Hangzhou Robam Appliances Co., Ltd.
Semi-Annual Report 2024
August 2024
Chapter 1 Important Notes, Contents and Interpretations
The Board of Directors, the Board of Supervisors, as well as the directors,supervisors and senior management of Hangzhou Robam Appliances Co., Ltd.(the Company) hereby guarantee that there are no false representations,misleading statements, or material omissions in this Semi-Annual Report (“theReport”), and are severally and jointly liable for the authenticity, accuracy andcompleteness of the information contained herein.Ren Jianhua, the head of the Company, Zhang Guofu, the person incharge of the Company’s accounting, and Zhang Guofu, the head of theaccounting department (the accountant in charge) hereby declare and warrantthat the financial report contained in the Report is authentic, accurate, andcomplete.
All the directors attended a Board meeting during which they reviewed theReport.
The Company is exposed to risks such as fluctuations in the real estatemarket policies, fluctuations in raw material prices and intensified marketcompetition. Investors are advised to be aware of the investment risks.
The Company's profit distribution plan approved by the Board ofDirectors is as follows: based on the total of 944,127,316 shares, a cashdividend of RMB 5 (inclusive of tax) will be distributed to all shareholders forevery 10 shares held. No bonus shares (inclusive of tax) will be issued, andthere will be no capital reserve converted into capital stock.
Contents
Chapter 1 Important Notes, Contents and Interpretations ...... 2
Chapter 2 Company Profile and Major Financial Indicators ...... 6
Chapter 3 Management Discussion and Analysis ...... 9
Chapter 4 Corporate Governance ...... 21
Chapter 5 Environmental and Social Responsibilities ...... 28
Chapter 6 Significant Matters ...... 29
Chapter 7 Changes in Shares and Shareholders ...... 33
Chapter 8 Preferred Shares ...... 38
Chapter 9 Bonds ...... 39
Chapter 10 Financial Report ...... 40
Documents Available for Reference
1. Financial statements signed and sealed by the legal representative, the person in charge of accounting of the Company, and theperson in charge of the accounting firm.
2. Original copies of documents and announcements of the Company published in the newspaper designated by China SecuritiesRegulatory Commission during the Reporting Period.
3. The Semi-Annual Report 2024 signed by the legal representative on behalf of the Company.
4. Other documents.
Interpretations
| Item | refer(s) to | Contents |
| The Company, Company, Robam Appliances | refer(s) to | Hangzhou Robam Appliances Co., Ltd. |
| MingQi | refer(s) to | Hangzhou MingQi Electric Co., Ltd. |
| Kinde | refer(s) to | Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. |
| Jinhe Electric Appliance | refer(s) to | Hangzhou Jinhe Electric Appliances Co., Ltd. |
| Robam Group | refer(s) to | Hangzhou Robam Industrial Group Co., Ltd., controlling shareholder of the Company |
| The reporting period | refer(s) to | The first half of 2024 |
| AVC | refer(s) to | Beijing All View Cloud Data Technology Co., Ltd. |
Chapter 2 Company Profile and Major Financial IndicatorsI. Company Profile
| Stock abbreviation | Robam | Stock code | 002508 |
| Stocks traded on | Shenzhen Stock Exchange | ||
| Chinese name of the Company | Hangzhou Robam Appliances Co., Ltd. | ||
| Short Chinese name of the Company (if any) | Robam | ||
| Short English name of the Company (if any) | ROBAM | ||
| Legal representative of the Company | Ren Jianhua | ||
II. Contact Person and Contact Information
| Secretary of the Board of Directors | Representative of securities affairs | |
| Name | Wang Gang | |
| Contact address | No. 592, Linping Avenue, Linping District, Hangzhou City, Zhejiang Province | |
| Telephone | 0571-86187810 | |
| Fax | 0571-86187769 | |
| wg@robam.com |
III. Other Information
1. Contact information
Whether the registered address, office address and zip code as well as the website and email address of the Company changedduring the reporting period?
□Applicable ?Not applicable
There were no changes in the registered address, office address and zip code as well as the website and email address of theCompany during the reporting period. For details, please refer to the Annual Report 2023.
2. Information disclosure and filing location
Whether the information disclosure and filing locations changed during the reporting period?
□Applicable ?Not applicable
During the reporting period, there were no changes in the website of stock exchange and name and website of media designatedfor information disclosure of the semi-annual report and the location for filing the semi-annual report of the Company. For details,please refer to the Annual Report 2023.
3.Other information
Whether other relevant information changed during the reporting period?
□Applicable ?Not applicable
IV. Key Accounting Data and Financial IndicatorsWhether the Company needs to retroactively adjust or restate the accounting data of previous years?
□ Yes ?No
| The reporting period | The same period last year | YoY change | |
| Operating income (RMB) | 4,729,354,071.80 | 4,934,869,800.15 | -4.16% |
| Net profit attributable to shareholders of the listed company (RMB) | 759,358,954.74 | 829,718,350.69 | -8.48% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring gains/losses (RMB) | 657,758,277.88 | 746,691,977.38 | -11.91% |
| Net cash flow from operating activities (RMB) | 414,005,591.39 | 959,732,853.23 | -56.86% |
| Basic EPS (RMB/share) | 0.80 | 0.87 | -8.05% |
| Diluted EPS (RMB/share) | 0.80 | 0.87 | -8.05% |
| Weighted average return on net assets | 7.01% | 8.24% | A decrease of 1.23% |
| End of the reporting period | End of last year | Change | |
| Total assets (RMB) | 15,983,377,229.74 | 16,779,531,315.72 | -4.74% |
| Net assets attributable to shareholders of the listed company (RMB) | 10,818,961,564.20 | 10,522,938,731.68 | 2.81% |
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Whether there are differences in the net profit and net asset disclosed in the Financial Report underInternational Accounting Standards (IAS) and China’s accounting standards?
□Applicable ?Not applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under IAS and China’s accounting standardsduring the reporting period.
2. Whether there are differences in the net profit and net asset disclosed in the Financial Report underforeign accounting standards and China’s accounting standards during?
□Applicable ?Not applicable
There is no difference in the net profit and net asset disclosed in the Financial Report under foreign accounting standards andChina’s accounting standards during the reporting period.
VI. Items and Amounts of Non-recurring Gains and Losses?Applicable □Not applicable
In RMB
| Item | Amount | Description |
| Gains and losses on disposal of non-current assets (including the written-off part of the provision for asset impairment accrued) | -762,764.73 | |
| Government subsidies included in current gains and losses (excluding government subsidies closely related to the Company's normal business, enjoyed in line with national policy and established standards, and having a sustained impact on the Company's gains and losses). | 47,398,220.55 | |
| Reversal of impairment provision for accounts receivable tested for impairment separately | 76,760,426.90 | |
| Other non-operating revenues and expenses except the above items | -2,205,082.29 | |
| Less: Affected amount of income tax | 18,416,180.25 | |
| Affected amount of minority shareholders’ equity (after tax) | 1,173,943.32 | |
| Total | 101,600,676.86 |
Other items of gains and losses meeting the definition of non-recurring gains and losses:
□Applicable ?Not applicable
The Company does not have other items of gains and losses meeting the definition of non-recurring gains and lossesExplanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory Announcement No. 1on Information Disclosure for Companies Offering Their Securities to the Public — Non-recurring Gains and Losses (referred toas “Announcement No.1”) are defined as recurring profits and losses?Applicable □Not applicable
| Item | Amount (in RMB) | Reasons |
| VAT exemption, reduction or refund | 37,394,570.29 | National tax policy, regular business |
| Refund of individual income tax handling fee | 421,243.63 | National tax policy, regular business |
| Total | 37,815,813.92 |
Chapter 3 Management Discussion and AnalysisI. Main Businesses during the Reporting PeriodIn the first half of 2024, the domestic real estate industry remained in a phase of clearing and adjustment. Thekitchen appliance industry is affected by intensified market competition and a decline in consumer spendingwillingness, leading to a general slowdown in market growth and significant disparities among different channels. Interms of the retail channel, as shown in AVC monthly data report based on offline retail market monitoring (“AVCOffline Report”), the year-on-year (YoY) growth of the retail sales of the main categories of kitchen appliances, i.e.range hoods and gas stoves, registered 6.4% and 7.8% respectively. In terms of the e-commerce channel, as shown inAVC monthly data report based on online retail market monitoring (“AVC Online Report”), the YoY decline of theretail sales of the kitchen appliances package registered 6.0%. In terms of the developer channel, as shown in theAVC Real Estate Big Data (“AVC Real Estate Report”), due to the sluggish sales of new houses/apartments, therewere 301,500 sets of newly launched houses/apartments with fine decoration in the first half of the year, a YoYdecrease of 19.2%; the penetration rate of fine decoration projects was 35.1%, a YoY decrease of 1.7 percentagepoints, both showing a continuous downward trend. In the first half of 2024, the completed residential area was
192.59 million square meters, a decrease of 21.7% compared to the high base under the "ensuring housing projectdelivery" policy last year. Consequently, the new demand in the kitchen appliance industry has significantly declined.Facing numerous adverse factors, Robam, has maintained its leading position in the industry by activelypursuing development under the annual business philosophy of “Dreaming Big, Evolving Boldly - Constructing aNew Blueprint for the Entire Cooking Process”. According to the AVC Offline Report, the retail sales and its marketshare of Robam range hood were 31.9% and 26.1% respectively, while the retail sales and its market share of Robamgas stove were 31.3% and 22.9% respectively. As shown in the AVC Online Report, the retail sales and its marketshare of Robam kitchen appliance package were 27.0% and 20.9% respectively; all the above indexes ranking first inthe industry. In the first half of 2024, the Company achieved a revenue of RMB 4.729 billion, representing a YoYdecrease of 4.16%. The net profit attributable to shareholders of the listed company was RMB 759 million, a YoYdecrease of 8.48%.
As of June 30, 2024, according to AVC Offline Report, the market shares and market rankings of theCompany’s main product categories in terms of offline retail sales are shown in the following table:
Range hoods
| Range hoods | Gas stove | Disinfection cabinet | Built-in Combi-steam oven | Built-in Electric steam oven | Built-in Electric baking oven | Dishwasher | Integrated stove |
| 31.9% | 31.3% | 19.8% | 26.8% | 20.9% | 17.6% | 18.4% | 37.6% |
| 1 | 1 | 2 | 1 | 3 | 2 | 2 | 1 |
As of June 30, 2024, according to AVC Online Report, the market shares and market rankings of the Company’smain product categories in terms of online retail sales are shown in the following table:
| Kitchen appliance package | 2-piece package of range hood and stove | Range hoods | Gas stove | Built-in combi-steam oven | Built-in electric steam oven |
| 27.0% | 28.2% | 16.3% | 11.9% | 11.4% | 17.5% |
| 1 | 1 | 1 | 2 | 3 | 3 |
As of June 30, 2024, according to AVC Real Estate Report, the market share of Robam range hoods in the finedecoration channel was 23.4%, ranking second in the industry.
In the first half of 2024, the technology sector continued to lead industry innovation by focusing on three keyareas: product innovation, digital leadership, and management enhancement, thereby driving the implementation ofcomprehensive cooking chain solutions. Throughout the first half of the year, the Company continued to develop andlaunch new products, with a particular focus on the research and market introduction of the "Chic Series" product lineand several core products. Significant breakthroughs were achieved in AI cooking models, the development of adigital kitchen appliance ecosystem, voice and NLP technologies, and the IoT platform. Additionally, the Companyimproved its internal standardization processes to enhance its professionalism in management. As of June 30, 2024,the Company has granted a total of 5,064 authorized patents, including 261 invention patents. The Company alsoinvolved in the formulation of 155 standards, leading the development of 42 of them, which included 2 internationalstandard proposals and 4 national standards. In February, the international standard proposal for range hoods, led bythe Company under the International Electrotechnical Commission (IEC), was officially released. In addition, thedigital kitchen appliance combi-steam oven iH1 and the Robam high-performance integrated stove black crystallinesteel 9ZC23 respectively won the AWE Top Award and AWE Design Award.
In the first half of 2024, the marketing sector remained committed to a user-centric approach, continuouslyadvancing business and organizational restructuring. The Company steadfastly promoted the high-end branding ofRobam and the popularization of MingQi brand, facilitating coordinated progress across the multi-brand matrix tocomprehensively cater to diverse needs of users. In retail channels, the focus was on user-oriented organizationalupgrades. The Company has diligently enhanced the all-channels user engagement system, and significantlystrengthened store operations. At the same time, the Company actively responded to China's trade-in policy bylaunching a series of initiatives, such as "half-price for new ones with old kitchen appliances". Additionally, the
Company offered services such as “same-day delivery and installation, with replacement in as fast as 2 hours” andfree cabinet renovation to address any concerns of customers they may have about upgrading their appliances.Against the backdrop of a generally declining new housing market, the Company made significant efforts to expandthe existing market, which helped the retail channels achieve growth against the trend in the first half of the year. Inthe e-commerce channel, the Company conducted in-depth analysis of users' needs, actively engaged in externalpromotion, and effectively utilized in-platform traffic resources. By leveraging multi-category collaboration, theCompany improved the structure and quality of channel sales. In the developer channel, the Company expandedproduct categories to scale up sales, strictly controlled channel risks, optimized customer structure, and advancedhigh-end breakthroughs and diversified innovation. In the overseas market, the Company steadily promoted its goingglobal strategy and advanced brand internationalization efforts.In the first half of 2024, the production sector, with the core of "Consolidating Efforts to Restructure andConnect with the Future," achieved continuous innovation through the synergy of strategic planning, streamlinedprocesses and consolidated efforts. The sector made significant progress in three main areas: user focus, operationalefficiency, and transformative change. This approach facilitated business evolution, organizational thinkingadvancement, and the development of new organizational capabilities, all aimed at meeting users' needs andpositioning the Company as one of the most competitive benchmarks in China's manufacturing industry. Startingfrom the principle of "User First," the Company aimed to build differentiated manufacturing and supply capabilities,enhanced quality control, and improved product delivery. Focused on operational efficiency, the Company developedrefined cost management capabilities and established mechanisms for the effective utilization of resources.Embracing innovation and leading development, the Company drove end-to-end integrated supply chaintransformation, reconstructed digital manufacturing capabilities, and enhanced digital supply chain management. Thisapproach supported business transformation and lean innovation, positioning the Company as a leader inmanufacturing excellence.In the first half of 2024, the brand sector continued to anchor itself in the cooking industry, adhering to a path ofintegrating technology with cultural development. Embracing its new identity as a "comprehensive solution providerfor the entire cooking process", the sector redefined the meaning and value of cooking while striving to establishitself as the leading high-end kitchen appliance brand in China. Focusing on the comprehensive cooking process anddigital cooking technology experience, the sector showcased its multi-brand matrix under the theme "Welcome to theDigital Cooking World" at 2024 AWE (Appliance and Electronics World Expo). In addition, Robam Appliances heldthe 2024 Robam Appliances Range Hood Ultra-Slim Trend Conference, and released the Double Ultra-slim U Series
Range Hood. In collaboration with TikTok Shop's Super Brand Day, the Company held the "Philosophy in the ChicKitchen" new product launch event. The highlight of the event was the introduction of the Chic Series G1 set,followed by the comprehensive upgrade and launch of the Guangyan S1 Plus dishwasher disinfector. In March, theCompany collaborated with the Color Research Institute of China Academy of Art to create the artist version of gaswater heater Chuan HT730. This product was showcased at the "Great Rivers, Ultimate Beauty" art exhibition held atthe K11 Art Mall in Shanghai. In April, the Company partnered with Xiaohongshu's IP "Home Life DesignCompetition" to co-create the "Exploring Kitchen Aesthetics". At the same time, the Company once again joinedforces with "The Treasured Voice 5" to present a crossover event that blends music and kitchen experiences, pushingthe boundaries of traditional kitchen concepts. At the "Return to the Future" brand launch event held in June, theCompany unveiled China's first AI cooking model, "God of Cookery", and introduced a new brand value —"EnjoyCreation". The brand and retail store images were comprehensively updated. Additionally, the brand departmentcollaborated with the Eidos Humanities Society to host an event, where renowned scholars discussed the relationshipsbetween users and society, technology and civilization, contributing to the preservation and advancement of cookingculture.
In the era where the kitchen appliance industry witnesses more fierce competitions in the existing market, theCompany will continue to commit to its cooking beliefs, and uphold a dual-engine approach, driving business modeltransformation through both digital kitchen appliances and user operations. The Company will persist in optimizingits dual-brand operation model with Robam and MingQi.
In the first half of 2024, the Company introduced the AI-powered cooking model "God of Cookery" in the realmof digital kitchen appliances. This innovation not only advances the hardware iteration but also strengthens theunderlying software support, exploring the cutting-edge application of AI technology in the cooking field, andproviding users with tailor-made cooking solutions. Unlike traditional kitchen appliances that serve merely ashardware tools, "God of Cookery" functions as an intelligent partner capable of understanding users' needs, emotions,and habits. It integrates smart planning across kitchen appliances based on users' roles, identities, emotions, actions,health conditions, and dietary preferences, delivering a comprehensive solution from ingredient selection to cookingprocesses, and achieving a personalized cooking experience for each individual. This represents a fusion of"technology + culture" by Robam Appliances and marks another milestone in the pursuit of developing newproductive forces, following the creation of the industry's first "unmanned factory" and the launch of the first "digitalkitchen appliances" set.
In the first half of 2024, in terms of user operations, the Company continued to build a systematic user full-process data asset and experience feedback system to support the transformation of the Company's operations fromchannel-oriented to user-centric. The Company has successfully established a Customer Data Platform (CDP),creating a comprehensive system for user lifecycle data and a robust feedback mechanism. This platform allows forbroader capture of user behavior, which is integrated into our analytical framework. Additionally, the Company isexpanding user touchpoints through diversified channels such as the ROKI app, WeChat mini-programs, and WeComcommunity, focusing on cooking as a core interest to attract and engage users, thus building a private community thatstimulates user engagement, interaction, and creativity. The Company is also advancing the Robam Appliances NetPromoter Score (NPS) evaluation framework as a key component of future operational metrics, which will helpaccurately measure and enhance reputation from users, thereby developing a more comprehensive and effective userfeedback and summary system.In the first half of 2024, the MingQi brand was revitalized with a new focus on "New Pragmatic KitchenAppliances". Targeting the mid-end market, the brand adheres to three core standards: "Excellent Performance,""Practical Functions," and "Durable Quality." The new product forms are designed to effectively cater to the needs ofa wider audience, addressing the demand for high-quality, cost-effective, stable, and long-lasting products forpragmatic consumers. De Dietrich brand continued to receive orders from the developer channel and had alreadyestablished a presence in the luxury house decoration market.In the first half of 2024, the Company continued to gain recognition from the capital market in terms ofcorporate governance, information disclosure and shareholder returns. It has been rated as A level (excellent) in theinformation disclosure assessment on listed companies by the Shenzhen Stock Exchange for ten consecutive years.Meanwhile, based on improvement and excellent performance in corporate governance and employee welfareprograms, the Company is rated as BBB level in terms of MSCI ESG ratings. The Company has established a long-term incentive mechanism and launched the 2024 Stock Option Incentive Plan in the first half of the year. In responseto the long-term support of investors, the Company has introduced the Three-Year Shareholder Return Plan (2024-2026), which guarantees a special annual dividend to provide investors with stable and substantial returns. 2024marks a pivotal year in the Company's new three-year strategy. The Company will continue to focus on cooking as itscore, constantly aligning with user needs to enhance both the software and hardware capabilities of its products. Theaim is to convey the technological value and humanistic care of the products, offering consumers a diverse cookingexperience. By navigating through economic cycles, the Company strives to achieve long-term, stable, and high-quality growth.
II. Analysis of Core CompetitivenessThere is no significant change in the Company’s core competitiveness during the reporting period. The Company’s corecompetitiveness is mainly reflected in its high-end brand positioning, R&D capability for continuous innovation, comprehensiveand efficient operation capability, as shown in the Annual Report 2023.III. Analysis of Main BusinessOverviewSee the relevant content in the “I. Main Businesses during the Reporting Period”.Year-on-year changes in key financial data
In RMB
| The reporting period | The same period last year | YOY change | Reason for change | |
| Operating income | 4,729,354,071.80 | 4,934,869,800.15 | -4.16% | |
| Operating costs | 2,417,617,979.67 | 2,372,095,971.50 | 1.92% | |
| Sale expenses | 1,189,754,400.18 | 1,360,821,373.41 | -12.57% | |
| Administrative expenses | 214,267,083.09 | 203,425,816.25 | 5.33% | |
| Financial expense | -95,390,413.45 | -68,958,985.09 | Not Applicable | |
| Income tax expense | 137,595,570.63 | 151,830,927.51 | -9.38% | |
| R&D input | 178,373,820.48 | 172,734,141.15 | 3.26% | |
| Net cash flow from operating activities | 414,005,591.39 | 959,732,853.23 | -56.86% | The slowdown in payment collection in the period was due to the increase in the settlement of matured bank acceptance bills. |
| Net cash flow from investment activities | -346,629,453.74 | 63,023,246.17 | Not Applicable | |
| Net cash flow from financing activities | -928,670,536.81 | -443,777,479.65 | Not Applicable | Due to the two dividend distributions in the period: the 2023 annual dividend and the 2023 special dividend. |
| Net increase in cash and cash equivalents | -861,277,057.45 | 581,455,567.34 | Not Applicable |
Major changes on profit composition or profit resources in reporting period
□Applicable ?Not applicable
No major changes on profit composition or profit resources occurred in reporting period
Composition of operating income
In RMB
| The reporting period | The same period last year | YOY change | |||
| Amount | % of operating income | Amount | % of operating income | ||
| Total operating income | 4,729,354,071.80 | 100% | 4,934,869,800.15 | 100% | -4.16% |
| By industry | |||||
| Kitchen and bathroom appliances | 4,604,808,674.29 | 97.37% | 4,793,316,106.76 | 97.13% | -3.93% |
| Other businesses | 124,545,397.51 | 2.63% | 141,553,693.39 | 2.87% | -12.02% |
| By product category | |||||
| Category 1 | |||||
| Incl: Range hood | 2,258,608,055.24 | 47.76% | 2,324,953,220.91 | 47.11% | -2.85% |
| Gas stove | 1,169,304,461.08 | 24.72% | 1,183,171,484.38 | 23.98% | -1.17% |
| Disinfection cabinet | 179,381,531.42 | 3.79% | 208,586,939.17 | 4.23% | -14.00% |
| Category 2 | |||||
| Incl: All-purpose oven | 282,119,593.77 | 5.97% | 317,829,778.22 | 6.44% | -11.24% |
| Steam oven | 27,610,887.93 | 0.58% | 33,863,980.47 | 0.69% | -18.47% |
| Baking oven | 25,506,949.12 | 0.54% | 33,333,913.56 | 0.68% | -23.48% |
| Category 3 | |||||
| Incl: Dishwasher | 318,347,953.95 | 6.73% | 331,655,582.50 | 6.72% | -4.01% |
| Water purifier | 14,653,776.44 | 0.31% | 19,178,086.59 | 0.39% | -23.59% |
| Water heater | 110,776,505.83 | 2.34% | 96,459,546.77 | 1.95% | 14.84% |
| Integrated stove | 183,045,699.18 | 3.87% | 204,932,714.33 | 4.15% | -10.68% |
| Other small appliances | 35,453,260.33 | 0.76% | 39,350,859.86 | 0.80% | -9.90% |
| Other operating income | 124,545,397.51 | 2.63% | 141,553,693.39 | 2.87% | -12.02% |
| By region | |||||
| East China-Main Products | 2,240,767,978.16 | 47.38% | 2,465,263,265.33 | 49.96% | -9.11% |
| East China-Others | 124,470,315.80 | 2.63% | 141,553,693.39 | 2.87% | -12.07% |
| South China | 524,496,954.45 | 11.09% | 505,445,895.60 | 10.24% | 3.77% |
| Central China | 472,330,747.34 | 9.99% | 414,023,176.19 | 8.39% | 14.08% |
| North China | 516,471,998.11 | 10.92% | 519,977,554.25 | 10.54% | -0.67% |
| Northeast China | 238,293,211.47 | 5.04% | 264,181,426.54 | 5.35% | -9.80% |
| Northwest China | 238,856,066.29 | 5.05% | 268,067,121.49 | 5.43% | -10.90% |
| Southwest China | 344,973,086.06 | 7.29% | 328,679,596.66 | 6.66% | 4.96% |
| Overseas | 28,693,714.12 | 0.61% | 27,678,070.70 | 0.56% | 3.67% |
Industries, products and regions accounting for more than 10% of the Company’s operating income or profit?Applicable □Not applicable
In RMB
| Operating income | Operating costs | Gross margin | YoY change in operating income | YoY change in operating costs | YoY change in the gross margin | |
| By industry | ||||||
| Kitchen and bathroom appliances | 4,604,808,674.29 | 2,381,821,304.07 | 48.28% | -3.93% | 3.33% | -3.64% |
By product category
| By product category | ||||||
| Range hoods | 2,258,608,055.24 | 1,111,513,185.01 | 50.79% | -2.85% | 6.47% | -4.31% |
| Gas stove | 1,169,304,461.08 | 549,521,919.73 | 53.00% | -1.17% | 6.84% | -3.52% |
| By region | ||||||
| East China-Main Products | 2,240,767,978.16 | 1,125,601,403.28 | 49.77% | -9.11% | 0.34% | -4.73% |
| South China | 524,496,954.45 | 283,031,848.91 | 46.04% | 3.77% | 8.14% | -2.18% |
| North China | 516,471,998.11 | 249,036,733.50 | 51.78% | -0.67% | 7.04% | -3.47% |
Main business data of the Company in the recent reporting period according to adjusted statistical caliber at the end of thereporting period is applied in case that the statistical caliber of such data is adjusted during the reporting period
□Applicable ?Not applicable
IV. Analysis of Non-core Business
□Applicable ?Not applicable
V. Analysis of Assets and Liabilities
1. Significant changes in assets composition
In RMB
| End of the reporting period | End of last year | Change in percentage | Note on significant changes | |||
| Amount | % of total assets | Amount | % of total assets | |||
| Cash and cash equivalents | 1,147,837,731.76 | 7.18% | 1,985,050,745.11 | 11.83% | -4.65% | |
| Accounts receivable | 1,863,130,927.89 | 11.66% | 1,810,015,596.33 | 10.79% | 0.87% | |
| Inventory | 1,399,070,238.66 | 8.75% | 1,524,274,720.24 | 9.08% | -0.33% | |
| Investment real estate | 87,514,098.16 | 0.55% | 91,136,832.31 | 0.54% | 0.01% | |
| Long-term equity investment | 4,978,936.31 | 0.03% | 8,427,450.24 | 0.05% | -0.02% | |
| Fixed assets | 1,664,948,226.73 | 10.42% | 1,720,724,257.46 | 10.25% | 0.17% | |
| Construction in process | 444,829,440.01 | 2.78% | 359,768,699.68 | 2.14% | 0.64% | |
| Right-of-use assets | 11,204,929.62 | 0.07% | 13,802,458.98 | 0.08% | -0.01% | |
| Short-term loans | 115,003,320.70 | 0.72% | 95,003,320.70 | 0.57% | 0.15% | |
| Contract liabilities | 777,554,890.02 | 4.86% | 1,019,942,923.58 | 6.08% | -1.22% | |
| Lease liabilities | 10,343,459.83 | 0.06% | 10,750,792.90 | 0.06% | 0.00% | |
2. Major overseas assets
□Applicable ?Not applicable
3.Assets and liabilities measured at fair value
□Applicable ?Not applicable
4.Restricted asset rights by the end of the reporting period
| Item | Ending book value | Reasons for limit |
| Cash and cash equivalents | 89,105,875.26 | L/G margin |
| Cash and cash equivalents | 41,826,555.86 | Bill acceptance margin |
| Cash and cash equivalents | 16,000.00 | ETC security deposits |
| Fixed assets | 135,979,588.89 | Mortgage loan |
| Intangible assets | 31,222,615.70 | Mortgage loan |
| Total | 298,150,635.71 | — |
VI. Analysis of Investment
1. Overview
□Applicable ?Not applicable
2. Major equity investments obtained during the reporting period
□Applicable ?Not applicable
3. Major ongoing non-equity investments during the reporting period
□Applicable ?Not applicable
4.Financial asset investment
(1) Securities investment
□Applicable ?Not applicable
The Company had no securities investment during the reporting period.
(2) Derivative investment
□Applicable ?Not applicable
The Company had no derivatives investment during the reporting period.
5. Use of the raised funds
□Applicable ?Not applicable
The Company did not use the raised funds during the reporting period.
VII. Sale of Major Assets and Equities
1. Sale of major assets
□Applicable ?Not applicable
The Company did not sell major assets during the reporting period.
2. Sale of major equities
□Applicable ?Not applicable
VIII. Analysis of Main Holding and Joint-stock Companies?Applicable □Not applicableMain subsidiaries and joint-stock companies affecting more than 10% of the Company’s net profit
In RMB
| Company name | Company type | Main business | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Beijing Robam Appliances Sales Co., Ltd. | Subsidiary | Sales of kitchen appliances | 5,000,000 | 70,521,280.46 | 33,404,842.29 | 107,209,197.15 | -5,224,274.24 | -4,865,036.40 |
| Shanghai Robam Appliances Sales Co., Ltd. | Subsidiary | Sales of kitchen appliances | 5,000,000 | 84,299,627.57 | -39,303,847.26 | 154,221,576.08 | -10,186,526.30 | -10,248,862.74 |
| Hangzhou MingQi Electric Co., Ltd. | Subsidiary | Sales of kitchen appliances | 50,000,000 | 206,182,234.82 | 40,060,187.91 | 228,662,308.30 | 3,707,142.71 | 3,742,645.56 |
| Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. | Subsidiary | Sales of kitchen appliances | 32,653,061 | 441,361,739.93 | 201,847,845.91 | 52,276,506.48 | -17,024,719.34 | -16,380,401.60 |
| Hangzhou Jinhe Electric Appliances Co., Ltd. | Subsidiary | Sales of kitchen appliances | 10,000,000 | 145,878,350.96 | 24,129,921.90 | 138,025,762.14 | 2,574,042.61 | 1,563,020.69 |
Acquisition and disposal of subsidiaries during the reporting period
□Applicable ?Not applicable
IX. Structured Entities Controlled by the Company
□Applicable ?Not applicable
X. Risks and Responses
(1) Risk of fluctuations in the real estate market
The Company has been engaged in the kitchen appliances business for a long time, offering various kitchen appliances, suchas range hoods, gas stoves, dishwashers, combi-steam oven, disinfection cabinets, integrated stoves, etc. The demands for kitchenappliances are closely related to the kitchen decoration, with certain "decoration" and "furniture" attributes. At present, the demandfor our main products is still closely related to the real estate market. The Company is able to resist the market fluctuations byvirtue of its market leadership, although fluctuations in the real estate market will still have an impact on the Company’s operatingperformances.
(2) Risk of price fluctuation of raw materials
The main raw materials of the Company’s equipment are stainless steel, cold-rolled sheet, copper and glass, etc., whose pricefluctuations will directly affect the cost of the Company’s products and in turn have an impact on its profitability.
(3) Risk of intensified market competition
In recent years, due to the tightening macro environment of the kitchen appliance industry, the continuous increase inindustry concentration, the comprehensive brands' increasing investment in the kitchen appliance market and the decline in people'consumption willingness, the market competition in the kitchen appliances industry has become increasingly fierce, and theintensification of market competition will have a certain impact on the Company’s operating performances.XI. Implementation of the "Dual Improvement in Quality and Returns" Action PlanHas the Company disclosed the announcement of the "Dual Improvement in Quality and Returns" action plan?
□ Yes ?No
Chapter 4 Corporate Governance
I. Annual General Meeting of Shareholders and Extraordinary General Meeting ofShareholders during the Reporting Period
1. Shareholders’ meeting during the reporting period
| Session of meeting | Type of meeting | Proportion of attending investors | Date of meeting | Date of disclosure | Resolutions |
| 2023 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 64.28% | May 16, 2024 | May 17, 2024 | The Announcement of Resolutions of the 2023 Annual General Meeting of Shareholders of Robam Appliances (Announcement No. 2024-031) |
| The first extraordinary general meeting of shareholders in 2024 | Extraordinary general meeting of shareholders | 62.46% | June 19, 2024 | June 20, 2024 | The Announcement of Resolutions of the 2024 First Extraordinary General Meeting of Shareholders of Robam Appliances (Announcement No. 2024-045) |
2. Preferred shareholders with voting rights recovered requested to convene an extraordinary generalmeeting of shareholders
□Applicable ?Not applicable
II. Changes in Directors, Supervisors and Senior Management
□Applicable ?Not applicable
There was no change in directors, supervisors, and senior management of the Company during the reporting period. For details,please refer to the Annual Report 2023.III. Profit Distribution and Conversion of Capital Reserve into Capital Stock during theReporting Period?Applicable □Not applicable
| Number of bonus shares per 10 shares (shares) | 0 |
| Dividend per 10 shares (RMB) (including tax) | 5 |
| The share capital base for the distribution plan (shares) | 944,127,316 |
| Cash dividend amount (RMB) (including tax) | 472,063,658.00 |
| Cash dividend amount by other means (e.g., share repurchase) (RMB) | 0.00 |
| Total cash dividend amount (including other methods) (RMB) | 472,063,658.00 |
| Distributable profit (RMB) | 9,349,860,281.22 |
Proportion of total cash dividends (including other methods) tototal profit distribution
| Proportion of total cash dividends (including other methods) to total profit distribution | 100% |
| Cash dividend distribution for this time | |
| For businesses in the growth stage with significant capital expenditure plans, the cash dividend proportion in the current profit distribution should be at least 20% | |
| Detailed explanation of profit distribution and capital reserve conversion plan | |
| As of June 30, 2024, the undistributed profits of the parent company amounted to RMB 9,349,860,281.22. According to the resolution of the board of directors, the Company plans to implement mid-term dividend distribution to reward its shareholders. The specific dividend distribution plan is as follows: (1) The Company plans to distribute cash dividends of RMB 5 per 10 shares (including tax) to all shareholders, based on the total share capital of 944,127,316 shares as of July 31, 2024. The total amount of dividends to be distributed is RMB 472,063,658.00. (2) Purpose of mid-term dividend distribution: first, to meet the needs of the Company's long-term stable and healthy development; second, to increase cash dividend distribution to boost market confidence, while ensuring that the Company's normal operations and long-term development are not affected; third, to actively reward shareholders, share the Company's development dividends with them, and enhance their sense of gain. If the Company’s share capital changes due to reasons such as new shares being listed, stock option exercises, convertible bonds being converted into shares, or share repurchases between the announcement of the distribution plan and the equity registration date for the dividend distribution, adjustments will be made based on the principle of "maintaining the distribution ratio and adjusting the total distribution amount accordingly". | |
IV. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or otherEmployee Incentives?Applicable □Not applicable
1. Equity incentive
2021 Stock Option Incentive Plan:
1.On April 14, 2021, the Company held the Fourth Meeting of the Fifth Session of the Board of Directors, during which theProposal on 2021 Stock Option Incentive Plan (Draft) of the Company and Its Summary and other related proposals weredeliberated and approved, and the independent directors expressed their independent opinions on and approved the matters relatedto the Company’s stock option incentive plan. The Fourth Meeting of the Fifth Session of the Board of Supervisors of theCompany deliberated and approved the above-mentioned proposal and expressed its concurring opinion. The Company disclosedthe above matters on April 15, 2021.
2. From April 15, 2021 to April 24, 2021, the Company internally disclosed the names and titles of the incentive targets of thestock option incentive plan. On April 27, 2021, the Company’s Board of Supervisors published the Review Opinions of the Boardof Supervisors on the List of Incentive Targets of the Stock Option Incentive Plan in 2021 and Explanation on the Publicity. Onthe same day, the Company disclosed the Self-inspection Report on the Purchase and Sale of the Company’s Shares by Insidersand Incentive Targets of the Stock Option Incentive Plan in 2021.
3. On April 30, 2021, the Company held its first extraordinary general meeting of shareholders, where it reviewed and approvedthe Proposal on the Company’s 2021 Stock Option Incentive Plan (Draft) and Its Summary, among other related proposals. Thisplan was approved at the Company’s first extraordinary general meeting of shareholders in 2021, and the board of directors wasauthorized to determine the grant date for stock options. The board is also responsible for granting stock options to eligibleincentive recipients and handling all matters necessary for granting these stock options.
4. On May 10, 2021, the Sixth Meeting of the Fifth Session of the Board of Directors and the Sixth Meeting of the Fifth Session ofthe Board of Supervisors of the Company deliberated and approved the Proposal on the Granting Stock Options to IncentiveTargets. The Board of Supervisors verified the list of incentive targets again and expressed its agreement, and the independentdirectors of the Company expressed their independent opinion on it.
5. The Company held the 10th meeting of the 5th Board of Directors and the 10th meeting of the 5th Board of Supervisors onApril 19, 2022, deliberating and adopting the Proposal on the Cancellation of Part of the Stock Options under the 2021 StockOption Incentive Plan and the Proposal on the Cancellation of Stock Options for Failure to Meet the Exercise Conditions duringthe First Exercise Period of the 2021 Stock Option Incentive Plan and other proposals. The Board of Supervisors verified it andexpressed its agreement, and the independent directors of the Company expressed their independent opinion on it.
6. On April 26, 2022, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and ClearingCorporation Limited, the cancellation of the aforementioned 1,264,000 stock options has been completed. The Company cancelleda total of 1,264,000 stock options, accounting for 0.13% of the Company's current total capital stock. This cancellation of stockoptions complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., andthe provisions of the Incentive Plan (Draft), etc. The stock options cancelled this time have not been exercised, and thecancellation will not have any impact on the Company's capital stock. The capital structure has not changed.
7. The Company held the 14th meeting of the 5th Board of Directors and the 14th meeting of the 5th Board of Supervisors onApril 25, 2023, deliberating and adopting the Proposal on the Cancellation of Part of the Stock Options under the 2021 StockOption Incentive Plan and the Proposal on the Cancellation of Stock Options for Failure to Meet the Exercise Conditions duringthe Second Exercise Period of the 2021 Stock Option Incentive Plan and other proposals. The Board of Supervisors verified it andexpressed its agreement, and the independent directors of the Company expressed their independent opinion on it.
8. On May 9, 2023, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and ClearingCorporation Limited, the cancellation of the aforementioned 945,000 stock options has been completed. The Company cancelled atotal of 945,000 stock options, accounting for 0.10% of the Company's current total capital stock. This cancellation of stockoptions complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., andthe provisions of the Incentive Plan (Draft), etc. The stock options cancelled this time have not been exercised, and thecancellation will not have any impact on the Company's capital stock. The capital structure has not changed.
9. The Company held the 5th meeting of the 6th Board of Directors and the 5th meeting of the 6th Board of Supervisors on April24, 2024, deliberating and adopting the Proposal on the Cancellation of Part of the Stock Options under the 2021 Stock OptionIncentive Plan and the Proposal on the Cancellation of Stock Options for Failure to Meet the Exercise Conditions during the ThirdExercise Period of the 2021 Stock Option Incentive Plan and other proposals. The board of supervisors has verified this andexpressed its concurring opinion.
10. On May 23, 2024, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and ClearingCorporation Limited, the cancellation of the aforementioned 831,000 stock options has been completed. The Company cancelled atotal of 831,000 stock options, accounting for 0.09% of the Company's current total capital stock. This cancellation of stockoptions complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., andthe provisions of the Incentive Plan (Draft), etc. The stock options cancelled this time have not been exercised, and thecancellation will not have any impact on the Company's capital stock. The capital structure has not changed.
2022 Stock Option Incentive Plan:
1. On March 31, 2022, the Company held the 9th Meeting of the 5th Board of Directors, during which the Proposal on 2022 StockOption Incentive Plan (Draft) of the Company and Its Summary and other related proposals were deliberated and approved, andthe independent directors expressed their independent opinions on and approved the matters related to the Company's stock optionincentive plan. The 9th Meeting of the 5th Board of Supervisors of the Company deliberated and approved the above-mentionedproposal and expressed its concurring opinion. The Company disclosed the above matters on April 01, 2022.
2. From April 1, 2022 to April 10, 2022, the Company internally disclosed the names and titles of the incentive targets of the stockoption incentive plan. On April 13, 2022, the Company’s Board of Supervisors published the Review Opinions of the Board ofSupervisors on the List of Incentive Targets of the Stock Option Incentive Plan in 2022 and Explanation on the Publicity. On thesame day, the Company disclosed the Self-inspection Report on the Purchase and Sale of the Company’s Shares by Insiders andIncentive Targets of the Stock Option Incentive Plan in 2022.
