Stock code: 600415 Stock short name: 小商品城
Zhejiang China Commodities City Group
Co., Ltd.Semi-annual Report for 2023
Important NoteI. The Board of Directors, the supervisory committee and the directors, supervisors
and senior management of the Company hereby warrant the truthfulness, accuracyand completeness of the contents of the Annual Report, guarantee that there are nofalse representations, misleading statements or material omissions contained in thisAnnual Report, and are jointly and severally responsible for the liabilities of theCompany.
II. All directors of the Company were present at the board meeting.
III. This semi-annual report has not yet been audited.
IV. ZHAO Wenge, Legal Representative, WANG Dong, Person in Charge of Finance, andZHAO Difang, Head of Finance Department (Finance Manager) hereby state that, theyguarantee the truthfulness, accuracy and completeness of the financial report in thesemi-annual report.
V. The profit distribution plan for the reporting period or the plan for public reservefunds into share capital that was approved by the board of directorsNil
VI. Risk statement with forward-looking representations
√Applicable □Not applicable
The forward-looking representations involved in this Report such as future plans anddevelopment strategies do not constitute the Company’s substantial commitments to investors.Investors shall watch out for the investment risks.
VII. Is the Company’s cash occupied by its controlling shareholder or any of other
affiliates for non-operational purposes?No
VIII. Has the Company provided external guarantee in violation of the prescribed
decision-making procedures?No
IX. Whether there is circumstance that more than half of the directors cannot
guarantee the authenticity, accuracy and completeness of the semi-annual reportdisclosed by the CompanyNo
X. Reminder of major risksThe Company has described the risks that may exist in this Report in details. Please refer to“Potential Risks” in “Section III Discussion and Analysis of Managers” of this Report.
XI. Other
□Applicable √Not applicable
Table of Contents
Section I. Definitions ................................................................................................................... 5
Section II. Company Profile and Financial Highlights ............................................................. 6
Section III. Discussion and Analysis of Managers .................................................................... 9
Section IV. Corporate Governance ........................................................................................... 35
Section V. Environmental and Social Responsibilities .......................................................... 40
Section VI. Significant Matters ................................................................................................... 41
Section VII. Changes in Shares and Shareholders .................................................................. 54
Section VIII. Preferred Shares ...................................................................................................... 59
Section IX. Bonds ......................................................................................................................... 60
Section X. Financial Report ....................................................................................................... 66
Documents for Inspection | Accounting statements with the signatures and stamps of the person incharge of the Company, person in charge of accounting and person in charge of the accounting body. |
Resolutions of the 12th Meeting of the 9th Board of Directors and the 5th Meeting of the 9th Board of Supervisors | |
Original copies of all company documents and announcements publicly disclosed on the website designated by the China Securities Regulatory Commission during the reporting period |
Section I. Definitions
For the purpose of this Report, unless otherwise stated in the context, the following terms shallhave the following meanings:
Definitions | ||
SCO | means | Yiwu State-owned Capital Operation Co., Ltd. |
MDG | means | Yiwu Market Development Group Co., Ltd. |
CCCH | means | Yiwu China Commodities City Holdings Limited |
Zhijie Yuangang | means | Zhejiang Zhijie Yuangang International Supply Chain Technology Co., Ltd. |
Yiwu Pay | means | Payment brand wholly-owned by Zhejiang China Commodities City Group Co., Ltd. |
CCCP | means | Yiwu China Commodities City Property Development Co., Ltd. |
CCCF | means | Yiwu China Commodities City Financial Holdings Co., Ltd. |
Huishang Micro-finance | means | Yiwu Huishang Micro-finance Co., Ltd. |
Haicheng Company | means | Haicheng Yiwu China Commodities City Investment Development Co., Ltd. |
Yiwu Shanglv | means | Yiwu Shanglv Investment Development Co., Ltd. |
Chouzhou Financial Lease | means | Zhejiang Chouzhou Financial Lease Co., Ltd. |
Handing Shangbo | means | Yiwu Handing Shangbo Property Co., Ltd. |
The Company, the Listed Company or the Group | means | Zhejiang China Commodities City Group Co., Ltd. |
Section II. Company Profile and Financial Highlights
I. Company profile
Chinese name | Zhejiang China Commodities City Group Co., Ltd. |
Chinese short name | 小商品城 |
English name | Zhejiang China Commodities City Group Co.,Ltd |
English short name | YIWU CCC |
Legal representative | ZHAO Wenge |
II. Contact information
Board Secretary | Securities Affairs Representative | |
Name | XU Hang | RAO Yangjin |
Address | Haiyang Business Building, No.105 Futian Road, Yiwu | Haiyang Business Building, No.105 Futian Road, Yiwu |
Telephone | 0579-85182812 | 0579-85182812 |
Fax | 0579-85197755 | 0579-85197755 |
Hxu@cccgroup.com.cn | Hxu@cccgroup.com.cn |
III. Introduction to changes in basic information
Registered address | Haiyang Business Building, No.105 Futian Road, Yiwu, Zhejiang Province |
Office address | Haiyang Business Building, No.105 Futian Road, Yiwu, Zhejiang Province |
Postal code at the office address | 322000 |
Corporate website | www.chinagoods.com |
600415@cccgroup.com.cn |
IV. Changes in information disclosure and filing place
Newspaper selected by the Company for information disclosure | China Securities Journal, Shanghai Securities News and Securities Times |
Website for publishing the Semi-annual Report | www.sse.com.cn |
Place for access to the Company’s Semil-annual Report | Securities Department of the Company |
V. Stock profile
Type of stock | Exchange | Stock short name | Stock code | Stock short name before change |
A share | Shanghai Stock Exchange | 小商品城 | 600415 | Nil |
VI. Other relevant information
□Applicable √Not applicable
VII. Main accounting data and financial indicators of the Company(i) Major accounting data
Unit: RMB
Major accounting data | Jan-Jun 2023 | Jan-Jun 2022 | YoY Change (%) |
Operating revenue | 5,160,991,043.25 | 4,207,027,616.46 | 22.68 |
Net profits attributable to shareholders of the Listed Company | 1,998,333,646.74 | 1,222,205,978.81 | 63.50 |
Net profits attributable to shareholders of the Listed Company with non-recurring profits and losses excluded | 1,839,365,824.67 | 1,181,715,806.64 | 55.65 |
Net cash flow from operating activities | 143,247,195.78 | -666,587,333.62 | Not applicable |
Jun 30, 2023 | Dec 31, 2022 | Jun 30, 2023 versus Dec 31, 2022 (%) | |
Net assets attributable to shareholders of the Listed Company | 17,019,609,817.35 | 15,262,290,780.57 | 11.51 |
Total assets | 33,419,459,591.49 | 32,111,004,317.38 | 4.07 |
(ii) Major financial indicators
Major financial indicators | Jan-Jun 2023 | Jan-Jun 2022 | YoY Change (%) |
Basic EPS (RMB) | 0.37 | 0.22 | 68.18 |
Diluted EPS (RMB) | 0.37 | 0.22 | 68.18 |
Basic EPS after deducting non-recurring gains and losses (RMB/share) | 0.34 | 0.22 | 54.55 |
Weighted average ROE (%) | 12.30 | 8.05 | Up 4.25 ppt |
Weighted average ROE after deducting non-recurring gains and losses (%) | 11.32 | 7.78 | Up 3.54 ppt |
Illustration on major accounting data and financial indicators
√Applicable □Not applicable
1. The operating revenue increased by RMB 954 million YoY, mainly due to the carryover
revenue of the Second District East New Energy Product Market and the expansion ofcommodity sales scale.
2. The net profit attributable to shareholders of the listed company increased by RMB 776million YoY, mainly due to the official operation of the Second District East New EnergyProduct Market, which resulted in an increase of RMB 531 million in operating gross profit, aYoY increase of RMB 449 million in investment income and asset disposal income, and aYoY increase of RMB 189 million in income tax expenses.
3. The net profit attributable to shareholders of the listed company after deductingnon-recurring gains and losses increased by RMB 658 million YoY, due to an increase ofRMB 776 million and RMB 118 million respectively in net profit and non-recurring profits andlosses attributable to shareholders of the listed company compared with the same period ofthe previous year.
VIII. Differences in accounting data between foreign and Chinese accounting standards
□Applicable √Not applicable
IX. Non-recurring profits and losses and amounts thereof
√Applicable □Not applicable
Unit: RMB
Non-recurring profits and losses | Amount | Notes (If applicable) |
Profits and losses from the disposal of non-current assets | 177,251,158.26 | Mainly due to the income from asset disposal |
Government grants that are recognized in the current Profits and losses, excluding the government grants that are closely related to the normal operation of the Company and are provided in a fixed amount or quantity continuously according to the national polices and certain standards | 14,351,408.58 | Please refer to the details of government subsidies included in other income for details |
Cash occupation fees charged from non-financial enterprises that are recognized in the current Profits and losses | 17,419,324.72 | Cash occupation fee for receiving financial aid |
Profits and losses from changes in fair value of held-for-trading financial assets, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, and investment income from the disposal of held-for-trading financial assets, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt instruments, except for effective hedging during the ordinary course of business | -6,192,155.35 | Mainly due to changes in fair value gains and losses of other non-current financial assets and trading financial assets held |
Profits and losses arising from external entrusted loans | 1,252,476.06 | |
Net income from other non-operating activities | 3,021,986.99 | Deduction of asset disposal and government subsidies |
Less: effect of income tax | 47,508,712.07 | Mainly due to corporate income tax corresponding to asset disposal income |
Effect of minority interest (after-tax) | 627,665.12 | |
Total | 158,967,822.07 |
Explanations shall be made for the non-recurring profits and losses identified by the Companyaccording to the Explanatory Announcement No. 1 on Information Disclosure by CompaniesPublicly Offering Securities – Non-recurring profits and losses, and for the Company identifyingthe non-recurring profits and losses enumerated in the Explanatory Announcement No. 1 onInformation Disclosure by Companies Publicly Offering Securities – Non-recurring profits andlosses as recurring profits and losses.
□Applicable √Not applicable
X. Other
□Applicable √Not applicable
Section III. Discussion and Analysis of ManagersI. Description of the industry and the Company’s main business during the reportingperiod(I) Main business of the CompanyThe Company is committed to building a shared trade service platform for global small andmedium-sized enterprises, with the strategic positioning of "world-class international tradecomprehensive service provider", continuously enriching and improving the three majorecosystems: commodity display ecology, service supporting ecology, and trade performanceecology, in order to reduce trade costs, shorten trade chains, improve trade efficiency, andcontinue to create value for the circulation of small commodities, consolidate the advantageousposition of China's daily consumer goods supply chain in global trade, and serve the newdevelopment pattern of domestic and international dual circulation.
The product display ecology includes offline physical market operation and online platformservices, supporting service ecology includes exhibition and hotel sectors, and tradeperformance ecology includes warehousing and logistics, self operated trade and payment,credit reporting, factoring, and other businesses.(II) The main business model of the Company
1. Product display ecology:
(1) Market operation
The market operation business is mainly operated and managed by the subordinate marketoperation companies of the Company. The main business income of the market operationsegment is mainly the income from the use of shops. The Company adopts a shop rental model,that is, the ownership of the shops belongs to the Company, and market traders only have theright to use the shop within the contract period. The Company and market traders sign a contractto clearly stipulate the use period, usage fee and business purpose of the shops. The merchantshall not change the agreed business purpose, and shall not sublet without the Company’sconsent. Generally, the payment methods of usage fee are one-time payment or installmentpayment according to the contract terms. At present, the markets operated by the Companyinclude the first to fifth district markets, the import market, the first district eastern expansion andsecond district east market, the Huangyuan market, and the international production materialsmarket of the International Trade City.
(2) Online trading platform
The Yiwu Small Commodities City Platform (referred to as "Chinagoods platform") is a B2Bdigital trade comprehensive service platform that relies on the Company's 75000 physical shopsin the market, serves 2.1 million small and micro enterprises in the upstream and downstream ofthe industrial chain. With trade data integration as the core driver, it meets the needs of bothsupply and demand parties in manufacturing, display transactions, warehousing and logistics,financial credit, market management and other links. The current revenue model of the platform
is to collect service fees by providing basic services and value-added services for members,digital advertising business services, digital services for financial institutions, and fourth-partyservices.
2. Supporting service ecology:
(1) Exhibition
The Company's exhibition sector has developed into a professional exhibition enterprisewith one-stop service that integrates domestic exhibition organization, overseas exhibition,exhibition hall management, and exhibition supporting services. The exhibition section mainlyundertakes exhibition projects such as China Yiwu International Small Commodity (Standard)Expo (UFI), China Yiwu Import Goods Expo (UFI), China Yiwu International Forest ProductsExpo (UFI), and self-operated projects such as overseas exhibitions (Korean Import GoodsExhibition, China Consumer Goods (Russia) Brand Exhibition, Benin (West Africa) ChinaCommodity Exhibition, etc.), And engaged in exhibition hall operation, development, leasing andother exhibition industry chain services. The Company also undertakes the operation andmanagement of Yiwu International Expo Center venues.
(2) Hotel
The hotel service business is mainly operated and managed by Zhejiang Yindu HotelManagement Co., Ltd., a subsidiary of the Company. The hotels operated by the Companymainly provide comprehensive services such as accommodation, catering, leisure andentertainment, and conferences, etc. The main revenue sources of the hotels include room sales,catering sales, commodity sales and venue leasing, etc. Sales of guest rooms and cateringmainly rely on channels such as clients agreement, conferences, wedding banquets andrecommendation by operators of online booking platforms.
3. Trade Performance Ecology:
(1) Warehousing and logistics
The Company's warehousing sector is led by warehousing, strengthening the servicecapacity of Yiwu freight warehouses, regional warehouses, and overseas warehouses, anddeeply entering various links of the trade chain. At present, there are three parks: ChinagoodsShared Cloud Warehouse, Houzhai Warehouse Park, and Huanqiu Yida Supply Chain IndustrialPark. Chinagoods Shared Cloud Warehouse is market-oriented and uses digital means to form afully visible warehouse system. It combines public warehouses, express package distribution,and international consolidation to provide convenient warehousing services for market operators,domestic and foreign buyers, logistics and express delivery companies, as well as freightforwarders and foreign trade companies. Houzhai Warehouse Park and Huanqiu Yida SupplyChain Industrial Park are based on warehousing systems, providing efficient, convenient, andthree-dimensional warehousing service systems for market operators.
(2) Self-operated trade
ICMALL is the initials of international commodity mall, which is a subsidiary of thewell-known Chinese trademark "Yiwu China Small Commodities City". "爱喜猫" is the Chinesetransliteration of ICMALL. With the brand vision of "discovering the best products in the world",ICMALL combines over 20000 high-quality products from imported goods and trendy domesticproducts, covering six categories: home life, beauty and skincare, mother and baby products,snacks and beverages, entertainment and cultural creativity, and toy digital. ICMALL strives tocreate a super supply chain channel brand in new fashion, new consumption, and newexperience application scenarios.
As a self-owned brand that focuses on the creative development of trendy domesticproducts, "Yiwu Good Products and Good Brands" provides empowering services for theimprovement and upgrading of small commodities in Yiwu and even across China through theentire chain of product development and design, production and manufacturing, quality and price,marketing planning, after-sales service, and other aspects. In the future, the brand will strive tocreate a good products brand standardized output system with good prices, quality, and service.
The Company enters the upstream and downstream of market trade through self-operatedtrade, fully leveraging its platform and brand advantages, linking trade with the market andnurturing the market, and forming a virtuous and orderly cycle.
(3) Payment, credit reporting, factoring and other businesses
The Company's "Yiwu Pay" is a licensed third-party payment institution supervised by thePeople's Bank of China, providing convenient and secure electronic payment solutions formerchants through internet payment technology. Yiwu Pay was established in 2012. With itsprofessional global payment service capabilities, financial compliance capabilities, and securityrisk control capabilities, Yiwu Pay provides a one-stop cross-border payment solution fordomestic and foreign customers, enabling them to receive payments in compliance, settleforeign exchange easily, improve fund utilization efficiency, and ensure safe receipt of funds.The business of Yiwu Pay covers various scenarios such as online and offline B2B payments,cross-border payments, among which cross-border payment revenue is the main revenue of theCompany. Domestic payment business: As a licensed payment institution, "Yiwu Pay" linksmajor domestic banking institutions through clearing organizations such as UnionPay andNetsUnion Clearing Corporation, providing merchants with collection services such as bank cardfast payment, QR code scanning payment, wallet payment, and e-CNY payment, and obtainspayment fee. Cross-border payment business: "Yiwu Pay" provides one-stop cross-border fundservices such as global collection and payment, foreign exchange management, etc. for importand export enterprises, and obtains cross-border payment fee. Payment service business: "YiwuPay" collaborates with the credit consulting company, banks and other institutions to providemerchants with a financing credit model based on payment data as the underlying layer, and thecredit reporting company uniformly encapsulates and outputs it to financial institutions such asbanks, providing financing services and obtains corresponding service fees.
The credit consulting company was established in July 2014, collaborating with governmentdepartments to promote the construction of the city's social credit system. It has established adata system centered on public data, commercial data, and e-commerce data. By constructingprecise enterprise portraits, it provides technical support in credit verification, joint rewards andpunishments, inclusive finance, and other fields of government and financial institutions, andempowers trade ecological value with data elements. Currently, it covers 995500 legal entities,with a total of over 158 million pieces of data. Through the enterprise credit information queryplatform, the credit consulting company provides enterprise credit information query services forfinancial institutions and carry out data management for inclusive finance of banks. Currently,there are more than 30000 credit granting subjects, with a total granted credit amount of RMB
8.45 billion. The credit consulting company charges service fees through technologydevelopment, system interface docking, and data support based on inclusive finance for bankingand insurance institutions.
Zhejiang China Commodities City Group Commercial Factoring Co., Ltd. (referred to as"China Commodities City Factoring") was established in January 2022 and is a local financialorganization approved by the Zhejiang Provincial Local Financial Supervision andAdministration Bureau. China Commodities City Factoring is mainly engaged in trade financing,accounts receivable settlement, management and collection, customer credit investigation andevaluation, and non commercial bad debt guarantee through the transfer of accounts receivable.China Commodities City Factoring mainly serves the merchants of Yiwu International Trade City,and the main income comes from interests and handling fees for factorage financing. After theexpansion of business scale in the later stage, China Commodities City Factoring can cooperatewith banks and other funding parties to obtain service fees.
(III) Industry situation
1. Description of the industry of the Company
According to the definitions in the Guidelines for Industry Classification of Listed Companies(revised in 2012) released by the CSRC, the Company is engaged in “Business Service” (L72) in“Lease and Business Service” (L).
(1) Situation of Yiwu Market
Yiwu International Trade City has ranked first in the national comprehensive market for 32consecutive years in terms of market transaction volume, forming a relatively large industrialcluster in the field of small commodity circulation. In 2023, the Second District East New EnergyMarket gained a new construction area of 131000 square meters, and more than 490 new shopswere added on the first and second floors, further expanding the offline market. The YiwuInternational Trade City gathers 26 major categories and over 2.1 million types of commodities,radiating to 233 countries and regions, driving the development of 2.1 million small andmedium-sized enterprises and the employment of 32 million industrial workers. Every year, morethan 560000 foreign merchants come to Yiwu for procurement, and more than 15000 foreign
merchants from more than 100 countries and regions reside in Yiwu. There are over 8000foreign-funded entities in Yiwu.Yiwu market is an important platform connecting the domestic and international trade supplychains, and is at the key node of the global small commodity supply chain. It plays an importantrole in smoothing the internal circulation, improving the external circulation, and serving the newpattern of "dual circulation". Yiwu is the leader and demonstration center of market procurementtrade in China, and has maintained high-speed growth for 8 years in a row, with a compoundannual growth rate over 30%, which has effectively unlocked the validity of the market subjectand further improved the convenience level of trade.
In the first half of 2023, the total import and export amount of Yiwu City reached RMB 268.97billion, a YoY increase of 21.0%. Among them, the export amounted to RMB 237.41 billion , aYoY increase of 17.0%; the import amounted to RMB 31.56 billion, a YoY increase of 63.5%.Yiwu vigorously explores emerging markets, creates high-level open platforms, cultivates andstrengthens advantageous industries, and continuously gathers new momentum for foreigntrade. From the perspective of trade regions, in the first half of 2023, Yiwu's import from andexport to Africa reached RMB 49.38 billion, an increase of 31.0%; import from and export to LatinAmerica amounted to RMB 40.73 billion, an increase of 37.3%. import from and export to India,Brazil, and Saudi Arabia amounted to RMB 13.03 billion, RMB 6.77 billion yuan, and RMB 6.74billion, respectively, an increase of 13.6%, 43.5%, and 56.9%, respectively. Over the sameperiod, import from and export to countries along the "Belt and Road" totaled RMB101.2 billion,an increase of 21%.Yiwu City exported RMB 181 billion through market procurement trade, an increase of
19.1%, accounting for 76.2% of the total export amount of Yiwu City, driving the city's exportgrowth by 14.3 percentage points. The Company integrates market resources through digitalmeans, driving the iterative upgrading of the market procurement trade method to "Version 2.0".The market procurement trade method has become the main force driving the growth of Yiwu'sexports. Regionally, Southeast Asia, the Middle East and Latin America continue to occupy ahigh market share in the trade with Yiwu. Countries along the "Belt and Road" and in the "RCEP"region continue to bring opportunities to the Yiwu market, and RMB going global has become anew highlight of Yiwu's market.
During the reporting period, the total passenger flow of buses, railways, and airlines in theurban area of Yiwu was 10.4063 million, a YoY increase of 69.01%. The postal industry in YiwuCity has completed a total of over 5 billion pieces of parcels, a year-on-year increase of over 12%.The total capital and cash flow of bank branches around the Yiwu market was RMB 1.78 trillion,a year-on-year increase of 26.82%. The turnover of market funds continued to be active, withdeposits and loans exceeding RMB a trillion, a year-on-year increase of over 15%. Yiwu becamethe first county-level city in Zhejiang Province (excluding districts) to successfully enter the
trillion-yuan level of deposit and loan, achieving a historic leap in the development of the regionalfinancial industry.
(2) Digital Economy
① Digital Economy
a. Development of Digital Trade of the CompanyIn 2022, the scale of China's digital economy reached RMB 50.2 trillion, a year-on-yearincrease of 10.3%. It has been significantly higher than the nominal GDP growth rate of the sameperiod for 11 consecutive years. The proportion of the digital economy to GDP is equivalent tothe proportion of the secondary industry to the national economy, reaching 41.5%.
Centering on the strategic deployment of building "Digital Zhejiang" made by the GeneralSecretary XI Jinping during his work in Zhejiang, the Company will continue to promote thedigital transformation of market mass trade, and constantly shape the new competitiveadvantages of Yiwu market through the reconstruction of trade mode and business form and thereshaping of market scene ecology. From the perspective of domestic enterprise structure, smalland medium-sized enterprises with large volume and rapid growth are the backbone of China'seconomic development, but subject to multiple factors such as assets, technology andexperience, the digital level of small and medium-sized enterprises is generally low. The platformcan use the advantages of its own traffic, data and industrial layout to build diversified solutionsfrom design and production, matching transactions, customs declaration and performance,foreign exchange settlement and other services around the core pain points of SMEs, such asmarketing, service and capital.
At present, the transformation of Yiwu market has entered the digital stage from theinformatization stage, leading the way and demonstrating the high-quality development of thecommodity market led by digitization. In the "Top 10 Digital Leaders in China's CommodityMarket" list released for the first time at the 12th China Commodity Market Summit in 2021, YiwuChina Commodities City ranked first. In 2022, the digital free trade application of smallcommodities was awarded the "Best Application" for digital reform in Zhejiang Province.
The core value of digital trade is data resources. Data is not only a carrier for nationalsecurity and personal privacy, but also an internal driving force for the new stage of economic
development. Data, as a new economic production factor, can reduce production costs, innovatebusiness models, and improve resource allocation efficiency. Relying on the carrier of digitaltrade, data will ultimately achieve cross-border flow and global sharing, thereby improving socialproduction efficiency and promoting the development process of the global economy. With thedeepening of globalization and the development of digital technology, digital trade will graduallymove towards the goal of liberalization. Digital trade may reshape the global value chain systemand payment system, becoming a new driving force for economic growth. With the developmentof digital technology and the deepening of globalization, traditional trade models aretransforming and upgrading to digital trade models dominated by digitization.b. Development of Data Business of the CompanyYiwu market is an important platform connecting the domestic and international trade supplychains, and is at the key node of the global small commodity supply chain. It plays an importantrole in smoothing the internal circulation, improving the external circulation, and serving the newpattern of "dual circulation". Over the years of business accumulation, Yiwu market has formedthe support of industrial clusters in the field of small commodity circulation, collecting massiveinformation and data on transactions, customs declaration, logistics, foreign exchangesettlement, etc. Through the application products such as Caigoubao on the Chinagoodsplatform and Yiwu Pay, the Company has mined the trade data of the industrial belt of the "Beltand Road" China Commodities Cities, and gradually tracked out a new business model: basedon the foreign exchange settlement data or trade data, the Company integrates creditinformation, provides credit basis for third-party commercial banks or self-operated factoringbusinesses, and charges service fees. Through data monetization, the massive data formed bythe offline market operated by China Commodities Cities for many years, including the globalsmall commodity index, is mined and reshaped through the services of online platforms in thevalue chain.During the reporting period, the Company's Yiwu Pay and credit consulting companycollaborated with the People's Bank of China Yiwu Branch and Yiwu Rural Commercial Bank tolaunch China's first "credit product trade financing" based on cross-border RMB settlement data,bringing efficient, convenient, and low-cost financing methods to enterprises. This productcombines the information of the two major resources of credit and payment licenses to buildaccurate portraits for cross-border e-commerce and other foreign trade entities, innovateevaluation standards, and provide exclusive credit services for enterprises. At present, anintegrated service centered on the credit consulting company has been formed, in which theYiwu Pay platform outputs risk control models based on customer authorization andcross-border settlement data, and authorizes banks to apply for the use of credit consultingproducts. Yiwu Pay integrates foreign exchange settlement data and credit data on the basis ofthe original income model, and derives a new income model.
Huokuanbao is developed and operated by the Internet Financing Company, a subsidiary ofthe Big Data Company. It is based on the Chinagoods platform and integrates foreign tradeexport chain data such as design and production, order matching, trade performance, andforeign exchange settlement. It takes into account both subject credit and trade credit, to providetrade financing services for merchants, aggregate the foreign trade ecosystem of freightforwarders, warehousing, and logistics, and derive ecological values. Since 2023, the businessvolume of Huokuanbao has grown rapidly. In the future, it will collaborate with third-partycommercial banks to develop and empower small and medium-sized enterprises' foreign tradeexports. The Company integrates trade and foreign exchange data through the Chinagoodsplatform to solve the pain points and difficulties faced by small and medium-sized enterprises intrade, gradually enhancing the overall value of the Chinagoods platform, and continuouslyenhancing the competitiveness of China's daily consumer goods globally.
② Cross-border payment
a. Situation of cross-border payment industry
This year coincides with the 10th anniversary of the "Belt and Road" initiative. Over the past10 years, RMB has played an increasingly important role in cross-border payment and otheraspects. In countries along the "Belt and Road", the use of RMB has gradually increased, andRMB cross-border payment has made great progress. According to Bloomberg, in March of thisyear, the use of RMB surpassed the US dollar in China's cross-border transactions for the firsttime, and more and more countries and regions are increasing the scale of RMB settlement.Currently, over 70% of trade settlements between Russia and China are already using rublesand RMB; In addition, Argentine officials have also announced that they will use RMB instead ofUS dollars to pay for goods imported from China. According to data from the central bank, thecross-border payment and receipt of RMB increased from less than 10 billion yuan in 2009 to 42trillion yuan in 2022. In 2022, RMB accounted for about 50% of the total cross-border paymentand receipt of domestic and foreign currencies.
There is a highly positive logical relationship between RMB internationalization and theconstruction of the "Belt and Road", which together constitute two key points for China toparticipate in and lead the new international pattern in the new era. The "Belt and Road" providesan important opportunity for RMB internationalization. The "Belt and Road" is a major initiative ofChina in the new era to create a pattern of land-sea and domestic-overseas linkage andeast-west two-way opening.
The "Belt and Road" involves a total population of about 4.4 billion and an economicaggregate of about 21 trillion US dollars, accounting for 63% and 29% of the world's total,respectively. Many countries along the "Belt and Road" are developing countries and emergingeconomies, which are generally in an upward phase of economic development. In the past 10years, China's import and export trade to the regions along the "Belt and Road" has increased atan average annual rate of about 20%, and its direct investment to the regions along the "Belt and
Road" has increased at an average annual rate of more than 30%. None of the countries alongthe "Belt and Road" are major currency issuers, and the currency inertia is relatively small.China's close economic and financial cooperation with them will provide a solid carrier and broadmarket for the regional use of RMB.RMB internationalization is an important guarantee and necessary condition for the smoothprogress of the "Belt and Road" construction. Internationalization of RMB can effectively preventfinancial risks within the region, reduce transaction costs, and enhance the overallcompetitiveness of the regional economy. With the gradual opening of China's capital account,the development of RMB internationalization can provide sufficient RMB liquidity for theconstruction along the "Belt and Road", and provide financial support and service conveniencefor major projects through RMB bonds, loans, direct investment and other forms. At the sametime, the internationalization of RMB will also provide new international currencies and riskmanagement mechanisms for countries along the "Belt and Road", promote internationalinvestment and cooperation processes, build economic and financial security anchors, andmaintain regional economic and financial stability.b. Development of cross-border payment business of the CompanyYiwu is the intersection of the "Land Silk Road" and the "Maritime Silk Road". As theconstructor of the "World Capital of Small Commodities", Yiwu undertakes the important missionof promoting the high-quality development of the "Belt and Road" and RMB going global. TheCompany will spare no effort to promote the development of trade services and cross-borderRMB business.
Cross-border Business Map (Taking the First Saudi Cross-border RMB Business as an
Example)II. Analysis of core competencies during the reporting period
√Applicable □Not applicable
(I) First-mover advantages
At the start of China’s reform and opening-up, Yiwu took the lead in establishing thecommodities market. During the recent forty years, the market has been upgraded five times andexpanded ten times and has been among the top comprehensive national markets with thehighest turnover, pointing to its remarkable first-mover advantages. As the largest commoditiesdistribution center in the world, the Yiwu commodities market provides more than 2.1 millionproducts, which fall in 26 categories and supports one-stop purchase. The market boastsenormous resources and huge business flow, goods flow, cash flow and information flow.(II) Brand advantages“Yiwu China Commodities City” is the first market identified by the SAIC as a well-knowntrademark among the national commodities trading markets. The Company has taken multiplemeasures to give play to the brand of “Yiwu China Commodities City” and is committed toimproving its influence and leading role in the industry. Its brand advantages and influence havekept enhancing.(III) Supporting services advantages
The People’s Government of Yiwu has been providing policy support for the development ofthe market for years, and the auxiliary industries are developing rapidly in Yiwu.
1. Convenient logistics system
Yiwu has in place perfect commerce and trade auxiliary facilities and advantageous logisticsservice. The logistics network has full coverage in Yiwu. A large number of large-sizedinternational and domestic express delivery and logistics companies have regional distributioncenters in Yiwu, and a world-oriented goods transport and distribution network has beenestablished. Yiwu has been listed among the “commerce and trade-oriented national logisticshubs” by the National Development and Reform Commission and the Ministry of Transport.According to the report on operation of the postal industry in 2022 released by the State PostBureau, the express delivery business volume of Yiwu ranked second in China in 2022.
2. Industry support
During the recent years, thanks to the Yiwu China Commodities City, the Yiwu-centeredmanufacturing industry cluster has been developing fast, an commodities industrial belt that iscentered in Yiwu and covers Jinhua, Lishui, Quzhou, Hangzhou, Jiaxing, Taihu, Shaoxing,Ningbo, Wenzhou and Taizhou with an area of nearly 10,000 sq.m has been established, and abenign mechanism under which the Yiwu wholesales market and the peripheral industry clusterdevelop together has been formed.
3. Support for exhibition service
The major international trade exhibitions held by the Company’s exhibition business divisionsuch as China Yiwu International Commodities Fair, China Yiwu International Forest ProductsFair, China Yiwu International Imported Commodities Fair and China Yiwu Hardware andElectrical Expo support and cultivate vertical exhibition in multiple industries such as stationeryand textiles, have developed multiple professional and international exhibition brands, and are
important national platforms for the China Commodities City to lead industry development,develop the city economy and maintain the clusters of traders and commodities.(IV) Advantages of diversified businessesThe Company has strengthened its presence in the related industries, made efforts onfinancial investment, kept developing the exhibition business, created a new e-commerce model,developed the hotel business and also run international trade, modern logistics, advertisinginformation, shopping and tourism businesses. It has created a group structure andprofit-making model of shared and interactive development of market resources.
(V) Management advantagesIn terms of personnel, management and technology, excellent operation and managementability is one of the core competences of the Company as a professional market operatingcompany. The Company has developed a series of perfect management systems for marketoperation and management, accumulated rich experience in operation and management, andhas cultivated a professional management team with reasonable knowledge and expertisestructures and strategic development insights.(VI) Adavantage of online and offline platform integrationThe Company’s international trade city is the global leading commodity market. TheCompany’s official Yiwu CCC website, chinagoods platform, relying on the Company’s 75,000off-line shops, through integration of online and offline services, serves 2.1 million small, mediumand micro enterprises in the upper reaches of the industry chain. With trade data integration asthe core driver, it meets the needs of both supply and demand parties in manufacturing, displaytransactions, warehousing and logistics, financial credit, market management and other links.(VII) Advantage of international logisticsThe Company's Zhijie Yuangang international logistics business, establishes a logisticsplatform to replace the multi-layer freight forwarder system, thus shortening the level of freightforwarder distribution, and improving logistics efficiency. In contrast, the traditional foreign tradefreight forwarders are divided into multiple levels, the logistics and transportation services arenot standardized, and the service prices vary widely and are usually not the lowest price.
III. Discussion and analysis of operation status
This year marks the 30th anniversary of the Company's establishment. With thirty years ofups and downs, the Company has been steadfast in writing a new chapter and has set thestrategic goal of becoming a "world-class international trade comprehensive service provider".With the goal of building the "World Capital of Small Commodities" with high quality and level,and within the framework of a unified national market, the Company is comprehensivelypromoting market innovation and development, as well as enterprise transformation andupgrading. Through digital reform, the Company is breaking through the physical limitations of
traditional business, and speeding up the construction of a global business leader thatempowers the mass trade of small commodities.
Timeline of important events in the reform of the Company since 2018During the reporting period, the daily average flow of the International Trade City exceeded200,000 people, with a daily average of over 2000 overseas buyers entering the market. Multiplemarket prosperity indicators exceeded those in the same period in 2019, and the morale of allemployees and market operators of the Company was high, racing against time and improvingefficiency. The import and export market in Yiwu underwent a "strong recovery".
The "strong recovery" of the Yiwu market in the first half of 2023 has shown the followingcharacteristics: Firstly, the structural upgrading brought about by the expansion of new energyindustries in the Yiwu market. Secondly, there is an increasing number of independentlydeveloped products in the Yiwu market, which are more innovative and intelligent, acceleratingthe transformation from product going global to brand going global. Thirdly, the proportion ofonline business of the Yiwu market is constantly improving, and the trade compliance ability isbecoming stronger. The above factors continuously enhance the connotation of "highcost-effectiveness" in the Yiwu market, and the comprehensive competitiveness of the Yiwumarket in the international market is constantly strengthening.Under the support of efficiency improvement and prosperity, the traditional business of theCompany reflects certainty and elasticity, while multiple positive factors have come to theinnovative business, which presented a rapid development trend.(I) Transformation and upgrading, continuously enhancing market development resilience
1. The vitality of entities is continuously activated. On improving business entities andattracting buyers, the Company deepened the action of strengthening business entities andattracting global buyers, and gathered more dynamic and cohesive business entities and buyers.As of the end of the reporting period, with Yiwu Small Commodity City Business School as thecarrier, over 12000 business entities were trained through chairman lectures, trade salons,online training camps, and other forms. Over 500000 buyers were attracted through businessinvestment, activity attraction, platform invitation, and other methods.
2. Further promotion of product innovation. The Company deepened the action of bringingdesign and standards in market , and new industry incubation action, focusing on productupgrading and industry incubation and cultivation, and continuously improving productcompetitiveness and industry vitality. As of the end of the reporting period, in the "Yiwu ChinaCommodities City" Cup International Small Commodity Creative Design Competition, over 5000pieces of works have been collected; The national level service industry standardization pilot of"bringing standards in market" by Zhejiang China Small Commodity City has been fully launched;The Second District East New Energy Product Market of the International Trade City hasofficially opened, gathering over 260 business entities and taking the lead in cultivating newenergy as an independent industry in the national commodity market.
3. Speeding up the construction of the digital market. Using the Second District East Marketof the International Trade City as a pilot project to create a digital market model, the Companycompleted new digital infrastructure such as the 10 Gigabit Network, AI interactive screen, anddigital virtual human, and achieve functions such as business consulting, market navigation, AIflow statistics, and digital market cockpit; At the same time, the construction of the Global DigitalTrade Center, a core symbol project of the sixth generation market, is fully underway, and thedigital transformation of traditional markets is steadily advancing, creating a new generationmarket that leads the global trade trend.
Global Digital Trade Center (based on global small commodity trade, leading future trade
trends from three dimensions: digital new infrastructure, smart operations, and digital
empowerment)
4. Innovation and improvement of exhibition and trade formats. Focusing on strengtheningexhibition venue linkage, the Company holds domestic exhibitions, overseas exhibitions,professional exhibitions, and industry exhibitions to further expand new exhibition and trademodels. As of the end of the reporting period, 26 domestic exhibitions such as simulation flower,cultural and tourism fair and China-Chic exhibition were held, attracting more than 500000
buyers; 50 companies were organized in group to participate in three overseas exhibitions;During the reporting period, the net profit of the Company's exhibition sector experienced anexplosive YoY growth. A total of 25 events were held, including the Marketplace Good ProductsShopping Festival and the Joint Exhibition of the World Yiwu People Conference, attracting988000 buyers.
5. Expansion and quality improvement of the hotel sector. The hotel sector of the Companyis based on the local and supporting market, strengthens resource integration and qualityimprovement, promotes digital, professional, and branded management, establishes the Yindutavern brand, with the goal of creating a business and tourism culture that integrates "localcharacteristics and global style", and strives to become a characteristic service brand of the"World Capital of Small Commodities", promoting the Yindu brand to become a comprehensivehotel management company with high brand influence in Zhejiang region. The Company hasfour major brand sequences: "Yindu · Jia" luxury resort hotel brand, "Yindu · Hua" high-endbusiness hotel brand, "Yindu · Ya" super mid-range lifestyle hotel brand, and "Yindu · Jing" smalland micro boutique hotel brand. The eight mid to high end hotels are located in various corelocations of Yiwu City, serving over 2 million global merchants every year. During the reportingperiod, the flow in the Yiwu market increased significantly month on month, with a large numberof overseas purchasers continuously purchasing from the Yiwu market. Many overseaspurchasers booked rooms for 10 to 15 nights, and combined with the promotion of exhibitions,the Yiwu hotel industry showed an explosive growth trend. The Company's hotels seized theopportunity to comprehensively promote centralized procurement, cost reduction, and upgradethe membership system through the integration of online channels, achieving rapid growth in thehotel business scale. From January to June 2023, the hotel sector of the Company has arevenue of RMB 217 million, surpassing that in the same period in 2019. Among them, the"Fingertip Canteen" in the First District of the International Trade City built by the Companyofficially opened in May. With precise positioning, strengthened operation, and outstandingservice "cost-effectiveness", it brings convenient, high-quality, and diverse food supply to marketoperators and buyers, and thus is widely welcomed. The revenue of the opening monthexceeded RMB one million, and the daily customer flow exceeded 1300 people.(II) Deepening innovation and continuously improving the digital trade ecosystem
1. Upgrading and optimization of digital platforms. The Company upgraded the Chinagoodsdigital trade service platform and expand functions such as digital marketing, trafficempowerment, and order matching. As of the end of the reporting period, there were 305000new registered buyers on the Chinagoods platform, totaling 3.605 million. The GMV of theChinagoods platform in the first half of this year was RMB 32 billion, a YoY increase of 210.83%.The Big Data Company (the operating entity of the Chinagoods platform) achieved a net profit ofRMB 46.3989 million in the first half of the year, compared to RMB -5.5787 million in the sameperiod of the previous year. Despite the increased investment in technology research and
development by the Chinagoods platform in the first half of the year, the net profit still achievedsignificant growth.6 national websites for Spain, Dubai, Colombia, and other countries were opened. TheCompany cooperated with platform companies such as Alibaba, Baidu, and JD to build the "YiwuSmall Commodity City Digital Pavilion" and establish a fourth-party service network.
2. Deepening and expanding the application of digital trade. The Company deepened theoperation of the Caigoubao industry belt project, to assist in the upgrading of marketprocurement trade, and better serve the free and convenient participation of small andmedium-sized entities in international trade. As of the end of the reporting period, the new orderamount placed on Caigoubao exceeded RMB 1 billion, with an accumulated amount of RMB
2.554 billion and a total of 2800 registered foreign trade enterprises; The Caigoubao industry beltproject has established a performance service system of "comprehensive warehouse in Yiwu +sub-warehouses across China", with 85 suppliers stationed in the physical market exhibition halland 4 warehousing service franchisees recruited.
3. Strengthening the empowerment of digital finance. The Company actively invests ininternet payment licenses and factoring licenses, utilizing functions such as logistics, overseaswarehouses, and supply chain financial services on the Chinagoods platform to form a logisticsclosed loop; the Company also utilizes licenses such as payment, credit consulting, factoring,and other products such as Alipay and Jiehuibao to form a closed loop of payment flow and fundflow. "Three Flow Convergence" simplifies trade links, improves trade efficiency, helps Chinesesmall commodities go overseas and improves the ecosystem of trade performance.
As of the end of the reporting period, the Company has established cooperation with morethan 400 banks worldwide, covering more than 100 countries and regions, with 20 mainstreamcurrencies for international payments. Since the official launch of the Company's own paymentbrand "Yiwu Pay" on February 21, 2023, it has served more than 15000 cross-border RMBbusiness customers and had settled cross-border funds exceeding RMB 1 billion.
Yiwu Pay's future global layout (the Company's cross-border RMB business goal is toachieve a GMV of over USD 10 billion within 3-5 years, making Yiwu Pay a globally influential
payment brand)(III) Open and improve to make continuous optimization of trade performance services
1. Open the platform and improve the operation. The Company coordinates the recruitmentof entities, improves business formats, bravely becomes the "main battlefield" of imports, buildsa bonded "ecosystem", and strives to create a highland for the import industry. As of the end ofthe reporting period, Yiwu Comprehensive Bonded Zone has attracted a total of 14 topcross-border e-commerce platforms; sped up the construction of three major industrialecological clusters: cross-border e-commerce imports, high-end food processing, andnon-ferrous metal distribution; and realized an import volume of RMB 16.956 billion.
2. Open network and make improvement in both quality and scale. The Companyaccelerates the improvement in both quality and scale of overseas warehousing and logisticsfacilities, actively introduces advantageous resources, and strengthens the basic support formarket performance services. As of the end of the reporting period, there were 29 new overseaswarehouses, totaling 189 accumulatively, with an area of over 1.5 million square meters,covering 48 countries; Dubai Yiwu China Commodities City was awarded the "Class I ParkAmong Provincial Overseas Economic and Trade Cooperation Parks in 2022"; Zhijie Yuangangpromoted the construction of a digital cross-border logistics third-party delivery platform, andlaunched digital logistics service products such as "Jihepai" and "Xiaokepai". From January toJuly 2023, the shipment of Zhijie Yuangang was 10585TEU, with a single month shipment of3438TEU in June. The quarter-over-quarter growth rate of active customers was 25% in the firstquarter and 87% in the second quarter of 2023; the quarter-over-quarter growth rate of servedcontainer volume was 45% in the first quarter and 164% in the second quarter of 2023. ZhijieYuangang has expanded its business scope to 79 countries, 24 routes, and 154 destinationports worldwide.
3. Innovation and expansion of supply chain. The Company has been invested inself-operated trade since 2019. After more than two years of market exploration and customerdevelopment and accumulation, the self-operated trade business had experienced explosivegrowth by the second half of 2021. On February 27, 2023, the Company signed a strategiccooperation agreement with Shanghai Waigaoqiao Group Co., Ltd. In this strategic cooperation,both parties will fully utilize their respective advantages in accordance with the principles of"making respective advantages complementary to each other, win-win cooperation, and mutualbenefit", actively respond to the national initiative of accelerating the development of "newforeign trade formats, new models, and new infrastructure" and actively developing the "SilkRoad E-commerce", to serve the new pattern of domestic and international dual circulation,focus on the integration of domestic and foreign trade and the integration of customs specialsupervision zones, enhance the digitalization, refinement, specialization, and global resource
allocation capabilities of both parties in the supply chain service field of import and exportmarkets, and jointly create a digital service ecosystem for the entire trade supply chain thatdeeply integrates online and offline with import and export.
As of the end of the reporting period, a trade revenue of RMB 2.838 billion was achieved, aYoY increase of 18.2%. Newly added 2685 good foreign trade product SKUs; a total of over 1600core suppliers and 9000 SKUs of core products have been screened for "Good Products in aPackage".
Major changes in the Company's business conditions during the reporting period, andevents occurring during the reporting period that have a major impact on the Company'sbusiness conditions and are expected to have a major impact in the future
□Applicable √Not applicable
IV. Operating status during the reporting period(i) Analysis of main business1 Analysis of the changes to the items in the financial statement
Unit: RMB
Item | Amount in the current report period | Amount in the same report period of the previous year | YoY change (%) |
Operating revenue | 5,160,991,043.25 | 4,207,027,616.46 | 22.68 |
Operating cost | 3,582,510,450.35 | 3,159,298,146.77 | 13.40 |
Sales expenses | 77,763,668.49 | 93,282,063.73 | -16.64 |
Administrative expenses | 267,899,068.22 | 226,571,368.27 | 18.24 |
Financial expenses | 53,603,900.89 | 62,891,935.45 | -14.77 |
R&D expenses | 10,524,249.20 | 5,708,047.58 | 84.38 |
Net cash flow from operating activities | 143,247,195.78 | -666,587,333.62 | Not applicable |
Net cash flow from investing activities | -505,539,125.40 | -472,262,132.79 | Not applicable |
Net cash flow from financing activities | 543,680,426.49 | 603,770,561.36 | -9.95 |
Reason for the change in R&D expenses: R&D expenses increased by 84.38% YoY, mainly dueto the R&D investment in the current period of Kuaijietong Payment Service Co., Ltd., which wasacquired in the previous year.
