Winner Medical’s 30thAnniversary
To enhance your health,life and well-beingStock abbreviation: WinnerMedical
| Stock abbreviation: Winner Medical | Stock code: 300888 |
2021 Full Annual Report
2021 Full Annual Report
Winner Medical Co., Ltd.
To shareholdersDear shareholders,Thank you for your support, trust, help and companionship to Winner Medical!In 2021, the global economy faced unprecedented challenges in post-COVID-19 era. In China, withthe rapid development of the Internet of Things (IoT), Cloud Services, Big Data and artificialintelligence (AI) technologies, as well as the rise of a low-carbon economy and a new generation ofconsumers gradually taking control of the discourse, Winner Medical ushered in new challenges andopportunities.In 2020, to deal with the sudden outbreak of the COVID-19 pandemic, Winner Medical, as one ofthe companies closest to the center of the affected area and one of the earliest responders, providedepidemic prevention products with fine quality and competitive prices for the majority of medicalstaff and anti-epidemic workers, making due contributions and creating good operating results. In2021, by returning gradually to normal from the non-normal year of the pandemic, Winner Medicalrealized RMB 8.037 billion in revenue and RMB 1.239 billion in net profit attributable toshareholders of the listed company, both down from the previous year. I apologize that WinnerMedical’s stock price fluctuated with the impact of the stock market due to greater uncertainties andmore severe challenges imposed by the pandemic plus regional conflicts since 2021, bringingpressure and anxiety to our shareholders, though the Company significantly improved itsperformance in terms of development strategy, business scale and brand reputation compare to thepre-pandemic period.As the first person responsible for the Company, I am fully aware of my responsibilities, and neverretreat in the face of difficulties, thus leading our team to conduct in-depth reviews, take everyopportunity and fight on the frontline to achieve our strategic goals.We have always believed that it is important for companies to not only guarantee big short-termgains, but also make plans for future sustainable growth. The year 2022 marks the beginning ofWinner Medical’s second thirty years. We can only live up to the expectations of our shareholders ifwe could continuously innovate, specialize in our business, excel in our operations, build ahigh-quality development business model, and drive Winner Medical to achieve high-quality,sustainable, and high-quality growth.Industry-leading R&D and InnovationThe year 2021 marks the thirtieth year of Winner Medical’s existence.Over the past three decades, Winner Medical has been engaged in an industry that is small, withlimited entry threshold and particularly severe inter-industry competition. How did Winner Medicalmanage to be the top in national export of medical dressings in its first ten years? It is because thatwe expand by wining the trust of international customers with outstanding quality and services andgetting more cooperation opportunities and orders thanks to quality and integrity, while mostcompanies made quick money and competed for customers with lower prices.We took the lead in building our own spinning and weaving mills, relying on the reliability andstability of raw material quality to ensure the quality of finished products, while others did notrealize the quality of veil is the bottleneck of gauze quality which determines the quality of finishedproducts. We rapidly adjusted strategies by closing spinning and weaving mills, focusing on andsuccessfully developing pure cotton spunlace non-woven fabric, which became “a great innovativetechnology in the textile industry”, while our counterparts produced spinning and weaving on a
large scale.We gained market insights and consumer trends and keenly developed more than 10 world-firstproducts, including cotton tissues, wet tissues, sanitary pads with pure cotton surface, baby diaperswith pure cotton surface and non-woven disposable underwear, while competitors imitated our purecotton spunlace non-woven fabric proprietary products. We stick to the “cotton fiber only” principle,and created Purcotton with the vision of “changing the world with pure cotton”, while ourcounterparts imitated our products with chemical fibers.Ten years ago, we started to independently develop silica gel technology, foam technology andantibacterial technology, focusing on the research and development of basic materials for high-endwound dressings. Nowadays, foam dressings and silica gel dressings are recognized and purchasedby international famous brands, and gradually become the “domestic alternative” high-quality,high-end wound dressings for the Chinese market.During the COVID-19 pandemic period in 2020, to deal with the severe shortage of raw materialsupply for epidemic prevention materials, we independently developed the base material for purecotton non-woven protective clothing and isolation gowns, which not only solved the problem ofraw material supply, but also achieved comfort, breathability and environmental protection,receiving praise from medical staff.……All the above showed our determination to remain true to our original aspiration, insist oninnovation, do things the right way, and take our own road with down-to-earth attitude.Winner Medical has been committed to perfecting each product and wholeheartedly serving everycustomer since its establishment, and it has never put profits first nor attempted to make greatfortune overnight. At the early stage of establishment, we worked with the enterprises in developedcountries and their management, and learnt from their high requirements for product quality, strictstandards, methods of work for excellence, and attention to details, which were integrated into theideological methods and working attitudes of Winner Medical entrepreneurs, laying the foundationfor Winner Medical people to attach importance to product quality and excellence, and to take thehigh quality and high-quality route from the very beginning. Why are good companies built to last?I believe that the sense of mission, the pursuit and the dream are the key to sustaining a company togrow, and employees who recognize the company’s values have the willingness to spend their lifecontributing to the society. Only the sense of mission allows us work hard, never forget to createvalue for our customers and shareholders, and make our due contribution to our country. Theseideas determine the strategic positioning of Winner Medical and build the vision, mission andvalues of the Company.From 1991 to 2021, Winner Medical refined itself in the wind and waves, moved forward byexploration, and developed into a health enterprise specialized in both medical and consumptionproducts under its three brands: Winner, Purcotton, and PureH2B from a single manufacturer ofmedical supplies through continuous innovation and expansion of industrial boundaries.High quality development with careful planningWinner Medical will be better in its second thirty years. We will continue to learn from valuableexperience accumulated in the first thirty years, and stick to the values of “working hard,responsibility, innovation, self-criticism, and long-termism” with the vision of “To enhance yourhealth, life and well-being”. In face of the new journey, we set goals and realization path for WinnerMedical’s sustainable high-quality development.
Focusing on the field of health product system, Winner Medical must be rooted in the real economy,improve overall quality and efficiency, and achieve high-quality corporate development through thevirtuous cycle of the industrial chain, supply chain and innovation chain.To achieve high-quality development, we should work on the basis of digital operation, take smartmanufacturing as the core and innovation as the driving force, so as to develop into an efficient,energy-saving, low-carbon, environmentally-friendly company, with high-quality talents andhigh-performance business model.Smart manufacturing as the key to high-quality development, especially in the field ofmanufacturing, should be realized through the following two methods: first, replacing the singledevice with a fully automated assembly line for operation; second, replacing the simple assemblyline with uninterrupted production, which is the only way to create an intelligent production plantarmed with AI technology, thus completely displacing manual labor to build unmanned assemblylines, workshops, black light workshop, and then the lighthouse plant.The innovation driver of Winner Medical must be products, from product design, manufacturing,packaging, logistics, delivery, to a series of processes such as intelligent manufacturing for deepinnovation. Only by continuously enhancing the irreplaceability of our products, continuouslytapping the market potential and continuously improving the quality of our products and servicescan we win customers, the market and the future.In future, we will always consider technological innovation and product innovation as the drivingforce, continue to improve its product portfolio, and further consolidate its leading position in thehealthcare industry. In the field of medical consumables, the Company will continue to develop andproduce high-end wound dressing products, optimize product structure, strengthen research anddevelopment of core basic raw materials, enhance product market competitiveness, and vigorouslypromote the application of pure cotton spunlace non-woven fabrics to medical and protectivesupplies. In the field of healthy living consumer products, the Company will continue to position“comfortable, healthy and eco-friendly” brands, focus the technical researches on new technology,new structure and new functions of yarns and fabrics, strengthen studies on consumers’ behavioraland psychological characteristics, and develop and design products that “delight users”.Meanwhile, we will also enhance the main business through products and channels, expand industrychains and product lines through investment, mergers and acquisitions, and promote the Company’slong-term development through the outward expansion and internal growth.In the next thirty years, Winner Medical will pursue health and beauty with higher standards and“make life better” through its three brands.Eco-friendly business practices for goodWinner Medical has been most proud of achieving sustainable development and greenenvironmental protection. Over the past thirty years, Winner Medical has never simply pursued themaximization of corporate profits in any events, and has never given up its reverence for nature andthe protection of the environment in any cases.Self-discipline with awe Winner Medical adheres to “altruism”, and follows the three core businessprinciples of “Quality before profit, brand before speed, social value before corporate value”, whichis not a slogan but truly integrated into the business practices of Winner Medical. Only byintegrating the concept of business for good into the corporate development and always living up toit, can we truly survive.In the future, we should be more exemplary in carbon peaking and carbon neutrality, and take the
lead in energy saving and environmental protection as well as carbon emission reduction. Our goalis to reach carbon peaking and carbon neutrality 3 years and 10 years ahead of the national timeline,respectively.Looking back to the past and forward to the future, Winner Medical will continue to makecontributions to our motherland and walk with the times. In the future, we must always adhere to: 1.follow the Party, 2. concern about the country, 3. observe the three core business principles, 4. adoptaltruism, 5. comply with customer thinking, 6. work hard, 7. keep operational excellence, 8.advance with the times, 9. persist in innovation, and 10. insist on self-criticism.We do not believe in “windfall” or “huge profits”, but will exert all our energies to the intrinsicvalue that affects the long-term development of the company -- pioneering innovation, caring foremployees, in-depth product research, digital operation, energy saving and environmentalprotection... Take every step steadily.Winner Medical people has deeply engaged in the healthcare industry, integrated the needs of thetimes with market demand, unified product innovation with excellent management, and built a solidcorporate moat.The second thirty years of Winner Medical will be more brilliant and beautiful!
Li JianquanApril 20, 2022
Section 1 Important Notes, Contents, and Definitions
The Board of Directors, the Board of Supervisors and directors, supervisors andsenior management of the Company hereby guarantee that the statement in thisSemi-annual Report is true, accurate and complete without false or misleadinginformation or major omission and that they will assume all the legal liabilities,individually and jointly.Li Jianquan, the head of the Company, Fang Xiuyuan, the chief FinancialOfficer, and Wu Kezhen, the head of accounting office (accountant in charge),guarantee the authenticity, accuracy, and completeness of the financial report inthis annual reporting period.All directors of the Company personally attended the board meeting forreviewing this report.In 2021, thanks to the overall effective control of the pandemic around the world,plus the significant increase in the production capacity of medical protectiveproducts, the sales price of such products decreased gradually to normal,resulting in obvious declines in revenues and profits of the Company’s medicalconsumables business. There were no changes in the Company’s main business,core competitiveness and major financial indicators, and its operation wasconsistent with industry trends; there was no overcapacity, continuous decline ortechnological substitution in the industry in which it operates; and there was nosignificant risk to the Company’s ability to continue operating.The forward-looking contents in this annual report, such as the futuredevelopment strategy and performance planning, are the goals sets by theCompany, which are planned matters. The achievement of the goals depends onmany factors, including market change, which is uncertain. So these contentsare not the Company’s profit forecast for the next year and do not constitute asubstantial commitment of the Company to investors and related parties.Investors and related parties should be fully aware of related risks andunderstand the differences among plans, forecasts, and commitments. Investorsare asked to beware of investment risks!The profit distribution plan approved by the Board of Directors is as follows: acash dividend of 9.00 yuan (including tax) for every 10 shares to all shareholders,0 bonus shares (including tax) and 0 shares to be transferred to all shareholdersfrom capital reserve for every 10 shares.
Contents
Section 1 Important Notes, Contents, and Definitions ...... 6
Section 2 Company Profile and Major Financial Indicators ...... 11
Section 3 Management Discussion and Analysis ...... 16
Section 4 Corporate Governance ...... 83
Section 5 Environmental Protection and Social Responsibility ...... 104
Section 6 Important Issues ...... 111
Section 7 Changes in Shares and Shareholders ...... 123
Section 8 Preferred Shares-related Information ...... 131
Section 9 Bond-related Information ...... 132
Section 10 Financial Statements ...... 133
Document Catalog
(I) Financial statements containing the signatures and seals of the person in charge of the Company, the person in charge ofaccounting work, and the person in charge of the accounting office (accountant in charge).(II) The original auditor’s report containing the seal of the accounting firm and the signature and seal of the certified publicaccountant.(III) The originals of all company documents and announcements publicly disclosed during the reporting period.
Definitions
| Term | Refers to | Definition |
Company, Winner Medical
| Company, Winner Medical | Refers to | Winner Medical Co., Ltd. |
Winner Group
| Winner Group | Refers to | Winner Group Limited, a controlling shareholder of the Company |
Sequoia Xinyuan
| Sequoia Xinyuan | Refers to | Beijing Sequoia Xinyuan Equity Investment Center (L.P.), a pre-IPO shareholder of the Company |
Xiamen Leyuan
| Xiamen Leyuan | Refers to | Xiamen Leyuan Investment Partnership (L.P.), a pre-IPO shareholder of the Company |
Xiamen Yutong
| Xiamen Yutong | Refers to | Xiamen Yutong Investment Partnership (L.P.), a pre-IPO shareholder of the Company |
SCGC
| SCGC | Refers to | Shenzhen Capital Group Co., Ltd., a pre-IPO shareholder of the Company |
Xiamen Huikang
| Xiamen Huikang | Refers to | Xiamen Huikang Investment Partnership (L.P.), a pre-IPO shareholder of the Company |
Xiamen Zepeng
| Xiamen Zepeng | Refers to | Xiamen Zepeng Investment Partnership (L.P.), a pre-IPO shareholder of the Company |
Winner Medical (Chongyang)
| Winner Medical (Chongyang) | Refers to | Winner Medical (Chongyang) Co., Ltd., a wholly-owned subsidiary of the Company |
Winner Medical (Jiayu)
| Winner Medical (Jiayu) | Refers to | Winner Medical (Jiayu) Co., Ltd., a wholly-owned subsidiary of the Company |
Winner Medical (Jingmen)
| Winner Medical (Jingmen) | Refers to | Winner Medical (Jingmen) Co., Ltd., a wholly-owned subsidiary of the Company |
Winner Medical (Yichang)
| Winner Medical (Yichang) | Refers to | Yichang Winner Medical Textile Co., Ltd., a wholly-owned subsidiary of the Company |
Winner Medical (Huanggang)
| Winner Medical (Huanggang) | Refers to | Winner Medical (Huanggang) Co., Ltd., a wholly-owned subsidiary of the Company |
Winner Medical (Tianmen)
| Winner Medical (Tianmen) | Refers to | Winner Medical (Tianmen) Co., Ltd., a wholly-owned subsidiary of the Company |
Shenzhen Purcotton
| Shenzhen Purcotton | Refers to | Shenzhen Purcotton Technology Co., Ltd., a wholly-owned subsidiary of the Company |
Guangzhou Purcotton
| Guangzhou Purcotton | Refers to | Guangzhou Purcotton Medical Technology Co., Ltd., a wholly-owned subsidiary of Shenzhen Purcotton |
Beijing Purcotton
| Beijing Purcotton | Refers to | Beijing Purcotton Technology Co., Ltd., a wholly-owned subsidiary of Shenzhen Purcotton |
Shanghai Purcotton
| Shanghai Purcotton | Refers to | Shanghai Purcotton Technology Co., Ltd., a wholly-owned subsidiary of Shenzhen Purcotton |
Qianhai Purcotton
| Qianhai Purcotton | Refers to | Shenzhen Qianhai Purcotton E-Commerce Co., Ltd., a wholly-owned subsidiary of Shenzhen Purcotton |
Purunderwear
| Purunderwear | Refers to | Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd., a wholly-owned subsidiary of Shenzhen Purcotton |
Winner (Huanggang) Cotton
| Winner (Huanggang) Cotton | Refers to | Winner (Huanggang) Cotton Processing & Trading Co., Ltd., a wholly-owned subsidiary of Winner Medical (Huanggang) |
Winner Medical Malaysia
| Winner Medical Malaysia | Refers to | Winner Medical Malaysia Sdn. Bhd., a subsidiary controlled by the Company |
Winner Medical (Hong Kong)
| Winner Medical (Hong Kong) | Refers to | Winner Medical (Hong Kong) Ltd., a subsidiary controlled by the Company |
Winner Medical (Heyuan)
| Winner Medical (Heyuan) | Refers to | Winner Medical (Heyuan) Co., Ltd., a wholly-owned subsidiary of the Company |
Winner Medical (Wuhan)
| Winner Medical (Wuhan) | Refers to | Winner Medical (Wuhan) Co., Ltd., a wholly-owned subsidiary of the Company |
Pure HB (Shanghai)
| Pure HB (Shanghai) | Refers to | Pure HB (Shanghai) Co., Ltd., a wholly-owned subsidiary of the Company |
PureH2B
| PureH2B | Refers to | Shenzhen PureH2B Technology Co., Ltd., a wholly-owned subsidiary of the Company |
Chengdu Wenjian Likang
| Chengdu Wenjian Likang | Refers to | Chengdu Wenjian Likang Medical Products Co., Ltd., a wholly-owned subsidiary of the Company |
Galaxy Real Estate
| Galaxy Real Estate | Refers to | Shenzhen Galaxy Real Estate Development Co., Ltd. |
Reporting period
| Reporting period | Refers to | FY 2021, from January 1, 2021 to December 31, 2021 |
Longterm Medical
| Longterm Medical | Refers to | Zhejiang Longterm Medical Technology Co., Ltd., an enterprise in which the Company intends to acquire a 55% equity interest |
Section 2 Company Profile and Major Financial Indicators
Section 2Company Profile and MajorFinancial Indicators
Purcotton
’s brand
spokespersonGuo Jingjing
I. Company Profile
| Stock abbreviation | Winner Medical | Stock code | 300888 |
Company name in Chinese
| Company name in Chinese | Winner Medical Co., Ltd. |
Company short name inChinese
| Company short name in Chinese | Winner Medical |
Company name in foreignlanguage (if any)
| Company name in foreign language (if any) | Winner Medical Co., Ltd. |
Company short name inforeign language (if any)
| Company short name in foreign language (if any) | Winner Medical |
Legal representative of thecompany
| Legal representative of the company | Li Jianquan |
Registered address
| Registered address | F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen City; Winner Industrial Park, No.660 Bulong Road, Longhua New District, Shenzhen City |
Postal code of the registeredaddress
| Postal code of the registered address | 518131 |
Historical changes in theregistered address of theCompany
| Historical changes in the registered address of the Company | On June 1, 2021, the Company completed the registration of industrial and commercial change of registered address to “F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen City; Winner Industrial Park, No. 660 Bulong Road, Longhua District, Shenzhen City” from “Winner Industrial Park, No. 660 Bulong Road, Longhua New District, Shenzhen City”. |
Office address
| Office address | F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen City |
Postal code of the officeaddress
| Postal code of the office address | 518131 |
The Company’s Internetwebsite
| The Company’s Internet website | http://www.winnermedical.com |
| investor@winnermedical.com |
II. Contact person and contact information
| Secretary to the board of directors | Securities affairs representative |
Name
| Name | Chen Huixuan | Liu Yanxiang, Zhang Heng |
Contact address
| Contact address | F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen City | F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen City |
Tel
| Tel | 0755-28066858 | 0755-28066858 |
Fax
| Fax | 0755-28134688 | 0755-28134688 |
| investor@winnermedical.com | investor@winnermedical.com |
III. Information disclosure and keeping place
| Stock exchange websites on which the Company discloses its annual report | http://www.szse.cn/ |
Name and websites of the media on which theCompany discloses its annual report
| Name and websites of the media on which the Company discloses its annual report | STCN, China Securities Journal, Shanghai Securities News, Securities Daily, and http://www.cninfo.com.cn/new/index |
Place of preparation of the Company’s annual report
| Place of preparation of the Company’s annual report | Securities Department of the Company |
IV. Other Relevant InformationAccounting firm engaged by the Company
| Name of the accounting firm | BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP |
Office address of the accountingfirm
| Office address of the accounting firm | 4th Floor, No.61 Nanjing East Road, Huangpu District, Shanghai |
Name of signatory accountant
| Name of signatory accountant | Cheng Jin, Wu Lihong |
The sponsor institution engaged by the Company to perform the continuous supervision responsibility during the reporting period
√Applicable □ Not applicable
| Name of sponsor institution | Office address of sponsor institution | Name of sponsor representative | Continuous supervision period |
China International CapitalCorporation Limited
| China International Capital Corporation Limited | 27th and 28th Floors, China World Office 2, No. 1 Jianguomenwai Avenue, Chaoyang District, Beijing | Shen Lulu, Wang Shenchen | From the date of initial public offering to December 31, 2023 |
The financial advisor engaged by the Company to perform the continuous supervision responsibility during the reporting period
□ Applicable √ Not applicable
V. Major Accounting Data and Financial IndicatorsWhether the Company needs to retroactively adjust or restate the accounting data of the previous years
□Yes √No
| 2021 | 2020 | Increase/decrease this year compared to the previous year | 2019 |
Revenue (yuan)
| Revenue (yuan) | 8,037,420,812.91 | 12,533,945,946.63 | -35.87% | 4,574,625,915.60 |
Net profits attributable toshareholders of listed companies(yuan)
| Net profits attributable to shareholders of listed companies (yuan) | 1,239,320,067.26 | 3,810,412,504.40 | -67.48% | 546,293,677.91 |
Net profits attributable toshareholders of the listed companyafter deduction of non-recurringprofits and losses (yuan)
| Net profits attributable to shareholders of the listed company after deduction of non-recurring profits and losses (yuan) | 1,029,005,582.98 | 3,750,822,797.63 | -72.57% | 480,452,746.25 |
Net cash flow from operatingactivities (yuan)
| Net cash flow from operating activities (yuan) | 871,689,901.93 | 4,767,496,287.39 | -81.72% | 599,772,565.88 |
Basic EPS (yuan/share)
| Basic EPS (yuan/share) | 2.91 | 9.80 | -70.31% | 1.45 |
Diluted EPS (yuan/share)
| Diluted EPS (yuan/share) | 2.91 | 9.79 | -70.28% | 1.45 |
Weighted average return on netassets
| Weighted average return on net assets | 11.76% | 64.68% | -52.92% | 18.80% |
| End of 2021 | End of 2020 | Increase/decrease at the end of this year compared to the end of the previous year | End of 2019 |
Total assets (yuan)
| Total assets (yuan) | 13,266,610,200.37 | 13,002,251,764.44 | 2.03% | 4,531,474,379.58 |
Net assets attributable toshareholders of listed companies(yuan)
| Net assets attributable to shareholders of listed companies (yuan) | 10,674,912,166.80 | 10,453,934,045.43 | 2.11% | 3,160,380,500.84 |
The Company’s net profits before or after the deduction of non-recurring profit and loss for the last three fiscal years, whichever islower, is negative, and the auditor’s report for the latest year shows that there are uncertainties about the Company’s sustainableoperation ability.
□Yes √No
The net profits before or after the deduction of non-recurring profit and loss, whichever is lower, is negative
□Yes √No
VI. Key Quarterly Financial Indicators
Unit: yuan
| Q1 | Q2 | Q3 | Q4 |
Revenue
| Revenue | 2,268,544,975.62 | 1,791,320,679.30 | 1,760,074,735.66 | 2,217,480,422.33 |
where, healthy consumer goods
| where, healthy consumer goods | 818,338,574.11 | 980,328,477.63 | 901,837,642.74 | 1,353,710,023.94 |
medical consumables andother businesses
| medical consumables and other businesses | 1,450,206,401.51 | 810,992,201.67 | 858,237,092.92 | 863,770,398.39 |
Net profits attributable to
| Net profits attributable to | 480,582,571.42 | 280,456,158.82 | 343,002,814.94 | 135,278,522.08 |
shareholders of listed companiesNet profits attributable toshareholders of the listed companyafter deduction of non-recurringprofits and losses
| Net profits attributable to shareholders of the listed company after deduction of non-recurring profits and losses | 455,065,047.62 | 172,190,561.57 | 321,472,260.73 | 80,277,713.06 |
Net cash flow from operatingactivities
| Net cash flow from operating activities | 187,866,670.61 | 9,738,195.16 | 232,758,453.78 | 441,326,582.38 |
* Note:
1. In Q1, the net margin was higher due to the delivery in Q1 2021 of some higher-priced orders for exports in 2020; in Q2/3/4 2021,
with the impact of market supply and demand for protective products and price retreat, net profit margin gradually declined; inQ4, the net margin became lower mainly due to the higher level of marketing expenses in the “Double Eleven” campaign forhealthy consumer goods compared to other quarters, as well as the impact of equity incentive expenses.
2. The reasons for the large difference between net cash flow from operating activities and net profit in each quarter: (1) the lowernet cash flow from operating activities in Q1 was mainly due to the Company’s 100% pre-receipt credit policy for protectiveproducts in 2020 and more pre-receipt from customers in 2020; (2) the lower net cash flow from operating activities in Q2 wasmainly due to the payment of corporate income tax by income tax remittance in 2020; (3) the change in net cash flow fromoperating activities in Q3 was mainly due to the payment for the “Double Eleven” stock preparation in Q2 and Q3; and (4) thereturn of sales funds was achieved in Q4.
Whether there is significant difference between the above financial indicators or the total sum of them and the financial indicatorsrelated to the quarterly report and semiannual report disclosed by the Company
□Yes √No
VII. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences between net profits and net assets in financial statements disclosed according to the
International Accounting Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
No difference between net profits and net assets in financial statements disclosed according to the International Accounting Standards(IAS) and Chinese Accounting Standards during the reporting period.
2. The difference between net profits and net assets in financial statements disclosed according to theOverseas Accounting Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
No difference between net profits and net assets in financial statements disclosed according to the Overseas Accounting Standardsand Chinese Accounting Standards during the reporting period.VIII. Non-recurring Profit and Loss Items and Amount
√Applicable □ Not applicable
Unit: yuan
| Item | Amount in 2021 | Amount in 2020 | Amount in 2019 |
Profits and losses on the disposal of non-current assets(including the write-off part of the provision for assetimpairment)
| Profits and losses on the disposal of non-current assets (including the write-off part of the provision for asset impairment) | (9,080,387.29) | (25,914,736.75) | 55,074,788.79 |
Government subsidies included into the current profitsand losses, except those government subsidies, whichare closely related to the regular business of acompany and continuously enjoyed in accordance withnational policies, a certain standard quota or quantityof the state
| Government subsidies included into the current profits and losses, except those government subsidies, which are closely related to the regular business of a company and continuously enjoyed in accordance with national policies, a certain standard quota or quantity of the state | 105,132,971.30 | 74,592,796.36 | 27,146,755.50 |
In addition to the effective hedging business related tothe Company’s normal business operations, the profitand loss from fair value changes arising from holdingtradable financial assets and tradable financialliabilities, as well as the investment income from
| In addition to the effective hedging business related to the Company’s normal business operations, the profit and loss from fair value changes arising from holding tradable financial assets and tradable financial liabilities, as well as the investment income from | 158,186,445.51 | 28,197,958.34 | (5,798,618.00) |
disposal of tradable financial assets, tradable financialliabilities, and available-for-sale financial assets.Income and expenditure other than those mentionedabove
| Income and expenditure other than those mentioned above | (2,530,827.65) | (4,844,628.50) | 1,236,411.96 |
Less: Amount affected by income tax
| Less: Amount affected by income tax | 41,394,596.42 | 12,117,518.33 | 11,818,507.38 |
Amount of minority shareholders' equity affected(after tax)
| Amount of minority shareholders' equity affected (after tax) | (878.83) | 324,164.35 | (100.79) |
Total
| Total | 210,314,484.28 | 59,589,706.77 | 65,840,931.66 |
Details of other profit and loss items that conforming to the definition of non-recurring profit and loss:
□ Applicable √ Not applicable
The Company does not have details of other profit and loss items that conforming to the definition of non-recurring profit and loss.Information on the definition of non-recurring profit and loss items enumerated in “Interpretative Announcement No. 1 onInformation Disclosure of Public Securities Issuing Companies - Non-recurrent Profits and Losses” as the recurring profit and lossitems
□ Applicable √ Not applicable
No definition of non-recurrent profit and loss items enumerated in the “Interpretative Announcement No. 1 on InformationDisclosure of Public Securities Issuing Companies - Non-recurrent Profits and Losses” as recurring profit and loss items during thereporting period.
Section 3 Management Discussion and Analysis
I. The industry in which we operateThe Company is required to comply with the disclosure requirements of “Textile and Apparel Business” in the “Shenzhen StockExchange Self-Regulatory Guidelines for Listed Companies No. 3 -- Industry Information Disclosure”
1. Industry definition
According to the Classification Rules of Medical Devices (2015) (Order No. 15 of the China Food and Drug Administration) and theClassification Catalogue of Medical Devices (Notice No. 104 of the China Food and Drug Administration in 2017), the medicaldressings produced and sold by the Company belong to the nursing and protective devices in medical devices. According to theIndustry Classification of National Economy (GB/T4754-2017) and the Industry Classification Guidelines for Listed Companies(revised in 2012), the industry of the Company is special equipment manufacturing industry (C35) in manufacturing industry (C).The products of the Company's healthy consumer goods include pure cotton tissues, sanitary pads with pure cotton surface, cottonwet tissues and other non-woven consumer goods, baby supplies, baby clothing, adult clothing and other textile consumer goods.According to the Industry Classification of National Economy (GB/T4754-2017) and the Industry Classification Guidelines forListed Companies (revised in 2012), the consumer goods operated by the Company mainly belong to the textile industry (C17) andthe textile and apparel industry (C1 8) in the manufacturing industry (C).
2. Development of the industry
(1) Development of medical consumables industry at home and abroad
Medical consumables refer to the medical and health materials used in the process of clinical diagnosis and nursing, testing and repair.With a wide variety of models and wide application, they are important materials for medical institutions to carry out daily medicaland nursing work. From the perspective of value, medical consumables can be divided into high-value medical consumables andlow-value medical consumables.
Data source: China Medical Consumables Market Conditions and Investment Prospect Survey Report 2021-2026, China Medical
Device Blue Book , Chinese Medicine, IBM Report
Data source: China Medical Device Blue Book , Chinese Medicine, Magna Information Centre, IBM ReportCompared with high-value medical consumables, low-value medical consumables are mainly injection and punching, medicaldressings and medical polymers, with low entry threshold and fierce market competition. Due to the wide application and benefitfrom the improvement of people’s living standards and the continuous growth of medical demand in China, the market space oflow-value medical consumables is huge, and will continue to maintain high-speed growth in the future. According to the research andanalysis of IBM, it is estimated that the market scale of low-value medical consumables in China will reach 221.3 billion yuan by2025.
① Market development of operating room infection control products
Due to the growth of the number of surgical operations and the strengthening of infection control measures, the market of operatingroom infection control products is growing continuously. According to the statistics of CMI, the domestic market size of operatingroom infection control products is expected to reach USD 3.688 billion in 2026, with an average annual compound growth rate of
4.9%.
Operating room infection control products can be divided into reusable products and disposable products. Compared with thereusable products, the disposable surgical infection control products can significantly reduce the risk of cross infection. According toCoherent, disposable operating room infection control products can reduce the risk of cross infection during surgery by 60%. TheGuide to Operating Room Nursing Practice compiled by the Operating Room Professional Committee of Chinese NursingAssociation also recommends the use of disposable aseptic products in the operating room to reduce the risk of cross infection duringsurgery. At the same time, disposable operating room infection control products also have advantages in convenience compared withreusable products, which makes the demand for disposable products more active.Compared with a single product, the market scale of customized surgical packs will show a rapid growth trend. According to thestatistics of CMI, the market size of global customized surgical packs is expected to grow to USD 21.347 billion in 2026, with anaverage annual compound growth rate of 10.2%. In China, the market size of customized surgical packs is expected to rise to USD
1.504 billion, with an average compound annual growth rate of 12.2%, which is quite promising.
② Market development of high-end wound dressing products
Compared to the traditional wound dressings, high-end wound dressings are able to control exudate and have better breathability,without adherence to the wound, new tissue injury and bacterial infection. The representative products include hydrogel dressings,hydrocolloid dressings, transparent film dressings, foam dressings, alginate dressings, etc. Judging from the global trend, the demandfor high value-added and multifunctional medical dressings made of new materials is increasing, and the high-end medical dressingindustry will usher in good development opportunities. According to the research compiled by QYResearch, the global high-endwound dressings market size reached USD 5.846 billion in 2020, expecting to reach USD 7.230 billion in 2027.The market size in China is growing rapidly and the major factors contributing to the growth of the high-end wound dressings market
include increasing aging population, increasing awareness of high-end wound dressings, increasing number of road accidents andburn cases, and high incidence of diabetic wounds and chronic infections.Most of the sales of Chinese enterprises producing high-end wound dressings are still focusing on overseas markets, and after yearsof development, the product quality has reached a higher level in the world and gained recognition in the international market. Withthe rising consumption level of domestic residents, the rising awareness of medical care, the popularization of domestic home caresystem, and the gradual convergence with international advanced medical care knowledge, there will be a prosperous high-endwound dressings consumption market in China.In recent years, the relevant government departments and agencies have introduced supporting policies, showing a general trend ofgradual replacement of international brands by domestic brands. There will also be a greater space in the high-end medical dressingsbusiness for domestic-manufactured products, and China’s market concentration will be improved.
(2) Development of consumer goods segmentation industry
① Development of cotton tissues
Because of its more environmental protection and less sensitization, pure cotton tissues can replace traditional paper products andtowels, with increasing market penetration. According to the “China’s Cotton Tissues Industry Status and Development TrendResearch Report 2019-2025” published by the ChinaIRN Industry Research Institute, based on product attributes, productionefficiency, environmental protection and other advantages, people are more willing to pay higher prices for high-quality products forinfants, maternity, people with sensitive skin and people with frequent beauty makeup and skin care needs, so cotton tissues productawareness is rapidly increasing, promoting the rapid growth of market demand. China’s cotton tissues market demand reached 32.5billion in 2020, up 39.72% YoY, with a compound annual growth rate of 101.62%, in a high-speed growth phase.The Company set a new product category for cotton tissues and led the rapid growth of the cotton tissues segment. In 2021, Purcottonas the first drafting unit to participate in the development of national standards for cotton tissues, and thanks to the increasingly strictenvironmental regulation, this segmentation will become more mature and standardized.
② Development of disposable sanitary products industry
According to Euromonitor statistics, the market of absorptive care products in China increased from 128.9 billion yuan to 175.4billion in 2015-2020, with an average annual compound growth rate of 6.4%.Among them, female health care products increased from 74 billion yuan in 2015 to 89.1 billion yuan in 2020, with an averageannual compound growth rate of 3.8%. As Chinese women’s health care awareness and consumption ability continue to rise,consumers are paying more and more attention to product quality, focusing on functionality, material safety and product experience,leading to the increasing proportion of medium- and high-end sanitary napkin consumption.The market scale of infant diapers increased from 47.9 billion yuan in 2015 to 70.3 billion yuan in 2020, with an average annualcompound growth rate of 8.0%. Thanks to urbanization and the increase in per capita disposable income of rural residents, thepenetration rate of the sinking market for infant diapers will be significantly increased.The market scale of adult incontinence products increased from 1.6 billion yuan in 2015 to 5.1 billion yuan in 2020, with an averageannual compound growth rate of 26.7%. Since the overall development of adult incontinence products in China is lagging behind thefeminine sanitary pads and infant diapers market, it is still in the introduction period. Considering multiple factors such as growinglife expectancy per capita, increasing number of elderly population, increasing disposable income per capita and increasing hygieneand health awareness, China’s adult incontinence products market is at a stage of rapid growth in sales and market penetration.The market scale of wet tissues increased from 5.4 billion yuan in 2015 to 10.9 billion yuan in 2020, with an average annualcompound growth rate of 15.3%. At present, the market is dominated by baby wet tissues and general-purpose wet tissues. Femalehygiene wet tissues, makeup removal wet tissues, home cleaning wet tissues and other categories account for a relatively smallproportion, so there is a large market space to develop.
③ Development of textile industry and textile clothing and apparel industry
The year of 2021 was the 20th anniversary of China’s accession to the World Trade Organization. China has become the world’slargest producer and consumer of textiles and clothing. The sales of specialized retail goods of textiles, clothing and daily necessitiesincreased from 70.302 billion yuan in 2007 to 667.640 billion yuan in 2019, with an average compound annual growth rate of
20.63%. Among them, the sales of textile, clothing and daily necessities in chain retail enterprises have increased rapidly in recentyears, reaching 144.802 billion yuan in 2019.The development of e-commerce industry also led to the transformation and upgrading of textile, clothing and daily necessitiesindustries. According to the statistics of China National Textile And Apparel Council, the total volume of e-commerce transactions oftextile and clothing in China in 2019 was 6.69 trillion yuan, accounting for 19.22% of the total volume of national e-commercetransactions, which is the most active trading category of e-commerce platform. Among them, the scale of online retail of textile andapparel is 1.67 trillion yuan, accounting for 19.59% of the total online retail sales of physical goods.
④ Development of maternal and child supplies industry
From 2010 to 2020, the maternal and infant market in China grew rapidly. In 2018-2021, the decline in the number of newborns ledto a temporary slowdown in the high growth trend of the maternal and infant market, but the overall scale was still expanding, andthe size of the domestic maternal and infant market exceeded 4 trillion in 2020, in which the product and service markets accountedfor about half each.There will be more space for future maternal and infant market. In recent years, the post-85s and post-90s ushered in the second andthird child policy in their childbirth period, and the post-95s also reached the golden age of childbirth. In the age composition of the
mother group, the post-95s are the fastest growing group. The Blue Book on Maternal and Infant Industry Development released byPwC shows that in 2021, the post-90s and post-00s will account for 53.9% of the maternal and infant population. As the post-90s andpost-00s gradually enter the maternal and infant consumer market, changes in their consumer attitudes and parenting styles havebrought new development opportunities for the maternal and infant industry, and the maternal and infant market has developed in thedirection of high quality, high safety and refinement.According to the Research and Investment Value Analysis Report on China’s Maternal and Infant Industry Chain 2021 released byiiMedia Research, the maternal and infant market size in China exceeded 4 trillion yuan in 2020 and is expected to increase to 7.546trillion yuan by 2024.
3. Competitive position of the Company
(1) Medical consumables business
Winner Medical is a benchmarking enterprise in the domestic medical consumables industry. Its main product lines cover wound care,infection prevention and disinfection and cleaning. The specific products include high-end wound dressing products, traditionalwound care and dressing products, infection control products in operating room, disease prevention products and disinfection andcleaning products for body surface cleaning. Our products have entered more than 4,000 hospitals and 120,000 pharmacy chains inChina and delivered health to medical patients and consumers in more than 110 countries and regions around the world. WinnerMedical has established a medical-grade quality management system earlier in the industry and realized the whole industry chainoperation mode from cotton procurement to R & D, production and sales. As a leading enterprise in the medical dressings industry,the Company promotes the establishment of the medical dressings branch of China Chamber of Commerce for Import and Export ofMedicines and Health Products, and serves as the president of the medical dressings industry, leading the industry to continuouslyexpand its international market share with innovative and high-quality products. After the outbreak of COVID-19, the Company hasfully exerting its core business principle, “social value before corporate value”, strictly controlled the quality of epidemic preventionproducts, and did not increase the price of terminal products. Its products were highly praised by the country and the public, and thebrand value was greatly improved.
(2) Healthy consumer goods business
Purcotton inherits 30 years of medical manufacturing experience from parent company Winner Medical. It considered “Medicalbackground/Purcotton philosophy/Quality in our DNA ” as its core competitiveness, which starts with pure cotton spunlacenon-woven fabric and takes “medicine close to life, Purcotton care for health” as its brand proposition. Its products include medicineclose to life, Purcotton care for health, sanitary pads with pure cotton surface, pure cotton wet tissues and other non-woven consumergoods, as well as wet tissues, baby supplies, baby products, adult clothing and other textile consumer goods. Purcotton advocates thelife concept of “comfort, health, environmental protection”, replacing chemical fiber with cotton and keeping away from chemicalstimulation. It provides overall solutions for different life scenes, having a good user reputation and formed a fully differentiatedbrand image in the field of consumer goods with strong brand appeal. In 2021, as the major drafter, Purcotton led the development ofnational standards for cotton tissues (GB/T 40276-2021), which was implemented on December 1, 2021. Purcotton has developedinto a flagship national brand among high-quality domestic consumer brands, which is one of the primary choices for consumers tobuy cotton consumer goods.II. Main Business of the Company during Reporting Period
The Company is required to comply with the disclosure requirements of “Medical Device Business” in the “Shenzhen StockExchange Self-Regulatory Guidelines for Listed Companies No. 4 -- Industry Information Disclosure for ChiNext Stock Market”The Company is required to comply with the disclosure requirements of “Textile and Apparel Business” in the “Shenzhen StockExchange Self-Regulatory Guidelines for Listed Companies No. 3 -- Industry Information Disclosure”
(I) Main Business of the Company during Reporting Period
Winner Medical is a health enterprise developing both medical and consumption products under its three brands: Winner, Purcotton,and PureH2B. Specifically, the Company has been adhering to the core business principle of “Quality before profit; brand beforespeed; social value before corporate value”. Through continuous innovation and expansion of industrial boundaries, the Company hasdeveloped from a single manufacturer of medical consumables into a large medical health enterprise covering wound care, infectionprevention, personal care, home care, maternal and child care, home textile and clothing and other fields.
1. Medical consumables section
Winner Medical is a benchmarking enterprise in the domestic medical consumables industry. Its main product lines cover wound care,infection prevention and disinfection and cleaning. The specific products include high-end wound dressing products, traditionalwound care and dressing products, infection control products in operating room, disease prevention products and disinfection andcleaning products for body surface cleaning.
The Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain covering cottonprocurement, R&D, production, and direct export. The Company’s products have been certified by the EU CE certification, the USFDA certification and the Japanese Ministry of Health, Labour and Welfare certification, and exported to Europe, America, Japan andother countries. In 2005, “Winner” brand entered the domestic hospital and drugstore market. With its excellent product quality andservice, Winner Medical gradually established a good brand and reputation in domestic hospitals and drugstores. Since the outbreakof COVID-19 in 2020, the “Winner” brand epidemic prevention products have entered the hospital and the civilian market. Thanks toits public commitment not to increase prices and the quality of its products, it has won the unanimous praise at home and abroad,from government units and the public, and the brand reputation and popularity have been greatly improved.In terms of products, Winner Medical focuses on market demand, is close to clinical and terminal, is driven by R&D and innovation,and constantly improves product layout. Its business scope extends from sales of single wound care products such as cotton gauze tosales of integrated solutions of wound care, infection prevention, disinfection and cleaning. Disposable operating room consumablescan more effectively reduce nosocomial infection than reusable medical products. With more attention of the state and hospitals tonosocomial infection and residents’ attention to personal health environment, disposable operating room consumables are graduallyaccepted by the domestic market. Winner Medical’s medical dressings product line has been expanded from traditional dressingproducts mainly focusing on gauze products to high-end wound dressings products, such as silica gel foam dressing, hydrocolloiddressing, super absorbent pad, negative pressure drainage products, etc., which are mainly applied to chronic wound healing scenessuch as diabetes, large-area burns and wounds. The Company’s technical level in the field of high-end wound dressings has been inthe forefront of the industry, and is expected to become the core products for the development of Winner Medical.
WinnerMedicalMedical
MedicalConsumables
ConsumablesWound care
Wound careInfection protection
Infection protectionDisinfection andcleaning
Disinfection andcleaningNon-woven consumergoods
Non-woven consumergoodsTextile consumergoods
Textile consumergoodsBeauty products and
perfumes
Beauty products and
perfumesHealth & personalcare
Health & personalcare
Home sports
Home sportsCotton tissues, sanitary pads and wet tissues
Cotton tissues, sanitary pads and wet tissuesBaby supplies, baby clothing and adult clothing
2. Healthy Consumer Goods Section
Purcotton is a healthy life brand with “Medical background, Purcotton philosophy, Quality in our DNA” as its core competitiveness,which starts with pure cotton spunlace non-woven fabric and takes “medicine close to life, Purcotton care for health” as its brandproposition. Its products include pure cotton tissue, sanitary pads with pure cotton surface, pure cotton wet tissues and othernon-woven consumer goods, as well as baby supplies, baby clothing, baby products, adult clothing and other textile consumer goods.Purcotton advocates the life concept of “comfort, health, environmental protection”, replacing chemical fiber with cotton and keepingaway from chemical stimulation. It provides overall solutions for different life scenes, having a good user reputation and formed afully differentiated brand image in the field of consumer goods with strong brand appeal.
In terms of products, with excellent quality control ability and technology research and development ability, the Company continuesto introduce medical grade quality consumer goods. Cotton is the main raw material of core products of Purcotton, which adoptsglobal high-quality cotton to control product quality and safety from the source. According to the high standard of medicalconsumables, all kinds of pollution sources are strictly controlled in the production process. Disposable underwear, newborn babyclothes and other close-fitting clothing are packaged with medical grade sterilization to further ensure the safety and environmental
protection of the products. Purcotton products cover multiple consumer groups, such as mothers and infants, children and adults, andspan multiple product lines, such as high-end pure cotton tissues, female care, baby care, adult clothing, home textile products, etc.
In July 2019, the Company launched the “PureH2B” brand, aiming to build a one-stop retail platform covering beauty makeup,personal care, sports and other healthy and beautiful life needs. As of December 31, 2021, “PureH2B” has sold products throughoffline stores, online official websites and Wechat mini programs, and its business is still at the initial stage.
(II) Main Products and PurposesIts health product system covers: wound care products, infection prevention products, disinfection & cleaning products under itsmedical consumables section; the non-woven consumer goods and textile consumer goods under its healthy consumer goods section;and pure cotton spunlace non-woven fabric, an industry intermediate product.The main categories and images of some products under the Company's medical consumables section are as follows:
| Product Class | Product Category | Main Purpose | Product | Image of Some Products |
Woundcareproducts
| Wound care products | Traditional wound care and wound dressing products | For absorbing wound exudate, dressing wounds, and sports protection | Gauze sheets, non-woven sheets, gauze bandage, dressing change kits, etc. | |
| High-end wound dressing products | For creating a moisture balance at the wound interface to optimize its benefits for wound healing, reduce the frequency of dressing replacement, and reduce secondary damage | Silicone dressings, alginate dressings, etc. |
| Infection prevention products | Operating room infection control products | For preventing infections in the operating room | Surgical packs, surgical gowns, etc. | |
| Products on disease prevention and control | For occupational protection of medical staff and patient isolation | Masks, protective clothing, isolation gowns, gloves, footwear, hats, etc. |
Disinfection &cleaningproducts
| Disinfection & cleaning products | Disinfection & cleaning products | For wound cleaning and disinfection, and daily cleaning | Cotton swabs, cotton pads, cotton balls, alcohol cotton pads, disinfectant, etc. |
As the important guarantee for medical staff’s occupational protection and patient isolation protection, disease protection and controlproducts such as masks and protective clothing play an indispensable role in coping with major health incidents and improving publichealth. The main categories and images of some products under the company's healthy consumer goods section are as follows:
| Class | Product Category | Product | Image of Some Products |
Non-wovenconsumergoods
| Non-woven consumer goods | Cotton tissues | |
| Wet tissues | ||
| Sanitary pads |
| Other non-woven consumer goods | Cotton swabs, makeup cotton pads, disposable underwear, etc. |
Textileconsumer
goods
| Textile consumer goods | Baby supplies | Baby's bath towels, handkerchiefs, and quilts, etc. | |
| Baby clothing | Baby's leisure wear, outing costume, underwear, footwear, etc. | ||
| Adult clothing | Adult's leisure wear, outing costume, underwear, footwear, etc. | ||
| Other textile consumer goods | Bedding, bathroom accessories, etc. |
The purposes and images of the Company's pure cotton spunlace non-woven fabric are as follow:
| Class | Main Purpose | Image |
Pure cotton
spunlacenon-woven
fabric
| Pure cotton spunlace non-woven fabric | With 100% quality cotton as raw materials, the fabric is made with the pure cotton spunlace non-woven fabric technology. It can be used in fields such as personal care, home care, medical equipment, and industrial wipes. |
(III) Main Operating Modes
1. Procurement mode
The Company has established a complete procurement management system, which mainly includes the Procurement Control Process,Procurement Price Management Process, New Supplier Selection and Review Control Process, Supplier Performance AppraisalManagement Process, and the Company also has made a Qualified Supplier Directory. According to the Company's regulations,
purchase applications shall be submitted by requiring departments based on customer orders, sales plans, and production plans. Thepurchasing department shall strictly follow the purchasing management regulations after analyzing the purchasing requirements andthe raw material market. The procurement of key bulk raw materials (such as cotton and veil) is implemented in a unified manneraccording to the Company's rules on its strategic procurement. The Company implements a strict supplier management system toensure product quality and stable product supply. The Company has set a supplier directory and a perfect update and eliminationmechanism to dynamically manage existing suppliers and new suppliers, which enables the Company to preferentially cooperate withthe suppliers with the highest assessment results. For new suppliers, the Company has made strict selection criteria and supplierdevelopment and process management systems, including on-site inspection on suppliers; for suppliers with poor or even unqualifiedannual performance, the Company will add them to the key watch list or eliminate them. Generally, the Company will sign an annualframework agreement with a supplier to specify the cooperation content and the annual cooperation arrangement, and specificprocurement contracts will be signed separately.
2. Production mode
The Company formulates production plans according to customers' POs and requirements, its annual sales plans, and monthly rollingsales plans. Based on its own production capacity and demand fluctuations, the Company adopts the production strategies of Make toOrder (MTO) and Made to Stock (MTS).
3. Sales mode
The Company sells products through multiple channels. The main sales channels are shown in the following figure:
4. Marketing mode
The Company is developing its products under the Winner, Purcotton, and PureH2B brands a coordinated way. With thirty years ofexperience in the production of medical supplies, Winner is a leading medical consumables brand in the Chinese market and a brandwith a global vision. With “To enhance your health, life and well-being” as its vision and industry-leading product quality as thecornerstone of its brand value, the product marketing and promotion for the brand rely more on its brand reputation. With pure cottonproducts as its label, Purcotton ad opts unique, differentiated strategies to build its brand. By integrating multiple promotion channelssuch as directly-sales stores, brand roadshows, celebrity endorsements, event sponsorship, new media, and advertising, Purcottonkeeps conveying to consumers its proposition of “medicine close to life, Purcotton care for health” and its vision of “PurcottonChanges the World”, which helps deepen the meaning of Purcotton brand and increase its brand awareness and loyalty. PureH2Boffers consumers selected products that are high-quality, healthy, and beautiful from around the world through its paid membershipsystem. It offers its members products with extremely competitive prices and a series of excellent offline services such as beautysalons, free makeup, and seminars. With “Love, protect and enjoy nature” as its brand vision, and “Influence the mainstreamconsumption attitude with “inner health brings outer beauty” philosophy, and attract mainstream consumers with natural products” asits mission, PureH2B is bringing consumers a new all-round digital retail experience.(IV) Main Driving Factors of Performance
1. Medical consumables industry and consumer goods industry will keep growing rapidly
WinnerMedicalMedicalconsumables
MedicalconsumablesHealthy consumergoods
Healthy consumer
goodsOnline channels
Online channelsOffline channels
Offline channelsOnline channels
Online channelsOffline channels
Offline channels
Third-party B2C platforms, such as Tmall, JD.com and Amazon
Third-party B2C platforms, such as Tmall, JD.com and AmazonDomestic sales
Domestic salesOverseas sales
Overseas salesE-commerceplatforms
E-commerceplatformsReal stores
Real storesWinner's own brand at hospitals
Winner's own brand at hospitalsWinner's own brand at OTC drugstores
Winner's own brand at OTC drugstoresWinner's own brand sales
Winner's own brand salesOEM mode
OEM modeOfficial website, APP and Wechat mini program of
PurCotton
Official website, APP and Wechat mini program of
PurCottonSelf-operated flagship stores at Tmall and JD.com
Self-operated flagship stores at Tmall and JD.comWarehousing by e-commerce platforms, such asJingDong self-run stores and Tmall Supermarket
Warehousing by e-commerce platforms, such asJingDong self-run stores and Tmall SupermarketDirectly operated and franchised chain stores
Directly operated and franchised chain storesSupermarket sales
Supermarket salesBulk purchase by key accounts or customization
business
As the global demand for healthcare of aging population increases, resident income continues to grow, and medical and healthcareimprove, the global medical consumables market is showing a steady growth trend. The COVID-19 pandemic has made globalconsumers pay more attention to health and personal protection. In China, especially, most families choose to wear masks when theytake public transport and are in public places, so the demand for masks is expected to increase significantly compared with thatbefore the pandemic. After the COVID-19 pandemic outbreak, as the government, medical workers, and consumers in China paygreater attention to protection and quality, the use rate of disposable medical consumables and disposable surgical packs will gethigher; on the other hand, as the Chinese government attaches importance to the medical consumables industry, the supervision overthe industry are continuously strengthened while the reserves of medical consumables are increasing. Therefore, companies that donot comply with laws and regulations will surely be eliminated. In addition, China’s medical dressings are changing from traditionaldressings to high-end wound dressings, and they are expected to replace imported dressings step by step. The medical consumablesmarket in China is growing rapidly, creating a good external environment for enterprise development.In recent years, the total retail sales of consumer goods in China has been rising rapidly, showing an obvious trend of consumptionupgrading. Consumers' demand for green, healthy, and environmentally friendly products is increasing, bringing good opportunitiesin the consumer goods industry.
