China Southern Airlines Company Limited (CHKIF) 6-K Current report (foreign)

Exhibit 99.1

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.

2022 ANNUAL RESULTS

The board of directors (the “Board”) of China Southern Airlines Company Limited (the “Company”) hereby announces the annual results of the Company and its subsidiaries (the “Group”) for the year ended 31 December 2022 together with the comparative figures for 2021, which have been derived from the Group’s audited consolidated financial statements for the year ended 31 December 2022.

FINANCIAL RESULTS

A. PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRSs”)

CONSOLIDATED INCOME STATEMENTS

For the year ended 31 December 2022

	Note		2022		2021
			RMB million		RMB million
Operating revenue
Traffic revenue				80,901		95,279
Other operating revenue				6,158		6,365
Total operating revenue		4		87,059		101,644
Operating expenses
Flight operation expenses		5		51,241		45,569
Maintenance expenses				11,224		12,162
Aircraft and transportation service expenses				17,506		21,147
Promotion and selling expenses				4,355		4,705
General and administrative expenses				3,511		3,663
Depreciation and amortisation		6		24,266		24,241
Impairment losses on property, plant and equipment, right-of-use assets and other assets				449		2,597
Others				2,710		2,256

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	Note		2022			2021
			RMB million			RMB million
Total operating expenses				115,262			116,340
Other net income		7		5,661			4,767
Operating losses				(22,542	)		(9,929	)
Interest income				457			675
Interest expense		8		(6,006	)		(6,202	)
Exchange (loss)/gain, net		20		(3,619	)		1,575
Share of associates’ results				(13	)		9
Share of joint ventures’ results				304			271
Changes in fair value of financial assets/liabilities				(388	)		(309	)
Gain on disposal of subsidiaries				215			—
Gain on disposal of associates				42			—
Loss before income tax				(31,550	)		(13,910	)
Income tax		9		(2,166	)		2,894
Loss for the year				(33,716	)		(11,016	)
Loss attributable to:
Equity shareholders of the Company				(32,699	)		(12,106	)
Non-controlling interests				(1,017	)		1,090
Loss for the year				(33,716	)		(11,016	)
Loss per share
Basic and diluted (expressed in RMB per share)		10		(1.90	)		(0.75	)

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the year ended 31 December 2022

	2022 RMB million			2021 RMB million
Loss for the year		(33,716	)		(11,016	)
Other comprehensive income:
Items that will not be reclassified to profit or loss
– Equity investments at fair value through other comprehensive income – net movement in fair value reserve (non-recycling)		142			(236	)
– Share of other comprehensive income of an associate		—			(2	)
– Income tax effect of the above items		(35	)		60
Items that are or may be reclassified subsequently to profit or loss
– Cash flow hedge: fair value movement of derivative financial instrument		—			42
– Differences resulting from the translation of foreign currency financial statements		1			—
– Share of other comprehensive income of an associate		—			3
– Income tax effect of the above items		—			(10	)
Other comprehensive income for the year		108			(143	)
Total comprehensive income for the year		(33,608	)		(11,159	)
Total comprehensive income attributable to:
Equity shareholders of the Company		(32,637	)		(12,189	)
Non-controlling interests		(971	)		1,030
Total comprehensive income for the year		(33,608	)		(11,159	)

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 December 2022

			31 December		31 December
	Note		2022		2021
			RMB million		RMB million
Non-current assets
Property, plant and equipment, net		12		90,517		91,186
Construction in progress		13		33,300		31,847
Right-of-use assets		14		131,954		138,439
Goodwill				237		237
Interest in associates				2,588		2,637
Interest in joint ventures				3,618		3,341
Aircraft lease deposits				354		321
Other equity instrument investments				659		563
Other non-current financial assets				436		589
Derivative financial assets				27		—
Amounts due from related companies				357		151
Deferred tax assets		15		12,471		12,823
Other assets				2,274		3,211
				278,792		285,345
Current assets
Inventories				1,387		1,652
Trade receivables		16		2,619		2,858
Other receivables		17		7,939		9,599
Cash and cash equivalents				19,889		21,456
Assets held for sale				709		1,292
Restricted bank deposits				174		158
Prepaid expenses and other current assets				619		736
Derivative financial assets				2		—
Amounts due from related companies				116		115
				33,454		37,866

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			31 December			31 December
	Note		2022			2021
			RMB million			RMB million
Current liabilities
Derivative financial liabilities		18		1,708			1,222
Borrowings		19		85,336			57,913
Lease liabilities		20		21,799			20,805
Trade payables		21		1,537			1,328
Contract liabilities				1,496			1,542
Sales in advance of carriage				3,383			3,716
Current income tax				312			844
Amounts due to related companies				435			363
Accrued expenses				17,636			15,479
Other liabilities				7,816			7,778
				141,458			110,990
Net current liabilities				(108,004	)		(73,124	)
Total assets less current liabilities				170,788			212,221
Non-current liabilities
Borrowings		19		34,444			38,354
Lease liabilities		20		72,963			81,944
Derivative financial liabilities				—			20
Other non-current liabilities				1,954			1,824
Amounts due to related companies				85			—
Provision for major overhauls				5,199			4,820
Deferred benefits and gains				760			725
Deferred tax liabilities				24			26
				115,429			127,713
Net assets				55,359			84,508
Capital and reserves
Share capital				18,121			16,948
Reserves				23,154			50,903
Total equity attributable to equity shareholders of the Company				41,275			67,851
Non-controlling interests				14,084			16,657
Total equity				55,359			84,508

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2022

			Attributable to equity shareholders of the Company
	Share capital		Share premium		Fair value reserve (recycling)			Fair value reserve (non- recycling)			Other reserves		Retained earnings/ (accumulated losses)			Total			Non- controlling interests			Total equity
	RMB million		RMB million		RMB million			RMB million			RMB million		RMB million			RMB million			RMB million			RMB million
Balance at 1 January 2021		15,329		38,541		(35	)		274			3,390		12,085			69,584			15,547			85,131
Changes in equity for 2021:
Loss for the year		—		—		—			—			—		(12,106	)		(12,106	)		1,090			(11,016	)
Other comprehensive income		—		—		35			(118	)		—		—			(83	)		(60	)		(143	)
Total comprehensive income		—		—		35			(118	)		—		(12,106	)		(12,189	)		1,030			(11,159	)
Distributions to non-controlling interests		—		—		—			—			—		—			—			(659	)		(659	)
Conversion of convertible bonds to ordinary shares		1,619		8,837		—			—			—		—			10,456			—			10,456
Capital injection from non-controlling interests		—		—		—			—			—		—			—			810			810
Decrease in non-controlling interests as a result of liquidation of a subsidiary		—		—		—			—			—		—			—			(71	)		(71	)
Balance at 31 December 2021		16,948		47,378		—			156			3,390		(21	)		67,851			16,657			84,508
Changes in equity for 2022:
Loss for the year		—		—		—			—			—		(32,699	)		(32,699	)		(1,017	)		(33,716	)
Other comprehensive income		—		—		—			61			1		—			62			46			108
Total comprehensive income		—		—		—			61			1		(32,699	)		(32,637	)		(971	)		(33,608	)
Distributions to non-controlling interests		—		—		—			—			—		—			—			(912	)		(912	)
Insurance of shares		1,173		4,873		—			—			—		—			6,046			—			6,046
Capital injection from non-controlling interests		—		—		—			—			15		—			15			12			27
Decrease in non-controlling interests as a result of disposal of subsidiaries		—		—		—			—			—		—			—			(702	)		(702	)
Disposal of an equity instrument investment		—		—		—			40			—		(40	)		—			—			—
Balance at 31 December 2022		18,121		52,251		—			257			3,406		(32,760	)		41,275			14,084			55,359

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Notes to the financial information prepared in accordance with IFRSs:

1. CORPORATE INFORMATION

China Southern Airlines Company Limited (the “Company”), a joint stock limited company, was incorporated in the People’s Republic of China (the “PRC”) on 25 March 1995. The address of the Company’s registered office is Unit 301, 3/F, Office Tower, Guanhao Science Park Phase I, 12 Yuyan Street, Huangpu District, Guangzhou, Guangdong Province, the PRC. The Company and its subsidiaries (the “Group”) are principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery and other extended transportation services.

The Company’s majority interest is owned by China Southern Air Holding Company Limited (“CSAH”), a state-owned enterprise incorporated in the PRC.

The Company’s shares are traded on the Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited.

2. BASIS OF PREPARATION

The consolidated financial statements have been prepared in accordance with all applicable International Financial Reporting Standards (“IFRSs”), which collective term includes all applicable individual IFRSs, International Accounting Standards (“IASs”) and Interpretations issued by the International Accounting Standards Board (the “IASB”). The consolidated financial statements also comply with the applicable disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The IASB has issued certain amendments to IFRSs that are first effective or available for early adoption for the current accounting period of the Group. Note 3 provides information on any changes in accounting policies resulting from initial application of these developments to the extent that they are relevant to the Group for the current accounting period reflected in these consolidated financial statements.

The consolidated financial statements for the year ended 31 December 2022 comprise the Group and the Group’s interest in associates and joint ventures.

The measurement basis used in the preparation of the consolidated financial statements is the historical cost basis except that the following assets and liabilities are stated at their fair value:

• other equity instrument investments;

• other non-current financial assets (FVPL); and

• derivative financial assets/liabilities.