2 Details of material changes to the business types, the components or sources of
profits of the Company in this reporting period
□Applicable √Not applicable
(ii) Material changes to profits caused by non-main businesses
□Applicable √Not applicable
(iii) Analysis of assets and liabilities
√Applicable □Not applicable
1. Assets and liabilities
Unit: RMB
Item | Amount at the end of the current period | % of total assets at the end of the current period | Amount at the end of the same period of 2020 | Percentage of the closing balance of the previous year to the total assets (%) | Percentage of difference between the closing balance of the current period and the closing balance of the previous year (%) | Reasons for change |
Prepayments | 917,588,009.93 | 2.75 | 606,057,048.25 | 1.89 | 51.40 | Mainly due to the growth of the product sales and the increase in advance payment |
Other receivables | 87,930,115.50 | 0.26 | 419,398,092.62 | 1.31 | -79.03 | Mainly due to the recovery of financial assistance from joint ventures |
Development expenses | 14,588,967.82 | 0.04 | 4,660,995.87 | 0.01 | 213.00 | Due to the increase in R&D investment |
Short-term borrowings | 1,809,722,500.02 | 5.42 | 1,059,287,361.11 | 3.30 | 70.84 | Due to the increase in short-term borrowings |
Accounts payable | 475,316,014.07 | 1.42 | 1,191,314,404.15 | 3.71 | -60.10 | Mainly due to the payable market and supporting project construction funds |
Payroll payable | 119,585,250.83 | 0.36 | 183,135,314.51 | 0.57 | -34.70 | Mainly due to the distribution of merit pay for 2022 |
Non-current liabilities due within one year | 134,947,210.88 | 0.40 | 86,852,293.01 | 0.27 | 55.38 | Mainly due to the transfer-in of long-term loans maturing within one year |
Long-term borrowings | 648,185,725.67 | 1.94 | 404,500,000.00 | 1.26 | 60.24 | Due to the Increase in long-term |
borrowings | ||||||
Deferred income | 161,143,393.10 | 0.48 | 103,582,129.94 | 0.32 | 55.57 | Mainly due to receiving investment incentives for the commencement of cross-border e-commerce logistics park project in this period |
Deferred income tax liabilities | 127,885,691.87 | 0.38 | 95,042,722.31 | 0.31 | 34.56 | Mainly due to the recognition of deferred income tax liabilities for use rights assets in the current period |
Other statementsNil
2. Overseas assets
√Applicable □Not applicable
(1) Scale of assets
Among them: offshore assets were RMB 548 million, accounting for 1.64% of the total assets.
(2) Explanation one the high proportion of offshore assets
□Applicable √Not applicable
Other statementsNil
3. Encumbrances on major assets as of the end of the reporting period
√Applicable □Not applicable
Unit: RMB
Item | June 30, 2023 | 2022 |
Cash and cash equivalents | 11,461,574.15 | 10,098,029.66 |
Inventory | 8,925,585.72 | - |
Long-term equity investment | 102,918,559.00 | 102,918,559.00 |
Other non-current financial assets | 621,447,424.37 | 621,447,424.37 |
Other current assets | 420,922,188.51 | 367,484,914.87 |
Total | 1,165,675,331.75 | 1,101,948,927.90 |
1. As of June 30, 2023, bank deposits with a book value of RMB 61.05 (December 31, 2022:
RMB 60.97) were restricted for ownership or use rights due to being as security deposits forobtaining commercial housing mortgage loan. As of June 30, 2023, bank deposits with a bookvalue of RMB 371288.89 (December 31, 2022: RMB 0.00) were used as funds for engineeringsupervision accounts, with restricted ownership or use rights. As of June 30, 2023, bank depositswith a book value of RMB 7,220,000.00 (December 31, 2022: RMB 7,220,000.00) were used asperformance bonds for civil air defense projects under construction with restricted ownership oruse rights. As of June 30, 2023, bank deposits with a book value of RMB 3,870,224.21(December 31, 2022: RMB 2,877,968.69) were used as fast payment business risk deposits withrestricted ownership or use rights.
2. As of June 30, 2023, the inventory with a book value of RMB 8,925,585.72 (December 31,2022: RMB 0.00) was judicially seized by the court due to litigation.
3. As of June 30, 2023, long-term equity investments with a book value of RMB102918559.00 (December 31, 2022: RMB 102918559.00) and other non-current financial assetswith a book value of RMB 621447424.37 (December 31, 2022: RMB 621447424.37) were frozenby the Shanghai Public Security Bureau.
3. As of June 30, 2023, the payment business reserve fund with a book value of RMB420,922,188.51 (December 31, 2022: RMB 367,484,914.87) was established by the Companyin accordance with the "Administrative Measures for Payment Services of Non-financialInstitutions" and "Measures for the Custody of Customer Reserve Funds of Payment Institutions"Bank special deposit account. The scope of funds stored and received by the Company throughthe customer reserve account includes: funds received from bank card acquiring business,third-party payment convenience service business, credit card repayment business, creditpayment settlement business, and other part of the Company's business.
4. Other statements
□Applicable √Not applicable
(iv) Analysis of investments
1. Overview of external equity investment
√Applicable □Not applicable
As of the end of June 2023, the external investment amount was RMB 9,107.0687 million(including trading financial assets of RMB 51.611 million, long-term equity investment of RMB7,002.8608 million, other equity instrument investment of RMB 579.4743 million, and othernon-current financial assets of RMB 1,473.1226 million), an increase of RMB 1,011.7564 million,or 12.50%, from RMB 8,095.3123 million (including trading financial assets of RMB 62.331million, long-term equity investment of RMB 6,033.4729 million, other equity instrumentinvestment of RMB 499.2008 million, and other non-current financial assets of RMB 1,500.3076million) at the end of the previous year. The main changes were as follows:
I. Trading financial assets decreased by RMB 10.72 million from the end of the previousyear, due to the redemption of RMB 3.5 million in bank wealth management, the sale of shares ofDongfang International Entrepreneurship Co., Ltd., and a decrease of RMB 7.22 million in fairvalue changes.
II. Long-term equity investment increased by RMB 969.3879 million from the end of theprevious year, due to:
1. Recovering the investment principal of RMB 50 million from Yiwu Hongyi EquityInvestment Fund Partnership Enterprise (Limited Partnership).
2. The net increase of RMB 1019.3879 million in the accrued income by equity method andother comprehensive income . Mainly due to the investment income of joint ventures, includingRMB 859.624 million from Yiwu Guoshen Shangbo Property Co., Ltd., RMB 123.6073 millionfrom Shangcheng Property, and RMB 52.1737 million from Chouzhou Financial Leasing.
III. Other equity instrument investments increased by RMB 80.2735 million YoY, due tochanges in the fair value of the held shares of Shenwan Hongyuan Group Co., Ltd.
IV. Other non-current financial assets decreased by RMB 27.1850 million YoY, which wasdue to the liquidation and withdrawal of RMB 17.8791 million from the investment in YiwuShanyue Equity Investment Partnership (Limited Partnership). The income from the change inthe fair value of other non-current financial assets was RMB -9.3059 million.
(1).Major equity investments
□Applicable √Not applicable
(2).Major non-equity investments
√Applicable □Not applicable
Unit: RMB10,000
Item | Project amount | Progress | Investment during current period Amount | Cumulative actual investment amount . |
The Yiwu Comprehensive Bonded Zone Project | 624,250.00 | 92% of the total project quantity has been completed in the processing park southern zone project; 95% of indoor decoration work has been completed; 95% of installation work has been completed; 90% of the installation of exterior wall windows has been completed; the excavation and backfilling of the pipeline have been basically completed, and the construction of landscaping work has been started; the power supply work for the factory area has been completed. | 3,448.83 | 294,018.88 |
Logistics Park S2 | 108,000.00 | Fully roofed, 75% of the masonry work completed, and warehouse 3 and warehouse 4 passed the acceptance of main structure. | 8,169.97 | 31,703.87 |
Logistics Park S3 | 132,000.00 | Fully roofed, 75% of the masonry work completed, and warehouses 1, 3, 4, and 5 passed the acceptance of the main structure. | 5,599.45 | 35,999.50 |
Yiwu Digital Trade Industrial Park | 39,579.00 | Preparation work was carried out before acceptance of all buildings in the southern zone; the main structure of the northern zone has been fully roofed, 76% of the indoor installation work has been completed as scheduled, and the installation of the outdoor loop has begun to be arranged. | 1,072.87 | 16,887.94 |
Yiwu International Digital Logistics Market | 113,600.00 | 50% of the total project has been completed, in which the main structures of warehouses 1, 2, 4, 5 and the comprehensive building have been roofed, and four floors of warehouses 3 and 6 have been completed. | 24,597.87 | 36,200.11 |
Global Digital Free Trade Center | 832,082.00 | The underground main structure of the first phase project (hotel plot) has been completed, with 33% of the above-ground main structure completed, and approximately 29.3% of the total contract quantity completed; the construction unit of the first bid section of the second phase project (comprehensive plot) entered the site to build temporary facilities, and the bidding announcement was made for the general contracting of the second bid section. | 12,103.48 | 19,291.30 |
(3).Financial assets measured with fair value
√Applicable □Not applicable
Unit: RMB10,000
Category of assets | Opening balance | Profits and losses from changes in fair value in the current period | Cumulative fair value changes included in equity | Current provision for impairment | Current purchase amount | Sale/redemption amount in current period | Other changes | Closing balance |
Held-for-trading financial assets | 6,233.10 | 212.40 | - | - | 2.11 | 1,286.51 | - | 5,161.10 |
Other equity instruments investment | 49,920.08 | - | 1,938.67 | - | - | - | 8,027.35 | 57,947.43 |
Other non-current financial assets | 150,030.76 | -930.59 | - | - | - | 1,787.91 | - | 147,312.26 |
Total | 206,183.94 | -718.19 | 1,938.67 | - | 2.11 | 3,074.42 | 8,027.35 | 210,420.79 |
Securities Investment
√Applicable □Not applicable
Unit: RMB10,000
Securities | Security code | Security abbreviation | Initial investment cost | Source of funds | Opening book value | Profits and losses from changes in fair value in the current period | . Cumulative fair value changes included in equity | Current purchase amount | Sales amount in current period | Profits and losses from investment in current period | Closing book value | Accounting item |
Stocks | / | New shares | - | Self-owned funds | - | - | - | 2.11 | 2.11 | 1.36 | - | Held-for-trading financial assets |
Stocks | 000166 | Shenwan Hongyuan | 55,362.54 | Self-owned funds | 49,920.08 | - | 1,938.67 | - | - | - | 57,947.43 | Other equity instruments investment |
Stocks | 600278 | Oriental Venture | 5,000.00 | Self-owned funds | 2,365.16 | 305.83 | - | - | 1,027.84 | 175.01 | 1,643.15 | Held-for-trading financial assets |
Stocks | 833979 | Tiantu | 15,519.21 | Self-owned | 4,773.97 | -930.59 | - | - | - | - | 3,843.38 | Other |
Investment | funds | non-current financial assets | ||||||||||
Total | / | / | 75,881.75 | / | 57,059.21 | -624.76 | 1,938.67 | 2.11 | 1,029.95 | 176.37 | 63,433.96 | / |
Explanation of securities investment
□Applicable √Not applicable
PE investment
√Applicable □Not applicable
The book value of private equity fund investments during this reporting period was RMB 1,224.6583 million, a decrease of RMB 17.8791 millionfrom RMB 1,242.5374 million at the end of the previous year, which was due to the liquidation and withdrawal of RMB 17.8791 million from theinvestment in Yiwu Shanyue Equity Investment Partnership (Limited Partnership) in this period.
Derivatives investment
□Applicable √Not applicable
(v) Major sales of assets and equity
□Applicable √Not applicable
(vi) Analysis of major subsidiaries and associates
√Applicable □Not applicable
Unit: RMB10,000
company name | Business | Registered capital | Total assets | Net assets | Net profits |
Yiwu China Commodities City Financial Holdings Co., Ltd. | Enterprise's own capital investment, asset management, investment consulting services, investment management services | 400,000.00 | 279,308.32 | 262,017.82 | -316.36 |
Haicheng Yiwu China Commodities City Investment Development Co., Ltd. | Industry investment, investment management, property service, market development and operation, market auxiliary service, real estate development, sale and lease, design, production and agency of domestic advertising, and operation and management of parking garages | 60,000.00 | 200,087.01 | -100,401.78 | -5,562.04 |
Yiwu Shangbo Yuncang Enterprise Management Co., Ltd. | Enterprise management; property management, etc. | 30,000.00 | 89,740.61 | 31,311.57 | -1,076.72 |
Yiwu Commodities City Gonglian Property Co., Ltd. | Real estate development and sale | 20,000.00 | 16,247.87 | 15,718.55 | -56.49 |
Kuaijietong Payment Service Co., Ltd. | Internet payment service | 18,000.00 | 61,038.81 | 13,044.05 | -572.02 |
Yiwu Xingchen Enterprise Management Co., Ltd | R&D of computer and multimedia software | 15,000.00 | 269,467.70 | 75,806.27 | -13.98 |
Yiwu China Commodities City Import and Export Co., Ltd. | Domestic trade and international trade | 10,000.00 | 99,073.86 | 4,099.00 | -1,676.63 |
Yiwu China Commodities City Big Data Co., Ltd. | Internet data services; professional design services; intelligent control system integration; computer information technology development, technical consulting, technical services, technology transfer, etc. | 10,000.00 | 39,887.42 | 16,933.43 | 4,639.89 |
Yiwu China Commodities City Supply Chain Management Co., Ltd. | Supply chain management service | 10,000.00 | 16,589.16 | 6,145.64 | -664.21 |
Zhejiang Yiwugou E-commerce Co., Ltd. | Computer software, multimedia technologies, computer network and application, and wholesale & retail | 10,000.00 | 14,737.46 | 11,408.92 | 1,055.64 |
CCCP | Real estate development and sale | 500,000.00 | 1,857,068.88 | 645,810.35 | 26,262.14 |
Yiwu Hongyi Equity Investment Fund Partnership (limited partnership) | Investment management, equity investment, asset management and investment consulting | 200,100.00 | 181,717.75 | 181,692.29 | 720.44 |
Zhejiang Chouzhou Financial Lease Co., Ltd. | Financial lease service, and transfer of financial lease assets | 100,000.00 | 1,924,201.56 | 208,222.81 | 20,066.83 |
Yiwu Shanglv Investment Development Co., Ltd. | Industry investment, investment management, property service, operation and management of parking garages, business marketing planning, operation and management consulting, and operation and management of shopping malls | 80,000.00 | 135,787.39 | 88,325.38 | 4,168.51 |
Pujiang Lvgu Property Co., Ltd. | Real estate development and sale | 70,000.00 | 132,327.94 | 74,617.45 | -1,831.78 |
Zhijie Yuangang | International cargo transportation agency by sea; international cargo transportation agency by air; international cargo transportation agency by land; domestic cargo transportation agency; domestic shipping agency; general cargo warehousing services, etc. | 55,556.00 | 47,156.65 | 42,838.22 | -2,654.82 |
Yiwu Rongshang Property Co., Ltd. | Real estate development and sale | 10,204.08 | 13,971.63 | 13,971.57 | 0.08 |
Yiwu Chuangcheng Property Co., Ltd. | Real estate development and sale | 8,333.33 | 74,853.12 | 12,967.82 | -2,057.65 |
Yiwu Guoshen Shangbo Property Co., Ltd. | Real estate development, sale and lease; real estate brokerage service, interior decoration service; and landscaping service | 4,081.63 | 491,211.15 | 191,886.22 | 175,429.06 |
(vii) Structured entities controlled by the Company
□Applicable √Not applicable
V. Other disclosure matters(i) Potential risks
√Applicable □Not applicable
1. Macroeconomic fluctuation risk. The profitability of the Company's main businesses suchas market operations, hotel exhibitions, and product sales is significantly correlated with themacroeconomic cycle. If global economic growth is sluggish and trade volume shrinks, it will leadto a decrease in the overall prosperity of the Yiwu small commodity market, which will have anegative impact on shop leasing and related businesses.
2. Risk of new business development being short of expectations. The commodity salesbusiness is still in the stage of expanding scale and maintaining channels, and the gross profitmargin of this business is still low in the short term. At the same time, the Company is currentlytransitioning to an international trade comprehensive service provider. If the profitability of thenew business falls short of expectations, it will lower the Company's comprehensive gross profitmargin level.
3. Risk of insufficient reserves of talents. With the acceleration of market transformation andthe expansion of the Company’s business, and with the expansion of international trade,warehousing and logistics, supply chain, overseas development, information data, industrialinvestment, and business operations, the Company may face the risk of insufficient reserves ofprofessional talents and inter-disciplinary talents.
4. External uncertainty. International political conflicts have caused increased uncertainty ininternational trade, and the development of global market trade is more complicated and severethan before; new technologies are accelerating to breed new opportunities, and new trademodels and new formats are constantly emerging.
(ii) Other disclosure matters
□Applicable √Not applicable
Section IV. Corporate GovernanceI. General meeting of shareholders
Session of meeting | Date | Designated website on which the resolution is published | Date of disclosure of the resolution | Resolution of the meeting |
2023 First Provisional General Meeting of Shareholders | January 13, 2023 | www.sse.com.cn | January 14, 2023 | See the resolution notice for details |
2022 Annual General Meeting of Shareholders | May 5, 2023 | www.sse.com.cn | May 6, 2023 | See the resolution notice for details |
The preferred shareholders whose voting rights had been restituted requested to anextraordinary general meeting of shareholders
□Applicable √Not applicable
Statement on shareholders’ meetings
√Applicable □Not applicable
1. The 2023 First Provisionl General Meeting of Shareholders reviewed and approved theProposal on the Redemption of the Remuneration of Certain Directors of the Company in 2021.
2. The 2022 Annual General Meeting of Shareholders deliberated and approved the 2022Work Report of the Board of Directors, 2022 Work Report of the Board of Supervisors, 2022Annual Report and Summary, 2022 Financial Statement Report, 2023 Financial Budget Report,2022 Annual Profit Distribution Plan, Proposal on Renewing the Appointment of AccountingFirms, Proposal on the Proposed Issuance of Debt Financing Instruments in the Next 12 Months,Proposal on Investment in the Construction of Yiwu Global Digital Trade Center.
II. Changes in directors, supervisors and senior officers of the Company
√Applicable □Not applicable
Name | Title | Change |
Huang Xiaoying | Vice general manager | Hiring |
Statement on the changes in directors, supervisors and senior officers of the Company
□Applicable √Not applicable
III. Plan for profit distribution or capital reserve into stock capitalSemi-annual proposals on profits distribution and capitalization of capital reserve
Whether to distribute profits or capitalize the capital reserve | No |
IV. Incentive stock option plans, employee stock ownership plans and other employee
incentives granted by the Company and the impact thereof(i) Related equity incentive matters that have been disclosed in the provisionalannouncement without progress or change in subsequent implementation
√Applicable □Not applicable
Overview of the matter | Query website |
On October 23, 2020, the twenty-third meeting of the eighth session of the Company's board of directors passed the Proposal on the Company's 2020 Restricted Stock Incentive Plan (Draft) and Its Summary, Proposal on the Measures for the Evaluation and Management of the Implementation of the Company's 2020 Restricted Stock Incentive Plan, Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle Issues Related to Equity Incentives. The independent directors of the Company issued relevant independent opinions. On October 23, 2020, the sixth meeting of the eighth board of supervisors of the Company deliberated and approved the Proposal on the Company's 2020 Restricted Stock Incentive Plan (Draft) and its Summary, The Proposal on the Implementation Evaluation and Management Measures for the Company's 2020 Restricted Stock Incentive Plan, Proposal on Verification of the List of Incentive Objects of the Company's 2020 Restricted Stock Incentive Plan. The board of supervisors issued relevant verification opinions. Independent financial consultants, lawyers and other intermediary agencies issued corresponding opinions. | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on October 24, 2020. |
On November 18, 2020, it received the Approval for Approving Zhejiang China Commodities City Group Co., Ltd. to implement the 2020 restricted stock incentive plan issued by the State-owned Assets Supervision and Administration Office of the People's Government of Yiwu City, forwarded by Yiwu China Commodities City Holdings Ltd. (Yiwu SASAOF〔2020〕51). | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on November 20, 2020. |
From November 20, 2020 to November 29, 2020, the list of incentive objects and positions of the 2020 restricted stock incentive plan were internally publicized. Within the time limit of the publicity, the board of supervisors of the Company did not receive any objection from any organization or individual or bad feedback, without feedback record. On November 30, 2020, the Board of Supervisors of the Company issued the Examination Opinions and Public Statement of the Board of Supervisors on the List of Incentive Objects of the Company's 2020 Restricted Stock Incentive Plan. | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on December 1, 2020. |
On December 10, 2020, the Company's 2020 Fifth Provisional General Meeting of Shareholders deliberated and approved the “Proposal on the ‘Company's 2020 Restricted Stock Incentive Plan (Draft)’ and Summary”, the “Proposal on the “Measures of Assessment and Management of Implementation of ‘Company’s 2020 Restricted Stock Incentive Plan’”, and the “Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Deal with Equity Incentive Related Matters”, and disclosed the “Self-examination Report on the Trades of Company’s Stocks by Insiders of Company’s 2020 Restricted Stock Incentive Plan”. | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on December 11, 2020. |
On December 11, 2020, the twenty-sixth meeting of the eighth session of the Company's board of directors passed the Proposal on Granting Restricted Shares to Incentive Objects for the First Time. The independent directors of the Company issued relevant independent opinions. On December 11, 2020, the seventh meeting of the Company's eighth board of supervisors passed the Proposal on Granting Restricted Stocks to Incentive Objects for the First Time. The Board of Supervisors issued the Verification Opinions of the Board of Supervisors on Matters Related to the First Grant of the Company's 2020 Restricted Stock Incentive Plan. Independent financial consultants, lawyers and other intermediary agencies issued corresponding opinions. | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on December 12, 2020. |
On January 15, 2021, the Company received the Securities Change Registration Certificate issued by the Shanghai Branch of China Securities Depository and Clearing Co., Ltd., and the Company completed the registration of the first grant of restricted stocks to incentive objects. | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on January 19, 2021. |
On August 9, 2021, the 35th meeting of the eighth board of directors of the Company passed the "Proposal on Reserved Granting Restricted Stocks to Incentive Objects", "On Adjusting the Repurchase Price of Restricted Stocks and Repurchasing and Cancelling Some Restricted Stocks" 's proposal". The independent directors of the Company issued relevant independent opinions. On August 9, 2021, the ninth meeting of the eighth Boarder | For details, please refer to the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on August 11, 2021. |
of Supervisors of the Company passed the "Proposal on Reserved Granting Restricted Stocks to Incentive Objects", "Proposal on Adjusting the Repurchase Price of Restricted Stocks and Repurchasing and Cancelling Some Restricted Stocks" ". The Board of Supervisors issued the Verification Opinions of the Board of Supervisors on Matters Related to the Company's Reserved Grant of the Restricted Stock Incentive Plan in 2020. | |
On November 4, 2021, the Company received the Securities Change Registration Certificate issued by the Shanghai Branch of China Securities Depository and Clearing Co., Ltd., and the Company completed the registration of the reserved grant of restricted stocks to incentive objects. | For details, see the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on November 6, 2021. |
On November 17, 2021, the Company applied to China Securities Depository and Clearing Co., Ltd. Shanghai Branch for repurchase and cancellation of restricted stocks that have been granted but not yet lifted by some resigned employees. On November 30, 2021, the Company received the "Securities Change Registration Certificate" issued by China Securities Depository and Clearing Co., Ltd. Shanghai Branch, and the Company has completed the registration of the restricted stock repurchase and cancellation. | For details, see the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on November 26, 2021. |
On July 19, 2022, the fifty-first meeting of the eighth board of directors of the Company reviewed and approved the "Proposal on Adjusting the Repurchase Price of Restricted Stocks and the Repurchase and Cancellation of Some Restricted Stocks", and the independent directors of the Company issued a statement on this independent opinion expressing consent. On July 19, 2022, the 14th meeting of the 8th Supervisory Committee of the Company passed the "Proposal on Adjusting the Repurchase Price of Restricted Shares and Repurchasing and Cancelling Some Restricted Shares". | For details, see the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on July 20, 2022. |
On October 8, 2022, the Company applied to China Securities Depository and Clearing Co., Ltd. Shanghai Branch for repurchase and cancellation of restricted stocks that have been granted but not yet lifted by some resigned employees. On | For details, see the Company's announcement on the website of the Shanghai Stock Exchange |
October 21, 2022, the Company received the "Securities Change Registration Certificate" issued by China Securities Depository and Clearing Co., Ltd. Shanghai Branch, and the Company has completed the registration of the restricted stock repurchase and cancellation. | (www.sse.com.cn) on October 21, 2022. |
On December 28, 2022, the sixth meeting of the ninth session of the board of directors of the Company passed the "Proposal on the achievements of the first part of the 2020 Restricted Stock Incentive Plan to grant part of the first unlocking period to unlock the selling restrictions". The independent directors of the Company have issued independent opinions expressing agreement. On December 28, 2022, the second meeting of the Company's ninth board of supervisors passed the "Proposal on the Achievement of the First Unlocking Period of the First Unlocking Period of the First Grant of the 2020 Restricted Stock Incentive Plan". The Board of Supervisors issued the "Verification Opinion on the Achievement of the Unlocking Conditions for the First Unlocking Period of the Part of the First Grant of the 2020 Restricted Stock Incentive Plan". | For details, see the Company's announcement on the website of the Shanghai Stock Exchange (www.sse.com.cn) on July 20, 2022. |
(ii) Incentives that have not been disclosed in the temporary announcements or had
further progressesIncentive stock option
□Applicable √Not applicable
Other statements
□Applicable √Not applicable
Employee stock ownership plans
□Applicable √Not applicable
Other incentives
□Applicable √Not applicable
Section V. Environmental and Social Responsibilities
I. Environmental issues(i) Description of the environmental protection status of the Company and its mainsubsidiaries that are key pollutant discharging units announced by theenvironmental protection authorities
□Applicable √Not applicable
(ii) Description of the environmental protection status of the companies other than thekey pollutant discharging units
□Applicable √Not applicable
(iii) Further progress or change of the environmental issues disclosed during thereporting period
□Applicable √Not applicable
(iv) Relevant information that is conducive to protecting ecology, preventing pollution,and fulfilling environmental responsibilities
□Applicable √Not applicable
(v) Measures taken to reduce their carbon emissions during the reporting period and the
effect
√Applicable □Not applicable
During the reporting period, the Company's Yiwu International Trade City used clean energy forpower generation, reducing emissions of approximately 11,523 tons of carbon dioxideequivalent.
II. Status of consolidation and expansion of the results of poverty alleviation, ruralrevitalization and other specific work
□Applicable √Not applicable
Section VI. Significant Matters
I. Fulfillment of commitments(i) Commitments made by the actual controller, shareholders, affiliates and acquirer of
the Company, the Company itself and other related parties during the reporting periodor as of the reporting period
□Applicable √Not applicable
II. Non-operating capital occupation by controlling shareholders and other related
parties during the reporting period
□Applicable √Not applicable
III. Illegal guarantees
□Applicable √Not applicable
IV. Information about audit on the semi-annual report
□Applicable √Not applicable
V. Changes and handling of matters involved in modified audit opinion in the previous year’s annual report
□Applicable √Not applicable
VI. Matters relating to bankruptcy and reorganization
□Applicable √Not applicable
VII. Material litigations and arbitrations
√There were material litigations or arbitrations in current reporting period □No material litigations or arbitrations in current reporting period
(i) Litigations and arbitrations have been disclosed in the temporary announcements and have had no further progresses
□Applicable √Not applicable
(ii) Litigations and arbitrations that have not been disclosed in the temporary announcements or have had further progresses
√Applicable □Not applicable
Unit: RMB10,000
During the reporting period: | ||||||||
Plaintiff (claimant) | Defendant (respondent) | Party Bearing Joint Liabilities | Litigation or arbitration | Basic information of litigation (arbitration) | Value involved in litigation (arbitration) | Does the litigation (arbitration) cause estimated liabilities and the amount thereof | Status of litigation (arbitration) | Results of litigation (arbitration) and effect thereof |
The Company | Zhejiang Yiwu Chuanglian Market Investment and Management Co., Ltd., Hebei Jiangcheng Real Estate Development Co., Ltd., Handan Zheshang Yiwu China Commodities Wholesale City Co., Ltd. | Nil | Litigation | Unfair Competition Dispute [(2021) Z 0782 MC No. 6367] | 485 | No | Transferred | |
Ningxia Shenghong Construction Engineering Co., Ltd. | Shizuishan Shengyuze Asset Management Co., Ltd., Yiwu China Commodities City Supply Chain Management Co., Ltd., the Company | Nil | Litigation | Dispute over construction project construction contract [(2022) N 0202 MC No. 4273] | 430.69 | No | Judgment has been made | 1. The defendant Shizuishan Shengyuze Asset Management Co., Ltd. shall pay the outstanding project payment of RMB 3,819,617 and interest of RMB 303,211, totaling RMB 4,122,828, to the plaintiff Ningxia Shenghong Construction Engineering Co., Ltd. within 15 days after the effective date of this judgment; 2. Other litigation requests from the plaintiff Ningxia Shenghong Construction Engineering Co., Ltd. was rejected |
Ying Jianhua | The Company, third party Shenzhen Pengrun Construction | Nil | Litigation | Dispute over construction project construction contract | 836.31 | No | Mediation in progress |
Group Co., Ltd. | [(2022) Z 0782 MSQT No. 18007] | |||||||
The Company | Jingang Curtain Wall Group Co., Ltd. and Qianghuang New Materials Co., Ltd. | Nil | Litigation | Dispute over construction project construction contract [(2023) Z 0782 MSQT No. 3593] | 919.11 | No | Mediation in progress | |
The Company | Zhejiang Baoye Curtain Wall Decoration Co., Ltd. | Nil | Litigation | Dispute over construction project construction contract [(2023) Z 0782 MSQT No. 4170] | 936.36 | No | Mediation in progress | |
Hebei Construction Engineering Group Co., Ltd. | Haicheng Yiwu China Commodities City Investment Development Co., Ltd. | Nil | Litigation | Dispute over construction project construction contract (2023) L 0381 MC No. 1585 | 7,431.59 | No | Undecided |
(iii) Other statements
□Applicable √Not applicable
VIII. Information of the listed company and its directors, supervisors, senior management, controlling shareholder, and actual controller
suspected of violations of laws and regulations, penalties and rectification
□Applicable √Not applicable
IX. Credit standing of the Company and its controlling shareholder and actual controller
√Applicable □Not applicable
There was no outstanding court judgment or overdue debt of a large amount involving the Company or its controlling shareholder or actualcontroller during the reporting period.X. Material related-party transactions(i) Related-party transactions relating to regular corporate operation
1. Matters that have been disclosed in the temporary announcements and had no further progresses or changes
□Applicable √Not applicable
2. Matters that have been disclosed in the temporary announcements but had further progresses or changes
√Applicable □Not applicable
The 10th meeting of the 9th Board of Directors of the Company reviewed and approved the Proposal on Project Construction EntrustmentManagement and Related Party Transactions, and agreed to sign the Engineering Project Entrustment Management Contract with Shangbo Yungu, awholly-owned subsidiary of the Company's controlling shareholder CCCH. For details, please refer to the "Announcement on Entrusted Management ofProject Construction and Related Transactions" (L 2023-019) disclosed by the Company on the website of the Shanghai Stock Exchange(www.sse.com.cn) on May 12, 2023.
As of the end of the reporting period, the project was under construction.
3. Matters that have not been disclosed in the temporary announcements
√Applicable □Not applicable
Unit: RMB
Related counterparty | Relationship | Type of related-party transaction | Contents of related-party transaction | Pricing principle | Price of related-party transaction | Amount of related-party transaction | Percentage in the amount of similar transactions (%) | Settlement method | Market price | Reasons for the large difference between the price of the transaction and reference market price |
Yiwu China Commodities City Property Service Co., Ltd. | Subsidiary of controlling shareholder | Acceptance of labor service | Property service fee and greening maintenance fee | Market price | 98,212,858.68 | 98,212,858.68 | 80.98 | Account transfer | 98,212,858.68 | Not applicable |
Yiwu Security Service Co., Ltd. | Subsidiaries of controlling shareholder parent company | Acceptance of labor service | Security service fee | Market price | 10,038,757.30 | 10,038,757.30 | 8.28 | Account transfer | 10,038,757.30 | Not applicable |
CCCH | Controlling shareholders | Lease | Warehouses | Market price | 7,512,968.82 | 7,512,968.82 | 6.19 | Account transfer | 7,512,968.82 | Not applicable |
Yiwu China Commodities City Property Service Co., Ltd. | Subsidiary of controlling shareholder | Selling goods and providing services | Product sales and system development | Market price | 1,787,078.02 | 1,787,078.02 | 1.47 | Account transfer | 1,787,078.02 | Not applicable |
Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | Branches of the controlling shareholder parent company | Other inflow | Management service fee | Negotiated price | 1,545,161.54 | 1,545,161.54 | 1.27 | Account transfer | 1,545,161.54 | Not applicable |
CCCP | Subsidiary of controlling shareholder | Lease | Office space | Market price | 494,462.28 | 494,462.28 | 0.41 | Account transfer | 494,462.28 | Not applicable |
MDG | Controlling shareholder parent company | Other inflow | Management and license fees | Negotiated price | 428,129.58 | 428,129.58 | 0.35 | Account transfer | 428,129.58 | Not applicable |
Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | Branches of the controlling shareholder parent company | Selling goods and providing services | Product sales and washing fees | Market price | 410,332.78 | 410,332.78 | 0.34 | Account transfer | 410,332.78 | Not applicable |
Yiwu Market Development Service Center Co., Ltd. | Subsidiaries of controlling shareholder parent company | Lease | Parking lot | Market price | 320,811.73 | 320,811.73 | 0.26 | Account transfer | 320,811.73 | Not applicable |
Yiwu Shangbo Yungu Enterprise Management Co., Ltd. | Subsidiary of controlling shareholder | Lease | Office space | Market price | 292,115.22 | 292,115.22 | 0.24 | Account transfer | 292,115.22 | Not applicable |
Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | Branches of the controlling shareholder parent company | Acceptance of labor service | Meeting affair charge | Market price | 233,917.62 | 233,917.62 | 0.19 | Account transfer | 233,917.62 | Not applicable |
Total | / | / | 121,276,593.57 | 100.00 | / | / | / | |||
Return of large-value goods sales | Not applicable |
Illustration on related-party transactions | Yiwu China Small Commodity City Property Service Co., Ltd. obtained the market property service and greening maintenance contract by participating in public bidding. |
(ii) Related transactions arising from asset acquisitions or equity acquisitions and sales
1. Matters that have been disclosed in the temporary announcements and had no
further progresses or changes
□Applicable √Not applicable
2. Matters that have been disclosed in the temporary announcements but had furtherprogresses or changes
□Applicable √Not applicable
3. Matters that have not been disclosed in the temporary announcements
√Applicable □Not applicable
Unit: RMB10,000
Related party | Relationship | Type of related-party transaction | Contents of related-party transaction | Pricing principle | Book value of transferred assets | Assessed value of transferred assets | Transfer Price | Settlement method | Gains from asset transfer | The impact of transactions on the Company's operating results and financial condition | Reasons for significant differences between transaction price and book value or assessed value or market fair value |
Zhijie Yuangang | Associates | Equity transfer | Transfer of 60% equity of Yiwu Huanqiu Yida Logistics Co., Ltd | Market price | 1,264.45 | 2,412 | 2,412 | Account transfer | 1,129.10 | Not applicable | This transaction was completed through public listing |
Explanation of related transactions arising from asset acquisition and sale
For details, please refer to Note 8: Changes in the scope of consolidation
4. If any agreement on the operating results is involved, the achievement of operatingresults during the reporting period shall be disclosed
□Applicable √Not applicable
(iii) Related-party transactions arising from joint external investment
1. Matters that have been disclosed in the temporary announcements and had nofurther progresses or changes
□Applicable √Not applicable
2. Matters that have been disclosed in the temporary announcements but had furtherprogresses or changes
□Applicable √Not applicable
3. Matters that have not been disclosed in the temporary announcements
□Applicable √Not applicable
(iv) Related-party credits and debts
1. Matters that have been disclosed in the temporary announcements and had no
further progresses or changes
□Applicable √Not applicable
2. Matters that have been disclosed in the temporary announcements but had furtherprogresses or changes
□Applicable √Not applicable
3. Matters that have not been disclosed in the temporary announcements
□Applicable √Not applicable
(v) Financial business between the Company and the associated financial companies,the Company's holding financial company and the related parties
□Applicable √Not applicable
(vi) Other significant related transactions
□Applicable √Not applicable
(vii) Other
□Applicable √Not applicable
XI. Material contracts and performance thereof
1. Trusteeship, contracting and leases
□Applicable √Not applicable
2. Material guarantees fulfilled or not completely fulfilled in the reporting period
√Applicable □Not applicable
Unit: RMB10,000
External guarantees provided by the Company (excluding those provided for the subsidiaries) | |||||||||||||||
Guarantor | Relationship between the guarantor and the Listed Company | The guaranteed | Amount of guarantee | Date of guarantee (signing date of the agreement) | Guarantee Starting date | Guarantee Maturity date | Type of guarantee | Principal debts | Collateral (if any) | Is the guarantee fulfilled in full | Is the guarantee overdue | Overdue amount of the guarantee | Counter guarantees | Is it a related-party guarantee | Related Relationship |
The Company | The Company itself | Yiwu Shanglv | 7,509.22 | Dec 16, 2015 | Jul 1, 2015 | Dec 15, 2026 | Joint and several liability guarantee | Normal | Nil | No | No | Not applicable | SCO provided a counter-guarantee | Yes | Joint venture |
Hangzhou Shangbo Nanxing | Wholly-owned subsidiary | House purchaser | 473.78 | Joint and several liability guarantee | Normal | Nil | No | No | Not applicable | Not applicable | No | Not applicable | |||
Amount of guarantees made during the reporting period (excluding the guarantees provided for subsidiaries) | -1,981.56 | ||||||||||||||
Balance of guarantees at the end of the reporting period (A) (excluding the guarantees provided for subsidiaries) | 7,983.00 | ||||||||||||||
Guarantees provided by the Company for its subsidiaries | |||||||||||||||
Amount of guarantees provided for subsidiaries during the reporting period | - | ||||||||||||||
Balance of guarantees provided for subsidiaries at the end of the reporting period (B) | - |
Total guarantees provided by the Company (including those provided for the subsidiaries) | |
Total amount of guarantees (A+B) | 7,983.00 |
Ratio of the total amount of guarantees to the Company’s net assets (%) | 0.47 |
Among them: | |
Amount of guarantees provided for shareholders, actual controller and their related parties (C) | - |
Amount of guarantees provided directly or indirectly for the debtors whose debt-to-asset ratio exceed 70% (D) | - |
Portion of total amount of guarantees in excess of 50% of net assets (E) | - |
Total (C+D+E) | - |
Statement on the joint and several liability that may be assumed due to outstanding guarantees | Not applicable |
Statement on guarantees | 1. According to the resolution of the 15th Meeting of the 7th Board of Directors on July 1, 2015, the Group applied for a RMB 750 million loan with Agricultural Bank of China Yiwu Branch for Yiwu Shanglv and provided guarantees in accordance with the shareholding ratio. The guarantee method was joint liability guarantee, the highest guarantee amount was RMB 367.5 million and the guarantee term was11 years. As of June 30, 2023, Yiwu Shanglv actually borrowed RMB 153,249,486.86 (December 31, 2022: RMB 193,468,056.42) from the bank in total. According to the agreement of the guarantee contract, it assumed the guarantee liability of RMB 75,092,248.56 (December 31, 2022: RMB 94,799,347.65) for the Agricultural Bank of China Yiwu Branch. Yiwu State-owned Capital Operation Co., Ltd. provided a counter guarantee for this guarantee. 2. According to relevant regulations, before the purchaser of the commercial housing sold by the Group has obtained the property certificate, the Group shall provide the purchaser with a bank mortgage guarantee. As of June 30, 2023, the unsettled guarantee amount was RMB 4,737,833.66 (December 31, 2022: RMB 4,846,333.64). Those guarantees would be released after the issuance of the property ownership certificates and are thus little likely to incur losses. Therefore, the management believed that it was not necessary to make provision for the guarantees. |
3. Other material contracts
□Applicable √Not applicable
XII. Other significant matters
□Applicable √Not applicable
Section VII. Changes in Shares and Shareholders
I. Changes in equity(i) Exhibition of changes in shares
1. Exhibition of changes in shares
During the reporting period, the total number of shares and capital stock structure of theCompany did not change.
2. Description of changes in shares
□Applicable √Not applicable
3. The impact of share changes on financial indicators such as earnings per share andnet assets per share during the period from the end of the reporting period to thedisclosure date of the semi-annual report (if any)
□Applicable √Not applicable
4. Other matters the Company deems it necessary to disclose or required by thesecurities regulatory authority to be disclosed
□Applicable √Not applicable
(ii) Changes in non-tradable shares
□Applicable √Not applicable
II. Information of restricted shareholders(i) Information of shareholders:
Number of common shareholders as of the end of the reporting period | 208,473 |
(ii) Shareholdings of the top 10 shareholders and top 10 holders of tradable shares (orshareholders not subject to trading restrictions)
Unit: share
Shares held by top 10 shareholders | |||||||
Shareholder (full name) | Change during the reporting period | Number of shares held at the end of the reporting period | Proportion (%) | Number of non-tradable shares held | Pledge, mark or freezing | Ownership of shareholder | |
Status of shares | QTY | ||||||
Yiwu China Commodities City Holdings Limited | 0 | 3,038,179,392 | 55.38 | 0 | Nil | 0 | State-owned legal person |
Zhejiang Zhecai Capital Management Co., Ltd. | 0 | 147,466,528 | 2.69 | 0 | Nil | 0 | State-owned legal person |
Hong Kong Central Clearing Company Limited | 8,293,170 | 70,048,035 | 1.28 | 0 | Unk | 0 | Other |
Dacheng Fund-Agricultural Bank of China-Dacheng China Securities Financial Assets Management Scheme | 0 | 27,672,800 | 0.50 | 0 | Unk | 0 | Unk |
Southern Asset Management-Agricultural Bank of China-Southern China Securities Financial Assets Management Scheme | 0 | 27,672,800 | 0.50 | 0 | Unk | 0 | Unk |
GF Fund-Agricultural Bank of China-GF China Securities Financial Assets Management Scheme | -5,328,400 | 22,344,400 | 0.41 | 0 | Unk | 0 | Unk |
China Construction Bank Corporation - GF Technology Innovation Hybrid Securities Investment Fund | 20,356,900 | 20,356,900 | 0.37 | 0 | Unk | 0 | Unk |
China Merchants Bank Corporation - Minsheng Jiayin Growth Preferred Equity Securities Investment Fund | 19,800,033 | 19,800,033 | 0.36 | 0 | Unk | 0 | Unk |
Bank of China Limited - GF Small and Medium Cap Selected Hybrid Securities Investment Fund | 19,204,300 | 19,204,300 | 0.35 | 0 | Unk | 0 | Unk |
Gao Yaping | 16,923,700 | 16,923,700 | 0.31 | 0 | Unk | 0 | Domestic natural person |
Shares held by top 10 holders of tradable shares | |||||||
Shareholder | Number of tradable shares held | Type and quantity of shares | |||||
Type | QTY | ||||||
Yiwu China Commodities City Holdings Limited | 3,038,179,392 | RMB-denominated common share | 3,038,179,392 | ||||
Zhejiang Zhecai Capital Management Co., Ltd. | 147,466,528 | RMB-denominated common share | 147,466,528 | ||||
Hong Kong Central Clearing Company Limited | 70,048,035 | RMB-denominated common share | 70,048,035 |
Dacheng Fund-Agricultural Bank of China-Dacheng China Securities Financial Assets Management Scheme | 27,672,800 | RMB-denominated common share | 27,672,800 |
Southern Asset Management-Agricultural Bank of China-Southern China Securities Financial Assets Management Scheme | 27,672,800 | RMB-denominated common share | 27,672,800 |
GF Fund-Agricultural Bank of China-GF China Securities Financial Assets Management Scheme | 22,344,400 | RMB-denominated common share | 22,344,400 |
China Construction Bank Corporation - GF Technology Innovation Hybrid Securities Investment Fund | 20,356,900 | RMB-denominated common share | 20,356,900 |
China Merchants Bank Corporation - Minsheng Jiayin Growth Preferred Equity Securities Investment Fund | 19,800,033 | RMB-denominated common share | 19,800,033 |
Bank of China Limited - GF Small and Medium Cap Selected Hybrid Securities Investment Fund | 19,204,300 | RMB-denominated common share | 19,204,300 |
Gao Yaping | 16,923,700 | RMB-denominated common share | 16,923,700 |
Explanation on the relationship or concerted action between the above shareholders | |||
Explanation on the preferred shareholders whose voting rights had been restituted and the quantity of shares held thereby | Nil |
Number of shares held by the top 10 shareholders subject to trading restrictions and the tradingrestrictions
□Applicable √Not applicable
(iii) Strategic investors or general legal persons became the top ten shareholders due to
the placement of new shares
□Applicable √Not applicable
III. Directors, supervisors and senior management(i) Changes in shareholdings of present and resigned directors, supervisors and senior
management during the reporting period
□Applicable √Not applicable
Statement on other matters
□Applicable √Not applicable
(ii) The equity incentives granted to directors, supervisors and senior managementduring the reporting period
□Applicable √Not applicable
(iii) Other statements
□Applicable √Not applicable
IV. Changes in controlling shareholder or actual controller
□Applicable √Not applicable
Section VIII. Preferred Shares
□Applicable √Not applicable
Section IX. Bonds
I. Corporate bonds, corporate bonds and non-financial corporate debt financing
instruments
√Applicable □Not applicable
(i) Corporate bonds
□Applicable √Not applicable
(ii) Corporate bonds
√Applicable □Not applicable
1. Basic information on corporate bonds
Unit: RMB 100 million Unit: RMB
Name of bond | Abbreviation | Code | Issue date | Value date | Maturity date | Outstanding amount | Interest rate (%) | Method of principal repayment and interest payment | Marketplace | Whether there is a risk of terminating the transaction in the stock market |
Zhejiang China Commodities City Group Co., Ltd. publicly issued corporate bonds to professional investors in 2022 (Issue 1) | 22 YIWU CCC 01 | 137740 | September 1, 2022 | September 1, 2022 | September 1, 2025 | 8 | 2.88 | Simple interest is calculated, the interest payment frequency is annual, and the principal is repaid once due. | Shanghai Stock Exchange | No |
Zhejiang China Commodities City Group Co., Ltd. publicly issued corporate bonds to professional investors in 2022 (Issue 2) | 22 YIWU CCC 02 | 137815 | September 22, 2022 | September 22, 2022 | September 22, 2025 | 7 | 2.88 | Simple interest is calculated, the interest payment frequency is annual, and the principal is repaid once due. | Shanghai Stock Exchange | No |
The Company's measures to deal with the risk of bond termination
□Applicable √Not applicable
Bonds overdue
□Applicable √Not applicable
Explanation on overdue debts
□Applicable √Not applicable
2. Issuer or investor option clause, investor protection clause trigger and enforcement
□Applicable √Not applicable
3. Adjustment in credit rating results
□Applicable √Not applicable
Other statementsShanghai New Century Credit Rating Investment Service Co., Ltd. issued the "ZhejiangChina Commodities City Group Co., Ltd. Credit Rating Report" [New Century Enterprise Review(2023) 020239] on June 27, 2023. The Company's main credit rating is AAA. The rating outlookis stable.
