Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxshare Precision Industry Co., Ltd.
Annual Report 2021
2022-033
April 2022
This document is a translated version of the Chinese version Annual Report 2021 of Luxshare Precision Industry Co.,Ltd.(“《立讯精密 2021
年年度报告》”),and the published Annual Report 2021 of Luxshare Precision Industry Co.,Ltd.in the Chinese version shall prevail. The
complete published Chinese Annual Report 2021 of Luxshare Precision Industry Co.,Ltd. may be obtained at www.cninfo.com.cn.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section I Important Note, Table of Contents and Definitions
The Board of Directors, the Board of Supervisors, directors, supervisors and executives
of the Company hereby warrant that the information contained in this Annual Report is true,
accurate and complete and this Annual Report is free from any misrepresentation, misleading
statement or material omission, and agree to assume joint and several liability for this Annual
Report.
WANG Laichun, Principal of the Company, CFO WU Tiansong and Chief Accountant
CHEN Huiyong hereby represent that the financial statements contained in this Annual
Report are true, accurate and complete.
All directors of the Company attended the meeting of the Board of Directors reviewing
this Report.
The relevant risks facing the Company are set out in “Section III Management’s
Discussion and Analysis - XI. Prospects for future development of the Company”.
According to the profit distribution proposal approved by the Board of Directors, the
Company will distribute a cash dividend of RMB1.10 (inclusive of tax) per 10 shares to all
shareholders on the basis of 7,084,301,477 shares, and will not distribute any bonus shares or
transfer any capital reserve to the share capital for the reporting period.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Table of Contents
Section I Important Note, Table of Contents and Definitions ................................. 2
Section II Company Profile and Financial Highlights ............................................. 7
Section III Management’s Discussion and Analysis ............................................... 11
Section IV Corporate Governance ........................................................................... 51
Section V Environment and Social Responsibilities............................................... 75
Section VI Significant Events ................................................................................... 85
Section VII Changes in shares and shareholders ................................................. 105
Section VIII Preference Shares .............................................................................. 115
Section IX Bonds ..................................................................................................... 116
Section X Financial Report ..................................................................................... 129
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
List of References
1. Financial statements signed and chopped by the principal, CFO and Chief Accountant of the Company;
2. Original of the auditor’s report stamped with the seal of the accounting firm and signed and chopped by the certified public
accountants;
3. Originals of all documents of the Company publicly disclosed on the website for information disclosure designated by the
China Securities Regulatory Commission during the reporting period and related announcements; and
4. Other references.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Definitions
Terms Definition
We/us, the Company or
means Luxshare Precision Industry Co., Ltd.
Luxshare-ICT
Luxshare Limited means Luxshare Limited, founder and controlling shareholder of Luxshare-ICT.
ICT-Lanto means ICT-Lanto Limited.
Luxshare Precision means Luxshare Precision Limited.
Luxshare Jiangsu means Luxshare Precision Industry (Jiangsu) Co., Ltd.
Luxshare Shanxi means Shanxi Luxshare Precision Industry Co., Ltd.
Luxshare Dongguan means Dongguan Luxshare Precision Industry Co., Ltd.
Luxshare Suzhou means Luxshare Precision Industry (Suzhou) Co., Ltd.
Luxshare Chuzhou means Luxshare Precision Industry (Chuzhou) Co., Ltd.
Luxshare Kunshan means Kunshan Luxshare Precision Industry Co., Ltd.
Luxshare Baoding means Luxshare Precision Industry (Baoding) Co., Ltd.
Luxshare Xuancheng means Xuancheng Luxshare Precision Industry Co., Ltd.
Luxshare Yancheng means Yancheng Luxshare Precision Industry Co., Ltd.
Luxshare Enshi means Luxshare Precision Industry (Enshi) Co., Ltd.
Luxshare Vietnam means Luxshare-ICT (Vietnam) Limited.
Luxshare Van Trung means Luxshare-ICT (Van Trung) Company Limited.
Luxshare Nghe An means Luxshare-ICT (Nghe An) Limited.
Luxshare Electroacoustic means Shenzhen Luxshare Electroacoustic Technology Co., Ltd.
Luxshare Smart Manufacturing means Luxshare Smart Manufacturing (Zhejiang) Co., Ltd.
Luxshare-Merry means Guangdong Luxshare-Merry Electronics Co., Ltd.
ASAP Jiangxi means ASAP Technology (Jiangxi) Co., Ltd.
Xiexun Jiangxi means Xiexun Electronic (Ji’an) Co., Ltd.
Smart Manufacturing Jiangxi means Jiangxi Luxshare Smart Manufacturing Co., Ltd.
Lanto Bozhou means Bozhou Lanto Electronic Limited.
Xuntao Bozhou means Bozhou Xuntao Electronic Limited.
Meite Suzhou means Meite Technology (Suzhou) Co., Ltd.
Huzhou Jiuding means Huzhou Jiuding Electronic Co., Ltd.
Lanto Kunshan means Lanto Electronic Limited.
Kunshan RF means Kunshan Luxshare Radio Frequency Technology Co., Ltd.
Liding Dongguan means Liding Electronic Technology (Dongguan) Co., Ltd.
Rikai Yancheng means Rikai Precision Technology (Yancheng) Co., Ltd.
Xiexun Wan’an means Wan’an Xiexun Electronic Co., Ltd.
Smart Manufacturing Changshu means Changshu Luxshare Smart Manufacturing Co., Ltd.
Fujian JK means Fujian JK Wiring Systems Co., Ltd.
Xingning Electronics means Xingning Luxshare Electronics Co., Ltd.
Luxsan Kunshan means Luxsan Technology (Kunshan) Co., Ltd.
BCS Suzhou means BCS Automotive Interface Solutions (Suzhou) Co., Ltd.
SpeedTech means SpeedTech Corp.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Luxshare Automation Jiangsu means Luxshare Automation (Jiangsu) Co., Ltd.
Dongguan Luxshare Technology means Dongguan Luxshare Technology Co., Ltd.
Luxshare Electronic Kunshan means Luxshare Electronic Technology (Kunshan) Co., Ltd.
Luxshare Electronic Enshi means Luxshare Electronic Technology (Enshi) Co., Ltd.
AOA means Articles of Association of Luxshare Precision Industry Co., Ltd.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section II Company Profile and Financial Highlights
I. Company profile
Stock short name Luxshare-ICT Stock code 002475
Stock exchange Shenzhen Stock Exchange
Chinese name 立讯精密工业股份有限公司
Chinese short name 立讯精密
English name (if any) Luxshare Precision Industry Co., Ltd.
English short name (if any) Luxshare-ICT
Legal representative WANG Laichun
2/F, Block A, Sanyang New Industrial Zone, West Haoyi, Shajing Street, Baoan District,
Registered address
Shenzhen
Postal code of registered address 518104
History of changes in registered
N/A
address
Office address No. 313 Beihuan Road, Qingxi Town, Dongguan, Guangdong
Postal code of office address 523642
Company website www.luxshare-ict.com
Email Public@luxshare-ict.com
II. Contact person and contact information
Board Secretary Securities Affairs Representative
Name HUANG Dawei LI Ruihao
No. 313 Beihuan Road, Qingxi Town, No. 313 Beihuan Road, Qingxi Town,
Address
Dongguan, Guangdong Dongguan, Guangdong
Telephone 0769-87892475 0769-87892475
Fax 0769-87732475 0769-87732475
E-mail David.Huang@luxshare-ict.com Ray.Li@luxshare-ict.com
III. Media for information disclosure and place for keeping annual report
Website of the stock exchange disclosing the Company’s
Securities Times
annual report
Media and website disclosing the Company’s annual report www.cninfo.com.cn
Place for keeping annual report Securities Affairs Office of the Company
IV. Changes in registration particulars
Change in organization code Unified social credit code: 91440300760482233Q
Changes in main business since the listing No
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
of the Company (if any)
Changes in controlling shareholder (if any) No
V. Other related information
Accounting firm engaged by the Company:
Name of accounting firm BDO China Shu Lun Pan Certified Public Accountants LLP
Office address of accounting firm Rooms 1, 2 & 3, 4/F, No. 61 East Nanjing Road, Huangpu District, Shanghai
Name of accountants signing this report LI Jing and WEI Gang
Sponsor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting period:
√ Applicable □ N/A
Names of sponsor
Name of sponsor Office address of sponsor Period of ongoing supervision
representatives
19/F, North Tower, Excellence Times
HE Feng and LIU From December 2, 2020 to
CITIC Securities Co., Ltd. Plaza (Phase II), No. 8 3rd Central
Guanzhong December 31, 2021
Road, Futian District, Shenzhen
Financial advisor engaged by the Company that performs the duties of ongoing supervision over the Company during the reporting
period
□ Applicable √ N/A
VI. Key accounting data and financial indicators
Did the Company need to retrospectively adjust or re-state any accounting data of prior accounting years?
□ Yes √ No
2021 2020 Y/Y % Change 2019
Operating revenue (RMB) 153,946,097,790.40 92,501,259,211.54 66.43% 62,516,314,588.42
Net profit attributable to
shareholders of the listed company 7,070,520,386.57 7,225,462,752.58 -2.14% 4,713,820,644.90
(RMB)
Net profit attributable to
shareholders of the listed company
6,015,597,220.13 6,088,901,850.86 -1.20% 4,435,974,109.41
after deduction of extraordinary
gain or loss (RMB)
Net cash flows from operating
7,284,766,917.00 6,873,211,486.05 5.99% 7,465,988,174.33
activities (RMB)
Basic earnings per share
1.01 1.03 -1.94% 0.68
(RMB/share)
Diluted earnings per share
0.99 1.01 -1.98% 0.67
(RMB/share)
Weighted average return on net Decrease by 7.94 per
22.35% 30.29% 26.55%
assets centage points
December 31, 2021 December 31, 2020 Y/Y % Change December 31, 2019
Total assets (RMB) 120,572,098,167.88 70,012,753,551.75 72.21% 49,377,910,671.23
Net assets attributable to
shareholders of the listed company 35,288,554,748.72 28,101,816,234.56 25.57% 20,296,618,968.52
(RMB)
Whether the lower of the net profit before and after deduction of extraordinary gain or loss in the past three accounting years has
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
been negative and the most recent annual auditor’s report indicates that the Company’s ability to continue as a going concern is
uncertain?
□ Yes √ No
Whether the lower of the net profit before and after deduction of extraordinary gain or loss is negative?
□ Yes √ No
VII. Differences in accounting data arising from adoption of Chinese and foreign accounting
standards concurrently
1. Differences in net profit and net assets disclosed in the financial statements prepared according to the
international accounting standards and the Chinese accounting standards
□ Applicable √ N/A
There was no difference in net profit and net assets disclosed in the financial statements for the reporting period prepared according
to the international accounting standards and the Chinese accounting standards.
2. Differences in net profit and net assets disclosed in the financial statements prepared according to the
foreign accounting standards and the Chinese accounting standards
□ Applicable √ N/A
There was no difference in net profit and net assets disclosed in the financial statements for the reporting period prepared according
to the foreign accounting standards and the Chinese accounting standards.
VIII. Main quarterly financial indicators
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 21,019,011,536.13 27,127,972,915.37 32,865,598,826.82 72,933,514,512.08
Net profit attributable to
1,349,512,048.43 1,739,717,980.42 1,600,431,354.99 2,380,859,002.73
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
1,167,112,633.01 1,355,153,041.64 1,471,991,374.50 2,021,340,170.98
after deduction of extraordinary
gain or loss
Net cash flows from operating
663,348,870.24 1,524,553,521.56 5,419,705,921.15 -322,841,395.95
activities
Whether there’s any significant difference between the financial indicators set forth above or aggregate amounts thereof and the
corresponding financial indicators contained in any quarterly or semi-annual report already disclosed?
□ Yes √ No
IX. Items and amounts of extraordinary gains or losses
√ Applicable □ N/A
In RMB
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Item 2021 2020 2019 Remark
Gain or loss on disposal of non-current assets
(including allowance for impairment of assets that has -57,241,855.39 -35,503,173.93 -110,085,527.48
been written off)
Government grants recognized in profit or loss
(excluding government grants that are closely related
to the business of the Company and are provided in 853,542,165.37 450,749,695.89 232,311,428.35
fixed amount or quantity continuously according to
the applicable polices of the country)
Difference between
the original
carrying amount of
long-term
Interest in the fair value of the acquirees’ identifiable
investment and fair
net assets at the date of acquisition in excess of the
16,559,223.33 value of newly
investment cost of the relevant subsidiaries,
consolidated
associates and joint ventures
subsidiaries upon
change from the
equity method to
the cost method
Gain or loss on assets under entrusted investment or
95,298,693.93 113,778,335.78 89,722,710.32
management
Gain or loss on changes in fair value of financial
assets held for trading and financial liabilities held for
trading, and gain on disposal of financial assets held
602,993,325.33 837,100,369.42 131,736,631.37
for trading, financial liabilities held for trading and
available-for-sale financial assets, except for effective
hedges held in the ordinary course of business
Other non-operating income and expenses -12,600,634.71 30,554,498.37 -999,739.32
Mainly gain on
Other gain or loss within the meaning of derecognition of
-170,939,666.46 0.00 0.00
extraordinary gain or loss financial assets at
amortized cost
Less: Effect of income tax 211,043,425.20 214,489,873.68 55,533,801.99
Effect of minority interest (after tax) 61,644,659.76 45,628,950.13 9,305,165.76
Total 1,054,923,166.44 1,136,560,901.72 277,846,535.49 --
Other items of gain or loss within the meaning of extraordinary gains or losses:
□ Applicable √ N/A
We do not have any other item of gain or loss within the meaning of extraordinary gains or losses.
If the Company classifies any item of extraordinary gain or loss defined by or listed in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Publicly Offering Securities - Extraordinary Gain or Loss as recurrent profit or loss, please
explain the reason.
□ Applicable √ N/A
We have not classified any item of extraordinary gain or loss defined by or listed in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Publicly Offering Securities - Extraordinary Gain or Loss as recurrent profit or loss in the
reporting period.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section III Management’s Discussion and Analysis
I. Situations of our industry in the reporting period
During the reporting period, we are engaged in the research and development (R&D), manufacturing and sale of products in the
fields of consumer electronics, communication, automotive electronics and healthcare, among others. Our products and businesses
are diversified and vertically integrated, and cover components, modules and system assembly.
(I) Consumer electronics
In the industry of consumer electronics, the development and innovation of applied technologies and diversified growth of
consumer demands jointly promote the upgrading of consumer electronic products and related product lines, and continued growth of
the consumer electronics market size. According to Statista, the global consumer electronics market size grew at a compound annual
growth rate (CAGR) of 2.90% from 2015 to 2020, and is expected to reach USD1,098 billion in 2025. The advancement of 5G and
artificial intelligence (AI) technologies will promote the development of different kinds of smart mobile, smart wearable,
AR/VR/MR, smart home, smart display and other IoT devices. The acceleration of upgrading of terminal products will drive the
increase in the integration level of electronic components contained therein and improvement of technological level. The one-stop
solution providers that are able to provide the brand customers with better production processes and higher integration level and
require the input of less resources will get more orders for related components and finished products. Accordingly, the Company's
business expansion and industrial operations are expected to fully benefit.
(II) Communication and data center
In the field of communication and data center, the series of technical innovation and emerging of new technologies promote the
evolution from traditional IT infrastructure to data infrastructure, and along with the continuous development of the Internet,
e-commerce, video, cloud computing and other Internet vertical industries have been rapidly springing up, and the global data center
market has come into multiple periods of rapid growth. According to IDC, the shipments and sales of the global server market
reached 13,539,000 units and USD99.22 billion in 2021, representing an increase of 6.9% and 6.4% respectively. The global Internet
data center market size grew at a CAGR of more than 10% from 2012 to 2021.
Global server shipments from 2016 to 2021 Global server sales from 2016 to 2021
Global server shipments (10,000 units) Global server sales (USD100 million)
The ever increasing demands for new data centers by IT, telecommunication, banking, financial, service and investment (BFSI),
e-government and smart city projects, and wide application of AI and IoT technologies in the future will further promote growth of
the communication and data center market size. According to IDC, the global server market size is expected to reach USD126.5
billion in 2027.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
(III) Automotive electronics
Smart electric vehicles represent an opportunity of the century for the automotive industry of China. China has the largest
automotive market with the highest level of openness and inclusion and most consumers in the world, utilizes the most advanced
smart vehicle technologies and attracts all major carmakers in the world. China ranks among the first in the world in terms of number
of smart vehicle brands and models. At present, China’s smart vehicle market is transiting from the policy-driven period to the period
of market-driven high growth in an all-round way. In 2021, the sales volume of electric vehicles reached 3.52 million units in China,
representing an increase of 160% as compared with 2020. China has ranked first in the world in terms of sales volume of electric
vehicles for seven consecutive years, and the sales volume of electric vehicles in China is expected to further increase by 47% to
about 5 million units in 2022. The penetration of electric vehicles increased from 7.2% at the beginning of 2021 to 19% at the end of
2021, representing an exponential growth as compared with 10 years ago, and showing great potentialities of growth.
In 2021, the penetration of electric vehicles began to increase rapidly in China and the transition to clean
transportation is accelerating.
Penetration of electric vehicles
sales volume (k)
Source: China Association of Automobile Manufacturers
In addition to “electrification”, “intelligentization” and “interconnection” are also developing vigorously. Statistics show that
about 20% new passenger cars are equipped with driver assistance system, the penetration of L2 driver assistance system into the
electric vehicle market reaches 38%, electric vehicles has basically realized full coverage of Internet of Vehicles (IoV) functions, and
some major carmakers have begun to sell new vehicles powered by V2X technology. Chinese consumers are more willing to accept
smart electric vehicles, and medium- and high-end smart electric vehicles occupy increasingly greater shares on the business and
consumer markets. Traditional smart mobile phone players begin to enter the smart electric vehicle sector; on the other hand, electric
vehicle manufacturers begin to produce smart mobile phones. Along with the popularization of “intelligentization”, vehicles will
become large-sized mobile smart and computing terminals. In the next stage, carmakers need to build ecosystems to break through
the tight encirclement, connect vehicles with consumer electronics, create more consumption scenarios, and realize full coverage of
“human-vehicle-home” scenarios.
(IV) Our position in the industry
During the reporting period, we ranked first on the 34th list of top 100 electronic component manufacturers of China (2021)
published by the China Electronic Components Association, and were awarded the honorable titles of “Top 500 Private Enterprises
Of China”, “Top 500 Private Manufacturers Of China”, and “2021 Model of China’s Digital Economic Industry”, among others.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
II. Our main business in the reporting period
We concentrate our efforts on the specialization in and optimization of underlying technologies, made in-depth deployments in
acoustic, visual, power (wired/wireless), wireless communication and other fields to meet future demands. Our products have been
widely applied in the fields of consumer electronics, communication and automotive. By comprehensively mastering the
technologies relating to various components and modules, and super-precision manufacturing technologies accumulated over the
years, we give full play to our advantages in vertical integration, and continuously restructure the supply chain in the field of system
assembly, to create more value for our customers, thereby gaining customers’ support and confidence.
In launching a new product, we focus on the product quality, yield rate and optimization of production costs on the basis of
innovative production technology, intelligent automation and digital platform, thereby enabling us to make continuous and
substantial breakthroughs in new markets, new customers and new products. In the implementation of related controls, there is no
doubt that the automation technologies lay the strong foundation for our core competencies. Therefore, we attach great importance
to the continuous exploration of automatic and smart manufacturing technologies. Our core team’s spirit of in-depth exploration of
processes and determination to accomplish all tasks assigned guarantee the success in the development and design of automation
technologies. According to the requirements for appearance, size, functions and reliability of products, we disassemble and study all
manufacturing processes, and make efforts to solve process challenges with reference to our past experience and advanced
technologies available on the market. With the goal of zero loss and zero defect, we strive to realize the reasonableness,
standardization and automation of designs in terms of yield rate, efficiency, cost, etc.
After the completion of process study, we realize process design through automation, including automation of work stations,
handling and positioning, testing, warehousing, logistics and production processes. Standardization is the prerequisite for automation,
because standardized products cannot be made without the use of standardized equipment and processes. With respect to the products
that have a low demand and change frequently, we mainly use man-machine flexible automation technologies. In the design of
automatic equipment, we make plans for MES system, IoT access and key work station information flows needing to be controlled
simultaneously, and build a model of digital factory on that basis. Thereafter, we convert all problems and phenomenon into data, and
then process and judge the data systematically, and present the same in the form of visual reports, to realize whole-process
traceability of products, materials, people, equipment, fixtures, process technology and quality information, among others, implement
close-end control, and ensure the effective realization of automation. On that basis, we introduce digital models, use modeling
approaches to connect production with data flows, and through the use of big data, cloud computing, AI, digital twin and other
technologies, deeply explore the information and trends behind data, seek benefits from data, and finally realize intelligentization,
and self-judgment, self decision-making, self-adjustment and self-execution by machines, so that the machines are able to solve
tangible problems and predict intangible problems on their own, thereby achieving the long-term goal of smart manufacturing.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
1.精益化 3.数字化
工艺的深度拆解和前瞻研究 IOT、制造数字化集成
设计的合理化、标准化和简单化 可视化控制中心和管理
产线的精益布局规划 运营流程自动化贯通
1. Leanness 3. Digitalization
In-depth disassembly of and forward-looking research on Digital integration of IoT and manufacturing
processes Visual control center and management
Reasonableness, standardization and simplification of Automation of the whole operation process
design
Lean layout of production lines
2.自动化 4.智能化
搬运-加工-检测-物流-仓储的全流程自动化 机器自感知、自学习、自决策、自执行
柔性自动化系统分析 解决有形的问题和预测无形的问题
数据驱动管理决策
2. Automation 4. Intelligentization
Whole-process automation of handling, processing, testing, Self-sensing, self-learning, self decision-making and
logistics and warehousing self-execution of machines
Analysis of flexible automation system Solve tangible problems and predict intangible problems
Data-driven management decision-making
物理域 精益生产布局 精益工艺研究 工艺数字化 流程数字化
Physical field Lean production layout Lean process study Technological Process digitalization
digitalization
精益化 数字化 智能制造 信息域 制成自动化
Leanness Digitalization Smart manufacturing Information field Manufacturing automation
自动化 智能化 预测性分析 物流自动化 高级决策支持
Automation Intelligentization Predictive analysis Logistics Advanced decision-making
automation support
(I) Consumer electronics business
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
From the perspective of applications, consumer electronics, communication and automotive are our main product and business
segments. In the field of consumer electronics, we continue our product mix in prior years, follow the trends of metaverse, AIoT
smart life and high-speed transmission, and enrich our product offerings in a steady and orderly manner. Our product offerings
include acoustic products (such as TWS earphone), smart home products (such as 5G CPE and Wi-Fi 6 portable router), smart
terminal products (such as wearable watch and wristband, AR/VR/MR), computer accessories (such as Dock), intelligent stylus,
video conference equipment and wired and wireless high-watt rapid charging accessories for various PC/NB/mobile phone brands for
retail sale.
We have been engaged in the field of consumer electronics for years, while satisfying the customers’ demands, made continuous
breakthroughs to build the strong capability to provide customers with comprehensive solutions. We have the advantages in
intelligentization, digitalization and globalization on the vast consumer electronics market. We make dynamitic adjustments
continuously, and clearly understand the existing market and the incremental market. With respect to the existing market, such as the
business relating to PC and smart mobile phones, we have mature technical capabilities, capital equipment and customer resources.
As the most trusted partner of our customers, we are not only able to, in conjunction with our premium customers, achieve self-worth
in the field of premium products and the existing products we are good at, but also in the upgrading of products and technologies,
leverage our mature resources, grasp the opportunities to enter the market of higher-level products at optimal cost, and maximize the
rewards. With respect to the incremental market, such as health & wellness, metaverse and other applications, we believe that the
premium customers on the existing market will continue to take the lead. By leveraging our good reputation and solid partnership
with our customers built by us over the years, our management will continue to keep abreast of the market, analyze and accurately
grasp the situations of technology development of the industry from the perspectives of consumers, brand customers and supply
chain, continuously improve product attractions required by the incremental market, and make all-round deployments from
components, modules to system.
Though we face many external challenges, such as disengagement between China and the United States and geopolitics, we
have high hopes for and are confident about the future development of our consumer electronics business. In the past ten years,
through continuous upper-level industry guidance, development of designated customers, improvement of the quality and
development of high-quality supply chain, and with the long-term and strong support and investments in different areas, China has
gradually built the most complete and systemic consumer electronics supply chain in the world, and takes the lead in in-depth
deployment, talent pool, policy support and other issues in respect of supply chain on all market segments. In view of our strong head
start advantage and the competitive situation on the consumer electronics market, we keep improving and enhancing all kinds of
capabilities, and on the basis of our global deployment completed over the years and our stable strategic focus, develop incremental
businesses at home and abroad according to the development requirements of customers. The present and foreseeable situations show
that the strong will be always strong. Our strategic goals conform to those of our customers.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
智能音箱 快充适配器 VR眼镜 5G路由器 智能穿戴 机壳天线
Smart speaker Rapid charging VR eyeglasses 5G router Smart wearable Casing antenan
adapter
电子烟 无线充模组 声学模组 震动马达 5G模组 天线
Electronic cigarette Wireless charging Acoustic module Vibration motor 5G module Antenna
module
射频 线材线缆 机构件 连接器 核心工艺
智能制造
Radio frequency Wire and cable Mechanical Connector Core technology
components Smart manufacturing
(II) Communication business
Driven by 5G, big data and edge computing technologies, the ICT industry puts forward higher requirements for data
transmission, hardware equipment shows a tendency towards gradual opening of interfaces and high integration of functions, and
interconnect components show a tendency towards high speed, high density, high reliability and low loss. On the basis of the
application scenarios of our products in the field of data and communication, and centering on the application and development
trend of data center, we have gradually enriched our product offerings, and on the basis of electric connection (high-speed electric
connectors and cables), optical connection (AOC and optical modules), radio frequency (RF) communication (base station antennas,
base station filters, tower mounted amplifiers, duplexer, combiners, RRUs, AAUs and small base stations), and other existing
products, have developed thermal management (heat pipes, VC, axial fans, cold plates and water cooling radiators), industrial
connection and other products, further increasing our product coverage. In 2022, we will develop server and other complete unit
assembly business, center on the “complete unit + core components” double development strategy, and strive to grow into a
comprehensive solution provider offering all kinds of products in the field of data and communication.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
电连接产品线 服务器 交换机 整机组装产品线
Electric connection products Server Switch Complete unit assemblies
光连接产品线 综合布线 基础设施 热管理产品线
Optical connection products Cabling system Infrastructure Thermal management
products
汇聚交换机 接入交换机 数据中心机架群 机架内服务器群
Aggregation switch Access switch Data center rack cluster Server cluster inside rack
We have focused on the development of core technological capabilities and basic R&D capabilities through research of
simulation technology, new materials and new processes and application of testing technologies, and provide strong technical support
for communication interconnect products in different forms. With respect to system-level products, through disassembly of modules
and components contained in the products, and single-point manufacturing processes and technologies, we are able to realize highly
or wholly automated, efficient and high-quality production and manufacturing of large and small batches of products.
基础设施 服务器 综合布线 浸没机柜
Infrastructure Server Cabling system Immersion cabinet
精密模组 高速连接器 高速线缆 线缆模组
Precision module High-speed connector High-speed cable Cable module
滤波器 热管理 核心零部件 高速裸线开发
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Filter Thermal management Core components Development of high-speed
bare wire
精密冲压和注塑 射频 散热部件
Precision stamping and injection Radio frequency Radiator
molding
基础制造能力 压铸 机加 钣金
Basic manufacturing capability Die casting Tooling Sheet metal
冲压 注塑 表面处理 基础服务平台
Stamping Injection molding Surface treatment Basic service platform
本地工程服务中心 全球化采购 自动化设备开发 零件中心
Local engineering service center Global purchasing Development of automatic Component center
equipment
Due to the effect of disengagement between China and the United States and geopolitics, exports of the domestic
communication and data center industries face certain shocks and challenges. With respect to the further exploitation of opportunities
of external circulation, we always regard the technical capabilities as the foundation for business development, and driven by the
technologies and with the support of our strong precision manufacturing capability, actively exploit the overseas market. In addition,
we will firmly grasp the opportunities provided by the “Eastern Data, Western Computing” program and replacement with
home-made goods, focus on internal circulation, and actively seek new opportunities in the domestic communication industry. We
believe that we will get more and better business opportunities than traditional communication product manufacturers, as we will
apply our rich experience accumulated in the consumer electronics precision manufacturing industry to the new communication
industry.
(III) Automotive business
In view of the development of electric vehicles, we have made long-term plans for automotive business, and included wire
harness, connection system, new energy, smart interconnect, smart cabin and smart manufacturing in our product offerings.
Leverage the superior resources of the Group, enrich product offerings, and create driving force
for the growth of automotive tier-1 business
线束 整车线束 特种线束 充电枪
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Wire harness Vehicle wire harness Special wire harness Charging gun
连接器 低压连接器 高压连接器 高速连接器
Connector Low-voltage connector High-voltage connector High-speed connector
新能源 逆变器 智能网联 路测单元
New energy Inverter Smart interconnect Road-side unit
车载通讯单元 智能天线 智能驾舱 多媒体仪表
Telematics control unit Smart antenna Smart cabin Multi-media instrument panel
信息娱乐系统 域控制器 无线充电 电源网络隔离器
Infotainment system Domain controller Wireless charging Power and network isolator
智能制造 嵌件注塑
Smart manufacturing Insert molding
Wire harness is an essential system-level component for a vehicle, is flexible, important and widely used, covers all
configurations of a vehicle, and provides reliable power supply, signals and data to all electric appliances, so they serve as “arteries”
of the “neural network” of a vehicle. According to Markets and Markets, the global automotive wire harness market size was
expected to reach USD47 billion in 2021. Through vertical integration, we have grown into a comprehensive supplier specialized in
the design, validation and manufacturing of low-voltage and high-voltage vehicle wire harnesses, special wire harnesses, charging
guns and other products. We stick to the customer oriented service concept, and satisfy the customers’ demands with our efficient
customized design and development, production facilities located in the neighborhood of our customers, and our strong precision
manufacturing capabilities accumulated over the years. In additional to traditional carmakers, we have developed some major
emerging customers.
