Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited takeno responsibility for the contents of this announcement, make no representation as to its accuracy orcompleteness and expressly disclaim any liability whatsoever for any loss howsoever arising from orin reliance upon the whole or any part of the contents of this announcement.

吉利汽車控股有限公司
GEELY AUTOMOBILE HOLDINGS LIMITED(Incorporated in the Cayman Islands with limited liability)(Stock code: 175)

ANNOUNCEMENT OF INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2019
FINANCIAL HIGHLIGHTS
Six months ended 30 June
2019
2018
(Unaudited)(Unaudited)

Change%Revenue (RMB’000)

47,558,617

53,708,605(11)Profit attributable to the equity holders of
the Company (RMB’000)

4,009,475

6,670,023

(40)

44.39

74.33

(40)

43.92

72.65

(40)

651,680

766,630(15)

Earnings per share
Basic (RMB cents)
Diluted (RMB cents)
Sales volume (Units) (Note 2)

At 30
At 31
June 2019 December 2018
(Unaudited)(Audited)
Total assets (RMB’000)

91,536,361

91,460,980

0Equity attributable to the equity holders of
the Company (RMB’000)

46,536,333

44,943,977

4

5.11

5.00

2

Net assets per share attributable to the equity
holders of the Company (RMB)
Note:
1.

At a meeting of the Board held on 21 August 2019, the Board resolved not to pay an interim dividend
to the Company’s shareholders (2018: Nil).

2.

It included the sales volume of “Lynk&Co” vehicles sold by the Group’s 50%-owned joint venture.
-1-

INTERIM RESULTS
The Board of Directors (the “Board”) of Geely Automobile Holdings Limited (the “Company”) is
pleased to announce the unaudited interim results of the Company and its subsidiaries (the “Group”)
for the six months ended 30 June 2019. These interim results have been reviewed by the Company’s
Audit Committee, comprising solely the independent non-executive directors, one of whom chairs thecommittee, and the Company’s auditor, Grant Thornton Hong Kong Limited.

-2-

CONDENSED CONSOLIDATED INCOME STATEMENTFOR THE SIX MONTHS ENDED 30 JUNE 2019

Note

Revenue
Cost of sales

Six months ended 30 June
2019
2018
RMB’000
RMB’000(Unaudited)(Unaudited)(Note)
47,558,617(39,089,518)

53,708,605(42,871,336)

4

8,469,099
612,616(2,256,165)

10,837,269
768,588(2,269,447)

5(a)(2,454,944)(3,350)48,646
41,769306,917(1,608,650)(8,046)
17,393(5,295)
243,5325
64,764,588(717,540)

7,975,344(1,239,446)

Profit for the period

4,047,048

6,735,898

Attributable to:Equity holders of the Company
Non-controlling interests

4,009,475
37,5736,670,023
65,875

Profit for the period

4,047,048

6,735,898

3

Gross profit
Other income
Distribution and selling expenses
Administrative expenses, excluding share-based
payments
Share-based payments
Finance income, net
Share of results of associates
Share of results of joint ventures
Profit before taxation
Taxation

Earnings per share
Basic

8

RMB44.39 cents

RMB74.33 cents

Diluted

8

RMB43.92 cents

RMB72.65 centsNote: The Group has initially applied HKFRS 16 at 1 January 2019 using the modified retrospective approach.
Under this approach, comparative information is not restated. See note 2.

-3-

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2019
Six months ended 30 June
2019
2018
RMB’000
RMB’000(Unaudited)(Unaudited)(Note)
Profit for the period

4,047,048

6,735,898(58,586)

46,304

Total comprehensive income for the period

3,988,462

6,782,202

Attributable to:Equity holders of the Company
Non-controlling interests

3,951,490
36,972

6,715,853
66,349Total comprehensive income for the period

3,988,462

6,782,202

Other comprehensive (expense)/income (after tax of
RMBNil) for the period:
Item that may be reclassified subsequently to profit or loss:– Exchange differences on translation of financial statementsof foreign operations

Note: The Group has initially applied HKFRS 16 at 1 January 2019 using the modified retrospective approach.
Under this approach, comparative information is not restated. See note 2.

-4-

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2019
As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)(Note)

23,148,155
16,188,409
3,392,162
26,414446,438
7,824,535
262,661
794,671

23,422,617
14,993,188
3,268,035
26,414
404,669
5,917,618–
642,959

52,083,445

48,675,500–
3,547,999
21,876,385
4,622
27,73013,996,180

66,5384,097,380
22,864,974–
19,392
15,737,196

39,452,916

42,785,480

40,353,829
1,373,120
22,784446,829

41,438,036
1,375,280–
947,085

42,196,562

43,760,401

Net current liabilities(2,743,646)(974,921)

Total assets less current liabilities

49,339,799

47,700,579

Note

Non-current assets
Property, plant and equipment
Intangible assets
Land lease prepayments
GoodwillInterests in associates
Interests in joint ventures
Trade and other receivables
Deferred tax assets

9
10

11
12
14

Current assets
Land lease prepayments
Inventories
Trade and other receivables
Income tax recoverable
Pledged bank deposits
Bank balances and cash

13
14

Current liabilities
Trade and other payables
Bank borrowings
Lease liabilities
Income tax payable

16
17
19

-5-

As at30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)(Note)

166,756
46,369,577

164,470
44,779,507

Equity attributable to equity holders of the Company
Non-controlling interests

46,536,333
452,019

44,943,977
430,741

Total equity

46,988,352

45,374,718

2,046,309
34,909270,2292,047,822–
278,039

2,351,447

2,325,861

49,339,799

47,700,579

Note

CAPITAL AND RESERVES
Share capital
Reserves

18

Non-current liabilities
Bonds payables
Lease liabilities
Deferred tax liabilities

15
19

Note: The Group has initially applied HKFRS 16 at 1 January 2019 using the modified retrospective approach.
Under this approach, comparative information is not restated. See note 2.

-6-

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWSFOR THE SIX MONTHS ENDED 30 JUNE 2019

Note

Six months ended 30 June
2019
2018
RMB’000
RMB’000(Unaudited)(Unaudited)(Note)Cash flows from operating activities
Profit before taxation
Adjustments for non-cash items

4,764,588
1,491,101

7,975,344
1,057,219

Operating profit before working capital changes
Net changes in working capital

6,255,689
280,419

9,032,563(1,936,818)

Cash generated from operations
Income taxes paid

6,536,108(1,381,940)

7,095,745(1,419,331)

Net cash generated from operating activities

5,154,168

5,676,414(2,165,560)(2,311,344)(95,895)(1,265,277)(1,830,298)(2,140,824)(44,089)–

70,469–(8,338)(1,600,000)–
98,114

1,048
18,45934,010(880,000)(51,077)
68,447(7,277,831)(4,824,324)

Cash flows from investing activities
Purchase of property, plant and equipment
Additions of intangible assets
Additions of land lease prepayments
Settlement of payables for acquisition of subsidiaries
Proceeds from disposal of property, plant andequipment
Proceeds from disposal of intangible assets
Change in pledged bank deposits
Additional capital injection in a joint venture
Additional capital injection in an associateInterest received
Net cash used in investing activities

-7-

10

10
12
11

Note

Cash flows from financing activities
Dividends paid to non-controlling interests
Proceeds from issuance of shares upon exercise ofshare options
Proceeds from issuance of bonds, net of transaction
costs
Payment of lease liabilities
Interest paid

Six months ended 30 June
2019
2018
RMB’000
RMB’000(Unaudited)(Unaudited)(Note)(15,694)–18

443,276

22,50715–(6,366)(57,896)

1,927,161–(49,413)363,320

1,900,255

Net (decrease)/increase in cash and cash
equivalents
Cash and cash equivalents at the beginning of the period
Effect of foreign exchange rate changes(1,760,343)
15,737,196
19,3272,752,345
13,414,638
4,442

Cash and cash equivalents at the end of the period,
represented by bank balances and cash

13,996,180

16,171,425

Net cash generated from financing activities

Note: The Group has initially applied HKFRS 16 at 1 January 2019 using the modified retrospective approach.
Under this approach, comparative information is not restated. See note 2.

-8-

NOTES
1.

BASIS OF PREPARATION
The interim financial report (the “Interim Financial Report”) has been prepared in accordance with theapplicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange
of Hong Kong Limited (the “SEHK”), including compliance with Hong Kong Accounting Standard(“HKAS”) 34 “Interim Financial Reporting” (“HKAS 34”) issued by the Hong Kong Institute of Certified
Public Accountants (“HKICPA”). It was authorised for issue on 21 August 2019.
The Interim Financial Report is presented in thousands of Renminbi (“RMB’000”), unless otherwise stated.
The accounting policies and methods of computation used in the preparation of the Interim Financial Report
are consistent with those used in the annual financial statements for the year ended 31 December 2018
except for the adoption of the new and amended Hong Kong Financial Reporting Standards (“HKFRSs”)
as disclosed in note 2.
The Interim Financial Report does not include all the information and disclosures required in the annual
financial statements, and should be read in conjunction with the Company and its subsidiaries’ (together
referred to as the “Group”) annual financial statements for the year ended 31 December 2018.

2.