3. On April 21, 2022, the Company held its first extraordinary general meeting of shareholders, where it reviewed and approvedthe Proposal on the Company’s 2022 Stock Option Incentive Plan (Draft) and Its Summary, among other related proposals. Thisplan was approved at the Company’s first extraordinary general meeting of shareholders in 2022, and the board of directors wasauthorized to determine the grant date for stock options. The board is also responsible for granting stock options to eligibleincentive recipients and handling all matters necessary for granting these stock options.
4. On May 10, 2022, the 11th meeting of the 5th Board of Directors and the 11th meeting of the 5th Board of Supervisors of theCompany deliberated and approved the Proposal on the Granting Stock Options to Incentive Targets. The Board of Supervisorsverified the list of incentive targets again and expressed its agreement, and the independent directors of the Company expressedtheir independent opinion on it.
5. The Company held the 14th meeting of the 5th Board of Directors and the 14th meeting of the 5th Board of Supervisors onApril 25, 2023, deliberating and adopting the Proposal on the Cancellation of Part of the Stock Options under the 2022 StockOption Incentive Plan and the Proposal on the Cancellation of Stock Options for Failure to Meet the Exercise Conditions duringthe First Exercise Period of the 2022 Stock Option Incentive Plan and other proposals. The Board of Supervisors verified it andexpressed its agreement, and the independent directors of the Company expressed their independent opinion on it.
6. On May 9, 2023, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and ClearingCorporation Limited, the cancellation of the aforementioned 1,609,000 stock options has been completed. The Company cancelleda total of 1,609,000 stock options, accounting for 0.17% of the Company's current total capital stock. This cancellation of stockoptions complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., andthe provisions of the Incentive Plan (Draft), etc. The stock options cancelled this time have not been exercised, and thecancellation will not have any impact on the Company's capital stock. The capital structure has not changed.
7. The Company held the 5th meeting of the 6th Board of Directors and the 5th meeting of the 6th Board of Supervisors on April24, 2024, deliberating and adopting the Proposal on the Cancellation of Part of the Stock Options under the 2022 Stock OptionIncentive Plan and the Proposal on the Cancellation of Stock Options for Failure to Meet the Exercise Conditions during theSecond Exercise Period of the 2022 Stock Option Incentive Plan and other proposals. The board of supervisors has verified thisand expressed its concurring opinion.
8. On May 23, 2024, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and ClearingCorporation Limited, the cancellation of the aforementioned 1,451,000 stock options has been completed. The Company cancelleda total of 1,451,000 stock options, accounting for 0.15% of the Company's current total capital stock. This cancellation of stockoptions complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., andthe provisions of the Incentive Plan (Draft), etc. The stock options cancelled this time have not been exercised, and thecancellation will not have any impact on the Company's capital stock. The capital structure has not changed.
2023 Stock Option Incentive Plan:
1.On April 25, 2023, the Company held the 14th Meeting of the 5th Board of Directors, during which the Proposal on 2023 StockOption Incentive Plan (Draft) of the Company and Its Summary and other related proposals were deliberated and approved, andthe independent directors expressed their independent opinions on and approved the matters related to the Company’s stock optionincentive plan. The 14th meeting of the 5th Board of Supervisors of the Company deliberated and adopted the above-mentionedproposals and expressed its concurring opinion. The Company disclosed the above matters on April 26, 2023.
2. From April 26, 2023 to May 8, 2023, the Company internally disclosed the names and titles of the incentive targets of the stockoption incentive plan. On May 9, 2023, the Company’s Board of Supervisors published the Review Opinions of the Board ofSupervisors on the List of Incentive Targets of the Stock Option Incentive Plan in 2023 and Explanation on the Publicity. On thesame day, the Company disclosed the Self-inspection Report on the Purchase and Sale of the Company’s Shares by Insiders andIncentive Targets of the Stock Option Incentive Plan in 2023.
3. On May 18, 2023, the Company held its annual general meeting of shareholders for 2022, where it reviewed and approved theProposal on the Company’s 2023 Stock Option Incentive Plan (Draft) and Its Summary, among other related proposals. This planwas approved at the Company’s annual general meeting of shareholders in 2022, and the board of directors was authorized todetermine the grant date for stock options. The board is also responsible for granting stock options to eligible incentive recipientsand handling all matters necessary for granting these stock options.
4. On June 20, 2023, the 15th meeting of the 5th Board of Directors and the 15th meeting of the 5th Board of Supervisors of theCompany deliberated and approved the Proposal on the Granting Stock Options to Incentive Targets. The Board of Supervisorsverified the list of incentive targets again and expressed its agreement, and the independent directors of the Company expressedtheir independent opinion on it.
5. On April 25, 2024, the Company held the 5th meeting of the 6th board of directors and the 5th meeting of the 6th board ofsupervisors, and approved the Proposal on the Cancellation of Part of the Stock Options under the 2023 Stock Option IncentivePlan and other proposals. The board of supervisors has verified this and expressed its concurring opinion.
6. On May 23, 2024, after being reviewed and confirmed by the Shenzhen Branch of China Securities Depository and ClearingCorporation Limited, the cancellation of the aforementioned 908,800 stock options has been completed. The Company cancelled atotal of 908,800 stock options, accounting for 0.10% of the Company's current total capital stock. This cancellation of stockoptions complies with relevant laws and regulations, the Articles of Association of Hangzhou Robam Appliances Co., Ltd., andthe provisions of the Incentive Plan (Draft), etc. The stock options cancelled this time have not been exercised, and thecancellation will not have any impact on the Company's capital stock. The capital structure has not changed.
7. On June 20, 2024, the Company held the 8th meeting of the 6th board of directors and the 8th meeting of the 6th board of
supervisors, and approved the Proposal on the Achievement of Exercise Conditions for the First Exercise Period of the 2023 StockOption Incentive Plan. The board of supervisors has verified this and expressed its concurring opinion.
2024 Stock Option Incentive Plan:
1. On April 24, 2024, the Company held the 5th Meeting of the 6th Board of Directors, during which the Proposal on 2024 StockOption Incentive Plan (Draft) of the Company and Its Summary and other related proposals were deliberated and approved, andthe independent directors expressed their independent opinions on and approved the matters related to the Company's stock optionincentive plan. The 5th Meeting of the 6th Board of Supervisors of the Company deliberated and approved the above-mentionedproposal and expressed its concurring opinion. The Company disclosed the above matters on April 25, 2024.
2. From April 26, 2024 to May 6, 2024, the Company internally disclosed the names and titles of the incentive targets of the stockoption incentive plan. On May 08, 2024, the Company’s Board of Supervisors published the Review Opinions of the Board ofSupervisors on the List of Incentive Targets of the Stock Option Incentive Plan in 2024 and Explanation on the Publicity. On thesame day, the Company disclosed the Self-inspection Report on the Purchase and Sale of the Company’s Shares by Insiders andIncentive Targets of the Stock Option Incentive Plan in 2024.
3. On May 16, 2024, the Company held its annual general meeting of shareholders for 2023, where it reviewed and approved theProposal on the Company’s 2024 Stock Option Incentive Plan (Draft) and Its Summary, among other related proposals. This planwas approved at the Company’s annual general meeting of shareholders in 2023, and the board of directors was authorized todetermine the grant date for stock options. The board is also responsible for granting stock options to eligible incentive recipientsand handling all matters necessary for granting these stock options.
4. On May 20, 2024, the 6th meeting of the 6th Board of Directors and the 6th meeting of the 6th Board of Supervisors of theCompany approved the Proposal on Adjusting the List of Incentive Recipients and the Number of Grants for the 2024 Stock OptionIncentive Plan and the Proposal on Granting Stock Options to Incentive Recipients. The proposal has been approved by theRemuneration and Assessment Committee of the 6th Board of Directors of the Company in the third review of 2024. The Board ofSupervisors also re-verified the list of incentive recipients and expressed its approval.
2. Implementation of the employee stock ownership plan
□Applicable ?Not applicable
3. Other employee incentive plans
?Applicable □Not applicable
Phase I Partner Equity Ownership Plan
1. On April 14, 2021, the Company held the 4th Meeting of the 5th Session of the Board of Directors, during which the Proposalon Partner Equity Ownership Plan (Draft) of the Company and Its Summary and other related proposals were deliberated andapproved, and the independent directors expressed their independent opinions on and approved the matters related to theCompany’s Partner Equity Ownership Plan. The Fourth Meeting of the Fifth Session of the Board of Supervisors of the Companydeliberated and approved the above-mentioned proposal and expressed its concurring opinion. The Company disclosed the abovematters on April 15, 2021.
2. On April 30, 2021, the Company held its first extraordinary general meeting of shareholders for 2021, where it reviewed andapproved the Proposal on the Company's Partner Equity Ownership Plan (Draft) and Its Summary, among other related proposals.This plan was approved at the Company’s first extraordinary general meeting of shareholders in 2021, authorizing the board ofdirectors to decide on or handle matters related to this plan.
3. On April 20, 2022, the Company disclosed the Announcement on the Failure to Meet the Assessment Conditions for the 2021Partner Equity Ownership Plan. According to the relevant provisions of the ownership plan, the assessment conditions for the2021 Partner Equity Ownership Plan were not met, and the Company will not allocate the special fund for the ownership plan forthat year.
4. On April 26, 2023, the Company disclosed the Announcement on the Failure to Meet the Assessment Conditions for the 2022Partner Equity Ownership Plan. According to the relevant provisions of the ownership plan, the assessment conditions for the2022 Partner Equity Ownership Plan were not met, and the Company will not allocate the special fund for the ownership plan forthat year.
5. On April 25, 2024, the Company disclosed the Announcement on the Failure to Meet the Assessment Conditions for the 2023Partner Equity Ownership Plan. According to the relevant provisions of the ownership plan, the assessment conditions for the2023 Partner Equity Ownership Plan were not met, and the Company will not allocate the special fund for the ownership plan forthat year.
Phase II Partner Equity Ownership Plan
On April 24, 2024, the Company held the 5th meeting of the 6th Board of Directors, where it reviewed and approved the Proposalon the Company's Phase II Partner Equity Ownership Plan (Draft) and Its Summary, among other related proposals. The secondmeeting of the Remuneration and Assessment Remuneration and Assessment Committee of the 6th board of directors reviewedand approved the forementioned proposals. The 5th Meeting of the 6th Board of Supervisors of the Company deliberated andapproved the above-mentioned proposal and expressed its concurring opinion. The Company disclosed the above matters on April25, 2024.
On May 16, 2024, the Company held its annual shareholder meeting for the year 2023 and approved the Proposal on theCompany's Phase II Partner Equity Ownership Plan (Draft) and Its Summary and other related proposals. This plan was approvedby the Company's annual shareholder meeting for the year 2023, authorizing the board of directors to decide on or handle mattersrelated to this plan.
Chapter 5 Environmental and Social Responsibilities
I. Major Environmental Issues
Whether the listed company and its subsidiaries are the key pollution-discharging units announced by the environmental protectionauthorities.
□ Yes ?No
Administrative penalties due to environmental issues during the reporting period.
| Name of company or subsidiary | Reasons for penalties | Violations | Penalties | Impact on the production and operation of the listed company | The Company's rectification measures |
| N/A | N/A | N/A | N/A | N/A | N/A |
Refer to other environmental information disclosed by key pollutant discharging units.N/AMeasures taken to reduce carbon emissions during the reporting period and their effects
□Applicable ?Not applicable
Reasons for not disclosing other environmental informationN/AII. Social Responsibility
The Company discloses its annual CSR Report or ESG Report, as detailed in the Robam Appliances 2023 Environmental, Socialand Corporate Governance (ESG) Report disclosed on www.cninfo.com.cn.
Chapter 6 Significant MattersI. Commitments made by the Company’s actual controllers, shareholders, affiliates,purchasers and the Company itself and other relevant parties already fulfilled during thereporting period and not yet fulfilled at the end of the reporting period
□Applicable ?Not applicable
I. There were no commitments made by the Company’s actual controllers, shareholders, affiliates, purchasers and the Companyitself and other relevant parties already fulfilled during the reporting period and not yet fulfilled at the end of the reporting periodII. Non-operating Occupation of Funds of the Listed Company by the ControllingShareholder and Other Affiliated Parties
□Applicable ?Not applicable
There was no non-operating occupation of funds of the listed company by the controlling shareholder and other affiliated partiesduring the reporting period.III. Illegal External Guarantee
□Applicable ?Not applicable
The Company had no illegal external guarantees during the reporting period.IV. Appointment and Dismissal of Accounting FirmWhether the semi-annual financial report has been audited
□ Yes ?No
The semi-annual financial report of the Company has not been audited.V. Statements of the Board of Directors and the Board of Supervisors on the “Non-standardAudit Report” Issued by the Accounting Firm for the Reporting Period
□Applicable ?Not applicable
VI. Statements of the Board of Directors on the “Non-standard Audit Report” for the LastYear
□Applicable ?Not applicable
VII. Matters Related to Bankruptcy Reorganization
□Applicable ?Not applicable
The Company did not have any matters related to bankruptcy reorganization during the reporting period.
VIII. Litigation MattersMaterial litigation and arbitration
□Applicable ?Not applicable
The Company had no major litigation and arbitration during the reporting period.Other litigation matters
□Applicable ?Not applicable
IX. Punishment and Rectification
□Applicable ?Not applicable
There was no punishment or rectification during the reporting period.X. Integrity Conditions of the Company and its Controlling Shareholders
□Applicable ?Not applicable
XI. Major Connected Transactions
1. Connected transactions concerning daily operations
□Applicable ?Not applicable
The Company had no connected transactions concerning daily operations during the reporting period.
2. Connected transactions related to the acquisition or sales of assets or equity
□Applicable ?Not applicable
The Company had no connected transactions related to the acquisition or sales of assets or equity during the reporting period.
3. Connected transactions related to joint outward investment
□Applicable ?Not applicable
The Company had no connected transactions related to joint outward investment during the reporting period.
4. Connected transactions on credit and debt
□Applicable ?Not applicable
The Company had no connected transactions on credit and debt during the reporting period.
5.Transactions with connected finance companies
□Applicable ?Not applicable
There were no deposits, loans, credits or other financial operations between the Company and connected finance companies andaffiliates.
6.Transactions between finance companies controlled by the Company and affiliates
□Applicable ?Not applicable
There were no deposits, loans, credits or other financial operations between finance companies controlled by the Company andaffiliates.
7. Other major connected transactions
□Applicable ?Not applicable
There were no other major connected transactions during the reporting period.
XII. Major Contracts and Their Performance
1. Entrustment, contracting and leasing
(1) Entrustment
□Applicable ?Not applicable
The Company had no entrustment during the reporting period.
(2) Contracting
□Applicable ?Not applicable
There was no contracting during the reporting period.
(3) Leasing
□Applicable ?Not applicable
There was no leasing during the reporting period.
2. Material guarantee
□Applicable ?Not applicable
The Company had no material guarantee during the reporting period.
3. Financial management entrusting
?Applicable □Not applicable
Unit: RMB 10,000
| Specific type | Fund source | Amount incurred | Undue balance | Overdue amount not recovered | Impairment amount accrued of overdue but not recovered financial management products |
| Bank financial products | Own funds | 40,619.00 | 313,100.00 | 0 | 0 |
| Total | 40,619.00 | 313,100.00 | 0 | 0 | |
The specific situation of high-risk entrusted financial management with large single-item amount or low safety and poor liquidity
□Applicable ?Not applicable
Conditions where the capital of entrusted financial management cannot be recovered or may be impaired
□Applicable ?Not applicable
4. Other material contracts
□Applicable ?Not applicable
The Company had no other material contracts during the reporting period.XIII. Explanation of Other Significant Matters
□Applicable ?Not applicable
The Company had no other significant matters that need to be explained during the reporting period.XIV. Significant Matters of Subsidiaries of the Company
□Applicable ?Not applicable
Chapter 7 Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in shares
Unit: Share
| Before change | Change (+. -) | After change | |||||||
| Number | Percentage (%) | Issue of new shares | Bonus shares | Shares converted from capital reserve | Others | Sub-tot al | Number | Percentage (%) | |
| I. Shares subject to sales restrictions | 12,261,847 | 1.29% | -874,718 | -874,718 | 11,387,129 | 1.20% | |||
| 1. Shares held by the state | |||||||||
| 2. Shares held by the state-owned legal persons | |||||||||
| 3. Shares held by other domestic investors | 12,261,847 | 1.29% | -874,718 | -874,718 | 11,387,129 | 1.20% | |||
| Including: shares held by domestic legal persons | |||||||||
| Including: shares held by domestic natural persons | 12,261,847 | 1.29% | -874,718 | -874,718 | 11,387,129 | 1.20% | |||
| 4. Shares held by overseas investors | |||||||||
| Including: shares held by overseas legal persons | |||||||||
| Shares held by overseas natural persons | |||||||||
| II. Shares without sales restrictions | 936,762,203 | 98.71% | 874,718 | 874,718 | 937,636,921 | 98.80% | |||
| 1. RMB ordinary shares | 936,762,203 | 98.71% | 874,718 | 874,718 | 937,636,921 | 98.80% | |||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total shares | 949,024,050 | 100.00% | 949,024,050 | 100.00% | |||||
Reason for share changes
□Applicable ?Not applicable
Approval of changes in shares
□Applicable ?Not applicable
Transfer of ownership of changes in shares
□Applicable ?Not applicable
Progress in the implementation of shares repurchase
□Applicable ?Not applicable
Progress of transferring repurchased shares by means of centralized bidding
□Applicable ?Not applicable
The impact of changes in shareholding on the financial indicators such as basic earnings per share (EPS), diluted EPS, and netassets per share attributable to common shareholders for the latest year and the latest period.
□Applicable ?Not applicable
Other information deemed necessary by the Company or required to be disclosed by securities regulatory authorities.
□Applicable ?Not applicable
2. Changes in shares subject to sales restrictions
?Applicable □Not applicable
Unit: Share
| Name of shareholder | Initial Restricted Shares | Number of Restricted Shares Released During the Current Period | Number of Restricted Shares Added During the Current Period | Ending Restricted Shares | Reason for Restriction | Date of Restriction Release |
| Zhang Songnian | 834,312 | 834,312 | 0 | 0 | End of board of supervisors’ term departure | 6 Months After Term Expiration |
| Shen Yueming | 40,406 | 40,406 | 0 | 0 | End of board of supervisors’ term departure | 6 Months After Term Expiration |
| Total | 874,718 | 874,718 | 0 | 0 | -- | -- |
II. Securities Issuance and Listing
□Applicable ?Not applicable
III. Number of Shareholders of the Company and Their Shareholdings
Unit: Share
| Total number of common shareholders at the end of the reporting period | 50,752 | Total number of preference shareholders with voting rights recovered at the end of the reporting period (if any) (see Note 8) | 0 | |||||
| Shareholdings of common shareholders holding more than 5% of the Company’s shares or top 10 common shareholders (excluding share lent through refinancing) | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding ratio | Number of common shares held at the end of the | Change during the reporting period | Number of shares subject to sales restriction | Number of shares without sales restrictions | Pledged, marked or frozen shares | |
| Status | Number | |||||||
reporting
period
| reporting period | s | |||||||
| Hangzhou Robam Industrial Group Co., Ltd. | Domestic non-state-own ed corporation | 49.68% | 471,510,000 | 471,510,000 | Not Applicable | |||
| Hong Kong Securities Clearing Company Limited | Overseas corporation | 9.37% | 88,885,033 | 20,298,898 | 88,885,033 | Not Applicable | ||
| TEMASEK FULLERTON ALPHA PTE LTD | Overseas corporation | 1.79% | 16,950,061 | -315,556 | 16,950,061 | Not Applicable | ||
| 413 Portfolio of National Social Security Fund | Others | 1.36% | 12,902,204 | 787,004 | 12,902,204 | Not Applicable | ||
| Shen Guoying | Domestic natural person | 1.29% | 12,240,000 | 12,240,000 | Not Applicable | |||
| Schroder Investment Management (Hong Kong) Limited - Schroder Global Equity Fund China A-Shares (Exchange) | Overseas corporation | 0.86% | 8,202,175 | 8,202,175 | 8,202,175 | Not Applicable | ||
| 406 Portfolio of National Social Security Fund | Others | 0.83% | 7,829,500 | 7,829,500 | 7,829,500 | Not Applicable | ||
| Hangzhou Jinchuang Investment Co., Ltd. | Domestic non-state-own ed corporation | 0.70% | 6,640,085 | 6,640,085 | Not Applicable | |||
| Hangzhou Yinchuang Investment Co., Ltd. | Domestic non-state-own ed corporation | 0.67% | 6,318,000 | 6,318,000 | Not Applicable | |||
| Ren Jianhua | Domestic natural person | 0.62% | 5,923,150 | 4,442,362 | 1,480,788 | Not Applicable | ||
| Strategic investor or general legal person who becomes one of the top 10 common shareholders due to rights issue (if any) (see Note 3) | N/A | |||||||
| Description of the associated relationship or consistent actions of the above shareholders | Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company - Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. | |||||||
| Statements of the above shareholders on proxy/trustee voting rights and abstention from voting rights | N/A | |||||||
| Special note on the presence of repurchase accounts among the top 10 shareholders (if any) (see Note 11) | N/A | |||||||
Shareholdings of the top 10 common shareholders not subject to sales restrictions (excluding shares lent through refinancing and
executive locked shares)
| Shareholdings of the top 10 common shareholders not subject to sales restrictions (excluding shares lent through refinancing and executive locked shares) | |||
| Name of shareholder | Number of shares without sales restrictions held at the end of the reporting period | Type of share | |
| Type of share | Number | ||
| Hangzhou Robam Industrial Group Co., Ltd. | 471,510,000 | RMB ordinary shares | 471,510,000 |
| Hong Kong Securities Clearing Company Limited | 88,885,033 | RMB ordinary shares | 88,885,033 |
| TEMASEK FULLERTON ALPHA PTE LTD | 16,950,061 | RMB ordinary shares | 16,950,061 |
| 413 Portfolio of National Social Security Fund | 12,902,204 | RMB ordinary shares | 12,902,204 |
| Shen Guoying | 12,240,000 | RMB ordinary shares | 12,240,000 |
| Schroder Investment Management (Hong Kong) Limited - Schroder Global Equity Fund China A-Shares (Exchange) | 8,202,175 | RMB ordinary shares | 8,202,175 |
| 406 Portfolio of National Social Security Fund | 7,829,500 | RMB ordinary shares | 7,829,500 |
| Hangzhou Jinchuang Investment Co., Ltd. | 6,640,085 | RMB ordinary shares | 6,640,085 |
| Hangzhou Yinchuang Investment Co., Ltd. | 6,318,000 | RMB ordinary shares | 6,318,000 |
| Agricultural Bank of China Co., Ltd. - CSI 500 Exchange Traded Fund | 5,793,600 | RMB ordinary shares | 5,793,600 |
| Description on associated relationship or consistent actions among the top 10 common shareholders not subject to sales restrictions and between the top 10 common shareholders not subject to sales restrictions and the top 10 common shareholders | Mr. Ren Jianhua is the actual controller of the controlling shareholder of the Company - Hangzhou Robam Industrial Group Co., Ltd., and the shareholder of the Company - Hangzhou Jinchuang Investment Co., Ltd.; and the natural person shareholder, Shen Guoying, is his wife. Therefore, there is a possibility that these shareholders will act in concert. | ||
| Description on the top 10 common shareholders engaging in securities margin trading (if any) (see Note 4) | N/A | ||
Shares lending through refinancing involving shareholders holding more than 5% of the shares, the top 10 shareholders, and thetop 10 shareholders of unrestricted circulating shares
□Applicable ?Not applicable
Compared to the previous period, the change is due to the top 10 shareholders and the top 10 unrestricted circulating shareholderslending/returning shares for refinancing purposes.
□Applicable ?Not applicable
Did any of the top 10 common shareholders and the top 10 common shareholders not subject to sales restrictions of the Companyhave any agreed repurchase trading during the reporting period?
□ Yes ?No
There was no agreed repurchase trading between the top 10 common shareholders and the top 10 common shareholders not subjectto sales restrictions of the Company during the reporting period.IV. Changes in Shares Held by Directors, Supervisors, and Senior Management
□Applicable ?Not applicable
There was no change in the shareholdings of directors, supervisors, and senior management of the Company during the reportingperiod.V. Changes in the Controlling Shareholder and the Actual ControllerChanges in the controlling shareholder during the reporting period
□Applicable ?Not applicable
There was no change in the controlling shareholder of the Company during the reporting period.Changes in the actual controller during the reporting period
□Applicable ?Not applicable
There was no change in the actual controller of the Company during the reporting period.
Chapter 8 Preferred Shares
□Applicable ?Not applicable
The Company had no preferred shares during the reporting period.
Chapter 9 Bonds
□Applicable ?Not applicable
Chapter 10 Financial ReportI. Audit Report
Whether the semi-annual report has been audited
□ Yes ?No
The semi-annual financial report of the Company has not been audited.
II. Financial StatementsThe financial statement notes are represented in RMB.
1. Consolidated Balance Sheet
Prepared by: Hangzhou Robam Appliances Co., Ltd.
June 30, 2024
In RMB
| Item | Ending balance | Beginning balance |
| Current assets: | ||
| Cash and cash equivalents | 1,147,837,731.76 | 1,985,050,745.11 |
| Deposit reservation for balance | ||
| Lendings to banks and other | ||
| Financial assets held for trading | 2,551,000,029.50 | 2,730,000,000.00 |
| Derivative financial assets | ||
| Notes receivable | 368,798,633.67 | 696,284,931.64 |
| Accounts receivable | 1,863,130,927.89 | 1,810,015,596.33 |
| Accounts receivable financing | ||
| Prepayments | 185,682,213.92 | 139,713,471.58 |
| Receivable premium | ||
| Reinsurance accounts receivable | ||
| Provision of cession receivable | ||
| Other receivables | 86,770,440.47 | 53,368,667.34 |
| Including: Interests receivable | ||
| Dividends receivable | ||
| Redemptory monetary capital for sale | ||
| Inventory | 1,399,070,238.66 | 1,524,274,720.24 |
| Including: Data resources | ||
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 1,548,608,076.94 | 2,647,808,620.70 |
| Total current assets | 9,150,898,292.81 | 11,586,516,752.94 |
Non-current assets:
| Non-current assets: | ||
| Loans and advances | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term accounts receivable | ||
| Long-term equity investment | 4,978,936.31 | 8,427,450.24 |
| Investment in other equity instruments | 2,116,023.22 | 2,116,023.22 |
| Other non-current financial assets | 580,000,000.00 | 480,000,000.00 |
| Investment real estate | 87,514,098.16 | 91,136,832.31 |
| Fixed assets | 1,664,948,226.73 | 1,720,724,257.46 |
| Construction in process | 444,829,440.01 | 359,768,699.68 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 11,204,929.62 | 13,802,458.98 |
| Intangible assets | 209,040,350.53 | 214,553,739.31 |
| Including: Data resources | ||
| Development expenses | ||
| Including: Data resources | ||
| Goodwill | 12,223,271.67 | 12,223,271.67 |
| Long-term prepaid expenses | 3,277,650.70 | 5,034,659.37 |
| Deferred tax assets: | 394,083,237.85 | 362,897,841.89 |
| Other non-current assets | 3,418,262,772.13 | 1,922,329,328.65 |
| Total non-current assets | 6,832,478,936.93 | 5,193,014,562.78 |
| Total assets | 15,983,377,229.74 | 16,779,531,315.72 |
| Current liabilities: | ||
| Short-term loans | 115,003,320.70 | 95,003,320.70 |
| Borrowings from the central bank | ||
| Borrowings from banks and other financial institutions | ||
| Borrowings from banks and other financial institutions | ||
| Financial liabilities held for trading Derivative financial liabilities | ||
| Notes payables | 993,551,028.00 | 1,098,720,000.58 |
| Accounts payable | 2,384,005,428.78 | 2,548,743,762.06 |
| Advance receipts | ||
| Contract liabilities | 777,554,890.02 | 1,019,942,923.58 |
| Financial assets sold for repurchase | ||
| Deposits from customers and interbank | ||
| Receivings from vicariously traded securities | ||
| Receivings from vicariously sold securities |
Payroll payable
| Payroll payable | 39,032,647.38 | 177,923,042.01 |
| Taxes payable | 205,803,940.00 | 154,365,676.80 |
| Other payables | 290,336,577.77 | 755,964,919.76 |
| Including: Interests payable | ||
| Dividends payable | 472,047,458.00 | |
| Fees and commissions payable | ||
| Dividends payable for reinsurance | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 2,163,637.20 | 4,522,658.42 |
| Other current liabilities | 94,072,365.82 | 118,041,351.23 |
| Total current liabilities | 4,901,523,835.67 | 5,973,227,655.14 |
| Non-current liabilities: | ||
| Reserves for insurance contracts | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 10,343,459.83 | 10,750,792.90 |
| Long-term accounts payable | ||
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | 125,499,549.27 | 136,538,254.74 |
| Deferred income tax liabilities | 29,831,173.39 | 28,418,565.01 |
| Other non-current liabilities | ||
| Total non-current liabilities | 165,674,182.49 | 175,707,612.65 |
| Total liabilities | 5,067,198,018.16 | 6,148,935,267.79 |
| Owner’s equity | ||
| Capital stock | 949,024,050.00 | 949,024,050.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 420,477,027.47 | 411,778,214.22 |
| Less: treasury stock | 199,995,742.59 | 199,995,742.59 |
| Other comprehensive income | -100,145,111.63 | -100,157,634.16 |
| Special reserve | ||
| Surplus reserve | 474,516,412.50 | 474,516,412.50 |
| General risk reserve | ||
| Undistributed profits | 9,275,084,928.45 | 8,987,773,431.71 |
| Total owners’ equity attributable to the parent company | 10,818,961,564.20 | 10,522,938,731.68 |
| Minority interests | 97,217,647.38 | 107,657,316.25 |
| Total owners’ equity | 10,916,179,211.58 | 10,630,596,047.93 |
| Total liabilities and owner’s equity | 15,983,377,229.74 | 16,779,531,315.72 |
Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang Guofu
2. Balance Sheet of the Parent Company
In RMB
| Item | Ending balance | Beginning balance |
| Current assets: | ||
| Cash and cash equivalents | 933,698,210.45 | 1,810,087,936.08 |
| Financial assets held for trading | 2,550,000,000.00 | 2,730,000,000.00 |
| Derivative financial assets | ||
| Notes receivable | 348,583,175.36 | 662,718,295.18 |
| Accounts receivable | 1,879,406,959.27 | 1,755,848,590.56 |
| Accounts receivable financing | ||
| Prepayments | 154,637,824.61 | 127,173,134.27 |
| Other receivables | 78,302,506.11 | 46,761,052.06 |
| Including: Interests receivable | ||
| Dividends receivable | ||
| Inventory | 1,263,539,923.32 | 1,404,838,448.75 |
| Including: Data resources | ||
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 1,545,379,791.00 | 2,644,890,957.65 |
| Total current assets | 8,753,548,390.12 | 11,182,318,414.55 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term accounts receivable | ||
| Long-term equity investment | 269,939,495.45 | 255,471,029.63 |
| Investment in other equity instruments | 2,116,023.22 | 2,116,023.22 |
| Other non-current financial assets | 580,000,000.00 | 480,000,000.00 |
| Investment real estate | 7,497,512.14 | 8,735,897.94 |
| Fixed assets | 1,479,292,114.87 | 1,528,320,306.82 |
| Construction in process | 444,829,440.01 | 359,768,699.68 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 145,036,856.24 | 148,054,087.98 |
| Including: Data resources | ||
| Development expenses | ||
| Including: Data resources | ||
| Goodwill | ||
| Long-term prepaid expenses | 1,642,891.91 | 2,703,497.73 |
| Deferred tax assets: | 376,250,883.78 | 346,004,342.16 |
| Other non-current assets | 3,418,068,772.13 | 1,922,135,328.65 |
Total non-current assets
| Total non-current assets | 6,724,673,989.75 | 5,053,309,213.81 |
| Total assets | 15,478,222,379.87 | 16,235,627,628.36 |
| Current liabilities: | ||
| Short-term loans | 14,503,320.70 | 14,003,320.70 |
| Borrowings from banks and other financial institutions | ||
| Financial liabilities held for trading Derivative financial liabilities | ||
| Notes payables | 942,426,745.42 | 1,042,067,981.92 |
| Accounts payable | 2,262,309,293.28 | 2,416,687,934.76 |
| Advance receipts | ||
| Contract liabilities | 688,622,509.14 | 947,538,425.82 |
| Payroll payable | 20,529,379.35 | 145,416,052.40 |
| Taxes payable | 196,275,701.17 | 140,518,721.35 |
| Other payables | 263,384,328.95 | 725,701,383.40 |
| Including: Interests payable | ||
| Dividends payable | 472,047,458.00 | |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | 82,538,001.71 | 107,860,993.92 |
| Total current liabilities | 4,470,589,279.72 | 5,539,794,814.27 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term accounts payable | ||
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | 91,396,861.47 | 101,473,668.84 |
| Deferred income tax liabilities | 22,900,934.20 | 20,898,710.27 |
| Other non-current liabilities | ||
| Total non-current liabilities | 114,297,795.67 | 122,372,379.11 |
| Total liabilities | 4,584,887,075.39 | 5,662,167,193.38 |
| Owner’s equity | ||
| Capital stock | 949,024,050.00 | 949,024,050.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 420,087,937.51 | 411,389,124.26 |
| Less: treasury stock | 199,995,742.59 | 199,995,742.59 |
| Other comprehensive income | -100,157,634.16 | -100,157,634.16 |
| Special reserve |
Surplus reserve
| Surplus reserve | 474,516,412.50 | 474,516,412.50 |
| Undistributed profits | 9,349,860,281.22 | 9,038,684,224.97 |
| Total owners’ equity | 10,893,335,304.48 | 10,573,460,434.98 |
| Total liabilities and owner’s equity | 15,478,222,379.87 | 16,235,627,628.36 |
3. Consolidated Income Statement
In RMB
| Item | Semi-annual 2024 | The first half of 2023 |
| I. Total operating income | 4,729,354,071.80 | 4,934,869,800.15 |
| Inc: Operating income | 4,729,354,071.80 | 4,934,869,800.15 |
| Interest income | ||
| Earned premium | ||
| Fee and commission income | ||
| II. Total operating costs | 3,939,853,384.87 | 4,072,326,288.42 |
| Inc: Operating costs | 2,417,617,979.67 | 2,372,095,971.50 |
| Interest expenses | ||
| Fee and commission expenses | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net allotment of reserves for insurance liabilities | ||
| Policy dividend expenditures | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 35,230,514.90 | 32,207,971.20 |
| Sale expenses | 1,189,754,400.18 | 1,360,821,373.41 |
| Administrative expenses | 214,267,083.09 | 203,425,816.25 |
| R&D expenses | 178,373,820.48 | 172,734,141.15 |
| Financial expense | -95,390,413.45 | -68,958,985.09 |
| Inc: Interest expenses | 1,294,179.47 | 2,707,272.10 |
| Interest income | 97,172,965.14 | 69,274,034.42 |
| Add: other income | 85,214,034.47 | 70,659,558.76 |
| Investment income (“-” for losses) | 18,060,180.26 | 21,723,618.81 |
| Inc: Income from investment in joint ventures and affiliated enterprises | -3,448,513.93 | -1,263,184.05 |
| Gains on derecognition of financial assets measured at amortized cost | ||
| Exchange gains (“-” for losses) | ||
| Net exposure hedging gains (“-” for losses) | ||
| Gains from changes in fair value ("-" for losses) | ||
| Losses from credit impairment (“-” for losses) | 3,339,683.67 | 23,290,586.40 |
| Losses from asset impairment (“-” for losses) | -6,645,269.34 | -3,921,456.14 |
| Gains on disposal of assets (“-” for losses) | -761,243.36 | -576,718.41 |
III. Operating profits (“-” for losses)
| III. Operating profits (“-” for losses) | 888,708,072.63 | 973,719,101.15 |
| Add: non-operating income | 885,943.04 | 2,803,959.50 |
| Less: non-operating expenditure | 3,092,546.70 | 1,449,874.49 |
| IV. Total profits (“-” for total losses) | 886,501,468.97 | 975,073,186.16 |
| Minus: income tax expense s | 137,595,570.63 | 151,830,927.51 |
| V. Net profits (“-” for net losses) | 748,905,898.34 | 823,242,258.65 |
| (I) By operational sustainability | ||
| 1. Net profits from continuing operations (“-” for net losses) | 748,905,898.34 | 823,242,258.65 |
| 2. Net profits from discontinued operations (“-” for net losses) | ||
| (II) By ownership | ||
| 1. Net profit attributable to shareholders of the parent company (“-” for net losses) | 759,358,954.74 | 829,718,350.69 |
| 2. Minority shareholders’ gains and losses (“-” for net losses) | -10,453,056.40 | -6,476,092.04 |
| VI. After-tax net amount of other comprehensive income | 25,910.06 | |
| After-tax net amount of other comprehensive income attributable to owners of the parent company | 12,522.53 | |
| (I) Other comprehensive income that cannot be reclassified into gains and losses | ||
| 1. Changes in re-measured and defined benefit plans | ||
| 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method | ||
| 3. Changes in fair value of the investment in other equity instruments | ||
| 4. Changes in fair value of the credit risk of the Company | ||
| 5. Others | ||
| (II) Other comprehensive income which will be reclassified into gains and losses | 12,522.53 | |
| 1. Other comprehensive income which can be transferred into gains and losses under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedge reserve | ||
| 6. Converted difference in foreign currency statements | 12,522.53 | |
| 7. Others | ||
| After-tax net amount of other comprehensive income attributable to minority shareholders | 13,387.53 |
VII. Total comprehensive income
| VII. Total comprehensive income | 748,931,808.40 | 823,242,258.65 |
| Total comprehensive income attributable to owners of the parent company | 759,371,477.27 | 829,718,350.69 |
| Total comprehensive income attributable to minority shareholders | -10,439,668.87 | -6,476,092.04 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS | 0.80 | 0.87 |
| (II) Diluted EPS | 0.80 | 0.87 |
Legal representative: Ren Jianhua Person in charge of accounting: Zhang Guofu Head of the accounting department: Zhang Guofu
4. Income Statement of the Parent Company
In RMB
| Item | Semi-annual 2024 | The first half of 2023 |
| I. Operating income | 4,369,901,782.29 | 4,490,148,776.21 |
| Less: Operating costs | 2,287,778,860.63 | 2,272,924,581.00 |
| Taxes and surcharges | 29,970,386.67 | 26,445,659.50 |
| Sale expenses | 986,325,349.96 | 1,071,915,930.73 |
| Administrative expenses | 160,556,379.13 | 139,991,185.53 |
| R&D expenses | 174,732,034.55 | 167,969,738.37 |
| Financial expense | -96,913,621.82 | -69,761,406.60 |
| Inc: Interest expenses | -464,790.04 | 646,283.95 |
| Interest income | 96,441,907.69 | 67,688,700.69 |
| Add: other income | 81,216,465.62 | 61,866,650.16 |
| Investment income (“-” for losses) | 18,230,432.05 | 21,795,614.09 |
| Inc: Income from investment in joint ventures and affiliated enterprises | -3,261,567.95 | -1,019,723.65 |
| Gains on derecognition of financial assets measured at amortized cost (“-” for losses) | ||
| Net exposure hedging gains (“-” for losses) | ||
| Gains from changes in fair value ("-" for losses) | ||
| Losses from credit impairment (“-” for losses) | 4,911,356.58 | 22,393,985.99 |
| Losses from asset impairment (“-” for losses) | -6,645,269.34 | -3,921,456.14 |
| Gains on disposal of assets (“-” for losses) | -710,053.68 | -607,881.96 |
| II. Operating profits (“-” for losses) | 924,455,324.40 | 982,189,999.82 |
| Add: non-operating income | 813,935.67 | 2,738,086.37 |
| Less: non-operating expenditure | 2,850,861.57 | 1,067,871.65 |
| III. Total profits (“-” for total losses) | 922,418,398.50 | 983,860,214.54 |
| Minus: income tax expense s | 139,194,884.25 | 148,240,769.05 |
| IV. Net profits (“-” for net losses) | 783,223,514.25 | 835,619,445.49 |
(I) Net profits from continuingoperations (“-” for net losses)
| (I) Net profits from continuing operations (“-” for net losses) | 783,223,514.25 | 835,619,445.49 |
| (II) Net profits from discontinued operations (“-” for net losses) | ||
| V. After-tax net amount of other comprehensive income | ||
| (I) Other comprehensive income that cannot be reclassified into gains and losses | ||
| 1. Changes in re-measured and defined benefit plans | ||
| 2. Other comprehensive income which cannot be transferred to gains or losses under the equity method | ||
| 3. Changes in fair value of the investment in other equity instruments | ||
| 4. Changes in fair value of the credit risk of the Company | ||
| 5. Others | ||
| (II) Other comprehensive income which will be reclassified into gains and losses | ||
| 1. Other comprehensive income which can be transferred into gains and losses under the equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedge reserve | ||
| 6. Converted difference in foreign currency statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 783,223,514.25 | 835,619,445.49 |
| VII. EPS: | ||
| (I) Basic EPS | ||
| (II) Diluted EPS |
5. Consolidated Cash Flow Statement
In RMB
| Item | Semi-annual 2024 | The first half of 2023 |
| I. Cash flow from operating activities: | ||
| Cash received for the sale of goods and rendering of services | 5,222,048,354.18 | 5,549,357,254.19 |
| Net increase in clients’ deposits and deposits from banks and other financial institutions | ||
| Net increase in borrowings from the central bank | ||
| Net increase in borrowings from other financial institutions |
Cash received from receivinginsurance premium of the originalinsurance contract
| Cash received from receiving insurance premium of the original insurance contract | ||
| Net cash from receiving reinsurance premium | ||
| Net increase in deposits and investment of insured persons | ||
| Cash received from interests, fees and commissions | ||
| Net increase in borrowed funds | ||
| Net increase in repurchase business funds | ||
| Net cash received from vicariously traded securities | ||
| Refunds of taxes | 18,261,517.10 | 9,479,183.31 |
| Cash received relating to other operating activities | 115,508,317.54 | 162,988,244.01 |
| Subtotal of cash inflow from operating activities | 5,355,818,188.82 | 5,721,824,681.51 |
| Cash paid for purchased products and received services | 2,672,099,590.55 | 2,509,505,444.23 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits with the central bank and other financial institutions | ||
| Cash paid for claims of original insurance contract | ||
| Net increase in lending funds | ||
| Cash paid for interests, fees and commissions | ||
| Cash paid for policy dividends | ||
| Cash paid to and on behalf of employees | 581,145,832.14 | 531,293,363.95 |
| Cash paid for taxes | 387,905,697.88 | 432,835,037.24 |
| Cash paid related to other operating activities | 1,300,661,476.86 | 1,288,457,982.86 |
| Subtotal of cash outflow from operating activities | 4,941,812,597.43 | 4,762,091,828.28 |
| Net cash flow from operating activities | 414,005,591.39 | 959,732,853.23 |
| II. Cash flow from investing activities: | ||
| Cash received from return of investments | 485,189,970.50 | 856,237,901.17 |
| Cash received from return on investments | 21,509,695.82 | 23,031,053.03 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 439,702.31 | 156,960.00 |
| Net cash received from disposal of subsidiaries and other business entities | ||
| Cash received related to other investment activities | 3,147,278,944.57 | |
| Subtotal of cash inflow from investment activities | 3,654,418,313.20 | 879,425,914.20 |
Cash paid for purchase andconstruction of fixed assets, intangibleassets and other long-term assets
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 144,857,241.94 | 156,402,668.03 |
| Cash paid to investments | 406,190,525.00 | 660,000,000.00 |
| Net increase in pledged loans | ||
| Net cash from subsidiaries and other operating entities | ||
| Cash paid related to other investment activities | 3,450,000,000.00 | |
| Subtotal of cash outflow from investment activities | 4,001,047,766.94 | 816,402,668.03 |
| Net cash flow from investment activities | -346,629,453.74 | 63,023,246.17 |
| III. Cash flow from financing activities: | ||
| Cash from acquiring investments | ||
| Including: Cash received by subsidiaries from investments of minority shareholders | ||
| Cash from acquiring debts | 63,000,000.00 | 38,500,000.00 |
| Other cashes received in relation to financing activities | 500,000.00 | 6,482,178.88 |
| Subtotal of cash inflow from financing activities | 63,500,000.00 | 44,982,178.88 |
| Cash repayments of debts | 43,500,000.00 | 13,500,000,00 |
| Cash paid for distribution of dividends, profits or interest expenses | 945,472,097.73 | 472,047,458.00 |
| Including: Dividends and profits paid by the subsidiaries to minority shareholders | ||
| Other cashes paid in relation to financing activities | 3,198,439.08 | 3,212,200.53 |
| Subtotal of cash outflow from financing activities | 992,170,536.81 | 488,759,658.53 |
| Net cash flow from financing activities | -928,670,536.81 | -443,777,479.65 |
| IV. Effect of change in exchange rate on cash and cash equivalents | 17,341.71 | 2,476,947.59 |