2. High-quality products and precise brand positioning enhance brand valueThe Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain covering cottonprocurement, R&D, production, and direct export. The Company is one of the early companies that established a medical-gradequality management system in the industry, and has passed the ISO13485 Medical Devices Quality Management SystemCertification. Its product quality complies with the European, American, Japanese, and Chinese standards. Winner Medical enjoys ahigh brand reputation and recognition. In 2020, Winner Medical was praised by the Joint Prevention and Control Mechanism of theState Council as a well-deserved “ordnance factory” in fighting the pandemic. Its wholly-owned subsidiary Winner Medical(Huanggang) was awarded the title of “National Advanced Unit for Fighting the COVID-19 Pandemic” by the CPC CentralCommittee and the State Council. It is also the only enterprise awarded the title in Hubei Province. In May 2021, Winner Medicalwas selected by the Federation of Shenzhen Industries as the “Benchmarking Enterprise in China’s Medical Consumables Sector”and at the same time recognized as an “International Renowned Brand” by the United Nations Industrial Development Organization.In December 2021, Winner Medical’s “pure cotton spunlace non-woven fabric and its products” was selected as the champion ofNational Manufacturing Singles. Winner Medical has expanded its business from the medical field to the consumer goods field,which has also increased the brand value of its consumer products.urcotton is committed to fulfilling consumers’ demand for high-quality products which are “comfortable, healthy, andenvironmentally friendly”. Constantly winning recognition from consumers since its launch in 2009, Purcotton has rapidly growninto a top brand of maternal and child products on Tmall, and has gained greater market shares in the field of maternal and childconsumer products. In October 2019, Purcotton won the reputation of “70 Brand of the 70th Anniversary of the Founding of NewChina” sponsored by CCTV. In January 2021, Purcotton was honored as one of the “Shenzhen Top Brands” by Federation ofShenzhen Industries. In April 2021, Purcotton was included into the list of the second “Shenzhen Top 100 Brands” announced byShenzhen Quality City Promotion Association.In conclusion, with high brand value, the Winner and Purcotton brands will help the Company enhance customer loyalty, stabilizeproduct prices, and expand its market share in the fierce competitive market, thereby ensuring its sustainable and stable profitability.
III. Analysis of Core Competitiveness
1. Advantages of Business Philosophy and Corporate Culture
With offering quality products as its mission, the Winner brand aims to lead in the medical dressing industry, to grow from a smallChinese enterprise to a large international enterprise offering high-quality products with competitive prices recognized by developedcountries, bringing Chinese medical dressings to the international stage. With “To enhance your health, life and well-being” as itsvision, the brand keeps focusing on product quantity and innovations, and making its way into the medical consumables and high-endmedical dressing market. Cotton fiber has ten prominent advantages, including natural, safe, comfortable, naturally degradable, highoutput ratio, drought-resistant, salt and alkali-resistant, environmentally friendly, time-honored, and high social value. With its brandvision of “Purcotton Changes the World”, Purcotton applies “comfortable, healthy, and environmentally friendly” cottons inhousehold supplies and home care products to help customers raise life quality, constantly bringing them happiness, reassurance andsustainability. Sticking to the "cotton fiber only" principle in its operation, Purcotton aims to develop recyclable and renewableresources, gradually replace chemical fibers with natural fibers, and give full play to the use value and environmental protectionvalue of cotton fibers, following the path of low-carbon, environmentally-friendly and sustainable development. With “Love, protectand enjoy nature” as its brand vision, PureH2B insists on the principle of pursuing beauty without sacrificing health for health isbeauty. PureH2B select natural cosmetics and toiletries, healthy food and health products, 3C and health equipment with excellentexperience from around the world for customers. Meanwhile, the groundbreaking, innovative natural products developedindependently by PureH2B are winning the trust of consumers with their applicability and safety, meeting the needs of consumerswho pursue both quality life and health and environmental protection. The visions and business philosophies regarding the company'sthree brands are focused on human health, environmental protection, and improving the quality of life, which are in line with humans'sustainable development strategy.The Company will always uphold its core operating principle of "Quality before profit, brand before speed, social value before
corporate value", and stick by its core values of "Self-sacrifice / Responsible / Collaborative / Innovative / Tenacity / Self-criticism /
Sustainable, development". The Company promotes healthy sports such as running, mountain climbing, and ball games. TheCompany is weakening the power from titles to reduce bureaucracy, and creating open workplaces to ensure efficientcross-department communication. During the epidemic, the Company responded quickly and made every effort to ensure theproduction of protective products. It carried out a series of activities to improve the rapid response capability to market demand interms of decision-making management, process integration, product and equipment innovation, and industry chain integration.Within one month at the beginning of the pandemic outbreak in January 2020, the Company provided 108.9 million masks and114,000 pieces of protective clothing to major hospitals in Hubei, demonstrating the efficient synergy within the Company.
2. Advantages of R&D and Innovation
The Company independently developed the pure cotton spunlace non-woven technology in 2005, and has built a completetechnology cluster based on the technology, obtaining patent licenses in more than 30 countries and regions including the UnitedStates, Europe, and Japan. The innovative application of pure cotton spunlace non-woven fabrics in infection prevention products,such as protective clothing, surgical gowns, and isolation gowns, has not only alleviated the shortage of raw materials during thepandemic but also improved the breathability and comfort of anti-pandemic products, which is safe and environmentally friendly. Inthe field of consumer products, the Company has developed pure cotton tissues, pure cotton wet tissues, sanitary pads with purecotton surface, as well as disposal cleansing towels, disposable underwear and other products. It has been invited to participate in thedevelopment of 14 national standards and industry standards, drafting and developing performance requirements for pure cottonnon-woven surgical dressings, and technical specifications for contact trauma dressings and children's masks. As the first and majordrafter, Purcotton, a wholly-owned subsidiary of the Company, led the development of national standards for cotton tissues (GB/T40276-2021), which requires that the fiber composition and content of cotton tissues shall be identified, and the fiber contenttolerance shall comply with the provisions of GB/T 29862 (released on May 21, 2021 and implemented on December 1, 2021). InDecember 2021, the Company’s “pure cotton spunlace non-woven fabric and its products” was selected as the champion of NationalManufacturing Singles.Since its establishment, the Company has been attaching great importance to scientific and technological innovation and cooperation.It has carried out industry–university–research (IUR) projects with many universities and research institutes, including Hong KongPolytechnic University, Hong Kong Research Institute of Textiles and Apparel, Wuhan Textile University, and Soochow University.The Company worked with Soochow University to carry out “temperature scale of gauze quilt and sleep comfort” project, andpartnered with Wuhan Textile University to carry out “repolymer gauze” for spinning technology. On December 27, the Companyestablished an Winner Medical-Wuhan Textile University Innovation Institute jointly with Wuhan Textile University to accelerate theprocess of transformation of scientific and technological achievements. Xu Weilin, member of the Chinese Academy of Engineering,and Deputy Secretary of the Party Committee and President of Wuhan Textile University was appointed as the President of theInstitute. The Company and the Shenzhen Institute of Advanced Technology of the Chinese Academy of Sciences have jointlyestablished the “Joint Lab for Wound Dressing Innovative Technology Research” to conduct cutting-edge technology research andnew product development of wound dressings. At present, the Company has two provincial R&D platforms, the “GuangdongFunctional Cotton Engineering Technology Research Center” and the “Guangdong Wound Repair Material Engineering TechnologyResearch Center” that are dedicated to the research of functional cotton and wound repair materials.As of December 31, 2021, the Company has obtained 45 invention patents, 518 utility model patents, and 301 design patents inChina; 56 invention patents and 6 utility model patents have been obtained overseas. The Company was regarded as a “LeadingEnterprise in Independent Innovation” by the Shenzhen Municipal People's Government, and a “Shenzhen Enterprise withIntellectual Property Advantages” by the Shenzhen Administration for Market Regulation.
3. Advantages of quality control
The Company is one of the early companies that established a complete medical-grade quality management system in the industry,including SO13485, FDA21CFR820, China’s Good Manufacturing Practice for Medical Devices, and ISO9001, which have beencertified or approved. Its medical dressings meet the quality standards of many countries and regions, including Europe, the UnitedStates, Japan, and China, and have been accepted by these countries and regions. It also implements the quality control requirementsof medical devices when expanding its heath consumer goods business. In addition, the Company's R&D Center and Lads have theprofessional capabilities for product testing certified by the China National Accreditation Service for Conformity Assessment(CNAS). The medical masks have passed the Type I, Type II and Type IIR product certification of EU MDR, PPE certification, andLevel 1, Level 2 and Level 3 certification of FDA 510K in the United States, respectively, in overseas markets. The Company ranked1st in the white book for exporters of epidemic prevention materials issued by the General Administration of Customs and GeneralAdministration of Market Supervision of China during the epidemic in 2020. In China, the masks have passed the testing andcertification of Beijing Institute of Medical Device Testing, National Medical Products Administration. The protective clothing havebeen CE certified for EU Type 5 and Type 6. The Company‘s N95 masks and protective clothing are of good quality and highreputation, allowing it to be the designated reserve unit of the government's prevention and control command, as well as the mainmaterial supplier for Guangzhou, Shenzhen and Nanjing which have been hit by the COVID-19 pandemic in 2021. In addition, theCompany’s product quality has been widely recognized by the market. During the Tokyo Olympic Games and Beijing OlympicGames, many athletes wear the Company’s protective products, which protected athletes to ensure their excellent performance in thefield.To ensure the safety of raw materials for its products, Purcotton uses high-quality cotton from around the world to produce its coreproducts, such as its pure cotton tissue, sanitary pads with pure cotton surface, and pure cotton wet tissues. All the workshops aremanaged according to the management requirements for the workshops of medical dressings, which can help strictly control bacterial
contamination and pollution sources. With its medical-level quantity management control system, Purcotton is able to providecustomers with high-quality consumer goods that are safe and environmentally friendly. Adhering to the concept of “medicine closeto life, Purcotton care for health”, Purcotton not only applies quality natural cotton but also attaches importance to the green weavingand finishing process. To ensure that its products are safe and natural, no fluorescent brighteners are added to its products. Some ofits products are OEKO-TEX Standard 100 certified and Shenzhen Standard certified, the latter is used for advanced evaluation ofShenzhen Standard for infant textile and clothing product standards. Some non-woven products have passed the EU AP (2002) 1 andEC1935/2004 EU Food Contact Materials testing.
4. Product advantages
(1) Medical consumables
The Company's product categories include wound care, infection protection, and cleaning and disinfection, covering applicationscenarios like clinical and medical institutions and families, which can better meet clients' needs of one-stop procurement. In additionto traditional acute wound care products, the Company has also developed representative high-end wet dressings like silicone foamdressings, hydrocolloid dressings, super absorbent pads and scar treatment strips for chronic wounds that are difficult to heal, whichhas further enrich its products. For the clinical use scenarios, the Company is committed to changing from selling single products toproviding customers with integrated solutions. Its infection prevention products include dozens of surgical packs for various sections,such as heart and brain, abdominal cavity, urology, reproduction, facial features, and limbs. In terms of disease protection and control,the Company replaces chemical fiber fabrics with pure cotton spunlace non-woven fabrics for masks, protective clothing, surgicalgowns, and isolation gowns. Such innovative products not only meet infection prevention and control standards but also are morecomfortable and environmentally friendly with better breathability. In the field of home care, the Company provides professionalproducts for clinical use such as hyaluronic acid masks, saline cleaning pads, hydrocolloid band-aids and medical sheet masks toconsumers through portable, sterilized and diversified packages. These professional health care products and services in daily homecare help customers reduce the frequency of going to the hospital.
(2) Healthy consumer goods
The Company’s healthy consumer goods consist of non-woven consumer goods and apparel textile consumer goods. The non-woven
consumer goods include cotton tissues, sanitary pads, and wet tissues; the apparel textile consumer goods include baby supplies, babyclothing, adult clothing, and bedding. The Company accurately captured the market demand for domestic high-quality consumerproducts under the backdrop of consumption upgrading, and took the lead in proposing the innovative concept of replacing chemicalfibers with cotton and getting rid of chemical stimulation, and provide consumers with comfortable and environmentally-friendlyhealthy consumer goods. And its cotton tissues are pioneering tissues in the industry, which can partially replace household paper.Pure cotton tissues are made of degradable cotton after physical processing. There are less chemical stimulation and the tissues canbe reused. Both the production and use of the tissues are more comfortable, safe, and environmentally friendly, so consumeracceptance of the tissues has been significantly improved, and there are many imitators in the market. For pure cotton wet tissues andsanitary pads with pure cotton surface, cotton materials are innovatively used in the parts of these products that contact human skin toreplace traditional chemical fiber and effectively reduce chemical irritation, so they are popular in the markets of baby and femaleconsumers. Due to the excellent breathability and softness of gauze fabrics, the Company's apparel woven consumer products such asgauze children’s clothing, home clothing, bedding and bath towels are getting more popular.
5. Brand advantages
(1) Brand advantages in the field of medical consumables
As one of the market leaders in the field of medical consumables, the Company attaches great importance to product quality andservice, and holds exhibitions worldwide to launches the “Winner Medical Academy”, aiming to invite experts to educate, organizeand participate in academic forums and public welfare activities, thus promoting the brand, allowing “Winner Medical” to enjoy ahigh reputation in the industry, and enabling the products to be widely recognized by customers at home and abroad. During theCOVID-19 pandemic, the Company’s actions were highly recognized by the government of China. Winner Medical was praised bythe Joint Prevention and Control Mechanism of the State Council as a well-deserved “ordnance factory” in fighting the pandemic.Winner Medical (Huanggang) was awarded the title of “National Advanced Unit for Fighting the COVID-19 Pandemic” by the CPCCentral Committee and the State Council. The Company's medical consumables are mainly sold to developed countries and regionssuch as Europe, Japan and the United States, and the products under its brand Winner are mainly sold to developing countries andregions such as Asia, Africa, and Latin America. The Company are providing services for world-renowned medical suppliescompanies such as M?lnlycke, Lohmann, and PAUL HARTMANN. According to statistics from the China Chamber of Commercefor Import and Export of Medicines and Health Products (CCCMHPIE), the Company has been ranked among the top three exportersof Chinese medical dressings for many consecutive years. The products of “Winner Medical” brands have covered all public andmost private hospitals in Hong Kong. In May 2021, Winner Medical was selected by the Federation of Shenzhen Industries as the“Benchmarking Enterprise in China’s Medical Consumables Sector” and at the same time recognized as an “International RenownedBrand” by the United Nations Industrial Development Organization.
(2) Brand advantages in the field of healthy consumer goods
Consumers' demand for high-quality products is increasing due to consumption upgrading. Sticking to the “cotton fiber only”principle in its operations, Purcotton insists on offering “comfortable, healthy, and environmentally friendly” cotton products withhigh quality to consumers to constantly bring them happiness and quality products, which makes Purcotton products popular amongconsumers. Adhering to the concept of “medicine close to life, Purcotton care for health”, Purcotton advocates the use of cotton, toreduce environ mental pollution and to enable consumers to return to a natural and sustainable lifestyle with pure cotton. The purecotton tissues developed by Purcotton is a pioneering category. Purcotton is creating new categories and lifestyles by applying cottonmaterials in its core products , including pure cotton wet tissues, sanitary pads with pure cotton surface, BBNice, as well as gauzetextile products and clothing. It has shaped an brand image of “new Chinese products” with cotton as the core material and excellentproduct quality. Its brand awareness is increasing and its reputation is improving year by year, forming effective competition barriersand bringing powerful added value of products for Purcotton.
6. Advantages of sales channels
(1) Advantages of online channels
In terms of online channels, the Company’s “Winner Medical” and “Purcotton” have completed the deployment of mainstreamthird-party e-commerce platforms, including Tmall, JD.com and Amazon. With the huge user traffic gathered, its sales has coveredmost online shopping consumer groups, and the sales data indicated that the sales of its products rank among the top in the relevantproduct categories in major e-commerce platforms. At the same time, Purcotton is also actively exploring cooperation with newsocial retail and e-commerce platforms by the way of setting brand counters in these platforms, which helps it open up new salesgrowth channels. With the attributes of “sales + social”, Purcotton’s official website is an important platform for its product display,user interaction, and brand promotion. In addition, its self-own official platform, Wechat mini program and APP are also importantparts of the Company's marketing channels.
(2) Advantages of offline channels
In the medical consumables section, the Company’s domestic medical business distributors (hospital market) have covered over4,000 hospitals in more than 30 provinces (incl. municipalities and autonomous regions); retail pharmacy market distributors havecovered nearly 120,000 retail pharmacies in more than 20 provinces (incl. municipalities and autonomous regions); foreign medical
business customers and distributors have covered more than a hundred countries and regions such as Europe, Japan and the UnitedStates.As for healthy consumer goods section, the Company has opened a total of 345 offline stores as of December 31, 2021. Among them,Purcotton has opened 320 offline stores (including 23 franchisees) in more than 60 mid- and high-end shopping malls in Shenzhen,Shanghai, Beijing, Guangzhou and other key cities in China; and PureH2B opened 10 offline stores. The Company integrates itsbrand concept into its store design. It hires well-known designers at home and abroad to upgrade its store image and to enhance itsconsumer experience with an exhibition-style product display balancing both aesthetics and richness of products. It also adds anexperience area to highlight product display and user experience, which has helped increase the Company's sales revenue and furtherincrease its brand awareness.As for offline terminals like chain stores and supermarkets, based on Purcotton's positioning of high-quality consumer goods, theCompany mainly deploys Purcotton products in High-end boutique supermarkets and local leading supermarkets. Meanwhile, theCompany also has set up dedicated sales teams to cover the bulk purchase or customized purchase needs of corporate clients. TheCompany’s core products, such as Purcotton’s cotton tissue and Nice Princess, have successfully entered supermarket chains,convenience store chains and offline maternal & infant stores and communities, including about 5,500 outlets of China ResourcesVanguard, Ole’ Supermarket, Yonghui Supermarket, Sam’s Clubs, Wal-Mart, RT-Mart and other mainstream supermarket chains,over 6,000 outlets of 7-11, Rosen, Convenience Bee, Today, Every Day and other convenience store chains, as well as offlinematernal & infant stores in over 20 provinces and cities.
(3) Advantages of integration between online and offline channels
The omnichannel retail model is a newly emerging retail form that provides consumers with a consistent shopping experience byintegrating physical channels, e-commerce channels, and mobile e-commerce channels. In such form, the convenience of onlinechannels and the consumer experience of offline channels can complement each other. Having a deep insight into the developmenttrend of integrating online and offline channels, the Company thoroughly optimized and integrated various channels to integratetraffic and sales of offline stores and online Wechat mini programs, thereby further improving its operating efficiency andperformance. Online channels can meet offline consumers subsequent consumption needs while offline channels can provide onlineconsumers further product information and service experience. Flows of traffics can be directed between the two kinds of channels,so online and offline traffic can be effectively obtained. As of December 31, 2021, the number of Purcotton users has exceeded 35million, including 16 million registered members of its private platforms (7 million store registered members, and nearly 10 millionregistered members of its official website and WeChat mini programs).
7. Advantages of full industrial chain
The Company upholds the business philosophy of “quality before profit”, and continuously improves its quality, cost and deliverymanagement and control. It has built a full industrial chain with advantages from procurement, production, sterilization, warehousing,to delivery. The Company has seven wholly-owned production subsidiaries, covering a total area of more than one million squaremeters, including 105,000 square meters of clean workshops. It supplies a large quantity of high quality medical supplies and dailynecessities to all over the world every year. Established in 2005 with an area of 550,000 square meters, Winner Medical (Huanggang)is the main production site of pure cotton spunlace non-woven fabrics, cotton tissues, sanitary pads, and masks; with an area of67,000 square meters, Winner Medical (Jingmen) is the main production site of gauze clothing, degreased medical bleached gauze,and dyed medical gauze; with an area of 93,000 square meters, Winner Medical (Jiayu) has four product categories with pure cottonas basic materials, i.e. the cleaning, disinfection, beauty, and care categories, and two product collections: medical and daily useproducts; established in 2001 with an area of 140,000 square meters, Winner Medical (Chongyang) is the Company's main force ofproducing its operating room infection prevention and control products (e.g., disposable surgical kits), epidemic prevention products(e.g., protective clothing), all kinds of cotton balls and cotton pads; established in 2017 with a total area of about 467,000 squaremeters of its phase I and phases II sites, Winner Medical (Wuhan) has brought in electron beam sterilization and international moderncotton spunlace production line; established in 2000 with an area of 150,000 square meters, Winner Medical (Tianmen) is theproduction base of pure cotton spunlace non-woven fabrics and medical gauze in China, covering pure cotton spunlace non-wovenfabrics, pure cotton tissues, medical dressings, and medical protection series products; established in 1999, Winner Medical (Yichang)is the main production base for its grey cloth with 137 sets of advanced air-jet looms. In January 2022, the Company won the plot atGuanlan Street in Longhua District, with an area of nearly 15,000 square meters. In the future, the land will be used as the medicalbiological and sensory protection industrial base in Guangdong-Hong Kong-Macao Bay Area, for scientific research and innovationand industrial production of medical biological, high-end medical dressings, medical sensory protection products.With constant improvement, the Company's excellent production management system has been upgraded from 1.0 to 3.0, coveringseven modules (i.e. standardization, visualization, automation, Just-in-Time, rapid response, value engineering, organizationalguarantee). It has gradually established and improved its daily management system in factory. It has improved its productionefficiency through equipment innovation. For example, its self-developed soft ear loop mask manufacturing equipment truly realizethe unmanned manufacturing of masks with high-efficient equipment; it has basically realized the fully automated production of itsproducts like cotton tissues and wet tissues; it has preliminarily replace manual production with machinery production for cottonswabs, cotton balls, cotton pads, makeup cotton, packages, and drapes, which has greatly supported its rapid production and supply.The Company is also going to explore and build smart factories. It will realize "unmanned production, process-based management,and process digitalization" step by step.
IV. Analysis of Main Business
1. Overview
Due to the outbreak of the COVID-19 pandemic in 2020, the world was in the urgent need of medical protective products. TheCompany realized high growth in annual performance in 2020 thanks to its years of advantages in terms of quality, supply chain andrapid response capabilities in medical consumables segment. In 2021, the production capacity of medical protection productsincreased significantly, with sufficient supply and gradual recovery of prices to normal. Rising global shipping rates and tightcomprehensive capacity resources in 2021 led to delayed shipments of foreign trade sales goods, while energy shortages pushing upraw and auxiliary material prices, resulting in higher production costs for manufacturing enterprises and short-term pressure on totalretail sales growth of consumer goods after the outbreak of the pandemic in 2020. As can be seen, the market business landscapechanged profoundly in 2021, and the industries in which the Company operates have been affected to varying degrees. TheCompany's revenue for 2021 was 8.037 billion yuan, down 35.87% year-on-year, and net profit attributable to shareholders of theparent company was 1.239 billion yuan, down 67.48% year-on-year, with earnings per share of 2.91 yuan.(I) Changes in business during the reporting period: (For detailed reasons for changes in sales revenue by product and bychannel for the two major business segments during the reporting period, please refer to the “Composition of OperatingRevenue” table below)
1. Medical supplies business achieved sales revenue of 3.922 billion yuan this year, down 56.03% from 2020, an increase of
160.69% over 2019.
① For channels and members, due to the global impacts of the COVID-19 pandemic in 2020 and 2021, the share of regional sales
revenue structure of medical supplies business was subject to a fundamental change: the proportions of international marketand domestic market were changed to 40% and 60% in 2021 respectively from 60% and 40% before the pandemic. Therevenue from sales of international market was 1.69 billion yuan, down 71.67% from 2020, mainly due to the decline in salesof protective products for pandemic control, but up 95.68% from 2019. Domestic hospital sales revenue reached 1.246 billion
yuan, an increase of 12.46% and 545.79% over 2020 and 2019, respectively, covering hospitals from 3,000 to more than 4,000,mainly concentrated in Grade II hospitals and above. Medical C-end sales (pharmacy + e-commerce) exceeded 1 billion yuan,an increase of about 4 times over 2019, accounting for 25.65% of the medical segment; of which, sales revenue from medicale-commerce channel reached 677 million yuan, up 20 times from 2019, accounting for 17.26% of the medical business. TmallWinner Medical flagship store ranked Top 8 in annual medical equipment category, Jingdong Winner Medical ranked Top 2 inthe nursing care appliances category; the official website of the small program began operation at the beginning of this year,with the total number of members exceeded 500,000, quickly laying the foundation of private e-commerce platform. As of theend of the reporting period, the cumulative number of fans on domestic e-commerce platforms was 9.25 million. Cross-border
e-commerce covers 11 marketplaces around the world on the Amazon platform, and there have been two multi-million singleproducts and a number of million-level potential top-selling products.
② In terms of products, revenue from sales of masks and protective clothing was 1.94 billion yuan in 2021, decreasing from 63.20%
of the medical business in 2020 to 49.47% in 2021, and revenue from sales of other medical consumables was 1.98 billion yuan,an increase of 45% from 2019. Revenues from sensory control products and disinfection and cleaning products for operating
room decreased year-on-year, which was mainly due to the recovery of quantity and price of surgical gowns and disinfectionsolution by foreign customers to normal, as they used the products for the pandemic prevention and control. However, the salesrevenue of sensory control products and cleaning and disinfection products for operating room increased by 80% and 71%,respectively, compared to 2019. The sales of high-end wound dressings increased by 23.04% compared with last year to 106million yuan in 2021, as the vast majority of revenue came from overseas markets. Due to the international market medicalinsurance control factors, it is expected to further undertake more orders overseas. In 2021, the Company obtained certificatesfor Category II scar treatment strips in China, and certificates for scar cream and scar treatment strips in Europe and the UnitedStates. With the increase in demand for medical laser spot removal, the application of auxiliary scar removal scenariosincreases significantly. Through the proposed acquisition of Longterm Medical with rich product lines in 2022, the Companywill become a leading company in the segment of high-end wound dressings in China. As of the date of disclosure of this report,the number of registration certificates for high-end wound dressings of Category II and Category III products are 12 and 1 forthe Company and 10 and 4 for Longterm Medical, respectively.
2. The healthy consumer goods business achieved sales revenue of 4.054 billion yuan this year, up 15.27% compared to the sameperiod last year and 34.79% compared to the same period in 2019. After excluding the mask products in the same caliber, thesales revenue increased by 24.82% compared with the same period last year.
① For channels and members, Purcotton diversified layout of online and offline channels. For online channels, there areself-operated platforms such as official websites and applets, as well as third-party platforms such as Tmall, Jingdong, Vipshop,Douyin and Xiaohongshu. For offline channels, the Company focused on direct center stores, supplemented by a small numberof franchises, partially stationed in large supermarkets. Thanks to the WeChat applets, it realized interconnection betweenonline and offline channels, enabling multi-platform multi-channel complementary advantages and achieving omni-channellayout. During the year, 81 new offline stores were opened (including 63 directly operated stores and 18 franchisees), and thescale of sales revenue achieved by offline stores in 2021 increased by 29.34% year-on-year, including 14.97% year-on-yearincrease in sales of stores opened for more than two years. For the new supermarket channels. The Company added more than380 large supermarkets in East, South and Central China, 239 Better Life stores and more than 4,000 Watsons outlets, whilenew products were added to the old channel (such as sanitary pads and new gauze series), and the sales revenue from the
supermarket channel increased by 51.18% compared with last year. In the absence traffic drainage for masks due to thepandemic last year, the e-commerce channel effectively improved the conversion rate of new customers and repurchase ratethrough brand activities, content communities, membership operations and other ways. In 2021, the Company activelyexpanded interesting e-commerce platforms such as Douyin and Xiaohongshu, thus forming a “super KOL living-streaming +brand self-broadcast” marketing mode. Thanks to the rapid sales growth, the Company reached 2.541 billion yuan in salesrevenue through e-commerce channels, an increase of 8.69%, including 562 million yuan in sales revenue through officialwebsite, applets and other own platform, an increase of 44.85%. By the end of 2021, Purcotton had more than 35 millionmembers across the domain, including 16.84 million private domain members, an increase of 31.97% from last year. Femaleconsumers account for 90%, of which 80% are aged 25-45. As the Company's product development attaches importance to faceand to the Z-era consumer group, the amount of the 18-25-year-old consumer group will gradually increase.
② In terms of products, cotton tissues and wet tissues were affected by the products made of chemical fiber with lower prices, andsales revenue declined somewhat. Purcotton as the first drafting unit led the development of national standards for “cottontissues”, which requires cotton tissues products to identify the fiber composition and content. The Standards was implementedon December 1, 2021, aiming to help standardize the cotton tissues industry. During the reporting period, sanitary pads grew ata significant rate, while baby supplies, baby clothing, adult clothing and other textile products performed strongly this year,with year-on-year growth rates between 30-50%. This year's new product launch progressed as planned, with products such aspopular ultra-soft cleansing face washcloths, high-waisted menstrual pants, hyaluronic acid wet makeup pads, pocket cottontissues, face wash cotton tissue rolls, fifth-generation upgrading ultra-clean absorbent sanitary pads, antibacterial sunscreenclothing and apparel, and thanks to co-branding with Ultraman, the Ultraman custom face washcloths, wet tissues andchildren's bath towels were launched to meet new consumer demand.
3. The net profit attributable to shareholders of the parent company was 1,239 million yuan, decreasing from 3,810 million yuan
in last year. As the sales volume and price of medical protective products dropped in the global market, plus increase in theworld shipping costs and raw and auxiliary materials prices, the Company increased sales costs, while launched employee stockincentive plan at the end of 2020. During the reporting period, a share-based payment expense of 68.1203 million yuan wascharged, and after excluding the impact of the share-based payment expense on net profit, the net profit attributable toshareholders of the parent company was 1.309 billion yuan.(II) Overview of operation and managementDuring the reporting period, the Company focused on the following work:
1. Digital transformation
The Company has adopted numerous reform measures since 2019 to promote “consumer-centric” and “digital and intelligentmanufacturing-driven” business transformation, and carry out the five digital strategies of “centralized commodity digital operation”,“omni-channel digital operation”, “consumer omni-channel operation”, “digital operation of supply chains” and “smartmanufacturing digital operation”. During the reporting period, the first phase of “omni-channel digital operation” and “centralizedcommodity digital operation” enabled the support of multiple e-commerce platforms, one inventory for online and offline, intelligentdistribution of orders, omni-channel price and unified membership rights across channels. Consumer omni-channel operation focuseson CDP (Consumer Data Platform) and MA (Marketing Automation), which have created a domain-wide consumer operation systemand are committed to realizing the accurate matching of people, goods and fields at the data and technology levels. The digital smartlogistics is mainly launched together with JDLogistics, which is committed to transforming the Company’s existing logistics systemfrom a growth supporter to a revenue driver, and to building an integrated, intelligent, expandable and fast-responding activeintelligent logistics system based on customer’s demand. The online pilot of Wuhan warehouse was completed in 2021. Smartmanufacturing digital operation also refers to the plans of top consulting firms, and is committed to creating a green, low-carbon andagile platform for ecological synergy in industry chain and group unified control, promoting the Company to rapidly andsignificantly reduce manufacturing costs. Through the Salesforce CRM solution, in 2021, the Company has completed the foundationof CRM system and established end-to-end digital capabilities for marketing and sales to support Winner Medical’s customer,marketing, sales and channel management business with efficient processes and business collaboration. During the reporting period,the CRM project has been launched online as a whole, which helps each sales department enable the full lifecycle management ofcustomers and develop a unified sales configuration and quotation tool, aiming to improve customer acquisition capability andmarketing ROI. The Company launched the SAP Reinvention Project, and completed SAP ERP upgrading and renovation online, soas to make the system agile enough to improve operational efficiency, and better meet the challenges of a rapidly changing marketand globalization.
2. Product R&D
In terms of medical consumables, the Company, on the basis of self-developed pure cotton spunlace non-woven fabrics, made furtherinvestment and redevelopment, thus continuously reducing the production costs of raw materials. In the post-pandemic era, theCompany remained market competitiveness in application of pure cotton spunlace non-woven fabrics to surgical gowns, medicalprotective clothing, isolation gowns, medical masks and other infection control and disease control protective products. In themeantime, the cost reduction of this core base material can further expand its market application scope, which is in line with thenational policies and guidance of carbon neutrality and carbon peaking. At the same time, the Company has gradually perfected itshigh-end wound dressing product line layout, and continues to invest in research and development of core basic raw materials,mastering the core technology of materials such as wound exudate management and infection control. To improve the performance ofour products, meet the differentiated and customized needs of customers and increase the competitiveness of our products in themarket, we continue to create maximum value for our customers by continuously improving product formulations and optimizing
production processes, so as to make products better and more sophisticated. The Company has made significant progress in the massproduction of key hydrophilic fiber dressings this year, and obtained domestic certificates for the marketing of hydrocolloid, scarrepair products. The Company also successfully got the Category II certificates for and market its first active medical device --negative-pressure drainage sucker. The third generation of bioactive dressings are in the accelerated research and development stage,preparing for advanced R&D layout for future sustainable development of high-end wet dressingsIn terms of healthy consumer goods business, the Company successfully completed research and development of “soft and flexiblegauze free of additive”. Thanks to its independent innovation of new process of yarns, together with physical batting, the fabric issofter and more flexible. This kind of material is applied to pure cotton bedding and gauze toiletries, allowing more energy-savingand environmentally-friendly production as well as safer and healthier products. The “pure cotton antibacterial cooling fabric”developed by the Company integrates cooling microcapsules and herbal cotton antibacterial technology with pure cotton fabric,which can quickly absorb heat and achieve long-lasting cooling effect. This kind of fabric has 5A antibacterial effect, and can be usedfor baby and adult’s cooling T-shirts, pants, summer sleeping mats, etc. At the same time, the Company developed “pure cottonunidirectional moisture-guiding fabric” for children’s loungewear and baby supplies, which completely solves the pain point ofchildren who are easy to catch a cold after sweating. In terms of industry-university-research collaboration, the research project of“temperature scale of gauze quilt and sleep comfort” carried out by the Company and Soochow University has been completed,providing guidance for consumers to make rational choice in scientific parenting and sleep comfort. With professional and leancotton technology, the Company introduced the rare and precious professional equipment to achieve “Liquid Ammonia MercerizedCotton fabrics”, so that the 100% cotton not only is soft and breathable, but also has a silk-like appearance with anti-wrinkle andelastic characteristics, making it easier to take care of than silk. With light weight and high quality, it is applied to adult home wear,more conducive to healthy sleep and comfortable home life.
3. Brand building
2021 marks the 30th anniversary of the founding of the Company. It plans to increase the investment in marketing activities toenhance brand influence. During the reporting period, Winner Medical was involved in the shooting projects of “Days and Nights inWuhan”, the first documentary film in China focusing on the war against COVID-19 pandemic, and “Chinese Doctors”, ablockbuster adopted from the real story of Wuhan Jinyintan Hospital. It also worked with Shenzhen TV to produce the “My WhiteGown 2: the Ace Sections”, Shenzhen TV’s first documentary observation program of doctors. Moreover, it strives to drive traffic toe-commerce and mini program through live-streaming with goods. In the professional academic field, Winner Medical influenced theprofessional market through the dissemination of academic conferences at all levels. In the thematic activities jointly sponsored byWinner Medical and Beijing Infection Control and Disinfection Technology Industry Association, it worked with many renownednational experts to help grassroots organizations at all levels nationwide to improve the protection concepts of medical personnel.Through the Nurses’ Day thematic activities, the Company built partnerships with nearly 100 hospitals and influenced key customers.It also attended CMEF, World Health Expo and other exhibitions to consolidate its influence in the industry. In addition, WinnerMedical is promoting a clinical comparative observation program for surgical caps in the middle and large operating rooms, andstrengthening clinical academic cooperation with domestic top hospitals.Purcotton continues to deepen communication with consumers, aiming to deliver the multiple advantages “cotton” in terms ofenvironmental protection, sustainable development, etc., and constantly communicate with consumers emotionally. During thereporting period, it upgraded its store image with the help of an international team. As a designated partner brand, it appeared in the“Kids Fashion Week 2021” of China Oil Painting Institute in Beijing. The Company also worked with CCTV Technology Channelfor a second time to produce “Fashion Technology Show”. The Programme led the public into the world of cotton to enhance thepublic’s attention to pure cotton tissues and wet tissues, making the Purecotton philosophy deep in the hearts of people. On theoccasion of the Earth Day, it worked with the authoritative color agency COLORO? to launch the “cotton” theme series colornumbers for the first time, explaining cotton colors. On the 12th China International Cotton Conference held in Suzhou, Purcotton, asthe first batch of participating companies on the consumer side, made a wonderful appearance and talked about the sustainabledevelopment of cotton, aiming to create a quality image of “Chinese cotton”. In October, it worked with the Spring-Summer 2022Collection in Shanghai Fashion Week to launch an immersive time travel with natural and pure cotton, showing a deep interpretationof the environmental value of cotton and sustainable charm. In November, as a member of the “Fashion Health” Pink Ribbon CharityAlliance, it converted the power of cotton into love energy, and participated in the promotion of “PinkBag” women‘s public welfarecare project, sharing courageous voice for love. In addition, Purcotton actively carries out brand marketing activities through livingstream, and invites KOLs in maternal & infant and travel segments to the living events to promote attractive cotton products. Thanksto the long-term activities of “normalized store livestream shopping” and “normalized plant livestream shopping”, Purcotton candisplay its unique advantages of stores and plant industrial chain, and direct online and offline traffic to each other.
4. Internal management
At the beginning of 2021, the Company launched a risk control system project, and engaged external renowned consultants to sortedout potential business risks of departments at all levels. It also built the internal control management committee, formulated theComprehensive Risk Management System, the Mechanism for Regular Reporting of Risk Information, the Mechanism forEmergency Handling of Sudden and Significant Risks, the Definition of Routine and Significant Risk Events, and the Mechanism forAccountability for Risks, and established the normalized operation mechanism of risk management. It completed special research foreach risk, built risk warning foundation and risk control mechanism, and developed a risk control and management platform, with aview to realizing the controllability, visibility, warning and transformation of risks.In 2021, the Company’s businesses entered a new round of rapid expansion, with a surge in demand for talents. To enhance theoverall competitiveness of the Company and deepen and thicken the talent pool, a group of experienced professional managementteams was introduced from the industry. The Company has recruited many talents in management, marketing and R&D from P&G,
Wal-Mart, SF and Nielsen to further optimize the Company’s management strategy, improve marketing effectiveness and enhanceproduct creativity.
2. Revenue and Costs
(1) Revenue composition
Overall operating revenues
Unit: yuan
| 2021 | 2020 | Year-on-year increase/decrease | Change reason description | |||
| Amount | Proportion in revenue | Amount | Proportion in revenue | |||
Total revenue
| Total revenue | 8,037,420,812.91 | 100% | 12,533,945,946.63 | 100% | -35.87% | / |
By industry
By industryMedicalconsumables
Note 1
| Medical consumables Note 1 | 3,922,006,868.38 | 48.80% | 8,920,712,521.98 | 71.17% | -56.03% | Prices of raw material and product returning to normal |
Healthy consumergoods
| Healthy consumer goods | 4,054,214,732.21 | 50.44% | 3,517,061,738.06 | 28.06% | 15.27% | Resulting form the increase in sales channels and new products |
Other businesses
| Other businesses | 61,199,212.32 | 0.76% | 96,171,686.59 | 0.77% | -36.36% | Resulting form the decrease in sales of raw materials and semi-finished products |
By products
By productsMedicalconsumables -traditional woundcare and wounddressing products
| Medical consumables - traditional wound care and wound dressing products | 722,278,464.76 | 8.99% | 759,751,922.28 | 6.06% | -4.93% | No major changes |
Medicalconsumables -advanced wounddressing products
| Medical consumables - advanced wound dressing products | 106,508,385.52 | 1.33% | 86,564,910.83 | 0.69% | 23.04% | Resulting form increase in new products and orders |
Medicalconsumables -infectionpreventionproducts inoperating rooms
| Medical consumables - infection prevention products in operating rooms | 433,797,895.65 | 5.40% | 690,626,432.63 | 5.51% | -37.19% | Prices of raw material and product returning to normal |
Medicalconsumables -products ondisease preventionand control
| Medical consumables - products on disease prevention and control | 2,377,805,588.44 | 29.58% | 7,011,523,043.56 | 55.94% | -66.09% | Prices of raw material and product returning to normal |
Medicalconsumables -disinfecting andsanitizing products
| Medical consumables - disinfecting and sanitizing products | 281,616,534.01 | 3.50% | 372,246,212.68 | 2.97% | -24.35% | Prices of raw material and product returning to normal |
Healthy consumergoods - cottontissues
| Healthy consumer goods - cotton tissues | 963,021,436.98 | 11.98% | 944,201,375.98 | 7.53% | 1.99% | No major changes |
Healthy livingconsumer products- menstrual pads
| Healthy living consumer products - menstrual pads | 548,455,495.71 | 6.82% | 416,487,477.36 | 3.32% | 31.69% | Resulting form product upgrade and expansion of sales channels |
Healthy livingconsumer products- wet tissues
| Healthy living consumer products - wet tissues | 177,019,643.94 | 2.20% | 212,241,182.02 | 1.69% | -16.60% | Resulting form the market chemical fiber raw materials and low price competition |
| Healthy living consumer products - other non-woven consumables | 447,206,583.29 | 5.56% | 599,948,666.83 | 4.79% | -25.46% | Resulting form the decline in sales of masks |
Healthy livingconsumer products- baby careproducts
| Healthy living consumer products - baby care products | 362,311,219.62 | 4.51% | 278,354,957.01 | 2.22% | 30.16% | Model, design and color enhancement of products; storytelling and theme enhancement on communication; digital automatic replenishment on new effect release |
| Healthy living consumer products - baby clothes | 509,175,928.16 | 6.34% | 366,929,602.68 | 2.93% | 38.77% | |
| Healthy living consumer products - adult clothing | 679,999,664.91 | 8.46% | 447,589,263.48 | 3.57% | 51.92% | |
| Healthy living consumer products - other textile consumables | 367,024,759.60 | 4.57% | 251,309,212.70 | 2.01% | 46.05% |
Other businesses
| Other businesses | 61,199,212.32 | 0.76% | 96,171,686.59 | 0.77% | -36.36% | Resulting form the decrease in sales of raw materials and semi-finished products |
By regions
By regionsDomestic
| Domestic | 6,343,778,322.52 | 78.93% | 6,555,970,567.31 | 52.31% | -3.24% | No major changes |
Abroad
| Abroad | 1,693,642,490.39 | 21.07% | 5,977,975,379.32 | 47.69% | -71.67% | Prices of raw material and product returning to normal |
By sales modes
By sales modes
Medicalconsumables -direct sales
| Medical consumables - direct sales | 1,247,971,768.24 | 15.53% | 5,363,519,910.61 | 42.79% | -76.73% | This is mainly due to higher sales of protective products for pandemic control directly to government and enterprises in 2020, while gradually returning to normal in 2021 |
Medicalconsumables -distributions
| Medical consumables - distributions | 1,494,353,752.08 | 18.59% | 1,962,393,065.01 | 15.66% | -23.85% | No major changes |
Medicalconsumables -agents
| Medical consumables - agents | 502,684,789.51 | 6.25% | 1,100,822,066.76 | 8.78% | -54.34% | This is mainly due to the large amount of protective products for pandemic control sold through agents in 2020, and the decrease in demand for overseas protective products for pandemic control in 2021, with prices returning to pre-epidemic levels |
Medicalconsumables -e-commerce
| Medical consumables - e-commerce | 676,996,558.55 | 8.42% | 493,977,479.60 | 3.94% | 37.05% | It is mainly due to the large sales growth in 2021 brought by Winner Medical E-Commerce through multi-platform operations, focusing on home care scenario products, increasing new product operation |
resources andimproving new storeoutputHealthy consumergoods -e-commerce
| Healthy consumer goods - e-commerce | 2,541,320,964.05 | 31.62% | 2,338,150,522.38 | 18.65% | 8.69% | No major changes |
Healthy consumergoods - offlinestores
| Healthy consumer goods - offline stores | 1,234,967,801.51 | 15.37% | 954,845,837.56 | 7.62% | 29.34% | Resulting from the increase in the number of new stores and same store year-over-year sales |
Healthy consumergoods -supermarketchannels
| Healthy consumer goods - supermarket channels | 203,037,328.70 | 2.53% | 134,302,951.18 | 1.07% | 51.18% | Increase in the number of supermarkets and new products |
Healthy consumergoods - KeyClients
| Healthy consumer goods - Key Clients | 74,888,637.95 | 0.93% | 89,762,426.94 | 0.72% | -16.57% | No major changes |
Other businesses
| Other businesses | 61,199,212.32 | 0.76% | 96,171,686.59 | 0.77% | -36.36% | Resulting form the decrease in sales of raw materials and semi-finished products |
Note 1: From the perspective of management and operation, the management of pure cotton spunlace non-woven fabrics and medicalconsumables was not differentiated; therefore, the Company started to integrate the pure cotton spunlace non-woven fabric segmentinto the medical consumables segment for unified management in 2021. Data adjustment involving the same period last year: thesales and costs of pure cotton spunlace non-woven fabrics in 2020 were consolidated into medical consumables revenue and costs,and were consolidated into medical consumables - traditional wound care and dressing products revenue and costs by product salesand costs, involving revenue amounting to 236,563,201.01 yuan and costs amounting to 157,878,300.10 yuan.
(2) Industries, products, regions, and sales patterns that accounting for more than 10% of the Company's
operating revenue or operating profit
√Applicable □ Not applicable
Unit: yuan
| Revenue | Costs | Gross profit margin | Year-on-year increase/decrease of revenue | Increase or decrease in costs over the same period of the previous year | Year-on-year increase/decrease of gross profit margin |
By industry
By industryMedicalconsumables
| Medical consumables | 3,922,006,868.38 | 2,058,951,232.55 | 47.50% | -56.03% | -40.10% | -13.97%注1 |
Healthyconsumer goods
| Healthy consumer goods | 4,054,214,732.21 | 1,936,347,161.31 | 52.24% | 15.27% | 22.88% | -2.96% |
By products
By products
Medicalconsumables -products ondiseaseprevention andcontrol
| Medical consumables - products on disease prevention and control | 2,377,805,588.44 | 1,089,169,415.21 | 54.19% | -66.09% | -52.30% | -13.24% |
Healthyconsumer goods- cotton tissues
| Healthy consumer goods - cotton tissues | 963,021,436.98 | 495,334,534.63 | 48.56% | 1.99% | 11.37% | -4.33% |
By regions
By regionsDomestic
| Domestic | 6,343,778,322.52 | 3,186,129,820.11 | 49.78% | -3.24% | 5.36% | -4.10% |
Abroad
| Abroad | 1,693,642,490.39 | 842,116,826.06 | 50.28% | -71.67% | -58.85% | -15.49%注2 |
By sales modes
By sales modesMedicalconsumables -
| Medical consumables - | 1,247,971,768.24 | 673,244,499.68 | 46.05% | -76.73% | -60.74% | -21.97%注3 |
direct salesMedicalconsumables -distributions
| Medical consumables - distributions | 1,494,353,752.08 | 869,102,768.36 | 41.84% | -23.85% | -9.64% | -9.15% |
Healthyconsumer goods- e-commerce
| Healthy consumer goods - e-commerce | 2,541,320,964.05 | 1,326,719,792.72 | 47.79% | 8.69% | 14.64% | -2.71% |
Healthyconsumer goods- offline stores
| Healthy consumer goods - offline stores | 1,234,967,801.51 | 501,269,557.82 | 59.41% | 29.34% | 48.31% | -5.91% |
*Notes: Note 1, Note 2: The reason for the decline in the gross margin of medical consumables is mainly due to the decline in thegross margin of the disease control and prevention products; in 2021, affected by the fluctuation of the pandemic and the marketsupply and demand, the price of disease control and protective products gradually returned to normal.Note 3: Direct sales gross margin decreased significantly, mainly due to the impact of domestic and international epidemic andmarket supply and demand in 2020; as each channel directly purchased from the Company accounted for a larger proportion ofhigher prices than other channels, the overall gross profit shared became higher. In 2021, the sales of each channel gradually returnedto normal, bringing gross margin to normal.
In the event that the statistical caliber of the Company’s main business data is adjusted in the reporting period, the Company shallfollow the main business data in the past year adjusted by the caliber at the end of the reporting period
□ Applicable √ Not applicable
The Company is required to comply with the disclosure requirements of “Textile and Apparel Business” in the “Shenzhen StockExchange Self-Regulatory Guidelines for Listed Companies No. 3 -- Industry Information Disclosure”
Unit: yuan
| Revenue | Costs | Gross profit margin | Year-on-year increase/decrease of revenue | Increase or decrease in costs over the same period of the previous year | Year-on-year increase/decrease of gross profit margin |
By industry
By industryMedicalconsumables
| Medical consumables | 3,922,006,868.38 | 2,058,951,232.55 | 47.50% | -56.03% | -40.10% | -13.97% |
Healthyconsumer goods
| Healthy consumer goods | 4,054,214,732.21 | 1,936,347,161.31 | 52.24% | 15.27% | 22.88% | -2.96% |
By products
By products
Medicalconsumables -products ondiseaseprevention andcontrol
| Medical consumables - products on disease prevention and control | 2,377,805,588.44 | 1,089,169,415.21 | 54.19% | -66.09% | -52.30% | -13.24% |
Healthyconsumer goods- cotton tissues
| Healthy consumer goods - cotton tissues | 963,021,436.98 | 495,334,534.63 | 48.56% | 1.99% | 11.37% | -4.33% |
By regions
By regionsDomestic
| Domestic | 6,343,778,322.52 | 3,186,129,820.11 | 49.78% | -3.24% | 5.36% | -4.10% |
Abroad
| Abroad | 1,693,642,490.39 | 842,116,826.06 | 50.28% | -71.67% | -58.85% | -15.49% |
In the event that the statistical caliber of the Company’s main business data is adjusted in the reporting period, the Company shallfollow the main business data in the past year adjusted by the caliber at the end of the reporting period
□ Applicable □ Not applicable
Whether the Company has sales terminals in brick-and-mortar stores
√ Yes □ No
Distribution of brick-and-mortar stores
| Types of stores | Number of stores | Area of stores | Number of new stores during the reporting period | Number of stores closed at the end of the reporting period | Reasons for store closings | Brands involved |
Direct-sale stores
| Direct-sale stores | 322 | 124,886 | 63 | 12 | Resulting from the Company’s active strategies against the epidemic control and contract expirations. | Purcotton, PureH2B, Purunderwear |
Franchises
| Franchises | 23 | 4,957 | 18 | 0 | N/A | Purcotton |
Total area and performances of direct-sale stores
| Levels of areas | Number of stores | Total area | Revenue in 2021 (RMB ’0,000) | Same period last year | YoY increase/decrease in average performance of stores | Cause description |
Less than 300m
| Less than 300m2 | 110 | 22,628.19 | 34,360.96 | 28,298.17 | 21.42% |
300~500 m
| 300~500 m2 | 70 | 26,397.45 | 30,759.76 | 23,377.73 | 31.58% |
500~800 m
| 500~800 m2 | 61 | 37,728.19 | 31,623.85 | 25,959.31 | 21.82% |
More than800m
| More than 800m2 | 23 | 21,196.58 | 12,509.83 | 9,458.44 | 32.26% |
Total
| Total | 264.00 | 107,950.41 | 109,254.39 | 87,093.65 | 25.44% | Note 1 |
Note: The above data are from Purecotton stores opening for more than 12 months as of December 31, 2021, and the operatingrevenues of brick-and-mortar stores exclude the sales of the stores driven to applets.Note 1: The 25.44% increase in average store efficiency was mainly due to the less-than-12-month operating period of stores openingin 2020 and the significant decrease in offline store traffic due to the impact of the pandemic. If the caliber is adjusted to storesopening for more than 24 months as of December 31, 2021, the average store efficiency will increase by 14.97% year-on-year.Top 5 Stores in terms of Operating Revenues
| S/N | Name of stores | Opening date | Revenue (yuan) | Average performance of the store |
| 1 | Store 1 | October 25, 2017 | 16,472,530.01 | 40,793.78 |
| 2 | Store 2 | November 11, 2017 | 11,759,331.96 | 10,603.55 |
| 3 | Store 3 | May 15, 2010 | 11,650,512.26 | 17,910.09 |
| 4 | Store 4 | August 06, 2012 | 11,531,564.46 | 19,719.15 |
| 5 | Store 5 | January 18, 2018 | 10,604,399.36 | 7,955.29 |
Total
| Total | -- | -- | 62,018,338.05 | 15,196.51 |
New stores of listed companies
√ Yes □ No
| Name of stores | Address of stores | Opening time | Contract area (m2) | Investment amount (yuan) | Product Category | Business type | Business model | Property ownership status | Number of stores |
Direct-sale stores
of Purcotton
| Direct-sale stores of Purcotton | Northeast China | 2021 | 609.96 | 4,549,972.33 | Healthy consumer goods | Retail | Direct-sale stores | Purcotton leasing | 2 |
Direct-sale stores
of Purcotton
| Direct-sale stores of Purcotton | North China | 2021 | 2,227.88 | 16,336,720.70 | Healthy consumer goods | Retail | Direct-sale stores | Purcotton leasing | 8 |
Direct-sale storesof Purcotton
| Direct-sale stores of Purcotton | East China | 2021 | 3,126.20 | 20,748,798.93 | Healthy consumer goods | Retail | Direct-sale stores | Purcotton leasing | 12 |
Direct-sale stores
| Direct-sale stores | South | 2021 | 4,621.54 | 33,517,371.98 | Healthy | Retail | Direct-s | Purcotton | 16 |
| of Purcotton | China | consumer goods | ale stores | leasing |
Direct-sale storesof Purcotton
| Direct-sale stores of Purcotton | West China | 2021 | 2,238.08 | 14,360,736.19 | Healthy consumer goods | Retail | Direct-sale stores | Purcotton leasing | 8 |
Direct-sale stores
of Purcotton
| Direct-sale stores of Purcotton | Central China | 2021 | 4,088.39 | 22,046,709.82 | Healthy consumer goods | Retail | Direct-sale stores | Purcotton leasing | 11 |
Purcottonfranchises
| Purcotton franchises | North China | 2021 | 678.64 | 1,839,141.61 | Healthy consumer goods | Retail | Franchises | Purecotton Franchises | 3 |
Purcottonfranchises
| Purcotton franchises | West China | 2021 | 1,717.00 | 5,410,078.62 | Healthy consumer goods | Retail | Franchises | Purecotton Franchises | 9 |
Purcottonfranchises
| Purcotton franchises | Central China | 2021 | 880.68 | 3,265,117.65 | Healthy consumer goods | Retail | Franchises | Purecotton Franchises | 5 |
Purcottonfranchises
| Purcotton franchises | Southwest China | 2021 | 333.13 | 500,727.16 | Healthy consumer goods | Retail | Franchises | Purecotton Franchises | 1 |
Total
| Total | 20,521.50 | 122,575,374.99 | 75 |
Does the Company disclose the information on Top 5 franchises
□Yes √No
(3) Whether the Company's physical sales revenue is greater than the service revenue
√ Yes □ No
| Industry category | Item | Unit | 2021 | 2020 | Year-on-year increase/decrease |
Medicalconsumables - gauze
| Medical consumables - gauze | Sales quantity | ton | 5,919.75 | 6,104.92 | -3.03% |
| Production output | ton | 6,039.9 | 6,263.58 | -3.57% | |
| Inventory | ton | 995.93 | 875.78 | 13.72% |
Medicalconsumables -cotton
| Medical consumables - cotton | Sales quantity | ton | 3,899.88 | 3,405.98 | 14.50% |
| Production output | ton | 3,989.77 | 3,498.68 | 14.04% | |
| Inventory | ton | 641.92 | 552.03 | 16.28% |
Medicalconsumables -masks
| Medical consumables - masks | Sales quantity | ’0,000 pieces | 337,060.18 | 338,900.27 | -0.54% |
| Production output | ’0,000 pieces | 368,638.00 | 360,134.89 | 2.36% | |
| Inventory | ’0,000 pieces | 60,291.48 | 28,713.66 | 109.97% |
Medicalconsumables -protective clothing
| Medical consumables - protective clothing | Sales quantity | ’0,000 suits | 1,476.6 | 972.46 | 51.84% |
| Production output | ’0,000 suits | 1,485.69 | 1,029.43 | 44.32% | |
| Inventory | ’0,000 suits | 67.61 | 58.52 | 15.53% |
Medicalconsumables -surgical gowns
| Medical consumables - surgical gowns | Sales quantity | ’0,000 suits | 1,380.46 | 1,984.47 | -30.44% |
| Production output | ’0,000 suits | 1,389.6 | 2,073.64 | -32.99% | |
| Inventory | ’0,000 suits | 129.48 | 120.34 | 7.60% |
Medicalconsumables -medical combo kits
| Medical consumables - medical combo kits | Sales quantity | ’0,000 kits | 3,767.56 | 2,964.26 | 27.10% |
| Production output | ’0,000 kits | 3,802.00 | 2,940.51 | 29.30% | |
| Inventory | ’0,000 kits | 288.37 | 253.93 | 13.56% |
Medicalconsumables - purecotton spunlacenon-woven fabrics
| Medical consumables - pure cotton spunlace non-woven fabrics | Sales quantity | ton | 4,785.61 | 5,496.68 | -12.94% |
| Production output | ton | 4,780.12 | 5,449.27 | -12.28% | |
| Inventory | ton | 227.57 | 233.06 | -2.35% |
| Healthy consumer goods - cotton tissues | Sales quantity | ’0,000 kits | 17,903.66 | 17,466.21 | 2.50% |
| Production output | ’0,000 kits | 15,682.89 | 16,522.28 | -5.08% | |
| Inventory | ’0,000 kits | 3,447.34 | 5,668.11 | -39.18% |
Healthy livingconsumer products -menstrual pads
| Healthy living consumer products - menstrual pads | Sales quantity | ’0,000 pieces | 68,805.68 | 56,676.09 | 21.40% |
| Production output | ’0,000 pieces | 65,430.61 | 64,540.95 | 1.38% | |
| Inventory | ’0,000 pieces | 17,626.76 | 21,001.83 | -16.07% |
Reasons for more than 30% year-on-year changes in the relevant data
√Applicable □ Not applicable
(1) The increase in medical consumables - mask inventory is mainly resulted from the advancing stock for the Spring Festival 2022due to the impact of the pandemic at the end of 2021. Medical consumables - protective clothing sales and production growth ismainly resulted from the increase in demand, production and sales due to the pandemic impacts. The increase in medicalconsumables - surgical gowns is mainly resulted from the increase in demand of foreign trade bids while decreasing in 2021.
