| Stock Code: 603833 | Stock Abbr: Oppein Home Group |
Oppein Home Group Inc.
2022 Annual Report
Important Statements
I. The board of directors, the board of supervisors, directors, supervisors and senior managers of the Companyguarantee the authenticity, accuracy and completeness of the contents of the annual report, and there are nofalse records, misleading statements or major omissions, and bear individual and joint legal liabilities.II. All directors of the Company attend the meeting of the board of directors.III. Huaxing Certified Public Accounts LLP (Special General Partnership) has issued a standard unqualified auditreport for the Company.IV. Yao Liangsong, the person in charge of the Company, Yao Liangsong, the person in charge of accounting, andWang Huan, the person in charge of accounting institutions (Accounting Supervisor), declare that thefinancial report in the annual report is true, accurate and complete.V. Profit distribution plan or provident fund conversion into share capital plan approved by the board of directors
during the reporting periodThe Company intends to distribute a total cash dividend of CNY 1.075 billion (tax inclusive) to all shareholdersbased on the total share capital on the registration date of equity distribution less the number of shares in the Company'sshare repurchase account, accounting for 40% of the net profit attributable to shareholders of the parent company in 2022.If the total share capital of the Company changes before the equity registration date for the implementation of equitydistribution, the Company intends to maintain the total profit distribution unchanged and adjust the profit distributionratio per share accordingly.VI. Risk statements for forward-looking statements
√ Applicable □ Not applicable
The forward-looking statements such as the company's future plans and development strategies involved in thisreport do not constitute the company's substantial commitment to investors, and investors are advised to emphasizeinvestment risks.VII. Is there any non-operating occupation of funds by controlling shareholders and other related parties
NoVIII. Is there any violation of the prescribed decision-making procedures to provide guarantees to the outsideworld
NoIX. Whether more than half of the directors can not guarantee the authenticity, accuracy and completeness of theannual report disclosed by the Company
NoX. Major risk warning
For details, see "VI. Discussion and analysis of the Company's future development (IV) possible risks" in "SectionIII Management Discussion and Analysis" of this report.XI. Other
□ Applicable √ Not applicable
Contents
Section I Definitions ...... 4
Section II Company profile and key financial indicators ...... 4
Section III Management discussion and analysis ...... 9
Section IV Corporate governance ...... 45
Section V Environmental and social responsibility ...... 64
Section VI Important matters ...... 68
Section VII Changes in shares and shareholders ...... 96
Section VIII Preferred shares ...... 102
Section IX Bonds ...... 102
Section X Financial Reports ...... 104
| List of documents for future reference | 1. Accounting statements bearing the signatures and seals of the person in charge of the Company, the person in charge of accounting work and the person in charge of accounting institutions. |
| 2. During the reporting period, the originals of all company documents and announcements publicly disclosed on the information disclosure carrier designated by the CSRC. | |
| 3. The original audit report bearing the seal of the accounting firm and the signature and seal of the certified public accountant. |
Section I Definitions
I. DefinitionsIn this report, unless the context otherwise requires, the following words have the following meanings:
| Definition of common words | ||
| The Company, company, the joint stock company, Oppein Group, Group, Oppein Home, Oppein, Oppein Home Group | means | Oppein Home Group Inc. |
| Oppein Integration | means | Guangzhou Oppein Integration Home Co., Ltd. |
| Oppein Sanitary | means | Guangzhou Oppein Sanitary Ware Co., Ltd. |
| Tianjin Oppein | means | Tianjin Oppein Integration Home Co., Ltd. |
| Wuxi Oppein | means | Wuxi (Jiangsu) Oppein Integration Home Co., Ltd. |
| Qingyuan Oppein | means | Qingyuan Oppein Integration Home Co., Ltd. |
| Chengdu Oppein | means | Chengdu Oppein Smart Home Co., Ltd. |
| Oppolia | means | Guangzhou Oppolia Smart Home Co., Ltd. |
| Ouboni | means | Guangzhou Ouboni Integration Home Co., Ltd. |
| Owell | means | Guangzhou Owell Decoration Material Co., Ltd. |
| Company Law | means | Company Law of the People's Republic of China |
| Securities Law | means | Securities Law of the People's Republic of China |
| Articles of Association | means | Articles of Association of Oppein Home Group Inc. |
| Rules of Procedure of the Board of Directors | means | Rules of Procedure of the Board of Directors of Oppein Home Group Inc. |
| Rules of Procedure of the Board of Supervisors | means | Rules of Procedure of the Board of Supervisors of Oppein Home Group Inc. |
| Rules of Procedure of General Meetings of Shareholders | means | Rules of Procedure of General Meetings of the Shareholders of Oppein Home Group Inc. |
| Prospectus | means | Prospectus of Oppein Home Group Inc. for Public Offering of Convertible Company Bond |
| CSRC | means | China Securities Regulatory Commission |
| Guotai Junan Securities | means | Guotai Junan Securities Co., Ltd. |
| Accountant, Huaxing, Huaxing Certified Public Accounts LLP | means | Huaxing Certified Public Accounts LLP (Special General Partnership) |
| SSE | means | Shanghai Stock Exchange |
| CSDC | means | China Securities Depository and Clearing Co., Ltd. Shanghai Branch |
| Convertible bonds | means | Convertible corporation bonds |
| Current reporting period, current period and current year | means | January 1, 2022 to December 31, 2022 |
| Previous period | means | January 1, 2021 to December 31, 2021 |
Section II Company profile and key financial indicators
I. Company information
| Chinese name of the Company | Oppein Home Group Inc. |
| Chinese abbreviation of the Company | Oppein Home |
| English name of the Company | Oppein Home Group Inc. |
| English abbreviation of the Company | OPPEIN |
| Legal representative of the Company | Yao Liangsong |
II. Contacts and contact information
| Secretary of the board | Securities representative | |
| Name | Ou Yingying | Ou Yingying |
| Contact address | No. 366 Guanghua Third Road, Baiyun District, Guangzhou | No. 366 Guanghua Third Road, Baiyun District, Guangzhou |
| Tel. | 020-36733399 | 020-36733399 |
| Fax | 020-36733645 | 020-36733645 |
| oppeinir@oppein.com | oppeinir@oppein.com |
III. Basic information
| Registered address of the Company | No. 366 Guanghua Third Road, Baiyun District, Guangzhou |
| Historical changes in the registered address of the Company | None |
| Office address of the Company | No. 366 Guanghua Third Road, Baiyun District, Guangzhou |
| Postal code of office address of the Company | 510450 |
| Company website | www.oppein.com |
| oppeinir@oppein.com |
IV. Disclosure and storage location
| Media name and website of where the Company discloses its annual report | China Securities Journal, Shanghai Securities News, Securities Times and Securities Daily |
| Website of the stock exchange where the Company discloses its annual report | www.sse.com.cn |
| Storage location of the Company's annual report | Office of Securities Affairs Department of the Company |
V. Company stock profile
| Company stock profile | ||||
| Stock class | Stock listing exchange | Stock abbreviation | Stock code | Stock abbreviation before change |
| A shares | Shanghai Stock Exchange | Oppein Home | 603833 | N/A |
VI. Other relevant information
| Accounting firm hired by the Company (domestic) | Name | Huaxing Certified Public Accounts LLP (Special General Partnership) |
| Office address | F/7-9, Tower B, Zhongshan Tower, No. 152 Hudong Road, Gulou District, Fuzhou City, Fujian Province | |
| Name of signatory accountant | Feng Jun, Fu Peng | |
| Sponsor performing continuous supervision duties during the reporting period | Name | Guotai Junan Securities Co., Ltd. |
| Office address | F/43, New World Center, No. 6009 Yitian Road, Futian District, Shenzhen | |
| Name of sponsor representative signing | Xia Qi, Li Ning | |
| Period of continuous supervision | September 1, 2022 to December 31, 2023 |
VII. Main accounting data and financial indicators in the past three years(I) Key accounting data
Unit: CNY
| Key accounting data | 2022 | 2021 | Increase or decrease in the current period over the same period last year (%) | 2020 |
| Operating income | 22,479,503,474.56 | 20,441,604,591.50 | 9.97 | 14,739,690,238.09 |
| Net profit attributable to shareholders of listed companies | 2,688,425,483.50 | 2,665,588,441.38 | 0.86 | 2,062,629,441.88 |
| Net profit attributable to | 2,592,339,337.77 | 2,510,354,529.21 | 3.27 | 1,935,193,531.48 |
| shareholders of listed companies after deducting non-recurring profits and losses | ||||
| Net cash flows from operating activities | 2,409,760,167.55 | 4,045,966,670.39 | -40.44 | 3,889,455,693.03 |
| At the end of 2022 | At the end of 2021 | Increase or decrease at the end of the period over the end of the same period last year (%) | At the end of 2020 | |
| Net asset attributable to shareholders of listed companies | 16,508,147,251.70 | 14,408,790,729.40 | 14.57 | 11,925,427,990.33 |
| Total assets | 28,611,007,188.61 | 23,392,733,365.23 | 22.31 | 18,843,631,132.18 |
(II) Key financial indicators
| Key financial indicators | 2022 | 2021 | Increase or decrease in the current period over the same period last year (%) | 2020 |
| Basic earnings per share (CNY/share) | 4.41 | 4.40 | 0.23 | 3.47 |
| Diluted earnings per share (CNY/share) | 4.38 | 4.40 | -0.45 | 3.47 |
| Basic earnings per share after deducting non-recurring profits and losses (CNY/share) | 4.26 | 4.14 | 2.90 | 3.26 |
| Weighted average return on net assets (%) | 17.37 | 20.14 | Decrease by 2.77% | 19.26 |
| Weighted average after deducting non-recurring profits and losses Return on equity (%) | 16.75 | 18.97 | Decrease by 2.22% | 18.07 |
Description of main accounting data and financial indicators of the Company in the first three years at the end of thereporting period
□ Applicable √ Not applicable
VIII. Differences in accounting data under domestic and foreign accounting standards(I) The difference between net profit and net assets attributable to shareholders of listed companies in financialreports disclosed in accordance with International Accounting Standards and Chinese Accounting Standards
□ Applicable √ Not applicable
(II) The difference between net profit and net assets attributable to shareholders of listed companies in financialreports disclosed in accordance with Overseas Accounting standards and Chinese Accounting Standards
□ Applicable √ Not applicable
(III) Explanation of differences between domestic and foreign accounting standards:
□ Applicable √ Not applicable
IX. Main financial data by quarter in 2022
Unit: CNY
| First quarter | Second quarter | Third quarter | Fourth quarter |
| (January-March) | (April-June) | (July-September) | (October-December) | |
| Operating income | 4,144,232,594.92 | 5,549,128,458.83 | 6,575,349,522.57 | 6,210,792,898.24 |
| Net profit attributable to shareholders of listed companies | 253,132,676.23 | 765,145,238.65 | 972,190,528.01 | 697,957,040.61 |
| Net profit attributable to shareholders of listed companies after deducting non-recurring profits and losses | 233,509,316.79 | 747,526,059.30 | 939,524,185.96 | 671,779,775.72 |
| Net cash flows from operating activities | -323,902,855.05 | 1,266,097,134.70 | 1,021,443,443.69 | 446,122,444.21 |
Explanation of differences between quarterly data and disclosed periodic report data
□ Applicable √ Not applicable
X. Items and amounts of non-recurring profits and losses
√ Applicable □ Not applicable
Unit: CNY
| Non-recurring profits and losses | Amount in 2022 | Notes (if applicable) | Amount in 2021 | Amount in 2020 |
| Profits and losses on disposal of non-current assets | -267,179.73 | / | -6,782,217.94 | 87,230.83 |
| Ultra vires examination and approval, or no formal approval documents, or occasional tax return, reduction and exemption | / | |||
| Government subsidies included in the current profits and losses, except those closely related to the normal business of the Company, which are in line with national policies and regulations and continue to be enjoyed in accordance with certain standards or quotas | 106,255,630.20 | / | 85,902,420.45 | 79,335,865.73 |
| Capital occupancy fees charged to non-financial enterprises included in current profits and losses | / | |||
| The investment cost of subsidiaries, associates and associated enterprise obtained by the enterprise is less than the income from the fair value of the identifiable net assets of the investee at the time of obtaining the investment | / | |||
| Profits and losses on non-monetary asset exchange | / | |||
| Profits and losses from entrusting others to invest or manage assets | / | |||
| Provision for impairment of assets due to force majeure, such as natural disasters | / | |||
| Profits and losses on debt restructuring | / | |||
| Enterprise restructuring costs, such as expenses for resettling employees and integration costs | / | |||
| Profits and losses exceeding fair value arising from transactions with significantly unfair transaction prices | / | |||
| Current net profits and losses of | / |
| subsidiaries arising from business merger under the same control from the beginning of the period to the merger date | ||||
| Profits and losses arising from contingencies unrelated to the normal business operation of the Company | / | |||
| In addition to the effective hedging business related to the normal business of the Company, the profits and losses from changes in fair value arising from the holding of trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, as well as the investment income from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other creditor's rights investments | -15,064,653.29 | / | 77,026,005.71 | 61,144,309.96 |
| Reversal of provision for impairment of receivables and contract assets subject to independent impairment test | / | |||
| Profits and losses from entrusted loans | / | |||
| Profits and losses arising from changes in the fair value of investment real estate measured subsequently using the fair value model | / | |||
| The impact of one-time adjustment of current profits and losses on current profits and losses according to the requirements of tax, accounting and other laws and regulations | / | |||
| Custody fee income from entrusted operation | / | |||
| Other non-operating income and expenses other than the above items | 11,468,590.83 | / | 14,929,914.65 | 5,345,460.23 |
| Other profit and loss items that meet the definition of non-recurring profits and losses | 19,781,431.38 | / | 5,339,654.99 | 7,190,026.21 |
| Less: income tax impact | 26,077,389.56 | / | 21,181,865.70 | 25,666,982.56 |
| Minority shareholders' equity impact (after tax) | 10,284.10 | / | ||
| Total | 96,086,145.73 | / | 155,233,912.16 | 127,435,910.40 |
The reasons shall be explained for the non-recurring profits and losses defined by the Company in accordance with thedefinition of Explanatory Announcement on Information Disclosure of Companies Offering Securities to the Public No.1- Non-recurring Profits and Losses, and the non-recurring profits and losses listed in Explanatory Announcement onInformation Disclosure of Companies Offering Securities to the Public No.1 - Non-recurring Profits and Losses asrecurring profits and losses.
□ Applicable √ Not applicable
XI. Items measured at fair value
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Ending balance | Current changes | Amount of impact on current profits |
| Trading financial assets | 1,677,354,882.08 | 803,050,958.90 | -874,303,923.18 | 11,627,612.42 |
| Investment in other equity instruments | 310,310,218.60 | 369,234,888.05 | 58,924,669.45 | 6,251,775.00 |
| Other non-current financial assets | 60,339,938.23 | 18,968,837.07 | -41,371,101.16 | -36,815,234.41 |
| Total | 2,048,005,038.91 | 1,191,254,684.02 | -856,750,354.89 | -18,935,846.99 |
XII. Other
□ Applicable √ Not applicable
Section III Management discussion and analysisI. Business discussion and analysis
2022 was an extremely difficult year. During the reporting period, the downward pressure on the national real estatemarket was unprecedented. Although the central and local governments continued to release positive signals to stabilizethe real estate market, favorable policies were introduced, and the housing credit environment was continuously optimized,the policy effect was not yet appeared in the short term; faced with the interweaving impact of multiple externalunexpected adverse factors such as the continuous downturn of the real estate industry and the slowdown of economicgrowth, the expectations and sentiment of home buyers were constantly suppressed; consumer online shopping habits hadbeen strengthened in the past three years, a new home appliances and services retail format of attracting clients online,experiencing the product and placing the order offline is forming accelerately.Faced with the business environment of real estate development risk spillover and in-depth adjustment, intensifiedcompetition in the home industry, fluctuations in raw material supply, economic downturn and diversification of homechannels, Oppein still shows strong combat effectiveness, and strives for steady progress through the effectiveimplementation of large home furnishing business model innovation, intelligent manufacturing and organizationalstructure optimization throughout the year. During the reporting period, the Company realized business income of CNY
22.480 billion, an increase of 9.97% over the same period last year, and realized net profit of CNY 2.688 billion, anincrease of 0.86% over the same period last year.
(I) During the reporting period, the marketing system was not afraid of the storm, guarding the existingmarket, grabbing new market share and increasing average client purchase value, and made every effort to breakthe ice under the background of the overall cold of real estate. The Company's operating income achieved a rareyear-on-year nearly double-digit positive growth
1. The leading position of the whole house marketing business (wardrobe) industry is more prominent andstable, which is the main engine driving the growth of the Company's operating income in the current period:
First, the breakthrough upgrading of net aldehyde 3.0, realizing the transformation from net aldehyde in the wholewardrobe to net aldehyde in space (wardrobe door wall integration), building a more environmentally friendly livingspace, and starting a wave of health and environmental protection upgrading; second, creatively putting forward the 2.0strategy of whole home customization, customizing the overall solutions of the six spaces of the whole house for users,and leading the industry to upgrade from whole house customization to the era of whole house customization; third,sensitively capturing the market consumption trend, providing consumers with more diversified product package upgradeseries, and breaking through the whole single value ceiling; fourth, constantly exploring the innovation of integratedmarketing model, and continuously carrying out online and offline linkage sales activities throughout the year to driveterminal sales; fifth, multi-dimensional development of new channels and new models, bag check/home decoration/wholehouse decoration/new retail/online cloud stores etc., enabling terminals to broaden the traffic acquisition entrance.
2. Kitchen marketing business fought with challenges, and achieved the annual internal managementobjectives in a hard way:
First, the channel layout is multipronged to enhance market share, including 440+ new decoration stores in retailchannels, 4,000+ cooperative decoration enterprises in retail system, 170+ new stores in integrated kitchen business model,and 100+ cities with supermarket large home furnishing; second, deeply cultivate the field of cabinet specialization,develop space solutions for like living room and dining room, transform old kitchens, and deepen kitchen supply chaincooperation; third, promote the process of large home furnishing, integrate kitchen and bathroom marketing and pan largehome furnishing business, and create the second growth curve; fourth, create products that meet the needs of consumers,such as "Healthy Kitchen 3.0" and "Oppein Changeable Western Kitchen", to lead the high-quality development ofpeople's living standards.
3. The whole house decoration & furnishing business is flying, and the annual performance is growing rapidly:
First, driven by the dual brands of Oppein and Baunis, it dances with the head decoration enterprises, consolidates
the Company's leading position in the whole decoration track, and opens up a new blue ocean of growth; second, we willcontinue to promote the innovation of V8 operation system and "operation 1+8" system, comprehensively help decorationenterprises innovate traffic acquisition methods, model tactics and operation capabilities, enable decoration enterprises toreduce costs and increase efficiency, and enhance market competitiveness; third, we will continue to promote the core ofOppein/Baunis whole house decoration & furnishing customization products + supply chain product integration + twoleading enterprises alliance product upgrading, meet the needs of users for "decorating a home", and build a moat ofsupporting capabilities for decoration enterprises; fourth, we will create, share, achieve win-win and co-evolute withdecoration enterprises, steadily promote the strategies of "strong business", "supporting new business" and "fineinvestment" throughout the year, and constantly consolidate and expand the Company's leading advantages in the field ofwhole decoration.
4. For bulk business, we will strictly control risks, be calm and down-to-earth, and good at balance to ensurethat the Company's overall revenue achieves quality growth:
First, we will give full play to the advantages of multi-category R&D and large home furnishing supporting,cooperate with high-quality strategic customers to upgrade from products to content, and actively promote the whole casehardcover loading business; second, we will give full play to the advantages of large-scale non-standard manufacturing,constantly broaden the width of product application scenarios, and extend from traditional hardcover housing to variouspublic construction projects such as schools, hospitals and industrial parks; third, we will continue to cultivate new bulkprojects such as talent housing, affordable housing and the transformation of old residential areas.
5. Oppolia's business closely follows the market trend, continues to give full play to its natural ability tointegrate categories into large home furnishing, and grows healthily:
First, through live broadcasting, design of master IP live broadcasting activities, variety, high-quality KOL&KOCrecommendation matrix and so on, we can raise the strength of brand in an all-round way and continuously enhance thebrand's strength; second, we will actively lay out localization empowerment, and firefly plan and pilot plan to effectivelyempower dealers to enhance their online customer acquisition and transformation capabilities; third, the e-commercechannel is strongly enabled to distribute orders for terminals 300,000+ times, boosting the continuous improvement ofperformance; fourth, we will continue to strengthen the design ability of the whole case, and the newly developed productswon many awards such as the 2022 Italian A'Design Award; fifth, during the reporting period, Oppolia opened 1,000stores for the first time, reaching 1,054, and comprehensively optimized the layout and display, followed the trend ofwhole decoration, developed projects such as bag check, 1,000 residential buildings and 100 orders, as well as 10 millionoutput value projects frequently, helping the steady growth of performance.
6. Ouboni leads the industry trend of door, wall and cabinet integration and achieves steady growth inperformance:
First, deepen the professional strength of products, first promote formaldehyde free wooden doors, set off theenvironmental protection upgrading of doors and walls, continue to consolidate the six core functions of noise prevention,fire prevention, moisture prevention, theft prevention and intelligence, and build a professional moat; second, expand thecategory map horizontally, and complete the brand leap with "door and wall customization, overall home furnishing, newluxury entry door"; third, marketing efforts, complete a number of Star Tour Live Broadcast and top anchor livebroadcasting with goods annually, establish TikTok self-broadcast system, to achieve online and offline reputation andorder performance transformation; fourth, continue to optimize the product structure, develop and produce wood wallproducts suitable for the strategic layout of the Company's large home furnishing, help the business expansion of bulkand integrated home decoration channels, continuously improve production efficiency, and achieve high-quality growthof performance.
7. Oppein retail large home furnishing business sets sail against the trend and embarks on a new journey:
First, the Company's Large Home Furnishing Marketing Department has led the retail system to climb the new peakof large home furnishing by transforming the whole decoration track through innovative store formats, standard displays,sales model building and other enabling retail systems. By the end of 2022, Oppein retail system had started theconstruction of 102 large home furnishing stores; second, the Company innovatively puts forward the "decorationhousekeeper" model, with the theme of "solving decoration pain points for end consumers and eliminating decorationphobia", implementing policies according to the city and cooperating with manufacturers to build an "independent third-party" platform supervision system with Oppein as the core. During the reporting period, the average net recommendationvalue of large home furnishing store customers exceeded 9 points (out of 10 points); third, the original P9 decoration salessystem will gradually standardize the highly non-standard "home decoration design" and "construction organization", sothat retail dealers who "do not understand, do not want and do not dare to engage in decoration" can easily enter the wholedecoration.
(II) During the reporting period, the manufacturing system improved production efficiency and effectivelycontrolled the total cost through the effective implementation of organizational streamlining, lean improvement,
intelligent manufacturing, large home furnishing and information strategy, met the increasingly stringent needsof customers for quality, price and delivery time, and provided a strong guarantee for the realization of theCompany's performance objectives
1. Comprehensively build precise delivery of orders and professional enabling terminals:
First, the promotion of direct delivery model has achieved remarkable results, greatly alleviating the shortage of baseresources and reducing operating costs, where: the direct delivery rate of integrated retail multi category (full set) is closeto 50%, the on-time rate is nearly 98%, the project direct delivery rate is more than 96%, and the on-time rate is morethan 93%; second, the deepening of dry warehouse distribution model and the promotion and application of TIMS haveachieved new phased results: The national network service capacity has exceeded 50%; TIMS system has completed thefull coverage of dry warehouse distribution business; third, the market-oriented service model and engineering gold nannyservice have been unanimously praised by dealers.
2. R&D and design lead the industry leading level:
First, the Company won 9 domestic and foreign design awards, such as "Guangzhou High-level Enterprise ResearchInstitute" and Muse Design Gold Award in the United States, A'desig in Italy and IF in Germany; second, the Companyhas successfully completed the research and development of 600+ new products in 2023, while reducing the R&D cycleof new products; third, the Company establishes a new track for door, wall and cabinet integration, builds standards,builds systems, and helps new products take off; fourth, the product system has been upgraded in an all-round way, greatlyintegrated and streamlined, and the proportion of product series and material color reduction exceeds double digits.
3. Significant improvement effect of manufacturing management:
First, new breakthroughs have been made in the standardization of the whole single level and cabinet level of kitchencabinets, which greatly improves the cost and shortens the delivery time; second, the wardrobe has been upgraded to thewhole cabinet net aldehyde and space net aldehyde, comprehensively promoting product standardization, greatlyshortening the launch cycle of new products, and the project of door, wall and cabinet integration has achieved remarkableresults to achieve the full integration of wardrobe and wood door; third, the level of door panel powder spraying and UVmanufacturing has been continuously improved, and new technologies such as laser engraving, "industrialization" and"flexible" printing have been developed and mass-produced; fourth, the operation improvement of major bases hasachieved remarkable results.
4. Continue to promote automation and intelligent upgrading and transformation, improve efficiency andreduce costs:
First, the wardrobe has completed the automation improvement of robot electronic cutting saw, edge sealing wiring,automatic loading and unloading wiring of row drill, automatic sorting and packaging line of cabinet body, and back platesuit cut, so as to further promote the specialized production model of cabinet body, door plate and back plate; second,kitchen cabinets and bathrooms have completed the promotion, upgrading and transformation of the automation of edgesealing and drilling lines, and kitchen appliances have achieved the industry's first laser automatic welding, grinding freeand single piece continuous production process; third, the rhythm of wood door paint free automation production line hasbeen improved by double digits, some base paint free 3.0 automation workshops have been put into operation, and theautomation level of door and wall production has been significantly improved; fourth, in terms of door panels, blisterupgrades one-driven-three processing centers, spray glue connection automation process, spray powder investment in theflexible processing technology of double powder rooms in the accumulation chain, solving the industry problems of colorchange difficulties.
5. Fruitful achievements in information construction:
First, achieve the opening of design and production of the whole category, helping to promote the implementationof large home furnishing strategy; second, the efficiency of order circulation has been greatly improved, with the firstpass rate of design exceeding 95% and the exemption rate exceeding 85%; third, the background service is pre-positionedto vigorously improve the design quality and break through the bottleneck of terminal empowerment; fourth, fully realizethe delivery of orders in the whole chain and online collaboration of capital settlement; fifth, new breakthroughs havebeen made in the benchmarking of PLM/MRP/MPCS projects, large versions of the basic framework of core systemssuch as BPM/MSCS have been upgraded, and 100 billion scale information infrastructure support capacity building hasbeen planned.
6. Won the 7
th
Guangdong Provincial Government Quality Award
The Company has been consumer centered to improve products and services, build an integrated quality assurancesystem, make breakthroughs in self-developed informatization, patent application and localization of testing technology,lead environmental protection upgrading, compile industry standards, upgrade supply chains, and promote the qualityimprovement of customized product chains. During the reporting period, the review expert group of "GuangdongProvincial Government Quality Award" evaluated and discussed the Company in multiple dimensions through listening
to reports, consulting materials, on-site visits and on-site communication. With its outstanding performance in leadership,quality, innovation, brand and efficiency, the Company stands out among many manufacturing enterprises and won the
thGuangdong Provincial Government Quality Award, the highest honor in the provincial quality system.(III) During the reporting period, the Company's functional system has always maintained a sense of vigilanceand worry, facing difficulties, firmly believing in moving forward, self-reflection, reform and innovation, and didnot hesitate to seek all opportunities for developmentAll departments of the functional system perform their respective duties and become a strong guarantee, support,energy storage and transmission base for the marketing and manufacturing system. First, optimize the total remunerationand compilation control rules, refine dynamic control, and effectively balance the relationship between human cost andpersonnel growth rate; second, establish a multi-dimensional and multi-perspective financial operation analysis system tohelp business reduce costs and save consumption, continue to build intelligent and automated financial management, andpromote 20+ information projects as a whole; third, in extreme environments, ensure the supply of raw materials bymultiple means, implement procurement cost control by multiple measures, and establish and optimize a number of keyprocurement systems and processes; fourth, innovate and establish a system process integration management model thatfits the reality of Oppein, complete a comprehensive sorting of business process architecture, and clarify 200+ crossbusiness domain process interfaces; fifth, strengthen institutional governance, legal management and regulatoryverification functions, firmly abide by the bottom line of compliance, and strive to create a compliance culture withOppein characteristics; sixth, improve and upgrade service software and hardware, introduce a number of innovativeservice projects, and provide high-quality service guarantee for 20,000+ employees of the Company.II. Industry situation of the Company during the reporting period
(I) Basic situation of the industry
1. According to the Industrial Classification for National Economic Activities (GB/T4754-2017) issued by theNational Bureau of Statistics in 2019, the Company is engaged in wood furniture manufacturing industry (C211) infurniture manufacturing industry (C21).
2. Affected by the pressure of economic growth, real estate sales and other factors, from January to December 2022,the total retail sales of furniture in China was CNY 163.5 billion, down 7.5% year-on-year, and the year-on-year growthrate of various categories of commodity retail temporarily ranked last. Meanwhile, the annual operating income offurniture manufacturing enterprises above designated size in 2022 was CNY 762.41 billion, down 8.1% year-on-yearfrom 2021. With the transition of the furniture industry from a period of rapid development to a period of maturedevelopment, the overall growth rate of the industry has slowed down. Affected by the "three red lines" control of theearly real estate financing policy, the new development investment of real estate on the supply side shows a downwardtrend. In 2022, the national real estate development investment was CNY 13,289.5 billion, down 10.0% from the sameperiod last year; Among them, residential investment was CNY 10,064.6 billion, down 9.5% year-on-year; the completedresidential area was 625.39 million m
, down 14.3% year-on-year. The real estate development boom index dropped from
100.28 in December 2021 to 94.35 in December 2022, showing a rapid decline in the early stage and a slow decline inthe later stage. Affected by the slowdown in the growth of a number of real estate data, furniture companies havecontracted and controlled their engineering business layout.
Figure: Real Estate Development Boom Index
Source: National Bureau of StatisticsCustomized home furnishing industry is moving from single category sales to multi-category integration. Non-standard customized wood furniture products, standardized building materials products and personalized soft decorationproducts penetrate each other, and the category melee has escalated again. With the youth of the main group of homedecoration consumption and the frequent demand for decoration, it further promotes the transformation from simpleproduct integration to more complex decoration service integration. Products and services are no longer a separate link inthe whole chain of home decoration services, cross-border integration has become an industry trend, and the single valueof customers and the flat efficiency of single stores have been improved to a certain extent. The category boundary ofcustomized furniture industry is further blurred, showing category diversification and channel diversification, and theindustry competition pattern is constantly changing and updating.
3. Online and offline integrated sales model has become a trend. From the perspective of BHI national buildingmaterials home terminal store prosperity index, affected by multiple factors such as economic downturn, real estatedownturn and purchasing power decline, BHI showed a trend of "stability previously and decline later" in 2022.Customized home enterprises enhance the popularity of terminal stores through new retail formats of online promotionand traffic acquisition, offline experience and turnover of customer stores.
(II) Industry characteristics
1. Cyclical and seasonal
Customized furniture is optional consumer goods and is part of the home building material market. From the perspectiveof cyclical characteristics, the industry is affected by macroeconomic growth, industry policies, real estate related policiesand investment and financing, changes in consumer ideas, intergenerational changes in the main consumption force, andlife cycle differences in various categories of customized furniture. The growth rate of furniture retail sales is closelyrelated to the growth of completed housing area, which has a strong periodicity.Figure: Relationship between the Year-On-Year Growth of Furniture Retail Sales and the Year-On-Year
Growth of Completed House Construction Area
Source: WINDFrom the perspective of seasonal characteristics, affected by the traditional Spring Festival, the climate differencesbetween South and North China and the differences in living habits, the decoration has certain seasonal characteristics,which will lead to the delay of installation and delivery and the delayed release of purchase demand at a specific time andenvironment, so there are also some seasonal fluctuations at the performance level.
2. Low industry concentration
The market pattern of customized furniture industry as a whole is relatively dispersed. According to the estimates ofsecurities firms and industry data, by the end of 2021, CR8 (caliber of listed companies) was 10.73%. Although the marketshare of leading enterprises is gradually increasing, it is still relatively low compared with mature industries such as homeappliances, the regional decentralization of dealers, the large number of market participants, the low threshold of industryentry and exit, the passenger flow dispersion continue to intensify, and the industry concentration needs to be furtherimproved. In the future, with the promotion of the whole decoration business and the concentration of dispersed passengerflow, it is expected to further increase the market share of leading enterprises.
3. Blurring of industry boundaries
In recent years, the industry has shown a trend of multi-category and multi-brand integrated sales, and has graduallybecome the mainstream and consensus of the industry. In the traditional furniture stores with customized furnitureenterprise layout, customization, soft decoration, electrical appliances and other categories fully meet the one-stopshopping demand of consumers through package integration, supporting product sales and other forms. In terms of multi-brand, it is mainly divided into two forms: cultivation within the system and integration outside the system. In terms ofcultivation within the system, it expands the second and third brands by expanding the target consumer groups, extendingthe price band and building a new brand image, so as to achieve the expansion and layout of new growth points; in termsof integration outside the system, multi-brand layout is realized through brand strategic alliance or brand integration.Meanwhile, through the change of channel model, it can achieve in-depth cooperation with home decoration anddecoration companies, pre-position the marketing and customer acquisition process, and provide customers with one-stopwhole process services covering home decoration, building materials, furniture, soft decoration, electrical appliances andso on. Customized furniture industry companies are no longer limited to selling a single whole house customized cabinet,soft decoration and other categories, but to expand the direction of integrated sales of decoration services and products.
(III) Industry position of the Company
The Company is a leading one-stop high-quality home integrated service provider in China. Its operating incomeand net profit scale are in the leading position in the same industry. It leads the industry in an all-round way in terms offorward-looking strategic layout. It is a pioneer in the expansion of new models and the excavation of new channels inthe industry. It dares to be the first among the multiple changes and uncertainties in the industry and firmly moves forwardto the direction of large home furnishing. In terms of categories, by the end of 2022, the Company's cabinet and wardroberevenue scale ranked first in the industry. The growth rate of the Company's operating income is not limited to the drivingforce of the new real estate cycle, but more reflected in the promotion and development of its own strategic cycle throughchannel expansion (cooperation with whole decoration companies) sales, multi-brand cooperation and cross categorysales. The brand influence of "Oppein" has been continuously strengthened among various categories, and the competitiveadvantage has been continuously highlighted.
Figure: Relationship between the Growth Rate of the Company's Operating Income and the Growth Rate of
Completed House Construction Area and Sales Area
| China: retail sales: furniture: cumulative year-on-year (%) | China: completed housing area: cumulative year-on-year (%) |
Source: the Company's periodic report data and WIND(IV) The newly announced laws, administrative regulations, departmental rules and industry policies have asignificant impact on the industry
1. China continues to promote high-quality quantification, production and manufacturing informatizationand industrial cluster of home industry products. In April 2022, the General Office of the State Council issued theOpinions on Further Releasing Consumption Potential and Promoting Sustainable Recovery of Consumption to cultivateand strengthen new consumption formats such as "Internet+home decoration"; vigorously develop green home decoration,and encourage consumers to replace or buy new green energy-saving home appliances, environmental protection furnitureand other household products. In August 2022, the Ministry of Industry and Information Technology, the Ministry ofHousing and Urban-Rural Development, the Ministry of Commerce and the State Administration for Market Regulationjointly issued the Action Plan to Promote High-quality Development of Home Furnishing Industry (hereinafter referredto as the Action Plan). The Action Plan proposes that by 2025, the innovation ability of the home industry will besignificantly enhanced, the supply of high-quality products will be significantly increased, and a higher level virtuouscircle of supply creating demand and demand pulling supply will be initially formed. Innovative platforms such asmanufacturing innovation center and digital transformation promotion center will be cultivated in household appliances,lighting appliances and other industries, the integration level of key industries will reach 65%, and a number of 5G fullyconnected factories, intelligent manufacturing demonstration factories and excellent application scenarios will becultivated. The proportion of personalized customization such as reverse customization, whole house customization andscenario integrated customization has steadily increased, the supply of green, intelligent and health products has increasedsignificantly, and new formats such as smart home have accelerated their development. About 50 well-known brands and10 home ecological brands will be cultivated in the home industry, a number of excellent products will be promoted, 500smart home experience centers will be established, and 15 high-level characteristic industrial clusters will be cultivated,so as to promote the quality consumption of home brands with high-quality supply.
2. In order to promote the steady and healthy development of the real estate market, under the premise ofunchanged positioning of "no speculation in housing", China continued to introduce a number of policies on theimplementation of guaranteed delivery, financing needs of high-quality credit real estate enterprises, and rigidand improved housing needs in 2022.
| Growth rate of Oppein home revenue (%) | Growth rate of sales area (%) | |
Growth rate ofcompleted area (%)
(1) "Guarantee the delivery of buildings" was written into the meeting documents of the Political Bureau ofthe Central Committee of the CPC for the first time. In July 2022, the meeting of the Political Bureau of the CentralCommittee of the CPC stressed the need to "consolidate the responsibilities of local governments, guarantee the deliveryof buildings and stabilize people's livelihood". Since August, Shijiazhuang, Zhengzhou and other places have introducedrelevant measures to "guarantee the delivery of buildings", including "one-on-one assistance", the establishment of bail-out funds, the acquisition of unsalable housing as resettlement housing and so on.
(2) The financing policy of real estate enterprises continued to relax, the "16 financial articles" wereintroduced, and real estate welcomed the strongest policy support in 2022. Taking November 2022 as a watershed,the regulatory attitude towards the financing of real estate enterprises was fundamentally shifted, and the direction ofrelief changed from "saving projects" to "saving projects and saving enterprises". First of all, three arrows supporting realestate enterprises: the "first arrow" credit financing field, the "second arrow" bond issuance, and the "third arrow" equityfinancing. Meanwhile the "16 financial articles" were introduced, involving a total of 16 measures, such as real estatedevelopment loans, personal loans, stock financing extension, trust financing, bond financing, special loans for "guaranteethe delivery of buildings", personal credit protection, extension of loan centralization, and housing rental finance.
(3) Real estate has once again become a "pillar industry", boosting industry confidence. In December 2022,vice premier Liu He pointed out that "real estate is the pillar industry of the national economy. In view of the currentdownward risks, we have issued some policies and are considering new measures to improve the assets and liabilities ofthe industry and guide market expectations and confidence to recover."
(4) Reduce the interest rates of personal commercial loans and provident fund loans. In terms of commercialloans, LPR was lowered three times in 2022, the largest number of times since 2019. In January 2022, the one-year LPRdecreased by 10 basis points to 3.70%, and five-year LPR decreased by 5 basis points to 4.60%. In May, the five-year+LPR was sharply reduced by 15 basis points to 4.45%. In August, the one-year LPR was lowered from 3.70% to 3.65%,and the five-year LPR was lowered from 4.45% to 4.3%. In September, the People's Bank of China and the China Bankingand Insurance Regulatory Commission made it clear that eligible city governments could independently decide tomaintain, lower or abolish the lower limit of commercial mortgage interest rates for the first set of housing. In terms ofprovident fund loans, the People's Bank of China announced its decision to lower the interest rate of the first personalhousing provident fund loan by 0.15% from October 1, 2022.
(5) Some cities have liberalized the purchase restriction policy to varying degrees. In December 2022, Tianjin,Chengdu, Chongqing and other cities successively issued real estate policies: Dongguan and Foshan fully liberalizedpurchase restrictions, Chongqing, Tianjin and other places loosened policies in terms of long rent of their own housingnot included in the number of units, and loosening of the upper limit of housing provident fund loans. Shaoxing proposesto continue to promote housing demolition and reform and the use of housing purchase tickets, implement the role of bail-out funds, make every effort to guarantee the delivery of buildings, and extend the application time of some real estatepolicies to the end of 2023.III. Business of the Company during the reporting period(I) Main business of the Company
Founded in 1994, Oppein Home is a leading one-stop high-quality home integrated service provider in China. TheCompany is mainly engaged in personalized design, R&D, production, sales, installation and interior decoration servicesof whole house home products. The Company started from customized cabinets and extended from cabinets to wholehouse products, covering the overall kitchen, overall wardrobe (whole house customization), overall bathroom,customized wood door system, metal doors and windows, soft decoration, furniture matching and other overall homeproducts. The Company is committed to customizing a unique home for each family, so that more families can enjoyhigh-quality home life experience.
Integrated cabinets
Customized wardrobes (whole house customization)
Customized wardrobes (whole house customization)
Oppein large home furnishing
Ouboni door and wall system
Whole bathroom customization(II) The Company's main business model
The products operated by the Company mainly adopt the order based production model, and "customization" is thecore of the Company's business model. The staff of the Company's exclusive stores designs corresponding solutionsaccording to customers' housing space layout and size, personalized preferences, functions and other needs, and rendersrenderings through the Company's self-developed information sales system for customers to make consumption decisions;after the customer confirms the design scheme, the order is directly transmitted to the Company's Production Departmentthrough the information system. The Company organizes production according to the content of the order, and finallyrealizes the delivery and installation of customized home products. The Company adopts a vertically integrated businessmodel, covering raw material procurement, design and development, production and manufacturing, brand building,product sales and other links, to achieve effective control of the whole industrial chain.
Build Oppein into a world excellent home furnishing enterprise
1. Procurement model
(1) The Company's procurement process and procurement links
The Company has formulated a complete management system and standard system for the procurement process torealize the unification of internal material specifications and procurement technology and quality standards, so as to formthe basis of large-scale procurement; establish a two-level procurement model between headquarters and bases, improvethe effectiveness of comprehensive supply chain management, strengthen procurement plan management, timely andeffectively supply, and reduce sluggish materials. The products purchased by the Company mainly include plates,functional hardware and other production raw materials, product accessories, as well as kitchen appliances and otherhousehold supporting products.From the perspective of purchasing links, the Company's purchasing business can be subdivided into front endbusiness and back end business. The Supply Chain Management Center and the Procurement Center of the Group areresponsible for the front-end business. The Supply Chain Management Center is responsible for the selection, assessmentand evaluation of suppliers and the management of purchase prices, so as to realize the unification of supply channels forthe same kind of materials in various business sectors. For materials and equipment whose annual consumption reachesa certain scale, the Company adopts on-site bidding to issue Invitation for Bid to qualified suppliers. Through on-sitebidding, the best is selected from the best, achieving the expected purchase objectives; the Procurement Center isresponsible for classifying and summarizing the consumption of materials in the Group, coordinating the implementationof centralized purchase in each production base, and giving full play to the scale advantages of purchase. The back endbusiness of purchase is the execution of specific purchase orders and material acceptance, which is mainly implementedby the Material Control Department under each product manufacturing line.
(2) Raw material inventory arrangement
In order to strengthen the management of raw materials, ensure the continuous supply of materials, reasonablycontrol inventory, standardize the warehousing process, and maintain the safety and integrity of assets, the Company hasformulated relevant systems for raw material inventory management.
According to the Company's purchase implementation management measures, the Material ManagementDepartment sets up safety stocks. The person in charge of inventory shall analyze the rationality and effectiveness of thearrival of materials through data and inventory arrangement. If there is any abnormality, he shall feed back to the PurchaseDepartment in time to modify the relevant material items, so as to ensure that the inventory of each material is controlledin the best state that neither production "shutdown for materials" nor material inventory expansion are allowed, and ensurethat the turnover times of stored materials meet the predetermined requirements. Meanwhile, we should strengthen themanagement of inventory period, set effective storage period for all kinds of raw materials and materials, distributematerials in strict accordance with the principle of first in first out, and strictly follow the 5S management and safetymanagement norms in the warehouse in daily work. In the ex-warehouse management link, each production workshop
| Fair and bright | Pursuit of perfection |
Businessphilosoph
y
Businessphilosoph
y
Home and Love
Home and LoveInterlocking hearts brings love to families
Interlocking hearts brings love to familiesConsumer centered, home building in the spirit of building aircraft
Consumer centered, home building in the spirit of building aircraftSelf-developed informatization
| System capability | Self-developed informatization | Oppein lean six sigma |
Talent
TalentSteer
SteerMechanism
MechanismTechnol
ogy
| Technology | Product |
Model
| Model | |
| Management |
Service
Service
Continuousinnovation
Continuousinnovation
AgileR&DQuality
| Agile R&D Quality | Personality Design Quality | Order Analysis Quality | Flexibility Manufacture Quality | Full set Distribution Quality | Warm Installation Quality | Worry free After-sales Quality |
counts the material demand according to the daily production task, and the Inventory Management Department issues thematerial after receiving the valid collection certificate.
2. R&D model
R&D process of Oppein home products
The Company has set up a home product R&D center to coordinate the Company's new product R&D and technologydevelopment management. At the same time, the Company's overall kitchen cabinet, overall wardrobe, overall bathroom,customized wooden doors, doors and windows and whole decoration large home furnishing and other business sectorshave established product planning and R&D departments.As the leader of the domestic customized home furnishing industry, the Company's annual R&D expenditure is inthe forefront of the industry, so that the Company's customized home furnishing products can always lead the industry.The Company attaches great importance to the construction of R&D team, with more than 3,000 R&D personnel, forminga R&D team with high education and pioneering spirit. Relying on strong R&D capabilities, Oppein Home has built upthe core competitiveness of its own product and process innovation, which can quickly respond to the demand for newmaterials downstream and provide new impetus for the Company's sustained growth.
The Company has always adhered to original design. In addition to having a number of high-level design teamsinside, it has set up a R&D and Design Center in Milan, Italy, and actively promoted external exchanges and industry-university-research cooperation. For example, Columbus, a professor at the University of Milan, Italy, has been hired inthe field of technology to guide the structural problems of furniture technology. In the field of stone, experts in automaticproduction and formulation of quartz from South Korea have been hired to carry out automatic line process design andformula re-sorting, carry out basic research with South China University of Technology on the utilization of quartz wasteresidue, reach strategic cooperation alliances with many famous Italian designers in the field of design, and continuouslylaunch customized home products according to market needs (including overseas markets).
The Company has a CNAS certification laboratory, and in recent years has won the titles of National IndustrialDesign Center, Guangdong Provincial Government Quality Award, and Guangzhou High-level Enterprise ResearchInstitute and so on. Mature product R&D management system and perfect R&D process design make the Company'sR&D level and innovation ability always at the leading level in the customized home industry, and rely on Oppein's"National Industrial Design Center" to continuously innovate product design and development model, enhance the coretechnology of product design, drive Guangdong · China customized home design to the world, and createGuangdong · China design business card.
3. Production model
| Market research | Product planning |
Trialproduction of newsamples
Trialproduction of newsamples
Product
review
Product
review
Newsampleintroduction
Newsampleintroduction
Samplepromotion
| Sample promotion | Market sample |
Unlike the production of standard home products, customized home enterprises generally have a series of difficultiesin order processing, high information requirements, huge amount of data and high accuracy of processing requirementsin the production and manufacturing process, resulting in a high threshold for large-scale home customization production.Meanwhile, with the arrival of the era of digital integration, the division of labor in the industrial chain is more in-depth,and intelligent manufacturing has become a new development direction of the customized home industry.
In order to conform to the development trend of modern manufacturing industry, break through the bottleneck ofproduction, focus on the 2025 pattern of Oppein manufacturing, and achieve another breakthrough in informationconstruction, Oppein fully absorbs the production model of TPS; based on the characteristics of customized home industry,around the three end-to-end processes of product engineering data flow (from product design to production), productioninformation flow (from customer demand to production instructions) and production process flow (from incomingmaterials to finished product shipment), and taking the self-developed information management system as a link to openup, it opens up and integrates efficiently. To achieve the opening up of design and digital production and manufacturing,the integration of the whole business chain information system, the integration of production process, equipmentautomation and intellectualization, and maintain the leading advantage of Oppein manufacturing informatization in thehome industry.
4. Sales model
Full case top-leveldesignPackage solutionWhole home planningUnified brand settingand planning
Whole home planningUnified brand settingand planningMulti-categorycollaborative R&DIntegration design andunderlying unification
Multi-categorycollaborative R&DIntegration design andunderlying unificationSingle categoryprofessional platformCategory basic processCustomized moduleFunctional platform
Single categoryprofessional platformCategory basic processCustomized moduleFunctional platformProduct & service dual track promotion
| Product & service dual track promotion | ||||||
| Product integration | Design integration | |||||
| Service uniformity | ||||||
Styleuniformity
Styleuniformity
Spatialintegration
Spatialintegration
Consistent
positioning
| Consistent positioning | |||||
| Design trends, pop colors | Hot selling house type, lifestyle | Image products, main sales products | |||
Category integrationKitchen and bathroomintegration, wardrobe andwood door integration
| Category integration Kitchen and bathroom integration, wardrobe and wood door integration | Integration Cabinet electricity integration, door wall cabinet integration | Share and interconnection Material share and process interconnection | ||||
Furniture
FurnitureCabinet
Cabinet
Houseaccessories
Houseaccessories
Hard decoration
Hard decoration
Home
appliances
Home
appliances
Full case design
| Full case design | ||
| Soft decoration |
Bathroom and balcony
| Bathroom and balcony | Door and wall | |
The Company adopts a compound sales model dominated by dealer exclusive stores, supplemented by bulk business,direct stores and exports.
(1) Dealer exclusive store sales model
a. Traditional dealer model
The sales model of dealers' exclusive stores is the main sales model in the customized home furnishing industry. Itrefers to that manufacturers select and cultivate dealers who recognize their own brand value, strong financial strength,good market reputation and rich market experience, sign the Cooperation Agreement with them, authorize them to set upexclusive stores to sell the products produced by enterprises in specific areas, and the dealers bear the operational risksthemselves. In the process of production and operation, the Company timely gives assistance and empowerment to dealerpersonnel in terms of training, operation and management. The advantage of the dealer exclusive store model is thatenterprises can make full use of the experience and social resources of dealers, quickly build sales channels and networks,refine market terminal marketing, and form a marketing strategy highly in line with the local market environment, whichis conducive to the rapid expansion of market share.
b. Whole decoration large home furnishing model
With the continuous development and growth of domestic decoration business, as a more advanced demand flowentrance, the impact and diversion of demand flow in the traditional retail channels of the furniture industry are becomingmore and more obvious. In order to lay out the whole decoration channel and broaden the source of customers, theCompany took the lead in cultivating the whole decoration channel business in the industry, and began to pilot andpromote the business model of the whole decoration large home furnishing in 2018. At present, the Company's doublebrand operation of the whole decoration large home furnishing is "Oppein" and "Baunis" to meet the differentiated needsof different channel partners and users.
Oppein's whole decoration large home furnishing refers to the Company's direct selection of high-quality homedecoration companies with large scale and good reputation to carry out agency and distribution cooperation, make fulluse of the Company's advantages such as high brand awareness, rich customized product categories and supply chainplatform, supplemented by the Company's mature information sales system, quickly introduce the terminals of decorationenterprises, greatly improve terminal efficiency, shorten the running-in period, and carry out synchronous empowermentof brand, flow, management and products. In the whole customer service link, the Company is responsible for theproduction, manufacturing and marketing support of products, and the home decoration company is responsible forproviding customized home design and installation services and home decoration design landing construction.
The expansion of the whole decoration business is conducive to the Company to expand passenger flow channelsand seize market share in the new market environment. The Company actively implemented measures such as trafficacquisition and marketing assistance for decoration dealers to speed up the development of decoration channels and theconstruction of marketing terminal model. Meanwhile, the Company actively guides traditional retail dealers to carry outvarious forms of business cooperation with local home decoration and whole decoration channel companies, promotesretail and decoration dealers to join hands to activate the consumption of customized home products in the local market,and strives to complete the sales expansion of the local home market of Oppein and enhance the overall share of Oppeinbrand.
(2) Direct-sale store sales model
The sales model of direct-sale stores refers to the business model in which the Company uses its own funds to open"Oppein", "Oppolia" and "Oubonii" series brand exclusive stores in large-scale stores, shopping centers and streetstorefronts to sell the Company's products (including Oppein cabinets, Oppein wardrobes, Oubonii bathroom, Ouboniiwhole house, Oppolia whole house customization, etc.). At present, the Company has opened direct-sale stores in someareas of Guangzhou and Dongguan, Guangdong Province.
(3) Bulk business sales model
In this business, the Company signs product supply and installation contracts with real estate developers orengineering contractors. The Company is responsible for the production of goods involved in the contract, and theengineering service provider is the actual operator of project performance, responsible for the design, transportation,installation and after-sales of related products. The Company signs agreements with engineering service providers, andsupervises engineering service providers to implement projects according to the contract and deliver products according
to the Company's quality standards.
(4) Export sales model
Product exports mainly include foreign bulk business sales and foreign retail sales. Foreign bulk business sales referto the Company's independent participation in project negotiation, contract conclusion and performance; foreign retailsales refer to the Company's whole home products sold through retail channels or by choosing foreign dealers.
5. Brand building model
The Company attaches great importance to the construction of series brands of Oppein Home, which is mainlyconducted through several aspects:
(1) Brand planning. Based on the research of enterprises, brands, industries and consumers, the Company's brandbuilding is elevated to the height of enterprise business strategy, and the medium and long-term development strategy ofenterprise brand is put forward to guide the specific brand marketing tactics in the future. Deeply tap the core value systemof the brand, take it as the center, establish a strong brand identification system, and bring strong associations to consumers.
(2) Brand publicity. In order to standardize the Company's brand publicity, improve brand management, promotebrand development, effectively protect the brand and maximize brand value, the Company has formulated a detailed brandmanagement system, implemented various public welfare brand publicity advertisements, hard advertisements and softnews publicity in various media channels, and actively participated in various public welfare sponsorship activities, andhas organized various celebrations, press conferences, promotion and exhibition activities.
(3) Channel layout and promotion. It fully implements the "10+1" terminal business model, displays the overallimage of the Company through a wide range of distribution stores, unified and tidy design and decoration and well-trainedprofessionals, and improve the popularity and reputation of "Oppein", "Oppolia", "Ouboni", "Baunis" and "miform" seriesbrands. The Company has a complete assessment, supervision and early warning mechanism for the operating results andservice quality of dealers to maximize the protection of the interests of end consumers and maintain the reputation ofOppein brand. The Company's dealer management level has always been ahead of the same industry.
6. Sales logistics and warehousing model
In order to standardize the internal and external logistics processes of various products of the Company, the Companyhas formulated relevant systems covering warehousing, shipping, trunk line and distribution management, and set uplogistics centers under the manufacturing system to be responsible for the logistics management of the whole link of theGroup's products. Meanwhile, in view of the lack of in-transportation management in the industry, the high transportationdamage caused by multiple trans-shipments and the problem of wrong and missing goods, the Company actively exploresa new logistics business model for customized home products by means of informatization.IV. Analysis of core competitiveness during the reporting period
√ Applicable □ Not applicable
(I) Strong brand influence
Since its establishment 29 years ago, Oppein has always regarded consumer satisfaction as the essence of enterprisesurvival and adhered to consumer centered improvement of products and services. "Oppein" brand has occupied brandawareness and influence in the hearts of consumers, and is gradually transforming into reputation and trust. Theadvertising language of "home, love and Oppein" has been deeply rooted in the hearts of the people. From 2016 to 2022,Oppein was selected into the list of China's Top 500 Brand Value Enterprises for seven consecutive years by virtue of itsstrong brand strength. In 2023, the Company was listed on the list of China's Top 500 Most Valuable Brands in 2022 witha brand value of CNY 57.806 billion, and the brand value increased year by year. In addition, the Company has beenselected as one of Chinese Manufacturing 500 Strong and the Top 500 Private Enterprises in Hurun China for fourconsecutive years, and as one of the Top 500 Private Manufacturing Enterprises in China for six consecutive years.
(II) Strong terminal sales system
After years of channel investment and construction, the Company has established the largest marketing servicenetwork in the home industry, which cooperates closely with the Group, grows together and spreads all over the country,and has the most powerful dealer (service provider) resources in the industry, with 7,000+ distribution stores. In terms ofterminal management, since its establishment, the Company has adhered to the concept of dealer roots, pioneered andeffectively implemented perfect dealer management systems such as 1,000 point assessment mechanism, "10+1" Oppeinterminal marketing system, double 50 theory and store 4S management. Meanwhile, the Company conforms to thedevelopment trend of the industry, deepens the omni-channel development strategy, and builds a more mature channeloperation model with retail and whole decoration channels as the backbone, engineering and e-commerce channels as thetwo wings, and direct-sale and foreign trade channels as the important support.
(III) Advantages of informatization, customization and intellectualization
Chairman Yao Liangsong of the Company said that "first-class informatization may not achieve first-classenterprises, and first-class enterprises must have first-class informatization". As the world's largest single productcustomized cabinet and whole house customized double champion manufacturer, after five years of enterprisetransformation and upgrading, Oppein has provided the whole process of information transformation and construction,established a global and capable information development team including the Group's Marketing Information Center,Manufacturing Information Center, Functional Information Center and professional software company (Beijing JiajuScience and Technology), and independently created marketing support software MTDS, design software CAXA, MSCS,MOM\MES, TIMS and other core systems mark that the intelligent technology platform with cloud design, big dataapplication and robot flexible manufacturing as the core has entered the stage of practical application, and informatization,customization and intellectualization will promote "building Oppein into a world excellent home group". In the past fiveyears, Oppein informatization has taken the integration of informatization and intellectualization of product design andmanufacturing as its R&D direction, focusing on the construction goal of "design and manufacturing integration,centralized planning and multi-base collaborative production, intelligent manufacturing system support". The Companyhas successfully built a large-scale non-standard customized home intelligent manufacturing support technology platformand industrial Internet platform, and built a full three-dimensional information model integrating large home furnishingdesign, display and manufacturing, and established the data middleground and business middleground of marketing andmanufacturing. It has realized the comprehensive informatization and cloudization of marketing, design, production anddelivery links, formed a closed-loop data link, and realized the informatization management of the whole process fromdesign to after-sales of customized products through the digital intelligence center.
(IV) Mature and efficient systematic operation advantages
The Company attaches great importance to system construction and implementation, with a total of more than 700business systems, covering three major system businesses of function, manufacturing and marketing. Based on thecustomization attributes of the Company's products, in order to cope with the personalized needs of customers and therapid changes in channels, the Company timely adjusts its business strategy to obtain first mover advantages at the timeof channel reform, integration and industry shuffling, and takes the systematic collaborative guarantee mechanismoriented by front-line marketing demand as the terminal to escort product competition, channel occupation, strategyadjustment and management upgrading, and continues to empower, and always maintain the strong competitiveness ofthe Oppein system. Mr. Yao Liangsong, the controlling shareholder of Oppein Home, and the core management of theCompany have rich industry experience in the home industry, and have a good judgment and grasp of the strategic trendof the industry, the development direction of the enterprise, the employment mechanism and incentive measures. Withthe increasing stability of the Company's leading position in the industry, the Company's talent introduction strategy of"nesting and attracting phoenix" has also been carried out smoothly, attracting more high-quality industry talents to joinOppein, and working together to achieve the grand goal of "building Oppein into a world excellent home enterprise".
(V) Strong R&D and innovation capabilities of products and processes
The Company adheres to innovation to promote development, constantly develops independently, gets rid of thestale and brings forth the fresh, and unremittingly develops new products, new materials, new processes and newtechnologies, so that the Company's process and R&D level are always in the forefront of the industry. In order to meetthe market demand, the Company has continuously studied and explored in the fields of product process structure design,new material development and application, process quality management and so on. The Company's leading technologylevel provides a strong technical guarantee for the production of high-quality customized furniture products. TheCompany continuously improves and innovates production technology, takes informatization as a tool and means topromote the improvement of process technology, establishes an incentive and assessment mechanism for technicalpersonnel guided by results, and establishes a perfect process level process control system. After years of efforts, theCompany's product development has gradually transitioned from single product customization to whole homecustomization and whole home customization, and from single new product design to new product design, extensiondesign and functional design. As of December 31, 2022, the Company and its holding subsidiaries have 798 patents and92 computer software copyrights.
(VI) Flexible large-scale non-standard customization production capacity
In the early 1990s, Oppein took the lead in introducing the concept of European "integrated kitchen" into China,creating a precedent for China's industrial production of modern cabinets, and is known as the advocate of China's "kitchenrevolution". With the Company's continuous R&D investment for many years, deep technological reserves, leadinghousehold R&D strength, upstream and downstream bargaining power of the industrial chain, the Company has exploreda large-scale non-standard customized product manufacturing model with Oppein characteristics. At present, the totalproduction scale of the Company's customized furniture products ranks first in the industry. The Company's capacitydesign is based on the national layout and large home furnishing strategy, and relying on production and manufacturing,it builds four major production bases in the East (Wuxi Base), the South (Qingyuan Base), the West (Chengdu Base) andthe North (Tianjin Base), forming a national production capacity radiating East, South, West and North China.
V. Main operating conditions during the reporting periodDuring the reporting period, the operating income was CNY 22.480 billion, an increase of 9.97% over the sameperiod last year, and the net profit attributable to shareholders of listed companies was CNY 2.688 billion, an increase of
0.86% over the same period last year.
(I) Main business analysis
1. Analysis of Changes in Related Subjects in Profit Statement and Cash Flow Statement
Unit: CNY
| Subject | Current period balance | Amount of the same period last year | Change ratio (%) |
| Operating income | 22,479,503,474.56 | 20,441,604,591.50 | 9.97 |
| Operating cost | 15,374,184,716.14 | 13,978,340,522.59 | 9.99 |
| Selling expenses | 1,678,894,114.14 | 1,385,772,778.03 | 21.15 |
| Administrative expenses | 1,335,732,876.37 | 1,131,445,694.80 | 18.06 |
| Financial expenses | -247,399,167.99 | -115,480,875.88 | -114.23 |
| R&D expense | 1,123,248,931.13 | 907,758,166.73 | 23.74 |
| Net cash flows from operating activities | 2,409,760,167.55 | 4,045,966,670.39 | -40.44 |
| Net cash flows from investing activities | -7,146,174,752.94 | -2,065,130,017.73 | -246.04 |
| Net cash flows from financing activities | 2,985,316,174.67 | -187,037,166.66 | 1,696.11 |
Reasons for changes in sales expenses: The increase over the same period last year was mainly due to the increase inadvertising and publicity fees and employee remunerationReasons for changes in financial expenses: The decrease over the same period last year was mainly due to the increase ininterest income.Reasons for changes in R&D expenses: The increase over the same period last year was mainly due to the increase inR&D investment.Reasons for changes in net cash flow from operating activities: The decrease over the same period last year was mainlydue to the increase in cash paid for purchasing goods and receiving servicesReasons for changes in net cash flow from investment activities: The decrease over the same period last year was mainlydue to the increase in cash paid for investment.Reasons for changes in net cash flow from financing activities: The increase over the same period last year was mainlydue to the issuance of convertible bonds.Detailed description of major changes in the Company's business type, profit composition or profit source in the currentperiod
□ Applicable √ Not applicable
2. Revenue and cost analysis
√ Applicable □ Not applicable
During the reporting period, the Company's main business income was CNY 22,000,522,428.80, an increase of 9.21%over the same period last year, and the main business cost was CNY 15,144,117,735.57, an increase of 9.54% over thesame period last year.
(1) Main business by industry, product, region and sales model
Unit: CNY
| Main business by industry | ||||||
| By industry | Operating income | Operating cost | Gross profit margin (%) | Increase or decrease in operating income over the | Increase or decrease in operating costs over the previous year (%) | Increase or decrease in gross profit margin over the previous year (%) |
| previous year (%) | ||||||
| Furniture manufacturing | 22,000,522,428.80 | 15,144,117,735.57 | 31.16 | 9.21 | 9.54 | Decrease by 0.20% |
| Main business by product | ||||||
| By product | Operating income | Operating cost | Gross profit margin (%) | Increase or decrease in operating income over the previous year (%) | Increase or decrease in operating costs over the previous year (%) | Increase or decrease in gross profit margin over the previous year (%) |
| Kitchen cabinets | 7,173,091,365.63 | 4,732,790,483.06 | 34.02 | -4.73 | -4.26 | Decrease by 0.33% |
| Wardrobes and accessories | 12,139,192,500.13 | 8,281,753,525.39 | 31.78 | 19.34 | 20.07 | Decrease by 0.41% |
| Bathroom | 1,034,631,973.88 | 763,599,926.60 | 26.20 | 4.63 | 3.51 | Increase by 0.80% |
| Wood door | 1,345,660,384.59 | 1,125,190,957.38 | 16.38 | 8.85 | 5.62 | Increase by 2.56% |
| Other | 307,946,204.57 | 240,782,843.14 | 21.81 | 40.64 | 32.33 | Increase by 4.91% |
| Total | 22,000,522,428.80 | 15,144,117,735.57 | 31.16 | 9.21 | 9.54 | Decrease by 0.20% |
| Main business by region | ||||||
| By region | Operating income | Operating cost | Gross profit margin (%) | Increase or decrease in operating income over the previous year (%) | Increase or decrease in operating costs over the previous year (%) | Increase or decrease in gross profit margin over the previous year (%) |
| East China | 7,046,147,510.89 | 4,766,040,886.99 | 32.36 | 10.86 | 11.32 | Decrease by 0.28% |
| South China | 3,985,127,886.24 | 2,590,868,114.75 | 34.99 | 8.89 | 9.40 | Decrease by 0.30% |
| North China | 3,040,585,260.42 | 2,164,221,878.52 | 28.82 | 8.90 | 9.50 | Decrease by 0.39% |
| Central China | 2,343,241,631.60 | 1,675,242,197.43 | 28.51 | 14.57 | 15.15 | Decrease by 0.36% |
| Southwest China | 2,773,369,636.04 | 1,984,564,458.12 | 28.44 | 7.43 | 8.06 | Decrease by 0.41% |
| Northeast China | 1,055,540,913.25 | 753,916,966.05 | 28.58 | -8.62 | -8.07 | Decrease by 0.42% |
| Northwest China | 1,538,342,253.09 | 1,081,853,088.58 | 29.67 | 13.92 | 14.84 | Decrease by 0.56% |
| Overseas regions | 218,167,337.27 | 127,410,145.13 | 41.60 | 6.47 | -12.48 | Increase by 12.64% |
| Total | 22,000,522,428.80 | 15,144,117,735.57 | 31.16 | 9.21 | 9.54 | Decrease by 0.20% |
| Main business by sales model | ||||||
| Sales model | Operating income | Operating cost | Gross profit | Increase or | Increase or decrease in | Increase or decrease in |
| margin (%) | decrease in operating income over the previous year (%) | operating costs over the previous year (%) | gross profit margin over the previous year (%) | |||
| Stores Total | 18,287,627,470.08 | 12,496,049,191.05 | 31.67 | 12.42 | 12.19 | Increase by 0.14% |
| Direct-sale stores | 705,526,346.13 | 314,290,952.36 | 55.45 | 20.12 | 49.16 | Decrease by 8.67% |
| Dealership stores | 17,582,101,123.95 | 12,181,758,238.69 | 30.72 | 12.13 | 11.48 | Increase by 0.41% |
| Bulk business | 3,494,727,621.45 | 2,520,658,399.39 | 27.87 | -4.85 | -0.83 | Decrease by 2.92% |
| Online sales | 0.00 | 0.00 | / | / | / | / |
| Other | 218,167,337.27 | 127,410,145.13 | 41.60 | 6.47 | -12.48 | Increase by 12.64% |
| Total | 22,000,522,428.80 | 15,144,117,735.57 | 31.16 | 9.21 | 9.54 | Decrease by 0.20% |
Description of main business by industry, product, region and sales model
In 2022, the Company's main business income accounted for 97.87% of its business income, where: From theperspective of products, the sales income of integrated kitchen cabinets, wardrobes and supporting furniture products isthe main source of the Company's main business income, accounting for more than 85% of the main business income;regionally, 99% of the Company's main business income mainly comes from domestic; in terms of channels, the operatingincome contributed by the sales channels of dealer exclusive stores accounts for nearly 80% of the main business income.
(2) Analysis of Production and Sales
√ Applicable □ Not applicable
| Main products | Unit | Production | Sales volume | Inventory | Increase or decrease in production over the previous year (%) | Increase or decrease in sales over the previous year (%) | Increase or decrease in inventory over the previous year (%) |
| Integrated cabinets | Set | 829,141.00 | 850,845.00 | 9,501 | -9.74 | -4.65 | -69.55 |
| Wardrobes and supporting furniture products | Set | 3,176,281.00 | 3,271,426.00 | 37,505.00 | 8.40 | 15.79 | -71.73 |
| Integrated bathroom | Set | 642,080.00 | 627,889.00 | 19,248.00 | 7.82 | 3.14 | 280.62 |
| Integrated wood door | Nos. | 1,099,655.00 | 1,096,858.00 | 8,206.00 | 7.06 | 7.01 | 51.71 |
(3) Performance of major purchase contracts and major sales contracts
□ Applicable √ Not applicable
(4) Cost analysis
Unit: CNY
| By industry | |||||||
| By industry | Cost component | Amount of current period | Proportion of | Amount of the same period last | Proportion of total | Change proportio | Information note |
| items | current period to total cost (%) | year | cost in the same period last year (%) | n of current amount over the same period last year (%) | |||
| Furniture manufacturing | Material | 12,149,585,944.46 | 80.23 | 10,948,675,149.93 | 79.19 | 10.97 | / |
| Labor | 1,337,334,677.18 | 8.83 | 1,329,237,132.54 | 9.61 | 0.61 | / | |
| Manufacture cost | 1,657,197,113.93 | 10.94 | 1,547,642,487.80 | 11.19 | 7.08 | / | |
| Total | 15,144,117,735.57 | 100.00 | 13,825,554,770.27 | 100.00 | 9.54 | / | |
| By product | |||||||
| By product | Cost component items | Amount of current period | Proportion of current period to total cost (%) | Amount of the same period last year | Proportion of total cost in the same period last year (%) | Change proportion of current amount over the same period last year (%) | Information note |
| Cabinet | Material | 3,637,835,955.49 | 24.02 | 3,827,216,585.61 | 27.68 | -4.95 | — |
| Labor | 372,514,707.48 | 2.46 | 382,168,118.82 | 2.76 | -2.53 | — | |
| Manufacture cost | 722,439,820.09 | 4.77 | 733,873,366.67 | 5.31 | -1.56 | — | |
| Wardrobes and supporting furniture products | Material | 6,943,967,793.67 | 45.85 | 5,678,210,364.58 | 41.07 | 22.29 | — |
| Labor | 713,262,042.15 | 4.71 | 702,118,015.47 | 5.08 | 1.59 | — | |
| Manufacture cost | 624,523,689.57 | 4.12 | 516,961,134.63 | 3.74 | 20.81 | — | |
| Bathroom | Material | 616,046,961.56 | 4.07 | 597,116,971.32 | 4.32 | 3.17 | — |
| Labor | 78,849,365.48 | 0.52 | 77,026,772.43 | 0.56 | 2.37 | — | |
| Manufacture cost | 68,703,599.57 | 0.45 | 63,548,966.66 | 0.46 | 8.11 | — | |
| Wood door | Material | 724,054,798.02 | 4.78 | 675,563,682.60 | 4.89 | 7.18 | — |
| Labor | 162,473,264.71 | 1.07 | 158,448,875.90 | 1.15 | 2.54 | — | |
| Manufacture cost | 238,662,894.65 | 1.58 | 231,339,475.09 | 1.67 | 3.17 | — | |
| Other | Material | 227,680,435.73 | 1.50 | 170,567,545.82 | 1.23 | 33.48 | — |
| Labor | 10,235,297.36 | 0.07 | 9,475,349.92 | 0.07 | 8.02 | — | |
| Manufacture cost | 2,867,110.05 | 0.02 | 1,919,544.75 | 0.01 | 49.36 | — | |
| Total | 15,144,117,735.57 | 100.00 | 13,825,554,770.27 | 100.00 | 9.54 | — | |
(5) Changes in the scope of consolidation due to changes in equity of major subsidiaries during the reporting period
□ Applicable √ Not applicable
(6) Major changes or adjustments in the Company's business, products or services during the reporting period
□ Applicable √ Not applicable
(7) Major sales customers and major suppliers
A. Major sales customers of the Company
√ Applicable □ Not applicable
The sales of the top five customers were CNY 1,336.398 million, accounting for 5.94% of the total annual sales;among the top five customers, the sales of related parties were CNY 0.00, accounting for 0.00% of the total annual sales.