Automotive is one of the largest markets for connectors. Automotive connectors account for 22% in the global connector
industry, where smart electric vehicles are the largest growth driver. According to Bishop & Associates, the global automotive
connector market size was USD15.210 billion in 2019, and is expected to reach USD19.452 billion in 2025. We have designed and
developed all kinds of connectors required on vehicles, including low-voltage connectors, high-voltage connectors, high-speed
connectors and customized connection systems, among others. We exploit the existing customer market through our wire harness
business, and enhance the synergistic effect with our existing consumer electronic and business-type products, to promote growth of
business. Our proprietary gigabit Ethernet connector adopts a wholly shielded double cable connection structure, and can be widely
used on infotainment systems, ADASs, domain controllers and other products.
In order to satisfy the demands of the smart electric vehicle market, we launched key components of the power system of
electric vehicles, including battery disconnect unit (BDU), power distribution unit (PDU) and inverters. In 2021, the global
automotive PDU market size was USD7 billion, and the inverter market size was USD3 billion. PDU is designed to distribute and
manage electric power in the high-voltage system of new energy vehicles, and can integrate MBS master control, charging module,
DC module, PTC control module and other functions. BDU is specially designed for installation inside battery packs and is a kind of
distribution box. Inverter is a device that converts direct current in batteries into three-phase alternating current required by electric
motors, and a core component of new energy vehicles. The power output and battery life of electric motors directly depend on the
performance of inverters.
The IoV relies on the new-generation information communication technology, receives information from and transmits
information to moving vehicles, and can play an important role in vehicle safety, traffic control, information service, smart city and
intelligent transportation. At present, IoV applications are key projects of government and OEMs, and require coordination among
multiple devices, such as road-side unit (RSU) which collects environment, traffic condition, traffic sign and other information and
sends the same to vehicles, telematics control unit (TCU) which effects two-way communication between vehicles and external
networks, central gateway (CGW) which connects all electronic devices on a vehicle, and other products. We focus on the
development of wireless communication and automotive electronic products, and currently offer RSUs, TCUs and CGWs.
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According to Visteon, the global smart cabin market size was about USD44.7 billion in 2020, and is expected to reach USD73.8
billion in 2025. The penetration of smart cabin into new vehicles in China is expected to exceed 75% in 2025. At present, the basic
configuration of a smart cabin on the market includes digital instrument panel, streaming rearview mirror, HUD, rear seat screen and
IoV modules, among others, which can provide passengers with navigation, environmental monitoring, entertainment and other
directly perceivable information, satisfy diversified human-machine interaction requirements, provide better ride experience and
create more consumption scenarios. Our products include AR-HUD, infotainment system, cabin entertainment domain, LCD
instrument panel, driver monitoring system, power isolation module, etc., and USB port and wireless charging module are relatively
mature products. In the future, more consumer electronic functions will be applied in cabins, so we can fully leverage our
technologies accumulated over the years in the field of consumer electronics.
We also provide customers with smart manufacturing services, including insert molding, PCBA and other product services, by
leveraging our economy of scale and lean production.
In February 2022, we entered into a Strategic Cooperation Framework Agreement with Chery Holding Group, pursuant to
which, we and Chery New Energy Automobile Co., Ltd. will establish a joint venture specialized in R&D and manufacturing of
new energy vehicles in the form of ODM. This business platform will produce vehicles for brand customers, provide a frontier
R&D and mass production platform and access to the overseas market for our core automotive component business, and help us
develop our tier-1 business. We have been engaged in the field of consumer electronics for years, and accumulated a solid industrial
base and strong ODM capability, and are familiar with ODM operation and management model. Chery has rich experience in the
field of traditional vehicles, and solid technological base. Our superior products will have an opportunity to grow from 0 to 1
through this joint venture ODM platform and the incremental business provided by Chery, and we will leverage our advantages to
take part in the competition, in order to have our tier-1 products pass validation by the brand customers.
Along with the wide application of consumer electronics products on vehicles, our technologies, experience and customer
resources accumulated over the years in the field of consumer electronics will help our automotive business segment better grasp
the trend, and develop more products and customers. We will keep pace with our premium customers at home and abroad,
accurately grasp the development direction of technologies and the industry, and actively promote the technological upgrading of
products and reduction of costs through technology, to continuously provide our customers with products and solutions that are
competitive in both technology and business. Our medium-to-long term goal is to grow into a tier-1 manufacturer in the global
automotive component industry in the next three to five years.
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III. Analysis of core competencies
(I) Smart manufacturing under the lean production mode
Since our establishment, we have adhered to our original intention, focused on precision manufacturing, and through
development and application of advanced digital tools and automatic production processes, and continuous optimization of system
structure, organization and production mode, ensure our production system is able to rapidly adapt to the continuously expanding
production lines and meet the constantly changing market demands.
1. Modern optimization of smart process
We implement the lean production mode pursuant to 7-S management standard, carry out production according to demands,
meet the demands of different customers for different products with the optimal production rhythm, and have introduced many digital
system tools, for example:
(1) SAP system that connects all links in our internal operation, and connects customers through EDI system and suppliers
through SRM system;
(2) PLM system in respect of product R&D, that integrates product-related processes, designs software and simulation models,
and scientifically manages product data in the entire life cycle from design, development, production, marketing,
purchasing to after-sale services;
(3) MES system in respect of production and manufacturing that integrates human, tooling, equipment, jigs, materials,
customer demands and other factors, and uses AI and 5G technologies to implement optimal management of the whole
process from receipt of customer demands to delivery of products;
(4) WMS smart warehousing system that effectively deals with and manages our complicated inbound and outbound goods,
improves the goods turnover and inventory turnover, greatly reduces overstock and occupation of funds, and make
warehousing management more accurate, simple and efficient; and
(5) Budget management and BI system in respect of financial and accounting operation that realizes efficient preparation of
budgets and effective control, review and analysis, and manages and controls risks using big data.
We continuously optimize our management processes and production processes, implement customer oriented precise, scientific
and intelligent management, and constantly strive to improve our production efficiency and product yield.
2. Advanced automatic process design and application
As a global leading provider of diversified component solutions, high-quality precision manufacturing has always been one of
our core competencies. Since our listing, our precision manufacturing capability has developed from “automation with passive
positioning” to “automation with active positioning” and finally to “full automatic and smart” super-precision modularized
manufacturing today. In the automatic manufacturing of products, we connect product design with the design of automatic
manufacturing process seamlessly, and on the basis of ensuring our process capability at key work stations takes the lead in the
industry, have introduced AI visual robots to realize positioning, error detection and judgment in the production process of precision
electronic components, active and mutual positioning between components and jigs in the assembly process, and AI-assisted
inspection of appearance of component products. We widely use automated guided vehicles (AGVs) on production lines and
warehouses, to give support to modern smart logistics and warehousing system. In addition, we use big data and AI technologies, in
conjunction with our proprietary algorithms, to feed back real-time measuring and testing data, thereby ensuring the reliable quality
assurance and full traceability of products, and enabling the automatic production lines to have the deep learning capability, to realize
close-end control over the automation technology, which marks that we have formally entered into the stage of “smart precision
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
manufacturing” from “precision manufacturing” in the early stage and “quality assured precision manufacturing” in the middle stage.
3. Advanced comprehensive quality management system
Quality is the foothold of a company, and one of the most important core values provided by a company to its customers. Since
our establishment, we have adopted “quality is our lifeline” as one of our corporate values, established and improved the quality
management system using scientific and effective quality management approaches, and integrated quality assurance into the whole
process from design, manufacturing, inspection, packaging to transportation of products. We have a full set of advanced NPI ( new
product introduction) management process, and control quality from the development and design of products, to lay a solid basis for
successful mass production of products. In the each stage of development of a new product, such as POC (proof of concept), Proto
(model verification), EVT (engineering verification test), DVT (design verification test), PVT (process verification test) and MP
(mass production), etc., we take the highest requirement for mass production that each stage should satisfy as the criteria for approval
of entry into the next stage. We attach great importance to quality precautions, and implement design quality controls focusing on
quality, cost, manufacturing and automation, to shorten the period from engineering development to mass production. Due to our
excellent quality assurance capability, we have received praise from our customers continuously, and enhanced customer adhesion.
(II) Forward-looking strategic deployment
Our management keeps abreast of market trends and developments of the industry, through industrial researches and internal
seminars, reviews our development situations, makes in-depth analysis of the boundaries of our business and capabilities, enhances
the implementation of the “three five-year” strategic plan, and continuously explores the ways of diversified innovations and
development. Our development towards new products and new areas is based on multi-dimensional analysis of industrial
development, customer demands, competitors, the value we can provide, the space we can play, profitability, return on investment
and other aspects of the industries, customers and end users, and detailed sand table exercise by our core management.
1. Vertically integrated one-stop service capability
We focus on providing the market with perfect comprehensive solutions covering the entire industry chain. We provide full
coverage products from core components, modules to system-level assembly. We have proprietary key process capabilities, including
design and processing of molds/jigs, bare copper wire drawing, plastic particle molding, stamping/press forging, precision implant
molding, surface treatment, SMT, SiP and system-level assembly testing. In addition, we have a number of national CNAS
certification labs responsible for preliminary development validation, in-process quality inspection and failure analysis. Therefore,
we have vertically integrated production capabilities for core components, modules to system-level assembly that are relatively
complete, and have realized close-end management from key materials, parts, modules, core technologies to data of all stages, in
respect of all core acoustic, optical and electric module products, such as acoustic modules, vibration motors, voice coil motors,
antenna modules, wireless charging modules, and all kinds of terminal products, such as accessory system, IoT equipment, acoustic
wearable devices, smart wearable devices and smart mobile phones. With our understanding of the market demands over the years,
we are able to provide comprehensive one-stop professional services from product proposal, design, validation to mass production,
and even to logistic cooperation, after-sale quality tracking and warranty, thus further enhancing our competitive advantage in rapid
response to demands of customers, timely and efficient engineering cooperation and cost control with quality guaranteed.
2. Industrial synergistic effect
In order to provide the customers with greater and better values, in addition to our vertically integrated one-stop service
capability, we manage and integrate purchasing, R&D and manufacturing activities of consumer electronics, communication,
automotive, healthcare and other business segments in a centralized manner, to minimize the use of resources, accelerate trans-sector
technological convergence, improve production efficiency and product yield, seek synergistic effect, reduce overall costs for
customers, and ensure our return on investment.
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3. Global service deployment
Economic globalization is the profound background and fundamental trend of the development and evolution of global economy
in the 21st century. As the players of economic globalization, transnational companies directly promote the development of economic
globalization. From the perspective of market, in the era of global intelligentization, the electronics industry is the field with the most
thorough allocation of global resources and market competition at present.
After more than ten years’ development, we have gradually built a global system integrating development, sales, FAE (field
application engineer) and manufacturing. We now have 16 sales & FAE offices abroad, which, in addition to providing services to
our customers from nearby locations, actively attract sales, R&D and management talents of different fields throughout the world, to
introduce fresh blood and draw out the potential capacities of the teams. This approach not only can be horizontally replicated in new
product operation teams, but also can maintain the capability boundary of all functional teams and personnel at the same level. In
addition, in order to optimize our cost structure, we have established industrial zones and manufacturing facilities in some foreign
countries, to serve global brand customers. We are committed to satisfying the demands of customers, keep abreast of market
demands through our global sales & FAE network, accelerate R&D of new products, produce high value-added products; leverage
our local manufacturing capabilities throughout the world and advantages in smart manufacturing, shorten the production and
transportation cycle of products, further enhance the cost advantage of products, and improve quality and efficiency, to provide our
customers throughout the world with more competitive services.
(III) R&D and technological innovation
1. Continuous increase in R&D investment
Since our listing, we have placed R&D and innovation on an important position in our development, made continuous
investments in technology R&D, vigorously upgraded traditional manufacturing processes, continuously improved the level of
automatic production, and realized platformization of all precision manufacturing processes. We also attach great importance to the
long-term development of underlying materials and innovative production technologies. Our R&D team has continuously learned and
explored advanced precision manufacturing technologies and product applications in the countries and regions mastering frontier
technologies, and established a number of advanced technology development labs with certain core customers, to jointly develop
frontier technologies. We have established advanced production technology and manufacturing process R&D platforms in Dongguan,
Kunshan, Taiwan and the United States, and own a R&D and smart manufacturing team taking the lead in the industry. Our R&D
expenses are mainly classified into early stage R&D expenses and product upgrading expenses. Early stage R&D expenses are
incurred in connection with medium-to-long term product and business planning and deployment, and consist of investments in new
products and new areas and R&D expenses relating to underlying technologies, accounting for about 30% of our total R&D expenses.
Product upgrading expenses are incurred in the process from concept to NPI (new product introduction) of new solutions and new
products. All early stage R&D expenses and product upgrading expenses are expensed as incurred to reduce the pressure of asset
amortization costs in the future. Our R&D expenses have been continuously increasing, and totaled RMB16.763 billion in the past
three years. In the reporting period, our R&D expenses totaled RMB6.642 billion.
2. Innovation capabilities and patents
Innovation is the soul of the era of knowledge economy. As a hi-tech company, we always attach great importance to the
management and protection of intellectual properties (IPs), have established and continuously improved our IP policy, complied with
all IP laws and regulations, established IP department and engaged professionals to actively carry out application, protection,
operation and maintenance activities in respect of IPs. We encourage our employees to actively make innovations, reduce product
costs and increase our profits. On the other hand, we actively prevent risk of infringement, and protect our and our customers’
legitimate rights and interests. As of the end of this reporting period, we own 3090 valid patents, an increase of 44.46% as compared
with the end of 2020.
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We firmly believe that R&D and technological innovation are an important means to realize forward-looking deployment, and
will drive our development. The continuous and steady R&D investments will not only consolidate our leading position and
advantages in the industry, but also enhance our risk bearing capability in an ever-changing macro environment, and lay a solid
foundation for our continuous and rapid development in the future.
(IV) Corporate culture focusing on sustainable development
1. All-round customer-oriented culture
Since our establishment, we have adhered to the philosophy of “customer first”, and been committed to providing our customers
with complete and perfect comprehensive solutions, taking into comprehensive consideration response speed, engineering
cooperation, service quality, flexible delivery, cost control and other factors. Our leading technologies and excellent quality
assurance capability have helped us build a good brand image and reputation in the industry, and brought high-quality customers to
us. After years of cultivation, we have established stable cooperation relationships with a lot of global leading brands and
manufacturers in the fields of consumer electronics, communication and automotive. Over the years, we have kept pace with the
strategic steps made by our major customers, cautiously assessed the development trends of the industry from the perspective of
brand customers and end consumers, and made forward-looking deployments to occupy the new markets and new channels, to ensure
that we maintain the lead. We think what customers think and are eager to help the customers in need. Under the guidance of the
service philosophy of “customer first”, in addition to fulfilling the tasks assigned by the customers, we have also continuously
identified the pain points of the customers in their applications, fully leveraged our resource and platform advantages, and taken the
initiative to provide the customers with optimization proposals and suggestions, to highlight our competencies. Our commitment to
fulfill all missions has been generally recognized in the industry.
2. Spirit of workmanship that constantly strives for perfection
We are unable to make continuous improvement in smart manufacturing, product R&D, internal management, social
responsibility and other areas without our employees’ striving for perfection at work and accomplishment of each task in such
manner that is higher than the customer standard, stricter than the industrial standard and more excellent than what has been done
yesterday. That is the key internal driving force behind continuous recognition of us by the customers and our rapid development. In
the future, we will remain true to our original aspiration, not only carry on the spirit of workmanship that constantly strives for
perfection in our traditional superior fields, but also foster such spirit in our new teams and new business segments, strive to
accomplish the strategic goals in the “three five-year” plan period with the spirit of enterprise, and achieve a win-win situation with
our customers, shareholders and employees.
3. Talent selection, training, use and retention mechanisms deeply integrated with corporate culture
The core competencies of a company will be ultimately reflected in the soft power arising from in-depth integration and mutual
nourishment of talents and corporate culture. Core talents are the basis for the sustainable development of a company and the
cornerstone for cultivating the talents required by a company. We have adhered to the strategy of invigorating the business through
talents, and continuously improved our talent echelon building system and talent pool mechanism. We vigorously recruit outstanding
talents required in our development who recognize and conform to the distinctive characteristics of our corporate culture, to
continuously augment our team of core talents. On the other hand, we continuously improve our talent training system and talent
selection system. Along with the growth of our business, we continuously put forward new and reasonable requirements for our
employees, encourage them to make self break-through in the boundary of their capabilities, and continuously improve their personal
competencies and management capabilities, to contribute new energy to our development. Under the nurture of our corporate culture
of being pragmatic and enterprising, constantly striving for perfection, and fulfilling the missions, we provide the key employees
with a vast space to exercise their talents, and effectively stimulate their sense of mission, sense of achievement and sense of
collective honor. At present, we have recruited outstanding talents in materials, automation, electronic information, molds, business
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
management and other fields throughout the world, to create a talent pool for our sustainable development. We clearly know how to
attract and retain talents. To develop a virtuous circle of people creating the environment and the environment creating people
through in-depth integration of talents and corporate culture is our strongest core competency. Through effective talent mechanisms,
we have sufficient talents in our traditional superior fields, and have laid the foundation for our rapid development in new areas and
businesses.
IV. Analysis of main business
1. Overview
In 2021, the external environment became more complicated and severe. The domestic and overseas economic development
faced numerous pressures and was greatly affected by the changes unseen in a century and the epidemic disease of the century.
During the reporting period, we faced more risks and challenges in our development, for example, the repeated outbreaks of
COVID-19 at home and abroad causing interruption of the upstream supply chain and blockade of logistic routes, shortage of chips
and materials throughout the world, sharp rise of the prices of staple commodities and logistic and transportation costs, and delay in
the mass production and delivery of certain new products.
In addition, the learning curve of some new products/businesses during rapid growth and the regular cycle of some existing
products affected our financial indicators to a certain extent. During the reporting period, we invested in and controlled Rikai
Precision Technology (Yancheng) Co., Ltd. (“Rikai Yancheng”). Since 2021, due to great demands from customers for the precision
display structure module products for mobile phones in the coming years, the scale of operation of Rikai Yancheng increased rapidly.
However, the huge investment in the preliminary development and automation optimization in respect of the precision display
structure module products for mobile phones and large proportion of raw materials to the total cost of such products greatly affected
the overall product margin of Rikai Yancheng, and in turn affected the consolidated gross margin of Luxshare-ICT. In addition, after
experiencing the strong demands from industries/market and consumers for smart wearable acoustic products, the shipments of our
smart wearable acoustic products dropped sharply in 2021, which had a periodic effect on the operating revenue and net profit of this
business. The development of this business is expected to become stable in 2022. We will continue to leverage our core competencies,
give full play to our value as an important partner of our key customers, and promote the steady and high-quality development of this
business.
Facing the market competitions and internal and external pressures and challenges, we work hard to overcome the difficulties,
focus on the formulation and implementation of the “three five-year” strategic plan, and further enhance short-, medium- and
long-term forward-looking deployments taking into account the new situations and new opportunities. During the reporting period,
we fully leveraged our advantages in smart, digital and modular high-end manufacturing and flexible management, further
consolidated the foundation of the big precision and smart manufacturing platform, intensively implemented vertically integrated
allocation of resources, and effective coordination of all product lines and business segments, improved the efficiency of internal
organization, and made praise-worthy achievements in both existing and new businesses.
(1) Consumer electronics business
During the reporting period, we stuck to the strategy of diversified vertical integration and production penetration in the field of
consumer electronics. In 2021, with respect to smart wearable healthcare products, as an important member of our family of
system-level products, though the delivery of certain products was delayed due to the epidemic situation at home and abroad and
shortage of materials, our excellent performance in product development, automatic production process, premium quality, flexible
delivery and other areas was well recognized by our key customers, laying a solid foundation for the provision by us of in-depth and
diversified services, such as system assembly and different kinds of core components, in respect of this product line. With respect to
SiP products, despite the effect of overseas epidemic situation, our performance was generally mature and realized full coverage of
smart wearable healthcare products. On the basis of thorough assessment of return on investment, utilization rate and other operating
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
metrics, and in-depth analysis of this technology development route, taking into account our strategy of access to the overseas market
for system products, we will make further plans in respect of smart wearable acoustic products and peripheral functional module
system packaging business in the short term, and develop chip/semiconductor module packaging business in the long term. With
respect to system products for mobile phones, the joint venture platform established by us and our controlling shareholder vigorously
promoted smart and digital practices, and built an integrated smart platform covering product scheduling, production process analysis,
asset management, energy monitoring, personnel management, failure analysis, remote assistance and other activities, in order to
continuously improve our operation and management level, and effectively satisfy our customers’ increasingly personalized, high
quality and rapidly evolving demands. Our integrated smart development and production platform covering the whole process make
full preparation for large-scale replication and group/global operation in the days to come.
With respect to the vast consumer electronics market, we keep our eyes open, and wash grains of gold out of the sand. In the
recent years, by leveraging our strong core competencies and the demonstration effect of big customers, through our premium
services to many global well-known brand customers, we have made excellent achievements in smart terminal, smart life, computer
accessory and other solutions, and accumulated strength for the diversified development of our consumer electronics business at the
customer and product sides. Our products include acoustic, optical and electric modules, smart accessory system, acoustic system,
IoT equipment, wearable devices, etc. Through in-depth market/customer researches, we have established executable development
plans and growth objectives, and our cooperation with global customers having great potentialities has been upgraded from simple
cooperation in components and modules to integrated and all-round cooperation in complete unit system solutions. At present, we are
carrying out business as planned, with the support and recognition of the market and customers as what they did in the past. In view
of the relatively fragmented market, we will further focus on resources and make thorough assessments in the future, and strive to
develop related business into important drivers of our sustainable growth in the next five to ten years.
(2) Automotive business
In 2021, despite the weak market demand and chip shortage caused by the epidemic situation at home and abroad, the overall
development of our automotive business generally meets the expectations of our management. Along with the continuous
development of “electrification”, “intelligentization” and “interconnection” of vehicles, and trans-sector application of consumer
electronic products and technologies on vehicles, we actively grasp market opportunities, and fully leverage our technologies and
customer resources accumulated over the years in the fields of consumer electronics and communication, in order to ensure that our
existing automotive business catches the trend more accurately, and to develop product lines and strategic customers in a more
intensive and focused manner. At present, our main products cover automotive wire harnesses (vehicle wire harnesses, special wire
harnesses, charging guns, etc.), connectors (high-voltage, low-voltage and high-speed connectors, Busbar, etc.), smart new energy
(PDUs, BDUs, inverters, energy storage, etc.), smart interconnect (RSUs, TCUs, etc.), and smart cabin/control (domain controllers,
infotainment system and multi-media instrument panels). We will, guided by the trend of technology development and strategy to
focus on/enable customers, continuously provide our customers with products and solutions that are competitive in the world in both
technical and commercial metrics, by leveraging our manufacturing facilities and product R&D centers distributed around the
country, and the synergistic effect of domestic and overseas resources.
(3) Communication business
During the reporting period, our supercomputing center business grew rapidly, as a result of our continuous technology
development in the field of communication. However, the unreasonable interference by foreign entities of the same trade in the
context of China-US trade friction affected the continued development of our communication business in North America. On the
basis of further improving our capabilities in respect of existing high/low-frequency electric connector, optical connector and RF
communication products, during the reporting period, we focused on the development of thermal system management, industrial
connector and other new products and new businesses, further enhanced vertical integration of industries, trans-sector technological
convergence, and increased coverage of product lines, with a view to growing into a comprehensive data and communication solution
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provider. The global market has continuous demands for communication equipment. Along with the further development of smart
manufacturing, metaverse, smart driving and IoT, by virtue of our complete product lines and platforms, and our understanding and
application of frontier technologies, we will continuous exploit the global market and increase our market shares.
During the reporting period, our sales revenues totaled RMB153.946 billion, an increase of 66.43% year on year; profit totaled
RMB8.143 billion, an increase of 0.09% year on year; and net profit attributable to the owners of the parent totaled RMB7.071
billion, a decrease of 2.14% year on year.
2. Revenue and cost
(1) Components of operating revenue
In RMB
2021 2020
Y/Y %
% of operating % of operating
Amount Amount Change
revenue revenue
Total operating revenue 153,946,097,790.40 100% 92,501,259,211.54 100% 66.43%
By segment
Computer interconnect products and
7,856,595,729.78 5.10% 3,521,361,712.58 3.81% 123.11%
precision components
Automotive interconnect products and
4,142,675,174.19 2.69% 2,844,031,362.75 3.07% 45.66%
precision components
Communication interconnect products
3,269,476,642.60 2.12% 2,265,420,000.59 2.45% 44.32%
and precision components
Consumer electronics 134,637,995,600.46 87.46% 81,818,160,358.88 88.45% 64.56%
Other connectors and other business 4,039,354,643.37 2.62% 2,052,285,776.74 2.22% 96.82%
By product
Computer interconnect products and
7,856,595,729.78 5.10% 3,521,361,712.58 3.81% 123.11%
precision components
Automotive interconnect products and
4,142,675,174.19 2.69% 2,844,031,362.75 3.07% 45.66%
precision components
Communication interconnect products
3,269,476,642.60 2.12% 2,265,420,000.59 2.45% 44.32%
and precision components
Consumer electronics 134,637,995,600.46 87.46% 81,818,160,358.88 88.45% 64.56%
Other connectors and other business 4,039,354,643.37 2.62% 2,052,285,776.74 2.22% 96.82%
By region
Domestic market 10,493,247,599.10 6.82% 7,454,978,348.07 8.06% 40.75%
Overseas market 143,452,850,191.30 93.18% 85,046,280,863.47 91.94% 68.68%
By sales mode
Direct sales 153,946,097,790.40 100.00% 92,501,259,211.54 100.00% 66.43%
(2) Segments, products or regions representing more than 10% of operating revenue or profit
√ Applicable □ N/A
In RMB
Y/Y % Change Y/Y % Y/Y %
Gross
Operating revenue Operating cost in operating Change in Change in
margin
revenue operating cost gross margin
By segment
Consumer electronics 134,637,995,600.46 119,338,834,375.15 11.36% 64.56% 77.54% -6.48%
By product
Consumer electronics 134,637,995,600.46 119,338,834,375.15 11.36% 64.56% 77.54% -6.48%
By region
Domestic market 10,493,247,599.10 8,421,880,523.04 19.74% 40.75% 44.47% -2.06%
Overseas market 143,452,850,191.30 126,626,455,769.84 11.73% 68.68% 81.05% -6.03%
By sales mode
27
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Direct sales 153,946,097,790.40 135,048,336,292.88 12.28% 66.43% 78.23% -5.81%
In case of any adjustment to the statistic scale for main business data, the main business data of the most recent reporting period as
adjusted according to the statistic scale applied at the end of the current reporting period:
□ Applicable √ N/A
(3) Whether the Company’s revenue from sale of tangible goods is higher than the revenue from labor
service?
√ Yes □ No
Segment Item Unit 2021 2020 Y/Y % Change
Sales volume KPCS 692,107 510,910 35.47%
Computer interconnect products and precision
Output KPCS 735,779 537,997 36.76%
components
Inventories KPCS 43,672 27,087 61.23%
Sales volume 1000 sets 233,339 172,912 34.95%
Automotive interconnect products and precision
Output 1000 sets 256,542 184,502 39.05%
components
Inventories 1000 sets 23,203 11,590 100.20%
Sales volume KPCS 380,329 470,565 -19.18%
Communication interconnect products and
Output KPCS 413,793 514,389 -19.56%
precision components
Inventories KPCS 33,465 43,824 -23.64%
Sales volume KPCS 3,495,842 3,299,993 5.93%
Consumer electronics Output KPCS 3,773,559 3,661,402 3.06%
Inventories KPCS 277,717 361,409 -23.16%
Sales volume KPCS 467,754 312,258 49.80%
Other connectors and other business Output KPCS 508,283 348,814 45.72%
Inventories KPCS 40,529 36,556 10.87%
Analysis of changes in the relevant data over 30% year on year:
√ Applicable □ N/A
During the reporting period, our output and sales volume increased as a result of increase in sales.
(4) Performance of material sales contracts and material purchase contracts by the Company as of the end
of the reporting period
□ Applicable √ N/A
(5) Components of operating cost
Classification of segments
In RMB
2021 2020
Y/Y %
Segment Item % of operating % of operating
Amount Amount Change
cost cost
Computer interconnect products and
6,296,204,929.34 4.66% 2,765,866,774.16 3.65% 127.64%
precision components
Automotive interconnect products
3,475,111,291.70 2.57% 2,374,148,439.75 3.13% 46.37%
and precision components
Communication interconnect
2,700,268,416.55 2.00% 1,818,503,189.96 2.40% 48.49%
products and precision components
Consumer electronics 119,338,834,375.15 88.37% 67,217,502,600.73 88.71% 77.54%
Other connectors and other business 3,237,917,280.14 2.40% 1,593,986,044.98 2.10% 103.13%
Analysis
None
28
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(6) Change in the scope of consolidation during the reporting period
√ Yes □ No
Luxis Technology Limited, Yancheng Luxshare Precision Industry Co., Ltd., Hangzhou Xuntao Technology Co., Ltd., Rugao
Luxshare Business Management Service Partnership (LP), Lianxun Smart Equipment (Rugao) Co., Ltd., Luxshare Technology
(Xi’an) Co., Ltd., Luxshare Electronic Technology (Enshi) Co., Ltd., Luxis Technology (Kunshan) Co., Ltd., Luxshare Investment
Co., Ltd., Yancheng Luxshare Business Management Service Partnership (LP), Luxshare Smart Equipment (Yancheng) Co., Ltd.,
Luxis Precision Intelligent Manufacturing (Kunshan) Co., Ltd., Luxshare Smart Manufacturing & Electronic Service (Kunshan) Co.,
Ltd., Liding Electronic Technology (Dongguan) Co., Ltd., Luxshare Technology (Nanjing) Co., Ltd., Henan Leader Precision
Industry Co., Ltd. and Changzhi Luxshare Precision Industry Ltd., that were newly established by us, Rikai Precision Technology
(Yancheng) Co., Ltd. and Zhejiang Puson Electronic Technology Co., Ltd., that were acquired by us in cash, and Caldigit Holding
(Cayman) and Taihan Precision Technology Co., Ltd., that were controlled by us by contract during the reporting period, are
included in the scope of consolidation. Wuxi Huihong Electronics Co., Ltd., that was transferred by us, and Ji’an Jizhou Luxshare
Electronics Co., Ltd., Speedtech (LS-ICT) Co., Limited, Luxshare International Cable Co., Ltd. and Luxshare-ICT International B.V.,
that were liquidated and deregistered during the reporting period, are removed from the scope of consolidation.
