Suoxinda : 2020 Interim Report

索 信 达 控 股 有 限 公 司

SUOXINDA HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

Stock code: 3680

Contents

	Page
Corporate Information	2
Financial Highlights	5
Management Discussion and Analysis	6
Corporate Governance and Other Information	15
Interim Condensed Consolidated Statement of Comprehensive Income	22
Interim Condensed Consolidated Statement of Financial Position	23
Interim Condensed Consolidated Statement of Changes in Equity	25
Interim Condensed Consolidated Statement of Cash Flows	26
Notes to the Interim Condensed Consolidated Financial Statements	27

Corporate

Information

Board of Directors
Executive Directors	Mr. Song Hongtao (Chairman of the Board)
	Mr. Wu Xiaohua
	Mr. Lam Chun Hung Stanley
	Ms. Wang Jing
Independent Non-executive	Mr. Tu Xinchun
Directors	Ms. Zhang Yahan
	Dr. Qiao Zhonghua
Chief Executive Officer	Mr. Wu Fu-Shea
Company Secretary	Mr. Wong Tin Yu (ACS, ACIS)
Authorized Representatives	Mr. Lam Chun Hung Stanley
	Mr. Wong Tin Yu
Audit Committee	Mr. Tu Xinchun (Committee Chairman)
	Ms. Zhang Yahan
	Dr. Qiao Zhonghua
Remuneration Committee	Ms. Zhang Yahan (Committee Chairman)
	Mr. Tu Xinchun
	Dr. Qiao Zhonghua
Nomination Committee	Mr. Song Hongtao (Committee Chairman)
	Ms. Zhang Yahan
	Dr. Qiao Zhonghua
Independent Auditor	PricewaterhouseCoopers
	Certified Public Accountants and Registered Public Interest
	Entity Auditor
	22/F, Prince's Building
	Central
	Hong Kong
Compliance Adviser	Essence Corporate Finance (Hong Kong) Limited
	39/F., One Exchange Square
	Central
	Hong Kong

2 Suoxinda Holdings Limited

Corporate

Information

Hong Kong Legal Advisor	Miao & Co.
	(In Association with Han Kun Law Offices)
	Rooms 3901-05, 39/F.
	Edinburgh Tower, The Landmark
	15 Queen's Road Central
	Hong Kong
Registered Office	Cricket Square
	Hutchins Drive
	P.O. Box 2681
	Grand Cayman
	KY1-1111
	Cayman Islands
Principal Place of Business	1301A, Microprofit Building
in the PRC	Hi-Tech Industrial Park
	Nanshan District
	Shenzhen
	the PRC
Principal Place of Business	Level 54, Hopewell Centre
in Hong Kong	183 Queen's Road East
	Hong Kong
Principal Share Registrar and	Conyers Trust Company (Cayman) Limited
Transfer Office in the Cayman	Cricket Square
Islands	Hutchins Drive
	P.O. Box 2681
	Grand Cayman
	KY1-1111
	Cayman Islands
Hong Kong Branch Share Registrar	Tricor Investor Services Limited
and Transfer Office	Level 54, Hopewell Centre
	183 Queen's Road East
	Hong Kong

2020 Interim Report

3

Corporate

Information

Principal Banks	China Construction Bank
	Shenzhen Jinsha Branch
	Shop 137, 1st Floor
	KK ONE Mall
	Jingji Binhe Times Square
	No. 9289 Binhe Avenue
	Futian District, Shenzhen
	the PRC

	China Merchants Bank
	Shenzhen Weisheng Building Branch
	1st Floor, Weisheng Technology Building
	No. 9966 Shennan Road
	Nanshan District, Shenzhen
	the PRC
Website	www.datamargin.com
Stock Code	3680

4 Suoxinda Holdings Limited

Financial

Highlights

Revenue for the six months ended 30 June 2020 (the "Reporting Period") amounted to approximately RMB129,512,000, representing an increase of approximately 48.7% as compared with the corresponding period in 2019 ("1H2019"). This was mainly due to the continued growth of the Group's core businesses with an increase of approximately 64.9% in revenue generating from data solutions business during the Reporting Period as compared with 1H2019.

Gross profit for the Reporting Period amounted to approximately RMB37,750,000, remained relatively stable as compared with 1H2019 (1H2019: RMB37,187,000).

Net loss for the Reporting Period amounted to approximately RMB5,207,000, as compared with net profit of approximately RMB4,026,000 for 1H2019. The change was mainly due to (1) the delay in recognising revenue for certain projects under the impact of the outbreak of the coronavirus disease 2019 ("COVID-19") during the Reporting Period; and (2) increased investment in operation, marketing as well as research and development during the Reporting Period with aims to expand the Group's market scale and improve the core technology competence of the Group.

Basic and diluted loss per share of the Company (the "Share(s)") for the Reporting Period amounted to approximately RMB1.30 cents (1H2019: Basic and diluted earnings per Share approximately RMB1.34 cents).

In this interim report, "we", "us", "our", "Suoxinda" and the "Company" refer to Suoxinda Holdings Limited, and where the context otherwise requires, the Group (being the Company together with its subsidiaries). The English translations of the PRC entities, enterprises and organisation in this report are marked with * and are for identification purposes only.

2020 Interim Report

5

Management Discussion

and Analysis

BUSINESS REVIEW

At the end of 2019, the outbreak of COVID-19 has accelerated the digital transformation of banking industry, which has increasingly shifted from offline to online operation. We promote the development of "contact-less banking" through artificial intelligence ("AI") and big data technologies. To expand our market coverage, we will strive to increase our investment in research and development as well as marketing, thus enabling fintech to turn into productivity, which in return allows more small and micro businesses and individual retailers to enjoy better financial services. Despite the impact of the COVID-19 pandemic, our Group has recorded fast growth in revenue and customer base, as a result of our team expansion, new business development as well as leveraging on our previous business foundation. For the Reporting Period, our Group's overall revenue increased by approximately 48.7% compared to 1H2019, among which, revenue from data solutions business increased by approximately 64.9% compared to 1H2019.

Anchoring in Southern China, Northern China and Eastern China

During the Reporting Period, our Group has achieved almost 100% repurchase rate among financial clients in Southern China. In the Northern China region, we have cooperated with leading banks in intelligent marketing, striving to connect across marketing consulting, marketing operations, data analytics and mining, marketing systems and basic data platforms. Our Group has established a team in Eastern China focusing on expanding business targeting financial institution customers in the Eastern China region leveraging our accumulated solutions through our project experience.

Combining our accumulated expertise in precision marketing and industry experienced talent team, we expanded our precision marketing solutions from the banking sector to securities firms, and co-operated with a large-scale national securities company, Guosen Securities in the Reporting Period. We made breakthrough in terms of our data solution, which established a milestone in our expansion of the securities industry markets, and created a benchmark and replicable case for the market segment of securities industry. At the same time, we also became a partner of China CITIC Bank credit card centre, which enabled us to develop Intelligent marketing products from retail banking business to the market segment of bank credit card, thus further expanding our market coverage and benchmark cases in niche market segments.

Iterating and upgrading our products to expand to city commercial banks and the securities markets

During the Reporting Period, we continued to increase investment in product research and development with a focus on the iteration and upgrade of our Suoxinda Lingxi Intelligent Marketing Platform ("Suoxinda Lingxi"), such as the release of a new generation of product with functions of tag management, user portrait and Cloud of products. The new version greatly improved product performance and supported more data inputs to meet customers' diversified demands.

We successfully entered into a contract with Guosen Securities with respect to Suoxinda Lingxi in the Reporting Period. Leveraging our experience in the banking industry and utilising AI technology, we assist Guosen Securities in realising digital transformation of securities business, which is a benchmark case of digital transformation of securities companies, bringing positive impacts on the securities industry, and marked a milestone. In addition,

6 Suoxinda Holdings Limited

Management Discussion

and Analysis

Suoxinda Lingxi has also been applied in the credit card business. Customers chose Suoxinda Lingxi to further upgrade their self-established marketing platform, in testament to Suoxinda Lingxi's ability to meet the needs of financial customers such as banks for digital transformation in the next three to five years, enabling them to significantly improve the efficiency of customer service. Meanwhile, Suoxinda Lingxi also expanded to city commercial banks to accelerate their digital transformation.

Technological development and intellectual property rights accumulation

Our financial AI laboratory completed the research report on interpretable machine learning, which fully explained the breakthrough progress made by Suoxinda in machine learning and further upgraded our technical capabilities. Meanwhile, we applied for 11 patents during the Reporting Period. We obtained 11 new software copyright certificates.

Strengthening Team Building and Expanding Talent Pool

Despite the COVID-19 pandemic, we have strong confidence and determination for the future opportunities and strategic development of our business. While most of the IT peers froze or even reduced their headcount in the face of challenges brought by the pandemic, we insisted on "Advance Deployment", pro-actively recruiting key talents, with nearly 100 new employees hired in the Reporting Period. Our talent pool expanded rapidly, especially achieved an significant increase in the number of advanced AI talents and experts.

Our Group insists on people-oriented principle and offers a more competitive remuneration system and comprehensive employee welfare plan with reference to the relevant market data after making comparison and investigation so as to provide more guarantees for our employees. Our Group has established ranking system, based on which, we build corresponding performance management system, salary and welfare system, as well as the issued equity incentive plan with the aim to create a high-efficient organisation with consistent values, efficient collaboration, and long-termwin-win results, so as to reshape and upgrade the corporate cultural values.