| V. Net increase in cash and cash equivalents | -861,277,057.45 | 581,455,567.34 |
| Plus: Beginning balance of cash and cash equivalents | 1,878,166,358.09 | 5,196,414,341.74 |
| VI. Ending balance of cash and cash equivalents | 1,016,889,300.64 | 5,777,869,909.08 |
6. Cash Flow Statement of the Parent Company
In RMB
| Item | Semi-annual 2024 | The first half of 2023 |
| I. Cash flow from operating activities: | ||
| Cash received for the sale of goods and rendering of services | 4,731,776,324.89 | 5,061,947,996.39 |
| Refunds of taxes | 18,242,540.73 | 9,453,997.74 |
| Cash received relating to other operating activities | 81,546,549.08 | 127,408,820.55 |
| Subtotal of cash inflow from operating activities | 4,831,565,414.70 | 5,198,810,814.68 |
| Cash paid for purchased products and | 2,526,136,695.74 | 2,388,027,327.89 |
received services
| received services | ||
| Cash paid to and on behalf of employees | 450,240,546.01 | 388,171,541.48 |
| Cash paid for taxes | 354,648,101.70 | 376,468,624.51 |
| Cash paid related to other operating activities | 1,078,695,569.23 | 1,093,033,326.17 |
| Subtotal of cash outflow from operating activities | 4,409,720,912.68 | 4,245,700,820.05 |
| Net cash flow from operating activities | 421,844,502.02 | 953,109,994.63 |
| II. Cash flow from investing activities: | ||
| Cash received from return of investments | 480,000,000.00 | 850,000,000.00 |
| Cash received from return on investments | 21,492,000.00 | 33,049,300.00 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 27,800.00 | 117,000.00 |
| Net cash received from disposal of subsidiaries and other business entities | ||
| Cash received related to other investment activities | 3,147,278,944.57 | |
| Subtotal of cash inflow from investment activities | 3,648,798,744.57 | 883,166,300.00 |
| Cash paid for purchase and construction of fixed assets, intangible assets and other long-term assets | 141,568,948.02 | 133,509,231.58 |
| Cash paid to investments | 417,414,675.00 | 660,000,000.00 |
| Net cash from subsidiaries and other operating entities | ||
| Cash paid related to other investment activities | 3,450,000,000.00 | |
| Subtotal of cash outflow from investment activities | 4,008,983,623.02 | 793,509,231.58 |
| Net cash flow from investment activities | -360,184,878.45 | 89,657,068.42 |
| III. Cash flow from financing activities: | ||
| Cash from acquiring investments | ||
| Cash from acquiring debts | ||
| Other cashes received in relation to financing activities | 500,000.00 | 6,482,178.88 |
| Subtotal of cash inflow from financing activities | 500,000.00 | 6,482,178.88 |
| Cash repayments of debts | ||
| Cash paid for distribution of dividends, profits or interest expenses | 944,094,916.00 | 472,047,458.00 |
| Other cashes paid in relation to financing activities | ||
| Subtotal of cash outflow from financing activities | 944,094,916.00 | 472,047,458.00 |
| Net cash flow from financing activities | -943,594,916.00 | -465,565,279.12 |
| IV. Effect of change in exchange rate on cash and cash equivalents | 16,826.80 | 2,476,788.62 |
| V. Net increase in cash and cash equivalents | -881,918,465.63 | 579,678,572.55 |
| Plus: Beginning balance of cash and cash equivalents | 1,727,017,513.09 | 4,978,704,981.15 |
| VI. Ending balance of cash and cash equivalents | 845,099,047.46 | 5,558,383,553.70 |
7. Consolidated Statement of Changes in Owners’ Equity
Current amount
In RMB
| Item | Semi-annual 2024 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority interests | Total owners’ equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profits | Others | Sub-total | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of last year | 949,024,050.00 | 411,778,214.22 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,987,773,431.71 | 10,522,938,731.68 | 107,657,316.25 | 10,630,596,047.93 | ||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of errors of the previous period | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 411,778,214.22 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,987,773,431.71 | 10,522,938,731.68 | 107,657,316.25 | 10,630,596,047.93 | ||||||
| III. Change in current period ("-" for decrease) | 8,698,813.25 | 12,522.53 | 287,311,496.74 | 296,022,832.52 | -10,439,668.87 | 285,583,163.65 | |||||||||
(I) Totalcomprehensiveincome
| (I) Total comprehensive income | 12,522.53 | 759,358,954.74 | 759,371,477.27 | -10,439,668.87 | 748,931,808.40 | ||||||||||
| (II) Capital invested and decreased by the owners | 8,698,813.25 | 8,698,813.25 | 8,698,813.25 | ||||||||||||
| 1. Com mon shares invest ed by the owner s | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payments recognized in owner s’ equity | 8,698,813.25 | 8,698,813.25 | 8,698,813.25 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | -472,047,458.00 | ||||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Distribution to owner s (or shareholders ) | -472,047,458.00 | -472,047,458.00 | -472,047,458.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-forward of owners’ equity | |||||||||||||||
| 1. Capita l reserve converted into capital (or capital stock) |
2. Surplus reserve
converted intocapital (or capitalstock)
| 2. Surplus reserve converted into capital (or capital stock) | |||||||||||||||
| 3. Surplus reserves making up for losses | |||||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawn in current period | |||||||||||||||
| 2. Used in current period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of the current period | 949,024,050.00 | 420,477,027.47 | 199,995,742.59 | -100,145,111.63 | 474,516,412.50 | 9,275,084,928.45 | 10,818,961,564.20 | 97,217,647.38 | 10,916,179,211.58 |
Amount of last year
In RMB
| Item | The first half of 2023 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority interests | Total owners’ equity | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profits | Others | Sub-total | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Ending balance of last year | 949,024,050.00 | 409,997,665.58 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,199,079,015.58 | 9,732,463,766.91 | 125,789,202.10 | 9,858,252,969.01 | ||||||
| Plus: Changes in accounting policies | |||||||||||||||
| Correction of errors of the previous period | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 409,997,665.58 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,199,079,015.58 | 9,732,463,766.91 | 125,789,202.10 | 9,858,252,969.01 | ||||||
| III. Change in current period ("-" for decrease) | 3,473,641.59 | 357,670,892.69 | 361,144,534.28 | -6,476,092.04 | 354,668,442.24 | ||||||||||
| (I) Total comprehensive income | 829,718,350.69 | 829,718,350.69 | -6,476,092.04 | 823,242,258.65 | |||||||||||
| (II) Capital invested and decreased by the owners | 3,473,641.59 | 3,473,641.59 | 3,473,641.59 | ||||||||||||
1. Com mon shares
invest ed by theowners
| 1. Com mon shares invest ed by the owners | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payments recognized in owners’ equity | 3,473,641.59 | 3,473,641.59 | 3,473,641.59 | ||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | -472,047,458.00 | ||||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Appropriation of general risk reserve | |||||||||||||||
| 3. Distribution to owners (or shareholders ) | -472,047,458.00 | -472,047,458.00 | -472,047,458.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carry-forward of owners’ equity | |||||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | |||||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | |||||||||||||||
| 3. Surplus reserves making up for losses |
4. Changes of
defined benefit planscarried forward toretained earnings
| 4. Changes of defined benefit plans carried forward to retained earnings | |||||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawn in current period | |||||||||||||||
| 2. Used in current period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 413,471,307.17 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,556,749,908.27 | 10,093,608,301.19 | 119,313,110.06 | 10,212,921,411.25 |
8. Statement of Changes in Owners’ Equity of the Parent Company
Current amount
In RMB
| Item | Semi-annual 2024 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of last year | 949,024,050.00 | 411,389,124.26 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 9,038,684,224.97 | 10,573,460,434.98 | |||||
| Plus: Changes in accounting policies | ||||||||||||
| Correction of errors of the previous period | ||||||||||||
| Others | ||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 411,389,124.26 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 9,038,684,224.97 | 10,573,460,434.98 | |||||
| III. Change in current period ("-" for decrease) | 8,698,813.25 | 311,176,056.25 | 319,874,869.50 | |||||||||
| (I) Total comprehensive income | 783,223,514.25 | 783,223,514.25 | ||||||||||
| (II) Capita l invest ed and decreased by the owner s | 8,698,813.25 | 8,698,813.25 | ||||||||||
| 1. Com mon shares invest ed by the owner s | ||||||||||||
| 2. Capita l invest ed by holder s of other equity instruments | ||||||||||||
| 3. Amount of share-based payments recognized in owner s’ equity | 8,698,813.25 | 8,698,813.25 | ||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders ) | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 3． Others | ||||||||||||
| (IV) Internal carry-forward of owners’ equity | ||||||||||||
1. Capital reserve converted into capital (or capital
stock)
| 1. Capital reserve converted into capital (or capital stock) | ||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | ||||||||||||
| 3. Surplus reserves making up for losses | ||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings | ||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawn in current period | ||||||||||||
| 2. Used in current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 420,087,937.51 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 9,349,860,281.22 | 10,893,335,304.48 |
Amount of last year
In RMB
| Item | The first half of 2023 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Others | Total owners’ equity | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Ending balance of last year | 949,024,050.00 | 409,608,575.62 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,156,489,150.49 | 9,689,484,811.86 | |||||
| Plus: Changes in accounting policies | ||||||||||||
| Correction of errors of the previous period | ||||||||||||
| Others | ||||||||||||
| II. Beginning balance of this year | 949,024,050.00 | 409,608,575.62 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,156,489,150.49 | 9,689,484,811.86 | |||||
| III. Change in current period ("-" for decrease) | 3,473,641.59 | 363,571,987.49 | 367,045,629.08 | |||||||||
(I) Total comprehensive income
| (I) Total comprehensive income | 835,619,445.49 | 835,619,445.49 | ||||||||||
| (II) Capital invested and decreased by the owners | 3,473,641.59 | 3,473,641.59 | ||||||||||
| 1. Common shares invested by the owners | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payments recognized in owners’ equity | 3,473,641.59 | 3,473,641.59 | ||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders ) | -472,047,458.00 | -472,047,458.00 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carry-forward of owners’ equity | ||||||||||||
| 1. Capital reserve converted into capital (or capital stock) | ||||||||||||
| 2. Surplus reserve converted into capital (or capital stock) | ||||||||||||
| 3. Surplus reserves making up for losses | ||||||||||||
| 4. Changes of defined benefit plans carried forward to retained earnings | ||||||||||||
| 5. Other comprehensive income carried forward to retained earnings | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawn in current period | ||||||||||||
| 2. Used in current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of current period | 949,024,050.00 | 413,082,217.21 | 199,995,742.59 | -100,157,634.16 | 474,516,412.50 | 8,520,061,137.98 | 10,056,530,440.94 |
III. Basic Information of the CompanyHangzhou Robam Appliances Co., Ltd. (hereinafter referred to as ROBAM or the Company) is anincorporated company established by overall changing Hangzhou Robam Home Appliances Co., Ltd. onNovember 7, 2000. Approved by China Securities Regulatory Commission (ZJXK [2010] No.1512) in2010, the Company for the first time offered 40 million ordinary shares in RMB to the public onNovember 23, 2010 (stock code: 002508), with the par value per share of RMB 1 and the issue price pershare of RMB 24.00.As of June 30, 2024, the total capital stocks of the Company reached 949,024,050 shares, with aregistered capital of RMB 949,024,050. The Company’s unified social credit code is91330000725252053F; the legal representative is Ren Jianhua; the registration address is No. 592, LinpingAvenue, Linping Economic Development Area, Linping District, Hangzhou; and the Headquarters officeaddress is No. 592, Linping Avenue, Linping Economic Development Area, Linping District, Hangzhou.The RMB-denominated A-shares issued by the Company have been listed on the Shenzhen StockExchange.The main business scope is: general items: manufacturing of household appliances; research anddevelopment of kitchenware, sanitary ware and daily necessities; wholesale of kitchenware, sanitary wareand daily necessities; sales of daily glass products; sales of household appliances; installation services forhousehold appliances; research and development of household appliances; sales of household products;sales of daily necessities; manufacturing of wooden daily products; retail of daily household appliances;repair of daily electrical appliances; sales of electric heating food processing equipment; wholesale of dailynecessities; technical services, technical development, technical consulting, technical exchange,technology transfer, technology promotion; sales of non-electric household appliances; manufacturing ofnon-electric household appliances; production of gas appliances; sales of refrigeration and air conditioningequipment; manufacturing of refrigeration and air conditioning equipment; development of basic artificialintelligence software; manufacturing of smart household consumption devices; sales of artificialintelligence hardware; manufacturing of commercial, catering, and service-specific equipment; sales ofcommercial, catering, and service-specific equipment; import and export of goods; manufacturing ofenvironmental protection-specific equipment; sales of environmental protection-specific equipment; salesof metal products; sales of mechanical and electrical equipment; sales of electrical equipment; sales ofmechanical equipment; industrial engineering design services; professional design services; graphic design;engineering management services; general equipment repair; furniture manufacturing; production offurniture parts and accessories; sales of furniture parts and accessories; furniture sales; furnitureinstallation and repair services; manufacturing and processing of doors and windows; manufacture ofhousehold goods; retail of kitchenware, sanitary ware, and daily necessities; wood processing; conferenceand exhibition services; leisure and sightseeing activities; environmental protection monitoring;manufacturing of special instruments and equipment for environmental monitoring; sales of specialinstruments and equipment for environmental monitoring; software development; software sales; computer
system services; information system integration services (except for items that require approval accordingto law, the Company is authorized to carry out business activities independently with the business license).Permitted items: manufacturing of disinfection devices; manufacturing of electric heating food processingequipment; installation and maintenance of gas appliances (items that require approval according to lawcan only be operated after approval by relevant departments, and the specific business items shall besubject to the approval results).The Company is a manufacturing company, with major businesses covering research & development,production, sales and comprehensive services of kitchen appliances. Its main products include range hoods,gas stoves, disinfection cabinets, steam ovens, baking ovens, dishwashers, water purifiers, microwaveovens, integrated stoves, and purification tanks.The consolidated financial statements of the Company cover 13 subsidiaries, including BeijingRobam Electric Appliance Sales Co., Ltd., Shanghai Robam Appliances Sales Co., Ltd., HangzhouMingQi Electric Co., Ltd., De Dietrich Household Appliances Trading (Shanghai) Co., Ltd., ShengzhouKinde Intelligent Kitchen Appliances Co., Ltd., Hangzhou Robam Fuchuang Investment Management Co.,Ltd., Zhejiang Cookingfuture Technology Co., Ltd., Hangzhou Jinhe Electric Appliances Co., Ltd., RobamAppliances Holding (HK) Co., Ltd. and Robam International (HK) Trading Co., Ltd., Chengdu RobamInnovation Technology Co., Ltd., Robam Appliances U.S. Holding Co., Ltd., and Robam Appliances LosAngeles Trade Co., Ltd. Compared to the previous year, a total of 3 subsidiaries including ChengduRobam Innovation Technology Co., Ltd., Robam Appliances U.S. Holding Co., Ltd., and RobamAppliances Los Angeles Trade Co., Ltd. are newly established within the scope of consolidation of theCompany during the current period.
IV. Basis for Preparation of Financial Statements
1. Preparation basis
The Company's financial statements are prepared based on actual transactions and events, inaccordance with the Accounting Standards for Business Enterprises and its application guidelines,interpretations, and other relevant regulations issued by the Ministry of Finance (hereinafter collectivelyreferred to as "Accounting Standards for Business Enterprises"), the disclosure requirements of the ChinaSecurities Regulatory Commission (hereinafter "CSRC") under the Preparation Rules for InformationDisclosure by Companies Offering Securities to the Public No. 15—General Provisions on FinancialReports (2023 Revision), and the accounting policies and estimates described in Note 4, "SignificantAccounting Policies and Accounting Estimates".
2. Going concern
The Company has assessed its ability to continue as a going concern for the 12 months following June30, 2024, and has not identified any significant doubts about its ability to continue operating. Thesefinancial statements are prepared on a going concern basis.V. Significant Accounting Policies and EstimatesSpecific accounting policies and estimates:
The specific accounting policies and estimates prepared by the Company according to its actualproduction and operation include the operating cycle, the recognition and measurement of receivables andbad debts, measurement of inventory delivered, fixed assets classification as well as depreciation methods,invisible asset amortization, conditions for the capitalization of R&D expenses, and revenue recognitionand measurement.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company comply with the requirements of the AccountingStandards for Business Enterprises, and truthfully, accurately and completely reflect the financial status asof June 30, 2024, as well as its business results, cash flow and other relevant information for the first halfof 2024.
2. Accounting period
The Company’s accounting period starts on January 1 and ends on December 31 on the Gregoriancalendar.
3. Operating cycle
The normal operating cycle of the Company shall be one year (12 months).
4. Bookkeeping base currency
The Company adopts RMB as the bookkeeping base currency.
5. Methods for determining significance standards and selection criteria
?Applicable □Not applicable
| Item | Significance standards |
| Significant accounts receivable with individual bad debt provisions | Individual amount exceeding RMB 10 million |
| Significant amount of bad debt provisions to be recovered or reversed for receivables during the reporting period | Individual amount exceeding RMB 5 million |
Significant receivables write-offs/debt investment write-offs/other debt investment write-offs in the reporting period
| Significant receivables write-offs/debt investment write-offs/other debt investment write-offs in the reporting period | Individual amount exceeding RMB 5 million |
| Significant accounts payable with an aging over one year | Individual amount exceeding RMB 5 million |
| Significant contract liabilities with an aging over one year | Individual amount exceeding RMB 10 million |
| Significant other payables with an aging over one year | Individual amount exceeding RMB 5 million |
| Significant projects under construction | Increase, decrease, or ending balance of a single project exceeding RMB 20 million during the reporting period |
| Significant investment activities | Individual investment amount exceeding RMB 50 million |
| Significant non-wholly owned subsidiaries/joint ventures and important overseas entities included in the consolidation scope | Investments in a single company exceeding RMB 50 million; or income, net profit, net assets, or total assets of a single entity exceeding 5% of the relevant items in the consolidated financial statements |
6. Accounting approaches to business merger under or not under common control
The assets and liabilities acquired by the Company as the combining party in a business merger undercommon control shall be measured at the book value of the combined party in the final controller’sconsolidated statements on the combination date. The capital reserve shall be adjusted against thedifference between the book value of the net assets acquired by the combining party and the book value ofthe combination consideration paid by it. If the capital reserve is insufficient to offset the difference, theretained earnings shall be adjusted.The identifiable assets, liabilities and contingent liabilities acquired from the acquiree in a businessmerger not under common control shall be measured at fair value on the acquisition date. The combinationcost is the sum of the fair values of cash or non-cash assets paid, liabilities issued or undertaken, equitysecurities issued, among others, by the Company for the purpose of taking control over the acquiree on theacquisition date and all directly related expenses incurred during the business merger (in case of businessmerger accomplished through multiple transactions step by step, the combination cost is the sum of thecost of every single transaction). If the combination cost is greater than the fair value share of theacquiree’s identifiable net assets acquired from the acquiree in the combination, the case is recognized asgoodwill. Where the combination cost is less than the fair value share of the identifiable net assets acquiredfrom the acquiree, the fair values of the identifiable assets, debts and contingent liabilities acquired in thecombination and those of non-cash assets subject to combination consideration or issued equity securitiesshall be rechecked first, and then in case the combination cost is less than the fair value shares of theidentifiable net assets acquired from the acquiree, the difference shall be included in the non-operatingincome in the period of the combination.
7. Criteria for determining control and methods of preparing consolidated financial statements
All subsidiaries under the control of the Company are included into the consolidated financialstatements.
The scope of the consolidated financial statements of the Company is determined on the basis ofcontrol, including the Company and all subsidiaries controlled by the Company. The criteria for
determining control by the group is that the Company has the power over the investees, enjoys variablereturns by participating in the investees' relevant activities, and has the ability to influence the amount ofreturns through its power over the investees.The financial statements of subsidiaries are adjusted in accordance with the accounting policies andaccounting period of the Company when preparing the consolidated financial statements, where theaccounting policies and accounting periods are inconsistent between the Company and its subsidiaries.
All major internal transactions, inter-company balances, and unrealized profits within the scope ofconsolidation shall be offset when preparing consolidated financial statements. The portion of owner’sequity of subsidiaries not held by the parent company and net current profit & loss, other comprehensiveincomes and the portion of total comprehensive incomes belonging to minority equity are presented under“minority equity, minority interest income, other comprehensive incomes belonging to minorityshareholders and total comprehensive incomes belonging to minority shareholders, respectively”.For a subsidiary acquired from business mergers under the same control, its operating results and cashflows are included into the consolidated financial statements since the beginning of the consolidation year.When the comparable consolidated financial statements are being prepared, relevant items in the financialstatements of the last year are adjusted with the stated party formed after merging deemed to exist from thetime of the ultimate controlling party starting to control.For a subsidiary acquired through business mergers not under the same control, its operating resultsand cash flows shall be included into the consolidated financial statement since the date when theCompany obtains control. When preparing the consolidated financial statements, the subsidiary's financialstatements shall be adjusted on basis of the fair value of all identifiable assets, liabilities and contingentliabilities ascertained on the purchasing date.For equity interests in investees not under common control acquired by multiple transactions, whichfinally result in a business merger, the previously held equity interests must be re-measured at fair value onthe acquisition date and the difference between the fair value and the carrying amount should berecognized as investment gains for the reporting period when preparing the consolidated financialstatements. If the previously held equity includes other comprehensive income or changes in owners'equity (other than net profit, loss, or profit distributions), these should be reclassified as investment gainsor losses on the acquisition date, except for other comprehensive income related to changes in netliabilities or assets from re-measurement of the investee's defined benefit plans.Without losing any control right, the Company has partially disposed the long-term equity investmentin the subsidiary. In the consolidated financial statement, according to the difference between the disposalprices of part of the equity investment in the subsidiary and net assets of the subsidiary attributed to theCompany as a result of disposal of long-term equity investment continuously calculated from the purchasedate or consolidation date in the subsidiary, capital premium or stock premium is adjusted, where thecapital surplus is not sufficient to be offset, they are adjusted to the retained earnings.
Where the Company loses the controlling right of the invested party for such reason as disposingpartial equity investment, the remaining equity is re-measured as per the fair value of such equity on theday of losing controlling right when preparing the consolidated financial statements. The balance from thesum of the consideration obtained upon the disposal of equity and the fair value of the remaining equityless the appropriable share of the net asset of the former subsidiaries calculated as per the formershareholding proportion from the purchase day or merging day is included in the investment income forthe period when the right of control is lost and the goodwill is deducted. Other comprehensive incomesrelated to former equity investment in subsidiaries shall be recognized as current investment profits &losses upon losing controls.
8. Classification of joint arrangement and accounting methods for joint operation
The joint arrangement of the Company includes the joint venture. A joint venture is a jointarrangement in which the venturers have rights only to the net assets of the arrangement.
The Company, serving as one part of the joint venture, shall, in accordance with the provisions of theAccounting Standards for Business Enterprises No. 2 – Long-term Equity Investments, conduct accountingtreatment of the investment of the joint venture.
9. Recognition standard of cash and cash equivalents
Cash presented in the Company’s cash flow statement refers to cash on hand and deposits that areavailable for payment at any time. Cash equivalents presented in the cash flow statement refer to short-term investments (no more than three months) with high liquidity and that are readily convertible to knownamounts of cash and subject to an insignificant risk of changes in value.
10. Foreign currency business and conversion of foreign currency statement
? Foreign currency transactions
The Company translates the foreign-currency amount of the foreign-currency transactions into RMBamount based on spot exchange rate applicable on the transaction date. On the balance sheet date, themonetary items in foreign currencies shall be converted at the spot rate on the said balance sheet date. Theconversion differences arising therefrom, except the exchange balance arising from the foreign currencyborrowings special for acquisition or production of qualifying assets which shall be processed according tothe capitalization principle, shall be directly included in the current profit or loss. The foreign currencynon-monetary items measured at fair value shall be converted according to the spot rate of the date whenthe fair value is confirmed. If the difference between the converted amount of bookkeeping base currencyand the original amount of bookkeeping base currency belongs to the foreign currency non-monetary itemavailable for sale of financial assets, such difference shall be included in the capital reserve. If suchdifference belongs to the foreign currency non-monetary item which is measured at fair value and whose
change is included into the current profits and losses, it shall be included into current profits and losses.The foreign currency non-monetary items measured by historical cost shall be still translated according tothe spot rate on the transaction date, while RMB amount remains unchanged.
? Translation of foreign currency financial statements
Assets and liabilities items in the balance sheets of the foreign operations are translated into RMBusing the spot exchange rate at the balance sheet date, while the shareholders’ equity items, except for the"undistributed profit items", are translated into RMB using the spot exchange rate at the date of transaction.The income and expense items in the income statements of overseas operations are translated at theexchange rate approximate to the spot rate at the date of transaction. The difference arisen from the abovetranslation's are presented separately under other comprehensive income. For monetary items denominatedin foreign currencies that materially constitute overseas net investment in overseas operations, exchangedifferences arising from changes in exchange rates, when preparing the consolidated financial statements,are also separately presented under the Shareholders’ equity as foreign currency translation differences. Incase of disposal of an overseas operation, foreign currency translation differences relating to the overseasoperation are proportionately transferred to profits or losses of the period when the disposal was transacted.During the disposal of overseas operation, other comprehensive incomes related to the overseas operationare transferred in proportion into the disposal of current profits and losses.The foreign currency cash flow and the cash flow of overseas subsidiaries shall be converted usingthe exchange rate approximate to the spot rate of the transaction date of the cash flow. The effect ofexchange rate changes on cash is presented separately in the cash flow statement.
11. Financial instruments
The Company shall recognize a financial asset or a financial liability when it becomes a party to afinancial instrument contract.
? Financial assets
Classification, recognition basis and measurement method of financial assets
Based on the business model for management of financial assets and the contractual cash flowcharacteristics of financial assets, the Company classifies the financial assets into three types: 1) thefinancial asset measured at amortized cost; 2) the financial asset measured at the fair value with its changesincluded into other comprehensive incomes; and 3) and the financial asset measured at the fair value withits changes included into current profits or losses.
The financial assets meeting all of the following conditions can be classified as those measured atamortized cost by the Company: 1) the Company adopts the business management mode of financial assetsfor the purpose of collecting contractual cash flow; 2) in accordance with the contract terms of the
financial assets, the cash flow generated at the specific date is only the payment of the principal and theinterest on the basis of the outstanding principal amount. Such financial assets are initially measured attheir fair values, with related transaction costs included into the amount of initial recognition, andsubsequent measurement conducted with the amortized cost. Apart from those designated as hedged items,the difference between the initial amount amortized with the effective interest method and the amount due,profits or losses incurred upon amortization, impairment, exchange profits and losses and derecognitionshall be included into current profits and losses.
Where the following conditions are reached at the same time, the financial assets can be classified bythe Company as those measured at fair value with the changes included into other comprehensive income:
1) the Company adopts the business management mode of the financial assets for the purpose of collectingcontractual cash flow and selling the financial assets; 2) in accordance with the contract terms of thefinancial assets, the cash flow generated at the specific date is only the payment of the principal and theinterest on the basis of the outstanding principal amount. Such financial assets are initially measured attheir fair values, with related transaction costs included into the amount of initial recognition. Apart fromthose designated as the hedged items, profits or losses incurred by such financial assets shall be includedinto the comprehensive incomes, except for credit impairment losses or gains, exchange profits and lossesand the interests calculated as per the actual interest rate for such financial assets. Upon derecognition ofthe financial assets, the accumulated gains or losses previously recorded in other comprehensive incomesshall be transferred out of such other comprehensive incomes and included into the current profits andlosses.
The interest income is recognized by the Company using the effective interest method. The interestincome is determined by multiplying the book balance of financial assets by the effective interest rate,except for conditions below: 1) for the financial assets purchased by or originating from the Company withcredit impairment, since initial confirmation, the interest income shall be determined as per the amortizedcost of the financial asset and the effect interest rate subject to credit adjustment; 2) the financial assetspurchased by or originating from the Company with no credit impairment but having credit impairmentduring the follow-up period shall be subject to interest income calculation based on the amortized cost andactual interest rate of the financial assets during the follow-up period by the Company.
The non-trading equity instrument is designated by the Company as the financial asset which ismeasured at its fair value with changes included into current profits and losses. The designation shall notbe canceled once it is made. The non-trading equity instrument investment, designed by the Company tobe measured at the fair value with their changes included into other comprehensive incomes, is initiallymeasured at fair value, with related transaction cost included into the amount of initial confirmation.Except for the obtained dividends (excluding those of the recovered investment cost), which are includedinto current profits and losses, other related profits and losses (including exchange profits and losses) arecompletely included into other comprehensive incomes and will not then be converted into current profitsand losses of the reporting period. Upon derecognition, the accumulated gains or losses previously
included into other comprehensive incomes are transferred from other comprehensive incomes andincluded into retained earnings.
Financial assets other than those measured at amortized cost and those measured at fair value withchanges recognized in other comprehensive income. Such financial assets are initially measured at theirfair values, with related transaction costs directly included into the current profits and losses. Suchfinancial assets are initially measured at their fair values, with related transaction costs directly includedinto the current profits and losses. Profits or losses of such financial assets shall be included in the currentprofits and losses.The financial asset formed by the contingent consideration confirmed during business merge notunder the same control are classified as those measured by its fair value by the Company, with changesincluded into current profits and losses.Recognition basis and measurement method for transfer of financial assetsFinancial assets meeting one of the following conditions shall be derecognized by the Company: 1)the contractual right to collect the cash flow of the financial asset is terminated; 2) the financial assets havebeen transferred by the Company, and almost all risks and rewards associated with the ownership of thefinancial asset are transferred; 3) the financial assets have been transferred, and the Company had neithertransferred nor retained almost all risks and rewards associated with the ownership of the financial assets,but given up the control over the financial assets.For financial asset that is entirely transferred and meets the conditions of de-recognition, thedifference between the book value of financial asset transferred and the sum of consideration receivedfrom such transfer and the accumulated changes in fair value, directly included into other comprehensiveincome and corresponding to the derecognized amount (in accordance with the contract terms of thefinancial assets involved in such transfer, the cash flow generated at the specific date is only the paymentof the principal and the interest on the basis of the outstanding principal amount), is included into thecurrent profits and losses.For financial asset that is partially transferred and meets the conditions of derecognition, the overallbook value of transferred financial asset is split according to their relative fair value between the partderecognized and the part not derecognized, and the difference between the following two amounts isrecognized in current profits and losses: the sum of consideration received due to transfer and the amountamortized to the derecognized part and corresponding to the accumulative change of fair value which isfirstly included into the other comprehensive income (in accordance with the contract terms of thefinancial assets, the cash flow generated at the specific date is only the payment of the principal and theinterest on the basis of the outstanding principal amount), and the overall book value of aforesaid financialassets.
? Financial liabilities
Classification, recognition and measurement of financial liabilityThe Company’s financial liabilities are grouped, upon initial recognition, into financial liabilitiesmeasured at fair value, with the changes included in the current profit or loss and other financial liabilities.
Financial liabilities measured at fair value with changes included in the current profits and lossesinclude trading financial liabilities and financial liabilities designated to be measured as at fair value withchanges included in the current profits and losses upon initial recognition. The net gain or loss arising fromchanges in fair value, dividends and interest paid related to such financial liabilities are recorded in profitsand losses for the period in which they are incurred.Other financial liabilities are measured subsequently at the amortized cost by adopting the effectiveinterest method. Apart from the following items, the Company will classify the financial liabilities as thosemeasured at amortized cost: 1) the financial liabilities measured at fair value with changes included intocurrent profits and losses include financial liabilities held for trading (including derivatives that arefinancial liabilities) and financial liabilities designated to be measured at fair value with changes includedinto current profits and losses; 2) the financial liabilities formed by transferring of the financial assetsfailed to meet the conditions for derecognition or formed by continuous involvement of transferredfinancial assets; 3) the financial guarantee contracts that do not fall under above 1) and 2) as well as loancommitments at a rate below the market rate of interest that do not fall under above 1).Where a contingent consideration is recognized by the Company as a financial liability in businessmerger not under common control, such financial liability shall be measured at fair value with changesincluded into the current profits and losses during accounting treatment.
Derecognition of financial liabilities
When the current obligation of the financial liabilities has been relieved in whole or part, the part ofthe financial liabilities or obligations that have been relieved upon confirmation is terminated. If theCompany reaches an agreement with the creditor to replace the existing financial liabilities by undertakingnew financial liabilities and the contract terms of the existing and new liabilities are different in substance,the existing financial liabilities shall be derecognized while the new liabilities shall be recognized. Whereall or part of the contract terms of the existing financial liabilities are subject to material modification, theCompany shall derecognize all or part of the existing financial liabilities while recognizing the financialliabilities with modified terms as new financial liabilities. The difference between the book value of theterminated part upon confirmation and the considerations paid is included in the current profit and loss.
Method for determining the fair value of financial assets and financial liabilities
The Company measures the fair value of financial assets and financial liabilities in the main market. Ifthere is no major market, the Company measures the fair value of financial assets and financial liabilitieswith most beneficial price for the market and adopts evaluation techniques with much available data andother information support that is applicable at that time. There are three levels of input data to determine
fair values, wherein the first level is the unadjusted price available for the same asset or liability on thedate of evaluation in an active market; the second level is directly or indirectly observable input data ofrelevant assets or liabilities apart from input data of the first level; the third level is unobservable input dataof relevant assets or liabilities. The Company gives priority of using the first-level inputs and takes thethird-level inputs as the last. The lowest layer that has significant impact on the overall fair valueevaluation determines which level this fair value evaluation result shall belong to.Investments in equity instruments of the Company are measured at fair value. However, under certaincircumstances, if recent information needed to determine the fair value is insufficient, or if the estimatedamount of the fair value features an extensive distribution scope and the cost represents the best estimate ofthe fair value in that distribution scope, the cost may represent the appropriate estimate on the fair valuewithin that distribution scope.
? Offsetting financial assets and financial liabilitiesFinancial assets and financial liabilities of the Company are separately presented in the balance sheetwithout offsetting. However, the net amount resulting from the offsetting between financial assets andfinancial liabilities shall be presented in the balance sheet only if all of the following criteria are met: 1) theCompany has the statutory right to set off recognized amounts which is currently enforceable; 2) theCompany intends either to settle on a net basis, or to realize the financial assets and pay off the financialliabilities simultaneously.
? Distinction and relevant treatment methods of financial liabilities and equity instrumentsThe Company distinguishes between financial liabilities and equity instruments according to thefollowing principles: 1) where the Company cannot unconditionally avoid fulfilling certain contractualobligation by delivering cash or other financial assets, then such contractual obligation is in line with thedefinition of the financial liability. Although certain financial instruments do not expressly contain termsand conditions for the contractual obligation to deliver cash or other financial instruments, the contractualobligation may be indirectly formed according to other terms and conditions; 2) where a financialinstrument must or can be settled using the Company's own equity instrument, the Company shall considerwhether the Company's own equity instrument used for settlement is a substitute of cash or other financialassets, or the residual interest in the assets of an entity after deducting all of its liabilities. If it is the firstcase, the instrument shall be the financial liability of the issuer. If it is the latter case, the instrument shallbe the equity instrument of the issuer. Under some circumstances, the contract of a financial instrumentmay require that the financial instrument must or is able to be settled by the Company’s own equityinstrument. The amount of contractual right or contractual obligation equals to the amount of its ownequity instrument receivable or payable multiplied by its fair value at the time of settlement. Whether theamount of such contractual right or obligation is fixed, or varies, wholly or partially, based on variables
other than the market value of the Company’s own equity instrument (such as interest rates, the price of acommodity or the price of a financial instrument), such contract is classified as financial liability.
In classifying financial instruments (or components) in the consolidated statements, the Companyshall take into account all the terms and conditions agreed between members of the Company and holdersof the financial instruments. If the Company, as a whole, undertakes the obligation to deliver cash, otherfinancial assets or settle in other ways that cause the financial instrument to become a financial liability,the instrument shall be classified as a financial liability.
If a financial instrument or any of its components is a financial liability, the relevant interests,dividends, gains or losses, and gains or losses from redemption or re-financing and so on are included inthe current profits & losses of the Company.
If a financial instrument or its component belongs to an equity instrument, for its issue (including re-financing), repurchase, sale or cancellation, the Company will treat it as a change in equity and will notrecognize the change in fair value of equity instruments.
? Impairment of financial instruments
The Company, based on expected credit losses, performed impairment accounting and recognizedcredit impairment losses on financial assets measured at amortized cost, financial assets classified to bemeasured at the fair value with the changes included into other comprehensive incomes as well as financialguarantee contracts.
