetary
                                                                                                                        320,806              320,806                0                          320,806           /
Equipment Industry Co., Ltd.       parent company            goods        for the Company      on market price                                                              fund

China Road & Bridge                Holding subsidiary of   Purchase of   Providing materials    Pricing based                                                             Monetary
                                                                                                                           64,214              64,214               0                           64,214           /
Corporation                        parent company            goods        for the Company      on market price                                                              fund

Total                                                                                                 /                /                7,081,363,498            0.31         /                         /        /

Details of large amount of sales returns                                                       None

                                                                                               The Proposal on Estimating Routine Related Transactions for Years 2019-2021 was approved upon deliberation at the first
                                                                                               provisional general meeting in 2019 of the Company. In 2019, the amount of the annual related transactions in the normal
Explanation for related transactions                                                           business between the Company and its subsidiaries and China Communications Construction Co., Ltd. and its subsidiaries
                                                                                               did not exceed RMB 8.3 billion. The Annual General Meeting had authorized the Company’s management to handle the
                                                                                               relevant specific matters.




2       Related transactions arising from acquisition or offering of assets or stock equity
        1. Events disclosed in provisional announcement, without progress or changes in follow-up implementation
        □Applicable √Not applicable

        2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation
        □Applicable √Not applicable

        3. Events not disclosed in provisional announcements
        □Applicable √Not applicable

        4. Where agreed performance is involved, the performance achievement during the reporting period should be disclosed
        □Applicable √Not applicable

3       Material related transactions with joint external investments
        1. Events disclosed in provisional announcement, without progress or changes in follow-up implementation
        □Applicable √Not applicable

        2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation
        □Applicable √Not applicable

        3. Events not disclosed in provisional announcements
        □Applicable √Not applicable

4       Current associated rights of credit and liabilities
        1. Events disclosed in provisional announcement, without progress or changes in follow-up implementation
        □Applicable √Not applicable




24
      2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation
      □Applicable √Not applicable

      3. Events not disclosed in provisional announcements
      □Applicable √Not applicable

5     Others
      □Applicable √Not applicable

XV. Material contracts and their performance
1     Trusteeship, contracting and leasing matters
      1. Trusteeship
      □Applicable √Not applicable

      2. Contracting
      □Applicable √Not applicable

      3. Leasing
      √Applicable □Not applicable
                                                                                                                                                            Unit: Yuan Currency: RMB

                                                                                                                                Basis for       Impacts of
                                                            Amount             Starting     Termination                                                           Related
  Name of                                 Leased                                                            Income from        determining     income from
                  Name of lessee                          involved in          date of        date of                                                           transaction Relationship
   lessor                                 assets                                                               leasing        income from     leasing on the
                                                        leased assets          leasing        leasing                                                              or not
                                                                                                                                 leasing         Company

                 Shanghai
                 Zhenlong Asset                                       2012/8/10
The                                       Lease of                                           2025/7/9
                 Management Co.,                       251,529,199.83 August 10,                           44,347,607.62          Agreed      44,347,607.62          No             Other
Company                                    houses                                           July 9, 2025
                 Ltd, and other                                         2012
                 companies

      Leasing explanation
      None

2     Guarantee
      √Applicable □Not applicable
                                                                                                                                                            Unit: Yuan Currency: RMB
                                                             External guarantee of the Company (excluding guarantee to the subsidiaries)

               Relation
                                                                                                                                                                     Guarantee
             between the                                        Date of                                             Fulfillment
                                                                                 Starting     Due                                            Amount of    Counter      by the
              guarantor      Guaranteed      Guaranteed        guarantee                                 Type of      of the      Overdue
Guarantor                                                                        date of     date of                                          overdue    guarantee    related    Relationship
               and the         party          amount        (signing date of                            guarantee   guarantee      or not
                                                                                guarantee   guarantee                                        guarantee     or not     party or
                listed                                        agreement)                                              or not
                                                                                                                                                                        not
              company

Total amount of guarantee incurred during the reporting period (excluding
guarantee to the subsidiaries)

Total balance of guarantee at the end of the reporting period (A) (excluding
guarantee to the subsidiaries)

                                                                  Guarantee of the Company and its subsidiaries to the subsidiaries

Total amount of guarantee to the subsidiaries incurred during the reporting
                                                                                                                                                                                 -1,048,320,819
period

Total balance of guarantee to the subsidiaries at the end of the reporting
                                                                                                                                                                                 2,051,665,981
period (B)




                                                                                                                                                                                            25
                                                         Total amount of guarantee of the Company (including guarantee to the subsidiaries)

Total amount of guarantee (A+B)                                                                                                                                                            2,051,665,981

Proportion of total amount of guarantee in the net assets of the Company (%)                                                                                                                        11.05

Including:

Amount of guarantee to the shareholders, the actual controller and related
parties (C)

Amount of debt guarantee directly or indirectly provided to the guaranteed
                                                                                                                                                                                           1,252,227,900
party with the asset-liability ratio over 70% (D)

Amount of guarantee exceeding 50% of net assets (E)

Total guarantee amount of the above three items (C+D+E)                                                                                                                                    1,252,227,900

Explanation for the joint and several repayment liabilities for the undue
guarantee

                                                                               The Proposal for Providing Financing Guarantee to the Subsidiary Shanghai Zhenhua Port Machinery (Hong Kong) Co.,
                                                                               Ltd. Was approved upon deliberation by the Company at the 1st provisional general meeting for 2008 held in September
                                                                               22, 2008, which agreed to provide the financial support to the subsidiary in Hong Kong and provided the guarantee with
Description of guarantee
                                                                               the upper limit of RMB 500 million for the loan it applied for through the bank. Guarantees provided by the Company to
                                                                               subsidiaries during the reporting period refer to the guarantees to subsidiaries in Hong Kong. Other guarantee matters were
                                                                               approved upon deliberation at the 30th meeting of the 5th Board of Directors.



3     Consigned cash assets management
      1.Consigned financing
      (1) General information of consigned financing
      □Applicable √Not applicable
      Other information
      □Applicable √Not applicable

      (2) Information on individual consigned financing
      □Applicable √Not applicable
      Other information
      □Applicable √Not applicable

      (3) Provision for impairment of consigned financing
      □Applicable √Not applicable

      2. Consigned loans
      (1) General information of consigned loans
      □Applicable √Not applicable
      Other information
      □Applicable √Not applicable

      (2) Individual consigned loans
      □Applicable √Not applicable
      Other information
      □Applicable √Not applicable

      (3) Provision for impairment of consigned loans
      □Applicable √Not applicable

      3. Other information
      □Applicable √Not applicable

4     Other material contracts
      □Applicable √Not applicable




26
XVI. Particulars about other important events
    □Applicable √Not applicable

XVII. Particulars about actively performing social responsibilities


1   Poverty alleviation of the listed company
    √Applicable □Not applicable

    1. Targeted poverty alleviation program
    √Applicable □Not applicable

     According to the requirements of the Decision of the Central Committee of the Communist Party of China and the State
Council on Winning the Battle Against Poverty, in order to implement the enterprise social responsibility, the Company, under
the general plan of CCCC, actively carried out the targeted poverty alleviation, and formulated the partner assistance plan in
Tue Town, Yunnan Province.

    2. Summary of annual targeted poverty alleviation
     √Applicable □Not applicable
     Since 2019, taking the principle of “Poverty Alleviation after Education” as the main working concept, the Company
centralized the resource to build the library and reading rooms for Tue Town Center Primary School, provided education
and teaching materials, facilities, equipment, and prepared the “Student Grant Plan” for over ten students in Majimi Village,
by which the local education resource lack was improved. In addition to education, the Company carried out the poverty
alleviation through consumption and employment there, and participated in the free construction project of Nujiang Dukou
Bridge, helping the local infrastructure construction.
     The Company carried out a series of assistance work, receiving favorable reviews from Tue Town Government. Tue
Town Committee of the PCP and Tue Town People’s Government issued the Decision on Commending the Winner of 2019
Tue Town Poverty Alleviation Award, and the Company won the title of “Poverty Alleviation Star Enterprise”.

    3. Effectiveness of targeted poverty alleviation
    □Applicable √Not applicable

    4. Subsequent targeted poverty alleviation program
    √Applicable □Not applicable

     (1) Do a good job in poverty alleviation investigation to have the comprehensive understanding of the poverty alleviation
demand in Tue Town, and make the targeted poverty alleviation program.
     (2) Carry out a series of educational poverty alleviation with own funds. As the relocation of Tue Dam, local
kindergartens and secondary schools badly need materials, facilities and equipment, the Company will try the best give
assistance, including providing internal classroom facilities and outdoor facilities to kindergartens, and drinking water device
(water dispenser with purification and hot water) to local secondary schools.
     (3) Introduce assistance funds to cultivate a batch of local grass-roots cadres and technical personnel in Yunnan.
     (4) Focus on the poverty alleviation through consumption, make plans for buying agricultural products, sales assistance
of agricultural products and other work, and implement the same based on the actual situation.

2   Fulfillment of social responsibility
      √Applicable □Not applicable
      The Company actively bears the social responsibility, enhances the responsibility management to create the benefit for
shareholders, upgrades the operation quality to create the high quality products for users, responds to the “Belt and Road”
initiative and “Made in China 2025 Strategy” with the actual action, implements the development strategy with equipment
manufacturing as the center and capital operation and Internet+ as two wings.



                                                                                                                             27
     In addition to the traditional dominant plates such as port machinery, ocean engineering, system EPC and ocean
transportation of heavy cargoes, the Company also developed the intelligent industry, livelihood consumption, integrated
development and digital industry, to make contribution to the development of entity economy and the construction of the well-
off society.
     Adhering to the concept of "open development and all-win harmony", the Company speeded up the pace of "going
global", actively promoted the layout of overseas regional centers, and built Terminexus digital intelligent platform, to provide
faster and more efficient services to global users.
     Every year, the Company may hold the forum on intelligent solutions of wharf to discuss the development plan with
the global professionals. The Company made full use of the platform of China International Import Expo to achieve mutual
benefit and common development with global enterprises.
     The Company paid more attention to the green and sustainable development, actively invested in the research and
development of green products, promoted the "change from oil into electricity" technology of dock equipment, and optimized
the environmental protection properties of existing equipment; built intelligent terminals to achieve "zero emission" from
terminals and provided equipment support for the development of clean energy such as solar and wind power. The Company
further increased the investment in environmental protection, improved the existing production equipment and facilities,
and innovate the green production process; strengthened the long-term mechanism for green environmental protection
management, created the environmental protection culture with vitality, set up the special training for environmental
protection, enhance the environmental protection awareness of the staff, and laid a green foundation for promoting the high-
quality development of the Company.
     The Company always adhered to the principle of "people-oriented", strengthen the humanistic care for employees,
built a career development platform for employees; strengthened the communication with the community where the
Company is located through activities such as party building and association building; released the annual report and Social
Responsibility Report as required to show the development trend of the enterprise to related parties; carried out the targeted
poverty alleviation by building the library and reading rooms for Tue Town Primary School in Yunnan Province, helping
solve problems such as the lack of local educational resources. At the same time, the Company actively promoted poverty
alleviation in education and consumption.