OUTLOOK

As a result of the COVID-19 pandemic, most on-site services for financial institution customers have been affected and a large number of users were in urgent needs for products and services through online channels, which resulted in a surge of online financial services. This is the best opportunity to promote digitalisation of banks and other financial institutions. The pandemic has prompted many financial institutions to further understand the value of financial technology and provides a clear direction for the financial technologies that can provide customers with the best value in the future. The value of AI technology has been emphasised, which will help financial institutions to achieve electronic business process and online automated service capabilities in a higher degree, including AI customer service, robo-advisors, remote face recognition, online account opening and transactions processing for investment in insurance products, etc. In this regard, the financial service industry can play an important role in supporting social and economic development, people's livelihood and medical care, government affairs, taxation and trade in special circumstances.

2020 Interim Report

7

Management Discussion

and Analysis

In the second half of 2020, we will actively expand our market share in the financial industry by extending our business coverage to securities companies and insurance business segments, and accumulate solutions such as regulatory reporting and user behaviour analysis through our project cases. In addition, our Group will continue to expand the content of cooperation with our existing partners and explore more cooperation opportunities with state-owned banks, joint-stock banks, city commercial banks and rural commercial banks. In particular, following our success in obtaining a key project in the securities market in the Reporting Period, our Group will work with the partners such as cloud platform providers to promote business in the securities market.

Suoxinda and Huawei Cloud have joined forces in launching Suoxinda's customer micro-segmentation model on ModelArts. This model is the first financial marketing model launched on ModelArts. It can innovatively transform structured data into images by collecting and analysing bank data, and then perform deep learning on the images, using deep neural networks to discover more relevant underlying features, while fitting more complex relationships, so as to achieve the purpose of micro-segmentation of customers.

Through data visualisation, we help banks in building more accurate user models, thus assisting them to achieve a breakthrough in the value of data. The technological innovation brought about by this cooperation with Huawei Cloud has integrated the powerful development ecology of Huawei Cloud and the smarter data algorithm of Suoxinda, which lays a foundation for the financial technology industry to explore the connection points among big data, AI and the financial industry in the future, and allows data transformation of the financial industry to become more efficient.

In the future, we plan to continue to expand our service coverage, including the establishment of a branch in Chengdu and the expansion of our team in Southwest China. Moreover, we have also established branches in Xiamen and Suzhou to seize the development opportunities in emerging markets. In addition, we will actively expand and set up fintech research institutes in target cities to carry out industry-research cooperation, and further enhance the technological strengths of our Group.

We will actively expedite the development of new products. On the one hand, we will launch products that are fully built on the advanced applications of our financial AI laboratory in the areas of interpretable machine learning and automated machine learning, including model translator and model automata. On the other hand, we will develop a series of AI big data analysis products by utilising our project accumulation in cooperation with leading banks, including model factory products, model monitoring platform (using AI algorithms to help customers continuously monitor the performance and effect of models), as well as the feature engineering platform and behaviour analysis platform. Furthermore, we will continue to invest in research and development talents, actively cooperate with colleges and universities, expand the number of campus recruitment, and promote the construction of the dynamic culture.

8 Suoxinda Holdings Limited

Management Discussion

and Analysis

FINANCIAL REVIEW

1. Revenue

For the six months ended

30 June

20202019

RMB'000 RMB'000

(Unaudited) (Unaudited)

Revenue
- Data solutions	85,121		51,620
- Sales of hardware and software and related
services as an integrated service	27,849		17,703
- IT maintenance and support services	16,542		17,746
	129,512		87,069

For the Reporting Period, we recorded revenue of approximately RMB129,512,000, representing an increase of approximately 48.7% or approximately RMB42,443,000 as compared with 1H2019. The increase in revenue was mainly due to the continued growth of our core businesses with an increase of approximately 64.9% in revenue generating from data solutions business during the Reporting Period as compared with 1H2019.

Revenue from data solutions was approximately RMB85,121,000, representing an increase of approximately 64.9% or approximately RMB33,501,000 as compared to 1H2019. The increase was mainly due to the provision of data infrastructure services to a major customer for the Reporting Period, the end user of which was a financial institution.

Revenue from sales of hardware and software and related services as an integrated service was approximately RMB27,849,000, representing an increase of approximately 57.3% or approximately RMB10,146,000 as compared to 1H2019.

Revenue from IT maintenance and support services was approximately RMB16,542,000, remained relatively stable as compared to 1H2019.

2. Gross profit and gross profit margin

For the Reporting Period, we recorded a gross profit of approximately RMB37,750,000, remained relatively stable as compared to 1H2019 (1H2019: approximately RMB37,187,000).

The gross profit margin was approximately 29.1% (1H2019: approximately 42.7%).

2020 Interim Report

9

Management Discussion

and Analysis

The main reasons for the lower gross profit margin include: (1) we delayed the delivery of certain self- developed products with high gross profit margin to the second half of 2020 due to the outbreak of COVID-19; and (2) for the Reporting Period, the overall gross profit margin was impacted by a low margin project that provides data infrastructure services to a major customer of the Group. The gross profit margin of this project was approximately 19.4%, and excluding the impact of this project, the overall gross profit margin for the Reporting Period was approximately 34.1%, while the overall gross profit margin for 1H2019 was approximately 35.5%. Excluding the impact of project with low profit margin, the gross profit margin remained relatively stable as compared to 1H2019.

1. Selling expenses
   For the Reporting Period, we recorded an increase of approximately 36.3% or approximately RMB2,305,000 in selling expenses as compared to 1H2019. Selling expenses accounted for approximately 6.7% of our revenue for the Reporting Period, almost the same as 1H2019. The increase in selling expenses was mainly due to the increase in labour costs by approximately RMB2,145,000 as a result of the recruitment of several senior sales and marketing personnel during the Reporting Period to enhance the Group's marketing capabilities.
2. Research and development expenses
   For the Reporting Period, we recorded an increase of approximately 69.9% or approximately RMB5,688,000 in research and development expenses over 1H2019. Such expenses accounting for approximately 10.7% of our revenue (1H2019: accounting for approximately 9.3% of our revenue). The increase in research and development expenses was mainly attributable to the Group's continuous recruitment of sophisticated and skilful technicians to expand our research and development team during the Reporting Period. The employee benefit expenses of research and development team increased by approximately RMB4,445,000 over 1H2019.
3. Administrative expenses
   For the Reporting Period, we recorded an increase of approximately 26.6% or approximately RMB4,892,000 in administrative expenses over 1H2019. Excluding the listing expenses of approximately RMB7,386,000 and share-based payment of approximately RMB2,430,000 in 2019, the administrative expenses increased by approximately 170.9% or approximately RMB14,708,000 over 1H2019. The increase in administrative expenses was mainly because: (1) office rent increased by approximately RMB1,958,000; (2) provision for impairment of trade receivables and contract assets increased by approximately RMB2,480,000; (3) employee benefit expenses for administrative employees increased by approximately RMB5,840,000; and
4. 1. consulting service fee expenses increased by approximately RMB2,430,000.
5. Income tax expenses
   For the Reporting Period, our total income tax expenses amounted to approximately RMB185,000, representing a decrease of approximately RMB599,000 as compared with 1H2019. The decrease in income tax expenses was mainly due to the decrease in the profit before tax for the Reporting Period.

10 Suoxinda Holdings Limited

Management Discussion

and Analysis

1. Loss for the period
   For the Reporting Period, we recorded a net loss of approximately RMB5,207,000, as compared with net profit of approximately RMB4,026,000 for 1H2019. The change was mainly attributable to: (1) during the Reporting Period, revenue recognition for certain projects were delayed as a result of the impact of the COVID-19 outbreak; and (2) during the Reporting Period, we increased investment in operation, marketing and research and development in order to increase our market share and strengthen the competitiveness of our core technology.
2. Loss for the period attributable to owners of our Company
   The loss for the Reporting Period attributable to owners of our Company was approximately RMB5,207,000 (1H2019: profit of approximately RMB4,026,000). The change was mainly attributable to: (1) during the Reporting Period, revenue recognition for certain projects were delayed as a result of the impact of the COVID-19 outbreak; and (2) during the Reporting Period, we increased investment in operation, marketing and research and development in order to increase our market share and strengthen the competitiveness of our core technology.
3. Loss per Share
   Basic and diluted loss per Share for the Reporting Period amounted to approximately RMB1.30 cents. Basic and diluted earnings per Share for 1H2019 amounted to approximately RMB1.34 cents.
4. Liquidity and financial resources
   The following table provides an overview of our Group's cash flow for the six months ended 30 June
   2020 and 2019:

		Six months ended 30 June
	2020	2019
		RMB'000		RMB'000
		(Unaudited)		(Unaudited)
Net cash outflows to operating activities	79,248	22,362
Net cash outflows to investing activities	33,228	8,853
Net cash inflows from financing activities	4,018	11,507

1. Operating activities
   The net cash used in operating activities for the Reporting Period was approximately RMB79,248,000, representing an increase of approximately RMB56,886,000 as compared with 1H2019. The increase in net cash used in operating activities was mainly due to: (1) less payments were collected for the Reporting Period as a result of the impact of the COVID-19 outbreak; and (2) increased spending in operation, marketing and research and development during the Reporting Period with an aim to expand our market share and improve the competitiveness of our Group's core technology which resulted in more related expenses.

