– 1 –

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

MIDEA REAL ESTATE HOLDING LIMITED美的置業控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 3990)

ANNUAL RESULTSFOR THE YEAR ENDED 31 DECEMBER 2019

FINANCIAL HIGHLIGHTS

• For theyearended31December2019, revenueamounted toRMB41,138.57million,representinganincreaseof37%ascomparedwithRMB30,119.81millionfortheyearof2018.

• For the year ended 31December 2019, gross profit amounted toRMB13,007.48million, representingan increaseof32%ascomparedwithRMB9,853.92million fortheyearof2018.

• For theyearended31December2019,profitand totalcomprehensive incomefor theyearamounted toRMB4,326.61million, representingan increaseof32%ascomparedwithRMB3,286.87millionfortheyearof2018.

• For theyear ended31December2019, corenetprofit*amounted toRMB4,177.77million, representingan increaseof27%ascomparedwithRMB3,284.39million fortheyearof2018.

• Fortheyearended31December2019,earningspershareattributabletoownersoftheCompanyamounted toRMB3.61, representingan increaseof17%ascomparedwithRMB3.08fortheyearof2018.

• For theyear ended31December2019, contracted salesof theGroupand its jointventuresandassociatesamountedtoapproximatelyRMB101.23billion,representinganincreaseof28.1%ascomparedwithRMB79.0billionfortheyearof2018.

• Asat31December2019, the totalGFAof theGroup’s land reserves reached52.63million squaremetres, comprising278propertydevelopmentprojects, covering59cities in18provincial-leveladministrativedivisionsacrossChina,61ofwhichwereparticipatedthroughjointventuresandassociates.

* Corenetprofit representsprofit excluding thepost-taxgainsarising fromchanges in fairvalueofandtransfertoinvestmentproperties.

–2–

FINAL DIVIDEND

TheBoardhasrecommendedthepaymentofafinaldividendofHK$1.60persharefortheyearended31December2019(2018:HK$1.2253pershare).

Theboardofdirectors (the“Board”or the “Director(s)”)ofMideaRealEstateHoldingLimited (the “Company”) ispleased to announce the audited consolidated resultsof theCompanyand itssubsidiaries (the“Group”) for theyearended31December2019,with thecomparativefiguresfortheyearended31December2018.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Year ended 31 December2019 2018

Note RMB’000 RMB’000

Revenue 3 41,138,570 30,119,811Costofsales 4 (28,131,087) (20,265,888)

Gross profit 13,007,483 9,853,923Otherincomeandgains—net 5 1,137,243 694,814Sellingandmarketingexpenses 4 (2,540,686) (1,533,913)Administrativeexpenses 4 (3,695,200) (2,285,191)Netimpairmentlossesonfinancialassets (5,578) (34,297)

Operating profit 7,903,262 6,695,336

Financeincome 6 206,040 183,097Financecosts 6 (53,956) (127,872)

Financeincome—net 6 152,084 55,225Shareofresultsofjointventuresandassociates 325,362 (93,374)

Profit before income tax 8,380,708 6,657,187Incometaxexpenses 7 (4,054,099) (3,370,318)

Profit for the year 4,326,609 3,286,869

–3–

Year ended 31 December2019 2018

Note RMB’000 RMB’000Profit attributable to:OwnersoftheCompany 4,305,164 3,209,997Non-controllinginterests 21,445 76,872

Total comprehensive income for the year 4,326,609 3,286,869

Total comprehensive income attributable to:OwnersoftheCompany 4,305,164 3,209,997Non-controllinginterests 21,445 76,872

4,326,609 3,286,869

Earnings per share (expressed in RMB per share)

Basic and diluted earnings per share 8 3.61 3.08

–4–

CONSOLIDATED BALANCE SHEET

As at 31 December2019 2018

Note RMB’000 RMB’000

ASSETSNon-current assetsProperty,plantandequipment 1,199,369 836,712Investmentproperties 1,737,291 690,660Landuserights 2 – 456,274Right-of-useassets 2 529,632 –Intangibleassets 146,719 35,084Propertiesunderdevelopment 2,670,275 5,685,753Investmentsinjointventures 6,074,679 1,023,571Investmentsinassociates 4,685,994 841,896Financeleasereceivables 2 26,421 –Deferredincometaxassets 2,333,448 918,603

19,403,828 10,488,553

Current assetsInventories 49,270 8,327Contractassetsandcontractacquisitioncosts 3(a) 1,496,830 1,429,912Propertiesunderdevelopment 142,697,242 103,913,613Completedpropertiesheldforsale 8,767,493 4,384,344Tradeandotherreceivables 10 36,205,754 19,545,931Prepaidtaxes 12,244,457 9,758,793Financialassetsatfairvaluethroughprofitorloss 11 1,913,355 1,256,498Restrictedcash 7,697,191 8,028,121Termdepositswithinitialtermsofoverthreemonths 141,159 3,065,866Cashandcashequivalents 19,097,265 15,439,152

230,310,016 166,830,557

Total assets 249,713,844 177,319,110

–5–

As at 31 December2019 2018

Note RMB’000 RMB’000

EQUITYEquity attributable to the owners of the CompanySharecapitalandpremium 12 9,465,989 8,787,079Otherreserves 1,875,120 1,293,695Retainedearnings 8,308,530 6,076,085

19,649,639 16,156,859

Non-controllinginterests 11,488,654 7,427,577

Total equity 31,138,293 23,584,436

LIABILITIESNon-current liabilitiesCorporatebonds 8,049,059 2,434,318Bankandotherborrowings 37,466,454 30,473,817Leaseliabilities 2 199,662 –Deferredincometaxliabilities 1,548,454 1,560,795

47,263,629 34,468,930

Current liabilitiesContractliabilities 3(b) 84,891,715 55,929,397Corporatebonds 2,437,720 3,499,268Bankandotherborrowings 6,698,484 13,101,903Leaseliabilities 2 49,830 –Tradeandotherpayables 13 71,823,898 43,502,042Currentincometaxliabilities 5,410,275 3,233,134

171,311,922 119,265,744

Total liabilities 218,575,551 153,734,674

Total equity and liabilities 249,713,844 177,319,110

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NOTES

1. BASIS OF PREPARATION

(i) Compliance with Hong Kong Financial Reporting Standards (“HKFRS”) and Hong Kong Companies Ordinance Cap.622 (“HKCO”)

The consolidated financial statements of theGrouphave been prepared in accordancewith allapplicableHKFRSandthedisclosurerequirementsoftheHKCO.

(ii) Historical cost convention

The consolidated financial statements havebeenpreparedon a historical cost basis, except forfinancial assets at fair value throughprofit or loss (financial assets at “FVPL”) and investmentproperties,whicharecarriedatfairvalue.

(iii) New and amended standards adopted by the Group

The following standardshavebeenadoptedby theGroup for the first time for the financialyearbeginningonorafter1January2019:

• HKFRS16Leases• PrepaymentFeatureswithNegativeCompensation—AmendmentstoHKFRS9• Long-termInterestsinAssociatesandJointVentures—AmendmentstoHKAS28• AnnualImprovementstoHKFRSStandards2015—2017Cycle• PlanAmendment,CurtailmentorSettlement—AmendmentstoHKAS19• Interpretation23UncertaintyoverIncomeTaxTreatments.

TheGrouphad tochange itsaccountingpoliciesasa resultofadoptingHKFRS16.TheGrouphasadoptedHKFRS16 retrospectively from1January2019,buthasnot restatedcomparatives for the2018 reportingperiod,aspermittedunder the specific transitionalprovisions in the standard.Thereclassificationsandtheadjustmentsarisingfromthenewleasingrulesarethereforerecognisedintheopeningbalancesheeton1January2019.The impactof theadoptionofHKFRS16 isdisclosed innote2.ExceptforHKFRS16,othernewandamendedstandards listedabovedonothaveamaterialimpactonorarenotrelevanttotheGroup.

(iv) New, revised and amended standards and interpretations not yet adopted

Certainnewand revisedstandards,amendmentsand interpretations toexistingstandardshavebeenpublishedthatarenoteffectiveincurrentyearandhavenotbeenearlyadoptedbytheGroup.