3    Environmental Information
     1. Information about environmental protection of the Company and its subsidiaries as the key pollutant
discharge units published by environmental protection department
     √Applicable □Not applicable
     (1) Pollutant discharge
     √Applicable □Not applicable
     The pollutants discharged at the main production base of the Company in Changxing Island include: wastewater, waste
gas, noise and solid waste, for which the pollutant discharging license has been obtained.
     Wastewater: the majority of domestic wastewater and a little wastewater from production. There are 3 discharge outlets
for wastewater, which can be discharged after the disposal in Changxing Wastewater Disposal Plant.
     Waste gas: mainly including coating waste gas, welding dust and boiler waste gas, which can be discharged after the
standard disposal in relevant waste gas disposal facilities. There are 89 discharge outlets for waste gas.
     Solid waste: mainly including the common solid waste, such as scrap steel from the steel plate processing, canteen
waste oil and domestic refuse; hazardous waste such as waste mineral oil and waste emulsion from machining; paint waste,
waste packaging from painting operations. Those pollutants have been disposed of by qualified units upon entrustment.
     Noise: mainly from cutting, painting, machine tools and fans. There are 14 noise monitoring outlets.
     Implementing standards: the Comprehensive Standards for Wastewater Discharge in Shanghai Municipality (DB31/199-
2018) for wastewater discharge; the Standard for Air Pollutant Discharge in Shanghai Municipality (DB31/933-2015) for
waste gas discharge; the Standards for Factory Boundary Noise Discharge of Industrial Enterprises (GB12348-2008) for
factory boundary noise.

     (2) Construction and operation of pollution control facilities
     √Applicable □Not applicable
     The Company takes the necessary protective measures for the collection and treatment of the main contaminants and
has installed the corresponding monitoring equipment.


28
      Wastewater: install on-line monitoring equipment at the wastewater outlet to monitor factors such as pH, flow rate,
COD and ammonia nitrogen, and entrust qualified entities for operation and maintenance; check existing pipelines, and add
domestic sewage treatment facilities and initial rainwater collection ponds, etc.
      Exhaust gas: conduct pre-treatment and adopt cloth bag/cartridge dust removal equipment in sand blasting workshop;
adopt activated carbon adsorption - nitrogen gas desorption - condensation recovery process treatment equipment in
painting workshop, spray and build temporary shed outside, add mobile paint mixing room, adopt water-based paint
replacement process for pre-treatment production line, transform VOCs end treatment device; adopt alkali spray and water
spray treatment devices for acid mist and galvanizing exhaust gas in galvanizing workshop; install mobile smoke and dust
treatment device for welding in steel structure workshop, and add new multiple treatment device outdoor.Fully utilize the
purification effect of distributed collection and processing system, clamping type local high negative pressure dust removal
system, blowing and suction type dust removal system, removable welding fume processor and grinding dust removal
system. Regularly replace the adsorption and filtration materials of various treatment devices, perfect the equipment
operation and maintenance ledger and strengthen daily management.
      Noise: adopt the measures for construction sound insulation; add sound insulation to reduce the environmental impact
of staggered production.
      Solid waste: all solid and hazardous wastes are handled by qualified entities. It is required to newly build solid waste
warehouses, arranged for management by dedicated personnel, and perfect identification of hazardous waste signs and
ledger, etc.

     (3) Environmental impact assessment(EIA) of construction project and other administrative licenses for environmental
protection
     √Applicable □Not applicable
     The related construction projects in Changxing Base, Nantong, Qidong and other places belonging to the Company
have obtained EIA, and in 2019, Changxing Branch completed the EIA work for the reconstruction of 4# dangerous goods
terminal and the independent acceptance of the comprehensive workshop project. Nantong Branch and Qidong Marine
Engineering Co., Ltd. completed the completion and acceptance of the project. Some of the pending acceptance and
pending EIA projects are undergoing relevant procedures in accordance with the requirements of government departments.

    (4) Emergency proposal for environmental accident
    √Applicable □Not applicable
    The Company's major production entities have signed and issued emergency plans for environmental emergencies, and
have completed filing with their local government regulatory authorities in accordance with environmental requirements.

     (5) Self-monitoring scheme for environment
     √Applicable □Not applicable
     The Company has formulated an annual environmental self-monitoring program and is currently equipped with an online
monitoring system for wastewater, exhaust gas and plant boundary noise, and has commissioned a third party to carry out
self-monitoring of wastewater, exhaust gas, noise, groundwater and soil according to the scheme requirements.

      (6) Other environmental information to be disclosed
      √Applicable □Not applicable
      In August 2019, the Central Ecological and Environmental Protection Inspectorate Group announced the environmental
protection problems of the Company's Changxing Base as a typical case, in response to the above situation, the Company
attaches great importance to the upper and lower, set up the rectification work leading group and working group in the
first time, all staff seriously and deeply reflect the problem, resolve to make a rectification, organize a comprehensive self-
examination and self-correction work, formulate the comprehensive planning rectification program for the Company's
problems, scientifically formulate the rectification measures, define the rectification plans and programs, to ensure that the
rectification responsibility of the people are in place, and the rectification work is comprehensive and thorough.
      The Company will learn from the example, take environmental protection reform as an opportunity, deeply study
and implement Xi Jinping's idea of ecological civilization, firmly establish the concept of green development, enhance the
environmental protection awareness of all staff, establish and perfect the long-term mechanism of environmental protection
work, and continuously promote the company to the path of green and high-quality development.




                                                                                                                            29
     2. Particulars about the environmental protection of the companies other than those defined as key pollutant-
discharge entities
     √Applicable □Not applicable
     The main pollutants of the Company other than the key emission entities such as Nantong Transmission, subordinate
to the Company: wastewater, exhaust gas, solid waste, noise, etc. Discharge mode: the wastewater was discharged up to
the standard after treatment and some units have set up sewage treatment facilities; the atmospheric pollutants such as the
waste gas, fume and VOCs were discharged in the manner of organized discharge; it is required to progressively renovate
spraying exhaust gas treatment facilities and workshop dust removal devices, etc., the solid wastes and the hazardous
wastes were handed over to the qualified entities for treatment; plant boundary noise was discharged up to the standard.
According to the prepared sudden environmental emergency plan, various entities improved the configuration of emergency
rescue equipment and facilities, carried out emergency rescue technical training and practical exercises on a regular basis,
and effectively improved the emergency disposal capacity, in combination with the actual situation of various entities.

     3. Description of the reasons for failing to disclose the environmental information by the companies other than
the key pollutant discharge entities
     □ Applicable √Not applicable

     4. Description of the follow-up progress and changes in the contents of environmental information disclosed
during the reporting period
     □ Applicable √Not applicable

(IV) Other notes
     □ Applicable √Not applicable

XVIII. Information about convertible corporate bonds
     □ Applicable √Not applicable"




30
Section VI                      Changes in Ordinary shares and Shareholders' Situation


I. Changes in ordinary shares capital
1   Table of changes in ordinary shares
    1. Table of changes in ordinary shares
     The total number of shares of the Company's ordinary shares and the structure of its share capital remained unchanged
during the reporting period.

    2. Notes to changes in ordinary shares
    □ Applicable √Not applicable

    3. Effect of changes in ordinary shares on financial indicators such as earnings per share and net asset per
share for the latest year and period (if any)
    □ Applicable √Not applicable

    4. Other contents that the Company deems necessary to be disclosed or required to be disclosed by the
securities regulatory authority
    □ Applicable √Not applicable

2   Changes in shares with restrictive conditions for sales
    □ Applicable √Not applicable

II. Issuance and listing of securities
1   Securities issuance by the reporting period
     □ Applicable √Not applicable

    Particulars about the issuance of securities during the reporting period (for bonds of different interest rates within the
duration, please state them respectively)
    □ Applicable √Not applicable

2   Changes in total ordinary shares of the Company and the shareholder structure, as well as the assets and liabilities
    □ Applicable √Not applicable

3   Existing internal employee ownership
    □ Applicable √Not applicable

III. Shareholders and actual controller
1   Total number of shareholders
Total of ordinary shareholders by the end of the reporting period                                    233,460
Total of ordinary shareholders by the end of the month previous to the disclosure
                                                                                                     231,134
date of annual report




                                                                                                                           31
2    Table of the shares held by Top 10 shareholders, Top 10 holders of marketable shares (or shareholders without
trading limited conditions) by the end of reporting period
                                                                                                                                Unit: share

                                                      Shares held by Top 10 shareholders
                                                                Number of                Number of       Pledge or freezing
                                                 Changes in                                                  condition
           Name of shareholder                                shares held at             shares with                         Nature of
                                                the reporting                Ratio (%)
                 (in full)                                    the end of the           trading limited    Share     Number shareholder
                                                   period
                                                                  period               conditions held    status   of shares
                                                                                                                                Overseas
CCCG (HK) Holding Limited                            0          916,755,840     17.401        0            NA          0
                                                                                                                              legal person
China Communications Construction                                                                                             State-owned
                                                     0          855,542,044     16.239        0            NA          0
Company Ltd.                                                                                                                  legal person
China Communications Construction Group                                                                                       State-owned
                                                     0          663,223,375     12.589        0            NA          0
Co., Ltd.                                                                                                                     legal person
Central Huijin Asset Management Co., Ltd.            0           89,378,640       1.70                   Unknown               Unknown
China Securities Finance Corporation Limited         0           82,269,868       1.56                   Unknown               Unknown
Bosera Fund - Agricultural Bank of China -
Bosera China Securities Financial Assets             0           19,855,920       0.38                   Unknown               Unknown
Management Plan
E FUND Management- Agricultural Bank
of China - E FUND Management China                   0           19,855,920       0.38                   Unknown               Unknown
Securities Financial Assets Management Plan
Dacheng Fund- Agricultural Bank of China
- Dacheng China Securities Financial Asset           0           19,855,920       0.38                   Unknown               Unknown
Management Plan
Harvest Fund - Agricultural Bank of China -
                                                     0           19,855,920       0.38                   Unknown               Unknown
Harvest CSI Asset Management Plan
GF Fund- Agricultural Bank of China -
GF China Securities Financial Assets                 0           19,855,920       0.38                   Unknown               Unknown
Management Plan
Lombarda China Fund- Agricultural Bank
of China - Lombarda China Fund China                 0           19,855,920       0.38                   Unknown               Unknown
Securities Financial Assets Management Plan
China Asset Management- Agricultural Bank
of China - China Asset Management China              0           19,855,920       0.38                   Unknown               Unknown
Securities Financial Assets Management Plan
Yinhua Fund- Agricultural Bank of China
- Yinhua China Securities Financial Asset            0           19,855,920       0.38                   Unknown               Unknown
Management Plan
China Southern Asset Management-
Agricultural Bank of China - China Southern
                                                     0           19,855,920       0.38                   Unknown               Unknown
Asset Management China Securities Financial
Asset Management Plan
ICBC Credit Suisse Fund- Agricultural Bank of
China - ICBC Credit Suisse China Securities          0           19,855,920       0.38                   Unknown               Unknown
Financial Asset Management Plan

                                Shareholdings of top 10 shareholders without trading limited conditions
                                                                                  Number of non-          Type and number of shares
                            Name of shareholder                                restrictive circulation
                                                                                    shares held             Category           Quantity

                                                                                                             Foreign
 CCCG (HK) Holding Limited                                                          916,755,840            shares listed
                                                                                                           domestically