(2) The decrease in inventories of healthy consumer goods - cotton tissues is mainly due to the inventory reduction in thebeginning of the year by reducing the production volume and increasing the sales volume in 2021, thus accelerating the capitalturnover and reducing the capital employed in inventories.
(4) Performance of significant sales contracts, procurement contracts entered into by the Company up tothe current reporting period
√Applicable □ Not applicable
Performance of significant sales contracts entered into by the Company up to the current reporting period
√Applicable □ Not applicable
Unit: RMB ’0,000
| Contract subject | Opposing party | Total contract amount | Total performed amount | Amount performed in the current reporting period | Amount to be performed | Amount of sales revenue recognized during the reporting period | Cumulative amount of sales revenue recognized | Collection status of accounts receivable | Is the performance normal? | Any significant change in the conditions that may affect the performance of major contracts | Any significant risk that may hamper the performance of contracts | Description of the contract not properly performed |
WinnerMedicalCo., Ltd.
| Winner Medical Co., Ltd. | Customer I | USD 9,723.20 million | USD 77,464,100 (RMB 536,959,600) | USD 5,150,200 (RMB 33,439,800) | USD 1,976.79 million | USD 5,150,200 (RMB 33,439,800) | USD 77,464,100 (RMB 536,959,600) | As of the date of the auditor’s report, the cumulative amounts recognized as revenue has been fully recovered | No | No | No | The total contract amount was adjusted from USD 117 million to USD 97,232,000 as agreed by both parties |
WinnerMedicalCo., Ltd.
| Winner Medical Co., Ltd. | Customer II | USD 11.523 million | USD 11.523 million (RMB 78.06465 million) | USD 48.8985 million (RMB 31.82511 million) | 0 | USD 48.8985 million (RMB 31.82511 million) | USD 11.523 million (RMB 78.06465 million) | As of the date of the auditor’s report, the cumulative amounts recognized as revenue | Yes | No | No | N/A |
Performance of significant procurement contracts entered into by the Company up to the current reporting period
□ Applicable √ Not applicable
(5) Composition of cost
Industry and product categories
Unit: yuan
has beenfullyrecoveredIndustry category
| Industry category | Item | 2021 | 2020 | Year-on-year increase/decrease | ||
| Amount | Proportion in cost | Amount | Proportion in cost | |||
Medicalconsumables
| Medical consumables | Direct material cost | 1,553,548,646.80 | 75.45% | 2,829,259,463.48 | 82.31% | -45.09% |
Medicalconsumables
| Medical consumables | Direct labor cost | 277,697,042.31 | 13.49% | 329,360,268.55 | 9.58% | -15.69% |
Medicalconsumables
| Medical consumables | Manufacturing costs | 227,705,543.44 | 11.06% | 278,564,161.92 | 8.10% | -18.26% |
Subtotal ofmedicalconsumables
| Subtotal of medical consumables | 2,058,951,232.55 | 100.00% | 3,437,183,893.95 | 100.00% | -40.10% |
Healthyconsumer goods
| Healthy consumer goods | Direct material cost | 1,304,267,858.71 | 67.36% | 1,120,006,275.88 | 71.07% | 16.45% |
Healthyconsumer goods
| Healthy consumer goods | Direct labor cost | 249,417,648.37 | 12.88% | 176,676,326.91 | 11.21% | 41.17% |
Healthyconsumer goods
| Healthy consumer goods | Manufacturing costs | 382,661,654.23 | 19.76% | 279,165,672.03 | 17.72% | 37.07% |
Subtotal ofhealthy livingconsumerproducts
| Subtotal of healthy living consumer products | 1,936,347,161.31 | 100.00% | 1,575,848,274.82 | 100.00% | 22.88% |
Other businesses
| Other businesses | 32,948,252.31 | 57,390,132.99 | -42.59% |
Total
| Total | 4,028,246,646.17 | 5,070,422,301.76 | -20.55% |
Unit: yuan
| Product Classification | Item | 2021 | 2020 | Year-on-year increase/decrease | ||
| Amount | Proportion in cost | Amount | Proportion in cost | |||
Medicalconsumables
| Medical consumables | Traditional wound care and wound dressing products | 477,322,916.40 | 11.84% | 499,948,197.38 | 9.86% | -4.53% |
Medicalconsumables
| Medical consumables | High-end wound dressing products | 42,693,536.92 | 1.06% | 42,459,087.13 | 0.84% | 0.55% |
Medicalconsumables
| Medical consumables | Operating room infection control products | 283,560,220.88 | 7.04% | 394,497,062.26 | 7.78% | -28.12% |
Medicalconsumables
| Medical consumables | Products on disease prevention and control | 1,089,169,415.21 | 27.04% | 2,283,582,659.33 | 45.04% | -52.30% |
Medicalconsumables
| Medical consumables | Disinfection & cleaning products | 166,205,143.14 | 4.13% | 216,696,887.85 | 4.27% | -23.30% |
Subtotal ofmedicalconsumables
| Subtotal of medical consumables | 2,058,951,232.55 | 51.11% | 3,437,183,893.95 | 67.79% | -40.10% |
Healthy
| Healthy | Cotton tissues | 495,334,534.63 | 12.30% | 444,752,822.23 | 8.78% | 11.37% |
consumer goodsHealthyconsumer goods
| Healthy consumer goods | Sanitary pads | 196,483,663.31 | 4.87% | 136,141,753.72 | 2.69% | 44.32% |
Healthyconsumer goods
| Healthy consumer goods | Wet tissues | 84,046,461.57 | 2.09% | 91,292,475.29 | 1.80% | -7.94% |
Healthyconsumer goods
| Healthy consumer goods | Other non-woven consumer goods | 272,665,609.95 | 6.77% | 302,306,309.87 | 5.96% | -9.80% |
Healthyconsumer goods
| Healthy consumer goods | Baby supplies | 189,108,390.51 | 4.69% | 136,114,444.45 | 2.68% | 38.93% |
Healthyconsumer goods
| Healthy consumer goods | Baby clothing | 233,238,566.53 | 5.79% | 165,433,346.32 | 3.26% | 40.99% |
Healthyconsumer goods
| Healthy consumer goods | Adult clothing | 285,951,444.13 | 7.10% | 182,699,935.40 | 3.60% | 56.51% |
Healthyconsumer goods
| Healthy consumer goods | Other textile consumer goods | 179,518,490.68 | 4.46% | 117,107,187.54 | 2.31% | 53.29% |
Subtotal ofhealthy livingconsumerproducts
| Subtotal of healthy living consumer products | 1,936,347,161.31 | 48.07% | 1,575,848,274.82 | 31.08% | 22.88% |
Other businesses
| Other businesses | 32,948,252.31 | 0.82% | 57,390,132.99 | 1.13% | -42.59% |
Total
| Total | 4,028,246,646.17 | 100.00% | 5,070,422,301.76 | 100.00% | -20.55% |
DescriptionNA
(6) Whether the consolidation scope changes in the reporting period
□Yes √No
(7) Major changes or adjustments of business, products or services of the Company during the reportingperiod
□ Applicable √ Not applicable
(8) Major sales customers and major suppliers
Major sales customers of the Company
| Total sales amount of top five customers (yuan) | 1,110,738,094.43 |
Proportion of total sales amount of top five customers intotal annual sales
| Proportion of total sales amount of top five customers in total annual sales | 13.82% |
Among the sales amount of top five customers, proportionof sales amount of related parties in total annual sales
| Among the sales amount of top five customers, proportion of sales amount of related parties in total annual sales | 0.00% |
Top 5 customers of the Company
| S/N | Customer name | Sales Amount (yuan) | Proportion in total annual sales |
| 1 | Customer I | 395,936,070.52 | 4.93% |
| 2 | Customer II | 319,768,662.47 | 3.98% |
| 3 | Customer III | 169,690,891.73 | 2.11% |
| 4 | Customer III | 116,483,472.94 | 1.45% |
| 5 | Customer IV | 108,858,996.77 | 1.35% |
Total
| Total | -- | 1,110,738,094.43 | 13.82% |
Other information of major customers
□ Applicable √ Not applicable
Major suppliers of the Company
| Total purchase amount of top five suppliers (yuan) | 728,746,335.06 |
| Proportion of total purchase amount of top five suppliers in total annual purchase amount | 19.98% |
Among the purchase amount of top five suppliers,proportion of purchase amount of related parties in totalannual purchase amount
| Among the purchase amount of top five suppliers, proportion of purchase amount of related parties in total annual purchase amount | 0.00% |
Top 5 suppliers of the Company
| S/N | Supplier name | Purchase amount (yuan) | Proportion in total annual purchase amount |
| 1 | Supplier I | 303,747,608.04 | 8.33% |
| 2 | Supplier II | 138,615,984.11 | 3.80% |
| 3 | Supplier III | 118,307,181.05 | 3.24% |
| 4 | Supplier IV | 85,380,749.67 | 2.34% |
| 5 | Supplier V | 82,694,812.19 | 2.27% |
Total
| Total | -- | 728,746,335.06 | 19.98% |
Other information of major suppliers
□ Applicable √ Not applicable
3. Cost
Unit: yuan
| 2021 | 2020 | Year-on-year increase/decrease | Description of significant changes |
Selling and marketing
| Selling and marketing | 1,989,167,789.56 | 1,575,163,912.49 | 26.28% | Resulting mainly from the increase in brand promotion and marketing expenses |
General andadministrative
| General and administrative | 454,389,948.90 | 436,965,446.22 | 3.99% | No major changes |
Financial expenses
| Financial expenses | (107,499,361.11) | 218,640,968.32 | -149.17% | Resulting mainly from the increase in interest income and decrease in foreign exchange loss |
Research anddevelopment
| Research and development | 298,162,366.16 | 411,383,173.80 | -27.52% | Resulting mainly from the decrease in phased investment in research and development |
The Company is required to comply with the disclosure requirements of “Textile and Apparel Business” in the “Shenzhen StockExchange Self-Regulatory Guidelines for Listed Companies No. 3 -- Industry Information Disclosure”
| Selling and marketing | 2021 | 2020 | Year-on-year increase/decrease | Description of significant changes |
Employee compensation
| Employee compensation | 535,320,245.23 | 397,499,114.63 | 34.7% | Resulting mainly from the increase in the number of sales staff and store clerks |
Travel expenses
| Travel expenses | 14,589,718.50 | 8,983,106.15 | 62.4% | This is mainly due to the travel restrictions against the pandemic in the same period last year |
Office communicationcosts
| Office communication costs | 12,577,824.48 | 15,438,257.66 | -18.5% | No major changes |
Sales commission
| Sales commission | 222,716,753.83 | 285,232,187.12 | -21.9% | No major changes |
Insurance premiums
| Insurance premiums | 5,302,498.97 | 7,140,391.33 | -25.7% | No major changes |
Depreciation andamortization
| Depreciation and amortization | 52,193,907.26 | 92,468,599.20 | -43.6% | Mainly due to the increase in losses resulting from the closure and renovation of healthy consumer goods stores during the pandemic in the same period last year |
Advertising andpromotion expenses
| Advertising and promotion expenses | 692,445,882.66 | 372,944,041.90 | 85.7% | Resulting mainly from the Company's increased investment in brand communication and increased |
marketing and promotional activitiesLease and propertymanagement fees
| Lease and property management fees | 152,728,211.40 | 294,980,913.63 | -48.2% | Resulting mainly from the impact of the implementation of the new leasing standards starting in 2021 |
Material consumption
| Material consumption | 5,212,855.45 | 11,464,378.72 | -54.5% | Resulting mainly from the decrease in consumption of auxiliary materials |
Water/electricity fee
| Water/electricity fee | 11,632,395.90 | 9,181,005.97 | 26.7% | No major changes |
Service fees
| Service fees | 6,522,845.03 | 9,840,472.61 | -33.7% | Resulting mainly from the decrease in consulting fees |
Others
| Others | 86,048,976.09 | 69,991,443.57 | 22.9% | No major changes |
Depreciation ofRight-of-use assets
| Depreciation of Right-of-use assets | 191,875,674.76 | 100.0% | Resulting mainly from the impact of the implementation of the new leasing standards starting in 2021 |
Total
| Total | 1,989,167,789.56 | 1,575,163,912.49 | 26.3% |
4. Other information required by the disclosure guidelines
The Company is required to comply with the disclosure requirements of “Textile and Apparel Business” in the “Shenzhen StockExchange Self-Regulatory Guidelines for Listed Companies No. 3 -- Industry Information Disclosure”
(1) Production capacity
The Company’s own production capacity
| Current reporting period | Same period last year |
More than 10% YoY change in production capacity utilization rate
√ Yes □ No
| Business category | Product Category | Unit | 2021 | 2020 | Percentage of change in production capacity utilization rate | Change reason description | ||||
| Production capacity | Output | Production capability utilization rate | Production capacity | Output | Production capability utilization rate | |||||
Medicalconsuma
bles
| Medical consumables | Gauze | ton | 9,486.75 | 6,690.26 | 70.52% | 9693.52 | 6226.67 | 64.24% | 6.28% | No major changes |
| Cotton | ton | 2,745.60 | 2,197.40 | 80.03% | 1,895.40 | 1,243.40 | 65.60% | 14.43% | Resulting mainly from the insufficient capacity utilization in 2020 production due to the impact of the epidemic | |
| Mask | ’0,000 pieces | 467,322.00 | 366,435.00 | 78.41% | 298,925.00 | 294,683.00 | 98.58% | -20.17% | It is mainly due to the impact of the pandemic. The demand of masks exceeded the supply in 2020, enabling machines to work almost at full capacity, so the Company increased the capacity inputs, which was greatly increased in 2021. However, the increase in production capacity exceeded the increase in outputs, so the capacity utilization rate decreased. | |
| Protective clothing | ’0,000 suits | 1,386.00 | 1,367.08 | 98.63% | 936.00 | 932.36 | 99.61% | -0.98% | No major changes | |
| Surgical gowns | ’0,000 suits | 1,850.00 | 1,764.00 | 95.35% | 2,250.00 | 2,042.14 | 90.76% | 4.59% | No major changes | |
| Medical combo | ’0,000 kits | 4,452.00 | 3,802.00 | 85.4% | 3,576.00 | 2,940.51 | 82.23% | 3.17% | No major changes |
kits
Purecottonspunlacenon-woven fabric
| Pure cotton spunlace non-woven fabric | ton | 48,018.43 | 25,602.88 | 53.32% | 48,179.71 | 35,710.09 | 74.12% | -20.80% | Production is used for medical protective fabrics with more complex production processes, resulting in a decrease in the production of spunlace non-woven fabrics |
Healthyconsumer goods
| Healthy consumer goods | Cotton tissues | ’0,000 kits | 32,067.08 | 15,682.89 | 48.91% | 28,407.10 | 16,522.28 | 58.16% | -9.25% | No major changes |
| Sanitary pads | ’0,000 pieces | 50,079.74 | 40,403.97 | 80.68% | 50,079.74 | 37,435.52 | 74.75% | 5.93% | No major changes |
Note: The capacity and production in this table are based on the statistics of self-produced capacity and output, while the output inthe Sales-output Ratio Table includes self-produced and purchased outputs, where the output of menstrual pads under “healthy livingconsumer product” is lower than that in the Sales-output Ratio Table, which is mainly due to the outsourced processing of somemodels of menstrual pads. Additionally, the output of 100% cotton spunlace nonwoven fabrics is the total output, including the outputfor direct external sales and that for self-consumption.
Is there overseas production capacity?
□Yes √No
(2) Sales model and channels
Sales channels and actual operation of productsThe Company’s healthy consumer goods are involved in textile and apparel industries. The sales channels for healthy consumergoods include e-commerce, direct chains and supermarkets, key accounts and franchisees;
Unit: yuan
| Sales channels | Revenue | Costs | Gross profit margin | Year-on-year increase/decrease of revenue | Increase or decrease in costs over the same period of the previous year | Year-on-year increase/decrease of gross profit margin |
Online sales
| Online sales | 2,541,320,964.05 | 1,326,719,792.72 | 47.79% | 203,170,441.67 | 169,383,932.42 | -2.71% |
Offline stores
| Offline stores | 1,234,967,801.51 | 501,269,557.82 | 59.41% | 280,121,963.89 | 163,284,470.82 | -5.19% |
Supermarketchannels
| Supermarket channels | 203,037,328.70 | 70,247,713.30 | 65.40% | 68,734,377.52 | 24,933,690.25 | -0.86% |
Key Client
| Key Client | 74,888,637.95 | 38,110,097.47 | 49.11% | (14,873,788.99) | 2,896,793.00 | -11.66%Note 1 |
Total
| Total | 4,054,214,732.21 | 1,936,347,161.31 | 52.24% | 537,152,994.15 | 360,498,886.49 | -2.96% |
Note 1: The decrease in gross margin of Key Clients in this period is mainly due to the better sales of masks and higher gross marginof Key Clients in 2020.
(3) Franchising and distribution
The proportion of franchisees and distributors’ sales revenues exceeds 30%
□Yes √No
Top 5 franchisees
| S/N | Name of franchisee | Time of cooperation | A related party or not | Total sales (RMB) | Level of franchisee |
| 1 | Franchisee I | December 24, 2020 | No | 3,819,043.86 | Grade 1 |
| 2 | Franchisee II | November 06, 2021 | No | 2,896,960.25 | Grade 1 |
| 3 | Franchisee III | June 12, 2020 | No | 1,915,983.65 | Grade 1 |
| 4 | Franchisee IV | November 09, 2020 | No | 1,535,429.90 | Grade 1 |
| 5 | Franchisee V | May 01, 2020 | No | 1,428,998.51 | Grade 1 |
Total
| Total | -- | -- | -- | 11,596,416.17 | -- |
Top 5 distributors
| S/N | Name of franchisee | Time of cooperation | A related party or not | Total sales (RMB) |
(4) Online sales
The proportion of online sales in sales revenues exceeds more than 30%
√ Yes □ No
Is there a self-built sales platform?
√ Yes □ No
| Operation starting time | January 06, 2014 |
Number of registered users
| Number of registered users | 16,837,981 |
Average number of monthly active users
| Average number of monthly active users | 2,050,000 |
Does it work with a third-party sales platform?
√ Yes □ No
Unit: yuan
| Name of platform | Transaction amount during the reporting period | Payment to the platform | Return rate |
Taobao (healthy consumergoods)
| Taobao (healthy consumer goods) | 1,395,107,170.83 | 279,073,097.50 | 1.46% |
Jingdong (healthy consumergoods)
| Jingdong (healthy consumer goods) | 430,128,099.50 | 79,394,617.85 | 0.98% |
Amazon (medical consumables)
| Amazon (medical consumables) | 142,498,796.19 | 9,586,231.42 | 1.00% |
Vipshop (healthy livingconsumer products)
| Vipshop (healthy living consumer products) | 77,387,477.21 | 3,104,208.08 | 1.59% |
Opening or closing online sales channels by the Company
□ Applicable √ Not applicable
Description of the impact on the current and future development of the CompanyN/A
(5) Agency operation
Does it adopt agency operation?
□Yes √No
(6) Inventory
Inventory
| Main products | Inventory turnover in days | Inventory balance | YoY increase/decrease in inventory balance | Reasons |
Medical consumables
| Medical consumables | 95 | 516,527,431.47 | (9,577,203.09) | No major changes |
Healthy consumer goods
| Healthy consumer goods | 185 | 1,080,849,612.52 | 390,467,306.87 | Resulting mainly from the increase in strategic stockpiling against the backdrop of significant price increases in raw and auxiliary materials |
Overall
| Overall | 138 | 1,597,377,043.99 | 380,890,103.78 |
Provision accrual for inventory depreciation
| Product Category | Provision for inventory depreciation | Proportion of provisi | Net value of inventories | Original value of inventories | Inventory age | |||
| Within 1 year | 1-2 years | 2-3 years | 3 years and above | |||||
on fordepreciationMedicalconsumables
| Medical consumables | 22,285,003.95 | 4.14% | 516,527,431.47 | 538,812,435.42 | 527,337,558.66 | 9,222,059.68 | 1,740,499.03 | 512,318.05 |
Healthyconsumergoods
| Healthy consumer goods | 88,126,868.60 | 7.54% | 1,080,849,612.52 | 1,168,976,481.12 | 1,071,838,064.19 | 73,854,536.68 | 14,502,610.47 | 8,781,269.78 |
Total
| Total | 110,411,872.55 | 6.47% | 1,597,377,043.99 | 1,707,788,916.54 | 1,599,175,622.85 | 83,076,596.36 | 16,243,109.50 | 9,293,587.83 |
In the Company's inventory, the original value of inventory of medical consumables and healthy consumer goods sections accountedfor 31.55% and 68.45% respectively. For healthy consumer goods, in 2020, Purcotton confirmed that non-woven products with theneed for package upgrading and some previous finished woven products with greater inventory ages were almost sold at a reduceddiscount or through sales such as internal employee purchase within the reporting period, which eliminated the correspondinginventory risk, and the original provision for inventory decline correspondingly reversed. Since 2021, with the significant priceincrease in the front-end raw materials cotton and cotton yarn, Purcotton conducted strategic reserve of raw and auxiliary materialsand some products, showing large inventory balance but few risks of impairment, so the proportion of the provision for inventorydecline at the end of the reporting period has decreased compared to the same period last year.Inventory information of end channels such as franchises or distributorsThe Company's healthy consumer goods under the Purcotton franchisees in 2021 opened 18 new stores, a total of 23 stores. Itsbusiness model requires franchisees to be responsible for the construction and daily operation of stores while Purcotton providinggoods and supply chain supports. After the sales of goods, Purcotton and franchisees realize their respective benefits through sharing.The ownership of the franchisee’s inventory belongs to Purcotton. as of December 31, 2021, the inventory balance of ten franchiseeswere 14.52 million yuan, or 0.63 million yuan per store.
(7) Brand building
Whether the company is involved in the production and sales of branded clothing, apparel and home textile products
√ Yes □ No
Private brand
| Brand name | Trademark name | Main product types | Features | Target customers | Main product price bands | Main market territory | Level of cities |
Purcotton
| Purcotton | Purcotton | Cotton tissues | Made of 100% high-quality natural cotton without fluorescent whitening agent; mild and non-irritating; meeting the daily needs of consumers | All-age customer base | 5-30 yuan /pack (100 pieces) | Nationwide | Second- and third-tier cities and above |
Purcotton
| Purcotton | Nice Princess | Sanitary pads | 100% cotton surface layer (surface layer, spacer, sanitary wing surface layer) | Female population at appropriate ages | 1.99-3.99 yuan /piece | Nationwide | Second- and third-tier cities and above |
Purcotton
| Purcotton | BBNice | Cotton diapers | 100% cotton surface layer; unique in the market; made from natural cotton; 2mm ultra-thin core with 28 times ultra-high absorption capacity | Parental population | 3.32-4.14 yuan /piece | Nationwide | Second- and third-tier cities and above |
Purcotton
| Purcotton | Purcotton | Wet tissues | 100% cotton material; soft and non-slippery; gentle and non-irritating | All-age customer base | 20-40 yuan /pack | Nationwide | Second- and third-tier cities and above |
Purcotton
| Purcotton | Purcotton | Baby supplies/clothing | 100% cotton material without fluorescent nor formaldehyde; the unique gauze fabric to provide more comfortable care | Newborns, babies, toddlers | 100-400 yuan /piece | Nationwide | Second- and third-tier cities and above |
Purcotton
| Purcotton | Purcotton | Adult clothing / intimate | 100% cotton material; high-quality cotton without fluorescent nor formaldehyde; | Adults at appropriate ages | Outwear: 200-600 yuan /piece; home | Nationwide | Second- and third-tier cities and above |
| apparel | soft to the touch; the unique gauze fabrics to provide more comfortable care | wear: 200-500 yuan /piece; thermal underwear: 100-500 yuan /piece; underwear: 48-68 yuan/piece; socks: 20-80 yuan /pair |
Purcotton
| Purcotton | Purcotton | Bedding, toiletries | 100% cotton material; high-quality cotton without fluorescent nor formaldehyde; soft to the touch; the unique gauze fabrics to provide more comfortable care | All-age customer base | Baby bedding: RMB 200-500 /set; toddler bedding: RMB 300-800 /set; adult bedding: RMB 500-2000 /set; bathroom supplies: RMB 50-200 /piece | Nationwide | Second- and third-tier cities and above |
Partner brands
| Brand name | Trademark name | Main product types | Features | Target customers | Main product price bands | Main market territory | Level of cities | Brand and trademark rights ownership | Partner name | Cooperation mode | Cooperation period |
Licensed brand
| Brand name | Trademark name | Main product types | Features | Target customers | Main product price bands | Main market territory | Level of cities | Licensor | License period | Exclusive license or not |
Purcotton,Sanrio
| Purcotton, Sanrio | Purcotton, Sanrio characters | Cotton tissue, baby clothing, underwear and loungewear | The product is made from 100% cotton material and designed with HELLO KITTY cartoon image | All-age customer base | 5-300 yuan /piece | Nationwide | Second- and third-tier cities and above | KT Licensing (Shanghai) Co., Ltd. | 2020.1.1-2021.12.31 | No |
Purcotton,Ultraman
| Purcotton, Ultraman | Purcotton, Ultraman characters | Cotton tissues, wet tissues and bath towels | The product is made from 100% cotton material and designed with Ultraman cartoon image | Children and teenagers | 21.8-298 yuan /piece | Nationwide | Second- and third-tier cities and above | Shanghai Character License Administrative Co., Ltd. | 2021.9.1-2022.10.31 | No |
Marketing and operation of each brand during the reporting periodWith pure cotton products as its label, Purcotton ad opts unique, differentiated strategies to build its brand. By integrating multiplepromotion channels such as directly-sales stores, brand roadshows, celebrity endorsements, event sponsorship, new media, andadvertising, Purcotton keeps conveying to consumers its brand concepts of “happiness, reassurance and sustainability” and vision of“Purcotton Changes the World”, expanding the brand marketing to the cotton lifestyle of consumer culture output, which helpsdeepen the meaning of the brand and increase its brand awareness and loyalty. On the occasion of the Earth Day on April 22,Purcotton held a “Cotton · Nature ··Excellent” conference in Beijing, and worked with the authoritative color agency COLORO? tolaunch the “cotton” theme series color numbers for the first time, explaining the true color of cotton and fashion charm through thefanastic encounter of nature and art. On the 12th China International Cotton Conference held in Suzhou in June, Purcotton, as thefirst batch of participating companies on the consumer side, made a wonderful appearance and talked about the sustainabledevelopment of cotton, aiming to create a quality image of “Chinese cotton”. As a designated partner brand, Purcotton appeared inthe “Kids Fashion Week 2021” of China Oil Painting Institute in Beijing, combining fashion trends with happiness and care andcreating a secure and comfortable environment for children to grow up with its quality products, so as to lead the new trend of kids’fashion. During the “Cotton Pickup Festival” in September, Purcotton worked with the “Fashion Technology Show” on CCTVTechnology Channel as well as xinhuanet to visit Purcotton’s plants, showing the medical-grade production environment,
environmentally sustainable raw materials and production processes, leading the public into the world of cotton to discover thewonders of cotton, enhancing the public’s attention to the brand of Purcotton, understanding the core technology of the brand, andattaching more public attention to the Purcotton brand. In October, the continuation of the “Cotton · Nature ··Excellent” theme,Purcotton with the 2022 Spring-Summer series in Shanghai Fashion Week opened an immersive space-time travel with natural andpure cotton, showing in-depth interpretation of the environmental value and sustainable charm, so as to convey the beauty of thebrand sustainable fashion.In addition, Purcotton actively carries out brand marketing activities through living stream, and invites KOLs in maternal & infantand travel segments to the living events to promote attractive cotton products. Thanks to the long-term activities of “normalized storelivestream shopping” and “normalized plant livestream shopping”, Purcotton can display its unique advantages of stores and plantindustrial chain, and direct online and offline traffic to each other.
Cases involved in trademark ownership disputes
□ Applicable √ Not applicable
(8) Others
Whether the Company is engaged in apparel design-related business
√ Yes □ No
| The number of fashion designers in the Company | 30 | The number of contracted fashion designers | 1 |
The operation of the builtdesigner platform
| The operation of the built designer platform | The building of PLM system and 3D design platform was completed in H2 2021 and would be put into use in spring and summer of 2022. |
Did the company hold an order meeting?
□Yes √No
5. R&D expenses
√Applicable □ Not applicable
| Name of main R&D projects | Project purpose | Project progress | Objectives to be achieved | Expected impacts on the future development of the Company |
Research andapplication of purecotton fabrics
| Research and application of pure cotton fabrics | Reduce the risk of linting and pilling and make the surface smooth | R&D | Make the hand feel and appearance more delicate; enable soft and elegant luster; mainly used for high-end trench coats, jackets and other spring and autumn outerwear | Adopt new technology to develop high-end cotton outing products, enhance product performance and improve the competitive advantage of our products in the market |
Design of fleecefabrics and study ofthe warmthretention properties
| Design of fleece fabrics and study of the warmth retention properties | Deal with the less comfort, easy to static electricity and other problems to improve the fleece fabric with traditional chemical fiber as the main component | R&D | Develop and design a fleece product with high level of warmth, no lint loss and high dimensional stability | Replace chemical fibers with pure cotton, improving the quality of lint products, and lead the development of technology upgrades in the cotton products industry |
Applicationresearch in the fieldof nonwovens
| Application research in the field of nonwovens | Develop natural color cotton non-woven sanitary products to enrich the product category | R&D | Develop cotton natural color non-woven sanitary products, such as cotton tissues, cosmetic cotton, and cotton wet tissues; add a healthier color to pure cotton non-woven sanitary products, fill the gap of zero use of natural dyes, and add anti-oxidation and anti-aging function | Expand the category of non-woven products and promote the market share with new product development |
Anti-mosquitogauze productdevelopment
| Anti-mosquito gauze product development | Adopt physical mosquito control methods instead of chemical mosquito control methods, for safer and healthier | R&D | Achieve the function of light and breathable physical anti-mosquito; get rid of the traditional anti-mosquito process that relying on the limitations of adding anti-mosquito additives, for | Reform the traditional design and development concepts, and carry forward the Company's comfortable, healthy, and environmentally |
| purposes | safer and more healthy purposes | friendly concepts |
Applicationresearch ofzero-emissionenergy-savingprocess ofatomized waterwashing on gauze
| Application research of zero-emission energy-saving process of atomized water washing on gauze | The first new washing process could achieve the purpose of zero emission of washed gauze products, actively respond to the national requirements for environmental protection, and realize energy saving and emission reduction | Trial production | Innovative gauze atomization washing process could achieve the purpose of zero emission of water washing products, optimize the existing washing process, save a lot of water resources and reduce the discharge of sewage. Moreover, it brings consumers more cost-effective, safer products, widely used in gauze bath towels and other bathroom products | Improve the Company's core technology level and promote the development of the Company's core products towards green and resource-saving designs |
Development offunctional cottonfabrics withanti-bacteria heatgeneration
| Development of functional cotton fabrics with anti-bacteria heat generation | Add heat and warmth functions to autumn and winter products | Mass production | Enable products to heat and keep warm, and improve the added value of cotton products | Enhance the added value of products, increasing the variety of autumn and winter products, and improve the competitiveness of autumn and winter product categories |
Research andproductdevelopment ofwoven fabrics
| Research and product development of woven fabrics | Shorten the tedious production process of conventional thermal fabrics | Launched | Increase the added value of products | Upgrade the existing products, enhance product performance and consolidate the competitiveness of the Company's household supplies in the market |
Research on naturalcool feeling,“breathing” cottonmaterial and itsapplication
| Research on natural cool feeling, “breathing” cotton material and its application | Develop cotton products with a natural cooling function to relieve the feeling of stuffiness in summer | Launched | The Company combined cotton yarn with cooling microcapsules to develop cooling cotton fabrics, producing an instant cool feeling when in contact with the human body, and greatly improving the comfort of summer clothing and apparel. Widely used in summer cotton T-shirts, summer sleeping mat, etc., with high market values | Promote the development of the Company's products towards functionalization and diversification, enrich the product line and enhance the competitiveness of the Company's products |
Development andapplication of PCantibacterial patientgown & scrub suits
| Development and application of PC antibacterial patient gown & scrub suits | Develop more comfortable and environmentally-friendly patient gowns and scrub suits | R&D | Expand the application of PC material to improve the breathability and comfort of patient gowns and scrub suits | Increase the application scenarios of the Company's base material of pure cotton spunlace non-woven fabrics, providing a new business growth point |
Independent R&Dand application ofhigh-efficiency,low-resistance N95masks (cup shaped)
| Independent R&D and application of high-efficiency, low-resistance N95 masks (cup shaped) | Develop more comfortable N95 masks (cup shaped) | R&D | Improve the comfort of wearing while ensuring the protection effect | Improve the design of N95 masks and enhance the market competitiveness of N95 mask products to further enhance profitability |
Research anddevelopment ofmuscle bandage
| Research and development of muscle bandage | Develop muscle bandage products for outdoor sports line of bandages | R&D | Good elasticity and comfort | Expand from traditional medical adhesive products to To C-end retail products to enrich product lines and increase sales |
Research anddevelopment ofsheet hydrogelproducts
| Research and development of sheet hydrogel products | Develop a type of hydrogel products with higher water content, which is a kind of dressings with effects such as fluid absorption and physical cooling | R&D | Sheet hydrogel materials can be used in products such as band-aids and tattoo patches, both absorbing and giving liquid properties, showing physical cooling effects | Make breakthroughs in hydrogel self-production hydrogel technology; develop differentiated band-aids to expand the acute wound care category for increasing product selling points; and develop tattoo patch products to meet the huge demand in the medical beauty market |
Research anddevelopment of
| Research and development of | Develop a gentle adhesive tape for the care | R&D | Achieve painless peeling, no adhesive residue and repeatable effects | Expand the application of self-developed silicone gel |
| medical silica gel tape | of people with sensitive skin | technology to replace the application of traditional acrylic submineral tape, enhancing the added value of products to improve profitability |
R&D andapplication ofpositive-pressureinflatableprotective clothing
| R&D and application of positive-pressure inflatable protective clothing | Develop positive-pressure inflatable protective clothing to enhance the comfort of protective clothing | R&D | Continuously provide fresh air inside the protective clothing to improve comfort while ensuring protective effects | The development of this project effectively improves the market competitiveness of protective clothing, improves the product structure of the Company, enriches the types of products, and enhances the profitability of the Company in the market of sensory control consumables |
R&D andapplication of 3Dperforated PCmaterials
| R&D and application of 3D perforated PC materials | Develop 3D perforated PC materials for the surface layer of sanitary products to enhance the sense of comfort and aesthetics | R&D | Improve the beauty and comfort of sanitary products and diversify product categories | Meet the needs of the industry and enrich the product range |
Research anddevelopment ofantimicrobialfunctional wounddressings
| Research and development of antimicrobial functional wound dressings | Develop wound dressings with antimicrobial properties for the prevention and control of wound infections | Registration | Antibacterial effect of wound dressing is over 99.9% | Enrich and expand antibacterial dressing categories, establish technical barriers and market access barriers, improve profitability and consolidate the Company's leading position in the industry |
R&D of superabsorbenthydrophilic fiberdressings
| R&D of super absorbent hydrophilic fiber dressings | Develop highly absorbent fiber material for medical wound dressings | Mass production | Highly absorbent fibers absorb more than 15 times their own weight of liquid | Develop super absorbent fibers to achieve self-production of raw materials for fiber dressings, thus making up for the lack of competitiveness of the Company's fiber-based dressings and consolidating the Company's industry position |
Research anddevelopment oftapes for protectiveclothing
| Research and development of tapes for protective clothing | Develop adhesive strips for protective clothing production | Mass production | Apply to the production of protective clothing to meet airtightness requirements | Independent development and production of protective clothing adhesive strips can guarantee a stable supply of raw materials for protective clothing and reduce production costs. |
Research anddevelopment oftubular hydrogeldressings
| Research and development of tubular hydrogel dressings | Develop hydrogel dressings with autolytic debridement function for medical wound dressings | Mass production | Its water content exceeds 90%, with good liquid delivery performance, realizing self-soluble cleansing | Develop wound cleaning gel products to enrich and expand the wound dressing product line, and generate linked sales with the Company's existing wound dressings |
Research anddevelopment oflaminatedone-piecepolyurethane foammaterials
| Research and development of laminated one-piece polyurethane foam materials | Develop foam material with fluid absorption function for medical wound dressings | Mass production | Foam can absorb more than 12 times the weight of liquid, with fine soft and comfortable foams | The differentiated designs of laminated one-piece molding technology and products on market enhance product performance and selling points, improving product competitiveness |
R&D andapplication of
| R&D and application of | Develop more comfortable BVB | Launched | Expand the application of PC materials to improve the comfort of surgical | Increase the application scenarios of the Company's |
| surgical gowns and wipes made from PC-BVB materials | surgical gowns to increase the application scenarios of PC materials | gowns and cavity wipes | base material of pure cotton spunlace non-woven fabrics, providing a new business growth point |
Independent R&Dand application ofantiviral masks
| Independent R&D and application of antiviral masks | Develop masks with anti-viral function to effectively block virus transmission | Launched | Anti-bacterial and anti-viral effect excees 99% | Meet the demand for functional masks in the post-pandemic era, establish market differentiation, and improve product competitiveness and profitability |
Research anddevelopment ofskin protection filmwipe stick
| Research and development of skin protection film wipe stick | Develop a type of products with water repellency and rapid film formation to prevent liquid impregnation of wounds | Launched | The product can form a film within 30s, with waterproof and breathable function, thus protecting the skin from the risk of impregnation | For chronic wound care, expand product categories, and develop linked sales with the Company's existing slow wound adhesive products |
Research anddevelopment ofsoft polysiliconescar repairmaterials
| Research and development of soft polysilicone scar repair materials | Develop a type of scar repair products that can effectively remove scars and inhibit scar hypertrophic | Launched | Long-term use can achieve effective scar removal and inhibit scar hypertrophic | The product can be used for medical beauty purpose, which can drive the Company's online and offline retail sales growth |
Development ofmedicalnegative-pressuredrainagemicro-pump device
| Development of medical negative-pressure drainage micro-pump device | Develop a kind of negative-pressure sucker for the negative-pressure drainage treatment of wound surface | Launched | The negative-pressure sucker also has the functions of negative-pressure suction and wound pressure monitoring, air leakage alarm, etc. | This product is the Company's first active medical device, accumulating valuable experience for the future development of active devices, and can also drive the sales growth of supporting negative-pressure drainage kits on sale |
Research anddevelopment ofvaccine patchproducts
| Research and development of vaccine patch products | Develop a kind of vaccine patch for needle eye protection after vaccination | Launched | It is a physical barrier to protect the spot from external contamination, and is comfortable and breathable | Meet the spot protection for vaccination in the post-pandemic era, expand the Company's acute wound care line and increase sales |
Development ofultra-lowtemperaturedisinfection series
| Development of ultra-low temperature disinfection series | Develop ultra-low temperature disinfection solutions for cold chain transportation under ultra-low temperature conditions | Launched | Virus killing rate under ultra-low temperature conditions exceeds 99% | Meet the demand for cold chain transportation of disinfection products in the post-pandemic era, enriching and expanding the Company's disinfection product line |
R&D of the fifthgeneration dry PCmaterial
| R&D of the fifth generation dry PC material | Develop a kind of drier PC material for the surface of sanitary products to enhance the wearing comfort | Launched | Expand the use of PC materials for the surface of sanitary products to enhance the comfort of continuous dryness in the products | The successful development of the material further consolidates the leading position of our cotton nonwoven materials in the industry, and enhances the Company's profitability in the pure cotton spunlace non-woven fabric sgement |
R&D personnel
| 2021 | 2020 | Proportion of change |
Number of R & D personnel(person)
| Number of R & D personnel (person) | 1,386 | 1,213 | 14.26% |
Proportion of R & D personnel
| Proportion of R & D personnel | 11.47% | 9.79% | 1.68% |
Qualifications of R&D personnel
Qualifications of R&D personnelBachelor
| Bachelor | 429 | 251 | 70.92% |
| Master | 59 | 33 | 78.79% |
Age composition of R&D personnel
Age composition of R&D personnelUnder 30
| Under 30 | 396 | 273 | 45.05% |
30 ~ 40
| 30 ~ 40 | 649 | 621 | 4.51% |
The amount of R&D investment and the proportion of operating revenues in the past three years
| 2021 | 2020 | 2019 |
R & D investment amount(yuan)
| R & D investment amount (yuan) | 298,162,366.16 | 411,383,173.80 | 155,193,227.21 |
Proportion of R & Dinvestment in operating revenue
| Proportion of R & D investment in operating revenue | 3.71% | 3.28% | 3.39% |
Capitalized amount of R&Dexpenditure (RMB)
| Capitalized amount of R&D expenditure (RMB) | 0.00 | 0.00 | 0.00 |
Proportion of capitalized R&Dexpenditure in R&D investment
| Proportion of capitalized R&D expenditure in R&D investment | 0.00% | 0.00% | 0.00% |
Proportion of capitalized R&Dexpenditure in current net pro?t
| Proportion of capitalized R&D expenditure in current net pro?t | 0.00% | 0.00% | 0.00% |
Reasons for and effects of significant changes in the composition of the Company's R&D personnel
□ Applicable √ Not applicable
Reasons for significant changes in the proportion of total R & D investment amount in operating revenue compared with the previousyear
□ Applicable √ Not applicable
Reasons for the great changes of R & D investment capitalization rate and description of its rationality
□ Applicable √ Not applicable
The Company is required to comply with the disclosure requirements of “Medical Device Business” in the “Shenzhen StockExchange Self-Regulatory Guidelines for Listed Companies No. 4 -- Industry Information Disclosure for ChiNext Stock Market”Information on medical device products
√Applicable □ Not applicable
(I) Statistics on the number of registration certificates for medical devices
Statistics on the number of domestic product registration certificateRegistrationCategories
| Registration Categories | Opening balance | Number of additions | Number of failures | Closing balance |
Category I
| Category I | 42 | 11 | 8 | 45 |
Category II
| Category II | 59 | 7 | 0 | 66 |
Category III
| Category III | 1 | 0 | 0 | 1 |
Total
| Total | 102 | 18 | 8 | 112 |
(II) Medical devices in the registration application process
1. Domestic
| S/N | Name of certificates | Applicant | Registration categories | For clinical purpose | Registration stages | Progress | Whether to declare innovative medical devices in accordance with the provisions of the national regulatory authorities for |
drugs
| 1 | Wound contact dressing | Winner Medical Co., Ltd. | Category II | It is a disposable product for surgical body debridement care. | Registration review in progress | In progress | No |
| 2 | Disposable cesarean kit | Winner Medical Co., Ltd. | Category II | It is a disposable product for staff in medical units to perform cesarean operation. | Correction | In progress | No |
| 3 | Disposable stitch removal kit | Winner Medical Co., Ltd. | Category II | It is a disposable product for staff in medical units to perform stitch removal. | Correction | In progress | No |
| 4 | Disposable maternity package | Winner Medical Co., Ltd. | Category II | It is a disposable product for staff in medical units to perform childbirth operation, termination of pregnancy or induced abortion | Correction | In progress | No |
| 5 | Disposable sterile-care pack | Winner Medical Co., Ltd. | Category II | It is a disposable product for staff in medical units to perform daily care. | Correction | In progress | No |
| 6 | Silicone scar gel | Winner Medical (Huanggang) Co., Ltd. | Category II | It is used as an aid in improving pathological skin scars and preventing the formation of pathological skin scars, but not for unhealed wounds. | Correction | In progress | No |
| 7 | Gauze bandage | Winner Medical (Huanggang) Co., Ltd. | Category II | It is used to provide binding force to wound surface dressings or limbs for dressing and fixation. | Correction | In progress | No |
| 8 | Disposable examination gloves (in polyethylene) | Winner Medical (Huanggang) Co., Ltd. | Category II | They are made of polyethylene through heat lamination process. | Correction | In progress | No |
| 9 | Silicone gel scar treatment strips | Winner Medical (Huanggang) Co., Ltd. | Category II | It is used as an aid in improving pathological skin scars and preventing the formation of pathological skin scars, but not for unhealed wounds. | Correction | In progress | No |
| 10 | Disposable surgical sheets | Winner Medical (Chongyang) Co., Ltd. | Category II | It is used for covering the surface of the patient's body to reduce the migration of infection sources from non-surgical parts of the patient's skin to the surgical spot, and prevent the patient's post-operative trauma from being infected, or for covering the instrument table, operating table and display in the operating room to avoid infection caused by the surgeon in surgery because of touching the patient's wound after touching the above parts. | Correction | In progress | No |
| 11 | Disposable isolation gowns | Winner Medical (Chongyang) Co., Ltd. | Category II | It is a disposable product for staff in medical units to perform general isolation. | Correction | In progress | No |
| 12 | Disposable central venous cannula puncture care pack | Winner Medical (Chongyang) Co., Ltd. | Category II |
It is used for nursing departments ofmedical institutions for the puncturecare of central venous catheters placed
through peripheral veins.
| Registration review in progress | In progress | No |
| 13 | Disposable protective clothing for medical use | Winner Medical (Chongyang) Co., Ltd. | Category II | It provides barriers for and keeps medical staff away from contacting potentially infectious patient blood, body fluids, secretions, and airborne particulate matter at work. | Correction | In progress | No |
| 14 | Wound contact | Winner | Categ | For the care of non-chronic wounds | Correctio | In | No |
| dressing | Medical (Chongyang) Co., Ltd. | ory II | (e.g. superficial wounds, post-surgical suture wounds, mechanical wounds, small wounds, abrasions, cut wounds, puncture sites of puncture instruments, first- or superficial second-degree burn wounds, infant navel wounds, post-laser/photon/acid peels/microplasty wounds), it provided a microenvironment for wound healing. It can also be used to care for the puncture spot caused by puncture devices (e.g. catheters) and to secure the puncture device. | n | progress |
| 15 | Wound contact dressing | Winner Medical (Chongyang) Co., Ltd. | Category II | For the care of non-chronic wounds (e.g. superficial wounds, post-surgical suture wounds, mechanical wounds, small wounds, abrasions, cut wounds, puncture sites of puncture instruments, first- or superficial second-degree burn wounds, infant navel wounds, post-laser/photon/acid peels/microplasty wounds), it provided a microenvironment for wound healing. It can also be used to care for the puncture spot caused by puncture devices (e.g. catheters) and to secure the puncture device. | Registration review in progress | In progress | No |
| 16 | Disposable sterile-care catheterization kit | Winner Medical (Chongyang) Co., Ltd. | Category II | It is a disposable product for staff of medical departments to perform catheterization. | Correction | In progress | No |
| 17 | Iodophor disinfectant cotton balls | Winner Medical (Jiayu) Co., Ltd. | Category II | It is used for disinfection of intact skin before injection and infusion. | Correction | In progress | No |
| 18 | Iodophor disinfectant pads | Winner Medical (Jiayu) Co., Ltd. | Category II | It is used for disinfection of intact skin before injection and infusion. | Correction | In progress | No |
| 19 | Scrub suits | Winner Medical (Jingmen) Co., Ltd. | Category I | It is for anesthesiologists, itinerant nurses and other staff in operating rooms in order to keep the operating room clean and free from contamination by indoor personnel. | Registration review in progress | In progress | No |
2. Abroad
| Region | S/N | Certificate No. | Name of certificates | Registration categories | Applicant | Product | For clinical purpose | Registration stages | Progress |
UK
| UK | 1 | 752977 | UKCA Type Examination Certificate | Category III | Winner Medical | FFP2 Protective mask WN-N95FW | Individual protection | Licensing stage | The technical document review has been completed and entered the licensing cycle |
UK
| UK | 2 | 752979 | UKCA Module D Certificate | Category III | Winner Medical | Category III PPE protective masks | Individual protection | Licensing stage | The technical document review has been completed and entered the licensing cycle |
UK
| UK | 3 | / | UKCA Type Examination Certificate | Category III | Winner Medical | WN-600DC series protective clothing | Individual protection | Technical documentatio | Technical documents have been submitted and are under review |
nreviewUK
| UK | 4 | / | UKCA Type Examination Certificate | Category III | Winner Medical | WN-600TC series protective clothing | Individual protection | Technical documentation review | Technical documents have been submitted and are under review |
UK
| UK | 5 | / | UKCA Module D Certificate | Category III | Winner Medical | Category III PPE protective clothing | Individual protection | Application in progress | The contract has been signed and scheduled for the application of on-site aduit |
(III) Certificates of medical devices in 2021
1. Domestic
| S/N | Name of certificates | Registration categories | Certificate owner | Product record number/registration number | For clinical purpose | Date of issue | Validity | Registration |
| 1 | Disposable sterile-care pack | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20182640466 | It is a disposable product for staff in medical units to perform daily care. | November 4, 2018 | April 10, 2023 | Change of registration |
| 2 | Disposable maternity package | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20182640467 | It is a disposable product for staff in medical units to perform childbirth operation, termination of pregnancy or induced abortion | November 4, 2018 | April 10, 2023 | Change of registration |
| 3 | Wound contact dressing | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20182640163 | It is a disposable product for surgical body debridement care. | January 31, 2018 | January 30, 2023 | Change of registration |
| 4 | Disposable sterile-care surgical packs | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20182640465 | It is a disposable product for staff all medical units to perform surgeries. | November 4, 2018 | April 10, 2023 | Change of registration |
| 5 | Disposable stitch removal kit | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20182640456 | It is a disposable product for staff in medical units to perform stitch removal. | April 9, 2018 | April 8, 2023 | Change of registration |
| 6 | Disposable gastric tube kit | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20182640459 | It is a disposable product for staff in medical units to perform gastrointestinal decompression, liquid or fluid nutrition input, and drainage (suction). | April 9, 2018 | April 8, 2023 | Change of registration |
| 7 | Disposable surgical films | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20182640164 | It is used for clinical surgical incisions to protect the skin from cross infection. | January 31, 2018 | January 30, 2023 | Change of registration |
| 8 | Disposable cesarean kit | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20182640195 | It is a disposable product for staff in medical units to perform cesarean operation. | February 02, 2018 | February 01, 2023 | Change of registration |
| 9 | Disposable surgical sheets | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20192140245 | It is a disposable product for staff in medical units to perform surgeries. | March 27, 2019 | March 26, 2024 | Change of registration |
| 10 | Disposable intervention | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. | It is a disposable product for staff in medical units | January 30, 2019 | January 29, 2024 | Change of registration |
| kit | 20192140054 | to perform clinical interventional procedures. |
| 11 | Disposable nonwoven surgical supplies | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20192140727 | It is a disposable product for staff in medical units to perform surgeries. | June 26, 2019 | June 25, 2024 | Change of registration |
| 12 | Disposable isolation gowns | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20192140590 | It is a disposable product for staff in medical units to perform general isolation. | May 20, 2019 | May 19, 2024 | Change of registration |
| 13 | Disposable surgical gowns | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20142140128 | It is a disposable product for staff in medical units to perform surgeries. | August 14, 2019 | August 13, 2024 | Change of registration |
| 14 | Surgical masks | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20152140745 | It is for clinical staff to wear during invasive operations, providing protection for patients receiving treatment and medical staff performing invasive operations, thus blocking the spread of blood, body fluids and splashes. | April 21, 2020 | April 20, 2025 | Change of registration |
| 15 | Surgical gauze dressing | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20152140780 | It is a disposable product for staff in medical units to perform surgery and wound care. | February 25, 2020 | February 24, 2025 | Change of registration |
| 16 | Medical degreasing cotton | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20152140778 | It is a disposable product for staff in medical units and family members to perform wound debridement care, dip disinfectant, etc. | April 1, 2020 | March 31, 2025 | Change of registration |
| 17 | Medical brain cotton tablets | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20152140779 | It is a disposable product for staff in medical units to perform brain surgeries. | April 21, 2020 | April 20, 2025 | Change of registration |
| 18 | Silicone gel dressing | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20152141501 | It is used for the dressing of exuding wounds on the body surface. | November 10, 2020 | November 9, 2025 | Change of registration |
| 19 | Disposable sterile-care surgical films | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20162140212 | It is used for simplifying preoperative skin care operations, and preventing contact and migratory surgical wound infections. | January 29, 2021 | January 28, 2026 | Change of registration |
| 20 | Alginate dressings | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20162140291 | It is used for clean and debridement treated wounds to facilitate the healing of the wound (only for superficial wounds in the superficial dermis and above). | December 10, 2019 | December 9, 2024 | Change of registration |
| 21 | Disposable treatment wipes | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20162141488 | It is used as a mat for staff in medical units to clear sores, change dressings and perform examination. | September 09, 2021 | September 08, 2026 | Change of registration |
| 22 | Disposable protective clothing for medical use | Category II | Winner Medical Co., Ltd. | Yue Xie Zhu Zhun No. 20212140706 | It provides barriers for and keeps medical staff away from contacting potentially infectious | May 20, 2021 | May 19, 2026 | Change of registration |
patient blood, bodyfluids, secretions, andairborne particulatematter at work.
