Zhongtian Financial’s 2020 Semi-annual Board of Directors Operation Review

Zhongtian Financial (000540) 2020 Semi-annual Board of Directors Operation Review contains the following contents:

1. Overview

Macro market and industry analysis

(1) Macro market review

In the first half of 2020, in the face of the severe test brought by the COVID-19 epidemic and the complex and changing domestic and international environment, the whole country coordinated the promotion of epidemic prevention and control and economic and social development. In all work, we adhere to the general tone of seeking progress while maintaining stability, do a solid job in the "six guarantees", fully implement the "six stability" tasks, and build a new dual-circulation development pattern with domestic circulation as the mainstay and international and domestic mutual promotion, and the economic operation Gradual recovery, basic people's livelihood protection is strong, market expectations are generally positive, and the overall social development situation is stable. According to data from the National Bureau of Statistics, the GDP in the first half of the year was 45.66 trillion yuan, a year-on-year decrease of 1.6%, of which the second quarter increased by 3.2% year-on-year.

In the first half of 2020, Guizhou Province’s economic performance first declined and then rose, turning from negative to positive, showing an overall stabilization, accelerated recovery, and positive development trend. According to data from the Guizhou Provincial Bureau of Statistics, the province's GDP was 798.553 billion yuan, a year-on-year increase of 1.5%, ranking among the top three in the country. The added value of the tertiary industry was 420.016 billion yuan, a year-on-year increase of 1.8%, accounting for 52.60% of the province's GDP.

(2) Review of the real estate industry

In the first half of 2020, the central government continued to adhere to the positioning of "housing is for living, not for speculation" and implemented the goals of "stabilizing land prices, stabilizing housing prices, and stabilizing expectations". The national real estate industry is operating smoothly, and regional market development is obviously differentiated. With the resumption of work and production steadily advancing, the core indicators of the national real estate industry gradually improved in the second quarter after declining in the first quarter. According to data from the National Bureau of Statistics, the sales area of ??commercial housing nationwide in the first half of the year was 694.04 million square meters, a year-on-year decrease of 8.4, and the decline was 17.9 percentage points narrower than the first quarter; commercial housing sales were 6.6895 billion yuan, a year-on-year decrease of 5.4, a decline narrower than the first quarter. narrowed by 19.3 percentage points.

In the first half of 2020, Guizhou Province adhered to the guidance of planning, adapted to the current new transportation pattern and new regional development situation, actively promoted the construction of new infrastructure, and further built an intensive, efficient, affordable, smart, green, safe and reliable Modernize the infrastructure system, continuously strengthen urban renewal and the renovation and upgrading of existing housing stock, and lay a new foundation for high-quality regional development. According to data from the Guizhou Provincial Bureau of Statistics, the sales area of ??commercial housing in the province in the first half of the year was 23.8425 million square meters, a year-on-year decrease of 4.6, and the decline was 11.7 percentage points narrower than in the first quarter; commercial housing sales were 134.741 billion yuan. , a year-on-year decrease of 9.3, a decrease of 10 percentage points narrowed from the first quarter.

(3) Review of the financial industry

In the first half of 2020, my country has steadily advanced its comprehensive deepening of capital market reform, with the official implementation of the new securities law, the reform of the GEM and the pilot registration system, and the New OTC Market. The reform has been implemented smoothly; the banking industry has further implemented various financial relief policies and accurately supported the national major regional development strategies and the construction of "two new and one important" projects; the insurance industry has further optimized the insurance supervision mechanism and accelerated the reform of the use of insurance funds. According to data from the China Banking and Insurance Regulatory Commission, in the first half of the year, the national banking industry added 12.1 trillion yuan in RMB loans, an increase of 2.4 trillion yuan year-on-year. According to data from the Securities Association of China, in the first half of the year, the national securities industry achieved operating income of 213.404 billion yuan, a year-on-year increase of 1.926, and net profit of 83.147 billion yuan, a year-on-year increase of 24.73. According to data from the China Banking and Insurance Regulatory Commission, the original premium income of my country’s insurance industry in the first half of the year 2.72 trillion yuan, a year-on-year increase of 6.67%.

In the first half of 2020, financial deposits and loans in Guizhou Province accelerated growth. According to data from the Guizhou Provincial Bureau of Statistics and the Guizhou Provincial Banking and Insurance Regulatory Bureau, the balance of RMB deposits of financial institutions in the province was 2.834339 billion yuan, a year-on-year increase of 1.8%, and the balance of RMB loans of financial institutions was 3.087646 billion yuan, a year-on-year increase of 1.46%. , the original premium income of the insurance industry in Guizhou Province was 30.563 billion yuan, a year-on-year increase of 6.