ADOPTION OF NEW AND AMENDED HKFRSs AND CHANGES IN ACCOUNTING POLICIES(i)

New and amended HKFRSs adopted as at 1 January 2019
The HKICPA has issued a number of new HKFRSs and amendments to HKFRSs that are first
effective for the current accounting period of the Group. Of these, HKFRS 16 “Leases” (“HKFRS16”) is relevant to the Group’s financial statements.
Except for HKFRS 16, none of the developments have had a material effect on how the Group’s
results and financial position for the current or prior periods have been prepared or presented inthis Interim Financial Report. The Group has not applied any new standard or interpretation that is
not yet effective for the current accounting period.
HKFRS 16HKFRS 16 replaces HKAS 17 “Leases” (“HKAS 17”) along with three Interpretations (HK(IFRIC)Int 4 “Determining whether an Arrangement contains a Lease” (“HK(IFRIC)-Int 4”), HK(SIC)
Int-15 “Operating Leases-Incentives” and HK(SIC) Int-27 “Evaluating the Substance of Transactions
Involving the Legal Form of a Lease”). HKFRS 16 has been applied using the modified retrospective
approach, with the cumulative effect of adopting HKFRS 16 being recognised in equity as an
adjustment to the opening balance of accumulated profits for the current period. Prior periods havenot been restated.
For contracts in place at the date of initial application, the Group has elected to apply the definitionof a lease from HKAS 17 and HK(IFRIC)-Int 4 and has not applied HKFRS 16 to arrangementsthat were previously not identified as lease under HKAS 17 and HK(IFRIC)-Int 4. The Group has
already recognised the land lease payments where the Group is a lessee. The application of HKFRS
16 does not have impact on these assets except for the whole balance is now presented as “Landlease prepayments” under non-current assets.
-9-

The Group has elected not to include initial direct costs in the measurement of the right-of-use asset
for operating leases in existence at the date of initial application of HKFRS 16, being 1 January
2019. At this date, the Group has also elected to measure the right-of-use assets at an amount equal
to the lease liability adjusted for any prepaid or accrued lease payments that existed at the date oftransition.
Instead of performing an impairment review on the right-of-use assets at the date of initial application,
the Group has relied on its historic assessment as to whether leases were onerous immediately before
the date of initial application of HKFRS 16.
On transition, for leases previously accounted for as operating leases with a remaining lease term ofless than 12 months and for leases of low-value assets, the Group has applied the optional exemptions
to not recognise right-of-use assets but to account for the lease expense on a straight-line basis over
the remaining lease term.
On transition to HKFRS 16, the weighted average of the incremental borrowing rate applied to leaseliabilities recognised under HKFRS 16 was 4.75%.
The following table reconciles the operating lease commitments as at 31 December 2018 to the
opening balance for lease liabilities recognised as at 1 January 2019:
RMB’000
Operating lease commitments at 31 December 2018 (note 20)
Less: commitments relating to leases exempt from capitalisation:– short-term leases with remaining lease term ending on or before 31
December 201976,634(7,358)Less: discounted using the incremental borrowing rate at 1 January 201969,276(5,217)

Total lease liabilities recognised at 1 January 2019

64,059- 10 -

The remaining contractual maturities of the Group’s lease liabilities at the date of transition to
HKFRS 16 are as follows:
As at 1 January 2019
Present value ofthe minimum Total minimum
lease payments lease payments
RMB’000
RMB’000
Within 1 year

17,623

20,371After 1 year but within 2 years
After 2 years but within 5 years

23,331
23,10525,03323,872

46,436

48,90564,05969,276(5,217)64,059The following table summarises the impacts of transition to HKFRS 16 on the Group’s consolidated
statement of financial position:
Carrying
amount as at
31 December 2018
RMB’000

Capitalisationof operatinglease contracts
RMB’000

Carrying
amount as at
1 January 2019
RMB’000

Property, plant and equipment
Land lease prepayments (non-current)
Total non-current assets

23,422,617
3,268,035
48,675,500

68,721
66,538135,259

23,491,338
3,334,573
48,810,759

Land lease prepayments (current)
Trade and other receivables
Total current assets

66,53822,864,974
42,785,480(66,538)(4,662)(71,200)–
22,860,312
42,714,280

Lease liabilities (current)
Total current liabilities–
43,760,401

17,623
17,623

17,623
43,778,024

Net current liabilities(974,921)(88,823)(1,063,744)

Total assets less current liabilities

47,700,579

46,43647,747,015

Lease liabilities (non-current)
Total non-current liabilities–
2,325,861

46,43646,43646,4362,372,297

Net assets

45,374,718–

45,374,718

Line items in the consolidated statement offinancial position impacted by the adoption of
HKFRS 16:

- 11 -

(ii)Issued but not yet effective HKFRSs
In the current period, the HKICPA has issued a number of new and amended HKFRSs but not yet
effective and which have not been adopted in this Interim Financial Report. Theses development
include the following which may be relevant to the Group.
Amendments to HKFRS 3
Amendments to HKAS 1 and HKAS 8
Amendments to HKFRS 10 and HKAS 28
1
2
3

Definition of a business3
Definition of material1
Sale or contribution of assets between an
investor and its associate or joint venture2

Effective for annual periods beginning on or after 1 January 2020
Effective date not yet determined
Effective for business combinations and asset acquisitions for which the acquisition date ison or after the beginning of the first annual period on or after 1 January 2020

The Group is in the process of making an assessment of what the impact of these developments is
expected to be in the period of initial application. So far it has concluded that the adoption of themis unlikely to have a significant impact on the Group’s consolidated financial statements.
(iii)

Significant accounting policies
The Interim Financial Report has been prepared in accordance with the accounting policies adopted
in the Group’s most recent annual financial statements for the year ended 31 December 2018, except
for the effects of applying HKFRS 16.
As described in note 2(i), the Group has applied HKFRS 16 using the modified retrospective approachand therefore comparative information has not been restated. This means comparative informationis still reported under HKAS 17 and HK(IFRIC)-Int 4.
Accounting policy applicable from 1 January 2019
The Group as a lessee
For any new contracts entered into on or after 1 January 2019, the Group considers whether acontract is, or contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys
the right to use an identified asset (the underlying asset) for a period of time in exchange forconsideration’. To apply this definition, the Group assesses whether the contract meets three key
evaluations which are whether:•

the contract contains an identified asset, which is either explicitly identified in the contract or
implicitly specified by being identified at the time the asset is made available to the Group;•

the Group has the right to obtain substantially all of the economic benefits from use of theidentified asset throughout the period of use, considering its rights within the defined scopeof the contract; and•the Group has the right to direct the use of the identified asset throughout the period of use.
The Group assesses whether it has the right to direct ‘how and for what purpose’ the asset isused throughout the period of use.

For contracts that contain a lease component and one or more additional lease or non-lease components,
the Group allocates the consideration in the contract to each lease and non-lease component on
the basis of their relative stand-alone prices. However, for leases of office and factory premises
in which the Group is a lessee, the Group elected not to separate non-lease components and will
instead account for the lease and non-lease components as a single lease component.
- 12 -

Measurement and recognition of leases as a lessee
At the lease commencement date, the Group recognises a right-of-use asset and a lease liabilityon the condensed consolidated statement of financial position. The right-of-use asset is measured
at cost, which is made up of the initial measurement of the lease liability, any initial direct costs
incurred by the Group, an estimate of any costs to dismantle and remove the underlying asset atthe end of the lease, and any lease payments made in advance of the lease commencement date (netof any lease incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement
date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term
unless the Group is reasonably certain to obtain ownership at the end of the lease term. The Groupalso assesses the right-of-use asset for impairment when such indicator exists.
At the lease commencement date, the Group measures the lease liability at the present value of thelease payments unpaid at that date, discounted using the interest rate implicit in the lease or, if thatrate cannot be readily determined, the Group’s incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments(including in-substance fixed payments) less any lease incentives receivable, variable payments
based on an index or rate, and amounts expected to be payable under a residual value guarantee.
The lease payments also include the exercise price of a purchase option reasonably certain to be
exercised by the Group and payment of penalties for terminating a lease, if the lease term reflects
the Group exercising the option to terminate.
Subsequent to initial measurement, the liability will be reduced for lease payments made andincreased for interest cost on the lease liability. It is remeasured to reflect any reassessment or leasemodification, or if there are changes in in-substance fixed payments.
When the lease is remeasured, the corresponding adjustment is reflected in the right-of-use asset,
or profit and loss if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using thepractical expedients. Instead of recognising a right-of-use asset and lease liability, the payments inrelation to these leases are recognised as an expense in profit or loss on a straight-line basis overthe lease term. Short-term leases are leases with a lease term of twelve months or less. Low-value
assets comprise small items of office equipment.
On the condensed consolidated statement of financial position, right-of-use assets have been included
in property, plant and equipment, the same line as it presents the underlying assets of the same
nature that it owns. The prepaid lease payments for leasehold land are presented as “Land lease
prepayments”.
The Group as a lessor
As a lessor, the Group classifies its leases as either operating or finance leases.
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental
to ownership of the underlying asset, and classified as an operating lease if it does not.
The Group also earns rental income from operating leases of certain portion of its leasehold landand building and plant and machinery. Rental income is recognised on a straight-line basis over
the term of lease.
- 13 -

3.

REVENUE AND SEGMENT INFORMATION
Revenue
Revenue from sales of automobiles and automobile parts and components and licensing of intellectual
properties, net of value-added taxes (“VAT”) or related sales taxes and net of discounts, was generally
recognised at a point in time when the customers obtain possession of and control of the promised goods or
the right to use of the intellectual properties in the contract. Revenue was mainly derived from customers
located in the PRC.
Six months ended 30 June
2019
2018
RMB’000
RMB’000(Unaudited)(Unaudited)
Revenue from contracts with customers within
the scope of HKFRS 15
Disaggregated by major products– Sales of automobiles– Sales of automobile parts and components– Licensing of intellectual properties

44,979,288
2,151,102
428,227

52,809,518
899,087–

47,558,617

53,708,605

Segment information
The only operating segment of the Group is the production and sale of automobiles, automobile parts andrelated automobile components and licensing of its intellectual properties. The directors consider that theGroup operates in a single business segment. No separate analysis of the reportable segment results by
operating segment is necessary.
4.

OTHER INCOME
Six months ended 30 June
2019
2018
RMB’000
RMB’000(Unaudited)(Unaudited)
Government grants and subsidies (note)
Gain on disposal of scrap materials
Rental income
Sundry income

499,603
17,01012,20983,794

691,971
11,32814,28051,009612,616

768,588

Note: Government grants and subsidies mainly related to cash subsidies in respect of operating and researchand development activities from government which are either unconditional grants or grants withconditions having been satisfied.

- 14 -

5.