Non-current assets (or disposal groups) held for sale are stated at the lower of carrying amount and fair value less costs to sell.

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3. CHANGES IN ACCOUNTING POLICIES

The Group has applied the following amendments to IFRSs issued by the IASB to these financial statements for the current accounting period:

• Amendments to IAS 16, Property, plant and equipment: Proceeds before intended use

• Amendments to IAS 37, Provisions, contingent liabilities and contingent assets: Onerous contracts — cost of fulfilling a contract

The Group has not applied any new standard or interpretation that is not yet effective for the current accounting period. Impacts of the adoption of the amended IFRSs are discussed below:

Amendments to IAS 16, Property, plant and equipment: Proceeds before intended use

The amendments prohibit an entity from deducting the proceeds from selling items produced before that asset is available for use from the cost of an item of property, plant and equipment. Instead, the sales proceeds and the related costs should be included in profit and loss. The adoption of the amendments does not have any material impact on the financial position and the financial result of the Group.

Amendments to IAS 37, Provisions, contingent liabilities and contingent assets: Onerous contracts — cost of fulfilling a contract

The amendments clarify that for the purpose of assessing whether a contract is onerous, the cost of fulfilling the contract includes both the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts. The adoption of the amendments does not have any material impact on the financial position and the financial result of the Group.

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4. REVENUE AND SEGMENT INFORMATION

(a) Operating revenue

The Group is principally engaged in the operation of civil aviation, including the provision of passenger, cargo, mail delivery, and other extended transportation services.

(i) Disaggregation of revenue

Disaggregation of revenue from contracts with customers by major service lines is as follows:

	2022		2021
	RMB million		RMB million
Revenue from contracts with customers within the scope of IFRS 15:
Disaggregated by service lines
– Traffic revenue
– Passenger		60,017		75,392
– Cargo and mail		20,884		19,887
– Commission income		2,073		2,677
– General aviation income		431		572
– Cargo handling income		1,123		864
– Hotel and tour operation income		497		538
– Ground services income		282		326
– Air catering service income		203		271
– Others		1,351		885
		86,861		101,412
Revenue from other sources:
– Rental income		198		232
		87,059		101,644

Disaggregation of revenue from contracts with customers by the timing of revenue recognition and by geographic markets is disclosed in Notes 4(b) and 4(c) respectively.

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(ii) Revenue expected to be recognised in the future arising from contracts with customers in existence at the reporting date

As at 31 December 2022, the aggregated amount of the transaction price allocated to the remaining performance obligation, which is the unredeemed credits under the frequent flyer award programmes, amounted to RMB3,173 million (31 December 2021: RMB3,061 million). This amount represents revenue expected to be recognised in the future when the customers obtain control of the goods or services.

(b) Business segments

The Group has two reportable operating segments “airline transportation operations” and “other segments”, according to internal organisation structure, managerial needs and internal reporting system. “Airline transportation operations” comprises the Group’s passenger and cargo and mail operations. “Other segments” includes cargo handling, hotel and tour operation, ground services, air catering services and other miscellaneous services.

For the purposes of assessing segment performance and allocating resources between segments, the Group’s chief operating decision maker (“CODM”) monitors the results, assets and liabilities attributable to each reportable segment based on financial results prepared under the People’s Republic of China Accounting Standards for Business Enterprises (“PRC GAAP”). As such, the amount of each material reconciling item from the Group’s reportable segment loss before taxation, assets and liabilities, which arises from different accounting policies, are set out in Note 4(d).

Inter-segment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

Information regarding the Group’s reportable segments as provided to the Group’s CODM for the purposes of resource allocation and assessment of segment performance is set out below.

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The segment results of the Group for the year ended 31 December 2022 are as follows:

	Airline transportation operations			Other segments			Elimination			Unallocated*			Total
	RMB million			RMB million			RMB million			RMB million			RMB million
Disaggregated by timing of revenue recognition
Point in time		2,148			1,133			(747	)		—			2,534
Over time		84,197			3,152			(2,824	)		—			84,525
Revenue from external customers		85,935			1,124			—			—			87,059
Inter-segment sales		410			3,161			(3,571	)		—			—
Reportable segment revenue		86,345			4,285			(3,571	)		—			87,059
Reportable segment loss before taxation		(31,233	)		(452	)		(8	)		167			(31,526	)
Reportable segment loss after taxation		(33,339	)		(549	)		(8	)		198			(33,698	)
Other segment information
Income tax		2,106			97			—			(31	)		2,172
Interest income		549			20			(112	)		—			457
Interest expense		6,096			41			(131	)		—			6,006
Depreciation and amortisation		23,830			430			—			—			24,260
Impairment losses		582			—			—			—			582
Credit losses		(4	)		1			—			—			(3	)
Share of associates and joint ventures’ results		—			—			—			291			291
Gain on disposal of subsidiaries and associates		—			—			—			257			257
Change in fair value of financial assets/ liabilities		—			—			—			(388	)		(388	)
Non-current assets additions during the year#		23,739			385			(312	)		—			23,812

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The segment results of the Group for the year ended 31 December 2021 are as follows:

	Airline transportation operations			Other segments			Elimination			Unallocated*			Total
	RMB million			RMB million			RMB million			RMB million			RMB million
Disaggregated by timing of revenue recognition
Point in time		2,763			1,418			(1,171	)		—			3,010
Over time		98,206			3,257			(2,829	)		—			98,634
Revenue from external customers		100,419			1,225			—			—			101,644
Inter-segment sales		550			3,450			(4,000	)		—			—
Reportable segment revenue		100,969			4,675			(4,000	)		—			101,644
Reportable segment loss before taxation		(13,769	)		(111	)		2			(25	)		(13,903	)
Reportable segment loss after taxation		(10,998	)		(67	)		2			52			(11,011	)
Other segment information
Income tax		(2,771	)		(44	)		—			(77	)		(2,892	)
Interest income		763			15			(103	)		—			675
Interest expense		6,291			26			(115	)		—			6,202
Depreciation and amortisation		23,854			380			—			—			24,234
Impairment losses		2,596			18			—			—			2,614
Credit losses		1			(2	)		—			—			(1	)
Share of associates’ results		—			—			—			9			9
Share of joint ventures’ results		—			—			—			271			271
Change in fair value of financial assets/liabilities		—			—			—			(309	)		(309	)
Non-current assets additions during the year#		21,457			905			(359	)		—			22,003

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The segment assets and liabilities of the Group as at 31 December 2022 and 31 December 2021 are as follows:

	Airline transportation operations		Other segments		Elimination			Unallocated*		Total
	RMB million		RMB million		RMB million			RMB million		RMB million
As at 31 December 2022
Reportable segment assets		301,356		5,677		(1,974	)		6,942		312,001
Reportable segment liabilities		254,087		3,089		(1,997	)		1,708		256,887
As at 31 December 2021
Reportable segment assets		312,020		5,909		(1,616	)		6,635		322,948
Reportable segment liabilities		236,428		2,640		(1,607	)		1,242		238,703

* Unallocated assets primarily include interest in associates and joint ventures, derivative financial assets and equity securities. Unallocated liabilities primarily include derivative financial liabilities. Unallocated results primarily include the share of results of associates and joint ventures, gain on disposal of subsidiaries and associates, dividend income from equity securities, and the fair value movement of financial instruments recognised through profit or loss.

# The additions of non-current assets do not include interests in associates and joint ventures, other equity instrument investments, other non-current financial assets, derivative financial assets and deferred tax assets.

(c) Geographical information

The Group’s business segments operate in three main geographical areas, even though they are managed on a worldwide basis.

The Group’s revenue by geographical segment are analysed based on the following criteria:

(1) Traffic revenue from services of both origin and destination within the PRC (excluding Hong Kong Special Administrative Region, Macau Special Administrative Region and Taiwan (“Hong Kong, Macau and Taiwan”)), is classified as domestic revenue. Traffic revenue with origin and destination among PRC, Hong Kong, Macau and Taiwan is classified as Hong Kong, Macau and Taiwan revenue; while that with origin from or destination to other overseas markets is classified as international revenue.

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(2) Revenue from commission income, general aviation, cargo handling, hotel and tour operation, ground services, air catering services and other miscellaneous services are classified on the basis of where the services are performed.

	2022		2021
	RMB million		RMB million
Domestic		57,256		76,517
International		29,249		24,739
Hong Kong, Macau and Taiwan		554		388
		87,059		101,644

The major revenue earning assets of the Group are its aircraft fleet which is registered in the PRC and is deployed across its worldwide route network. Majority of the Group’s other assets are located in the PRC. CODM considers that there is no suitable basis for allocating such assets and related liabilities to geographical locations. Accordingly, geographical segment assets and liabilities are not disclosed.

(d) Reconciliation of reportable segment loss before income tax, assets and liabilities to the consolidated figures as reported in the consolidated financial statements

	2022			2021
	RMB million			RMB million
Loss before income tax
Reportable segment loss before taxation		(31,526	)		(13,903	)
Capitalisation of exchange difference of specific loans		(25	)		(8	)
Government grants		1			1
Consolidated loss before income tax		(31,550	)		(13,910	)

	31 December 2022			31 December 2021
	RMB million			RMB million
Asset
Reportable segment assets		312,001			322,948
Capitalisation of exchange difference of specific loans		14			39
Government grants		(4	)		(5	)
Adjustments arising from business combinations under common control		237			237
Others		(2	)		(8	)
Consolidated total assets		312,246			323,211

Liabilities

As at 31 December 2022 and 2021, the amount of reportable segment liabilities is the same as the amount of consolidated total liabilities.