Review of the company’s operations and management in the first half of 2020

During the reporting period, the company focused on ensuring normal operations and stable development as its top priority, and always adhered to risk prevention and control As a fundamental guarantee, we persisted in seeking progress while maintaining stability, and on the premise of resolutely preventing and controlling the epidemic, we strived to maintain the overall stability of the company and the steady development of each business segment, achieving total operating income of 11.854 billion yuan.

(1) Party Building Work

During the reporting period, the company’s Party Committee aimed to assist the development of the enterprise and focused on consolidating the foundation of party building work. It focused on core tasks, determined the direction of work, and closely Focusing on service development and improving work standards, we will continue to enhance the cohesion, centripetal force, organizational power, and combat effectiveness of the party organization, and continue to promote the organic integration and simultaneous development of party building work and enterprise production and operation work.

In terms of political construction, the company’s party committee always puts political construction first, strengthens publicity and guidance, and organizes grassroots branches to guide all party members to adapt to the new era and new situation through a combination of concentrated learning and practical learning. , implement new tasks and new requirements. In terms of organizational construction, the company's party committee focuses on improving organizational combat effectiveness, constantly improves grassroots organizational construction, and accelerates the resumption of work and production around winning the battle against the epidemic. During the reporting period, the company’s party members gave full play to their pioneering and exemplary role, established a vanguard team of party members for epidemic prevention and control, and took the lead in donating money and materials to help epidemic prevention and control. Nearly two hundred pioneer party members went to the front lines of community epidemic prevention and control to build a solid foundation for the owners and employees. Protect life and health.

(2) Anti-epidemic work

During the reporting period, the company promptly responded to the arrangements and deployments of the Party Central Committee and provincial and municipal government departments at all levels, and resolutely adhered to the principle of "rooted in Guizhou, grateful to Guizhou, and dedicated to Guizhou". "Guizhou" has been implemented into actions, fully supporting epidemic prevention and control, and overcoming the current difficulties. The first is to launch a "Fundraising Proposal" to all employees, actively participate in the "Financial Responsibility to Fight the Epidemic" fundraising campaign, donate money and materials, and use practical actions to help Guizhou win the epidemic sniper war. Second, Zhongtian Property takes it as its own responsibility to fully protect the lives and safety of more than 300,000 community residents and employees. It uses the established "Zhongtian. Service Home" APP to realize online property services and do a solid job in epidemic prevention and control of the 71 projects it serves. The prevention and control work provides first-hand information for the government to establish epidemic period files, classify screening, and focus on monitoring. Third, Zhongtian Health Care gave full play to its professional advantages, joined the community on the front line, and actively supported and participated in grassroots front-line epidemic prevention and control work.

(3) Poverty alleviation work

The company fully implements the spirit of the mobilization conference of "Sprint 90 days to win the war of annihilation" in the fight against poverty in Guizhou Province. We will make every effort to help the province achieve high-quality poverty alleviation as scheduled and win the decisive battle against poverty. During the reporting period, on the premise of ensuring that epidemic prevention and control is in place, the company's global premium agricultural tourism brand "Legengtian" fully leveraged its "brand community" service advantages and launched a "community delivery store pick-up" service in various stores in Guiyang City , ensuring that agricultural products are not unavailable and unsalable during the epidemic, fully ensuring the stability of villagers' income during the epidemic, and continuing to contribute to the fight against poverty. During the reporting period, the company provided precise assistance to Dawan Village, Lewang Town, Wangmo County, a deeply impoverished village listed by the state, focusing on key areas such as rural living environment improvement, targeted employment assistance, and rural civilization construction, and fully promoted the "one household, one policy" Comprehensive assistance programs and measures, such as "precision implementation and precise implementation", have helped Dawan Village get rid of poverty with high quality as scheduled. Zhongtian Holiday Inn Express Hotel in the "Amei Qituo" town has expanded new homestay formats through the linkage model of "training and employment" to increase the income of relocated residents in various forms and channels, and consolidate the results of relocating poverty alleviation.

(4) Business Development

During the reporting period, Zhongtian Property closely focused on the goal of building "technological properties and intelligent properties" and defined "one basic support and two management centers" , three application platforms" information construction path, relying on technology leadership and business support, striving to realize the transformation of property services from traditional labor-intensive to technology-based properties, and the comprehensive strength and brand influence continue to improve.