32
                              Shareholdings of top 10 shareholders without trading limited conditions
                                                                                 Number of non-          Type and number of shares
                          Name of shareholder                                 restrictive circulation
                                                                                   shares held             Category          Quantity

                                                                                                          RMB ordinary
 China Communications Construction Company Ltd.                                    855,542,044
                                                                                                            shares
                                                                                                          RMB ordinary
 China Communications Construction Group Co., Ltd.                                 663,223,375
                                                                                                            shares
                                                                                                          RMB ordinary
 Central Huijin Asset Management Co., Ltd.                                          89,378,640
                                                                                                            shares
                                                                                                          RMB ordinary
 China Securities Finance Corporation Limited                                       82,269,868
                                                                                                            shares
 Bosera Fund - Agricultural Bank of China - Bosera China Securities                                       RMB ordinary
                                                                                    19,855,920
 Financial Assets Management Plan                                                                           shares
 E FUND Management- Agricultural Bank of China - E FUND Management                                        RMB ordinary
                                                                                    19,855,920
 China Securities Financial Assets Management Plan                                                          shares
 Dacheng Fund- Agricultural Bank of China - Dacheng China Securities                                      RMB ordinary
                                                                                    19,855,920
 Financial Asset Management Plan                                                                            shares
 Harvest Fund - Agricultural Bank of China - Harvest CSI Asset                                            RMB ordinary
                                                                                    19,855,920
 Management Plan                                                                                            shares
 GF Fund- Agricultural Bank of China - GF China Securities Financial                                      RMB ordinary
                                                                                    19,855,920
 Assets Management Plan                                                                                     shares
 Lombarda China Fund- Agricultural Bank of China - Lombarda China                                         RMB ordinary
                                                                                    19,855,920
 Fund China Securities Financial Assets Management Plan                                                     shares
 China Asset Management- Agricultural Bank of China - China Asset                                         RMB ordinary
                                                                                    19,855,920
 Management China Securities Financial Assets Management Plan                                               shares
 Yinhua Fund- Agricultural Bank of China - Yinhua China Securities                                        RMB ordinary
                                                                                    19,855,920
 Financial Asset Management Plan                                                                            shares
 China Southern Asset Management- Agricultural Bank of China -
                                                                                                          RMB ordinary
 China Southern Asset Management China Securities Financial Asset                   19,855,920
                                                                                                            shares
 Management Plan
 ICBC Credit Suisse Fund- Agricultural Bank of China - ICBC Credit Suisse                                 RMB ordinary
                                                                                    19,855,920
 China Securities Financial Assets Management Plan                                                          shares
                                                                              Among the above top 10 shareholders, CCCG (HK)
                                                                              Holding Limited, China Communications Construction
                                                                              Group Co., Ltd. and China Communications
                                                                              Construction Company Ltd. are related companies.
 Notes to the related relation or consistent actions of the above-mentioned
                                                                              It was unknown to the Company whether there was
 shareholders
                                                                              related relation or concerted actor specified in the
                                                                              Management Method on Information Disclosure for
                                                                              Shareholding Change of the Shareholders of Listed
                                                                              Companies.
 Explanation on preferred stock holders with recovered voting rights and
 number of stocks held by them

    Shareholding quantity of top ten shareholders with sales restriction and the sales restriction
    □ Applicable √Not applicable

3   Strategic investors or legal persons becoming the top 10 shareholders due to placement of new shares
    □ Applicable √Not applicable

IV. Controlling shareholders and actual controllers
1   Controlling shareholder




                                                                                                                                        33
     1. Legal person
     √Applicable □Not applicable
Name                                          China Communications Construction Group Co., Ltd.
Company principal or legal representative     Liu Qitao
Date of Establishment                         December 8, 2005
                                              Construction of overseas projects and international bidding projects at home; general
                                              contracting for construction of various special ships, leasing and maintenance of special
                                              ship and construction machines; offshore towage and professional services related to the
                                              ocean engineering; technical consultant services regarding the ship and the supporting port
                                              equipment; engaging in the general contracting of construction projects for ports, channels,
                                              highways and bridges both home and abroad (including technical and economic consultation
Main business
                                              of engineering, feasibility study, survey, design, construction, supervision, procurement
                                              and supply for related complete set of equipment or materials, and equipment installation);
                                              undertaking the general contracting of the construction of industrial and civil works, railway,
                                              metallurgy, petrochemical, tunnel, power, mine, water conservancy, and municipal works;
                                              import and export business; real estate development and property management; investment
                                              and management of transportation, hotel and tourism industries.
                                              CCCG holds 57.96% of the stock equity of CCCC (601800.SH) and it is the controlling
                                              shareholder. CCCG holds 100% of the stock equity of CCCG Real Estate Group Co., Ltd.;
                                              CCCG Real Estate Group Co., Ltd holds 100% of the stock equity of Zhongzhu Real Estate
                                              Development Co., Ltd. Zhongzhu Real Estate Development Co., Ltd holds 53.32% of the
Equities of other domestic and overseas
                                              stock equity of CCCG Real Estate Co., Ltd (name used before: Chongqing Industries,
public companies during the reporting
                                              Zhongfang Real Estate) (000726.SZ) and it is the controlling shareholder. CCCG and its
period
                                              controlling subsidiaries totally hold 28.91% of the stock equity of Greentown Holding Co., Ltd
                                              (03900.HK) and are the controlling shareholders. CCCG and its subsidiaries hold 29.99% of
                                              the stock equity of Shanghai Zhenhua Heavy Industries Co., Ltd (600320.SH) and are the
                                              controlling shareholder.
Notes to other circumstances


     2. Natural persons
     □ Applicable √Not applicable

     3. Particulars about no controlling shareholder in the Company
     □ Applicable √Not applicable

     4. Index and date of change in the controlling shareholder during the reporting period
     □ Applicable √Not applicable

     5. Chart for the property and controlling relationships between the company and the controlling shareholders
     √Applicable □Not applicable

                                                                     CCCG

                         Shareholding ratio100%                                                  Shareholding ratio 57.96%

                                      CCCG HK                                                          CCCC

           Shareholding ratio 17.4012%      Shareholding ratio 12.5888%                          Shareholding ratio 16.2393%

                                                 Shanghai Zhenhua Heavy Industries, Co., Ltd.




34
2   Actual controller
    1. Legal person
    □ Applicable √Not applicable

    2. Natural person
    □ Applicable √Not applicable

    3. Particulars about no actual controller in the Company
    □ Applicable √Not applicable

    4. Index and date of change in the actual controller during the reporting period
    □ Applicable √Not applicable

    5. Block diagram of ownership and control relation between the Company and the actual controller
    √Applicable □Not applicable


                                                             State-owned Assets

                                          Shareholding ratio100%

                                                                   CCCG

                        Shareholding ratio100%                                                  Shareholding ratio 57.96%

                                     CCCG HK                                                      CCCC

           Shareholding ratio 17.4012%    Shareholding ratio 12.5888%                           Shareholding ratio 16.2393%

                                                 Shanghai Zhenhua Heavy Industries, Co., Ltd.


    6. Control over the Company by the actual controller via trust or other ways of assets management
    □ Applicable √Not applicable

3   Other information about Controlling shareholders and actual controllers
    □ Applicable √Not applicable

V. Other legal person shareholder holding more than 10%
    □ Applicable √Not applicable

VI. Particulars about restriction on reduction in shares held
    □ Applicable √Not applicable




                                                                                                                              35
Section VII                      Preferred Shares


     □Applicable √Not applicable




36
Section VIII                             Directors, Supervisors, Senior Executives and Employees


I. Shareholding variation and remuneration
1     Changes in shares held by current and resigned directors, supervisors and senior executives during the
reporting period and their remunerations
      √Applicable □Not applicable
                                                                                                                                       Unit: share
                                                                                 Number                                Total
                                                                      Number                                                        Remuneration
                                                                                    of                             remuneration
                                                                     of shares               Change                                   from the
                                               Starting   Expiry                 shares                 Reason    before tax from
                                                                        held                in shares                                  related
     Name      Post (Note)       Sex     Age   date of    date of                 held at                 of       the Company
                                                                       at the                 in the                                 party of the
                                                tenure    tenure                 the end                change       during the
                                                                     beginning                 year                                  Company or
                                                                                  of the                         reporting period
                                                                      of year                                                            not
                                                                                   year                             (RMB’0,000)
               Chairman of
                the Board,
                                               June 26,   June 25,
 Zhu Lianyu      Secretary       Male    50                            427,200   427,200           0                        78.26        No
                                                 2018       2021
                  of Party
               Committee
                  Director,
                 President,
     Huang                                     June 26,   June 25,
               vice secretary    Male    45                                 0           0          0                        78.26        No
    Qingfeng                                     2018       2021
                  of Party
                 Committee
     Zhang                                     June 26,   June 25,
                  Director       Male    60                                 0           0          0                            0       Yes
    Hongwen                                      2018       2021
               Director, vice                  June 26,   June 25,
Liu Qizhong                      Male    56                                 0           0          0                        62.61        No
                president                        2018       2021
               Director, vice                  June 26,   June 25,
 Dai Wenkai                      Male    53                                 0           0          0                        62.61        No
                 president                       2018       2021
      Zhu                                      June 26,   June 25,
               Director, CFO     Male    51                                 0           0          0                        62.61        No
    Xiaohuai                                     2018       2021
     Zhao      Independent                     June 26,   June 25,
                                 Male    44                                 0           0          0                          12         No
    Zhanbo        director                       2018       2021
               Independent                     June 26,   June 25,
 Ji Linhong                      Male    58                                 0           0          0                          12         No
                  director                       2018       2021
               Independent                     June 26,   June 25,
 Bai Yunxia                     Female   47                                 0           0          0                          12         No
                  director                       2018       2021
               Independent                     June 26,   June 25,
    Yang Jun                     Male    63                                 0           0          0                          12         No
                  director                      2018        2021

               Independent                       May       June
 Zhang Hua                       Male    47                                 0           0          0                            7        No
                  director                     28,2019    25,2021

     Sheng     Independent                     May 28,    June 25,
                                 Male    50                                 0           0          0                            7        No
    Leiming       director                      2019        2021
                Supervisor,
                     vice
                  secretary
                   of Party
                Committee,
                                               June 26,   June 25,
Wang Cheng      Secretary of     Male    47                                 0           0          0                        62.61        No
                                                 2018       2021
                Committee
               for Discipline
                Inspection,
                chairman of
                 labor union

    Zhang                                      June 26,   June 25,
                Supervisor       Male    58                             24,311     24,311          0                        70.06        No
    Minghai                                      2018       2021