4. The implementation and changes of guarantees, debt repayment plans and other debtrepayment protection measures during the reporting period and their impacts
□Applicable √Not applicable
Other statementsNil
5. Other statement on corporate bonds
□Applicable √Not applicable
(iii) Non-financial corporate debt financing instruments in the inter-bank bond market
√Applicable □Not applicable
1. Non-financial corporate debt financing instruments
Unit: RMB 100 million Unit: RMB
Name of bond | Abbreviation | Code | Issue date | Value date | Maturity date | Outstanding amount | Interest rate (%) | Method of principal repayment and interest payment | Marketplace | Investor appropriate arrangements (if any) | Trade mechanism | Whether there is a risk of terminating the transaction in the stock market |
Zhejiang China Commodities City Group Co., Ltd.’s 2022 MTN (Issue 1) | 22 Zhejiang Yiwu CCC MTN001 | 102280347 | Feb-2-2022 to Feb-23-2022 | Feb 24, 2022 | Feb 24, 2025 | 10 | 3.29 | Annual interest payment, principal repayment at maturity | Interbank market | Nil | No | |
Zhejiang China Commodities City Group Co., Ltd.’s 2022 MTN (Issue 2) | 22 Zhejiang Yiwu CCC MTN002 | 102280660 | Mar-25-2022 to Mar-28-2022 | Mar 29, 2022 | Mar 29, 2025 | 5 | 3.57 | Annual interest payment, principal repayment at maturity | Interbank market | Nil | No | |
Zhejiang China Commodities City Group Co., Ltd.'s 2022 MTN (Issue 3) | 22 Zhejiang Yiwu CCC MTN003 | 102281584 | Jul 18, 2022 to Jul 19, 2022 | Jul 20, 2022 | Jul 20, 2025 | 5 | 3.00 | Annual interest payment, principal repayment at maturity | Interbank market | Nil | No | |
Zhejiang China Commodities City Group Co., Ltd.’s 2023 Super Short-term Financing Bonds (Issue 1) | 23 Zhejiang Yiwu CCC SCP001 | 012381077 | From March 16, 2023 to March 17, 2023 | March 20, 2023 | September 15, 2023 | 10 | 2.85 | One-time repayment of principal and interest at maturity. | Interbank market | Nil | No |
Zhejiang China Commodities City Group Co., Ltd.’s 2023 Super Short-term Financing Bonds (Issue 2) | 23 Zhejiang Yiwu CCC SCP002 | 012381886 | May 16, 2023 | May 17, 2023 | November 10, 2023 | 10 | 2.57 | One-time repayment of principal and interest at maturity. | Interbank market | Nil | No | |
Zhejiang China Commodities City Group Co., Ltd.’s 2023 Super Short-term Financing Bonds (Issue 3) | 23 Zhejiang Yiwu CCC SCP003 | 012382295 | From June 16, 2023 to June 19, 2023 | June 20, 2023 | March 15, 2024 | 10 | 2.68 | One-time repayment of principal and interest at maturity. | Interbank market | Nil | No |
The Company's measures to deal with the risk of bond termination
□Applicable √Not applicable
Bonds overdue
□Applicable √Not applicable
Explanation on overdue debts
□Applicable √Not applicable
2. Issuer or investor option clause, investor protection clause trigger and enforcement
□Applicable √Not applicable
3. Adjustment in credit rating results
□Applicable √Not applicable
Other statementsShanghai New Century Credit Rating Investment Service Co., Ltd. issued the "ZhejiangChina Commodities City Group Co., Ltd. Credit Rating Report" [New Century Enterprise Review(2023) 020239] on June 27, 2023. The Company's main credit rating is AAA. The rating outlookis stable.
4. The implementation and changes of guarantees, debt repayment plans and other debt
repayment protection measures during the reporting period and their impacts
□Applicable √Not applicable
Other statementsNil
5. Explanation on other situations relevant to non-financial corporate debt financinginstruments
□Applicable √Not applicable
(iv) During the reporting period, the Company's loss in the scope of consolidatedstatements exceeded 10% of its net assets as of the the end of the previous year.
□Applicable √Not applicable
(v) Main accounting data and financial indicators
√Applicable □Not applicable
Unit: RMB
Major indicator | Jun 30, 2023 | Dec 31, 2022 | Jun 30, 2023 versus Dec 31, 2022 (%) | Reasons for change |
Current ratio | 45.82% | 42.33% | Up 3.49 ppt | |
Quick ratio | 35.31% | 31.61% | Up 3.70 ppt | |
Debt-to-asset ratio (%) | 49.04 | 52.41 | Down 3.37 ppt | |
Jan-Jun 2023 | Jan-Jun 2022 | YoY Change (%) | Reasons for change | |
Net profit after deduction of non-recurring gains and losses | 1,839,365,824.67 | 1,181,715,806.64 | 55.65 | Mainly due to a YoY increase of RMB 778 million in net profit, and the same below |
EBITDA to total debt ratio | 0.31 | 0.20 | 55.00 | |
Interest coverage ratio | 19.59 | 9.83 | 99.29 | |
Cash interest protection multiple | 2.25 | -1.93 | Not applicable | Due to a YoY increase in net cash flow generated from operating activities |
EBITDA-to-interest coverage ratio | 22.50 | 12.08 | 86.26 | Mainly due to a YoY increase in net profit |
Loan repayment rate (%) | 100 | 100 | - | |
Interest payment rate (%) | 100 | 100 | - |
II. Convertible corporate bonds
□Applicable √Not applicable
Section X. Financial ReportI. Auditor’s report
□Applicable √Not applicable
II. Financial statements
Consolidated Balance Sheet
June 30, 2023Prepared by: Zhejiang China Commodities City Group Co., Ltd.
Unit: RMB
Item | Note | June 30, 2023 | December 31, 2022 |
Current assets: | |||
Cash and cash equivalents | 2,176,441,243.02 | 1,991,298,971.30 | |
Held-for-trading financial assets | 51,610,980.66 | 62,331,000.66 | |
Accounts receivable | 150,768,192.08 | 210,750,725.36 | |
Prepayments | 917,588,009.93 | 606,057,048.25 | |
Other receivables | 87,930,115.50 | 419,398,092.62 | |
Inventory | 1,223,358,143.35 | 1,330,351,243.87 | |
Other current assets | 725,289,690.84 | 634,209,950.69 | |
Total current assets | 5,332,986,375.38 | 5,254,397,032.75 | |
Non-current assets: | |||
Debt investments | 48,066,000.00 | 48,079,561.64 | |
Long-term receivables | 288,037,945.91 | 278,299,600.73 | |
Long-term equity investment | 7,002,860,849.12 | 6,033,472,919.92 | |
Other equity instruments investment | 579,474,299.94 | 499,200,803.85 | |
Other non-current financial assets | 1,473,122,562.94 | 1,500,307,562.13 | |
Property investment | 3,541,905,331.54 | 2,851,643,180.42 | |
Fixed assets | 4,991,042,386.46 | 5,220,882,784.47 | |
Construction in progress | 2,749,978,013.56 | 2,860,064,818.36 | |
Right-of-use assets | 202,220,518.66 | 217,702,910.81 | |
Intangible assets | 6,351,921,020.08 | 6,461,849,690.36 | |
Development expenses | 14,588,967.82 | 4,660,995.87 | |
Goodwill | 284,916,367.87 | 284,916,367.87 | |
Long-term prepaid expenses | 268,638,087.91 | 306,925,970.89 | |
Deferred income tax assets | 151,447,548.30 | 150,346,801.31 | |
Other non-current assets | 138,253,316.00 | 138,253,316.00 | |
Total non-current assets | 28,086,473,216.11 | 26,856,607,284.63 | |
Total assets | 33,419,459,591.49 | 32,111,004,317.38 | |
Current liabilities: | |||
Short-term borrowings | 1,809,722,500.02 | 1,059,287,361.11 | |
Accounts payable | 475,316,014.07 | 1,191,314,404.15 | |
Advances from customers | 648,525,649.84 | 885,993,269.48 | |
Contract liabilities | 3,159,674,905.35 | 3,991,038,021.56 | |
Payroll payable | 119,585,250.83 | 183,135,314.51 | |
Tax payable | 174,131,551.64 | 214,998,424.41 | |
Other payables | 1,615,071,971.63 | 1,325,596,105.43 | |
Non-current liabilities due within one year | 134,947,210.88 | 86,852,293.01 | |
Other current liabilities | 3,503,035,185.79 | 3,473,907,027.00 | |
Total current liabilities | 11,640,010,240.05 | 12,412,122,220.66 | |
Non-current liabilities: | |||
Long-term borrowings | 648,185,725.67 | 404,500,000.00 | |
Bonds payable | 3,497,930,395.94 | 3,497,416,819.75 |
Lease liabilities | 201,494,376.11 | 206,623,735.97 | |
Estimated liabilities | 110,620,306.10 | 110,620,306.10 | |
Deferred income | 161,143,393.10 | 103,582,129.94 | |
Deferred income tax liabilities | 127,885,691.87 | 95,042,722.31 | |
Total non-current liabilities | 4,747,259,888.79 | 4,417,785,714.07 | |
Total liabilities | 16,387,270,128.84 | 16,829,907,934.73 | |
Owners’ equity (or shareholders’ equity) | |||
Paid-in capital (share capital) | 5,486,074,176.00 | 5,486,074,176.00 | |
Capital reserve | 1,660,079,638.41 | 1,651,146,033.96 | |
Less: treasury stocks | 80,753,291.00 | 119,483,675.00 | |
Other comprehensive income | 43,907,749.43 | -24,008,473.60 | |
Surplus reserve | 1,616,083,136.73 | 1,616,083,136.73 | |
General risk reserve | 1,038,991.13 | 1,038,991.13 | |
Undistributed profits | 8,293,179,416.65 | 6,651,440,591.35 | |
Total equity attributable to owners (shareholders) of the parent company | 17,019,609,817.35 | 15,262,290,780.57 | |
Minority interest | 12,579,645.30 | 18,805,602.08 | |
Total owners’ equity (or shareholders’ equity) | 17,032,189,462.65 | 15,281,096,382.65 | |
Total liabilities and owners’ equity (or shareholders’ equity) | 33,419,459,591.49 | 32,111,004,317.38 |
Legal Representative: ZHAO Wenge Person in Charge of Finance: WANG DongHead of Finance Department: ZHAO Difang
Balance Sheet of Parent Company
June 30, 2023Prepared by: Zhejiang China Commodities City Group Co., Ltd.
Unit: RMB
Item | Note | June 30, 2023 | December 31, 2022 |
Current assets: | |||
Cash and cash equivalents | 1,602,339,736.11 | 1,439,042,451.56 | |
Accounts receivable | 17,779,452.00 | 22,032,390.71 | |
Prepayments | 14,661,292.74 | 11,055,123.31 | |
Other receivables | 26,842,202.39 | 329,607,469.39 | |
Inventory | 5,539,270.27 | 4,599,032.34 | |
Other current assets | 3,240,507,005.04 | 3,650,862,939.52 | |
Total current assets | 4,907,668,958.55 | 5,457,199,406.83 | |
Non-current assets: | |||
Long-term receivables | 36,763,731.53 | 36,763,731.53 | |
Long-term equity investment | 10,345,905,964.12 | 9,210,422,313.34 | |
Other equity instruments investment | 579,474,299.94 | 499,200,803.85 | |
Other non-current financial assets | 132,747,145.89 | 142,053,056.97 | |
Property investment | 3,483,137,850.92 | 2,803,007,146.68 | |
Fixed assets | 3,948,053,217.18 | 4,122,738,826.73 | |
Construction in progress | 1,905,406,697.14 | 2,318,993,733.00 | |
Right-of-use assets | 106,443,457.58 | 109,853,155.63 | |
Intangible assets | 5,772,352,421.37 | 5,872,460,683.86 | |
Long-term prepaid expenses | 242,617,779.51 | 275,795,256.99 | |
Deferred income tax assets | 139,329,428.72 | 137,378,229.19 | |
Total non-current assets | 26,692,231,993.90 | 25,528,666,937.77 | |
Total assets | 31,599,900,952.45 | 30,985,866,344.60 | |
Current liabilities: | |||
Short-term borrowings | 1,809,722,500.02 | 1,059,287,361.11 | |
Accounts payable | 281,452,212.79 | 822,773,769.51 | |
Advances from customers | 597,100,599.53 | 861,860,467.12 | |
Contract liabilities | 2,213,236,702.02 | 3,032,044,768.16 | |
Payroll payable | 93,018,884.38 | 139,946,321.85 | |
Tax payable | 158,760,824.64 | 188,723,169.42 | |
Other payables | 1,304,983,892.59 | 1,075,413,151.71 | |
Non-current liabilities due within one year | 113,405,539.68 | 64,688,676.55 | |
Other current liabilities | 3,757,437,897.35 | 3,726,398,088.04 | |
Total current liabilities | 10,329,119,053.00 | 10,971,135,773.47 | |
Non-current liabilities: | |||
Long-term borrowings | 486,700,000.00 | 404,500,000.00 | |
Bonds payable | 3,497,930,395.94 | 3,497,416,819.75 | |
Lease liabilities | 115,164,029.26 | 110,999,791.68 | |
Estimated liabilities | 110,620,306.10 | 110,620,306.10 | |
Deferred income | 102,871,393.10 | 103,582,129.94 | |
Deferred income tax liabilities | 46,119,757.77 | 13,046,676.14 | |
Total non-current liabilities | 4,359,405,882.17 | 4,240,165,723.61 | |
Total liabilities | 14,688,524,935.17 | 15,211,301,497.08 | |
Owners’ equity (or shareholders’ equity) | |||
Paid-in capital (share capital) | 5,486,074,176.00 | 5,486,074,176.00 | |
Capital reserve | 1,253,928,868.47 | 1,885,778,197.50 | |
Less: treasury stocks | 80,753,291.00 | 119,483,675.00 | |
Other comprehensive income | 19,386,651.71 | -40,818,470.36 |
Surplus reserve | 1,616,029,660.90 | 1,616,029,660.90 | |
Undistributed profits | 8,616,709,951.20 | 6,946,984,958.48 | |
Total owners’ equity (or shareholders’ equity) | 16,911,376,017.28 | 15,774,564,847.52 | |
Total liabilities and owners’ equity (or shareholders’ equity) | 31,599,900,952.45 | 30,985,866,344.60 |
Legal Representative: ZHAO Wenge Person in Charge of Finance: WANG DongHead of Finance Department: ZHAO Difang
Consolidated Income Statement
Jan.-Jun. 2023
Unit: RMB
Item | Note | Jan-Jun 2023 | Jan-Jun 2022 |
I. Gross revenue | 5,160,991,043.25 | 4,207,027,616.46 | |
In which: operating revenue | 5,160,991,043.25 | 4,207,027,616.46 | |
II. Gross cost | 4,038,995,021.46 | 3,611,063,999.15 | |
In which: Operating cost | 3,582,510,450.35 | 3,159,298,146.77 | |
Taxes and surcharges | 46,693,684.31 | 63,312,437.35 | |
Sales expenses | 77,763,668.49 | 93,282,063.73 | |
Administrative expenses | 267,899,068.22 | 226,571,368.27 | |
R&D expenses | 10,524,249.20 | 5,708,047.58 | |
Financial expenses | 53,603,900.89 | 62,891,935.45 | |
In which: interest expenses | 125,445,414.65 | 154,500,444.77 | |
Interest income | 38,139,798.22 | 89,271,567.84 | |
Plus: other income | 14,631,536.76 | 16,715,248.69 | |
Investment income (loss is indicated by “-”) | 1,033,500,114.51 | 750,723,439.63 | |
In which: income from investment in associates and joint ventures | 1,017,671,762.53 | 748,873,944.26 | |
Changes in fair value (loss is indicated by “-”) | -7,181,931.08 | -2,213,593.53 | |
Credit impairment loss (loss is indicated by “-”) | 548,917.85 | 27,935.44 | |
Income from disposal of assets (loss is indicated by “-”) | 165,883,894.78 | 1,389.88 | |
III. Operating profit (loss is indicated by “-”) | 2,329,378,554.61 | 1,361,218,037.42 | |
Plus: income from non-operating activities | 3,111,709.63 | 4,017,499.69 | |
Less: expenses from non-operating activities | 197,968.35 | 430,003.61 | |
IV. Profits before tax (loss is indicated by “-”) | 2,332,292,295.89 | 1,364,805,533.50 | |
Less: income tax | 331,637,822.02 | 142,279,469.17 | |
V. Net profits (net loss is indicated by “-”) | 2,000,654,473.87 | 1,222,526,064.33 | |
(I) Categorized by continuity of operation | |||
Net profits from continuing operation (net loss is indicated by “-”) | 2,000,654,473.87 | 1,222,526,064.33 | |
(II) Categorized by ownership | |||
Net profits attributable to shareholders of the parent company (net loss is indicated by “-”) | 1,998,333,646.74 | 1,222,205,978.81 | |
Minority interest(net loss is indicated by “-”) | 2,320,827.13 | 320,085.52 | |
VI. Other comprehensive income, net of tax | 67,799,099.64 | -67,583,697.37 | |
(I) Other comprehensive income attributable to owners of the parent company, net of tax | 67,916,223.03 | -67,518,435.44 | |
1. Other comprehensive income that cannot be reclassified as profits or loss | 60,205,122.07 | -78,078,517.69 | |
(3) Changes in fair value of investments in other equity instruments | 60,205,122.07 | -78,078,517.69 | |
2 . Other comprehensive income that will be reclassified as profits or loss | 7,711,100.96 | 10,560,082.25 | |
Other comprehensive income that can be transferred into Profits and losses under equity method | - | -78,548.99 | |
(6) Difference arising from the translation of foreign currency financial statements | 7,711,100.96 | 10,638,631.24 | |
(2) After -tax net of other comprehensive income attributable to minority shareholders | -117,123.39 | -65,261.93 | |
VII. Total comprehensive income | 2,068,453,573.51 | 1,154,942,366.96 | |
(I) Total comprehensive income attributable to | 2,066,249,869.77 | 1,154,687,543.37 |
owners of the parent company | |||
(II) Total comprehensive income attributable to minority shareholders | 2,203,703.74 | 254,823.59 | |
VIII. Earnings per share: | |||
(I) Basic earnings per share | 0.37 | 0.22 | |
(II) Diluted earnings per share | 0.37 | 0.22 |
For merger of the enterprises under common control during the current period, net profits of themerged party prior to the merger were RMB 0, and net profits of the merged party during theprevious period were RMB 0.Legal Representative: ZHAO Wenge Person in Charge of Finance: WANG DongHead of Finance Department: ZHAO Difang
Income Statement of Parent Company
Jan.-Jun. 2023
Unit: RMB
Item | Note | Jan-Jun 2023 | Jan-Jun 2022 |
I. Operating revenue | 1,923,534,277.16 | 1,436,820,545.38 | |
Less: Operating cost | 525,153,455.43 | 444,169,635.03 | |
Taxes and surcharges | 29,462,268.30 | 49,112,350.75 | |
Sales expenses | 37,008,590.21 | 39,499,869.87 | |
Administrative expenses | 130,896,651.97 | 99,654,988.83 | |
Financial expenses | 65,718,043.69 | 75,012,149.89 | |
In which: interest expenses | 125,445,414.65 | 154,500,444.77 | |
Interest income | 30,709,123.09 | 86,046,217.34 | |
Plus: other income | 12,319,396.64 | 6,672,653.40 | |
Investment income (loss is indicated by “-”) | 1,044,304,324.89 | 754,092,157.92 | |
In which: income from investment in associates and joint ventures | 1,040,883,650.78 | 753,179,755.40 | |
Changes in fair value (loss is indicated by “-”) | -9,305,911.08 | -7,738,181.32 | |
Credit impairment loss (loss is indicated by “-”) | 1,193.47 | -151,096.47 | |
Income from disposal of assets (loss is indicated by “-”) | 163,241,247.23 | 1,971,031.95 | |
II. Operating profits (loss is indicated by “-”) | 2,345,855,518.71 | 1,484,218,116.49 | |
Plus: income from non-operating activities | 1,090,764.24 | 3,754,970.99 | |
Less: expenses from non-operating activities | 53,023.89 | 131,077.29 | |
III. Profits before tax (loss is indicated by “-”) | 2,346,893,259.06 | 1,487,842,010.19 | |
Less: income tax | 320,573,444.90 | 154,728,322.57 | |
IV. Net profits (net loss is indicated by “-”) | 2,026,319,814.16 | 1,333,113,687.62 | |
(I) Categorized by continuity of operation(net loss is indicated by “-”) | 2,026,319,814.16 | 1,333,113,687.62 | |
V. Other comprehensive income, net of tax | 60,205,122.07 | -78,078,517.69 | |
(I) Other comprehensive income that cannot be reclassified as Profits and losses | 60,205,122.07 | -78,078,517.69 | |
3. Changes in fair value of investments in other equity instruments | 60,205,122.07 | -78,078,517.69 | |
VI. Total comprehensive income | 2,086,524,936.23 | 1,255,035,169.93 | |
VII. Earnings per share: |
Legal Representative: ZHAO Wenge Person in Charge of Finance: WANG DongHead of Finance Department: ZHAO Difang
Consolidated Cash Flow Statement
Jan.-Jun. 2023
Unit: RMB
Item | Note | Jan-Jun 2023 | Jan-Jun 2022 |
I. Cash flow from operating activities: | |||
Cash received from sale of goods and rendering of services | 4,977,640,834.09 | 3,817,631,052.46 | |
Cash received for taxes and surcharges refunded | 23,897,946.46 | 224,460,979.51 | |
Other cash receipts relating to operating activities | 187,951,543.68 | 222,892,462.11 | |
Sub-total of cash inflow from operating activities | 5,189,490,324.23 | 4,264,984,494.08 | |
Cash paid for goods and services | 4,090,931,069.08 | 3,653,727,304.04 | |
Cash paid to and on behalf of employees | 339,067,822.26 | 325,183,213.92 | |
Payments of taxes | 358,963,558.10 | 605,322,164.89 | |
Other cash payments relating to operating activities | 257,280,679.01 | 347,339,144.85 | |
Sub-total of cash outflow from operating activities | 5,046,243,128.45 | 4,931,571,827.70 | |
Net cash flow from operating activities | 143,247,195.78 | -666,587,333.62 | |
II. Cash flow from investing activities: | |||
Cash received from recovery of investment | 80,872,677.09 | 2,838,060,000.34 | |
Cash received from investment income | 136,547,121.87 | 118,704,141.34 | |
Net cash received from disposal of property, plant and equipment, intangible assets and other long-term assets | 208,129,700.93 | 355,650.91 | |
Net cash received from disposal of subsidiaries and other business units | 12,482,830.94 | - | |
Other cash receipts relating to investing activities | 501,750,200.00 | 901,774,483.00 | |
Sub-total of cash inflow from investing activities | 939,782,530.83 | 3,858,894,275.59 | |
Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 1,433,747,137.68 | 1,180,574,429.74 | |
Cash paid to acquire investments | 21,106.36 | 3,082,074,693.64 | |
Other cash paid related to investing activities | 11,553,412.19 | 68,507,285.00 | |
Sub-total of cash outflow from investing activities | 1,445,321,656.23 | 4,331,156,408.38 | |
Net cash flow from investing activities | -505,539,125.40 | -472,262,132.79 | |
III. Cash flow from financing activities: | |||
Cash received from borrowings | 2,111,485,725.67 | 2,275,250,000.00 | |
Cash received from bond issuance | 2,998,270,624.05 | 2,500,000,000.00 | |
Sub-total of cash inflow from financing activities | 5,109,756,349.72 | 4,775,250,000.00 | |
Cash paid for debts repayment | 4,072,600,000.00 | 3,700,000,000.00 | |
Cash paid for distribution of dividends or profits or payment of interest | 479,370,705.33 | 459,508,761.85 | |
Other cash paid related to financing activities | 14,105,217.90 | 11,970,676.79 | |
Sub-total of cash outflow from financing activities | 4,566,075,923.23 | 4,171,479,438.64 | |
Net cash flow from financing activities | 543,680,426.49 | 603,770,561.36 | |
IV. Effect of foreign exchange rate | 2,390,230.36 | 2,944,567.22 |
changes on cash and cash equivalents | |||
V. Net increase in cash and cash equivalents | 183,778,727.23 | -532,134,337.83 | |
Plus: opening balance of cash and cash equivalents | 1,981,200,941.64 | 4,006,468,325.47 | |
VI. Closing balance of cash and cash equivalents | 2,164,979,668.87 | 3,474,333,987.64 |
Legal Representative: ZHAO Wenge Person in Charge of Finance: WANG DongHead of Finance Department: ZHAO Difang
Cash Flow Statement of Parent Company
Jan.-Jun. 2023
Unit: RMB
Item | Note | Jan-Jun 2023 | Jan-Jun 2022 |
I. Cash flow from operating activities: | |||
Cash received from sale of goods and rendering of services | 1,098,788,301.57 | 358,669,144.91 | |
Cash received for taxes and surcharges refunded | - | 168,188,111.96 | |
Other cash receipts relating to operating activities | 70,609,769.29 | 97,589,662.20 | |
Sub-total of cash inflow from operating activities | 1,169,398,070.86 | 624,446,919.07 | |
Cash paid for goods and services | 236,241,398.35 | 166,099,659.04 | |
Cash paid to and on behalf of employees | 174,499,662.84 | 203,530,312.37 | |
Payments of taxes | 293,658,960.27 | 537,128,931.09 | |
Other cash payments relating to operating activities | 126,086,015.59 | 251,492,294.32 | |
Sub-total of cash outflow from operating activities | 830,486,037.05 | 1,158,251,196.82 | |
Net cash flow from operating activities | 338,912,033.81 | -533,804,277.75 | |
II. Cash flow from investing activities: | |||
Cash received from recovery of investment | 4,589,970,369.66 | 5,314,515,684.34 | |
Cash received from investment income | 124,316,127.19 | 107,024,942.32 | |
Net cash received from disposal of property, plant and equipment, intangible assets and other long-term assets | 205,308,403.69 | 329,836.53 | |
Net cash received from disposal of subsidiaries and other business units | - | 9,380,000.00 | |
Other cash receipts relating to investing activities | 501,750,200.00 | 886,118,683.00 | |
Sub-total of cash inflow from investing activities | 5,421,345,100.54 | 6,317,369,146.19 | |
Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets | 908,361,246.65 | 989,899,828.33 | |
Cash paid to acquire investments | 5,053,269,903.20 | 5,864,167,378.64 | |
Other cash paid related to investing activities | 31,628,618.75 | 26,734,400.00 | |
Sub-total of cash outflow from investing activities | 5,993,259,768.60 | 6,880,801,606.97 | |
Net cash flow from investing activities | -571,914,668.06 | -563,432,460.78 | |
III. Cash flow from financing activities: | |||
Cash received from borrowings | 1,950,000,000.00 | 2,275,250,000.00 | |
Cash received from bond issuance | 2,998,270,624.05 | 2,500,000,000.00 | |
Sub-total of cash inflow from financing activities | 4,948,270,624.05 | 4,775,250,000.00 | |
Cash paid for debts repayment | 4,072,600,000.00 | 3,700,000,000.00 | |
Cash paid for distribution of dividends or profits or payment of interest | 479,370,705.33 | 459,508,761.85 | |
Sub-total of cash outflow from financing activities | 4,551,970,705.33 | 4,159,508,761.85 | |
Net cash flow from financing activities | 396,299,918.72 | 615,741,238.15 | |
IV. Effect of foreign exchange rate changes on cash and cash equivalents | - | - | |
V. Net increase in cash and cash | 163,297,284.47 | -481,495,500.38 |
equivalents | |||
Plus: opening balance of cash and cash equivalents | 1,431,822,390.59 | 3,527,117,072.56 | |
VI. Closing balance of cash and cash equivalents | 1,595,119,675.06 | 3,045,621,572.18 |
Legal Representative: ZHAO Wenge Person in Charge of Finance: WANG DongHead of Finance Department: ZHAO Difang
Statement of Changes in Consolidated Owners’ Equity
Jan.-Jun. 2023
Unit: RMB
Item | Jan-Jun 2023 | |||||||||
Equity attributable to owners of the parent company | Minority interest | Total owners’ equity | ||||||||
Paid-in capital (share capital) | Capital reserve | Less: treasury stocks | Other comprehensive income | Surplus reserve | General risk reserve | Undistributed profits | Sub-total | |||
I. Closing balance of the same reporting period of previous year | 5,486,074,176.00 | 1,651,146,033.96 | 119,483,675.00 | -24,008,473.60 | 1,616,083,136.73 | 1,038,991.13 | 6,651,440,591.35 | 15,262,290,780.57 | 18,805,602.08 | 15,281,096,382.65 |
II. Opening balance of the current year | 5,486,074,176.00 | 1,651,146,033.96 | 119,483,675.00 | -24,008,473.60 | 1,616,083,136.73 | 1,038,991.13 | 6,651,440,591.35 | 15,262,290,780.57 | 18,805,602.08 | 15,281,096,382.65 |
III. YoY change (decrease is indicated by “-”) | - | 8,933,604.45 | -38,730,384.00 | 67,916,223.03 | - | - | 1,641,738,825.30 | 1,757,319,036.78 | -6,225,956.78 | 1,751,093,080.00 |
(I) Total comprehensive income | - | - | - | 67,916,223.03 | - | - | 1,998,333,646.74 | 2,066,249,869.77 | 2,203,703.74 | 2,068,453,573.51 |
(II)Owners’ contribution to and reduction in capital | - | 8,933,604.45 | -38,730,384.00 | - | - | - | - | 47,663,988.45 | - | 47,663,988.45 |
3. Amount of share-based payment into owner’s equity | - | 8,933,604.45 | - | - | - | - | - | 8,933,604.45 | - | 8,933,604.45 |
4.Others | - | - | -38,730,384.00 | - | - | - | - | 38,730,384.00 | - | 38,730,384.00 |
(III) Profits | - | - | - | - | - | - | -356,594,821.44 | -356,594,821.44 | - | -356,594,821.44 |
distribution | ||||||||||
3.Distribution to owners (or shareholders) | - | - | - | - | - | - | -356,594,821.44 | -356,594,821.44 | - | -356,594,821.44 |
(VI) Others | - | - | - | - | - | - | - | - | -8,429,660.52 | -8,429,660.52 |
IV. Closing balance of the current period | 5,486,074,176.00 | 1,660,079,638.41 | 80,753,291.00 | 43,907,749.43 | 1,616,083,136.73 | 1,038,991.13 | 8,293,179,416.65 | 17,019,609,817.35 | 12,579,645.30 | 17,032,189,462.65 |
Item | Jan-Jun 2022 | ||||||||
Equity attributable to owners of the parent company | Minority interest | Total owners’ equity | |||||||
Paid-in capital (share capital) | Capital reserve | Less: treasury stocks | Other comprehensive income | Surplus reserve | Undistributed profits | Sub-total | |||
I. Closing balance of the same reporting period of previous year | 5,491,274,176.00 | 1,631,509,114.96 | 137,494,800.00 | 60,850,735.02 | 1,505,209,795.50 | 6,059,496,846.85 | 14,610,845,868.33 | 19,996,225.47 | 14,630,842,093.80 |
II. Opening balance of the current year | 5,491,274,176.00 | 1,631,509,114.96 | 137,494,800.00 | 60,850,735.02 | 1,505,209,795.50 | 6,059,496,846.85 | 14,610,845,868.33 | 19,996,225.47 | 14,630,842,093.80 |
III. YoY change (decrease is indicated by “-”) | - | 16,414,582.49 | - | -67,518,435.44 | - | 821,342,963.96 | 770,239,111.01 | 254,823.59 | 770,493,934.60 |
(I) Total comprehensive income | - | - | - | -67,518,435.44 | - | 1,222,205,978.81 | 1,154,687,543.37 | 254,823.59 | 1,154,942,366.96 |
(II)Owners’ contribution to and reduction in capital | - | 16,414,582.49 | - | - | - | - | 16,414,582.49 | - | 16,414,582.49 |
3. Amount of share-based payment into owner’s equity | - | 16,414,582.49 | - | - | - | - | 16,414,582.49 | - | 16,414,582.49 |
(III) Profits distribution | - | - | - | - | - | -400,863,014.85 | -400,863,014.85 | - | -400,863,014.85 |
3.Distribution to owners (or shareholders) | - | - | - | - | - | -400,863,014.85 | -400,863,014.85 | - | -400,863,014.85 |
IV. Closing balance of the current period | 5,491,274,176.00 | 1,647,923,697.45 | 137,494,800.00 | -6,667,700.42 | 1,505,209,795.50 | 6,880,839,810.81 | 15,381,084,979.34 | 20,251,049.06 | 15,401,336,028.40 |
Legal Representative: ZHAO Wenge Person in Charge of Finance: WANG Dong Head of Finance Department: ZHAODifang
Statement of Changes in Owners’ Equity of Parent Company
Jan.-Jun. 2023
Unit: RMB
Item | Jan-Jun 2023 | ||||||
Paid-in capital (share capital) | Capital reserve | Less: treasury stocks | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners’ equity | |
I. Closing balance of the same reporting period of previous year | 5,486,074,176.00 | 1,885,778,197.50 | 119,483,675.00 | -40,818,470.36 | 1,616,029,660.90 | 6,946,984,958.48 | 15,774,564,847.52 |
II. Opening balance of the current year | 5,486,074,176.00 | 1,885,778,197.50 | 119,483,675.00 | -40,818,470.36 | 1,616,029,660.90 | 6,946,984,958.48 | 15,774,564,847.52 |
III. YoY change (decrease is indicated by “-”) | - | -631,849,329.03 | -38,730,384.00 | 60,205,122.07 | - | 1,669,724,992.72 | 1,136,811,169.76 |
(I) Total comprehensive income | - | - | - | 60,205,122.07 | - | 2,026,319,814.16 | 2,086,524,936.23 |
(II)Owners’ contribution to and reduction in capital | - | 5,769,315.06 | -38,730,384.00 | - | - | - | 44,499,699.06 |
3. Amount of share-based payment into owner’s equity | - | 5,769,315.06 | - | - | - | - | 5,769,315.06 |
4.Others | - | - | -38,730,384.00 | - | - | - | 38,730,384.00 |
(III) Profits distribution | - | - | - | - | - | -356,594,821.44 | -356,594,821.44 |
2. Distribution to owner (or shareholders) | - | - | - | - | - | -356,594,821.44 | -356,594,821.44 |
(VI) Others | - | -637,618,644.09 | - | - | - | - | -637,618,644.09 |
IV. Closing balance of the current period | 5,486,074,176.00 | 1,253,928,868.47 | 80,753,291.00 | 19,386,651.71 | 1,616,029,660.90 | 8,616,709,951.20 | 16,911,376,017.28 |
Item | Jan-Jun 2022 | ||||||
Paid-in capital (share capital) | Capital reserve | Less: treasury stocks | Other comprehensive income | Surplus reserve | Undistributed profits | Total owners’ equity | |
I. Closing balance of the same reporting period of previous year | 5,491,274,176.00 | 1,866,141,278.50 | 137,494,800.00 | 66,421,903.33 | 1,505,156,319.67 | 6,349,987,902.26 | 15,141,486,779.76 |
II. Opening balance of the current year | 5,491,274,176.00 | 1,866,141,278.50 | 137,494,800.00 | 66,421,903.33 | 1,505,156,319.67 | 6,349,987,902.26 | 15,141,486,779.76 |
III. YoY change (decrease is indicated by “-”) | - | 4,215,089.34 | - | -78,078,517.69 | - | 932,250,672.77 | 858,387,244.42 |
(I) Total comprehensive income | - | - | - | -78,078,517.69 | - | 1,333,113,687.62 | 1,255,035,169.93 |
(II)Owners’ contribution to and reduction in capital | - | 4,215,089.34 | - | - | - | - | 4,215,089.34 |
3. Amount of share-based payment into owner’s | - | 4,215,089.34 | - | - | - | - | 4,215,089.34 |
equity | |||||||
(III) Profits distribution | - | - | - | - | - | -400,863,014.85 | -400,863,014.85 |
2. Distribution to owner (or shareholders) | - | - | - | - | - | -400,863,014.85 | -400,863,014.85 |
IV. Closing balance of the current period | 5,491,274,176.00 | 1,870,356,367.84 | 137,494,800.00 | -11,656,614.36 | 1,505,156,319.67 | 7,282,238,575.03 | 15,999,874,024.18 |
Legal Representative: ZHAO Wenge Person in Charge of Finance: WANG Dong Head of Finance Department: ZHAO Difang
III. Basic information of the Company
1. Company profile
√Applicable □Not applicable
Zhejiang China Commodities City Group Co., Ltd. (the “Company”) is a company limited byshare and was incorporated on Dec 28, 1993 in Zhejiang province of the People’s Republic ofChina. The RMB-denominated common A shares issued by the Company got listed on ShanghaiStock Exchange on May 9, 2002. The Company is headquartered at No.105 Futian Road, Yiwu,Zhejiang.The Group’s main business activities: market development and operation and supportingservices, sales of commodities, provision of online trading platforms and services, developmentand management of online trading market, etc., in the category of comprehensive services.The parent company of the Group is Yiwu China Commodities City Holdings Limited(hereinafter referred to as “CCCH”) and the final controller of the Group is the State-ownedAssets Supervision and Administration Office of the People’s Government of Yiwu.
2. Consolidation scope of financial statements
√Applicable □Not applicable
The consolidation of financial statements is determined on the basis of control. For thechanges in the reporting period, please refer to Note VIII. Changes in consolidation scope
IV. Basis of preparation of financial statements
1. Basis of preparation
The financial statements of the Company were prepared on a going-concern basis. Thefinancial statements were prepared in accordance with the Accounting Standards forEnterprises-Basic Standards and the specific accounting standards, application guidelines,interpretations and other related regulations promulgated and amended thereafter (collectivelyreferred to as “Accounting Standards”).
The financial statements were all prepared based on the valuation principle of historical cost,except for certain financial instruments. In case of assets impairment, corresponding provisionwas made in accordance with relevant provisions.
2. Going concern
√Applicable □Not applicable
The Company prepared financial statements on the basis of continuous operation.
On June 30, 2023, after deducting the contract liabilities/advance receipts that the Groupwill use services/commodities to settle revenue to be recognized in the future, and the prepaidaccounts that the Group will receive in the future for goods/services, the Group's currentliabilities exceeded current assets by RMB 3,416,411,319.41. The Board of Directors of theCompany comprehensively considered the following sources of funds available to the Group: 1.The Group’s expected net cash inflow from operating activities within the next 12 months; 2. Asof June 30, 2023, the Group’s unused bank credit line of was RMB 2,968,100,000.00. The boardof directors of the Company is convinced that the available credit line can be re-approved whenit expires based on past experience and good reputation; 3. In view of the credit history of theGroup, other available financing channels from banks and other financial institutions; 4. , TheGroup's controlling shareholder CCCH has promised to continue to provide sufficient financialsupport in the foreseeable future.
After evaluation, the board of directors of the Company believed that the Group hassufficient resources to continue operations in the foreseeable future period of not less than 12months from the end of the reporting period. Therefore, the Board of Directors of the Companycontinued to prepare the Group's financial statements on a going concern basis.
V. Important Accounting Policies and Accounting EstimatesReminders on specific accounting policies and accounting estimates:
√Applicable □Not applicable
The Group has formulated specific accounting policies and accounting estimates based onthe characteristics of actual production and operation, which are mainly reflected in the bad debtprovisions for receivables, inventory valuation methods, depreciation of fixed assets,amortization of intangible assets, income recognition and measurement, recognition of propertyinvestments and fixed assets, and service life and residual value of fixed assets.
1. Statement of compliance with the Accounting Standards
The financial statements prepared by the Group comply with the requirements of theAccounting Standards, and truly and completely reflect the Company’s financial conditions,operating results, changes in shareholders’ equity, cash flows and other related information.
2. Accounting period
The Company’s accounting year is from Jan 1 to Dec 31 of each calendar year.
3. Operating cycle
√Applicable □Not applicable
The business cycle of the Company is relatively short, and 12 months are used as thestandard for defining the liquidity of assets and liabilities.
4. Functional currency
The Company’s functional currency is RMB. The Group uses RMB as its functional currencyand in the preparation of financial statements. Unless specifically stated, all amounts areexpressed in RMB.
The subsidiaries, joint ventures and associates of the Group determine their functionalcurrencies at their own discretion based on the main economic environments in their places ofbusinesses and convert all amounts into RMB while preparing financial statements.
5. Accounting methods for merger of the enterprises under common control and
merger of the enterprises not under common control
√Applicable □Not applicable
The mergers of enterprises are divided into the mergers of the enterprises under commoncontrol and mergers of the enterprises not under common control.
Mergers of the enterprises under common control
Merger of the enterprises under common control refers to the merger of the enterprises thatare under ultimate control of the same party or parties before and after the merger and thecontrol is not temporary.
The assets and liabilities acquired by the merging party in a merger of the enterprises undercommon control (including the goodwill formed through the acquisition of the merged party bythe ultimate controller) are accounted according to the book value thereof in the ultimatecontroller’s financial statements on the date of merger. For the difference between the bookvalue of the net assets obtained by the merging party and the book value of the considerationpaid for the merger (or the total nominal value of the shares issued), the share capital premium inthe capital reserve shall be adjusted; if the share capital premium is not sufficient to absorb thedifference, the retained earnings shall be adjusted.
Mergers of the enterprises not under common control
Merger of the enterprises not under common control refers to the merger of the enterprisesthat are not under ultimate control of the same party or parties before and after the merger.
The acquiree’s identifiable assets, liabilities and contingent liabilities obtained from themerger of the enterprises not under common control are measured at their fair values on the dateof acquisition. If the sum of the fair value of the consideration paid for the merger (or fair value ofthe equity securities issued) and the fair value of the acquiree’s equity held before the date ofacquisition is higher than the share in the fair value of the acquiree’s identifiable net assetsacquired from the merger, the difference between them is recognized as goodwill, which will besubsequently measured by the cost less accumulated impairment loss. If the sum of the fair
value of the consideration paid for the merger (or fair value of the equity securities issued) andthe fair value of the acquiree’s equity held before the date of acquisition is lower than the share inthe fair value of the acquiree’s identifiable net assets acquired from the merger, themeasurement of the fair value of the acquiree’s identifiable assets, liabilities and contingentliabilities, the fair value of the consideration paid for the merger (or fair value of the equitysecurities issued) and the fair value of the acquiree’s equity held before the date of acquisitionwill be reviewed, and if the sum of the fair value of the consideration paid for the merger (or fairvalue of the equity securities issued) and the fair value of the acquiree’s equity held before thedate of acquisition is still lower than the share in the fair value of the acquiree’s identifiable netassets acquired from the merger after such review, the difference will be recognized in the Profitsand losses for the current period.For mergers of the enterprises not under common control that are executed through multipletransactions, the long-term equity investment of the acquiree before the date of acquisition shallbe re-measured based on the fair value thereof on the date of acquisition and any differencebetween the fair value and book value thereof shall be recognized in the Profits and losses forthe current period; other comprehensive income from the long-term equity investment of theacquiree before the date of acquisition under the equity method shall be accounted on the samebasis as that for the direct disposal of related assets or liabilities by the investee, and otherchanges in shareholders’ equity than net gains or losses, other comprehensive income and profitdistribution shall be recognized in the Profits and losses for the period where the date ofacquisition falls.
6. Preparation method of consolidated financial statements
√Applicable □Not applicable
The financial statements to be consolidated is determined on the basis of control, includingthose of the Company and all of its subsidiaries. Subsidiaries refer to the entities controlled bythe Company (including the severable parts of enterprises and invested entities, and thestructured entities controlled by the Company).In the preparation of consolidated financial statements, the subsidiaries adopt the sameaccounting year and accounting policies as those adopted by the Company. Assets, liabilities,equity, income, expenses and cash flows generated from all deals between companies withinthe Group are fully offset at the time of merger.If the amount of loss for the current period attributable to the minority shareholders of asubsidiary exceeds the minority shareholders’ share in the opening balance of shareholders’equity in the subsidiary, the excess will still be recognized against minority interest.For a subsidiary acquired through a business merger not under the same control, theoperating results and cash flows of the acquiree will be included in the consolidated financialstatements from the day when the Group acquires control, until the control of the Group ceases.In the preparation of consolidated financial statements, adjustments will be made to the financialstatements of the subsidiary based on the fair value of its identifiable assets, liabilities orcontingent liabilities determined on the date of acquisition.For a subsidiary acquired through a business merger under the same control, the operatingresults and cash flows of merged party will be included in the consolidated financial statementssince the beginning of the current period of the merger. In the preparation of consolidatedfinancial statements, adjustments will be made to the related items in its previous financialstatements as if the reporting entity formed after the merger has been existing as from theultimate controller starts to exercise control.In case of any change to one or more elements of the control due to the changes in relatedfacts and circumstances, the Group will re-evaluate whether to control the investee.Without loss of control, changes in minority shareholders' equity are regarded as equitytransactions.
7. Classification of joint arrangements and accounting treatment of joint operations
√Applicable □Not applicable
Joint arrangements are divided into joint operations and joint ventures. Joint operationrefers to a joint arrangement in which the parties thereto enjoy the assets relating to sucharrangement and assume the liabilities relating to such arrangement. Joint venture refers to ajoint arrangement in which the parties thereto only enjoy rights to the net assets in thisarrangement.
Each party to a joint arrangement recognizes the following items relating to its share in thejoint operation: assets held individually by it and assets held jointly based on its share; liabilitiesassumed individually by it and liabilities assumed jointly based on its share; revenue from thesale of its share in the output of the joint operation; revenue from the sale of the output of the jointoperation based on its share; expenses incurred individually by it and expenses incurred by thejoint operation based on its share.
8. Criteria for the identification of cash and cash equivalents
The Group’s cash refers to cash on hand, deposits available for payment at any time, andcash equivalents refer to the investments held by the Group with a short period (generally duewithin three months from the date of purchase), high liquidity and small risk in value change, andeasy to convert to a known amount in cash.
9. Foreign currency transactions and translation of foreign currency financial
statements
√Applicable □Not applicable
For foreign currency transactions, the Group will translate the foreign currency amounts intoits functional currency amounts.
In the initial recognition of a foreign currency transaction, the foreign currency amount istranslated to a functional currency amount according to the spot exchange rate on the date oftransaction. On the balance sheet date, the foreign currency monetary items are translatedaccording to the spot exchange rate on the balance sheet date. The translation differencebetween settlement and monetary items is recognized in the Profits and losses for the currentperiod, except for the difference arising from the special foreign currency borrowing relating tothe acquisition and construction of the assets qualified for capitalization, which will be treatedbased on the principles for the capitalization of borrowing expenses. The foreign currencynon-monetary items measured by historical cost are also translated according to the spotexchange rate on the date of transaction, without changing the functional currency amountsthereof. The foreign currency non-monetary items measured by fair value are translatedaccording to the spot exchange rate on the fair value determination date and the differencearising therefrom is recognized in the Profits and losses or other comprehensive income for thecurrent period based on the nature of the items.
The Group translates the functional currency of its foreign business into RMB whilepreparing the financial statements. The assets and liabilities items in the balance sheet aretranslated according to the spot exchange rate on the balance sheet date, the shareholders’equity items are translated according to the spot exchange rate at the occurrence of the itemsexcept for “undistributed profits”; revenue and expenses items in the income statement aretranslated according to the average exchange rate during the period in which the transactionhappens (conversion shall be at the spot rate on the date of the transaction, unless exchangerate fluctuations make such conversion inappropriate). The translation differences of foreigncurrency statements arising from the above translations are recognized as other comprehensiveincome. For the disposal of foreign business, other comprehensive income relating to the foreignbusiness is recognized in the Profits and losses of the disposal for the current period and iscalculated pro rata for partial disposal.
Foreign currency cash flows and cash flows of overseas subsidiaries are converted usingthe average exchange rate for the period in which the cash flows occur (unless exchange ratefluctuations make the exchange rate inappropriate, the spot exchange rate on the day the cashflows occur) is used for conversion. The amount of impact of the changes in exchange rate oncash is separately stated in the cash flow statement as an adjustment item.
10. Financial instruments
√Applicable □Not applicable
Financial instruments refer to the contracts which form financial assets of an enterprise andform financial liabilities or equity instruments of other entities.
Recognition and de-recognition of financial instruments
The Group recognizes a financial asset or financial liability at the time of becoming a party toa financial instrument contract.