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5 FLIGHT OPERATION EXPENSES

	2022		2021
	RMB million		RMB million
Jet fuel costs		32,669		25,505
Flight personnel payroll and welfare		10,602		10,763
Air catering expenses		1,332		1,577
Civil Aviation Development Fund		704		1,059
Aircraft operating lease charges		791		920
Training expenses		898		690
Aircraft insurance		176		184
Others		4,069		4,871
		51,241		45,569

6 DEPRECIATION AND AMORTISATION

	2022		2021
	RMB million		RMB million
Depreciation of property, plant and equipment		8,659		8,835
Depreciation of right-of-use assets		15,067		14,888
Other amortisation		540		518
		24,266		24,241

7 OTHER NET INCOME

	2022		2021
	RMB million		RMB million
Government grants		4,688		4,040
Gains on disposal of property, plant and equipment and right-of-use assets
– Aircraft and spare engines		275		149
– Other property, plant and equipment and right-of-use assets		25		214
Others		673		364
		5,661		4,767

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8 INTEREST EXPENSE

	2022			2021
	RMB million			RMB million
Interest on borrowings		2,797			2,448
Interest relating to leases liabilities		3,899			4,434
Total interest expense on financial liabilities not at fair value through profit or loss		6,696			6,882
Less: interest expense capitalised (Note)		(690	)		(701	)
		6,006			6,181
Interest rate swaps: cash flow hedge, reclassified from equity		—			21
		6,006			6,202

Note: The weighted average interest rate used for interest capitalisation was 2.54% per annum in 2022 (2021: 2.61%).

9 INCOME TAX

(a) Income tax debit/(credit) in the consolidated income statement

	2022			2021
	RMB million			RMB million
PRC income tax
– Provision for the year		1,854			2,159
– (Over)/under-provision in prior year		(2	)		35
		1,852			2,194
Deferred tax
Origination and reversal of temporary differences		314			(5,088	)
Income tax debit/(credit)		2,166			(2,894	)

In respect of a majority of the Group’s airlines operation outside mainland China, the Group has either obtained exemptions from overseas taxation pursuant to the bilateral aviation agreements between the overseas governments and the PRC government, or has sustained tax losses in those overseas jurisdictions. Accordingly, no provision for overseas income tax has been made for overseas airlines operation in the current and prior years.

For the year of 2022, the Company and its branches and subsidiaries in mainland China are subject to income tax rates ranging from 15% to 25% (2021: 15% to 25%), and certain subsidiaries of the Company in Hong Kong are subject to income tax at 16.5%(2021: 16.5%).

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(b) Reconciliation between actual income tax debit/(credit) and calculated tax based on accounting loss at applicable income tax rates

	2022			2021
	RMB million			RMB million
Loss before income tax		(31,550	)		(13,910	)
Notional tax on loss before taxation, calculated at the rates applicable to loss in the tax jurisdictions concerned		(7,678	)		(3,380	)
Adjustments for tax effect of:
Non-deductible expenses		90			96
Share of results of associates and joint ventures and other non-taxable income		(76	)		(70	)
Unused tax losses and deductible temporary differences for which no deferred tax assets were recognised		6,956			489
Reversal of tax losses recognised as deferred tax assets in prior years		2,916			—
Utilisation of unused tax losses and deductible temporary differences for which no deferred tax assets were recognised in prior years		(1	)		(32	)
(Over)/under-provision in prior year		(2	)		35
Super deduction of research and development expenses		(39	)		(32	)
Income tax debit/(credit)		2,166			(2,894	)

10 LOSS PER SHARE

The calculation of basic loss per share for the year ended 31 December 2022 is based on the loss attributable to equity shareholders of the Company of RMB32,699 million (2021: RMB12,106 million) and the weighted average of 17,205,242,710 shares in issue during the year (2021: 16,201,129,384 shares).

	2022		2021
	million		million
Issued ordinary shares at 1 January		16,948		15,329
Effect of issuance of shares		257		872
Weighted average number of ordinary shares at 31 December		17,205		16,201

The amount of diluted loss per share is the same as basic loss per share as the effect of convertible bonds is anti-dilutive for the year ended 31 December 2022 and for the year ended 31 December 2021.

11 DIVIDENDS

The directors did not recommend any final dividend in respect of the years ended 31 December 2022 and 2021.

- 17 -

12 PROPERTY, PLANT AND EQUIPMENT, NET

	Investment properties			Buildings			Aircraft			Other flight equipment including rotables			Machinery, equipment and vehicles			Total
	RMB million			RMB million			RMB million			RMB million			RMB million			RMB million
Cost:
At 1 January 2021		522			21,475			114,380			25,025			9,936			171,338
Additions		—			66			2,855			487			668			4,076
Transferred from construction in progress		—			2,097			8,796			434			486			11,813
Reclassification on change of holding intention:
– transferred to other property, plant and equipment		(32	)		32			—			—			—			—
– transferred from other property, plant and equipment		50			(50	)		—			—			—			—
Transferred to assets held for sale		—			—			(6,309	)		(152	)		—			(6,461	)
Transferred from right-of-use assets on exercise of purchase option (Note 14)		—			—			2,761			—			—			2,761
Others		9			—			—			—			—			9
Disposals		(8	)		(115	)		(6,393	)		(441	)		(556	)		(7,513	)
At 31 December 2021		541			23,505			116,090			25,353			10,534			176,023
At 1 January 2022		541			23,505			116,090			25,353			10,534			176,023
Additions		—			30			2,356			554			430			3,370
Transferred from construction in progress		—			788			4,360			65			141			5,354
Transferred from other assets		—			1,012			88			—			—			1,100
Reclassification on change of holding intention:
– transferred to other property, plant and equipment		(122	)		122			—			—			—			—
– transferred from other property, plant and equipment		146			(146	)		—			—			—			—
Transferred from right-of-use assets on exercise of purchase option (Note 14)		—			—			7,032			246			—			7,278
Transferred from right-of-use assets to investment properties (Note 14)		19			—			—			—			—			19
Transferred to assets held for sale		—			—			(2,861	)		—			—			(2,861	)
Disposals
– disposals		(7	)		(65	)		(10,558	)		(186	)		(221	)		(11,037	)
– disposal of subsidiaries		—			(62	)		—			(2,114	)		(39	)		(2,215	)
At 31 December 2022		577			25,184			116,507			23,918			10,845			177,031

- 18 -

	Investment properties			Buildings			Aircraft			Other flight equipment including rotables			Machinery, equipment and vehicles			Total
	RMB million			RMB million			RMB million			RMB million			RMB million			RMB million
Accumulated depreciation and impairment losses:
At 1 January 2021		210			5,440			59,517			14,308			5,717			85,192
Depreciation charge for the year		16			712			5,673			1,394			1,040			8,835
Reclassification on change of holding intention:
– transferred to other property, plant and equipment		(19	)		19			—			—			—			—
– transferred from other property, plant and equipment		35			(35	)		—			—			—			—
Transferred to assets held for sale		—			—			(2,746	)		(66	)		—			(2,812	)
Transferred from right-of-use assets on exercise of purchase option (Note 14)		—			—			1,202			—			—			1,202
Disposals		(6	)		(28	)		(4,270	)		(406	)		(414	)		(5,124	)
Provision for impairment losses		—			—			914			80			—			994
Impairment losses transferred to assets held for sale		—			—			(2,581	)		(60	)		—			(2,641	)
Impairment losses written off on disposals		—			—			(809	)		—			—			(809	)
At 31 December 2021		236			6,108			56,900			15,250			6,343			84,837
At 1 January 2022		236			6,108			56,900			15,250			6,343			84,837
Depreciation charge for the year		19			758			5,601			1,215			1,066			8,659
Reclassification on change of holding intention:
– transferred to other property, plant and equipment		(38	)		38			—			—			—			—
– transferred from other property, plant and equipment		25			(25	)		—			—			—			—
Transferred from right-of-use assets on exercise of purchase option (Note 14)		—			—			3,680			58			—			3,738
Transferred from right-of-use assets to investment properties (Note 14)		1			—			—			—			—			1
Transferred to assets held for sale		—			—			(2,178	)		—			—			(2,178	)
Disposals
– disposals		(7	)		(29	)		(7,239	)		(137	)		(185	)		(7,597	)
– disposal of subsidiaries		—			(39	)		—			(1,279	)		(29	)		(1,347	)
Provision for impairment losses (a)		—			—			348			68			—			416
Impairment losses transferred from right-of-use (Note 14)		—			—			429			—			—			429
Impairment losses written off on disposals		—			—			(444	)		—			—			(444	)
At 31 December 2022		236			6,811			57,097			15,175			7,195			86,514
Net book value:
At 31 December 2022		341			18,373			59,410			8,743			3,650			90,517
At 31 December 2021		305			17,397			59,190			10,103			4,191			91,186

- 19 -

(a) As at 31 December 2022, the Group reported aircraft and related equipment in the amount of RMB192,737 million. For the year ended 31 December 2022, the Group made impairment provision of RMB449 million in aggregate towards certain aged or market value declined aircraft and related equipment based on its fleet disposal plans. Among which, the impairment provision for owned aircraft and related equipment were RMB416 million, and the impairment provision for leased aircraft and related equipment were RMB33 million (Note 14). Provision were made when asset’s carrying amount exceed its recoverable amount. The estimated recoverable amounts of above aircraft and related equipment with impairment indications were based on the fair value less cost to sell, which was determined by reference to the appraisal results valued by external appraisal expert based on the cost method or market method.

