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顺丰控股:2019年半年度报告(英文版) 下载公告
公告日期:2019-08-28

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

S.F. Holding Co., Ltd.

2019 Semi-Annual Report

August 2019

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

NoticeThe Company prepared its 2019 Semi-Annual Report in accordance with relevant regulations andguidelines set forth by the China Securities Regulatory Commission and the Shenzhen Stock Exchange,including the “Publicly Listed Company Information Disclosure Content and Format Guideline No. 3Semi-Annual Report Content and Format,” the “Shenzhen Stock Exchange Listing Rules,” the “ShenzhenStock Exchange Standard Operating Guidelines for Small and Medium Enterprises,” and the “Small andMedium Enterprise Information Disclosure Memorandum No. 2 – Matters Related to Periodic Disclosures.”The Company's 2019 Semi-Annual Report was prepared and published in Chinese and the English versionis for reference only. Should there be inconsistency between the Chinese version and the English version,the Chinese version shall prevail. Investors can access the Company's 2019 Semi-Annual Report on Cninfo(www.cninfo.com.cn), which is designated by the China Securities Regulatory Commission for Publishingthe Semi-Annual Report.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Chapter 1 Important Information, Table of Contents, and DefinitionsThe Company's Board of Directors, Supervisory Committee, directors, supervisors, and senior managementhereby guarantee that the contents of the Semi-Annual Report are true, accurate, and complete, and that there areno misrepresentations, misleading statements, or material omissions, and shall assume individual and joint legalliabilities.

Wang Wei, the Company's responsible person, NG Wai Ting, the person in charge of accounting work, andWang Lixiu, the person in charge of the accounting department (accounting officer), hereby declare and warrantthat the financial report within the Semi-Annual Report is true, accurate, and complete.

All directors have attended the Board meeting approving the Semi-Annual Report.

Forward-looking statements such as future development plans in this report do not constitute the Company'spromise to investors. Investors are advised to invest rationally and to take into account possible investment risks.

The Company is required to comply with the disclosure requirements presented in the Shenzhen StockExchange for Industrial Information Disclosure No.9 – Listed Companies Engaged in the Express DeliveryServices Business.

In this Semi-Annual Report, the Company details the possible risk factors and countermeasures that mayoccur in the future. For more information, refer to “Section X. Possible Risks and Countermeasures” in “Chapter 4.Management Discussion and Analysis of Business Operation.” Investors shall refer to this information.

The Company does not plan to issue cash or equity dividends, nor to convert equity reserve into share capitalof the Company.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Table of Contents

Chapter 1 Important Information, Table of Contents, and Definitions ...... 4

Chapter 2 Company Profile and Key Financial Indicators ...... 7

Chapter3 Business Overview ...... 10

Chapter4 Management Discussion and Analysis of Business Operation ...... 43

Chapter 5 Significant Events ...... 77

Chapter 6 Share Changes & Shareholder Details ...... 102

Chapter 7 Preferred Shares ...... 107

Chapter 8 Directors, Supervisors and Senior Managers ...... 108

Chapter 9 Corporate Bonds ...... 109

Chapter 10 Financial Statements ...... 110

Chapter 11 List of Documents Available for Inspection ...... 277

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

DefinitionsTerm DescriptionReporting period January 1, 2019 to June 30, 2019The same period ofprevious year

January 1, 2018 to June 30, 2018The Company, The listedCompany, SF Holding

S.F. Holding Co., Ltd., formerly known as Maanshan Dingtai Rare Earth and New

Materials Co., Ltd. After completing a major asset restructuring (as defined below) in

December 2016, it was officially renamed to S.F. Holding Co., Ltd. in February 2017.RMB Renminbi yuanMingde Holding

Shenzhen Mingde Holding Development Co., Ltd., the controlling shareholder of S.F.

Holding Co., Ltd.Dingtai New Materials

Maanshan Dingtai Rare Earth and New Materials Co., Ltd., The predecessor of S.F.

Holding Co., Ltd., it was renamed to S.F. Holding Co., Ltd. in February 2017.Taisen Holding

Shenzhen S.F. Taisen Holding (Group) Co., Ltd., a subsidiary of S.F. Holding Co.,

Ltd.Shunda Fengrun Ningbo Shunda Fengrun Investment Management Partnership (Limited Partnership)Jiaqiang Shunfeng Jiaqiang Shunfeng (Shenzhen) Equity Investment Partnership (Limited Partnership)Zhaoguang Investment Shenzhen Zhaoguang Investment Co., Ltd.Oriza Shunfeng

Suzhou Industrial Park Oriza Shunfeng Equity Investment Company (Limited

Partnership)Guyu Qiuchuang Suzhou Guyu Qiuchuang Equity Investment Partnership (Limited Partnership)Shunxin Fenghe Ningbo Shunxin Fenghe Investment Management Partnership (Limited Partnership)Major asset restructuring

In December 2016, all assets and liabilities (exchange-out assets) of the Company's

predecessor, Dingtai New Materials, was replaced with the equivalent 100% equity

(exchange-in assets) of Taisen Holding held by all shareholders of Taisen Holding as

of December 31, 2015. The difference between the exchange-in assets and the

exchange-out assets was purchased by Dingtai New Materials, the Company's

predecessor, from all shareholders of Taisen Holding, in the form of issuing shares.The restructuringcounterparties

Shenzhen Mingde Holdings Development Co., Ltd., Ningbo Shunda Fengrun

Investment Management Partnership (Limited Partnership), Jiaqiang Shunfeng

(Shenzhen) Equity Investment Partnership (Limited Partnership), Shenzhen

Zhaoguang Investment Co., Ltd., Suzhou Industrial Park Oriza Shunfeng Equity

Investment Company (Limited Partnership), Suzhou Guyu Qiuchuang Equity

Investment Partnership (Limited Partnership), and Ningbo Shunxin Fenghe Investment

Management Partnership (Limited Partnership)Exchange-out assets

All assets and liabilities of the Company's predecessor, Dingtai New Materials, as of

December 31, 2015.Exchange-in assets 100% equity of Taisen Holding as of December 31, 2015.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Chapter 2 Company Profile and Key Financial IndicatorsI. Company ProfileStock Abbreviation SF Holding Stock Code 002352Listed Stock Exchange Shenzhen Stock ExchangeChinese Name of the Company顺丰控股股份有限公司Chinese Name Abbreviation ofthe Company

顺丰控股English Name of the Company S.F. Holding Co., Ltd.English Name Abbreviation of theCompany

SF HoldingLegal Representative of theCompany

Wang Wei

II. Contacts and Contact Methods

Board Secretary Securities Affairs RepresentativeName Gan Ling Zeng JingAddress Wanji Business Building, Xinzhou 11th Street,

Futian District, Shenzhen, Guangdong Province

Wanji Business Building, Xinzhou 11th Street,Futian District, Shenzhen, Guangdong ProvinceTel No. 0755-36395338 0755-36395338Fax 0755-36646400 0755-36646400Email sfir@sf-express.com sfir@sf-express.com

III. Other Information

1. Corporate Contact Information

Were there any changes to the Company's registered address, office address or postal code, company website, or tothe email address during the reporting period?

□ Yes √No

There were no changes to the Company's registered address, office address or postal code, company website, noremail address during the reporting period. Refer to the Company's 2018 Annual report for details.

2. Information Disclosure and Location of Report

Were there any changes to information disclosure and location during the reporting period?

□ Yes √No

There were no changes to the name of the newspaper designated for information disclosure, to the address ofwebsite designated by the China Securities Regulatory Commission for semi-annual report publication, nor to thestorage location of company's Semi-Annual report during the reporting period. Refer to the Company's 2018Annual report for details.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

IV. Key Accounting Information and Financial IndicatorsDoes the Company need to adjust its financial information retrospectively or restate its previous year accountinginformation?

√Yes □No

Rationale for retrospective adjustments or restatements

Business combination involving enterprises under common control

Current reporting

period

The same period of previous year

Increase/Decrease over

the same period of

revious yearBeforerestatements

Afte

p
r

restatements

Afte

restatementsRevenue (RMB) 50,074,704,033.8542,503,599,511.9342,550,906,755.42 17.68%Net profit attributable to shareholders ofthe parent company (RMB)

3,101,111,638.632,233,730,274.212,209,579,126.20 40.35%Net profit after deducting nonrecurringprofit or loss attributable to shareholdersof the parent company (RMB)

2,330,310,116.432,090,372,413.372,090,372,413.37 11.48%Net cash flow from operating activities(RMB)

4,816,886,549.682,280,581,118.962,369,608,790.80 103.28%Basic earnings per share (RMB/share)

0.700.510.50 40.00%Diluted earnings per share (RMB/share) 0.700.510.50 40.00%Weighted average return on net assets 8.23%6.67%6.57%

an increase of1.66percentage points

End of the currentreporting period

End of previous year

Increase/Decrease over

rp

revious year endBeforerestatements

Afte

p
r

restatements

Afte

restatementsTotal assets (RMB)81,037,279,531.3071,614,568,816.6471,614,568,816.64 13.16%Total equity attributable to shareholders ofthe parent company (RMB)

38,405,163,518.7136,561,011,876.1536,561,011,876.15 5.04%

V. Differences arising from accounting standard of the PRC and the International AccountingStandards

1. Differences between net profits and net assets disclosed in the financial reports in accordance with

Chinese accounting standards and international accounting standards

□Applicable √Not applicable

There is no difference between the net profits and net assets disclosed in accordance with Chinese accountingstandards and those disclosed in accordance with international accounting standards in the reporting period.

2. Differences between net profit and net assets disclosed in the financial reports in accordance with

Chinese accounting standards and overseas accounting standards

□Applicable √Not applicable

There is no difference between the net profits and net assets disclosed in accordance with Chinese accountingstandards and those disclosed in accordance with overseas accounting standards in the reporting period.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

VI. Non-Recurring Profit or Loss

√Applicable □Not applicable

Unit: RMBItem Amount NoteGains on disposals of non-current assets (includingoffsetting amount for the provision of impairment of assets)

315,373,555.74

The amounts of such gains during thefirst half year of 2018 and 2017 are of83,365,835.91 and -16,019,009.67respectively. The amount for thecurrent period mainly represents theinvestment income from disposal ofsubsidiaries.

Government grants recognized in profit or loss for thecurrent period (excluding government grants that areclosely related to the Company's business operations, inaccordance with national uniform standards)

175,408,699.42

It mainly represents governmentsubsidies arising from fiscalappropriation, transportation capacitysubsidies and tax refund, etc.

Gains or losses from changes in fair value of financialassets and liabilities held for trading, derivative financialassets and liabilities, and investment (losses)/gains arisingfrom the disposal of financial assets and liabilities held fortrading, derivative financial assets and liabilities and otherdebt investments, excluding hedging activities related to thenormal business operations of the Company

347,394,450.91

The amounts of such gains during thefirst half year of 2018 and 2017 are of-7,644,717.08 and -2,857,548.88respectively. The amount for thecurrent period is mainly attributable tothe gains arising from changes in fairvalue of other non-current financialassets.Net amount of other non-operating income and expenses10,683,463.79

Less: Income tax effect78,025,730.22

Profit or loss attributable to minority shareholders(after tax)

32,917.44

Non-recurring profit or loss attributable to shareholders ofthe parent company

770,801,522.20--

Provide explanations for classifying non-recurring profit and loss items defined in the Explanatory AnnouncementNo. 1 for Public Company Information Disclosures – Non-recurring Profits and Losses, and for classifyingnon-recurring profit and loss items listed in the Explanatory Announcement No. 1 for Public CompanyInformation Disclosures – Non-recurring Profits and Losses as recurring profit and loss items.

□Applicable √Not applicable

The Company has not classified non-recurring profit and loss items defined or listed in the ExplanatoryAnnouncement No. 1 for Public Company Information Disclosures – Non-recurring Profits and Losses in thereporting period.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Chapter3 Business Overview

I. Primary business of the Company during the reporting period

Is the Company required to comply with disclosure requirement of a particular industry?YesExpress Delivery Service Industry

SF Holding is a leading integrated express logistics service provider in China. After years of development, ithas basically established the capabilities of providing integrated comprehensive logistics solutions to customers.Not only does it provide high quality logistics services from the delivery end, it has also extended its services tosegments of production, supply, sales and distribution in the front-end of the value-chains, and catered to consumerdemand by using data technologies such as big data analysis and cloud computing to provide customers withcomprehensive solutions including warehousing management, sales forecasting, big data analysis and. The logisticsproducts of the Company mainly include various types of express services such as express delivery, economyexpress delivery, intra-city delivery, warehousing service and international express delivery; express transportationservices focused on LTL (less than truckload) service; and cold chain transportation services for customers in thefresh produce, food products and pharmaceutical segments. Moreover, SF Holding also provides value-addedservices such as insurance and Cash on Delivery (COD) as well as diversified and refined services to customers.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Based on the diverse needs of different industries, customers and scenarios, SF Holding adheres to the“customer-centric, demand-driven and experience-based” product design philosophy that focuses on eachindustry’s unique characteristics, and starts from the application scenarios of customers to drill into theirrequirements for different use cases within the end-to-end whole process and other individual requirements ofcustomers. Thus SF Holding is able to design suitable products, services and solutions for customers while creatingvalue-added differentiation, and such product design in turn drives internal resource allocation and optimizes theproduct system. SF Holding continues to enhance the competitiveness of its service quality by providing customerswith experience of fast product delivery and high service quality; continues to optimize operation model andenhance resource efficiency while reducing costs and increasing efficiency, providing customers with cost-effectiveservices and achieving win-win for the Company and its customers. Meanwhile, SF Holding enables productinnovation with technologies to create industry solutions and provide customers with integrated comprehensivelogistics services.

SF Holding is also a smart logistics operator with network scale advantages. SF Holding has a gigantic logisticsnetwork at home and abroad, including an “aviation network” consisting of all-cargo aircraft, commercial flight anddrones; a “ground network” consisting of operating service points, transit and distribution service points, landtransportation networks, customer hotline networks, and last mile networks; and an “information network”consisting of various types of big data, blockchain, machine learning and planning optimization, AI recognition forvoice/image/computer graphics/smart security checks and smart logistics map. The three networks are integratedinto one “aviation +ground + information” network. This directly operated network has domestic and overseascoverage and is a comprehensive logistics network system with the most powerful network control, the higheststability, and the most unique resources in the industry domestically.

SF Holding adopts a direct operation model. The headquarter implements centralized operation andmanagement of all branch offices. It also centralizes collection, delivery, distribution, processing, transit andtransportation, and allocates network resources according to the actual needs of business development. Meanwhile,SF Holding uses a large number of information technologies to ensure that the entire network implements uniformstandards, and has established a number of industry-leading business information systems to ensure the quality ofoverall network operations. SF Holding is currently the first express delivery A-share company that adopts the directoperation model.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

II. Major Changes in Key Assets

1. Major Changes in Key Assets

Key Assets Description on major ChangesAccounts receivables

Increased due to increase in revenue.Other current assetsIncreased due to increase in wealth management products.

Equity assetsNo major changes.

Available-for-sale financial assets

In accordance with new standards for financial instruments , “available-for-sale financial

assets” has been reclassified to “Investments in other equity instruments” and“other

non-current financial assets”for the current period.

Investments in other equity instruments Same as the above explanation for available-for-sale financial assets

Fixed assetsIncreased due to the addition of aircraft, accessories and buildings.

Construction in progressNo major changes.

Intangible assets

Increased due to the recognition of intangible assets arising from business combination

and completion of self-developed software.

GoodwillIncreased due to the business combination.

2. Key Overseas Assets

√Applicable □Not applicable

Details ofAssets

Method ofFormation

Asset Size(RMB)

Location

OperatingModel

Controls

Net Profits(RMB)

Proportion ofCompany'sNet Assets

SignificantRisk ofImpairment?CHUI YUKHOLDINGLIMITEDand itssubsidiaries

Acquisition 3,935,315,496.90Hong Kong

Industrial

park

— 20,186,497.53

10.25% No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

III. Core Competitiveness Analysis(I) Extensive technological capabilities contribute to its unique core competitiveness in the industry

(I) Extensive technological capabilities contribute to its unique core competitiveness in the industry

SF Holding continues to emphasize on and proactively invests in the construction of its various smart logisticsinfrastructures, aiming to develop into a technology-driven industry solution service company with itstechnology-led, innovation-driven, extensive operation and active exploration business model.

In terms of talents, as of the end of the reporting period, SF Holding employed more than 5,000 technologystaff, including outsourced labour, which is with a good talent structure. Regarding cooperation with universitiesand enterprises, in 2019, apart from maintaining close cooperation with universities at home and aboard, includingGeorgia Institute of Technology in the United States, Harbin Institute of Technology and Beijing University ofAeronautics and Astronautics, the Company also successively established cooperation relations with many famousuniversities at home and abroad such as Shanghai Jiao Tong University, Xi'an Jiaotong University, ShenzhenFinance Institute etc. to further integrate diverse internal business scenarios with professional academic expertise,striving to realize rapid upgrade of technological capabilities in core areas of big data, blockchain, operationoptimization, drones and robots. In addition, the Company specially invited top-notch experts and professors fromrenowned academic institutions such as Stanford University, University of California, Berkeley and NanjingUniversity as well as industry experts to deliver lectures or exchange ideas for continuous exploration in areas ofinnovation and research of smart logistics technologies, so as to accelerate implementation and application ofindustry-leading technologies in area of smart logistics.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

In terms of technology, in the first half of 2019, SF Holding continued to enhance investment in research anddevelopment technologies in areas such as big data and products, artificial intelligence (AI) and application, precisemap platform, smart equipment, intelligent hardware and integrated logistics solutions, which yielded stableenhancement of its scientific capabilities. By the end of the reporting period, SF Holding had a total of 1,982 patentsand 854 copyrights awarded or under application. The number of invention patent applications in the first half of2019 accounted for 60% of the total. At present, in terms of the number of patents held, SF Holding ranks first in thedomestic express delivery industry, and it is actively preparing for international patent applications. The utilizationof technologies and patent development strategy will effectively maintain SF's competitive strength in logistics andrelated fields.

SF Holding’s major projects of smart logistics include:

1. Big data and blockchain technology application

(1) Big data ecosystem construction

As of the end of the reporting period, on the basis of continuous optimization of data collection and integration,desensitization and security mechanisms, machine learning and data visualization, automated operationmaintenance and scheduling platforms, SF Holding further supported the business expansion in various businesssegments of the Company including delivery, warehousing, freight, cold chain as well as pharmaceuticaltransportation, international express, supply chain, with the amount of business data collected surpassing 35PBlevel and the amount of average daily computation surpassing 1PB.

On the basis of established products and services of big data, SF Holding significantly reduced its investmentcost in hardware resources through continuous technology optimization and experience upgrade; incorporatingcomputer vision technology, the Company has built the Internet of Vehicles (IoV) solution to realise intelligentmonitoring of driving behaviors of drivers; through applying big data and AI technology in more than 20 projects,the Company has greatly improved its operation and management efficiency, realized digitalized management ofthe entire network, and further guaranteed SF's commitment of timeliness to customers while reducing cost andenhancing efficiency for various business lines including operation, markets, human resources, finance andproperty.

In 2019, SF’s Big Data Platform was granted the “Best Practice Case of Big Data” award from the Ministry ofIndustry and Information Technology (MIIT), while the Data Beacon won the first prize of the first year of Scienceand Technology Award in the postal industry. Through big data-enabled smart transformation of cooperativeenterprises, SF Holding has laid out and implemented scenario-based intelligent big data solutions in many areassuch as fresh produce retail, telecommunications and energy, and has also realized digitalization transformation andupgrade for customers in traditional industries.

(2) Blockchain technology application

With the development of blockchain technology, SF Holding has successfully applied blockchain technologyin various scenarios based on its own business development requirement and strategic planning, and gradually builtup fully-engineered technical barriers for blockchains from academic papers to code, code to software, software toproducts, and products to platforms. Regarding the traceability of drugs, vaccines, and medical devices, blockchaintechnology is compatible with mainstream codes such as drug supervision code and GS1. Combined with IoT, bigdata and packaging technologies, blockchain technology helps more pharmaceutical companies and regulatorybodies achieve whole process traceability as well as quality and safety monitoring through integrating cold chainsolutions for drug supply chains and warehousing vehicles. Regarding cross-border commodity, food andagriculture industry, through self-developed anti-counterfeiting technology and blockchain encryption schemetogether with the quality control systems inside and outside of SF's ecosystem, blockchain technology providesagricultural customers with integrated solutions for intelligent agriculture consulting, logistics distribution andterminal sales to protect food safety.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

2. Smart logistics map

SF’s smart logistics map platform, based on the high-precision address platform of SF, is extensively applied tothe whole process of logistics including customer ordering, smart scheduling, transit sorting, planningtransportation, terminal distribution and operation management, providing smart location decision service moretailored to logistics scenarios. Operation iteration has created the first logistics map service product of industrialgrade in China which has become the infrastructure for the construction of SF’s digital and smart facilities.

In the area of accurate address service, SF Map leverages on big data of geographical information in dailyaverage volume of hundred million and the core technological advantages in the self-developed 18-tier Chineseaddress phrases to create an accurate smart address service platform. In the area of customer ordering, the accurateaddress service platform utilizes accurate address matching services such as two-way geographical code, addressassociation, address correction and address reachable system to assist users in completing address input andenhance the standardization level of addresses and user experience. The smart scheduling and transit sortingsegments, with the smart map routing distribution service as the core to build a closed-loop of operation withforward and reverse business data mining, form a complete set of comprehensive, efficient and accurateregionalized distribution solutions which also support diverse logistics scenarios such as “shipments from store”,front warehouse distribution and smart cloud warehouses. The smart map distribution service has innovated theprocessing model of online express parcels. Currently, the accuracy is even more than 99% under applicationscenarios of smart scheduling, transit sorting and over-range address identification for couriers of express delivery.In particular, the identification rate and accuracy of routing automatic distribution under the transit sortingscenario is close to 100% in first- and second-tier cities, aiming to create a domestic top routing network. Thedaily average request volume of the smart sorting operation carried out through SF’s “Fengme Order (丰密订单)”routing sorting code reaches hundred million times, reducing over 70% manual inspection processing volumecaused by abnormal parcels. The SF address reachable system determines the delivery service area in advance,greatly reducing the terminal transfer cost for over-range express parcels. In the area of high-precision mapservice, SF Map focuses on the planning of walking and cycling routes for the “last mile” and the breakthrough intruck navigation, predicting the required time, mileage and planned routes for logistics according to differentfreight transportation capacities to enhance the due delivery efficiency. In the area of location decision service, SFMap supports GPS, Beidou Navigation Satellite System, Wi-Fi, and base-station fusion location positioning toprovide a range of LBS logistics management decision-making services. As of the end of the reporting period, theSmart Logistics Map has managed a daily average of 700 million data for couriers’ location and 7.5 millionkilometers of ground track data; the daily average request volume of cloud services has reached 330 million andthe daily average request volume of terminal SDKs has exceeded 700 million times.

Outside SF’s logistics scenario, SF Map opens the logistics precision map service platform to cooperativepartners of the SF Group to promote digital and smart development of supply chain and retail business in the verticalsegments of petroleum and tobacco. In the areas of public security, fire safety, emergency instruction and urbanmanagement, map data fusion technology and accurate address service are provided to help government authoritiesbetter manage and operate map data by linking up data islands to enhance government decision-making capabilities,providing map technology support for construction of new-style smart cities and related areas.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

3. Smart decision-making

(1) Business demand forecasting

Precise and efficient business demand forecasting is one of the core fundamentals in the transition fromtraditional decision making to smart decision-making of the logistics industry. It is difficult for traditional demandforecasting models to support the business needs of SF Holding because of issues such as low precision, slow speedsand ineffectiveness when attempting to solve service points demand forecasting problems relating to holidays,various effects of seasonality, complicated growth trends, and seasonal product effects.

SF Holding, has built a business demand forecasting system with deep learning, machine learning and time series forecastingtechnology, that is highly compatible with characteristics of the logistics industry, to create business forecasts on hourly, daily,monthly and other dimensions, and covered business demand forecasting in areas such as receipt and delivery, transition,warehousing management, flow direction, calls of customer services centers and characteristic economy. Meanwhile, combiningadvanced data model as well as algorithm technology and information platform development technology, SF has also built abusiness demand forecasting platform which can help data scientists and engineers complete model deployment promptly, deductlabor cost for model development and support large-scale data forecasting effectively and smoothly. Through historical time seriesdata backtesting, the platform automatically selects the most appropriate model and parameter combination, greatly reducingdevelopment time length and version iteration cycle while responding to business change in a timely manner. The platformcontains various model libraries to meet different timing characteristics and diverse business scenarios. Currently, it has providedforecast data which covers 100% of the service points in the entire network. In particular, flow direction forecasting providesforecasting for receipt and delivery, flow directions in cities, product groups as well as heavy section to support resource planningin peak time.

Currently, this service has been used to support business scenarios such as manpower planning, smartscheduling and task dispatch at peak periods to help resource allocation for different business periods, so as toreduce costs and improve efficiency.

(2) Site selection programming

In the logistics industry, selecting appropriate location of operation centers is crucial to the efficiency andoperation cost management of the entire logistics network. Traditional site selection of the logistics industry iscarried out with manual calculation and experience-based reasoning, which has problems such as insufficientsupport by data and logic, poor performance on scientific decision-making, and being labor intensive andtime-consuming.

SF Holding has established a site selection planning system for the logistics industry by using big data,operation research algorithms and machine learning technology in light of constraints in actual business scenarios,fully considering various factors such as site function positioning, transfer capability coordination, customerexperience and site costs. Meanwhile, SF Holding has also constructed a high-standard and visualized informationsystem that can support site planning and operation management, to assist the Company in planning and makingdecision of investment and management through online streamlining process and model intelligent recommendationscience. The system also develops a complete data display monitoring system through which details of site selectionplans with site layout can be seen at a glance in the form of visual display, and real-time monitoring can be carriedout after the plan is implemented, thus reducing consuming of manual labor as in traditional site selection approachand improving the operational efficiency of the enterprise.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

(3) Intelligent network and route planning

SF Holding has already built a versatile system consisting of a comprehensive network and route planningalgorithm that can be applied in various business scenarios. This system, integrating models of network design,route planning, resource optimization and random simulation, helps improve the timeliness and reduce cost intransportation. The network design and resource optimization models output corresponding network structure andconfigure capacity and operational resources based on specific logistics product requirements together with variouskey indicators of network such as timeliness, cargo capacity and node processing capability.

Transit model design: The network and route planning system optimizes the partition load in the transit depotbased on integration of inbound and outbound flows, location allocation optimization, and warehouse inventoryoptimization so that collection and distribution is more efficient.

Transportation route planning: An example is SF’s intra-city high-speed network project(顺丰同城高速网项目) which requires to manage large number of orders during peak hours with tight timeliness.Therefore, according to the characteristics of the intra-city high-speed network, the project draws on thehub-and-spoke network structure to propose a multi-level network structure that selects the distribution points fromthe network points and selects the transit points from the distribution points to ensure delivery items convergence,reduce vehicle input and improve operating efficiency of vehicles. The project, which has been implemented inShenzhen, has planned a new set of routes for feeder transportation for the inter-city business in Shenzhen. Throughreasonable planning of driving routes and meeting certain limitations, the project has enhanced the timing efficiencyof express delivery in the overall connection network while reducing vehicle transportation cost for express deliveryfor the purpose of minimum cost, time consumption and distance. With the same standard of time efficiency,intra-city delivery speed is accelerated greatly with the implementation of this project.

(4) Smart staff scheduling

Smart staff scheduling aims at optimizing staff management by creating a platform that can make all staff andshift related information accessible online by using cutting-edge technologies such as operation planning andmachine learning, and then automatically generate the scheduling results according to the historical off-linescheduling results and more importantly, automatically generate the optimized staff scheduling results, in order toenhance employee utilization and reduce staff management costs. As a result, the staff arrangement is more optimaland flexible and resource planning is more scientific.

(5) Digitalised management

With SF's huge daily average business volume, the logistics transit segment is crucial and efficient transfer ofexpress parcels must be ensured in order to better provide customers with fast, safe and efficient logistics services.SF Holding has built a digitalized transit operation platform for different business scenarios at gateway hubs.Through operation algorithm and machine learning technology, pre-preparation, in-process early warning andpost-analysis are carried out for comprehensive monitoring of various operation processes, while digitalisedoperation solutions, core data-based analysis and panoramic perspective of core resources are provided to realizeexpress lifecycle management, enable intelligent decision-making and accelerate online and intelligent informationand resource management, hence driving transformation of traditional management models. As of the end of thereporting period, digitalised management has been implemented at 100+ sites in SF.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

4. Computer vision

Through comprehensive utilization of computer vision, deep learning and other technologies, video andpictures relating to parcels, personnel, vehicles and sites in logistics scenarios are analyzed. The smart vision systemis able to detect the working status of personnel, track the trajectory of parcels and vehicles as well as predictingabnormal behaviors so as to realize smart management and deployment of personnel, vehicles, and sites, etc. It canalso effectively prevent damage to parcels and increase the efficiency of site operation. The overall solution includessubsystems for vehicle operation analysis, site 6S management, personal appearance and behavior detection, wholeprocess of cargo traceability, parcel volume measurement, X-ray illegal contraband detection and high-precisionmap information recognition for segmentation of different business scenarios and automatic analysis of varioustypes of image and video information to clear information black holes for smart logistics.

(1) Image recognition

Text recognition solution: The OCR platform has integrated several Chinese character recognition applicationsincluding handwritten paper delivery order, identity card, business license, and general photographic recognition.These applications can recognize specific handwritten or printed text lines by photos in different complexbackgrounds, which help dramatically improve the efficiency of manual inputting work. At present, the platformhas been applied for long-term use in various internal projects within the Company while enabling externalcustomers to provide industry solutions.

Smart traffic solutions: Due to the demand for high-precision map information in the logistics industry, SF hasdeveloped a set of traffic information identification technologies. The products have realised collection of trafficinformation for road and district areas automatically during the parcel delivery process. Several sub-projects areincluded, such as traffic sign detection and recognition, detection of traffic lanes and district buildings as well asshop POI information among others. Traffic sign detection and traffic lane detection can not only be integrated intothe driving assistance system, but also can be utilized in route planning and help vehicles make decisions in findingaccessible route. District building name detection and shop POI information detection, on the other hand, can beutilized for collecting several types of information including district name, building number, shop name and so on.At the same time, the product is able to calculate GPS information within a deviation of 30 meters and automaticallyaccomplish the map labeling to further help and refine high-precision map. The system has been put into trialoperation in several cities, saving 99% of the manpower verification costs.

Safe driving platform: ADAS and DMS equipment are installed on operating vehicles to collect environmentaldata inside and outside of the vehicles in the first instance for identifying and tracking static and dynamic objects, sothat drivers can notice possible dangers, making proactive alarms to arouse attention and improving safety as soonas possible. Alarm information will be uploaded to the safe driving platform, and driving behaviors of drivers areanalyzed and evaluated, while corresponding training and learning plans will be formulated to continuously increasesafety consciousness and driving skills of drivers, thereby reducing traffic accidents. For drivers at the receiving end,by installing cameras on express delivery cars, illegal driving behaviors of couriers can be identified and alarmedwhich can improve employees’ safety precautions and reduce loss of lives.

X-ray contrabands identification: X-ray images are identified through deep learning to automatically detectcategories of items passing through security check machines, and then identify contrabands. This measure canimprove the performance of security checks by 3 times, with recall rate and accuracy rate that are 9 times and 1.5times respectively relative to manual security checks, thereby reducing significant systemic risk caused bycontrabands.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Smart retail solutions: Involving all links of people, goods and sites, the solutions meet the demands of theretail industry and brand manufacturers for tracking and inspecting real-time sales and customer flow status in saleschannels and sites. By installing cameras at key locations in stores, statistical analysis can be performed on attributesof people such as flow, gender, age, hairstyle and clothing style of customers, while shelf product identification canautomatically count and replenish goods on shelves. Regarding sites, store location and store display, etc. are guidedthrough machine visions. Meanwhile, the solutions can also provide couriers with crowdsourcing services andundertake the routing inspection tasks of brand manufacturers under retail environment in various regions, greatlyimproving inspection efficiency.

(2) Video recognition

The “AI Argus (慧眼神瞳)” with independent product trademarks, patents and software copyrights(hereinafter “Argus”) is the first domestic IVA (Intelligent Video Analysis) industry product independentlyresearched and developed for the logistics industry in China. It can monitor various types of violence andnon-compliant operations in operating sites in real-time and as a result of effectively reduce the probability ofdamaged and lost items. It provides base data for the entire network including parcels traceability, loading ratedetection, vehicle scheduling, transportation capacity monitoring, and staff efficiency analysis. Continuousfeedbacks like real-time loading rate data of all vehicles in respect of express delivery and express transportationtrunk/branch routes promote optimization of transportation capacity and cost, provide full-process image and videosegment query capabilities based on package number, realise standardized business process management, site 6Smanagement in the field of the entire network and eliminates management blackholes.

The LPSS (Loading Procedure Structuring System) subsystem, in particular, automatically features vehiclelicense plate recognition, vehicle arrival/departure time starting and ending event detection for loading andunloading, instant volume loading rate and staff efficiency analysis through analyzing the monitoring screen ofcameras at the loading and unloading ports. LPSS enables digital recovery of the business scenarios at ports andprovides supporting fundamental data on vehicle deployment, transportation capacity monitoring, and staffefficiency analysis of the whole network to decrease cost and enhance efficiency.

The VAPD (Violated Action Pattern Detection) subsystem is the algorithm entity for the employees in thelogistics industry such as sorting center and distribution center that can assure package is transported in a standardmanner. After deploying AI Argus, the venue data show that the number of damaged items in express transportationdropped significantly by46%, and stabilized in a low-level range with no abnormal fluctuations.

The PLTS (Package Lifecycle Tracking System) subsystem is the world's first information system forfull-scale video segmenting and image tracking of express parcels. Through matching video data of 310,000cameras with the operation of barcode scanner, the position of express parcels in each operation segment can befound, while anomalies can be checked and identified through inquiry of waybill numbers or vehicle numbers. Thetime efficiency of verifying and positioning issues can be improved by 2 times, while damage rate can be reduced bymeans of management. Through collection of high-definition pictures of express parcels by industrial cameras,intelligent detection of outer packaging damage, replacement of outer packaging and non-compliant stickers can becarried out for real-time detection and timely intervention processing to reduce occurrence of damages. With acapacity which is 5 times that of manual detection, intelligent damage detection can detect damage that is difficult tobe detected by naked eye and has significant detection results for penetrating damage, damage through wetness,wrinkles/indentations.

The EIAS (Employee Image Assurance System) is mainly used in terminal points by using intelligent imageanalysis technology to help business management department enhance the quality and image of employees, and tomonitor whether the decoration standards and operating environment of service points and sites and other outdoorfacilities in the city meet the standards. Through supervision of vehicle image, safety of transportation vehicles isguaranteed and personal safety of transportation personnel is ensured. The control of package image contributes toreduction of additional operating costs due to illegal packaging.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

By analyzing the monitoring screen of the camera, the 6SPD (6S Pattern Detection)system automaticallyidentifies whether the image of the site meets the standard and whether the tool is positioned as well as providingfire prevention and anti-theft early warning monitoring and real-time alarm of aggression. With service target thatcan extend to different industries, the product can improve and enhance corporate image, ensure safe production ofenterprises and reduce production costs, achieving network-wide standardized business management andeliminating management blackholes.

(3) 3D perception

Weight and volume have always been the most fundamental elements in the logistics field, for which SFHolding has launched the “Insta 3D”, a solution for volume measurement scenarios. In the collection and deliveryprocess, Insta 3D has solved the problem of manual volume measurement by couriers. Not only can the solution beused to measure regular shape boxes, it can also be used to measure irregular shape boxes the whole process ofwhich can be completed within 2s. Comparing with manual measurement by rulers which takes about 30s, Insta 3Dhas reduced measurement operation such as manual data input quickly and accurately, thus greatly improving workefficiency.

5. Automatic sorting devices

Based on the fully independent research and development capabilities that have been developed in SFHolding, smart automatic sorting devices for express transit come as the first step of modern express. Positiveeffects have appeared in SF Holding through the deployment of smart automatic sorting devices: the 24-hourcontinuous high-speed processing of parcels has been achieved, the transit processing efficiency has beenenhanced effectively, the sorting error rate has been reduced and the service quality has been improvedsignificantly.

Currently, a variety of smart automatic sorting systems that are low-cost, highly reliable, highly customizedand modularized, which have been massively deployed in transit fields, have been developed for variousrequirements in different business scenarios by SF Holding. Issues such as the hardware, the mechanical structure,the control algorithm, and the software are all designed independently during the development of smart automaticsorting systems. Particularly, a product series of linear/circular cross-belt sorting system with high applicability,whose processing capacity covers from 10,000 pieces/hour to 18,000 pieces/hour and the allowed number ofsorting direction is between 40 and 360, has been developed for sorting small packages. As for the hybrid scenariowith single delivery items and others with or without destination information, a product series including thebalance-wheel sorting system and the module-belt sorting system, which can be constructed by customizedmodules for different business models, is developed. Meanwhile, the information flow and data flow of equipmentcan be integrated effectively due to the independent development of smart automatic sorting devices, benefitingfrom which a centralized control and data processing deployment platform for multiple types of equipment can beachieved in the near future.

Meanwhile, SF Holding keeps ongoing model innovation, with its high-structure automatic sorting project foruse in heavy cargo sites, which is the first in China, put into operation. By realizing an unmanned sorting process forthe entire workflow of heavy cargoes, both manual strength and labour cost of operators have been reduced, filledthe gap in the area of automated technology application in the domestic heavy cargo sorting process and maintainingthe Company’s benchmark position in the industry.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

6. Smart hardware

(1) Smart Bluetooth headset

SF Holding has developed the industry's first voice assistant hardware product for the logistics industry -Xiaofeng Smart Bluetooth Headset (hereinafter referred to as "Xiaofeng") which is applied to the collection anddelivery processes. It serves the purpose of protecting customers' privacy and improving the safety and workefficiency of the couriers.

"Xiaofeng" takes voice recognition technology as the core, combines TTS voice broadcast and voice &semantic analytic ability, and activates the couriers’ daily terminal manual operation through voice instruction,which brings convenience and provides a more intelligent experience for couriers. In addition to voice interaction,“Xiaofeng” also implements the voice wake-up function; that is, the couriers can wake up “Xiaofeng” to assist thecouriers to work in a simple voice command without any manual operation. Moreover, considering couriers’ actualworking environment, "Xiaofeng" has been specifically designed to give wearing comfort and uninterrupted batterylife, and is fitted with a dual microphone for noise reduction so that excellent voice recognition can be achieved evenin extreme environments.

“Xiaofeng”, equipped with the AI assistant, can free up the hands of couriers, give real-time assistance tocouriers’ work and the original 8-10 steps manual operation was reduced to a simple voice command, furtherboosting the couriers’ work efficiency. At the same time, it supports continuous generation change and onlineupgrading according to business requirements without replacing hardware. It has high flexibility and can adapt tothe business needs of different scenarios, improves data collection for operation at the collection and delivery endand promotes the digital transformation of SF Holding.

(2) Smart hand-held terminals

The seventh-generation smart handheld terminals (HHT7) are customized based on the Android 8.1 operatingsystem. By collecting information in advance, information can travel faster than cargo while also guiding andmonitoring the flow of parcels. The high extending capability and compatibility of the terminals allow them tosupport 1st-tier and 2nd-tier employees in accessing peripherals, which are highly compatible with business needswhile allowing on-demand configuration. In addition, the terminals’ features include industrial-grade securitystandards, updated designs, and convenient human-machine interactions.

Currently, SF Holding has already completed the promotion and implementation of over 150,000 HHT7throughout the entire network. Compared with the sixth-generation smart handheld terminals, there are severalupgrades and improvements including in mobile internet comprehensiveness, high-speed mobile scanning, andoperating system optimization. Meanwhile, the accessories adopt compatibility design that saves R&D andcertification costs while reducing management.

(3) Smart locks

The smart locks independently developed by SF Holding can decrease the level of investment in traditionaldisposable car seals and mechanical padlocks, allowing keyless management, energy saving and environmentprotection while reducing operating costs. Meanwhile, as carriers of data, smart locks enable seamless connection ofexpress mail routing information, thus the goals of digitizing task transfer, standardizing processes and improvingoperation efficiency can be achieved.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

7. Logistics drones

SF Holding has a comprehensive plan for massive deployment of logistics drones for commercial purposes. Itaims at building a standard management system for the R&D, flight-testing, and operations of logistics drones undervarious complex scenarios to complement the existing transportation capacity of the company and extend servicecoverage. Logistics drones are expected to carry out transportation tasks across mountains and rivers, achievepoint-to-point transportation and even asynchronous handover, and resolve transportation challenges in variousspecial scenarios. The independent drone R&D team has mastered the core technology of logistics drones. Thenumber of patents under application or already granted exceeded 300, approximately 50% of which are inventionpatents, covering drone design, cloud platform, operation management, and other logistics drone development andapplication-related fields. These outstanding achievements include multi-copper and VTOL fixed-wing drones,core avionics systems, ground control systems, and communication systems. On the production side, throughcooperation with domestic and foreign advanced drone manufacturers, SF has produced a variety of civil droneswith different loading capacities and flight distances for different geographical locations and operating scenarios.

The Company hopes to connect its aviation logistics networks to the trunks and feeders of its hubs throughlogistics drones, providing aviation network coverage for cities categorized as third-tier and below, thus greatlyimproving logistics efficiency. In the near future, express parcels are expected to arrive at any places throughout thecountry within 36 hours by a three-segment air transport network inter-woven by “Mainline cargo freighters+ Trunkto feeder large UAV+ End delivery small drones”, covering complex terrain and remote areas.

(1) Drone express logistics customized solution

For the end delivery and transportation scenarios, SF Holding has customized the drone express solutions tomeet the needs of various regions, established a logistics drone testing, production and operation system andmastered the key technologies and production processes of logistics drones. A number of drone models have beendeveloped including H4, Ark, Manta Ray, C37, covering multi-rotor and vertical take-off and landing fixed-wingdrones, which are capable of delivering parcels of up to 10kg within 100km. These drones can perform verticaltake-off and landing and thus runways are not required. Besides they are easy to operate and cost little.

In terms of communication and control, SF Holding has developed a logistics drone communication basestation and an operation management and ground control system, which support the building of a largecommunication network and centralized management and dispatching. The operation captain can monitor the statusinformation of all logistics drones in the service area in real-time in the dispatching center, and dispatch and controlthe drones according to business needs. The SF Holding end delivery drone has formed a replicable model whichcan be further expanded. The farm fresh delivery and regional specialty products distribution projects in GanzhouCity of Jiangxi Province and Ganzi Autonomous region of Sichuan Province have been put under regular operation.

(2) Operation management and ground control system

Logistics drone operation management and ground control system is an intelligent dispatching systemdeveloped for airspace applications. The system not only has basic functions such as route management, dronestatus monitoring and job dispatching, but also can automatically assign drones model and batteries according to therequirements of specific tasks and based on the performance of various drones and route environment informationwhile ensuring completion of missions and flight safety. Therefore human errors and resource wastage are basicallyavoided. In addition, the ground control system collects operational data and performs calculations, and thus canbacktrack the operational process and perform statistical analysis on the traffic volume. These operational data willform a part of SF logistics big data for the building of big data ecosystem.

SF Holding has established a standard data format and information interface for the operation and groundcontrol system. It can be used as part of the civil aviation information and control platform in the future, laying asolid foundation for the future integration of airspace operations.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

(3) Obtaining policy support from the government

In August 2017, SF was assigned the first “UAV Logistics Distribution Pilot Project” by the Civil AviationAdministration of China in Nankang District, Canzhou City, Jiangxi Province, on March 27, 2018. It was the firstnationwide drone airspace operation (pilot project) license granted by the Civil Aviation Administration of ChinaEastern Region Administration, marking the official commercial application of China's logistics drones. Afternearly two years of drone logistics distribution pilot application, SF Holding has gained some technologicalexpertise and operational experience. Complying with the principle of unified development advocated by the CivilAviation Administration of China, SF Holding has gradually formed a replicable operation model which can beapplied elsewhere. In 2019, SF Holding continued its efforts in government-enterprise cooperation, drone logisticsdistribution pilot application, flight airspace, and strived for policy support from the government, civil aviationsector, and air force.

In order to accumulate more operational experience of various complex operational scenarios, promote thedevelopment of drone operation and airworthiness standards corresponding to different operating risks, and providehigh-quality logistics and poverty alleviation services for the most urgently needed people in distressed areas, SFHolding extend operations to remote areas of ethnic minorities in the western part of Sichuan Province and northernYunnan Province to carry out pilot work on plateaus, and try to solve the issues related to logistics drones in remoteareas of plateaus. At present, it has obtained approvals and supports from the Sichuan Provincial Government, theCivil Aviation Administration of China Southwestern Region Administration, and the Ganzi Autonomous RegionGovernment of Sichuan Province. The relevant infrastructure, operation sites and supporting facilities have beencompleted. SF Holding has been approved to operate in the airspace in the southwestern region of Sichuan GanziTibetan Autonomous Region, Aba Tibetan and Qiang Autonomous Region, Yunnan Diqing Tibetan AutonomousRegion and other parts, covering more than 30 cities and counties, benefiting more than 2.5 million poor people.

(4) Participation in the formulation of industry standards

In March 2019, SF Holding participated in the drafting and preparation of the “Regulations for the OperationalLicense of drone Logistics Distribution Operators” of the Civil Aviation Administration of China Eastern RegionAdministration. In April 2019, SF Holding, in cooperation with the National Post Office, has applied for theestablishment of "Regulations for the Joint Information Collection and Exchange of Postal Express DeliveryDrones" and "Code for the Operation of drone Logistics Delivery". Currently, both standards have been initiallyselected by the Ministry of Transport for the task of 2020 standards establishment. At the same time, SF Holdingcooperated with the Civil Aviation Administration of China Eastern Region Administration to apply for theestablishment of civil aviation safety capacity building project known as “Research on the drone Logistics SafetyOperation Standard and Service Management System”, which has been approved by the Civil AviationAdministration of China and entered the implementation stage.

8. Digital warehousing

In the aspect of smart warehousing network, a complete SF cloud-based digital and automatic system has beenconstructed to support E-commerce warehouses, automatic benchmark warehouse, cold chain warehouses, medicalwarehouses, food warehouses, international shipping warehouses, SF operation and logistics warehouse, frontwarehouse, micro warehouses, and other business-specific warehouses, for enhancing the handling capabilities fordaily operation support and peak season comprehensively. Based on demand from leading customers of variousproduct categories, omnichannel supply chain management, multi-dimensional data analysis, application of bigdata and AI technology in intelligent warehouse network route, development and application of system solutions forsegmental industries, support for improving customer experience in warehousing is available. SF Holding has alsoinvested in an industry-leading web-based comprehensive warehousing service platform – Warehouse In Cloud, toprovide warehouse searching, warehouse leasing, integration of warehousing and distribution and other services,upon which it has built the country’s leading “warehouse as a service” digital warehouse network platform focusedon warehouse big data applications, digital warehouse management, collaborated warehouse allocation, cloudwarehouse technology, and IoT sensing clouds. Empowering cooperative partners through internet, IoT andinformation technology, an open digital warehouse ecosystem network is built for integrating online and offlinewarehouse resources, fully participating in the hardware management of warehouse network and transformation ofdelivery system, to facilitate SF warehousing in building an industry-leading business ecosystem platform toprovide more diversified warehousing solutions for customers.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

9. Smart packaging

(1) Construction of green packaging products ecosystem and smart platform

SF Holding has always been committed to promoting the lightweight, reused, reduced, recyclable, degradable,intelligent application and implementation of packaging to build a sustainable packaging ecosystem. As of the endof the reporting period, it has developed more than 100 sets of packaging solutions for the traditional, cold chain,pharmaceutical, freight, special goods, intra-city catering and other industries, and constantly explore and innovate,in areas of solar photovoltaic panels and white appliance, and innovation has been continuously explored. As tosolar photovoltaic panels and white appliance, the research and development of various characteristic packagingproducts with independent intellectual property rights continues to create value for customers in various industries.

SF Holding has continuously pioneered and innovated in cold chain packaging. It has realized theimplementation of the standardized packaging products such as cherry, lychee, Chinese bayberry and peach, andexplored the application of new fresh-keeping, green materials and solutions, so as to improve the quality and greenlevel of fresh packaging. It is exploring the mode of pre-treatment center in the place of origin, aiming to helpstandardize, industrialize and automate fresh fruits in the place of origin, to ensure the “first mile” of fresh productsdelivery, improve the quality of fresh products and user experience, and create greater value for customers.

In terms of construction and implementation of green recycling system, SF Holding proposes “platform +container + smart hardware” recycling strategy, and the self-developed “recyclable container managementplatform'' realizes the unified management of various recyclable containers, embeds the recycling packaging into alllinks of logistics, in which the reusable packaging box “Feng Box” has put into application in 96 cities includingBeijing, Shanghai, Guangzhou and Shenzhen, and has been recognized by dozens of domestic and foreign leadingbrands.

(2) Construction of packaging technology research and testing laboratory

SF Holding has also continuously advanced and made breakthroughs in the research and standardization of theunderlying technology for packaging. Among them, the packaging R&D strategy has been gradually upgraded tofour major packaging R&D systems with logistics standards, material technology, product iteration and intangibleproperty rights as the core, which will help the Company to realize green, digital and automatic packaging.

As of the end of the reporting period, SF Holding completed the construction of packaging parametric designplatform to realize the intelligent iteration of packaging R&D; gradually promoted the basic technology researchsuch as road spectrum technology and packaging carbon emission technology, promoted the quantitativemeasurement and monitoring of logistics packaging, so as to build a measurable evaluation system of greenpackaging. SF Holding has applied for more than 260 packaging related patents, revised tens of national standards,industry standards, enterprise standards, and carried out visual management for the above intangible property rightsto provide technical support and guidance for packaging R&D.

In order to continuously promote the research and verification of materials, methods and models forsustainable packaging, SF Holding officially launched the physical packaging laboratory in Shenzhen in June 2019,covering packaging transportation safety test, material performance test, physical and chemical analysis test andsample preparation and other modules, which provides scientific basis for the research and development ofpackaging solutions and the quality control of packaging materials.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

10. Information security

(1) Adhere to network security and ensure compliance

In the first half of 2019, SF Holding adhered to the basic principle of information security compliance andactively carried out network security and privacy protection. It participated in the formulation of 3 safety industrystandards, newly applied for 9 invention patents in relation to information security, and fulfilled securitycompliance.

In the first half of 2019, SF Holding started the ISO29151 personally identifiable information protectioncertification on the basis of the practice of ISO27001 certification standard and the second- and third-levelevaluation requirements of network security protection. As a representative of the logistics industry, SF Technologyparticipated in the network security standardization technical review organized by the National InformationSecurity Standardization Technical Committee and Shenzhen Institute of Standard and Technology, covering cloudcomputing security, IoT security, data security and others. The standards involved include “Cloud ComputingSecurity Technology Specification (《云计算安全技术规范》)”, “IoT Platform Security TechnologySpecification (《物联网平台安全技术规范》)” and “Information Security Technology Hybrid Cloud SecurityTechnology Requirements (《信息安全技术混合云安全技术要求》)”.

SF Holding completed four security governance tasks initiated by the Ministry of Public Security, the StatePost Bureau, Guangdong Communications Administration and other departments in the first half of 2019, includingpersonal information protection, postal industry network security, big data governance, blockchain security.Through overall inspection and identification of the gaps, we gradually improve the level of our enterpriseinformation security.

(2) Openness and cooperation to ensure all-round enterprise information

On June 27, 2019, the third SF Information Security Summit was held in Shenzhen. Hundreds of informationsecurity practitioners from the State Post Bureau, The Third Research Institute of Ministry of Public Security, ChinaElectronic Standardization Institute, The Internet Police Command of Guangdong Provincial Public SecurityDepartment (广东省公安厅网警总队), Shenzhen Network Information Office (深圳市网络信息办公室),Tencent, Everbright Securities, Ping An Group and others from the government, business and academic sectorsgathered to exchange industry technology and development trends, break down barriers and jointly build a newinformation security ecosystem.

During the Summit, SF released the "Cuiyu Data Security Solution (粹御数据安全解决方案) ", a set oflife-cycle data security solution products that SF has developed and used in the process of information securityconstruction through management and technology gained. Through the release and sharing of the design conceptand implementation ideas of the products, SF provides its own practical experience for the government, businessand academic sectors. It also provides a unique perspective for comprehensive data security protection, and arousesa wide range of attention in the information security industry.

In the meanwhile, SF's big data security team shared a data security solution based on natural language contentlearning, which uses unsupervised topic discovery, sequence tagging, keyword extraction and in-depth learning toachieve automatic recognition of privacy information, standardization of consignment information and detection ofsensitive information in office documents, as well as automatic threat level assessment of test results. The programnot only effectively improves the ability of data security detection, but also improves the upper limit of enterprisedata security governance.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

(II) Top ranking in satisfaction and quality for consecutive years, and good branding image

has been established

1. Top ranking in customer satisfaction for 10 consecutive years

According to the 2018 Express Delivery Service Satisfaction Survey issued by the State PostBureau(《2018年快递服务满意度调查结果通报》), S.F. Express ranked No. 1 in “Overall Satisfaction ofExpress Delivery Enterprises.” SF Holding has topped the ranking for ten consecutive years since the State PostBureau began announcing the rankings for the first time in 2009. According to the Announcement on the ExpressDelivery Service Satisfaction Survey in the First Quarter of 2019 and the Punctuality and Timeliness Test Results(《关于2019年第二季度快递服务满意度调查和時限準時率测试结果的通告》) and the Announcement on theExpress Delivery Service Satisfaction Survey in the Second Quarter of 2019 and the Punctuality and TimelinessTest Results (《关于2019年第二季度快递服务满意度调查和时限准时率测试结果的通告》) issued by the StatePost Bureau, the user satisfaction scores of express delivery services in the first quarter and the second quarter of2019 were 77.6 and 78 respectively, while SF’s scores were above 80 and thus, it has continued to stay ahead of itspeers.

2. A continued decrease in complaint rate

According to the data in the Notice on Customers Complaint in Post Industry(《邮政业消费者申诉情況通告》) published by the State Post Bureau monthly, in January to June 2019, SFHolding’s complaint rate was 0.18 case (number of valid complaints per million parcels delivered), a decrease of72% over the same period of last year, which was far below the national average of 0.57 cases.

Note: The monthly average valid complaint rate is a simple average calculation based on data in theNotice on Customers Complaint in Post Industry (《邮政业消费者申诉情況通告》) published by theState Post Bureau monthly.

3. Ranked No. 1 in timeliness throughout the entire process of express delivery service

In February 2019, the State Post Bureau released the 2018 Express Delivery Service Punctuality andTimeliness Test Results (《2018年快递服务时限准时率测试结果》) , which evaluated the nine major expressdelivery companies. SF Holding ranked No. 1 in all the six indicators, including timeliness throughout the entireprocess, timeliness of handling at the place of origin, timeliness of transportation and handling at the place ofdestination, delivery timeliness and 72-hour punctuality. SF Holding ranked No. 1 for six consecutive years sincethe State Post Bureau first announced entire process rankings for express delivery in 2013.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

4. Entering the BrandZ Top 100 Chinese Brands ranking consecutively

On May 29, 2018, WPP, a global communications group, and Kantar announced the list of ranking for “2018BrandZ Top 100 Most Valuable Global Brands”. SF entered in the ranking list for the first time. The ranking listshows that 15 Chinese brands entered the Top 100 list in 2018. On May 6, 2019, WPP and Kantar announced thelist of ranking for “BrandZ 2019 Top 100 Most Valuable Chinese Brands”. S.F. Express ranked 16th, and rankedamong the top in the list of ranking for two consecutive years, maintaining the top position among expressenterprises.After over 20 years of operation, the SF brand has enjoyed extensive recognition and popularity in the expressdelivery industry. “S.F.” has become synonymous with “fast”, “punctual” and “safe” in the express deliveryindustry and is a preferred brand for corporate clients and high-end individual customers. Good market reputationhas brought a large number of high-quality corporate clients to SF Holding, long-term cooperation with a largenumber of domestic and foreign renowned enterprises, including Apple, Xiaomi, Huawei, Uniqlo, Bestseller, PingAn, Wish and Tophatter, in industries like 3C, apparel, finance, insurance and cross-border online trade have beensecured.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

(III) The first express delivery A-share company with direct operation model

SF Holding adopts an operating model with strong management and control over the whole network, and it isthe first A-share express delivery company that adopts the direct operation model. The headquarters of SFHolding controls all express delivery networks and core resources, including collection and delivery points, transitdepot, trunk and branch routes, aviation hub, aircraft, vehicles and employees. The direct operation model hasabsolute control over the whole logistics operation and helps ensure unified in top-down corporate strategies, toensure effective achievement of corporate strategies and operation goals.

The direct operation model has the following advantages: (1) Ensure operating stability and control. Theexpress delivery industry is characterized by scale and networking, involving tens of thousands of operatingservice points and hundreds of thousands of employees; and how to ensure the stability and control of thecompany’s operations is the key to ensure future sustainable development. All levels of SF Holding’s businessentities from headquarters to service points, and the core business segments from collection to transit, and fromtransit to delivery, have primarily adopted the direct operation model. Only a portion of non-core operations iscomplemented by outsourcing. This model not only guarantees the stability of the Company’s business operations,but also ensures the control in handling abnormal risk events, time sensitivity, quality and cost of operations, andensures the Company’s sustainable and healthy development in the future. (2) Facilitate standardized customerservice and operation management, thereby improving quality and efficiency. SF Holding adoptsstandardized management across the entire network, together with a uniform top-down approach in operationmonitoring and appraisal mechanism within the company, it can effectively maintain service quality andtimeliness to ensure the customer experience and improve service perception. (3) Enhancement ofstandardization and compliance in internal management. Benefiting from the advantage of being uniform,standardized, and well-controlled, the direct operation model ensures that the Company’s external operations,internal management, fiscal and taxation management, corporate governance, and other controls are standardizedand compliant to avoid various types of compliance risk, and accountable to the State, regulatory authorities, andall shareholders. (4) Facilitate the new business to use the resources of the whole network to achievecollaboration in terms of customers, systems, personnel and resources, etc., as well as fast incubation andexpansion. (5) Improvement in customer loyalty and brand reputation. The direct operation model enablesthe Company to stay close to its customers and to fully and precisely understand their needs at first instance.When a problem occurs, the direct operation model enables the Company to handle and respond to customers

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

immediately and ensure that service quality and customer satisfaction are maintained. As a result, SF Holding heldthe top ranking in the industry’s customer satisfaction and brand reputation for ten consecutive years. (6) Bettercontrol of the entire data process and core information. Under the direct operation model, information systemsand data of full processes are managed and controlled in a centralized and unified manner, which is beneficial tothe valuable big data analysis and application conducted by the Company on customer service. Especially in theprocess of exploring the creation of smart logistics, the direct operation model helps black technology integrateinternal and external resources of the Company for fast application, upgrade and iteration into relevant businesses.