(7) Material changes or adjustments in respect of business, products or services of the Company during the
reporting period
□ Applicable √ N/A
(8) Major customers and suppliers
Major customers of the Company:
Aggregate sales revenue from top 5 customers (RMB) 128,399,408,091.77
Proportion of aggregate sales revenue from top 5 customers to annual sales revenue 83.41%
Proportion of aggregate sales revenue from related parties among top 5 customers to annual sales revenue 0.00%
Particulars of top 5 customers:
No. Name of customer Sales revenue (RMB) % of annual sales revenue
1 Customer 1 114,055,710,068.00 74.09%
2 Customer 2 5,033,592,065.75 3.27%
3 Customer 3 3,621,465,625.47 2.35%
4 Customer 4 3,188,059,176.36 2.07%
5 Customer 5 2,500,581,156.19 1.62%
Total -- 128,399,408,091.77 83.41%
Other information of major customers:
□ Applicable √ N/A
Major suppliers of the Company:
Aggregate purchase amount from top 5 suppliers (RMB) 75,982,606,355.38
Proportion of aggregate purchase amount from top 5 suppliers to annual purchase cost 57.96%
Proportion of aggregate purchase amount from related parties among top 5 suppliers to annual purchase cost 0.00%
Particulars of top 5 suppliers:
No. Name of supplier Purchase amount (RMB) % of annual purchase cost
1 Supplier 1 68,529,282,195.97 52.28%
2 Supplier 2 2,220,179,015.43 1.69%
3 Supplier 3 1,986,097,524.70 1.52%
4 Supplier 4 1,718,167,435.10 1.31%
29
Luxshare Precision Industry Co., Ltd. Annual Report 2021
5 Supplier 5 1,528,880,184.17 1.17%
Total -- 75,982,606,355.38 57.96%
Other information of major suppliers:
□ Applicable √ N/A
3. Expenses
In RMB
2021 2020 Y/Y % Change Reason of material changes
Primarily due to increase in the scope of
Sales expenses 789,908,163.80 477,047,875.58 65.58%
consolidation and business growth
Primarily due to increase in the scope of
General expenses 3,741,908,783.50 2,463,953,208.63 51.87%
consolidation and business growth
Primarily due to fluctuations in foreign
Financial expenses 554,665,874.05 904,828,142.89 -38.70%
exchange rates
Primarily due to increase in the scope of
R&D expenses 6,642,300,402.74 5,744,805,136.33 15.62%
consolidation and R&D investments
Primarily due to increase in pre-tax
deduction of differences in the exercise price
Income tax expenses 322,238,643.64 644,764,928.70 -50.02%
of incentive shares, and additional deduction
of R&D expenses
4. R&D investments
√ Applicable □ N/A
Expected effect on the
Description of major
Purpose Progress Objectives future development of
R&D project
Company
Project relating to To develop new In progress To optimize the Our R&D and
acoustic products functions and new functions of the relevant manufacturing
processes of TWS products and realize capabilities in respect
earphones, headphones stable mass production of acoustic products
and other acoustic with high quality. will be improved,
products, develop new R&D cycle of new
products, and products will be
continuously improve shortened, and our
production efficiency. competencies will be
enhanced.
Project relating to To develop new Partially completed To improve the While getting
smart wearable functions of smart functions, automation recognition from
products wearable products and level of production customers, the results
improve the production lines, production of our smart wearable
process. efficiency and product business will be
yield of the relevant increased and our
products. competencies will be
enhanced.
Millimeter wave To develop new Completed To make breakthroughs Our advantage in the
dielectric antenna products and new in the use on traditional vertical integration of
30
Luxshare Precision Industry Co., Ltd. Annual Report 2021
components project performance, and millimeter wave components will be
reduce production costs. antennas, reduce the enhanced and market
dimensions of products share of the relevant
and effectively lower product lines will be
costs. increased.
New-type linear motor To optimize product In progress To optimize technical Our advantage in the
project mix and reduce R&D indicators and vertical integration of
costs. cooperate with the components will be
customers in the enhanced and market
relevant tests, mass share of the relevant
production and product lines will be
deliveries. increased.
SIP system level To develop new In progress To upgrade our Our advantage in the
double side packaging technologies and new traditional SiP module vertical integration of
project processes, and improve packaging technology, components will be
production efficiency. fully fill the bottom enhanced and market
space of chips, reduce share of the relevant
the residue stress after product lines will be
packaging, ensure the increased.
reliability of package
products, and improve
the technical
capabilities of product
packaging.
Project relating to To develop 400G In progress To expand the Our advantage in the
optical module high-speed optical application scenarios vertical integration of
products modules and and market for components will be
preliminary develop high-speed optical enhanced and market
next-generation optical modules, develop share of the relevant
modules. product series, enrich product lines will be
high-speed product increased.
lines and realize mass
production of the
relevant products.
Project relating to To develop In progress To develop proprietary Our technical
high-speed cables transmission cable interfaces for servers, advantage in the
assemblies that provide switches, communication and
high-speed signals for high-performance data center cable
super data centers and computers and other products will be
5G services. products, and increase enhanced and market
the speed. share will be
increased.
Project relating to To develop, improve Partially completed To improve our Our product lines and
automotive wire and upgrade vehicle technical capability to market share in the
31
Luxshare Precision Industry Co., Ltd. Annual Report 2021
harnesses wire harnesses, motor develop automotive field of automotive
wire harnesses, wire harness products, will be further
automotive steering satisfy different increased.
wire harnesses, new customization
energy battery pack requirements, and
wire harnesses and increase operating
other products. revenue.
Project relating to To develop high and Partially completed To improve our Our product lines and
automotive connectors low voltage connectors, manufacturing market share in the
high-speed connectors, capability and field of automotive
customized connector production efficiency. will be further
structures and other Our proprietary gigabit increased.
automotive connectors. Ethernet connector
adopts a wholly
shielded double cable
connection structure,
and has been widely
used on infotainment
systems, ADASs,
domain controllers and
other products.
Project relating to To develop Partially completed To improve our Our product lines and
power system of high-voltage manufacturing market share in the
electric vehicles high-current battery capability and field of automotive
disconnect control production efficiency. will be further
module, new-generation The process increased.
on-board bidirectional development, trial
DC power supply and production and PPAP
other power system certification in respect
products for electric of our new-generation
vehicles. on-board bidirectional
DC power supply have
been completed.
Project relating to To develop RSU, TCU Partially completed Our IoV smart RSU has Our product lines and
automotive smart and other automotive realized remote market share in the
interconnect products interconnect products. coverage, short field of automotive
communication delay, will be further
high success rate of increased.
message sending and
other functions.
Multi-cavity The robot will change Completed To replace manual Through automation
automatic sorting the operation mode of handling, identification, upgrading of
robot project manual cavity-by-cavity plate feeding and other production lines, our
plate feeding on the labor intensive production efficiency
32
Luxshare Precision Industry Co., Ltd. Annual Report 2021
production lines for operations, and realize and product yield will
micro products in the cavity-by-cavity plate be improved.
injection molding feeding for micro
workshop in the past, products made from
greatly improve injection molding.
workplace safety,
realize automatic
production, and
promote automation
upgrading in the
industry. Through
further upgrading of the
equipment, to improve
the stability of the
equipment during
production and finally
realize automatic
production of micro
products in the injection
molding workshop.
AI automatic The AI automatic Completed To replace manual Through automation
inspection system inspection system will handling, inspection upgrading of
project change the traditional and other labor production lines, our
operation mode of intensive operations, production efficiency
visual inspection, and realize precise and product yield will
realize automatic inspection of be improved.
inspection and promote appearance, dimensions
automation upgrading and other essential
in the industry. Through factors of precision
further upgrading of the components for
equipment, to improve electronic products.
the reliability and
stability of production,
and finally realize
unmanned workshops.
Particulars of R&D personnel:
2021 2020 Y/Y % change
Number of R&D personnel 16,103 15,154 6.26%
Proportion of R&D personnel to total number of employees 7.06% 8.79% -1.73%
Education background of R&D personnel - - -
Undergraduate 7,393 7,126 3.75%
Master 260 256 1.56%
Others 10,199 9,310 9.55%
Ages of R&D personnel - - -
Below 30 8,325 7,865 5.85%
30-40 6,897 6,507 5.99%
33
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Above 40 881 782 12.66%
Particulars of R&D expenses:
2021 2020 Y/Y % Change
Amount of R&D expenses (RMB) 6,642,300,402.74 5,744,805,136.33 15.62%
Proportion of R&D expenses to operating revenue 4.31% 6.21% -1.90%
Amount of R&D expenses capitalized (RMB) 0.00 0.00 0.00%
Proportion of capitalized R&D expenses to total R&D expenses 0.00% 0.00% 0.00%
Analysis of the cause and effect of significant change in the composition of R&D personnel:
□ Applicable √ N/A
Analysis of significant change in the proportion of R&D expenses to operating revenue compared with 2019:
□ Applicable √ N/A
Analysis and reasonableness of significant change in the proportion of R&D expenses capitalized:
□ Applicable √ N/A
5. Cash flows
In RMB
Item 2021 2020 Y/Y % Change
Cash provided by operating activities 152,974,773,173.48 101,344,544,382.43 50.95%
Cash used in operating activities 145,690,006,256.48 94,471,332,896.38 54.22%
Net cash flows from operating activities 7,284,766,917.00 6,873,211,486.05 5.99%
Cash provided by investment activities 59,103,742,247.41 56,134,501,620.87 5.29%
Cash used in investment activities 67,483,404,233.19 65,282,235,798.95 3.37%
Net cash flows from investment activities -8,379,661,985.78 -9,147,734,178.08 -8.40%
Cash provided by financing activities 42,545,854,141.42 31,843,182,893.74 33.61%
Cash used in financing activities 42,935,782,234.50 25,056,689,251.71 71.35%
Net cash flows from financing activities -389,928,093.08 6,786,493,642.03 -105.75%
Net increase in cash and cash equivalents -1,543,267,723.26 4,317,464,527.08 -135.74%
Analysis of main causes of material changes in the related data:
√ Applicable □ N/A
1. The cash provided by operating activities was RMB152,974,773,200, an increase of 50.95% year on year, primarily due to an
increase in sales, sales revenue collected and tax rebates received.
2. The cash used in operating activities was RMB145690006300, an increase of 54.22% year on year, primarily due to an increase
in the raw materials purchased and employee benefits paid.
3. The net cash flows from financing activities was -RMB389928100, a decrease of 105.75% year on year, primarily due to
repayment of short-term borrowings, loans and interest during the reporting period.
Analysis of significant difference between net cash flows from operating activities during the reporting period and net profit in
current year:
□ Applicable √ N/A
V. Analysis of non-main business
√ Applicable □ N/A
In RMB
34
Luxshare Precision Industry Co., Ltd. Annual Report 2021
% of total Whether or not
Amount Reason
profit sustainable
Income from investments and wealth
Investment income 689,386,649.74 8.47% management products classified as financial No
assets at fair value through profit or loss
Gain or loss on changes in fair Investment income on financial assets at fair
-115,737,751.66 -1.42% No
value value through profit or loss
Allowance for impairment of inventories and
Impairment loss on assets -162,790,335.12 -2.00% No
fixed assets
Non-operating income 21,096,536.60 0.26% Revenue from retirement of assets No
Non-operating expenses 45,672,434.05 0.56% Loss on disposal of fixed assets No
Gain on disposal of assets -45,266,592.65 -0.56% Disposal of production equipment No
Other gains 853,542,165.37 10.48% Government grants No
Impairment loss on accounts receivable and other
Credit loss -26,875,504.69 -0.33% No
receivables
VI. Analysis of assets and liabilities
1. Material changes in components of assets
In RMB
December 31, 2021 January 1, 2021
Y/Y %
% of total % of total Reason of material change
Amount Amount Change
assets assets
Cash and bank
14,204,618,186.43 11.78% 10,528,245,765.93 15.01% -3.23%
balances
Business growth (including
Accounts receivable 31,623,185,946.25 26.23% 13,839,155,340.47 19.73% 6.50% increase in the scope of
consolidation)
Contract assets 0.00% 0.00% 0.00%
Increase in inventory storage
level along with increase in our
Inventories 20,900,755,733.15 17.33% 13,211,009,381.15 18.83% -1.50% scale of operation (including
increase in the scope of
consolidation)
Investment properties 59,000,690.72 0.05% 47,592,110.24 0.07% -0.02%
Long-term equity
1,125,605,226.03 0.93% 1,208,540,333.29 1.72% -0.79%
investment
Increase in investment in factory
buildings, dormitories and
Fixed assets 34,113,259,322.43 28.29% 19,761,012,854.95 28.17% 0.12%
equipment (including increase in
the scope of consolidation)
Factory building, dormitory and
workshop renovation projects in
Construction in progress and equipment that has
3,685,336,499.02 3.06% 1,596,064,894.58 2.27% 0.79%
progress not yet been accepted (including
increase in the scope of
consolidation)
Adoption by us of the new lease
Right of use assets 425,011,542.28 0.35% 149,189,002.32 0.21% 0.14% accounting standard since
January 1, 2021
Replenishment of working
Short-term borrowings 11,919,635,337.99 9.89% 7,577,068,798.49 10.80% -0.91% capital (including increase in the
scope of consolidation)
Contract liabilities 268,506,246.98 0.22% 152,512,971.36 0.22% 0.00% Advances from clients
35
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Increase in loans to satisfy the
requirements of new projects
Long-term loans 5,025,096,193.09 4.17% 1,495,199,238.41 2.13% 2.04%
(including increase in the scope
of consolidation)
Adoption by us of the new lease
Lease liabilities 315,093,483.55 0.26% 144,462,685.91 0.21% 0.05% accounting standard since
January 1, 2021
Financial assets held Forward exchange facilities,
2,107,118,105.04 1.75% 3,160,064,470.41 4.50% -2.75% wealth management and other
for trading
investments
Prepayments for materials and
customs deposits (including
Advances to suppliers 406,016,492.61 0.34% 179,160,621.29 0.26% 0.08%
increase in the scope of
consolidation)
Share transfer prices, export
Other receivables 598,456,702.88 0.50% 407,990,780.79 0.58% -0.08% rebates and deposits, and
insurance indemnities receivable
Input tax credits and prepaid and
Other current assets 2,161,055,820.73 1.79% 1,804,485,645.49 2.57% -0.78%
refundable income tax
Factory building and workshop
Long-term deferred renovation expenses (including
733,015,722.42 0.61% 488,087,044.97 0.70% -0.09%
expenses increase in the scope of
consolidation)
Share-based payments,
unrealized profit on internal asset
Deferred tax assets 891,215,468.53 0.74% 355,834,434.21 0.51% 0.23% transactions, government grants,
deductible losses before tax and
other timing differences
Prepayments for equipment,
Other non-current engineering projects and land
1,904,305,181.49 1.58% 1,223,199,642.61 1.74% -0.16%
assets (including increase in the scope
of consolidation)
Notes payable 234,500,590.93 0.19% 128,572,111.54 0.18% 0.01% Increase in note transactions
Increase in raw materials
purchased in order to fulfill
Accounts payable 45,416,165,667.67 37.67% 23,051,557,603.83 32.86% 4.81% orders along with our business
growth (including increase in the
scope of consolidation)
Accrued expenses and security
Other payables 382,391,106.17 0.32% 146,162,097.14 0.21% 0.11%
deposits payable
Short-term bonds and
Other current inter-company trade account
3,623,423,072.87 3.01% 623,257,555.89 0.89% 2.12%
liabilities payable (including increase in
the scope of consolidation)
Government grants relating to
Deferred income 538,556,944.18 0.45% 425,345,982.64 0.61% -0.16%
capital
Accelerated depreciation of fixed
assets and temporary difference
arising from increase in
Deferred tax liabilities 1,272,092,467.86 1.06% 966,092,212.95 1.38% -0.32%
appraised value of business
combinations not under common
control
Analysis of high proportion of overseas assets:
□ Applicable √ N/A
36
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Assets and liabilities at fair value
√ Applicable □ N/A
In RMB
Aggregate Impairment loss
Gain or loss on
Beginning changes in fair recognized in Amount acquired in Amount sold in the Other
Item changes in fair Ending balance
balance value recorded the current the reporting period reporting period changes
value
in equity period
Financial assets
1. Financial assets held for
trading (excluding 2,854,676,050.46 73,732,025.24 19,182,537,140.74 20,119,745,754.45 1,991,199,461.99
derivative financial assets)
2. Derivative financial
305,388,419.95 -189,469,776.90 115,918,643.05
assets
3. Investment in other
138,074,571.56 96,140,150.00 1,761,426.86 235,976,148.42
equity instruments
Subtotal of financial assets 3,298,139,041.97 -115,737,751.66 96,140,150.00 19,182,537,140.74 20,119,745,754.45 1,761,426.86 2,343,094,253.46
Investment in equity
5,700,000.00 5,700,000.00
instruments
Total 3,298,139,041.97 -115,737,751.66 96,140,150.00 19,188,237,140.74 20,119,745,754.45 1,761,426.86 2,348,794,253.46
Financial liabilities 0.00 41,436.00 41,436.00
Other changes:
Other changes are the principal of other equity instruments included due to increase in the scope of consolidation.
Whether there’s any material change in the measurement properties of main assets of the Company during the reporting period?
□ Yes √ No
3. Encumbrances on assets as of the end of the reporting period
On September 30, 2021, the 4th meeting of the 5th Board of Directors considered and adopted the Proposal for Applying for an Acquisition Loan from the Banks and Pledging the Shares of the
Subsidiary, pursuant to which, we intended to apply to four banks for a syndicated acquisition loan of up to RMB3.4 billion, for a term of five years, which would be mainly used to replace our
capital contribution already made to Rikai Yancheng. We pledged 48.013% shares of Rikai Yancheng as security for such acquisition loan for a term of five years. The relevant information was
disclosed in our Announcement on Applying for an Acquisition Loan from the Banks and Pledging the Shares of the Subsidiary (No. 2021-080). During the reporting period, we completed the
procedures relating to the pledge of the shares of Rikai Yancheng for a term of five years. See “Section X Financial Report – VII. Notes to Items in Consolidated Financial Statements – 81.
Assets with restricted ownership or right of use”.
37
Luxshare Precision Industry Co., Ltd. Annual Report 2021
VII. Analysis of investments
1. Overall situation
√ Applicable □ N/A
Amount of investment in 2021 (RMB) Amount of investment in 2020 (RMB) Y/Y % Change
7,623,854,176.00 3,122,574,000.00 144.15%
2. Major equity investments acquired in the reporting period
√ Applicable □ N/A
In RMB
Investment
Status as of Whether or not Date of Disclosure
Method of Amount of Shareholding Source of Term of Expected income/ loss in
Investee Main business Partner Product type the balance involved in any disclosure (if reference
investment investment percentage funds investment income the reporting
sheet date litigation any) (if any)
period
Technology development,
technical consulting and
technical services in
respect of computer
accessories; design, R&D
and production of
precision stamping molds
(precision ≥ 0.02mm),
precision cavity molds
Rikai (precision ≥ 0.05mm), Announce
Precision metal product molds, ment No.
Technolog non-metal product molds 2021-017
Capital Self-owned Electronic February 4,
y and standard parts for 6000,000,000.00 50.01% N/A Long-term Paid in full 0.00 0.00 No published
injection funds components 2021
(Yanchen molds; production of on
g) Co., high-temperature resistant www.cnin
Ltd. molded insulating fo.com.cn
materials, stamped
hardware parts, rivets,
shafts, mechanical
components and other
components for 3C
electronics products;
industrial design, product
design (exterior design,
structural design, circuit
38
Luxshare Precision Industry Co., Ltd. Annual Report 2021
design, graphic design,
etc.); lease of own idle
equipment; wholesale,
commission agency
(except auction), import,
export and supporting
services in respect of the
aforesaid products and
related components.
Business not subject to
licensing: manufacturing
of computer software,
hardware and peripherals.
Total -- -- 6000,000,000.00 -- -- -- -- -- -- 0.00 0.00 -- -- --
3. Major non-equity investments that have not yet been completed in the reporting period
□ Applicable √ N/A
4. Investment in financial assets
(1) Investment in securities
√ Applicable □ N/A
In RMB
Gain or loss on Aggregate Amount
Initial Beginning Amount sold in Gain or loss in
Short Method of changes in fair changes in fair acquired in Ending carrying Accounting Source of
Type of security Security code investment carrying the reporting the reporting
name measurement value in the value recorded in the reporting amount item funds
cost amount period period
reporting period equity period
Investment
Stock listed on
Tony in other Self-owned
domestic or 603595 22,500,000.00 Fair value 114,221,319.04 96,057,510.08 162,951,644.67 0.00 0.00 96,057,510.08 210,278,829.12
Electronic equity funds
overseas market
instruments
Total 22,500,000.00 -- 114,221,319.04 96,057,510.08 162,951,644.67 0.00 0.00 96,057,510.08 210,278,829.12 -- --
Disclosure date of the announcement of the Board
of Directors approving the investment in securities
Disclosure date of the announcement of the
shareholders’ meeting approving the investment in
39
Luxshare Precision Industry Co., Ltd. Annual Report 2021
securities (if any)
(2) Investment in derivatives
√ Applicable □ N/A
In RMB0’000
% of ending
Allowance balance to the Actual gain or
Whether or not Initial
Type of Date of Date of Beginning Amount acquired in Amount sold in the for net asset as at loss in the
Counterparty Affiliation a related-party investment Ending balance
derivative commencement termination balance the reporting period reporting period impairment the end of the reporting
transaction cost
loss (if any) reporting period
period
Bank Non-affiliate No Forward 48,545.26 48,545.26 534,737.11 578,098.28 5,184.08 0.15% 19,739.28
Bank Non-affiliate No Option 463,920.39 463,920.39 1,659,594.71 1,725,671.42 397,843.68 11.27% 49,352.43
Total 512,465.65 -- -- 512,465.65 2,194,331.82 2,303,769.7 403,027.76 11.42% 69,091.71
Source of funds Self-owned funds
Whether or not involved in any litigation N/A
Disclosure date of the announcement of the Board of
January 23, 2021
Directors approving the investment in derivatives (if any)
Disclosure date of the announcement of the shareholders’
meeting approving the investment in derivatives (if any)
1. We conduct foreign exchange derivative transactions for the purpose of fixing costs, and avoiding and preventing foreign exchange and interest rate risks, and
prohibit any speculation.
2. We have established strict business management policy regarding financial derivative transactions, which contain explicit provisions on the principle of operation,
approving power, internal operating process, information segregation measures, internal risk controls, information disclosure and other issues relating to financial
derivative transactions, to control the risks associated with such transactions.
Analysis of risks associated with the derivatives held in the
3. We carefully examine the terms of contracts entered into with the relevant banks, and strictly implement the risk management policy to prevent legal risks.
reporting period (including without limitation market risk,
4. Our Finance Department continuously follows up on the changes in the market price or fair value of the relevant foreign exchange derivatives, promptly assesses
liquidity risk, credit risk, operational risk and legal risk) and
the changes in risk exposures of such foreign exchange derivatives, reports to the management on a regular basis, promptly reports the abnormal situations
related risk control measures
discovered, calls attention to the relevant risks, and takes the appropriate emergency measures.
5. In order to prevent any delay in the delivery of forward exchange contracts, we attach great importance to the management of accounts receivable, and have
established safety management measures to prevent any delay in the payment of accounts receivable.
6. Our Internal Audit Department is responsible for supervising and auditing the decision-making, management, execution and other issues in respect of foreign
exchange derivative transactions.
Changes in the market price or fair value of the derivatives
held in the reporting period (in the analysis of the fair value Change in the fair value of a foreign exchange derivative is the difference between its fair market price in the month in which the delivery date determined by the
of derivatives, the specific approaches, assumptions and Company falls and its contract price.
parameters used shall be disclosed)
40
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Whether there’s any material change in the accounting
policies and accounting principles for the measurement of
No material change
derivatives in the reporting period as compared with the
preceding reporting period
The Company conducts foreign exchange derivative transactions for the purpose of avoiding foreign exchange risk arising from fluctuations in the foreign exchange rates
Special opinion issued by the independent directors of RMB, and effectively controlling the uncertainties of costs caused by foreign exchange risk. The Company has established the Business Management Policy Regarding
regarding the Company’s investment in derivatives and Financial Derivative Transactions, to enhance risk management and control over foreign exchange derivative transactions. In addition, the Company only provides
related risk control measures self-owned funds, rather than any offering proceeds, as deposit for derivative transactions. The review, voting and other procedures relating to such transactions have
complied with the Company Law, the AOA and other applicable regulations.
5. Use of offering proceeds
√Applicable □N/A
(1) Description of use of offering proceeds
√ Applicable □ N/A
In RMB0’000
Total amount of
Total amount of Aggregate amount Total amount of offering Aggregate amount of Percentage of Total amount Purpose and
Total offering proceeds
Year of Method of offering proceeds of offering proceeds whose purpose offering proceeds offering proceeds of unused whereabouts of
offering that has remained
offering offering used in the proceeds that has was changed in the whose purpose has whose purpose offering unused offering
proceeds unused for more
reporting period been used reporting period been changed has been changed proceeds proceeds
than two years
Public offering
2020 of convertible 300,000 24,478.69 298,881.41 0 0 0.00% 0 N/A 0
corporate bonds
Total -- 300,000 24,478.69 298,881.41 0 0 0.00% 0 -- 0
Description of use of offering proceeds
Pursuant to the Reply on Approval of Public Offering of Convertible Corporate Bonds by Luxshare Precision Industry Co., Ltd. from the China Securities Regulatory Commission (CSRC), we publicly issued 30000000 convertible
corporate bonds of par value of RMB100.00 each, and raised RMB3000000000.00 in total. After deduction of the underwriter fee and sponsor fee of RMB14,400,000.00 (inclusive of tax) paid to our underwriter, CITIC Securities
Co., Ltd., the total subscription amount received was RMB2985600000.00, and after deduction of legal fee, audit and capital verification fee, credit rating fee, information disclosure and other charges, the net proceeds from this
offering were RMB2984743424.52.
In 2020, we used the offering proceeds of RMB2,744,027,590.66, of which, RMB2,744,027,273.53 was invested in the relevant fund-raising investment projects (RMB2,001,653,153.13 was used to replace to the amount
pre-invested), and RMB317.13 was used to pay the relevant account management fee, service charge and other charges.
In 2021, we used the offering proceeds of RMB 244,786,916.51, of which, RMB244,786,780.12 was invested in the relevant fund-raising investment projects, and RMB136.39 was used to pay the relevant account management fee,
service charge and other charges. The interest generated by the offering proceeds in 2021 is RMB657,387.96. As of December 31, 2021, the balance of the account of offering proceeds was RMB0.00, and the special account for
depositing the offering proceeds was cancelled.
(2) Committed fund-raising investment projects
√ Applicable □ N/A
In RMB0’000
41
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Whether
Whether the Progress of Whether the
Total Total Amount Aggregate amount Date that the Income there’s any
project has investment as of project has
Committed investment project and use of committed investment invested in the already invested as project is ready earned in the significant
been changed the end of the produced
over-raised funds investment amount as reporting of the end of the for its intended reporting change in the
or partially reporting period the desired
amount adjusted (1) period reporting period (2) use period feasibility of
changed (3) =(2)/(1) result
the project
Committed investment project
Smart mobile terminal module production
No 110,000 110,000 24,249.84 110,145.15 100.13% March 1, 2021 84,759.2 N/A No
line upgrading and expansion project
Smart wearable equipment components
production line upgrading and expansion No 60,000 60,000 25.23 60,031.76 100.05% May 1, 2021 33,952.62 Yes No
project
New smart wearable equipment project
with an annual production capacity of 4 No 60,000 60,000 0.04 60,026.58 100.04% August 1, 2020 12,682.33 Yes No
million sets
Replenishment of working capital No 70,000 70,000 203.56 68,677.91 98.11% N/A No
Subtotal - 300,000 300,000 24,478.67 298,881.4 -- - 131,394.15 - -
Use of over-raised funds
N/A
Total - 300,000 300,000 24,478.67 298,881.4 -- -- 131,394.15 - -
Failure to meet the scheduled progress and The smart wearable equipment components production line upgrading and expansion project failed to produce the desired result, primarily due to shortage of critical raw materials,
produce the desired result and reason resulting in a decrease in the operating results. We activelystocked up with the relevant raw materials, so the profit of the project reached 96.62% of the predicted profit in 2021, and
thereof (please describe on a project by 99.14% of the predicted profit in aggregate.
project basis)
Reason of significant change in the None
feasibility of the project
Amount and use of over-raised funds and N/A
progress of use thereof
Change in the place of the fund-raising N/A
investment project
Adjustment of the method of N/A
implementation of the fund-raising
investment project
Funds already invested in the fund-raising Applicable
investment project
We have already invested RMB2001653153.13 of self-raised funds in the projects for which the public offering of convertible corporate bonds was made in 2020 prior to the
completion thereof, as verified by BDO China Shu Lun Pan Certified Public Accountants LLP in its Report Xin Kuai Shi Bao Zi [2020] No. ZB11783 dated December 1, 2020.