2020 Interim Report 11

Management Discussion

and Analysis

1. Investing activities
   The net cash used in investing activities by our Group for the Reporting Period was approximately RMB33,228,000, representing an increase of approximately RMB24,375,000 as compared with 1H2019. The increase was due to the fixed income products investment conducted by the Group during the Reporting Period for the purpose of increasing the rate of return of its funds that have no immediate use.
2. Financing activities
   The net cash generated from financing activities of our Group for the Reporting Period was approximately RMB4,018,000, as compared with the net cash generated from financing activities of approximately RMB11,507,000 for 1H2019, mainly because there were no other borrowings during the Reporting Period while other borrowings of RMB7,700,000 were drawn down in 1H2019.

11. Capital structure

Bank and other borrowings

As at 30 June 2020, we have short-term fixed rate bank borrowings of approximately RMB61,278,000, short-term other borrowings of approximately RMB8,283,000 and long-term fixed rate other borrowings of approximately RMB2,742,000.

Debt securities

As at 30 June 2020, our Group had no debt securities.

Contingent liabilities

As at 30 June 2020, our Group had no major contingent liabilities or guarantees.

Treasury policy

Our Group has adopted a prudent financial management approach towards our treasury policy. Our Board closely monitors our liquidity position to ensure that the liquidity structure of our assets, liabilities, and other commitments can meet our funding requirements all the time.

Gearing ratio

The gearing ratios as at 30 June 2020 and 31 December 2019 were approximately 35.1% and 31.9% respectively. The increase of gearing ratio was mainly due to increase of approximately RMB5,453,000 or approximately 8.2% in bank and other borrowings at the end of the Reporting Period compared to the beginning of the Reporting Period.

Gearing ratio was calculated based on our total bank and other borrowings as at the end of the year/ period divided by our total equity as at the same date.

12 Suoxinda Holdings Limited

Management Discussion

and Analysis

12. Pledge of assets

As at 30 June 2020, our Group's banking facilities are secured and/or guaranteed by:

1. corporate guarantee from an independent third party of RMB10,000,000 (31 December 2019: RMB8,000,000);
2. buildings of approximately RMB11,936,000 (31 December 2019: approximately RMB12,299,000);
3. pledged bank deposits of approximately RMB4,223,000 (31 December 2019: approximately RMB6,503,000);
4. trade receivables of approximately RMB15,489,000 (31 December 2019: approximately RMB9,404,000); and
5. other deposits of RMB1,000,000 (31 December 2019: approximately RMB800,000).

As at 30 June 2020, our Group's other borrowings are secured by:

1. other deposits of RMB1,200,000 (31 December 2019: approximately RMB1,200,000); and
2. certain equipment of approximately RMB2,691,000 (31 December 2019: approximately RMB3,258,000).

13. Capital Commitments

The Group has certain capital commitments relating to the acquisition of the a property situated at 3rd Floor, Block 2, Haina Centre Phrase I, Guangqiao Avenue No. 1163, Guangming HighTech Park, Guangming New District, Shenzhen, the PRC (the "Haina Property"). The following table sets forth our capital commitments as at the date indicated:

		30 June		31 December
	2020	2019
		RMB'000		RMB'000
Property
- Contracted but not provided for	21,960	21,960

14. Significant investment, material acquisitions and disposal of subsidiaries, associated companies and joint ventures

There were no significant investments or material acquisitions and disposals of subsidiaries, associated companies and joint ventures during the Reporting Period.

2020 Interim Report 13

Management Discussion

and Analysis

1. Foreign exchange risk
   The sales of our Group were mainly settled in RMB, USD and HKD. Operating expenses and purchases were mainly settled in RMB, while some expenses were settled in USD and HKD. As at 30 June 2020, the proceeds received from the Share Offer (as defined below) were denominated in HKD. Therefore, the foreign exchange risk assumed by our Group primarily arises from movements in the HKD and RMB exchange rates. During the Reporting Period, we did not experience any significant difficulties in or impacts on our operations or liquidity due to fluctuations in currency exchange rates. However, future exchange rates of RMB could vary significantly from the current and historical exchange rates as a result of changes in China's political and economic conditions. Our Group implemented an effective management policy to monitor closely changes in foreign exchange rates and review regularly foreign exchange risks. Our Group will consider hedging significant foreign currency exposure when necessary.
2. Future plans for material investments or capital assets
   As disclosed in the prospectus of our Company dated 28 November 2019, our Group has entered into agreements with an independent third party to purchase Haina Property at a consideration of RMB62.0 million. The Haina Property has a gross floor area of 3,098 sq.m. As at 30 June 2020, we have paid RMB40.0 million with respect to the acquisition of Haina Property and the remaining amount of RMB22.0 million has been previously scheduled to be settled in the Reporting Period. However, as agreed between us and the seller, payment of the remaining consideration will be delayed as certain conditions precedent for the completion have not been fulfilled, including passing the Energy Conservation Examination of Fixed- Asset Investment Projects* (固定資產投資項目節能審查). We are cooperating with the seller in carrying out the relevant procedures.
3. Employee and remuneration policy
   Our Group totally had 522 employees in Mainland China and Hong Kong, China as at 30 June 2020. Our Group offers a comprehensive and competitive remuneration, retirement scheme and benefit package to our employees. Discretionary bonus is offered to our staff depending on their performance. Our Group is required to make contribution to a social insurance scheme in the PRC.
   The Directors and senior management of our Group receive compensation in the form of salaries, contributions to pension schemes and other allowances and benefits in kind subject to applicable laws, rules and regulations. The primary goal of the remuneration policy with regard to the remuneration packages of our executive Directors is to enable our Group to retain and motivate executive Directors by linking their compensation with performance as measured against corporate objectives achieved.
   Our Group has neither experienced any significant problems with its employees or disruption to our operations due to labour disputes, nor has experienced any difficulties in the recruitment and retention of experienced staff.

14 Suoxinda Holdings Limited

Corporate Governance and

Other Information

DIRECTORS' AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ITS ASSOCIATED CORPORATIONS

As at 30 June 2020, the interests and short positions of the Directors and the chief executive of the Company in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) (the "SFO")) as recorded in the register required to be kept by the Company pursuant to section 352 of the SFO or as notified to the Company and The Stock Exchange of Hong Kong Limited (the "Stock Exchange") pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 to the Rules Governing the Listing of Securities on the Stock Exchange (the "Listing Rules") were as follows:

		Number	Approximate
	Capacity/	of Shares	% of
Name	Nature of interest	interested(1)	shareholding
Mr. Song Hongtao ("Mr. Song")(2)	Interest in controlled corporation	196,080,000	(L)	49.02%
Mr. Wu Xiaohua ("Mr. Wu")(3)	Interest in controlled corporation	43,590,000	(L)	10.90%
Mr. Lam Chun Hung Stanley	Beneficial owner	1,800,000	(L)	0.45%
Mr. Wu Fu-Shea	Beneficial owner	6,000,000	(L)	1.50%

Notes:

1. The letter "L" denotes a long position in the Shares.
2. These Shares were held by Mindas Touch Global Limited ("Mindas Touch"), which was wholly owned by Mr. Song. Accordingly, Mr. Song was deemed to be interested in these Shares pursuant to Part XV of the SFO.
3. These Shares were held by Ideal Treasure Holdings Limited ("Ideal Treasure"), which was wholly owned by Mr. Wu. Accordingly, Mr. Wu was deemed to be interested in these Shares pursuant to Part XV of the SFO.

Save as disclosed above, as at 30 June 2020, none of the Directors nor the chief executive of the Company had any interests or short positions in any of the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept by the Company pursuant to section 352 of the SFO or as notified to the Company and the Stock Exchange pursuant to the Model Code.

2020 Interim Report 15

Corporate Governance and

Other Information

SUBSTANTIAL SHAREHOLDERS' INTERESTS AND SHORT POSITIONS IN THE COMPANY'S SHARES AND UNDERLYING SHARES

As at 30 June 2020, the following corporations or persons (other than the Directors or the chief executive of the Company) had interests or short positions in the Shares and underlying Shares as recorded in the register required to be kept by the Company under Section 336 of the SFO:

		Number	Approximate
	Capacity/	of Shares	% of
Name	Nature of interest	interested(1)	shareholding
Mindas Touch(2)	Beneficial owner	196,080,000	(L)	49.02%
Ms. Huang Liming ("Ms. Huang")(3)	Interest of spouse	196,080,000	(L)	49.02%
Ideal Treasure(4)	Beneficial owner	43,590,000	(L)	10.90%
Ms. Chi Xianfang ("Ms. Chi")(5)	Interest of spouse	43,590,000	(L)	10.90%
Thousand Thrive Investments	Beneficial owner	34,020,000	(L)	8.50%
Limited ("Thousand Thrive")(6)
Ms. Liu Qin ("Ms. Liu")(6)	Interest in controlled corporation	34,020,000	(L)	8.50%
Mr. Fan Yuehua ("Mr. Fan")(7)	Interest of spouse	34,020,000	(L)	8.50%

Notes:

1. The letter "L" denotes a long position in the Shares.
2. The above interest is also disclosed as the interest of Mr. Song in the paragraph headed "Directors' and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company or its Associated Corporations".
3. Ms. Huang is the spouse of Mr. Song. Pursuant to Part XV of the SFO, Ms. Huang is deemed to be interested in the same number of Shares in which Mr. Song was interested.
4. The above interest is also disclosed as the interest of Mr. Wu in the paragraph headed "Directors' and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company or its Associated Corporations".
5. Ms. Chi is the spouse of Mr. Wu. Pursuant to Part XV of the SFO, Ms. Chi is deemed to be interested in the same number of Shares in which Mr. Wu was interested.
6. As at 30 June 2020, Thousand Thrive was owned as to 37.04% by Ms. Liu, 20.54% by Ms. Wang Jing (an executive Director), 15.50% by Ms. Wei Huijuan, 12.01% by Mr. Chen Liang and 14.91% by Ms. Zhu Shuang. Pursuant to Part XV of the SFO, Ms. Liu was deemed to be interested in the Shares held by Thousand Thrive.
7. Mr. Fan is the spouse of Ms. Liu. Pursuant to Part XV of the SFO, Mr. Fan is deemed to be interested in the same number of Shares in which Ms. Liu was interested.