13 CONSTRUCTION IN PROGRESS

	2022		2021
	RMB million		RMB million
Advance payment for aircraft and flight equipment		31,838		30,122
Others		1,462		1,725
		33,300		31,847

- 20 -

14 RIGHT-OF-USE ASSETS

	Aircraft and engines			Land use rights			Buildings			Others			Total
	RMB million			RMB million			RMB million			RMB million			RMB million
Cost:
At 1 January 2021		220,701			6,481			3,022			765			230,969
Additions		3,493			343			1,194			243			5,273
Transferred from construction in progress		302			61			—			152			515
Transferred to property, plant and equipment on exercise of purchase option (Note 12)		(2,761	)		—			—			—			(2,761	)
Transferred to assets held for sale		(1,582	)		—			—			—			(1,582	)
Disposals		(5,959	)		(75	)		(931	)		(26	)		(6,991	)
At 31 December 2021		214,194			6,810			3,285			1,134			225,423
At 1 January 2022		214,194			6,810			3,285			1,134			225,423
Additions		5,500			12			579			11			6,102
Transferred from construction in progress		5,706			—			—			71			5,777
Transferred from right-of-use assets to investment properties (Note 12)		—			(19	)		—			—			(19	)
Transferred to property, plant and equipment on exercise of purchase option (Note 12)		(7,032	)		—			—			(246	)		(7,278	)
Disposals
– disposals		(1,607	)		(53	)		(582	)		(145	)		(2,387	)
– disposal of subsidiaries		—			(47	)		(13	)		(64	)		(124	)
At 31 December 2022		216,761			6,703			3,269			761			227,494

- 21 -

	Aircraft and engines			Land use rights			Buildings			Others			Total
	RMB million			RMB million			RMB million			RMB million			RMB million
Accumulated amortisation and impairment losses:
At 1 January 2021		77,338			947			1,502			117			79,904
Amortisation charge for the year		13,616			140			954			178			14,888
Transferred to property, plant and equipment on exercise of purchase option (Note 12)		(1,202	)		—			—			—			(1,202	)
Transferred to assets held for sale		(616	)		—			—			—			(616	)
Disposals		(5,959	)		—			(913	)		(21	)		(6,893	)
Provision for impairment losses		1,585			—			—			—			1,585
Impairment losses transferred to assets held for sale		(682	)		—			—			—			(682	)
At 31 December 2021		84,080			1,087			1,543			274			86,984
At 1 January 2022		84,080			1,087			1,543			274			86,984
Amortisation charge for the year		13,767			173			937			190			15,067
Transferred to property, plant and equipment on exercise of purchase option (Note 12)		(3,680	)		—			—			(58	)		(3,738	)
Transferred from right-of-use assets to investment properties (Note 12)		—			(1	)		—			—			(1	)
Disposals
– disposals		(1,594	)		(25	)		(563	)		(145	)		(2,327	)
– disposal of subsidiaries		—			(12	)		(6	)		(31	)		(49	)
Impairment losses transferred to property, plant and equipment (Note 12)		(429	)		—			—			—			(429	)
Provision for impairment losses (Note 12(a))		33			—			—			—			33
At 31 December 2022		92,177			1,222			1,911			230			95,540
Net book value:
At 31 December 2022		124,584			5,481			1,358			531			131,954
At 31 December 2021		130,114			5,723			1,742			860			138,439

- 22 -

15 DEFERRED TAX ASSETS

Deferred tax assets arise from deductible temporary differences and unused tax losses are recognised to the extent that it is probable that future taxable profits will be available against which the related tax benefit can be utilised. The Group’s tax losses in the PRC are available for carrying forward to set off future assessable income for a maximum period of five or eight years (According to the Notice of the Ministry of Finance on the Taxation Policy for supporting the prevention of pandemic of Covid-19 (No. 8, 2020), the carry over period for tax losses of enterprises in certain difficult industries suffering from the epidemic in 2020 will be extended from 5 years to 8 years). Therefore, the Group’s tax losses occurred in 2020 can be carried forward for 5-8 years, and the Group’s tax losses occurred in other years can be carried forward for 5 years.

16 TRADE RECEIVABLES

Credit terms granted by the Group to sales agents and other customers generally range from one to three months. Ageing analysis of trade receivables based on transaction date is set out below:

	2022			2021
	RMB million			RMB million
Within 1 month		1,942			2,337
More than 1 month but less than 3 months		425			273
More than 3 months but less than 12 months		231			236
More than 1 year		74			51
		2,672			2,897
Less: loss allowance		(53	)		(39	)
		2,619			2,858

17 OTHER RECEIVABLES

	2022			2021
	RMB million			RMB million
VAT recoverable		5,609			7,854
Government grants receivables		985			474
Rebate receivables on aircraft acquisitions		493			302
Other deposits		166			155
Others		822			972
		8,075			9,757
Less: loss allowance		(136	)		(158	)
		7,939			9,599

- 23 -

18 DERIVATIVE FINANCIAL LIABILITIES

In October 2020, the Group issued a total of 160,000,000 A share convertible bonds with par value of RMB100 each at par. The convertible bonds have a term of six years from the date of the issuance and the convertible bonds bear interest at the annual rate of 0.2% in the first year, 0.4% in the second year, 0.6% in the third year, 0.8% in the fourth year, 1.5% in the fifth year and 2.0% in the sixth year. Interest is paid once a year. Conversion rights are exercisable from 21 April 2021 to 14 October 2026 at an initial conversion price of RMB6.24 per share, subject to clauses of adjustment and downward revision of conversion price, redemption and sell-back. Convertible bonds, which conversion rights have not been exercised in five transaction days after maturity, will be redeemed at 106.5% of par value (including the interest for the sixth year).

Any excess of proceeds over the fair value amount initially recognised as the derivative component is recognised as the host liability component. Transaction costs related to the issuance of the convertible bonds are allocated to the host liability and are recognised initially as part of the liability. The derivative component is subsequently remeasured at fair value while the host liability component is subsequently carried at amortised cost using the effective interest method.

For the year ended 31 December 2022, 1,920 convertible bonds were converted to A shares (for the year ended 31 December 2021, 101,034,070 convertible bonds were converted to A shares) at the conversion price from RMB6.17 per share to RMB6.24 per share. As at 31 December 2022, the carrying amount of liability component of the remaining 58,964,010 A share convertible bonds was RMB5,250 million (31 December 2021: 58,965,930 A share convertible bonds with a carrying amount of RMB4,992 million), and the fair value of the derivative component of the remaining 58,964,010 A share convertible bonds was RMB1,708 million (31 December 2021: 58,965,930 A share convertible bonds with fair value of RMB1,222 million). For the year ended 31 December 2022, the loss on the changes in fair value of the derivative component amounted to RMB486 million was recognised (31 December 2021: loss on the changes in fair value amounted to RMB269 million).

- 24 -

19 BORROWINGS

Borrowings are analysed as follows:

	2022		2021
	RMB million		RMB million
Non-current
Long-term borrowings		15,316		15,389
Corporate bonds		—		1,000
Convertible bonds		5,240		4,984
Medium-term notes		13,888		16,981
		34,444		38,354
Current
Current portion of long-term borrowings		10,773		169
Short-term borrowings		53,674		25,116
Ultra-short-term financing bills		12,536		24,710
Current portion of corporate bonds and medium-term notes		8,343		7,910
Current portion of convertible bonds		10		8
		85,336		57,913
Total borrowings		119,780		96,267
The borrowings are repayable:
Within one year		85,336		57,913
In the second year		14,167		18,611
In the third to fifth year		17,599		16,747
After the fifth year		2,678		2,996
Total borrowings		119,780		96,267

Certain of the Group’s banking facilities are subject to the fulfilment of covenants relating to the Group’s certain financial ratios, as are commonly found in lending arrangements with financial institutions. If the Group were to breach the covenants, the drawn down facilities would become payable on demand. The Group regularly monitors its compliance with these covenants. As at 31 December 2022, for short- term borrowings with an aggregate amount of RMB27,400 million, the loan covenants relating to certain financial ratios were breached (31 December 2021: nil). The Group has obtained waiver from the respective financial institution, pursuant to which, the financial institution will not require the Group to repay the borrowings until the due dates, and will maintain the credit facilities granted to the Group.

- 25 -

20 LEASE LIABILITIES

At 31 December 2022, the lease liabilities were payable as follows:

	2022		2021
	RMB million		RMB million
Within 1 year		21,799		20,805
After 1 year but within 2 years		17,412		19,229
After 2 years but within 5 years		36,225		38,950
After 5 years		19,326		23,765
		94,762		102,749

The Group has significant lease liabilities which are denominated in USD as at 31 December 2022. The net exchange loss of RMB3,619 million for the year ended 31 December 2022 (2021: net exchange gain of RMB1,575 million) was mainly attributable to the translation of balances of lease liabilities which are denominated in USD.