42
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Temporary replenishment of working N/A
capital with the unused offering proceeds
Amount of surplus offering proceeds and N/A
reason thereof
Purpose and whereabouts of unused As of December 31, 2021, the balance of the account of offering proceeds was RMB0.00, and the offering proceeds were used in full.
offering proceeds
Problems and other matters existing in the None
use and disclose of offering proceeds
(3) Changes in the fund-raising investment projects
□ Applicable √ N/A
There’s no change in the fund-raising investment projects during the reporting period.
VIII. Sale of material assets and equities
1. Sale of material assets
□ Applicable √ N/A
No material asset has been sold during the reporting period.
2. Sale of material equities
□ Applicable √ N/A
IX. Analysis of major subsidiaries and associates
√ Applicable □ N/A
Major subsidiaries and associates representing more than 10% of the net profit of the Company:
In RMB
Company name Type Main business Registered capital Total assets Net assets Operating revenue Operating profit Net profit
Luxshare Purchase and sale of electronic products, data lines, connection
Precision Subsidiary lines, connectors, computer and peripherals, plastic and hardware USD5,000,000 59,466,332,306.97 5,491,597,678.03 135,508,345,248.07 3,286,048,713.01 3,236,547,298.11
Limited products.
Sales and services in respect of internal and external connection
ICT-LANTO
Subsidiary lines for IT, communication and consumer electronic applications, USD153,290,323 39,670,045,411.95 3,756,939,895.20 33,200,135,705.13 860,084,363.00 729,281,287.52
LIMITED
and precision connectors.
Rikai Precision subsidiary Technology development, technical consulting and technical RMB6,264,312,296 32,118,051,618.12 10,996,563,441.13 49,727,123,010.93 1,255,106,809.05 1,092,231,638.01
43
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Technology services in respect of computer accessories; design, R&D and
(Yancheng) Co., production of precision stamping molds (precision ≥ 0.02mm),
Ltd. precision cavity molds (precision ≥ 0.05mm), metal product molds,
non-metal product molds and standard parts for molds; production
of high-temperature resistant molded insulating materials, stamped
hardware parts, rivets, shafts, mechanical components and other
components for 3C electronics products; industrial design, product
design (exterior design, structural design, circuit design, graphic
design, etc.); lease of own idle equipment; wholesale, commission
agency (except auction), import, export and supporting services in
respect of the aforesaid products and related components. Business
not subject to licensing: manufacturing of computer software,
hardware and peripherals.
Computer peripherals, connection lines and connectors; new-type
electronic components (electronic devices), instruments and
accessories for communication and IT purpose, plastic, rubber and
hardware products; research, development, production and sale of
special electronic equipment, testing instruments, tools, molds,
remote control dynamic models and related supplies and
components; production and sale of power supply units and
wireless transmission products; development of software; import
and export of goods and technology (except any business that is
Lanto
subject to licensing, restricted or prohibited pursuant to the
Electronic Subsidiary RMB2320000000 18,989,845,478.63 7,396,344,211.40 24,850,269,766.84 1,530,454,712.74 1,374,091,215.23
applicable laws and administrative regulations) (any business
Limited
subject to approval according to law may only be operated with the
approval of the competent authorities). Business not subject to
licensing: manufacturing of automotive components and
accessories; research and development of automotive components;
wholesale of automotive components and accessories; sale of
mechanical components and components; manufacturing of
opto-electronic components; sale of opto-electronic components;
research and development of special electronic materials; research
and development of household appliances.
44
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Subsidiaries acquired and disposed of during the reporting period:
√ Applicable □ N/A
Effect on the production, operation and
Company name Method of acquisition or disposal
results of the Company taken as a whole
No significant effect on the production,
Rugao Luxshare Business Management Service
Newly established operation and results of the Company
Partnership (LP)
taken as a whole
No significant effect on the production,
Luxis Technology Limited Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare Precision Industry (Yancheng) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxis Technology (Kunshan) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare Electronic Technology (Enshi) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Lianxun Smart Equipment (Rugao) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare Technology (Xi’an) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxis Precision Intelligent Manufacturing
Newly established operation and results of the Company
(Kunshan) Co., Ltd.
taken as a whole
No significant effect on the production,
Liding Electronic Technology (Dongguan) Co.,
Newly established operation and results of the Company
Ltd.
taken as a whole
No significant effect on the production,
Luxshare Smart Manufacturing & Electronic
Newly established operation and results of the Company
Service (Kunshan) Co., Ltd.
taken as a whole
No significant effect on the production,
Luxshare Investment Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Yancheng Luxshare Business Management
Newly established operation and results of the Company
Service Partnership (LP)
taken as a whole
No significant effect on the production,
Luxshare Technology (Nanjing) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare Smart Equipment (Yancheng) Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Changzhi Luxshare Precision Industry Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Hangzhou Xuntao Technology Co., Ltd. Newly established operation and results of the Company
taken as a whole
No significant effect on the production,
Henan Leader Precision Industry Co., Ltd. Newly established operation and results of the Company
taken as a whole
CALDIGIT HOLDING LIMITED Controlled No significant effect on the production,
45
Luxshare Precision Industry Co., Ltd. Annual Report 2021
operation and results of the Company
taken as a whole
No significant effect on the production,
Taihan Precision Technology Co., Ltd. Controlled operation and results of the Company
taken as a whole
No significant effect on the production,
Capital injection and acquisition of
Rikai Precision Technology (Yancheng) Co., Ltd. operation and results of the Company
control
taken as a whole
No significant effect on the production,
Zhejiang Puson Electronic Technology Co., Ltd. Purchase of shares operation and results of the Company
taken as a whole
No significant effect on the production,
Caseteck Singapore PTE. LTD. Purchase of shares operation and results of the Company
taken as a whole
No significant effect on the production,
Ji’an Jizhou Luxshare Electronics Co., Ltd. Deregistered operation and results of the Company
taken as a whole
No significant effect on the production,
Speedtech (LS-ICT) Co., Ltd. Deregistered operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare-ICT International B.V. Deregistered operation and results of the Company
taken as a whole
No significant effect on the production,
Luxshare International Cable Co., Ltd. Deregistered operation and results of the Company
taken as a whole
No significant effect on the production,
Wuxi Huihong Electronics Co., Ltd. Sale of shares operation and results of the Company
taken as a whole
Particulars of major controlled subsidiaries and associates:
N/A
X. Structured entities controlled by the Company
□ Applicable √ N/A
XI. Prospects for future development of the Company
1. Situations of the industry
In recent years, despite certain fluctuations, the global smart mobile phone market size has been growing generally. According
to IDC, the global smart phone shipments reached 1.35 units in 2021, representing an increase of 7% year on year. After the arrival
of the 5G era, the CAGR of the global smart mobile phone market is expected to reach 3.6% from 2020 to 2025. The application of
new-generation communication technologies will further drive the market demands for mobile phones, give rise to competitions over
diversified functions and upgraded performance on the existing market for mobile phones, and accelerate the upgrading of precision
electronic components and assemblies, resulting in an increase in the market size of precision electronic components and assemblies,
and product variety. The advancement of 5G and AI technologies will promote the development of different kinds of smart mobile,
smart wearable, AR/VR/MR, smart home, smart display and other IoT devices. Driven by the IoT ecosystem and market trends and
call for green and environment friendly sustainable development, the terminal products having smart interconnect, health check,
environment friendly and other functions will deeply affect people’s habits and customs, and be widely accepted by consumers of all
ages. The acceleration of upgrading of terminal products will drive the increase in the integration level of electronic components
contained therein and improvement of technological level. The one-stop solution providers that are able to provide the brand
customers with better production processes and higher integration level and require the input of less resources will get more orders
for related components and finished products. Our business development and industrial operation are expected to fully benefit from
this trend.
In the field of communication and data center, the series of technical innovation and emerging of new technologies promote the
46
Luxshare Precision Industry Co., Ltd. Annual Report 2021
evolution from traditional IT infrastructure to data infrastructure, and along with the continuous development of the Internet,
e-commerce, video, cloud computing and other Internet vertical industries have been rapidly springing up, and the global data center
market has come into multiple periods of rapid growth. Driven by 5G, big data and edge computing technologies, the ICT industry
puts forward higher requirements for data transmission, hardware equipment shows a tendency towards gradual opening of interfaces
and high integration of functions, and interconnect components show a tendency towards high speed, high density, high reliability
and low loss. In the technology evolution from 4G to 5G, base stations tend to have more ports and more wave numbers. Small size
and weather resistance put forward increasingly high requirements for precision manufacturing. Compared with manufacturers of
traditional communication products, we will leverage our rich experience in precision manufacturing of consumer electronic products
in the new communication business, and are expected to get more and better business opportunities. The communication interconnect
market is witnessing rapid upgrading of products, and enters an era of tremendous data. Along with the sharp increase in data volume,
the demands for interconnect products for data processing will grow sharply.
The development of 5G communication technology, automotive wireless communication technology, AI and other
new-generation information technologies and ever increasing demands of consumers for automotive safety and entertainment during
ride, among others, will promote the continuous increase in the electrification level of vehicles, resulting in further extension of
application scenarios for automotive electronics, and increase in penetration rate, which will be beneficial for the continuous and
rapid development of the industry of automotive electronics. As the future development direction of vehicles, new energy vehicles
enjoy the support of national policies, their market size grows steadily and the penetration of electric vehicles increases continuously.
China has the largest automotive market with the highest level of openness and inclusion and most consumers in the world, utilizes
the most advanced smart vehicle technologies and attracts all major carmakers in the world. China ranks among the first in the world
in terms of number of smart vehicle brands and models. The existence of a variety of players on the automotive market will promote
the industry to make innovations, and bring more opportunities and challenges to component manufacturers. We have built a
complete development framework covering components, modules, sub-systems and whole systems, and made complete deployments
for core products.
2. Future growth strategy
On the basis of our core management’s forward-looking plans in respect of market, products and customers, and through our
employees’ unremitting efforts to work conscientiously, fulfill all tasks and make innovations, we have made diversified, integrated
and coordinated strategic deployments in the fields of consumer electronics, communication and automotive. In light of the new
market situations, we clearly know that opportunities coexist with challenges, and will keep investing in the future, and give full play
to our strong core competencies and advantages in various areas, to provide more core value for the industry and our customers.
In the next few years, the consumer electronics business will continue to occupy an important position in the Company. We will
continue to implement and deepen the concept of vertical integration from components, modules to system, and strive to change the
traditional supply ideas and approaches, restructure the supply chain and maximize the synergistic effect, to continue to improve our
capability to create value for our customers and seek sustainable development. Meanwhile, with respect to certain core modules and
processes, we will follow the strategic principle of “old products, new customers and new market”, strive to extend and deepen the
application of products, and increase their shares on different markets and among different customers, to further improve our ability
to prevent operating risks. In light of the general economic development trend of enhancing internal and external circulations, and the
general background that huge demands for consumer electronic products will be stimulated, the smart consumer electronic products
that change life with technology will grow vigorously. Our products include smart wearable, smart home, smart display, etc. We have
strong comprehensive capabilities in respect of core components and system assembly for complete units, and have made full
preparations for new products/businesses. In the field of AR/VR/MR, we will make complete and in-depth product deployment,
leverage our remarkable advantages in production process, lean production, automation and other areas, and strive to make good
achievements in the new area. In the field of communication interconnect, by focusing on technology development and combining
the efforts of enterprises, universities and research institutes, we are leading the way in certain market segments in the world. In the
context of the “Eastern Data, Western Computing” project, we will actively exploit all-round and multi-level development
opportunities. In the future, we will adhere to the strategic principle of integrating “application, development and early research”,
closely follow the market trends and frontier technologies, and strive to make all-round breakthroughs on more market segments.
With respect to the radio frequency communication business, we will focus on the strategic plan of “core components + modules +
system”, make continuous investments in design and R&D, improve the capability to produce core components on our own, and
improve our internal operation efficiency in lean production, supply chain management and other areas through transformation and
upgrading towards digitalization. Facing the business opportunities brought by “electrification”, “intelligentization” and
“interconnection” of vehicles to Chinese automotive companies, we have established clear strategic objectives, that is, to focus on the
tier-1 core component market. In the waves of electrification of automotive consumption, the stable supply pattern in the past will be
broken, and comprehensive manufacturers that have rich experience in both the fields of consumer electronics and automotive will
get more business opportunities. In the next few years, we will continue to apply our experience of precision manufacturing in the
field of consumer electronics and communication and our capability to develop communication-level high speed transmission
solutions to the automotive business, and give full play to our advantages. Meanwhile, we will continuously improve our tier-1
47
Luxshare Precision Industry Co., Ltd. Annual Report 2021
capabilities on the basis of our joint venture vehicle ODM platform, and embrace the new challenges and new opportunities brought
by the flourishing era of smart EV.
3. Business plan for the next year
In 2021, though we faced all sorts of challenges from the internal and external environment, we always stood in awe of market
opportunities. We worked hard to fulfill all tasks and overcome all kinds of difficulties, while accomplishing the objectives
established at the beginning of the year, and developed the business plan for the next year,
In 2022, we will continue to exploit our main business, and firmly implement the established business plans. While seeking new
opportunities in respect of component, module and system solutions on the consumer electronics, smart mobile, smart wearable and
other IoT markets, such as display modules for smart mobile terminals, rear cover modules for smart mobile terminals, voice coil
motors, RF front modules, AR/VR/MR, we will focus on the development of automotive, communication, industrial, energy,
healthcare and other new markets, new materials, new processes, new applications and new technologies. With respect to entities and
businesses newly acquired or incubated, we will fully leverage our strengths and give support in customer resources, supply chain
resources, lean production, automation, digitalization, intelligentization, etc., in order to achieve the strategic objectives of rapid
cultivation and benefit amplification. With respect to the automotive business, we will continue to cooperate with our domestic and
foreign brand customers in the development of components, and on the basis of automotive “nervous” system, further expand the
lines of connectors (high-voltage, low-voltage and high-speed connectors, Busbar, etc.), new energy (PDUs, BDUs, inverters, energy
storage, etc.), smart cabin (domain controllers, infotainment system, multi-media instrument panels, etc.), smart interconnect (RSUs,
TCUs, etc.), and other products. Meanwhile, in reliance on the vehicle ODM platform jointly established with Chery that provides
our core automotive component business with a frontier R&D, design and mass production platform and access to the overseas
market, we will vigorously develop our tier-1 business. Our superior products will have an opportunity to grow from 0 to 1 through
the incremental business provided by other brand customers of this ODM platform and Chery, and we will leverage our advantages
to take part in the competition, to have our tier-1 products pass validation by the brand customers. Our medium-to-long term goal is
to grow into a tier-1 manufacturer in the global automotive component industry in the next three to five years. With respect to the
communication business, we always regard the technical capabilities as the foundation for our business development. We will drive
the growth of electric connection, optical connection, RF communication, thermal management and other existing core component
products by leveraging our technologies and strong precision manufacturing capability, and through vertical integration, make further
deployments in the server and other whole unit assembly business, center on the “complete unit + core components” double
development strategy, and strive to grow into a comprehensive solution provider offering all kinds of products in the field of data and
communication. In 2022, while seeking business development, we will work harder to improve our operation and management
capabilities, further enhance our platforms to ensure that they meet the development requirements of the relevant business segments,
and incorporate digital management in all links in operation. With respect to organization management, cadre management and
performance incentives, we will continue to explore the ways to upgrade and optimize the current management modes, through
continuous improvement of mechanisms, effectively arouse the initiative of cadres, and pool the wisdom and efforts of everyone, to
give full play to the organizational effectiveness.
4. Capital required for future development strategy and capital utilization plan
As of December 31, 2021, our equity-debt ratio was 62.03%. In 2022, our business is expected to maintain rapid growth, and the
exploitation of new markets and entry of production of new projects require enormous capital. Therefore, we published the financing
plan by private offering of shares in February 2022, in order to support our sustainable development in the diversified field of
consumer electronics and automotive in the next few years. Along with the improvement of our position in the industry and
stabilization of our relationship with customers, we have obtained certain competitive advantages. We will continue to strictly control
capital expenditures in each project, regularly analyze and review the return on investment in each capital expenditure project, and
continue to improve our management of accounts receivable, inventories and other areas, to maximize the efficiency of capital
utilization. We will consider all available sources of financing at different periods according to the requirements of our development
strategy, to create more value for our shareholders.
5. Future risks
(1) Risk of fluctuation of macro economy
The numerous uncertainties existing in the domestic and foreign macro environment at present, such as the spread of the
epidemic situation throughout the world, the trade frictions between China and the United States, complicated and grave global
political situation, worsening geopolitical situation and extensive geopolitical struggles, might result in slowdown of global economy,
and affect people’s income, purchasing power and willingness to spend. If the uncertainties of the macro environment continue for a
long time, the industry will be impacted and face certain challenges.
(2) Risk of foreign exchange rate
At present, our revenue from the overseas market constitutes a large proportion in our total operating revenue, and our overseas
48
Luxshare Precision Industry Co., Ltd. Annual Report 2021
transactions are mainly settled in US Dollars. Our sales on the overseas market totaled RMB57465383800, RMB85046280900
and RMB143,452,850,200 in 2019, 2020 and 2021, representing 91.92%, 91.94% and 93.18% of our revenue from main business
respectively. Because China implements the managed floating rate system, the foreign exchange rates fluctuate along with the
changes in domestic and foreign political and economic environment. If the foreign exchange rates fluctuate greatly, the exchange
gains or losses may affect our operating results. In order to reduce the uncertainties caused by fluctuations of foreign exchange rates
on our operating results, we will strive to keep abreast of the movement of foreign exchange rates, strictly control the proportion of
foreign currency denominated assets in our net assets, and through foreign exchange derivative transactions, reduce the effect of the
fluctuation of foreign exchange rates.
(3) Management risk
We have been growing rapidly in recent years, and continuously expanded our business in consumer electronics, communication,
automotive and other fields. We have a great number of operating entities which are relatively decentralized. Due to the impact of the
trade frictions between China and the United States and spread of the epidemic situation throughout the world, our customers will put
forward increasingly high requirements for the international deployment of our production capacity, which will in turn put forward
higher requirements for our operation and management capabilities and pool of outstanding talents. If our management level cannot
satisfy the requirements of the rapid growth of our scale of operation, we may face certain management risks.
(4) Risk of relative concentration of customers
We attach great importance to maintaining long-term and stable cooperation relationships with our major customers. At present,
our customers are relatively concentrated, most of whom are engaged in consumer electronics. Though they are first-class customers
in the industry, have strong and leading competencies on the market, and have maintained years of stable cooperation relationship
with us, if any major customer falls into serious difficulties in its operation, we may face certain operating risk.
In view of these risks, we will adopt sound risk management concept, establish effective risk management mechanisms, and
continuously improve our risk management policies, to promote our sustainable healthy development.
XII. Investigation, research, communication, interview and other activities
√ Applicable □ N/A
Main topic of Particulars of the
Method of discussion and investigation and
Date Place Type of guest Guest
communication information research activity
provided available at
Refer to Luxshare-ICT
Company
(stock code: 002475)
meeting room at
Explanation Information about
No. 313 Beihuan
Communication Institutional about our Investigation and
April 28, 2021 Road, Qingxi Institution
by telephone investors operating results Research Activity
Town,
in 2020 (20210430) published
Dongguan,
on www.cninfo.com.cn
Guangdong
on April 30, 2021
Company
Introduction Refer to the Record of
meeting room at
about our Investor Relations
No. 313 Beihuan
Communication Institutional general situation Activity dated April 30,
April 30, 2021 Road, Qingxi Institution
by telephone investors and future 2021 published on
Town,
development www.cninfo.com.cn on
Dongguan,
plans May 6, 2021
Guangdong
Company
Introduction Refer to the Record of
meeting room at
about our Investor Relations
No. 313 Beihuan
Communication Institutional strategic Activity dated May 18,
May 18, 2020 Road, Qingxi Institution
by telephone investors deployments and 2021 published on
Town,
related www.cninfo.com.cn on
Dongguan,
businesses May 19, 2021
Guangdong
Company Communication Institutional Introduction Refer to the Record of
August 25, 2020 Institution
meeting room at by telephone investors about our Investor Relations
49
Luxshare Precision Industry Co., Ltd. Annual Report 2021
No. 313 Beihuan operating results Activity dated August
Road, Qingxi in the first half 25, 2021 published on
Town, of 2021 and www.cninfo.com.cn on
Dongguan, general situation August 26, 2021
Guangdong
50
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section IV Corporate Governance
I. Basic Introduction
We have always been committed to promoting the establishment and improvement of a modern corporate system, regulating the
operation of the listed company and improving the corporate governance structure. During the reporting period, we kept on
improving our corporate governance structure, established and improved rules and regulations, regulated corporate operations,
strengthened information disclosure, actively conducted investor relations management and improved corporate governance level in
strict accordance with the requirements of the Company Law, the Securities Law, the Rules Governing the Listing of Stocks on the
Shenzhen Stock Exchange, the Guidelines for Articles of Association of Listed Companies, the Code of Corporate Governance for
Listed Companies, the Guide on Self-regulatory Supervision for Companies Listed on the Shenzhen Stock Exchange No. 1 – Code of
Operations for Companies Listed on the Main Board and other applicable laws, regulations and normative documents.
(I) Shareholders and shareholders’ meeting: We perform the procedures for convening, holding and voting at shareholders’
meetings in strict accordance with the Company Law, the AOA, the Rules of Procedure of the Shareholders’ Meeting and other
relevant provisions and requirements, and treat all shareholders fairly. We permit shareholders to elect to vote in person or on line at
our shareholders’ meetings, so as to enable minority shareholders to fully exercise their voting rights. When a shareholders’ meeting
considers any related-party transaction, we require the interested shareholders to abstain from voting, and ensure that such
related-party transaction is conducted on an arm’s length basis without prejudice to the interests of shareholders. When a
shareholders’ meeting considers any material matter that affects the interests of minority shareholders, the votes cast by them are
counted separately. All shareholders’ meetings are convened and held by our Board of Directors in the presence of lawyers.
(II) Relationship with the controlling shareholder: We are independent of our controlling shareholder in operation, assets,
personnel, organization and finance, and each of our Board of Directors, Board of Supervisors and other internal bodies operates
independently. Our controlling shareholder is strict with itself and has not directly or indirectly interfered with our decision-making
and business activities without the authorization of the shareholders’ meeting, or occupied our funds for non-operating purpose.
(III) Directors and Board of Directors: We elect directors and engage independent directors in strict accordance with the relevant
procedures set forth in the Company Law and the AOA. We now have seven directors, including three independent directors, who are
experts in law, accounting and other areas. The number of members and composition of our Board of Directors comply with the
requirements of the applicable laws and regulations and the AOA. Our Board of Directors has four committees, including Audit
Committee, Strategy Committee, Nomination Committee and Compensation and Performance Appraisal Committee, each of which
has a reasonable member structure, and provides scientific and professional opinions and references for the decision-making of the
Board of Directors. Our Board of Directors has convened and held meetings, and implemented the resolutions of the shareholders’
meeting in strict accordance with the AOA and the Rules of Procedure of the Board of Directors. All directors have performed their
duties diligently, and seriously attended the meetings of the Board of Directors and shareholders, and safeguarded the legitimate
rights and interests of the Company and the shareholders.
(IV) Supervisors and Board of Supervisors: Our Board of Supervisors has elected supervisors in strict accordance with the
relevant procedures set forth in the Company Law and the AOA. We now have three supervisors, including one chairman. The
number of members and composition of our Board of Supervisors comply with the requirements of the applicable laws and
regulations and the AOA. Our Board of Supervisors has convened and held meetings in strict with the AOA and the Rules of
Procedure of the Board of Supervisors. All supervisors have seriously performed their duties, effectively supervised and expressed
independent opinions on our financial affairs and the legality and regulatory compliance of the performance of duties by our directors
and executives in good faith and diligently, and safeguarded the legitimate rights and interests of the Company and the shareholders.
(V) Performance appraisal and incentive and restraint mechanisms: In order to establish sound incentive mechanisms, and
enhance the concept of joint sustainable development of the Company and the management and key employees, we have
implemented the share incentive plans to enhance the benefit sharing and restrain mechanisms between shareholders and key
business personnel, maintain the stability of the management team and key business personnel, ensure the achievement of our
development strategy and business objectives, and seek long-term stable development. The appointment of our executives is open
and transparent, and complies with the applicable laws and regulations.
(VI) Stakeholders: We fully respect the legitimate rights and interests of stakeholders, and strive to coordinate and balance the
interests of society, shareholders, the Company, employees and other stakeholders, and jointly promote our sustained and steady
development.
(VII) Information disclosure and transparency: We have performed our information disclosure obligations truthfully, accurately,
timely and completely in strict accordance with the applicable laws and regulations and our Information Disclosure Management
Measures, and designated the Securities Times and www.cninfo.com.cn as the media for us to disclose information. We have kept
51
Luxshare Precision Industry Co., Ltd. Annual Report 2021
non-public information in strict confidence, seriously registered and reported the insiders pursuant to our Insider Management Policy,
established the filing policy for insiders, and timely submitted the same to the competent regulatory authorities for the record in
accordance with the relevant provisions. We also strictly regulate the reporting of our information to external information users.
When receiving specific visitors, we receive them in strict accordance with the relevant requirements, require each of them to sign a
Letter of Commitment, and timely disclose the relevant record of investigation and research activity on the e-interaction platform of
the Shenzhen Stock Exchange. During the reporting period, we did not take advantage of any inside information to trade our shares.
We have set up hotlines for investors and investor relations management section, and designated special persons responsible for
timely communication with investors. In addition, we take the initiative to timely contact and communicate with, and report relevant
matters to, the competent regulatory authorities, in order to accurately understand the relevant regulatory requirements for
information disclosure and further improve the transparency and quality of our information disclosure. We have disclosed
information in a true, accurate, complete and timely manner in strict accordance with the requirements for substance and form, to
ensure that all shareholders have access to our information through different channels.
Is there any significant difference between the actual circumstance of corporate governance of the Company and the requirements of
the applicable laws, administrative regulations and the provisions of the CSRC regarding corporate governance of the listed
companies?
□ Yes √ No
There isn’t any significant difference between the actual circumstance of our corporate governance and the requirements of the
applicable laws, administrative regulations and the provisions of the CSRC regarding corporate governance of the listed companies.
II. The Company’s independence of its controlling shareholder and actual controller in assets,
personnel, finance, organization and operation
During the reporting period, we operated in strict compliance with the Company Law and the AOA, gradually improved our
corporate governance structure, were independent of our controlling shareholder in assets, personnel, finance, organization and
operation, had our own independent and complete business, were independent in management, and had independent R&D,
production and sales systems. During the reporting period, our production and operation were stable, and we had sound internal
bodies and were able to operate independently in compliance with the applicable regulations.
(I) Integrity of assets
We are a company limited by shares established through an overall change in organization form according to law, and have our
own independent and complete assets. We have performed the relevant procedures for changes in assets and shareholding according
to law. We have not provided any guarantee for the obligations of shareholders on the security of our assets or credit, or lent any loan
or credit line granted to us to any shareholder. We have full control over all of our assets, and none of our assets or funds is occupied
by our controlling shareholder to the detriment of our interest.
(II) Independence in personnel
Our directors, supervisors and executives have been legally appointed in accordance with the Company Law, the AOA and other
applicable laws, rules and regulations. All of our executives (except independent directors) exclusively work in and receive
remunerations form the Company, and do not hold any post (other than director and supervisor) concurrently in any affiliate of
shareholders or any entity engaging in any business same as or similar to our business. We are independent in employees, manage
their remunerations, social security and other affairs independently, and have sound personnel management policies and system in
place.
(III) Independence in finance
We have independent financial accounting department and internal audit department, and independent accounting system and
financial management policies in place that comply with the applicable regulations, and make financial decisions independently.
Since our establishment, we have opened separate bank accounts, filed tax returns and paid taxes independently according to law, and
executed external contracts independently, and had not shared any bank account or paid any tax in combination with any shareholder.
(IV) Independence in organization
We have established a sound governance structure composed of the shareholders’ meeting, the Board of Directors and the Board
of Supervisors, and independent and complete operation and management bodies that meet our development requirements and
conform to our actual situations, each of which performs its powers and functions independently in accordance with the AOA and
our internal management system. Since our establishment, our production, operation and offices have been totally independent of our
shareholders.
52
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(V) Independence in operation
We have complete corporate property rights and independent R&D, production and sales systems, carry out business
independently, keep separate accounts, and make decisions and assume liabilities and risks independently, and do not rely on any
shareholder or other affiliate in our production and operation activities.
III. Horizontal Competition
□ Applicable √ N/A
IV. Annual and extraordinary shareholders’ meetings held during the reporting period
1. Shareholders’ meetings held during the reporting period
Parentage of
Resolution of the
Session Type of meeting investors attending Date of meeting Date of disclosure
meeting
the meeting
2020 Work Report of the
Board of Directors and
2020 annual other 12 proposals were
Annual shareholders’
shareholders’ 43.58% May 18, 2021 May 19, 2021 approved by vote, as
meeting
meeting disclosed in our
Announcement No.
2021-056.
Proposal for Applying for
Offering Super
Short-term Commercial
First extraordinary Extraordinary
Papers and other 4
shareholders’ shareholders’ 46.41% October 25, 2021 October 26, 2021
proposals were approved
meeting in 2021 meeting
by vote, as disclosed in
our Announcement No.
2021-090.