16 Suoxinda Holdings Limited

Corporate Governance and

Other Information

Save as disclosed above, as at 30 June 2020, no person, other than the Directors or the chief executive whose interests are set out in the section headed "Directors' and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company or its Associated Corporations" above, has an interest or a short position in the Shares or underlying Shares as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO.

EQUITY INCENTIVE PLAN

1. share option scheme (the "Share Option Scheme") and a share award scheme (the "Share Award Scheme") were adopted at the annual general meeting of the Company held on 8 June 2020. The Share Option Scheme is a share incentive scheme prepared in accordance with Chapter 17 of the Listing Rules. The purposes of the Share Option Scheme and the Share Award Scheme are to recognise and motivate the contribution of the eligible participants and to provide incentives and help the Group in retaining its existing employees and recruiting additional employees and to provide them with a direct economic interest in attaining the long-term business objectives of the Group.

As at 30 June 2020, no share option had been granted or agreed to be granted pursuant to the Share Option Scheme, and thus no options had been exercised, cancelled or lapsed under the Share Option Scheme. As a result, the total number of Shares available for issue under the Share Option Scheme was 40,000,000 Shares, representing 10% of the total Shares in issue as at the date of this interim report.

The Share Award Scheme is administrated by the Board. As at 30 June 2020, no Shares had been awarded or agreed to be awarded pursuant to the Share Award Scheme. As a result, the total number of Shares available for grant under the Share Award Scheme was 20,000,000 Shares, representing 5% of the total Shares in issue as at the date of this interim report. No trustee has been appointed as at the date of this interim report.

CONNECTED TRANSACTIONS, CONTINUING CONNECTED TRANSACTIONS AND RELATED PARTY TRANSACTIONS

During the Reporting Period, the Group did not enter into any connected transaction or continuing connected transaction which is required to comply with any of the reporting, announcement or independent shareholders' approval requirements under Chapter 14A of the Listing Rules. Details of the related party transactions undertaken by the Group are set out in note 22 to the interim condensed consolidated financial statements. The Directors consider that those related party transactions did not constitute a connected transaction or a continuing connected transaction pursuant to Chapter 14A of the Listing Rules.

BANK LOANS AND OTHER BORROWINGS

Details of the bank loans and borrowings of the Group as at 30 June 2020 are set out in note 20 to the interim condensed consolidated financial statements.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

Neither the Company, nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the Reporting Period.

2020 Interim Report 17

Corporate Governance and

Other Information

ISSUANCE OF EQUITY SECURITIES FOR CASH

The Company did not issue for cash any equity securities (including securities convertible into equity securities during the Reporting Period.

USE OF PROCEEDS FROM THE SHARE OFFER

The Shares of the Company were listed on the Stock Exchange on 13 December 2019 by way of share offer (the "Share Offer"). The Company offered 100,000,000 Shares at an offer price of HKD1.50 per Share. According to the Company's annual report for the year ended 31 December 2019 dated 27 April 2020, the actual net proceeds of the Share Offer was approximately HKD104.0 million after deduction of listing expenses (the "Net Proceeds"). Set out below are the status of the use of Net Proceeds from the Share Offer:

											Net Proceeds	Net Proceeds
											to be utilised	to be utilised
								Utilised Net		for the six		for the year
					Allocation	Proceeds as	months ending		ending
		Allocation		of the Net		at 30 June		31 December	31 December
Intended use of the Net Proceeds	percentage		Proceeds	2020	2020	2021
				(HKD million)		(HKD million)		(HKD million)		(HKD million)
Strengthening and expansion of the
Group's data solution offerings through
continuously attracting and retaining high
quality personnel and offering attractive
compensation packages to retain the
Group's employees	20%		20.8	15.7	1.1	4.0
Enhancement of the Group's sales and
marketing efforts including corporate
branding activities	20%		20.8	2.8	7.2	10.8
Development of the financial AI laboratory,
the display centre and office facilities of
the Haina Property in Shenzhen	35%		36.4	2.9	14.9	18.6
Potential strategic acquisition to supplement
the Group's organic growth	15%		15.6		-	8.3	7.3
Working capital and other general corporate
purposes	10%		10.4	10.4		-		-
Total	100%		104.0	31.8	31.5	40.7

The Group utilised approximately HKD15.7 million of the Net Proceeds during the Reporting Period, and expects to utilise approximately HKD1.1 million of the Net Proceeds for the six months ending 31 December 2020, on the strengthening and expansion of the Group's data solution offerings through continuously attracting and retaining high-quality personnel and offering attractive compensation packages to retain the Group's employees, which is in excess to the amount of HKD10.0 million originally allocated for the year ending 31 December 2020. It is because the Group has accelerated its investment in product research and development by recruiting sophisticated and skillful technicians. In particular, during the Reporting Period, we released a new generation

18 Suoxinda Holdings Limited

Corporate Governance and

Other Information

of Suoxinda Lingxi with new functions of tag management, user portrait and Cloud of products. The Directors believe that such acceleration in the utilisation of the Net Proceeds is necessary to expand the Group's market share and improve the competitiveness of its core technology.

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

The Board is committed to achieving good corporate governance standards, and believes that good corporate governance standards are essential in providing a framework for the Group to safeguard the interests of shareholders of the Company, enhance corporate value, formulate its business strategies and policies, and enhance its transparency and accountability.

The Company has adopted the principles and code provisions of the Corporate Governance Code (the "CG Code") contained in Appendix 14 to the Listing Rules as the basis of the Company's corporate governance practices. The Board has reviewed the Company's corporate governance practices and is satisfied that the Company had complied with all the code provisions set out in the CG Code during the Reporting Period.

COMPLIANCE WITH THE MODEL CODE

The Company has adopted the Model Code as set out in Appendix 10 to the Listing Rules as its code of conduct regarding Directors' dealing in the Company's securities. Specific enquiry has been made to all the Directors and the Directors have confirmed that they had complied with the Model Code throughout the Reporting Period.

The Company has also adopted the Model Code as the standard of dealings in the Company's securities by the relevant employees who are likely to possess inside information of the Company and/or its securities. No incident of non-compliance of the Model Code by the employees was noted by the Company during the Reporting Period.

BOARD OF DIRECTORS

The Company is headed by an effective Board which oversees the Group's businesses, strategic decisions and performance and takes decisions objectively in the best interests of the Company.

As at 30 June 2020, the Board comprised four executive Directors, namely Mr. Song Hongtao, Mr. Wu Xiaohua, Mr. Lam Chun Hung Stanley and Ms. Wang Jing; and three independent non-executive Directors, namely Mr. Tu Xinchun, Ms. Zhang Yahan and Dr. Qiao Zhonghua.

The Board's composition had not undergone any changes during the Reporting Period and up to the date of this interim report.

INDEPENDENT NON-EXECUTIVE DIRECTORS

During the Reporting Period, the Board at all times met the requirements of Rule 3.10 and 3.10A of the Listing Rules relating to the appointment of at least three independent non-executive Directors representing one-third of the Board, with one of whom possessing appropriate professional qualifications or accounting or related financial management expertise.

2020 Interim Report 19

Corporate Governance and

Other Information

DIRECTORS' INTERESTS IN TRANSACTIONS, ARRANGEMENTS OR CONTRACTS OF SIGNIFICANCE

No transactions, arrangements or contracts of significance in relation to the Group's business to which the Company or any of its subsidiaries was a party and in which any Director or an entity connected with a Director is or was materially interested, either directly or indirectly, subsisted at the end of the Reporting Period or at any time during the Reporting Period.

CONTROLLING SHAREHOLDERS' CONTRACTS OF SIGNIFICANCE

No contracts of significance have been entered into between the Company or any of its subsidiaries and the controlling shareholders of the Company or any of its subsidiaries subsisted at the end of the Reporting Period or at any time during the Reporting Period.

INTERIM DIVIDEND

The Board did not recommend the payment of an interim dividend for the Reporting Period (1H2019: Nil).

EVENTS AFTER THE REPORTING PERIOD

Disposals of Shares by Controlling Shareholder

On 20 July 2020, Mindas Touch, one of the controlling shareholders of the Company, disposed of (i) an aggregate of 36,000,000 Shares to Benefit Ocean Holdings Limited ("Benefit Ocean"), a company incorporated in the British Virgin Islands with limited liability and wholly-owned by Ms. Xia Liping ("Ms. Xia"); and (ii) an aggregate of 5,000,000 Shares to its sole shareholder, Mr. Song Hongtao (the "Disposal"). Following the completion of the Disposal, Mindas Touch and Mr. Song Hongtao were interested/were deemed to be interested in 38.77% and 40.02% of the Company's issued share capital, respectively; while Benefit Ocean and Ms. Xia were interested/ were deemed to be interested in approximately 10.39% of the Company's issued share capital. Please refer to the Company's announcement published on 20 July 2020 for the details of the Disposal. Saved as disclosed above, there are no other material events of the Group after the Reporting Period up to the date of this interim report.