During the reporting period, the proportion of sales to a single customer exceeded 50% of the total, and there were newcustomers in the top five customers or serious dependence on a small number of customers
□ Applicable √ Not applicable
B. Main suppliers of the Company
√ Applicable □ Not applicable
The purchase amount of the top five suppliers was CNY 2,066,225,500, accounting for 16.02% of the total annualpurchasing amount; among the top five suppliers, the purchase amount of related parties is CNY 0.00, accounting for
0.00% of the total annual purchase amount.
During the reporting period, the proportion of purchases from a single supplier exceeded 50% of the total, and therewere new suppliers in the top five suppliers or serious dependence on a small number of suppliers
□ Applicable √ Not applicable
3. Expenses
√ Applicable □ Not applicable
| Item | 2022 | 2021 | Year-on-year increase or decrease (%) | Description of changes |
| Selling expenses | 1,678,894,114.14 | 1,385,772,778.03 | 21.15 | Mainly due to the increase in advertising and publicity fees and employee remuneration |
| Administrative expenses | 1,335,732,876.37 | 1,131,445,694.80 | 18.06 | / |
| R&D expense | 1,123,248,931.13 | 907,758,166.73 | 23.74 | Mainly due to the increase in R&D investment |
| Financial expenses | -247,399,167.99 | -115,480,875.88 | -114.23 | Mainly due to the increase in interest income |
4. R&D investment
(1) Table of R&D investment
√ Applicable □ Not applicable
Unit: CNY
| Current costed R&D investment | 1,123,248,931.13 |
| Current capitalized R&D investment | 0.00 |
| Total R&D investment | 1,123,248,931.13 |
| Proportion of total R&D investment in operating income (%) | 5.00 |
| Proportion of R&D investment capitalization (%) | 0.00 |
(2) Table of R&D personnel
√ Applicable □ Not applicable
| Number of R&D personnel | 3,024 |
| Proportion of R&D personnel in the total number of the Company (%) | 12.33 |
| Education structure of R&D personnel | |
| Education structure category | Number of people of education structure |
| PhD | 0 |
| Master's degree | 70 |
| Bachelor's degree | 1,450 |
| Junior college | 1,493 |
| High school and below | 11 |
| Age structure of R&D personnel | |
| Age structure category | Number of people of age structure |
| Under 30 years old (excluding 30) | 1,173 |
| 30 - 40 years old (including 30 years old, excluding 40 years old) | 1,546 |
| 40 - 50 years old (including 40 years old, excluding 50 years old) | 266 |
| 50 - 60 years old (including 50 years old, excluding 60 years old) | 38 |
| 60 years old and above | 1 |
(3) Information note
□ Applicable √ Not applicable
(4) Reasons for major changes in the composition of R&D personnel and their impact on the Company's futuredevelopment
□ Applicable √ Not applicable
5. Cash flow
√ Applicable □ Not applicable
Unit: CNY
| Item | Closing balance | Amount in the previous year | Year-on-year increase or decrease (%) |
| Sub-total of cash inflow from operating activities | 25,003,315,997.04 | 24,959,794,327.17 | 0.17 |
| Sub-total of cash outflow from operating activities | 22,593,555,829.49 | 20,913,827,656.78 | 8.03 |
| Net cash flows from operating activities | 2,409,760,167.55 | 4,045,966,670.39 | -40.44 |
| Sub-total of cash inflow from investing activities | 7,182,276,346.74 | 3,406,213,978.12 | 110.86 |
| Sub-total of cash outflow from investing activities | 14,328,451,099.68 | 5,471,343,995.85 | 161.88 |
| Net cash flows from investing activities | -7,146,174,752.94 | -2,065,130,017.73 | -246.04 |
| Sub-total of cash inflow from financing activities | 8,483,617,108.80 | 3,677,975,159.74 | 130.66 |
| Sub-total of cash flows from financing activities | 5,498,300,934.13 | 3,865,012,326.40 | 42.26 |
| Net cash flows from financing activities | 2,985,316,174.67 | -187,037,166.66 | 1,696.11 |
(1) Net cash flow from operating activities: The decrease over the same period last year was mainly due to the increasein cash paid for purchasing goods and receiving services.
(2) Subtotal of cash inflow from investment activities: The increase over the same period last year was mainly due to theincrease in cash received from investment recovery.
(3) Subtotal of cash outflow from investment activities: The increase over the same period last year was mainly due tothe increase in cash paid for investment.
(4) Net cash flow from investment activities: The decrease over the same period last year was mainly due to the increasein cash paid for investment.
(5) Subtotal of cash inflow from financing activities: The increase over the same period last year was mainly due to theincrease in cash received from absorbing investment and the increase in cash received from obtaining loans.
(6) Subtotal of cash outflow from financing activities: The increase over the same period last year was mainly due to the
increase in cash paid for debt repayment.
(7) Net cash flow from financing activities: The increase over the same period last year was mainly due to the issuanceof convertible bonds.(II) Description of significant changes in profits caused by non-main business
□ Applicable √ Not applicable
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
1. Assets and liabilities
Unit: CNY
| Item Name | Ending balance of the current period | Proportion of ending balance of the current period in total assets (%) | Ending balance of the last period | Proportion of ending balance of the previous period in total assets (%) | Change proportion of amount at the end of the current period over the end of the previous period (%) | Information note |
| Cash and bank balances | 8,269,801,977.25 | 28.90 | 6,561,937,418.36 | 28.05 | 26.03 | Mainly due to the public issuance of convertible corporation bonds, the accumulation of operating results and the increase of short-term loans. |
| Trading financial assets | 803,050,958.90 | 2.81 | 1,677,354,882.08 | 7.17 | -52.12 | Mainly due to the decrease in the purchase of corporate financial products |
| Notes receivable | 110,434,205.93 | 0.39 | 206,073,671.76 | 0.88 | -46.41 | Due to the decrease in bill settlement volume adopted by the Company and engineering customers |
| Accounts receivable | 1,356,804,850.55 | 4.74 | 1,011,693,187.67 | 4.32 | 34.11 | Mainly due to the increase in accounts receivable from engineering customers |
| Prepayments | 107,436,378.36 | 0.38 | 148,345,992.40 | 0.63 | -27.58 | Mainly due to the decrease of prepaid land transfer fees, |
| materials and advertising fees | ||||||
| Other receivables | 197,101,668.61 | 0.69 | 95,586,738.83 | 0.41 | 106.20 | Mainly due to the increase in margin receivable |
| Non-current assets due within one year | 922,210,739.68 | 3.22 | - | - | / | Mainly due to the increase in long-term fixed time deposits due within one year |
| Other current assets | 199,747,707.68 | 0.70 | 78,826,684.25 | 0.34 | 153.40 | Mainly due to the increase of VAT input tax to be deducted and certified by the Company |
| Long-term equity investments | 10,518,308.44 | 0.04 | 15,543,367.11 | 0.07 | -32.33 | Mainly due to the decrease in investment profits and losses recognized under the equity method |
| Other non-current financial assets | 18,968,837.07 | 0.07 | 60,339,938.23 | 0.26 | -68.56 | Mainly due to the decrease in foreign equity investment |
| Construction in progress | 1,430,244,831.22 | 5.00 | 347,455,504.19 | 1.49 | 311.63 | Mainly due to the increase in investment in base construction |
| Right-of-use assets | 143,259,299.38 | 0.50 | 24,976,072.05 | 0.11 | 473.59 | Mainly due to the increase in store leasing |
| Long-term prepaid expenses | 100,563,403.28 | 0.35 | 79,715,027.09 | 0.34 | 26.15 | Mainly due to the increase in decoration expenses to be amortized at the current period |
| Other non-current assets | 3,964,225,445.14 | 13.86 | 2,143,540,620.17 | 9.16 | 84.94 | Mainly due to the increase of fixed time deposits for more than one year |
| Short-term loans | 4,584,695,003.58 | 16.02 | 2,389,126,170.93 | 10.21 | 91.90 | Mainly due to the increase in bill financing loans and liquidity loans |
| Notes payable | 70,366,124.74 | 0.25 | 139,951,771.71 | 0.60 | -49.72 | Mainly due to the decrease of the Company's bill business |
| Receipts in advance | 364,393,984.51 | 1.27 | 885,811,485.23 | 3.79 | -58.86 | Mainly due to the decrease in advance receipts from dealers |
| Contract liabilities | 782,289,860.99 | 2.73 | 1,202,994,206.12 | 5.14 | -34.97 | Mainly due to the increase in customer order conversion |
| Other payables | 840,531,618.28 | 2.94 | 667,841,099.64 | 2.85 | 25.86 | Mainly due to the increase in margin payable |
| Non-current liabilities due within one year | 241,730,653.70 | 0.84 | 13,286,652.37 | 0.06 | 1,719.35 | Mainly due to the increase in store leasing |
| Other current liabilities | 98,158,653.53 | 0.34 | 144,631,995.61 | 0.62 | -32.13 | Mainly due to the decrease of VAT to be resold |
| Long-term loans | 5,122,020.57 | 0.02 | - | - | / | Mainly due to the increase in borrowing for more than one year |
| Debentures payable | 1,601,701,819.31 | 5.60 | - | - | / | Mainly due to the issuance of convertible bonds |
| Lease liabilities | 101,476,366.50 | 0.35 | 12,665,970.28 | 0.05 | 701.17 | Mainly due to the increase in store leasing |
| Deferred income tax liabilities | 134,412,062.70 | 0.47 | 96,615,466.91 | 0.41 | 39.12 | Mainly due to the increase in interest provision for fixed time deposits and financial management |
| Other equity instruments | 424,351,185.44 | 1.48 | - | - | / | Mainly due to the issuance of convertible bonds |
| Other comprehensive income | 111,426,682.00 | 0.39 | 59,580,680.56 | 0.25 | 87.02 | Mainly due to the increase in investment gains on non-tradable equity instruments |
2. Overseas assets
√ Applicable □ Not applicable
(1) Asset size
Including: overseas assets 362,779,065.34 (Unit: CNY), accounting for 1.27% of the total assets.
(2) Relevant instructions on the relatively high proportion of overseas assets
□ Applicable √ Not applicable
3. Restrictions on major assets by the end of the reporting period
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending book value | Reasons for restriction |
| Cash and bank balances | 312,566,682.72 | Bank acceptance bill margin, letter of credit margin, letter of guarantee margin, external guarantee margin, court ruling to freeze, restricted funds used by e-commerce platforms |
| Trading financial assets | 803,050,958.90 | There is a redemption period and a closure period for financial products |
| Fixed assets | 49,699,840.67 | There is mortgage guarantee for house property |
| Intangible assets | 39,497,528.36 | There is mortgage guarantee for intangible assets |
| Notes receivable | 39,114,681.94 | Pledged for business needs |
| Total | 1,243,929,692.59 | — |
4. Others
□ Applicable √ Not applicable
(IV) Industry operational information analysis
√ Applicable □ Not applicable
The Company is engaged in wood furniture manufacturing industry (C211) in furniture manufacturing industry(C21).Analysis of operational information in furniture manufacturing industry1 Physical stores during the reporting period
√ Applicable □ Not applicable
| Store type | Number at the end of last year (Nos.) | Newly opened this year (Nos.) | Closed this year (Nos.) | Number at the end of this year (Nos.) |
| Oppein kitchen cabinet (including kitchen and wardrobe) | 2,459 | 361 | 341 | 2,479 |
| Oppein wardrobe (whole home customization) | 2,201 | 352 | 343 | 2,210 |
| Oppein Sanitary | 805 | 73 | 62 | 816 |
| Direct-sale stores of the Company | 47 | 16 | 5 | 58 |
| Oppolia | 989 | 266 | 201 | 1,054 |
| Ouboni | 1,021 | 242 | 207 | 1,056 |
Note: The statistical caliber of Oppein kitchen cabinet stores and dealers includes Oppein kitchen cabinet single categorydealers, kitchen cabinet stores and comprehensive dealers and kitchen cabinet and wardrobe comprehensive stores actingfor Oppein kitchen cabinets and wardrobes at the same time.
(1) Store and dealer information during the reporting period
Unit: nos.
| Category | Number of dealers at the end of 2021 | Number of dealers at the end of 2022 | Number of stores at the end of 2021 | Number of stores at the end of 2022 |
| Oppein kitchen cabinet (including kitchen and wardrobe) | 1,609 | 1,516 | 2,459 | 2,479 |
| Oppein wardrobe (whole home customization) | 1,079 | 1,062 | 2,201 | 2,210 |
| Oppolia | 852 | 899 | 989 | 1,054 |
| Oppein Sanitary | 641 | 655 | 805 | 816 |
| Ouboni | 931 | 902 | 1,021 | 1,056 |
(2) Oppein dealers and stores by market level
Unit: nos.
| Market level | Oppein kitchen cabinet (including kitchen and wardrobe) | Oppein wardrobe (independent) | Ouboni | |||
| Dealer | Store | Dealer | Store | Dealer | Store | |
| A | 67 | 517 | 29 | 428 | 84 | 169 |
| B | 355 | 756 | 226 | 602 | 311 | 365 |
| C | 1,094 | 1,206 | 807 | 1,180 | 507 | 522 |
| Total | 1,516 | 2,479 | 1,062 | 2,210 | 902 | 1,056 |
| Market level | Oppein Sanitary | Oppolia | ||
| Dealer | Store | Dealer | Store | |
| A | 30 | 44 | 28 | 103 |
| B | 259 | 337 | 196 | 244 |
| C | 366 | 435 | 675 | 707 |
| Total | 655 | 816 | 899 | 1,054 |
(3) Store and dealer information by region
Unit: nos.
| Region | Oppein kitchen cabinet (including kitchen and wardrobe) | Oppein wardrobe (independent) | Ouboni | |||
| Dealer | Store | Dealer | Store | Dealer | Store | |
| East China | 338 | 638 | 258 | 544 | 247 | 273 |
| Central China | 297 | 447 | 225 | 388 | 149 | 159 |
| South China | 160 | 297 | 116 | 257 | 75 | 94 |
| North China | 222 | 341 | 144 | 343 | 161 | 198 |
| Northwest China | 112 | 189 | 93 | 204 | 93 | 119 |
| Southwest China | 278 | 397 | 177 | 338 | 108 | 128 |
| Northeast China | 109 | 170 | 49 | 136 | 69 | 85 |
| Total | 1,516 | 2,479 | 1,062 | 2,210 | 902 | 1,056 |
| Region | Oppein Sanitary | Oppolia | ||
| Dealer | Store | Dealer | Store | |
| East China | 176 | 223 | 243 | 298 |
| Central China | 116 | 135 | 159 | 175 |
| South China | 79 | 90 | 84 | 93 |
| North China | 88 | 116 | 163 | 180 |
| Northwest China | 26 | 42 | 52 | 72 |
| Southwest China | 116 | 153 | 130 | 153 |
| Northeast China | 54 | 57 | 68 | 83 |
| Total | 655 | 816 | 899 | 1,054 |
2 Profitability of each product type during the reporting period
√ Applicable □ Not applicable
Unit: CNY
| Product type | Operating income | Operating cost | Gross profit margin (%) | Increase or decrease in operating income over the previous year (%) | Increase or decrease in operating costs over the previous year (%) | Increase or decrease in gross profit margin over the previous year (%) |
| Kitchen cabinets | 7,173,091,365.63 | 4,732,790,483.06 | 34.02 | -4.73 | -4.26 | -0.33 |
| Wardrobes and accessories | 12,139,192,500.13 | 8,281,753,525.39 | 31.78 | 19.34 | 20.07 | -0.41 |
| Bathroom | 1,034,631,973.88 | 763,599,926.60 | 26.20 | 4.63 | 3.51 | 0.80 |
| Wood door | 1,345,660,384.59 | 1,125,190,957.38 | 16.38 | 8.85 | 5.62 | 2.56 |
| Other | 307,946,204.57 | 240,782,843.14 | 21.81 | 40.64 | 32.33 | 4.91 |
3 Production and sales of each product type during the reporting period
√ Applicable □ Not applicable
| Product type | Self-produced products ('0,000 nos.) | Outsourced production ('0,000 nos.) | Purchased finished products ('0,000 nos.) | Other sources ('0,000 nos.) | Sales volume ('0,000 nos.) | Increase or decrease in sales over the previous year (%) |
| Integrated cabinets | 82.91 | / | / | / | 85.08 | -4.65 |
| Wardrobes and supporting furniture products | 317.63 | / | / | / | 327.14 | 15.79 |
| Integrated bathroom | 64.21 | / | / | / | 62.79 | 3.14 |
| Integrated wood door | 109.97 | / | / | / | 109.69 | 7.01 |
4 Profitability of each brand during the reporting period
√ Applicable □ Not applicable
Unit:CNY '0,000
| Brand | Operating income | Operating cost | Gross profit margin (%) | Operating income ratio Increase or decrease in the previous year (%) | Operating cost ratio Increase or decrease in the previous year (%) | Increase or decrease in gross profit margin over the previous year (%) |
| Oppein | 1,881,382.29 | 1,280,613.87 | 31.93 | 7.77 | 8.68 | -0.58 |
| Oppolia | 184,110.84 | 121,278.81 | 34.13 | 29.13 | 27.27 | 0.96 |
| Ouboni | 134,559.11 | 112,519.10 | 16.38 | 8.85 | 5.62 | 2.56 |
5 Profitability of each sales channel during the reporting period
√ Applicable □ Not applicable
Unit:CNY ‘0,000
| Sales channel | Operating income | Operating cost | Gross profit margin (%) | Increase or decrease in operating income over the previous year (%) | Increase or decrease in operating costs over the previous year (%) | Increase or decrease in gross profit margin over the previous year (%) |
| Total stores | 1,828,762.75 | 1,249,604.92 | 31.67 | 12.42 | 12.19 | 0.14 |
| Direct-sale stores | 70,552.63 | 31,429.10 | 55.45 | 20.12 | 49.16 | -8.67 |
| Dealership | 1,758,210.11 | 1,218,175.82 | 30.72 | 12.13 | 11.48 | 0.41 |
| Bulk business | 349,472.76 | 252,065.84 | 27.87 | -4.85 | -0.83 | -2.92 |
| Online sales | / | / | / | / | / | / |
| Other | 21,816.73 | 12,741.01 | 41.60 | 6.47 | -12.48 | 12.64 |
| Total | 2,200,052.24 | 1,514,411.77 | 31.16 | 9.21 | 9.54 | -0.20 |
(V) Investment analysisOverall analysis of foreign equity investment
√ Applicable □ Not applicable
I. The Company has set up 12 holding subsidiaries and sub-subsidiaries such as Chengdu Oppein Creative LargeHome Furnishing Co., Ltd. and Handan Oppein Large Home Furnishing Sales Co., Ltd., with a total investment amountof about CNY 51 million (calculated according to the investment obligations of each company's registered capital).II. Oppein (Hong Kong) International Trade Company Limited, a wholly-owned subsidiary of the Company,completed the purchase of 100% equity interest in FORMER S.R.L. held by FASA S.R.L. of Italy at a transactionconsideration of 4.63 million euros.
1. Significant equity investments
□ Applicable √ Not applicable
2. Significant non-equity investments
√ Applicable □ Not applicable
"Oppein Home Intelligent Manufacturing Base in Central China" plans to build a new smart home production lineand supporting facilities such as cabinets, wardrobes, wooden doors and bathrooms. About CNY 630 million was investedin the reporting period. Where: In terms of infrastructure construction, 1. The main structure or secondary structure ofmost factories has been completed; the secondary structure construction of some factories is in progress; the walldecoration of some factories has been completed and is in the stage of installation engineering; 2. The main body of thethree-dimensional warehouse and the steel structure roof have been completed, and the secondary mechanism constructionis being implemented; 3. The construction of external wall related works of some supporting facilities has been completed,and the construction of waterproof works has been completed; some supporting facilities are still in the main constructionstage. In terms of equipment purchase progress, the equipment such as cutting and edge sealing required for the productionof wardrobes and kitchen cabinets has been paid in the early stage, and the performance of the equipment purchasecontract is normal.
3. Financial assets measured at fair value
√ Applicable □ Not applicable
Unit: CNY
| Asset category | Beginning balance | Profits and losses on changes in fair value in the current period | Cumulative changes in fair value recognized in equity | Impairment accrued in the current period | Purchase amount in the current period | Sale/redemption amount in the current period | Other changes | Closing balance |
| Other | 1,677,354,882.08 | 3,050,958.90 | 1,100,000,000.00 | 1,977,354,882.08 | 803,050,958.90 | |||
| Other | 310,310,218.60 | 143,805,165.93 | 5,572,715.38 | 64,497,384.83 | 369,234,888.05 | |||
| Other | 60,339,938.23 | -36,815,234.41 | 1,000,000.00 | 5,555,866.75 | 18,968,837.07 | |||
| Total | 2,048,005,038.91 | -33,764,275.51 | 143,805,165.93 | 0.00 | 1,101,000,000.00 | 1,988,483,464.21 | 64,497,384.83 | 1,191,254,684.02 |
Notes:
1. The first line of "other": other trading financial assets, bank financial product data;
2. The second line of "other": other are investments in other equity instruments, where "other changes" are 64.4974 million fair value changes included in other comprehensive incomein the current period
3. The third line of "other": other are other non-current financial assets.
Securities investment
□ Applicable √ Not applicable
Private equity investment
□ Applicable √ Not applicable
Derivatives investment
□ Applicable √ Not applicable
4. Specific progress of major asset restructuring and integration during the reporting period
□ Applicable √ Not applicable
(VI) Disposal of material assets and equity
□ Applicable √ Not applicable
(VII) Analysis of major holding and shareholding companies
√ Applicable □ Not applicable
Unit: CNY, '0,000
| ? | Principal activities | Registered Capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Tianjin Oppein Integration Home Co., Ltd. | Manufacturing | 5,000.00 | 179,799.96 | 102,097.30 | 235,452.26 | 18,498.67 | 16,688.49 |
| Guangzhou Oppein Integration Home Co., Ltd. | Manufacturing | 10,000.00 | 782,199.72 | 243,966.06 | 884,835.34 | 65,326.00 | 57,112.50 |
| Guangzhou Oppein Creative Home Design Co., Ltd. | Design service | 1,000.00 | 214,484.40 | 158,362.86 | 95,516.24 | 40,766.62 | 34,958.41 |
| Zhuhai Oppein Creative Home Design Co., Ltd. | Design service | 1,000.00 | 121,511.18 | 100,484.59 | 75,050.61 | 55,873.72 | 47,697.80 |
(VIII) Structured subjects controlled by the Company
□ Applicable √ Not applicable
VI. Discussion and analysis of the Company's future development(I) Industry structure and trend
√ Applicable □ Not applicable
1. With the adjustment of demand structure, the proportion of stock housing market gradually increasesAccording to the data of the National Bureau of Statistics, the growth of the new housing market has declined, andthe users of stock housing and second-hand housing have become the growth point of the furniture industry. The "14
th
five year plan" proposes that the urbanization rate of China's permanent population will increase to 65%, and by the endof 2022, the urbanization rate of China's population was 65.22%, an increase of 0.50% over 2021. China's rapidurbanization exceeds the expected progress of the original target, forming a good foundation for the support of the demandside.
China's average building age of the stock houses continues to rise, the demand for demolition also increasesaccordingly. According to the data of the seventh census, by 2020, households living in houses with housing age of lessthan 10 years/11-20 years/21-30 years/31-40 years/41-50 years/above 50 years accounted for
36.7%/32.03%/19.65%/8.63%/1.91%/1.08% respectively. From the perspective of the facilities of stock houses,according to the data of the seventh national census, the proportion of stock houses without kitchens or shared kitchenswith other households in houses was 4.23%, and the proportion of stock houses without piped tap water was 3.50%. Atpresent, there is still lots of room for optimization of the quality of some houses, and the demand for inventory renovationis expected to provide new incremental demand for the home decoration industry.
Figure: Stock Housing Facilities in 2020
Source: China Census Yearbook 2020, National Bureau of Statistics, compiled by Beike Research InstituteAccording to the calculation of Beike Research Institute, during 2022-2030, the total demand for housing decorationin China will be between 3-5 billion m
per year. Under neutral conditions, the total demand for housing decoration inChina will reach 3.971 billion m
in 2025 and 4.596 billion m
in 2030. According to the hard decoration data of completesets of housing in SD Home Decoration covered cities and the adjustment calculation of Beike Research Institute, theaverage expenditure of home decoration in China in 2022 is CNY 1,040 per m
from the beginning of decoration to thecompletion and occupancy. Based on the forecast of demand and decoration unit price, in the neutral case, the scale ofChina's home decoration market will reach CNY 4.78 trillion in 2025 and CNY 7.06 trillion in 2030.
Table: Forecast of Home Decoration and Home Furnishing Market Size
| Year | 2022E | 2023E | 2024E | 2025E | 2026E | 2027E | 2028E | 2029E | 2030E | |
| Market scale of home decoration and home furnishing (CNY trillion) | Conservative | 3.51 | 3.88 | 4.30 | 4.51 | 4.80 | 5.12 | 5.42 | 5.78 | 6.58 |
| Neutral | 3.69 | 4.12 | 4.52 | 4.78 | 5.12 | 5.47 | 5.80 | 6.19 | 7.06 | |
| Optimistic | 3.88 | 4.35 | 4.79 | 5.06 | 5.42 | 5.80 | 6.23 | 6.62 | 7.54 |
Source: Calculation of Beike Research InstituteAccording to the classification of CBN · The Rising Lab, Beike Research Institute divides cities into six categories:
first tier, new first tier, second tier, third tier, fourth tier and fifth tier cities. According to the forecast of regional marketscale, the home decoration market in third tier cities is the largest and the main source of demand. Under the neutralassumption, the third tier home decoration market will be CNY 1.23 trillion in 2025 and CNY 1.82 trillion in 2030. Inaddition, the decoration of stock house has become the main source of demand in the home decoration market, and itsproportion in the total market size has continued to increase. In the neutral case, the market size of incremental housedecoration will reach CNY 1.50 trillion in 2025 and CNY 1.92 trillion in 2030.
Table: Forecast of Market Size of Incremental House and Stock House Decoration
| Year | 2022E | 2023E | 2024E | 2025E | 2026E | 2027E | 2028E | 2029E | 2030E | |
| Market size of incremental housing decoration (CNY | Conservative | 1.12 | 1.13 | 1.20 | 1.24 | 1.26 | 1.32 | 1.35 | 1.41 | 1.43 |
| Neutral | 1.30 | 1.37 | 1.42 | 1.50 | 1.58 | 1.67 | 1.73 | 1.82 | 1.92 | |
| Optimistic | 1.49 | 1.60 | 1.70 | 1.78 | 1.89 | 2.00 | 2.15 | 2.25 | 2.39 |
No bathing facilities in the house
No flush toilet in the houseNo kitchen or sharing with other households in the house
No piped tap water in the house
| trillion) | ||||||||||
| Market size of stock housing decoration | 2.39 | 2.75 | 3.09 | 3.28 | 3.54 | 3.80 | 4.07 | 4.37 | 5.15 | |
Source: Calculation of Beike Research Institute
2. The demand for one-stop decoration continues to increase, and the whole home and decoration have graduallybecome the mainstream and consensus of the industryPassenger flow structure continues to adjust, traditional channel growth is under pressure, and the integration oftraffic fragmentation has become a medium and long-term trend; in terms of categories, many categories are integratedand penetrated into each other, and the boundaries between categories are gradually blurred. One stop decoration can "fastand economically" solve the decoration needs of consumers, allow consumers choose from a certain number of principaland auxiliary material brands and colors and materials, and effectively reduce the cost of information search. Meanwhile,it can reduce the information asymmetry between consumers, decoration enterprises and building materials brands,shorten the decision-making cycle and promote the transformation of transactions, and make the whole homecustomization and whole decoration gradually develop from market cultivation to market popularization. The wholedecoration channel has become an important direction in the development planning of many customized home furnishingenterprises. The whole decoration companies and customized home furnishing enterprises promote the market share fromscattered long-tail to concentration in the form of professional division of labor.In order to meet the needs of stock house, second-hand house user renovation and consumer one-stop decoration,the Company, with its outstanding capabilities in product R&D, supply chain integration, efficient channel operation,digital marketing, large-scale intelligent manufacturing and other aspects precipitated for many years, has put forward"one-stop good appearance whole home customized decoration solutions". In 2022, the Company quickly iterated thewhole home customization to "the whole home customization 2.0", upgraded the model of "six space consulting planningof the whole home + cabinet, door and wall products + menu pricing", and truly solved the pain points of consumers'whole home demand. The Company's whole home brand "Baunis" took the lead in putting forward the vision of "one-stop super integrated service provider" in the industry, and continued to open up a new path and model for wholedecoration large home furnishing on the basis of "increasing traffic, expanding channels and increasing unit value".Meanwhile, the Company cooperates with pan-home head brands, including the whole chain of home appliances,principal materials, base materials, soft decoration and other home products, to provide consumers with big brands andcost-effective products. In 2023, the Company will build a system to serve decoration enterprises, increase the expansionof whole decoration channels, and comprehensively launch the "thousand cities and ten billion yuan" plan to help theoutput value of decoration enterprises continue to break through. In addition to strengthening the advantages ofcustomized kitchen cabinets, customized wardrobes and other core categories, the Company continues to expand inintegrated kitchens, soft decoration facilities, kitchen appliances and other aspects.
3. The furniture industry is extending from "industry brand" to "consumer brand"Furniture industry is a durable consumer goods with low frequency and high unit price. Consumers' awareness ofbrand is still gradually building, and the industry as a whole is developing from "industry brand" to "consumer brand".At present, the furniture industry is showing a situation of brand melee. In different types of target markets and consumergroups, there are many brands competing with each other, and companies seize market share and hope to stabilize theirposition. Multi-brand strategy is an important measure for home enterprises to open up the growth ceiling and breakthrough their original boundaries. Based on their own strategic advantages, management advantages, product advantages,channel advantages and other comprehensive competitiveness, the Company continues to break through in buildingconsumer brands in the furniture industry, and strengthens the core brand image of "Oppein style". At the same time,according to the structure of different consumer groups, it launched high-end, mid-to-high end, younger and other brandswith different levels of user needs, such as Oppolia, Baunis, FITZCARL, miform and other series, to further expand thecoverage of market segments and end consumers, provide full choices for consumers, and further enhance thecomprehensive strength of market competition, which will help to open up the growth space in an all-round way.
4. Informatization helps to upgrade experience, improve the efficiency of the whole process, and continue totap the space for cost reduction and efficiency enhancement
With the continuous promotion of the furniture industry, the development of informatization, which goes deep intoall links and businesses of the furniture industry chain, is a key factor to improve the operating efficiency of enterprisesand reduce production costs. To a certain extent, it can help the landing and implementation of enterprise developmentstrategies, and the importance of building strong informatization capabilities and barriers is becoming increasinglyprominent. Informatization capacity is an important basis for the upgrading and improvement of the whole process offurniture consumption experience. The construction of informatization capacity in the furniture industry continues toadvance from the design and rendering of front end renderings, the optimization of disassembly and review processes,the design drawings to the one-click connection at the factory end, and provides customized furniture users withWYSIWYG, efficient and timely response, process improvement and other high-quality experiences. After years of
development and market cultivation, the work efficiency of front end designers has been greatly improved, and consumerscan see design drawings close to the real scene and effect in a relatively short period of time, which promotes thetransformation from intended customers to transaction customers to a certain extent. In the future, the development ofinformatization will further focus on the production links at the factory side, through the transformation and upgrading ofmachinery, equipment and production systems, process sorting and efficiency optimization, it will fully tap theoptimization space, transfer more profits excavated at the back end to consumers, and promote the further improvementof the cost performance ratio of consumers' home consumption. Around informatization, the Company designs amarketing service management system with the help of MTDS terminal to realize the transformation from "humancommand machine" to "machine command machine", reduce dependence on people and further improve human efficiency.The Company's informatization advantages are reflected in active investment and comprehensive opening up, fromcatching up to surpassing, and continuously driving the efficiency improvement and cost optimization of front and backend order design and production and all links of the whole category.(II) Company development strategy
√ Applicable □ Not applicable
"Home, love and Oppein" is not only a well-known advertising slogan, but also the glory and goal of our 29-yearstruggle. The Company's corporate vision is positioned to "build Oppein into a world excellent home furnishingenterprise". Looking at the present, in the face of the rapid change of the industry and the world of great change, only byfollowing the trend can we remain in the forefront. To this end, the Company will continue to work around the "threehorses and one vehicle" strategy:
1. Informatization strategy: The successful application of Oppein informatization, first, improves the user experience,users can feel the future home through three-dimensional model browsing, high-definition rendering, 720° rendering andsmall video in the design stage; second, the direct application of design data greatly improves the accuracy and efficiencyof quotation, ordering, splitting, technical review, price review and settlement; third, the improvement of the accuracyand efficiency of these links means the shortening of order design, order conversion cycle, product delivery cycle, andfewer errors. In addition, Oppein informatization conforms to the development needs of the future decoration business ofthe whole Group. In the future, Oppein informatization will also empower dealers to expand new formats throughinnovative technological means such as Internet, big data, cloud computing, AI artificial intelligence and supply chaincollaboration, reconstruct the business ecology, industry chain and value chain of large home furnishing, innovate andtransform the traditional customization model and upgrade it into a modern, one-stop delivery and new generation oflarge home furnishing business model.
2. Building a large home furnishing model: Oppein is the first enterprise in the industry to put forward a breakthroughdevelopment strategy for large home furnishing. The core of the strategy is to grow from a single product provider to ahome integration solution provider to solve the demand pain points of consumers and channel providers. Driven by thedual advantages of first mover advantage and enterprise organization and operation coordination ability, Oppein's largehome furnishing strategy will continue to move forward: On the one hand, we will quickly perceive and deepen theresearch and building of various large home furnishing models, and explore a large home furnishing development paththat conforms to the situation of Oppein and adapts to the market situation; on the other hand, we will continue to exploreinnovative business models for the integration of cabinets and bathrooms, the customization of good appearance wholehome, whole decoration large home furnishing, retail large home furnishing and other categories.
3. Oppein manufacturing 2025: Based on the Company's informatization strategy and large home furnishing strategy,the manufacturing side efficiently realizes the continuous evolution of products from single channel to multi-channel,from whole home customization to whole case customization, effectively promotes the landing of large home furnishingstrategy from the source of products and services, continuously deepens the integration of design and production, andcontinuously upgrades the underlying architecture of CAXA to create an integrated design software more suitable forlarge home furnishing scenarios, comprehensively improves the overall level of intelligent and automated manufacturing,focuses on the construction of digital factory cloud, and builds Oppein manufacturing 2025 digital lighthouse factory.
4. Comprehensive optimization of terminals: While maintaining the advantages and status of the original channels,the Company will actively lay out home decoration, whole decoration, bag check, online and foreign trade channelbusiness, channel management, system management and innovation management in parallel, constantly optimizemanagement methods, pilot new models multi-dimensionally, and constantly enrich and upgrade terminal sales forms.
5. Brand building: At present, the main home decoration and home furnishing consumers show outstandingcharacteristics such as youth, branding, health, intellectualization and one-stop, which is the new direction of brandpromotion strategy in the future. The Company will gradually build the original "product brand" to "platform brand". Asone of the core elements of enterprise development, brand reputation will bring better customer stickiness to the productsand services of brand enterprises, and also bring broader imagination space to the development of brand enterprises. TheCompany will continue to carry out brand building and management through multiple channels and forms, so as to make"home, love and Oppein" more deeply rooted in the hearts of the people.
(III) Business plan
√ Applicable □ Not applicable
Entering 2023, we are pleased to see that the production and living order of the whole society has gradually returnedto normal, governments at all levels have introduced various economic stimulus and protection policies, and consumptionwill probably gradually recover. Faced with the current situation, we generally maintain cautious optimism, and Oppeinpeople will work towards the same goal, gather the strength of the masses, and strive to break through! In 2023, theCompany strives to achieve a year-on-year increase in operating income of 10%-15% and a year-on-year increase in netprofit of 10%-15%. (Special note: The above indicators are intended to clarify the Company's operating and internalmanagement control objectives, and do not represent the Company's performance guidance or profit forecast for 2023, letalone its performance commitment to investors. Whether the above objectives can be achieved is affected by many factors,such as macroeconomic environment, market conditions, industry development and management team efforts, and thereare certain uncertainties. Investors are advised to pay attention to risks.) The specific plans are as follows:
1. Continuously deepen management innovation, use "system" to stimulate the vitality of the wholeorganization and cope with various changes and challenges
"Extreme climate will force extreme pressure, and under extreme pressure, most enterprises will be crushed into thedust of history, and only a few enterprises will undergo atomic deconstruction and remodeling, just as graphite carbonbecomes diamond"! In 2022, the extreme operating pressure forced the Company to reflect deeply and comprehensively.Based on a series of in-depth self-analysis, the Company launched a new round of comprehensive reform. In 2023, theCompany will continue to practice, revise and enhance the support capacity of middleground operation, and consolidatethe foundation of high-quality development management:
First, the Company should strengthen the construction and reform of the system and incentive mechanism morethoroughly and sparingly, and use the "system" to stimulate and activate the whole organization to cope with variouschanges and challenges. The Company will fully activate the organization by implementing measures such as the reformof incentive mechanism for timed posts, functional assessment at the Group level and the reform and optimization ofincentive policies, stimulate the maximum creativity of various posts, and form a joint force of enterprises to overcomedifficulties in overall competitiveness; second, the Company should build a systematic operation capability that matchesthe strategy with process governance, so as to achieve the construction of end-to-end business capability and supportcapability of organizational strategic objectives.
2. Continue to explore and practice the road of climbing the peak of large home furnishing strategy on bothsides. Oppein whole decoration large home furnishing and a wider range of retail large home furnishing are thetwo sides of the peak of large home furnishing and the main way to reach the top
(1) Oppein/Baunis whole decoration large home furnishing "advances forward with two wings and collaboratesglobally". First, the Company should further give full play to the system advantages of the Company's large homefurnishing production and management, create a "new whole decoration" strategy, and continue to lead cross-industryintegration breakthroughs; second, the Company should fully enable terminals, continue to promote the innovation of V8operation system and "operation 1+8" system, and enhance terminal traffic acquisition and operation capabilities; third,the Company should further optimize investment promotion, cooperate with the existing business model and enablingsystem through investment promotion, and transport them to more potential high-quality partners; fourth, productextension, on the premise of having a better sales foundation for kitchen cabinets and wardrobes, through product R&D,package integration, mechanism guidance to increase the sales proportion of wooden doors, bathrooms, supportingproducts and other products in the whole decoration channel, so as to promote the sustained growth of performance.
(2) Retail large home furnishing is divided into two ways, one way to the Red Sea and the other way to the blue sea.First, conform to the trend of home passenger flow fragmentation, promote online and offline integration, extend thecustomer acquisition scenarios of traditional stores through "1+N+X", and enhance the customer acquisition ability in alldimensions; second, speed up the integration of categories, provide consumers with the convenience of integrated design,one-stop purchase and package completion of home space through the integration of kitchen and bathroom and the furtherupgrading of the whole business, enhance the competitive threshold of home industry, and accelerate the expansion ofthe Company's leading edge; third, the "professional+service" enabling retail system of Oppein large home furnishing istransformed into the whole decoration track, so as to further consolidate and promote Oppein retailer to become the leaderof the whole decoration track (blue sea).
3. Forge ahead and deepen the road of Oppein informatization
First, continue to deepen the integration of design and production, upgrade the underlying architecture of CAXA,and build an integrated design software more suitable for large home furnishing scenarios; second, focus on theconstruction of digital factory cloud and build Oppein manufacturing 2025 digital lighthouse factory; third,comprehensively plan, design, develop and deep integrate automatic sorting, testing, transshipment, packaging,warehousing, processing data acquisition modules and work division management in the workshop; fourth, promote the
transformation of loading and unloading automation, robot electronic saw transformation, drilling line, sorting/packagingautomation transformation and other projects, and comprehensively improve the overall level of intelligent manufacturing.
4. Strengthen the core competitiveness of products, continue to iterate and upgrade, and timely meet the needsof consumers for the appearance, function, supporting, quality, cost performance and delivery time of homeproducts
First, increase R&D and reserves of technology and process, and effectively transform products; second, build acomplete delivery management system for the whole category, and establish a plan management model and deliveryservice standards to meet customer needs; third, reconstruct the quality management system in an all-round way, focusingon promoting the Group's quality reform project, terminal design and installation quality assistance and design problemprevention system construction project.(IV) Possible risks
√ Applicable □ Not applicable
1. Risk of changes in market demand
In 2023, throughout the international community, the economic downturn in the past three years, the haze of riskspillover in the domestic real estate industry has not yet completely dispersed, the economic situation is still in a relativelyweak state, the society has begun to be active due to circulation, and the economy has gradually recovered due to activity,but the operating environment and supply chain of domestic and foreign markets also face uncertainty, which will bringuncertainty to the Company's production and operation objectives in 2023.
Through the analysis of consumer demand portraits, the Company will accurately grasp the "consumer demand forthe transformation of second-hand houses and stock houses" and "consumer demand for new houses (rough, partialdecoration, fine decoration)", through the rectification of the whole house, local rectification, hard decoration and bagcheck, with the whole home package as the starting point, Oppein whole decoration large home furnishing and retail largehome furnishing models should be carried out simultaneously to provide consumers with integrated design, one-stopmatching and a package of services, to meet the needs of consumers for "better, faster and more economically", improvethe consumption experience of home decoration consumers, and stimulate and awaken their consumption demand.
2. Risk of increased market competition
The Company's customized furniture industry belongs to the furniture subdivision industry. As the industry leader,the Company has strong advantages in design and development, brand, service and channel. However, due to the fact thatthe customized furniture industry is in a shift period from high speed to medium-high speed growth, coupled with theincrease of cross-border entrants in the industry, the release of production capacity of listed companies' investmentprojects, and the fragmentation of passenger flow, the change of internal and external factors will lead to the industrycompetition from the low-level competition of product price to the compound competition level composed of brand,network, service, talent, management and scale.
The Company will continue to promote the iteration of business model, optimize its organizational structure, meetthe whole decoration business, improve the layout of industrial chain, implement the Company's large home furnishingstrategy in multiple dimensions, constantly polish product packages to meet the needs of traditional retail customers, andincrease cooperation with decoration enterprises based on the general direction of "product decoration", seize trafficentrances in multiple directions, and obtain incremental traffic.
3. Risk of fluctuations in raw material prices
The raw materials of customized furniture products produced by the Company include particleboard, MDF,functional hardware, quartz plate and some purchased electrical appliances. In the past three years, the Company's directmaterial cost accounts for a high proportion of production cost, and the change of raw material price has a greater impacton the Company's production cost. Since the end of 2020, the prices of major raw materials have risen, and up to nowthey are still running at a high level. If the purchase prices of raw materials fluctuate sharply in the future, it may have anuncertain impact on the Company's profitability.
As the largest enterprise in the production and marketing of kitchen cabinets and wardrobes (whole housecustomization) in the world, under the adverse procurement situation of fluctuations in raw materials and commoditymarkets in recent years, the Company actively employs its advantages of large purchase scale and abundant operatingcash flow to expand and innovate a variety of cost control ideas. The supply chain management center focuses on the fourmajor aspects of "lock strategy", "control rhythm", "optimize structure" and "sustainability" to control the direct impactof sharp fluctuations in raw material prices on the Company's purchase costs.
4. Dealer management risk
Dealer exclusive store sales are the main sales model in the customized furniture industry. The sales model of dealer
exclusive stores is conducive to customized furniture enterprises to expand their marketing network with the help of theregional resource advantages of dealers, effectively penetrate the markets at all levels and improve the market share ofproducts. Although the Company and dealers have agreed on each other's rights and obligations in the cooperationagreement signed, and have unified management of dealers in terms of store image design, personnel training and productpricing, if individual dealers fail to sell and publicize in accordance with the agreement, it may have an uncertain impacton the Company's brand image.The Company is in a cooperative relationship with dealers. On the premise of conforming to the changing trend ofthe market and combining with the overall business promotion of the Company, the Company will provide all-roundempowerment and supervision for the daily operation and customer service of distributors in a multi-dimensional way,including but not limited to flow empowerment, management empowerment, model empowerment and strategicempowerment. At present, the Company has a relatively perfect dealer introduction, assessment and withdrawal systemguarantee, operating in long term, continuously upgrading and iterating on the premise of respecting the law of marketchange, effectively implementing and landing, which is conducive to more efficient, closer and stable cooperationbetween headquarters and dealers to jointly provide consumers with better products and services. In addition, theCompany has formulated an early warning mechanism for abnormal operation of dealers, and when there are abnormalindications, there will be timely management measures to follow up and effectively safeguard the rights and interests ofconsumers.(V) Other
□ Applicable √ Not applicable
VII. The Company fails to disclose the situation and reasons in accordance with the standards due to nonapplication of the standards or special reasons such as state secrets and trade secrets
□ Applicable √ Not applicable
Section IV Corporate governanceI. Notes on corporate governance
√ Applicable □ Not applicable
During the reporting period, the Company strictly complied with the requirements of laws, regulations, departmentalrules and normative documents such as the Company Law, the Securities Law, the Guidelines for the Governance forListed Companies, the Measures for the Administration of Information Disclosure of Listed Companies, and the Rules forthe Listing of Stocks on the Shanghai Stock Exchange. In line with the actual situation of the Company, the Companycontinuously improved the corporate governance structure, strengthened the management of insider information,strengthened the awareness of responsibility for information disclosure, attached importance to the management ofinvestor relations and earnestly safeguarded the legitimate rights and interests of the Company and shareholders. There isno difference between the corporate governance status and the requirements for Guidelines for the Governance for ListedCompanies, as follows:
(I) About shareholders and general meetings of shareholders
The Company shall convene the general meetings of shareholders in strict accordance with the provisions andrequirements of the Guidelines for the Governance for Listed Companies, the Articles of Association and the Rules ofProcedure for General Meetings of Shareholders. The deliberation procedures of various proposals shall be open andtransparent, the decision-making shall be fair and equitable, and the resolutions shall be legal and effective. There is nosituation in which major matters of the Company have not been deliberated by the general meetings of shareholders, noris there a situation in which they are implemented first and then deliberated. During the reporting period, the Companyheld three general meetings of shareholders in 2022, and the specific resolutions are detailed in the "Brief introduction tothe general meeting of shareholders". Each meeting adopted a combination of on-site voting and online voting to facilitatethe participation of minority shareholders in decision-making, ensure the right of minority shareholders to know,participate and vote on major matters of the Company, and fully protect the interests of the majority of minority investors.
(II) About the Company and controlling shareholders
The controlling shareholders of the Company enjoy the rights of investors through the general meetings ofshareholders in accordance with the law, and do not directly or indirectly interfere with the Company's productiondecisions and business activities beyond the general meetings of shareholders. The Company has independent businessand independent operation ability, the controlling shareholders can strictly regulate their own behavior, the Company hasno related party transactions with the controlling shareholders, the Company and the controlling shareholders haveachieved complete independence in personnel, assets, business, institutions, finance and other aspects, and the Company'sboard of directors, board of supervisors and internal institutions can operate independently. Since the listing of theCompany, there was no situation that major shareholder occupies the Company's funds and assets.
(III) About directors and the board of directorsDuring the reporting period, the board of directors of the Company was able to conscientiously perform its duties,make prudent and scientific decisions, and effectively implement the relevant decisions of the general meetings ofshareholders in strict accordance with the provisions of the Company Law, the Articles of Association and the Rules ofProcedure of the Board of Directors. During the reporting period, the board of directors held 12 meetings, and theconvening of each meeting met the requirements of relevant regulations. During the reporting period, the Companycompleted the election of the new board of directors, and the fourth board of directors was composed of 7 directors,including 3 independent directors. The selection and appointment procedures shall be carried out in strict accordance withthe provisions of the Articles of Association, and the number and composition of the board of directors of the Companyshall meet the requirements of laws and regulations.
The board of directors has four committees: Strategy Committee, Audit Committee, Nomination Committee andRemuneration and Assessment Committee. In accordance with the provisions of their respective rules of work, the specialcommittees shall fulfill their duties diligently, conscientiously and responsibly, and promote the scientific decision-making and standardized operation of the board of directors.During the reporting period, the resolutions of the board of directors and each committee of the Company are detailedin "relevant information of the board of directors held during the reporting period" and "special committees under theboard of directors".(IV) About supervisors and the board of supervisorsDuring the reporting period, in line with the attitude of being responsible to the Company and all shareholders, theboard of supervisors conscientiously performed its duties in accordance with the relevant provisions and requirements ofthe Company Law, the Articles of Association, the Rules of Procedure of the Board of Supervisors and other relevantprovisions and requirements, attended the general meetings of shareholders and the board of directors, convened the boardof supervisors, and exercised its supervisory powers in accordance with the law, supervised corporate governance,material matters, financial condition and compliance with the duties performed by directors, managers and other seniormanagers of the Company and promoted the legitimate and standardized operation of the Company. In 2022, the Companyheld 11 meetings of the board of supervisors, and the convening of each meeting met the requirements of relevantregulations. During the reporting period, the Company conducted a new election of the board of supervisors, and thefourth board of supervisors set up three supervisors, including one employee representative supervisor. The structure ofthe members of the board of supervisors is reasonable, and the qualifications and selection procedures meet therequirements of relevant laws, regulations and the Articles of Association.(V) About information disclosure and transparencyThe Company's information disclosure work has been evaluated by the Shanghai Stock Exchange for class A again,and has been evaluated by class A for four consecutive years. During the reporting period, the Company also implementedstock option incentive plans, employee stock ownership plans, re-public issuance of convertible bonds and other majorprojects. The above projects and other daily temporary announcements are in strict accordance with the Company Law,the Securities Law, the Measures for the Administration of Information Disclosure of Listed Companies, and the Rulesfor the Listing of Stocks on the Shanghai Stock Exchange and other relevant laws and regulations, as well as the Articlesof Association, the Management System for Information Disclosure of Oppein Home Group, and the Regulations on theAdministration of Major Information Submission within Oppein Home Group, fulfill the obligation of informationdisclosure, and manage the registration and submission of insider information at various stages according to regulations.(VI) About investor relations managementTemporary announcements are an important channel for investors to learn about the daily operation of the Companyand the progress of major matters, and periodic reports are an important reference for investors to make value judgmentsand investment decisions on the Company's stock. During the reporting period, the Company disclosed periodic reportsand various temporary announcements in accordance with regulations, which would truthfully, accurately, completely,timely and fairly disclose information that may have a significant impact on the Company's production and operation andon the Company's stock price. In each periodic report and quarterly report, the Company combines the industry policyand market dynamics, deeply compares and analyzes the Company's industry development trend, business model, corecompetitiveness, business plan and other industry and operational information, and discloses the social responsibilityreport (Chinese and English Edition) to the market for the first time in 2022 to further convey the Company's value todomestic and foreign investors.
After the disclosure of each periodic report and quarterly report, the Company held a performance presentation bycombining live network broadcasting with telephone access, with the active participation of the president of the Company,the person in charge of finance and other management, so that investors can have a more intuitive and in-depthunderstanding of the Company's current operation. The total number of views viewed by online investors at eachperformance presentation exceeded 100,000. During the reporting period, the Company won the new wealth annual best
IR team award, outstanding IR enterprise, performance presentation diligence award, excellent IR team, small andmedium-sized investor relations interaction award and best new media operation award.
In 2022, the Company did not fulfill the review procedures for important matters or timely fulfill the informationdisclosure procedures. Whether there are significant differences between corporate governance and laws, administrativeregulations and the provisions of the CSRC on the governance of listed companies; if there are major differences, thereasons shall be explained
□ Applicable √ Not applicable
II. Specific measures taken by the controlling shareholders and actual controllers of the Company to ensure the
independence of the Company's assets, personnel, finance, institutions and business, as well as solutions, work
progress and follow-up work plans taken to affect the independence of the Company
□ Applicable √ Not applicable
The controlling shareholders, actual controllers and other units under their control engage in the same or similar businessas the Company, as well as the impact of horizontal competition and major changes in interbank competition on theCompany, the solutions taken, the progress of solutions and the follow-up solutions
□ Applicable √ Not applicable
III. Brief introduction to general meetings of shareholders
| Session | Date | Search index of designated websites published in the resolution | Disclosure date published in the resolution | Resolution of the meeting |
| The first provisional general meeting of shareholders in 2022 | February 16, 2022 | Shanghai Stock Exchangewww.sse.com.cn, Announcement No.: 2022-012 | February 17, 2022 | The following proposals were deliberated and approved: 1. Proposal on Adjusting the Application of the Company and Its Holding Subsidiaries for Comprehensive Credit Line from Banks in 2021-2022 2. Proposal on the First Phase of Excellent Employee Stock Ownership Plan (Draft) of Oppein Home Group Inc. and its summary 3. Proposal on the Measures for the Administration of the First Phase of Excellent Employee Stock Ownership Plan (Draft) of Oppein Home Group Inc. 4. Proposal on Submitting to the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related to the First Phase of the Company's Excellent Employee Stock Ownership Plan |
| Annual General Meetings of Shareholders 2021 | May 27, 2022 | Shanghai Stock Exchange www.sse.com.cn, Announcement No.: 2022-037 | May 28, 2022 | The following proposals were deliberated and approved: 1. Report on the Work of the Board of Directors of the Company in 2021 2. Report on the Work of the Board of Supervisors of the Company in 2021 3. Proposal on the Annual Report of the Company for 2021 and Its Summary 4. Annual Financial Statement of the Company for 2021 5. Financial Budget Report of the Company for 2022 6. Proposal on Profit Distribution Plan of the Company for 2021 7. Proposal on Determining the External Guarantee Quota of the Company and Its Holding Subsidiaries 8. Proposal on Confirming the |
| Remuneration of Non-independent Directors of the Company in 2021 9. Proposal on the Renewal of Huaxing Certified Public Accounts LLP (Special General Partnership) as the Company's Audit Institution in 2022 | ||||
| The second provisional general meeting of shareholders in 2022 | September 29, 2022 | Shanghai Stock Exchange www.sse.com.cn, Announcement No.: 2022-080 | September 30, 2022 | The following proposals were deliberated and approved: 1. Proposal on Allowance for Independent Directors of the Fourth Board of Directors 2. Proposal on Reformulating the Management System of Raised Funds of Oppein Home Group Inc. 3. Proposal on Providing Performance Guarantee for Wholly-owned Subsidiaries 4. Proposal on Amending Some Provisions of the Articles of Association 5. Proposal on Amending Some Provisions of the Rules of Procedure of the Board of Directors of Oppein Home Group Inc. 6. Proposal on the Election of Non-independent Directors 7. Proposal on the Election of Independent Directors 8. Proposal on the Election of Supervisors |
Preferred shareholders whose voting rights have been restored request the convening of a provisional general meeting ofshareholders
□ Applicable √ Not applicable
Information note of general meetings of shareholders
√ Applicable □ Not applicable
The convening procedures of the above-mentioned general meetings of shareholders shall comply with the relevantlaws, regulations, normative documents such as the Company Law, the Rules for General Meetings and the relevantprovisions of the Articles of Association; the qualifications of the personnel attending the meeting and the convener arelegal and effective; the voting procedures and results of each general meeting of shareholders are legal and effective.
IV. Directors, supervisors and senior managers(I) Shareholding changes and remuneration of current and resignation directors, supervisors and senior managers during the reporting period
√ Applicable □ Not applicable
Unit: nos.
| Name | Post (note) | Gender | Age | Term started on | Term ended on | Number of shares held at the beginning of the year | Number of shares held at the end of the year | Increase and decrease of shares in the year | Reasons for increase or decrease | Total pre-tax remuneration received from the Company during the reporting period (CNY '0,000) | Whether to obtain remuneration from related parties of the Company |
| Yao Liangsong | Chairman | Male | 58 | 2022/9/29 | 2025/9/29 | 403,200,000 | 403,200,000 | 0 | / | 96.71 | No |
| Tan Qinxing | Vice chairman | Male | 58 | 2022/9/29 | 2025/9/29 | 1,444,380 | 1,444,380 | 0 | / | 929.65 | No |
| Yao Liangbai | Vice chairman | Male | 53 | 2022/9/29 | 2025/9/29 | 51,578,316 | 51,578,316 | 0 | / | 195.64 | No |
| Liu Shunping | Director | Male | 46 | 2022/9/29 | 2025/9/29 | 16,544 | 16,544 | 0 | / | 36.42 | No |
| Qin Shuo | Independent director | Male | 54 | 2022/9/29 | 2025/9/29 | 0 | 0 | 0 | / | 12.83 | No |
| Jiang Qi | Independent director | Male | 42 | 2022/9/29 | 2025/9/29 | 0 | 0 | 0 | / | 12.83 | No |
| Li Xinquan | Independent director | Male | 55 | 2022/9/29 | 2025/9/29 | 0 | 0 | 0 | / | 3.75 | No |
| Zhu Yaojun | Chairman of board of supervisors | Male | 44 | 2022/9/29 | 2025/9/29 | 0 | 0 | 0 | / | 33.34 | No |
| Zhao Lili | Supervisor | Female | 45 | 2022/9/29 | 2025/9/29 | 0 | 0 | 0 | / | 26.27 | No |
| Meng Qingwei | Employee representative supervisor | Male | 37 | 2022/9/29 | 2025/9/29 | 0 | 0 | 0 | / | 9.38 | No |
| Wang Huan | Financial administrator | Female | 51 | 2022/9/29 | 2025/9/29 | 307,251 | 307,251 | 0 | / | 136.27 | No |
| Ou Yingying | Secretary of the board | Female | 42 | 2022/9/29 | 2025/9/29 | 800 | 800 | 0 | / | 9.33 | No |
| Chu Xiaoping | Independent director (resignation) | Male | 67 | 2019/9/30 | 2022/9/29 | 0 | 0 | 0 | / | 9.08 | No |
| Zhong Huawen | Chairman of the board of supervisors (resignation) | Male | 54 | 2019/9/30 | 2022/9/29 | 558,719 | 558,719 | 0 | / | 374.92 | No |
| Xie Hang | Supervisor (resignation) | Male | 58 | 2019/9/30 | 2022/5/27 | 0 | 0 | 0 | / | 209.11 | No |
| Li Lan | Employee representative supervisor (resignation) | Female | 41 | 2019/9/30 | 2022/9/29 | 0 | 1,000 | 1,000 | / | 74.71 | No |
| Yang Yaoxing | Secretary of the board of directors (resignation) | Male | 58 | 2019/9/30 | 2022/9/29 | 664,617 | 664,617 | 0 | / | 107.91 | No |
| Total | / | / | / | / | / | 457,770,627 | 457,771,627 | 1,000 | / | 2,278.17 | / |
Notes: 1. The "total pre-tax remuneration received from the Company during the reporting period" in the above Table is calculated on the basis of the actual working hours of directors,supervisors and senior executives; the difference in total is due to rounding.
2. The "number of shares held at the beginning of the year" in the above Table is based on the actual tenure of directors, supervisors and senior executives.
| Name | Major work experience |
| Yao Liangsong | Male, born in August 1964, Chinese nationality, without permanent overseas residency, Han nationality, graduated from Beihang University in 1986, with a bachelor's degree in machinery manufacturing, a senior manager. He was a teacher of Jingdezhen (Jiangxi Province) Changhe Aircraft Manufacturing Factory Technical School, director of Guangzhou Office of Yanliang (Xi'an) Wireless Power Plant, chairman of Guangzhou Kexin New Technology Development Co., Ltd., chairman of Oppein Kitchen Cabinet, vice chairman of the Ninth CPPCC National Committee in Baiyun District, Guangzhou, executive chairman of the China Furniture & Decoration Chamber of Commerce, chairman of the Kitchen Cabinet Professional Committee of the China Furniture & Decoration Chamber of Commerce, founding chairman of the Guangdong Furnishing Industry Federation, vice chairman of Guangdong Entrepreneurs Council and vice chairman of Guangzhou General Chamber of Commerce. He is currently the chairman and president of the Company. |
| Tan Qinxing | Male, born in April 1964, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of aircraft manufacturing engineering. He was deputy director and senior engineer of Aircraft Technology Department of Jingdezhen (Jiangxi) Changhe Aircraft Industry Co., Ltd., general manager and manufacturing president of Kitchen and Wardrobe Business Department of Oppein Home Group. He is currently the vice chairman, vice president and executive president of the Company. |
| Yao Liangbai | Male, born in April 1969, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of philosophy. He was a teacher of Guangdong Institute for Nationalities (now Guangdong Polytechnic Normal University), director of Administrative Department and assistant president of Oppein Home Group. He is currently secretary of the party committee, vice chairman and vice president of the Company. |
| Liu Shunping | Male, born in August 1976, Chinese nationality, without permanent overseas residency, Han nationality, master of business administration, China Europe International Business School. He once served as general manager of Cabinet Business Department of Oppein Home Group, general manager of marketing of |
| Oppein Home Group, general manager of Whole Decoration Large Home Furnishing Business Department of Oppein Home Group and vice president of Marketing of Oppein Home Group; He is currently the general manager of the Whole Home Marketing Department of Oppein. | |
| Qin Shuo | Male, born in December 1968, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of arts, doctor of management. He was the editor in chief of Guangzhou South Wind Window magazine, the editor in chief of Yicai Media Group and the general manager of Shanghai China Business News Media Co., Ltd. He is currently an independent director of the Company, CEO of Shanghai Nalati Network Technology Co., Ltd. and an independent director of China Industrial Securities International Financial Group Limited. |
| Jiang Qi | Male, born in July 1980, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of law. He was a certified public accountant of Guangdong Branch of Asia Pacific (Group) CPAs (Special General Partnership). He is currently a partner of Guangzhou Chenchang Accounting Firm (General Partnership). In addition to serving as an independent director of the Company, Mr. Jiang Qi is also an independent director of Shenzhen Xinyichang Technology Co., Ltd. and Guangzhou Sie Consulting Co., Ltd. |
| Li Xinquan | Male, born in November 1967, Chinese nationality, without permanent overseas residency, Han nationality, master of arts. He was deputy secretary general of Guangzhou Municipal Committee, secretary of Shufu County Committee, member of the Standing Committee of Qingyuan Municipal Committee, executive vice mayor, member of the Party Group and deputy director of Human Resources and Social Security Department of Guangdong Province, vice chairman of Guangdong Federation of Trade Unions (part-time) and deputy general manager of CAS Venture Capital; He is currently an independent director of the Company, the chairman and general manager of Guoke Life Sciences (Guangdong) Co., Ltd., and the chairman of Guoao (Guangdong) Science and Technology Co., Ltd. |
| Zhu Yaojun | Male, born in January 1978, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of engineering. He was deputy general manager of bathroom manufacturing of Oppein Home Group, general manager of cabinet manufacturing of Oppein Home Group and general manager of Integrated Home Business Department of Oppein Home Group; He is currently the chairman and vice president of the board of supervisors of the Company. |
| Zhao Lili | Female, born in December 1977, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of economics and master of business administration. He was the chief financial officer of Xiwei (China) Investment Co., Ltd. in China; He is currently a supervisor of the Company and an administrative assistant to the president of the Group. |
| Meng Qingwei | Male, born in June 1985, Chinese nationality, without permanent overseas residency, Manchu, bachelor of law. He was the legal manager of Honz Pharmaceutical Co., Ltd.; He is currently the employee representative supervisor, company lawyer and Legal Department manager of Oppein Home Group. |
| Wang Huan | Female, born in November 1971, Chinese nationality, without permanent overseas residency, bachelor's degree, major in financial management. He was deputy financial manager, financial manager and deputy general manager of Financial Center of Oppein Home, and is currently the general manager of Financial Center of the Company. |
| Ou Yingying | Female, born in August 1980, Chinese nationality, without permanent overseas residency, Han nationality, master's degree, bachelor of law and master of business administration. He was the chief of the Securities Department of Guangzhou Iron and Steel Co., Ltd. and the manager of the Securities Affairs Department of Oppein Home Group. He is currently the secretary of the board of directors and the director of the Securities Affairs Department of the Company. |
| Chu Xiaoping (resignation) | Male, born in September 1955, Chinese nationality, without permanent overseas residency, Han nationality, doctor of management, professor and doctoral supervisor. He was once a professor, vice president and dean of Business School of Shantou University, an independent director of Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd., an independent director of Lafang Household Chemicals Co., Ltd., a professor and doctoral supervisor of Lingnan College Sun Yat-Sen University. During the reporting period, he served as an independent director of the third board of directors of the Company, an independent director of Guangdong Shengyi Technology Co., Ltd., an independent director of Guangzhou Golden Sea Professional Equipment Ltd. and an independent director of Times Neighborhood Holdings Limited. |
| Zhong Huawen (resignation) | Born in March 1968, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of machinery manufacturing technology and equipment. He was the technical director of Changzheng Machinery Factory of Sichuan Academy of Aerospace Technology, the factory director of Hong Kong Qingfa Lighting Co., Ltd., the manager of the Production Department of Jiangmen Yeebo Semiconductor Co., Ltd. and the general manager of Oppein Home |
| Kitchen Cabinet Manufacturing. During the reporting period, he served as the chairman of the third board of supervisors of the Company and is currently the vice president of the Group. | |
| Xie Hang (departing) | Male, born in August 1964, Chinese nationality, without permanent overseas residency, Han nationality, double bachelor's degree in literature and law. He worked in the Meizhou municipal government department. During the reporting period, he served as a supervisor of the third board of supervisors of the Company. |
| Li Lan (resignation) | Female, born in December 1981, Chinese nationality, without permanent overseas residency, Han nationality, once served as director of property control of Oppein Home Kitchen Cabinet, director of administrative and internal affairs of Supply Chain Management Department and manager of Supply Chain Planning, Management and Operation Department. During the reporting period, he served as the employee representative supervisor of the third board of supervisors and is currently the manager of Qingyuan Purchase Department. |
| Yang Yaoxing (resignation) | Male, born in April 1964, Chinese nationality, without permanent overseas residency, Han nationality, bachelor's degree, master's degree in business administration, engineer, senior economist. He was an engineer of the Planning and Control Department of Guangzhou Iron and Steel Co., Ltd., secretary of the Party Committee Office, deputy manager of the Securities Department, deputy director of the General Manager Office, director of the Work Department of the board of directors and secretary of the board of directors of the Company. During the reporting period, he served as secretary of the board of directors of the third board of directors and is currently the deputy general manager of administration, the chairman of the Labor Union and the instructor of master's degree students of Guangzhou University. |
Other information note
√ Applicable □ Not applicable
In accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China and other relevant laws and regulations, as well asthe Articles of Association of Oppein Home Group Inc., the Company held the second provisional general meeting of shareholders in 2022 on September 29, 2022, at which the directorsof the fourth board of directors and non-employee representative supervisors of the fourth board of supervisors of the Company were elected. On the same day, the Company held thefirst meeting of the fourth board of directors and the first meeting of the fourth board of supervisors, completed the election of chairman and vice chairman of the fourth board ofdirectors and chairman of supervisor meeting, confirmed the composition of special committees of the board of directors and appointed senior managers. For details, see theAnnouncement of Oppein Home on the Completion of the General Election of the Board of Directors and the Board of Supervisors and the Appointment of Senior Managers(announcement No.: 2022-083).