Effective for the financial year

beginning on or after

AmendmentstoHKFRS3 Definitionofabusiness 1January2020AmendmentstoHKAS1andHKAS8 Definitionofmaterial 1January2020RevisedConceptualFrameworkfor FinancialReporting

1January2020

HKAS39,HKFRS7andHKFRS9 Hedgeaccounting(Amendment) 1January2020HKFRS17 Insurancecontracts 1January2021AmendmentstoHKFRS10 andHKAS28

Saleorcontributionofassetsbetween aninvestoranditsassociatesor jointventures

Tobedetermined

–7–

Theabovenewand revisedstandards,amendmentsand interpretations toexistingstandardsareeffectiveforannualperiodsbeginningafter1January2020andhavenotbeenappliedinpreparingtheseconsolidatedfinancial statements.Noneof these isexpected tohavea significanteffecton theconsolidated financialstatementsoftheGroup.

2. CHANGES IN ACCOUNTING POLICIES

ThisnoteexplainstheimpactoftheadoptionofHKFRS16LeasesontheGroup’sfinancialstatements.

TheGrouphasadoptedHKFRS16retrospectivelyfrom1January2019,buthasnotrestatedcomparativesfor the2018 reportingperiod,aspermittedunder thespecific transitionalprovisions in thestandard.Thereclassificationsand theadjustmentsarising from thenew leasing rulesare therefore recognised in theopeningbalancesheeton1January2019.

Adjustments recognised on adoption of HKFRS 16

OnadoptionofHKFRS16,theGrouprecognisedleaseliabilitiesinrelationtoleaseswhichhadpreviouslybeen classified as ‘operating leases’ under theprinciplesofHKAS17Leases.These liabilitiesweremeasuredat thepresentvalueof the remaining leasepayments,discountedusing the lessee’s incrementalborrowingrateasof1January2019.Theweightedaveragelessee’sincrementalborrowingrateappliedtotheleaseliabilitieson1January2019was5.91%.

Practical expedients applied

InapplyingHKFRS16for thefirst time, theGrouphasused thefollowingpracticalexpedientspermittedbythestandard:

• applyingasinglediscountratetoaportfolioofleaseswithreasonablysimilarcharacteristics

• relyingonpreviousassessmentsonwhether leasesareonerousasanalternative toperforminganimpairmentreview—therewerenoonerouscontractsasat1January2019

• accounting foroperating leaseswitha remaining lease termof less than12monthsasat1 January2019asshort-termleases

• excluding initial direct costs for themeasurement of the right-of-use asset at thedate of initialapplication,and

• usinghindsight in determining the lease termwhere the contract contains options to extendorterminatethelease.

TheGrouphasalsoelectednot to reassesswhetheracontract is,orcontainsa leaseat thedateof initialapplication.Instead,forcontractsenteredintobeforethetransitiondatetheGroupreliedonitsassessmentmadeapplyingHKAS17andInterpretation4DeterminingwhetheranArrangementcontainsaLease.

–8–

RMB’000

Discountedusingthelessee’sincrementalborrowingrateofatthedate ofinitialapplication 291,857

Lease liability recognised as at 1 January 2019 291,857

Ofwhichare:Currentleaseliabilities 82,257Non-currentleaseliabilities 209,600

291,857

Lease liability recognised as at 31 December 2019Ofwhichare:Currentleaseliabilities 49,830Non-currentleaseliabilities 199,662

249,492

Right-of-useassetsweremeasuredat theamountequal to the lease liabilities,adjustedby theamountofanyprepaidor accrued leasepayments relating to that lease recognised in thebalance sheet as at 31December2018.Therewerenoonerousleasecontractsthatwouldhaverequiredanadjustmenttotheright-of-useassetsatthedateofinitialapplication.

–9–

Therecognisedright-of-useassetsrelatetothefollowingtypesofassets:

As at 31 December

2019

Asat1January

2019RMB’000 RMB’000

Right-of-useforland(reclassifiedfromthefinancialstatement lineitem“landuserights”) 397,598 456,274Properties 118,257 196,779Motorvehicles 9,244 4,690Others 4,533 4,529

Total right-of-use assets 529,632 662,272

Thechangeinaccountingpolicyaffectedthefollowingitemsintheconsolidatedbalancesheeton1January2019:

RMB’000

Increaseinright-of-useassets 662,272Decreaseinlanduserights (456,274)Increaseininvestmentproperties 58,690Increaseinfinanceleasereceivables 27,169Increaseinleaseliabilities (291,857)

Therewasnoimpactontheretainedearningson1January2019.

3. REVENUE AND SEGMENT INFORMATION

RevenueoftheGroupforeachoftheyearsended31December2019and2018isanalysedasfollows:

Year ended 31 December2019 2018

RMB’000 RMB’000

Propertydevelopmentandsales 40,430,577 29,602,383Propertymanagementservices 485,419 355,002Investmentandoperationofcommercialproperties—Propertyleaseincome 84,809 43,041—Hoteloperation 11,074 11,860—Cultural-tourismproject 126,691 107,525

41,138,570 30,119,811

–10–

Representedby:

Year ended 31 December2019 2018

RMB’000 RMB’000

Revenuefrompropertydevelopmentandsales:—Recognisedatapointintime 28,886,751 19,011,990—Recognisedovertime 11,543,826 10,590,393

40,430,577 29,602,383

Revenuefromrenderingofservices:—Recognisedovertime 623,184 474,387

Revenuefromothersources:—Propertyleaseincome 84,809 43,041

41,138,570 30,119,811

Over95%oftheGroup’srevenueisattributabletothePeople’sRepublicofChina(the“PRC”)marketandover 95%of theGroup’s non-current assets are located in thePRC.Nogeographical information isthereforepresented.

TheGrouphas a largenumberof customers, noneofwhomcontributed10%ormoreof theGroup’srevenue.

(a) Detailsofcontractassetsandcontractacquisitioncosts:

As at 31 December2019 2018

RMB’000 RMB’000

Contractassetsrelatedtopropertydevelopmentandsales(i) 972,568 1,016,658Contractacquisitioncosts(ii) 524,262 413,254

Totalcontractassetsandcontractacquisitioncosts 1,496,830 1,429,912

(i) Contractassets related topropertydevelopmentandsalesconsistofunbilledamount resultingfromsaleofpropertieswhen revenue recognisedover timeexceeds theamountbilled to thepropertypurchasers.Contractassetsarecomparabletothatoflastyear.

(ii) Managementexpects thecontractacquisitioncosts,primarily salecommissionsandstampdutypaid/payable, asa resultofobtaining theproperty salecontractsare recoverable.TheGroupcapitalised these incrementalcostsandamortised themwhen the related revenue is recognised.The amountsof amortisationwereRMB302,669,000 for theyear ended31December2019(2018:RMB213,846,000).Therewasnoimpairmentlossinrelationtothecostscapitalised.

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(b) Contractliabilities

TheGrouprecognisedthefollowingrevenue-relatedcontractliabilities:

As at 31 December2019 2018

RMB’000 RMB’000

Contractliabilities 84,891,715 55,929,397

TheGroup receivespayments fromcustomersbasedonbillingscheduleasestablished incontracts.Paymentsareusually received inadvanceof theperformanceunder thecontractswhicharemainlyfrompropertydevelopmentandsales.The increase incontract liabilitiesduring theyearwasmainlyattributabletotheincreaseintheGroup’scontractedsales.

4. EXPENSES BY NATURE

Expenses included in costof sales, selling andmarketingexpenses andadministrative expenseswereanalysedasfollows:

Year ended 31 December2019 2018

RMB’000 RMB’000

Costofpropertydevelopmentandsales—includingconstructioncost, landcost,capitalisedinterestexpenses 27,114,948 19,504,341Employeebenefitexpenses 2,313,818 1,762,404Marketingandadvertisingexpenses 1,493,447 750,922Write-downsofpropertiesunderdevelopmentand completedpropertiesheldforsale 1,288,388 362,605Amortisationofcontractacquisitioncosts(note 3(a)) 302,669 213,846Bankcharges 221,014 192,576Taxesandsurcharges 378,793 322,340Travellingandentertainmentexpenses 192,935 139,581Officeexpenses 158,569 134,871Professionalservicefees 91,870 111,083—Listingrelatedexpenses(excludingauditfees) – 49,719—Others 91,870 61,364Depreciationandamortisation 208,160 67,790Rentalexpenses – 56,767Auditor’sremuneration 8,125 12,977—Annualauditservices 7,100 4,900—AuditservicesinrelationtotheListing – 8,077—Non-auditservices 1,025 –Propertymanagementfees 9,084 6,772Others 585,153 446,117

Total 34,366,973 24,084,992

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5. OTHER INCOME AND GAINS — NET

Year ended 31 December2019 2018

RMB’000 RMB’000

Other incomeManagementandconsultingserviceincome 204,897 141,785Governmentsubsidyincome 69,791 33,788Compensationincome 311,949 128,541