                                                                                                                                               37
                                                                                       Number                                   Total
                                                                           Number                                                             Remuneration
                                                                                          of                                remuneration
                                                                          of shares                Change                                       from the
                                                  Starting     Expiry                  shares                 Reason       before tax from
                                                                             held                 in shares                                      related
     Name        Post (Note)       Sex    Age     date of      date of                  held at                 of          the Company
                                                                            at the                  in the                                     party of the
                                                   tenure      tenure                  the end                change          during the
                                                                          beginning                  year                                      Company or
                                                                                        of the                            reporting period
                                                                           of year                                                                 not
                                                                                         year                                (RMB’0,000)
      Xiang                                       June 26,    June 25,
                  Supervisor       Male    44                                      0          0          0                            60.51         No
     Xudong                                         2018        2021
                                                   August     June 25,
 Liu Jianbo     Vice president     Male    57                                      0          0          0                            62.61         No
                                                  22, 2018      2021
                                                   August     June 25,
     Zhou Qi    Vice president     Male    48                                      0          0          0                            62.61         No
                                                  22, 2018      2021
                                                   August     June 25,
 Chen Bin       Vice president     Male    46                               107,328    107,328           0                            57.58         No
                                                  22, 2018      2021
      Shan                                         August     June 25,
                Vice president     Male    56                                      0          0          0                            62.61         No
     Jianguo                                      22, 2018      2021
                                                   August     June 25,
 Zhang Jian     Vice president     Male    51                                      0          0          0                            62.61         No
                                                  22, 2018      2021
                                                   August     June 25,
     Fei Guo    Chief Engineer     Male    58                                      0          0          0                            62.61         No
                                                  22, 2018      2021
                    Chief                          August     June 25,
 Li Ruixiang                       Male    45                                      0          0          0                            62.61         No
                  economist                       22, 2018      2021
                  Chief legal
                 counsel and                       August     June 25,
     Sun Li                        Male    48                                      0          0          0                            62.61         No
                secretary of the                  22, 2018      2021
                    board
                Former director
                                                  June 26,   December
 Yan Yunfu          or chief       Male    61                                      0          0          0                            62.61         No
                                                    2018      11, 2019
                   engineer
                   Original
                                                  June 26,    March 8,
     Ling He     independent       Male    68                                      0          0          0                                3         No
                                                    2018       2019
                    director
      Total            /            /       /         /           /         558,839    558,839           0        /                1,160.99          /


      Name                                                               Main working experiences

                 Born in 1970, male, Ph.D., professor-level senior engineer. He began his career in September 1992 and successively served as the engineer,
                 equipment leader of overseas projects, vice chief of Marine Machine Department, manager of Enterprise Development Department of
 Zhu Lianyu      CCCC First Harbor Engineering Co., Ltd; the general manager of CCCC International Shipping Co., Ltd and the vice general manager of the
                 Equipment Manufacturing Marine Heavy Industry Department of China Communications Construction Co., Ltd. Now, he is the Chairman of
                 the Board and Secretary of Party Committee of the Company.

                 Born in 1975, male, EMBA, senior engineer. He began his career in July 1996 and successively served as the chief of quality inspection
                 department, vice director of quality inspection No.2 department, vice general manager of quality inspection companies, vice general manager
      Huang
                 of after-sales service department, general manager of quality inspection company; vice director of off-shore office, vice director or vice
     Qingfeng
                 of quality safety office, director of product service center and assistant president of the Company; vice president of the Company since
                 December 2014. Now, he is the director, president and Secretary of Party Committee of the Company.

                 Born in 1960, male, undergraduate, senior engineer; engaged in work in August 1983. He successively served as the vice general manager
                 of Overseas Division and manager of Integrated Department of Zhonggung Group, vice general manager of Engineering Management
                 Department and Operation & Management Department of China Communications Construction Co., Ltd, vice general manager and general
      Zhang
                 manager of Capital Construction Department (Dredging Department) and the executive general manager and general manager of Port
     Hongwen
                 Dredging Business Department of CCCC, as well as the director, executive general manager, temporary member of the Party committee and
                 non-executive director of CCCC Dredging (Group) Co., Ltd. Now, he is the general manager of CCCC Equipment Manufacturing & Marine
                 Heavy Industry Department and the director of the Company.

                 Born in 1964, male, undergraduate, senior economist. He successively served as the manager of Operating Department and the vice
 Liu Qizhong     president of the Company, and serves as the director of the Company since March 2004.Now, he is the director, vice president and Party
                 committee standing member of and chief compliance officer of the Company.

                 Born in 1967, male, master of physics, EMBA, senior engineer. He began his career in March 1993 and successively served as the project
 Dai Wenkai      director, vice manager, vice chief economist and chief economist, director of operation management office and vice president of the Company.
                 Now, his is the director, vice president and Party committee standing member of the Company.




38
   Name                                                                 Main working experiences

               Born in 1969, male, master of MBA, senior accountant. He began his career in July 1991 and successively served as the vice section
               manager of Financial Division of CCCC Shanghai Dredging Co., Ltd, vice director of Budget and Finance Department, vice manager (in
Zhu Xiaohuai   charge of the work) or manager of Finance Department, and member of commission for disciplinary inspection of CCCC Shanghai Dredging
               Co., Ltd, and the director, chief accountant and Party committee standing member of CCCC Shanghai Dredging Co. Ltd. Now, he served as
               the director, CFO and Party committee standing member of the Company.

               Born in 1976, Male, Ph. D. He had served as a teacher in School of Software, Peking University since 2005 and now he is a professor. He is
   Zhao
               mainly engaged in the research in Internet business model innovation and corporate development strategy. Now he acts as the independent
  Zhanbo
               director of the Company.

               Born in 1962, Male, Ph. D. He successively served as the assistant and the lecturer of Department of Precision Instrument of Tsinghua
               University; assistant professor of Department of Precision Engineering of Faculty of Engineering of the University of Tokyo, the Postdoctoral
               Researcher in Ministry of Education, Culture, Sports, Science and Technology of Japan. He had acted as vice director of Department of
               Precision Instrument of Tsinghua University, vice director of Department of Mechanical Engineering of Tsinghua University, director of Design
 Ji Linhong
               Engineering Research Institute of Tsinghua University, director of Experiment & Teaching Center of Mechanical Engineering, and vice director
               of State Key Lab of Tribology, Tsinghua University and so on. Now he serves as a professor and a doctoral tutor in Department of Mechanical
               Engineering, Tsinghua University. He is mainly engaged in digitalized design and system optimization of complicated mechanical system and
               the intelligent and biological mechanical design. Now he acts as the independent director of the Company.

               Born in 1957, male, master degree. He successively served as intermediate and senior court judge of Shanghai Court, president and
               member of the judicial committee member, Property Trade Operation Director of Shanghai United Property Rights Exchange. Now he is the
               assistant president of Shanghai United Property Rights Exchange, general manager of Beijing HQ, director of Financial Property Rights Trade
               Center, arbitrator of China International Economic and Trade Arbitration Commission, Shanghai International Economic and Trade Arbitration
 Yang Jun
               Commission, arbitrator of Shanghai Arbitration Commission, Shanghai Financial Arbitration Court, expert of China domain name dispute
               resolution center, director of Intellectual Property Association of China Law Society, director of Company Law Research Society of Shanghai
               Law Society, director of Shanghai Patent/Trademark/Copyright Association, and the independent director of the Company. Now he acts as the
               independent director of the Company.

               Born in October 1973, female, Ph. D from Xiamen University, post-doctor in accounting of Guanggua School of Management, Peking
               University, professor of accounting, doctoral tutor, engaged in work in 1995. She successively served as the assistant engineer of Kaiyuan
 Bai Yunxia    Group under Xi’an Jiaotong University, lecturer of School of Economics and Management of Tongji University, research scholar of CKGSB.
               Now, she acts as the director of Department of Accounting, School of Economics and Management, Tongji University and the research
               scholar of Investment Center of CKGSB. Now he acts as the independent director of the Company.

               Born in 1973, Male, Ph.D. Economics, associate professor of finance. He successively served as a researcher, lecturer, assistant professor
Zhang Hua
               and associate professor at China Europe International Business School. Now he acts as the independent director of the Company.

               Born in 1970, male, doctor of laws, senior lawyer. He successively served as a lawyer assistant and lawyer in Shanghai Foreign Trade
   Sheng       Law Firm, a teacher of civil and commercial law in East China University of Political Science and Law, a senior partner and chief lawyer of
  Leiming      Shanghai Zhongmao Law Firm, and co-chairman, senior partner and lawyer in the head office management committee of Guantao Law Firm.
               Now he acts as the independent director of the Company.

               Born in 1973, male, master of engineering, senior political worker. He successively served as the vice secretary or secretary of league
               committee, and vice secretary or secretary of Party Branch of No. 2 Engineering Co., Ltd of CCCC Third Harbor Engineering Co., Ltd; vice
               director and director of Organization Department of CCCC Third Harbor Engineering Co., Ltd; secretary of the Party Committee and vice
Wang Cheng     general manager of No. 2 Engineering Co., Ltd of CCCC Third Harbor Engineering Co., Ltd; chairman of board of supervisors, vice secretary
               of the Party Committee, secretary of Committee for Discipline Inspection and chairman of labor union of CCCC Third Harbor Engineering
               Co., Ltd. Now he serves as the vice secretary of the Party Committee, secretary of Commission for Disciplinary Inspection, chairman of labor
               union and chairman of board of supervisors of the Company.

               Born in 1962, male, undergraduate, professor-level senior engineer. He successively served as the engineer of Technology Division of
               Shanghai Port Machinery Plant; mechanical office designer, vice manager and vice chief engineer of Shanghai Zhenhua Heavy Industries
  Zhang
               Co., Ltd., general manager of Shore Bridge No.1 Company of Mechanical Office, and general manager of Land-based Heavy Industry Co.,
  Minghai
               Ltd. Now, he is the supervisor and chief of the Company, designer and vice general manager of ZPMC Port
               Machinery Group or vice dean of ZPMC Land-based Heavy Industry Research & Design Institute.

               Born in 1976, male, undergraduate, senior engineer. He successively served as the vice director and vice manager of Quality Department,
   Xiang       and general manager of ZPMC Inspection Co., Ltd. Currently, he is the staff representative supervisor of the board of supervisors, vice
  Xudong       general manager of ZPMC Port Machinery Group, and the secretary of the party committee and executive vice general manager of
               Changxing Branch.

               Born in 1963, male, undergraduate, senior engineer. He successively served as the engineer at technological office of Shanghai Port
               Machinery Plant; assistant director in engineering technology department of Shanghai Container Dock Co. Ltd., project director of ship
 Liu Jianbo
               operation department and chief engineer of engineering department of Shanghai ZPMC, and vice general manager of and vice general
               manager of ZPMC Changxing Base. Currently, he is the vice president and Party committee standing member of the Company.

               Born in 1972, male, EMBA, professor-level senior engineer. He successively served as the technician, manager and vice general engineer,
  Zhou Qi      general manager and chief engineer of the Electric Appliance Office of the Company. Currently, he is the vice president and Party committee
               standing member of the Company.




                                                                                                                                                          39
      Name                                                                 Main working experiences

                Born in 1974, male, EMBA, senior engineer. He successively served as the project quality leader of Quality Control Division, vice manager of
                tire crane office of quality control division, manager of quality control division, vice general manager and general manager of quality inspection
     Chen Bin
                company, vice director and vice chief engineer of quality safety office, manager of quality safety division, supervisor of the Company, and vice
                president of the Company, etc. Currently, he is the vice president and safety director of the Company.

                Born in 1964, male, undergraduate, senior engineer. He successively served as the technician in Shanghai Port Machinery Manufacturing
      Shan      Plant, served as the engineer and chief engineer of ZPMC Machinery Office, general manager and vice chief engineer of No.4 design office
     Jianguo    of design company, vice director and director of ZPMC Machinery Office, manager of budget assessment department and the dean of ZPMC
                Land-based Heavy Industry Research & Design Institute. Currently, he is the vice president of the Company.