21 TRADE PAYABLES

Ageing analysis of trade payables based on transaction date is set out below:

	2022		2021
	RMB million		RMB million
Within 1 month		420		403
More than 1 month but less than 3 months		437		221
More than 3 months but less than 6 months		265		221
More than 6 months but less than 1 year		129		268
More than 1 year		286		215
		1,537		1,328

- 26 -

B. PREPARED IN ACCORDANCE WITH THE PRC GAAP

CONSOLIDATED INCOME STATEMENT

For the year ended 31 December 2022

	2022			2021
	RMB million			RMB million
Revenue		87,059			101,644
Less: Operating costs		105,862			104,229
Taxes and surcharges		240			365
Selling and distribution expenses		4,555			4,993
General and administrative expenses		3,560			3,678
Research and development expenses		389			381
Finance expenses		9,240			4,025
Including: interest expense		6,006			6,202
interest income		457			675
Add: Other income		4,670			3,964
Investment income		555			284
Including: income from investment in associates and joint ventures		291			280
Loss on fair value movement		(388	)		(309	)
Credit losses		3			1
Impairment losses		(582	)		(2,614	)
Gain on assets disposals		330			399
Operating loss		(32,199	)		(14,302	)
Add: Non-operating income		710			660
Less: Non-operating expenses		37			261
Loss before income tax		(31,526	)		(13,903	)
Less: Income tax		2,172			(2,892	)
Net loss for the year		(33,698	)		(11,011	)
(1) Net loss classified by continuity of operations:
1. Net loss from continuing operations		(33,698	)		(11,011	)
2. Net loss from discontinued operations		—			—
(2) Net loss classified by ownership:
1. Shareholders of the Company		(32,682	)		(12,103	)
2. Non-controlling interests		(1,016	)		1,092

- 27 -

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 31 December 2022

	31 December 2022		31 December 2021
	RMB million		RMB million
Assets
Current assets
Cash at bank and on hand		20,240		21,841
Derivative financial instruments		2		—
Bills receivables		—		4
Account receivables		2,656		2,894
Prepayments		619		736
Other receivables		1,943		1,275
Inventories		1,387		1,652
Assets held for sale		26		1,292
Non-current assets due within one year		152		138
Other current assets		5,746		8,034
Total current assets		32,771		37,866
Non-current assets
Long-term equity investments		6,205		5,977
Other equity instrument investment		659		563
Other non-current financial assets		49		95
Investment properties		341		305
Fixed assets		90,810		90,817
Construction in progress		33,322		31,869
Right-of-use assets		126,491		132,725
Intangible assets		6,547		6,564
Long-term receivables		744		645
Aircraft lease deposits		354		321
Long-term deferred expenses		624		768
Derivative financial instruments		27		—
Deferred tax assets		12,473		12,831
Other non-current assets		584		1,602
Total non-current assets		279,230		285,082
Total assets		312,001		322,948

- 28 -

	31 December 2022		31 December 2021
	RMB million		RMB million
Liabilities and shareholders’ equity
Current liabilities
Short-term bank borrowings		53,674		25,116
Derivative financial liabilities		1,708		1,222
Accounts payable		14,351		12,183
Contract liabilities		1,496		1,542
Sales in advance of carriage		3,383		3,716
Employee benefits payable		4,564		4,457
Taxes payable		640		1,140
Other payables		7,939		7,914
Non-current liabilities due within one year		41,167		28,990
Other current liabilities		12,536		24,710
Total current liabilities		141,458		110,990
Non-current liabilities
Long-term ban borrowings		15,316		15,389
Bonds payable		19,128		22,965
Derivative financial liabilities		—		20
Lease liabilities		72,963		81,944
Long-term payable		289		193
Provision for major overhauls		5,199		4,820
Deferred benefits and gains		760		725
Deferred tax liabilities		24		26
Other non-current liabilities		1,750		1,631
Total non-current liabilities		115,429		127,713
Total liabilities		256,887		238,703

- 29 -

	31-Dec 2022			31-Dec 2021
	RMB million			RMB million
Net assets
Share capital		18,121			16,948
Capital reserve		52,775			47,887
Other comprehensive income		261			159
Surplus reserve		2,579			2,579
(Accumulated losses)/retained earnings		(32,679	)		43
Total equity attributable to equity shareholders of the Company		41,057			67,616
Non-controlling interests		14,057			16,629
Total equity		55,114			84,245
Total liabilities and equity		312,001			322,948

- 30 -

C. RECONCILIATION OF DIFFERENCES IN FINANCIAL STATEMENTS PREPARED UNDER PRC GAAP AND IFRSs

Difference in loss and equity attributable to equity shareholders of the Company under consolidated financial information in financial statements between IFRSs and PRC GAAP

	Loss attributable to equity shareholders of the Company						Equity attributable to equity shareholders of the Company
	2022			2021			31-Dec 2022			31-Dec 2021
	RMB million			RMB million			RMB million			RMB million
Amounts under PRC GAAP		(32,682	)		(12,103	)		41,057			67,616
Adjustments:
Capitalisation of exchange difference of specific loans		(25	)		(8	)		14			39
Government grants		1			1			(4	)		(5	)
Adjustment arising from the Company’s business combination under common control		—			—			237			237
Income tax effect of the above adjustments		6			2			(2	)		(8	)
Effect of the above adjustments on non- controlling interests		1			2			(27	)		(28	)
Amounts under IFRSs		(32,699	)		(12,106	)		41,275			67,851

- 31 -

BUSINESS REVIEW

In 2022, the global economic growth slowed down due to factors such as inflation. The World Economic Outlook report published by the International Monetary Fund shows that the global economic growth in 2022 is 3.4%. China balanced the economic and social development, and its comprehensive national strength improved, with a GDP of RMB121 trillion, a year-on-year increase of 3.0%.

In 2022, despite the multiple challenges, China’s civil aviation industry presented a solid development trend. The Total Transport Turnover, Passenger Volume, and Cargo and Mail Volume for the whole year were 59.93 billion ton-kilometers, 250 million passengers and 6.076 million tons, respectively, back to 46.3%, 38.1% and 80.7% of 2019 levels. The Group gave top priority to aviation safety, and actively responded to the operation challenges towards the goal of high-quality development. During the Reporting Period, with the joint efforts of the management and all employees, the Group recorded 1.557 million flight hours, carried 62.64 million passengers and 1.33 million tons of cargo and mail. We won the “Best Airline in China” award by Skytrax for the first time, and have been honored as the “Best Airline of the Year” by Civil Aviation Passenger Service Evaluation (“CAPSE”) for five consecutive years, and as the First Brand in Aviation Service Industry by the Ministry of Industry and Information Technology in China Brand Power Research for 12 consecutive years.

1. Safety Management

During the Reporting Period, the Group gave top priority to aviation safety, consolidated and intensified the three-year campaign of safety rectification, and further pushed forward the construction of seven safety systems. We developed a safety management plan focusing on organizational and systematic monitoring, drafted and improved the lists of position-based responsibilities for safety to facilitate the fulfillment of safety management responsibilities. We expanded the scope of safety audits, launched special campaigns to prevent and resolve major risks and risks in relation to fire and hazardous chemicals, and conducted large-scale safety discussion and inspection to eliminate potential problems and hazards from time to time. During the Reporting Period, the Group achieved 1.557 million hours of safe flight with continuous improvement in safety and quality.

2. Management Response

During the Reporting Period, the Group actively developed operational response plans in response to market changes, and made every effort to enhance operating efficiency. In terms of passenger transport, we adhered to the strategy of maximizing marginal contribution while proactively capturing flight slot resources, building a customer management system framework, innovating marketing methods, and establishing a smart recommendation and content marketing platform for mobile users. We took multiple measures to ensure the efficiency of our cargo transport business, with a focus on sales of return flights from foreign countries, end customers management, and control of high-premium cabin seats and pricing. During the Reporting Period, the Group organized 9,098 freight flights converted from passenger aircrafts, and completed cargo and mail transportation volume of 1.33 million tons.

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3. Operation Service

During the Reporting Period, the Group steadily improved its operation quality with service brand highlights. We continuously carried out special actions to improve flight punctuality, optimized the fast transfer plan, established the AOC and GOC disaster recovery centers, and flight dispatching centers, maintaining a leading position in the industry in terms of flight on- time performance rate. Upholding the concept of “affinity and refinement” services, we provided “humanized, digital, refined, personalized and convenient” services, established a service quality management department, improved the service control platform, set up self-help luggage service platform and developed 125 types of “home flavor” in-flight meals.

4. Implementation of Strategies

During the Reporting Period, the Group implemented the general strategy of high-quality development and accelerated the implementation of major strategies. We constructed the Beijing hub with high quality and continuously optimized the flight schedule of Daxing Airport, increasing the number of high-yield flights departing from the Beijing hub. The Group’s market share in Daxing Airport reached 53.7%. We have focused on improving our market control in the Greater Bay Area and actively sought to add new flight slot resources. The market share of domestic departure capacity in Guangzhou, Shenzhen, Zhuhai and Huizhou was at the forefront. We continued to promote the optimization of the five major structures of fleet, market, human resources, industry, and assets and liabilities, and explored diversified financing channels. During the Reporting Period, the Group completed a non-public issuance of shares and raised funds of approximately RMB6.05 billion.