586,637 304,114

Other gains — netRealisedandunrealisedgainsonfinancialassetsatFVPL 245,832 250,847Gainsarisingfromchangesinfairvalueofandtransferto investmentproperties 198,450 3,306Gainsondisposalofsubsidiaries – 3,657Gainsondisposalofjointventuresandassociates 3,406 925Lossesondisposalofproperty,plantandequipmentand investmentproperties (735) (416)Netforeignexchangegains 24,210 72,511Others 79,443 59,870

550,606 390,700

Other income and gains — net 1,137,243 694,814

6. FINANCE INCOME — NET

Year ended 31 December2019 2018

RMB’000 RMB’000

Financecosts —Interestexpenses —Bankandotherborrowings (2,930,254) (2,416,322) —Corporatebonds (597,562) (260,027) —Leaseliabilities (15,493) –

(3,543,309) (2,676,349)

Less: —Capitalisedinterest 3,543,309 2,676,349

—Netforeignexchangelossesonfinancingactivities (53,956) (127,872)

(53,956) (127,872)

Financeincome —Interestincome 206,040 183,097

Financeincome—net 152,084 55,225

–13–

7. INCOME TAX EXPENSES

Year ended 31 December2019 2018

RMB’000 RMB’000

Currentincometax:—Corporateincometax 2,916,901 1,476,932—PRClandappreciationtax 2,706,179 2,114,663

5,623,080 3,591,595

Deferredincometax—Corporateincometax (1,568,981) (271,277)—Withholdingincometaxonprofitstobedistributedinfuture(note (d)) – 50,000

(1,568,981) (221,277)

4,054,099 3,370,318

(a) HongKongprofits taxhasbeenprovidedat the rateof16.5%on theestimatedassessableprofitsoftheGroup’ssubsidiariesinHongKong.

(b) Thegeneralcorporate income tax rate inPRC is25%.Certainsubsidiariesof theGroup in thePRCareeither supportedbyWesternDevelopmentStrategyorqualifiedas“HighandNewTechnologyEnterprise”andthussubjecttoapreferentialincometaxrateof15%.

(c) PRClandappreciationtaxisleviedatprogressiveratesrangingfrom30%to60%ontheappreciationoflandvalue,beingtheproceedsofsalespropertydevelopmentandsaleslessdeductibleexpendituresincludingcostoflanduserightsandallpropertydevelopmentexpenditures.

(d) WithholdingincometaxisprovidedonthedividendstobedistributedbythePRCsubsidiariesoftheGroup.Theoverseasholdingcompanyhadsuccessfullyobtainedendorsement fromvariousPRCtaxbureaustoenjoythetreatybenefitof5%withholdingincometaxrateondividendsreceivedfromthePRCsubsidiariesoftheGroup.Accordingly,withholdingincometaxhadbeenprovidedat5%ofthedividendstobedistributedbythePRCsubsidiariesoftheGroup.

8. EARNINGS PER SHARE

Year ended 31 December2019 2018

ProfitattributabletoownersoftheCompany(RMB’000): 4,305,164 3,209,997

Weightedaveragenumberofordinarysharesinissue(thousands) 1,192,649 1,042,031

Earningspershare—Basic(RMBpershare) 3.61 3.08

TheCompanyhadnodilutivepotentialshares in issue, thus thedilutedearningspershareequal thebasicearningspershare.

9. DIVIDENDS

TheboardofdirectorshasrecommendedthepaymentofafinaldividendofHK$1.60persharefortheyearended31December2019(2018:HK$1.2253pershare).SubjecttotheapprovaloftheshareholdersoftheCompanyattheannualgeneralmeeting,theproposedfinaldividendwillbepaidonorabout10July2020totheshareholderswhosenamesappearontheregisterofmembersoftheCompanyon19June2020.

–14–

10. TRADE AND OTHER RECEIVABLES

As at 31 December2019 2018

RMB’000 RMB’000

Included in current assets:Tradereceivables—net(note (a)) 1,203,717 1,295,905Otherreceivables—net 30,431,785 12,574,571Prepaymentsforlanduserights 3,744,866 5,210,675Otherprepayments 825,386 464,780

36,205,754 19,545,931

Asat31December2019and2018,thefairvalueoftradeandotherreceivablesapproximatedtheircarryingamounts.

(a) Detailsoftradereceivablesareasfollows:

As at 31 December2019 2018

RMB’000 RMB’000

Tradereceivables—relatedparties 144,646 5,867Tradereceivables—thirdparties 1,092,990 1,334,174Less:allowanceforimpairment (33,919) (44,136)

Tradereceivables—net 1,203,717 1,295,905

Aginganalysisoftradereceivablesbasedoninvoicedateisasfollows:

As at 31 December2019 2018

RMB’000 RMB’000

Within90days 924,707 1,138,953Over90daysandwithin180days 47,711 97,946Over180daysandwithin365days 15,641 13,318Over365days 249,577 89,824

1,237,636 1,340,041

TheGroup’stradereceivablesweredenominatedinRMB.

Trade receivablesmainly arise fromproperty development and sales. Proceeds frompropertydevelopmentandsalesaregenerally received inaccordancewith the termsstipulated in thesaleandpurchaseagreements.Thereisgenerallynocreditperiodgrantedtothepropertypurchasers.

TheGroupappliesthesimplifiedapproachtoprovideforexpectedcreditlossesprescribedbyHKFRS9.For theyearended31December2019, reversalofRMB10,217,000(2018:additionalprovisionofRMB36,098,000)weremadeagainstthegrossamountsoftradereceivables.

–15–

11. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

As at 31 December2019 2018

RMB’000 RMB’000

Investmentsinwealthmanagementproducts(note(a)) 992,700 405,000Investmentsinassetmanagementschemes(note(a)) 786,475 851,498Investmentsinlistedequityinvestment(note(b)) 61,304 –Others 72,876 –

1,913,355 1,256,498

(a) Investments inwealthmanagementproducts and assetmanagement schemesmainly representedinvestments in certain financial instruments issued by commercial banks and other financialinstitutionswhichhadnoguaranteed returns.The fairvaluesof these investmentsweredeterminedbasedonthestatementsprovidedbythecounterparties.

The rangesofexpected return ratesof theseproductsasat31December2019were0.30%–5.22%(2018:0.30%–4.86%).

(b) This represented theGroup’s1.61%equity interest inChangshaBroadHomes IndustrialGroupCo.,Ltd.（長 沙 遠 大 住 宅 工 業 集 團 股 份 有 限 公 司）,which ismainlyengaged inprefabricatedhousing industryand is listedon theStockExchangeofHongKongLimited.The fairvalueof theinvestmentat31December2019representedthequotedmarketprice.

12. SHARE CAPITAL AND PREMIUM

Number of ordinary

shares

Nominal value of

ordinary shares

Equivalent nominal value of

ordinary shares

Share premium Total

Note HKD’000 RMB’000 RMB’000 RMB’000

AuthorisedOrdinaryshareofHKD1.00 eachuponincorporation 1,000,000,000 1,000,000 – – –Increaseinauthorised sharecapital 1,000,000,000 1,000,000 – – –

2,000,000,000 2,000,000 – – –

Issued and fully paidAt31December2017and 1January2018 1,000,000,000 1,000,000 837,342 5,162,867 6,000,209Issueofsharesinconnection withtheListing 190,567,000 190,567 168,024 2,688,385 2,856,409Shareissuancecost – – – (69,539) (69,539)

At31December2018and 1January2019 1,190,567,000 1,190,567 1,005,366 7,781,713 8,787,079Placingofshares (a) 40,000,000 40,000 35,943 642,967 678,910

1,230,567,000 1,230,567 1,041,309 8,424,680 9,465,989

–16–

(a) On13December2019and18December2019, theCompany issued40,000,000 sharesbywayofplacingat a subscriptionpriceofHKD19.10per share and raisednetproceedsof approximatelyHKD755,537,000(approximatelyRMB678,910,000).