The expected credit loss is a weighted average of credit losses on financial instruments weighted atthe risk of default. Credit loss refers to the difference between all contractual cash flows discounted as perthe original effective interest rate and receivable from the contract and all cash flows expected to bereceived by the Company, namely, the present value of a shortage of cash. Among them, financial assetspurchased or underlying with credit impairment of the Company shall be discounted at the financial assets’effective interest rate after credit adjustment.
For account receivables arising from transactions scoped in ASBE on Revenue not containingsignificant financing components, the Company takes the simplified measurement method to measure itsloss provisions based on the amount of expected credit losses during the entire duration.
For financial assets purchased or underlying with credit impairment, the cumulative change inexpected credit loss during the entire duration since the date of balance sheet date after initial recognitionwill be recognized as provision for loss. On each date of balance sheet, the amount of change in expectedcredit loss during the entire duration is included into current profits and losses as impairment losses orgains. Even if the expected credit loss within the entire duration determined on the date of balance sheet isless than the amount of expected credit loss reflected by estimated cash flow upon initial recognition, anyfavorable change in expected credit loss will be recognized as impairment gains.
In addition to other financial assets adopting the aforesaid simplified measurement method orfinancial assets purchased or underlying with credit impairment, the Company shall assess whether thecredit risk of relevant financial instruments has increased significantly since the initial recognition on eachbalance sheet date, and shall respectively accrue their provision for loss and recognize the expected creditloss and its change:
1. In the event that the credit risk has not increased significantly since the initial recognition and it is in
Stage I, the Company shall measure its loss provisions based on the amount of expected credit lossesfor the coming 12 months of such financial instrument and calculate the interest on the basis of bookbalance and effective interest rate.
2. In the event that the credit risk of the financial instrument has increased significantly since the initial
recognition but with no credit impairment and it is in Stage II, the Company shall measure its lossprovisions based on the amount of the expected credit loss of the financial instrument during the entireduration and calculate the interest on the basis of book balance and effective interest rate.
3. In case that credit impairment of the financial instrument has incurred since the initial recognition and
it is in Stage III, the Company shall measure the loss provisions of the financial instrument based on theamount of expected credit losses during the entire duration, and calculate the interest at amortized costand effective interest rate.
Increases or reversals of the provisions for credit losses of the financial instrument are recorded in thecurrent profits and losses as impairment losses or gains. Except for financial assets classified to bemeasured at fair value through other comprehensive income, the book balance of financial assets isdeducted with provision for credit losses. For financial assets classified to be measured at fair value, withthe change included in other comprehensive incomes, the Company shall recognize the provision for creditloss in other comprehensive incomes, and shall not decrease the book value of such financial assets listedin the balance sheet.
Where the Company has measured the provisions for losses based on the amount of the expectedcredit loss over the entire duration of such financial instruments in the prior accounting period, but on thecurrent balance sheet date, such financial instruments no longer fall into the scope of significantlyincreased credit risk since initial recognition, the Company measures the provisions for the losses of suchfinancial instruments based on the amount equivalent to the expected credit losses over the coming 12months on the current balance sheet date, with resulting carrybacks of provisions for losses recorded in thecurrent profits and losses as impairment gains.
1 Significant increase in credit risk
The Company determines if there is a significant increase in credit risk of financial instruments sinceinitial recognition by comparing the risks of default of financial instruments on the balance sheet date andthe date of initial recognition based on reasonable and well-grounded forward-looking informationavailable. For the financial guarantee contract, when the Company applies the regulations on impairmentof financial instruments, the date when the Company becomes the party which makes the irrevocable
undertaking is regarded as the date of initial recognition. The Company will take into account thefollowing factors when assessing whether the credit risk is significantly increased: whether the operatingresults of the debtor has actually changed or is expected to significantly change or not; whether theregulatory, economic or technical environment where the debtor is located has significantly and adverselychanged or not; whether the value of the collateral as the debt pledge or the guarantee provided by the thirdparty or credit enhancement quality has significantly changed or not, as these changes are expected toreduce the economic motives of the debtor to make repayments within the time limits prescribed in theContract or to impact the default probability; whether the expected performance or repayment behavior ofthe debtor has significantly changed or not; whether the Company has changed its management method forfinancial instrument credit or not, etc.On the balance sheet date, if the Company determines that the financial instrument only carries lowcredit risks, then the Company will assume that the credit risks of the financial instrument have notincreased significantly since the initial recognition. If the risk of default on financial instruments is low,the borrower is highly capable of performing its contractual cash flow obligations in the short term, andeven if the economic situation and operating environment are adversely changed over a long period of timebut not necessarily reducing the borrower’s performance of its contractual cash obligations, then thefinancial instrument is considered as having a lower credit risk.2 Credit-impaired financial assetsIn case of one or more events adversely affecting the estimated future cash flows of a financial asset,the financial asset becomes a financial asset to which a credit impairment has happened. Evidence of acredit impairment on a financial asset includes the following information: serious financial difficulties ofthe debtor; a breach of contract by the debtor, such as a default or overdue payment of interest or principle;the creditor, for economic or contractual considerations relating to financial difficulties of the debtor,offers the debtor concessions that are impossible in any other circumstances; it is probable that the debtorwill enter bankruptcy or other financial reorganization; the disappearance of an active market for thatfinancial asset because of financial difficulties of the issuer or the debtor; the purchase or origination of afinancial asset at a deep discount that reflects the incurred credit losses.The credit impairment of financial assets may be caused by the joint effect of the above multipleevents, and may not be caused by individually identifiable events.
3) Determination of expected credit losses
In assessing the expected credit loss, the Company takes reasonable and well-founded informationabout past event, current condition and future economic status predictions into consideration based on theexpected credit loss of single and combined financial evaluation instruments.
The Company divides the financial instruments into different portfolios based on the common creditrisk characteristics. See accounting policies of relevant financial instruments for single evaluationstandards and combined credit risk characteristics.
The Company determines the expected credit losses of financial instruments under the followingmethods:
For financial assets, the credit loss is calculated as the present value of the difference between thecontractual cash flows to be collected by the Company and cash flows expected to be collected.
For the financial guarantee contract, the credit loss is the expected payment made to the contractholder by the Company for reimbursing the contract holder against the credit losses incurred by thecontract holder, deducted by the present value of the differences between the amounts expected to bereceived by the Company from the contract holder, debtor or any other party.
For financial assets which have been credit-impaired on the balance sheet date but are not purchasedor underlying with credit impairment, the credit loss is calculated as the difference between the bookbalance of such financial assets and present value of anticipated future cash flows discounted at theoriginal effective interest rate.
12. Notes receivable
The Company, based on the acceptor credit risk of the notes receivable as common risk characteristics,divides the notes receivable into different combinations and determines the accounting estimation policy ofexpected credit loss.
| Combination classification | Basis for determining combination | Provision method |
| Banker’s acceptances combined | The acceptor is a banking financial institution. | The Company believed that there was no significant credit risk in the bank acceptance held by the Company and there will be no significant loss due to the default of the bank. |
Trade acceptancescombined
| Trade acceptances combined | The acceptor is a non-bank financial institution or enterprise like a finance company. |
The company shall measure the bad-debt provision ofreceivable trade acceptance based on the expectedcredit loss during the entire duration.
13. Accounts receivable
For the receivables arising from transactions regulated by the Accounting Standards for BusinessEnterprises No. 14 Revenue Standards (whether or not containing significant financing components) andthe lease receivables regulated by the Accounting Standards for Business Enterprises No. 21 Leasing, theCompany takes the simplified measurement method to measure its loss provisions based on the amount ofexpected credit losses during the entire duration.
For accounts receivable, the Company assesses whether the credit risk increases significantly on thebasis of a single financial instrument or a combination of financial instruments. The Company singlyevaluates the credit risk of receivables with significantly different credit risks and the followingcharacteristics: receivables in dispute with the other party or involved in litigation and arbitration; accountsreceivable that there are obvious indications showing that the debtor is likely to be unable to fulfill therepayment obligation. The Company cannot obtain sufficient evidence of significant increase in credit riskat the level of single financial instrument at reasonable cost, but it is feasible to assess whether the creditrisk increases significantly on the basis of the combination of financial instruments. When the assessmentis performed on the combination of financial instruments, the Company can classify the financialinstruments based on the common credit risk characteristics.
The Company classifies the accounts receivable into the following combinations based on their creditrisk characteristics:
| Combination classification | Basis for determining combination | Provision method |
| Credit loss that accrues accounts receivable by aging analysis method | Accounts receivable with the same aging have similar credit risk characteristics | Expected rates of credit loss |
| Related parties within the consolidation scope | Funds of subsidiaries within the consolidation scope of controlling shareholders | No expected credit loss under normal circumstances |
If there is objective evidence showing that the credit impairment of certain account receivable hasincurred, the Company shall singly withdraw the bad debt reserve of accounts receivable and confirm theexpected credit loss.
For accounts receivable with credit loss accrued from receivables by aging analysis method, based onthe actual credit loss of previous years and considering the forward-looking information of the currentperiod, the accounting estimate policies of the Company for measuring the expected credit loss are asfollows:
| Age | Expected rates of credit loss |
| Less than 1 year | 5.00% |
| 1-2 years | 10.00% |
| 2-3 years | 20.00% |
| 3-4 years | 50.00% |
| 4-5 years | 80.00% |
| More than 5 years | 100.00% |
The Company calculates the expected credit loss of receivables on the balance sheet date. If theexpected credit loss is greater than the carrying amount of the current receivables impairment provision,the Company will recognize the difference as impairment loss of receivables, debit "credit impairment
loss" and credit "bad debt provision". Otherwise, the Company will recognize the difference as impairmentgains and make opposite accounting records.For the actual credit losses of the Company, if the relevant receivables are determined to beunrecoverable and are approved to be written off, the Company shall debit "bad debt provision" and credit"accounts receivable" according to the approved write-off amount. If the write-off amount is greater thanthe accrued loss provisions, the "credit impairment loss" will be debited according to the difference.
14. Receivables financing
Where the following conditions are reached at the same time, the financial assets can be classified asthose measured at fair value and its change and included into other comprehensive income: the Companyadopts the business management mode of the financial assets for the purpose of collecting contractual cashflow and selling the financial assets. In accordance with the contract terms of the financial assets, the cashflow generated at the specific date is only the payment of the principal and the interest on the basis of theoutstanding principal amount.The Company transfers the accounts receivable held in the form of discount or endorsement, and suchbusiness is more frequent and involves a large amount of money. Its business management model is, inessence, to collect and sell contract cash flow. According to the relevant provisions of financial instrumentstandards, the accounts receivable is classified into financial assets with changes measured at fair valueand included in other comprehensive income.
15. Other receivables
Determination and accounting method for expected credit loss of other accounts receivable
The Company divides the process of credit impairment of other receivables into three stages andadopts different accounting treatment methods for the impairment of other receivables in different stages:
? Credit risk has not increased significantly since initial recognition (Stage I)
For the financial instruments in this stage, the Company shall measure the loss provisions based onthe expected credit loss in the next 12 months.
The Company classifies other receivables based on aging as a credit risk characteristic and measurethem on the basis of combination, which is equivalent to the expected credit loss in the next 12 months.
? Credit risk has increased significantly since initial recognition but has not been impaired (Stage II)
For the financial instruments in this stage, the Company shall measure the loss provisions based onthe expected credit loss during the entire duration.? Credit impairment after initial recognition (Stage III)
For the financial instruments in this stage, the Company shall measure the loss provisions based onthe expected credit loss during the entire duration.
16. Contract assets
? Recognition method and standard of contract asset
Contract asset refers to the rights of the Company to receive consideration for goods transferred to thecustomer, which depend on other factors except for the lapse of time. Where the Company sells two clearlydistinguished commodities to the customer and has the right to collect the payment because onecommodity is delivered and the payment relies on the delivery of the other commodity, the Company willtreat the collection rights as the contract assets.
? Determination and accounting method for expected credit loss of contract assets
For the determination method for expected credit loss of contract assets, please refer to relevantcontents in 11. Financial asset and liabilities; 12. Notes receivable and 13. Account receivable.
The Company calculates the expected credit loss of contract assets on the balance sheet date. If theexpected credit loss is greater than the carrying amount of the current impairment provision of contractassets, the Company will recognize the difference as impairment loss, debit "asset impairment loss" andcredit "contract asset impairment provision". Otherwise, the Company will recognize the difference asimpairment gains and make opposite accounting records.
For the actual credit losses of the Company, if the relevant contract assets are determined to beunrecoverable and are approved to be written off, the Company shall debit "contract asset impairmentprovision" and credit "contract assets" according to the approved write-off amount. If the write-off amountis greater than the accrued loss provisions, the "asset impairment loss" will be debited according to thedifference.
17. Inventories
Inventories of the Company mainly include low-value consumables, raw materials, goods in-process,merchandise inventory and goods shipped in transit.
Inventories are initially measured by cost. Inventory costs include purchase costs, processing costs,and other costs. The inventories are managed based on perpetual inventory system, and valued at actualcost on acquisition. Actual cost is calculated using weighted average method when the inventories areissued or consumed.
Low-value consumables and packaging materials are amortized using one-off amortization method.The provision for inventory write-downs is made based on the excess of the cost of individual inventory
items over their net realizable value. For raw and auxiliary materials of larger amount and lower unit price,inventory revaluation reserves shall be accrued based on the category.
Net realizable value of stock goods, work in progress, or held-for-sale materials are determined bytheir estimated selling price deducted by estimated selling expenses and related taxes. Net realizable valuefor material held for production are determined by the estimated selling price of finished goods deductedby the estimated cost to completion, selling expenses and the related taxes.
18. Assets held for sale
The Company classifies non-current assets or disposal groups as held for sale when the primary means ofrecovering their carrying amount is through sale (including non-monetary exchanges with commercialsubstance) rather than through continued use.
1. The Company classifies non-current assets or disposal groups as held for sale when they meet thefollowing conditions: 1) the asset or disposal group can be immediately sold in its current condition,based on customary practices for similar transactions; 2) the sale is highly probable, with a definitivecommitment from a buyer and an expectation that the sale will be completed within one year. The saleof items that require approval from relevant authorities or regulatory departments must obtain thenecessary approval. Before classifying non-current assets or disposal groups as held for sale, theCompany measures the carrying amounts of each asset and liability within the non-current assets ordisposal groups according to the relevant accounting standards. When initially measuring orremeasuring non-current assets or disposal groups held for sale on the balance sheet date, if theircarrying amount exceeds the net amount after deducting the fair value minus the selling expenses, thecarrying amount shall be adjusted to the fair value less costs to sell. The impairment loss should berecognized in the current period's profit or loss, and an impairment provision for held-for-sale assetsshall be established.
2. Non-current assets or disposal groups acquired specifically for resale are classified as held for sale onthe acquisition date if they meet the requirement that "the sale is expected to be completed within oneyear" and are likely to meet the other classification criteria for held-for-sale within a short period(typically within three months). At initial measurement, the asset or disposal group is measured at thelower of the carrying amount assuming it is not classified as held for sale and the fair value less coststo sell. Except for non-current assets or disposal groups acquired in a business merger, any differencearising from using fair value less costs to sell as the initial measurement amount is recognized in thereporting period’s profit or loss.
3. If the Company loses control over a subsidiary due to reasons such as selling the investment in the
subsidiary, regardless of whether the Company retains part of the equity investment after the sale, ifthe investment in the subsidiary meets the classification criteria for held-for-sale, the entire investmentin the subsidiary is classified as held-for-sale in the parent company's individual financial statements.In the consolidated financial statements, all assets and liabilities of the subsidiary are classified asheld-for-sale.
4. On subsequent balance sheet dates, if the net amount of the fair value less costs to sell of the non-current assets held-for-sale increases, the previously written-down amount should be recovered andreversed within the amount of the asset impairment loss recognized after being classified as held-for-sale. The reversed amount is recognized in the reporting period's profit or loss. Asset impairmentlosses recognized before being classified as held-for-sale cannot be reversed.
5. For the amount of asset impairment loss recognized on a disposal group classified as held-for-sale, theimpairment loss should first be deducted from the carrying amount of goodwill in the disposal group.Then, based on the proportion of the carrying amount of each non-current asset within the group, thecarrying amounts of those assets are proportionally reduced.
On subsequent balance sheet dates, if the net amount of the fair value less costs to sell of the disposalgroup held-for-sale increases, the previously written-down amount should be recovered and reversedwithin the amount of the asset impairment loss recognized after being classified as held-for-sale, inaccordance with the relevant measurement regulations applicable to non-current assets classified as held-for-sale. The amount reversed is recognized in the reporting period's profit or loss. The carrying value ofgoodwill that has been reduced and the asset impairment losses on non-current assets recognized beforeclassification as held-for-sale cannot be reversed.For the amount of asset impairment loss recognized on a disposal group classified as held-for-sale andthen reversed, based on the proportion of the carrying amount of each non-current asset within the group,excluding goodwill, the carrying amounts of those assets are proportionally increased.
1. Non-current assets or non-current assets within a disposal group classified as held-for-sale are notsubject to depreciation or amortization. However, the interest and other expenses related to liabilitieswithin a disposal group held-for-sale continue to be recognized.
2. If a non-current asset or disposal group classified as held-for-sale no longer meets the criteria for suchclassification, or if a non-current asset is removed from a disposal group held-for-sale, it is measured atthe lower of the following two amounts: 1) the carrying amount before being classified as held-for-sale,adjusted for depreciation, amortization, or impairment that would have been recognized had the assetnot been classified as held-for-sale; 2) the recoverable amount.
3. Upon the derecognition of non-current assets or disposal groups classified as held-for-sale, anyunrecognized gains or losses are included in the reporting period's profit or loss.
19. Long-term equity investments
Long-term equity investment of the Company mainly includes the investment to the subsidiaries, andthe equity investment to associated enterprises and joint ventures.
The Company follows the basis to judge the joint control: all the participants or group of participantscollectively control the arrangements, and the policies for activities related to such arrangement must beagreed by all such participants.
Generally, it constitutes significant influence on an investee if the Company controls 20% (inclusive)or more (less than 50%) voting shares of the investee directly or indirectly through a subsidiary. Where theCompany controls less than 20% voting shares of the investee directly or indirectly through a subsidiary,significant effects on the investee shall be judged based on the facts and circumstances in the case thatappoint representative to the board of directors or similar organ of power under the investee, participate thedevelopment of financial and operating policies of the investee, conduct important trading with theinvestee, dispatch management personnel to the investee, or provide key technical data to the investee.The one forming control over the investee is the subsidiary of the Company. For the long-term equityinvestment acquired through business merger under the same control, the share of the combined party inthe book value of net assets presented in consolidated financial statements of ultimate controlling partyacquired at the date of combination is recognized as initial investment cost of long-term equity investment.The book value of net assets for the combined party is negative on the combining date, and the long-termequity investment cost is determined as zero.In case that equity of the investee under the same control is obtained through multiple deals step bystep to finally form business merger, for package deals, the Company shall account each deal as a deal toobtain the control. If it is not a package deal, the share of the book value of combined party's net assetspresented in consolidated financial statements of ultimate controlling party acquired at the date ofcombination is recognized as initial investment cost of long-term equity investment. The differencebetween initial investment cost and the sum of the book value of long-term equity investment before thecombination is realized and the book value of consideration additionally paid to further acquire shares onthe date of combination is adjusted against the capital surplus; if the capital surplus is not sufficient to beoffset, the remaining balance is adjusted against retained earnings.
For long-term equity investments acquired through business mergers not under common control, thecombined cost is used as the initial investment cost.
In case that equity of the investee not under the same control is obtained through multiple deals stepby step to finally form business merger, for package deals, the Company shall account each deal as a dealto obtain the control. If it is not a package deal, initial investment cost accounted using cost method will bethe sum of the book value of original equity investment and new investment cost. For equity held beforethe date of acquisition and accounted with equity method, other related comprehensive income usingequity method for accounting shall not be adjusted, and accounting treatment should be applied to theseinvestments on the same basis as those adopted by the investee for direct disposal of related assets orliabilities. For equity held before the date of acquisition and accounted at fair value in the available-for-sale financial assets, the accumulated change in fair value which is originally included in othercomprehensive income shall be transferred to the investment profit or loss for the current period on thecombining date.
Apart from the long-term equity investments acquired through business merger mentioned above, thelong-term equity investments acquired by cash payment is used as the cost of investment based on thepurchase price actually paid. For long-term equity investments obtained by issuing equity securities, thefair value of the equity securities issued is recorded as the initial investment cost. For long-term equityinvestments obtained by exchange of non-monetary assets, the initial investment cost shall be determinedin accordance with relevant provisions in the Accounting Standards for Business Enterprises No. 7Exchange of Non-Monetary Assets; the initial investment cost shall be determined in accordance with therelevant provisions of the Accounting Standards for Business Enterprises No. 12 Debt Restructuring by thelong-term equity investment of debt restructuring.
Investment in subsidiaries by the Company shall be calculated by cost method, while investment injoint ventures and associates by the Company shall be calculated by equity method.
For long-term equity investment calculated by cost method, the cost of long-term equity investmentshall be adjusted when the investment is added or recovered. The cash dividends or profits declared to bedistributed by the investee shall be recognized as the current investment income.
For long-term equity investment calculated by equity method in subsequent measurement, the bookvalue of the long-term equity investment shall be increased or decreased accordingly with the changes inowner’s equity of the investee. The shares of the net profits & losses of the investee attributable to theCompany shall be recognized based on the fair value of all identifiable net assets of the investee uponacquisition of the investment in accordance with the accounting policies and accounting period of theCompany, after deducting the parts of the profits & losses arising from internal transactions between theassociates and joint ventures attributable to the Company calculated on the basis of shareholding ratio andadjusting the net profits of the investee.
When disposing the long-term equity investment, the balance between the book value and theacquired price actually shall be included in the current profit and loss. As for long-term equity investmentscalculated by the equity method, when other changes in owners’ equity other than net gain or loss of theinvestee are recorded in owners’ equity, the amount initially recorded in owners’ equity is proportionallytransferred into current investment income.
If all transactions from step-by-step disposal of equity to loss of controlling interest do not belong topackage transaction, the Company will conduct accounting treatment for each transaction. In case ofpackage transaction, all transactions shall be calculated as one transaction of disposing subsidiaries andlosing control power for accounting treatment. However, the difference between disposal cost of eachtransaction and book value of long-term equity investment corresponding to equity disposed before losingcontrol power shall be recognized as other comprehensive income and then shall be transferred into currentprofits and losses of losing control power upon such loss.
20. Investment real estates
Measurement model of investment real estateMeasurement by cost methodDepreciation or amortization methodsInvestment properties held by the Company include buildings held for the purpose of earning rentalincome, capital appreciation, or both. Measurement is carried out by cost model.The investment real estates of the Company are depreciated or amortized by the composite lifemethod. The estimated service life, net residual value ratio and annual depreciation (amortization) rate ofthe investment real estate are as follows:
| Type | Depreciation period (years) | Estimated residual value ratio (%) | Annual depreciation rate (%) |
| Houses and buildings | 20 | 5.00 | 4.75 |
| Land use right | 50 | 0.00 | 2.00 |
21. Fixed assets
(1) Recognition conditions
Fixed assets of the Company refer to tangible assets with service life over one year and an individualvalue exceeding RMB 5,000, which are held for producing goods, rendering labor services, lease(exclusive of leased houses, buildings and molds) or operation and management.Fixed assets are recognized when the economic benefits related thereto are likely to flow into theCompany and their costs can be measured in a reliable manner. Fixed assets include houses and buildings,machine and equipment, transportation equipment and other equipment, and the actual cost at the time ofacquisition is taken as the entry value. Among them, the cost of purchased fixed assets includes thepurchase price, import duties and other related taxes, as well as other expenditures that can be directlyattributed to the fixed assets before the fixed assets reach the predetermined serviceable state; the cost ofthe self-constructed fixed assets consists of necessary expenses incurred before the constructed assets areready for the intended use; the fixed assets invested by investors shall be accounted for at the value agreedin the investment contract or agreement, or at the fair value if the value agreed in the investment contractor agreement is unfair; the fixed assets rented in by way of financial lease shall be accounted for at the fairvalue. For fixed assets obtained by financing lease, the lower of the fair value of rented assets and thepresent value of the minimum lease payment on the lease start date shall be recorded as the entry value.
(2) Depreciation method
| Type | Depreciation method | Depreciation period | Residual value rate | Annual depreciation rate |
| Houses and buildings | Straight-line method | 20 years | 5.00% | 4.75% |
Machine andequipment
| Machine and equipment | Straight-line method | 10 years | 5.00% | 9.50% |
| Transportation equipment | Straight-line method | 5 years | 5.00% | 19.00% |
| Other equipment | Straight-line method | 5 years | 5.00% | 19.00% |
Processing of subsequent expenditure of fixed assets: The subsequent expenditure of fixed assetsmainly includes renovation/modification expenditure, repair expenditure, etc. When the relevant economicbenefits are likely to flow in and the costs can be measured in a reliable manner, they shall be included intothe cost of fixed assets. For the replaced part, the book value shall be derecognized. All the othersubsequent expenditures are recognized in profit or loss for the current period in which they are incurred.The Company will recheck the estimated service life, the estimated net residual value and thedepreciation method of the fixed assets on each balance sheet date.Changes, if any, are regarded as the accounting estimate changes. A fixed asset is derecognized whenit is disposed of or no economic benefit is expected from the use or disposal of the asset. The amount ofproceeds on sale and transfer of a fixed asset as well as disposal of a scrapped or damaged fixed asset lesscarrying amount and related taxes thereof, is recognized in profit and loss for the current period.
22. Construction in progress
Construction in progress is measured at its actual cost. The self-operating works is measuredaccording to the direct material, direct wage, direct construction cost, etc.; the outsourced works ismeasured according to the project price payable; the project cost of the equipment installation works isdetermined according to the value of installed equipment, installation cost, commissioning cost and otherexpenditures incurred. The cost of construction in process shall also include borrowing costs that should becapitalized.
The fixed assets constructed by the Company shall be transferred into fixed assets at the estimatedvalue based on project budget, construction cost and actual project cost from the date when fixed assets getready for intended use and depreciation of such assets will be accrued in next month. Upon completion ofthe final accounts formalities, the original value difference of the fixed assets will be adjusted.
Construction in progress is transferred to fixed assets when it reaches its intended usable state, basedon the following criteria:
| Item | Standard for carrying forward fixed assets |
| Houses and buildings | (1) The construction of the entity, including installation, has been fully or substantially completed; (2) further expenditures on the purchased or constructed houses and buildings are minimal or have nearly ceased; (3) the purchased or constructed houses and buildings have met the design or contractual requirements, or are substantially in accordance with these requirements; (4) for construction projects that have reached a predetermined usable state but have not yet undergone final completion settlement, the projects shall be transferred to fixed |
assets at their estimated value based on the actual cost of construction, effective from the datethey reach the predetermined usable state.
| assets at their estimated value based on the actual cost of construction, effective from the date they reach the predetermined usable state. | |
| Machine and equipment | The equipment management department and the equipment manufacturer are jointly responsible for the installation and commissioning of the equipment, including hardware debugging and process condition adjustments. Once commissioning is completed and the equipment has reached its predetermined usable state, it will be transferred to fixed assets after the approval process is completed. |
| Transportation | When it reaches the designated usable state, it will be transferred to fixed assets after the approval process is completed according to the procedure. |
| Other equipment | When it reaches the designated usable state, it will be transferred to fixed assets after the approval process is completed according to the procedure. |
23. Borrowing costs
The Company capitalizes borrowing costs directly attributable to the construction or production ofqualifying assets and includes them in the cost of the related assets. Other borrowing costs are expensedand recognized in profit or loss for the current period. Recognition principle of borrowing costcapitalization: The borrowing costs incurred by the Company that can be directly attributable to theacquisition and construction or production of qualifying assets will be capitalized and incurred in therelevant asset cost. Other borrowing costs are recognized as expenses based on the amount incurred, andincluded in the current profit and loss. Qualifying assets are defined as assets that require a substantialamount of time (usually more than one year) for construction or production activities before the asset isready for its intended use or sale. These include fixed assets, intangible assets and inventory.
Period of capitalizing the borrowing costs: The Company will start to capitalize the borrowing costsrelated to the qualifying assets when the asset expenditure has been incurred, the borrowing costs havebeen incurred, and the acquisition, construction or production activities necessary to prepare assets fortheir intended use or sale are in progress. Where the acquisition or production of a qualifying asset areinterrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of theborrowing costs shall be suspended. Capitalization of borrowing costs shall cease once the acquisition,construction or production necessary to prepare the qualifying asset for its intended use or sale arecomplete.
Method for calculating the amount of borrowing costs to capitalize: If borrowing funds specificallyfor acquiring, constructing or producing qualifying assets, the amount of interest eligible for capitalizationby the Company will be the actual interest costs incurred during the specific borrowing period minus theinterest income obtained by depositing or temporarily investing unspent borrowed funds. Where a generalborrowing is used for the acquisition, construction or production of a qualifying asset, the Company shallcalculate and determine its amount of interest to be capitalized by taking the weighted average of the
accumulative asset expenditure minus the asset expenditure of the specific borrowing, multiplied by theweighted average interest rate of the general borrowing used.
24.Intangible assets
(1) Service life and its determination basis, estimation situation, amortization method or reviewprocedureThe intangible assets of the Company mainly include land use rights, software, trademarks andpatents. As for intangible assets that are purchased, the actual cost is composed of the actual price paid andother relevant expenditures. For the intangible assets that are invested by investors, the actual cost isdetermined by the agreed value in the investment contract or agreement, but if the agreed value is not fair,the fair value will be taken as the actual cost. Intangible assets are amortized using the composite lifemethod, and the classifications and amortization periods of the Company’s intangible assets are as follows:
| Type | Amortization year |
| Land use right | 50 years |
| 30 patents | 10 years |
| Software | 3-5 years |
| Trademark or domain name | 10 years |
The Company’s land use rights are amortized evenly according to the lease term, starting from thedate of transfer. The Company’s patent rights, non-patented technologies, special software use rights andother intangible software amortized evenly by stages according to whichever period is the shortest: theasset’s estimated useful life, the beneficial period stipulated in the contract, or the period of legal validity.The amount of amortization is included into the current profits and losses or included into the relevantasset cost according to the beneficiaries.
At the end of each year, the Company shall review, and adjust in case of changes, the estimateduseful lives and amortization methods used for intangible assets with limited useful lives; in eachaccounting period, the Company carries out reviews of the estimated useful life of intangible assets whoseuseful life is uncertain. Where there is evidence showing that the useful life of these intangible assets islimited, the Company will estimate the useful life thereof and amortize these intangible assets during theestimated useful life remaining.
(2) Scope of attribution of R&D expenditure and related accounting treatment
The internal R&D expenditures of the Company can be divided into expenditures made at theresearch stage and those made at the development stage, depending on the nature of the expenditure andthe extent of uncertainty on whether the R&D activities will finally form intangible assets.
For internally-generated intangible assets, expenditures at the research stage are included in thecurrent profits and losses when incurred; expenditures at the development stage are recognized as an asset,when the following conditions are met:
? It is technically feasible to complete the intangible assets so that they can be used or sold;? There is an intention to complete and use or sell the intangible assets;? There is a potential market for the products manufactured via the application of the
intangible assets, or there is a potential market for the intangible assets themselves;? There is sufficient support in terms of technological, financial and other resources in orderto complete the development of the intangible assets, and there is the capability to use orsell the intangible asset;
? The expenditures made on the intangible assets during the development stage can be
measured reliably.Expenditures made in the development stage that fail to meet the above conditions shall be includedin the current profits and losses when incurred. The development expenditures previously included in theprofit and loss statement will not be recognized as assets in subsequent periods. The expenditures incurredand capitalized at the development stage are recorded as development expenditures on the balance sheetand will be carried over as the intangible asset on the date when the project is ready for its intended use.If the expenditures made at the research and development stages cannot be distinguished, all the R&Dexpenditures incurred will be fully included in the current profits and losses. The costs of the intangibleassets generated by internal development activities only include the total expenditures incurred from thetime when the capitalization conditions are met to the point when the intangible assets are used for theirintended purposes; for expenditures that are already recorded as such in the profit and loss statementbefore the capitalization conditions are met during development of the same intangible asset, noadjustments will be made.
25.Impairment of long-term assets
On each balance sheet date, the Company shall audit the projects of subsidiaries, joint ventures andassociates, including long-term equity investments, fixed assets, projects under construction, andintangible assets with finite useful lives. If any of the signs listed below are identified, this is an indicationthat the asset may be impaired and the Company will conduct an impairment test. Impairment test iscarried out on the intangible assets with uncertain goodwill and beneficial period and development coststhat have not yet reached their intended usable state at the end of each period, irrespective of whether thereis any indication that the assets may be impaired. If there is difficulty testing the recoverable amount of asingle asset, a test shall be conducted on the asset group which the asset belongs to, or on a combination ofasset groups.
After the impairment test, if the book value of the asset exceeds its recoverable amount, the differenceshall be recognized as an impairment loss. Once such an impairment loss has been confirmed, it shall not
be reversed in the subsequent accounting period. The recoverable amount of an asset is the greater of itsfair value less the net value of asset disposal and present value of expected future cash flow. The followingsigns may indicate asset impairment:
Current market price of the asset drops substantially, with the drop in price being notably higher thanthe expected drop over time or due to the asset’s normal use;? Significant changes occur in the current period, or are predicted to occur in the near future, withregard to the economic, technological or legal environment in which the enterprise conducts itsbusiness operations, or in the asset market, and these changes have or will have negative impactson the enterprise;? The market interest rate or other market investment return rates have risen in the current period,
affecting the enterprise’s discount rate for calculating the asset’s present value of expected futurecash flow, and leading to a substantial decrease in recoverable amounts of the assets;? There is any amount of evidence to prove the asset has been out of date or the physical asset hasbeen damaged;? The asset has been or will be left unused, terminated for use or disposed of ahead of schedule;? There is evidence from the enterprise’s internal reports proving that the economic performance ofthe asset has been lower or will be lower than expected. For example, the net cash flow generatedby the assets or operating profits (or losses) realized is much lower (or higher) than the expectedamounts;? Other signs indicating that the asset may have been impaired.
26. Long-term unamortized expenses
The long-term deferred expenses of the Company refer to the expenses that have been paid, but shallbe borne in the current and future periods with an amortization period of more than one year. Moreover,such expenses shall be subject to average amortization within the benefit period. If long-term deferredexpense items cannot benefit the future accounting periods, the amortized value of such items yet to beamortized shall be fully transferred into the current profits and losses.
27. Contract liabilities
Contract liabilities reflect the obligations of the Company to transfer goods to the client for whichconsideration is received or receivable from the client. Before the Company transfers goods to the client,and the client has paid the consideration in the contract or the Company has obtained the right ofunconditionally collecting the consideration, the contract liabilities are recognized according to thereceived or receivable amount either at the time of actual payment by the client or when the payment isdue―whichever is earlier.
28. Employee remuneration
(1) Accounting treatment method of short-term remuneration
Short-term remunerations mainly include wages, bonuses, allowances and subsidies, employeewelfare, housing provident funds, labor union funds, employee education funds, medical insurancepremiums, industrial injury insurance premiums, and maternity insurance premiums. In the accountingperiod during which the employee has rendered service, the actual short-term remuneration incurred isrecognized as a liability and included into the current profits and losses or related asset costs based on thebeneficiary.
(2) Accounting treatment method of post-employment benefits
The post-employment benefits mainly include basic endowment insurance, unemployment insurance,enterprise and annuity payments, which are classified into defined contribution plans according to the risksand obligations undertaken by the Company. Moreover, the contributions paid into a separate entity inexchange for the employee’s services during the accounting periods at the balance sheet date arerecognized as a liability, and recorded in current profits and losses or relevant asset costs based on thebeneficiary.
(3) Accounting treatment method of dismissal benefits
Dismissal benefits are required in instances when the Company terminates labor relationships with acertain employee prior to the maturity of their labor contract. The Company shall recognize the employeeremuneration liabilities incurred from termination benefits and include them into the current profits andlosses. This occurs either when the Company cannot unilaterally withdraw the termination benefitsprovided by the plan on the termination of the labor relationship or dismissal proposal, or when theCompany recognizes the costs or expenses related to restructuring the payment of terminationbenefits―whichever occurs earlier. The compensations paid exceeding one year will be discounted thenincluded in the current profits or losses.
(4) Accounting treatment method of other long-term employee benefits
Other long-term benefits mainly include long-term incentive plans and long-term benefits. TheCompany conducts accounting treatment according to relevant provisions of the defined contribution plans.
29. Provisions
When obligations relating to contingencies such as external guarantee, pending litigation orarbitration, product quality assurance, layoff plans, loss contracts, restructuring obligations, environmentalpollution control, commitments, and disposal obligation of fixed assets also meet the following conditions,
the Company recognizes it as a liability: the obligation is currently being undertaken by the Company;there is a high possibility that the fulfillment of the obligation will result in the outflow of economicbenefits from the enterprise; and the amount of the obligation can be reliably measured.
Provisions are initially measured according to the best estimate of the expenditure required to settlethe present obligation, taking into account factors relating to contingencies such as risks, uncertainties andthe time value of money. On the balance sheet date, the Company reviews the current best estimates andadjusts the carrying amount of the provisions.
For acquired entities, not under common control, in business mergers, contingent liabilities areinitially measured at fair value. After initial recognition, subsequent measurement is based on the higher ofthe amount recognized as a provision or the remaining balance after deducting cumulative amortizationdetermined by revenue recognition principles from the initial recognition amount.
30. Share-based payment
Share-based payment refers to transactions in which equity instruments are granted or liabilities areincurred based on equity instruments in order to obtain services provided by the employees or other parties.Share-based payments are divided into equity-settled and cash-settled share-based payments.
Equity-settled share-based payments made in exchange for the service of employees are measured atthe fair value on the date at which the equity instrument is granted to employees. When the fair valueamount is contingent on completing a service during a vesting period or achieving specified performanceconditions, the fair value of the equity instruments is measured at the grant date. On each balance sheetdate during the vesting period, the cost or expense for the services received during the period is recognizedbased on the best estimate of the number of equity instruments expected to vest, using the grant-date fairvalue, and recorded as the corresponding increase in capital reserves.
If equity-settled share-based payments are cancelled, they are treated as accelerated exercise on thedate of cancellation and the unrecognized amount is recognised immediately. If an employee or anotherparty chooses not to fulfill a non-vesting condition during the vesting period, this is treated as acancellation of the equity-settled share-based payment. However, if new equity instruments are grantedand it is determined on the grant date that these new equity instruments are intended to replace thecanceled ones, then the replacement equity instruments are treated in the same manner as a modification ofthe terms and conditions of the original equity instruments.
Cash-settled share-based payments shall be measured at the fair value of liabilities, and recognized onthe basis of share options or other equity instruments undertaken by the Company. If excisableimmediately after the grant, the fair value of the liabilities assumed shall be included in the relevant costsor expenses on the granting date, and the liabilities shall be increased accordingly. If it is necessary tocomplete the services in the waiting period or achieve the specified performance conditions before theright is excisable, on each balance sheet date of the waiting period, the services acquired in the current
period shall be included in the cost or expense based on the best estimation of the excisable right, and theliabilities shall be adjusted accordingly according to the fair values of the liabilities assumed by theCompany.On each balance sheet date and settlement date prior to the settlement of relevant liabilities, the fairvalue of the liabilities will be re-measured, with any changes recorded in the profits and losses at thecurrent period.
31. Revenue
Disclose the accounting policies adopted for revenue recognition and measurement by business typeOperating revenues of the company are mainly from sales of goods, rendering labor service andtransferring right to use assets.
? Revenue recognition principleThe Company recognizes the revenue upon fulfillment of its performance obligations within thecontract, that is, when the client obtains control of the relevant goods or services. Acquisition of controlover relevant goods or services means the ability to manage the use of such goods or the provision ofservices and to receive almost all economic benefits therefrom.The Company assesses the contract from the commencement date of the contract and recognizes eachindividual performance obligation included by the contract, and determines if each individual performanceobligation will be fulfilled during a certain period or at a certain time point.The performance obligations are to be fulfilled within a specified period once the Company meets oneof the following conditions; otherwise, the Company is to fulfill the performance obligations at a specifiedtime point:
1) The client obtains and consumes the economic benefits while the Company fulfills the performanceobligations.
2) The client can control goods or services still under construction while the Company is still in theprocess of fulfilling the performance obligations.
3) The goods generated while the Company is in the process of performing the contract areindispensable, and the Company has the right to collect partial payments for the cumulative performanceobligations that have been fulfilled so far within the contract period.
If the performance obligations are performed within the specified period, the Company will recognizethe income within this period in accordance with the progress of the contract’s performance. If theperformance progress cannot be reasonably determined and the costs incurred by the Company are
expected to be compensated, the revenue will be ascertained according to the costs incurred, until theperformance progress can be reasonably determined.If the performance obligations are performed at the specified time point, the Company will recognizethe income at the time when the client obtains control over the relevant goods or services. In judgingwhether the client has obtained control over goods or services, the Company shall consider the followingsigns:
1) The Company has the current right to collect payment for the goods or services.