(IV) Unique and scarce intelligent logistics network, the “Aviation + Ground + Information”three-in-one network

After years of dedicated operations with a forward-looking strategic framework, SF Holding has built up acomprehensive logistics service network that integrates three networks “aviation network + ground network +information network” into one with both domestic and overseas coverage. Under the direct operation model, withstrongest network control and highest stability, together with SF Holding’s heavy investment in informationnetwork, SF Holding now owns abundant network resources that are most unique and scarce among industrypeers in China.

1. Aviation network

In 2009, SF Airlines became the first privately-owned air freight company in China, and currently it hasdeveloped into an air freight company with the largest air cargo fleet in China. As at the end of the reportingperiod, among the domestic express delivery companies, only three companies, namely SF Holding, EMS, andYTO Express, have established logistic airlines with independent air transportation capabilities. SF Holding is aleader in domestic industries in terms of quantity of cargo aircraft, number of routes and transportation capacity.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Cargo aircraft: (1) Fleet building: As at the end of the reporting period, SF Holding had a total of 55self-owned all-cargo aircraft (including Boeing 767: 8 aircraft, Boeing 757: 29 aircraft, Boeing 747: 1 aircraft andBoeing 737: 17 aircraft), with 23.34 years of average service time, and 14 chartered all-cargo aircraft, operating atotal of 65 flight routes. As at the end of the reporting period, SF Airlines operated flights to 43 major cities inChina and 15 international cities including Chennai, Bishkek and New York. In January 2016, when the first B767wide-body cargo aircraft officially commenced operation, SF Holding became the first express delivery companythat owned a B767 wide-body cargo aircraft. In November 2017, SF Holding bought two Boeing 747 cargoaircraft at an online auction platform in China, one of the aircraft had commenced operation in October 2018, andthe other aircraft is expected to commence operation in August 2019. Wide-body cargo aircraft has bigger spacefor transportation, higher fuel efficiency, and better performance in transportation capacity and capability. Inaddition to supplementing and optimizing the aircraft types in the current fleet, the introduction of new aircraftmodels also allows better allocation of capacity resources in areas with sufficient cargo volume, improves timeutilization rate, saves energy and reduces emission. In the next three years, the size of SF Holding’s self-ownedfleet is expected to reach 80 aircraft, forming an aviation network comprising mainly four types of all-cargoaircraft, including 737, 747, 757, and 767. (2) Reserve of pilot resources: SF Airlines has been recruiting talentssince its establishment, attracting pilots through strict internal management and service flow process to join SFAirlines, and actively cultivates its own pilots through cooperation with domestic and foreign aviation schools. Asat the end of the reporting period, SF Airlines had a total of 479 pilots, including 195 captains, 248 co-pilots, and36 student pilots. (3) Traffic rights and airport slots: Based on the allocation principle of “seniority” in civilaviation flight schedules, SF Airlines has certain first-mover advantages when compared with other companies.As at the end of the reporting period, SF Airlines had a total of 143 pairs of slots, covering 43 large andmedium-size cities nationwide and international cities including Chennai, Bishkek and Almaty. (4) Self-operatedground support: Since 2015, SF Airlines operated ground support services directly in some cities gradually. Byshortening the time duration of ground services and improving the efficiency of ground servicing, more handlingtime is available for the collection and distribution segments of express delivery and generates more momentum torealize safety, stability and fast timeliness of express parcels. Shenzhen Airport’s southeast parking apron wasofficially launched for operation in December 2017, further improving the operating efficiency of ground servicesand the timeliness of cargo handling. (5) Aviation safety assurance: Since its inception, SF Airlines has madeaviation safety its priority, the SMS management system has been established to implement rules and regulationsstrictly. From the first flight to the end of the reporting period, SF Airlines has operated approximately 306,800hours safely and has been accredited by the CAAC and other regulatory agencies as a safe entity for 9 consecutiveyears. In 2010, it was named “2010 Accredited Unit of Safety Responsibility” by CAAC Central and SouthernRegional Administration; in 2011, it was named “2011 Excellent Unit of Safety Responsibility” and “2011Advanced Unit of Traffic and Transport Production Safety in Shenzhen” by CAAC Central and SouthernRegional Administration; in 2012-2013, it was named “Advanced Unit for Safety Responsibility” by CAACCentral and Southern Regional Administration for two consecutive years; and in 2014-2018, it was named“Accredited Unit of Safety Responsibility” for five consecutive years by CAAC Central and Southern RegionalAdministration.

Commercial flight resources: In addition to all-cargo aircraft, SF has also secured stable passenger aircraftbellyhold resources from about 100 commercial airlines at home and abroad through direct operations(cooperating directly with airlines), agents (freight forwarders), or tripartite cooperation (SF, airlines, and agents)to operate 2,023 flight routes at home and abroad.

Air freight capacity: As at the end of the reporting period, SF Holding’s all-cargo aircraft and commercialflights operated a total of 2,088 aviation routes, the total number of flights in the first half of 2019 was 755,000,with a daily average of 4,170 flights, covering 43 major cities in China and 15 international cities includingChennai, Bishkek and Almaty. Total air cargo volume handled by the Company in the first half of 2019 wasapproximately 617,000 tonnes, and daily average cargo volume handled was 3,407tonnes.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Resources

End of the current reporting period /Current reporting period

Daily average during thereporting periodAll-cargo aircrafts

Number of self-ownedaircrafts

55 aircrafts-Number of external charteredaircrafts

14 aircrafts-Number of all-cargo aircraftroutes

65 routes-Total number of flights 17,600 flights97 flightsTotal cargo volume 255,000 tonnes1,406 tonnesCommercial flights

Number of commercial flightroutes

2,023 routes-Total number of flights 737,000 flights4,073 flightsTotal cargo volume 362,000 tonnes2,001 tonnesFuture airport construction: The Hubei International Logistics Hub project lies at the core of SF Airlines’transportation system. In the future, SF will use this hub as the center of its air route network that covers the entirecountry and reaches the world. The construction of the logistics hub project will provide good fundamentalsupport for enhancing timeliness of products, improving the stability of services, building high-end integratedlogistics service capabilities, and improving customer satisfaction, and is an important way to optimize theCompany’s aviation network structure and reduce its operating costs. In February 2019, having obtained the“Approval reply on the Preliminary Design and Budgetary Estimates of the Civil Airport in Ezhou, Hubei, fromCCAC Central and Southern Regional Administration and Hubei Provincial Development and ReformCommission” (CAAC CSRA[2019] No.59), the airport project entered the working drawing design stage.

2. Ground network:

Service points: SF Holding has built a nationwide express delivery service network and expanded it to majorcountries around the world. As at the end of the reporting period, SF Holding’s business has covered 336prefecture-level cities, 2,779 county-level cities, nearly 16,000 directly-operated service points. For internationalbusiness, the international standard express and international economy express businesses cover 62 countriesincluding the United States, the European Union, Russia, Canada, Japan, South Korea, ASEAN, India, Brazil,Mexico and Chile. Among which, the international economy express business commenced in 8 African countriesincluding Congo (DRC), Uganda and Mali in June 2019. The international small parcel business, E-parcel, covers225 countries and regions around the world.

Courier quantity: As at the end of the reporting period, the Company had about 286,400 couriers. TheCompany responds to the call of the country’s drive for “Mass Entrepreneurship and Innovation” and encouragessome employees to start businesses that provide the Company with services of unified brand and quality standards;and on the other hand, the Company actively makes use of social resources. This has not only significantlyimproved employee motivation and labor flexibility, thereby improving resource efficiency and reducing costs,but also effectively guaranteed the stability of customer service standards and quality.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Transit Hub Distribution: As at the end of the reporting period, SF Holding had 9 hub-level transit depots,service points at 34 aviation and railway stations (excluding stations sharing sites with transit depots), and 150sub-district transit depots (including Shunxin Express (顺心快运)), of which 44 transit depots have adopted theautomatic sorting system.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Ground transportation network: As at the end of the reporting period, SF Holding had about 35,000directly-operated and outsourced vehicles for more than 90,000 long-haul and branch routes. The total number ofvehicles for terminal collection and delivery was 72,000 (excluding motorcycles and electric vehicles). 81high-speed railway lines and 121 standard railway lines have been launched. The ground transportation networkof SF Holding covers the entire country. In addition, the Company has also entered into cooperation with theNational Railway Administration actively, a joint venture company has been formed to develop logistics businessby leveraging on the high-speed and standard railway resources, which helped the Company in making significantstrategic breakthroughs in obtaining railway resources, and the joint products developed by both parties have nowachieved considerable scale initially. As at the end of the reporting period, the extremely express deliveryproducts by high-speed railway covered 57 cities and 272 traffic flows. The convenient delivery products byhigh-speed railway covered 34 cities and 69 high-speed railway stations.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Warehouse network: As at the end of the reporting period, SF Holding had 145 warehouses of different categories with a totalarea of nearly 1.8 million square meters, forming a nationwide warehouse service network covering more than 100 major citiesacross the nation, providing professional, efficient and high-quality warehouse service to nearly a thousand customers. In 2019, theCompany has continued to promote the building of core capabilities, and the overall capabilities of SF warehousing were enhancedcomprehensively. SF Holding promoted the implementation of automatic benchmark warehouses according to the demand of leadingcustomers in various segmental markets, and enhanced operational abilities through digital warehousing and efficiency enhancement,reflecting the highest standards in the warehousing industry. The design capability of warehousing solutions has become a key corecomponent of SF’s supply chain solutions+ and provides strong technological support for acquisition of leading customers, and it isone of the core capabilities to support the new vision of the Company to become a “technology service company for industrysolutions”. SF warehousing has been equipped with the capabilities of serving business modes such as shoes and apparel, 3C,cosmetics and cross-border business, and has been recognized repeatedly by leading customers in the industries amidst marketcompetition.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Customer terminal service network: SF Holding has established four independent call centers in Chinawith about 4,200 seats and providing 900,000 instances of customer service daily. The Company provided 7*24hours self-services through SF official website, monthly statement manager, APP mobile phone client, WeChat

mini-programs and WeChat public account, and provided services that understood users’ needs better and werefaster through the 95338 interactive voice response system, the intelligent voice recognition system and the onlineintelligent customer service system. In 2019, SF Holding has been committed to establishing a customer servicesystem and a service strategy that led the industry, listening to customers’ voices, and timely and efficientlysolving customer appeals; continuously building an intelligent and digital service management system, applyingartificial intelligence and big data to the intelligent customer service system, proactively discovering and quicklysolving customer problems and needs with technology-driven services, and providing customers with professional,efficient and warm services.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Last mile service: SF Holding has achieved last mile coverage through its cooperation with SF’scommercial service points, cooperative agencies, property management, and smart express delivery lockers. As atthe end of the reporting period, SF Holding cooperated with 30,000 cooperative agencies and nearly 600 propertymanagement companies. In addition, Hive Box Technology, a participating of SF Holding, had installedapproximately 150,000 smart delivery lockers in community/office buildings, covering 100 cities in China,including Shenzhen, Guangzhou, Beijing, Shanghai, and Wuhan.

3. Information network:

SF Holding has built a high-speed network covering global business by combining logistics scenarios withbusiness needs, and instantly aggregated business information into SF Intelligent Brain, with the business datavolume exceeding the level of 35PB and the daily average calculated amount exceeding 1PB. The Company hasconducted analyses and made decisions through the intelligent brain, and achieved the integration of the threenetworks of “aviation network+ground network+information network” into one network via coordination andadjustment, supporting unlimited business possibilities.

SF Holding has independently researched and developed a complete set of smart network platforms, including SF’s coreoperating systems, the SF Map platform, big data platform, information security platform, and smart O&M management platform.The set of all those platforms has covered all business segments and scenarios to enable business in a fast, flexible, safe andcomprehensive manner, and has promoted logistics full chain information interconnection, which has created a smart and solidfoundation for the diversified business development of the Company. Meanwhile, the Company has also been committed to thedevelopment and implementation of cutting-edge technologies, adhered to independent innovation, facilitated the upgrading ofintelligent logistics, applied cutting-edge technologies such as operation optimization, machine learning, deep learning, data analysisand mining to more practical business scenarios, and supported new technology applications with cloud computing. The Companyhas adhered to user-oriented product design to enhance business performance and user experience, and enabled technology andproducts to be conscientiously implemented and better serve customers.

Moreover, SF Holding has also integrated internal resources. The Company used big data calculation andanalysis, operation optimization, artificial intelligence and other technologies to establish intelligent managementand intelligent decision-making platforms such as logistics operation analysis platform and business forecastingplatform by relying on massive internal and external data. The Company uses data and technology to makedecisions, operate and optimize processes, which has increased the efficiency and scientificness of operation,created SF’s “intelligent brain” and realized data-driven technology and technology-enabled logistics.

SF Holding has coverage of domestic and international express delivery networks, coupled with theCompany’s constant attention and investment in smart information networks, a comprehensive logistics servicenetwork integrating the three networks of “aviation network+ground network+information network” into onenetwork was formed, its unique and scarcity characteristics further consolidate and expand the leading advantagesof SF in the industry.

(V) With forward-looking plans for new business, integrated logistics showed gradual growth

in scale

SF Holding has been adhering to the development of a diversified network in recent years, which hasaccelerated its transformation from a single service provider (express) into an integrated logistics service provider.It has expanded horizontally into new businesses such as warehousing, cold chain, international product, freight andintra-city instant delivery service to satisfy diverse customer needs; it has also extended vertically from back-enddelivery to the front-end of supply chain by leveraging on the sophisticated logistics system of SF and a portfolio ofquality products to offer customized logistic services for enterprises, and provides end-to-end integrated supplychain solutions and services covering the entire process, including supply chain strategy, solution design,implementation and operational management, to assist customers in optimizing, transforming and upgrading theirsupply chains. After years of explorations and diligent efforts, the new business development in SF has graduallyseen results with a growing business scale. During the first half of 2019, new business revenue accounted for 23.66%of total revenues with much higher growth than original express business, indicating that new businesses havebecome the key driving force for business growth in the Company.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Rapid development of new businesses to supplement the coverage of products: New business lines of SF,such as freight, cold chain and pharmaceutical transportation, intra-city instant delivery, have achieved stage resultsand established network coverage with industry-leading depth and width, operational capabilities, innovativetechnology, service quality and customer experience, as well as industry-leading market shares in their respectivesectors, established the brand image of quality services, and formation of long-term cooperative partnership withleading customers of the sectors, these businesses have continued to maintain a high growth trend. All of the newbusiness lines will continue to rely on the sophisticated logistics network, operational capabilities and technologicalcapabilities of SF to deepen their penetration, improve their products and operating models in order to supplementthe coverage of products in the comprehensive logistics network of the Company.

Entry into supply chain through acquisition: In August 2018 and February 2019, SF Holding completed theacquisition of cold chain business in mainland China, Hong Kong China and Macau China from the U.S. HAVIGroup and the acquisition of supply chain business in mainland China, Hong Kong China and Macau China fromDeutsche Post DHL to establish SF New HAVI and SF DHL business segments, respectively. The U.S. HAVIGroup has almost 40 years of supply chain management experience in cold chain operations, with leadingcapabilities in supply chain management and solution design for cold chains, and provides cold chain logisticservices and one-stop supply chain solutions and services for global renowned customers. Deutsche Post DHL has30 years of supply chain management experience in China, and provides industry-leading solution design andsupply chain services to renowned customers in the industries of automobile and industrial manufacturing, lifesciences and medical, high technology and spare parts logistics, fast-moving consumer products and retail sector.The integration and synergies of the acquired business and SF business have generated initial results, the volume ofnew business in New HAVI and SF DHL has recorded significant growth. Meanwhile, by relying on the advantagesof the logistics network and technological capabilities of SF Holding, the warehousing and cold chain businesssegments in SF joined hands with New HAVI and SF DHL to fulfill the supply chain demand from leadingcustomers in food and fresh produce, new retail catering and 3C industries by providing more diversified andsuperior standard supply chain services to customers. In the future, SF will continue consolidating high qualitylogistics resources, learning and replicating supply chain experience and management capabilities rapidly, andenhancing the supply chain management capabilities by leveraging on the technological capabilities of SF to furtherupgrade the solution capabilities.

Technological solutions drive upgrading of industry supply chain: As internet gradually evolves towardsthe internet-of-things, and with the fast arrival of industry 4.0 and the new retail era of all channels, enterprises withconventional supply chains are forced to go for transformation or upgrading. SF technological solutions are drivenby technology and data, using SF DNA as genes, learning form the advanced supply chain industry experience ofNew HAVI and SF DHL to create a digital, modular and one-stop intelligent supply chain management platform.Through digital technology such as internet-of-things, big data and artificial intelligence, and by combiningproducts and processes in the model, supply chain services are provided to customers at three levels includingstrategic planning, tactical plans and optimization, operational and implementation management to help customersrealize an upgraded supply chain system and create competition barriers. SF has provided comprehensive solutionsto certain industries, including but not limited to the following

3C industry: By leveraging its strong logistics network, technological advantages of big data and artificialintelligence as well as its practical experience and capabilities of logistics visualization, SF has created a businessmodel that provides 3C customers with the whole process, end-to-end solutions for systematic, integrated, andcustomized comprehensive services covering raw material - production and processing - channel distribution -consumer (C2M2B2C). The model also helps the channel distributors of customers by building a capital logisticsplatform and an after-sales service platform, by integrating information flow, business flow, logistics, and capitalflow, realizing the visualization, management, and control of the whole chain of the supply chain. As a result, wefurther enhanced the depth and breadth of services so as to provide customers with domestic and internationalend-to-end supply chain solutions services covering the whole chain of production, supply, marketing anddistribution.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Apparel industry: SF has assisted customers to perform comprehensive digitization and managementupgrading in inventory management by managing customers’ products from all aspects, including productlaunching, distribution, replenishment and marketing, which have notably enhanced the transformation rate ofoffline outlets and the product collection experience for online customers, digitized management has been realizedfor online and offline outlets in the retail apparels industry. Through accurate customer images, online and offlineintegration, unified management is realized for all sales channels. SF has provided supply chain solution services tomany famous international fashion brands.

Fast-moving consumer goods industry: Fast-moving consumer goods industry is characterized by massconsumers, high frequency of consumption, complicated sales channels and high demand for convenience. Affectedby generation change and upgrading in e-commerce mode, fast-moving consumer goods and retail enterprises havebecome more responsive to market changes. By relying on the full coverage and highly time-sensitive logisticsnetwork, big data and artificial intelligence are used to assist customers to improve image precision and marketing.SF has provided supply chain solution services to many international renowned brands of fast-moving consumergoods.

Pharmaceutical industry: By relying on the logistics network, technological capabilities and hardwarefacilities, SF provides systematic end-to-end software and hardware integrated supply chain solutions to customersin the pharmaceutical industry, with connections across the five major chains of procurement, production,distribution, consumption and reverse logistics. Through the assistance of technological systems such as smartwarehousing management, postal medical delivery, electronic delivery notes for drug categories, pharmaceuticalcustomers may reduce cost and increase efficiency. The research and development of hospital interior floor plansand reverse QR code for sample testing procedures have improved the diagnostic/service experience ofpatients/users. SF has provided supply chain solution services to several large-scale hospitals and customers in thepharmaceutical industry.

Automobile and spare parts industry: In the first half of 2019, the weak trend of the whole vehicle marketcontinued from 2018, automobile enterprises are under higher pressure to reshape the supply chain, enhance thequality and efficiency of supply chain to realize cost cutting. By utilizing the advantages in network andtransportation resources, synergies in big data and warehousing R&D capability, SF provides comprehensivesolutions to customers ranging from procurement logistics, production logistics, and after-sales logistics todistribution logistics. It strives to realize automation and visualization of life-cycle management for orders, smartrouter planning for milk-run circulating delivery, smart freight arrangement, smart warehouse allocation using bigdata, digital supervision and management for safeguarding the whole process, so as to reduce production risks andcosts, accelerate the intelligent evolution and model reform of the industry, and ultimately enhance the quality andefficiency of supply chain and reinvent the logistics experience for customers. SF has provided comprehensive supply chainsolution services to a number of domestic renowned automobile enterprises.

(VI) First-mover advantages with scarce logistics venue resources

Riding on sustained rapid growth in the express delivery industry and responding to the requirements of theState Post Bureau in the “13th Five-Year Plan” for the express delivery industry to accelerate the construction oflogistics industrial parks, SF Holding committed to create an “Express+” and “Internet+” dual-core industrial parkservice ecosystem, which will provide not only internal services for SF Holding, but will also providecomprehensive package services in warehousing, logistics, business, information and capital flows for localindustries and external customers, creating a hub and communication window for effective linkage to government,SF services and customer demand.

As at the end of the Reporting Period, SF Holding has successfully lay out the industrial park project across 45cities, representing an addition of four cities, namely Haikou, Suzhou, Shenyang and Luoyang, as compared to theend of 2018. SF Holding owned logistic land area of approximately 1,119 acres, and a total planned constructionarea of approximately 4 million square metres, approximately 1.18 million square metres of construction area werecompleted. The total net book value of logistic site resources was approximately RMB10.26 billion. In future, theCompany will utilize existing resources to fulfill internal requirements, further expanding the layout for corestrategic resources to enhance the core competitiveness for sustainable development.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

In order to revitalize existing assets of the Company, satisfy the rolling development needs of projects, andaccelerate the layout of industrial parks, the Company has been actively exploring the innovation of securitization oflogistics industrial parks. In 2018, the Company was approved to issue RMB5 billion ABS by way of shelf offeringand completed the first tranche of issuance successfully, with total proceeds of RMB1.846 billion raised. It was thefirst perpetual domestic REITs in respect of logistics property issued by way of shelf offering, meanwhile theCompany recorded investment gains of approximately RMB808 million on asset appreciation. In 2019, theCompany has proposed the issuance of the second tranche of ABS and is expected to raise total proceeds up toRMB1.5 billion, and is expected to realize investment gains of approximately RMB600 million on assetappreciation. As at the date of disclosure of this report, the second tranche of issuance is still in active progress.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Location

Size of land area held(acres)

Total plannedconstruction area(including projects under construction/

planned)(10,000 square metres)

Area of completedconstruction(10,000 square metres)

Total net book valueas at the end of the

reporting period(RMB100 million)East China

275.11 85.4947.02 16.47

North China

144.31 47.1320.20 12.93

Central China

391.09 136.7120.82 17.82

South China

101.81 53.7229.68 49.07

West China

206.42 76.96- 6.33

Total1,118.73 400.01117.73 102.62

Note: The data in the above table has not been audited.

(VII) Warm, principled and productive SF cultureIn SF Holding’s 26-year history of development, its genes of outstanding and strong corporate culture havecontinually played an important role. Customer success, equality and respect, innovation, unity, and accountabilityare part of SF’s culture. To SF, corporate culture is not just a belief, but more as a commitment and practice. It isreflected in every word and action of all SF employees, is expressed in every operating process, and has become astrong spiritual force that is embedded in SF’s cohesiveness, competitiveness, and vitality.

1. SF’s success is based on assisting customer to succeed

As a service-centric enterprise, SF Holding has always been customer-oriented and is committed to providingcustomers with above expectation services, assisting customers to create value and achieve success. In recentyears, SF Holding has been trying to provide convenient and reliable international express, logistics and supplychain solutions to domestic and international manufacturing enterprises, trading enterprises, cross-bordere-commerce enterprises and specialty economic products to help outstanding enterprises and products in China to“go global” and “bring in” quality merchandise from overseas. Moreover, in industries such as 3C, fresh produce,apparel and pharmaceutical industries, SF is able to provide comprehensive logistics solutions based on customerneeds and industry characteristics. While facilitating the success of customers, SF Holding also achieves its ownsuccess.

2. Innovation drives SF forward

SF Holding advocates the culture of innovation, emphasizing that everyone and every move can be innovative. In recent years,SF Holding has innovated continuously, not only in the field of logistic UAVs, smart devices and smart packaging, but also ininvestment for building big data, AI automation, AI recognition and smart decision-making, and has achieved extraordinary results intechnological innovations such as artificial intelligence, Internet of Things, cloud computing and machine learning. In May 2019, the“SF Big Data Platform”, a commercial decision big data solution researched and developed by SF Technology, won the “Top Ten BigData Cases” from the Ministry of Industry and Information Technology (MIIT). SF Technology has launched a smart blue toothearpiece “Xiao Feng” (小丰) by incorporating a number of AI technologies innovatively, and has been rated among the “Top 50Smart Companies”(TR50) in 2019 by MIT Technology Review. Innovations also exist in front line business of SF. Among winners ofthe “Best SF Person” Award, many of them are innovators. The power of innovation drives SF Holding moving forward continuouslyat high speed.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

3. Equality and respect uniting every heart

SF Holding advocates treating every person equally and with respect, regardless of his role and level withinthe Company. In February 2017 at the listing ceremony of SF Holding, the courier who was beaten by a customerwas invited to ring the bell together with the Chairman to share the glorious moment. So far, SF has beenadvocating the principles of “fairness, justice and openness” in staff employment, respecting the value of theircontributions, providing everyone with equal development opportunities and assisting staff to actualize personalvalue. Meanwhile, online communication and interactive platforms such as “echo, Face Initiative, communicationhotline” are established to encourage employees to express their opinions and their ideas freely. The corporateculture of equality and respect has further united hundreds of thousands of employees in SF.

4. United as one, we are strong

SF Holding advocates the spirit of solidarity. Everyone must be cooperative and unite every employee’sstrengths in order to achieve the same goals. During the peak season, such as the 11.11 Festival, Mid-AutumnFestival, National Day, and Spring Festival, from Chairman to regional heads, and to third-tier functional staff, allof them will go to network points and transit depots for providing support and sympathy and working togetherwith the frontline staff. By uniting all hearts, the dedicated SF Holding will have strong cohesive and fightingpower to act faster and burn brighter.

5. Be responsible proactively and contribute compassion

SF Holding advocates positive accountability. It does not only require employees to fulfill their responsibilitiesand perform their duties during their work, but also encourage employees to take social responsibility. Under thiscultural influence, returning lost-and-found money, helping others, saving people and fighting fires, upholding justand rightful acts, working for the public good, and other positive events occur more and more frequently among SFemployees. Acts of kindness included a resident driving a vehicle lost control and fell into a reservoir, at the mostdangerous moment, a courier from Dongguan district did not hesitate and jumped into the water amidst cold windsto save the fainted driver from the water; a pregnant woman was in critical condition and needed platelets of bloodtype O, but the blood bank supply was not enough, 21 young men from Nanjing district donated blood proactively tohelp the pregnant woman overcome the critical moment; a baby was born in prematurity and needed urgent bloodtransfusion within one hour, the child’s father was desperate and asked for help in the street, a courier in Beijingdistrict did not hesitate and went to the hospital immediately with the child’s father, 400 cc blood was donated tosave the life of the child and assured his healthy growth; ……all these positive cases attracted coverage by media,such as People’s Daily and Express Magazine, some courier were presented “Good Personality Awards” by thegovernment to commend the couriers on taking social responsibility and disseminate positive values. Up to now, atotal of seven sessions of “Best SF Person” Awards were held and presented “Social Responsibility Awards” to 17selected employees, conferring the highest SF honor to outstanding staff in the aspect of social responsibility.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Chapter 4 Management Discussion and Analysis of Business

OperationI. Overall Performance of the Company during the First Half of 2019

1. Overall financial performance

Due to the uncertainties in the international situation and easing domestic market demand, the growth of therevenue from the Company's traditional products slowed down during the first half of 2019. However, benefitingfrom the sustained and rapid growth of the Company's new businesses, effective implementation of cost reductionmeasures and efficiency improvement brought by the application of new technologies, the Company's overallrevenue growth remained healthy and its profitability steadily increased during the first half of 2019.

Revenue: During the first half of 2019, the Company realized 2.017 billion of shipments and revenue ofRMB50.075 billion, a year-on-year revenue increase of 17.68%. In order to cope with the changes in marketdemand brought about by the adjustment of consumption structure, the Company adjusted its product strategy in duecourse and launched new products for specific markets and customers, thereby realizing increase in volume andrevenue. At the same time, the Company continued to develop new businesses such as freight, cold chain andpharmaceutical transportation, international express delivery and intra-city delivery. By establishing New HAVIand SF DHL, SF Holding entering supply chain business, the scale of integrated logistics business is graduallyincreasing. During the first half of 2019, the Company's revenue from new businesses (including supply chain)accounted for 23.66% of the total revenue, and the rapid growth of the revenue from the new businesses contributedsignificantly to the overall revenue growth of the Company.

Profit: During the first half of 2019, the Company realized a net profit attributable to shareholders of parentcompany of RMB3.101 billion, representing a year-on-year increase of 40.35%, while net profit attributable toshareholders of parent company after deducting non-recurring profits and losses amounted to RMB2.33 billion,representing a year-on-year increase of 11.48%. The new businesses have achieved scale economy to a certainextent. At the same time, benefiting from the application of various new technologies and effective cost reductionmeasures, the Company's cost efficiency effects have been further demonstrated. Gross profit margin rose to 21.50%in the second quarter of 2019, representing an increase of 3.5 percentage points from the previous quarter. Duringthe first half of 2019, the overall gross profit margin rose to 19.82%, representing an increase of 0.86 percentagepoints from the same period of last year and an increase of 1.9 percentage points as compared with the whole year of2018. Among them, the optimization and control of transportation costs have achieved remarkable results, whichare mainly reflected in two aspects: on the one hand, on the premise of ensuring timeliness, the routes are integratedand dynamically optimized by means of business forecasting and route planning, so as to improve transportationefficiency significantly. On the other hand, through the combination of deploying various transportation resources,such as self-operating, outsourcing, and on-demand trucking platform, the optimal strategy of transportationresources is realized, while the cost of transportation resources is continuously reduced without compromise ofquality. Having benefited from the above measures, the transportation cost to revenue ratio decreased significantlyyear-on-year.

Financial Status: As at the end of the reporting period, the Company’s total assets were RMB81.037 billion,an increase of 13.16% as compared with the end of 2018. Benefiting from stable and healthy profit contribution inthe first half of 2019, the Company's total equity attributable to shareholders of the parent company at the end of thereporting period was RMB38.405 billion, an increase of 5.04% as compared with the end of 2018. As at the end ofthe reporting period, the Company's debt-to-asset ratio increased slightly, from 48.45% as at December 31, 2018 to

52.26% as at June 30, 2019, while the level of debt remained relatively healthy and the financial position was stable

and optimistic.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

The key financial indicators are shown in the table below. Please refer to the business discussion and analysisin this Chapter for more detailed financial data analysis.

Item Indicators

Currentreporting

period

The same periodof previous year

(Restated)

Increase/Decreaseover the same period

of previous year

Business

Revenue from express logistic and supply chain(billions RMB)

49.480 42.160 17.36%Of which:

(1) Revenue from express logistic (billions RMB) 47.637 42.160 12.99%Shipments (Billions) 2.017 1.858 8.54%Average revenue per shipment (RMB) 23.6222.69 4.10%

(2) Revenue from supply chain (billions RMB) 1.843N/A N/A

IncomeStatement

Revenue (billions RMB) 50.075 42.551 17.68%Net profit attributable to shareholders of theparent company (billions RMB) 3.101 2.210 40.35%Net profit attributable to shareholders of theparent company after deducting non-recurringprofits and losses (billions RMB)

2.330 2.090 11.48%Weighted average return on net assets 8.23%6.57%

An increase of 1.66

percentage pointsEarnings per share(RMB/Share) 0.700.50 40.00%Item Indicators

End of the

currentreportingperiod

End ofprevious year

(Restated)

Increase/Decreaseover previous year

endBalanceSheet

Total assets (billion RMB) 81.037 71.615

13.16%

Total equity attributable to shareholders of theparent company (billion RMB)

38.405 36.561

5.04%

Debt to Asset Ratio 52.26%48.45%

An increase of 3.81percentage points

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

2. The traditional business grew steadily and contributed to sustainable and healthy revenue

Customer resources: In response to the changes in the market and the diversification of customer demand, SFHolding focused on industry characteristics and business clustering, centered on the direction of multiple-scenarioplanning, digitalization and refinement, and tapped into customer demand for supply chain. By relying ontechnological means to drive internal changes and upgrading product portfolio, we constantly improved customerservice capabilities and customer experience to achieve a stable and healthy growth of customer volume andrevenues.

Cash customers: Cash customer management adhered to customer-centric approach, continuously covered allthe scenarios of customer delivery services through the combination of online and offline platforms, focused on thetraffic volume of various online lifestyle applications, completed the coverage of online delivery service, deepenedthe scenario planning for traditional offline delivery services and expanded the scope of new delivery scenarios forusers, and completed the coverage of offline delivery service. In respect of customer operation, the perception andloyalty of customers have been continuously improved by formulating refined strategies to match different interestsand services of customers. As at the end of the reporting period, the number of members reached 200 million andaverage monthly active customers exceeded 28.89 million, representing a year-on-year increase of 35%. In thefuture, the Company will continue to consolidate the service framework capacity and upgrade, optimize and reviewthe operation tools, improve the efficiency of cash customer management, so as to jointly ensure the healthyachievement of the business objectives and realize long-term and stable business growth.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Credit account customers: During the first half of 2019, SF Holding continued to focus on the industrysupply chains by distinguishing between different industries, between different business use cases throughoutend-to-end processes, refinement of all touchpoints, and digitization, to further improve customer service qualityand the customer experience, the number of credit account customers thereby increased steadily. We improved theexperience of small and medium customers through online platform operation. The number of active accountcustomers grew from 950,000 in June 2018 to 1.17 million in June 2019, representing an increase of 23%year-on-year. Meanwhile, by approaching key industry customers with integrated logistics solutions, the customerstructure has been continuously optimized, and the proportion of major customers spending over RMB1millioncontinued to increase.

The stable and growing number of active customers, the full-cycle risk prevention and control system, themulti-product portfolio, and the diversified solutions collectively ensure the long-term stable and healthy growth ofSF Holding’s revenue.

Time-definite Express: In 2018, SF Holding continued to consolidate and enhance the competitiveness of theexpress products. Combining key resource capabilities and technological means, we optimized timelinessthroughout the entire process of express delivery service and achieved a rational price differentiation of productsusing the technology pricing/cost model to improve product cost performance. Meanwhile, we focused on thediversified needs of our customers and created regionalized products. Diversified high-quality services ensured thehealthy and stable growth of the business. During the reporting period, revenue from time-definite express wasRMB26.765 billion. The average delivery time of shipments decreased by 3.5 hours as compared with the sameperiod of last year. In the future, with the further improvement of the cost performance, the core competitivenesswill be further consolidated and the steady growth of the time-definite express business will be maintained.

Economy product: SF Holding continued to optimize and upgrade the economy products, improve a faster,safer and more cost-effective ground transportation network, and optimize the end-to-end operation segments,models and framework of products through scientific and technological empowerment, thereby further improvingthe utilization rate of resources, reducing costs and increasing efficiency, and enhancing the competitiveness ofproducts. On the premise of ensuring service quality and timeliness, we made full use of the existing resources bymeans of business demand forecasting and route planning, gave full play to the marginal effect of the existingresources, and integrated and optimized the existing resources. For example, we merged the trunk and branch routeswith overlapping flow direction, time period and efficiency, replaced the vehicles with larger-capacity models, andreduced the number ad hoc routes and branch routes, thus further improving the efficiency of scale and significantlyincrease the loading rate.

The fast-growing traffic of the second-category e-commerce in the past two years is at a much faster rate thanthat of its peers. The Company leveraged its unique advantages as a third-party logistics service provider, gainedcustomers' trust, and launched products and services with high cost performance through utilization of big data andsystem integration. In May 2019, the Company launched new products such as preferential distribution for specificmarkets and customers to meet the diversified needs of customers, and quickly gained market recognition, whichaccelerated the increase in the revenue from and market share of economy products. The new products brokethrough the price limitation of the original products, filled the gap in the price range, improved the economy productportfolio and constantly kept pace with the market competition. In the meantime, through targeted sales approachand technological means, the new products optimized the end-to-end operation model, such as centralized collectionof bulk items, delivery / pick-up by customers through transit depot, delivery to Hive Box locker, and so on, basedon the characteristics and needs of customers' business, thereby further improving the utilization efficiency of stockresources and transport capacity, achieving cost reduction and efficiency increase, and at the same time realizingmore flexible and competitive quotations.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

During the reporting period, the revenue from economy products was RMB11.46billion and the overalltimeliness fulfillment rate was 5% higher than that of during the same period of last year.

3. Strong development momentum of new businesses

(1) Freight

The freight business of SF Holding is divided into SF Freight and SX Freight. SF Freight is positioned in themedium to high-end market with high-level requirements for timeliness, quality and service experience, and SX ispositioned in the mid-end market.

Through years of intensive development and cultivation, SF Freight has accumulated a large number of leadingcustomers across different industries including Huawei, Midea and Hisense. These high-quality customers not onlyhave stable operations and strong risk resilience, but also diversified service requirements, which provides solidcustomer resource support and sustained momentum for the rapid development of SF Freight.

Relying on the advantages of SF Holding's network and resources, SF Freight provides customers withdoor-to-door service, which is fast, stable, efficient, reliable, and cost-effective. At the same time, based on thepersonalized needs of different customers, it offers tailor-made end-to-end integrated supply chain solutions andservices to customers, which effectively solves customer needs and pain points, and thereby helps customers seizedevelopment opportunities. In addition, having benefited from the talents and technological reserves of SFTechnology, SF Freight has set up a specialized technology team to develop a digital operating system andautomation equipment suitable for the business scenarios of SF Freight by using SF Holding's exclusive advancedtechnologies such as electronic freight maps, big data, computer graphics, operational planning, mobile AIcomputing, and other advanced technologies, which serves the scientific decision-making and fine operation of SFFreight.

As at the end of the reporting period, SF Freight had 44 transit depots and 1,131 service points, with overall sitearea of over 1.38 million m

, over 15,000 delivery vehicles, over 930 trunk routes and more than 7,000 branchroutes, covering 362 major cities and regions in 31 provinces nationwide. During the first half of 2019, SF Freightstayed far ahead of its peers in terms of the growth rate in the high-end market, while the overall market sharecontinued to increase and the service quality steadily improved. In the second half of the year, the Company willcontinue to enhance the network frameworks, strengthen study and development in sub-sectors and heavy cargosorting automation and technological application capacity building to further improve efficiency andcustomer experience, and support the rapid growth. "

SX Freight" is an independent brand of Shunxin Express, a subsidiary of SF Holding, focusing on the wholenetwork mid-range freight market. As of June 30, 2019, SX Freight had 3,918 affiliated outlets and 132 directoperation stations, with a total area of over 320,000 m

and a 100% coverage of the major cities and regionsnationwide. SX Freight’s cumulative cargo volume increased by 114% during the first half of 2019 as comparedwith the same period of last year and its overall volume growth momentum has maintained a leading position in theindustry. In the second half of the year, SX Freight will continue to strengthen the framework development andenhance penetration of network coverage. SX Freight ensured cost performance with quality, and shared resourceswith SF Freight in respect of operation mode and product positioning. At the same time, SF Freight and SX Freightalso shared resources and deepened complementarities in terms of depots, routes and transport capacities, therebyhelping each other enhance the competitiveness of their operation networks and service quality and jointlyproviding customers with comprehensive logistics solutions.

During the first half of 2019, the revenue from Company's freight business as a whole amounted to RMB5.072billion, representing an increase of 46.99% year-on-year, significantly higher than that of its peers.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

(2) Cold Chain for food products and pharmaceuticals

At present, the domestic cold chain market is fragmented. Market participants are mainly regional or localplayers. SF Holding is the first logistics company in China to initially establish a national cold chain network. As ofthe end of the reporting period, SF Holding held 25 refrigerated food product warehouses with operation area of158,800 m

, 433 refrigerated trucks, and food product transportation routes across core cities of China. SFHolding’s refrigerated food product warehouses have already acquired international high-standard DQMPcertification, equipped with advanced automated refrigeration equipment, smart temperature monitoring and controlsystems, and integrating the ability to manage multiple temperature zones, such as freezing, refrigerated, constant,and room temperatures, with high-standard cold storage capabilities. Relying on advanced cold chain technologiessuch as customized packaging, high-energy storage refrigerant temperature control technology, storage temperatureand humidity monitoring and warning systems connected to vehicle GPS, vehicle-mounted temperature control andreal-time monitoring systems, SF Holding provides customers with professional and efficient end-to-end cold chainlogistics distribution services throughout the whole process. The cold chain business already has covered manysectors including production, e-commerce, sales and retail. Major customers include Hitomorrow, Family Mart andHonest Dairy.

SF Holding has developed the concept of "Branch-to-Tongue, Farm-to-Table" for the promotion of Chineseagricultural products. On top of the foundation built by continuously focusing on B2C in the industry value chain,SF Holding will further develop the B2B service market, and enhance its "market competitiveness" under variousbusiness scenarios through "model innovation, cost reduction and efficiency enhancement" to meet thedifferentiated needs of diverse customers. Driven by technology, SF Holding created "new models of industrysolutions" for the regional special products and developed a new operation model of "trunk transportation +delivery" for Shandong peach and Guangxi mango and "warehouse + trunk transportation + delivery" for Shandongseafood and aquatic products. SF Holding adhered to the concept of "opening-up and win-win cooperation", sharedpromotion channels and commercial platform resources, and actively built regional public brands so as to help bringmore special agricultural products out from the mountains to across the country. Among them, SF Holding, alongwith the government and local associations, jointly organized a total of 17 activities under the themes of logistics orproduction and marketing coordination. At present, the main agricultural projects include, among others, Yantaicherry, Lingnan lychee, Xianju waxberry, Yangshan peach, Yunnan flower, and Ganzi matsutake. In the future, SFHolding will continue to focus on "innovation" and "efficiency enhancement" in order to assist in the healthy andrapid development of regional special economies by means of model adjustment, process optimization, andtechnology empowerment.

In recent years, the government has continuously pushed forward the healthcare reforms. Under the influenceof policies such as the tiered diagnosis and treatment model, the centralized drug procurement program in “4+7cities”, and the two-invoice system, pharmaceutical resources have extended to grassroots medical organizations,and pharmaceutical circulation channels have been developing in a horizontal and decentralized way. This hasposed a great test to the network breadth and depth of pharmaceutical logistics distribution enterprises, as well as thequality and safety guarantee in the process of pharmaceutical transportation and storage. SF Holding made use of itsresource advantages and relied on mature logistics network and technological capabilities to further improve adeeper and broader pharmaceutical service network and provide services with the total solution capabilities ofcustomers in core industries. As of the end of the reporting period, SF Holding's pharmaceutical network covered137 prefecture-level cities and 1,003 districts and counties, had 4 GSP certified pharmaceutical warehouses with atotal area of 30,000 m

in addition to 36 trunk routes of pharmaceutical transportation, linking the core cities ofNortheast, North, East, South and Central China, and had 236 refrigerated trucks verified by GSP, and equippedwith a complete logistics information system and a self-developed TCEMS whole-process visual monitoringplatform. SF Holding focused on providing professional, safe and controllable logistics supply chain services tocustomers in the pharmaceutical industry, covering many fields such as production, e-commerce, sales and retail inthe pharmaceutical industry. Major customers in the pharmaceutical industry include Bayer, Sanofi, BoehringerIngelheim, Hengrui Pharmaceuticals, Harbin Pharmaceuticals, CR Sanjiu, Qilu Pharmaceuticals, GPHL, etc.

In the first half of 2019, the Company's revenue from the cold chain and pharmaceutical business amounted toRMB2.352 billion, representing an increase of 53.93% year-on-year, maintaining its rapid growth.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

(3) Intra-city instant delivery

With the popularity of new retailing, the application scenarios of intra-city instant delivery are becomingincreasingly abundant, and consumers are paying more and more attention to the high-quality last mile deliveryexperience. The instant delivery market reached RMB120 billion in 2019, and is expected to maintain a compoundannual growth of over 30% in the following three years. The market will exceed RMB200 billion in 2021, with greatmarket potential.

In the past three years, SF Holding has provided standardized intra-city delivery services with high costperformance for catering, supermarket, clothing, pharmaceuticals and other industries, as well as customizedservices with different scenarios, delivery distances and delivery models based on the special needs of differentcustomers. SF intra-city delivery business has always been focusing on the value proposition of "high quality, highefficiency and full scene" in the field of instant delivery, with rich and diversified products, flexible and diversetransport models and efficient operation and management, thereby building a nationwide instant delivery networkwith high quality and efficient delivery and rapidly increasing market share.

In terms of brand image, SF intra-city instant delivery has built a neutral and reliable market image, which canfully promote the brand value proposition to the customers, accumulated a large number of customers and goodreputation, and has become the preferred third-party distribution partner for independent merchants in the industry.Our partner brands include McDonald's, KFC, Luckin Coffee, Tianhong, Yonghui, Pizza Hut, Uniqlo and otherindustry-leading customers.

In terms of products and customer services, we not only continued to provide the best quality and customizedbrand products for partner brands, but also launched economy products for small and medium-sized businesses toform a diversified and healthy business portfolio. In terms of personal urgent delivery, the business has covered themajor urban areas of major cities across China, providing 24/7 direct delivery service.

In terms of operation and resource support, we continued to promote the integration of mixed transport models,improve rider efficiency and further optimize operating costs. As for the service quality, we have always beenleading the industry in terms of aspects including personnel quality, equipment support, system level, and after-salesservice. We have also been providing customers with professional, safe, efficient, stable, high-standard andhigh-quality delivery even in peak periods or abnormal weather conditions. In the future, we will continue toenhance our ability to provide high-quality and efficient instant delivery services, and will also provide one-stopnew retail solutions for businesses focusing on the needs of retail operators, helping businesses to create lifestyleexperience at zero distance by bringing businesses to zero distance from consumers while bringing consumers tozero distance from what they want at the moment.

During the first half of 2019, revenue from the Company's intra-city delivery business amounted to RMB0.786billion, representing an increase of 129.13% over the same period last year, much higher than the average growthrate of the industry.

(4) International Express

SF Holding is committed to providing convenient and reliable international express delivery and logisticssolutions for domestic and foreign manufacturing companies, trading companies, cross-border e-commerce, andconsumers, including international standard express, international economy express, international small parcel,overseas warehousing, transshipping, international e-commerce express, and other different categories of timingstandards and import/export services. In addition, we can provide integrated and customized import/exportsolutions based on customer needs including market access, transportation, customs clearance, and delivery. SFinternational standard express / international economy express businesses cover 62 countries including the UnitedStates, the European Union, Russia, Canada, Japan, South Korea, India, Brazil, Mexico, and Chile, among others.In June 2019, 8 African countries including Tanzania, and Nigeria, among others were newly added to the scopeof international economy express business. The international small parcel business covers 225 countries andregions across the world. Under the influence of the complex international environment, the demand for SF'scross-border logistics services by domestic and foreign enterprises is increasingly growing. SF Holding willfurther speed up the international network layout so as to help outstanding enterprises/products "go global" and"bring in" overseas high-quality enterprises/products to China.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

In response to the "the Belt and Road" initiative, SF Holding has been helping Chinese enterprises with theiroverseas positioning, providing customized cross-border supply chain solutions based on diversified needs ofenterprises, and providing cross-border relocation logistics solutions for diversified industry value chains such ascross-border factory relocation, cross-border transportation of domestic supply chain raw materials, local VMIwarehouse of overseas supply chain raw materials, and overseas F2B distribution and delivery. In August 2018,SF’s Sino-Indian all-cargo flight helped a Chinese leading customer 3C brand by providing cross-border rawmaterial transportation and supply chain integration solutions. In May 2019, SF Holding provided a full-chaincross-border factory relocation from China to India for a domestic high-tech electronic parts manufacturer.

SF Holding has been committed to providing end-to-end supply chain solutions for overseas renownedenterprises and brands to enter the Chinese market. SF Holding has been serving an international chip andsemiconductor manufacturer since 2017. In 2019, SF Holding became the brand's core logistics provider andsuccessfully entered the supply chain service provider system of the manufacturer's upstream and downstreamsupporting industries. With the increasing influence of SF Holding among overseas brands, an increasing numberof international enterprises choose to enter the Chinese market with the help of SF Holding. In September 2018,SF Holding became a cross-border e-commerce export logistics provider for Tophatter, a US-based SFB platform,serving 30% of the platform's sellers. The two sides jointly organized a special session of SF InternationalTraining Class to provide an exchange platform for cross-border sellers from cities such as Hefei, Changsha andGuangzhou, with a daily average shipment increase of 200%. In April 2019, SF Holding became Kaola.com’scertified logistics service provider, providing Kaola users with cross-border import logistics solutions from the US,South Korea, and Singapore, with the inflow from the US covering over 20% of customers of the platform.

During the first half of 2019, the revenue from the Company's international express business amounted toRMB1.202 billion, maintaining its steady development.

(5) Supply Chain Business

In August 2018 and February 2019, SF Holding completed the acquisition of the cold chain business ofHAVI in mainland China, Hong Kong China and Macao China and the supply chain business of DHL in mainlandChina, Hong Kong China and Macao China respectively, and established SF’s New HAVI and SF DHL businesses.The integration and synergy between New HAVI and SF DHL businesses with SF Holding’s original businesseshave achieved initial results. On the one hand, SF rapidly learned from and replicated the supply chain solutionsand management capabilities of New HAVI and SF DHL. On the other hand, driven by technology and data, basedon SF’s DNA genes, and through digital technologies such as the Internet of Things, big data, artificialintelligence, SF's technological solutions drive the transformation and upgrading of the supply chain to jointlyreshape the supply chain for customers and provide comprehensive solutions with multi-scenario products.

The integrated supply chain solutions and service capabilities of New HAVI are both professional in designand feasible for implementation. In addition, New HAVI has a high-quality supply chain plan implementationcapability, and continuously optimized business workflow, and strengthened the development of resources andtechnology framework so as to ensure stable and efficient service quality and supply chain plan implementation,which has been highly recognized by customers and the industry. In March and May 2019, New HAVI wasconferred the titles of "China Outstanding Catering Supply Chain Service Provider" (中国优秀餐饮供应链服务商) and the "Smart Logistics Service Brand Enterprise" (智慧物流服务品牌企) by the Cold Chain LogisticsCommittee of the China Federation of Logistics and Purchasing and the China Communications andTransportation Association respectively.

In the first half of 2019, New HAVI adopted a flexible and targeted business expansion strategy to meet theneeds of customers of varying scales and across different industries, and achieved sustained and healthy businessgrowth. At the same time, New HAVI continued to strengthen the construction of core resources and technologyframework to support rapid business development. Currently, ithas 30 highly efficient cold chain logistics centers(including internal leasing) in operation covering 19 core cities. New HAVI and SF's various business sectors areactively cooperating with each other. SF Holding and New HAVI have integrated and shared resources such aswarehousing and transportation capacity to improve resource efficiency. In terms of IT systems, with the supportof SF Holding, New HAVI has reconstructed and upgraded its existing system service capacity and now has thecapacity to carry out platform business. On the other hand, SF Holding's various business segments have joinedforces with New HAVI to jointly expand cooperation with industry benchmark customers and provide customerswith high-quality cold chain B2B2C industry solutions. During the reporting period, New HAVI has signeddozens of new clients.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Relying on the solid logistics infrastructure and customer base of SF Holding’s extensive network and theglobal leading supply chain management experience of Deutsche Post DHL Group, SF DHL provides high-qualityintegrated supply chain solutions to customers. In the first half of 2019, SF DHL seized the opportunities arisingfrom enterprise reform to improve supply chain efficiency and lean management, and tapped into customers'demand for supply chain upgrading. Among them, in the automotive and industrial manufacturing sectors,benefiting from its extensive experience in inbound logistics, after-sales logistics and digital innovation capability,it actively utilized technological capacity of SF Holding and its technology partners to help customerscontinuously improve the quality, efficiency and reliability of their supply chain. In terms of the fast-movingconsumer goods and retail industry, with the help of the capabilities of SF Holding's big data team and the serviceexperience of e-commerce customers, it successfully completed multiple B2B/B2C integrated warehouses andopened up new business fields. In terms of the pharmaceutical industry, acquiring key qualifications andcapabilities through mergers and acquisitions has achieved rapid growth. As for the high-tech and 3C industries,SF DHL has integrated resources with SF Holding's customers to jointly develop China's domestic high-techindustries and 3C enterprise customers. During the first half of 2019, SF DHL's revenue continued to grow,leading the enterprise supply chain market.During the first half of 2019, the revenue from the Company's supply chain business amounted to RMB1.843billion, of which the revenue from SF DHL was incorporated since March 2019 after the acquisition completed. Inthe future, New HAVI and SF DHL will further bring synergy to the Company, thereby driving the Company'soverall supply chain business to grow rapidly.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

II. Analysis on Main BusinessFor details, please refer to “I. Overall Business Performance of the Company during the First Half of 2019” underthe section “Chapter 4 Management Discussion and Analysis of Business Operation.”

Year-over-year changes to major financial data

Unit: RMB

Current ReportingPeriod

The same period ofprevious year

Increase/Decreaseover the same period ofprevious year

RationaleRevenue 50,074,704033.85 42,550,906,755.4217.68%Cost of revenue 42,152,044,224,73 34,483,562,144.3916.44%Selling and distributionexpenses

884,549,456.76 973,618,226.32-9.15%General and administrationexpenses

4,843,661,455.94 3,844,763,325.32

25.98%

Financial expenses 331,609,607.60 54,420,723.81509.34%

Increased due to the increase ininterest expenses from increasedborrowings and decrease ininterest income from inter-bankdeposits.Income tax expense 882,642,296.52 790,949,730.0811.59%Research and developmentinvestment

1,208,951,470.76 773,427,188.15 56.31%

R&D investment (includingcapitalized and expensed R&D)increased by RMB 436 million,or56.31%, mainly due to theincrease in research anddevelopment activities.Net cash flow fromoperating activities

4,816,886,549.68 2,369,608,790.80

103.28%

Increased due to the net profitincrease and impact of cashinflow from sales of goods andservices being greater than cashoutflows from purchases ofgoods services and payrollexpenses.Net cash flows frominvesting activities

-13,153,751,568.98 -4,999,614,188.54

163.10%

Decreased due to the cashoutflow in acquisition ofsubsidiaries, increase in net cashoutflow of wealth managementproducts and the purchase oflong-term assets.Net cash flows fromfinancing activities

4,968,519,388.28 -1,216,079,983.17-508.57%

Increased due to the increase innet inflows of borrowings.Net increase in cash andcash equivalents

-3,371,260,653.60 -3,832,719,722.18-12.04%

Please refer to the above analysisof cash flow changes foroperating activities, investmentactivities and financing activities.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Did significant changes occur in profit composition or sources of profit?

□Applicable √Not applicable

Composition of revenue

Unit: RMB

Current Reporting Period The same period of previous yearIncrease/Decreaseover the same period

of previous yearAmount

Proportion of

Revenue

Amount

Proportion of

RevenueRevenue 50,074,704,033.85 100%42,550,906,755.42100% 17.68%Categorized by industryExpress logistic andsupply chain

49,479,804,469.27 98.81%42,160,162,854.7799.08% 17.36%Sales of goods 253,670,085.55 0.51%54,768,168.170.13% 363.17%Others341,229,479.03 0.68%335,975,732.480.79% 1.56%Categorized by productTime-define Express26,765,052,056.21 53.45%25,731,642,712.2260.47% 4.02%Economy Express 11,460,073,418.28 22.89%9,885,355,748.4523.23% 15.93%Heavy Cargo5,072,343,493.02 10.13%3,450,872,512.368.11% 46.99%Cold Chain 2,352,046,365.17 4.70%1,528,029,936.003.59% 53.93%Intra-City Delivery785,671,660.75 1.57%342,887,870.670.81% 129.13%International Express 1,201,793,431.30 2.40%1,221,374,075.082.87% -1.60%Supply Chain1,842,824,044.54 3.68%N/AN/A N/AOthers 594,899,564.58 1.19%390,743,900.650.92% 52.25%Categorized by regionExpress logistic andsupply chain –EastChina

14,440,657,980.91 28.84%12,443,526,804.1529.24% 16.05%Express logistic andsupply chain –SouthChina

11,633,487,344.92 23.23%10,660,429,957.4225.05% 9.13%Express logistic andsupply chain –NorthChina

11,295,843,131.23 22.56%9,245,291,089.1121.73% 22.18%Express logistic andsupply chain–Central China

6,674,286,669.48 13.33%5,656,142,970.0213.29% 18.00%Express logistic andsupply chain –WestChina

3,995,871,735.90 7.98%3,250,923,966.297.64% 22.91%Express logistic andsupply chain –HongKong and Macao

1,106,991,784.15 2.21%644,905,256.711.52% 71.65%Express logistic andsupply chain–Overseas

332,665,822.68 0.66%258,942,811.070.61% 28.47%Commodity andothers

594,899,564.58 1.19%390,743,900.650.92% 52.25%

Note: Product revenue and district revenue in the preceding table have not been audited.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Industries, products, or regions accounting for more than 10% of company revenue or operating profit

√Applicable □Not applicable

The Company is required to comply with the disclosure requirements of the “Guidelines of the Shenzhen StockExchange for Industrial Information Disclosure No.9–Listed Companies Engaged in the Express DeliveryServices Business”

Unit: RMBRevenue Cost of revenue

GrossProfitMargin

RevenueIncrease/Decrease overthe same periodof previous year

Cost of revenue

Increased orDecreased overthe same periodof previous year

Gross Profit MarginIncreased orDecreased over thesame period ofprevious yearIndustriesExpress logisticand supply chain

49,479,804,469.27 39,676,010,637.5619.81%17.36%15.96% 0.96%

During the reporting period, the Company has accounted its operation costs according to the nature of resourcesconsumed appropriately. However, a fair and accurate allocation of cost by product or by region has not beenpossible. It was because the express and logistics industry itself was basically a complex network, by highlyconnection, overlaps in different types of resources consumed, all direction of waybills, a tremendous number ofcustomers, highly crossover of different types of resources fully shared.