The Group will derecognize a financial asset (or a part of the financial asset or a part of agroup of similar financial assets), i.e. writing off the asset from its account and balance sheet, if:
(1) the right to collect cash flow from the financial asset has expired;
(2) The right to collect cash flows of financial assets has been transferred, or the obligationto pay the collected cash flows in full and in time to a third party under the “handover agreement”has been undertaken; and (a) all risks and rewards in the ownership of the financial assets havebeen substantially transferred, or (b) almost all risks and rewards in the ownership of thefinancial asset have been neither transferred nor retained, but control of the financial asset hasbeen waived.
If a financial liability has been fulfilled, revoked or expired, it will be derecognized. If anexisting financial liability is replaced by the same creditor with another financial liability undersubstantially different terms or the terms of the existing liability are substantially modified inwhole, the existing liability will be derecognized and the new liability will be recognized, and thedifference will be recognized in the Profits and losses for the current period.
For the transactions of financial assets in regular ways, the recognition and de-recognitionthereof will be conducted based on the accounting on the transaction date. Transactions offinancial assets in regular ways refer to the collection or delivery of financial assets within thetime limit prescribed by laws and regulation or prevailing practices in accordance with thecontract terms. The transaction date refers to the date when the Group promises to buy or sellthe financial assets.Classification and measurement of financial assetsBased on the Group’s business model for the management of financial assets and thefeatures of the contractual cash flow of financial assets, the Group’s financial assets areclassified at initial recognition into the financial assets that are measured by fair value and ofwhich the changes in fair value are recognized in the Profits and losses for the current period, thefinancial assets measured by amortized cost and the financial assets that are measured by fairvalue and of which the changes in fair value are recognized in other comprehensive income.
If a financial asset is measured by fair value at initial recognition, but the accountsreceivable or notes receivable from the sale of goods or rendering of service do not includesignificant financing components or the financing components with a term no longer than oneyear are not considered, the initial measurement will be made based on the transaction price.
For the financial assets that are measured by fair value and of which the changes in fairvalue are recognized in the Profits and losses for the current period, the related transaction feeswill be directly recognized in the Profits and losses for the current period; the related transactionfees of other financial assets will be recognized in the initially recognized amounts thereof.
The subsequent measurement of financial assets depends on the classification thereof:
Investment in debt instruments measured by amortized cost
A financial asset is classified into those measured by amortized cost, if the business modelfor the management of the asset is for the purpose of collecting contractual cash flow; and theterms of the contract of the asset stipulate that the cash flow generated on the specific date isonly the repayment of principal and the payment of interest on the outstanding principal. Theinterest income of such financial assets is recognized with the effective interest method, and thegains or losses from the de-recognition, modification or impairment thereof are all recognized inthe Profits and losses for the current period.
Investment in the equity instruments that are measured by fair value and of whichthe changes in fair value are recognized in other comprehensive income
The Group has irrevocably chosen to designate some non-trading equity instrumentinvestments as the financial assets that are measured by fair value and of which the changes infair value are recognized in other comprehensive income. Only the related dividend income(except for the dividend income expressly acting as a recovery of investment cost) is recognizedin the Profits and losses for the current period, while the subsequent changes in fair value arerecognized in other comprehensive income, and no provision is required for impairment. Whenthe financial assets are derecognized, the accumulated gains or losses previously recognized inother comprehensive income will be moved out of other comprehensive income and recognizedin retained earnings.
Financial assets that are measured by fair value and of which the changes in fairvalue are recognized in the Profits and losses for the current period
The financial assets other than the above financial assets measured by amortized cost andthe above financial assets that are measured by fair value and of which the changes in fair valueare recognized in other comprehensive income are classified as the financial assets that aremeasured by fair value and of which the changes in fair value are recognized in the Profits andlosses for the current period. Those financial assets are subsequently measured by fair valueand all changes in the fair value thereof are recognized in the Profits and losses for the currentperiod.
Classification and measurement of financial liabilities
The Group’s financial liabilities are classified at initial recognition into the financial liabilitiesthat are measured by fair value and of which the changes in fair value are recognized in theProfits and losses for the current period and other financial assets. For the financial liabilities thatare measured by fair value and of which the changes in fair value are recognized in the Profitsand losses for the current period, the related transaction fees are recognized directly in the
Profits and losses for the current period, while the related transaction fees of other financialliabilities are recognized in the initially recognized amounts thereof.The subsequent measurement of financial liabilities depends on the classification thereof:
Financial liabilities that are measured by fair value and of which the changes in fairvalue are recognized in the Profits and losses for the current period
The financial liabilities that are measured by fair value and of which the changes in fair valueare recognized in the Profits and losses for the current period include financial liabilities held fortrading (including the derivative instruments as financial liabilities) and the liabilities that aredesignated at initial recognition as the financial liabilities that are measured by fair value and ofwhich the changes in fair value are recognized in the Profits and losses for the current period.The financial liabilities held for trading (including the derivative instruments as financial liabilities)are subsequently measured by fair value and all changes in the fair value are recognized in theProfits and losses for the current period.
Other financial liabilities
Those financial liabilities are subsequently measured by amortized cost with the effectiveinterest method.
Impairment of financial instruments
The Group has treated and recognized the impairment of the financial assets measured byamortized cost based on the expected credit loss.
For receivables that do not contain significant financing components, the Group measuresthe loss provision based on the amount of expected credit loss equivalent to the entire durationunder a simplified measurement method,
For the financial assets not measured with the simplified method, the Group evaluates oneach balance sheet date whether their credit risks have increased significantly since the initialrecognition. If the credit risk of a financial asset has not increased significantly since the initialrecognition, the asset is in the first stage and the Group will make provision for loss based on theamount of expected credit loss within the coming 12 months and calculate interest income basedon the book balance and effective interest rate; if the credit risk has increased significantly sincethe initial recognition, but credit has not been impaired, the asset is in the second stage and theGroup will make provision for loss equivalent to the amount of expected credit loss during theentire term and calculate interest income based on the book balance and effective interest rate;if credit has been impaired after the initial recognition, the asset is in the third stage and theGroup will make provision for loss equivalent to the amount of expected credit loss during theentire term and calculate interest income based on the amortized cost and effective interest rate.
The Group evaluates the expected credit losses of financial instruments on the individualand group bases. It evaluates the expected credit loss of accounts receivable by taking intoaccount the credit risk characteristics of different clients and based on the account aging-basedasset groups.
For the disclosure of the Group’s criteria for a significant increase in credit risk, definition ofthe assets whose credit has been impaired and assumptions for the measurement of expectedcredit loss, please refer to Notes X. 2.
The factors reflected in the Group's method of measuring expected credit losses of financialinstruments include: unbiased probability-weighted average amount determined by evaluating aseries of possible outcomes; time value of money; no unnecessary additional cost or effort on thebalance sheet date Reasonable and evidence-based information that is readily available aboutpast events, current conditions and forecasts of future economic conditions.
When the Group no longer reasonably expects that it can recover the contractual cash flowof a financial asset in whole or in part, it will directly write down the book balance of the asset.
11. Notes receivable
Determination and accounting treatment of the expected credit loss of notes receivable
□Applicable √Not applicable
12. Accounts receivable
Determination and accounting treatment of the expected credit loss of accountsreceivable
√Applicable □Not applicable
Please refer to Notes X. Risks Associated with Financial Instruments
13. Accounts receivable financing
□Applicable √Not applicable
14. Other receivables
Determination and accounting treatment of the expected credit loss of other receivables
√Applicable □Not applicable
Please refer to Notes X. Risks Associated with Financial Instruments
15. Inventory
√Applicable □Not applicable
Inventory includes raw materials, work-in-progress materials, finished goods, real estatedevelopment costs and real estate development products.
Inventory is initially measured by cost. The costs of inventory except development costs anddevelopment products include the procurement cost, processing cost and other costs. Theactual costs of items out of inventory are determined with the weighted average method.Work-in-progress materials include low-value consumables and packages, which are amortizedwith the one-off amortization method.
Development costs refer to the properties that have not been completed and are developedfor the purpose of being sold. Development products refer to the properties that have beencompleted and are ready for sale. The actual costs of real estate development costs anddevelopment products include the land acquisition cost, expenditures on construction andinstallation works, capitalized interest and other direct and indirect development expenses. Theuse right of the land for development purpose at the development of a project is amortized andrecognized as the development cost of the project based on the site area of the developmentproduct, and the development cost will be changed over to development product after beingcompleted.
If the public auxiliary facilities are completed earlier than the related development product,the facilities will be allocated to and recognized in the development cost of related developmentproject based on the floor space of the project after final accounting of the facilities uponcompletion; if the public auxiliary facilities are completed later than the related developmentproduct, they will be recognized in the development cost of related development project basedon the predicted cost of the public auxiliary facilities.
Hotel, catering and fresh goods inventories are subject to onsite inventory, while otherinventories are subject to perpetual inventory.
On the balance sheet date, inventory is measured by cost and net realizable value,whichever is lower. If the cost is higher than the net realizable value, provision will be made forinventory depreciation, which will be recognized in the Profits and losses for the current period.Net realizable value is the estimated selling price of inventory less the cost estimated to occur asof completion, estimated sales expenses and related taxes. In principle, provisions for inventorydepreciation shall be made for inventory items individually. For the inventory with a large quantityand a low unit price, inventory depreciation provision will be made based on the Groups of items.
16. Contract assets
(1). Determination and criteria for contract assets
√Applicable □Not applicable
The Group presents contractual assets or contractual liabilities in the balance sheet basedon the relationship between performance obligations and customers’ payments. The Groupoffsets the contractual assets and contractual liabilities under the same contract as a netamount.
A contractual asset refers to the right to receive a consideration for the transfer of goods orservices to a customer, and this right depends on the factors other than the passage of time.
(2). Determination and accounting treatment of the expected credit loss of contract
assets
√Applicable □Not applicable
Please refer to Note V.10. Financial Instruments for details.
17. Held-for-sale assets
□Applicable √Not applicable
18. Debt investments
Determination and accounting treatment of the expected credit loss of debt investments
√Applicable □Not applicable
Please refer to Notes X. Risks Associated with Financial Instruments
19. Other debt investments
Determination and accounting treatment of the expected credit loss of other debtinvestments
□Applicable √Not applicable
20. Long-term receivables
Determination and accounting treatment of the expected credit loss of long-termreceivables
√Applicable □Not applicable
Please refer to Notes X. Risks Associated with Financial Instruments
21. Long-term equity investment
√Applicable □Not applicable
Long-term equity investment includes equity investment in subsidiaries, joint ventures andassociates.
Long-term equity investment is initially measured by the initial investment cost at the time ofbeing acquired. For a long-term equity investment acquired through a business merger under thesame control, the initial investment cost is the share of the book value of the merged party’sowner’s equity acquired on the merger date in the ultimate controlling party’s consolidatedfinancial statements; The difference between the initial investment cost and the book value of themerger consideration is adjusted to the capital reserve (if it is insufficient to offset, the retainedearnings will be offset); other comprehensive income before the merger date is accounted for onthe same basis as that for the investee’s direct disposal of related assets or liabilities whendisposing of the investment. The shareholders’ equity recognized by the investee due to thechanges in shareholders’ equity other than net Profits and losses, other comprehensive income,and profit distribution is transferred to the current Profits and losses when the investment isdisposed of; those that are still long-term equity investments after disposal are carried forward inproportion, and those that are converted into financial instruments after disposal are carriedforward in full. For a long-term equity investment acquired through a business merger not underthe same control, the merger cost shall be used as the initial investment cost (for the businessmerger not under the same control realized step by step in a package deal, the sum of the bookvalue and the new investment cost on the acquisition date is used as the initial investment cost).The merger cost includes the sum of fair values of the assets paid, the liabilities incurred orassumed, and the equity securities issued by the acquirer; the other comprehensive income heldprior to the acquisition date that is recognized for accounting under the equity method isaccounted for on the same basis as that for the investee’s direct disposal of related assets orliabilities when disposing of the investment. The shareholders’ equity recognized by the investeedue to the changes in shareholders’ equity other than net Profits and losses, othercomprehensive income, and profit distribution is transferred to the current Profits and losseswhen the investment is disposed of; those that are still long-term equity investments afterdisposal are carried forward in proportion, and those that are converted into financial instrumentsafter disposal are carried forward in full. The initial investment costs of the long-term equityinvestment acquired other than through merger are determined with the following methods: if aninvestment is acquired through the payment of cash, its initial investment cost consists of thepurchase price actually paid and the expenses, taxes and other necessary expenses directly
relating to the acquisition of the investment; and if an investment is acquired through the offeringof equity securities, its initial investment cost is the fair value of the equity securities offered.For the accounting of the long-term equity investment through which the Company canexercise control over the investees, the Company adopts the cost method in individual financialstatements. Control refers to the power over an investee, with which the investor enjoys variablereturn by participating in the investee’s related activities and is able to exercise its power over theinvestee to affect the amount of return.In the cost method, the long-term equity investment is measured by initial investment cost. Ifthe investment is added or recovered, the cost of long-term equity investment will be adjusted.The cash dividend or profit declared by the investees to be distributed is recognized as theinvestment income for the current period.If the Group has joint control over or significant influence on the investee, the long-termequity investment will be measured with the equity method. Joint control refers to joint controlover an arrangement in accordance with related agreements, and decisions on the activitiesrelating to the arrangement shall be made only after the parties sharing the control reach anagreement. Significant influence refers to the power over the decision-making on the financialaffairs and business policies of the investee, but the investor does not have control or jointcontrol with others over the formulation of those policies.In the equity method, if the initial investment cost of long-term equity investment is higherthan the share enjoyed by the Group in the fair value of the investee’s identifiable net assets atinvestment, the excess will be recognized in the initial investment cost of the long-term equityinvestment; if the initial investment cost of long-term equity investment is lower than the shareenjoyed by the Group in the fair value of the investee’s identifiable net assets at investment, thedifference will be recognized in the Profits and losses for the current period and the cost of thelong-term equity investment will be adjusted simultaneously.In the equity method, after long-term equity investment is acquired, the investment gains orlosses and other comprehensive income shall be recognized and the book value of the long-termequity investment shall be adjusted based on the share in the net gains or losses and othercomprehensive income realized by the investees to be enjoyed or assumed. The share in theinvestee’s net gains or losses to be enjoyed shall be determined based on the fair value of theinvestee’ s identifiable assets at the acquisition of investment, according to the Group’saccounting policies and accounting periods and after net profits of the investee are adjusted withthe portion of gains or losses from the internal transactions with its associates and joint venturesthat is attributable to the investor based on the share to be enjoyed by it (but if the loss frominternal transactions falls in the assets impairment loss, it shall be recognized in full) offset,except for the invested and sold assets that constitute businesses. The book value of long-termequity investment shall be reduced according to the share to be enjoyed by it in the profits orcash dividend declared by the investees to be distributed. For an investee’s net lossesrecognized by the Group, the book value of the long-term equity investment and other long-termequity that substantially constitute net investment in the investee shall be written down to zero atmaximum, except for the extra losses for which the Group is liable. For the investee’s otherchanges in shareholders’ equity other than net gains or losses, other comprehensive income andprofit distribution, the book value of the long-term equity investment will be adjusted and thechanges will be recognized in the shareholders’ equity.For the disposal of long-term equity investment, the difference between the book value oflong-term equity investment and the proceeds actually received from the disposal thereof isrecognized in the profits or loss for the current period. For the long-term equity investmentmeasured with the equity method, if the equity method is terminated due to the disposal, theoriginal related other comprehensive income measured with the equity method will be accountedon the same basis as that for the direct disposal of related assets or liabilities by the investees,and the shareholders’ equity recognized due to the investees’ other changes in shareholders’equity than net gains or losses, other comprehensive income and profit distribution will berecognized in the profits or loss for the current period in full; if the equity method is still adopted,the original related other comprehensive income measured with the equity method will beaccounted on the same basis as that for the direct disposal of related assets or liabilities by theinvestees and recognized in the profits or loss for the current period pro rata, and theshareholders’ equity recognized due to the investees’ other changes in shareholders’ equity than
net gains or losses, other comprehensive income and profit distribution will be recognized in theProfits and losses for the current period pro rata.
22. Property investment
(1). Under cost measurement model
Depreciation or amortization methodsA property investment is a real estate property held with the intention of earning rents or ofcapital appreciation or both, including land use rights that have been leased, land use rights thatare held and ready to be transferred after appreciation, and buildings that have been leased.
Property investments are initially measured by cost. The subsequent expenses relating toan property investment will be recognized in the cost of the property investment if the economicbenefits relating to the asset are very likely to flow in and the cost thereof can be measuredreliably. Otherwise, they will be recognized in the Profits and losses for the current period at thetime of being incurred.The Group subsequently measures its property investments with the cost model. Thedepreciation/amortization of property investments is calculated on a straight line basis. Theservice life, estimated net residual value and annual depreciation rate of property investmentsare as follows:
Category | Service life | Estimated net residual value | Annual depreciation rate |
Buildings and structures | 20-30 years | 4% | 3.2%-4.8% |
Land use right | 40-50 years | - | 1.4%-2.5% |
23. Fixed assets
(1). Recognition requirements
√Applicable □Not applicable
A fixed asset will be recognized only if the economic benefits relating thereto are very likelyto flow into the Group and its cost can be measured reliably. If meeting the above recognitionrequirement, the subsequent expenses relating to a fixed asset will be recognized in the cost ofthe fixed asset, and the book value of the replaced part will be deleted; otherwise, thesubsequent expenses will be recognized in the Profits and losses for the current period at thetime of being incurred.
Fixed assets are initially measured by cost. The costs of purchasing a fixed asset includethe purchase price, related taxes and other expenses that are incurred before the fixed asset ismade to the predetermined ready-for-use status and are directly attributable to the asset.
The Group reviews and makes adjustment to, if necessary, the service life, estimatedresidual value and depreciation method of its fixed assets at least at the end of each year.
(2). Depreciation methods
√Applicable □Not applicable
Category | Depreciation methods | Depreciation period (number of years) | Residual value rate | Annual depreciation rate |
Buildings and structures | Straight-line method | 10-40 | 4% | 2.4%-9.6% |
General equipment | Straight-line method | 5-10 | 4% | 9.6%-19.2% |
Transportation equipment | Straight-line method | 6 | 4% | 16.0% |
(3). Identification basis, pricing and depreciation method of the fixed assets under
financial lease
√Applicable □Not applicable
The depreciation method for the fixed assets under financial lease are the same as that forproprietary fixed assets. If it can be reasonably determined that the ownership of a leased assetwill be acquired upon expiry of the lease term, the depreciation will be based on its service life; ifit cannot be reasonably determined that the ownership of a leased asset can be acquired uponexpiry of the lease term, the depreciation will be based on the lease term or the service life of theasset, whichever is shorter.
24. Construction in progress
√Applicable □Not applicable
The cost of construction in progress is determined based on the actual expenses, includingthe necessary expenses on the works incurred during the construction, the borrowing costsincurred before the works reach the predetermined ready-for-use status that shall be capitalizedand other related expenses.
The construction in progress will be recognized as fixed assets, property investment andlong-term prepaid expenses when reaching the predetermined ready-for-use status.
25. Borrowing costs
√Applicable □Not applicable
Borrowing costs refer to the interests incurred by the Group for its borrowings and otherrelated costs, including interest, amortization of discounts or premiums, ancillary costs andexchange difference arising from foreign currency borrowings.
Borrowing costs that are directly attributable to the acquisition, construction or production ofthe assets qualified for capitalization shall be capitalized, and other borrowing costs shall berecognized in the Profits and losses for the current period. The assets qualified for capitalizationrefer to the fixed assets, property investment, inventory and other assets that can reach thepredetermined ready-for-use or sale status only after a quite long time of acquisition,construction or production.
Borrowing costs can start to be capitalized only if they meet the following requirementssimultaneously:
(1) the expenses on assets have been incurred;
(2) the borrowing costs have been incurred;
(3) The purchase, construction or production activities necessary to make the asset reachthe intended usable or saleable status have started.
The borrowing costs for the assets qualified for capitalization shall cease being capitalizedwhen the assets reach the predetermined ready-for-use or sale status after the acquisition,construction or production. The borrowing costs incurred subsequently will be recognized in theProfits and losses for the current period.
During capitalization, the amount of interest to be capitalized during each accounting periodis determined as follows:
For special borrowings, the amount of interest to be capitalized is the interest expensesactually incurred during the current period less the temporary deposits interest income orinvestment income.
(2) For occupied general borrowings, it is calculated and determined based on the weightedaverage of asset expenditures of the accumulated asset expenditure exceeding the portion ofspecial borrowings multiplied by the weighted average interest rate of the occupied generalborrowings.
If an asset qualified for capitalization is interrupted abnormally for more than three monthsduring its acquisition, construction or production except due to the necessary procedures for it toreach the predetermined ready-for-use or sale status, the capitalization of its borrowing costs willbe suspended. The borrowing costs incurred during the interruption will be recognized asexpenses and in the Profits and losses for the current period until the acquisition, construction orproduction of the asset is resumed.
26. Biological assets
□Applicable √Not applicable
27. Oil and gas assets
□Applicable √Not applicable
28. Right-of-use assets
√Applicable □Not applicable
The Group's right-of-use asset classes mainly include buildings and lands.On the commencement date of the lease term, the Group recognizes its right to use theleased asset during the lease term as a right-of-use asset, which is initially measured at cost.Costs of right-of-use assets include: the initial measurement amount of the liabilities of the lease;The amount of the lease payment paid on or before the commencement date of the lease term,where there is a lease incentive, shall be deducted from the amount of the lease incentivealready enjoyed; Initial direct costs incurred by lessee; Costs expected to be incurred by theLessee to disassemble and remove the leased asset, restore the leased asset to the site, orrestore the leased asset to the state agreed upon in the lease terms. If the Group re-measureslease liabilities in accordance with the relevant provisions of the lease standards, the book valueof the right-of-use asset shall be adjusted accordingly. The Group subsequently shall adopt thestraight-line method for the depreciation of the usufruct assets. Where the ownership of theleased asset can be reasonably determined at the end of the lease term, the Group shall takedepreciation during the remaining useful life of the leased asset. Where it is not reasonablycertain that ownership of the leased asset will be acquired at the end of the lease term, the Groupshall make depreciation within the shorter period of the lease term or the remaining useful life ofthe leased asset.
29. Intangible assets
(1). Measurement method, service life and impairment test
√Applicable □Not applicable
Intangible assets will be recognized only if the economic benefits relating thereto are verylikely to flow into the Group and the costs thereof can be measured reliably, and will be initiallymeasured by cost. However, the intangible assets acquired from the merger of the enterprisesnot under common control will be individually recognized so long as the fair values thereof canbe measured reliably, and will be measured by fair value.The service life of an intangible asset is determined based on the term during which it canbring economic benefits to the Group. If the term during which an intangible asset can bringeconomic benefits to the Group is unforeseeable, it will be deemed as an intangible asset withuncertain service life.
The service life of intangible assets is as follows:
Category | Service life |
Land use right | 40-50 years |
Software and software copyright | 10 years |
The land use rights acquired by the Group are generally accounted as intangible assets.The buildings constructed by the Group itself, the related land use rights and buildings areaccounted as intangible assets and fixed assets respectively. The price paid for the land andbuildings purchased externally shall be allocated between the land use rights and buildings. If itis hard to reasonably allocate the price, the price in full will be treated as fixed assets.
The intangible assets with finite service life shall be amortized with the straight-line methodduring their service life. The Group reviews and makes adjustment to, if necessary, the servicelife and amortization method of its intangible assets with finite service life at least at the end ofeach year.
(2). Accounting policies for internal R&D expenses
√Applicable □Not applicable
The Group divides expenditures for internal R & D projects into research expenditures anddevelopment expenditures. Research expenses are recognized in the Profits and losses for the
current period at the time of being incurred. Development expenditures can be capitalized onlywhen all of the following conditions are met at the same time, that is, it is technically feasible tocomplete the intangible asset to make them usable or saleable; there is an intention to completethe intangible asset and use or sell it; the way for intangible assets to generate economicbenefits, including the ability to prove that there are markets for the products generated by theintangible assets or the intangible assets themselves. Intangible assets that will be usedinternally can prove their usefulness; there are sufficient technology, financial resources andother resource supports to complete the development of the intangible asset and ability to use orsell the intangible asset; the expenditure attributable to the development of such intangible assetcan be reliably measured. Development expenditures that do not satisfy the above conditionsare included in the current profits and losses when incurred.
30. Impairment of long-term assets
√Applicable □Not applicable
The Group determines the impairment of the assets other than inventory, deferred incometax and financial assets with the following methods.
On the balance sheet date, the Group judges whether there is any sign of possibleimpairment of assets. If there is any sign of impairment, the Group will estimate its recoverableamount and conduct an impairment test; Uncertain intangible assets and intangible assets notyet ready for use shall be tested for impairment at least at the end of each year, no matterwhether there is any sign of impairment.
The recoverable value of an asset is determined based on the fair value of the asset less thedisposal expenses or the present value of the expected future cash flows of the asset, whicheveris higher. The Group estimates the recoverable value of each asset. For an asset whoserecoverable value is hard to be estimated, the Group estimates the recoverable value of theassets group which the asset belongs to. An assets group is identified based on whether themain cash inflows from the Group are independent from the cash inflows from other assets orassets groups.
When the recoverable value of an asset or assets group is lower than its book value, theGroup will write down its book value to the recoverable value and the amount written down will berecognized in the Profits and losses for the current period; meanwhile, it will make provision forthe impairment thereof.
In terms of goodwill impairment tests, the book value of the goodwill formed in the businessmerger shall be allocated to the relevant asset group under a reasonable method from the dateof acquisition; if it is difficult to allocate to the relevant asset group, it shall be allocated to therelevant combination of asset groups. The relevant asset group or asset group combination is anasset group or asset group combination that can benefit from the synergistic effect of a businesscombination, and is not larger than the reporting segment determined by the Group.
When an impairment test on a related asset group or combination of asset groups thatcontains goodwill is made, if there are indications of impairment for an asset group orcombination of asset groups related to goodwill, the asset group or combination of asset groupsthat does not contain goodwill shall be tested for impairment first, to calculate the recoverableamount and recognize the corresponding impairment loss. Then, an impairment test isconducted on the asset group or asset group combination containing goodwill to compare itsbook value with the recoverable amount. If the recoverable amount is lower than the book value,the impairment loss amount will be first offset and apportion to the book value of goodwill in theasset group or asset group combination. Then the book value of other assets shall be offsetproportionally according to the proportion of the book value of other assets except goodwill in theasset group or asset group combination.
The above assets impairment loss will not be reversed during the subsequent accountingperiods.
31. Long-term prepaid expenses
√Applicable □Not applicable
Long-term prepaid expenses are amortized with the straight-line method and theamortization periods are as follows:
Category | Amortization period |
Architectural ornaments of buildings | 3-5 years |
Advertising facilities | 3-5 years |
32. Contract liabilities
Recognition of contract liabilities
√Applicable □Not applicable
The Group presents contractual assets or contractual liabilities in the balance sheet basedon the relationship between performance obligations and customers’ payments. The Groupoffsets the contractual assets and contractual liabilities under the same contract as a netamount.A contractual liability refers to an obligation to transfer goods or services to a customer forthe consideration received or receivable from the customer, such as the amount received by theenterprise before the transfer of committed goods or services.
33. Employee compensations
(1)、Accounting treatment of short-term compensations
√Applicable □Not applicable
The short-term compensations actually incurred during the accounting period when theemployees provide service for the Group are recognized as liabilities and are recognized in theProfits and losses for the current period or costs of related assets.
(2)、Accounting treatment of post-employment benefits
√Applicable □Not applicable
The employees of the Group participate in the endowment insurance and unemploymentinsurance managed by the local government, as well as the enterprise annuity, and thecorresponding expenditures are included in the relevant asset cost or current Profits and losseswhen incurred.
(3)、Accounting treatment of severance benefits
√Applicable □Not applicable
Where the Group provides severance benefits to its employees, the employeecompensation liabilities arising from the severance benefits will be recognized, and the amountwill be recognized in the Profits and losses for the current period on the earlier date below: thedate when the Group cannot unilaterally withdraw the severance benefits provided as a result ofthe employment termination plan or downsizing proposal; or the date when the Grouprecognizes the costs or expenses relating to the reorganization involving the payment ofseverance benefits.
(4)、Accounting treatment of other long-term employee benefits
□Applicable √Not applicable
34. Lease liabilities
√Applicable □Not applicable
At the commencement date of the lease period, the Group recognizes the present value ofthe outstanding lease payments as a lease liability, except for short term and low value leases.Lease payments include fixed payments and substantial fixed payments after deduction of leaseincentives, variable lease payments depending on indexes or ratios, payments expected to bemade based on security balances, and also include the exercise price of the purchase option orpayments to exercise the option to terminate the lease, provided that the Group is reasonablycertain that the option will be exercised or that the lease period reflects that the Group willexercise the option to terminate the lease.
In calculating the present value of the lease payments, the Group uses the lease embeddedinterest rate as the discount rate; If the inherent interest rate of the lease cannot be determined,the lessee's incremental borrowing rate shall be used as the discount rate. The Group calculatesthe interest expense of the lease liability in each period of the lease term in accordance with thefixed cyclical interest rate and records it into the current Profits and losses, except as otherwisestipulated in the cost of the relevant assets. The variable lease payment not included in themeasurement of lease liabilities shall be recorded into the Profits and losses of the current periodwhen it actually occurs, except for those included in the cost of related assets as otherwisestipulated.After the commencement date of the lease term, the Group increases the book amount ofthe lease liability when recognizing interest, and decreases the carrying amount of the leaseliability when paying the lease payment. When the actual fixed payment amount changes, theexpected payable amount of the guarantee residual value changes, the index or ratio used todetermine the lease payment amount changes, the evaluation result of the purchase option, thelease renewal option or the termination option or the actual exercise situation changes, theGroup will re-measure the lease liabilities according to the current value of the changed leasepayment amount, and adjust the book value of the right-of-use assets accordingly.
35. Estimated liabilities
√Applicable □Not applicable
Except for the contingent considerations and contingent liabilities assumed in the mergersof enterprises not under common control, an obligation relating to contingent matters will berecognized by the Group as estimated liabilities if meeting the following requirementssimultaneously:
(1) The obligation is a current obligation assumed by the Group;
(2) The performance of the obligation may result in the outflow of economic benefits from theGroup;
(3) The amount of the obligation can be measured reliably.
Estimated liabilities are initially measured based on the best estimate of the expensesrequired for the performance of related current obligations, and the risks, uncertainties and timevalue of money relating to the contingent matters are also factored in. The book value ofestimated liabilities is reviewed on each balance sheet date. If any conclusive evidence indicatesthat the book value cannot reflect the current best estimate, the book value will be adjustedbased on the current best estimate.
36. Share-based payment
√Applicable □Not applicable
Share-based payment is divided into equity-settled share-based payment and cash-settledshare-based payment. An equity-settled share-based payment refers to a deal in which theGroup uses shares or other equity instruments as the consideration for settlement to obtainservices.
The equity-settled share-based payment in exchange for services provided by employeesshall be measured at the fair value of the equity instruments granted to employees. If it can beexercised immediately after the grant, it shall be included in the relevant costs or expenses at fairvalue on the grant date, and the capital reserve shall be increased accordingly; if it cannot beexercised until the service within the waiting period has been completed or the specifiedperformance conditions have been satisfied on each balance sheet date during the waitingperiod, the Group will, based on the best estimate of the number of exercisable equityinstruments, include the services acquired in the current period, as relevant costs or expensesbased on the fair value on the grant date, and increase the capital reserve accordingly .
None of cost or expense shall be recognized for a share payment that cannot be exerciseddue to failure to meet non-market conditions and/or service period conditions. Where marketconditions or non-exercising conditions are stipulated in the share-based payment agreement,regardless of whether the market conditions or non-exercising conditions are satisfied, it shall bedeemed as exercisable as long as all other performance conditions and/or service periodconditions have been satisfied.
If the equity-settled share payment is canceled, it will be treated as an accelerated exerciseon the cancellation day, and the unrecognized amount shall be recognized immediately. If anemployee or other party has option to satisfy the non-exercising conditions but fails to satisfywithin the waiting period, it shall be treated as cancellation of equity-settled share-basedpayment. However, if a new equity instrument is granted and if it is determined that the newequity instrument granted is used to replace the canceled equity instrument on the grant date ofthe new equity instrument, the replacement equity instruments granted in the same way shall betreated in the same way as that for the modification of the terms and conditions for the originalequity instrument.
37. Preferred shares, perpetual bonds and other financial instruments
□Applicable √Not applicable
38. Revenue
(1). Accounting policies for the recognition and measurement of revenue
√Applicable □Not applicable
The Group recognizes incomes when it has fulfilled its performance obligations in thecontract, that is, the customer has acquired the control over the relevant goods or services. Theacquisition of the control over related goods or services means the ability to control the use of thegoods or the provision of the service and obtain almost all of the economic benefits from them.Commodity sales contractsCommodity sales contracts between the Group and customers usually only includeperformance obligations for the transferred commodities. The Group generally recognizesincomes on the basis of comprehensive consideration of the following factors, at the time whenthe customer obtains control of the relevant products: the acquisition of the current right toreceive payment for the commodities, the transfer of the major risks and rewards in theownership of the commodities, the transfer of the legal ownership of the commodities, thetransfer of the physical assets of the commodities, and the acceptance of the commodities by thecustomer.
Service contracts
The service contracts between the Group and its customers usually include performanceobligations such as the provision of the use of shops in Yiwu Market and its operating supportingservices, the provision of hotel accommodation services and hotel catering services, and theprovision of fixed-term paid funding services to related parties outside the Group.
The use of shops in Yiwu Market and its supporting services
Since customers obtain and consume the economic benefits brought about by the Group’sperformance at the time of the performance by the Group, the Group regards them as aperformance obligation to be fulfilled within a certain period of time and recognizes an incomebased on the performance progress, except that the performance progress cannot bereasonably determined. Under the output method, the Group determines the performanceprogress of the provision of the use of shops in Yiwu Market and the supporting services for itsoperation based on the number of using days of the shops When the performance progresscannot be reasonably determined, if the cost incurred by the Group is expected to becompensated, the income shall be recognized according to the amount of the cost incurred untilthe performance progress can be reasonably determined.
Hotel accommodation business
Since customers obtain and consume the economic benefits brought about by the Group’sperformance at the time of the performance by the Group, the Group regards them as aperformance obligation to be fulfilled within a certain period of time and recognizes an incomebased on the performance progress, except that the performance progress cannot bereasonably determined. In accordance with the output method, the Group determines theperformance progress of hotel accommodation services based on the number of staying days. .When the performance progress cannot be reasonably determined, if the cost incurred by theGroup is expected to be compensated, the income shall be recognized according to the amountof the cost incurred until the performance progress can be reasonably determined.
Hotel catering business
For individual performance obligations in the provision of hotel catering services, the Groupprices hotel catering services separately, and uses the completion of hotel catering services asthe point of income recognition.
Fixed -time paid funding services
Since customers obtain and consume the economic benefits brought about by the Group’sperformance at the time of the performance by the Group, the Group regards them as aperformance obligation to be fulfilled within a certain period of time and recognizes an incomebased on the performance progress, except that the performance progress cannot bereasonably determined. Under the output method, the Group determines the performanceprogress of the services for the fixed-term paid funding services based on the number of usingdays of funds. When the performance progress cannot be reasonably determined, if the cost
incurred by the Group is expected to be compensated, the income shall be recognized accordingto the amount of the cost incurred until the performance progress can be reasonably determined.
(2). Differences in the revenue recognition policies for the same business under different
business models
□Applicable √Not applicable
39. Contract cost
√Applicable □Not applicable
The Group's assets related to contract costs include contract acquisition costs and contractperformance costs. According to their liquidity, they are presented in inventory, other currentassets and other non-current assets respectively.
If the incremental cost incurred by the Group to acquire a contract is expected to berecoverable, it is recognized as an asset as the contract acquisition cost, unless the amortizationperiod of the asset does not exceed one year.
If the cost incurred by the Group for the performance of the contract does not apply to thescope of the relevant standards such as inventory, fixed assets or intangible assets, and meetsthe following conditions at the same time, it is recognized as an asset as the cost of contractperformance:
(1) The cost is directly related to a current or expected contract, including direct labor, directmaterials, manufacturing expenses (or similar expenses), costs clearly borne by the customer,and other costs incurred only because of the contract;
(2) The cost increases the resources that the enterprise will use to fulfill the contractobligations in the future;
(3) The cost is expected to be recoverable.
The Group amortizes the assets related to contract costs on the same basis as the revenuerecognition related to the assets, and includes them in the current Profits and losses.
For assets related to contract costs, if the book value is higher than the difference betweenthe following two items, the Group will make provision for impairment for the excess part andrecognize it as asset impairment loss:
(1) The remaining consideration that the enterprise expects to obtain due to the transfer ofgoods or services related to the asset;
(2) Estimated costs to be incurred for the transfer of the relevant goods or services.
40. Government grants
√Applicable □Not applicable
A government grant is recognized when it can meet the requirements and can be received.If a government grant falls in monetary assets, it will be measured by the amount received orreceivable. If a government grant does not fall in monetary assets, it will be measured by fairvalue. If the fair value of a grant cannot be determined reliably, it will be measured by its nominalamount.
A government grant prescribed by government documents to be used to acquire orconstruct or otherwise form long-term assets will be deemed as an asset-related governmentgrant; if no government documents have express provisions, the grants that are used to acquireor construct or otherwise form long-term assets will be deemed as asset-related governmentgrants and others as income-related government grants.
The income-related government grants that are used to compensate for the related costs,expenses or losses during the subsequent periods are recognized as deferred income and willbe recognized in the Profits and losses or against the related costs for the period when therelated costs, expenses or losses are recognized. The income-related government grants usedto compensate for the related costs, expenses or losses that have been incurred are directlyrecognized in the Profits and losses or against the related costs for the current period.
The asset-related government grants shall be used to offset the book value of related assets;or recognized as deferred income, and included in Profits and losses in stages under areasonable and systematic method during the useful life of the related assets (but government
grants measured at a nominal amount shall be directly included in the current Profits and losses);if the relevant asset is sold, transferred, scrapped or damaged before the end of its useful life, thebalance of the undistributed deferred income shall be transferred to the current Profits andlosses when the asset is disposal.If the finance allocates the discounted funds to the loan bank, and the loan bank providesthe Group with a loan at a policy-oriented preferential interest rate, the Group takes the actualloan amount received as the book value of the loan, and the loan principal and the policy Thepreferential interest rate calculates the relevant borrowing costs.
41. Deferred income tax assets and deferred income tax liabilities
√Applicable □Not applicable
The Group recognizes deferred income tax with the balance sheet liability method based onthe temporary difference between the book value of assets and liabilities on the balance sheetdate and the tax base and that between the book value of the items that have not beenrecognized as assets and liabilities but whose tax base can be determined according to the taxlaw and the tax base thereof.All taxable temporary differences will be recognized as deferred income tax liabilities,unless:
(1) The taxable temporary difference is generated in the following types of transactions: theinitial recognition of goodwill, or the initial recognition of assets or liabilities generated in atransaction with the following characteristics: the transaction is not a business merger, andneither affecting accounting profits, nor impacting taxable incomes or deductible losses.
(2) For taxable temporary differences related to investments in subsidiaries, joint venturesand associated enterprises, the time for the reversal of the temporary differences can becontrolled and the temporary differences may not be reversed in the foreseeable future.
For the deductible temporary differences and the deductible losses and tax deductions thatcan be carried forward to the subsequent years, the Group recognizes the deferred income taxassets arising therefrom within the limit of the future taxable income that is very likely to beobtained and used to be offset against the deductible temporary differences, deductible lossesand tax deductions, unless:
(1) The deductible temporary differences are generated in the following transactions: Thetransaction is not a business combination, and when the occurrence of the transaction affectsneither accounting profits nor taxable income or deductible losses.
(2) For deductible temporary differences related to investments in subsidiaries, jointventures and associates, if all of the following conditions are satisfied simultaneously, thecorresponding deferred income tax assets are recognized: the temporary differences are likely tobe reversed in the foreseeable future, and it is likely to obtain taxable income that can be used tooffset the deductible temporary differences in the future.
The Group measures, on the balance sheet date, the deferred income tax assets andliabilities based on the applicable tax rate for the period when the assets are expected to berecovered or the liabilities are expected to be paid off, in accordance with the tax law, which willalso reflect the impact of the way of the expected recovery of assets or repayment of liabilities onthe income tax on the balance sheet date.
The Group reviews the book value of deferred income tax assets on the balance sheet date.If it is very likely to be unable to acquire adequate taxable income to be offset against the benefitsof deferred income tax assets in the future, the book value of deferred income tax assets will bewritten down. On the balance sheet date, the Group re-evaluates the unrecognized deferredincome tax assets and recognizes the same to the extent that it is very likely to acquire adequatetaxable income to reverse all or part of the deferred income tax assets.
If all the following requirements are met, deferred income tax assets and liabilities will bepresented in net amount after offsetting: the Group has the legal right to settle the current incometax assets and liabilities in net amount; the deferred income tax assets and liabilities are relatedto the income tax levied by an identical tax authority on an identical taxpayer, or are related to theincome tax levied by an identical tax authority on different taxpayers, but during each importantperiod when the deferred income tax assets and liabilities are reversed, the involved taxpayers
intend to settle the current income tax assets and liabilities in net amount or acquire assets orpay off debts simultaneously.
42. Lease
(1). Accounting treatment of operating lease
□Applicable √Not applicable
(2). Accounting treatment of financial lease
□Applicable √Not applicable
(3). Determination and accounting treatment of leases under the new lease standards
√Applicable □Not applicable
On the commencement date of the contract, the Group evaluates whether the contract is alease or an inclusive lease if a party in the contract cedes the right to control the use of one ormore identified assets for a certain period in exchange for consideration.As a tenantSee Note V. 28 and Note V. 34 for the general accounting treatment of the Group as alessee.Short-term leases and leases of low-value assetsThe Group regards leases with a lease term shorter than 12 months and excluding purchaseoptions as short-term leases on the commencement date of the lease term; leases with a valuenot exceeding RMB 40,000 when a single leased asset is a brand-new asset is identified as alow-value asset lease. If the Group subleases or expects to sublease the leased assets, theoriginal lease is not recognized as a low-value asset lease. The Group chooses not to recognizeright-of-use assets and lease liabilities for short-term leases and leases of low-value assets. Ineach period of the lease term, it is included in the relevant asset cost or current Profits and losseson a straight-line basis.
As a lessor
The lease that transfers virtually all the risks and rewards related to the ownership of theleased asset on the lease commencement date is a finance lease, and other leases areoperating leases.
The Group as the lessor to operating leases
Rental income from operating leases is recognised in Profits and losses on a straight-linebasis over each period of the lease term, and variable lease payments not included in leasereceipts are included in Profits and losses for the current period when actually incurred. Thecapitalized initial direct expenses shall be amortized on the same basis recognized with therental income during the lease period, and shall be included in the current Profits and losses ininstallments.
43. Other important accounting policies and accounting estimates
√Applicable □Not applicable
Distribution of profits
The Company’s cash dividend is recognized as liabilities after approval by the shareholders’meeting.
Measurement of fair value
The Group measures the fair values of equity instruments investments on each balancesheet date. Fair value refers to the price received from the sale of an asset or paid for the transferof a liability by a market player in the orderly transactions on the measurement date.
For the assets and liabilities which are measured or disclosed by fair value in the financialstatements, the levels of fair value are determined based on the lowest-level input of importantsignificance for the overall measurement of fair values: Level 1 input is the unadjusted offer pricefor an identical asset or liability that can be obtained in an active market on the measurementdate; Level 2 inputs are the inputs that are directly or indirectly observable for related assets or
liabilities other than Level 1 inputs; Level 3 inputs are the inputs that are observable for relatedassets or liabilities.On each balance date, the Group re-evaluates the assets and liabilities that are recognizedin the financial statements and keep being measured by fair value so as to determine whether tochange the measurement levels of fair value.
Significant accounting judgments and estimatesIn the preparation of financial statements, the management need to make judgments,estimates and assumptions, which will affect the presented amounts and disclosure of revenue,expenses, assets and liabilities and the disclosure of contingent liabilities on the balance sheetdate. However, the uncertainties of these assumptions and estimates may cause materialadjustment to the book value of the assets or liabilities that will be affected in the future.
JudgmentsWhen applying the Group’s accounting policies, the management have made the followingjudgments which have had significant influence on the amounts recognized in the financialstatements:
Operating lease—as the lessorThe Group has signed lease contracts for the property investments. The Group thinks thataccording to the terms of the lease contracts, the Group retains all major risks andcompensations on the titles of those real estate properties and thus handles them as operatingleases.Partition between property investments and fixed assetsThe Group classifies the buildings and structures leased out other than for the mainbusinesses such as market and hotel services as well as the auxiliary land use rights thereof asproperty investments, including but not limited to the auxiliary banking and catering outlets formarket operation and the auxiliary service outlets for hotels. Other buildings and structuresleased out are classified as fixed assets.
Judgments on assets acquisition and mergers of enterprisesWhen determining whether an acquisition transaction constitutes a merger, the Groupassesses various factors, including whether the acquiree constitutes a business, in accordancewith the Accounting Standards for Enterprises No. 20 – Merger of Enterprises. A business refersto a group of some production and operation activities or assets and liabilities within anenterprise, which has the input, processing and output abilities and whose costs and expensesor revenue can be calculated independently, but an asset or a group of assets or liabilities can bedeemed as a business so long as it has the input and processing processes. The Group makescomprehensive judgments by combining the asset acquired and the processing process.
Business modelThe classification of financial assets at initial recognition depends on the Group’s businessmodel for the management of financial assets. When judging the business model, the Groupfactors in the enterprise evaluation, the way of reporting financial assets performance to keymanagement personnel, the risks affecting the performance of financial assets, the way ofmanaging financial assets and the way of related business management personnel obtainingremunerations. When assessing whether to aim at the collection of contractual cash flow, theGroup needs to analyze the reasons, time, frequency and value for sale of the financial assets tobe sold before the expiry dates thereof.Characteristics of contractual cash flowThe classification of financial assets at initial recognition depends on the characteristics ofthe contractual cash flow of the financial assets. For the judgment on whether the contractualcash flow is the repayment of principal and the payment of interest on outstanding principal,including the evaluation of the adjustment to the time value of money, it should be judgedwhether it is significantly different from the benchmark cash flow; for the financial assets with theearly repayment characteristic, it should be judged whether the fair value of the early repaymentcharacteristic is extremely low.Uncertainties of estimatesThe key assumptions on the balance sheet date for the future and other key sources of theuncertainties of estimates are shown below, which may cause significant adjustments to thebook values of assets and liabilities during the future accounting periods.Impairment of financial instruments
The Group evaluates the impairment of financial instruments with the expected credit lossmodel. To apply the model, the Group needs to make significant judgments and estimates andtake into account all reasonable and evidenced information, including forward-lookinginformation. When making these judgments and estimates, the Group infers the expectedchanges in the debtors’ credit risks based on their historical repayment data, in combination withthe economic policies, macroeconomic indicators and industry risks. Different estimates mayaffect the provisions for impairment and the provision that has been made for impairment maynot necessarily be equal to the actual amount of impairment loss in the future.
Net realizable value of property inventory
The Group’s property inventory is measured by cost or net realizable value, whichever islower. For the calculation of net realizable value, assumptions and estimates should be used. Ifthe management adjust the estimated price and the costs and expenses to be incurred until thecompletion, it will affect the estimate of the net realizable value of the inventory and thedifference will affect the provision for inventory depreciation.