                Born in 1969, male, MBA, senior engineer. He successively served as the technician, production planner and assistant director of No. 2
                Panel beater of Shanghai Port Machinery Manufacturing Plant, director of gearbox branch of Shanghai Port Machinery Manufacturing Plant,
 Zhang Jian     vice director and member of the Party committee of Shanghai Port Machinery Manufacturing Plant, vice general manager of Shanghai Port
                Machinery Heavy Industry Co., Ltd, general manager and president assistant of ZPMC Operation Office. Currently, he is the vice president of
                the Company.

                Born in 1962, male, EMBA, professor-level senior engineer. He successively served as the engineer of Shanghai Port Machinery Plant,
     Fei Guo    electrical engineer of director of No. 5 electrical office, vice chief engineer, chief engineer, director of Development Office and executive
                director of ZPMC Electric Department. Currently, he is now the chief engineer of the Company.

                Born in 1975, male, undergraduate, senior economist. He successively served as the director of technical process department and trainee
                manager of Manufacturing Department and manager of Quality Assurance Department of Zhangjiagang Base of Shanghai Port Machinery
                Plant; project leader, office manager, vice director of Quality Safety Office, vice general manager and general manager of mechanical
 Li Ruixiang
                supporting base, secretary of Party Branch , vice chief economist, general manager of budget assessment department, general manager and
                assistant president of material and equipment procurement department of ZPMC quality inspection companies. Currently, he is now the chief
                economist of the Company.

                Born in 1972, male, EMBA, senior engineer. He successively served as the project leader and vice manager of operation department, vice
      Sun Li    director of operation office and director of off-shore office, general manager assistant and president and director of the Company. He is now
                the chief legal counsel of and secretary of the board of the Company.

                Born in 1959, male, EMBA, professor-level senior engineer. He successively served as the vice chief of technical department, manager of
                mechanical design department, vice chief engineer, chief engineer and vice president of the Company, president of Land Heavy Industry
    Yan Yunfu
                Equipment Design Institute, and director of the Company since 2004. He used to be the director, chief engineer and Party committee standing
                member of the Company.

                Born in 1952, male, professor. He successively served as the senior editor (senior professional title) of Liberation Daily, director of Shanghai
                Journalists Association, and director of Shanghai Institute of Essays. He successively served as the member, assistant chief editor, director of
     Ling He    Editing Department of the democratic and legal magazine agency, vice director and director of Comment Department of Liberation Daily, main
                editor of Liberation Daily, and chief editor of Liberty Forum; and obtained the awards as one of the first National 100 Journalists, China News
                First Prize for three times, and Shanghai News First Prize for 15 times. Now he used to be the independent director of the Company.


       Notes to other circumstances
       □ Applicable √Not applicable

2      Equity incentives awarded to the directors and senior executives during the reporting period
       □ Applicable √Not applicable

II. Incumbency of current and resigned directors, supervisors and senior executives during the reporting period
1      Position at the shareholder entity
       √Applicable □Not applicable
      Name of in-                                                                                                     Starting date of        Expiration date
                             Name of shareholding entity                                Position
      service staff                                                                                                        tenure               of tenure
                                                                        General manager of equipment
                         China Communications Construction
    Zhang Hongwen                                                       manufacturing and marine heavy                 January 4, 2018
                         Company Ltd.
                                                                        industry division

Statement of the position held in shareholding entity




40
2   Statement of the position held in other entities
    √Applicable □Not applicable
                                                                                                                         Starting   Expiration
 Name of in-                                                                            Position held in other
                                       Name of other entities                                                            date of     date of
 service staff                                                                                 entities
                                                                                                                          tenure     tenure
Zhao Zhanbo      School of Software, Peking University                                 Professor
                                                                                       Professor and doctoral
Ji Linhong       Department of Mechanical Engineering, Tsinghua University
                                                                                       supervisor
                 Jiefang Daily, Shanghai Journalists Association, Shanghai Essays      Senior editor (Senior
Linghe
                 Society.                                                              professional title), director
                 Shanghai United Assets and Equity Exchange, Financial Assets
                 Exchange, Shanghai International Economic and Trade Arbitration
                 Commission, Shanghai Arbitration Commission, Shanghai Court of        Assistant president,
Yang Jun         Financial Arbitration, Chinese Domain Name Dispute Settlement         general manager, director,
                 Center, Intellectual Property Association of China Law Society,       arbitrator, expert, director
                 Company Law Association of Shanghai Law Society, Shanghai
                 Patent/Trademark/Copyright Association.
                                                                                       Director of Accounting
                 School of Economics and Management of Tongji University,
Bai Yunxia                                                                             Department, research
                 Investment Centre of Cheung Kong Graduate School of Business
                                                                                       scholar
                                                                                       Researcher, lecturer,
Zhang Hua        China Europe International Business School                            assistant professor and
                                                                                       associate professor
Sheng            Shanghai Foreign Trade Law Firm, East China University of Political   Senior partners, lawyers,
Leiming          Science and Law, Shanghai Zhongmao Law Firm, Guantao Law Firm.        teachers, etc.
Statement of the position held in other entities


III. Remuneration of directors, supervisors and senior executives
    √Applicable □Not applicable
                                                                     In accordance with the regulations of Articles of Association, the
Decision-making process for the remuneration of directors,           remuneration of directors and supervisors are subject to the general
supervisors and senior executives                                    meeting of shareholders and the remuneration of the senior executives
                                                                     are assessed and approved by the chairman and president.
Basis for deciding the remuneration of remuneration of directors, The basic salary plus performance bonus are assessed in combination
supervisors and senior executives                                 with the quantitative index of production and operation, etc..
Actual payout of remuneration for directors, supervisors and         All in-service and resigned director, supervisor and senior executives
senior executives                                                    are paid by the Company within the reporting period.
Total remuneration actually obtained by all directors, supervisors
                                                                   RMB 11,609,900.00
and senior executives at the end of reporting period


IV. Change in directors, supervisors and senior executives
    √Applicable □Not applicable
               Name                                Post                             Change                             Reason of change
             Yan Yunfu                  Director or Chief Engineer                 Resigned                            Individual reason
          Sheng Leiming                   Independent director                      Elected                              Job demand
             Zhang Hua                    Independent director                      Elected                              Job demand
              Ling He                      ndependent director                     Resigned                            Individual reason




                                                                                                                                            41
V. Punishments by securities regulatory authority in recent three years
     □ Applicable √Not applicable

VI. Particulars about the employees in the parent company and the main subsidiaries
1    Particulars about employees
 Number of in-service employees of the parent company                                                                     3,172
 Number of in-service employees of the main subsidiaries                                                                  5,529
 Total of in-service employees                                                                                            8,701
 Number of retired employees required to be paid by the parent company and its major subsidiaries
                                                                  Specialties
                                 Category                                                             Number of staff
 Production staff                                                                                                         3,290
 Sales staff                                                                                                               280
 Technical staff                                                                                                          4,195
 Financial staff                                                                                                           154
 Administrative staff                                                                                                      782
 Total                                                                                                                    8,701
                                                            Education background
                            Education level                                                          Number (person)
 Doctor                                                                                                                     23
 Master                                                                                                                    710
 Undergraduate                                                                                                            4,133
 Junior College                                                                                                           2,028
 Technical secondary school                                                                                                594
 High school and below                                                                                                    1,213
 Total                                                                                                                    8,701


2    Remuneration policies
      √Applicable □Not applicable
      In line with the Company’s development strategy, it continuously perfected the remuneration distribution incentive
system, perfected the performance assessment system and established and improved the performance assessment system
based on the different properties and characteristics of each entity and division; promoted the salary incentive system closely
liking the performance distribution with the unit or division performance, value contribution, industrial characteristics, growth
phase and similar factors, and comprehensively liking the staff performance with position duty and value contribution, and
thus initially established the distribution mode integrating with the market.

3    Training plan
    √Applicable □Not applicable
    In line with the Company’s development strategy, the Company gradually established a rigid staff training system with
systematic, directional and continuous features. The Company sets up all-staff annual educational and training plan and
implements it according to the plan to improve the business skill level and professional quality of staff at various levels.

4    Labor outsourcing
     √Applicable □Not applicable
 Total of labor outsourcing hours                                                                       7,550,208 hours
 Total of labor outsourcing remuneration                                                            RMB 319,180,200.00


VII. Others
     □ Applicable √Not applicable



42
Section IX                          Corporate governance


I.Related information about corporate governance
     √Applicable □Not applicable
     During the reporting period, the Company strictly followed the regulations specified in the Company law, Securities
Law, Stock Listing Rules, Articles of Association and the legal requirements of China Securities Regulatory Commission
to standardize the Company’s daily operation, further established and improved the internal control system, improved
the internal control management and corporate governance structure, strengthened the insider information management,
strengthened the information disclosure, continuously improved the company governance, made efforts to improve the
construction of legal person governance structure, and gradually established a modern enterprise system, earnestly
protected the legal rights and interests of the Company and all the shareholders, ensuring the sustainable and stable
development.
     After self-inspection, the staffs who know the insider information didn’t trade the stocks of the company before major
price information is disclosed. There is no difference between the company governance and the regulations of China
Securities Regulatory Commission.
     Whether there is important difference between corporate governance and the requirements of relevant regulations of
China Securities Regulatory Commission; if any, please give the reason.
     □ Applicable √Not applicable

II. Brief introduction to the general meeting of shareholders
                                                                    Query index of the website specified for       Date of disclosure for
         Session of meeting                 Convening date
                                                                            publishing resolutions                 publishing resolutions
General Meeting of Shareholders                                                  www.sse.com.cn
                                               May 28,2019                                                              May 29, 2019
in 2018                                                                   Enter the stock code to search
The first interim general meeting of                                             www.sse.com.cn
                                           December 27, 2019                                                          December 28, 2019
shareholders held in 2019                                                 Enter the stock code to search

      Particulars about the general meeting of shareholders
      □ Applicable √Not applicable

III. Duty performance of directors
1     Attendance of the directors at the board meetings and the general meeting of shareholders
                                                                                                                             Attendance at the
                                                                Attendance at Board Meetings                                 general meeting of
                                                                                                                               shareholders
                  Independent
     Director
                   director or     Times of
      Name                                                                           Times of   Times of      Personal            Times of
                       not        meetings        Times of           Times of
                                                                                   attendance   absence    absence for two    attendance in the
                                  should be       personal        attendance by
                                                                                    through a   Times of     consecutive     general meeting of
                                 attended in     attendance    telecommunication
                                                                                      proxy     absence         times           shareholders
                                   this year

    Zhu Lianyu        No               9             9                8                 0           0            No                  2

Huang Qingfeng        No               9             9                8                 0           0            No                  2

Zhang Hongwen         No               9             9                8                 0           0            No                  1

    Liu Qizhong       No               9             9                8                 0           0            No                  1

    Dai Wenkai        No               9             9                8                 0           0            No                  1

 Zhu Xiaohuai         No               9             9                8                 0           0            No                  2

    Yan Yunfu         No               8             8                7                 0           0            No                  0

 Zhao Zhanbo          Yes              9             9                8                 0           0            No                  1