13. TRADE AND OTHER PAYABLES

As at 31 December2019 2018

RMB’000 RMB’000

Tradepayables(note (a)) 32,477,765 15,793,819—relatedparties 22,793 3,907—thirdparties 32,454,972 15,789,912Amountsduetorelatedparties 10,554,551 5,075,321Amountsduetonon-controllinginterests 17,196,319 11,811,009Outstandingacquisitionconsiderationspayable 1,867,489 1,401,975Depositpayables 1,624,857 2,543,391Accruedexpenses 592,301 452,246Salariespayable 1,114,310 742,918Interestpayable 713,068 246,508Othertaxespayable 4,396,479 3,716,571Otherpayables 1,286,759 1,718,284

71,823,898 43,502,042

(a) Theaginganalysisofthetradepayablesbasedoninvoicedatesisasfollows:

As at 31 December2019 2018

RMB’000 RMB’000

Within90days 25,668,865 10,780,781Over90daysandwithin365days 6,033,564 4,304,598Over365days 775,336 708,440

32,477,765 15,793,819

–17–

BUSINESS REVIEW AND OUTLOOK

BUSINESS REVIEW FOR 2019

Annual Results

During theyear, theGrouphadsuccessfullymovedup thehigherechelonsof the realestateindustry.Inadditiontoachievementsinitsgrowthinscale,theGrouphadmaintainedsteadygrowth inprofitsandcontinued to lower leverage. Itsachievementshadmaterialised in thedevelopment of quality in its operations, products, finances andorganisational aspects,resultinginthestrengtheningofitscomprehensivecapabilities.

Intransformingitsbusiness,theGroupintegratedresourcesandimprovedefficiency,andwasable to strengthen its refinedmanagementmodel by applying standards adopted in themanufacturing industry,andempowerbusinessdevelopmentbyadoptingdigitalcapabilities.Wehadcontinuedtooptimiseourcitylayoutplansbyaddinganumberoftier-oneandstrongtier-twocities.Wehadactivelypromotedurban renewalprojects in theGreaterBayArea,addinga totalGFAof260,000 squaremetersofurban renewalprojects in2019.Wehadupgradedourproduct strategyby focusingonour customers and improvingourproductstrength.Wehadcontinuedtorefineandimplementthestrategyofhaving“oneprincipalandtwosecondarybusinesslines”(一主兩翼).Thegrowingprominenceoftheadvantagesoflow-cost financing, the inclusionof theGroup’s shares in the constituent of theHangSengCompositeLargeCap&MidCap Indexand theHangSengStockConnectGreaterBayAreaComposite Index;and improvement in themarket liquidityof theGroup’s shares throughshareplacementshad,asawhole,causedasteadyimprovement inmarketrecognitionof theGroup.

During theyear, theGroup’s revenuewasRMB41,138.57millionand thegrossprofitwasRMB13,007.48million, representingayear-on-year increaseof37%and32%, respectively;thecorenetprofitfortheyearwasRMB4,177.77million,representingayear-on-yearincreaseof27%.Theoverallrevenueandprofithaveachievedsteadyandrapidgrowth.

(I) Review of the Real Estate Industry

Resilient development of real estate industry under precise and thorough policy control.Operatingunder themottoof“housing isnot for speculation”, regulationandcontrol of the real estate industry hadbeenprecise and thorough in 2019,with theimplementationofpoliciesvaryingbycity,districtandsituation.Againstthebackdropofacomplexenvironmentathomeandabroad, the realestate industryshowed remarkableresilience andmaintained a steady growthmomentum,with the national sales ofcommercialhousingexceedingRMB15trillion.

With the tightening of real estate financing, financing costs had increased.Thefinancingenvironment initially improved thensubsequentlydeteriorated throughout theyear, andhence financingbecame increasinglydifficult.Restrictionswereplacedontraditionalfinancingchannelssuchasoverseasdebtissuances,trusts,anddeveloperloanstherebyincreasingthefinancingcostsforrealestateenterprises.

–18–

Shift in logic for development amidst intensified differentiation in the industry and market.Differentiationintensifiedintheindustryandrealestatemarketowingtopreciseand thorough regulationof the industry.Customershadconsciouslybecomeawareofproductofferings, the livabilityof realestatehad regained importance,andhence therehadbeenaprofoundshift in logic fordevelopment in the industryushering inanerawherecustomer-orientedproductswillpaydividends.

(II) Sales Performance

Sales grew steadily.During theyear, the contracted salesof theGroupand its jointventuresandassociates reachedapproximatelyRMB101.23billion, representingayear-on-year increaseof28.1%,withacontractedsalesareaofapproximately10.023millionsquaremetres,representingayear-on-yearincreaseof26.8%.Havingbenefitedfromthetier upgrade of certain citieswherewe operate, theGroup’s average selling priceincreasedby1.1%year-on-yeartoRMB10,100persquaremetre.

Sales grew strongly in national strategic city clusters. AstheintegrationoftheYangtzeRiverDeltabecomesanationalstrategyandthebenefitsof theGuangdong-HongKong-MacaoGreaterBayAreamaterialise, theGrouphadstarted to reapdividends from itsforward-lookingbusinessplanning.During theyear, theGroupachievedapproximatelyRMB36.3billion incontractedsales in theYangtzeRiverDelta, representingayear-on-year increaseofapproximately43.8%,andachievedapproximatelyRMB18.7billion incontracted sales in the PearlRiverDelta, representing a year-on-year increase ofapproximately9.5%.ThecontractedsalesintheYangtzeRiverDeltaandthePearlRiverDeltaaccountedformorethan50%oftheGroup’stotalsales.

Results from regional expansion through penetration were showing.Duringtheyear,expansioncitieshad increasinglycontributed to the regional results; salesofcompanieslocatedintheShanghai-JiangsuregionhadexceededRMB20.0billionwhileatthesametime,sales inNorthernChina,CentralChinaand thePearlRiverDeltahadallexceededRMB10.0billion,respectively.

Results from the contribution of higher-tiered cities had increased.Owing to thestrategyof tierupgradesofcertaincities,during theyear, theproportionofcontributionof results fromhigher-tieredcitieshad increased,with tier-one/strong tier-twocitiesaccountingfor22.8%,andtier-twocitiesaccountingfor42.7%.

(III) Business Layout

During theyear, theGrouphadcontinued toexpand towards thecentralcitiesandkeytier-oneand tier-twocities,and implement thestrategiesof regionalexpansion throughpenetrationandcityupgrades.Asat31December2019,thetotalgrossfloorarea(“GFA”)of theGroup’s land reserves* reached52.63million squaremetres, comprising278propertydevelopmentprojects,covering59cities in18provincial-leveladministrativedivisions acrossChina, 61 ofwhichwere participated through joint ventures andassociates.

* Propertiesheldbyour jointventures/associatesofwhich the totalGFAof the land reserveshasbeendiscountedinproportiontoownershippercentage.

–19–

The “two secondary business lines” (兩翼) had continued to develop and empower focus to be on the principal business of real estate development.Wehadachievedbreakthroughs in intelligentbusinesses:our self-developed integratedsystemfor smartlivingwas fully launched; the functionsof the firstphaseof theartificial intelligence(“AI”)communityandhomehubweredeveloped;asolidfoundationforthedevelopmentandmarketexpansionofmultiplesmartscenarioswaslaidbytheintegrationofasystemplatform integrating equipment, data and business layers; and the constructionindustrialisationstrategywas implemented: theGreenPrefabricatedBuilding IndustrialParks inXuzhouandHandanwereput intoproductionand trialoperation respectively;GuangdongRuizhuYoukaTechnologyCo.,Ltd.(廣東睿住優卡科技有限公司),inwhichthe Company holds interests, launched the first production line for assembledprefabricatedsanitarywareinChina.

(IV) Financial Performance

During theyear, theGroupcontinued tocapitaliseon its low-cost financingadvantage,expand financing channels, pro-actively lower leverage, and improve financialmanagementefficiency,all toprovidesufficientcapital support for theGroup’s stabledevelopment.

Strengthening financing competitiveness by reducing financing costs bucking the trend.MideaRealEstateGroupLimited,amajorsubsidiaryoftheGroup,hadacompanycredit ratingofAAAwithstable ratingoutlook.During theyear, theweightedaverageeffective interest rateof theGroup’s totalborrowings furtherdecreased to5.87%,ofwhichtheweightedaverageeffectiveinterestrateofnewborrowingswas5.76%,furtherconsolidating theadvantagesof low-cost financing. Inaddition, theGroupcontinued toexpanditsfinancingchannelstoprovidesufficientfundsfortheGroup’sdevelopment.

Strengthening our “capital generation” ability (造血能力) to pro-actively lower leverage. During the year, theGroup continuouslyworked to improve its capitalmanagementcapabilitiesbyspeedingupsalesandpaymentcollections to strengthen its“capitalgeneration”ability,achievingadeclineinnetgearingratioforthreeconsecutiveyears.Asat31December2019,thenetgearingratiowas89.0%,representingadeclineofapproximately8percentagepointsascomparedtotheendof2018.