Impairment of non-current assets other than financial assets (excluding goodwill)
The Group determines, on the balance sheet date, whether the non-current assets otherthan financial assets have a sign of being impaired. For a non-current asset other than financialasset, if it is indicated that its book value cannot be recovered, an impairment test will be made.When the book value of an asset or a group of assets is higher than its recoverable value, i.e. fairvalue less the disposal expenses or the present value of expected future cash flow, whichever ishigher, the asset or group has been impaired. For the fair value less the disposal expenses, theGroup refers to the agreed selling price or observable market price of the similar asset in a fairtransaction, less the cost increase directly attributable to the disposal of the asset. Whenpredicting the present value of future cash flows, the management must estimate the expectedfuture cash flows of the asset or group of assets and select an appropriate discount rate. Whenidentifying a group of assets, the management consider whether the smallest identifiable groupof assets can generate income and cash flows independently from other departments or units, orthe income and cash inflows generated thereby are mostly independent from other departmentsor units, and also take into account the way of managing or monitoring production and operatingactivities and the way of making decisions on the continued use or disposal of the asset.
Goodwill impairment
The Group tests goodwill for impairment at least annually. This requires estimating thepresent value of the future cash flows of the asset group or combination of asset groups to whichthe goodwill is allocated. When estimating the present value of future cash flows, the Groupneeds to estimate the cash flows generated by future asset groups or combinations of assetgroups, and at the same time select an appropriate discount rate to determine the present valueof future cash flows.
Fair value of unlisted equity investment
Valuation of the unlisted equity investment is the expected future cash flows discounted atthe current discount rate of other financial instruments with similar contract terms and riskcharacteristics. This requires the Group to estimate the expected future cash flows, credit risk,volatility and discount rate, which brings uncertainties.
Development expenses
When determining the amount of capitalization, management must make assumptions onthe expected future cash flow, the applicable discount rate, and the expected benefit period ofthe asset.
Deferred income tax assets
To the extent that it is very likely for the Group to have enough taxable income to be offsetagainst the deductible losses, the Group shall recognize deferred income tax assets inconnection with the outstanding deductible losses. This requires the management to use lots ofjudgments to estimate the acquisition time and amount of the taxable income to be acquired inthe future to determine the amount of deferred income tax assets to be recognized, inconsideration of the tax payment planning strategy.
Lessee incremental borrowing interest rate
For leases where the interest rate implicit in the lease cannot be determined, the Groupuses the lessee's incremental borrowing rate as the discount rate to calculate the present valueof the lease payments. When determining the incremental borrowing rate, the Group takes the
observable interest rate as the reference basis for determining the incremental borrowing rateaccording to the economic environment it is in. On this basis, the Group adjusts the referenceinterest rate according to its own situation, the underlying asset situation, the lease term, theamount of lease liabilities and other specific conditions of the lease business to obtain theapplicable incremental borrowing rate.
44. Changes in important accounting policies and accounting estimates
(1). Changes in important accounting policies
□Applicable √Not applicable
(2). Changes in important accounting estimates
□Applicable √Not applicable
(3). From 2023, the first implementation of new accounting standards or standard
interpretations would involve adjustments to the financial statements at thebeginning of the first implementation year
□Applicable √Not applicable
45. Other
□Applicable √Not applicable
VI. Taxes
1. Major taxes and tax rates
Major taxes and tax rates
√Applicable □Not applicable
Tax | Base of taxation | Rate |
VAT | Sale of goods or rendering of taxable service | The Company is a general taxpayer. The taxable income is calculated at 13%, 9% and 6% tax rates as output tax, and the value-added tax is calculated and paid on the basis of the difference after deduction of the input tax allowed to be deducted in the current period. In addition, for the sale of the self-developed old real estate projects (the contract start date indicated in the “Construction Project Construction Permit” is before April 30, 2016) and the lease of the real estate acquired before April 30, 2016, the simplified tax calculation method shall apply at the rate of 5%. |
Urban maintenance and construction tax | Indirect tax actually paid | 5% or 7% |
Corporate income tax | Domestic enterprises should pay 25% of the taxable income for corporate income tax; European Huajie Development Co., Ltd. is registered in Prague, Czech Republic, so it is subject to the corporate income tax rate of 19%; Yiwu China Commodities City (Hong Kong) International Trade Co., Ltd. is registered in Hong Kong Special Administrative Region, so it |
is subject to the Hong Kong income tax rate, 16.50%; BETTER SILK ROAD FZE is registered in Dubai, so it is free from corporate income tax. | ||
Land appreciation tax | Ratio of appreciation value to deductible items | Four-bracket progressive tax rate (30%~60%) |
Real estate tax | If the tax is levied according to price, the amount is 1.2% of the balance of the original value of the property after a 30% deduction; if the tax is levied according to rental, the amount is 12% of the rental income. | 1.2% or 12% |
Education surcharge | Indirect tax actually paid | 3% |
Local education surcharge | Indirect tax actually paid | 2% |
Cultural undertaking development fee | Advertising turnover | 3% |
Disclosure of taxpayers subject to different income tax rates
√Applicable □Not applicable
Taxpayer | Income tax rate (%) |
Yiwu China Commodities City (Spain) Co., Ltd. | 25.00 |
European Huajie Investment Development Co., Ltd. | 19.00 |
Yiwu China Commodities City (Hong Kong) International Trade Co., Ltd. | 16.50 |
Yiwu China Commodities City (Germany) Co., Ltd. | 15.00 |
BETTER SILK ROAD FZE | 0 |
2. Tax preference
√Applicable □Not applicable
According to the Announcement on the Filing of High-tech Enterprises recognized byZhejiang Provincial Accreditation Agency in 2022 issued by the Office of the National High-techEnterprise Accreditation Management Leading Group, Yiwu China Small Commodities City BigData Co., Ltd. has been listed in the filing list of high-tech enterprises recognized by ZhejiangProvincial Accreditation Agency in 2022 and passed the recognition of high-tech enterprises.The Certificate number is GR202233004297, date of issue: December 24, 2022, valid period:
three years. From January 1, 2022 to December 31, 2024, Yiwu China Commodities City BigData Co., Ltd. was subject to a reduced corporate income tax rate of 15%.
3. Other
□Applicable √Not applicable
VII. Notes to items in consolidated financial statements
1. Cash and cash equivalents
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Cash on hand | 218,145.54 | 220,471.11 |
Bank deposits | 2,176,166,493.38 | 1,990,327,169.17 |
Other cash and cash equivalents | 56,604.10 | 751,331.02 |
Total | 2,176,441,243.02 | 1,991,298,971.30 |
In which: amount deposited abroad | 41,583,347.91 | 76,203,839.82 |
Other notes:
For the cash and cash equivalents which are restricted in use, please refer to Notes VII.81Assets with Restricted Title or Right of Use.Interest income of demand deposits is accrued based on the demand deposit rates of banks.The term of short-term time deposits ranges from three months to half a year and depends on theGroup’s cash demand, and the interest income thereof is accrued based on the correspondingtime deposit rates of banks.
2. Held-for-trading financial assets
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Financial assets that are measured by fair value and of which the changes in fair value are recognized in the Profits and losses for the current period | 51,610,980.66 | 62,331,000.66 |
Among them: | ||
Bank financing products | 35,179,435.66 | 38,679,435.66 |
Equity instrument investment | 16,431,545.00 | 23,651,565.00 |
Total | 51,610,980.66 | 62,331,000.66 |
Other notes:
□Applicable √Not applicable
3. Derivative financial assets
□Applicable √Not applicable
4. Notes receivable
(1). Categorized presentation of notes receivable
□Applicable √Not applicable
(2). Notes receivable having been pledged by the Company as of the close of the
reporting period
□Applicable √Not applicable
(3). Notes receivable having been endorsed or discounted by the Company as of the
close of the reporting period and having not been due as of the balance sheetdate
□Applicable √Not applicable
(4). Notes turned into accounts receivable due to the drawers’ non-performance at the
close of the reporting period
□Applicable √Not applicable
(5). Categorized disclosure based on the bad debt provision method
□Applicable √Not applicable
(6). Provisions for bad debts
□Applicable √Not applicable
(7). Notes receivable actually written off during the current period
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
5. Accounts receivable
(1). Disclosure based on account age
√Applicable □Not applicable
Unit: RMB
Account age | Closing book balance |
Within 1 year | |
In which: sub-items | |
Within 1 year | 150,946,794.66 |
Subtotal within 1 year | 150,946,794.66 |
1 to 2 years | 7,609,047.28 |
2 to 3 years | 80,451.00 |
Over 3 years | 100,234.00 |
Total | 158,736,526.94 |
(2). Categorized disclosure based on the bad debt provision method
√Applicable □Not applicable
Unit: RMB
Category | Closing balance | Opening balance | ||||||||
Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
Amount | Proportion (%) | Amount | Provision ratio (%) | Amount | Proportion (%) | Amount | Provision ratio (%) | |||
Accounts receivable for which bad debt provision is made individually | 6,261,907.10 | 3.94 | 6,261,907.10 | 100.00 | - | 6,261,907.10 | 2.86 | 6,261,907.10 | 100.00 | - |
Among them: | ||||||||||
Lease receivables | 6,261,907.10 | 3.94 | 6,261,907.10 | 100.00 | - | 6,261,907.10 | 2.86 | 6,261,907.10 | 100.00 | - |
Accounts receivable for which bad debt provision is made by group | 152,474,619.84 | 96.06 | 1,706,427.76 | 1.12 | 150,768,192.08 | 212,986,900.01 | 97.14 | 2,236,174.65 | 1.05 | 210,750,725.36 |
Among them: | ||||||||||
Accounts receivable for which the bad debts are provided by combination of credit risk characteristics | 152,474,619.84 | 96.06 | 1,706,427.76 | 1.12 | 150,768,192.08 | 212,986,900.01 | 97.14 | 2,236,174.65 | 1.05 | 210,750,725.36 |
Total | 158,736,526.94 | / | 7,968,334.86 | / | 150,768,192.08 | 219,248,807.11 | / | 8,498,081.75 | / | 210,750,725.36 |
Accounts receivable for which bad debt provision is made individually:
√Applicable □Not applicable
Unit: RMB
Name | Closing balance | |||
Book balance | Bad debt provision | Provision ratio (%) | Reason for provision | |
Lease receivables | 6,261,907.10 | 6,261,907.10 | 100.00 | Due to deterioration of operating conditions, expected not to be recovered |
Total | 6,261,907.10 | 6,261,907.10 | 100.00 | / |
Explanation for making bad debt provision for accounts receivable individually:
□Applicable √Not applicable
Explanation for making bad debt provision for accounts receivable by group:
√Applicable □Not applicable
Combined provision items: accounts receivable with provision for bad debts based on credit riskcharacteristics
Unit: RMB
Name | Closing balance | ||
Accounts receivable | Bad debt provision | Provision ratio (%) | |
Accounts receivable for which the bad debts are provided by combination of credit risk characteristics | 152,474,619.84 | 1,706,427.76 | 1.12 |
Total | 152,474,619.84 | 1,706,427.76 | 1.12 |
Standard for recognition of provision for bad debt by combination of credit risk characteristicsand descriptions:
□Applicable √Not applicable
If the bad debt provision is made according to the general model of expected credit loss, pleaserefer to the disclosure of other receivables:
√Applicable □Not applicable
Unit: RMB
Account age | End of June 2023 | ||
Estimated book balance in default | Expected credit loss rate (%) | Expected credit loss in whole duration | |
Within 1 year | 150,946,794.66 | 0.99 | 1,499,085.35 |
1 - 2 years | 1,347,140.18 | 6.99 | 94,113.26 |
2 -3 years | 80,451.00 | 16.15 | 12,995.15 |
Over 3 years | 100,234.00 | 100.00 | 100,234.00 |
Total | 152,474,619.84 | 1,706,427.76 |
(3). Provisions for bad debts
√Applicable □Not applicable
Unit: RMB
Category | Opening balance | Amount of change during the current period | Closing balance | ||
Provision | Recovery or reversal | Charge-off or write-off | |||
Bad debt provision for accounts receivable | 8,498,081.75 | - | 529,746.89 | - | 7,968,334.86 |
Total | 8,498,081.75 | - | 529,746.89 | - | 7,968,334.86 |
In which the recovered or reversed amount is important:
□Applicable √Not applicable
(4). Accounts receivable actually written off during the current period
□Applicable √Not applicable
(5). Accounts receivable from the five debtors with the highest closing balance
√Applicable □Not applicable
Unit: RMB
Debtor | Closing balance | Proportion in the total closing balance of accounts | Closing balance of bad debt provision |
receivable (%) | |||
Total balance of the accounts receivable with the top five entities | 36,896,309.25 | 23.24 | 6,566,143.99 |
Total | 36,896,309.25 | 23.24 | 6,566,143.99 |
(6). Accounts receivable derecognized due to transfer of financial assets
□Applicable √Not applicable
(7). Amounts of assets and liabilities formed by the transfer of accounts receivable and
continuing involvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
6. Accounts receivable financing
□Applicable √Not applicable
7. Prepayments
(1). Presentation of prepayment by age
√Applicable □Not applicable
Unit: RMB
Account age | Closing balance | Opening balance | ||
Amount | Proportion (%) | Amount | Proportion (%) | |
Within 1 year | 912,327,191.47 | 99.43 | 600,114,288.07 | 99.02 |
1 to 2 years | 1,044,513.21 | 0.11 | 5,252,760.18 | 0.87 |
2 to 3 years | 3,876,305.25 | 0.42 | 240,000.00 | 0.04 |
Over 3 years | 340,000.00 | 0.04 | 450,000.00 | 0.07 |
Total | 917,588,009.93 | 100.00 | 606,057,048.25 | 100.00 |
Explanation for failure to settle the prepayments with an account age longer than one year and inimportant amounts:
Nil
(2). Prepayments to the five suppliers with the highest closing balance
√Applicable □Not applicable
Unit: RMB
Debtor | Closing balance | Proportion in total closing balance of prepayments (%) |
PACIFIC SEAFOOD TRADER SA | 83,558,074.90 | 9.11 |
Binzhou Yellow River Oasis Agricultural Development Co., Ltd. | 79,063,450.00 | 8.62 |
INDUSTRIAL PESQUERA SANTA PRISCILA S.A. | 71,462,338.36 | 7.79 |
Sociedad Nacional de Galapagos C.A. SONGA | 65,308,100.38 | 7.12 |
NEGOCIOS INDUSTRIALES REAL NIRSA S.A. | 55,112,031.87 | 6.01 |
Total | 354,503,995.51 | 38.65 |
Other statements
□Applicable √Not applicable
8. Other receivables
Presentation of items
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Other receivables | 87,930,115.50 | 419,398,092.62 |
Total | 87,930,115.50 | 419,398,092.62 |
Other notes:
□Applicable √Not applicable
Interest receivable
(1). Classification of interest receivable
□Applicable √Not applicable
(2). Significant overdue interest
□Applicable √Not applicable
(3). Bad debt provision
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Dividend receivable
(1). Dividend receivable
□Applicable √Not applicable
(2). Important dividend receivable with an account age longer than 1 year
□Applicable √Not applicable
(3). Bad debt provision
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Other receivables
(1). Disclosure based on account age
√Applicable□Not applicable
Unit: RMB
Account age | Closing book balance |
Within 1 year | |
In which: sub-items | |
Within 1 year | 71,074,199.16 |
Subtotal within 1 year | 71,074,199.16 |
1 to 2 years | 1,560,683.39 |
2 to 3 years | 2,393,621.32 |
Over 3 years | 17,008,357.32 |
Bad debt provision for other receivables | -4,106,745.69 |
Total | 87,930,115.50 |
(2). Classification based on the nature of accounts
√Applicable □Not applicable
Unit: RMB
Nature of receivable | Closing book balance | Opening book balance |
Withholdings and deposits | 81,190,657.14 | 84,610,870.01 |
Receivables from export tax rebate | 4,934,649.01 | 10,041,570.82 |
Reserve | 1,804,809.35 | 958,739.70 |
Financial assistance receivable from joint ventures | - | 323,786,912.09 |
Total | 87,930,115.50 | 419,398,092.62 |
(3). Bad debt provision
√Applicable □Not applicable
Unit: RMB
Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
Expected credit loss in the coming 12 months | Expected credit loss in the entire duration (credit has not been impaired) | Expected credit loss in the entire duration (credit has been impaired) | ||
Balance as of January 1, 2023 | 4,141,791.44 | 4,141,791.44 | ||
Balance as of January 1, 2023 in the current period | ||||
Provision made in the current period | 77,346.86 | 77,346.86 | ||
Current reversal | 96,517.82 | 96,517.82 | ||
Write-off in current period | 15,874.79 | 15,874.79 | ||
Balance as of June 30, 2023 | 4,106,745.69 | 4,106,745.69 |
Significant changes in the book balance of other receivables with changes in loss provisions:
□Applicable √Not applicable
Basis for the bad debt provision made in the current period and for assessing whether the creditrisk of financial instruments has increased significantly:
□Applicable √Not applicable
(4). Provisions for bad debts
√Applicable □Not applicable
Unit: RMB
Category | Opening balance | Amount of change during the current period | Closing balance | ||
Provision | Recovery or reversal | Charge-off or write-off | |||
Bad debt provision for other receivables | 4,141,791.44 | 77,346.86 | 96,517.82 | 15,874.79 | 4,106,745.69 |
Total | 4,141,791.44 | 77,346.86 | 96,517.82 | 15,874.79 | 4,106,745.69 |
In which the recovered or reversed amount is important:
□Applicable √Not applicable
(5). Other receivables actually written off during the current period
√Applicable □Not applicable
Unit: RMB
Item | Amount written-off |
Other receivables actually written off | 15,874.79 |
Of which, important write-offs of other receivables:
□Applicable √Not applicable
Notes on the write-off of other receivables:
□Applicable √Not applicable
(6). Other receivables from the five debtors with highest closing balance
√Applicable □Not applicable
Unit: RMB
Debtor | Nature of receivable | Closing balance | Account age | Weight in the total closing balance of other receivables (%) | Bad debt provision Closing balance |
Yiwu Weiniuke Trading Co., Ltd | Advance payment | 4,275,000.00 | Within 1 year | 4.64 | - |
Yiwu Shengran Trading Co., Ltd. | Advance payment | 4,027,918.00 | Within 1 year | 4.38 | - |
Yiwu Green Light Import and Export Co., Ltd | Advance payment | 2,645,000.00 | Within 1 year | 2.87 | - |
Yiwu Jufu Import and Export Co., Ltd | Advance payment | 2,378,500.00 | Within 1 year | 2.58 | - |
Yiwu Changde Import and Export Co., Ltd | Advance payment | 2,126,000.00 | Within 1 year | 2.31 | - |
Total | / | 15,452,418.00 | / | 16.78 | - |
(7). Receivables involving government grants
□Applicable √Not applicable
(8). Other receivables derecognized due to transfer of financial assets
□Applicable √Not applicable
(9). Amounts of assets and liabilities formed by the transfer of accounts receivable and
continuing involvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
9. Inventory
(1). Classification of inventory
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Provision for inventory depreciation/provision for impairment of contract performance cost | Book value | Book balance | Provision for inventory depreciation/provision for impairment of contract performance cost | Book value | |
Raw materials | 238,747.71 | - | 238,747.71 | 555,462.87 | - | 555,462.87 |
Finished goods | 137,875,101.03 | - | 137,875,101.03 | 212,470,958.56 | - | 212,470,958.56 |
Work-in-progress materials | 4,114,430.01 | - | 4,114,430.01 | 2,445,689.69 | - | 2,445,689.69 |
Development cost | 67,907,950.27 | 28,303,338.06 | 39,604,612.21 | 67,907,950.27 | 28,303,338.06 | 39,604,612.21 |
Development products | 1,041,525,252.39 | - | 1,041,525,252.39 | 1,075,274,520.54 | - | 1,075,274,520.54 |
Total | 1,251,661,481.41 | 28,303,338.06 | 1,223,358,143.35 | 1,358,654,581.93 | 28,303,338.06 | 1,330,351,243.87 |
(2). Provision for inventory depreciation/provision for impairment of contractperformance cost
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
Provision | Other | Charge-off or write-off | Other | |||
Development cost | 28,303,338.06 | - | - | - | - | 28,303,338.06 |
Total | 28,303,338.06 | - | - | - | - | 28,303,338.06 |
(3). Closing balance of inventory containing capitalized borrowing costs
√Applicable □Not applicable
As of June 30, 2023, the inventory with a book value of RMB 35,797,443.87 (December 31,2022: RMB 35,797,443.87) was formed by capitalization of borrowing costs.
(4). Amortization of contract performance cost during the current period
□Applicable √Not applicable
Other notes:
√Applicable □Not applicable
Inventory-Development Cost Unit: RMB-yuan Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Haicheng Phase I Business Street | 67,907,950.27 | - | - | 67,907,950.27 |
Total | 67,907,950.27 | - | - | 67,907,950.27 |
Inventory-Developed Products Unit: RMB-yuan Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Haicheng Phase I Business Street | 915,616,130.79 | - | - | 915,616,130.79 |
Haicheng Phase II Business Street | 159,658,389.75 | 528,468.99 | 34,277,737.14 | 125,909,121.60 |
Total | 1,075,274,520.54 | 528,468.99 | 34,277,737.14 | 1,041,525,252.39 |
10. Contract assets
(1). Overview of contract assets
□Applicable √Not applicable
(2). Amount of and reasons for material changes to book value during the reporting
period
□Applicable √Not applicable
(3). Provision for impairment of contract assets in the current period
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
11. Held-for-sale assets
□Applicable √Not applicable
12. Non-current assets due within one year
□Applicable √Not applicable
13. Other current assets
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Payment business reserve | 420,922,188.51 | 367,484,914.87 |
To-be-deducted input tax | 285,384,179.21 | 146,697,598.28 |
Advance income tax | 12,324,603.12 | 113,127,305.76 |
To-be-certified input tax | 5,106,740.58 | 5,348,152.36 |
Entrusted loans to the market traders | 1,737,479.42 | 1,737,479.42 |
Less: bad debt provision for entrusted loans | -185,500.00 | -185,500.00 |
Total | 725,289,690.84 | 634,209,950.69 |
Other notes:
Nil
14. Debt investments
(1). Overview of debt investment
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Entrusted Loans | 48,066,000.00 | - | 48,066,000.00 | 48,079,561.64 | - | 48,079,561.64 |
Total | 48,066,000.00 | - | 48,066,000.00 | 48,079,561.64 | - | 48,079,561.64 |
(2). Important debt investment as of the close of the reporting period
□Applicable √Not applicable
(3). Provision for impairment
□Applicable √Not applicable
15. Other debt investments
(1). Overview of other debt investment
□Applicable √Not applicable
(2). Important other debt investment as of the close of the reporting period
□Applicable √Not applicable
(3). Provision for impairment
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
16. Long-term receivables
(1) Overview of long-term receivables
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance | Range of discount rate | ||||
Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | ||
Receivables from joint ventures Financial assistance | 280,785,954.02 | - | 280,785,954.02 | 269,877,115.20 | - | 269,877,115.20 | |
Guarantee deposit | 7,251,991.89 | - | 7,251,991.89 | 8,422,485.53 | - | 8,422,485.53 | |
Total | 288,037,945.91 | - | 288,037,945.91 | 278,299,600.73 | - | 278,299,600.73 | / |
(2) Bad debt provision
□Applicable √Not applicable
(3) Long-term receivables derecognized due to transfer of financial assets
□Applicable √Not applicable
(4) Amounts of assets and liabilities formed by the transfer of long-term receivables andcontinuing involvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
17. Long-term equity investment
√Applicable □Not applicable
Unit: RMB
Investee | Opening amount Balance | Change in the current period | Closing amount Balance | Closing balance of impairment provision | ||
Decrease in investment | Investment gains or losses recognized with the equity method | Adjustment of other comprehensive income | ||||
1. Joint ventures | ||||||
Yiwu Shanglv | 396,972,448.93 | - | 20,662,266.60 | - | 417,634,715.53 | - |
Yiwu Rongshang Property | 65,650,902.46 | - | 2,809,806.79 | - | 68,460,709.25 | - |
Yiwu Chuangcheng Property | 28,449,292.72 | - | 2,673,475.72 | - | 31,122,768.44 | - |
Yiwu Guoshen Shangbo Property Co., Ltd. | 75,740,065.56 | - | 859,602,411.13 | - | 935,342,476.69 | - |
Other | 35,311,309.47 | - | -730,256.49 | - | 34,581,052.98 | 3,327,216.16 |
Sub-total | 602,124,019.14 | - | 885,017,703.75 | - | 1,487,141,722.89 | 3,327,216.16 |
2. Associates | ||||||
Huishang Micro-finance | 78,209,979.82 | - | 1,067,437.11 | - | 79,277,416.93 | - |
Huishang Redbud equity | 80,251,875.33 | - | -15,920,657.62 | - | 64,331,217.71 | - |
Chouzhou Financial Lease | 489,205,549.91 | - | 52,173,749.11 | - | 541,379,299.02 | - |
Yiwu China Commodities City Investment Management Co., Ltd. | 9,508,049.22 | - | - | - | 9,508,049.22 | 9,508,049.22 |
Yiwu China Commodities City Fuxing Investment Center (limited partnership) | 102,918,559.00 | - | - | - | 102,918,559.00 | - |
Pujiang Lvgu Property Co., Ltd. | 378,839,597.00 | - | -8,975,700.27 | - | 369,863,896.73 | - |
CCCP | 2,985,480,694.55 | - | 123,607,288.99 | - | 3,109,087,983.54 | - |
Yiwu Hongyi Equity Investment Fund Partnership (limited partnership) | 945,642,085.02 | 50,000,000.00 | 12,315,353.28 | - | 907,957,438.30 | - |
Zhijie Yuangang | 145,563,439.33 | - | -7,168,026.16 | - | 138,395,413.17 | - |
Other | 228,564,336.98 | - | -24,445,385.66 | 1,716,166.67 | 205,835,117.99 | - |
Sub-total | 5,444,184,166.16 | 50,000,000.00 | 132,654,058.78 | 1,716,166.67 | 5,528,554,391.61 | 9,508,049.22 |
Total | 6,046,308,185.30 | 50,000,000.00 | 1,017,671,762.53 | 1,716,166.67 | 7,015,696,114.50 | 12,835,265.38 |
Other statements
Provision for impairment of long-term equity investment:
Unit: RMB
Investee | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Yiwu China Commodities City Investment Management Co., Ltd. [Note 1] | 9,508,049.22 | - | - | 9,508,049.22 |
Other | 3,327,216.16 | - | - | 3,327,216.16 |
Total | 12,835,265.38 | - | - | 12,835,265.38 |
Note 1: In 2017, CCCF, a wholly-owned subsidiary of the Group, and Shanghai Fuxing Industrial Group Co., Ltd. (hereinafter referred to as "Fuxing")jointly established Industrial Fund Yiwu China Commodities City Fuxing Investment Center (LLP) (hereinafter referred to as the "Funds of Funds"), theFund of Funds has invested in 12 sub-funds including Yiwu Shangfu Chuangzhi Investment Center (LLP) (hereinafter referred to as "ShangfuChuangzhi Fund").
CCCF, as a limited partner, subscribed RMB 998 million in the FOF, accounting for 49.9% of the subscribed capital. The paid-in capital was RMB
102.92 million, and there is no deadline for the payment for the unpaid capital contribution. The other limited partner of the FOF is Fuxing. CCCF alsocontributed RMB 9.8 million, 49% of total shares, to jointly establish Yiwu China Commodities City Investment Management Co., Ltd. (hereinafterreferred to as “CCCIM”) with Fuxing as the general partner of the above-mentioned FOF and sub-funds. The FoF and CCCIM are both under the controlof Fuxing and are associates of CCCF.
As a limited partner of Shangfu Chuangzhi Fund, CCCF has subscribed and paid in a capital contribution of RMB 617.51 million. Since the capitalcontribution was guaranteed by Fuxing's fixed income, it was recognized as other non-current financial assets. The above paid-in capital contributionmade by CCCF to the FoF has been contributed to Shangfu Chuangzhi Fund together with the capital contribution of Fuxing to the FoF through the FoFas a limited partner. With the capital contribution from the FoF as a limited partner and CCCF’s capital contribution to Shangfu Chuangzhi Fund as alimited partner, Shangfu Chuangzhi Fund made capital contribution of RMB820.54million to subscribe for the increase in the registered capital of HubeiProvincial Asset Management Co., Ltd. to acquire 22.667% equity therein.
In 2018, CCCF learned during its after-investment follow-up management that Fuxing and its actual controller ZHU Yidong were suspected ofhaving committed a criminal offense and the 22.667% equity held by Shangfu Chuangzhi Fund in Hubei Provincial Asset Management Co., Ltd. wasfrozen by the Public Security Bureau of Shanghai due to Fuxing’s contribution to the sources of the capital contribution. The Group believes that, as ofJune 30, 2023, the Group’s investment in the Fund of Funds and Shangfu Chuangzhi Fund was non-related to Fuxing’s investment, and there was noindication of impairment of the underlying assets. Although they were still frozen, but without affecting the Group’s equity. Therefore, there was noimpairment. However, for the equity investment managed for the Yiwu CCC, a full impairment provision has been made since 2018. See Notes VII.81and Notes XIV. 1 for details.
18. Other equity instruments investment
(1). Overview of other equity instruments investment
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Shenwan Hongyuan Group Co., Ltd. | 579,474,299.94 | 499,200,803.85 |
Total | 579,474,299.94 | 499,200,803.85 |
(2). Non-trading equity instruments investment
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
19. Other non-current financial assets
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
PE investment | 1,224,658,299.12 | 1,242,537,387.23 |
Unlisted equity investment | 210,030,495.82 | 210,030,495.82 |
NEEQ equity investment | 38,433,768.00 | 47,739,679.08 |
Total | 1,473,122,562.94 | 1,500,307,562.13 |
Other notes:
Nil
20. Property investment
Measurement models
(1). Property investment measured by cost
Unit: RMB
Item | Buildings and structures | Land use right | Total |
I. Original book value | |||
1. Opening balance | 3,066,726,500.66 | 441,780,232.93 | 3,508,506,733.59 |
2. Increase in the current period | 759,764,008.59 | - | 759,764,008.59 |
(1) Purchase | 83,263,968.57 | - | 83,263,968.57 |
(2) Inventory\fixed assets\construction in progress changed into property investment | 676,500,040.02 | - | 676,500,040.02 |
3. Decrease in the current period | - | - | - |
4. Closing balance | 3,826,490,509.25 | 441,780,232.93 | 4,268,270,742.18 |
II. Accumulated depreciation and accumulated amortization | |||
1. Opening balance | 564,165,088.47 | 92,698,464.70 | 656,863,553.17 |
2. Increase in the current period | 63,836,494.36 | 5,665,363.11 | 69,501,857.47 |
(1) Provision or amortization | 63,836,494.36 | 5,665,363.11 | 69,501,857.47 |
3. Decrease in the current period | - | - | - |
4. Closing balance | 628,001,582.83 | 98,363,827.81 | 726,365,410.64 |
III. Depreciation provision | |||
1. Opening balance | - | - | - |
4. Closing balance | - | - | - |
IV. Book value | |||
1. Closing book value | 3,198,488,926.42 | 343,416,405.12 | 3,541,905,331.54 |
2. Opening book value | 2,502,561,412.19 | 349,081,768.23 | 2,851,643,180.42 |
(2). Information of the investment real estate for which the property right certificate has
not yet been obtained:
√Applicable □Not applicable
Unit: RMB
Item | Book value | Reasons for having not obtained the ownership certificate |
Comprehensive Bonded Zone | 1,713,868,771.75 | Completion settlement not completed |
Trading Station of Yiwu CCC Warehousing Park | 90,528,086.57 | Completion settlement not completed |
Office building of the auxiliary project in western Yiwu | 82,309,277.35 | Completion settlement not completed |
Total | 1,886,706,135.67 |
Other statements
√Applicable □Not applicable
As of June 30, 2023, amount of the investment real estate for which the property rightcertificate has not yet been obtained was RMB 1,886,706,135.67.
21. Fixed assets
Presentation of items
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Fixed assets | 4,991,042,386.46 | 5,220,882,784.47 |
Total | 4,991,042,386.46 | 5,220,882,784.47 |
Other notes:
Nil
Fixed assets
(1). Overview of fixed assets
√Applicable □Not applicable
Unit: RMB
Item | Buildings and structures | Machinery equipment | Transportation equipment | Total |
I. Original book value: | ||||
1. Opening balance | 7,924,300,361.81 | 3,987,303,785.61 | 9,920,098.37 | 11,921,524,245.79 |
2. Increase in the current period | - | 2,232,611.64 | - | 2,232,611.64 |
(1) Purchase | - | 2,232,611.64 | - | 2,232,611.64 |
3. Decrease in the current period | 83,309,880.51 | 9,263,374.74 | - | 92,573,255.25 |
(1) Disposal or retirement | 78,487,337.91 | 8,983,227.97 | - | 87,470,565.88 |
(2) Other changeover | 4,822,542.60 | 280,146.77 | - | 5,102,689.37 |
4. Closing balance | 7,840,990,481.30 | 3,980,273,022.51 | 9,920,098.37 | 11,831,183,602.18 |
II. Accumulated depreciation | ||||
1. Opening balance | 3,021,987,133.97 | 3,200,000,153.08 | 7,490,706.42 | 6,229,477,993.47 |
2. Increase in the current period | 149,412,757.51 | 38,675,304.85 | 380,583.25 | 188,468,645.61 |
(1) Provision | 149,412,757.51 | 38,675,304.85 | 380,583.25 | 188,468,645.61 |
3. Decrease in the current period | 41,047,257.95 | 7,921,633.26 | - | 48,968,891.21 |
(1) Disposal or retirement | 41,047,257.95 | 7,794,849.63 | - | 48,842,107.58 |
(2) Other changeover | - | 126,783.63 | - | 126,783.63 |
4. Closing balance | 3,130,352,633.53 | 3,230,753,824.67 | 7,871,289.67 | 6,368,977,747.87 |
III. Depreciation provision | ||||
1. Opening balance | 471,163,467.85 | - | - | 471,163,467.85 |
4. Closing balance | 471,163,467.85 | - | - | 471,163,467.85 |
IV. Book value | ||||
1. Closing book value | 4,239,474,379.92 | 749,519,197.84 | 2,048,808.70 | 4,991,042,386.46 |
2. Opening book value | 4,431,149,759.99 | 787,303,632.53 | 2,429,391.95 | 5,220,882,784.47 |
(2). Temporarily idle fixed assets
□Applicable √Not applicable
(3). Fixed assets leased in through financial lease
√Applicable □Not applicable
Unit: RMB
Item | Original book value | Accumulated depreciation | Impairment provision | Book value |
General equipment | 6,084,431.99 | 5,841,054.71 | - | 243,377.28 |
(4). Fixed assets leased out through operating lease
□Applicable √Not applicable
(5). Fixed assets for which the ownership certificates have not been obtained
√Applicable □Not applicable
Unit: RMB
Item | Book value | Reasons for having not obtained the ownership certificate |
Auxiliary project in western Yiwu | 558,037,755.60 | Completion settlement not completed |
Liaoning Xiliu Yiwu China Commodities City | 293,081,222.75 | Completion settlement not completed |
Huangyuan Clothing Market | 237,956,529.59 | Completion settlement not completed |
CCC Hotel | 49,814,446.51 | Completion settlement not completed |
Total | 1,138,889,954.45 | Completion settlement not completed |
Other notes:
√Applicable □Not applicable
The impairment of fixed assets was RMB 471,163,467.85, which was the impairment offixed assets of Haicheng Yiwu China Commodities City.
As of June 30, 2023, the amount of fixed assets for which the property right certificate hasnot yet been obtained due to the pending final settlement was RMB 1,138,889,954.45.
Disposal of fixed assets
□Applicable √Not applicable
22. Construction in progress
Presentation of items
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Construction in progress | 2,749,978,013.56 | 2,860,064,818.36 |
Total | 2,749,978,013.56 | 2,860,064,818.36 |
Other notes:
Nil
Construction in progress
(1). Overview of construction in progress
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Liaoning Xiliu Yiwu China Commodities City Commerce Phase I Project—Hotel Project | 32,290,506.33 | -4,635,059.96 | 27,655,446.37 | 32,290,506.33 | -4,635,059.96 | 27,655,446.37 |
The Zhimei Dachen tourism project | 22,801,228.71 | - | 22,801,228.71 | 22,801,228.71 | - | 22,801,228.71 |
The Chian West Sea tourism project | 73,438,528.07 | - | 73,438,528.07 | 70,003,472.35 | - | 70,003,472.35 |
The Yiwu Comprehensive Bonded Zone Project | 1,211,584,391.17 | - | 1,211,584,391.17 | 1,853,596,168.27 | - | 1,853,596,168.27 |
Yiwu Digital Trade Industrial Park | 168,879,447.19 | - | 168,879,447.19 | 158,150,730.63 | - | 158,150,730.63 |
Global Digital Free Trade Center | 192,912,936.22 | - | 192,912,936.22 | 71,878,178.97 | - | 71,878,178.97 |
Logistics Park S2 | 317,038,694.08 | - | 317,038,694.08 | 235,339,023.06 | - | 235,339,023.06 |
Logistics Park S3 | 359,995,043.23 | - | 359,995,043.23 | 304,000,538.70 | - | 304,000,538.70 |
Yiwu International Digital Logistics Market | 362,001,254.36 | - | 362,001,254.36 | 116,022,418.71 | - | 116,022,418.71 |
Other projects | 13,671,044.16 | - | 13,671,044.16 | 617,612.59 | - | 617,612.59 |
Total | 2,754,613,073.52 | -4,635,059.96 | 2,749,978,013.56 | 2,864,699,878.32 | -4,635,059.96 | 2,860,064,818.36 |
(2). Changes to important construction in progress during the current period
√Applicable □Not applicable
Unit: RMB10,000
Item | Budget | Opening amount Balance | Increase in the current period | Amount transferred to investment real estate in this period | Closing amount Balance | Accumulated investment in the project as a percentage of the budget Proportion (%) | Progress of project | Accumulated capitalized interest | In which: capitalized interest in the current period | Interest capitalization ratio for the current period (%) | Source of funds |
Liaoning Xiliu Yiwu China Commodities City Commerce Phase I Project—Hotel Project | 180,000.00 | 3,229.05 | - | - | 3,229.05 | 96.32 | Shutdown | 154.61 | - | - | Self-owned/financing |
The Zhimei Dachen tourism project | 6,000.00 | 2,280.13 | - | - | 2,280.13 | 97.25 | Under construction | - | - | - | Self-owned |
The Chian West Sea tourism project | 8,000.00 | 7,000.35 | 343.51 | - | 7,343.86 | 89.36 | Under construction | - | - | - | Self-owned |
The Yiwu Comprehensive Bonded Zone Project | 624,250.00 | 185,359.62 | 3,448.83 | 67,650.00 | 121,158.45 | 57.39 | Under construction | 2,034.32 | 2,034.32 | 2.91 | Self-owned/financing |
Yiwu Digital Trade Industrial Park | 39,579.00 | 15,815.07 | 1,072.87 | - | 16,887.94 | 42.67 | Under construction | 220.95 | 220.95 | 2.91 | Self-owned/financing |
Global Digital Free Trade Center | 832,082.00 | 7,187.82 | 12,103.48 | - | 19,291.30 | 2.35 | Under construction | 211.39 | 211.39 | 2.91 | Self-owned/financing |
Logistics Park S2 | 108,000.00 | 23,533.90 | 8,169.97 | - | 31,703.87 | 29.35 | Under construction | 367.60 | 367.60 | 2.91 | Self-owned/financing |
Logistics Park S3 | 132,000.00 | 30,400.05 | 5,599.45 | - | 35,999.50 | 27.27 | Under construction | 501.55 | 409.72 | 2.91 | Self-owned/financing |
Yiwu International Digital Logistics Market | 113,600.00 | 11,602.24 | 24,597.87 | - | 36,200.11 | 31.86 | Under construction | 407.97 | 313.72 | 2.91 | Self-owned/financing |
Other projects | - | 61.76 | 1,305.34 | - | 1,367.10 | - | Under construction | - | - | - | Self-owned |
Total | 2,043,511.00 | 286,469.99 | 56,641.32 | 67,650.00 | 275,461.31 | / | / | 3,898.39 | 3,557.70 | / | / |
(3). Provision made for the impairment of construction in progress in the current
period
□Applicable √Not applicable
Other statements
√Applicable □Not applicable
The impairment value of the project under construction is RMB 4,635,059.96, which is theprovision impairment of Liaoning Xiliu Yiwu China Commodities City Commerce Phase IProject—Hotel Project.
Construction materials
□Applicable √Not applicable
23. Bearer biological asset
(1). Bearer biological asset measured by cost
□Applicable√Not applicable
(2). Bearer biological asset measured by fair value
□Applicable √Not applicable
Other statements
□Applicable √Not applicable
24. Oil and gas assets
□Applicable √Not applicable
25. Right-of-use assets
√Applicable □Not applicable
Unit: RMB
Item | Buildings and structures | Land | Total |
I. Original book value | |||
1. Opening balance | 156,223,496.12 | 125,879,033.69 | 282,102,529.81 |
2. Increase in the current period | 455,138.62 | - | 455,138.62 |
4. Closing balance | 156,678,634.74 | 125,879,033.69 | 282,557,668.43 |
II. Accumulated depreciation | |||
1. Opening balance | 53,771,643.53 | 10,627,975.47 | 64,399,619.00 |
2. Increase in the current period | 12,646,469.39 | 3,291,061.38 | 15,937,530.77 |
(1) Provision | 12,646,469.39 | 3,291,061.38 | 15,937,530.77 |
4. Closing balance | 66,418,112.92 | 13,919,036.85 | 80,337,149.77 |
III. Depreciation provision | |||
1. Opening balance | - | - | - |
4. Closing balance | - | - | - |
IV. Book value | |||
1. Closing book value | 90,260,521.82 | 111,959,996.84 | 202,220,518.66 |
2. Opening book value | 102,451,852.59 | 115,251,058.22 | 217,702,910.81 |
Other notes:
Nil
26. Intangible assets
(1). Overview of intangible assets
√Applicable □Not applicable
Unit: RMB
Item | Land use right | Software and software copyright | Total |
I. Original book value | |||
1. Opening balance | 8,087,572,660.11 | 194,975,359.61 | 8,282,548,019.72 |
2. Increase in the current period | - | 13,871,288.89 | 13,871,288.89 |
(1) Purchase | - | 8,525,099.93 | 8,525,099.93 |
(2) Internal R&D | - | 5,346,188.96 | 5,346,188.96 |
3. Decrease in the current period | 11,190,617.14 | 12,272,023.84 | 23,462,640.98 |
(1) Disposal | 11,190,617.14 | 740,040.00 | 11,930,657.14 |
(2) Other changeover | - | 11,531,983.84 | 11,531,983.84 |
4. Closing balance | 8,076,382,042.97 | 196,574,624.66 | 8,272,956,667.63 |
II. Accumulated amortization | |||
1. Opening balance | 1,802,910,260.76 | 17,788,068.60 | 1,820,698,329.36 |
2. Increase in the current period | 100,025,736.90 | 9,507,910.08 | 109,533,646.98 |
(1) Provision | 100,025,736.90 | 9,507,910.08 | 109,533,646.98 |
3. Decrease in the current period | 6,834,652.21 | 2,361,676.58 | 9,196,328.79 |
(1) Disposal | 6,834,652.21 | 678,860.36 | 7,513,512.57 |
(2) Other changeover | 1,682,816.22 | 1,682,816.22 | |
4. Closing balance | 1,896,101,345.45 | 24,934,302.10 | 1,921,035,647.55 |
III. Depreciation provision | |||
1. Opening balance | - | - | - |
4. Closing balance | - | - | - |
IV. Book value | |||
1. Closing book value | 6,180,280,697.52 | 171,640,322.56 | 6,351,921,020.08 |
2. Opening book value | 6,284,662,399.35 | 177,187,291.01 | 6,461,849,690.36 |
At the end of the period, the percentage of the intangible assets formed through the Company'sinternal research and development in the balance of intangible assets was 1.03%
(2). Land use right for which the ownership certificate has not been obtained
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
27. Development expenses
√Applicable □Not applicable
Unit: RMB
Item | Opening amount Balance | Increase in the current period | Decrease in the current period | Closing amount Balance |
Internal | Recognized as |
development expenditure | intangible assets | |||
The development project for platform “chinagoods” | 552,640.71 | 12,467,296.25 | - | 13,019,936.96 |
Kuaijietong Core Payment System | 4,108,355.16 | 2,806,864.66 | 5,346,188.96 | 1,569,030.86 |
Total | 4,660,995.87 | 15,274,160.91 | 5,346,188.96 | 14,588,967.82 |
Other notes:
Nil
28. Goodwill
(1). Original book value of goodwill
√Applicable □Not applicable
Unit: RMB
The name of the invested unit or matters forming goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Formed by a business combination | Disposal | |||
Xunchi Group | 284,916,367.87 | - | - | 284,916,367.87 |
Total | 284,916,367.87 | - | - | 284,916,367.87 |
(2). Provision for goodwill impairment
√Applicable □Not applicable
Unit: RMB
The name of the invested unit or matters forming goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Provision | Disposal | |||
Xunchi Group | - | - | - | - |
Total | - | - | - | - |
(3). Information on the assets group or combination of assets groups to which the
goodwill belongs
√Applicable □Not applicable
In July 2022, the Group acquired 100% equity of Zhejiang Haier Network Technology Co.,Ltd. and Zhejiang Haier Network Technology Co., Ltd.'s subsidiary Kuaijietong Payment ServiceCo., Ltd. (hereinafter referred to as "Xunchi Group"), forming a goodwill of RMB 284,916,367.87.
The goodwill obtained from business combination has been allocated to the following assetgroups or combination of asset groups for impairment test:
Kuaijietong asset group
The goodwill of the Group is allocated to the Kuaijietong asset group for impairment testing.The asset group is composed of Kuaijietong Payment Service Co., Ltd., a subsidiary of ZhejiangHaier Network Technology Co., Ltd. Since the synergistic effect of the acquisition of XunchiGroup is reflected in the Kuaijietong's subsidiaries, the main cash flow generated by theKuaijietong's subsidiaries is independent of other subsidiaries of the Group, and the Groupmanages the production activities of the Kuaijietong's subsidiaries independently, so thegoodwill is allocated to the Kuaijietong asset group.