INTEREST OF COMPLIANCE ADVISER

As notified by Essence Corporate Finance (Hong Kong) Limited ("Essence Corporate Finance"), the Company's compliance advisor, neither Essence Corporate Finance nor any of its directors or employees or associates had any significant interest in the share capital of the Company or any member of the Group (including options or rights to subscribe for such securities) as at 30 June 2020.

SUFFICIENT PUBLIC FLOAT

Based on the information that is publicly available to the Company and to the best knowledge of the Directors, the Company has maintained a sufficient public float for the issued Shares (i.e. at least 25% of the issued Shares being held by the public) as required under the Listing Rules since the Listing Date and up to the date of this interim report.

20 Suoxinda Holdings Limited

Corporate Governance and

Other Information

AUDIT COMMITTEE AND REVIEW OF FINANCIAL INFORMATION

The audit committee of the Company (the "Audit Committee", comprising the existing independent non- executive Directors, namely Mr. Tu Xinchun, Ms. Zhang Yahan and Dr. Qiao Zhonghua) has reviewed the unaudited interim condensed consolidated financial information of the Group for the Reporting Period. The Audit Committee has also discussed with senior management members matters relating to the accounting policies and practices adopted by the Company that the unaudited interim condensed consolidated financial information of the Group have been prepared in accordance with applicable accounting standards and requirements as well as the Listing Rules and that adequate disclosures have been made, and fairly present the financial position and performance of the Group during the Reporting Period.

The interim condensed consolidated financial information of the Group for the Reporting Period has not been audited by the Company's auditor.

DISCLOSURE OF CHANGES OF INFORMATION OF DIRECTORS

There are no changes in the Directors' information required to be disclosed pursuant to Rules 13.51(2) and 13.51B(1) of the Listing Rules since the date of the Company's annual report for the year ended 31 December 2019.

COMPLIANCE WITH RELEVANT LAWS AND REGULATIONS

For the Reporting Period, the Group is not aware of any material non-compliance with any relevant legislation or regulations that materially affect the Group's business and operations.

PUBLICATION OF INTERIM REPORT

This interim report of the Company for the Reporting Period containing all the information required by the Listing Rules is published on the website of the Stock Exchange at www.hkexnews.hk and the website of the Company at www.datamargin.com.

2020 Interim Report 21

Interim Condensed Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2020

			Six months ended 30 June
		2020		2019
	Note		RMB'000		RMB'000
			(Unaudited)		(Unaudited)
Revenue	6	129,512	87,069
Cost of sales	8		(91,762)	(49,882)
Gross profit			37,750			37,187
Selling expenses	8	(8,654)	(6,349)
Administrative expenses	8	(23,260)	(18,368)
Research and development expenses	8	(13,822)	(8,134)
Other income	7	4,032		2,982
Other gains, net	7		896		229
Operating (loss)/profit			(3,058)	7,547
Finance income	9		318			95
Finance costs	9	(2,045)	(2,653)
Finance costs, net	9	(1,727)	(2,558)
Share of loss of an associate		(237)	(179)
(Loss)/profit before income tax		(5,022)	4,810
Income tax expenses	10	(185)	(784)
(Loss)/profit for the period attributable to owners of
the Company		(5,207)	4,026
Attributable to:
	(5,207)
Owners of the Company		4,026
Non-controlling interests			-		-
		(5,207)	4,026
(Loss)/profit for the period		(5,207)	4,026
Other comprehensive income
Items that may be reclassified to profit:
- Currency translation differences		1,451		561
Total comprehensive (loss)/income for the period
attributable to owners of the Company, net of tax		(3,756)	4,587
Total comprehensive (loss)/income for the period
attributable to:		(3,756)
Owners of the Company		4,587
Non-controlling interests			-		-
		(3,756)	4,587
(Loss)/earnings per share for (loss)/profit attributable to
owners of the Company:		(1.30)
Basic and diluted (loss)/earnings per share (RMB cents)	11	1.34

The above interim condensed consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

22 Suoxinda Holdings Limited

Interim Condensed Consolidated Statement of Financial Position

					As at 30 June 2020
			30 June		31 December
		2020		2019
	Note		RMB'000		RMB'000
			(Unaudited)		(Audited)
ASSETS
Non-current assets
Property and equipment	12	18,886		17,178
Intangible assets	12	18,507		19,536
Right-of-use assets	12	8,209		5,651
Investment in an associate		202		440
Prepayments	16	47,271		40,884
Deferred tax asset		479		226
		93,554		83,915
Current assets
Trade receivables	14	76,406		51,240
Contract assets	15	53,462		47,624
Prepayments	16	3,954		1,983
Other financial assets at amortised cost	16	4,191		3,956
Financial assets at fair value through profit or loss	13	28,083			-
Inventories		3		3
Pledged bank deposits		4,223		6,503
Cash and cash equivalents		70,032		178,452
		240,354		289,761
Total assets		333,908		373,676
EQUITY
Equity attributable to the owners of the Company
Share capital	17	3,578		3,578
Other reserves		193,170		191,719
Retained earnings		9,056		14,263
Total equity		205,804		209,560

2020 Interim Report 23

Interim Condensed Consolidated Statement of

Financial Position

As at 30 June 2020

			30 June		31 December
		2020		2019
	Note		RMB'000		RMB'000
			(Unaudited)		(Audited)
LIABILITIES
Non-current liabilities
Lease liabilities	21	5,106		3,605
Other borrowings	20	2,742		6,438
		7,848		10,043
Current liabilities
Trade payables	18	25,515		41,523
Accruals and other payables	19	15,325		29,591
Contract liabilities	15	924		12,789
Current income tax liabilities		6,178		7,967
Lease liabilities	21	2,753		1,791
Bank and other borrowings	20	69,561		60,412
		120,256		154,073
Total liabilities		128,104		164,116
Total equity and liabilities		333,908		373,676

The above interim condensed consolidated statement of financial position should be read in conjunction with the accompanying notes.

24 Suoxinda Holdings Limited

Interim Condensed Consolidated Statement of Changes in Equity

								For the six months ended 30 June 2020
				Attributable to owners of the Company
		Share	Share	Capital	Exchange	Statutory	Retained
		capital	premium	reserve	reserve	reserve	earnings	Total
		RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000	RMB'000
Balance at 1 January 2019 (Audited)		-	-	56,620	194	6,034	13,016	75,864
Comprehensive income
Profit for the period		-	-	-	-	-	4,026	4,026
Other comprehensive income
Currency translation differences		-	-	-	561	-	-	561
Total comprehensive income
for the period		-	-	-	561	-	4,026	4,587
Transaction with owners in their capacity
as owners
Capital contribution to subsidiary by
an equity holder of subsidiary		-	-	4,167	-	-	-	4,167
Share-based compensation - non employee
(Note 8)		-	-	2,432	-	-	-	2,432
		-	-	6,599	-	-	-	6,599
Balance at 30 June 2019 (Unaudited)		-	-	63,219	755	6,034	17,042	87,050
Balance at 1 January 2020 (Audited)	3,578		119,640	63,219	(51)	8,911	14,263	209,560
Comprehensive loss
Loss for the period		-	-	-	-	-	(5,207)	(5,207)
Other comprehensive income
Currency translation differences		-	-	-	1,451	-	-	1,451
Total comprehensive income/(loss)
for the period		-	-	-	1,451	-	(5,207)	(3,756)
Balance at 30 June 2020 (Unaudited)	3,578		119,640	63,219	1,400	8,911	9,056	205,804

The above interim condensed consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

2020 Interim Report 25

Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2020

		Six months ended 30 June
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Unaudited)
Cash flows from operating activities
Cash used in operations	(77,021)	(18,356)
Income tax paid	(2,227)	(4,006)
Net cash used in operating activities	(79,248)	(22,362)
Cash flows from investing activities
Purchase of intangible assets	(1,665)	(870)
Payment for property and equipment	(4,521)	(10,242)
Purchase of short-term investments measured at fair value
through profit or loss	(27,360)	(1,000)
Proceeds from disposal of short-term investments at fair value
through profit or loss		-	3,164
Interests received	318		95
Net cash used in investing activities	(33,228)	(8,853)
Cash flows from financing activities
Interests paid	(2,045)	(2,653)
Decrease in pledged bank deposits and other deposits	2,280		2,615
Capital contribution to a subsidiary by equity holders of a subsidiary		-	4,167
Payment of listing expenses		-	(1,624)
Repayment of lease liabilities	(1,670)	(1,035)
Proceeds from other borrowings		-	7,700
Repayment of other borrowings	(4,435)	(894)
Proceeds from bank borrowings	54,358		51,371
Repayment of bank borrowings	(44,470)	(48,140)
Net cash generated from financing activities	4,018		11,507
Net decrease in cash and cash equivalents	(108,458)	(19,708)
Cash and cash equivalents at beginning of the period	178,452	44,266
Effect of currency translation differences	38		(40)
Cash and cash equivalents at end of the period	70,032		24,518

The above interim condensed consolidated statement of cash flows should be read in conjunction with the accompanying notes.