Disclosure of express delivery volumes, revenues and average revenue per shipment and analysis of changes andrationale

For more details, please refer to the “I. Overall Business Performance of the Company during the First Half of2019”under the section “Chapter 4 Management Discussion and Analysis of Business Operation”.

Explanation for related changes greater than 30% as compared with those in the prior year period

□Applicable √Not applicable

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

III. Non-core Business Analysis

√Applicable □Not applicable

Unit: RMB

Amount

Proportion of

Total Profit

Reason SustainableOther income 164,346,392.59 4.19%

Mainly including government grantsrelated to daily activities.

NoInvestment income 386,073,900.85 9.83%

Mainly including investment incomefrom wealth management products,arising gains/ (losses) from the disposalof long-term equity investment and shareof net gain or loss of investee companiesby equity method.

Revenue fromwealth managementproducts issustainable, whileother investmentincome is notsustainable.Gains and losses arising fromchanges in fair value

330,207,611.55 8.41%

Mainly including changes in fair value ofother non-current financial assets.

NoAsset impairment losses 54,112,179.14 1.38%

Mainly including impairment losses oflong-term equity investment andintangible assets

NoCredit impairment losses 148,865,353.45 3.79%

Mainly including bad debt losses ofaccounts receivables and other accountsreceivables.

NoGains /(Losses) on disposal ofassets

-12,876,151.73 -0.33%

Mainly including the gains or losses fromdisposal of fixed assets.

NoNon-operating income 70,153,540.77 1.79%

Mainly including government grantsunrelated to daily activities andcompensation income

NoNon-operating expenses 41,761,260.71 1.06%

Mainly including donations,compensation expenses, and penalties.

No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

IV. Analysis of Assets and Liabilities

1. Major Changes in Asset Composition

Unit: RMB

End of Current Reporting PeriodEnd of previous year

Increase/Decrease inProportion

Major ChangesAmount

Proportionof TotalAssets

Amount

Proportion ofTotal AssetsCash at bank andon hand

12,487,217,955.15

15.41%16,131,119,850.5622.52%-7.11%

For details, please referto analysis on cash flowin“II. Analysis on MainBusiness” under Chapter4 ManagementDiscussion and Analysisof BusinessOperation.

Financial assetsheld for trading

2,525,764,638.79

3.12%---

In accordance with newstandards for financialinstruments, financialassets at fair valuethrough profit or losswas restated as financialassets held for trading;certain structureddeposits that did notcarry the characteristicsof financial assets’contractual cash flowsfor principal and interestwere restated from othercurrent assets tofinancial assets held fortrading;available-for-salefinancial assets wererestated as investment inother equity instrumentsand other non-currentfinancial assets. Exceptfor the abovere-classifications,changes in financialassets held for tradingfor the current period aremainly due to increase instructured deposits.Financial assets atfair value throughprofit or loss

--14,441,978.090.02%-

Please refer to the abovefinancial assets held fortrading description.Available-for-salefinancial assets

--3,423,527,060.274.78%-

Please refer to the abovefinancial assets held fortrading description.Investments inother equityinstruments

4,042,698,444.01

4.99%---

Same as the descriptionfor the above financialassets held for trading ,except for the impact ofreclassification, changesfor the current period aremainly due to increase inequity investment inFlexport.Other non-currentfinancial assets

405,065,380.55

0.50%---

Please refer to the abovefinancial assets held fortrading description.Accounts 8,438,161,191.55 10.41%7,352,877,748.8710.27%0.14% Increased due to the

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

receivables increase in revenue.Inventories 735,112,901.55 0.91%818,050,025.021.14%-0.23% No significant changes.Other currentassets

4,940,497,682.72 6.10%3,003,959,574.304.19%1.91%

Increased due to theincrease of wealthmanagement products.Long-term equityinvestments

2,250,846,960.26

2.78%2,203,431,122.033.08%-0.30% No major changes.

Investmentproperties

2,478,519,190.07

3.06%2,453,931,501.543.43%-0.37% No major changes.

Construction inprogress

6,216,142,800.45 7.67%6,507,907,313.079.09%-1.42% No major changes.Fixed assets 15,090,191,297.79 18.62%13,966,702,267.4519.50%-0.88%

Increased due to theincrease in aircraft,accessories andbuildings.Intangible assets 9,269,904,840.92 11.44%6,662,097,473.899.30%2.14%

Increased due to thevalue-added intangibleassets arising fromacquisition ofsubsidiaries andself-developed software.Capitalizeddevelopmentexpenditures

613,265,656.66

0.76%585,212,743.770.82%-0.06% No major changes.Goodwill 3,528,248,763.10 4.35%590,365,319.200.82%3.53%

Increased due toacquisition ofsubsidiaries.

Short-termborrowings

10,329,017,919.04

12.75%8,585,129,399.6311.99%0.76%

The company’sborrowings includeshort-term borrowings,the long-termborrowings and thelong-term borrowingsdue within one year .The total amount ofthese borrowingsincreased byRMB6.88billion compared with2018, mainly due toincrease in borrowings.Current portion ofnon-currentliabilities

577,267,751.27

0.71%273,222,821.650.38%0.33%

Please refer to the aboveshort-term borrowingsdescription.Long-termborrowings

5,922,181,122.48

7.31%998,287,835.191.39%5.92%

Please refer to the aboveshort-term borrowingsdescription.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

2. Assets and liabilities measured at fair value

√Applicable □Not applicable

Unit: RMBOpening Balance

Changes in FairValue Gains and

Losses inCurrent Period

Accumulated

Fair ValueChangesIncluded in

Equity

ProvisionforImpairmentin CurrentPeriod

Increase in theCurrent Period

Amount ofSales inCurrentPeriod

Closing BalanceFinancial assets

1. Financial assets held

for trading(excludingderivative financialassets) ( Note1)

1,146,225,204.41 330,542,683.78 2,029,309,222.46

79,244,163.94 2,930,446,915.60

2. Derivative financial

assets726,641.31 -335,072.23

383,103.74

3. Investments in other

equity instruments2,812,830,084.90 24,629,582.65 630,682,562.62 54,996,904.29 4,042,698,444.01Total financial assets

3,959,781,930.62 330,207,611.55 24,629,582.65 2,659,991,785.08134,241,068.23 6,973,528,463.35Total

3,959,781,930.62 330,207,611.55 24,629,582.65 2,659,991,785.08 134,241,068.23 6,973,528,463.35

Note1: In the current period, financial assets include structured deposits that do not carry the characteristics of contract cash flow forprincipal and interest. The structured deposits have short maturities and are highly liquid, and net purchases and sales for the currentperiod is stated in the current period. (The purchased amount is RMB 16,980,000,000.00 and the sales amount is RMB15,038,730,804.00.)

Did significant changes occur for the Company's major asset measurement attributes during the reporting period?

□Yes √No

3. Limitation of asset rights as of the end of the reporting period

ItemBook Value at the End of Period(RMB)Limitation ReasonCash at bank 32,247.00SF Holding's Letter of GuaranteeCash at bank 592,676,085.96Legal reserves in the Central BankFixed assets 534,736,222.21 Long-term borrowing mortgageIntangible assets 1,292,367,113.77 Long-term borrowing mortgageInvestment properties 496,985,596.74 Long-term borrowing mortgageTotal 2,916,797,265.68

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

V. Analysis of Investments

1. General situation

√Applicable □Not applicable

The Company is required to comply with the disclosure requirements of the “Guidelines of the Shenzhen Stock

Investment Amount During theReporting Period (RMB)

Investment Amount During the sameperiod of previous year (RMB)

Change9,243,454,423.59 5,596,644,897.0765.16%

Exchange for Industrial Information Disclosure No.9 –Listed Companies Engaged in the Express DeliveryServices Business.”:

Investment Amount During the Reporting Period (RMB)Office and Buildings 93,446,749.92Land 299,994,256.45Warehouse 262,012,638.96Sorting center 432,052,604.01Aircraft 902,953,344.52Vehicle 142,648,423.61Information technology equipment 289,260,664.05Equity investments 5,948,878,786.99Others 872,206,955.08Total 9,243,454,423.59

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

2. Significant Equity Investment Obtained During the Reporting Period

√ Applicable □Not applicable

Unit: RMB10 thousandsName ofinvesteecompany

Principalbusiness

Investmentmethod

investmentamount

Shareholding

ratio

Capitalsource

Partner

Investment

period

Product

type

Progressas of thebalancesheet date

Expected

return

Investmentprofit/lossfor current

period

Whetherinvolved in

litigation

Date ofdisclosure

Disclosure indexDHLSUPPLYCHAIN(HONGKONG)LIMITEDand DHLLogistics(Beijing)Co., Ltd.

Supplychainbusiness

Acquisition 550,000 100%

Self-ownedandself-raisedfunds

N/AN/AN/Acompleted N/AN/A

The subjectmatter of theacquisitiondoes notinvolvemajordisputes,litigation orarbitration

February19, 2019

Refer to the AnnouncementNo.2018-094, No.2019-013 andNo.2019-023 disclosed by theCompany on CNINFO(http://www.cninfo.com.cn).Total -- -- 550,000 -- -- -- -- -- -- ------ -- --

3. Significant Non-Equity Investment Ongoing During the Reporting Period

□Applicable √ Not applicable

4. Financial Assets Measured at Fair Value

√Applicable □Not applicable

Unit: RMBAsset Type Initial Investment Cost

Changes in FairValue Gains andLosses in Current

Period

Accumulated Fair

Value ChangesIncluded in Equity

Amount ofPurchase During

the Reporting

Period

Amount ofSales Duringthe Reporting

Period

Accumulated

Investment

Income

Closing Balance Capital sourceStock 756,424,305.71 - 31,339,063.00 - 76,308,098.62 7,595,857.55 792,918,258.45 Self-owned fundsFinancial derivatives - -335,072.23 -- - 233,341.47 383,103.74Self-owned fundsOthers 5,429,254,608.57 330,542,683.78 -6,709,480.352,659,991,785.08 57,932,969.61 71,912,874.60 6,180,227,101.16 Self-owned fundsTotal 6,185,678,914.28 330,207,611.55 24,629,582.65 2,659,991,785.08 134,241,068.23 79,742,073.62 6,973,528,463.35--

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

5. Investments in Securities

√ Applicable □Not applicable

Unit: RMBSecurityType

StockCode

Abbreviationof Security

InitialInvestment

AccountingMeasurementModel

Book value atthe beginningof the reporting

period

Gains and lossesfrom changes infair value during

the period

Accumulated

fair valuechangesincluded in

equity

Purchaseamountduring thereporting

period

Sales amount

during thereporting

period

Gains andlosses of thereportingperiod

Book value atthe end of the

reporting

period

Accountingitems

CapitalsourceDomesticand foreignstock

06166China VAST 414,614,556.49

Fair valuemeasurement

528,918,442.86 --61,849,385.15 ---467,881,009.93

Investmentsin otherequityinstruments

Self-ownedfunds

Domesticand foreignstock

01810

XiaomiCorporation

209,281,978.58

Fair valuemeasurement

157,200,330.90 --35,559,796.11 ---121,888,164.58

Investmentsin otherequityinstruments

Self-ownedfunds

Domesticand foreignstock

01492Zhongdi Dairy 111,150,770.64

Fair valuemeasurement

49,004,561.41 --925,435.39 ---48,165,333.94

Investmentsin otherequityinstruments

Self-ownedfunds

Domesticand foreignstock

000697

LigeanceMineral

-

Fair valuemeasurement

58,929,974.64 --3,933,070.35 -54,996,904.29 --

Investmentsin otherequityinstruments

Self-ownedfunds

Domesticand foreignstock

300771

ZhilaiTechnology

21,377,000.00

Fair valuemeasurement

21,377,000.00 -133,606,750.00 ---154,983,750.00

Investmentsin otherequityinstruments

Self-ownedfunds

Other securities held at the end of theperiod

- -- 13,715,336.78 --

-21,311,194.33 7,595,857.55 -----

Total 756,424,305.71 -- 829,145,646.59 -31,339,063.00 -76,308,098.62 7,595,857.55 792,918,258.45 ----

Disclosure Date of Securities Investment Approval Board Announcement October 27, 2017Disclosure Date of Securities Investment Approval Shareholders MeetingAnnouncement (if any)

December 1, 2017

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

6. Investments in Derivatives

√ Applicable □Not applicable

Unit: RMB10 thousandsCounterparty

Related-

partyrelationship

(Y/N)

Related-

artytransactions

(Y/N)

Type ofderivatives

Initialinvestmentamount

Startingdate

Ending

date

Investmentamount atthebeginningof thereporting

period

Provision

forimpairment(if any)

Investmentamount atthe end of

thereportingperiod

Investmentamount at the

end of the

reporting

period to net

assets of the

Company

Gains/(losses)recognizedduring thereporting

periodBank No No

Interest Rateswap contracts

7,039.76 2016/07/25 2021/01/25 7,027.28 -7,039.760.18%23.33Total 7,039.76 -- -- 7,027.28 -7,039.760.18%23.33Source of funds Self-owned fundsLawsuit if applicable N/ADisclosure Date of Derivatives Investment ApprovalBoard Announcement(if any)

January 4, 2019Disclosure Date of Derivatives Investment ApprovalShareholders Meeting Announcement (if any)

N/A

Risk analysis and control measures for derivativesinvestment during the reporting period (including butnot limited to market risk, liquidity risk, credit risk,operational risk, legal risk, etc.)

In order to contain interest rate risks and reduce additional cost caused by interest rate rises, thecompany used bank financial instruments to carry out foreign exchange derivatives transactions.The company has fully evaluated and controlled the foreign exchange derivatives investment andpositions, as specified below:

1. Legal risks: The company's foreign exchange derivatives investment should comply with laws

and regulations, and the rights and obligations between the company and banks should be clearlystipulated. Control measures: The company formulated the “Hedging Management System” andreviewed the contracts strictly , defined the rights and obligations clearly in the contracts, andstrengthened the compliance inspection, so as to ensure the compliance with laws, regulations andthe company's internal policies, the company

2. Operational risk: The operational risks might be caused by employee operation, systems, etc.,

which lead to losses in the foreign exchange derivatives. Control measures: The companyestablished management systems to clarify the roles and responsibilities, approval processes andoperation processes in the foreign exchange derivatives transactions, and established a relativelycomplete supervision mechanism to reduce operational risks effectively through risk control ofoperation processes, decision-making processes and transaction processes.

3. Market risk: The uncertainty of interest rate fluctuations in the foreign exchange market lead to

relatively high market risks in the foreign exchange derivatives transactions. In the case where theinterest rate trend deviates significantly from the company's foreign exchange hedging transactions,the company's cost of locking in interest rate may exceed the amount when it is not locked, leadingto potential losses. Control measures: The company's foreign exchange derivatives tradings adheresto the principle of prudent and steady operation, and speculative transactions of foreign exchangederivatives are forbidden by internal policies. All foreign exchange derivatives transactions shouldbe based on normal business operations, and the transaction amount should not exceed the demandof actual business. The company studied and judged the trend of exchange rate and interest rate,and locked the exchange rate and loan interest rate through contracts to prevent market riskseffectively. Besides, the company recorded each transaction, check the records, and track thechanges timely, properly arranged the delivery funds to prevent delivery default risk.

Changes in fair value or market price of investedderivatives during the reporting period (the specificmethods ,relevant assumptions and parameters used inthe analysis of the fair value should be disclosed)

The Company's analysis of the fair value of derivatives is based on the financial market fair valuevaluation report provided by the bank at month end. The gains from changes in fair valuerecognized by the Company during the reporting period were RMB -335,100.Explanation of whether the accounting policies andaccounting principles of the Company's derivatives aresignificantly changed compared with the previousreporting period during the reporting period

NO

Opinions of independent directors on the Company'sderivatives investment and risk control

The independent directors believed that the company had established an internal control system forforeign exchange hedging and effective risk control measures in accordance with the requirementsstipulated by relevant laws. Under the premise of complying with national laws and regulations andensuring that the company's daily operation were not affected, the company used its own funds tocarry out foreign exchange hedging in a timely manner, which was conducive to preventing interestrate and exchange rate risks, reducing the impact of interest rate fluctuations on the company, inline with the company ,the interests of all shareholders and was no harm to the company and allshareholders, especially the interests of minority shareholders.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

7. Use of Raised Funds

√ Applicable □Not applicable

(1) Overall use of Raised Funds

√ Applicable □Not applicable

Unit: RMB10 thousandsTotal Raised Funds (Note 1) 796,851.70Total Raised Funds invested in the current year39,792.95Accumulative Raised Funds invested (Note 2)796,851.70Total Raised Funds with usage altered in the reporting period39,792.95Accumulative Raised Funds with usage altered (Note 3)372,982.30Proportion of accumulative total Raised Funds with usage altered 46.81%

Description for overall utilisation of Raised FundsAs of June 30, 2019, all funds raised have been used for relevant projects with total proceeds amounting to RMB 7,968,517,000.Proceeds used for Aviation Materials Purchasing and Flight Support Project totalled RMB2,636,220,200, that used for the ColdChain Vehicles and Temperature Control Equipment Purchasing Project totalled RMB292,008,800, that used for the InformationService Platform Construction and the Next Generation Logistics Informatisation Technology R&D Project totalledRMB3,846,502,100, and that used for the Transit Depot Construction Project totalled RMB1,193,785,900. The balance ofproceeds amounted to RMB2,972,900, all of which has been used to permanently replenish the Company's working capital.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

(2) Statement of committed investment projects of Raised Funds

√ Applicable □Not applicable

Unit: RMB10 thousandsCommitted investment projects andallocation of over-raised funds

Whetherproject has

been (or

partially)

altered

Total committed

investmentbased on netRaised Funds

Total investmentafter alteration(a)

Investment inthe current year

Accumulativeinvestment atthe end of theperiod (b)

Investmentprogress at the

end of the

period (%)

(d)=(b)/(a)

Date of asset readyfor intended use

Benefitsachieved

in thecurrent

year

Whetherexpectedbenefitshave beenachieved

Whetherfeasibility of

project has

changedsignificantlyCommitted investment projects

1. Aviation material purchase and

flight support project

Yes 268,622.08263,622.02-263,622.02 100%-Note: 4N/ANo

1.1Aviation material purchase Yes 237,622.08157,298.74-157,298.74 100%2018/12/31Note: 4N/ANo

1.2Recruitment of pilots Yes 31,000.0027,554.51-27,554.51 100%2018/12/31Note: 4N/ANo

1.3Aircraft purchase and modification Yes 78,768.77-78,768.77 100%2019/6/30Note: 4N/ANo

2. Cold storage vehicles and

temperature control equipmentpurchase

Yes 71,795.0029,200.88-29,200.88 100%-Note: 5N/ANo

2.1Purchase of vehicles for cold chain

transport

Yes 49,729.0028,056.60-28,056.60 100%2018/12/31Note:5N/ANo

2.2Purchase of EPP temperature

control containers

Yes 22,066.001,144.28-1,144.28 100%2018/12/31Note: 5N/ANo

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Committed investment projects andallocation of over-raised funds

Whetherproject has

been (or

partially)

altered

Total committed

investmentbased on netRaised Funds

Total investment

after alteration(a)

Investment inthe current year

Accumulativeinvestment atthe end of the

period (b)

Investmentprogress at theend of theperiod (%)(d)=(b)/(a)

Date of asset ready

for intended use

Benefitsachievedin thecurrentyear

Whetherexpectedbenefitshave beenachieved

Whetherfeasibility ofproject has

changedsignificantly

3.Information service platform

construction and next-generationlogistics IT research and developmentprojects

Yes 111,918.00384,650.2139,792.95384,650.21 100%2019/6/30Note: 6N/ANo

4.Distribution hub construction

projects

Yes 329,882.88119,378.59-119,378.59 100%-Note: 7N/ANo

4.1Zhengzhou SF E-commerce

Industrial Park project

Yes 50,584.68343.82-343.82 100%2018/12/31Note: 7N/ANo

4.2Changchun SF E-commerce

Industrial Park project

Yes 61,945.5122,264.73-22,264.73 100%2019/5/31Note: 7N/ANo

4.3Wuxi SF E-commerce Industrial

Park project

Yes 41,834.1022,192.87-22,192.87 100%2019/6/30Note: 7N/ANo

4.4Shanghai Shunheng Logistics Co.,

Ltd. new factory project

Yes 50,634.0518,816.19-18,816.19 100%2018/8/31Note: 7N/ANo

4.5SF Express Nantong District

Aviation Hub (phase 2) project`

Yes 33,055.34Project investment cancelled after changes

4.6Hefei smart sorting base Yes 26,427.2931,958.78-31,958.78 100%2019/6/30Note: 7N/ANo

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Committed investment projects andallocation of over-raised funds

Whetherproject has

been (or

partially)altered

Total committedinvestmentbased on netRaised Funds

Total investmentafter alteration(a)

Investment inthe current year

Accumulativeinvestment atthe end of theperiod (b)

Investmentprogress at the

end of the

period (%)

(d)=(b)/(a)

Date of asset readyfor intended use

Benefitsachievedin thecurrentyear

Whetherexpectedbenefitshave beenachieved

Whetherfeasibility of

project has

changedsignificantly

4.7SF E-commerce Industrial Yiwu

Integrated Service Center

Yes 24,900.968,287.38-8,287.38 100%2019/6/30Note: 7N/ANo

4.8Ningbo Transshipping Center Yes 22,587.927,269.33-7,269.33 100%2019/6/30Note: 7N/ANo

4.9Wenzhou Ganglu E-commerce

Industrial Park project

Yes 17,913.038,245.49-8,245.49 100%2019/6/30Note: 7N/ANoSubtotal of committed investmentprojects

-- 782,217.96796,851.7039,792.95796,851.70 ---------Investment of excess proceeds N/ATotal -- 782,217.96796,851.7039,792.95796,851.70 -- -- --- --Status of and reason for planned progress or estimated income not achieved (of aspecific project)

N/ASignificant changes in the feasibility of projects N/AAmount, usage and use progress of over-raised Funds N/AChange in implementation location of investment projects of Raised Funds N/AAdjustment to implementation method of investment projects of Raised Funds N/A

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Committed investment projects andallocation of over-raised funds

Whetherproject hasbeen (orpartially)altered

Total committedinvestmentbased on netRaised Funds

Total investmentafter alteration(a)

Investment inthe current year

Accumulativeinvestment atthe end of theperiod (b)

Investmentprogress at the

end of the

period (%)

(d)=(b)/(a)

Date of asset ready

for intended use

Benefitsachieved

in thecurrent

year

Whetherexpectedbenefitshave beenachieved

Whetherfeasibility ofproject haschangedsignificantly

Upfront investment and replacement of investment projects of Raised Funds

Pursuant to the resolution of the seventh meeting of the fourth Board of Directors on 4 August 2017 and theexplicit consent given by the sponsors, the independent directors and the supervisory board, the Group wasapproved to replace upfront self-raised funds of RMB 2,645,283,600 invested in the Aviation MaterialsPurchasing and Flight Support Project, the Cold Chain Vehicles and Temperature Control Equipment PurchasingProject, the Information Service Platform Construction and the Next Generation Logistics InformatisationTechnology R&D Project, and the Transit Port Construction Project with the Raised Funds. See theannouncement (No. 2017-046) disclosed at the Securities Times, Shanghai Securities News, China SecuritiesJournal and the website of CNINFO (http://www.cninfo.com.cn) by the Company on 5 August 2017 for moredetails..Supplementing working capital temporarily with idle Raised Funds N/A

Balances of the Raised Funds during the project implementation and the reasons

As at 30 June 2019, the Company has completed all the Raised Funds projects with balance (income fromwealth management and interest income) of RMB 2,972,900, which was less than RMB 5 million or 1% of thenet Raised Funds. Pursuant to the Guidelines of the Shenzhen Stock Exchange for the Standard Operation ofListed Companies on the Small and Medium-sized Enterprise Board and the

anagement System for CorporateRaised Funds, such balance can permanently be used to supplement working capital with exemption fromapproval procedures of the Board of Directors and the shareholders’ meeting.As at 15 August 2019, the Company has transferred all the balance of Raised Funds from the Raised FundsAccount to the Company's Proprietary Funds, amounting to RMB 2,988,700 (including the total current interestof RMB 15,800 settled at the time of account closing), with account closing procedures for the Raised FundsAccount completed at the same time. See the announcement (No. 2019-091) disclosed at the website ofCNINFO (http://www.cninfo.com.cn) by the Company on 15 August 2019 for more details.Usage and allocation of the unused Raised Funds N/A

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Committed investment projects andallocation of over-raised funds

Whetherproject has

been (or

partially)

altered

Total committed

investmentbased on netRaised Funds

Total investmentafter alteration(a)

Investment inthe current year

Accumulativeinvestment atthe end of theperiod (b)

Investmentprogress at theend of theperiod (%)(d)=(b)/(a)

Date of asset readyfor intended use

Benefitsachieved

in thecurrent

year

Whetherexpectedbenefitshave beenachieved

Whetherfeasibility of

project has

changedsignificantlyDefects and other problems in utilisation and disclosure of the Raised Funds N/A

(3) Statement of Altered Investment Projects of Raised Funds

√ Applicable □Not applicable

Unit: RMB10 thousands

Project after alteration Project before alteration

Total RaisedFunds to beinvested to the

project afteralteration (a)

Actualinvestment inthe current year

Actualaccumulativeinvestment (b)

Investmentprogress(%)(c)=(b)/(a)

Date of asset

ready forintended use

Benefitsachieved inthe current

year

Whetherexpectedbenefits havebeen achieved

Whetherfeasibility of

project has

changedsignificantlyAviation material purchase andflight support project- Aircraft purchase and

modification

Aviation material purchase andflight support project- Aviation material purchase- Recruitment of pilots

78,768.77-78,768.77100%2019/6/30 Note: 4N/ANo

Information service platformconstruction and next-generationlogistics IT research anddevelopment projects

Cold storage vehicles andtemperature control equipmentpurchaseAviation material purchase and

384,650.2139,792.95384,650.21100%2019/6/30 Note:6N/ANo

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

flight support projectDistribution hub constructionprojectsDistribution hub constructionproject – Hefei smart sorting baseproject

Distribution hub constructionprojects

31,958.78-31,958.78100%2019/6/30 Note: 7N/ANoTotal -- 495,377.76 39,792.95 495,377.76 -- -- -- -- --

Alteration reason, decision making progress and information disclosure (of a specificproject)

The Company altered some investment projects of the Raised Funds based on actual conditions.Pursuant to the Proposal for Alteration of Some Investment Projects of the Raised Funds discussed at theeighth meeting of the fourth Board of Directors and approved by the third interim shareholders’ meeting in2017, the Company extracted RMB 837,688,300 from the Raised Funds invested in subprojects “AviationMaterials Purchasing and Maintenance” and “Pilot Recruitment” and invested such funds to the newsubproject “Aircraft Purchasing and Modification”, with the total Raised Funds invested in “AviationMaterials Purchasing and Flight Support Project” unchanged. Furthermore, with the total investment in“Cold Chain Vehicles and Temperature Control Equipment Purchasing Project” and “Transit PortConstruction Project” unchanged, the Company adjusted the Raised Funds invested to each subproject.RMB 2,329,392,600 extracted from the Raised Funds were invested into “Information Service PlatformConstruction and the Next Generation Logistics Informatisation Technology R&D Project”. SeeAnnouncement No. 2017-049, 2017-052 and No. 2017-059 for more details about the Company’s projectalteration.Pursuant to the Proposal for Alteration of Certain Investment Projects of the Raised Funds approved at theeighteenth meeting of the fourth Board of Directors and the first interim shareholders’ meeting in 2019, theCompany agreed to extract funds from the Raised Funds invested to subprojects “Transit Port ConstructionProject” and “Aviation Materials Purchasing and Flight Support Project” with the total investment in bothprojects unchanged. The Company extracted RMB 50,000,600 and RMB 201,591,500 from the RaisedFunds invested in subprojects “Aircraft Purchasing and Modification” and “Transit Port ConstructionProject” respectively, totalling RMB 251,592,100, plus the accumulative income from wealth management

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

and interest income amounting to RMB 146,337,400, a total amount of RMB 397,929,500 invested into the“Information Service Platform Construction and the Next Generation Logistics Informatisation TechnologyR&D Project”. See the announcements (No. 2019-001, 2019-008 and No. 2019-018) disclosed at the websiteof CNINFO (http://www.cninfo.com.cn) by the Company on 4 January 2019 and 24 January 2019respectively for more details about the Company’s project alteration.As at 30 June 2019, the Raised Funds used by Aviation Materials Purchasing and Flight Support Projectaccumulated RMB 2,636,220,200, that used by Cold Chain Vehicles and Temperature Control EquipmentPurchasing Project accumulated RMB 292,008,800, that used by Information Service PlatformConstruction and the Next Generation Logistics Informatisation Technology R&D Project accumulatedRMB 3,846,502,100, and that used by Transit Port Construction Project accumulated RMB 1,193,785,900.Status of and reason for planned progress or expected benefit has not been reached (byproject)

N/ADescription of major changes in project feasibility after changes N/A

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

(4)Statement of Fundraising projects

Overview of Fundraising projectsDisclosure date Disclosure methodFor more, please refer to “First Half 2019 Special Report on the DepositStatus and Actual Use of Funds Raised”

August 28, 2019 http://www.cninfo.com.cn

Note1: The “Total Raised Funds“ include the net Raised Funds before alteration, amounting to RMB 7,822,179,600, and the

accumulative income from wealth management and interest income from the “Information Service Platform Constructionand the Next Generation Logistics Informatisation Technology R&D Project” after alteration, amounting to RMB146,337,400.Note 2 “Accumulative Raised Funds invested” includes accumulative Raised Funds invested and upfront investment replaced after

the reception of Raised Funds of RMB 2,645,283,600.Note 3 “Total Raised Funds with usage altered” refers to the altered Raised Funds ready for investment calculated based on the

last-tier subproject of Raised Funds with usage altered listed in the Annex 2.Note 4 The Company’s business developed rapidly. Based on the Company’s future strategic plan, the original aircraft’s capacity

cannot meet the requirements of business development any more. This project is aimed at improving the Company’s air

transportation effectiveness and market competitiveness. The benefits achieved are not directly quantifiable.Note 5 The project is aimed at improving the speed and quality of cold chain transportation and providing customers with

sophisticated temperature control service. The benefits achieved are not directly quantifiable.Note 6 The project is aimed at lay outing the next generation logistics informatisation technology in advance, improving the

intelligent logistics capacity, supporting the development of future comprehensive logistics business, promoting the

digitalisation, networking and marketisation of information, and backing the innovation and incubation of new businesses.

The benefits achieved are not directly quantifiable.Note 7 The project is aimed at further enhancing the processing capacity of the Company’s express backbone network as well as

improving the operation effectiveness of the whole network. The benefits achieved are not directly quantifiable.

8. Major projects not involving fundraising

□Applicable √ Not applicable

VI. Sale of Significant Assets and Equity

1. Sale of significant assets

□Applicable √ Not applicable

The Company did not sell any significant assets during the reporting period.

2. Sale of significant equity

□Applicable √ Not applicable

The Company did not sell any significant equity during the reporting period.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

VII. Analysis of Major Holdings and Participating Companies

√ Applicable □Not applicable

Major subsidiaries and equity participation companies that affect the Company's net profit by more than 10%

Unit: RMBCompanyname

CompanyType

PrimaryBusiness

RegisteredCapital

Total Assets Net Assets

Operating

Income

Operating

Profit

Net Profit

ShenzhenS.F. TaisenHoldings(Group) Co.,Ltd.

Subsidiary

Investments in

industrialbusinesses,Investmentconsulting andother informationconsulting,supplychain management,asset management,

capitalmanagement,

investmentmanagement, etc.

2 billion

RMB

35,375,140,785.7619,549,670,833.021,740,673,059.34 562,921,601.09 561,780,502.69

Acquisition and disposal of subsidiaries during the reporting period

√ Applicable □Not applicable

Company Name

Acquisition or Disposal ofSubsidiaries During the Reporting

Period

Impact on OverallProduction Operations

and PerformanceShanghai Fengpaida Supply Chain Co., Ltd. New establishment No major impactShenzhen Lver Technology Co., Ltd. New establishment No major impactShenzhen S.F.Zhongyuan Network Technology Co., Ltd. New establishment No major impactShenzhen Yike Technology Co., Ltd. New establishment No major impactHangzhou Xiaoshan Gonglaohan Business hotel Co., Ltd. Acquisition No major impactQian'an deda beifeng logistics Co. LTD Acquisition No major impactBeijing fenglejia hotel management Co., LTD New establishment No major impactSF Pharmaceutical Supply Chain (Jilin) Co., Ltd. New establishment No major impactShanghai Haosiju Supply Chain Management Co., Ltd. New establishment No major impactShanghai Chengbai Technology Co., Ltd. New establishment No major impactWenzhou Jietai Enterprise Management Co., Ltd. New establishment No major impactHuaian Fengtai Enterprise Management Co., Ltd. New establishment No major impactQuanzhou Fengyutai Enterprise Management Co., Ltd. New establishment No major impactYiwu Fengyutai Enterprise Management Co., Ltd. New establishment No major impactJiaxing Hongjie Enterprise Management Co., Ltd. New establishment No major impactS.F. Intra-city Holding Co., Ltd. New establishment No major impactHengyang hongyue network co. LTD Acquisition No major impactHengyang Wanwei Information Technology Co., Ltd. Acquisition No major impactDC(PaloAlto)CorporationAcquisition No major impactExel Logistics (Weihai) CO.,Ltd New establishment No major impactWuhan Jufeng Supply Chain Management Co., Ltd. New establishment No major impactYangzhou Fengyutai Enterprise Management Co., Ltd. New establishment No major impactShenzhen Fengchi Shuntong Information Technology Co.,Ltd.

New establishment No major impactDHL Logistics (Beijing) Co., Ltd. Acquisition No major impactDHL Supply Chain (Hong Kong) Limited Acquisition No major impactDun ho Logistics Zhuhai (Hong Kong) Limited Acquisition No major impactDHL Logistics (Zhuhai) Co., Ltd. Acquisition No major impactShun Lok Supply Chain (HK) Limited Acquisition No major impactShunhao Supply Chain Management (Wuhan) Co., Ltd. Acquisition No major impactDHL Logistics (Nanjing) Co., Ltd. Acquisition No major impactDHL Logistics (Shenzhen) Co., Ltd. Acquisition No major impactEXEL LOGISTICS CHINA CO.,LTD. Acquisition No major impactExel Logistics (Chengdu) CO.,Ltd Acquisition No major impactDHL Logistics (China) CO.,Ltd Acquisition No major impact

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Company Name

Acquisition or Disposal ofSubsidiaries During the Reporting

Period

Impact on OverallProduction Operations

and PerformanceDonggguan DHL Supply Chain Co.,Ltd Acquisition No major impactGREAT AFFLUENT GROUP LIMITED Acquisition No major impactHARMONIC JOY HOLDINGS LIMITED Acquisition No major impactWuhan Shunheng Express Co., Ltd. New establishment No major impactSuzhou Fengyutai Enterprise Management Co., Ltd. New establishment No major impactShenzhen Fenglian Technology Co., Ltd. New establishment No major impactHefei Jietai Enterprise Management Co., Ltd. New establishment No major impactShanghai Binxian Supply Chain Management Co., Ltd. New establishment No major impactYunnan Shunzhu Xinfeng Express Co., Ltd. New establishment No major impactXinjiang Shunxin Express Co., Ltd. New establishment No major impactFenghao Supply Chain (Shenzhen) Co., Ltd. New establishment No major impactShanghai Solution Plus Supply Chain Co., Ltd. New establishment No major impactWEALTHY SMART INTERNATIONAL HOLDINGSLIMITED

Acquisition No major impactJOVIAL BLISS GROUP LIMITED Acquisition No major impactTREND POWER INVESTMENTS LIMITED Acquisition No major impactLangfang S.F. Express Co., Ltd. New establishment No major impactSF Share Precision Information Technology (Shenzhen) Co.,Ltd.

New establishment No major impactXi'an SF Information Service Co., Ltd. New establishment No major impactShenzhen Yijiayi Technology Co., Ltd. New establishment No major impactGuangdong Zhifan Technology Co., Ltd. New establishment No major impactSF LOGISTICS PRIVATE LIMITED New establishment No major impactShanghai shunru Fenglai technology co., LTD New establishment No major impactLuoyang Fengnong Technology Co., Ltd. New establishment No major impactHangzhou Shuangjie Supply Chain Co., Ltd. New establishment No major impactHangzhou S.F.Intra-city Industrial Co., Ltd. New establishment No major impactSichuan Fengnong Technology Co., Ltd. New establishment No major impactSuzhou hengding logistics co. LTD Acquisition No major impactSinoServices International Technologies Co., Ltd. Sale No major impactShenzhen Fengyi Technology Co., Ltd. Sale No major impactSF Pharmaceutical Supply Chain Nanjing Co., Ltd. Sale No major impactNanjing Sihai Pharmaceutical Co., Ltd. Sale No major impactXiamen Jinchetou Information Technology Co., Ltd. Sale No major impactShanghai Ruitexin Information Technology Co., Ltd. Sale No major impactSinoServices International Technologies Company Limited Sale No major impactSinoServices International Technologies (Singapore) PteLTD

Sale No major impactShanghai Haikuqiang Supply Chain Information TechnologyCo., Ltd.

Sale No major impactShenzhen Jingliantong Information Technology Co., Ltd. Sale No major impact

VIII. Structured Entities Controlled by the Company

□Applicable √ Not applicable

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

IX. Performance forecast for the first nine months of 2019

□Applicable √ Not applicable

X. Possible risks and countermeasures

1. Market risks

Risks of macroeconomic fluctuations: The logistics industry plays an important fundamental role in thedevelopment of national economy while it is also significantly affected by macroeconomic conditions. In recentyears, China's macroeconomy has experienced slowing growth as it underwent a period of economic structuretransition, and the future development will remain rather complicated. Future fluctuation of the macroeconomywill have a certain impact on the overall development of China's logistics industry and the performance of SFHolding.

Market competition risks: Competition in China's express logistics industry has become increasingly fierce.On the one hand, industry-leading express logistics enterprises continue to strive to expand their businesses andnetworks. On the other hand, E-commerce platform enterprises, social capitals and other external forces arecreeping into the express logistics industry, further exacerbating market competition. If the Company cannot takeactive and effective measures to cope with the ever-changing market competition, it may face the risk of slowingbusiness growth and declining market share.

Risks arising from change in new business patterns: In recent years, with the rapid development ofinformation technology, the impact of the Internet economy on all aspects of life has become increasingly obvious.In the express delivery industry, information platform-type enterprises have emerged. Through fast matching andeffective management of information between supply and demand, such enterprises can quickly gather and utilizesocial capitals to deliver appropriate services for customers, which will have a certain impact on the traditionalbusiness model of the express delivery industry.

Risk response: In the face of complex and volatile potential market risks, the Company has established acomprehensive risk management system for close monitoring and dedicated analyses of the macroeconomy, ofindustry development trends and market competition patterns. From these analyses, SF Holding plans and adjustsits strategic direction, business planning and work priority in a forward-looking manner so as to minimize theimpact of changes in external market environment on the Company's business and future development.

2. Policy risks

Risks arising from changes in industry regulations and industrial policies: Operation of express deliveryrequires business licensing and is subject to regulation by laws, administrative rules and industry standards suchas the Postal Law (《邮政法》), the Administrative Measures for Express Delivery Business Licensing (《快递业务经营许可管理办法》), the Administrative Measures for Express Delivery Market ( 《快递市场管理办法》), theIndustry Standard for Express Delivery Services (《快递服务》行业标准) and the Rules for Guiding the Operationof Express Business ( 《快递业务操作指导规范》). In order to support the development of the express deliveryindustry, competent departments at various levels have successively introduced a number of industrial support andencouragement policies. However, should major changes in or adjustments to relevant laws, regulations orindustrial policies occur in the future, they may have an impact on the development trend and market competitionlandscape of the express delivery industry, which may in turn affect the future business growth and performanceof the Company.

Risks from relevant state policies on environmental protection, energy conservation and emissionreduction:

Various types and models of motor vehicles are important components of transportation vehicles of expressdelivery companies. With the intensifying state policies on environmental protection, energy conservation andemission reduction may lead to increased expenses in relevant aspects such as environmental protection, energyconservation and emission reduction incurred by express delivery companies, which may affect the futureperformance of the Company.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Risk response: The Company has established research teams for state and local policies in all business unitsto conduct in-depth analysis on relevant policies introduced and scientific prediction of future policy directionsand trends in the light of overall changes in external environment. Forward-looking plans are implemented andadjusted by fully capitalizing on favorable policies while avoiding policy risks, hence promoting business growth.

3. Business risks

Risks of possible rising costs: The traditional express delivery industry is a labor-intensive industry. Thereare relatively large demands for labor along various stages of operation such as collection, sorting, transportationand delivery. With decreasing rate of population growth in China, there are certain pressures on rising labor costswhile investments in logistics infrastructures and other aspects are also increasing. If the Company cannot secureenough business volume or effectively control costs in the future, it will probably face challenges in its futureperformance growth.

Risk response: SF Holding has continued to increase investment in areas such as logistics frameworkoptimization and system component innovation, including in areas such as bringing the entire logistics processonline by applying smart technologies to reduce manpower and offline operations, while upgrading service pointsand route planning and using scientific and technological means to enhance efficiency and reduce labor costs,hence leading transformation of the express delivery industry from a labor-intensive to a technology intensiveindustry.

Risks from fuel price fluctuation: Transportation cost is one of the major costs of the express deliveryindustry, and fuel cost is a component of transportation cost. Fluctuation of fuel price will have a certain impacton the profitability of express delivery companies. If the fuel price rises significantly in the future, the Companywill experience pressure of increased costs. Generally speaking, however, fuel costs accounted for only 1.90% ofrevenue in the first half of 2019, a ratio which is not high. Therefore, the impact of fuel price fluctuation onoperating costs is relatively limited. It is estimated that if fuel price fluctuates by +/- 5%, cost of revenue mayincrease or decrease by RMB0.95 million for the current year, which will either increase or decrease net profitattributable to the parent company by a maximum of RMB71 million.

Risk response: The Company will further optimise layout of service points, enhance scientific routeplanning and loading rate of operating routes, and increase resource use efficiency to reduce the risk of fuel pricefluctuations. Further, the Company will strengthen promotion for use of new energy vehicles to reduce the risk offuel price fluctuations to a certain extent. Meanwhile, the Company has matured operation and cost monitoringmechanisms. When costs fluctuate significantly, operation plans and fuel cost control measures will bedynamically adjusted to reduce the negative impact of fuel cost fluctuation on the Company.

4. Exchange rate fluctuation risks

The Company currently offers express delivery services in countries such as the U.S., Japan, Korea, andSingapore and provides B2C and E-commerce delivery services in many countries and regions. In the future, asSF Holding's international business grows, the proportion of business denominated in foreign currencies willgradually increase. Given the uncertainties in the international financial environment and fluctuations of the RMBexchange rate, foreign currency assets and liabilities as well as future foreign currency transactions of theCompany will be at risk of exchange rate fluctuation, which may have certain impacts on the reporting andprofitability of the Company.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Risk response: The Company's foreign exchange transactions are mainly based on actual needs ofcross-border foreign currency businesses. To avoid and prevent risks of exchange rate and interest ratefluctuations and better manage its foreign currency positions, the Company has established the ManagementSystem for Business Hedging (《套期保值业务管理制度》) to enable centralized management of foreign currencypositions by deciding expenditure based on revenue to achieve natural hedging where possible. To avoid exchangerate or interest rate risks, the Company timely monitors exchange rate and interest rate fluctuations and selectshedging products with low default risks and controllable risks so as to lock in costs of exchange rate and interestrate. Meanwhile, the Company will also strengthen research and analysis of exchange rate and interest rate so thatit can be alerted of changes in the international market in real time and take countermeasures on early warningsignals. The Company conducts foreign exchange hedging business only with large and established commercialbanks which follow the principles of legality, prudence, safety and effectiveness. All foreign exchange hedgingtransactions are based on normal production and operation with support of specific business operation. TheCompany does not trade for speculation, and operates in strict accordance within authorized operations to ensureeffective implementation and reduce the impact of exchange rate risks on the Company's operations as well asprofit and loss.

5. Information system risk

Information system risk: To cope with our diversified development of, the complex and diverse needs ofcustomers, and the strategic direction of technology-led business expansion to enhance market position, theCompany has built and applied various information systems and technologies. Rapid development of the industryand changing market also pose challenge of rapid change in technology and services to the construction of corebusiness systems of the Company. With the wide variety and rapid replacement of professional technologies in theCompany along with emerging new technologies, changes in information technology and future businessrequirements may cause certain information system risks. Meanwhile, despite the series of information securitycontrol mechanisms established for the large amount of data accumulated for years by the Company, there stillexists certain human or system caused information security risks.

Risk Responses: The Company has formulated comprehensive response measure for information systemrisks. On the one hand, the Company continues to carry out operation and optimization of the ISO27001information security management system, and has obtained certification after the on-site assessment by theauthority. The Company implements information security control and protection in all aspects according toestablished policies and strategies for information security, and continuously updates all procedures and systemsfor information security. It continuously strengthens risk awareness of staff and trainings for staff operationstandards, develop internal information circulation guidelines, implement rules of strong control over sensitiveinformation, avoid unintentional violations, and construct monitoring and early warning and disposal systems forabnormal behaviors, so as to eliminate information system security risks in their infancy. Meanwhile, according torequirements of regulatory authorities, the Company has engaged in and passed the testing and evaluation forsecurity classification protection of information system. Based on high standards of technology protectionrequirements, it conduct continuous and stable security intervention in the business system construction phase tostrengthen the ability of the client's service products and business systems themselves against anti-security attacks,and enhance the capability of the IT infrastructures to discover and defend against cybersecurity attacks duringoperation of the information system. On the other hand, the Company has established a more comprehensivesystem for prevention and control of information risks, formulated standard processes such as the Major EventManagement Process System for IT System (《IT系统重大事件管理流程制度》) and the Management Guidelinesfor Emergency Plan Formulation and Implementation of IT System (《IT系统应急预案制定与执行管理指引》) toimplement closed-loop risk prevention and control in terms of pre-warning, in-process control and post-recording.Additionally, the Company has actively cooperated with the National Development and Reform Commission, theState General Administration of Posts and all levels of publicsecurity departments to combat behaviours such asblack production and speculation; has actively participated in the formulation and review of various informationsecurity standards of the National Information Security Standards Committee, pilot work for implementation ofpolicies; has regularly held security summits and security salons to facilitate information sharing with industryleaders and industry elites; and has established alliance partnership and cooperation with information securityteams of well-known Internet and e-commerce companies for the joint construction of a safe and orderlyCyberspace.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Chapter 5 Significant EventsI. Annual general meeting of shareholders and extraordinary general meeting of shareholdersheld during the period

1. Shareholder meetings held during the reporting period

Meeting

Meeting

Type

InvestorParticipation %

DateConvened

Disclosure

Date

Disclosure IndexFirst Extraordinary GeneralMeeting of Shareholders of2019

ExtraordinaryGeneral Meeting

84.59%

January23, 2019

January 24,2019

“Resolutions of theFirst ExtraordinaryGeneral Meeting of2019”(2019-018)(http://www.cninfo.com.cn)2018 Annual GeneralMeeting

Annual GeneralMeeting

74.29%

April 9,2019

April 10,2019

“2018 AnnualGeneral MeetingResolutions”(2019-057)(http://www.cninfo.com.cn)Second ExtraordinaryGeneral Meeting ofShareholders of 2019

ExtraordinaryGeneral Meeting

75.79%

May 9,2019

May 10,2019

“Resolutions of theSecond ExtraordinaryGeneral Meeting of2019”(2019-070)(http://www.cninfo.com.cn)

2. Extraordinary general meetings convened at the request of preferred stockholders whose voting rights

have been restored

□Applicable √ Not applicable

II. Profit distribution or increase of share capital from equity reserves during the reportingperiod

□Applicable √ Not applicable

The Company does not plan to issue cash or equity dividends, nor to convert equity reserves into share capital.

III. Commitments made by the Company's actual controllers, shareholders, related parties,

purchasers, and others that were fulfilled during the reporting period or were not fulfilledand exceed the time limit as of the end of the reporting period

□Applicable √ Not applicable

There were no such situations during the reporting period.

IV. Appointment and dismissal of accounting firmsIs the semi-annual financial report audited?

□Yes √ No

The Company's semi-annual financial report has not been audited

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

V. Explanations provided by the Board of Directors, the Supervisory Committee, and the

independent directors regarding the “non-standard audit report” issued by the auditor forthe reporting period

□Applicable √ Not applicable

VI. Explanations provided by the Board of Directors regarding the “non-standard auditreport” issued by the auditor for the last year

□Applicable √ Not applicable

VII. Bankruptcy and Reorganization

□Applicable √ Not applicable

There was no such situation for the Company during the reporting period.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

VIII. Significant lawsuit or arbitration

√Applicable □Not applicable

Situation overview of lawsuit

(arbitration)

Lawsuitamount(10thousandsRMB)

Provisions

Progressof lawsuit(arbitration)

Results and

effects of

lawsuit(arbitration)

Execution

status ofjudgmentof lawsuit(arbitration)

Disclosure

date

Disclosure indexAccording to Shenzhen GlorintFactoring Co., Ltd. (the plaintiff inthis case, hereinafter referred to as“Shenzhen Glorint”), the“Indictment”: On October 11, 2014,Shenzhen Glorint and Hubei XingyuGarment Co., Ltd. (hereinafterreferred to as “Hubei Xingyu”)signed the “SDIC Factoring BusinessContract,” which stipulated thatShenzhen Glorint will providefactoring financing to Hubei Xingyu,and Hubei Xingyu shall also carryout a premium repurchase on timeaccording to the terms of the contract.Fucheng Investment Holding GroupCo.,Ltd. (defendant II in this case,hereinafter referred to as “FuchengInvestment”), Zeng Shixiang(defendant III in this case), ZengCheng (defendant IV in this case),and JiangBin (defendant V in thiscase) shall provide guarantees for thiscontract.In May 2014 and January 2015, S.F.Express Co., Ltd. (defendant VI inthis case, hereinafter referred to as“S.F. Express “), Shenzhen SFSupply Chain Co., Ltd. (defendantVII in this case, hereinafter referred toas “SF Supply Chain”) signed anapparel

urchase contract with HubeiXingyu respectively. The totalamount of the contract wasRMB18,099,519.On January 30, 2015, Hubei Xingyuand Shenzhen Glorint signed theSupplementary Agreement (I) of theSDIC Factoring Business Contract,which stipulated that Hubei Xingyushall transfer a total o

pf

RMB18,099,519 accounts receivableto Shenzhen Glorint, based on theaccounts receivable in theabove-mentioned apparel purchasecontract with S.F. Express and SFSupply Chain. In view of the fact thatHubei Xingyu did not fulfill thepremium repurchase of factoringfinancing in accordance with thestipulated SDIC Factoring BusinessContract, S.F. Express and SF SupplyChain did not

fp

ay RMB18,099,519for Shenzhen Glorint. On September1, 2015, Shenzhen Glorint filed alawsuit with the Futian DistrictPeople’s Court and requested adecree:(1) S.F. Express and SF

1,859.95No

On June 18,2019, theFutian DistrictPeople's Courtmade afirst-instancejudgment. Asof thedisclosure dateof this report,the plaintiffShenzhenGlorint hasfiled an appealand thislawsuit hasentered thesecondinstanceprocedure.

The judgmentof the court offirst instanceis as follows:

1. SF Supply

Chain shouldpay the

pp

laintiff RMB3,289,100within 10days after thejudgmenttakes effect.

2. Hubei

Xingyu,FuchengInvestmentshould paythe plaintiff alegal fee ofRMB 500,000within 10days after thejudgment hastaken effect.

3. Other

claims of theplaintiff weredismissed.The court feewasRMB133,397,which shouldbe borne bythe plaintiffShenzhenGlorint as toRMB95,284,and SFSupply Chainas toRMB33,113.RMB 5,000of the feeshould bejointly bornby HubeiXingyu andFuchengInvestment;preservationfee of 5,000yuan shouldbe borne bySF SupplyChain.

As of the

N/A

December13,2016

Main Assets Replacementand Issuance of Shares toPurchase Assets andRaise Matching Fundsand Related-partyTransaction Report(Revised Draft) athttp://www.cninfo.com.cn

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Situation overview of lawsuit

(arbitration)

Lawsuitamount(10thousandsRMB)

Provisions

Progressof lawsuit(arbitration)

Results and

effects oflawsuit(arbitration)

Execution

status ofjudgmentof lawsuit(arbitration)

Disclosure

date

Disclosure indexSupply Chain should pay 18,099,519RMB to Shenzhen Glorint. (2) HubeiXingyu, Fucheng Investment, ZengShixiang, Zeng Cheng, Jiang Bin,S.F. Express, and SF Supply Chainwill be jointly and severally liable forthe aforementioned payment. (3) Thedefendants in this case should

earthe legal fees, litigation fees, and allother litigation fees in this case.On July 19, 2016, Shenzhen Glorintapplied to the Futian District People’sCourt to withdraw the lawsuit againstthe defendants Zeng Shixiang, ZengCheng, and Jiang Bin.On April 20, 2017, Futian DistrictPeople’s Court ruled that the casewas transferred to the jurisdiction o

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the Yuting District People’s Court,Yichang City, where the HubeiXingyu Bankruptcy case was filed.Shenzhen Glorint rejected thefirst-instance ruling and appealed toShenzhen Intermediate People’sCourt.On July 10, 2017, ShenzhenIntermediate People’s Court ruled torevoke the decision of the FutianDistrict People’s Court and the casewas under the jurisdiction of theFutian District People’s Court.On October 23, 2017, the FutuanDistrict People’s court held its secondhearing. The bankruptcyadministrator of Hubei Xingyu,Yichang Xinli Bankruptcy andLiquidation Office Co., Ltd. engagedlawyers to participate in the trial.

disclosuredate of thisreport, theplaintiffShenzhenGlorint hasfiled anappeal andthis lawsuithas enteredthe secondinstanceprocedure.

This case is adispute arisingfrom thepayment ofcontractpayment. Thesubject matterof the lawsuit isthe Company'spayable for thecontract, and theamount is small.The results ofthese cases willnot bemateriallyadverse to theCompany'sfinancial statusand continuingoperations.

As of June 30, 2019, in addition to the above legal case, other legal proceedings of the listed Company and itssubsidiaries were as follows:

1. The total amount involved in legal cases resolved during the reporting period was RMB130.55 million.

2. Cases not yet resolved during the reporting period include: Cases involving the Company and its subsidiaries as

defendants amounted to RMB114.15 million, accounting for 0.31 % of audited net assets attributable toshareholders of the parent Company at the end of 2018. The above-mentioned litigation matters include a numberof independent traffic accident cases and transportation claims with small amounts involved. The Company and itssubsidiaries have already purchased commercial insurance for operating vehicles, transportation and otherbusiness activities. Based on the historical experience, the insurance purchased can basically cover the lossescaused by the case. Cases involving the Company and its subsidiaries as plaintiffs amounted to RMB415.55million, accounting for 1.14% of audited net assets attributable to shareholders of the parent Company at the endof 2018. The described legal proceedings will not have a material adverse effect on the Company's financial statusand ability to continue operations.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

IX. Questioning by the Media

□Applicable √ Not applicable

The company did not experience widespread media questioning during the reporting period.

X. Punishment and rectification

□Applicable √ Not applicable

There was no such situation during the reporting period.

XI. Integrity of the Company, its controlling shareholders, and actual controller

□Applicable √ Not applicable

XII. Execution of stock incentive plan, ESOP, or other employee incentives

√ Applicable □Not applicable

1. During the reporting period, the unlocking conditions for the first post lock-up period under the 2017

Restricted Stock Incentive Plan of the Company was fulfilled. On January 3, 2019, the Company convened the

thmeeting of the 4th session of the Board at which the “Resolution regarding the fulfillment of unlockingconditions for the first post lock-up period under the 2017 Restricted Stock Incentive Plan” was considered andapproved, and the Company was authorised to unlock the sales restriction on a total of 1,113,173 restricted sharesheld by 703 participants who have fulfilled the unlocking conditions. On January 11, 2019, these shares whichcould be released of the sales restriction (“unlocked restricted shares”) were listed and available for trading.

2. During the reporting period, the exercise conditions for the first exercise period under the 2017 Share

Appreciation Rights Incentive Plan of the Company were fulfilled. On January 3, 2019, the Company convenedthe 18thmeeting of the 4th session of the Board at which the “Resolution regarding the Cancellation of CertainShare Appreciation Rights” and the “Resolution regarding Fulfillment of the Exercise Condition for the FirstExercise Period under the 2017 Share Appreciation Rights Incentive Plan” were considered and approved.Accordingly, the Company was authorised to cancel all the 6,400 share appreciation rights held by 3 incentiveparticipants who ceased to be eligible for the incentive due to their resignation, and to handle the exercise of rightsheld by 17 eligible incentive participants.

3. At the 18

thmeeting of the 4th session of the Board and the 2019 first extraordinary general meeting convenedby the Company on January 3, 2019 and January 23, 2019 respectively, the “Resolution regarding the Repurchaseand Cancellation of Certain Restricted Shares” was considered and approved. Accordingly, the Company wasauthorised to repurchase and cancel a total of 293,308 restricted shares held by 65 incentive participants whoceased to be eligible for the incentive under the 2017 Restricted Stock Incentive Plan due to their resignation, at arepurchase price of RMB29.529 per share; and the Company was authorised to repurchase and cancel a total of147,278 restricted shares held by 34 incentive participants who ceased to be eligible for the incentive under the2018 Restricted Stock Incentive Plan due to their resignation, at the repurchase price of RMB24.511 per share.The total number of restricted shares repurchased for cancellation was 440,586 shares. As of March 13, 2019, theCompany has completed the repurchase and cancellation of the aforesaid restricted shares, thus the share capital ofthe Company was reduced from 4,418,767,258 shares to 4,418,326,672 shares.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

4. At the 20

thmeeting of the 4th session of the Board and the 2018 annual general meeting convened by theCompany on March 14, 2019 and April 9, 2019 respectively, the “Resolution regarding the Repurchase andCancellation of Certain Restricted Shares” was considered and approved. Accordingly, the Company wasauthorised to repurchase and cancel a total of 1,113,271 restricted shares held by 703 incentive participants whoceased to be eligible for the incentive due to failure of the Company to meet the performance assessmentrequirement for the second post lock-up period, at the repurchase price of RMB29.613 per share; and theCompany was authorised to repurchase and cancel a total of 2,628,136 restricted shares held by 1,105 incentiveparticipants who failed to fulfil the unlocking conditions due to failure of the Company to meet the performanceassessment requirement for the first post lock-up period, and by 37 incentive participants who ceased to beeligible for the incentive under the 2018 Restricted Stock Incentive Plan due to their resignation, at a repurchaseprice of RMB24.581 per share. The total number of restricted shares repurchased for cancellation was 3,741,407shares. Upon completion of the repurchase and cancellation, the total share capital of the Company will bereduced from 4,418,326,672 shares to 4,414,585,265 shares.