(4). Goodwill impairment test process, key parameters (e.g. growth rate in the forecast
period, growth rate in the stable period, profit margin, discount rate, forecast periodfor the estimate of present value of future cash flows, if applicable) and recognitionof goodwill impairment loss
□Applicable √Not applicable
(5). Impact of goodwill impairment test
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
29. Long-term prepaid expenses
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Amortized amount in the current period | Closing balance |
Decoration of buildings and structures | 296,452,554.64 | 434,300.01 | 33,762,748.04 | 263,124,106.61 |
Advertising facilities | 10,473,416.25 | 602,033.02 | 5,561,467.97 | 5,513,981.30 |
Total | 306,925,970.89 | 1,036,333.03 | 39,324,216.01 | 268,638,087.91 |
Other notes:
Nil
30. Deferred income tax assets/deferred income tax liabilities
(1). Deferred income tax assets having not been offset
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance | ||
Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
Provision for impairment of assets | 14,972,784.88 | 3,743,196.22 | 18,828,747.02 | 4,707,186.78 |
Unrealized profits of internal transactions | 1,094,793.10 | 273,698.28 | 1,094,793.10 | 273,698.28 |
Deductible losses | 1,039,362.24 | 259,840.56 | 1,039,362.23 | 259,840.56 |
Recognized but unpaid liabilities | 245,863,907.30 | 61,465,976.83 | 301,006,872.77 | 75,251,718.21 |
Overspent advertising cost | 12,547,314.44 | 3,136,828.61 | 12,547,314.43 | 3,136,828.61 |
Right-of-use assets and lease liabilities | 119,938,342.46 | 29,984,585.62 | 6,238,418.88 | 1,559,604.71 |
Asset-related government grants | 79,879,800.00 | 19,969,950.00 | 79,879,800.00 | 19,969,950.00 |
Changes in the fair value of other non-current financial assets | 129,478,401.20 | 32,369,600.30 | 122,472,837.68 | 30,618,209.42 |
Changes in fair value of trading financial assets | 975,487.52 | 243,871.88 | 3,854,431.84 | 963,607.96 |
Change in fair value of other equity instruments investment | - | - | 54,424,627.13 | 13,606,156.78 |
Total | 605,790,193.14 | 151,447,548.30 | 601,387,205.08 | 150,346,801.31 |
(2). Deferred income tax liabilities having not been offset
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance | ||
Taxable temporary difference | Deferred income tax Debt | Taxable temporary difference | Deferred income tax Debt | |
Asset evaluation appreciation for merger of the enterprises not under | 24,853,936.77 | 6,213,484.20 | 27,573,081.34 | 6,893,270.33 |
common control | ||||
Change in fair value of other equity instruments investment | 25,848,868.92 | 6,462,217.23 | - | - |
Right-of-use assets and lease liabilities | 108,242,153.82 | 27,060,538.46 | - | - |
Changes in the fair value of other non-current financial assets | 352,597,807.91 | 88,149,451.98 | 352,597,807.91 | 88,149,451.98 |
Total | 511,542,767.42 | 127,885,691.87 | 380,170,889.25 | 95,042,722.31 |
(3). Deferred income tax assets or liabilities presented in net amount after offsetting
□Applicable √Not applicable
(4). Breakdown of unrecognized deferred income tax assets
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Deductible temporary difference | 30,468,765.02 | 13,856,330.50 |
Deductible losses | 848,202,955.01 | 857,701,806.92 |
Total | 878,671,720.03 | 871,558,137.42 |
(5). The deductible loss in unrecognized deferred income tax assets will be due in thefollowing years
√Applicable □Not applicable
Unit: RMB
Year | Closing amount | Opening amount | Remarks |
2023 | 146,809,087.31 | ||
2024 | 141,460,230.07 | 143,780,379.93 | |
2025 | 234,332,579.07 | 214,526,489.77 | |
2026 | 253,334,267.99 | 235,236,244.78 | |
2027 | 101,523,352.45 | 117,349,605.13 | |
2028 | 117,552,525.43 | - | |
Total | 848,202,955.01 | 857,701,806.92 | / |
Other notes:
√Applicable □Not applicable
The Group believes that, the deductible temporary differences including the aforementionedprovision for asset impairmentand the deductible losses of some subsidiaries can be deducted inthe foreseeable future, and it is expected that the Group will have sufficient pre-tax profit fordeduction during the reversing period. Therefore, the Group deemed it necessary to recognizethe above deferred income tax assets.
31. Other non-current assets
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Prepaid land transfer fees | 138,253,316.00 | - | 138,253,316.00 | 138,253,316.00 | - | 138,253,316.00 |
Total | 138,253,316.00 | - | 138,253,316.00 | 138,253,316.00 | - | 138,253,316.00 |
Other notes:
Nil
32. Short-term borrowings
(1). Classification of short-term borrowings
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Credit loans | 1,809,722,500.02 | 1,059,287,361.11 |
Total | 1,809,722,500.02 | 1,059,287,361.11 |
Note to the classification of short-term borrowings:
Nil
(2). Overdue short-term borrowings
□Applicable √Not applicable
Other notes:
√Applicable □Not applicable
As of June 30, 2023, the annual interest rate of the above-mentioned loan was 2.35%-3.75% (December 31, 2022: 2.35% -4.151%).
33. Held-for-trading financial liabilities
□Applicable √Not applicable
34. Derivative financial liabilities
□Applicable √Not applicable
35. Notes payable
□Applicable √Not applicable
36. Accounts payable
(1). Presentation of accounts payable
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Accounts payable for market and auxiliary works projects | 298,935,362.25 | 881,114,454.44 |
Trade payables | 69,539,451.17 | 58,894,383.76 |
Accounts payable for real estate projects | 52,102,031.86 | 216,635,705.68 |
Accounts payable for procurement for the hotel project | 32,820,089.58 | 17,465,421.40 |
Other | 21,919,079.21 | 17,204,438.87 |
Total | 475,316,014.07 | 1,191,314,404.15 |
(2). Important accounts payable with age over 1 year
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Reasons for not being paid or carried forward |
Warranty premium | 8,687,983.28 | Under warranty or not billed |
Total | 8,687,983.28 | / |
Other notes:
√Applicable □Not applicable
The accounts payable are free of interest and are generally paid within two months afterreceipt of the payment notice or based on the project contracts and progress of projects. Thebalance payments for the projects are made after completion of settlement.
37. Advances from customers
(1). Presentation of advances from customers
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Advance receipt of merchant payment | 431,917,765.67 | 639,009,194.79 |
Rental advances | 204,656,942.67 | 236,525,969.44 |
Other | 11,950,941.50 | 10,458,105.25 |
Total | 648,525,649.84 | 885,993,269.48 |
(2). Important advances with the age over 1 year
□Applicable √Not applicable
Other notes:
√Applicable □Not applicable
Since the advances from customers are mainly from the advance use fees for shops and thesingle amount is small, as of June 30, 2023, there was no single large advance from customerswith an age of more than 1 year.
38. Contract liabilities
(1). Overview of contract liabilities
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Advances from customers for use fee of shops | 2,199,386,342.82 | 2,982,431,412.43 |
Advances from customers for goods | 620,817,196.70 | 653,697,926.33 |
Advances from customers for advertising fee | 225,190,284.87 | 228,163,127.56 |
Advance payment service fee | 42,930,659.86 | 33,407,547.17 |
Advance payment for exhibition | 24,195,203.57 | 23,697,301.00 |
Advances from customers for use fee of networking cables | 15,135,900.94 | 17,747,693.18 |
Advances from customers for loyalty ofbrands | 9,297,169.67 | 11,119,366.97 |
Advances from customers for housing purchase | 4,536,322.88 | 31,199,591.78 |
Other | 18,185,824.04 | 9,574,055.14 |
Total | 3,159,674,905.35 | 3,991,038,021.56 |
(2). Amount of and reasons for material changes to book value during the reporting
period
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
39. Payroll payable
(1). Presentation of payroll payable
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
I. Short-term compensation | 179,702,065.74 | 239,354,632.36 | 301,956,937.18 | 117,099,760.92 |
II. Post employment benefits – defined contribution plan | 3,433,248.77 | 16,274,949.53 | 17,222,708.39 | 2,485,489.91 |
III. Severance benefits | - | 165,265.73 | 165,265.73 | - |
Total | 183,135,314.51 | 255,794,847.62 | 319,344,911.30 | 119,585,250.83 |
(2). Presentation of short-term compensation
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
1. Salary, bonus, allowance and subsidy | 178,068,953.19 | 197,985,112.47 | 261,739,627.70 | 114,314,437.96 |
2. Employee benefits | - | 13,777,309.20 | 13,777,309.20 | - |
3. Social security contribution | 1,271,605.09 | 9,827,039.75 | 9,855,962.99 | 1,242,681.85 |
In which: contribution to medical insurance scheme | 1,094,163.11 | 9,409,814.90 | 9,427,785.52 | 1,076,192.49 |
Contribution to work-related injury insurance scheme | 118,960.20 | 380,384.91 | 391,337.53 | 108,007.58 |
Contribution to maternity insurance scheme | 58,481.78 | 36,839.94 | 36,839.94 | 58,481.78 |
4. Housing provident fund | 63,951.00 | 12,810,053.00 | 12,802,550.00 | 71,454.00 |
5. Contribution to trade union fund and employee education fund | 297,556.46 | 4,955,117.94 | 3,781,487.29 | 1,471,187.11 |
Total | 179,702,065.74 | 239,354,632.36 | 301,956,937.18 | 117,099,760.92 |
(3). Presentation of defined contribution plan
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
1. Contribution to the basic endowment insurance scheme | 3,232,206.01 | 15,671,373.06 | 16,589,269.75 | 2,314,309.32 |
2. Contribution to the unemployment insurance scheme | 201,042.76 | 603,576.47 | 633,438.64 | 171,180.59 |
Total | 3,433,248.77 | 16,274,949.53 | 17,222,708.39 | 2,485,489.91 |
Other notes:
□Applicable √Not applicable
40. Tax payable
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
VAT | 4,985,229.25 | 56,402,798.28 |
Business tax | -240,013.55 | -240,013.55 |
Urban maintenance and construction tax | 327,484.92 | 2,521,434.47 |
Corporate income tax | 86,742,057.16 | 6,138,842.64 |
Individual income tax | 4,478,946.88 | 1,275,355.73 |
Land appreciation tax | 10,964.44 | 66,652.63 |
Real estate tax | 43,410,929.52 | 84,142,438.27 |
Land use tax | 33,928,267.93 | 60,454,035.23 |
Other | 487,685.09 | 4,236,880.71 |
Total | 174,131,551.64 | 214,998,424.41 |
Other notes:
As of June 30, 2023, the details of the main taxes prepaid by the Group are as follows:
Unit: RMB
Item | Qiantang Impression Real Estate Project | Occident Center Real Estate Project | Total amount of prepaid tax |
Business tax | 240,013.55 | - | 240,013.55 |
Urban maintenance and construction tax | - | 731,793.32 | 731,793.32 |
Land appreciation tax | 247,373.48 | 247,373.48 | |
Education surcharge and local education surcharge | - | 522,709.51 | 522,709.51 |
Total | 240,013.55 | 1,501,876.31 | 1,741,889.86 |
41. Other payables
Presentation of items
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Other payables | 1,615,071,971.63 | 1,325,596,105.43 |
Total | 1,615,071,971.63 | 1,325,596,105.43 |
Other notes:
NilInterest payable
□Applicable √Not applicable
Dividend payable
□Applicable √Not applicable
Other payables
(1). Presentation of other payables by nature
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Withholdings, deposit and margin | 457,891,193.69 | 490,392,164.12 |
Pending investment refunds | 705,903,783.09 | 429,637,665.00 |
Operating expenses payable | 369,302,680.90 | 284,502,534.04 |
Restricted stock incentive plan | 80,753,291.00 | 120,092,075.00 |
Other | 1,221,022.95 | 971,667.27 |
Total | 1,615,071,971.63 | 1,325,596,105.43 |
(2). Important other payables with account age over 1 year
□Applicable √Not applicable
Other notes:
√Applicable □Not applicable
Since other payables mainly come from the deposit deposits of market shops and thebidding deposits of engineering projects, with small individual amounts, on June 30, 2023, therewere no important other payables with an aging of more than 1 year.
42. Held-for-sale liabilities
□Applicable √Not applicable
43. Non-current liabilities due within one year
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Long-term borrowings within one year | 45,630,869.44 | 345,934.69 |
Bonds payable due within 1 year | 64,785,452.04 | 61,508,191.79 |
Lease liabilities due within 1 year | 24,530,889.40 | 24,998,166.53 |
Total | 134,947,210.88 | 86,852,293.01 |
Other notes:
Nil
44. Other current liabilities
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Short-term financing notes payable | 3,010,718,482.87 | 3,012,256,419.90 |
Payment business reserve | 420,922,096.01 | 397,125,623.54 |
To-be-reported output tax | 66,658,093.44 | 59,992,173.80 |
Dividend payable to to-be-recognized accounts | 2,653,400.82 | 2,449,697.11 |
Dividend announced but not collected before listing | 2,083,112.65 | 2,083,112.65 |
Total | 3,503,035,185.79 | 3,473,907,027.00 |
Changes in short-term bonds payable:
√Applicable □Not applicable
Unit: RMB
Bond Name | Face value | Issuing Date | Bond Term | Issuing Amount | Opening amount Balance | Current period Issuing | Interest accrued based on face value | Premium/discount amortization | Current period Repayment | Closing amount Balance |
Super-short-term commercial paper | 100 | September 21, 2022 | 240 days | 1,000,000,000.00 | 1,005,457,214.61 | - | 7,901,917.80 | 383,333.34 | 1,013,742,465.75 | - |
Super-short-term commercial paper | 100 | Oct 26, 2022 | 240 days | 1,000,000,000.00 | 1,003,733,756.28 | - | 10,901,369.86 | 488,161.53 | 1,015,123,287.67 | - |
Super-short-term commercial paper | 100 | November 22, 2022 | 120 days | 1,000,000,000.00 | 1,003,065,449.01 | - | 6,575,342.47 | 222,222.22 | 1,009,863,013.70 | - |
Super-short-term commercial paper | 100 | March 20, 2023 | 179 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 8,042,465.75 | 286,111.11 | - | 1,007,831,354.64 |
Super-short-term commercial paper | 100 | May 17, 2023 | 177 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 3,168,493.15 | 123,287.67 | - | 1,002,806,849.31 |
Super-short-term commercial paper | 100 | June 20, 2023 | 269 days | 1,000,000,000.00 | - | 1,000,000,000.00 | 807,671.23 | 19,829.91 | - | 1,000,080,278.92 |
Total | / | / | / | 6,000,000,000.00 | 3,012,256,419.90 | 3,000,000,000.00 | 37,397,260.26 | 1,522,945.78 | 3,038,728,767.12 | 3,010,718,482.87 |
Other notes:
√Applicable □Not applicable
As of June 30, 2023, the annual interest rate of the above-mentioned short-term financing bonds was 2.57% -2.85% (December 31, 2022: 1.75%-3.00%).
45. Long-term borrowings
(1). Classification of long-term borrowings
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Credit loans | 648,185,725.67 | 404,500,000.00 |
Total | 648,185,725.67 | 404,500,000.00 |
Notes on the classification of long-term borrowings:
Nil
Other notes, including the interest rate range:
√Applicable □Not applicable
As of June 30, 2023, the annual interest rate of the above-mentioned loan was 2.70% -3.20%(December 31, 2022: 2.70% -2.90%).
46. Bonds payable
(1). Bonds payable
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Bonds payable | 3,497,930,395.94 | 3,497,416,819.75 |
Total | 3,497,930,395.94 | 3,497,416,819.75 |
(2). Change in bonds payable (excluding other financial instruments classified as financial liabilities, such as preferred shares and
perpetual bonds)
√Applicable □Not applicable
Unit: RMB
Bond Name | Face value | Issuing Date | Bond Term | Issuing Amount | Opening amount Balance | Current period Issuing | Interest accrued based on face value | Premium/discount amortization | Current period Repayment | Transferred in this year and due within one year | Closing amount Balance |
MTN | 100 | Feb 24, 2022 | 3Y | 1,000,000,000.00 | 999,177,980.44 | - | 16,314,794.52 | 181,032.64 | - | 16,314,794.52 | 999,359,013.08 |
MTN | 100 | Mar 29, 2022 | 3Y | 500,000,000.00 | 499,572,104.09 | - | 8,851,643.83 | 90,265.96 | - | 8,851,643.83 | 499,662,370.05 |
MTN | 100 | Jul 20, 2022 | 3Y | 500,000,000.00 | 499,516,212.89 | - | 7,438,356.16 | 90,776.60 | - | 7,438,356.16 | 499,606,989.49 |
Corporate bonds | 100 | Sep 1, 2022 | 3Y | 800,000,000.00 | 799,551,093.23 | - | 9,997,150.68 | 80,840.92 | - | 9,997,150.68 | 799,631,934.15 |
Corporate bonds | 100 | Sep 22, 2022 | 3Y | 700,000,000.00 | 699,599,429.10 | - | 11,425,315.06 | 70,660.07 | - | 11,425,315.06 | 699,670,089.17 |
Total | / | / | / | 3,500,000,000.00 | 3,497,416,819.75 | - | 54,027,260.25 | 513,576.19 | - | 54,027,260.25 | 3,497,930,395.94 |
(3). Conditions and time for the conversion of convertible corporate bonds
□Applicable √Not applicable
(4). Notes on other financial instruments classified as financial liabilitiesBasic information of other financial instruments such as preferred shares and perpetual bondsoutstanding at the end of the reporting period
□Applicable √Not applicable
Changes in other financial instruments such as preferred shares and perpetual bondsoutstanding at the end of the reporting period
□Applicable √Not applicable
Basis for other financial instruments being classified as financial liabilities
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
47. Lease liabilities
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Undiscounted amount of finance lease payables | 320,972,277.53 | 320,577,235.56 |
Unrecognized financing charges | -94,947,012.02 | -88,955,333.06 |
Lease liabilities due within 1 year | -24,530,889.40 | -24,998,166.53 |
Total | 201,494,376.11 | 206,623,735.97 |
Other notes:
Note: The Group uses the incremental borrowing rate of 2.78%-8.01% as the discount rateto calculate book value to determine the lease liability and measure right-of-use assets.
48. Long-term accounts payable
Presentation of items
□Applicable √Not applicable
Long-term accounts payable
□Applicable √Not applicable
Special accounts payable
□Applicable √Not applicable
49. Long-term payroll payable
□Applicable √Not applicable
50. Estimated liabilities
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Closing balance | Cause of formation |
Pending L/C losses | 110,620,306.10 | 110,620,306.10 | |
Total | 110,620,306.10 | 110,620,306.10 | / |
Other notes, including the notes on related important assumptions and estimates of importantestimated liabilities:
In 2017, the letters of credit issued by the Group’s subsidiary based on international tradeagency business became overdue successively due to the principals’ failure to make paymentsas agreed. Based on the principle of prudence, the Group recognized estimated liabilities for theestimated potential losses. On April 30, 2018, the Group lost control over the subsidiary due to itsdisposal of some equity in the subsidiary. Up to now, the first instance judgment has been madeand has not yet taken effect.
51. Deferred income
Overview of deferred income
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Cause of formation |
Asset-related government grants | 103,582,129.94 | 58,272,000.00 | 710,736.84 | 161,143,393.10 | |
Total | 103,582,129.94 | 58,272,000.00 | 710,736.84 | 161,143,393.10 | / |
Items involving government grants:
√Applicable □Not applicable
Unit: RMB
Liability item | Opening balance | Increase in grant amount in the current period | Amount recognized in other income in the current period | Closing balance | Asset-related or income-related |
Subsidy for service industry cluster project | 4,976,779.31 | - | 133,333.32 | 4,843,445.99 | Asset-related |
Interest subsidy for the international exhibition center construction fund | 18,725,550.63 | - | 577,403.52 | 18,148,147.11 | Asset-related |
Subsidy for Yiwu Comprehensive Bonded Zone Project | 79,879,800.00 | - | - | 79,879,800.00 | Asset-related |
Compensation for cross-border e-commerce logistics park project | - | 58,272,000.00 | - | 58,272,000.00 | Asset-related |
Other notes:
□Applicable √Not applicable
52. Other non-current liabilities
□Applicable √Not applicable
53. Capital stock
√Applicable □Not applicable
Unit: RMB
Opening balance | Increase or decrease in the current period (+, -) | Closing balance | |||
Issuing New shares | Other | Sub-total | |||
Total number of shares | 5,486,074,176.00 | - | - | - | 5,486,074,176.00 |
Other notes:
Nil
54. Other equity instruments
(1) Basic information of other financial instruments such as preferred shares andperpetual bonds outstanding at the end of the reporting period
□Applicable √Not applicable
(2) Changes in other financial instruments such as preferred shares and perpetualbonds outstanding at the end of the reporting period
□Applicable √Not applicable
Changes in other equity instruments in the current period, the reasons therefor and the basis forrelevant accounting treatment:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
55. Capital reserve
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Capital surplus (share premium) | 1,549,909,197.11 | 28,586,712.00 | - | 1,578,495,909.11 |
Stock incentive | 63,106,263.66 | 8,933,604.45 | 28,586,712.00 | 43,453,156.11 |
Other capital reserve | 38,130,573.19 | - | - | 38,130,573.19 |
Total | 1,651,146,033.96 | 37,520,316.45 | 28,586,712.00 | 1,660,079,638.41 |
Other notes including those on the changes in the current period and the reasons therefor:
The increase in capital reserve capital premium (capital stock premium) during this reportingperiod is due to the first batch of restricted stocks meeting the exercise conditions during the firstterm of sale. The capital reserve equity incentive corresponding to this portion of restrictedstocks of the Company has been transferred to this project at RMB 28,586,712.00.The increase in capital reserve - equity incentive during this reporting period is due to theCompany's confirmation of a share-based payment fee of RMB 8,933,604.45 during the waitingperiod, while the decrease is due to the first batch of restricted stocks that have met the exerciseconditions during the first selling period and have been transferred to capital reserve - capitalpremium (capital stock premium).
56. Treasury shares
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Restricted stock incentive plan | 119,483,675.00 | - | 38,730,384.00 | 80,753,291.00 |
Total | 119,483,675.00 | - | 38,730,384.00 | 80,753,291.00 |
Other notes including those on the changes in the current period and the reasons therefor:
The restricted stock incentive plan unlocked the first batch of restricted stocks in this period,reducing the number of treasury shares by 13,173,600, with a grant price of RMB 2.94 per share,and reducing the treasury shares by RMB 38,730,384.00 in this period.
57. Other comprehensive income
√Applicable □Not applicable
Unit: RMB
Item | Opening Balance | Amount in the current period | Closing Balance | ||
Amount before tax incurred in the current period | Less: income tax | Amount after tax attributable to parent company | |||
I. Other comprehensive income that cannot be reclassified into Profits and losses | -40,818,470.36 | 80,273,496.09 | 20,068,374.02 | 60,205,122.07 | 19,386,651.71 |
Change in fair value of other equity instruments investment | -40,818,470.36 | 80,273,496.09 | 20,068,374.02 | 60,205,122.07 | 19,386,651.71 |
II. Other comprehensive income to be reclassified into Profits and losses | 16,809,996.76 | 7,711,100.96 | - | 7,711,100.96 | 24,521,097.72 |
Other comprehensive income that can be transferred into Profits and losses under equity method | 4,060,531.46 | - | - | - | 4,060,531.46 |
Difference arising from the translation of foreign currency financial statements | 12,749,465.30 | 7,711,100.96 | - | 7,711,100.96 | 20,460,566.26 |
Total other comprehensive income | -24,008,473.60 | 87,984,597.05 | 20,068,374.02 | 67,916,223.03 | 43,907,749.43 |
Other notes, including those on the adjustment of the initially recognized amount of hedgeditems converted from the effective part of gains or losses from cash flow hedging:
Nil
58. Special reserve
□Applicable √Not applicable
59. Surplus reserve
√Applicable □Not applicable
Unit: RMB
Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
Statutory surplus reserve | 1,564,198,440.14 | - | - | 1,564,198,440.14 |
Discretionary surplus reserve | 40,195,855.68 | - | - | 40,195,855.68 |
Other | 11,688,840.91 | - | - | 11,688,840.91 |
Total | 1,616,083,136.73 | - | - | 1,616,083,136.73 |
Notes on surplus reserves, including those on the changes in the current period and the reasonstherefor:
Nil
60. Undistributed profits
√Applicable □Not applicable
Unit: RMB
Item | Current period | Previous year |
Undistributed profits at the end of the previous reporting period before adjustment | 6,651,440,591.35 | 6,059,496,846.85 |
Opening undistributed profits after adjustment | 6,651,440,591.35 | 6,059,496,846.85 |
Plus: net profits attributable to shareholders of the parent company in the current period | 1,998,333,646.74 | 1,104,719,091.71 |
Less: withdrawal of statutory surplus reserve | - | 110,873,341.23 |
General risk reserve | - | 1,038,991.13 |
Common share dividend payable | 356,594,821.44 | 400,863,014.85 |
Closing undistributed profits | 8,293,179,416.65 | 6,651,440,591.35 |
Details of the adjustment of opening undistributed profits:
1. The opening undistributed profits affected by the retroactive adjustment made in accordancewith the Accounting Standards for Enterprises and related new provisions amounted to RMB0.
2.The opening undistributed profits affected by the changes in accounting policies amounted toRMB0.
3. The opening undistributed profits affected by the correction of major accounting errorsamounted to RMB0.
4. The opening undistributed profits affected by changes in the scope of mergers caused bycommon control amounted to RMB0.
5. The opening undistributed profits affected by other adjustments together amounted to RMB0.
61. Operating revenue and operating cost
(1). Overview of operating revenue and operating cost
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period | ||
Revenue | Cost of sales | Revenue | Cost of sales | |
Main business | 4,981,391,903.99 | 3,497,747,787.03 | 4,047,360,914.45 | 3,106,283,447.96 |
Other businesses | 179,599,139.26 | 84,762,663.32 | 159,666,702.01 | 53,014,698.81 |
Total | 5,160,991,043.25 | 3,582,510,450.35 | 4,207,027,616.46 | 3,159,298,146.77 |
(2). Revenue generated from contracts
√Applicable □Not applicable
Unit: RMB
Classified by type of contract | Total |
Types of goods | |
Sales of goods | 2,837,601,444.17 |
The use of shops in Yiwu Market and its supporting services | 1,696,394,598.57 |
Hotel accommodation and catering services | 130,306,259.25 |
Revenue from use fees | 17,419,324.72 |
Other services | 294,652,655.65 |
Classified by business area | |
Chines mainland | 4,976,374,282.36 |
Classified by contract period | |
Revenue confirmed at certain time point | |
Sales of goods | 2,837,601,444.17 |
Hotel catering services | 68,408,571.83 |
Other services | 182,787,606.18 |
Revenue confirmed during certain time period | |
The use of shops in Yiwu Market and its supporting services | 1,696,394,598.57 |
Hotel accommodation service | 61,897,687.42 |
Revenue from use fees | 17,419,324.72 |
Other services | 111,865,049.47 |
Total | 4,976,374,282.36 |
Description of the income from contracts:
The income recognized in the current year and included in the opening book value ofcontractual liabilities is as follows:
Unit: RMB
Type of contract | Current period |
Sales of goods | 594,429,754.91 |
The use of shops in Yiwu Market and its supporting services | 1,599,615,654.43 |
Hotel accommodation service | 7,275,513.89 |
Other services | 104,740,586.68 |
Total | 2,306,061,509.91 |
(3). Contract performance obligations
√Applicable □Not applicable
Sales of goods
The performance obligation is fulfilled when the goods are delivered to the customer, andthe contract price is collected in advance before the goods are delivered to the customer orreceived upon the delivery of the goods.
The use of shops in Yiwu Market and its supporting services
The contractual performance obligation is fulfilled when providing the use of shops in YiwuMarket and the supporting services for business. For the use of shops in Yiwu Market and thesupporting services for business, the progress of contract performance is determined based onthe number of using days of the shops. Customers usually need to pay in advance before the useof shops in Yiwu Market and the supporting services for business are provided.
Hotel accommodation business
The performance obligation is fulfilled when providing hotel accommodation services. Forthe hotel accommodation business, the progress of contractual performance is determinedbased on the number of days of stay. For hotel accommodation services, a partial deposit iscollected from the customer first, and the remaining contract price is usually collected upon thecompletion of the hotel accommodation services.
Hotel catering business
The performance obligation is fulfilled when the hotel catering services are provided. Thecontract price for hotel catering services is usually charged when the hotel catering services areperformed.
Fixed -time paid funding services
The performance obligation is fulfilled when the fixed-time paid funding service is provided.For the fixed-time paid funding service, the progress of contractual performance is determinedbased on the number of using days the fund. For the fixed-time paid funding service, the contractprice is usually charged regularly as agreed in the contract.
(4). Amortization to remaining contract performance obligations
□Applicable √Not applicable
Other notes:
As of June 30, 2023, the transaction price allocated to the remaining contract performanceobligations was RMB 3,159,674,905.35. The Group expects that this amount will be recognizedas an income in the next 5 years with the progress of the relevant service.
62. Taxes and surcharges
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Real estate tax | 59,770,011.60 | 57,303,381.47 |
Stamp duty | 2,760,376.78 | 2,342,930.19 |
Urban maintenance and construction tax | 2,592,625.45 | 847,074.98 |
Education surcharge | 1,111,245.71 | 376,577.58 |
Local education surcharge | 740,831.51 | 251,051.78 |
Land appreciation tax | 303,673.11 | 1,040,058.76 |
Cultural undertaking development fee | 285,127.01 | 200,629.33 |
Vehicle and vessel use tax | 1,380.00 | 2,040.00 |
Consumption tax | 56.64 | 121.51 |
Business tax | - | 9,307.56 |
Land use tax | -20,871,643.50 | 939,264.19 |
Total | 46,693,684.31 | 63,312,437.35 |
Other notes:
Nil
63. Sales expenses
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Marketing expenses | 44,804,065.01 | 58,838,620.46 |
Security and insurance expenses | 16,637,122.08 | 13,603,561.83 |
Advertising expenses | 8,817,741.95 | 15,210,375.07 |
Water, electricity and fuel expenses | 3,001,783.95 | 4,108,797.27 |
Depreciation and amortization | 68,097.07 | 59,697.22 |
Other | 4,434,858.43 | 1,461,011.88 |
Total | 77,763,668.49 | 93,282,063.73 |
Other notes:
Nil
64. Administrative expenses
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Employee and uniform expenses | 167,894,577.09 | 150,954,373.48 |
Depreciation and amortization | 73,931,835.81 | 41,529,941.99 |
Intermediary expenses | 5,181,120.84 | 7,648,247.31 |
Office expenses | 5,162,481.69 | 4,578,803.69 |
Travel expenses | 3,181,309.38 | 727,343.72 |
Promotion and market traders introduction expenses | 174,131.61 | 95,739.93 |
Start-up fee | 61,043.87 | 11,488,120.65 |
Other | 12,312,567.93 | 9,548,797.50 |
Total | 267,899,068.22 | 226,571,368.27 |
Other notes:
Nil
65. R&D expenses
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Labor cost | 7,187,298.15 | 3,136,584.80 |
Technology R&D expenses | 3,114,081.41 | 2,470,954.57 |
Depreciation and amortization | 93,741.44 | 62,233.31 |
Other | 129,128.20 | 38,274.90 |
Total | 10,524,249.20 | 5,708,047.58 |
Other notes:
Nil
66. Financial expenses
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Interest expenses | 125,445,414.65 | 154,500,444.77 |
Amortization of discount on short-term commercial papers | 1,974,371.03 | 1,969,098.85 |
Interest income | -38,139,798.22 | -89,271,567.84 |
Capitalized interest | -35,577,046.98 | - |
Foreign exchange gains or losses | -6,265,717.17 | -11,023,802.13 |
Amortization of unrecognized financing expenses | 5,893,167.81 | 6,001,626.16 |
Other | 273,509.77 | 716,135.64 |
Total | 53,603,900.89 | 62,891,935.45 |
Other notes:
The capitalized amount of borrowing costs has been included in the construction inprogress.
67. Other income
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Subsidy for Ocean (Bay Area) Economic Development Fund | 7,800,000.00 | - |
Employment stabilization subsidy | 40,818.03 | 2,233,836.28 |
Additional deduction of input tax | 4,318,534.11 | 2,103,468.66 |
Grant for the construction and operation of the credit data center | 500,000.00 | 2,000,000.00 |
Yiwu Municipal Bureau of Development and Reform 2021 Special Fund for Innovation and Development Zone | - | 1,800,000.00 |
Yiwu Municipal Bureau of Commerce 2021 Export Credit Insurance Subsidy | - | 1,527,680.00 |
Yiwu Municipal Bureau of Commerce Business Promotion Fund Subsidy | - | 1,000,000.00 |
Market Development Committee 2021 Local Financial Policy Incentives for Encouraging E-commerce | - | 940,693.24 |
Interest subsidy for the international exhibition center construction fund | 577,403.52 | 577,403.52 |
Additional deduction of R&D input award from Yiwu Municipal Science and Technology Bureau | - | 500,800.00 |
Pilot Subsidy for Strong Counties in Service Industry | - | 500,000.00 |
Science and Technology Bureau Innovation Entity Creation Award | - | 500,000.00 |
Yiwu Municipal Bureau of Commerce Promotion and Opening Rewards | - | 480,400.00 |
Special funds for supporting scientific and technological development | 400,000.00 | - |
Special fund award for the development of the exhibition industry in 2023 | 391,800.00 | - |
Subsidies for Helping Tourism Enterprises Fight | - | 390,000.00 |
Against the Epidemic and Promoting Development | ||
Yiwu Municipal Bureau of Commerce 3-levies-3-refunds Rewards | - | 304,461.00 |
Refund of the service charges of individual income tax | 280,128.18 | 269,632.38 |
VAT reduction for the recruitment of retired soldiers finding jobs on their own | - | 223,500.00 |
Other | 322,852.92 | 1,363,373.61 |
Total | 14,631,536.76 | 16,715,248.69 |
Other notes:
Nil
68. Investment income
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Income from long-term equity investment calculated with the equity method | 1,017,671,762.53 | 748,873,944.26 |
Investment income from disposal of long-term equity investment | 11,475,509.19 | - |
Interest income from debt investment during holding period | 1,252,476.06 | - |
Investment income from disposal of held-for-trading financial assets | 1,763,697.53 | 1,822,875.64 |
Investment income from disposal of wealth management products | 31,995.58 | 26,619.73 |
Income acquired from other non-current financial assets during the holding period | 2,110,591.00 | - |
Investment income from disposal of other non-current financial assets | -805,917.38 | - |
Total | 1,033,500,114.51 | 750,723,439.63 |
Other notes:
Nil
69. Income from net exposure hedging
□Applicable √Not applicable
70. Income from changes in fair value
√Applicable □Not applicable
Unit: RMB
Sources of income from changes in fair value | Amount in the current period | Amount in the previous period |
Held-for-trading financial assets | 2,123,980.00 | -1,667,262.00 |
Other non-current financial assets | -9,305,911.08 | -546,331.53 |
Total | -7,181,931.08 | -2,213,593.53 |
Other notes:
Nil
71. Loss of impairment of credit
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Bad debt loss of accounts receivable | 529,746.89 | -219,174.64 |
Loss for bad debts of other receivables | 19,170.96 | 247,110.08 |
Total | 548,917.85 | 27,935.44 |
Other notes:
Nil
72. Loss of impairment of assets
□Applicable √Not applicable
73. Income from disposal of assets
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Income from disposal of property, plant and equipment | 165,883,894.78 | 1,389.88 |
Total | 165,883,894.78 | 1,389.88 |
Other notes:
□Applicable √Not applicable
74. Revenue from non-operating activities
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period | Amount recognized in Profits and losses of nonrecurring profits and losses for the current period |
Government grants | - | 200,000.00 | - |
Incomes from liquidated damages | 2,515,430.08 | 1,329,393.77 | 2,515,430.08 |
Other | 596,279.55 | 2,488,105.92 | 596,279.55 |
Total | 3,111,709.63 | 4,017,499.69 | 3,111,709.63 |
Government grant included in current Profits and losses
√Applicable □Not applicable
Unit: RMB
Grant items | Amount in the current period | Previous amount | Asset-related or income-related |
Financial subsidies for the development of the digital entertainment industry | - | 200,000.00 | Income-related |
Other notes:
□Applicable √Not applicable
75. Expenses from non-operating activities
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period | Amount recognized in Profits and losses of nonrecurring profits and losses for the current period |
Total loss for disposal of non-current assets | 108,245.71 | 56,100.78 | 108,245.71 |
Including: loss for disposal of property, plant and equipment | 108,245.71 | 56,100.78 | 108,245.71 |
External donation | - | 44,250.00 | - |
Other | 89,722.64 | 329,652.83 | 89,722.64 |
Total | 197,968.35 | 430,003.61 | 197,968.35 |
Other notes:
Nil
76. Income tax expenses
(1) Overview of income tax expenses
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Current income tax expenses | 319,963,973.46 | 128,391,456.05 |
Deferred income tax expenses | 11,673,848.56 | 13,888,013.12 |
Total | 331,637,822.02 | 142,279,469.17 |
(2) Adjustment process of accounting profits and income tax expenses
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period |
Profits before tax | 2,332,292,295.89 |
Income tax expenses calculated at the statutory/applicable tax rate | 583,073,073.97 |
Impact of different tax rates applied by subsidiaries | 1,991,502.97 |
Effect of adjusting income tax of previous period | -20,073,416.15 |
Effect of non-taxable income | -2,859,790.04 |
Effect of non-deductible costs, expenses and losses | 381,320.92 |
Effect of using deductible losses of unrecognized deferred income tax assets in previous period | -5,845,060.38 |
Effect of deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period | 29,388,131.36 |
Profits or losses attributable to joint ventures and associates | -254,417,940.63 |
Income tax expenses | 331,637,822.02 |
Other notes:
□Applicable √Not applicable
77. Other comprehensive income
√Applicable □Not applicable
For details, please refer to Note 57. Other comprehensive income
78. Items of cash flow statement
(1). Other cash receipts relating to operating activities
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Deposit and margin received | 82,617,679.95 | 84,113,126.29 |
Government grants received | 64,401,761.02 | 45,748,748.69 |
Bank deposit interest income received | 38,139,798.22 | 89,271,567.84 |
Bank reserve received | 1,930,508.43 | 1,532,062.05 |
Other | 861,796.06 | 2,226,957.24 |
Total | 187,951,543.68 | 222,892,462.11 |
Notes on other cash receipts relating to operating activities:
Nil
(2). Other cash payments relating to operating activities
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Fees paid | 137,806,934.75 | 159,441,304.15 |
Margins paid | 115,118,650.38 | 184,207,298.86 |
Other | 4,355,093.88 | 3,690,541.84 |
Total | 257,280,679.01 | 347,339,144.85 |
Notes on other cash payments relating to operating activities:
Nil
(3). Other cash receipts relating to investing activities
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Financial assistance received from joint ventures and affiliated subsidiaries | 501,750,200.00 | 901,774,483.00 |
Total | 501,750,200.00 | 901,774,483.00 |
Notes on other cash receipts relating to investing activities:
Nil
(4). Other cash payments relating to investing activities
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Refund of investment to be confirmed paid | 11,553,412.19 | - |
Financial assistance paid to the joint venture company | - | 68,507,285.00 |
Total | 11,553,412.19 | 68,507,285.00 |
Other cash paid related to investment activities:
Nil
(5). Other cash receipts relating to financing activities
□Applicable √Not applicable
(6). Other cash payments relating to financing activities
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Lease payments paid | 14,105,217.90 | 11,970,676.79 |
Total | 14,105,217.90 | 11,970,676.79 |
Other cash paid related to financing activities:
Nil
79. Supplements to cash flow statement
(1) Supplements to cash flow statement
√Applicable □Not applicable
Unit: RMB
Supplements | Amount in the current period | Amount in the previous period |
1.Adjust net profits to cash flow from operating activities: | ||
Net profits | 2,000,654,473.87 | 1,222,526,064.33 |
Loss of impairment of credit | -548,917.85 | -27,935.44 |
Depreciation of fixed assets, depletion of oil and gas assets and depreciation of bearer biological assets | 188,468,645.61 | 170,090,217.42 |
Amortization of right-of-use assets | 15,937,530.77 | 14,089,021.32 |
Amortization of intangible assets | 109,533,646.98 | 75,870,218.25 |
Depreciation and amortization of investment real estate | 69,501,857.47 | 64,839,383.45 |
Amortization of long-term prepaid expenses | 39,324,216.01 | 22,066,225.88 |
Loss from disposal of fixed assets, intangible assets and other long-term assets (gains indicated by “-”) | -165,883,894.78 | -1,389.88 |
Loss from fixed assets retirement (gains indicated by “-”) | 108,245.71 | 56,100.78 |
Loss from changes in fair value (gains indicated by “-”) | 7,181,931.08 | 2,213,593.53 |
Financial expenses (gains indicated by “-”) | 97,735,906.51 | 154,500,444.77 |
Investment loss (gains indicated by “-”) | -1,050,919,439.23 | -776,830,272.96 |
Decrease in deferred income tax assets (increase indicated by “-”) | -1,100,746.99 | 10,068,696.50 |
Increase in deferred income tax liabilities (decrease indicated by “-”) | 32,842,969.56 | -22,230,480.08 |
Decrease in inventory (increase indicated by “-”) | 106,993,100.52 | -357,352,526.67 |
Decrease in operating receivables (increase indicated by “-”) | -381,251,455.03 | 361,791,176.72 |
Increase in operating payables (decrease indicated by “-”) | -925,330,874.43 | -1,608,255,871.54 |
Net cash flow from operating activities | 143,247,195.78 | -666,587,333.62 |
2.Significant investing and financing activities not involving cash receipt and payment: | ||
3.Net changes in cash and cash equivalents: | ||
Closing balance of cash | 2,164,979,668.87 | 3,474,333,987.64 |
Less: opening balance of cash | 1,981,200,941.64 | 4,006,468,325.47 |
Net increase in cash and cash equivalents | 183,778,727.23 | -532,134,337.83 |
(2) Net cash paid for acquisition of subsidiaries in the current period
□Applicable √Not applicable
(3) Net cash received from disposal of subsidiaries in the current period
√Applicable □Not applicable
Unit: RMB
Amount | |
Cash or cash equivalents received for disposal of subsidiaries in the current period | 23,924,400.00 |
Bank deposits | 23,924,400.00 |
Less: Cash and cash equivalents held by the Company on the date of loss of control | 11,441,569.06 |
Bank deposits | 11,441,569.06 |
Add: Cash or cash equivalents received in the current period from the disposal of the subsidiary in the previous period | - |
Net cash received from disposal of subsidiaries | 12,482,830.94 |
Other notes:
On December 19, 2022, the wholly-owned subsidiary of the Company, Yiwu ChinaCommodities City Logistics and Warehousing Co., Ltd. (hereinafter referred to as "Logistics andWarehousing Company"), publicly listed and transferred its 60% equity of Yiwu Huanqiu YidaLogistics Co., Ltd. on the Yiwu Property Rights Exchange.On February 2, 2023, Logistics and Warehousing Company received a public listing transfertransaction notice from the Yiwu Property Rights Exchange, and on February 3, received anequity transfer payment of RMB 23.9244 million after deducting the transaction service fee ofRMB 195,600.On February 21, 2023, Logistics and Warehousing Company signed an equity transferagreement with Zhejiang Zhijie Yuangang International Supply Chain Technology Co., Ltd.,agreeing that Logistics and Warehousing Company would transfer its held registered capital ofRMB 30 million (60% of the total registered capital) of Yiwu Huanqiu Yida Logistics Co., Ltd. toZhejiang Zhijie Yuangang International Supply Chain Technology Co., Ltd, and completed theamendment of the articles of association and industrial and commercial registration of YiwuHuanqiu Yida Logistics Co., Ltd. on the same day.
(4) Composition of cash and cash equivalents
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
I. Cash | 2,164,979,668.87 | 1,981,200,941.64 |
In which: cash on hand | 218,145.54 | 220,471.11 |
Bank deposit that can be used for payment at any time | 2,164,704,980.28 | 1,980,229,200.48 |
Other monetary capital that can be used for payment at any time | 56,543.05 | 751,270.05 |
III. Closing balance of cash and cash equivalents | 2,164,979,668.87 | 1,981,200,941.64 |
Including:cash and cash equivalents with restricted use by the parent company or its subsidiaries | 11,461,574.15 | 10,098,029.66 |
Other notes:
□Applicable √Not applicable
80. Notes to items in statement of changes in owners’ equity
Names of “others” items whose closing balances in the previous year are adjusted and theamounts of adjustments:
□Applicable √Not applicable
81. Assets with restricted title or right of use
√Applicable □Not applicable
Unit: RMB
Item | Closing book value | Reasons for restriction |
Cash and cash equivalents | 11,461,574.15 | [Note 2] |
Inventory | 8,925,585.72 | [Note 3] |
Long-term equity investment | 102,918,559.00 | [Note 4] |
Other non-current financial assets | 621,447,424.37 | [Note 4] |
Other current assets | 420,922,188.51 | [Note 5] |
Total | 1,165,675,331.75 | / |
Other notes:
Note 2. As of June 30, 2023, bank deposits with a book value of RMB 61.05 (December 31,2022: RMB 60.97) were restricted for ownership or use rights due to being as security depositsfor obtaining commercial housing mortgage loan. As of June 30, 2023, bank deposits with a bookvalue of RMB 371288.89 (December 31, 2022: RMB 0.00) were used as funds for engineeringsupervision accounts, with restricted ownership or use rights. As of June 30, 2023, bank depositswith a book value of RMB 7,220,000.00 (December 31, 2022: RMB 7,220,000.00) were used asperformance bonds for civil air defense projects under construction with restricted ownership oruse rights. As of June 30, 2023, bank deposits with a book value of RMB 3,870,224.21(December 31, 2022: RMB 2,877,968.69) were used as fast payment business risk deposits withrestricted ownership or use rights.Note 3. As of June 30, 2023, the inventory with a book value of RMB 8,925,585.72(December 31, 2022: RMB 0.00) was judicially seized by the court due to litigation.Note 4: As of June 30, 2023, long-term equity investments with a book value of RMB102,918,559.00 (December 31, 2022: RMB 102,918,559.00) and other non-current assets ofRMB 621,447,424.37 (December 31, 2022: RMB 621,447,424.37) were frozen by ShanghaiMunicipal Public Security Bureau. See Note XIV.1 Important Commitments for details.
Note 5: As of June 30, 2023, the payment business reserve fund with a book value of RMB420,922,188.51 (December 31, 2022: RMB 367,484,914.87) was established by the Companyin accordance with the "Administrative Measures for Payment Services of Non-financialInstitutions" and "Measures for the Custody of Customer Reserve Funds of Payment Institutions"Bank special deposit account. The scope of funds stored and received by the Company throughthe customer reserve account includes: funds received from bank card acquiring business,third-party payment convenience service business, credit card repayment business, creditpayment settlement business, and other part of the Company's business. See Note VII.13. OtherCurrent Assets for details.
82. Foreign currency monetary items
(1). Foreign currency monetary items
√Applicable □Not applicable
Item | Closing balance in foreign currency | Exchange rate | Closing balance after conversation in RMB |
Cash and cash equivalents | - | - | |
In which: USD | 6,326,010.80 | 7.2258 | 45,710,488.83 |
EURO | 144,750.99 | 7.9549 | 1,151,479.62 |
Rwandan Franc | 2,123,896.00 | 0.0062 | 13,229.75 |
Dirham | 37,176.25 | 1.9741 | 73,389.64 |
Koruna | 6,313,352.46 | 0.3328 | 2,100,949.23 |
Accounts receivable | - | - | |
In which: USD | 1,588,862.49 | 7.2258 | 11,480,802.58 |
EURO | 5,895.28 | 7.9549 | 46,896.36 |
Koruna | 14,659,511.75 | 0.3328 | 4,878,373.29 |
Other receivables | - | - | |
In which: USD | 229,798.71 | 7.2258 | 1,660,479.51 |
EURO | 22,338.09 | 7.9549 | 177,697.29 |
Koruna | 17,056,711.56 | 0.3328 | 5,676,110.34 |
Accounts payable | |||
In which: USD | 6,545,207.15 | 7.2258 | 47,294,357.81 |
Koruna | 3,428,276.74 | 0.3328 | 1,140,930.50 |
Other payables | |||
In which: USD | 968,501.24 | 7.2258 | 6,998,196.26 |
EURO | 62,893.72 | 7.9549 | 500,313.25 |
Rwandan Franc | 1,403,178.00 | 0.0062 | 8,740.40 |
Koruna | 130,407,209.29 | 0.3328 | 43,396,741.86 |
Other notes:
Nil
(2). Description of overseas operations, for important overseas operations, also
includes the disclosure of principal overseas place of business, bookkeepingcurrency and the basis for selection, and the reason for the change in bookkeepingcurrency.