Further optimising our debt structure.During the year, theGroup continuouslyoptimised itsdebt structurebyusingnew long-termborrowings to repay its existingshort-termborrowings,therebyenhancingitssecurityboundary.Asat31December2019,theGroup’sproportionofbank loansandbonds increased from62% to85%,and theproportionofinterest-bearingliabilitiesduewithinoneyeardecreasedfrom34%to17%,respectively,ascomparedtothebeginningoftheyear.

Ample financial resources.Asattheendoftheyear,theGrouphadtotalcashandbankdepositsofRMB26,935.62million,andunusedcreditfacilitiesfrombanksofRMB83,240million.

–20–

Enhanced capital operation capability.Asitsoverallstrengthcontinuedtoincrease,theGroupgainedmorepublicityand recognition in thecapitalmarket.During theyear, theGroupwas included in theconstituentofHangSengCompositeLargeCap&MidCapIndexandHangSengStockConnectGreaterBayAreaComposite Index. It completedshareplacements to improve the liquidityof its shares in the stockmarket, andwasrecognisedbyavarietyof institutionsand renownedbanks,which raised their targetpricesoftheGroup’sshares.

(V) Operation Measures

Inthenewenvironmentwhere“therealestateindustryisthemanufacturingindustry”,thetraditional extensive developmentmodel is no longer applicable.Having inheritedMidea’smanufacturingDNA, theGroupadoptsandadheres to the refinedmanagementmodelofthemanufacturingindustrytoachievesteadyandhigh-qualitygrowth.

Operating Quality

“SIFOB” integration enhanced development eff iciency: Guided by ref inedmanagement, the integrationof “Strategy-Investment-Financing-Operation-Business”unifies the entire businessprocess chain from strategy, investment and financing tooperationpositioningand indicatorassessment tocomprehensiveevaluationofprojects,identificationofbusiness risks,and improvements in thescientificdecision-makingofinvestments andmanagement, thereby achieving comprehensive improvements indevelopmentefficiencyandoperatingquality.

Digitisation supports multi-business operations to achieve synergy and inter-connection.Basedon thecharacteristicsof the realestate industry,wehadapplied therefined thinkingmodelof themanufacturing industry toachieve integrationand inter-connection in thevaluechainof themainbusiness flowwith thedata flow,buildingupcapabilities in the coordinatedmanagement and control ofbusiness and finance, theefficientmanagementandcoordinationoflargesupplychainsandcosts,andmanagementofcustomerservicesandthelikecentredaroundusers.

Product Quality

Resolutely promoting safe production management system for projects, and maintaining a solid and safe line of defence. To improve theGroup’s safetymanagementandcontrolstructure,wehadestablishedavetosystemforsafety incidentsand implemented a “main contractingmanagementmodel” to achieve the unifiedmanagement and control of safety andquality, so as to build a solid foundation forproduction safety.We had promoted new construct ion systems and used newtechnologies,materialsandprocessestoreducecommonissuesinengineeringqualityandimprovecustomersatisfaction.

–21–

Strengthening the core competitiveness of “Smart Health” products by focusing on customers. Wehad fullyupgradedourproduct strategyandproduct system topromoteproduct innovations,having“5M*SmartHealthCommunity”as the foundationand thefourmainproduct series as thepillars.Wehadconducted in-depthcustomerdemandsurveys inorder topromptlyadjustourproductstrategiesandat thesame timebuildupstrengthinourproductlines.

Organisational Quality

Streamlining our headquarters, strengthening our front line, and implementing a three-tiered authorisation structure.Ourheadquarterswas further streamlinedandspecialised,where themodel of detailedmanagementwas replacedwith dynamicmonitoring and results-based evaluation, thereby achieving aspects of professional,mechanismandprocess delegation to the regional companies.At the same time, bycontinuously improvingdecision-makingandassessmentmechanisms,wewereable tomaintaincontrolandriskmanagementfunctionsovertheregionalcompanies.

Transforming the organisation to empower development.Inswitchingtothemodelofmanufacturingthinking,promptlyupgradingtheorganisationalstructure,redesigningtheorganisationandprocessestoalignwithstrategictransformationandupgrades,creatingalong-termoriented symbioticorganisational structure, aswell asadapting to strategictransformationsandchangesintheexternalenvironment,thiswillachievetheintegrateddevelopmentofquality,efficiency,structureandsize.

BUSINESS OUTLOOK FOR 2020

Market Outlook

Affectedby theoutbreakof thenovelcoronavirus(“COVID-19”),China’seconomyand thereal estate industrywill facegreater uncertainty and a gloomygrowthoutlook in 2020.However,webelieve thatCOVID-19willnothaveany long-termimpacton them,and therewillbenofundamentalchangeinthetrendofmaintainingstabilityindevelopment.Asurbanareasexpand,thedemandsforpurchasingandimprovingresidencescontinuetobehuge.Thetrendof transition from rapidgrowth toqualitydevelopmentof the real estate sector, thefoundationofChina’seconomy,willbecomemoreevident.

Wepredict that theoverall regionaldevelopmentand interconnectionbetween regionsandcitiesthroughthecoordinateddevelopmentofcityclusterswillbecomeaninevitabletrendinregionaldevelopment,butdifferentiationofcitiesatdifferent levelswillcontinue,and thereal estatemarketof core cities is expected togrowsteadily.Competition for talentwillcontinuetointensifyeverywhere,andmoretier-twoandstrongertier-threecitiesareexpectedtoimplementsuchtalentpolicies.Therefore,citieswithsoundindustrialinfrastructureandnetinflowofpopulationwillfurtherdemonstratestrongerdevelopmentpotential.

* 5M:M-Smart,M-Health,M-Quality,M-ServiceandM-Life.

–22–

Development Strategy and Outlook

China’s real estate industry is undergoingprofoundchanges: its traditionaldevelopmentmodel, the traditionalgovernancemodelof realestateenterprises,aswellascustomermixandchanges in lifestylesareundergoing rapid transformation.Theyear2020 is ayearofstrategicconsolidationof theGroup.Wewillconsidercustomers tobeour focus,pursuingqualitygrowthasourtarget,andproductsandservicesasthebasisforcompetition.Throughdigital systems,wewillbeable to implement refinedmanagement,create roomfor furthergrowthandaddnewdimensionstoourcompetitiveness.

TheGroupwillstudymarketchangesthoroughly,setitsinvestmentpacereasonably,expandlow-costlandbankthroughdiversifiedmeansandcontinuetoenhanceitsinvestmentblueprintwithafocusoninvestinginandexpandingtoprovincialcapitals,tier-twocities,andstrongertier-threecities.Forcitiesthatareinlinewithitsdeeppenetrationstrategyandpossessroomfordevelopment, theGroupwillcontinue togain furtherpenetration.Forcities thathaveanedge fordeeppenetration, theGroupwill strive toattaina leadingposition in themarket,higherbrandpremiumandprofitcommitments.

Wewill focuson leanmanagement and strive tobuildoperational, product, service andmarketingcapabilities.By riding the industry trends ingreenandhealthy residences andkeeping inminduserpainpoints,wewill carryout forward-looking technology research,developandupgradeproducts,maintainthecorecompetitivenessofourproductsin5Msmartandhealthycommunities,andcreatenewproductadvantagesanddevelopmentopportunities.Wewillalsostrengthen theestablishmentofourownchannels,expandcustomerbaseandmarketing throughmultiple channels, scientifically arrange prompt product supply andaggressivelyachievingprofits tomakeupfor theimpactofCOVID-19onsalesperformanceinthefirstquarterof2020.Throughupgradingtototalcustomerrelationshipwithafocusoncustomers in termsofprofessionalism,perspectiveandprocess inaholisticmanner,wewillpromote the industry’s first integratedpropertyserviceandcustomerservicemodel,attachimportance to communityoperationsandbuildingcustomer relationship, andachieve theobjectiveofcontinuouslyofferingvaluetocustomer.

Wewill continue to improve capital operation capabilities, broaden financing channels,strengthencooperationwithbanksincreditextensionatthehead-officelevel,andincreasetheproportionoflow-cost,long-termfinancingsuchasbankloansanddirectfinancing.Wewillalsoenhanceourdebtstructureandmaintainfinancingcostswithindustrycompetitivenessonanongoingbasis.