Through the implementation of a new front-line project management model of "taking the call center as the platform and the housekeeper system as the core", Zhongtian Property has completed the diversified operating system and business establishment and effectively improved the efficiency of property management; organized and carried out six major themes of "online and offline" Community cultural activities enrich the spiritual and cultural life of owners. During the reporting period, Zhongtian Property won the titles of "2020 China's Top 100 Property Service Enterprises (TOP24)", "2020 China Property Service Annual Socially Responsible Enterprise", "2020 China's Characteristics Property Service Leading Enterprise", "2020 Guiyang Property Service Quality Leading Enterprise", etc. Multiple honors. The average total score of the high school entrance examination of Zhongtian Middle School has once again set a new benchmark for the city's high school entrance examination results, ranking first in Guiyang City's high school entrance examination results for the 11th consecutive time; Zhongtian Primary School and Zhongtian Kindergarten continue to "double improve" the quality of education and the reputation of education; Zhongtian Sports launches "Fitness" "War against the Epidemic" and "Salute to the Rebels" and other brand activities, and actively prepare for the opening of new stores; conferences and exhibitions strictly follow government requirements to prevent and control the epidemic, actively organize and carry out online event planning and promotion, and expand through online live broadcasts and other methods Increase brand awareness, promote customer resource reserves, and lay a solid foundation for business development and implementation after resumption of work.

Financial business. The company always takes risk control as its foundation, improves the profitability of financial assets as its core, and aims at the mutual promotion of internal control and operational development. It firmly promotes all financial subsidiaries to improve their governance level and steadily promotes high-quality development of financial business. During the reporting period, the company achieved total financial operating income of approximately 7.063 billion yuan, a year-on-year increase of 29.08%.

Zhongrong Life further consolidates capital management, improves operational efficiency and governance levels, and ensures sufficient solvency; solidly promotes the optimization of business structure, promotes the development of long-term regular payment business, and continues to increase the proportion of high-quality business; strengthens line A business-driven model that combines online and offline channels, and actively expands the construction of innovative channels; improves online service efficiency, improves online security service items, electronic return visits, online claims and other services; completes the improvement and filing of relevant investment capability systems Material update and other work. During the reporting period, Zhongrong Life achieved scale premiums of RMB 7.086 billion.

Zhongtian Guofu Securities has always adhered to compliance and risk control as its lifeline to further enhance its comprehensive competitiveness. First, the organizational structure is optimized to form a business segment led by investment banking, sales, brokerage and self-operation, and functional departments are newly established and adjusted according to the business segments to further enhance comprehensive service capabilities and management efficiency; second, the scale, number, and income of investment banking projects Significant improvement. In the first half of the year, 30 projects have been completed, 30 projects have been approved, 23 projects are under review, and 36 projects are planned to be declared. Business income increased by 16.46% year-on-year; thirdly, it is equipped with a professional team with strong research, investment and transaction capabilities. Team, self-operated business achieved better returns. Fourth, the brokerage business has steadily improved. The brokerage business of 17 branches has been completed and preparations are being made to establish three branches in Liaoning, Qingdao and Jiangxi. Fifth, the application for licenses for asset management and agency sales of financial products has been launched, and relevant application materials have been submitted during the reporting period.

Health care business. The company has always adhered to the main line of dual-core development of "primary medical care" and "high-quality medical care" and steadily promoted the layout of health care business. In terms of primary medical care business, we completed the operational preparations for the second health service center in Shuidong Community and the second day care center for the elderly in Shuidong Community, fully launched the preparatory work for the fourth health service center in Shuidong Community, and accelerated the promotion of primary medical care. Segment business layout. In terms of high-quality medical business, we have always taken exquisite medical care as the development orientation and steadily promoted the development of related businesses. Among them, the business of Zhongtian Guanshanhu Dental Outpatient Department is being carried out in an orderly manner and the business is growing steadily; the construction of Guanshanhu Health and Physical Examination Center is accelerating and is planned to be put into operation at the end of 2020.

(5) Compliance and risk control

The company resolutely follows and implements the business management idea of ??“preventing risks and strengthening compliance”, and improves compliance management and comprehensive risk management mechanisms. Enhance risk prevention and control capabilities.