                                                                                                                                            43
                                                                                                                              Attendance at the
                                                             Attendance at Board Meetings                                     general meeting of
                                                                                                                                shareholders
                  Independent
      Director
                   director or     Times of
       Name                                                                       Times of   Times of      Personal                Times of
                       not        meetings      Times of          Times of
                                                                                attendance   absence    absence for two        attendance in the
                                  should be     personal       attendance by
                                                                                 through a   Times of     consecutive         general meeting of
                                 attended in   attendance   telecommunication
                                                                                   proxy     absence         times               shareholders
                                   this year

     Ji Linhong       Yes            9             9               8                0           0             No                      1

     Bai Yunxia       Yes            9             9               8                0           0             No                      2

     Yang Jun         Yes            9             9               8                0           0             No                      2

     Zhang Hua        Yes            4             4               4                0           0             No                      1

 Sheng Leiming        Yes            4             4               4                0           0             No                      1

      Ling He         Yes            2             2               2                0           0             No                      0


       Explanations for personal absence from the meeting for two consecutive times
       □ Applicable √Not applicable

 Times of the board meetings convened in current year                                                                     9

 Including: times of on-site meetings                                                                                     1

 Times of meetings convened through telecommunication                                                                     8

 Times of meetings convened on-site and through telecommunication                                                         0


2      Objections from independent directors against related issues of the Company
       □ Applicable √Not applicable

3      Others
       □ Applicable √Not applicable

IV. As for the important suggestions and advices raised by the special interest committees under the Board of
Directors while performing their duties in the reporting period, where there is any objection, the details shall be
disclosed
       □ Applicable √Not applicable

V. Description of the risks found by the board of supervisors
       □ Applicable √Not applicable

VI. Particulars about the inability of the Company and its controlling shareholders to guarantee the independence
and keep independent operation capacity with regard to business, personnel, assets, institution, finance, etc.
       □ Applicable √Not applicable

       Where there is horizontal competition, the corresponding solutions, job schedule and follow-up wok plan of the Company
       □ Applicable √Not applicable

VII. Establishment and implementation of the assessment mechanism and incentive mechanism for senior
executives during the reporting period
       √Applicable □Not applicable
       The Company appoints the directors, supervisors and senior executives in accordance with the provisions of Company



44
Law and the Articles of Association, has built up a preliminary cultivation, selection, supervision, assessment, reward
and punishment, constraint system for the Company’s senior executives suitable for the actual situation. The Company
formulated corresponding administrative methods for senior executives. According to the production and development need
of the Company, the senior executives are appointed, resigned and assessed following the principles of “being from top to
bottom integrating the virtue and talent”, and are subject to annual appraisal by the Company according to the due diligence
and job performance. The Company will gradually improve the existing performance evaluation system and salary system,
promote medium and long term incentive system for all senior executives and the core technical personnel of the Company,
to continue to stimulate the enthusiasm of the senior executives, to create new achievements, and to ensure the benefit
maximization and standard operation of the Company.

VIII. Disclosure of self-evaluation report on internal control or not
     √Applicable □Not applicable
     Ernst & Young LLP (special general partnership), engaged by the Company, had audited the effectiveness of the internal
control of the financial statement as of December 31, 2019 and issued a standard internal control audit report with clean
opinion (see the attachment to the announcement for details).
     Description of the important deficiencies in internal control during the reporting period
     □ Applicable √Not applicable

IX. Particulars about the audit report on internal control
     √Applicable □Not applicable
     Ernst & Young LLP (special general partnership), engaged by the Company, had audited the effectiveness of the internal
control of the financial statement as of December 31, 2019 and issued a standard internal control audit report with clean
opinion (see the attachment to the announcement for details).
     Audit report on internal control disclosed or not: Yes

X. Others
    □ Applicable √Not applicable




Section X                     Related Information on Corporate Bonds


    □Applicable √Not applicable




                                                                                                                          45
Section XI                      Financial Report


I. Auditors' report
√Applicable □Not applicable
                                                    Auditors' Report
                                                                                        Ernst & Young (2020) SZ No.61249778_B01
                                                                                  Shanghai Zhenhua Heavy Industries Co., Ltd.
All shareholders of Shanghai Zhenhua Heavy Industries Co., Ltd.:

I. Opinion
     We have audited the financial statements of Shanghai Zhenhua Heavy Industries Co., Ltd. (hereinafter referred to as
the "Company"), which comprise the consolidated balance sheet and the Company's balance sheet as at December 31,
2019, the consolidated income statement and the Company's income statement, the consolidated statement of changes in
shareholders’ equity and the Company's statement of changes in owners’ equity and the consolidated statement of cash
flows and the Company's statement of cash flows for the year then ended as well as the notes to the financial statements.
     In our opinion, the financial statements of the Company attached are prepared, in all material respects, in accordance
with the Accounting Standards for Business Enterprises, and fairly present the consolidated financial position and the
Company's financial position as at December 31, 2019 and the consolidated operating results and cash flows and the
Company's operating results and cash flows for the year then ended.

II. Basis for Our Opinions
     We conducted our audit in accordance with Chinese Certified Public Accountants Auditing Standards. Our
responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Financial
Statements section of this auditors' report. According to the Code of Ethics for Certified Public Accountants of China, we are
independent of the Company, and we have fulfilled other responsibilities in the aspect of code of ethics. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

III. Key Audit Matters
      Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements for the current period. The response to these matters is based on the overall audit of the financial
statements and the formation of audit opinions. We do not express our opinions on these matters separately. The following
description of how our audit addressed the key audit matter is also against this background.
      We have fulfilled the responsibilities stated in “Responsibilities of Certified Public Accountant for Auditing of Financial
Statement” in this report, including the responsibilities related to these key auditing matters. Correspondingly, our auditing
work includes the implementation of the auditing procedure designed for dealing with the great misstatement risks of the
financial statement to be evaluated. The results from the implementation of the auditing procedure by us, including the
procedure to be implemented for the following key auditing matters, offers a foundation for releasing the auditing opinions of
the financial statements.




46
Key Audit Matters:                                                                  How our audit addressed the key audit matter:

1. Inventory depreciation reserves

Shanghai Zhenhua Heavy Industries Co., Ltd. and its subsidiaries
(“Group”) are mainly engaged in manufacturing the port container crane;
in addition, they are also engaged in the manufacture of bulk handling
                                                                                    Our procedure mainly included knowing and testing the
machine, offshore heavy-duty machine and large-sized steel structure. Its
                                                                                    validity of the control related to the provision of inventory
inventories mainly include engineering raw materials, outsourcing parts
                                                                                    depreciation reserves and the method of calculating the
and components, products in the process and inventory goods. Since the
                                                                                    net realizable value of the Group. We also implemented
production cycle of the products of this group is relatively long, the net
                                                                                    the related auditing procedures over the inventory such as
realizable value of the related inventory may fluctuate with the change in
                                                                                    supervision of inventory to verify whether the Group had
the market demand, resulting in the inventory depreciation risks. The Group
                                                                                    marked the inventory with slow turnover and defectives
sets aside the inventory depreciation reserves according to the balance of
                                                                                    and taken into full account in provision of inventory
the inventory cost and the net realizable value. The net realizable value is
                                                                                    depreciation reserves. In addition, we obtained the
determined as per the estimated selling price of the inventory minus the
                                                                                    computation sheet of provision of inventory depreciation
cost, the estimated selling expenses and the related taxes that may occur
                                                                                    reserves on December 31, 2019 from the Group,
in the completion on the assumption that the management layer adopts a
                                                                                    rechecked the calculation method. As to the key elements
certain estimate and hypothesis in determining the net realizable value. In
                                                                                    taken into consideration by the Group in calculating the
case of difference between the actual figure and the originally estimated
                                                                                    net realizable value, including the estimated selling price,
figure, the related balance will affect the book value of the inventory and the
                                                                                    the cost that may occur till completion, the estimated
depreciation loss in the estimated fluctuation.
                                                                                    selling expenses and the related taxes, we evaluated
As of December 31, 2019, in the consolidated financial statements, the
                                                                                    the hypothesis and the estimates through analyzing the
balance of inventories was RMB 9.28 billion and the reserve for inventory
                                                                                    related historical data and comparing the after-date data.
depreciation was RMB 720 million; in the financial statements of the
                                                                                    We also tested the calculation of the provision amount of
Company, the balance of inventories was RMB 9.37 billion and the reserve
                                                                                    the inventory depreciation reserves.
for inventory depreciation was RMB 760 million.
The accounting policy and other disclosures regarding the inventory are
stated in Note III (11), Note III (30) and Note V (9) of the financial statement.

2. Provision for bad debts of accounts receivable

The accounts receivable of the Group is mainly from the business contract
on port machine and ocean engineering manufacturing. Since it involves
large contracted value, long construction period, relatively complicated
technical parameters, the implementation of the contract may be affected
by the periodicity of the economic environment. The accounts receivable
of the Group has certain risk in the recovery in case of any dispute in
contract or we evaluated the accounting estimate relating to the stagnant
                                                                                    We evaluated the accounting estimate relating to the
industry. As from January 1, 2019, the Group adopted the new financial
                                                                                    depreciation reserves, such as the financial status and
instrument standards. The provisions for bad debts of accounts receivable
                                                                                    credit rating of the counterpart; checked the account age
are recognized on the basis of estimated credit losses, involving major
                                                                                    of accounts receivable and historical repayment record
judgment and estimates. The management of the Group analyzed the
                                                                                    and evaluated whether the financial problems of the
financial position of counter parties, guarantee acquired for accounts
                                                                                    counter party had effects on the recovery of the accounts
receivable, historical repayment records of accounts receivable, as well
                                                                                    receivable; we checked the related supporting documents
as the credit rating and future economic situations of counter parties for
                                                                                    for the selected samples and the account age of the
evaluating the credit risk of accounts receivable.
                                                                                    accounts receivable; reviewed the after-date recovery
As of December 31, 2019, in the consolidated financial statements, the
                                                                                    of the accounts receivable and rechecked the related
balance of accounts receivable was RMB 6.64 billion and the provision               evidences of the accounts receivable that could not be
for bad debts of accounts receivable was RMB 1.68 billion; in the financial         recovered and was written off (if any).
statements of the Company, the balance of accounts receivable was RMB
12.78 billion and the provision for bad debts of accounts receivable was
RMB 1.59 billion.
The accounting policy and other disclosures regarding the provision for bad
debts of accounts receivable are stated in Note III (8), Note III (30), Note V
(5) and Note XII (1) of the financial statements.




                                                                                                                                               47
 Key Audit Matters                                                                How our audit report addressed this key audit matter:

 3.Recognition of income from construction contract

 Most of the income of the Group comes from the one of the construction           We evaluated and tested the internal control for
 contracts on the large-sized port equipment, heavy equipment, steel              accounting the contract cost, contract income, achieved
 structure and construction projects customized by the customer. The Group
                                                                                  node and recognition and for calculating the flow of
 adopts the percentage of completion method to calculate the income of the
                                                                                  completion schedule. We got the important contracts to
 construction contracts. As to the large-sized port equipment, its completion
                                                                                  verify the total contract income and review the important
 schedule is determined according to the corresponding percentage of
 completion of the confirmation node of the income achieved by the                contract clauses. Through selecting the samples, we
 construction contract at the end of period. As to the heavy equipment and        verified whether the contract cost that occurred conformed
 construction period, its completion schedule is determined according to the      to the certification. We implemented the cutoff check
 percentage of the accumulative contract cost in the expected total contract      procedure to validate the cost was confirmed in the proper
 cost. As to the fabrication of the steel structure, its completion schedule is   accounting period; as to the large-sized port equipment,
 determined according to the percentage of the accumulatively completed           through sampling, we got the certification for the achieved
 processing tonnage in the expected total processing tonnage. The above-          node and made the sampling for field observation.
 mentioned methods involve the use of the major judgment and estimate of          We evaluated the judgment and estimate of the total
 the management, including the achieved node, expected total contract cost,
                                                                                  contract cost and total processing amount made by the
 total contract income and expected contract loss. In addition, the income,
                                                                                  management. We made sampling to calculate and check
 cost and realizable gross profit of the contract may change with the actual
                                                                                  the income determined by the occurred contract cost and
 conditions, resulting in important differences in the initial estimate of the
 Group.                                                                           the expected total contract cost again. In addition, we
 The accounting policy and other disclosures regarding the recognition of         implemented the analysis- oriented recheck procedure
 income from construction contract are stated in Note III (12), Note III (30),    against the gross profit of the key construction contract of
 Note V (10), Note V (46) and Note XII (4) of the financial statements.           the Group.