2) The Company has transferred the legal ownership of the goods to the client.
3) The Company has transferred physical possession of the goods to the client.
4) The Company has transferred the main risks and rewards of ownership of the goods to the client.
5) The customer has accepted the goods or services, etc.
The Company lists the right to receive considerations for transfer of goods or services to the customeras a contract asset, for which the impairment will be withdrawn on the basis of expected credit loss. Theright of the Company to unconditionally receive considerations from the customer is listed as receivables.The Company presents the obligation to transfer goods or services to the customer for considerationsreceived or receivable from the customer as a contract liability.The situation involves different revenue recognition methods and measurement methods for similar businesses using differentoperating models.
? Revenue measurement principle
1) If there are two or more performance obligations in the contract, the Company will apportion thetransaction price to each single performance obligation according to the relative proportion of the separateselling price of the goods or services promised by the single performance obligation at the beginning of thecontract, and the revenue shall be measured according to the transaction price apportioned to each singleperformance obligation.
2) The transaction price refers to the amount of consideration that the Company expects to collect dueto the transfer of goods or services to the client, excluding the amount collected by third parties. Thetransaction price refers to the amount of consideration that the Company expects to collect for transfer ofgoods or services to the client, excluding the amount collected by third parties. The transaction pricerecognized by the Company shall not exceed the amount of recognized accumulated income, which is notlikely to be significantly reversed once the relevant uncertainty is eliminated.
3) If there is significant financing in the contract, the Company shall determine the transaction priceaccording to the amount payable in cash when the client obtains control of the goods or services. Thedifference between the transaction price and the contract consideration shall be amortized by the effective
interest method during the contract period. On the contract start date, if the Company estimates that thetime between the client's acquisition of control over goods or services and the payment of the price by theclient will not exceed one year, the significant financing in the contract shall not be considered.
? Specific method for revenue recognition
1) Revenue recognized by time point
Selling electric appliances, fittings and materials by the Company is the performance obligation at atime point.Revenue recognition conditions for domestic sales commodity: The Company has delivered theproduct to the customer according to the contract terms and the customer has received the product; thepayment has been collected or the receipt voucher has been provided and relevant economic profits mightflow into the Company; main risks and remuneration as for the ownership of the commodity have beentransferred; and legal ownership and control right of the commodity have been transferred.Revenue recognition conditions for exported commodity: The Company has declared the product tothe customs and the product has been delivered according to the contract terms; the bill of lading has beenobtained, the payment has been collected or the receipt voucher has been provided and relevant economicprofits might flow into the Company; main risks and remuneration as for the ownership of the commodityhave been transferred; and legal ownership and control right of the commodity have been transferred.
2) Revenue recognized by performance progress
The technical service revenue of the Company and the business contract between the operating leaseand the customer are the performance obligations to be performed within a period, for which the revenueshall be recognized according to the performance progress.
32. Contract costs
? Method for determining asset amount related to contract cost
The Company’s assets related to the contract cost comprise the contract performance cost and thecontract acquisition cost.
Contract fulfillment costs refer to the costs incurred by the Company to fulfill a contract, arerecognized as an asset when they are not covered by other accounting standards and meet all of thefollowing conditions: the costs are directly related to a specific current or expected contract, includingdirect labor, direct materials, manufacturing overheads (or similar costs), costs explicitly borne by thecustomer, and other costs incurred solely due to the contract; the costs enhance the Company's resourcesfor fulfilling future performance obligations; and the costs are expected to be recoverable.
The contract acquisition cost refers to the incremental cost incurred by the Company for the purposeof securing a contract, which will be recognized in the form of contract acquisition cost as an asset if it isexpected to be recovered. If the amortization period of the assets does not exceed one year, such cost shallbe included as current profit or loss. Incremental cost refers to the cost which will not incur unless acontract is secured by the Company (e.g. sales commission, etc.). Other costs (such as the travel expense,whether or not the contract will be acquired, except the incremental cost which can be recovered asexpected) incurred the Company for purpose of acquiring the contract shall be included in the currentprofit or loss at the time of occurrence, unless those clearly specified to be borne by the customer.
? Asset amortization related to contract cost
The Company’s assets related to contract costs are amortized on the same basis as revenuerecognition of goods related to the asset and recorded in the current profits or losses.
? Asset impairment related to contract cost
When the Company recognizes the impairment loss related to contract cost, the Company shall firstlyrecognize the impairment loss of other assets which are recognized as per other account standards forbusiness enterprises and are related to the contract. Then, if the book value is higher than the differencebetween the remaining consideration expected to be received for the transfer of the commodity associatedwith the asset and the estimated costs to be incurred for the relevant commodity, impairment provision willbe made for the excess portion and recognized as asset impairment loss.
If the factors causing the impairment of prior period change and make the previous differencebetween the above-mentioned items higher than the book value of the asset, the withdrew asset impairmentprovision shall be reversed and included into the current profits or losses, although the book value of assetafter reversion shall not exceed the book value of the asset at the reversion date under the condition of notwithdrawing the impairment provision.
33. Government grants
Government grants are recognized when the conditions attached to them are met and it is probablethat the grants will be received. Government grants of the Company include fiscal appropriation. Asset-related government grants refer to government grants obtained by the Company for purchasing andacquiring long-term assets or forming long-term assets by other ways. Income-related government grantsrefer to those other than asset-related government grants. In case the purpose of a grant is not expresslystipulated in the government document, the Company will categorize the grant according to these aboveprinciples. If it is difficult to categorize the grant, it will be categorized as the income-related governmentgrant.
If a government grant is a monetary asset, it will be measured at the amount received; for the grantappropriated according to the fixed quota or for the grant where there is concrete evidence showing that theCompany is qualified to receive governmental financial support and will be able to receive the support bythe end of the period, the grant will be measured at the receivable; if the government grant is a non-monetary asset, it will be measured at the fair value, or measured at its nominal amount (RMB 1) if the fairvalue cannot be obtained reliably.
If a government grant relating to assets is recognized as deferred income, such grant is recognized inthe current profit or loss based on equal division within the service life of the relevant asset.
If the relevant asset has been sold, transferred, retired or damaged before the end of the service life,the balance of the relevant deferred income that has not been allocated will be transferred into the currentprofit and loss of asset disposal.
Government grants relating to income that compensate future costs, expenses or losses are recognizedas deferred income, and recognized in profit or loss in reporting the related costs, expenses or losses. Thegovernment grants relating to the ordinary activities are included in other income or deducted againstrelevant costs and expenses according to the nature of the accounting event, otherwise, they are included innon-operating income. Government grants unrelated to daily activities will be included in non-operatingincome.
If the Company obtains the subsidized loan as a result of preferential financial policy, there will betwo situations: the Ministry of Finance appropriates the interest subsidy to the lending bank, or theMinistry of Finance directly appropriates the subsidy to the Company, and the accounting treatment foreach of these situations is as follows:
? Where the Ministry of Finance appropriates the subsidy to the lending bank, and the bankprovides the Company with the loan at a discounted interest rate, the Company will usethe actual amount of loan received as the book value of the loan, and calculate the relevantborrowing costs based on the principal of the loan and the interest rate.? Where the Ministry of Finance directly appropriate the interest subsidy to the Company,the Company will deduct the corresponding interest subsidy against the borrowing costs.
Where the governmental grants recognized by the Company need to be returned, the accountingtreatment will be done as follows in the period they are returned:
1) Where the book value of relevant assets is deducted at the time of the initial recognition, the bookvalue of assets will be adjusted.
2) Where there is any deferred income concerned, the book balance of the deferred income will bededucted, but the excessive part will be included in the current profit or loss.
3) For other circumstances, the government grants will be directly included in the current profit orloss.
34. Deferred income tax asset/deferred income tax liability
Deferred income tax asset and deferred tax liability of the Company are calculated and recognizedbased on the differences (temporary differences) between the tax base and the carrying amount of an assetor liability. For the deductible loss and tax credits that can be deducted annually in the subsequent yearsaccording to tax laws, the corresponding deferred income tax assets are recognized. Where the temporarydifferences arise from the initial recognition of goodwill, the corresponding deferred income tax liabilitiesare not recognized. No deferred tax asset or deferred tax liability is recognized where the temporarydifferences arising from the initial recognition of assets or liabilities in a transaction that is not a businessmerger affect neither accounting profit nor taxable profit (or deductible loss). On the balance sheet date,the deferred income tax asset and liability are measured at the applicable tax rates during the period whenthe asset is realized or the liability is settled as expected.
The Company recognizes the deferred income tax asset to the extent that it is probable that the taxableincome will be available against which the deductible temporary differences, deductible losses and taxcredits can be deducted.
35. Lease
(1) Accounting treatment of the leases as lessee
(1) Identification of lease
Lease refers to that the leaser transfers the right to use the asset to the lessee within a certain period toobtain consideration contracts. On the commencement date of the contract, the Company assesses whetherthe contract serves as the lease or includes the lease. If one party to the contract transfers the right tocontrol one or more identified assets during a certain period in exchange for consideration, such contract isor includes lease. To determine whether the contract has transferred the right to control the use of theidentified assets in a certain period of time, the Company assesses whether the customer in the contract isentitled to receive almost all the economic benefits arising from the use of the identified assets during theuse period and is entitled to manage the use of the identified assets during the use period.
If a number of separate leases are contained in one contract, the Company will split the contract andadopt accounting methods to each lease on an individual basis. If a contract includes both lease and non-lease components, the Company will separate the lease from the non-lease component before accountingtreatment.
(2) The Company serves as the lessee
1) Lease confirmation
At the commencement of the lease term, the right-of-use assets and lease liabilities shall berecognized for the lease by the Company. Refer to Note 4 on "24. Right-of-use assets" and "31. Leaseliabilities" for details on the recognition and measurement of right-of-use assets and lease liabilities.
2) Lease change
Lease change refers to the change in lease scope, lease consideration and lease term beyond the termsof the original contract, including increasing or terminating the right to use one or more leased assets,extending or shortening the lease term stipulated in the contract, etc. The effective date of lease changerefers to the date when the Parties reach the agreement on lease change.
When the lease changes and meets the following conditions, the Company will treat it as a separatelease: 1) the lease change expands the lease scope by adding one or more right-of-use leased assets orextended leases; 2) the increased consideration is equivalent to the single price of the expanded lease scopeor extension of lease term adjusted according to the contract.
In case where accounting treatment is not made for lease change as a single lease, on the effectivedate of lease change, the Company will appropriate the consideration of the changed contract according tothe relevant provisions of the lease criteria and redefine the updated lease term. In addition, the Companywill discount the changed lease payment according to the revised discount rate, so as to remeasure thelease liabilities. In calculating the present value of the lease payment after the change, the Company usesthe interest rate implicit in lease for the remaining lease term as the discount rate. if the interest rateimplicit in lease for the remaining lease term cannot be determined, the incremental borrowing interest rateof the lessee on the effective date of lease change shall be used as the discount rate by the Company. Withregard to the impact of the above adjustment of lease liabilities, the Company adopts accounting methodsin the following situations: 1) in the event that the lease scope is narrowed down or the lease term isshortened as a result of the lease change, the lessee shall reduce the book value of the right-of-use assets,and the relevant gains or losses from the partial or complete termination of the lease shall be included intothe current loss and profit; 2) for the lease liabilities remeasured due to other lease changes, the lessee shalladjust the book value of the right-of-use assets accordingly.
3) Short-term leases and leases of low-value assets
For short-term leases with a lease term of no more than 12 months and low-value asset leases at a lowvalue when individual leased assets are brand new, the Company chooses not to recognize the right-of-useassets and lease liabilities. Lease payments under short-term leases and leases of low-value assets arerecognized by the Company on a straight-line basis or other systematic and reasonable basis over the leaseterm, and included into the cost of the related assets or current profits or losses.
(2) Accounting treatment of the lease as lessor
On the basis of the contract is evaluated as a lease or including a lease in (1), the Company, as thelessor, divides the lease into financial lease and operating lease at the commencement of the lease.A lease that transfers in substance almost all the risks and rewards incident to ownership of a leasedasset is classified as a financial lease by the lessor. A lease other than the financial lease is an operatinglease.The Company usually classifies a lease as a financial lease if one or more of the following situationsexist: 1) the ownership of the leased asset is transferred to the lessee at the expiration of the lease term; 2)the lessee has the right to choose to purchase the leased asset; the established purchase price is expected tobe much lower than the fair value of the leased asset when exercising the right of choice, and hence it canbe reasonably determined that the lessee will exercise this right of choice on the inception of lease; 3) thelease term accounts for a substantial proportion (not less than 75%) of the service life of the leased asset,notwithstanding that the ownership of the asset will not be transferred; 4) on the inception of lease, thepresent value of the lease receipts is almost equal to the fair value of the leased asset (not less than 90% ofthe fair value of the leased asset.); and 5) the leased assets are of a specialized nature that only the lesseecan use them without making major modifications. The Company may also classify a lease as a financiallease if one or more of the following signs exist: 1) if the lessee cancels the lease, the resulting loss to thelessor shall be borne by the lessee; 2) the gain or loss arising from the fluctuation in the fair value of theresidual value of the asset shall be attributable to the lessee; and 3) the lessee is able to continue the leaseto the next period at a rent much lower than the market level.
1) Accounting treatment of financial lease
Initial measurement
On the commencement date of lease term, the Company recognizes financial lease receivables forfinancial lease and derecognizes financial lease assets. Upon initial measurement of financial leaseaccounts receivable, the Company takes net investment in lease as entry value of financial lease accountsreceivable.
Net investment in lease is the sum of unsecured residual value and the present value of outstandinglease receipts discounted on interest rate implicit in lease on the commencement date of the lease term.Lease receipts refer to the amount that the lessor shall collect from the lessee for transferring the right touse the leased assets during the lease term, including: 1) the amount of fixed payment and substantial fixedpayment to be paid by the lessee, net of relevant amount of lease incentives if any; 2) variable leasepayments that are based on an index or rate, which shall be determined at the time of initial measurementbased on the index or rate on the commencement date of the lease term; 3) exercise price of call option,given that the lessee will reasonably exercise such option; 4) amount payable by the lessee for exercisingthe option to terminate the lease, if it is indicated during the lease term that the lessee will exercise the
option to terminate the lease; 5) the residual value of the guarantee provided to the lessor by the lessee, aparty related to the lessee and an independent third party with the financial ability to meet the guaranteeobligation.Subsequent measurementThe Company calculates and recognizes the interest income in each period of the lease term accordingto the fixed periodic rate. Such periodic rate refers to the implicit discount rate used to determine the netinvestment in the lease (in case of sublease, the discount rate of the original lease is adopted if the interestrate implicit in lease of the sublease cannot be determined (adjustments are made based on the initial directcosts associated with sublease)), or the revised discount rate determined according to the relevantprovisions when the change of the financial lease has not been treated as a separate lease for accounting,and it is satisfied that the lease will be classified as the financial lease if the change takes effect at thebeginning of the lease.
Accounting treatment of lease changeWhen a change happens to the financial lease and meets the following conditions, the Company willtreat it as a separate lease: 1) the change expands the lease scope by increasing the right to use one or moreleased assets; 2) the increased consideration is equivalent to the single price for the expanded portion oflease scope adjusted according to contract circumstances.If such a change to the financial lease is not accounted for as a separate lease and the condition issatisfied that if the change becomes effective on the commencement date of the lease, the lease is classifiedas an operating lease, the Company will account for it as a new lease from the effective date of the leasechange and regard the net lease investment prior to the effective date of the lease change as the book valueof the leased asset.
2) Accounting treatment of operating leases
Treatment of rentThe Company adopts the straight-line method or other systematic and reasonable methods torecognize the lease receipts from operating leases as rental income during all periods within the lease term.
Incentive measures providedIf a rent-free period is provided, total rent shall be amortized by adopting the straight-line method orother systematic and reasonable methods within the lease term not excluding the rent-free period, and therental income shall be recognized in the rent-free period. Certain costs incurred by the lessee, if undertakenby the Company, shall be excluded from total rental income and the balance of rental income afterdeducting these costs shall be amortized within the lease term.
Initial direct costs
The initial direct costs incurred by the Company related to the operating lease shall be capitalized tothe cost of leased underlying asset and shall be included in current profits and losses on the same basis asrecognition of rental income during the lease term.
Depreciation
For fixed assets included in assets under operating leases, accrual depreciation shall base on thedepreciation policy adopted by the Company for similar assets. Other assets under operating leases shall beamortized in a systematic and reasonable manner.
Variable lease payments
Variable lease payments acquired by the Company in connection with operating leases that are notincluded in the lease receipts are recognized in the current profits and losses when actually incurred.
Change of operating lease
In case of changes in the operating lease, the Company will treat it as a new lease as of the effectivedate of the change, and the lease advance or accounts receivable related to the lease before the change willbe regarded as the amount received from the new lease.
36. Other significant accounting policies and accounting estimates
When preparing financial statements, the Company’s management shall make estimates andassumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,income, and expenses. Actual results may differ from these estimates. The Company’s managementcontinuously evaluates the key assumptions and uncertainties involved in these estimates. The impact ofchanges in accounting estimates is recognized in the current period and future periods.
The following accounting estimates and key assumptions present significant risks that could lead tosubstantial adjustments to the carrying amounts of assets and liabilities in future periods:
(1) Impairment of financial assets
The impairment of financial assets is assessed using the expected credit loss (ECL) model, whichrequires to make significant judgment and estimation. The ECL model takes into account all reasonableand supportable information, including forward-looking information. When making these judgments andestimations, the Company considers historical data with factors such as economic policies, macroeconomicindicators, industry risks, external market environment, technological environment, and changes incustomer circumstances to infer expected changes in the credit risk of debtors.
(2) Inventory impairment provision
The determination basis of the net realizable value of inventory: for inventories directly available forsale, such as finished goods and materials intended for sale, the net realizable value is determined based on
the estimated selling price of the inventory minus the estimated selling expenses and related taxes. Forinventories held to fulfill sales contracts or service contracts, the net realizable value is calculated based onthe contract price. If the quantity of inventory held exceeds the quantity ordered under the sales contract,the net realizable value of the excess inventory is determined based on the general selling price.Method of provision for inventory impairment: Inventories are valued at the lower of cost or netrealizable value at the end of the period. Based on a comprehensive physical count of inventory at period-end, a provision for inventory write-down is made for the portion of inventory that is damaged, partially orcompletely obsolete, or whose selling price is lower than its cost, making the cost unrecoverable.If the factors that caused the inventory value to be written down in previous years no longer exist, theamount written down should be reversed. The reversal amount is limited to the amount originally writtendown and is recognized in the current period’s profit or loss.
(3) Accounting estimates for goodwill impairment provision
The Company conducts an annual impairment test for goodwill. The recoverable amount of the assetgroup or combination of asset groups that include goodwill is determined based on the present value of theexpected future cash flows, which requires the use of accounting estimates.If management revises the gross margin used in calculating the future cash flows of the asset group orgroup of asset groups and the revised gross margin is lower than the current one, the Company will need toincrease the impairment provision for goodwill.If the management revises the pre-tax discount rate applied to discounted cash flows, and the revisedpre-tax discount rate is higher than the current discount rate, the Company needs to make provision forimpairment of goodwill.
If the actual gross profit margin or pre-tax discount rate is higher or lower than the management'sestimate, the Company cannot reverse the previously recognized impairment loss of goodwill.
(4) Accounting estimates for impairment provisions of fixed assets
The Company conducts impairment tests on fixed assets such as buildings and machinery that showsigns of impairment on the balance sheet date. The recoverable amount of fixed assets is the higher of thepresent value of their estimated future cash flows or the net amount of the asset's fair value minus disposalcosts, which requires the use of accounting estimates.
If management revises the gross margin used in calculating the future cash flows of the asset group orgroup of asset groups and the revised gross margin is lower than the current one, the Company will need toincrease the impairment provision for fixed assets.
If the management revises the pre-tax discount rate applied to discounted cash flows, and the revisedpre-tax discount rate is higher than the current discount rate, the Company needs to make provision forimpairment of fixed assets.
If the actual gross profit margin or pre-tax discount rate is higher or lower than the management'sestimate, the Company cannot reverse the previously recognized impairment loss of fixed assets.
(5) Accounting estimate for recognition of deferred income tax assets
The estimation of deferred income tax assets requires an estimation of the taxable income for eachfuture year and the applicable tax rate. The realization of deferred income tax assets depends on whetherthe group is likely to obtain sufficient taxable income in the future. Changes in future tax rates and thetiming of the reversal of temporary differences can also affect income tax expenses (benefits) and thebalance of deferred taxes. Changes in these estimates may lead to significant adjustments to deferredincome tax assets.
(6) The service life of fixed assets and intangible assets
The Company reviews the estimated service lives of fixed assets and intangible assets at least at theend of each fiscal year. The expected service life is determined by the management based on the historicalexperience of similar assets, reference to the estimates commonly used in the same industry, and theexpected technological updates. When there are significant changes in the previous estimates, thedepreciation and amortization expenses for future periods are adjusted accordingly.
37. Significant accounting policy and accounting estimate changes
(1) Significant accounting policy changes
□Applicable ?Not applicable
(2) Significant accounting estimate changes
□Applicable ?Not applicable
(3) Relevant financial statement items at the beginning of 2024 when the adjustments stipulated inthe new accounting standards apply for the first time
□Applicable ?Not applicable
38. Others
1. Right-of-use assets
The right-of-use asset refers to the right of the Company to use the leased assets as a lessee during the
lease term.
(1) Initial measurement
On the commencement date of the lease term, the Company carries out initial measurement to the use-of-right asset. The cost comprises the following four items: 1) initial measurement amount of lease
liabilities; 2) the amount of lease payment made on or before commencement date of lease term, net ofrelevant amount of used lease incentives (if any); 3) the initial direct cost incurred (i.e., the incrementalcost incurred by reaching the lease agreement); 4) costs expected to be incurred to disassemble and removethe leased assets, restore the site where the leased assets are located or restore the leased assets to theconditions as agreed under the terms of the lease, excluding costs incurred to produce the inventory.
(2) Subsequent measurement
On the commencement date of the lease term, the Company carries out subsequent measurement tothe right-of-use assets in the cost mode, that is, measuring the right-of-use assets by deducting the accrueddepreciation amount and accrued impairment loss from the cost. Where the Company remeasures the leaseliabilities according to relevant provisions of the lease criterion, the book value of the use-of-right assetshall be adjusted correspondingly.Depreciation of right-of-use assetsOn the commencement date of the lease term, the provision for depreciation shall be made by theCompany to the right-of-use assets. Generally, the depreciation amount of the use-of-right assets is accruedfrom the month when the lease term starts. The accrued depreciation amount shall be recognized as thecost of relevant assets or current profit or loss according to the purpose of the right-of-use assets.
When determining the depreciation method of right-of-use asset, the Company shall make decisionsaccording to the expected consumption method of the economic benefits related to the right-of-use assetand accrue depreciation to the right-of-use asset with the linear method.
When determining the depreciation years of the right-of-use asset, the Company shall follow theprinciples below: if the Company can reasonably determine that the ownership of the leased asset isacquired at the expiration of the lease term, depreciation shall be accrued within the remaining service lifeof the leased asset. Where it is not reasonably certain that the ownership of the lease assets can be obtainedupon expiry of lease term, the lease assets shall be depreciated over the shorter of the lease term and theremaining service life of the lease assets.
Impairment of right-of-use assets
In case of impairment of use-of-right asset, the Company shall make subsequent depreciation as perthe book value of use-of-right asset after the impairment loss is deducted.
2. Goodwill
Goodwill refers to the excess of the cost of an equity investment or the cost of a business merger notunder common control over the fair value of the identifiable net assets acquired from the investee or theacquiree as of the acquisition date or purchase date.
Goodwill related to subsidiaries is separately presented in the consolidated financial statements, whilegoodwill related to associates and joint ventures is included in the carrying amount of long-term equityinvestments.For goodwill arising from business mergers, the Company allocates its carrying amount to therelevant asset groups in a reasonable manner from the acquisition date. If it is difficult to allocate goodwillto the relevant asset groups, it is allocated to the relevant group of asset groups. When conductingimpairment tests on asset groups or combinations of asset groups that include goodwill, if there areindications of impairment related to the asset group or combination of asset groups with goodwill, firstlyconducting impairment tests on the asset group or combination of asset groups without goodwill,calculating the recoverable amount, and comparing it with the carrying amount to determine thecorresponding impairment loss. Then, conducting impairment tests on the asset group or combination ofasset groups with goodwill, comparing the carrying amount with the recoverable amount, and if therecoverable amount is lower than the carrying amount, the impairment loss amount is firstly offset againstthe carrying amount of goodwill in the asset group or combination of asset groups, and then proportionallyoffset against the carrying amount of other assets in the asset group or combination of asset groups,excluding goodwill, based on the proportion of their carrying amounts.
3. Lease liabilities
(1) Initial measurement
The Company shall initially measure the lease liabilities according to the present value of the lease
payment unpaid on the commencement date of the lease term.
1) Lease payment
The lease payment refers to the payment made by the Company to the leaser as for the right of use theleased assets during the lease term, including: 1) fixed payment and practical fixed payment, with relevantlease incentive (if any) deducted; 2) variable lease payments that are based on an index or rate, which shallbe determined at the time of initial measurement based on the index or rate on the commencement date ofthe lease term; 3) the exercise price of a purchase option if the Company is reasonably certain to exercisethat option; 4) the amount payable for exercising the option to terminate the lease if the Company intendsto exercise the option to terminate the lease during the lease term; 5)expected payable amount based onsecured residual value provided by the Company.
2) Discount rate
In calculating the present value of the lease payments, the Company adopts the interest rate embeddedin the lease as the discount rate. The rate is the interest rate that equates the sum of present value of thelessor's lease receipts and the present value of the unsecured residual value to the sum of the fair value of
the leased asset and the lessor's initial direct costs. If the Company is unable to determine the interest rateembedded in the lease, it will adopt the incremental borrowing rate as the discount rate. The incrementalloan interest rate is defined as the interest rate that the Company would have to pay to borrow, for a termsimilar to the duration of the lease and with similar security, the funds necessary to obtain an asset ofsimilar value to the asset by right of use in a similar economic environment. The interest rate is related tothe following matters: 1) the Company's own situation, including the debt repayment ability and creditstatus of the Group; 2) the term of the "loan", i.e. the lease term; 3) the amount of "borrowed" funds, i.e.the amount of lease liabilities; 4) the "mortgage conditions", i.e. the nature and quality of the underlyingassets; 5) the economic environment, including the jurisdiction where the lessee is located, the valuationcurrency, and the contract signing time. The incremental borrowing rate is determined by considering theabove factors and adjusting the bank loan interest rate which is as a basis.
(2) Subsequent measurement
When the lease term commences, the Company shall make subsequent measurement for the leaseliabilities on the basis of principles below: 1) the carrying account of increased lease liabilities when theinterests of lease liabilities are recognized; 2) the carrying account of decreased lease liabilities when thelease payment is made; 3) the book value of remeasured lease liabilities when the lease payment ischanged due to revaluation, lease change or other reasons.The interest expenses of lease liabilities in each period of the lease term are calculated in accordancewith the fixed periodic interest rate, and are included in the current profit or loss, unless capitalization isrequired. The periodic interest rate refers to the discount rate taken by the Company for initialmeasurement or the revised discount rate taken by the Company when it is necessary to remeasure thelease liabilities as per the revised discount rate due to lease payment change or lease change.
(3) Re-measurement
After the commencement date of the lease term, the Company remeasures the lease liabilities at thepresent value of the revised lease payments and adjusts the book value of the right-of-use asset accordingly,if any of the following occurs. If the book value of the right-to-use assets has been reduced to zero, but thelease liabilities still need to be further reduced, the Company shall include the remaining amount in theprofits and losses of the current period. 1) Substantial fixed payment amount changes (in this case, theoriginal discount rate is used for discounting); 2) changes in the estimated payable amount of the securedresidual value (in this case, the original discount rate is used for discounting); 3) changes in the index orratio used to determine lease payments (in this case, the revised discount rate is used for discounting); 4)changes in the evaluation results of purchase option (in this case, the revised discount rate is used fordiscounting); 5) changes in the evaluation results or actual exercise of renewal option or option toterminate the lease (in this case, the revised discount rate is used for discounting).
4. Termination of operation
Termination of operation refers to a separately identifiable component of the Company that meets anyof the following criteria and has either been disposed of or classified as held for sale: 1) the componentrepresents a separate major line of business or a separate geographical area of operations; 2) thecomponent is part of a single coordinated plan to dispose of a separate major line of business or a separategeographical area of operations; 3) the component is a subsidiary acquired exclusively with a view toresale.
In the income statement, the Company has added the items "net profit from continuing operations"and "net profit from discontinued operations" under the "net profit" item in the income statement, to reflectthe post-tax amounts of continuing-operations-related gains and losses and termination-of-operation-related gains and losses, respectively. Termination-of-operation-related gains and losses shall be presentedas "gains and losses from termination of operation", and the termination of operation gains and lossesshould be presented for the entire reporting period, not only for the reporting period following therecognition as termination of operation.VI. Taxation
1. Main tax categories and tax rates
| Category | Tax base | Tax rate |
| Added-value tax | Income from sales of goods | 13% |
| Added-value tax | Income from provision of technical services | 6% |
| Added-value tax | Rental income | 5% |
| City maintenance and construction tax | Turnover tax payable | 7% |
| Corporate income tax | Taxable income | 15%, 25%, 20% |
| Education surcharge | Turnover tax payable | 3% |
| Local education surcharge | Turnover tax payable | 2% |
| House tax | 70% of the original value of the house | 1.2% |
| House tax | Rental income | 12% |
| Land use tax | Total land area | RMB 5-10/m2 |
Disclosure of taxpayers with different corporate income tax rates
| Name of taxpayer | Income tax rate |
| Hangzhou Robam Appliances Co., Ltd. | 15% |
| Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. | 15% |
| Zhejiang Cookingfuture Technology Co., Ltd. | 15% |
| Beijing Robam Appliances Sales Co., Ltd. | 25% |
| Shanghai Robam Appliances Sales Co., Ltd. | 25% |
| Hangzhou MingQi Electric Co., Ltd. | 25% |
| De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | 25% |
| Hangzhou Robam Fuchuang Investment Management Co., Ltd. | 20% |
| Hangzhou Jinhe Electric Appliances Co., Ltd. | 25% |
| Robam Appliances Holding (HK) Co., Ltd.*1 | Two-tiered tax system |
| Robam International (HK) Trading Co., Ltd.*1 | Two-tiered tax system |
| Chengdu Robam Innovation Technology Co., Ltd. | 20% |
| Robam Appliances U.S. Holding Co., Ltd.*2 | State tax, federal tax |
| Robam Appliances Los Angeles Trade Co., Ltd.*2 | State tax, federal tax |
*1: The Company's subsidiaries, Robam Appliances Holding (HK) Co., Ltd. and Robam International (HK) Trading Co., Ltd., aresubject to the Hong Kong Profits Tax regime. Under the two-tiered tax system, taxable profits up to HKD 2,000,000 are subject toa tax rate of 8.25%, while the portion of taxable profits exceeding HKD 2,000,000 is taxed at a rate of 16.50%.*2: Federal tax: at a uniform rate of 21%; State tax: levied based on the tax rate required by the tax laws of the state where theentity is registered.
2. Preferential tax policy
? Preferential income tax policyThe Company obtained the Certificate of High-Tech Enterprise (Certificate No.: GR202333003384)jointly issued by Department of Science and Technology of Zhejiang Province, Zhejiang ProvincialDepartment of Finance, Zhejiang Provincial Tax Service, State Taxation Administration, on December 8,2023. The certificate is valid for 3 years. According to the relevant provisions, after being identified as ahigh-tech enterprise, the Company will enjoy the relevant preferential policies of the state on high-techenterprises for three consecutive years (i.e., the Company is entitled to the preferential income tax policyfrom January 01, 2023 to December 31, 2025), and the corporate income tax shall be levied at the rate of15%.The subsidiary of the Company, Shengzhou Kinde Intelligent Kitchen Appliances Co., Ltd.(hereinafter referred to as Shengzhou Kinde), obtained the Certificate of High-tech Enterprise (CertificateNo.: GR202233010421) jointly issued by Department of Science and Technology of Zhejiang Province,Zhejiang Provincial Department of Finance, and Zhejiang Provincial Tax Service, State TaxationAdministration on December 24, 2022. After the recognition, it will enjoy the preferential tax policy of thestate on high-tech enterprises for three consecutive years (i.e., it is entitled to the preferential income taxpolicy from January 1, 2022 to December 31, 2024), and its corporate income tax shall be levied at the taxrate of 15%.According to the Announcement No. 12 [2023] of the Ministry of Finance and the State TaxationAdministration, Announcement on the Relevant Tax and Fee Policies for Further Supporting theDevelopment of Micro and Small Enterprises and Individual Industrial and Commercial Households,Hangzhou Robam Fuchuang Investment Management Co., Ltd. and Chengdu Robam InnovationTechnology Co., Ltd., subsidiaries of the Company, as small and micro enterprises, are allowed tocalculate their taxable income at a reduced rate of 25% of the regular amount, and pay corporate incometax at a rate of 20%. This policy will be in effect until December 31, 2027.? Preferential VAT policyAccording to the Notice on Value-Added Tax Policies for Software Products Issued by the Ministryof Finance and the State Taxation Administration (CS [2011] No. 100), the Company's sales of embeddedsoftware products are eligible for immediate VAT refund after collection.
According to the Announcement No. 43 of 2023 issued by the Ministry of Finance and the StateAdministration of Taxation, Notice of the Additional Value-Added Tax Credit Policy for AdvancedManufacturing Enterprises, the Company will enjoy the policy of incremental deduction of 5% of thepayable value-added tax amount by advanced manufacturing enterprises based on the deductible input taxamount for the period from January 1, 2023 to December 31, 2027.
VII. Notes to items in the consolidated financial statements
1. Cash and cash equivalents
In RMB
| Item | Ending balance | Beginning balance |
| Cash in hand | 232,660.84 | 62,267.64 |
| Deposit in bank | 1,015,800,859.35 | 1,877,703,911.46 |
| Other cash and cash equivalents | 131,804,211.57 | 107,284,566.01 |
| Total | 1,147,837,731.76 | 1,985,050,745.11 |
| Including: total amount of funds deposited overseas | 7,987,864.36 | 3,588,900.00 |
Other description
Note: The other cash and cash equivalents are RMB 131,804,211.57, including the L/G margin ofRMB 89,105,875.26, the bill acceptance margin of RMB 41,826,555.86 and the ETC margin of RMB16,000.00, the use of which are limited; and the Alipay and WeChat wallet balance is RMB 855,780.45,which can be withdrawn without any limit at any time.
Use of restricted cash and cash equivalents
| Item | Ending balance | Beginning balance |
| L/G margin | 89,105,875.26 | 83,153,343.90 |
| Bill acceptance margin | 41,826,555.86 | 23,717,043.12 |
| ETC security deposits | 16,000.00 | 14,000.00 |
| Total | 130,948,431.12 | 106,884,387.02 |
2. Financial assets held for trading
In RMB
| Item | Ending balance | Beginning balance |
| Financial assets measured at fair value with changes included into current profit or loss | 2,551,000,029.50 | 2,730,000,000.00 |
| Including: | ||
| financial products | 2,551,000,029.50 | 2,730,000,000.00 |
| Total | 2,551,000,029.50 | 2,730,000,000.00 |
3.Notes receivable
(1) Classified presentation of notes receivable
In RMB
| Item | Ending balance | Beginning balance |
| Banker’s acceptance | 365,685,088.75 | 690,184,154.22 |
| Trade acceptance | 3,113,544.92 | 6,100,777.42 |
| Total | 368,798,633.67 | 696,284,931.64 |
(2) Classification of disclosure according to the bad debt provision method
In RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Including: | ||||||||||
| Notes receivable with a collective bad debt | 368,962,504.45 | 100.00% | 163,870.78 | 0.04% | 368,798,633.67 | 696,606,025.20 | 100.00% | 321,093.56 | 0.05% | 696,284,931.64 |
| Including: | ||||||||||
| Banker’s acceptance | 365,685,088.75 | 99.11% | 365,685,088.75 | 690,184,154.22 | 99.08% | 690,184,154.22 | ||||
| Trade acceptance | 3,277,415.70 | 0.89% | 163,870.78 | 5.00% | 3,113,544.92 | 6,421,870.98 | 0.92% | 321,093.56 | 5.00% | 6,100,777.42 |
| Total | 368,962,504.45 | 100.00% | 163,870.78 | 0.04% | 368,798,633.67 | 696,606,025.20 | 100.00% | 321,093.56 | 0.05% | 696,284,931.64 |
Collective bad debt provision:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Percentage of provision | |
| Banker’s acceptances combined | 365,685,088.75 | ||
| Trade acceptances combined | 3,277,415.70 | 163,870.78 | 5.00% |
| Total | 368,962,504.45 | 163,870.78 | |
If provision for bad debts of notes receivable is made according to the general model of expected credit loss:
□Applicable ?Not applicable
(3) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
Type
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Banker’s acceptance | ||||||
| Trade acceptance | 321,093.56 | -157,222.78 | 163,870.78 | |||
| Total | 321,093.56 | -157,222.78 | 163,870.78 | |||
Significant recoveries or reversals of provisions for bad debts during the reporting period:
□Applicable ?Not applicable
(4) Notes receivable pledged by the Company at the end of the period
There were no notes receivable that had been pledged at the end of the period.
(5) Notes receivable that has been endorsed or discounted by the Company and not due on the balancesheet date at the end of the periodThere were no notes receivable that had been endorsed or discounted by the Company and not due on thebalance sheet date at the end of the period.