| 23 | Hygiene caps | Category I | Winner Medical Co., Ltd. | Yue Shen Xie Bei No. 20150183 | It is used to prevent cross-contamination between physicians and patients. | July 20, 2015 | / | Change of filing |
| 24 | Plaster bandage (adhesive type) | Category I | Winner Medical Co., Ltd. | Yue Shen Xie Bei No. 20150201 | It is used for fracture fixation. | August 5, 2015 | / | Change of filing |
| 25 | Disposable medical examination kit | Category I | Winner Medical Co., Ltd. | Yue Shen Xie Bei No. 20160440 | It is used for daily inspections in medical units. | December 6, 2016 | / | Change of filing |
| 26 | Breathable tapes | Category I | Winner Medical Co., Ltd. | Yue Shen Xie Bei No. 20190268 | It is used to provide adhesion to wound surface dressings, bandages, etc. for fixation. | April 22, 2019 | / | Change of filing |
| 27 | Elastic bandage | Category I | Winner Medical Co., Ltd. | Yue Shen Xie Bei No. 20190565 | It is used to provide binding force to wound surface dressings or limbs for dressing and fixation. | August 21, 2019 | / | Change of filing |
| 28 | Disposable surgical caps | Category II | Winner Medical (Huanggang) Co., Ltd. | E Xie Zhu Zhun No. 20162142405 | It is a disposable product for staff in medical units to perform surgeries. | March 25, 2021 | March 24, 2026 | Continuous registration |
| 29 | 100% cotton nonwoven surgical dressing | Category II | Winner Medical (Huanggang) Co., Ltd. | E Xie Zhu Zhun No. 20162142404 | It is for cleaning, wound protection, moisture absorption and protection of organs in the process of clinical treatment. | March 17, 2021 | March 16, 2026 | Continuous registration |
| 30 | Surgical mask | Category II | Winner Medical (Huanggang) Co., Ltd. | E Xie Zhu Zhun No. 20162142419 | It is used for filtering airborne particles, and blocking droplets, blood, body fluids and secretions in medical work environment. | July 15, 2021 | July 14, 2026 | Continuous registration |
| 31 | Gauze strips | Category II | Winner Medical (Huanggang) Co., Ltd. | E Xie Zhu Zhun No. 20212143323 | It is used to absorb internal exudate during lumpectomy, and to support organs and tissues during surgery. | June 30, 2021 | June 29, 2026 | First-time registration |
| 32 | Hydrocolloid dressings | Category II | Winner Medical (Huanggang) Co., Ltd. | E Xie Zhu Zhun No. 20212143433 | The product absorbs traumatic exudate through water-soluble polymer particles. It is used for the coverage and care of non-chronic wounds. | September 14, 2021 | September 13, 2026 | First-time registration |
| 33 | Medical negative-pressure sucker | Category II | Winner Medical (Huanggang) Co., Ltd. | E Xie Zhu Zhun No. 20212143441 | It is used in medical locations to absorb exudate from body surface wounds and cuts during and after surgery. It cannot be used for negative-pressure absorption for induced abortion, human respiratory secretions, stomatology, ophthalmology or | September 26, 2021 | September 25, 2026 | First-time registration |
endoscopic surgery.
| 34 | Negative pressure drainage device | Category I | Winner Medical (Huanggang) Co., Ltd. | E Huanggang Xie Bei No. 20200044 | In case of clinical drainage, it is connected with a drainage catheter inserted into the body to act as a negative pressure transmission medium and/or guide and collect drainage fluid. | July 16, 2020 | / | Change of filing |
| 35 | Medical care mats | Category I | Winner Medical (Huanggang) Co., Ltd. | E Huanggang Xie Bei No. 20210043 | It is a kind of hygiene care product for hospital beds or examination beds. | August 16, 2021 | / | First-time filing |
| 36 | Adhesive plaster bandage | Category I | Winner Medical (Huanggang) Co., Ltd. | E Huanggang Xie Bei No. 20210057 | It is mainly used for external fixation of injuries such as fractures or soft tissues. | September 22, 2021 | / | Change of filing |
| 37 | Medical examination gloves | Category I | Winner Medical (Huanggang) Co., Ltd. | E Huanggang Xie Bei No. 20210046 | The product is worn on the physician's hands for patient examination or palpation. | September 6, 2021 | / | First-time filing |
| 38 | Medical care masks | Category II | Winner Medical (Huanggang) Co., Ltd. | E Xie Zhu Zhun No. 20142142015 | It is applicable for the wearer’s health care in the general medical environment where there is no risk of body fluids and splashing, as well as general health care in public health places (this kind of mask cannot be used as a surgical or protective mask). | August 30, 2019 | August 29, 2024 | Change of registration |
| 39 | Medical gauze pads | Category II | Winner Medical (Chongyang) Co., Ltd. | E Xie Zhu Zhun No. 20142141946 | The product is made from medical degreasing gauze. According to the actual conditions of products, X-ray detectable components and lifting belt can be provided. | September 14, 2021 | September 13, 2026 | Continuous registration |
| 40 | Disposable sterile-care oral cavity kit | Category II | Winner Medical (Chongyang) Co., Ltd. | E Xie Zhu Zhun No. 20212143322 | It is a disposable product for dental staff to perform clinical examination of and care for the human oral cavity. | July 1, 2021 | June 30, 2026 | First-time registration |
| 41 | Disposable surgical gowns | Category II | Winner Medical (Chongyang) Co., Ltd. | E Xie Zhu Zhun No. 20212143523 | It is used to prevent the transmission of infectious agents between patients and medical staff during surgical procedures and other invasive examinations. Standard performance: It is applicable to operations where the patient is known to have no infectious virus in the blood. High performance: It is applicable to a surgery where there is known infectious virus in the blood of the patient or it is unknown whether there is an infectious virus in the blood during | November 25, 2021 | November 24, 2026 | First-time registration |
emergency rescue.
| 42 | Disposable oral cavity instrument case | Category I | Winner Medical (Chongyang) Co., Ltd. | E Xianning Xie Bei No. 20210055 | It is a disposable product for dental staff to perform clinical examination and treatment of the human oral cavity. | November 16, 2021 | / | First-time filing |
| 43 | Disposable bedside care pack | Category I | Winner Medical (Chongyang) Co., Ltd. | E Xianning Xie Bei No. 20210037 | It is a kind of hygiene care product for hospital beds or examination beds. | August 18, 2021 | / | First-time filing |
| 44 | First aid kit | Category I | Winner Medical (Chongyang) Co., Ltd. | E Xianning Xie Bei No. 20210058 | It is used for temporary treatment in case of emergency. | November 25, 2021 | / | First-time filing |
| 45 | Scrub suits | Category I | Winner Medical (Chongyang) Co., Ltd. | E Xianning Xie Bei No. 20210035 | It is for anesthesiologists, itinerant nurses and other staff in operating rooms in order to keep the operating room clean and free from contamination by indoor personnel. | August 5, 2021 | / | Change of filing |
| 46 | Disposable sterile-care pack | Category II | Winner Medical (Chongyang) Co., Ltd. | E Xie Zhu Zhun No. 20142142005 | It is a disposable product for staff in medical units to perform daily care. | August 29, 2019 | August 28, 2024 | Change of registration |
| 47 | Medical nonwoven balls | Category II | Winner Medical (Chongyang) Co., Ltd. | E Xie Zhu Zhun No. 20142141942 | It is a disposable product for staff in medical units to perform surgeries. | December 31, 2021 | June 8, 2027 | Continuous registration |
| 48 | Medical gauze sheets | Category II | Winner Medical (Chongyang) Co., Ltd. | E Xie Zhu Zhun No. 20142140965 | The product is used for wound care, and is a disposable product for staff in medical units to perform surgery and wound care. | December 31, 2021 | June 8, 2027 | Continuous registration |
| 49 | Disposable protective clothing for medical use | Category II | Winner Medical (Chongyang) Co., Ltd. | E Xie Zhu Zhun No. 20142641943 | It provides barriers for and keeps medical staff away from contacting potentially infectious patient blood, body fluids, secretions, and airborne particulate matter at work. | June 9, 2017 | June 8, 2022 | Change of registration |
| 50 | Isolation gowns | Category I | Winner Medical (Chongyang) Co., Ltd. | E Xianning Xie Bei No. 20200022 | It is used in medical institutions outpatient, wards, laboratories, etc. for general isolation. | March 13, 2020 | / | Change of filing |
| 51 | Medical nonwoven pads | Category II | Winner Medical (Chongyang) Co., Ltd. | E Xie Zhu Zhun No. 20142141945 | It is a disposable product for staff in medical units to perform surgeries. | December 10, 2021 | July 26, 2027 | Continuous registration |
| 52 | Surgical mask | Category II | Winner Medical (Chongyang) Co., Ltd. | E Xie Zhu Zhun No. 20142141947 | It is used for filtering airborne particles, and blocking droplets, blood, body fluids and secretions in medical work environment. | December 10, 2021 | July 26, 2022 | Continuous registration |
| 53 | Iodophor disinfectant pads (balls, cotton swabs) | Category II | Winner Medical (Jiayu) Co., Ltd. | E Xie Zhu Zhun No. 20162142267 | It is used for disinfection of intact skin before injection and infusion. | January 20, 2021 | January 19, 2026 | Continuous registration |
| 54 | Alcohol disinfection pads | Category II | Winner Medical (Jiayu) Co., Ltd. | E Xie Zhu Zhun No. 20162142268 | It is used for disinfection of intact skin before injection and infusion. | January 20, 2021 | January 19, 2026 | Change of filing |
| 55 | Medical | Categor | Winner Medical | E Xie Zhu | They are used for | January 20, | January 19, | Continuous |
| cotton swabs | y II | (Jiayu) Co., Ltd. | Zhun No. 20162142270 | cleaning treatment of skin and wounds. | 2021 | 2026 | registration |
| 56 | Degreasing cotton | Category I | Winner Medical (Jiayu) Co., Ltd. | E Xianning Xie Bei No. 20210048 | They are used for cleaning treatment of skin and wounds. | November 3, 2021 | / | First-time filing |
| 57 | Scrub suits | Category I | Winner Medical (Jingmen) Co., Ltd. | E Jingmen Xie Bei No. 20210142 | It is for anesthesiologists, itinerant nurses and other staff in operating rooms in order to keep the operating room clean and free from contamination by indoor personnel. | November 26, 2021 | / | First-time filing |
| 58 | Medical gauze pads | Category II | Winner Medical (Jingmen) Co., Ltd. | E Xie Zhu Zhun No. 20202143027 | It is a disposable product for staff in medical units to perform surgery and wound care, and used to absorb body exudate and wound exudate during surgeries. The product should be used after sterilization. | July 22, 2020 | July 21, 2025 | Change of registration |
| 59 | Isolation gowns | Category I | Winner Medical (Tianmen) Co., Ltd. | E Tian Xie Bei No. 20210020 | It is used in medical institutions outpatient, wards, laboratories, etc. for general isolation. | January 29, 2021 | / | First-time filing |
| 60 | Disposable surgical mask | Category II | Winner Medical (Tianmen) Co., Ltd. | E Xie Zhu Zhun No. 20212143391 | The mask is a disposable product that covers the user's mouth, nose and jaw, and is applicable for the wearer’s health care in the general medical environment where there is no risk of body fluids and splashing, as well as general health care of non-invasive procedures in public health places (this mask cannot be used as a surgical or protective mask). | August 13, 2021 | August 12, 2026 | First-time registration |
| 61 | Medical film gloves | Category I | Winner Medical (Wuhan) Co., Ltd. | E Han Xie Bei No. 20210360 | The product is worn on the physician's hands or fingers for patient examination or palpation. | March 24, 2021 | / | First-time filing |
2. Abroad
| Region | S/N | Certificate No. | Name of certificates | Registration categories | Certificate owner | Product | Date of issue | Validity | Registration |
CEregions
| CE regions | 1 | G2S0462410064Rev.04 | EC certificate Class I | I | Winner Medical | Gauze Products, Synthetic Non-woven Products, 100% Cotton Non-woven Products, Cotton Products, Special Dressing Products | 2019.12.09 | 2024.05.26 | Obtained before to the reporting period |
| 2 | G10462410065Rev.04 | EC certificate-ClassⅡa,Ⅱb | II | Winner Medical | Sterile and non-sterile Gauze products, Sterile and non-sterile Synthetic Non-woven Products with X-ray detectable element, Sterile and non-sterile 100% Cotton Non-woven Products with X-ray detectable element, | 2019.12.10 | 2024.05.27 | Obtained before to the reporting period |
Basic Dressing Packs with ClassⅡa/Ⅱbelements, Alginate Dressing, FoamDressing, Hydrocolloid Dressing,Silicone Foam Dressing, SiliconeContact Layer, Super AbsorbentDressing, Activated Charcoal SuperAbsorbent Dressing, Silicone SuperAbsorbent Dressing, NPWT GauzeDressing Kit, NPWT Foam Dressing Kit
| 3 | CE 728017 | EU Type Examination Certificate | FFP2 mask, Category III | Winner Medical | Protective mask WN-N95FW, WN-N95FGINE | 2020.10.22 | 2021.05.14 | Obtained before to the reporting period |
| 4 | CE 728018 | Module C2 Certificate | PPE | Winner Medical | Protective mask WN-N95FW, WN-N95FGINE | 2020.10.22 | 2021.05.14 | Obtained before to the reporting period |
| 5 | FI20/967203 | EU Type Examination Certificate | Type 5,6, Category III | Winner Medical | Protective clothingWN-600DC, WN-600DC-1 | 2020.11.10 | 2025.11.10 | Obtained before to the reporting period |
| 6 | FI20/967181 | EU Type Examination Certificate | Type 5,6, Category III | Winner Medical | Protective clothingWN-600TC, WN-600TC-1 | 2020.11.09 | 2025.11.09 | Obtained before to the reporting period |
| 7 | CN20/42667 | Module C2 Certificate | PPE | Winner Medical | Protective clothing WN-600DC, WN-600DC-1, WN-600TC, WN-600TC-1 | 2020.12.03 | - | Obtained before to the reporting period |
Russia
| Russia | 8 | ΦC32011/10517 | Registration Certificate (Russia) | I | Winner Medical | 18 products including gauze swabs, gauzes ponges, gauze balls, gauze rolls, gauze lap sponges, and synthetic non-woven sponges/swabs | 2017.01.09 | / | Obtained before to the reporting period |
| 9 | ΦC32011/10516 | Registration Certificate (Russia) | I | Winner Medical | 13 products including absorbent pad, gauze combine dressing, non-woven adhesive wound dressing, and finger bandage | 2017.01.23 | / | Obtained before to the reporting period | |
| 10 | ΦC32011/10515 | Registration Certificate (Russia) | I | Winner Medical | 19 products including non-woven cohesive flexible bandage, shrinking gauze bandage, and gauze bandage | 2017.01.23 | / | Obtained before to the reporting period | |
| 11 | ΦC32011/10514 | Registration Certificate (Russia) | I | Winner Medical | 12 products including isolation gown, patient gown, visitor gown, surgical gown, and caps | 2017.01.09 | / | Obtained before to the reporting period |
Japan
| Japan | 12 | BG10500019 | Registration certificate for foreign manufacturers of medical devices | I | Winner Medical | / | 2020.12.13 | 2025.12.12 | Obtained before to the reporting period |
| 13 | BG10500055 | Registration certificate for | I | Winner Medical | / | 2016.07.18 | 2021.07.17 | Obtained before to |
| foreign manufacturers of medical devices | (Jiayu) | the reporting period |
| 14 | BG10500206 | Registration certificate for foreign manufacturers of medical devices | I | Winner Medical (Chongyang) | / | 2017.11.21 | 2022.11.20 | Obtained before to the reporting period |
| 15 | BG10500432 | Registration certificate for foreign manufacturers of medical devices | I | Winner Medical (Jingmen) | / | 2019.07.10 | 2024.07.09 | Obtained before to the reporting period |
| 16 | BG10500055 | Registration certificate for foreign manufacturers of medical devices | / | Winner Medical (Jiayu) | / | 2021.07.18 | 2026.07.17 | Continuous registration during the reporting period |
Global
| Global | 17 | N°EGL/174757/1067150/1 | Global Organic Textile Standard | / | Winner Medical (Huanggang) | 100.0% Organic Cotton； 70% Spunlace Nonwoven Fabric，30% linen Spunlace Nonwoven Fabric | 2021.07.14 | 2022.07.13 | Continuous registration during the reporting period |
| 18 | N°EGL/174757/1067150/1 | Oeko-Tex standard 100 Certificate | / | Winner Medical (Jiayu) | Cosmetic cotton, absorbent cotton (for medical cosmetic use), cotton roll, cotton ball, dental cotton roll and cotton swab, white | 2021.10.19 | 2022.11.30 | Continuous registration during the reporting period |
UK
| UK | 19 | 2021071201208120 | Registration Confirmation Letter | IIa, IIb, Is | Winner Medical | High-end wound dressings (Category II), wound dressings (Category I sterilization), and gauze with thread class (Category II) Gauze (Category I sterilization) Pure cotton non-woven (Category I sterilization) Non-woven (Category I sterilization) Cotton (Category I sterilization) Basic combo pack (Category I sterilization) | 2021.7.23 | / | New registration during the reporting period |
UK
| UK | 20 | 2021091301215690 | Registration Confirmation Letter | I | Winner Medical | High-end wound dressings (Category I sterilization) Gauze (Category I sterilization) Pure cotton non-woven (Category I sterilization) Non-woven (Category I sterilization) Cotton (Category I sterilization) Alcohol cotton pads (Category I sterilization) Protection class (Category I sterilization) Bandage (Category I sterilization) | 2021.9.6 | / | New registration during the reporting period |
| Canada | 21 | 14290 | MDEL（Medical Device Establishment Licence） | I | Winner Medical | Category I medical device | 2021.07.08 | 2022.03.31 | New registration during the reporting period |
CEregions
| CE regions | 22 | 735016 | EU Type Examination Certificate | Category III | Winner Medical | FFP2 protective mask WN-N95FW | 2021.04.01 | 2026.04.01 | New registration during the reporting period |
CEregions
| CE regions | 23 | 735018 | Module D Certificate | Category III | Winner Medical | Category III PPE protective masks | 2021.04.01 | 2026.04.01 | New registration during the reporting period |
CEregions
| CE regions | 24 | CN21-45532 | Module D Certificate | Category III | Winner Medical | Category III PPE protective clothing | 2021.07.17 | 2024.05.12 | New registration during the reporting period |
6. Cash flow
Unit: yuan
| Item | 2021 | 2020 | Year-on-year increase/decrease |
Subtotal cash inflows fromoperating activities
| Subtotal cash inflows from operating activities | 8,810,925,953.61 | 13,506,886,695.52 | -34.77% |
Subtotal of cash inflow fromoperating activities
| Subtotal of cash inflow from operating activities | 7,939,236,051.68 | 8,739,390,408.13 | -9.16% |
Net cash flow from operatingactivities
| Net cash flow from operating activities | 871,689,901.93 | 4,767,496,287.39 | -81.72% |
Subtotal cash inflows frominvestment activities
| Subtotal cash inflows from investment activities | 7,465,119,663.87 | 4,572,064,826.38 | 63.28% |
Subtotal cash outflows frominvestment activities
| Subtotal cash outflows from investment activities | 6,986,313,228.36 | 9,002,000,981.04 | -22.39% |
Net cash flow from investingactivities
| Net cash flow from investing activities | 478,806,435.51 | (4,429,936,154.66) | 110.81% |
Subtotal of cash inflow fromfinancial activities
| Subtotal of cash inflow from financial activities | 3,743,348,396.23 | -100.00% |
Subtotal of cash inflow fromfinancial activities
| Subtotal of cash inflow from financial activities | 1,409,637,239.29 | 395,270,980.45 | 256.63% |
Net cash flow from financingactivities
| Net cash flow from financing activities | (1,409,637,239.29) | 3,348,077,415.78 | -142.10% |
Net increase of cash and cashequivalents
| Net increase of cash and cash equivalents | (61,122,432.34) | 3,690,564,974.73 | -101.66% |
Description of main influencing factors of significant changes in relevant data on a year-on-year basis
√Applicable □ Not applicable
1. The decrease in cash inflow from operating activities and net cash flow from operating activities for the reporting period wasmainly due to the decrease in the Company's performance for the period; 2. The obvious increase in cash inflow from investingactivities and net cash flow from investing activities was mainly due to the redemption of financial products purchased in the sameperiod of the previous year in the current reporting period; 3. The decrease in cash inflow from financing activities was mainly due tothe successful IPO of the Company in 2020 and the availability of funds raised, while the cash outflow from financing activities wasmainly due to the distribution of profits, the repurchase of shares and the impact of the new leasing guidelines in the current reportingperiod; moreover, thanks to the decrease in cash inflow from financing activities and the increase in outflow, the net cash generatedfrom financing activities decreased; 4. The decline in net increase in cash and cash equivalents was mainly due to the decrease in net
cash flow from operating activities and the decrease in net cash flows from financing activities.Reasons for significant difference between the net cash flow from operating activities of the Company and the net profit of thecurrent year in the reporting period
□ Applicable √ Not applicable
V. Non-main operations
√Applicable □ Not applicable
Unit: yuan
| Amount | Proportion in total profits | Formation reasons | Is it sustainable |
Investment income
| Investment income | 103,237,547.98 | 7.06% | It is mainly due to the gain on maturity of financial products and the recognition of investment income from joint ventures. | Investment income from joint ventures Yes, others No |
Pro?t/los fromchanges in fairvalue
| Pro?t/los from changes in fair value | 58,474,468.36 | 4.00% | It is mainly due to the changes in fair value of financial products (such as structured deposits). | No |
Impairment ofassets
| Impairment of assets | (100,665,232.92) | -6.88% | It is mainly due to the provision for impairment of inventories and fixed assets. | No |
Non-revenue
| Non-revenue | 6,040,019.07 | 0.41% | It is mainly due to the receipt of government subsidies unrelated to operating activities. | No |
Non-operatingexpenses
| Non-operating expenses | 18,919,306.79 | 1.29% | It is mainly due to the losses on scrapping of non-current assets. | No |
Credit impairmentLoss
| Credit impairment Loss | (574,000.57) | -0.04% | It is mainly due to the expected credit losses on the accrual of accounts receivable and other receivables. | No |
Gains from assetdisposal
| Gains from asset disposal | 3,250,448.27 | 0.22% | It is mainly due to the losses on disposal of non-current assets. | No |
Other incomes
| Other incomes | 102,353,195.81 | 7.00% | It is mainly due to the receipt of government subsidies related to operating activities. | No |
VI. Analysis of assets and liabilities
1. Major changes in asset composition
Unit: yuan
| End of 2021 | Early 2021 | Increase/decrease in proportions | Description of significant changes | |||
| Amount | The proportion in total assets | Amount | The proportion in total assets | |||
Cash and cashequivalents
| Cash and cash equivalents | 4,273,938,326.82 | 32.22% | 4,162,539,245.78 | 30.82% | 1.40% | No major changes |
Accountsreceivable
| Accounts receivable | 775,546,589.42 | 5.85% | 844,317,708.12 | 6.25% | -0.40% | No major changes |
Contract assets
| Contract assets | 0.00% | 0.00% | 0.00% |
Inventory
| Inventory | 1,597,377,043.99 | 12.04% | 1,216,486,940.21 | 9.01% | 3.03% | It is mainly due to the increase in strategic |
stockpilingInvestment inreal estates
| Investment in real estates | 0.00% | 0.00% | 0.00% |
Long-term equityinvestment
| Long-term equity investment | 16,949,801.24 | 0.13% | 13,424,230.41 | 0.10% | 0.03% | It is mainly due to the increase in investment income in affiliates. |
Fixed assets
| Fixed assets | 1,477,320,848.63 | 11.14% | 1,400,749,050.00 | 10.37% | 0.77% | No major changes |
Construction inprogress
| Construction in progress | 216,096,622.30 | 1.63% | 61,383,340.97 | 0.45% | 1.18% | It is mainly due to the increase in infrastructure projects and uninstalled equipment in the reporting period |
Right-of-useassets
| Right-of-use assets | 531,735,443.44 | 4.01% | 504,205,737.73 | 3.73% | 0.28% | No major changes |
Short-term loans
| Short-term loans | 0.00% | 150,071,416.66 | 1.11% | -1.11% | It is mainly due to the repayment of short-term loans due. |
Contractliabilities
| Contract liabilities | 341,175,665.42 | 2.57% | 530,188,257.63 | 3.93% | -1.36% | It is mainly due to the decrease in consideration received in advance from customers. |
Long-term loans
| Long-term loans | 0.00% | 0.00% | 0.00% |
Lease liabilities
| Lease liabilities | 381,808,925.09 | 2.88% | 363,828,691.92 | 2.69% | 0.19% | No major changes |
Accountsreceivablefinancing
| Accounts receivable financing | 9,940,272.21 | 0.07% | 18,182,662.70 | 0.13% | -0.06% | It is mainly due to the decrease in outstanding bank acceptance bills |
Other currentassets
| Other current assets | 118,759,825.56 | 0.90% | 35,184,227.09 | 0.26% | 0.64% | It is mainly due to the increase in unsettled estimated gains on the accrual basis for estimated certificates of deposit and large certificates of deposit, as well as the increase in corporate income tax prepayments and input tax credits to be deducted |
Long-termdeferredexpenses
| Long-term deferred expenses | 174,785,770.83 | 1.32% | 121,335,007.33 | 0.90% | 0.42% | It is mainly due to the increase in renovation costs of new stores during the reporting period |
Othernon-currentassets
| Other non-current assets | 115,571,001.80 | 0.87% | 63,807,415.75 | 0.47% | 0.40% | It is mainly due to the increase in prepayments for non-current assets. |
Taxes payable
| Taxes payable | 93,859,069.68 | 0.71% | 444,381,369.49 | 3.29% | -2.58% | It is mainly due to the decrease in corporate income tax and other taxes as a result of the decrease in total profit. |
Treasury stock
| Treasury stock | 257,992,366.68 | 1.94% | 0.00% | 1.94% | It is mainly due to share repurchase |
Othercomprehensiveincome
| Other comprehensive income | (1,556,935.43) | -0.01% | (1,111,035.08) | -0.01% | 0.00% | It is mainly due to the changes in translation differences in foreign currency statements. |
High percentage of foreign assets
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√Applicable □ Not applicable
Unit: yuan
| Item | Opening balance | Gain/loss from changes in fair value for the period | Accumulated fair value changes included in equity | Impairment in accrual of current period | Purchase amount during the reporting period | Sales amount during the reporting period | Other changes | Closing balance |
Financial assets
Financial assets
1. Tradable
financialassets(excludingderivativefinancialassets)
| 1. Tradable financial assets (excluding derivative financial assets) | 4,131,178,589.44 | 58,474,468.36 | 6,780,996,820.00 | 7,800,000,000.00 | 3,130,529,709.10 |
Total of theabove
| Total of the above | 4,131,178,589.44 | 58,474,468.36 | 6,780,996,820.00 | 7,800,000,000.00 | 3,130,529,709.10 |
Financialliabilities
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 |
Other changesNot applicable.Whether there were any significant changes in the measurement attributes of the Company’s major assets during the reporting period
□Yes √No
3. Restricted rights to assets as of the end of the reporting period
| Item | Ending book value | Causes for restriction |
Cash and cash equivalents
| Cash and cash equivalents | 185,326,064.78 | For details, see “1. Monetary Funds, VII. Notes to Items in Consolidated Financial Statements” of Section 10 Financial Statements |
Fixed assets
| Fixed assets | 6,567,843.41 | For details, see “1. Urban Renewal Project of Winner Industrial Park, 7. Other important matters affecting the decision-making of investors, XVI. Other important issues” of Section 10 Financial Statements |
Total
| Total | 191,893,908.19 | -- |
VII. Analysis of investment
1. Overall situation
√Applicable □ Not applicable
| Investment amount in the reporting period (yuan) | Investment amount in the same period of the previous year (yuan) | Change percentage |
7,201,614,958.67
| 7,201,614,958.67 | 4,382,818,387.53 | 64.31% |
2. Significant equity investments acquired during the reporting period
□ Applicable √ Not applicable
3. Significant non-equity investments in progress during the reporting period
□ Applicable √ Not applicable
4. Financial assets measured with fair value
√Applicable □ Not applicable
Unit: yuan
| Asset classes | Initial investment cost | Gain/loss from changes in fair value for the period | Accumulated fair value changes included in equity | Purchase amount in the current reporting period | Sales amount in the current reporting period | Accumulated investment income | Closing balance | Source of funds |
Trust products
| Trust products | 200,000,000.00 | 15,833,430.82 | 0.00 | 1,880,000,000.00 | 750,000,000.00 | 16,672,245.95 | 1,345,833,430.82 | Self-owned funds |
Others
| Others | 3,920,000,000.00 | 42,641,037.54 | 0.00 | 4,900,996,820.00 | 7,050,000,000.00 | 68,019,777.78 | 1,784,696,278.28 | Self-owned funds + proceeds |
Total
| Total | 4,120,000,000.00 | 58,474,468.36 | 0.00 | 6,780,996,820.00 | 7,800,000,000.00 | 84,692,023.73 | 3,130,529,709.10 | -- |
5. The use of proceeds
√Applicable □ Not applicable
(1) The overall use of proceeds
√Applicable □ Not applicable
Unit: RMB ’0,000
| Year | Method | Total amount of proceeds | Total amount of proceeds used during the current reporting period | Total accumulated amount of proceeds used during the current reporting period | Total amount of proceeds for alteration purposes during the current reporting period | Total accumulated amount of proceeds for alteration purposes during the current reporting period | Proportion of total amount of proceeds for alteration purposes during the current reporting period | Total amount of proceeds not used during the current reporting period | Usage and purposes of proceeds not used during the current reporting period | Amount of proceeds that have been idle for more than two years |
2020
| 2020 | IPO | 355,884.93 | 42,061.82 | 132,243.65 | 0 | 0 | 0.00% | 231,115.12 |
Of which: the balance of cashmanagement was 216.300 million yuanand the balance deposited in the proceedsaccount was 148.512 million yuan.
Total
| Total | -- | 355,884.93 | 42,061.82 | 132,243.65 | 0 | 0 | 0.00% | 231,115.12 | -- | 0 |
Description of the overall use of proceeds
Description of the overall use of proceeds
The China Securities Regulatory Commission (CSRC) approved that, in its “CSRC License [2020] No. 1822” document, the Company made an initial public offering of 50 million yuanordinary shares (A shares) at an offer price of 74.30 yuan per share, and the total proceeds amounted to 3,715.0000 million yuan. After deducting issuance fees of 156.1507 million yuan(excluding tax), net proceeds totaled 3,558.8493 million yuan. The above-mentioned proceeds were in place in September 2020 and verified by BDO Certified Public Accountants (SpecialGeneral Partnership) with a “Capital Verification Report” (Xin Kuai Shi Bao Zi [2020] No. ZI10584). As of December 31, 2021, the Company mobilized 1,322.4365 million yuan of proceeds,of which: 683.4365 million yuan of proceeds were actually used for fundraising projects (including 349.5451 million yuan of funds invested in fund-raising projects in the current reportingperiod and 333.8914 million yuan of funds pre-invested in fund-raising projects by replacing self-financing funds), and 639.0000 million yuan of idle proceeds for permanently replenishing theworking capital. The balance of the Company’s unused proceeds was 2,311.1512 million yuan, of which: the balance of structured deposits was 2,163.0000 million yuan and the balance of
148.1512 million yuan was deposited in the proceeds account.
(2) Committed proceeds projects
√Applicable □ Not applicable
Unit: RMB ’0,000
The China Securities Regulatory Commission (CSRC) approved that, in its “CSRC License [2020] No. 1822” document, the Company made an initial public offering of 50 million yuanordinary shares (A shares) at an offer price of 74.30 yuan per share, and the total proceeds amounted to 3,715.0000 million yuan. After deducting issuance fees of 156.1507 million yuan(excluding tax), net proceeds totaled 3,558.8493 million yuan. The above-mentioned proceeds were in place in September 2020 and verified by BDO Certified Public Accountants (SpecialGeneral Partnership) with a “Capital Verification Report” (Xin Kuai Shi Bao Zi [2020] No. ZI10584). As of December 31, 2021, the Company mobilized 1,322.4365 million yuan of proceeds,of which: 683.4365 million yuan of proceeds were actually used for fundraising projects (including 349.5451 million yuan of funds invested in fund-raising projects in the current reportingperiod and 333.8914 million yuan of funds pre-invested in fund-raising projects by replacing self-financing funds), and 639.0000 million yuan of idle proceeds for permanently replenishing theworking capital. The balance of the Company’s unused proceeds was 2,311.1512 million yuan, of which: the balance of structured deposits was 2,163.0000 million yuan and the balance of
148.1512 million yuan was deposited in the proceeds account.
Committedinvestmentprojects andinvestment of
over-raisedproceeds
| Committed investment projects and investment of over-raised proceeds | Whether the project has been changed (including partial change) | Total investment in committed proceeds | Adjusted total investment (1) | Investment amount in the current reporting period | Cumulative investment amount as of the end of the reporting period (2) | Investment progress as of the end of the reporting period (3) = (2)/(1) | The project reaches the intended usable status date | Benefits realized in the current reporting period | Cumulative benefits realized as of the end of the reporting period | Whether projected benefits are met | Whether there is a significant change in project feasibility |
Committed investment projectsHigh-end wounddressingsproduction lineconstructionproject
| High-end wound dressings production line construction project | No | 21,685.86 | 21,685.86 | 546.46 | 3,198.37 | 14.75% | October 31, 2022 | 0 | 0 | N/A | No |
Marketing networkconstructionproject
| Marketing network construction project | No | 70,456.87 | 70,456.87 | 9,608.94 | 21,838.13 | 31.00% | October 31, 2023 | 0 | 0 | N/A | No |
R&D Centerconstructionproject
| R&D Center construction project | No | 23,542.15 | 23,542.15 | 2,304.43 | 7,374.06 | 31.32% | October 31, 2022 | 0 | 0 | N/A | No |
Digitalmanagementsystem project
| Digital management system project | No | 26,881.05 | 26,881.05 | 4,206.23 | 10,037.33 | 37.34% | October 31, 2022 | 0 | 0 | N/A | No |
Subtotal ofcommittedinvestmentprojects
| Subtotal of committed investment projects | -- | 142,565.93 | 142,565.93 | 16,666.06 | 42,447.89 | -- | -- | -- | -- |
Investment of over-raised proceeds
Investment of over-raised proceedsWinner IndustrialPark (Jiayu)Project
| Winner Industrial Park (Jiayu) Project | No | 40,000 | 5,211.44 | 5,211.44 | 13.03% | June 30, 2023 | 0 | 0 | N/A | No |
Phase II ExpansionProject of WinnerMedical Wuhan
| Phase II Expansion Project of Winner Medical Wuhan | No | 60,000 | 20,184.32 | 20,684.32 | 34.47% | December 31, 2022 | 0 | 0 | N/A | No |
Bolster workingcapital (if any)
| Bolster working capital (if any) | -- | 63,900 | 63,900 | 100.00% | -- | -- | -- | -- | -- |
Subtotal of use ofover-raisedproceeds
| Subtotal of use of over-raised proceeds | -- | 163,900 | 25,395.76 | 89,795.76 | -- | -- | 0 | 0 | -- | -- |
Total
| Total | -- | 142,565.93 | 306,465.93 | 42,061.82 | 132,243.65 | -- | -- | 0 | 0 | -- | -- |
Information on andreasons for notmeeting thescheduled progressor projectedearnings (byspecific project)
| Information on and reasons for not meeting the scheduled progress or projected earnings (by specific project) | N/A |
Description ofsignificant changes
| Description of significant changes | N/A |
in projectfeasibility
Amount, purposeand progress of useof over-raisedproceeds
| Amount, purpose and progress of use of over-raised proceeds | Applicable |
| On October 12, 2020, the 13th meeting of the Second Board of Directors and the seventh meeting of the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding the Use of Some Over-raised Proceeds To Permanently Supplement the Working Capital”, and agreed that the Company could allocate 639.00 million yuan of the over-raised proceeds to permanently supplement the working capital. As of November 2, 2020, 639.00 million yuan of over-raised proceeds have been used to bolster working capital. On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding the Use of Over-raised Proceeds for the Investment in Winner Industrial Park (Jiayu) Project”. The main body of the Proposal is as follows: The Company plans to allocate 400.0000 million yuan of the over-raised proceeds to the investment in the Winner Industrial Park (Jiayu) Project. The total investment in Winner Industrial Park (Jiayu) Project is estimated at 900.0000 million yuan, and the implementing entity is Winner Medical (Jiayu) Co., Ltd. The project is located in Hubei Jiayu Economic Development Zone, adjacent to the Park’s 2nd Road in the north, 3rd Road in the south, Jiayu Avenue in the east, and Shijingpu Road in the west. The total land area is about 451 mu. The project relies on independent research and development of patented technology achievements, and based on the existing advantages of the Company in the industry, considers natural cotton as the main raw material to innovate and improve degreasing and spunlace technology. It adopts comprehensive use of high-pressure “water needle” and other high-efficiency production technologies, and plans to build production projects in relation to spunlace, wash care, wet tissues, medical cotton/gauze/non-woven fabrics, hand sanitizer and other products. As of December 31, 2021, the total amount invested in the above project is 52.1144 million yuan. On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding the Use of Over-raised Proceeds for the Phase II Expansion Project of Winner Medical Wuhan”. The main body of the Proposal is as follows: The Company plans to allocate 600.0000 million yuan of the over-raised proceeds to the investment in the Phase II Expansion Project of Winner Medical Wuhan. The total investment in Phase II Expansion Project of Winner Medical Wuhan totals 1,500.0000 million yuan, and the implementing entity is Winner Medical (Wuhan) Co., Ltd. The project includes non-woven coil center, sterilization processing center, domestic medical sales and marketing center, intelligent distribution center of Hubei regional headquarters, regional headquarters in Central China and the second R&D center of the Group, which are fully invested and independently operated by the Company. Thanks to the project construction, the Company’s production capacity and market share will be increased, enabling it to become a global leader in overall technical level and product quality scale. As of December 31, 2021, the total amount invested in the above project is 20.68432 million yuan. |
Change of locationfor theimplementation ofthe proceedsinvestment project
| Change of location for the implementation of the proceeds investment project | Applicable |
| Occurred in the previous year | |
| On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding Capital Increase in Wholly owned Subsidiaries with Some of the Proceeds, Changes to Implementing Entity of the Fundraising Projects, and Addition of Implementation Sites of Some Fundraising Projects”. The main body of the Proposal is as follows: To further improve the production, management efficiency and comprehensive utilization rate of resources, seize market development opportunities, and better promote the implementation of fundraising projects, the Company plans to use some of the proceeds to increase the capital of the wholly-owned subsidiaries and change the implementing entity of the fundraising projects, and add new implementation sites for the fundraising projects. Among them, the original implementing entity of the “R&D Center Construction Project” was Winner Medical (Wuhan) Co., Ltd. According to the Company’s development strategy and actual business needs, it plans to include Winner Medical Products Co., Ltd. as the implementing entity of “R&D Center Construction Project”, a fundraising project. A new implementation site in Winner Industrial Park, No. 660 Bulong Road, Longhua New District, Shenzhen is also included accordingly. |
Adjustment of theimplementationmode of theproceedsinvestment project
| Adjustment of the implementation mode of the proceeds investment project | N/A |
| Pre-investment and replacement of the proceeds investment project | Applicable |
| On February 26, 2021, the 18th meeting of the Second Board of Directors and the 12th meeting of the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding the Use of Over-raised Proceeds to Replace Self-raised Funds Pre-invested in the New Project”, respectively, and agreed that the Company could replace the self-raised funds pre-invested in the fundraising project with 100.1742 million yuan of proceeds. It has been verified by the “Special Auditor’s Report on Proceeds Replacement of Winner Medical Products Co., Ltd.” ([2021] No. ZI10031) issued by BDO Certified Public Accountants (Special General Partnership) on February 23, 2021. Among them: the actual investment amount of the Company’s self-raised funds pre-invested in the proceeds investment project is 100.1742 million yuan, of which: 85.8942 million yuan was invested in Wuhan Phase II expansion project, and 14.2800 million yuan was invested in Winner Industrial Park (Jiayu) Project. In February and March 2021, the Company transferred 14.2800 million yuan and 85.8942 million yuan respectively from the special account for proceeds to replacing the self-raised funds that had been invested in advance in the new proceeds project. On October 12, 2020, the 13th meeting of the Second Board of Directors and the seventh meeting of the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding the Use of Proceeds to Replace Self-raised Funds Pre-invested in the Fundraising Project”, respectively, and agreed that the Company could replace the self-raised funds pre-invested in the fundraising project with 233.7173 million yuan of proceeds. It has been verified by the “Special Auditor’s Report on Proceeds Replacement of Winner Medical Products Co., Ltd.” issued by BDO Certified Public Accountants (Special General Partnership) on October 12, 2020. Among them: the actual investment amount of the Company’s self-raised funds pre-invested in the proceeds investment project is 233.7173 million yuan, of which: 26.5062 million yuan was invested in high-end wound dressing production line construction project, 110.0794 million yuan was invested in marketing network construction project, 50.2174 million yuan was invested in R&D center construction project, 46.9143 million yuan was invested in digital management system project. In October and November 2020, the Company transferred 73.4204 million yuan and 160.2968 million yuan respectively from the special account for proceeds to replacing the self-raised funds that had been invested in advance in the proceeds project. |
Temporaryreplenishment ofworking capitalwith idle proceeds
| Temporary replenishment of working capital with idle proceeds | N/A |
Amount of andreasons for thebalance ofproceeds resultingfrom projectimplementation
| Amount of and reasons for the balance of proceeds resulting from project implementation | N/A |
Usage andpurposes ofproceeds not usedduring the currentreporting period
| Usage and purposes of proceeds not used during the current reporting period | As of December 30, 2021, the balance of unused proceeds of the Company was 2,311.1512 million yuan, of which: the balance of cash management was 2,163.0000 million yuan and the balance deposited in the proceeds account was 148.1512 million yuan. |
Problems or othercircumstances inthe use anddisclosure ofproceeds
| Problems or other circumstances in the use and disclosure of proceeds | None |
(3) Changes in proceeds projects
□ Applicable √ Not applicable
The Company did not have any change in the proceeds project during the reporting period.VIII. Sales of major assets and equities
1. Sales of major assets
□ Applicable √ Not applicable
The Company did not sell any significant assets during the reporting period.
2. Information of significant equity for sale
□ Applicable √ Not applicable
IX. Analysis of main holding and joint-stock companies
√Applicable □ Not applicable
Information on major subsidiaries and joint stock companies with an impact of 10% or more on the Company’s net profit
Unit: yuan
| Company name | Company type | Principal operation | Registered capital | Total assets | Net assets | Revenue | Operating profit | Net profit |
WinnerMedical(Huanggang)Co., Ltd.
| Winner Medical (Huanggang) Co., Ltd. | Subsidiaries | Mainly responsible for the production of large rolls of cotton and cotton tissues | 259,459,200.00 | 1,508,464,259.34 | 1,202,571,170.97 | 1,489,366,249.58 | 222,530,641.81 | 184,059,060.84 |
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Description of major holding companies and joint stock companies
X. Structured entities controlled by the company
□ Applicable √ Not applicable
XI. Prospect of the Company's future development(I) Industry development trend and competition patternFor details, please refer to the Company’s business summary in Section III.(II) The Company’s development strategies
With “To enhance your health, life and well-being” as its vision, “To lead the healthcare trend and achieve harmony between peopleand the environment” as its mission, and “working hard, responsibility, innovation, self-criticism, and long-termism” as its values,the Company proposed the development strategy of “stable growth for excellent operation and product innovation for future” in 2021.In the short term, we focus on maintaining stable growth through excellent operations, and in the medium term, we will underline thesustainable growth through leading products.
Short- and medium-term strategy: excellent operation for stable growth and leading products for
futureStrategicpositioning
StrategicpositioningDevelopmentstrategies
DevelopmentstrategiesStrategiccornerstones
Strategiccornerstones
Vision: To enhance your health, life and well-beingMission:To lead the healthcare trend and achieve harmony between people and the
environmentValues:working hard, responsibility, innovation, self-criticism, and long-termism
Vision: To enhance your health, life and well-beingMission:To lead the healthcare trend and achieve harmony between people and the
environmentValues:working hard, responsibility, innovation, self-criticism, and long-termismThree business principles & ten beliefs of Winner Medical people
Three business principles & ten beliefs of Winner Medical peopleShort- tomedium-term strategy:
| Short- to medium-term strategy: | Excellent operation for stable growth (1~2 years) | Leading products for future (3~5 years) |
Scope of business
| Scope of business | Excellent operation | Excellent operation | Leading products | Leading products | Leading products |
Dual drivers formedical productsand consumables
| Dual drivers for medical products and consumables | Short-term: Lean production for cost reduction and efficiency increase | Mid-term: Process reform and digital transformation | Short-term: A winning battle of core products, and a fight for top-selling products | Mid-term: Product innovation Technology innovation | Mid-term: Investment and M&A to make up for the shortcomings |
In the short term, we will focus on the advantageous resources to win the battle by subtracting from the market, channels, products,supplies and internal operations, thus “slightly” reducing loss-making customers, “slightly” reducing loss-making channels, “slightly”reducing long-tail products, “slightly” reducing long-tail suppliers, and streamlining and optimizing processes. To further enhanceproduct competitiveness, we are implementing an end-to-end “cost reduction and efficiency improvement” strategy. In the mediumterm, the Company will further implement end-to-end business process reforms to achieve “customer and consumer-centric, leadingproduct-driven, and smart manufacturing-based” business transformation, shifted to R&D management processes for innovation andproduct competitiveness, integrated marketing processes for product commercial success, and integrated customer-centric supplychain processes. While promoting business process changes, we are simultaneously implementing digital capacity building, focusingon five areas: omnichannel, commodity, consumer, supply chain, and intelligent manufacturing, respectively, to carry out digitalchanges and support the rapid development of business.As to leading products for the future, in the short term, the Company not only reduces reductant lines, but also speeds up the iterativeupgrade of top-selling products, thus increasing market investment to capture market share. In the medium term, the organization hasestablished the Winner Medical Innovation Institute, invited a national academician to be its president, and further explored andplanned the technology landscape in the field of medical care and health. With the expansion of business scale and the enhancementof financial strength, the Company will, from a strategic point of view, seize the opportunities of industry development and, based onthe principle of maximizing shareholders’ value, seek suitable M&A targets related to the Company’s main business globally.Moreover, it will implement M&A plans in case of appropriate timing, conditions and targets, thus promoting the Company’soutward development.The cornerstones that support the Company's strategic goals are the three main business principles of “Quality before profit, brandbefore speed, social value before corporate value”, and the ten beliefs of Winner Medical people: following the Party, concerningabout the country, observing the three core business principles, adopting altruism, complying with customer thinking, working hard,keeping operational excellence, advancing with the times, persisting in innovation, and insisting on self-criticism. In the future,Winner Medical will continue to be committed to becoming a global leader in medical consumables, home care products, and gooddaily necessities. It will adhere to its original intention, continue to innovate, and keep on leading the positive development ofindustry to transform from “Made in China” to “Created in China”, and from Chinese brands to international brands. The Companywill always adhere to the sustainable development concept of pursuing quality life and loving health as well as environmentalprotection, combining the two to bring happiness, peace of mind and sustainable products to consumers and create value for a betterlife.(III) Possible risks to the Company
1. Risk of earnings volatility due to the COVID-19 outbreak and countermeasuresFrom January to December 2021, the Company achieved an operating revenue of 8,037.4208 million yuan, down 35.87% YoY; andnet profit attributable to owners of the parent company of 1,239.3200 million yuan, down 67.50% YoY. Due to the outbreak of theCOVID-19 pandemic in 2020, the Company’s sales of medical protective products such as medical masks and protective clothingincreased significantly. In 2021, with the effective prevention and control of COVID-19 pandemic, widespread vaccination, dramaticincrease in production capacity of medical protective products and increasing competition, the orders for medical protective productswere reduced significantly. The short-term sales revenue and net profit of the Company's medical protective products were subject torisks of performance fluctuations due to the pandemic changes.After the baptism of COVID-19 pandemic, the country, hospitals and the public have raised the requirements for a hygienicenvironment, the Company’s brand awareness, reputation and influence has been greatly enhanced, while sales channels have beenfurther expanded. The Company then will seize market opportunities, make product adjustments according to market demands,increase its share and coverage in the medical consumables market.
2. Risk of fluctuations in downstream market demand and less-than-expected customer development and countermeasuresThanks to its three brands, i.e., “Winner Medical”, “Purcotton” and “PureH2B”, the Company realized synergetic development ofmedical and consumer sectors. Its business and development prospects depend on the sustainable and healthy development of macroeconomy, the continued growth of national per capita disposable income, and the consumers’ increasing attention to the concept ofhealth and environmental protection. Therefore, in the event of a macroeconomic downturn, a decline in national per capitadisposable income or purchasing power, or an uncertain expected economic outlook, the downstream demand situation of theCompany, especially consumers’ willingness and ability to purchase high-quality products, may be affected, which would adverselyaffect the Company’s operating results. In addition, after more than ten years of rapid development, the growth of e-commerce inChina has slowed down and the difficulty of acquiring customers has increased. If the Company cannot adjust its business strategybased on market conditions, it may not be able to continuously expand its customer base and reduce customer acquisition costs,which would adversely affect the Company’s long-term profitability.
3. Risk of raw material price fluctuations and countermeasures
The Company’s main raw materials are cotton as well as cotton yarn and cotton greige fabric for medical use made from cotton. Theprices of cotton are affected by multiple factors such as planting area, natural production, inventory cycle, agricultural price policy oforigin, consumer demand and even futures prices. In addition, the prices of imported cotton are also affected by other factors such asinternational trade policies and exchange rate fluctuations. If the purchase price of raw materials such as cotton continues to rise inthe future, it will have a greater cost pressure on the Company’s production and operation. If the Company fails to the adjustment ofsales price with that of raw material price, it may have a negative impact on the stability of the Company’s profitability.
To deal with the risk of cotton price fluctuations, the Company usually purchases forward contracts when the cotton price isrelatively low, and when the cotton price rises to a certain level, it will adjust the sales price and control sales discounts to reduce thenegative impact on the Company’s profitability.
4. Exchange rate risks and countermeasures
Medical consumables are the main exports of the Company, which are settled in major international currencies such as US dollars.From 2019 to 2021, the proportion of the Company’s foreign sales in its main operating revenues were 18.92%, 47.69% and 21.07%,respectively, which accounted for a certain proportion of overall revenue. In recent years, with the accelerated pace of RMBinternationalization and further marketization of the RMB exchange rate formation mechanism, the exchange rate flexibility of RMBagainst the above currencies has increased. Fluctuations in the RMB exchange rate will, on the one hand, affect the Company’sproduct export sales prices; on the other hand, it will also cause the Company to generate exchange gains and losses. If there is asignificant appreciation of RMB in the future, it will affect the price competitiveness of the Company in overseas markets, and causeexchange losses, which will adversely affect the Company’s operating revenues and profits.To reduce the impact of exchange rate fluctuations on the Company’s performance, (1) for long-term stable customers, the Companyhas an agreed price adjustment mechanism, and in case of significant fluctuations in key elements affecting the price, the price shallbe adjusted normally according to the agreed price adjustment mechanism; and at the same time, the Company adjusts the quotationcycle for new orders received, shortens the quotation cycle, and adjusts the quotation exchange rate in a timely manner; (2) theCompany carries out forward settlement and sale of foreign exchange for the purpose of hedging, and locks the forward settlementexchange rate in advance to reduce the risk and hedge the exchange rate risk in international business; and (3) The Company willstrengthen its research and analysis of exchange rates, pay attention to changes in the international market environment in real time,and adjust its business strategies in a timely manner to minimize the risk of exchange rate fluctuations.