5. Reform and Development

During the Reporting Period, the Group successfully completed the three-year reform action and took the action of targeting world’s first-class management. We vigorously promoted the tenure system and contractual management, and improved the market-oriented operation mechanism; we continued to advance the reform of aircraft maintenance, and completed the shareholding system reform for the “double hundred enterprises” (i.e. China Southern Airlines Cargo Logistics (Guangzhou) Company Limited and China Southern Airlines General Aviation Limited); we strengthened the ESG function of the board of directors and promoted subsidiaries to establish the authorization mechanisms; we strengthened network security management, built an adaptation testing center, and passed international standard certification for information security management systems; we optimized real estate investment and operation, and formulated resource allocation standards.

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6. Social Responsibility

During the Reporting Period, the Group proactively performed social responsibilities to serve the development of rural revitalization. We fully implemented the seven actions of carbon neutrality, established an aircraft weight management system, and achieved the plastic quota targets; we carried out in-depth activities of employee care and concern, especially for front-line positions and isolated personnel, and implemented the special initiative to improve the quality of life of workers, and the youth literacy improvement program. During the Reporting Period, the Group spent RMB74.2145 million to help alleviate poverty and attracted a total investment of RMB350 million through the investment promotion.

OPERATING DATA SUMMARY

The following table sets forth operating data by geographic regions:

	For the year ended 31 December				Increase/ (decrease)
	2022		2021
					(%)
Traffic
Revenue passenger kilometers (RPK) (million)
Domestic		96,988.77		148,223.63		(34.57	)
Hong Kong, Macau and Taiwan		175.05		152.48		14.80
International		4,913.87		4,050.18		21.32
Total:		102,077.70		152,426.29		(33.03	)
Revenue tonne kilometers (RTK) (million)
Domestic		9,593.64		14,389.54		(33.33	)
Hong Kong, Macau and Taiwan		22.86		25.48		(10.30	)
International		6,767.24		6,793.68		(0.39	)
Total:		16,383.74		21,208.71		(22.75	)
RTK – passenger (million)
Domestic		8,546.41		13,124.43		(34.88	)
Hong Kong, Macau and Taiwan		15.50		13.48		14.99
International		435.17		359.50		21.05
Total:		8,997.08		13,497.41		(33.34	)

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	For the year ended 31 December				Increase/ (decrease) (%)
	2022		2021
RTK – cargo (million)
Domestic		1,047.23		1,265.11		(17.22	)
Hong Kong, Macau and Taiwan		7.36		12.01		(38.69	)
International		6,332.07		6,434.18		(1.59	)
Total:		7,386.66		7,711.30		(4.21	)
Passengers carried (thousand)
Domestic		61,666.22		97,717.02		(36.89	)
Hong Kong, Macau and Taiwan		157.23		147.75		6.42
International		812.62		639.89		26.99
Total:		62,636.06		98,504.66		(36.41	)
Cargo and mail carried (thousand tonnes)
Domestic		633.61		765.34		(17.21	)
Hong Kong, Macau and Taiwan		6.87		12.19		(43.68	)
International		686.17		664.42		3.27
Total:		1,326.64		1,441.95		(8.00	)
Capacity
Available seat kilometres (ASKs) (million)
Domestic		145,655.54		205,437.17		(29.10	)
Hong Kong, Macau and Taiwan		410.36		463.01		(11.37	)
International		7,779.24		8,021.64		(3.02	)
Total:		153,845.14		213,921.82		(28.08	)
Available tonne kilometres (ATKs) (million)
Domestic		16,139.92		23,431.06		(31.12	)
Hong Kong, Macau and Taiwan		55.49		61.20		(9.33	)
International		10,026.34		10,025.45		0.01
Total:		26,221.74		33,517.70		(21.77	)

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	For the year ended 31 December				Increase/ (decrease) (%)
	2022		2021
Available tonne kilometres (ATKs) – passenger (million)
Domestic		13,109.00		18,489.35		(29.10	)
Hong Kong, Macau and Taiwan		36.93		41.67		(11.37	)
International		700.13		721.95		(3.02	)
Total:		13,846.06		19,252.96		(28.08	)
Available tonne kilometres (ATKs) – cargo (million)
Domestic		3,030.92		4,941.71		(38.67	)
Hong Kong, Macau and Taiwan		18.55		19.53		(4.98	)
International		9,326.20		9,303.50		0.24
Total:		12,375.68		14,264.74		(13.24	)
	For the year ended 31 December				Increase/ (decrease) percentage points
	2022		2021
Load factor
Passenger load factor (RPK/ASK) (%)
Domestic		66.59		72.15		(5.56	)
Hong Kong, Macau and Taiwan		42.66		32.93		9.72
International		63.17		50.49		12.68
Average:		66.35		71.25		(4.90	)
Overall load factor (RTK/ATK) (%)
Domestic		59.44		61.41		(1.97	)
Hong Kong, Macau and Taiwan		41.20		41.64		(0.44	)
International		67.49		67.76		(0.27	)
Average:		62.48		63.28		(0.79	)

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	For the year ended 31 December				Increase/ (decrease) (%)
	2022		2021
Yield
Yield per RPK (RMB)
Domestic		0.51		0.46		10.87
Hong Kong, Macau and Taiwan		2.66		1.46		82.19
International		2.00		1.61		24.22
Average:		0.59		0.49		20.41
Yield per RFTK (RMB)
Domestic		1.31		1.18		11.02
Hong Kong, Macau and Taiwan		11.96		13.74		(12.95	)
International		3.07		2.83		8.48
Average:		2.83		2.58		9.69
Yield per RTK (RMB)
Domestic		5.33		4.88		9.22
Hong Kong, Macau and Taiwan		24.23		15.23		59.09
International		4.32		3.64		18.68
Average:		4.94		4.49		10.02
Cost
Operating expenses per ATK (RMB)		4.40		3.47		26.80
Flight Volume
Kilometers flown (million)		994.38		1,317.85		(24.55	)
Hours flown (thousand)
Domestic		1,373.91		1,935.98		(29.03	)
Hong Kong, Macau and Taiwan		3.17		3.78		(16.19	)
International		179.61		170.60		5.28
Total:		1,556.69		2,110.36		(26.24	)
Number of flights (thousand)
Domestic		578.27		822.25		(29.67	)
Hong Kong, Macau and Taiwan		1.84		2.27		(19.03	)
International		21.43		18.80		13.99
Total:		601.54		843.32		(28.67	)

Note: �� Operating data are retained to two decimal places, discrepancies between the column and the total sum are due to rounding of numbers.

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MANAGEMENT DISCUSSION AND ANALYSIS

I. FINANCIAL PERFORMANCE

Part of the financial information presented in this section below is derived from the Group’s audited consolidated financial statements that have been prepared in accordance with IFRSs.

The net loss attributable to equity shareholders of the Company of RMB32,699 million was recorded in 2022 as compared to the net loss attributable to equity shareholders of the Company of RMB12,106 million in 2021. The Group’s total operating revenue decreased by RMB14,585 million or 14.35% from RMB101,644 million in 2021 to RMB87,059 million in 2022. Passenger load factor decreased by 4.90 percentage points from 71.25% in 2021 to 66.35% in 2022. Yield per RPK increased by 10.87% from RMB0.49 in 2021 to RMB0.58 in 2022. Yield per RTK increased by 10.02% from RMB4.49 in 2021 to RMB4.94 in 2022. Operating expenses decreased by RMB1,078 million or 0.93% from RMB116,340 million in 2021 to RMB115,262 million in 2022. Mainly affected by multiple adverse factors, operating loss of RMB22,542 million was recorded in 2022 as compared to operating loss of RMB9,929 million in 2021.

II. OPERATING REVENUE

	2022					2021
	Operating revenue			Percentage		Operating revenue RMB million			Percentage %		Changes in revenue %
	RMB million			%
Traffic revenue		80,901			92.93		95,279			93.74		(15.09	)
Including: Passenger revenue		60,017					75,392					(20.39	)
– Domestic		49,723					68,656					(27.58	)
– Hong Kong, Macau and Taiwan		466					223					108.97
– International		9,828					6,513					50.90
Cargo and mail revenue		20,884					19,887					5.01
Other operating revenue		6,158			7.07		6,365			6.26		(3.25	)
Mainly including:
Commission income		2,073					2,677					(22.56	)
Ground services income		282					326					(13.50	)
General aviation income		431					572					(24.65	)
Hotel and tour operation income		497					538					(7.62	)
Cargo handling income		1,123					864					29.98
Total operating revenue		87,059			100.00		101,644			100.00		(14.35	)
Less: fuel surcharge income		(6,054	)				(673	)				799.55
Total operating revenue excluding fuel surcharge		81,005					100,971					(19.77	)

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Substantially all of the Group’s operating revenue is attributable to airlines transport operations. Traffic revenue accounted for 93.74% and 92.93% of the total operating revenue in 2021 and 2022, respectively. Passenger revenue and cargo and mail revenue accounted for 74.19% and 25.81%, respectively, of the total traffic revenue in 2022. During the reporting period, the Group’s total traffic revenue was RMB80,901 million, representing a decrease of RMB14,378 million or 15.09% from prior year, because of the decrease in passenger revenue. The other operating revenue of the Group is mainly derived from commission income, ground services income, general aviation income, hotel and tour operation income and cargo handling income.