PROFIT BEFORE TAXATION
Profit before taxation has been arrived at after charging/(crediting):
Six months ended 30 June
2019
2018
RMB’000
RMB’000(Unaudited)(Unaudited)(Note)(a)Finance income and costs
Finance costs
Effective interest expense on bonds payables
Coupon expense on bonds payables
Interest on lease liabilities
Interest on bank borrowings wholly repayable
within five years

(b)

(c)

1,194
37,331
1,489

1,691
30,683–

19,625

18,68059,63951,054

Finance income
Bank and other interest income(108,285)(68,447)

Net finance income(48,646)(17,393)

2,726,948
200,666
3,350

2,466,241
158,743
8,046

2,930,964

2,633,030

1,116,123
370,958
38,30639,089,518

594,390
223,479
23,40042,871,336

676,518
11,66534,072
1,601
17,155582,051––
115,793
21,546

Staff costs (including directors’ emoluments)
Salaries, wages and other benefits
Retirement benefit scheme contributions
Equity settled share-based payments

Other items
Amortisation of intangible assets (related to capitalised
product development costs)
Research and development costs
Amortisation of land lease prepayments
Cost of inventories
Depreciation– owned assets– right-of-use assets
Impairment loss on trade and other receivables
Net foreign exchange loss
Net loss on disposal of property, plant and equipment

Note: The Group has initially applied HKFRS 16 at 1 January 2019 using the modified retrospective
approach. Under this approach, comparative information is not restated. See note 2.
- 15 -6.

TAXATION
Six months ended 30 June
2019
2018
RMB’000
RMB’000(Unaudited)(Unaudited)
Current tax:
– PRC enterprise income tax– Over-provision in prior years

888,100(11,038)

1,392,143(2,054)

Deferred tax

877,062(159,522)

1,390,089(150,643)

717,540

1,239,446

Hong Kong profits tax has not been provided as the Hong Kong incorporated companies within the Group
had no estimated assessable profits in Hong Kong for the six months ended 30 June 2019 and 2018.
The income tax provision of the Group in respect of its operations in the PRC has been calculated at theapplicable tax rate on the estimated assessable profits for the period based on the existing legislation,interpretations and practises in respect thereof. The PRC enterprise income tax rate is 25% (six months
ended 30 June 2018: 25%).
Pursuant to the relevant laws and regulations in the PRC, certain PRC subsidiaries of the Group obtained
the High and New Technology Enterprises qualification. Accordingly, they enjoyed a preferential income
tax rate of 15% for the six months ended 30 June 2019 (six months ended 30 June 2018: 15%).
The share of results of associates and joint ventures in the condensed consolidated income statement isafter income taxes accrued in the appropriate income tax jurisdictions.
Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.
7.

DIVIDENDS
During the current period, a final dividend for the year ended 31 December 2018 of HK$0.35 (six months
ended 30 June 2018: HK$0.29) per ordinary share, amounting to approximately RMB2,805,760,000 (sixmonths ended 30 June 2018: RMB2,160,828,000), has been declared and approved by the shareholders
at the annual general meeting of the Company. The 2018 final dividend was paid in July 2019 and isreflected as dividends payable in the Interim Financial Report.

- 16 -

8.

EARNINGS PER SHARE(a)

Basic earnings per share
The calculation of the basic earnings per share for the period is based on the profit attributable to equity
holders of the Company of RMB4,009,475,000 (six months ended 30 June 2018: RMB6,670,023,000)
and the weighted average number of ordinary shares of 9,033,162,673 shares (six months ended 30
June 2018: 8,974,042,761 shares), calculated as follows:
Weighted average number of ordinary shares
Six months ended 30 June
2019
2018
(Unaudited)(Unaudited)(b)Issued ordinary shares at 1 January
Effect of shares options exercised

8,981,612,540
51,550,133

8,970,514,540
3,528,221

Weighted average number of ordinary shares at 30 June

9,033,162,673

8,974,042,761

Diluted earnings per share
The calculation of diluted earnings per share for the period is based on the profit attributable to equity
holders of the Company of RMB4,009,475,000 (six months ended 30 June 2018: RMB6,670,023,000)
and the weighted average number of ordinary shares of 9,128,450,173 shares (six months ended 30
June 2018: 9,181,127,007 shares), calculated as follows:
Weighted average number of ordinary shares (diluted)
Six months ended 30 June
2019
2018
(Unaudited)(Unaudited)
Weighted average number of ordinary shares (basic)
at 30 June
Effect of deemed issue of shares under the Company’s
share options scheme
Weighted average number of ordinary shares (diluted)
at 30 June

- 17 -

9,033,162,673

8,974,042,761

95,287,500

207,084,246

9,128,450,173

9,181,127,007

9.

PROPERTY, PLANT AND EQUIPMENT
During the period, the Group acquired property, plant and equipment of approximately RMB432,624,000(six months ended 30 June 2018: RMB3,109,697,000). Property, plant and equipment with net book valueof approximately RMB87,624,000 (six months ended 30 June 2018: RMB22,594,000) were disposed ofduring the period, resulting in a net loss on disposal of approximately RMB17,155,000 (six months ended
30 June 2018: RMB21,546,000).
The Group has obtained the right to use office and factory premises through the tenancy agreement. The
leases typically run on an initial period of two to ten years. The Group makes fixed payments during thecontract period.
As at 30 June 2019, the carrying amount of the Group’s right-of-use assets in relation to the office andfactory premises are RMB57,056,000 (as at 1 January 2019: RMB68,721,000).

10.

INTANGIBLE ASSETS
During the period, additions to intangible assets by acquisition and capitalisation in respect of development
costs amounted to approximately RMB2,311,344,000 (six months ended 30 June 2018: RMB2,140,824,000).
No intangible asset (six months ended 30 June 2018: net book value of approximately RMB18,459,000)
was disposed during the period.

11.

INTERESTS IN ASSOCIATES

Share of net assets
Goodwill
Impairment loss recognised

As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

449,787663(4,012)

408,018663(4,012)446,438

404,669

During the six months ended 30 June 2018, Closed Joint Stock Company BELGEE (“BELGEE”) effected anincrease in registered capital whereby the Group and other investors injected additional capital to BELGEE
amounting to Belarusian ruble (“BYN”) 15,350,000 (equivalent to approximately RMB51,077,000) and
BYN18,018,000 (equivalent to approximately RMB60,405,000), respectively. Upon the completion of
the capital increase, the registered capital of BELGEE was changed from BYN97,565,000 (equivalent toapproximately RMB394,249,000) to BYN130,933,000 (equivalent to approximately RMB505,731,000).

- 18 -

12.

INTERESTS IN JOINT VENTURES
As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

Share of net assets

7,824,535

5,917,618

Represented by:
Cost of unlisted investments
Unrealised gain on disposal of a subsidiary to a joint venture
Share of post-acquisition results and other comprehensive income

7,047,522(14,943)
791,956

5,447,522(14,943)
485,039

7,824,535

5,917,618

Details of the Group’s joint ventures as at 30 June 2019 and 31 December 2018 are as follows:

Name of joint venture

Form ofPlace ofestablishments businessand operations structure

Particulars of registeredcapitalProportion of ownershipinterest held by the Group
As at
As at
30 June 31 December
2018
2019

Principal activities

Genius Auto Finance Company Limited#(“Genius AFC”)
吉致汽車金融有限公司

PRC

Incorporated RMB4,000,000,000(as at 31 December 2018:
RMB2,000,000,000)

80%

80%

Vehicles financing
business

LYNK & CO Investment Co., Ltd.#(“LYNK & CO Investment”)
領克投資有限公司

PRC

Incorporated RMB7,500,000,000

50%

50%

Manufacturing andsales of vehicles
under the“Lynk&Co” brand

Incorporated US$117,000,000

40%

40%

Manufacturing and saleof front-wheel drive
6-speed automatictransmissions andrelated parts andcomponents

Zhejiang Geely AISIN Automatic Transmission PRC
Company Limited#^ (“Zhejiang AISIN”)
浙江吉利愛信自動變速器有限公司#

The English translation of the names of the companies established in the PRC is for reference only.
The official names of these companies are in Chinese.

^On 24 April 2018, the Group entered into a joint venture agreement with AISIN AW Co., Ltd. (“AISINAW”), an independent third party and a subsidiary of AISIN SEIKI Company Limited, pursuant towhich the parties agreed to establish a joint venture company, Zhejiang AISIN. Pursuant to the joint
venture agreement, the Group and AISIN AW will contribute to the capital of Zhejiang AISIN bycash as to 40% (equivalent to approximately US$46,800,000) and 60% (equivalent to approximately
US$70,200,000), respectively. As at 30 June 2019, the Group contributed US$14,000,000 (equivalent
to approximately RMB97,522,000) to Zhejiang AISIN.
- 19 -

During the six months ended 30 June 2019, the registered capital of Genius AFC had been increased by
RMB2,000,000,000 from RMB2,000,000,000 as at 31 December 2018 to RMB4,000,000,000 as at 30 June2019 whereby the Company and the joint venture partner injected additional capital in proportional to their
existing shareholding to Genius AFC amounted to RMB1,600,000,000 and RMB400,000,000, respectively.
During the six months ended 30 June 2018, the registered capital of Genius AFC had been increased by
RMB1,100,000,000 from RMB900,000,000 as at 31 December 2017 to RMB2,000,000,000 as at 30 June2018 whereby the Company and the joint venture partner injected additional capital in proportional to their
existing shareholding to Genius AFC amounted to RMB880,000,000 and RMB220,000,000, respectively.
Summarised financial information of the Genius AFC, LYNK & CO Investment and its subsidiaries(“LYNK & CO Group”) and Zhejiang AISIN, adjusted for any differences in accounting policies, anda reconciliation to the carrying amount in the condensed consolidated statement of financial position, aredisclosed below:
LYNK & CO Group
As at
As at
30 June31 December
2019
2018
RMB’000
RMB’000(Unaudited)(Audited)

Genius AFC
As at
As at
30 June31 December
2019
2018
RMB’000
RMB’000(Unaudited)(Audited)

Non-current assets
Current assets
Current liabilities
Non-current liabilities

9,474,440
7,532,036(7,492,782)(1,150,253)

7,011,983
7,802,938(6,345,875)(371,789)