(II) Current and resignation directors, supervisors and senior managers during the reporting period
1. Employment in shareholders
□ Applicable √ Not applicable
2. Employment in other companies
√ Applicable □ Not applicable
| Name of employee | Name of other companies | Positions held in other companies | Term started on | Term ended on |
| Yao Liangsong | Guangzhou Ouerben Investment Co., Ltd. | Supervisor | March 2016 | - |
| Yao Liangsong | Beijing Jiaju Technology Co., Ltd. | Chairman | January 2019 | - |
| Yao Liangbai | Meizhou Yuanling Investment Industry Co., Ltd. | Legal representative, manager and executive director | August 2018 | - |
| Yao Liangbai | Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | Chairman | November 2019 | - |
| Yao Liangbai | Zhongju Hejia (Beijing) Investment Fund Management Co., Ltd. | Director | October 2017 | - |
| Qin Shuo | Shanghai Nalati Network Technology Co., Ltd. | Legal representative and executive director | September 2015 | - |
| Qin Shuo | China Taiping Insurance Holdings Company Limited | Director | February 2019 | - |
| Qin Shuo | Ningbo Lanfan Jingshuo Venture Capital Partnership (Limited Partnership) | Legal representative and partner | March 2017 | - |
| Qin Shuo | Shanghai Jiai Hospital Management Co., Ltd. | Director | December 2017 | - |
| Qin Shuo | China Industrial Securities International Financial Group Limited | Independent director | July 2016 | - |
| Qin Shuo | Guangzhou Mircrodream Media Culture Communication Co., Ltd. | Director | December 2015 | - |
| Qin Shuo | Wind Information Co., Ltd. | Director | October 2007 | - |
| Qin Shuo | Guangzhou Wan'gong Enterprise Management Consulting Co., Ltd. | Director | February 2018 | - |
| Qin Shuo | Wanxun Network Technology (Guangzhou) Co., Ltd. | Supervisor | March 2018 | - |
| Qin Shuo | Guangzhou Yuanchuan Information Technology Co., Ltd. | Supervisor | September 2016 | - |
| Jiang Qi | Guangzhou Chenchang Accounting Firm (General Partnership) | Executive partner | August 2018 | - |
| Jiang Qi | Guangzhou Runyan Information Technology Co., Ltd. | Supervisor | October 2021 | - |
| Jiang Qi | Guangdong Zhenyuan Private Equity Fund Management Co., Ltd. | Supervisor | April 2021 | - |
| Jiang Qi | Guangzhou Runyan Enterprise Management | Supervisor | October 2021 | - |
| Name of employee | Name of other companies | Positions held in other companies | Term started on | Term ended on |
| Consulting Co., Ltd. | ||||
| Jiang Qi | Guangzhou Runyan Consulting Co., Ltd. | Supervisor | January 2018 | - |
| Jiang Qi | Guangzhou Zhonggong Intellectual Property Service Co., Ltd. | Supervisor | April 2017 | - |
| Jiang Qi | Shenzhen Xinyichang Technology Co., Ltd. | Independent director | June 2019 | - |
| Jiang Qi | Guangdong Phonpa Home Technology Co., Ltd. | Independent director | August 2020 | - |
| Jiang Qi | Guangzhou Tongxin Sports Co., Ltd. | Independent director | December 2020 | - |
| Jiang Qi | Guangdong Tongli Customization Corp Ltd. | Independent director | July 2020 | - |
| Jiang Qi | Huizhou Dongjin Agriculture Co., Ltd. | Independent director | March 2022 | - |
| Jiang Qi | Guangzhou Sie Consulting Co., Ltd. | Independent director | March 2022 | - |
| Chu Xiaoping (resignation) | Guangdong Shengyi Technology Co., Ltd. | Independent director | April 2017 | - |
| Chu Xiaoping (resignation) | Guangzhou Golden Sea Professional Equipment Ltd. | Independent director | July 2019 | July 2022 |
| Chu Xiaoping (resignation) | Guangzhou Baiyunshan Biological Products Co., Ltd. (formerly known as Guangzhou Nuocheng Biological Products Co., Ltd.) | Director | September 2020 | - |
| Chu Xiaoping (resignation) | Times Neighborhood Holdings Limited | Independent director | December 2019 | - |
| Explanation of employment in other units | None | |||
(III) Remuneration of directors, supervisors and senior managers
√ Applicable □ Not applicable
| Decision-making procedures for remuneration of directors, supervisors and senior managers | The remuneration of non-independent directors, supervisors and senior managers of the Company is related to their employment in the Company. The Company shall implement it in accordance with the relevant systems and regulations such as the Remuneration Management System of Oppein Home Group, the Measures for the Administration of Remuneration and Performance Appraisal of Directors (Non-independent directors) and Senior Managers of the Company, and its remuneration shall be submitted to the board of directors and the general meeting of shareholders of the Company for deliberation and determination after approval by the Remuneration and Assessment Committee of the Company; non-independent directors and supervisors of the Company have no post allowance; the allowance for independent directors was deliberated and determined by the second provisional general meeting in 2019 and the second provisional general meeting in 2022. |
| Basis for determining the remuneration of directors, supervisors and senior managers | The remuneration of directors, supervisors and senior managers of the Company is related to their employment in the Company, and the remuneration is determined by combining basic remuneration with performance remuneration. The basic remuneration is determined by referring to the remuneration level of the same industry and combining the position, ability and work intensity; performance compensation is based on the remuneration management system, combined with the Company's performance, personal performance, work completion and contribution. The allowance for |
| independent directors shall be determined by reference to the allowance level for independent directors of listed companies and other factors. | |
| Actual payment of remuneration of directors, supervisors and senior managers | The remuneration of non-independent directors, supervisors and senior managers of the Company shall be paid on a monthly basis; the allowance for independent directors is paid quarterly. |
| Total actual remuneration received by all directors, supervisors and senior managers at the end of the reporting period | CNY 22.7817 million |
(IV) Changes in directors, supervisors and senior managers of the Company
√ Applicable □ Not applicable
| Name | Positions held | Changes | Reasons for changes |
| Liu Shunping | Non-independent director | Election | General election |
| Li Xinquan | Independent director | Election | General election |
| Chu Xiaoping | Independent director | Resignation | General election |
| Zhu Yaojun | Chairman of board of supervisors | Election | General election |
| Zhao Lili | Supervisor | Election | General election |
| Meng Qingwei | Employee representative supervisor | Election | General election |
| Zhong Huawen | Chairman of board of supervisors | Resignation | Term expires |
| Xie Hang | Supervisor | Resignation | Resigned on May 27, 2022 |
| Li Lan | Employee representative supervisor | Resignation | Term expires |
| Yang Yaoxing | Secretary of the board | Resignation | Term expires |
| Ou Yingying | Secretary of the board | Appointment | General election |
(V) Explanation of punishment by securities regulatory authorities in the past three years
□ Applicable √ Not applicable
(VI) Others
□ Applicable √ Not applicable
V. Relevant information of the board of directors held during the reporting period
| Session | Date | Resolution of the meeting |
| The 20th meeting of the third board of directors | January 24, 2022 | The following proposals were deliberated and approved: 1. Proposal on Adjusting the Plan for the Public Issuance of Convertible Corporate Bonds by the Company; 2. Proposal on the Plan for the Public Issuance of Convertible Corporate Bonds by the Company (Revised Draft); 3. Proposal on the Feasibility Analysis Report on the Use of Funds Raised by the Company's Public Issuance of Convertible Corporation Bonds (Revised Draft); 4. Bill on the Dilution of Spot Returns and Filling Measures for the Public Issuance of Convertible Corporate Bonds by the Company and the Commitments of Relevant Subjects (Revised Draft); 5. Proposal on Adjusting the Application of the Company and Its Holding Subsidiaries for Comprehensive Credit Line from Banks in 2021-2022; 6. Proposal on the First Phase of Excellent Employee Stock Ownership Plan (Draft) of Oppein Home Group Inc. and its summary; 7. Proposal on the Measures for the Administration of the First Phase of Excellent Employee Stock Ownership Plan (Draft) of Oppein Home Group Inc.; 8. Proposal on Submitting to the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related to the First Phase of the Company's Excellent Employee Stock Ownership Plan; 9. Proposal on Convening the First Provisional General Meeting in 2022. |
| The 21st meeting of the third board of directors | April 21, 2022 | The following proposals were deliberated and approved: 1. Report on the Work of the Board of Directors of the Company in 2021; 2. Business Report of the General Manager of the Company in 2021; 3. Report on the Work of Independent Directors of the Company in 2021; 4. Report on the Performance of the Audit Committee of the Board of Directors of the Company in 2021; 5. Proposal on the Annual Report of the Company for 2021 And Its Summary; 6. Annual Financial Statement of the Company for 2021; 7. Financial Budget Report of the Company for 2022; 8. Proposal on Profit Distribution Plan of the Company for 2021; 9. Internal Control Evaluation Report of the Company in 2021; 10. Proposal on Determining the External Guarantee Quota of the Company and Its Holding Subsidiaries; 11. Proposal on Determining the Amount of Cash Management by the Company and Its Holding Subsidiaries Using Their Own Funds; 12. Proposal on Confirming the Remuneration of Non-independent Directors of the Company in 2021; 13. Proposal on Confirming the Remuneration of Senior Managers of the Company in 2021; 14. Proposal on the Renewal of Huaxing Certified Public Accounts LLP (Special General Partnership) as the Company's Audit Institution in 2022; 15. Social Responsibility Report 2021; 16. Proposal on Convening the Annual General Meeting of Shareholders of the Company in 2021. |
| The 22nd meeting of the third board of directors | April 28, 2022 | The Proposal on the First Quarter Report of the Company in 2022 was deliberated and approved |
| The 23rd meeting of the third board of directors | June 23, 2022 | The Proposal on Granting Reserved Stock Options for the 2021 Stock Option Incentive Plan to Incentive Targets was deliberated and approved |
| The 24th meeting of the third board of directors | July 13, 2022 | The following proposals were deliberated and approved: 1. Proposal on Amending the 2021 Stock Option Incentive Plan of Oppein Home Group Inc. and Some Provisions of Its Summary; 2. Proposal on Adjusting the Exercise Price of the Company's Stock Option Incentive Plan in 2021; 3. Proposal on the Achievement of Exercise Conditions in the First Exercise Period of the First Grant of Stock Options under the Company's Stock Option Incentive Plan in 2021; 4. Proposal on Cancellation of Some Stock Options First Granted by the Company's Stock Option Incentive Plan in 2021; 5. Proposal on Reformulating the Investor Relations Management System of Oppein Home Group Inc. |
| The 25th meeting of the third board of directors | August 2, 2022 | The following proposals were deliberated and approved: 1. Proposal on Further Clarifying the Plan for the Public Issuance of Convertible Corporation Bonds by the Company; 2. Proposal on the Public Issuance and Listing of Convertible Corporation Bonds by the Company; 3. Proposal on Opening A Special Account for Raising Funds by Publicly Issuing Convertible Corporation Bonds and Signing A Regulatory Agreement. |
| The 26th meeting of the third board of directors | August 19, 2022 | Proposal on the Use of Idle Raised Funds for Cash Management was deliberated and approved |
| The 27th meeting of the third board of directors | August 29, 2022 | Proposal on the Company's Semi Annual Report for 2022 And Its Summary was deliberated and approved |
| The 28th meeting of the third board of directors | September 13, 2022 | The following proposals were deliberated and approved: 1. Proposal on the General Election of the Board of Directors; 2. Proposal on Allowance for Independent Directors of the Fourth Board of Directors; 3. Proposal on reformulating the fund raising management system of Europa home furnishing Group Co., Ltd; 4. Proposal on Amending Some Provisions of the Guidelines for the Management of Shareholdings and Changes of Directors, Supervisors and Senior Managers of Oppein Home Group Inc.; 5. Proposal on Providing Performance Guarantee for Wholly-owned Subsidiaries; 6. Proposal on Amending Some Provisions of the Articles of Association; 7. Proposal on Amending Some Provisions of the Rules of Procedure of the Board of Directors of Oppein Home Group Inc.; 8. Proposal on Convening the Second Provisional General Meetings of |
| Shareholders the Company in 2022. | ||
| The 1st meeting of the fourth board of directors | September 29, 2022 | The following proposals were deliberated and approved: 1. Proposal on Electing Yao Liangsong as Chairman of the Fourth Board of Directors of the Company; 2. Proposal on Electing Tan Qinxing as Vice Chairman of the Fourth Board of Directors of the Company; 3. Proposal on Electing Yao Liangbai as Vice Chairman of the Fourth Board of Directors of the Company; 4. Proposal on Renewing Yao Liangsong as General Manager (President) of the Company; 5. Proposal on Renewing Tan Qinxing as Deputy General Manager (Vice President) of the Company; 6. Proposal on the Appointment of Yao Liangbai as Deputy General Manager (Vice President) of the Company; 7. Proposal on Renewing Wang Huan as the Financial Administrator of the Company; 8. Proposal on the Appointment of Ou Yingying as Secretary of the Board of Directors of the Company; 9. Proposal on the Election of Members of Special Committees under the Fourth Board of Directors. |
| The 2nd meeting of the fourth board of directors | October 27, 2022 | The following proposals were deliberated and approved: 1. Report of the Third Quarter of 2022 of Oppein Home Group Inc.; 2. Proposal on the Use of Raised Funds to Replace Self-raised Funds Invested in Advance; 3. Proposal on the Scheme of Repurchasing Shares by Means of Centralized Bidding Transactions. |
| The 3rd meeting of the fourth board of directors | November 10, 2022 | Proposal on Not Downward Amending the Conversion Price of "Oppein 22 Convertible Bonds" was deliberated and adopted |
VI. Performance of directors' duties(I) Directors' attendance in board meetings and general meetings of shareholders
| Name of director | Independent director or not | Attendance in the board of directors | Attendance in the general meetings of shareholders | |||||
| Number of board of directors meetings due this year | Number of attendance in person | Number of attendance by means of communication | Number of attendance by proxy | Number of absences | Whether to fail to attend meetings in person twice in a row | Number of attendance in general meetings of shareholders | ||
| Yao Liangsong | No | 12 | 12 | 7 | 0 | 0 | No | 2 |
| Tan Qinxing | No | 12 | 12 | 7 | 0 | 0 | No | 2 |
| Yao Liangbai | No | 12 | 12 | 7 | 0 | 0 | No | 3 |
| Liu Shunping | No | 3 | 3 | 2 | 0 | 0 | No | 1 |
| Qin Shuo | Yes | 12 | 12 | 12 | 0 | 0 | No | 2 |
| Jiang Qi | Yes | 12 | 12 | 11 | 0 | 0 | No | 2 |
| Li Xinquan | Yes | 3 | 3 | 2 | 0 | 0 | No | 1 |
| Chu Xiaoping | Yes | 9 | 9 | 9 | 0 | 0 | No | 0 |
Instructions for failing to attend the meeting of the board of directors in person for two consecutive times
□ Applicable √ Not applicable
| Number of meeting of the board of directors held during the year | 12 |
| Including: number of on-site meetings | 0 |
| Number of meetings held by means of communication | 7 |
| Number of meetings held on site in combination with communication | 5 |
(II) Objections raised by directors to relevant matters of the Company
□ Applicable √ Not applicable
(III) Other
□ Applicable √ Not applicable
VII. Special committees under the board of directors
√ Applicable □ Not applicable
(1) Members of special committees under the board of directors
| Category of special committee | Name of member |
| Audit Committee | Jiang Qi, Yao Liangbai, Li Xinquan |
| Nomination Committee | Qin Shuo, Tan Qinxing, Li Xinquan |
| Remuneration and Assessment Committee | Li Xinquan, Jiang Qi, Liu Shunping |
| Strategy Committee | Yao Liangsong, Yao Liangbai, Qin Shuo |
(2) During the reporting period, the Audit Committee held 4 meetings
| Date | Meeting content | Important comments and suggestions | Other performance of duties |
| April 21, 2022 | Proposal on the Annual Report of the Company for 2021 and Its Summary, Internal Control Evaluation Report of the Company in 2021 and Proposal on the Renewal of Huaxing Certified Public Accounts LLP (Special General Partnership) as the Company's Audit Institution in 2022 were deliberated and approved | Expressed explicit agreement with each proposal | / |
| April 28, 2022 | The Proposal on the First Quarter Report of the Company in 2022 was deliberated and approved | Expressed explicit agreement | / |
| August 29, 2022 | Proposal on the Company's Semi Annual Report for 2022 And Its Summary was deliberated and approved | Expressed explicit agreement | / |
| October 27, 2022 | Report of the Third Quarter of 2022 of Oppein Home Group Inc. was deliberated and approved | Expressed explicit agreement | / |
(3) During the reporting period, the Remuneration and Assessment Committee held 5 meetings
| Date | Meeting content | Important comments and suggestions | Other performance of duties |
| January 24, 2022 | Proposal on the First Phase of Excellent Employee Stock Ownership Plan (Draft) of Oppein Home Group Inc. and Its Summary and Proposal on the Measures for the Administration of the First Phase of Excellent Employee Stock Ownership Plan (Draft) of Oppein Home Group Inc. of Oppein Home Group Inc. were deliberated and approved | Expressed explicit agreement with each proposal | Related directors recuse from voting |
| April 21, 2022 | Proposal on Confirming the Remuneration of Non-independent Directors of the Company in 2021 and Proposal on Confirming the Remuneration of Senior Managers of the Company in 2021 were | Expressed explicit agreement | Related directors recuse from |
| deliberated and approved | with each proposal | voting | |
| June 23, 2022 | Proposal on the List of Incentive Targets Reserved for Grant under the Company's Stock Option Incentive Plan in 2021 was deliberated and approved | Expressed explicit agreement | / |
| July 13, 2022 | Proposal on the Achievement of Exercise Conditions in the First Exercise Period of the First Grant of Stock Options under the Company's Stock Option Incentive Plan in 2021 was deliberated and approved | Expressed explicit agreement | Related directors recuse from voting |
| September 13, 2022 | Proposal on Allowance for Independent Directors of the Fourth Board of Directors was deliberated and approved | Expressed explicit agreement | / |
(4) During the reporting period, the Nomination Committee held 1 meeting
| Date | Meeting content | Important comments and suggestions | Other performance of duties |
| September 13, 2022 | Proposal on the General Election of the Board of Directors was deliberated and approved | Expressed explicit agreement | / |
(5) Details of objections
□ Applicable √ Not applicable
VIII. Description of risks found by the board of supervisors
□ Applicable √ Not applicable
The board of supervisors has no objection to the supervision matters during the reporting period.IX. Employees of the parent company and major subsidiaries at the end of the reporting period(I) Employees
| Number of active employees of the parent company | 3,836 |
| Number of active employees in major subsidiaries | 20,691 |
| Total number of active employees | 24,527 |
| Number of retired employees to be borne by the parent company and major subsidiaries | 63 |
| Specialty composition | |
| Specialty composition category | Number of people of specialty composition |
| Production personnel | 15,525 |
| Sales personnel | 3,231 |
| Technical personnel | 3,024 |
| Financial personnel | 174 |
| Administrative personnel | 2,573 |
| Total | 24,527 |
| Education background | |
| Education background category | Quantity (person) |
| Master's degree and above | 147 |
| Bachelor's degree | 4,343 |
| Junior college | 3,970 |
| High school and technical secondary school | 1,434 |
| Junior school or below | 14,633 |
| Total | 24,527 |
(II) Remuneration policy
√ Applicable □ Not applicable
The Company's overall remuneration policy is closely related to the achievement of the Company's strategicobjectives. In order to give full play to the incentive of Remuneration, the Company implements different incentive
policies for employees of different categories and positions. The remuneration of employees not only reflects the valueof the post, but also is closely related to the achievement of personal performance and the performance objectives of theirbusiness scope. By establishing a remuneration management and performance appraisal system, the Company fullymobilizes the enthusiasm of employees, so that the actual income of employees is highly related to the Company'sperformance, personal performance and incentive objectives. The higher the target achievement rate, the higher theincome of employees, and vice versa. The income level of the Company's employees is highly competitive in the market,and the remuneration payment meets the requirements of relevant national laws and regulations.(III) Training plan
√ Applicable □ Not applicable
In 2022, according to the overall deployment of Human Resources Center and related key work requirements, theGroup's training work continued to rely on the "6+1" model, made every effort to create a "double engine" for trainingand development, refined talent training, and further promoted the construction of talent echelon; through innovativeempowerment, it focused on the pain points of marketing and manufacturing business, quickly builded a business talenttraining system close to business and efficient empowerment, and helped business units improve their ability to undertakebusiness plans to better support the realization of performance objectives; it continuously improved the "whole process,targeted and three-dimensional" talent learning and development ecosystem with perfect system and remarkable results,and by taking talents as the cornerstone, business as the driving force and value as the orientation, it supported therealization and transcendence of organizational objectives and personal achievements.In 2023, the training work took "talent delivery, organizational management upgrading and comprehensive market-oriented operation" as its new orientation, focused on the three key words of "talent empowerment, skill empowermentand business empowerment", comprehensively cultivated the internal training system, and constantly explored externalservices, so as to build a more systematic, scientific, precise and market-oriented training and development work.Internally, it strengthened the basic training management by means of "rammed earth wall", realized the upgrading ofinternal management system in line with the times, and gradually covered the dealer system and enabled terminals; itcarried out the business of "entering Oppein" and "grading and certification of skilled talents" to achieve thecomprehensive output of curriculum system, evaluation system and examination system, flexibly carried out variouspractical training projects, improved the quality of internal talent supply for key positions, efficiently enabled businessdevelopment, and enhanced the internal "hematopoietic" ability of enterprises.(IV) Labor outsourcing
□ Applicable √ Not applicable
X. Profit distribution or capital reserve conversion plan(I) Formulation, implementation or adjustment of cash dividend policy
√ Applicable □ Not applicable
1. Formulation of profit distribution policy
In order to improve the Company's scientific, sustained, stable and transparent dividend policy and supervisionmechanism, and actively and effectively return investors, according to relevant laws and regulations, the Company hasformulated relevant provisions on profit distribution in the Articles of Association, clarified the specific conditions,proportion, distribution form and stock dividend distribution conditions of the Company's profit distribution, especiallycash dividend, and clarified the decision-making procedures and mechanisms of the Company's profit distribution, andthe adjustment principle of profit distribution policy, which strengthens the protection mechanism of the rights andinterests of small and medium-sized investors.
2. Profit distribution decisions for the year
The Company intends to distribute a total cash dividend of CNY 1.075 billion (tax inclusive) to all shareholdersbased on the total share capital on the registration date of equity distribution less the number of shares in the Company'sshare repurchase account, accounting for 40% of the net profit attributable to shareholders of the parent company in 2022.If the total share capital of the Company changes before the equity registration date for the implementation of equitydistribution, the Company intends to maintain the total profit distribution unchanged and adjust the profit distributionratio per share accordingly.(II) Special instructions on cash dividend policy
√ Applicable □ Not applicable
| Whether it conforms to the provisions of the Articles of Association or the requirements of the resolution of the general meetings of shareholders | √ Yes □ No |
| Are the dividend standard and proportion clear | √ Yes □ No |
| Are the relevant decision-making procedures and mechanisms complete | √ Yes □ No |
| Whether independent directors perform their duties and play their due role | √ Yes □ No |
| Whether minority shareholders have the opportunity to fully express their opinions and demands, and whether their legitimate rights and interests have been fully protected | √ Yes □ No |
(III) If it makes profits during the reporting period and the profits available to shareholders of the parent companyare positive, but no cash profit distribution plan is put forward, the Company shall disclose in detail thereasons and the purpose and use plan of the undistributed profits
□ Applicable √ Not applicable
(IV) Profit distribution and conversion of capital reserve into equity during the reporting period
√ Applicable □ Not applicable
Unit: CNY
| Number of bonus shares per 10 shares (share) | 0 |
| Dividend per 10 shares (CNY) (tax inclusive) | 17.68 |
| Increase per 10 shares (share) | 0 |
| Cash dividend amount (tax inclusive) | 1,075,370,193.40 |
| Net profit attributable to ordinary shareholders of listed companies in the consolidated statement of dividend year | 2,688,425,483.50 |
| Ratio to net profit attributable to ordinary shareholders of listed companies in the consolidated statements (%) | 40 |
| Amount of shares repurchased in cash to be included in the cash dividend | 0 |
| Total dividend amount (tax inclusive) | 1,075,370,193.40 |
Ratio of the total dividend amount to net profitattributable to ordinary shareholders of listed companiesin the consolidated statements (%)
Notes: 1. Parameter basis for calculation of relevant data in the above Table: (1) On March 31, 2023, the total sharecapital of the Company was 609,152,327 shares; (2) On March 31, 2023, the Company repurchased 837,180 shares in thespecial account for shares;
2. If the total share capital of the Company changes before the equity registration date for the implementation ofequity distribution, the Company intends to maintain the total profit distribution unchanged and adjust the profitdistribution ratio per share accordingly.XI. The situation and impact of the Company's equity incentive plan, employee stock ownership plan or otheremployee incentive measures(I) Relevant incentives have been disclosed in the interim announcement and there is no progress or change in thefollow-up implementation
√ Applicable □ Not applicable
| Overview | Query index |
| On June 23, 2022, the reserved stock options of the 2021 stock option incentive plan were granted to the incentive targets, with a number of 1,232,055 granted, a grant price of CNY 146.97 yuan per share and 174 people granted. | The Announcement of Oppein Home on Granting Reserved Stock Options for the 2021 Stock Option Incentive Plan to Incentive Targets (2022-039) and the Announcement of the Resolution of the 15th Meeting of the Third Board of Supervisors of Oppein Home (2022-040) disclosed on the website of Shanghai Stock Exchange. |
| The 24th meeting of the third board of directors was held on July 13, 2022. The following proposals were deliberated and approved: (1) Proposal on Amending the 2021 Stock Option Incentive Plan of Oppein Home Group Inc. and Some Provisions of Its Summary; (2) Proposal on Adjusting the Exercise Price of the Company's Stock Option Incentive Plan in 2021, agreeing that the exercise price of the incentive plan will be adjusted from CNY 146.97 per share to CNY 145.22 per share; (3) Proposal on the Achievement of Exercise | Announcement on the Resolution of the 24th Meeting of the Third Board of Directors of Oppein Home (2022-045), Announcement on the Summary of Oppein Home's 2021 Stock Option Incentive Plan (Revised Draft) (2022-046), Announcement on the Adjustment of the Exercise Price of Oppein Home's 2021 Stock Option Incentive Plan (2022-047), |
| Conditions in the First Exercise Period of the First Grant of Stock Options under the Company's Stock Option Incentive Plan in 2021, agreeing that 439 incentive targets meet the exercise conditions in the first exercise period and 1,042,576 stock options are exercisable. This stock option adopts the independent exercise model, and the exercisable date is from the date of completion of relevant procedures; (4) Proposal on Cancellation of Some Stock Options First Granted by the Company's Stock Option Incentive Plan in 2021, agreeing to cancel a total of 1,841,982 stock options. After the completion of the cancellation, the incentive targets first granted by the Company's stock option incentive plan in 2021 will be changed from 500 to 452; the number of initial stock options granted will be changed from 5,290,951 to 3,448,969. | Announcement of Oppein Home on the First Exercise Period of the First Grant of Stock Options under the Company's Stock Option Incentive Plan in 2021 Meeting the Exercise Conditions (2022-048), Announcement of Oppein Home on the Cancellation of Some Stock Options First Granted under the Company's Stock Option Incentive Plan in 2021 (2022-049), Announcement of Resolutions of the 16th Meeting of the Third Board of Supervisors of Oppein Home (2022-050) |
| The Company completed the cancellation of 1,841,982 first granted stock options. | Announcement of Oppein Home on the Completion of the Cancellation of Some Stock Options First Granted by the Company's Stock Option Incentive Plan in 2021 (2022-051) disclosed on the website of Shanghai Stock Exchange |
| On July 27, 2022, the registration of reserved grant was completed. During the period from the date of this reserved grant to the completion of the registration of stock option grant, three incentive targets lost their qualifications to participate in the incentive plan due to resignation and other reasons, involving a total of 21,358 stock options. The actual number of grants was 171, and the actual number of shares granted was 1,210,697. | Announcement of Oppein Home on the Completion of Registration of Reserved Grant Stock Options for 2021 Stock Option Incentive Plan (2022-053) disclosed on the website of Shanghai Stock Exchange |
| On September 21, 2022, 439 incentive targets who met the exercise conditions in the first exercise period of the first grant of options under the Company's stock option incentive plan in 2021 were eligible for exercise. The exercise method was independent exercise, the exercise price was CNY 145.22 per share, and the number of exercises was 1,042,576. | Announcement on the Implementation of the First Exercise Period of the First Grant of Stock Options under the Company's Stock Option Incentive Plan in 2021 (2022-077) disclosed on the website of Shanghai Stock Exchange |
| During the period from September 21, 2022 to September 30, 2022, the number of exercise and completion of share transfer registration of stock option incentive targets was 6 shares, accounting for 0.0006% of the total number of exercisable stock options in that period. |
Announcement on Quarterly IndependentExercise Results and Share Changes of theCompany's Stock Option Incentive Plan in2021 (2022-084)
Combined with the disclosure plan of the Company's third quarterreport in 2022, the Company's restricted exercise period is fromOctober 18, 2022 to October 27, 2022, during which all incentivetargets will be restricted.Indicative Announcement of Oppein Homeon the Restricted Exercise Period of theCompany's Stock Option Incentive Plan in2021 (2022-085)
Combined with the disclosure plan of the Company's annualperformance forecast for 2022, the restricted exercise period is fromJanuary 7, 2023 to January 16, 2023, during which all incentivetargets will be restricted.Indicative Announcement of Oppein Homeon the Restricted Exercise Period of theCompany's Stock Option Incentive Plan in2021 (2022-105)
(II) Incentives not disclosed in the provisional announcement or with follow-up progressEquity incentives
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
Employee stock ownership plans
□ Applicable √ Not applicable
Other incentives
□ Applicable √ Not applicable
(III) Equity incentives granted to directors and senior managers during the reporting period
√ Applicable □ Not applicable
Unit: share
| Name | Post | Number of stock options held at the beginning of the year | Number of new stock options granted during the reporting period | Exercisable shares during the reporting period | Stock option exercise shares during the reporting period | Exercise price of stock options (CNY) | Number of stock options held at the end of the period | Market price at the end of the reporting period (CNY) |
| Tan Qinxing | Vice chairman and vice president | 94,923 | 0 | 23,023 | 0 | 145.22 | 70,484 | 121.53 |
| Liu Shunping | Director | 47,462 | 0 | 14,160 | 0 | 145.22 | 37,891 | 121.53 |
| Yang Yaoxing | Deputy general manager of administration and secretary of the board of directors | 25,629 | 0 | 3,520 | 0 | 145.22 | 16,334 | 121.53 |
| Ou Yingying | Secretary of the board | 9,018 | 0 | 2,273 | 0 | 145.22 | 6,782 | 121.53 |
| Total | / | 177,032 | 0 | 42,976 | 0 | / | 131,491 | / |
(IV) Evaluation mechanism for senior managers during the reporting period, as well as the establishment andimplementation of incentive mechanism
√ Applicable □ Not applicable
Combined with the Company's business philosophy and management model, the Company has established a set offair, transparent and effective performance evaluation standards and incentive and restraint mechanisms. During thereporting period, the Company conducted a comprehensive evaluation of senior managers in accordance with the relevantsystems and regulations such as the Remuneration Management System of Oppein Home Group, the PerformanceManagement Regulations of Oppein Home Group, the Measures for the Administration of Remuneration andPerformance Appraisal of Directors (Non-independent directors) and Senior Managers of the Company. The HumanResources Center of the Group will comprehensively formulate its remuneration plan for this year in combination withthe Company's performance, the completion of senior managers' personal performance work and their contribution, whichwill be reviewed and approved by the Company's Remuneration and Assessment Committee and then submitted to theboard of directors and general meeting of shareholders the Company for deliberation and determination.XII. Construction and implementation of internal control system during the reporting period
√ Applicable □ Not applicable
In order to continuously promote the implementation of the internal control system and the improvement of theinternal control management level, the Company takes the management of the business approval process as the startingpoint, and realizes the integration of business, system, process and IT by implementing the information control processand implementation, so as to promote the effective integration of the Company's system and process. 2022 is the first yearfor the Company to start process construction. On the one hand, the Company pays attention to "management, approvaland governance" to improve "management efficiency" and on the other hand, it pays attention to "business processgovernance". On the basis of existing system construction, it breaks through from 0 to establish an internal controlmanagement model integrating system and process that suits the Company's actual situation.
In 2022, the Company innovated three staffing models in system design to help business departments improve systemquality: ① Establish the guidance model of "structured compilation of system content elements", ② Pilot the model of"cross departmental project system improvement team"; ③ Design "similar system compilation framework model" tofurther strengthen and enhance the institutionalization, normalization and standardization of business management, so asto continuously enhance the Company's overall business synergy and risk resistance. In terms of system implementationand control, the Company regularly carries out system review, and gradually carries out business structure development,system construction, formulation of establishment, reform and abolishment plan, and revision of management systemsbased on "company strategic planning/business control mode → following system construction model", so as to
effectively promote the scientific and effective implementation of various systems.Description of major defects in internal control during the reporting period
□ Applicable √ Not applicable
XIII. Management control of subsidiaries during the reporting period
√ Applicable □ Not applicable
The Company implements the important principle of "compliance with the system is also an importantcompetitiveness" from top to bottom, and has always attached importance to system construction and system governance.This year, the Company and its subsidiaries strictly followed the existing internal system of the Group and the newlyissued process management supporting mechanism, adhered to risk prevention as the orientation, process improvementand management efficiency as the goal, and grasped the three cores of "accountability, efficiency enhancement anddownstream" through decentralization and accountability, streamline administration and institute decentralization,ineffectiveness cleanup and consumption reduction and low value, so as to realize the internal control management modelof system and process integration, thus, the effective operation of the Company's internal management can be standardized,and the overall operation efficiency and anti-risk ability of the Company can be improved. During the reporting period,there was no loss of control of subsidiaries.XIV. Description of internal control audit report
□ Applicable √ Not applicable
Whether to disclose the internal control audit report: YesType of opinion on internal control audit report: standard unqualified opinionXV. Rectification of self-inspection problems in special actions for governance of listed companiesNoneXVI. Other
□ Applicable √ Not applicable
Section V Environmental and social responsibility
I. Environmental information
| Whether to establish environmental protection related mechanisms | Yes |
| Environmental protection funds invested during the reporting period (Unit: CNY '0,000) | 3,308 |
(I) Environmental protection information of the Company and its main subsidiaries belonging to the key pollutantdischarge units announced by the Environmental Protection Department
√ Applicable □ Not applicable
During the reporting period, among the Company and its holding subsidiaries, Qingyuan Oppein, Tianjin Oppeinand Wuxi Oppein were among the key pollutant discharge units announced by the Environmental Protection Department.
1. Pollutant discharge information
√ Applicable □ Not applicable
1. Wastewater treatment: The Company has formulated a sewage discharge management system to strictly controldomestic sewage and production wastewater, regularly monitor the operation and maintenance of sewage treatmentfacilities, and actively apply new sewage treatment equipment and online water quality monitoring technology to ensurethat the concentration and total amount of pollutants discharged meet national and local standards.
A. Domestic sewage: The domestic sewage in the living area is discharged into the municipal sewage pipe networkafter being pretreated by the septic tank in the living area (The oily sewage in the canteen is first separated by the oilseparation tank) and the domestic sewage in the production area is discharged into the municipal sewage pipe networkafter being pretreated by the septic tank in the production area, and then discharged after centralized treatment by thesewage treatment plant in the industrial park.
B. Production wastewater: The painting wastewater of the painting line is recycled in the water curtain paint misttreatment system and replaced regularly. The replacement wastewater is treated by the self-built painting sewagetreatment station (adopting the treatment process of "pre-treatment system (coagulation reaction + air flotation) - pre-
physical and chemical treatment system (Fenton oxidation + coagulation reaction precipitation) - biochemical treatmentsystem (hydrolytic acidification + contact oxidation) - post physical and chemical coagulation and precipitation"). Afterbeing treated by the self-built stone wastewater precipitation treatment system, the wastewater generated in the productionprocess of the table is reused in other links except water knife cutting, and is discharged regularly. The productionwastewater of quartz blank plate workshop is discharged into the precipitation treatment system set outside the plant forflocculent precipitation treatment, and then recycled without being discharged.
2. Waste gas treatment: The main air pollutants discharged by the Company in production and operation includedust, organic waste gas (VOCs, toluene and xylene, styrene, etc.) and kitchen fumes. Wood processing dust generated inthe production process is collected by the central dust collection system after being collected by the gas collecting hood,and the central dust collection device uses the bag dust removal process to control the dust and then passes through theexhaust funnel to meet the standard; spray paint waste gas is treated by automatic water curtain cabinet and paint mixingwaste gas. After drying, the waste gas is collected and treated by "multistage filtration + runner adsorption concentration+ RTO treatment system" before being discharged at high altitude. The kitchen fumes in the living area is planned to betreated by the electrostatic oil smoke removal process, which will be led to the roof of the building by a special smokeexhaust pipe after reaching the standard of the Emission Standard of Cooking Fume (GB18483-2001).
3. Noise treatment: The Company's noise pollution sources mainly come from the cutting, polishing, air compressoroperation and motor vehicle operation in the production process, and the operation of fans and water pumps in sewagetreatment stations. In view of the noise from different sources, the Company and its subsidiaries take different controlmeasures to control the noise, including selecting low-noise production equipment and taking silencing and soundinsulation measures for individual high-noise equipment; high noise equipment shall be kept away from the plantboundary as far as possible; greening and isolation shall be implemented around the plant boundary.
4. Solid waste treatment: The harmless solid waste generated by the Company includes domestic waste and generalindustrial solid waste. Household waste is collected in garbage cans and handed over to the Environmental SanitationDepartment for transportation, treatment and disposal. General industrial solid wastes such as wood scraps, dust, glass,table scraps and aluminum scraps are classified and temporarily stored in the general industrial solid waste temporarystorage warehouse, and regularly handed over to qualified solid waste treatment units for treatment. At the same time, thestorage site is standardized for construction, maintenance and use in accordance with the requirements of the Standardsfor Pollution Control on the Storage and Disposal Site for General Industrial Solid Wastes (GB18599-2001).
The hazardous wastes generated by the Company include hazardous wastes in the National List of Hazardous Wastes,such as waste paint slag, waste activated carbon, grinding dust and sludge from sewage treatment stations, which areclassified and temporarily stored in the temporary storage of hazardous wastes in the plant area, and are transported anddisposed of by units with hazardous waste treatment qualifications every month. The temporary storage of hazardouswaste is designed in strict accordance with the requirements of the Standard for Pollution Control of Hazardous WasteStorage (GB 18597-2001), all of which are subject to anti-seepage and anti-corrosion treatment, and are equipped withtrenches or cofferdams after anti-seepage and anti-corrosion treatment.
2. Construction and operation of pollution prevention and control facilities
√ Applicable □ Not applicable
Key pollutant discharge units affiliated to the Company shall carry out feasibility study approval, project approvaland construction in accordance with national laws and regulations; all of them apply for pollutant discharge licenses inaccordance with the regulations, and discharge pollutants in accordance with the types of pollutants, control indicatorsand prescribed methods approved by the licenses. As of the disclosure date of this report, the environmental protectionfacilities of the Company and its subsidiaries are operating normally.
3. Environmental impact assessment of construction projects and other administrative permits forenvironmental protection
√ Applicable □ Not applicable
Key pollutant discharge units affiliated to the Company have obtained environmental impact assessment reports andobtained the approval of local environmental protection departments.
4. Emergency plan for environmental emergencies
√ Applicable □ Not applicable
All units affiliated to the Company have formulated corresponding emergency plans for environmental emergenciesand submitted them to the local competent authorities for filing.
5. Environmental self-monitoring program
√ Applicable □ Not applicable
According to the requirements of the environmental self-monitoring guidelines, the Company formulated a self-monitoring plan to clarify the testing points and monitoring frequency. Units lacking self-monitoring conditions shalladopt the method of entrusted monitoring, and carry out self-monitoring in strict accordance with the requirements of thenational environmental monitoring technical specifications and environmental monitoring management regulations. Theautomatic monitoring equipment adopted has passed the acceptance of the Environmental Protection Department, andregularly upload the environmental monitoring results to the pollution source monitoring data release platform forenvironmental information disclosure.
6. Administrative penalties for environmental problems during the reporting period
√ Applicable □ Not applicable
During the reporting period, the Company and its subsidiaries were not subject to administrative penalties forenvironmental problems.
7. Other environmental information that should be made public
□ Applicable √ Not applicable
(II) Statement on environmental protection of companies other than key pollutant discharge units
√ Applicable □ Not applicable
1. Administrative penalties for environmental problems
□ Applicable √ Not applicable
2. Disclosure of other environmental information with reference to key pollutant discharge units
√ Applicable □ Not applicable
Other subsidiaries of the Company conscientiously implement laws and regulations related to environmentalprotection in their daily production and operation, effectively implement environmental protection measures and fulfillenvironmental protection responsibilities.
3. Reasons for not disclosing other environmental information
□ Applicable √ Not applicable
(III) Relevant information conducive to protecting ecology, preventing and controlling pollution and fulfillingenvironmental responsibilities
√ Applicable □ Not applicable
This year, the Company began to introduce the environmental assessment dimension to screen new suppliers, witha screening ratio of 14.84% (142/957). In the introduction stage, the Company requires suppliers to provide environmentalmanagement system and environmental assessment documents during plant audit, conducts a secondary plant audit forsuppliers who change their plant sites to investigate the environmental protection data certification and environment oftheir new sites. For suppliers with poor environment and no strict environmental protection control system, measures shallbe taken to rectify, re-evaluate or not adopt.(IV) Measures taken to reduce its carbon emissions during the reporting period and their effects
| Whether to take carbon reduction measures | Yes |
| Reduce carbon dioxide emission equivalent (unit: ton) | 21,460 |
| Types of carbon reduction measures (such as using clean energy to generate electricity, using carbon reduction technologies in the production process, R&D and production of new products to help reduce carbon, etc.) | After the Company put into use the roof photovoltaic power station of Wuxi Base Plant in 2018, Qingyuan base plant roof photovoltaic power station and Tianjin base plant roof photovoltaic power station were also officially put into operation in 2022. |
Specific statement
√ Applicable □ Not applicable
In 2021, Oppein cooperated with CEEC Guangdong Institute to pilot the construction of roof photovoltaic powergeneration project in Qingyuan base, with a total investment of about CNY 76.5388 million and an area of 180,000m
,which is the largest roof photovoltaic project ever completed in Guangdong Province. The installed capacity of the projectis about 4,266.1kWp, and the generated electricity is preferentially supplied to Oppein for use, adopting the model of
"self-use and surplus electricity on the grid". The project is expected to be connected to the grid at full capacity by May1, 2023. In 2022, the total power generation of roof photovoltaic equipment in Qingyuan, Wuxi and Tianjin bases of theCompany was about 37,632,880 kWh, which was equivalent to reducing carbon dioxide emissions by about 21,460 tons.II. Social responsibility work(I) Are social responsibility reports, sustainability reports or ESG reports disclosed separately
√ Applicable □ Not applicable
For details, please refer to the ESG Report for 2022 disclosed by the Company on the website of Shanghai StockExchange on the same day.(II) Details of social responsibility work
√ Applicable □ Not applicable
| External donations and public welfare projects | Quantity/content | Information note |
| Total investment (CNY '0,000) | 140.00 | - |
| Including: capital (CNY '0,000) | 140.00 | - |
| Material discount (CNY '0,000) | - | - |
| Number of beneficiaries (person) | - | - |
Specific statement
√ Applicable □ Not applicable
In 2022, the Company helped Liujia Village, Huaqi Town, Zhijin County, Bijie City, Guizhou Province, to promoterural revitalization through Guangzhou Oppein Public Welfare Foundation, directionally helped Xiaosheng Town,Fengshun County, Meizhou City, to repair rural internal roads, and donated to Guyuan No. 1 Middle School.III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
□ Applicable √ Not applicable
Specific statement
□ Applicable √ Not applicable
Section VI Important matters
I. Performance of commitments(I) Commitments made by the actual controllers, shareholders, related parties, acquirers and the Company during the reporting period or continuing into the reportingperiod
√ Applicable □ Not applicable
| Commitment context | Commitment type | Commitment party | Commitment content | Commitment time and period | Is there a time limit for performance | Whether it is carried out in a timely and strict manner | If it fails to perform in time, the specific reasons for the failure to perform shall be explained | If it fails to perform in time, the next step plan shall be explained |
| Commitments related to initial public offerings | Share restrictions | Yao Liangsong, controlling shareholder of the Company | During my tenure as director and supervisor of the Company, the number of shares of the Company held by me shall not exceed 25% of the total shares of the Company held by me every year, and I will not transfer the shares of the Company held by me within six months of my resignation. | During the period of serving as director, supervisor and senior manager of the Company and within six months after resignation, | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Other | Yao Liangsong, controlling shareholder of the Company | if the Company's shares are reduced within two years after the expiration of the lockup period, the reduction price shall not be lower than the issue price. The commitment shall not be terminated due to job change or resignation. | Within two years after the lockup period expires | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Share restrictions | Yao Liangbai, shareholder of the Company | During my tenure as director, supervisor and senior manager of the Company, the number of shares of the Company held by me shall not exceed 25% of the total shares of the Company held by me every year, and I will not transfer the shares of the Company held by me within six months of my resignation. | During the period of serving as director, supervisor and senior manager of the Company and within six months after resignation, | Yes | Yes | N/A | N/A |
| Commitments related to initial public | Other | Yao Liangbai, shareholder | if the Company's shares are reduced within two years after the expiration of the lockup period, the reduction price shall not be lower | Within two years after the lockup period expires | Yes | Yes | N/A | N/A |
| offerings | of the Company | than the issue price. The commitment shall not be terminated due to job change or resignation. | ||||||
| Commitments related to initial public offerings | Share restrictions | Wang Huan, a shareholder who is a senior manager of the Company | During my tenure as director, supervisor and senior manager of the Company, the number of shares of the Company held by me shall not exceed 25% of the total shares of the Company held by me every year, and I will not transfer the shares of the Company held by me within six months of my resignation. | During the period of serving as director, supervisor and senior manager of the Company and within half a year of resignation | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Share restrictions | Tan Qinxing, a shareholder who is a director of the Company | During my tenure as director, supervisor and senior manager of the Company, the number of shares of the Company held by me shall not exceed 25% of the total shares of the Company held by me every year, and I will not transfer the shares of the Company held by me within six months of my resignation. | During the period of serving as director, supervisor and senior manager of the Company and within half a year of resignation | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Share restrictions | Yang Yaoxing, a shareholder who is a senior manager of the Company | During my tenure as director, supervisor and senior manager of the Company, the number of shares of the Company held by me shall not exceed 25% of the total shares of the Company held by me every year, and I will not transfer the shares of the Company held by me within six months of my resignation. | During the period of serving as director, supervisor and senior manager of the Company and within half a year of resignation | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Share restrictions | Zhong Huawen, a shareholder who is a supervisor of the Company | During my tenure as director, supervisor and senior manager of the Company, the number of shares of the Company held by me shall not exceed 25% of the total shares of the Company held by me every year, and I will not transfer the shares of the Company held by me within six months of my resignation. | During the period of serving as director, supervisor and senior manager of the Company and within half a year of resignation | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Other | The issuer and all its directors, supervisors and senior managers | The prospectus and its abstract do not contain false records, misleading statements or major omissions, and bear individual and joint legal liabilities for its authenticity, accuracy and completeness. | Long term | Yes | Yes | N/A | N/A |
| Commitment related to the initial public offering | Other | Issuer | If the prospectus of the Company is determined by the relevant regulatory authorities to have false records, misleading statements or major omissions, which has a significant and substantial impact on judging whether the Company meets the issuance conditions stipulated by law, the Company will repurchase all the new shares of the initial public offering according to law at the issuance price. The specific procedures shall be handled in accordance with the provisions of the CSRC and the Shanghai Stock Exchange. If the Company's prospectus contains false records, misleading statements or major omissions, resulting in losses to investors in securities trading, it will compensate investors for losses according to law. The qualification of investors entitled to compensation, the identification of the scope of investor losses, the division of liability among the subjects of compensation and the reasons for exemption shall be implemented in accordance with the Securities Law of the People's Republic of China, the Provisions of the Supreme People's Court on Hearing Civil Compensation Cases Arising from False Statements in the Securities Market (FS [2003] No. 2) and other relevant laws and regulations. | Long term | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Other | Yao Liangsong, controlling shareholder | If the prospectus of the Company is determined by the relevant regulatory authorities to have false records, misleading statements or major omissions, which has a significant and substantial impact on judging whether the Company meets the issuance conditions prescribed by law, I will repurchase the transferred original restricted shares according to law. The specific procedures shall be handled in accordance with the provisions of the CSRC and the Shanghai Stock Exchange. If the issuer's prospectus contains false records, misleading statements or major omissions, resulting in losses to investors in securities trading, I will compensate investors for losses in accordance with the law. The qualification of investors entitled to compensation, the identification of the scope of investor losses, the division of liability among the subjects of compensation and the reasons for exemption shall be implemented in accordance with the Securities Law of the People's Republic of China, the Provisions of the Supreme People's Court on Hearing Civil Compensation Cases Arising from False Statements in the Securities Market (FS [2003] No. 2) and other relevant laws and regulations. | Long term | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Other | The issuer directors, supervisors and senior managers | If the prospectus of the Company is determined by the relevant regulatory authorities to have false records, misleading statements or major omissions, resulting in losses to investors in securities trading, I will compensate investors for losses in accordance with the law. | Long term | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Other | Shareholders holding more than 5% of the shares | There are two shareholders holding more than 5% of the Company's shares, Yao Liangsong, the controlling shareholder, and Yao Liangbai, the shareholder. Yao | Long term or within two years after the lockup period expires | Yes | Yes | N/A | N/A |
| lockup period, the total number of shares of the Company held by me shall not exceed 9% of the total number of shares registered in my name on the last trading day of the previous year. If the Company's shares in the Company change due to equity distribution, capital reduction and stock reduction, the base of shares transferred in the corresponding year shall be changed accordingly; 6. If I fail to fulfill the above intention to reduce my holdings, I will publicly explain the specific reasons for my failure to fulfill my commitments at the general meetings of shareholders and the disclosure media designated by the CSRC, and apologize to the shareholders of the Company and public investors; 7. If I fail to fulfill the above reduction intention, my shares in the Company shall not be reduced within six months from the date of my failure to fulfill the above reduction intention. | ||||||||
| Commitments related to initial public offerings | Solve land and other property rights defects | Yao Liangsong, controlling shareholder and actual controller | Yao Liangsong, the controlling shareholder and actual controller of the Company, leased 5.12 mu (3,411m2) and 3.50 mu (2,333m2) of land next to the Company's plant area, and built employee No. 3 canteen and employee dormitory, covering a total area of about 1,902m2. The two buildings have not yet applied for the property ownership certificate. In view of the above situation, Yao Liangsong, the controlling shareholder and actual controller of the Company, promised: "if the issuer is punished by the relevant administrative departments for the employee canteen and employee dormitory, I will unconditionally bear the responsibility for paying the relevant fines or losses." | Long term | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Solve land and other property rights defects | Yao Liangsong, controlling shareholder and actual controller | Some houses leased by the issuer and its subsidiaries have not yet obtained the property ownership certificate, or have not yet gone through the filing and registration of house leasing. In view of this situation, Yao Liangsong, the controlling shareholder and actual controller of the Company, promised: "During the lease term, if the house leased by Oppein Group or its subsidiaries is subject to relevant ownership disputes, overall planning demolition, administrative penalties or other circumstances affecting the normal operation of the Company, resulting in the inability of Oppein Group or its subsidiaries to continue to use the house normally or suffer losses, I will bear the losses caused by Oppein Group or its subsidiaries, including but not limited to all direct and indirect losses caused by the litigation or arbitration, suspension of production or termination of business, finding alternative places, relocation or punishment. " | Long term | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Resolving horizontal competition | Yao Liangsong, the actual controller of the Company, and his brothers Yao Liangbai and Yao Liangsheng | 1. As at the date of this letter of commitment, neither I nor my immediate family/other economic entities controlled by me or my immediate family have produced or developed any products that compete or potentially compete with products produced by Oppein Group and its subsidiaries, or directly or indirectly operate any business that competes or potentially competes with the existing business of Oppein Group and its subsidiaries, or invested in any other enterprise that competes or potentially competes with the existing business and products of Oppein Group and its subsidiaries. 2. From the date of this letter of commitment, I and my immediate family/other economic entities controlled by | Long term | Yes | Yes | N/A | N/A |
| to the violation of the above commitments by me and my immediate family/other economic entities controlled by me and my immediate family, I agree to bear the corresponding liability for damages. | ||||||||
| Commitments related to initial public offerings | Resolve related party transactions | Yao Liangsong, actual controller of the Company | 1. I and my immediate family/other economic entities controlled by me and my immediate family will avoid and minimize related party transactions with Oppein Group; 2. For related party transactions that cannot be avoided or occur for reasonable reasons, I and my immediate family members/other economic entities controlled by me and my immediate family members will follow the commercial principles of equality, voluntariness, equivalence and compensation, and strictly follow the relevant provisions on related party transactions in laws, regulations and normative documents such as the Articles of Association (Draft) of Oppein Home Group Inc. and the Measures for the Administration of Related Party Transactions. By signing a formal related party transaction agreement with Oppein Group, the price of related party transactions is guaranteed to be fair and the transactions are carried out under fair, reasonable and normal commercial transaction conditions. I and my immediate family/other economic entities controlled by me and my immediate family will not require or accept more favorable transaction conditions from Oppein Group than independent third parties in the course of the transaction, so as to effectively safeguard the actual interests of Oppein Group and other shareholders. 3. I guarantee that I will not use my position in Oppein Group to damage the interests of Oppein Group and the legitimate rights and interests of other | Actual controller of Oppein Group/during his tenure in Oppein Group | Yes | Yes | N/A | N/A |
| shareholders through related party transactions. 4. If I and my immediate family/other economic entities controlled by me and my immediate family violate the above commitments, resulting in damage to the interests of Oppein Group or the legitimate rights and interests of other shareholders, I will bear the corresponding liability for compensation according to law. The above commitments shall remain in force while I am the actual controller of Oppein Group/in Oppein Group. | ||||||||
| Commitments related to initial public offerings | Other | Yao Liangsong, controlling shareholder and actual controller | As the actual controller of Oppein Group, Yao Liangsong makes the following commitments on avoiding the occupation of Oppein Group's funds: I will strictly abide by the requirements and provisions of relevant laws, regulations, normative documents and articles of association, and ensure that the assets and resources of Oppein Group will not be occupied or transferred in any way (including but not limited to loans, debt compensation and advances, etc.). I will cause other economic entities, if any, that I directly or indirectly control to comply with the above commitments. If I or other economic entities under my control violate the above commitments, resulting in damage to the rights and interests of Oppein Group or its shareholders, I will bear the corresponding liability for compensation according to law. During the period when I am the controlling shareholder and actual controller of Oppein Group, the above commitments shall remain valid. This letter of commitment shall be governed by the laws of the People's Republic of China, shall come into force as of the date of signing, and shall remain valid and irrevocable during my period as the actual controller of Oppein | As the actual controller of Oppein Group | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Other | Yao Liangsong, controlling shareholder and actual controller | Yao Liangsong, the controlling shareholder and actual controller, issued the Letter of Commitment on Employees of Oppein Group to Pay Social Security and Housing Provident Fund: "(1) I will urge Oppein Group and its subsidiaries to fully implement the relevant systems of housing provident fund, maternity, pension, unemployment, industrial injury and medical insurance (hereinafter referred to as "five social insurances and one housing fund") stipulated in laws, regulations and rules, establish accounts for all registered employees of Oppein Group and its subsidiaries and deposit "five social insurances and one housing fund"; (2) If Oppein Group and its subsidiaries are required to make up the unpaid or underpaid "five social insurances and one housing fund" for their employees, or are punished by relevant government departments due to the payment of "five social insurances and one housing fund", I will bear all direct and indirect losses caused by the supplementary payment or punishment in full, and ensure that Oppein Group and its subsidiaries will not suffer any losses as a result. | Long term | Yes | Yes | N/A | N/A |
| Commitments related to initial public offerings | Other | Yao Liangsong, actual controller of the Company | 1. I will urge Oppein Group and its subsidiaries to fully implement the current effective Interim Provisions on Labor Dispatch and the relevant provisions of relevant laws and regulations; 2. If Oppein Group and its subsidiaries are punished by relevant government departments for failing to comply with the relevant provisions of the Interim Provisions on Labor Dispatch in the past or in the future, I will bear all direct and indirect losses incurred due to the punishment in full, and ensure that Oppein Group and its subsidiaries will not suffer any | Long term | Yes | Yes | N/A | N/A |
| losses as a result. | ||||||||
| Commitments related to initial public offerings | Other | All directors and senior managers | 1. I will not transfer benefits to other units or individuals free of charge or under unfair conditions, nor will I damage the interests of the Company in other ways. 2. I will strictly abide by the budget management of the Company, and any consumption behavior of my position will occur within the scope necessary to perform my duties, and strictly accept the supervision and management of the Company to avoid waste or excessive consumption. 3. I will not use the Company's assets to engage in investment and consumption activities unrelated to the performance of my duties. 4. I will exercise due diligence to link the remuneration system established by the board of directors or the compensation committee to the implementation of the Company's measures to fill returns. 5. I will exercise my due diligence to link the exercise conditions, if any, of the Company's equity incentives to be announced by the Company in the future to the implementation of the Company's measures to fill returns. 6. I will do my best to promote the realization of the Company's measures to fill the immediate return, will support the relevant bills linked to the implementation of the Company's measures to fill returns, and am willing to vote in favor | Long term | Yes | Yes | N/A | N/A |
| (if entitled to vote). After the date of issuance of this commitment, if the regulatory authorities make other requirements for the relevant provisions on measures to fill returns and their commitments, and the above commitments fail to meet the relevant requirements of the regulatory authorities, I promise to issue supplementary commitments in accordance with the relevant provisions at that time. | ||||||||
| Commitments related to refinancing | Other | Directors and senior managers of the Company | In order to ensure that the Company's measures to fill returns can be effectively implemented, all directors and senior managers of the Company make the following commitments: 1. Promise not to transfer benefits to other units or individuals free of charge or under unfair conditions, nor to damage the interests of the Company in other ways; 2. Promise to restrict my job consumption behavior; 3. Promise not to use the Company's assets to engage in investment and consumption activities unrelated to the performance of their duties; 4. Promise that the remuneration system formulated by the board of directors or the Remuneration and Assessment Committee will be linked to the implementation of the Company's measures to fill returns; 5. If the Company implements a new equity incentive plan in the future, it is promised that the exercise conditions of the equity incentive plan to be announced will be linked to the implementation of the Company's remuneration measures. As one of the responsible subjects for measures to fill returns, if I violate the above commitments or refuse to fulfill the above commitments, I agree to bear the relevant penalties or management measures imposed on me by the securities regulatory authorities | During the duration of convertible bonds | Yes | Yes | N/A | N/A |
| such as the CSRC and the Shanghai Stock Exchange in accordance with the relevant provisions and rules formulated or issued by them, and am willing to bear the corresponding legal liabilities. | |||||||
| Other | Controlling shareholder and actual controller of the Company | In order to ensure that the Company's measures to fill returns can be effectively implemented, the controlling shareholders and actual controllers of the Company make the following commitments: "I will not interfere with the operation and management activities of listed companies beyond my authority and will not infringe on the interests of listed companies. As one of the responsible subjects for measures to fill returns, if I violate the above commitments or refuse to fulfill the above commitments, I agree to bear the relevant penalties or management measures imposed on me by the securities regulatory authorities such as the CSRC and the Shanghai Stock Exchange in accordance with the relevant provisions and rules formulated or issued by them, and am willing to bear the corresponding legal liabilities." | During the duration of convertible bonds | Yes | Yes | N/A | N/A |
| Commitments related to refinancing | Other | Shareholders, directors, supervisors and senior managers holding more than 5% of the shares | 1. After confirmation on the first day of the issuance of convertible bonds (the announcement date of the prospectus), I will inspect whether I and my spouse, parents and children have reduced their holdings of the issuer's shares within six months before the first day of issuance by myself: (1) If there is a reduction, I and my spouse, parents and children will not participate in the issuance and subscription of convertible bonds, nor will I entrust other subjects to participate in the issuance and subscription of convertible bonds; (2) If there is no reduction, I or my spouse, parents and children will participate in the issuance and subscription of convertible bonds. If the subscription is successful, I, my spouse, parents and children will strictly abide by the relevant provisions of short-term trading, that is, not to reduce the issuer's shares and convertible corporation bonds issued within six months from the first day of the issuance of convertible bonds. 2. If I or my spouse, parents or children reduce our holdings in violation of regulations, the proceeds thus obtained shall belong to the issuer and we will bear the legal liabilities arising therefrom in accordance with the law. 3. I guarantee that I, my spouse, parents and children will strictly abide by the Securities Law and the relevant provisions of the CSRC and the Shanghai Stock Exchange on short-term trading. | Commitment period before confirmation on the first day of issuance of convertible bonds: long term | Yes | Yes | N/A | N/A |
| Commitments related to equity incentives | Other | The Company | will not provide loans and other forms of financial assistance for incentive targets to obtain relevant stock options under this incentive plan, including providing guarantees for its loans. | Validity period of stock option incentive plan in 2021 | Yes | Yes | N/A | N/A |
| Other | Stock option incentive targets in 2021 | If the Company does not conform to the arrangement for granting rights and interests or exercising rights and interests due to false records, misleading statements or major omissions in the information disclosure documents, the incentive targets shall return all the benefits obtained from the equity incentive plan to the Company after the relevant information disclosure documents are confirmed to have false records, misleading statements or major omissions. | Validity period of stock option incentive plan in 2021 | Yes | Yes | N/A | N/A | |
| Other commitments | Other | The fourth board of directors, board of supervisors and senior managers of the Company | 1. Directors, supervisors and senior managers undertake to: (1) Abide by and urge the Company to abide by laws, administrative regulations, departmental rules, etc., and fulfill the obligations of loyalty and diligence; (2) Comply with and cause the Company to comply with these rules and other provisions of the Exchange and accept the supervision of the Exchange; (3) Comply with and cause the Company to comply with the Articles of Association; 2. The supervisors undertake to supervise directors and senior managers to abide by their commitments. 3. The senior managers undertake to report to the board of directors in a timely manner any matters arising from the operation or finance of the Company that may have a greater impact on the trading price of the Company's shares and their derivatives. | During the term of office of the fourth board of directors and board of supervisors | Yes | Yes | N/A | N/A |
(II) If there is a profit forecast for the Company's assets or projects, and the reporting period is still in the profit forecast period, the Company shall explain whetherthe assets or projects meet the original profit forecast and the reasons
□ Met □ Not met √ Not applicable
(III) Completion of performance commitments and its impact on goodwill impairment test
□ Applicable √ Not applicable
II. Non operating occupation of funds by controlling shareholders and other related parties during the reporting period
□ Applicable √ Not applicable
III. Illegal guarantee
□ Applicable √ Not applicable
IV. Description of the board of directors of the Company on the "non-standard opinion audit report" of theaccounting firm
□ Applicable √ Not applicable
V. The Company's analysis and description of the reasons and impact of changes in accounting policies, accountingestimates or corrections of major accounting errors(I) The Company's analysis and description of the reasons and impact of changes in accounting policies andaccounting estimates
√ Applicable □ Not applicable
This change in accounting policy is a reasonable change made by the Company in accordance with the requirementsof the Interpretation of Accounting Standards for Business Enterprises No. 15 (CK [2021] No. 35) and the Interpretationof Accounting Standards for Business Enterprises No. 16 (CK [2022] No. 31) issued by the Ministry of Finance. Thechanged accounting policy can more objectively and fairly reflect the Company's financial situation, operating results andcash flow, which is in line with the interests of the Company and all shareholders. This change in accounting policy doesnot involve retrospective adjustment of the Company's previous years, has no significant impact on the Company'sfinancial situation, operating results and cash flow, and does not damage the interests of the Company and all shareholders,especially minority shareholders.(II) Analysis and description of the Company's reasons and impact for the correction of major accounting errors
□ Applicable √ Not applicable
(III) Communication with previous accounting firms
□ Applicable √ Not applicable
(IV) Other instructions
□ Applicable √ Not applicable
VI. Appointment and dismissal of accounting firms
Unit: '0,000 Currency: CNY
| Current appointment | |
| Name of domestic accounting firms | Huaxing Certified Public Accounts LLP (Special General Partnership) |
| Remuneration of domestic accounting firms | 234 |
| Audit years of domestic accounting firms | 3 |
| Name of certified public accountant of domestic accounting firms | Feng Jun, Fu Peng |
| Continuous years of audit services provided by certified public accountant of domestic accounting firms | 3 |
Note: Feng Jun, an accountant, provides audit services for the Company for one consecutive year.
| Name | Remuneration | |
| Internal control audit accounting firms | Huaxing Certified Public Accounts LLP (Special General Partnership) | 80 |
Description of the appointment and dismissal of accounting firms
√ Applicable □ Not applicable
On May 27, 2022, the Company held the 2021 annual general meetings of shareholders, which deliberated andapproved the Proposal on the Renewal of Huaxing Certified Public Accounts LLP (Special General Partnership) as theCompany's Audit Institution in 2022, and the Company hired Huaxing Certified Public Accounts LLP (Special GeneralPartnership) as the audit institution for 2022.Description of the change of accounting firm during the audit period
□ Applicable √ Not applicable
VII. Situations at risk of delisting(I) Reasons for delisting risk warning
□ Applicable √ Not applicable
(II) Measures to be taken by the Company
□ Applicable √ Not applicable
(III) Circumstances and reasons for termination of listing
□ Applicable √ Not applicable
VIII. Matters related to bankruptcy reorganization
□ Applicable √ Not applicable
IX. Major litigation and arbitration matters
□ The Company has major litigation and arbitration matters this year √ The Company has no major litigation andarbitration matters this year(I) The litigation and arbitration matters have been disclosed in the interim announcement and there is no follow-up progress
□ Applicable √ Not applicable
(II) Litigation and arbitration that are not disclosed in the interim announcement or have follow-up progress
□ Applicable √ Not applicable
(III) Other notes
□ Applicable √ Not applicable
X. Listed companies and their directors, supervisors, senior managers, controlling shareholders and actualcontrollers are suspected of violating laws and regulations, being punished and rectified
□ Applicable √ Not applicable
XI. Description of the integrity of the Company, its controlling shareholders and actual controllers during thereporting period
√ Applicable □ Not applicable
During the reporting period, the Company, the controlling shareholder and the actual controller of the Company, Mr.Yao Liangsong, did not have bad faith such as outstanding debts due.XII. Material related party transactions(I) Related party transactions related to day-to-day operation
1. Matters that have been disclosed in the interim announcement and have no progress or change in subsequentimplementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement but have progress or change in subsequentimplementation
□ Applicable √ Not applicable
3. Matters not disclosed in the provisional announcement
□ Applicable √ Not applicable
(II) Related party transactions arising from the acquisition and sale of assets or equity
1. Matters that have been disclosed in the interim announcement and have no progress or change in subsequentimplementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement but have progress or change in subsequentimplementation
□ Applicable √ Not applicable
3. Matters not disclosed in the provisional announcement
□ Applicable √ Not applicable
4. If the performance agreement is involved, the performance realization during the reporting period shall bedisclosed
□ Applicable √ Not applicable
(III) Major related party transactions of joint foreign investment
1. Matters that have been disclosed in the interim announcement and have no progress or change in subsequentimplementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement but have progress or change in subsequentimplementation
□ Applicable √ Not applicable
3. Matters not disclosed in the provisional announcement
□ Applicable √ Not applicable
(IV) Related creditor's rights and debts
1. Matters that have been disclosed in the interim announcement and have no progress or change in subsequentimplementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement but have progress or change in subsequentimplementation
□ Applicable √ Not applicable
3. Matters not disclosed in the provisional announcement
□ Applicable √ Not applicable
(V) Financial business between the Company and related financial companies, the Company's holding financialcompanies and related parties
□ Applicable √ Not applicable
(VI) Others
□ Applicable √ Not applicable
XIII. Major contracts and their performance(I) Trusteeship, contracting and leasing
1. Trusteeship
□ Applicable √ Not applicable
2. Contracting
□ Applicable √ Not applicable
3. Leasing
□ Applicable √ Not applicable
(II) Guarantees
√ Applicable □ Not applicable
Unit: CNY
| External guarantees of the Company (excluding guarantees to subsidiaries) | |||||||||||||||
| Guarantor | Relationship between guarantor and listed company | Guaranteed party | Guarantee amount | Guarantee occurrence date (agreement signing date) | Guarantee start date | Guarantee expiration date | Type of guarantee | Collateral, if any | Has the guarantee been fulfilled | Is the guarantee overdue | Guarantee overdue amount | Counter guarantee | Whether to guarantee for related parties | Relevance relationship | |
| Total amount of guarantees incurred during the reporting period (excluding guarantees to subsidiaries) | |||||||||||||||
| Total guarantee balance at the end of the reporting period (A) (excluding guarantees to subsidiaries) | |||||||||||||||
| Guarantees provided by the Company and its subsidiaries to subsidiaries | |||||||||||||||
| Total amount of guarantees to subsidiaries during the reporting period | 2,204,332,837.12 | ||||||||||||||
| Total guarantee balance to subsidiaries at the end of the reporting period (B) | 988,765,204.81 | ||||||||||||||
| Total guarantee amount of the Company (including guarantee to subsidiaries) | |||||||||||||||
| Total guarantee (A+B) | 988,765,204.81 | ||||||||||||||
| Proportion of total guarantee to net assets of the Company (%) | 5.99 | ||||||||||||||
| Of which: | |||||||||||||||
| Amount of guarantee provided for shareholders, actual controllers and their related parties (C) | 0.00 | ||||||||||||||
| Amount of debt guarantee directly or indirectly provided for the guaranteed object with an asset liability ratio of more than 70% (D) | 18,385,260.74 | ||||||||||||||
| Amount of the total guarantee exceeding 50% of the net assets (E) | 0.00 | ||||||||||||||
| Total amount of the above three guarantees (C+D+E) | 18,385,260.74 | ||||||||||||||
| Description of possible joint and several liability for repayment of unexpired guarantee | None | ||||||||||||||
| Guarantee description | None | ||||||||||||||
(III) Entrust others to manage cash assets
1. Entrusted financial management
(1) General situation of entrusted financial management
√ Applicable □ Not applicable
Unit:CNY ‘0,000
| Type | Source of funds | Amount incurred | Outstanding balance | Overdue uncollected amount |
| Bank financing | Own funds | 55,000.00 | 50,000.00 | 0.00 |
| Bank financing | Fund raising | 55,000.00 | 30,000.00 | 0.00 |
Other circumstances
□ Applicable √ Not applicable
(2) Single entrusted financial management
√ Applicable □ Not applicable
Unit:CNY ‘0,000
| Trustee | Type of entrusted financial management | Amount of entrusted financial management | Start date of entrusted financial management | Termination date of entrusted financial management | Source of funds | Capital investment | Remuneration determination method | Annualized yield | Expected earnings (if any) | Actual gains or losses | Actual recovery | Whether it has gone through legal procedures | Is there an entrusted financial management plan in the future | Amount of provision for impairment (if any) |
| China Merchants Bank Guangzhou Branch | China Merchants Bank Company Dingding A Type 65170 financial management plan | 20,000.00 | 2021/5/26 | 2021/12/9 | Own funds | Contract | 4.00% | - | 431.78 | Recovery | Yes | Yes | - | |
| China Merchants Bank Guangzhou Branch | China Merchants Bank Company Dingding A Type 65170 financial management plan | 2021/5/26 | 2022/1/10 | Own funds | Contract | 4.00% | - | 69.93 | Recovery | Yes | Yes | - |
| China Merchants Bank Guangzhou Branch | China Merchants Bank Company Dingding A Type 65170 financial management plan | 2021/5/26 | 2022/2/14 | Own funds | Contract | 4.00% | - | Recovery | Yes | Yes | - | |||
| ICBC Guangzhou Tianpingjia Sub-branch | ICBC wealth management · Wishful life core preferred fixed income closed net value special account customized wealth management products (21GS5309) | 30,000.00 | 2021/7/21 | 2022/7/20 | Own funds | Contract | 3.80% | - | 603.00 | Recovery | Yes | Yes | - | |
| Bank of China Guangzhou Jianggao Sub-branch | Linked structured deposits | 10,000.00 | 2021/8/26 | 2022/3/1 | Own funds | Contract | 3.80% | - | 194.68 | Recovery | Yes | Yes | - | |
| ICBC Guangzhou Tianpingjia Sub-branch | ICBC wealth management. Core preferred fixed income closed net value special account customized wealth management products 21GS5256 | 20,000.00 | 2021/8/30 | 2022/8/29 | Own funds | Contract | 3.80% | - | 318.00 | Recovery | Yes | Yes | - | |
| China Construction Bank | China Construction Bank "Qianyuan - | 10,000.00 | 2021/9/22 | 2022/1/5 | Own funds | Contract | 3.61% | - | 103.85 | Recovery | Yes | Yes | - |
| Guangzhou Jianggao Sub-branch | Huizhong" (Purchase by daily subscription and redemptions are made quarterly) open net value CNY financial products | |||||||||||||
| China Bohai Bank Tianjin Pilot Free Trade Zone Branch | China Bohai Bank No. 21060 closed fixed income non-net value financial products | 20,000.00 | 2021/9/29 | 2022/3/28 | Own funds | Contract | 4.20% | - | 414.25 | Recovery | Yes | Yes | - | |
| China Construction Bank Guangzhou Jianggao Sub-branch | China Construction Bank "Qianyuan - Huizhong" (Purchase by daily subscription and redemptions are made quarterly) open net value CNY financial products | 15,000.00 | 2021/10/12 | 2022/1/5 | Own funds | Contract | 3.63% | - | 140.19 | Recovery | Yes | Yes | - | |
| China Construction Bank Guangzhou Jianggao Sub-branch | China Construction Bank "Qianyuan - Huizhong" (Purchase by daily subscription and redemptions are made quarterly) open net value CNY financial products | 25,000.00 | 2021/10/12 | 2022/1/5 | Own funds | Contract | 3.63% | - | 225.09 | Recovery | Yes | Yes | - | |
| China | China | 25,000.00 | 2021/10/ | 2022/1/5 | Own | Contract | 3.63% | - | 225. | Recove | Yes | Yes | - |
| Construction Bank Guangzhou Jianggao Sub-branch | Construction Bank "Qianyuan - Huizhong" (Purchase by daily subscription and redemptions are made quarterly) open net value CNY financial products | 12 | funds | 09 | ry | |||||||||
| CGB Qingyuan Branch | CGB's "salary increase No.16" W Type 99th CNY structural deposit in 2021 (institutional version) (linked to Euro - dollar euro binary bearish structure) | 5.00 | 2021/12/23 | 2022/1/27 | Own funds | Contract | 3.25% | - | 0.02 | Recovery | Yes | Yes | - | |
| Ping An Bank Guangzhou Branch | Ping An Bank's public structured deposits (100% principal guaranteed linked interest rate) rolling open 7-day 2020 Issue 01 TGA20000001 | 5,000.00 | 2022/7/29 | 2022/8/4 | Own funds | Contract | 1.82% | - | 1.99 | Recovery | Yes | Yes | - | |
| China Construction Bank Guangzhou Jianggao Sub-branch | CNY customized structured deposits | 50,000.00 | 2022/9/2 | 2023/3/6 | Own funds | Contract | 3.55% | - | - | — | Yes | Yes | - | |
| China Merchant | China Merchants Bank Zhihui | 20,000.00 | 2022/9/20 | 2022/12/20 | Fund raisi | Contract | 2.85% | - | 142.11 | Recovery | Yes | Yes | - |
| s Bank Guangzhou Branch | series aggressive bearish three-tier interval three-month structural deposits | ng | ||||||||||||
| China Merchants Bank Guangzhou Branch | China Merchants Bank Zhihui series aggressive bearish three-tier interval one-month structural deposit product description structured deposit product description (Product Code: FGZ00011) | 5,000.00 | 2022/11/11 | 2022/12/12 | Fund raising | Contract | 2.70% | - | 11.47 | Recovery | Yes | Yes | - | |
| China Merchants Bank Guangzhou Branch | China Merchants Bank Zhihui series bullish three-tier interval 33-day structural deposit risk disclosure FGZ00012 | 30,000.00 | 2022/12/28 | 2023/1/30 | Fund raising | Contract | 2.90% | - | - | — | Yes | Yes | - |
Other circumstances
□ Applicable √ Not applicable
(3) Provision for impairment of entrusted financial management
□ Applicable √ Not applicable
2. Entrusted loan
(1) General situation of entrusted loan
□ Applicable √ Not applicable
Other circumstances
□ Applicable √ Not applicable
(2) Single entrusted loan
□ Applicable √ Not applicable
Other circumstances
□ Applicable √ Not applicable
(3) Provision for impairment of entrusted loan
□ Applicable √ Not applicable
3. Other circumstances
□ Applicable √ Not applicable
(IV) Other major contracts
□ Applicable √ Not applicable
XIV. Descriptions of other major matters that have a significant impact on investors' value judgments andinvestment decisions
□ Applicable √ Not applicable
Section VII Changes in shares and shareholdersI. Changes in equity(I) Statement of Changes in Shares
1. Statement of changes in shares
Unit: nos.
| Before this change | Increase or decrease in this change (+, -) | After this change | |||||||
| Quantity | Proportion (%) | New issue | Dividend | Provident fund conversion | Other | Sub-total | Quantity | Proportion (%) | |
| I. Shares with limited conditions of sale | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 1. Shares held by State | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 2. Shares held by State-owned legal persons | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. Shares held by other domestic capital | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Including: shares held by domestic non state-owned legal persons | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Shares held by domestic natural persons | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. Foreign shareholding | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Including: shares held by overseas legal persons | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Shares held by overseas natural person | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| II. Unrestricted tradable shares | 609,151,948 | 100 | 6 | 0 | 0 | 0 | 6 | 609,151,954 | 100 |
| 1. CNY ordinary share | 609,151,948 | 100 | 6 | 0 | 0 | 0 | 6 | 609,151,954 | 100 |
| 2. Domestic listed foreign share | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 3. Overseas listed foreign share | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| 4. Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| III. Total shares | 609,151,948 | 100 | 6 | 0 | 0 | 0 | 6 | 609,151,954 | 100 |
2. Description of changes in shares
√ Applicable □ Not applicable
During the period from September 21, 2022 to September 30, 2022, the number of incentive targets who met theexercise conditions and completed the registration of share transfer in the first exercise period of stock options grantedby the Company for the first time was 6 shares, accounting for 0.0006% of the total number of exercisable stock optionsin that period. For details, please refer to the Announcement on Quarterly Independent Exercise Results and ShareChanges of the Company's Stock Option Incentive Plan in 2021 (2022-084) disclosed by the Company on the website ofShanghai Stock Exchange.