Wewilladhere to thestrategyofhavingoneprincipaland twosecondarybusiness linesandcontinue topromote the introductionof industriesunder the latter.Thestrategyofcarryingout independent research and development togetherwith ecological conservation andrestorationwillbeadopted for intelligent industriesandbuilding industrialisation toexpandtheAIcapabilitiesofsmartsystemsofresidencesinthecommunity,upgradeintegratedsmartsystems,promote the full implementationofArtificial IntelligenceofThings (AIoT)andcomplete coverage of scenarios in smart dwellings, and build amore completed smarthardwareand softwareecosystem.Wehaveestablishedan industryandproduct researchinstitute toexpedite technology researchanddevelopment inand layoutof theecosystemofprefabricated interiordecoration through the introductionof technologiesandmaterials fromJapaneseresearchinstitutes.

–23–

MANAGEMENT DISCUSSION AND ANALYSIS

Overall Performance

Duringtheyear,theGrouprecordedrevenueofRMB41,138.57million(2018:RMB30,119.81million), representing a year-on-year increase of 37%.Operating profit amounted toRMB7,903.26million (2018:RMB6,695.34million), representingayear-on-year increaseof18%.Profit for theyearamounted toRMB4,326.61million (2018:RMB3,286.87million),representingayear-on-yearincreaseof32%.Corenetprofitfortheyearincreasedby27%toRMB4,177.77million (2018:RMB3,284.39million).Profit attributable toownersof theCompany reachedRMB4,305.16million (2018:RMB3,210.00million), representingayear-on-year increaseof 34%.Basic anddiluted earningsper share reachedRMB3.61 (2018:RMB3.08).

Land Reserves

During the year, theGroup strategically replenished its land reserves based onmarketconditionsandsteadilypushedforwarditsstrategyofdeeplypenetratingregionalmarketsandexpandingtopotentialupper-tiercities.

Asat31December2019, the totalGFAof theGroup’s land reserves reached52.63millionsquaremetres,covering59citiesin18provincial-leveladministrativedivisionsacrossChina.TheselandreservesarelocatedinfivemajorregionsnamelythePearlRiverDeltaEconomicRegion,YangtzeRiverDeltaEconomicRegion,MidstreamofYangtzeRiverEconomicRegion,NorthChinaRegionandSouthwestEconomicRegion.

Duringtheyear, theGroupadheredtoitsstrategyofexpandingtopotentialupper-tiercities,and tapped intonewcitiesbyacquiring land throughpublic tender,auction, listing-for-saleprocesses, acquisitionofequity interests incompanies thathold landuse rightsandurbanrenewal projects, and the totalGFAof the newly acquired land reserves amounted toapproximately14.53millionsquaremetres.Thenewlyacquired land reservesare locatedatDongguan,Huizhou,Maomingandothercities in thePearlRiverDeltaEconomicRegion;Shanghai,Hangzhou,Nantong,TaizhouandothercitiesintheYangtzeRiverDeltaEconomicRegion;Wuhanandothercities in theMidstreamofYangtzeRiverEconomicRegion;andTianjinintheNorthChinaRegion.

–24–

FINANCIAL REVIEW

Revenue

Property Development and Sales

During the year, theGroup’s recognised revenue fromproperty development and salesincreasedby37%toRMB40,430.58million fromRMB29,602.38million in2018,primarilyduetotheincreaseintheaveragesellingprices(“ASP”)andtheGFArecognised.TotalGFArecognisedamounted to4.5624millionsquaremetres, representingan increaseof25%from3.6369millionsquaremetres in2018.RecognisedASP increasedby9% toRMB8,862persquaremetrein2019fromRMB8,139persquaremetrein2018.

Property Management Services

During theyear, theGroup’s revenuederived frompropertymanagement services increasedby37%toRMB485.42millionfromRMB355.00millionin2018,primarilyduetoanincreaseintheGFAundermanagement.

Investment and Operation of Commercial Properties

Duringtheyear,theGroup’srevenuefrominvestmentandoperationofcommercialpropertiesincreasedby37%toRMB222.57millionfromRMB162.43millionin2018,primarilydrivenbythefurtherdevelopmentofpropertyleasebusiness.

Cost of Sales

TheGroup’scostof salesprimarily represents thecosts incurreddirectly from thepropertydevelopmentactivities, theprovisionofpropertymanagement servicesandotherbusinesses.During theyear, theGroup’scostof sales increasedby39%toRMB28,131.09million fromRMB20,265.89million in2018,primarilydue to the increase in recognisedGFAof25%to4.5624millionsquaremetresfromthatof2018.

Gross Profit

During theyear, theGroup’sgrossprofit increasedby32%toRMB13,007.48million fromRMB9,853.92million in2018,primarilydrivenby the increase in sales revenue.During theyear,theGroup’sgrossprofitmargindecreasedby1.1percentagepointsto31.6%from32.7%in2018.

Other Income and Gains-Net

Duringtheyear,theGroup’sotherincomeandgains—netincreasedby64%toRMB1,137.24millionfromRMB694.81millionin2018.Otherincomeandgainsprimarilyconsistofgainson financialassetsat fairvalue throughprofitor loss,managementandconsultingserviceincome,gainsarising fromchanges in fairvalueof and transfer to investmentproperties,compensationincome,etc.

–25–

Selling and Marketing Expenses

During the year, theGroup’s selling andmarketing expenses increased by 66% toRMB2,540.69million fromRMB1,533.91million in2018,primarilydue to the increaseofrelated sellingandmarketingexpenses alongwith theGroup’s furthergrowth in salesofproperties.

Administrative Expenses

During theyear, theGroup’s administrativeexpenses increasedby62% toRMB3,695.20millionfromRMB2,285.19millionin2018,primarilyduetotheincreaseinstaffcostscausedby thecontinuingexpansionof theGroup’spropertydevelopmentbusiness,and impairmentprovisionforthosepropertydevelopmentprojectssubjecttorisks.

Finance Income — Net

TheGroup’snetfinanceincomeprimarilyconsistsof interestexpensesforbankloans,otherborrowings and issued domestic corporate bonds net of capitalised interest relating topropertiesunderdevelopment,interestincomefrombankdeposits,aswellasforeignexchangegainsand lossesarising fromfinancingactivities.Thegeneralandspecificborrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets(assetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale)arecapitalised into thecostof thoseassets,until suchassets are substantially ready for theirintendeduseorsale.

Duringtheyear,theGroup’snetfinanceincomerecordedanetgainofRMB152.08millionascomparedwithRMB55.23millionin2018,representinganincreaseof175%,primarilyduetoasignificantdecreaseinexchangelossfromtheGroup’sfinancingactivitiesfromRMB127.87millionin2018toRMB53.96millionduringtheyear.

Profit Attributable to Owners of the Company

During the year, profit attributable to owners of theCompany increased by 34% toRMB4,305.16millionfromRMB3,210.00millionin2018.

–26–

LIQUIDITY AND CAPITAL RESOURCES

Cash Position and Available Funds

TheGroup’stotalcashandbankdepositsreachedRMB26,935.62millionasat31December2019(31December2018:RMB26,533.14million), includingRMB19,097.27million incashandcashequivalents (31December2018:RMB15,439.15million),RMB141.16million intermdepositswith initial termsofover threemonths (31December2018:RMB3,065.87million) andRMB7,697.19million in restricted cash (31December2018:RMB8,028.12million).SeveralpropertydevelopmentcompaniesoftheGrouparerequiredtodepositcertainamounts of pre-sale proceeds at designatedbank accounts as guaranteedeposits for theconstruction of related properties.As at 31December 2019, theGroup’s unused creditfacilitiesfrombankswereRMB83,240million.

Borrowings

Asat31December2019, theGroup’s totalborrowingsamounted toRMB54,651.72million.Bank and other borrowings, and corporate bondswere RMB44,164.94million andRMB10,486.78million, respectively.Asat31December2019, thegearing ratiowas89.0%(31December2018:97.4%).Thegearingratioiscalculatedbasedonnetborrowingsdividedby totalequity.Netborrowingswerecalculatedas totalamountofborrowings lesscashandcashequivalents,termdepositswithinitialtermsofoverthreemonthsandrestrictedcash.

Borrowing Cost

During theyear, the totalborrowingcostsof theGroupamounted toRMB3,527.82million,representingan increaseofRMB851.47million fromRMB2,676.35million in2018,mainlyduetotheincreaseintheaverageprincipalofborrowingsduringtheyear.