The decrease in operating revenue was primarily due to a decrease in passenger revenue by 20.39% from RMB75,392 million in 2021 to RMB60,017 million in 2022. The total number of passengers carried decreased by 36.41% to 63 million passengers in 2022. RPKs decreased by 33.03% from 152,426 million in 2021 to 102,078 million in 2022, mainly due to the impact of the travel restrictions.

Domestic passenger revenue, which accounted for 82.85% of the total passenger revenue in 2022, decreased by 27.58% from RMB68,656 million in 2021 to RMB49,723 million in 2022. Domestic passenger traffic in RPKs decreased by 34.57%, while passenger capacity in ASKs decreased by 29.10%, resulting in a decrease in passenger load factor by 5.56 percentage points from 72.15% in 2021 to 66.59% in 2022.Yield per RPK increased by 10.87% from RMB0.46 in 2021 to RMB0.51 in 2022.

Hong Kong, Macau and Taiwan passenger revenue, which accounted for 0.78% of total passenger revenue, increased by 108.97% from RMB223 million in 2021 to RMB466 million in 2022. For Hong Kong, Macau and Taiwan flights, passenger traffic in RPKs increased by 14.80%, while passenger capacity in ASKs decreased by 11.37%, resulting in an increase in passenger load factor by 9.73 percentage points from 32.93% in 2021 to 42.66% in 2022. Passenger yield per RPK increased from RMB1.46 in 2021 to RMB2.66 in 2022.

International passenger revenue, which accounted for 16.38% of total passenger revenue, increased by 50.90% from RMB6,513 million in 2021 to RMB9,828 million in 2022, primarily due to the increase in number of passengers carried. For international flights, passenger traffic in RPKs increased by 21.32%, while passenger capacity in ASKs decreased by 3.02%, resulting in an increase in passenger load factor by 12.68 percentage points from 50.49% in 2021 to 63.17% in 2022. Passenger yield per RPK increased from RMB1.61 in 2021 to RMB2.00 in 2022.

Cargo and mail revenue, which accounted for 25.81% of the Group’s total traffic revenue and 23.99% of total operating revenue, increased by 5.01% from RMB19,887 million in 2021 to RMB20,884 million in 2022.

Other operating revenue decreased by 3.25% from RMB6,365 million in 2021 to RMB6,158 million in 2022.

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III. OPERATING EXPENSES

Total operating expenses in 2022 amounted to RMB115,262 million, representing a decrease of RMB1,078 million or 0.93% comparing to that of 2021. Total operating expenses as a percentage of total operating revenue increased from 114.46% in 2021 to 132.40% in 2022.

Operating expenses	2022				2021
	RMB million		Percentage (%)		RMB million		Percentage (%)
Flight operation expenses		51,241		44.46		45,569		39.17
Mainly including:
Jet fuel costs		32,669				25,505
Aircraft operating lease charges		791				920
Flight personnel payroll and welfare		10,602				10,763
Maintenance expenses		11,224		9.74		12,162		10.45
Aircraft and transportation service expenses		17,506		15.19		21,147		18.18
Promotion and selling expenses		4,355		3.78		4,705		4.04
General and administrative expenses		3,511		3.05		3,663		3.15
Depreciation and amortisation		24,266		21.05		24,241		20.84
Impairment losses on property, plant and equipment, right-of-use assets and other assets		449		0.39		2,597		2.23
Hotel and tour operation expense		418		0.36		423		0.36
External air catering service expense		343		0.30		368		0.32
Financial institution charges		72		0.06		74		0.06
Cargo handling expense		537		0.46		398		0.34
Others		1,340		1.16		993		0.86
Total operating expenses		115,262		100.00		116,340		100.00

Flight operation expenses, which accounted for 44.46% of total operating expenses, increased by 12.45% from RMB45,569 million in 2021 to RMB51,241 million in 2022, mainly resulted from the increase of jet fuel costs.

Maintenance expenses, which accounted for 9.74% of total operating expenses, decreased by 7.71% from RMB12,162 million in 2021 to RMB11,224 million in 2022 due to the decrease of flight volume.

Aircraft and transportation service expenses, which accounted for 15.19% of total operating expenses, decreased by 17.22% from RMB21,147 million in 2021 to RMB17,506 million in 2022. The decrease was primarily due to a decrease in landing and navigation fees as a result of a decrease in the amounts of take-off and landing.

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Promotion and selling expenses, which accounted for 3.78% of total operating expenses, decreased by 7.44% from RMB4,705 million in 2021 to RMB4,355 million in 2022.

General and administrative expenses, which accounted for 3.05% of the total operating expenses, stayed at the same level in amounts as compared to 2021.

Depreciation and amortisation, which accounted for 21.05% of the total operating expenses, stayed at the same level in amounts as compared to 2021.

Impairment losses on property, plant and equipment, right-of-use assets and other assets, which accounted for 0.39% of the total operating expenses, decreased by 82.71% from RMB2,597 million in 2021 to RMB449 million in 2022, mainly due to the decrease of impairment provision for aircraft and related equipment.

IV. OPERATING LOSS

Operating loss of RMB22,542 million was recorded in 2022 (2021: Operating loss of RMB9,929 million). The increase of the operating loss is mainly due to the impact of multiple adverse factors resulting in the reduction of revenue and increase in jet fuel cost.

V. OTHER NET INCOME

Other net income increased by RMB894 million from RMB4,767 million in 2021 to RMB5,661 million in 2022, mainly due to an increase of government subsidies.

VI. INCOME TAX

Income tax expense of RMB2,166 million was recorded in 2022 (2021: income tax credit of RMB2,894 million was recorded), mainly due to the increase of accumulated tax losses not recognised as deferred tax assets.

VII. LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE

As at 31 December 2022, the Group’s current liabilities exceeded its current assets by RMB108,004 million. For the year ended 31 December 2022, the Group recorded a net cash outflow from operating activities of RMB2,450 million, a net cash outflow from investing activities of RMB5,851 million and a net cash inflow from financing activities of RMB6,658 million, which in total resulted in a net decrease in cash and cash equivalents of RMB1,643 million.

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The Group is dependent on its ability to maintain adequate cash inflow from operations, its ability to maintain existing external financing, and its ability to obtain new external financing to meet its debt obligations as they fall due and to meet its committed future capital expenditures. The Group’s policy is to regularly monitor its liquidity requirements and its compliance with lending covenants, to ensure that it maintains sufficient reserves of cash and adequate committed lines of funding from major financial institutions to meet its liquidity requirements in the short and longer term. As at 31 December 2022, the Group has obtained credit facilities of RMB320,530 million in aggregate granted by several banks and other financial institute, among which approximately RMB223,729 million was unutilised. The Directors of the Company believe that sufficient financing will be available to the Group when and where needed.

The analyses of the Group’s total interest-bearing liabilities are as follows:

Composition of interest-bearing liabilities

	31 December 2022		31 December 2021
	RMB million		RMB million
Lease liabilities		94,762		102,749
Borrowings		119,780		96,267
Long-term payables		531		291
Fixed rate interest-bearing liabilities		158,809		144,553
Floating rate interest-bearing liabilities		56,264		54,754

Analysis of interest-bearing liabilities by currency

	31 December 2022		31 December 2021
	RMB million		RMB million
USD		41,271		43,778
RMB		171,176		152,429
Others		2,626		3,100
Total		215,073		199,307

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Maturity analysis of interest-bearing liabilities

	31 December 2022		31 December 2021
	RMB million		RMB million
Within 1 year		107,377		78,816
1 year but within 2 years		31,768		37,942
2 years but within 5 years		53,924		55,761
5 years		22,004		26,788
Total		215,073		199,307

Interest expense and exchange difference/net exchange loss

Interest expense decreased slightly by RMB196 million from RMB6,202 million in 2021 to RMB6,006 million in 2022.

Net exchange loss of RMB3,619 million was recorded in 2022, as compared with a net exchange gain of RMB1,575 million in 2021. Net exchange loss was primarily resulted from the depreciation of Renminbi against the U.S. dollar in 2022.

The Group’s capital structure at the end of the year is as follows:

	31 December 2022			31 December 2021			Change
Total liabilities (RMB million)		256,887			238,703			7.62	%
Total assets (RMB million)		312,246			323,211			(3.39	%)
Debt ratio		82.27	%		73.85	%		Increased by 8.42 percentage point

The Group monitors capital on the basis of debt ratio, which is calculated as total liabilities divided by total assets. The debt ratio increased by 8.42 percentage point compared to that of the end of 2021, mainly due to the increase in borrowing.

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VIII. MAJOR CHARGE ON ASSETS

As at 31 December 2022, no property, plant and equipment of the Group (31 December 2021: nil) were mortgaged for bank borrowings.

IX. COMMITMENTS AND CONTINGENCIES

Commitments

As at 31 December 2022, the Group had capital commitments (excluding investment commitment) of RMB106,644 million (31 December 2021: RMB64,243 million). Of which, RMB97,329 million (31 December 2021: RMB54,662 million) related to the acquisition of aircraft and related flight equipment and RMB9,315 million (31 December 2021: RMB9,581 million) related to other projects of the Group.