3. Impact of share changes on financial indicators such as earnings per share and net assets per share in the latestyear and the latest period (if any)
√ Applicable □ Not applicable
During the reporting period, due to the impact of stock option exercise, the Company's total equity at the end of theperiod increased by 6 shares compared with the total equity at the beginning of the period, which had little dilution effecton earnings per share and net assets per share in the latest period.
4. Other contents deemed necessary by the Company or required to be disclosed by the securities regulatoryauthority
□ Applicable √ Not applicable
(II) Changes in restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing(I) Securities issuance as of the reporting period
√ Applicable □ Not applicable
Unit: share Currency: CNY
| Types of stocks and their derivatives | Issue date | Issue price (or interest rate) | Number of issues | Listing date | Number of transactions approved for listing | Transaction termination date |
| Convertible corporation bonds and convertible bonds with separate transactions | ||||||
| Oppein 22 convertible bonds | August 5, 2022 | 100 | 20 million | September 1, 2022 | 20 million | August 4, 2028 |
| Other derivative securities | ||||||
| Option for the first exercise period of the first grant of stock options | September 21, 2022 | 145.22 | 1,042,576 | September 21, 2022 | 1,042,576 | July 1, 2023 |
Notes on the issuance of securities during the reporting period (please explain separately for bonds with different interestrates during the duration):
√ Applicable □ Not applicable
1. With the approval of "ZJXK [2022] No.1328" of CSRC, the Company publicly issued 20 million convertiblecorporation bonds on August 5, 2022, with a face value of CNY 100 each and a total issuance amount of CNY 2 billion.The term of the bonds is six years from the date of issuance (from August 5, 2022 to August 4, 2028). The coupon rateof the bonds is 0.30% in the first year, 0.50% in the second year, 1.00% in the third year, 1.50% in the fourth year, 1.80%in the fifth year and 2.00% in the sixth year.
On September 1, 2022, "Oppein 22 convertible bonds" (Bond Code: 113655) were listed and traded on the ShanghaiStock Exchange. The initial conversion price of "Oppein 22 convertible bonds" was CNY 125.46 per share, and theconversion time was from February 13, 2023 to August 4, 2028 (in case of legal holidays or rest days, it was postponedto the first working day thereafter).
2. In the first exercise period of the first grant of stock options under the Company's stock option incentive plan in2021, 439 incentive targets met the exercise conditions, totaling 1,042,576 exercisable stock options. The exercise timewas from September 21, 2022 to July 1, 2023. The exercise method was independent exercise, and the exercise price wasCNY 145.22 per share. During the period from September 21, 2022 to September 30, 2022, the number of exercise andcompletion of share transfer registration of stock option incentive targets was 6 shares, accounting for 0.0006% of thetotal number of exercisable stock options in that period.
(II) Changes in the total number of shares and shareholder structure of the Company and changes in the structureof assets and liabilities of the Company
√ Applicable □ Not applicable
During the reporting period, due to the impact of stock option exercise, the Company's total equity at the end of theperiod increased by 6 shares compared with the total equity at the beginning of the period, which had little impact on theCompany's asset and liability structure.(III) Existing internal employee stocks
□ Applicable √ Not applicable
III. Shareholders and actual controllers(I) Total shareholders
| Total number of ordinary shareholders (nos.) by the end of the reporting period | 9,668 |
| Total number of ordinary shareholders (nos.) at the end of the previous month before the disclosure date of the annual report | 10,365 |
| Total number of preferred shareholders whose voting rights were restored by the end of the reporting period (nos.) | 0 |
| Total number of preferred shareholders whose voting rights were restored at the end of last month before the disclosure date of the annual report (nos.) | 0 |
(II) By the end of the reporting period, the shareholding of the top ten shareholders and the top ten circulatingshareholders (or shareholders with unlimited selling conditions)
Unit: share
| Shareholding of the top ten shareholders | |||||||
| Name of shareholder (full name) | Increase or decrease during the reporting period | Number of holdings at the end of the period | Proportion (%) | Number of shares with limited conditions of sale | Pledge, marking or freezing | Nature of shareholder | |
| Share status | Quantity | ||||||
| Yao Liangsong | 0 | 403,200,000 | 66.19 | 0 | None | 0 | Domestic natural person |
| Yao Liangbai | 0 | 51,578,316 | 8.47 | 0 | None | 0 | Domestic natural person |
| Hong Kong Securities Clearing Company Limited | -16,562,487 | 27,504,266 | 4.52 | 0 | None | 0 | Unknown |
| Agricultural Bank of China Limited - Yifangda consumer industry stock securities investment fund | -450,002 | 8,607,719 | 1.41 | 0 | None | 0 | Other |
| ICBC - Guangfa steady growth securities investment fund | 1,300,000 | 6,800,000 | 1.12 | 0 | None | 0 | Other |
| National Social Security Fund 115 portfolio | 1,450,000 | 5,350,000 | 0.88 | 0 | None | 0 | Other |
| Social Security | 526,195 | 2,853,322 | 0.47 | 0 | None | 0 | Other |
| Fund of the People's Republic of China 114 portfolio | ||||||||
| Basic endowment insurance fund 805 portfolio | 350,000 | 2,650,000 | 0.44 | 0 | None | 0 | Other | |
| ICBC - Guangfa steady return hybrid securities investment fund | 914,120 | 2,316,620 | 0.38 | 0 | None | 0 | Other | |
| Kuwait Investment Authority - own funds | 1,529,251 | 1,763,212 | 0.29 | 0 | None | 0 | Other | |
| Shareholding of the top ten shareholders with unlimited selling conditions | ||||||||
| Name of shareholder | Number of tradable shares with unrestricted conditions | Class and number of shares | ||||||
| Classification | Quantity | |||||||
| Yao Liangsong | 403,200,000 | CNY ordinary share | 403,200,000 | |||||
| Yao Liangbai | 51,578,316 | CNY ordinary share | 51,578,316 | |||||
| Hong Kong Securities Clearing Company Limited | 27,504,266 | CNY ordinary share | 27,504,266 | |||||
| Agricultural Bank of China Limited - Yifangda consumer industry stock securities investment fund | 8,607,719 | CNY ordinary share | 8,607,719 | |||||
| ICBC - Guangfa steady growth securities investment fund | 6,800,000 | CNY ordinary share | 6,800,000 | |||||
| National Social Security Fund 115 portfolio | 5,350,000 | CNY ordinary share | 5,350,000 | |||||
| Social Security Fund of the People's Republic of China 114 portfolio | 2,853,322 | CNY ordinary share | 2,853,322 | |||||
| Basic endowment insurance fund 805 portfolio | 2,650,000 | CNY ordinary share | 2,650,000 | |||||
| ICBC - Guangfa steady return hybrid securities investment fund | 2,316,620 | CNY ordinary share | 2,316,620 | |||||
| Kuwait Investment Authority - own funds | 1,763,212 | CNY ordinary share | 1,763,212 | |||||
| Description of repurchase account among the top ten shareholders | N/A | |||||||
| Description on the entrusting voting rights, entrusted voting rights and waiver of voting rights of the above-mentioned shareholders | Unknown | |||||||
| Description of the above shareholder's association or concerted action | Among the top ten shareholders with unlimited selling conditions, Yao Liangsong is the actual controller of the Company, Yao Liangbai is a close family member of Yao Liangsong, and Yao Liangsong and Yao Liangbai constitute a relationship. The Company does not know whether there is a related relationship between other social shareholders, nor does it know whether other social shareholders belong to the concerted actors stipulated in the Measures for the Administration of the Acquisition of Listed Companies. | |||||||
| Description of preferred shareholders with voting rights restored and the number of shares held | N/A | |||||||
Number of shares held by the top ten shareholders with limited selling conditions and restricted selling conditions
□ Applicable √ Not applicable
(III) Strategic investors or general legal persons become the top 10 shareholders due to the placement of new shares
□ Applicable √ Not applicable
IV. Controlling shareholders and actual controllers(I) Controlling shareholders1 Legal person
□ Applicable √ Not applicable
2 Natural Persons
√ Applicable □ Not applicable
| Name | Yao Liangsong |
| Nationality | China |
| Have you obtained residency in other countries or regions | No |
| Main occupation and position | Chairman and president of the Company |
3 Special description about no controlling shareholder of the Company
□ Applicable √ Not applicable
4 Description of changes in controlling shareholders during the reporting period
□ Applicable √ Not applicable
5 Block diagram of property rights and control relationship between the Company and controllingshareholders
√ Applicable □ Not applicable
(II) Actual controllers1 Legal person
□ Applicable √ Not applicable
YaoLiangsongOppein Home Group Inc.
2 Natural Persons
√ Applicable □ Not applicable
| Name | Yao Liangsong |
| Nationality | China |
| Have you obtained residency in other countries or regions | No |
| Main occupation and position | Chairman and general manager |
| Domestic and foreign listed companies that have controlled in the past 10 years | N/A |
3 Special description about no actual controller of the Company
□ Applicable √ Not applicable
4 Description of changes in the Company's control rights during the reporting period
□ Applicable √ Not applicable
5 Block diagram of property rights and control relationship between the Company and actual controller
√ Applicable □ Not applicable
6 The actual controller controls the Company through trust or other asset management methods
□ Applicable √ Not applicable
(III) Other information about controlling shareholders and actual controllers
□ Applicable √ Not applicable
V. The controlling shareholder or the largest shareholder of the Company and its concerted actors have pledgedmore than 80% of the Company's shares
□ Applicable √ Not applicable
VI. Other corporate shareholders holding more than 10% of the shares
□ Applicable √ Not applicable
VII. Description of share restriction and reduction
□ Applicable √ Not applicable
YaoLiangsongOppein Home Group Inc.
VIII. Specific implementation of share repurchase during the reporting period
√ Applicable □ Not applicable
Unit: CNY
| Name of share repurchase plan | Oppein Home's plan to repurchase the Company's shares through centralized bidding transactions |
| Disclosure time of share repurchase plan | October 28, 2022 |
| Number of shares to be repurchased and proportion in total equity (%) | 0.27 |
| Proposed repurchase amount | ≥ CNY 125,000,000 and ≤ CNY 250,000,000 |
| Proposed repurchase period | Within 12 months from the date of approval of the share repurchase plan at the second meeting of the fourth board of directors |
| Repurchase purpose | Employee stock ownership plan, equity incentive, convertible bond conversion |
| Number of repurchased shares | 0 |
| Proportion of repurchased quantity to the underlying shares involved in the equity incentive plan (%) (if any) | — |
| Progress of the Company's reduction of repurchased shares by means of centralized bidding transactions | — |
Note: "The number of shares to be repurchased and the proportion (%) to the total equity" is calculated based on therepurchase price not exceeding CNY 155 per share. If all shares are repurchased, it is estimated that the number ofrepurchased shares will be about 1,612,903 shares, accounting for about 0.27% of the Company's total equity.
Section VIII Preferred shares
□ Applicable √ Not applicable
Section IX BondsI. Corporate bonds, corporation bonds and non-financial corporate debt financing instruments
□ Applicable √ Not applicable
II. Convertible corporation bonds
√ Applicable □ Not applicable
(I) Issuance of convertible bonds
√ Applicable □ Not applicable
With the approval of "ZJXK [2022] No.1328" of CSRC, the Company publicly issued 20 million convertiblecorporation bonds on August 5, 2022, with a face value of CNY 100 each and a total issuance amount of CNY 2 billion.The term of the bonds is six years from the date of issuance (from August 5, 2022 to August 4, 2028). The coupon rateof the bonds is 0.30% in the first year, 0.50% in the second year, 1.00% in the third year, 1.50% in the fourth year, 1.80%in the fifth year and 2.00% in the sixth year.On September 1, 2022, "Oppein 22 convertible bonds" (Bond Code: 113655) were listed and traded on the ShanghaiStock Exchange. The initial conversion price of "Oppein 22 convertible bonds" was CNY 125.46 per share, and theconversion time was from February 13, 2023 to August 4, 2028 (in case of legal holidays or rest days, it was postponedto the first working day thereafter).(II) Holders and guarantors of convertible bonds during the reporting period
√ Applicable □ Not applicable
| Name of convertible corporation bonds | Oppein 22 convertible bonds |
| Number of convertible bond holders at the end of the period | 11,313 |
| Guarantor of the Company's convertible bonds | None | |
| The top ten convertible bond holders are as follows: | ||
| Name of convertible corporation bond holders | Number of bonds held at the end of the period (CNY) | Holding ratio (%) |
| Yao Liangsong | 1,323,706,000 | 66.19 |
| Yao Liangbai | 169,332,000 | 8.47 |
| Agricultural Bank of China Limited - Yifangda consumer industry stock securities investment fund | 32,002,000 | 1.60 |
| CNPC enterprise annuity plan - Industrial and Commercial Bank of China Limited | 19,544,000 | 0.98 |
| PSBC Wealth Management Co., Ltd. - PSBC wealth · bonds issue 299, 2018 (bimonthly fixed growth net value type) | 13,589,000 | 0.68 |
| China Merchants Bank Co., Ltd. - Huabao convertible bond securities investment fund | 11,923,000 | 0.60 |
| China Construction Bank Co., Ltd. - Zheshang Fengli enhanced bond securities investment fund | 10,000,000 | 0.50 |
| Harvest new opportunity fixed income pension product - China Construction Bank Co., Ltd. | 10,000,000 | 0.50 |
| China Life Asset Management - PSBC - CLAM - steady profit and fixed income enhanced 2276 asset management products | 8,353,000 | 0.42 |
| Agricultural Bank of China - Dacheng bond investment fund | 8,056,000 | 0.40 |
(III) Changes in convertible bonds during the reporting period
□ Applicable √ Not applicable
Cumulative conversion of convertible bonds during the reporting period
□ Applicable √ Not applicable
(IV) Previous adjustments to conversion prices
□ Applicable √ Not applicable
(V) The Company's liabilities, credit changes and cash arrangements for debt repayment in future years
√ Applicable □ Not applicable
At the end of the reporting period, the Company's total liabilities were CNY 12.097 billion, of which currentliabilities were CNY 9.675 billion, non-current liabilities were CNY 2.422 billion, and the balance of liabilities to berepaid in the next year was CNY 6.977 billion. As of December 31, 2022, the monetary funds that can be withdrawn atany time were CNY 3.631 billion, the time deposits were CNY 8.877 billion, with small liquidity risk. The Company'soperation is stable in all aspects, its asset structure is reasonable, and its credit standing is good, which can provide stableand sufficient funds for the payment of convertible corporation bonds interest or the repayment of bond principal in thecoming years.(VI) Other information on convertible bonds
□ Applicable √ Not applicable
Section X Financial ReportsI. Audit report
√ Applicable □ Not applicable
All shareholders of Oppein Home Group Inc.:
I. OpinionWe have audited the financial statements of Oppein Home Group Inc. (hereinafter referred to as "Oppein Home"),including the consolidated and parent company's balance sheet as of December 31, 2022, the consolidated and parentcompany's profit statement, the consolidated and parent company's cash flow statement, the consolidated and parentcompany's Statement of Changes in Equity and notes to relevant financial statements as of 2022.
In our opinion, the accompanying financial statements have been prepared in accordance with the provisions of theAccounting Standards for Business Enterprises in all material aspects and fairly reflect the consolidation of Oppein Homeand parent company's financial position as of December 31, 2022, as well as the consolidation and parent company'soperating results and cash flows as of 2022.II. Basis for OpinionWe performed the audit in accordance with the Chinese Certified Public Accountants Auditing Standards. Thesection of "CPA's Responsibility for Auditing Financial Statements" of the audit report further elaborated ourresponsibilities under these standards. We are independent of Oppein Home in accordance with the Code of Ethics forProfessional Accountants of the Chinese Institute of Certified Public Accountants ("CICPA Code"), and we have fulfilledour other ethical responsibilities in accordance with the CICPA Code. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for issuing an audit opinion.III. Key audit mattersKey audit matters are the most important matters we believe to audit the current financial statements according toour professional judgment. The response to these matters is based on the audit of the financial statements as a whole andthe formation of an audit opinion, and we do not express an opinion on these matters separately.(I) Revenue recognition
1. Description of matters
As described in Section X Financial report "V. Important accounting policies and accounting estimates 38. Revenue"and "Section X Financial report VII. Notes to major items in the consolidated financial statements 61. Operating incomeand operating costs", Oppein Home sales model is mainly divided into dealer exclusive store sales model, direct-saleexclusive store sales model, bulk user business model and export sales model. In 2022, the operating income was CNY
22.480 billion, and compared with the previous year, operating income increased by 9.97%. As income is the keyoperating indicator of Oppein Home, there is an inherent risk that management manipulates revenue recognition in orderto achieve specific goals or expectations. Therefore, we identify revenue recognition as a key audit item.
2. Audit response
The main audit procedures we performed for the revenue recognition of Oppein Home include, but are not limitedto:
(1) Understand and evaluate the internal control design related to Oppein Home income, and test the effectivenessof the implementation of internal control;
(2) For different sales models, identify the relevant contract terms and conditions related to the transfer of commoditycontrol, and evaluate whether the revenue recognition time of different sales models meets the requirements of AccountingStandards for Business Enterprises;
(3) Analytically review the different product categories, sales models and regional sales of Oppein Home, andanalyze the rationality of changes in sales revenue and gross profit margin;
(4) Check the supporting documents related to revenue recognition, including sales contracts, orders, sales invoices,product delivery orders and logistics transportation documents;
(5) Sample the current sales and balance of customers to verify the authenticity, accuracy and completeness ofrevenue;
(6) Perform a cutoff test on revenue and confirm whether revenue is included in the correct accounting period.
(II) Book value of fixed assets and construction in progress
1. Description of matters
As described in Section X Financial report "V. Important accounting policies and accounting estimates 23. Fixedassets, 24. Construction in progress" and "VII. Notes to major items in the consolidated financial statements 21. Fixedassets, 22. Construction in progress", as of December 31, 2022, the total book value of fixed assets and construction inprogress of Oppein Home was CNY 8.119 billion, accounting for 28.38% of the total assets of Oppein Home, mainly theplant, equipment and engineering of six production bases in Guangzhou, Qingyuan, Tianjin, Wuxi, Chengdu and Wuhan,which are an important part of Oppein Home assets. As the determination of the book value of fixed assets andconstruction in progress involves management judgment and has a significant impact on the financial statements, wedetermine the book value of fixed assets and construction in progress of Oppein Home as a key audit item.
2. Audit response
For the book value of fixed assets and construction in progress, our main audit procedures include but are not limitedto:
(1) Understand and test the effectiveness of key internal control design and operation related to the integrity,existence and accuracy of fixed assets and construction in progress;
(2) Check the project acceptance report or project progress report to evaluate whether the fixed assets are confirmedin an appropriate period;
(3) Check the new project cost in this period, check the project contract, settlement documents, progress paymentapplication, invoices and payment vouchers, and check whether the amount of construction in progress is accurate; checkthe new fixed assets in the current period, and check the supporting documents such as contracts, invoices and acceptancecertificates;
(4) Check the construction in progress and fixed assets on the spot, implement the fixed assets supervision procedures,check the status and use of construction in progress and fixed assets, understand whether the construction in progress hasreached the usable status, understand whether there are problems such as backward technology and long-term idleness offixed assets, and value about the load rate of fixed assets;
(5) Evaluate the management's estimate of the economic useful life and residual value rate of fixed assets, recalculatethe cumulative depreciation provision amount of fixed assets and check the book records, and check the accuracy of thecumulative depreciation provision amount;
(6) Check the rationality and accuracy of capitalized expenditure and expensed expenditure, check the capitalizedexpenditure incurred during the reporting period by checking the capitalized expenditure with relevant supportingdocuments, and evaluate whether it meets the relevant conditions of capitalization.
IV. Other information
The management of Oppein Home (hereinafter referred to as the management) is responsible for other information.The other information comprises the information included in the 2022 Report of Oppein Home, but does not include thefinancial statements and our audit report thereon.
Our audit opinions published in the financial statements do not cover other information and we do not publish anyform of assured conclusion on other information.
In combination with our audit of the financial statements, our responsibility is to read other information. In theprocess, we consider whether there is significant inconsistency in other information with the financial statements or whatwe have learned during the audit process, or other material misstatement existed.
Based on the work we have performed, if we determine that there is a material misstatement of other information,we should report that fact. In this regard, we have nothing to report. In this regard, we have nothing to report.
V. Responsibilities of management and governance for the financial statements
The management is responsible for the preparation of financial statements that give a fair view in accordance withthe Accounting Standards for Business Enterprises and for such internal control as management determines is necessaryto enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the statements, the management is responsible for assessing the Oppein Home's ability to continue as agoing concern, disclosing, as applicable, matters related to going concern and using the going concern assumption unlessthe management either intends to liquidate Oppein Home or to cease operations, or has no realistic alternative but to doso.
The governance is responsible for overseeing Oppein Home's financial reporting process.
VI. CPA's responsibilities for the audit of the financial statements
Our objective is to obtain reasonable assurance as to whether the financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an audit report containing an audit opinion. Reasonableassurance is a high-level assurance, but it does not guarantee that an audit performed in accordance with auditing standardscan always be discovered when a major misstatement exists. Misstatement may be caused by fraud or error and isgenerally considered material if it is reasonably expected that the misstatement, individually or collectively, may affectthe economic decisions made by the users of the financial statements on the basis of the financial statements.In the process of conducting audit work in accordance with auditing standards, we use professional judgment andmaintain professional suspicion. At the same time, we also perform the following tasks: At the same time, we also performthe following tasks:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriateto provide a basis for our opinion. Since fraud may involve collusion, falsification, intentional omission, misrepresentationor override of internal controls, the risk of failing to detect a material misstatement due to fraud is higher than the risk offailure to detect a material misstatement due to an error.
(2) Understand the audit-related internal control to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies selected by the Management Layer and the reasonablenessof accounting estimates and related disclosures.
(4) Conclude on the appropriateness of Management's use of the going concern basis of accounting and, based onthe audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significantdoubt on Oppein Home's ability to continue as a going concern. If we conclude that there is material uncertainty, auditstandards require us to bring the relevant disclosures in the financial statements to the attention of the users of thestatements in the audit report; if the disclosure is insufficient, we should issue a modified opinion. Our conclusions arebased on the information available as of the date of the audit report. However, future events or conditions may causeOppein Home to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financialstatements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or businessactivities within Oppein Home to express an opinion on the financial statements. We are responsible for directing,supervising and executing the audits on the Group and assume full responsibility for audit opinions.
We communicated with the governance layer of CCCC First Navigation Co., Ltd. on planned audit scope, schedule,and major audit findings, including communication of the internal control deficiencies that we identified during the audit.
We also provide a statement to the management that we have complied with ethical requirements related toindependence and communicate with the management all relationships and other matters that may reasonably beconsidered to affect our independence, as well as related precautions, if applicable.
From the matters communicated with the governance, we determine which matters are most important to the auditof the current financial statements, thus constituting key audit matters. We describe these matters in the audit report unlesslaws and regulations prohibit public disclosure of these matters, or in rare cases, if the negative consequences ofcommunicating a matter in the audit report are reasonably expected to exceed the benefits in the public interest, wedetermine that the matter should not be communicated in the audit report.
| Huaxing Certified Public Accounts LLP (Special General Partnership) | Certified Public Accountant of China: Feng Jun (Project partner) | |
| Certified Public Accountant of China: Fu Peng | ||
| Fuzhou, China | April 24, 2023 |
II. Financial statements
Consolidated Balance Sheet
December 31, 2022
Prepared by: Oppein Home Group Inc.
Unit: CNY
| Item | Notes | December 31, 2022 | December 31, 2021 |
| Current assets: | |||
| Cash and bank balances | 8,269,801,977.25 | 6,561,937,418.36 | |
| Balances with clearing companies | |||
| Loans to banks and other financial institutions | |||
| Trading financial assets | 803,050,958.90 | 1,677,354,882.08 | |
| Derivative financial assets | |||
| Notes receivable | 110,434,205.93 | 206,073,671.76 | |
| Accounts receivable | 1,356,804,850.55 | 1,011,693,187.67 | |
| Financing of accounts receivable | |||
| Prepayments | 107,436,378.36 | 148,345,992.40 | |
| Premiums receivable | |||
| Reinsurance accounts receivable | |||
| Reinsurance contract reserves receivable | |||
| Other receivables | 197,101,668.61 | 95,586,738.83 | |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Financial assets purchased under resale agreements | |||
| Inventories | 1,414,007,319.05 | 1,463,127,856.96 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | 922,210,739.68 | ||
| Other current assets | 199,747,707.68 | 78,826,684.25 | |
| Total current assets | 13,380,595,806.01 | 11,242,946,432.31 | |
| Non-current assets: | |||
| Disbursement of loans and advances | |||
| Debt investment | |||
| Investment in other creditor's rights | |||
| Long-term receivables | |||
| Long-term equity investments | 10,518,308.44 | 15,543,367.11 | |
| Investment in other equity instruments | 369,234,888.05 | 310,310,218.60 | |
| Other non-current financial assets | 18,968,837.07 | 60,339,938.23 | |
| Investment properties | 1,298,575,277.50 | 1,334,165,016.86 | |
| Fixed assets | 6,688,959,701.47 | 6,648,220,021.88 | |
| Construction in progress | 1,430,244,831.22 | 347,455,504.19 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 143,259,299.38 | 24,976,072.05 | |
| Intangible assets | 1,060,621,773.48 | 1,064,392,442.29 | |
| Capitalized development expenditure | |||
| Goodwill | |||
| Long-term prepaid expenses | 100,563,403.28 | 79,715,027.09 | |
| Deferred income tax assets | 145,239,617.57 | 121,128,704.45 | |
| Other non-current assets | 3,964,225,445.14 | 2,143,540,620.17 | |
| Item | Notes | December 31, 2022 | December 31, 2021 |
| Total non-current assets | 15,230,411,382.60 | 12,149,786,932.92 | |
| TOTAL ASSETS | 28,611,007,188.61 | 23,392,733,365.23 | |
| Current liabilities: | |||
| Short-term loans | 4,584,695,003.58 | 2,389,126,170.93 | |
| Borrowings from central bank | |||
| Loans from other banks and other financial institutions | |||
| Trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 70,366,124.74 | 139,951,771.71 | |
| Accounts payable | 1,908,743,254.29 | 2,018,248,874.11 | |
| Receipts in advance | 364,393,984.51 | 885,811,485.23 | |
| Contract liabilities | 782,289,860.99 | 1,202,994,206.12 | |
| Financial assets sold under repurchase agreements | |||
| Absorption of deposits and interbank deposits | |||
| Receivings from vicariously traded securities | |||
| Receivings from vicariously sold securities | |||
| Employee benefits payable | 514,648,710.27 | 561,430,166.62 | |
| Taxes payable | 269,205,746.47 | 261,332,987.33 | |
| Other payables | 840,531,618.28 | 667,841,099.64 | |
| Including: Interest payable | |||
| Dividend payable | |||
| Handling charges and commissions payable | |||
| Accounts payable for reinsurance | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 241,730,653.70 | 13,286,652.37 | |
| Other current liabilities | 98,158,653.53 | 144,631,995.61 | |
| Total current liabilities | 9,674,763,610.36 | 8,284,655,409.66 | |
| Non-current liabilities: | |||
| Reserves for insurance contracts | |||
| Long-term loans | 5,122,020.57 | ||
| Debentures payable | 1,601,701,819.31 | ||
| Of which: preferred shares | |||
| Perpetual bond | |||
| Lease liabilities | 101,476,366.50 | 12,665,970.28 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Estimated liabilities | 43,770.00 | 59,715.00 | |
| Deferred income | 469,701,073.18 | 471,292,317.05 | |
| Deferred income tax liabilities | 134,412,062.70 | 96,615,466.91 | |
| Other non-current liabilities | 109,986,691.00 | 118,488,814.29 | |
| Total non-current liabilities | 2,422,443,803.26 | 699,122,283.53 | |
| TOTAL LIABILITIES | 12,097,207,413.62 | 8,983,777,693.20 | |
| Owners' equity (or stockholders' equity): | |||
| Paid-in capital (or equity capital) | 609,151,954.00 | 609,151,948.00 | |
| Other equity instruments | 424,351,185.44 | ||
| Of which: preferred shares | |||
| Perpetual bond | |||
| Item | Notes | December 31, 2022 | December 31, 2021 |
| Capital reserve | 4,360,144,069.29 | 4,361,363,807.54 | |
| Less: treasury stock | |||
| Other comprehensive income | 111,426,682.00 | 59,580,680.56 | |
| Special reserve | |||
| Surplus reserve | 304,575,977.00 | 304,575,974.00 | |
| General risk reserve | |||
| Undistributed profits | 10,698,497,383.97 | 9,074,118,319.30 | |
| Owners' equity (or shareholders' equity) attributable to the parent company | 16,508,147,251.70 | 14,408,790,729.40 | |
| Non-controlling interests | 5,652,523.29 | 164,942.64 | |
| Total owners' equity (or stockholders' equity) | 16,513,799,774.99 | 14,408,955,672.04 | |
| Total liabilities and owners' equity (or stockholders' equity) | 28,611,007,188.61 | 23,392,733,365.23 |
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accountinginstitution: Wang Huan
Balance Sheet of Parent Company
December 31, 2022Prepared by: Oppein Home Group Inc.
| Item | Notes | December 31, 2022 | December 31, 2021 |
| Current assets: | |||
| Cash and bank balances | 6,557,734,232.20 | 5,229,686,023.69 | |
| Trading financial assets | 300,071,506.85 | 971,205,892.83 | |
| Derivative financial assets | |||
| Notes receivable | 109,434,205.93 | 206,073,671.76 | |
| Accounts receivable | 1,213,959,851.27 | 952,202,553.97 | |
| Financing of accounts receivable | |||
| Prepayments | 67,726,582.85 | 59,493,828.98 | |
| Other receivables | 6,733,661,374.43 | 5,433,781,485.95 | |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Inventories | 308,854,288.51 | 405,727,821.66 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | 271,289,972.61 | ||
| Other current assets | 62,619,813.82 | 37,934,970.98 | |
| Total current assets | 15,625,351,828.47 | 13,296,106,249.82 | |
| Non-current assets: | |||
| Debt investment | |||
| Investment in other creditor's rights | |||
| Long-term receivables | |||
| Long-term equity investments | 1,135,214,838.43 | 726,910,984.40 | |
| Investment in other equity instruments | 1,015,000.00 | 1,015,000.00 | |
| Other non-current financial assets | |||
| Investment properties | 1,298,575,277.50 | 1,334,165,016.86 | |
| Fixed assets | 559,154,142.42 | 582,971,078.72 | |
| Construction in progress | 18,547,824.67 | 6,851,735.24 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 16,364,613.01 | 10,764,315.24 | |
| Intangible assets | 108,516,973.13 | 111,757,531.13 | |
| Capitalized development expenditure | |||
| Goodwill | |||
| Long-term prepaid expenses | 15,382,947.15 | 17,614,583.37 | |
| Deferred income tax assets | 45,622,433.68 | 37,265,949.79 | |
| Other non-current assets | 2,670,545,901.40 | 773,392,446.15 | |
| Total non-current assets | 5,868,939,951.39 | 3,602,708,640.90 | |
| TOTAL ASSETS | 21,494,291,779.86 | 16,898,814,890.72 | |
| Current liabilities: | |||
| Short-term loans | 738,607,920.25 | 1,015,126,170.93 | |
| Trading financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 2,885,404,773.60 | 1,251,055,572.70 | |
| Accounts payable | 870,752,585.97 | 790,524,285.54 | |
| Receipts in advance | 197,885,660.31 | 427,872,118.87 | |
| Contract liabilities | 373,876,519.62 | 577,505,868.61 | |
| Item | Notes | December 31, 2022 | December 31, 2021 |
| Employee benefits payable | 144,113,112.86 | 137,160,220.43 | |
| Taxes payable | 51,253,871.73 | 88,494,253.07 | |
| Other payables | 5,382,917,460.93 | 4,373,451,321.57 | |
| Including: Interest payable | |||
| Dividend payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 206,984,890.59 | 6,645,581.30 | |
| Other current liabilities | 48,849,360.04 | 69,444,917.14 | |
| Total current liabilities | 10,900,646,155.90 | 8,737,280,310.15 | |
| Non-current liabilities: | |||
| Long-term loans | |||
| Debentures payable | 1,601,701,819.31 | ||
| Of which: preferred shares | |||
| Perpetual bond | |||
| Lease liabilities | 8,953,901.07 | 4,790,224.81 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Estimated liabilities | 43,770.00 | 59,715.00 | |
| Deferred income | 53,562,327.24 | 75,137,379.17 | |
| Deferred income tax liabilities | 31,434,480.85 | 11,683,357.75 | |
| Other non-current liabilities | 109,986,691.00 | 118,488,814.29 | |
| Total non-current liabilities | 1,805,682,989.47 | 210,159,491.02 | |
| TOTAL LIABILITIES | 12,706,329,145.37 | 8,947,439,801.18 | |
| Owners' equity (or stockholders' equity): | |||
| Paid-in capital (or equity capital) | 609,151,954.00 | 609,151,948.00 | |
| Other equity instruments | 424,351,185.44 | ||
| Of which: preferred shares | |||
| Perpetual bond | |||
| Capital reserve | 4,347,036,614.94 | 4,348,256,353.19 | |
| Less: treasury stock | |||
| Other comprehensive income | |||
| Special reserve | |||
| Surplus reserve | 304,575,977.00 | 304,575,974.00 | |
| Undistributed profits | 3,102,846,903.11 | 2,689,390,814.35 | |
| Total owners' equity (or stockholders' equity) | 8,787,962,634.49 | 7,951,375,089.54 | |
| Total liabilities and owners' equity (or stockholders' equity) | 21,494,291,779.86 | 16,898,814,890.72 | |
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accountinginstitution: Wang Huan
Consolidated Profit StatementJanuary - December 2022
Unit: CNY
| Item | Notes | 2022 | 2021 |
| I. Revenue from operations | 22,479,503,474.56 | 20,441,604,591.50 | |
| Of which: operating income | 22,479,503,474.56 | 20,441,604,591.50 | |
| Interest income | |||
| Premium earned | |||
| Revenue from handling charges and commissions | |||
| II. Total operating cost | 19,432,679,782.07 | 17,430,601,165.22 | |
| Of which: operating cost | 15,374,184,716.14 | 13,978,340,522.59 | |
| Interest expense | |||
| Expenses from handling charges and commissions | |||
| Surrender value | |||
| Net amount of compensation payout | |||
| Net provisions for policy reserves | |||
| Policy dividend expenses | |||
| Reinsurance expenses | |||
| Tax and surcharge | 168,018,312.28 | 142,764,878.95 | |
| Selling expenses | 1,678,894,114.14 | 1,385,772,778.03 | |
| Administrative expenses | 1,335,732,876.37 | 1,131,445,694.80 | |
| R&D expense | 1,123,248,931.13 | 907,758,166.73 | |
| Financial expenses | -247,399,167.99 | -115,480,875.88 | |
| Of which: interest expenses | 152,770,445.92 | 132,807,862.73 | |
| Interest income | 380,881,220.85 | 266,051,753.30 | |
| Add: other income | 119,639,886.58 | 91,106,575.44 | |
| Return on investment ("-" for loss) | 23,426,338.55 | 20,576,163.13 | |
| Including: return on investment in associates and joint ventures | -1,525,058.67 | -6,461,645.66 | |
| Income from derecognition of financial assets measured at amortized cost | |||
| Exchange gains (loss expressed with "-") | |||
| Net exposure hedging income (loss expressed with "-") | |||
| Income from change in fair value ("-" for loss) | -33,764,275.51 | 52,292,566.27 | |
| Credit impairment loss (loss expressed with "-") | -99,787,553.98 | -108,305,951.75 | |
| Asset impairment loss (loss expressed with "-") | |||
| Asset disposal income (loss expressed with "-") | -267,179.73 | -6,782,217.94 | |
| III. Operating profit ("-" for loss) | 3,056,070,908.40 | 3,059,890,561.43 | |
| Add: non-operating income | 26,533,945.10 | 32,385,628.55 | |
| Less: non-operating expenses | 14,919,954.27 | 17,320,213.90 | |
| IV. Total profit ("-" for loss) | 3,067,684,899.23 | 3,074,955,976.08 | |
| Less: income tax expenses | 385,171,835.08 | 410,802,592.06 | |
| V. Net profit ("-" for net loss) | 2,682,513,064.15 | 2,664,153,384.02 | |
| (I) Classification by business continuity | |||
| 1. Net profit from continuing operations (net loss expressed with "-") | 2,682,513,064.15 | 2,664,153,384.02 | |
| 2. Net profit from discontinued operations (net loss expressed with "-") | |||
| Item | Notes | 2022 | 2021 |
| (II) Classification by ownership | |||
| 1. Net profit attributable to shareholders of the parent company (net loss expressed with -) | 2,688,425,483.50 | 2,665,588,441.38 | |
| 2. Minority shareholders' profit and loss (net loss expressed with "-") | -5,912,419.35 | -1,435,057.36 | |
| VI. Other comprehensive income - after tax | 53,815,494.61 | 29,623,688.67 | |
| (I) Net after tax of other comprehensive income attributable to the owner of the parent company | 53,815,494.61 | 29,623,688.67 | |
| 1. Other comprehensive income that cannot be reclassified into profits and losses | 50,342,531.78 | 29,903,289.16 | |
| (1) Remeasurement of changes in defined benefit plans | |||
| (2) Other comprehensive income that cannot be transferred to profit and loss under equity method | |||
| (3) Change in fair value of other equity instrument investments | 50,342,531.78 | 29,903,289.16 | |
| (4) Change in fair value of enterprise's own credit risk | |||
| 2. Other comprehensive income to be reclassified into profits and losses | 3,472,962.83 | -279,600.49 | |
| (1) Other comprehensive income of transferable profit and loss under equity method | |||
| (2) Change in fair value of other debt investments | |||
| (3) Amount of financial assets reclassified into other comprehensive income | |||
| (4) Provision for credit impairment of other debt investments | |||
| (5) Cash flow hedging reserve | |||
| (6) Translation difference of foreign currency financial statements | 3,472,962.83 | -279,600.49 | |
| (7) Other | |||
| (II) Net of tax of other comprehensive income attributable to minority shareholders | |||
| VII. Total comprehensive income | 2,736,328,558.76 | 2,693,777,072.69 | |
| (I) Total comprehensive income attributable to owners of the parent company | 2,742,240,978.11 | 2,695,212,130.05 | |
| (II) Total comprehensive income attributable to minority shareholders | -5,912,419.35 | -1,435,057.36 | |
| VIII. Earnings per share (EPS): | |||
| (I) Basic earnings per share (CNY/share) | 4.41 | 4.40 | |
| (II) Diluted earnings per share (CNY/share) | 4.38 | 4.40 | |
In the event of a business merger under the same control in the current period, the net profit realized by the merged partybefore the merger is CNY 0.00, and the net profit realized by the combined party in the previous period is CNY 0.00.Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accountinginstitution: Wang Huan
Profit Statement of Parent CompanyJanuary - December 2022
Unit: CNY
| Item | Notes | 2022 | 2021 |
| I. Operating revenue | 11,328,325,920.48 | 10,741,019,908.28 | |
| Less: operating cost | 9,026,484,085.30 | 8,335,436,524.34 | |
| Tax and surcharge | 48,513,540.77 | 41,081,445.16 | |
| Selling expenses | 867,008,084.54 | 653,092,411.77 | |
| Administrative expenses | 260,061,063.81 | 246,076,265.62 | |
| R&D expense | 404,196,243.18 | 340,632,238.04 | |
| Financial expenses | -208,351,097.19 | -80,190,047.66 | |
| Of which: interest expenses | 111,591,807.97 | 84,369,868.45 | |
| Interest income | 291,122,527.61 | 179,494,407.47 | |
| Add: other income | 20,602,877.38 | 16,074,419.51 | |
| Return on investment ("-" for loss) | 704,642,873.65 | -3,745,892.24 | |
| Of which: return on investment in associates and joint ventures | -4,149,938.51 | -6,461,645.66 | |
| Income from derecognition of financial assets measured at amortized cost | |||
| Net exposure hedging income (loss expressed with "-") | |||
| Income from change in fair value ("-" for loss) | 71,506.85 | 15,911,156.14 | |
| Credit impairment loss (loss expressed with "-") | -76,213,355.39 | -103,599,879.64 | |
| Asset impairment loss (loss expressed with "-") | |||
| Asset disposal income (loss expressed with "-") | 73,596.50 | 265,524.11 | |
| II. Operating profit (loss expressed with "-") | 1,579,591,499.06 | 1,129,796,398.89 | |
| Add: non-operating income | 14,180,566.07 | 22,062,774.96 | |
| Less: non-operating expenses | 5,492,773.23 | 8,553,000.88 | |
| III. Total profits (total losses expressed with "-") | 1,588,279,291.90 | 1,143,306,172.97 | |
| Less: income tax expenses | 108,807,291.14 | 157,970,798.95 | |
| IV. Net profit (net loss expressed with "-") | 1,479,472,000.76 | 985,335,374.02 | |
| (I) Net profit from continuing operations (net loss expressed with "-") | 1,479,472,000.76 | 985,335,374.02 | |
| (II) Net profit from discontinued operations (net loss expressed with "-") | |||
| V. Net of tax of other comprehensive income | |||
| (I) Other comprehensive income not reclassified into profit or loss subsequently | |||
| 1. Remeasure changes in defined benefit plans | |||
| 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method | |||
| 3. Change in fair value of other equity instrument investments | |||
| 4. Changes in fair value of the Company's own credit risk | |||
| (II) Other comprehensive income that will be reclassified into profit or loss | |||
| 1. Other comprehensive income that |
| Item | Notes | 2022 | 2021 |
| can be converted to profit or loss under the equity method | |||
| 2. Change in fair value of other debt investments | |||
| 3. Amount of financial assets reclassified into other comprehensive income | |||
| 4. Provision for credit impairment of other creditor's right investment | |||
| 5. Cash flow hedging reserve | |||
| 6. Translation difference of foreign currency financial statements | |||
| 7. Other | |||
| VI. Total comprehensive income | 1,479,472,000.76 | 985,335,374.02 | |
| VII. Earnings per share: | |||
| (I) Basic earnings per share (CNY/share) | |||
| (II) Diluted earnings per share (CNY/share) | |||
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accountinginstitution: Wang Huan
Consolidated Cash Flow StatementJanuary - December 2022
Unit: CNY
| Item | Notes | 2022 | 2021 |
| I. Cash flows from operating activities: | |||
| Cash received from sale of goods or rendering of services | 24,493,758,108.70 | 24,453,251,450.26 | |
| Net increase in deposits from customers and deposits in banks and other financial institutions | |||
| Net increase in borrowings from central bank | |||
| Net increase in loans from other financial institutions | |||
| Cash received from receiving insurance premiums of original insurance contracts | |||
| Net cash received from reinsurance business | |||
| Net increase in deposits and investments from policyholders | |||
| Cash received from interest, handling charges and commissions | |||
| Net increase in loans from banks and other financial institutions | |||
| Net capital increase in repurchase business | |||
| Net cash received from vicariously traded securities | |||
| Tax refunds | 21,099,815.48 | ||
| Cash received relating to other operating activities | 488,458,072.86 | 506,542,876.91 | |
| Sub-total of cash inflow from operating activities | 25,003,315,997.04 | 24,959,794,327.17 | |
| Cash paid to purchase goods or accept labor services | 15,650,359,672.31 | 14,937,583,277.60 | |
| Net increase in loans and advances to customers | |||
| Net increase in deposits in central bank and other banks and financial institutions | |||
| Cash paid for original insurance contract claims | |||
| Net increase in loans to banks and other financial institutions | |||
| Cash paid for interest, handling charges and commissions | |||
| Cash paid for policy dividends | |||
| Cash paid to and for employees | 3,805,430,961.82 | 3,254,598,408.64 | |
| Taxes and fees paid | 1,419,087,955.16 | 1,302,770,073.53 | |
| Other cash payments relating to operating activities | 1,718,677,240.20 | 1,418,875,897.01 | |
| Sub-total of cash outflow from operating activities | 22,593,555,829.49 | 20,913,827,656.78 | |
| Net cash flows from operating activities | 2,409,760,167.55 | 4,045,966,670.39 | |
| II. Cash flows from investing activities: | |||
| Cash received from disposal of | 7,048,238,715.44 | 3,320,615,263.32 | |
| Item | Notes | 2022 | 2021 |
| investments | |||
| Cash received from returns on investments | 31,543,690.29 | 38,736,831.64 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long term assets | 10,996,064.30 | 3,463,541.11 | |
| Net cash received from the disposal of subsidiaries and other business entities | |||
| Other cash received relating to investing activities | 91,497,876.71 | 43,398,342.05 | |
| Sub-total of cash inflow from investing activities | 7,182,276,346.74 | 3,406,213,978.12 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 2,257,299,834.51 | 1,234,793,995.85 | |
| Cash paid to acquire investments | 11,937,991,000.00 | 4,236,550,000.00 | |
| Net increase in pledge loans | |||
| Net cash paid to acquire subsidiaries and other business units | 33,160,265.17 | ||
| Other cash paid relating to investing activities | 100,000,000.00 | ||
| Sub-total of cash outflow from investing activities | 14,328,451,099.68 | 5,471,343,995.85 | |
| Net cash flows from investing activities | -7,146,174,752.94 | -2,065,130,017.73 | |
| III. Cash flows from financing activities: | |||
| Cash received from capital contribution | 2,006,400,871.32 | 1,600,000.00 | |
| Of which: cash received by the subsidiary from absorbing the investments of minority stockholders | 11,400,000.00 | 1,600,000.00 | |
| Cash received from borrowings | 6,473,997,889.26 | 3,675,893,338.14 | |
| Other cash received relating to financing activities | 3,218,348.22 | 481,821.60 | |
| Sub-total of cash inflow from financing activities | 8,483,617,108.80 | 3,677,975,159.74 | |
| Cash paid for settlement of debt | 4,071,309,737.10 | 2,920,830,972.93 | |
| Cash payments for interest expenses and distribution of dividends or profits | 1,229,680,952.88 | 843,199,431.22 | |
| Of which: dividends and profits paid to minority stockholders by the subsidiary | |||
| Other cash payments relating to financing activities | 197,310,244.15 | 100,981,922.25 | |
| Sub-total of cash flows from financing activities | 5,498,300,934.13 | 3,865,012,326.40 | |
| Net cash flows from financing activities | 2,985,316,174.67 | -187,037,166.66 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | 39,711,066.92 | -10,450,359.35 | |
| V. Net increase in cash and cash equivalents | -1,711,387,343.80 | 1,783,349,126.65 | |
| Add: opening balance of cash and cash equivalents | 5,341,817,438.33 | 3,558,468,311.68 | |
| VI. Closing balance of cash and cash equivalents | 3,630,430,094.53 | 5,341,817,438.33 | |
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting
institution: Wang Huan
Cash Flow Statement of Parent Company
January - December 2022
Unit: CNY
| Item | Notes | 2022 | 2021 |
| I. Cash flows from operating activities: | |||
| Cash received from sale of goods or rendering of services | 12,088,681,859.20 | 11,890,961,591.54 | |
| Tax refunds | |||
| Cash received relating to other operating activities | 216,180,891.80 | 2,216,632,556.05 | |
| Sub-total of cash inflow from operating activities | 12,304,862,751.00 | 14,107,594,147.59 | |
| Cash paid to purchase goods or accept labor services | 8,090,005,136.27 | 8,337,870,244.46 | |
| Cash paid to and for employees | 828,168,197.12 | 703,592,135.61 | |
| Taxes and fees paid | 478,460,499.69 | 453,102,031.63 | |
| Other cash payments relating to operating activities | 1,077,760,152.58 | 603,108,750.87 | |
| Sub-total of cash outflow from operating activities | 10,474,393,985.66 | 10,097,673,162.57 | |
| Net cash flows from operating activities | 1,830,468,765.34 | 4,009,920,985.02 | |
| II. Cash flows from investing activities: | |||
| Cash received from disposal of investments | 5,771,620,536.68 | 1,938,615,263.32 | |
| Cash received from returns on investments | 715,939,088.46 | 6,028,835.62 | |
| Net cash received from the disposal of fixed assets, intangible assets and other long term assets | 9,682,417.77 | 6,995,814.43 | |
| Net cash received from the disposal of subsidiaries and other business entities | |||
| Other cash received relating to investing activities | 91,497,876.71 | 43,398,342.05 | |
| Sub-total of cash inflow from investing activities | 6,588,739,919.62 | 1,995,038,255.42 | |
| Cash paid to acquire fixed assets, intangible assets and other long-term assets | 169,420,688.89 | 433,805,436.45 | |
| Cash paid to acquire investments | 10,900,841,000.00 | 2,646,100,000.00 | |
| Net cash paid to acquire subsidiaries and other business units | |||
| Other cash paid relating to investing activities | 100,000,000.00 | ||
| Sub-total of cash outflow from investing activities | 11,170,261,688.89 | 3,079,905,436.45 | |
| Net cash flows from investing activities | -4,581,521,769.27 | -1,084,867,181.03 | |
| III. Cash flows from financing activities: | |||
| Cash received from capital contribution | 1,995,000,871.32 | ||
| Cash received from borrowings | 2,627,997,889.26 | 2,301,893,338.14 | |
| Other cash received relating to financing activities | |||
| Sub-total of cash inflow from financing activities | 4,622,998,760.58 | 2,301,893,338.14 | |
| Cash paid for settlement of debt | 2,696,576,242.49 | 2,122,830,972.93 | |
| Cash payments for interest expenses | 1,150,984,625.97 | 793,484,789.52 | |
| Item | Notes | 2022 | 2021 |
| and distribution of dividends or profits | |||
| Other cash payments relating to financing activities | 123,016,539.83 | 72,676,433.65 | |
| Sub-total of cash flows from financing activities | 3,970,577,408.29 | 2,988,992,196.10 | |
| Net cash flows from financing activities | 652,421,352.29 | -687,098,857.96 | |
| IV. Effect of exchange rate changes on cash and cash equivalents | 39,495,530.91 | -10,130,340.77 | |
| V. Net increase in cash and cash equivalents | -2,059,136,120.73 | 2,227,824,605.26 | |
| Add: opening balance of cash and cash equivalents | 4,061,868,195.49 | 1,834,043,590.23 | |
| VI. Closing balance of cash and cash equivalents | 2,002,732,074.76 | 4,061,868,195.49 |
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accountinginstitution: Wang Huan
Consolidated Statement of Changes in Equity
January - December 2022
Unit: CNY
| Item | 2022 | ||||||||||||||
| Owners' equity attributable to the parent | Non-controlling interests | Total owners' equity | |||||||||||||
| Paid-in capital (or equity capital) | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference shares | Perpetual bond | Other | |||||||||||||
| I. Closing balance of previous year | 609,151,948.00 | 4,361,363,807.54 | 59,580,680.56 | 304,575,974.00 | 9,074,118,319.30 | 14,408,790,729.40 | 164,942.64 | 14,408,955,672.04 | |||||||
| Add: Change in accounting policy | |||||||||||||||
| Correction of previous errors | |||||||||||||||
| A business combination involving enterprises under common control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 609,151,948.00 | 4,361,363,807.54 | 59,580,680.56 | 304,575,974.00 | 9,074,118,319.30 | 14,408,790,729.40 | 164,942.64 | 14,408,955,672.04 | |||||||
| III. | 6.00 | 424,351, | - | 51,846,0 | 3.00 | 1,624,379,0 | 2,099,356,5 | 5,487,58 | 2,104,844,1 | ||||||
| Amount increase/decrease of the current period ("-" for decreases) | 185.44 | 1,219,738.25 | 01.44 | 64.67 | 22.30 | 0.65 | 02.95 | ||||||||
| (I) Total comprehensive income | 53,815,494.61 | 2,688,425,483.50 | 2,742,240,978.11 | -5,912,419.35 | 2,736,328,558.76 | ||||||||||
| (II) Contribution and withdrawal of capital by owners | 6.00 | 424,351,185.44 | -1,219,738.25 | 423,131,453.19 | 11,400,000.00 | 434,531,453.19 | |||||||||
| 1. Common stock contributed by owners | 6.00 | 424,351,185.44 | 865.32 | 424,352,056.76 | 11,400,000.00 | 435,752,056.76 | |||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Share-based payment recognized in owners' equity | -1,220,603.57 | -1,220,603.57 | -1,220,603.57 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distributio | 3.00 | -1,066,015,9 | -1,066,015,9 | -1,066,015,9 |
| n | 12.00 | 09.00 | 09.00 | ||||||||||||
| 1. Provision for surplus reserve | 3.00 | -3.00 | |||||||||||||
| 2. Withdrawal of general risk reserves | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -1,066,015,909.00 | -1,066,015,909.00 | -1,066,015,909.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carryover of owner's equity | -1,969,493.17 | 1,969,493.17 | |||||||||||||
| 1. Capital surplus transfer to capital (or equity capital) | |||||||||||||||
| 2. Surplus reserve transfer to capital (or equity capital) | |||||||||||||||
| 3. Surplus reserve offsetting losses |
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Retained income carried forward from other comprehensive income | -1,969,493.17 | 1,969,493.17 | |||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdraw of the current period | |||||||||||||||
| 2. Use of the current period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of current period | 609,151,954.00 | 424,351,185.44 | 4,360,144,069.29 | 111,426,682.00 | 304,575,977.00 | 10,698,497,383.97 | 16,508,147,251.70 | 5,652,523.29 | 16,513,799,774.99 |
| Item | 2021 | ||||||||||||||
| Owners' equity attributable to the parent | Non-controlling interests | Total owners' equity | |||||||||||||
| Paid-in capital (or equity capital) | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profits | Other | Sub-total | |||||
| Preference shares | Perpetual bond | Other | |||||||||||||
| I. Closing balance of previous year | 601,531,902.00 | 112,041,743.43 | 3,743,673,599.49 | 29,956,991.89 | 288,523,469.29 | 7,149,700,284.23 | 11,925,427,990.33 | 11,925,427,990.33 | |||||||
| Add: error correction in the early stage of accounting policy change | |||||||||||||||
| A business combination involving enterprises under common control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 601,531,902.00 | 112,041,743.43 | 3,743,673,599.49 | 29,956,991.89 | 288,523,469.29 | 7,149,700,284.23 | 11,925,427,990.33 | 11,925,427,990.33 | |||||||
| III. Amount increase/decrease of the current period ("-" | 7,620,046.00 | -112,041,743.43 | 617,690,208.05 | 29,623,688.67 | 16,052,504.71 | 1,924,418,035.07 | 2,483,362,739.07 | 164,942.64 | 2,483,527,681.71 | ||||||
| for decreases) | |||||||||||||||
| (I) Total comprehensive income | 29,623,688.67 | 2,665,588,441.38 | 2,695,212,130.05 | -1,435,057.36 | 2,693,777,072.69 | ||||||||||
| (II) Contribution and withdrawal of capital by owners | 7,620,046.00 | 617,690,208.05 | 625,310,254.05 | 1,600,000.00 | 626,910,254.05 | ||||||||||
| 1. Common stock contributed by owners | 7,620,046.00 | 605,954,751.65 | 613,574,797.65 | 1,600,000.00 | 615,174,797.65 | ||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Share-based payment recognized in owners' equity | 11,735,456.40 | 11,735,456.40 | 11,735,456.40 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | 16,052,504.71 | -741,170,406.31 | -725,117,901.60 | -725,117,901.60 | |||||||||||
| 1. Provision for surplus reserve | 16,052,504.71 | -16,052,504.71 |
| 2. Withdrawal of general risk reserves | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -725,117,901.60 | -725,117,901.60 | -725,117,901.60 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carryover of owner's equity | |||||||||||||||
| 1. Capital surplus transfer to capital (or equity capital) | |||||||||||||||
| 2. Surplus reserve transfer to capital (or equity capital) | |||||||||||||||
| 3. Surplus reserve offsetting losses | |||||||||||||||
| 4. Changes in defined benefit plans carried |
| forward to retained earnings | |||||||||||||||
| 5. Retained income carried forward from other comprehensive income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdraw of the current period | |||||||||||||||
| 2. Use of the current period | |||||||||||||||
| (VI) Others | -112,041,743.43 | -112,041,743.43 | -112,041,743.43 | ||||||||||||
| IV. Ending balance of current period | 609,151,948.00 | 4,361,363,807.54 | 59,580,680.56 | 304,575,974.00 | 9,074,118,319.30 | 14,408,790,729.40 | 164,942.64 | 14,408,955,672.04 |
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting institution: Wang Huan
Statement of Changes in Equity of the Parent Company
January - December 2022
Unit: CNY
| Item | 2022 | ||||||||||
| Paid-in capital (or equity capital) | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Total owners' equity | |||
| Preference shares | Perpetual bond | Other | |||||||||
| I. Closing balance of previous year | 609,151,948.00 | 4,348,256,353.19 | 304,575,974.00 | 2,689,390,814.35 | 7,951,375,089.54 | ||||||
| Add: Change in accounting policy | |||||||||||
| Correction of previous errors | |||||||||||
| Other | |||||||||||
| II. Balance at the beginning of this year | 609,151,948.00 | 4,348,256,353.19 | 304,575,974.00 | 2,689,390,814.35 | 7,951,375,089.54 | ||||||
| III. Amount increase/decrease of the current period ("-" for decreases) | 6.00 | - | - | 424,351,185.44 | -1,219,738.25 | - | - | - | 3.00 | 413,456,088.76 | 836,587,544.95 |
| (I) Total comprehensive income | 1,479,472,000.76 | 1,479,472,000.76 | |||||||||
| (II) Contribution and withdrawal of capital by owners | 6.00 | 424,351,185.44 | -1,219,738.25 | 423,131,453.19 | |||||||
| 1. Common stock | 6.00 | 424,351,185.44 | 865.32 | 424,352,056.76 | |||||||
| contributed by owners | |||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||
| 3. Share-based payment recognized in owners' equity | -1,220,603.57 | -1,220,603.57 | |||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | 3.00 | -1,066,015,912.00 | -1,066,015,909.00 | ||||||||
| 1. Provision for surplus reserve | 3.00 | -3.00 | |||||||||
| 2. Distribution to owners (or shareholders) | -1,066,015,909.00 | -1,066,015,909.00 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal carryover of owner's equity | |||||||||||
| 1. Capital surplus transfer to capital (or equity capital) | |||||||||||
| 2. Surplus reserve transfer to capital (or equity capital) | |||||||||||
| 3. Surplus reserve offsetting losses | |||||||||||
| 4. Changes in defined benefit plans carried |
| forward to retained earnings | |||||||||||
| 5. Retained income carried forward from other comprehensive income | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Withdraw of the current period | |||||||||||
| 2. Use of the current period | |||||||||||
| (VI) Others | |||||||||||
| IV. Ending balance of current period | 609,151,954.00 | 424,351,185.44 | 4,347,036,614.94 | 304,575,977.00 | 3,102,846,903.11 | 8,787,962,634.49 |
| Item | 2021 | ||||||||||
| Paid-in capital (or equity capital) | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Total owners' equity | |||
| Preference shares | Perpetual bond | Other | |||||||||
| I. Closing balance of previous year | 601,531,902.00 | 112,041,743.43 | 3,730,566,145.14 | 288,523,469.29 | 2,445,225,846.64 | 7,177,889,106.50 | |||||
| Add: Change in accounting policy | |||||||||||
| Correction of previous errors | |||||||||||
| Other | |||||||||||
| II. Balance at the beginning of this year | 601,531,902.00 | 112,041,743.43 | 3,730,566,145.14 | 288,523,469.29 | 2,445,225,846.64 | 7,177,889,106.50 | |||||
| III. Amount increase/decrease of the current period ("-" for decreases) | 7,620,046.00 | -112,041,743.43 | 617,690,208.05 | 16,052,504.71 | 244,164,967.71 | 773,485,983.04 | |||||
| (I) Total comprehensive income | 985,335,374.02 | 985,335,374.02 | |||||||||
| (II) Contribution and withdrawal of capital by owners | 7,620,046.00 | 617,690,208.05 | 625,310,254.05 | ||||||||
| 1. Common stock contributed by owners | 7,620,046.00 | 605,954,751.65 | 613,574,797.65 | ||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||
| 3. Share-based payment recognized in owners' equity | 11,735,456.40 | 11,735,456.40 | |||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | 16,052,504.71 | -741,170,406.31 | -725,117,901.60 | ||||||||
| 1. Provision for surplus reserve | 16,052,504.71 | -16,052,504.71 | |||||||||
| 2. Distribution to owners (or shareholders) | -725,117,901.60 | -725,117,901.60 |
| 3. Others | |||||||||||
| (IV) Internal carryover of owner's equity | |||||||||||
| 1. Capital surplus transfer to capital (or equity capital) | |||||||||||
| 2. Surplus reserve transfer to capital (or equity capital) | |||||||||||
| 3. Surplus reserve offsetting losses | |||||||||||
| 4. Changes in defined benefit plans carried forward to retained earnings | |||||||||||
| 5. Retained income carried forward from other comprehensive income | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Withdraw of the current period | |||||||||||
| 2. Use of the current period | |||||||||||
| (VI) Others | -112,041,743.43 | -112,041,743.43 |
| IV. Ending balance of current period | 609,151,948.00 | 4,348,256,353.19 | 304,575,974.00 | 2,689,390,814.35 | 7,951,375,089.54 |
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting institution: Wang Huan
III. Basic information of the Company
1. Company overview
√ Applicable □ Not applicable
Oppein Home Group Inc. (hereinafter referred to as the "company"), formerly known as Guangzhou Kangjie KitchenEquipment Co., Ltd., was invested and established by Hu Xuhui and Yao Liangbai with monetary funds of CNY 450,000and CNY 50,000 respectively on July 1, 1994.In May 1997, Yao Liangsong increased his capital by CNY 1 million with monetary funds, and the registered capitalof the Company was changed to CNY 1.5 million after the capital increase; in October 1997, Hu Xuhui transferred CNY350,000 and CNY 100,000 of his CNY 450,000 shares to Yao Liangsong and Yao Liangbai respectively. After this equitychange, Yao Liangsong and Yao Liangbai held 90% and 10% respectively.From 2001 to 2011, Yao Liangsong and Yao Liangbai increased their capital by CNY 88.65 million and CNY 9.85million respectively, and the registered capital after the capital increase was CNY 100 million, of which Yao Liangsonginvested CNY 90 million, accounting for 90.00% of the registered capital of the Company, and Yao Liangbai investedCNY 10 million, accounting for 10.00% of the registered capital of the Company. The name of the Company was changedto Guangdong Oppein Home Group Co., Ltd., with the registration number of enterprise legal person business license of440101000002519.In October 2013, according to the approved sponsor agreement and articles of association, Yao Liangsong and YaoLiangbai, the former shareholders, were the sponsors to reorganize Guangdong Oppein Home Group Co., Ltd. into a jointstock limited company. The Company converted audited net assets as of August 31, 2013 into 320 million shares, with apar value of CNY 1 per share. After the change, the registered capital of the Company was CNY 320 million, of whichYao Liangsong contributed CNY 288 million, accounting for 90.00% of the Company's registered capital, and YaoLiangbai contributed CNY 32 million, accounting for 10.00% of the Company's registered capital.
In November 2013, other 111 natural persons including Yao Liangbai increased their capital by CNY 23,503,096.00,and the registered capital after the increase was CNY 343,503,096.00. Including: Yao Liangsong contributed CNY288,000,000.00, accounting for 83.8420% of the registered capital after the change; Yao Liangbai contributed CNY36,841,654.00, accounting for 10.7253% of the registered capital after the change; other 110 natural persons includingTan Qinxing contributed CNY 18,661,442.00, accounting for 5.4327% of the registered capital after the change.
In December 2013, Hongxing Xizhao Investment Co., Ltd., Ganzhou Tianou Investment Partnership (LimitedPartnership) and Beijing MidSky Investment Management Co., Ltd. increased their capital by CNY 18,641,697.00, CNY7,886,872.00 and CNY 3,549,447.00 respectively, and the cumulative paid in capital after the increase was CNY373,581,112.00. Including: Yao Liangsong contributed CNY 288,000,000.00, accounting for 77.0917% of the registeredcapital after the change; Yao Liangbai contributed CNY 36,841,654.00, accounting for 9.8618% of the registered capitalafter the change; Hongxing Xizhao Investment Co., Ltd. contributed CNY 18,641,697.00, accounting for 4.9900% of theregistered capital after the change; Ganzhou Tianou Investment Partnership (Limited Partnership) contributed CNY7,886,872.00, accounting for 2.1112% of the registered capital after the change; Beijing MidSky Investment ManagementCo., Ltd. contributed CNY 3,549,447.00, accounting for 0.9501% of the registered capital after the change; 110 naturalpersons including Tan Qinxing contributed CNY 18,661,442.00, accounting for 4.9952% of the registered capital afterthe change.
In March 2017, according to the Reply on the Approval of the Initial Public Offering of Shares of Oppein HomeGroup Inc. issued by the CSRC (ZJXK [2017] No. 311), the Company publicly issued 41,510,000.00 CNY ordinaryshares (A shares) to the public, and the Company's share capital was changed to 415,091,112.00 shares after issuance.
In June 2017, according to the resolution of the general meeting of shareholders and the resolution of the board ofdirectors of the Company, the Company granted 5,505,352.00 shares of CNY restricted shares to 835 equity incentivetargets, and the share capital of the Company was changed to 420,596,464.00 shares after the grant.
In June 2018, the Company repurchased and cancelled 313,010 restricted shares granted to 48 resignation incentivetargets but not yet lifted the restrictions on sales, and completed the registration procedures for industrial and commercialchanges to reduce registered capital in October 2018. After the completion of this repurchase, the Company's share capitalwas changed to 420,283,454.00 shares.
In January 2019, the Company repurchased and cancelled 91,903 restricted shares granted to 33 resignation incentivetargets but not yet lifted the restrictions on sales, and completed the registration procedures for industrial and commercialchanges to reduce registered capital in March 2019. After the completion of this repurchase, the Company's share capitalwas changed to 420,191,551.00 shares.
In May 2019, the Company repurchased and cancelled 21,386 restricted shares granted to 8 resignation incentivetargets but not yet lifted the restrictions on sales, and completed the registration procedures for industrial and commercial
changes to reduce registered capital in November 2019. After the completion of this repurchase, the Company's sharecapital was changed to 420,170,165.00 shares.
In August 2019, with the approval of "ZJXK [2019] No. 475" of the CSRC, the Company publicly issued 14.95million convertible corporation bonds with a total issuance amount of CNY 1.495 billion. The "Oppein convertible bonds"issued this time can be converted into shares from February 24, 2020. In 2020, a total of 13,292,696.00 convertible bondswere converted into shares.In July 2020, according to the profit distribution plan for 2019 deliberated and approved by the general meeting ofshareholders of the Company, the Company increased 0.4 shares per share and 168,069,041.00 shares to all shareholdersbased on the total capital stock of the Company before the implementation of the profit distribution plan of 420,172,603shares (including the number of convertible bonds converted before the implementation of the profit distribution plan).At the end of 2020, after the Company's equity distribution and convertible bond conversion, the Company's sharecapital was changed to 601,531,902.00 shares.In 2021, the Company's convertible bonds were converted into 7,620,046 shares, and after the conversion, theCompany's total share capital increased to 609,151,948.00 shares.
In July 2021, according to the resolution of the general meeting of shareholders and the resolution of the board ofdirectors of the Company, the Company granted stock options to the incentive targets. In September 2022, the incentivetargets exercised 6 shares, and the Company's share capital was changed to 609,151,954.00 shares after exercise.