Contingent Liabilities and Guarantees

TheGroupprovidesmortgageguarantees tobanks in respectof themortgage loans theyprovidedtoourcustomersinordertosecuretherepaymentobligationsofsuchcustomers.Themortgageguaranteeswere issued from thedateofgrantof the relevantmortgage loans,andreleasedupon theearlierof (i) issuanceof the real estateownershipcertificatewhicharegenerallyavailablewithin threemonthsafter thepurchasers takepossessionof the relevantproperties;and (ii) thesatisfactionofmortgaged loansby thepurchasersof theproperties.Pursuant to the terms of the guarantees, upon default inmortgage payments by thesepurchasers,weare responsible to repay theoutstandingmortgageprincipals togetherwithaccruedinterestandpenaltyowedbythedefaultedpurchaserstothebanksandweareentitledtoretainthelegaltitleandtakeoverthepossessionoftherelatedproperties.Ifwefail todoso,themortgageebankswillauctiontheunderlyingpropertyandrecoverthebalancefromusiftheoutstandingloanamountexceedsthenetforeclosuresaleproceeds.Inlinewithindustrypractice,wedonotconductindependentcreditchecksonourcustomersbutrelyonthecreditchecksconductedbythemortgageebanks.Asat31December2019,thevalueoftheGroup’sguaranteeinrespectofmortgagefacilitiesforcertainpurchasersamountedtoRMB62,687.03million(31December2018:RMB42,105.14million).

–27–

Inaddition, theGroupalsoprovidesguarantees forborrowingsof several jointventuresandassociates.Asat31December2019,thevalueoftheGroup’sguaranteefortheloansofjointventuresandassociatesamountedtoRMB6,991.18million(31December2018:RMB2,947.42million).

Commitments

As at 31December 2019, theGroup’s capital and property development expenditurecommitments amounted toRMB36,197.59million (31December 2018:RMB24,781.58million).

Interest Rate Risk

TheGroup’s interest rate riskarises from interest-bearingbankdeposits, corporatebonds,bankandotherborrowings.Bankdeposits,bankandotherborrowingsissuedatvariableratesexposetheGrouptocashflowinterestraterisk.Corporatebonds,bankandotherborrowingsissuedatfixedratesexposetheGrouptofairvalueinterestraterisk.

Currency Risk

TheGroup’sbusinessesaremainlyconductedinRMBandmostofitsassetsaredenominatedin RMB.Non-RMB assets and liabilit ies aremainly bank deposits and borrowingsdenominated inHongKongdollarsandUSdollars.TheGroup is subject tocertain foreignexchange risks arising from future commercial transactions and recognised assets andliabilitieswhicharedenominatedinHongKongdollarsandUSdollars.

Placing and Subscription

On11December2019,theCompany,MideaDevelopmentHolding(BVI)Limited(美的發展控股(BVI)有限公司)(the“Vendor”)andChinaInternationalCapitalCorporationHongKongSecuritiesLimited(the“Placing Agent”)enteredintotheplacingandsubscriptionagreement(the“Placing and Subscription Agreement”),pursuant towhich,(a) theVendorhasagreedtoappoint thePlacingAgent, and thePlacingAgenthasagreed toact as theagent to theVendor to (i) procure purchasers for, or failingwhich to purchase itself (i.e. on a fullyunderwritten basis), the placing shares of 31,000,000 existing shares of theCompany(“Shares”),and(ii)attheoptionofthePlacingAgent,toprocurepurchasersonabesteffortsbasisfortheoptionalsharesof9,000,000SharesineachcaseatHK$19.10pershare((i)and(ii)collectively,the“Placing”);and(b)theVendorhasconditionallyagreedtosubscribefor,and theCompanyhasconditionallyagreed toallotand issue to theVendor,a totalofup to40,000,000newSharesatHK$19.10per share (being thesamepriceas theplacingprice),uponthetermsandsubjecttotheconditionssetoutinthePlacingandSubscriptionAgreement(the“Subscription”).

Completionof thePlacingand theSubscription tookplaceon13December2019and18December2019, respectively.A total40,000,000Shares (inclusiveof theplacingsharesandtheoptionalshares)hadbeensuccessfullyplacedattheplacingpriceofHK$19.10perSharetono fewer than six independentplacees.A totalof40,000,000newShares, representingapproximately3.25%oftheenlargedissuedsharecapitaloftheCompanyuponcompletionof

–28–

the allotment and issue of the newShares,were subscribed by theVendor at the netsubscriptionprice(afterdeductionoftheexpensesincurredbytheVendorandotherexpensesincurredby theCompany in relation to thePlacingand theSubscription)ofHK$18.89perShare.NetproceedsofapproximatelyHK$755.5millionwere raisedwhichwillbeused forpossiblebusinessdevelopmentor investments in the futurewhenopportunitiesariseand tosupplementthegeneralworkingcapitaloftheGroup.Asat31December2019,theGrouphadappliedapproximatelyHK$429millionof theproceeds forgeneralworkingcapitalpurposesandapproximatelyHK$326.5millionof theproceeds forpossiblebusinessdevelopmentorinvestments.For furtherdetails, please refer to theCompany’s announcementsdated11December2019and18December2019.

Legal Contingencies

TheGroupmaybeinvolvedinlitigationsandotherlegalproceedingsinitsordinarycourseofbusiness from time to time.TheGroupbelieves that the liabilitiesarising from these legalproceedingswillnothaveamaterialadverseeffectonourbusiness, financialconditionorresultsofoperations.

SUBSEQUENT EVENTS

On8 January2020,ChinaSecuritiesRegulatoryCommission (中國證券監督管理委員會) approved the application ofMideaRealEstateGroupLimited (美的置業集團有限公司) (“Midea Real Estate Group”),an indirectlywholly-ownedsubsidiaryof theCompany, forthepublicofferingofcorporatebonds inanaggregatesumnotexceedingRMB7.5billion toqualifiedinvestors.

On25February2020,MideaRealEstateGrouppublicly issuedthefirst trancheofdomesticcorporatebondsinanaggregatesumofRMB1.44billiontoqualifiedinvestorsinChinawithacouponrateof4%perannumfora termoffouryearswhichwillmatureinFebruary2024(the“2020 Public Issuance of Domestic Corporate Bonds (First Tranche)”).MideaRealEstateGrouphas anoption to adjust the coupon rate at the endof the secondyear, andinvestors are entitled to sell back.For further details about the2020Public IssuanceofDomesticCorporateBonds (FirstTranche),please refer to theCompany’sannouncementsdated19February2020and24February2020.

On26March2020,MideaRealEstateGrouppubliclyissuedthesecondtrancheofdomesticcorporatebondsinanaggregatesumofRMB0.984billiontoqualifiedinvestorsinChinawithacoupon rateof4.2%perannumfora termof fiveyearswhichwillmature inMarch2025(the“2020 Public Issuance of Domestic Corporate Bonds (Second Tranche)”).MideaRealEstateGrouphasanoptiontoadjustthecouponrateattheendofthethirdyear,andinvestorsare entitled to sell back.For furtherdetails about the2020Public IssuanceofDomesticCorporateBonds (SecondTranche),please refer to theCompany’sannouncementsdated23March2020and25March2020.

–29–

Sinceearly2020,COVID-19hasaffected thebusinessandeconomicactivitiesof theGroupin the firstquarterofyear2020 to someextent.TheGroupwillpaycloseattention to thedevelopmentofCOVID-19andevaluate its impacton the financialpositionandoperatingresultsof theGroup.Asat thedateof thisannouncement, theGroupwasnotawareofanymaterialadverseeffectsontheconsolidatedfinancialstatementsasaresultofCOVID-19.

USE OF PROCEEDS FROM INITIAL PUBLIC OFFERING

TradingofsharesintheCompanyontheMainBoardofTheStockExchangeofHongKongLimitedcommencedon11October2018,andtheGroupraisednetproceedsofapproximatelyRMB2,786.87million (including theexerciseof theover-allotmentoption),afterdeductingtheunderwritingcommissionandotherexpensesinconnectionwiththeinitialpublicoffering(“IPO”).

Asat31December2019,ananalysisof theutilisationof IPOproceedsof theGroup isasfollows:

Original allocation of

IPO proceeds (including theexercise of theover-allotment

option)

Utilised IPOproceeds as at 31 December

2019

Unutilised IPOproceeds as at 31 December

2019RMB million RMB million RMB million

Landacquisitionormergersand acquisitionstoincreaselandreserves 1,950.81 749.09 1,201.72Landacquisitionandconstructionfor prefabricatedconstructionprojects 418.03 337.20 80.83Researchanddevelopmentof SmartHomesolutions 139.34 – 139.34Generalworkingcapital 278.69 278.69 –

Total 2,786.87 1,354.98 1,421.89

TheCompanyintendstoapplytheremainingproceedsinthemannersetoutintheCompany’sprospectusdated28September2018.Nonetheless, theBoardwill constantlyevaluate theGroup’sbusinessobjectivesandmaychangeormodify theplansagainstchangingmarketconditionsasnecessaryandwillmakethenecessaryannouncement(s)incompliancewiththerequirementsoftheRulesGoverningtheListingofSecuritiesonTheStockExchangeofHongKongLimited(the“Listing Rules”)whereappropriate.

