Hebei Construction Group Announced 2020 Audited Results

Profit maintained stable under the impact from COVID-19 pandemic

Proposes to Distribute 2020 Final Dividend of RMB 0.14 per Share

Highlights

Revenue amounted to RMB40,150 million,representing a decrease of 2.3% as compared with that of 2019

New contract value was RMB56,621 million,among which 49.0% are from Beijing-Tianjin-Hebei Region.

Net profits amounted to RMB752 million,representing a decrease of 1.4% as compared with that of 2019

Earnings per share amounted to RMB0.43,which remained the same as that of 2019

The Board proposes to distribute final dividend of RMB 0.14 per share (tax inclusive) in cash

Entered into a strategic cooperation agreement with the government of Inner Mongolia Autonomous Region to jointly establish Inner Mongolia Construction Investment Group Limited

Actively cooperated with large state-owned enterprises and central enterprises and entered into strategic cooperation agreements with China Metallurgical Group and Gezhouba Group,respectively

The project of Newly Established Huaneng Shanxi Low-carbon Technology Research and Development Center constructed by the Company won the 2020 Lu Ban Award for Construction Engineering in China

Financial Highlights

Year ended 31 December

RMB'000

2020

2019

Change

Operating revenue

40,149,925

41,077,029

-2.3%

Net profit

752,231

763,123

-1.4%

Net profit margin

1.9%

1.9%

Total comprehensive income attributable to shareholders of the parent

771,928

829,072

-6.9%

Earnings per share

0.43

0.43

HONG KONG,April 21,2021 -- Hebei Construction Group Corporation Limited ("Hebei Construction Group" and its subsidiaries,together,the "Group",stock code: 1727) announced its audited annual results for the year ended 31 December 2020 ("2020"). During the year,facing the significant impact from the COVID-19 pandemic,the Group has maintained stable development. Hebei Construction Group recorded total revenue of RMB40,150 million (2019: RMB41,077 million),representing a decrease of 2.3% year-on-year. Net profits amounted to RMB752 million (2019: RMB763 million),representing a decrease of 1.4% year-on-year.

During the Year,earnings per Share amounted to RMB0.43,which remained the same as that of 2019. The Board proposes to distribute 2020 final dividend of RMB0.14 per share (tax inclusive) in cash.

Business Review

A substantial majority of the Group's revenue is generated from the construction contracting business,which mainly comprises of building construction business,infrastructure construction business and specialized and other construction contracting business. In 2020,new contract value was RMB56,as compared with RMB72,084 million for the corresponding period of last year. The decrease is mainly due to that the pandemic caused certain impact on the volume of business undertaken by the Group in 2020. By region,49.0% of New contract value,which is RMB27,769 million are from theBeijing-Tianjin-Hebei,the rest RMB28,850millionare from other regions.

Building Construction Business

The Group provides construction contracting services for residential,public works,industrial and commercial construction projects.In 2020,the new contract value from the building construction business was RMB40,127 million,compared with RMB49,064 million for the corresponding period of last year. The revenue from building construction business,being the largest revenue contributor to construction contracting business,was RMB25,992 million,decreased by RMB2,707 million for the year as compared with that of 2019,which was mainly due to the fact that the projects undertaken in 2019 and previous years carried out large-scale construction in 2019,which led to less revenue recognized in the current year for projects undertaken in previous years.

Infrastructure Construction Business

The Group provides construction contracting services for municipal and transportation infrastructure projects,including facilities for water supply and treatment,gas and heating,urban pipelines,landscaping,roads,bridges and airport runways. In 2020,the new contract value from the infrastructure construction business was RMB13,011 million,compared with RMB18,159 million for the corresponding period of last year. The revenue from infrastructure construction business was RMB7,854 million,increased by RMB1,167 million for the year as compared to last year,which was mainly due to the fact that the new projects undertaken by the Group in recent years are more quality-oriented with higher gross profit for infrastructure construction projects,thus the Group has undertaken more such projects in recent years,resulting in an upward trend in revenue from the infrastructure construction business of the Group.