IV. Other Information
     The management of Shanghai Zhenhua Heavy Industries Co., Ltd. shall be responsible for other information. The other
information comprises information of the annual report, but excludes the financial statements and our auditors' report.
     Our opinion on the financial statements does not cover the other information, and we do not and will not express any
form of assurance conclusion thereon.
     In connection with our audit of the financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated.
     If, based on the work we have performed on the other information that we obtained prior to the date of this auditors'
report, we conclude that there is a material misstatement of this other information, we are required to report that fact. In this
regard, we have nothing to report.

V. Responsibilities of the Management and Those Charged with Governance for the Financial Statements
      The Management is responsible for preparing the financial statements in accordance with the requirements of
Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing, implementing and
maintaining internal control that is necessary to ensure that the financial statements are free from material misstatements,
whether due to frauds or errors.
      In preparing the financial statements, the Management is responsible for assessing the Company’s going-concern
ability, disclosing the matters related to going concern (if applicable) and using the going-concern assumption, unless the
Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
      Those charged with governance are responsible for overseeing the Company's financial reporting process.

VI. Auditors' Responsibilities for the Audit of the Financial Statements
    Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards


48
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
      During the process of an audit conducted in accordance with audit standards, we exercise professional judgment and
maintain professional scepticism throughout the audit. Meanwhile, we also implement the following work:
      (1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate
to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
      (2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
      (3) Evaluate the appropriateness of accounting policies used by and the reasonableness of accounting estimates and
related disclosures made by the management.
      (4) Conclude on the appropriateness of the Management's use of the going concern basis of accounting.
      Based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the ability of Shanghai Zhenhua Heavy Industries Co., Ltd. to continue as a going concern.
      If we conclude that a material uncertainty exists, we are required to, in our auditors' report, draw attention of the users
of statements to the related disclosures in the financial statements; if such disclosures are inadequate, we should modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report.
      However, future events or conditions may cause Shanghai Zhenhua Heavy Industries Co., Ltd. to cease to continue as
a going concern.
      (5) Evaluate the overall presentation, structure and content (including the disclosures) of the financial statements, and
evaluate whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
      (6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and
performance of the group audit, and bear full responsibility for our audit opinion.
      We communicate with those charged with governance regarding the planned scope and timing of the audit, significant
audit findings and other matters, including any significant deficiencies in internal control that we identify during our audit.
      We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them in regard to all relationships and other matters that
may reasonably be thought to affect our independence, and related safeguards (if applicable).
      From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.




       Ernst & Young LLP.                                      Certified Public Accountant of China: Liu Wei
   (Special General Partnership)                               (Engagement Partner)



                                                               Certified Public Accountant of China: Gu Cheng Li




            Beijing, China                                     March 31, 2020




                                                                                                                              49
II. Financial Report
                                       Consolidated Balance Sheet as As at December 31, 2019


Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.                                             Unity: Yuan Currency: RMB

                       Assets                              Note V          As at December 31, 2019   As at December 31, 2018
Current assets
     Monetary funds                                          1                     3,310,297,451             3,697,338,708
     Financial assets held for trading                       2                     1,739,792,062                         -
     Financial assets measured at fair value
                                                             3                                 -                52,920,084
     through the current profit or loss
     Notes receivable                                        4                         5,650,000               189,371,105
     Accounts receivable                                     5                     4,966,175,528             5,032,548,741
     Receivables financing                                   6                       406,408,604                         -
     Advances to suppliers                                   7                       935,878,777             1,681,187,715
     Other receivables                                       8                     1,176,561,508             1,149,035,349
     Inventories                                             9                     8,561,251,580             8,803,035,942
     Outstanding payments for construction
                                                            10                    12,434,158,624            12,054,580,392
     completed
     Non-current assets maturing within one year             11                    1,313,203,581               894,638,424
     Other current assets                                   12                       720,183,574             1,152,476,439
Total current assets                                                              35,569,561,289            34,707,132,899
Non-current assets
     Available-for-sale financial assets                    13                                 -             1,214,533,554
     Long-term receivables                                  14                     5,227,728,420             5,188,341,089
     Long-term equity investments                           15                     2,873,673,745             2,775,801,760
     Other equity instrument investment                     16                        61,981,268                         -
     Investment properties                                  17                       418,425,533               436,760,631
     Fixed assets                                           18                    21,454,967,299            18,654,732,030
     Construction in progress                               19                     4,380,489,888             3,050,468,292
     Intangible assets                                      20                     3,506,541,366             3,588,412,732
     Goodwill                                               21                       268,434,934               266,591,462
     Long-term deferred expenses                            22                         1,444,636                 5,112,664
     Deferred income tax assets                             23                       486,197,635               539,684,925
     Other non-current assets                               24                       161,337,287               170,792,589
Total non-current assets                                                          38,841,222,011            35,891,231,728
Total assets                                                                      74,410,783,300            70,598,364,627
      Liabilities and Shareholders' Equity                 Note V         As at December 31, 2019    As at December 31, 2018
Current liabilities
     Short-term borrowings                                  26                    22,001,319,380            16,554,687,487
     Financial liabilities held for trading                 27                         7,312,741                         -
     Notes payable                                          28                     3,420,945,451             2,732,404,222
     Accounts payable                                       29                     7,869,378,365             7,036,869,701
     Advances from customers                                30                       822,987,986               494,744,374



50
                             Consolidated Balance Sheet (Continued) as As at December 31, 2019


Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.                                             Unity: Yuan Currency: RMB

     Liabilities and Shareholders' Equity                      Note V      As at December 31, 2019   As at December 31, 2018
    Amount settled for uncompleted work                          10                1,679,950,879               1,989,560,887
    Employee compensation payable                                31                  329,978,281                310,112,327
    Taxes and surcharges payable                                 32                  144,506,742                164,964,681
    Other payables                                               33                  711,389,996               1,098,580,447
    Non-current liabilities maturing within one year             34                7,287,484,513               4,209,532,510
Total current liabilities                                                         44,275,254,334            34,591,456,636
Non-current liabilities
    Long-term borrowings                                         35                8,413,339,986            15,097,725,259
    Long-term payables                                           36                1,741,945,636               1,967,461,119
    Estimated liabilities                                        37                  484,000,772                439,052,683
    Deferred income                                              38                  458,722,579                469,296,220
    Deferred income tax liabilities                              23                   89,856,727                132,401,282
    Other non-current liabilities                                39                  376,626,821                288,474,696
Total non-current liabilities                                                     11,564,492,521            18,394,411,259
Total liabilities                                                                 55,839,746,855            52,985,867,895
Shareholders' equity
    Share capital                                                40                5,268,353,501               5,268,353,501
    Capital reserves                                             41                4,834,854,332               4,648,919,658
    Other comprehensive income                                   42                   23,530,451                223,853,860
    Special reserves                                             43                    3,615,638                  3,019,173
    Surplus reserves                                             44                1,761,198,709               1,696,762,554
    Undistributed profits                                        45                3,651,851,383               3,344,953,206
    Total equity attributable to shareholders of
                                                                                  15,543,404,014            15,185,861,952
    the parent company
    Minority equity                                                                3,027,632,431               2,426,634,780
Total shareholders' equity                                                        18,571,036,445            17,612,496,732
Total liabilities and shareholders' equity                                        74,410,783,300            70,598,364,627

The accompanying notes form an integral part of these financial statements.



Legal Representative:                              Accounting principal:              Head of the Accounting
                                                                                      Department:




                                                                                                                               51
                                              Consolidated Income Statement Year 2019


Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.                                            Unity: Yuan Currency: RMB

                                                           Note V               Year 2019                  Year 2018

Operating revenue                                           46                   24,595,587,883            21,812,389,644

     Less: operating costs                                  46                   20,590,531,322            18,082,285,752

     Taxes and surcharges                                   47                     108,028,681                116,279,994

     Selling and distribution expenses                      48                     122,517,036                115,541,161

     General and administrative expenses                    49                    1,095,131,287             1,142,337,348

     Research and development expenditures                  50                     887,096,178                672,614,073

     Financial expenses                                     51                    1,496,586,414             1,522,264,813

     Including: interest expenses                                                 1,702,292,369             1,603,062,758

                Interest income                                                    331,452,183                332,607,896

     Plus: other income                                     52                      88,459,588                112,065,705

          Investment income                                 53                     174,600,552                116,030,979

     Including: income from investment in
                                                                                   110,724,316                 96,886,332
     associates and joint ventures

     Income from changes in fair value                      54                      88,019,844                 44,481,806

     Losses from credit impairment                          55                     (38,761,593)                          -

     Losses from asset impairment / reversal                56                     (52,494,284)                12,576,222

     Income from disposal of assets                         57                      49,091,913                155,557,716

     Operating profits                                                             604,612,985                601,778,931

     Plus: non-operating revenue                            58                      16,462,710                 12,102,280

     Less: non-operating expenses                           59                      30,203,498                 76,825,324

Total profits                                                                      590,872,197                537,055,887

     Less: income tax expenses                              61                      93,750,584                143,213,448

           Net profit                                                              497,121,613                393,842,439

     Net profit from continued operation                                           497,121,613                393,842,439

     Classified by ownership

     Net profit attributable to shareholders of the
                                                                                   514,930,143                443,005,092
     parent company

     Minority interest income                                                      (17,808,530)               (49,162,653)

     Other comprehensive income of tax                                              22,021,165                (30,764,830)

     Other comprehensive income, net of tax,
                                                            42                      15,806,812                (50,039,118)
     attributable to owners of the parent company

     Other comprehensive income that can not
     be reclassified into profit or loss

     Changes in fair value of other equity
                                                                                        5,656,529                        -
     instrument investments




52
                                     Consolidated Income Statement (Continued) Year 2019


Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.                                        Unity: Yuan Currency: RMB

                                                              Note V         Year 2019                 Year 2018

    Other comprehensive income that will be
    reclassified into profit or loss

    Other comprehensive income that can be
    transferred to profit or loss under the equity              15               (2,004,706)               (4,655,831)
    method

    Changes in fair value of available-for-sale
                                                                13                          -             (76,002,428)
    financial assets

    Differences arising from translation of
                                                                                 12,154,989                30,619,141
    foreign-currency financial statements

    Other comprehensive income, net of tax
                                                                42                6,214,353                19,274,288
    attributable to minority shareholders