5. Risk of changes in industry policies and standards and countermeasuresMedical device, which directly affects the life and health safety of users, has been a key supervised industry. In recent years, as Chinafurther deepens the reform of the medical and health system, relevant government departments have introduced a series ofregulations and policies on industry standards, bidding, price formation mechanisms, circulation systems, etc., which have a wide andprofound impact on the development of the medical device industry. Affected by the COVID-19 pandemic, the foreign economicenvironment has been relatively sluggish, which may lead to medical budget cuts, and the price sensitivity of medical products hasincreased, resulting in a risk of further compressing the operating profits. If the Company fails to adapt to profound changes inindustry policies in a timely manner, it may have an impact on the Company’s operations.
6. Risk of not receiving reimbursement for the Medical Investment Project of Winner Medical (Heyuan) andcountermeasuresDue to the planning of the square of Heyuan High-speed Railway Station and the surrounding high-speed railway new town along theJiangxi-Shenzhen High-speed Railway, the“Agreement on Investment and Construction of Medical Combo Kits and CottonHousehold Products Production Project” entered into by and between the Company and the People’s Government of Zijin County,Heyuan City in May 2016 could not be fulfilled. In November 2019, the International Arbitration Court in Ganjiang New Districtissued an “Award” confirming the termination of the “Investment and Construction Agreement of Medical Combo Kits and CottonHousehold Products Production Project”, and the People’s Government of the Zijin County shall compensate the Company foreconomic losses of 550 million yuan, with 50% to be paid by the People’s Government of Zijin County by December 31, 2019 and50% by February 29, 2020. As of the disclosure date of the report, the company has received a land transfer deposit of 3 million yuanand a compensation payment of 319 million yuan returned by the People’s Government of Zijin County. There is a risk that theremaining amount may not be received on time in accordance with the “Award”. The Company is currently closely following up onthe subsequent payment plan of the People’s Government of Zijin County, Heyuan City.
7. Risks of proceeds projects and countermeasures
The Company plans to allocate the proceeds from this issuance to the construction projects of high-end wound dressing productionlines, marketing network, R&D Center and digital management system. The development progress and operation of such projectswill contribute to the Company’s development and profitability in the next few years.Based on the forecast of the future market, the Company has conducted a prudential and sufficient feasibility study anddemonstration of the proceeds investment project. Thanks to the Company’s rich business experience and market foundationaccumulated over the years, it is expected that the proceeds investment project could realize good investment income. However, ifthere are changes in external factors such as the industry market, it cannot rule out that some projects may not be implemented asscheduled or the actual investment returns may be lower than expected. In accordance with changes in the external market and theinternal control and management system of proceeds projects, the Company will strictly control the progress of capital investment invarious projects and keep an eye on the risk of project investment.XII. Registration form of reception, research, communication, interview and other activitiesduring the reporting period
√Applicable □ Not applicable
| Time | Location | Method | Types of | Objects | Main contents | Basic information |
| objects | of discussions and documents provided | index of surveys |
January 22, 2021
| January 22, 2021 | Headquarters conference rooms in Winner Industrial Park | Telephone communication | Institutions | 267 investors including Generali Asset Management and CICC | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
February 19, 2021
| February 19, 2021 | Headquarters conference rooms in Winner Industrial Park | Telephone communication | Institutions | 151 investors including Huashang Fund and Shanghai King Sun Asset Management | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
March 18, 2021
| March 18, 2021 | Winner Medical (Huanggang), Winner Medical (Chongyang), Winner Medical (Jiayu) | Field surveys | Institutions | Investors including Manulife Teda and Hongdao Investment | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
April 20, 2021
| April 20, 2021 | Panorama | Others | Individual | 187 investors including TF Securities and Essence Fund | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
April 28, 2021
| April 28, 2021 | Headquarters conference rooms in Winner Industrial Park | Telephone communication | Institutions | Investors including China Post Fund and Lombarda China Fund | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
May 10, 2021
| May 10, 2021 | Headquarters conference rooms in Winner Industrial Park | Field surveys | Institutions | Investors including GF Securities and Bosera Funds | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
May 14, 2021
| May 14, 2021 | Panorama studio | Others | Individual | Internet investors | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
May 24, 2021
| May 24, 2021 | Headquarters conference rooms in Winner Industrial Park | Telephone communication | Institutions | Investors including Da Cheng Fund and Baoying Fund | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
July 07, 2021
| July 07, 2021 | Headquarters conference rooms in Winner Industrial Park | Telephone communication | Institutions | Investors including Harfor Funds and Beixin Ruifeng Fund | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
August 23, 2021
| August 23, 2021 | Headquarters conference rooms in Huilong Business Center | Others | Institutions | Investors including China Securities and Essence Securities | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
August 24, 2021
| August 24, 2021 | Headquarters conference rooms in Huilong Business Center | Telephone communication | Institutions | 81 investors including GF Securities and BOCOM Schroders | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
August 26, 2021
| August 26, 2021 | Panorama | Others | Individual | Internet investors | Outline of the Company’s business and | For details, please refer to Shenzhen Stock Exchange Interactive |
| operations | (http://irm.cninfo.com.cn) |
October 26, 2021
| October 26, 2021 | Headquarters conference rooms in Huilong Business Center | Telephone communication | Institutions | 180 investors including Rosefinch Securities and China Asset Management | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
November 30,2021
| November 30, 2021 | Panorama | Others | Individual | Internet investors | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
December 01,2021
| December 01, 2021 | Headquarters conference rooms in Huilong Business Center | Telephone communication | Institutions | 49 investors including Rongtong Fund and Ping An Fund | Outline of the Company’s business and operations | For details, please refer to Shenzhen Stock Exchange Interactive (http://irm.cninfo.com.cn) |
Section 4 Corporate Governance
I. Basic State of Corporate GovernanceThe Company strictly complies with the Company Law of the People's Republic of China, the Securities Law of the People'sRepublic of China, the Code of Corporate Governance for Listed Companies, the Shenzhen Stock Exchange GEM Listing Rules, theStandard Operation Guidelines for Listed Companies of Shenzhen Stock Exchange, and other relevant laws and regulationspromulgated by the CSRC and Shenzhen Stock Exchange, and formulates the Articles of Association and other internal control rulesand regulations to standardize the Company's behavior. The governance structure of the Company conforms to the relevant normativedocuments of the CSRC on the governance of listed companies.
1. Shareholders and general meeting of shareholders
In strict accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China,the Rules of Shareholders' Meeting of Listed Companies, the Articles of Association and the Rules of Procedure of Shareholders'Meeting, the Company standardizes the procedures of convening, holding and voting, etc. of the general meeting of shareholders,treats all investors equally, and enables them to fully exercise their rights to ensure the rights and interests of minority shareholders.The Company employs lawyers to attend the general meeting of shareholders as nonvoting delegates and issue legal opinions on theholding and voting procedures of the general meeting of shareholders, fully respecting and safeguarding the legitimate rights andinterests of all shareholders.
2. Company and controlling shareholders, actual controller
The Company has independent and complete main business and independent management ability, independent from the controllingshareholders and actual controllers in personnel, assets, business, management organization and financial accounting system, and canindependently operate, independently manage and independently bear responsibilities and risks. The controlling shareholders andactual controllers of the Company can exercise their rights and undertake corresponding obligations in accordance with the law.During the reporting period, there was no behavior directly or indirectly interfering in the Company's decision-making and businessactivities and using its controlling position to infringe on the interests of other shareholders beyond the authorization of the generalmeeting of shareholders and the board of directors, which had no adverse impact on the corporate governance structure andindependence.
3. Directors and board of directors
The directors of the Company do not have the circumstances that they are not allowed to be directors of the Company as stipulated inArticle 146 of the Company Law. Their appointment and removal strictly comply with the approval procedures of the board ofdirectors and the general meeting of shareholders, and there is no conflict with relevant laws, regulations or the Articles ofAssociation. All directors work strictly and diligently during their tenure, can continuously pay attention to the Company's operatingconditions, actively participate in relevant training, and improve the standard operation level; actively participate in the boardmeeting, give full play to their own professional expertise, make prudent decisions and safeguard the interests of the Company andthe majority of shareholders.The convening and holding procedures of the board meeting of the Company meet the requirements of relevant regulations; thecontents of previous board meeting minutes are true, accurate, complete and under safe preservation; the resolutions of the meetingsare fully, accurately and timely disclosed. Under the board of directors, there is a strategy committee, a nomination committee, aremuneration and assessment committee and an audit committee.
4. Supervisors and board of supervisors
The supervisors of the Company do not have the circumstances that they are not allowed to be supervisors of the Company asstipulated in Article 146 of the Company Law. Their qualifications meet the relevant requirements of the Articles of Association. Theprocedures for convening, holding and voting of the meetings of the board of supervisors of the Company conform to the Rules ofProcedure of Board of Supervisors.The supervisors of the Company are able to exercise the functions and powers of the board of supervisors and fulfill their dutiesdiligently.
5. Performance evaluation and incentive and restraint mechanisms
Through performance evaluation, the Company can effectively make a comprehensive evaluation on each employee, and furtherunderstands each employee's work ability and expertise, so as to effectively adjust the appropriate position and achieve the goal ofperformance evaluation. The Company is gradually improving its performance evaluation mechanism. The remuneration of seniorand middle management is linked to the Company's operating performance indicators. The Company has established an enterpriseperformance evaluation and incentive system. The performance evaluation standards and evaluation procedures of directors,supervisors and senior managers are fair and transparent. Their income is linked to the Company's operating performance. Theappointment of senior managers is open and transparent, complying with the provisions of laws and regulations.
6. Information disclosure and transparency
During the reporting period, the Company disclosed the Company's information truthfully, accurately, completely, timely and fairlyin strict accordance with the requirements of relevant laws and regulations, Articles of Association and Management System ofInformation Disclosure Affairs. The Company has designated China Securities Journal, Shanghai Securities News, Securities Times
and Securities Daily as the designated paper media for information disclosure of the Company, and http://www.cninfo.com.cn is thewebsite specified for the information disclosure to ensure that all shareholders have fair access to the Company’s information.
7. Investor relations management
In accordance with the requirements of relevant laws and regulations and Investor Relations Management System, the Companydesignates the secretary of the board of directors as the person in charge of investor relations management, responsible forcoordinating investor relations, receiving shareholders' visits, answering investors' inquiries, providing investors with the informationdisclosed by the Company, etc. The Company responds to investors' inquiries through telephone, e-mail, investor relations interactiveplatform, investor reception day and other forms, which strengthens information communication, promotes benign interaction withinvestors, and effectively improves the transparency of the Company.
8. Stakeholder
The Company fully respects and safeguards the legitimate rights and interests of relevant stakeholders, realizes the coordination andbalance of interests of the shareholders, employees, doctors and patients, society and other parties, pays attention to environmentalprotection and actively participates in public welfare undertakings while realizing the sustainable and healthy development of theCompany and the interests of shareholders.
9. Establishment and implementation of internal audit system
An audit committee is set up under the board of directors to establish an internal audit system, and is responsible for thecommunication, supervision, meeting organization and verification of the Company's internal and external audit. The Internal AuditDepartment under the audit committee is the daily office. Under the leadership of the audit committee, it independently exercises itsfunctions and powers to inspect and supervise the establishment and implementation of the Company's internal control system, theauthenticity and integrity of the Company's financial information, and the efficiency and effect of business activities.
Whether there is significant difference between the actual situation of corporate governance and the laws, administrative regulationsand provisions on listed corporate governance issued by China Securities Regulatory Commission
□Yes √No
There is no significant difference between the actual situation of corporate governance and the laws, administrative regulations andprovisions on listed corporate governance issued by China Securities Regulatory Commission
II. Independence of Company from its controlling shareholders and actual controller inguaranteeing the Company's assets, personnel, finance, institutions and businessSince its establishment, the Company has standardized its operation in accordance with the Company Law, Securities Law and otherrelevant laws and regulations as well as the requirements of the Articles of Association, established and improved the corporategovernance structure, completely separated from the existing shareholders in business, assets, personnel, organizations and finance,and has a complete business system and the ability to operate independently in the market.
1. Asset independence
The Company has independent and complete assets with clear ownership, independent production system, auxiliary productionsystem and supporting facilities, and has legal ownership of plants, land, equipment, trademarks, patents, non-patented technologyand other assets related to production and operation. It has complete control over all the assets of the Company, and there is nobehavior of controlling shareholders and actual controllers occupying the assets of the Company.
2. Personnel independence
The Company has signed labor contracts with its employees, has independent labor, personnel, salary and welfare systems, andmaintains independence with its controlling shareholders, actual controllers and other enterprises under their control. The Companyhas established a sound corporate governance structure, and the directors, supervisors and senior managers are legally selected instrict accordance with the Company Law, Articles of Association and other relevant provisions. The general manager, deputy generalmanager, financial chief, secretary of the board of directors and other senior managers of the Company do not hold any otherpositions except directors, supervisors and limited partners in the controlling shareholders, actual controllers and other enterprisescontrolled by them, and do not receive salary in the controlling shareholders, actual controllers and other enterprises controlled bythem. The financial personnel of the Company do not work part-time in the controlling shareholders, actual controllers and otherenterprises controlled by them.
3. Financial independence
The Company has set up an independent financial department, equipped with full-time financial personnel, and has established anindependent financial accounting system. The Company can make financial decisions independently, and has a standardized financialaccounting system and internal control system, such as internal financial management system for branches and subsidiaries. There isno situation of controlling shareholders interfering in the use of the Company's funds. The Company has an independent bankaccount and does not share the bank account with the controlling shareholders, actual controllers and other enterprises controlled by
them. As an independent tax payer, the Company makes tax returns and fulfills its payment obligations independently in accordancewith the law. There is no situation of mixed tax payment with the controlling shareholders, actual controllers and other enterprisescontrolled by them. The financial operation of the Company is independent of the controlling shareholders, actual controllers andother enterprises controlled by them.
4. Organization independence
In strict accordance with the Company Law, Articles of Association and other relevant provisions, the Company has established andimproved the general meeting of shareholders, the board of directors, the board of supervisors, the management department and thecorresponding rules of procedure of the three meetings, and formed a perfect corporate governance structure and standardizedoperation system. According to the development needs of production and operation, the Company has set up corresponding officeand production and operation organizations, and independently exercise the operating management authority, and has completeprocurement, R & D, production, sales systems and supporting departments. The Company's production, operation and office arestrictly separated from the controlling shareholders, actual controllers and other enterprises controlled by them, and there is no mixedoperation or joint office with the controlling shareholders, actual controllers and other enterprises controlled by them.
5. Business independence
The Company has the corresponding qualifications required for operation, independent and complete business system, informationsystem and management system, etc. necessary to engage in operating business, and independent and complete R & D, productioncapacity, procurement and sales business systems. The business of the Company is independent of the controlling shareholders,actual controllers and other enterprises controlled by them. There is no dependence on the controlling shareholders, actual controllersand other enterprises controlled by them. There is no horizontal competition or unfair related transaction with the controllingshareholders, actual controllers and other enterprises controlled by them.III. Horizontal competition
□ Applicable √ Not applicable
IV. Information about the annual general meeting of shareholders and extraordinary generalmeeting of shareholders held during the reporting period
1. General meeting of shareholders during the reporting period
| Meeting session | Meeting type | Investor participation proportion | Convening date | Date of disclosure | Resolutions of the meeting |
2020 AnnualGeneral Meetingof Shareholders
| 2020 Annual General Meeting of Shareholders | Annual general meeting of shareholders | 89.42% | May 10, 2021 | May 11, 2021 | Proposal on the Company’s 2020 Annual Report and Its Abstract, Proposal on the Company’s 2020 Annual Profit Distribution Plan |
The 1st
ExtraordinaryGeneral Meetingof Shareholders in
2021
| The 1st Extraordinary General Meeting of Shareholders in 2021 | Extraordinary general meeting of shareholders | 89.75% | July 13, 2021 | July 14, 2021 | Proposal on the General Election of the Board of Directors of the Company and the Nomination of Non-independent Director Candidates for the Third Board of Directors, Proposal on the General Election of the Board of Directors of the Company and the Nomination of Independent Director Candidates for the Third Board of Directors, and Proposal on the General Election of the Board of Supervisors of the Company and the Nomination of Shareholder Representative Supervisor Candidates for the Third Board of Directors |
2. The preferred shareholders with voting rights restored request an extraordinary general meeting ofshareholders
□ Applicable √ Not applicable
V. The company has a voting rights differential arrangement
□ Applicable √ Not applicable
VI. Corporate governance in VIE
□ Applicable √ Not applicable
VII. Directors, Supervisors and Senior Management
1. Basic information
| Name | Position | Status of service | Gender | Age | Start date of tenure | End date of tenure | Number of shares held at the beginning of the period (shares) | Number of shares increased in current period (shares) | Number of shares decreased in current period (shares) | Other increase and decrease (shares) | Number of shares held at the end of the period (shares) | Causes for change in shares |
LiJianquan
| Li Jianquan | Chairman and general manager | Incumbent | Male | 65 | May 18, 2015 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
FangXiuyuan
| Fang Xiuyuan | Director, deputy general manager and chief financial officer | Incumbent | Male | 54 | May 18, 2015 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
XuXiaodan
| Xu Xiaodan | Director | Incumbent | Female | 35 | May 18, 2015 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
GuoZhenwei
| Guo Zhenwei | Director | Incumbent | Male | 38 | June 28, 2018 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
PengJianfeng
| Peng Jianfeng | Independent director | Incumbent | Male | 61 | July 13, 2021 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
Xie
Jiawei
| Xie Jiawei | Independent director | Incumbent | Female | 49 | July 13, 2021 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
Key Ke
Liu
| Key Ke Liu | Independent director | Incumbent | Male | 58 | July 13, 2021 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
ZhangTingting
| Zhang Tingting | Chairman of the Board of Supervisors | Incumbent | Female | 36 | July 13, 2021 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
Wang
Ying
| Wang Ying | Supervisor | Incumbent | Female | 40 | May 18, 2015 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
Liu Hua
| Liu Hua | Employee representative supervisor | Incumbent | Female | 49 | July 13, 2021 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
ChenHuixuan
| Chen Huixuan | Deputy general manager and secretary to the board of directors | Incumbent | Female | 40 | May 18, 2015 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
Zhang Li
| Zhang Li | Deputy general manager | Incumbent | Female | 44 | July 13, 2021 | July 12, 2024 | 0 | 0 | 0 | 0 | 0 | N/A |
Liang
| Liang | Independen | Outgoin | Male | 52 | May 18, | July 13, | 0 | 0 | 0 | 0 | 0 | N/A |
| Wenzhao | t director | g | 2015 | 2021 |
ZhouXiaoxiong
| Zhou Xiaoxiong | Independent director | Outgoing | Male | 61 | May 18, 2015 | July 13, 2021 | 0 | 0 | 0 | 0 | 0 | N/A |
Bi Qun
| Bi Qun | Independent director | Outgoing | Female | 52 | May 18, 2015 | July 13, 2021 | 0 | 0 | 0 | 0 | 0 | N/A |
LiuWeiwei
| Liu Weiwei | Chairman of the Board of Supervisors | Outgoing | Male | 44 | May 18, 2015 | July 13, 2021 | 0 | 0 | 0 | 0 | 0 | N/A |
YeYangjing
| Ye Yangjing | Supervisor | Outgoing | Female | 41 | June 28, 2018 | July 13, 2021 | 0 | 0 | 0 | 0 | 0 | N/A |
YinWenling
| Yin Wenling | Deputy general manager | Outgoing | Male | 49 | June 28, 2018 | July 13, 2021 | 0 | 0 | 0 | 0 | 0 | N/A |
Total
| Total | -- | -- | -- | -- | -- | -- | 0 | 0 | 0 | 0 | 0 | -- |
Dismissal of directors, supervisors and senior management in the term of office during the reporting period
□Yes √No
Change of directors, supervisors and senior management
√Applicable □ Not applicable
| Name | Position held | Type | Date | Reasons |
Peng Jianfeng
| Peng Jianfeng | Independent director | Elected | July 13, 2021 | General election in the Board of Directors |
Xie Jiawei
| Xie Jiawei | Independent director | Elected | July 13, 2021 | General election in the Board of Directors |
Key Ke Liu
| Key Ke Liu | Independent director | Elected | July 13, 2021 | General election in the Board of Directors |
Zhang Tingting
| Zhang Tingting | Chairman of the Board of Supervisors | Elected | July 13, 2021 | General election in the Board of Supervisors |
Liu Hua
| Liu Hua | Employee representative supervisor | Elected | July 13, 2021 | Elected in the congress of workers and staff |
Zhang Li
| Zhang Li | Deputy general manager | Appointed | July 13, 2021 | Appointed by the Board of Directors |
Liang Wenzhao
| Liang Wenzhao | Independent director | Leave office at the expiration of the term of office | July 13, 2021 | General election in the Board of Directors |
Zhou Xiaoxiong
| Zhou Xiaoxiong | Independent director | Leave office at the expiration of the term of office | July 13, 2021 | General election in the Board of Directors |
Bi Qun
| Bi Qun | Independent director | Leave office at the expiration of the term of office | July 13, 2021 | General election in the Board of Directors |
Liu Weiwei
| Liu Weiwei | Chairman of the Board of Supervisors | Leave office at the expiration of the term of office | July 13, 2021 | General election in the Board of Supervisors |
Ye Yangjing
| Ye Yangjing | Supervisor | Leave office at the expiration of the term of office | July 13, 2021 | General election in the Board of Supervisors |
Yin Wenling
| Yin Wenling | Deputy general manager | Leave office at the expiration of | July 13, 2021 | General election in the Board of Directors |
2. Service status
Professional background, main work experience and main responsibilities currently in the Company of current directors, supervisorsand senior management of the Company
(1) Board of directors
Mr. Li Jianquan, born in 1957, Chinese, a permanent resident of the Hong Kong Special Administrative Region. College degree. Hecreated three brands of “Winner”, “Purcotton” and “PureH2B” and served as president of the medical dressings branch of ChinaChamber of Commerce for Import and Export of Medicines and Health Products, and honorary president of Alumni Association ofWuhan Textile University. In 2020, he was awarded the honorary title of the 40th anniversary innovative and pioneering figures andadvanced figures in Shenzhen Special Economic Zone by the Shenzhen municipal government, “Guangdong Advanced Individual forFighting the COVID-19 Pandemic” by the People's Government of Guangdong Province and “Tribute to 40 Years of SpecialEconomic Zone, Salutes 40 Brand People” by Federation of Shenzhen Industries.Mr. Fang Xiuyuan, born in August 1968, Chinese, without permanent residency abroad; college degree, Chinese Certified PublicAccountant. From July 1988 to April 1998, he served as the accountant and chief of Finance Department of Hubei Medical andHealth Products Import and Export Corporation; from May 1998 to January 1999, he was the chief financial officer of ZhuhaiPowerbridge Technologies Co., Ltd.; since 2000, he has been the director, deputy general manager and chief financial officer ofWinner Medical Co., Ltd.. At present, Mr. Fang Xiuyuan also serves as the director of Shenzhen PurCotton Technology Co., Ltd.,Shenzhen Qianhai Purcotton E-commerce Co., Ltd., Winner Medical (Huanggang) Co., Ltd., Winner Medical (Chongyang) Co., Ltd.,Winner Medical (Jiayu) Co., Ltd., Winner Medical (Jingmen) Co., Ltd., Yichang Winner Medical Textile Co., Ltd., Winner Medical(Tianmen) Co., Ltd., Winner Medical (Hong Kong) Limited, Chengdu Winner Likang Medical Products Co., Ltd., Winner Medical(Wuhan) Co., Ltd., Shenzhen PureH2B Technology Co., Ltd.; the executive partner of Xiamen Leyuan Investment Partnership(limited partnership), member of the Shenzhen 7th CPPCC, and vice chairman of Federation of Industry and Commerce of LonghuaDistrict, Shenzhen City.Ms. Xu Xiaodan, born in 1987, Chinese, without permanent residency abroad; bachelor degree. She joined the company in 2010;from August 2013 to January 2015, she was the purchasing manager of Procurement Department of Shenzhen Purcotton Ltd.; fromJanuary 2015 to January 2020, she served as the director of Commodity Center of Shenzhen Purcotton Ltd.; from May 2015 to now,she has been a director of Winner Medical Co., Ltd.; from February 2020 to now, she has been the director of Strategic PlanningCenter of Winner Medical Co., Ltd. At present, Ms. Xu Xiaodan is also a director of Winner Medical (Heyuan) Co., Ltd. and WinnerMedical (Wuhan) Co., Ltd.Mr. Guo Zhenwei, born in 1984, Chinese, without permanent residency abroad; bachelor degree of Central University of Financeand Economics, EMBA master degree of China Europe International Business School. From July 2007 to September 2009, he wassenior auditor of Deloitte Touche Tohmatsu Limited; from September 2009 to July 2010, he was a researcher of China InternationalCapital Corporation Limited; from July 2010 to now, he has been working in Sequoia Capital China and is currently the managingdirector; from June 2018 to now, he has been a director of Winner Medical Co., Ltd. At present, Mr. Guo Zhenwei is also a directorof Shijiazhuang Junlebao Dairy Co., Ltd., Shanghai Baiqiu Network Technology Co., Ltd., Lium Group Co., Ltd., Hangzhou DahitiScience & Technology Co., Ltd., Deqing Jiajun Beverage Co., Ltd., Sichuan Vanov New Material Co. Ltd., Shanghai ShouquanzhaiE-commerce Co., Ltd., LOHO Holding Inc., Dynamics China Holding Company, Shanghai Ruishu Electronic Commerce Co., Ltd.,Genki Forest Technology Group Holdings Limited and a supervisor of Shanghai Qiyao Automobile Technology Co., Ltd.Mr. Guo Zhenwei, born in 1984, Chinese, without permanent residency abroad; bachelor degree of Central University of Financeand Economics, EMBA master degree of China Europe International Business School. From July 2007 to September 2009, he wassenior auditor of Deloitte Touche Tohmatsu Limited; from September 2009 to July 2010, he was a researcher of China InternationalCapital Corporation Limited; from July 2010 to now, he has been working in Sequoia Capital China and is currently the managingdirector; from June 2018 to now, he has been a director of Winner Medical Co., Ltd. At present, Mr. Guo Zhenwei is also a directorof Deqing Jiajun Beverage Co., Ltd., Sichuan Vanov New Material Co. Ltd., Shanghai Shouquanzhai E-commerce Co., Ltd., LOHOHolding Inc., New Dynamics China Holding Company, Shijiazhuang Junlebao Dairy Co., Ltd., Lium Group Co., Ltd., HangzhouDahiti Science & Technology Co., Ltd., Genki Forest Technology Group Holdings Limited, Shanghai Ruishu Electronic CommerceCo., Ltd., Shanghai Huaqiao Catering Management Co., Ltd., Shanghai Wanwuyouyang Food and Beverage Management Co., Ltd.and Haocaitou Fujian Food Co., Ltd. and a supervisor of Pucheng Dairy (Group) Co., Ltd.Mr. Key Ke Liu, born in 1964, American, Bachelor and master degree in Chemical Engineering of Northwest University, doctorateof City University of New York, USA, Master of Management of Rensselaer Polytechnic Institute, USA, foreign academician ofAustralian National Academy of Engineering. He was a chief scientist of GE Global Research, a director of Power Environment andEnergy Research Center (PEER) of California Institute of Technology, a director of International Pittsburgh Coal Conference (PCC)Organization, member of PCC Organization and independent director of Konfoong Materials International Co., Ltd and has workedfor many years with well-known multinational companies such as Exxon-Mobil and UTC. He is currently the dean of School ofInnovation and Entrepreneurship, President of Clean Energy Research Institute and chair professor of Department of Chemistry,Southern University of Science and Technology, standing director and deputy director of Center for China and Globalization (CCG),director of Carnegie–Tsinghua Center, director of Puritek Company Ltd. and independent director of Shenzhen Huicheng InformationTechnology Co., Ltd. and Hunan YUSSEN Energy Technology Co., Ltd. After returning to China, he was appointed deputy Directorand Chief Technology Officer (CTO) of National Institute of Clean-and-Low-Carbon Energy. He was awarded the Top Fifty China
Overseas-educated Scholars in Innovation and Entrepreneurship in 2015, Pitt AWARD in 2013 and Emerald Honors SpecialRecognition Award in 2006.Mr. Peng Jianfeng, born in 1961, Chinese, without permanent residency abroad; master degree of Renmin University of China.Since 1986, he has successively served as lecturer, associate professor and professor in the School of Labor and Human Resources ofRenmin University of China; previously, he had successively served as the independent director of Telling TelecommunicationHolding Co., Ltd., Sunward Intelligent Machinery Co., Ltd., Goertek Co., Ltd., Chinese Universe Publishing and Media Group Co.,Ltd., Haier Smart Home Co., Ltd., China Merchants Shekou Industrial Zone Holdings Co., Ltd. and Chow Tai Seng Jewellery Co.,Ltd.; currently the independent director of Jinko Power Technology Co., Ltd., non-independent director of Hytera CommunicationsCorporation Limited, director of CCB Trust Co., Ltd., executive director of China Stone Management Consulting Ltd. and executivedirector of China Stone (Beijing) Corporation Culture Management Consulting Co., Ltd. Mr. Peng Jianfeng has been deeply involvedin enterprises for a long time to provide consulting services. He has been employed as senior management consultant and expertgroup leader by Shenzhen Huawei, Guangdong Midea Group, Shandong Liuhe Group and ENN Group, etc. The expert team led byhim has provided consulting services for hundreds of famous enterprises and the management consulting team led by him has createdthe Huawei Basic Law, Charter of OCT, TCL Fights Scale with Speed, The Third Road of Midea, Samsung (China) Culture, MeagerProfit Management and Service Marketing of Shandong Liuhe Group, Three Mechanisms and Six Systems of Human Resources ofBaisha Group, Joint Programme of Action of Dongfeng Nissan, Lenovo Cultural Studies and Jingdong Culture. He was awarded the"Top Ten Figures" of the second China Human Resource Management Award and the "Top Ten Respectable Management ConsultingExperts" by the Management Consulting Committee of China Enterprise Confederation.Ms. Xie Jiawei, born in 1973, Chinese, without permanent residency abroad; bachelor degree, certified public accountant and taxaccountant. Previously, she successively served as deputy director of Beijing Zhongtian Huazheng Certified Public Accountants Co.,Ltd., deputy director of BDO China Shu Lun Pan Certified Public Accountants LLP Shenzhen Branch, vice chairman of the 6thCouncil of Shenzhen Institute of Certified Public Accountants, and independent director of Shenzhen Guangju Energy Co.,Ltd.,Shenzhen Topband Co.,Ltd., Guangdong Xinhui Meida Nylon Co., Ltd., and Shenzhen Dynanonic Co., Ltd. He is currently a partnerof Dahua Certified Public Accountants Co., Ltd., a member of the 6th Council of Shenzhen Institute of Certified Public Accountants,a core member of Vanho Securities, an off-campus supervisor for graduate students of Shenzhen University, and an independentdirector of Han's Laser Technology Industry Group Co., Ltd. and Shenzhen Heungkong Holding Co., Ltd.
(2) Board of Supervisors
Ms. Zhang Tingting, born in 1986, Chinese, without permanent residency abroad; bachelor degree. She joined the company inNovember 2010 and served as the manager of the Supplier Management Department, Domestic Trade Drugstore ManagementDepartment, Distributor Management Department, Product Development Department and E-commerce Commodity Departmentsuccessively from July 2014 to January 2021. He is currently the category manager of the company, a member of longhua Street CPCWorking Committee on Non-Public Economic and Social Organizations, secretary of the Party Committee, chairman of the Women'sFederation, secretary of the Youth League committee, and Party representative of Longhua District. He has been awarded the title of"Shenzhen Outstanding Communist Party Member" by Shenzhen Municipal Committee of CPC, and the title of "Shenzhen AdvancedIndividual for Fighting the COVID-19 Pandemic" jointly awarded by Shenzhen Municipal Committee of CPC and ShenzhenMunicipal People's Government.Ms. Wang Ying, born in 1982, Chinese, without permanent residency abroad; bachelor degree. She joined the Company in 2005.From January 2013 to May 2014, she was the manager of Foreign Trade Department of Winner Industry (Shenzhen) Co., Ltd.; fromMay 2014 to July 2016, she served as deputy director of International Trade Department of Winner Medical Co., Ltd. and itspredecessor; since May 2015, she has been the employee supervisor of Winner Medical Co., Ltd.; from July 2016 to December 2017,she was the director of Marketing Department of Winner Medical Co., Ltd.; from September 2017 to February 2018, she was therotating CEO of Winner Medical Co., Ltd.; since January 2018, she has been the director and deputy general manager of ShenzhenPureH2B Technology Co., Ltd. Currently, she also serves as executive partner of Xiamen Yutong Investment Partnership (limitedpartnership) and supervisor of Winner Medical (Heyuan) Co., Ltd.Ms. Liu Hua, born in 1973, Chinese, without permanent residency abroad; MBA and Master Degree of Tongji University. FromApril 2004 to September 2009, she was the Manager of International Trade Department of Winner Industry (Shenzhen) Co., Ltd.;from September 2009 to November 2011, she served as the Director of Operation Center of Shenzhen Purcotton Ltd.; fromNovember 2011 to April 2021, she served as Deputy General Manager of Shenzhen Purcotton Ltd.; since April 2021, she has beenthe vice president of Shenzhen Purcotton Ltd.
(3) Other senior management
Ms. Chen Huixuan, born in 1982, Chinese, without permanent residency abroad; master degree in Finance, University of Glasgow,UK. She has participated in the qualification training of the Board Secretary of Shenzhen Stock Exchange and obtained theQualification Certificate of Board Secretary. From February 2007 to June 2009, she was an analyst assistant of Brean Murray, Carret& Co.; from September 2009 to May 2015, she served as a manager of Investment Management Department of Winner Industry(Shenzhen) Co., Ltd.; since May 2015, she has been the deputy general manager and secretary of the board of directors of WinnerMedical Co., Ltd. At present, she also serves as executive partner of is also the executive partner of Xiamen Huikang InvestmentPartnership (limited partnership) and director of Chengdu Winner Likang Medical Products Co., Ltd. Ms. Chen Huixuan is currentlya member of Investor Relations Management Committee of Shenzhen Public Companies Association and the 18th New Fortune GoldBoard Secretary.Ms. Zhang Li, born in 1978, Chinese, without permanent residency abroad; bachelor degree. She joined the company in September
2010 and served as Medical Business Marketing Director, R&D Director, Overseas Marketing Director, sales director and rotatingCEO from September 2010 to June 2021. Currently, she is in charge of marketing of the medical business of the company.
Service status in the shareholder unit
√Applicable □ Not applicable
| Name of staff | Shareholder unit name | Position held in shareholder unit | Start date of tenure | End date of tenure | Whether to receive remuneration or allowance in the shareholder unit |
Li Jianquan
| Li Jianquan | Winner Group Limited | Director | April 08, 2003 | No |
Fang Xiuyuan
| Fang Xiuyuan | Xiamen Leyuan Investment Partnership (Limited Partnership) | Executive partner | May 02, 2013 | No |
Chen Huixuan
| Chen Huixuan | Xiamen Huikang Investment Partnership (Limited Partnership) | Executive partner | May 02, 2013 | No |
Wang Ying
| Wang Ying | Xiamen Yutong Investment Partnership (Limited Partnership) | Executive partner | May 02, 2013 | No |
Description ofservice statusin theshareholderunit
| Description of service status in the shareholder unit | None |
Service status in other unit
√Applicable □ Not applicable
| Name of staff | Other unit name | Position held in other unit | Start date of tenure | End date of tenure | Whether to receive remuneration or allowance in other unit |
Li Jianquan
| Li Jianquan | Glory Ray Holdings Limited | Director | April 11, 2012 | No |
Li Jianquan
| Li Jianquan | Glory Ray Limited | Director | May 04, 2012 | No |
Li Jianquan
| Li Jianquan | Shenzhen Purcotton Technology Co., Ltd. | Chairman, general manager | July 12, 2009 | No |
Li Jianquan
| Li Jianquan | Shenzhen Qianhai Purcotton E-commerce Co., Ltd. | Chairman | July 21, 2015 | No |
Li Jianquan
| Li Jianquan | Winner Medical Malaysia Co., Ltd. | Director | July 17, 2013 | No |
Li Jianquan
| Li Jianquan | Winner Medical (Hong Kong) Limited | Director | January 14, 2008 | No |
Li Jianquan
| Li Jianquan | Shenzhen PureH2B Technology Co., Ltd. | Chairman, general manager | January 25, 2018 | No |
Li Jianquan
| Li Jianquan | Shenzhen Cotton Lining Technology Innovation Co., Ltd. | Chairman | July 09, 2019 | No |
Li Jianquan
| Li Jianquan | Fanyu Innovation Holding (Shenzhen) Co., Ltd. | Supervisor | September 18, 2021 | No |
Fang Xiuyuan
| Fang Xiuyuan | Shenzhen Purcotton Technology Co., Ltd. | Director | July 12, 2009 | No |
Fang Xiuyuan
| Fang Xiuyuan | Shenzhen Qianhai Purcotton E-commerce Co., Ltd. | Director | July 21, 2015 | No |
Fang Xiuyuan
| Fang Xiuyuan | Winner Medical (Huanggang) Co., Ltd. | Director | January 14, 2005 | No |
Fang Xiuyuan
| Fang Xiuyuan | Huanggang Winner Cotton Industry Co., Ltd. | Director | October 18, 2010 | No |
Fang Xiuyuan
| Fang Xiuyuan | Winner Medical (Chongyang) Co., Ltd. | Director | November 13, 2001 | No |
Fang Xiuyuan
| Fang Xiuyuan | Winner Medical (Jiayu) Co., Ltd. | Director | February 20, 2001 | No |
Fang Xiuyuan
| Fang Xiuyuan | Winner Medical (Jingmen) Co., Ltd. | Director | December 15, 1995 | No |
Fang Xiuyuan
| Fang Xiuyuan | Yichang Winner Medical Textile Co., Ltd. | Director | April 22, 1999 | No |
| Fang Xiuyuan | Winner Medical (Tianmen) Co., Ltd. | Director | February 23, 2001 | No |
Fang Xiuyuan
| Fang Xiuyuan | Winner Medical (Heyuan) Co., Ltd. | Director | May 18, 2016 | No |
Fang Xiuyuan
| Fang Xiuyuan | Winner Medical (Wuhan) Co., Ltd. | Director | January 23, 2017 | No |
Fang Xiuyuan
| Fang Xiuyuan | Winner Medical (Hong Kong) Limited | Director | January 14, 2008 | No |
Fang Xiuyuan
| Fang Xiuyuan | Chengdu Winner Likang Medical Products Co., Ltd. | Director | May 31, 2009 | No |
Fang Xiuyuan
| Fang Xiuyuan | Shenzhen PureH2B Technology Co., Ltd. | Director | January 25, 2018 | No |
Fang Xiuyuan
| Fang Xiuyuan | Shenzhen Cotton Lining Technology Innovation Co., Ltd. | Director | July 09, 2019 | No |
Xu Xiaodan
| Xu Xiaodan | Winner Medical (Heyuan) Co., Ltd. | Director | May 18, 2016 | No |
Xu Xiaodan
| Xu Xiaodan | Winner Medical (Wuhan) Co., Ltd. | Director | January 23, 2017 | No |
Guo Zhenwei
| Guo Zhenwei | Sequoia Capital China | Director, general manager | October 01, 2010 | Yes |
Guo Zhenwei
| Guo Zhenwei | Deqing Jiajun Beverage Co., Ltd. | Director | April 22, 2015 | No |
Guo Zhenwei
| Guo Zhenwei | Sichuan Vanov New Material Co. Ltd. | Director | December 05, 2017 | No |
Guo Zhenwei
| Guo Zhenwei | Shanghai Shouquanzhai E-commerce Co., Ltd. | Director | July 13, 2018 | No |
Guo Zhenwei
| Guo Zhenwei | LOHO Holding Inc. | Director | July 02, 2018 | No |
Guo Zhenwei
| Guo Zhenwei | New Dynamics China Holding Company | Director | September 02, 2019 | No |
Guo Zhenwei
| Guo Zhenwei | Shijiazhuang Junlebao Dairy Co., Ltd. | Director | March 16, 2020 | No |
Guo Zhenwei
| Guo Zhenwei | Lium Group Co., Ltd. | Director | January 14, 2020 | No |
Guo Zhenwei
| Guo Zhenwei | Hangzhou Dahiti Science & Technology Co., Ltd. | Director | May 21, 2020 | No |
Guo Zhenwei
| Guo Zhenwei | Genki Forest Technology Group Holdings Limited | Director | December 01, 2020 | No |
Guo Zhenwei
| Guo Zhenwei | Shanghai Ruishu Electronic Commerce Co., Ltd. | Director | August 26, 2020 | No |
Guo Zhenwei
| Guo Zhenwei | Shanghai Wanwuyouyang Food and Beverage Management Co., Ltd. | Director | April 08, 2021 | No |
Guo Zhenwei
| Guo Zhenwei | Shanghai Huaqiao Catering Management Co., Ltd. | Director | July 05, 2021 | No |
Guo Zhenwei
| Guo Zhenwei | Haocaitou Fujian Food Co., Ltd. | Director | March 30, 2020 | No |
Guo Zhenwei
| Guo Zhenwei | Pucheng Dairy (Group) Co., Ltd. | Supervisor | March 12, 2021 | No |
Key Ke Liu
| Key Ke Liu | Southern University of Science and Technology | College Dean and Chair Professor | February 01, 2016 | Yes |
Key Ke Liu
| Key Ke Liu | Shenzhen Huicheng Information Technology Co., Ltd. | Independent director | July 27, 2016 | Yes |
Key Ke Liu
| Key Ke Liu | Puritek Company Ltd. | Director | January 01, 2019 | Yes |
Key Ke Liu
| Key Ke Liu | Carnegie–Tsinghua Center | Member of council | January 01, 2015 | Yes |
Key Ke Liu
| Key Ke Liu | International Pittsburgh Coal Conference Organization | Member of council | January 01, 2015 | Yes |
Key Ke Liu
| Key Ke Liu | Zhejiang University | Honorary Professor and doctorial tutor | January 01, 2014 | Yes |
Key Ke Liu
| Key Ke Liu | Center for China and Globalization | Vice chairman | January 01, 2012 | Yes |
Peng Jianfeng
| Peng Jianfeng | Renmin University of China | Professor | September 01, 1996 | Yes |
Peng Jianfeng
| Peng Jianfeng | Jinko Power Technology Co., Ltd. | Independent director | June 29, 2017 | Yes |
Peng Jianfeng
| Peng Jianfeng | Hytera Communications Corporation Limited | Director | December 06, 2019 | Yes |
Peng Jianfeng
| Peng Jianfeng | CCB Trust Co., Ltd. | Director | March 25, 2020 | Yes |
Peng Jianfeng
| Peng Jianfeng | China Stone Management Consulting Ltd. | Executive director | January 12, 2006 | No |
Peng Jianfeng
| Peng Jianfeng | Hunan Happy Times Network Technology Co., Ltd. | Director | December 31, 2015 | No |
| Peng Jianfeng | Siwod Education Technology Co., Ltd. | Director | January 17, 2018 | No |
Peng Jianfeng
| Peng Jianfeng | Jiangxi Siwod Commercial Development Co., Ltd. | Director | November 18, 2014 | No |
Peng Jianfeng
| Peng Jianfeng | China Stone (Beijing) Corporation Culture Management Consulting Co., Ltd. | Executive director, general manager | November 16, 2004 | No |
Peng Jianfeng
| Peng Jianfeng | China Stone Human Resource Consulting Co., Ltd. | Executive director | October 30, 2003 | No |
Peng Jianfeng
| Peng Jianfeng | Hangzhou China Stone Management Consulting Co., Ltd. | Director | May 06, 2009 | No |
Peng Jianfeng
| Peng Jianfeng | Beijing Ice Smart Technology Co., Ltd. | Director | June 01, 2012 | No |
Peng Jianfeng
| Peng Jianfeng | China Stone Hunting Network Technology Co., Ltd. | Supervisor | July 09, 2019 | No |
Peng Jianfeng
| Peng Jianfeng | China Stone Human Resources Management Services Co., Ltd. | Supervisor | April 21, 2016 | No |
Peng Jianfeng
| Peng Jianfeng | Beijing 51 Newbie Education Technology Co., Ltd. | Supervisor | November 13, 2015 | No |
Xie Jiawei
| Xie Jiawei | Dahua Certified Public Accountants Co., Ltd. Shenzhen Branch | Partner | May 04, 2010 | Yes |
Xie Jiawei
| Xie Jiawei | Han's Laser Technology Industry Group Co., Ltd. | Independent director | June 28, 2017 | Yes |
Xie Jiawei
| Xie Jiawei | Shenzhen Heungkong Holding Co., Ltd. | Independent director | May 06, 2016 | Yes |
Wang Ying
| Wang Ying | Shenzhen PureH2B Technology Co., Ltd. | Director, deputy general manager | January 25, 2018 | No |
Wang Ying
| Wang Ying | Winner Medical (Heyuan) Co., Ltd. | Supervisor | May 18, 2016 | No |
Liu Hua
| Liu Hua | Shenzhen Purcotton Technology Co., Ltd. | Director | January 05, 2015 | No |
Description ofservice statusin other unit
| Description of service status in other unit | None |
Punishment of current directors, supervisors and senior management of the Company and those who left during the reporting periodby securities regulators in recent three years
□ Applicable √ Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision making procedures, determination basis and actual payment of remuneration of directors, supervisors and seniormanagementThe remuneration of directors, supervisors and senior managers consists of wages, allowances and bonuses. The Company's board ofdirectors has a remuneration and assessment committee, which is responsible for formulating performance evaluation standards,procedures, systems, and main schemes and systems of rewards and punishments. The remuneration plans of directors, supervisorsand senior managers have all gone through the corresponding deliberation procedures in accordance with the Articles of Association,Remuneration Management System and other corporate governance systems.Remuneration of directors, supervisors and senior management in the tenure of office
Unit: RMB ’0,000
| Name | Position | Gender | Age | Status of service | Total pretax remuneration received from the Company | Whether to get remuneration from related parties of the Company |
Li Jianquan
| Li Jianquan | Chairman and general manager | Male | 65 | Incumbent | 318.51 | No |
Fang Xiuyuan
| Fang Xiuyuan | Director, deputy general manager and chief financial officer | Male | 54 | Incumbent | 158.96 | No |
Xu Xiaodan
| Xu Xiaodan | Director | Female | 35 | Incumbent | 78.31 | No |
Guo Zhenwei
| Guo Zhenwei | Director | Male | 38 | Incumbent | 0 | No |
| Peng Jianfeng | Independent director | Male | 61 | Incumbent | 9 | No |
Xie Jiawei
| Xie Jiawei | Independent director | Female | 49 | Incumbent | 9 | No |
Key Ke Liu
| Key Ke Liu | Independent director | Male | 58 | Incumbent | 9 | No |
Zhang Tingting
| Zhang Tingting | Chairman of the Board of Supervisors | Female | 36 | Incumbent | 25.33 | No |
Wang Ying
| Wang Ying | Supervisor | Female | 40 | Incumbent | 97.46 | No |
Liu Hua
| Liu Hua | Employee representative supervisor | Female | 49 | Incumbent | 59.43 | No |
Chen Huixuan
| Chen Huixuan | Deputy general manager and secretary to the board of directors | Female | 40 | Incumbent | 67.33 | No |
Zhang Li
| Zhang Li | Deputy general manager | Female | 44 | Incumbent | 66.43 | No |
Liang Wenzhao
| Liang Wenzhao | Independent director | Male | 52 | Outgoing | 5.42 | No |
Zhou Xiaoxiong
| Zhou Xiaoxiong | Independent director | Male | 61 | Outgoing | 5.42 | No |
Bi Qun
| Bi Qun | Independent director | Female | 52 | Outgoing | 5.42 | No |
Liu Weiwei
| Liu Weiwei | Chairman of the Board of Supervisors | Male | 44 | Outgoing | 35.16 | No |
Ye Yangjing
| Ye Yangjing | Supervisor | Female | 41 | Outgoing | 0 | No |
Yin Wenling
| Yin Wenling | Deputy general manager | Male | 49 | Outgoing | 50.20 | No |
Total
| Total | -- | -- | -- | -- | 1,000.38 | -- |
Note: For Mr. Liang Wenzhao, Mr. Zhou Xiaoxiong, Ms. Bi Qun, Mr. Liu Weiwei and Mr. Yin Wenling who left office in 2021, thestatistical period of the pre-tax remuneration from the Company is from January 2021 to June 2021. For Mr. Peng Jianfeng, Mr. KeyKe Liu, Ms. Xie Jiawei, Ms. Zhang Tingting, Ms. Liu Hua and Ms. Zhang Li who took office in 2021, the statistical period of thepre-tax remuneration from the Company is from July 2021 to December 2021.VIII. Performance of duties by directors during the reporting period
1. Board of Directors during the reporting period
| Meeting session | Convening date | Date of disclosure | Resolutions of the meeting |
The 18th meeting of the SecondBoard of Directors
| The 18th meeting of the Second Board of Directors | February 26, 2021 | March 01, 2021 | Deliberated and approved the Proposal Regarding the Opening of Bank Accounts and Replacement of Pre-invested Self-raised Funds for the New Project of Over-raised Proceeds |
The 19th meeting of the SecondBoard of Directors
| The 19th meeting of the Second Board of Directors | April 16, 2021 | April 20, 2021 | Deliberated and approved the Proposal on the Company’s 2020 Annual Report and Its Abstract |
The 20th meeting of the SecondBoard of Directors
| The 20th meeting of the Second Board of Directors | April 26, 2021 | April 27, 2021 | Deliberated and approved the Proposal on the Company’s 2021 Q1 Report |
The 21st meeting of the SecondBoard of Directors
| The 21st meeting of the Second Board of Directors | June 25, 2021 | June 28, 2021 | Deliberated and approved the proposal on the general election in the Board of Directors |
The 1st meeting of the ThirdBoard of Directors
| The 1st meeting of the Third Board of Directors | July 13, 2021 | July 14, 2021 | Deliberated and approved theProposal on the Appointment of the Company’s Senior Management |
The 2nd meeting of the ThirdBoard of Directors
| The 2nd meeting of the Third Board of Directors | August 19, 2021 | August 21, 2021 | Deliberated and approved the Proposal on the Company’s 2021 Semi-Annual Report and Its Abstract |
The 3rd meeting of the ThirdBoard of Directors
| The 3rd meeting of the Third Board of Directors | September 17, 2021 | September 22, 2021 | Deliberated and approved the Proposal on Stock Repurchase Plan |
The 4th meeting of the ThirdBoard of Directors
| The 4th meeting of the Third Board of Directors | October 25, 2021 | October 26, 2021 | Deliberated and approved the Proposal on the Company’s 2021 Q3 Report |
2. Attendance of directors at the board meetings and the general meeting of shareholders
| Name of director | Times of attending the board meetings during this reporting period | Times of attending the board meetings on site | Times of attending the board meetings by means of communication | Times of attending the board meetings by proxy | Times of absences from the board meetings by proxy | Whether he has not attended two consecutive board meetings in person | Times of attending the general meeting of shareholders |
Li Jianquan
| Li Jianquan | 8 | 6 | 2 | 0 | 0 | No | 2 |
Fang Xiuyuan
| Fang Xiuyuan | 8 | 6 | 2 | 0 | 0 | No | 2 |
Xu Xiaodan
| Xu Xiaodan | 8 | 6 | 2 | 0 | 0 | No | 2 |
Guo Zhenwei
| Guo Zhenwei | 8 | 1 | 7 | 0 | 0 | No | 2 |
Key Ke Liu
| Key Ke Liu | 4 | 1 | 3 | 0 | 0 | No | 1 |
Peng Jianfeng
| Peng Jianfeng | 4 | 1 | 3 | 0 | 0 | No | 1 |
Xie Jiawei
| Xie Jiawei | 4 | 4 | 0 | 0 | 0 | No | 1 |
Liang Wenzhao
| Liang Wenzhao | 4 | 1 | 3 | 0 | 0 | No | 2 |
Zhou Xiaoxiong
| Zhou Xiaoxiong | 4 | 2 | 2 | 0 | 0 | No | 2 |
Bi Qun
| Bi Qun | 4 | 1 | 3 | 0 | 0 | No | 2 |
Explanation of not attending the board meeting in person for two consecutive timesNo director failed to attend the board meeting in person for two consecutive times during the reporting period
3. Objections made by directors on relevant matters
Whether the director raises any objection to the relevant matters of the Company
□Yes √No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
4. Other description on the performance of duties by the directors
Whether the relevant suggestions of the director to the Company have been adopted
√ Yes □ No
Explanation of the relevant suggestions of the director to the Company have or have not been adoptedDuring the reporting period, the Company's directors could faithfully and diligently perform their duties in strict accordance with theCompany Law, Securities Law, other relevant laws and regulations and the Articles of Association, actively attend relevant meetingson time, and seriously deliberate various proposals. By telephone, email, site visits and other forms, the independent directors keptcommunication with other directors, senior management and related personnel of the Company, actively understood the Company'sproduction and operation situation and financial position, put forward positive suggestions on the Company's development strategyand improvement of corporate governance, and expressed independent opinions on the Company's periodic reports, remuneration ofdirectors and senior management and other matters, effectively guaranteeing the fairness and objectivity of the decisions of theCompany's board of directors. The directors of the Company fulfilled their duties diligently and diligently, strove to safeguard theoverall interests of the Company and the legitimate rights and interests of the majority of minority shareholders, and played a positiverole in the standardized operation and healthy development of the Company.IX. Situation of special committees under the board of directors during the reporting period
| Name of committee | Member situation | Number of meetings held | Convening date | Meeting content | Important comments and suggestions proposed | Performance of other duties | Details of objection (if any) |
AuditCommittee ofthe SecondBoard ofDirectors
| Audit Committee of the Second Board of Directors | Zhou Xiaoxiong, Liang Wenzhao and Guo Zhenwei | 3 | January 15, 2021 | Internal audit work report for the fourth quarter of 2020 and internal audit work report for the first quarter of 2021 | Ensure that the financial statements truly, accurately and completely reflect the Company's overall financial | Review the Company’s financial data and related written reports on site | None |
position
April 16,2021
| April 16, 2021 | 2020 Annual Report and other matters | Ensure that the financial statements truly, accurately and completely reflect the Company's overall financial position | Review the Company’s financial data and related written reports on site | None |
April 26,2021
| April 26, 2021 | Internal audit work report for the first quarter of 2021, internal audit work plan for the second quarter of 2021 and 2021 Q1 Report | Ensure that the financial statements truly, accurately and completely reflect the Company's overall financial position | Review the Company’s financial data and related written reports on site | None |
AuditCommittee ofthe ThirdBoard ofDirectors
| Audit Committee of the Third Board of Directors | Xie Jiawei, Key Ke Liu and Fang Xiuyuan | 2 | August 19, 2021 |
Internal audit workreport for the secondquarter of 2021,internal audit workplan for the thirdquarter of 2021 and2021 semi-annualreport
| Ensure that the financial statements truly, accurately and completely reflect the Company's overall financial position | Review the Company’s financial data and related written reports on site | None |
October 25,2021
| October 25, 2021 | Internal audit work report for the third quarter of 2021, internal audit work plan for the fourth quarter of 2021 and 2021 Q3 Report | Ensure that the financial statements truly, accurately and completely reflect the Company's overall financial position | Review the Company’s financial data and related written reports on site | None |
Nominationcommittee ofthe SecondBoard ofDirectors
| Nomination committee of the Second Board of Directors | Zhou Xiaoxiong, Bi Qun and Zhou Xiaoxiong | 1 | June 25, 2021 | General election in the Board of Directors | Ensure that the candidates meet the qualification requirements | Review the introduction materials of candidates on site | None |
Remunerationand assessmentcommittee ofthe SecondBoard ofDirectors
| Remuneration and assessment committee of the Second Board of Directors | Bi Qun, Liang Wenzhao and Fang Xiuyuan | 2 | April 16, 2021 | Remuneration of non-independent directors and senior managers in 2020 | Ensure that the salary level is in line with the company performance | Review the remuneration scheme formulation details on site | None |
| June 25, 2021 | Independent director allowance | Ensure that the allowance level is in line with the company performance | Review the remuneration scheme formulation details on site | None |
X. Work of board of supervisorsDoes the board of supervisors find any risks in the supervision activities of the Company during the reporting period
□Yes √No
The board of supervisors has no objection to the supervisory matters during the reporting period.XI. Company Employees
1. Number of employees, professional composition and education background
| Number of employees in the parent company at the end of the reporting period (person) | 1,687 |
Number of employees in main subsidiaries at the end of thereporting period (person)
| Number of employees in main subsidiaries at the end of the reporting period (person) | 10,395 |
Total number of employees at the end of the reporting period(person)
| Total number of employees at the end of the reporting period (person) | 12,082 |
Total number of employees receiving salary in the current period(person)
| Total number of employees receiving salary in the current period (person) | 12,440 |
Number of retired employees whose expenses need to be borneby the parent company and major subsidiaries (person)
| Number of retired employees whose expenses need to be borne by the parent company and major subsidiaries (person) | 38 |
Professional composition
Professional compositionProfessional composition categories
| Professional composition categories | Number of professionals (person) |
Production personnel
| Production personnel | 6,204 |
Sales personnel
| Sales personnel | 3,213 |
Technical personnel
| Technical personnel | 1,386 |
Financial personnel
| Financial personnel | 120 |
Administrative personnel
| Administrative personnel | 1,159 |
Total
| Total | 12,082 |
Education background
Education backgroundEducation background categories
| Education background categories | Number (person) |
Master degree or above
| Master degree or above | 140 |
Bachelor
| Bachelor | 1,719 |
Bachelor degree or below
| Bachelor degree or below | 10,223 |
Total
| Total | 12,082 |
2. Pay policy
According to the post value, work skills and work performance, the Company has established short-term incentives, medium-termincentives, long-term incentives, non-material incentives and other diversified scientific distribution mechanisms, taking into accountthe market level and industry trend, to create a high-salary, high-requirement, high-temperature and high-standard salary system.Short-term incentives: monthly standard salary, monthly performance bonus, customer development bonus, non-local subsidies andother timely and warm short-term material incentives;Medium-term incentives: project bonus, quarterly bonus, year-end bonus, bonuses for topping quotas, annual excellent employeebonus, etc.;Long-term incentives: equity incentive and reward for outstanding employees;Non-material incentives: equal and open culture, employee interest groups, benchmarking personnel and other attentive incentives;Staff activities: Wutongshan Mountain climbing activities, labor conference, innovation conference, traditional festival activities,team dinner and other colorful team building activities.The company also establishes an EMT (Executive Management Team) system. As the highest decision-making body forremuneration and performance, EMT supervises the implementation of various remuneration policies and examines the rationalityand scientificity of employees’ remuneration and performance policies.