Specialized and Other Construction Contracting Business

The Group also undertakes construction contracting projects by leveraging its qualifications and experience in specialized areas such as electrical and mechanical installation and construction of steel structures. In 2020,new contracts from the specialized and other construction contracting business were valued at RMB3,483 million,compared with RMB4,861 million for the corresponding period of the last year. The revenue from specialized and other construction business for 2020 was RMB4,537 million,increased slightly as compared with that of 2019,which was within normal range of business fluctuation without significant overall change.

Strategic cooperation with the government and state-owned enterprises

During the 2020,the Group entered into a strategic cooperation agreement with the government of Inner Mongolia Autonomous Region to jointly establish Inner Mongolia Construction Investment Group Limited,which created a good opportunity for regional business development. Accordingly,the parties will establish a "three-in-one" cooperation platform covering investment in construction sector,infrastructure development and upstream and downstream industries in order to carry out in-depth cooperation in construction of general civil aviation airports,roads and bridges,railways,urban light rails,water conservancy and water supply facilities,underground utility tunnels,new-type urbanization,tourism industry,infrastructure and other major construction projects,thereby jointly promoting the cooperation in developing new energy,ecological construction,hazardous waste transformation and other emerging industries.

The Group also actively cooperated with large state-owned enterprises and central enterprises and entered into strategic cooperation agreements with China Metallurgical Group and Gezhouba Group,respectively. Hebei Construction Group will carry out comprehensive cooperation with the above two state-owned enterprises in the field of transportation,integrated pipeline corridors,new urbanization construction,water diversion,water supply,sewage,and comprehensive water environment management to further integrate resources and achieve complementary synergies.

Well-recognized project quality and science research achievements

The Group attended to each and every detail in the construction process to continuously improve the quality of projects delivered.The Project of Newly Established Huaneng Shanxi Low-carbon Technology Research and Development Center constructed by the Company won the 2020 Lu Ban Award for Construction Engineering in China. In addition,the Group also garnered one "National Quality Project Award" and two "China Construction Project Decoration Awards",two "MOHURD Green Construction Technology Model Projects" and 100 provincial-level quality projects with one project shortlisted for the Lu Ban Award and four projects awarded as the "National Safety Production Standardized Construction Site".

In terms of scientific and technological research and development,the Group received the "Scientific and Technological Progress Award of Hebei Provincial Government",30 "Scientific and Technological Progress Awards for Construction Systems in Hebei Province",11 provincial process methodologies and 211 patents,including seven invention patents. Two of projects were recognized as the key research and development projects of Hebei Province.

Mr. LI Baozhong,Chairman and Executive Director of Hebei Construction Group,said,"Looking forward,the year 2021 is important for the Company to make a good start and lay a solid foundation for implementing the '14th Five-Year Plan'. In 2021,to respond to the opportunities and challenges,we will continue to adhere to the strategy of 'foundation strengthening,business upgrade,further innovation and sustainable development'. Centering on the performance excellence model and focusing on efficiency,we will pursue various goals with information technology and innovative measures,while the Project Department will be guided by the operation manual to provide strong support. With the dual growth drivers of construction segment and diversified operation,we will make a good start and lay a solid foundation in order to fully achieved all the goals under the '14th Five-Year Plan'. Furthermore,we will work closely with the government,financial institutions,central and state-owned enterprises and major property developers to actively explore mutually beneficial cooperation opportunities and create more value."

About Hebei Construction Group Corporation Limited

Hebei Construction Group Corporation Limited was established in 1952 and rooted in Hebei Province for 69 years. It has benefited from the coordinated development of Beijing-Tianjin-Hebei and the construction of Xiong'an New Area. The Group has grown into a leading comprehensive private construction enterprise in China and has been included in the Fortune 500 Chinese Enterprises (2020). The group mainly provides integrated solutions for engineering contracting of building construction and infrastructure projects. According to Frost & Sullivan,Hebei Construction Group is the largest non-state-owned construction contracting company in Beijing-Tianjin-Hebei region and the second largest non-state-owned construction contracting company in China.