2. Scope of consolidated financial statements
√ Applicable □ Not applicable
The Company includes all subsidiaries in the scope of consolidated financial statements. In 2022, 12 newlyestablished subsidiaries of the Company were included in the scope of consolidated financial statements from the date ofestablishment, one subsidiary was acquired and included in the scope of consolidated financial statements from the dateof acquisition, and there was no cancellation of subsidiaries in the current period. For details, see "Section X Financialreport VIII. Change of consolidation scope" and "Section X Financial report IX. Rights and interests in other entities".IV. Basis of preparation of financial statements
1. Basis of preparation
On the basis of continuous operation, according to the actual transactions and events, the Company shall recognizeand measure them in accordance with the Accounting Standards for Business Enterprises - Basic Standards and otherspecific accounting standards, application guidelines, interpretation of standards and other relevant provisions (hereinaftercollectively referred to as the accounting standards for business enterprises). On this basis, the financial statements areprepared in accordance with the provisions of the Rules for the Compilation and Reporting of Information Disclosure ofCompanies Offering Securities Publicly No.15 - General Provisions on Financial Reporting (revised in 2014) of theCSRC.
2. Going concern
√ Applicable □ Not applicable
The Company has the ability to continue as a going concern for at least 12 months from the end of the reportingperiod, and there are no major events affecting the ability to continue as a going concern.V. Significant accounting policies and accounting estimatesTips on specific accounting policies and accounting estimates:
√ Applicable □ Not applicable
The Company determines the specific accounting policies and accounting estimates according to the actualproduction and operation characteristics, which are mainly reflected in Section X Financial report V. Bad debt provisionmethod of receivables in important accounting policies and estimates, inventory valuation and provision for depreciation,depreciation of fixed assets and amortization of intangible assets, revenue recognition, etc.
1. Statement on Compliance with Accounting Standards for Business Enterprises
The financial statements prepared by the Company conform to the requirements of the accounting standards forbusiness enterprises and truly and completely reflect the financial situation andoperating results, changes in shareholders' equity, cash flow and other information.
2. Accounting period
The fiscal year of the Company is from January 1 to December 31 of the Gregorian calendar.
3. Operating cycle
√ Applicable □ Not applicable
The Company takes 12 months as a business cycle.
4. Functional currency
The Company's bookkeeping V base currency is CNY.
5. Accounting treatment methods of business merger under the common control and not under the commoncontrol
√ Applicable □ Not applicable
1. Business merger under the same control: The assets and liabilities obtained by the Company in the business mergershall be measured according to the book value of the assets and liabilities of the merged party (including the goodwillformed by the acquisition of the merged party by the final controller) in the consolidated financial statements of the finalcontroller on the merger date. The difference between the book value of net assets obtained in the merger and the bookvalue of the merger consideration paid (or the total face value of the shares issued) shall be adjusted for the capitalpremium or equity premium in the capital reserve. If the capital premium or equity premium in the capital reserve isinsufficient to offset, the retained income shall be adjusted.
2. Business merger not under the same control: On the acquisition date, the Company shall measure the assets paid,liabilities incurred or assumed as the consideration for business combination at fair value, and the difference between thefair value and its book value shall be included in the current profits and losses. The Company recognizes the differencebetween the merger cost and the fair value share of the identifiable net assets of the acquiree obtained in the merger asgoodwill; the difference between the merger cost and the fair value share of the identifiable net assets of the acquireeobtained in the merger shall be reviewed for the fair value of the assets and liabilities obtained in the merger, the non-cash assets as merger consideration or the equity securities issued. The review results show that the fair value of theidentifiable assets and liabilities determined is appropriate. The difference between the cost of business merger and thefair value share of the identifiable net assets obtained by the acquiree shall be included in the non-operating income ofthe current period of merger.
The business merger not under the same control is realized step by step through multiple transactions, and the mergercost is the sum of the consideration paid on the acquisition date and the fair value of the equity of the acquiree held beforethe acquisition date on the acquisition date; the equity of the acquiree held before the acquisition date shall be re measuredat the fair value on the acquisition date, and the difference between the fair value and its book value shall be included inthe current investment income. Other comprehensive income of the long-term equity investment of the acquiree heldbefore the acquisition date under the equity method shall be accounted for on the same basis as the direct disposal ofrelated assets or liabilities by the investee. Changes in shareholders' equity other than net profit and loss, othercomprehensive income and profit distribution shall be transferred to the current profits and losses on the acquisition date.For other equity instrument investments held by the acquiree before the acquisition date, the changes in fair value of theequity instrument investment accumulated in other comprehensive income before the acquisition date are transferred toretained profits and losses.
3. Treatment of related expenses in business merger: Intermediary expenses such as audit, legal services, evaluationand consultation and other related management expenses incurred in business merger shall be included in the currentprofits and losses when incurred; the transaction costs of equity securities or debt securities issued as merger considerationare included in the initial recognition amount of equity securities or debt securities.
6. Preparation method for the consolidated financial statements
√ Applicable □ Not applicable
1. Scope of preparation of consolidated statements
The scope of consolidation of the consolidated financial statements is determined on the basis of control, includingnot only subsidiaries determined based on voting rights (or similar rights) themselves or in combination with otherarrangements, but also structured entities determined based on one or more contractual arrangements. Control means theinvestor has the power over the investee and enjoys the variable return through participating in activities related to theinvestee, and has the ability to the investor's return by using the power over the investee.
2. Procedures for consolidation
The consolidated financial statements are prepared on the basis of the financial statements of the Company and itssubsidiaries and in accordance with other relevant information.
The Company unifies the accounting policies and accounting periods adopted by subsidiaries to make the accountingpolicies and accounting periods adopted by subsidiaries consistent with the Company. In the preparation of theconsolidated financial statements, the principle of materiality shall be followed to offset the internal transactions, intra-transactions and equity investment projects between the parent company and subsidiaries, and between subsidiaries andsubsidiaries.The equity and profits and losses attributable to minority shareholders of subsidiaries are listed separately under theowner's equity item in the consolidated balance sheet and the net profit item in the consolidated income statement. If thecurrent losses shared by a minority shareholder of a subsidiary exceed the balances arising from the shares enjoyed bythe minority shareholder in the owners' equity of the subsidiary at the beginning of the period, minority equity will beoffset accordingly.
(1) Increase subsidiaries or business
During the reporting period, the opening balance of the consolidated balance sheet shall be adjusted when theconsolidated balance sheet is prepared for subsidiaries or businesses increased due to business merger under the samecontrol; when preparing the profit statement, the income, expenses and profits of the subsidiary or business from thebeginning of the current period to the end of the reporting period shall be included in the consolidated profit statement;when consolidating the cash flow statement, the cash flow of the subsidiary or business from the beginning of the currentperiod to the end of the reporting period shall be included in the consolidated cash flow statement; at the same time, therelevant items of the comparative statement shall be adjusted, and the consolidated reporting entity shall be deemed tohave existed since the time when the final controller began to control.
During the reporting period, the opening balance of the consolidated balance sheet shall not be adjusted when theconsolidated balance sheet is prepared for subsidiaries or businesses increased by business merger or other means notunder the same control. When preparing the income statement, the income, expenses and profits of the subsidiary orbusiness from the acquisition date to the end of the reporting period shall be included in the consolidated income statement.When preparing the cash flow statement, the cash flow of the subsidiaries from the acquisition date to the end of thereporting period shall be included in the consolidated cash flow statement.
The Company prepares the consolidated financial statements based on the amount of identifiable assets, liabilitiesand contingent liabilities determined on the basis of fair value on the acquisition date as reflected in the individualfinancial statements of subsidiaries on the balance sheet date of the current period. The difference between the mergercost and the fair value share of the identifiable net assets of the acquiree obtained in the merger is recognized as goodwill.The difference between the merger cost and the fair value share of the identifiable net assets of the acquiree obtained inthe merger shall be included in the current profits and losses after review.
If the business merger not under the same control is realized step by step through multiple transactions, in theconsolidated financial statements, the equity of the acquiree held before the acquisition date shall be re-measuredaccording to the fair value of the equity on the acquisition date, and the difference between the fair value and its bookvalue shall be included in the current investment income. Other comprehensive income of the long-term equity investmentof the acquiree held before the acquisition date under the equity method shall be accounted for on the same basis as thedirect disposal of related assets or liabilities by the investee. Changes in shareholders' equity other than net profit and loss,other comprehensive income and profit distribution shall be transferred to the current profits and losses on the acquisitiondate. For other equity instrument investments held by the acquiree before the acquisition date, the changes in fair valueof the equity instrument investment accumulated in other comprehensive income before the acquisition date aretransferred to retained profits and losses.
(2) Disposal of subsidiaries or businesses
A. General treatment method
During the reporting period, if the Company disposed of a subsidiary or business, the income, expenses and profitsof the subsidiary or business from the beginning of the period to the disposal date were included in the consolidatedincome statement; the cash flow of the subsidiary or business from the beginning of the period to the disposal date isincluded in the consolidated cash flow statement.
If the Company loses its control over the original subsidiary due to the disposal of part of the equity investment andother reasons, in the consolidated financial statements, the remaining equity shall be re-measured at its fair value on thedate of loss of control. The difference between the sum of the consideration obtained from the disposal of equity and thefair value of the remaining equity minus the share of the net assets of the original subsidiary continuously calculated fromthe acquisition date or the merger date calculated according to the original shareholding ratio shall be included in theinvestment income of the current period when the control right is lost, and the goodwill shall be offset. Othercomprehensive income related to equity investment in the original subsidiary shall be accounted for on the same basis asthe direct disposal of related assets or liabilities by the subsidiary when the control right is lost. Shareholders' equityrecognized due to changes in other shareholders' equity related to the original subsidiary other than net profit and loss,
other comprehensive income and profit distribution shall be transferred to current profits and losses when the control rightis lost.B. Disposal of equity step by step to loss of controlWhere an enterprise disposes of equity investment in a subsidiary step by step through multiple transactions until itloses control, if the transactions of disposing of equity investment in a subsidiary until it loses control belong to a packagetransaction, the transactions shall be accounted for as a transaction of disposing of a subsidiary and losing control;however, before the loss of control, the difference between each disposal price and the share of net assets of the subsidiarycorresponding to the disposal of investment shall be recognized as other comprehensive income in the consolidatedfinancial statements, and shall be transferred to the profits and losses of the current period when the control is lost.
If the terms, conditions and economic impact of the disposal of equity investments in subsidiaries conform to one ormore of the following circumstances, it usually indicates that multiple transactions should be accounted for as a packagetransaction:
(A) These transactions were entered into simultaneously or with mutual influence in mind;
(B) These transactions as a whole can achieve a complete business outcome;
(C) The occurrence of one transaction depends on the occurrence of at least one other transaction;
(D) One transaction is uneconomical when considered alone, but it is economical when considered with othertransactions.
(3) Purchase of minority shares of subsidiaries
The difference between the long-term equity investment newly obtained by the Company due to the purchase ofminority equity and the share of identifiable net assets attributable to the subsidiary calculated according to the newshareholding ratio from the purchase date (or the merger date) shall be adjusted for the capital premium or equity premiumin the capital reserve in the consolidated balance sheet. If the capital premium or equity premium in the capital reserve isinsufficient to offset, the retained earnings shall be adjusted.
(4) Disposal of partial equity investment in subsidiaries without loss of control
Without losing control, the difference between the disposal price obtained from the partial disposal of long-termequity investment in subsidiaries and the share of net assets continuously calculated by subsidiaries from the acquisitiondate or the merger date corresponding to the disposal of long-term equity investment shall be adjusted for the capitalpremium or equity premium in the capital reserve in the consolidated balance sheet. If the capital premium or equitypremium in the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
7. Classification of joint venture arrangements and accounting treatment of joint operations
√ Applicable □ Not applicable
A joint venture arrangement is an arrangement jointly controlled by two or more participants. Joint arrangement canbe classified into joint operations and joint ventures.
1. Joint operation refers to the joint venture arrangement in which the Company enjoys the assets related to thearrangement and undertakes the liabilities related to the arrangement. The following items related to the quantum ofinterest in joint operation are recognized by the Company:
(1) Recognize the assets held separately and the assets held jointly according to their shares;
(2) Recognize the liabilities assumed separately and the liabilities assumed jointly according to their shares;
(3) Recognize the income generated by the sale of its share of joint operating output;
(4) Recognize the income generated by the sale of output in the joint operation according to its share;
(5) Recognize the expenses incurred separately and the expenses incurred in joint operation according to their share.
2. A joint venture refers to a joint venture arrangement in which the Company has rights only to the net assets of thearrangement. The Company shall account for the investment of joint ventures in accordance with the provisions of equitymethod accounting for long-term equity investment.
8. Determination standards for cash and cash equivalents
When preparing the cash flow statement, the Company recognizes the cash on hand and deposits that can be usedfor payment at any time as cash. Investments with short term (generally due within three months from the purchase date),strong liquidity, easy conversion to known amounts of cash and little risk of value change are recognized as cashequivalents. Restricted bank deposits are not used as cash and cash equivalents in the cash flow statement.
9. Accounting method and translation method for foreign currency transactions and statements
√ Applicable □ Not applicable
1. Foreign currency business
When foreign currency business occurs, the amount of foreign currency is converted into CNY at the spot exchangerate on the date of transaction, and foreign currency monetary items and foreign currency non-monetary items are treatedaccording to the following methods at the end of the period:
(1) Foreign currency monetary items are translated at the spot exchange rate on the balance sheet date. The exchangedifference arising from the difference between the spot exchange rate on the balance sheet date and the spot exchangerate on the initial recognition or the previous balance sheet date shall be included in the current profits and losses.
(2) Non-monetary items in foreign currencies measured at historical cost shall still be converted at the spot exchangerate on the date of transaction, and the amount of their functional currency shall not be changed.
(3) Non-monetary items in foreign currencies measured at fair value shall be converted at the spot exchange rate onthe date of determination of fair value, and the difference between the amount of the converted bookkeeping functionalcurrency and the amount of the original bookkeeping functional currency shall be included in the current profits and lossesor other comprehensive income according to the nature of non monetary items.
(4) Foreign currency exchange gains and losses, except for exchange gains and losses arising from special foreigncurrency borrowings related to the purchase and construction or production of assets eligible for capitalization, shall beincluded in the cost of assets eligible for capitalization before the assets reach the expected usable or saleable state, andthe rest shall be included in the current profits and losses.
2. Translation of foreign currency financial statements
(1) The assets and liabilities in the balance sheet shall be translated at the spot exchange rate on the balance sheetdate; except for the "undistributed profit" item, other items of owner's equity are converted at the spot exchange rate atthe time of occurrence.
(2) The income and expense items in the profit statement are translated at the approximate exchange rate of the spotexchange rate.
(3) The translation difference of foreign currency financial statements arising from the above conversion is includedin other comprehensive income. Upon the disposal of overseas businesses, the translation differences of foreign currencyfinancial statements related to overseas businesses should be transferred from owners' equity to the disposal of currentprofit and loss.
(4) The cash flow statement is translated at the approximate exchange rate of the spot exchange rate. The impact ofexchange rate changes on cash is listed separately in the cash flow statement as a reconciliation item.
10. Financial instruments
√ Applicable □ Not applicable
When the Company becomes a party to the financial instrument contract, a financial asset or financial liability relatedto it is recognized.
1. Classification, recognition basis and measurement method of financial assets
According to the business model of the financial assets under management and the contractual cash flowcharacteristics of the financial assets, the Company divides the financial assets into three categories: financial assetsmeasured at amortized cost, financial assets measured at fair value with changes included in other comprehensive income,and financial assets measured at fair value with changes included in current profits and losses.
Financial assets are measured at fair value on initial recognition. For financial assets measured at fair value throughcurrent profits and losses, the related transaction expense is directly recognized in current profits and losses. For othertypes of financial assets, related transaction costs are included in the initial recognition amount. If the accounts receivableinitially recognized by the Company does not include a significant financing component as defined in the AccountingStandards for Business Enterprises No. 14 - Revenues or does not consider the financing component in a contract notexceeding one year in accordance with the Accounting Standards for Enterprises No. 14 - Revenues, the initialmeasurement shall be made according to the transaction price of the consideration expected to be entitled to receive.
(1) Financial assets measured at amortized costs
The Company's business model for managing such financial assets is to collect contract cash flow, and the cash flowgenerated on a specific date is only the payment of principal and interest based on the outstanding principal amount. TheCompany adopts the effective interest rate method for such financial assets, which are subsequently measured at amortized
cost, and the gains or losses arising from amortization or impairment are included in the current profits and losses.
(2) Financial assets measured at fair value with changes included in other comprehensive incomeThe Company's business model for managing such financial assets is to target both the receipt of contract cash flowand the sale, and the cash flow generated on a specific date is only the payment of principal and interest based on theoutstanding principal amount. Such financial assets are measured at fair value and the changes are included in othercomprehensive income, but impairment losses or gains, exchange gains and losses and interest income calculatedaccording to the effective interest rate method are included in the current profits and losses.For non-tradable equity instrument investments, the Company may irrevocably designate them as financial assetsmeasured at fair value and whose changes are included in other comprehensive income at initial recognition. Thedesignation is made on the basis of a single investment, which conforms to the definition of equity instruments from theperspective of the issuer. The Company includes the dividend income related to such financial assets in the current profitsand losses, and the change in fair value in other comprehensive income. When the financial assets are derecognised, theaccumulated gains or losses previously recognised in other comprehensive income are transferred from othercomprehensive income to retained earnings, which are not recognised in current profits or losses.
(3) Financial assets measured at fair value with changes included in current profits and lossesExcept for the above-mentioned financial assets measured at amortized cost and financial assets measured at fairvalue and whose changes are included in other comprehensive income, the Company classifies all other financial assetsas financial assets measured at fair value and whose changes are included in current profits and losses. In addition, at thetime of initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Company designatessome financial assets as financial assets measured at fair value and whose changes are included in the current profits andlosses. Such financial assets are subsequently measured at fair value, and changes in fair value are included in currentprofits and losses.
2. Classification, recognition basis and measurement method of financial liabilitiesAt the time of initial recognition, the Company's financial liabilities are classified as: financial liabilities measuredat fair value with changes included in the current profits and losses, and other financial liabilities. For financial liabilitiesmeasured at fair value through current profits and losses, the related transaction expense is directly recognised in currentprofits and losses. The related transaction expense of other financial liabilities is included in the initial recognition amount.
(1) Financial liabilities measured at fair value with changes included in current profits and lossesFinancial liabilities measured at fair value with changes included in current profits and losses include tradingfinancial liabilities (including derivatives belonging to financial liabilities) and financial liabilities designated at fair valuewith changes included in current profits and losses.
Transactional financial liabilities (including derivatives that are financial liabilities) are subsequently measured atfair value. In addition to related to hedge accounting, changes in fair value are recognised in current profits and losses. Atthe time of initial recognition of financial liabilities, the Company is designated as financial liabilities measured at fairvalue and whose changes are included in the current profits and losses,
Changes in fair value caused by changes in the Company's own credit risk are included in other comprehensiveincome, and when the liability is terminated, the cumulative changes in fair value caused by changes in its own credit riskincluded in other comprehensive income are transferred to retained earnings. Other changes in fair value are included inthe current profits and losses. If the impact of changes in the credit risk of such financial liabilities is treated in the abovemanner, which will cause or expand the accounting mismatch in profits and losses, the Company will include all gains orlosses of such financial liabilities (including the amount affected by changes in the credit risk of the enterprise itself) inthe current profits and losses.
(2) Other financial liabilities
Financial liabilities other than financial liabilities and financial guarantee contracts formed by the transfer of financialassets that do not meet the conditions for termination of recognition or continue to be involved in the transferred financialassets are classified as financial liabilities measured at amortized cost, which are subsequently measured at amortizedcost, and the gains or losses arising from termination of recognition or amortization are included in the current profits andlosses.
3. Determination method of fair value of financial assets and financial liabilities
For a financial instrument with active market, its fair value shall be recognized based on its price in the active market.For a financial instrument without active market, its fair value shall be recognized by adopting the estimation technique.During estimation, the Company adopts the estimation technique that is currently applicable and is supported by sufficientavailable data and other information, and selects the input value with characteristics consistent with the assets or liabilities
considered by market participants in relevant transactions of assets or liabilities. The related observable input value ispreferred. The non-observable input value can be used only when it is impossible or not feasible to obtain relevantobservable input value.
4. Recognition basis and measurement method of transfer of financial assets
Recognition of transfer of financial assets
| . | Recognition results |
| Almost all the risks and rewards of ownership of transferred financial assets | Termination of recognition of the financial asset (recognition of new assets/liabilities) |
It neither transfers nor retainsalmost all the risks and rewards ofownership of financial assets
| It neither transfers nor retains almost all the risks and rewards of ownership of financial assets | It abandons its control of the financial asset | |
| It does not abandon its control over the financial asset | Relevant assets and liabilities are recognized according to the degree of continued involvement in the transferred financial assets | |
| It retains almost all the risks and rewards of ownership of financial assets | It continues to recognize the financial asset and recognizes the consideration received as a financial liability | |
The Company divides the transfer of financial assets into entire transfer and partial transfer.
(1) If the overall transfer of financial assets meets the conditions for termination of recognition, the differencebetween the following two amounts shall be included in the current profits and losses: The book value of the transferredfinancial assets on the date of termination of recognition; the sum of the consideration received from the transfer offinancial assets and the cumulative amount of changes in fair value originally directly included in other comprehensiveincome (The financial assets involved in the transfer are classified as financial assets measured at fair value and whosechanges are included in other comprehensive income in Article 18 of Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments).
(2) If a part of a financial asset is transferred and the transferred part as a whole meets the conditions for terminationof recognition, the overall book value of the financial asset before transfer shall be apportioned between the part oftermination of recognition and the part of continuing recognition (In this case, the retained service assets shall be regardedas part of continuing recognition of financial assets) according to their respective relative fair values on the transfer date,and the difference between the following two amounts shall be included in the current profits and losses: the book valueof the part whose recognition is terminated on the date of recognition; the consideration received for the derecognitionportion (including all new assets acquired less all new liabilities assumed), and the sum of the amount corresponding tothe termination of recognition in the cumulative amount of changes in fair value originally included in othercomprehensive income (financial assets involving partial transfer are classified as financial assets measured at fair valueand whose changes are included in other comprehensive income in Article 18 of Accounting Standards for BusinessEnterprises No. 22 - Recognition and Measurement of Financial Instruments).
If the transfer of financial assets does not meet the conditions for termination of recognition, the overall financialassets transferred shall continue to be recognized, and the consideration received shall be recognized as a financial liability.
5. Conditions for termination of recognition of financial liabilities
If the current obligation of a financial liability (or part of it) has been discharged, the recognition of the financialliability (or part of it) shall be terminated. If the following conditions exist:
(1) Where the Company transfers assets used to repay financial liabilities to an institution or establishes a trust, andthe obligation to repay debts still exists, the recognition of the financial liabilities shall not be terminated.
(2) If the Company (borrower) enters into an agreement with the lender to replace the original financial liability (orpart of it) by assuming a new financial liability, and the terms of the contract are substantially different, the Companyshall terminate the recognition of the original financial liability (or part of it) and recognize a new financial liability.
Where a financial liability (or part of it) is derecognized, the Company shall include the difference between its bookvalue and the consideration paid (including non-cash assets transferred out or liabilities assumed) in the current profitsand losses.
6. Impairment of financial assets
(1) Recognition method of impairment provision
The Company conducts impairment accounting treatment and recognizes loss reserves for financial assets (including
receivables) measured at amortized cost, debt instrument investments and lease receivables measured at fair value andwhose changes are included in other comprehensive income on the basis of expected credit losses. In addition, for contractassets, loan commitments and financial guarantee contracts, provision for impairment and recognition of creditimpairment losses are also made in accordance with the accounting policies described in this part.Expected credit losses refer to the weighted average value of credit losses of financial instruments weighted by therisk of default. Credit loss refers to the difference between all contractual cash flows receivable from the contract and allcash flows expected to be received by the Company at the original effective interest rate, that is, the present value of allcash shortages.
Except for financial assets purchased or originated that have suffered credit impairment, the Company assesseswhether the credit risk of related financial assets has increased significantly since initial recognition on each balance sheetdate. If the credit risk has not increased significantly since initial recognition and is in the first stage, the Companymeasures the loss reserve according to the amount equivalent to the expected credit loss of the financial asset in the next12 months; if the credit risk has increased significantly since initial recognition but has not been impaired, it is in thesecond stage, the Company shall measure the loss reserve according to the amount equivalent to the expected credit lossof the financial asset throughout its life; if a financial asset has suffered credit impairment since its initial recognition, itis in the third stage, and the Company measures the loss reserve according to the amount equivalent to the expected creditloss during the whole duration of the financial asset. In assessing the expected credit losses, the Company considersreasonable and evidence-based information about past events, current conditions and forecasts of future economicconditions, including forward-looking information, which can be obtained without unnecessary additional costs or effortsat the balance sheet date.
The expected credit loss in the next 12 months refers to the expected credit loss caused by the possible default offinancial assets within 12 months after the balance sheet date (if the expected duration of financial assets is less than 12months, it is the expected duration), which is part of the expected credit loss for the whole duration.
For financial instruments with lower credit risk on the balance sheet date, the Company assumes that its credit riskhas not increased significantly since the initial recognition, and measures the loss according to the expected credit lossesin the next 12 months.
For financial assets in the first and second stages and with low credit risk, the Company calculates interest incomeaccording to their book balance and effective interest rate without deducting impairment provisions. For financial assetsin the third stage, interest income shall be calculated according to the amortized cost and effective interest rate of theirbook balance minus the provision for impairment.
(2) Financial assets that have been impaired
When one or more events that the expected future cash flow of a financial asset has an adverse impact occur, thefinancial asset becomes a financial asset with credit impairment. Evidence of credit impairment of financial assets includesthe following observable information:
A. Significant financial difficulties of the issuer or the debtor;
B. The debtor violates the contract, such as default or overdue payment of interest or principal;
C. The creditor grants concessions that the debtor would not otherwise make for economic or contractual reasonsrelated to the debtor's financial difficulties;
D. The debtor is likely to go bankrupt or undergo other financial restructuring;
E. The financial difficulties of the issuer or the debtor lead to the disappearance of the active market of the financialasset;
F. A financial asset is purchased or originated at a substantial discount that reflects the fact that a credit loss hasoccurred.
The credit impairment of financial assets may be caused by the joint action of multiple events, not necessarily byindividually identifiable events.
(3) Purchased or originated financial assets with credit impairment
For financial assets purchased or originated by the Company that have suffered credit impairment, only thecumulative changes in expected credit losses during the whole duration after initial recognition are recognized as lossreserves on the balance sheet date. On each balance sheet date, the change amount of expected credit loss during thewhole duration shall be included in the current profits and losses as impairment losses or gains. Even if the expectedcredit loss determined on the balance sheet date for the whole duration is less than the amount of the expected credit lossreflected in the estimated cash flow at the time of initial recognition, the favorable change in the expected credit loss isrecognized as impairment gains.
(4) Criteria for a significant increase in credit risk
If the probability of default of a financial asset during the expected duration determined on the balance sheet date issignificantly higher than the probability of default during the expected duration determined at the time of initialrecognition, it indicates that the credit risk of the financial asset has increased significantly. Except for specialcircumstances, the Company adopts the change of default risk in the next 12 months as a reasonable estimate of the changeof default risk in the whole duration to determine whether the credit risk has increased significantly since initialrecognition.
(5) Methods for evaluating expected credit losses of financial assets
The Company assesses the expected credit losses of financial assets based on individual and portfolio. Credit risk isassessed individually for financial assets with significantly different credit risks, such as accounts receivable from relatedparties; receivables from government agencies; receivables that have obvious signs that the debtor is likely to be unableto fulfill its repayment obligations.
In addition to financial assets for which credit risk is assessed individually, the Company divides financial assetsinto different groups based on common risk characteristics, and assesses the credit risk on the basis of such groups.
(6) Accounting treatment of impairment of financial assets
The Company calculates the estimated credit losses of various financial assets on the balance sheet date, and theincrease or reversal of loss reserves thus formed is included in the current profits and losses as impairment losses or gains.
If the Company actually incurred credit losses and determined that the relevant financial assets could not berecovered and approved to be written off, the book balance of the financial assets shall be directly written down. If thewritten down financial assets are recovered later, they shall be included in the profits and losses of the current period asa reversal of impairment losses.
7. Financial guarantee contract
A financial guarantee contract refers to a contract in which the issuer pays a specific amount to the contract holderwho has suffered losses when the debtor is unable to pay its debts at maturity in accordance with the terms of the originalor revised debt instrument. Financial guarantee contracts are measured at fair value at the time of initial recognition.Financial guarantee contracts that are not designated as financial liabilities measured at fair value and whose changes areincluded in the current profits and losses shall be subsequently measured according to the balance of the expected creditloss reserve amount determined on the balance sheet date and the initial recognition amount after deducting theaccumulated amortization amount determined in accordance with the revenue recognition principle, whichever is higher.
8. Offset of financial assets and financial liabilities
Financial assets and financial liabilities are listed separately in the balance sheet and do not offset each other.However, if the following conditions are met at the same time, the net amount after mutual offset shall be listed in thebalance sheet:
(1) The Company has the legal right to offset the recognized financial assets and financial liabilities, and such legalright is now enforceable;
(2) The Company plans to settle at a net amount, or realize the financial assets and settle the financial liabilities atthe same time.
9. Equity instruments
Equity instruments refer to contracts that can prove the ownership of the Company's remaining equity in assets afterdeducting all liabilities. The issuance (including refinancing), repurchase, sale or cancellation of equity instruments bythe Company shall be treated as changes in equity. The Company does not recognize changes in fair value of equityinstruments. Transaction costs related to equity transactions are deducted from equity.
The Company's various distributions to the holders of equity instruments (excluding stock dividends) shall be usedas profit distribution to reduce the owner's equity. The stock dividend issued does not affect the total owner's equity.
10. Determination method of fair value of financial instruments
The Company measures the fair value of related assets or liabilities at the price of the main market. If there is nomain market, the Company measures the fair value of related assets or liabilities at the price of the most favorable market.
The main market refers to the market with the largest trading volume and the highest trading activity of related assetsor liabilities; the most favorable market refers to the market that can sell related assets at the highest amount or transferrelated liabilities at the lowest amount after considering transaction costs and transportation costs. The Company adoptsthe assumptions used by market participants to maximize their economic benefits when pricing the asset or liability.
(1) Valuation technology
The Company adopts valuation technologies applicable in the current situation and supported by sufficient availabledata and other information, and the valuation technologies used mainly include market method, income method and costmethod. The Company uses one or more valuation technologies to measure fair value. If multiple valuation technologiesare used to measure fair value, considering the rationality of each valuation result, the amount that can best represent fairvalue in the current situation is selected as fair value.
In the application of valuation technology, the Company gives priority to the use of relevant observable inputs, andonly when the relevant observable inputs can not be obtained or are not feasible can the unobservable inputs be used.Observable input value refers to the input value that can be obtained from market data. This input value reflects theassumptions used by market participants in pricing related assets or liabilities. Unobservable input values refer to inputvalues that cannot be obtained from market data. The input value is obtained based on the best information available onthe assumptions used by market participants in pricing related assets or liabilities.
(2) Fair value hierarchy
The Company divides the input values used in fair value measurement into three levels, and first uses the first levelof input values, followed by the second level of input values, and finally uses the third level of input values. The firstlevel of input is an unadjusted quote for the same asset or liability that can be obtained on the measurement date in anactive market. The second level input value is an input value that is directly or indirectly observable for related assets orliabilities other than the first level input value. Input value at Hierarchy III refers to unobservable input value of relevantassets or liabilities.
11. Notes receivable
Determination method and accounting treatment method of expected credit loss of notes receivable
√ Applicable □ Not applicable
The Company measures the loss provision for bills receivable according to the expected credit loss amount duringthe entire duration. The Company believes that the acceptance bank credit rating of the bank acceptance bill held by it ishigh, there is no significant credit risk, and no provision for loss is made. The determination method and accountingtreatment method of the expected credit loss of the commercial acceptance bills held by the Company are consistent withthe determination method and accounting treatment method of the expected credit loss of accounts receivable. Based onthe credit risk characteristics of bills receivable, they are divided into different portfolios:
| Item | Basis for determining portfolio |
| Notes receivable portfolio 1 | Bank acceptance draft |
| Notes receivable portfolio 2 | Commercial acceptance draft |
12. Accounts receivable
Determination method and accounting treatment method of expected credit loss of accounts receivable
√ Applicable □ Not applicable
The Company shall measure its loss reserve at an amount equivalent to the expected credit loss during the wholeduration of the receivables specified in the Accounting Standards for Business Enterprises No. 14 - Revenues andexcluding major financing components (including the financing components in contracts not exceeding one yearaccording to the standards).
Based on the common risk characteristics, the Company divides accounts receivable into different groups accordingto the common credit risk characteristics such as customer categories:
| Item | Basis for determining portfolio |
| Accounts receivable portfolio 1 | Franchised dealers |
| Accounts receivable portfolio 2 | Engineering clients |
| Accounts receivable portfolio 3 | Other clients |
| Accounts receivable portfolio 4 | Related parties within the scope of consolidation |
13. Receivables financing
√ Applicable □ Not applicable
Receivables financing reflects notes receivable and accounts receivable measured at fair value at the balance sheet dateand whose changes are included in other comprehensive income. For the accounting treatment method, please refer to 10.Financial instruments of this accounting policy, which are classified as financial assets measured at fair value and whosechanges are included in other comprehensive income.
14. Other receivables
Determination method and accounting treatment method of expected credit loss of other receivables
√ Applicable □ Not applicable
For other receivables, the expected credit loss is determined according to historical experience data and forward-looking information. The Company adopts the amount equivalent to the expected credit loss in the next 12 months or thewhole duration to measure the impairment loss according to whether the credit risk of other receivables has increasedsignificantly since initial recognition.Based on the common risk characteristics, the Company divides other receivables into different groups:
| Item | Basis for determining portfolio |
| Other receivables portfolio 1 | Interest receivable |
| Other receivables portfolio 2 | Dividend receivable |
| Other receivables portfolio 3 | Margin receivable |
| Other receivables portfolio 4 | Reserve for business receivables |
| Other receivables portfolio 5 | Deposit receivables |
| Other receivables portfolio 6 | Receivables from consolidated related parties |
| Other receivables portfolio 7 | Other receivables |
15. Inventory
√ Applicable □ Not applicable
1. Classification of inventory
The Company's inventory refers to the materials or supplies held for sale in the process of production and operation,or still in the process of production, or will be consumed in the process of production or provision of labor services,including all kinds of raw materials, products in progress, finished products (inventory commodities), issued commodities,etc.
2. Valuation method for acquisition and delivery of inventory
Cost method is employed for initial measurement of inventories. Inventory costs include purchase cost, processingcost and other costs. Borrowing costs that shall be included in inventory costs shall be treated in accordance with theAccounting Standards for Business Enterprises No. 17 - Borrowing Costs. The cost of inventory invested by an investorshall be determined according to the value stipulated in the investment contract or agreement, except that the valuestipulated in the contract or agreement is unfair.
Valuation method of issued inventory: Weighted average method is adopted for accounting.
3. Inventory taking system
A perpetual inventory system is adopted.
4. Amortization method of low-value consumables and packaging materials
The "one-time amortization method" is adopted for accounting.
5. Basis for determining the net realizable value of inventory and method for withdrawing inventory depreciationreserves
Inventory at the end of the period shall be valued at the lower of cost and net realizable value. If the net realizablevalue of inventory at the end of the period is lower than the book cost, the provision for inventory depreciation shall bemade according to the difference. Net realizable value refers to the amount of the estimated selling price of inventory indaily activities after deducting the estimated cost to be incurred at completion, the estimated selling expenses and relatedtaxes.
(1) Basis for determining the net realizable value of inventory: materials held for production, etc., the net realizablevalue of finished products produced by them is higher than the cost, and the materials are still measured at cost; if thedecline in the price of materials indicates that the net realizable value of finished products is lower than the cost, the
materials shall be measured at the net realizable value.The net realizable value of inventories held for the execution of sales contracts or labor contracts shall be calculatedon the basis of the contract price. If the quantity of inventory held by the enterprise is more than the quantity ordered inthe sales contract, the net realizable value of the excess inventory shall be calculated on the basis of the general salesprice.
(2) Provision method for inventory falling price reserves: Provision for inventory falling price shall be madeaccording to the lower of the cost and net realizable value of a single inventory item; however, for inventory with largequantity and low unit price, provision for inventory depreciation shall be made according to inventory category.
16. Contract assets
(1) Recognition method and standard of contract assets
√ Applicable □ Not applicable
Contract assets refer to the right of the Company to receive consideration for the transfer of goods to customers, andthe right depends on other factors other than the passage of time.
(2) Determination method and accounting treatment method of expected credit loss of contract assets
√ Applicable □ Not applicable
For contract assets, whether they contain significant financing components, the Company always measures its lossreserve at an amount equivalent to the expected credit loss during the whole duration, and the increase or reversal of theloss reserve thus formed is included in the current profits and losses as impairment losses or gains.
The Company calculates the expected credit loss of contract assets on the balance sheet date, and if the expectedcredit loss is greater than the carrying amount of the current provision for impairment of contract assets, the difference isrecognized as an impairment loss; the expected credit loss is remeasured on each balance sheet date, and the reversalamount of the loss provision thus formed is recognized as impairment gains.
17. Held-for-sale assets
√ Applicable □ Not applicable
1. Basis for classification as held-for-sale
The Company recognizes the components (or non-current assets) that meet the following conditions as held-for-salecategories at the same time:
(1) In accordance with the practice of selling such assets or disposal groups in similar transactions, they can be soldimmediately under current conditions;
(2) The sale is likely to occur, that is, the enterprise has made a decision on a sale plan and obtained a definitepurchase commitment, and the sale is expected to be completed within one year. If the relevant provisions require theapproval of the relevant authorities or regulatory authorities of the enterprise before it can be sold, it shall have beenapproved.
The determined purchase commitment refers to the legally binding purchase agreement signed between the enterpriseand other parties, which contains important clauses such as transaction price, time and sufficiently severe penalty forbreach of contract, so that the possibility of major adjustment or cancellation of the agreement is extremely small.
2. Accounting treatment of held-for-sale
When the Company initially measures or remeasures the non-current assets or disposal groups held for sale on thebalance sheet date, if the book value is higher than the net value of fair value minus selling expenses, the book value shallbe written down to the net value of fair value minus selling expenses, and the amount written down shall be recognizedas asset impairment loss and included in the current profits and losses. At the same time, provision for impairment ofassets held for sale shall be made. If the net amount of the fair value of non-current assets held for sale minus the sellingexpenses increases on the subsequent balance sheet date, the amount previously written down shall be restored andreversed within the amount of asset impairment loss recognized after being classified as held for sale, and the reversedamount shall be included in the current profits and losses. The impairment loss of assets recognized before being classifiedas held for sale shall not be reversed.
For the amount of asset impairment loss recognized by the disposal group held for sale, the book value of goodwillin the disposal group shall be offset first, and then the book value of non-current assets in the disposal group shall beoffset proportionally according to the proportion of the book value of non-current assets in the disposal group. Thesubsequent reversal amount of asset impairment losses recognized by the disposal group held for sale shall be increasedproportionally according to the proportion of the book value of non-current assets other than goodwill in the disposal
group.
The non-current assets held for sale or the non-current assets of the disposal group are not depreciated or amortized,and the interest on debt and other fees of the disposal group held for sale shall be recognized further.When the Company terminates the recognition of non-current assets or disposal groups held for sale, theunrecognized gains or losses shall be included in the current profits and losses.When non-current assets or disposal groups are no longer classified as held for sale categories or non-current assetsare removed from the disposal groups held for sale because they no longer meet the classification conditions of held forsale categories, they shall be measured according to the lower of the following two:
(1) The book value before being classified as held for sale is adjusted according to the depreciation, amortization orimpairment that should have been recognized under the assumption that it is not classified as held for sale;
(2) Recoverable amount.
18. Debt investment
(1) Determination method and accounting treatment method of expected credit loss of creditor's rights investment
√ Applicable □ Not applicable
For creditor's rights investment and other creditor's rights investment, the Company determines the expected creditloss on each balance sheet date according to the various types of counterparties and risk exposures, taking into accounthistorical defaults and industry forward-looking information or various external actual and expected economicinformation. For the determination method and accounting treatment method of expected credit loss, please refer to 10.Financial instruments of accounting policy.
19. Other debt investments
(1) Determination method and accounting treatment method of expected credit loss of other creditor's rightsinvestment
√ Applicable □ Not applicable
For creditor's rights investment and other creditor's rights investment, the Company determines the expected credit losson each balance sheet date according to the various types of counterparties and risk exposures, taking into accounthistorical defaults and industry forward-looking information or various external actual and expected economicinformation. For the determination method and accounting treatment method of expected credit loss, please refer to 10.Financial instruments of accounting policy.
20. Long-term receivables
(1) Determination method and accounting treatment method of expected credit loss of long-term receivables
□ Applicable √ Not applicable
21. Long-term equity investments
√ Applicable □ Not applicable
1. Basis for determining joint control and significant impact on the investee
Joint control refers to the common control over an arrangement in accordance with relevant agreements, and therelevant activities of the arrangement must be agreed upon by the participants sharing control rights before decisions canbe made. In judging whether there is joint control, we shall first judge whether all participants or a combination ofparticipants collectively control the arrangement. If all participants or a group of participants must act together todetermine the relevant activities of an arrangement, all participants or a group of participants are considered to collectivelycontrol the arrangement. Secondly, it is judged whether the decision-making of the activities related to the arrangementmust be unanimously agreed by the participants who collectively control the arrangement, and joint control can be formedonly when the decision-making of the activities requires the unanimous consent of the participants who collectivelycontrol the arrangement. If there are two or more combinations of participants who can collectively control anarrangement, it does not constitute joint control. When determining whether there is joint control, the protective rightsenjoyed are not taken into account.
Significant impact means that the investor has the power to participate in the decision-making of the financial andoperating policies of the investee, but is not able to control or jointly control the formulation of these policies with otherparties. When determining whether it can exert significant impact on the investee, the impact of the investor's direct orindirect holding of the voting shares of the investee and the current enforceable potential voting rights held by the investorand other parties on the assumption of conversion into equity of the investee, including the impact of the current
convertible warrants, share options and convertible corporation bonds issued by the investee. When the foreign investmentmeets the following conditions, it is generally determined to have a significant impact on the investor: ① Sendrepresentatives to the board of directors or similar authorities of the investee; ② Participate in the formulation process offinancial and operating policies of the investee; ③ Important transactions with the investee; ④ Dispatch managers to theinvestee; ⑤ Provide key technical data to the investee. It is generally considered to have a significant impact on theinvestee when it directly or indirectly owns more than 20% but less than 50% of the voting shares of the invested enterprisethrough subsidiaries.
2. Determination of initial investment cost
(1) Long-term equity investment formed by business merger
A. For the business merger under the same control, if the consideration of the merger is to pay cash, transfer non-cash assets or bear debts, and to issue equity securities, the share of the book value of the owner's equity of the mergedparty in the consolidated financial statements of the final controller shall be regarded as the initial investment cost of thelong-term equity investment on the merger date. If the investee under the same control can be controlled due to additionalinvestment and other reasons, the initial investment cost of long-term equity investment shall be determined on the mergerdate according to the share of the book value of the net assets of the merged party in the consolidated financial statementsof the final controller after the merger. The difference between the initial investment cost of the long-term equityinvestment on the merger date and the sum of the book value of the long-term equity investment before the merger plusthe book value of the new payment consideration for the shares obtained on the merger date shall be adjusted for thecapital premium or equity premium. If the capital premium or equity premium is insufficient to offset, the retainedearnings shall be offset.
B. For the business merger not under the same control, the merger cost determined in accordance with the relevantprovisions of the Accounting Standards for Business Enterprises No. 20 - Business Merger on the acquisition date shallbe regarded as the initial investment cost of long-term equity investment. If the investee not under the same control canbe controlled due to additional investment and other reasons, the sum of the book value of the equity investment originallyheld and the new investment cost shall be regarded as the initial investment cost calculated according to the cost method.
(2) In addition to the long-term equity investment formed by the business merger, the initial investment cost of long-term equity investment obtained by other means shall be determined in accordance with the following provisions:
A. A long-term equity investment obtained by paying cash shall be regarded as the initial investment cost accordingto the actual purchase price paid. The initial investment cost includes expenses, taxes and other necessary expensesdirectly related to the acquisition of long-term equity investment.
B. For long-term equity investment obtained by issuing equity securities, the fair value of issuing equity securitiesshall be regarded as the initial investment cost.
C. The initial investment cost of long-term equity investment obtained through the exchange of non-monetary assetsshall be determined in accordance with the Accounting Standards for Business Enterprises No. 7 - Exchange of Non-monetary Assets.
D. The initial investment cost of long-term equity investment obtained through debt restructuring shall be determinedin accordance with the Accounting Standards for Business Enterprises No.12 - Debt Restructuring.
3. Subsequent measurement and profit and loss recognition method
(1) Cost method accounting: long-term equity investment that can control the investee shall be accounted for by costmethod. When the cost method is adopted for accounting, the cost of long-term equity investment shall be adjusted byadding or recovering investment. For long-term equity investments accounted for by the cost method, in addition to thedeclared but not yet distributed cash dividends or profits included in the actual payment or consideration when obtainingthe investment, the Company shall recognize the investment income according to the cash dividends or profits declaredby the investee, and no longer divide whether it belongs to the net profit realized by the investee before and afterinvestment.
(2) Equity method accounting: For long-term equity investment jointly controlled or significantly affected by theinvestee, in addition to equity investment in associated enterprises, part of which is indirectly held through venture capitalinstitutions, mutual funds, trust companies or similar entities including investment linked insurance funds, regardless ofwhether the above entities have a significant impact on this part of investment. In accordance with the relevant provisionsof Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments, theCompany chooses to measure this part of the investment indirectly held at fair value and the changes are included inprofits and losses, and adopts the equity method for accounting. When the equity method is adopted for accounting, afterthe Company obtains the long-term equity investment, the investment income and other comprehensive income shall berecognized respectively according to the share of net profit and loss and other comprehensive income realized by the
investee that should be enjoyed or shared, and the book value of the long-term equity investment shall be adjusted; theCompany shall calculate the attributable part according to the profits or cash dividends declared to be distributed by theinvestee, and reduce the book value of long-term equity investment accordingly; the Company shall adjust the book valueof long-term equity investment and include it in the owner's equity for other changes in the owner's equity of the investedentity other than net profits and losses, other comprehensive income and profit distribution. The Company recognizes thenet loss incurred by the investee to the extent that the book value of the long-term equity investment and other long-termrights and interests that substantially constitute the net investment in the investee are written down to zero, except wherethe Company has the obligation to bear additional losses. If the investee realizes net profit in the future, the Companyshall resume the recognition of income sharing after the income sharing makes up for the unrecognized loss sharing.When the Company confirms its share of the net profit and loss of the investee, it shall adjust the net profit of the investeeon the basis of the fair value of the identifiable assets of the investee at the time of acquisition of investment, and offsetthe internal transaction gains and losses between the Company and associates and joint ventures, on which the investmentprofits and losses are recognized. Internal transaction losses between the Company and the investee shall be recognizedin full if they belong to asset impairment losses in accordance with the Accounting Standards for Business EnterprisesNo. 8 - Asset Impairment and other provisions. If the accounting policy and accounting period adopted by the investeeare inconsistent with those of the Company, the financial statements of the investee shall be adjusted in accordance withthe accounting policy and accounting period of the Company, and the investment profits and losses shall be recognized.For the long-term equity investment in associates and joint ventures held before the first execution date, if there is adebit balance of equity investment related to the investment, it shall be amortized according to the straight line method ofthe original remaining period, and the amortization amount shall be included in the current profits and losses.
(3) For the disposal of long-term equity investment, the difference between its book value and the actual priceobtained shall be included in the current profits and losses. If a long-term equity investment accounted for by the equitymethod is included in the owner's equity due to other changes in the owner's equity of the investee other than the netprofits and losses, the part originally included in the owner's equity shall be transferred to the current profits and lossesaccording to the corresponding proportion when disposing of the investment, except for other comprehensive incomearising from the change of net liabilities or net assets of the newly measured and defined benefit plan by the investee.
22. Investment properties
(1) If the cost measurement model is adopted:
Depreciation or amortization method
Investment properties refer to the assets holding for capital appreciation or lease earning as well as the aims of both.It mainly includes leased land use rights, land use rights held and ready to be transferred after appreciation, and leasedbuildings. When the Company can obtain rental income or value-added income related to investment real estate and thecost of investment real estate can be reliably measured, the Company will initially measure it according to the actualexpenditure on purchase or construction.
The Company adopts the cost model for subsequent measurement of investment real estate on the balance sheet date.Under the cost model, the Company measures, depreciates or amortizes investment real estate in accordance with 23.Fixed assets and 29. Intangible assets of this accounting policy. When an investment real estate is disposed of, orpermanently withdrawn from use and is not expected to obtain economic benefits from its disposal, the recognition of theinvestment real estate shall be terminated. When the Company sells, transfers or scraps investment real estate or damagesinvestment real estate, the amount of disposal income after deducting its book value and relevant taxes and fees shall beincluded in the current profits and losses.
23. Fixed assets
(1) Confirmation conditions
√ Applicable □ Not applicable
Fixed assets refer to tangible assets held for the production of commodities, the provision of labor services, the rentalor operation and management with a service life of more than one fiscal year.
(2) Depreciation method
√ Applicable □ Not applicable
| Category | Depreciation method | Depreciable life (years) | Residual value rate | Annual depreciation rate |
| Property and building | Straight-line method | 20 years | 3-10 | 4.5-4.85 |
| Machinery and equipment | Straight-line method | 10 years | 3-10 | 9-9.70 |
| Transportation equipment | Straight-line method | 5 years | 3-10 | 18-19.40 |
| Other equipment | Straight-line method | 5 years | 3-10 | 18-19.40 |
At the end of each year, the Company reviews the service life, estimated net residual value and depreciation methodof fixed assets.
(3) Recognition basis, valuation and depreciation method of fixed assets under financing lease
□ Applicable √ Not applicable
24. Construction in progress
√ Applicable □ Not applicable
Construction in progress is valued at actual cost. Where the loan interest expenditure and foreign currency conversiondifference incurred for construction projects shall be capitalized or included in the current profits and losses in accordancewith the relevant provisions of the Accounting Standards for Business Enterprises No. 17 - Borrowing Costs. From thedate when the construction in progress reaches the expected state of use, whether the final settlement of the project ishandled, it will be transferred to fixed assets, and the adjustment will be made after the completion settlement proceduresare handled.
For the recognition standard and provision method of provision for impairment of construction in progress, pleaserefer to 30. Notes on impairment of long-term assets of this accounting policy.
25. Borrowing costs
√ Applicable □ Not applicable
1. Recognition principles for capitalization of borrowing costs
Borrowing costs include interest, amortization of discounts or premiums incurred on borrowings and ancillary costs,as well as exchange differences incurred on foreign currency borrowings. Borrowing costs incurred by the Company thatcan be directly attributable to the purchase, construction or production of assets eligible for capitalization shall becapitalized and included in the cost of related assets; other borrowing costs are recognized as expenses according to theamount incurred and included in the current profits and losses.
Assets that meet the capitalization conditions include fixed assets, investment real estate, inventory and other assetsthat require considerable time for purchase and construction or production activities to reach the intended usable orsaleable state.
Borrowing costs shall be capitalized when the following conditions are met at the same time:
(1) Asset expenditure has occurred, including expenditure incurred in the form of cash payment, transfer of non-cashassets or assumption of interest bearing debts for the purchase and construction or production of assets eligible forcapitalization;
(2) Borrowing costs have been incurred;
(3) The acquisition and construction or production activities necessary to make the assets reach the expected usableor saleable state have begun.
2. Period of capitalization of borrowing costs
Borrowing costs incurred for the acquisition and construction or production of assets that meet the capitalizationconditions shall be included in the cost of the asset if they meet the above capitalization conditions and occur before theasset reaches the intended usable or saleable state. If the acquisition and construction or production activities of the assetare interrupted abnormally for more than three consecutive months, the capitalization of borrowing costs shall besuspended and recognized as current expenses, until the acquisition and construction of assets or production activitiesresume; when the assets purchased, constructed or produced reach the expected usable or sales state, the capitalization oftheir borrowing costs shall be stopped. Borrowing costs incurred after reaching the expected usable or saleable state aredirectly included in financial expenses in the current period.
3. Calculation methods for capitalized amount of borrowing costs
During the capitalization period, the capitalization amount of interest (including amortization of discount or premium)in each accounting period shall be determined in accordance with the following provisions:
(1) Where a special loan is borrowed for the purchase and construction or production of assets eligible for
capitalization, it shall be determined by the amount of the interest expenses actually incurred in the current period of thespecial loan minus the interest income obtained by depositing the unused loan funds in the bank or the investment incomeobtained by temporary investment.
(2) If a general loan is occupied for the purchase and construction or production of assets that meet the capitalizationconditions, the interest amount that should be capitalized on the general loan shall be calculated and determined accordingto the weighted average of the asset expenditure of the part of the cumulative asset expenditure exceeding the special loanmultiplied by the capitalization rate of the general loan occupied.
26. Biological assets
□ Applicable √ Not applicable
27. Oil and gas assets
□ Applicable √ Not applicable
28. Right of use assets
√ Applicable □ Not applicable
On the beginning date of the lease term, the Company, as the lessee, recognizes the right to use the leased assetsduring the lease term as the right of use assets, except for short-term leases and low value asset leases.
1. The recognition of right of use assets is based on the initial measurement of right of use assets at cost, whichincludes:
(1) The initial measurement amount of the lease liability;
(2) For the lease payment paid on or before the beginning date of the lease term, if there is a lease incentive, therelevant amount of the lease incentive that has been enjoyed shall be deducted;
(3) Initial direct costs incurred;
(4) The costs expected to occur for the purpose of dismantling and removing the leased assets, restoring the sitewhere the leased assets are located or restoring the leased assets to the agreed state of the lease terms, except for thoseincurred for the production of inventory.
2. Depreciation method and impairment of right of use assets
(1) The Company adopts the cost model for subsequent measurement of right of use assets.
(2) The Company adopts the straight line method for depreciation of various right of use assets.
If the Company can reasonably determine the ownership of the leased assets at the expiration of the lease term,depreciation shall be accrued within the remaining service life of the leased assets; if it is impossible to reasonablydetermine that the ownership of the leased asset can be obtained at the expiration of the lease term, depreciation shall beaccrued within the shorter of the lease term and the remaining service life of the leased asset. If the right of use assets areimpaired, the Company shall make subsequent depreciation according to the book value of the right of use assets afterdeducting impairment losses.
(3) When the Company remeasures the lease liabilities according to the present value of the changed lease paymentand adjusts the book value of the right of use assets accordingly, if the book value of the right of use assets has beenreduced to zero, but the lease liabilities still need to be further reduced, the remaining amount shall be included in thecurrent profits and losses.
(4) For the impairment test method and impairment provision method of right of use assets, please refer to Item (26)Impairment of long-term assets of this accounting policy.
29. Intangible assets
(1) Valuation method, service life and impairment test
√ Applicable □ Not applicable
Intangible assets are measured at actual cost. The cost of purchased intangible assets includes the purchase price,relevant taxes and other expenses directly attributable to the intended use of the assets. If intangible assets are purchasedby installments, and the price of intangible assets purchased is delayed beyond the normal credit conditions, whichactually has the nature of financing, the cost of intangible assets is the present value of the purchase price. The cost ofintangible assets invested by investors shall be determined according to the value stipulated in the investment contract oragreement. If the value stipulated in the investment contract or agreement is unfair, it shall be recorded according to thefair value of intangible assets. The initial investment cost of intangible assets obtained through the exchange of non-
monetary assets shall be determined in accordance with the Accounting Standards for Business Enterprises No. 7 -Exchange of Non-Monetary Assets. The initial investment cost of intangible assets obtained through debt restructuringshall be determined in accordance with the Accounting Standards for Business Enterprises No.12 - Debt Restructuring.The entry value of intangible assets obtained by absorption and merger of enterprises under the same control shall bedetermined according to the book value of the merged party; the entry value of intangible assets obtained by absorptionand merger of enterprises not under the same control shall be determined at fair value.
The Company shall analyze and judge the service life of intangible assets when obtaining them. Intangible assetswith limited service life are amortized averagely by stages using the straight line method from the time when the intangibleassets are available for use to the time when they are no longer recognized as intangible assets, and are included in profitsand losses. Intangible assets with uncertain service life are not amortized.At the end of each year, the Company reviews the service life and amortization method of intangible assets withlimited service life. If the service life and amortization method of intangible assets are different from previous estimates,the amortization period and amortization method shall be changed. The Company reviews the service life of intangibleassets with uncertain service life in each accounting period. If there is evidence that the service life of intangible assets islimited, its service life shall be estimated and disposed of in accordance with the above provisions.For the impairment test method and impairment provision method of intangible assets, please refer to Item (26)Related notes on impairment of long-term assets of this accounting policy.
(2) Accounting policy for internal R&D expenditure
√ Applicable □ Not applicable
Criteria for dividing research stage expenditure and development stage expenditure of R&D projects: research stageexpenditure refers to the expenditure incurred by original and planned investigation to acquire and understand newscientific or technological knowledge; expenditure in the development stage refers to the expenditure incurred in applyingresearch results or other knowledge to a plan or design to produce new or substantially improved materials, devices andproducts before commercial production or use.
The expenditure of intangible assets independently developed by the Company in the research stage of R&D projectsshall be included in the current profits and losses when incurred. Expenditures in the development stage of developmentprojects can be recognized as intangible assets only if the following conditions are met at the same time:
(1) It is technically feasible to complete the intangible asset so that it can be used or sold;
(2) It has the intention to complete the intangible assets for use or sale;
(3) The ways in which intangible assets generate economic benefits include proving that there is a market for theproducts produced by using the intangible assets or for the intangible assets themselves, and that the intangible assets willbe used internally, their usefulness shall be proved;
(4) There are sufficient technical, financial and other resources to complete the development of the intangible assets,and is the ability to use or sell the intangible assets;
(5) The expenditure attributable to the development stage of the intangible asset can be reliably measured. Theexpenditure of the development stage that has been costed in the previous period will not be adjusted.
30. Long-term assets impairment
√ Applicable □ Not applicable
If long-term equity investment, investment real estate, fixed assets, construction in progress, intangible assets, rightof use assets and other long-term assets measured by cost model show signs of impairment on the balance sheet date,impairment test shall be carried out. If the result of the impairment test indicates that the recoverable amount of the assetis lower than its book value, an impairment provision shall be made according to the difference and included in theimpairment loss. The recoverable amount is the higher of the fair value of the asset less disposal costs and the presentvalue of the asset's estimated future cash flows. The provision for asset impairment shall be calculated and recognized onan individual basis. If it was difficult to estimate the recoverable amount of any individual asset, its recoverable amountshall be determined based on the asset group to which the concerned asset belongs. The group of assets is the minimumgroup of assets forming a cash-generating unit.
Goodwill is tested for impairment at least at the end of each year. The Company conducts goodwill impairment test.The book value of goodwill due to a business combination is amortized to a related asset group using a reasonable methodat the acquisition date; where it is not possible for the book value of goodwill to be amortized to related asset groups, thebook value thereof is amortized to related portfolio of asset groups. When the book value of goodwill is apportioned tothe relevant asset group or asset group portfolio, it shall be apportioned according to the proportion of the fair value ofeach asset group or asset group portfolio to the total fair value of the relevant asset group or asset group portfolio. If the
fair value is difficult to measure reliably, it shall be apportioned according to the proportion of the book value of eachasset group or asset group portfolio to the total book value of the relevant asset group or asset group portfolio. Whenconducting impairment tests on the related asset portfolio or portfolio of asset groups that contain(s) goodwill, if there areindications of impairment, test the asset groups or groups of asset groups that do(es) not contain goodwill firstly andcalculate the recoverable amount, and compare it with the related book value to confirm the corresponding impairmentloss. Then conduct an impairment test on the asset group or asset group portfolio containing goodwill, and compare thebook value (including the book value of the apportioned goodwill) of these relevant asset groups or asset group portfolioswith their recoverable amount. If the recoverable amount of the relevant asset group or asset group portfolios is lowerthan its book value, the impairment loss of goodwill shall be recognized.
Once the above asset impairment losses are recognized, they shall not be reversed in subsequent accounting periods.
31. Long-term unamortized expenses
√ Applicable □ Not applicable
Long-term unamortized expenses refer to the expenses incurred by the Company but should be shared in the currentand subsequent periods with an amortization period of more than one year, which are recorded as actual expenses andamortized by the straight line method within its expected benefit period. If the long-term unamortized expense item cannot benefit the subsequent accounting period, the amortized value of the item that has not yet been amortized will betransferred to the current profits and losses.
32. Contractual liabilities
(1) Recognition method of contract liabilities
√ Applicable □ Not applicable
Contract liabilities reflect the obligation of the Company to transfer goods to customers for consideration receivedor receivable from customers. If the customer has paid the contract consideration or the Company has obtained the rightto collect the contract consideration unconditionally before the Company transfers the goods to the customer, the contractliabilities shall be recognized according to the amount received or receivable at the earlier of the actual payment by thecustomer and the due payment.
Contract assets and contract liabilities under the same contract are presented on a net basis, and those under differentcontracts are not offset.
33. Employee remuneration
(1) Accounting treatment of short-term remuneration
√ Applicable □ Not applicable
Employee remuneration refers to various forms of remuneration or compensation given by the Company to obtainservices provided by employees or terminate labor relations. The welfare provided by the enterprise to the spouses,children, dependents, survivors of deceased employees and other beneficiaries of employees also belongs to the employeeremuneration. Employee remuneration mainly includes short-term remuneration, post employment benefits, terminationbenefits and other long-term employee benefits.
Accounting treatment of short-term remuneration:
Short-term remuneration refers to the remuneration of employees that the Company needs to pay in full within 12months after the end of the annual reporting period for employees to provide relevant services, except for post employmentbenefits and termination benefits. During the accounting period when employees provide services, the Companyrecognizes the short-term remuneration actually incurred as liabilities, and includes it in the relevant asset costs andexpenses according to the beneficiary of the services provided by employees.
(2) Accounting treatment of post employment benefits
√ Applicable □ Not applicable
Post employment benefits refer to various forms of remuneration and benefits provided by the Company after theretirement of employees or the termination of labor relations with the Company in order to obtain the services providedby employees, except short-term remuneration and termination benefits. The post employment welfare plan includes adefined contribution plan and a defined benefit plan. Where the defined contribution plan is a post employment welfareplan in which the Company will no longer assume further payment obligations after paying fixed fees to an independentfund; a defined benefit plan refers to a post employment benefit plan other than a defined contribution plan.
(1) Defined contribution plan
The defined contribution plan includes basic endowment insurance and unemployment insurance. During the
accounting period when employees provide services to the Company, the amount payable shall be calculated accordingto the payment base and proportion stipulated locally, recognized as liabilities, and included in the current profits andlosses or related asset costs.During the accounting period when employees provide services, the amount payable calculated according to thedefined contribution plan is recognized as a liability and included in the current profits and losses or related asset costs.
(2) Defined benefit plan
The Company shall attribute benefit obligations under a defined benefit plan to periods of service provided byemployees according to the formula determined by projected unit credit method, and include them in current profits andlosses or the related cost of assets. The cost of employee remuneration caused by the Company's defined benefit planincludes the following components:
A. Service costs include current service costs, past service costs and settlement gains or losses. Where the currentservice cost refers to the increase in the present value of the obligations of the defined benefit plan caused by the provisionof services by employees in the current period; the past service cost refers to the increase or decrease in the present valueof the obligations of the defined benefit plan related to the services of employees in the previous period caused by therevision of the defined benefit plan.
B. The net interest on the net liabilities or assets of the defined benefit plan includes the interest income of the planassets, the interest expenses of the defined benefit plan obligations and the interest affected by the asset ceiling.
C. Changes in net liabilities or net assets of the defined benefit plan are remeasured.
Unless other accounting standards require or allow the cost of employee welfare to be included in the cost of assets,the Company will include Items A and B above in the current profits and losses; Item C is included in other comprehensiveincome and will not be reversed to profits and losses in subsequent accounting periods, but these amounts recognized inother comprehensive income can be transferred within equity.
(3) Accounting treatment of termination benefits
√ Applicable □ Not applicable
Termination benefits refer to the compensation given to employees by the Company to terminate the laborrelationship with employees before the expiration of their labor contracts, or to encourage employees to voluntarily acceptlayoffs. If the Company provides termination benefits to employees, the employee remuneration liabilities arising fromtermination benefits shall be recognized as soon as possible, whichever is the following, and shall be included in thecurrent profits and losses: When the Company cannot unilaterally withdraw the termination benefits provided due to thetermination of labor relations plans or layoffs; when the Company confirms the costs or expenses related to thereorganization involving the payment of termination benefits.
(4) Accounting treatment of other long-term employee benefits
√ Applicable □ Not applicable
Other long-term employee benefits refer to all employee remuneration except short-term salaries, post employmentbenefits and termination benefits, including long-term paid absenteeism, long-term disability benefits, long-term profitsharing plans, etc. Other long-term employee benefits provided by the Company to employees that meet the conditionsof the defined contribution plan shall be dealt with in accordance with the relevant provisions of the defined contributionplan; for other long-term employee welfare except for the above circumstances, the net liabilities or net assets of otherlong-term employee welfare shall be recognized and measured in accordance with the relevant provisions of the definedbenefit plan. At the end of the reporting period, the Company attributed the welfare obligations arising from other long-term employee welfare to the period when employees provided services and included them in the current profits andlosses or related asset costs.
34. Lease liabilities
√ Applicable □ Not applicable
On the beginning date of the lease term, the Company recognizes the present value of the unpaid lease payments asa lease liability, except for short-term leases and low-value asset leases.
In calculating the present value of the lease payment, the Company, as the lessee, adopts the embedded interest rateof the lease as the discount rate; if the embedded interest rate of the lease cannot be determined, the incremental borrowingrate of the Company shall be used as the discount rate.
The Company calculates the interest expense of the lease liabilities during each period of the lease term at a fixedcyclical interest rate and includes it in the current profits and losses. The amount of variable lease payments not includedin the measurement of lease liabilities is included in the current profits and losses when actually incurred.
After the beginning date of the lease term, when the substantial fixed payment changes, the estimated amount payableof the guaranteed residual value changes, the index or ratio used to determine the lease payment changes, the evaluationresults or actual exercise of the purchase option, renewal option or termination option changes, the Company remeasuresthe lease liabilities according to the present value of the changed lease payment.
35. Estimated liabilities
√ Applicable □ Not applicable
If the Company's obligations related to contingencies meet the following conditions at the same time, they will berecognized as liabilities: (1) The obligation is the current obligation undertaken by the Company; (2) The performance ofthis obligation may lead to the outflow of economic benefits; (3) The amount of the obligation can be reliably measured.
It is expected that all or part of the expenses required for liabilities will be compensated by a third party or otherparties, and the amount of compensation will be recognized separately as an asset when it is basically determined that itcan be received, and the amount of compensation recognized will not exceed the book value of the recognized liabilities.The estimated liabilities are initially measured according to the best estimate of the expenditure required to fulfill therelevant current obligations, and factors such as risks, uncertainties and time value of money related to contingencies aretaken into account. If the time value of money has a significant impact, the best estimate is determined by discounting therelevant future cash outflows.
On the balance sheet date, the Company reviews the book value of estimated liabilities, and if there is conclusiveevidence that the book value cannot truly reflect the current best estimate, the book value shall be adjusted according tothe current best estimate.
36. Share-based payments
√ Applicable □ Not applicable
1. Types of share-based payments
The share-based payment of the Company is divided into cash settled share-based payment and equity settled share-based payment.
The share-based payment settled by equity shall be measured at the fair value of the equity instruments granted toemployees. If the right is exercisable immediately after the grant, it shall be included in the relevant costs or expensesaccording to the fair value of the equity instruments on the grant date, and the capital reserve shall be increasedaccordingly. If the right can be exercised only after completing the services within the waiting period or meeting theprescribed performance conditions, on each balance sheet date within the waiting period, the services obtained in thecurrent period shall be included in the relevant costs or expenses and capital reserves on the basis of the best estimate ofthe number of equity instruments exercisable and according to the fair value on the grant date of equity instruments. Afterthe exercisable date, the recognized relevant costs or expenses and the total amount of owner's equity will not be adjusted.
Cash settled share-based payments are measured at the fair value of the liabilities assumed by the Companycalculated and determined on the basis of shares or other equity instruments. If the right is exercisable immediately afterthe grant, the fair value of the Company's liabilities shall be included in the relevant costs or expenses on the date of grant,and the liabilities shall be increased accordingly. For cash settled share-based payment that can be exercised only aftercompleting the services in the waiting period or meeting the prescribed performance conditions, on each balance sheetdate in the waiting period, based on the best estimate of the exercisable rights, the services obtained in the current periodshall be included in the cost or expense and the corresponding liabilities according to the fair value amount of theCompany's liabilities. On each balance sheet date and settlement date before the settlement of relevant liabilities, the fairvalue of liabilities shall be re-measured, and the changes shall be included in the current profits and losses.
2. Accounting treatment for the implementation, modification and termination of share-based payment plans
No matter how the terms and conditions of the equity instruments granted are modified, or even the grant of theequity instruments is cancelled or the equity instruments are settled, the Company shall at least recognize thecorresponding services obtained by measuring the fair value of the equity instruments granted on the grant date, unlessthe right is not exercisable due to the failure to meet the exercisable conditions of the equity instruments (except marketconditions).
If the Company cancels the granted equity instruments or settles the granted equity instruments during the waitingperiod (except those cancelled due to failure to meet the exercisable conditions), the treatment is as follows:
(1) Cancel or settle as accelerated exercisable and immediately confirm the amount that should have been confirmedin the remaining waiting period.
(2) All payments to employees at the time of cancellation or settlement shall be treated as repurchase of equity, andthe part paid for repurchase that is higher than the fair value of the equity instrument on the repurchase date shall be
included in the current expenses.
(3) If a new equity instrument is granted to an employee and it is determined on the grant date of the new equityinstrument that the new equity instrument granted is used to replace the cancelled equity instrument, the Company shalldeal with the granted alternative equity instrument in the same way as the terms and conditions of the original equityinstrument are amended.
37. Preferred shares, perpetual bonds and other financial instruments
□ Applicable √ Not applicable
38. Revenue
(1) Accounting policies adopted for revenue recognition and measurement
√ Applicable □ Not applicable
Revenue is the total inflow of economic benefits formed in the daily activities of the Company, which lead to theincrease of owner's equity and are unrelated with the capital invested by the owner.
The Company recognizes revenue when it performs its performance obligations under the contract, that is, when thecustomer obtains control of the relevant goods. Obtaining control of relevant goods means being able to dominate the useof the goods and obtain almost all economic benefits from it, including the ability to prevent other parties from dominatingthe use of the goods and obtaining almost all economic benefits from it.
The transaction price is the amount of consideration that the Company is expected to be entitled to receive as a resultof the transfer of goods to customers, excluding payments received on behalf of third parties and payments that theCompany expects to return to customers. In determining the contract transaction price, if there is a variable consideration,the Company determines the best estimate of the variable consideration according to the expected value or the most likelyamount, and includes it in the transaction price at an amount not exceeding the amount that is most likely not to besignificantly reversed when the relevant uncertainties are eliminated. If there is a significant financing component in thecontract, the Company will determine the transaction price according to the amount payable in cash when the customerobtains the control over the goods. The difference between the transaction price and the contract consideration will beamortized by the effective interest rate method during the contract period. If the interval between the customer obtainingthe control over the goods and the customer paying the price is not more than one year, the Company will not considerthe financing component. When the consideration that the Company is entitled to collect from the customer due to thetransfer of goods is in the form of non-cash, the Company shall determine the transaction price according to the fair valueof the non-cash consideration on the contract start date. Where the fair value of the non-cash consideration cannot bereasonably estimated, the Company indirectly determines the transaction price with reference to the separate selling priceof the goods it undertakes to transfer to customers. The Company expects to refund the amount to the customer byoffsetting the consideration payable against the transaction price in addition to obtaining other clearly identifiable goodsfrom the customer. If the consideration payable to customers exceeds the fair value of clearly distinguishable goodsobtained from customers, the excess amount shall be used as the consideration payable to customers to offset thetransaction price. If the fair value of clearly distinguishable goods obtained from customers cannot be reasonablyestimated, the Company will offset the transaction price in full with the consideration payable to customers. In theaccounting treatment of the transaction price offset by the consideration payable to customers, the Company offsets thecurrent income at the later of the recognition of relevant income and the payment (or commitment to pay) of customerconsideration.