(6) Notes receivable actually written off in the current period
Notes receivable not written off during the period
4. Accounts receivable
(1) Disclosure by aging of accounts
In RMB
| Age | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Within 1 year (including 1 year) | 1,462,399,608.56 | 1,557,020,494.66 |
| 1-2 years | 532,439,823.04 | 541,557,234.61 |
| 2-3 years | 776,505,528.84 | 886,738,162.41 |
| More than 3 years | 313,142,753.37 | 48,881,334.70 |
| 3-4 years | 297,700,654.57 | 35,197,495.87 |
| 4-5 years | 6,255,952.06 | 6,690,817.20 |
| More than 5 years | 9,186,146.74 | 6,993,021.63 |
| Total | 3,084,487,713.81 | 3,034,197,226.38 |
(2) Classification of disclosure according to the bad debt provision method
In RMB
| Type | Ending balance | Beginning balance | ||||
| Book balance | Bad debt | Book | Book balance | Bad debt provision | Book | |
provision
| provision | value | value | |
Amount
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Accounts receivable with individual bad debt provisions | 1,630,116,079.65 | 52.85% | 1,115,622,444.35 | 68.44% | 514,493,635.30 | 1,645,394,906.63 | 54.23% | 1,131,734,880.57 | 68.78% | 513,660,026.06 |
| Including: | ||||||||||
| Accounts receivable with a collective bad debt provision | 1,454,371,634.16 | 47.15% | 105,734,341.57 | 7.27% | 1,348,637,292.59 | 1,388,802,319.75 | 45.77% | 92,446,749.48 | 6.66% | 1,296,355,570.27 |
| Including: | ||||||||||
| Aging combination | 1,454,371,634.16 | 47.15% | 105,734,341.57 | 7.27% | 1,348,637,292.59 | 1,388,802,319.75 | 45.77% | 92,446,749.48 | 6.66% | 1,296,355,570.27 |
| Total | 3,084,487,713.81 | 100.00% | 1,221,356,785.92 | 39.60% | 1,863,130,927.89 | 3,034,197,226.38 | 100.00% | 1,224,181,630.05 | 40.35% | 1,810,015,596.33 |
Individual bad debt provision:
In RMB
| Name | Beginning balance | Ending balance | ||||
| Book balance | Bad debt provision | Book balance | Bad debt provision | Percentage of provision | Reasons for provision | |
| Unit 1 | 660,039,726.23 | 660,039,726.23 | 658,945,936.78 | 658,945,936.78 | 100.00% | Expected to be difficult to recover |
| Unit 2 | 388,093,418.16 | 116,428,025.44 | 355,627,952.88 | 106,688,385.87 | 30.00% | Expected to be difficult to fully recover |
| Unit 3 | 201,626,455.66 | 86,259,958.01 | 241,053,412.05 | 105,439,212.29 | 43.74% | Expected to be difficult to fully recover |
| Unit 4 | 103,644,563.87 | 62,549,255.29 | 95,720,766.37 | 61,418,433.11 | 64.16% | Expected to be difficult to fully recover |
| Unit 5 | 78,105,963.23 | 78,105,963.23 | 78,105,963.23 | 78,105,963.23 | 100.00% | Expected to be difficult to recover |
| Unit 6 | 29,833,027.36 | 20,883,119.15 | 27,931,724.10 | 14,952,948.85 | 53.53% | Expected to be difficult to fully recover |
| Unit 7 | 28,796,628.81 | 12,808,177.77 | 28,769,213.01 | 10,387,277.95 | 36.11% | Expected to be difficult to fully recover |
| Unit 8 | 25,826,189.64 | 17,748,183.70 | 23,326,159.14 | 14,689,394.40 | 62.97% | Expected to be difficult to fully recover |
| Unit 9 | 22,983,529.61 | 15,004,193.26 | 21,737,772.41 | 10,699,859.15 | 49.22% | Expected to be difficult to fully recover |
| Unit 10 | 15,100,611.29 | 8,471,506.90 | 15,028,917.55 | 8,113,002.52 | 53.98% | Expected to be difficult to fully |
recover
| recover | ||||||
| Unit 11 | 13,643,117.43 | 7,265,607.25 | 13,818,085.83 | 7,388,085.13 | 53.47% | Expected to be difficult to fully recover |
| Unit 12 | 11,403,482.66 | 6,897,017.86 | 9,080,624.77 | 5,372,708.62 | 59.17% | Expected to be difficult to fully recover |
| Unit 13 | 9,391,156.30 | 4,698,425.06 | 8,175,161.48 | 3,847,228.69 | 47.06% | Expected to be difficult to fully recover |
| Unit 14 | 8,175,007.62 | 3,440,071.29 | 8,175,007.62 | 3,440,071.29 | 42.08% | Expected to be difficult to fully recover |
| Unit 15 | 7,305,800.75 | 5,114,060.53 | 7,151,711.18 | 2,896,821.17 | 40.51% | Expected to be difficult to fully recover |
| Unit 16 | 3,921,670.93 | 2,745,169.65 | 5,133,382.93 | 3,593,368.05 | 70.00% | Expected to be difficult to fully recover |
| Unit 17 | 3,616,362.19 | 2,531,453.53 | 3,616,362.19 | 2,531,453.53 | 70.00% | Expected to be difficult to fully recover |
| Unit 18 | 3,317,253.79 | 1,554,840.55 | 3,584,790.07 | 1,672,115.95 | 46.64% | Expected to be difficult to fully recover |
| Unit 19 | 3,310,609.08 | 1,715,551.82 | 3,519,010.46 | 1,829,963.77 | 52.00% | Expected to be difficult to fully recover |
| Unit 20 | 3,056,422.32 | 1,145,907.85 | 1,746,554.15 | 1,222,587.91 | 70.00% | Expected to be difficult to fully recover |
| Other Subtotal | 24,203,909.70 | 16,328,666.20 | 19,867,571.45 | 12,387,626.09 | 62.35% | Expected to be difficult to fully recover |
| Total | 1,645,394,906.63 | 1,131,734,880.57 | 1,630,116,079.65 | 1,115,622,444.35 |
Collective bad debt provision:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Percentage of provision | |
| With 1 year | 1,200,759,895.28 | 60,037,995.28 | 5.00% |
| 1-2 years | 167,397,237.66 | 16,739,723.77 | 10.00% |
| 2-3 years | 58,742,354.68 | 11,748,470.94 | 20.00% |
| 3-4 years | 19,180,194.20 | 9,590,097.10 | 50.00% |
| 4-5 | 3,369,489.28 | 2,695,591.42 | 80.00% |
| More than 5 years | 4,922,463.06 | 4,922,463.06 | 100.00% |
| Total | 1,454,371,634.16 | 105,734,341.57 | |
If provision for bad debts of accounts receivable is made according to the general model of expected credit loss:
□Applicable ?Not applicable
(3) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Bad debt reserves for accounts receivable | 1,224,181,630.05 | 75,957,015.33 | 76,760,426.90 | 2,021,432.56 | 1,221,356,785.92 | |
| Total | 1,224,181,630.05 | 75,957,015.33 | 76,760,426.90 | 2,021,432.56 | 1,221,356,785.92 | |
Significant recoveries or reversals of provisions for bad debts during the reporting period:
In RMB
| Unit | Amount of recovery or reversal | Reason for reversal | Recovery method | Basis and rationality of determining the original provision ratio for bad debts |
| Unit 1 | 35,932,304.06 | Bank transfers, offsets | ||
| Unit 2 | 12,943,912.34 | Bank transfers, house mortgage | ||
| Unit 3 | 8,367,635.05 | Bank transfers, house mortgage | ||
| Unit 4 | 2,911,247.95 | Bank transfers, house mortgage | ||
| Unit 5 | 2,884,489.50 | Bank transfers, house mortgage | ||
| Unit 6 | 2,502,618.17 | Bank transfers, house mortgage | ||
| Unit 7 | 2,131,401.24 | Bank transfers, house mortgage | ||
| Unit 8 | 1,982,739.60 | Bank transfers, house mortgage | ||
| Unit 9 | 1,032,855.13 | Bank transfers, house mortgage | ||
| Unit 10 | 912,030.00 | Bank transfers, house mortgage | ||
| Unit 11 | 881,524.45 | Bank transfers, house mortgage | ||
| Unit 12 | 853,100.00 | Bank transfers, house mortgage | ||
| Unit 13 | 825,000.00 | Bank transfers, house mortgage | ||
| Unit 14 | 675,000.00 | Bank transfers, house mortgage | ||
| Unit 15 | 673,076.70 | Bank transfers, house mortgage | ||
| Unit 16 | 552,430.80 | Bank transfers, house mortgage | ||
| Others | 699,061.91 | Bank transfers, house mortgage | ||
| Total | 76,760,426.90 |
(4) Accounts receivable actually written off in the current period
In RMB
| Item | Amounts written off |
| Accounts receivable actually written off | 2,021,432.56 |
Important accounts receivable write-offs:
In RMB
| Unit | Nature of accounts receivable | Amounts written off | Reason for write-offs | Write-off procedures performed | Whether the amount arises from an associated transaction |
| Unit 1 | Payment for goods | 881,524.45 | Expected to be irrecoverable | Management approval | No |
| Unit 2 | Payment for goods | 266,206.00 | Expected to be irrecoverable | Management approval | No |
| Unit 3 | Payment for goods | 260,915.00 | Expected to be irrecoverable | Management approval | No |
| Unit 4 | Payment for goods | 116,277.00 | Expected to be irrecoverable | Management approval | No |
| Unit 5 | Payment for goods | 85,625.00 | Expected to be irrecoverable | Management approval | No |
| Other Subtotal | Payment for goods | 410,885.11 | Expected to be irrecoverable | Management approval | No |
| Total | 2,021,432.56 |
(4) Top five debtors with the largest ending balances of accounts receivable and contract assets
In RMB
| Unit | Ending balance of accounts receivable | Ending balance of contract assets | Ending balance of accounts receivable and contract assets | Proportion in the total ending balance of accounts receivable and contract assets | Ending balance of provision for bad debts on accounts receivable and impairment of contract assets |
| Unit 1 | 658,945,936.78 | 658,945,936.78 | 21.36% | 658,945,936.78 | |
| Unit 2 | 369,680,570.71 | 369,680,570.71 | 11.99% | 18,820,983.95 | |
| Unit 3 | 355,627,952.88 | 355,627,952.88 | 11.53% | 106,688,385.87 | |
| Unit 4 | 241,053,412.05 | 241,053,412.05 | 7.82% | 105,439,212.29 | |
| Unit 5 | 95,720,766.37 | 95,720,766.37 | 3.10% | 61,418,433.11 | |
| Total | 1,721,028,638.79 | 1,721,028,638.79 | 55.80% | 951,312,952.00 |
5. Other receivables
In RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 86,770,440.47 | 53,368,667.34 |
| Total | 86,770,440.47 | 53,368,667.34 |
(1) Other accounts receivable
1) Classification of other accounts receivable by nature
In RMB
| Nature of receivable | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Collections by a third party | 53,190,022.42 | 26,915,796.30 |
| Security/guarantee deposits | 29,988,281.52 | 35,077,788.86 |
| Withholdings | 7,399,959.90 | 4,274,188.53 |
| Cash reserve | 5,767,293.12 | 2,365,967.91 |
| Others | 3,641,166.66 | 330,098.34 |
| Proxy holding of properties exchanged for construction services | 2,094,110.00 | 2,094,110.00 |
| Total | 102,080,833.62 | 71,057,949.94 |
2) Disclosure by aging of accounts
In RMB
| Age | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Within 1 year (including 1 year) | 78,596,608.94 | 42,909,446.18 |
| 1-2 years | 5,385,201.70 | 6,665,944.46 |
| 2-3 years | 6,660,645.01 | 6,322,210.28 |
| More than 3 years | 11,438,377.97 | 15,160,349.02 |
| 3-4 years | 4,278,724.05 | 3,591,477.42 |
| 4-5 years | 2,140,747.12 | 2,146,271.80 |
| More than 5 years | 5,018,906.80 | 9,422,599.80 |
| Total | 102,080,833.62 | 71,057,949.94 |
3) Classification of disclosure according to the bad debt provision method
?Applicable □Not applicable
In RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Provision for bad debts by individual item | 2,242,310.00 | 2.20% | 881,138.50 | 39.30% | 1,361,171.50 | 2,362,320.00 | 3.32% | 945,141.50 | 40.01% | 1,417,178.50 |
| Including: | ||||||||||
| Collective bad debt provision | 99,838,523.62 | 97.80% | 14,429,254.65 | 14.45% | 85,409,268.97 | 68,695,629.94 | 96.68% | 16,744,141.10 | 24.37% | 51,951,488.84 |
| Including: | ||||||||||
| Aging combination | 99,838,523.62 | 97.80% | 14,429,254.65 | 14.45% | 85,409,268.97 | 68,695,629.94 | 96.68% | 16,744,141.10 | 24.37% | 51,951,488.84 |
Total
| Total | 102,080,833.62 | 100.00% | 15,310,393.15 | 15.00% | 86,770,440.47 | 71,057,949.94 | 100.00% | 17,689,282.60 | 24.89% | 53,368,667.34 |
Individual bad debt provision:
In RMB
| Name | Beginning balance | Ending balance | ||||
| Book balance | Bad debt provision | Book balance | Bad debt provision | Percentage of provision | Reasons for provision | |
| Unit 1 | 800,000.00 | 280,000.00 | 800,000.00 | 280,000.00 | 35.00% | Expected impairment |
| Unit 2 | 657,783.00 | 230,224.05 | 657,783.00 | 230,224.05 | 35.00% | Expected impairment |
| Unit 3 | 636,327.00 | 222,714.45 | 636,327.00 | 222,714.45 | 35.00% | Expected impairment |
| Unit 4 | 103,000.00 | 103,000.00 | 103,000.00 | 103,000.00 | 100.00% | Expected to be difficult to recover |
| Unit 5 | 45,200.00 | 45,200.00 | 45,200.00 | 45,200.00 | 100.00% | Expected to be difficult to recover |
| Unit 6 | 50,010.00 | 15,003.00 | Expected to be difficult to fully recover | |||
| Unit 7 | 30,000.00 | 9,000.00 | Expected to be difficult to fully recover | |||
| Unit 8 | 20,000.00 | 20,000.00 | Expected to be difficult to recover | |||
| Unit 9 | 10,000.00 | 10,000.00 | Expected to be difficult to recover | |||
| Unit 10 | 10,000.00 | 10,000.00 | Expected to be difficult to recover | |||
| Total | 2,362,320.00 | 945,141.50 | 2,242,310.00 | 881,138.50 | ||
Collective bad debt provision:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Percentage of provision | |
| Less than 1 year (including 1 year) | 76,646,218.80 | 3,832,310.94 | 5.00% |
| 1-2 years | 5,241,481.84 | 524,148.18 | 10.00% |
| 2-3 years | 6,650,645.01 | 1,330,129.00 | 20.00% |
| 3-4 years | 4,258,724.05 | 2,129,362.03 | 50.00% |
| 4-5 years | 2,140,747.12 | 1,712,597.70 | 80.00% |
| More than 5 years | 4,900,706.80 | 4,900,706.80 | 100.00% |
| Total | 99,838,523.62 | 14,429,254.65 | |
Provision for bad debts according to the general model of expected credit loss:
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit loss over the next 12 months | Expected credit loss over the entire duration (without credit impairment) | Expected credit loss over the entire duration (with credit impairment) |
Balance as of January01, 2024
| Balance as of January 01, 2024 | 16,744,141.10 | 756,941.50 | 188,200.00 | 17,689,282.60 |
| Balance on January 01, 2024 in the current period | ||||
| Provision in the current period | -2,314,886.45 | -24,003.00 | -40,000.00 | -2,378,889.45 |
| Balance as of June 30, 2024 | 14,429,254.65 | 732,938.50 | 148,200.00 | 15,310,393.15 |
Changes in the book balance with significant change in amount of the loss provision in the current period
□Applicable ?Not applicable
4) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-offs | Others | |||
| Bad debt provision for other receivables | 17,689,282.60 | -2,378,889.45 | 15,310,393.15 | |||
| Total | 17,689,282.60 | -2,378,889.45 | 15,310,393.15 | |||
5) Other receivables actually written off in the current period
There were no write-offs of other receivables in the current period.
6) Top five debtors with the largest ending balances of other accounts receivable
In RMB
| Unit | Nature of receivable | Ending balance | Age | Proportion in the total ending balance of other accounts receivable | Ending balance of bad debt provision |
| Unit 1 | Collections by a third party | 12,986,415.91 | Less than 1 year | 12.72% | 649,320.80 |
| Unit 2 | Collections by a third party | 6,932,252.09 | Less than 1 year | 6.79% | 346,612.60 |
| Unit 3 | Collections by a third party/deposits | 3,814,069.40 | 0-3 years | 3.74% | 205,506.54 |
| Unit 4 | Withholdings | 3,400,882.31 | Less than 1 year | 3.33% | 170,044.12 |
| Unit 5 | Collections by a third party | 2,356,041.47 | Less than 1 year | 2.31% | 117,802.07 |
| Total | 29,489,661.18 | 28.89% | 1,489,286.13 |
6. Advance payments
(1) Advance payments presented by age
In RMB
| Age | Ending balance | Beginning balance | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| With 1 year | 175,307,498.53 | 94.42% | 136,637,538.73 | 97.80% |
| 1-2 years | 9,650,179.69 | 5.20% | 3,055,581.83 | 2.19% |
| 2-3 years | 707,592.39 | 0.38% | 15,823.01 | 0.01% |
| More than 3 years | 16,943.31 | 0.01% | 4,528.01 | |
| Total | 185,682,213.92 | 139,713,471.58 | ||
(2) Top five payers with the largest ending balances of advance payments
The ending balances of advance payments of the top five payers by the end of the current periodtotaled RMB 92,636,335.39, accounting for 49.89% of the total.
7.Inventory
(1) Classification of inventories
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Provision for obsolete inventory or for impairment of the cost of contract performance | Book value | Book balance | Provision for obsolete inventory or for impairment of the cost of contract performance | Book value | |
| Raw materials | 69,012,023.09 | 69,012,023.09 | 81,308,915.01 | 81,308,915.01 | ||
| Products in process | 98,458,434.24 | 98,458,434.24 | 98,820,705.86 | 98,820,705.86 | ||
| Merchandise inventory | 462,714,144.50 | 33,542,900.56 | 429,171,243.94 | 434,195,084.18 | 33,339,505.13 | 400,855,579.05 |
| Contract performance costs | 36,902,912.37 | 36,902,912.37 | 35,371,916.75 | 35,371,916.75 | ||
| Goods shipped in transit | 761,454,013.19 | 30,351,019.85 | 731,102,993.34 | 891,904,804.32 | 30,351,019.85 | 861,553,784.47 |
| Low-cost consumables and packing materials | 34,422,631.68 | 34,422,631.68 | 46,363,819.10 | 46,363,819.10 | ||
| Total | 1,462,964,159.07 | 63,893,920.41 | 1,399,070,238.66 | 1,587,965,245.22 | 63,690,524.98 | 1,524,274,720.24 |
(2) Provision for obsolete inventory or for impairment of the cost of contract performance
In RMB
| Item | Beginning balance | Increased amount in the current period | Decreased amount in the current period | Ending balance | ||
| Provision | Others | Reversals or write-off | Others | |||
| Merchandise inventory | 33,339,505.13 | 203,395.43 | 33,542,900.56 | |||
| Goods shipped in transit | 30,351,019.85 | 30,351,019.85 | ||||
| Total | 63,690,524.98 | 203,395.43 | 63,893,920.41 | |||
8.Other current assets
In RMB
| Item | Ending balance | Beginning balance |
| Fixed-term deposit within 1 year | 1,444,141,200.00 | 2,563,744,300.00 |
| Accrued interest on fixed deposits | 101,238,591.00 | 81,146,657.65 |
| Prepaid taxes | 2,586,213.00 | 2,917,663.05 |
| Input tax to be deducted | 642,072.94 | |
| Total | 1,548,608,076.94 | 2,647,808,620.70 |
9. Other equity instrument investments
In RMB
| Project | Beginning balance | Gains recognized in other comprehensive income for the current period | Loss recognized in other comprehensive income for the current period | Gains recognized in other comprehensive income at the end of the period | Loss recognized in other comprehensive income at the end of the period | Recognized dividends income in the period | Ending balance | Reason for being designated to be measured by fair value and the change being recorded in other comprehensive income |
| Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership) | 100,000,000.00 | |||||||
| Shanghai MXCHIP Information Technology Co., Ltd. | 2,116,023.22 | 17,832,510.78 | 2,116,023.22 | |||||
| Total | 2,116,023.22 | 117,832,510.78 | 2,116,023.22 |
Disclosure of non-tradable equity instrument investment by item in the current period
In RMB
| Project | Recognized dividends income | Accumulated gains | Accumulated losses | Amount transferred from other comprehensive incomes to retained earnings | Reason for being designated to be measured by fair value and the change being recorded in other comprehensive income | Reason for the transfer of other comprehensive incomes to retained earnings |
| Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership) | 100,000,000.00 | |||||
| Shanghai MXCHIP Information Technology Co., Ltd. | 17,832,510.78 |
10. Long-term equity investment
In RMB
| Investee | Beginning balance(book value) | Beginning balance of impairment provision | Increase/decrease in the current period | Ending balance（book value) | Ending balance of impairment provision | |||||||
| Additional investment | Negative investment | Investment profit or loss recognized using the equity method | Adjustment of other comprehensive incomes | Other changes in equity | Cash dividends or profits declare d and distributed | Impairment provision | Others | |||||
| I. Joint venture | ||||||||||||
| De Dietrich Trade (Shanghai) Co., Ltd. | 4,321,729.39 | -3,224,153.62 | 1,097,575.77 | |||||||||
| Sub-tot al | 4,321,729.39 | -3,224,153.62 | 1,097,575.77 | |||||||||
| II. Associated companies | ||||||||||||
| Zhejiang Tingshuo Brand Operation Manage | 639,942.64 | -37,414.33 | 602,528.31 | |||||||||
mentCo.,Ltd.
| ment Co., Ltd. | ||||||||||||
| Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. | 3,465,778.21 | -186,945.98 | 3,278,832.23 | |||||||||
| Sub-tot al | 4,105,720.85 | -224,360.31 | 3,881,360.54 | |||||||||
| Total | 8,427,450.24 | -3,448,513.93 | 4,978,936.31 |
Recoverable amount is determined as fair value less costs of disposal
□Applicable ?Not applicable
The recoverable amount is determined as the present value of the expected future cash flows
□Applicable ?Not applicable
11. Other non-current financial assets
In RMB
| Item | Ending balance | Beginning balance |
| Classification of financial assets measured at fair value with changes included into current profit or loss | ||
| Including: financial products | 580,000,000.00 | 480,000,000.00 |
| Total | 580,000,000.00 | 480,000,000.00 |
12. Investment real estate
(1) Investment real estate under the cost measurement mode
?Applicable □Not applicable
In RMB
| Item | Buildings | Land use right | Total |
| I. Original book value | |||
| 1. Beginning balance | 103,152,708.29 | 1,062,744.00 | 104,215,452.29 |
| 2. Increased amount in the current period | 4,399,856.67 | 4,399,856.67 | |
| (1) Outsourcing | |||
| (2) Transfer from inventories/fixed assets/construction in progress | 4,399,856.67 | 4,399,856.67 |
(3) Increased amount
in business merger
| (3) Increased amount in business merger | |||
| 3. Decreased amount in the current period | 4,534,277.73 | 4,534,277.73 | |
| (1) Disposal | |||
| (2) Other transfer-out | 4,534,277.73 | 4,534,277.73 | |
| 4. Ending balance | 103,018,287.23 | 1,062,744.00 | 104,081,031.23 |
| II Accumulated depreciation and amortization | |||
| 1. Beginning balance | 12,726,143.22 | 352,476.76 | 13,078,619.98 |
| 2. Increased amount in the current period | 2,596,658.54 | 10,627.44 | 2,607,285.98 |
| (1) Accrual or amortization | 2,596,658.54 | 10,627.44 | 2,607,285.98 |
| 3. Decreased amount in the current period | 658,922.72 | 658,922.72 | |
| (1) Disposal | |||
| (2) Other transfer-out | 658,922.72 | 658,922.72 | |
| 4. Ending balance | 14,663,879.04 | 363,104.20 | 15,026,983.24 |
| III. Impairment provision | |||
| 1. Beginning balance | |||
| 2. Increased amount in the current period | 1,539,949.83 | 1,539,949.83 | |
| (1) Provision | |||
| 3. Decreased amount in the current period | |||
| (1) Disposal | |||
| (2) Other transfer-out | |||
| 4. Ending balance | 1,539,949.83 | 1,539,949.83 | |
| IV. Book value | |||
| 1. Ending book value | 86,814,458.36 | 699,639.80 | 87,514,098.16 |
| 2. Beginning book value | 90,426,565.07 | 710,267.24 | 91,136,832.31 |
*1. The increase in investment properties is primarily due to the Company's rental of properties to external parties.*2. The other transfers out of investment properties are due to the Company reclaiming rental properties for its own use.
Recoverable amount is determined as fair value less costs of disposal
□Applicable ?Not applicable
The recoverable amount is determined as the present value of the expected future cash flows
□Applicable ?Not applicable
(2) Investment real estate under the fair value measurement mode
□Applicable ?Not applicable
13. Fixed assets
In RMB
| Item | Ending balance | Beginning balance |
| Fixed assets | 1,664,948,226.73 | 1,720,724,257.46 |
| Total | 1,664,948,226.73 | 1,720,724,257.46 |
(1) Fixed assets
In RMB
| Item | Houses and buildings | Machine and equipment | Transportation equipment | Other equipment | Total |
| I. Original book value | |||||
| 1. Beginning balance | 1,653,353,641.45 | 846,881,737.33 | 23,053,141.13 | 137,921,680.50 | 2,661,210,200.41 |
| 2. Increased amount in the current period | 14,704,252.73 | 13,279,837.52 | 5,162,697.74 | 2,120,048.00 | 35,266,835.99 |
| (1) Purchase | 10,169,975.00 | 819,770.38 | 5,162,697.74 | 396,063.81 | 16,548,506.93 |
| (2) Transfer from construction in progress | 12,460,067.14 | 1,723,984.19 | 14,184,051.33 | ||
| (3) Increased amount in business merger | |||||
| (4) Other increases | 4,534,277.73 | 4,534,277.73 | |||
| 3. Decreased amount in the current period | 4,399,856.67 | 1,101,406.85 | 5,120,580.61 | 634,237.65 | 11,256,081.78 |
| (1) Disposal or retirement | 1,101,406.85 | 5,120,580.61 | 634,237.65 | 6,856,225.11 | |
| (2) Other decreases | 4,399,856.67 | 4,399,856.67 | |||
| 4. Ending balance | 1,663,658,037.51 | 859,060,168.00 | 23,095,258.26 | 139,407,490.85 | 2,685,220,954.62 |
| II. Accumulated depreciation | |||||
| 1. Beginning balance | 392,725,389.84 | 456,059,295.64 | 15,068,321.38 | 76,632,936.09 | 940,485,942.95 |
| 2. Increased amount in the current period | 39,207,504.03 | 32,546,499.74 | 866,381.60 | 8,537,015.65 | 81,157,401.02 |
(1)Provision
| (1) Provision | 38,548,581.31 | 32,546,499.74 | 866,381.60 | 8,537,015.65 | 80,498,478.30 |
| (2) Other increases | 658,922.72 | 658,922.72 | |||
| 3. Decreased amount in the current period | 838,216.14 | 532,399.94 | 1,370,616.08 | ||
| (1) Disposal or retirement | 838,216.14 | 532,399.94 | 1,370,616.08 | ||
| 4. Ending balance | 431,932,893.87 | 487,767,579.24 | 15,934,702.98 | 84,637,551.80 | 1,020,272,727.89 |
| III. Impairment provision | |||||
| 1. Beginning balance | |||||
| 2. Increased amount in the current period | |||||
| (1) Provision | |||||
| 3. Decreased amount in the current period | |||||
| (1) Disposal or retirement | |||||
| 4. Ending balance | |||||
| IV. Book value | |||||
| 1. Ending book value | 1,231,725,143.64 | 371,292,588.76 | 7,160,555.28 | 54,769,939.05 | 1,664,948,226.73 |
| 2. Beginning book value | 1,260,628,251.61 | 390,822,441.69 | 7,984,819.75 | 61,288,744.41 | 1,720,724,257.46 |
*Other increases and decreases during the period: For details, please refer to Section VII. 12. of this report on investment realestate".The Company has no fixed assets without completed property certificates.
14. Construction in process
In RMB
| Item | Ending balance | Beginning balance |
| Construction in process | 444,829,440.01 | 359,768,699.68 |
| Total | 444,829,440.01 | 359,768,699.68 |
(1) Construction in progress
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Robam Mansion project | 435,305,853.75 | 435,305,853.75 | 336,704,853.10 | 336,704,853.10 | ||
| Project of the Fourth Production Department | 3,537,257.11 | 3,537,257.11 | 14,080,754.69 | 14,080,754.69 | ||
| Customized management software | 2,052,830.20 | 2,052,830.20 | 3,182,235.79 | 3,182,235.79 | ||
| Project of the First Production Department | 941,946.89 | 941,946.89 | ||||
| Project of the Third Production Department | 1,954,867.32 | 1,954,867.32 | 761,150.44 | 761,150.44 | ||
| Project of the Second Production Department | 336,283.20 | 336,283.20 | 130,973.44 | 130,973.44 | ||
| Other smaller projects | 1,642,348.43 | 1,642,348.43 | 3,966,785.33 | 3,966,785.33 | ||
| Total | 444,829,440.01 | 444,829,440.01 | 359,768,699.68 | 359,768,699.68 | ||
(2) Current changes in major projects under construction
In RMB
| Project | Budget | Beginning balance | Increased amount in the current period | Amount transferred into fixed assets in the current period | Other decreases in the current period | Ending balance | Proportion of accumulative construction investment in the budget | Project progress | Accumulated amount of capitalized interest | Including: capitalized interests in the current period | Interest capitalization rate in the current period | Funding source |
| Robam Mansion project | 724,750,000.00 | 336,704,853.10 | 98,601,000.65 | 435,305,853.75 | 60.06% | Own funds | ||||||
| Total | 724,750,000.00 | 336,704,853.10 | 98,601,000.65 | 435,305,853.75 |
(3) Impairment test of construction in progress
□Applicable ?Not applicable
15. Right-of-use assets
(1) Right-of-use assets
In RMB
| Item | Houses and buildings | Total |
| I. Original book value | ||
| 1. Beginning balance | 29,457,908.02 | 29,457,908.02 |
| 2. Increased amount in the current period | ||
| 3. Decreased amount in the current period | ||
| 4. Ending balance | 29,457,908.02 | 29,457,908.02 |
| II. Accumulated depreciation | ||
| 1. Beginning balance | 15,655,449.04 | 15,655,449.04 |
| 2. Increased amount in the current period | 2,597,529.36 | 2,597,529.36 |
| (1) Provision | 2,597,529.36 | 2,597,529.36 |
| 3. Decreased amount in the current period | ||
| (1) Disposal | ||
| 4. Ending balance | 18,252,978.40 | 18,252,978.40 |
| III. Impairment provision | ||
| 1. Beginning balance | ||
| 2. Increased amount in the current period | ||
| (1) Provision | ||
| 3. Decreased amount in the current period | ||
| (1) Disposal | ||
| 4. Ending balance | ||
| IV. Book value | ||
| 1. Ending book value | 11,204,929.62 | 11,204,929.62 |
| 2. Beginning book value | 13,802,458.98 | 13,802,458.98 |
16. Intangible assets
(1) Intangible assets
In RMB
| Item | Land use right | 3. Patent right | Software | Trademark | Total |
| I. Original book value | |||||
| 1. Beginning balance | 224,593,935.95 | 7,300,000.00 | 73,208,259.53 | 24,624,622.64 | 329,726,818.12 |
| 2. Increased amount in the current period | 1,637,623.99 | 1,637,623.99 | |||
| (1) Purchase | 46,017.70 | 46,017.70 | |||
| (2) Internal research and development | |||||
| (3) Increased amount in business merger | |||||
| (4) Transfer from construction in progress | 1,591,606.29 | 1,591,606.29 | |||
| 3. Decreased amount in the current period | 6,954,634.60 | 6,954,634.60 | |||
| (1) Disposal | 6,954,634.60 | 6,954,634.60 | |||
| 4. Ending balance | 224,593,935.95 | 7,300,000.00 | 67,891,248.92 | 24,624,622.64 | 324,409,807.51 |
| II. Accumulated amortization | |||||
| 1. Beginning balance | 38,853,482.23 | 6,176,923.08 | 56,614,708.98 | 13,527,964.52 | 115,173,078.81 |
| 2. Increased amount in the current period | 589,224.92 | 561,538.46 | 4,728,036.52 | 1,225,000.00 | 7,103,799.90 |
| (1) Provision | 589,224.92 | 561,538.46 | 4,728,036.52 | 1,225,000.00 | 7,103,799.90 |
3.Decreasedamount in thecurrent period
| 3. Decreased amount in the current period | 6,907,421.73 | 6,907,421.73 | |||
| (1) Disposal | 6,907,421.73 | 6,907,421.73 | |||
| 4. Ending balance | 39,442,707.15 | 6,738,461.54 | 54,435,323.77 | 14,752,964.52 | 115,369,456.98 |
| III. Impairment provision | |||||
| 1. Beginning balance | |||||
| 2. Increased amount in the current period | |||||
| (1) Provision | |||||
| 3. Decreased amount in the current period | |||||
| (1) Disposal | |||||
| 4. Ending balance | |||||
| IV. Book value | |||||
| 1. Ending book value | 185,151,228.80 | 561,538.46 | 13,455,925.15 | 9,871,658.12 | 209,040,350.53 |
| 2. Beginning book value | 185,740,453.72 | 1,123,076.92 | 16,593,550.55 | 11,096,658.12 | 214,553,739.31 |
17. Goodwill
(1) Original book value of goodwill
In RMB
| Name of investee or item that generates goodwill | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | ||
| Generated by business merger | Disposal | |||||
| Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. | 80,589,565.84 | 80,589,565.84 | ||||
| Total | 80,589,565.84 | 80,589,565.84 | ||||
(2) Goodwill impairment provision
In RMB
| Name of investee or item that generates goodwill | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | ||
| Provision | Disposal | |||||
| Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. | 68,366,294.17 | 68,366,294.17 | ||||
| Total | 68,366,294.17 | 68,366,294.17 | ||||
Other description
The Company recognizes Shengzhou Kinde as an assets group. Goodwill at the end of this period is in thesame assets group as recognized upon goodwill impairment test at the date of purchase and in previousyear.
18. Long-term deferred expenses
In RMB
| Item | Beginning balance | Increased amount in the current period | Amount of amortization in the current period | Other decreases | Ending balance |
| Office decoration expenses | 2,331,161.64 | 696,402.85 | 1,634,758.79 | ||
| Service fee | 2,083,289.77 | 364,591.22 | 976,196.84 | 1,471,684.15 | |
| Consulting fee | 267,733.10 | 182,010.92 | 85,722.18 | ||
| Advertisement expenses | 129,216.10 | 129,216.10 | 0.00 | ||
| Others | 223,258.76 | 4,581.52 | 142,354.70 | 85,485.58 | |
| Total | 5,034,659.37 | 369,172.74 | 2,126,181.41 | 3,277,650.70 |
19. Deferred income tax asset/deferred income tax liability
(1) Deferred income tax assets before offset
In RMB
| Item | Ending balance | Beginning balance | ||
| Deductible temporary differences | Deferred tax assets: | Deductible temporary differences | Deferred tax assets: | |
| Asset impairment provision | 101,443,097.40 | 15,216,464.61 | 97,315,669.06 | 14,597,350.36 |
| Unrealized profits of internal transactions | 6,744,863.04 | 1,463,620.57 | ||
| Credit impairment provision | 1,222,360,955.60 | 191,133,912.84 | 1,228,253,675.11 | 191,913,813.81 |
| Deferred income tax assets before offset recognized based on the provisional estimated expenses | 994,438,099.33 | 149,165,714.90 | 744,083,389.27 | 111,612,508.39 |
| Changes in the fair value of other equity | 117,832,510.80 | 17,674,876.62 | 117,832,510.80 | 17,674,876.62 |
instrument investments
| instrument investments | ||||
| Deferred income tax assets before offset recognized based on the deferred income | 91,396,861.33 | 13,709,529.20 | 101,473,668.87 | 15,221,050.33 |
| Deferred income tax assets before offset recognized due to equity incentive | 18,333,587.92 | 2,823,026.46 | 9,730,756.23 | 1,510,663.99 |
| Income that should be recognized according to tax laws but have not been confirmed by the accountant yet | 16,597,690.53 | 2,489,653.58 | 60,810,075.93 | 9,121,511.39 |
| Lease liabilities | 1,625,756.28 | 406,439.07 | 4,984,267.98 | 1,246,067.00 |
| Total | 2,570,773,422.23 | 394,083,237.85 | 2,364,484,013.25 | 362,897,841.89 |
(2) Deferred income tax liabilities before offset
In RMB
| Item | Ending balance | Beginning balance | ||
| Taxable temporary difference | Deferred income tax liabilities | Taxable temporary difference | Deferred income tax liabilities | |
| Asset appraisal appreciation arising from business merger where the acquired company is not controlled by the same party after the merger | 15,528,850.80 | 2,329,327.62 | 17,528,191.69 | 2,629,228.75 |
| Right-of-use assets | 3,260,199.24 | 815,049.81 | 3,260,199.24 | 815,049.81 |
| Temporary taxable difference incurred from pre-tax deduction of fixed assets | 104,923,491.60 | 15,738,523.74 | 112,448,544.27 | 16,867,281.64 |
| Accrued interest on fixed deposits | 72,988,481.40 | 10,948,272.22 | 54,046,698.73 | 8,107,004.81 |
| Total | 196,701,023.04 | 29,831,173.39 | 187,283,633.93 | 28,418,565.01 |
(3) Deferred income tax assets or liabilities presented in net amount after offset
In RMB
| Item | Amount of deferred income tax assets offset against deferred income tax liabilities at the end of the period | Ending balance of deferred income tax assets or liabilities after offset | Initial amount of deferred income tax assets offset against deferred income tax liabilities | Beginning balance of deferred income tax assets or liabilities after offset |
| Deferred tax assets: | 394,083,237.85 | 362,897,841.89 | ||
| Deferred income tax liabilities | 29,831,173.39 | 28,418,565.01 |
(4) Presentation of unrecognized deferred income tax assets
In RMB
| Item | Ending balance | Beginning balance |
| Deductible temporary differences | 15,410,458.85 | 13,929,952.65 |
| Deductible tax losses | 132,223,154.72 | 102,787,541.49 |
| Total | 147,633,613.57 | 116,717,494.14 |
(5) The deductible losses of unrecognized deferred income tax assets will be due in the following years
In RMB
| Year | Ending amount | Beginning amount | Remarks |
| 2024 years | 5,602.28 | ||
| 2025 | 9,556,499.12 | 9,556,499.12 | |
| 2026 years | 10,380,561.57 | 10,380,561.57 | |
| 2027 years | 24,349,032.53 | 24,349,032.53 | |
| 2028 | 58,495,845.99 | 58,495,845.99 | |
| 2029 | 29,441,215.51 | ||
| Total | 132,223,154.72 | 102,787,541.49 |
20 Other non-current assets
In RMB
| Item | Ending balance | Beginning balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Fixed-term deposit for more than 1 year | 3,240,000,000.00 | 3,240,000,000.00 | 1,770,000,000.00 | 1,770,000,000.00 | ||
| Properties exchanged for construction services *1 | 108,252,840.51 | 37,888,494.18 | 70,364,346.33 | 97,041,317.94 | 33,964,461.28 | 63,076,856.66 |
| Prepayment for house purchase | 87,153,575.80 | 87,153,575.80 | 76,602,510.25 | 76,602,510.25 | ||
| Prepayments for equipment purchase | 20,550,850.00 | 20,550,850.00 | 12,455,961.74 | 12,455,961.74 | ||
| Prepayment for the project | 194,000.00 | 194,000.00 | 194,000.00 | 194,000.00 | ||
| Total | 3,456,151,266.31 | 37,888,494.18 | 3,418,262,772.13 | 1,956,293,789.93 | 33,964,461.28 | 1,922,329,328.65 |
Other description:
Properties exchanged for construction services: It refers to the properties and parking space that theCompany has signed a debt restructuring agreement at the end of the period and completed the proceduresfor property transfer, with a total value of RMB 108,252,800 and a provision for impairment of RMB37,888,500. For details, please refer to Section XVIII Other Important Matters 1 of this report on theCompany's debt restructuring matters.
21. Assets with limited ownership and right to use
In RMB
| Item | Ending of the period | Beginning of the period | ||||||
| Book balance | Book value | Type of restriction | Restrictions | Book balance | Book value | Type of restriction | Restrictions | |
| Cash and cash equivalents | 89,105,875.26 | 89,105,875.26 | L/G margin | 83,153,343.90 | 83,153,343.90 | L/G margin | ||
| Cash and cash equivalents | 41,826,555.86 | 41,826,555.86 | Bill acceptance margin | 23,717,043.12 | 23,717,043.12 | Bill acceptance margin | ||
| Cash and cash equivalents | 16,000.00 | 16,000.00 | ETC security deposits | 14,000.00 | 14,000.00 | ETC security deposits | ||
| Fixed assets | 152,993,151.92 | 135,979,588.89 | Mortgage loan | 108,455,603.60 | 99,401,869.39 | Mortgage loan | ||
| Intangible assets | 34,367,725.00 | 31,222,615.70 | Mortgage loan | 28,181,534.50 | 25,884,399.80 | Mortgage loan | ||
| Total | 318,309,308.04 | 298,150,635.71 | 243,521,525.12 | 232,170,656.21 | ||||
22. Short-term borrowings
(I)Short-term borrowing classification
In RMB
| Item | Ending balance | Beginning balance |
| Mortgage loan | 99,000,000.00 | 49,500,000.00 |
| Credit borrowings | 1,500,000.00 | 31,500,000.00 |
| Accounts receivable factoring | 14,503,320.70 | 14,003,320.70 |
| Total | 115,003,320.70 | 95,003,320.70 |
Description on the classification of short-term borrowings:
Credit loans refer to working capital loans obtained by the Company's subsidiary, CookingFuture (a subsidiary of Shengzhou Kinde), from the Shaoxing Shengzhou Small and MicroEnterprise Branch of Zhejiang Tailong Commercial Bank Co., Ltd. The loan term is within oneyear, with an interest rate range of 3.25%-6.18%.Mortgage loans: On June 1, 2023, the Company's subsidiary, Shengzhou Kinde, signed amortgage loan agreement with the Shaoxing Shengzhou Branch of Bank of Communications Co.,Ltd., securing a credit limit of RMB 160 million with an interest rate ranging from 3.25% to
3.35%. The collateral for this loan is its Factory No. 1 building and the land located at 888 Ruanpeng Road,Shengzhou City, with a combined net value of RMB 125 million. Additionally, on October 7,2023, Shengzhou Kinde signed another mortgage loan agreement with China Minsheng Bank,
obtaining a credit limit of RMB 50 million with an interest rate ranging from 3.25% to 3.6%. Thecollateral for this loan is the office building and the land located at 888 Ruanpeng Road, Shengzhou City,
with a combined net value of RMB 35 million.
(2) Overdue Short-term Loans
The Company has no overdue short-term loans that have not been paid during the current period.
23. Notes payable
In RMB
| Type | Ending balance | Beginning balance |
| Banker’s acceptance | 993,551,028.00 | 1,098,720,000.58 |
| Total | 993,551,028.00 | 1,098,720,000.58 |
The total amount of notes payable that were due and unpaid at the end of the period was RMB 0.00.