600,309
25,490,252(17,884,039)(3,737,607)

614,708
21,237,842(15,134,857)(4,481,478)

Net assets

8,363,441

8,097,257

4,468,915

2,236,215

830,839

774,368

2,259,525

2,225,622––(15,785,265)(13,160,936)––(3,737,607)(4,481,478)

The above amounts of assets andliabilities include the following:
Cash and cash equivalents
Current financial liabilities(excluding trade and otherpayables and provisions)Non-current financial liabilities(excluding trade and otherpayables and provisions)- 20 -

Zhejiang AISIN
As at
As at
30 June31 December
2019
2018
RMB’000
RMB’000(Unaudited)(Audited)
Non-current assets
Current assets
Current liabilities
Non-current liabilities

106,935
132,160(32,532)–322
241,626(4,547)–

Net assets

206,563

237,401

123,328

240,872

–

–

–

–

The above amounts of assets and liabilities include the following:
Cash and cash equivalents
Current financial liabilities (excluding trade and other payables andprovisions)Non-current financial liabilities (excluding trade and other payables
and provisions)

Zhejiang
LYNK & CO Group
Genius AFC
AISIN
Six months ended 30 June
2019
2018
2019
2018
2019
RMB’000
RMB’000
RMB’000
RMB’000
RMB’000(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenue
Profit/(loss) for the period
Other comprehensive income
for the period
Total comprehensive income/(expense) for the period
Dividend received from thejoint ventures
The above profits/(losses)
for the period including thefollowing:
Depreciation and amortisation
Interest income
Interest expense
Income tax expense

7,609,439
266,184

7,358,921
341,863

1,002,965
232,700

571,607
90,751–(30,838)

–

–

–

–

–

266,184

341,863

232,700

90,751(30,838)

–

–

–

–

–

(455,804)
5,253
(31)
(95,815)(274,160)
3,452
(15)
(109,692)(6,248)
978,305(470,764)(77,567)(3,864)563,353(240,237)(30,250)

93
463
–
–

- 21 -

Reconciliation of the above summarised financial information to the carrying amount of the Group’s
interests in joint ventures recognised in the condensed consolidated statement of financial position is asfollows:
LYNK & CO Group
As at
As at
30 June 2019 31 December 2018
RMB’000
RMB’000(Unaudited)(Audited)
Net assets of the joint venture
The Group’s effective interests in the joint
ventureThe Group’s share of the net assets of thejoint venture
Unrealised gain on disposal of a subsidiary toa joint venture
Carrying amount of the Group’s interests injoint venture

Genius AFC
As at
As at
30 June 2019 31 December 2018
RMB’000
RMB’000(Unaudited)(Audited)

8,363,441

8,097,257

4,468,915

2,236,215

50%

50%

80%

80%

4,181,721

4,048,629

3,575,132

1,788,972(14,943)(14,943)––

4,166,778

4,033,686

3,575,132

1,788,972

Zhejiang AISIN
As at
As at
30 June31 December
2019
2018
RMB’000
RMB’000(Unaudited)(Audited)

13.

Net assets of the joint venture
The Group’s effective interests in the joint venture

206,56340%

237,401
40%

Carrying amount of the Group’s interests in joint venture

82,625

94,960As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

2,280,486
256,004
1,011,509

1,890,315
328,753
1,878,312

3,547,999

4,097,380

INVENTORIES

Raw materials
Work in progress
Finished goods- 22 -

14.

TRADE AND OTHER RECEIVABLES

Note

Trade and notes receivables
Trade receivables, net of loss allowance– Third parties– Joint ventures– Associates– Related companies controlled by the substantial
shareholder of the Company(a)(b)

Notes receivables

Deposits, prepayment and other receivables
Prepayment to suppliers– Third parties– Related companies controlled by the substantial
shareholder of the Company

Deposits paid for acquisition of property, plant andequipment
VAT and other taxes receivables
Utility deposits and other receivables

Amounts due from related companies controlled by thesubstantial shareholder of the Company

Representing:– Current– Non-current- 23 -(c)

As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

473,358
77,375414,862

338,158
145,183
269,538

797,677

330,812

1,763,272
16,013,097

1,083,691
16,988,253

17,776,369

18,071,944

380,086

151,444

7,918

1,974

388,004

153,418

408,596
2,573,530
981,002609,953
3,592,041
414,586

4,351,132

4,769,998

11,54523,032

4,362,677

4,793,030

22,139,046

22,864,974

21,876,385
262,661

22,864,974–

22,139,046

22,864,974

(a)Trade receivables
The Group allows average credit periods ranged from 30 days to 90 days to its PRC customers. The
following is an ageing analysis of the trade receivables of the PRC customers, based on invoicedate and net of loss allowance, at the reporting date:0 – 60 days
61 – 90 days
Over 90 days

As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

1,211,643
17,84744,290478,099
26,91980,9981,273,780

586,016

For overseas customers, the Group allows credit periods ranged from 30 days to 720 days. The
following is an ageing analysis of the trade receivables of the overseas customers, based on invoicedate and net of loss allowance, at the reporting date:0 – 60 days
61 – 90 days
91 – 365 days
Over 365 days

(b)

As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

207,898
111,043
138,909
31,642285,290
10,233
148,989
53,163

489,492

497,675

Notes receivables
All notes receivables are denominated in RMB. As at 30 June 2019 and 31 December 2018, allnotes receivables were guaranteed by established banks in the PRC and have maturities of less thansix months from the reporting date.

(c)Amounts due from related companies
The amounts due are unsecured, interest-free and repayable on demand.

- 24 -

15.

BONDS PAYABLES
On 18 January 2018, the Company issued bonds with an aggregate principal amount of United States
dollars (“US$”) 300,000,000 (equivalent to approximately RMB1,944,690,000) (the “Bonds”). The Bonds
carried interest at 3.625% per annum, payable semi-annually in arrears on 25 January and 25 July of eachyear, and the maturity date was 25 January 2023.
The Bonds were listed on Singapore Exchange Securities Trading Limited. They constitute direct,
unconditional, unsubordinated and (subject to the terms and conditions of the Bonds) unsecured obligationsof the Company and shall at all times rank pari passu and without any preference among themselves. The
payment obligations of the Company under the Bonds shall, save for such exceptions as may be provided
by applicable law and subject to the terms and conditions of the Bonds, at all times rank pari passu withall its other present and future unsecured and unsubordinated obligations.
The carrying amount of the Bonds at initial recognition net of transaction costs amounted to US$297,296,000(equivalent to approximately RMB1,927,161,000) and the effective interest rate was 3.825% per annum.
The Bonds were carried at amortised cost.
The movements of the Bonds for the period/year are set out below:
As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

Carrying amountAt the beginning of the period/year
Initial fair value on the date of issuance
Exchange differences
Interest expenses

2,047,822–(2,707)1,194–
1,927,161
112,037
8,624

At the end of the period/year

2,046,309

2,047,822- 25 -

16.

TRADE AND OTHER PAYABLES

Note

Trade and notes payables
Trade payables– Third parties– Associates– Related companies controlled by the substantial
shareholder of the Company(a)(b)

Notes payables

Other payables
Receipts in advance from customers– Third parties– Related companies controlled by the substantial
shareholder of the Company- 26 -As at
31 December
2018
RMB’000(Audited)

24,375,710
1,108,796

23,562,370
726,074

912,660

916,316

26,397,166
1,436,914

25,204,760
2,076,400

27,834,080

27,281,160

1,709,751

1,885,021

1,158

5,751

1,710,909

1,890,772

1,713,530
1,559,507–
587,259
137,5022,810,195
3,776,742

3,190,186
2,017,144
1,265,277
1,224,556
167,710–2,427,879

12,295,644

12,183,524

183
223,922

1,752,809
220,543

12,519,749

14,156,876

40,353,829

41,438,036(c)Deferred government grants which conditions have notbeen satisfied
Payables for acquisition of property, plant and equipment
Payables for acquisition of subsidiaries
Accrued staff salaries and benefits
VAT and other taxes payables
Dividends payable
Other accrued charges

Amounts due to related companies controlled by thesubstantial shareholder of the Company
Amount due to ultimate holding company

As at
30 June2019
RMB’000(Unaudited)

(d)
(d)

(a)

Trade payables
The following is an ageing analysis of trade payables, based on invoice date, at the reporting date:0 – 60 days
61 – 90 days
Over 90 days

As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

22,016,466
1,673,374
2,707,326

20,013,747
2,586,200
2,604,813

26,397,166

25,204,760

Trade payables do not carry interest. The average credit period on purchase of goods is 60 days.
(b)

Notes payables
All notes payables are denominated in RMB and are notes paid and/or payable to third parties forsettlement of trade payables. As at 30 June 2019 and 31 December 2018, all notes payables havematurities of less than six months from the reporting date.
As at 30 June 2019, the Group has no pledged bank deposits (as at 31 December 2018: RMB19,392,000)
to secure the notes payables.

(c)Receipts in advance from customers
The amounts represent the advance payments from customers for goods, which revenue will berecognised when the performance obligation was satisfied through the goods were transferred tothe customers.
Six months ended 30 June
2019
2018
RMB’000
RMB’000(Unaudited)(Unaudited)
Revenue recognised during the period that was included in
the receipts in advance from customers at the beginning of
the period(1,890,772)(7,984,472)

The Group’s contracts with customers are for period of one year or less. The entire receipts inadvance from customers balance at the period end would be recognised into revenue in the next
period. As permitted under HKFRS 15, the transaction price allocated to these unsatisfied contracts
which have an original expected duration of one year or less is not disclosed.

- 27 -(d)Amounts due to related companies/ultimate holding company
The amounts due are unsecured, interest-free and repayable on demand.

All of the trade and other payables are expected to be settled or recognised as income within one year or
are repayable on demand.
17.