As the Company has implemented the 2018 dividend distribution plan prior to implementing the repurchaseand cancellation of restricted shares, according to the authorization of the Board, the management of the Companyadjusted the repurchase prices of the aforesaid repurchases based on relevant provisions. The repurchase priceunder the 2017 Restricted Stock Incentive Plan was adjusted from RMB29.613 per share to RMB29.399 per share,while that under the 2018 Restricted Stock Incentive Plan was adjusted from RMB24.581 per share toRMB24.369 per share. As of June 12, 2019, the Company has completed the repurchase and cancellation of theaforesaid restricted shares.

5. At the 20

th

meeting of the 4th session of the Board convened by the Company on March 14, 2019, the“Resolution on the Cancellation of Certain Share Appreciation Rights” was considered and approved.Accordingly, the Company was authorised to cancel a total of 26,500 share appreciation rights held by 17incentive participants who ceased to have exercise qualification due to failure of the Company to meet theperformance assessment requirement for the second exercise period under the 2017 Share Appreciation RightsIncentive Plan; and the Company was authorised to cancel a total of 80,825 share appreciation rights held by 29incentive participants who ceased to be eligible for the incentive due to failure of the Company to meet theperformance assessment requirement for the first exercise period, and by 5 incentive participants who ceased to beeligible for the incentive under the 2018 Share Appreciation Rights Incentive Plan due to their resignation.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Details of the Company’s stock incentive plans during the reporting period have been disclosed onhttp://www.cninfo.com.cn by the Company. A disclosure index is as follows:

Announcement Disclosure Date Disclosure WebsiteAnnouncement on Repurchase and Cancellation o

Certain Restricted Shares (2019-003)

January 4, 2019 http://www.cninfo.com.cnAnnouncement on Fulfillment of the ExerciseCondition for the First Exercise Period under the 2017Share Appreciation Rights Incentive Plan and theCancellation of Certain Share Appreciation Rights(2019-004)

January 4, 2019

http://www.cninfo.com.cn

Announcement on Fulfillment of the Unlockingconditions for the First Post Lock-up Period under the2017 Restricted Stock Incentive Plan (2019-005)

January 4, 2019

http://www.cninfo.com.cnAnnouncement on the Listing and available for Tradingof Unlocked Restricted Shares for the First PostLock-up Period under the 2017 Restricted StockIncentive Plan (2019-014)

January 10, 2019

http://www.cninfo.com.cnAnnouncement on Capital Reduction due to Repurchaseand Cancellation of Certain Restricted Shares(2019-019)

January 25, 2019

http://www.cninfo.com.cnAnnouncement on Completion of Repurchase andCancellation of Certain Restricted Shares (2019-033)

March 13, 2019

http://www.cninfo.com.cnAnnouncement on Repurchase and Cancellation o

ff

Certain Restricted Shares (2019-043)

March 16, 2019

http://www.cninfo.com.cnAnnouncement on Cancellation of Certain ShareAppreciation Rights (2019-044)

March 16, 2019

http://www.cninfo.com.cnAnnouncement on Capital Reduction due to Repurchaseand Cancellation of Certain Restricted Shares(2019-058)

April 10, 2019

http://www.cninfo.com.cnAnnouncement on Adjustment to Repurchase Price forthe Repurchase and Cancellation of Restricted Shares

fb

y the Company due to Dividend Distribution(2019-062)

April 19, 2019

http://www.cninfo.com.cnAnnouncement on Completion of Repurchase andCancellation of Certain Restricted Shares (2019-074)

June 12, 2019

http://www.cninfo.com.cn

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

XIII. Significant related-party transactions

1. Related-party transactions relevant to routine operations

√ Applicable □Not applicable

Related Party Relationship

Type ofrelated-party

transaction

Details ofrelated-partytransaction

Pricingprinciple

of therelated-party

transaction

Transactionprice

Transactionamount(10thousands

RMB)

Proportionof samecategory oftransactions

Approve

transaction

quota(10ThousandsRMB)

Was theapprovedquotaexceeded?

Related-party

transactionsettlementmethod

SimilarMarketprice

Disclosuredate

Disclosure index

MingdeHolding andits subsidiaries

Controllingshareholder ofthe Company

Provideservices torelated parties

Courier service,communicationservice,technologydevelopmentservice, etc.

Fair pricingbased onmarket pricesin accordancewith theprinciple ofindependenttransactions

Contractprice

7,910.040.16% 27,000No

Settlementbased on thesettlementperiod andterms in thecontract

N/A

January 4,2019

Announcement on the“Proposalon Estimated DailyRelated-party TransactionAmount in 2019”disclosed at CNINFO(AnnouncementNo. 2019-011)(http://www.cninfo.com.cn)M ChinaManagementLimited andits subsidiariesand itsfranchisees

A director ofThe Companyserves as adirector of theparentcompany of MChinaManagementLimited

Provideservices torelated parties

Cold-chaintransportationand warehousingservices

Fair pricingbased onmarket pricesin accordancewith theprinciple ofindependenttransactions

Contractprice

55,235.821.10%

130,00

No

Settlementbased on thesettlementperiod andterms in thecontract

N/A

January 4,2019

Announcement on the“Proposalon Estimated DailyRelated-party TransactionAmount in 2019”disclosed at CNINFO(AnnouncementNo. 2019-011)(http://www.cninfo.com.cn)China PacificInsurance(Group) Co.,Ltd. and itssubsidiaries

A

dn

independentdirector ofthe Companyserves as anindependentdirector ofChina PacificInsurance(Group) Co.,Ltd.

Provideservicesto relatedparties

Courier service,technologydevelopmentservice.

Fair pricingbased onmarket pricesin accordancewith theprinciple ofindependenttransactions

Contractprice

1,840.670.04% 7,000 No

Settlementbased on thesettlementperiod andterms in thecontract

N/A

January 4,2019

Announcement on the“Proposalon Estimated DailyRelated-party TransactionAmount in 2019”disclosed at CNINFO(AnnouncementNo. 2019-011)(http://www.cninfo.com.cn)

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Related Party Relationship

Type ofrelated-partytransaction

Details ofrelated-partytransaction

Pricingprincipleof therelated-partytransaction

Transactionprice

Transaction

amount

(10thousands

RMB)

Proportion

of samecategory oftransactions

Approve

transaction

quota(10Thousands

RMB)

Was theapprovedquotaexceeded?

Related-partytransactionsettlementmethod

SimilarMarketprice

Disclosuredate

Disclosure index

Ping AnInsurance(Group)Company ofChina, Ltd.andits subsidiaries

A

dn

independentdirectors ofthe Companyserves as anindependentdirector ofPing AnInsurance(Group)Company ofChina, Ltd.

Provideservicesto relatedparties

Courier service

Fair pricingbased onmarket pricesin accordancewith theprinciple ofindependenttransactions

Contractprice

4,922.691.10% 11,000No

Settlementbased on thesettlementperiod andterms in thecontract

N/A

January 4,2019

Announcement on the“Proposalon Estimated DailyRelated-party TransactionAmount in 2019”disclosed at CNINFO(AnnouncementNo. 2019-011)(http://www.cninfo.com.cn)MingdeHolding andits subsidiaries

Controllingshareholder ofthe Company

Receiveservicesfrom relatedparties

Express deliveryagent servicefees, etc.

Fair pricingbased onmarket pricesin accordancewith theprinciple ofindependenttransactions

Contractprice

5,618.520.14% 18,000No

Settlementbased on thesettlementperiod andterms in thecontract

N/A

January 4,2019

Announcement on the“Proposalon Estimated DailyRelated-party TransactionAmount in 2019”disclosed at CNINFO(AnnouncementNo. 2019-011)(http://www.cninfo.com.cn)China PacificInsurance(Group) Co.,Ltd. and itssubsidiaries

A

nn

independentdirector ofthe Companyserves as anindependentdirector ofChina PacificInsurance(Group) Co.,Ltd.

Receiveservicesfrom relatedparties

Insurancepremium

Fair pricingbased onmarket pricesin accordancewith theprinciple ofindependenttransactions

Contractprice

4,506.210.11% 13,000 No

Settlementbased on thesettlementperiod andterms in thecontract

N/A

January 4,

2019

Announcement on the“Proposalon Estimated DailyRelated-party TransactionAmount in 2019”disclosed at CNINFO(AnnouncementNo. 2019-011)(http://www.cninfo.com.cn)CR-SFInternationalExpress Co.,Ltd.

A seniormanager of theCompanyserves as adirector ofCR-SFInternationalExpress Co.,Ltd.

Receiveservicesfrom relatedparties

Transportationservices

Fair pricingbased onmarket pricesin accordancewith theprinciple ofindependenttransactions

Contractprice

8,077.800.20% 35,000 No

Settlementbased on thesettlementperiod andterms in thecontract

N/A

January 4,2019

Announcement on the“Proposalon Estimated DailyRelated-party TransactionAmount in 2019”disclosed at CNINFO(AnnouncementNo. 2019-011)(http://www.cninfo.com.cn)

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Related Party Relationship

Type ofrelated-party

transaction

Details ofrelated-party

transaction

Pricingprinciple

of therelated-party

transaction

Transaction

price

Transaction

amount

(10thousands

RMB)

Proportion

of samecategory oftransactions

Approve

transaction

quota(10Thousands

RMB)

Was theapproved

quotaexceeded?

Related-party

transactionsettlement

method

SimilarMarket

price

Disclosuredate

Disclosure index

MingdeHolding andits subsidiaries

Controllingshareholder ofthe Company

Purchase ofmaterials fromrelated parties

Purchase ofmaterials

Fair pricingbased onmarket pricesin accordancewith theprinciple ofindependenttransactions

Contractprice

4,177.270.10% 15,000 No

Settlementbased on thesettlementperiod andterms in thecontract

N/A

January 4,2019

Announcement on the“Proposalon Estimated DailyRelated-party TransactionAmount in 2019”disclosed at CNINFO(AnnouncementNo. 2019-011)(http://www.cninfo.com.cn)ZhejiangGalaxyTechnologyCompanyLimited

A director ofthe Companyserves as adirector ofZhejiangGalaxyTechnologyCompanyLimited

Purchase ofassets fromrelated parties

Purchase ofassets

Fair pricingbased onmarket pricesin accordancewith theprinciple ofindependenttransactions

Contractprice

-

d

-

40,000 No

Settlementbased on thesettlementperiod andterms in thecontract

N/A

January 4,2019

Announcement on the“Proposalon Estimated DailyRelated-party TransactionAmount in 2019”disclosed at CNINFO(AnnouncementNo. 2019-011)(http://www.cninfo.com.cn)Total -- -- 92,289.02--296,000

---- -- --

--

Details of large amount ofsales returns N/AActual performance in the reporting period versus predicted total amount of dailyrelated-party transactions, by types (if any)

The Company's eighteenth meeting of the fourth Board of Directors on Januar

3,2019and the First Extraordinary GeneralMeeting of Shareholders of 2019 on January 23, 2019 reviewed and approved the “Proposal on Estimated DailyRelated-party Transaction Amount in 2018.” The amount of the aforementioned related-party transactions did not exceed theapproved amount.Reason fo

yr

significan

rt

difference

etween the transaction

bp

rice and themarket priceN/A

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

2. Related-party transactions relevant to purchases and sales of assets

□Applicable √ Not applicable

No significant related-party transactions relevant to purchases and sales of assets during the reporting period.

3. Related-party transactions with joint investments

□Applicable √ Not applicable

No significant related-party transactions with joint investments during the reporting period.

4. Credits and liabilities with related parties

√ Applicable □Not applicable

Were there non-operating credits and liabilities with related parties?

□Yes √ No

No such cases in the reporting period.

5. Other significant related-party transactions

□Applicable √ Not applicable

XIV. Significant contracts and their execution

1. Trusteeships, Contracts, and Leases

(1) Trusteeships

□Applicable √ Not applicable

No significant trusteeships in the reporting period.

(2) Contracts

□Applicable √ Not applicable

No significant contracts in the reporting period.

(3) Leases

□Applicable √ Not applicable

No significant leases in the reporting period.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

2. Significant guarantees

√Applicable □Not applicable

Guarantees provided by the Company

Unit: RMB 10 thousands

The listed Company's guarantees to subsidiariesGuarantee party

Disclosure dateof Quotaannouncement

Amount of

guaranteed

Quotaapproved

Actual date of

occurrence

Actualguarantee

amount

Type ofguarantee

Period ofguarantee

Executed?

Guarantee

for arelatedparty?SF HOLDING INVESTMENTLIMITED

2017/12/28 343,8552018/7/26 343,855

Joint liabilityguarantee

2018/7/26-2023/7/26

NoNoSF HOLDING LIMITED 2019/1/4 550,0002019/2/11 358,163.3

Joint liabilityguarantee

2019/02/11-2019/06/26

YesNoTotal guarantee quota approved forsubsidiaries during the reportingperiod (B1)

1,150,000.00

Total actual amount ofguarantees for subsidiariesduring the reporting period(B2)

358,163.30Total guarantee quota approved forthe subsidiaries at the end of thereporting period(B3)

1,135,691.71

Total actual guarantee

alance for subsidiaries at theend of the reporting period(B4)

343,855Subsidiary's guarantees to subsidiariesGuarantee party

Disclosure dateof Quotaannouncement

Amount ofguaranteed

Quotaapproved

Actual date of

occurrence

Actualguarantee

amount

Type ofguarantee

Period ofguarantee

Executed?

Guaranteefor a related

party?Beijing Shuncheng Logistics Co.,Ltd.

b

2013/6/25 5,000

Joint liabilityguarantee

2014/5/21-2019/5/21

Yes NoShenzhen S.F. Aviation IndustryReal Estate Management Co., Ltd.,S.F. Express Co., Ltd.

2013/7/31 400

Joint liabilityguarantee

2013/8/21-2019/5/20

Yes NoShenzhen S.F. Aviation IndustryReal Estate Management Co., Ltd.,S.F. Express Co., Ltd.

2013/7/31 404.57

Joint liabilityguarantee

2013/8/21-2023/7/30

No NoShenzhen S.F. Aviation IndustryReal Estate Management Co., Ltd.,S.F. Express Co., Ltd.

2013/7/31 3,500

Joint liabilityguarantee

2013/9/5-2023/

No NoShenzhen S.F. Aviation IndustryReal Estate Management Co., Ltd.,S.F. Express Co., Ltd.

2013/7/31 2,600

Joint liabilityguarantee

2013/10/12-2023/7/30

No NoShenzhen S.F. Aviation IndustryReal Estate Management Co., Ltd.,S.F. Express Co., Ltd.

2013/7/31 1,500

Joint liabilityguarantee

2013/11/25-2023/7/30

No NoShenzhen S.F. Aviation IndustryReal Estate Management Co., Ltd.,S.F. Express Co., Ltd.

2013/7/31 5,000

Joint liabilityguarantee

2014/11/7-2023/7/30

No NoShenzhen S.F. Aviation IndustryReal Estate Management Co., Ltd.,S.F. Express Co., Ltd.

2013/7/31 5,000

Joint liabilityguarantee

2015/2/2-2023/

No NoShenzhen S.F. Aviation IndustryReal Estate Management Co., Ltd.,S.F. Express Co., Ltd.

2013/7/31 1,000

Joint liabilityguarantee

2015/4/30-2023/7/30

No NoShenzhen S.F. Aviation IndustryReal Estate Management Co., Ltd.,S.F. Express Co., Ltd.

2013/7/31 2,500

Joint liabilityguarantee

2016/5/31-2023/7/30

No NoJiangxi S.F. Express Co., Ltd.

2015/9/15 300

Joint liabilityguarantee

2015/9/15-2019/1/16

Yes NoJiangxi S.F. Express Co., Ltd.

2015/9/15 500

Joint liabilityguarantee

2015/11/24-2019/1/16

Yes NoJiangxi S.F. Express Co., Ltd.

2015/9/15 500

Joint liabilityguarantee

2015/12/29-2019/1/16

Yes NoJiangxi S.F. Express Co., Ltd.

2015/9/15 500

Joint liabilityguarantee

2016/1/22-2019/1/16

Yes NoJiangxi S.F. Express Co., Ltd.

2015/9/15 500

Joint liabilityguarantee

2016/4/15-2019/1/16

Yes NoJiangxi S.F. Express Co., Ltd.

2015/9/15 500

Joint liabilityguarantee

2016/11/24-2019/1/16

Yes NoQuanzhou Fengyutai EnterpriseManagement Co., Ltd.

2015/9/24 170

Joint liabilityguarantee

2015/11/23-2019/4/19

Yes NoQuanzhou Fengyutai EnterpriseManagement Co., Ltd.

2015/9/24 310

Joint liabilityguarantee

2015/12/22-2019/4/19

Yes NoQuanzhou Fengyutai EnterpriseManagement Co., Ltd.

2015/9/24 190

Joint liabilityguarantee

2015/12/22-2025/9/23

No No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Quanzhou Fengyutai EnterpriseManagement Co., Ltd.

2015/9/24 2,500

Joint liabilityguarantee

2016/1/21-2025/9/23

No NoQuanzhou Fengyutai EnterpriseManagement Co., Ltd.

2015/9/24 500

Joint liabilityguarantee

2016/4/28-2025/9/23

No NoQuanzhou Fengyutai EnterpriseManagement Co., Ltd.

2015/9/24 1,500

Joint liabilityguarantee

2016/5/27-2025/9/23

No NoQuanzhou Fengyutai EnterpriseManagement Co., Ltd.

2015/9/24 1,500

Joint liabilityguarantee

2016/6/28-2025/9/23

No NoQuanzhou Fengyutai EnterpriseManagement Co., Ltd.

2015/9/24 100

Joint liabilityguarantee

2016/8/26-2025/9/23

No NoQuanzhou Fengyutai EnterpriseManagement Co., Ltd.

2015/9/24 1,870

Joint liabilityguarantee

2017/1/18-2025/9/23

No NoNingbo Fengtai E-commerceIndustrial Park Management Co.,Ltd.

2016/8/11 2,092.50

Joint liabilityguarantee

2016/8/11-2028/8/11

No NoHefei Fengtai E-commerceIndustrial Park Management Co.,Ltd.

2016/12/30 63,1002017/7/7 622

Joint liabilityguarantee

2017/7/7-2027/

No NoTianjin Fengtai E-commerce ParkCo., Ltd.

2018/3/14 28,0002018/10/19 6,877

Joint liabilityguarantee

2018/10/19-2033/10/19

No NoTianjin Fengtai E-commerce ParkCo., Ltd.

2018/3/14 28,0002018/10/19 2,200

Joint liabilityguarantee

2018/11/9-2033/10/19

No NoTianjin Fengtai E-commerce ParkCo., Ltd.

2018/3/14 28,0002018/10/19 1,100

Joint liabilityguarantee

2018/12/19-2033/10/19

No NoTianjin Fengtai E-commerce ParkCo., Ltd.

2018/3/14 28,0002018/10/19 2,150

Joint liabilityguarantee

2019/01/28-2033/10/19

No NoWuhu Fengtai E-commerceIndustrial Park Management Co.,Ltd.

2018/3/14 18,0002019/1/18 750

Joint liabilityguarantee

2019/1/18-2034/1/18

No NoWuhu Fengtai E-commerceIndustrial Park Management Co.,Ltd.

2018/3/14 18,0002019/1/18 6,688

Joint liabilityguarantee

2019/4/1-2034/

No NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 136.88

Joint liabilityguarantee

2014/12/5-2019/1/26

Yes NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 141.36

Joint liabilityguarantee

2014/12/5-2019/2/26

Yes NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 143.97

Joint liabilityguarantee

2014/12/5-2019/3/26

Yes NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 139.78

Joint liabilityguarantee

2014/12/5-2019/4/26

Yes NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 139.96

Joint liabilityguarantee

2014/12/5-2019/5/26

Yes NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 140.39

Joint liabilityguarantee

2014/12/5-2019/6/26

Yes NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 311.56

Joint liabilityguarantee

2014/12/5-2023/8/26

No NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 342.96

Joint liabilityguarantee

2015/2/13-2023/8/26

No NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 700.88

Joint liabilityguarantee

2015/5/18-2023/8/26

No NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 2,102.65

Joint liabilityguarantee

2015/6/30-2023/8/26

No NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 1,401.77

Joint liabilityguarantee

2015/12/2-2023/8/26

No NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 1,407.03

Joint liabilityguarantee

2016/2/25-2023/8/26

No NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 771.23

Joint liabilityguarantee

2016/3/11-2023/8/26

No NoS.F. EXPRESS (CHINA) LIMITED

2013/8/26 84.64

Joint liabilityguarantee

2016/4/11-2023/8/26

No NoSF Holding Limited

2016/7/25 879.9

Joint liabilityguarantee

2016/7/25-2019/1/25

Yes NoSF Holding Limited

2016/7/25 4,047.54

Joint liabilityguarantee

2016/7/25-2021/9/30

No NoSF Holding Limited 2016/12/30 509,4002018/3/20 35,196

Joint liabilityguarantee

2018/3/20-2019/2/28

Yes NoSF Holding Limited 2018/3/14 522,3002018/7/4 57,193.50

Joint liabilityguarantee

2018/7/4-2019/

No NoSF Holding Limited 2018/3/14 522,3002018/7/11 21,997.50

Joint liabilityguarantee

2018/7/11-2019/3/18

Yes NoSF Holding Limited

2016/11/18 13,198.50

Joint liabilityguarantee

2016/11/18-2019/3/11

Yes NoSF Holding Limited 2018/3/14 522,3002019/1/11 17,598

Joint liabilityguarantee

2019/1/11-2019/5/14

Yes NoSF Holding Limited 2018/3/14 522,3002019/1/8 30,796.50

Joint liabilityguarantee

2019/1/8-2020/

No NoSF Holding Limited 2016/12/30 509,4002017/6/14 17,598

Joint liabilityguarantee

2017/6/14-2019/3/21

Yes NoSF Holding Limited 2016/12/30 509,4002018/1/16 13,198.50

Joint liabilityguarantee

2018/1/16-2020/1/16

No No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

SF Holding Limited 2018/3/14 522,3002018/7/17 4,399.50

Joint liabilityguarantee

2018/7/17-2019/3/21

Yes NoSF Holding Limited 2018/3/14 522,3002019/3/29 17,598

Joint liabilityguarantee

2019/3/29-2019/4/8

Yes NoSF Holding Limited 2019/3/16 1,013,6592019/6/26 17,598

Joint liabilityguarantee

2019/6/26-2019/7/10

No NoSF Holding Limited 2019/3/16 1,013,6592019/6/21 358,163.30

Joint liabilityguarantee

2019/06/21-2025/06/26

No NoS.F. Express Limited 2016/12/30 1,6002017/8/4 686.13

Joint liabilityguarantee

2017/8/4-2019/

Yes No S.F. Express Co., Ltd. 2016/12/30 13,5002017/6/21 100

Joint liabilityguarantee

2017/6/21-2019/4/30

Yes NoSF Airlines Company Limited 2016/12/30 76,9402017/5/28 2,000

Joint liabilityguarantee

2017/5/28-2019/6/15

Yes NoSF Airlines Company Limited 2016/12/30 76,9402017/8/7 2,500

Joint liabilityguarantee

2017/8/7-2019/

Yes NoSF Holding Limited 2016/12/30 509,4002017/6/22 14.24

Joint liabilityguarantee

2017/6/22-2020/7/16

No NoS.F. EXPRESS (HONG KONG)LIMITED

2016/12/15 5.69

Joint liabilityguarantee

2016/12/15-2019/2/14

Yes NoZhejiang Shun Feng Express Co.,Ltd.

2018/3/14 3,9002018/4/8 200

Joint liabilityguarantee

2018/4/8-2019/

Yes NoYantai S.F Express Co., Ltd. 2018/3/14 5002018/4/20 65

Joint liabilityguarantee

2018/4/20-2019/1/31

Yes NoXi'an Shunlu Logistics Co., Ltd. 2018/3/14 1,0002018/4/17 213.48

Joint liabilityguarantee

2018/4/17-2019/3/9

Yes NoSF Express ChongQing CO.LTD 2018/3/14 1,7002018/4/28 255.89

Joint liabilityguarantee

2018/4/28-2019/4/27

Yes NoS.F. Express Group (Shanghai) Co.,Ltd.

2018/3/14 2,0002018/4/27 100

Joint liabilityguarantee

2018/5/4-2019/

Yes NoS. F. Express (Shenyang) Co., Ltd 2018/3/14 2,3002018/4/28 10

Joint liabilityguarantee

2018/4/28-2019/1/31

Yes NoSF-Express(Ningxia)Co.,Ltd 2018/3/14 2002018/4/28 1

Joint liabilityguarantee

2018/4/28-2019/4/10

Yes NoS.F. Express (Huizhou) Co., Ltd. 2018/3/14 2,5002018/4/17 19.57

Joint liabilityguarantee

2018/4/17-2019/3/24

Yes NoSF Airlines Company Limited 2016/12/30 76,9402018/4/2 46.84

Joint liabilityguarantee

2018/3/8-2019/

Yes NoSF Airlines Company Limited 2016/12/30 76,9402018/4/2 22.38

Joint liabilityguarantee

2018/3/8-2019/

Yes NoSF Airlines Company Limited 2016/12/30 76,9402018/4/2 10

Joint liabilityguarantee

2018/4/2-2019/

Yes NoShenzhen Shunlu Air FreightForwarding Co., Ltd.

2016/12/30 7,0002018/1/9 1,850

Joint liabilityguarantee

2018/1/9-2019/

Yes NoShenzhen Shunlu Air FreightForwarding Co., Ltd.

2016/12/30 7,0002018/2/1 2,038

Joint liabilityguarantee

2018/2/1-2019/

Yes NoShenzhen S.F. Supply Chain Co.,Ltd.

2016/12/30 116,0002018/2/11 600

Joint liabilityguarantee

2018/2/11-2019/3/1

Yes NoShenzhen S.F. Supply Chain Co.,Ltd.

2016/12/30 116,0002018/3/21 500

Joint liabilityguarantee

2018/3/21-2019/3/20

Yes NoShenzhen S.F. Supply Chain Co.,Ltd.

2016/12/30 116,0002018/4/2 3,000

Joint liabilityguarantee

2018/4/2-2019/

Yes NoNINGBO SHUNFENG EXPRESSCO.,LTD.

2018/3/14 3,3002018/4/8 500

Joint liabilityguarantee

2018/4/12-2019/4/11

Yes NoHubei S.F. Express Co., Ltd. 2016/12/30 1,4502018/3/8 323.29

Joint liabilityguarantee

2018/3/8-2019/

Yes NoShunFeng Express Co.,Ltd.Guangxi

2016/12/30 3002018/2/9 100

Joint liabilityguarantee

2018/2/9-2019/

Yes NoChengdu Taishun Logistics Co.,Ltd.

2016/12/30 2,0002018/2/8 800

Joint liabilityguarantee

2018/2/11-2019/2/10

Yes NoBeijing S.F. Express Co., LTD. 2018/3/14 5,0002018/4/8 100

Joint liabilityguarantee

2018/4/8-2019/

Yes NoAnhui S.F Express Co., Ltd. 2016/12/30 5002018/1/10 100

Joint liabilityguarantee

2018/1/10-2019/5/31

Yes NoS.F. EXPRESS (HONG KONG)LIMITED

2016/12/30 7,7002018/2/28 13.97

Joint liabilityguarantee

2018/2/28-2019/8/31

No NoLiaoning Shunlu Logistics Co., Ltd. 2018/3/14 1,0002018/5/9 191.3

Joint liabilityguarantee

2018/5/9-2019/

Yes NoNINGBO SHUNFENG EXPRESSCO.,LTD.

2018/3/14 3,3002018/5/8 500

Joint liabilityguarantee

2018/5/8-2019/

Yes NoS.F. EXPRESS (CHINA) LIMITED

2018/3/14 1,5002018/4/18 42.3

Joint liabilityguarantee

2018/4/18-2019/5/4

Yes NoHangzhou Shunyifeng Import AndExport Trade CO., LTD

2018/3/14 1,0002018/5/18 20

Joint liabilityguarantee

2018/5/18-2019/6/4

Yes NoWuxi S.F. Express Co., Ltd. 2018/3/14 1,0002018/5/18 10

Joint liabilityguarantee

2018/5/18-2019/5/24

Yes NoHunan,S.F.Express(Group)Co.,Ltd.

2018/3/14 2,0002018/6/5 143.1

Joint liabilityguarantee

2018/6/5-2019/

Yes NoShenzhen Shuncheng Supply ChainService Co., Ltd.

2018/3/14 20,0002018/6/5 23

Joint liabilityguarantee

2018/6/5-2019/

Yes No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Shenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002018/6/5 500

Joint liabilityguarantee

2018/6/5-2019/

Yes NoSF Airlines Company Limited 2018/3/14 58,0002018/6/6 99.58

Joint liabilityguarantee

2018/6/6-2019/

Yes NoSF Airlines Company Limited 2018/3/14 58,0002018/6/12 3.32

Joint liabilityguarantee

2018/6/12-2019/6/20

Yes NoSF Airlines Company Limited 2018/3/14 58,0002018/6/12 13.28

Joint liabilityguarantee

2018/6/12-2019/6/28

Yes NoS.F.Express(Dong Guan)Limited 2018/3/14 8,5002018/6/6 186.61

Joint liabilityguarantee

2018/6/6-2019/

Yes NoShenzhen SF Fix Technology Co.,Ltd.

2018/3/14 23,0002018/6/21 400

Joint liabilityguarantee

2018/6/21-2019/1/31

Yes NoJiangxi S.F. Express Co., Ltd. 2018/3/14 1,3002018/6/28 50

Joint liabilityguarantee

2018/6/28-2019/5/31

Yes NoBeijing S.F. Express Co., LTD. 2018/3/14 5,0002018/6/22 30

Joint liabilityguarantee

2018/6/22-2019/1/20

Yes NoFoshan S.F. Express Co., Ltd. 2018/3/14 1,4002018/6/28 123.91

Joint liabilityguarantee

2018/6/28-2019/5/31

Yes NoShanghai Shuncheng Co., Ltd. 2018/3/14 6,0002018/6/22 40

Joint liabilityguarantee

2018/6/22-2019/4/30

Yes NoChongqing Huiyifeng Logistics Co.,Ltd.

2018/3/14 3,0002018/6/22 500

Joint liabilityguarantee

2018/6/22-2019/4/30

Yes NoS.F. EXPRESS (HONG KONG)LIMITED

2016/12/30 7,7002017/10/24 14.79

Joint liabilityguarantee

2017/10/24-2019/8/31

No NoBeijing Shuncheng Logistics Co.,Ltd.

2018/3/14 6,0002018/7/3 1,250

Joint liabilityguarantee

2018/7/3-2019/

Yes NoBeijing Shuncheng Logistics Co.,Ltd.

2018/3/14 6,0002018/7/3 500

Joint liabilityguarantee

2018/7/3-2019/

Yes NoAnhui S.F Express Co., Ltd. 2018/3/14 9002018/7/4 73.64

Joint liabilityguarantee

2018/7/4-2019/

Yes NoChengdu ShunyifengPharmaceutical Co., Ltd.

2018/3/14 5002018/7/3 150

Joint liabilityguarantee

2018/7/3-2019/

Yes NoHebei S.F. Express Co., Ltd. 2018/3/14 1,6002018/7/3 90

Joint liabilityguarantee

2018/7/3-2019/

Yes NoHubei S.F. Express Co., Ltd. 2018/3/14 1,8002018/7/6 42.79

Joint liabilityguarantee

2018/7/6-2019/

Yes NoJiangsu S.F. Express Co., Ltd. 2018/3/14 5002018/7/5 82.33

Joint liabilityguarantee

2018/7/5-2019/

Yes NoShandong S.F. Express Co., Ltd. 2018/3/14 1,3002018/7/3 60

Joint liabilityguarantee

2018/7/3-2019/

Yes NoShandong S.F. Express Co., Ltd. 2018/3/14 1,3002018/7/6 14

Joint liabilityguarantee

2018/7/6-2019/

Yes NoShandong S.F. Express Co., Ltd. 2018/3/14 1,3002018/7/24 255

Joint liabilityguarantee

2018/7/24-2019/5/31

Yes NoShanghai Shuncheng Co., Ltd. 2018/3/14 6,0002018/7/24 30

Joint liabilityguarantee

2018/7/24-2019/12/31

No NoShanghai Shuncheng Co., Ltd. 2018/3/14 6,0002018/7/6 380

Joint liabilityguarantee

2018/7/6-2019/

Yes NoShanghai Shunheng Logistics Co.,Ltd.

2018/3/14 5002018/7/2 100

Joint liabilityguarantee

2018/7/2-2019/

No NoShenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002018/7/2 1,000

Joint liabilityguarantee

2018/7/2-2019/

No NoShenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002018/7/2 1,300

Joint liabilityguarantee

2018/7/2-2019/

Yes NoShenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002018/7/4 39.55

Joint liabilityguarantee

2018/7/4-2019/

Yes NoShenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002018/7/18 110.54

Joint liabilityguarantee

2018/7/18-2019/8/8

No NoS.F.Express(Dong Guan)Limited 2018/3/14 8,5002018/7/18 24.31

Joint liabilityguarantee

2018/7/18-2019/5/31

Yes NoS.F.Express(Dong Guan)Limited 2018/3/14 8,5002018/7/24 186.61

Joint liabilityguarantee

2018/7/24-2019/5/1

Yes NoShenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002018/7/4 104.17

Joint liabilityguarantee

2018/7/4-2019/

Yes NoS.F.Express(Dong Guan)Limited 2018/3/14 8,5002018/7/18 226.45

Joint liabilityguarantee

2018/7/18-2019/5/31

Yes NoSichuan S.F. Express Co., Ltd. 2018/3/14 1,8002018/7/6 10

Joint liabilityguarantee

2018/7/6-2019/

Yes NoXI`AN S.F EXPRESS CO.,LTD 2018/3/14 1,5002018/7/20 125.74

Joint liabilityguarantee

2018/7/20-2019/7/15

No NoWuxi S.F. Express Co., Ltd. 2018/3/14 1,0002018/7/5 73.08

Joint liabilityguarantee

2018/7/5-2019/

Yes NoS.F. Express Co., Ltd. 2018/3/14 30,0002018/7/4 100

Joint liabilityguarantee

2018/7/4-2019/

Yes NoShanghai Shuncheng Co., Ltd. 2018/3/14 6,0002018/7/6 400

Joint liabilityguarantee

2018/7/6-2019/

Yes NoShandong S.F. Express Co., Ltd. 2018/3/14 1,3002018/7/24 20

Joint liabilityguarantee

2018/7/24-2019/5/9

Yes NoZhejiang Shun Feng Express Co.,Ltd.

2018/3/14 3,9002018/7/6 451.33

Joint liabilityguarantee

2018/7/6-2019/

Yes No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Jiangsu S.F. Express Co., Ltd. 2018/3/14 5002018/7/23 28.15

Joint liabilityguarantee

2018/7/23-2019/3/19

Yes NoS.F. EXPRESS (SINGAPORE)PRIVATE LIMITED

2018/3/14 5,4002018/7/19 159.89

Joint liabilityguarantee

2018/7/19-2019/8/3

No NoBeijing Shuncheng Logistics Co.,Ltd.

2018/3/14 6,0002018/7/31 100

Joint liabilityguarantee

2018/7/31-2019/5/31

Yes NoBeijing Shuncheng Logistics Co.,Ltd.

2018/3/14 6,0002018/7/31 200

Joint liabilityguarantee

2018/7/31-2019/5/31

Yes NoBeijing Shuncheng Logistics Co.,Ltd.

2018/3/14 6,0002018/7/31 600

Joint liabilityguarantee

2018/7/31-2019/5/7

Yes NoLanzhou S.F. Express Co., Ltd. 2018/3/14 1002018/8/9 15

Joint liabilityguarantee

2018/8/9-2019/

Yes NoHunan,S.F.Express(Group)Co.,Ltd.

2018/3/14 2,0002018/8/9 100

Joint liabilityguarantee

2018/8/9-2019/

Yes NoHunan,S.F.Express(Group)Co.,Ltd.

2018/3/14 2,0002018/8/9 200

Joint liabilityguarantee

2018/8/9-2019/

Yes NoHunan,S.F.Express(Group)Co.,Ltd.

2018/3/14 2,0002018/8/9 400

Joint liabilityguarantee

2018/8/9-2019/

Yes NoShenzhen SF Fix Technology Co.,Ltd.

2018/3/14 23,0002018/8/16 100

Joint liabilityguarantee

2018/8/16-2019/5/30

Yes NoXiamen S.F. Express Co., Ltd. 2018/3/14 1,0002018/8/16 60

Joint liabilityguarantee

2018/8/16-2019/6/30

Yes NoQINGDAO S.F.EXPRESSCO.,LTD.

2018/3/14 1,3002018/8/16 40

Joint liabilityguarantee

2018/8/16-2019/7/31

No NoNINGBO SHUNFENG EXPRESSCO.,LTD.

2018/3/14 3,3002018/8/16 30

Joint liabilityguarantee

2018/8/16-2019/4/30

Yes NoFoshan S.F. Express Co., Ltd. 2018/3/14 1,4002018/8/22 123.91

Joint liabilityguarantee

2018/8/22-2019/5/31

Yes NoZhejiang Shunlu Logistics Co.,Ltd.

2018/3/14 4,0002018/8/22 1,500

Joint liabilityguarantee

2018/8/22-2019/6/30

Yes NoShenzhen SF Fix Technology Co.,Ltd.

2018/3/14 23,0002018/8/23 1,600

Joint liabilityguarantee

2018/8/23-2019/6/30

Yes NoTIANJIN S.F. EXPRESS CO., LTD.

2018/3/14 1,4002018/8/23 106.05

Joint liabilityguarantee

2018/8/23-2019/7/31

No NoS.F. Express Co., Ltd. 2018/3/14 30,0002018/8/23 10

Joint liabilityguarantee

2018/8/23-2019/7/31

No NoShenzhen Shunlu Air FreightForwarding Co., Ltd.

2018/3/14 3,0002018/8/23 1,850

Joint liabilityguarantee

2018/8/23-2019/12/31

No NoAnhui S.F Express Co., Ltd. 2018/3/14 9002018/8/28 5

Joint liabilityguarantee

2018/8/28-2019/9/30

No NoShenzhen Shuncheng Supply ChainService Co., Ltd.

2018/3/14 20,0002018/8/28 6.6

Joint liabilityguarantee

2018/8/28-2019/10/31

No NoShunFeng Express Co.,Ltd.Guangxi

2018/3/14 1,0002018/8/28 6.01

Joint liabilityguarantee

2018/8/28-2019/10/31

No NoYunnan S.F. Express Co., Ltd. 2018/3/14 8002018/8/28 11.29

Joint liabilityguarantee

2018/8/28-2019/6/15

Yes NoXI`AN S.F EXPRESS CO.,LTD 2018/3/14 1,5002018/8/28 52.12

Joint liabilityguarantee

2018/8/28-2019/7/31

No NoJinhua S.F. Express Co., Ltd. 2018/3/14 2002018/8/28 83.68

Joint liabilityguarantee

2018/8/28-2019/8/9

No NoS.F. Express Co., Ltd. 2018/3/14 30,0002018/8/28 1,000

Joint liabilityguarantee

2018/8/28-2019/2/18

Yes NoHubei S.F. Express Co., Ltd. 2018/3/14 1,8002018/8/30 55.33

Joint liabilityguarantee

2018/8/30-2019/6/30

Yes NoS.F. Transportation (Changzhou)Co., Ltd.

2018/3/14 3002018/8/31 118.3

Joint liabilityguarantee

2018/8/31-2019/9/30

No NoSF Airlines Company Limited 2018/3/14 58,0002018/8/14 25.53

Joint liabilityguarantee

2018/8/14-2019/8/13

No NoGuang Zhou S.F. Express Co., Ltd.

2018/3/14 8,0002018/8/8 200

Joint liabilityguarantee

2018/8/8-2019/

No NoGuang Zhou S.F. Express Co., Ltd.

2018/3/14 8,0002018/8/8 1,500

Joint liabilityguarantee

2018/8/8-2019/

No NoJiangxi S.F. Express Co., Ltd. 2018/3/14 1,3002018/9/6 89.1

Joint liabilityguarantee

2018/9/6-2019/

Yes NoHunan,S.F.Express(Group)Co.,Ltd.

2018/3/14 2,0002018/9/6 90.7

Joint liabilityguarantee

2018/9/6-2019/

No NoS.F. Express Co., Ltd. 2018/3/14 30,0002018/9/12 75.88

Joint liabilityguarantee

2018/9/12-2019/9/14

No NoS.F.Express(Dong Guan)Limited 2018/3/14 8,5002018/9/13 149.62

Joint liabilityguarantee

2018/9/13-2019/7/31

No NoS.F. Express Group (Shanghai) Co.,Ltd.

2018/3/14 2,0002018/9/13 60

Joint liabilityguarantee

2018/9/13-2019/7/31

No NoShenzhen Shunlu Air FreightForwarding Co., Ltd.

2018/3/14 3,0002018/9/13 200

Joint liabilityguarantee

2018/9/13-2019/1/31

Yes NoJiangsu S.F. Express Co., Ltd. 2018/3/14 5002018/9/18 10

Joint liabilityguarantee

2018/9/18-2019/6/30

Yes NoGANZHOU S.F EXPRESS Co.,Ltd

2018/3/14 1002018/9/18 25

Joint liabilityguarantee

2018/9/18-2019/8/31

No NoS. F. Express (Shenyang) Co., Ltd 2018/3/14 2,3002018/9/20 100

Joint liabilityguarantee

2018/9/20-2019/9/7

No No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Jiangxi S.F. Express Co., Ltd. 2018/3/14 1,3002018/9/20 15

Joint liabilityguarantee

2018/9/20-2019/9/14

No NoShenzhen Shuncheng Supply ChainService Co., Ltd.

2018/3/14 20,0002018/9/19 25.04

Joint liabilityguarantee

2018/9/19-2019/9/30

No NoWuxi S.F. Express Co., Ltd. 2018/3/14 1,0002018/9/18 73.08

Joint liabilityguarantee

2018/9/18-2019/6/27

Yes NoBeijing Shuncheng Logistics Co.,Ltd.

2018/3/14 6,0002018/9/19 527.59

Joint liabilityguarantee

2018/9/19-2019/9/30

No NoS.F. EXPRESS (HONG KONG)LIMITED

2018/3/14 1,5002018/9/13 16.76

Joint liabilityguarantee

2018/9/13-2020/7/14

No NoS.F. EXPRESS (HONG KONG)LIMITED

2018/3/14 1,5002018/9/14 46.42

Joint liabilityguarantee

2018/9/14-2020/9/30

No NoSF Airlines Company Limited 2018/3/14 58,0002018/9/25 2,756.10

Joint liabilityguarantee

2018/9/25-2019/10/10

No NoChengdu Taishun Logistics Co.,Ltd.

2018/3/14 2,0002018/9/17 100

Joint liabilityguarantee

2018/9/17-2019/4/30

Yes NoZhejiang Shunlu Logistics Co.,Ltd.

2018/3/14 4,0002018/8/3 10

Joint liabilityguarantee

2018/08/03-2019/04/30

Yes NoSF Airlines Company Limited 2018/3/14 58,0002018/9/18 12.4

Joint liabilityguarantee

2018/9/18-2019/9/1

No NoShenzhen Shunlu Logistics Co., Ltd. 2018/3/14 1,0002018/9/29 338.32

Joint liabilityguarantee

2018/9/29-2019/1/31

Yes NoSF Airlines Company Limited 2018/3/14 58,0002018/9/29 2

Joint liabilityguarantee

2018/9/29-2019/4/30

Yes NoSuzhou Industrial Park S.F. ExpressCo., Ltd.

2018/3/14 1,0002018/9/28 205.17

Joint liabilityguarantee

2018/9/28-2019/2/23

Yes NoXunchuan Investment Co., Ltd. 2018/3/14 26,0002018/9/28 11,216.74

Joint liabilityguarantee

2018/9/28-2019/2/28

Yes NoXunchuan Investment Co., Ltd. 2018/3/14 26,0002018/12/17 1,375.42

Joint liabilityguarantee

2018/12/17-2019/4/30

Yes NoS.F. Express Co., Ltd. 2018/3/14 30,0002018/10/15 2,208

Joint liabilityguarantee

2018/10/15-2019/10/31

No NoZhejiang Shunlu Logistics Co.,Ltd.

2018/3/14 4,0002018/10/17 80

Joint liabilityguarantee

2018/10/17-2019/9/30

No NoAnhui S.F Express Co., Ltd. 2018/3/14 9002018/10/17 5

Joint liabilityguarantee

2018/10/17-2019/9/24

No NoSF Express ChongQing CO.LTD 2018/3/14 1,7002018/10/22 246.15

Joint liabilityguarantee

2018/10/22-2019/9/30

No NoShandong S.F. Express Co., Ltd. 2018/3/14 1,3002018/10/22 48.04

Joint liabilityguarantee

2018/10/22-2019/9/30

No NoBeijing S.F. Express Co., LTD. 2018/3/14 5,0002018/10/22 464.88

Joint liabilityguarantee

2018/10/22-2019/9/22

No NoS.F. Express Co., Ltd. 2018/3/14 30,0002018/10/9 300

Joint liabilityguarantee

2018/10/9-2019/10/7

No NoS.F. Express Co., Ltd. 2018/3/14 30,0002018/10/15 30

Joint liabilityguarantee

2018/10/15-2019/10/15

No NoSF Airlines Company Limited 2018/3/14 58,0002018/10/1 20.9

Joint liabilityguarantee

2018/10/1-2019/9/30

No NoS.F. EXPRESS (HONG KONG)LIMITED

2018/3/14 1,5002018/10/10 29.6

Joint liabilityguarantee

2018/10/10-2021/7/30

No NoBeijing Shuncheng Logistics Co.,Ltd.

2018/3/14 6,0002018/11/4 563.53

Joint liabilityguarantee

2018/11/4 -2019/10/26

No NoYancheng S.F. Express Co., Ltd. 2018/3/14 1002018/11/4 5

Joint liabilityguarantee

2018/11/4 -2019/4/30

Yes NoSF Data Service (Wuhan) Co., Ltd.

2018/3/14 5002018/11/2 77.76

Joint liabilityguarantee

2018/11/2 -2019/11/2

No NoBeijing S.F. Express Co., LTD. 2018/3/14 5,0002018/11/12 19.5

Joint liabilityguarantee

2018/11/12-2019/10/31

No NoQuanzhou Shunlu Logistics Co.,Ltd.

2018/3/14 1,5002018/11/15 75.88

Joint liabilityguarantee

2018/11/15-2019/11/30

No NoQuanzhou Shunlu Logistics Co.,Ltd.

2018/3/14 1,5002018/11/15 26.36

Joint liabilityguarantee

2018/11/15-2019/10/31

No NoZhejiang Shun Feng Express Co.,Ltd.

2018/3/14 3,9002018/11/19 250

Joint liabilityguarantee

2018/12/8 -2019/12/7

No NoS.F.EXPRESS (TIANJIN) CO.,LTD.

2018/3/14 1,0002018/11/19 72.06

Joint liabilityguarantee

2018/11/19-2019/11/28

No NoShandong S.F. Express Co., Ltd. 2018/3/14 1,3002018/11/19 5

Joint liabilityguarantee

2018/11/19-2019/11/30

No NoXI`AN S.F EXPRESS CO.,LTD 2018/3/14 1,5002018/11/21 9.42

Joint liabilityguarantee

2018/11/21-2019/11/30

No NoYunnan S.F. Express Co., Ltd. 2018/3/14 8002018/11/23 10

Joint liabilityguarantee

2018/11/23 -2019/11/5

No NoS.F. Express Group (Shanghai) Co.,Ltd.

2018/3/14 2,0002018/11/23 200

Joint liabilityguarantee

2018/11/23-2019/10/31

No NoQINGDAO S.F.EXPRESSCO.,LTD.

2018/3/14 1,3002018/11/23 260

Joint liabilityguarantee

2018/11/23-2019/11/30

No NoSichuan S.F. Express Co., Ltd. 2018/3/14 1,8002018/11/23 56.69

Joint liabilityguarantee

2018/11/23 -2019/8/31

No NoShenzhen Shuncheng Supply ChainService Co., Ltd.

2018/3/14 20,0002018/11/22 7.88

Joint liabilityguarantee

2018/11/22-2019/9/30

No No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Anhui S.F Express Co., Ltd. 2018/3/14 9002018/11/22 23.64

Joint liabilityguarantee

2018/11/22-2019/11/30

No NoSF Express ChongQing CO.LTD 2018/3/14 1,7002018/11/2 20.81

Joint liabilityguarantee

2018/11/2-2020/2/28

No NoSuzhou Industrial Park S.F. ExpressCo., Ltd.

2018/3/14 1,0002018/11/15 19.25

Joint liabilityguarantee

2018/11/15-2019/10/15

No NoSuzhou Industrial Park S.F. ExpressCo., Ltd.

2018/3/14 1,0002018/11/15 22.62

Joint liabilityguarantee

2018/11/15-2019/8/31

No NoS.F. EXPRESS (HONG KONG)LIMITED

2018/3/14 1,5002018/11/26 12.71

Joint liabilityguarantee

2018/11/26-2020/8/12

No NoS.F. EXPRESS (HONG KONG)LIMITED

2018/3/14 1,5002018/11/2 10.34

Joint liabilityguarantee

2018/11/2-2020/10/4

No NoGZ SF Pharmaceutical SupplyChain Co., Ltd.

2018/3/14 1,0002018/12/6 20

Joint liabilityguarantee

2018/12/6-2019/9/30

No NoSuzhou Industrial Park S.F. ExpressCo., Ltd.

2018/3/14 1,0002018/12/6 15

Joint liabilityguarantee

2018/12/6-2019/4/30

Yes NoHeilongjiang S.F. Express Co., Ltd.

2018/3/14 1,6002018/12/6 100

Joint liabilityguarantee

2018/12/6-2019/11/28

No NoLiaoning Shunlu Logistics Co., Ltd. 2018/3/14 1,0002018/12/6 420

Joint liabilityguarantee

2018/12/6-2019/10/31

No NoBeijing Shuncheng Logistics Co.,Ltd.

2018/3/14 6,0002018/12/17 527.59

Joint liabilityguarantee

2018/12/17-2019/9/30

No NoZhejiang Shun Feng Express Co.,Ltd.

2018/3/14 3,9002018/12/17 1,000

Joint liabilityguarantee

2018/12/17-2019/6/30

Yes NoJiangsu Huihai Logistics Co.,Ltd. 2018/3/14 2002018/12/17 20

Joint liabilityguarantee

2018/12/17-2019/10/14

No NoS. F. Express (Shenyang) Co., Ltd 2018/3/14 2,3002018/12/5 107.75

Joint liabilityguarantee

2018/12/5-2019/11/30

No NoS.F.Express(Dong Guan)Limited 2018/3/14 8,5002018/12/19 993.23

Joint liabilityguarantee

2018/12/19-2019/11/20

No NoAnhui S.F Express Co., Ltd. 2018/3/14 9002018/12/25 59.72

Joint liabilityguarantee

2018/12/25-2019/12/31

No NoS.F. Express Co., Ltd. 2018/3/14 30,0002018/12/25 233.15

Joint liabilityguarantee

2018/12/25-2019/11/30

No NoShuncheng Financial Lease(Shenzheng) Co., Ltd.

2018/2/9 7,000

Joint liabilityguarantee

2018/2/9-2019/

Yes NoShuncheng Financial Lease(Shenzheng) Co., Ltd.

2018/2/9 7,000

Joint liabilityguarantee

2018/2/9-2019/

Yes NoShanghai Fengtaiyuanxing PropertyManagement Co., Ltd.

2018/3/14 10,0002018/9/1 4,578.29

Joint liabilityguarantee

2018/09/01-2021/08/31

No NoChengdu ShunyifengPharmaceutical Co., Ltd.

2018/3/14 5002018/12/25 5

Joint liabilityguarantee

2018/12/25-2019/3/31

Yes NoSF Airlines Company Limited 2018/3/14 58,0002018/12/25 2,500

Joint liabilityguarantee

2019/2/7-2021/

No NoAnhui S.F Express Co., Ltd. 2018/3/14 9002019/1/25 5

Joint liabilityguarantee

2019/1/25-2020/1/21

No NoS.F. EXPRESS (CHINA) LIMITED

2018/3/14 1,5002019/1/2 8.56

Joint liabilityguarantee

2019/1/2-2019/

No NoS.F. EXPRESS (CHINA) LIMITED

2018/3/14 1,5002019/1/18 8.56

Joint liabilityguarantee

2019/1/18-2020/1/4

No NoS.F. EXPRESS (CHINA) LIMITED

2018/3/14 1,5002019/1/21 12.85

Joint liabilityguarantee

2019/1/21-2019/12/31

No NoS.F. EXPRESS (CHINA) LIMITED

2018/3/14 1,5002019/1/17 85.64

Joint liabilityguarantee

2019/1/17-2019/12/31

No NoAnhui S.F Express Co., Ltd. 2018/3/14 9002019/1/31 80

Joint liabilityguarantee

2019/1/31-2019/5/31

Yes NoAnhui S.F Express Co., Ltd. 2018/3/14 9002019/1/22 24.6

Joint liabilityguarantee

2019/1/22-2019/12/31

No NoBeijing Shuncheng Logistics Co.,Ltd.

2018/3/14 6,0002019/1/29 100

Joint liabilityguarantee

2019/1/29-2019/12/31

No NoBeijing S.F. Express Co., LTD. 2018/3/14 5,0002019/1/7 30

Joint liabilityguarantee

2019/1/7-2019/

No NoChengdu ShunyifengPharmaceutical Co., Ltd.

2018/3/14 5002019/1/17 43.63

Joint liabilityguarantee

2019/1/17-2019/12/31

No NoChengdu Taishun Logistics Co.,Ltd.

2018/3/14 2,0002019/1/29 800

Joint liabilityguarantee

2019/1/29-2019/4/30

Yes NoFoshan S.F. Express Co., Ltd. 2018/3/14 1,4002019/1/14 76.99

Joint liabilityguarantee

2019/1/14-2019/12/31

No NoShunFeng Express Co.,Ltd.Guangxi

2018/3/14 1,0002019/1/21 100

Joint liabilityguarantee

2019/1/21-2020/1/31

No NoGuizhou S.F. Express Co., Ltd. 2018/3/14 9002019/1/7 12.21

Joint liabilityguarantee

2019/1/7-2019/

No NoHaiNan S.F.Express LTD. 2018/3/14 1,1002019/1/21 35

Joint liabilityguarantee

2019/1/21-2019/10/29

No NoHaiNan S.F.Express LTD. 2018/3/14 1,1002019/1/21 100

Joint liabilityguarantee

2019/1/21-2019/11/30

No NoHENAN S.F.EXPRESS CO.,LTD 2018/3/14 1,1002019/1/29 126.93

Joint liabilityguarantee

2019/1/29-2019/5/31

Yes NoHubei S.F. Express Co., Ltd. 2018/3/14 1,8002019/1/25 42.79

Joint liabilityguarantee

2019/1/25-2020/1/15

No No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

NINGBO SHUNFENG EXPRESSCO.,LTD.

2018/3/14 3,3002019/1/7 500

Joint liabilityguarantee

2019/1/7-2020/

No NoQuanzhou Shunlu Logistics Co.,Ltd.

2018/3/14 1,5002019/1/29 300

Joint liabilityguarantee

2019/1/29-2019/12/31

No NoQuanzhou Shunlu Logistics Co.,Ltd.

2018/3/14 1,5002019/1/29 300

Joint liabilityguarantee

2019/1/29-2019/12/31

No NoXiamen S.F. Express Co., Ltd. 2018/3/14 1,0002019/1/29 20

Joint liabilityguarantee

2019/1/29-2019/12/31

No NoShanghai Shuncheng Co., Ltd. 2018/3/14 6,0002019/1/25 30

Joint liabilityguarantee

2019/1/25-2019/12/31

No NoShenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002019/1/15 120.13

Joint liabilityguarantee

2019/1/15-2019/12/31

No NoShenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002019/1/28 36.77

Joint liabilityguarantee

2019/1/28-2020/1/20

No NoShenzhen Shunlu Air FreightForwarding Co., Ltd.

2018/3/14 3,0002019/1/29 2,230

Joint liabilityguarantee

2019/1/29-2019/12/31

No NoShenzhen Shunlu Air FreightForwarding Co., Ltd.

2018/3/14 3,0002019/1/31 50

Joint liabilityguarantee

2019/1/31-2020/1/1

No NoShenzhen Shunlu Logistics Co., Ltd. 2018/3/14 1,0002019/1/10 123.91

Joint liabilityguarantee

2019/1/10-2020/1/31

No NoSF Airlines Company Limited 2018/3/14 58,0002019/1/10 18.19

Joint liabilityguarantee

2019/1/10-2020/5/31

No NoS. F. Express (Shenyang) Co., Ltd 2018/3/14 2,3002019/1/21 10

Joint liabilityguarantee

2019/1/21-2020/4/30

No NoS. F. Express (Shenyang) Co., Ltd 2018/3/14 2,3002019/1/21 10

Joint liabilityguarantee

2019/1/21-2020/4/30

No NoS.F.EXPRESS (TIANJIN) CO.,LTD.