□Applicable √Not applicable
83. Hedging
□Applicable √Not applicable
84. Government grants
(1). Overview of government grants
√Applicable □Not applicable
Unit: RMB
Type | Amount | Presentation | Amount recognized in Profits and losses for the current period |
Subsidy for Ocean (Bay Area) Economic Development Fund | 7,800,000.00 | Other income | 7,800,000.00 |
Additional deduction of input tax | 4,318,534.11 | Other income | 4,318,534.11 |
Interest subsidy for the international exhibition center construction fund | 577,403.52 | Other income | 577,403.52 |
Grant for the construction and operation of the credit data center | 500,000.00 | Other income | 500,000.00 |
Special funds for supporting scientific and technological development | 400,000.00 | Other income | 400,000.00 |
Special fund award for the development of the exhibition industry in 2023 | 391,800.00 | Other income | 391,800.00 |
Other | 363,670.95 | Other income | 363,670.95 |
Total | 14,351,408.58 | 14,351,408.58 |
(2). Refund of government grants
□Applicable √Not applicable
Other statementsNil
85. Other
□Applicable √Not applicable
VIII. Changes in consolidation scope
1. Mergers of enterprises not under common control
□Applicable √Not applicable
2. Mergers of the enterprises under common control
□Applicable √Not applicable
3. Reverse acquisition
□Applicable √Not applicable
4. Disposal of subsidiaries
Has the Group lost control upon a single disposal of investment in a subsidiary?
√Applicable□Not applicable
Unit: RMB
Name of subsidiary | Consideration of the equity disposal | Percentage of equity disposal (%) | Form of equity disposal | Time of loss of control | Basis for determining the time of loss of control | Difference between the consideration of the disposal and the share in the subsidiary’s net assets in the consolidated financial statement corresponding to the investment disposed | Remaining shareholding ratio on the date of loss of control (%) | Book value of remaining shareholding on the date of loss of control | Fair value of remaining shareholding on the date of loss of control | Gains or losses from the remaining shareholding re-calculated by fair value | Determination of the fair value of remaining shareholding on the date of loss of control and main assumptions therefor | Amount of other comprehensive income relating to the original equity investment in the subsidiary that is recognized in investment gains or losses |
Yiwu Huanqiu Yida Logistics Co., Ltd. | 24,120,000.00 | 60 | Publicly listed for transfer | February 21, 2023 | The earliest date when the transfer of control is effectuated | 11,475,509.21 | - | - | - | - | Not applicable | - |
Other notes:
√Applicable □Not applicable
On December 19, 2022, the wholly-owned subsidiary of the Company, Yiwu China Commodities City Logistics and Warehousing Co., Ltd.(hereinafter referred to as "Logistics and Warehousing Company"), publicly listed and transferred its 60% equity of Yiwu Huanqiu Yida Logistics Co., Ltd.on the Yiwu Property Rights Exchange.On February 2, 2023, Logistics and Warehousing Company received a public listing transfer transaction notice from the Yiwu Property RightsExchange, and on February 3, received an equity transfer payment of RMB 23.9244 million after deducting the transaction service fee of RMB 195,600.
On February 21, 2023, Logistics and Warehousing Company signed an equity transfer agreement with Zhejiang Zhijie Yuangang InternationalSupply Chain Technology Co., Ltd., agreeing that Logistics and Warehousing Company would transfer its held registered capital of RMB 30 million(60% of the total registered capital) of Yiwu Huanqiu Yida Logistics Co., Ltd. to Zhejiang Zhijie Yuangang International Supply Chain Technology Co.,Ltd, and completed the amendment of the articles of association and industrial and commercial registration of Yiwu Huanqiu Yida Logistics Co., Ltd. onthe same day. After the disposal, the Company's shareholding in Yiwu Huanqiu Yida Logistics Co., Ltd. decreased from 60% to 0%. Therefore, startingfrom February 21, 2023, the Group will no longer include Yiwu Huanqiu Yida Logistics Co., Ltd. in the scope of consolidation.
5. Changes in consolidation scope for other reasons
Changes in the consolidation scope for other reasons (e.g., new establishment of subsidiaries, liquidation of subsidiaries, etc.) and the relatedinformation:
□Applicable √Not applicable
6. Other
□Applicable √Not applicable
IX. Equity in Other Entity
1. Equity in subsidiaries
(1). Composition of the enterprise group
√Applicable □Not applicable
Subsidiary Name | Main place of business | Place of registration | Business | Shareholding ratio (%) | Acquisition Method | |
Direct | Indirect | |||||
Yiwu China Commodities City Import and Export Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Wholesale | 100 | Establishment | |
Yiwu China Commodities City Supply Chain Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Wholesale | 100 | Establishment | |
Yiwu Comprehensive Bonded Zone Operation and Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 100 | Establishment | |
Yiwu China Commodities City Overseas Investment and Development Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 100 | Establishment | |
Yiwu China Commodities City Tourism Development Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 100 | Establishment | |
Yiwu China Commodities City Assets Operation and Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 100 | Establishment | |
Zhejiang Yindu Hotel Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 100 | Establishment | |
Yiwu China Commodities City Research Institute Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 100 | Establishment | |
Yiwu Shangbo Shuzhi Enterprise Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 100 | Establishment | |
Yiwu China Commodities City Big Data Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Software and Information Technology Service Industry | 100 | Establishment | |
Yiwu Commodities City Gonglian Property Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 100 | Establishment | |
Yiwu Shangbo Yuncang Enterprise Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 100 | Establishment | |
Yiwu China Commodities City Information Technology Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | IT | 100 | Establishment | |
Yiwu China Commodities City Financial Holdings Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Financial Industry | 100 | Establishment | |
Yiwu China Commodities City Logistics and Warehousing Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Multimodal transport and transportation agency | 100 | Establishment | |
Yiwu China Commodities | Yiwu, | Yiwu, | Education | 100 | Establishment |
City Commerce and Trade Service Training Center Co., Ltd. | Zhejiang | Zhejiang | ||||
Yiwu China Commodities City Exhibition Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Business service | 98 | 2 | Establishment |
Zhejiang Huajie Investment and Development Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Commercial services | 96.4 | Incorporation+acquisition | |
European Huajie Investment Development Co., Ltd. | Prague, Czech Republic | Prague, Czech Republic | Service | 96.4 | Incorporation+acquisition | |
Zhejiang China Commodities City Group Commercial Factoring Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 60 | 40 | Establishment |
Zhejiang Yiwugou E-commerce Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | IT | 51 | Establishment | |
Yiwu Xinlian Technology Service Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 51 | Establishment | |
Yiwu Xingchen Enterprise Management Co., Ltd | Yiwu, Zhejiang | Yiwu, Zhejiang | IT | 100 | Establishment | |
Haicheng Yiwu China Commodities City Investment Development Co., Ltd. | Haicheng, Liaoning | Haicheng, Liaoning | Real estate | 95 | Establishment | |
Yiwu China Commodities City Advertising Co., Ld. | Yiwu, Zhejiang | Yiwu, Zhejiang | Advertising | 100 | Establishment | |
Yiwu International Trade Comprehensive Service Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Wholesale | 60 | Establishment | |
Yiwu China Commodities City Credit Investigation Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 85 | Establishment | |
Yiwu Aiximao Supply Chain Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 100 | Establishment | |
Yiwu China Commodities City Internet Financial Information Service Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Financial Industry | 100 | Incorporation+acquisition | |
Yiwu China Commodities City RMB and Foreign Currency Exchange Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Financial Industry | 100 | Establishment | |
Hangzhou Shangbo Nanxing Property Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Real estate | 100 | Establishment | |
Ningxia Yiwu China Commodities City Supply Chain Management Co., Ltd. | Shizuishan, Ningxia | Shizuishan, Ningxia | Service | 100 | Establishment | |
Yiwu China Commodities City (Hong Kong) International Trade Co., Ltd. | Hong Kong, China | Hong Kong, China | Wholesale | 100 | Establishment | |
Hong Kong Better Silk Road Co., Ltd. | Hong Kong, | Hong Kong, | Financial Services | 100 | Establishment |
China | China | Industry | ||||
Yiwu China Commodities City (Germany) Co., Ltd. | Frankfurt, Germany | Frankfurt, Germany | Service | 100 | Establishment | |
BETTER SILK ROAD FZE | Dubai, UAE | Dubai, UAE | Financial Services Industry | 100 | Establishment | |
BETTER SILK ROAD RWANDA Ltd | Kigali, Rwanda | Kigali, Rwanda | Service | 100 | Establishment | |
Huafrica (Kenya) Investment Development Co., Limited | Nairobi, Kenya | Nairobi, Kenya | Service | 100 | Establishment | |
Yiwu Zheqing Trading Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Wholesale | 100 | Establishment | |
Yiwu China Commodities City (Spain) Co., Ltd. | Madrid, Spain | Madrid, Spain | Service | 100 | Establishment | |
Zhejiang Xunchi Digital Technology Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | IT | 100 | Acquisition | |
Kuaijietong Payment Service Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | IT | 100 | Acquisition |
Explanation for the difference between the shareholding ratio and voting right ratio in asubsidiary:
Nil
Basis for holding half or less voting rights in but still controlling an investee, and holding morethan half of the voting rights in but not controlling an investee:
Nil
Basis for controlling important structured entities included in the consolidation scope:
Nil
Basis for determining whether a company is an agent or a principal:
Nil
Other notes:
Nil
(2). Important non-wholly-owned subsidiaries
√Applicable □Not applicable
Unit: RMB
Name of subsidiary | Shareholding ratio of minority shareholders (%) | Profits or losses attributable to minority shareholders in the current period | Dividends declared to be distributed to minority shareholders for the current period | Closing balance of minority interest |
Zhejiang Yiwugou E-commerce Co., Ltd. | 49% | 5,172,636.33 | - | - |
Haicheng Company | 5% | -2,781,021.76 | - | - |
Explanation for the difference between the shareholding ratio and voting right ratio of minority shareholders in a subsidiary:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
(3). Major financial information of important non-wholly-owned subsidiaries
√Applicable □Not applicable
Unit: RMB10,000
Name of subsidiary | Closing balance | Opening balance | ||||||||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Zhejiang Yiwugou E-commerce Co., Ltd. | 9,100.87 | 5,636.59 | 14,737.46 | 3,324.05 | 4.49 | 3,328.54 | 9,108.24 | 5,688.44 | 14,796.68 | 4,438.90 | 4.49 | 4,443.39 |
Haicheng Company | 127,374.51 | 72,712.50 | 200,087.01 | 300,488.79 | - | 300,488.79 | 112,283.93 | 89,899.98 | 202,183.91 | 297,023.65 | - | 297,023.65 |
Name of subsidiary | Amount in the current period | Amount in the previous period | ||||||
Operating revenue | Net profits | Total comprehensive income | Cash flow from operating activities | Operating revenue | Net profits | Total comprehensive income | Cash flow from operating activities |
Zhejiang Yiwugou E-commerce Co., Ltd. | 3,171.00 | 1,055.64 | 1,055.64 | 751.05 | 2,459.03 | 668.17 | 668.17 | 446.46 |
Haicheng Company | 4,257.07 | -5,562.04 | -5,562.04 | -1,874.50 | 18,481.88 | -3,459.65 | -3,459.65 | -1,159.89 |
Other notes:
Nil
(4). Major restrictions on the use of the enterprise group’s assets and repayment of theenterprise group’s debts
□Applicable √Not applicable
(5). Financial support or other support provided to structured entities included in theconsolidated financial statements:
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
2. Transactions in which the Group’s share of owners’ equity in a subsidiary changesand the Group still controls the subsidiary
□Applicable √Not applicable
3. Equity in joint ventures or associates
√Applicable □Not applicable
(1). Important joint ventures or associates
√Applicable □Not applicable
Unit: RMB
Name of joint venture or associate | Main place of business | Place of registration | Business | Shareholding ratio (%) | Accounting treatment method of investment in the joint venture or associate | |
Direct | Indirect | |||||
Joint venture | ||||||
Yiwu Shanglv | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 49 | Equity method | |
Yiwu Huishang Redbud Capital Management Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 20 | Equity method | |
Yiwu Rongshang Property Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 49 | Equity method | |
Yiwu Chuangcheng Property Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 24 | Equity method | |
Yiwu Guoshen Shangbo Property Co., Ltd. | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 49 | Equity method | |
Associate | ||||||
Yiwu Huishang Redbud Equity Investment Co., Ltd. (Note 6) | Yiwu, Zhejiang | Yiwu, Zhejiang | Commercial services | 10.42 | Equity method | |
Chouzhou Financial Lease | Hangzhou, Zhejiang | Yiwu, Zhejiang | Service | 26 | Equity method | |
Yiwu Huishang Redbud Phase II Investment Partnership (limited partnership) [Note 7] | Yiwu, Zhejiang | Yiwu, Zhejiang | Lease and business service | 10.41 | Equity method | |
Yiwu Hongyi Equity Investment Fund Partnership | Yiwu, Zhejiang | Yiwu, Zhejiang | Service | 49.98 | Equity method |
Pujiang Lvgu Property Co., Ltd. | Pujiang, Zhejiang | Pujiang, Zhejiang | Real estate | 49 | Equity method | |
CCCP | Yiwu, Zhejiang | Yiwu, Zhejiang | Real estate | 49 | Equity method | |
Zhijie Yuangang | Yiwu, Zhejiang | Yiwu, Zhejiang | Technology promotion and application service industry | 27 | Equity method |
Explanation for the difference between the shareholding ratio and voting right ratio in a jointventure or associate:
Nil
Bases for holding less than 20% of the voting rights but having significant influence, or holding20% or more of the voting rights but not having significant influence:
Note 6: The Company held 10.42% (2022: 10.42%) of equity of Yiwu Huishang RedbudEquity Investment Co., Ltd. (hereinafter referred to as "Redbud Equity Investment"), butregarded it as an associated company of the Company. According to Redbud Investment’sarticles of association, it is engaged in investing and its important financial and operatingdecision-making activities are to pick and manage investment projects, which have been fullyentrusted to the Company’s joint venture Yiwu Huishang Redbud Capital Management Co., Ltd.(“Redbud Capital”). Redbud Capital picks and manages investment projects via its investmentdecision-making committee. Except for special investment matters, which are subject to theresolution of Redbud Investment’s board of directors, other important financial and operatingdecision-making activities are conducted by Redbud Capital on the behalf of Redbud Investment.Therefore, the Company was able to exercise significant influence on Redbud Investment inwhich the Company held 10.42% of total equity.Note 7: The Company held 10.41% (2022: 10.41% ) equity of Yiwu Huishang RedbudPhase II Investment Partnership (Limited Partnership) (“Redbud Phase II”), but regarded it as anassociated company of the Company. According to Redbud Phase II’s articles of association, itis engaged in investing and its important financial and operating decision-making activities are topick and manage investment projects, which have been fully entrusted to the Company’s jointventure Redbud Capital. Redbud Capital picks and manages investment projects via itsinvestment decision-making committee. Except for special investment matters, which aresubject to the resolution of Redbud Phase II’s board of directors, other important financial andoperating decision-making activities are conducted by Redbud Capital on the behalf of RedbudPhase II. Therefore, the Company could exert significant influence on Redbud Phase II of whichit held 10.41% equity.
(2). Main financial information of important joint ventures
√Applicable □Not applicable
Unit: RMB10,000
Closing balance/amount in the current period | Opening balance/amount in the previous period | |||||||
Yiwu Shanglv | Yiwu Rongshang Property | Yiwu Chuangcheng Property | Guoshen Shangbo | Yiwu Shanglv | Yiwu Rongshang Property | Yiwu Chuangcheng Property | Guoshen Shangbo | |
Current assets | 8,095.17 | 13,971.63 | 69,532.09 | 488,243.58 | 6,039.08 | 13,547.12 | 47,538.36 | 1,251,563.25 |
In which: cash and cash equivalents | 6,756.08 | 49.28 | 37.58 | 10,816.27 | 4,316.44 | 198.23 | 540.41 | 88,677.29 |
Non-current assets | 127,692.22 | - | 5,321.03 | 2,967.57 | 129,575.34 | - | 2.12 | 2,979.93 |
Total assets | 135,787.39 | 13,971.63 | 74,853.12 | 491,211.15 | 135,614.42 | 13,547.12 | 47,540.48 | 1,254,543.18 |
Current liabilities | 35,803.90 | 0.06 | 61,885.30 | 297,753.81 | 39,891.24 | 148.98 | 34,353.43 | 1,237,514.91 |
Non-current liabilities | 11,658.11 | - | - | 1,571.12 | 11,566.36 | - | 1,333.17 | 1,571.12 |
Total liabilities | 47,462.01 | 0.06 | 61,885.30 | 299,324.93 | 51,457.60 | 148.98 | 35,686.60 | 1,239,086.03 |
Shareholders’ equity attributable to parent company | 88,325.38 | 13,971.57 | 12,967.82 | 191,886.22 | 84,156.82 | 13,398.14 | 11,853.88 | 15,457.15 |
Share of net assets calculated based on shareholding ratio | 43,279.44 | 6,846.07 | 3,112.28 | 94,024.25 | 41,236.84 | 6,565.09 | 2,844.93 | 7,574.00 |
Adjustments | -1,515.97 | - | - | -490.00 | -1,539.60 | - | - | 3,864.29 |
--Unrealized profits of internal transactions | -1,515.97 | - | - | -490.00 | -1,539.60 | - | - | 3,864.29 |
Book value of equity investment in joint ventures | 41,763.47 | 6,846.07 | 3,112.28 | 93,534.25 | 39,697.24 | 6,565.09 | 2,844.93 | 7,574.01 |
Operating revenue | 12,250.84 | - | - | 973,498.72 | 8,396.80 | 427,669.78 | 275,551.74 | 7,869.67 |
Financial expenses | 529.18 | -0.08 | 0.23 | -90.79 | 854.71 | -119.92 | -28.31 | -823.72 |
Net profits | 4,168.51 | 0.08 | -2,057.65 | 175,429.06 | 1,293.30 | 96,577.78 | 44,962.93 | 2,862.34 |
Total comprehensive income | 4,168.51 | 0.08 | -2,057.65 | 175,429.06 | 1,293.30 | 96,577.78 | 44,962.93 | 2,862.34 |
Dividends received from joint | - | - | - | - | - | 58,086.56 | 6,000.00 | - |
ventures this year
Other statementsNil
(3). Main financial information of important associates
√Applicable □Not applicable
Unit: RMB10,000
Closing balance/amount in the current period | Opening balance/amount in the previous period | |||||||||
Chouzhou Financial Lease | Hongyi Fund | CCCP | Pujiang Lvgu | Zhijie Yuangang | Chouzhou Financial Lease | Hongyi Fund | CCCP | Pujiang Lvgu | Zhijie Yuangang | |
Current assets | 86,876.29 | 23,132.21 | 1,803,818.31 | 126,952.96 | 43,916.25 | 77,387.24 | 25,476.19 | 1,752,170.30 | 121,318.40 | 45,894.85 |
Non-current assets | 1,837,325.27 | 158,585.54 | 53,250.57 | 5,374.98 | 3,240.40 | 1,605,298.30 | 163,831.11 | 43,109.75 | 777.45 | 137.68 |
Total assets | 1,924,201.56 | 181,717.75 | 1,857,068.88 | 132,327.94 | 47,156.65 | 1,682,685.54 | 189,307.30 | 1,795,280.05 | 122,095.85 | 46,032.53 |
Current liabilities | 1,293,820.80 | 25.46 | 911,292.70 | 53,837.46 | 4,318.43 | 1,132,279.05 | 89.88 | 1,029,256.12 | 45,646.63 | 2,363.50 |
Non-current liabilities | 422,157.95 | - | 299,965.82 | 3,873.03 | - | 362,250.51 | - | 147,172.22 | - | - |
Total liabilities | 1,715,978.75 | 25.46 | 1,211,258.52 | 57,710.49 | 4,318.43 | 1,494,529.56 | 89.88 | 1,176,428.34 | 45,646.63 | 2,363.50 |
Shareholders’ equity attributable to parent company | 208,222.81 | 181,692.29 | 645,810.36 | 74,617.45 | 42,838.22 | 188,155.98 | 189,217.42 | 618,851.71 | 76,449.22 | 43,669.03 |
Share of net assets calculated based shareholding ratio | 54,137.93 | 90,809.81 | 316,447.08 | 36,562.55 | 11,566.32 | 48,920.55 | 94,570.87 | 303,237.34 | 37,460.12 | 11,790.64 |
Adjustments | - | -14.07 | -5,538.28 | 423.84 | 2,273.22 | - | -6.66 | -4,689.27 | 423.84 | 2,765.70 |
--Unrealized profits of internal transactions | - | -14.07 | -5,538.28 | 423.84 | 2,273.22 | - | -6.66 | -4,689.27 | 423.84 | 2,765.70 |
Book value of equity investment in joint ventures | 54,137.93 | 90,795.74 | 310,908.80 | 36,986.39 | 13,839.54 | 48,920.55 | 94,564.21 | 298,548.07 | 37,883.96 | 14,556.34 |
Operating revenue | 34,574.83 | - | 185,257.95 | 1.38 | 9,402.91 | 28,545.90 | 743.86 | 171,172.95 | 2,172.40 | - |
Net profits | 20,066.83 | 720.44 | 26,262.14 | -1,831.78 | -2,654.82 | 13,718.90 | 8,934.93 | 25,513.10 | 2,013.56 | - |
Total comprehensive | 20,066.83 | 720.44 | 26,262.14 | -1,831.78 | -2,654.82 | 13,718.90 | 8,919.21 | 25,513.10 | 2,013.56 | - |
income | ||||||||||
Dividend on associates received in the current year | - | - | - | -- | - | - | - | 8,820.00 | - |
Other statementsNil
(4). Summary financial information of unimportant joint ventures and associates
√Applicable □Not applicable
Unit: RMB
Closing balance/amount in the current period | Opening balance/amount in the previous period | |
Joint ventures: | ||
Total book value of investments | 31,253,836.82 | 31,984,093.31 |
Total amounts of the following items calculated based on shareholding ratio | ||
--Net profits | -730,256.49 | 333,121.82 |
--Other comprehensive income | - | - |
--Total comprehensive income | -730,256.49 | 333,121.82 |
Associates: | ||
Total book value of investments | 452,362,311.63 | 489,944,751.13 |
Total amounts of the following items calculated based on shareholding ratio | ||
--Net profits | -39,298,606.17 | -7,520,626.68 |
--Other comprehensive income | - | - |
--Total comprehensive income | -39,298,606.17 | -7,520,626.68 |
Other statementsNil
(5). Restrictions on the ability of joint ventures or associates to transfer money to theCompany
□Applicable √Not applicable
(6). Excess losses of joint ventures or associates
□Applicable √Not applicable
(7). Unrecognized commitments relating to investment in joint ventures
□Applicable √Not applicable
(8). Contingent liabilities relating to investment in joint ventures or associates
□Applicable √Not applicable
4. Important joint operations
□Applicable √Not applicable
5. Equity in structured entities not included in the consolidated financial statementsNotes on structured entities not included in the consolidated financial statements:
□Applicable √Not applicable
6. Other
□Applicable √Not applicable
X. Risks associated with financial instruments
√Applicable □Not applicable
1. Categorization of financial instruments
The book values of financial instruments on the balance sheet date are as follows:
June 30, 2023Financial assets
Requirements for financial assets that are measured at fair value and whose changes are recorded in Profits and losses for the period | Measured at amortized cost | Measured at fair value and whose changes are included in other comprehensive income designation | Total | ||||
Cash and cash equivalents | - | 2,176,441,243.02 | - | 2,176,441,243.02 | |||
Held-for-trading financial assets | 51,610,980.66 | - | - | 51,610,980.66 | |||
Accounts receivable | - | 150,768,192.08 | - | 150,768,192.08 | |||
Other receivables | - | 87,930,115.50 | - | 87,930,115.50 | |||
Other current assets | - | 422,659,667.93 | - | 422,659,667.93 | |||
Debt investments | - | 48,066,000.00 | - | 48,066,000.00 | |||
Long-term receivables | - | 288,037,945.91 | - | 288,037,945.91 | |||
Other non-current assets | - | 138,253,316.00 | - | 138,253,316.00 | |||
Other equity instruments investment | - | - | 579,474,299.94 | 579,474,299.94 | |||
Other non-current financial assets | 1,473,122,562.94 | - | - | 1,473,122,562.94 | |||
1,524,733,543.60 | 3,312,156,480.44 | 579,474,299.94 | 5,416,364,323.98 |
Financial liabilities | Other financial liabilities | ||
Short-term borrowings | 1,809,722,500.02 | ||
Accounts payable | 475,316,014.07 | ||
Other payables | 1,615,071,971.63 | ||
Non-current liabilities due within one year | 134,947,210.88 | ||
Other current liabilities | 3,503,035,185.79 | ||
Long-term borrowings | 648,185,725.67 | ||
Bonds payable | 3,497,930,395.94 | ||
Lease liabilities | 201,494,376.11 | ||
11,885,703,380.11 |
2022Financial assets
Requirements for financial assets that are measured at fair value and whose changes are recorded in Profits and losses for the period | Measured at amortized cost | Measured at fair value and whose changes are included in other comprehensive income designation | Total | ||||
Cash and cash equivalents | - | 1,991,298,971.30 | - | 1,991,298,971.30 | |||
Held-for-trading financial assets | 62,331,000.66 | - | - | 62,331,000.66 | |||
Accounts receivable | - | 210,750,725.36 | - | 210,750,725.36 |
Other receivables | - | 419,398,092.62 | - | 419,398,092.62 | |||
Other current assets | - | 369,222,394.29 | - | 369,222,394.29 | |||
Debt investments | - | 48,079,561.64 | - | 48,079,561.64 | |||
Long-term receivables | - | 278,299,600.73 | - | 278,299,600.73 | |||
Other non-current assets | - | 138,253,316.00 | - | 138,253,316.00 | |||
Other equity instruments investment | - | - | 499,200,803.85 | 499,200,803.85 | |||
Other non-current financial assets | 1,500,307,562.13 | - | - | 1,500,307,562.13 | |||
1,562,638,562.79 | 3,455,302,661.94 | 499,200,803.85 | 5,517,142,028.58 |
Financial liabilities | Other financial liabilities | ||
Short-term borrowings | 1,059,287,361.11 | ||
Accounts payable | 1,191,314,404.15 | ||
Other payables | 1,325,596,105.43 | ||
Non-current liabilities due within one year | 86,852,293.01 | ||
Other current liabilities | 3,473,907,027.00 | ||
Long-term borrowings | 404,500,000.00 | ||
Bonds payable | 3,497,416,819.75 | ||
Lease liabilities | 206,623,735.97 | ||
11,245,497,746.42 |
2. Financial instrument risk
The risks associated with financial instruments faced by the Group in regular activitiesmainly include credit risk, liquidity risk and market risk. The main financial instruments ofthe Group include cash, borrowings from banks, bonds payable and commercial paperspayable. Those instruments are used mainly to finance the operation of the Group. TheGroup has lots of other financial assets and liabilities directly arising from operation,such as accounts receivable, other receivables, accounts payable and other payables.The risks associated with those financial instruments and the risk management strategytaken by the Group to reduce those risks are stated as follows.
Credit risk
The Group only deals with the recognized third parties with good reputation. Accordingto its policy, the Group needs to carry out credit review on all clients who require to dealwith the Group on credit. In addition, the Group keeps monitoring the balance ofaccounts receivable to ensure it will not face any material bad debt risk. For thetransactions settled other than in the functional currency of related business entities,unless with specific approval of the Group’s credit control department, the Group will notprovide the conditions for dealing on credit. The Group also faces credit risks due to theprovision of financial guarantees. See Note XIV. 2 for details.
As the counterparties to the transactions of cash are banks with good reputation andhigh credit ratings, the credit risk of those financial instruments is relatively low.
The Group’s other financial assets include cash, debt investment, other receivables andcertain derivatives, the credit risk of which is sourced from default by the counterparties,and the maximum risk exposure is equal to the book value of those instruments.
As the clients from which the Group’s accounts receivable are receivable are scatteredin different sectors and industries, there’s no material credit risk concentrated within the
Group. The Group does not have any collaterals or other credit enhancements for thebalance of its accounts receivable.
See Notes VII. 5 and 8 for quantitative data on the Group's credit risk exposure inrelation to receivables and other receivables.
Criteria for significant increase in credit riskThe Group evaluates, on each balance sheet date, whether the credit risk of relatedfinancial instruments has increased significantly since the initial recognition thereof. Indetermining whether the credit risk of a financial instrument has increased significantlysince the initial recognition thereof, the Group takes into account the reasonable andwell-grounded information that is accessible without unnecessary extra costs or efforts,including the qualitative and quantitative analyses based on the Group’s historical data,external credit risk rating and forward-looking information. The Group compares the riskof financial instruments defaulting on the balance sheet date and the risk of themdefaulting on the date of initial recognition based on an individual financial instrument ora group of financial instruments with similar credit risk characteristics to determine thechanges in anticipated default risk of the financial instrument(s) within the durationthereof.
If a financial instrument meets one or more of the following quantitative or qualitativecriteria, the Group will determine that its credit risk has increased significantly:
(1) The main quantitative criterion is that its probability of default within the
remaining duration on the reporting date rises by a certain margin from that atits initial recognition;
(2) The main qualitative criterion is that the debtor has materially adverse changes
in business or financial conditions or is on the warning list of clients.
Definition of the assets whose credit has been impairedIn order to determine whether the credit of an asset has been impaired, the Groupadopts the criteria consistent with its internal credit risk management goal for relatedfinancial instruments and also takes into account the quantitative and qualitativeindicators. The Group mainly considers the following factors while assessing whetherthe credit of a debtor has been impaired:
(1) the issuer or debtor suffers material financial difficulty;
(2) the debtor is in breach of contract, such as breach in interest payment, principal
repayment or overdue payment;
(3) the creditor makes a compromise to the debtor which it would in no case make,
based on the economic or contract considerations in connection with thedebtor’s financial difficulty;
(4) the debtor is very likely to go bankrupt or enter into other financial
reorganizations;
(5) the financial difficulty of the issuer or debtor results in the disappearance of the
active market of the financial asset;
(6) a financial asset is purchased or derived at a large discount and the discount
points to the fact of credit loss having been incurred.The credit impairment of financial assets may be caused by multiple events together andmay not necessarily be caused by an individually identifiable event.
The Group makes impairment provisions for the expected credit loss of accountsreceivable and other receivables within the coming 12 months with the simplified methodand general method respectively. Please refer to Notes VII. 5 and 8 for details.
Liquidity risk
The Group manages the cash shortage risk with the cyclical liquidity plan tool. The toolconsiders not only the maturity dates of financial instruments but also the estimated cashflows arising from the operation of the Group.
The Group aims to make use of such financing instruments as bank loans, commercialpapers, MTNs, corporate bonds and long-term borrowings to maintain the balancebetween the continuity and flexibility of financing. As of June 30, 2023, 59.69%(December 31, 2022: 59.75) of the Group's debts would be due within less than oneyear.The following table summarizes the analysis on the due day of financial liabilities based onnon-discounted contractual cash flows:
June 30, 2023
Item | At call | 1-3 months | 3 months-1 year (1 year inclusive) | 1 year - 5 years (5 years inclusive) | Above 5 years | Total |
Short-term borrowings | 1,610,000.00 | 14,973,000.00 | 1,824,277,500.00 | - | - | 1,840,860,500.00 |
Accounts payable | 401,294,903.00 | 74,021,111.07 | - | - | - | 475,316,014.07 |
Other payables | 1,157,644,420.36 | - | - | 457,427,551.27 | - | 1,615,071,971.63 |
Other current liabilities | 492,316,702.92 | 1,014,054,794.52 | 2,032,357,808.22 | - | - | 3,538,729,305.66 |
Non-current liabilities due within one year | 89,747,210.88 | 315,270.00 | 45,359,330.00 | - | - | 135,421,810.88 |
Long-term borrowings | - | 4,937,646.87 | 14,600,568.71 | 384,714,522.94 | 397,283,135.34 | 801,535,873.86 |
Bonds payable | - | 11,160,000.00 | 65,750,000.00 | 3,652,150,000.00 | - | 3,729,060,000.00 |
Total | 2,142,613,237.16 | 1,119,461,822.46 | 3,982,345,206.93 | 4,494,292,074.21 | 397,283,135.34 | 12,135,995,476.10 |
2022
Item | At call | 1-3 months | 3 months-1 year (1 year inclusive) | 1 year - 5 years (5 years inclusive) | Above 5 years | Total |
Short-term borrowings | 2,754,166.67 | 304,518,333.33 | 759,490,833.33 | - | - | 1,066,763,333.33 |
Accounts payable | 957,474,259.60 | 233,840,144.55 | - | - | - | 1,191,314,404.15 |
Other payables | 835,667,583.73 | - | - | 489,928,521.70 | - | 1,325,596,105.43 |
Other current liabilities | 401,658,433.30 | 1,009,863,013.70 | 2,028,865,753.42 | - | - | 3,440,387,200.42 |
Non-current liabilities due within one year | 24,998,166.53 | 41,488,904.11 | 20,019,287.68 | - | - | 86,506,358.32 |
Long-term borrowings | 943,458.33 | 1,886,916.67 | 8,491,125.00 | 233,761,125.00 | 257,210,555.56 | 502,293,180.56 |
Bonds payable | - | - | - | 3,486,038,427.42 | - | 3,486,038,427.42 |
Total | 2,223,496,068.16 | 1,591,597,312.36 | 2,816,866,999.43 | 4,209,728,074.12 | 257,210,555.56 | 11,098,899,009.63 |
Market risks
Interest rate riskThe risk of changes in market interest rates faced by the Group is mainly related tothe Group's long-term liabilities at floating interest rates.
The Group manages interest costs by maintaining an appropriate combination offixed-rate debts and variable-rate debts. As of June 30, 2023, the Company hadlong-term borrowings of RMB 648 million among its long-term liabilities, the interestrates of which were adjusted on an annual basis based on the benchmark loan rateon the anniversary dates. Therefore, the management believe that its risk of marketinterest rate change is relatively low.
Foreign exchange rate risk
The Group faces trading exchange rate risks. Such risks are caused by sales orpurchases made by certain business units in currencies other than theirbookkeeping currency. 1.01% of the Group's current sales revenue (2022: 7.94%)was denominated in a currency other than the functional currency of the operatingunit in which the sales occurred, while 98.99% (2022: 92.06%) of the costs weredenominated in the functional currency of the operating unit. Considering theGroup’s short time of inventory and timely collection of accounts receivable, themanagement believe that its foreign exchange rate risk is relatively low.
Price risk of equity instrument investmentsThe price risk of equity instrument investments refers to the risk of the fair value of
equity securities decreasing due to the changes in stock indices and value of
individual securities. As of June 30, 2023, the Group was exposed to the price risk of
equity instrument investments arising from the individual equity instrument
investments classified as the financial instruments that are measured by fair value
and of which the changes in fair value are recognized in income in current period
(Note VII. 2) or recognized in other comprehensive income (Note VII. 18). The listed
equity instruments that were invested and held by the Group were listed on the
Shanghai Stock Exchange (SSE) and the Shenzhen Stock Exchange (SZSE),
respectively, the determination is made through discounting and adjustment using
the trading prices of similar circulating stocks of the same listed company on the
balance sheet date, combined with liquidity.
The market stock indexes of the following stock exchanges at the closing point of thetrading day that is closest to the balance sheet date, and their respective highest andlowest closing points during the year are as follows:
End of June 2023 | Jan.-Jun. 2023 Highest/lowest | End of 2022 | Year 2022 Highest/lowest | |
SZSE-A Share Index | 2,144 | 2,302/2,084 | 2,067 | 2,661/1,804 |
SSE-A Share Index | 3,357 | 3,584/3,267 | 3,238 | 3,827/3,001 |
The following table indicates the sensitivity of the Group’s net Profits and losses andother comprehensive income after tax to the change each 10% of the fair value ofequity instrument investment (based on the book value on the balance sheet date)under the assumption that all other variables remain unchanged.
End of June 2023
Equity instrument investment book value | Net Profits and losses | Other comprehensive income net after tax | Total shareholders' equity | |
Equity instrument investment | increase/(decrease) | increase/(decrease) | increase/(decrease) | |
Fair value increase/decrease by10% | ||||
Shenzhen - Investment in the equity instruments that are measured by fair value and of which the changes in fair value | 579,474,299.94 | - | 43,460,572.50 | 43,460,572.50 |
are recognized in other comprehensive income | ||||
Shanghai - Equity instrument investment at fair value through Profits and losses | 16,431,545.00 | 1,232,365.88 | - | 1,232,365.88 |
2022
Equity instrument investment book value | Net Profits and losses | Other comprehensive income net after tax | Total shareholders' equity | |
Equity instrument investment | increase/(decrease) | increase/(decrease) | increase/(decrease) | |
Fair value increase/decrease by10% | ||||
Shenzhen - Investment in the equity instruments that are measured by fair value and of which the changes in fair value are recognized in other comprehensive income | 499,200,803.85 | 37,440,060.29 | 37,440,060.29 | |
Shanghai - Equity instrument investment at fair value through Profits and losses | 23,651,565.00 | 1,773,867.38 | - | 1,773,867.38 |
3. Capital management
The main objective of the Group in capital management is to ensure the Group’sability to continue operations and maintain a healthy capital ratio to support itsbusiness development and maximize the values for shareholders.The Group manages and adjusts its capital structure based on the changes in theeconomic situation and the risk characteristics of related assets. To maintain or adjustthe capital structure, the Group may adjust the distribution of profits to shareholders,return capital contribution to shareholders or issue new shares. The Group is notsubject to external mandatory capital requirements. There were no changes in capitalmanagement goals, policies, or procedures in January to June 2023, as comparedwith those in 2022.
XI. Disclosure of fair value
1. Closing fair value of the assets and liabilities measured by fair value
√Applicable □Not applicable
Unit: RMB
Item | Closing fair value | |||
Level 1 fair value | Level 2 fair value | Level 3 fair value | Total | |
I. Continuous fair value measurement | ||||
(1) Held-for-trading financial assets | 16,431,545.00 | - | 35,179,435.66 | 51,610,980.66 |
1. Financial assets that are measured at fair value and whose changes are included in the current Profits and losses | 16,431,545.00 | - | 35,179,435.66 | 51,610,980.66 |
(2) Investment in equity instruments | 16,431,545.00 | - | - | 16,431,545.00 |
(4) Bank wealth management products | - | - | 35,179,435.66 | 35,179,435.66 |
(3) Other equity instruments investment | 579,474,299.94 | - | - | 579,474,299.94 |
(vi) Other non-current financial assets | - | 865,796,775.81 | 607,325,787.13 | 1,473,122,562.94 |
Total assets continuously measured by fair value | 595,905,844.94 | 865,796,775.81 | 642,505,222.79 | 2,104,207,843.54 |
2. Basis for determining the market prices of the items continuously and
non-continuously measured by Level 1 fair value
√Applicable □Not applicable
The Group's continuous items measured by Level 1 fair value mainly include listed equityinstruments, whose fair value is determined based on the market quotation on the last tradingday in June 2023.
3. Valuation techniques and qualitative and quantitative information of important
parameters for the items continuously and non-continuously measured by Level 2
fair value
√Applicable □Not applicable
The Group’s level-2 items continuously measured at fair value mainly include unlisted equityinvestments and listed equity instruments with restricted sales conditions. The fair value ofunlisted equity investments is determined based on the information in the financial statements ofthese unlisted companies as of June 30, 2023, combined with comparable information of listedcompanies in the industry, using the comparable company multiplier method. In the listed equityinstruments subject to restricted sales conditions, the valuation model is used to determine thefair value based on the market quotation, and the important observable input value is the liquiditydiscount.
4. Valuation techniques and qualitative and quantitative information of important
parameters for the items continuously and non-continuously measured by Level 3
fair value
√Applicable □Not applicable
The Group’s level-3 items continuously measured at fair value include wealth managementproducts and equity investments in non-listed companies for which the comparable companymultiplier method cannot be used. Wealth management products are determined by thediscounted cash flow valuation model. The Group will also consider the initial transaction price,recent transactions of the same or similar financial instruments, or complete third-partytransactions of comparable financial instruments. Adjustments to the assessment model aremade based on changes in liquidity, liquidity, default risk, and market, economic, orcompany-specific circumstances. The fair value of the equity investments in non-listedcompanies for which the comparable company multiplier method cannot be used are determinedunder the net asset-based method as of June 30, 2023.
5. Adjustment information between the opening book value and closing book value,
and the sensitivity analysis of unobservable parameters for items continuously
measured by Level 3 fair value
□Applicable √Not applicable
6. For items continuously measured by fair value, if there is conversion between
different levels in the current period, the reasons for the conversion and the policy
for determining the time of conversion
□Applicable √Not applicable
7. Changes in valuation techniques in the current period and reasons for changes
□Applicable √Not applicable
8. Fair value of financial assets and financial liabilities not measured by fair value
√Applicable □Not applicable
June 30, 2023
Entries used in the fair value measurement | ||||
Quotation in an active market | Important observable entry | Important non-observable entry | ||
Level 1 | Level 2 | Level 3 | Total | |
Bonds payable (current portion included) | 3,493,989,640.68 | 3,493,989,640.68 |
9. Other
√Applicable □Not applicable
Fair value of financial instrumentsThe table below shows the differences between book value and fair value ofthe Group’s financial instruments other than the financial instruments withvery small differences between book value and fair value and the equityinstruments that did not have an offering price in the active market and whosefair value could not be measured reliably:
Book value | Fair value | ||||
June 30, 2023 | 2022 | June 30, 2023 | 2022 | ||
Financial liabilities bonds payable (current part included) | 3,562,715,847.98 | 3,558,925,011.54 | 3,493,989,640.68 | 3,544,625,864.62 | |
The management have evaluated cash and cash equivalents, accounts receivable,notes payable and accounts payable. Their fair values were equivalent to their bookvalues as their remaining terms were not long. The fair values of long-termreceivables, other non-current assets, long and short-term borrowings and long-termaccounts payable were determined with the discounted future cash flow method,with the market yields of other financial instruments with similar contract terms,credit risks and remaining terms as the discount rates. Their fair values wereequivalent to their book values.The Group's finance department, headed by the General manager of the GroupFinance Center, is responsible for developing policies and procedures for the fairvalue measurement of financial instruments. The General Manager of the GroupFinance Center reports directly to the Group Finance Officer, who reports to theAudit Committee. On each balance sheet date, the financial department analyzesthe changes in the value of financial instruments and determines the main inputvalues applicable to the valuation. The valuation shall be reviewed and approved bythe Group's Financial Director. For the preparation of semi-annual and annualfinancial statements, the valuation process and results are discussed with the auditcommittee twice a year.The fair values of financial assets and financial liabilities refer to the amountsdetermined based on the voluntary exchange of assets or repayment of debts by theparties to arm’s length transactions who are familiar with the transactions rather thanforced sale or liquidation. The following methods and assumptions are used toestimate fair value.The fair value of bonds payable is determined with the discounted future cash flowmethod, with the market yields of other financial instruments with similar contractterms, credit risks and remaining terms as the discount rates, and falls in Level 2.The significant unobservable inputs for measurement of the fair value of bondspayable are the prepayment rate and loss given default.If there are no restrictions on the sale of listed equity instruments, the fair value isdetermined at the quoted market price. In the listed equity instruments subject torestricted sales conditions, the valuation model is used to determine the fair valuebased on the market quotation, and the important observable input value is theliquidity discount. The Group believes that the fair value estimated by valuationtechniques is reasonable and is also the most appropriate value on the balancesheet date.There was no significant conversion of the Group’s and the Company’s financialinstruments measured by fair value between different levels in the current year andin the previous year.