The Group had investment commitments as follows:

	31 December 2022		31 December 2021
	RMB million		RMB million
Authorised and contracted for:
Share of capital commitments of a joint venture		52		185
Capital contributions for acquisition of interest in an associate		171		171
		223		356
Authorised but not contracted for:
Share of capital commitments of a joint venture		14		24
		237		380

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Contingent liabilities

(a) The Group leased certain properties and buildings from CSAH which were located in Guangzhou, Wuhan, Haikou, etc. Although such properties and buildings were used by CSAH before being leased to the Group, as known to the Group, such properties and buildings lack adequate documentation evidencing CSAH’s rights thereto. Pursuant to the indemnification agreement dated 22 May 1997 entered into between the Group and CSAH, CSAH has agreed to indemnify the Group against any loss or damage arising from any challenge of the Group’s right to use the aforementioned properties and buildings.

(b) The Group entered into certain agreements with CSAH in prior years to acquire certain land use right and buildings from CSAH. As of the date of the results announcement, the change of business registration of such land use right and buildings are still in progress. CSAH issued letters of commitment to the Company, committing to indemnify the Group against any claims from third parties to the Group, or any loss or damage in the Group’s operation activities due to lack adequate documentation of the certain properties and buildings, without recourse to the Group.

(c) The Company and its subsidiary, Xiamen Airlines, entered into agreements with certain pilot trainees and certain banks to provide guarantees on personal bank loans amounting to RMB562 million (31 December 2021: RMB696 million) that can be drawn by the pilot trainees to finance their respective flight training expenses. As at 31 December 2022, total personal bank loans of RMB143 million (31 December 2021: RMB181 million), under these guarantees, were drawn down from the banks. During the year, RMB0.2 million has been made by the Group due to the default of payments of certain pilot trainees (2021: RMB2 million).

SUBSEQUENT EVENTS

Since the end of the reporting period to the date of publication of this results announcement, no subsequent event has occurred which had a material impact on the Group.

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CHANGES IN SHARE CAPITAL STRUCTURE

Unit: Share

	31 December 2021				Increase in 2022		31 December 2022
	Number of Shares		Percentage (%)		Number of Shares		Number of Shares		Percentage (%)
I. Shares subject to restrictions on sales
1. RMB ordinary shares		2,453,434,457		14.48		803,571,428		3,257,005,885		17.97
Total		2,453,434,457		14.48		803,571,428		3,257,005,885		17.97
II. Shares not subject to restrictions on sales
1. RMB ordinary shares		10,219,858,722		60.30		30,795		10,219,889,517		56.40
2. Foreign listed shares		4,275,144,849		25.22		368,852,459		4,643,997,308		25.63
Total		14,495,003,571		85.52		368,883,254		14,863,886,825		82.03
III. Total number of shares		16,948,438,028		100.00		1,172,454,682		18,120,892,710		100.00

PURCHASE, SALE OR REDEMPTION OF SHARES

Neither the Company nor any of its subsidiaries purchased, sold or redeemed any shares during the year ended 31 December 2022.

PRE-EMPTIVE RIGHTS

There is no specific provision under the articles of association of the Company regarding pre-emptive rights, which does not require the Company to offer new shares to existing shareholders in proportion to their existing shareholdings when there is issuance of shares.

AUDIT AND RISK MANAGEMENT COMMITTEE

The Audit and Risk Management Committee of the Company has reviewed the audited consolidated financial statements of the Group for the year ended 31 December 2022.

COMPLIANCE WITH THE MODEL CODE

Having made specific enquiries, all Directors and Supervisors of the Company confirmed that they had complied with the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 to the Rules (the “Listing Rules”) Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) for the year ended 31 December 2022. The code of conduct adopted by the Company regarding securities transactions by the Directors and Supervisors is no less stringent than the Model Code.

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COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

The Board considers that the Group has complied with the code provisions of the Corporate Governance Code as set out in Part 2 of Appendix 14 to the Listing Rules for the year ended 31 December 2022.

DIVIDENDS

Considering that the Company suffered an operating loss for year of 2022, which does not meet the conditions for profit distribution as required under the Articles of Association of the Company, the Board did not recommend any payment of cash dividend or conversion of capital reserve into share capital or other profit distribution of the Company for the year of 2022. The proposal in relation to the profit distribution plan is still subject to the consideration and approval of the shareholders’ general meeting of the Company.

2023 OUTLOOK

Looking ahead to 2023, the global economy is facing constraints such as rising inflation level and tightening monetary policies, and expectation of a slowdown in economic growth continues to rise. According to the International Monetary Fund’s projection, global economic growth is expected to be 2.9% in 2023.

In 2023, China will adhere to the general tone of seeking progress while maintaining stability, fully and accurately implement the new development concept, accelerate the construction of a new development pattern, focus on promoting high-quality development, better coordinate development and security, and make a good start for building China into a modern socialist country in all respects.

Facing the complex domestic and international environment, the Group will maintain the overarching approach for high quality development, ensure sustainable and high-quality safety, consolidate the leading advantages of operation, accelerate the implementation of strategies, promote deep breakthroughs in reform, and strive to build the Group into a world-class aviation transportation enterprise with global competitiveness.

1. Continuously building a solid safety foundation and maintaining a good safety situation

The Group will continue to improve the safety quality, deepen the development of the seven safety systems, ensure practical fulfillment of the safety principal responsibilities and supervisory responsibilities, and standardize safety management behaviors; establish the competency model of safety management personnel, and improve the mechanism of regular qualification and capability check for key personnel; deepen the dual prevention mechanism of graded risk control and hidden danger identification and rectification, and keep a close eye on the risks in key areas; build a digital safety ecology and create a safety data center. In 2023, the Group will ensure safe aviation throughout the year.

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2. Making every effort in management response and taking multiple measures for efficiency improvement

The Group will seize the opportunity of market recovery to pursue better operating results. We will pay close attention to policy changes, make every effort to secure resources and overseas flight slot resources, and resume international flights in an orderly manner; build a product management system, fully promote the customer management system, promote the account manager system and the integrated operation for group account managers and channel managers, and develop incremental customers at Daxing Airport; coordinate the deployment of new cargo aircraft capacity, strengthen the return sales of cargo aircraft and the acquisition of belly-hold cargo sources, pay close attention to the development opportunities in relation to the Regional Comprehensive Economic Partnership Agreement, promote the development of the “dual system” of customer management and product management, and extend customer service capabilities.

3. Further driving lean control and consolidating the cornerstone of high-quality development

The Group will accelerate the establishment of a long-term mechanism for lean cost control to enhance risk resilience. We will make the cost list as detailed as possible, build a cost performance index system and promote the establishment of cost control mechanism; continue to promote the Golden Idea efficiency project, optimize the large demonstration cost operation and form a long- term mechanism for project-based management; continue to promote the optimization of asset and liability structure, strengthen financial leverage constraints, control the growth of the scale of interest-bearing liabilities and prevent debt risks and capital risks; actively revitalize inefficient and ineffective assets and establish a scientific and reasonable asset operation performance index system.

4. Continuously improving the operation quality to create a top service brand

The Group will continue to improve operational efficiency and service quality. We will continue to optimize the flight guarantee process, build a flight on-time performance rate index system from the customer’s perspective; continue to build benchmark projects of lean operation management to improve the efficiency of aviation fuel usage; comprehensively promote the implementation of “humanized, digitalized, refined, personalized and convenient” services, build a scientific and effective service quality management system, accelerate the construction of service digitalization and refinement, continue to build six service business cards, and polish the “affinity and refinement” service brand; implement brand guidance actions, build a brand management system, and improve brand awareness and competitiveness.

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5. Accelerating the implementation of strategies and continuously developing the development space

The Group will maintain strategic focus and ensure the implementation of key strategies for high- quality development one by one. We will build the Beijing hub with high quality, improve the domestic route network, restore and open new international and regional routes, and strengthen the management of medium and high-value customers; enhance the market control in the Greater Bay Area, and enrich the departure route network featuring four integrations in “network, market, product and service”; further promote the adjustment and optimization of the five major structures, control the growth rate of the fleet, revitalize human resources and adjust the industrial structure; strengthen the ecosystem construction and improve the supply chain management; accelerate the digital transformation, strengthen digital support, and build an open, collaborative and shared IT R&D ecology.

6. Promoting deep breakthroughs in reform and enhancing the endogenous power for development

The Group will continue to intensify reform to further stimulate the power and vitality. We will continue to optimize the market-oriented accounting system, establish and improve the linkage mechanism of performance evaluation and salary distribution, improve the market-oriented employment mechanism, and actively explore and implement the professional manager system; optimize the structure of the board of directors of subsidiaries, improve the differentiated authority delegation management of the board of directors; strengthen the management of procurement categories and promote the transformation to supply chain management; carry out special actions of value creation based on world-class standard, deepen the reform of the system and mechanism of scientific and technological innovation, and actively tackle the difficulties in scientific and technological research and development projects.

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PUBLICATION OF ANNUAL REPORT ON THE WEBSITES OF THE STOCK EXCHANGE AND THE COMPANY

The 2022 annual report of the Company, which contains consolidated financial statements for the year ended 31 December 2022, with an unmodified auditor’s report, and all other information required under Appendix 16 to the Listing Rules will be despatched to the shareholders of the Company and published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.csair.com) in due course.

By order of the Board

China Southern Airlines Company Limited

Chen Wei Hua and Liu Wei

Joint Company Secretaries

Guangzhou, the People’s Republic of China

28 March 2023

As at the date of this announcement, the Directors include Ma Xu Lun, Han Wen Sheng and Luo Lai Jun as executive Directors; and Liu Chang Le, Gu Hui Zhong, Guo Wei and Cai Hong Ping as independent non-executive Directors.

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