2018/3/14 1,0002019/1/23 61.35

Joint liabilityguarantee

2019/1/23-2020/1/20

No NoSF Express ChongQing CO.LTD 2018/3/14 1,7002019/1/4 110

Joint liabilityguarantee

2019/1/4-2019/

No NoS.F. EXPRESS (HONG KONG)LIMITED

2018/3/14 1,5002019/1/2 3.1

Joint liabilityguarantee

2019/1/2-2020/

No NoS.F. EXPRESS (HONG KONG)LIMITED

2018/3/14 1,5002019/1/3 11.97

Joint liabilityguarantee

2019/1/3-2020/

No NoSichuan S.F. Express Co., Ltd. 2018/3/14 1,8002019/1/29 5

Joint liabilityguarantee

2019/1/29-2020/1/31

No NoSichuan S.F. Express Co., Ltd. 2018/3/14 1,8002019/1/29 5.19

Joint liabilityguarantee

2019/1/29-2019/11/14

No NoTIANJIN S.F. EXPRESS CO., LTD.

2018/3/14 1,4002019/1/10 80.9

Joint liabilityguarantee

2019/1/10-2020/1/31

No NoQINGDAO S.F.EXPRESSCO.,LTD.

2018/3/14 1,3002019/1/10 56.77

Joint liabilityguarantee

2019/1/10-2019/12/14

No No S.F. Express Co., Ltd. 2018/3/14 30,0002019/1/7 140.46

Joint liabilityguarantee

2019/1/7-2019/

No NoZhejiang Shun Feng Express Co.,Ltd.

2018/3/14 3,9002019/1/10 7

Joint liabilityguarantee

2019/1/10-2019/3/5

Yes NoS.F. EXPRESS (CHINA) LIMITED

2018/3/14 1,5002019/1/31 51.38

Joint liabilityguarantee

2019/1/31-2020/1/14

No NoChongqing Huiyifeng Logistics Co.,Ltd.

2018/3/14 3,0002019/1/31 1,500

Joint liabilityguarantee

2019/1/31-2020/1/24

No NoSuzhou Industrial Park S.F. ExpressCo., Ltd.

2018/3/14 1,0002019/2/20 15

Joint liabilityguarantee

2019/2/20-2019/4/30

Yes NoWenzhou Shunheng Express Co.,Ltd.

2018/3/14 5002019/2/20 2

Joint liabilityguarantee

2019/2/20-2020/1/6

No NoFAST DELIVER INVESTMENTLIMITED)

2018/3/14 26,0002019/3/5 6,586.89

Joint liabilityguarantee

2019/3/5-2019/

Yes NoFAST DELIVER INVESTMENTLIMITED)

2018/3/14 26,0002019/3/5 6,586.89

Joint liabilityguarantee

2019/3/5-2019/

No NoJiangxi Shunlu Logistics Co.,Ltd. 2018/3/14 1002019/3/4 50

Joint liabilityguarantee

2019/3/4-2020/

No NoShenzhen SF Fix Technology Co.,Ltd.

2018/3/14 23,0002019/3/5 20

Joint liabilityguarantee

2019/3/5-2019/

No NoShenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002019/3/5 1,300

Joint liabilityguarantee

2019/3/5-2020/

No No S.F. Express Co., Ltd. 2018/3/14 30,0002019/3/5 300

Joint liabilityguarantee

2019/3/5-2020/

No NoZhanjiang S.F. Express Co., Ltd. 2018/3/14 7002019/3/5 25

Joint liabilityguarantee

2019/3/5-2020/

No NoShenzhen SF ComprehensiveLogistics Service Co., Ltd.

2018/3/14 5002019/3/12 150

Joint liabilityguarantee

2019/3/12-2019/12/31

No NoXi'an Shunlu Logistics Co., Ltd. 2018/3/14 1,0002019/3/13 222.02

Joint liabilityguarantee

2019/3/13-2020/3/9

No NoXinjiang S.F. Express Co., Ltd. 2018/3/14 6002019/3/13 2

Joint liabilityguarantee

2019/3/13-2020/3/7

No NoSF Airlines Company Limited 2018/3/14 58,0002019/3/18 10

Joint liabilityguarantee

2019/3/18-2020/3/31

No NoShenzhen Shunlu Logistics Co., Ltd. 2018/3/14 1,0002019/3/19 80

Joint liabilityguarantee

2019/3/19-2020/6/30

No NoShenzhen SF Fix Technology Co.,Ltd.

2018/3/14 23,0002019/3/26 400

Joint liabilityguarantee

2019/3/26-2020/1/31

No No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Yantai S.F Express Co., Ltd. 2018/3/14 5002019/3/26 65

Joint liabilityguarantee

2019/3/26-2020/1/31

No NoSF Airlines Company Limited 2018/3/14 58,0002019/3/26 21.84

Joint liabilityguarantee

2019/3/26-2020/3/7

No NoJiangsu S.F. Express Co., Ltd. 2018/3/14 5002019/3/27 28.15

Joint liabilityguarantee

2019/3/27-2020/3/19

No No S.F. Express Co., Ltd. 2018/3/14 30,0002019/3/27 20

Joint liabilityguarantee

2019/3/27-2019/12/31

No NoTibet S.F. Express Co., Ltd. 2018/3/14 1002019/3/27 5

Joint liabilityguarantee

2019/3/27-2020/2/29

No NoS.F. Express (Huizhou) Co., Ltd. 2018/3/14 2,5002019/3/28 19.57

Joint liabilityguarantee

2019/3/28-2020/3/24

No NoShenzhen S.F. Supply Chain Co.,Ltd.

2018/3/14 26,1002019/3/28 600

Joint liabilityguarantee

2019/3/28-2020/2/29

No NoS.F. Express Co., Ltd. 2018/3/14 30,0002019/3/28 200

Joint liabilityguarantee

2019/3/28-2020/3/1

No NoS.F. Express Co., Ltd. 2018/3/14 30,0002019/3/29 3,000

Joint liabilityguarantee

2019/3/29-2020/3/14

No NoJiangxi S.F. Express Co., Ltd. 2018/3/14 1,3002019/3/29 223.43

Joint liabilityguarantee

2019/3/29-2020/3/15

No NoZhongshan S.F. Express Co., Ltd. 2018/3/14 1,0002019/3/27 141.98

Joint liabilityguarantee

2019/3/27-2020/3/26

No NoHunan,S.F.Express(Group)Co.,Ltd.

2018/3/14 2,0002019/3/26 90.7

Joint liabilityguarantee

2019/3/26-2019/11/30

No NoZhejiang Shun Feng Express Co.,Ltd.

2019/3/16 2,0002019/4/29 50

Joint liabilityguarantee

2019/4/29-2020/4/28

No NoBeijing S.F. Express Co., LTD. 2018/3/14 5,0002019/4/3 100

Joint liabilityguarantee

2019/4/3-2020/

No NoChengdu ShunyifengPharmaceutical Co., Ltd.

2019/3/16 1002019/4/19 20

Joint liabilityguarantee

2019/4/19-2019/12/31

No NoNINGBO SHUNFENG EXPRESSCO.,LTD.

2019/3/16 2,5002019/4/10 550

Joint liabilityguarantee

2019/4/10-2020/5/7

No NoShenzhen Shunlu Logistics Co., Ltd. 2019/3/16 2,1002019/4/19 380.61

Joint liabilityguarantee

2019/4/19-2020/1/31

No NoSF Airlines Company Limited 2019/3/16 26,0002019/4/19 2,000

Joint liabilityguarantee

2019/4/19-2020/5/26

No NoS.F.Express(Dong Guan)Limited 2019/3/16 1,8002019/4/10 15.03

Joint liabilityguarantee

2019/4/10-2020/4/2

No NoS.F. Express Group (Shanghai) Co.,Ltd.

2019/3/16 8002019/4/24 100

Joint liabilityguarantee

2019/4/24-2020/5/4

No NoSF Express ChongQing CO.LTD 2019/3/16 8002019/4/10 264.85

Joint liabilityguarantee

2019/4/10-2020/4/30

No NoSF Transportation (Nanjing) Co.,Ltd.

2019/3/16 3002019/4/19 100

Joint liabilityguarantee

2019/4/19-2020/4/8

No NoS.F. EXPRESS (HONG KONG)LIMITED

2019/3/16 8,2002019/4/26 12.97

Joint liabilityguarantee

2019/4/26-2021/5/15

No NoSichuan S.F. Express Co., Ltd. 2019/3/16 5002019/4/10 20

Joint liabilityguarantee

2019/4/10-2020/5/14

No NoXinjiang S.F. Express Co., Ltd. 2018/3/14 6002019/4/3 6

Joint liabilityguarantee

2019/4/3-2020/

No NoZhejiang Shunlu Logistics Co.,Ltd.

2018/3/14 4,0002019/4/3 30

Joint liabilityguarantee

2019/4/3-2019/

No NoS.F. EXPRESS (HONG KONG)LIMITED

2019/3/16 8,2002019/5/23 85.64

Joint liabilityguarantee

2019/5/23-2022/5/31

No NoS.F. EXPRESS (HONG KONG)LIMITED

2019/3/16 8,2002019/5/23 144.39

Joint liabilityguarantee

2019/5/23-2022/5/31

No NoS.F. EXPRESS (CHINA) LIMITED

2019/3/16 1,0002019/5/29 42.82

Joint liabilityguarantee

2019/5/29-2020/7/6

No NoAnhui S.F Express Co., Ltd. 2019/3/16 5002019/5/31 180

Joint liabilityguarantee

2019/5/31-2020/5/31

No NoChengdu Taishun Logistics Co.,Ltd.

2019/3/16 1,5002019/5/22 900

Joint liabilityguarantee

2019/5/22-2020/4/30

No NoHebei S.F. Express Co., Ltd. 2019/3/16 3002019/4/30 90

Joint liabilityguarantee

2019/4/30-2020/5/11

No NoHenan Huihai Logistics Co., Ltd. 2018/3/14 3002019/4/8 151.72

Joint liabilityguarantee

2019/4/8-2020/

No NoHubei S.F. Transportation Co., Ltd.

2018/3/14 5002019/4/8 323.29

Joint liabilityguarantee

2019/4/8-2020/

No NoLiaoning Shunlu Logistics Co., Ltd. 2019/3/16 7002019/5/6 191.3

Joint liabilityguarantee

2019/5/6-2020/

No NoInner Mongolia S.F ExpressCO.Ltd.

2019/3/16 1002019/5/28 10

Joint liabilityguarantee

2019/5/28-2020/3/31

No NoShenzhen S.F. Supply Chain Co.,Ltd.

2019/3/16 10,9002019/4/30 3,000

Joint liabilityguarantee

2019/4/30-2020/3/31

No NoSF-Express(Ningxia)Co.,Ltd 2018/3/14 2002019/4/8 100

Joint liabilityguarantee

2019/4/8-2020/

No NoS.F. Express Co., Ltd. 2019/3/16 25,0002019/5/6 100

Joint liabilityguarantee

2019/5/6-2020/

No NoWuxi S.F. Express Co., Ltd. 2019/3/16 5002019/5/23 20

Joint liabilityguarantee

2019/5/23-2020/5/24

No No

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

S.F. Express Co., Ltd. 2019/3/16 25,0002019/6/11 200

Joint liabilityguarantee

2019/6/11-2020/4/16

No NoShenzhen Shuncheng Supply ChainService Co., Ltd.

2019/3/16 1,0002019/6/19 23

Joint liabilityguarantee

2019/6/19-2020/5/31

No NoS.F. Express Co., Ltd. 2019/3/16 25,0002019/6/19 4

Joint liabilityguarantee

2019/6/19-2020/4/16

No NoShanghai Shuncheng Co., Ltd. 2019/3/16 2,0002019/6/21 400

Joint liabilityguarantee

2019/6/21-2020/6/22

No NoFS ELECTRONIC TECHNOLOGYCO., LIMITED

2019/3/16 4,0002019/6/20 25.76

Joint liabilityguarantee

2019/6/20-2020/3/31

No NoShenzhen SF Fix Technology Co.,Ltd.

2019/3/16 20,8002019/6/5 1,600

Joint liabilityguarantee

2019/6/5-2020/

No NoShenzhen S.F. Supply Chain Co.,Ltd.

2019/3/16 10,9002019/6/5 104.17

Joint liabilityguarantee

2019/6/5-2020/

No NoShandong S.F. Express Co., Ltd. 2019/3/16 1,0002019/6/10 60

Joint liabilityguarantee

2019/6/10-2020/5/31

No NoXI`AN S.F EXPRESS CO.,LTD 2019/3/16 3002019/6/21 53.84

Joint liabilityguarantee

2019/6/21-2020/6/17

No NoTibet S.F. Express Co., Ltd. 2019/3/16 2002019/5/29 2

Joint liabilityguarantee

2019/5/29-2020/4/30

No NoShanghai ShunxiaofengTransportation Co., Ltd.

2019/3/16 2002019/6/4 50

Joint liabilityguarantee

2019/6/4-2019/

No NoS.F. EXPRESS (CHINA) LIMITED

2019/3/16 1,0002019/6/11 42.93

Joint liabilityguarantee

2019/6/11-2020/5/31

No NoE COMMERCE FULFILLMENTCOMPANY LIMITED

2019/3/16 7,0602019/6/19 20.98

Joint liabilityguarantee

2019/6/19-2019/12/12

No NoShandong S.F. Express Co., Ltd. 2019/3/16 1,0002019/6/10 14

Joint liabilityguarantee

2019/6/10-2020/1/31

No NoZhejiang Shunlu Logistics Co.,Ltd.

2019/3/16 1,8002019/5/30 650

Joint liabilityguarantee

2019/5/30-2019/12/31

No NoShandong S.F. Express Co., Ltd. 2019/3/16 1,0002019/6/21 255

Joint liabilityguarantee

2019/6/21-2020/6/30

No NoXi'an Shunlu Logistics Co., Ltd. 2019/3/16 4002019/6/24 80

Joint liabilityguarantee

2019/6/24-2020/5/31

No NoS.F. Express Co., Ltd. 2019/3/16 25,0002019/6/26 300

Joint liabilityguarantee

2019/6/26-2020/5/31

No NoShanxi S.F. Express Co., Ltd. 2019/3/16 2002019/6/25 35

Joint liabilityguarantee

2019/6/25-2019/12/31

No NoShanxi S.F. Express Co., Ltd. 2019/3/16 2002019/6/25 6

Joint liabilityguarantee

2019/6/25-2019/12/31

No NoWuxi S.F. Express Co., Ltd. 2019/3/16 5002019/6/27 73.08

Joint liabilityguarantee

2019/6/27-2020/6/27

No NoDHL Logistics (Beijing) Co., Ltd. 2019/3/16 3,1002019/5/10 237.86

Joint liabilityguarantee

2019/5/10-2020/7/15

No NoDHL Logistics (Beijing) Co., Ltd. 2019/3/16 3,1002019/5/13 58.86

Joint liabilityguarantee

2019/5/13-2020/7/15

No NoDHL Logistics (Beijing) Co., Ltd. 2019/3/16 3,1002019/4/30 30

Joint liabilityguarantee

2019/4/30-2019/7/31

No NoDHL Logistics (Beijing) Co., Ltd. 2019/3/16 3,1002019/6/13 24.85

Joint liabilityguarantee

2019/6/13-2020/7/31

No NoEXEL LOGISTICS CHINACO.,LTD.

2019/3/16 1,1002019/6/13 63.61

Joint liabilityguarantee

2019/6/13-2020/1/31

No NoDHL Logistics (Beijing) Co., Ltd. 2019/3/16 3,1002019/4/17 50

Joint liabilityguarantee

2019/4/17-2020/3/21

No NoShunyuan Financial Lease (Tianjin)Co., Ltd.

2019/3/16 70,0002019/4/22 20,000

Joint liabilityguarantee

2019/5/10-2024/01/24

No NoTotal guarantee quota approved forsubsidiaries during the reportingperiod(C1)

2,500,000.00

Total actual amount ofguarantees for subsidiariesduring the reporting period(C2)

514,935.67Total guarantee quota approved forthe subsidiaries at the end of thereporting period(C3)

2,709,447.09

Total actual guarantee

b

alance for subsidiaries at theend of the reporting period(C4)

617,950.90Total guarantee amount provided by the CompanyTotal guarantee quota approvedduring the reporting period(B1+C1)

3,650,000.00

Total actual amount ofguarantee during thereporting period(B2+C2)

873,098.97Total guarantee quota approved atthe end of the reporting period(B3+C3)

3,845,138.80

Total actual guaranteebalance at the end of thereporting period(B4+C4)

961,805.90Total guarantee amount (B4+C4) to net assets of the Company 25.04%Of which:

Amount of guarantee for shareholders, actual controller, and their relatedparties (D)

-Amount of debt guarantee provided for guaranteed party whose asset-liabilityratio is not less than 70% directly or indirectly (E)

35,673.67Amount of total guarantee over 50% of net assets (F) -Total amount of the above three guarantees (D+E+F) 35,673.67Explanation of warranty liability or possible joint liquidation (if any) N/A

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Explanation of provision of guarantees for external parties in violation of theprescribed procedure (if any)

N/A

Before Taisen Holding was incorporated into the listed Company in December 2016, Taisen Holding and its subsidiariesperformed external guarantee procedures in accordance with their own Articles of Corporation and other relevant regulations. AfterTaisen Holding was incorporated into the listed Company in December 2016, as a subsidiary of the listed Company, Taisen Holdingand its subsidiaries strictly performed the review and disclosure procedures of external guarantees in accordance with relevant lawsand regulations such as the Stock Listing Rules of Shenzhen Stock Exchange and other related laws and regulations.

(2) Illegal provision of guarantees for external parties

□Applicable √ Not applicable

No such cases in the reporting period.

3. Other significant contracts

□Applicable √Not applicable

No such cases in the reporting period.

XV. Social Responsibilities

1. Environmental protection

Did the listed Company and its subsidiaries belong to the major pollutant discharge units announced by theMinistry of Ecology and Environment?NoThe Company and its subsidiaries are not part of the major pollutant discharge units announced by the Ministry ofEcology and Environment.

2. Targeted Poverty Alleviation Program

□Applicable √ Not applicable

During the reporting period, the Company did not carry out any Targeted Poverty Alleviation Program.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

XVI. Other Major Issues

√ Applicable □Not applicable

1. Issuance of debt financing products in domestic and international markets by wholly-owned subsidiaries

In order to satisfy the development requirements of domestic and international business, reduce financing costsand optimize the debt structure according to the development strategies of the Company, at the 18

thmeeting of the4th session of the Board and the 2019 first extraordinary general meeting convened by the Company on January 3,2019 and January 23, 2019 respectively, the “Resolution regarding the Issuance of Debt Financing Products inDomestic and International Markets by Wholly-owned Subsidiaries” was considered and approved, and theCompany was authorised to issue debt financing products in domestic and international markets through TaisenHolding and SF Holding Investment Limited, the wholly-owned subsidiaries, for an equivalent amount of no morethan RMB16 billion (inclusive), including RMB10 billion which are the expected size of issuance in domesticmarket and RMB6 billion which are the expected size of issuance in international market. On March 20, 2019,Taisen Holding received from CSRC the “Approval for Public Issuance of Corporate Bonds to Eligible Investorsby Shenzhen S.F. Taisen Holding (Group) Co., Ltd.” (Zheng Jian Xu Ke (证监许可) [2019] No.388) pursuant to

which Taisen Holding was approved to issue corporate bonds for a total nominal amount of no more than RMB2billion to eligible investors through public issuance. On March 26, 2019, Taisen Holding received from theNational Association of Financial Market Institutional Investors the “Notice of Registration Acceptance” (ZhongShi Xie Zhu (中市协注) [2019] No. SCP71) pursuant to which the National Association of Financial Market

Institutional Investors has accepted the registration of the super short-term commercial paper of Taisen Holdingwith a registered amount of RMB3 billion. On April 10, 2019, Taisen Holding completed the offering of the firsttranche of super short-term commercial paper for 2019 with an issued amount of RMB500 million. On July 12,2019, Taisen Holding completed the offering of the second tranche of super short-term commercial paper for 2019with an issued amount of RMB500 million. On August 23, 2019, Taisen Holding completed the offering of thethird tranche of super short-term commercial paper for 2019 with an issued amount of RMB500 million. Fordetails, please refer to the announcements (2019-006, 2019-051, 2019-053, 2019-060 、2019-083 and 2019-094)of the Company disclosed on http://www.cninfo.com.cn.

2. Issuance of convertible bonds by the Company

In order to enhance the Company’s competitiveness, increase its profitability, further strengthen its corecompetitiveness and increase its capabilities of sustainable development according to the development strategiesof the Company, at the 21

stmeeting of the 4th session of the Board and the 2019 second extraordinary generalmeeting convened by the Company on April 23, 2019 and May 9, 2019 respectively, resolutions regarding thepublic issuance of convertible corporate bonds were considered and approved. The total amount of proceeds to beraised from such public issuance of convertible corporate bonds shall not exceed RMB6.5 billion. The Companyconvened the 23

rdmeeting of the 4th session of the Board on August 6, 2019 to consider and approve the“Resolution regarding Adjustment to the Proposal of Public Issuance of Convertible Corporate Bonds by theCompany” such that the total amount of proceeds from the public issuance of convertible corporate bonds willdecrease from an amount not exceeding RMB6.5 billion (inclusive) to an amount not exceeding RMB5.8 billion(inclusive), and the use of proceeds will be adjusted accordingly. On August 23, 2019, the application for publicissuance of convertible corporate bonds by the Company was considered and approved by the China SecuritiesIssuance Examination Committee (“CSIEC”) of CSRC. As of the disclosure date of this report, the Company hasnot yet received the written approval document from CSRC.For details, please refer to the announcements(2019-072, 2019-081、2019-089 and 2019-093) of the Company disclosed on http://www.cninfo.com.cn.

3. Commencement of asset securitization Business

In order to revitalize existing assets and enhance the capital utilization efficiency, the Company has established aspecial asset-backed plan by using the logistics industrial park held by the subsidiary Shenzhen FengtaiE-Commerce Industrial Park Asset Management Co., Ltd. as the principal and raised funds by means of theissuance of asset-backed securities under the plan. On November 21, 2018, the Company obtained the “NoObjection Letter regarding Huatai Asset Management’s ‘Huatai Jiayue - Shunfeng Industrial Park Phase IAsset-Backed Special Plan’ being in line with the Conditions for Listing on the Shenzhen Stock Exchange” (ShenZheng Han (深证函) [2018] No. 666) issued by the Shenzhen Stock Exchange, and the total size of issuance by

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

way of shelf-offering approved in the No Objection Letter was RMB5 billion for a valid period of two years. In2018, the Company issued the first tranche of asset-backed securities with a total size of RMB1.846 billion. OnJune 13, 2019, the Company convened the 22

nd meeting of the 4th session of the Board and the 19

th

meeting of the4th session of the Board of Supervisors respectively at which the “Resolution regarding the Commencement ofAsset Securitization and Related Party Transactions” was considered and approved. The Company proposed tocontinue the development of the asset securitization business and raise funds by means of issuance of asset-backedsecurities under the special plan. The tranche issued in the reporting period was the second tranche within theamount authorized for shelf-offering under the special plan, and the total amount of asset-backed securitiesproposed to be issued in this tranche shall not exceed RMB1.5 billion. For details, please refer to theannouncement (2019-078) of the Company disclosed on http://www.cninfo.com.cn. As of the disclosure date ofthis report, transaction documents relating to this tranche under the special plan have not been signed.

4. Signing of the Strategic Cooperation Agreement between a wholly-owned subsidiary and China

Pacific Insurance (Group) Co., Ltd.As both the Company and China Pacific Insurance (Group) Co., Ltd. (“China Pacific Insurance”) are leaders intheir respective industries, to promote the continuous rapid development of both parties in their respectiveindustries and fully utilize their resources and industry advantages, Taisen Holding and China Pacific Insuranceentered into the Strategic Cooperation Agreement on June 17, 2019 after due consultations. On the basis ofdeepening cooperation in conventional areas, both parties are willing to focus on complementation to each other’sstrengths and resources and sharing core capabilities to carry out multi-level and multi-area strategic cooperationto realize mutual benefits and joint developments. The strategic cooperation will have positive effects on thefuture development of principal business of the Company which will be conducive to the long-term developmentof the Company. For details, please refer to the announcement (2019-079) disclosed on http://www.cninfo.com.cn.

A disclosure index for the above-mentioned significant events and other significant events is as below:

Announcement Disclosure Date Disclosure WebsiteAnnouncement on Issuance of Debt Financing Products inDomestic and International Markets by Wholly-ownedSubsidiaries (2019-006)

January 4, 2019 http://www.cninfo.com.cnAnnouncement on the Progress of Acquisition of 100% EquityInterest in DHL Supply Chain (Hong Kong) Limited and DHLLogistics (Beijing) Co., Ltd. (2019-013)

January 5, 2019 http://www.cninfo.com.cnAnnouncement on the Progress of the Hubei InternationalLogistics Hub Project (2019-016)

January 17, 2019 http://www.cninfo.com.cnAnnouncement on the Progress of Acquisition of 100% EquityInterest in DHL Supply Chain (Hong Kong) Limited and DHLLogistics (Beijing) Co., Ltd. (2019-023)

February 19, 2019 http://www.cninfo.com.cnAnnouncement on the Progress of the Hubei InternationalLogistics Hub Project (2019-031)

March 2, 2019 http://www.cninfo.com.cnAnnouncement on Obtaining Approval from CSRC for PublicIssuance of Corporate Bonds to Eligible Investors by ShenzhenS.F. Taisen Holding (Group) Co., Ltd., a Wholly-ownedSubsidiary of the Company (2019-051)

March 22, 2019 http://www.cninfo.com.cnAnnouncement on Receiving Notice of Registration Acceptancefrom the National Association of Financial Market InstitutionalInvestors by Shenzhen S.F. Taisen Holding (Group) Co., Ltd., aWholly-owned Subsidiary of the Company (2019-053)

March 27, 2019 http://www.cninfo.com.cnAnnouncement on Completion of Offering of Danqing Phase IIInvestment Fund Participated and Invested by Wholly-ownedSubsidiaries (2019-051)

April 11, 2019 http://www.cninfo.com.cn

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Announcement on the Result of Issuance of the 2019 FirstTranche of Super Short-Term Commercial Paper of ShenzhenS.F. Taisen Holding (Group) Co., Ltd., a wholly-ownedsubsidiary of the Company (2019-060)

April 12, 2019 http://www.cninfo.com.cnAnnouncement on Measures of Compensation for Dilution ofReturn for Current Period due to Public Issuance of ConvertibleCorporate Bonds and Undertakings of the Relevant Entities(2019-068)

April 24, 2019 http://www.cninfo.com.cnProposal of Public Issuance of Convertible Corporate Bonds April 24, 2019 http://www.cninfo.com.cnAnnouncement on Acknowledgement of Receipt of Applicationfor Public Issuance of Convertible Corporate Bonds from CSRC(2019-072)

May 22, 2019 http://www.cninfo.com.cnAnnouncement on the Commencement of Asset Securitizationand Related Party Transactions (2019-078)

June 14, 2019 http://www.cninfo.com.cnAnnouncement on the Signing of Strategic CooperationAgreement between a Wholly-owned Subsidiary and ChinaPacific Insurance (Group) Co., Ltd. (2019-079)

June 18, 2019 http://www.cninfo.com.cnAnnouncement on Receiving the “Feedback Notice from CSRCon First Review of Administrative Permission” (2019-081)

June 22, 2019 http://www.cninfo.com.cnReply to Feedback Opinions Regarding the "Feedback Noticefrom CSRC on First Review of Administrative Permission(No.191156)” by the Company and Huatai United Securities Co.,Ltd.”

July 9, 2019 http://www.cninfo.com.cnAnnouncement on Result of Issuance of 2019 Second Tranche ofSuper Short-Term Commercial Paper by Shenzhen S.F. TaisenHolding (Group) Co., Ltd., a Wholly-owned Subsidiary of theCompany (2019-083)

July 13, 2019 http://www.cninfo.com.cnAnnouncement on Adjustment to the Proposal of Public Issuanceof Convertible Corporate Bonds (2019-089)

August 7, 2019 http://www.cninfo.com.cnAnnouncement on Measures of Compensation for Dilution ofReturn for the Current Period due to Public Issuance ofConvertible Corporate Bonds and Undertakings of the RelevantEntities (Amendment) (2019-090)

August 7, 2019 http://www.cninfo.com.cnFeasibility Analysis Report on the Use of Proceeds from PublicIssuance of Convertible Corporate Bonds (Amendment)

August 7, 2019 http://www.cninfo.com.cnProposal of Public Issuance of Convertible Corporate Bonds(Amendment)

August 7, 2019 http://www.cninfo.com.cnAnnouncement on Consideration and Approval of theApplication for Public Issuance of Convertible Corporate Bondsby CSIEC of CSRC(2019-093)

August 26, 2019 http://www.cninfo.com.cnAnnouncement on Result of Issuance of 2019 Third Tranche ofSuper Short-Term Commercial Paper by Shenzhen S.F. TaisenHolding (Group) Co., Ltd., a Wholly-owned Subsidiary of theCompany(2019-094)

August 27, 2019 http://www.cninfo.com.cn

XVII. Significant events of subsidiaries

□Applicable √ Not applicable

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Chapter 6 Share Changes & Shareholder DetailsI. Changes in shares

1. Changes in shares

Unit: number of shares

Before Change Increase or Decrease (+ or -) After ChangeNumber ofshares

Proportion

New shares

issued

BonussharesConversion ofequity reserve

into share

capital

Others Subtotal

Number ofshares

ProportionI. Restricted sales of shares3,295,795,745 74.59% ----512,162,573-512,162,573 2,783,633,17263.06%

2.Shares held by

state-owned legal person

106,655,020 2.41% ----106,655,020-106,655,020 -0.00%

3.Other shares held by

domestic capital

3,188,979,606 72.17% ----405,390,697-405,390,697 2,783,588,90963.05%Of which:

Other shares held bydomestic legal person

3,094,575,619 70.03% ----392,648,480-392,648,480 2,701,927,13961.20%Other shares held bydomestic natural person

94,403,987 2.14% ----12,742,217-12,742,217 81,661,7701.85%

4.Shares held by overseas

capital

161,119 0.00% ----116,856-116,856 44,2630.00%Of which:

Other shares held byoverseas legal person

- 0.00% ----- -0.00%

Other shares held byoverseas natural person

161,119 0.00% ----116,856-116,856 44,2630.00%II. Unrestricted sales ofshares

1,122,971,513 25.41% ---507,980,580507,980,580 1,630,952,09336.94%

1.RMB-denominated

ordinary shares

1,122,971,513 25.41% ---507,980,580507,980,580 1,630,952,09336.94%III. Total number of shares 4,418,767,258 100.00% ----4,181,993-4,181,993 4,414,585,265100.00%

Reasons of share changes

√ Applicable □Not applicable

At the 18

th

meeting of the 4th session of the Board and the 2019 first extraordinary general meeting convenedby the Company on January 3, 2019 and January 23, 2019 respectively, the “Resolution regarding the Repurchaseand Cancellation of Certain Restricted Shares” was considered and approved. Accordingly, the Company wasauthorised to repurchase and cancel a total of 293,308 restricted shares held by 65 incentive participants whoceased to be eligible for the incentive under the 2017 Restricted Stock Incentive Plan due to their resignation;and the Company was authorised to repurchase and cancel a total of 147,278 restricted shares held by 34 incentiveparticipants who ceased to be eligible for the incentive under the 2018 Restricted Stock Incentive Plan due to theirresignation. The total number of restricted shares repurchased for cancellation was 440,586 shares. As of March13, 2019, the Company has completed the repurchase and cancellation of the aforesaid restricted shares, thus thetotal share capital of the Company was reduced from 4,418,767,258 shares to 4,418,326,672 shares.

At the 20

th

meeting of the 4th session of the Board and the 2018 annual general meeting convened by theCompany on March 14, 2019 and April 9, 2019 respectively, the “Resolution regarding the Repurchase andCancellation of Certain Restricted Shares” was considered and approved. Accordingly, the Company wasauthorised to repurchase and cancel a total of 1,113,271 restricted shares held by 703 incentive participants whoceased to be eligible for being released of the sales restriction due to failure of the Company to meet theperformance assessment requirement for the second post lock-up period; and the Company was authorised torepurchase and cancel a total of 2,628,136 restricted shares held by 1,105 incentive participants who ceased to beeligible for the incentive due to failure of the Company to meet the performance assessment requirement for thefirst post lock-up period, and by 37 incentive participants who ceased to be eligible for the incentive under the2018 Restricted Stock Incentive Plan due to their resignation. The total number of restricted shares repurchasedfor cancellation was 3,741,407 shares. As of June 12, 2019, the Company has completed the repurchase andcancellation of the aforesaid restricted shares, thus the total share capital of the Company was reduced from4,418,326,672 shares to 4,414,585,265 shares..

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

In summary, the total number of shares of the Company changed from 4,418,767,258 shares to 4,414,585,265shares.

Approval of share changes

□ Applicable √ Not applicable

Transfer of share ownership

□ Applicable √ Not applicable

Implementation progress of share repurchase

√ Applicable □ Not applicable

On January 31, 2019, the Company convened the 19

thmeeting of the 4th session of the Board at which the“Resolution regarding the Proposal for Share Repurchase by the Company through Aggregate Auction” wasconsidered and approved. Accordingly, the Company proposed to use internal funds to repurchase part of theshares of the Company through aggregate auction for employee stock ownership plans (ESOP) or share incentives.The total amount of funds for repurchase shall be no less than RMB200 million and no more than RMB400million, while the repurchase price shall be no more than RMB45 per share and the repurchase period shall be sixmonths from the date of consideration and approval of the repurchase proposal by the Board.

As of April 8, 2019, the Company has repurchased a total of 11,010,729 shares through aggregate auctionwith the highest transaction price of RMB37.34 per share and the lowest transaction price of RMB34.48 per sharewhile the total transaction price was RMB395 million (exclusive). The share repurchase has been completed andthe shares repurchased are deposited in the special account for repurchased securities of the Company and willsubsequently be used for employee stock ownership plans (ESOP) or share incentives. The Company will makeappropriate arrangement and timely disclosure in due course.

Implementation of share reduction through aggregate auction

□ Applicable √ Not applicable

Effects of share changes on the basic EPS, diluted EPS, net assets per share attributable to ordinary shareholdersof the Company, and other financial indicators for the last year and the last reporting period

√ Applicable □ Not applicable

During the reporting period, the share capital of the Company decreased by 4,181,993 shares, and the basic EPS,diluted EPS and net assets per share attributable to ordinary shareholders of the Company increased.

Other contents that the Company considers necessary, or are required by the securities regulatory authorities, todisclose

□ Applicable √ Not applicable

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

2. Changes in restricted shares

√ Applicable □Not applicable

Unit: number of sharesName of shareholder

Restricted

sharesat thebeginningof the period

Number ofrestricted

sharesremoved inthe period

Number ofrestricted

sharesincreased in

the period

Restrictedshares at the

end of the

period

Restricted sales

reasons

Date ofrestrictedsales removalShenzhen Mingde HoldingDevelopment Co., Ltd.

2,701,927,139 --2,701,927,139

Commitment for issuingrestricted shares forpurchasing assets duringmajor asset restructuring

January 23,2020Ningbo Shunda FengrunInvestment ManagementPartnership (LimitedPartnership)

156,901,383 156,901,383--

Commitment for issuingrestricted shares forpurchasing assets duringmajor asset restructuring

March 25,2019Shenzhen ZhaoguangInvestment Co., Ltd.

106,655,020 106,655,020--

Commitment for issuingrestricted shares forpurchasing assets duringmajor asset restructuring

March 25,2019Suzhou Industrial Park OrizaShunfeng Equity InvestmentCompany (LimitedPartnership)

106,655,020 106,655,020--

Commitment for issuingrestricted shares forpurchasing assets duringmajor asset restructuring

March 25,2019Jiaqiang Shunfeng (Shenzhen)Equity Investment Partnership(Limited Partnership)

106,655,020 106,655,020--

Commitment for issuingrestricted shares forpurchasing assets duringmajor asset restructuring

March 25,2019

Liu Jilu 75,123,253 7,563,907-67,559,346

restricted shares for seniormanagers

7,563,907lock-upshares ofseniormanagementwereunlocked atthe beginningof 2019.Suzhou Guyu QiuchuangEquity Investment Partnership(Limited Partnership)

21,331,005 21,331,005--

Commitment for issuingrestricted shares forpurchasing assets duringmajor asset restructuring

March 25,2019Liu Lingyun 4,456,942 --4,456,942restricted shares for IPO --Gong Weiping 2,040,640 --2,040,640restricted shares for IPO --Huang Xuechun 1,735,024 --1,735,024restricted shares for IPO --Others 12,315,299 6,401,218-5,914,081-- --Total 3,295,795,745 512,162,573-2,783,633,172-- --

3. Issuance and Listing of Securities

□Applicable √ Not applicable

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

II. Total number of shareholders and their holdings

Unit: number of sharesTotal number of shareholders atthe end of reporting period

60,187Total number of preferredshareholders with voting rightsrestored (if any)

-Shareholders holding more than 5% of shares or shares of the top 10 shareholdersName ofshareholder

Type ofshareholder

Shareholdingpercentage

Number ofshares held atthe end of thereportingperiod

Increase ordecrease of

sharesduringreportingperiod

Number ofrestrictedshares held

Number ofnon-restricte

d

shares held

Pledged or frozen

sharesStatus of

shares

AmountShenzhen MingdeHoldingDevelopment Co.,Ltd.

Domesticnon-state-owned legalperson

61.20% 2,701,927,139-2,701,927,139-Pledged990,000,000Ningbo ShundaFengrun InvestmentManagementPartnership (LimitedPartnership)

Domesticnon-state-owned legalperson

7.60% 335,536,715-37,102,718-335,536,715

Pledged 326,049,874ShenzhenZhaoguangInvestment Co., Ltd.

State-ownedlegal person

6.04% 266,637,546--266,637,546- -Suzhou IndustrialPark OrizaShunfeng EquityInvestmentCompany (LimitedPartnership)

Domesticnon-state-owned legalperson

5.63% 248,358,260-1,215,700-248,358,260 - -Jiaqiang Shunfeng(Shenzhen) EquityInvestmentPartnership (LimitedPartnership)

Domesticnon-state-owned legalperson

4.31% 190,051,123-52,758,666-190,051,123

- -Liu Jilu

Domesticnaturalperson

2.04% 90,079,128-67,559,34622,519,782 - -Suzhou GuyuQiuchuang EquityInvestmentPartnership (LimitedPartnership)

Domesticnon-state-owned legalperson

1.21% 53,327,509--53,327,509- -Zhongyuan AssetManagement Co.,Ltd.

State-ownedlegal person

1.17% 51,472,193-16,129,000-51,472,193Pledged 45,967,462Hong KongSecurities ClearingCompany Ltd.

Overseaslegal person

0.66% 29,339,08213,735,283-29,339,082 - -Chang'anInternational TrustCo., Ltd. –Chang'anTrust –MingshengTargeted AdditionalShares Issuance No.1 -Capital Trust

Other

0.52% 22,790,565--22,790,565- -Additional Shares Strategicinvestor or general legal personbecomes the top 10 shareholderdue to the placement of newshares

N/A

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Explain any associatedrelationship and/or persons actingin concert between theabove-mentioned shareholders

The Company is not aware of whether there is an associated relationship between the abovementioned shareholders and whether they are acting in concert.

Top 10 shareholders holding unrestricted sharesName of shareholder

Number of unrestricted shares held atthe end of the reporting period

Type of sharesType of shares QuantityNingbo Shunda Fengrun Investment ManagementPartnership (Limited Partnership)

335,536,715

RMB-denominatedordinary shares

335,536,715Shenzhen Zhaoguang Investment Co., Ltd. 266,637,546

RMB-denominatedordinary shares

266,637,546Suzhou Industrial Park Oriza Shunfeng EquityInvestment Company (Limited Partnership)

248,358,260

RMB-denominatedordinary shares

248,358,260Jiaqiang Shunfeng (Shenzhen) Equity InvestmentPartnership (Limited Partnership)

190,051,123

RMB-denominatedordinary shares

190,051,123Suzhou Guyu Qiuchuang Equity InvestmentPartnership (Limited Partnership)

53,327,509

RMB-denominatedordinary shares

53,327,509Zhongyuan Asset Management Co., Ltd. 51,472,193

RMB-denominatedordinary shares

51,472,193Hong Kong Securities Clearing Company Ltd. 29,339,082

RMB-denominatedordinary shares

29,339,082Chang'an International Trust Co., Ltd. - Chang'anTrust - Mingsheng Targeted Additional SharesIssuance No. 1 - Capital Trust

22,790,565

RMB-denominatedordinary shares22,790,565Liu Jilu 22,519,782

RMB-denominatedordinary shares

22,519,782National Social Security Fund Combination 503 22,400,031

RMB-denominatedordinary shares

22,400,031Explain any associated relationship and/or personsacting in concert between the top ten shareholders

The Company is not aware of whether there is an associated relationshipbetween the above-mentioned shareholders and whether they are acting inconcert.Explain the top 10 common shareholders’participation in margin financing (if any)

N/A

Did any of the top 10 common shareholder or the top 10 non-restricted common shareholders of the Companyconduct any promissory repurchase during the reporting period?

□Yes √ No

No such cases in the reporting period.

III. Change of controlling shareholder or actual controllerChange of controlling shareholder in the reporting period

□Applicable √ Not applicable

Controlling shareholder did not change during the reporting period.

Change of actual controller during the reporting period

□Applicable √ Not applicable

The actual controller did not change during the reporting period.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Chapter 7 Preferred Shares

□Applicable √ Not applicable

No such cases in the reporting period.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Chapter 8 Directors, Supervisors and Senior Managers

I. Changes in shares held by directors, supervisors and senior executives

□Applicable √ Not applicable

Shares held by directors, supervisors and senior executives did not change during the reporting period. For details,please refer to the 2018 Annual Report.

II. Changes of Directors, Supervisors, and Senior Executives

√Applicable □Not applicable

Name Title Tenure statusDate ReasonZhang Rui Director Resigned March 6, 2019

Resigned as a director due to personaljob deployment.Lo Sai Lai

Director,

SeniorExecutives

Resigned March 14, 2019

Resigned as a senior managementmember due to personal reasons butremained as a director.Leong Chong

SeniorExecutives

Resigned March 14, 2019

Resigned as a senior managementmember due to personal reasons.Deng Weidong Director Elected April 9, 2019

Elected as a director of the Company tofill a vacancy at the 2018 AnnualGeneral Meeting.

S.F. Holding Co., Ltd. 2019 Semi-Annual Report

Chapter 9 Corporate BondsWere there bonds publicly issued and listed on an exchange, and not at maturity, or at maturity but are not fullypaid on the approval report date of the semi-annual report?No

Chapter 10 Financial Statements

[English Translation for Reference Only]
Review Report

PwC ZT Yue Zi (2019) No. 0028

To the shareholders of S.F. Holding Co., Ltd.,
We have reviewedthe accompanying interim financial statements of S.F. Holding Co., Ltd.

(hereinafter “S.F. Holding”), which comprise the consolidated and company balance sheets asat 30 June 2019, the consolidated and company income statements, the consolidated andcompany cash flow statements and the consolidated and company statements of changes inequity for the 6-month period then ended, and the notes to the interim financial statements.Management of S.F. Holding is responsible for the preparation of these interim financialstatements in accordance with the requirements of Accounting Standards for BusinessEnterprises. Our responsibility is to issue a review report on these interim financial statementsbased on our review.

We conducted our review in accordance with China Standards on Review Engagement No.2101, “Review of Financial Statements”. These standards require that we plan and perform thereview to obtain limited assurance as to whether the interim financial statements are free ofmaterial misstatement. A review is limited primarily to inquiries of company personnel andanalytical procedures applied to financial data and thus provides less assurance than an audit.We have not performed an audit and, accordingly, we do not express an audit opinion.

Based on

Based onour review, nothing has come to our attention that causes us to believe that the

interim financial statements are not prepared in accordance with Accounting Standards forBusiness Enterprises or do not present fairly, in all material respects, the consolidated andcompany’s financial position of S.F. Holding as at 30 June 2019, and their financialperformance and cash flows for the period then ended.

PricewaterhouseCoopers Zhong Tian LLP

Shanghai, the People’s Republic of China26 August 2019

SigningCPA

Signing CPA

————————

Chen Anqiang

————————Liu Jingping

CONSOLIDATED BALANCE SHEETAS AT 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

ASSETSNote30 June 201931 December 2018

Consolidated

Consolidated(Restated)

Current assets

Cash at bank and on hand 4(1) 12,487,217,955.15

16,131,119,850.56Financial assets at fair valuethrough profit or loss 4(2)

-

14,441,978.09Financial assets held for trading 4(3)

2,525,764,638.79

-Notes receivable

32,582,844.39

20,958,746.36Accounts receivable 4(4) 8,438,161,191.55

7,352,877,748.87

Advances tosuppliers4(6)2,445,768,390.662,516,851,201.35

Factoring receivables 4(7) 86,935,238.30

447,173,258.65Loans and advances 4(8) 87,235,941.03

95,070,625.30Other receivables 4(5) 1,715,646,624.92

1,397,913,483.52Inventories 4(9) 735,112,901.55

818,050,025.02Current portion of non-current

assets 4(12)

120,929,410.49

123,197,466.26Other current assets 4(10) 4,940,497,682.72

3,003,959,574.30Total current assets33,615,852,819.55

31,921,613,958.28

Non-currentassets

Available-for-sale financial assets 4(11) -

3,423,527,060.27Long-term receivables 4(12) 474,769,169.71

571,493,790.74Long-term equity investments 4(13) 2,250,846,960.26

2,203,431,122.03Investments in other equity

instruments 4(14) 4,042,698,444.01

-Other non-current financial assets 4(15) 405,065,380.55

-Investment properties 4(16) 2,478,519,190.07

2,453,931,501.54Fixed assets 4(17) 15,090,191,297.79

13,966,702,267.45Construction in progress 4(18) 6,216,142,800.45

6,507,907,313.07Intangible assets 4(19) 9,269,904,840.92

6,662,097,473.89Capitalised developmentexpenditures 4(20) 613,265,656.66

585,212,743.77

Goodwill4(21)3,528,248,763.10590,365,319.20

Long-term prepaid expenses 4(22) 1,782,624,607.32

1,645,861,187.53Deferred tax assets 4(38) 721,940,063.72

584,462,905.44Other non-current assets 4(23) 547,209,537.19

497,962,173.43Total non-current assets47,421,426,711.75

39,692,954,858.36

TOTAL ASSETS

81,037,279,531.30

71,614,568,816.64

CONSOLIDATED BALANCE SHEET (CONT’D)AS AT 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

LIABILITIES AND EQUITYNote30 June 201931December 2018

Consolidated

Consolidated

(Restated)

Current liabilities

Short-term borrowings 4(25)

10,329,017,919.04

8,585,129,399.63

Deposits from customers

-

10,269,542.51

Accounts payable 4(26)

8,499,813,706.49

7,887,342,829.83

Advances from customers 4(27)

664,518,993.55

467,611,291.44

Employee benefits payable 4(28)

2,527,371,082.02

2,967,467,562.41

Taxes payable 4(29)

780,059,087.93

639,295,980.99

Other payables4(30)3,964,347,310.744,539,637,152.31

Current portion of non-current

liabilities 4(31)

577,267,751.27

273,222,821.65

Other current liabilities 4(32)

1,020,688,321.41

999,378,905.37

Total current liabilities

28,363,084,172.45

26,369,355,486.14

Non-currentliabilities

Long-term borrowings 4(33)

5,922,181,122.48

998,287,835.19

Debentures payable 4(34)

6,408,078,107.07

6,405,035,926.40

Long-term payables 4(35)

106,001,190.04

83,655,025.08

Long-term employee benefits

payable 4(36)

158,643,952.32

142,715,259.71

Deferred income 4(37)

183,382,546.98

152,944,183.19

Deferred tax liabilities 4(38)

1,172,170,806.43

537,090,946.18

Provisions

32,649,557.50

11,540,645.33

Total non-current liabilities

13,983,107,282.82

8,331,269,821.08

Total liabilities42,346,191,455.2734,700,625,307.22
Equity
Share capital4(39)4,414,585,265.004,418,767,258.00

Capital reserve 4(40)

15,985,575,538.97

16,069,619,165.67

Less: Treasury stock 4(41)

(454,260,935.24)

(200,928,467.28)

Other comprehensive income 4(62)

590,851,724.36

527,184,297.85

General risk reserve

185,084,995.61

185,084,995.61

Surplus reserve 4(43)

601,132,890.32

601,132,890.32

Retained earnings 4(44)

17,082,194,039.69

14,960,151,735.98

Total equity attributable to

shareholders of the Company

38,405,163,518.71

36,561,011,876.15

Minority interests

4(61)

285,924,557.32

352,931,633.27

Total equity

38,691,088,076.03

36,913,943,509.42

TOTAL LIABILITIES AND EQUITY

81,037,279,531.30

71,614,568,816.64

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

Legal representative: Principal in charge of accounting: Head of accounting department:

COMPANY BALANCE SHEETAS AT 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

ASSETSNote30 June 201931 December 2018

Company

Company

Current assets

Cash at bank and on hand 16(1) 357,988,702.35

1,136,288,489.11

Advances to suppliers 426,069.14

993,616.34

Other receivables 16(2) 1,119,119,042.98

9,542,466,126.10

Other current assets 161,001.34

255,389.87

Total current assets

1,477,694,815.81

10,680,003,621.42

Non-current assets

Long-term receivables 16(3) 7,776,179,035.82

-Long-term equity investments 16(4) 43,348,872,192.32

43,337,179,817.15

Intangible assets 1,453,335.00

1,608,738.18

Capitalised development

expenditures 246,842.25

94,339.62

Long-term prepaid expenses 89,737.68

110,446.38

Total non-current assets

51,126,841,143.07

43,338,993,341.33

TOTAL ASSETS 52,604,535,958.88

54,018,996,962.75

COMPANY BALANCE SHEET (CONT’D)AS AT 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

LIABILITIES AND EQUITYNote30 June 201931 December 2018

Company

Company (Restated)

Current liabilities

Employee benefits payable 697,713.47

603,945.97

Taxes payable 2,998,673.05

8,856,532.95

Other payables 61,796,194.55

204,690,875.26

Total current liabilities

65,492,581.07

214,151,354.18

Total liabilities

65,492,581.07

214,151,354.18

Equity

Share capital 4,414,585,265.00

4,418,767,258.00

Capital reserve 46,667,948,714.32

46,760,852,084.19

Less: Treasury stock (454,260,935.24)

(200,928,467.28)

Surplus reserve 448,087,890.01

448,087,890.01

Retained earnings 1,462,682,443.72

2,378,066,843.65

Total equity

52,539,043,377.81

53,804,845,608.57

TOTAL LIABILITIES AND EQUITY 52,604,535,958.88

54,018,996,962.75

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

Legal representative:Principal in charge ofaccounting:Head of accounting department:

CONSOLIDATED AND COMPANY INCOME STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

For thesix months ended 30 June
ItemNote2019201820192018

Consolidated

Consolidated

Consolidated

(Restated)

Company

Company

1.Revenue

4(45)

50,074,704,033.85

42,550,906,755.42

-

-Less: Cost of revenue 4(45) (40,152,044,224.73)

(34,483,562,144.39)

-

-Taxes and surcharges 4(46) (121,004,877.04)

(110,495,850.13)

(30,951.27)

-Selling and distribution

expenses 4(47) (884,549,456.76)

(973,618,226.32)

-

-General and administrative

expenses 4(48) (4,843,661,455.94)

(3,844,763,325.32)

(4,484,483.37)

(1,796,327.32)

Research and

development expenses 4(49) (509,094,373.89)

(403,524,405.16)

-

-

Financial (costs)/income4(50(331,609,607.60)(54,420,723.81)10,098,014.1412,552,613.87
Including: Interest expenses

(432,953,909.77)

(290,875,624.94)

(1,373,547.25)

-Interest income 140,657,962.96

258,040,873.83

11,482,407.08

12,914,381.13Add:

Other income 4(52) 164,346,392.59

74,730,377.55

-

-Investment income 4(53), 16(5)

386,073,900.85

248,525,092.65

1,929,291.51

99,865,691.77

Including: Investment

losses/income fromassociatesand jointventures (50,985,409.53)

8,841,240.97

-

-Gains/(losses) arising from

changes in fair value 4(54) 330,207,611.55

(4,812,095.66)

-

-Credit impairment losses 4(55) (148,865,353.45)

-

-

-

Asset impairment losses4(56)(54,112,179.14)(26,394,809.33)--
Losses on disposal of

assets 4(57) (12,876,151.73)

(6,982,780.03)

-

-

2.Operating profit3,897,514,258.562,965,587,865.477,511,871.01110,621,978.32

Add:

Non-operating income 4(58)(a) 70,153,540.77

59,319,828.95

4,716,981.13

-Less: Non-operating expenses 4(58)(b) (41,761,260.71)

(50,577,721.43)

-

-

3.Total profit

3,925,906,538.62

2,974,329,972.99

12,228,852.14

110,621,978.32Less: Income tax expenses 4(59) (882,642,296.52)

(790,949,730.08)

(2,878,075.90)

(27,745,494.59)

4.Netprofit

3,043,264,242.10

2,183,380,242.91

9,350,776.24

82,876,483.73

Including: Net loss of the

acquiree in abusinesscombinationinvolving entitiesunder commoncontrol before thecombination date -

(37,645,258.17)

Not applicable

Not applicable

Classified by continuity of

operations:

Net profit from continuing

operations 3,043,264,242.10

2,183,380,242.91

9,350,776.24

82,876,483.73Net profit from discontinued

operations -

-

-

-

Classified by ownership of the

equity:

Attributable to shareholders of

the Company 3,101,111,638.63

2,209,579,126.20

Not applicable

Not applicableMinority interests (57,847,396.53)

(26,198,883.29)

Not applicable

Not applicable

CONSOLIDATED AND COMPANY INCOME STATEMENTS (CONT’D)FOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

For the six months ended 30 June
ItemNote2019201820192018

Consolidated

Consolidated

(Restated)

Company

Company

5.Othercomprehensiveincome, net of

tax

(8,045,780.57)

(78,884,021.39)

-

-Attributable to shareholders of theCompany, net of tax

(8,131,829.98)

(77,279,810.72)

-

-Other comprehensive income itemswhich will not be reclassifiedsubsequently to profit or loss

(21,354,283.70)

-

-

-Losses on changes in fair value ofother equity instruments

(21,354,283.70)

-

-

-Other comprehensive income itemswhich will be reclassified subsequentlyto profit or loss 4(62)

13,222,453.72

(77,279,810.72)

-

-

Share of the other comprehensive

income of the investee accountedfor using equity method which willbe reclassified subsequently toprofit and loss 4(62)

(1,956,923.83)

147,032.76

-

-Losses arising from changes in fairvalue of available-for-sale financialassets 4(62)

-

(106,747,986.27)

-

-Exchange differences on translation offoreign currency financialstatements 4(62)

15,179,377.55

29,321,142.79

-

-

tax 4(62)

Attributable to minority interests, net of

86,049.41

(1,604,210.67)

-

-

6.Totalcomprehensiveincome3,035,218,461.532,104,496,221.529,350,776.2482,876,483.73

Attributable to shareholders of theCompany

3,092,979,808.65

2,132,299,315.48

Not applicable

Not applicableAttributable to minority interests

(57,761,347.12)

(27,803,093.96)

Not applicable

Not applicable

7.Earningsper share

Basic earnings per share (RMB Yuan) 4(60)

0.70 0.50

Not applicable

Not applicableDiluted earnings per share (RMB Yuan) 4(60)

0.70 0.50

Not applicable

Not applicable

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

Legal representative: Principal in charge of accounting: Head of accounting department:

CONSOLIDATED AND COMPANY CASH FLOW STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

For the six months ended 30 June
ItemNote2019201820192018

Consolidated

Consolidated(Restated)

Company

Company

1.Cash flows from operating activities

Cash received from sales of goods or rendering ofservices 53,506,206,887.19

45,461,983,062.52

-

-Net decrease in loans to customers 316,421,622.83

31,429,602.95

-

-Net decrease in balances with central bank 281,029,856.02

141,588,022.43

-

-Refund of taxes and levies 23,210,402.25

9,679,303.24

-

-Cash received relating to other operating activities 4(63)(a) 25,624,198,431.13

26,284,180,448.08

18,173,510.83

14,266,553.36

Sub-total of operating cash inflows

79,751,067,199.42

71,928,860,439.22

18,173,510.83

14,266,553.36

Cash paid for purchases of goods and services (32,221,148,364.10)

(26,969,529,010.05)

-

-Net increase in balances with central bank (10,220,118.69)

-

-

- Cash paid to and on behalf of employees (11,037,158,454.34)

(10,281,379,847.75)

(760,000.00)

(1,480,000.00)

Payments of taxes and levies (1,562,682,866.61)

(1,760,048,885.14)

(8,754,992.46)

(26,068,955.22)

Cash paid relating to other operating activities 4(63)(b) (30,102,970,846.00)

(30,548,293,905.48)

(4,927,726.60)

(1,663,972.03)

Sub-total of operating cash outflows

(74,934,180,649.74)

(69,559,251,648.42)

(14,442,719.06)

(29,212,927.25)

Net cash flows from/(used in) operating activities

4(64)(a) 4,816,886,549.68

2,369,608,790.80

3,730,791.77

(14,946,373.89)

2.Cash flows used in investing activities

Cash received from disposal of investments 144,554,498.39

1,662,632,803.71

-

-Cash received from returns on investments 93,138,373.02

156,286,676.14

1,002,167,424.66

1,029,898,124.94

Net cash received from acquisition of subsidiaries -

4,663,360.76

-

-Cash received from disposal of fixed assets andother long-term assets 15,953,688.71

10,371,749.53

-

-Net cash received from disposal of subsidiaries andother business units 201,048,485.80

-

-

-Cash received relating to other investing activities 4(63)(c) 19,610,047,058.44

19,045,176,118.39

1,005,498,875.49

6,600,000,000.00

Sub-total of investing cash inflows

20,064,742,104.36

20,879,130,708.53

2,007,666,300.15

7,629,898,124.94

Cash paid to acquire fixed assets and other long-

term assets (3,294,575,636.60)

(4,454,376,990.19)

(2,053,459.01)

- Cash paid to acquire investments (781,352,136.83)

(1,121,409,294.88)

-

- Net cash paid to acquire subsidiaries 4(64)(c) (5,167,526,650.16)

(20,858,612.00)

-

- Cash paid relating to other investing activities 4(63)(d) (23,975,039,249.75)

(20,282,100,000.00)

(1,357,929,526.75)

(7,000,452,272.25)

Sub-total of investing cash outflows

(33,218,493,673.34)

(25,878,744,897.07)

(1,359,982,985.76)

(7,000,452,272.25)

Net cash flows (used in)/from investing activities

(13,153,751,568.98)

(4,999,614,188.54)

647,683,314.39

629,445,852.69

CONSOLIDATED AND COMPANY CASH FLOW STATEMENTS (CONT’D)FOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

For the six months ended 30 June
ItemNote2019201820192018

Consolidated

Consolidated(Restated) Company Company

3.Cash flows from financing activities

Cash received from capital contributions 30,299,062.00 131,524,203.19 - 127,294,205.35

Including: Cash received from capital

contributions by minorityinterests of subsidiaries 30,299,062.00

4,229,997.84 - -Cash received from borrowings 14,472,889,511.02 5,645,533,875.71 - -Cash received relating to other financing

activities 4(63)(e) - 1,090,821,983.52 - -

Sub

Sub-total of financing cash inflows

14,503,188,573.02 6,867,880,062.42 - 127,294,205.35

Cash repayments of borrowings (7,734,415,458.62)

(4,594,115,714.47)

- -Cash payments for interest expenses anddistribution of dividends or profits (1,288,529,595.04)

(1,272,643,709.50)

(926,755,859.89)

(970,985,880.70)

Cash payments relating to other financingactivities 4(63)(f) (511,724,131.08)

(2,217,200,621.62)

(502,850,246.57)

(376,192.07)

Sub-total of financing cash outflows

(9,534,669,184.74)

(8,083,960,045.59)

(1,429,606,106.46)

(971,362,072.77)

activities 4,968,519,388.28 (1,216,079,983.17)

Net cash flows from/(used in) financing

(1,429,606,106.46)

(844,067,867.42)

4.Effect of foreign exchange rate changes

on cash and cash equivalents (2,915,022.58)

13,365,658.73 (126.46)

(206.91)

5.