–30–

HUMAN RESOURCES

Asat31December2019,theGrouphademployedapproximately14,413fulltimeemployees,mostofwhomwerebased in thePRC.Employee’s remuneration includessalaries,bonusesandothercash subsidies.The remunerationandbonusesof theemployeesaredeterminedbasedon theGroup’s remunerationandwelfarepolicies, theperformanceof theemployees,theprofitabilityof theGroupandmarket level.TheGroupwillalsoprovideemployeeswithcomprehensivewelfare plans and career development opportunities, including socialinsurances,housingprovident funds,commercial insuranceaswellas internalandexternaltrainingopportunities.

PURCHASE, SALE OR REDEMPTION OF LISTED SECURITIES

Neither theCompanynoranyof itssubsidiarieshadpurchased,soldor redeemedanyof thelistedsecuritiesoftheCompanyduringtheyearended31December2019.

COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED ISSUERS

TheCompanyhasadoptedtheModelCodeforSecuritiesTransactionsbyDirectorsofListedIssuers (the“Model Code”)as setout inAppendix10 to theListingRulesas thecodeofconductof theCompanyforDirectors’securities transactions.Havingmadespecificenquiryof theDirectors,all theDirectorsconfirmed that theyhavecompliedwith theModelCodeduringtheyearended31December2019.

COMPLIANCE WITH CORPORATE GOVERNANCE CODE

Save asdisclosedbelow, theCompanyhad compliedwith all the codeprovisionsof theCorporateGovernanceCode(the“CG Code”)assetoutinAppendix14totheListingRulesduringtheyearended31December2019.

OurChairman is responsible for formulating the overall strategies and policies of theCompanyandprovidingleadershipfortheBoardinfulfillingitsrolesandresponsibilitiesandtheestablishmentof soundcorporategovernancepracticesandprocedures for theCompany.OurChairman,aschiefexecutiveoftheCompany,isalsodelegatedtheauthoritybytheBoardto lead theday-to-dayoperationandbusinessmanagementof theGroup inaccordancewiththeobjectives,directionsandpolicieslaiddownbytheBoard.

According to codeprovisionA.2.1of theCGCode, the rolesof chairman and the chiefexecutiveofficer shouldbe separateandshouldnotbeperformedby the same individual.During the year ended31December 2019,Mr.HaoHengle performedhis duties as thechairman andpresident of theCompany.As such, theCompanyhasdeviated fromcodeprovisionA.2.1oftheCGCode.GivenMr.HaohasconsiderableexperienceinthePRCrealestate industry and the business operations of theGroup, and is familiarwithMidea’soperations andmanagement core values.TheBoard believes that vesting both roles ofchairmanandpresidentinMr.HaofacilitatestheexecutionoftheGroup’slong-termstrategicaims and achieving its operations and business objectives, therebymaximising theeffectivenessoftheGroup’soperations.

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TheBoardbelieves that this structure is in thebest interestof theCompany,and that thissituationwill not impair thebalanceof power and authority between theBoard and themanagementoftheCompanybecausetheBoardcomprisesnineexperiencedandhigh-calibreindividualswith demonstrated integrity, ofwhich three are independent non-executiveDirectors.Further,decisionsof theBoardarecollectivelymadebywayofmajorityvoting.TheBoardwillneverthelessreviewtheeffectivenessofthisstructurefromtimetotime.

REVIEW OF THE ANNUAL RESULTS BY AUDIT COMMITTEE

TheCompanyestablished itsauditcommittee (“Audit Committee”)on12September2018withtheresponsibilitytoassisttheBoardinprovidinganindependentreviewofthefinancialstatements, riskmanagementand internalcontrol systems.TheAuditCommitteecomprisestwoindependentnon-executiveDirectors,Mr.TanJinsong(chairmanoftheAuditCommittee)andMr.O’YangWiley,andonenon-executiveDirector,Mr.ZhaoJun.Mr.TanJinsongistheindependentnon-executiveDirectorpossessing theappropriateprofessionalaccountingandrelatedfinancialmanagementexpertise.

TheAuditCommitteehasreviewedtheGroup’sconsolidatedfinancialstatementsfortheyearended31December2019. Itmeets regularlywith themanagement, theexternalauditorandtheinternalauditpersonneltodiscusstheaccountingprinciplesandpracticesadoptedbytheGroup,theriskmanagementandinternalcontrolsystems,andthefinancialreportingmatters.

SCOPE OF WORK OF PRICEWATERHOUSECOOPERS

The figures in respect of theGroup’s consolidated statement of comprehensive income,consolidatedbalancesheetandtherelatednotestheretofortheyearended31December2019as set out in this annual results announcementhavebeenagreedby theGroup’s auditor,PricewaterhouseCoopers,totheamountssetoutintheGroup’sauditedconsolidatedfinancialstatements for theyear.TheworkperformedbyPricewaterhouseCoopers in this respectdidnotconstituteanassuranceengagementinaccordancewithHongKongStandardsonAuditing,HongKongStandards onReviewEngagements orHongKongStandards onAssuranceEngagements issued by theHongKong Institute ofCertified PublicAccountants andconsequentlynoassurancehasbeenexpressedbyPricewaterhouseCooperson this annualresultsannouncement.

ANNUAL GENERAL MEETING

TheannualgeneralmeetingoftheCompany(the“AGM”)willbeheldon29May2020.Thenoticeof theAGMwillbepublishedon theCompany’swebsiteathttp://www.mideadc.comand thewebsiteofHongKongExchangesandClearingLimitedathttp://www.hkexnews.hk,anddespatchedtotheshareholdersoftheCompanyinduecourse.

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FINAL DIVIDEND

TheBoardhas recommended thepaymentofa finaldividendofHK$1.60per share for theyearended31December2019 (2018:HK$1.2253per share).Subject to theapprovalof theshareholdersof theCompanyat theAGM, theproposed finaldividendwillbepaidonorabout10July2020totheshareholderswhosenamesappearontheregisterofmembersoftheCompanyon19June2020.

CLOSURE OF REGISTER OF MEMBERS

For thepurposeofascertainingtheshareholders’rightsofattendingandvotingat theAGM,the registerofmembersof theCompanywillbeclosed from26May2020 to29May2020,bothdaysinclusive,duringwhichperiodnotransferofsharesshallbeeffected.Inordertobeentitled to attend andvote at theAGM, all transfers accompaniedby the relevant sharecertificatesmustbe lodgedwith theHongKongbranchshare registrarand transferofficeoftheCompany,Tricor InvestorServicesLimitedatLevel54,HopewellCentre,183Queen’sRoadEast,HongKongnotlaterthan4:30p.m.on25May2020.

For thepurposeofdetermining the identityof shareholderswhoareentitled to theproposedfinaldividend, theregisterofmembersof theCompanywillbeclosedfrom18June2020to19June2020,bothdaysinclusive,duringwhichperiodnotransferofsharesshallbeeffected.Inorder toqualifyfor theproposedfinaldividend,all transfersaccompaniedbytherelevantsharecertificatesmustbe lodgedwith theHongKongbranch share registrar and transferofficeof theCompany,Tricor InvestorServicesLimitedatLevel54,HopewellCentre,183Queen’sRoadEast,HongKongnotlaterthan4:30p.m.on17June2020.

PUBLICATION OF THE RESULTS ANNOUNCEMENT AND ANNUAL REPORT

ThisresultsannouncementispublishedontheCompany’swebsiteathttp://www.mideadc.comand thewebsiteofHongKongExchangesandClearingLimitedathttp://www.hkexnews.hk.The2019annualreportwillbedespatchedtotheshareholdersoftheCompanyandavailableontheaforesaidwebsitesinduecourse.

ByorderoftheBoardMidea Real Estate Holding Limited

Hao HengleChairman,ExecutiveDirectorandPresident

HongKong,30March2020

Asat thedateof thisannouncement, theexecutiveDirectorsof theCompanyareMr.HaoHengle,Mr.YaoWei,Mr.LinGeandMs.LinDongna; thenon-executiveDirectorsof theCompanyareMr.HeJianfengandMr.ZhaoJun;andtheindependentnon-executiveDirectorsoftheCompanyareMr.TanJinsong,Mr.O’YangWileyandMr.LuQi.