Chairman’s Statement

Dear Shareholders,

     The year 2018 under review was really a haunting year. Despite the general growth in the global economy, the development of major economies diverged. They faced various challenges arising from external unfavorable factors such as trade disputes and geopolitics. As one of the major players in the global economy, the Chinese economy faced dual pressure from both external challenges and internal contradictions in the development. However, the Chinese economy showed greater resilience and potential for development in general. By continuously facilitating the implementation of various measures on comprehensive and in-depth reform, the Chinese economy has gradually clarified its future development direction. We believe that the comprehensive promotion of systematic and market-oriented reform is the only way to stimulate long-term economic growth drivers, effectively balance the industrial structure, and benefit all stakeholders in the economy. As a party involved in the reform and opening up of the Chinese economy, we firmly believe that the Central Government is determined, confident and capable of promoting the successful transformation and upgrade of the Chinese economy, thus building up a solid foundation for the long-term healthy economic development, and ultimately realizing the great rejuvenation of the Chinese nation.

     In 2018, the Group continued to adhere to its development vision of “integrating global resources and promoting China’s industries” and the development strategy of “finance + industry with organic and efficient synergy”. By integrating finance with various related industry chain resources, the Group innovated its bundled services, and offered all-rounded support for the long-term development of China’s basic industry customers. The Group achieved remarkable results, thereby successfully meeting all annual targets set by the board of directors (the “Board”) and creating good financial value for shareholders. All of these were attributable to the valuable support from shareholders throughout the whole year. On behalf of the Board and all staff of the Group, I would like to hereby express our sincere gratitude.

     As of the end of 2018, the Group timely adjusted its operating strategies in line with the market trend, thus achieving faster growth and efficiency improvement. Total assets exceeded RMB265.9 billion, representing an increase of approximately 16.9% from the beginning of the year. Throughout the year, profit attributable to ordinary shareholders amounted to approximately RMB3.93 billion, representing a year-on-year increase of approximately 21.6%. At the same time, the asset quality of the Group remained safe and steady, with the rate of non-performing assets of 0.96% and provision coverage rate of over 230%. The general trend remained steady as compared with prior years, with further improvement in the asset return rate.

     During the year 2018 under review, the Board of the Group, which did not let its shareholders down, duly abided by its responsibilities and constantly improved its internal governance standards. In accordance with the requirements of the Corporate Governance Code of the Stock Exchange, the Company convened four regular board meetings in 2018 to review and approve various issues, including the 2017 annual results, the 2018 interim results, the strategic planning report for the next three years, the annual operating budget, the labor cost budget, continuing connected transactions, financing plans, and the granting under the equity incentive plans, upon comprehensive discussion. All decisions made were generally in line with the development needs of the Group and in the interests of all shareholders. At the same time, the professional committees under the Board fully performed their respective rights and responsibilities granted by the Board in various aspects such as the improvement of compensation incentive system of the Company and the facilitation of the implementation of the Company’s development strategy, thus maximizing the protection over interests of all shareholders.

     Looking forward in 2019, there are still uncertainties in the global economy, with different internal and external challenges ahead in different countries. Under the leadership of the Central Government, the Chinese economy will continue to “centering on economic construction”, and strive to maintain a balance between “steady growth” and “structural adjustment”. Traditional industries that are facing overcapacity will face challenges from various aspects, such as regulatory policies, resources allocation and scope for sustainable operations. For those industries, we will adopt prudent avoidance strategy. For basic industries that are closely related to people’s livelihood and urbanization development, they shall have plenty scope for development if they are in line with the overall economic growth and the public expectation of quality life. We will highly focus on those industries and actively participate in relevant investments. Facing both opportunities and challenges ahead, the Group will adhere to its preliminary corporate vision, stay in line with the economic trend in China, focus on basic industries and offer all-rounded services for industry customers, thereby achieving win-win situation. The Group will strive to achieve various annual operating goals set by the Board, and create greater value for all shareholders and all parties of the society.

NING Gaoning
Chairman of the Board
Far East Horizon Limited