If the contract contains two or more performance obligations, the Company shall, on the commencement date of thecontract, apportion the transaction price to each individual performance obligation according to the relative proportion ofthe individual selling price of the goods promised by each individual performance obligation, and measure the incomeaccording to the transaction price apportioned to each individual performance obligation. In case of subsequent changesin the transaction price, the Company shall apportion the amount of such subsequent changes to the performanceobligations in the contract on the basis adopted on the commencement date of the contract. The transaction price will notbe redistributed due to the change of the separate selling price after the contract start date.
If one of the following conditions is met, the Company shall fulfill its performance obligations within a certain periodof time; otherwise, it belongs to the performance obligation at a certain point:
(1) Customers obtain and consume the economic benefits brought by the Company's performance at the same timeas the Company's performance;
(2) Customers can control the goods under construction in the process of performance of the Company;
(3) The goods produced in the process of performance by the Company have irreplaceable uses, and the Companyhas the right to collect payments for the accumulated performance so far during the whole contract period.
For the performance obligations within a certain period of time, the Company recognizes the revenue in accordancewith the performance progress during the period, except that the performance progress cannot be determined reasonably.The Company determines the performance progress of providing services in accordance with the investment method.When the performance progress cannot be reasonably determined, if the cost incurred by the Company is expected to becompensated, the revenue shall be recognized according to the amount of cost incurred until the performance progresscan be reasonably determined.For the performance obligations performed at a certain time point, the Company recognizes revenue at the time whenthe customer obtains control over the relevant goods. In determining whether customers have obtained control of goods,the Company will consider the following signs:
(1) The Company enjoys the current collection right in respect of the goods, that is, the customer has the currentpayment obligation in respect of the goods;
(2) The Company has transferred the legal ownership of the goods to the customer, that is, the customer has ownedthe legal ownership of the goods;
(3) The Company has transferred the physical goods to the customer, that is, the customer has occupied the physicalgoods;
(4) The Company has transferred the main risks and rewards of the ownership of the goods to the customer, that is,the customer has obtained the main risks and rewards of the ownership of the goods;
(5) The customer has accepted the product;
(6) Other signs that customers have gained control of the goods.
2. Specific recognition methods related to the main activities of the Company to obtain revenue
The Company's sales model is mainly divided into four modes: dealer exclusive store sales, direct-sale exclusivestore sales, bulk user business sales and export sales. The specific methods for recognizing sales revenue are as follows:
(1) Dealer exclusive store sales: sales through exclusive stores opened by dealers. After receiving customer ordersand collecting a certain proportion of deposits from customers (the proportion of deposits shall be decided by the dealersthemselves), the exclusive stores opened by the dealers shall send the sales orders confirmed by customers to the Company,and pay all the payment to the Company according to the settlement price. The Company will begin to organize productionaccording to the orders. After the Company completes the production of products, the products are transported to thedelivery place designated by the logistics company corresponding to the dealers, that is, the sales revenue is recognized;dealers in the Pearl River Delta region can choose to pick up their own products according to their own resource allocationconditions, and the Company recognizes sales revenue when delivering products.
(2) Direct exclusive store sales: sales through exclusive stores established by the Company as subsidiaries andbranches. After collecting a certain proportion of the deposit, the direct exclusive store sends the sales order confirmedby the customer to the Company, and the Company arranges production according to the order. The direct exclusive storeshall notify the Company to deliver the goods after receiving the remaining payment from the customer, and the Companyshall be responsible for the installation. After the Company receives all the payment for goods, the revenue is recognizedwhen the installation is completed.
(3) Bulk user business sales: the Company produces and sells supporting overall household products for large-scalereal estate projects. The Company recognizes revenue when the customer obtains control of the goods and the Companyhas actually obtained the inflow of economic benefits related to the goods.
(4) Export sales: The Company shall recognize the sales revenue when it has completed the customs declarationprocedures, the goods have crossed the ship's rail (the contract stipulates that the goods have been traded at FOB), obtainedthe bill of lading and completed the delivery procedures with the bank.
(2) The adoption of different business models in similar businesses leads to differences in accounting policies forrevenue recognition
□ Applicable √ Not applicable
39. Contract costs
√ Applicable □ Not applicable
Contract costs include incremental costs incurred in obtaining contracts and contract performance costs.
The incremental cost incurred to obtain the contract refers to the cost (such as sales commission) that will not occurif the Company does not obtain the contract. If the cost is expected to be recovered, the Company recognizes it as an assetas the cost of contract acquisition. Other expenses incurred by the Company for the acquisition of contracts other than the
incremental costs expected to be recovered shall be included in the current profits and losses when incurred.If the cost incurred for the performance of the contract is not applicable to the scope of relevant standards such asinventory, fixed assets or intangible assets, and the following conditions are met at the same time, the Company shallrecognize it as an asset as the cost of contract performance:
(1) The cost is directly related to a current or expected contract, including direct labor, direct materials,manufacturing expenses (or similar expenses), costs clearly borne by the customer and other costs incurred solely as aresult of the contract;
(2) This cost increases the resources that the enterprise will use to fulfill its performance obligations in the future;
(3) The cost is expected to be recovered.
The assets recognized at the cost of contract acquisition and the assets recognized at the cost of contract performanceare amortized on the same basis as the recognition of goods or services related to the assets and included in the currentprofits and losses.
If the book value of assets related to contract costs is higher than the difference between the following two items,the Company shall make provision for impairment of the excess part and recognize it as an asset impairment loss:
(1) The remaining consideration expected to be obtained by the enterprise due to the transfer of goods related to theasset;
(2) The estimated cost to be incurred for the transfer of the related goods.
If the factors of impairment in the previous period change after that, so that the difference between (1) and (2) ishigher than the book value of the asset, the original provision for asset impairment shall be reversed and included in thecurrent profits and losses, but the book value of the asset after the reversal shall not exceed the book value of the asset onthe reversal date assuming that no provision for impairment is made.
40. Government subsidies
√ Applicable □ Not applicable
1. Types of government subsidies
Government subsidies refer to monetary assets or non-monetary assets obtained by the Company from thegovernment free of charge, including government subsidies related to assets and government subsidies related to income.
Government subsidies related to assets refer to government subsidies obtained by the Company for purchase andconstruction or other forms of long-term assets.
The government subsidies related to income refer to other government subsidies other than those related to assets.
2. Recognition principle and time point of government subsidies
Recognition principle of government subsidies:
(1) The Company can meet the conditions attached to government subsidies;
(2) The Company can receive government subsidies.
Government subsidies can only be recognized when the above conditions are met at the same time.
3. Measurement of government subsidies
(1) If the government subsidy is a monetary asset, the Company shall measure it according to the amount receivedor receivable;
(2) If the government subsidy is a non-monetary asset, the Company shall measure it at fair value; if the fair valuecannot be obtained reliably, it shall be measured at the nominal amount (the nominal amount is 1 yuan).
4. Accounting treatment of government subsidies
(1) Government subsidies related to assets shall be offset against the book value of related assets or recognized asdeferred income at the time of acquisition. If it is recognized as deferred income, it shall be included in profits and lossesby stages in accordance with a reasonable and systematic method within the service life of the relevant assets. Governmentsubsidies measured at their nominal amounts are directly included in the current profits and losses.
(2) Government subsidies related to income shall be handled according to the following circumstances:
A. If it is used to compensate the Company for related costs or losses in subsequent periods, it shall be recognizedas deferred income at the time of acquisition, and shall be included in the current profits and losses or offset related costs
during the period when the relevant costs or losses are recognized.B. If it is used to compensate the relevant costs or losses incurred by the Company, it shall be directly included inthe current profits and losses or offset the relevant costs at the time of acquisition.
(3) For government subsidies included in both asset related parts and income related parts, if they can bedistinguished, they will be accounted for separately in different parts; those that are difficult to distinguish are classifiedas income related government subsidies as a whole.
(4) Government subsidies related to the daily operation of the Company shall be included in other income or offsetagainst related costs and expenses according to the essence of economic business. Governmental subsidies unrelated tothe Company's daily activities are included in non-operating income and expenditure. If the finance allocates the discountfunds directly to the Company, the Company will offset the relevant borrowing costs with the corresponding discount.
(5) If the confirmed government subsidies need to be returned, they shall be dealt with according to the followingcircumstances:
A. If the book value of the relevant assets is offset at the time of initial recognition, the book value of the assets shallbe adjusted.
B. If there are relevant deferred income, the book amount of relevant deferred income shall be offset, and the excesspart shall be included in the current profits and losses.
C. In other cases, it shall be directly included in the current profits and losses.
41. Deferred tax assets/deferred tax liabilities
√ Applicable □ Not applicable
The Company shall determine its tax basis when obtaining assets and liabilities. If there is a temporary differencebetween the book value of assets and liabilities and their tax basis, the resulting deferred income tax assets or deferredincome tax liabilities shall be recognized in accordance with the regulations.
1. Recognition of deferred income tax assets
(1) The Company recognizes the deferred income tax assets arising from the deductible temporary differences to theextent that it is likely to obtain the taxable income used to offset the deductible temporary differences. However, deferredincome tax assets arising from the initial recognition of assets or liabilities in transactions with the followingcharacteristics are not recognized: ① The transaction is not a business merger; ② At the time of transaction, neitheraccounting profit nor taxable income (or deductible loss) will be affected.
(2) The Company shall recognize the corresponding deferred income tax assets if the deductible temporarydifferences related to the investment of subsidiaries, associates and joint ventures meet the following conditions at thesame time: ① The temporary differences are likely to be reversed in the foreseeable future; ② It is likely to obtain thetaxable income used to deduct the deductible temporary difference in the future.
(3) For the deductible losses and tax credits that can be carried forward to subsequent years in accordance with thetax law, they shall be treated as deductible temporary differences, and the corresponding deferred income tax assets shallbe recognized to the extent that it is likely to obtain future taxable income to offset the deductible losses and tax credits.
2. Recognition of deferred income tax liabilities
(1) Except for the deferred income tax liabilities arising from the following transactions, the Company recognizesall deferred income tax liabilities arising from taxable temporary differences: ① Initial recognition of goodwill; ② Initialrecognition of assets or liabilities arising from transactions that meet the following characteristics at the same time: Thetransaction is not a business merger; at the time of transaction, neither accounting profit nor taxable income (or deductibleloss) will be affected.
(2) The Company recognizes corresponding deferred income tax liabilities for taxable temporary differences relatedto investments in subsidiaries, associates and joint ventures. However, except that the following conditions are met at thesame time: ① The investment enterprise can control the time for the reversal of temporary differences;
② The temporary difference is likely not to reverse in the foreseeable future.
42. Leasing
(1) Accounting treatment of operating leasing
□ Applicable √ Not applicable
(2) Accounting treatment of financial leasing
□ Applicable √ Not applicable
(3) Determination method and accounting treatment method of lease under the new lease standards
√ Applicable □ Not applicable
Lease refers to a contract in which the lessor transfers the right to use assets to the lessee for consideration within acertain period of time.
1. Identification of leases
On the commencement date of the contract, the Company evaluates whether the contract is a lease or includes alease. A contract is a lease or includes a lease if a party transfers the right to control the use of one or more identifiedassets for a period of time in exchange for consideration. In order to determine whether the contract transfers the right tocontrol the use of the identified assets within a certain period of time, the Company makes the following assessment:
(1) Whether the contract involves the use of the identified assets. The identified asset may be explicitly designatedby contract or implicitly designated when the asset is available for use by the customer, and the asset is physicallydistinguishable, or if part of the production capacity or other parts of the asset are physically indistinguishable butrepresent substantially all of production capacity of the asset, thus enabling the customer to obtain almost all the economicbenefits arising from the use of the asset. If the supplier of the asset has the right to substantially replace the assetthroughout the use period, the asset is not an identified asset;
(2) Whether the lessee is entitled to almost all the economic benefits arising from the use of the identified assetsduring the use period;
(3) Whether the lessee has the right to dominate the use of the identified assets during the use period.
2. Spinoff and consolidation of leases
If the contract includes multiple separate leases at the same time, the Company will split the contract and conductaccounting treatment for each separate lease.
If the following conditions are met at the same time, the right to use the identified assets constitutes a separate leasein the contract:
(1) The lessee may profit from the use of the asset alone or in conjunction with other readily available resources;
(2) The asset is not highly dependent or highly related to other assets in the contract.
3. As lessee
(1) Right of use assets
See Item (24) Right of use assets of this accounting policy for determination method and accounting treatmentmethod of right of use assets.
(2) Lease liabilities
See item (30) Lease liabilities of this accounting policy for the determination method and accounting treatmentmethod of lease liabilities.
(3) Assessment of lease term
The lease term is the irrevocable period during which the Company, as the lessee, has the right to use the leasedassets.
The Company has a renewal option, that is, the right to choose to renew the asset, and if it is reasonably determinedthat the option will be exercised, the lease term also includes the period covered by the renewal option. The Company hasthe option to terminate the lease, that is, the option to terminate the lease of the asset, but it is reasonably determined thatthe option will not be exercised, and the lease period includes the period covered by the option to terminate the lease.
If a material event or change occurs within the Company's control and affects whether the Company reasonablydetermines that it will exercise the corresponding option, the Company reassesses whether it reasonably determines thatit will exercise the renewal option, the purchase option or not to exercise the termination option.
(4) Lease change
If the lease changes and meets the following conditions at the same time, the Company will treat the lease change asa separate lease for accounting treatment:
A. The lease change expands the scope of the lease by increasing the right to use one or more leased assets;
B. The increased consideration is equivalent to the amount of the separate price for most of the expansion of the
lease adjusted for the circumstances of the contract.
(5) Short-term leases and low-value asset leases
Short-term lease refers to a lease with a lease term of no more than 12 months and excluding the purchase option onthe beginning date of the lease term. Low value asset lease refers to the lease with lower value when the single leasedasset is a brand-new asset. Where the Company sublets or expects to sublet leased assets, the original lease does notbelong to the lease of low-value assets.
The Company chooses not to recognize the right of use assets and lease liabilities for short-term leases and low-value asset leases, and the relevant lease payments are included in the current profit and loss or relevant asset costsaccording to the straight-line method in each period of the lease term.
4. As lessor
On the lease commencement date, the Company divides the lease into financial lease and operating lease. Financelease refers to a lease that essentially transfers almost all the risks and rewards related to the ownership of leased assetsregardless of whether the ownership is finally transferred or not. Operating leases refer to leases other than finance leases.When the Company is the sublessee lessor, the sublease is classified based on the use right assets generated from theoriginal lease.
(1) Accounting treatment of for operating leasing
The lease receipts from operating leases are recognized as rental income on a straight-line basis in each period of thelease term. The Company capitalizes the initial direct expenses related to operating leases, and allocates them into thecurrent profits and losses on the same basis as the recognition of rental income during the lease term. The amount ofvariable lease payments not included in the lease receipts shall be included in the current profits and losses when actuallyincurred.
(2) Accounting treatment of financial leasing
On the lease commencement date, the Company recognizes the finance lease receivables for the finance lease andterminates the recognition of the finance lease assets. When the Company initially measures the finance lease receivables,the net amount of the lease investment is taken as the entry value of the finance lease receivables. The net lease investmentis the sum of the unguaranteed residual value and the present value of the lease receipts not received on the beginningdate of the lease term discounted at the interest rate embedded in the lease.
The Company calculates and recognizes the interest income of each period within the lease term according to thefixed periodic interest rate. For the termination of recognition and impairment of financial leasing receivables, pleaserefer to 10. Notes on financial instruments of this accounting policy.
The amount of variable lease payments not included in the measurement of net lease investment shall be included inthe current profit and loss when it actually occurs.
5. After-sale leaseback transactions
The Company assesses and determines whether the transfer of assets in the after-sale leaseback transaction is a salein accordance with the provisions of 38. Revenue recognition method of this accounting policy.
(1) As lessee
If the transfer of assets in the after-sale leaseback transaction is a sale, the Company measures the right of use assetsformed by the after-sale leaseback according to the part of the book value of the original assets related to the right of useobtained by the leaseback, and only recognizes the relevant gains or losses on the rights transferred to the lessor.
If the fair value of the sale consideration is different from the fair value of the asset, or the lessor does not collectrent at the market price, the Company will account for the amount of the sale consideration lower than the market priceas prepaid rent, and the amount higher than the market price as additional financing provided by the lessor to the lessee;at the same time, the relevant sales gains or losses are adjusted according to the fair value.
If the transfer of assets in the after-sale leaseback transaction does not belong to sales, the Company will continue torecognize the transferred assets and recognize a financial liability equivalent to the transfer income.
(2) As lessor
If the transfer of assets in the after-sale leaseback transaction belongs to sales, the Company shall conductcorresponding accounting treatment according to the purchase of assets, and shall conduct accounting treatment for thelease of assets according to the leasing standards.
If the fair value of the sales consideration is different from the fair value of the asset, or the Company does not collectrent at the market price, the Company will account for the amount of the sales consideration lower than the market price
as rent received in advance, and the amount higher than the market price as additional financing provided by the Companyto the lessee; at the same time, the rental income is adjusted according to the market price.If the transfer of assets in the after-sale leaseback transaction does not belong to sales, the Company recognizes afinancial asset equal to the transfer income.
43. Other significant accounting policies and accounting estimates
√ Applicable □ Not applicable
Other comprehensive income refers to the gains and losses that the Company has not recognized in the current profitsand losses in accordance with other accounting standards. They are presented in the following two categories:
1. Other comprehensive income items that cannot be reclassified into profits and losses in subsequent accountingperiods mainly include changes caused by the re-measurement of net liabilities or net assets of defined benefit plans, theshare of other comprehensive income that cannot be reclassified into profits or losses in the investee's subsequentaccounting periods accounted for in accordance with the equity method, and changes in the fair value of financial assetsdesignated to be measured at fair value and whose changes are included in other comprehensive income.
2. Other comprehensive income items that will be reclassified into profits and losses when the prescribed conditionsare met in the subsequent accounting period mainly include the share of other comprehensive income that the investeewill be classified into profits and losses when the prescribed conditions are met in the subsequent accounting period, thepart of gains or losses arising from cash flow hedging instruments that belongs to effective hedging, and the translationdifference of foreign currency financial statements.
44. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable □ Not applicable
| Contents and reasons for changes in accounting policies | Approval procedure | Remarks (name and amount of statement items significantly affected) |
| In December 2021, the Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises No. 15 (CK [2021] No. 35) (hereinafter referred to as "Interpretation No.15"). The contents of "Accounting treatment of products or by-products produced before fixed assets reach the predetermined usable state or during research and development" and "Judgment on loss-making contracts" shall come into force as of January 1, 2022. The Company shall implement it from the date of regulation. | According to the relevant provisions of the Rules for the Listing of Stocks on the Shanghai Stock Exchange (revised in February 2023), if the accounting policy is changed in accordance with laws and regulations or the requirements of the unified national accounting system, it may be directly announced without the deliberation of the board of directors and the general meeting of shareholders | See other instructions (1) |
| In November 2022, the Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises No. 16 (CK [2022] No. 31) (hereinafter referred to as "interpretation No.16"). The contents of "accounting treatment of the income tax impact on dividends related to financial instruments classified by the issuer as equity instruments" and "accounting treatment of the enterprise's modification of stock payment settled in cash into stock payment settled in equity" shall enter into force as of the date of promulgation. The Company shall implement it from the date of regulation. | See other instructions (2) |
Others
(1) On December 30, 2021, the Ministry of Finance issued Interpretation No.15, "accounting treatment for theexternal sales of products or by-products produced by enterprises before their fixed assets reach the expected usable stateor in the process of R&D" and "judgment on loss contracts", which shall be implemented by the Company from January1, 2022.
A. Accounting treatment of trial operation sales
Interpretation No. 15 clarifies the accounting treatment and presentation of the external sales of products orbyproducts produced before the fixed assets reach the expected usable state or in the process of R&D, and stipulates thatthe net amount of revenue related to trial operation sales after offsetting the relevant costs shall not be used to offset thecost of fixed assets or R&D expenditure. The provisions shall come into force on January 1, 2022, and retroactively adjustand compare the financial statements for trial sales between the beginning of the earliest period for the presentation offinancial statements and January 1, 2022.B. Judgment on loss making contractsInterpretation No. 15 clarifies that the "cost of performing the contract" considered by an enterprise in judgingwhether a contract constitutes a loss making contract shall include the incremental cost of performing the contract andthe apportionment amount of other costs directly related to the performance of the contract. The provisions shall comeinto force on January 1, 2022, and shall be implemented for contracts that have not fulfilled all their obligations on January1, 2022. The cumulative impact shall be adjusted to the retained earnings and other related financial statement items atthe beginning of the year on the implementation date, and the data of comparative financial statements in the previousperiod shall not be adjusted.The adoption of Interpretation No. 15 by the Company has not had a material impact on the financial position andresults of operations of the Company.
(2) On November 30, 2022, the Ministry of Finance issued the Accounting Standards for Business EnterprisesInterpretation No. 16 (hereinafter referred to as "Interpretation No. 16"), and the Company shall implement the contentsof "accounting treatment on the income tax impact of dividends related to financial instruments classified by the issuer asequity instruments" and "accounting treatment on the revision of cash settled share-based payment by enterprises to equitysettled share-based payment" from the date of promulgation.
A. Accounting treatment on the income tax impact of dividends related to financial instruments classified as equityinstruments by the issuer
Interpretation No. 16 clarifies that for financial instruments classified as equity instruments, if the relevant dividendexpenditure is deducted before enterprise income tax in accordance with the relevant provisions of tax policies, theenterprise shall recognize the income tax impact related to dividends when confirming dividends payable. The provisionsshall come into effect on November 30, 2022. If the dividends payable of financial instruments classified as equityinstruments were recognized before January 1, 2022 and the recognition of related financial instruments was notterminated on January 1, 2022, retrospective adjustment and comparison of financial statements shall be made.
B. Accounting treatment of amending cash settled share-based payment to equity settled share-based payment
Interpretation No. 16 clarifies that if the terms and conditions of the cash settled share-based payment agreement areamended to make it an equity settled share-based payment, on the date of amendment, the enterprise shall measure theequity settled share-based payment at the fair value on the date of grant of equity instruments, record the services obtainedinto the capital reserve, and terminate the recognition of the liabilities recognized on the date of amendment for cashsettled share-based payment. The difference between the two is included in the current profits and losses. The provisionsshall come into force on November 30, 2022, and the cumulative impact shall be adjusted to the retained earnings andother related financial statement items on January 1, 2022, and the information of comparable periods shall not be adjusted.
The adoption of Interpretation No. 16 by our company did not have a significant impact on the Company's financialcondition and operating results.
(2) Changes in significant accounting estimates
□ Applicable √ Not applicable
(3) The first implementation of new accounting standards or standard interpretations starting from 2022 involvesadjusting the financial statements at the beginning of the year of the first implementation
□ Applicable √ Not applicable
45. Other
□ Applicable √ Not applicable
VI. Taxation
1. Main taxes and tax rates
Main taxes and tax rates
√ Applicable □ Not applicable
| Taxes | Tax calculation basis | Tax rates |
| Value added tax | Value added generated during the process of selling goods or providing taxable services | 6%, 9%, 13% |
| Urban maintenance and construction tax | Value added tax payable | 5%, 7% |
| Corporate income tax | Taxable income | 15%, 8.25%, 20%, 24%, 25% |
| Education surcharges | Value added tax payable | 3% |
| Local education surcharges | Value added tax payable | 2% |
Where there are taxpayers with different enterprise income tax rates for tax payment, the disclosure is as follows:
√ Applicable □ Not applicable
| Name of Taxpayer | Income Tax Rate (%) | Remarks |
| Oppein Home Group Inc. | 15 | Note 1 |
| Tianjin Oppein Integration Home Co., Ltd. (hereinafter referred to as "Tianjin Oppein") | 15 | Note 2 |
| Guangzhou Oppein Integration Home Co., Ltd. (hereinafter referred to as "Guangzhou Integration") | 15 | Note 3 |
| Dongguan Oppein Integration Home Sales Co., Ltd. (hereinafter referred to as "Dongguan Oppein Sales") | 25 | |
| Dongguan Oppein Integration Home Design Co., Ltd. (hereinafter referred to as "Dongguan Oppein Design") | 25 | |
| Guangzhou Oppein Sanitary Ware Co., Ltd. (hereinafter referred to as "Dongguan Oppein Sanitary Ware") | 25 | |
| Guangzhou Ouboni Integration Home Co., Ltd. (hereinafter referred to as "Ouboni") | 25 | |
| Oppein (Guangzhou) Soft Decoration Design Co., Ltd. (hereinafter referred to as "Oppein Soft Decoration") | 25 | |
| Oppein (Hong Kong) International Trade Company Limited (hereinafter referred to as "Oppein (Hong Kong) ") | 8.25 | Note 4 |
| FORMER S.R.L. | 24 | Note 8 |
| Jiangsu Wuxi Oppein Integration Home Co., Ltd. (hereinafter referred to as "Wuxi Oppein") | 15 | Note 5 |
| Jiangsu Oppein Overall Custom Home Co., Ltd. (hereinafter referred to as "Jiangsu Oppein Custom") | 25 | |
| Qingyuan Oppein Integration Home Co., Ltd. (hereinafter referred to as "Qingyuan Oppein") | 15 | Note 6 |
| Guangzhou Oppolia Smart Home Co., Ltd. (hereinafter referred to as "Guangzhou Oppolia") | 25 | |
| Guangzhou Owell Decoration Material Co., Ltd. (hereinafter referred to as "Gunagzhou Owell") | 25 | |
| Wuhan Oppein Mingda Home Products Co., Ltd. (hereinafter referred to as "Wuhan Countertop Factory") | 20 | Note 11 |
| Xi'an Oulian Home Products Co., Ltd. (hereinafter referred to as "Xi'an Countertop Factory") | 20 | Note 11 |
| Oppein United (Tianjin) Home Sales Co., Ltd. (hereinafter referred to as "Oppein United") | 25 | |
| Guangzhou Oppein Creative Home Design Co., Ltd. (hereinafter referred to as "Oppein Creative") | 15 | Note 7 |
| OPPEIN ITALY ACADEMY S.R.L. (hereinafter referred to as "ITALY ACADEMY") | 24 | Note 8 |
| Chengdu Oppein Smart Home Co., Ltd. (hereinafter referred to as "Chengdu Oppein") | 15 | Note 9 |
| Nanchang Oupai Home Products Co., Ltd. (hereinafter referred to as "Nanchang Countertop Factory") | 20 | Note 11 |
| Kunming Oppolia Smart Home Products Co., Ltd. (hereinafter referred to as "Kunming Countertop Factory") | 20 | Note 11 |
| Chengdu Shuangliu Oppein Loading and Unloading Service Co., Ltd. (hereinafter referred to as "Chengdu Loading and Unloading") | 25 |
| Name of Taxpayer | Income Tax Rate (%) | Remarks |
| Meizhou Oppein Investment Industry Co., Ltd. (hereinafter referred to as "Meizhou Oppein") | 25 | |
| Meizhou Zheling Investment Industry Co., Ltd. (hereinafter referred to as "Meizhou Zheling") | 25 | |
| Guangzhou Oppein Home Design Institute Co., Ltd. (hereinafter referred to as "Guangzhou Design Institute") | 25 | |
| Zhuhai Oppein Creative Home Design Co., Ltd. (hereinafter referred to as "Zhuhai Oppein") | 15 | Note 10 |
| Hangzhou Oppein Large Home Furnishing Co., Ltd. (hereinafter referred to as "Hangzhou Large Home Furnishing") | 25 | |
| Chengdu Oppein Creative Large Home Furnishing Co., Ltd. (hereinafter referred to as "Chengdu Large Home Furnishing") | 25 | |
| Chongqing Oppein Large Home Furnishings Co., Ltd. (hereinafter referred to as "Chongqing Large Home Furnishings") | 25 | |
| Handan Oppein Large Home Furnishing Sales Co., Ltd. (hereinafter referred to as "Handan Large Home Furnishing") | 25 | |
| Luzhou Oppein Large Home Furnishing Co., Ltd. (hereinafter referred to as "Luzhou Large Home Furnishing") | 25 | |
| Nanning Oppein Large Home Furnishing Co., Ltd. (hereinafter referred to as "Nanning Large Home Furnishing") | 25 | |
| Guangzhou Huadu Oppein Creative Home Furnishing Co., Ltd. (hereinafter referred to as "Huadu Large Home Furnishing") | 25 | |
| Shenzhen Oppein Creative Home Furnishing Co., Ltd. (hereinafter referred to as "Shenzhen Large Home Furnishing") | 25 | |
| Xingpai Commercial Property Management (Guangzhou) Co., Ltd. (hereinafter referred to as "Xinpai Property") | 25 | |
| Wuhan Oppein Smart Home Co., Ltd. (hereinafter referred to as "Wuhan Oppein") | 25 |
2. Tax incentives
√ Applicable □ Not applicable
Note 1: The Company was recognized as a high-tech enterprise in November 2011 (YKG Zi [2012] No. 47). InDecember 2020, the Company passed the review and audit of high-tech enterprises and obtained the Certificate of High-tech Enterprise (No. GR202044001249). According to the relevant provisions of the Enterprise Income Tax Law of thePeople's Republic of China and the Administrative Measures for the Determination of High and New Tech Enterprisesissued in 2007, starting from January 1, 2020, the enterprise income tax shall be calculated and paid at a reduced tax rateof 15% for three years.
Note 2: Tianjin Oppein was recognized as a high-tech enterprise in November 2016. In November 2022, theCompany passed the review and audit of high-tech enterprises and obtained the Certificate of High-tech Enterprise (No.GR202212000723). According to the relevant provisions of the Enterprise Income Tax Law of the People's Republic ofChina and the Administrative Measures for the Determination of High and New Tech Enterprises issued in 2007, startingfrom January 1, 2022, the enterprise income tax shall be calculated and paid at a reduced tax rate of 15% for three years.
Note 3: Guangzhou Integration was recognized as a high-tech enterprise in October 2014. In December 2020, theCompany passed the review and audit of high-tech enterprises and obtained the Certificate of High-tech Enterprise (No.GR202044007253). According to the relevant provisions of the Enterprise Income Tax Law of the People's Republic ofChina and the Administrative Measures for the Determination of High and New Tech Enterprises issued in 2007, startingfrom January 1, 2020, the enterprise income tax shall be calculated and paid at a reduced tax rate of 15% for three years.
Note 4: According to the Taxation (Amendment) (No. 3) Ordinance 2018 (Amendment Ordinance) in Hong Kong,the first profit of HKD 2 million from Hong Kong Oppein should be taxed at 8.25%, and subsequent profits shouldcontinue to be taxed at 16.50%.
Note 5: Wuxi Oppein was recognized as a high-tech enterprise in November 2021 and obtained the Certificate ofHigh-tech Enterprise (No. GR202132010146). According to the relevant provisions of the Enterprise Income Tax Lawof the People's Republic of China and the Administrative Measures for the Determination of High and New TechEnterprises issued in 2007, starting from January 1, 2021, the enterprise income tax shall be calculated and paid at areduced tax rate of 15% for three years.
Note 6: Qingyuan Oppein was recognized as a high-tech enterprise in December 2019. In December 2022, theCompany passed the review and audit of high-tech enterprises and obtained the Certificate of High-tech Enterprise (No.GR202244005073). According to the relevant provisions of the Enterprise Income Tax Law of the People's Republic ofChina and the Administrative Measures for the Determination of High and New Tech Enterprises issued in 2007, startingfrom January 1, 2022, the enterprise income tax shall be calculated and paid at a reduced tax rate of 15% for three years.Note 7: Oppein Creative was recognized as a high-tech enterprise in December 2021 and obtained the Certificate ofHigh-tech Enterprise (No. GR202144004151). According to the relevant provisions of the Enterprise Income Tax Lawof the People's Republic of China and the Administrative Measures for the Determination of High and New TechEnterprises issued in 2007, starting from January 1, 2021, the enterprise income tax shall be calculated and paid at areduced tax rate of 15% for three years.Note 8: ITALY ACADEMY and FORMER S.R.L. pay enterprise income tax (IRES) at a tax rate of 24.00% inaccordance with relevant Italian tax laws.Note 9: Chengdu Oppein was recognized as a high-tech enterprise in October 2021 and obtained the Certificate ofHigh-tech Enterprise (No. GR202151000449). According to the relevant provisions of the Enterprise Income Tax Lawof the People's Republic of China and the Administrative Measures for the Determination of High and New TechEnterprises issued in 2007, starting from January 1, 2021, the enterprise income tax shall be calculated and paid at areduced tax rate of 15% for three years.
Note 10: According to the Notice of the Public Finance Department and the State Taxation Bureau on Forwardingthe Notice of the Ministry of Finance and the State Administration of Taxation on the Preferential Enterprise Income TaxPolicies and the Catalogue of the Enterprise Income Tax Preferences for Guangdong Hengqin New Area, Fujian PingtanComprehensive Experimental Zone, and Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (CS[2014] No. 26) (hereinafter referred to as the "Preferential Catalogue") issued by the Public Finance Department and theState Taxation Bureau, the encouraged industrial enterprises located in Hengqin New Area, Pingtan ComprehensiveExperimental Zone, and Qianhai Shenzhen Hong Kong Modern Service Industry Cooperation Zone will be subject tocorporate income tax at a reduced rate of 15%, and Zhuhai Oppein will calculate and pay corporate income tax at a 15%tax rate accordingly.
Note 11: According to the Announcement of the Ministry of Finance and the State Taxation Administration onImplementing the Preferential Income Tax Policies for Micro and Small Enterprises and Individual Industrial andCommercial Households (Announcement No. 8 of the State Administration of Taxation in 2021) and the Announcementof the Ministry of Finance and the State Taxation Administration on Further Implementing the Preferential Income TaxPolicies for Micro and Small Enterprises (Announcement No. 13 of the State Administration of Taxation in 2022), WuhanCountertop Factory and Kunming Countertop Factory are small and low-profit enterprises that meet the conditions. Theannual taxable income does not exceed CNY 1 million, and is included in the taxable income at a reduced rate of 12.5%.The enterprise income tax is paid at a 20% tax rate. Wuhan Countertop Factory and Kunming Countertop Factory aresmall and low-profit enterprises that meet the conditions. For the portion of taxable income that does not exceed CNY 1million per year, a reduction of 12.5% will be included in the taxable income and corporate income tax will be paid at a20% tax rate; and the portion of annual taxable income exceeding CNY 1 million but not exceeding CNY 3 million shallbe included in the taxable income at a reduced rate of 25%, and enterprise income tax shall be paid at a tax rate of 20%.
3. Other
□ Applicable √ Not applicable
VII. Notes to Consolidated Financial Statements
1. Monetary fund
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Cash in hand | 12,648.66 | 7,433.29 |
| Bank deposit | 7,961,430,489.83 | 6,377,833,798.29 |
| Other monetary fund | 308,358,838.76 | 184,096,186.78 |
| Total | 8,269,801,977.25 | 6,561,937,418.36 |
| Of which: Total amount of funds deposited abroad | 17,055,935.38 | 4,496,288.33 |
Others
1. The ending balance of bank deposits includes time deposits that can be withdrawn at any time.
2. The ending balance of bank deposits increased by CNY 1,583,596,691.54 or 24.83% compared to the beginningbalance, mainly due to the public issuance of convertible corporation bonds, the accumulation of operating results andthe increase of short-term loans.
3. Bank deposits are deposited in the name of the Company and its subsidiaries within the scope of the consolidatedfinancial statements at financial institutions such as banks.
4. The ending balance of other monetary funds includes loan deposit of CNY 284,100,000.00, bank acceptancedeposit of CNY 3,256,052.63, securities account fund of CNY 4,991,193.63, guarantee deposit of CNY 1,456,807.71,and e-commerce platform balance of CNY 12,539,901.88. The Company carries out the "Pudong Development BankQuick Loan" business, where the Company recommends merchant loans to the bank and assumes a prudentrecommendation obligation of CNY 2,014,882.91 for the recommended merchant's repayment ability.
5. The Company's subsidiary Tianjin Oppein Integration Home Co., Ltd. was involved in a contract dispute case forthe plaintiff filed an application for property preservation, and the court ruled to freeze the Company's CNY 13,805,779.47.As of December 31, 2022, this payment is still in a frozen state.
6. Due to a contract dispute, the plaintiff filed an application for property preservation, and the court ruled to freezethe company for CNY 4,062,160.00. As of December 31, 2022, this payment is still in a frozen state.
7. The Company's subsidiary Guangzhou Oppein Creative Home Design Co., Ltd. was involved in a contract disputecase for the plaintiff filed an application for property preservation, and the court ruled to freeze the subsidiary GuangzhouOppein Creative Home Design Co., Ltd. for CNY 2,800,000.00. As of December 31, 2022, this payment is still in a frozenstate.
8. The total amount of CNY 1,071,000.00 in the e-commerce platform of the company and its subsidiaries,Guangzhou Oppolia Smart Home Co., Ltd., Guangzhou Oppein Creative Home Design Co., Ltd., Guangzhou OuboniIntegration Home Co., Ltd., and Guangzhou Oppein Sanitary Ware Co., Ltd. is the platform transaction deposit, which islimited in use.
2. Trading financial assets
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Financial assets at fair value through profit or loss | 803,050,958.90 | 1,677,354,882.08 |
| Of which: | ||
| Financial products | 803,050,958.90 | 1,677,354,882.08 |
| Total | 803,050,958.90 | 1,677,354,882.08 |
Other descriptions
□ Applicable √ Not applicable
3. Derivative financial assets
□ Applicable √ Not applicable
4. Notes receivable
(1) Notes receivables listed by category
√ Applicable □ Not applicable Unit: CNY
| Item | Ending balance | Beginning balance |
| Banker's acceptance | 15,064,465.16 | 34,973,540.89 |
| Trade acceptance | 95,369,740.77 | 171,100,130.87 |
| Total | 110,434,205.93 | 206,073,671.76 |
(2) Notes receivable pledged by the company at the end of the period
√ Applicable □ Not applicable
Unit: CNY
| Item | Pledged amount at the end of the period |
| Banker's acceptance | 2,549,874.14 |
| Trade acceptance | 36,564,807.80 |
| Total | 39,114,681.94 |
(3) Notes receivable which have been endorsed or discounted by the Company at the end of the period but not yetdue on the balance sheet date
√ Applicable □ Not applicable
Unit: CNY
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Banker's acceptance | 9,500,000.00 | 2,549,874.14 |
| Trade acceptance | 0.00 | 37,368,780.23 |
| Total | 9,500,000.00 | 39,918,654.37 |
(4) Notes transferred to accounts receivable by the Company due to the issuer's failure to perform at the end of the period
√ Applicable □ Not applicable
Unit: CNY
| Item | Closing amount transferred to accounts receivable |
| Trade acceptance | 134,976,515.03 |
| Total | 134,976,515.03 |
(5) Classified disclosure by bad debt provision method
√ Applicable □ Not applicable
Unit: CNY
| Category | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion (%) | Amount | Percentage of provision (%) | Amount | Proportion (%) | Amount | Percentage of provision (%) | |||
| Withdrawing bad debt reserves by individual item | 22,570,354.58 | 18.05 | 6,771,106.37 | 30.00 | 15,799,248.21 | 33,782,604.42 | 13.84 | 23,647,823.09 | 70.00 | 10,134,781.33 |
| Of which: | ||||||||||
| Bad debt reserve withdrawn by portfolio | 102,482,369.17 | 81.95 | 7,847,411.45 | 7.66 | 94,634,957.72 | 210,269,400.88 | 86.16 | 14,330,510.45 | 6.82 | 195,938,890.43 |
| Of which: | ||||||||||
| Bank acceptance draft | 15,064,465.16 | 12.05 | 15,064,465.16 | 34,973,540.89 | 14.33 | 34,973,540.89 | ||||
| Commercial acceptance | 87,417,904.01 | 69.90 | 7,847,411.45 | 8.98 | 79,570,492.56 | 175,295,859.99 | 71.83 | 14,330,510.45 | 8.18 | 160,965,349.54 |
| draft | ||||||||||
| Total | 125,052,723.75 | / | 14,618,517.82 | / | 110,434,205.93 | 244,052,005.30 | / | 37,978,333.54 | / | 206,073,671.76 |
Withdrawing bad debt reserves by individual item:
√ Applicable □ Not applicable
Unit: CNY
| Name | Ending balance | |||
| Book balance | Bad debt provision | Percentage of provision (%) | Reason for provision | |
| Received commercial acceptance bills from engineering clients | 22,570,354.58 | 6,771,106.37 | 30.00 | Some bill acceptors are unable to repay their due debts or have a downgrade in their credit rating |
| Total | 22,570,354.58 | 6,771,106.37 | 30.00 | / |
Explanation of withdrawing bad debt reserves by individual item:
□ Applicable √ Not applicable
Provision for bad debts by combination:
√ Applicable □ Not applicable
Combined provision item: commercial acceptance bill
Unit: CNY
| Name | Ending balance | ||
| Notes receivable | Bad debt provision | Percentage of provision (%) | |
| Commercial acceptance draft | 87,417,904.01 | 7,847,411.45 | 8.98 |
| Total | 87,417,904.01 | 7,847,411.45 | 8.98 |
Recognition criteria and instructions for withdrawing bad debts by combination
□ Applicable √ Not applicable
If the provision for bad debts is made based on the expected credit loss general model, refer to the disclosure of otheraccounts receivable:
□ Applicable √ Not applicable
(6) Information of bad debt reserves
√ Applicable □ Not applicable
Unit: CNY
| Category | Beginning balance | Current period change amount | Ending balance | ||
| Provision | Return or reversal | Write-off or cancellation | |||
| Commercial acceptance draft | 37,978,333.54 | 23,359,815.72 | 14,618,517.82 | ||
| Total | 37,978,333.54 | 23,359,815.72 | 14,618,517.82 | ||
The amount of bad debt reserves recovered or reversed in the current period is significant:
□ Applicable √ Not applicable
(7) Actual verification of notes receivable in the current period
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
5. Accounts receivable
(1) Disclosure by aging
√ Applicable □ Not applicable
Unit: CNY
| Aging | Closing book balance |
| within 1 year | |
| Where: sub items within 1 year | |
| within 1 year | 1,115,026,340.54 |
| Subtotal within 1 year | 1,115,026,340.54 |
| 1-2 years | 358,934,902.76 |
| 2-3 years | 83,519,413.38 |
| More than 3 years | |
| 3-4 years | 36,953,939.54 |
| 4-5 years | 8,416,004.78 |
| Over 5 years | 9,212,352.30 |
| Total | 1,612,062,953.30 |
(2) Classified disclosure by bad debt provision method
√ Applicable □ Not applicable
Unit: CNY
| Category | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion (%) | Amount | Percentage of provision (%) | Amount | Proportion (%) | Amount | Percentage of provision (%) | |||
| Single item provision for bad debts | 97,449,570.08 | 6.05 | 69,249,857.96 | 71.06 | 28,199,712.12 | 43,944,407.15 | 3.83 | 30,761,085.00 | 70.00 | 13,183,322.15 |
| Of which: | ||||||||||
| Bad debt reserve withdrawn by portfolio | 1,514,613,383.22 | 93.95 | 186,008,244.79 | 12.28 | 1,328,605,138.43 | 1,103,564,946.13 | 96.17 | 105,055,080.61 | 9.52 | 998,509,865.52 |
| Of which: | ||||||||||
| Total | 1,612,062,953.30 | 100.00 | 255,258,102.75 | 15.83 | 1,356,804,850.55 | 1,147,509,353.28 | 100.00 | 135,816,165.61 | 11.84 | 1,011,693,187.67 |
Withdrawing bad debt reserves by individual item:
√ Applicable □ Not applicable
Unit: CNY
| Name | Ending balance | |||
| Book balance | Bad debt provision | Percentage of provision (%) | Reason for provision | |
| Engineering clients | 97,449,570.08 | 69,249,857.96 | 71.06 | Some engineering clients are unable to repay their due debts or have a downgrade in their credit rating |
| Total | 97,449,570.08 | 69,249,857.96 | 71.06 | / |
Explanation of withdrawing bad debt reserves by individual item:
□ Applicable √ Not applicable
Provision for bad debts by combination:
√ Applicable □ Not applicable
Portfolio provision item: expected credit loss
Unit: CNY
| Name | Ending balance | ||
| Accounts receivable | Bad debt provision | Percentage of provision (%) | |
| Engineering clients | 1,250,065,123.08 | 144,280,363.72 | 11.54 |
| Franchised dealers | 171,999,455.19 | 21,568,270.28 | 12.54 |
| Other clients | 92,548,804.95 | 20,159,610.79 | 21.78 |
| Total | 1,514,613,383.22 | 186,008,244.79 | 12.29 |
Recognition criteria and instructions for withdrawing bad debts by combination:
□ Applicable √ Not applicable
If the provision for bad debts is made based on the expected credit loss general model, refer to the disclosure of otheraccounts receivable:
□ Applicable √ Not applicable
(3) Situation of bad debt reserves
√ Applicable □ Not applicable
Unit: CNY
| Category | Beginning balance | Current period change amount | Ending balance | |||
| Provision | Return or reversal | Write-off or cancellation | Other changes | |||
| Single item provision for bad debts | 30,761,085.00 | 38,488,772.96 | 69,249,857.96 | |||
| Bad debt reserve withdrawn by portfolio | 105,055,080.61 | 83,117,123.31 | 2,163,959.13 | 186,008,244.79 | ||
| Total | 135,816,165.61 | 121,605,896.27 | 2,163,959.13 | 255,258,102.75 | ||
The amount of bad debt reserves recovered or reversed in the current period is significant:
□ Applicable √ Not applicable
(4) Actual verification of accounts receivable in the current period
√ Applicable □ Not applicable
Unit: CNY
| Item | Write-off amount |
| Accounts receivable actually written off | 2,163,959.13 |
Important accounts receivable verification status
□ Applicable √ Not applicable
Explanation of accounts receivable verification:
□ Applicable √ Not applicable
(5) Accounts receivable from top five borrowers classified based on the ending balance
√ Applicable □ Not applicable
Unit: CNY
| Company name | Ending balance | Proportion in the total ending balance of accounts receivable (%) | Bad debt provision of ending balance |
| Shanghai Aifeidi Building Materials Trading Co., Ltd | 33,956,605.00 | 2.11 | 4,910,032.29 |
| Shenzhen Evergrande Materials and Equipment Co., Ltd. | 33,878,453.40 | 2.10 | 23,714,917.38 |
| Shenzhen Lingchao Supply Chain Management Co., Ltd. | 32,873,802.16 | 2.04 | 2,034,888.35 |
| Guangzhou Yuantong E-commerce Technology Co., Ltd. | 24,445,569.47 | 1.52 | 1,513,180.75 |
| Shenzhen Branch of China Construction Science & Technology Group Co., Ltd. | 22,208,196.28 | 1.38 | 1,374,687.35 |
| Total | 147,362,626.31 | 9.15 | 33,547,706.12 |
(6) Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7) The amount of assets and liabilities formed by transferring accounts receivable and continuing to be involved
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
6. Receivables financing
□ Applicable √ Not applicable
7. Prepayments
(1) Advances to suppliers under the aging analysis method are as follow
√ Applicable □ Not applicable
Unit: CNY
| Aging | Ending balance | Beginning balance | ||
| Amount | Proportion (%) | Amount | Proportion (%) | |
| within 1 year | 104,762,057.64 | 97.51 | 143,531,786.66 | 96.75 |
| 1-2 years | 1,301,987.85 | 1.21 | 2,118,049.05 | 1.43 |
| 2-3 years | 549,360.96 | 0.51 | 937,046.99 | 0.63 |
| More than 3 years | 822,971.91 | 0.77 | 1,759,109.70 | 1.19 |
| Total | 107,436,378.36 | 100.00 | 148,345,992.40 | 100.00 |
(2) Prepayments of the top five ending balances collected by prepayment object
√ Applicable □ Not applicable
| Company name | Ending balance | Proportion to the total ending balance of prepayments (%) |
| Jiaxing Milan Image Furniture Co., Ltd. | 5,683,525.47 | 5.29 |
| Wuxi Power Supply Branch of State Grid Jiangsu Electric Power Co., Ltd. | 4,054,223.12 | 3.77 |
| Chongqing Tianhe Yiren Film and Television Culture Media Co., Ltd. | 2,918,632.09 | 2.72 |
| Tianfu New Area Power Supply Company of State Grid Sichuan Electric Power Company | 2,738,794.57 | 2.55 |
| Jinran China Resource Gas Co., Ltd. | 2,625,359.36 | 2.44 |
| Total | 18,020,534.61 | 16.77 |
Others
□ Applicable √ Not applicable
8. List of other receivables
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Interest receivable | 0.00 | 0.00 |
| Dividend receivable | 0.00 | 0.00 |
| Other receivables | 197,101,668.61 | 95,586,738.83 |
| Total | 197,101,668.61 | 95,586,738.83 |
Other descriptions
□ Applicable √ Not applicable
Interest receivable
(1) Classification of interest receivable
□ Applicable √ Not applicable
(2) Significant overdue interest
□ Applicable √ Not applicable
(3) Provision for bad debts
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Dividend receivable
(1) Dividend receivable
□ Applicable √ Not applicable
(2) Important dividends receivable with an aging of over 1 year
□ Applicable √ Not applicable
(3) Provision for bad debts
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Other receivables
(1) Disclosure by aging
√ Applicable □ Not applicable
Unit: CNY
| Aging | Closing book balance |
| within 1 year | |
| Where: sub items within 1 year | |
| Within 1 year | 178,299,635.44 |
| Subtotal within 1 year | 178,299,635.44 |
| 1-2 years | 11,499,228.40 |
| 2-3 years | 9,110,309.20 |
| More than 3 years | |
| 3-4 years | 5,237,756.66 |
| 4-5 years | 1,112,663.85 |
| Over 5 years | 3,569,329.66 |
| Total | 208,828,923.21 |
(2) Classification by nature of funds
√ Applicable □ Not applicable
Unit: CNY
| Nature of payment | Closing book balance | Opening book balance |
| Deposit | 168,106,198.55 | 68,787,540.41 |
| Business reserve fund | 5,284,935.96 | 4,782,114.52 |
| Security Deposits | 25,098,863.80 | 19,650,038.22 |
| Other | 10,338,924.90 | 12,543,422.77 |
| Total | 208,828,923.21 | 105,763,115.92 |
(3) Provision for bad debts
√ Applicable □ Not applicable
Unit: CNY
| Bad debt provision | Phase I | Phase Ⅱ | Phase Ⅲ | Total |
| Expected credit loss (ECL) in the next 12 months | ECL over the entire duration (no credit impairment occurs) | Expected credit loss within whole duration (credit impairment has occurred) | ||
| Balance as of January 1, 2022 | 9,726,968.76 | 0.00 | 449,408.33 | 10,176,377.09 |
| Balance as of January 1, 2022 in the current period | ||||
| - Transfer to Phase Ⅱ | ||||
| - Transfer to Phase Ⅲ | ||||
| - Return to Phase Ⅱ | ||||
| - Return to Phase I | ||||
| Provision in current period | 2,107,700.65 | 96,000.00 | 2,203,700.65 | |
| Reversals in the current period | 647,823.14 | 5,000.00 | 652,823.14 | |
| Write-off in current period | ||||
| Canceled after verification in the current period | ||||
| Other changes | ||||
| Balance as of December 31, 2022 | 11,186,846.27 | 540,408.33 | 11,727,254.60 |
Explanation of significant changes in the book balance of other accounts receivable with changes in loss provisions in thecurrent period:
□ Applicable √ Not applicable
The basis for calculating the amount of bad debt reserves for the current period and evaluating whether the credit risk offinancial instruments has significantly increased:
□ Applicable √ Not applicable
(4) Information of bad debt reserves
√ Applicable □ Not applicable
Unit: CNY
| Category | Beginning balance | Current period change amount | Ending balance | |||
| Provision | Return or reversal | Write-off or cancellation | Other changes | |||
| Bad debt reserve withdrawn by portfolio | 9,726,968.76 | 2,107,700.65 | 647,823.14 | 11,186,846.27 | ||
| Single item provision for bad debts | 449,408.33 | 96,000.00 | 5,000.00 | 540,408.33 | ||
| Total | 10,176,377.09 | 2,203,700.65 | 652,823.14 | 11,727,254.60 | ||
The significant amount of bad debt reserves reversed or recovered in the current period:
□ Applicable √ Not applicable
(5) Other accounts receivable actually written off in the current period
□ Applicable √ Not applicable
(6) Other accounts receivable with the top five ending balances collected by the debtor
√ Applicable □ Not applicable
Unit: CNY
| Company name | Nature of payment | Ending balance | Aging | Proportion to the total ending balance of other accounts receivable (%) | Bad debt provision of ending balance |
| Guangzhou Hejing Holding Group Co., Ltd. | Deposit | 145,000,000.00 | within 1 year | 69.43 | |
| Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | Security Deposits | 5,667,862.40 | Within 3 years | 2.71 | 1,133,572.48 |
| Beijing Easyhome Joint Investment Management Center (L.P.). | Other | 2,957,085.20 | within 1 year | 1.42 | 591,417.04 |
| Xiaoshan Branch of GREENTOWN REAL ESTATE GROUP CO, LTD. | Deposit | 2,092,419.90 | 2-3 years | 1.00 | 313,862.99 |
| Nanchang New Huarui Clothing Co., Ltd. | Security Deposits | 1,756,708.80 | 3-4 years | 0.84 | 351,341.76 |
| Total | / | 157,474,076.30 | / | 75.40 | 2,390,194.27 |
(7) Receivables involving government subsidies
□ Applicable √ Not applicable
(8) Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(9) The amount of assets and liabilities formed by transferring other receivables and continuing to be involved
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
9. Inventory
(1) Inventory classification
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance | ||||
| Book balance | Inventory falling price provision / provision for impairment of contract performance cost | Book value | Book balance | Inventory falling price provision / provision for impairment of contract performance cost | Book value | |
| Raw materials | 1,110,361,485.26 | 1,110,361,485.26 | 849,290,050.96 | 849,290,050.96 | ||
| Products in process | 134,747,487.38 | 134,747,487.38 | 128,460,954.78 | 128,460,954.78 | ||
| Inventory goods | / | / | / | / | ||
| Finished goods | 168,898,346.41 | 168,898,346.41 | 485,376,851.22 | 485,376,851.22 | ||
| Total | 1,414,007,319.05 | 1,414,007,319.05 | 1,463,127,856.96 | 1,463,127,856.96 | ||
(2) Inventory depreciation reserves and contract performance cost impairment reserves
□ Applicable √ Not applicable
(3) Explanation of the capitalized amount of borrowing costs included in the ending balance of inventory
□ Applicable √ Not applicable
(4) Explanation of the current amortization amount of contract performance cost
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
10. Contract assets
(1) Contract asset situation
□ Applicable √ Not applicable
(2) Amount and reasons for significant changes in book value during the reporting period
□ Applicable √ Not applicable
(3) Provision for impairment of contract assets in this period
□ Applicable √ Not applicable
If the provision for bad debts is made based on the expected credit loss general model, refer to the disclosure of otheraccounts receivable:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
11. Held-for-sale assets
□ Applicable √ Not applicable
12. Non-current assets due within one year
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Long-term fixed deposits and interest provision | 922,210,739.68 | 0.00 |
| Total | 922,210,739.68 | 0.00 |
Important debt investments and other debt investments at the end of the period:
□ Applicable √ Not applicable
13. Other current assets
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Prepaid corporate income tax | 1,742,358.04 | 80,151.80 |
| Bank financial products | 0.00 | 0.00 |
| Input tax for value-added tax to be deducted and certified | 135,348,001.07 | 43,757,286.00 |
| Short-term fixed deposits and interest provision | 62,619,813.82 | 34,878,627.65 |
| Other prepaid taxes and fees | 37,534.75 | 110,618.80 |
| Total | 199,747,707.68 | 78,826,684.25 |
14. Debt investment
(1) Debt investment situation
□ Applicable √ Not applicable
(2) Important debt investments at the end of the period:
□ Applicable √ Not applicable
(3) Provision for impairment
□ Applicable √ Not applicable
The basis for calculating the amount of provision for impairment or the current period and evaluating whether the creditrisk of financial instruments has significantly increased
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
15. Other debt investments
(1) Information of other debt investments
□ Applicable √ Not applicable
(2) Other important debt investments at the end of the period:
□ Applicable √ Not applicable
(3) Provision for impairment
□ Applicable √ Not applicable
The basis for calculating the amount of provision for impairment or the current period and evaluating whether the creditrisk of financial instruments has significantly increased
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
16. Long-term receivables
(1) Long-term receivables
□ Applicable √ Not applicable
(2) Provision for bad debts
□ Applicable √ Not applicable
The basis for calculating the amount of bad debt reserves for the current period and evaluating whether the credit risk offinancial instruments has significantly increased
□ Applicable √ Not applicable
(3) Long-term receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(4) The amount of assets and liabilities formed by transferring long-term receivables and continuing to be involved
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
17. Long-term equity investments
√ Applicable □ Not applicable
Unit: CNY
| The invested company | Beginning balance | Increase or decrease in current period | Ending balance | Closing balance of impairment provision | |||||||
| Additional investment | Negative investment | Investment gains and losses recognized under the equity method | Other comprehensive income adjustments | Changes in other interests | Cash dividends or profits declared to pay | Impairment provision | Other | ||||
| I. Joint ventures | |||||||||||
| Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | 12,328,756.91 | 3,500,000.00 | -8,828,756.91 | ||||||||
| Sub-total | 12,328,756.91 | 3,500,000.00 | -8,828,756.91 | ||||||||
| II. Associated enterprise | |||||||||||
| Beijing Jiaju Technology Co., Ltd. | 3,214,610.20 | 7,303,698.24 | 10,518,308.44 | ||||||||
| Sub-total | 3,214,610.20 | 7,303,698.24 | 10,518,308.44 | ||||||||
| Total | 15,543,367.11 | 3,500,000.00 | -1,525,058.67 | 10,518,308.44 | |||||||
18. Other equity instrument investments
(1) Investment in other equity instrument
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Keeson Technology Corporation Limited | 23,806,462.00 | 48,177,180.00 |
| Guangzhou Rural Commercial Bank | 1,015,000.00 | 1,015,000.00 |
| Tianhai Oukang Technology Information (Xiamen) Co., Ltd. | 0.00 | 0.00 |
| Harbin Sayyas Windows Co., Ltd. | 46,125,000.00 | 31,123,051.57 |
| Zhongju Hejia (Beijing) Investment Fund Management Co., Ltd. | 4,811,404.66 | 1,885,380.04 |
| Fernz (Guangzhou) Co., Ltd. | 0.00 | 0.00 |
| Guangzhou Lazy Cat Wood Balcony Decoration Engineering Co., Ltd. | 0.00 | 0.00 |
| Guangzhou Qingtai Investment Development Co., Ltd. | 782,280.12 | 843,417.88 |
| Guangdong Deerma Technology Co., Ltd. | 113,846,741.27 | 104,884,825.51 |
| DeRucci Healthy Sleep Co., Ltd. | 178,848,000.00 | 122,381,363.60 |
| Total | 369,234,888.05 | 310,310,218.60 |
(2) Investment in non-trading equity instruments
√ Applicable □ Not applicable
Unit: CNY
| Item | Dividend income recognized in the current period | Accumulated profits | Accumulated losses | Amount transferred from other comprehensive income to retained earnings | Reasons for designation as measured at fair value with changes recognized in other comprehensive income | Reasons for the transfer of other comprehensive income to retained earnings |
| Keeson Technology Corporation Limited | 745,200.00 | 11,379,177.38 | 1,813,858.69 | Based on the management's intention to hold | Equity disposal | |
| TIANHAI OUKANG TECHNOLOGY INFORMATION (XIAMEN) Co., Ltd. | 25,000,000.00 | Based on the management's intention to hold | None | |||
| Harbin Sayyas Windows Co., Ltd. | 23,607,562.50 | Based on the management's intention to hold | None | |||
| Zhongju Hejia (Beijing) Investment Fund Management Co., Ltd. | 2,811,404.66 | Based on the management's intention to hold | None | |||
| Guangzhou Rural Commercial Bank | 106,575.00 | Based on the management's intention to hold | None |
| Fernz (Guangzhou) Co., Ltd. | 17,000,000.00 | 155,634.48 | Based on the management's intention to hold | Equity disposal | ||
| Guangzhou Lazy Cat Wood Balcony Decoration Engineering Co., Ltd. | 6,170,000.00 | Based on the management's intention to hold | None | |||
| Guangzhou Qingtai Investment Development Co., Ltd. | 217,719.88 | Based on the management's intention to hold | None | |||
| Guangdong Deerma Technology Co., Ltd. | 53,846,741.27 | Based on the management's intention to hold | None | |||
| DeRucci Healthy Sleep Co., Ltd. | 5,400,000.00 | 100,548,000.00 | Based on the management's intention to hold | None | ||
| Total | 6,251,775.00 | 192,192,885.81 | 48,387,719.88 | 1,969,493.17 |
Other descriptions
□ Applicable √ Not applicable
19. Other non-current financial assets
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Beijing Easyhome Joint Investment Management Center (L.P.). | 17,968,837.07 | 60,339,938.23 |
| Wuxi Craftsman Huiyu Management Consulting Partnership (LP) | 1,000,000.00 | |
| Total | 18,968,837.07 | 60,339,938.23 |
Other descriptions
□ Applicable √ Not applicable
20. Investment properties
Measurement model of investment real estate
(1) Investment property adopting cost measurement model
Unit: CNY
| Item | Houses and buildings | Land use right | Construction in progress | Total |
| I. Original book value | ||||
| 1. Beginning Balance | 917,156,576.08 | 522,803,394.00 | 1,439,959,970.08 | |
| 2. Increase in this period | 19,829,632.78 | 19,829,632.78 | ||
| (1) Outsourcing | ||||
| (2) Transferred from inventory, fixed assets, and | 19,829,632.78 | 19,829,632.78 | ||
| construction in progress | ||||
| (3) Increase in business merger | ||||
| 3. Current decrease amount | 317,308.39 | 317,308.39 | ||
| (1) Disposal | ||||
| (2) Other transfers out | 317,308.39 | 317,308.39 | ||
| 4. Ending balance | 916,839,267.69 | 542,633,026.78 | 1,459,472,294.47 | |
| II. Accumulated depreciation and accumulated amortization | ||||
| 1. Beginning Balance | 105,794,953.22 | 105,794,953.22 | ||
| 2. Increase in this period | 44,482,093.92 | 10,619,969.83 | 55,102,063.75 | |
| (1) Provision or amortization | 44,482,093.92 | 10,619,969.83 | 55,102,063.75 | |
| 3. Current decrease amount | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4. Ending balance | 44,482,093.92 | 116,414,923.05 | 160,897,016.97 | |
| III. Provision for impairment | ||||
| 1. Beginning Balance | ||||
| 2. Increase in this period | ||||
| (1) Provision | ||||
| 3. Current decrease amount | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4. Ending balance | ||||
| IV. Book value | ||||
| 1. Ending book value | 872,357,173.77 | 426,218,103.73 | 1,298,575,277.50 | |
| 2. Beginning book value | 917,156,576.08 | 417,008,440.78 | 1,334,165,016.86 | |
(2) Investment real estate without completed property ownership certificate
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
21. List of fixed asset items
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Fixed assets | 6,688,959,701.47 | 6,648,220,021.88 |
| Liquidation of fixed assets | 0.00 | |
| Total | 6,688,959,701.47 | 6,648,220,021.88 |
Other descriptions
□ Applicable √ Not applicable
Fixed assets
(1) Fixed assets
√ Applicable □ Not applicable
Unit: CNY
| Item | Property and | Machinery and | Transportatio | Other equipment | Total |
| building | equipment | n vehicles | |||
| I. Original book value: | |||||
| 1. Beginning Balance | 4,663,561,018.23 | 3,759,095,701.70 | 45,407,670.93 | 331,806,497.45 | 8,799,870,888.31 |
| 2. Increase in this period | 190,613,651.93 | 470,726,598.68 | 1,787,134.74 | 38,796,299.69 | 701,923,685.04 |
| (1) Purchase | 3,099,916.74 | 48,266,223.83 | 1,787,134.74 | 37,045,679.78 | 90,198,955.09 |
| (2) Transferred from construction in progress | 161,657,702.55 | 419,704,916.95 | 1,433,109.08 | 582,795,728.58 | |
| (3) Increase in business merger | 25,856,032.64 | 2,755,457.90 | 317,510.83 | 28,929,001.37 | |
| 3. Current decrease amount | 939,564.29 | 21,653,528.88 | 1,878,351.03 | 6,083,806.91 | 30,555,251.11 |
| (1) Disposal or retirement | 939,564.29 | 21,653,528.88 | 1,878,351.03 | 6,083,806.91 | 30,555,251.11 |
| 4. Ending balance | 4,853,235,105.87 | 4,208,168,771.50 | 45,316,454.64 | 364,518,990.23 | 9,471,239,322.24 |
| II. Accumulated depreciation | |||||
| 1. Beginning Balance | 761,727,065.92 | 1,159,968,567.95 | 29,196,574.35 | 200,758,658.21 | 2,151,650,866.43 |
| 2. Increase in this period | 229,393,507.17 | 367,739,696.85 | 4,425,027.01 | 46,980,000.85 | 648,538,231.88 |
| (1) Provision | 229,393,507.17 | 367,739,696.85 | 4,425,027.01 | 46,980,000.85 | 648,538,231.88 |
| 3. Current decrease amount | 490,446.78 | 10,807,814.74 | 1,680,630.65 | 4,930,585.37 | 17,909,477.54 |
| (1) Disposal or retirement | 490,446.78 | 10,807,814.74 | 1,680,630.65 | 4,930,585.37 | 17,909,477.54 |
| 4. Ending balance | 990,630,126.31 | 1,516,900,450.06 | 31,940,970.71 | 242,808,073.69 | 2,782,279,620.77 |
| III. Provision for impairment | |||||
| 1. Beginning Balance | |||||
| 2. Increase in this period | |||||
| (1) Provision | |||||
| 3. Current decrease amount | |||||
| (1) Disposal or retirement | |||||
| 4. Ending balance | |||||
| IV. Book value | |||||
| 1. Ending book value | 3,862,604,979.56 | 2,691,268,321.44 | 13,375,483.93 | 121,710,916.54 | 6,688,959,701.47 |
| 2. Beginning book value | 3,901,833,952.31 | 2,599,127,133.75 | 16,211,096.58 | 131,047,839.24 | 6,648,220,021.88 |
(2)Temporarily idle fixed assets
□ Applicable √ Not applicable
(3) Fixed assets leased through financial leasing
□ Applicable √ Not applicable
(4) Fixed assets leased out through operating leases
□ Applicable √ Not applicable
(5) Fixed assets with incomplete property rights certificates
√ Applicable □ Not applicable
Unit: CNY
| Item | Book value | Reasons for not completing the property rights certificate |
| Property and building | 1,671,016,594.40 | The property certificate is currently being handled |
Other descriptions
√ Applicable □ Not applicable
1. The mortgage situation is detailed in the relevant explanations of "Section X Financial Report VII, Notes to majoritems in the consolidated financial statements 32, Short-term Loans" and "Section X Financial Report VII, Notes to majoritems in the consolidated financial statements 45, Long-term Loans".
2. As of December 31, 2022, the Company does not have any temporarily idle or held fixed assets for sale.
3. The original value of fixed assets transferred from construction in progress in 2022 was CNY 582,795,728.58.
4. The depreciation amount included in operating (inventory) costs, sales expenses, management expenses, andresearch and development expenses in 2022 is CNY 648,538,231.88.