5.Net decrease in cash and cash equivalents

4(64)(a) (3,371,260,653.60)

(3,832,719,722.18)

(778,192,126.76)

(229,568,595.53)

Add: Cash and cash equivalents at the

beginning of the period 15,299,270,711.01 16,149,528,832.49 1,136,148,582.11 1,046,986,313.39

6.

6.Cash and cash equivalents at the end of

the period4(64)(a) 11,928,010,057.41 12,316,809,110.31 357,956,455.35 817,417,717.86

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

Legal representative: Principal in charge of accounting: Head of accounting department:

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

Equity attributable to shareholders of the parent company
NoteShare capitalCapital reserve

Less: Treasury

stock

comprehensive

Otherincome

income

General risk

reserve

Special

reserveSurplus reserveRetained earningsMinority interestsTotal equity
Balance at 31 December 20174,411,015,524.0016,086,543,402.55-219,830,232.8395,759,396.32-586,501,527.4111,478,728,731.9851,805,434.4032,930,184,249.49
Movements for the six months

ended 30 June 2018

Total comprehensive income

Net profit -

-

-

-

-

-

-

2,209,579,126.20

(26,198,883.29)

2,183,380,242.91Other comprehensive income -

-

-

(77,279,810.72)

-

-

-

-

(1,604,210.67)

(78,884,021.39)

Total comprehensive income for

the year -

-

-

(77,279,810.72)

-

-

-

2,209,579,126.20

(27,803,093.96)

2,104,496,221.52Capital contribution and withdrawal

by shareholders

Share-based payment in capitalcontribution by shareholders 4(40) 7,788,643.00

194,466,894.22

(202,255,537.22)

-

-

-

- -

-

-Share-based payment included in

equity 9(1) -

23,930,346.08

-

-

-

-

-

-

-

23,930,346.08

Capital contribution by

shareholders -

-

-

-

-

-

-

-

54,094,150.38

54,094,150.38

Others4(40)-(9,300,026.82)------9,721,353.92421,327.10

Business combinations involving

entities under common control -

(43,617,193.55)

-

-

-

-

-

-

-

(43,617,193.55)

Profit distribution

Distribution to shareholders 4(44) -

-

-

-

-

-

-

(970,985,880.70)

-

(970,985,880.70)

Other movements in capital reserve

4(40) -

(269,027.26)

-

-

-

-

-

-

-

(269,027.26)

Safety reserve

Appropriation4(42)-----2,727,907.70---2,727,907.70

Utilisation 4(42) -

-

-

-

-

(2,727,907.70)

-

-

-

(2,727,907.70)

Balance at 30 June 2018

4,418,804,167.00

16,251,754,395.22

(202,255,537.22)

142,550,422.11

95,759,396.32

-

586,501,527.41

12,717,321,977.48

87,817,844.74

34,098,254,193.06

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONT’D)FOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

Equity attributable to shareholders of the parent company
NoteShare capitalCapital reserve

Less: Treasury

stock

comprehensive

Otherincome

income

General risk

reserve

Special

reserveSurplusreserveRetained earnings

Minority

interestsTotal equity
Balance at 31 December 20184,418,767,258.0016,069,619,165.67(200,928,467.28)527,184,297.85185,084,995.61-601,132,890.3214,960,151,735.98352,931,633.2736,913,943,509.42

Changes in accounting policies - - - 17,465,097.74

- - - - - 17,465,097.74

Balance at 1 January 20194,418,767,258.0016,069,619,165.67(200,928,467.28)544,649,395.59185,084,995.61-601,132,890.3214,960,151,735.98352,931,633.2736,931,408,607.16

ended 30 June 2019

Movements for the six months

Total comprehensive income

Net profit -

-

-

-

-

-

-

3,101,111,638.63

(57,847,396.53)

3,043,264,242.10

Other comprehensive income -

-

-

(8,131,829.98)

-

-

-

-

86,049.41

(8,045,780.57)

Total comprehensive income for

the year -

-

-

(8,131,829.98)

-

-

-

3,101,111,638.63

(57,761,347.12)

3,035,218,461.53

Capital contribution and withdrawalby shareholders

Capital contribution by

shareholders -

16,277,032.73

-

-

-

-

- -

14,022,029.27

30,299,062.00

Share repurchases4(41)--(394,996,314.03)------(394,996,314.03)

Changes in Share-based

paymentestricted shares4(41)(4,181,993.00)(104,584,725.90)141,160,053.20------32,393,334.30

Share-based payment included in

equity 9(1) -

14,581,133.08

-

-

-

-

-

-

1,016,579.73

15,597,712.81

Others 4(40) -

(11,159,460.36)

-

-

-

-

-

- (24,284,337.83)

(35,443,798.19)

Transfer within equity

Transfer from othercomprehensive income toretained earnings -

-

-

54,334,158.75

-

-

-

(54,334,158.75)

-

-

Profit distribution

Distribution to shareholders

4(41)4(44) -

-

503,792.87

-

-

-

-

(924,735,176.17)

-

(924,231,383.30)

Other movements in capital reserve

4(40) -

842,393.75

-

-

-

-

-

-

-

842,393.75

Safety reserve

Appropriation 4(42) -

-

-

-

-

3,776,493.37

-

-

-

3,776,493.37

Utilisation4(42)-----(3,776,493.37)---(3,776,493.37)
Balance at 30 June 20194,414,585,265.0015,985,575,538.97(454,260,935.24)590,851,724.36185,084,995.61-601,132,890.3217,082,194,039.69285,924,557.3238,691,088,076.03

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

Legal representative: Principal in charge of accounting: Head of accounting department:

COMPANY STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

Note Share capital

Capital reserve

stock

Less: Treasury

Surplus reserve

earnings

Retained

Total equity

Balance at 1 January 2018

4,411,015,524.00

46,530,971,136.14

-

433,456,527.10

3,217,052,890.78

54,592,496,078.02

ended 30 June 2018

Movements for the six months

Total comprehensive income

Net profit -

--

-

82,876,483.73

82,876,483.73

Capital contribution and withdrawal

by shareholders

Share-based payment in capital

contribution

contributionby shareholders7,788,643.00194,466,894.22(202,255,537.22)---

Share-based payment included

in equity-22,900,543.05---22,900,543.05

Others -

(77,651.25)

---

(77,651.25)

Profit distribution

Distribution to shareholders -

--

-

(970,985,880.70)

(970,985,880.70)

Balance at 30 June 2018

4,418,804,167.00

46,748,260,922.16

(202,255,537.22)

433,456,527.10

2,328,943,493.81

53,727,209,572.85

Balance at 1 January 2019

Balance at 1 January 2019

4,418,767,258.00

46,760,852,084.19

(200,928,467.28)

448,087,890.01

2,378,066,843.65

53,804,845,608.57

Movements for the six months
ended 30 June 2019

Total comprehensive income

Net profit -

-

- -

9,350,776.24

9,350,776.24

Capital contribution and withdrawal

by shareholders

Share repurchases4(41)--(394,996,314.03)--(394,996,314.03)

Changes in Share-based

payment restricted shares4(41)(4,181,993.00)(104,584,725.90)141,160,053.20--32,393,334.30

Share-based payment included

in equity -

11,681,356.03

- - -

11,681,356.03

Profit distribution

Distribution to shareholders

4(41)4(44) -

-

503,792.87 -

(924,735,176.17)

(924,231,383.30)

Balance at 30 June 2019

4,414,585,265.00

46,667,948,714.32

(454,260,935.24)

448,087,890.01

1,462,682,443.72

52,539,043,377.81

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

Legal representative: Principal in charge of accounting: Head of accounting department:

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

1 General information and historical development

S.F. Holding Co., Ltd. (formerly “Ma’anshan Dingtai Rare Earth and New Materials Co., Ltd.”,hereinafter “S.F. Holding” or “the Company”), formerly known as Ma’anshan Dingtai Science &Technology Co., Ltd., was established by 11 natural persons including Liu Jilu and the Labour Unionof Ma'anshan Dingtai Metallic Products Co., Ltd. by cash contribution on 13 May 2003. Initiated bythe original shareholders of the Company, the Company was formally changed as Maanshan DingtaiRare Earth and New Materials Co., Ltd. with a registered capital of RMB 50 million as approved bythe shareholders’ meeting on 18 October 2007 and the inaugural meeting on 22 October 2007.

On 11 January 2010, the Company successfully issued 19,500,000 ordinary shares at par value ofRMB 1.00 per share at Shenzhen Stock Exchange under the Regulatory Permission [2010] No. 41as approved by China Securities Regulatory Commission. The outstanding shares were listed fortrading at Shenzhen Stock Exchange on 5 February 2010. After the shares were issued, the totalshare capital of the Company was changed to 77,830,780 shares.

Pursuant to the Proposal on the Profit Distribution Plan for 2014 approved by 2014 annualshareholders’ meeting held by the Company on 19 May 2015, the Company converted capitalreserve into new shares on the basis of 5 shares for every 10 existing shares, with 77,830,780 sharesin total at the end of 2014 as base. After the conversion, the total share capital of the Company wasincreased by 38,915,390 shares to 116,746,170 shares.

Pursuant to the Proposal on the Profit Distribution Plan for 2015 approved by the 2015 annualshareholders’ meeting held by the Company on 17 May 2016, the Company, with 116,746,170 sharesin total at the end of 2015 as base, converted capital reserve into new shares on the basis of 10shares for every 10 existing shares. After the conversion, the total share capital of the Company wasincreased by 116,746,170 shares to 233,492,340 shares.

Pursuant to the resolution of the 13th session of the third Board of Directors of the Company dated22 May 2016 and relevant resolutions approved on the first interim shareholders’ meeting in 2016held by the Company on 30 June 2016, including the Resolution concerning the Company Qualifyingfor Criteria for Major Assets Restructuring of Listed Companies, the Resolution on Related-partyTransaction Composed of Major Assets Swap and Issuing Shares to Purchase Assets and RaiseMatching Fund and the Resolution on ‘Major Assets Swap and Issuing Shares to Purchase Assetsand Raise Matching Fund and Related-party Transaction Report (Draft) of Maanshan Dingtai RareEarth and New Materials Co., Ltd.’ and Summaries, the Company conducted a series of major assetsrestructuring as follows:

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

1 General information and historical development (Cont’d)

(1) Major assets swap

In December 2016, the Company swapped all the assets and liabilities (“exchange-out assets”) itheld as at 31 December 2015 (“assessment base date”) for the equivalent portion (“exchange-inassets”) of 68.40%, 9.93%, 6.75%, 6.75%, 6.75%, 1.35% and 0.07% of the equities in Shenzhen S.F.Taisen Holdings (Group) Co., Ltd. (formerly “S.F. Holding (Group) Co., Ltd.”, hereinafter “TaisenHoldings”) respectively held by Shenzhen Mingde Holdings Development Co., Ltd. (hereinafter“Mingde Holdings”), Ningbo Shunda Fengrun Investment Management Partnership (LimitedPartnership) (hereinafter “Shunda Fengrun”), Jiaqiang Shunfeng (Shenzhen) Equity InvestmentPartnership (Limited Partnership) (hereinafter “Jiaqiang Shunfeng”), Shenzhen ZhaoguangInvestment Co., Ltd. (hereinafter “Zhaoguang Investment”), Suzhou Industrial Park Oriza ShunfengEquity Investment Company (Limited Partnership) (hereinafter “Oriza Shunfeng”), Suzhou GuyuQiuchuang Equity Investment Partnership (Limited Partnership) (hereinafter “Guyu Qiuchuang”) andNingbo Shunxin Fenghe Investment Management Partnership (Limited Partnership) (hereinafter“Shunxin Fenghe”). For this transaction, the exchange-out assets were priced at RMB 796 millionand the exchange-in assets were priced at RMB 43.30 billion. Pursuant to the second interimshareholders’ meeting in 2016 dated 28 December 2016 (hereinafter “restructuring date”), theCompany approved and reelected a new Board of Directors, which indicated the completion of majorassets swap transaction and the successful listing of Taisen Holding on Shenzhen Stock Exchangethrough back door listing.

(2) Issuing shares to purchase assets

In December 2016, the Company issued 3,950,185,873 ordinary shares (A shares) at par value ofRMB 1.00 per share at an issuing price of RMB 10.76 per share to Mingde Holdings, Shunda Fengrun,Jiaqiang Shunfeng, Zhaoguang Investment, Oriza Shunfeng, Guyu Qiu Chuang and Shun Xin FengHe to cover the difference of the above swap (RMB 42,504,000,000). The difference between thevalue of shares and the share capital amounting to RMB 38,553,814,120.48 was recognised ascapital reserve. The total share capital was changed to 4,183,678,213 shares. After the new shareswere issued, Mingde Holdings, Shunda Fengrun, Jiaqiang Shunfeng, Zhaoguang Investment, OrizaShunfeng and other shareholders held 64.58%, 9.38%, 6.37%, 6.37%, 6.37% and 6.92%respectively of the equities in the Company. China Securities Regulatory Commission approved theabove assets restructuring plan of the Company on 12 December 2016. The share change abovewas verified by PricewaterhouseCoopers Zhong Tian LLP with a capital verification report of PwC ZTYan Zi (2016) No. 1757 issued on 28 December 2016. The Company registered the additional 3.95billion shares at China Securities Depository and the Clearing Corporation Limited Shenzhen Branchon 18 January 2017.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

1 General information and historical development (Cont’d)

(3) Raising matching fund

In July 2017, the Company issued 227,337,311 ordinary shares (A shares) at par value of RMB 1.00per share to specific investors through non-public offering at RMB 35.19 per share. The total fundraised amounted to RMB 7,999,999,974.09. Net of underwriter and sponsor’s fees and othertransaction costs, the net fund raised amounted to RMB 7,822,179,636.78, including an incrementof share capital of RMB 227,337,311.00 and an increment of capital reserve by RMB7,604,681,212.80. The aforesaid fund was received on 31 July 2017 and verified byPricewaterhouseCoopers Zhong Tian LLP with a capital verification report of PwC ZT Yan Zi (2017)No. 745 issued.

The Company registered the additional shares at China Securities Depository and the ClearingCorporation Limited Shenzhen Branch on 15 August 2017. The total share capital was changed to4,411,015,524 shares. Mingde Holdings, Shunda Feng Run, Jiaqiang Shunfeng, ZhaoguangInvestment, Oriza Shunfeng and other shareholders held 61.25%, 8.89%, 6.04%, 6.04%, 6.04% and

11.74% of the equities in the Company respectively.

Afterwards, the Company conducted several restricted shares incentive plans and share repurchasemeasures (Note 9(2)(a)). Therefore, the total share capital of the Company as at 30 June 2019 waschanged to 4,414,585,265.00 shares and such change was verified by Chinese Certified PublicAccountant.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

1 General information and historical development (Cont’d)

The approved business scope of the Company and its subsidiaries (hereinafter “the Group”) changesto: assets management, capital management, investment management (trusts, financial assetsmanagement and security assets management are not allowed); auto rent (excluding auto rent withdriver); enterprise headquarters management; customs brokerage, inspection brokerage; investmentin industries; domestic trade; marketing planning; investment consultancy and other informationconsultancy (excluding human resources intermediary service, securities and restricted projects);engagement in the development of network technology, information technology and electronicproduct technology and related technology services, consultancy and transfer of network technology,and provision of network information, E-Commerce service platform, business management,business investment, investment management consultancy, investment management, enterprisemanagement consulting, etc.; call centre business and information service (both are second typevalue-added telecommunication services) and road transportation of common cargo; internationalfreight forwarding for air transportation and road transportation of imported and exported goods ortransit goods, including solicitation, booking, shipping, warehousing and packaging; type-1 and type-2 (international and domestic) sales agency of air transport; common cargo transportation, stowageand logistics services; science and technology information consulting, project investment consultingand logistics information consulting; data processing; research and development and sales ofcommunication equipment, and related technology services (projects subject to approval could onlybe implemented after approval by relevant authorities), research and development of unmannedaerial vehicle(“UAV”) and spare parts; supply chain management and related supporting services,and engagement in both export and import business; development, construction and operation ofindustrial park; property management; self-owned property leasing; network marketing promotion; E-Commerce training; information technology outsourcing and information services outsourcing; datamining, data analysis and data services; development and application of general software, industryapplication software and embedded software; operation of on-line trading, on-line consulting, on-lineauction and on-line advertising; network business service and database service; services in respectof development and application of electronic government affairs system; communications industryvalue-added business services; international freight forwarding, domestic and international express(excluding business exclusively operated by postal enterprises), transportation of cargo shippingcontainers and large objects, economic and technical consulting, technical information consulting,and engagement in commercial activities by way of franchising; transport services of domestic(including Hong Kong, Macau and Taiwan) and international aviation cargo and related services, andimport and export of goods and technology; cargo express agent services; international freightforwarding (excluding shipping agency business), loading, unloading and handling; international anddomestic freight forwarding; technology development of software and hardware for financial paymentsystems; internet payment, bank card acquiring, supply chain management; non-securities equityinvestment activities and relevant consulting services; finance leasing; leasing; purchase of leasedproperty from home and abroad; residual value processing and maintenance of leased property;leasing consulting; commercial factoring related to main operating activities; delivery of goods; freightequipment leasing; container yard operation and container leasing service; railway cargotransportation; ship freight; product marketing design and planning for enterprises and individualsand related business agency services; non-vessel operating common carrier business; internationalmaritime freight forwarding; financial information consulting, financial outsourcing servicescommissioned by financial institutions, building construction engineering, and warehousing andtransport of medicine, medical equipment and food.

First-tier and second-tier subsidiaries included in the consolidation scope of the financial statementsare detailed in Note 6(1). The changes in the scope of consolidation for the current period are set outin Note 5.

As at 30 June 2019, Mingde Holdings was the parent company and ultimate controlling company ofthe Company.

These financial statements were authorised for issue by the Board of Directors of the Company on26 August 2019.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates

The Group determines the specific accounting policies and estimates based on its features ofproduction and operation, primarily comprising the methods of provision for expected credit losseson loans and receivables (Note 2(9)), valuation of inventories (Note 2(10)), measurement model ofinvestment properties (Note 2(12)), depreciation of fixed assets and amortisation of intangible assets(Note 2(13), (16)), criterion for capitalisation of capitalised development expenditures (Note 2(17)),recognition and measurement of revenue (Note 2(25)), etc.

Details of the Group's critical judgements used in determining significant accounting policies are setforth in Note 2(30).

(1) Basis of preparation

The financial statements are prepared in accordance with the Accounting Standards for BusinessEnterprises - Basic Standard, and the specific accounting standards and other relevant regulationsissued by the Ministry of Finance on 15 February 2006 and in subsequent periods (hereaftercollectively referred to as “the Accounting Standards for Business Enterprises” or “CASs”) and thedisclosure requirements in the Preparation Convention of Information Disclosure by CompaniesOffering Securities to the Public No.15 - General Rules on Financial Reporting issued by the ChinaSecurities Regulatory Commission.

The financial statements are prepared on a going concern basis.

(2) Statement of compliance with the Accounting Standards for Business Enterprises

The financial statements of the Company for the six months ended 30 June 2019 are in compliancewith the Accounting Standards for Business Enterprises, and truly and completely present theconsolidated and company financial position as at 30 June 2019 and their financial performance,cash flows and other information for the period then ended.

(3) Accounting year

The Company’s accounting year starts on 1 January and ends on 31 December.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(4) Recording currency

The Company’s recording currency is Renminbi (RMB). The Company’s subsidiaries decide theirrecording currencies in line with the economic environments in which they operate, while thesubsidiaries in Hong Kong and abroad mainly adopt currencies including HKD, EUR and etc. as theirrecording currencies. The financial statements are presented in RMB.

(5) Business combinations

(a) Business combinations involving enterprises under common control

The consideration paid and net assets obtained by the acquirer in a business combination aremeasured at the carrying amount. If the acquiree is acquired from a third party by the ultimatecontrolling party in a prior year, the consideration paid and net assets obtained by the acquirer aremeasured based on the carrying amounts of the acquiree’s assets and liabilities (including thegoodwill arising from the acquisition of the acquiree by the ultimate controlling party) presented inthe consolidated financial statements of the ultimate controlling party. The difference between thecarrying amount of the net assets obtained from the combination and the carrying amount of theconsideration paid for the combination is treated as an adjustment to capital reserve (share premium).If the capital reserve (share premium) is not sufficient to absorb the difference, the remaining balanceis adjusted against retained earnings. Costs directly attributable to the business combination areincluded in profit or loss in the period in which they are incurred. Transaction costs associated withthe issue of equity or debt securities for the business combination are included in the initiallyrecognised amounts of the equity or debt securities.

(b) Business combinations involving enterprises not under common control

The combination cost and identifiable net assets obtained by the acquirer in a business combinationare measured at fair value at the acquisition date. Where the combination cost exceeds the acquirer'sinterest in the fair value of the acquiree's identifiable net assets, the difference is recognised asgoodwill; where the combination cost is lower than the acquirer's interest in the fair value of theacquiree's identifiable net assets, the difference is recognised in profit or loss for the current period.Costs directly attributable to the combination are included in profit or loss in the period in which theyare incurred. Transaction costs associated with the issue of equity or debt securities for the businesscombination are included in the initially recognised amounts of the equity or debt securities.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(6) Preparation of consolidated financial statements

The consolidated financial statements comprise the financial statements of the Company and all ofits subsidiaries.

Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date on which such control ceases. For a subsidiary that is acquired in abusiness combination involving enterprises under common control, it is included in the consolidatedfinancial statements from the date when it, together with the Company, comes under common controlof the ultimate controlling party. The portion of the net profits realised before the combination date ispresented separately in the consolidated income statement.

In preparing the consolidated financial statements, where the accounting policies and the accountingperiods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiariesare adjusted in accordance with the accounting policies and the accounting period of the Company.For subsidiaries acquired from business combinations involving enterprises not under commoncontrol, the individual financial statements of the subsidiaries are adjusted based on the fair value ofthe identifiable net assets at the acquisition date.

All significant intra-group balances, transactions and unrealised profits are eliminated in theconsolidated financial statements. The portion of subsidiaries’ equity and the portion of subsidiaries’net profit or loss and comprehensive income for the period not attributable to the Company arerecognised as minority interests, minority interest income and total comprehensive incomeattributable to minority shareholders and presented separately in the consolidated financialstatements under equity, net profit and total comprehensive income respectively. Unrealised profitsand losses resulting from the sale of assets by the Company to its subsidiaries are fully eliminatedagainst net profit attributable to owners of the parent. Unrealised profits and losses resulting fromthe sale of assets by a subsidiary to the Company are eliminated and allocated between net profitattributable to owners of the parent and minority interest income in accordance with the allocationproportion of the parent in the subsidiary. Unrealised profits and losses resulting from the sale ofassets by one subsidiary to another are eliminated and allocated between net profit attributable toowners of the parent and minority interest income in accordance with the allocation proportion of theparent in the selling subsidiary.

If the accounting treatment of a transaction is inconsistent in the financial statements at the Grouplevel and at the Company or its subsidiary level, adjustment will be made from the perspective of theGroup.

(7) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand,and short-term and highly liquid investments that are readily convertible to known amounts of cashand which are subject to an insignificant risk of changes in value.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(8) Foreign currency translation

(a) Foreign currency transactions

Foreign currency transactions are translated into recording currency using the spot exchange ratesand approximate exchange rates prevailing at the dates of the transactions.

At the balance sheet date, monetary items denominated in foreign currencies are translated intorecording currency using the spot exchange rates on the balance sheet date. Exchange differencesarising from these translations are recognised in profit or loss for the current period, except for thoseattributable to foreign currency borrowings that have been taken out specifically for acquisition orconstruction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at historical costs aretranslated at the balance sheet date using the spot exchange rates at the date of the transactions.The effect of exchange rate changes on cash is presented separately in the cash flow statement.

(b) Translation of foreign currency financial statements

The asset and liability items in the balance sheets for overseas operations are translated at the spotexchange rates on the balance sheet date. Among the equity items, the items other than “retainedearnings” are translated at the spot exchange rates of the transaction dates. The income andexpense items in the income statement of foreign operations are translated at the spot exchangerates of the transaction dates. The differences arising from the above translation are recognised inother comprehensive income. The cash flows of foreign operations are translated at the spotexchange rates on the dates of the cash flows. The effect of exchange rate changes on cash ispresented separately in the cash flow statement.

(9) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity. A financial asset or a financial liability is recognisedwhen the Group becomes a party to the contractual provisions of the instrument.

(a) Financial assets

(i) Classification and measurement

Based on the business model for managing the financial assets and the contractual cash flowcharacteristics of the financial assets, financial assets are classified as: (1) financial assets atamortised cost; (2) financial assets at fair value through other comprehensive income; (3) financialassets at fair value through profit or loss.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(9) Financial instruments (Cont’d)

(a) Financial assets (Cont’d)

(i) Classification and measurement (Cont’d)

The financial assets are measured at fair value at initial recognition. Related transaction costs thatare attributable to the acquisition of the financial assets are included in the initially recognisedamounts, except for the financial assets at fair value through profit or loss, the related transactioncosts of which are recognised directly in profit or loss for the current period. Accounts receivable ornotes receivable arising from sales of products or rendering of services (excluding or without regardto significant financing components) are initially recognised at the consideration that is entitled to becharged by the Group as expected.

Debt instruments

The debt instruments held by the Group refer to the instruments that meet the definition of financialliabilities from the perspective of the issuer, and are measured in the following ways:

Measured at amortised cost:

The objective of the Group’s business model is to hold the financial assets to collect the contractualcash flows, and the contractual cash flow characteristics are consistent with a basic lendingarrangement, which gives rise on specified dates to the contractual cash flows that are solelypayments of principal and interest on the principal amount outstanding. The interest income of suchfinancial assets is recognised using the effective interest method. Such financial assets mainlycomprise cash at bank and on hand, notes receivable, accounts receivable, Factoring receivables,loans and advances, other receivables and long-term receivables. Long-term receivables that aredue within one year (inclusive) as from the balance sheet date are included in the current portion ofnon-current assets.

Measured at fair value through profit or loss:

Debt instruments held by the Group that are not divided into those at amortised cost, or thosemeasured at fair value through other comprehensive income, are measured at fair value throughprofit or loss and included in financial assets held for trading. At initial recognition, the Groupdesignates a portion of financial assets as at fair value through profit or loss to eliminate orsignificantly reduce an accounting mismatch. Financial assets that are due within one year (inclusive)as from the balance sheet date and are expected to be held over one year are included in other non-current financial assets.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(9) Financial instruments (Cont’d)

(a) Financial assets (Cont’d)

(i) Classification and measurement (Cont’d)

Equity instruments

Investments in equity instruments, over which the Group has no control, joint control or significantinfluence, are measured at fair value through profit or loss under financial assets held for trading;investments in equity instruments expected to be held over one year as from the balance sheet dateare included in other non-current financial assets.

In addition, a portion of certain investments in equity instruments not held for trading are designatedas financial assets at fair value through other comprehensive income under other investments inequity instruments. The relevant dividend income of such financial assets is recognised in profit orloss for the current period.

(ii) Impairment

The Group confirms the loss provision based on expected credit losses for financial assets measuredat amortised cost.

Giving consideration to reasonable and supportable information on past events, current conditionsand forecasts of future economic conditions, as well as the default risk weight, the Group recognisesthe expected credit loss ("ECL") as the probability-weighted amount of the present value of thedifference between the cash flows receivable from the contract and the cash flows expected to collect.

As at each balance sheet date, the expected credit losses of financial instruments at different stagesare measured respectively. 12-month ECL provision is recognised for financial instruments in Stage1 that have not had a significant increase in credit risk since initial recognition; lifetime ECL provisionis recognised for financial instruments in Stage 2 that have had a significant increase in credit riskyet without credit impairment since initial recognition; and lifetime ECL provision is recognised forfinancial instruments in Stage 3 that have had credit impairment since initial recognition.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(9) Financial instruments (Cont’d)

(a) Financial assets (Cont’d)

(ii) Impairment (Cont’d)

For the financial instruments with lower credit risk on the balance sheet date, the Group assumesthere is no significant increase in credit risk since initial recognition and recognises the 12-monthECL provision.

For the financial instruments in Stage 1, Stage 2 and with lower credit risk, the Group calculates theinterest income by applying the effective interest rate to the gross carrying amount (before deductionof the impairment provision). For the financial instrument in Stage 3, the interest income is calculatedby applying the effective interest rate to the amortised cost (after deduction of the impairmentprovision from the gross carrying amount).

For notes and accounts receivables, the Group recognises the lifetime expected credit loss provisionregardless of whether there exists a significant financing component.

In case the expected credit losses of an individually assessed financial asset cannot be evaluatedwith reasonable cost, the Group divides the receivables into certain groupings based on credit riskcharacteristics, and calculates the expected credit losses for the groupings. Basis for determinegroupings is as follows:

Bank acceptance notes Group of bank notes with low credit riskAccounts receivables and other receivables Group of receivables from related partiesAccounts receivables and other receivables Group of receivables from non-related partiesLong-term receivables Group of finance lease

Long-termreceivablesGroupofInterest-free loans to employees

Based on the exposure at default and the lifetime expected credit loss rate, the Group calculates theexpected credit losses of notes and accounts receivables that are classified into groupings withconsideration to historical credit losses experience, current conditions and forecasts of futureeconomic conditions.

Based on the exposure at default and the 12-month/lifetime expected credit loss rate, the Groupcalculates the expected credit losses of other receivables, Factoring receivables, loans andadvances, and long-term receivables that are classified into groupings with consideration to historicalcredit losses experience, the current conditions and forecasts of future economic conditions.

The Group recognises the loss provision made or reversed into profit or loss for the current period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(9) Financial instruments (Cont’d)

(a) Financial assets (Cont’d)

(iii) Derecognition

A financial asset is derecognised when any of the below criteria is met: (1) the contractual rights toreceive the cash flows from the financial asset expire; (2) the financial asset has been transferredand the Group transfers substantially all the risks and rewards of ownership of the financial asset tothe transferee; or (3) the financial asset has been transferred and the Group has not retained controlof the financial asset, although the Group neither transfers nor retains substantially all the risks andrewards of ownership of the financial asset.

When a financial asset is derecognised, the difference between the carrying amount and the sum ofthe consideration received and the cumulative changes in fair value that are previously recogniseddirectly in other comprehensive income is recognised in profit or loss for the current period, exceptfor those as investments in other equity instruments, the difference aforementioned is recognised inretained earnings instead.

(b) Financial liabilities

Financial liabilities are classified as financial liabilities at amortised cost and financial liabilities at fairvalue through profit or loss at initial recognition.

Financial liabilities of the Group mainly comprise financial liabilities at amortised cost, including notesand accounts payables, other payables, borrowings, debentures payable, etc. Such financialliabilities are initially recognised at fair value, net of transaction costs incurred, and subsequentlymeasured using the effective interest method. Financial liabilities that are due within one year(inclusive) are classified as current liabilities; those with maturities over one year but are due withinone year (inclusive) as from the balance sheet date are classified as current portion of non-currentliabilities. Others are classified as non-current liabilities.

A financial liability is derecognised or partly derecognised when the underlying present obligation isdischarged or partly discharged. The difference between the carrying amount of the derecognisedpart of the financial liability and the consideration paid is recognised in profit or loss for the currentperiod.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(9) Financial instruments (Cont’d)

(c) Determination of fair value of financial instruments

The fair value of a financial instrument that is traded in an active market is determined at the quotedprice in the active market. The fair value of a financial instrument that is not traded in an active marketis determined by using a valuation technique. In valuation, the Group adopts valuation techniquesapplicable in the current situation and supported by adequate available data and other information,selects inputs with the same characteristics as those of assets or liabilities considered in relevanttransactions of assets or liabilities by market participants, and gives priority to the use of relevantobservable inputs. When relevant observable inputs are not available or feasible, unobservableinputs are adopted.

(10) Inventories

(a) Classification

Inventories comprise low-value consumables, raw materials in stock, finished goods, aviationconsumables and properties under development, and are stated at the lower of cost and netrealisable value.

(b) Valuation method for inventory issued

Raw materials in stock and finished goods are accounted for using the weighted average methodupon issuance. Aviation consumables are accounted for using the specific-unit-cost method uponissuance. Properties under development comprise land costs relating to real estate development,construction costs, other direct and indirect development expenses, etc., and are transferred tocompleted properties held for sale at actual cost upon completion.

(c) Amortisation methods of low-value consumables

Low-value consumables are amortised into expenses in full when issued for use.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(10) Inventories (Cont'd)

(d) Basis for determining the net realisable value of inventories and provision for decline in the value of

inventories

Provision for decline in the value of inventories is determined at the excess amount of the carryingamounts of the inventories over their net realisable value. Net realisable value is determined basedon the estimated selling price in the ordinary course of business, less the estimated costs andestimated costs necessary to make the sale and related taxes.

(e) The Group adopts the perpetual inventory system.

(11) Long-term equity investments

Long-term equity investments comprise the Company’s long-term equity investments in itssubsidiaries, and the Group’s long-term equity investments in its joint ventures and associates.

A subsidiary is an investee over which the Company is able to exercise control. A joint venture is ajoint arrangement which is structured through a separate vehicle over which the Group has jointcontrol together with other parties and only has rights to the net assets of the arrangement based onlegal forms, contractual terms and other facts and circumstances. An associate is the investee overwhich the Group has significant influence by participating in the financial and operating policydecisions.

Investments in subsidiaries are presented in the Company’s financial statements using the costmethod, and are adjusted to the equity method when preparing the consolidated financial statements,and investments in joint ventures and associates are accounted for using the equity method.

(a) Determination of investment cost

For long-term equity investments arising from business combination: for long-term equityinvestments arising from business combination involving enterprises under common control, theinitial investment cost shall be the share of the carrying amount of equity of the acquiree in theconsolidated financial statements of the ultimate controlling party as at the combination date; forlong-term equity investments arising from business combination, the investment cost shall be thecombination cost.

For long-term equity investments acquired not through a business combination: for long-term equityinvestments acquired by payment in cash, the initial investment cost shall be the purchase priceactually paid; for long-term equity investments acquired by issuing equity securities, the initialinvestment cost shall be the fair value of the equity securities issued.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(11) Long-term equity investments (Cont’d)

(b) Subsequent measurement and recognition methods of gains and losses

Long-term equity investments accounted for using the cost method are measured at the initialinvestment cost. Cash dividend or profit distribution declared by an investee is recognised asinvestment income in profit or loss for the current period.

For long-term equity investments that are accounted for using the equity method, where the initialinvestment cost exceeds the Group’s share of the fair value of the investee’s identifiable net assetsat the time of acquisition, the investment is initially measured at cost. Where the initial investmentcost is less than the Group’s share of the fair value of the investee’s identifiable net assets at thetime of acquisition, the difference is included in profit or loss for the current period and the cost of thelong-term equity investment is adjusted upwards accordingly.

Under the equity method, the Group recognises the investment income according to its share of netprofit or loss of the investee. The Group discontinues recognising its share of the net losses of aninvestee after the carrying amounts of the long-term equity investment together with any long-terminterests that in substance form part of the investor’s net investment in the investee are reduced tozero. However, if the Group has obligations for additional losses and the criteria with respect torecognition of provisions are satisfied, the Group continues recognising the estimated losses that itneeds to bear. The changes of the Group’s share of the investee’s equity other than those arisingfrom the net profit or loss, other comprehensive income and profit appropriation, are recognised inthe Group’s capital reserve and the carrying amounts of the long-term equity investment are adjustedaccordingly. The carrying amount of the investment is reduced by the Group’s share of the profitdistribution or cash dividends declared by an investee. The unrealised profits or losses arising fromthe transactions between the Group and its investees are eliminated in proportion to the Group’sequity interest in the investees, based on which the investment gain or losses are recognised. Forthe loss on the intra-group transaction amongst the Group and its investees attributable to assetimpairment losses, any unrealised loss is not eliminated.

(c) Basis for determining existence of control, joint control, significant influence over investees

Control means having power over an investee, enjoying variable returns through involvement inrelevant activities of the investee, and being able to impact the amount of such variable returns byusing the power over the investee.

Joint control is the agreed sharing of control over an arrangement, and the decision of activitiesrelating to such arrangement requires the unanimous consent of the Group and other parties sharingcontrol.

Significant influence is the power to participate in making the decisions on financial and operatingpolicies of the investee, but is not control or joint control over making those policies.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(11) Long-term equity investments (Cont’d)

(d) Impairment of long-term equity investments

The carrying amounts of long-term equity investments in subsidiaries, joint ventures and associatesare reduced to the recoverable amounts when the recoverable amounts are below their carryingamounts (Note 2(19)).

(12) Investment properties

Investment properties, including land use rights that have already been leased out, buildings that areheld for the purpose of leasing and buildings that are being constructed or developed for future usefor leasing, are measured initially at cost. Subsequent expenditures incurred in relation to aninvestment property are included in the cost of the investment property when it is probable that theassociated economic benefits will flow to the Group and their costs can be reliably measured;otherwise, the expenditures are recognised in profit or loss for the period in which they are incurred.

The Group adopts the cost model for subsequent measurement of investment properties. Buildingsand land use rights are depreciated or amortised to their estimated net residual values over theirestimated useful lives. The estimated useful lives, the estimated net residual values that areexpressed as a percentage of cost and the annual depreciation rates of investment properties areas follows:

Estimated useful

lives

Estimated netresidual values

Annualdepreciation/amortisation rates

Buildings 10 - 50 years 5% 9.50% - 1.90%

Land use rights20-50 years0%2.52%-2.00%

The investment property’s estimated useful life, net residual value and depreciation (amortisation)method applied are reviewed and adjusted as appropriate at each year-end.

An investment property is derecognised on disposal or when the investment property is permanentlywithdrawn from use and no future economic benefits are expected from its disposal. The net amountof proceeds from sale, transfer, retirement or damage of an investment property net of its carryingamount and related taxes and expenses is recognised in profit or loss for the current period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(13) Fixed assets

(a) Recognition and initial measurement of fixed assets

Fixed assets comprise buildings, motor vehicles, computers and electronic equipment, aircraft andaircraft engines, rotables and high-value aircraft maintenance tools, machinery and equipment, officeequipment and other equipment.

Fixed assets are recognised when it is probable that the associated economic benefits will flow tothe Group and the related cost can be reliably measured. Fixed assets purchased or constructed areinitially measured at cost at the time of acquisition.

Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset whenit is probable that the associated economic benefits will flow to the Group and the related cost canbe reliably measured. The carrying amount of the replaced part is derecognised. All the othersubsequent expenditures are recognised in profit or loss for the period in which they are incurred.

(b) Depreciation method for fixed assets

Except for replacement parts for overhaul of engine, fixed assets are depreciated using the straight-line method to allocate the recorded amount of the assets to their estimated residual values overtheir estimated useful lives. For the fixed assets that have been provided for impairment loss, therelated depreciation charge is prospectively determined based upon the adjusted carrying amountsover their remaining useful lives.

The estimated useful lives and the estimated net residual values expressed as a percentage of costand the annual depreciation rates of fixed assets are as follows:

Estimated useful

lives

Estimated netresidual values

Annualdepreciation rates

Buildings 10 - 50 years 5% 9.50% - 1.90%Motor vehicles (excludingelectromobiles) 2 - 5 years 0% - 5% 50.00% - 19.00%Motor vehicles (electromobiles) 2 years 5% 47.50%Machinery and equipment(excluding automatic sortingequipment imported from abroad)

2 - 10 years 0% - 5% 50.00% - 9.50%Machinery and equipment(automatic sorting equipmentimported from abroad) 15 years 5% 6.33%Computers and electronicequipment 2 - 5 years 0% - 5% 50.00% - 19.00%Aircraft and engine bodies 10 years 5% 9.50%Replacement parts for overhaul of

aircraft fuselage 1.5 - 12 years 0% 66.67% - 8.33%Rotables 10 years 5% 9.50%High-value aircraft maintenancetools 5 years 5% 19.00%Office equipment and otherequipment 2 - 10 years 0% - 5% 50.00% - 9.50%

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(13) Fixed assets (Cont’d)

(b) Depreciation method for fixed assets (Cont'd)

Replacement parts for overhaul of engines are depreciated using the units-of-production method andtaking the expected usable recurring number as the unit of production.

The estimated useful life/expected usable recurring number and the estimated net residual value ofa fixed asset and the depreciation method applied to the asset are reviewed, and adjusted asappropriate at each year-end.

(c) The carrying amounts of fixed assets are reduced to the recoverable amounts when the recoverable

amounts are below their carrying amounts (Note 2(19)).

(d) Basis for identification of fixed assets held under finance leases and related measurement

A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownershipof an asset. The leased asset is recognised at the lower of the fair value of the leased asset and thepresent value of the minimum lease payments. The difference between the recorded amount of theleased asset and the minimum lease payments is accounted for as unrecognised finance charge(Note 2(28)(b)).

Fixed assets held under a finance lease is depreciated on a basis consistent with the depreciationpolicy adopted for fixed assets that are self-owned. When a leased asset can be reasonablydetermined that its ownership will be transferred at the end of the lease term, it is depreciated overits estimated useful life; otherwise, the leased asset is depreciated over the shorter period of thelease term and its estimated useful life.

(e) Disposal of fixed assets

A fixed asset is derecognised on disposal or when no future economic benefit is expected from itsuse or disposal. The amount of proceeds from disposals on sale, transfer, retirement or damage ofa fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or lossfor the current period.

(14) Construction in progress

Construction in progress is measured at actual cost. Actual cost comprises construction costs,installation costs, borrowing costs that are eligible for capitalisation and other costs necessary tobring the fixed assets ready for their intended use. Construction in progress is transferred to fixedassets when the assets are ready for their intended use, and depreciation begins from the followingmonth. The carrying amount of construction in progress is reduced to the recoverable amount whenthe recoverable amount is below its carrying amount (Note 2(19)).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(15) Borrowing costs

The Group’s borrowing costs that are directly attributable to the acquisition and construction of afixed asset that needs a substantially long period of time for its intended use commence to becapitalised and recorded as part of the cost of the asset when expenditures for the asset andborrowing costs have been incurred, and the activities relating to the acquisition and constructionthat are necessary to prepare the asset for its intended use have commenced. The capitalisation ofborrowing costs ceases when the asset under acquisition or construction becomes ready for itsintended use and the borrowing costs incurred thereafter are recognised in profit or loss for thecurrent period. Capitalisation of borrowing costs is suspended during periods in which the acquisitionor construction of a fixed asset is interrupted abnormally and the interruption lasts for more than 3months, until the acquisition or construction is resumed.

For the specific borrowings obtained for the acquisition or construction of an asset qualifying forcapitalisation, the amount of borrowing costs eligible for capitalisation is determined by deductingany interest income earned from depositing the unused specific borrowings in the banks or anyinvestment income arising on the temporary investment of those borrowings during the capitalisationperiod.

For general borrowings utilised for the acquisition and construction of an asset qualifying forcapitalisation, the capitalised amount of the general borrowings is determined by the weightedaverage of the excess of accumulated capital expenditure over capital expenditure of the specialborrowings multiplied by the weighted average effective interest rate of the utilised generalborrowings. The effective interest rate is the interest rate at which the future cash flows of theborrowings over the estimated life or a shorter applicable period are discounted into the initialrecognised amount of the borrowings.

(16) Intangible assets

Intangible assets include software, land use rights, trademark rights, customer relationships, patents,etc.

(a) Software

Software is measured at actual cost and amortised on the straight-line basis over 2 to 10 years.

(b) Land use rights

Land use rights are amortised on the straight-line basis over 33 to 50 years.

(c) Trademark rights

Purchased trademark rights are measured at cost at the time of acquisition. Trademark rightsrecognised under business combinations are recorded at fair value. Trademark rights are amortisedon the straight-line basis over 5 to 20 years.

(d) Customer relationships

Customer relationships refer to intangible assets recognised under business combinations.Customer relationships are recorded at fair value and amortised on the straight-line basis over theexpected beneficial period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(16) Intangible assets (Cont’d)

(e) Patents

Patents are amortised on the straight-line basis over 5 to 10 years.

(f) Periodical review of useful life and amortisation method

For an intangible asset with a finite useful life, review of its useful life and amortisation method isperformed at each year-end, with adjustment made as appropriate.

(g) Impairment of intangible assets

The carrying amounts of intangible assets are reduced to the recoverable amounts when therecoverable amounts are below their carrying amounts (Note 2(19)).

(17) Research and development

The expenditure on an internal research and development project is classified into expenditure onthe research phase and expenditure on the development phase based on its nature and whetherthere is material uncertainty that the research and development activities can form an intangibleasset at end of the project.

Expenditure on the research phase is recognised in profit or loss in the period in which it is incurred.Expenditure on the development phase is capitalised only if all of the following conditions aresatisfied:

? it is technically feasible to complete the intangible asset so that it will be available for use or

sales;? management intends to complete the intangible asset, and use or sell it;? it can be demonstrated how the intangible asset will generate economic benefits;? there are adequate technical, financial and other resources to complete the development

and the ability to use or sell the intangible asset; and? the expenditure attributable to the intangible asset during its development phase can be

reliably measured.

Other development expenditures that do not meet the conditions above are recognised in profit orloss in the period in which they are incurred. Capitalised development expenditures previouslyrecognised as expenses are not recognised as an asset in a subsequent period. Capitalisedexpenditure on the development phase is presented as capitalised development expenditures in thebalance sheet and transferred to intangible assets at the date when the asset is ready for its intendeduse.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(18) Long-term prepaid expenses

Long-term prepaid expenses include settling-in allowance and introduction fee for pilots, theexpenditure for improvements to fixed assets held under operating leases, and other expendituresthat have been incurred but should be recognised as expenses over more than one year in thecurrent and subsequent periods. Long-term prepaid expenses are amortised on a straight-line basisover the expected beneficial period (2 to 15 years) and are presented at actual expenditure net ofaccumulated amortisation.

(19) Impairment of long-term assets

Fixed assets, construction in progress, intangible assets with finite useful lives, investment propertiesmeasured using the cost model and long-term equity investments in subsidiaries, joint ventures andassociates are tested for impairment if there is any indication that the assets may be impaired at thebalance sheet date; intangible assets not ready for their intended use are tested at least annually forimpairment, irrespective of whether there is any indication that it may be impaired. If the result of theimpairment test indicates that the recoverable amount of an asset is less than its carrying amount, aprovision for impairment and an impairment loss are recognised for the amount by which the asset’scarrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’sfair value less costs to sell and the present value of the future cash flows expected to be derivedfrom the asset. Provision for asset impairment is determined and recognised on individual assetbasis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverableamount of a group of assets to which the asset belongs is determined. A group of assets is thesmallest group of assets that is able to generate independent cash inflows.

Goodwill that is separately presented in the financial statements is tested at least annually forimpairment, irrespective of whether there is any indication that it may be impaired. In conducting thetest, the carrying amount of goodwill is allocated to the related asset groups or groups of asset groupswhich are expected to benefit from the synergies of the business combination. If the result of the testindicates that the recoverable amount of an asset group or a group of asset groups, including theallocated goodwill, is lower than its carrying amount, the corresponding impairment loss is recognised.The impairment loss is first deducted from the carrying amount of goodwill that is allocated to theasset group or group of asset groups, and then deducted from the carrying amounts of other assetswithin the asset group or group of asset groups in proportion to the carrying amounts of assets otherthan goodwill.

Once the above asset impairment loss is recognised, it will not be reversed for the value recoveredin the subsequent periods.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(20) Employee benefits

Employee benefits refer to all forms of consideration or compensation given by the Group inexchange for service rendered by employees or for termination of employment relationship, whichinclude short-term employee benefits, post-employment benefits, termination benefits and otherlong-term employee benefits.

(a) Short-term employee benefits

Short-term employee benefits include employee wages or salaries, bonus, allowances and subsidies,staff welfare, premiums or contributions on medical insurance, work injury insurance and maternityinsurance, housing funds, union running costs and employee education costs. The employee benefitliabilities are recognised in the accounting period in which the service is rendered by the employees,with a corresponding charge to the profit or loss for the current period or the cost of relevant assets.Employee benefits which are non-monetary benefits are measured at fair value.

(b) Post-employment benefits

The Group classifies post-employment benefits plans into defined contribution plans and definedbenefit plans. Defined contribution plans are post-employment benefit plans under which the Grouppays fixed contributions into a separate fund and will have no obligation to pay further contributions;and defined benefit plans are post-employment benefit plans other than defined contribution plans.During the reporting period, the Group's post-employment benefits mainly included basic pensioninsurance and unemployment insurance, both of which belong to defined contribution plans.

Basic pension insurance

The Group’s employees participate in the basic pension plan set up and administered by localauthorities of Ministry of Human Resource and Social Security. Monthly payments of premiums onthe pensions are calculated according to local regulations for pension plan. When employees retire,the local labour and social security authority is obliged to pay the basic pensions to them. Theamounts based on the above calculations are recognised as liabilities in the accounting period inwhich the service has been rendered by the employees, with a corresponding charge to the profit orloss for the current period or the cost of relevant assets.

(c) Termination benefits

The Group provides compensation for terminating the employment relationship with employeesbefore the end of the employment contracts or as an offer to encourage employees to acceptvoluntary redundancy before the end of the employment contracts. The Group recognises a liabilityarising from compensation for termination of the employment relationship with employees, with acorresponding charge to profit or loss for the current period at the earlier of the following dates: 1)when the Group cannot unilaterally withdraw an employment termination plan or a curtailmentproposal; 2) when the Group recognises costs or expenses related to a restructuring that involvesthe payment of termination benefits.

The termination benefits expected to be paid within one year since the balance sheet date areclassified as current liabilities.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(20) Employee benefits (Cont'd)

(d) Employee incentives

The Group provides incentive plans for on-the-job employees who comply with certain conditions,and makes payments based on the schedule. Provisions for employee incentives are initiallymeasured at the best estimate necessary to settle the present obligation, and expensed as incurred.The Group integrates separation rate, time value of money and other factors into account at initialmeasurement. Where the effect of the time value of money is material, the best estimate isdetermined by discounting the related future cash outflows. The increase in the discounted amountof the provision arising from passage of time is expensed as incurred. The carrying amount ofprovisions for employee incentives is reviewed at each balance sheet date and adjusted to reflectthe current best estimate.

(21) Dividend distribution

Cash dividends are recognised as liabilities in the period in which the dividends are approved by theshareholders’ meeting.

(22) Provisions

Provisions are recognised when the Group has a present obligation, it is probable that an outflow ofeconomic benefits will be required to settle the obligation, and the amount of the obligation can bemeasured reliably.

A provision is initially measured at the best estimate of the expenditure required to settle the relatedpresent obligation. Factors surrounding a contingency, such as the risks, uncertainties and the timevalue of money, are taken into account as a whole in reaching the best estimate of a provision. Wherethe effect of the time value of money is material, the best estimate is determined by discounting therelated future cash outflows. The increase in the discounted amount of the provision arising frompassage of time is recognised as interest expense.

The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect thecurrent best estimate.

The provisions expected to be settled within one year since the balance sheet date are classified ascurrent liabilities.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(23) Share-based payments

(a) Categories of share-based payments

A share-based payment is a transaction in which an enterprise grants equity instruments or assumesliabilities that are determined based on equity instruments, in exchange for services rendered byemployees or another party. Equity instruments include the equity instruments that are linked to theenterprise, the parent company of the enterprise or another accounting entity within the same group.Share-based payments comprise equity-settled and cash-settled payments.

(b) Basis for determining the best estimate of exercisable equity instruments

At each balance sheet date in the vesting period, the Group would make best estimate in accordancewith the newly acquired information such as changes in the number of employees entitled to equityinstruments, and amend the number of exercisable equity instruments. On the exercisable date, theultimate estimated number of exercisable equity instruments coincides with the actual number.

(c) Accounting treatment of implementation of share-based payments

(i) Equity-settled share-based payment

The equity-settled share-based payment where the Group grants shares or other equity instrumentsas a consideration in return for services, is measured at the fair value of the equity instruments atthe grant date. Where the share-based payment is not exercisable until the service in the vestingperiod is completed or specified performance conditions are met, then at each balance sheet datewithin the vesting period, the service obtained in the current period shall be included in relevant costor expenses and in capital reserve at the fair value of the equity instruments at the grant date basedon the best estimates of the quantity of exercisable equity instruments made by the Group, inaccordance with latest changes in the number of exercisable employees and subsequent information.

(ii) Cash-settled share-based payments

The cash-settled share-based payment where the Group calculates and determines the cashpayment or any other asset obligation on the basis of shares or other equity instruments in return forservices, is measured at the fair value of the liabilities calculated based on relevant equityinstruments. Where the share-based payment is not exercisable until the service in the vesting periodis completed or specified performance conditions are met, then at each balance sheet date withinthe vesting period, the service obtained in the current period shall be included in cost or expensesand in liabilities at the fair value of the Group’s liabilities based on the best estimates of the quantityof exercisable equity instruments made by the Group. At each balance sheet date and settlementdate before relevant liabilities are settled, the fair value of the liabilities is remeasured and thechanges are recognised in profit or loss.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(24) Factoring

The factoring business of the Group mainly represents factoring with recourse. Factoring withrecourse is a kind of financing activity where the customer transfers the creditor's rights of accountsreceivable that meet relevant requirements and are accepted by the Group to the Group accordingto the purchase and sale contract and relevant agreements, so as to obtain short-term trade financing,and agrees to repurchase the financing business in full if the creditor's rights cannot be recovered infull. The Group's factoring business is accounted for with Factoring receivables based on the amountpaid for the creditor’s rights of accounts receivable (Note 2(9)).

(25) Revenue recognition

The amount of revenue is determined in accordance with the fair value of the consideration receivedor receivable for the sales of goods and services in the ordinary course of the Group’s activities.Revenue is shown net of discounts and returns.

Revenue is recognised when the economic benefits associated with the transaction will flow to theGroup, the related revenue can be reliably measured, and the specific criteria of revenue recognitionhave been met for each type of the Group’s activities as described below. The principles are set outbelow:

(a) Rendering of services

Revenue from express delivery and supply chain services includes revenue from inbound andoutbound express delivery services; revenue from international freight forwarding agency services;revenue from domestic and international transport services of aviation cargoes; revenue fromexpress delivery agency services; and revenue from providing solutions services. Besides theaforesaid revenue, the Group’s revenue from rendering of services includes revenue fromcommunication service and maintenance service. Revenue from rendering of services is recognisedwhen the service is completed and the right to collect payment is obtained.

(b) Sales of goods

Revenue from the sales of goods is recognised when significant risks and rewards of ownership ofthe goods are transferred to the buyer, the Group retains neither continuing managerial involvementto the degree usually associated with ownership nor effective control over the goods sold, and theeconomic benefit associated with the transaction will flow to the Group and the relevant revenue andcosts can be measured reliably.

(c) Interest income

The interest income from factoring business, loans to customers and advances business and bankdeposit are measured on the basis of time proportion and the effective interest rate.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(26) Government grants

Government grants refer to the monetary or non-monetary assets obtained by the Group from thegovernment, including tax return, financial subsidy, etc.

Government grants are recognised when the grants can be received and the Group can comply withall attached conditions. If a government grant is a monetary asset, it will be measured at the amountreceived or receivable. If a government grant is a non-monetary asset, it will be measured at its fairvalue. If it is unable to obtain its fair value reliably, it will be measured at its nominal amount.

Government grants related to assets refer to the government grants which are obtained by the Groupfor the purposes of purchase, construction or acquisition of the long-term assets. Government grantsrelated to income refer to the government grants other than those related to assets.

Government grants related to assets are recorded as deferred income and recognised in profit orloss on a systemic basis over the useful lives of the assets. Government grants related to incomethat compensate the future costs, expenses or losses are recorded as deferred income andrecognised in profit or loss, or deducted against related costs, expenses or losses in reporting therelated expenses; government grants related to income that compensate the incurred costs,expenses or losses are recognised in profit or loss, or deducted against related costs, expenses orlosses directly in current period. The Group applies the presentation method consistently to thesimilar government grants in the financial statements.

Government grants related to daily corporate activities are included in operating profit. Governmentgrants not related to daily corporate activities are included in non-operating income or expenses.

Policy-based loans with prime rate to the Group are recorded at actual amount of borrowing received,and related borrowing costs are calculated with borrowing principal and policy-based prime rate.Financial discounts directly received by the Group are deducted against related borrowing costs.

(27) Deferred tax assets and deferred tax liabilities

Deferred tax assets and deferred tax liabilities are calculated and recognised based on thedifferences arising between the tax bases of assets and liabilities and their carrying amounts(temporary differences). Deferred tax asset is recognised for the deductible tax losses that can becarried forward to subsequent years for deduction of the taxable profit in accordance with the taxlaws. No deferred tax liability is recognised for a temporary difference arising from the initialrecognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the temporarydifferences resulting from the initial recognition of assets or liabilities due to a transaction other thana business combination, which affects neither accounting profit nor taxable profit (or deductible taxlosses). At the balance sheet date, deferred tax assets and deferred tax liabilities are measured atthe tax rates that are expected to apply to the period when the asset is realised or the liability issettled.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(27) Deferred tax assets and deferred tax liabilities (Cont’d)

Deferred tax assets are only recognised for deductible temporary differences, deductible tax lossesand tax credits to the extent that it is probable that taxable profit will be available in the future againstwhich the deductible temporary differences, deductible tax losses and tax credits can be utilised.