3. Training plan
The company always focuses on the introduction and cultivation of high-skilled talents, establishes talent echelon, constantlyoptimizes the structure of human resources to ensure that it matches the business strategy. Through the internal evaluation, trainingand development mode of management and technology dual channels, it provides multi-channel and multi-level qualification systemfor all technical R & D personnel, and promotes the continuous improvement and development of technical R & D personnel in theprofessional field. It carries out cooperation in “production, study and research”, introduces and trains professional and technicaltalents, and improves the comprehensive quality and professional ability of the talent team. In order to continuously improve theprofessional knowledge, professional level and comprehensive quality of employees, build an excellent enterprise staff team,establish a learning organization, enhance the core competitiveness of the Company, it orderly carries out various trainings,standardizes the training work of the Company, and formulates a series of training systems. The training content covers leadershipdevelopment learning projects, marketing line training system construction, corporate culture interpretation and communication,general skills, career development, etc. The training for new employees is divided into social recruitment training for new employeesand “spring seedling training” for fresh graduates. For the new graduates, there are systematic spring seedling training plans, frommilitary training to workshop practice, product introduction, workplace knowledge, mentors’ guidance and comprehensive training.In order to improve the working skills of in-service employees, a series of training, such as cultural concept, professional skills,management skills, promotion and post adaptation, are carried out in their daily work. According to the categories, they are dividedinto three categories: general training, management training and professional training. In order to receive the latest information in theprofessional field, improve and consolidate professional business skills, professional courses will arrange a combination of externaltraining and internal training according to the needs of each post. For professional quality system and legal system, the professionallevel of employees is improved through external training learning, and then internal transfer training. For the management, accordingto the enterprise strategy and actual needs, external lecturers are invited to provide guidance every year to improve managementskills.
4. Labor outsourcing
□ Applicable √ Not applicable
XII. Profit distribution and share capital increase from capital surplusProfit distribution policy during the reporting period, especially the formulation, implementation or adjustment of cash dividendpolicy
□ Applicable √ Not applicable
The Company's profit distribution plan and capital surplus converted into share capital plan in the reporting period are consistent withthe relevant provisions of the articles of association and dividend management measures
√ Yes □ No □ Not applicable
The Company's profit distribution plan and capital surplus converted into share capital plan in the reporting period conform to therelevant provisions of the articles of association.Profit distribution and share capital increase from capital surplus in current year
| Bonus shares per 10 shares (shares) | 0 |
Dividend per 10 shares (RMB) (including tax)
| Dividend per 10 shares (RMB) (including tax) | 9.00 |
Increase shares per 10 shares
| Increase shares per 10 shares | 0 |
Share capital base in distribution proposal (shares)
| Share capital base in distribution proposal (shares) | 419,737,649 |
Amount of cash dividend (RMB) (including tax)
| Amount of cash dividend (RMB) (including tax) | 377,763,884.10 |
Amount of cash dividend in other forms (e.g.share repurchase) (RMB)
| Amount of cash dividend in other forms (e.g. share repurchase) (RMB) | 257,949,867.00 |
Total cash dividends (including other methods)(RMB)
| Total cash dividends (including other methods) (RMB) | 635,713,751.10 |
Distributive profit (RMB)
| Distributive profit (RMB) | 3,391,392,215.70 |
Proportion of total cash dividends (including othermethods) in total profit distribution
| Proportion of total cash dividends (including other methods) in total profit distribution | 100.00% |
This cash dividends
This cash dividendsOthers
OthersDetailed description of the proposal of profit distribution or share capital increase from accumulation fund
Detailed description of the proposal of profit distribution or share capital increase from accumulation fundAccording to the Audit Report of Winner Medical Co., Ltd. in 2021 issued by BDO China Shu Lun Pan Certified Public AccountantsLLP, the net profit attributable to the shareholders of the parent company in the consolidated statements of the Company in 2021 isRMB 1,239,320,067.26, and the net profit of the parent company in 2021 is RMB 809,558,137.71. As of December 31, 2021, theprofit of the parent company available for distribution is RMB 3,391,392,215.70.In line with the principle of repaying shareholders and sharing the Company's operating results with shareholders, taking into account
The Company made profits during the reporting period and the profits available for distribution to shareholders of the parentcompany were positive, but no proposal for the distribution of cash dividend of shares was put forward
□ Applicable √ Not applicable
XIII. Implementation of the company's equity incentive plan, employee stock ownership plan or other employee incentive measures
√Applicable □ Not applicable
1. Equity incentive
On November 27, 2020 and December 15, 2020, the Company held the 15th meeting of the second board of directors and the 6th extraordinary general meeting of shareholders in 2020respectively, deliberated and passed the Proposal on the Company's Restricted Stock Incentive Plan in 2020 (Draft) and Its Abstract and related matters. The general meeting of shareholdersauthorized the board of directors to determine the grant date of restricted stocks, and relevant matters which is necessary to grant restricted shares to the incentive object and go through theprocedures for granting restricted shares when the incentive object meets the conditions. For details, please refer to relevant announcements disclosed by the Company on the website(http://www.cninfo.com.cn) on December 16, 2020 and November 30, 2020.On December 18, 2020, the Company held the 17th meeting of the second board of directors and the 11th meeting of the second board of supervisors respectively, deliberated and passed theProposal on Matters Related to the Adjustment of the Restricted Stock Incentive Plan in 2020 and the Proposal on the First Grant of Restricted Stocks to the Incentive Objects, and determinedthat December 18, 2020 will be the grant date of the incentive plan, 5.833 million restricted shares will be granted to 1,036 eligible incentive objects. For details, please refer to relevantannouncement disclosed by the Company on the website (http://www.cninfo.com.cn) on December 22, 2020.
Equity incentive granted to directors and senior management
√Applicable □ Not applicable
Unit: share
| Name | Position | Number of stock options held at the beginning of the year | Number of new stock options granted during the reporting period | Number of exercisable shares during the reporting period | Number of shares exercised during the reporting period | Exercise price of shares exercised during the reporting period (RMB / share) | Number of stock options held at the end of the period | Market price at the end of the reporting period (RMB / share) | Number of restricted shares held at the beginning of the period | Number of new restricted shares granted during the reporting period | Grant price of restricted shares (RMB / share) | Number of shares unlocked in the current period | Number of restricted shares held at the end of the period |
Li Jianquan
| Li Jianquan | Chairman, general manager | 0 | 0 | 0 | 0 | 0 | 0 | 82.45 | 80,000 | 0 | 0 | 0 | 80,000 |
Fang Xiuyuan
| Fang Xiuyuan | Director, deputy general manager, chief financial officer | 0 | 0 | 0 | 0 | 0 | 0 | 82.45 | 50,000 | 0 | 0 | 0 | 50,000 |
Xu Xiaodan
| Xu Xiaodan | Director | 0 | 0 | 0 | 0 | 0 | 0 | 82.45 | 30,000 | 0 | 0 | 0 | 30,000 |
Chen Huixuan
| Chen Huixuan | Deputy general manager, secretary to the Board of | 0 | 0 | 0 | 0 | 0 | 0 | 82.45 | 30,000 | 0 | 0 | 0 | 30,000 |
DirectorsZhang Li
| Zhang Li | Deputy general manager | 0 | 0 | 0 | 0 | 0 | 0 | 82.45 | 40,000 | 0 | 0 | 0 | 40,000 |
Total
| Total | -- | 0 | 0 | 0 | 0 | -- | 0 | -- | 230,000 | 0 | -- | 0 | 230,000 |
Remark (if any)
| Remark (if any) | None |
Evaluation mechanism and incentive of senior managersThe Company has established an accountability evaluation system for senior management and an annual performance appraisal system for senior management teams, examined and evaluatedthe senior management according to the examination and evaluation system, taking into account the long-term development needs of the Company from the company's business performance,individual level and scientific perspective.
2. Implementation of employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentive measures
□ Applicable √ Not applicable
XIV. Establishment and implementation of internal control system in the reporting period
1. Establishment and implementation of internal control
During the reporting period, the Company adhered to the risk-oriented principle, and continually improved and optimized theCompany's internal control system on the basis of daily supervision and special supervision of internal control according to the BasicNorms of Enterprise Internal Control and its supporting guidelines and other internal control supervision requirements and combinedwith the internal control system and evaluation methods to constantly adapt to the changes in the external environment and therequirements of internal management. According to the operation, analysis and evaluation of the internal control system, theCompany effectively prevented risks in management and promoted the realization of internal control objectives.
2. Details of significant internal control defects discovered during the reporting period
□Yes √No
XV. Management and control of the Company over its subsidiaries during the reportingperiod
| Company name | Integration plan | Integration progress | Problems in integration | Solutions taken | Solution progress | Follow-up solution |
N/A
| N/A | N/A | N/A | N/A | N/A | N/A | N/A |
XVI. Self-evaluation report or audit report of internal control
1. Internal control self-evaluation report
| Disclosure date of full text of internal control evaluation report | April 22, 2022 |
Disclosure index of full text of internalcontrol evaluation report
| Disclosure index of full text of internal control evaluation report | http://www.cninfo.com.cn |
The proportion of the total assets of theunit included in the scope of evaluation inthe total assets of the Company'sconsolidated financial statements
| The proportion of the total assets of the unit included in the scope of evaluation in the total assets of the Company's consolidated financial statements | 95.85% |
The proportion of the revenue of the unitincluded in the scope of evaluation in thetotal revenue of the Company'sconsolidated financial statements
| The proportion of the revenue of the unit included in the scope of evaluation in the total revenue of the Company's consolidated financial statements | 78.13% |
Defect identification standard
Defect identification standardClass
| Class | Financial reports | Non-financial reports |
Qualitative standard
| Qualitative standard | Significant defect: 1) The control environment is invalid; 2) The directors, supervisors and senior managers of the Company commit fraud and cause significant losses and adverse effects to the enterprise; 3) The certified public accountant finds that there is material misstatement in the current financial report, which is not found by the internal control in the process of operation; 4) The supervision of the enterprise audit committee and the internal audit institution over the internal control is invalid. Major defect: 1) Failure to select and apply accounting policies in accordance with generally accepted accounting principles; 2) No anti-fraud procedures and control measures have been established; 3) There is no corresponding control mechanism established or no implementation of and no corresponding compensatory control for the accounting treatment of non-routine or special transactions; | Significant defect: lack of democratic decision-making process; the decision-making process leads to major errors, the important business lacks system control or is systematically invalid, and lack of effective compensatory control; the loss of middle and senior managers and senior technicians is serious; the results of internal control evaluation, especially the significant defects, have not been rectified; other situations that have a significant negative impact on the Company. Major defect: democratic decision-making process exists but is not perfect; the decision-making process leads to general errors; there are defects in important business systems or system; the loss of business personnel in key positions is serious; the results of internal control evaluation, especially the major defects, have not been rectified; other situations that have a large negative |
| 4) There are one or more defects in the control of the financial reporting process at the end of the period, and it can not reasonably guarantee the prepared financial statements achieve the true and accurate goal. Common defect: Other internal control defects that do not constitute significant defects or major defects. | impact on the Company. Common defects: the decision-making process is inefficient; the general business systems or system has defects; the loss of business personnel in general positions is serious; general defects have not been rectified. |
Quantitative standards
| Quantitative standards | Significant defects: 1. potential misstatement of revenue ≥ 2% of the total revenue in the consolidated financial statement; 2. potential misstatement of total profit ≥ 5% of the total profit in consolidated financial statement; 3. potential misstatement of total assets ≥ 2% of the total assets in consolidated statement. Major defects: 1. 1% of the revenue in the consolidated financial statement ≤ potential misstatement of revenue ＜ 2% of the revenue in the consolidated financial statement; 2. 2% of the total profit in the consolidated financial statement ≤ potential misstatement of the total profit < 5% of the total profit in the consolidated financial statement; 3. 1% of the total assets in the consolidated financial statement ≤ potential misstatement of total assets < 2% of the total assets in the consolidated financial statement. Common defects: 1. potential misstatement of revenue < 1% of the total revenue in the consolidated financial statement; 2. potential misstatement of total profit < 2% of the total profit in consolidated financial statement; 3. potential misstatement of total assets < 1% of the total assets in consolidated statement. When the potential misstatement caused by an internal control defect affects multiple indexes, the nature of the defect shall be determined according to the principle of which is lower. (the financial index values mentioned in the above quantitative standards are the data from audited consolidated statement of the Company in the latest year) | Significant defects: the amount of direct economic loss accounted for 5% or more of the total profit in the audited consolidated financial statement of the previous year; Major defects: the amount of direct economic loss accounted for 2% (included) to 5% of the total profit in the audited consolidated financial statement of the previous year; Common defects: the amount of direct economic loss is less than 2% of the total profit in the audited consolidated financial statement of the previous year |
Number of significant defects in financialreport
| Number of significant defects in financial report | 0 |
Number of significant defects innon-financial report
| Number of significant defects in non-financial report | 0 |
Number of major defects in financial report
| Number of major defects in financial report | 0 |
Number of major defects in non-financialreport
| Number of major defects in non-financial report | 0 |
2. Internal control audit report or authentication report
N/AXVII. Rectification of self-inspection problems in the special action on governance of listedcompanies
Not applicable.
Section 5 Environmental Protection and Social Responsibility
I. Major environmental issues
Whether the listed company and its subsidiaries are key pollutant discharging units announced by environmental protectionauthorities
√ Yes □ No
| Company or subsidiary name | Names of main pollutants and characteristic pollutants | Emission mode | Number of discharge outlets | Distribution of discharge outlets | Emission concentration | Pollutant emission standards implemented | Total emissions | Total emissions approved | Emissions beyond standards |
WinnerMedical(Chongyang) Co., Ltd.
| Winner Medical (Chongyang) Co., Ltd. | PM, SO2, NOX | / | 1 | Boiler discharge outlet | 6.2mg/m?, <3mg/m?, 162mg/m? | 20mg/m?, 50mg/m?, 200mg/m? | NOX: 3.64T, SO2: 0.073T | NOX: 13.28T/a, SO2: 3.32 T/a | Not exceeding the standard |
WinnerMedical(Chongyang) Co., Ltd.
| Winner Medical (Chongyang) Co., Ltd. | PH, COD, BOD, NH3-N, SS | Direct discharge | 1 | Sewage discharge outlet | 7.5, 73mg/L, 19.4mg/L, 0.38mg/L, 26mg/L | 6-9, 80mg/L, 20mg/L, 10mg/L, 50mg/L | COD: 17.27T, NH3-N: 0.377T | COD: 57.6T/a, NH3-N: 7.27 T/a | Not exceeding the standard |
WinnerMedical(Jiayu) Co.,Ltd.
| Winner Medical (Jiayu) Co., Ltd. | PM, SO2, NOX | / | 1 | Boiler discharge outlet | 3.1mg/m?, <3mg/m?, 149mg/m? | 20mg/m?, 50mg/m?, 200mg/m? | NOX: 3.14T, SO2: 0.085T | NOX: unlicensed, SO2: unlicensed | Not exceeding the standard |
WinnerMedical(Jiayu) Co.,Ltd.
| Winner Medical (Jiayu) Co., Ltd. | PH, COD, BOD, NH3-N, SS | Direct discharge | 1 | Sewage discharge outlet | 7.9, 55mg/L, 18.3mg/L, 0.32mg/L, 13mg/L | 6-9, 100mg/L, 20mg/L, 15mg/L, 70mg/L | COD: 9.50T, NH3-N: 0.02T | COD: 34.29T/a, NH3-N: 1.19T/a | Not exceeding the standard |
WinnerMedical(Huanggang) Co., Ltd.
| Winner Medical (Huanggang) Co., Ltd. | PM, SO2, NOX | / | 2 | 1#2# boiler discharge outlet | 19mg/m?, <3 mg/m?, 125mg/m? | 20mg/m?, 50 mg/m?, 200mg/m? | NOX: 9.42T, SO2: 0.42T | NOX: 23.52T/a, SO2: unlicensed | Not exceeding the standard |
WinnerMedical(Huanggang) Co., Ltd.
| Winner Medical (Huanggang) Co., Ltd. | PH, COD, BOD, NH3-N, SS | Indirect discharge | 1 | Sewage discharge outlet | 7.89, 66.6mg/L, 22.0mg/L, 0.46mg/L, 6mg/L | 6-9, 500mg/L, 300mg/L, 45mg/L, 400mg/L | COD: 59.72T, NH3-N: 0.787T | COD: 90T/a, NH3-N: 13.5 T/a | Not exceeding the standard |
WinnerMedical(Tianmen)Co., Ltd.
| Winner Medical (Tianmen) Co., Ltd. | PM, SO2, NOX | / | 1 | Boiler discharge outlet | 6.9mg/m?, <3mg/m?, 106mg/m? | 20mg/m?, 50mg/m?, 200mg/m? | NOX: 4.06T, SO2: 0.108T | NOX: 16.235T/a, SO2: 4.059T/a | Not exceeding the standard |
WinnerMedical(Tianmen)Co., Ltd.
| Winner Medical (Tianmen) Co., Ltd. | PH, COD, BOD, NH3-N, SS | Indirect discharge | 1 | Sewage discharge outlet | 7.54, 62mg/L, 18.7mg/L, 1.33mg/L, 8mg/L | 6-9, 400mg/L, 150mg/L, 30mg/L, 250mg/L | COD: 22.45T/NH3-N: 2.24T | COD: 132.52T/a, NH3-N: 16.57 T/a | Not exceeding the standard |
WinnerMedical(Wuhan)Co., Ltd.
| Winner Medical (Wuhan) Co., Ltd. | PM, SO2, NOX | / | / | / | / | / | / | No boiler, no license | Not exceeding the standard |
WinnerMedical(Wuhan)Co., Ltd.
| Winner Medical (Wuhan) Co., Ltd. | PH, COD, BOD, NH3-N, | Indirect discharge | 1 | Sewage discharge outlet | 7.75, 46mg/L, 9.0mg/L, 0.58mg/L, 2 | 6-9, 500mg/L, 300mg/L, 45mg/L, 64 | COD: 22.73T, NH3-N: 2.227T | COD: 61T/a, NH3-N: 6.1T/a | Not exceeding the standard |
WinnerMedical(Jingmen)Co., Ltd.
| Winner Medical (Jingmen) Co., Ltd. | PM, SO2, NOX | / | 1 | Boiler discharge outlet | 3.1mg/m?, <3 mg/m?, 113mg/m? | 20mg/m?, 50mg/m?, 150mg/m? | NOX: 2.687T, SO2: 0.103T | NOX: 10.83T/a, SO2: 3.11T/a | Not exceeding the standard |
WinnerMedical
| Winner Medical | PH, COD, BOD, NH3-N, | Indirect discharg | 1 | Sewage discharge | 8.22, 78mg/L, | 6-9, 200mg/L, 50mg/L, | COD: 13.377T, | COD: 19.48T/a, | Not exceedin |
| (Jingmen) Co., Ltd. | SS | e | outlet | 35.0mg/L, 0.45mg/L, 11mg/L | 20mg/L, 100mg/L | NH3-N: 1.337T | NH3-N: 1.95T/a | g the standard |
YichangWinnerMedicalTextile Co.,Ltd.
| Yichang Winner Medical Textile Co., Ltd. | PM, SO2, NOX | / | 1 | Boiler discharge outlet | 2.8mg/m?, <3 mg/m?, 135mg/m? | 20mg/m?, 50mg/m?, 150mg/m? | Unlicensed | Unlicensed | Not exceeding the standard |
YichangWinnerMedicalTextile Co.,Ltd.
| Yichang Winner Medical Textile Co., Ltd. | PH, COD, BOD, NH3-N, SS | Indirect discharge | 1 | Sewage discharge outlet | 7.6, 131mg/L, 39.3mg/L, 12.5mg/L, 45mg/L | 6-9, 500mg/L, 300mg/L, 45mg/L, 400mg/L | No production wastewater drainage, drainage of 2,800 tons of domestic sewage | Unlicensed | Not exceeding the standard |
Construction and operation of pollution prevention and control facilitiesIn order to ensure the normal operation of environmental protection facilities, the Company selects advanced, mature and technicallyfeasible environmental protection facilities and treatment processes, formulates environmental protection responsibility system,emergency management system, safe operation rules of environmental protection facilities, etc., assigns special personnel to beresponsible for the operation and maintenance of environmental protection facilities, formulates maintenance plan, makes operationrecords and daily monitoring of environmental protection facilities. The environmental protection facilities operate normally, and allthe pollutant discharge indexes meet the requirements of pollutant discharge permit.All subsidiaries build hazardous waste rooms, manage the whole process of hazardous waste, sign entrusted disposal agreements withthird-party companies, and regularly transfer them to third parties for treatment.
Environmental impact assessment of construction projects and other administrative permits for environmental protectionThe branches and subsidiaries of Winner Medical Co., Ltd. have implemented the environmental impact assessment system and the"three simultaneities" system as required, and have done a good job in the environmental protection acceptance after completion, asfollows:
Winner Medical (Chongyang) Co., Ltd.: “Medical absorbent gauze series product line” obtained the EIA approval fromEnvironmental Protection Bureau of Chongyang County on September 21, 2005, and passed the environmental protection acceptanceafter completion of Environmental Protection Bureau of Chongyang County on August 22, 2008; “the project of sterile packagingand sterile production line” obtained the EIA approval (C.H.S.H [2013] No.07) from Environmental Protection Bureau of ChongyangCounty on March 29, 2013, and passed the environmental protection acceptance after completion of Environmental ProtectionBureau of Chongyang County on June 26, 2014; “Qingshan plant construction project” went through the environmental impactassessment in July 2014 and obtained EIA approval from Environmental Protection Bureau of Chongyang County on November 18,2015; the new 6390M2 workshop project” of Xianning Winner Medical (Chongyang) Co., Ltd. completed the declaration ofregistration form on May 17, 2017.Winner Medical (Jiayu) Co., Ltd.: “Absorbent cotton project with annual production of 800 tons” obtained the EIA approval fromEnvironmental Protection Bureau of Jiayu County on March 20, 2013, and passed the environmental protection acceptance aftercompletion of Environmental Protection Bureau of Jiayu County on September 20, 2014. “Winner Purcotton construction project”obtained the EIA approval (J.H.S [2014] No.083) from Environmental Protection Bureau of Jiayu County on December 25, 2014,and passed the environmental protection acceptance after completion of Environmental Protection Bureau of Jiayu County onSeptember 28, 2017. The environmental impact assessment report of the Winner Industrial Park (Jiayu) Project was approved by theXianning Municipal Bureau of Ecology and Environment on March 15, 2021, with the approval document number Xian Huan Shen[2021] No. 21. It is under construction currently.Yichang Winner Medical Textile Co., Ltd.: “Medical gauze project with an annual output of 90 million meters” obtained the EIAapproval from Environmental Protection Bureau of Zhijiang City on December 19, 2014, and passed the environmental protectionacceptance after completion of Environmental Protection Bureau of Zhijiang City on October 14, 2015.Winner Medical (Tianmen) Co., Ltd.: “Cotton spun laced non-woven fabric and medical dressing products production project”obtained the EIA approval (T.H.H. [2015] No.35) from Environmental Protection Bureau of Tianmen City on March 11, 2015. Atpresent, phase I of the project has been completed and passed the environmental protection acceptance after completion ofEnvironmental Protection Bureau of Tian men City on January 25, 2017; the independent acceptance of phase II will be completedon May 10, 2020. “Medical dressing production line automation upgrading and transformation project” obtained the EIA approval
(T.H.H. [2016] No.23) from Environmental Protection Bureau of Tianmen City on January 19, 2016, and completed the independentacceptance on March 23, 2018.Winner Medical (Jingmen) Co., Ltd.: “30 million meters per year medical gauze bleaching and refining production line expansionproject” obtained the EIA approval from Environmental Protection Bureau of Jingmen City on October 18, 1999, and passed theenvironmental protection acceptance after completion of Environmental Protection Bureau of Jingmen City on December 14, 2001;“renovation and expansion project of gauze pad, gauze sheet and shrinkage bandage” obtained the EIA approval from EnvironmentalProtection Bureau of Jingmen City on September 23, 2003 and passed the environmental protection acceptance after completion ofEnvironmental Protection Bureau of Dongbao District, Jingmen City on August 3, 2005; “degreasing and bleaching medical gauzeproject with annual production of 1,500 tons” obtained the EIA approval from Environmental Protection Bureau of Dongbao District,Jingmen City on April 5, 2006, and accepted together with the construction project of Purcotton on September 27, 2017; “WinnerPurcotton construction project” obtained the EIA approval (D.H.H [2016] No.138) from Environmental Protection Bureau ofJingmen City on October 19, 2016, and passed the environmental protection acceptance of Environmental Protection Bureau ofJingmen City on September 27, 2017; the expansion project of absorbent gauze production line (Purcotton phase II expansion project)obtained the EIA approval (J.H.S. [2020] No.112) from Jingmen Municipal Bureau of Ecology and Environment on December 24,2020.Winner Medical (Huanggang) Co., Ltd.: “Cotton spun laced non-woven fabric production project (phase I and phase II)” obtainedthe EIA approval (E.H.H. [2011] No.628) from Environmental Protection Department of Hubei Province on August 5, 2011; thephase I project passed the environmental protection acceptance after completion (E.H.H.[2012] No.348) of Environmental ProtectionDepartment of Hubei Province on May 8, 2012. The Phase II project obtained the EIA approval (H.H.H. [2015] No.304) fromEnvironmental Protection Bureau of Huanggang City on December 31, 2015, and the Phase I project passed the environmentalprotection acceptance after completion of Environmental Protection Bureau of Huanggang City on January 24, 2017; “the newproject of Purcotton distribution center” obtained the EIA approval (H.H.H. [2016] No.114) from Environmental Protection Bureauof Huanggang City on June 27, 2016, and the independent acceptance of the project was completed on October 10, 2018; the “boilertransformation project” obtained the EIA approval (H.H.H. [2018] No.20) from Environmental Protection Bureau of Huanggang Cityon January 29, 2018, and completed self acceptance on November 14, 2019; the “foam coiled material production line project(expansion)” obtained the EIA approval (H.H.H. [2018] No.26) from Environmental Protection Bureau of Huanggang City onFebruary 5, 2018, and completed the project's independent acceptance on October 8, 2018; the “construction project of high-enddressing production line” obtained the EIA approval (H.H.H. [2018] No.178) from Environmental Protection Bureau of HuanggangCity on November 6, 2018, and the project is currently in the construction period and has not been completed; the “upgrading andtransformation project of medical protective products” obtained the EIA approval (H.H.H. [2020] No.109) from HuanggangMunicipal Bureau of Ecology and Environment on July 20, 2020 and completed independent acceptance on October 19, 2021.Winner Medical (Wuhan) Co., Ltd.: “Hubei Winner Medical Co., Ltd. cotton spun laced nonwovens and products productionproject” obtained the EIA approval (X.S.P.Zi [2017] No.68) from Administrative Approval Bureau of Xinzhou District, Wuhan Cityon July 12, 2017 (see Annex 3 for the approval), and completed the independent acceptance of phase I on January 18, 2020; “R & Dcenter construction project” obtained the EIA approval (X.S.P.Zi [2018] No.193) from Administrative Approval Bureau of XinzhouDistrict, Wuhan City on December 24, 2018 (see Annex 4 for the approval), but the project has not started construction yet; “newelectron accelerator irradiation device project” obtained the EIA approval (W.H.G. [2018] No.5) from Wuhan EnvironmentalProtection Bureau on January 15, 2018. The project was constructed in two phases. The independent acceptance of phase I wascompleted on May 15, 2020 and of phase II was completed on November 19, 2021. The environmental impact report form of themedical protective product upgrading project was approved by Administrative Approval Bureau of Xinzhou District on May 7, 2021,with the approval number of Xin Shen Pi Zi [2021] No. 95. The project is not yet completed.
Emergency plan for environmental emergenciesIn order to further improve the emergency management system of environmental pollution accidents, improve the ability of branchesand subsidiaries of Winner Medical Co., Ltd. to deal with major environmental pollution accidents to ensure the safety of productionand operation, improve the ability of employees to deal with accidents, standardize the Company's emergency management andcorresponding emergency procedures, and implement emergency rescue work in a timely and effective manner, prevent and reducethe occurrence of accidents to the greatest extent, branches and subsidiaries of Winner Medical Co., Ltd. have set up anenvironmental accident emergency leading group and formulated the Emergency Plan for Environmental Accidents. The branchesand subsidiaries of Winner Medical Co., Ltd. have prepared the emergency plans for environmental accidents according to therequirements, and sent them to the local environmental protection authorities for record. They also conduct regular emergency drillsfor environmental emergencies.Environmental self-monitoring schemeThe Company implements the environmental self-monitoring scheme according to the requirements of the pollutant discharge permit,and detects the pollutants through the methods of manual testing + entrusted monitoring + online monitoring. The online monitoringsystem of enterprises with production wastewater discharge carries out real-time monitoring and networking with the competentgovernment departments. The entrusting party of the online monitoring equipment carries out the operation and maintenance of theonline monitoring equipment, and the manual testing and entrusted monitoring results are released in time on the provincial pollutantplatform.Note: the self-monitoring scheme is stipulated in the pollutant discharge permit, and the pollutant discharge permit and
self-monitoring scheme are made public on the national pollutant discharge permit management platform.
Administrative penalties imposed due to environmental issues during the reporting period
| Company or subsidiary name | Reasons for penalty | Violations | Punishment | Impacts on the production and operation of listed companies | Rectification measures of the Company |
N/A
| N/A | N/A | N/A | N/A | N/A | N/A |
Other environmental information that should be disclosedNAMeasures taken to reduce carbon emissions during the reporting period and their effect
√Applicable □ Not applicable
The Company hired a third-party company to check the carbon emissions of its subsidiaries, analyzed the emission reductionpotential and measures, established a carbon emission management system, and defined the strategic goal of "carbon peak" and"carbon neutral" 3 years and 10 years ahead of the national target respectively.
Other information related to environmental protectionNA
The Company is required to comply with the disclosure requirements of “Textile and Apparel Business” in the “Shenzhen StockExchange Self-Regulatory Guidelines for Listed Companies No. 3 -- Industry Information Disclosure”Environmental compliance of the Company during the reporting period
1. Winner Medical (Jiayu) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater mainly includes domestic sewage and production wastewater.Domestic sewage (including canteen wastewater) is first treated in oil separation tank and septic tank, and then mixed withproduction wastewater to enter the sewage treatment station in the plant. The sewage treatment station adopts “hydrolysisacidification + biological contact oxidation method” for treatment, and then discharged from the drainage outlet through pipelineafter reaching the standard. The wastewater has been installed with on-line monitoring. The sewage treatment station passed theenvironmental protection acceptance after completion of Environmental Protection Bureau of Jiayu County on September 28, 2017,implementing the limit value of “Discharge Standard of Water Pollutants for Textile Dyeing and Finishing Industry” (GB4287-2012).The sewage plant’s structure is concrete structure, with a service life of 20 years and environmental protection equipment for 10years.Solid waste is mainly domestic waste of employees; impurities (cotton residue, cotton dust and cotton batting) generated in theproduction process and cotton dust collected by dust removal equipment; the leftover materials produced in the slicing process;sludge from sewage treatment station; the hazardous waste generated is chemical material packaging barrel. For general solid wastes,disposal agreements are signed with disposal units, and for hazardous wastes, disposal agreements are signed with qualified disposalunits.
2. Winner Medical (Chongyang) Co., Ltd.
It is a key wastewater discharge enterprise. The wastewater of the project mainly includes domestic sewage, production wastewaterand experimental wastewater, etc. The production wastewater is discharged into the wastewater treatment station (hydrolysisacidification + biological contact oxidation method), and the treatment reaches the standard; the experimental wastewater ishazardous waste and has been entrusted to a third party company for treatment. The domestic sewage of the employees andproduction wastewater generated by the enterprise are directly discharged into the sewage treatment plant and discharged afterreaching the standard. Online monitoring of wastewater has been installed, and the sewage station completed independent acceptanceon March 20, 2017, implementing the limit value of “Discharge Standard of Water Pollutants for Textile Dyeing and FinishingIndustry” (GB4287-2012) The sewage plant’s structure is concrete structure, with a service life of 20 years and environmentalprotection equipment for 10 years.Solid waste mainly includes office and domestic waste of employees, dust, leftover materials and unqualified products produced inthe production process. For domestic waste and general solid waste, disposal agreements are signed with disposal units, and forhazardous waste, entrustment agreements are signed with third parties.
3. Winner Medical (Tianmen) Co., Ltd.
It is a key wastewater discharge enterprise. The wastewater mainly comes from the production wastewater produced by thedegreasing and bleaching workshop and the domestic sewage in the plant area. The main pollutants are pH, COD, suspended solidsand BOD5. The production wastewater is discharged to the sewage treatment station (hydrolysis acidification + biological contactoxidation method), and the treatment reaches the standard; domestic sewage enters the sewage treatment station and is treated withthe production wastewater. Online monitoring of wastewater has been installed, and the phase I project of the sewage stationcompleted independent acceptance on March 23, 2018, implementing the limit value of “Discharge Standard of Water Pollutants forTextile Dyeing and Finishing Industry” (GB4287-2012). The sewage plant’s structure is concrete structure, with a service life of 20years and environmental protection equipment for 10 years.For General solid waste and domestic waste, treatment agreements are signed with disposal units. Hazardous solid waste is mainlychemical material packaging barrels, which are recycled by raw material suppliers, and no hazardous waste is transferred fordisposal.
4. Winner Medical (Jingmen) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewater anddomestic sewage. The production wastewater mainly comes from the scouring and bleaching process. The PH value of thewastewater is obviously alkaline and the COD value is high, but there is no harmful poisonous substance in it. The wastewater isdischarged into the self-built sewage station, treated by “flocculation precipitation + hydrolysis acidification + biological contactoxidation method + biological aerated filter”, and then discharged into the downstream municipal sewage plant. After simpletreatment in septic tank, domestic sewage will be treated in self-built sewage station. The sewage station has been built, onlinemonitoring of wastewater has been installed, and the pollutant discharge permit has been obtained. It is to be accepted. It implementsthe limit value of “Discharge Standard of Water Pollutants for Textile Dyeing and Finishing Industry” (GB4287-2012). The sewageplant’s structure is concrete structure, with a service life of 20 years and environmental protection equipment for 10 years.For domestic waste and general solid wastes, disposal agreements are signed with disposal units, and for hazardous wastes, transferagreements are signed with third-party disposal units.
5. Winner Medical (Huanggang) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewater anddomestic sewage. The wastewater mainly comes from spun lace forming process, degreasing / bleaching process and soft waterpreparation process. Most of the wastewater from spun lace forming process is reused for production after being treated by watertreatment circulation system, while a small part of the wastewater are discharged into the self-built sewage station with that fromdegreasing / bleaching process, and then discharged after being treated by “hydrolysis acidification + biological contact oxidation”and reaching the standard. After simple treatment in septic tank, domestic sewage will be treated in self-built sewage station. Onlinemonitoring of wastewater has been installed, and the sewage station passed the environmental protection acceptance after completionof Environmental Protection Bureau of Huanggang City on January 24, 2017, implementing the level III standard limit in Table 4 ofIntegrated Wastewater Discharge Standard (GB8978-1996). The sewage plant’s structure is concrete structure, with a service life of20 years and environmental protection equipment for 10 years.The solid wastes of the project include general solid wastes, other solid wastes and hazardous solid wastes. The general solid wastesare mainly cotton impurities, leftover materials, defective products, boiler coal cinders, sludge from sewage treatment facilities, etc.generated in the production process. Other solid wastes are domestic wastes generated from office and life. Among them, cottonimpurities, leftover materials and defective products are sold for comprehensive utilization; after the sludge is dehydrated, it will betreated by the environmental sanitation department together with the domestic waste. Hazardous solid wastes are mainly chemicalwaste packaging barrels, which are recycled by raw material suppliers, and the waste oil is stored in the plant area, and delivered toqualified units for disposal after reaching the transportation volume.
6. Winner Medical (Wuhan) Co., Ltd.
It is a key wastewater discharge enterprise. The wastewater of the project mainly includes preparation wastewater, spun lacedwastewater, degreasing and bleaching wastewater and domestic water, etc. The wastewater discharge of the project is 2126.93t/d afterthe completion of phase I, 4067.11t/d after the completion of phase II and 6004.5t/d after the completion of phase III. The wastewateris treated by the process of “hydrolysis acidification + anaerobic + biological contact oxidation method”. Online monitoring ofwastewater has been installed, and the phase I project of the sewage station completed independent acceptance on January 7, 2020,implementing the level III standard limit in Table 4 of Integrated Wastewater Discharge Standard (GB8978-1996). The sewageplant’s structure is concrete structure, with a service life of 20 years and environmental protection equipment for 10 years.The solid wastes of the project are mainly divided into general solid wastes, other solid wastes and hazardous solid wastes. Amongthem, cotton impurities, leftover materials, defective products and fiber dust are purchased and recycled, and sludge and domesticwaste are disposed by the environmental sanitation department.According to theStandard for Pollution Control on Hazardous Waste Storage (GB 18597-2001), the temporary storage room ofhazardous waste shall be constructed and the hazardous waste shall be stored as required. Meanwhile, the daily management ofhazardous waste should be strengthened. Disposal agreements for all hazardous waste are signed with the qualified units.Summary: In 2021, the above pollutant discharge enterprises all comply with the relevant laws and regulations of environmental
protection, discharge pollutants at the discharge ports specified in the discharge permit, monitor and record the logbooks according tothe requirements of the discharge permit, and submit the discharge permit implementation report according to the requirements of thedischarge permit.
II. Social responsibilityWinner Medical has been founded for almost thirty years, and kept on upholding the determinations of “To enhance your health, lifeand well-being” and “Purcotton Changes the World” to continue to promote the progress of and efforts to medical consumables, so asto provide consumers with better quality products and explore more beneficial practices for the benefit of mankind. To ensure thesustainable, standardized and healthy development of the Company, further improve the corporate governance structure, develop andimplement social responsibility, the board of directors appoints the "Strategy Committee" to conduct research and guidance on issuesrelated to social responsibility, formulates corporate social responsibility strategies and policies, and renames the "StrategyCommittee" to "Strategic and Social Responsibility Committee".
1. To enhance your health
Looking back over the past 30 years of accumulation and growth, the Company has always been adhering to the "quality first,product safety first, social responsibility first" as the source of thought. As a benchmark enterprise in the medical consumablesindustry in China, the Company adheres to the market demand, is driven by R&D and innovation, constantly improves productlayout and actively performs the responsibility of "medical consumption expert” to enhance the health of Chinese people.
2. Focus on superior products
From the simple dream of "Return to natural and healthy comfortable life", based on the pure belief of "incomparable reverence andinfinite love for cotton", Purcotton starts with the exclusively developed pure cotton spunlace non-woven fabric and takes “medicineclose to life, Purcotton care for health” as its brand proposition to adhere to bring better natural health products for more consumersand improve the universal access to quality products.Through continuous research and development, the Company innovates anhydrous process and gauze atomized washing process toachieve zero discharge of washing products. Compared with the process bath ratio 1:10 of traditional gauze washing products, thebath ratio of atomized washing process can reach 1:0.6, which greatly optimizes the existing washing process, saves a lot of waterresources and reduces sewage discharge, and also brings consumers more cost-effective and safer products.
3. Green development
To comply with the development trend of the Times and respond to the national double-carbon action, the Company activelyparticipates in the training and learning of enterprise low-carbon management and emission reduction strategy, and accumulates itsown strength to achieve carbon neutrality. The Company actively adjusts the energy structure and industrial structure, vigorouslypromotes green office and builds green factories, and practices the "double carbon action" through multiple paths, striving to achievethe goal of "carbon peak" and "carbon neutral" 3 years and 10 years ahead of the national target respectively.
4. Public empathy
The Company actively organizes and participates in social welfare activities, including flood relief efforts in Henan province,donation of materials for poor students in Qinghai Province, and protection against epidemic in Xi'an. The Company fully fulfills itscorporate social responsibility and enables social harmony and development. In January 2021, Hebei Province was hit by theCOVID-19 pandemic for a second time. The Company donated materials worth of 600,000 yuan (incl. N95 masks and disposableprotective clothing) to Pandemic Prevention and Control Office of Luancheng District, Shijiazhuang City, aiming to help HebeiProvince to fight against the pandemic. In late July 2021, Henan Province was hit by torrential rains that touched the nation'sattention. The Company and its subsidiary, Purcotton, donated about 18 million yuan worth of pure cotton tissues, wet tissues, babydiapers, sanitary pads and other disaster relief materials to Henan Women's Federation and Henan Women's and Children'sDevelopment Foundation through Shenzhen Women's Federation and Shenzhen Women's and Children's Development Foundation.Winner Medical donated about 3.3 million yuan worth of medical and health materials to Zhengzhou Welfare Institute, ZhengzhouWomen's and Children's Hospital, the First Affiliated Hospital of Zhengzhou University and other institutions and hospitals. InDecember 2021, the Company cooperated with two large chain medical supermarket enterprises to organize epidemic preventionmaterials worth about RMB 4 million to Xi'an and donated them to Shaanxi Red Cross Society to ensure the smooth implementationof epidemic prevention by front-line management and support personnel. The Company cooperated in the anti-epidemic blockbusterChinese Doctors, an adaption of the real events of Wuhan Jinyitan Hospital, to publicize the hard work and great contributions ofmedical staff to the public and promote the positive energy of the society.
III. Consolidation and expansion of poverty alleviation achievements and rural revitalization
During the reporting period, the Company did not carry out poverty alleviation and rural revitalization work.
Section 6 Important Issues
I. Performance in fulfilling commitments
1. Commitments fulfilled within and not fulfilled by the end of the reporting period by the Company’s actual controller, shareholders, related parties,acquirer and other commitment parties
√Applicable □ Not applicable
| Source of commitment | Commitment party | Commitment type | Commitment content | Commitment time | Time limit for acceptance | Degree of performance |
Commitmentmade in theacquisitionreport or equitychange report
| Commitment made in the acquisition report or equity change report |
Commitmentmade at thetime of assetrestructuring
| Commitment made at the time of asset restructuring |
Commitmentmade at thetime of IPO orrefinancing
| Commitment made at the time of IPO or refinancing | Wenjian Group, Li Jianquan, Xie Ping, Li Xiaoyuan | IPO lock-up | Within 36 months from the date of listing and trading of the Company's shares, the Company shall not transfer or entrust others to manage the shares directly or indirectly held by the Company that have been issued before the initial public offering of the Company's shares, nor shall the Company repurchase such shares | September 17, 2020 | 36 months from the date of listing of the Company's shares | In performance |
| Xiamen Leyuan, Xiamen Yutong, Xiamen Huikang, Xiamen Zepeng, Sequoia Xinyuan, Shenzhen Capital Group Co., Ltd., Kangli Investment, Fang Xiuyuan, Xu Xiaodan, Liu Weiwei, Wang Ying, Chen Huixuan, Yin Wenling | IPO lock-up | Within 12 months from the date of listing and trading of the Company's shares, the Company shall not transfer or entrust others to manage the shares directly or indirectly held by it that have been issued before the initial public offering of the Company's shares, nor shall the Company repurchase such shares | September 17, 2020 | 12 months from the date of listing of the Company's shares | The performance has been completed | |
| Wenjian Group, Li Jianquan, Xie Ping, Li Xiaoyuan, Fang Xiuyuan, Xu Xiaodan, Liu Weiwei, Wang Ying, Cheng Huixuan, Yin Wenling | IPO reduction | 1. If the shares held are reduced within two years after the lock-up period, the reduction price shall not be lower than the issue price; 2. Within 6 months after the listing of the Company, if the closing price of the Company's shares for 20 consecutive trading days is lower than the issue price (if the right or dividend is excluded during this period, the issue price will be adjusted accordingly), or the closing price of the Company's shares is lower than the issue price (if the right or dividend is excluded during this period, the issue price will be adjusted accordingly) at the end of 6 months after the listing (March 17, 2021, it will be postponed in case of non-trading day), the lock-up period of the issuer shares held | September 17, 2020 | Within two years after the expiration of the lock-up period | In performance |
by the Company is automatically extended for 6 monthsWinner Group, LiJianquan, XiamenLeyuan, SequoiaXinyuan
| Winner Group, Li Jianquan, Xiamen Leyuan, Sequoia Xinyuan | IPO reduction | The Company guarantees that it will abide by the relevant laws, regulations, departmental rules and normative documents in force at that time on the reduction of shareholders' shares of the listed company. When reducing the shares of the Company that held by the enterprise issued prior to the IPO, the enterprise will inform the Company in advance of the reduction intention and the number of shares to be reduced in written form, The Company shall make an announcement three trading days in advance. Except when the shares of the Company held by the enterprise are less than 5%. | September 17, 2020 | Long-term performance | In performance |
Winner Medical,Winner Group, LiJianquan
| Winner Medical, Winner Group, Li Jianquan | Share repurchase upon IPO fraudulent listing | There is no fraudulent issuance in the process of this public offering and listing on GEM; if the securities regulatory authority, the stock exchange or the judicial authority determines that the Company has fraudulent issuance behavior, which has a significant and substantial impact on judging whether the issuer meets the issuance conditions stipulated by law, the Company will be punished by the securities regulatory authority, the stock exchange or the judicial authority Within 5 working days from the date when the illegal facts are finally confirmed by the stock exchange or the judicial authority and other competent authority, the stock repurchase plan shall be formulated in accordance with the relevant laws and regulations and the Articles of Association, and all the new shares issued and listed shall be repurchased | September 17, 2020 | Long-term performance |
Winner Medical,Winner Group, LiJianquan, FangXiuyuan, Xu Xiaodan,Liu Weiwei, WangYing, Chen Huixuan,Yin Wenling, Bi Qun,Zhou Xiaoxiong, LiangWenzhao, GuoZhenwei, Ye Yangjing
| Winner Medical, Winner Group, Li Jianquan, Fang Xiuyuan, Xu Xiaodan, Liu Weiwei, Wang Ying, Chen Huixuan, Yin Wenling, Bi Qun, Zhou Xiaoxiong, Liang Wenzhao, Guo Zhenwei, Ye Yangjing | Commitment to assume compensation liability according to law | There are no false records, misleading statements or major omissions in the prospectus. We assume individual and joint legal liabilities for its authenticity, accuracy and integrity. | September 17, 2020 | Long-term performance | In performance |
Winner Medical,Winner Group, LiJianquan, FangXiuyuan, Xu Xiaodan,Chen Huixuan, YinWenling
| Winner Medical, Winner Group, Li Jianquan, Fang Xiuyuan, Xu Xiaodan, Chen Huixuan, Yin Wenling | Commitment to stabilize the Company's share price in IPO | If the stock price of the Company is lower than the net assets per share within three years after listing, the Company and the relevant responsible parties can choose to implement the following measures separately or comprehensively to stabilize the stock price according to the actual situation of the Company and the stock market when the preconditions for starting the measures to stabilize the stock price are met: 1. The Company repurchases the shares; 2. The controlling shareholders and actual controllers increase their holdings of the Company’s shares; 3. Non-independent directors and senior managers who hold posts and receive remuneration in the Company increase their holdings of the Company's shares; 4. Laws, administrative regulations, normative documents and other methods approved by CSRC. | September 17, 2020 | 36 months from the date of listing of the Company's shares | In performance |
Winner Medical
| Winner Medical | Measures and commitments to make up for the diluted immediate return | In order to reduce the impact of the diluted immediate return of this issuance, we promise to take the following measures: (I) accelerate the investment progress of the investment projects with raised funds and strive to achieve the expected benefits of the project as soon as possible; (II) Strengthen the supervision of investment projects with raised funds to ensure the reasonable and legal use of raised funds; (III) Strengthen the operating | September 17, 2020 | Long-term performance | In performance |
management and internal control, improve the operating efficiency and profitability; (IV)Ensure a sustainable and stable profit distribution system and strengthen the returnmechanism for investorsWinner Group, LiJianquan
| Winner Group, Li Jianquan | Measures and commitments to make up for the diluted immediate return | I/Our company shall not interfere in the Company's operation and management activities beyond my/our authority, encroach on the Company's interests, transfer interests to other units or individuals free of charge or under unfair conditions, damage the Company's interests in other ways, or use the Company's assets to engage in investment and consumption activities unrelated to my/our performance of duties. I/Our company promise to fully, completely and timely perform measures of making up for return established by the Company and any commitment on measures of making up for return. If I / our company violates such commitment, I / our company is willing to bear corresponding legal responsibility according to law. | September 17, 2020 | Long-term performance | In performance |
Fang Xiuyuan, XuXiaodan, ChenHuixuan, Yin Wenling,Bi Qun, ZhouXiaoxiong, LiangWenzhao, GuoZhenwei,
| Fang Xiuyuan, Xu Xiaodan, Chen Huixuan, Yin Wenling, Bi Qun, Zhou Xiaoxiong, Liang Wenzhao, Guo Zhenwei, | Measures and commitments to make up for the diluted immediate return | 1. Shall not transfer interests to other units or individuals free of charge or under unfair conditions, or damage the Company's interests in other ways. 2. Restrict my duty consumption behavior as a director, supervisor and senior manager of the Company. 3. Shall not use the Company's assets to engage in investment and consumption activities unrelated to my performance of the duties of a director, supervisor and senior manager. 4. Actively promote the improvement of the Company's salary system. 5. When introducing the Company's equity incentive scheme (if any), the vesting conditions of equity incentive shall be linked with the implementation of the Company's measures to make up for the return. 6. I promise that I will issue supplementary commitments in accordance with the latest provisions of the CSRC, and actively promote the Company to make new provisions. 7. I promise to fully, completely and timely perform measures of making up for return established by the Company and any commitment I have made on measures of making up for return. | September 17, 2020 | Long-term performance | In performance |
Winner Medical
| Winner Medical | Commitment on profit distribution policy | In order to better protect the legitimate rights and interests of investors, the Company deliberated and passed the revised Articles of Association (Draft) at the second extraordinary general meeting of shareholders in 2020. The Company determines the dividend return plan for the next three years: on the premise that the net profit attributable to the shareholders of the parent company is positive in the current year, the Company will make profit distribution at least once a year, and the board of directors may propose the Company to make interim profit distribution according to the Company's profit and capital demand. The Company shall give priority to cash dividend for profit distribution when it is under the conditions of cash dividend. | September 17, 2020 | 36 months from the date of listing of the Company's shares | In performance |
Winner Group, LiJianquan
| Winner Group, Li Jianquan | Commitment on avoiding horizontal competition | 1. As of the date of this letter of commitment, our company / I do not and will not engage in or participate in the same or similar business and activities as the Company's main business in any form, and will not engage in or participate in the same or similar business and activities as the Company's main business through investment in other companies. 2. Our company / I undertake not to engage in or participate in any business or activities that are the same or similar to the Company's main business. 3. If the Company further expands its business scope on the basis of its existing business, and other enterprises under our company’s / my control at that time have already produced and operated the business, the other enterprises under our company’s / my control at that time shall sell the relevant | September 17, 2020 | Long-term performance | In performance |
business, and the Company has the priority to purchase the relevant business under thesame commercial conditions. 4. If the Company further expands its business scope on thebasis of its existing business, and other enterprises under our company’s / my control atthat time have not yet produced and operated the business, the other enterprises under ourcompany’s / my control at that time will not engage in the same or similar business andactivities as the new business of the Company.