26 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated Financial Statements

For the six months ended 30 June 2020

1 GENERAL INFORMATION

Suoxinda Holdings Limited (the "Company") is a limited company incorporated in the Cayman Islands on 6 December 2018 as an exempted company. The registered address of the Company is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

The Company is an investment holding company. The Company and its subsidiaries (together, the "Group") are engaged in provision of data solutions, sales of hardware and software and related services as an integrated service, and information technology ("IT") maintenance and support services (the "Listing Business").

Prior to the incorporation of the Company and the completion of the reorganisation (the "Reorganisation"), the Listing Business was mainly carried out by Shenzhen Suoxinda Data Technology Co. Ltd. ("Suoxinda Shenzhen") and its subsidiaries (collectively the "Operating Companies"). Before the completion of the Reorganisation, the Operating Companies were controlled by Mr. SONG Hongtao ("Mr. Song"), who is the ultimate controlling shareholder of the Group. The Reorganisation has been completed on 25 February 2019 and since then, the Company became the holding company of the Operating Companies now comprising the Group.

The Company listed its shares on Main Board of The Stock Exchange of Hong Kong Limited on 13 December 2019 (the "Listing").

The interim condensed consolidated financial information is presented in Renminbi ("RMB"), which is the same as the functional currency of the Company, and all values are rounded to the nearest thousand (RMB'000).

2 BASIS OF PREPARATION

This interim condensed consolidated financial information for the six months ended 30 June 2020 has been prepared in accordance with the International Accounting Standard ("IAS") 34, "Interim financial reporting".

The interim condensed consolidated financial information does not include all the notes normally included in the annual financial statements. Accordingly, this interim condensed consolidated financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2019, which have been prepared in accordance with International Financial Reporting Standards ("IFRSs").

Immediately prior to and after the Reorganisation, the Listing Business was held by the Operating Companies controlled by Mr. Song.

Pursuant to the Reorganisation, the Operating Companies are transferred to and held by the Company. The Company has not been involved in any other business prior to the Reorganisation and does not meet the definition of a business. Accordingly, the Reorganisation has been accounted for as a recapitalisation of a business. The Reorganisation is merely a reorganisation of the Listing Business with no change in management of such business and the ultimate owners of the Listing Business remain the same.

The Group resulting from the Reorganisation is regarded as a continuation of the Group's business under the Operating Companies. The interim condensed consolidated statement of financial position, interim condensed consolidated statement of comprehensive income, interim condensed consolidated statement of changes in equity and interim condensed consolidated statement of cash flows of the Group have been prepared as if the current group structure had been in existence as at 1 January 2019.

2020 Interim Report 27

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

3 SIGNIFICANT ACCOUNTING POLICIES

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2019.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total earnings.

1. New and amended standards adopted by the Group
   A number of new or amended standards became applicable for the current reporting period. The Group did not have to change its accounting policies or make retrospective adjustments as a result of adopting these standards.

IAS 1 and IAS 8 (Amendments)	Definition of	Material
IFRS 3 (Amendments)	Definition of	a Business
IFRS 9, IAS 39 and IFRS 7 (Amendments)	Interest Rate Benchmark Reform
Revised Conceptual Framework	Revised Conceptual Framework for Financial
	Reporting

1. The following new standards, new interpretations and amendments to standards and interpretations have been issued but are not effective for the financial year beginning on 1 January 2020 and have not been early adopted by the Group:

Effective for annual periods beginning on or after

IAS 1 (Amendments)	Classification of Liabilities as Current	1	January 2022
	or Non-current
IAS 16 (Amendments)	Property, Plant and Equipment:	1	January 2022
	Proceeds before intended use
IAS 37 (Amendments)	Onerous Contracts - Cost of	1	January 2022
	Fulfilling a Contract
IFRS 17	Insurance contracts	1	January 2023
IFRS 10 and IAS 28	Sale or contribution of assets	To be determined
(Amendments)	between an investor and its
	associate or joint venture
Annual Improvements to IFRS	Annual Improvements to IFRS	1	January 2022
Standards 2018-2020	Standards 2018-2020

The Group is assessing the full impact of the new standards, new interpretations and amendments to standards and interpretations.

28 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

4 ESTIMATES

The preparation of interim condensed consolidated financial information requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this interim condensed consolidated financial information, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the annual financial statements for the year ended 31 December 2019.

5 FINANCIAL RISK MANAGEMENT

1. Financial risk factors
   The Group's activities expose it to a variety of financial risks, including market risk (including foreign exchange risk and cash flow interest rate risk), credit risk, and liquidity risk. The Group's overall risk management approach focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
   The interim condensed consolidated financial information does not include all financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the Group's annual financial statements as at 31 December 2019.
   There have been no changes in the risk management policies since year ended 31 December 2019.
2. Credit risk
   The credit risk of the Group mainly arises from cash at bank, pledged bank deposits, wealth management products classified as financial asset at fair value through profit or loss, trade receivables, contract assets and other financial assets at amortised cost. The carrying amounts of these balances represent the Group's maximum exposure to credit risk in relation to financial assets.
   To manage risk arising from cash at bank and pledged bank deposits, the Group only transacts with state-owned or reputable financial institutions in the PRC and reputable international financial institutions outside of the PRC. There has been no recent history of default in relation to these financial institutions.
   For wealth management products, the Group has assessed the credit quality of products and regularly monitored the recoverability and performance of products with the counterparty. The directors believed that there is no significant credit risk inherent in the wealth management products.
   To manage risk arising from trade receivables and contract assets, the Group has policies in place to ensure that credit terms are made to counterparties with an appropriate credit history and the management performs ongoing credit evaluations of its counterparties. The credit quality of the customers is assessed, which takes into account their financial position, past experience and other factors. Details of the credit risk assessment is included in Note 14 and Note 15 of the interim condensed consolidated financial information.

2020 Interim Report 29

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

5 FINANCIAL RISK MANAGEMENT (CONTINUED)

1. Credit risk (Continued)
   For other financial assets at amortised cost, the Group has taken into account the historical default experience and the future prospects of the industries and/or considering various external sources of actual and forecast economic information, as appropriate, in estimating the probability of default of each of the other financial assets at amortised cost, as well as the loss upon default in each case. The directors considered that the lifetime expected credit losses allowance is insignificant. Details of the credit risk assessment on other financial assets at amortised cost is included in Note 16 of the interim condensed consolidation financial information.
2. Liquidity risk
   Liquidity risk refers to the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial assets.
   Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents and the availability of funding. Due to the nature of the underlying businesses, the Group's management responsible for treasury function aims to maintain flexibility in funding by keeping sufficient cash and committed banking facilities available.
3. Fair value estimation
   The carrying values of cash and cash equivalents, pledged bank deposits, wealth management products, trade receivables, contract assets, other financial assets at amortised cost, trade payables, accruals and other payables, lease liabilities and bank and other borrowings are a reasonable approximation of their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.
   For the financial assets at fair value through profit or loss, the Group measures its fair value of the financial instruments carried at fair value as at 30 June 2020 by level of the inputs to valuation techniques used to measure fair value. Such inputs are categorised into three levels within a fair value hierarchy as follows:
4. • Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
   • Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
   • Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

As at 30 June 2020, the financial asset at fair value through profit or loss is measured at fair value under level 3 valuation method.

There were no transfers among levels 1, 2 and 3 during the period.

If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

30 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

6 REVENUE AND SEGMENT INFORMATION

		Six months ended 30 June
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Unaudited)
Revenue
- Data solutions	85,121		51,620
- Sales of hardware and software and related services as
an integrated service	27,849		17,703
- IT maintenance and support services	16,542		17,746
	129,512		87,069
Timing of revenue recognition
- At a point in time	27,849		17,703
- Over time	101,663		69,366
	129,512		87,069

The chief operating decision-maker ("CODM") has been identified as the directors of the Group. The directors of the Group regard the Group's business as a single operating segment and review financial information accordingly. As the Group has only one operating segment qualified as reporting segment under IFRS 8 and the information that regularly reviewed by the directors of the Group for the purposes of allocating resources and assessing performance of the operating segment is the consolidated financial information of the Group, no separate segmental analysis is presented in the interim condensed consolidated financial information.

The amounts provided to the directors of the Group with respect to total assets and total liabilities are measured in a manner consistent with that in the interim condensed consolidated statement of financial position.

The Group's revenue by geographical locations (as determined by the area or country in which the Group operates) is analysed as follows:

		Six months ended 30 June
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Unaudited)
The PRC	70,539		81,058
Hong Kong	58,973		6,011
	129,512		87,069

2020 Interim Report 31

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

6 REVENUE AND SEGMENT INFORMATION (CONTINUED)

All the Group's non-current assets are located in the PRC.

For the Group's provision of data solutions and the sales of hardware and software and related services as an integrated service, contracts are for periods of one year or less. For the Group's IT maintenance and support services, the Group bills the amount for each hour of service provided, and therefore, the Group uses "right to invoice" practical expedient to recognise revenue in the amount to which the Group has a right to invoice. As permitted under practical expedient of IFRS 15, the transaction price allocated to these unsatisfied contracts are not disclosed.