Deferred tax liabilities are recognised for temporary differences arising from investments insubsidiaries, associates and joint ventures, except where the Group is able to control the timing ofreversal of the temporary difference, and it is probable that the temporary difference will not reversein the foreseeable future. When it is probable that the temporary differences arising from investmentsin subsidiaries, associates and joint ventures will be reversed in the foreseeable future and that thetaxable profit will be available in the future against which the temporary differences can be utilised,the corresponding deferred tax assets are recognised.

Deferred tax assets and deferred tax liabilities are offset when:

? the deferred tax assets and liabilities are related to the same tax payer within the Group and

the same taxation authority; and,? that tax payer within the Group has a legally enforceable right to offset current tax assets

against current tax liabilities.

(28) Leases

A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownershipof an asset. An operating lease is a lease other than a finance lease.

(a) Operating leases

Lease payments under an operating lease are recognised on a straight-line basis over the period ofthe lease, and are either capitalised as part of the cost of related assets, or charged as an expensefor the current period.

Lease income under an operating lease is recognised on a straight-line basis over the period of thelease.

(b) Finance leases (as the leasee)

The leased asset is recognised at the lower of the fair value of the leased asset and the presentvalue of the minimum lease payments. The difference between the recorded amount of the leasedasset and the minimum lease payments is accounted for as unrecognised finance charge and isamortised using the effective interest method over the period of the lease. A long-term payable isrecorded at the amount equal to the minimum lease payments less the unrecognised finance charge.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(28) Leases (Cont’d)

(c) Finance leases (as the lessor)

At the commencement date of the lease term, lease finance receivables are accounted at the sumof the minimum lease proceeds and the initial direct cost on the lease commencement date;unrealised finance gains are recognised at the difference between the sum of the minimum leaseproceeds and the initial direct cost and its present value. Finance lease income is recognised usingthe effective interest method over the lease term.

(29) Segment information

The Group identifies operating segments based on the internal organisation structure, managementrequirements and internal reporting system, and discloses segment information of reportablesegments which is determined on the basis of operating segments.

An operating segment is a component of the Group that satisfies all of the following conditions: (1)the component is able to earn revenue and incur expenses from its ordinary activities; (2) whoseoperating results are regularly reviewed by the Group’s management to make decisions aboutresources to be allocated to the segment and to assess its performance, and (3) for which theinformation on financial position, operating results and cash flows is available to the Group. If two ormore operating segments have similar economic characteristics and satisfy certain conditions, theyare aggregated into one single operating segment.

(30) Critical accounting estimates and judgements

The Group continually evaluates the critical accounting estimates and key judgements applied basedon historical experience and other factors, including expectations of future events that are believedto be reasonable.

(a) Critical accounting estimates and key assumptions

(i) Deferred tax assets

Deferred tax assets are recognised for the deductible tax losses and deductible temporarydifferences that can be carried forward to subsequent years to the extent that it is probable thattaxable profit in the future will be available against which the deductible tax losses and deductibletemporary differences can be utilised. Whether to recognise the deferred tax assets arising fromdeductible tax losses and deductible temporary differences largely depends on the judgement ofmanagement on: (i) whether the accumulated deductible tax losses and deductible temporarydifferences in prior years are still effective, and (ii) whether sufficient taxable income that can be usedto deduct deductible tax losses and deductible temporary differences can be obtained in the futureperiod. Where there is a difference between the situation and the original estimate, such differencewill affect the Group’s deferred tax assets and income tax expenses in the future period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(30) Critical accounting estimates and judgements (Cont’d)

(a) Critical accounting estimates and key assumptions (Cont’d)

(ii) Risk of impairment on long-term assets

As described in Note 2(19), fixed assets with impairment indication, construction in progress,intangible assets, investment properties measured using cost model, long-term equity investmentsand other long-term assets are tested for impairment annually at the end of each year; and whetherwith impairment indication, goodwill are tested for impairment annually at least.

When assessing whether the above assets are impaired, management mainly evaluates andanalyses: (1) whether events affecting asset impairment occurred; (2) whether the present value ofexpected cash flows arising from the continuing use or disposal of the asset is lower than its carryingamount; and (3) whether the significant assumptions used in the calculation of the present value ofthe estimated cash flows are appropriate.

Relevant assumptions adopted by the Group to determine impairment, e.g. changes in assumptionson discount rate and growth rate used to calculate the present value of future cash flows, may havematerial impact on the present value used in the impairment test, and cause impairment in the above-mentioned long-term assets of the Group.

(iii) Determination of fair value of financial instruments by valuation techniques

The fair value of a financial instrument that is not traded in an active market is determined byvaluation techniques. Valuation techniques primarily refer to direct comparison method and incomemethod, including reference to the prices used in recent orderly transactions between marketparticipants, reference to the current fair value of other financial instruments that are substantiallyidentical, discounted cash flow analysis, option pricing models, etc. Observable market informationis applied in valuation techniques to the extent possible. When observable market information is notavailable, the management will make estimate of significant unobservable information included in thevaluation method. Different valuation techniques or inputs may lead to significant differencesbetween fair value estimates.

(iv) The assessment of the fair value of identifiable net assets in acquisition transactions and goodwill

recognition

As stated in Note 2(5)(b), identifiable net assets acquired in a business combination are recognisedat the fair value on the acquisition date, and if the combination cost is greater than the fair value ofthe acquiree’s identifiable net assets on the acquisition date, the difference is recognised as goodwill.

The assessment of the fair value of identifiable assets and liabilities involves significant estimatesand judgements from management, in particular, the identification of intangible assets and theevaluation of their fair values, thereby affecting the recognition of goodwill. As stated in Note 5(1)(b),key assumptions used in the assessment of the fair value of intangible assets include revenue growthrate, profit margin, assets contribution rate, customer churn rate, the remaining useful life of theidentified intangible assets, and discount rate, etc. Different input values in key assumptions mayresult in significant differences in estimated fair value.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(30) Critical accounting estimates and judgements (Cont’d)

(b) Critical judgments in applying the accounting policies

(i) Judgement on significant influence of the Group over investees

The investees over which the Group has significant influence are accounted for under the equitymethod. In judging the significant influence over an investee, the management considers based onone or more of the following circumstances and all facts and circumstances: (1) the shareholding inthe investee; (2) whether it appoints representative in the Board of Directors or a similar authority ofthe investee; (3) whether it participates in making decisions on financial and operating policies of theinvestee; (4) whether it has significant transaction with the investee; (5) whether it assignsmanagement personnel to the investee; (6) whether it provides key technical materials to theinvestee, and all facts and circumstances are considered.

(31) Changes in significant accounting policies

The Ministry of Finance released the revised CAS 22 - Recognition and Measurement of FinancialInstruments, CAS 23 - Transfer of Financial Assets and CAS 37 - Presentation of FinancialInstruments (hereinafter referred to as “new financial instruments standards”) in 2017 and theCircular on the Amendment to the Formats of Corporate Financial Statements for the Year of 2019(Cai Kuai [2019] No. 6) in 2019. The financial statements for the six months ended 30 June 2019 areprepared in accordance with the above standards and circular, and the impacts are as follows:

(a) Revisions on the formats of corporate financial statements

(i) The impacts on the balance sheet are as follows:

i) The Group split the notes receivable and accounts receivable into separate items, which arelisted as notes receivable and accounts receivable. The comparative period financialstatements are restated.

ii) The Group collects the interest receivables originally included in other receivables based on theeffective interest method into the corresponding book balance of financial assets such as cashat bank and on hand, factoring receivables, loans and advances,etc. The comparative periodfinancial statements are not restated.

iii) The Group collects the interest payables originally included in other payables based on theeffective interest method into the corresponding book balance of financial liabilities such asshort-term borrowings, other non-current assets, current portion of non-current liabilities, etc.The comparative period financial statements are not restated.

(ii) The impacts on the cash flow statement are as follows:

Pursuant to the Circular on the Amendment to the Formats of Corporate Financial Statements forthe Year of 2018 (Cai Kuai [2018] No. 15) and relevant interpretations issued by the Ministry ofFinance in 2018, the Group reclassified the cash received from government grants related to assetsfrom cash received relating to other investment activities to cash received relating to other operatingactivities for the six months ended 30 June 2018. The amount affected was RMB 37,982,039.01.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(31) Changes in significant accounting policies (Cont’d)

(b) Financial instruments

Since 1 January, 2019, the Group has adopted the new financial instrument standards. In accordancewith relevant provisions of the new financial instruments standards, the Group and the Companyrecognised the cumulative effect of initially applying the standard as an adjustment to the openingbalance of retained earnings in 2019 and other relevant line items in the financial statements. Thecomparatives were not restated.

During the comparative period, the accounting and presentation method is according to CAS 22 -Recognition and Measurement of Financial Instruments and CAS 23 - Transfer of Financial Assetsissued by the Ministry of Finance in 2006, and CAS 37 - Presentation of Financial Instruments issuedby the Ministry of Finance in 2014 (hereinafter referred to as “original financial instrumentsstandards”).

(i) Impacts on financial statements as at 1 January,2019 at the date of initial application of new

financial instruments standards

Accounting policies under the new financial instruments standards are listed in Note 2(9). At the dateof initial application, the Group and the Company analyzed the business model of financial assetsand cash flow characteristics of financial assets, and evaluated the impact of the new financialinstrument standards on the financial statements of the Group and the Company.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(31) Changes in significant accounting policies (Cont’d)

(b) Financial instruments (Cont’d)

(i) Impacts on financial statements as at 1 January,2019 at the date of initial application of new financial instruments standards (Cont’d)

As at 1 January 2019, the financial assets presented in the Group’s consolidated financial statements were classified and measured in accordance with theold/new financial instruments standards as follows:

Original financial instruments standards New financial instruments standards

Line itemMeasurementCarrying amountLine itemMeasurementCarrying amount
Cash at bank and on handAmortised cost16,131,119,850.56Cash at bank and on handAmortised cost16,131,119,850.56

Financial assets at fair value

through profit or lossFair value through profit or loss14,441,978.09Financial assets held for tradingFair value through profit or loss14,441,978.09

Notes receivable Amortised cost 20,958,746.36 Notes receivable Amortised cost 20,958,746.36

Accounts receivableAmortised cost7,352,877,748.87Accounts receivableAmortised cost7,352,877,748.87
Factoring receivablesAmortised cost447,173,258.65Factoring receivablesAmortised cost447,173,258.65
Loans and advancesAmortised cost95,070,625.30Loans and advancesAmortised cost95,070,625.30
Other receivablesAmortised cost1,397,913,483.52Other receivablesAmortised cost1,397,913,483.52

Current portion of non-current

assetsAmortised cost123,197,466.26

Current portion of non-current

assetsAmortised cost123,197,466.26

Note 1

Other current assetsAmortised cost564,456,452.05
Other current assetsAmortised cost60,108,657.53
Financial assets held for tradingFair value through profit or loss504,347,794.52

Available-for-sale financialassets

Fair value through othercomprehensive income

(debt instruments)178,403,812.08Other noncurrent financial assetsFair value through profit or loss178,403,812.08

Fair value through othercomprehensive income

(equity instruments)3,070,327,696.74
Financial assets held for tradingFair value through profit or loss72,373.06

Investments in other equity

instruments

Fair value through other

comprehensive income2,725,569,435.71
Other noncurrent financial assetsFair value through profit or loss344,685,887.97

Cost (equity instruments) 174,795,551.45

Investments in other equity

instruments

Fair value through other

comprehensive income87,260,649.19

Other non-current financial assets Fair value through profit or loss 105,000,000.00

Long-term receivablesAmortised cost571,493,790.74Longterm receivablesAmortised cost571,493,790.74
Total30,142,230,460.67Total30,159,695,558.41

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(31) Changes in significant accounting policies (Cont’d)

(b) Financial instruments (Cont'd)

(i) Impacts of adopting new financial instruments standards on financial statements at the date of initial application (January 1, 2019) (Cont’d)

Note 1: As at 31 December 2018, other current assets held by the Group at amortised cost were banking wealth management products.

Due to the application of above revised standards, the affected amount for equity attributable to shareholders of the parent Company in the Group’sconsolidated financial statements amounted to RMB 17,465,097.74, including other comprehensive income of RMB 17,465,097.74, and the affected amountin minority interests and retained earnings was zero.

As at 1 January 2019, the financial assets presented in the Company’s financial statements were classified and measured in accordance with the old/newfinancial instruments standards as follows:

Originalfinancial instruments standardsNew financial instruments standards
Line itemMeasurementCarrying amountLine itemMeasurementCarrying amount
Cash at bank and on handAmortised cost1,136,288,489.11Cash at bank and on handAmortised cost1,136,288,489.11

Other receivables Amortised cost 9,542,466,126.10 Other receivables Amortised cost 9,542,466,126.10

Total10,678,754,615.21Total10,678,754,615.21

Due to the above revised standards, the affected amount for equity of the Company and retained earnings was zero on 1 January 2019.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(31) Changes in significant accounting policies (Cont’d)

(b) Financial instruments (Cont'd)

(ii) As at 1 January 2019, the carrying amount of financial assets is reconciled from the original financial

instruments standards to the new financial instruments standards based on the new measurement:

Measurement under the new financial instruments standards

Financial assets at amortised costTable 1

Financial assets at fair value through profit or loss Table 2

Financial assets at fair value through other comprehensive income Table 3

Table 1: Financial assets at amortised cost under the new financial instruments standards

Carrying amount

Consolidated

CompanyCash at bank and on handAs at 31 December 2018

16,131,119,850.56 1,136,288,489.11As at 1 January 2019

16,131,119,850.56 1,136,288,489.11

Receivables

As at 31 December 2018 (Note 2)

10,008,685,119.70 9,542,466,126.10

As at 1 January 2019

10,008,685,119.70 9,542,466,126.10

Other current assets

As at31 December 2018
564,456,452.05-

Less: Transfer to financial assets at

fair value through profit or loss(under the new financialinstruments standards) (Note 3)

(504,347,794.52)

-As at 1 January 2019

60,108,657.53 -

Financial assets at amortised cost

26,199,913,627.79 10,678,754,615.21

Note 2: As at 31 December 2018 and 1 January 2019, receivables included notes receivable,

accounts receivable, factoring receivables, loans and advances, other receivables, currentportion of non-current assets and long-term receivables.

Note 3: As at 31 December 2018, the book value of structured deposits held by the Group was RMB

504,347,794.52. After the implementation of the new financial instrument standards, thecontractual cash flow characteristics of the structured deposits did not meet the basic lendingarrangements. Therefore, on 1 January 2019, the Group re-measured the structureddeposits from other current assets to fair value. Financial assets whose changes are includedin the current profit and loss are presented as financial assets held for trading.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(31) Changes in significant accounting policies (Cont’d)

(b) Financial instruments (Cont'd)

(ii) As at 1 January 2019, the carrying amount of financial assets is reconciled from the original financial

instruments standards to the new financial instruments standards based on the new measurement(Cont’d):

Table 2: Financial assets at fair value through profit or loss under the new financial instrumentsstandards

Carrying amount

Consolidated

Financial assets held for tradingAs at 31 December 2018

-Add: Transfer from financial assets at fair value

through profit or loss (under the original

financial instruments standards)

financial instruments standards)14,441,978.09

Transfer from

available-for-sale financialassets measured at fair value (underoriginal financial instrument standards) 72,373.06

Remeasurement: From amortised cost to fair value

Remeasurement: From amortised cost to fair value(Note 3)504,347,794.52
As at1 January 2019518,862,145.67

Other non-current financial assetsAs at 31 December 2018

-Add: Transfer from

available-for-sale financialassets measured at fair value (underoriginal financial instrument standards) (Note 4)

523,089,700.05Remeasurement: From cost to fair value (Note 5)

105,000,000.00As at 1 January 2019

628,089,700.05

Total financial assets at fair value through profit or

loss (under the new financial instrumentsstandards)

1,146,951,845.72

Note 4: As at 31 December 2018, the Group held asset-backed special scheme securities

(hereinafter referred to as the "Special Scheme") with book value of RMB 178,403,812.08.Following the implementation of the new financial Instruments standards, the Groupreclassifies the Special Scheme from available-for-sale financial assets into financial assetsat fair value through profit or loss, and lists them as other non-current financial assets.

As at 31 December, 2018, the Group held Simple Agreement for Future Equity (hereinafterreferred to as the "SAFE") with book value of RMB 344,685,887.97. Following theimplementation of the new Financial Instruments Standards, the Group reclassifies it fromavailable-for-sale financial assets into financial assets at fair value through profit or loss, andlists them as other non-current financial assets.

Note 5: As at 31December, 2018, the Group held an investment in industrial funds measure at cost

with a book value of RMB 105,000,000.00. Following the implementation of the new FinancialInstruments Standards, the Group recalculates such industrial fund investments from fromavailable-for-sale financial assets into financial assets at fair value through profit or loss, andlists them as other non-current financial assets.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(31) Changes in significant accounting policies (Cont’d)

(b) Financial instruments (Cont'd)

(ii) As at 1 January 2019, the carrying amount of financial assets is reconciled from the original financial

instruments standards to the new financial instruments standards based on the new measurement(Cont’d):

Table 3: Financial assets at fair value through other comprehensive income under the new financialinstruments standards

Carrying amount

Consolidated

Investments in other equity instrumentsAs at 31 December 2018

-Add: Transfer from available-for-sale financial

assets measured at fair value (under theoriginal financial instruments standards) (Note 6) 2,725,569,435.71

Remeasurement: From cost to fair value (Note 7) 87,260,649.19

As at 1 January 2019 2,812,830,084.90

Total financial assets at fair value through othercomprehensive income (under the new financialinstruments standards)

2,812,830,084.90

Note 6: As at 31 December 2018, certain equity investments that were measured at fair value at an

amount of RMB 2,725,569,435.71 were designated to financial assets at fair value throughother comprehensive income on 1 January 2019 due to the Group’s strategic investmentconsideration.

Note 7: As at 31 December 2018, certain equity investments that were measured at cost at an

amount of RMB 69,795,551.45 were designated to financial assets at fair value through othercomprehensive income on 1 January 2019 due to the Group’s strategic investmentconsideration. The difference between fair value and original book value is RMB17,465,097.74, adjusting other comprehensive income at the beginning of the period.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

2 Summary of significant accounting policies and accounting estimates (Cont’d)

(31) Changes in significant accounting policies (Cont’d)

(b) Financial instruments (Cont'd)

(iii) As at 1 January 2019, the Group’s reconciliation from the provision for impairment of financial assets

under the original financial instruments standards to loss provision under the new financialinstruments standards is as below:

Measurement

Loss provisionunder the original

financialinstrumentsstandards Remeasurement

Loss provisionunder the newfinancialinstrumentsstandards Consolidated

Consolidated

Financial assets at amortised cost -

Provision for impairment ofaccounts receivable 79,456,513.05 - 79,456,513.05

Provision for impairment of otherreceivables 12,857,692.63 - 12,857,692.63

Provision for impairment of long-term receivables 11,234,212.14 - 11,234,212.14

Provision for impairment ofFactoring receivables 9,655,084.16 - 9,655,084.16

Provision for impairment of loansand advances 11,158,725.91 - 11,158,725.91

Financial assets at fair value throughother comprehensive income -

Provision for impairment ofavailable-for-sale financialassets 4,596,187.92 (4,596,187.92)

-Total 128,958,415.81 (4,596,187.92)

124,362,227.89

Measurement

Loss provision underthe original financialinstruments standards Remeasurement

Loss provision under

the new financialinstruments standards

Company CompanyFinancial assets at amortised cost -

Provision for impairment of other

receivables- - -

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

3 Taxation

The main categories and rates of taxes applicable to the Group are set out below:

Category Tax rate Tax base

Enterprise income taxNote (1)Taxable income

Value-added tax (“VAT”)

Note (2) Taxable value-added amount (Tax payable is

calculated using the taxable salesamount/taxable service income multiplied bythe applicable tax rate less deductible VATinput of the current period or taxable turnoveramount multiplied by the VAT rate)City maintenance and

construction tax

7%, 5%, 1% Amount of VAT paidEducational surcharge 3% Amount of VAT paidLocal educationalsurcharge

2% Amount of VAT paidCustoms duty At applicable tax rate Customs dutiable value through examination and

approval of the Customs

In addition, pursuant to the Interim Measures for the Collection, Use and Management of the CivilAviation Development Fund (Cai Zong [2012] No. 17) issued by the Ministry of Finance, SF AirlinesCompany Limited (“SF Airlines”) pays the civil aviation development fund based on classification offlight routes, maximum take-off weight, flight mileage and applicable collection standards, andincludes such payment in cost.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

3 Taxation (Cont'd)

(1) Enterprise income tax

Pursuant to the Notice on the Deduction of Enterprise Income Tax Policies for Equipment andApparatus (Cai Shui [2018] No. 54) and related regulations issued by the State Administration ofTaxation, the cost of equipment purchased less than RMB 5,000,000 from 1 January 2018 to 31December 2020 can be deducted against taxable on a straight-line basis over income in the followingmonth after the assets are put into use, instead of being deducted annually in it’s useful life.

The subsidiaries entitled to the preferential tax are presented as follows:

(a) Pursuant to the Notice on the Policies and Catalogue of Income Tax Preferences for Enterprises in

Guangdong Hengqin New Area, Fujian Pingtan Comprehensive Experimental Zone, and ShenzhenQianhai Shenzhen-Hong Kong Modern Service Industry Cooperative Zone (Cai Shui [2014] No. 26)jointly issued by the Ministry of Finance and the State Administration of Taxation, the Company’ssubsidiaries as below are subject to enterprise income tax at the preferential rate of 15% from 2014to 2020.

Name of subsidiary Local statutory tax rate Preferential tax rateGuangdong S.F. E-commerce Co., Ltd. 25% 15%Shenzhen S.F. Supply Chain Co., Ltd. 25% 15%Shenzhen S.F. International Logistics Co., Ltd. 25% 15%

Shenzhen S.F. DDJ Technology Co., Ltd.25%15%

Shenzhen S.F. Information Service Technology Co.,Ltd 25% 15%

(b) Pursuant to the Notice on Tax Policy Issues Concerning Further Implementing the Western China

Development Strategy (Cai Shui [2011] No. 58) and the Notice on Issues Concerning theImplementation of the Tax Policies for the Development of Western China by Ganzhou City (Cai Shui[2013] No. 4) jointly issued by the Ministry of Finance, the General Administration of Customs andthe State Administration of Taxation, the Company’s subsidiaries as below are subject to enterpriseincome tax at the preferential rate of 15% up to 2020:

Name of subsidiary Local statutory tax rate Preferential tax rateS.F. Express (Chongqing) Co., Ltd. 25% 15%

Guizhou S.F. Express Co., Ltd.25%15%

Yunnan S.F. Express Co., Ltd. 25% 15%Sichuan S.F. Express Co., Ltd. 25% 15%Xi'an S.F. Express Co., Ltd. 25% 15%Guangxi S.F. Express Co., Ltd. 25% 15%S.F. Express (Ningxia) Co., Ltd. 25% 15%Inner Mongolia S.F. Express Co., Ltd. 25% 15%Xinjiang S.F. Express Co., Ltd. 25% 15%Qinghai S.F. Express Co., Ltd. 25% 15%Lanzhou S.F. Express Co., Ltd. 25% 15%Ganzhou S.F. Express Co., Ltd. 25% 15%Xi'an Shunlu Logistics Co., Ltd. 25% 15%

Chongqing Huiyifeng Logistics Co., Ltd.25%15%

Chengdu Taishun Logistics Co., Ltd. 25% 15%Xi'an SF Information Service Co., Ltd. 25% 15%

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

3 Taxation (Cont'd)

(1) Enterprise income tax (Cont'd)

(c) Pursuant to the Notice of the People's Government of the Tibet Autonomous Region on Issuing the

Regulations on Preferential Policies for Investment Promotion of the Tibet Autonomous Region(Provisional) (Zang Zheng Fa [2018] No. 25), the Company’s subsidiaries, which are registered inTibet Autonomous Region, are subject to enterprise income tax at the preferential rate of 15% asstipulated in the Western China Development Strategy from 1 January 2018 to 31 December 2020,and are temporarily exempt from the region’s share of entitlement to enterprise income tax payablefrom 1 January 2018 to 31 December 2021. In other words, the region’s share of entitlement to 40%in the enterprise income tax payable at the rate of 15% is exempted during the above period.

Name of subsidiary Local statutory tax rate Preferential tax rateTibet S.F. Express Co., Ltd. 25% 9%

(d) In accordance with Article 2 of the Notice on Implementing the Inclusive Tax Deduction and

Exemption Policies for Micro and Small Enterprises (Cai Shui [2019] No. 13) jointly issued by theMinistry of Finance and the State Administration of Taxation, the taxable income of the Company’ssubsidiaries below is recognised at 50% of income and they are subject to enterprise income tax atthe rate of 20%:

Name of subsidiary Local statutory tax rate

Preferential tax rateWeifang Fengtai E-Commerce Industrial Park

Management Ltd.

Management Ltd.25%20%

Ezhou Shunlu Logistics Co., Ltd. 25% 20%Shenzhen S.F. Research Institution Co., Ltd. 25% 20%Shenzhen Fenglian Technology Co., Ltd. 25% 20%Ezhou Fengtai Qisheng Logistics Development Co.,Ltd. 25% 20%Ezhou Fengyutai Helin Logistics Development Co.,

Ltd. 25% 20%

Shenzhen Youli Technology Co., Ltd.25%20%

Zhengzhou Shuncheng Logistics Co., Ltd. 25% 20%Shanghai Fengtai Yuanxing Property ManagementService Co., Ltd. 25% 20%

(e) In accordance with Article 1 of the Notice on Implementing the Inclusive Tax Deduction and

Exemption Policies for Micro and Small Enterprises (Cai Shui [2019] No. 13) jointly issued by theMinistry of Finance and the State Administration of Taxation, the taxable income of the Company andits subsidiaries below is recognised at 25% of income and they are subject to enterprise income taxat the rate of 20%:

Name of subsidiary Local statutory tax rate Preferential tax rateNingbo Shuncheng Logistics Co., Ltd. 25% 20%Hangzhou Shunyifeng Import & Export Trading CoLtd. 25% 20%Shanghai Chengbai Technology Co., Ltd. 25% 20%Shenyang Fengtai E-Commerce Industrial Park

Management Ltd.25%20%

Guizhou Shunlu Logistics Co., Ltd. 25% 20%

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

3 Taxation (Cont'd)

(1) Enterprise income tax (Cont'd)

(f) Pursuant to the Notice on Enterprise Income Tax Policies for Further Encouraging the Development

of Software and Integrated Circuit Industries (Cai Shui [2012] No. 27) jointly issued by the Ministryof Finance and the State Administration of Taxation, the Notice on the Issues of the Policies ofEnterprise Income Tax Preferences for Software and Integrated Circuit Industries (Cai Shui [2016]No. 49) jointly issued by the Ministry of Finance, the State Administration of Taxation, NationalDevelopment and Reform Commission and the Ministry of Industry and Information Technology, andthe Announcement on Issuing the Revised Measures for the Matters concerning PreferentialEnterprise Income Tax Policies (Announcement [2018]) No. 23) issued by the State Administrationof Taxation, and through filing with Shenzhen Nanshan District Taxation Bureau, the Company’ssubsidiaries below were subject to enterprise income tax at the preferential rate of 10% from 1January 2017 as a key software enterprise under the national planning and layout:

Name of subsidiary Local statutory tax rate Preferential tax rateSF Technology Co., Ltd. (“SF Technology”) 25% 10%

(g) As per Article 28 of the Enterprise Income Tax Law of the People's Republic of China, the high and

new technology enterprises eligible for key support from the State are entitled to a reduced tax rateof 15%. Through filing with local taxation bureaus, the Company’s subsidiaries as below are qualifiedas high and new technology enterprises, and entitled to the preferential tax rates for high and newtechnology enterprises eligible for key support from the State. The subsidiaries as below were subjectto a tax rate of 15% in the reporting period.

Name of subsidiary Local statutory tax rate Preferential tax rateS.F. Hengtong Pay Co., Ltd. 25% 15%Beijing Shunfeng Deda Logistics TechnologyCo., Ltd(“Beijing Deda”) 25% 15%

In addition, the Company’s subsidiaries located in Hong Kong, Singapore, Japan, Korea and USAare subject to enterprise income tax at the rates of 16.5%, 17%, 23.2%, 22% and 21% respectivelyin the reporting period.

In addition to the above subsidiaries, the Company and its other major subsidiaries are subject toenterprise income tax at the rate of 25%.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

3 Taxation (Cont'd)

(2) VAT

According to different businesses, VAT rates applicable to the Group include:

Business typeApplicable VAT rates

Sales of goods and leasing (i) 17% (before 1 May 2018),

16% (from 1 May 2018 to 31 March 2019),

13%(implement from 1 April 2019)

Transportation service (i) 11% (before 1 May 2018),

10% (from 1 May 2018 to 31 March 2019),9% (implement from 1 April 2019)

Logistics supporting service 6%

R&D and technical service6%

Information technology service 6%

Property leases (i) 11% (before 1 May 2018),

10% (from 1 May 2018 to 31 March 2019),9% (implement from 1 April 2019)

(i) Pursuant to the Notice on Adjustment of VAT Tax Rate (Cai Shui [2018] No. 32), taxpayers who

engage in VAT taxable sales or imported goods are subject to 17% and 11% tax rates, and the taxrates are adjusted to 16% and 10% respectively. The aforesaid circular has been effective since 1May 2018.

Pursuant to the Announcement on Policies for Deepening the Value-Added Tax Reform (Cai Shui[2019] No. 39), the VAT taxable sales or goods import, which were subject to the tax rates of 16%and 10%, are subject to 13% and 9% respectively upon adjustment. The aforesaid circular has beeneffective since 1 April 2019.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements

(1) Cash at bank and on hand

30 June 2019 31 December 2018

Cash on hand925,135.671,333,057.53

Cash at bank (a) 11,793,650,488.63 15,181,387,817.87Balances with central bank from Group

Finance Company 596,684,272.44 886,346,294.94Including: Balances with central bank -

statutory reserve (b)592,676,085.96873,705,941.98

Balances with central bank -excess reserve (c) 4,008,186.48 12,640,352.96Other cash balances (a) 95,958,058.41 62,052,680.2212,487,217,955.15 16,131,119,850.56

Including: Total overseas deposits 1,418,614,001.59 1,539,296,677.54

(a) As at 30 June 2019, RMB 32,247.00 (31 December 2018: RMB 139,907.00) of the other cash

balances represented guarantee deposits with banks for letter of guarantee and was restricted. Asat 31 December 2018, the secured bank borrowings of RMB 86,400,000.00 were pledged by theGroup’s fixed deposits of RMB 30,000,000.00, and such pledge was released within the reportingperiod.

(b) On 18 September 2016, Taisen Holdings incorporated S.F. Holding Group Finance Co., Ltd.

(hereinafter “Group Finance Company”). Statutory reserve of Group Finance Company depositedwith the central bank represents required statutory reserve paid by financial enterprises in thePeople's Bank of China (“PBOC”) at 6% of deposits from customers denominated in RMB. Statutoryreserve deposits are not available for use by the Group in its day to day operations, which arerestricted cash.

(c) Surplus reserve of Group Finance Company deposited with the central bank represents the excess

over the required statutory reserve paid by financial institutions in the central bank, and it is bankdeposit that can be readily drawn on demand.

(2) Financial assets at fair value through profit or loss

31 December 2018

Investments in equity instrument held for

trading 13,715,336.78Forward interest rate swap contracts 726,641.3114,441,978.09

(3) Financial assets held for trading

30 June 2019

Structural deposits 2,509,960,802.13Others 15,803,836.662,525,764,638.79

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(4) Accounts receivable

30 June 2019 31 December 2018

Accounts receivable 8,594,782,325.79 7,432,334,261.92

Less: Provision for bad debts(156,621,134.24)(79,456,513.05)
8,438,161,191.557,352,877,748.87

The Group adopts regular settlement method for express & logistics comprehensive services providedto some customers. At each month-end, the outstanding part becomes accounts receivable.

(a) The ageing of accounts receivable is analysed below:

30 June 2019 31 December 2018

Within 1 year (inclusive) 8,484,572,828.94 7,359,283,705.951 - 2 years (inclusive) 62,814,614.58 53,918,666.20

Over 2 years47,394,882.2719,131,889.77
8,594,782,325.797,432,334,261.92

(b) The Group’s accounts receivable comprise the accounts receivable from the customers under

monthly settlement. As at 30 June 2019, the five largest amounts of accounts receivable aggregatedby debtors were summarised and analysed as follows:

30 June 2019Amount

Amount of provision

for bad debts % of total balance

Sum of the five largestaccounts receivable 736,619,491.42 (3,683,097.46)

8.57%

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(4) Accounts receivable (Cont’d)

(c) Provision for bad debts

Under the new financial instrument standards, the Group always prepares losses for accountsreceivable based on the expected credit losses for the entire duration.

As at 30 June 2019, accounts receivable for which the related provision for bad debts is provided onthe individual basis are analysed as follows:

Ending balance

expected credit

Lifetimeloss rate

loss rate

Provision for bad

debtsReason
Receivables

fromrelated

parties13,255,247.18100.00%(13,255,247.18)

encounteredfinancial

The debtordifficulties

difficulties, etc.
Receivables

from non-related

parties93,265,994.45100.00%(93,265,994.45)
106,521,241.63(106,521,241.63)

As at 30 June 2019, accounts receivable for which the related provision for bad debts was providedon the grouping basis were analysed as follows:

30 June 2019
Ending balanceProvision for bad debts
Amount
Lifetime expected
credit loss rateAmount
The group of
related parties290,106,155.59--
The group ofnon-
related parties8,198,154,928.570.61%(50,099,892.61)
8,488,261,084.16(50,099,892.61)

Under the revised financial instrument standards, the Group's provision for bad debts of accountsreceivable is analyzed as follows:

As at 31 December 2018Ending balance

Provision for bad debtsAmount

% of total balance

Amount

Percentage

Provision for bad debts on individual

basisReceivables from related parties 13,261,064.53 0.18% (13,261,064.53)

Provision for bad debts on individual

100.00%

Receivables from non-related

parties 23,795,014.21 0.32% (23,795,014.21)

100.00%

Provision for bad debts on groupingbasisReceivables from related parties 174,836,472.94 2.35% - -Receivables from non-relatedparties 7,220,441,710.24 97.15% (42,400,434.31)

0.59%

7,432,334,261.92 100.00% (79,456,513.05)

1.07%

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(4) Accounts receivable (Cont’d)

(c) Provision for bad debts(Cont’d)

For the six months ended 30 June 2019, the Group’s provision for bad debts amounted to RMB

79,264,307.29, and there was no provision for bad debts reversed(Note 4(24)).

For the six months ended 30 June 2019, the provision for bad debts of accounts receivable that was

written off amounted to RMB 14,624,394.24 and no accounts receivable with amounts that areindividually significant were written off(Note 4(24)).

(5) Other receivables

30 June 201931 December 2018

Current accounts receivable from relatedparties (Note 8(4)(c)) 292,919,000.57 188,372,946.30

Guarantees and deposits629,903,832.40567,057,200.70

Cash on delivery service 222,195,652.03 180,008,388.19Equity transfer receivable 106,979,595.37 -Employee borrowings and advances 100,562,324.57 117,914,472.13Entrusted loans receivable 27,000,000.00 27,000,000.00Social insurance premium prepaid 16,998,234.49 17,332,616.45Interest receivable - 47,810,100.13Others 336,585,963.19 265,275,452.251,733,144,602.62 1,410,771,176.15

Less: Provision for bad debts(17,497,977.70)(12,857,692.63)
1,715,646,624.921,397,913,483.52

(a) The ageing of other receivables is analysed as follows:

30 June 2019 31 December 2018

Within 1 year (inclusive) 1,358,279,331.12 1,065,321,416.55

1-2 years (inclusive)172,364,701.01136,307,658.64

Over 2 years 202,500,570.49 209,142,100.961,733,144,602.62 1,410,771,176.15

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(5) Other receivables (Cont’d)

(b) Provision for losses:

(i) Under the new financial instrument standard, the Group measures the loss for other receivables based on the expected credit losses for the next twelve

months or the entire duration.

Stage 1 Stage 3

Expected credit losses in the following 12

months (grouping)

Lifetime expected credit losses (credit

impaired)
Total

Ending balance

Provision for bad

debts

Ending balance

Provision for bad

debts

Provision for

bad debts

1 January 2019 1,383,519,550.55

(4,506,067.03)

27,251,625.60

(8,351,625.60)

(12,857,692.63)

Increase in the currentperiod

330,783,096.97

(13,049,955.57)

- -

(13,049,955.57)

Write-off in the current

period

(8,409,670.50)

8,409,670.50

- -

8,409,670.50

30 June 2019 1,705,892,977.02

(9,146,352.10)

27,251,625.60

(8,351,625.60)

(17,497,977.70)

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(5) Other receivables (Cont’d)

(b) Provision for losses (Cont’d):

As at 30 June 2019, for other receivables at stage 1, the related provision for bad debts was analysedbelow:

Ending balance

Expected credit loss ratein the following 12 months

Provision for bad

debts Reason

Provided on the grouping basis:

Related party grouping 292,919,000.57

-

- Not applicable

Non-related party grouping 1,412,973,976.45

0.65%

(9,146,352.10)

Expected creditloss method

1,705,892,977.02

(9,146,352.10)

As at 30 June 2019, the Group did not have any other receivables at stage 2.

As at 30 June 2019, for other receivables at stage 3, the related provision for bad debts was analysedbelow:

Ending balance

Lifetime expectedcredit losses

Provision for bad

debts Reason

Provided on the individual

basis:

Entrusted loans receivable 27,000,000.00

30.00%

(8,100,000.00)

The debtor encountered

financial difficulties

Others 251,625.60

100.00%

(251,625.60)

The debtor encountered

financial difficulties

27,251,625.60

(8,351,625.60)

(ii) Under the revised financial instrument standards, the provision for bad debts of other receivables

accrued by the Group is as follows:

As at 31 December 2018Ending balance Provision for bad debtsAmount

% of totalbalance

Amount

Percentage

Provision for bad debts on

individual basisReceivables from relatedparties 251,625.60 0.02% (251,625.60)

100.00%

Receivables from non-related

parties 27,000,000.00 1.92% (8,100,000.00)

30.00%

Provision for bad debts on

grouping basisReceivables from related

parties 188,121,320.70 13.33% - -Receivables from non-related

parties 1,195,398,229.85 84.73% (4,506,067.03)

0.38%

1,410,771,176.15 100.00% (12,857,692.63)

0.91%

(c) For the six months ended 30 June 2019, the Group’s provision for bad debts amounted to RMB

13,044,791.88, and there was no provision for bad debts reversed (Note 4(24)).

(d) For the six months ended 30 June 2019, the Group’s other receivables that were written off amounted

to RMB 8,409,670.50, and no other receivables with amounts that are individually significant werewritten off(Note 4(24)).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(5) Other receivables (Cont’d)

(e) As at 30 June 2019, the five largest other receivables aggregated by debtor were summarised and

analysed as follows:

30 June 2019 Nature of business Ageing Amount

Amount of provisionfor bad debts

% of totalbalance

Shenzhen Hive Box Technology Co.,Ltd. (“Hive Box Technology”) (Note8(4)(c))

Agency collectionand payment

Within 1year 189,018,739.98

-

10.91%

Shurui (Xiamen) Science andTechnology Co., Ltd.

Equity transferreceivable

Within 1year 101,500,000.00

(507,500.00)

5.86%

MHK Restaurants Limited”) (Note8(4)(c))

Agency collectionand payment

Within 1year 54,008,413.33

-

3.12%

Hangzhou International Airport Airlines subsidy

Within 1year 49,000,000.00

(245,000.00)

2.83%

Guangdong Baolichi New EnergyAutomobile Service Co., Ltd.

Deposit andsecurity deposit

Within 2year 42,000,000.00

(210,000.00)

2.42%

435,527,153.31

(962,500.00)

25.14%

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(6) Advances to suppliers

(a) The ageing of advances to suppliers is analysed below:

30 June 201931 December 2018

Ageing Amount % of total balance Amount % of total balance

Within 1 year (inclusive) 2,397,061,306.56 98.01% 2,465,558,542.39 97.96%1 - 2 years (inclusive) 32,815,207.44 1.34% 20,098,754.74 0.80%Over 2 years 15,891,876.66 0.65% 31,193,904.22 1.24%2,445,768,390.66 100.00% 2,516,851,201.35 100.00%

As at 30 June 2019, advances to suppliers with ageing over one year were mainly prepaid property rents, fuel cards, etc. As relevant business transactionswere not completed, the amounts were not settled yet.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(6) Advances to suppliers (Cont'd)

(b) As at 30 June 2019, the amount of top five advances to suppliers was analysed as follows:

30 June 2019
Amount% of total balance

Sum of the five largest advances to suppliers

466,378,919.43

19.07%

(7) Factoring receivables

As at 30 June 2019 and 31 December 2018, Factoring receivables were from the subsidiaryShenzhen Shuncheng Lefeng Factoring Co., Ltd (“Lefeng Factoring”).

30 June 2019

31 December 2018

Factoring receivables 149,670,834.23

456,828,342.81Less: Provision for bad debts (62,735,595.93)

(9,655,084.16)

86,935,238.30

447,173,258.65

(a) Factoring receivables are disclosed by category as follows:

30 June 2019

Amount Proportion

Provision for bad

debts

Net amount

Factoring withrecourse 149,670,834.23

100.00% (62,735,595.93)

86,935,238.30

31 December 2018

Amount Proportion

Provision for bad

debts Net amount

Factoring withrecourse 456,828,342.81

100.00% (9,655,084.16)

447,173,258.65

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(7) Factoring receivables (Cont’d)

(b) As at 30 June 2019, the Group's overdue factoring totaled RMB 140,658,622.66 (31 December 2018:

RMB 152,268,731.29), with an age of less than one year.

(c) For the six months ended 30 June 2019, the Group’s provision for bad debts and bad debts reversed

amounted to RMB 58,118,407.06 and RMB 5,037,895.29 respectively, and there was no provisionfor bad debts written-off (Note 4(24)).

(d) As at 30 June 2019, the Group’s Factoring receivables that are individually for which related provision

for bad debts is provided on individual basis amounted to RMB 122,527,142.92, and the relatedprovision for bad debts RMB 61,263,571.46.

(8) Loans and advances

As at 30 June 2019 and 31 December 2018, loans and advances were all from S.F. Finance (HongKong) Limited (“S.F. Finance”), which is a subsidiary of the Group in Hong Kong.

(a) Loans and advances by individual and enterprise

30 June 201931 December 2018

Personal loans 134,667.77 178,001.67Enterprise loansNon-related party loans 101,238,468.43 106,051,349.54Loans and advances - total 101,373,136.20 106,229,351.21Less: Provision for loan losses (14,137,195.17)

(11,158,725.91)

Loans and advances - net 87,235,941.03 95,070,625.30

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(8) Loans and advances (Cont’d)

(b) Loans and advances analysed by type of collateral

30 June 201931 December 2018

Unsecured loans 94,198,708.43

99,024,069.54

Guaranteed loans 7,174,427.77

7,205,281.67

Loans and advances - total 101,373,136.20

106,229,351.21

(c) Overdue loans are presented by pass-due ageing as follows:

30 June 2019

Within 3months

3 months - 1

year 1 - 3 years Over 3 years Total

Unsecured loans 515,254.11 2,425,415.55 - - 2,940,669.66

31 December 2018

Within 3months

3 months - 1

year 1 - 3 years Over 3 years Total

Unsecured loans 436,925.53 226,867.83 - - 663,793.36

(d) For the six months ended 30 June 2019, the Group’s provision for bad debts and bad debts written-

off amounted to RMB 3,475,742.51 and RMB 497,273.25 respectively, and there was no provisionfor bad debts reversed (Note 4(24)).

(e) As at 30 June 2019, the Group had no loans of which related provision for bad debts was provided

on individual basis.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(9) Inventories

Inventories are summarised by category as follows:

30 June 2019

Ending balance

Provision for declinein the value ofinventories Carrying amount

Raw materials in stock348,000,845.70-348,000,845.70

Aviation consumables 172,181,040.62 - 172,181,040.62Finished goods 110,680,654.39 - 110,680,654.39Properties underdevelopment 79,078,000.00 - 79,078,000.00Low-value consumables 25,172,360.84 - 25,172,360.84735,112,901.55 - 735,112,901.55

31 December 2018Ending balance

Provision for declinein the value ofinventories Carrying amount

Raw materials in stock426,581,892.04-426,581,892.04

Finished goods 128,321,781.99 - 128,321,781.99Aviation consumables 125,375,475.35 - 125,375,475.35Properties under

development79,078,000.00-79,078,000.00

Low-value consumables 34,613,558.73 - 34,613,558.73Others 24,079,316.91 - 24,079,316.91818,050,025.02 - 818,050,025.02

(10) Other current assets

30 June 2019 31 December 2018

Bank wealth management products (i) 2,418,220,958.88

564,456,452.05Input VAT to be offset 2,419,809,267.10

2,345,446,399.93Prepaid enterprise income tax 101,190,094.81

87,966,412.84Others 1,277,361.93

6,090,309.484,940,497,682.72

3,003,959,574.30

(i) The investment cycle of bank wealth management products is generally within 1 month to 3 months.

According to the contract, the contractual cash flow characteristics are in line with the basic loanarrangement and are therefore measured at amortized cost.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(11) Available-for-sale financial assets

Under the original financial instrument standards, the Group's available-for-sale financial assets areanalysed as follows:

31 December 2018

Measured at fair value

-

-Available-for-sale debt instruments (a)178,403,812.08

- Available-for-sale equity instruments (b) 3,070,327,696.74

Measured at cost- Available-for-sale equity instruments 174,795,551.453,423,527,060.27

(a) Available-for-sale debt instruments measured at fair value:

31 December 2018

Available-for-sale debt instruments

-Fair value178,403,812.08

- Amortised cost

183,000,000.00- Accumulated provision for impairment

(4,596,187.92)

(b) Available-for-sale equity instruments measured at fair value:

31 December 2018

Available-for-sale equity instruments

- Fair value 3,070,327,696.74- Cost 2,718,113,957.55- Accumulated amount recognised in

other comprehensive income 352,213,739.19- Accumulated provision for impairment -

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(12) Long-term receivables

30 June 2019 31 December 2018

Finance lease receivables (a)--

Interest-free loans to employeesreceivable (b) 228,011,459.71 324,736,080.74Deposit for house purchase 246,757,710.00 246,757,710.00474,769,169.71 571,493,790.74

(a) Finance lease receivables

30 June 201931 December 2018

Finance lease receivables 30,620,458.62 73,046,804.28Less: Unrealised financing income (1,198,046.77)

(4,121,125.88)

Amortised cost of finance lease receivables 29,422,411.85 68,925,678.40Less: Current portion of finance lease

receivables (18,541,854.93)

(57,691,466.26)

Provision for bad debts (10,880,556.92)

(11,234,212.14)

- -

Finance lease receivables that should be received after the balance sheet date are as follows:

30 June 2019

31 December 2018Amount

% of total

balance

Provision forbad debts

Amount

% of total

balance

% of total

Provision for

bad debts

Within 1

year 30,620,458.62

100.00%

(10,880,556.92)

73,046,804.28

100.00%

(11,234,212.14)

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(12) Long-term receivables (Cont’d)

(b) Interest-free loans to employees receivable

30 June 201931 December 2018

Interest-free loans to employees receivable 366,980,000.00 435,850,000.00Less: Prepaid discount interest (36,580,984.73)

(45,607,919.26)

Amortised cost of interest-free loans to

employees330,399,015.27390,242,080.74

Less: Current portion of interest-

employees (102,387,555.56)

free loans to

(65,506,000.00)

Provision for bad debts - -228,011,459.71 324,736,080.74

As at 30 June 2019, interest-free loans to employees receivable the interest-free loans to qualifiedemployees with a term of 5 years.

(13) Long-term equity investments

30 June 2019 31 December 2018

Cost:

Joint ventures 1,341,533,741.80 1,326,581,550.05Associates 984,020,811.60 934,446,087.672,325,554,553.40 2,261,027,637.72Less: Provision for impairment of long-term

equity investments

- Joint ventures (30,718,697.26)

(28,236,883.66)

- Associates (43,988,895.88)

(29,359,632.03)

(74,707,593.14)

(57,596,515.69)

Joint ventures (a) 1,310,815,044.54 1,298,344,666.39Associates (b) 940,031,915.72 905,086,455.642,250,846,960.26 2,203,431,122.03

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(13) Long-term equity investments (Cont’d)

(a) Joint ventures

Movements in the current period

Carrying amount asat 31 December

2018

Increase ininvestments

Decrease ininvestments

Share of netprofit/(loss) underequity method

Exchangedifferences ontranslation offoreign currencyfinancialstatements

Other changes inequity (i)

Accrual ofprovision forimpairment loss

Carrying amount asat 30 June 2019

Balance ofprovision forimpairment lossat the end of the

period

Hubei International Logistics Airport Co., Ltd. 919,822,243.93

- -

(3,012,908.47)

-

-

-

916,809,335.46

-ZBHA Group Co., Ltd. (“ZBHA”) 207,521,652.37

- -

1,877,757.19

-

-

-

209,399,409.56

-Beijing Wulian Shuntong Technology Co., Ltd. 30,000,000.00

40,000,000.00 -

(7,490,933.68)

-

-

-

62,509,066.32

-Hubei International Aviation Industry MetroDevelopment Co., Ltd. 40,206,913.74

- -

2,412.05

-

-

-

40,209,325.79

-Zhongyunda Aviation Ground Services Co., Ltd. 30,049,574.25

- -

(4,275,768.23)

-

-

-

25,773,806.02

-POST11O? 15,921,028.91

- -

6,865,530.12

-

-

-

22,786,559.03

-Beijing Shunhetongxin Technology Co., Ltd. 15,145,429.40

- -

(3,921,499.47)

-

-

-

11,223,929.93

-Shenzhen Shenghai Information Service Co., Ltd.

(“Shenghai Information”) 6,770,965.97

- -

493,158.21

-

-

-

7,264,124.18

-CR-SF International Express Co., Ltd. 4,858,622.97

- -

2,009,488.32

-

-

-

6,868,111.29

-Wenzhou Fengbaoke Technology Co., Ltd. 2,000,000.00

- -

(397,818.79)

-

842,393.75

-

2,444,574.96

-Shanghai Geling Information Technology Co., Ltd.

(“Geling Information”) 1,842,672.10

- -

134,595.44

-

-

-

1,977,267.54

-Shanghai Pharma DHL Supply Chain (Shanghai) Co.,

Ltd. (ii) -

2,030,750.79 -

7,078.40

(64,750.68)

-

-

1,973,078.51

-Global Connect Holding Limited 1,036,999.03

- -

539,456.92

-

-

-

1,576,455.95

-Shang Shun Supply Chain Management (China) Co.,

Ltd. 23,168,563.72

- (22,785,996.03)

-

(382,567.69)

-

-

-

-Guangzhou Leshou Network Technologies Co., Ltd.

(“Leshou Network”) -

2,500,000.00 -

(18,186.40)

-

-

(2,481,813.60)

-

(30,718,697.26)

1,298,344,666.39

44,530,750.79 (22,785,996.03)

(7,187,638.39)

(447,318.37)

842,393.75

(2,481,813.60)

1,310,815,044.54

(30,718,697.26)

(i) Those represent changes in equity resulting from capital injections by investors other than the Group.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(13) Long-term equity investments (Cont’d)

(b) Associates

Movements in the current period

Carrying amount asat 31 December

2018

Increase ininvestments

Share of netprofit/(loss) underequity method

Exchangedifferences ontranslation offoreign currencyfinancialstatements

Othercomprehensiveincomeadjustment

Accrual ofprovision forimpairment loss

Carrying amount asat 30 June 2019

Balance ofprovision forimpairment lossat the end of the

period

Zhejiang Galaxis Technology Co., Ltd. 165,725,961.09

-

154,360.56

-

-

-

165,880,321.65

-Zhuhai Sui Bian Technology Co., Ltd. (“Zhuhai

Sui Bian”) 157,457,861.35

-

(33,835,933.64)

-

-

-

123,621,927.71

(8,031,343.63)

Jiangsu Chiata Foton Co., Ltd.109,489,454.90-(993,283.11)---108,496,171.79-
Beijing Dazhangfang Network Technology Co.,

Ltd. (hereinafter “Beijing Dazhangfang”) 105,360,602.87

-

(3,388,313.11)

-

-

-

- 101,972,289.76 -

Shenzhen Bai Mi Life Co., Ltd.93,653,469.59-(140,240.22)---93,513,229.37-
DHL Weiheng (Zhuhai) Supply Chain

Management Co., Ltd. (ii)-

63,403,384.03

(85,533.65)

302,189.44

-

-63,620,039.82 -

Feng Wang Investment Co., Ltd.49,583,185.02-1,463,551.38-(1,956,923.83)-49,089,812.57-
Langxing UAV System Co., Ltd.42,286,144.93(782,584.79)-41,503,560.14

Shenzhen Canbeidou Supply Chain

Management Co., Ltd. “Canbeidou SupplyChain”) 31,203,326.00

5,000,000.00

(2,066,177.19)

- -

- 34,137,148.81 -Little Red Hat Issuance Co., Ltd. (“Little Red

Hat”) 39,935,693.38

-

1,203,989.34 - -

(14,629,263.85)

26,510,418.87 (14,629,263.85)

Beijing GreenValley Technology Limited 22,303,055.14

-

(271,203.36)

- -

- 22,031,851.78 -Shenzhen SF Lottery Technology DevelopmentCo., Ltd. (“SF Lottery”) 20,243,932.95

-

(594,766.39)

- -

- 19,649,166.56 -PT TRI ADI BERSAMA 11,030,861.92

10,358,610.85

(2,526,240.70)

(20,673.26)

-

- 18,842,558.81 -Shenzhen Zhi Hang UAV Co., Ltd. 20,725,087.16

-

(2,272,901.17)

- -

- 18,452,185.99 -Guangdong Shucheng Technology Co., Ltd. 11,111,112.00

-

(337,679.75)

- -

- 10,773,432.25 -Shenzhen Shun Jie Feng Da Express Co., Ltd. 9,797,782.97

-

197,366.34 - -

- 9,995,149.31 (20,480,557.60)

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(13) Long-term equity investments (Cont’d)

(b) Associates (Cont’d)

Movements in the current period

Carrying amount asat 31 December

2018

Increase ininvestments

Share of netprofit/(loss) underequity method

Exchangedifferences ontranslation offoreign currencyfinancialstatements

Othercomprehensiveincomeadjustment

Accrual ofprovision forimpairment loss

Carrying amount asat 30 June 2019

Balance ofprovision forimpairment lossat the end of the

period

Xi'an Huahan Air Passenger and Freight Service

Co., Ltd. 4,914,936.19

2,106,401.22

1,062,406.31

-

-

-

8,083,743.72

-

Kin Shun Information Technology Limited-5,609,808.75(1,047,837.51)(16,700.51)--4,545,270.73-
Chongqing Boqiang Logistics Co., Ltd.3,083,249.311,321,392.5645,378.54-4,450,020.41
Beijing Prettyfeather Brand Management Co.,

Ltd. 4,551,225.71

-

(254,623.81)

-

-

- 4,296,601.90 -

Co., Ltd. -

Wuhan Jinyu DHL Supply Chain Management

3,798,169.58

(39,493.95)

(120,957.44)

-

- 3,637,718.19 -

Qingdao Dakai Cargo Agency Co., Ltd.2,128,255.53912,109.51(17,971.33)---3,022,393.71-
KINGS (HK) INTERNATIONAL LIMITED-2,111,928.00803,097.6712,799.832,927,825.50
GSEXPRESSHOLDINGSPTE.LTD550,956.34-550,956.34

Shenzhen Xiaofeng Technology Co., Ltd.(“Xiaofeng Technology”) 501,257.63

-

(73,137.60)

- -

- 428,120.03 (847,730.80)

905,086,455.64

95,172,760.84

(43,797,771.14)

156,658.06

(1,956,923.83)

(14,629,263.85)

940,031,915.72

(43,988,895.88)

(ii) Those represent the Group's joint ventures and associates acquired through the acquisition of DHL Supply Chain (Hong Kong) Limited (“DHL HK”) and DHL

Logistics (Beijing) Co., Ltd. (“DHL BJ”) (Note 5(1)(b)) via business combination.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(14) Investments in other equity instruments

30 June 2019

Equity oflisted companies792,918,258.45

Equity of unlisted companies 3,249,780,185.564,042,698,444.01

Item

Dividend incomerecognised in thecurrent period

Accumulated gains orlosses recognised inother comprehensive

income

Equity of listed companies - 36,493,952.74Equity of unlisted companies - 412,148,625.59- 448,642,578.33

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(14) Investments in other equity instruments (Cont’d)

2018

31 December

accounting policies

Changes in

1 January 2019

current period

Increase in the

Changes in fair value

of current period

Disposal in the

current period

Foreign exchange

gains or lossesand exchangedifferences on

translation offoreign currency

financialstatements

30 June 2019

equity -

Listed company

815,357,936.75

815,357,936.75

-

31,339,063.00

(54,996,904.28)

1,218,162.98

792,918,258.45

Non

-listedcompanyequity -

1,997,472,148.15

1,997,472,148.15

1,257,296,652.39

(6,709,480.35)

(175,682.00)

1,896,547.37

3,249,780,185.56-

2,812,830,084.90

2,812,830,084.90

1,257,296,652.39

24,629,582.65

(55,172,586.28)

3,114,710.35

4,042,698,444.01

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(15) Other non-current financial assets

30 June 2019

Financial assets held for trading (over oneyear):

Industry fund investments 195,283,651.74Special scheme equity-class securities 138,000,000.00

Discounted stock option71,781,728.81
405,065,380.55

(16) Investment properties

BuildingsLand use rightsTotal
Cost
As at31 December 20181,545,871,953.211,058,161,494.782,604,033,447.99

Transfer from self-used assets inthe current period (Note 4 (17),

(18), (19)338,082,842.0298,289,203.86436,372,045.88

Transfer to self-used assets in the

current period (Note 4(17), (19))(307,239,281.03)(94,397,480.70)(401,636,761.73)

Effect of translation of foreign

currency financial statements1,072,695.901,510,780.242,583,476.14
As at30 June 20191,577,788,210.101,063,563,998.182,641,352,208.28

Accumulated depreciation

As at31 December 201874,842,688.7575,259,257.70150,101,946.45

Transfer from self-used assets inthe current period (Note 4(17),

(19))2,452,041.697,130,087.959,582,129.64

Provision in the current period 19,201,960.24 13,403,196.82 32,605,157.06Transfer to self-used assets in the

current period (Note 4(17), (19))(21,507,647.05)(8,148,525.75)(29,656,172.80)

Effect of translation of foreign

currency financial statements93,178.43106,779.43199,957.86
As at30 June 201975,082,222.0687,750,796.15162,833,018.21
Carrying amount
As at30 June 20191,502,705,988.04975,813,202.032,478,519,190.07
As at31 December 20181,471,029,264.46982,902,237.082,453,931,501.54

For the six months ended 30 June 2019, no borrowing cost was recognised in investment properties(for the six months ended 30 June 2018: Nil).