BANK BORROWINGSBank loans, unsecured

As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

1,373,120

1,375,280

As at 30 June 2019 and 31 December 2018, the Group’s bank borrowings were carried at amortised cost,
repayable in October 2019 and interest-bearing at the London Interbank Offered Rates plus 1.05% perannum. Pursuant to the facility agreement, it will be an event of default if Mr. Li Shu Fu is (i) no longer
the single largest beneficial shareholder of the Company, or (ii) no longer beneficially owns at least 25%of the issued share capital of the Company. In case of an event of default, the bank may by notice to theCompany (a) cancel the loan facility, (b) declare that all or part of the loan, together with accrued interest,
be immediately due and payable, and/or (c) declare that all or part of the loans be payable on demand.
18.

SHARE CAPITAL
Number ofsharesNominal value
RMB’000

Authorised:
Ordinary shares of HK$0.02 eachAt 31 December 2018 and 30 June 2019 (unaudited)

12,000,000,000

246,720

Issued and fully paid:
Ordinary shares of HK$0.02 each
At 1 January 2018
Shares issued under share option scheme

8,970,514,540
11,098,000

164,286
184

At 31 December 2018 and 1 January 2019
Shares issued under share option scheme (note)

8,981,612,540
129,911,000

164,470
2,286

At 30 June 2019 (unaudited)

9,111,523,540

166,756

Note:
During the six months ended 30 June 2019, share options were exercised to subscribe for 129,911,000
ordinary shares (six months ended 30 June 2018: 7,031,000 ordinary shares) of the Company at aconsideration of approximately RMB443,276,000 (six months ended 30 June 2018: RMB22,507,000) of
which approximately RMB2,286,000 (six months ended 30 June 2018: RMB116,000) was credited toshare capital and approximately RMB440,990,000 (six months ended 30 June 2018: RMB22,391,000) was
credited to the share premium account. As a result of the exercise of share options, share option reserveof RMB181,565,000 (six months ended 30 June 2018: RMB9,893,000) has been transferred to the sharepremium account.
- 28 -

19.

LEASE LIABILITIESThe remaining contractual maturities of the Group’s lease liabilities at the end of the reporting period
are as follows:
As at 30 June 2019
As at 1 January 2019
Present
Present
value of the
Totalvalue of the
Totalminimum
minimum
minimum
minimumlease payments lease payments lease payments lease payments
RMB’000
RMB’000
RMB’000
RMB’000(Unaudited)(Unaudited)(Unaudited)(Unaudited)

Within 1 year

22,78425,033

17,623

20,371After 1 year but within 2 years
After 2 years but within 5 years

22,958
11,951

24,102
12,28623,331
23,10525,03323,872

34,90936,38846,436

48,90557,693

61,42164,05969,276(3,728)(5,217)

57,69364,059During the six months ended 30 June 2019, the total cash outflows for the leases are RMB7,855,000.
20.

COMMITMENTS
Capital commitments
At the reporting date, the Group had the following capital commitments:

Contracted but not provided for– purchase of property, plant and equipment– investments in joint ventures (notes 12 and (c))– investment in an associate (note (a))– acquisition of a subsidiary (note (b))- 29 -

As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

3,394,271
870,558
490,000
322,206

4,070,570
225,546
490,000–

5,077,035

4,786,116

Note:(a)

On 20 December 2018, Zhejiang Jirun Automobile Company Limited# 浙江吉潤汽車有限公司(“Jirun Automobile”), an indirect 99% owned subsidiary of the Company, entered into an investment
agreement (the “Investment Agreement 1”) with Contemporary Amperex Technology Company
Limited# 寧德時代新能源科技股份有限公司 (“CATL Battery”), an independent third party,
pursuant to which the parties agreed to establish an associate company (the “Associate Company”)
to principally engage in the research and development, manufacture and sale of battery cells, battery
modules and battery packs. Pursuant to the terms of the Investment Agreement 1, the AssociateCompany will be owned as to 49% by Jirun Automobile and as to 51% by CATL Battery. The
registered capital of the Associate Company will be RMB1,000,000,000, and will be contributed as
to 49% (equivalent to RMB490,000,000) in cash by Jirun Automobile and as to 51% (equivalent to
RMB510,000,000) in cash by CATL Battery. As at 30 June 2019, the formation of the AssociateCompany was not yet completed. Please refer to the Company’s announcement dated 20 December
2018 for further details.

(b)

On 29 April 2019, Zhejiang Geely Powertrain Company Limited# 浙江吉利動力總成有限公司(“Zhejiang Powertrain”), an indirect 99% owned subsidiary of the Company, and a fellow subsidiaryowned by the Company’s ultimate holding company entered into an acquisition agreement pursuant
to which Zhejiang Powertrain has conditionally agreed to acquire, and the fellow subsidiary has
conditionally agreed to sell the entire equity interests of Yiwu Geely Powertrain Company Limited#
義烏吉利動力總成有限公司 (“Yiwu Powertrain”) for a cash consideration of approximately
RMB322,206,000. Yiwu Powertrain is engaged in the technology research and development,
technology consultancy services, manufacture and sale of vehicle engines and provision of aftersales services in the PRC. As at 30 June 2019, the acquisition of Yiwu Powertrain was not yet
completed. Please refer to the Company’s announcement and circular dated 29 April 2019 and 22
May 2019, respectively, for further details.

(c)

On 12 June 2019, Shanghai Maple Guorun Automobile Company Limited# 上海華普國潤汽車
有限公司 (“Shanghai Maple Guorun”), an indirect 99% owned subsidiary of the Company,
entered into an investment agreement (the “Investment Agreement 2”) with LG Chem Ltd. (“LGChem”), an independent third party, pursuant to which the parties agreed to establish a joint venturecompany (the “JV”) to principally engage in the production and sales of batteries for electricvehicles. Pursuant to the terms of the Investment Agreement 2, the JV will be owned as to 50%
by Shanghai Maple Guorun and as to 50% by LG Chem. The registered capital of the JV will be
US$188,000,000 (equivalent to approximately RMB1,290,732,000), and will be contributed as to50% (US$94,000,000 or equivalent to approximately RMB645,366,000) and 50% (US$94,000,000or equivalent to approximately RMB645,366,000) by Shanghai Maple Guorun and LG Chem,
respectively. As at 30 June 2019, the formation of JV was not yet completed. Please refer to theCompany’s announcement dated 12 June 2019 for further details.

- 30 -

Operating lease commitments – as lessee
At 31 December 2018, the total future minimum lease payments in respect of office and factory premises
under non-cancellable operating leases are payable as follows:
As at
31 December
2018
RMB’000(Audited)
Office and factory premises– Within one year
– In the second to fifth years inclusive

26,56150,073
76,634The Group is the lessee in respect of office and factory premises held under leases which were previouslyclassified as operating leases under HKAS 17. The Group has initially applied HKFRS 16 using the modified
retrospective approach. Under this approach, the Group adjusted the opening balances at 1 January 2019
to recognise lease liabilities relating to these leases (see note 2). From 1 January 2019 onwards, futurelease payments are recognised as lease liabilities in the consolidated statement of financial position inaccordance with the policies set out in note 2(iii), and the details regarding the Group’s future lease
payments are disclosed in note 19.

- 31 -

Operating lease commitments – as lessor
At the reporting date, the total future minimum lease receipts in respect of certain portion of leasehold landand buildings and plant and machinery under non-cancellable operating leases are receivable as follows:

Leasehold land and buildings– Within one year
– In the second to fifth years inclusive– After five years

Plant and machinery– Within one year
– In the second to fifth years inclusive– After five years

As at
30 June2019
RMB’000(Unaudited)

As at
31 December
2018
RMB’000(Audited)

8,098
19,614
11,544

7,021
21,026
13,642

39,256

41,6896,811
16,004
11,0034,001
16,00413,00333,81833,00873,07474,697

Leases are negotiated and rental are fixed for an initial period of five to fourteen years (31 December
2018: five to fourteen years).
#

21.

The English translation of the names of the companies established in the PRC is for reference only.
The official names of these companies are in Chinese.

COMPARATIVE FIGURESThe Group has initially applied HKFRS 16 at 1 January 2019 using the modified retrospective approach.
Under this approach, comparative information is not restated. Further details of the changes in accounting
policies are disclosed in note 2.

- 32 -

MANAGEMENT DISCUSSION AND ANALYSIS
Overall Performance
The Group’s performance in the first half of 2019 was below the management’s expectations. Total
sales volume of passenger vehicles for Chinese indigenous brands recorded a 21.7% year-on-year(“YoY”) decline during the period, compared with a 14.0% YoY drop in the overall passenger vehicle
sales volume in China market during the same period, according to the data of China Association ofAutomobile Manufacturers (“CAAM Data”). The Group’s total sales volume in the China market
decreased 19% YoY to 613,061 units (including the sales volume of “Lynk&Co” vehicles sold by
the Group’s 50%-owned joint venture, namely 領克投資有限公司 (Lynk&Co Investment Co., Ltd. or“Lynk&Co JV”) in the first half of 2019. The Group’s export sales volume, however, grew strongly
at 344% YoY to 38,619 units in the first half of 2019, as a result of the introduction of more updated
products to the export markets. The Group sold a total of 651,680 units of vehicles (including thesales volume of “Lynk&Co” vehicles sold by the Lynk&Co JV) in the first six months of 2019,representing a 15% YoY decline from the same period in 2018. Total revenue (excluding the revenueof the Lynk&Co JV) decreased by 11% to RMB47.56 billion during the period as continued productmix improvement more than offset the pricing pressure caused by weak demand and fierce market
competition. Gross margin ratio in the first half of 2019 was negatively affected by higher discounts
and incentives to reduce dealers’ inventories ahead of the official implementation of China VI (國六)emission standards in some areas in China in July 2019. Further, the selling and distribution expenses
during the same period had to be kept at relatively high levels to maintain the competitiveness of theGroup’s products in a weak market. The 53% increase in administrative expenses during the period
was primarily attributable to the increase in amortization and depreciation expenses as a result of thesubstantial investment in research and development over the past years. As a result, profit attributable tothe equity holders of the Company for the first half of 2019 was down 40% YoY to RMB4.01 billion.
Diluted earnings per share (EPS) was down 40% to RMB43.92 cents.