Winner Group, LiJianquan
| Winner Group, Li Jianquan | Commitment to indemnity for the recovery of social security accumulation fund | The social security and housing provident fund management departments of the Company and its major subsidiaries have issued the Certificate, confirming that from January 1, 2017 to December 31, 2019, the Company and its subsidiaries have no records of administrative punishment for violating laws and regulations related to labor, social security and housing provident fund. If Winner Medical and its subsidiaries are required to make up the social insurance premium or housing provident fund that should be paid by Winner Medical and its subsidiaries for their employees or claimed by their employees, or if litigation, arbitration and administrative punishment from relevant administrative departments occur therefrom, our company / I shall unconditionally bear the full amount of the fees that should be made up and bear the corresponding liability for compensation, to ensure that Winner Medical and its subsidiaries will not suffer any losses as a result. The controlling shareholders and the actual controller of the Company, Li Jianquan, are jointly and severally liable to each other. | September 17, 2020 | Long-term performance | In performance |
Winner Group, LiJianquan
| Winner Group, Li Jianquan | Compensation commitment for demolition of Yichang Winner’s properties | The land and real estate authorities of Yichang Winner issued a certificate to confirm that the relevant subsidiaries did not violate laws and rules during the reporting period; moreover, the total area of the two properties accounts for a small proportion of the total area of the Company's and its subsidiaries' own properties. Even if there is a risk of demolition, it will not have a significant adverse impact on the production and operation of the Company and its subsidiaries. In response to the relocation risk of the two properties, the controlling shareholders and the actual controller of the issuer make a commitment: “if such properties are required to be demolished within a time limit by the competent government department, the controlling shareholders and the actual controller agree to timely, unconditionally and fully compensate all losses caused to the Company.” | September 17, 2020 | Long-term performance | In performance |
Winner Medical,Winner Group, LiJianquan, FangXiuyuan, Xu Xiaodan,Liu Weiwei, WangYing, Chen Huixuan,Yin Wenling, Bi Qun,Zhou Xiaoxiong, LiangWenzhao, GuoZhenwei, Ye Yangjing
| Winner Medical, Winner Group, Li Jianquan, Fang Xiuyuan, Xu Xiaodan, Liu Weiwei, Wang Ying, Chen Huixuan, Yin Wenling, Bi Qun, Zhou Xiaoxiong, Liang Wenzhao, Guo Zhenwei, Ye Yangjing | Restraint measures for IPO failure to perform the contract | If we fail to fulfill the relevant commitments disclosed in the prospectus, we will publicly explain the specific reasons for our failure to fulfill the commitments in the general meeting of shareholders and the information disclosure media designated by the CSRC, and apologize to all shareholders and public investors. If we fail to fulfill the relevant public commitments, the proceeds will belong to the Company. If we cause losses to the Company or its shareholders or other investors due to our failure to fulfill the relevant public commitments, we will compensate the relevant losses to the Company or its shareholders or other investors in accordance with the law. At the same time, we shall not transfer the shares (if any) of the issuer directly or indirectly held by us during the period of assuming the aforesaid compensation liability. If we fail to bear the above compensation liability, we will stop receiving salary (if any) within 10 days after the occurrence of the above matters until I fulfill the relevant public commitments. If we fail to fulfill, have been unable to fulfill or have been unable to fulfill our commitments on time due to objective reasons beyond our control, such as changes of relevant laws and regulations, policy, natural disasters and other force majeure, we will take the following | September 17, 2020 | Long-term performance | In performance |
measures: (1) timely and fully disclose the specific reasons why we fail to fulfill, havebeen unable to fulfill or have been unable to fulfill our commitments on time; (2) Putforward supplementary commitments or alternative commitments to the Company'sinvestors (relevant commitments shall be subject to relevant approval procedures inaccordance with laws, regulations and Articles of Association), so as to protect the rightsand interests of investors as far as possibleEquityincentivecommitment
| Equity incentive commitment |
Othercommitmentsmade to minorshareholders ofthe Company
| Other commitments made to minor shareholders of the Company |
Whether thecommitment isfulfilled ontime
| Whether the commitment is fulfilled on time | Yes |
2. In case the Company’s asset or project saw earning expectation, and the reporting period is stillcovered by the term of the earning expectation, the Company shall make a statement about the assetor project fulfilling the original expectation and the reasons thereof.
□ Applicable √ Not applicable
II. Non-operating occupation of funds of listed companies by controlling shareholders andother related parties
□ Applicable √ Not applicable
No non-operating occupation of funds of listed companies by controlling shareholders and other related parties during the reportingperiod.III. Illegal external guarantee
□ Applicable √ Not applicable
No illegal external guarantee of the Company during the reporting period.IV. Statement of the board of directors on the latest "non-standard audit report"
□ Applicable √ Not applicable
V. Statement of the board of directors, the board of supervisors and independent directors (ifany) on the "non-standard audit report" of the accounting firm during the reporting period
□ Applicable √ Not applicable
VI. Statement of the board of directors on accounting policy, accounting estimate change orsignificant accounting error correction in the reporting period
√Applicable □ Not applicable
The Accounting Standards for Business Enterprises No. 21 - Leases (hereinafter referred to as “New Lease Standards”) revised andpublished by the Ministry of Finance in December 2018 requires implementation from January 1, 2019 by the enterprises listed bothat home and abroad and the enterprises listed overseas and using international financial reporting standards or Accounting Standardsfor Business Enterprises to prepare financial statements, and requires implementation from January 1, 2021 by other enterprisesimplementing the Accounting Standards for Business Enterprises. On April 16, 2021, the Company held the 19th meeting of thesecond board of directors, deliberated and passed the Proposal on the Change in the Company's Accounting Policy, and agreed tochange the Company's accounting policy in accordance with the foregoing provisions of the Ministry of Finance. For details, pleaserefer to Announcement of the Change in the Company’s Accounting Policy (Announcement No.: 2021-014) disclosed by theCompany on the website (http://www.cninfo.com.cn) on April 20, 2021.
VII. Explanation of changes in the scope of combined financial statements when comparedwith financial statements of the previous fiscal year
□ Applicable √ Not applicable
No changes in the scope of combined financial statements in the reporting period.VIII. Appointment of and dismissal of accounting firmsAccounting firm currently appointed
| Name of domestic accounting firm | BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP |
Remuneration of domestic accounting firm (RMB 10,000)
| Remuneration of domestic accounting firm (RMB 10,000) | 110 |
Continuous years of audit services of domestic accounting firm
| Continuous years of audit services of domestic accounting firm | 8 |
Name of certified public accountant of domestic accounting firm
| Name of certified public accountant of domestic accounting firm | Cheng Jin, Wu Lihong |
Continuous years of audit services provided by certified publicaccountants of domestic accounting firm
| Continuous years of audit services provided by certified public accountants of domestic accounting firm | 1 |
Has the accounting firm been changed?
□Yes √No
Engagement of internal control audit accounting firm, financial consultant or sponsor
□ Applicable √ Not applicable
IX. Delisting confronted upon disclosure of the annual report
□ Applicable √ Not applicable
X. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization of the Company during the reporting period.XI. Major litigation, arbitration matters
√Applicable □ Not applicable
| Basic information of litigation (arbitration) | Amount involved (RMB 10,000) | Whether to form estimated liabilities | Progress of litigation (arbitration) | Trial result and influence of litigation (arbitration) | Implementation of litigation (arbitration) judgment | Date of disclosure | Disclosure index |
Winner Medicalv. the People'sGovernment ofZijin County,arbitration case ofcontract dispute[Case No.: (2019)G.G.Z Zi No.095]
| Winner Medical v. the People's Government of Zijin County, arbitration case of contract dispute [Case No.: (2019) G.G.Z Zi No. 095] | 55,565.53 | No | The Company has received the award of (2019) G.G.Z Zi No. 095 Case. | The ruling confirmed that the original Investment Agreement was terminated, and the People's Government of Zijin County had to bear the lawyer's fees, legal costs and other expenses totaling 2.6553 million yuan, return 3 million yuan of land transfer deposit to the Company, and compensate for economic losses of 550 million yuan. The land, above-ground buildings, equipment and facilities and relevant supporting materials of Heyuan Winner investment and construction project were handed over to the People's Government of Zijin County. There will be no adverse impact on the Company. | As of the disclosure date of the report, the Company has received the land transfer deposit of RMB 3 million and compensation of RMB 319 million returned by the People's Government of Zijin County. The Company has handed over the project land, above-ground buildings, equipment and facilities and relevant supporting materials to the People's Government of Zijin County. |
Winner Medical(Tianmen),ShenzhenPurcotton,Winner Medical(Huanggang) v.China NationalIntellectualPropertyAdministration,administrativedispute case ofpatentinvalidation
| Winner Medical (Tianmen), Shenzhen Purcotton, Winner Medical (Huanggang) v. China National Intellectual Property Administration, administrative dispute case of patent invalidation | 0 | No | On June 2, 2020, the Reexamination and Invalidation Department of the Patent Office of China National Intellectual Property Administration issued the Decision on Examination of Invalidation Request, which decided to declare the patent right of “production method of cotton non-woven medical dressings” (Patent No. ZL200510033147.1, valid until February 6, 2025) invalid. On August 26, 2020, Winner Medical | If the lawsuit does not support the plaintiff's claim, the patent is finally found to be invalid. The reason for the patent invalidation decision is not that the Company and / or the patent infringes the rights of others. Therefore, the Company can still use the technology and will not have a significant adverse impact on the normal production and operation of the company. | N/A |
(Tianmen), ShenzhenPurcotton, WinnerMedical (Huanggang)filed a lawsuit to BeijingIntellectual PropertyCourt in accordancewith the provisions ofthe Patent Law forrevocation of the patentinvalidation decision.On August 28, 2020,Beijing IntellectualProperty Court issuedthe Notice ofAcceptance ofAdministrative Case.On December 27, 2021,the court of firstinstance rejected theplaintiff's request. OnJanuary 14, 2022, theplaintiff filed a requestfor a second trial.
Summary ofsmall claims filedby othercompanies orsubsidiaries asplaintiffs that donot meetdisclosurestandards forsignificantlawsuits
| 1,851.47 | No | In the process of proceeding according to the litigation process, some cases have not yet been settled, some have been won by the plaintiffs, and some have been settled through mediation | No significant impacts on the Company's production and operation | The closed cases are being performed |
Summary ofsmall claims filedby othercompanies orsubsidiaries asdefendants thatdo not meetdisclosurestandards forsignificantlawsuits
| 1,362.58 | No | In the process of proceeding according to the litigation process, some cases have not yet been settled, some have been won by the plaintiffs, and some have been settled through mediation | No significant impacts on the Company's production and operation | The closed cases are being performed |
XII. Punishment and rectification
□ Applicable √ Not applicable
No punishment or rectification of the Company during the reporting period.
XIII. Credit conditions of the company, its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XIV. Major related transactions
1. Related transactions related to daily operation
□ Applicable √ Not applicable
There were no connected transactions related to the daily operation of the Company during the reporting period.
2. Related transactions arising from the acquisition or sale of assets or equity
□ Applicable √ Not applicable
No Related transactions arising from the acquisition or sale of assets or equity of the Company during the reporting period.
3. Related transactions of joint foreign investment
□ Applicable √ Not applicable
No related transactions of joint foreign investment of the Company during the reporting period.
4. Related claims and debts
□ Applicable √ Not applicable
No related claims and debts of the Company during the reporting period.
5. Transactions with the finance companies by the Company and the finance companies with which it has
affiliated relationships
□ Applicable √ Not applicable
There are no deposits, loans, credits or other financial operations between the Company and the finance companies with which it hasaffiliated relationships and related parties.
6. Transactions between the finance companies controlled by the Company and related parties
□ Applicable √ Not applicable
There are no deposits, loans, credits or other financial operations between the finance companies controlled by the Company andrelated parties.
7. Other major related transactions
□ Applicable √ Not applicable
No other major related transactions of the Company during the reporting period.
XV. Major contracts and their performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship of the Company during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
No contracting of the Company during the reporting period.
(3) Lease
√Applicable □ Not applicable
Lease descriptionThe Company's major leased assets are self-operated store leases, all of which have been recognized as right-of-use assets inaccordance with the requirements of the new leasing standards, and there are no other significant leased assets. For details, seeSection 10.Financial Statements \7. Notes to consolidated financial statements \25. Right-of-use assets.Project bringing the profits or losses more than 10% of the total profits of the Company in the reporting period to the Company
□ Applicable √ Not applicable
No lease project bringing the profits or losses more than 10% of the total profits of the Company in the reporting period to theCompany during the reporting period.
2. Major guarantee
□ Applicable √ Not applicable
No major guarantees of the Company during the reporting period.
3. Entrusted cash asset management
(1) Information of entrusted financial management
√Applicable □ Not applicable
Overview of entrusted financial management during the reporting period
Unit: RMB ’0,000
| Specific type | Source of funds for entrusted financial management | Amount incurred in entrusted financial management | Outstanding balance | Overdue amount not recovered | The amount of impairment for overdue financial management |
Bank financialproducts
| Bank financial products | Self-owned funds | 87,499.68 | 39,599.68 | 0 | 0 |
Bank financialproducts
| Bank financial products | Proceeds | 402,600.00 | 137,500.00 | 0 | 0 |
Trust financialproducts
| Trust financial products | Self-owned funds | 188,000.00 | 133,000.00 | 0 | 0 |
Total
| Total | 678,099.68 | 310,099.68 | 0 | 0 |
Specific circumstance of high-risk entrusted financing with significant single amount or with low security and poor liquidity
□ Applicable √ Not applicable
The entrusted financing is expected not to recover the principal or has other circumstances that may cause impairment
□ Applicable √ Not applicable
(2) Information of entrusted loans
□ Applicable √ Not applicable
The Company had no entrusted loan during the reporting period.
4. Other major contracts
□ Applicable √ Not applicable
No other major contracts of the Company during the reporting period.
XVI. Description of other important events
√Applicable □ Not applicable
| S/N | Item | Disclosure time | Title of announcement | Announcement No. | Designated information disclosure media |
| 1 | Impairment of assets | April 20, 2021 | Announcement on Provision for Impairment of Assets in 2020 | 2021-020 | China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily, and http://www.cninfo.com.cn |
| 2 | Profit distribution | April 20, 2021 | Announcement on 2020 Annual Profit Distribution Plan | 2021-009 | |
| May 14, 2021 | Announcement on Implementation of Annual Allocation of Rights and Interests in 2020 | 2021-026 | |||
| 3 | General election of board of directors, board of supervisors and senior manageme | June 28, 2021 | Announcement on General Election of the Board of Directors | 2021-033 | |
| June 28, 2021 | Announcement on General Election of the Board of Supervisors | 2021-034 | |||
| July 14, 2021 | Announcement on General Election of Employee Representative Supervisor | 2021-039 | |||
| July 14, 2021 | Announcement on Completion of General Election of Board of Directors, Board of Supervisors and | 2021-042 |
| nt | Senior Management and on Departure of Some Personnel |
| 4 | Reduction of holding-shares | September 22, 2021 | Announcement on Pre-disclosure of the Plan of Reduction of Holdings by Major Shareholders | 2021-055 |
| September 28, 2021 | Simplified Report of Change in Equity | / | ||
| October 16, 2021 | Announcement on Completion of the Plan of Reduction of Holdings by Major Shareholders | 2021-061 | ||
| September 25, 2021 | Announcement on Pre-disclosure of the Plan of Reduction of Holdings by Major Shareholders | 2021-057 | ||
| December 10, 2021 | Announcement on Half Time of the Plan of Reduction of Holdings by Major Shareholders and on Change of Shareholding to 1% | 2021-070 | ||
| January 25, 2022 | Announcement on Expiration of the Plan of Reduction of Holdings by Major Shareholders | 2022-003 |
| 5 | Share repurchase | September 22, 2021 | Announcement on Stock Repurchase Plan | 2021-054 |
| September 29, 2021 | Share Repurchase Report | 2021-058 | ||
| September 29, 2021 | Announcement on Initial Repurchase of Company Shares | 2021-059 | ||
| November 10, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-060 | ||
| November 2, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-067 | ||
| December 2, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-069 | ||
| February 9, 2022 | Announcement on Progress of Repurchase of Company Shares | 2022-005 | ||
| February 16, 2022 | Announcement on Repurchase of Company Shares up to 1% of the Total Share Capital | 2022-066 |
| 6 | Equity acquisition Note | November 4, 2022 | Announcement on Acquisition of 55% Equity of Longterm Medical | 2022-014 |
Note: On April 8, 2022, the Company held the fifth meeting of the Third Board of Directors and deliberated and approved theProposal on Acquisition of 55% Equity of Longterm Medical. The Company plans to use its own funds of RMB 727.54 million foracquisition of 55% equity of Longterm Medical from Mr. Wu Kangping, Ms. Huang Lepei and Mr. Wu Di. Longterm Medical ismainly engaged in the R&D, production and sales of high-end wound dressing (including silicone rubber foam, hydrocolloid, silicagel, aquogel, film application and stoma products). This acquisition is highly consistent with the Company's strategy of building aleading position in high-end wound dressing industry and will form scale and synergistic effect with the advantages of both parties incustomers, markets, products, R&D and production.XVII. Major events of subsidiaries
□ Applicable √ Not applicable
Section 7 Changes in Shares and Shareholders
I. Change in shares
1. Change in shares
Unit: share
| Before this change | Increase/decrease (+, -) | After this change | |||||||
| Quantity | Proportion | New issue of shares | Share donation | Share capital increase from reserved funds | Others | Subtotal | Quantity | Proportion | |
I. Restricted shares
| I. Restricted shares | 381,502,451 | 89.45% | (91,063,603) | (91,063,603) | 290,438,848 | 68.10% |
1. State shareholding
| 1. State shareholding |
2. State legal person
shareholding
| 2. State legal person shareholding | 8,535,444 | 2.00% | (8,535,444) | (8,535,444) | 0 | 0.00% |
3. Other domestic
holdings
| 3. Other domestic holdings | 82,525,726 | 19.35% | (82,525,726) | (82,525,726) | 0 | 0.00% |
Wherein: domestic legalperson shareholding
| Wherein: domestic legal person shareholding | 77,572,687 | 18.19% | (77,572,687) | (77,572,687) | 0 | 0.00% |
Domestic natural personshareholding
| Domestic natural person shareholding | 12,655 | 0.00% | (12,655) | (12,655) | 0 | 0.00% |
Fund financial products,etc.
| Fund financial products, etc. | 4,940,384 | 1.16% | (4,940,384) | (4,940,384) | 0 | 0.00% |
4. Foreign shareholding
| 4. Foreign shareholding | 290,441,281 | 68.10% | (2,433) | (2,433) | 290,438,848 | 68.10% |
Wherein: foreign legalperson shareholding
| Wherein: foreign legal person shareholding | 290,441,281 | 68.10% | (2,433) | (2,433) | 290,438,848 | 68.10% |
Foreign natural personshareholding
| Foreign natural person shareholding |
II. Unrestricted shares
| II. Unrestricted shares | 44,989,857 | 10.55% | 91,063,603 | 91,063,603 | 136,053,460 | 31.90% |
1. RMB common share
| 1. RMB common share | 44,989,857 | 10.55% | 91,063,603 | 91,063,603 | 136,053,460 | 31.90% |
2. Foreign shares listed
in China
| 2. Foreign shares listed in China |
3. Foreign shares listed
abroad
| 3. Foreign shares listed abroad |
4. Others
| 4. Others |
III. Total amount ofshares
| III. Total amount of shares | 426,492,308 | 100.00% | 0 | 0 | 426,492,308 | 100.00% |
Causes for change in shares
√Applicable □ Not applicable
The Company's shares were listed in China on September 17, 2020. The shares held by some pre-IPO shareholders and the sharesheld by the strategic placement platform at the time of IPO shall be restricted on sales within 12 months from the date of IPO trading,and the partial shares obtained by the investors in the off-line allotment shall be restricted on sales within 6 months from the date ofIPO trading. The aforementioned shares were listed and traded on the expiry of the restricted stock trade period on March 17, 2021and September 17, 2021 respectively, and therefore some of the shares with restricted sales conditions are converted into thosewithout restricted sales conditions.Approval of changes in shares
□ Applicable √ Not applicable
Transfer of share changes
□ Applicable √ Not applicable
Influence of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the companyand other financial indexes in the most recent year and the most recent period
□ Applicable √ Not applicable
Other information the company deems necessary or required by the securities regulatory authorities to disclose
□ Applicable √ Not applicable
2. Changes in restricted shares
√Applicable □ Not applicable
Unit: share
| Shareholder's name | Number of restricted shares at the beginning of the period | Number of restricted shares increased in current period | Number of shares released from restricted sale in current period | Number of restricted shares at the end of the period | Reasons for restricted sale | The proposed date of lifting the restricted sale |
Winner Group Limited
| Winner Group Limited | 290,438,848 | 0 | 0 | 290,438,848 | Restricted sale before IPO | September 17, 2023 |
Beijing SequoiaXinyuan EquityInvestment Center(limited partnership)
| Beijing Sequoia Xinyuan Equity Investment Center (limited partnership) | 34,500,000 | 0 | 34,500,000 | 0 | Restricted sale before IPO | September 17, 2021 |
Xiamen LeyuanInvestment Partnership(Limited Partnership)
| Xiamen Leyuan Investment Partnership (Limited Partnership) | 21,371,232 | 0 | 21,371,232 | 0 | Restricted sale before IPO | September 17, 2021 |
Xiamen YutongInvestment Partnership(Limited Partnership)
| Xiamen Yutong Investment Partnership (Limited Partnership) | 11,334,400 | 0 | 11,334,400 | 0 | Restricted sale before IPO | September 17, 2021 |
Shenzhen CapitalGroup Co., Ltd.
| Shenzhen Capital Group Co., Ltd. | 8,492,308 | 0 | 8,492,308 | 0 | Restricted sale before IPO | September 17, 2021 |
Xiamen HuikangInvestment Partnership(Limited Partnership)
| Xiamen Huikang Investment Partnership (Limited Partnership) | 6,844,432 | 0 | 6,844,432 | 0 | Restricted sale before IPO | September 17, 2021 |
Xiamen ZepengInvestment Partnership(limited partnership)
| Xiamen Zepeng Investment Partnership (limited partnership) | 3,511,088 | 0 | 3,511,088 | 0 | Restricted sale before IPO | September 17, 2021 |
IPO offline placementof restricted shares
| IPO offline placement of restricted shares | 2,965,739 | 0 | 2,965,739 | 0 | 10% of the final allocated accounts of the offline issuance part of the IPO are restricted according to the lottery results | March 17, 2021 |
China InternationalCapital CorporationLimited - ChinaMerchants Bank - CICCFengzhong No.26employee participatingin the GEM strategicplacement collectiveasset management plan
| China International Capital Corporation Limited - China Merchants Bank - CICC Fengzhong No.26 employee participating in the GEM strategic placement collective asset management plan | 2,044,404 | 0 | 2,044,404 | 0 | Restricted sale of strategic placement | September 17, 2021 |
Total
| Total | 381,502,451 | 0 | 91,063,603 | 290,438,848 | -- | -- |
II. Securities issuance and listing
1. Securities issuance (excluding preferred shares) during the reporting period
□ Applicable √ Not applicable
2. Description of changes in the total number of shares, shareholder structure, asset and liabilitystructure of the Company
□ Applicable √ Not applicable
3. Existing internal employee shares
□ Applicable √ Not applicable
III. Shareholders and actual controllers
1. Number and shareholding of the company's shareholders
Unit: share
| Total number of common shareholders at the end of the reporting period | 34,414 | Total number of common shareholders at the end of the previous month before the disclosure date of the annual report | 33,769 | Total number of preferred shareholders with voting rights restored at the end of the reporting period (if any) (see Note 9) | 0 | Total number of preferred shareholders with voting rights restored at the end of the previous month before the disclosure date of the annual report (if any) (see Note 9) | 0 | Total number of shareholders holding special voting shares (if any) | 0 |
Shareholders holding more than 5% shares or top 10 shareholders
Shareholders holding more than 5% shares or top 10 shareholdersShareholder'sname
| Shareholder's name | Shareholder nature | Shareholding ratio | Number of shares held at the end of the reporting period | Increase or decrease during the reporting period | Number of shares held with limited sales conditions | Number of shares held with unlimited sales conditions | Pledge, mark or frozen | |
| Status of shares | Quantity | |||||||
Winner GroupLimited
| Winner Group Limited | Overseas legal person | 68.10% | 290,438,848 | 0 | 290,438,848 | 0 |
BeijingSequoiaXinyuanEquityInvestmentCenter (limitedpartnership)
| Beijing Sequoia Xinyuan Equity Investment Center (limited partnership) | Domestic non-state legal person | 6.83% | 29,148,100 | (5,351,900) | 0 | 29,148,100 |
XiamenLeyuanInvestmentPartnership(LimitedPartnership)
| Xiamen Leyuan Investment Partnership (Limited Partnership) | Domestic non-state legal person | 4.14% | 17,661,500 | (3,709,732) | 0 | 17,661,500 |
XiamenYutongInvestmentPartnership(LimitedPartnership)
| Xiamen Yutong Investment Partnership (Limited Partnership) | Domestic non-state legal person | 2.20% | 9,365,435 | (1,968,965) | 0 | 9,365,435 |
ShenzhenCapital GroupCo., Ltd.
| Shenzhen Capital Group Co., Ltd. | State legal person | 1.99% | 8,492,308 | 0 | 0 | 8,492,308 |
XiamenHuikangInvestmentPartnership(Limited
| Xiamen Huikang Investment Partnership (Limited | Domestic non-state legal person | 1.33% | 5,655,963 | (1,188,469) | 0 | 5,655,963 |
Partnership)
XiamenZepengInvestmentPartnership(limitedpartnership)
| Xiamen Zepeng Investment Partnership (limited partnership) | Domestic non-state legal person | 0.68% | 2,903,288 | (607,800) | 0 | 2,903,288 |
SchroderInvestmentManagement(Hong Kong)Limited -Schroder ISF*China A. Fund(Exchange)
| Schroder Investment Management (Hong Kong) Limited - Schroder ISF* China A. Fund (Exchange) | Overseas legal person | 0.45% | 1,937,125 | 1,937,125 | 0 | 1,937,125 |
Hong KongSecuritiesClearingCompany Ltd.
| Hong Kong Securities Clearing Company Ltd. | Overseas legal person | 0.24% | 1,005,311 | 1,005,311 | 0 | 1,005,311 |
Pan Yingjun
| Pan Yingjun | Domestic natural person | 0.14% | 600,000 | 0 | 600,000 |
Situation of strategicinvestors or general legalpersons becoming the top 10shareholders due to theallotment of new shares (ifany) (see note 4)
| Situation of strategic investors or general legal persons becoming the top 10 shareholders due to the allotment of new shares (if any) (see note 4) | None |
Description of theabove-mentionedshareholder association orconcerted action
| Description of the above-mentioned shareholder association or concerted action | None |
Description of the aboveshareholders involved inentrusting / entrusted votingright and waiver of votingright
| Description of the above shareholders involved in entrusting / entrusted voting right and waiver of voting right | None |
Special note on theexistence of repurchasespecial accounts among theTop 10 shareholders (if any)(see Note 10)
| Special note on the existence of repurchase special accounts among the Top 10 shareholders (if any) (see Note 10) | As of December 31, 2021, the Company held 3,280,091 shares in its special account for repurchase of Securities of Winner Medical Co., Ltd. |
Shareholding of top 10 shareholders with unlimited sales conditions
Shareholding of top 10 shareholders with unlimited sales conditionsShareholder's name
| Shareholder's name | Number of shares with unlimited sales conditions held at the end of the reporting period | Share type | |
| Share type | Quantity | ||
Beijing Sequoia XinyuanEquity Investment Center(limited partnership)
| Beijing Sequoia Xinyuan Equity Investment Center (limited partnership) | 29,148,100 | RMB common share | 29,148,100 |
Xiamen Leyuan InvestmentPartnership (LimitedPartnership)
| Xiamen Leyuan Investment Partnership (Limited Partnership) | 17,661,500 | RMB common share | 17,661,500 |
Xiamen Yutong InvestmentPartnership (LimitedPartnership)
| Xiamen Yutong Investment Partnership (Limited Partnership) | 9,365,435 | RMB common share | 9,365,435 |
Shenzhen Capital GroupCo., Ltd.
| Shenzhen Capital Group Co., Ltd. | 8,492,308 | RMB common share | 8,492,308 |
Xiamen Huikang InvestmentPartnership (LimitedPartnership)
| Xiamen Huikang Investment Partnership (Limited Partnership) | 5,655,963 | RMB common share | 5,655,963 |
Xiamen Zepeng Investment
| Xiamen Zepeng Investment | 2,903,288 | RMB | 2,903,288 |
| Partnership (limited partnership) | common share |
Schroder InvestmentManagement (Hong Kong)Limited - Schroder ISF*China A. Fund (Exchange)
| Schroder Investment Management (Hong Kong) Limited - Schroder ISF* China A. Fund (Exchange) | 1,937,125 | RMB common share | 1,937,125 |
Hong Kong SecuritiesClearing Company Ltd.
| Hong Kong Securities Clearing Company Ltd. | 1,005,311 | RMB common share | 1,005,311 |
Pan Yingjun
| Pan Yingjun | 600,000 | RMB common share | 600,000 |
China International CapitalCorporation Limited - ChinaMerchants Bank - CICCFengzhong No.26 employeeparticipating in the GEMstrategic placementcollective asset managementplan
| China International Capital Corporation Limited - China Merchants Bank - CICC Fengzhong No.26 employee participating in the GEM strategic placement collective asset management plan | 551,287 | RMB common share | 551,287 |
Description of theassociation or concertedaction between top 10 publicshareholders with unlimitedsales conditions, andbetween top 10 publicshareholders with unlimitedsales conditions and top 10shareholders
| Description of the association or concerted action between top 10 public shareholders with unlimited sales conditions, and between top 10 public shareholders with unlimited sales conditions and top 10 shareholders | None |
Description of participationin securities margin tradingbusiness (if any) (see note 5)
| Description of participation in securities margin trading business (if any) (see note 5) | Shareholder Pan Yingjun holds 600,000 shares through a credit securities account. |
Whether the company has a voting rights differential arrangement
□ Applicable √ Not applicable
Whether the Company’s top 10 common shareholders and op 10 common shareholders with unlimited sales conditions agreed on arepurchase transaction during the reporting period
□Yes √No
The Company’s top 10 common shareholders and op 10 common shareholders with unlimited sales conditions did not agree on arepurchase transaction during the reporting period
2. Controlling shareholders of the Company
Nature of controlling shareholder: foreign holdingType of controlling shareholder: legal person
| Controlling shareholder's name | Legal Representative / Head of Unit | Date of establishment | Organization code | Main business |
Winner Group Limited
| Winner Group Limited | Li Jianquan | April 08, 2003 | 124887 | Investment management |
Equity of other domestic andforeign listed companiescontrolled and participatedby controlling shareholdersduring the reporting period
| Equity of other domestic and foreign listed companies controlled and participated by controlling shareholders during the reporting period | None |
Change of controlling shareholders during the reporting period
□ Applicable √ Not applicable
No change in controlling shareholders during the reporting period.
3. Actual controller of the Company and person acting in concert
Nature of actual controller: foreign natural personType of actual controller: natural person
| Actual controller’s name | Relationship with actual controller | Nationality | Whether to obtain the right of residence in other countries or regions |
Li Jianquan
| Li Jianquan | Self | Hong Kong, China | No |
Main occupations and positions
| Main occupations and positions | Chairman and general manager |
Domestic and foreign listedcompanies that have held sharesin the past 10 years
| Domestic and foreign listed companies that have held shares in the past 10 years | Winner Medical was listed on the US Over the Counter Bulletin Board on December 16, 2005, transferred to the New York Stock Exchange on October 8, 2009, transferred to the Nasdaq Stock Exchange on April 6, 2010, and delisted on December 26, 2012. Li Jianquan holds more than 50% of the voting rights of Winner Medical, forming actual control over Winner Medical. |
Changes in actual controller during the reporting period
□ Applicable √ Not applicable
No change in actual controller during the reporting period.Block diagram of property right and control relationship between the company and actual controller
The actual controller controls the company through trust or other asset management methods
□ Applicable √ Not applicable
4. The total amount of shares pledged by the controlling shareholder or the first majority shareholder
and the person acting in concert accounts for 80% of the Company's shares held
□ Applicable √ Not applicable
5. Other legal person shareholders holding more than 10%
□ Applicable √ Not applicable
Li JianquanWinner Medical Co., Ltd.
Winner Medical Co., Ltd.Winner Group Limited
6. Restricted share reduction of controlling shareholders, actual controller, reorganizers and other
commitment subjects
□ Applicable √ Not applicable
IV. Specific implementation of share repurchase during the reporting period
Implementation progress of share repurchase
√Applicable □ Not applicable
| Scheme disclosure time | Number of shares to be repurchased (shares) | Proportion in total capital stock | Amount to be repurchased (RMB 10,000) | Proposed repurchase period | Repurchase purpose | Number of shares repurchased (shares) | Proportion of number of shares repurchased in the underlying stocks involved in the equity incentive plan (if any) |
September 22,2021
| September 22, 2021 | 2,586,200~4,310,300 | 0.6064%~1.0107% | 30,000.00~50,000.00 | September 17, 2021 ~ September 16, 2022 | Equity incentive or employee stock ownership plan | 3,280,091 |
Implementation progress of reducing repurchased shares by centralized competitive bidding
□ Applicable √ Not applicable
Section 8 Preferred Shares-related Information
□ Applicable √ Not applicable
No preferred shares of the Company during the reporting period.
Section 8
Preferred Shares-related
Information
□ Applicable ?Not applicable
Section 9 Bond-related Information
□ Applicable √ Not applicable
□ Applicable ?Not applicable
Section 9Bond-related Information
Section 10 Financial Statements
Section 10Financial reports
100%meatycotton
I. Audit Report
| Type of audit opinion | Standard unqualified opinions |
Date of signing of audit report
| Date of signing of audit report | April 20, 2022 |
Name of audit institution
| Name of audit institution | BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP |
Document number of audit report
| Document number of audit report | XKSBZ [2022] No.ZI10154 |
Name of certified public accountants
| Name of certified public accountants | Cheng Jin, Wu Lihong |
Main body of audit reportI. Audit opinion
We have audited the accompanying financial statements of Winner Medical Co., Ltd. (hereinafter referred to "Winner Medical"),including the consolidated and parent company balance sheet as of December 31, 2021, consolidated and parent company incomestatement, consolidated and parent company cash flow statement and consolidated and parent company statement of change in equityfor the year 2021 and notes to financial statements.In our opinion, the attached financial statements of Winner Medical have been prepared in accordance with the provisions of theAccounting Standards for Business Enterprises and give a true and fair view of the consolidated and parent company financialposition as of December 31, 2021 and the consolidated and parent company financial performance and cash flows for the year 2021in all significant terms.
II. Basis for audit opinion
We conducted our audit in accordance with the Standards on Auditing for Certified Public Accountants. The “Responsibility ofcertified public accountants for audit of financial statements” in the audit report further states our responsibility under the Standards.We were independent of Winner Medical and fulfill other responsibilities in terms of professional ethics according to the code ofprofessional ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.
III. Key audit itemsThe key audit items are the matters that we consider the most important to audit the current financial statements according to ourprofessional judgment. These items shall be dealt with in the context of an audit of the financial statements as a whole and theformation of audit opinions, and we do not express an opinion on these items separately.The key audit items we identified in the audit are summarized as follows:
| Key audit items | How is the item handled in the audit |
Existence of monetary funds and tradable financial assets
Existence of monetary funds and tradable financial assets
Please refer to Notes III, (X) and Notes V, (I), (II) to theconsolidated financial statements.
On December 31, 2021, the balance of Winner Medical'smonetary funds and tradable financial assets was about RMB
7.404 billion, accounting for 55.81% of the total assets; on
December 31, 2020, the balance of Winner Medical's monetaryfunds and tradable financial assets was about RMB 8.294 billion,accounting for 63.79% of the total assets, which is important tothe financial statements. Therefore, we identify the existence ofcash and cash equivalents and tradable financial assets as keyaudit item.
| Please refer to Notes III, (X) and Notes V, (I), (II) to the consolidated financial statements. On December 31, 2021, the balance of Winner Medical's monetary funds and tradable financial assets was about RMB 7.404 billion, accounting for 55.81% of the total assets; on December 31, 2020, the balance of Winner Medical's monetary funds and tradable financial assets was about RMB 8.294 billion, accounting for 63.79% of the total assets, which is important to the financial statements. Therefore, we identify the existence of cash and cash equivalents and tradable financial assets as key audit item. | Our main audit procedures for the existence of monetary funds and tradable financial assets include: 1. Understand the key internal controls related to the existence of monetary funds and tradable financial assets, evaluate the design of these controls, determine whether they are implemented, and test the operation effectiveness of the relevant internal controls; 2. Obtain the bank account statements and check with the book balance. Obtain the bank reconciliation statements for the items with differences, understand the nature of the reconciliation items, and test the major reconciliation items; 3. Implement confirmation procedures for monetary funds and tradable financial assets; 4. Check large amounts of monetary funds; inspect product specifications and purchase receipts for tradable financial |
assets;
5. Obtain corporate credit reports and check whether there are
pledge guarantee matters related to monetary funds;
6. Implement the bank settlement account information inquiry
procedure to confirm the accuracy and completeness of thebank settlement account provided to us by the management.Recognition of revenue
Recognition of revenue
For details of the accounting policies for income recognition andthe analysis of income, please refer to Notes III, (XXVII) andNotes V, (XXXVI) to the consolidated financial statements.
The income of Winner Medical mainly comes from the business ofmedical consumables and healthy consumer goods.Compared with the previous period, due to the control of domesticepidemic and the entry of competitors, the income of medicalconsumables decreased by about 56.03% and the income ofhealthy consumer goods increased by about 15.27%. The revenuechanged greatly. Therefore, we identified revenue recognition as akey audit matter.
| For details of the accounting policies for income recognition and the analysis of income, please refer to Notes III, (XXVII) and Notes V, (XXXVI) to the consolidated financial statements. The income of Winner Medical mainly comes from the business of medical consumables and healthy consumer goods. Compared with the previous period, due to the control of domestic epidemic and the entry of competitors, the income of medical consumables decreased by about 56.03% and the income of healthy consumer goods increased by about 15.27%. The revenue changed greatly. Therefore, we identified revenue recognition as a key audit matter. | Our main audit procedures for the revenue recognition of Winner Medical include: 1. Understand the key internal controls related to the recognition of income, evaluate the design of these controls, determine whether they are implemented, and test the operation effectiveness of the relevant internal controls; 2. Check the major sales contracts, understand the terms or conditions of the major contracts, and evaluate whether the income recognition policy conforms to the provisions of the Accounting Standards for Business Enterprises; 3. Implement substantive analysis procedures for income and gross profit margin according to major products, identify whether there are significant or abnormal fluctuations, and find out the causes of fluctuations; 4. Combine with the confirmation of accounts receivable, and confirm the sales volume of the current period to the main customers by sampling; 5. For domestic sales income, check supporting documents related to income recognition by sampling, including sales contract, order, sales invoice, delivery note and customer receipt, etc.; for export income, check supporting documents such as sales contract, export declaration form, bill of landing by sampling; 6. Carry out cutoff test on the income recognized before and after the balance sheet date to evaluate whether the income is recognized in the appropriate period. |
Accounting of fixed assets and construction in progress
Accounting of fixed assets and construction in progress
Please refer to Notes III, (XVI), (XVII) and Notes V, (XI), (XII) tothe consolidated financial statements.
On December 31, 2021, the net fixed assets were RMB 1.477billion, accounting for about 11.14% of the total assets; onDecember 31, 2020, the net fixed assets were about RMB 1.401billion, accounting for 10.77% of the total assets; The constructionin progress increased by about RMB 155 million.
Fixed assets and construction in progress are an important part ofthe consolidated balance sheet of Winner Medical. The time pointwhen the construction in progress reaches the predeterminedusable condition and transfer into the fixed assets, the method ofdepreciation calculation of the fixed assets, the judgment of theuseful life of the fixed assets and the net realizable value of thefixed assets will impact the book value of the fixed assets andconstruction in progress, and they are of importance to theconsolidated financial statements.
| Please refer to Notes III, (XVI), (XVII) and Notes V, (XI), (XII) to the consolidated financial statements. On December 31, 2021, the net fixed assets were RMB 1.477 billion, accounting for about 11.14% of the total assets; on December 31, 2020, the net fixed assets were about RMB 1.401 billion, accounting for 10.77% of the total assets; The construction in progress increased by about RMB 155 million. Fixed assets and construction in progress are an important part of the consolidated balance sheet of Winner Medical. The time point when the construction in progress reaches the predetermined usable condition and transfer into the fixed assets, the method of depreciation calculation of the fixed assets, the judgment of the useful life of the fixed assets and the net realizable value of the fixed assets will impact the book value of the fixed assets and construction in progress, and they are of importance to the consolidated financial statements. | Our main audit procedures for the accounting of fixed assets and construction in progress of Winner Medical include: 1. On the basis of sampling, check the progress of important fixed assets and construction in progress to determine whether they exist, and pay attention to whether there are idle or damaged fixed assets; 2. Select samples of fixed assets and construction in progress increased or decrease in current year, and check supporting documents such as contracts, invoices, acceptance certificates, collection or payment orders, etc.; 3. Check the ownership or control of fixed assets; 4. Check whether the depreciation policies and methods comply with the standards, whether the estimated service life and estimated net residual value are reasonable, and calculate whether the depreciation is correct; 5. On the basis of sampling, check the date of acceptance report, check debugging and production records, and judge the appropriateness of the time point when the construction |
IV. Other information
The management of Winner Medical (hereinafter referred to as the management) is responsible for other information, including theinformation covered in Winner Medical’s annual report for 2021, but excluding the financial statements and our audit report.Our audit opinion on the financial statements does not cover other information and we does not express any form of verificationconclusions on other information.Combined with our audit of the financial statements, it’s our responsibility to read other information. In this process, we shallconsider whether material inconsistency or material misstatement of other information with the financial statements or the situationunderstood by us in the audit process.Based on the work that has been executed by us, we should report the fact of material misstatement confirmed in other information.We have nothing to report in this regard.
V. Responsibility of management and government for the financial statements
The management is responsible for preparing the financial statements in accordance with the provisions of the Accounting Standardsfor Business Enterprises and giving a true and fair view; designing, implementing and maintaining necessary internal control, so thatthe financial statements are free from material misstatement, whether due to fraud or error.When preparing the financial statements, the management is responsible for evaluating the going-concern ability of Winner Medical,disclosing the matters related to the going-concern (if applicable) and using the going-concern assumption, unless the managementplans to liquidate Spectrum Chemical or stop operation or no other realistic options.The government is responsible for supervising the financial reporting process of Winner Medical.
VI. Responsibility of certified public accountants for audit of financial statements
Our goal is to obtain reasonable guarantee on inexistence of the material misstatement of the financial statements whether due tofraud or error and to issue an audit report including audit opinion. Reasonable guarantee is high level guarantee, but it cannotguarantee that a material misstatement of the audit executed according to the auditing standards will always be found. Misstatementmay be caused by fraud or error. If the reasonable expected misstatements may affect the economic decision made by the financialstatement user according to the financial statements, whether individually or collectively, the misstatement is generally believedmaterial.We made professional judgment and maintained professional skepticism in the audit process according to the auditing standards. Wealso performed the following:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design andimplement audit procedures to address these risks, and obtain sufficient and appropriate audit evidence as the basis for audit opinion.Since the fraud may involve collusion, forge, intentional omission, false statement or above internal control, the risk of materialmisstatement caused by fraud is higher than that caused by error.(II) Understand internal control related to the audit in order to design audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the internal control.(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relevant disclosure.(IV) Draw a conclusion about the appropriateness of the going-concern assumption used by the management. Meanwhile, draw aconclusion about the major uncertainty of the matters or circumstances possibly resulting in major concerns about the going-concernability of Winner Medical according to the audit evidence obtained. If we draw a conclusion that major uncertainty exists, theauditing standards require us to request the statement user to notice relevant disclosure in the financial statements in the audit report;in case of insufficient disclosure, we should issue a modified audit report. Our conclusion is made on the basis of the informationavailable as of the audit report date. However, the future matters or circumstances may result in ontinuing operations failure ofWinner Medical.(V) Evaluate the overall presentation (including disclosure), structure and content of the financial statements and evaluate whetherthe financial statements give a true and fair view of relevant transactions and matters.
(VI) Obtain adequate and appropriate audit evidence for the financial information of Winner Medical entity or business activities toexpress an opinion on the consolidated financial statements. We are responsible for guiding, supervising and implementing the groupaudit and take full responsibility for the audit opinions.We communicate with the governance on the planned audit scope, time arrangement and major audit findings, including the internalcontrol defects identified by us in the audit and worthing attention.We also provide the governance with a statement of compliance with the ethical requirements relating to our independence andcommunicate with the governance with respect to all relations and other matters that may reasonably be considered to affect ourindependence and the relevant precautions (if applicable).From the items communicated with the governance, we determine which items are most important to the audit of current financialstatements and thus constitute the key audit items. We describe these items in our audit report, unless the disclosure of these mattersis prohibited by law or regulation, or, in rare circumstances, we determine that we should not communicate the items in our auditreport if it is reasonably expected that the negative consequences of communicating an item outweigh the benefits in the publicinterest.
| BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP | Chinese Certified Public Accountant: Cheng Jin (Project Partner) |
| Chinese Certified Public Accountant: Wu Lihong |
Shanghai, China
| Shanghai, China | April 20, 2022 |
II. Financial statements
Unit of statements in financial notes: RMB
1. Consolidated Balance Sheet
Prepared by: Winner Medical Co., Ltd.