As at 30 June 2019, the Group was still in the process of applying for certificates of ownership forcertain buildings with carrying amount of RMB 571,234,394.63 (cost of RMB 577,383,288.40)(31December 2018: carrying amount of RMB 600,697,558.47 and cost of RMB 602,571,540.07). Inaddition, as at 30 June 2019, the Group had no land use rights without certificates (31 December2018: land use rights with carrying amount of RMB 95,106,403.06 and cost of RMB 102,600,875.61with certificates being handled).

As at 30 June 2019, investment properties with carrying amount of RMB 496,985,596.74 (cost ofRMB 509,215,459.44) (31 December 2018: Nil) were pledged as collateral for long-term borrowings(Note 4(33)(b)).

As at 30 June 2019 and 31 December 2018, the Group assessed that no impairment loss should berecognised for investment properties.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(17) Fixed assets

Buildings

Motor vehicles

Computers andelectronicequipment

Aircraft, aircraftengines, rotablesand high-valuemaintenance tools

Machinery andequipment

Office equipmentand otherequipment

TotalCostAs at 31 December 2018 3,907,817,817.37 5,235,525,474.79 2,837,932,643.79 5,846,203,808.20 2,329,971,443.62 3,529,504,542.15 23,686,955,729.92Increase arising from business combinations - 3,143,691.24 63,820,257.05 - 230,377,559.28 56,203,155.54 353,544,663.11Transfer from construction in progress (Note

4(18)) 84,477,850.43 9,970,095.95 6,037,050.12 1,222,649,334.86 102,573,355.29 295,745,451.85 1,721,453,138.50Transfer from investment properties in thecurrent period (Note 4(16)) 307,239,281.03 - - - - - 307,239,281.03Increase in the current period - 142,105,730.36 227,314,091.01 89,565,869.91 51,449,982.47 68,421,327.59 578,857,001.34Transfer to investment properties in the currentperiod (Note 4(16)) (28,314,895.02)

- - - - - (28,314,895.02)

Decrease in the current period (30,709,329.29)

(285,364,040.33)

(200,814,899.29)

(29,156,304.07)

(8,470,233.51)

(77,172,508.26)

(631,687,314.75)

Effect of translation of foreign currency

financial statements 2,211,605.68 316,571.87 1,022,467.04 623,053.21 2,687,136.52 389,968.02 7,250,802.34As at 30 June 2019 4,242,722,330.20 5,105,697,523.88 2,935,311,609.72 7,129,885,762.11 2,708,589,243.67 3,873,091,936.89 25,995,298,406.47

Accumulated depreciationAs at 31 December 2018 635,490,679.85 3,377,726,518.44 1,651,819,189.31 1,908,639,462.48 565,797,862.05 1,580,779,750.34 9,720,253,462.47Increase arising from business combinations - 1,994,821.31 43,124,294.52 - 153,894,514.84 40,754,094.71 239,767,725.38Transfer from investment properties in the

current period (Note 4(16)) 21,507,647.05 - - - - - 21,507,647.05Provision in the current period 59,978,099.81 368,420,615.15 298,065,326.76 320,810,300.46 98,521,383.81 306,981,416.38 1,452,777,142.37Transfer to investment properties in the current

period (Note 4(16)) (2,452,041.69)

- - - - -

- (2,452,041.69)

Decrease in the current period (1,507,142.40)

(263,557,749.81)

(179,129,926.41)

(21,225,201.49)

(4,891,722.69)

(59,489,352.58)

(529,801,095.38)

Effect of translation of foreign currency

financial statements 202,106.57 179,143.75 721,722.23 9,774.48 1,628,426.45 313,095.00 3,054,268.48As at 30 June 2019 713,219,349.19 3,484,763,348.84 1,814,600,606.41 2,208,234,335.93 814,950,464.46 1,869,339,003.85 10,905,107,108.68

Carrying amountAs at 30 June 2019 3,529,502,981.01 1,620,934,175.04 1,120,711,003.31 4,921,651,426.18 1,893,638,779.21 2,003,752,933.04 15,090,191,297.79As at 31 December 2018 3,272,327,137.52 1,857,798,956.35 1,186,113,454.48 3,937,564,345.72 1,764,173,581.57 1,948,724,791.81 13,966,702,267.45

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(17) Fixed assets (Cont’d)

(i) For the sixth months ended 30 June 2019, the amount of depreciation expenses charged to cost of

revenue, selling and distribution expenses, general and administrative expenses and research anddevelopment expenses was RMB 1,421,435,012.06 (for the sixth months ended 30 June 2018: RMB1,240,833,610.69).

(ii) As at 30 June 2019, fixed assets with carrying amount of RMB 534,736,222.21 (cost of RMB

586,427,847.12) (31 December 2018: carrying amount of RMB 342,796,848.43 and cost of RMB373,875,226.65) were pledged as collateral for long-term borrowings (Note 4(33)(b)).

(iii) Fixed assets with pending certificates of ownership

30 June 2019Cost

Accumulateddepreciation

Provision forimpairment loss Carrying amount

Buildings 140,011,128.99

(2,710,166.58)

- 137,300,962.41

31 December 2018Cost

Accumulateddepreciation

Provision forimpairment loss

Carryingamount

Buildings 193,877,274.92 (6,799,047.80)

- 187,078,227.12

In addition, as at 30 June 2019, buildings with carrying amount of RMB 24,485,697.49 and cost ofRMB 29,844,036.64 (31 December 2018: carrying amount of RMB 25,189,141.24 and cost of RMB29,844,036.64) represented public rental houses with restricted property rights purchased by theGroup for entity talents.

(iv) As at 30 June 2019 and 31 December 2018, the Group assessed that no impairment loss should be

recognised for fixed assets.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(17) Fixed assets (Cont’d)

(v) Disposal of aircraft engines, rotables and high-value aero maintenance tools

For the six months ended 30 June 2019Reason for disposal Cost

Accumulateddepreciation

Provision forimpairment loss Carrying amount

Aircraft rotables Scrapped 459,094.82 (148,092.22)

- 311,002.60

For the six months ended 30 June 2018Reason for disposal Cost

Accumulateddepreciation

Provision forimpairment loss Carrying amount

Aircraft rotablesSold155,266.03(15,709.71)-139,556.32

Aircraft rotables Scrapped 91,319.37 (48,443.46)

- 42,875.91 246,585.40 (64,153.17)

- 182,432.23

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(18) Construction in progress

30 June 2019

31 December 2018

Chuangzhi Tiandi Building Project2,808,727,620.952,807,629,439.13

Qianhai S.F. Headquarters Office 580,326,645.88 556,833,111.75Aircraft import and refit 550,864,847.57 943,574,638.75Industrial Buildings in Dongguan Songshan

Lake Zhigu Industrial Park437,085,303.75436,199,481.00

Changsha E-Commerce Industrial ParkProject 214,503,859.06 160,636,162.09Intelligent Sorting Hefei Base Project 195,947,491.56 313,838,021.65Dongguan Dalingshan Southern ChinaComprehensive Warehouse Project 176,146,611.44 86,998,454.45Wuhan E-Commerce Industrial Park Project 173,822,533.38 82,658,505.47Chongqing Fengtai E-Commerce Industrial

Park Project136,875,434.7468,562,581.48

S.F. Ma'anshan Innovation Industrial ParkProject 102,472,181.77 31,343,700.01Tianjin Fengtai E-Commerce Industrial Park

Project97,022,622.78257,973,670.95

Foshan Guicheng Fengtai E-CommerceIndustrial Park Project 87,455,704.61 62,684,757.42Weihai S.F. E-Commerce Industrial ParkProject 81,310,777.07 55,326,012.10Nantong Aviation Hub Project (Phase II) 81,227,855.04 60,934,684.78Beijing Daxing Distribution Hub Project 50,062,319.97 63,049,546.34Xi’an E-Commerce Industrial Park Project 38,217,700.80 37,491,895.04Zhengzhou E-Commerce Industrial ParkProject 34,785,615.02 11,123,175.33Others 369,287,675.06 471,049,475.336,216,142,800.45 6,507,907,313.07

As at 30 June 2019 and 31 December 2018, the Group assessed that no impairment loss should berecognised for construction in progress.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(18) Construction in progress (Cont’d)

Name of projects Budget

31 December 2018

current period

Increase in the

Transfer to long-term assets in thecurrent period (iii))

Decrease in thecurrent period

30 June 2019

% of

project

project
investment in

budget (ii)

Progress

Progress
of

project

Accumulative

Accumulative
amount of
capitalised
borrowing

costs

Including:
Borrowing costs

capitalise

d in
the current

period

4(49))

(Note

Capitalisation

rate

Source of funds

Chuangzhi Tiandi Building Project2,956,187,732.132,807,629,439.131,098,181.82--2,808,727,620.9595%95%--Selfowned funds
Qianhai S.F. Headquarters Office955,063,598.77556,833,111.7523,493,534.13--580,326,645.8861%61%48,247,952.0610,096,711.264.72%
Selfowned funds and
loans from financial
institutions
Aircraft import and refit1,553,941,896.72943,574,638.75852,107,725.70(1,222,649,334.87)(22,168,182.01)550,864,847.5755%55%---Selfowned funds
Industrial Buildings in Dongguan

Songshan Lake Zhigu Industrial

Park563,116,062.82436,199,481.00885,822.75--437,085,303.7578%78%---Selfowned funds
Changsha ECommerce Industrial
Park Project433,118,340.70160,636,162.0953,867,696.97214,503,859.0650%50%Selfowned funds
Intelligent Sorting Hefei Base
Project689,264,242.19313,838,021.6531,563,458.27(149,453,988.36)195,947,491.5650%50%Selfowned funds
Dongguan Dalingshan Southern

China Comprehensive

Warehouse Project228,117,303.1486,998,454.4589,148,156.99--176,146,611.4477%77%---Selfowned funds
Wuhan ECommerce Industrial
Park Project656,613,327.1682,658,505.4791,164,027.91173,822,533.3826%26%Selfowned funds
Chongqing Fengtai ECommerce
Industrial Park Project276,327,944.8768,562,581.4868,312,853.26136,875,434.7450%50%Selfowned funds
S.F. Ma'anshan Innovation
Industrial Park Project108,539,784.7231,343,700.0171,128,481.76102,472,181.7794%94%Selfowned funds
Tianjin Fengtai ECommerce
Industrial Park Project672,367,278.56257,973,670.9579,909,941.35(240,860,989.52)97,022,622.7850%50%Selfowned funds
Foshan Guicheng Fengtai E
Commerce Industrial Park Project353,640,166.6362,684,757.4224,770,947.1987,455,704.6125%25%Selfowned funds
Weihai S.F. ECommerce Industrial
Park Project88,073,140.8655,326,012.1025,984,764.9781,310,777.0792%92%Selfowned funds
Nantong Aviation Hub Project
(Phase II)313,999,540.4560,934,684.7820,293,170.2681,227,855.0426%26%Selfowned funds
Beijing Daxing Distribution Hub
Project97,017,748.3863,049,546.348,009,688.80(606,953.66)(20,389,961.51)50,062,319.9773%73%Selfowned funds
Xian ECommerce Industrial Park
Project596,106,274.7637,491,895.04725,805.7638,217,700.806%6%Selfowned funds
Zhengzhou ECommerce Industrial
Park Project243,936,462.2011,123,175.3323,662,439.6934,785,615.0214%14%Selfowned funds
Others-471,049,475.33491,276,689.53(417,649,819.09)(175,388,670.71)369,287,675.06--Selfowned funds
6,507,907,313.071,957,403,387.11(2,031,221,085.50)(217,946,814.23)6,216,142,800.4548,247,952.0610,096,711.26

(i) As at 30 June 2019, no construction in progress was pledged as collateral for long-term borrowings (31 December 2018: RMB 229,810,226.10) (Note

4(33)(b)).

(ii) For aircraft import and refit, the percentage of project investment in budget is related to the investment for the current period; for the other projects, the

percentage of project investment in budget is related to the accumulative investment.

(iii) Transfers from construction in progress for the current period amounted to RMB 2,031,221,085.50, including transfer to fixed assets of RMB 1,721,453,138.50

and transfer to investment properties of RMB 309,767,947.00.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(19) Intangible assets

Land use rights

Purchasedsoftware

Self-developedsoftware

Patents

Trademark rights

Customerrelationships

Others

TotalCost

As at 31 December 2018 4,743,645,037.94

409,761,858.21

1,696,690,578.75

54,960,582.79

255,569,142.46

562,141,621.71

76,077,413.36

7,798,846,235.22Increase in the current period

Business combinations -

12,976,569.15

-

-

-

2,093,073,628.26

-

2,106,050,197.41Transfer from investment properties

(Note 4(16)) 94,397,480.70

-

-

-

-

-

-

94,397,480.70Transfer from capitalised developmentexpenditures (Note 4(20)) -

-

648,471,436.71

-

-

-

23,332,747.27

671,804,183.98Addition 196,048,629.70

36,103,451.42

-

3,077,153.81

360,399.01

-

1,626,982.35

237,216,616.29Decrease in the current period

Transfer to investment properties inthe current period (Note 4(16)) (98,289,203.86)

-

-

-

-

-

-

(98,289,203.86)

Disposal -

(13,454,619.57)

(39,168,290.25)

(42,079,429.53)

(24,440,000.00)

-

(1,314,640.15)

(120,456,979.50)

Effect of translation of foreign currencyfinancial statements 2,986,823.75

110,559.91

-

-

398,984.13

69,821,470.09

-

73,317,837.88As at 30 June 2019 4,938,788,768.23

445,497,819.12

2,305,993,725.21

15,958,307.07

231,888,525.60

2,725,036,720.06

99,722,502.83

10,762,886,368.12

Accumulated amortisation

As at 31 December 2018 329,558,225.50

258,179,090.62

483,295,081.62

32,310,856.99

14,791,777.27

11,988,125.64

6,625,603.69

1,136,748,761.33Increase in the current period

Business combinations -

11,906,100.07

-

-

-

-

-

11,906,100.07Transfer from investment properties(Note 4(16)) 8,148,525.75

-

-

-

-

-

-

8,148,525.75Provision 57,062,495.72

28,453,073.88

198,442,640.18

1,477,465.54

5,984,344.84

57,269,233.10

4,795,575.32

353,484,828.58Decrease in the current period

Transfer to investment properties inthe current period (Note 4(16)) (7,130,087.95)

-

-

-

-

-

-

(7,130,087.95)

Disposal -

(3,316,119.76)

(5,505,347.82)

(30,131,272.19)

(8,757,666.67)

-

(683,926.09)

(48,394,332.53)

Effect of translation of foreign currencyfinancial statements 160,531.37

81,332.76

-

-

96,612.66

878,153.47

-

1,216,630.26As at 30 June 2019 387,799,690.39

295,303,477.57

676,232,373.98

3,657,050.34

12,115,068.10

70,135,512.21

10,737,252.92

1,455,980,425.51

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(19) Intangible assets (Cont’d)

Land use rights

Purchased

software

Self-developedsoftware

Patents

Trademark rights

Customerrelationships

Others

Total

Provision for impairment loss

As at 31 December 2018 -

-

-

-

-

-

-

-Increase in the current period -

-

37,001,101.69

-

-

-

-

37,001,101.69As at 30 June 2019 -

-

37,001,101.69

-

-

-

-

37,001,101.69

Carrying amount

As at 30 June 2019 4,550,989,077.84

150,194,341.55

1,592,760,249.54

12,301,256.73

219,773,457.50

2,654,901,207.85

88,985,249.91

9,269,904,840.92As at 31 December 2018 4,414,086,812.44

151,582,767.59

1,213,395,497.13

22,649,725.80

240,777,365.19

550,153,496.07

69,451,809.67

6,662,097,473.89

For the sixth months ended 30 June 2019, the amount of amortisation expenses charged to cost of revenue, selling and distribution expenses, general andadministrative expenses and research and development expenses was RMB 316,497,477.63 (for the sixth months ended 30 June 2018: RMB164,898,545.05).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(19) Intangible assets (Cont’d)

(a) The Group’s land use rights pledged as collateral for long-term borrowings (Note 4(33)(b)):

30 June 2019

Cost

Accumulatedamortisation

Carrying amount

Land use rights 1,430,182,230.55

(137,815,116.78)

1,292,367,113.77

31 December 2018Cost

Accumulatedamortisation

Carrying amount

Land use rights 1,470,189,474.60

(121,708,372.50)

1,348,481,102.10

(b) As at 30 June 2019, the Group was still in the process of applying for certificates for land use rights

with carrying amount of RMB 222,749,760.19 (cost of RMB 225,924,030.40) (31 December 2018:

carrying amount of RMB 135,510,548.64 and cost of RMB 138,476,438.12).

(c) As at 30 June 2019, the intangible assets developed by the Group accounted for 17.18% (31

December 2018: 18.21%) of the carrying amount of intangible assets.

30 June 201931 December 2018

Carrying amount of self-

developed intangible
assets1,592,760,249.541,213,395,497.13

Carrying amount of intangible assets 9,269,904,840.92 6,662,097,473.89Proportion 17.18% 18.21%

(d) As at 30 June 2019, due to the discontinuation of some self-developed software, the Group made a

provision for impairment loss of RMB 37,001,101.69 upon assessment (31 December 2018: Nil).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(20) Capitalised development expenditures

31 December 2018

Transfer to intangible

assets in the currentperiod (Note 4(19)) 30 June 2019Increase in thecurrent period

Unmanned Aerial Vehicle

Project 87,625,999.63

29,050,983.46

(11,721,070.29)

104,955,912.80CPS 61,169,344.01

84,118,461.52

(103,991,544.02)

41,296,261.51Fengsheng System 20,350,805.38

14,068,188.66

- 34,418,994.04Intelligent hardware R&DProject 18,372,828.56

3,250,052.01

- 21,622,880.57Fengchi Project 66,510,593.38

35,569,681.86

(86,147,917.34)

15,932,357.90Claim Risk Control Project -

13,725,059.40

- 13,725,059.40Big Data Platform -

23,564,278.46

(11,419,461.94)

12,144,816.52Warehousing ManagementSystem 14,028,361.32

2,651,529.48

(5,520,000.00)

11,159,890.80Foundation Revolution System

of Product Operation 24,626,556.68

29,194,685.23

(43,699,511.76)

10,121,730.15Intra-city Express 20,135,507.88

21,539,626.35

(31,751,858.06)

9,923,276.17SAP Settlement Platform

System 2,543,708.66

6,395,092.56

- 8,938,801.22Operation Plan System -

8,067,609.92

- 8,067,609.92Operation and Management

Platform Virtual System 1,608,736.69

4,808,946.17

(4,758,988.88)

1,658,693.98International ExportManagement System 1,608,837.29

77,782.28

(836,320.76)

850,298.81Refrigerated Transport System

Project 15,310,087.42

2,227,992.50

(17,538,079.92)

-Others 251,321,376.87

421,547,127.01

(354,419,431.01)

318,449,072.87585,212,743.77

699,857,096.87

(671,804,183.98)

613,265,656.66

As at 30 June 2019, the Group assessed that no impairment loss should be recognised for researchand capitalised development expenditures.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(21) Goodwill

All of the Group's goodwill has been allocated to the relevant asset group or asset group combination on the date of purchase. The allocation is as follows:

31 December 2018

Increase in the

current period (i)

Decrease in the

currentperiod(i)

Exchange ratechanges in the

current period

current period30 June 2019
Cost:

DHL HK and DHL BJ (Note 5(1)(b)) -

2,886,703,468.48

-

95,081,521.91

2,981,784,990.39

Havi Logistics Services(Hong Kong) Ltd.(“Havi HongKong”)355,135,836.43--630,698.55355,766,534.98
Guangdong Shunxin Express Co., Ltd.(“Guangdong Shunxin”)149,587,124.73-149,587,124.73
Beijing Deda22,702,800.8622,702,800.86
Suzhou HengdingLogistics Co., Ltd.-11,967,426.4011,967,426.40

Chongqing Xuehu Express LLC 10,555,317.54

-

-

-

10,555,317.54

Guizhou Xingcheng Zhaipei Express Co., Ltd.10,199,760.21---10,199,760.21
Sichuan Wulianyida Technology Co., Ltd.4,940,247.254,940,247.25
Chengdu Shunyifeng Pharmaceuticals Co., Ltd.2,434,509.812,434,509.81
Hanxing Industrial Co., Ltd.1,496,979.952,658.541,499,638.49
Xiamen Ruite Information Technology Co., Ltd.(“Xiamen Ruite”)56,502,329.98(56,502,329.98)-
613,554,906.762,898,670,894.88(56,502,329.98)95,714,879.003,551,438,350.66

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(21) Goodwill (Cont'd)

All of the Group's goodwill has been allocated to the relevant asset group or asset group combination on the date of purchase. The allocation is as follows(Cont’d):

31December2018

Increase in the

current period (i)

current period (i)

Decrease in the

current

currentperiod(i

Exchange ratechanges in the

current period

current period

30 June 2019

30 June 2019
Less: Provisions for impairment (Note 4(24))-
Chengdu Shunyifeng Pharmaceuticals Co., Ltd.(2,434,509.81)---(2,434,509.81)
Chongqing Xuehu Express LLC(10,555,317.54)(10,555,317.54)
Guizhou Xingcheng Zhaipei Express Co., Ltd.(10,199,760.21)(10,199,760.21)
(23,189,587.56)(23,189,587.56)
590,365,319.202,898,670,894.88(56,502,329.98)95,714,879.003,528,248,763.10

(i) Increase in goodwill in the current period arose from the acquisition of equity of DHL HK and DHL BJ (Note 5(1)(b)). Decrease in goodwill in the current

period arose from the disposal of equity of Xiamen Ruite (Note 5(3)).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(22) Long-term prepaid expenses

31 December 2018

Increase in thecurrent period

Amortisation in thecurrent period

Decrease in thecurrent period

30 June 2019

Leasehold improvements1,130,323,147.57400,833,641.45(297,235,387.56)(16,703,647.95)1,217,217,753.51
Settlingin allowance and introduction fee for pilots448,064,620.7996,704,833.61(31,913,585.25)(3,632,294.72)509,223,574.43
Prepaid discount interest on interestfree loans to employees45,607,919.26-(8,653,429.72)(373,504.81)36,580,984.73

Others 21,865,499.91

3,599,356.19

(4,643,429.21)

(1,219,132.24)

19,602,294.65

1,645,861,187.53501,137,831.25(342,445,831.74)(21,928,579.72)1,782,624,607.32

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(23) Other non-current assets

30 June 2019

31 December 2018

Prepaid engineering equipment326,610,310.44381,308,573.43

Prepaid land use rights 220,599,226.75

116,653,600.00 547,209,537.19 497,962,173.43

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(24) Provision for asset impairment

31 December
2018

Changes inaccounting policies

(Note 2(31))

(Note 2(31))
1January 2019

Merge undernon-identical

control

control

Provision in the

current period

current period
Decrease in the current period
30 June 2019

Reversal in the

currentperiod

Write-off/

Disposal
Provision for bad debts103,548,417.82-103,548,417.8212,529,871.8392,309,099.17-(23,387,719.96)184,999,668.86

Including: Provision for bad

debts ofaccountsreceivable (Note

4(4))79,456,513.05-79,456,513.0512,524,708.14

79,264,307.29

79,264,307.29-(14,624,394.24)156,621,134.24

Provision for baddebts of otherreceivables

(Note 4(5))12,857,692.63-12,857,692.635,163.69

13,044,791.88

13,044,791.88-(8,409,670.50)17,497,977.70

Provision for baddebts of long-term receivables

(Note 4(12))11,234,212.14-11,234,212.14-

-

--(353,655.22)10,880,556.92

Provision for impairment of

factoring receivables (Note

4(7))9,655,084.16-9,655,084.16-

58,118,407.06

58,118,407.06(5,037,895.29)-62,735,595.93

Provision for impairment of

loans and advances (Note4(8)) 11,158,725.91

- 11,158,725.91

-

3,475,742.51

-

(497,273.25)

14,137,195.17

Provision for impairment of

available-for-sale financial

assets (Note 4(11))

assets (Note 4(11))4,596,187.92(4,596,187.92)--

-

----

Provision for impairment of

long-term equity investments

(Note 4(13))57,596,515.69-57,596,515.69-

17,111,077.45

17,111,077.45--74,707,593.14

Provision for impairment of

intangible assets (Note 4(19))----
37,001,101.69--37,001,101.69

Provision for impairment of

goodwill (Note 4(21)) 23,189,587.56

- 23,189,587.56

-

-

-

-

23,189,587.56

209,744,519.06(4,596,187.92)205,148,331.1412,529,871.83208,015,427.88(5,037,895.29)(23,884,993.21)396,770,742.35

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(25) Short-term borrowings

30 June 2019 31 December 2018

Unsecured borrowings8,595,076,419.046,086,934,848.48

Guaranteed borrowings (a) 1,733,941,500.00

2,498,194,551.1510,329,017,919.04

8,585,129,399.63

(a) As at 30 June 2019, guaranteed borrowings of RMB 1,733,941,500.00 (31 December 2018: RMB

2,498,194,551.15) were guaranteed by subsidiaries within the Group.

(b) As at 30 June 2019, the range of annual interest rate of short-term borrowings was 2.60% to 5.00%

(31 December 2018: 2.74% to 5.30%).

(26) Accounts payable

30 June 2019 31 December 2018

Payables to related parties (Note 8(4)(f)) 135,976,802.99 101,316,142.44Outsourcing cost payable 4,876,443,547.03 4,499,069,987.92

Transportation cost payable1,317,850,101.891,315,973,595.67

Supply and material expenses payable 976,953,620.53 1,029,622,333.02Office and rental fees payable 911,792,568.19 694,987,360.60Customs cost payable 24,227,768.35 21,444,033.53

Others256,569,297.51224,929,376.65
8,499,813,706.497,887,342,829.83

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(26) Accounts payable (Cont’d)

Accounts payable with ageing over 1 year are analysed as follows:

30 June 2019 31 December 2018

Main reason forunsettlement

Transportation costpayable 3,945,106.91 6,872,109.99

No invoice issued

by supplierOffice and rental fees

payable 1,377,602.71 964,421.09

No invoice issued

by supplierSupply and materialexpenses payable 6,579,575.26 3,752,895.47

No invoice issued

by supplierOutsourcing cost

payable 15,131,790.25 1,078,046.50

No invoice issued

by supplierOthers 2,811,607.23 4,062,160.9529,845,682.36 16,729,634.00

(27) Advances from customers

30 June 2019 31 December 2018

Advances from related parties (Note 8(4)(g))

31,522,074.85 21,548,724.88Prepaid value cards 203,900,624.75 203,086,157.63Advances of freight charges and others 429,096,293.95 242,976,408.93664,518,993.55 467,611,291.44

As at 30 June 2019, the Group had no advances from customers with ageing over 1 year (31December 2018: Nil).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(28) Employee benefits payable

30 June 2019

31 December 2018

Short

Short-term employee benefits payable (a)2,493,766,632.492,931,841,446.33

Defined contribution plans payable (b) 33,604,449.53 35,626,116.082,527,371,082.02 2,967,467,562.41

(a) Short-term employee benefits payable

31 December 2018

Increase in thecurrent period

Decrease in thecurrent period 30 June 2019

Wages and salaries,bonus, allowances

and subsidies2,594,559,221.368,419,707,741.91(8,904,912,548.22)2,109,354,415.05

Employee welfare 5,582,944.44 205,799,012.55 (197,499,521.66)

13,882,435.33Social security

contributions

contributions12,071,624.74251,297,874.39(249,605,885.45)13,763,613.68

Including: Medical

insurance10,175,009.26210,659,626.27(209,193,264.74)11,641,370.79

Work injury

insurance578,795.9619,717,093.82(19,793,743.91)502,145.87

Maternity

insurance1,317,819.5220,921,154.30(20,618,876.80)1,620,097.02
Housing funds10,631,685.86123,049,019.35(123,161,826.62)10,518,878.59

Labour union funds and

employee education

funds284,626,306.58128,838,441.51(99,047,183.05)314,417,565.04
Non-monetary welfare5,877,075.79356,028,475.22(357,436,352.65)4,469,198.36

Others 18,492,587.56 352,801,400.10 (343,933,461.22)

27,360,526.44

2,931,841,446.339,837,521,965.03(10,275,596,778.87)2,493,766,632.49

Non-monetary welfare provided by the Group for employees primarily were non-monetary subsidiesin various forms which were measured at fair value.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019

(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(28) Employee benefits payable (Cont'd)

(b) Defined contribution plans

2018

31 December

current period

Increase in the

Decrease in thecurrent period

30 June 2019

Basic pensions

insurance34,208,014.20457,622,115.32(458,972,436.74)32,857,692.78

Unemploymentinsurance 1,418,101.88

21,654,707.41

(22,326,052.54)

746,756.75

35,626,116.08

479,276,822.73

(481,298,489.28)

33,604,449.53

(29) Taxes payable

30 June 2019 31 December 2018

Enterprise income tax payable 543,921,510.23

459,287,640.72Unpaid VAT 154,342,603.66

108,728,116.39Individual income tax payable 45,153,590.13

49,217,965.69City maintenance and construction taxpayable 9,072,426.94

5,929,012.12Educational surcharge payable 6,706,437.22

5,768,817.99Others 20,862,519.75

10,364,428.08780,059,087.93

639,295,980.99

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(30) Other payables

30 June 2019 31 December 2018

Current accounts payable to related parties

(Note 8(4)(g)) 55,921,179.46

20,094,094.27Engineering equipment payable 1,617,086,520.06

1,741,749,484.87Payables of cash on delivery service 1,154,684,729.72

1,377,763,159.38

Deposits payable510,578,434.98464,519,542.36

Warranty deposits payable 135,152,505.64

143,399,194.90Temporary collection payable 75,704,179.64

91,229,288.16Restricted share repurchases payable 59,249,144.83

200,619,019.91Management fee payable 35,095,004.74

-Investments payable 26,710,805.23

113,122,100.23Professional service fee payable 21,994,542.52

8,219,553.21Interest payable -

134,234,622.47

Others272,170,263.92244,687,092.55
3,964,347,310.744,539,637,152.31

Other payables with ageing over 1 year

30 June 2019

31 December 2018

Main reason for

unsettlement

Deposits payable 124,219,334.43

165,847,015.19

Temporarily retained

for continuing business

Engineering

equipmentpayable 37,312,781.07

46,828,801.92

unsettled

Project payment

Warranty deposits

payable 29,830,294.79

37,078,772.04

Warranty in effect

Indemnities from

Indemnities from
insurance company

claims on hold

Others 16,129,943.67

34,022,955.34

and others

207,492,353.96

283,777,544.49

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(31) Current portion of non-current liabilities

30 June 2019 31 December 2018

Current portion of long-term borrowings(Note 4(33)) 388,939,083.61 173,076,233.94Current portion of employee incentives(Note 4(36)) 24,643,718.44 99,901,113.14Current portion of debentures payable(Note 4(34)) 163,439,474.65 -Current portion of long-term payables

(Note 4(35)) 245,474.57 245,474.57577,267,751.27 273,222,821.65

(32) Other current liabilities

30 June 2019

31 December 2018

Super&short term commercial paper

The First Phase of 2018 - 499,729,547.99

The Second Phase of 2018

The Second Phase of 2018510,850,466.33499,649,357.38

The First Phase of 2019 503,305,011.80 -Others 6,532,843.28 -1,020,688,321.41 999,378,905.37

The specific information of the super&short term commercial paper is as follows:

Par valueDate of issue

Period of commercial

paper
Interest
rate

The First Phase

of 2018 500,000,000.00 17 September 2018

270 days

3.21%

The Second

Phase of 2018

500,000,000.00 22 November 2018

270 days

3.60%

The First Phase

of 2019 500,000,000.00 10 April 2019

270 days

3.20%

(33) Long-term borrowings

30 June 2019

31 December 2018

Unsecured borrowings 1,430,567,499.77

9,000,000.00Guaranteed borrowings (a) 3,949,278,501.26

403,799,557.64Secured borrowings (b) 931,274,205.06

758,564,511.496,311,120,206.09

1,171,364,069.13

Less: Current portion of long-term

borrowings (Note 4(31))Unsecured borrowings (201,567,500.00)

(9,000,000.00)

Guaranteed borrowings (105,124,935.77)

(122,576,233.94)

Secured borrowings (82,246,647.84)

(41,500,000.00)

(388,939,083.61)

(173,076,233.94)

5,922,181,122.48

998,287,835.19

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(33) Long-term borrowings (Cont'd)

(a) As at 30 June 2019, the Group's guaranteed borrowings were all guaranteed by the subsidiaries

within the Group. As at 31 December 2018, the Group's guaranteed borrowings of RMB63,799,557.64 was guaranteed by the subsidiaries within the Group, and the guaranteed borrowingsof RMB 340,000,000.00 was guaranteed by Mingde Holdings.

(b) As at 30 June 2019, the secured bank borrowings of RMB 81,600,000.00 (31 December 2018: RMB

86,400,000.00) were secured by the Group’s intangible assets with carrying amount of RMB19,204,680.05 (31 December 2018: Nil), fixed assets with carrying amount of RMB 164,682,362.64(31 December 2018: Nil) and investment properties with carrying amount of RMB 28,931,982.76 (31December 2018: Nil) and were fully guaranteed by Taisen Holdings. The interest is paid quarterly.The principal should be repaid during the period from 22 September 2017 to 23 September 2025 byinstalments.

As at 30 June 2019, the secured bank borrowings of RMB 123,270,000.00 (31 December 2018: RMB101,770,000.00) were secured by the Group’s fixed assets with carrying amount of RMB11,585,501.37 (31 December 2018: construction in progress of RMB 229,810,226.10), investmentproperties with carrying amount of RMB 290,486,938.08 (31 December 2018: Nil) and intangibleassets with carrying amount of RMB 2,409,490.09 (31 December 2018: RMB 60,885,374.67)respectively and were fully guaranteed by Taisen Holdings. The interest is paid quarterly. Theprincipal should be repaid during the period from 19 October 2019 to 20 October 2033 by instalments.

As at 30 June 2019, the secured bank borrowings of RMB 216,000,000.00 (31 December 2018: RMB220,000,000.00) were secured by the Group’s fixed assets with carrying amount of RMB333,917,311.80 (31 December 2018: RMB 342,796,843.43) and intangible assets of RMB38,737,836.24 (31 December 2018: RMB 39,486,373.07) and were fully guaranteed by TaisenHoldings, and S.F. Express Co., Ltd. (hereinafter “S.F. Express”) was the co-borrower. The interestis paid quarterly. The principal should be repaid during the period from 25 July 2016 to 30 July 2023by instalments.

As at 30 June 2019, the secured bank borrowings of RMB 437,971,556.99 (31 December 2018: RMB408,794,511.49) were secured by the Group’s intangible assets with carrying amount of RMB1,227,450,168.41 (31 December 2018: RMB 1,244,458,715.78). The interest is paid quarterly. Theprincipal should be repaid during the period from 18 November 2019 to 18 November 2026 byinstalments.

As at 30 June 2019, the secured bank borrowings of RMB 71,036,000.00 (31 December 2018: Nil)were secured by the Group’s fixed assets with carrying amount of RMB 24,551,046.40 (31 December2018: Nil), intangible assets of RMB 4,564,938.98 (31 December 2018: Nil) and investmentproperties with carrying amount of RMB 177,566,675.90 (31 December 2018: Nil). The interest ispaid quarterly. The principal should be repaid during the period from 20 April 2020 to 18 January2034 by instalments.

In addition, as at 31 December 2018, the secured bank borrowings of RMB 28,000,000.00 weresecured by the Group’s land use rights with carrying amount of RMB 3,650,638.58 and were fullyguaranteed by Taisen Holdings. Such borrowings were repaid in January 2019 in advance.

(c) As at 30 June 2019, the range of annual interest rate of long-term borrowings was 3.43% to 5.39%

(31 December 2018: 3.58% to 5.39%).

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(34) Debentures payable

31 December 2018

Interest accrual

Amortisation ofpremium/discount

Foreignexchange gainsor losses andexchangedifferences ontranslation offoreign currencyfinancialstatements

Current portion ofdebenturespayable (Note4(31))

30 June 2019

The First Debenturesof 2017 (a) 529,610,589.31

17,269,166.73

105,927.24

-

(17,269,166.73)

529,716,516.55

The First Debenturesof 2018 (a) 799,166,867.25

31,364,666.67

153,262.44

-

(31,364,666.67)

799,320,129.69

The SecondDebentures of2018 (a) 669,513,577.98

19,246,866.67

131,235.84

-

(19,246,866.67)

669,644,813.82

Overseas debenturesdenominated inUSD (b) 3,407,199,722.59

60,622,107.88

3,110,016.19

(537,971.52)

(60,622,107.88)

3,409,771,767.26

The First Middle-termNotes of 2018 (c) 999,545,169.27

34,936,666.70

79,710.48

-

(34,936,666.70)

999,624,879.75

6,405,035,926.40

163,439,474.65

3,580,152.19

(537,971.52)

(163,439,474.65)

6,408,078,107.07

CurrencyPar valueDate of issueTermAmount

(equivalent to RMB)

The First Debentures of
2017 (a)RMB530,000,000.0017 October 20175 years530,000,000.00
The First Debentures of
2018 (a)RMB800,000,000.00

From 1 August 2018 to

2 August 20183 years800,000,000.00
The Second Debentures
of 2018 (a)RMB670,000,000.00

From 22 October 2018

to 23 October 20182 +1 years670,000,000.00
Overseas debentures

denominated in USD

(b)USD500,000,000.0027 July 20185years3,407,508,933.00
The First Middle

-term

Notes of 2018 (c)RMB1,000,000,000.0019 September 20183 years1,000,000,000.00

(a) Taisen Holdings was approved to issue corporate debentures of no more than RMB 2 billion (inclusive)

in instalments to the public under the Regulatory Permission [2017] No. 1015 as issued by ChinaSecurities Regulatory Commission. In 2017, Taisen Holdings publicly issued the corporatedebentures (1st instalment) (hereinafter “the First Debentures of 2017”) to qualified investors. Thedebenture interest shall be annually calculated at simple interest rate, and the nominal interest rateis 4.6%, with interest paid annually and the final instalment of interest paid with the principal.

In 2018, Taisen Holdings publicly issued the corporate debentures (1st instalment) (hereinafter “theFirst Debentures of 2018”) to qualified investors. The debenture interest shall be annually calculatedat simple interest rate, and the nominal interest rate is 4.29%, with interest paid annually and thefinal instalment of interest paid with the principal.

In 2018, Taisen Holdings publicly issued the corporate debentures (2nd instalment) (hereinafter “theSecond Debentures of 2018”) to qualified investors. The debenture interest shall be annuallycalculated at simple interest rate, and the nominal interest rate is 4.17%, with interest paid annuallyand the final instalment of interest paid with the principal.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(34) Debentures payable (Cont’d)

(b) On 26 July 2018, S.F. Holding Investment Limited, a wholly-owned subsidiary of the Company, issued

debentures of USD 500 million overseas. The debentures were listed on the Stock Exchange of HongKong Limited on 27 July 2018. The nominal interest rate is 4.125% per annum, and the interest ispaid semi-annually, for which the Company provides unconditional and irrevocable cross-borderguarantee.

(c) According to the Notice of Acceptance of Registration issued by the National Association of Financial

Market Institutional Dealers (Zhong Shi Zhu Xie [2017] MTN443), Taisen Holdings’ quota of middle-term notes was RMB 2 billion. On 19 September 2018, Taisen Holdings issued the first middle-termnotes of 2018 (hereinafter “the First Middle-term Notes of 2018”) totalling RMB 1 billion at a nominalinterest rate of 4.46%, with interest paid annually and the final instalment of interest paid with theprincipal.

(35) Long-term payables

30 June 2019 31 December 2018

Long-term advances payable 44,915,616.35 43,935,616.37Long-term payables to China DevelopmentFund Co., Ltd. 20,346,603.34 20,392,825.23Others 40,984,444.92 19,572,058.05Less: Current portion of long-term payables

(Note 4(3)) (245,474.57)

(245,474.57)

106,001,190.04 83,655,025.08

(36) Long-term employee benefits payable

30 June 2019 31 December 2018

Employee incentives 130,251,833.98 205,819,013.16Less: Current portion o

(Note 4(31)) (24,643,718.44)

f employee incentives

(99,901,113.14)

Long-term service bonus 53,035,836.78 36,797,359.69158,643,952.32 142,715,259.71

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(37) Deferred income

31 December 2018

Increase in thecurrent period

Decrease in thecurrent period 30 June 2019

Source

Received government

grants

Governmentgrants (a) 152,944,183.19

46,947,663.33

(16,509,299.54)

183,382,546.98

pending for futurerecognition in income

(a) The government grants related to deferred income in the current period are presented as follows:

Government grants

31 December2018

Grants additionin the currentperiod

Amountrecognised inother income inthe current period

(Note 4(52))

30 June 2019

Related to

assets/income

Related to

Comprehensive pilot program of

Shanghai modern serviceindustry 26,937,433.84

-

(504,792.48)

26,432,641.36

Related to assets

Ancillary grant of infrastructure for

Wuhu E-Commerce IndustrialPark 26,430,374.01

-

(280,625.88)

26,149,748.13

Related to assets

Construction development fund

for Tianjin Project 21,000,000.00

-

(68,416.44)

20,931,583.56

Related to assets

Entity Expansion Fund 7,825,678.33

4,572,700.00

(1,799,517.12)

10,598,861.21

Related to assets

Yancheng Smart E-Commerce

Logistics Park Project 10,221,221.18

-

(108,352.20)

10,112,868.98

Related to assets

Grant for maintenance of aircraftengines 10,195,916.38

-

(283,160.59)

9,912,755.79

Related to assets

Ma'anshan Industrial Park Project

-

7,000,000.00

-

7,000,000.00

Related to assets

Special subsidy for logistics

standardisation from theCommerce Bureau -

6,873,400.00

(63,642.59)

6,809,757.41

Related to assets

Subsidy for new energy vehicles -

7,155,752.54

(670,167.98)

6,485,584.56

Related to assets

Specific subsidy for modern

service industry granted byJinhua Transportation Authority

6,203,438.00

-

(60,007.74)

6,143,430.26

Related to assets

Shenzhen intelligent logistics

project fund -

5,000,000.00

-

5,000,000.00

Related to assets

Yiwu Comprehensive Service

Centre Project 5,342,546.78

-

(413,565.48)

4,928,981.30

Related to assets

Special fund of Shenzhen

industrial design development -

3,000,000.00

-

3,000,000.00

Related to assets

Logistics Project of Yiwu Industrial

Park 2,938,072.85

-

(97,394.70)

2,840,678.15

Related to assets

Tianjin Port Free Trade Zone

supply chain systemconstruction project -

3,098,800.00

(260,661.57)

2,838,138.43

Related to assets

Compensation for land acquisition

of Nanning Distribution Hub 3,168,203.97

-

(432,265.38)

2,735,938.59

Related to assets

Construction subsidy for Taizhou

Shunfeng E-CommerceService Platform 1,199,386.61

-

(206,079.56)

993,307.05

Related to assets

North China Air Express Pivot 1,197,924.62

-

(941,107.20)

256,817.42

Related to assets

Others 30,283,986.62

10,247,010.79

(10,319,542.63)

30,211,454.78

Related to assets

152,944,183.19

46,947,663.33

(16,509,299.54)

183,382,546.98

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(38) Deferred tax assets and deferred tax liabilities

(a) Deferred tax assets before offsetting

30 June 2019

31 December 2018Deductible

temporarydifferences anddeductible tax

losses

Deferred taxassets

Deductibletemporarydifferences anddeductible tax

losses

Deferred tax assets

Deductible losses 2,267,704,531.32

516,121,115.30

2,106,408,366.25

445,292,056.78

Accrued expenses 643,532,634.69

138,037,750.14

477,502,124.17

102,418,612.28

Unrealised profitsfrom internaltransactions 313,689,547.92

78,422,386.98

205,785,722.06

51,446,430.51

Employeeincentives 116,876,127.51

29,219,031.88

105,902,775.73

26,475,693.93

Provision for asset

impairment 229,671,367.81

54,926,249.61

85,859,422.40

20,729,601.03

Deferred income 162,408,138.76

38,591,680.15

152,739,530.39

37,423,690.25

Depreciation and

amortisation

differences

differences268,309,974.5441,532,340.35268,188,022.1354,965,938.00

Share-based

payment 42,002,857.43

8,670,846.15

33,845,759.93

7,221,273.29

Changes in fair

value ofavailable-for-

sale

financial assets -

sale

-

50,328,715.36

12,582,178.84

4,044,195,179.98

905,521,400.56

3,486,560,438.42

758,555,474.91

Including:

Expected to be

recovered withinone year(inclusive)

233,707,569.21

171,522,613.57

Expected to be

recovered afterone year

671,813,831.35

587,032,861.34

905,521,400.56

758,555,474.91

(b) Deductible tax losses and deductible temporary differences that are not recognised as deferred tax

assets are analysed as follows:

30 June 2019 31 December 2018

Deductible tax losses (c)2,553,934,154.601,983,381,113.08

Deductible temporary differences 57,942,744.40

35,779,714.552,611,876,899.00

2,019,160,827.63

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(38) Deferred tax assets and deferred tax liabilities (Cont’d)

(c) The following table shows unrecognised deductible tax losses based on its expiration date:

30 June 201931 December 2018

2019 365,124,698.48

382,184,105.912020 217,346,174.73

207,216,534.82

2021263,641,382.24262,402,324.95

2022 185,639,014.66

209,567,751.032023 and subsequent years 1,522,182,884.49

922,010,396.372,553,934,154.60

1,983,381,113.08

(d) Deferred tax liabilities before offsetting

30 June 2019

31 December 2018

Taxable temporary

differences

Deferred taxliabilities

Taxable temporary

differences

Deferred taxliabilities

Changes in fair value ofother equityinstruments 243,649,970.00

60,912,492.51

-

-Changes in fair value of

other non-currentfinancial assets 16,000,000.00

4,000,000.00

-

-Changes in fair value of

available-for-salefinancial assets -

-

110,043,220.00

27,510,805.00

Changes in fair value

upon reclassificationof remaining equityof Hive BoxTechnology 446,796,225.96

111,699,056.49

446,796,225.96

111,699,056.49

Changes in fair value

upon reclassification

of remaining equity of

Shenzhen FengyiTechnology Co., Ltd.

of remaining equity of("Fengyi Technology")

28,000,000.00

("Fengyi Technology")

7,000,000.00

-

-Depreciation of fixedassets 1,867,783,819.66

466,945,954.90

1,543,907,080.21

350,447,802.47

Appreciation in asset

value arising frombusinesscombination 3,008,978,791.18

701,696,250.10

955,722,159.84

218,485,004.96

Unrealised profits from

internal transactions 13,993,557.08

3,498,389.27

12,163,386.92

3,040,846.73

5,625,202,363.88

1,355,752,143.27

3,068,632,072.93

711,183,515.65

Including:

Expected to be

recovered within oneyear (inclusive)

162,568,980.70

114,632,346.16

Expected to be

recovered after oneyear

1,193,183,162.57

596,551,169.49

1,355,752,143.27

711,183,515.65

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(38) Deferred tax assets and deferred tax liabilities (Cont’d)

(e) The net balances of deferred tax assets and liabilities after offsetting are as follows:

30 June 201931 December 2018

Deferred tax assets - net 721,940,063.72

584,462,905.44

Deferred tax liabilities - net 1,172,170,806.43

537,090,946.18

(39) Share capital

31 December

31 December
2018
Increase in the
currentperiod

Decrease in thecurrent period

(Note9(1))30 June 2019

Ordinary shares

denominated in RMB 4,418,767,258.00

-

(4,181,993.00)

4,414,585,265.00

31 December

2017

31 December

current period

Increase in the

Decrease in thecurrent period

31 December 2018

Ordinary sharesdenominated in

RMB4,411,015,524.007,788,643.00-

4,418,

4,418,804,167.00

(40) Capital reserve

31 December 2018
Increase in the
current period

Decrease in the

current period
30 June 2019
Share premium

- Capital contribution by

shareholders15,768,464,376.95--15,768,464,376.95

- Business combinationsinvolving entitiesunder commoncontrol (76,026,021.35)

-

-

(76,026,021.35)

- Share-based paymentin capitalcontribution byshareholders (Note4(41)) 193,344,979.29

-

(104,584,725.90)

88,760,253.39

Other capital surplus

- Share-based payment

included in capital

reserve (Note 9(2))44,965,842.16

14,581,133.08

14,581,133.08

-

-

59,546,975.24

59,546,975.24
-Others138,869,988.625,959,966.12-144,829,954.74

16,069,619,165.67

20,541,099.20

(104,584,725.90)

15,985,575,538.97

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(40) Capital reserve (Cont’d)

31 December 2017

Increase in the

current period

Decrease in thecurrent period

30 June 2018

Share premium

- Capital contribution by

shareholders15,768,464,376.95--15,768,464,376.95

- Business combinations

involving entities

under common control213,592,671.52-(43,617,193.55)169,975,477.97

- Share-based payment in

capital contribution byshareholders (Note

4(41))-194,466,894.22-194,466,894.22
Other capital surplus

- Share-based payment

included in capitalreserve (Note 9(2)) 419,902.42

23,930,346.08

-

24,350,248.50

-Others104,066,451.6614,094,942.26(23,663,996.34)94,497,397.58
16,086,543,402.55232,492,182.56(67,281,189.89)16,251,754,395.22

(41) Treasury stock

2018

31 December
Increase in the

current period

Decrease in the

current period

30 June 2019

Restricted shares 200,928,467.28

394,996,314.03

(141,663,846.07)

454,260,935.24

31 December

2017

31 December

Increase in the

current period

Increase in the

Decrease in the

current period

Decrease in the

30 June 2018

Restricted shares - 202,255,537.22

-

202,255,537.22

As stated in Note 9(2), ordinary A shares, which were issued by the Company to the incentiverecipients of the restricted shares incentive plan in 2017 and 2018, counted at 7,788,643.00 shareswith raised funds totalling RMB 202,255,537.22, including an increment of share capital of RMB7,788,643.00 and an increment of capital reserve of RMB 194,466,894.22. In addition, therepurchasing obligation is recognised in liabilities (as purchase of treasury stock) at the number ofrestricted shares issued multiplied by the repurchasing price (Note 4(30)).

In 2018, some of the Company’s original incentive recipients resigned and lost their right to receiveincentives, therefore the Company repurchased and cancelled the restricted shares previously heldby these incentive recipients (36,909.00 shares in total) with a deduction from the treasury share ofRMB 1,082,171.88, including a reduction of RMB 36,909.00 in share capital, and RMB 1,045,262.88in capital reserve.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(41) Treasury stock (Cont’d)

As at 3 January 2019, the Company held the 18th session of the fourth Board of Directors, at whichthe Proposal of the Accomplishment of the Unlocking Conditions of the First Post Lock-up Period forthe Restricted Shares for 2017 was reviewed. The Company recognised that the unlocking conditionsfor the first post lock-up period for the restricted shares for 2017 were met, and the treasury stock ofRMB 32,393,334.30 were deducted.In addition, the criteria of the performance assessment for thesecond post lock-up period for the restricted shares incentive plan for 2017 and the first post lock-upperiod for the restricted shares incentive plan for 2018 were not met, therefore the Companyrepurchased and cancelled the restricted shares previously held by these incentive recipients(3,741,407.00 shares in total) during the reporting period with a deduction from the treasury share ofRMB 96,583,654.6, including a reduction of RMB 3,741,407.00 in share capital, and RMB92,842,247.60 in capital reserve.

For the current reporting period, some of the Company’s original incentive recipients resigned andlost their right to receive incentives, therefore the Company repurchased and cancelled the restrictedshares previously held by these incentive recipients (440,586.00 shares in total) with a deductionfrom the treasury share of RMB 12,183,064.30, including a reduction of RMB 440,586.00 in sharecapital, and RMB 11,742,478.30 in capital reserve.

During the reporting period, the Company deducted the treasury stock by RMB 503,792.87 basedon the revocable cash dividends distributed to holders whose restricted shares were expected to beunlocked in the restricted shares incentive plan for 2018.

In addition, as at 31 January 2019, at the 19th session of the fourth Board of Directors, the Proposalof Repurchasing Shares by Centralised Price Bidding was approved. The Company repurchase aportion of corporate shares for employee stock ownership plan or share-based incentive plan throughcentralised price bidding by self-owned funds in a total of 11,010,729.00 shares and treasury stockof RMB 394,996,314.03 was recognised.

(42) Special reserve

31 December

2018

Increase in the

current period

Decrease in the

current period

30 June 2019

Safety reserve -

3,776,493.37

(3,776,493.37)

-

31 December

2017

Increase in the

current period

Decrease in the

current period

30 June 2018

Safety reserve -

2,727,907.70

(2,727,907.70)

-

Pursuant to the Administrative Measures for the Collection and Utilisation of Enterprise Work SafetyFunds (Cai Qi [2012] No. 16) issued by the Ministry of Finance and the State Administration of WorkSafety on 14 February 2012, 1% of the income from the "Common cargo transportation business"which is operated by certain subsidiaries of the Group is appropriated to safety reserve. The safetyreserve is recognised in profit or loss as the "Special reserve" item for the current period. When theaccrued safety reserve is used under the prescribed conditions, it is written off against the originalamount directly.

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(43) Surplus reserve

2018

31 December
Increase in the

current period

Decrease in the

current period

30 June 2019

Statutory surplusreserve 601,132,890.32

-

-

601,132,890.32

2017

31 December
Increase in the

current period

Decrease in the

current period

30 June 2018

Statutory surplusreserve 586,501,527.41

-

-

586,501,527.41

(44) Retained earnings

For the six months ended 30 June2019

2018

Undistributed profits at the end of the prior year 14,960,151,735.98

11,478,728,731.98Add: Net profit attributable to shareholders of the

parent company 3,101,111,638.63

2,209,579,126.20Less: Ordinary share dividends payable (a) (924,735,176.17)

(970,985,880.70)

Transfer from other comprehensive income

to retained earnings (54,334,158.75)

-Retained earnings at the end of the period 17,082,194,039.69

12,717,321,977.48

(a) The Company held shareholders’ meeting on 9 April 2019. On the basis of the total share capital at

the registration date on which the profit distribution plan was implemented less the special sharesrepurchased by the Company, a total of RMB 925,302,561.11 of cash dividends were distributed toall shareholders at RMB 2.10 (including tax) per 10 shares, without bonus shares being given orcapital reserve being converted into the share capital.

During the reporting period, the Company adjusted dividends of ordinary shares by RMB 567,384.94in total (including 2,628,136 shares of the unregistered restricted stock corresponding to commonstock dividends of RMB 551,908.56), based on the restricted shares that were expected not to beunlockable (due to employee resignation or share forfeiture) in the future for the restricted sharesincentive plan for 2018. The adjusted ordinary share dividends payable is RMB 924,735,176.17.

(45) Revenue and cost of revenue

For the six months ended 30 June2019 2018

Revenue from main operations (a) 50,023,101,039.35

42,520,634,130.47Revenue from other operations (b) 51,602,994.50

30,272,624.95Total revenue 50,074,704,033.85

42,550,906,755.42

Cost of revenue from main operations (a) 40,120,963,760.73

34,472,523,685.77Cost of revenue from other operations (b) 31,080,464.00

11,038,458.62Total cost of revenue 40,152,044,224.73 34,483,562,144.39

NOTES TO THE FINANCIAL STATEMENTSFOR THE SIX MONTHS ENDED 30 JUNE 2019(All amounts in RMB Yuan unless otherwise stated)[English translation for reference only]

4 Notes to the consolidated financial statements (Cont’d)

(45) Revenue and cost of revenue (Cont’d)

(a) Revenue and cost of revenue from main operations:

For the six months ended 30 June2019 2018

operations

Revenue from main
Cost of revenue
from main

operations

operations

Revenue from main
Cost of revenue
from main

operations

Express logisticand supplychain 49,479,804,469.27

39,676,010,637.56

42,160,162,854.77

34,214,278,112.75

Sales of goods 253,670,085.55

244,437,355.69

54,768,168.17

54,683,418.92

Others 289,626,484.53

200,515,767.48

305,703,107.53

203,562,154.10

50,023,101,039.35

40,120,963,760.73

42,520,634,130.47

34,472,523,685.77

(b) Revenue and cost of revenue from other operations:

For the six months ended 30 June2019

2018

Revenue fromother operations

Cost of revenue

from otheroperations

Revenue fromother operations

Cost of revenue

from otheroperations

Disposal of

materials 5,366,068.43

3,135,831.83

7,873,198.29

3,839,357.84

Others 46,236,926.07

27,944,632.17

22,399,426.66

7,199,100.78

51,602,994.50

31,080,464.00

30,272,624.95

11,038,458.62

(46) Taxes and surcharges

For the six months ended 30 June 2019

2018

Payment criterion

City maintenance and

construction tax 38,783,027.88

37,811,919.68

Refer to Note 3

Educational

surcharge 28,667,288.45

28,097,637.46

Refer to Note 3

Stamp tax 26,174,629.84

23,936,519.60

Property tax 20,621,947.62

14,519,251.20

Land use tax6,263,679.645,607,928.31

Flood-control project

expenses 117,176.63

347,591.97

Others 377,126.98

175,001.91

121,004,877.04

110,4