2. Extraordinary shareholders’ meetings convened on the requisition of holders of preferred shares whose
voting rights have been restituted
□ Applicable √ N/A
53
Luxshare Precision Industry Co., Ltd. Annual Report 2021
V. Directors, supervisors and executives
1. Particulars
No. of No. of Changes in
Cause of
Beginning End date additional shares the number
Beginning Ending increase or
date of the of the shares disposed of of shares
Name Title Status Sex Age balance of balance of decrease in
term of term of acquired in in the held due to
shares held shares held the number
office office the reporting reporting other
of shares held
period period reasons
Chairman of the
Board of Directors February May 18,
WANG Laichun Incumbent Female 55
& General 22, 2009 2024
Manager
Liquidation
of shares to
Vice Chairman of
February May 18, satisfy
WANG Laisheng the Board of Incumbent Male 58 6,970,267 1,742,567 5,227,700
Directors 22, 2009 2024 personal
capital
demands
Additional
shares
acquired as a
Director & Deputy May 21, May 18,
WANG Tao Incumbent Male 37 0 96,022 96,022 result of
General Manager 2021 2024
exercise of
incentive
share options
Director and
May 21, May 18,
LI Wei Deputy General Incumbent Male 42
Manager 2021 2024
Independent May 22, May 18,
ZHANG Ying Incumbent Female 59
director 2018 2024
Independent May 18, May 18,
LIU Zhonghua Incumbent Male 57
director 2021 2024
Independent May 18, May 18,
SONG Yuhong Incumbent Female 51
director 2021 2024
Chairman of the December May 18,
XIA Yanrong Incumbent Female 41
Board of 19, 2017 2024
54
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Supervisors
May 22, May 18,
MO Rongying Supervisor Incumbent Female 42
2018 2024
February May 18,
YI Peizan Supervisor Incumbent Female 37
22, 2009 2024
Board Secretary &
May 25, May 21,
HUANG Dawei Deputy General Incumbent Male 50 439,390 439,390
Manager 2018 2024
Additional
shares
acquired as a
April 15, May 21,
WU Tiansong CFO Incumbent Male 52 365,034 300,809 665,843 result of
2019 2024
exercise of
incentive
share options
Additional
shares
acquired as a
Director & Deputy April 18, May 21,
LI Bin Retired Male 45 2,095,552 1,216,773 3,312,325 result of
General Manager 2012 2021
exercise of
incentive
share options
Additional
shares
acquired as a
Director & Deputy November May 21,
YE Yiling Retired Female 51 776,705 177,880 954,585 result of
General Manager 3, 2011 2021
exercise of
incentive
share options
Independent May 6, May 21,
XU Huaibin Retired Male 65
director 2015 2021
Independent May 6, May 21,
LIN Yifei Retired Male 47
director 2015 2021
Total -- -- -- -- -- -- 10,646,948 1,791,484 1,742,567 10,695,865 --
55
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Whether any director or supervisor retired or any executive was removed during the reporting period?
□ Yes √ No
Changes in directors, supervisors and executives:
√ Applicable □ N/A
Name Title Type Date Reason
Retired upon expiration
LI Bin Director May 18, 2021 Re-elected of the Board of Directors
of term of office
Retired upon expiration
YE Yiling Director May 18, 2021 Re-elected of the Board of Directors
of term of office
Retired upon expiration
XU Huaibin Independent Director May 18, 2021 Re-elected of the Board of Directors
of term of office
Retired upon expiration
LIN Yifei Independent Director May 18, 2021 Re-elected of the Board of Directors
of term of office
Deputy General Retired upon expiration
LI Bin May 21, 2021 Re-elected of the Board of Directors
Manager of term of office
Deputy General Retired upon expiration
YE Yiling May 21, 2021 Re-elected of the Board of Directors
Manager of term of office
WANG Tao Director Elected May 18, 2021 Re-elected of the Board of Directors
LI Wei Director Elected May 18, 2021 Re-elected of the Board of Directors
LIU Zhonghua Independent Director Elected May 18, 2021 Re-elected of the Board of Directors
SONG Yuhong Independent Director Elected May 18, 2021 Re-elected of the Board of Directors
Deputy General
WANG Tao Appointed May 21, 2021 Re-elected of the Board of Directors
Manager
Deputy General
LI Wei appointed May 21, 2021 Re-elected of the Board of Directors
Manager
2. Positions held
Professional background and main work experience of our current directors, supervisors and executives and main positions held by
them in the Company:
(I) Directors
Ms. WANG Laichun, 55 years old, resident of Hong Kong, China; EMBA, Shenzhen Graduate School of Tsinghua University;
is now our Chairman of the Board of Directors and General Manager; former Director of the Shenzhen High-tech Industry
Association and Vice Chairman of the Shenzhen Electronics Industry Association. Ms. WANG Laichun worked in the Wiring
Business Unit of Foxconn, a subsidiary of Hon Hai Group, for nearly ten years since 1988, and left Foxconn in 1997 to start her own
business. In 1999, Ms. WANG Laichun and Mr. WANG Laisheng jointly purchased the shares of Luxshare Limited. In 2004, she
founded Luxshare Precision Industry (Shenzhen) Co., Ltd. through Luxshare Limited and acted as its Chairman of the Board of
Directors. Ms. WANG Laichun is the Chairman of our 1st, 2nd, 3rd, 4th and 5th Board of Directors.
Mr. WANG Laisheng, 58 years old, resident of Hong Kong, China; is now our Vice Chairman of the Board of Directors; former
Executive Director of the Shenzhen Quality Association and Director of the Guangdong Laboratory Federation. Mr. WANG
Laisheng was engaged in individual business since mid-1980s. Mr. WANG Laisheng and Ms. WANG Laichun jointly purchased the
shares of Luxshare Limited in 1999 and founded Luxshare Precision Industry (Shenzhen) Co., Ltd. in 2004. Mr. WANG Laisheng is
the Vice Chairman of our 1st, 2nd, 3rd, 4th and 5th Board of Directors.
Mr. LI Wei, 42 years old, Chinese nationality, undergraduate; is now chief of our Precision Component Business Unit. Mr. LI
Wei has nearly 20 years’ experience in precision manufacturing and has been engaged in product design, validation and quality
management in many precision manufacturing companies. He joined Luxshare-ICT in July 2019, responsible for the operation and
management of the Corporate Business Division.
Mr. WANG Tao, 37 years old, Chinese nationality, undergraduate from the Southeast University; is now chief of our Acoustic
Business Unit. Mr. WANG Tao has rich experience in precision manufacturing of components. He joined Luxshare-ICT in April
2009, responsible for product development and management.
Ms. ZHANG Ying, 59 years old, Chinese nationality; Doctor of Laws, Wuhan University; postdoctoral fellowship in law,
Chinese Academy of Social Sciences; associate professor of the Shenzhen University Law School. Ms. ZHANG Ying joined the
China University of Geosciences in 1984 as a lecturer, and the Institute of Political Science and Law, Wuhan Academy of Social
Sciences in 1994 as an assistant researcher, and has acted as the Executive Director of the China European Law Research Association
56
Luxshare Precision Industry Co., Ltd. Annual Report 2021
since 2009. Ms. ZHANG Ying has obtained the qualification as an independent director from the Shenzhen Stock Exchange, and is
an Independent Director of our 4th and 5th Board of Directors.
Mr. LIU Zhonghua, 57 years old, Chinese nationality, without foreign permanent residence, master, professor of accounting; is
now professor and tutor of postgraduates of the Guangdong University of Foreign Studies School of Accounting, Director of the
Accounting Society of China, Vice Chairman of the Accounting Society for Foreign Economic Relations & Trade of China,
Executive Vice Chairman of the Guangdong Association of Management Accountants, and Executive Director of the Accounting
Society of Guangdong. Mr. LIU Zhonghua has obtained the qualification as an independent director from the Shenzhen Stock
Exchange, and is an Independent Director of Guangdong Provincial Expressway Development Co., Ltd., GEM Co., Ltd. and SGIS
Songshan Co., Ltd.
Ms. SONG Yuhong, 51 years old, Chinese nationality; Master of Laws, Wuhan University; Bachelor of Laws, Southwest
University of Political Science & Law; MBA, Grandes coles de Commerce; is now partner of DeHeng Law Offices (Shenzhen),
and mediator of the International Commercial Mediation Center for Belt and Road Initiative – Luohu Court of Shenzhen Mediation
Center. Ms. SONG Yuhong has obtained the qualification as an independent director from the Shenzhen Stock Exchange, and is an
Independent Director of our 5th Board of Directors.
(II) Supervisors
Ms. XIA Yanrong, 41 years old, Chinese nationality, undergraduate majoring in financial management, is now our supervisor.
Ms. XIA Yanrong worked at the Finance Department of 3CEMS Group Prime Technology (Guangzhou) Co., Ltd. from January 2003
to April 2006, and the Finance Department of Dachang Electronic Technology (Suzhou) Co., Ltd., a subsidiary of P-TWO, from
April 2006 to April 2009, and joined us since April 2009, and served as chief of the Finance Department at Kunshan Lanto, and chief
of the Finance Department and chief of the Credit Management Department at Luxshare-ICT, and is now Director of our Central
Finance Department and Credit Management Department. Ms. XIA Yanrong is a member of our 4th and 5th Board of Supervisors.
Ms. MO Rongying, 42 years old, Chinese nationality, majoring in business administration, is now our supervisor. She was chief
of the Planning Department at Thomson Multimedia (Dongguan) Co., Ltd., before joining us in June 2007 as chief of the Central
Customs Affairs Department. Ms. MO Rongying is a member of our 4th and 5th Board of Supervisors.
Ms. YI Peizan, 37 years old, Chinese nationality, joined our Finance Department in 2004, is now our supervisor. Ms. YI Peizan
is a member of our 1st, 2nd, 3rd, 4th and 5th Board of Supervisors.
(III) Executives
Ms. WANG Laichun, whose resume is set out in “Directors” above.
Mr. WANG Tao, whose resume is set out in “Directors” above.
Mr. LI Wei, whose resume is set out in “Directors” above.
Mr. HUANG Dawei, 50 years old, citizen of Chinese Taiwan, graduated from the National Tsing Hua University Institute of
Industrial Engineering, Master of Industrial Engineering, is now our Deputy General Manager and Board Secretary. Mr. HUANG
Dawei worked in a Fortune 500 company, responsible for market development and operation management, before joining Luxshare
Electronic Kunshan as the legal representative, director and General Manager in June 2013. Mr. HUANG obtained a Qualification
Certificate for Board Secretary from the Shenzhen Stock Exchange in October 2017, and meets the qualifications required in the
Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange and other applicable laws and regulations and the AOA.
Mr. WU Tiansong, 52 years old, citizen of Chinese Taiwan, received a bachelor’s degree from the National Taiwan University
of Science and Technology, is now chief of the Finance Department at Luxshare-ICT. Mr. WU Tiansong served as a senior auditor at
the Audit Department of Deloitte Touche Tohmatsu Limited from August 1996 to August 1999, and worked in the Underwriting
Department of Taiwan Yuanda Securities Corp., and served as the chief of the Accounting Director at Taiwan P-TWO Industries Inc.
and Uniwill Computer Corp., and chief of the Finance Department at Zhongshan Ichia Electronics Co., Ltd. from September 1999 to
March 2009. He joined us in 2011.
Positions held in shareholders:
□ Applicable √ N/A
Positions held in other entities:
√ Applicable □ N/A
Whether or not
Beginning date
End date of the receive
Name Entity Position of the term of
term of office remunerations
office
and subsidies
57
Luxshare Precision Industry Co., Ltd. Annual Report 2021
from such entity
WANG Laichun Luxsan Precision Technology Director November 25, No
(Jiangsu) Co., Ltd. 2020
WANG Laichun BCS Automotive Interface Chairman July 18, 2018 No
Solutions (Suzhou) Co., Ltd.
WANG Laichun Luxshare Electronic Technology Chairman March 18, 2014 No
(Kunshan) Co., Ltd.
WANG Laichun Rikai Precision Technology Chairman February 3, No
(Yancheng) Co., Ltd. 2021
WANG Laichun Xiexun Electronic (Ji’an) Co., Vice Chairman November 12, No
Ltd. 2005
WANG Laichun Fujian JK Wiring Systems Co., Chairman June 18, 2012 No
Ltd.
WANG Luxsan Precision Technology Chairman November 25, No
Laisheng (Jiangsu) Co., Ltd. 2020
WANG Xunmu Information Technology General April 27, 2021 No
Laisheng (Shanghai) Co., Ltd. Manager
WANG Lishan Smart Manufacturing Managing November 18, No
Laisheng Technology (Guangdong) Co., Director & 2020
Ltd. Manager
WANG Lishen Smart Manufacturing Chairman February 3, No
Laisheng Technology (Shenzhen) Co., Ltd. 2021
WANG BCS Automotive Interface Managing December 29, No
Laisheng Solutions (Xi’an) Co., Ltd. Director & 2018
General
Manager
WANG Xiexun Electronic (Ji’an) Co., Chairman November 12, No
Laisheng Ltd. 2005
WANG Lanto Electronic Limited Vice Chairman May 12, 2011 No
Laisheng
WANG Kunshan Luxshare Precision Director October 25, No
Laisheng Industry Co., Ltd. 2011
WANG Donguan Xuntao Electronic Co., Vice Chairman July 10, 2012 No
Laisheng Ltd.
WANG Dongguan Leader Precision Chairman August 16, No
Laisheng Industry Co., Ltd. 2012
WANG Kunshan Luxshare Precision Vice Chairman October 25, No
Laisheng Industry Co., Ltd. 2011
WANG Suining Luxshare Precision Managing January 11, No
Laisheng Industry Co., Ltd. Director 2013
WANG Xingning Luxshare Precision Managing November 19, No
Laisheng Industry Co., Ltd. Director 2013
WANG Luxshare Precision Industry Managing March 24, 2014 No
Laisheng (Chuzhou), Ltd. Director
WANG Fengshun Luxshare Precision Managing July 4, 2014 No
Laisheng Industry Co., Ltd. Director
WANG Dongguan Luxshare Precision Chairman November 27, No
Laisheng Industry Co., Ltd. 2015
WANG Jiangxi Luxshare Intelligent Director December 25, No
Laisheng Manufacture Co., Ltd. 2015
LIU Zhonghua Guangdong Provincial Independent December 4, September 20, Yes
Expressway Development Co., Director 2017 2022
Ltd.
LIU Zhonghua GEM Co., Ltd. Independent March 20, 2019 March 12, Yes
Director 2025
LIU Zhonghua SGIS Songshan Co., Ltd. Independent June 25, 2019 June 24, 2022 Yes
58
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Director
SONG Yuhong Jiangxi GETO New Materials Co. Independent May 1, 2017 November 11, Yes
Ltd. Director 2021
LI Wei Luxshare Intelligent Manufacture Managing August 16, No
Technology (Changshu) Co., Ltd. Director & 2021
General
Manager
LI Wei Luxshare Smart Equipment Managing December 29, No
(Kunshan) Co., Ltd. Director & 2020
General
Manager
LI Wei Kunshan Luxshare Business Managing November 4, No
Management Development Co., Director 2020
Ltd.
WANG Tao Lanto Electronic Limited Chairman November 20, No
2019
WANG Tao Luxshare Smart Manufacturing Managing December 1, No
(Rugao) Co., Ltd. Director & 2020
General
Manager
WANG Tao Luxshare Technology (Nanjing) Managing October 19, No
Co., Ltd. Director & 2021
General
Manager
XIA Yanrong Luxshare Intelligent Manufacture Supervisor April 8, 2019 No
(Zhejiang) Co., Ltd.
XIA Yanrong Zhuhai Kinwong Flexible Circuit Supervisor December 3, No
Co., Ltd. 2018
XIA Yanrong Luxshare Precision Industry Supervisor February 18, No
(Suzhou) Co., Ltd. 2019
XIA Yanrong Luxshare Electrical (Shanghai) Supervisor December 2, No
Co., Ltd. 2019
XIA Yanrong Luxshare Precision Industry Supervisor October 24, No
(Enshi) Co., Ltd. 2018
YI Peizan Xiexun Electronic (Ji’an) Co., Supervisor August 28, No
Ltd. 2017
HUANG Dawei Luxshare Electronic Technology Director & March 17, 2014 No
(Kunshan) Co., Ltd. General
Manager
WU Tiansong Luxshare Electronic Technology Supervisor March 17, 2014 No
(Kunshan) Co., Ltd.
WU Tiansong Huzhou Jiuding Electronic Co., Supervisor October 12, No
Ltd. 2012
Punishments imposed by the securities regulatory authorities in the past three years on the directors, supervisors and executives of the
Company currently in office or leaving office during the reporting period:
□ Applicable √ N/A
3. Remunerations of directors, supervisors and executives
Decision-making process, criteria for determination and actual amount in respect of remunerations of directors, supervisors and
executives:
During the reporting period, directors, supervisors and executives were subject to performance appraisal, and their annual
income consisted of basic annual salaries and long-terms incentives, and was determined on the basis of our business situation and
the result of year-end performance appraisal. Our independent directors receive an emolument of RMB80,000 per year each, plus
reimbursement of travel, office and other expenses, from us.
Remunerations of directors, supervisors and executives paid in the reporting period:
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
In RMB0’000
Total Whether or not
remuneration receiving
Name Title Sex Age Status received from the remunerations from
Company any affiliate of the
(inclusive of tax) Company
Chairman of the Board of
WANG Laichun Directors & General Female 55 Incumbent 240 No
Manager
Vice Chairman of the
WANG Laisheng Male 58 Incumbent 240 No
Board of Directors
Director & Deputy
WANG Tao Male 37 Incumbent 95.11 No
General Manager
Director and Deputy
LI Wei Male 42 Incumbent 85.2 No
General Manager
Director & Deputy
LI Bin Male 45 Retired 180.68 No
General Manager
Director & Deputy
YE Yiling Female 51 Retired 116.44 No
General Manager
XU Huaibin Independent director Male 65 Retired 8 No
LIN Yifei Independent director Male 47 Retired 8 No
ZHANG Ying Independent director Female 59 Incumbent 8 No
LIU Zhonghua Independent director Male 57 Incumbent 0 No
SONG Yuhong Independent director Female 51 Incumbent 0 No
Chairman of the Board of
XIA Yanrong Female 41 Incumbent 48.26 No
Supervisors
MO Rongying Supervisor Female 42 Incumbent 41.06 No
YI Peizan Supervisor Female 37 Incumbent 9.23 No
Board Secretary &
HUANG Dawei Male 50 Incumbent 93.86 No
Deputy General Manager
WU Tiansong CFO Male 52 Incumbent 121.16 No
Total - - 1,295 -
VI. Performance of duties by the directors during the reporting period
1. Meetings of the Board of Directors held during the reporting period
Session Date of meeting Date of disclosure Resolution of the meeting
Refer to the Announcement on Resolutions of the
29th meeting of the 4th Board 29th meeting of the 4th Board of Directors disclosed
January 22, 2021 January 23, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-007).
Refer to the Announcement on Resolutions of the
30th meeting of the 4th Board 30th meeting of the 4th Board of Directors disclosed
January 28, 2021 January 29, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-015).
Refer to the Announcement on Resolutions of the
31st meeting of the 4th Board 31st meeting of the 4th Board of Directors disclosed
April 20, 2021 April 21, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-028).
32nd meeting of the 4th Board Refer to the Announcement on Resolutions of the
April 27, 2021 April 28, 2021 32nd meeting of the 4th Board of Directors disclosed
of Directors
on www.cninfo.com.cn and the Securities Times
60
Luxshare Precision Industry Co., Ltd. Annual Report 2021
(Announcement No. 2021-050).
Refer to the Announcement on Resolutions of the
1st meeting of the 5th Board 1st meeting of the 5th Board of Directors disclosed
May 21, 2021 May 22, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-057).
Refer to the Announcement on Resolutions of the
2nd meeting of the 5th Board 2nd meeting of the 5th Board of Directors disclosed
July 2, 2021 July 3, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-062).
Refer to the Announcement on Resolutions of the
3rd meeting of the 5th Board 3rd meeting of the 5th Board of Directors disclosed
August 24, 2021 August 25, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-071).
Refer to the Announcement on Resolutions of the
4th meeting of the 5th Board September 30, 4th meeting of the 5th Board of Directors disclosed
October 8, 2021
of Directors 2021 on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-077).
Refer to the Announcement on Resolutions of the
5th meeting of the 5th Board 5th meeting of the 5th Board of Directors disclosed
October 27, 2021 October 28, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-092).
Refer to the Announcement on Resolutions of the
6th meeting of the 5th Board 6th meeting of the 5th Board of Directors disclosed
December 3, 2021 December 4, 2021
of Directors on www.cninfo.com.cn and the Securities Times
(Announcement No. 2021-096).
2. Attendance of the directors at meetings of the Board of Directors and shareholders
Attendance of the directors at meetings of the Board of Directors and shareholders
No. of board No. of board Whether or not
No. of No. of
meetings meetings having been No. of
board board No. of board
held during present by absent from shareholders’
Director meetings meetings meetings
the means of two meeting
present in present by absent from
reporting communication consecutive attended
person proxy
period equipment board meetings
WANG Laichun 10 7 3 0 0 No 2
WANG Laisheng 10 7 3 0 0 No 2
LI Bin 4 2 2 0 0 No 1
YE Yiling 4 1 3 0 0 No 1
ZHANG Ying 10 7 3 0 0 No 2
XU Huaibin 4 2 2 0 0 No 1
LIN Yifei 4 2 2 0 0 No 1
LI Wei 6 4 2 0 0 No 2
WANG Tao 6 4 2 0 0 No 2
LIU Zhonghua 6 4 2 0 0 No 2
SONG Yuhong 6 4 2 0 0 No 2
Explanation about absence from two consecutive meetings of the Board of Directors:
3. Objections raised by the directors regarding matters of the Company
Whether any director has raised any objection regarding matters of the Company?
□ Yes √ No
No director has raised any objection regarding matters of the Company during the reporting period.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
4. Other information regarding the performance of duties by the directors
Whether the suggestions put forward by the directors have been adopted by the Company?
√ Yes □ No
Explanation about the adoption or non-adoption by the Company of the suggestions put forward by the directors:
During the reporting period, all of our directors have performed their duties diligently in strict accordance with the Company
Law, the Securities Law, the Code of Corporate Governance for Listed Companies, the AOA, the Rules of Procedure of the Board of
Directors and other relevant provisions and requirements, actively attended meetings of the Board of Directors and shareholders;
taken the initiative to ask for information about our operation, management, financial position and material events, had deep
discussions about all resolutions submitted to the Board of Directors for consideration, expressed opinions on our material corporate
governance issues and business decisions, and through sufficient communication and discussions, reached a consensus, to ensure the
scientificness, timeliness and effectiveness of decisions, and supervised and urged the implementation of resolutions of the Board of
Directors; actively implemented resolutions of the Board of Directors and the shareholders, and safeguarded the legitimate rights and
interests of the Company and all shareholders. We will continue to improve our corporate governance structure, further enhance the
scientific decision-making level of the Board of Directors and its committees, give full play to the role of independent directors in our
corporate governance, and promote our operational compliance and continued healthy development.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
VII. Activities of the committees of the Board of Directors during the reporting period
No. of
Date of Performance Objections
Committee Members meetings Topics Important opinions and suggestions
meeting of other duties (if any)
held
Considered the Proposal for Pursuant to the Company Law, the Code
Re-appointment of the Accounting of Corporate Governance for Listed
Firm Companies promulgated by the CSRC
and the Work Rules of the Audit
Committee of the Board of Directors, the
April 9,
Audit Committee performed its duties
2021
diligently, expressed opinions taking into
account our actual situation, and through
sufficient communication and
discussions, unanimously approved the
Proposal.
Considered the 2020 Financial Pursuant to the Company Law, the Code
WANG Laichun, XU
Report, the Special Report on the of Corporate Governance for Listed
Audit Committee Huabin and LIN 2
Deposit and Use of Offering Proceeds Companies promulgated by the CSRC
Yifei
in 2020, the 2020 Work Report of the and the Work Rules of the Audit
Internal Audit Department and the Committee of the Board of Directors, the
Work Report of the Internal Audit Audit Committee performed its duties
Department for the First Quarter of diligently, supervised our internal audit
April 15,
2021. policies and implementation thereof,
2021
reviewed our financial information,
guided the work of the Internal Audit
Department, supervised and urged the
audit conducted by the accounting firm,
and through sufficient communication
and discussions, unanimously approved
all reports considered.
Considered the Work Report of the Pursuant to the Company Law, the Code
Internal Audit Department for the of Corporate Governance for Listed
First Half of 2021. Companies promulgated by the CSRC
LIU Zhonghua, and the Work Rules of the Audit
July 22,
Audit Committee ZHANG Ying and 2 Committee of the Board of Directors, the
2021
SONG Yuhong Audit Committee performed its duties
diligently, expressed opinions taking into
account our actual situation, and through
sufficient communication and
63
Luxshare Precision Industry Co., Ltd. Annual Report 2021
discussions, unanimously approved the
Report.
Considered the Work Report of the Pursuant to the Company Law, the Code
Internal Audit Department for the of Corporate Governance for Listed
Third Quarter of 2021. Companies promulgated by the CSRC
and the Work Rules of the Audit
Committee of the Board of Directors, the
October 14,
Audit Committee performed its duties
2021
diligently, expressed opinions taking into
account our actual situation, and through
sufficient communication and
discussions, unanimously approved the
Report.
Reviewed the implementation of the Pursuant to the relevant provisions of the
performance appraisal, compensation Company Law, the Code of Corporate
and incentive plan for the directors Governance for Listed Companies
and executives in the preceding year, promulgated by the CSRC and the Work
put forward a reward proposal for the Rules of the Compensation and
directors and executives taking into Performance Appraisal Committee of the
account our actual business situation, Board of Directors, the Compensation
and studied the compensation and and Performance Appraisal Committee
performance appraisal plan for the reviewed the compensation of the
next year. directors, supervisors and executives, and
determined that we are developing and
improving fair and effective performance
Compensation and WANG Laichun,
February appraisal criteria and incentive and
Performance ZHANG Ying and 1
22, 2021 restraint mechanisms for executives, and
Appraisal Committee XU Huabin
the compensation of our executives
consists of basic monthly salaries and
year-end performance-based pay. On the
basis of such understanding and proposal,
we properly adjusted the basic monthly
salaries of certain directors and
executives, in order to reflect and produce
the effect of incentive and fairness. The
compensation of our directors,
supervisors and executives in the
reporting period is true, and conforms to
our performance metrics.
64
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Considered the Performance Pursuant to the Company Law, the Code
Appraisal Measures for the 2021 of Corporate Governance for Listed
Stock Option Incentive Plan. Companies promulgated by the CSRC
and the Work Rules of the Compensation
and Performance Appraisal Committee of
Compensation and ZHANG Ying, LIU the Board of Directors, the Compensation
September
Performance Zhonghua and 1 and Performance Appraisal Committee
24, 2021
Appraisal Committee SONG Yuhong reviewed the Performance Appraisal
Measures for the 2021 Stock Option
Incentive Plan, determined that the
Measures reflected and produced the
effect of incentive and fairness, and
unanimously approved the Proposal.
Considered the Proposal for Pursuant to the Company Law, the Code
Examination of Qualifications of of Corporate Governance for Listed
Candidates for Non-independent Companies promulgated by the CSRC
Directors of the 5th Board of Directors and the Work Rules of the Nomination
and the Proposal for Examination of Committee of the Board of Directors, the
WANG Laichun,
Nomination April 5, Qualifications of Candidates for Nomination Committee performed its
LIN Yifei and 1
Committee 2021 Independent Directors of the 5th duties diligently, examined the
ZHANG Ying
Board of Directors. qualifications of the relevant personnel,
expressed opinions and put forward
suggestions, and through sufficient
communication and discussions,
unanimously approved all Proposals.
Pursuant to the Company Law, the Pursuant to the Company Law, the Code
Code of Corporate Governance for of Corporate Governance for Listed
Listed Companies promulgated by the Companies promulgated by the CSRC,
CSRC, the Work Rules of the Strategy and the Work Rules of the Strategy
Committee of the Board of Directors Committee of the Board of Directors, the
WANG Laichun, XU and other relevant provisions, the Strategy Committee thoroughly analyzed
March 29,
Strategy Committee Huabin and ZHANG 1 Strategy Committee reviewed the and studied the industry in which we
2021
Ying material events occurred in 2020, operate, and put forward reasonable
reported our 2021 strategic suggestions on the planning for and
development plan, and studied the implementation of the development
significant strategic issues in strategies in respect of business, R&D
connection with our development. and new products, which produced
significant effect.
65
Luxshare Precision Industry Co., Ltd. Annual Report 2021
VIII. Activities of the Board of Supervisors
Whether the Board of Supervisors has identified any risk involving the Company in its supervisory activities during the reporting
period?
□ Yes √ No
The Board of Supervisors has not raised any objection to the supervisory matters during the reporting period.
IX. Employees
1. Number, structure of profession and education of employees
Number of current employees of the parent at the end of the reporting period 520
Total number of current employees of the major subsidiaries at the end of the
227,632
reporting period
Total number of current employees at the end of the reporting period 228,152
Total number of salaried employees during the reporting period 228,152
Total number of retired employees to or for whom the parent and the major
0
subsidiaries are obligated to make payments
Structure of profession
Type of profession Number of employees
Production staff 192,873
Sales staff 2,574
Technical staff 16,103
Financial staff 354
Administrative staff 16,248
Total 228,152
Education
Degree of education Number of employees
Undergraduate 13,982
College 21,432
Secondary specialized school, senior middle school and below 192,738
Total 228,152
2. Compensation policies
We have established the administrative measures for the salaries, performance-based pay, year-end bonus and other
compensation of employees of the Group, provided employees with competitive and guaranteed compensation in a scientific an
reasonable manner, developed sound compensation management policies, paid contributions to the social insurance packages and
housing provident fund for and salaries to the employees on time in strict accordance with the applicable laws and regulations, and
resolutely rejected any bonded labor. In order to help employees better understand the match between their job responsibilities and
capabilities, we have developed a multi-dimensional performance appraisal system including self-assessment and supervisor’s
assessment, in order to objectively and comprehensively reflect employees’ annual performance. We conduct annual employee
performance communication activities, to ensure that each employee receives sufficient support and resources for his/her career
development in Luxshare-ICT, and to enhance and optimize the work experience of each employee. The compensation packages
provided by us to employees consist of year-end bonuses, project bonuses, share incentives for key officers, and bonuses for
outstanding employees, among others. During the reporting period, we further optimized performance appraisal, fully appraised the
performance of teams and individuals, and effectively improved the execution ability and awareness of responsibility of employees,
which will help us retain and attract outstanding talents, and human resources required for our development.