5. The Company conducted an itemized inspection of fixed assets at the end of the period and did not find anysituations where impairment provisions need to be made due to damage, lack of production capacity and transfer value,long-term idleness, or outdated technology being eliminated.Liquidation of fixed assets
□ Applicable √ Not applicable
22. Construction in process
List of items
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Construction in progress | 1,430,244,831.22 | 347,455,504.19 |
| Total | 1,430,244,831.22 | 347,455,504.19 |
Other descriptions
□ Applicable √ Not applicable
Construction in progress
(1) Information of construction in progress
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Construction in progress | 1,430,244,831.22 | 1,430,244,831.22 | 347,455,504.19 | 347,455,504.19 | ||
| Total | 1,430,244,831.22 | 1,430,244,831.22 | 347,455,504.19 | 347,455,504.19 | ||
(2) Current changes in important ongoing construction projects
√ Applicable □ Not applicable
Unit: CNY
| Item Name | Budget | Beginning balance | Increase in this period | Amount transferred to | Other decreases in the current | Ending balance | Proportion of | Engineering | Accumulated amount of | Where: current interest | Curre | Sou |
| amount | fixed assets in the current period | period | accumulated project investment to budget (%) | progress | interest capitalization | capitalization amount | nt interest capitalization rate (% ) | rce of funds | ||||
| Tianjin Engineering Project | 25,667,9 39.74 | 200,757,682.45 | 94,667,626.80 | 22,441,918.01 | 109,316,077.38 | Self-financing | ||||||
| Jianggao and other engineering projects | 18,651,0 87.13 | 71,292,788.85 | 47,118,939.98 | 42,824,936.00 | Self-financing | |||||||
| Oppein Smart Manufacturing Innovation Project | 800 million | 45,616,6 49.06 | 181,042,152.82 | 226,658,801.88 | 28.33 | 30.00 | ||||||
| Wuxi Engineering Project | 22,402,851.54 | 150,971,987.91 | 117,620,156.04 | 55,754,683.41 | Self-raised/raised funds | |||||||
| Qingyuan Engineering Project | 150,369,619.06 | 196,614,814.46 | 252,422,209.68 | 94,562,223.84 | Self-raised/raised funds | |||||||
| Chengdu Engineering Project | 2,113 million | 20,580,958.97 | 208,167,872.01 | 70,966,796.08 | 5,186,667.99 | 152,595,366.90 | 81.39 | 80.00 | 25,461,136.72 | Self-raised/raised funds | ||
| Huangbian Engineering Project | 930 million | 55,351,010.98 | 54,233,510.62 | 109,584,521.60 | 11.78 | 15.00 | Self-financing | |||||
| Wuhan Engineering Project | 2,500 million | 8,815,387.72 | 630,132,832.49 | 638,948,220.21 | 25.56 | 25.00 | 23,809,027.04 | 23,809,027.04 | Self-raised/raised funds | |||
| Total | 6.343 billion | 347,455,504.19 | 1,693,213,641.61 | 582,795,728.58 | 27,628,586.00 | 1,430,244,831.22 | / | / | 49,270,163.76 | 23,809,027.04 | / | / |
(3) Current provision for impairment of construction in progress
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
Engineering materials
(1) Engineering material situation
□ Applicable √ Not applicable
23. Productive biological assets
(1) Productive biological assets using cost measurement models
□ Applicable √ Not applicable
(2) Productive biological assets using fair value measurement model
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right of use assets
√ Applicable □ Not applicable
Unit: CNY
| Item | Property and building | Total |
| I. Original book value | ||
| 1. Beginning Balance | 39,357,930.49 | 39,357,930.49 |
| 2. Increase in this period | 166,270,067.44 | 166,270,067.44 |
| (1) New lease | 166,270,067.44 | 166,270,067.44 |
| 3. Current decrease amount | 9,578,038.78 | 9,578,038.78 |
| (1) Reduce lease | 9,578,038.78 | 9,578,038.78 |
| 4. Ending balance | 196,049,959.15 | 196,049,959.15 |
| II. Accumulated depreciation | ||
| 1. Beginning Balance | 14,381,858.44 | 14,381,858.44 |
| 2. Increase in this period | 47,986,840.11 | 47,986,840.11 |
| (1) Provision | 47,986,840.11 | 47,986,840.11 |
| 3. Current decrease amount | 9,578,038.78 | 9,578,038.78 |
| (1) Disposal | ||
| (2) Reduce lease | 9,578,038.78 | 9,578,038.78 |
| 4. Ending balance | 52,790,659.77 | 52,790,659.77 |
| III. Provision for impairment | ||
| 1. Beginning Balance | ||
| 2. Increase in this period | ||
| (1) Provision | ||
| 3. Current decrease amount | ||
| (1) Disposal | ||
| 4. Ending balance | ||
| IV. Book value | ||
| 1. Ending book value | 143,259,299.38 | 143,259,299.38 |
| 2. Beginning book value | 24,976,072.05 | 24,976,072.05 |
26. Intangible assets
(1) Information of intangible assets
√ Applicable □ Not applicable
Unit: CNY
| Item | Land use right | Patent rights | Non-Patent Technology] | Software | Total |
| I. Original book value | |||||
| 1. Beginning Balance | 1,138,425,747.00 | 105,194,441.62 | 1,243,620,188.62 | ||
| 2. Increase in this period | 33,335,524.21 | 8,983,134.67 | 42,318,658.88 | ||
| (1) Purchase assets | 19,841,687.63 | 8,983,134.67 | 28,824,822.30 | ||
| (2) Internal R&D assets | |||||
| (3) Increase in business merger | 13,493,836.58 | 13,493,836.58 | |||
| 3. Current decrease amount | 6,572,458.51 | 2,166,829.38 | 8,739,287.89 | ||
| (1) Disposal | 2,166,829.38 | 2,166,829.38 | |||
| (2) Other decreases | 6,572,458.51 | 6,572,458.51 | |||
| 4. Ending balance | 1,165,188,812.70 | 112,010,746.91 | 1,277,199,559.61 | ||
| II. Accumulated amortisation | |||||
| 1. Beginning Balance | 98,621,691.40 | 80,606,054.93 | 179,227,746.33 | ||
| 2. Increase in this period | 23,177,636.32 | 16,077,696.72 | 39,255,333.04 | ||
| (1) Provision | 23,177,636.32 | 16,077,696.72 | 39,255,333.04 | ||
| 3. Current decrease amount | 777,740.92 | 1,127,552.32 | 1,905,293.24 | ||
| (1) Disposal | 1,127,552.32 | 1,127,552.32 | |||
| (2) Other decreases | 777,740.92 | 777,740.92 | |||
| 4. Ending balance | 121,021,586.80 | 95,556,199.33 | 216,577,786.13 | ||
| III. Provision for impairment | |||||
| 1. Beginning Balance | |||||
| 2. Increase in this period | |||||
| (1) Provision | |||||
| 3. Current decrease amount | |||||
| (1) Disposal | |||||
| 4. Ending balance | |||||
| IV. Book value | |||||
| 1. Ending book value | 1,044,167,225.90 | 16,454,547.58 | 1,060,621,773.48 | ||
| 2. Beginning book value | 1,039,804,055.60 | 24,588,386.69 | 1,064,392,442.29 | ||
The proportion of intangible assets formed through internal research and development of the company to the balance ofintangible assets at the end of this period is 0.00%
(2) Information of land use rights without completed property rights certificates
□ Applicable √ Not applicable
Other descriptions:
√ Applicable □ Not applicable
1. The details of intangible assets pledged at the end of the period are as follows:
| Category | Original value of collateral | Net value of collateral |
| Land use right | 50,524,976.60 | 39,497,528.36 |
The mortgage is detailed in the relevant explanations of "Section X Financial Report VII, Notes to major items inthe consolidated financial statements 32, Short-term Loans" and "Section X Financial Report VII, Notes to major itemsin the consolidated financial statements 45, Long-term Loans".
2. The amortization amount of intangible assets of the company in 2022 is CNY 39,255,333.04.
3. As of December 31, 2022, the Company has no intangible assets formed through internal research anddevelopment.
4. As of December 31, 2022, the Company has no land use rights that have not yet obtained property rightscertificates.
5. At the end of the period, the Company conducted an itemized inspection of intangible assets and did not find anycircumstances requiring provision for impairment.
27. Development expenditure
□ Applicable √ Not applicable
28. Goodwill
(1) Original book value of goodwill
□ Applicable √ Not applicable
(2) Provision for impairment of goodwill
□ Applicable √ Not applicable
(3) Information related to the asset group or combination of asset groups where goodwill is located
□ Applicable √ Not applicable
(4) Describe the goodwill impairment test process, key parameters (such as the growth rate in the forecast period,the growth rate in the stable period, the profit rate, the Discount rate, the forecast period, if applicable) and therecognition method of goodwill impairment loss
□ Applicable √ Not applicable
(5) Impact of goodwill impairment testing
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
29. Long-term amortizing expenses
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Increase in this period | Amortization amount for the current period | Other reduced amounts | Ending balance |
| Decoration fee | 63,456,311.19 | 71,445,144.07 | 49,641,471.68 | 0.00 | 85,259,983.58 |
| Advertisement fee | 15,138,669.97 | 0.00 | 11,779,954.44 | 0.00 | 3,358,715.53 |
| Other | 1,120,045.93 | 13,316,353.84 | 2,491,695.60 | 0.00 | 11,944,704.17 |
| Total | 79,715,027.09 | 84,761,497.91 | 63,913,121.72 | 0.00 | 100,563,403.28 |
30. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets not offset
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Provision for impairment of assets | 281,568,752.78 | 43,736,719.79 | 183,919,942.56 | 28,051,877.29 |
| Unrealized profits from internal transactions | 0.00 | 0.00 | 0.00 | 0.00 |
| Deductible losses | 77,811,726.38 | 19,150,200.81 | 72,796,846.40 | 13,206,977.38 |
| Deferred income | 469,701,073.18 | 79,127,887.86 | 471,292,317.05 | 79,427,200.69 |
| Other | 19,630,895.84 | 3,224,809.11 | 2,461,558.50 | 442,649.09 |
| Total | 848,712,448.18 | 145,239,617.57 | 730,470,664.51 | 121,128,704.45 |
(2) Non-offsetting deferred income tax liabilities
√ Applicable □ Not applicable
Unit: CNY
(3) Deferred income tax assets or liabilities listed at net amount after offset
□ Applicable √ Not applicable
(4) Details of unconfirmed deferred income tax assets
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Deductible temporary difference | 0.00 | 0.00 |
| Deductible losses | 7,666,055.40 | 4,883,636.12 |
Item
| Item | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Valuation and appreciation of assets in the business merger not under the same control | 0.00 | 0.00 | 0.00 | 0.00 |
| Changes in fair value of other creditor's right investment | 0.00 | 0.00 | 0.00 | 0.00 |
| Changes in fair value of other equity instrument investments | 143,805,165.93 | 35,951,291.49 | 79,422,401.06 | 19,855,600.26 |
| Tax accelerated amortization | 333,332,694.69 | 50,595,395.14 | 288,270,559.44 | 43,937,337.70 |
| Internal transaction capitalization amount | 97,809,755.28 | 13,053,177.09 | 39,350,394.99 | 5,902,559.25 |
| Changes in fair value of trading financial assets | 3,050,958.90 | 457,643.84 | 15,920,145.40 | 2,388,021.82 |
| Changes in fair value of other non-current financial assets | 3,174,703.82 | 793,675.96 | 39,989,938.23 | 9,997,484.56 |
| Withdrawal of fixed deposit and wealth management interest | 223,739,194.61 | 33,560,879.18 | 96,896,422.16 | 14,534,463.32 |
| Total | 804,912,473.23 | 134,412,062.70 | 559,849,861.28 | 96,615,466.91 |
| Provision for impairment of assets | 37,368.59 | 50,933.68 |
| Total | 7,703,423.99 | 4,934,569.80 |
(5) The deductible losses of unrecognized deferred income tax assets will expire in the following years
□ Applicable √ Not applicable
Other descriptions:
√ Applicable □ Not applicable
The unrecognized deferred income tax assets of the company are all formed by subsidiaries Oppein (Hong Kong)and ITALY ACADEMY. According to relevant regulations, the operating losses of subsidiaries Oppein (Hong Kong)and ITALY ACADEMY can be offset indefinitely.
31. Other non-current assets
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Advance payment for equipment engineering | 175,316,804.03 | 175,316,804.03 | 212,922,825.66 | 212,922,825.66 | ||
| Fixed deposit and interest provision for more than one year | 3,788,908,641.11 | 3,788,908,641.11 | 1,912,017,794.51 | 1,912,017,794.51 | ||
| Prepaid land payment | 18,600,000.00 | 18,600,000.00 | ||||
| Total | 3,964,225,445.14 | 3,964,225,445.14 | 2,143,540,620.17 | 2,143,540,620.17 | ||
32. Short-term loan
(1) Classification of short-term loan
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Pledge borrowings | 3,785,114,681.94 | 1,443,427,291.26 |
| Mortgage Loan | 0.00 | 37,210,338.01 |
| Guaranteed Loan | 100,087,083.33 | 150,127,500.00 |
| Credit borrowings | 699,493,238.31 | 758,361,041.66 |
| Total | 4,584,695,003.58 | 2,389,126,170.93 |
Explanation of short-term loan classification:
1. As of December 31, 2022, the balance of the Company's pledged loans was CNY 3,785,114,681.94, of whichCNY 22,658,614.59 was a loan formed by discounting the commercial acceptance bill received by the company fromGuangzhou Branch of Shanghai Pudong Development Bank co. Ltd., and the Company provided CNY 22,658,614.59 ofcommercial acceptance bill as collateral guarantee; CNY 13,906,193.21 was a loan formed by discounting the commercialacceptance bill received by the company from Guangzhou Airport Road Branch of China Merchants Bank Co., Ltd. andthe Company provided CNY 13,906,193.21 of commercial acceptance bill as collateral; CNY 2,549,874.14 was a loan
formed by discounting the received bank acceptance bill from the Foshan Branch of Guangzhou Bank Co., Ltd. and theCompany provided CNY 2,549,874.14 of bank acceptance bill as collateral; CNY 25,000,000.00 was a loan formed bythe subsidiary Chengdu Oppein Smart Home Co., Ltd. discounting a bank acceptance bill issued by the Company to ChinaConstruction Bank Co., Ltd. Guangzhou Jianggao Branch; CNY 300,000,000.00 was a loan formed by the subsidiaryChengdu Oppein Smart Home Co., Ltd. discounting a domestic letter of credit issued by the company to GuangzhouBranch of Shanghai Pudong Development Bank Co., Ltd., and the company provided a deposit of CNY 30,000,000.00 ascollateral guarantee; CNY 400,000,000.00 was a loan formed by the subsidiary Guangzhou Oppein Integration HomeCo., Ltd. discounting a bank acceptance bill issued by the company to the Kong Gang Economic Zone Branch ofGuangzhou Rural Commercial Bank, and the Company provided a deposit of CNY 40,000,000.00 as collateral guarantee;CNY 500,000.00 was a loan formed by the subsidiary Guangzhou Oppein Integration Home Co., Ltd. discounting thedomestic letter of credit issued by the Company to Guangzhou Branch of Shanghai Pudong Development Bank Co., Ltd.,and the company provided a deposit of CNY 50,000.00 as collateral; CNY 390,000,000.00 was a loan formed by thesubsidiary Wuxi (Jiangsu) Oppein Integration Home Co., Ltd. discounting a domestic letter of credit issued by theCompany to Guangzhou Branch of Shanghai Pudong Development Bank Co., Ltd., and the Company provided a depositof CNY 39,000,000.00 as collateral guarantee; CNY 200,000,000.00 was a loan formed by the subsidiary Wuxi (Jiangsu)Oppein Integration Home Co., Ltd. discounting the domestic letter of credit issued by the subsidiary Guangzhou OppeinIntegration Home Co., Ltd. to Guangzhou Airport Road Branch of China Merchants Bank Co., Ltd.; CNY 32,000,000.00was a loan formed by the subsidiary Oppein United (Tianjin) Home Sales Co., Ltd. discounting a bank acceptance billissued by the Company to Guangzhou Branch of China Minsheng Bank Co., Ltd.; CNY 200,000,000.00 was a loan formedby the subsidiary Qingyuan Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the Companyto Guangzhou Baiyun Branch Bank of China Limited, and the Company provided a deposit of CNY 10,000,000.00 ascollateral guarantee; CNY 480,000,000.00 was a loan formed by the subsidiary Qingyuan Oppein Integration Home Co.,Ltd. discounting a bank acceptance bill issued by the Company to Guangzhou Branch of Ping An Bank Co., Ltd., and theCompany provided a deposit of CNY 48,000,000.00 as collateral; CNY 150,000,000.00 was a loan formed by thesubsidiary Qingyuan Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the Company toGuangzhou Jianggao Branch of Agricultural Bank of China Limited, and the Company provided a deposit of CNY15,000,000.00 as collateral guarantee; CNY 500,000.00 was a loan formed by the subsidiary Qingyuan Oppein IntegrationHome Co., Ltd. discounting a domestic letter of credit issued by the Company to Guangzhou Branch of Shanghai PudongDevelopment Bank Co., Ltd., and the Company provided a deposit of CNY 50,000.00 as collateral guarantee; CNY320,000,000.00 was a loan formed by the subsidiary Qingyuan Oppein Integration Home Co., Ltd. discounting the bankacceptance bill issued by the subsidiary Guangzhou Oppein Integration Home Co., Ltd. to Guangzhou Branch of ShanghaiPudong Development Bank Co., Ltd., and the subsidiary Guangzhou Oppein Integration Home Co., Ltd. provided adeposit of CNY 32,000,000.00 as collateral guarantee; CNY 250,000,000.00 was a loan formed by the subsidiaryQingyuan Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the subsidiary GuangzhouOppein Integration Home Co., Ltd. to Guangzhou Branch of Ping An Bank Co., Ltd., and the subsidiary GuangzhouOppein Integration Home Co., Ltd. provided a deposit of CNY 25,000,000.00 as collateral guarantee; CNY200,000,000.00 was a loan formed by the subsidiary Qingyuan Oppein Integration Home Co., Ltd. discounting a domesticletter of credit issued by the subsidiary Guangzhou Oppein Integration Home Co., Ltd. to Guangzhou Branch of ShanghaiPudong Development Bank Co., Ltd., and the Company provides a deposit of CNY 20,000,000.00 as collateral guarantee;CNY 350,000,000.00 was a loan formed by the discount of a bank acceptance bill issued by the subsidiary GuangzhouOppein Integration Home Co., Ltd., received by the subsidiary Tianjin Oppein Integration Home Co., Ltd., to theGuangzhou Baiyun Branch of Bank of China Limited, and provided by the subsidiary Guangzhou Oppein IntegrationHome Co., Ltd. with a deposit of CNY 17,500,000.00 as collateral guarantee; CNY 298,000,000.00 was a loan formedby the subsidiary Tianjin Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the Companyto Guangzhou Branch of China Minsheng Bank Co., Ltd.; and CNY 150,000,000.00 was a loan formed by the subsidiaryTianjin Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the subsidiary Guangzhou OppeinIntegration Home Co., Ltd. to Guangzhou Baiyun Branch of Bank of China Limited, and the subsidiary GuangzhouOppein Integration Home Co., Ltd. provided a deposit of CNY 7,500,000.00 as collateral guarantee.
2. As of December 31, 2022, the Company's guaranteed loan balance of CNY 100,087,083.33 was borrowed by itssubsidiary Guangzhou Oppein Integration Home Co., Ltd. from Guangzhou Tianpingjia Branch of Industrial andCommercial Bank of China Limited, and the Company provided joint and several liability guarantees.
3. As of December 31, 2022, the Company's credit loan balance was CNY 699,493,238.31, of which CNY100,086,111.10 was borrowed by the Company from Guangzhou Sanyuanli Branch of Agricultural Bank of ChinaLimited; and CNY 599,407,127.21 was a loan from Guangzhou Tianpingjia Branch of Industrial and Commercial Bankof China Limited.
4. As of December 31, 2022, the Company does not have any overdue short-term loans.
(2) Information of overdue and unpaid short-term loans
□ Applicable √ Not applicable
The important outstanding short-term loans that have been overdue are as follows:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
33. Trading financial liabilities
□ Applicable √ Not applicable
34. Derivative financial liabilities
□ Applicable √ Not applicable
35. Notes payable
(1) List of notes payable
√ Applicable □ Not applicable
Unit: CNY
| Classification | Ending balance | Beginning balance |
| Commercial acceptance draft | 0.00 | 0.00 |
| Bank acceptance draft | 70,366,124.74 | 131,915,607.89 |
| Usance credit | 0.00 | 8,036,163.82 |
| Total | 70,366,124.74 | 139,951,771.71 |
The total amount of unpaid notes payable at the end of this period is CNY 0.00.As of December 31, 2022, the balance of bank acceptance bills was CNY 70,366,124.74, of which the balance ofbank acceptance bills opened by the Company at Guangzhou Branch of Shanghai Pudong Development Bank Co., Ltd.was CNY 21,357,986.17, and the Company provided a deposit of CNY 2,135,799.00; the balance of bank acceptancebills issued by the Company at Guangzhou Yihe Branch Industrial and Commercial Bank of China Limited was CNY38,046,787.43, with joint liability guarantee provided by its subsidiary Guangzhou Oppein Integration Home Co., Ltd.;the balance of bank acceptance bills issued by subsidiary Qingyuan Oppein Integration Home Co., Ltd. at QingyuanBranch of Guangfa Bank Co., Ltd. was CNY 6,367,520.82, and the subsidiary Qingyuan Oppein Integration Home Co.,Ltd. provided a deposit of CNY 636,752.08, and the Company provided joint liability guarantee; and the balance of bankacceptance bills issued by subsidiary Guangzhou Oppein Integration Home Co., Ltd. at Guangzhou Branch of ShanghaiPudong Development Bank Co., Ltd. was CNY 4,593,830.32, and the subsidiary Guangzhou Oppein Integration HomeCo., Ltd. provided a deposit of CNY 459,383.03, and the Company provided joint liability guarantee.
36. Accounts payable
(1) Listing of accounts payable
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Accounts payable | 1,908,743,254.29 | 2,018,248,874.11 |
| Total | 1,908,743,254.29 | 2,018,248,874.11 |
(2) Significant accounts payable with the aging over 1 year
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
37. Advance receipts
(1) List of advance receipts
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Receipts in advance | 364,393,984.51 | 885,811,485.23 |
| Total | 364,393,984.51 | 885,811,485.23 |
(2) Important advance payments with an aging of over 1 year
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
38. Contract liabilities
(1). Contract liability
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Advances on sales | 782,289,860.99 | 1,202,994,206.12 |
| Total | 782,289,860.99 | 1,202,994,206.12 |
(2) Amount and reasons for significant changes in book value during the reporting period
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
39. Payroll payable
(1) List of employee compensation payable
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Increase in current period | Decrease in the current period | Ending balance |
| I. Short term payroll | 561,430,166.62 | 3,542,939,704.04 | 3,589,721,160.39 | 514,648,710.27 |
| II. Post-employment benefit - defined contribution plan | 189,541,072.26 | 189,541,072.26 | ||
| III. Dismissal benefit | 26,699,487.78 | 26,699,487.78 | ||
| IV. Other welfares due within one year | ||||
| Total | 561,430,166.62 | 3,759,180,264.08 | 3,805,961,720.43 | 514,648,710.27 |
(2) List of short-term compensation
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Increase in current period | Decrease in the current period | Ending balance |
| I. Wages, salaries, bonuses, allowances and subsidies | 560,629,985.50 | 3,308,644,119.56 | 3,354,964,296.77 | 514,309,808.29 |
| II. Employee benefits | 557,531.00 | 74,724,364.79 | 75,281,895.79 | 0.00 |
| III. Social insurance premium | 0.00 | 110,176,840.72 | 110,176,840.72 | 0.00 |
| Including: medical insurance premium | 0.00 | 91,684,979.36 | 91,684,979.36 | 0.00 |
| Industrial injury insurance | 0.00 | 7,878,379.00 | 7,878,379.00 | 0.00 |
| Birth insurance premium | 0.00 | 6,554,864.75 | 6,554,864.75 | 0.00 |
| Other social insurance | 0.00 | 4,058,617.61 | 4,058,617.61 | 0.00 |
| IV. Housing fund | 0.00 | 47,756,250.71 | 47,756,250.71 | 0.00 |
| V. Labor union funds and employee educationfunds | 242,650.12 | 1,638,128.26 | 1,541,876.40 | 338,901.98 |
| VI. Short-term compensated | 0.00 | 0.00 | 0.00 | 0.00 |
| absence | ||||
| VII. Short-term profit sharing plan | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 561,430,166.62 | 3,542,939,704.04 | 3,589,721,160.39 | 514,648,710.27 |
(3) Presentation of defined contribution plan
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Increase in current period | Decrease in the current period | Ending balance |
| 1. Basic endowment insurance expense | 0.00 | 183,792,200.50 | 183,792,200.50 | 0.00 |
| 2.Unemployment insurance | 0.00 | 5,748,871.76 | 5,748,871.76 | 0.00 |
| 3. Corporate annuity payment | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 0.00 | 189,541,072.26 | 189,541,072.26 | 0.00 |
Other descriptions
√ Applicable □ Not applicable
As of December 31, 2022, the Company has no outstanding employee compensation payable.
40. Taxes and dues payable
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Value added tax | 64,081,546.00 | 35,494,240.63 |
| Corporate income tax | 163,516,753.96 | 202,982,320.76 |
| Individual income tax | 10,116,026.05 | 9,594,793.44 |
| Urban maintenance and construction tax | 5,387,000.99 | 5,061,796.85 |
| Education surcharges | 3,866,414.36 | 3,741,373.47 |
| Other | 22,238,005.11 | 4,458,462.18 |
| Total | 269,205,746.47 | 261,332,987.33 |
41. List of other payables
List of items√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Interest Payable | 0.00 | 0.00 |
| Dividend payable | 0.00 | 0.00 |
| Other payables | 840,531,618.28 | 667,841,099.64 |
| Total | 840,531,618.28 | 667,841,099.64 |
Other descriptions
□ Applicable √ Not applicable
Interest Payable
(1) Listed by category
□ Applicable √ Not applicable
Dividend payable
(1) Listed by category
□ Applicable √ Not applicable
Other payables
(1) Other accounts payable listed by nature of payment
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Margin for bulk business | 269,351,758.62 | 226,257,342.16 |
| Franchisee performance bond | 286,299,620.77 | 236,359,065.56 |
| Supplier quality guarantee deposit | 274,205,622.44 | 197,973,074.57 |
| Other | 10,674,616.45 | 7,251,617.35 |
| Total | 840,531,618.28 | 667,841,099.64 |
(2) Other material accounts payable aged over 1 year
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
42. Liabilities held for sale
□ Applicable √ Not applicable
43. Non-current liabilities due within one year
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Long-term loans due within one year | 202,047,638.24 | 0.00 |
| Lease liabilities due within one year | 39,683,015.46 | 13,286,652.37 |
| Total | 241,730,653.70 | 13,286,652.37 |
44. Other current liabilities
Other current liabilities
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Value added tax to be transferred for sale | 97,354,681.10 | 144,631,995.61 |
| Unrecognized bills | 803,972.43 | 0.00 |
| Total | 98,158,653.53 | 144,631,995.61 |
Increase or decrease in short-term payable bonds:
□ Applicable √ Not Applicable
Other descriptions
□ Applicable √ Not applicable
45. Long-term loan
(1) Classification of long-term loan
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Pledge borrowings | 0.00 | 0.00 |
| Mortgage Loan | 6,986,325.48 | 0.00 |
| Guaranteed Loan | 0.00 | 0.00 |
| Credit borrowings | 200,183,333.33 | 0.00 |
| Less: long-term loan due within one year | 202,047,638.24 | 0.00 |
| Total | 5,122,020.57 | 0.00 |
Explanation of classification of long-term loan:
1. As of December 31, 2022, the Company's credit loan balance was CNY 200,183,333.33, which was a loan fromChina Construction Bank Corporation, Guangzhou Baiyun Branch.
2. As of December 31, 2022, the balance of the Company's mortgage loans was CNY 6,986,325.48, of which CNY5,946,700.98 is a loan from the subsidiary FORMER S.R.L. to Cassa Rurale ed Artigiana SOC.COOP.CRL, which isprovided by the subsidiary FORMER S.R.L. as collateral for the house and land use rights; and CNY 1,039,624.50 is aloan from INTESA SANPAOLO SPA by FORMER S.R.L., which is secured by its subsidiary, FORMER S.R.L., withthe right to use the house and land as collateral.Other explanations, including interest rate range:
□ Applicable √ Not applicable
46. Bonds payable
(1) Bonds payable
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Convertible corporation bonds | 1,601,701,819.31 | 0.00 |
| Total | 1,601,701,819.31 | 0.00 |
(2) Increase or decrease in payable bonds: (excluding preferred stocks, perpetual bonds, and other financialinstruments classified as financial liabilities)
√ Applicable □ Not applicable
Unit: CNY
| Bond Name | Face value | Issue date | Bond duration | Issue amount | Beginning balance | Current issue | Accruing interest at face value | Amortization of excess and discount | Current repayment | Ending balance |
| Oppein 22 convertible bonds (113655) | 100.00 | August 5, 2022 | 6 years | 2,000,000,000.00 | 1,990,871,567.83 | 2,500,000.00 | 32,681,436.92 | 1,601,701,819.31 | ||
| Total | / | / | / | 2,000,000,000.00 | 1,990,871,567.83 | 2,500,000.00 | 32,681,436.92 | 1,601,701,819.31 |
(3) Explanation of conversion conditions and conversion time for convertible corporation bonds
√ Applicable □ Not applicable
With the approval of "ZJXK [2022] No.1328" of CSRC, the Company publicly issued 20,000,000.00 convertiblecorporation bonds on August 5, 2022, with a face value of CNY 100 each and a total issuance amount of CNY2,000,000,000.00. The term of the bonds is six years.
The coupon rate of the bonds issued by the Company is 0.3% in the first year, 0.5% in the second year, 1.0% in thethird year, 1.5% in the fourth year, 1.8% in the fifth year and 2.0% in the sixth year. The convertible corporation bondsissued this time adopt an annual interest payment method, and the starting date for interest calculation is the first day ofthe convertible corporation bond issuance. The annual interest payment date is the day of each full year from the first day
of the issuance of convertible corporation bonds. The conversion period starts from the first trading day six months afterthe end of the issuance of convertible corporation bonds and ends on the maturity date of convertible corporation bonds.The initial conversion price for convertible corporation bonds at the time of issuance is CNY 125.46 per share.
(4) Description of other financial instruments classified as financial liabilitiesBasic information of preferred shares, perpetual bonds and other financial instruments issued to the public at the end ofthe period
□ Applicable √ Not applicable
Statement of changes in financial instruments such as preferred shares and perpetual bonds issued to the public at the endof the period
□ Applicable √ Not applicable
Description of the basis for dividing other financial instruments into financial liabilities:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
47. Lease liabilities
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Lease liabilities | 101,476,366.50 | 12,665,970.28 |
| Total | 101,476,366.50 | 12,665,970.28 |
48. Long-term accounts payable
List of items
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Long-term payables
(1) Long-term accounts payable listed by nature of payment
□ Applicable √ Not applicable
Special accounts payables
(1) List special accounts payable by nature
□ Applicable √ Not applicable
49. Long-term employee compensation payable
□ Applicable √ Not applicable
50. Estimated liabilities
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Ending balance | Cause of formation |
| Estimated liabilities | 59,715.00 | 43,770.00 | The Company carried out the carries out the "Pudong Development Bank Quick Loan" business to recommend merchants to banks for loans, and assumed a prudent recommendation obligation to banks for the recommended merchants' repayment ability. The Company referred to the bank's provision for loan impairment of 1.5% for normal loans, and prudently recommended liability losses. |
| Total | 59,715.00 | 43,770.00 | / |
Other descriptions, including important assumptions and estimation explanations related to important estimated liabilities:
As of December 31, 2022, the estimated balance of liabilities is CNY 43,770.00, for that the Company carried outthe carries out the "Pudong Development Bank Quick Loan" business to recommend merchants to banks for loans, andassumed a prudent recommendation obligation to banks for the recommended merchants' repayment ability. TheCompany referred to the bank's provision for loan impairment of 1.5% for normal loans, and prudently recommendedliability losses.
51. Deferred income
Information of deferred income
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Increase in current period | Decrease in the current period | Ending balance | Cause of formation |
| Government subsidies | 471,292,317.05 | 61,519,100.00 | 63,110,343.87 | 469,701,073.18 | |
| Total | 471,292,317.05 | 61,519,100.00 | 63,110,343.87 | 469,701,073.18 | / |
Items involving government subsidies:
√ Applicable □ Not applicable
Unit: CNY
| Liability items | Beginning balance | Newly added subsidy amount in this period | Amount included in non-operating income for the current period | Amount included in other income in the current period | Other changes | Ending balance | Related to assets/related to returns |
| Project construction support funds | 254,152,674.50 | 49,376,400.00 | 16,981,685.83 | 286,547,388.67 | Assets-related | ||
| Special funds for technological transformation | 214,470,771.59 | 12,142,700.00 | 32,243,046.20 | 13,592,407.50 | 180,778,017.89 | Assets-related | |
| Special funds for pollution prevention and control | 2,668,870.96 | 293,204.34 | 2,375,666.62 | Assets-related |
Other descriptions
√ Applicable □ Not applicable
1. Projects supported by project construction support funds:
| Liability items | Beginning balance | Newly added subsidy amount in this period | Amount included in non-operating income for the current period | Amount included in other income in the current period | Other changes | Ending balance | Related to assets/related to returns |
| Construction of the "Investment Agreement" Project by the Management Committee of Tianjin Jinghai Economic Development Zone | 40,116,973.84 | 3,769,686.12 | 36,347,287.72 | Assets-related | |||
| Support funds | |||||||
| Wuxi Huishan District People's Government's Investment Agreement Project Construction Support Fund | 29,678,515.88 | 2,012,102.88 | 27,666,413.00 | Assets-related | |||
| Funds for the Oppein Chengdu Base Site Leveling and Fixed Asset Subsidy Project | 60,440,447.92 | 1,320,877.20 | 59,119,570.72 | Assets-related | |||
| Chengdu Oppein Smart Home Project Construction Phase I Support Fund | 3,416,666.54 | 500,000.04 | 2,916,666.50 | Assets-related | |||
| Special funds for industrial co-construction projects in the southern base | 70,500,070.32 | 35,896,400.00 | 9,158,005.63 | 97,238,464.69 | Assets-related | ||
| Construction Phase I Support Fund of Wuhan Oppein Smart Home Co., Ltd. | 50,000,000.00 | 50,000,000.00 | Assets-related | ||||
| Paid-in Registered Capital Award of Wuhan Oppein Smart Home Co., Ltd. | 8,000,000.00 | 8,000,000.00 | Assets-related | ||||
| Special funds for affordable rental housing | 5,480,000.00 | 221,013.96 | 5,258,986.04 | Assets-related | |||
| Total | 254,152,674.50 | 49,376,400.00 | 16,981,685.83 | 286,547,388.67 |
2. Projects subsidized with special funds for technological transformation:
| Liability items | Beginning balance | Newly added subsidy amount in this period | Amount included in non-operating income for the current period | Amount included in other income in the current period | Other changes | Ending balance | Related to assets/related to returns |
| Quartz stone | 20,320,700.32 | 8,780,133.95 | 11,540,566.37 | Assets- |
| countertop flexible manufacturing intelligent upgrade and transformation project | related | ||||||
| Furniture Production Line Distributed Workshop Top ES System Technical Renovation Project | 9,001,133.19 | 1,986,023.88 | 7,015,109.31 | Assets-related | |||
| Technical renovation project for a flexible customized production line with an annual output of 150,000 sets of furniture products | 21,648,917.21 | 3,651,887.40 | 17,997,029.81 | Assets-related | |||
| Expansion of production technology transformation project for high-end bathroom products | 10,055,723.87 | 3,112,108.57 | 6,943,615.30 | Assets-related | |||
| Subsidy for customized furniture intelligent production line technology transformation project | 4,904,911.67 | 769,872.69 | 4,135,038.98 | Assets-related | |||
| Technical Transformation Project for Expanding Production and Construction of 500,000 sets of High end Wardrobe Products per Year | 13,083,371.45 | 1,373,999.76 | 11,709,371.69 | Assets-related | |||
| Technical Transformation Project for Expanding the Production of 150,000 sets of Cabinets Per Year | 607,002.80 | 100,374.60 | 506,628.20 | Assets-related |
| Liability items | Beginning balance | Newly added subsidy amount in this period | Amount included in non-operating income for the current period | Amount included in other income in the current period | Other changes | Ending balance | Related to assets/related to returns |
| Technical Transformation Project for the Construction of Automatic Blister Door Panel Production Line | 2,203,339.26 | 385,408.20 | 1,817,931.06 | Assets-related | |||
| Customized Furniture Product Automation Flexible Spraying Production Line Upgrade Technology Transformation Project | 696,239.13 | 101,253.60 | 594,985.53 | Assets-related | |||
| High-End Wooden Door Product Flexible Manufacturing Production Line Technology Transformation Project | 8,179,547.32 | 1,322,204.04 | 6,857,343.28 | Assets-related | |||
| Technical Transformation Project of Home Furnishing Product Production Line | 4,767,986.61 | 738,817.56 | 4,029,169.05 | Assets-related | |||
| Technical Renovation Project for the Production Line of 500,000 sets of Kitchen Electrical Appliances Per Year | 2,102,717.38 | 219,371.88 | 1,883,345.50 | Assets-related | |||
| Oppein Home Furnishing Enterprise Research Institute Project | 8,489,403.39 | 1,212,771.96 | 7,276,631.43 | Assets-related | |||
| Large-scale Non-standard Customized Packaged Cabinet | 8,237,816.71 | 1,258,892.16 | 6,978,924.55 | Assets-related |
| Flexible Production Line Technology Transformation Project | |||||||
| Tianjin Intelligent Manufacturing Special Fund | 7,059,310.40 | 1,132,413.72 | 5,926,896.68 | Assets-related | |||
| Modern Industrial Development Fund Project - Enterprise Intelligent Transformation Project | 4,499,356.76 | 604,032.99 | 3,895,323.77 | Assets-related | |||
| Wuxi City Technical Transformation Guidance Fund | 2,950,125.33 | 406,048.32 | 2,544,077.01 | Assets-related | |||
| Upgraded Technical Transformation Project for the Production Line of Blister Door Panels (Guangzhou) | 1,099,797.08 | 104,117.64 | 995,679.44 | Assets-related | |||
| Guangzhou City Development Housing Rental Market Special Fund Award and Supplement Project | 62,223,021.00 | 1,838,199.00 | 13,592,407.50 | 46,792,414.50 | Assets-related | ||
| Special Funds for the Renovation Project of the Rapid Coating Production Line for Cabinet Furniture Paint Products | 783,635.29 | 88,952.04 | 694,683.25 | Assets-related | |||
| Special Funds for the Technical Transformation Project of Flexible Production Line with an Annual Output of 1.5M sets of Wooden Door Products | 20,332,232.47 | 2,364,371.76 | 17,967,860.71 | Assets-related | |||
| Automation Technology Transformation Project for Blister Door | 982,175.26 | 106,948.44 | 875,226.82 | Assets-related |
PanelProductionLine
| Liability items | Beginning balance | Newly added subsidy amount in this period | Amount included in non-operating income for the current period | Amount included in other income in the current period | Other changes | Ending balance | Related to assets/related to returns |
| Special funds for the third batch of municipal industrial development fund projects | 242,307.69 | 83,076.84 | 159,230.85 | Assets-related | |||
| Chengdu Municipal Bureau of Economic and Information Technology 2021 Citywide Technical Transformation Subsidy | 2,182,700.00 | 18,189.17 | 2,164,510.83 | Assets-related | |||
| Special funds for the first batch of provincial-level industrial development fund projects | 3,180,000.00 | 3,180,000.00 | Assets-related | ||||
| Intelligent Manufacturing and Industrial Internet Development Project | 6,780,000.00 | 483,576.03 | 6,296,423.97 | Assets-related | |||
| Total | 214,470,771.59 | 12,142,700.00 | 32,243,046.20 | 13,592,407.50 | 80,778,017.89 |
3. Projects subsidized by special funds for pollution prevention and control:
| Liability items | Beginning balance | Newly added subsidy amount in this period | Amount included in non-operating income for the current period | Amount included in other income in the current period | Other changes | Ending balance | Related to assets/related to returns |
| Tianjin Atmospheric Physics Prevention and Control Special Fund | 2,295,000.00 | 255,000.00 | 2,040,000.00 | Assets-related | |||
| Special Funds for Construction of VOCs Waste Gas | 373,870.96 | 38,204.34 | 335,666.62 | Assets-related |
| Treatment System in Wooden Door Factory | |||||||
| Total | 2,668,870.96 | 293,204.34 | 2,375,666.62 |
52. Other non-current liabilities
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Red Star Macalline Pazhou Project Purchase Deposit | 109,986,691.00 | 118,488,814.29 |
| Total | 109,986,691.00 | 118,488,814.29 |
Other descriptionsThe deposit for purchasing a house by Red Star Macalline is a deposit received by the Company in advance for thepurchase of part of the property rights of the Pazhou Oppein headquarters building by Red Star Macalline.
53. Equity
√ Applicable □ Not applicable
Unit: CNY
| Beginning balance | Increase/decrease in this change (+, -) | Ending balance | |||||
| New issue | Dividend | Provident fund conversion | Other | Sub-total | |||
| Total Shares | 609,151,948.00 | 6.00 | 6.00 | 609,151,954.00 | |||
Other descriptionsThe new shares issued by the Company in this period are due to the exercise of stock options granted by employees inthe previous period. Please refer to the relevant explanation in Section X "III. Basic Information of the Company 1.Company Overview" for details.
54. Other equity instruments
(1) Basic information of preferred shares, perpetual bonds and other financial instruments issued to the public atthe end of the period
√ Applicable □ Not applicable
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | ||||
| Quantity | Book value | Quantity | Book value | Quantity | Book value | Quantity | Book value | |
| Oppein 22 convertible bonds | 20 million | 424,351,185.44 | 20 million | 424,351,185.44 | ||||
| Total | 20 million | 424,351,185.44 | 20 million | 424,351,185.44 | ||||
(2) Statement of changes in financial instruments such as preferred shares and perpetual bonds issued to the publicat the end of the period
□ Applicable √ Not applicable
Explanation of the current increase or decrease in other equity instruments, the reasons for the changes, and the basis forrelevant accounting treatment:
□ Applicable √ Not Applicable
Other descriptions
□ Applicable √ Not applicable
55. Capital reserve
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Increase in current period | Decrease in the current period | Ending balance |
| Capital premium (share capital premium) | 4,349,628,351.14 | 925.83 | 0.00 | 4,349,629,276.97 |
| Other capital reserve | 11,735,456.40 | 0.00 | 1,220,664.08 | 10,514,792.32 |
| Total | 4,361,363,807.54 | 925.83 | 1,220,664.08 | 4,360,144,069.29 |
Other descriptions, including changes in current period and reasons for changes:
The increase of CNY 925.83 in share capital premium is due to employees exercising stock options granted in theprevious period, and the amount of paid capital exceeding the share capital is CNY 865.32. After the exercise, othercapital reserves recognized by the company due to equity incentive expenses in the previous period of CNY 60.51 aretransferred to the capital premium; and other capital reserves decreased by CNY 1,220,664.08, except for the impact ofemployee stock option exercise mentioned above, due to the Company's failure to meet the non market unlockingconditions in the second phase of the 2021 employee stock option incentive plan, and the company's reversal of previouslyrecognized share-based payment expenses.
56. Treasury stock
□ Applicable √ Not applicable
57. Other comprehensive income
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Amount incurred in current period | Ending balance | |||||
| Amount incurred before income tax in the current period | Less: the net amount that is included in other comprehensive profits of prior period and transferred into the current profits and loss | Less: Previous period included in other comprehensive income, current period transferred to retained earnings | Less: income tax expenses | Attributable to parent company after tax | Attributable to minority shareholder after tax | |||
| I. Other comprehensive income that cannot be transferred to profit or loss | 59,480,835.83 | 67,123,375.72 | 2,625,990.89 | 16,124,346.22 | 48,373,038.61 | 107,853,874.44 | ||
| Where: Re-measurement of changed amount of defined benefit plan | ||||||||
| Other comprehen | ||||||||
| sive income that cannot be transferred to profit or loss under the equity method | ||||||||
| Changes in fair value of other equity instrument investments | 59,480,835.83 | 67,123,375.72 | 2,625,990.89 | 16,124,346.22 | 48,373,038.61 | 107,853,874.44 | ||
| Changes in the fair value of the Company's own credit risk | ||||||||
| II. Other comprehensive income that will be reclassified into profit or loss | 99,844.73 | 3,472,962.83 | 3,472,962.83 | 3,572,807.56 | ||||
| Where: Other comprehensive income that can be transferred to profits or losses under the equity method | ||||||||
| Changes in fair value of other creditor's right investment | ||||||||
| Amount of financial assets reclassified into other comprehensive income | ||||||||
| Provision for credit impairment of other creditor's right investment |
| Item | Beginning balance | Amount incurred in current period | Ending balance | |||||
| Amount incurred before income tax in the current period | Less: the net amount that is included in other comprehensive profits of prior period and transferred into the current profits and loss | Less: Previous period included in other comprehensive income, current period transferred to retained earnings | Less: income tax expenses | Attributable to parent company after tax | Attributable to minority shareholder after tax | |||
| Cash flow hedging reserve | ||||||||
| Translation difference of foreign currency financial statements | 99,844.73 | 3,472,962.83 | 3,472,962.83 | 3,572,807.56 | ||||
| Total of other comprehensive income | 59,580,680.56 | 70,596,338.55 | 2,625,990.89 | 16,124,346.22 | 51,846,001.44 | 111,426,682.00 | ||
58. Special reserve
□ Applicable √ Not applicable
59. Special reserve
√ Applicable □ Not applicable
Unit: CNY
| Item | Beginning balance | Increase in current period | Decrease in the current period | Ending balance |
| Legal surplus reserve | 304,575,974.00 | 3.00 | 0.00 | 304,575,977.00 |
| Discretionary surplus reserve | 0.00 | 0.00 | 0.00 | 0.00 |
| Reserve funds | 0.00 | 0.00 | 0.00 | 0.00 |
| Enterprise expansion fund | 0.00 | 0.00 | 0.00 | 0.00 |
| Other | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 304,575,974.00 | 3.00 | 0.00 | 304,575,977.00 |
Other descriptions of surplus, including changes in current period and reasons for changes:
The surplus reserve is formed by withdrawing 10% of the parent company's net profit from the statutory surplus reserve,and the withdrawal amount is limited to 50% of the Company's share capital
60. Undistributed profit
√ Applicable □ Not applicable
Unit: CNY
| Item | Current period | Previous period |
| Undistributed profits before adjustment at end of the previous period | 9,074,118,319.30 | 7,149,700,284.23 |
| Total undistributed profits in the adjustment beginning period (increase in +, decrease in –) | 0.00 | 0.00 |
| Undistributed profit at the end of the adjustment period | 9,074,118,319.30 | 7,149,700,284.23 |
| Plus: Net profits attributable to parent company in this period | 2,688,425,483.50 | 2,665,588,441.38 |
| Item | Current period | Previous period |
| Plus: Income from disposal of equity designated as measured at fair value with changes recognized in other comprehensive income | 1,969,493.17 | 0.00 |
| Less: withdrawal of legal surplus reserves | 3.00 | 16,052,504.71 |
| Withdrawal of discretionary surplus reserve | 0.00 | 0.00 |
| Withdrawal of general risk reserves | 0.00 | 0.00 |
| Dividends payable on ordinary shares | 1,066,015,909.00 | 725,117,901.60 |
| Common stock dividends converted into share capital | 0.00 | 0.00 |
| Undistributed profit at the end of the period | 10,698,497,383.97 | 9,074,118,319.30 |
Details of undistributed profits at the beginning of the adjustment period:
1. Due to the retrospective adjustment of the Accounting Standards for Business Enterprises and related newregulations, the undistributed profit at the beginning of the period was affected by CNY 0.00.
2. Due to changes in accounting policies, the undistributed profit at the beginning of the period was CNY 0.00.
3. Due to significant accounting error correction, the undistributed profit at the beginning of the period was CNY
0.00.
4. Due to changes in the scope of consolidation caused by the same control, the undistributed profit at the beginningof the period was CNY 0.00.
5. The total impact of other adjustments on the undistributed profit at the beginning of the period was CNY 0.00.
61. Operating income and operating cost
(1) Operating income and operating cost
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period | ||
| IncomIncomee | Cost | IncomIncomee | Cost | |
| Main business | 22,000,522,428.80 | 15,144,117,735.57 | 20,144,967,469.42 | 13,825,554,770.27 |
| Other businesses | 478,981,045.76 | 230,066,980.57 | 296,637,122.08 | 152,785,752.32 |
| Total | 22,479,503,474.56 | 15,374,184,716.14 | 20,441,604,591.50 | 13,978,340,522.59 |
(2) Information of income generated by the contract
□ Applicable √ Not applicable
Description of income generated by the contract:
□ Applicable √ Not applicable
(3) Description of performance obligations
√ Applicable □ Not applicable
As of December 31, 2022, the corresponding transaction price for performance obligations that have been signed buthave not yet been fulfilled or completed was CNY 1,009,019,870.23. Revenue is expected to be recognized between 2023and 2024.
(4) Description of allocation to remaining performance obligations
□ Applicable √ Not applicable
62. Tax and surcharges
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Urban maintenance and construction tax | 59,228,200.76 | 53,309,354.32 |
| Education surcharges | 25,424,444.24 | 23,349,776.47 |
| Local education surcharges | 16,903,221.26 | 15,566,517.66 |
| Property tax | 45,739,904.54 | 36,690,061.98 |
| Land use tax | 5,983,879.81 | 4,986,531.00 |
| Stamp duty | 13,724,195.34 | 8,716,003.29 |
| Other | 1,014,466.33 | 146,634.23 |
| Total | 168,018,312.28 | 142,764,878.95 |
63. Sales expense
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Advertising exhibition fees | 643,925,038.82 | 507,928,041.71 |
| Employee benefits | 734,218,701.43 | 613,653,488.05 |
| Business office expenses | 185,165,124.31 | 171,737,452.68 |
| Rental and decoration fees | 101,244,607.38 | 71,485,160.83 |
| Export expenses | 6,860,613.20 | 12,653,476.45 |
| Other | 7,480,029.00 | 8,315,158.31 |
| Total | 1,678,894,114.14 | 1,385,772,778.03 |
64. Administrative expenses
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Employee benefits | 752,197,741.76 | 609,625,156.76 |
| Office expenses | 236,940,805.62 | 193,125,060.25 |
| Depreciation and amortization expenses | 256,642,914.27 | 253,992,293.81 |
| Car expenses | 19,416,712.27 | 17,104,917.30 |
| Other | 71,755,306.02 | 45,862,810.28 |
| Equity incentive expenses | -1,220,603.57 | 11,735,456.40 |
| Total | 1,335,732,876.37 | 1,131,445,694.80 |
65. R&D expenses
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Employee benefits | 592,127,705.37 | 468,891,799.33 |
| Material consumption | 432,410,933.68 | 345,504,415.91 |
| Depreciation and amortization expenses | 42,224,204.93 | 40,009,867.45 |
| Other | 56,486,087.15 | 53,352,084.04 |
| Total | 1,123,248,931.13 | 907,758,166.73 |
66. Financial expenses
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Interest expense | 152,770,445.92 | 132,807,862.73 |
| Less: interest income | 380,881,220.85 | 266,051,753.30 |
| Exchange profits and losses | -33,261,629.49 | 9,717,426.37 |
| Other | 13,973,236.43 | 8,045,588.32 |
| Total | -247,399,167.99 | -115,480,875.88 |
67. Other income
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Government subsidies related to assets | 49,517,936.37 | 39,990,918.13 |
| Grants related to income | 56,592,293.83 | 45,776,002.32 |
| Refund of individual income tax handling fee | 2,411,938.79 | 1,802,824.49 |
| Value added tax reduction and exemption | 11,117,717.59 | 3,536,830.50 |
| Total | 119,639,886.58 | 91,106,575.44 |
Other descriptions:
1. The details of government subsidies included in the current profits and losses during the reporting period are asfollows:
| No. | Name of government subsidy project | The amount incurred in current period | Amount incurred in last period |
| 1 | Support Fund for Construction of the Investment Agreement Project by the Management Committee of Tianjin Jinghai Economic Development Zone | 3,769,686.12 | 3,769,686.12 |
| 2 | Furniture Production Line Distributed Workshop MES System Technical Renovation Project | 1,986,023.88 | 2,000,878.40 |
| 3 | Technical renovation project for a flexible customized production line with an annual output of 150,000 sets of furniture products | 3,651,887.40 | 3,651,887.40 |
| 4 | Technical Transformation Project of Home Furnishing Product Production Line | 738,817.56 | 738,817.56 |
| 5 | Expansion of production technology transformation project for high-end bathroom products | 3,112,108.57 | 2,536,588.87 |
| No. | Name of government subsidy project | The amount incurred in current period | Amount incurred in last period |
| 6 | High-End Wooden Door Product Flexible Manufacturing Production Line Technology Transformation Project | 1,322,204.04 | 1,095,524.69 |
| 7 | Wuxi Huishan District People's Government's Investment Agreement Project Construction Support Fund | 2,012,102.88 | 2,012,102.88 |
| 8 | Subsidy for customized furniture intelligent production line technology transformation project | 769,872.69 | 840,087.86 |
| 9 | Wuxi City Technical Transformation Guidance Fund | 406,048.32 | 395,946.72 |
| 10 | Funds for the Oppein Chengdu Base Site Leveling and Fixed Asset Subsidy Project | 1,320,877.20 | 1,320,877.20 |
| 11 | Chengdu Oppein Smart Home Project Construction Phase I Support Fund | 500,000.04 | 500,000.04 |
| 12 | Quartz Stone Countertop Flexible Manufacturing Intelligent Upgrade and Transformation Project | 8,780,133.95 | 8,801,812.72 |
| 13 | Technical Renovation Project for the Production Line of 500,000 sets of Kitchen Electrical Appliances Per Year | 311,514.48 | 242,407.53 |
| 14 | Oppein Home Furnishing Enterprise Research Institute Project | 1,212,771.96 | 1,212,771.96 |
| 15 | Upgraded Technical Transformation Project for the Production Line of Blister Door Panels (Guangzhou) | 164,958.84 | 119,220.57 |
| 16 | Technical Transformation Project for Expanding Production and Construction of 500,000 sets of High end Wardrobe Products per Year | 1,373,999.76 | 1,373,999.76 |
| 17 | Technical Transformation Project for the Construction of Automatic Blister Door Panel Production Line | 385,408.20 | 385,408.20 |
| 18 | Technical Transformation Project for Expanding the Production of 150,000 sets of Cabinets Per Year | 100,374.60 | 100,374.60 |
| 19 | Customized Furniture Product Automation Flexible Spraying Production Line Upgrade Technology Transformation Project | 101,253.60 | 101,253.60 |
| 20 | Large-scale Non-standard Customized Packaged Cabinet Flexible Production Line Technology Transformation Project | 1,258,892.16 | 1,258,892.20 |
| 21 | Special Funds for the Renovation Project of the Rapid Coating Production Line for Cabinet Furniture Paint Products | 88,952.04 | 88,952.04 |
| 22 | Transfer of the Third Batch of Tianjin Intelligent Manufacturing Special Fund in 2019 | 1,132,413.72 | 1,132,413.74 |
| 23 | Special Funds for the Technical Transformation Project of Flexible Production Line with an Annual Output of 1.5 million sets of Wooden Door Products | 2,364,371.76 | 1,857,767.53 |
| 24 | Automation Technology Transformation Project for Blister Door Panel Production Line | 106,948.44 | 17,824.74 |
| 25 | Special funds for industrial co-construction projects in the southern base | 9,158,005.63 | 3,585,429.68 |
| 26 | Special funds for the third batch of municipal industrial development fund projects | 83,076.84 | 27,692.31 |
| 27 | Tianjin Atmospheric Physics Prevention and Control Special Fund | 255,000.00 | 255,000.00 |
| 28 | Special Funds for Construction of VOCs Waste Gas Treatment System in Wooden Door Factory | 38,204.34 | 6,129.04 |
| 29 | Modern Industrial Development Fund Project - Enterprise Intelligent Transformation Project | 604,032.99 | 561,170.17 |
| 30 | Guangzhou City Development Housing Rental Market Special Fund Award and Supplement Project | 1,685,215.20 | |
| 31 | Special Funds for Intelligent Manufacturing and Industrial Internet Development | 483,576.03 | |
| 32 | Special funds for affordable rental housing | 221,013.96 | |
| 33 | 2021 Citywide Technical Transformation Subsidy | 18,189.17 | |
| Subtotal of government subsidies related to assets | 49,517,936.37 | 39,990,918.13 | |
| 34 | Internship subsidy | 46,896.00 | 87,596.00 |
| No. | Name of government subsidy project | The amount incurred in current period | Amount incurred in last period |
| 35 | Subsidy for 2018 Tianjin Intelligent Manufacturing Special Encourage Enterprises to Increase R&D Investment Projects | 437,900.00 | |
| 36 | Guangzhou High-tech Enterprises Recognized and Awarded | 900,000.00 | |
| 37 | Stabilization allowance | 11,814,932.88 | 13,259,077.32 |
| 38 | Advance Subsidy for New Apprenticeship Training | 302,500.00 | 1,559,150.00 |
| 39 | Subsidy for Job Training | 67,000.00 | 1,439,994.00 |
| 40 | Work as training subsidy | 20,898,660.00 | |
| 41 | Huishan District Qianzhou Street Pioneer Talent Funding Fund | 440,000.00 | |
| 42 | One-time Employment Subsidies for College Graduates | 24,000.00 | |
| 43 | Other Employment Subsidies | 15,000.00 | |
| 44 | Intellectual Property Award from the Finance Bureau of Qingcheng District, Qingyuan City | 15,925.00 | |
| 45 | Subsidy for Skill Training for Millions of Workers | 338,500.00 | |
| 46 | Industrial Technology Development Subsidies | 1,200,000.00 | |
| 47 | Rewards for Supporting Key Enterprises | 2,000,000.00 | |
| 48 | Headquarters Enterprise Reward Funds | 4,350,000.00 | 509,200.00 |
| 49 | Reward and Subsidy Funds for High-end Professional Service Industry | 30,000.00 | |
| 50 | Subsidy for Intelligent Renovation of Modern Industrial Development in Qianzhou Street | 240,000.00 | |
| 51 | Unemployment Dynamic Detection and Investigation Fee | 1,000.00 | |
| 52 | Tax preferential support for Qianzhou Street | 27,125,000.00 | 2,039,000.00 |
| 53 | Qianzhou Street Enterprise Supporting Action Subsidy (Top 10 Value Added Tax Paid in Current Year) | 180,000.00 | |
| 54 | Subsidy Funds for Promoting Rural Revitalization | 71,000.00 | |
| 55 | Special Funds for Foreign Economic and Trade Development | 140,000.00 | 64,683.00 |
| 56 | Special Fund for Business Development in Guangzhou (Import and Export Fair Trade Matters) | 25,317.00 | |
| 57 | Tax Preferential Support for Jinghai County, Tianjin | 5,000,000.00 | |
| 58 | The 7th Guangdong Provincial Government Quality Award | 2,000,000.00 | |
| 59 | Funds for the full process data management and display platform of customized home furnishings based on the new big data framework | 1,820,000.00 | |
| 60 | Recruitment subsidies | 1,042,474.41 | |
| 61 | Guangdong Province Employment and Entrepreneurship Subsidy | 482,149.51 | |
| 62 | Vocational Skills Training Subsidies | 409,200.00 | |
| 63 | One-time Job Expansion Subsidy | 403,044.06 |
| No. | Name of government subsidy project | The amount incurred in current period | Amount incurred in last period |
| 64 | Employment Subsidy for Poverty Alleviation Population | 162,408.07 | |
| 65 | Guangdong Provincial Government Quality Award Reward Fund | 300,000.00 | |
| 66 | Huishan District Science and Technology Bureau's Second Batch of Provincial High-tech Enterprise Cultivation Funds for 2021 | 300,000.00 | |
| 67 | 2022 Wuxi Industrial Transformation and Upgrading Fund (Second Batch) Support Project Fund | 250,000.00 | |
| 68 | Chengdu Industrial Enterprise Stable Production and Increasing Production Incentive Project | 218,300.00 | |
| 69 | Reward for the "Shuangliu Growth of 50 Items" Project Management Team | 100,000.00 | |
| 70 | Subsidy for Standard Formulation and Revision | 57,000.00 | |
| 71 | Rewards for enterprises above the designated quota added to the wholesale industry with special funds for business development in Guangzhou in 2021 | 50,000.00 | |
| 72 | Rural revitalization and poverty alleviation subsidy | 39,600.00 | |
| 73 | Subsidy for employment and entrepreneurship of college graduates and those facing employment difficulties in Guangdong Province | 39,586.71 | |
| 74 | Financial counterpart assistance funds | 30,000.00 | |
| 75 | Technology insurance premium subsidy | 20,300.00 | |
| 76 | Filing and registration of social security subsidies for impoverished labor force | 15,238.04 | |
| 77 | Patent funding | 4,500.00 | |
| 78 | Subsidy for dynamic monitoring of unemployment in 2022 | 1,200.00 | |
| 79 | Stamp duty refund | 964.15 | |
| Subtotal of government subsidies related to income | 56,592,293.83 | 45,776,002.32 | |
| Total | 106,110,230.20 | 85,766,920.45 | |
2. All government subsidy projects mentioned above are included in non-recurring profits and losses.
68. Income from investment
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Long-term equity investment income accounted by Equity method | -1,525,058.67 | -6,461,645.66 |
| Investment income from disposal of long-term equity investment | 0.00 | 0.00 |
| Investment income during the holding of transactional financial assets | 0.00 | 0.00 |
| Dividend income obtained from other equity instrument investments during the holding period | 6,251,775.00 | 893,000.00 |
| Interest income obtained from debt investments during the holding period | ||
| Bet returns on performance obtained during the holding period of other equity instrument investments | 0.00 | 1,034,631.75 |
| Dividend income obtained from other non current financial assets during the holding period | 795,116.38 | 376,737.60 |
| Other interest income obtained from debt investments during the holding period | ||
| Investment income from disposal of trading financial assets | 7,040,900.10 | 24,733,439.44 |
| Investment income from disposal of other equity instrument investments | ||
| Investment income from disposal of debt investments |
| Investment income from disposal of other debt investments | ||
| Profits on debt restructuring | ||
| Investment income from disposal of other non-current financial assets | 10,863,605.74 | 0.00 |
| Total | 23,426,338.55 | 20,576,163.13 |
69. Net exposure hedging income
□ Applicable √ Not applicable
70. Income from changes in fair value
√ Applicable □ Not applicable
Unit: CNY
| Sources of income from changes in fair value | The amount incurred in current period | Amount incurred in last period |
| Trading financial assets | 3,050,958.90 | 24,395,812.07 |
| Where: Income from changes in fair value generated by derivative financial instruments | 0.00 | 0.00 |
| Trading financial liabilities | 0.00 | 0.00 |
| Investment real estate measured at fair value | 0.00 | 0.00 |
| Other non-current financial assets | -36,815,234.41 | 27,896,754.20 |
| Total | -33,764,275.51 | 52,292,566.27 |
71. Credit impairment loss
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Bad debt loss on notes receivable | 23,359,815.72 | -24,992,807.49 |
| Bad debt loss on accounts receivable | -121,602,989.43 | -81,720,232.63 |
| Bad debt losses on other receivables | -1,544,380.27 | -1,592,911.63 |
| Impairment losses on debt investments | 0.00 | 0.00 |
| Impairment losses on other debt investments | 0.00 | 0.00 |
| Bad debt losses on long-term receivables | 0.00 | 0.00 |
| Impairment loss from contract assets | 0.00 | 0.00 |
| Total | -99,787,553.98 | -108,305,951.75 |
72. Assets impairment loss
□ Applicable √ Not applicable
73. Asset disposal income
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Income from disposal of fixed assets | -2,205,162.14 | -6,782,217.94 |
| Income from disposal of intangible assets | 1,937,982.41 | 0.00 |
| Total | -267,179.73 | -6,782,217.94 |
74. Non-operating income
Information of non-operating income
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period | Amount included in current non-recurring profit and loss |
| Total gains on disposal of non-current assets | 0.00 | 0.00 | 0.00 |
| Including: fixed asset disposal gains | 0.00 | 0.00 | 0.00 |
| Gains from disposal of intangible assets | 0.00 | 0.00 | 0.00 |
| Gains from non-monetary asset exchange | 0.00 | 0.00 | 0.00 |
| Donations | 0.00 | 0.00 | 0.00 |
| Government subsidies | 145,400.00 | 135,500.00 | 145,400.00 |
| Penalty income | 11,980,057.86 | 13,331,742.43 | 11,980,057.86 |
| Other | 14,408,487.24 | 18,918,386.12 | 14,408,487.24 |
| Total | 26,533,945.10 | 32,385,628.55 | 26,533,945.10 |
Governmental subsidies recognized in profits and losses of current period
√ Applicable □ Not applicable
Unit: CNY
| Subsidy Item | Amount incurred in current period | Amount incurred in the previous period | Related to assets/related to returns |
| Statistics office subsidies | 1,400.00 | 1,300.00 | Earning-related |
| Funding for the election work of the congress | 84,200.00 | Earning-related | |
| Funding for Party building work in two new party organizations | 144,000.00 | 50,000.00 | Earning-related |
| Total | 145,400.00 | 135,500.00 |
Other descriptions:
□ Applicable √ Not applicable
75. Non-operating expenditure
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period | Amount included in current non-recurring profit and loss |
| Total loss on disposal of non current assets | 8,750,883.65 | 14,141,159.49 | 8,750,883.65 |
| Where: loss on disposal of fixed assets | 8,750,883.65 | 14,141,159.49 | 8,750,883.65 |
| Item | The amount incurred in current period | Amount incurred in last period | Amount included in current non-recurring profit and loss |
| Loss on disposal of intangible assets | 0.00 | 0.00 | 0.00 |
| Loss on exchange of non monetary assets | 0.00 | 0.00 | 0.00 |
| External donations | 1,400,000.00 | 105,836.30 | 1,400,000.00 |
| Other | 4,769,070.62 | 3,073,218.11 | 4,769,070.62 |
| Total | 14,919,954.27 | 17,320,213.90 | 14,919,954.27 |
76. Income tax expenses
(1) Income tax expense statement
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Current income tax expense | 383,796,557.60 | 442,085,157.84 |
| Deferred income tax expense | 1,375,277.48 | -31,282,565.78 |
| Total | 385,171,835.08 | 410,802,592.06 |
(2) Accounting profit and income tax expense adjustment process
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period |
| Total profits | 3,067,684,899.23 |
| Income tax expenses calculated based on statutory/applicable tax rates | 460,152,734.87 |
| The impact of different tax rates applicable to subsidiaries | -4,889,136.17 |
| The impact of adjusting previous period income tax | -7,401,943.81 |
| The impact of non-taxable income | -2,485,079.10 |
| The impact of non-deductible costs, expenses, and losses | 5,430,433.13 |
| The impact of deductible losses on unrecognized deferred income tax assets in the prior period of use | -1,243.12 |
| The impact of deductible temporary differences or deductible losses on unrecognized deferred income tax assets in the current period | 396,622.53 |
| The impact of additional deductions on expenses | -66,030,553.25 |
| Income tax expense | 385,171,835.08 |
Other descriptions
□ Applicable √ Not applicable
77. Other comprehensive income
√ Applicable □ Not applicable
See Notes for details
| Item | The amount incurred in current period | Amount incurred in last period |
| Net of tax of other comprehensive income attributable to the shareholders of the parent company | 53,815,494.61 | 29,623,688.67 |
| (I) Other comprehensive income not reclassified into profit or loss subsequently | 50,342,531.78 | 29,903,289.16 |
| Where: Profits and losses from changes in fair value of other equity instrument investments | 50,342,531.78 | 29,903,289.16 |
| Item | The amount incurred in current period | Amount incurred in last period |
| (II) Other comprehensive income that will be reclassified into profit or loss | 3,472,962.83 | -279,600.49 |
| Where: Translation difference of foreign currency financial statements | 3,472,962.83 | -279,600.49 |
| After-tax net amount of other comprehensive incomes attributable to the minority shareholders | 0.00 | 0.00 |
| Total | 53,815,494.61 | 29,623,688.67 |
78. Cash flow statement items
(1) Other cash received related to operating activities
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Interest income | 268,525,515.81 | 214,805,909.58 |
| Government subsidies | 118,256,793.83 | 227,947,955.82 |
| Deposit and business deposit | 71,784,879.33 | 27,714,279.54 |
| Other | 29,890,883.89 | 36,074,731.97 |
| Total | 488,458,072.86 | 506,542,876.91 |
(2) Other cash paid relating to operating activities
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Advertising expenses paid in cash | 643,925,038.82 | 507,928,041.71 |
| Other sales expenses other than advertising expenses paid in cash | 237,226,035.92 | 243,070,146.64 |
| Management expenses paid in cash | 333,854,765.45 | 256,092,787.83 |
| Other | 503,671,400.01 | 411,784,920.83 |
| Total | 1,718,677,240.20 | 1,418,875,897.01 |
(3) Other cash received related to investment activities
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Red Star Macalline Pazhou Project Purchase Deposit | 91,497,876.71 | 43,398,342.05 |
| Total | 91,497,876.71 | 43,398,342.05 |
(4) Other cash paid relating to investment activities
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Refund of Red Star Macalline Pazhou Project Purchase Deposit | 100,000,000.00 | |
| Total | 100,000,000.00 |
(5) Other cash received related to financing activities
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Financing margin | 3,218,348.22 | 481,821.60 |
| Total | 3,218,348.22 | 481,821.60 |
(6) Other cash paid in connection with financing activities
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Financing margin | 139,824,778.24 | 86,367,619.17 |
| Payment of fees related to convertible bond issuance | 4,128,432.17 | 0.00 |
| Repayment of principal and interest on lease liabilities | 53,357,033.74 | 14,614,303.08 |
| Total | 197,310,244.15 | 100,981,922.25 |
79. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
√ Applicable □ Not applicable
Unit: CNY
| Further information | Amount of current period | Amount of previous period |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 2,682,513,064.15 | 2,664,153,384.02 |
| Plus: provision for asset impairment | 0.00 | |
| Losses from credit impairment | 99,787,553.98 | 108,305,951.75 |
| Depreciation of fixed assets, depletion of oil and gas assets, and depreciation of productive biological assets | 648,451,950.83 | 592,561,143.97 |
| Depreciation of right of use assets | 47,986,840.11 | 14,381,858.44 |
| Depreciation and amortization of investment real estate | 55,102,063.75 | 881,624.61 |
| Amortization of intangible assets | 39,254,700.85 | 54,429,214.59 |
| Amortisation of long-term unamortized expense | 63,913,121.72 | 48,602,717.91 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets ("-" for gains) | 267,179.73 | 6,782,217.94 |
| Fixed asset retirement loss (gains expressed with "-") | 8,750,883.65 | 14,141,159.49 |
| Loss on change in fair value (gains expressed with "-") | 33,764,275.51 | -52,292,566.27 |
| Financial cost (gains expressed with "-") | 130,315,284.45 | 144,219,819.00 |
| Investment losses (gains expressed with "-") | -23,426,338.55 | -20,576,163.13 |
| Decrease of deferred income tax assets ("-" for increases) | -20,325,627.08 | -25,258,212.43 |
| Increases of deferred income tax liabilities ("-" for gains) | 21,700,904.56 | -6,024,353.35 |
| Decrease of inventory ("-" for increases) | 49,491,682.91 | -654,467,996.69 |
| Further information | Amount of current period | Amount of previous period |
| Decreases of operational receivables ("-" for increases) | -525,861,893.35 | -700,134,584.78 |
| Increases of operating payables ("-" for decreases) | -893,864,603.43 | 1,862,704,145.36 |
| Other | -6,840,272.67 | -18,178,146.44 |
| Incentive expenses of restricted stock | -1,220,603.57 | 11,735,456.40 |
| Net cash flows from operating activities | 2,409,760,167.55 | 4,045,966,670.39 |
| 2. Major investment and financial activities not involving cash: | ||
| Conversion of debt into capital | 0.00 | 0.00 |
| Convertible corporate bonds due within one year | 0.00 | 0.00 |
| Financing leased fixed assets | 0.00 | 0.00 |
| 3. Changes of cash and cash equivalents: | ||
| Closing balance of cash | 3,630,430,094.53 | 5,341,817,438.33 |
| Less: opening balance of cash | 5,341,817,438.33 | 3,558,468,311.68 |
| Plus: closing balance of cash equivalents | 0.00 | 0.00 |
| Less: opening balance of cash equivalents | 0.00 | 0.00 |
| Net increase in cash and cash equivalents | -1,711,387,343.80 | 1,783,349,126.65 |
(2) Net cash paid for acquiring subsidiaries in the current period
√ Applicable □ Not applicable
Unit: EUR
| FORMER S.R.L. | Amount |
| Cash or cash equivalents paid for business merger in the current period | 4,632,499.38 |
| Where: FORMER S.R.L. | 4,632,499.38 |
| Less: Cash and cash equivalents held by the Company on the date of purchase | 13,275.56 |
| Where: FORMER S.R.L. | 13,275.56 |
| Cash or cash equivalents paid for business combinations in previous periods | 0.00 |
| Net cash paid for acquiring subsidiaries | 4,619,223.82 |
(3) Net cash received from disposal of subsidiaries in the current period
□ Applicable √ Not applicable
(4) Formation of cash and cash equivalents
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| I. Cash | 3,630,430,094.53 | 5,341,817,438.33 |
| Including: cash in hand | 12,648.66 | 7,433.29 |
| Bank deposit that can be used for payment at any time | 3,613,957,350.36 | 5,312,904,437.86 |
| Other monetary fund available for payment at any time | 16,460,095.51 | 28,905,567.18 |
| Available fund that is deposited into the Central Bank for payment | 0.00 | 0.00 |
| Interbank deposits | 0.00 | 0.00 |
| Interbank loans | 0.00 | 0.00 |
| II. Cash equivalents | 0.00 | 0.00 |
| Including: investment in bonds to be matured in 3 months | 0.00 | 0.00 |
| III. Balance of cash and cash equivalents at the end of the period | 3,630,430,094.53 | 5,341,817,438.33 |
| Including: restricted cash and cash equivalents used by parent company or subsidiaries of the group | 0.00 | 0.00 |
Other descriptions
□ Applicable √ Not applicable
80. Notes to items in the statement of changes in owner's equity
Explain the names and adjusted amounts of "other" items that have been adjusted to the ending balance of the previousyear:
□ Applicable √ Not applicable
81. Assets with restricted ownership or use right
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending book value | Reasons for restriction |
| Cash and bank balances | 312,566,682.72 | Bank acceptance bill margin, letter of credit margin, letter of guarantee margin, external guarantee margin, court ruling to freeze, restricted funds used by e-commerce platforms |
| Trading financial assets | 803,050,958.90 | There is a redemption period and a closure period for financial products |
| Fixed assets | 49,699,840.67 | There is mortgage guarantee for house property |
| Intangible assets | 39,497,528.36 | There is mortgage guarantee for intangible assets |
| Notes receivable | 39,114,681.94 | Pledged for business needs |
| Total | 1,243,929,692.59 | / |
82. Foreign currency monetary items
(1) Foreign currency monetary items
√ Applicable □ Not applicable
| Item | Closing foreign currency balance | Converted exchange rate | Closing balance converted into CNY |
| Cash and bank balances | - | - | |
| Where: USD | 66,503,492.26 | 6.9646 | 463,170,222.20 |
| EUR | 264,704.49 | 7.4229 | 1,964,874.95 |
| HKD | 147,748.55 | 0.8933 | 131,983.78 |
| AUD | 571,899.28 | 4.7138 | 2,695,818.83 |
| Accounts receivable | - | - | |
| Where: USD | 2,369,413.15 | 6.9646 | 16,502,014.85 |
| EUR | 40,727.75 | 7.4229 | 302,318.01 |
| GBP | 5,980.01 | 8.3941 | 50,196.80 |
| AUD | 56,946.86 | 4.7138 | 268,436.10 |
| NZD | 9,543.60 | 4.4162 | 42,146.45 |
| Other receivables | - | - | |
| Where: EUR | 113,321.16 | 7.4229 | 841,171.64 |
| AUD | 7,299.00 | 4.7138 | 34,406.03 |
| Accounts payable | |||
| Where: USD | 4,298.56 | 6.9646 | 29,937.75 |
| EUR | 865,208.81 | 7.4229 | 6,422,358.48 |
| Other payables | - | - | |
| Where: EUR | 27,549.53 | 7.4229 | 204,497.41 |
| HKD | 46,500.00 | 0.8933 | 41,538.45 |
| Non-current liabilities due within one year | |||
| Where: EUR | 251,155.87 | 7.42 | 1,864,304.91 |
| Long-term loans | - | - | |
| Where: EUR | 690,029.58 | 7.4229 | 5,122,020.57 |
(2) Description of overseas operating entities, including for important overseas operating entities, disclosure of
their main overseas operating location, recording currency, and selection basis. Reasons for changes in therecording currency should also be disclosed
√ Applicable □ Not applicable
| Name of Subsidiaries | Main business place | Functional currency |
| Oppein (Hong Kong) International Trade Company Limited | Hong Kong | HK$ |
| OPPEIN ITALY ACADEMY S. R.L. | Italy | EUR |
| FORMER S.R.L. | Italy | EUR |
The above-mentioned subsidiaries have chosen to use the main local circulating currency as their accounting basecurrency, and there have been no changes during the reporting period.When preparing consolidated financial statements, the financial statements of overseas operating entities of theenterprise are translated into the parent company's bookkeeping currency, and the conversion exchange rate used is listedas follows:
| Item | Assets and liability items on the balance sheet | Income and expense items in the income statement | Paid-in capital |
| Converted exchange rate | Spot exchange rate on the balance sheet date | Approximate exchange rate on transaction date | Historical spot exchange rate |
83. Hedging
□ Applicable √ Not applicable
84. Government subsidies
(1) Information of government subsidies
√ Applicable □ Not applicable
Unit: CNY
| Classification | Amount | Listed items | Amount included in current profits and losses |
| Assets-related | 61,519,100.00 | Deferred income, other income | 49,517,936.37 |
| Earning-related | 56,737,693.83 | Other income, non-operating income | 56,737,693.83 |
(2) Return of government subsidies
√ Applicable □ Not applicable
Unit: CNY
| Item | Amount | Reasons |
| Guangzhou City Development Housing Rental Market Special Fund Award and Supplement Project | 13,592,407.50 | Refund of pre allocated bonus funds, and subsequent application for allocation according to payment nodes |
85. Other
□ Applicable √ Not applicable
VIII. Change of Merger range
1. Business merger not under common control
√ Applicable □ Not applicable
(1) Business merger under the different control in the current period
√ Applicable □ Not applicable
Unit: EUR
| Name of the acquiree | Time point for equity | Cost for equity | Percentage of acquired | Means | Acquisition date | Determination basis for | Revenue of the | Net profit of the acquiree |
| acquisition | acquisition | equity (%) | for equity acquisition | acquisition date | acquiree from the acquisition date to the end of term | from the acquisition date to the end of term | ||
| FORMER S. R. L. | May 10, 2022 | 4,632,499.38 | 100.00 | Purchase | May 10, 2022 | ① The equity transfer agreement has been signed; ② The equity transfer payment has been paid; ③ The industrial and commercial change registration has been completed; | -381,597.54 |
(2) Merger costs and goodwill
□ Applicable □ Not applicable
Unit: EUR
| Merger costs | FORMER S.R.L. |
| --Cash | 4,632,499.38 |
| -- Fair value of non-cash assets | |
| -- Fair value of debt issued or assumed | |
| -- Fair value of equity securities issued | |
| -- Fair value of contingent consideration | |
| -- Fair value of equity(held prior to acquisition date) on acquisition date | |
| -- Other | |
| Merger cost in total | 4,632,499.38 |
| Less: fair value shares of obtained net identifiable assets | 4,632,499.38 |
| The amount of goodwill/merger cost less than the fair value share of identifiable net assets obtained |
(3) The identifiable assets and liabilities of the acquiree on acquisition date
√ Applicable □ Not applicable
Unit: EUR
| FORMER S.R.L. | ||
| Fair value on the acquisition date | Book value at the acquisition date | |
| Asset: | 6,796,625.00 | 6,796,625.00 |
| Cash and bank balances | 13,275.56 | 13,275.56 |
| Accounts receivable | 40,633.91 | 40,633.91 |
| Inventories | 50,000.00 | 50,000.00 |
| Fixed assets | 4,150,145.09 | 4,150,145.09 |
| Intangible assets | 1,935,821.39 | 1,935,821.39 |
| Other receivables | 97,150.00 | 97,150.00 |
| Other current assets | 1,058.00 | 1,058.00 |
| Deferred income tax assets | 508,541.05 | 508,541.05 |
| Liabilities: | 2,164,125.62 | 2,164,125.62 |
| Long-term loans | 1,044,516.38 | 1,044,516.38 |
| Payables | 919,072.58 | 919,072.58 |
| Deferred income tax liabilities | 0.00 | 0.00 |
| Taxes payable | 200,536.66 | 200,536.66 |
| Net assets | 4,632,499.38 | 4,632,499.38 |
| Minus: minority interest | 0.00 | 0.00 |
| Acquired net asset | 4,632,499.38 | 4,632,499.38 |
(4) Gains or losses arising from remeasuring equity held before the purchase date at fair valueIs there any transaction that achieves business merger through multiple transactions and obtains control during thereporting period
□ Applicable √ Not applicable
(5) Description on the inability to reasonably determine the merger consideration or the fair value of identifiableassets and liabilities of the acquiree on the acquisition date or at the end of the merger period
□ Applicable √ Not applicable
(6) Other descriptions:
□ Applicable √ Not applicable
2. Business merger under common control
□ Applicable √ Not applicable
3. Counter purchase
□ Applicable √ Not applicable
4. Disposal of subsidiaries
Is there a situation where a single disposal of investment in a subsidiary results in loss of control
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
5. Changes in the scope of consolidation due to other reasonsDescription of changes in the scope of consolidation caused by other reasons (for example, establishing new subsidiaries, liquidating subsidiaries, etc.) and their related situations:
√ Applicable □ Not applicable
Subsidiaries acquired through establishment or investment during the reporting period
| Name of company | Date of Establishment | Registration place | Businessnature | Registered capital (CNY '0,000) | Actual contribution at the end of the period (CNY '0,000) | Shareholding (%) | Voting rights ratio (%) | Consolidated financial statements |
| Dongguan Oppein Integration Home Sales Co., Ltd. | March 4, 2022 | Dongguan City | Sales | 200.00 | 110.00 | 70 | 70 | Consolidation |
| Dongguan Oppein Integration Home Design Co., Ltd. | March 4, 2022 | Dongguan City | Technical service | 100.00 | 30.00 | 70 | 70 | Consolidation |
| Jiangsu Oppein Overall Custom Home Co., Ltd. | July 14, 2022 | Wuxi City | Sales | 1,000.00 | 70.00 | 100 | 100 | Consolidation |
| Chengdu Shuangliu Oppein Loading and Unloading Service Co., Ltd. | January 11, 2022 | Chengdu City | Residential services | 100.00 | 5.00 | 100 | 100 | Consolidation |
| Hangzhou Oppein Large Home Furnishing Co., Ltd. | August 16, 2022 | Hangzhou City | Sales | 800.00 | 480.00 | 80 | 80 | Consolidation |
| Chengdu Oppein Creative Large Home Furnishing Co., Ltd. | May 25, 2022 | Chengdu City | Sales | 800.00 | 568.00 | 71 | 71 | Consolidation |
| Chongqing Oppein Large Home Furnishing Co., Ltd. | October 21, 2022 | Chongqing Municipality | Sales | 600.00 | 130.00 | 80 | 80 | Consolidation |
| Handan Oppein Large Home Furnishing Sales Co., Ltd. | June 17, 2022 | Handan City | Sales | 600.00 | 468.00 | 78 | 78 | Consolidation |
| Luzhou Oppein Large Home Furnishing Co., Ltd. | October 20, 2022 | Luzhou City | Sales | 700.00 | 195.00 | 65 | 65 | Consolidation |
| Nanning Oppein Large Home Furnishing Co., | July 20, 2022 | Nanning City | Sales | 600.00 | 432.00 | 72 | 72 | Consoli |
| Name of company | Date of Establishment | Registration place | Businessnature | Registered capital (CNY '0,000) | Actual contribution at the end of the period (CNY '0,000) | Shareholding (%) | Voting rights ratio (%) | Consolidated financial statements |
| Ltd. | dation | |||||||
| Guangzhou Huadu Oppein Creative Home Furnishing Co., Ltd. | July 14, 2022 | Guangzhou City | Sales | 600.00 | 370.00 | 70 | 70 | Consolidation |
| Shenzhen Oppein Creative Home Furnishing Co., Ltd. | July 15, 2022 | Shenzhen City | Sales | 600.00 | 330.00 | 55 | 55 | Consolidation |
Various newly established subsidiaries of the Company will be included in the scope of financial statement consolidation from the date of their establishment.