- 33 -

Financial Resources
Despite the lower revenues and operating profits in the first half of 2019, the Group’s financial position
remained healthy at the end of June 2019. The Group’s total cash level (bank balances and cash +pledged bank deposits) decreased by 11% from the end of 2018 to RMB14.02 billion at the end ofJune 2019, while its total borrowings (including bank loans and the 5-year US$300 million 3.625%
bonds due 2023 (the “Bonds”)) stayed at RMB3.42 billion, at similar level at the end of 2018. Net
cash on hand (total cash level – total borrowings) was down to RMB10.60 billion, versus a net cash
level of RMB12.33 billion six months ago, but still offering a healthy cushion to protect the Group
from any further weakening in vehicle demand in the China market. In addition, net notes receivables(bank notes receivables – bank notes payables) at the end of June 2019 amounted to RMB14.57 billion,
which could provide the Group with additional cash reserves when needed through discounting thenotes receivables with the banks.
On 2 July 2019, the Company entered into a facility agreement with Citigroup Global Markets Asia
Limited as the coordinator and agent for a syndicate of banks pursuant to which a term loan facility
in the principal amount of up to US$300,000,000 has been extended to the Company for a term of
three years. The main purposes of the loan facility are (i) to refinance the existing indebtedness of theGroup and (ii) for general corporate purposes of the Group.
The Group has been assigned credit ratings from both Standard & Poor’s Ratings Services and Moody’s
Investors Service. Standard & Poor’s corporate credit rating on the Group is currently “BBB-/Stable”.
On 5 June 2019, Moody’s Investors Service upgraded the Group’s credit rating from “Ba1” with positive
outlook to “Baa3” issuer rating with stable outlook.
Research and Development
During the first six months ended 30 June 2019, the Group recognized a total expense of RMB1,487.1
million (2018: RMB817.9 million) in relation to its research and development activities and such
expense was included in “Administrative expenses” in the condensed consolidated income statement.
Further details were illustrated in the table below:
2019
RMB(’000)
Amortisation of intangible assets(i.e. capitalized product development costs)

2018
RMB(’000) YoY change (%)

1,116,123

594,390

88

Research and development costs(i.e. not qualified for capitalization)

370,958

223,479

66

Total research and development costs
charged to profit or loss

1,487,081

817,86982- 34 -

As most of the ongoing research and development projects are for new technologies not yet used inexisting products, a large proportion of the relevant expenditures were capitalized, and only amortised
to expenses after the products using the technologies are offered to the market.
Vehicle Manufacturing
The Group sold a total of 651,680 units of vehicles (including the sales volume of “Lynk&Co”
vehicles sold by the Lynk&Co JV) in the first half of 2019, down 15% YoY. The drop was mainly
due to the greater-than-expected decrease in the overall sales volume of the Chinese vehicle market
and the Group’s decision to proactively reduce the aggregate inventories of its dealers to help prepare
the Group for possible persistent weakness in China’s vehicle market in the near future. However, thecorresponding retail sales volume still recorded a mild YoY growth during the same period, reflecting
the strong competitiveness of the Group’s products.
The Group’s domestic sales volume in the first half of 2019 decreased 19% YoY to 613,061 units(including the sales volume of “Lynk&Co” vehicles sold by the Lynk&Co JV). Despite this, the Group’s
market share amongst China’s indigenous passenger vehicle brands still increased from 14.8% in thefirst half of 2018 to 15.3% in the first half of 2019. As a result, the Group still ranked the top in termsof sales volume amongst all Chinese indigenous passenger vehicle manufacturers during the period.
However, given the relatively weak sales performance by the Chinese indigenous brands in the firstsix months of 2019, the Group’s market share in the overall Chinese passenger vehicle market was
down slightly from 6.4% in the first half of 2018 to 6.1% in the first half of 2019, based on the CAAM
Data. However, based on retail sales volume, the Group’s market share in China still recorded a mild
increase in the first half of 2019. Despite this, the Group’s export sales volume surged significantly
by 344% to 38,619 units in the first half of 2019, as a result of the successful introduction of more
updated models to the export markets and the upgrading of our sales network and channels in the major
export markets. Export sales accounted for 5.9% of the Group’s total sales volume in the first half of2019, compared with only 1.1% in the same period in 2018.
In the first half of 2019, “Geely Boyue” (吉利博越) was the Group’s most popular model with asales volume of 101,254 units, representing a decrease of 20% YoY, and accounting for 16% of theGroup’s total sales volume during the period. The Group’s “Emgrand” series sedans were also key
contributors to the Group’s overall sales volume. The combined sales volume of “Emgrand” series
sedans was 102,842 units, which was down 11% YoY and constituted 16% of the Group’s overallsales volume during the period. The total sales volume of the Group’s sport utility vehicle (“SUV”)
models, which included three mid-size SUV models namely “Geely Boyue” (吉利博越), “Vision SUV”
and “01” (under “Lynk&Co” brand), four compact SUV models “Vision X3”, “Vision X1”, “Vision
S1” and “Binyue” (繽越), and three cross-over models “Emgrand GS”, “Xingyue” (星越) and “02”(under “Lynk&Co” brand), amounted to 379,728 units, down 16% YoY and accounted for 58% of
the Group’s total sales volume in the first half of 2019. In the first half of 2019, the sales volume of
the Group’s sedan models was down 19% YoY to 255,700 units, accounting for 39% of the Group’s
total sales volume during the period. The Group’s first multi-purpose vehicle (“MPV”) model “Jiaji”(嘉際) was launched in March 2019 and received positive response from the customers. A total of
16,252 units of “Jiaji” (嘉際) were sold in the last four months of the first half in 2019. Almost halfof the “Jiaji” (嘉際) sold were PHEV or MHEV versions, reflecting the improved popularity of NEEV
models amongst the Group’s customers.
- 35 -

As the continued product mix improvement more than offset the higher discounts and incentives
offered by the Group to defend its market share in China, the Group’s average ex-factory selling priceincreased by around 3% YoY in the first half of 2019.
Over the past few years, the Group’s sales and marketing system in China had undergone a major
upgrading, enabling it to provide better sales and after-sales services to its customers. The Group’s
products are currently sold under the “Geely” brand, “Geometry” brand (through an independent
distribution channel) and the “Lynk&Co” brand (through an independent distribution channel under
the Lynk&Co JV), targeting at different market segments. “Geely” brand is the Group’s main stream
mass market brand, “Geometry” brand is the Group’s new pure electric brand, whereas “Lynk&Co”
is a joint-venture brand between the Group and Volvo Car Corporation (“VCC”), targeting at global
premium market. At the end of June 2019, the Group had more than 980 dealers in China, marketingvehicles under “Geely” brand. The “Geometry” brand was launched early this year with 118 dealersin China. The Lynk&Co JV adopted a different marketing and distribution system in China. It served
its customers via 243 Lynk&Co Centres and 20 Lynk&Co Spaces in China.
New Products
New energy vehicles continued to be the Group’s focus in new products offering in the first half of2019. In addition to the launch of a new premium electric vehicle sedan model “Geometry A” in April
2019, the Group successfully added more PHEV and MHEV models to its existing major product lines
in the first half of 2019. To further expand its market share in China’s passenger vehicle market, theGroup launched its first multi-purpose vehicle (MPV) model “Jiaji” (嘉際) in March 2019, offering
petroleum, PHEV and MHEV versions initially. Further, to strengthen the Group’s market positionin the highly competitive SUV market in China and to supplement its existing SUV product offering,a new higher end crossover SUV model “Xingyue” (星越) was launched in May 2019. “Xingyue” (星越) would be the first Geely model developed from Compact Modular Architecture (“CMA”), a
sophisticated product architecture jointly developed by Geely Holding and VCC.

- 36 -

The Group plans to launch the following new products in the next twelve months:
Under the “Geely” brand:•

A MPV model targeted at business and corporate users;•

A compact SUV model;•

A compact sedan model; and•“NEEV” versions for major existing models.

Under the “Lynk&Co” brand:•

Two brand new models for “Lynk&Co”; and•“NEEV” versions for “02” and “03” models.

Under the “Geometry” brand:•

A brand new model for “Geometry”.

With the launches of more NEEV models in 2019 and more government policies to promote the useof NEEVs in China, we expect the sales of NEEVs to account for a significantly larger proportion of
the Group’s total sales volume in the coming few years.
New Energy Vehicles Strategy
The Group announced and implemented its New Energy Vehicle (“NEV”) strategy namely “Blue
Geely Initiatives” in November 2015. “Blue Geely Initiatives” is a 5-year campaign demonstrating theGroup’s dedication to transformation into the industry leader in NEV technologies. The initiative’s
target is to ensure that up to 90% of the Group’s total sales volume could be in the form of new energy
and electrified vehicles (NEEVs), which include the electric vehicles (“EVs”), battery electric vehicles(“BEVs”), hybrid electric vehicles (“HEVs”), mild hybrid electric vehicles (“MHEVs”) and plug-in
hybrid electric vehicles (“PHEVs”) by 2020.