24. Accounts payable
(1) Presentation of accounts payable
In RMB
| Item | Ending balance | Beginning balance |
| Payment for expenses | 1,124,456,863.77 | 1,107,539,973.00 |
| Payment for materials | 1,087,599,114.60 | 1,267,081,255.68 |
| Payment for construction | 159,978,831.67 | 164,258,188.72 |
| Payment for equipment | 11,970,618.74 | 9,864,344.66 |
| Total | 2,384,005,428.78 | 2,548,743,762.06 |
Other description:
As of June 30, 2024, the balance of important accounts payable with an age of more than one yeartotaled RMB 41,508,040.30, mainly involving the unsettled material payments and expenses.
25. Other payables
In RMB
| Item | Ending balance | Beginning balance |
| Dividends payable | 472,047,458.00 | |
| Other payables | 290,336,577.77 | 283,917,461.76 |
| Total | 290,336,577.77 | 755,964,919.76 |
(1) Dividends payable
In RMB
| Item | Ending balance | Beginning balance |
| Dividends for ordinary shares | 472,047,458.00 | |
| Total | 472,047,458.00 |
(2) Other payables
1) Other payables presented by nature
In RMB
| Item | Ending balance | Beginning balance |
| Security deposits payable | 277,065,066.91 | 266,137,376.14 |
| Collections by a third party | 6,075,517.10 | 4,941,205.70 |
| Guarantee deposits payable | 3,093,537.04 | 6,600,507.19 |
| Others | 4,102,456.72 | 6,238,372.73 |
| Total | 290,336,577.77 | 283,917,461.76 |
2) Important accounts payable with an age of more than one year
Other descriptionAs of June 30, 2024, the important accounts payable with an age of more than one year totaled RMB217,033,999.07, mainly involving the sales deposits.
26. Contract liabilities
In RMB
| Item | Ending balance | Beginning balance |
| Advances on sales | 777,554,890.02 | 1,019,942,923.58 |
| Total | 777,554,890.02 | 1,019,942,923.58 |
27. Employee benefits payable
(1) Presentation of employee compensation payable
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| I. Short-term benefits | 168,988,703.61 | 403,243,066.48 | 534,995,837.53 | 37,235,932.56 |
| II. Post-employment benefits defined contribution plan | 8,822,260.23 | 34,004,530.44 | 41,030,075.85 | 1,796,714.82 |
| III. Termination benefits | 112,078.17 | 925,131.62 | 1,037,209.79 | |
| Total | 177,923,042.01 | 438,172,728.54 | 577,063,123.17 | 39,032,647.38 |
(2) Presentation of short-term employee compensation
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Salaries, bonuses, subsidies and allowances | 162,415,752.84 | 356,049,365.14 | 485,701,615.27 | 32,763,502.71 |
2. Employee welfare
| 2. Employee welfare | 15,389,846.92 | 15,255,092.62 | 134,754.30 | |
| 3. Social insurance | 5,807,041.35 | 20,937,168.04 | 25,669,421.63 | 1,074,787.76 |
| Including: medical insurance | 5,492,914.20 | 19,567,806.69 | 24,024,877.14 | 1,035,843.75 |
| Work-related injury insurance | 314,127.15 | 1,369,361.35 | 1,644,544.49 | 38,944.01 |
| 4. Housing funds | 347,140.00 | 3,559,060.00 | 3,488,111.00 | 418,089.00 |
| 5. Labor union and staff education expenses | 418,769.42 | 7,307,626.38 | 4,881,597.01 | 2,844,798.79 |
| Total | 168,988,703.61 | 403,243,066.48 | 534,995,837.53 | 37,235,932.56 |
(3) Presentation of the defined contribution plans
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Basic pensions | 8,524,886.32 | 32,892,612.68 | 39,676,179.95 | 1,741,319.05 |
| 2. Unemployment insurance | 297,373.91 | 1,111,917.76 | 1,353,895.90 | 55,395.77 |
| Total | 8,822,260.23 | 34,004,530.44 | 41,030,075.85 | 1,796,714.82 |
28. Taxes payable
In RMB
| Item | Ending balance | Beginning balance |
| Added-value tax | 87,733,886.16 | 61,072,058.37 |
| Corporate income tax | 94,349,065.01 | 61,750,915.22 |
| Individual income tax | 9,870,590.21 | 3,100,246.18 |
| City maintenance and construction tax | 6,170,483.55 | 4,330,476.87 |
| House tax | 1,236,947.92 | 13,625,288.12 |
| Land use tax | 657,111.90 | 5,696,022.16 |
| Education surcharge | 2,644,492.89 | 1,855,918.59 |
| Stamp tax | 1,356,304.80 | 1,697,472.12 |
| Local education surcharge | 1,762,995.38 | 1,237,279.17 |
| Other taxes | 22,062.18 | |
| Total | 205,803,940.00 | 154,365,676.80 |
29. Non-current liabilities due within one year
In RMB
| Item | Ending balance | Beginning balance |
| Lease liabilities due within one year | 2,163,637.20 | 4,522,658.42 |
| Total | 2,163,637.20 | 4,522,658.42 |
30. Other current liabilities
In RMB
Item
| Item | Ending balance | Beginning balance |
| Output VAT to be carried forward | 94,072,365.82 | 118,041,351.23 |
| Total | 94,072,365.82 | 118,041,351.23 |
31. Lease liabilities
In RMB
| Item | Ending balance | Beginning balance |
| Lease payment amount | 14,474,209.54 | 17,643,054.87 |
| Unrecognized financial expenses | -1,967,112.51 | -2,369,603.55 |
| Non-current liabilities due within one year after reclassification | -2,163,637.20 | -4,522,658.42 |
| Total | 10,343,459.83 | 10,750,792.90 |
32. Deferred income
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance | Cause of formation |
| Government grants | 136,538,254.74 | 11,038,705.47 | 125,499,549.27 | Government funding | |
| Total | 136,538,254.74 | 11,038,705.47 | 125,499,549.27 |
Other description:
Items with government grants:
In RMB
| Liability | Beginning of the period Balance | Added subsidy amount in the current period | Amount included in non-operating income in the current period | Amount included in other income in the current period | Amount of cost deduction in current period | Others Change | Ending of the period Balance | Related to assets / income |
| Subsidies for factory buildings, infrastructure construction, equipment, etc. in new Chengnan District | 35,064,585.90 | 961,898.10 | 34,102,687.80 | Related to assets |
Funds for intelligent manufacturing, integratedstandard and new model application program
| Funds for intelligent manufacturing, integrated standard and new model application program | 21,165,836.86 | 4,269,752.82 | 16,896,084.04 | Related to assets | ||||
| "Open, complete, and achieve" incentives for industrial projects | 20,257,269.28 | 554,007.84 | 19,703,261.44 | Related to assets | ||||
| Construction of production line with an annual output of 2.25 million sets of kitchen appliances | 17,176,926.62 | 1,293,301.41 | 15,883,625.21 | Related to assets | ||||
| Intelligent unmanned factory based on 5G and cloud technologies | 13,590,218.05 | 1,039,424.10 | 12,550,793.95 | Related to assets | ||||
| Intelligent manufacturing enhancement project based on internet of things technology | 11,470,083.46 | 1,006,145.04 | 10,463,938.42 | Related to assets | ||||
| Intelligent manufacturing project of integrated kitchen appliances with an annual production capacity of 300,000 units | 7,408,861.45 | 426,351.30 | 6,982,510.15 | Related to assets | ||||
| Construction project of kitchen appliance R&D, design and testing center | 4,351,759.70 | 705,321.60 | 3,646,438.10 | Related to assets | ||||
| Construction of production line with an annual output of 1.08 million sets of built-in kitchen appliances | 2,886,861.55 | 341,245.62 | 2,545,615.93 | Related to assets | ||||
| Technological upgrading project with an annual output of 500,000 | 1,486,862.55 | 169,552.50 | 1,317,310.05 | Related to assets | ||||
| Robam Future Factory Project | 942,839.42 | 81,541.90 | 861,297.52 | Related to assets | ||||
| Construction of digital intelligent workshop for smart home appliances | 262,343.08 | 57,070.80 | 205,272.28 | Related to assets | ||||
| Recycling-centered renewal project | 177,280.77 | 45,780.78 | 131,499.99 | Related to assets | ||||
| Development of new generation of environmentally-friendly energy-saving kitchen appliances and their production line | 151,617.90 | 58,959.43 | 92,658.47 | Related to assets | ||||
| Academician & expert work station | 122,531.16 | 21,860.04 | 100,671.12 | Related to assets | ||||
| Kitchen appliance R&D, design and testing center | 19,697.20 | 3,812.40 | 15,884.80 | Related to assets | ||||
| Construction of the digital workshop with an annual output of 2.25 million sets of kitchen appliances | 2,679.79 | 2,679.79 | 0.00 | Related to assets | ||||
| Total | 136,538,254.74 | 11,038,705.47 | 125,499,549.27 | — |
33. Capital stock
In RMB
| Beginning balance | Increase and decrease of this change (+, -) | Ending balance | |||||
| Issue of new shares | Bonus shares | Shares converted from capital reserve | Others | Sub-tot al | |||
| Total number of shares | 949,024,050.00 | 949,024,050.00 | |||||
34. Capital reserve
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| Capital (stock) premium | 401,799,332.67 | 401,799,332.67 | ||
| Other capital reserves | 9,978,881.55 | 8,698,813.25 | 18,677,694.80 | |
| Total | 411,778,214.22 | 8,698,813.25 | 420,477,027.47 |
Other notes, including condition and causes of variation in the current period:
The increase in other capital reserves is due to the recognition of equity-based incentives for theperiod. For details, please refer to Section XV "Share-Based Payment" in this report.
35. Treasury shares
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| Share repurchase | 199,995,742.59 | 199,995,742.59 | ||
| Total | 199,995,742.59 | 199,995,742.59 |
Other notes, including condition and causes of variation in the current period:
The treasury stock is repurchased by the Company from the secondary market for use in employeestock incentives.
36. Other comprehensive incomes
In RMB
| Item | Beginning balance | Amount incurred in the current period | Ending balance | |||||
| Amount incurred before income tax in the current period | Minus: amount included in other comprehensive incomes previously and then | Minus: amount included in other comprehensive incomes previously and then | Minus: income tax expense s | Net income after tax attributable to the parent company | Net income after tax attributable to minority shareholder s | |||
transferredinto thecurrentprofit or
loss
| transferred into the current profit or loss | transferred into current retained earnings | |||||||
| I. Other comprehensive incomes that cannot be reclassified into profit or loss | -100,157,634.16 | -100,157,634.16 | ||||||
| Changes in the fair value of other equity instrument investments | -100,157,634.16 | -100,157,634.16 | ||||||
| (II) Other comprehensive income which will be reclassified into gains and losses | 25,910.06 | 12,522.53 | 13,387.53 | 12,522.53 | ||||
| Converted difference in foreign currency statements | 25,910.06 | 12,522.53 | 13,387.53 | 12,522.53 | ||||
| Total of other comprehensive incomes | -100,157,634.16 | 25,910.06 | 12,522.53 | 13,387.53 | -100,145,111.63 |
37. Surplus reserve
In RMB
| Item | Beginning balance | Increase in the current period | Decrease in the current period | Ending balance |
| Statutory surplus reserve | 474,516,412.50 | 474,516,412.50 | ||
| Total | 474,516,412.50 | 474,516,412.50 |
38. Undistributed profit
In RMB
| Item | Current period | Previous period |
| Undistributed profit at the end of previous period before adjustment | 8,987,773,431.71 | 8,199,079,015.58 |
| Undistributed profit at the beginning of the period after adjustment | 8,987,773,431.71 | 8,199,079,015.58 |
| Add: Net profits attributable to owners of | 759,358,954.74 | 1,732,789,332.13 |
the parent company in the current period
| the parent company in the current period | ||
| Dividends payable for ordinary shares*1 | 472,047,458.00 | 944,094,916.00 |
| Undistributed profit at the end of the period | 9,275,084,928.45 | 8,987,773,431.71 |
*1. According to the proposal on the profit distribution plan for the year 2023, which was passed at thefifth meeting of the sixth board of directors of the Company on April 24, 2024, based on the total sharecapital of 944,094,916.00 as of December 31, 2023, a cash dividend of RMB 5.00 (including tax) will bedistributed to all shareholders for every 10 shares, totaling RMB 472,047,458.00. This profit distributionplan was approved at the shareholders' meeting held on May 16, 2024, and the distribution wasimplemented on May 29, 2024.
39. Operating income and operating cost
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 4,604,808,674.29 | 2,381,821,304.07 | 4,793,316,106.76 | 2,305,082,060.11 |
| Other businesses | 124,545,397.51 | 35,796,675.60 | 141,553,693.39 | 67,013,911.39 |
| Total | 4,729,354,071.80 | 2,417,617,979.67 | 4,934,869,800.15 | 2,372,095,971.50 |
40. Taxes and surcharges
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| City maintenance and construction tax | 17,669,194.72 | 19,865,052.45 |
| Education surcharge | 12,620,853.38 | 14,189,320.42 |
| House tax | 1,713,879.73 | 1,211,155.82 |
| Land use tax | 682,400.35 | -4,374,871.70 |
| Vehicle and vessel usage tax | 6,999.84 | 5,139.84 |
| Stamp tax | 2,461,235.11 | 1,306,922.24 |
| Others | 75,951.77 | 5,252.13 |
| Total | 35,230,514.90 | 32,207,971.20 |
41. Administrative expenses
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Employee remuneration | 107,282,124.59 | 109,523,028.03 |
| Depreciation and amortization | 37,235,102.64 | 31,430,035.98 |
| Consulting service fees | 16,639,627.93 | 13,684,786.20 |
| Costs of equity incentive | 8,698,813.25 | 3,473,641.59 |
| Office expenses | 8,110,263.60 | 6,714,440.34 |
| Material consumption | 6,540,776.25 | 4,742,269.13 |
| Rental and property fees | 6,538,191.34 | 4,762,887.30 |
| Business hospitality cost | 3,844,343.10 | 4,660,750.07 |
| Maintenance expenses | 2,592,881.06 | 2,281,377.24 |
Travel expenses
| Travel expenses | 2,490,615.16 | 2,465,253.34 |
| Communication expense | 2,419,485.36 | 3,460,975.01 |
| Travel expenses | 1,124,876.84 | 4,142,395.01 |
| Others | 10,749,981.97 | 12,083,977.01 |
| Total | 214,267,083.09 | 203,425,816.25 |
42. Sales expense
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Marketing service expenses | 543,754,230.80 | 650,120,122.89 |
| Advertisement expenses | 291,017,797.65 | 356,749,434.59 |
| Employee remuneration | 160,756,327.97 | 166,363,948.22 |
| Booth decoration expenses | 50,651,703.80 | 60,230,248.91 |
| Promotional activity expenses | 41,830,970.70 | 33,830,183.32 |
| Material consumption | 38,651,942.85 | 38,389,111.98 |
| Travel expenses | 15,190,671.32 | 11,697,748.47 |
| Intermediary service fees | 12,503,361.04 | 10,695,310.63 |
| Office expenses | 11,487,489.39 | 7,850,063.78 |
| Rental fees | 8,009,305.98 | 7,933,192.97 |
| Business hospitality cost | 7,518,561.54 | 9,309,526.51 |
| Others | 8,382,037.14 | 7,652,481.14 |
| Total | 1,189,754,400.18 | 1,360,821,373.41 |
43. R&D expenses
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Employee remuneration | 93,845,469.46 | 88,567,764.03 |
| Direct input | 63,046,936.47 | 65,160,510.13 |
| Depreciation and amortization | 6,563,059.30 | 7,419,085.38 |
| Design fees | 2,215,742.57 | 2,146,030.75 |
| Other expenses | 12,702,612.68 | 9,440,750.86 |
| Total | 178,373,820.48 | 172,734,141.15 |
44. Financial expenses
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Interest expenses | 1,294,179.47 | 2,707,272.10 |
| Less: Interest income | 97,172,965.14 | 69,274,034.42 |
| Add: foreign exchange gain/loss | -552,919.95 | -3,213,064.29 |
| Add: other expenses | 1,041,292.17 | 820,841.52 |
| Total | -95,390,413.45 | -68,958,985.09 |
45. Other incomes
In RMB
| Sources generating other incomes | Amount incurred in the current period | Amount incurred in the previous period |
| Financial support fund to boost the corporate development | 25,750,000.00 | 44,730,000.00 |
Amortization of deferred income
| Amortization of deferred income | 11,038,705.47 | 9,823,767.55 |
| Embedded software tax refund | 17,599,690.73 | 9,453,997.74 |
| Special funds for industrial development | 7,597,400.00 | 3,289,700.00 |
| VAT exemption or reduction | 19,633,908.52 | 922,350.00 |
| Post allowance and social insurance allowance | 819,745.08 | 723,791.56 |
| Handling fee refund | 582,214.67 | 684,354.91 |
| R&D input grants | 959,700.00 | 382,847.00 |
| Patent awards | 175,470.00 | |
| Other grants | 1,057,200.00 | 648,750.00 |
| Total | 85,214,034.47 | 70,659,558.76 |
46. Investment income
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Income from long-term equity investments accounted for using the equity method | -3,448,513.93 | -1,263,184.05 |
| Investment income during holding of financial assets for trading | 21,508,694.19 | 22,986,802.86 |
| Total | 18,060,180.26 | 21,723,618.81 |
47. Loss from credit impairment
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Bad debt losses on notes receivable | 157,222.78 | 14,373,972.06 |
| Bad debt losses from accounts receivable | 803,571.44 | 11,131,980.38 |
| Bad debt losses of other receivables | 2,378,889.45 | -2,215,366.04 |
| Total | 3,339,683.67 | 23,290,586.40 |
48. Loss from asset impairment
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| I. Loss from obsolete inventory and from impairment of the cost of contract performance | -203,395.43 | 5,634,807.91 |
| II. Other | -6,441,873.91 | -9,556,264.05 |
| Total | -6,645,269.34 | -3,921,456.14 |
49. Asset disposal income
In RMB
| Sources of asset disposal income | Amount incurred in the current period | Amount incurred in the previous period |
| Gains on disposal of assets held for sale | ||
| Non-current asset disposal income | -242,184.96 | 115,350.08 |
| Including: Gains on disposal of non-current assets classified as held for sale |
Including: income from disposal of fixedassets
| Including: income from disposal of fixed assets | ||
| Right-of-use asset disposal income | ||
| Gains on disposal of non-current assets not classified as held for sale | -242,184.96 | 115,350.08 |
| Including: income from disposal of fixed assets | -242,184.96 | -19,655.41 |
| Right-of-use asset disposal income | 135,005.49 | |
| Gains on exchange of non-monetary assets | ||
| Gain on disposal of non-current assets in debt restructuring | -519,058.40 | -692,068.49 |
| Total | -761,243.36 | -576,718.41 |
50. Non-operating revenue
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in the current non-recurring gains and losses |
| Non-current asset scrapping income | 410.00 | ||
| Others | 885,943.04 | 2,803,549.50 | 885,943.04 |
| Total | 885,943.04 | 2,803,959.50 | 885,943.04 |
51. Non-operating expenditures
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in the current non-recurring gains and losses |
| External donations | 1,506,720.46 | 1,120,457.50 | 1,506,720.46 |
| Amercement outlay | 4,796.33 | 14,450.00 | 4,796.33 |
| Losses from non-current asset damage or retirement | 1,521.37 | 673.95 | 1,521.37 |
| Others | 1,579,508.54 | 314,293.04 | 1,579,508.54 |
| Total | 3,092,546.70 | 1,449,874.49 | 3,092,546.70 |
52. Income tax expenses
(1) Presentation of income tax expenses
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Current income tax expenses | 167,368,358.21 | 187,282,866.64 |
| Deferred income tax expenses | -29,772,787.58 | -35,451,939.13 |
| Total | 137,595,570.63 | 151,830,927.51 |
(2) Adjustment of accounting profit and income tax expense
In RMB
Item
| Item | Amount incurred in the current period |
| Total profit | 886,501,468.97 |
| Income tax expense calculated based on statutory/applicable tax rate | 132,975,220.36 |
| Effects of the subsidiaries’ application of different tax rates | -355,967.81 |
| Effects of the non-deductible costs, expenses and losses | 1,689,446.34 |
| Effects of the deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period | 4,750,492.31 |
| Unrealized internal gains and losses | -1,463,620.57 |
| Income tax expense | 137,595,570.63 |
53. Other comprehensive incomes
See Note "VII. 36 Other Comprehensive Incomes" for details.
54. Cash flow statement items
(1) Cash related to operating activities
Other cash received relating to operating activities
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Government grants | 37,850,227.58 | 56,322,854.76 |
| Interest revenue on deposits | 30,950,627.08 | 69,274,034.42 |
| Revenue collected and payment made on behalf of other agencies | 20,085,722.00 | 5,493,388.35 |
| Guarantee and security deposits | 17,824,926.10 | 14,303,618.62 |
| Other payments | 8,143,953.69 | 6,266,385.36 |
| Cash reserve | 652,861.09 | 1,343,606.65 |
| Letter of credit and acceptance bill margin | 9,984,355.85 | |
| Total | 115,508,317.54 | 162,988,244.01 |
Other cash paid relating to operating activities
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Period expenses | 1,266,026,997.91 | 1,243,206,922.01 |
| Letter of credit and acceptance bill margin | 15,101,782.96 | 21,285,415.74 |
| Revenue collected and payment made on behalf of other agencies | 11,087,898.28 | 10,398,113.72 |
| Cash reserve | 3,665,426.42 | 4,097,943.96 |
| Others | 2,626,171.61 | 1,336,189.77 |
| Guarantee and security deposits | 2,153,199.68 | 8,133,397.66 |
| Total | 1,300,661,476.86 | 1,288,457,982.86 |
(2) Cash related to investment activities
Other cash received in relation to investment activities
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Fixed deposit maturity | 3,100,000,000.00 | |
| Fixed deposit interest | 47,278,944.57 | |
| Total | 3,147,278,944.57 |
Other cash paid relating to investment activities
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Fixed deposit | 3,450,000,000.00 | |
| Total | 3,450,000,000.00 |
(3) Cash related to financing activities
Other cash received in relation to financing activities
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Income from accounts receivable factoring | 500,000.00 | 6,482,178.88 |
| Total | 500,000.00 | 6,482,178.88 |
Other cash paid in relation to financing activities
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Rental | 3,198,439.08 | 3,212,200.53 |
| Total | 3,198,439.08 | 3,212,200.53 |
Changes in liabilities arising from financing activities
□Applicable ?Not applicable
55. Supplementary information of Cash Flow Statement
(1) Supplementary information of Cash Flow Statement
In RMB
| Supplementary information | Current amount | Amount of the previous period |
| 1.Reconciliation of net profit to cash flow from operating activities: | ||
| Net profit | 748,905,898.34 | 823,242,258.65 |
| Add: Asset impairment provision | 3,305,585.67 | -19,369,130.26 |
| Depreciation of fixed assets, depreciation of oil and gas assets, and depreciation of productive biological assets | 83,105,764.28 | 76,275,036.48 |
| Depreciation of right-of-use assets | 2,597,529.36 | 2,662,033.50 |
| Amortization of intangible assets | 7,103,799.90 | 6,770,682.50 |
| Amortization of long-term deferred expenses | 2,126,181.41 | 2,079,639.11 |
Losses arising from disposal offixed assets, intangible assets and otherlong-term assets (gains expressed with "-")
| Losses arising from disposal of fixed assets, intangible assets and other long-term assets (gains expressed with "-") | 761,243.36 | 576,718.41 |
| Losses on disposal of fixed assets (gains indicated with "-") | 1,521.37 | 673.95 |
| Losses from fair value change (gains expressed with “-”) | ||
| Financial expenses (profit shall be indicated with"-") | -46,072,895.01 | -1,152,076.14 |
| Investment losses (gains expressed with “-”) | -18,060,180.26 | -21,723,618.81 |
| Decrease in deferred income tax assets (increase shall be indicated with “-”) | -31,185,395.96 | -34,832,967.10 |
| Increase in deferred income tax liabilities (decrease shall be indicated with “-”) | 1,412,608.38 | -618,972.03 |
| Decrease in inventories (increase shall be indicated with “-”) | 125,001,086.13 | 83,112,866.12 |
| Decrease in operating receivables (increase shall be indicated with “-”) | 202,662,034.39 | 80,656,601.27 |
| Increase in operating payables (decrease expressed with "-") | -667,659,189.97 | -37,946,892.42 |
| Others | ||
| Net cash flow from operating activities | 414,005,591.39 | 959,732,853.23 |
| 2.Non-cash flow-involved major investing and financing activities: | ||
| Conversion of debt into capital | ||
| Convertible bonds due within one year | ||
| Fixed assets acquired under financing leases | ||
| 3.Net increase/decrease in cash and cash equivalents: | ||
| Ending balance of cash | 1,016,889,300.64 | 5,777,869,909.08 |
| Less: cash beginning balance | 1,878,166,358.09 | 5,196,414,341.74 |
| Add: ending balance of cash equivalents | ||
| Less: cash equivalents at the beginning of the period | ||
| Net increase in cash and cash equivalents | -861,277,057.45 | 581,455,567.34 |
(2) Composition of cash and cash equivalents
In RMB
| Item | Ending balance | Beginning balance |
I. Cash
| I. Cash | 1,016,889,300.64 | 1,878,166,358.09 |
| Including: cash on hand | 232,660.84 | 62,267.64 |
| deposits available for payment at any time | 1,015,800,859.35 | 1,877,703,911.46 |
| other cash and cash equivalents available for payment at any time | 855,780.45 | 400,178.99 |
| III. Balance of cash and cash equivalents at the end of the period | 1,016,889,300.64 | 1,878,166,358.09 |
56. Foreign currency monetary item
(1) Foreign currency monetary item
In RMB
| Item | Ending balance in foreign currency | Exchange rate for conversion | Ending balance in RMB |
| Cash and cash equivalents | |||
| Including: USD | 2,114,505.84 | 7.1268 | 15,069,660.22 |
| EUR | 5,853.93 | 7.6617 | 44,851.06 |
| Hong Kong Dollar | 21.90 | 0.91268 | 19.99 |
| Australian Dollar | 513.85 | 4.765 | 2,448.50 |
| Accounts receivable | |||
| Including: USD | 3,849,841.39 | 7.1268 | 27,437,049.62 |
| EUR | |||
| Hong Kong Dollar | |||
| Australian Dollar | 30.00 | 4.765 | 142.95 |
(2) Description for overseas operating entities, including the disclosure of the main business locationoverseas, bookkeeping base currency and selection basis for the important business entity overseas aswell as the reason for the change of bookkeeping base currency (if any).
□Applicable ?Not applicable
VIII. R&D expenditure
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Total | 178,373,820.48 | 172,734,141.15 |
| Including: Expensed R&D expenditure | 178,373,820.48 | 172,734,141.15 |
IX. Changes in the scope of consolidated financial statements
1. Changes in the scope of consolidated financial statements due to other reasons
On January 26, 2024, the General Manager's Office Meeting passed the following resolution: RobamAppliances Holding (HK) Co., Ltd. establishes a wholly-owned subsidiary, Robam Appliances U.S.
Holding Co., Ltd., with a registered capital of USD 5,000. Robam Appliances U.S. Holding Co., Ltd. andWGSZ HOLDING LLC jointly establishes Robam Appliances Los Angeles Trade, with a registeredcapital of USD 10,000. Robam Appliances U.S. Holding Co., Ltd. holds 70% of the shares, while WGSZHOLDING LLC holds 30%. Robam Appliances Los Angeles Trade will primarily engage in the sales oflarge household kitchen appliances.On January 29, 2024, Robam Appliances U.S. Holding Co., Ltd. was officially established andobtained its registration certificate. The registered address is: 8 The Green, Ste A, Dover, DE 19901.On March 26, 2024, Robam Appliances Los Angeles Trade was officially established and obtained itsregistration certificate. The registered address is: 324 S Diamond Bar Blvd, Unit Num 717, Diamond Bar,CA 91765.On March 11, 2024, the General Manager's Office Meeting passed a resolution to establish ChengduRobam Innovation Technology Co., Ltd. The Chengdu subsidiary completed its business registration onMarch 27, 2024, with a registered capital of RMB 5,000,000. The Unified Social Credit Code is91510100MADF89W069. The legal representative is Ge Hao. The registered address is: 2902, 2903, 2904,Building A, No. 500, Tianfu Avenue Middle Section, Chengdu High-tech Zone, China (Sichuan) Pilot FreeTrade Zone. The main business scope includes technology development and services.X. Interests in Other Entities
1. Equity in subsidiaries
(1) Composition of the Robam Group
In RMB
| Subsidiary | Principal place of business | Registration place | Nature of business | Shareholding ratio | Acquisition method | |
| Direct | Indirect | |||||
| Beijing Robam Appliances Sales Co., Ltd. | Beijing | Beijing | Sales of kitchen appliances | 100.00% | Business merger under comm on control | |
| Shanghai Robam Appliances Sales Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 100.00% | Business merger under comm on control | |
| Hangzhou MingQi Electric Co., Ltd. | Hangzhou | Hangzhou | Sales of kitchen appliances | 100.00% | Acquisition upon its establishment | |
| De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 51.00% | Acquisition upon its establishment | |
| Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. | Shengzhou | Shengzhou | Production and sales of kitchen appliances | 51.00% | Business merger not under common control | |
| Hangzhou Robam Fuchuang Investment Management Co., Ltd. | Hangzhou | Hangzhou | Asset, investment management, etc. | 100.00% | Acquisition upon its establishment | |
| Zhejiang Cookingfuture Technology Co., Ltd. | Shengzhou | Shengzhou | Smart kitchen design | 32.13% | Acquisition upon its establishment | |
| Hangzhou Jinhe Electric | Hangzho | Hangzho | Sales of kitchen | 100.00 | Acquisition upon its | |
Appliances Co., Ltd.
| Appliances Co., Ltd. | u | u | appliances | % | establishment | |
| Robam Appliances Holding (HK) Co., Ltd. | Hong Kong | Hong Kong | Asset, investment management, etc. | 100.00% | Acquisition upon its establishment | |
| Robam International (HK) Trading Co., Ltd. | Hong Kong | Hong Kong | International trade of kitchen appliances | 100.00% | Acquisition upon its establishment | |
| Chengdu Robam Innovation Technology Co., Ltd. | Chengdu City | Chengdu City | Technology development and services | 100.00% | Acquisition upon its establishment | |
| Robam Appliances U.S. Holding Co., Ltd. | United States | United States | Asset, investment management, etc. | 100.00% | Acquisition upon its establishment | |
| Robam Appliances Los Angeles Trade Co., Ltd. | United States | United States | Sales of kitchen appliances | 70.00% | Acquisition upon its establishment |
Other description:
Note: The Company holds 50% or less voting rights in Zhejiang Cookingfuture Technology Co., Ltd.,but still maintains control over it. This is based on the fact that the Company has a controlling relationshipwith Shengzhou Kinde, so the Company has a controlling relationship with its holding subsidiary ZhejiangCookingfuture Technology Co., Ltd.On January 6, 2022, Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd., a subsidiary of theCompany, signed an Equity Transfer Agreement with Gongqingcheng Binglan Investment Partnership(Limited Partnership). According to the agreement, Shengzhou Kinde Intelligent Kitchen Appliance Co.,Ltd. shall transfer its 7% equity stake in Cooking Future Technology Co., Ltd. to Gongqingcheng BinglanInvestment Partnership (Limited Partnership). As a result, the equity stake of Shengzhou Kinde IntelligentKitchen Appliance Co., Ltd. shall decrease from 70% to 63%, and the Company's stake shall decreasefrom 35.70% to 32.13%.
(2) Major non-wholly owned subsidiaries
In RMB
| Subsidiary | Proportion of shares held by minority shareholders | Gains/losses attributable to minority shareholders in the current period | Dividend declared and distributed to minority shareholders in the current period | Shengzhou Kinde Intelligent Kitchen |
| Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. | 49.00% | -6,703,313.43 | -98,129,106.28 | |
| Zhejiang Cookingfuture Technology Co., Ltd. | 37.00% | -2,700,699.30 | 3,457,434.62 | |
| Robam Appliances Los Angeles Trade Co., Ltd. | 30.00% | -1,049,009.80 | -1,049,009.80 |
(3) Main financial information of important partially-owned subsidiaries
In RMB
| Subsidiary | Ending balance | Beginning balance | ||||||||||
| Curren | Non- | Total | Curren | Non- | Total | Curren | Non- | Total | Curren | Non- | Total | |
t assets
| t assets | current assets | assets | t liabilities | current liabilities | liabilities | t assets | current assets | assets | t liabilities | current liabilities | liabilities | |
| Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. | 111,732,108.81 | 329,629,631.12 | 441,361,739.93 | 197,422,945.98 | 42,090,948.04 | 239,513,894.02 | 109,441,329.81 | 341,074,155.13 | 450,515,484.94 | 188,644,246.55 | 41,769,390.83 | 230,413,637.38 |
| Zhejiang Cookingfuture Technology Co., Ltd. | 24,279,040.43 | 6,854,603.08 | 31,133,643.51 | 21,789,225.65 | 21,789,225.65 | 17,730,954.22 | 7,438,578.53 | 25,169,532.75 | 8,525,927.58 | 8,525,927.58 | ||
| Robam Appliances Los Angeles Trade Co., Ltd. | 18,686,423.41 | 18,686,423.41 | 9,724,347.63 | 9,724,347.63 |
In RMB
| Subsidiary | Amount incurred in the current period | Amount incurred in the previous period | ||||||
| Operating income | Net profit | Total comprehensive income | Operating cash flow | Operating income | Net profit | Total comprehensive income | Operating cash flow | |
| Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. | 52,276,506.48 | -16,380,401.60 | -16,380,401.60 | -19,588,199.17 | 67,284,556.69 | -10,892,781.85 | -10,892,781.85 | -37,399,921.57 |
| Zhejiang Cookingfuture Technology Co., Ltd. | 3,303,023.08 | -7,299,187.31 | -7,299,187.31 | 3,530,135.56 | 1,510,766.45 | -6,034,482.41 | -6,034,482.41 | -8,517,161.83 |
| Robam Appliances Los Angeles Trade Co., Ltd. | 2,451,606.70 | -3,496,699.32 | -3,496,699.32 | -7,998,182.79 | ||||
2. Equity in joint ventures or associates
(1) Summary of the financial information of minor joint ventures and associates
In RMB
| Ending balance/amount incurred in current period | Beginning balance/ amount incurred in last period | |
| Joint venture: | ||
| Total book value of investment | 1,097,575.77 | 4,321,729.39 |
| Totals of the following items calculated as per respective shareholding proportion | ||
| --Net profit | -3,224,153.62 | 497,269.36 |
| -Total comprehensive income | -3,224,153.62 | 497,269.36 |
| Associated company: | ||
| Total book value of investment | 3,881,360.54 | 4,105,720.85 |
| Totals of the following items calculated as per respective shareholding proportion | ||
| --Net profit | -224,360.31 | -788,324.74 |
| -Total comprehensive income | -224,360.31 | -788,324.74 |
Other description
| Name of joint ventures and associates | Principal place of business | Registration place | Nature of business | Shareholding (%) | Accounting treatment for investment in joint ventures and associates | |
| Direct | Indirect | |||||
| De Dietrich Appliances Trading (Shanghai) Co., Ltd. | Shanghai | Shanghai | Sales of kitchen appliances | 51.00 | Equity method | |
| Zhejiang Tingshuo Brand Operation Management Co., Ltd. | Hangzhou | Hangzhou | Retail | 40.00 | Equity method | |
| Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. | Shaoxing | Shaoxing | Kitchen appliance manufacturing | 40.00 | Equity method | |
XI. Government grants
1. Government grants recognized based on receivables at the end of the reporting period
□Applicable ?Not applicable
Reasons for not receiving the projected amount of government grants at the projected point in time
□Applicable ?Not applicable
2. Liabilities involving government grants
?Applicable □Not applicable
In RMB
| Account | Beginning balance | Added subsidy amount in the current period | Amount included in non-operating income in the current period | Amount transferred to other income in the current period | Other changes this period | Ending balance | Related to assets/income |
| Deferred income | 136,538,254.74 | 11,038,705.47 | 125,499,549.27 | Related to assets | |||
| Total | 136,538,254.74 | 11,038,705.47 | 125,499,549.27 |
3. Government grants included in the current profit or loss
?Applicable □Not applicable
In RMB
| Account | Amount incurred in the current period | Amount incurred in the previous period |
| Other income | 85,214,034.47 | 70,659,558.76 |
Other description:
XII. Risks Relating to Financial Instruments
1. Various risks arising from financial instruments
Major financial instruments of the Company include accounts receivable, accounts payable, etc. SeeNote VI for detailed description of these financial instruments. Risks related to these financial instrumentsand risk management policies adopted by the Company to reduce such risks are outlined as follows. Themanagement of the Company manages and monitors such risk exposures to ensure to keep the risks abovewithin limited scope.The Company's various risk management objectives and policies are outlined as follows:
Risk management conducted by the Company is to properly balance risk and income, minimizenegative impacts of the risks on the Company’s business performance and maximize benefits of theshareholders and other equity investors. Based on the risk management objective, the Company’s basicrisk management policy is to determine and analyze all kinds of risks faced by the Company, establishappropriate risk bottom line for risk management, and monitor all risks promptly and reliably to keep riskswithin a limited range.? Market risk price risk
Since the Company sells its products at market prices, it may be affected by such price fluctuations.? Credit risk
As of June 30, 2024, the biggest credit risk exposure that may bring financial loss to the Companymainly comes from the Company’s financial assets loss caused by the other party’s failure to perform itsobligations in the contract, particularly including the loss in the book value of recognized financial assetsin the consolidated balance sheet.To reduce credit risk, the Company has a dedicated team responsible for determining the credit line,conducting credit approval and implementing other monitoring procedures, to ensure that necessarymeasures are taken to recover due debt. In addition, the Company reviews the recovery of each accountpayable on each balance sheet date, so as to ensure sufficient bad debt provisions for unrecoverableaccounts. Therefore, the management of the Company holds that the credit risk faced by the Company hasbeen significantly reduced.The credit risk of the Company’s liquid capital is low since it is deposited at banks with relativelyhigh credit rating.Because the risk exposures of the Company are related to multiple contracting parties and multipleclients, the Company has no major credit risk concentration.The Company adopts necessary policies to ensure all of the clients involved in the sales of ourproducts have good credit record. The Company has no major credit risk concentration.Total amount of the top five accounts receivable: RMB 1,721,028,638.79.Total amount of the top five other accounts receivable: RMB 29,489,661.18? Liquidity riskLiquidity risk is faced by the Company where it cannot meet its financial obligations as they fall due.The Company manages the liquidity risk by ensuring capital liquidity to fulfill its due obligations to avoidunacceptable losses or damages to corporate reputation. The Company management has closely examinedthe liquid assets of the Company and regularly analyzed the liability structure/term and bank lines and soon to endure fund sufficiency. It is concluded that the Company has sufficient funds to meet the demandsof short-term loans and capital expenditure of the Company. Analysis of the financial assets and financialliabilities of the Company as per maturity of the undiscounted contract obligations remained is made asfollows:
Balance on June 30, 2024
| Item | Within 1 year | 1-2 years | 2-5 years | Over 5 years | Total |
| Financial asset | |||||
| Cash and cash equivalents | 1,147,837,731.76 | 1,147,837,731.76 | |||
| Financial assets held for trading | 2,551,000,029.50 | 2,551,000,029.50 | |||
| Notes receivable | 368,798,633.67 | 368,798,633.67 |
Accounts receivable
| Accounts receivable | 1,863,130,927.89 | 1,863,130,927.89 | |||
| Other receivables | 86,770,440.47 | 86,770,440.47 | |||
| Other current assets | 1,548,608,076.94 | 1,548,608,076.94 | |||
| Other non-current financial assets | 580,000,000.00 | 580,000,000.00 | |||
| Other non-current assets | 20,000,000.00 | 3,220,000,000.00 | 3,240,000,000.00 | ||
| Financial liabilities | |||||
| Short-term loans | 115,003,320.70 | 115,003,320.70 | |||
| Notes payables | 993,551,028.00 | 993,551,028.00 | |||
| Accounts payable | 2,384,005,428.78 | 2,384,005,428.78 | |||
| Other payables | 290,336,577.77 | 290,336,577.77 | |||
| Payroll payable | 39,032,647.38 | 39,032,647.38 | |||
| Other current liabilities | 94,072,365.82 | 94,072,365.82 | |||
| Non-current liabilities due within one year | 2,163,637.20 | 2,163,637.20 | |||
| Lease liabilities | 2,488,952.25 | 5,148,043.33 | 2,706,464.25 | 10,343,459.83 |
? Sensitivity analysis of foreign exchange riskThe exchange rate risk borne by the Company is mainly associated with USD, Euro and AUD, etc.The Company's main business activities priced and settled in RMB. The Company’s main businessactivities priced and settled in RMB. As of June 30, 2024, the Company’s balances of assets and liabilitiesare in RMB (except for the balances of the assets and liabilities in foreign currency in "VI. 56 Monetaryitems in foreign currency" in this Note). Exchange risk resulting from the assets and liabilities whosebalances are in foreign currency may affect the Company’s performance.The Company pays close attention to the impact of change in exchange rate on the Company’sexchange risk. Currently, the Company hasn’t adopted any measures to avoid foreign exchange risk.XIII. Disclosure of Fair Value
1. Fair value at end of the period of assets and liabilities measured at fair value
In RMB
| Item | Ending fair value | |||
| Fair value measurement (Level 1) | Fair value measurement (Level 2) | Fair value measurement (Level 3) | Total | |
| Continuous fair value measurement | -- | -- | -- | -- |
| (I) Financial assets held for trading | 2,551,000,029.50 | 2,551,000,029.50 | ||
| 1. Financial assets measured at fair value with changes included | 2,551,000,029.50 | 2,551,000,029.50 | ||
in current profit or loss
| in current profit or loss | ||||
| (1) Financial products | 2,551,000,029.50 | 2,551,000,029.50 | ||
| (III) Investment in other equity instruments | 2,116,023.22 | 2,116,023.22 | ||
| (VI) Other non-current financial assets | 580,000,000.00 | 580,000,000.00 | ||
| 1. Financial assets measured at fair value with changes included in current profit or loss | 580,000,000.00 | 580,000,000.00 | ||
| (1) Financial products | 580,000,000.00 | 580,000,000.00 | ||
| Total assets measured continuously at fair value | 3,133,116,052.72 | 3,133,116,052.72 | ||
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. Valuation techniques adopted and qualitative and quantitative information on important parametersfor the items involved in Level 3 continuous and non-continuous fair value measurement
| Item | June 30, 2024 Fair value | Valuation techniques | Significant unobservable value | Relationship between unobservable value and fair value |
| financial products | 3,131,000,029.50 | Optimal fair value estimation | Investment cost | — |
| Investment in other equity instruments | 2,116,023.22 | Optimal fair value estimation | Investment cost | — |
Note: Due to the deteriorating operating environment, operating conditions and financial status of theinvested company, Suzhou Industrial Park Ruican Investment Enterprise (Limited Partnership), theCompany measured its fair value at zero yuan as a reasonable estimate.