3. Training programs
We attach great importance to the career development plans of employees, concentrate our efforts on the training of personnel,
and have established a sound personnel training system, to attract and motivate more excellent talents and promote common growth
of employees and the Group. We have built an integrated online and offline learning platform, providing multi-dimensional specialty
training for different types of employees and new projects. The platform provides all employees with hierarchical targeted training of
66
Luxshare Precision Industry Co., Ltd. Annual Report 2021
different categories that target different groups of people and satisfy different needs. For example, with respect to senior, middle and
grassroots managers and key reserve talents with great potentialities, we conduct the “Star Cultivation Series” training, in order to
build an efficient and dynamic team; and with respect to the personnel in manufacturing, R&D technology, marketing, supply chain
and other critical fields, we conduct the “Juneng Series” training, in order to continuously improve the professional capabilities of
employees on different posts. In addition, we carry out school-enterprise cooperation projects, and encourage the employees to obtain
certification of professional qualifications from the Company and society, in order to enhance our production level and social
recognition of us as a whole. We have also built the “Jushi Series”, “Luxshare Classroom”, “Senior Management Forum” and other
learning and communication platforms, in order to provide excellent Luxshare employees with stages to demonstrate themselves,
create a sound learning environment and promote the integration and communications among all employees. In addition, with a view
to promoting the implementation of important strategies and changes, we have conducted the “Jubian Series” training according to
business needs. In order to regulate the employee training, we have established and periodically updated the Administrative Measures
for Education and training, the Operating Procedures for Education and training, and Administrative Measures for Internal Lecturers,
which define the training system covering all stages from induction, orientation, on-the-job, transfer to promotion, and each factory
has established the Operating Procedures for Education and training and relevant administrative measures by reference to the
Group’s management standards, and annual training plans for the factory and its departments according to its annual development
plan, to effectively enhance the core competencies of employees and the Company, improve the employees’ professional capabilities
and promote the sustainable growth of the Company.
4. Outsourced workers
□ Applicable √ N/A
X. Profit distribution and transfer of capital reserve to the share capital
Adoption, implementation or adjustment of the profit distribution policy, in particular, cash dividend policy, during the reporting
period
√ Applicable □ N/A
Pursuant to the resolutions adopted by the 31st meeting of the 4th Board of Directors and the 2020 annual shareholders’ meeting,
we proposed to distribute to all shareholders a cash dividend of RMB1.10 (inclusive of tax) per 10 shares on the basis of the total
share capital of 7,035,426,367 shares, or RMB773,896,900.37 (inclusive of tax) in total. In case of any change in our total share
capital due to any share repurchase, exercise of share incentives, material asset restructuring, cancellation of repurchased share or
otherwise prior to the record date for the relevant equity distribution, we would adjust the distribution payable per share accordingly
on the principle that the total amount distributable should remain the same.
During the period from the disclosure of such profit distribution proposal to the implementation thereof, our total share capital
increased by 2,461 shares, from 7,035,426,367 shares at the time of disclosure of the proposal to 7035428828 shares as a result of
conversion of the convertible bonds to shares. On the principle that the total amount distributable should remain the same, our profit
distribution proposal for 2020 was adjusted as follows: to distribute to all shareholders a cash dividend of RMB1.099999 (inclusive
of tax) per 10 shares on the basis of the total share capital of 7035428828 shares, or RMB773,891,489.58 (inclusive of tax) in total.
Special explanation about the cash dividend policy
Whether comply with the provisions of the articles of association or requirements of resolutions of the
Yes
shareholders’ meeting of the Company?
Whether the standard and ratio of cash dividend distribution are clear and definite? Yes
Whether the relevant decision-making process and mechanism are sound? Yes
Whether the independent directors have performed their duties and exercised their functions? Yes
Whether the minority shareholders have sufficient opportunities to express their opinions and requests and
Yes
their legitimate rights and interests are fully protected?
Whether the conditions and procedures in respect of any adjustment or amendment of the cash dividend policy
Yes
comply with the applicable regulations and are transparent?
Whether the Company has made a profit in the reporting period and the parent has profits available for distribution to the
shareholders, but the Company does not propose to distribute cash dividends?
□ Applicable √ N/A
Particulars of profit distribution and transfer of capital reserve to the share capital for the reporting period:
√ Applicable □ N/A
67
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Number of bonus shares per 10 shares 0
Amount of cash dividends per 10 shares (inclusive of tax) 1.10
Share capital based on which the distribution proposal was made 7,084,301,477
Amount of cash dividends (inclusive of tax) 779,273,162.47
Amount of cash dividends distributed in other ways (such as share repurchase) (RMB) 0.00
Total amount of cash dividends (RMB) 779,273,162.47
Distributable profit (RMB) 6,526,651,487.02
Proportion of total cash dividends to the distributable profit 100%
Particulars of cash dividends distributed for the reporting period
Others
Particulars of the proposal of profit distribution or for transfer of capital reserve to share capital
Our 2021 Profit Distribution Proposal is as follows: to distribute to all shareholders a cash dividend of RMB1.10 (inclusive of tax)
per 10 shares on the basis of the total share capital of 7,084,301,477 shares, or RMB779,273,162.47 (inclusive of tax) in total, and
to carry forward the retained profits for distribution in subsequent years. In case of any change in our total share capital due to any
share repurchase, exercise of share incentives, material asset restructuring, cancellation of repurchased share or otherwise prior to
the record date for the relevant equity distribution, we will adjust the distribution payable per share accordingly on the principle
that the total amount distributable should remain the same. The 2021 Profit Distribution Proposal is subject to approval by the
shareholders’ meeting.
XI. Implementation of share incentive plans, employee stock ownership plans and other
employee incentives granted by the Company
√ Applicable □ N/A
1. Share incentives
(1) 2018 stock option incentive plan
On December 2, 2020, the 27th meeting of the 4th Board of Directors and the 27th meeting of the 4th Board of Supervisors
considered and approved the Proposal Regarding Satisfaction of the Vesting Conditions for the Second Vesting Period of the 2018
Stock Option Incentive Plan, pursuant to which, the grantees who have satisfied the vesting conditions may exercise the stock options
vested in the second vesting period in their sole discretion from December 22, 2020 to September 24, 2021. Refer to the Cautionary
Announcement on Adoption of the Discretionary Exercise Method for the Second Vesting Period of the 2018 Stock Option Incentive
Plan (Announcement No.2020-108) for details.
During the reporting period, the grantees exercised their options to purchase 13,854,690 shares in total within the second vesting
period of the 2018 Stock Option Incentive Plan.
On July 2, 2021, due to the equity distribution for 2020, the exercise price for the stock options granted but not yet exercised
under the 2018 stock option incentive plan was adjusted from RMB10.28 per share to RMB10.17 per share. Refer to the
Announcement on Adjustment of the Exercise Prices under the 2018 and 2019 Stock Option Incentive Plans and Cancellation of
Certain Stock Options under the 2019 Stock Option Incentive Plan (Announcement No.2021-064) for details.
On September 30, 2021, due to resignation of certain grantees for personal reasons, the number of grantees was adjusted from
1719 to 1695, and the number of stock options exercisable under the 2018 Stock Option Incentive Plan was adjusted by cancelling
920,766 stock options granted but not yet exercised, so the number of stock options granted but not yet exercised was adjusted from
93,843,466 to 92,964,441. Refer to the Announcement on Adjustment of the Number of Stock Options Exercisable and Cancellation
of Certain Stock Options under the 2018 Stock Option Incentive Plan (Announcement No.2021-082) for details.
On December 3, 2021, the 6th meeting of the 5th Board of Directors and the 6th meeting of the 5th Board of Supervisors
considered and approved the Proposal for Adjustment of the Number of Stock Options Exercisable and Cancellation of Certain Stock
Options under the 2018 Stock Option Incentive Plan and the Proposal Regarding the Satisfaction of the Vesting Conditions for the
Third Vesting Period of the 2018 Stock Option Incentive Plan, pursuant to which, due to resignation, failure to meet the performance
appraisal criteria or other reasons on the part of the grantees, the number of grantees was adjusted from 1695 to 1650, and the
number of stock options exercisable under the 2018 Stock Option Incentive Plan was adjusted by cancelling 1,851,452 stock options
granted but not yet exercised, so the number of stock options granted but not yet exercised was adjusted from 92,964,441 to
91,112,989; the grantees who have satisfied the vesting conditions may exercise the stock options vested in the third vesting period in
their sole discretion from December 24, 2021 to September 23, 2022. Refer to the Announcement on Cancellation of Certain Stock
Options under and Revision of the Number of Stock Options Exercisable in the Third Vesting Period of the 2018 Stock Option
Incentive Plan (Announcement No.2021-104) and the Cautionary Announcement on Adoption of the Discretionary Exercise Method
for the Third Vesting Period of the 2018 Stock Option Incentive Plan as Revised (Announcement No.2021-105) for details.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
During the reporting period, the grantees exercised their options to purchase 19,597,470 shares in total within the third vesting
period of the 2018 Stock Option Incentive Plan.
(2) 2019 stock option incentive plan
On June 22, 2020, the 19th meeting of the 4th Board of Directors and the 19th meeting of the 4th Board of Supervisors considered
and approved the Proposal Regarding Satisfaction of the Vesting Conditions for the First Vesting Period of the Stock Options
Granted under the 2019 Stock Option Incentive Plan, pursuant to which, the grantees who have satisfied the vesting conditions may
exercise the stock options vested in the first vesting period in their sole discretion from July 7, 2020 to April 21, 2021. Refer to the
Cautionary Announcement on Adoption of the Discretionary Exercise Method for the First Vesting Period of the Stock Options
Granted under the 2019 Stock Option Incentive Plan (Announcement No.2020-049) for details.
During the reporting period, the grantees exercised their options to purchase 1,291,186 shares in total within the first vesting
period of the stock options granted under the 2019 Stock Option Incentive Plan.
On January 22, 2021, due to resignation, failure to meet the performance appraisal criteria or other reasons on the part of the
grantees, the number of grantees was adjusted from 258 to 250, and the number of stock options available under the 2019 Stock
Option Incentive Plan was adjusted by cancelling 456,286 stock options granted but not yet exercised, so the number of stock options
granted but not yet exercised was adjusted from 21,113,740 to 20,657,454. Refer to the Announcement on Adjustment of the List of
Grantees and Number of Stock Options Available and Cancellation of Certain Stock Options under the 2019 Stock Option Incentive
Plan (Announcement No.2021-009) for details.
On January 22, 2021, the 29th meeting of the 4th Board of Directors and the 29th meeting of the 4th Board of Supervisors
considered and approved the Proposal Regarding Satisfaction of the Vesting Conditions for the First Vesting Period of the Stock
Options Available under the 2019 Stock Option Incentive Plan, pursuant to which, the grantees who have satisfied the vesting
conditions may exercise the stock options vested in the first vesting period in their sole discretion from February 8, 2021 to
November 26, 2021. Refer to the Cautionary Announcement on Adoption of the Discretionary Exercise Method for the First Vesting
Period of the Stock Options Available under the 2019 Stock Option Incentive Plan (Announcement No.2021-021) for details.
During the reporting period, the grantees exercised their options to purchase 4,109,496 shares in total within the first vesting
period of the stock options available under the 2019 Stock Option Incentive Plan.
On July 2, 2021, due to the equity distribution for 2020, and resignation, failure to meet the performance appraisal criteria or
other reasons on the part of the grantees, we adjusted the 2019 stock option incentive plan as follows: the number of grantees was
adjusted from 340 to 332; 744,909 stock options granted but not yet exercised were cancelled, so the number of stock options granted
but not yet exercised was adjusted from 65,977,698 to 65,232,789; and the exercise price of the stock options granted or available
was changed from RMB13.70 per share to RMB13.59 per share. Refer to the Announcement on Adjustment of the Exercise Prices
under the 2018 and 2019 Stock Option Incentive Plans and Cancellation of Certain Stock Options under the 2019 Stock Option
Incentive Plan (Announcement No.2021-064) for details.
On July 2, 2021, the 2nd meeting of the 5th Board of Directors and the 2nd meeting of the 5th Board of Supervisors considered and
approved the Proposal Regarding Satisfaction of the Vesting Conditions for the Second Vesting Period of the Stock Options Granted
under the 2019 Stock Option Incentive Plan, pursuant to which, the grantees who have satisfied the vesting conditions may exercise
the stock options vested in the second vesting period in their sole discretion from July 15, 2021 to April 21, 2022. Refer to the
Cautionary Announcement on Adoption of the Discretionary Exercise Method for the Second Vesting Period of the Stock Options
Granted under the 2019 Stock Option Incentive Plan (Announcement No.2021-069) for details.
During the reporting period, the grantees exercised their options to purchase 14,627,322 shares in total within the second vesting
period of the stock options granted under the 2019 Stock Option Incentive Plan.
(3) 2021 stock option incentive plan
With the approval of the 4th meeting of the 5th Board of Directors, the 4th meeting of the 5th Board of Supervisors and the 1st
extraordinary shareholders’ meeting in 2021, we introduced the 2021 stock option incentive plan.
The first grant under the plan was completed on December 3, 2021 and registered on December 9, 2021. 52,092,000 stock
options (short name: Luxshare JLC4; code: 037192) in total, representing 0.74% of our total share capital at the time of grant, were
granted to 1,072 grantees at the exercise price of RMB35.87 per share.
(4) Exercise of options during the reporting period
During the reporting period, the grantees exercised their options to purchase 53,480,164 shares in total under the relevant stock
option incentive plans.
69
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Share incentives granted to directors and executives
√ Applicable □N/A
Unit: shares
Exercise
No. of Market No. of
price of
additional No. of No. of price at No. of additional Grant
Beginning shares Ending Beginning Ending
stock shares shares the end of shares restricted price of
balance of exercised balance of balance of balance of
options exercisable exercised the vested shares restricted
Name Title stock during the stock restricted restricted
granted during the during the reporting during the granted shares
options reporting options shares shares
during the reporting reporting period reporting during the (RMB per
held period held held held
reporting period period (RMB per period reporting share)
(RMB per
period share) period
share)
WU Tiansong CFO 395,451 0 131,817 131,817 10.17 263,634 49.20
WU Tiansong CFO 574,585 0 168,992 168,992 13.59 405,593 49.20
HUANG Deputy
Dawei General
Manager 659,085 0 219,695 0 659,085 49.20
& Board
Secretary
LI Wei Director
&
Deputy 1,689,963 0 506,989 0 1,689,963 49.20
General
Manager
WANG Tao Director
&
Deputy 1,973,876 0 601,626 0 1,973,876 49.20
General
Manager
LI Bin Director
&
Deputy 2,636,342 0 878,781 878,781 10.17 1,757,561 49.20
General
Manager
LI Bin Director
&
Deputy 1,351,970 0 337,992 337,992 13.59 1,013,978 49.20
General
Manager
YE Yiling Director 962,265 0 320,755 87,880 10.17 874,385 49.20
&
70
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Deputy
General
Manager
YE Yiling Director
&
Deputy 540,789 0 135,196 90,000 13.59 450,789 49.20
General
Manager
Total - 10,784,326 0 3,301,843 1,695,462 -- 9,088,864 -- 0 0 0 -- 0
Remark (if any) Upon re-appointment of the Board of Directors in April 2021, LI Bin and YE Yiling resigned as directors, but continue to hold other posts in the Company.
Performance appraisal and incentives in respect of executives
All of our executives were appointed by the Board of Directors fairly and transparently, in compliance with the applicable laws and regulations. Our executives report to the Board of
Directors and are responsible for achieving the operating targets set by the Board of Directors. We have established effective incentive and constraint mechanisms, in order to stimulate the
executives to perform their duties diligently, and improve our level of operation and management and operating results. The performance of our executives is directly linked to their income, and
assessed by comparing the goals set by us with their actual accomplishment of tasks. The Compensation and Performance Appraisal Committee of the Board of Directors is responsible for
year-end assessment of the achievement of goals, working ability and performance of duties in respect of our directors, supervisors and executives, and developing the compensation and
performance appraisal proposals and submitting the same to the Board of Directors for approval. During the reporting period, our compensation and performance appraisal policies for the
executives have been implemented effectively.
71
Luxshare Precision Industry Co., Ltd. Annual Report 2021
2. Implementation of employee stock ownership plan
□ Applicable √ N/A
3. Other employee incentives
□ Applicable √ N/A
XII. Establishment and implementation of internal controls during the reporting period
1. Establishment and implementation of internal controls
We have established a relatively sound internal control system that has run effectively in strict accordance with the Company
Law, the Securities Law, the Basic Internal Control Standards for Enterprises, the Application Guide for Internal Controls of
Enterprises and other applicable laws, regulations and normative documents, taking into account the characteristics of our industry
and our actual business situation. From the perspective of corporate management, technology R&D and business processes, we have
established effective internal controls, and improved our corporate governance level and efficiency of decision-making, which
guarantees the legal and regulatory compliance of our operation and management, security of our assets and the truthfulness and
completeness of our financial reports and other information, and effectively promote the steady implementation of our strategies.
Our internal control system has a reasonable structure, can satisfy the requirements of our management and development, and
runs effectively. Our internal controls over financial reporting, non-financial reporting and other material matters are effective,
achieve the objectives and protect the interests of the Company and all shareholders.
2. Material weakness in internal control identified during the reporting period
□ Yes √ No
XIII. Management and control of subsidiaries during the reporting period
Problems
Progress of Solutions Progress Subsequent
Company Integration plan encountered
integration adopted of solution solution
during integration
Rikai Precision Control the subsidiary through its Completed No N/A N/A N/A
Technology board of directors, and manage
(Yancheng) Co., the assets, personnel, finance,
Ltd. organization, operation and other
matters of the subsidiary in an
all-round way through
appointment of officers to the
subsidiary
XIV. Self-assessment report on internal controls or auditor’s report on internal controls
1. Self-assessment report on internal controls
Date of disclose of the self-assessment report on internal controls April 28, 2022
in its entirety
Disclosure reference Self-assessment Report on Internal Controls 2021 of Luxshare
Precision Industry Co., Ltd. published on www.cninfo.com.cn
Ratio of total assets of the entities covered by the assessment to 75.60%
total assets recorded in the consolidated financial statements of
the Company
Ratio of total operating revenue of the entities covered by the 84.91%
72
Luxshare Precision Industry Co., Ltd. Annual Report 2021
assessment to total operating revenue recorded in the
consolidated financial statements of the Company
Criteria for determination of deficiencies
Type Financial reporting Non-financial reporting
Qualitative criteria 1. The material weaknesses in internal control over 1. The material weaknesses in internal control over
financial reporting include: (A) fraud on the part of non-financial reporting include: (A) any serious
directors, supervisors and executives; (B) failure to violation of the significant national laws and
correct any material weakness in internal control regulations; (B) great outflow of management and
within a reasonable time after the same was identified technical personnel on key posts; (C) absence of or
and reported to the management; (C) ineffective ineffective control system for important business
control environment; (D) any material misstatement relating to the production and operation of the
in the financial report for the current period that is Company; (D) ineffective internal control over
identified by external auditor but fails to be identified information disclosure, resulting in any public
through internal control; (E) any serious violation of condemnation of the Company by any regulatory
the laws and regulations; (F) the Company running at authority; and (E) failure to correct any problem, in
a loss for consecutive years due to any reason other particular, any material weakness or significant
than policy-related loss, which might threaten the deficiency, identified in any assessment of internal
Company’s ability to continue as a going concern; controls. 2. The significant deficiencies in internal
and (G) ineffective supervision by the management control over non-financial reporting include: (A)
and related functional departments over the internal defects in important business policies or system, or
control. 2. The significant deficiencies in internal unsound internal control system; and (B) failure to
control over financial reporting include: (A) failure to review any information disclosed externally and
select and apply accounting policies pursuant to the untruthfulness of any information disclosed. 3.
generally accepted accounting principles; (B) failure General deficiencies in internal control over financial
to establish anti-fraud procedures and controls; (C) reporting include deficiencies in control other than
absence of or ineffective control system for important material weakness and significant deficiency.
business; (D) lack of internal controls in and
disorderly management of subsidiaries; and (E) great
outflow of or frequent changes in senior officers
(especially those in charge of internal control,
financial and human resources departments), or great
outflow of personnel on the relevant posts. 3. General
deficiencies in internal control over financial
reporting include deficiencies in control other than
material weakness and significant deficiency.
Quantitative criteria 1. Material weakness: (1) amount of misstated 1. Material weakness: resulting in a direct loss of
operating revenue ≥ 0.5% of total operating revenue; more than RMB12 million and having a material
(2) amount of misstated profit ≥ 0.5% of total profit; adverse effect on the Company. 2. Significant
(3) amount of misstated assets ≥ 0.5% of total assets; deficiency: resulting in a direct loss of more than
(4) amount of misstated owners’ equity ≥ 0.5% of RMB3 million and not more than RMB12 million,
total owners’ equity. 2. Significant deficiency: (1) and any penalty imposed by any competent
0.2% of total operating revenue ≤ amount of government authority of the country, but not having
misstated operating revenue < 0.5% of total operating an adverse effect on the Company. 3. General
revenue; (2) 0.2% of total profit ≤ amount of deficiency: resulting in a direct loss of not more than
misstated profit < 0.5% of total profit; (3) 0.2% of RMB3 million, and any penalty imposed by any
total assets ≤ amount of misstated assets < 0.5% of competent government authority at the provincial
total assets; (4) 0.2% of total owners’ equity ≤ level or below, but not having an adverse effect on
amount of misstated owners’ equity < 0.5% of total the Company.
owners’ equity. 3. General deficiency: (1) amount of
misstated operating revenue < 0.2% of total operating
revenue; (2) amount of misstated profit < 0.2% of
total profit; (3) amount of misstated assets < 0.2% of
total assets; (4) amount of misstated owners’ equity <
0.2% of total owners’ equity.
Number of material weaknesses in financial reporting 0
Number of material weaknesses in non-financial reporting 0
Number of significant deficiencies in financial reporting 0
73
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Number of significant deficiencies in non-financial reporting 0
2. Auditor’s report on internal controls
□ Applicable √ N/A
3. Internal control certification report
Opinion issued in the internal control certification report
Pursuant to the Basic Internal Control Standards for Enterprises promulgated by the Ministry of Finance and other relevant
provisions, the Company has maintained effective internal controls in all material respects as of December 31, 2021.
Disclosure of the internal control certification report Disclosed
Date of disclosure of the internal control certification report in its April 28, 2022
entirety
Disclosure reference Internal Control Certification Report 2021 of Luxshare Precision
Industry Co., Ltd. published on www.cninfo.com.cn
Type of opinion issued in the internal control certification report Standard unqualified opinion
Whether there’s any material weakness in non-financial No
reporting
Whether the accounting firm issued a modified internal control certification report?
□ Yes √ No
Whether the internal control certification report issued by the accounting firm conforms to the opinion issued by the self-assessment
report of the Board of Directors?
√Yes □ No
XV. Rectification of non-compliance identified in the special self-examination of corporate
governance of the listed company
Pursuant to the requirements of the Announcement on Launching the Special Campaign for Corporate Governance of the Listed
Companies issued by the CSRC, we carried out self-examination of our corporate governance in strict accordance with the Company
Law, the Securities Law, the AOA, the Rules of Procedure of the Board of Directors, the Rules of Procedure of the Board of
Supervisors and other applicable laws, regulations and normative documents, in an orderly manner on the principle of seeking truth
from facts, and completed the Questionnaire for Self-Examination of Corporate Governance of the Listed Company, which includes
119 questions covering seven areas.
Our self-examination showed that we operated in compliance with the applicable regulations and was governed well during the
reporting period, and did not identify any material non-compliance in our corporate governance. We will continue to improve our
level of corporate governance and further promote our high-quality development.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section V Environment and Social Responsibilities
I. Major environmental issues
Whether the Company or any of its subsidiaries is identified as a major polluter by the environmental protection authority
√ Yes □ No
Name of
main
Number
Name of the pollutants Distribution Emission Pollutant discharge Total
Discharge of Total Excessive
Company or and of discharge concentratio standards approved
method discharge emissions emissions
its subsidiaries characteris outlets n implemented emissions
outlets
tic
pollutants
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Ammonia Sewage
Technology treatment by the 1 2.705291 40 7.22 49.04 /
nitrogen station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision Total after the
Sewage
Technology phosphoru treatment by the 1 0.921442 8mg/l 2.46 7.08 /
station
(Yancheng) s wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Total Sewage
Technology treatment by the 1 9.398368 60mg/l 25.07 69.86 /
nitrogen station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Anionic Sewage
Technology treatment by the 1 0.100312 15 mg/l 0.27 / /
surfactant station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Sewage
Technology pH level treatment by the 1 0 6-9 0 / /
station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
75
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Taken over by
the wastewater
Rikai treatment plant
Precision Chemical after the
Sewage
Technology oxygen treatment by the 1 60.29317 500 mg/l 160.85 729.32 /
station
(Yancheng) demand wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Sewage
Technology Fluoride treatment by the 1 8.576927 20 mg/l 22.88 / /
station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Suspended Sewage
Technology treatment by the 1 30.80756 400 mg/l 82.19 / /
solids station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Taken over by
the wastewater
Rikai treatment plant
Precision after the
Sewage
Technology Petroleum treatment by the 1 0.801746 20 mg/l 2.14 / /
station
(Yancheng) wastewater
Co., Ltd. treatment station
meets the
standards
Environmental
Rikai protection B4、B5、B6、
Precision (secondary
C4、C5、C6、
Technology VOCs activated carbon 51 3.15 60 mg/l 18.40 / /
(Yancheng) and oil mist C7、B7、C3、
Co., Ltd. washing tower) B3
equipment
Environmental
protection (oil
Rikai mist washing B4、B5、B6、
Precision tower, low
C4、C5、C6、
Technology SO2 nitrogen 51 0.76 20 mg/l 2.05 / /
(Yancheng) combustion, C7、B7、C3、
Co., Ltd. alkali spray B3
tower)
equipment
Environmental
Rikai protection (wet B4、B5、B6、
Precision dust removal,
Particulate C4、C5、C6、
Technology low nitrogen 51 5.53 50 mg/l 13.95 / /
matter C7、B7、C3、
(Yancheng) combustion,
Co., Ltd. direct discharge) B3
equipment
Environmental B4、B5、B6、
Rikai
protection C4、C5、C6、
Precision NOx 51 15.23 60 mg/l 1.78 1.7853 /
(secondary
Technology C7、B7、C3、
activated carbon
(Yancheng) B3
and oil mist
76
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Co., Ltd. washing tower)
equipment
Level 3 provided in
Rishan
the Integrated
Computer Chemical
Standards of
Accessories oxygen Pipe discharge 1 Main outlet 500mg/L 50.562 112.2094 /
Wastewater
(Jiashan) Co., demand
Discharge
Ltd.
(GB8979-1996)
Restrictions on
Indirect Discharge
Rishan
of Nitrogen and
Computer
Ammonia Phosphorus
Accessories Pipe discharge 1 Main outlet 35mg/L 4.014 11.2209 /
nitrogen Pollutants from
(Jiashan) Co.,
Wastewater of
Ltd.