XII. Related parties and related-party transactions
1. Parent company of the Company
√Applicable □Not applicable
Unit: RMB10,000
Name of parent company | Place of registration | Business | Registered capital | Shareholding ratio in the company (%) | Voting right ratio in the company (%) |
Yiwu China Commodities City Holding Limited Liability Company | Yiwu, Zhejiang | Asset management | 100,000 | 55.38 | 55.38 |
Notes on the parent company of the Company
NilThe ultimate controller of the Company is the State-owned Assets Supervision andAdministration Office of the Yiwu Municipal Government.Other notes:
Nil
2. Subsidiaries of the Company
For details of the Company’s subsidiaries, please refer to the Notes
√Applicable □Not applicable
For details, please refer to Note IX. 1. Equity in subsidiaries
3. Joint ventures and associates of the Company
For details of the Company’s important joint ventures or associates, please refer to the Notes
√Applicable □Not applicable
For details, please refer to Note IX. 3. Interests in joint ventures or associated enterprises
Other joint ventures or associates that have related-party transactions with the Company in thecurrent period or had related-party transactions with the Company in the prior year whichresulted in an outstanding amount are as follows
√Applicable □Not applicable
Name of joint venture or associate | Relationship with the Company |
Yiwu Shanglv | Joint venture |
Yiwu Huishang Redbud Capital Management Co., Ltd. | Joint venture |
Yiwu China Commodities City Creative Design and Development Services Co., Ltd. | Joint venture |
Yiwu Guoshen Shangbo Property Co., Ltd. | Joint venture |
Yiwu Rongshang Property Co., Ltd. | Joint venture |
Huishang Micro-finance | Associate |
Zhejiang Yemai Data Technology Co., Ltd. | Associate |
Yiwu Meipinshu Supply Chain Management Co., Ltd. | Associate |
JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATION FZCO | Associate |
Yiwu Digital Port Technology Co., Ltd. | Associate |
CCCP | Associate |
Hangzhou MicroAnts Co., Ltd. | Associate |
Yiwu Huishang Redbud Equity Investment Co., Ltd. | Associate |
Zhijie Yuangang | Associate |
Yiwu Heimahui Enterprise Service Co., Ltd. | Associate |
Zhejiang YXE Supply Chain Management Co., Ltd. | Associate |
Yiwu China Commodities City Trading Co., Ld. | Associate |
Other statements
□Applicable √Not applicable
4. Other related parties
√Applicable □Not applicable
Name of other related party | Relationship with the Company |
SCO | Parent company of controlling |
shareholder of the Company’s largest shareholder | |
MDG | Controlling shareholder of the Company’s largest shareholder |
Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | Branch of Controlling shareholder of the Company’s largest shareholder |
Yiwu Security Service Co., Ltd. | Subsidiary of controlling shareholder of the Company’s largest shareholder |
Yiwu Agriculture Development Co., Ltd. | Subsidiary of controlling shareholder of the Company’s largest shareholder |
Zhejiang Yiwu Rural Economic Development Co., Ltd. | Subsidiary of controlling shareholder of the Company’s largest shareholder |
Yiwu Market Development Service Center Co., Ltd. | Subsidiary of controlling shareholder of the Company’s largest shareholder |
Zhejiang Xingfuhu Sports Development Co., Ltd. | Subsidiary of controlling shareholder of the Company’s largest shareholder |
Yiwu China Commodities City Property Service Co., Ltd. | Subsidiary of the Company’s largest shareholder |
Handing Shangbo | Subsidiary of the Company’s largest shareholder |
Yiwu Shangbo Yungu Enterprise Management Co., Ltd. | Subsidiary of the Company’s largest shareholder |
Yiwu Jinyue Shangbo Property Co., Ltd. | Subsidiary of the Company’s largest shareholder |
Yiwu Hongtu Shangbo Property Co., Ltd. | Subsidiary of the Company’s largest shareholder |
Yiwu Tonghui Shangbo Property Co., Ltd. | Subsidiaries of joint ventures |
Yiwu Gongchen Shangbo Property Co., Ltd. | Subsidiaries of joint ventures |
Yiwu Chengzhen Property Co., Ltd. | Subsidiaries of joint ventures |
Yisha Chengdu International Trade City Co., Ltd. | Minority shareholder of major subsidiaries |
Other statementsNil
5. Related-party transactions
(1). Related-party transactions of purchasing and selling goods and rendering andaccepting servicePurchasing goods/accepting service
√Applicable □Not applicable
Unit: RMB
Related party | Contents of related-party transaction | Amount in the current period | Approved transaction limit (if applicable) | Whether it exceeds the transaction limit (if applicable) | Amount in the previous period |
Yiwu China Commodities City Property Service Co., Ltd. | Property service fee and greening maintenance fee | 98,212,858.68 | Not applicable | Not applicable | 72,002,626.73 |
Yiwu Security Service Co., Ltd. | Security service fee | 10,038,757.30 | Not applicable | Not applicable | 10,543,139.42 |
Yiwu Shangbo Yungu Enterprise Management Co., Ltd. | Construction fee | 4,913,807.45 | Not applicable | Not applicable | - |
Zhejiang Yemai Data Technology Co., Ltd. | Procurement and system development fees | 879,922.62 | Not applicable | Not applicable | - |
Yiwu China Commodities City Creative Design and Development Services Co., Ltd. | Design fee | 384,466.02 | Not applicable | Not applicable | 379,844.66 |
Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | Procurement and meeting affair expenses | 233,917.62 | Not applicable | Not applicable | - |
Hangzhou MicroAnts Co., Ltd. | Information service fee | 86,451.00 | Not applicable | Not applicable | - |
Selling goods/rendering service
√Applicable □Not applicable
Unit: RMB
Related party | Contents of related-party transaction | Amount in the current period | Amount in the previous period |
Yiwu China Commodities City Property Service Co., Ltd. | Product sales and system development | 1,787,078.02 | - |
Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | Product sales and washing fees | 410,332.78 | 438,145.35 |
Yiwu Jinyue Shangbo Real Estate Co., Ltd | Advertising production costs | 97,924.53 | - |
Yiwu Security Service Co., Ltd. | Meal expenses | 57,390.00 | - |
Zhejiang YXE Supply Chain Management Co., Ltd. | Payment for goods | 36,196.94 | - |
Yiwu Shangbo Yungu Enterprise Management Co., Ltd. | Advertising production costs | 16,677.36 | - |
Yiwu Hongtu Shangbo Real Estate Co., Ltd | Advertising production costs | 14,433.96 | - |
Huishang Micro-finance | Payment for goods | 10,996.30 | - |
Notes on related-party transactions of purchasing and selling goods and rendering andaccepting service
□Applicable √Not applicable
(2). Entrustment/contracting from and to related parties
Entrustment/contracting to the Company:
√Applicable □Not applicable
Unit: RMB
Name of consignor/employer | Name of consignee/contractor | Type of entrusted/contracted assets | Starting date of entrustment /contracting | Ending date of entrustment /contracting | Pricing of entrustment income/contracting income | Entrustment income/contracting income recognized in the current period |
MDG | The Company | Entrustment of other assets | Feb 1, 2020 | Jan 31, 2025 | Negotiated price | 1,973,291.12 |
Notes on entrustment/contracting from related parties
√Applicable □Not applicable
According to the Yourworld International Conference Center Management Contract signedby and between the Company and the Market Development Group, the Company is entrusted tomanage Yourworld International Conference Center Hotel located at No. 100, Xingfuhu Road,Yiwu City. The hotel management fee collected during the reporting period was RMB1,973,291.12 (January- June 2023: RMB 182,819.84)
Entrustment/contracting from the Company:
□Applicable √Not applicable
Notes on related-party management/contracting
□Applicable √Not applicable
(3). Related-party lease
The Company as the lessor:
√Applicable □Not applicable
Unit: RMB
Name of lessee | Type of leased asset | Confirmed in this period Rental income | Rental income recognized in the previous period |
Yiwu Shanglv | Warehouse and parking lot | 917,431.19 | - |
CCCP | Office space | 494,462.28 | 468,572.46 |
Yiwu Market Development Service Center Co., Ltd. | Parking lot | 320,811.73 | - |
Yiwu Shangbo Yungu Enterprise Management Co., Ltd. | Office space | 292,115.22 | - |
Yiwu Meipinshu Supply Chain Management Co., Ltd. | Office space | 174,028.87 | - |
Yiwu Huishang Redbud Capital Management Co., Ltd. | Office space | 136,139.73 | 123,409.56 |
Yiwu Digital Port Technology Co., Ltd. | Office space | 118,715.50 | - |
Yiwu China Commodities City Property Service Co., Ltd. | Office space | 97,139.70 | 72,225.96 |
Huishang Micro-finance | Auxiliary buildings | 81,909.41 | 10,171.46 |
Hangzhou MicroAnts Co., Ltd. | Office space | 81,183.79 | - |
Zhijie Yuangang | Office space | 74,028.00 | - |
The Company as the lessee
√Applicable □Not applicable
Unit: RMB
lessor name | Type of leased asset | Simplified treatment of rental expenses for short-term leases and leases of low-value assets (if applicable) | Variable lease payments not included in the measurement of the lease liability (if applicable) | Rent paid | Interest expense on lease liability assumed | Increased right-of-use assets | |||||
Amount in the current period | Amount in the previous period | Amount in the current period | Amount in the previous period | Amount in the current period | Amount in the previous period | Amount in the current period | Amount in the previous period | Amount in the current period | Amount in the previous period | ||
CCCH | Warehouses | 7,512,968.82 | - | - | - | - | - | - | - | - | - |
Notes on related-party lease
√Applicable □Not applicable
The Group rent office spaces from above related parties at market prices
(4). Related-party guarantees
The Company as the guarantor
√Applicable □Not applicable
Unit: RMB
The guaranteed | Amount of guarantee | Starting date of the guarantee | Expiry date of the guarantee | Is the guarantee fulfilled in full |
Yiwu Shanglv | 75,092,248.56 | Jul 1, 2015 | Dec 15, 2026 | No |
The Company as the guaranteed party
□Applicable √Not applicable
Notes on related-party guarantees
√Applicable □Not applicable
The Group provided guarantee for the borrowings of Yiwu Shanglv. As of June 30, 2023,Yiwu Shanglv actually borrowed RMB 153.2495 million ( Dec 31, 2022: RMB 193.4681 million )from banks. According to the guarantee contract, the Group assumed liability for RMB 75.0922million (Dec 31, 2022: RMB 94.7993 million). SCO provided a counter-guarantee
(5). Related-party lending and borrowing
√Applicable □Not applicable
Unit: RMB
Related party | Amount | Starting date | Maturity date | Remarks |
Borrowings | ||||
Chengzhen Property | 58,803,200.00 | Jan 18, 2022 | In 2022, the Group transferred a total of RMB 58,803,200.00 from Chengzhen Property, according to the shareholding ratio, at the annual interest rate of 0%. As of June 30, 2023, RMB 31,628,618.75 has been transferred back, and the remaining fund repayment date would be determined based on the funding needs of Chengzhen Property projects. | |
Yiwu Guoshen Shangbo Property Co., Ltd. | 230,600,000.00 | Dec 31, 2022 | The Ggroup allocated a total of RMB 230,600,000.00 of surplus funds from Guoshen Shangbo in 2022 and a total of RMB 294,000,000.00 of surplus funds from Guoshen Shangbo in 2023. The allocations were based on the share holding rate and the annual interest rates were 0%. The repayment date would be determined according to the funding needs of Guoshen Shangbo projects. | |
Yiwu Guoshen Shangbo Property Co., Ltd. | 294,000,000.00 | June 29, 2023 | ||
Yiwu Rongshang Property Co., Ltd. | 64,418,683.00 | Jun 30, 2022 | The Company received a pre-dividend of RMB 64,418,683.00 from Rongshang Property in 2022, and the specific date of repayment of funds would be determined according to the distribution of dividend resolutions. | |
Huishang Redbud | 4,500,000.00 | Dec 31, 2021 | The Company received a pre-dividend of RMB 4,500,000.00 from Huishang Redbud in 2021, and a pre-dividend of RMB12,000,000.00 from Huishang Redbud in 2022. The specific date of return of funds would be determined according to the distribution of dividend resolutions. | |
Huishang Redbud | 12,000,000.00 | Dec 31, 2022 | ||
Lending to | ||||
Handing Shangbo | 189,904,400.00 | Dec 11, 2020 | The Group provided financial assistance to Handing Shangbo totaling RMB 189,904,400.00 in 2020, and provided financial assistance to Handing Shangbo | |
Handing | 17,845,800.00 | May 11, |
Related party | Amount | Starting date | Maturity date | Remarks |
Shangbo | 2021 | totaling RMB 17,845,800.00 in 2021, with an annual interest rate of 6%. Handing Shangbo has repaid all the funds as of June 30, 2023. | ||
JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATION FZCO | 63,465,484.42 | Mar 9, 2020 | In 2020, the Group provided JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATION FZCO financial assistance totaling RMB 63,465,484.42; in 2021, the Group provided it with financial assistance totaling RMB 109,636,517.09; in 2022, the Group provided it with financial assistance totaling RMB 41,772,885.00, all at an annual interest rate of 6-month average EIBOR plus 5%. The repayment term of the financial assistance would be determined based on the progress of the project. | |
JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATION FZCO | 109,636,517.09 | Mar 31, 2021 | ||
JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATION FZCO | 41,772,885.00 | May 12, 2022 |
(6). Related-party transfer of assets and restructuring of debts
□Applicable √Not applicable
(7). Remunerations of key officers
√Applicable □Not applicable
Unit: RMB10,000
Item | Amount in the current period | Amount in the previous period |
Remunerations of key officers | 1,107.37 | 771.29 |
(8). Other related-party transactions
√Applicable □Not applicable
Related party entrusted loan
Unit: RMB
Unit | End of June 2023 | 2022 |
Yisha Chengdu International Trade City Co., Ltd. | 48,000,000.00 | 48,000,000.00 |
After deliberation and approval at the fifth meeting of the ninth Board of Directors held by theGroup on December 15, 2022, Yiwugou, an indirectly controlled subsidiary of the Group,provided an entrusted loan of RMB 48 million yuan to Yisha Chengdu International Trade CityCo., Ltd., a minority shareholder of Yiwugou, in the form of monetary funds through Yiwu Branchof Agricultural Bank of China Co., Ltd., with a term of 2 years and an annual interest rate of 5.5%.
6. Accounts receivable from and payable to related parties
(1). Receivables
√Applicable □Not applicable
Unit: RMB
Item | Related party | Closing balance | Opening balance | ||
Book balance | Bad debt provision | Book balance | Bad debt provision | ||
Accounts receivable | Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | 632,338.41 | 6,279.89 | 168,814.20 | 1,676.53 |
Accounts receivable | Tonghui Shangbo | - | - | 6,200,000.00 | 61,573.54 |
Total | 632,338.41 | 6,279.89 | 6,368,814.20 | 63,250.07 | |
Other receivables | Yiwu Shanglv | 1,000,000.00 | - | - | - |
Other receivables | MDG | 263,142.11 | - | - | - |
Other receivables | Yiwu China Commodities City Property Service Co., Ltd. | 5,497.57 | - | - | - |
Other receivables | Hangzhou MicroAnts Co., Ltd. | 1,985.00 | - | 1,288.00 | - |
Other receivables | Yiwu Huishang Redbud Capital Management Co., Ltd. | 1,421.00 | - | - | - |
Other receivables | Zhejiang Xingfuhu Sports Development Co., Ltd. | 811.00 | - | - | - |
Other receivables | Handing Shangbo | - | - | 207,750,200.00 | - |
Other receivables | Tonghui Shangbo | - | - | 116,036,742.09 | - |
Other receivables | Yiwu Gongchen Shangbo Property Co., Ltd. | - | - | 562,755.00 | - |
Total | 1,272,856.68 | - | 324,350,985.09 | - | |
Long-term receivables | JEBEL ALI FREE ZONE TRADER MARKET DEVELOPMENT AND OPERATION FZCO | 244,035,954.02 | - | 233,127,115.20 | - |
Long-term receivables | Yiwu Shanglv | 36,750,000.00 | - | 36,750,000.00 | - |
Total | 280,785,954.02 | - | 269,877,115.20 | - |
(2). Payables
√Applicable □Not applicable
Unit: RMB
Item | Related party | Closing book balance | Opening book balance |
Accounts payable | Yiwu Digital Port Technology Co., Ltd. | 3,384,348.68 | - |
Accounts payable | Yiwu China Commodities City Property Service Co., Ltd. | 2,803,038.96 | 6,653,942.97 |
Accounts payable | Zhejiang Yemai Data Technology Co., Ltd. | 132,008.28 | 713,020.54 |
Accounts | Yiwu Gongchen Shangbo Property Co., Ltd. | 12,829.45 | - |
payable | |||
Accounts payable | Yiwu Agriculture Development Co., Ltd. | - | 1,791,720.12 |
Accounts payable | Yiwu Security Service Co., Ltd. | - | 919,817.45 |
Total | 6,332,225.37 | 10,078,501.08 | |
Advance from customers | Yiwu Shangbo Yungu Enterprise Management Co., Ltd. | 1,460,576.03 | - |
Advance from customers | Yiwu Shanglv | 879,204.89 | - |
Advance from customers | Yiwu China Commodities City Property Service Co., Ltd. | 798,003.82 | - |
Advance from customers | MDG | 710,377.35 | - |
Advance from customers | CCCP | 329,641.51 | 583,018.86 |
Advance from customers | Yiwu Huishang Redbud Capital Management Co., Ltd. | 226,899.53 | - |
Advance from customers | Zhijie Yuangang | 216,312.34 | - |
Advance from customers | Yiwu Meipinshu Supply Chain Management Co., Ltd. | 40,688.61 | - |
Advance from customers | Yiwu Digital Port Technology Co., Ltd. | 39,235.28 | - |
Advance from customers | Hangzhou MicroAnts Co., Ltd. | 32,430.42 | - |
Total | 4,733,369.78 | 583,018.86 | |
Contract liabilities | Yiwu China Commodities City Property Service Co., Ltd. | 118,646.57 | 94,027.70 |
Contract liabilities | Yiwu Digital Port Technology Co., Ltd. | 52,808.83 | 35,519.71 |
Contract liabilities | Huishang Micro-finance | 25,943.40 | 11,792.46 |
Contract liabilities | Yiwu Shangbo Yungu Enterprise Management Co., Ltd. | 5,581.64 | - |
Contract liabilities | Zhejiang Yiwu Rural Economic Development Co., Ltd. | - | 84,905.66 |
Contract liabilities | Yiwu Security Service Co., Ltd. | - | 974.76 |
Total | 202,980.44 | 227,220.29 | |
Other payables | Yiwu Guoshen Shangbo Property Co., Ltd. | 524,600,000.00 | 230,600,000.00 |
Other payables | Yiwu Rongshang Property Co., Ltd. | 64,418,683.00 | 64,418,683.00 |
Other payables | Yiwu Chengzhen Property Co., Ltd. | 27,174,581.25 | 58,803,200.00 |
Other payables | Yiwu Huishang Redbud Equity Investment Co., Ltd. | 16,500,000.00 | 16,500,000.00 |
Other payables | Zhijie Yuangang | 322,800.00 | 150,000.00 |
Other payables | Yourworld International Conference Center Company of Yiwu Market Development Group Co., Ltd. | 307,465.55 | 78,908.97 |
Other payables | CCCP | 240,000.00 | - |
Other payables | Yiwu Shangbo Yungu Enterprise Management Co., Ltd. | 200,000.00 | 200,000.00 |
Other payables | Zhejiang Yemai Data Technology Co., Ltd. | 152,928.50 | 21,328.50 |
Other payables | Yiwu Meipinshu Supply Chain Management Co., Ltd. | 103,912.00 | 57,000.00 |
Other payables | Yiwu Heimahui Enterprise Service Co., Ltd. | 100,000.00 | 100,000.00 |
Other payables | Hangzhou MicroAnts Co., Ltd. | 26,000.00 | 26,000.00 |
Other payables | Yiwu Digital Port Technology Co., Ltd. | 25,000.00 | - |
Other payables | Yiwu China Commodities City Trading Co., Ld. | 2,500.00 | 2,500.00 |
Other payables | CCCP | - | 240,000.00 |
Other payables | Yiwu Shanglv | - | 108,333.33 |
Other payables | Yiwu Security Service Co., Ltd. | - | 14,740.00 |
Total | 634,173,870.30 | 371,320,693.80 |
7. Related-party commitments
□Applicable √Not applicable
8. Other
□Applicable √Not applicable
XIII. Share-based payment
1. Overview of share-based payment
√Applicable □Not applicable
Unit: Share Currency: RMB
Total amount of equity instruments granted by the Company in the current period | - |
The total amount of equity instruments exercised by the Company during the current period | 13,173,600.00 |
The total amount of the Company's equity instruments that have lapsed during the current period | - |
Scope of the exercise price of other equityinstruments issued by the Companyand theremaining period of the contractat the end of theperiod
The grant prices were RMB 2.94 and RMB
2.39, respectively, both in 60 months from the
date of grant registration
Other statementsNil
2. Share-based payment settled with equity
√Applicable □Not applicable
Unit: RMB
Method for determining the fair value of equity instruments on the grant date | Market price on grant day |
Basis for determining the number of exercisable equity instruments | Determined based on the number of incentive objects that have reached the assessment target, through annual assessment on the Company’s financial performance indicators and personal performance indicators. |
Reason for the significant difference between the estimates in the current period and in the previous period | Not applicable |
Cumulative amount of equity-settled share-based payments included in the capital reserve | 71,248,170.59 |
Total amount of expenses recognized by equity-settled share payments in the current period | 7,542,361.95 |
Other statementsOn December 10, 2020, the 2020 fifth provisional general meeting of shareholders of theCompany reviewed and approved the “Plan on the Company's Restricted Stock Incentive Plan2020 (Draft)” and its summary. A total of 50,480,000 restricted shares were granted, accountingfor about 0.927% of the Company's total share capital of 5,443,214,176 shares, of which
47,920,000 shares were granted for the first time and 2,560,000 shares were reserved. Duringthe subscription process, 10 incentive objects voluntarily waived the 1,220,000 restricted sharesto be granted to them due to personal reasons. Therefore, 46,700,000 restricted shares wereactually granted this time, and the number of incentive objects was 395. On January 15, 2021,the Company's board of directors has completed the registration of the first grant of restrictedstocks.On September 6, 2021, Zhejiang Zhicheng Certified Public Accountants (Special GeneralPartnership) issued the capital verification report (Zhezhihuiyizi [2021] No. 17): The Companyhas received a total of RMB 5,592,600.00 for subscription of restricted shares from 31 restrictedstock incentive objects, including RMB 2,340,000.00 in newly registered capital (share capital),and RMB 3,252,600.00 in capital reserve. The registered capital and share capital of theCompany before the capital increase were both RMB 5,489,914,176.00, and the registeredcapital and share capital after the change were both RMB 5,492,254,176.00. During this grantregistration process, in view of the fact that 3 of the incentive objects to be granted on thereserved grant date are no longer eligible for incentive objects due to their voluntaryabandonment; 31 incentive objects actually subscribed this time, and 2.34 million shares weresubscribed. On November 4, 2021, the registration procedures for the reserved grant ofrestricted stocks involved in this incentive plan were completed, and the Shanghai Branch ofChina Securities Depository and Clearing Corporation Limited issued the "Securities ChangeRegistration Certificate".The restricted stocks granted for the first time under the restricted stock incentive plan should bevested in three terms from the first trading day after 24 months after the grant registration iscompleted until the last trading day in 60 months after the grant registration is completed. That is,after the vesting conditions have been satisfied, employees have the right to purchase stocks atthe vesting price. If the vesting conditions of the restricted stock incentive plan have beensatisfied during the vesting period, the incentive objects can apply for the ownership of stocksand being listed for circulation.According to the equity incentive proposal and the completion status of the assessmentindicators, the first period for lifting the restrictions on the restricted stock incentive plan grantedby the Company in 2020 expired on January 13, 2023, and the corresponding conditions forlifting the restrictions have been met. The total number of restricted stocks that can be lifted thistime was 13.1736 million shares, which were listed for circulation on January 13, 2023.
3. Share-based payment settled with cash
□Applicable √Not applicable
4. Modification and termination of share-based payment
□Applicable √Not applicable
5. Other
□Applicable √Not applicable
XIV. Commitments and contingencies
1. Important commitments
√Applicable □Not applicable
Important external commitments, nature and amount thereof as of the balance sheet dates
Unit: RMB
Capital commitments | June 30, 2023 | 2022 |
Signed but not provided | 2,538,748,600.60 | 3,451,663,094.71 |
Investment commitments:
In 2017, the Group’s wholly-owned subsidiary Yiwu China Commodities City FinancialHoldings Co., Ltd. (“CCCF”) and Shanghai Fuxing Industry Group Co., Ltd. (“Fuxing Group”)jointly established an industry fund Yiwu China Commodities City Fuxing Investment Center(limited partnership) (hereinafter referred to as the “FoF”). The FoF as a limited partner investedin 12 sub-funds including Yiwu Shangfu Chuangzhi Investment Center (limited partnership)(“Shangfu Chuangzhi Fund”). CCCF subscribed for capital contribution of RMB998million in theFoF as a limited partner, accounting for 49.9% of the total capital contribution, and has paid inRMB102.92million. The unpaid portion of its subscribed capital contribution was promised to beRMB895.08million and was not subject to a term. CCCF also made capital contribution ofRMB9.8million (49% equity) to Yiwu China Commodities City Investment and Management Co.,Ltd. (hereinafter referred to as the “CCCIM”), which was a general partner of the above FoF andsub-funds. Fuxing made capital contribution of 51% to and had control over CCCIM.
Shangfu Chuangzhi Fund raised funds of RMB823.36million in total. The FoF hassubscribed for and paid in capital contribution of RMB205.84million as a limited partner(including the above RMB102.92million from CCCIM and the rest was contributed by Fuxing, theother limited partner of the FoF). As the other limited partner of Shangfu Chuangzhi Fund, CCCFhas separately subscribed for and paid in capital contribution of RMB617.51million. In addition,neither the Group nor CCCF have invested in other sub-funds of the FoF. Subsequently,Shangfu Chuangzhi Fund made capital contribution of RMB820.54million to subscribe for theincrease in the registered capital of Hubei Provincial Asset Management Co., Ltd. to acquire
22.667% equity therein. By 2019, 9 out of the above 12 sub-funds had been deregistered.
In 2018, CCCF learned during its after-investment follow-up management that Fuxing andits actual controller ZHU Yidong were suspected of having committed a criminal offense and the
22.667% equity held by Shangfu Chuangzhi Fund in Hubei Provincial Asset Management Co.,Ltd. was frozen by the Public Security Bureau of Shanghai for a term from Sep 6, 2018 to Sep 6,2019 due to Fuxing’s contribution in the sources of the capital contribution. As of the reportingdate, the equity was still frozen by the Shanghai Municipal Public Security Bureau.
As of the date of this report, the Group had not received any notice of capital contributionother than the above contributions that had been made or any notice of action involving theGroup, CCCF, FoF and its sub-funds.
In addition, as of June 30, 2023, the Group had other investment commitments totaling RMB
289.15 million (December 31, 2022: RMB 282.61 million).
2. Contingencies
(1). Important contingencies on the balance sheet dates
√Applicable □Not applicable
Unit: RMB
Item | June 30, 2023 | 2022 |
Contingent liabilities resulting from the guarantee provided externally | 79,830,082.22 | 99,645,681.29 |
According to relevant regulations, before the purchaser of the commercial housing sold bythe Group has obtained the property certificate, the Group shall provide the purchaser with abank mortgage guarantee. As of June 30, 2023, the unsettled guarantee amount was RMB4,737,833.66 (December 31, 2023: RMB 4,846,333.64). Those guarantees would be releasedafter the issuance of the property ownership certificates and are thus little likely to incur losses.
Therefore, the management believed that it was not necessary to make provision for theguarantees.According to the resolution of the 15th meeting of the 7th Board of Directors on Jul 1, 2015,the Group applied to the Yiwu Branch of ABC for a RMB750million loan for Yiwu Shanglv andprovided guarantee based on its shareholding ratio. The guarantee was a joint and severalliability guarantee, the maximum amount of guarantee was RMB367.5million and the term was11 years. As of June 30, 2023, Yiwu Shanglv actually borrowed RMB 153,249,486.86(December 31, 2022: RMB 193,468,056.42) from the bank in total. According to the agreementof the guarantee contract, it assumed the guarantee liability of RMB 75,092,248.56 (December31, 2022: RMB 94,799,347.65) for the Agricultural Bank of China Yiwu Branch. SCO provided acounter-guarantee for this guarantee.
(2). Notes shall also be made even if the Company has no important contingencies tobe disclosed:
□Applicable √Not applicable
3. Other
□Applicable √Not applicable
XV. Post-balance sheet date events
1. Important non-adjusting events
□Applicable √Not applicable
2. Profit distribution
□Applicable √Not applicable
3. Sales return
□Applicable √Not applicable
4. Other post-balance sheet date events
□Applicable √Not applicable
XVI. Other important events
1. Correction of previous accounting errors
(1). Retrospective restatement
□Applicable √Not applicable
(2). Future applicable method
□Applicable √Not applicable
2. Debt restructuring
□Applicable √Not applicable
3. Exchange of assets
(1). Exchange of non-monetary assets
□Applicable √Not applicable
(2). Exchange of other assets
□Applicable √Not applicable
4. Annuity plan
□Applicable √Not applicable
5. Termination of operations
□Applicable √Not applicable
6. Information of divisions
(1). Determination basis and accounting policy of reporting divisions
√Applicable □Not applicable
Information of divisions is reported based on business divisions of the Group. In theidentification of region-based divisions, revenue is attributable to the divisions in the regionswhere the clients are located, and assets are attributable to the divisions in the regions where theassets are located. As the Group’s main operating activities and operating assets are bothconcentrated in mainland China, it is not required to report more detailed information onregion-based divisions.The Group’s businesses are organized and managed separately based on the nature ofbusiness and the products and services provided. Each business division of the Group is abusiness department or a subsidiary and provides the products and services that face the riskdifferent from that faced by other business divisions and bring the compensations different fromthose brought by other business divisions. The detailed information on business divisions aresummarized as follows:
(a) Market operation segment refers to the business that the Group is engaged in marketoperation, including the collection of business space usage fees and the rent of auxiliarybuildings and office buildings;
(b) The commodities sales division engages in the purchase and sale of goods such asexport trade;
(c) The hotel service division engages in the operation of hotels including accommodationand catering services;
(d) The exhibition advertising division engages in the design, production, placement andagency of advertisements;
(e) Other services division covers the provision of market-related auxiliary services.
The transfer pricing between divisions is made based on the prices offered to third partiesand the then prevailing market prices.
(2). Financial information of reporting divisions
√Applicable □Not applicable
Unit: RMB million
Item | Market operation | Sales of goods | Hotel service | Exhibition and advertising | Other services | Set-offs among divisions | Total |
Revenue from external transactions | 1,801 | 2,838 | 140 | 98 | 284 | - | 5,161 |
Revenue from inter-division transactions | 32 | 3 | 19 | 6 | 14 | 74 | - |
Profits before tax | 2,360 | -26 | -69 | 30 | 52 | 15 | 2,332 |
Total assets | 42,647 | 1,309 | 1,372 | 193 | 10,135 | 22,237 | 33,419 |
Total liabilities | 25,179 | 1,193 | 1,440 | 77 | 4,328 | 15,830 | 16,387 |
Capital expenditures | 852 | - | 3 | - | 404 | - | 1,259 |
Long-term equity investment in joint ventures and associates | 5,765 | 1 | - | - | 1,237 | - | 7,003 |
(3). If the Company does not have reporting divisions or is unable to disclose the total
assets and total liabilities of each division, please explain
□Applicable √Not applicable
(4). Other statements
□Applicable √Not applicable
7. Other important transactions and events that have influence on investors’ decisions
□Applicable √Not applicable
8. Other
□Applicable √Not applicable
XVII. Notes to main items in financial statements of parent company
1. Accounts receivable
(1). Disclosure based on account age
√Applicable □Not applicable
Unit: RMB
Account age | Closing book balance |
Within 1 year | |
In which: sub-items | |
Within 1 year | 16,709,047.03 |
Subtotal within 1 year | 16,709,047.04 |
1 to 2 years | 1,326,930.84 |
2 to 3 years | 80,451.00 |
Over 3 years | 100,234.00 |
Total | 18,216,662.87 |
(2). Categorized disclosure based on the bad debt provision method
√Applicable □Not applicable
Unit: RMB
Category | Closing balance | Opening balance | ||||||||
Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
Amount | Proportion (%) | Amount | Provision ratio (%) | Amount | Proportion (%) | Amount | Provision ratio (%) | |||
Accounts receivable for which bad debt provision is made individually | - | - | - | - | - | - | - | - | - | - |
Accounts receivable for which bad debt provision is made by group | 18,216,662.87 | 100.00 | 437,210.87 | 2.40 | 17,779,452.00 | 22,449,888.75 | 100.00 | 417,498.04 | 1.86 | 22,032,390.71 |
Among them: | ||||||||||
Accounts receivable for which the bad debts are provided by combination of credit risk characteristics | 18,216,662.87 | 100.00 | 437,210.87 | 2.40 | 17,779,452.00 | 22,449,888.75 | 100.00 | 417,498.04 | 1.86 | 22,032,390.71 |
Total | 18,216,662.87 | / | 437,210.87 | / | 17,779,452.00 | 22,449,888.75 | / | 417,498.04 | / | 22,032,390.71 |
Accounts receivable for which bad debt provision is made individually:
□Applicable √Not applicable
Explanation for making bad debt provision for accounts receivable by group:
√Applicable □Not applicable
Combined provision items: accounts receivable with provision for bad debts based on credit riskcharacteristics
Unit: RMB
Name | Closing balance | ||
Accounts | Bad debt | Provision ratio |
receivable | provision | (%) | |
Accounts receivable for which the bad debts are provided by combination of credit risk characteristics | 18,216,662.87 | 437,210.87 | 2.40 |
Total | 18,216,662.87 | 437,210.87 | 2.40 |
Standard for recognition of provision for bad debt by combination of credit risk characteristicsand descriptions:
□Applicable √Not applicable
If the bad debt provision is made according to the general model of expected credit loss, pleaserefer to the disclosure of other receivables:
√Applicable □Not applicable
Unit: RMB
Account age | End of June 2023 | ||
Estimated book balance in default | Expected credit loss rate (%) | Expected credit loss in whole duration | |
Within 1 year | 16,709,047.03 | 1.85 | 308,475.64 |
1 - 2 years | 1,326,930.84 | 1.76 | 23,296.16 |
2 -3 years | 80,451.00 | 6.47 | 5,205.07 |
Over 3 years | 100,234.00 | 100.00 | 100,234.00 |
Total | 18,216,662.87 | 437,210.87 |
(3). Provisions for bad debts
√Applicable □Not applicable
Unit: RMB
Category | Opening balance | Amount of change during the current period | Closing balance | |
Provision | Recovery or reversal | |||
Bad debt provision for accounts receivable | 417,498.04 | 19,712.83 | - | 437,210.87 |
Total | 417,498.04 | 19,712.83 | - | 437,210.87 |
In which the recovered or reversed amount is important:
□Applicable √Not applicable
(4). Accounts receivable actually written off during the current period
□Applicable √Not applicable
(5). Accounts receivable from the five debtors with the highest closing balance
□Applicable √Not applicable
(6). Accounts receivable derecognized due to transfer of financial assets
□Applicable √Not applicable
(7). Amounts of assets and liabilities formed by the transfer of accounts receivable andcontinuing involvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
2. Other receivables
Presentation of items
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance |
Other receivables | 26,842,202.39 | 329,607,469.39 |
Total | 26,842,202.39 | 329,607,469.39 |
Other notes:
□Applicable √Not applicable
Interest receivable
(1). Classification of interest receivable
□Applicable √Not applicable
(2). Significant overdue interest
□Applicable √Not applicable
(3). Bad debt provision
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Dividend receivable
(1). Dividend receivable
□Applicable √Not applicable
(2). Important dividend receivable with an account age longer than 1 year
□Applicable √Not applicable
(3). Bad debt provision
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
Other receivables
(1). Disclosure based on account age
√Applicable□Not applicable
Unit: RMB
Account age | Closing book balance |
Within 1 year | |
In which: sub-items | |
Within 1 year | 25,541,878.05 |
Subtotal within 1 year | 25,541,878.05 |
1 to 2 years | 455,188.81 |
2 to 3 years | 530,616.12 |
Over 3 years | 1,081,535.34 |
Bad debt provision for other receivables | -767,015.93 |
Total | 26,842,202.39 |
(2). Categorization by nature
√Applicable □Not applicable
Unit: RMB
Nature of receivable | Closing book balance | Opening book balance |
Withholdings, deposit and margin | 26,248,598.35 | 5,772,216.82 |
Reserve | 593,604.04 | 48,340.48 |
Financial assistance receivable from joint ventures | - | 323,786,912.09 |
Total | 26,842,202.39 | 329,607,469.39 |
(3). Bad debt provision
□Applicable □Not applicable
Unit: RMB
Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
Expected credit loss in the coming 12 months | Expected credit loss in the entire duration (credit has not been impaired) | Expected credit loss in the entire duration (credit has been impaired) | ||
Balance as of January 1, 2023 | 787,922.23 | 787,922.23 | ||
Balance as of January 1, 2023 in the current period | ||||
Provision made in the current period | 26,171.70 | 26,171.70 | ||
Current reversal | 47,078.00 | 47,078.00 | ||
Balance as of June 30, 2023 | 767,015.93 | 767,015.93 |
Significant changes in the book balance of other receivables with changes in loss provisions:
□Applicable √Not applicable
Basis for the bad debt provision made in the current period and for assessing whether the creditrisk of financial instruments has increased significantly:
□Applicable √Not applicable
(4). Provisions for bad debts
√Applicable □Not applicable
Unit: RMB
Category | Opening balance | Amount of change during the current period | Closing balance | |
Provision | Recovery or reversal | |||
Bad debt provision for other receivables | 787,922.23 | 26,171.70 | 47,078.00 | 767,015.93 |
Total | 787,922.23 | 26,171.70 | 47,078.00 | 767,015.93 |
In which the recovered or reversed amount is important:
□Applicable √Not applicable
(5). Other receivables actually written off during the current period
□Applicable √Not applicable
Notes on the write-off of other receivables:
□Applicable √Not applicable
(6). Other receivables from the five debtors with highest closing balance
√Applicable □Not applicable
Unit: RMB
Debtor | Nature of receivable | Closing balance | Account age | Weight in the total closing balance of other receivables (%) | Bad debt provision Closing balance |
Yiwu China Commodities City Information Technology Co., Ltd. | Current accounts | 13,404,904.46 | Within 1 year | 48.55 | - |
Zhejiang Yindu Hotel Management Co., Ltd. | Current accounts | 2,702,775.72 | Within 1 year | 9.79 | - |
Zhejiang China Commodities City Group Co., Ltd. Jingyue Dafan Homestay | Current accounts | 1,083,708.32 | Within 1 year | 3.93 | - |
Yiwu Shanglv Investment Development Co., Ltd. | Current accounts | 1,000,000.00 | Within 1 year | 3.62 | - |
Yiwu Power Transmission and Transformation Engineering Co., Ltd. | Current accounts | 670,487.00 | Within 1 year | 2.43 | - |
Total | / | 18,861,875.50 | / | 68.32 | - |
(7). Receivables involving government grants
□Applicable √Not applicable
(8). Other receivables derecognized due to transfer of financial assets
□Applicable √Not applicable
(9). Amounts of assets and liabilities formed by the transfer of other receivables andcontinuing involvement
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
3. Long-term equity investment
√Applicable □Not applicable
Unit: RMB
Item | Closing balance | Opening balance | ||||
Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
Investment in subsidiaries | 4,504,806,448.14 | - | 4,504,806,448.14 | 4,980,206,448.14 | 570,000,000.00 | 4,410,206,448.14 |
Investment in associates and joint ventures | 5,841,099,515.98 | - | 5,841,099,515.98 | 4,800,215,865.20 | - | 4,800,215,865.20 |
Total | 10,345,905,964.12 | - | 10,345,905,964.12 | 9,780,422,313.34 | 570,000,000.00 | 9,210,422,313.34 |
(1) Investment in subsidiaries
√Applicable □Not applicable
Unit: RMB
Investee | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Current provision for impairment | Closing balance of impairment provision |
Yiwu China Commodities City Financial Holdings Co., Ltd. | 2,239,426,242.40 | - | - | 2,239,426,242.40 | - | - |
Zhejiang Xunchi Digital Technology Co., Ltd. | 444,368,982.89 | - | - | 444,368,982.89 | - | - |
Yiwu Shangbo Yuncang Enterprise Management Co., Ltd. | 300,000,000.00 | - | - | 300,000,000.00 | - | - |
Yiwu Shangbo Shuzhi Enterprise Management Co., Ltd. | 225,600,000.00 | 74,400,000.00 | - | 300,000,000.00 | - | - |
Yiwu Commodities City Gonglian Property Co., Ltd. | 200,000,000.00 | - | - | 200,000,000.00 | - | - |
Zhejiang China Commodities City Group Commercial Factoring Co., Ltd. | 120,059,576.13 | - | - | 120,059,576.13 | - | - |
Yiwu China Commodities City Big Data Co., Ltd. | 102,984,635.63 | 1,277,386.09 | - | 104,262,021.72 | - | - |
Yiwu China Commodities City Import and | 102,334,012.67 | - | - | 102,334,012.67 | - | - |
Export Co., Ltd. | ||||||
Yiwu China Commodities City Supply Chain Management Co., Ltd. | 101,265,319.13 | - | - | 101,265,319.13 | - | - |
Yiwu China Commodities City Overseas Investment and Development Co., Ltd. | 101,540,253.96 | - | - | 101,540,253.96 | - | - |
Yiwu China Commodities City Tourism Development Co., Ltd. | 100,977,959.14 | - | - | 100,977,959.14 | - | - |
Yiwu China Commodities City Logistics and Distribution Co., Ltd. | 101,931,157.09 | - | - | 101,931,157.09 | - | - |
Zhejiang Huajie Investment and Development Co., Ltd. | 74,423,097.53 | 3,300,000.00 | - | 77,723,097.53 | - | - |
Yiwu Comprehensive Bonded Zone Operation and Management Co., Ltd. | 36,668,690.36 | 17,500,000.00 | - | 54,168,690.36 | - | - |
Yiwu China Commodities City Information Technology Co., Ltd. | 50,965,115.90 | - | - | 50,965,115.90 | - | - |
Hangzhou Shangbo Nanxing Property Co., Ltd. | 50,000,000.00 | - | - | 50,000,000.00 | - | - |
Yiwu China Commodities City Exhibition Co., Ltd. | 19,666,060.90 | - | - | 19,666,060.90 | - | - |
Yiwu China Commodities City Assets Operation and Management Co., Ltd. | 11,375,213.90 | - | - | 11,375,213.90 | - | - |
Zhejiang Yindu Hotel Management Co., Ltd. | 13,534,551.93 | - | - | 13,534,551.93 | - | - |
Yiwu China Commodities City Research Institute Co., Ltd. | 11,208,192.49 | - | - | 11,208,192.49 | - | - |
Haicheng Yiwu China Commodities City Investment Development Co., Ltd. | 571,277,386.09 | - | 571,277,386.09 | - | - | - |
Yiwu China Commodities City Commerce and Trade Service Training Center Co., Ltd. | 600,000.00 | - | 600,000.00 | - | - | - |
Total | 4,980,206,448.14 | 96,477,386.09 | 571,877,386.09 | 4,504,806,448.14 | - | - |
(2) Investment in associates and joint ventures
√Applicable □Not applicable
Unit: RMB
Investment Unit | Opening amount Balance | Change in the current period | Closing amount Balance | Closing balance of impairment provision | |||
Additional investment | Decrease in investment | Investment gains or losses recognized with the equity method | Impairment provision | ||||
1. Joint ventures | |||||||
Yiwu Shanglv | 396,972,448.93 | - | - | 20,662,266.60 | - | 417,634,715.53 | - |
Yiwu Rongshang Property Co., Ltd. | 65,650,902.46 | - | - | 2,809,806.79 | - | 68,460,709.25 | - |
Yiwu Chuangcheng Property Co., Ltd. | 28,449,292.72 | - | - | 2,673,475.72 | - | 31,122,768.44 | - |
Yiwu Guoshen Shangbo Property Co., Ltd. | 75,740,065.56 | - | - | 859,602,411.13 | - | 935,342,476.69 | - |
Other | 25,064,023.73 | - | - | -1,077,279.54 | - | 23,986,744.19 | - |
Sub-total | 591,876,733.40 | - | - | 884,670,680.70 | - | 1,476,547,414.10 | - |
2. Associates | |||||||
Huishang Micro-finance | 78,209,979.82 | - | - | 1,067,437.11 | - | 79,277,416.93 | - |
Chouzhou Financial Lease | 489,205,549.91 | - | - | 52,173,749.11 | - | 541,379,299.02 | - |
Pujiang Lvgu Property Co., Ltd. | 374,601,160.67 | - | - | -8,975,700.27 | - | 365,625,460.40 | - |
CCCP | 2,984,810,019.41 | - | - | 123,607,288.99 | - | 3,108,417,308.40 | - |
Zhijie Yuangang | 145,563,439.33 | - | - | -7,168,026.16 | - | 138,395,413.17 | - |
Other | 135,948,982.66 | - | - | -4,491,778.70 | - | 131,457,203.96 | - |
Sub-total | 4,208,339,131.80 | - | - | 156,212,970.08 | - | 4,364,552,101.88 | - |
Total | 4,800,215,865.20 | - | - | 1,040,883,650.78 | - | 5,841,099,515.98 | - |
Other notes:
□Applicable √Not applicable
4. Operating revenue and operating cost
(1). Overview of operating revenue and operating cost
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period | ||
Revenue | Cost of sales | Revenue | Cost of sales | |
Main business | 1,778,783,417.92 | 476,160,908.86 | 1,286,870,280.06 | 399,897,158.60 |
Other businesses | 144,750,859.24 | 48,992,546.57 | 149,950,265.32 | 44,272,476.43 |
Total | 1,923,534,277.16 | 525,153,455.43 | 1,436,820,545.38 | 444,169,635.03 |
(2). Incomes from contracts
√Applicable □Not applicable
Unit: RMB
Classified by type of contract | Total |
Types of goods | |
The use of shops in Yiwu Market and its supporting services | 1,670,027,970.13 |
Hotel accommodation and catering services | 124,274,970.80 |
Revenue from use fees | 5,806,042.94 |
Other services | 203,372.73 |
Classified by business area | |
Chinese mainland | 1,800,312,356.60 |
Classified by contract period | |
Revenue confirmed at certain time point | |
Hotel catering services | 68,526,860.48 |
Other services | 138,903.39 |
Revenue confirmed during certain time period | |
The use of shops in Yiwu Market and its supporting services | 1,670,027,970.13 |
Hotel accommodation services | 55,748,110.32 |
Revenue from use fees | 5,806,042.94 |
Other services | 64,469.34 |
Total | 1,800,312,356.60 |
Description of the income from contracts:
√Applicable □Not applicable
The income recognized in the current year and included in the opening book value of contractualliabilities is as follows:
Unit: RMB
Type of contract | Current period |
The use of shops in Yiwu Market and its supporting services | 1,616,326,980.74 |
Hotel accommodation service | 7,275,513.89 |
Other services | 64,469.34 |
Total | 1,623,666,963.97 |
(3). Contract performance obligations
√Applicable □Not applicable
The information related to the performance obligations of the Group is as follows:
The use of shops in Yiwu Market and its supporting servicesThe contractual performance obligation is fulfilled when providing the use of shops in YiwuMarket and the supporting services for business. For the use of shops in Yiwu Market and thesupporting services for business, the progress of contract performance is determined based onthe number of using days of the shops. Customers usually need to pay in advance before the useof shops in Yiwu Market and the supporting services for business are provided.Hotel accommodation businessThe performance obligation is fulfilled when providing hotel accommodation services. Forthe hotel accommodation business, the progress of contractual performance is determinedbased on the number of days of stay. For hotel accommodation services, a partial deposit iscollected from the customer first, and the remaining contract price is usually collected upon thecompletion of the hotel accommodation services.
Hotel catering businessThe performance obligation is fulfilled when the hotel catering services are provided. Thecontract price for hotel catering services is usually charged when the hotel catering services areperformed.
Fixed -time paid funding servicesThe performance obligation is fulfilled when the fixed-time paid funding service is provided.For the fixed-time paid funding service, the progress of contractual performance is determinedbased on the number of using days the fund. For the fixed-time paid funding service, the contractprice is usually charged regularly as agreed in the contract.
(4). Amortization to remaining contract performance obligations
□Applicable √Not applicable
Other notes:
On June 30, 2023, the transaction price allocated to the remaining performance obligationswas RMB 2,213,236,702.02. The Group expects that this amount will be recognized as anincome in the coming 5 years with the progress of relevant service provision.
5. Investment income
√Applicable □Not applicable
Unit: RMB
Item | Amount in the current period | Amount in the previous period |
Income from long-term equity investment calculated with the equity method | 1,040,883,650.78 | 753,179,755.40 |
Investment income from disposal of long-term equity investment | 1,296,480.56 | 883,324.49 |
Investment income from disposal of held-for-trading financial assets | 13,602.55 | 29,078.03 |
Return on investment during investment holding period of other non-current financial assets | 2,110,591.00 | - |
Total | 1,044,304,324.89 | 754,092,157.92 |
Other notes:
Nil
6. Other
□Applicable √Not applicable
XVIII. Supplements
1. Detailed statement of current non-recurring profits and losses
√Applicable □Not applicable
Unit: RMB
Item | Amount | Remarks |
Profits and losses from the disposal of non-current assets | 177,251,158.26 | |
Government grants that are recognized in the current Profits and losses, excluding the government grants that are closely related to the normal operation of the Company and are provided in a fixed amount or quantity continuously according to the national polices and certain standards | 14,351,408.58 | |
Cash occupation fees charged from non-financial enterprises that are recognized in the current Profits and losses | 17,419,324.72 | |
Profits and losses from changes in fair value of held-for-trading financial assets, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, and investment income from the disposal of held-for-trading financial assets, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt instruments, except for effective hedging during the ordinary course of business | -6,192,155.35 | |
Profits and losses arising from external entrusted loans | 1,252,476.06 | |
Net income from other non-operating activities | 3,021,986.99 | |
Less: effect of income tax | 47,508,712.07 | |
Effect of minority interest (after-tax) | 627,665.12 | |
Total | 158,967,822.07 |
Explanations shall be made for the non-recurring profits and losses identified by the Companyaccording to the Explanatory Announcement No. 1 on Information Disclosure by CompaniesPublicly Offering Securities – Non-recurring profits and losses, and for the Company identifyingthe non-recurring profits and losses enumerated in the Explanatory Announcement No. 1 onInformation Disclosure by Companies Publicly Offering Securities – Non-recurring profits andlosses as recurring profits and losses.
□Applicable √Not applicable
2. ROE and EPS
√Applicable □Not applicable
Profits in the reporting period | Weighted average ROE (%) | EPS | |
Basic EPS | Diluted EPS | ||
Net profits attributable to common shareholders of the Company | 12.30 | 0.37 | 0.37 |
Net profits attributable to common shareholders of the Company after deducting non-recurring gains and losses | 11.32 | 0.34 | 0.34 |
3. Differences in accounting data between foreign and Chinese accounting standards
□Applicable √Not applicable
4. Other
□Applicable √Not applicable
Chairman of Board Of Directors: ZHAO Wenge
Date of approving by the board of directors for release: August 19, 2023
Amendment
□Applicable √Not applicable