The first is to systematically and comprehensively monitor the company's risks, optimize the risk management and control process, and ensure the comprehensiveness, effectiveness, and timeliness of risk management; the second is to systematically sort out the company's internal control system and management process, and start from the system Continue to improve the risk control and compliance system in terms of its soundness and effectiveness; the third is to strengthen the risk management and control concept of all employees and improve the ability to quickly respond to early warning signals and process risk information; the fourth is to regularly or irregularly monitor the risks of subsidiaries Monitor and verify the status of the company, and use a combination of quantitative and qualitative methods to continuously improve the early risk identification mechanism.

(6) Brand and corporate culture

During the reporting period, the company focused on creating a new carrier for corporate culture construction and a new brand image that promotes high-quality business development. On its official WeChat, Weibo and other self-media platforms, the company continues to open special columns such as "Zhongtian Strugglers" and "Fighting the Epidemic with Me Through Rain or Shine" to deeply explore a large number of front-line businesses in the fight against the epidemic, poverty alleviation, community services and other businesses. Pioneer models and typical figures are vigorously promoted, which further makes the cultural concept of "Together with Zhongtian a future" deeply rooted in the hearts of the people, which greatly enhances the cohesion and combat effectiveness of Zhongtian people.

(7) Team building

During the reporting period, the company closely focused on strategic goals and business development, with the core of enhancing the team's "cohesion, combat effectiveness, and execution ability" and continuously improved The team works together to continuously promote organizational optimization. The company actively responds to the government's policy call of "stabilizing employment", constantly improves the vertical development and horizontal mobility mechanism of employees, dynamically monitors the rationality of the organizational structure, implements internal talent sharing, rationally allocates resources, and effectively stabilizes employment; scientifically Carry out data quantification work to further improve the effectiveness of incentive plans, and continue to improve the incentive and restraint mechanism; strengthen organizational empowerment, enhance organizational vitality, continue to enrich the company's business team and management team, form a positive competition mechanism, and provide organizational support for business development.

(8) Major asset restructuring matters

During the reporting period, the company's major asset restructuring work was still in progress, and the final plan has not yet been formed. On July 17, 2020, the China Banking and Insurance Regulatory Commission issued the "Announcement of the China Banking and Insurance Regulatory Commission on the Takeover of Six Institutions including Tianan Property Insurance Co., Ltd. in accordance with the law." In view of the fact that China Life Insurance triggered the first step of the Insurance Law of the People's Republic of China and the People's Republic of China In accordance with the takeover conditions stipulated in Article 144, the China Banking and Insurance Regulatory Commission dispatched a takeover team to implement the takeover of China Life.

The company needs to comply with the disclosure requirements of the "Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 3 - Listed Companies Engaged in Real Estate Business"

New land reserve projects

Note: The bidding date for the above land parcels is July 29, 2020.

Accumulated land reserves

Development status of major projects

Sales status of major projects

Leasing status of major projects

Primary land development situation

Financing channels

Development strategy and business plan for the next year

2020 is the year to build a moderately prosperous society in all respects and the "13th Five-Year Plan" The final year of the plan is a year of decisive victory in the fight against poverty and a year of hard work to overcome difficulties. The company adheres to the basic principles of "being grateful to the Party, listening to the Party, following the Party, and acting in accordance with market rules". Based on maintaining stable operations, the company maintains the steady development of each business segment and strives to complete the annual goals and key tasks.

Financial business. The company will continue to improve the quality and efficiency of risk management as the basis and optimize the comprehensive risk management system; with the improvement of financial asset profitability as the core, it will strengthen customer operations, sales growth, technology empowerment, and management improvement.

Strengthen professional positioning, consolidate the customer-centered service system, effectively improve customer experience and satisfaction, and create differentiated advantages; build a multi-channel operation system and strengthen sales team building and cultivation; effectively promote the impact of financial technology on business development and operation management comprehensive empowerment, promote in-depth collaboration between products, business support and customer needs, and provide digital, technological, and high-quality financial services; strengthen business management collaboration, promote optimal allocation of resources, and continue to promote Zhongrong Life Insurance’s investment capability filing, Zhongtian Guofu Securities business license application and Zhongtian Youshan Fund public fund license application work will improve comprehensive service capabilities and promote the high-quality development of the company's financial business.

Health care business. With "primary medical care" as the main line, we will steadily and continuously promote the layout of health care business, carry out various basic medical and public health services, and create a grassroots health care service system with Zhongtian characteristics.

Providing guarantees for bank mortgage loans to commercial housing purchasers

The company provides mortgage loan guarantees to commercial housing purchasers in accordance with real estate operating practices. The guarantee type is phased guarantee. The guarantee period of the phased guarantee starts from the date when the guarantee contract takes effect and ends on the date when the "Real Estate Certificate" of the house purchased by the commercial house purchaser is issued and the mortgage registration procedures are completed and handed over to the bank for enforcement. As of the end of this reporting period, the balance of periodic guarantees undertaken by the company was RMB 4.458 billion.