- 37 -

Enriching our NEEV products offering will continue to be the core focus of the Group in 2019, during
which NEEV version will be added to all the Group’s major product line. In the first half of 2019, theNEEV versions for Emgrand GS/GL (known as Emgrand GS MHEV, Emgrand GL PHEV and Emgrand
GL MHEV), Binyue (known as Binyue PHEV and Binyue MHEV), Xingyue (known as Xingyue PHEV
and Xingyue MHEV) and Jiaji (known as Jiaji PHEV and Jiaji MHEV) were launched in the China
market. These NEEV models have so far achieved good customer satisfaction in China. The initial
success of these NEEV products should put the Group in a good position to achieve its ambitious target
set under the “Blue Geely Initiatives”. In the first half of 2019, the Group sold a total of 57,600 unitsof NEEV models (including the sales volume of “01 PHEV” and ““02 PHEV” sold by the Lynk&Co
JV), up around threefold from the same period in 2018. Amongst the NEEVs sold in the first half of2019, the best-selling models were “Emgrand EV”, “Emgrand GSe”, “Borui GE MHEV” and “Jiaji
MHEV”, which together accounted for around 81% of the total sales volume of NEEVs.
Further, the Group launched its pure electric brand “Geometry” and the brand’s first sedan model“Geometry A” in April 2019. The move signified the Group’s strategy to quickly help expand NEEV
sales via tailor-made products and services to its NEEV customers.
Genius AFC
Genius Auto Finance Company Limited (“Genius AFC”), the Group’s 80%-owned vehicle financing
joint venture formed with BNP Paribas Personal Finance, commenced operation in September 2015.
Located in Shanghai, Genius AFC is principally engaged in the provision of auto wholesales financing
solutions to auto dealers and retail financing solutions to end customers, mainly supporting the three
key auto brands for Geely Holding Group, including “Geely”, “Lynk&Co” and “Volvo Car”.
Despite the weakening demand in Chinese passenger vehicle market since the later part of last year,
Genius AFC continued to post considerable growth in the first half of 2019. The total outstanding loan
assets increased from RMB19.26 billion at the end of 2018 to RMB23.55 billion at the end of June
2019. With the improved sales and marketing management, enhanced operation efficiency and tightrisk control, Genius AFC achieved good financial performance with net profit increasing 156% YoY
to RMB232.70 million in the first half of 2019. Notwithstanding the Group’s lower–than-expectedvehicle sales volume so far this year and the increasingly fierce competition in the auto finance market
in China, Genius AFC is still on track to meet its annual target for the year of 2019.
To support the continued growth of Genius AFC’s auto finance business, Genius AFC’s registeredcapital was further increased from RMB2 billion to RMB4 billion in May 2019. The Group contributed
80% (or RMB1.6 billion) of the additional capital injection according to its shareholding in Genius
AFC. Besides, Genius AFC secured more external funds through different means like bilateral bankfacilities and asset-backed security (“ABS”) issuance in the first half of 2019. Further, Genius AFC
started to make use of the inter-bank offered credit market to obtain additional funding in April 2019.

- 38 -

LYNK&CO JV
Lynk&Co Investment Co., Ltd. (“Lynk&Co JV”), established in October 2017, is an indirect 50%-owned
joint venture of the Group (the remaining interests were held as to 20% by a subsidiary of Geely
Holding, and as to 30% by a subsidiary of Volvo Car Corporation or “VCC”, which is also majorityowned by Geely Holding). The Lynk&Co JV was set up to facilitate the development, manufacture,sales and servicing of high-end passenger vehicles in both the China and international market underthe “Lynk&Co” brand.
Positioned as a global brand with state-of-the-art design and manufacturing capabilities, Lynk&Co JV
aims to target at the premium mobility market segment globally through the provision of both passenger
vehicles and mobility services. The innovative business model of Lynk&Co JV is supported by new
vehicle models developed from the CMA, which is jointly developed by Geely Holding and VCC andlicensed to the Lynk&Co JV.
The first vehicle model called “01” under the Lynk&Co JV was offered to the China market at the endof 2017. In 2018, two more new models namely “02” and “03” and the first NEEV model called “01
PHEV” were launched in the China market.
In the first half of 2019, the total sales volume of the Lynk&Co JV amounted to 55,877 units, up 21%
YoY. “NEEV” versions for “02” and “03” are scheduled to be launched in the second half of 2019.
Despite its initial manufacturing capacity constraints and a drastic slowdown in vehicle demand in
China recently, Lynk&Co JV managed to post a net profit of RMB266.18 million in the first half of2019. In view of Chinese consumers’ current preference over physical dealer shops to support sales
and services, Lynk&Co JV maintains a dealer network in China with 243 stores called “Lynk&Co
Centres” and 20 display and customer service centres called “Lynk&Co Spaces” in China.
Exports
The Group exported a total of 38,619 units of vehicles in the first six months of 2019, up 344% fromthe same period last year, and accounted for 5.9% of the Group’s total sales volume during the period.
The strong export sales performance was mainly driven by enhanced sales network and channels andthe Group’s introduction of more updated products in its major export markets. “Geely Boyue” and“Vision SUV” were the Group’s most important export models in terms of sales volume in the firsthalf of 2019, accounting for 91% of the Group’s total export sales volume during the period. At theend of June 2019, the Group exported its products to 16 countries through 16 sales agents and 249
sales and service outlets.
Developing countries in the Asia, Eastern Europe and Middle East were the most important markets for
the Group’s exports in the first half of 2019. In addition to export of vehicles from China, the Groupalso assembles some models sold overseas using contract manufacturing arrangements and joint-venture
manufacturing plants with local partners.

- 39 -

Acquisitions of 100% interests in Yiwu Geely Powertrain Company Limited (義烏吉利動力總成有限公司 or “Yiwu Target”)
On 29 April 2019, Zhejiang Geely Powertrain Company Limited (浙江吉利動力總成有限公司 or“Zhejiang Powertrain”), an indirect 99.1% owned subsidiary of the Company, entered into the YW
Acquisition Agreement with Yiwu Geely Engines Company Limited (義烏吉利發動機有限公司 or“Yiwu Engines”), a wholly owned subsidiary of Zhejiang Geely Automobile Company Limited (浙江吉利汽車有限公司 or “Zhejiang Geely”), pursuant to which Zhejiang Powertrain agreed to acquire, andYiwu Engines agreed to sell, the entire registered capital of the YW Target, for a cash considerationof RMB322,205,872. The consideration was determined with reference to (i) the net asset value of theYW Target prepared under the Hong Kong Financial Reporting Standards (“HKFRS”) as at 31 March
2019; and (ii) the valuation premium over the carrying value of the YW Properties as at 31 March
2019. The acquisition would be funded by internal resources of the Group.
The acquisition had been duly approved by the independent shareholders of the Company at theextraordinary general meeting held on 10 June 2019 and it had been subsequently completed by endof July 2019. Upon completion of the acquisition, the YW Target becomes an indirect subsidiary of
the Company and its financial results are consolidated into the financial statements of the Group.
The vehicle engines to be manufactured by the YW Target will be used in the Group’s top-end vehicle
models and will also be sold to the Geely Holding Group for use in the Volvo-branded vehicles andto the Lynk&Co JV and its subsidiaries (collectively, the “Lynk&Co Group”) for use in “Lynk&Co”
vehicles. The vehicle engines to be manufactured by the YW Target will possess superior performancein terms of power output and fuel consumption as well as characteristics of low carbon emission, which
are targeted to meet the needs of the Group, the Lynk&Co Group and the Geely Holding Group forhigh performance and multi-functional vehicles.
Formation of a joint venture company for EVs batteries
On 12 June 2019, Shanghai Maple Guorun Automobile Company Limited (上海華普國潤汽車有限公司or “Shanghai Maple Guorun”), an indirect 99% owned subsidiary of the Company, entered into
the joint venture agreement with LG Chem Ltd. (“LG Chem”, Korean Stock Exchange stock code:
051910), pursuant to which the parties agreed to establish the joint venture to principally engage inthe production and sales of batteries for EVs.
The joint venture will be owned as to 50% by Shanghai Maple Guorun and as to 50% by LG Chem.
The registered capital of the joint venture will be US$188,000,000, and will be contributed as to50% (equivalent to US$94,000,000) in cash by Shanghai Maple Guorun and as to 50% (equivalent toUS$94,000,000) in cash by LG Chem. The financial results of the joint venture will be accounted forin the consolidated financial statements of the Group using the equity method.
The establishment of the joint venture will leverage on the strength, resources and expertise of bothparties in the manufacturing of batteries for new energy vehicles in China, which in turn will ensurea stable supply of the EV batteries to the Group in the future.
- 40 -

Outlook
China’s passenger vehicle market weakened further in the first half of 2019. In particular, demand for
SUVs deteriorated significantly from rapid growth over the past few years to negative growth since
the middle of 2018. The uncertain economic environment caused by trade dispute between China andthe USA, the rush by local governments to implement new emission standards, namely China VI (國六), in major cities in China and the completed elimination of purchase tax subsidies for fuel efficient
vehicles at the beginning of 2019 are believed to be the key reasons behind the lower vehicle demandin China. Although the Chinese government had started to introduce measures to stimulate automobile
demand, the passenger vehicle market in China has shown little sign of improvement. Recently, theChina-US trade dispute appears to have worsened further, resulting in huge uncertainties for passenger
vehicle demand in China in the remainder of the year. Longer-term, there are additional challenges tobe faced by Chinese passenger vehicle manufacturers including the transformation from conventional
vehicles to NEEVs and intelligent/connected vehicles, the completed elimination of government
subsidies for NEEVs over the next 12 months and the scheduled relaxation of foreign investment in
China’s automobile industry over the next few years.
On the positive front, the Group’s overall competitiveness and management capabilities have strengthened
significantly over the past few years following its successful strategic transformation to improve brandimage, product quality, customer service satisfaction, technology and innovation, as reflected by theencouraging market acceptance for the Group’s new products and the continual increase in its market
share. Also, the Group’s financial position remained healthy as a result of good operational cash inflow
over the past few years. These should enable the Group to continue investing for the future and respondto the abrupt market changes timely.
The Group has broadened its product portfolio through more quality offerings across different vehicle
segments, including sedan, SUV, crossover and MPV, leading to higher market share, better economies
of scale and improved brand recognition. In the coming 12 months, the Group plans to launch its second
MPV model, which should provide the Group with additional growth momentum for growth. A newcompact SUV model would also be launched to further enrich the Group’s products portfolio in the
SUV segment, enabling the Group to offer SUV models in every sub-segment of the important SUV
sector in China. Upgraded versions and NEEV versions for all major existing models are also scheduled
to be launched in the second half of 2019 to help maintain the Group’s leading position in A-segment
sedan and SUV markets in China. So far in 2019, all the Group’s new product launches have been wellreceived by the market. In view of more quality new products offering ahead, the Group should be ina good position to secure higher market share in China’s passenger vehicle market in the years ahead.