7 OTHER INCOME AND OTHER GAINS, NET

An analysis of other income and other gains, net is as follows:
		Six months ended 30 June
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Unaudited)
Other income:
Government grants (Note i)	4,032		2,982
Other gains, net:
Fair value gains on financial assets at fair value through
profit of loss (Note 13)	723		2
Loss on disposal of property and equipment		-	(4)
Gain on early termination of lease		-	234
Others	173		(3)
	896		229

Note:

1. Government grants are mainly related to unconditional government subsidies received by the Group from relevant government bodies for the purpose of giving incentive to enterprises engaging in research and development activities and refund of the value-added-tax ("VAT") under the "immediate refund of VAT levied" policy.

32 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

8	EXPENSES BY NATURE
			Six months ended 30 June
		2020	2019
			RMB'000		RMB'000
			(Unaudited)		(Unaudited)
	Material costs	46,053	12,730
	Employee benefit expenses (including directors' emoluments)	46,097	30,414
	Subcontracting service fee	21,864	16,370
	Listing expenses		-	7,386
	Entertainment and travelling expenses	1,071	1,605
	Amortisation of intangible assets (Note 12)	2,791	2,477
	Expenses related to short-term and low-value leases	1,656	1,349
	Depreciation of right-of-use assets (Note 12)	1,571	1,099
	Promotion expenses	2,619	1,878
	Consulting service fee	2,599		-
	Office expenses	1,728	1,237
	Depreciation of property and equipment (Note 12)	1,256	906
	Other taxes	301	342
	Legal and professional fees	3,932	463
	Provision for impairment of trade receivables (Note 14)	3,178	767
	Provision for impairment of contract assets (Note 15)	69		-
	Share-based compensation - non employee (Note i)		-	2,432
	Others	713	1,278
	Total cost of sales, selling, administrative and research and
	development expenses	137,498	82,733

Note:

1. During the Reorganisation, one investor acquired 6% equity interests of a subsidiary of the Group in January 2019 for a cash consideration of approximately RMB4,167,000. The fair value of the equity interests issued as of the issuance date was above the cash consideration received by RMB2,432,000 and the difference was directly charged to the interim condensed consolidated statement of comprehensive income for the period ended 30 June 2019 given no vesting conditions existed.

2020 Interim Report 33

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

9 FINANCE COSTS, NET

		Six months ended 30 June
	2020	2019
		RMB'000		RMB'000
		(Unaudited)		(Unaudited)
Finance income
- Interest income on bank deposits	318	95
Finance costs
- Interest expense on bank and other borrowings	(1,813)	(2,502)
- Finance charges on lease liabilities	(232)	(151)
	(2,045)	(2,653)
Finance costs, net	(1,727)	(2,558)

10 INCOME TAX EXPENSES

The amount of income tax expenses recorded in the interim condensed consolidated statement of comprehensive income represents:

		Six months ended 30 June
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Unaudited)
Current income tax	(438)	(1,022)
Deferred income tax	253		238
Income tax expenses	(185)	(784)

The Company was incorporated in the Cayman Islands and under the current Cayman Islands tax regime, is not subject to income tax.

For the Company's subsidiaries, income tax is provided on the basis of their profits for statutory financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for income tax purpose. The applicable enterprise income tax rate for Suoxinda Shenzhen and Suoxinda (Beijing) Data Technology Co., Ltd. ("Suoxinda Beijing") was 15% for the six months ended 30 June 2020 (30 June 2019: 15%), as these companies were recognised by relevant PRC authorities as National High and New Technological Enterprise ("NHNTE") and were entitled to a preferential Enterprise Income Tax rate from 2017 to 2020 and 2018 to 2021 respectively. Subsidiaries established in Hong Kong are subject to Hong Kong profits tax at a rate of 16.5% during the period ended 30 June 2020 (30 June 2019: 16.5%).

34 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

11 (LOSS)/EARNINGS PER SHARE

Basic (loss)/earnings per share is calculated by dividing the (loss)/profit attributable to owners of the Company by the weighted average number of ordinary shares issued during the respective periods. In determining the weighted average number of ordinary shares, 300,000,000 shares of the Company, which resulted from the issue and allotment of shares by the Company in connection with the Reorganisation, had been treated as if such shares were issued on 1 January 2019.

		Six months ended 30 June
	2020		2019
		(Unaudited)		(Unaudited)
(Loss)/profit attributable to owners of the Company (RMB'000)	(5,207)	4,026
Weighted average number of ordinary shares in issue
(Number of shares in thousand)	400,000		300,000
Basic and diluted (loss)/earnings per share (RMB cents)	(1.30)	1.34

Diluted (loss)/earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potential dilutive ordinary shares. Potential ordinary shares are dilutive when, and only when, their conversion to ordinary shares would decrease earnings per share or increase loss per share. During the six months ended 30 June 2020, the Group has no potential dilutive ordinary shares (30 June 2019: Same).

2020 Interim Report 35

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

12 PROPERTY AND EQUIPMENT, INTANGIBLE ASSETS AND RIGHT-OF-USE ASSETS

				Unaudited
	Property and	Intangible Right-of-use
		equipment	assets	assets
		RMB'000	RMB'000	RMB'000
Six months ended 30 June 2020
Net book value
Opening amount as at 1 January 2020 (Audited)	17,178		19,536	5,651
Additions	2,964		1,762	4,129
Depreciation and amortisation		(1,256)	(2,791)	(1,571)
Closing amount as at 30 June 2020 (Unaudited)		18,886		18,507	8,209
Six months ended 30 June 2019
Net book value
Opening amount as at 1 January 2019 (Audited)	17,663		20,774	5,521
Additions	242		870	4,373
Depreciation and amortisation	(906)	(2,477)	(1,099)
Disposals	(4)	-	(4,787)
Closing amount as at 30 June 2019 (Unaudited)	16,995		19,167	4,008

13 FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

Short-term investments

• Debt instruments At 1 January Additions
  Fair value change (Note 7) Disposal

Six months ended 30 June

20202019

RMB'000 RMB'000

(Unaudited) (Unaudited)

--

27,3601,000

7232

• (1,002)

28,083-

36 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

14 TRADE RECEIVABLES

Trade receivables analysis is as follows:
		30 June		31 December
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Trade receivables	82,378		54,034
Less: provision for trade receivables	(5,972)	(2,794)
	76,406		51,240

As at 30 June 2020, trade receivables of the Group of approximately RMB15,489,000 have been pledged to certain bank borrowings of the Group (31 December 2019: RMB9,404,000) (Note 20(a)).

Movements on the Group's allowance for impairment of trade receivables are as follows:

		30 June		30 June
	2020	2019
		RMB'000		RMB'000
		(Unaudited)		(Unaudited)
At the beginning of the period	(2,794)	(621)
Provision for doubtful receivables		(3,178)	(767)
At the end of the period		(5,972)	(1,388)

1. The Group allows a credit period of up to 60 days to its customers. The aging analysis of trade receivables based on invoice date is as follows:

				30 June		31 December
			2020		2019
				RMB'000		RMB'000
				(Unaudited)		(Audited)
Up to 3 months	57,165		47,693
3	to 6 months		16,259		3,979
6	months to 1	year	6,701		2,289
Over 1 year		2,253		73
			82,378		54,034

2020 Interim Report 37

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

14 TRADE RECEIVABLES (CONTINUED)

1. The Group applies the simplified approach to provide for expected credit losses prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all trade receivables. To measure the expected credit losses, trade receivables have been grouped based on the days past due. The expected credit losses below also incorporate forward looking information. Financial assets are written off when there is no reasonable expectation of recovery.
   The loss allowance provisions as of 31 December 2019 and 30 June 2020 are determined as follows:

		Up to	3 to 6 6 months	Over
		3 months	months	to 1 year	1 year
	Current	past due	past due	past due	past due	Total
31 December 2019:
Expected loss rate	1%	5%	10%	25%	100%
Gross carrying amount (in thousand)	26,231	17,344	7,547	2,634	278	54,034
Loss allowance provision (in thousand)	262	867	728	659	278	2,794
Net carrying amount (in thousand) (Audited)	25,969	16,477	6,819	1,975	-	51,240
30 June 2020:
Expected loss rate	1%	5%	10%	25%	100%
Gross carrying amount (in thousand)	41,697	10,569	18,800	10,888	424	82,378
Loss allowance provision (in thousand)	417	528	1,880	2,723	424	5,972
Net carrying amount (in thousand)
(Unaudited)	41,280	10,041	16,920	8,165	-	76,406

Expected credit losses rates were determined based on the cash collection performance for customers with respect to the credit terms granted to each customer and also taking into account the forward looking information. The cash collection patterns are affected by a number of factors including but not limited to the change in customer portfolios of the Group, the effort of cash collection from the customers, the timing of settlement processes by customers of the Group etc.

38 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

15 CONTRACT ASSETS/(LIABILITIES)

Contract assets/(liabilities) analysis is as follows:
		30 June		31 December
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Contract assets	57,056		51,149
Less: provision for contract assets		(3,594)	(3,525)
		53,462			47,624
Contract liabilities	(924)	(12,789)

Movements on the Group's allowance for impairment of contract assets are as follows:

		30 June		30 June
	2020	2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
At the beginning of the period	(3,525)		-
Provision for doubtful receivables	(69)		-
At the end of the period	(3,594)		-

The contract assets are primarily related to the Group's rights to consideration for work completed and not billed because the rights are conditional on the Group's future performance in achieving specified milestones at the reporting date. The contract assets are transferred to trade receivables when the rights become unconditional. The Group typically reclassifies contract assets to trade receivables on the date of acceptance reports issued by the customers when such right of collections becomes unconditional other than the passage of time.