Both directors, supervisors and senior executives invest together with listed companies (applicable to investors who are directors, supervisors and senior executives of listed companies)

2. Risks faced by the company and countermeasures Risks affected by the epidemic. The sudden COVID-19 epidemic has further intensified the downward pressure on the macro economy and has a greater impact on the real estate industry and the financial industry. Although the current epidemic prevention and control situation in our country continues to improve, overseas epidemics are still intensifying and spreading. Our country is facing a significant increase in the risk of imported epidemics from overseas, and our country's economic development is facing new and greater challenges. On the premise of resolutely carrying out regular epidemic prevention and control work in accordance with government requirements, the company will make every effort to promote the orderly advancement of business in all sectors and strive to minimize the losses caused by the epidemic. Market competition risks. In recent years, with the rapid development of Guizhou's social economy, the potential and future value of Guizhou's real estate market have been highly recognized by large real estate companies across the country, and market competition has become increasingly fierce. To this end, the company will adhere to a sound business strategy, improve product quality and service quality, and consolidate the company's leading position in regional real estate on the basis of deeply exploring the market in Guizhou Province. Financial market risks. For the company, financial market risk mainly refers to the risk of unexpected losses in the company's financial business due to adverse changes in interest rates, equity prices, exchange rates, etc. The company's financial subsidiaries mainly strengthen their response through the following measures: attaching importance to macroeconomic research, prudently predicting market trends, setting safety margins, and responding in advance; proactively managing equity asset positions to keep risk exposures controllable; regularly monitoring large-scale assets Analyze historical risks and returns; focus on value management, take into account overall asset liquidity, gradually adjust the investment portfolio through new assets, so that the risk and return characteristics of the overall investment portfolio meet risk management requirements; strengthen risk monitoring and early warning, and strengthen risk emergency response manage.

3. Analysis of core competitiveness 1. Basic principles - be grateful to the Party, listen to the Party, follow the Party, and act in accordance with the laws of the market "Be grateful to the Party, listen to the Party, follow the Party, and act in accordance with the laws of the market " is the basic principle that the company has always adhered to. It is the precious spiritual wealth accumulated by the company in the process of developing simultaneously with the economy of China and the country. It is the glorious tradition formed by the company during its more than 40 years of deep cultivation in Guizhou. It has been deeply integrated into The blood of Zhongtian is everlasting; the company always closely integrates adhering to the party's leadership and strengthening party building with enterprise production and operation and employee team building to form a good policy of "same development, mutual promotion, and comprehensive improvement" Economic ecology has shaped Zhongtian's social image of "being political, taking the overall situation into consideration, abiding by laws, seeking efficiency, and being courageous and responsible".

2. Super and efficient execution. The company always pays attention to the integration of cultural construction with strategy and operation management, strives to integrate corporate culture into daily production and operation activities, takes root in the actions of employees, and carries forward the philosophy of "hard thinking, hard work style, and hard work". The "three hardships spirit" and the "three spirits" of "buttoning buttons, shouldering burdens, and nailing nails" create the "Zhongtian people" team concept of "continuous self-improvement, cooperation and win-win", forming a distinctive Zhongtian people Distinctive execution culture. 3. Pioneer thinking, the ideological source of innovation and development. As the first listed company in Guizhou, Zhongtian Financial Group has accumulated history and injected innovative genes that dare to be the first. The brand drive of creating the future and the working principle of "pioneer thinking, rigorous execution, and practical results" have become the endogenous driving force to continuously create new prospects for Zhongtian's business, and become the driving force for Zhongtian to always innovate in development, develop again in innovation, and innovate again. A powerful ideological weapon. 4. Integration ability of advantageous resources: The company leverages its resource integration ability as a regional leader, always takes root in the great cause of local social and economic development, actively fulfills its corporate citizen responsibilities, and uses its resource advantages to cover the whole country and achieve national market radiation. 5. Organizational combat effectiveness with a stable system and flexible mechanisms. The company has always insisted on building an enterprise management model that combines a "stable system with a flexible and efficient mechanism", forming a healthy organizational system full of vitality and a flexible but not loose, efficient but not The inner workings of disorder. A stable system, flexible mechanism, high efficiency and orderliness are the organizational guarantee for the company to always remain highly sensitive to the market, quickly obtain market opportunities and operate effectively.