6. Other
□ Applicable √ Not applicable
IX. Interest in other entities
1. Equities in Subsidiaries
(1) Composition of the enterprise group
√ Applicable □ Not applicable
| Name of Subsidiaries | Main business place | Registration place | Businessnature | Shareholding (%) | Acquisitionmethod | |
| Direct | Indirect | |||||
| Tianjin Oppein Integration Home Co., Ltd. | Tianjin | Tianjin | Manufacturing | 100 | Establishment of capital contribution | |
| Guangzhou Oppein Integration Home Co., Ltd. | Guangzhou | Guangzhou City | Manufacturing | 70 | 30 | Establishment of capital contribution |
| Dongguan Oppein Integration Home Sales Co., Ltd. | Dongguan | Dongguan City | Sales | 70 | Establishment of capital contribution | |
| Dongguan Oppein Integration Home Design Co., Ltd. | Dongguan | Dongguan City | Technical service | 70 | Establishment of capital contribution | |
| Guangzhou Oppein Sanitary Ware Co., Ltd. | Guangzhou | Guangzhou City | Manufacturing | 100 | A business combination involving enterprises under common control | |
| Guangzhou Ouboni Integration Home Co., Ltd. | Guangzhou | Guangzhou City | Manufacturing | 100 | Establishment of capital contribution | |
| Oppein (Guangzhou) Soft Decoration Design Co., Ltd. | Guangzhou | Guangzhou City | Manufacturing | 100 | Establishment of capital contribution | |
| Oppein (Hong Kong) International Trade Company Limited | Hong Kong | Hong Kong | Trade | 100 | Establishment of capital contribution | |
| FORMERS.R.L. | Italy | Italy | Sales | 100 | A business combination involving enterprises not under common control | |
| Wuxi (Jiangsu) Oppein Integration Home Co., Ltd. | Wuxi | Wuxi City | Manufacturing | 100 | Establishment of capital contribution | |
| Jiangsu Oppein Overall Custom Home Co., Ltd. | Wuxi | Wuxi City | Sales | 100 | Establishment of capital contribution | |
| Qingyuan Oppein Integration Home Co., Ltd. | Qingyuan | Qingyuan City | Manufacturing | 100 | Establishment of capital contribution | |
| Guangzhou Oppolia Smart Home Co., Ltd. | Guangzhou | Guangzhou City | Sales | 100 | Establishment of capital contribution | |
| Guangzhou Owell Decoration Material Co., Ltd. | Guangzhou | Guangzhou City | Sales | 100 | Establishment of capital contribution | |
| Wuhan Oppein Mingda Home Products Co., Ltd. | Wuhan | Wuhan City | Manufacturing | 100 | Establishment of capital contribution | |
| Xi'an Oulian Home Products Co., Ltd. | Xi'an | Xi'an City | Manufacturing | 100 | Establishment of capital contribution | |
| Oppein United (Tianjin) Home Sales Co., Ltd. | Tianjin | Tianjin City | Sales | 100 | Establishment of capital contribution | |
| Guangzhou Oppein Creative Home Design Co., Ltd. | Guangzhou | Guangzhou City | Technical service | 100 | Establishment of capital contribution | |
| OPPEINITALYACADEMYS.R.L. | Italy | Italy | Technical services and trade | 100 | Establishment of capital contribution | |
| Chengdu Oppein Smart Home Co., Ltd. | Chengdu | Chengdu City | Manufacturing | 100 | Establishment of capital contribution | |
| Nanchang Oppein Home Products Co., Ltd. | Nanchang | Nanchang City | Manufacturing | 100 | Establishment of capital contribution |
| Kunming Oppolia Smart Home Products Co., Ltd. | Kunming | Kunming City | Manufacturing | 100 | Establishment of capital contribution | |
| Chengdu Shuangliu Oppein Loading and Unloading Service Co., Ltd. | Chengdu | Chengdu City | Residential services | 100 | Establishment of capital contribution | |
| Meizhou Oppein Investment Industry Co., Ltd. | Meizhou | Meizhou City | Commercial services | 100 | Establishment of capital contribution | |
| Meizhou Zheling Investment Industry Co., Ltd. | Meizhou | Meizhou City | Commercial services | 100 | Establishment of capital contribution | |
| Guangzhou Oppein Home Design Institute Co., Ltd. | Guangzhou | Guangzhou City | Residential services | 100 | Establishment of capital contribution | |
| Zhuhai Oppein Creative Home Design Co., Ltd. | Zhuhai | Zhuhai City | Residential services | 100 | Establishment of capital contribution | |
| Hangzhou Oppein Large Home Furnishing Co., Ltd. | Hangzhou | Hangzhou City | Sales | 80 | Establishment of capital contribution | |
| Chengdu Oppein Creative Large Home Furnishing Co., Ltd. | Chengdu | Chengdu City | Sales | 71 | Establishment of capital contribution | |
| Chongqing Oppein Large Home Furnishing Co., Ltd. | Chongqing | Chongqing Municipality | Sales | 80 | Establishment of capital contribution | |
| Handan Oppein Large Home Furnishing Sales Co., Ltd. | Handan | Handan City | Sales | 78 | Establishment of capital contribution | |
| Luzhou Oppein Large Home Furnishing Co., Ltd. | Luzhou | Luzhou City | Sales | 65 | Establishment of capital contribution | |
| Nanning Oppein Large Home Furnishing Co., Ltd. | Nanning | Nanning City | Sales | 72 | Establishment of capital contribution | |
| Guangzhou Huadu Oppein Creative Home Furnishing Co., Ltd. | Guangzhou | Guangzhou City | Sales | 70 | Establishment of capital contribution | |
| Shenzhen Oppein Creative Home Furnishing Co., Ltd. | Shenzhen | Shenzhen City | Sales | 55 | Establishment of capital contribution | |
| Xingpai Commercial Property Management (Guangzhou) Co., Ltd. | Guangzhou | Guangzhou City | Commercial services | 68 | Establishment of capital contribution | |
| Wuhan Oppein Smart Home Co., Ltd. | Wuhan | Wuhan City | Manufacturing | 100 | Establishment of capital contribution |
Other descriptions
1. The Company directly holds 70% of the equity of Guangzhou Integration, and indirectly holds 30% of the equityof Guangzhou Integration through Oppein (Hong Kong), resulting in a voting rights ratio of 100%.
2. The Company indirectly holds 70% equity in Dongguan Oppein Integration Home Sales Co., Ltd. and DongguanOppein Integration Home Design Co., Ltd. through its subsidiary Guangzhou Integration; indirectly holds 100% equityin FORMERS.R.L. through its subsidiary Oppein (Hong Kong); indirectly holds 100% equity of Jiangsu Oppein OverallCustom Home Co., Ltd. through its subsidiary Wuxi Oppein; indirectly holds 100% equity of Guangzhou Oppein SmartHome Co., Ltd. and Guangzhou Owell Decoration Material Co., Ltd. through its subsidiary Qingyuan Oppein, asubsidiary of Guangzhou Oppein Integration Home Co., Ltd.; indirectly holds 100% equity of Nanchang Oupai HomeProducts Co., Ltd. and Chengdu Shuangliu Oppein Loading and Unloading Service Co., Ltd. through its subsidiaryChengdu Oppein; indirectly holds 100% equity of Meizhou Zheling Investment Industry Co., Ltd. through its subsidiary
Meizhou Oppein; and indirectly holds 80% equity of Hangzhou Oppein Large Home Furnishing Co., Ltd., 71% equity ofChengdu Oppein Creative Large Home Furnishing Co., Ltd., 80% equity of Chongqing Oppein Large Home FurnishingCo., Ltd., 78% equity of Handan Oppein Large Home Furnishing Sales Co., Ltd., 65% equity of Luzhou Oppein LargeHome Furnishing Co., Ltd., 72% equity of Nanning Oppein Large Home Furnishing Co., Ltd., 70% equity of GuangzhouHuadu Oppein Creative Home Furnishing Co., Ltd., and 55% equity of Shenzhen Oppein Creative Home Furnishing Co.,Ltd. through its subsidiary Zhuhai Creative. Wuhan Oppein Mingda Home Products Co., Ltd. and Xi'an Oulian HomeProducts Co., Ltd. are subsidiaries of Guangzhou Owell Decoration Material Co., Ltd. Kunming Oppolia Smart HomeProducts Co., Ltd., originally a subsidiary of Guangzhou Owell Decoration Material Co., Ltd., transferred 100% of itsequity to Chengdu Oppein Smart Home Co., Ltd., a wholly-owned subsidiary of Oppein Home in 2022.
(2) Important partly-owned subsidiaries
□ Applicable √ Not applicable
(3) Main financial information of important non-wholly-owned subsidiaries
□ Applicable √ Not applicable
(4) Significant restrictions on the use of enterprise group assets and the repayment of enterprise group debts
□ Applicable √ Not applicable
(5) Financial or other support provided to structured entities included in the scope of consolidated financialstatements
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
2. Transactions where the share of owner's equity in a subsidiary changes and the subsidiary is stillcontrolled
□ Applicable √ Not applicable
3. Equity in joint ventures or associates
√ Applicable □ Not applicable
(1) Important joint ventures or associates
□ Applicable √ Not applicable
(2) Main financial information of important joint ventures
□ Applicable √ Not applicable
(3) Major financial information of the important associated enterprise
□ Applicable √ Not applicable
(4) Summary financial information of unimportant joint ventures and associated enterprises
√ Applicable □ Not applicable
Unit: CNY
| Closing balance/current amount incurred | Opening balance/amount incurred in the previous period | |
| Joint venture: | ||
| Total investment book value | 0.00 | 12,328,756.91 |
| The total number of the following items calculated based on shareholding ratio | ||
| -- Net profit | -8,828,756.91 | -2,258,529.79 |
| -- Other comprehensive income | ||
| --Total comprehensive incomes | -8,828,756.91 | -2,258,529.79 |
| Associated enterprise: | ||
| Total investment book value | 10,518,308.44 | 3,214,610.20 |
| The total number of the following items calculated based on shareholding ratio | ||
| -- Net profit | 7,303,698.24 | -4,203,115.87 |
| -- Other comprehensive income | ||
| --Total comprehensive incomes | 7,303,698.24 | -4,203,115.87 |
(5) Description of significant limitations on the ability of joint ventures or associated enterprises to transfer fundsto the company
□ Applicable √ Not applicable
(6) Excess losses incurred by joint ventures or associated enterprises
√ Applicable □ Not applicable
Unit: CNY
| Name of joint venture or associated enterprise | Accumulated unrecognized losses accumulated in the previous period | Unrecognized losses in the current period (or net profit shared in the current period) | Accumulated unrecognized losses at the end of this period |
| Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | 4,851,707.11 | 4,851,707.11 |
(7) Unrecognized commitments related to joint venture investments
□ Applicable √ Not applicable
(8) Contingent liabilities related to investments in joint ventures or associates
□ Applicable √ Not applicable
4. Important joint operations
□ Applicable √ Not applicable
5. Equity in structured entities not included in the scope of consolidated financial statementsDescription of structured entities not included in the scope of consolidated financial statements:
□ Applicable √ Not applicable
6. Others
□ Applicable √ Not applicable
X. Risks related to financial instruments
√ Applicable □ Not applicable
The Company faces various risks related to financial instruments during its operation, mainly including credit risk,market risk, and liquidity risk. The management team of the Company is fully responsible for determining riskmanagement objectives and policies, and assumes ultimate responsibility for risk management objectives and policies.The overall goal of risk management is to develop risk management policies that minimize risks as much as possiblewithout excessively affecting the Company's competitiveness and resilience.
1. Credit risk
The Company's bank deposits are mainly deposited in state-owned banks and other large and medium-sized listedbanks. It is expected that there will be no significant credit risk in the Company's bank deposits.
The Company has established a management system for accounts receivable and product sales, which clearlystipulates pricing principles, credit standards and distribution conditions, payment methods, and the responsibilities andauthorities of institutions and personnel involved in sales business. As of December 31, 2022, the book value of accountsreceivable was CNY 1,356,804,900, accounting for 4.74% of the total assets.
During the reporting period, the Company continuously strengthened its management of accounts receivable, mainlyconsisting of engineering accounts receivable from bulk business customers. The installation and after-sales service ofbulk business have been transferred to dealers, and after linking the payment collection with the dealer's business deposit,efforts have been increased to collect accounts receivable, to ensure that the overall credit risk of the Company is withina controllable range.
2. Market risk
(1) Interest rate risk
Fixed interest rate financial instruments:
Unit: CNY '0,000
| Item | Ending balance | Beginning balance | ||
| Effective interest rate | Amount | Effective interest rate | Amount | |
| Financial assets: | ||||
| Cash and bank balances | 1.70% | 79,500.00 | 0.66% | 2,500.00USD |
| Cash and bank balances | 3.80% | 115,000.00 | 0.75% | 1,300.00USD |
| Cash and bank balances | 3.85% | 265,000.00 | 3.65% | 60,000.00 |
| Cash and bank balances | 4.83% | 5,500.00USD | 3.70% | 190,000.00 |
| Cash and bank balances | 5.26% | 700.00USD | 4.00% | 45,000.00 |
| Cash and bank balances | 4.18% | 5,000.00 | ||
| Item | Ending balance | Beginning balance | ||
| Effective interest rate | Amount | Effective interest rate | Amount | |
| Non-current assets due within one year | 3.57% | 40,000.00 | ||
| Non-current assets due within one year | 3.62% | 10,000.00 | ||
| Non-current assets due within one year | 3.65% | 35,000.00 | ||
| Other non-current assets | 3.20% | 10,000.00 | 2.75% | 50,000.00 |
| Other non-current assets | 3.25% | 90,000.00 | 3.57% | 40,000.00 |
| Other non-current assets | 3.298% | 30,000.00 | 3.62% | 10,000.00 |
| Other non-current assets | 3.40% | 60,000.00 | ||
| Other non-current assets | 3.45% | 20,000.00 | ||
| Other non-current assets | 3.60% | 30,000.00 | 3.65% | 35,000.00 |
| Other non-current assets | 3.80% | 20,000.00 | 3.80% | 20,000.00 |
| Other non-current assets | 3.85% | 110,000.00 | 3.85% | 30,000.00 |
| Total | 957,680.52 | 509,227.66 | ||
| Financial liabilities: | ||||
| Short-term loans | 1.45% | 60,000.00 | 0.94% | 10,000.00 |
| Short-term loans | 1.50% | 40,000.00 | 1.11% | 9,500.00 |
| Short-term loans | 1.55% | 20,000.00 | 1.30% | 20,400.00 |
| Short-term loans | 1.60% | 32,000.00 | 1.34% | 22,000.00 |
| Short-term loans | 1.65% | 15,000.00 | 2.42% | 5,900.00 |
| Short-term loans | 1.70% | 15,000.00 | 2.60% | 9,600.00 |
| Short-term loans | 1.75% | 56,500.00 | 2.80% | 45,000.00 |
| Short-term loans | 1.80% | 52,000.00 | 2.82% | 15,000.00 |
| Short-term loans | 1.85% | 7,000.00 | 3.06% | 15,012.75 |
| Short-term loans | 2.25% | 20,000.00 | 3.35% | 79,557.14 |
| Short-term loans | 2.28% | 25,000.00 | 4.40% | 384.85 |
| Short-term loans | 2.30% | 32,000.00 | ||
| Short-term loans | 2.50% | 100.00 | 4.50% | 398.42 |
| Short-term loans | 2.85% | 65,445.57 | 4.80% | 4,910.35 |
| Short-term loans | 2.95% | 4,503.85 | 5.90% | 1,249.12 |
| Short-term loans | 3.10% | 10,008.61 | ||
| Short-term loans | 4.50% | 118.64 | ||
| Short-term loans | 4.60% | 1,271.98 | ||
| Short-term loans | 4.80% | 2,265.86 | ||
| Non-current liabilities due within one year | 3.30% | 20,018.33 | ||
| Non-current liabilities due within one year | 5.45% | 17.97EUR | ||
| Non-current liabilities due within one year | 6.12% | 7.14EUR | ||
| Long-term loans | 6.12% | 69.00EUR | ||
| Total | 478,931.41 | 238,912.63 | ||
Floating rate financial instruments:
Unit: CNY '0,000
| Item | Ending balance | Beginning balance | ||
| Effective interest rate | Amount | Effective interest rate | Amount | |
| Financial assets: | ||||
| Trading financial assets | 1.65%-2.90% | 30,007.15 | 1.52%-3.80% | 10,132.22 |
| Trading financial assets | 1.80%-3.55% | 50,297.95 | 1.50%-3.25% | 5.00 |
| Trading financial assets | Closed end private equity financing | 81,978.03 | ||
| Trading financial assets | Open net worth wealth management | 75,620.24 | ||
| Total | 80,305.10 | 167,735.49 | ||
| Financial liabilities: | ||||
| Debentures payable | 0.30%-2.00% | 160,170.18 | ||
| Total | 160,170.18 | |||
The finance department of the company continuously monitors the group's interest rate level. An increase in interestrates will increase the cost of new interest bearing debt and affect the level of financial returns on idle funds of theCompany. The management will make timely adjustments based on the latest market conditions.
(2) Exchange rate risks
The amount of foreign currency financial assets and foreign currency financial liabilities converted into CNY of theCompany is listed as follows:
Unit: CNY '0,000
| Item | Ending balance | ||||||
| USD | HK$ | EUR | AUD | GBP | NZD | Total | |
| Foreign currency financial assets | |||||||
| Cash and bank balances | 46,317.02 | 13.20 | 196.49 | 269.58 | 46,796.29 | ||
| Accounts receivable | 1,650.20 | 30.23 | 26.84 | 5.02 | 4.21 | 1,716.50 | |
| Other accounts receivable | 84.12 | 3.44 | 87.56 | ||||
| Total | 47,967.22 | 13.20 | 310.84 | 299.86 | 5.02 | 4.21 | 48,600.35 |
| Foreign currency financial liabilities | |||||||
| Accounts payable | 2.99 | 642.24 | 645.23 | ||||
| Other payables | 4.15 | 20.45 | 24.60 | ||||
| Non-current liabilities due within one year | 186.43 | 186.43 | |||||
| Long-term loans | 512.20 | 512.20 | |||||
| Total | 2.99 | 4.15 | 1,361.32 | 1,368.46 | |||
(Continued)
| Item | Beginning balance | ||||||
| USD | HK$ | EUR | AUD | GBP | NZD | Total | |
| Foreign currency financial assets | |||||||
| Cash and bank balances | 44,726.99 | 8.42 | 234.97 | 354.35 | 45,324.73 | ||
| Accounts receivable | 54.15 | 4.16 | 58.31 | ||||
| Other accounts | 25.47 | 3.37 | 28.84 | ||||
| receivable | |||||||
| Total | 44,726.99 | 8.42 | 314.59 | 357.72 | 45,411.88 | ||
| Foreign currency financial liabilities | |||||||
| Accounts payable | 2.74 | 683.22 | 685.96 | ||||
| Notes payable | 803.62 | 803.62 | |||||
| Other payables | 24.48 | 24.48 | |||||
| Total | 2.74 | 1,511.32 | 1,514.06 |
The Company's board and functional hardware are mainly imported from abroad, and payment is generally madethrough letter of credit. The Company's products are exported in small quantities to foreign countries, and import andexport transactions are settled in foreign currencies. The impact of exchange rate fluctuations on the Company's operatingresults is limited. As of December 31, 2022, the main foreign currency assets will increase or decrease by CNY23,982,114.96 if the CNY depreciates or appreciates by 5% against the USD while all other variables remain unchanged;and the Company's assets will increase or decrease by CNY 525,240.84 if the CNY appreciates or depreciates by 5%against the EUR.
(3) Other price risks
The main raw materials required for the Company's production are sheet metal, functional hardware, and supportingelectrical appliances. When the price of raw materials increases, the Company can increase the selling price of the product,and when it decreases, the Company will lower the selling price of the product. Therefore, with the determination ofproduction capacity and sales volume, there is a risk that the Company's operating income may fluctuate due tofluctuations in the prices of major raw materials.
3. Liquidity risk
The various financial liabilities of the Company are presented as undiscounted contract cash flows at maturity asfollows:
Unit: CNY '0,000
| Item | Ending balance | Beginning balance | ||
| within 1 year | More than 1 year | within 1 year | More than 1 year | |
| Short-term loans | 458,469.50 | 238,912.62 | ||
| Notes payable | 7,036.61 | 13,995.18 | ||
| Accounts payable | 172,769.80 | 18,165.59 | 198,305.08 | 3,519.81 |
| Other payables | 39,190.94 | 44,862.22 | 52,559.74 | 14,224.37 |
| Non-current liabilities due within one year | 20,204.76 | |||
| Long-term loans | 512.20 | |||
| Total | 697,671.61 | 63,540.01 | 503,772.62 | 17,744.18 |
As of December 31, 2022, the balance of various liabilities to be repaid within the next year was CNY 6,976,716,100;as of December 31, 2022, the monetary funds that can be withdrawn at any time was CNY 3,631,141,100, and the fixeddeposit was CNY 8,876,805,200, indicating a relatively low liquidity risk.XI. Disclosure of fair value
1. Ending fair value of assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: CNY
| Item | Fair value at the end of the period | |||
| First level fair value measurement | Second level fair value measurement | Third level fair value measurement | Total | |
| I. Continuous fair value measurement | ||||
| (I) Trading financial assets | 803,050,958.90 | 803,050,958.90 | ||
| Item | Fair value at the end of the period | |||
| First level fair value measurement | Second level fair value measurement | Third level fair value measurement | Total | |
| 1. Financial assets measured at fair value with changes included in current profits and losses | ||||
| (1) Debt instrument investment | ||||
| (2) Equity instrument investment | ||||
| (3) Derivative financial assets | ||||
| (4) Bank financial products | 803,050,958.90 | 803,050,958.90 | ||
| 2. Financial assets designated at fair value through profits or losses | ||||
| (1) Debt instrument investment | ||||
| Item | Fair value at the end of the period | |||
| First level fair value measurement | Second level fair value measurement | Third level fair value measurement | Total | |
| (2) Equity instrument investment | ||||
| (II) Other debt investments | ||||
| (III) Other equity instrument investments | 248,779,462.00 | 113,846,741.27 | 6,608,684.78 | 369,234,888.05 |
| (IV) Investment properties | ||||
| 1. Land use rights for lease | ||||
| 2. Leased buildings | ||||
| 3. Land use rights held and prepared for transfer after appreciation | ||||
| (V) Biological assets | ||||
| 1. Consumable biological assets | ||||
| 2. Productive biological assets | ||||
| (VI) Other non-current financial assets | 17,968,837.07 | 1,000,000.00 | 18,968,837.07 | |
| Total assets continuously measured at fair value | 248,779,462.00 | 934,866,537.24 | 7,608,684.78 | 1,191,254,684.02 |
| (VI) Trading financial liabilities | ||||
| 1. Financial liabilities measured at fair value with changes included in current profits and losses | ||||
| Where: Trading bonds issued | ||||
| Derivative financial liabilities | ||||
| Other | ||||
| 2. Financial liabilities designated at fair value through profits or losses | ||||
| Total liabilities continuously measured at fair value | ||||
| II. Continuous fair value measurement | ||||
| (I) Held-for-sale assets | ||||
| Total assets measured at fair value non-continuously | ||||
| Total liabilities measured at fair value non-continuously | ||||
2. Basis for determining the market value of continuous and non-continuous first level fair value measurementitems
√ Applicable □ Not applicable
The Company holds 1,975,600 shares of Keeson Technology Corporation Limited, with the fair value at the end ofthe period determined to be CNY 23,806,462.00 based on the closing price of CNY 12.05 in the securities market onDecember 30, 2022 (December 31, 2022 is a non-trading day); the Company holds 1.5 million shares of Harbin SayyasWindows Co., Ltd., with the fair value at the end of the period determined to be CNY 46,125,000.00 based on the closingprice of CNY 30.75 in the securities market on December 30, 2022; and the Company holds 5.4 million shares of DeRucciHealthy Sleep Co., Ltd., with the fair value at the end of the period determined to be CNY 178,848,000.00 based on theclosing price of CNY 33.12 in the securities market on December 30, 2022.
3. Qualitative and quantitative information on valuation techniques and important parameters used for
continuous and non-continuous second level fair value measurement items
√ Applicable □ Not applicable
1. Qualitative and quantitative information on valuation techniques and important parameters used
| Item | Fair value at the end of the period | Valuation techniques | Important parameters | |
| Qualitative information | Quantitative information | |||
| Trading financial assets | 803,050,958.90 | Income approach | Contract or comparable expected return | Rate |
| Investment in other equity instruments | 113,846,741.27 | Market approach | Recent financing prices | P/E ratio |
| Other non-current financial assets | 17,968,837.07 | Market approach | Market value of listed companies/recent financing prices | Closing price of securities market /P/E ratio/net assets |
2. The Company holds CNY 803,050,958.90 of floating income financial products at the end of period, with a yield linkedto fluctuations in foreign currency exchange rates. At the end of the period, according to the contract agreement, theapplicable rate of return is determined based on the volatility of the linked target, and the fair value at the end of theperiod is calculated.
3. The Company holds 1.90% of the shares of Guangdong Deerma Technology Co., Ltd. At the end of the period, thevalue of the target company's equity held by the Company is calculated based on the P/E ratio of the most recent equitytransfer of the investee and the net profit of the invested unit in 2022.
4. The Company holds 10% of the shares of the Beijing Easyhome Joint Investment Management Center (L.P.) fund. Thecompanies invested by the partnership include both listed and unlisted companies, and the value of the shares invested bylisted companies is recognized based on the closing price of the securities market on December 31, 2022; and the valueof shares invested by unlisted companies is calculated based on the price to earnings ratio of the most recent equitytransfer, as well as the net profit and net assets for the year 2022. The Company calculates the equity value of thepartnership enterprise held by the Company based on the ratio of the overall share value of the fund company's externalinvestment to the Company's investment in the partnership enterprise.
4. Qualitative and quantitative information on valuation techniques and important parameters used for
continuous and non-continuous third level fair value measurement items
√ Applicable □ Not applicable
| Item | Fair value at the end of the period | Valuation techniques | Unobservable input value |
| Investment in other equity instruments | 6,608,684.78 | Income approach | Net assets |
| Other non-current financial assets | 1,000,000.00 | Income approach | Net assets |
5. Continuous third level fair value measurement items, adjustment information between opening and closing
book values, and sensitivity analysis of unobservable parameters
□ Applicable √ Not applicable
6. Continuous fair value measurement items that undergo conversion between different levels during the
current period, the reasons for conversion, and the policy for determining the conversion time point
□ Applicable √ Not applicable
7. Changes in valuation techniques and reasons for such changes during the current period
□ Applicable √ Not applicable
8. Fair value of financial assets and financial liabilities not measured at fair value
□ Applicable √ Not applicable
9. Other
□ Applicable √ Not applicable
XII. Related parties and related transactions
1. Information of the parent company of this enterprise
□ Applicable √ Not applicable
2. Information of subsidiaries of this enterprise
Refer to the notes for the details of the subsidiaries of this enterprise
√ Applicable □ Not applicable
The situation of the Company's subsidiaries is detailed in "Section III Management Discussion and Analysis V. Mainoperating conditions during the reporting period (V) Investment Analysis".
3. Information of joint ventures and associated enterprises of the CompanyImportant joint ventures or associates of the Company are detailed in the notes
□ Applicable √ Not applicable
Related party transactions with the Company occurred in the current period, the information of other joint ventures orassociated enterprises that have formed balances through related party transactions with the Company in the early stageis as follows
√ Applicable □ Not applicable
| Name of joint venture or associated enterprise | Relationship with the Company |
| Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | The Company holds 50% of its shares |
| Beijing Jiaju Technology Co., Ltd. | The Company holds 41% of its shares |
Others
□ Applicable √ Not applicable
4. Conditions of other related parties
√ Applicable □ Not applicable
| Names of other related parties | Relationship between other related parties and the Company |
| Meizhou Yuanling Investment Industry Co., Ltd. | Companies controlled by Yao Liangbai, a shareholder holding more than 5% of the shares |
| Wind Information Co., Ltd. | Company where independent director Qin Shuo serves as a director |
5. Related party transactions
(1) Related party transactions for purchasing and selling goods, providing and receiving labor servicesTable of Purchasing Goods/Accepting Labor Services
√ Applicable □ Not applicable
Unit: CNY
| Related parties | Content of related party transaction | The amount incurred in current period | Approved transaction limit (if applicable) | Does it exceed the transaction limit (if applicable) | Amount incurred in last period |
| Beijing Jiaju Technology Co., Ltd. | Software service fee and information service fee | 50,343,882.60 | No | 24,801,432.51 | |
| Wind Information Co., Ltd. | Software service fee | No | 64,150.95 |
| Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | Property fees, publicity fees, and electricity fees | 1,856,783.69 | No | ||
| Total | 52,200,666.29 | 24,865,583.46 |
Selling goods/rendering labor service
√ Applicable □ Not applicable
Unit: CNY
| Related parties | Content of related party transaction | The amount incurred in current period | Amount incurred in last period |
| Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | Property management fees, electricity fees, water fees, and service fees | 10,108,204.08 | 60,534.59 |
| Total | 10,108,204.08 | 60,534.59 |
Description of related party transactions for purchasing and selling goods, providing and receiving labor services
□ Applicable √ Not applicable
(2) Related entrusted management/contracting and entrusted management/outsourcing situationTable of entrusted management/contracting situation of the Company:
□ Applicable √ Not applicable
Description of related custody/contracting situation
□ Applicable √ Not applicable
The Company's Entrusted Management/Outsourcing Situation
□ Applicable √ Not applicable
Description of related management/outsourcing situation
□ Applicable √ Not applicable
(3) Related leasing situation
As the lessor, the Company:
√ Applicable □ Not applicable
Unit: CNY
| Name of leasee | Types of leased assets | Confirmed rental income in the current period | Rental income recognized in the previous period |
| Meizhou Yuanling Investment Industry Co., Ltd. | Transport means | 49,646.04 | 49,646.01 |
| Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | Houses and parking spaces | 9,868,363.29 | 0.00 |
| Total | 9,918,009.33 | 49,646.01 |
As the leasee, the Company:
√ Applicable □ Not applicable
Unit: CNY
| Name of lessor | Types of leased assets | Simplified rental fees for short-term leases and low value asset leases (if applicable) | Variable lease payments not included in the measurement of lease liabilities | Rent paid | Interest expense on lease liabilities assumed | Increased use rights assets |
| (if applicable) | |||||||||||
| The amount incurred in current period | Amount incurred in last period | The amount incurred in current period | Amount incurred in last period | The amount incurred in current period | Amount incurred in last period | The amount incurred in current period | Amount incurred in last period | The amount incurred in current period | Amount incurred in last period | ||
| Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | Booth rental | 2,083,605.88 | 2,083,605.88 | ||||||||
Information of related leasing situation
□ Applicable √ Not applicable
(4) Information of related party guarantee
As the guarantor, the Company
□ Applicable √ Not applicable
As the guarantor, the Company
□ Applicable √ Not applicable
Description of related party guarantees
□ Applicable √ Not applicable
(5) Related party fund borrowing and lending
□ Applicable √ Not applicable
(6) Asset transfer and debt restructuring of related parties
□ Applicable √ Not applicable
(7) Compensation for key management personnel
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Compensation for key management personnel | 22,781662.23 | 22,403,023.49 |
(8) Other related party transactions
□ Applicable √ Not applicable
6. Accounts receivable and payable to related parties
(1) Accounts receivable
√ Applicable □ Not applicable
Unit: CNY
| Item Name | Related parties | Ending balance | Beginning balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provisio | ||
| n | |||||
| Accounts receivable | Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | 19,322,987.20 | 4,167,968.34 | 0.00 | / |
| Prepayments | Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | 139,928.10 | / | 0.00 | / |
| Prepayments | Beijing Jiaju Technology Co., Ltd. | 349,433.96 | / | 0.00 | / |
| Other receivables | Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | 5,667,862.40 | 1,133,572.48 | 0.00 | / |
| Other receivables | Meizhou Yuanling Investment Industry Co., Ltd. | 56,100.00 | 11,220.00 | 0.00 | / |
(2) Accounts payable
√ Applicable □ Not applicable
Unit: CNY
| Item Name | Related parties | Closing book balance | Opening book balance |
| Receipts in advance | Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | 0.00 | 692,893.04 |
7. Related party commitments
□ Applicable √ Not applicable
8. Other
□ Applicable √ Not applicable
XIII. Share-based payments
1. Overall information of share-based payment
√ Applicable □ Not applicable
Unit: share Currency: CNY
| The total amount of various equity instruments granted by the Company in this period | 1,210,697.00 |
| The total amount of various equity instruments exercised by the Company in the current period | 6.00 |
| The total amount of various equity instruments that have expired in the current period of the Company | 4,853,794.00 |
| The range of exercise prices for stock options issued by the Company at the end of the period and the remaining term of the contract | The 16th meeting of the third board of directors of the Company reviewed and approved the Proposal on Adjusting the List of Incentive Targets and Number of Options Granted for the First Time in the 2021 Stock Option Incentive Plan, the Proposal on Adjusting the Exercise Price of the 2021 Stock Option Incentive Plan and the Proposal on Granting Stock Options to Incentive Targets for the First Time, agreed to grant 5,367,837 stock options to 510 incentive recipients on July 2, 2021, with an exercise price of CNY 146.97 per share. The exercise period is divided into two stages. Provided that the exercise conditions set by the company are met, from the first trading day 12 months after the completion date of the initial authorization of the stock option to the last trading day within 24 months after the completion date of the initial authorization of the stock option, the incentive targets may |
| exercise 50% of the total number of incentive stock options granted; from the first trading day 24 months after the grant date to the last trading day within 36 months from the grant date, the remaining 50% of the exercisable rights shall remain. During the period from the first grant date to the completion of stock option grant registration, 10 incentive recipients lost their eligibility to participate in this incentive plan due to reasons such as resignation, involving a total of 76,886 stock options. Therefore, the actual number of incentive recipients granted for the first time in this incentive plan is 500, and the actual number of stock options granted for the first time is 5,290,951. Where: a total of 2,645,604 stock options were granted to the incentive targets during the first stage of exercise, Due to resignation and unsatisfactory performance evaluation, 1,603,028 shares were cancelled. In the first stage, the non market unlocking conditions met the standards, and a total of 1,042,576 million shares were planned to be exercised. The exercise period was from September 21, 2022 to July 1, 2023, and 6 shares had been exercised as of December 31, 2022; In the second stage, a total of 2,645,347 stock options were issued. Due to resignation, 238,954 stock options in the second stage have been cancelled in 2022. As of December 31, 2022, all 2,406,393 pharmaceutical products have become invalid due to non market unlocking conditions not meeting the standards. The 23rd meeting of the third board of directors of the Company reviewed and approved the Proposal on Granting Reserved Stock Options for the 2021 Stock Option Incentive Plan to Incentive Targets, and agreed to grant CNY 1,232,055 pre reserved stock options to 174 incentive objects on June 23, 2022 as the grant date. During the period from the reserved grant date to the completion of stock option grant registration, three incentive objects lost their eligibility to participate in this incentive plan due to resignation or other reasons, involving a total of 21,358 stock options. Therefore, the actual number of incentive recipients granted this time is 171, and the actual number of stock options granted is 1,210,697, with an exercise price of CNY 145.22 per share. The exercise period is divided into two stages, provided that the exercise conditions set by the company are met. From the first trading day 12 months after the completion date of the initial authorization of the stock option to the last trading day within 24 months after the completion date of the initial authorization of the stock option, the incentive targets may exercise 50% of the total number of incentive stock options granted; from the first trading day 24 months after the grant date to the last trading day within 36 months from the grant date, the remaining 50% of the exercisable rights shall remain. Where: in the first stage, a total of 605,419 copies were released, but due to non market unlocking conditions not meeting the standards, they have all become invalid as of December 31, 2022. | |
| The range of exercise prices for other equity instruments issued by the Company at the end of the period and the remaining term of the contract |
2. Equity settled share-based payments
√ Applicable □ Not applicable
Unit: CNY
| Method for determining the fair value of equity instruments on the grant date | The fair value of stock options is estimated using the Black-Scholes stock option model |
| Basis for determining the number of exercisable equity instruments | On each balance sheet date, the number of equity instruments that can be unlocked is confirmed based on subsequent information such as the latest changes in the number of incentive targets who have obtained feasible rights, assessment status, etc. After the implementation of the equity incentive plan, the expected number of unlocked equity instruments is consistent with the actual number of unlocked instruments. |
| Reasons for significant differences between the current estimate and the previous estimate | None |
| Accumulated amount of equity settled share-based payments recognized in capital reserve | 10,514,852.83 |
| The total amount of expenses recognized for equity settled share-based payments in this period | -1,220,603.57 |
3. Cash settled share-based payments
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
□ Applicable √ Not applicable
5. Other
□ Applicable √ Not applicable
XIV. Commitment and contingency
1. Important commitments
□ Applicable √ Not applicable
2. Contingencies
(1) Significant contingencies on the balance sheet date
□ Applicable √ Not applicable
(2) The company should also provide a description if there are no important contingencies that need to be disclosed:
√ Applicable □ Not applicable
1. Other contingent liabilities and their financial impact
The Company and Shanghai Pudong Development Bank Co., Ltd. carry out the "Pudong Development Bank QuickLoan" business, where the Company recommends merchants to the bank and assumes a prudent recommendationobligation to the bank regarding the recommended merchant's repayment ability. If the loan of the merchant is overduefor 60 days (inclusive), it is deemed that the Company has not fulfilled the obligation of prudent recommendation, whichconstitutes a breach of contract. The bank has the right to directly deduct the prudent recommendation performance bonddeposited by the Company to pay liquidated damages. The cumulative total amount of liability for breach of contractshall not exceed 2% of the cumulative total amount of loans of the merchant actually recommended by the bank to theCompany. As of the end of the reporting period, the cumulative loan amount recommended by the Company to the bankfor merchants was CNY 21.17 million. There has been no default on matured loans, and the outstanding loan balance wasCNY 2,918,000. The Company has made a prudent recommendation liability loss based on the bank's provision for 1.5%loan impairment on normal loans. The provision amount is detailed in "Section X Financial Report VII, Notes to majoritems in the consolidated financial statements 50- Estimated Liabilities".
2. As of December 31, 2022, there are no other contingencies that need to be disclosed by the Company.
3. Other
□ Applicable √ Not applicable
XV. Events After the Balance Sheet Date
1. Important non adjustment matters
□ Applicable √ Not applicable
2. Profit distribution situation
√ Applicable □ Not applicable
Unit: '00 million Currency: CNY
| Proposed profits or dividends to be distributed | 10.75 |
| Profit or dividend declared for distribution after review and approval | / |
According to the profit distribution plan for 2022 passed at the board meeting of the company on April 25, 2023, theCompany intends to distribute a total cash dividend of CNY 1.075 billion (tax inclusive) to all shareholders based on thetotal share capital on the registration date of equity distribution less the number of shares in the Company's sharerepurchase account, accounting for 40% of the net profit attributable to shareholders of the parent company in 2022. Ifthe total share capital of the Company changes before the equity registration date for the implementation of equitydistribution, the Company intends to maintain the total profit distribution unchanged and adjust the profit distributionratio per share accordingly. This plan still needs to be reviewed and approved by the general meeting of shareholders.
3. Sales return
□ Applicable √ Not applicable
4. Description of other events after the balance sheet date
□ Applicable √ Not applicable
XVI. Other important items
1. Correction of accounting errors in previous period
(1) Retrospective restatement
□ Applicable √ Not applicable
(2) Prospective application
□ Applicable √ Not applicable
2. Debt restructurings
□ Applicable √ Not applicable
3. Asset replacement
(1) Exchange of non-monetary assets
□ Applicable √ Not applicable
(2) Replacement of other assets
□ Applicable √ Not applicable
4. Pension plan
□ Applicable √ Not applicable
5. Discontinued operations
□ Applicable √ Not applicable
6. Segment information
(1) Basis for determining reporting segments and accounting policies
□ Applicable √ Not applicable
(2) Financial information of the reporting segment
□ Applicable √ Not applicable
(3) If the Company has no reporting segments or cannot disclose the total assets and liabilities of eachreporting segment, the reason should be explained
√ Applicable □ Not applicable
The reasons why the Company did not prepare and present segment information reports are as follows:
1. The Company's main business is the production and sales of products such as cabinets, wardrobes, wooden doors,bathrooms, etc. According to the Industrial Classification for National Economic Activities issued by the National Bureau
of Statistics in 2017, the industry the Company is engaged in is the wooden furniture manufacturing industry (C211) inthe furniture manufacturing industry (C21), and the company does not have multiple business situations;
2. The products produced by the company are all different products of customized furniture, with similar economiccharacteristics. The management considers this type of business to be managed as a whole, and some business expensesare incurred benefiting from various categories of products, making it impossible to evaluate the specific operating resultsof individual products.
(4). Other descriptions:
□ Applicable √ Not applicable
7. Other important transactions and matters that have an impact on investor decision-making
□ Applicable √ Not applicable
8. Other
□ Applicable √ Not applicable
XVII. Notes to Main Items of the Parent Company's Financial Statements
1. Accounts receivable
(1) Disclosure by aging
√ Applicable □ Not applicable
Unit: CNY
| Aging | Closing book balance |
| within 1 year | |
| Where: sub items within 1 year | |
| within 1 year | 978,445,389.08 |
| Subtotal within 1 year | 978,445,389.08 |
| 1-2 years | 336,454,977.23 |
| 2-3 years | 79,523,378.72 |
| More than 3 years | |
| 3-4 years | 28,453,949.63 |
| 4-5 years | 8,253,722.47 |
| Over 5 years | 8,553,285.59 |
| Total | 1,439,684,702.72 |
(2) Classified disclosure by bad debt provision method
√ Applicable □ Not applicable
Unit: CNY
| Category | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Proportion (%) | Amount | Percentage of provision (%) | Amount | Proportion (%) | Amount | Percentage of provision (%) | |||
| Single item provision for bad debts | 94,518.266.26 | 6.57 | 68,124,1 92.24 | 72.08 | 26,394,074.02 | 43,592,586.33 | 4.04 | 30,514,810.43 | 70.00 | 13,077,775.90 |
| Of which: | ||||||||||
| Bad debt reserve withdrawn by portfolio | 1,345,166,436.46 | 93.43 | 157,600,659.21 | 11.72 | 1,187,565,777.25 | 1,036,445,894.40 | 95.96 | 97,321,116.33 | 9.39 | 939,124,778.07 |
| Of which: | ||||||||||
| Total | 1,439,684,702.72 | 100.00 | 225,724,851.45 | 15.68 | 1,213,959,851.27 | 1,080,038,480.73 | 100 | 127,835,926.76 | 11.84 | 952,202,553.97 |
Withdrawing bad debt reserves by individual item:
√ Applicable □ Not applicable
Unit: CNY
| Name | Ending balance | |||
| Book balance | Bad debt provision | Percentage of provision (%) | Reason for provision | |
| Engineering clients | 94,518,266.26 | 68,124,192.24 | 72.08 | Some engineering clients are unable to repay their due debts or have a downgrade in their credit rating |
| Total | 94,518,266.26 | 68,124,192.24 | 72.08 | / |
Description of withdrawing bad debt reserves by individual item
□ Applicable √ Not applicable
Provision for bad debts by combination:
√ Applicable □ Not applicable
Portfolio provision item: expected credit loss
Unit: CNY
| Name | Ending balance | ||
| Accounts receivable | Bad debt provision | Percentage of provision (%) | |
| Engineering clients | 1,222,050,018.19 | 139,524,468.74 | 11.42 |
| Franchised dealers | 64,275,805.01 | 8,289,718.47 | 12.90 |
| Other clients | 58,840,613.26 | 9,786,472.00 | 16.63 |
| Total | 1,345,166,436.46 | 157,600,659.21 | 11.72 |
Recognition criteria and instructions for withdrawing bad debts by combination:
□ Applicable √ Not applicable
If the provision for bad debts is made based on the expected credit loss general model, refer to the disclosure of otheraccounts receivable:
□ Applicable √ Not applicable
(3) Situation of bad debt reserves
√ Applicable □ Not applicable
Unit: CNY
| Category | Beginning balance | Current period change amount | Ending balance | |||
| Provision | Return or reversal | Write-off or cancellation | Other changes | |||
| Accounts receivable with single provision for bad debts | 30,514,810.43 | 37,609,381.81 | 68,124,192.24 | |||
| Bad debt reserve withdrawn by portfolio | 97,321,116.33 | 61,804,592.76 | 1,525,049.88 | 157,600,659.21 | ||
| Total | 127,835,926.76 | 99,413,974.57 | 1,525,049.88 | 225,724,851.45 | ||
The amount of bad debt reserves recovered or reversed in the current period is significant:
□ Applicable √ Not applicable
(4) Actual verification of accounts receivable in the current period
□ Applicable √ Not applicable
Important accounts receivable verification status
□ Applicable √ Not applicable
(5) Accounts receivable from top five borrowers classified based on the ending balance
√ Applicable □ Not applicable
Unit: CNY
| Company name | Ending balance | Proportion in the total ending balance of accounts receivable (%) | Bad debt provision of ending balance |
| Shanghai Aifeidi Building Materials Trading Co., Ltd | 33,956,605.00 | 2.32 | 4,910,032.29 |
| Shenzhen Evergrande Materials and Equipment Co., Ltd. | 33,878,453.40 | 2.31 | 23,714,917.38 |
| Shenzhen Lingchao Supply Chain Management Co., Ltd. | 32,873,802.16 | 2.24 | 2,034,888.35 |
| Guangzhou Yuantong E-commerce Technology Co., Ltd. | 24,445,569.47 | 1.67 | 1,513,180.75 |
| Shenzhen Branch of China Construction Science & Technology Group Co., Ltd. | 22,208,196.28 | 1.52 | 1,374,687.35 |
| Total | 147,362,626.31 | 10.06 | 33,547,706.12 |
(6) Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7) The amount of assets and liabilities formed by transferring accounts receivable and continuing to be involved
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
2. List of other receivables
List of items
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance |
| Interest receivable | 0.00 | 0.00 |
| Dividend receivable | 0.00 | 0.00 |
| Other receivables | 6,733,661,374.43 | 5,433,781,485.95 |
| Total | 6,733,661,374.43 | 5,433,781,485.95 |
Other descriptions
□ Applicable √ Not applicable
Interest receivable
(1) Classification of interest receivable
□ Applicable √ Not applicable
(2) Significant overdue interest
□ Applicable √ Not applicable
(3) Provision for bad debts
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Dividend receivable
(4) Dividend receivable
□ Applicable √ Not applicable
(5) Important dividends receivable with an aging of over 1 year
□ Applicable √ Not applicable
(6) Provision for bad debts
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Other receivables
(1) Disclosure by aging
√ Applicable □ Not applicable
Unit: CNY
| Aging | Closing book balance |
| within 1 year | |
| Where: sub items within 1 year | |
| within 1 year | 4,544,819,743.26 |
| Subtotal within 1 year | 4,544,819,743.26 |
| 1-2 years | 1,432,560,353.41 |
| 2-3 years | 661,358,189.62 |
| More than 3 years | |
| 3-4 years | 97,776,776.45 |
| 4-5 years | 868,619.25 |
| Over 5 years | 2,927,230.68 |
| Total | 6,740,310,912.67 |
(2) Classification by nature of funds
√ Applicable □ Not applicable
Unit: CNY
| Nature of payment | Closing book balance | Opening book balance |
| Transactions with affiliated subsidiaries | 6,558,275,532.55 | 5,354,618,237.38 |
| Deposit | 164,849,609.41 | 67,301,239.61 |
| Business reserve fund | 2,571,679.97 | 1,896,820.79 |
| Security Deposits | 8,392,507.56 | 8,616,326.79 |
| Other | 6,221,583.18 | 7,839,203.08 |
| Total | 6,740,310,912.67 | 5,440,271,827.65 |
(3) Provision for bad debts
√ Applicable □ Not applicable
Unit: CNY
| Bad debt provision | Phase I | Phase Ⅱ | Phase Ⅲ | Total |
| Expected credit loss (ECL) in the next 12 months | ECL over the entire duration (no credit impairment occurs) | Expected credit loss within whole duration (credit impairment has occurred) | ||
| Balance as of January 1, 2022 | 6,090,933.37 | 399,408.33 | 6,490,341.70 | |
| Balance as of January 1, 2022 in the current period | ||||
| - Transfer to Phase Ⅱ | ||||
| - Transfer to Phase Ⅲ | ||||
| - Return to Phase Ⅱ | ||||
| - Return to the Phase I | ||||
| Provision in current period | 68,196.54 | 96,000.00 | 164,196.54 | |
| Reversals in the current period | 5,000.00 | 5,000.00 | ||
| Write-off in current period | ||||
| Canceled after verification in the current period | ||||
| Other changes | ||||
| Balance as of December 31, 2022 | 6,159,129.91 | 490,408.33 | 6,649,538.24 |
Description of significant changes in the book balance of other accounts receivable with changes in loss provisions in thecurrent period:
□ Applicable √ Not applicable
The basis for calculating the amount of bad debt reserves for the current period and evaluating whether the credit risk offinancial instruments has significantly increased:
□ Applicable √ Not applicable
(4) Information of bad debt reserves
√ Applicable □ Not applicable
Unit: CNY
| Category | Beginning balance | Current period change amount | Ending balance | |||
| Provision | Return or reversal | Write-off or cancellatio | Other changes | |||
| n | ||||||
| Single item provision for bad debts | 399,408.33 | 96,000.00 | 5,000.00 | 490,408.33 | ||
| Bad debt reserve withdrawn by portfolio | 6,090,933.37 | 68,196.54 | 6,159,129.91 | |||
| Total | 6,490,341.70 | 164,196.54 | 5,000.00 | 6,649,538.24 |
The significant amount of bad debt reserves reversed or recovered in the current period: □ Applicable √ Not applicable
(5) Other accounts receivable actually written off in the current period
□ Applicable √ Not applicable
(6) Other accounts receivable with the top five ending balances collected by the debtor
√ Applicable □ Not applicable
Unit: CNY
| Company name | Nature of payment | Ending balance | Aging | Proportion to the total ending balance of other accounts receivable (%) | Bad debt provision of ending balance |
| Qingyuan Oppein Integration Home Co., Ltd. | Transactions with affiliated subsidiaries | 2,837,802,925.65 | Within 2 years | 42.10 | |
| Chengdu Oppein Smart Home Co., Ltd. | Transactions with affiliated subsidiaries | 1,357,874,413.14 | Within 4 years | 20.15 | |
| Wuxi (Jiangsu) Oppein Integration Home Co., Ltd. | Transactions with affiliated subsidiaries | 1,162,880,489.29 | Within 2 years | 17.25 | |
| Tianjin Oppein Integration Home Co., Ltd. | Transactions with affiliated subsidiaries | 393,786,809.62 | within 1 year | 5.84 | |
| Guangzhou Oppein Home Design Institute Co., Ltd. | Transactions with affiliated subsidiaries | 391,426,000.00 | Within 3 years | 5.81 | |
| Total | 6,143,770,637.70 | 91.15 |
(7) Receivables involving government subsidies
□ Applicable √ Not applicable
(8) Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(9) The amount of assets and liabilities formed by transferring other receivables and continuing to be involved
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
3. Long-term equity investments
√ Applicable □ Not applicable
Unit: CNY
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impa | Book value | Book balance | Impa | Book value | |
| irment provision | irment provision | |||||
| Investment in subsidiaries | 1,124,696,529.99 | 1,124,696,529.99 | 711,367,617.29 | 711,367,617.29 | ||
| Investment in affiliated and joint ventures | 10,518,308.44 | 10,518,308.44 | 15,543,367.11 | 15,543,367.11 | ||
| Total | 1,135,214,838.43 | 1,135,214,838.43 | 726,910,984.40 | 726,910,984.40 |
(1) Investment in subsidiaries
√ Applicable □ Not applicable
Unit: CNY
| The invested company | Beginning balance | Increase in current period | Decrease in the current period | Ending balance | Provision for impairment in the current period | Closing balance of impairment provision |
| Tianjin Oppein Integration Home Co., Ltd. | 56,706,428.19 | 61,111.72 | 56,645,316.47 | |||
| Guangzhou Oppein Integration Home Co., Ltd. | 53,817,062.09 | 44,274.90 | 53,772,787.19 | |||
| Guangzhou Oppein Sanitary Ware Co., Ltd. | 17,448,629.40 | 170,605.07 | 17,278,024.33 | |||
| Guangzhou Ouboni Integration Home Co., Ltd. | 8,688,544.94 | 91,186.75 | 8,597,358.19 | |||
| Oppein (Guangzhou) Soft Decoration Design Co., Ltd. | 3,515,365.72 | 78,389.66 | 3,436,976.06 | |||
| Oppein (Hong Kong) International Trade Company Limited | 21,432,084.32 | 21,432,084.32 | ||||
| Wuxi (Jiangsu) Oppein | 52,101,428.58 | 30,701.23 | 52,132,129.81 |
| Integration Home Co., Ltd. | ||||||
| Qingyuan Oppein Integration Home Co., Ltd. | 100,658,748.30 | 158,743.81 | 100,500,004.49 | |||
| Oppein United (Tianjin) Home Sales Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
| OPPEINITALYACADEMYS.R.L. | 2,568,895.00 | 2,568,895.00 | ||||
| Guangzhou Oppein Creative Home Design Co., Ltd. | 3,682,525.33 | 55,759.36 | 3,738,284.69 | |||
| Chengdu Oppein Smart Home Co., Ltd. | 100,197,905.42 | 3,235.98 | 100,194,669.44 | |||
| Meizhou Oppein Investment Industry Co., Ltd. | 100,000,000.00 | 100,000,000.00 |
| Guangzhou Oppein Home Design Institute Co., Ltd. | 100,000,000.00 | 100,000,000.00 | ||||
| Xingpai Commercial Property Management (Guangzhou) Co., Ltd. | 3,400,000.00 | 3,400,000.00 | ||||
| Wuhan Oppein Smart Home Co., Ltd. | 86,150,000.00 | 413,850,000.00 | 500,000,000.00 | |||
| Zhuhai Oppein Creative Home Design Co., Ltd. | ||||||
| Total | 711,367,617.29 | 413,936,460.59 | 607,547.89 | 1,124,696,529.99 |
(2) Investment in affiliated and joint ventures
√ Applicable □ Not applicable
Unit: CNY
| Investor | Beginning balance | Increase or decrease in current period | Ending balance | Closing balance of impairment provision | |||||||
| Additional investment | Negative investment | Investment gains and losses recognized under the equity method | Other comprehensive income adjustments | Changes in other interests | Declare cash dividends or profits | Impairment provision | Other | ||||
| I. Joint ventures | |||||||||||
| Guangzhou Red Star Macalline Expo Home Plaza Co., Ltd. | 12,328,756.91 | 3,500,000.00 | -8,828,756.91 | 0.00 | |||||||
| Sub-total | 12,328,756.91 | 3,500,000.00 | -8,828,756.91 | ||||||||
| II. Associated enterprise | |||||||||||
| Beijing Jiaju Technology Co., Ltd. | 3,214,610.20 | 7,303,698.24 | 10,518,308.44 | ||||||||
| Sub-total | 3,214,610.20 | 7,303,698.24 | 10,518,308.44 | ||||||||
| Total | 15,543,367.11 | 3,500,000.00 | -1,525,058.67 | 10,518,308.44 | |||||||
4. Operating income and operating cost
(1) Operating income and operating cost
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period | ||
| IncomIncomee | Cost | IncomIncomee | Cost | |
| Main business | 10,835,087,887.82 | 8,542,342,870.66 | 10,268,664,320.18 | 7,889,158,909.12 |
| Other businesses | 493,238,032.66 | 484,141,214.64 | 472,355,588.10 | 446,277,615.22 |
| Total | 11,328,325,920.48 | 9,026,484,085.30 | 10,741,019,908.28 | 8,335,436,524.34 |
(2) Information of income generated by the contract
□ Applicable √ Not applicable
(3) Description of performance obligations
√ Applicable □ Not applicable
As of December 31, 2022, the corresponding transaction price for performance obligations that have been signedbut have not yet been fulfilled or completed was CNY 600,606,528.86. Revenue is expected to be recognized between2023 and 2024.
(4) Description of allocation to remaining performance obligations
□ Applicable √ Not applicable
5. Investment income
√ Applicable □ Not applicable
Unit: CNY
| Item | The amount incurred in current period | Amount incurred in last period |
| Income from long-term equity investment accounted with cost method | 0.00 | 0.00 |
| Long-term equity investment income accounted by Equity method | -1,525,058.67 | -6,461,645.66 |
| Investment income from disposal of long-term equity investment | 0.00 | 0.00 |
| Investment income during the holding of transactional financial assets | 0.00 | 0.00 |
| Dividend income obtained from other equity instrument investments during the holding period | 106,575.00 | 203,000.00 |
| Interest income obtained from debt investments during the holding period | 0.00 | 0.00 |
| Other interest income obtained from debt investments during the holding period | 0.00 | 0.00 |
| Investment income from disposal of trading financial assets | 6,061,357.32 | 2,512,753.42 |
| Investment income from disposal of other equity instrument investments | 0.00 | 0.00 |
| Investment income from disposal of debt investments | 0.00 | 0.00 |
| Investment income from disposal of other debt investments | 0.00 | 0.00 |
| Profits on debt restructuring | 0.00 | 0.00 |
| Cost method accounting for dividend income during the holding period of long-term equity investments | 700,000,000.00 | 0.00 |
| Total | 704,642,873.65 | -3,745,892.24 |
6. Other
□ Applicable √ Not applicable
XVIII. Further information
1. Detailed statement of profits and losses and losses for the current period
√ Applicable □ Not applicable
Unit: CNY
| Item | Amount | Notes |
| Profits and losses on disposal of non-current assets | -267,179.73 | / |
| Ultra vires examination and approval, or no formal approval documents, tax | / |
| Item | Amount | Notes |
| return, reduction and exemption | ||
| Government subsidies included in the current profits and losses (closely related to enterprise business, except for government subsidies enjoyed in accordance with national unified standards or quotas) | 106,255,630.20 | / |
| Capital occupancy fees charged to non-financial enterprises included in current profits and losses | / | |
| The investment cost of subsidiaries, associates and joint ventures obtained by the enterprise is less than the income from the fair value of the identifiable net assets of the investee at the time of obtaining the investment | / |
| Item | Amount | Notes |
| Profits and losses on non-monetary asset exchange | / | |
| Profits and losses from entrusting others to invest or manage assets | / | |
| Provision for impairment of assets due to force majeure, such as natural disasters | / | |
| Profits and losses on debt restructuring | / | |
| Enterprise restructuring costs, such as expenses for resettling employees and integration costs | / | |
| Profits and losses exceeding fair value arising from transactions with significantly unfair transaction prices | / | |
| Current net profits and losses of subsidiaries arising from business merger under the same control from the beginning of the period to the merger date | / | |
| Profits and losses arising from contingencies unrelated to the normal business operation of the Company | / | |
| In addition to the effective hedging business related to the normal business of the Company, the profits and losses from changes in fair value arising from the holding of trading financial assets, derivative financial assets, trading financial liabilities and derivative financial liabilities, as well as the investment income from the disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other creditor's rights investments | -15,064,653.29 | / |
| Reversal of provision for impairment of receivables and contract assets subject to independent impairment test | / | |
| Profits and losses from entrusted loans | / | |
| Profits and losses arising from changes in the fair value of investment real estate measured subsequently using the fair value model | / | |
| The impact of one-time adjustment of current profits and losses on current profits and losses according to the requirements of tax, accounting and other laws and regulations | / | |
| Custody fee income from entrusted operation | / | |
| Other non-operating income and expenses other than the above items | 11,468,590.83 | / |
| Other profit and loss items that meet the definition of non-recurring profits and losses | 19,781,431.38 | / |
| Less: income tax impact | 26,077,389.56 | / |
| Minority interest impact | 10,284.10 | / |
| Total | 96,086,145.73 | / |
The reasons shall be explained for the non-recurring profits and losses defined by the Company in accordance with thedefinition of Explanatory Announcement on Information Disclosure of Companies Offering Securities to the Public No.1- Non-recurring Profits and Losses, and the non-recurring profits and losses listed in Explanatory Announcement onInformation Disclosure of Companies Offering Securities to the Public No.1 - Non-recurring Profits and Losses asrecurring profits and losses.
□ Applicable √ Not applicable
2. Net return on assets and earnings per share
√ Applicable □ Not applicable
| Profit during the reporting period | Weighted average return on net assets (%) | Earnings per share | |
| Basic EPS | Diluted EPS | ||
| Net profit attributable to common shareholders of the Company | 17.37 | 4.41 | 4.38 |
| Net profit attributable to common shareholders of the Company after deducting non-recurring profits and losses | 16.75 | 4.26 | 4.22 |
3. Differences in accounting data under domestic and foreign accounting standards
□ Applicable √ Not applicable
4. Other
□ Applicable √ Not applicable
Chairman: Yao LiangsongApproval and submission date of the board of directors: April 24, 2023Revision Information
□ Applicable √ Not applicable