The contract assets relate to unbilled work in progress. Except for an individual customer with contract asset amounted to RMB3,051,000 (30 June 2019: Nil) has been fully provided in view of increase in credit risk, the remaining balances substantially have the same risk characteristics as the trade receivables. As at 30 June 2020, the Group has recognised impairment on contract assets of RMB3,594,000 (30 June 2019: Nil).

2020 Interim Report 39

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

16 PREPAYMENTS AND OTHER FINANCIAL ASSETS AT AMORTISED COST

		30 June		31 December
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Prepayments
Prepaid expenses	2,130		1,983
Prepayment for property and equipment - property (Note i)	40,000		40,000
Prepayment for property and equipment - others	2,711		884
Prepayment for consultancy service	6,384			-
	51,225		42,867
Less: portion classified as non-current assets	(47,271)	(40,884)
	3,954		1,983
Other financial assets at amortised cost
Utilities and other deposits (Note ii)	3,824		3,667
Other receivables	367		289
	4,191		3,956

Notes:

1. The non-current prepayment for property as at 30 June 2020 and 31 December 2019 included a property in Shenzhen, the PRC, of RMB40,000,000. The total consideration for the property was amounted to RMB61,960,000 and the transaction is expected to be completed in 2020.
2. The other deposits comprise pledged deposits of approximately RMB1,000,000 (31 December 2019: RMB800,000) and
   RMB1,200,000 (31 December 2019: Same) which are pledged for the bank borrowings of RMB9,600,000 (31 December 2019:
   RMB5,300,000) (Note 20(a)) and other borrowings of RMB11,025,000 (31 December 2019: RMB15,460,000) (Note 20(b)), respectively.

40 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

17 SHARE CAPITAL

		Number of	Nominal value
		ordinary		of ordinary
		shares		shares
	Note			RMB'000
Issued and fully paid:
As at 31 December 2019, 1 January 2019 and
30 June 2019		10,000		-
As at 31 December 2019, 1 January 2020 and
30 June 2020	(i)	400,000,000	3,578

Notes:

1. On 15 November 2019, the Company increased the authorised shares from 38,000,000 to 2,000,000,000 by creating a further of 1,962,000,000 shares. On the same day, the Company issued and allotted 299,990,000 shares of HKD0.01 each of the Company to its respective shareholders and credited against share premium.
   In connection with the Company's listing on Main Board of The Stock Exchange of Hong Kong Limited on 13 December 2019, 100,000,000 new ordinary shares of HKD0.01 each were issued at a price of HKD1.5 per share for a total consideration (before share issuance expenses) of approximately RMB134,619,000.

18 TRADE PAYABLES

Trade payables analysis is as follows:
		30 June		31 December
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Trade payables		25,515		41,523
The aging analysis of the trade payables based on invoice dates is as follows:
		30 June		31 December
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
0 to 30 days	21,762		40,698
31 to 60 days	112		147
61 to 90 days	116		631
Over 90 days	3,525		47
	25,515		41,523

2020 Interim Report 41

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

19 ACCRUALS AND OTHER PAYABLES

		30 June		31 December
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Accrued salaries and wages	8,696		12,126
Other tax payables	5,126		5,839
Accrued listing expenses		-	3,248
Other payables for purchase of equipment and intangible assets	367		4,716
Others	1,136		3,662
	15,325		29,591

The carrying amounts of the accruals and other payables (excluding non-financial liabilities) approximate their fair values as at 30 June 2020 and 31 December 2019.

20 BANK AND OTHER BORROWINGS

		30 June		31 December
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Non-current
Other borrowings (Note (b))	2,742		6,438
	2,742		6,438
Current
Bank borrowings (Note (a))	61,278		51,390
Other borrowings (Note (b))	8,283		9,022
	69,561		60,412
Total	72,303		66,850

42 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

20 BANK AND OTHER BORROWINGS (CONTINUED)

1. Bank borrowings

		30 June		31 December
	2020	2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Interest-bearing bank borrowings	61,278	51,390

The bank loans due for repayment, based on the scheduled repayment dates set out in the loan agreements, are as follows:

		30 June		31 December
	2020	2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Within 1 year	61,278	51,390

The carrying amounts of the bank borrowings approximate their fair values and are denominated in RMB.

The weighted average interest rate is 5.4% per annum for the period ended 30 June 2020 (31 December 2019: 5.9%).

As at 30 June 2020, the Group had aggregate banking facilities of RMB85,000,000 (31 December 2019: RMB61,474,000) with new bank facilities of RMB30,000,000 entered during the six months ended 30 June 2020. Unused facilities as at the same date amounted to RMB23,722,000 (31 December 2019: RMB10,084,000). The Group's banking facilities are secured and/or guaranteed by:

1. corporate guarantee from an independent third party of RMB10,000,000 as at 30 June 2020 (31 December 2019: RMB8,000,000);
2. buildings of the Group of approximately RMB11,936,000 as at 30 June 2020 (31 December 2019: RMB12,299,000);
3. pledged bank deposits of approximately RMB4,223,000 held at bank as at 30 June 2020 (31 December 2019: RMB6,503,000);

(iv) trade receivables of the Group of	approximately RMB15,489,000 as at 30 June 2020
(31 December 2019: RMB9,404,000)	(Note 14); and

1. other deposits of the Group of RMB1,000,000 as at 30 June 2020 (31 December 2019: RMB800,000) (Note 16).

2020 Interim Report 43

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

20 BANK AND OTHER BORROWINGS (CONTINUED)

1. Other borrowings
   The loan due for repayment, based on the scheduled repayment dates set out in the loan agreements, is as follows:

		30 June		31 December
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Within one year	8,283		9,022
One to two years	2,742		6,438
	11,025		15,460
Less: portion classified as current liabilities	(8,283)	(9,022)
	2,742		6,438

The Group entered into loan agreements dated 11 March 2019 and 7 December 2019 with an independent third party at a principal amount of RMB7,700,000 and RMB10,500,000. The loans bear interest at 8.1% and 5.7% per annum respectively and are denominated in RMB. The loans are repayable in equal monthly instalments and will be settled on 29 March 2021 and 26 December

2021. As at 30 June 2020, the loans are secured by:

1. other deposits of RMB1,200,000 (31 December 2019: Same); and
2. certain equipment of the Group of approximately RMB2,691,000 (31 December 2019: RMB3,258,000).

The carrying amounts of other borrowings approximate their fair values as at 30 June 2020 and 31 December 2019.

44 Suoxinda Holdings Limited

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

21 LEASE LIABILITIES

		30 June		31 December
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Audited)
Within one year	3,150		2,079
One to two years	3,637		2,567
Two to five years	1,703		1,214
Over five years		-		-
Total lease payments		8,490			5,860
Less: future finance charges		(631)	(464)
Total lease liabilities		7,859			5,396
Less: portion classified as current liabilities	(2,753)	(1,791)
	5,106		3,605

The Group leases various office premises under lease agreements. The lease liabilities are denominated in RMB. No arrangement has been entered into for variable lease payments.

The Group's expenses related to short-term and low-value leases of RMB1,656,000 for the period ended 30 June 2020 (30 June 2019: RMB1,349,000) have been recognised in the consolidated statement of comprehensive income.

The total cash outflows for leases including payments of lease liabilities and payments of interest expenses for the period ended 30 June 2020 is RMB1,902,000 (30 June 2019: RMB1,186,000).

2020 Interim Report 45

Notes to the Interim Condensed Consolidated

Financial Statements

For the six months ended 30 June 2020

22 RELATED PARTY BALANCES AND TRANSACTIONS

For the purposes of the interim condensed consolidated financial statements, parties are considered to be related to the Group if the parties have the ability, directly or indirectly, to exercise significant influence over the Group in making financial and operating decisions. Related parties may be individuals (being members of key management personnel, significant shareholders and/or their close family members) or other entities and include entities which are under the significant influence of related parties of the Group where those parties are individuals. Parties are also considered to be related if they are subject to common control.

Name of the related parties	Relationship with the Group
Mr. Song	Chairman, director and controlling shareholder
Mr. Wu Xiaohua ("Mr. Wu")	Director and shareholder
Ms. Huang Liming	Mr. Song's spouse
Ms. Chi Xianfang	Mr. Wu's spouse
Mr. Lam Chun Hung Stanley ("Mr. Lam")	Director
Ms. Wang Jing ("Ms. Wang")	Director
Mr. Wu Fu-Shea	Senior management
Mr. Cao Xinjian	Senior management
Ms. Wei Huijuan	Senior management
Ms. Li Qiongmei	Senior management
Mr. Wang Jialin	Senior management
Ms. Yu Hongcui	Senior management
Ms. Pan Honglian	Senior management
Ms. Shao Ping	Senior management

1. Key management compensation
   The compensation paid or payable to key management for employee services during the year ended
   30 June 2020 and 2019 are shown below:

		Six months ended 30 June
	2020		2019
		RMB'000		RMB'000
		(Unaudited)		(Unaudited)
Salaries, bonuses, fees and allowances	4,028		1,322
Pension costs	87		32
Social security costs and other employee benefits	200		93
	4,315		1,447

23 DIVIDENDS

No dividends have been paid or declared by the Company during the six months ended 30 June 2020 (30 June 2019: Nil).

46 Suoxinda Holdings Limited