Industrial
Enterprises
Rishan Discharge
Computer Standards of
Total
Accessories Pipe discharge 1 Main outlet 0.1mg/L Electroplating 0.001 0.02 /
nickel
(Jiashan) Co., Pollutants
Ltd. (GB21900-2008)
Rishan Discharge
Computer Standards of
Total
Accessories Pipe discharge 1 Main outlet 0.5mg/L Electroplating 0.012 0.026 /
chromium
(Jiashan) Co., Pollutants
Ltd. (GB21900-2008)
Rishan Collect in a
Roof of Integrated
Computer centralized
F1/F2/F3/F4 Emission Standards
Accessories VOC manner and then 26 120mg/m 9.33 10.8962 /
/F5/F7/F9/F of Air Pollutants
(Jiashan) Co., emit after
10/F11 (GB16297-1996)
Ltd. pretreatment
Rishan Collect in a
Integrated
Computer centralized Roof of
Particulate Emission Standards
Accessories manner and then 12 F3/F5/F6-1/ 120mg/m 1.876 10.595 /
matter of Air Pollutants
(Jiashan) Co., emit after F6-2/F7
(GB16297-1996)
Ltd. pretreatment
Rishan Collect in a Discharge
Computer centralized Standards of
Nitrogen Roof of
Accessories manner and then 8 200mg/m Electroplating 0.554 0.903 /
oxide F5/F7
(Jiashan) Co., emit after Pollutants
Ltd. pretreatment (GB21900-2008)
Level 3 provided in
Riming the Table 2 of the
Computer South of the Integrated
Wastewate
Accessories Pipe discharge 1 sewage 7.4 Standards of / / /
r (PH)
(Shanghai) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r
Accessories Pipe discharge 1 sewage 15 Standards of 4.771 / /
(suspende
(Shanghai) station Wastewater
d solids)
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Computer South of the Integrated
Wastewate
Accessories Pipe discharge 1 sewage 40 Standards of 4.522 / /
r (chroma)
(Shanghai) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
77
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Level 3 provided in
Riming Wastewate the Table 2 of the
Computer r South of the Integrated
Accessories (chemical Pipe discharge 1 sewage 72 Standards of 11.425 33.842 /
(Shanghai) oxygen station Wastewater
Co., Ltd. demand) Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r
Accessories Pipe discharge 1 sewage 0.54 Standards of 0.195 / /
(petroleum
(Shanghai) station Wastewater
)
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r
Accessories Pipe discharge 1 sewage 9.62 Standards of 0.785 1.05 /
(ammonia
(Shanghai) station Wastewater
nitrogen)
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Computer Wastewate South of the Integrated
Accessories r (anionic Pipe discharge 1 sewage 0.07 Standards of 0.088 / /
(Shanghai) surfactant) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r (total
Accessories Pipe discharge 1 sewage 0.42 Standards of 0.061 5.25 /
phosphoru
(Shanghai) station Wastewater
s)
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Computer Wastewate South of the Integrated
Accessories r (total Pipe discharge 1 sewage 5.253.1 Standards of 1.938 / /
(Shanghai) nitrogen) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Computer Wastewate South of the Integrated
Accessories r (five-day Pipe discharge 1 sewage 31.6 Standards of 3.609 / /
(Shanghai) BOD) station Wastewater
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Riming the Table 2 of the
Wastewate
Computer South of the Integrated
r
Accessories Pipe discharge 1 sewage 0.316 Standards of / / /
(aluminum
(Shanghai) station Wastewater
)
Co., Ltd. Discharge (DB31
199-2018)
Riming Treated exhaust
Integrated
Computer Exhaust gas meets the
Emission Standards
Accessories gas (oil standards and is 63 Plant roof 0.1 1.3464 / /
of Air Pollutants
(Shanghai) mist) emitted at high
(DB31_933-2015)
Co., Ltd. altitude
Riming Exhaust Treated exhaust 7 Plant roof 0.067 Integrated 0.554 3.02 /
Computer gas gas meets the Emission Standards
78
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Accessories (particulat standards and is of Air Pollutants
(Shanghai) e matter) emitted at high (DB31_933-2015)
Co., Ltd. altitude
Riming Treated exhaust
Computer gas meets the Emission Standards
Exhaust
Accessories standards and is 1 Plant roof ND for Odor Pollutants 0 / /
gas (odor)
(Shanghai) emitted at high (DB311025-2016)
Co., Ltd. altitude
Exhaust
Riming Treated exhaust
gas Integrated
Computer gas meets the
(non-meth Emission Standards
Accessories standards and is 3 Plant roof ND 0 0.1348 /
ane of Air Pollutants
(Shanghai) emitted at high
hydrocarb (DB31_933-2015)
Co., Ltd. altitude
on)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Wastewate Integrated
sewage
Technology r (total Pipe discharge 1 ND Standards of 0.000143 0.0054 /
station of
(Shanghai) nickel) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Integrated
Wastewate sewage
Technology Pipe discharge 1 7.5 Standards of / / /
r (PH) station of
(Shanghai) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
Wastewate South of the
Electronic Integrated
r (total sewage
Technology Pipe discharge 1 0.32 Standards of 0.164 / /
phosphoru station of
(Shanghai) Wastewater
s) the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Wastewate Integrated
sewage
Technology r (total Pipe discharge 1 1.95 Standards of 0.84 27.63 /
station of
(Shanghai) nitrogen) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
Wastewate South of the
Electronic Integrated
r sewage
Technology Pipe discharge 1 1.43 Standards of 0.192 0.988 /
(ammonia station of
(Shanghai) Wastewater
nitrogen) the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Integrated
Wastewate sewage
Technology Pipe discharge 1 134 Standards of 47.867 52.45 /
r (COD) station of
(Shanghai) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Integrated
Wastewate sewage
Technology Pipe discharge 1 1 Standards of 2.283 / /
r (chroma) station of
(Shanghai) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
79
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Level 3 provided in
Sheng Rui the Table 2 of the
Wastewate South of the
Electronic Integrated
r sewage
Technology Pipe discharge 1 16 Standards of 13.087 / /
(suspende station of
(Shanghai) Wastewater
d solids) the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
Wastewate South of the
Electronic Integrated
r sewage
Technology Pipe discharge 1 ND Standards of 0.632 / /
(petroleum station of
(Shanghai) Wastewater
) the plant
Co., Ltd. Discharge (DB31
199-2018)
Level 3 provided in
Sheng Rui the Table 2 of the
South of the
Electronic Integrated
Wastewate sewage
Technology Pipe discharge 1 2.66 Standards of 0.043 / /
r (LAS) station of
(Shanghai) Wastewater
the plant
Co., Ltd. Discharge (DB31
199-2018)
Sheng Rui Treated exhaust Discharge
Exhaust
Electronic gas meets the Standards of
gas Plant roof
Technology standards and is 17 0.2 Electroplating 0.071 3.442 /
(Nitrogen and 1/F
(Shanghai) emitted at high Pollutants
oxide)
Co., Ltd. altitude (GB21900-2008)
Sheng Rui Treated exhaust Discharge
Exhaust
Electronic gas meets the Standards of
gas 1/F of the
Technology standards and is 15 ND Electroplating 0 / /
(sulfuric plant
(Shanghai) emitted at high Pollutants
acid mist
Co., Ltd. altitude (GB21900-2008)
Sheng Rui Treated exhaust
Exhaust Integrated
Electronic gas meets the
gas Emission Standards
Technology standards and is 6 Plant roof 2.2 0.883 2.533 /
(particulat of Air Pollutants
(Shanghai) emitted at high
e matter) (DB31_933-2015)
Co., Ltd. altitude
Sheng Rui Treated exhaust
Integrated
Electronic Exhaust gas meets the
1/F of the Emission Standards
Technology gas (alkali standards and is 15 ND 0 / /
plant of Air Pollutants
(Shanghai) mist) emitted at high
(DB31_933-2015)
Co., Ltd. altitude
Sheng Rui Treated exhaust
Electronic gas meets the Emission Standards
Exhaust Sewage
Technology standards and is 1 ND for Odor Pollutants 0 / /
gas (odor) station
(Shanghai) emitted at high (DB311025-2016)
Co., Ltd. altitude
Exhaust
Sheng Rui Treated exhaust Emission Standards
gas
Electronic gas meets the of Pollutants from
(non-meth
Technology standards and is 1 Plant roof 1.21 Synthetic Resin 0.016 / /
ane
(Shanghai) emitted at high Industry
hydrocarb
Co., Ltd. altitude (GB31572-2015)
on)
Construction and operation of pollution prevention facilities
I. Rikai Precision Technology (Yancheng) Co., Ltd.
1. 7 sets of low nitrogen combustion systems: The denitration facilities operate for 8400 hours per year.
2. 17 sets of dust removal systems: The dust removal facilities operate for 8400 hours per year.
3. 15 sets of organic exhaust gas collection and treatment systems.
4. 13 sets of acid exhaust gas treatment systems.
II. Rishan Computer Accessories (Jiashan) Co., Ltd.
Wastewater: The plant implements the divergence of clean water and sewage and the divergence of rain and sewage, and
separately pretreats the wastewater containing chromium, nickel, phosphorus and nitro and organic wastewater and after they meet
the standards, then directly discharges them into the pipe. The pH, CODcr, SS and petroleum at the pipe inlet meet the Level 3
provided in Integrated Standards of Wastewater Discharge (GB8979-1996), and the ammonia nitrogen and total phosphorus are
80
Luxshare Precision Industry Co., Ltd. Annual Report 2021
lower than the relevant limits provided in the Restrictions on Indirect Discharge of Nitrogen and Phosphorus Pollutants from
Wastewater of Industrial Enterprises (DB33/887-2013); the discharge of Class-A pollutants such as total chromium, CR VI and
nickel are lower than the limits of indirect discharge to Taihu Lake Basin in the Table 1 of the Discharge Standards of Electroplating
Water Pollutants (DB33/2260-2020); CODcr and petroleum at the discharge outlet of phosphorus-containing wastewater treatment
facilities meet the Level 3 provided in the Integrated Standards of Wastewater Discharge (GB8978-1996); the total phosphorus is
lower than the relevant limits provided in the Restrictions on Indirect Discharge of Nitrogen and Phosphorus Pollutants from
Wastewater of Industrial Enterprises (DB33/887-2013); the pH and CODcr at the discharge outlet of nitro-containing wastewater
treatment facilities meet the Level 3 provided in Integrated Standards of Wastewater Discharge (GB8978-1996), and ammonia
nitrogen is lower than the relevant limits provided in the Restrictions on Indirect Discharge of Nitrogen and Phosphorus Pollutants
from Wastewater of Industrial Enterprises (DB33/887-2013); the pH, CODcr, SS and petrolem at the discharge outlet of organic
wastewater treatment facilities meet the Level 3 provided in Integrated Standards of Wastewater Discharge (GB8978-1996); in
general, the washing wastewater is collected separately, and after pretreament, some is reused while some is discharged. The total
reuse rate of production wastewater in two days is monitored at 31.0% and 32.4%, meeting the requirements. The online monitoring
facility is installed at the wastewater pipe inlet to monitor pH, CODcr, ammonia nitrogen and other factors; the standardized rain
outlets and signboards are set within the plant. The wastewater treatment facilities are built, including one accident emergency pool
covering an area of 2,776 m3 and two initial rain collection pools covering a total area of 806 m3.
Exhaust gas: The main production equipment are laid out in accordance with the environmental impact assessment: CNC
equipment is installed respectively at F1, F2 and F3 workshops; the anode line is arranged in F5 workshop; the volatile oil mist
generated by the workshops of CNC equipment (F1, F2 and F3) is treated by the supporting treatment facility (i.e., electrostatic oil
removal facility), and then emitted through a 25m-high exhaust funnel after it meets the Level 2 of the Integrated Emission Standards
of Air Pollutants (GB16297-1996); the particulate exhaust gas generated by the workshops of sandblast equipment (F1, F2 and F3) is
treated by the supporting treatment facility (i.e., spray tower), and then emitted through a 25m-high exhaust funnel after it meets the
Level 2 of the Integrated Emission Standards of Air Pollutants (GB16297-1996); the injection molding exhaust gas generated by the
workshops of the injection molding equipment (F5 and F9) is treated by the activated carbon adsorption device, and then emitted
through a 25m-high exhaust funnel after it meets the special emission limits of air pollutants provided in Table 5 of the Emission
Standards of Pollutants from Synthetic Resin Industry (GB31572-2015); the exhaust gas such as sulfuric acid mist and nitric acid
mist generated by the workshop of the anode line (F5) is treated by the supporting treatment facility (i.e., alkali liquor spray tower),
and then emitted through a 25m-high exhaust funnel after it meets the emission limits provided in Table 5 of the Emission Standards
of Electroplating Pollutants (GB21900-2008); the VOC exhaust gas generated by the assembly workshop is treated by the activated
carbon adsorption device, and then emitted through a 25m-high exhaust funnel after it meets the Level 2 provided in the Integrated
Emission Standards of Air Pollutants (GB16297-1996).
The plant is 420 meters away from its nearest sensitive point in the northwest, i.e., Maojia Community, meeting the
requirements.
Noise: According to the monitoring results, the noise at the east and south boundaries of the plant meets Class 3 of the Standards
on Noise Emissions at the Boundaries of Industrial Enterprises (GB12348-2008), and the noise at the west and north boundaries
meets Class 4 of the Standards on Noise Emissions at the Boundaries of Industrial Enterprises (GB12348-2008).
Solid waste: 1. A classified collection system is established for solid waste, which is classified into hazardous waste and general
solid waste. Meanwhile, the domestic waste and industry solid waste shall be divided on connection. The sludge produced by waste
water is separately pressed, filtered and collected through being classified into three types such as nickel containing sludge,
chromium containing sludge and physical and chemical sludge. 2. The temporary storage place for general solid waste is set up in the
production plant. General solid waste such as metal leftovers and injection molding waste is bagged and collected in the temporary
storage place according to the requirements. 3. A special temporary storage place for hazardous waste, covering an area of 648 m2, is
set up in the production plant to collect and temporarily store hazardous waste according to the relevant requirements. 4. The
temporary storage place for used sulfuric acid, phosphoric acid and other raw material packaging barrels is set up according to the
requirements of the temporary storage place for hazardous waste. 5. Metal leftovers, sandblast waste and collected dust, among
others, are sold to recycling companies for comprehensive utilization. The biochemical sludge produced by wastewater treatment is
collected and sent to the urban waste treatment system and domestic waste is uniformly transported and treated by the local
environmental sanitation department. 6. Hazardous waste such as waste cutting fluid, grinding waste residue, waste packaging
materials (sodium hydroxide, etc.), (sludge containing nickel and chromium, and physical and chemical sludge) is collected and
entrusted to qualified units for disposal.
III. Riming Computer Accessories (Shanghai) Co., Ltd.
1. Measures for noise pollution prevention: The outdoor equipment, the equipment close to the plant boundaries and the cooling
tower are environmentally friendly. Most equipment is installed in the workshop and on the roof of the workshop, a reasonable layout.
The basic shock absorption is made when the equipment is installed, the fan is equipped with silencer and the flexible connector is
used for the connection of blast pipes.
2. Measures for hazardous waste pollution prevention: The plant is equipped with the special hazardous waste cans and
warehouses, implements the “Three Prevention” system and carries out irregular self check and self correction;
3. Measures for exhaust gas pollution prevention: A regular check is carried out for the completeness of the waste gas tower
body, liquid tank, spray system, filling materials, gas-liquid separator, etc., and the filling materials are replaced in time; after the air
volume of the extraction equipment is adjusted and balanced, the full-automatic control is adopted so that each extraction point falls
within a reasonable air volume range.
4. Measures for wastewater pollution prevention: The principle of divergence is implemented. Different kinds of wastewater
enter the corresponding sewage pool through different pipes. The pipes are overhead and pasted with signs of flow direction. The
completeness of the pipes is checked regularly, and any abnormality, if found, will be handled immediately. All pools and floors of
the sewage station are paved and hardened for anti seepage and anti corrosion.
IV. Sheng Rui Electronic Technology (Shanghai) Co., Ltd.
1. Measures for noise pollution prevention: The outdoor equipment, the equipment close to the plant boundaries and the cooling
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
tower are environmentally friendly. Most equipment is installed in the workshop and on the roof of the workshop, a reasonable layout.
The basic shock absorption is made when the equipment is installed, the fan is equipped with silencer and the flexible connector is
used for the connection of blast pipes.
2. Measures for hazardous waste pollution prevention: The plant is equipped with the special hazardous waste cans and
warehouses, implements the “Three Prevention” system and carries out irregular self check and self correction;
3. Measures for exhaust gas pollution prevention: A regular check is carried out for the completeness of the waste gas tower
body, liquid tank, spray system, filling materials, gas-liquid separator, etc., and the filling materials are replaced in time; after the air
volume of the extraction equipment is adjusted and balanced, the full-automatic control is adopted so that each extraction point falls
within a reasonable air volume range.
4. Measures for wastewater pollution prevention: The principle of divergence is implemented. Different kinds of wastewater
enter the corresponding sewage pool through different pipes. The pipes are overhead and pasted with signs of flow direction. The
completeness of the pipes is checked regularly, and any abnormality, if found, will be handled immediately. All pools and floors of
the sewage station are paved and hardened for anti seepage and anti corrosion.
Environmental impact assessment of construction projects and other environmental protection administrative permits
I. Rikai Precision Technology (Yancheng) Co., Ltd.
Area B: 1. Impact of wastewater discharge on main protection objectives. After this project is completed, the comprehensive
wastewater produced by the whole plant will be 942,900t/a (2,694t/d), representing 22.5% of the comprehensive wastewater
treatment capacity (i.e., 12,000 t/d); the heavy metal wastewater produced by the whole plant will be 168,700t/a (482t/d), but the
wastewater treatment capacity (150t/d) of the heavy metal wastewater treatment center currently in progress cannot meet the
requirements of heavy metal wastewater treatment capacity after completion of this project. Therefore, it is feasible to connect the
pipes for the heavy metal wastewater of this project only if the heavy mental treatment center’s treatment capacity meets the heavy
mental wastewater volume of this project. 2. Impact analysis of air environment. The maximum ground concentration of each
pollutant is less than 10% of its corresponding standards, and the predicted maximum concentration value based on calculation plus
the maximum value based on monitoring of regional pollutants also meet the standards. Therefore, the air quality of the surrounding
environmental sensitive points can meet the requirements notwithstanding under most unfavorable conditions. As can be seen, the
pollutants discharged by the project have little impact on the environment and will not change the functions of the surrounding air
environment. 3. Impact of noise on the surrounding environment. The Company has implemented the corresponding sound insulation
measures, and accordingly the predicted noise value at the boundaries of the whole plant during the day and at night meets Level 3
provided in the Standard on Noise Emissions at the Boundaries of Industrial Enterprises (GB12348-2008). 4. Environmental impact
of solid waste. The solid waste produced by this project can realize zero discharge without secondary pollution after being properly
treated and disposed. 5. Impact analysis of groundwater environment. According to the prediction results of groundwater, on the
abnormal working conditions, namely, if the sewage state has continuous leakage, the maximum contribution value is 45.309mg/L
when the concentration of Cr VI at 10m downstream is 1000d, and with reference to the standard (Level 3 of groundwater quality
standard is 0.05mg/L), Cr VI of the groundwater (100d and 1000d) at 100m downstream meets the Level 3 standard; the maximum
contribution value is 181.237 mg/L when the concentration of Ni at 10m downstream is 1000d, and with reference to the standard
(Level 3 of groundwater quality standard is 0.05mg/L), the Ni of the groundwater (100d and 1000d) at 200m downstream meets the
Level 3 standard.
Area C: 1. Impact on air environment: According to the calculation results of air estimation model, the maximum ratio of each
pollutant is less than 10% of the rating standards after completion of this project, and is determined as Level 2. After technology
transformation, the unorganized exhaust gas emission in Area C does not exceed the standards outside the plant boundaries. The
health protection distance is required to be set by extending 100m outside the C4-C7 production workshops, namely, by extending
33m outside the east boundary of the plant, 12m outside the west boundary of the plant and 80m outside the north boundary of the
plant. There are no sensitive protection targets such as residents within the above-mentioned scope. 2. Impact on water environment:
After the technology transformation project is completed, the heavy metal wastewater in area C is treated by the heavy metal zero
discharge system and then reused in the anodic oxidation process; the wet polishing wastewater is treated by the wet polishing
wastewater treatment facility and then reused in the wet polishing process; after the chemical polishing wastewater is treated by the
phosphoric acid concentration system, the waste acid is entrusted to a qualified unit for treatment; the wastewater and cooling water
produced by pure water preparation are discharged as clean water; the initial rain collected and comprehensive sewage after being
treated by the comprehensive sewage station are sent to Yancheng City Tongqi Water Co., Ltd. for in-depth treatment, and the
domestic sewage after being treated by septic pool is sent to Yancheng City Tongqi Water Co., Ltd. for in-depth treatment. The
project has little impact on the regional surface water environment. 3. Impact on acoustic environment: After technology
transformation, the high noise sources in Area C are rationally laid out and effectively governed, which has little impact on the plant
boundaries and surrounding residents. 4. Impact of solid waste After technology transformation, the solid waste in Area C are
effectively treated and treated, which has little impact on the environment. 5. Impact on groundwater environment: After technology
transformation, the zoning prevention and control measures are taken towards potential impact on groundwater and soil, with the aim
to effectively preventing the leachate or wastewater seeping into and polluting groundwater. Therefore, this project has little impact
on groundwater environment. 6. Impact on risk environment: After the technology transformation, the reasonable risk prevention
measures and emergency plans are taken and formulated in Area C to ensure that the risk level will fall within a controllable and
bearable scope.
To sum up, this project has little impact on regional environment quality and will not change its functions and categories.
II. Rishan Computer Accessories (Jiashan) Co., Ltd.
Shan Huan Han [2016] No. 91, Bao Gao Biao Bei [2017] No. 010, Bao Gao Biao Bei [2017] No. 013, Shan Huan Han [2018]
No. 91 and Deng Ji Baio Bei [2020] No. 088.
III. Riming Computer Accessories (Shanghai) Co., Ltd.
Jin Huan Xu [2012] No. 34, Jin Huan Xu [2014] No. 479, Jin Huan Xu [2015] No. 195, Jin Huan Xu [2015] No. 323, Jin Huan
82
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Xu [2018] No. 170, Jin Huan Xu [2019] No. 254, and Jin Huan Xu [2020] No. 27.
IV. Sheng Rui Electronic Technology (Shanghai) Co., Ltd.
Jin Huan Xu [2012] No. 544, Jin Huan Yan [2012] No. 62, Jin Huan Yuan [2014] No. 126, Jin Huan Xu [2018] No. 187, Jin
Huan Xu [2020] No. 245, and the Pollution Discharge Permit No.: 91310000575815657F001P.
Emergency plan for abrupt environmental pollution accidents
I. Rikai Precision Technology (Yancheng) Co., Ltd.
Yancheng Luxcase has formulated the Emergency Plan for Abrupt Environmental Pollution Accidents.
II. Rishan Computer Accessories (Jiashan) Co., Ltd.
In September 2021, Rishan Computer has prepared the Emergency Plan for Abrupt Environmental Pollution Accidents (3rd
Edition), and has completed the formalities for expert review and filing with the filing No.: 330421-2021-105-M.
III. Riming Computer Accessories (Shanghai) Co., Ltd.
Riming Computer has prepared the Emergency Plan within the valid term and suitable to the plant, and has filed with the
ecological environment bureau with filing No.: 02-310116-2019-048-L.
IV. Sheng Rui Electronic Technology (Shanghai) Co., Ltd.
Sheng Rui Electronic has prepared the Emergency Plan within the valid term and suitable to the plant, and has filed with the
ecological environment bureau with filing No.: 02-310116-2021-022-M.
Environmental self-monitoring program
I. Rikai Precision Technology (Yancheng) Co., Ltd.
Rikai Yancheng has formulated the Monitoring Program in accordance with the environment impact assessment report.
II. Rishan Computer Accessories (Jiashan) Co., Ltd.
Rishan Computer has prepared the Self-monitoring program for 2022 in December 2021 to test the organized exhaust gas at the
emission outlet once every half a year, the unorganized exhaust gas once a year, indicators of suspended solids and petroleum at the
inlet of wastewater once a month, indicators of total chromium, Cr VI and total nickel once a day and noise once a quarter.
III. Riming Computer Accessories (Shanghai) Co., Ltd.
Riming Computer updates the Environmental Self-monitoring Program in accordance with the requirements of the pollutant
discharge license and environment assessment, and entrusts a qualified third-party monitoring agency with sampling, testing and
issuing a compliance report.
IV. Sheng Rui Electronic Technology (Shanghai) Co., Ltd.
Riming Computer updates the Environmental Self-monitoring Program in accordance with the requirements of the pollutant
discharge license and environment assessment, and entrusts a qualified third-party monitoring agency with sampling, testing and
issuing a compliance report.
Administrative penalties imposed due to environmental issues during the reporting period
Name of the Effects on the
Company or listed company’s
Reasons for penalty Violations Penalty results Rectification measures of the Company
its production and
subsidiaries operation
On November 3, 1. An independent wastewater pipe will
2020, Jiaxing be added in the north within the plant,
Ecological through which the pretreated production
Environment Rishan wastewater meeting the standard will be
Bureau checked Computer is the transmitted to the main discharge outlet.
Rishan’s plant subsidiary of A parshall flume will be built at the main
located at No. 89 Violate the Rikai Computer discharge outlet, and a set of automatic
Changjiang Road, provisions On February 4, 2021, (now known as monitoring device meeting the
Huimin Street, of Article 10 Jiaxing Ecological Rikai Yancheng) standardization requirements will be
Jiashan County, and of the Law Environment Bureau when the newly installed to monitor the quality of
Rishan
discovered that the of the imposed an Company production wastewater. The original
Computer
People’s Administrative consummated
Accessories total phosphorus wastewater pipe will be used for
concentration of the Republic of Penalty (Jia Huan the closing on domestic sewage discharge, and the
(Jiashan)
wastewater at its China on the (Shan) Fa Zi [2021] February 3, original online monitoring device is used
Co., Ltd.
main sewage Prevention No. 3) amounting to 2021. This for internal monitoring of domestic
discharge outlet is and Control RMB250,000 on administrative sewage quality. After transformation, the
9.66mg/L, of Water Rishan Computer. penalty has no Company’s internal domestic sewage
exceeding Level 1 Pollution. effects on the and the production wastewater are
provided in Table 1 Company’s diverged. The independent online
of the Restrictions production and monitoring system monitors the water
on Indirect operation. quality, facilitating future environmental
Discharge of protection monitoring and management
Nitrogen and work. Once abnormal data exceeding the
Phosphorus standards are found, the response
83
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Pollutants from measures can be taken immediately to
Wastewater of stop the discharge of corresponding
Industrial water sources until they meet the
Enterprises discharge requirements of environmental
(DB33/887-2013), protection. 2. The emergency pool and
namely, 8mg/L. sewage pipe are checked on a regular
basis every year, and the manufacturer is
arranged to flush the rain and sewage
pipe network at least once a year. 3. The
environmental protection risk
assessment, the environmental protection
measure acceptance, and process
monitoring and management are strictly
implemented towards the new,
reconstructed, expanded
projects/production processes.
Other environment information to be disclosed
N/A
Measures taken to reduce carbon emissions during the reporting period and their effects
√ Applicable □ N/A
The Company’s 2021 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn), the information
disclosure website designated by the Company, together with this report on the same day.
Other environmental information
The Company’s 2021 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn), the information
disclosure website designated by the Company, together with this report on the same day.
II. Social responsibility
The Company’s 2021 Sustainable Development Report has been published at Cninfo (www.cninfo.com.cn), the information
disclosure website designated by the Company, together with this report on the same day.
III. Consolidation and expansion of poverty alleviation and rural revitalization
The Company did not carry out the work on poverty alleviation and rural revitalization during the reporting period or have
subsequent relevant plans.
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Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section VI Significant Events
I. Performance of commitments
1. Complete and incomplete commitments of the Company and its actual controller, shareholders, related
parties, acquirers, and other related parties for the commitments by the end of the reporting period.
√ Applicable □ N/A
Date of Term of
Giver of Commitmen Performa
Commitments Details of commitments commitment commitme
commitments t type nce
s nts
Commitments relating to the
transformation into share holding
system
Commitments made in any acquisition
report or report on changes in equity
Commitments relating to any asset
restructuring
Pursuant to the applicable
regulations of the China
Securities Regulatory
Commission, in order to
ensure the implementation
of the remedial measures
HUANG
for diluted earnings of the
Dawei, LI Company, each of the
Bin, LIN directors and executives
of the Company hereby
Yifei, WANG
commitments as follows:
Laichun, 1. I will not transfer The
WANG benefits to any other commitm
Commitments relating to any initial Other entity or individual
Laisheng, WU ents have
public offering or subsequent fund commitment without compensation or July 11,2019 Permanent
Tiansong, been
raising s on unfair terms, or
XIONG otherwise damage the fulfilled
Tengfang, XU interest of the Company. strictly
2. I will exercise
Huaibin, XUE
self-discipline in
Haigao, YE consumption in
Yiling, performing my duties.
3. I will not use the assets
ZHANG Ying
of the Company to engage
in any investment or
consumption activity not
in connection with my
duties.
4. I will, within my
85
Luxshare Precision Industry Co., Ltd. Annual Report 2021
powers, procure the
linkage between the
compensation system
adopted by the Board of
Directors or the
Compensation and
Performance Appraisal
Committee and the
implementation of the
Company’s remedial
measures for diluted
earnings.
5. I will, within my
powers, procure the
linkage between the
vesting conditions in
respect of any share
incentives granted by the
Company and the
implementation of the
Company’s remedial
measures for diluted
earnings.
6. I undertake to strictly
fulfill the commitments
set forth above, to ensure
the implementation of the
remedial measures for
diluted earnings of the
Company. If I breach or
refuse to fulfill any
commitment set forth
above, I will make
explanations and
apologies and perform
other obligations required
by the applicable
regulations, and agree to
accept any punishment or
regulatory action that may
be imposed on or taken
against me by the China
Securities Regulatory
Commission, the
Shenzhen Stock Exchange
or any other competent
securities regulatory
authority pursuant to the
applicable rules and
regulations established or
promulgated by such
regulatory authorities, and
indemnify the Company
or its shareholders for the
losses (if any) arising
therefrom according to
law.
86
Luxshare Precision Industry Co., Ltd. Annual Report 2021
In order to seriously
protect the legitimate
rights and interests of the
Company and all of its
shareholders, each of the
controlling shareholder
and actual controllers of
the Company hereby
commitments as follows:
1. We/I will not interfere
with management and
operation of the Company
beyond our/my powers, or
infringe on the interest of
the Company.
2. We/I will procure the
implementation of the
remedial measures for
diluted earnings of the
Company, and fulfill
our/my commitments in
connection therewith. If
We/I breach or refuse to
fulfill any commitment set
forth above, We/I agree to
Luxshare accept any punishment or The
regulatory action that may
Limited, commitm
Other be imposed on or taken
WANG against us/me by the July 11, ents have
commitment Permanent
Laichun, China Securities 2019 been
s Regulatory Commission,
WANG fulfilled
the Shenzhen Stock
Laisheng Exchange or any other strictly
competent securities
regulatory authority
pursuant to the applicable
rules and regulations
established or
promulgated by such
regulatory authorities, and
indemnify the Company
or the investors for the
losses (if any) arising
therefrom according to
law.
3. From the date of this
commitment till the date
of completion of this
offering, if the China
Securities Regulatory
Commission or any other
competent securities
regulatory authority
adopts any new regulation
regarding the remedial
measures for diluted
earnings and
commitments in
87
Luxshare Precision Industry Co., Ltd. Annual Report 2021
connection therewith, and
the commitments set forth
above do not satisfy the
requirements of such new
regulation, We/I will make
supplementary
commitments pursuant to
the new regulation.
Luxshare Limited, as the
controlling shareholder of
the Company, and WANG
Laichun and WANG
Laisheng, as the actual
controllers of the
Company, hereby
commitment as follows:
1. We, Luxshare Limited,
as the controlling
shareholder of the
Company, undertake not
to interfere with
management and
operation of the Company
beyond our powers, or
infringe on the interest of
the Company.
2. I, WANG Laichun, as
the actual controller,
Chairman and General
Luxshare Manager of the Company, The
undertake to perform my
Limited, commitm
Other duties in accordance with
WANG the applicable laws and March 11, ents have
commitment Permanent
Laichun, regulations and the 2016 been
s articles of association of
WANG fulfilled
the Company, and not to
Laisheng interfere with strictly
management and
operation of the Company
beyond my powers, or
infringe on the interest of
the Company.