XIV. Related Party and Related Party Transactions
1. The Company's parent company
| Parent company | Registration place | Nature of business | Registered capital | Proportion of the voting right of the parent company | Proportion of Company's shares held by the parent company in the Company |
| Hangzhou Robam Industrial Group Co., Ltd. | Hangzhou, Zhejiang | Investment and industrial management | RMB 60 million | 49.68% | 49.68% |
Description of the parent companyThe ultimate controlling party of the Company is Ren Jianhua.
2. The Company's subsidiaries
See Note "Equity in Subsidiaries" for more about the Company's subsidiaries.
3. The Company's joint ventures and associated companies
See Note "Immaterial joint ventures and associates" for more about the Company’s joint ventures or associated companies.
4. Other related parties
| Name of other related parties | Relation between other related parties and the Company |
| Hangzhou Amblem Household Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Yuhang Robam Fuel Station Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Nbond Nonwovens Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Bonyee Daily Necessity Technology Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Guoguang Touring Commodity Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Xiaozhijia Health Care Product Co., Ltd. | Controlled by the same ultimate controlling party |
| Hangzhou Yuhang Yaguang Spray Coating Factory | Other related parties |
| Hangzhou City Garden Hotel Co., Ltd. | Other related parties |
| Shaoxing Kinde Electric Appliances Co., Ltd. | Other related parties |
| Hangzhou Linping ROBAM Charity Foundation | Other related parties |
| Hangzhou Runqun Hardware Co., Ltd. | Other related parties |
5. Related transactions
(1) Related transactions regarding purchasing and selling goods and providing and accepting laborservices
Table of the purchasing of goods and receiving of labor services
In RMB
| Related parties | Description of the related transaction | Amount incurred in the current period | Trading limit approved | Whether exceeds the approved limited or not (Y/N) | Amount incurred in the previous period |
| Hangzhou Runqun Hardware Co., Ltd. | Purchase of goods | 5,024,244.72 | 3,569,947.74 | ||
| Hangzhou Xiaozhijia Health Care Product Co., Ltd. | Purchase of goods | 1,528,600.79 | 1,046,680.73 | ||
| Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. | Purchase of goods | 1,405,582.77 | 439,198.72 | ||
| Hangzhou Amblem Household Co., Ltd. | Purchase of goods | 1,015,191.01 | 845,058.44 | ||
| Hangzhou City Garden Hotel Co., Ltd. | Receiving of labor services | 852,662.55 | |||
| Hangzhou Yuhang Robam Fuel Station Co., Ltd. | Purchase of goods | 394,469.78 | 429,770.25 | ||
| Hangzhou Guoguang Touring Commodity Co., Ltd. | Purchase of goods | 13,982.30 | 13,954.34 | ||
| Hangzhou Yuhang Yaguang Spray Coating Factory | Receiving of labor services | 805,737.85 | |||
| Hangzhou Bonyee Daily | Purchase of | 4,470.08 |
Necessity Technology Co., Ltd.
| Necessity Technology Co., Ltd. | goods | ||||
| Total | 10,234,733.92 | 7,154,818.15 |
Goods Sales/labor service provision
In RMB
| Related parties | Description of the related transaction | Amount incurred in the current period | Amount incurred in the previous period |
| Hangzhou Linping ROBAM Charity Foundation | Sale of goods | 1,124,610.65 | 1,001,649.72 |
| Hangzhou Amblem Household Co., Ltd. | Sale of goods | 976,921.25 | 1,629,834.52 |
| Hangzhou Nbond Nonwovens Co., Ltd. | Sale of goods | 15,216.05 | 16,429.20 |
| Total | 2,116,747.95 | 2,647,913.44 |
(2) Related lease
The Company acts as the lessor:
In RMB
| Lessee | Type of leased asset | Rental income recognized in the current period | Rental income recognized in the previous period |
| Hangzhou Robam Industrial Group Co., Ltd. | Housing | 14,400.00 | 14,400.00 |
| Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. | Housing | 339,922.70 | 235,163.52 |
The Company acts as the Lessee:
In RMB
| Lessor | Type of leased asset | Rental expenses for simplified short-term leases and leases of low-value assets (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Rental paid | Interest expense incurred on lease liabilities | Increased right-of-use assets | |||||
| Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | ||
| Hangzhou Robam Industrial Group Co., Ltd. | Housing | 275,012.28 | 275,012.28 | 275,012.28 | 275,012.28 | ||||||
(3) Benefits of key management personnel
Unit: RMB 10,000
Item
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Total remuneration | RMB 4,120,900 | RMB 4,279,000 |
6. Receivables and payables of related parties
(1) Accounts receivable
In RMB
| Project | Related parties | Ending balance | Beginning balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Accounts receivable | Hangzhou Linping ROBAM Charity Foundation | 1,089,782.00 | 54,489.10 | ||
| Accounts receivable | De Dietrich Appliances Trading (Shanghai) Co., Ltd. | 1,051,825.87 | 52,591.29 | 1,051,825.87 | 52,591.29 |
| Accounts receivable | Hangzhou Amblem Household Co., Ltd. | 176,456.00 | 8,822.80 | ||
| Prepayments | Hangzhou Amblem Household Co., Ltd. | 20,000.00 | |||
| Total | 2,338,063.87 | 115,903.19 | 1,051,825.87 | 52,591.29 | |
(2) Accounts payable
In RMB
| Project | Related parties | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Accounts payable | Hangzhou Yuhang Robam Fuel Station Co., Ltd. | 4,182,748.79 | 3,736,997.95 |
| Accounts payable | Hangzhou Runqun Hardware Co., Ltd. | 3,438,501.95 | 4,936,378.35 |
| Accounts payable | Hangzhou Amblem Household Co., Ltd. | 1,115,529.19 | 1,366,001.27 |
| Accounts payable | Shaoxing Shuaige Kitchen and Bathroom Technology Co., Ltd. | 423,399.45 | |
| Accounts payable | Hangzhou Xiaozhijia Health Care Product Co., Ltd. | 396,601.29 | |
| Other payables | Hangzhou Runqun Hardware Co., Ltd. | 200,000.00 | 200,000.00 |
| Other payables | Hangzhou Amblem Household Co., Ltd. | 5,000.00 | 5,000.00 |
| Other payables | Hangzhou Guoguang Touring Commodity Co., Ltd. | 2,000.00 | 2,000.00 |
| Total | 9,763,780.67 | 10,246,377.57 |
XV. Share-based Payment
1. Overview of share payment
?Applicable □Not applicable
Unit: RMB 10,000
| Category of | Awarded during the | Exercise during the period | Unlocking in the current | Expired in the current |
grantrecipients
| grant recipients | period | period | period | |||||
| Number | Amount | Number | Amount | Number | Amount | Number | Amount | |
| Management personnel | 569.00 | 5,193.26 | 90.18 | 302.96 | 319.08 | 1,380.47 | ||
| Total | 569.00 | 5,193.26 | 90.18 | 302.96 | 319.08 | 1,380.47 | ||
Stock options or other equity instruments issued at the end of the period and held by external parties
□Applicable ?Not applicable
Other description
On May 16, 2024, the Company held the 2023 Annual General Meeting of Shareholders anddeliberated and adopted the Proposal on 2024 Stock Option Incentive Plan (Draft) of the Company and ItsSummary and other related proposals. On May 20, 2021, the 6th Meeting of the 6th Board of Directors ofthe Company deliberated and approved the Proposal on the Granting Stock Options to Incentive Targets.The stock option incentive grant date was May 20, 2024. A total of 337 individuals were granted options,amounting to 5.69 million shares, with an exercise price of RMB 18.92 per share. On June 24, 2024, thestock option grants were officially registered.On June 20, 2024, the 8th meeting of the 6th board of directors and the 8th meeting of the 6th boardof supervisors reviewed and approved the Proposal on the Achievement of Exercise Condition during theFirst Exercise Period of the 2023 Stock Option Incentive Plan. The exercise condition of the first exerciseperiod of the 2023 stock option incentive plan has been met. Of the 293 eligible individuals, a total of901,800 stock options are exercisable at an exercise price of RMB 21.01 per share. As of June 30, 2024, noincentives have been exercised.
2. Equity-settled share-based payment
?Applicable □Not applicable
In RMB
| Method for determining the fair value of equity instruments on the grant date | The Company evaluates the fair value of stock options using the internationally recognized Black-Scholes option pricing model. |
| Important parameters for determining the fair value of equity instruments on the grant date | Best estimate of the number of vested equity instruments |
| basis for determining the number of vested equity instruments | N/A |
| Reasons for material differences between the current estimate and the previous estimate | N/A |
| Cumulative amount of equity-settled share-based payments included in the capital reserve | 18,333,587.85 |
| Total expense recognized for equity-settled share-based payments in the current period | 8,698,813.25 |
3. Cash-settled share-based payment
□Applicable ?Not applicable
4. Share-based payment for the current period
?Applicable □Not applicable
In RMB
| Category of grant recipients | Equity-settled share-based payment expense | Cash-settled share-based payment expense |
| Management personnel | 8,698,813.25 | |
| Total | 8,698,813.25 |
XVI. Commitments and Contingencies
1. Major commitments
(1) Major commitments on the balance sheet date
Investment commitments to subsidiaries and associatesThe Company committed to investing RMB 4 million in Zhejiang Tingshuo Brand OperationManagement Co., Ltd., of which RMB 2 million has been paid in, accounting for 40% of the shares. Theremaining RMB 2 million has not been paid in.Apart from the above-mentioned commitments, the Company has no other significant commitments.
2. Contingencies
(1) It’s also necessary to make it clear hereby that the Company has no major contingencies that need tobe disclosed
The Company has no significant or pending matters that need to be disclosed.XVII. Events After the Balance Sheet Date
1. Profit distribution
| The proposed dividend per 10 shares (RMB) | 5 |
| The proposed number of bonus shares per 10 shares (shares) | 0 |
| The proposed number of additional shares per 10 shares (shares) | 0 |
| The dividend per 10 shares declared and approved for distribution (RMB) | 5 |
| The number of bonus shares per 10 shares declared and approved for distribution (shares) | 0 |
| The number of additional shares per 10 shares declared and approved for distribution (shares) | 0 |
| Profit distribution | As of June 30, 2024, the undistributed profits of the parent company amounted to RMB 9,349,860,281.22. According to |
the resolution of the board of directors, the Company plans toimplement mid-term dividend distribution to reward itsshareholders. The specific dividend distribution plan is asfollows:
(1) The Company plans to distribute cash dividends of RMB 5
per 10 shares (including tax) to all shareholders, based on thetotal share capital of 944,127,316 shares as of July 31, 2024.The total amount of dividends to be distributed is RMB472,063,658.00.
(2) Purpose of mid-term dividend distribution: first, to meet the
needs of the Company's long-term stable and healthydevelopment; second, to increase cash dividend distribution toboost market confidence, while ensuring that the Company'snormal operations and long-term development are not affected;third, to actively reward shareholders, share the Company'sdevelopment dividends with them, and enhance their sense ofgain.If the Company’s share capital changes due to reasons such asnew shares being listed, stock option exercises, convertiblebonds being converted into shares, or share repurchasesbetween the announcement of the distribution plan and theequity registration date for the dividend distribution,adjustments will be made based on the principle of"maintaining the distribution ratio and adjusting the totaldistribution amount accordingly".
the resolution of the board of directors, the Company plans toimplement mid-term dividend distribution to reward itsshareholders. The specific dividend distribution plan is asfollows:
(1) The Company plans to distribute cash dividends of RMB 5
per 10 shares (including tax) to all shareholders, based on thetotal share capital of 944,127,316 shares as of July 31, 2024.The total amount of dividends to be distributed is RMB472,063,658.00.
(2) Purpose of mid-term dividend distribution: first, to meet the
needs of the Company's long-term stable and healthydevelopment; second, to increase cash dividend distribution toboost market confidence, while ensuring that the Company'snormal operations and long-term development are not affected;third, to actively reward shareholders, share the Company'sdevelopment dividends with them, and enhance their sense ofgain.If the Company’s share capital changes due to reasons such asnew shares being listed, stock option exercises, convertiblebonds being converted into shares, or share repurchasesbetween the announcement of the distribution plan and theequity registration date for the dividend distribution,adjustments will be made based on the principle of"maintaining the distribution ratio and adjusting the totaldistribution amount accordingly".
2. Subsequent events after the balance sheet date
1. Important non-adjustment matters
(1) Debt restructuring matters after the period
As of the reporting date, the Company has entered into new debt settlement agreements with accountsreceivable amounting to RMB 24.0659 million. For agreements signed prior to the semi-annual period of2024, RMB 8.9441 million has been processed through online signing and property transfer proceduresbetween the balance sheet date and the reporting date.
Apart from the above-mentioned matters, the Company has no other significant subsequent events.
(2) Inventory stock cancellation
On June 3, 2024, the Company held the 7th meeting of the 6th board of directors and the 7th meetingof the 6th supervisory board, where the Proposal to Cancel Repurchased A-shares and Reduce theRegistered Capital by Amending the Articles of Association was approved. The Company plans to cancel4,929,134 shares held in its repurchase special securities account. On June 19, 2024, the Company's firstextraordinary general meeting of shareholders for 2024 was convened, which deliberated and approved theProposal to Cancel Repurchased A-shares and Reduce the Registered Capital by Amending the Articles ofAssociation. The cancellation was completed on July 3, 2024.
XVIII. Other Significant Events
1. Debt restructuring
As of June 30, 2024, the Company's situation regarding the signing of agreement on properties exchangedfor construction services and the completion of procedures for purchasing houses through online signing isas follows:
| Item | Amount of debt repayment agreement signed | Including: Amount required for completion of procedures for online signing and delivery of houses | Amount required in case of unfinished procedures for online signing or delivery of houses |
| Real estate clients | 569,023,648.37 | 134,223,212.67 | 434,800,435.70 |
| Total | 569,023,648.37 | 134,223,212.67 | 434,800,435.70 |
The Company signed an agreement on properties exchanged for construction services with theaforementioned real estate clients, involving a total accounts receivable balance of RMB 569,023,600. Theprocedures for online signing and delivery of the portion of RMB 139,726,900 has been completed, andthe recognition of creditor's rights on accounts receivable has been terminated. The fair value of the realestate used for debt repayment at the time point of debt restructuring is presented in the item of other non-current assets, with a fair value of the portion of RMB 139,726,900 confirmed through public marketinquiry. The Company paid a price difference of RMB 5,503,700 in cash. At the time point of debtrestructuring, there was no profit or loss from the restructuring. The procedures for online signing andfiling of the houses have not yet been completed for the remaining portion of RMB 434,800,400. TheCompany has not terminated the recognition of the creditor's rights on accounts receivable and has made abad debt provision at an expected credit loss rate of 35%.XIX. Notes to Main Items of the Financial Statements of the Parent Company
1.Accounts receivable
(1) Disclosure by aging of accounts
In RMB
| Age | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Within 1 year (including 1 year) | 1,498,585,068.97 | 1,489,994,730.67 |
| 1-2 years | 510,711,550.14 | 472,477,129.39 |
| 2-3 years | 694,954,788.07 | 885,752,898.72 |
| More than 3 years | 308,799,643.65 | 45,010,462.60 |
| 3-4 years | 297,161,038.69 | 34,537,581.13 |
| 4-5 years | 5,845,857.62 | 6,215,681.25 |
| More than 5 years | 5,792,747.34 | 4,257,200.22 |
Total
| Total | 3,013,051,050.83 | 2,893,235,221.38 |
(2) Classification of disclosure according to the bad debt provision method
In RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Accounts receivable with individual bad debt provisions | 1,542,170,003.24 | 51.18% | 1,040,575,707.96 | 67.47% | 501,594,295.28 | 1,550,300,627.39 | 53.58% | 1,053,487,050.41 | 67.95% | 496,813,576.98 |
| Including: | ||||||||||
| Accounts receivable with a collective bad debt provision | 1,470,881,047.59 | 48.82% | 93,068,383.60 | 6.33% | 1,377,812,663.99 | 1,342,934,593.99 | 46.42% | 83,899,580.41 | 6.25% | 1,259,035,013.58 |
| Including: | ||||||||||
| Accounts receivable grouped according to related parties | 181,016,597.89 | 6.01% | 181,016,597.89 | 98,882,576.05 | 3.42% | 98,882,576.05 | ||||
| Aging combination | 1,289,864,449.70 | 42.81% | 93,068,383.60 | 7.22% | 1,196,796,066.10 | 1,244,052,017.94 | 43.00% | 83,899,580.41 | 6.74% | 1,160,152,437.53 |
| Total | 3,013,051,050.83 | 100.00% | 1,133,644,091.56 | 37.62% | 1,879,406,959.27 | 2,893,235,221.38 | 100.00% | 1,137,386,630.82 | 39.31% | 1,755,848,590.56 |
Category by individual bad debt provision:
In RMB
| Name | Beginning balance | Ending balance | ||||
| Book balance | Bad debt provision | Book balance | Bad debt provision | Percentage of provision | Reasons for provision | |
Unit 1
| Unit 1 | 660,039,726.23 | 660,039,726.23 | 658,945,936.78 | 658,945,936.78 | 100.00% | Expected to be difficult to recover |
| Unit 2 | 364,027,062.34 | 109,208,118.70 | 337,200,324.44 | 101,160,097.33 | 30.00% | Expected to be difficult to fully recover |
| Unit 3 | 201,626,455.66 | 86,259,958.01 | 241,053,412.05 | 105,439,212.41 | 43.74% | Expected to be difficult to fully recover |
| Unit 4 | 103,644,563.87 | 62,549,255.29 | 95,720,766.37 | 61,418,433.11 | 64.16% | Expected to be difficult to fully recover |
| Unit 5 | 29,833,027.36 | 20,883,119.15 | 27,931,724.10 | 14,952,948.85 | 53.53% | Expected to be difficult to fully recover |
| Unit 6 | 28,796,628.81 | 12,808,177.77 | 28,769,213.01 | 10,387,277.95 | 36.11% | Expected to be difficult to fully recover |
| Unit 7 | 25,826,189.64 | 17,748,183.70 | 23,326,159.14 | 14,689,394.40 | 62.97% | Expected to be difficult to fully recover |
| Unit 8 | 22,983,529.61 | 15,004,193.26 | 21,737,772.41 | 10,699,859.15 | 49.22% | Expected to be difficult to fully recover |
| Unit 9 | 15,100,611.29 | 8,471,506.90 | 15,028,917.55 | 8,113,002.52 | 53.98% | Expected to be difficult to fully recover |
| Unit 10 | 13,643,117.43 | 7,265,607.25 | 13,818,085.83 | 7,388,085.13 | 53.47% | Expected to be difficult to fully recover |
| Unit 11 | 11,403,482.66 | 6,897,017.86 | 9,080,624.77 | 5,372,708.62 | 59.17% | Expected to be difficult to fully recover |
| Unit 12 | 9,391,156.30 | 4,698,425.06 | 8,175,161.48 | 3,847,228.69 | 47.06% | Expected to be difficult to fully recover |
| Unit 13 | 9,180,961.06 | 9,180,961.06 | 9,180,961.06 | 9,180,961.06 | 100.00% | Expected to be difficult to recover |
| Unit 14 | 8,175,007.62 | 3,440,071.29 | 8,175,007.62 | 3,440,071.29 | 42.08% | Expected to be difficult to fully recover |
| Unit 15 | 7,305,800.75 | 5,114,060.53 | 7,151,711.18 | 2,896,821.17 | 40.51% | Expected to be difficult to fully recover |
| Unit 16 | 3,921,670.93 | 2,745,169.65 | 5,133,382.93 | 3,593,368.05 | 70.00% | Expected to be difficult to fully recover |
| Unit 17 | 3,616,362.19 | 2,531,453.53 | 3,616,362.19 | 2,531,453.53 | 70.00% | Expected to be difficult to fully recover |
| Unit 18 | 3,317,253.79 | 1,554,840.55 | 3,584,790.07 | 1,672,115.95 | 46.64% | Expected to be difficult to fully recover |
| Unit 19 | 3,310,609.08 | 1,715,551.82 | 3,519,010.46 | 1,829,963.77 | 52.00% | Expected to be difficult to fully recover |
| Unit 20 | 3,056,422.32 | 1,145,907.85 | 1,746,554.15 | 1,222,587.91 | 70.00% | Expected to be difficult to fully |
recover
| recover | ||||||
| Others | 22,100,988.45 | 14,225,744.95 | 19,274,125.65 | 11,794,180.29 | 61.19% | Expected to be difficult to fully recover |
| Total | 1,550,300,627.39 | 1,053,487,050.41 | 1,542,170,003.24 | 1,040,575,707.96 |
Category for bad debts provision by combination: In the combination, provision for bad debts of accounts receivable is providedby associated parties
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Percentage of provision | |
| Less than 1 year | 181,016,597.89 | ||
| 1-2 years | |||
| 2-3 years | |||
| 3-4 years | |||
| 4-5 years | |||
| More than 5 years | |||
| Total | 181,016,597.89 | ||
Category for bad debt provision by combination: In the combination, bad debt provision for accounts receivable is provided byaccount age
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Percentage of provision | |
| Less than 1 year | 1,061,052,147.81 | 53,052,607.75 | 5.00% |
| 1-2 years | 146,747,758.44 | 14,674,775.84 | 10.00% |
| 2-3 years | 58,503,911.02 | 11,700,782.20 | 20.00% |
| 3-4 years | 18,650,546.32 | 9,325,273.16 | 50.00% |
| 4-5 years | 2,975,707.28 | 2,380,565.82 | 80.00% |
| More than 5 years | 1,934,378.83 | 1,934,378.83 | 100.00% |
| Total | 1,289,864,449.70 | 93,068,383.60 | |
If provision for bad debts of accounts receivable is made according to the general model of expected credit loss:
□Applicable ?Not applicable
(3) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Bad debt reserves for accounts receivable | 1,137,386,630.82 | 75,039,320.20 | 76,760,426.90 | 2,021,432.56 | 1,133,644,091.56 | |
| Total | 1,137,386,630.82 | 75,039,320.20 | 76,760,426.90 | 2,021,432.56 | 1,133,644,091.56 | |
Significant recoveries or reversals of provisions for bad debts during the reporting period:
In RMB
Unit
| Unit | Amount of recovery or reversal | Reason for reversal | Recovery method | Basis and rationality of determining the original provision ratio for bad debts |
| Unit 1 | 35,932,304.06 | Bank transfers, offsets | ||
| Unit 2 | 12,943,912.34 | Bank transfers, house mortgage | ||
| Unit 3 | 8,367,635.05 | Bank transfers, house mortgage | ||
| Unit 4 | 2,911,247.95 | Bank transfers, house mortgage | ||
| Unit 5 | 2,884,489.50 | Bank transfers, house mortgage | ||
| Unit 6 | 2,502,618.17 | Bank transfers, house mortgage | ||
| Unit 7 | 2,131,401.24 | Bank transfers, house mortgage | ||
| Unit 8 | 1,982,739.60 | Bank transfers, house mortgage | ||
| Unit 9 | 1,032,855.13 | Bank transfers, house mortgage | ||
| Unit 10 | 912,030.00 | Bank transfers, house mortgage | ||
| Unit 11 | 881,524.45 | Bank transfers, house mortgage | ||
| Unit 12 | 853,100.00 | Bank transfers, house mortgage | ||
| Unit 13 | 825,000.00 | Bank transfers, house mortgage | ||
| Unit 14 | 675,000.00 | Bank transfers, house mortgage | ||
| Unit 15 | 673,076.70 | Bank transfers, house mortgage | ||
| Unit 16 | 552,430.80 | Bank transfers, house mortgage | ||
| Others | 699,061.91 | Bank transfers, house mortgage | ||
| Total | 76,760,426.90 |
(4) Accounts receivable actually written off in the current period
In RMB
| Item | Amounts written off |
| Accounts receivable actually written off | 2,021,432.56 |
Important accounts receivable write-offs:
In RMB
| Unit | Nature of accounts receivable | Amounts written off | Reason for write-offs | Write-off procedures performed | Whether the amount arises from an associated transaction |
| Unit 1 | Payment for goods | 881,524.45 | Expected to be irrecoverable | Management approval | No |
Unit 2
| Unit 2 | Payment for goods | 266,206.00 | Expected to be irrecoverable | Management approval | No |
| Unit 3 | Payment for goods | 260,915.00 | Expected to be irrecoverable | Management approval | No |
| Unit 4 | Payment for goods | 116,277.00 | Expected to be irrecoverable | Management approval | No |
| Unit 5 | Payment for goods | 85,625.00 | Expected to be irrecoverable | Management approval | No |
| Other Subtotal | Payment for goods | 410,885.11 | Expected to be irrecoverable | Management approval | No |
| Total | 2,021,432.56 |
(4) Top five debtors with the largest ending balances of accounts receivable and contract assets
In RMB
| Unit | Ending balance of accounts receivable | Ending balance of contract assets | Ending balance of accounts receivable and contract assets | Proportion in the total ending balance of accounts receivable and contract assets | Ending balance of provision for bad debts on accounts receivable and impairment of contract assets |
| Unit 1 | 658,945,936.78 | 658,945,936.78 | 21.87% | 658,945,936.78 | |
| Unit 2 | 337,200,324.44 | 337,200,324.44 | 11.19% | 101,160,097.33 | |
| Unit 3 | 275,838,561.72 | 275,838,561.72 | 9.15% | 13,791,928.09 | |
| Unit 4 | 241,053,412.05 | 241,053,412.05 | 8.00% | 105,439,212.29 | |
| Unit 5 | 95,720,766.37 | 95,720,766.37 | 3.18% | 61,418,433.11 | |
| Total | 1,608,759,001.36 | 1,608,759,001.36 | 53.39% | 940,755,607.60 |
2.Other receivables
In RMB
| Item | Ending balance | Beginning balance |
| Other receivables | 78,302,506.11 | 46,761,052.06 |
| Total | 78,302,506.11 | 46,761,052.06 |
(1) Other accounts receivable
1) Classification of other accounts receivable by nature
In RMB
| Nature of receivable | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Collections by a third party | 53,190,022.42 | 26,915,796.30 |
| Guarantee and security deposits | 20,529,567.47 | 26,557,958.62 |
| Related transactions | 4,064,000.00 | 4,064,000.00 |
| Cash reserve | 3,308,572.88 | 1,409,298.88 |
| Withholdings | 6,730,272.87 | 3,488,318.88 |
| Proxy holding of properties exchanged for construction services | 2,094,110.00 | 2,094,110.00 |
| Others | 3,205,258.76 | 83,894.77 |
| Total | 93,121,804.40 | 64,613,377.45 |
2) Disclosure by aging of accounts
In RMB
| Age | Book balance at the end of the period | Initial book balance at the beginning of the period |
| Within 1 year (including 1 year) | 73,826,959.96 | 39,791,252.20 |
| 1-2 years | 3,858,897.97 | 5,238,428.30 |
| 2-3 years | 4,561,836.65 | 4,102,774.20 |
| More than 3 years | 10,874,109.82 | 15,480,922.75 |
| 3-4 years | 2,776,152.17 | 2,411,698.15 |
| 4-5 years | 1,422,867.85 | 1,924,707.80 |
| More than 5 years | 6,675,089.80 | 11,144,516.80 |
| Total | 93,121,804.40 | 64,613,377.45 |
3) Classification of disclosure according to the bad debt provision method
In RMB
| Type | Ending balance | Beginning balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Percentage (%) | Amount | Percentage of provision | Amount | Percentage (%) | Amount | Percentage of provision | |||
| Provision for bad debts by individual item | 2,094,110.00 | 2.25% | 732,938.50 | 35.00% | 1,361,171.50 | 2,094,110.00 | 3.24% | 732,938.50 | 35.00% | 1,361,171.50 |
| Including: | ||||||||||
| Collective bad debt provision | 91,027,694.40 | 97.75% | 14,086,359.79 | 15.47% | 76,941,334.61 | 62,519,267.45 | 96.76% | 17,119,386.89 | 27.38% | 45,399,880.56 |
| Including: | ||||||||||
| Aging combination | 91,027,694.40 | 97.75% | 14,086,359.79 | 15.47% | 76,941,334.61 | 62,519,267.45 | 96.76% | 17,119,386.89 | 27.38% | 45,399,880.56 |
| Total | 93,121,804.40 | 100.00% | 14,819,298.29 | 15.91% | 78,302,506.11 | 64,613,377.45 | 100.00% | 17,852,325.39 | 27.63% | 46,761,052.06 |
Category by individual bad debt provision:
In RMB
| Name | Beginning balance | Ending balance | ||||
| Book balance | Bad debt provision | Book balance | Bad debt provision | Percentage of provision | Reasons for provision | |
| Unit 1 | 800,000.00 | 280,000.00 | 800,000.00 | 280,000.00 | 35.00% | Expected impairment |
Unit 2
| Unit 2 | 636,327.00 | 222,714.45 | 636,327.00 | 222,714.45 | 35.00% | Expected impairment |
| Unit 3 | 657,783.00 | 230,224.05 | 657,783.00 | 230,224.05 | 35.00% | Expected impairment |
| Total | 2,094,110.00 | 732,938.50 | 2,094,110.00 | 732,938.50 |
Collective bad debt provision:
In RMB
| Name | Ending balance | ||
| Book balance | Bad debt provision | Percentage of provision | |
| Within 1 year (including 1 year) | 71,732,849.96 | 3,586,642.49 | 5.00% |
| 1-2 years | 3,858,897.97 | 385,889.80 | 10.00% |
| 2-3 | 4,561,836.65 | 912,367.33 | 20.00% |
| 3-4 years | 2,776,152.17 | 1,388,076.09 | 50.00% |
| 4-5 | 1,422,867.85 | 1,138,294.28 | 80.00% |
| More than 5 years | 6,675,089.80 | 6,675,089.80 | 100.00% |
| Total | 91,027,694.40 | 14,086,359.79 | |
Provision for bad debts according to the general model of expected credit loss:
In RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit loss over the next 12 months | Expected credit loss over the entire duration (without credit impairment) | Expected credit loss over the entire duration (with credit impairment) | ||
| Balance as of January 01, 2024 | 17,119,386.89 | 732,938.50 | 17,852,325.39 | |
| Balance on January 01, 2024 in the current period | ||||
| Provision in the current period | -3,033,027.10 | -3,033,027.10 | ||
| Balance as of June 30, 2024 | 14,086,359.79 | 732,938.50 | 14,819,298.29 |
Changes in the book balance with significant change in amount of the loss provision in the current period
□Applicable ?Not applicable
4) Bad debt provision, and its recovery or reversal in the current period
Provision for bad debts in the current period:
In RMB
| Type | Beginning balance | Amount of change in the current period | Ending balance | |||
| Provision | Recovery or reversal | Write-offs | Others | |||
| Bad debt provision for other receivables | 17,852,325.39 | -3,033,027.10 | 14,819,298.29 | |||
| Total | 17,852,325.39 | -3,033,027.10 | 14,819,298.29 | |||
5） The actual write-off of other receivables in this periodThere are no other actual receivables written off in this period.
6) Top five debtors with the largest ending balances of other accounts receivable
In RMB
| Unit | Nature of receivable | Ending balance | Age | Proportion in the total ending balance of other accounts receivable | Ending balance of bad debt provision |
| Unit 1 | Collections by a third party | 12,986,415.91 | With 1 year | 13.95% | 649,320.80 |
| Unit 2 | Collections by a third party | 6,932,252.09 | With 1 year | 7.44% | 346,612.60 |
| Unit 3 | Loan | 4,064,000.00 | More than 5 years | 4.36% | 4,064,000.00 |
| Unit 4 | Collections by a third party | 3,672,008.02 | With 1 year | 3.94% | 183,600.40 |
| Unit 5 | Withholdings | 3,367,719.31 | With 1 year | 3.62% | 168,385.97 |
| Total | 31,022,395.33 | 33.31% | 5,411,919.77 |
3. Long-term equity investment
In RMB
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investments in subsidiaries | 288,639,391.37 | 20,400,000.00 | 268,239,391.37 | 270,909,357.60 | 20,400,000.00 | 250,509,357.60 |
| Investments in joint ventures and associated companies | 1,700,104.08 | 1,700,104.08 | 4,961,672.03 | 4,961,672.03 | ||
| Total | 290,339,495.45 | 20,400,000.00 | 269,939,495.45 | 275,871,029.63 | 20,400,000.00 | 255,471,029.63 |
(1) Investment in subsidiaries
In RMB
| Investee | Beginning balance (book value) | Beginning balance of impairment provision | Increase/decrease in the current period | Ending balance (book value) | Ending balance of impairment provision | |||
| Additional investment | Negative investment | Impairment provision | Others | |||||
| Shengzhou Kinde Intelligent Kitchen Appliance Co., Ltd. | 162,320,000.00 | 0.00 | 162,320,000.00 | |||||
| Hangzhou MingQi Electric | 52,316,304.68 | 280,973.22 | 52,597,277.90 | |||||
Co., Ltd.
| Co., Ltd. | ||||||||
| De Dietrich Household Appliances Trading (Shanghai) Co., Ltd. | 630,900.00 | 20,400,000.00 | 0.00 | 630,900.00 | 20,400,000.00 | |||
| Shanghai Robam Appliances Sales Co., Ltd. | 5,838,272.10 | 0.00 | 5,838,272.10 | |||||
| Beijing Robam Appliances Sales Co., Ltd. | 5,814,980.82 | 0.00 | 5,814,980.82 | |||||
| Hangzhou Robam Fuchuang Investment Management Co., Ltd. | 10,000,000.00 | 0.00 | 10,000,000.00 | |||||
| Hangzhou Jinhe Electric Appliances Co., Ltd. | 10,000,000.00 | 21,490.97 | 10,021,490.97 | |||||
| Robam Appliances Holding (HK) Co., Ltd. | 3,588,900.00 | 12,414,675.00 | 16,003,575.00 | |||||
| Chengdu Robam Innovation Technology Co., Ltd. | 5,012,894.58 | 5,012,894.58 | ||||||
| Total | 250,509,357.60 | 20,400,000.00 | 17,730,033.77 | 268,239,391.37 | 20,400,000.00 |
(2) Investment in joint ventures and associated companies
In RMB
| Investor | Beginning balance（book value) | Beginning balance of impairment provision | Increase/decrease in the current period | Ending balance（book value) | Ending balance of impairment provision | |||||||
| Additional investment | Negative investment | Investment profit or loss recognized using the equity method | Adjustment of other comprehensive incomes | Other changes in equity | Cash dividends or profits declared and distributed | Impairment provision | Others | |||||
| I. Joint venture | ||||||||||||
DeDietrichTrade(Shanghai) Co.,Ltd.
| De Dietrich Trade (Shanghai) Co., Ltd. | 4,321,729.39 | -3,224,153.62 | 1,097,575.77 | |||||||||
| Sub-tot al | 4,321,729.39 | -3,224,153.62 | 1,097,575.77 | |||||||||
| II. Associated companies | ||||||||||||
| Zhejiang Tingshuo Brand Operation Management Co., Ltd. | 639,942.64 | -37,414.33 | 602,528.31 | |||||||||
| Sub-tot al | 639,942.64 | -37,414.33 | 602,528.31 | |||||||||
| Total | 4,961,672.03 | -3,261,567.95 | 1,700,104.08 | |||||||||
Recoverable amount is determined as fair value less costs of disposal
□Applicable ?Not applicable
The recoverable amount is determined as the present value of the expected future cash flows
□Applicable ?Not applicable
4. Operating income and operating cost
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period | ||
| Income | Cost | Income | Cost | |
| Main business | 4,244,513,191.19 | 2,257,722,536.75 | 4,362,487,508.28 | 2,211,299,281.37 |
| Other businesses | 125,388,591.10 | 30,056,323.88 | 127,661,267.93 | 61,625,299.63 |
| Total | 4,369,901,782.29 | 2,287,778,860.63 | 4,490,148,776.21 | 2,272,924,581.00 |
5.Investment income
In RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Income from long-term equity investments accounted for using the equity method | -3,261,567.95 | -1,019,723.65 |
| Investment income during holding of financial assets for trading | 21,492,000.00 | 22,815,337.74 |
| Total | 18,230,432.05 | 21,795,614.09 |
XX. Supplementary Information
1. Breakdown of non-recurring profits and losses in the current period
?Applicable □Not applicable
In RMB
| Item | Amount | Description |
| Gains and losses on disposal of non-current assets | -762,764.73 | |
| Government subsidies included in current gains and losses (excluding government subsidies closely related to the Company's normal business, enjoyed in line with national policy and established standards, and having a sustained impact on the Company's gains and losses). | 47,398,220.55 | |
| Reversal of impairment provision for accounts receivable tested for impairment separately | 76,760,426.90 | |
| Other non-operating revenues and expenses except the above items | -2,205,082.29 | |
| Less: Affected amount of income tax | 18,416,180.25 | |
| Affected amount of minority shareholders’ equity (after tax) | 1,173,943.32 | |
| Total | 101,600,676.86 | -- |
Other items of gains and losses meeting the definition of non-recurring gains and losses:
□Applicable ?Not applicable
The Company does not have other items of gains and losses meeting the definition of non-recurring gains and lossesExplanation on the circumstance where items of the non-recurring gains and losses listed in the Explanatory Announcement No. 1on Information Disclosure for Companies Offering Their Securities to the Public — Non-recurring Gains and Losses (referred toas “Announcement No.1”) are defined as recurring profits and losses?Applicable □Not applicable
| Item | Amount (in RMB) | Reasons |
| VAT exemption, reduction or refund | 37,394,570.29 | National tax policy, regular business |
| Refund of individual income tax handling fee | 421,243.63 | National tax policy, regular business |
| Total | 37,815,813.92 |
2. Return on equity and earnings per share (EPS)
| Profit within the Reporting Period | Weighted average return on net assets | EPS | |
| Basic EPS (RMB/share) | Diluted EPS (RMB/share) | ||
| Net profit attributable to common stockholders of the Company | 7.01% | 0.80 | 0.80 |
| Net profit attributable to common shareholders of the | 6.08% | 0.69 | 0.69 |
Company after deductingnon-recurring profits andlosses
Company after deductingnon-recurring profits andlosses
3. Accounting data differences under domestic and foreign accounting standards
(1) Differences of net profits and net assets in the Financial Report disclosed as per the IAS and CAS
□Applicable ?Not applicable
(2) Differences of net profits and net assets in the Financial Report disclosed as per the foreignaccounting standard and CAS
□Applicable ?Not applicable
（3） Explanation of the reasons of accounting data differences under domestic and foreign accountingstandards shall be made, and where data audited by an overseas audit institution has been adjustedbased on the differences, the name of the overseas institution shall be indicated.
□Applicable ?Not applicable
4. Others
N/A