- 41 -

With substantial efforts and resources invested in the research and development, together with thecontinuous technological collaboration with VCC over the past few years, the Group is ahead of its
competitors to become one of the most innovative companies in the automobile sector, offering ourcustomers with intelligent vehicles, which are smarter, more fuel-efficient, safer and fully connected.
The launches of the Group’s “iNTEC” technology platform, “GKUI” customer interface platform andhigh-performance smart chip for vehicles and the extensive application of these technologies or advanced
components in our products should facilitate the Group to address the radical technological changes andcustomers’ needs in the automobile sector. Despite the recent weakness in China’s passenger vehicle
market, the Group will continue to invest in research and development to maintain its competitivenessin technologies and innovation.
On the NEEV front, the Group would significantly increase the proportion of new energy and electrified
vehicles in its sales volume by adding more new energy and electrified versions for most of its major
product lines in the remainder of the year. To facilitate large scale production of electrified vehicles,
the Group has so far set up two strategic investment entities with leading industrial players for the
production and sales of batteries for electrified vehicles.
Additional growth could be generated by the upcoming launch of more new models under the “Lynk&Co”
brand in the second half of 2019. The “Lynk&Co” brand, which emphasizes key brand concepts like“personalized”; “open platform” and “full connectivity”, are key parts of the Group’s strategy to expand
into the premium vehicle segment in the global market. The “Lynk&Co” brand is on track to enter
the European market in 2020 with an innovative mobility business model. “Lynk&Co” shares productarchitecture with VCC and the Group. Future increase in sales at “Lynk&Co JV” could create hugesynergies and benefits from economies of scale for the Group.
Despite the recent uncertainties caused by the trade friction between China and the USA, the devaluationof RMB against US dollar recently and the fall in passenger vehicle demand in China, the timelytransformation of the Group over the past few years should have prepared the Group well in advance
to meet these challenges. With the Group’s negligible dependence on imported vehicle components
and exports sales, the impact of current trade tension on the Group’s operation should be minimal andmanageable. To prepare for a possible prolonged weakness in China’s passenger vehicle demand, theGroup has already embarked on a major restructuring to streamline its sales management structure,aiming to speed up decision making in response to rapid change in market condition recently.
Given the greater-than-expected decrease in the overall sales volume of the Chinese passenger vehicle
market so far this year and the Group’s determination to contain risk by proactively reducing theaggregate inventories of its dealers, the Group’s total sales volume in the first half of 2019 was lower
than our original expectations. This, coupled with continued uncertainties in China’s passenger vehicle
demand, have prompted the Group’s management team to revise downwards our 2019 full year sales
volume target by 10% from 1,510,000 units to 1,360,000 units. Despite this, the Group’s management
team is confident that the Group is still on track of becoming a leading global automobile group withgood reputation and integrity, winning respects from our customers.

- 42 -CAPITAL STRUCTURE AND TREASURY POLICIESThe Group funds its short-term working capital requirement mainly through its own operational cash
flow, short-term bank loans from commercial banks in China and Hong Kong and the credit fromits suppliers. For its longer-term capital expenditures including product and technology development
costs, investment in the construction, expansion and upgrading of production facilities, the Group’s
strategy is to fund these longer-term capital commitments by a combination of its operational cash
flow, shareholders’ loan from its parent Geely Holding Group and fund raising exercises in the capital
market. As at 30 June 2019, the Group’s shareholders’ fund amounted to approximately RMB46.5
billion (As at 31 December 2018: approximately RMB44.9 billion). Upon exercise of share options,
129.911 million new shares were issued by the Group during the six months ended 30 June 2019.
EXPOSURE TO FOREIGN EXCHANGE RISK
During the six months ended 30 June 2019, the Group’s operations were principally related to domestic
sales of automobiles and related automobile parts and components in the Mainland China and theGroup’s assets and liabilities were mainly denominated in RMB, the functional currency of the Group’s
key subsidiaries.
In terms of export operations, most of the Group’s export sales were denominated in United States
Dollars (US$) during the period. Also, the Group could face foreign exchange risk, particularly inemerging markets if it had local subsidiaries, associates or joint ventures in overseas export markets.
The devaluation of local currencies in overseas markets could result in foreign exchange losses andaffect the Group’s competitiveness and therefore its sales volume in these markets. To mitigate theforeign exchange risk, the Group has embarked on plans to increase the proportion of its costs in local
currencies to engage in local business activities. Also, to compensate for higher costs in export markets,
the Group has speeded up the renewal of its export models, and has started to streamline its export
operations displaying comparative advantages with an aim to achieve higher customer satisfaction,better operating efficiency and economies of scale in its export markets.
The Group’s management would also closely monitor the market situation and might consider tools tomanage foreign exchange risk whenever necessary.

- 43 -

LIQUIDITY AND FINANCIAL RESOURCES
As at 30 June 2019, the Group’s current ratio (current assets/current liabilities) was 0.93 (As at 31
December 2018: 0.98) and the gearing ratio of the Group was 7.3% (As at 31 December 2018: 7.6%)
which was calculated on the Group’s total borrowings (including the bank loans and the 5-year
US$300 million 3.625% bonds due 2023 (the “Bonds”) but excluding trade and other payables andlease liabilities) to total shareholders’ equity (excluding non-controlling interests). Total borrowings(including the bank loans, the Bonds but excluding trade and other payables and lease liabilities) as at
30 June 2019 amounted to approximately RMB3.4 billion (As at 31 December 2018: approximately
RMB3.4 billion) were the Group’s bank loans and the Bonds. At the end of June 2019, the Group’s
total borrowings were denominated in US$. They aligned with the currency mix of the Group’s revenues
from export business, which were mainly denominated in US$. For the Bonds, they were unsecured,interest-bearing and repaid on maturity. Should other opportunities arise requiring additional funding,the board of directors of the Company (the “Board”) believes the Group is in a good position to obtainsuch financing.
EMPLOYEES’ REMUNERATION POLICY
As at 30 June 2019, the total number of employees of the Group was about 45,500 (As at 31 December
2018: approximately 52,400). Employees’ remuneration packages are based on individual experienceand work profile. The packages are reviewed annually by the management who takes into account theoverall performance of the working staff and market conditions. The Group also participates in the
Mandatory Provident Fund Scheme in Hong Kong and state-managed retirement benefit scheme in
the PRC. In addition, employees are eligible for share options under the share option scheme adopted
by the Company.
INTERIM DIVIDENDAt a meeting of the Board held on 21 August 2019, the Board resolved not to pay an interim dividend
to the Company’s shareholders (2018: Nil).
PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIESNeither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’slisted securities during the six months ended 30 June 2019.

- 44 -

CORPORATE GOVERNANCE
The Company has complied with the code provisions (“CPs”) of the Corporate Governance Code andCorporate Governance Report set out in Appendix 14 to the Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) throughout the six months ended
30 June 2019, except for CP E.1.2 as explained below:
CP E.1.2 provides that the chairman of the Board (the “Chairman”) and the chairman of respective
Board committees should attend the annual general meeting of the Company. During the period ended
30 June 2019, the Chairman did not attend the annual general meeting of the Company in person due
to conflict of his schedules and other prior business engagement in the PRC. If the Chairman could
not attend the general meeting of the Company in person, he would assign an executive director, whodoes not have a material interest in the businesses contemplating in the meeting and should report tohim on any enquiries shareholders of the Company (the “Shareholders”) might have, to attend suchgeneral meeting on his behalf. Further, the Company would facilitate a conference call for Shareholders
and the Directors who are unable to attend in person (including the Chairman) to discuss any specificenquiries with respect to the businesses contemplating in the general meeting. Through these measures,views of the Shareholders would be properly communicated to the Board as a whole. In addition, theexternal auditor will be invited to attend the annual general meeting of the Company to answer questions
about the conduct of the audit, the preparation and content of the auditor’s report, accounting policies
and auditor’s independence.
The Company held its annual general meeting on 27 May 2019. Due to conflict of his schedules andother prior business engagement in the PRC, the Chairman was unable to attend the general meeting
physically. One independent non-executive Director and two executive Directors and the Company’s
external auditor attended and answered questions raised by the Shareholders at the meeting physically.
The Chairman, one non-executive Director, two other independent non-executive directors and threeother executive Directors attended the meeting via conference call.
In the interim period under review, the Company has adopted the Model Code for Securities Transactions
by Directors of Listed Issuers (the “Model Code”) set out in Appendix 10 to the Listing Rules as its
own code of conduct for securities transactions by officers (the “Code”). All Directors have confirmed
their compliance during the review period with the required standards set out in both the Model Codeand the Code.

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AUDIT COMMITTEEThe Company has an audit committee which was established in accordance with the requirements of
the Listing Rules for the purpose of reviewing and providing supervision over the Group’s financial
reporting processes, risk management systems and internal controls. As at 30 June 2019, the audit
committee comprises Messrs. Lee Cheuk Yin, Dannis, Yeung Sau Hung, Alex, An Qing Heng andWang Yang who are the independent non-executive Directors.
The Audit Committee has reviewed the unaudited interim results of the Group for the six months
ended 30 June 2019.
PUBLICATION OF INTERIM REPORT ON THE WEBSITES OF THE COMPANY AND THE
STOCK EXCHANGE OF HONG KONG LIMITED
Pursuant to the requirements of the Listing Rules regarding the reporting period, the 2019 interim
report will set out all information disclosed in the interim results announcement for the first half of2019 and will be disclosed on the websites of the Company (http://www.geelyauto.com.hk) and The
Stock Exchange of Hong Kong Limited (http://www.hkexnews.hk) in due course.
By Order of the Board of
Geely Automobile Holdings Limited
Li Shu Fu
ChairmanHong Kong, 21 August 2019
As at the date of this announcement, the executive directors of the Company are Mr. Li Shu Fu(Chairman), Mr. Yang Jian (Vice Chairman), Mr. Li Dong Hui, Daniel (Vice Chairman), Mr. Gui Sheng
Yue (Chief Executive Officer), Mr. An Cong Hui, Mr. Ang Siu Lun, Lawrence and Ms. Wei Mei, andthe independent non-executive directors of the Company are Mr. Lee Cheuk Yin, Dannis, Mr. Yeung
Sau Hung, Alex, Mr. An Qing Heng and Mr. Wang Yang.

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