Total comprehensive income                                                      519,142,778               363,077,609

    Including:

Total comprehensive income attributable to
                                                                                530,736,955               392,965,974
shareholders of the parent company

Total comprehensive income attributable to
                                                                                (11,594,177)              (29,888,365)
minority shareholders

    Earnings per share                                          62

    Basic earnings per share                                                             0.10                      0.08

    Diluted earnings per share                                                           0.10                      0.08




Legal Representative:                             Accounting principal:          Head of the Accounting
                                                                                 Department:




                                                                                                                          53
                                        Consolidated Statement of Changes in Shareholders' Equity Year 2019


Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.                                                                                            Unity: Yuan Currency: RMB
For the Year Ended December 31, 2019

                                                              Equity attributable to the shareholders of the parent company
                                                                            Other                                                                                           Total
                                                          Capital                          Special        Surplus       Undistributed
                                        Share capital                   comprehensive                                                   Sub-total       Minority equity shareholders'
                                                         reserves                         reserves       reserves          profits
                                                                           income                                                                                          equity
I. Balance at the end of the
                                        5,268,353,501   4,648,919,658      223,853,860     3,019,173 1,696,762,554 3,344,953,206 15,185,861,952          2,426,634,780 17,612,496,732
current year
Plus:Adjustments for changes in
                                              -                     -     (216,130,221)              -              -     119,821,864    (96,308,357)       (9,011,824)   (105,320,181)
accounting policies
II. Balance at the beginning of
                                        5,268,353,501   4,648,919,658        7,723,639     3,019,173 1,696,762,554 3,464,775,070 15,089,553,595          2,417,622,956 17,507,176,551
the current year
III. Increase/decrease in the current year
(I) Total comprehensive income                -                     -       15,806,812               -              -     514,930,143    530,736,955       (11,594,177)    519,142,778
(II) Capital contributed or reduced
by shareholders
1. Investments received by
subsidiaries from minority                    -          185,934,674                  -              -              -               -    185,934,674       622,315,326     808,250,000
shareholders
(III) Profit distribution
1. Withdrawal of surplus reserves             -                     -                 -              -   64,436,155       (64,436,155               -                 -                 -
2. Profit distributed to
                                              -                     -                 -              -              -    (263,417,675   (263,417,675)        (973,150)    (264,390,825)
shareholders
(IV) Special reserves
1. Amount withdrawn in the current
                                              -                     -                 -   71,228,319                -               -     71,228,319         4,507,523      75,735,842
year
2. Amount used in the current year            -                     -                 - (70,631,854)                -               -    (70,631,854)       (4,246,047)    (74,877,901)
IV. Balance at the end of the
                                        5,268,353,501 4,834,854,332         23,530,451     3,615,638 1,761,198,709 3,651,851,383 15,543,404,014          3,027,632,431 18,571,036,445
current year

For the Year Ended December 31, 2018

I. Balance at the beginning of
                                        4,390,294,584   5,526,978,575      273,892,978     1,914,832 1,618,543,971 3,199,681,426 15,011,306,366          1,817,314,295 16,828,620,661
the current year
II. Increase/decrease in the current year
(I) Total comprehensive income                -                     -      (50,039,118)              -              -     443,005,092    392,965,974      (29,888,365)     363,077,609
(II) Capital contributed or reduced
by shareholders
1.Investments received by
subsidiaries from minority                    -                     -                 -              -              -               -               -      640,453,310     640,453,310
shareholders
(III) Profit distribution
1. Withdrawal of surplus reserves             -                     -                 -              -   78,218,583      (78,218,583)               -                 -                 -
2. Profit distributed to
                                              -                     -                 -              -              -   (219,514,729)   (219,514,729)       (1,481,438)   (220,996,167)
shareholders
(IV) Internal carry-forward of equity
1. Conversion of capital reserves
                                        878,058,917     (878,058,917)                 -              -              -               -               -                 -                 -
into paid-in capital
(V) Special reserves
1. Amount withdrawn in the current
                                              -                     -                 -   40,081,847                -               -     40,081,847         4,422,690      44,504,537
year
2. Amount used in the current year            -                     -                 - (38,977,506)                -               -    (38,977,506)       (4,185,712)    (43,163,218)
III. Balance at the end of the
                                        5,268,353,501   4,648,919,658      223,853,860     3,019,173 1,696,762,554 3,344,953,206 15,185,861,952          2,426,634,780 17,612,496,732
current year




Legal Representative:                                            Accounting principal:                                         Head of the Accounting
                                                                                                                               Department:


54
                                        Consolidated Statement of Cash Flows Year 2019


Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.                                          Unity: Yuan Currency: RMB

                                                            Note V              Year 2019                 Year 2018

I. Cash flows from operating activities

    Cash received from sale of goods and rendering
                                                                                23,025,755,641           20,116,019,149
    of services

    Refunds of taxes and surcharges received                                     1,271,698,523              327,889,433

    Cash received from other operating activities             63                   329,767,258              380,058,325

    Sub-total of cash inflows from operating activities                         24,627,221,422           20,823,966,907

    Cash paid for goods purchased and services
                                                                                19,942,201,097           17,045,009,084
    received

    Cash paid to and on behalf of employees                                      2,190,735,091            2,128,181,027

    Cash paid for taxes and surcharges                                             296,562,379              399,974,649

    Cash paid for other operating activities                                       907,509,746              696,858,168

    Sub-total of cash outflows from operating activities                        23,337,008,313           20,270,022,928

    Net cash flows from operating activities                 64(1)               1,290,213,109              553,943,979

II. Cash flows from the investing activities

    Cash received from disinvestment                                                50,000,000                         -

    Cash received from returns on investments                                       73,626,236               65,672,231

    Net cash received from disposal of fixed assets,
                                                                                   283,066,093              367,198,136
    intangible assets and other long-term assets

    Cash received from other investing activities             63                   267,388,460              302,041,173

    Sub-total of cash inflows from investing activities                            674,080,789              734,911,540

    Cash paid to acquire and construct fixed assets,
                                                                                 1,735,742,239            3,105,409,114
    intangible assets and other long-term assets

    Cash paid for investments                                                      485,500,000              408,962,976

    Sub-total of cash outflows from investing activities                         2,221,242,239            3,514,372,090

    Net cash flows from the investing activities                                (1,547,161,450)          (2,779,460,550)

III. Cash flows from financing activities

    Cash from absorption of investments                                            808,250,000              194,345,310

    Including: cash received by subsidiaries from
                                                                                   808,250,000              194,345,310
    investments by minority shareholders

    Cash received from borrowings                                               31,773,610,203           34,277,959,026

    Cash received from other financing activities             63                   819,334,975            1,284,314,355




                                                                                                                           55
                                 Consolidated Statement of Cash Flows (Continued) Year 2019


Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.                                        Unity: Yuan Currency: RMB

                                                                  Note V       Year 2019                Year 2018

     Sub-total of cash inflows from financing activities                       33,401,195,178          35,756,618,691

     Cash paid for debt repayments                                             29,962,425,560          33,134,286,292

     Cash paid for distribution of dividends and profits
                                                                                2,053,070,224             1,828,486,604
     or payment of interest

     Including: dividends and profits paid to minority
                                                                                     973,150                 1,481,438
     shareholders by subsidiaries

     Cash paid for other financing activities                       63          1,243,765,574             1,202,299,585

     Sub-total of cash outflows from financing activities                      33,259,261,358          36,165,072,481

     Net cash flows from financing activities                                    141,933,820              (408,453,790)

IV. Effect of fluctuation in exchange rate on cash
                                                                                  34,052,125               109,110,732
and cash equivalents

V. Net decrease in cash and cash equivalents                                     (80,962,396)          (2,524,859,629)

     Plus: beginning balance of cash and cash
                                                                                3,148,987,372             5,673,847,001
     equivalents

VI. Ending balance of cash and cash equivalents                   64(3)         3,068,024,976             3,148,987,372




Legal Representative:                            Accounting principal:           Head of the Accounting
                                                                                 Department:




56
                                              Balance Sheet As at December 31, 2019


Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.                                            Unity: Yuan Currency: RMB

                        Assets                             Note XII     As at December 31, 2019    As at December 31, 2018

Current assets

    Monetary funds                                                               2,009,711,462              2,459,295,919

    Financial assets held for trading                                             717,766,887                           -

    Financial assets measured at fair value
                                                                                              -                44,481,806
    through the current profit or loss

    Notes receivable                                                                  5,650,000                75,801,953

    Accounts receivable                                       1                 11,188,977,446              7,136,766,887

    Receivables financing                                                         372,373,708                           -

    Advances to suppliers                                                        2,516,366,730              2,268,577,972

    Other receivables                                         2                  7,850,320,715             13,955,146,640

    Inventories                                                                  8,605,357,557              7,658,200,294

    Outstanding payments for construction
                                                                                 7,399,709,689              7,476,738,206
    completed

    Non-current assets maturing within one year                                    16,068,800                  16,068,800

    Other current assets                                                          242,069,645                 683,547,950

Total current assets                                                            40,924,372,639             41,774,626,427

Non-current assets

    Available-for-sale financial assets                                                       -               145,157,462

    Long-term receivables                                                         349,516,318                 368,585,118

    Long-term equity investments                              3                  8,748,485,729              8,636,018,724

    Other equity instrument investment                                             61,981,268                           -

    Investment properties                                                         418,425,533                 436,760,631

    Fixed assets                                                                 4,484,852,694              4,819,571,556

    Construction in progress                                                      352,334,608                 308,737,034

    Intangible assets                                                            1,537,053,308              1,571,347,557

    Deferred income tax assets                                                    461,638,248                 510,532,925

Total non-current assets                                                        16,414,287,706             16,796,711,007

Total assets                                                                    57,338,660,345             58,571,337,434

            Liabilities and owners' equity                 Note XII   As at December 31, 2019     As at December 31, 2018

Current liabilities

    Short-term borrowings                                                       16,511,846,099             12,958,295,349

    Notes payable                                                                4,115,677,123              2,533,542,476

    Accounts payable                                                             4,097,874,390              6,326,807,559

    Advances from customers                                                       490,409,652                 370,660,873

    Amount settled for uncompleted work                                          2,053,025,876              2,390,332,471




                                                                                                                            57
                                       Balance Sheet (Continued) As at December 31, 2019


Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.                                             Unity: Yuan Currency: RMB

             Liabilities and owners' equity                 Note XII     As at December 31, 2019   As at December 31, 2018

     Employee compensation payable                                                   312,443,598                  294,662,685

     Taxes and surcharges payable                                                     24,536,759                   22,636,402

     Other payables                                                                1,223,412,212                 1,508,889,581

     Non-current liabilities maturing within one year                              5,454,698,322                 2,820,655,037

Total current liabilities                                                         34,283,924,031            29,226,482,433

Non-current liabilities

     Long-term borrowings                                                          6,446,433,319            12,922,319,986

     Long-term payables                                                                        -                  182,174,839

     Estimated liabilities                                                           470,724,247                  422,869,949

     Deferred income                                                                 329,345,661                  336,941,770

     Other non-current liabilities                                                    21,272,925                    9,783,043

Total non-current liabilities                                                      7,267,776,152            13,874,089,587

Total liabilities                                                                 41,551,700,183            43,100,572,020

Shareholders' equity

     Share capital                              &