3. I, WANG Laisheng, as
the actual controller and
Vice Chairman of the
Company, undertake to
perform my duties in
accordance with the
applicable laws and
regulations and the
articles of association of
the Company, and not to
interfere with
management and
operation of the Company
beyond my powers, or
infringe on the interest of
the Company.
88
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Each of the directors and
executives of the
Company hereby
commitments as follows:
(1) I will not transfer
benefits to any other
entity or individual
without compensation or
on unfair terms, or
otherwise damage the
interest of the Company.
(2) I will exercise
BAI Rujing, self-discipline in
CHEN consumption in
performing my duties.
Chaofei, (3) I will not use the
DONG assets of the Company to
Jianhai, LI engage in any investment
or consumption activity
Bin, LI Jing,
not in connection with my The
LI Xiongwei, duties.
commitm
LIN Yifei, Other (4) I will procure the
linkage between the March 11, ents have
WANG Ji, commitment Permanent
compensation system 2016 been
WANG s adopted by the Board of
fulfilled
Laichun, Directors or the
Compensation and strictly
WANG
Performance Appraisal
Laisheng, XU Committee and the
Huaibin, YE implementation of the
Yiling, Company’s remedial
measures for diluted
ZHANG
earnings.
Lihua (5) If the Company
establishes any share
incentive plan in the
future, I will procure the
linkage between the
vesting conditions in
respect of any share
incentives granted by the
Company and the
implementation of the
Company’s remedial
measures for diluted
earnings.
Commitmen The commitments relating
to horizontal competition,
ts relating to
related-party transactions The
horizontal and occupation of funds
commitm
competition, are as follows:
Luxshare 1. We and all other entities October 15, ents have
related-party Permanent
Limited controlled by us at present 2014 been
transactions or in the future will not,
fulfilled
and directly or indirectly,
engage in any business or strictly
occupation
activity that competes or
of funds might compete or
89
Luxshare Precision Industry Co., Ltd. Annual Report 2021
potentially compete with
the main business of the
Company.
2. If any amendment of
any applicable law or
change in any applicable
policy of the country
results in any actual or
potential horizontal
competition between us or
any other entity controlled
by us and the Company in
any business, the
Company shall have the
preemptive right on the
same terms in respect of
any entrusted
management (or
management under
contract or lease) or
acquisition in connection
with such business.
3. So long as we remain
the controlling
shareholder of the
Company, the
commitments set forth
above shall be
unconditional and
irrevocable. If we breach
any commitment set forth
above, we will, jointly and
severally, fully, timely and
adequately indemnify the
losses of the Company
arising therefrom.
The commitments relating
to horizontal competition,
related-party transactions
Commitmen and occupation of funds
ts relating to are as follows:
1. We and other entities The
horizontal
controlled by us will commitm
competition, reduce related-party October 15,
Luxshare ents have
related-party transactions with the Permanent
Limited 2014 been
transactions Company to the maximum
extent practicable. fulfilled
and
2. With respect to any strictly
occupation related-party transaction
of funds between us or any other
entity controlled by us and
the Company that is
unavoidable or exists
90
Luxshare Precision Industry Co., Ltd. Annual Report 2021
reasonably, we will carry
out such transaction on an
arm’s length basis and
customary commercial
terms, ensure the fairness
of the transaction price,
perform the relevant
decision-making process
according to law, and
guarantee that the
legitimate rights and
interests of the Company
and its shareholders will
not be damaged as a result
of such transaction.
3. We or any other entity
controlled by us will not
request the Company to
offer any terms more
favorable than the terms
that may be offered by
any third party in an arm’s
length transaction, or
accept any such terms
offered by the Company.
4. So long as we remain
the controlling
shareholder of the
Company, the
commitments set forth
above shall be
unconditional and
irrevocable. If we breach
any commitment set forth
above, we will, jointly and
severally, fully, timely and
adequately indemnify the
losses of the Company
arising therefrom.
The commitments relating
Commitmen to horizontal competition,
ts relating to related-party transactions
The
horizontal and occupation of funds
WANG commitm
competition, are as follows: I and other
Laichun, July 30, ents have
related-party entities controlled by me Permanent
WANG 2010 been
transactions are not engaged in any
Laisheng fulfilled
and business that is the same
strictly
occupation as or similar to the
of funds business of the Issuer or
any entity controlled by
91
Luxshare Precision Industry Co., Ltd. Annual Report 2021
the Issuer. So long as I
retain control over the
Issuer directly or
indirectly, I will strictly
comply with the
applicable laws,
regulations and codes of
the country, and will not,
directly or indirectly,
engage in any business
that is the same as, similar
to or substantially in
competition with the
business of the Issuer or
any entity controlled by
the Issuer, or have
substantial or relative
control over any other
company, organization or
economic entity engaging
in any business that is the
same as, similar to or
substantially in
competition with the
business of the Issuer or
any entity controlled by
the Issuer in or outside
China. I will use my
control over the other
entities controlled by me
to cause such entities to
fulfill the commitments
set forth above in the
same manner. If I breach
any commitment set forth
above, I agree to assume
the relevant legal
liabilities, including
without limitation, to
indemnify the Issuer and
its minority shareholders
for all losses arising
therefrom.
Luxshare Commitmen The commitments relating July 30, Permanent The
92
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Limited, ts relating to to horizontal competition, 2010 commitm
Shenzhen horizontal related-party transactions ents have
Zixin competition, and occupation of funds been
Investment related-party are as follows: We are not fulfilled
Co., Ltd. transactions engaged in any business strictly
and that is the same as or
occupation similar to the business of
of funds the Issuer or any entity
controlled by the Issuer.
So long as we retain
control over the Issuer
directly or indirectly, we
will strictly comply with
the applicable laws,
regulations and codes of
the country, and will not,
directly or indirectly,
engage in any business
that is the same as, similar
to or substantially in
competition with the
business of the Issuer or
any entity controlled by
the Issuer, or have
substantial or relative
control over any other
company, organization or
economic entity engaging
in any business that is the
same as, similar to or
substantially in
competition with the
business of the Issuer or
any entity controlled by
the Issuer in or outside
China. We will use our
control over the other
entities controlled by us to
cause such entities to
fulfill the commitments
set forth above in the
same manner. If we
breach any commitment
set forth above, we agree
93
Luxshare Precision Industry Co., Ltd. Annual Report 2021
to assume the relevant
legal liabilities, including
without limitation, to
indemnify the Issuer and
its minority shareholders
for all losses arising
therefrom.
The commitments relating
to horizontal competition,
related-party transactions
and occupation of funds
are as follows: We/I will
not take advantage of
our/my position as the
controlling shareholder,
actual controller or
shareholder (as
applicable) and our/my
affiliation with the Issuer
to engage in any act to the
detriment of the interest of
Luxshare
Commitmen the Issuer or its other
Limited,
ts relating to shareholders. With respect
Shenzhen The
horizontal to any related-party
Zixin commitm
competition, transaction between us/me
Investment July 30， ents have
related-party or any other entity Permanent
Co., Ltd., 2010 been
transactions controlled by us/me and
WANG fulfilled
and the Issuer, we/I will carry
Laichun, strictly
occupation out such transaction on an
WANG
of funds arm’s length basis and
Laisheng
customary commercial
terms, and will not request
the Issuer to offer any
terms more favorable than
the terms that may be
offered by any third party
in an arm’s length
transaction, or accept any
such terms offered by the
Issuer. We/I will strictly
perform all related-party
transaction agreements (if
any) entered into with the
Issuer in good faith, and
94
Luxshare Precision Industry Co., Ltd. Annual Report 2021
will not seek any interest
or benefit in contravention
of the commitments set
forth above. If we/I breach
any commitment set forth
above, we/I agree to
indemnify the Issuer and
its minority shareholders
for all losses arising
therefrom.
Luxshare Limited, as the
controlling shareholder of
The
the Company, hereby
commitm
Other undertakes not to sell any
Luxshare February 3, February ents have
commitment share of the Company
Limited 2021 2, 2022 been
s through the stock trading
fulfilled
system within 12 months
strictly
after the completion of
this disposal.
After the completion of
the transactions
contemplated by the
announcement on external
Commitmen investment and
ts relating to related-party transactions
The
horizontal disclosed by the Company
Commitments relating to share commitm
competition, on November 13, 2020,
incentives Luxshare November ents have
related-party we and our affiliates will Permanent
Limited 13, 2020 been
transactions not engage in any
fulfilled
and business that is the same
strictly
occupation as or substantially in
of funds competition with the
business of the Company
or any entity controlled by
the Company in any
manner.
Luxshare Limited, as the
controlling shareholder of
Other the Company, hereby
Luxshare July 22, February
commitment undertakes not to sell any Fulfilled
Limited 2020 2, 2022
s share of the Company
through the stock trading
system within 6 months
95
Luxshare Precision Industry Co., Ltd. Annual Report 2021
after the completion of
this disposal.
Commitments made to the minority
shareholders of the Company
Whether the commitments have been
Yes
fulfilled on time?
If any commitment fails to be fulfilled
on time, please state the specific N/A
reason and the relevant action plan
2. If the Company has made any profit forecast on its assets or project and the reporting period falls within
the period of such profit forecast, explanation about whether the goal has been achieved and the relevant
reasons
□ Applicable √ N/A
II. Occupation of funds of the listed company by the controlling shareholder and other related
parties for non-operating purposes
□ Applicable √ N/A
During the reporting period, no controlling shareholder or its related party used capital of the listed company for non-operating
purposes.
III. Illegal provision of guarantees for external parties
□ Applicable √ N/A
We have not provided any external guarantee in contravention of the applicable regulations during the reporting period.
IV. Explanation made by the Board of Directors about the modified audit opinion for the
latest period
□ Applicable √ N/A
V. Explanation by the Board of Directors, the Board of Supervisors and the independent
directors (if any) about the modified auditor’s report issued by the accounting firm for the
reporting period
□ Applicable √ N/A
VI. Explanation about changes in accounting policies and accounting estimates or correction
of significant accounting errors when compared to the previous financial year
□ Applicable √ N/A
96
Luxshare Precision Industry Co., Ltd. Annual Report 2021
The Company has no changes in accounting policies and accounting estimates or correction of significant accounting errors during
the reporting period.
VII. Explanation about changes in consolidation scope when compared to the previous
financial year
√ Applicable □ N/A
The consolidation scope for this period adds by new establishment Luxis Technology Limited, Luxshare Precision Industry
(Yancheng) Co., Ltd., Hangzhou Xuntao Technology Co., Ltd., Rugao Lixun Enterprise Management Service Partnership (Limited
Partnership), Lianxun Intelligent Equipment (Rugao) Co., Ltd., Luxshare Precision Technology (Xi’an) Co., Ltd., Luxshare
Electronic Technology (Enshi) Co., Ltd., Lixin Technology (Kunshan) Co., Ltd., Luxshare Precision Investment Co., LTd.,
Yancheng Lixun Enterprise Management Service Partnership (Limited Partnership), Lixun Intelligent Equipment (Yancheng) Co.,
Ltd., Luxis Precision Intelligent Manufacturing (Kunshan) Co., Ltd., Lixun Intelligent Electronic Service (Kunshan) Co., Ltd., Liding
Electronic Technology (Dongguan) Co., Ltd., Luxshare Precision Technology (Nanjing) Co., Ltd., Henan Lide Precision Industry
Co., Ltd. and Changzhi Lixun Precision Industry Co., Ltd.; the consolidation scope adds by cash acquisition Rikai Precision
Technology (Yancheng) Co., Ltd., Zhejiang Puxing Electronic Technology Co., Ltd.; the consolidation scope addes by agreement
control Caldigit Holding (Cayman) and Tainhan Precision Co., Ltd.; the shares held in Wuxi Huihong Electronics Co., Ltd. are
transferred during this period, so it is not included in the consolidation scope; Ji’an City Jihzou District Lixun Electronics Co., Ltd.,
Speedtech (LS-ICT) Co., Limited, Lixun International Cable Co., Ltd. and Luxshare-ICT International B.V. are cancelled by
liquidation, so they are not included in the consolidation scope.
VIII. Appointment and dismissal of accounting firms
Accounting firm currently engaged:
Name of domestic accounting firm BDO China Shu Lun Pan Certified Public Accountants LLP
Remuneration of domestic accounting firm (in RMB0’000) 230
Consecutive years in which the domestic accounting firm has
14
provided auditing service
Certified public accountant of the domestic accounting firm LI Jing, WEI Gang
Consecutive years in which the certified public accountant of the
5
domestic accounting firm has provided auditing service
Name of foreign accounting firm (if any) None
Remuneration of foreign accounting firm (in RMB0’000) (if any) 0
Consecutive years in which the foreign accounting firm has
None
provided auditing service (if any)
Certified public accountant of the foreign accounting firm (if
None
any)
Consecutive years in which the certified public accountant of the None
97
Luxshare Precision Industry Co., Ltd. Annual Report 2021
foreign accounting firm has provided auditing service (if any)
Whether a new accounting firm was engaged during the reporting period?
□ Yes √ No
Engagement of accounting firm for auditing internal controls, financial advisor or sponsor:
□ Applicable √ N/A
IX. Possibility of listing suspension and termination after disclosure of the annual report
□ Applicable √ N/A
X. Matters relating to bankruptcy and reorganization
□ Applicable √ N/A
We have not been involved in any bankruptcy or reorganization proceedings during the reporting period.
XI. Material litigation and arbitration proceedings
√ Applicable □ N/A
Amount Whether a Enforcement of Information
Date of
Background claimed provision is Status Result and effect judgment/ disclosure
disclosure
(RMB0’000) recognized award available at
The case has been
settled/ closed by
Other litigation Closed by
mediation or won,
during the reporting 89.57 No Closed mediation or N/A
and does not have
period enforced
a material effect
on us.
The case is
Other litigation pending, and will
during the reporting 47,706.74 No Pending not have a Pending N/A
period material effect on
us.
XII. Penalty and rectification
□ Applicable √ N/A
We have not been subject to any punishment or required to make any rectification during the reporting period.
98
Luxshare Precision Industry Co., Ltd. Annual Report 2021
XIII. Integrity of the Company, its controlling shareholder and actual controller
√ Applicable □ N/A
There wasn’t any outstanding court judgment or overdue debt of a large amount involving us or our controlling shareholder or actual
controllers during the reporting period.
XIV. Material related-party transactions
1. Related-party transactions relating to day-to-day operation
√ Applicable □ N/A
Approv
% of the Market
ed limit
total Whethe price
of
Related- Amount amount r or not Method availabl
Pricing Transact transacti Date of Information
Counterp Relation party (in of the exceed of e for the
Type principl ion on disclosu disclosure
arty ship transacti RMB0’ same the settleme same
e price amount re available at
ons 000) type of approve nt type of
(in
transacti d limit transacti
RMB0’
ons ons
000)
Announcement
Purchas on Expected
e of Daily Related
Related Purchasi Market- Fair Fair April
BCS goods Bank Party
legal ng set market 370.89 0.00% 200 Yes market 21,
Suzhou from transfer Transactions for
person goods prices price price 2021
related 2021
party (Announcement
No.: 2021-039)
Announcement
on Expected
Sales of Daily Related
Related Market- Fair Fair April
BCS goods to Sales of 21,871. Bank Party
legal set market 0.14% 27,500 No market 21,
Suzhou related goods 71 transfer Transactions for
person prices price price 2021
persons 2021
(Announcement
No.: 2021-039)
Announcement
on Expected
Sales of
Related Market- Fair Fair Added Daily
Luxsan goods to Sales of 41,714. Bank October
legal set market 0.27% 50,000 No market Related Party
Kunshan related goods 73 transfer 8, 2021
person prices price price Transactions for
persons
2021
(Announcement
99
Luxshare Precision Industry Co., Ltd. Annual Report 2021
No.: 2021-081)
63,957.
Total -- -- -- 77,700 -- -- -- -- --
33
Particulars of huge-amount sales
N/A
returns
If the total amount of daily When expecting the annual daily related party transactions, the Company conducts the appraisal and
related-party transactions that are calculation of possible related party transactions according to the market situation, but the actually
expected to occur during the reporting accrued amount is determined based on market situation, the two parties’ business development,
period is estimated by type, the actual actual demands and specific implementation progress, resulting in certain differences between
transactions occurred during the actually accrued amount and expected amount. The foregoing belongs to the acts of normal business
reporting period (if any) and will not have a significant impact on daily operation and performance of the Company.
Reason of any great difference
between transaction price and N/A
reference market price (if applicable)
2 Related-party transactions involving acquisition or sales of assets or equities
□ Applicable √ N/A
We have not conducted any related-party transaction involving acquisition or sales of assets or equities during the reporting period.
3. Related-party transactions involving joint external investment
□ Applicable √ N/A
The Company had no related-party transactions on joint investments during the reporting period.
4. Accounts receivable from and payable to related parties
□ Applicable √ N/A
We did not have any accounts receivable from or payable to any related party during the reporting period.
5. Financial business with its related financial companies
□ Applicable √ N/A
There are no deposits, loans, credits or other financial transactions between the Company, its related financial companies and related
parties.
6. Financial business between the financial companies controlled by the Company and related parties
□ Applicable √ N/A
There are no deposits, loans, credits or other financial transactions between the financial companies controlled by the Company and
related parties.
100
Luxshare Precision Industry Co., Ltd. Annual Report 2021
7. Other significant related-party transactions
□ Applicable √ N/A
We have not conducted any other material related-party transaction during the reporting period.
XV. Significant contracts and performance thereof
1. Trusteeship, contracting and leases
(1) Trusteeship
□ Applicable √ N/A
No such case during the reporting period.
(2) Contracting
□ Applicable √ N/A
No such case during the reporting period.
(3) Leases
□ Applicable √ N/A
No such case during the reporting period.
2. Material guarantees
√ Applicable □ N/A
In RMB0’000
External guarantees provided by the Company and its subsidiaries (excluding those provided for the subsidiaries)
Disclosure
Whether
date of
Counter or not
announcem Maximum Effective Actual Whether
Type of Collateral guarant Term of provided
Obligor ent on the amount date of amount or not
guarantee (if any) ee (if guarantee for a
maximum guaranteed guarantee guaranteed expired
any) related
amount
party
guaranteed
Guarantees provided by the Company for its subsidiaries
Disclosure Whether
date of Counter or not
Maximum Effective Actual Whether
announcem Type of Collateral guarant Term of provided
Obligor amount date of amount or not
ent on the guarantee (if any) ee (if guarantee for a
guaranteed guarantee guaranteed expired
maximum any) related
amount party
101
Luxshare Precision Industry Co., Ltd. Annual Report 2021
guaranteed
LUXSHAR
Joint and
E April 20, Five
510,056 July 20, 2020 several No Yes
PRECISIO 2020 years
guarantee
N
LUXSHAR
Joint and
E April 20, June 29,
9,563.55 several A year No Yes
PRECISIO 2021 2021
guarantee
N
ICT-LANT
O/LUXSH Joint and
April 20,
ARE 277,342.95 several A year No Yes
2021
PRECISIO guarantee
N
LUXSHAR
Joint and
E April 20, July 28, Five
63,119.43 several No Yes
PRECISIO 2021 2021 years
guarantee
N
Total amount of Total amount of
guarantee approved to guarantee actually
be provided for 350,025.93 provided for subsidiaries
subsidiaries during the during the reporting
reporting period (B1) period (B2)
Total amount of
Total amount of
guarantee approved to
guarantee actually
be provided for
860,081.93 provided for subsidiaries
subsidiaries as at the end
as at the end of the
of the reporting period
reporting period (B4)
(B3)
Guarantees provided by subsidiaries for each other
Disclosure
Whether
date of
Counter or not
announcem Maximum Effective Actual Whether
Type of Collateral guarant Term of provided
Obligor ent on the amount date of amount or not
guarantee (if any) ee (if guarantee for a
maximum guaranteed guarantee guaranteed expired
any) related
amount
party
guaranteed
Total amount of guarantee provided by the Company
Total amount of guarantee Total amount of
approved during the reporting 350,025.93 guarantee actually
period (A1+B1+C1) provided during the
102
Luxshare Precision Industry Co., Ltd. Annual Report 2021
reporting period
(A2+B2+C2)
Total amount of
Total amount of guarantee guarantee actually
approved as at the end of the 860,081.93 provided as at the end of
reporting period (A3+B3+C3) the reporting period
(A4+B4+C4)
Ratio of total amount of guarantee actually
provided (A4+B4+C4) to the net assets of the 0.00%
Company
Including:
Outstanding guarantees provided for shareholders,
0
actual controller and their affiliates (D)
Explanation about warranty liability already
incurred or possible several and joint liquidation
None
liability shown by evidence during the reporting
period for the undue guarantees (if any)
Explanation about external guarantees provided in
contravention of the established procedures (if None
any)
Particulars of the guarantees provided using complex method:
N/A
3. Entrusted management of cash assets
（1）Entrusted wealth management
√ Applicable □ N/A
Entrusted wealth management during the reporting period:
In RMB0’000
Impairment amount
made for overdue
Type Source of funds Total amount Outstanding amount Overdue amount uncollected wealth
management
products
Bank wealth
Self-owned funds 272,472.82 199,119.95 0 0
management amount
Total 272,472.82 199,119.95 0 0
Details of entrusted wealth management with individually significant amount or low safety, poor liquidity, high risk
□ Applicable √ N/A
Entrusted wealth management products the principal of which may be unrecoverable or which may otherwise be impaired:
103
Luxshare Precision Industry Co., Ltd. Annual Report 2021
□ Applicable √ N/A
（2）Entrusted loans
√ Applicable □ N/A
Entrusted loans during the reporting period:
In RMB0’000
Total amount Source of funds Outstanding amount Overdue amount
863,350 Self-owned funds 863,350 0
Details of entrusted loans with individually significant amount or low safety, poor liquidity, high risk
□ Applicable √ N/A
Entrusted loans the principal of which may be unrecoverable or which may otherwise be impaired:
□ Applicable √ N/A
4. Other significant contracts
□ Applicable √ N/A
We have not entered into any other material contract during the reporting period.
XVI. Other significant matters
□ Applicable √ N/A
The Company has no other significant matters to be explained during the reporting period.
XVII. Significant events of subsidiaries of the Company
□ Applicable √ N/A
104
Luxshare Precision Industry Co., Ltd. Annual Report 2021
Section VII Changes in shares and shareholders
I. Changes in shares
1. Changes in shares
Unit: Share
Before the change ＋,－ After the change
Shares
New converted
Proportio Stock Proportio
Number shares from Other Subtotal Number
n dividend n
issued capital
reserve
11,007,92 -4,855,27 -4,855,27
I. Non-tradable shares 0.16% 6,152,646 0.09%
1 5 5
1. Shares held by the State
2. Shares held by
State-owned corporations
3. Shares held by other -2,755,78 -2,755,78
2,851,808 0.04% 96,022 0.00%
domestic investors 6 6
Incl.: Shares held by
domestic non-State-owned
corporations
Shares held by domestic -2,755,78 -2,755,78
2,851,808 0.04% 96,022 0.00%
natural persons 6 6
4. Shares held by foreign -2,099,48 -2,099,48
8,156,113 0.12% 6,056,624 0.09%
investors 9 9
Incl.: Shares held by foreign
corporations
Shares held by foreign natural -2,099,48 -2,099,48
8,156,113 0.12% 6,056,624 0.09%
persons 9 9
7,006,825, 58,344,24 58,344,24 7,065,170
II. Tradable shares 99.84% 99.91%
870 8 8 ,118
1. RMB-denominated 7,006,825, 58,344,24 58,344,24 7,065,170
99.84% 99.91%
ordinary shares 870 8 8 ,118
2. Foreign
currency-denominated shares
listed domestically
105
Luxshare Precision Industry Co., Ltd. Annual Report 2021
3. Foreign
currency-denominated shares
listed overseas
4. Others
7,017,833, 53,488,97 53,488,97 7,071,322
III. Total shares 100% 100%
791 3 3 ,764
Reasons of changes in shares:
√ Applicable □ N/A
1. On June 22, 2020, the Company held the 19th meeting of the fourth Board of Directors and the 19th meeting of the fourth
Board of Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the First Vesting Period Initially Granted
under 2019 Stock Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise
options in the first vesting period at their sole discretion, and the actual exercisable period is from July 7, 2020 to April 21, 2021.
Refer to the Cautionary Announcement on Adoption of the Discretionary Exercise Method for the First Vesting Period of the 2019
Stock Option Incentive Plan (Announcement No.2020-049) for details. During the reporting period, the grantees exercised 1,291,186
shares in total in the first vesting period initially vested under 2019 stock option incentive plan.
2. On December 2, 2020, the Company held the 17th meeting of the fourth Board of Directors and the 27th meeting of the fourth
Board of Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the Second Vesting Period under 2018 Stock
Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the second
vesting period at their sole discretion, and the actual exercisable period is from December 22, 2020 to September 24, 2021. Refer to
the Cautionary Announcement on Adoption of the Discretionary Exercise Method for the Second Vesting Period of the 2018 Stock
Option Incentive Plan (Announcement No.2020-108) for details. During the reporting period, the grantees exercised 13,854,690
shares in total in the second vesting period under 2018 stock option incentive plan.
3. On January 22, 2021, the Company held the 29th meeting of the fourth Board of Directors and the 29th meeting of the fourth
Board of Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the First Vesting Period Reserved under 2019
Stock Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the
first vesting period at their sole discretion, and the actual exercisable period is from February 8, 2021 to November 26, 2021. For
details, please see the Suggestive Announcement on Exercise at Their Sole Discretion in the First Vesting Period Reserved under
2019 Stock Option Incentive Plan (Announcement No. 2021-021). During the reporting period, the grantees exercised 4,109,496
shares in total in the first vesting period reserved under 2019 stock option incentive plan.
4. On July 2, 2021, the Company held the 2nd meeting of the fifth Board of Directors and the 2nd meeting of the fifth Board of
Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the Second Vesting Period Initially Granted under 2019
Stock Option Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the
second vesting period at their sole discretion, and the actual exercisable period is from July 15, 2021 to April 21, 2022. For details,
please see the Suggestive Announcement on Exercise at Their Sole Discretion in the Second Vesting Period Initially Granted under
2019 Stock Option Incentive Plan (Announcement No. 2021-069). During the reporting period, the grantees exercised 14,627,322
shares in total in the second vesting period initially vested under 2019 stock option incentive plan.
5. On December 3, 2021, the Company held the 6th meeting of the fifth Board of Directors and the 6th meeting of the fifth Board
of Supervisors, at which the Proposal on Satisfaction of Vesting Conditions for the Third Vesting Period under 2018 Stock Option
Incentive Plan was reviewed and passed. The grantees meeting these vesting conditions may exercise options in the third vesting
period at their sole discretion, and the actual exercisable period is from December 10, 2021 to September 23, 2022. For details, please
see the Suggestive Announcement on Exercise at Their Sole Discretion in the Third Vesting Period under 2018 Stock Option
Incentive Plan (Announcement No. 2021-102). During the reporting period, the grantees exercised 19,597,470 shares in total in the
third vesting period under 2018 stock option incentive plan.
106
Luxshare Precision Industry Co., Ltd. Annual Report 2021
6. The Company publicly offered 30,000,000 convertible corporate bonds (abbreviation: Luxshare Convertible Bonds; bond
code: 128136) on November 3, 2020, and the period for which the convertible corporate bonds can be converted into shares is from
May 10, 2021 to November 2, 2026. During the reporting period, the number of shares converted into by bonds was 8,809.
Approval of changes in shares:
√ Applicable □ N/A
1. Review and approve by the 19th meeting of the fourth Board of Directors and the 19th meeting of the fourth Board of
Supervisors of the Company;
2. Review and approve by the 27th meeting of the fourth Board of Directors and the 27th meeting of the fourth Board of
Supervisors of the Company;
3. Review and approve by the 29th meeting of the fourth Board of Directors and the 29th meeting of the fourth Board of
Supervisors of the Company;
4. Review and approve by the 2nd meeting of the fifth Board of Directors and the 2nd meeting of the fifth Board of Supervisors of
the Company;
5. Review and approve by the 6th meeting of the fifth Board of Directors and the 6th meeting of the fifth Board of Supervisors of
the Company.
Transfer of share ownership:
√ Applicable □ N/A
1. Period in which the stock options vested in the first vesting period initially granted under the 2019 stock option incentive plan
may be exercised by the relevant grantees at their sole discretion: from July 7, 2020 to April 21, 2021;
2. Period in which the stock options vested in the second vesting period under the 2019 stock option incentive plan may be
exercised by the relevant grantees at their sole discretion: from December 22, 2020 to September 24, 2021;
3. Period in which the stock options vested in the first vesting period reserved under the 2019 stock option incentive plan may
be exercised by the relevant grantees at their sole discretion: from February 8, 2021 to November 26, 2021;
4. Period in which the stock options vested in the second vesting period initially granted under the 2019 stock option incentive
plan may be exercised by the relevant grantees at their sole discretion: From July 15, 2021 to April 21, 2022;
5. Period in which the stock options vested in the third vesting period under the 2018 stock option incentive plan may be
exercised by the relevant grantees at their sole discretion: from December 10, 2021 to September 23, 2022.
Effect of changes in shares on the basic earnings per share, diluted earnings per share, net assets per share attributable to ordinary
shareholders and other financial indicators of the Company in the preceding year and the most recent reporting period:
□ Applicable √ N/A
Other information disclosed as the Company deems necessary or required by the securities regulatory authorities:
□ Applicable √ N/A
2、Changes in non-tradable shares
√ Applicable □ N/A
Unit: Share
Number of Number of Balance of
Balance of
non-tradable non-tradable non-tradable
non-tradable Reason for
Shareholder shares shares increased shares as at Unlock date
shares as at restriction
unlocked in in the reporting December 31,
January 1, 2020
the reporting period 2020
107
Luxshare Precision Industry Co., Ltd. Annual Report 2021
period
November 25, 2021 (the
Lock-up shares
day next to the sixth month
XUE Haigao 912,578 0 912,578 0 for senior
following expiry of the
officers