Unit: yuan
| Item | December 31, 2021 | December 31, 2020 |
Current assets:
| Current assets: |
Cash and cash equivalents
| Cash and cash equivalents | 4,273,938,326.82 | 4,162,539,245.78 |
Deposit reservation for balance
| Deposit reservation for balance |
Lending funds
| Lending funds |
Tradable financial assets
| Tradable financial assets | 3,130,529,709.10 | 4,131,178,589.44 |
Derivative financial assets
| Derivative financial assets |
Notes receivable
| Notes receivable |
Accounts receivable
| Accounts receivable | 775,546,589.42 | 844,317,708.12 |
Accounts receivable financing
| Accounts receivable financing | 9,940,272.21 | 18,182,662.70 |
Advances to suppliers
| Advances to suppliers | 110,462,594.38 | 124,031,239.05 |
Insurance premiums receivables
| Insurance premiums receivables |
Reinsurance premium receivable
| Reinsurance premium receivable |
Receivable reserve for reinsurancecontract
| Receivable reserve for reinsurance contract |
Other receivables
| Other receivables | 329,179,077.01 | 458,174,652.72 |
Including: Interest receivable
| Including: Interest receivable |
| Dividends receivable |
Monetary assets purchased underresale agreements
| Monetary assets purchased under resale agreements |
Inventory
| Inventory | 1,597,377,043.99 | 1,216,486,940.21 |
Contract assets
| Contract assets |
Assets held for sales
| Assets held for sales |
Non-current assets due within ayear
| Non-current assets due within a year |
Other current assets
| Other current assets | 118,759,825.56 | 35,184,227.09 |
Total current assets
| Total current assets | 10,345,733,438.49 | 10,990,095,265.11 |
Non-current assets:
| Non-current assets: |
Loans and advances
| Loans and advances |
Debt investment
| Debt investment |
Other debt investments
| Other debt investments |
Long-term receivables
| Long-term receivables |
Long-term equity investment
| Long-term equity investment | 16,949,801.24 | 13,424,230.41 |
Other equity instrument investments
| Other equity instrument investments |
Other non-current financial assets
| Other non-current financial assets |
Investment in real estates
| Investment in real estates |
Fixed assets
| Fixed assets | 1,477,320,848.63 | 1,400,749,050.00 |
Construction in progress
| Construction in progress | 216,096,622.30 | 61,383,340.97 |
Productive biological assets
| Productive biological assets |
Oil and gas assets
| Oil and gas assets |
Right-of-use assets
| Right-of-use assets | 531,735,443.44 |
Intangible assets
| Intangible assets | 265,700,890.65 | 208,325,103.79 |
Development expenditure
| Development expenditure |
Goodwill
| Goodwill |
Long-term deferred expenses
| Long-term deferred expenses | 174,785,770.83 | 121,335,007.33 |
Deferred income tax assets
| Deferred income tax assets | 122,716,382.99 | 143,132,351.08 |
Other non-current assets
| Other non-current assets | 115,571,001.80 | 63,807,415.75 |
Total non-current assets
| Total non-current assets | 2,920,876,761.88 | 2,012,156,499.33 |
Total assets
| Total assets | 13,266,610,200.37 | 13,002,251,764.44 |
Current liabilities
| Current liabilities |
Short-term loans
| Short-term loans | 150,071,416.66 |
Borrowings from the Central Bank
| Borrowings from the Central Bank |
Borrowing funds
| Borrowing funds |
Tradable monetary liabilities
| Tradable monetary liabilities |
Derivative financial liabilities
| Derivative financial liabilities |
Notes payable
| Notes payable | 36,200,130.04 | 29,418,100.00 |
Accounts payable
| Accounts payable | 734,521,490.60 | 726,577,306.94 |
Advance from customers
| Advance from customers |
Contract liabilities
| Contract liabilities | 341,175,665.42 | 530,188,257.63 |
Monetary assets sold for repurchase
| Monetary assets sold for repurchase |
Deposits from customers andinterbank
| Deposits from customers and interbank |
Acting trading securities
| Acting trading securities |
Acting underwriting securities
| Acting underwriting securities |
Payroll payable
| Payroll payable | 184,681,184.52 | 169,957,077.81 |
Taxes payable
| Taxes payable | 93,859,069.68 | 444,381,369.49 |
Other payables
| Other payables | 443,946,028.46 | 352,543,008.89 |
Including: Interest payable
| Including: Interest payable |
| Dividends payable |
Fees and commissions payable
| Fees and commissions payable |
Dividend payable for reinsurance
| Dividend payable for reinsurance |
Liabilities held for sales
| Liabilities held for sales |
Non-current liabilities due withinone year
| Non-current liabilities due within one year | 216,181,531.82 |
Other current liabilities
| Other current liabilities | 24,165,400.50 | 23,638,266.47 |
Total current liabilities
| Total current liabilities | 2,074,730,501.04 | 2,426,774,803.89 |
Non-current liabilities
| Non-current liabilities |
Reserve fund for insurancecontracts
| Reserve fund for insurance contracts |
Long-term loans
| Long-term loans |
Bonds payable
| Bonds payable |
Including: Preferred stock
| Including: Preferred stock |
Perpetual bond
| Perpetual bond |
Lease liabilities
| Lease liabilities | 381,808,925.09 |
Long-term payable
| Long-term payable |
Long-term payroll payable
| Long-term payroll payable |
Estimated liabilities
| Estimated liabilities |
Deferred income
| Deferred income | 109,625,401.82 | 94,921,260.87 |
Deferred income tax liabilities
| Deferred income tax liabilities | 13,337,159.68 | 12,165,608.24 |
Other non-current liabilities
| Other non-current liabilities |
Total non-current liabilities
| Total non-current liabilities | 504,771,486.59 | 107,086,869.11 |
Total liabilities
| Total liabilities | 2,579,501,987.63 | 2,533,861,673.00 |
Owner's equity:
| Owner's equity: |
Capital stock
| Capital stock | 426,492,308.00 | 426,492,308.00 |
Other equity instruments
| Other equity instruments |
Including: Preferred stock
| Including: Preferred stock |
Perpetual bond
| Perpetual bond |
Additional paid-in capital
| Additional paid-in capital | 4,549,621,096.81 | 4,481,709,983.24 |
Less: treasury stock
| Less: treasury stock | 257,992,366.68 |
Other comprehensive income
| Other comprehensive income | (1,556,935.43) | (1,111,035.08) |
Special reserve
| Special reserve |
Surplus reserve
| Surplus reserve | 420,212,778.13 | 420,212,778.13 |
General risk reserve
| General risk reserve |
Undistributed profit
| Undistributed profit | 5,538,135,285.97 | 5,126,630,011.14 |
Total shareholders’ equity attributableto the owners of parent company
| Total shareholders’ equity attributable to the owners of parent company | 10,674,912,166.80 | 10,453,934,045.43 |
Noncontrolling interest
| Noncontrolling interest | 12,196,045.94 | 14,456,046.01 |
Total shareholders’ equity
| Total shareholders’ equity | 10,687,108,212.74 | 10,468,390,091.44 |
Total liabilities and equity
| Total liabilities and equity | 13,266,610,200.37 | 13,002,251,764.44 |
| Legal representative: Li Jianquan | Chief Financial Officer: Fang Xiuyuan | Head of accounting office: Wu Kezhen |
2. Balance sheet of parent company
Unit: yuan
| Item | December 31, 2021 | December 31, 2020 |
Current assets:
| Current assets: |
Cash and cash equivalents
| Cash and cash equivalents | 3,580,157,428.37 | 3,669,286,043.43 |
Tradable financial assets
| Tradable financial assets | 2,234,720,701.50 | 3,779,510,798.34 |
Derivative financial assets
| Derivative financial assets |
Notes receivable
| Notes receivable |
| Accounts receivable | 502,217,638.86 | 679,644,839.39 |
Accounts receivable financing
| Accounts receivable financing | 13,669,076.67 | 26,281,743.01 |
Advances to suppliers
| Advances to suppliers | 1,991,853,374.17 | 1,141,185,179.88 |
Other receivables
| Other receivables | 218,099,656.42 | 361,160,139.37 |
Including: Interest receivable
| Including: Interest receivable |
Dividends receivable
| Dividends receivable |
Inventory
| Inventory | 297,766,006.91 | 244,264,320.15 |
Contract assets
| Contract assets |
Assets held for sales
| Assets held for sales |
Non-current assets due within ayear
| Non-current assets due within a year |
Other current assets
| Other current assets | 54,582,482.01 | 2,986,600.60 |
Total current assets
| Total current assets | 8,893,066,364.91 | 9,904,319,664.17 |
Non-current assets:
| Non-current assets: |
Debt investment
| Debt investment |
Other debt investments
| Other debt investments |
Long-term receivables
| Long-term receivables |
Long-term equity investment
| Long-term equity investment | 921,600,485.39 | 738,074,914.56 |
Other equity instrument investments
| Other equity instrument investments |
Other non-current financial assets
| Other non-current financial assets |
Investment in real estates
| Investment in real estates |
Fixed assets
| Fixed assets | 65,889,542.40 | 47,677,210.41 |
Construction in progress
| Construction in progress | 2,671,206.77 | 625,889.08 |
Productive biological assets
| Productive biological assets |
Oil and gas assets
| Oil and gas assets |
Right-of-use assets
| Right-of-use assets | 61,525,338.09 |
Intangible assets
| Intangible assets | 10,941,470.75 | 11,093,821.43 |
Development expenditure
| Development expenditure |
Goodwill
| Goodwill |
Long-term deferred expenses
| Long-term deferred expenses | 27,181,217.32 | 4,270,865.79 |
Deferred income tax assets
| Deferred income tax assets | 15,829,010.17 | 18,761,956.53 |
Other non-current assets
| Other non-current assets | 50,585,930.78 | 7,420,450.61 |
Total non-current assets
| Total non-current assets | 1,156,224,201.67 | 827,925,108.41 |
Total assets
| Total assets | 10,049,290,566.58 | 10,732,244,772.58 |
Current liabilities
| Current liabilities |
Short-term loans
| Short-term loans | 120,071,416.66 |
Tradable monetary liabilities
| Tradable monetary liabilities |
Derivative financial liabilities
| Derivative financial liabilities |
Notes payable
| Notes payable | 8,757,000.00 |
Accounts payable
| Accounts payable | 744,765,121.01 | 734,959,933.53 |
Advance from customers
| Advance from customers |
Contract liabilities
| Contract liabilities | 274,656,460.55 | 483,370,540.77 |
Payroll payable
| Payroll payable | 57,013,025.70 | 57,086,457.61 |
Taxes payable
| Taxes payable | 68,694,400.06 | 332,551,933.15 |
Other payables
| Other payables | 257,073,388.79 | 261,840,719.70 |
Including: Interest payable
| Including: Interest payable |
Dividends payable
| Dividends payable |
Liabilities held for sales
| Liabilities held for sales |
Non-current liabilities due withinone year
| Non-current liabilities due within one year | 14,395,962.64 |
Other current liabilities
| Other current liabilities | 13,678,129.69 | 14,855,171.12 |
| Total current liabilities | 1,430,276,488.44 | 2,013,493,172.54 |
Non-current liabilities
| Non-current liabilities |
Long-term loans
| Long-term loans |
Bonds payable
| Bonds payable |
Including: Preferred stock
| Including: Preferred stock |
Perpetual bond
| Perpetual bond |
Lease liabilities
| Lease liabilities | 48,977,325.26 |
Long-term payable
| Long-term payable |
Long-term payroll payable
| Long-term payroll payable |
Estimated liabilities
| Estimated liabilities |
Deferred income
| Deferred income | 20,071,043.26 | 22,798,583.10 |
Deferred income tax liabilities
| Deferred income tax liabilities | 3,648,582.23 | 1,426,619.75 |
Other non-current liabilities
| Other non-current liabilities |
Total non-current liabilities
| Total non-current liabilities | 72,696,950.75 | 24,225,202.85 |
Total liabilities
| Total liabilities | 1,502,973,439.19 | 2,037,718,375.39 |
Owner's equity:
| Owner's equity: |
Capital stock
| Capital stock | 426,492,308.00 | 426,492,308.00 |
Other equity instruments
| Other equity instruments |
Including: Preferred stock
| Including: Preferred stock |
Perpetual bond
| Perpetual bond |
Additional paid-in capital
| Additional paid-in capital | 4,575,027,859.16 | 4,507,116,745.59 |
Less: treasury stock
| Less: treasury stock | 257,992,366.68 |
Other comprehensive income
| Other comprehensive income |
Special reserve
| Special reserve |
Surplus reserve
| Surplus reserve | 411,397,111.21 | 411,397,111.21 |
Undistributed profit
| Undistributed profit | 3,391,392,215.70 | 3,349,520,232.39 |
Total shareholders’ equity
| Total shareholders’ equity | 8,546,317,127.39 | 8,694,526,397.19 |
Total liabilities and equity
| Total liabilities and equity | 10,049,290,566.58 | 10,732,244,772.58 |
3. Consolidated Income Statement
Unit: yuan
| Item | Year 2021 | Year 2020 |
I. Total revenue
| I. Total revenue | 8,037,420,812.91 | 12,533,945,946.63 |
Including: Revenue
| Including: Revenue | 8,037,420,812.91 | 12,533,945,946.63 |
Interest revenue
| Interest revenue |
Premium earned
| Premium earned |
Fee and commission income
| Fee and commission income |
II. Total costs
| II. Total costs | 6,727,857,440.84 | 7,829,145,023.94 |
Including: Costs of sales
| Including: Costs of sales | 4,028,246,646.17 | 5,070,422,301.76 |
Interest expense
| Interest expense |
Fee and commission expense
| Fee and commission expense |
Surrender value
| Surrender value |
Net payments for insuranceclaims
| Net payments for insurance claims |
Net reserve fund extracted forinsurance liability contracts
| Net reserve fund extracted for insurance liability contracts |
Bond insurance expense
| Bond insurance expense |
Reinsurance costs
| Reinsurance costs |
Taxes and surcharges
| Taxes and surcharges | 65,390,051.16 | 116,569,221.35 |
Selling and marketing
| Selling and marketing | 1,989,167,789.56 | 1,575,163,912.49 |
General and administrative
| General and administrative | 454,389,948.90 | 436,965,446.22 |
| Research and development | 298,162,366.16 | 411,383,173.80 |
Financial expenses
| Financial expenses | (107,499,361.11) | 218,640,968.32 |
Including: Interest expense
| Including: Interest expense | 434,844.98 | 3,614,778.86 |
Interest revenue
| Interest revenue | 137,186,581.16 | 23,340,834.75 |
Plus: Other incomes
| Plus: Other incomes | 102,353,195.81 | 70,291,282.76 |
Income from investment (lossexpressed with “-”)
| Income from investment (loss expressed with “-”) | 103,237,547.98 | 21,585,123.16 |
Including: Income frominvestment in joint venture andcooperative enterprise
| Including: Income from investment in joint venture and cooperative enterprise | 3,525,570.83 | 4,565,754.26 |
Income from derecognition offinancial assets measured atamortized cost
| Income from derecognition of financial assets measured at amortized cost |
Foreign exchange gain (lossexpressed with “-”)
| Foreign exchange gain (loss expressed with “-”) |
Net exposure of hedging gain(loss expressed with “-”)
| Net exposure of hedging gain (loss expressed with “-”) |
Income from fair value changes(loss expressed with “-”)
| Income from fair value changes (loss expressed with “-”) | 58,474,468.36 | 11,178,589.44 |
Credit impairment losses (lossexpressed with “-”)
| Credit impairment losses (loss expressed with “-”) | (574,000.57) | (35,941,692.83) |
Assets impairment losses (lossexpressed with “-”)
| Assets impairment losses (loss expressed with “-”) | (100,665,232.92) | (240,186,749.52) |
Gain ondisposal of assets (lossexpressed with “-”)
| Gain ondisposal of assets (loss expressed with “-”) | 3,250,448.27 | 9,765.86 |
III. Operating profits (loss expressed with“-”)
| III. Operating profits (loss expressed with “-”) | 1,475,639,799.00 | 4,531,737,241.56 |
Plus: Non-revenue
| Plus: Non-revenue | 6,040,019.07 | 4,227,507.56 |
Less: Non-operating expense
| Less: Non-operating expense | 18,919,306.79 | 33,505,825.07 |
IV. Total profits (total loss expressedwith “-”)
| IV. Total profits (total loss expressed with “-”) | 1,462,760,511.28 | 4,502,458,924.05 |
Less: Income tax expenses
| Less: Income tax expenses | 225,315,643.94 | 679,909,863.81 |
V. Net profits (net loss expressed with“-”)
| V. Net profits (net loss expressed with “-”) | 1,237,444,867.34 | 3,822,549,060.24 |
(I) Classified by business continuity
| (I) Classified by business continuity |
1. Net profits from continuing
operations(net loss expressed with“-”)
| 1. Net profits from continuing operations(net loss expressed with “-”) | 1,237,444,867.34 | 3,822,549,060.24 |
2. Net profits from discontinued
operations (net loss expressed with“-”)
| 2. Net profits from discontinued operations (net loss expressed with “-”) |
(II) Classified by ownership
| (II) Classified by ownership |
1. Net profit (loss) attributable to
common shareholders
| 1. Net profit (loss) attributable to common shareholders | 1,239,320,067.26 | 3,810,412,504.40 |
2. Net profits (loss) attributable to
noncontrolling interest
| 2. Net profits (loss) attributable to noncontrolling interest | (1,875,199.92) | 12,136,555.84 |
VI. After-tax other comprehensiveincome
| VI. After-tax other comprehensive income | (830,700.50) | (2,003,671.28) |
Net amount of after-tax othercomprehensive income attributed tocommon shareholders
| Net amount of after-tax other comprehensive income attributed to common shareholders | (445,900.35) | (1,155,658.95) |
(I) Other comprehensive income notreclassified as profit or loss
| (I) Other comprehensive income not reclassified as profit or loss |
1. Changes from defined benefit
plans remeasurement
| 1. Changes from defined benefit plans remeasurement |
2. Other comprehensive income
notclassified as profit or loss based
| 2. Other comprehensive income notclassified as profit or loss based |
on equity method
3. Changes in fair value for other
equity instruments investment
| 3. Changes in fair value for other equity instruments investment |
4. Changes in fair value for the
enterprise credit risks
| 4. Changes in fair value for the enterprise credit risks |
5. Others
| 5. Others |
(II) Other comprehensive incomereclassified as profit or loss
| (II) Other comprehensive income reclassified as profit or loss | (445,900.35) | (1,155,658.95) |
1. Other comprehensive income
reclassified as profit or losse basedon equity method
| 1. Other comprehensive income reclassified as profit or losse based on equity method |
2. Changes in the fair value of other
debt investment
| 2. Changes in the fair value of other debt investment |
3. The amount of financial asset
reclassified as other comprehensiveincome
| 3. The amount of financial asset reclassified as other comprehensive income |
4. Provisions for other debt
investment impairment
| 4. Provisions for other debt investment impairment |
5. Cash flow hedging instrument
| 5. Cash flow hedging instrument |
6. Foreign currency reporting
translation discrepancy
| 6. Foreign currency reporting translation discrepancy | (445,900.35) | (1,155,658.95) |
7. Others
| 7. Others |
Net amount of after-tax othercomprehensive income after taxattributed to noncontrolling interestminority shareholders
| Net amount of after-tax other comprehensive income after tax attributed to noncontrolling interest minority shareholders | (384,800.15) | (848,012.33) |
VII. Total comprehensive income
| VII. Total comprehensive income | 1,236,614,166.84 | 3,820,545,388.96 |
Total comprehensive incomeattributable to common shareholders
| Total comprehensive income attributable to common shareholders | 1,238,874,166.91 | 3,809,256,845.45 |
Total comprehensive incomeattributed to noncontrolling interest
| Total comprehensive income attributed to noncontrolling interest | (2,260,000.07) | 11,288,543.51 |
VIII. Earnings per share:
| VIII. Earnings per share: |
(I) Basic EPS
| (I) Basic EPS | 2.91 | 9.80 |
(II) Diluted EPS
| (II) Diluted EPS | 2.91 | 9.79 |
In the case of merger and acquisition under the same control, the net profits of acquired entity prior to acquisition is 0 yuan duringthe current period. The net profits of the acquired entity prior to the acquisition is 0 yuan in the prior period.
| Legal representative: Li Jianquan | Chief Financial Officer: Fang Xiuyuan | Head of accounting office: Wu Kezhen |
4. Income statement of parent company
Unit: yuan
| Item | Year 2021 | Year 2020 |
I. Revenue
| I. Revenue | 3,797,082,652.58 | 8,890,110,957.62 |
Subtract: Costs
| Subtract: Costs | 2,437,724,491.05 | 4,323,934,957.16 |
Taxes and surcharges
| Taxes and surcharges | 18,109,856.84 | 69,354,151.33 |
Selling and marketing
| Selling and marketing | 296,170,387.31 | 266,259,515.24 |
General and administrative
| General and administrative | 275,874,409.29 | 203,762,696.05 |
Research and development
| Research and development | 120,590,517.01 | 268,121,590.13 |
Financial expenses
| Financial expenses | (128,801,099.82) | 212,244,708.29 |
Including: Interest expense
| Including: Interest expense | 292,866.58 | 2,683,843.27 |
Interest revenue
| Interest revenue | 127,719,496.31 | 21,135,753.14 |
Plus: Other incomes
| Plus: Other incomes | 48,122,477.41 | 18,520,087.24 |
Income from investment (lossexpressed with “-”)
| Income from investment (loss expressed with “-”) | 88,870,284.00 | 19,125,074.95 |
| Including: Income from investment in joint venture and cooperative enterprise | 3,525,570.83 | 4,565,754.26 |
Income from derecognition offinancial assets measured atamortized cost (loss expressedwith “-”)
| Income from derecognition of financial assets measured at amortized cost (loss expressed with “-”) |
Net exposure of hedging gain(loss expressed with “-”)
| Net exposure of hedging gain (loss expressed with “-”) |
Income from fair value changes(loss expressed with “-”)
| Income from fair value changes (loss expressed with “-”) | 52,211,519.29 | 9,510,798.34 |
Credit impairment losses (lossexpressed with “-”)
| Credit impairment losses (loss expressed with “-”) | 8,818,449.70 | (30,463,822.73) |
Assets impairment losses (lossexpressed with “-”)
| Assets impairment losses (loss expressed with “-”) | (17,532,150.78) | (7,066,883.80) |
Gain ondisposal of assets (lossexpressed with “-”)
| Gain ondisposal of assets (loss expressed with “-”) | 15,447.79 |
II. Operating profits (loss expressedwith “-”)
| II. Operating profits (loss expressed with “-”) | 957,904,670.52 | 3,556,074,041.21 |
Plus: Non-revenue
| Plus: Non-revenue | 1,934,410.40 | 106,996.35 |
Less: Non-operating expense
| Less: Non-operating expense | 1,734,395.59 | 3,619,487.52 |
III. Total profits (total loss expressedwith “-”)
| III. Total profits (total loss expressed with “-”) | 958,104,685.33 | 3,552,561,550.04 |
Less: Income tax expenses
| Less: Income tax expenses | 148,546,547.62 | 518,984,840.70 |
IV. Net profits (net loss expressed with“-”)
| IV. Net profits (net loss expressed with “-”) | 809,558,137.71 | 3,033,576,709.34 |
(I) Net profits from continuingoperations(net loss expressed with“-”)
| (I) Net profits from continuing operations(net loss expressed with “-”) | 809,558,137.71 | 3,033,576,709.34 |
(II) Net profits from discontinuedoperations (net loss expressed with“-”)
| (II) Net profits from discontinued operations (net loss expressed with “-”) |
V. After-tax other comprehensiveincome
| V. After-tax other comprehensive income |
(I) Other comprehensive income notreclassified as profit or loss
| (I) Other comprehensive income not reclassified as profit or loss |
1. Changes from defined benefit
plans remeasurement
| 1. Changes from defined benefit plans remeasurement |
2. Other comprehensive income
notclassified as profit or lossbased on equity method
| 2. Other comprehensive income notclassified as profit or loss based on equity method |
3. Changes in fair value for other
equity instruments investment
| 3. Changes in fair value for other equity instruments investment |
4. Changes in fair value for the
enterprise credit risks
| 4. Changes in fair value for the enterprise credit risks |
5. Others
| 5. Others |
(II) Other comprehensive incomereclassified as profit or loss
| (II) Other comprehensive income reclassified as profit or loss |
1. Other comprehensive income
reclassified as profit or lossebased on equity method
| 1. Other comprehensive income reclassified as profit or losse based on equity method |
2. Changes in the fair value of
other debt investment
| 2. Changes in the fair value of other debt investment |
3. The amount of financial asset
reclassified as othercomprehensive income
| 3. The amount of financial asset reclassified as other comprehensive income |
4. Provisions for other debt
investment impairment
| 4. Provisions for other debt investment impairment |
| 5. Cash flow hedging instrument |
6. Foreign currency reporting
translation discrepancy
| 6. Foreign currency reporting translation discrepancy |
7. Others
| 7. Others |
VI. Total comprehensive income
| VI. Total comprehensive income | 809,558,137.71 | 3,033,576,709.34 |
VII. Earnings per share:
| VII. Earnings per share: |
(I) Basic EPS
| (I) Basic EPS |
(II) Diluted EPS
| (II) Diluted EPS |
5. Consolidated Cash Flow Statement
Unit: yuan
| Item | Year 2021 | Year 2020 |
I. Cash flow from financing activities:
| I. Cash flow from financing activities: |
Cash from selling commodities oroffering labor
| Cash from selling commodities or offering labor | 8,561,473,154.33 | 13,080,026,126.33 |
Net increase of customer depositand deposit from other banks
| Net increase of customer deposit and deposit from other banks |
Net increase of borrowings from theCentral Bank
| Net increase of borrowings from the Central Bank |
Net increase of borrowing fundsfrom other financial institutions
| Net increase of borrowing funds from other financial institutions |
Cash from obtaining originalinsurance contract premium
| Cash from obtaining original insurance contract premium |
Cash received from insurancepremium of original insurancecontract
| Cash received from insurance premium of original insurance contract |
Net increase of deposit andinvestment of insured
| Net increase of deposit and investment of insured |
Cash from interest, handlingcharges and commissions
| Cash from interest, handling charges and commissions |
Net increase of borrowing funds
| Net increase of borrowing funds |
Net increase of repurchase ofbusiness funds
| Net increase of repurchase of business funds |
Net cash from acting tradingsecurities
| Net cash from acting trading securities |
Refund of tax and levies
| Refund of tax and levies | 62,719,156.18 | 243,877,727.20 |
Other cash received related tooperating activities
| Other cash received related to operating activities | 186,733,643.10 | 182,982,841.99 |
Subtotal cash inflows from operatingactivities
| Subtotal cash inflows from operating activities | 8,810,925,953.61 | 13,506,886,695.52 |
Cash paid for selling goods oroffering labor
| Cash paid for selling goods or offering labor | 5,249,732,073.57 | 6,321,166,011.43 |
Net increase of customer loans andadvances
| Net increase of customer loans and advances |
Net increase of amount due fromthe Central Bank and interbank
| Net increase of amount due from the Central Bank and interbank |
Cash paid for original insurancecontract claims payment
| Cash paid for original insurance contract claims payment |
Net increase of lending funds
| Net increase of lending funds |
Cash paid for interest, handlingcharges and commissions
| Cash paid for interest, handling charges and commissions |
Cash paid for insurance policydividend
| Cash paid for insurance policy dividend |
Cash paid to and for employees
| Cash paid to and for employees | 1,324,315,606.64 | 1,010,260,597.27 |
Taxes and fees paid
| Taxes and fees paid | 897,686,267.95 | 819,152,009.87 |
Other cash paid related to operating
| Other cash paid related to operating | 467,502,103.52 | 588,811,789.56 |
activitiesSubtotal of cash inflow from operatingactivities
| Subtotal of cash inflow from operating activities | 7,939,236,051.68 | 8,739,390,408.13 |
Net cash flow from operating activities
| Net cash flow from operating activities | 871,689,901.93 | 4,767,496,287.39 |
II. Cash flow from investmentactivities:
| II. Cash flow from investment activities: |
Cash from investment withdrawal
| Cash from investment withdrawal | 7,090,000,000.00 | 4,308,736,771.86 |
Cash from investment income
| Cash from investment income | 184,186,882.84 | 17,019,368.90 |
Net cash from disposal of fixed
assets, intangible assets and other
long-term assets
| Net cash from disposal of fixed assets, intangible assets and other long-term assets | 190,932,781.03 | 246,308,685.62 |
Net cash received from the disposal
of subsidiaries and other business
entities
| Net cash received from the disposal of subsidiaries and other business entities |
Other cash received related to
investment activities
| Other cash received related to investment activities |
Subtotal cash inflows from investmentactivities
| Subtotal cash inflows from investment activities | 7,465,119,663.87 | 4,572,064,826.38 |
Cash paid for the purchase and
construction of fixed assets,
intangible assets and other long
term assets
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long term assets | 743,269,761.70 | 573,264,209.18 |
Cash paid for investment
| Cash paid for investment | 6,243,043,466.66 | 8,428,736,771.86 |
Net cash received from reinsurance
business
| Net cash received from reinsurance business |
Net cash paid for obtaining
subsidiaries and other business units
| Net cash paid for obtaining subsidiaries and other business units |
Other cash paid related to
investment activities
| Other cash paid related to investment activities |
Subtotal cash outflows from investmentactivities
| Subtotal cash outflows from investment activities | 6,986,313,228.36 | 9,002,000,981.04 |
Net cash flow from investing activities
| Net cash flow from investing activities | 478,806,435.51 | (4,429,936,154.66) |
III. Cash flow from financing activities:
| III. Cash flow from financing activities: |
Receipts from equity securities
| Receipts from equity securities | 3,593,348,396.23 |
Including: Cash received from
subsidies’ absorption of minority
shareholders’ investment
| Including: Cash received from subsidies’ absorption of minority shareholders’ investment |
Cash received from borrowings
| Cash received from borrowings | 150,000,000.00 |
Other cash received related to
financing activities
| Other cash received related to financing activities |
Subtotal of cash inflow from financialactivities
| Subtotal of cash inflow from financial activities | 3,743,348,396.23 |
Cash repayments of amounts
borrowed
| Cash repayments of amounts borrowed | 150,000,000.00 | 259,210,746.07 |
Cash paid for distribution of
dividends or profits and for interest
expenses
| Cash paid for distribution of dividends or profits and for interest expenses | 768,192,416.04 | 102,333,161.85 |
Including: Dividends and profits
paid by subsidiaries to minority
shareholders
| Including: Dividends and profits paid by subsidiaries to minority shareholders |
Other cash paid related to financing
activities
| Other cash paid related to financing activities | 491,444,823.25 | 33,727,072.53 |
Subtotal of cash inflow from financialactivities
| Subtotal of cash inflow from financial activities | 1,409,637,239.29 | 395,270,980.45 |
Net cash flow from financing activities
| Net cash flow from financing activities | (1,409,637,239.29) | 3,348,077,415.78 |
IV. Impact of exchange rate movementson cash and cash equivalents
| IV. Impact of exchange rate movements on cash and cash equivalents | (1,981,530.49) | 4,927,426.22 |
| V. Net increase of cash and cash equivalents | (61,122,432.34) | 3,690,564,974.73 |
Plus: Cash and cash equivalents atthe beginning of the period
| Plus: Cash and cash equivalents at the beginning of the period | 4,149,734,694.38 | 459,169,719.65 |
VI. Cash and cash equivalents at theend of the period
| VI. Cash and cash equivalents at the end of the period | 4,088,612,262.04 | 4,149,734,694.38 |
6. Cash flow statement of parent company
Unit: yuan
| Item | Year 2021 | Year 2020 |
I. Cash flow from financing activities:
| I. Cash flow from financing activities: |
Cash from selling commodities oroffering labor
| Cash from selling commodities or offering labor | 3,868,882,685.84 | 8,971,990,210.35 |
Refund of tax and levies
| Refund of tax and levies | 59,750,226.81 | 241,763,249.24 |
Other cash received related tooperating activities
| Other cash received related to operating activities | 88,410,542.05 | 79,920,248.95 |
Subtotal cash inflows from operatingactivities
| Subtotal cash inflows from operating activities | 4,017,043,454.70 | 9,293,673,708.54 |
Cash paid for selling goods oroffering labor
| Cash paid for selling goods or offering labor | 2,919,880,528.57 | 4,793,815,703.96 |
Cash paid to and for employees
| Cash paid to and for employees | 320,386,520.67 | 210,111,491.64 |
Taxes and fees paid
| Taxes and fees paid | 436,826,117.76 | 319,415,360.21 |
Other cash paid related to operatingactivities
| Other cash paid related to operating activities | 730,441,492.58 | 399,817,457.85 |
Subtotal of cash inflow from operatingactivities
| Subtotal of cash inflow from operating activities | 4,407,534,659.58 | 5,723,160,013.66 |
Net cash flow from operating activities
| Net cash flow from operating activities | (390,491,204.88) | 3,570,513,694.88 |
II. Cash flow from investmentactivities:
| II. Cash flow from investment activities: |
Cash from investment withdrawal
| Cash from investment withdrawal | 5,769,000,000.00 | 3,251,480,000.00 |
Cash from investment income
| Cash from investment income | 162,879,612.33 | 14,559,320.69 |
Net cash from disposal of fixedassets, intangible assets and otherlong-term assets
| Net cash from disposal of fixed assets, intangible assets and other long-term assets | 153,159,514.85 | 235,274,618.02 |
Net cash received from the disposalof subsidiaries and other businessentities
| Net cash received from the disposal of subsidiaries and other business entities |
Other cash received related toinvestment activities
| Other cash received related to investment activities |
Subtotal cash inflows from investmentactivities
| Subtotal cash inflows from investment activities | 6,085,039,127.18 | 3,501,313,938.71 |
Cash paid for the purchase andconstruction of fixed assets,intangible assets and other longterm assets
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long term assets | 208,912,097.78 | 105,223,806.25 |
Cash paid for investment
| Cash paid for investment | 4,563,112,014.62 | 7,021,480,000.00 |
Net cash paid for obtainingsubsidiaries and other business units
| Net cash paid for obtaining subsidiaries and other business units |
Other cash paid related toinvestment activities
| Other cash paid related to investment activities |
Subtotal cash outflows from investmentactivities
| Subtotal cash outflows from investment activities | 4,772,024,112.40 | 7,126,703,806.25 |
Net cash flow from investing activities
| Net cash flow from investing activities | 1,313,015,014.78 | (3,625,389,867.54) |
III. Cash flow from financing activities:
| III. Cash flow from financing activities: |
Receipts from equity securities
| Receipts from equity securities | 3,593,348,396.23 |
Cash received from borrowings
| Cash received from borrowings | 120,000,000.00 |
| Other cash received related to financing activities |
Subtotal of cash inflow from financialactivities
| Subtotal of cash inflow from financial activities | 3,713,348,396.23 |
Cash repayments of amountsborrowed
| Cash repayments of amounts borrowed | 120,000,000.00 | 65,000,000.00 |
Cash paid for distribution ofdividends or profits and for interestexpenses
| Cash paid for distribution of dividends or profits and for interest expenses | 768,050,437.64 | 101,192,176.61 |
Other cash paid related to financingactivities
| Other cash paid related to financing activities | 271,738,213.27 | 33,727,072.53 |
Subtotal of cash inflow from financialactivities
| Subtotal of cash inflow from financial activities | 1,159,788,650.91 | 199,919,249.14 |
Net cash flow from financing activities
| Net cash flow from financing activities | (1,159,788,650.91) | 3,513,429,147.09 |
IV. Impact of exchange rate movementson cash and cash equivalents
| IV. Impact of exchange rate movements on cash and cash equivalents | (1,910,420.71) | 27,669,067.86 |
V. Net increase of cash and cashequivalents
| V. Net increase of cash and cash equivalents | (239,175,261.72) | 3,486,222,042.29 |
Plus: Cash and cash equivalents atthe beginning of the period
| Plus: Cash and cash equivalents at the beginning of the period | 3,669,286,043.43 | 183,064,001.14 |
VI. Cash and cash equivalents at theend of the period
| VI. Cash and cash equivalents at the end of the period | 3,430,110,781.71 | 3,669,286,043.43 |
7. Consolidated Statement on Changes in Owners' Equity
Current amount
Unit: yuan
| Item | Year 2021 | ||||||||||||||
| Shareholders’ equity attributable to the owners of parent company | Noncontrolling interest | Total shareholders’ equity | |||||||||||||
| Capital stock | Other equity instruments | Additional paid-in capital | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred stock | Perpetual bond | Others | |||||||||||||
I. Endingbalance inprevious year
| I. Ending balance in previous year | 426,492,308.00 | 4,481,709,983.24 | (1,111,035.08) | 420,212,778.13 | 5,126,630,011.14 | 10,453,934,045.43 | 14,456,046.01 | 10,468,390,091.44 |
Plus:
Changes inaccountingpolicies
| Plus: Changes in accounting policies | (60,128,638.03) | (60,128,638.03) | (60,128,638.03) |
Prior perioderrorcorrection
| Prior period error correction |
Businesscombination undercommoncontrol
| Business combination under common control |
Others
| Others |
II. Beginningbalance incurrent year
| II. Beginning balance in current year | 426,492,308.00 | 4,481,709,983.24 | (1,111,035.08) | 420,212,778.13 | 5,066,501,373.11 | 10,393,805,407.40 | 14,456,046.01 | 10,408,261,453.41 |
III. Increase/decrease in the
| III. Increase/decrease in the | 67,911,113. | 257,992,36 | (445,900.35) | 471,633,91 | 281,106,75 | (2,260,000.0 | 278,846,75 |
| current period (less to be filled out with the minus sign "-”) | 57 | 6.68 | 2.86 | 9.40 | 7) | 9.33 |
(I) Totalcomprehensiveincome
| (I) Total comprehensive income | (445,900.35) | 1,239,320,067.26 | 1,238,874,166.91 | (2,260,000.07) | 1,236,614,166.84 |
(II) Owner’sinvested anddecreasedcapital
| (II) Owner’s invested and decreased capital | 67,911,113.57 | 67,911,113.57 | 67,911,113.57 |
1. Common
stock investedby the owner
| 1. Common stock invested by the owner |
2. Capital
invested byother equityinstrumentholders
| 2. Capital invested by other equity instrument holders |
3. Amount of
share-basedpaymentincluded in theowner’s equity
| 3. Amount of share-based payment included in the owner’s equity | 67,911,113.57 | 67,911,113.57 | 67,911,113.57 |
4. Others
| 4. Others |
(III) Profitdistribution
| (III) Profit distribution | (767,686,154.40) | (767,686,154.40) | (767,686,154.40) |
1. Withdrawal
of surplusreserves
| 1. Withdrawal of surplus reserves |
2. Withdrawal
of general riskpreparation
| 2. Withdrawal of general risk preparation |
3. Distribution
of owners (orshareholders)
| 3. Distribution of owners (or shareholders) | (767,686,154.40) | (767,686,154.40) | (767,686,154.40) |
4. Others
| 4. Others |
(IV) Internaltransfer ofowner’s equity
| (IV) Internal transfer of owner’s equity |
1. Capital
surplus transferto paid-incapital (orcapital stock)
| 1. Capital surplus transfer to paid-in capital (or capital stock) |
2. Earned
surplus transferto paid-incapital (orcapital stock)
| 2. Earned surplus transfer to paid-in capital (or capital stock) |
3. Earned
surpluscovering thedeficit
| 3. Earned surplus covering the deficit |
4. Carryforwar
d retainedearnings invariation ofdefined benefitplan
| 4. Carryforward retained earnings in variation of defined benefit plan |
| 5. Carryforward retained earnings of other comprehensive income |
6. Others
| 6. Others |
(V) Specialreserve
| (V) Special reserve |
1. Draw in this
current
| 1. Draw in this current |
2. Use in this
current
| 2. Use in this current |
(VI) Others
| (VI) Others | 257,992,366.68 | (257,992,366.68) | (257,992,366.68) |
IV. Balance atthe end ofcurrent period
| IV. Balance at the end of current period | 426,492,308.00 | 4,549,621,096.81 | 257,992,366.68 | (1,556,935.43) | 420,212,778.13 | 5,538,135,285.97 | 10,674,912,166.80 | 12,196,045.94 | 10,687,108,212.74 |
Last term amount
Unit: yuan
| Item | 2020 | ||||||||||||||
| Shareholders’ equity attributable to the owners of parent company | Noncontrolling interest | Total shareholders’ equity | |||||||||||||
| Capital stock | Other equity instruments | Additional paid-in capital | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preferred stock | Perpetual bond | Others | |||||||||||||
I. Endingbalance inprevious year
| I. Ending balance in previous year | 376,492,308.00 | 948,913,284.10 | 44,623.87 | 116,855,107.20 | 1,718,075,177.67 | 3,160,380,500.84 | 3,167,502.50 | 3,163,548,003.34 |
Plus:
Changes inaccountingpolicies
| Plus: Changes in accounting policies |
Priorperioderrorcorrection
| Prior period error correction |
Businesscombination undercommoncontrol
| Business combination under common control |
Others
| Others |
II. Beginningbalance incurrent year
| II. Beginning balance in current year | 376,492,308.00 | 948,913,284.10 | 44,623.87 | 116,855,107.20 | 1,718,075,177.67 | 3,160,380,500.84 | 3,167,502.50 | 3,163,548,003.34 |
III. Increase/decrease in thecurrent period(less to befilled out withthe minus sign"-”)
| III. Increase/decrease in the current period (less to be filled out with the minus sign "-”) | 50,000,000.00 | 3,532,796,699.14 | (1,155,658.95) | 303,357,670.93 | 3,408,554,833.47 | 7,293,553,544.59 | 11,288,543.51 | 7,304,842,088.10 |
| (I) Total comprehensive income | (1,155,658.95) | 3,810,412,504.40 | 3,809,256,845.45 | 11,288,543.51 | 3,820,545,388.96 |
(II) Owner’sinvested anddecreasedcapital
| (II) Owner’s invested and decreased capital | 50,000,000.00 | 3,532,796,699.14 | 3,582,796,699.14 | 3,582,796,699.14 |
1. Common
stock investedby the owner
| 1. Common stock invested by the owner | 50,000,000.00 | 3,508,849,271.20 | 3,558,849,271.20 | 3,558,849,271.20 |
2. Capital
invested byother equityinstrumentholders
| 2. Capital invested by other equity instrument holders |
3. Amount of
share-basedpaymentincluded in theowner’s equity
| 3. Amount of share-based payment included in the owner’s equity | 23,947,427.94 | 23,947,427.94 | 23,947,427.94 |
4. Others
| 4. Others |
(III) Profitdistribution
| (III) Profit distribution | 303,357,670.93 | (401,857,670.93) | (98,500,000.00) | (98,500,000.00) |
1. Withdrawal
of surplusreserves
| 1. Withdrawal of surplus reserves | 303,357,670.93 | (303,357,670.93) |
2. Withdrawal
of general riskpreparation
| 2. Withdrawal of general risk preparation |
3. Distribution
of owners (orshareholders)
| 3. Distribution of owners (or shareholders) | (98,500,000.00) | (98,500,000.00) | (98,500,000.00) |
4. Others
| 4. Others |
(IV) Internaltransfer ofowner’s equity
| (IV) Internal transfer of owner’s equity |
1. Capital
surplus transferto paid-incapital (orcapital stock)
| 1. Capital surplus transfer to paid-in capital (or capital stock) |
2. Earned
surplus transferto paid-incapital (orcapital stock)
| 2. Earned surplus transfer to paid-in capital (or capital stock) |
3. Earned
surpluscovering thedeficit
| 3. Earned surplus covering the deficit |
4. Carryforwar
d retainedearnings invariation ofdefined benefitplan
| 4. Carryforward retained earnings in variation of defined benefit plan |
5. Carryforwar
d retainedearnings of
| 5. Carryforward retained earnings of |
othercomprehensiveincome
6. Others
| 6. Others |
(V) Specialreserve
| (V) Special reserve |
1. Draw in this
current
| 1. Draw in this current |
2. Use in this
current
| 2. Use in this current |
(VI) Others
| (VI) Others |
IV. Balance atthe end ofcurrent period
| IV. Balance at the end of current period | 426,492,308.00 | 4,481,709,983.24 | (1,111,035.08) | 420,212,778.13 | 5,126,630,011.14 | 10,453,934,045.43 | 14,456,046.01 | 10,468,390,091.44 |
8. Statement of change in equity of parent company
Current amount
Unit: yuan
| Item | Year 2021 | |||||||||||
| Capital stock | Other equity instruments | Additional paid-in capital | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total shareholders’ equity | |||
| Preferred stock | Perpetual bond | Others | ||||||||||
I. Endingbalance inprevious year
| I. Ending balance in previous year | 426,492,308.00 | 4,507,116,745.59 | 411,397,111.21 | 3,349,520,232.39 | 8,694,526,397.19 |
Plus: Changesin accountingpolicies
| Plus: Changes in accounting policies |
Prior perioderrorcorrection
| Prior period error correction |
Others
| Others |
II. Beginningbalance incurrent year
| II. Beginning balance in current year | 426,492,308.00 | 4,507,116,745.59 | 411,397,111.21 | 3,349,520,232.39 | 8,694,526,397.19 |
III. Increase/decrease in thecurrent period(less to be filledout with theminus sign "-”)
| III. Increase/decrease in the current period (less to be filled out with the minus sign "-”) | 67,911,113.57 | 257,992,366.68 | 41,871,983.31 | (148,209,269.80) |
(I) Totalcomprehensiveincome
| (I) Total comprehensive income | 809,558,137.71 | 809,558,137.71 |
(II) Owner’sinvested anddecreasedcapital
| (II) Owner’s invested and decreased capital | 67,911,113.57 | 67,911,113.57 |
1. Common
stock investedby the owner
| 1. Common stock invested by the owner |
2. Capital
invested byother equityinstrumentholders
| 2. Capital invested by other equity instrument holders |
| 3. Amount of share-based payment included in the owner’s equity | 67,911,113.57 | 67,911,113.57 |
4. Others
| 4. Others |
(III) Profitdistribution
| (III) Profit distribution | (767,686,154.40) | (767,686,154.40) |
1. Withdrawal
of surplusreserves
| 1. Withdrawal of surplus reserves |
2. Distribution
of owners (orshareholders)
| 2. Distribution of owners (or shareholders) | (767,686,154.40) | (767,686,154.40) |
3. Others
| 3. Others |
(IV) Internaltransfer ofowner’s equity
| (IV) Internal transfer of owner’s equity |
1. Capital
surplus transferto paid-incapital (orcapital stock)
| 1. Capital surplus transfer to paid-in capital (or capital stock) |
2. Earned
surplus transferto paid-incapital (orcapital stock)
| 2. Earned surplus transfer to paid-in capital (or capital stock) |
3. Earned
surplus coveringthe deficit
| 3. Earned surplus covering the deficit |
4. Carryforward
retainedearnings invariation ofdefined benefitplan
| 4. Carryforward retained earnings in variation of defined benefit plan |
5. Carryforward
retainedearnings ofothercomprehensiveincome
| 5. Carryforward retained earnings of other comprehensive income |
6. Others
| 6. Others |
(V) Specialreserve
| (V) Special reserve |
1. Draw in this
current
| 1. Draw in this current |
2. Use in this
current
| 2. Use in this current |
(VI) Others
| (VI) Others | 257,992,366.68 | (257,992,366.68) |
IV. Balance atthe end ofcurrent period
| IV. Balance at the end of current period | 426,492,308.00 | 4,575,027,859.16 | 257,992,366.68 | 411,397,111.21 | 3,391,392,215.70 | 8,546,317,127.39 |
Last term amount
Unit: yuan
| Item | 2020 | |||||||||
| Capita | Other equity | Additio | Less: | Other | Special | Surplus | Undistrib | Others | Total | |
| l stock | instruments | nal paid-in capital | treasury stock | comprehensive income | reserve | reserve | uted profit | shareholders’ equity | |||
| Preferred stock | Perpetual bond | Others | |||||||||
I. Endingbalance inprevious year
| I. Ending balance in previous year | 376,492,308.00 | 974,320,046.45 | 108,039,440.28 | 717,801,193.98 | 2,176,652,988.71 |
Plus:
Changes inaccountingpolicies
| Plus: Changes in accounting policies |
Priorperiod errorcorrection
| Prior period error correction |
Others
| Others |
II. Beginningbalance incurrent year
| II. Beginning balance in current year | 376,492,308.00 | 974,320,046.45 | 108,039,440.28 | 717,801,193.98 | 2,176,652,988.71 |
III. Increase/decrease in thecurrent period(less to befilled out withthe minus sign"-”)
| III. Increase/decrease in the current period (less to be filled out with the minus sign "-”) | 50,000,000.00 | 3,532,796,699.14 | 303,357,670.93 | 2,631,719,038.41 | 6,517,873,408.48 |
(I) Totalcomprehensiveincome
| (I) Total comprehensive income | 3,033,576,709.34 | 3,033,576,709.34 |
(II) Owner’sinvested anddecreasedcapital
| (II) Owner’s invested and decreased capital | 50,000,000.00 | 3,532,796,699.14 | 3,582,796,699.14 |
1. Common
stock investedby the owner
| 1. Common stock invested by the owner | 50,000,000.00 | 3,508,849,271.20 | 3,558,849,271.20 |
2. Capital
invested byother equityinstrumentholders
| 2. Capital invested by other equity instrument holders |
3. Amount of
share-basedpaymentincluded in theowner’s equity
| 3. Amount of share-based payment included in the owner’s equity | 23,947,427.94 | 23,947,427.94 |
4. Others
| 4. Others |
(III) Profitdistribution
| (III) Profit distribution | 303,357,670.93 | (401,857,670.93) | (98,500,000.00) |
1. Withdrawal
of surplusreserves
| 1. Withdrawal of surplus reserves | 303,357,670.93 | (303,357,670.93) |
2. Distribution
of owners (orshareholders)
| 2. Distribution of owners (or shareholders) | (98,500,000.00) | (98,500,000.00) |
3. Others
| 3. Others |
(IV) Internaltransfer ofowner’s equity
| (IV) Internal transfer of owner’s equity |
1. Capital
surplus transfer
| 1. Capital surplus transfer |
to paid-incapital (orcapital stock)
2. Earned
surplus transferto paid-incapital (orcapital stock)
| 2. Earned surplus transfer to paid-in capital (or capital stock) |
3. Earned
surpluscovering thedeficit
| 3. Earned surplus covering the deficit |
4. Carryforwar
d retainedearnings invariation ofdefined benefitplan
| 4. Carryforward retained earnings in variation of defined benefit plan |
5. Carryforwar
d retainedearnings ofothercomprehensiveincome
| 5. Carryforward retained earnings of other comprehensive income |
6. Others
| 6. Others |
(V) Specialreserve
| (V) Special reserve |
1. Draw in this
current
| 1. Draw in this current |
2. Use in this
current
| 2. Use in this current |
(VI) Others
| (VI) Others |
IV. Balance atthe end ofcurrent period
| IV. Balance at the end of current period | 426,492,308.00 | 4,507,116,745.59 | 411,397,111.21 | 3,349,520,232.39 | 8,694,526,397.19 |
III. Basic status of companyWinner Medical Co., Ltd. (hereinafter referred to as the “the Company” or “our company”), formerly known asWinner Industries (Shenzhen) Co., Ltd. (hereinafter referred to as “Winner Industries”), is a wholly foreign-ownedenterprise established on August 24, 2000 with the approval of Shenzhen Municipal Administration for Industryand Commerce. The original business license number of the Company is: Q.D.Y.S.Z.Zi No. 307199. The originalregistered capital is HKD 30 million, and the total investment is HKD 60 million. The Company is wholly ownedby Winner International Trading Corporation. The registered capital was invested in three phases. On April 2,2001, the registered capital of HKD 18,023,154.30 was invested in monetary funds, which was verified by thecapital verification report (Z.T.Z.T. No.Y2001-1133) of Zhuhai Zhongtuo Zhengtai Accounting Firm. Thebusiness scope of the original company is: the production and operation of sanitary materials, dressings and theirproducts, medical clothing, textiles, non-woven products and moulded packaging (excluding the products subjectto national export license management).On May 18, 2001, the Board of Directors of the Company decided to increase the registered capital from HKD
30.00 million to HKD 60.00 million, and the total investment from HKD 60.00 million to HKD 120.00 million,which was paid in three installments since the date of registration of the Company. On June 05, 2001, theCompany obtained the changed business license of the enterprise legal person issued by Shenzhen MunicipalBureau for Industry and Commerce and amended the Articles of Association accordingly.As of December 21, 2001, it has received the second installment of the registered capital paid by WinnerInternational Trading Corporation. Winner International Trading Corporation contributed HKD 31,445,194.91 inmonetary funds, and t his investment was verified by Shenzhen Zhongpeng Certified Public Accountants, Ltd.(S.P.K.Y. Zi [2002] No.037 capital verification report). As of February 21, 2002, it has received the thirdinstallment of the registered capital totaling HKD 6,005,722.20 paid by Winner International Trading Corporation,
including HKD 3,665,722.20 in currency and HKD 2,340,000.00 in kind. This investment was verified byShenzhen Lishang Certified Public Accountants Co., Ltd . (S.L.S.Y. Zi [2002] No.039 capital verification report)On October 8, 2002, the Board of Directors of the Company decided to increase the Company’s registered capitalfrom HKD 60.00 million to HKD 70.00 million, and the total investment from HKD 120.00 million to HKD
134.00 million. On December 10, 2002, the Company obtained the changed business license of the enterpriselegal person issued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles ofAssociation accordingly. As of May 27, 2003, it has received the fourth installment of the registered capitaltotaling HKD 14,525,928.59 paid by (Hong Kong) Winner International Trading Corporation. This capitalincrease was verified by Shenzhen Yuehua Certified Public Accountants Co., Ltd. (S.Y.H.Y. Zi [2003] No.339capital verification report).On May 25, 2003, with the approval of the Board of Directors of the Company, the shareholder WinnerInternational Trading Corporation signed the Equity Transfer Agreement with Winner Group Limited, underwhich Winner International Trading Corporation transferred 100% of its equity to Winner Group Limited. On July28, 2003, the Company obtained the changed business license of the enterprise legal person issued by ShenzhenMunicipal Bureau for Industry and Commerce and amended the Articles of Association accordingly.On June 8, 2006, the Board of Directors of the Company decided to increase the Company’s registered capitalfrom HKD 70.00 million to HKD 126.00 million, and the total investment from HKD 134.00 million to HKD
270.00 million. The newly increased registered capital was invested within half a year after the registration of thechange. On June 30, 2006, the Company obtained the changed business license of the enterprise legal personissued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Associationaccordingly.As of August 30, 2006, the Company transferred undistributed profits HKD 49,423,804.00 to paid -in capital, andthe paid-in capital after the change was HKD 119,423,804.00. This capital increase was verified by the ShenzhenBranch of Beijing Zhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi [2007] No.043 capitalverification report).On December 2, 2006, the Board of Directors of the Company decided to change the original investment period ofthe shareholders from June 30, 2006 to December 31, 2006 into June 30, 2006 to June 30, 2007. On December 6,2006, the Company was approved by General Administration for Industry and Commerce of Shenzhen to changeits type of enterprise from a wholly foreign-owned enterprise into a limited liability company (wholly owned byforeign legal person) and change its business term.As of March 15, 2007, the Company transferred undistributed profits HKD 6,576,196.00 to paid -in capital, andthe cumulative paid-in capital after the change was HKD 126.00 million. This capital increase was verified byShenzhen Hengping Certified Public Accountants Co., Ltd. (S.H.P.W.Y. Zi [2007] No.0004 capital verificationreport). On August 13, 2007, the Company obtained the changed business license of the enterprise legal personissued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Associationaccordingly. The registration number was changed from Q.D.Y.S.Z. Zi No. 307199 to 440306503230896.On June 8, 2009, the Board of Directors of the Company decided to add sterilization technology services to thebusiness scope. On June 30, 2009, the Company obtained the changed business license of the enterprise legalperson issued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles ofAssociation accordingly.On April 1, 2010, the Board of Directors of the Company decided to increase the Company’s registered capitalfrom HKD 126.00 million to HKD 192.00 million, and the total investment from HKD 270.00 million to HKD
380.00 million. The increased amount of the registered capital was contributed by the original shareholders incash in foreign currency.As of June 18, 2010, it has received the registered capital totaling USD 8,473,500.00 (equivalent to HKD66,000,653.75) paid by Winner Group Limited. This capital increase was verified by Shenzhen HengpingCertified Public Accountants LLP (S.H.P.S. (W.) Y. Zi [2010] No.13 capital verification report). On July 2, 2010,the Company obtained the changed business license of the enterprise legal person issue d by ShenzhenAdministration for Market Regulation (since September 9, 2009, Shenzhen Municipal Bureau for Industry andCommerce has been integrated into Shenzhen Administration for Market Regulation) and amended the Articles ofAssociation accordingly.
On April 27, 2011, with the approval of General Administration for Industry and Commerce of Shenzhen, theCompany changed its residence from No. 1 Wenjian Avenue, Bulong Road, Longhua Street, Bao‘an District,Shenzhen City to Winner Industrial Park beside Bulong Road, Longhua Street, Bao’an District, Shenzhen City.On February 20, 2013, the Board of Directors of the Company decided and agreed to increase the Company’sregistered capital by HKD 4,271,300. The registered capital after the change was HKD 19,6271,300, and the totalinvestment was still HKD 380.00 million.The shareholder, Winner Group Limited made capital contribution with its equity in the six enterprises. The equitycontribution is as follows:
| Name of invested entity | Proportion (%) | Book value of equity contribution net assets (RMB 10,000) | Amount of equity contribution (RMB 10,000) | Amount included in capital surplus (RMB 10,000) | Amount of equity contribution (Convert to HKD 10,000) |
| (a) | (b) | (c)=(a)-(b) | (D)=(b)*Converted exchange rate |
Winner Medical (Chongyang) Co., Ltd.(formerly known as “Chongyang WinnerMedical Textile Co., Ltd.”)
| Winner Medical (Chongyang) Co., Ltd. (formerly known as “Chongyang Winner Medical Textile Co., Ltd.”) | 100.00 | 3,232.93 | 32.33 | 3,200.60 | 39.94 |
Winner Medical (Jiayu) Co., Ltd. (formerlyknown as “Jiayu Winner Medical Textile Co.,Ltd.”)
| Winner Medical (Jiayu) Co., Ltd. (formerly known as “Jiayu Winner Medical Textile Co., Ltd.”) | 100.00 | 3,520.95 | 35.21 | 3,485.74 | 43.50 |
Winner Medical (Jingmen) Co., Ltd. (formerlyknown as “Jingmen Winner Medical TextileCo., Ltd.”)
| Winner Medical (Jingmen) Co., Ltd. (formerly known as “Jingmen Winner Medical Textile Co., Ltd.”) | 100.00 | 2,527.24 | 25.27 | 2,501.97 | 31.22 |
Yichang Winner Medical Textile Co., Ltd.
| Yichang Winner Medical Textile Co., Ltd. | 100.00 | 1,800.69 | 18.01 | 1,782.68 | 22.25 |
Winner Medical (Huanggang) Co., Ltd.
| Winner Medical (Huanggang) Co., Ltd. | 75.00 | 19,729.30 | 197.29 | 19,532.01 | 243.76 |
Winner Medical (Tianmen) Co., Ltd. (formerlyknown as “Hubei Winner Textile Co., Ltd.”)
| Winner Medical (Tianmen) Co., Ltd. (formerly known as “Hubei Winner Textile Co., Ltd.”) | 100.00 | 3,760.89 | 37.61 | 3,723.28 | 46.46 |
Total
| Total | 34,572.00 | 345.72 | 34,226.28 | 427.13 |
After the capital increase, the original shareholders still have 100% of the Company's equity, and the above sixcompanies become the Company's subsidiaries. On July 25, 2013, the Company obtained the changed businesslicense of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and Commerce andamended the Articles of Association accordingly. This capital increase was verified by the Shenzhen Branch ofZhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi [2013] No.102 capital verification report).On September 2, 2013, the Board of Directors of the Company decided to increase the Company’s registeredcapital by HKD 18,068,200. The registered capital after the change was HKD 214,339,500, and the totalinvestment was still HKD 380.00 million. The new investment was subscribed by Shenzhen KangshengInvestment Partnership (limited partnership) (renamed to Xiamen Leyuan Investment Partnership (limitedpartnership) in this reporting period, hereinafter referred to as the “Leyuan Investment”), Shenzhen KangxinInvestment Partnership (limited partnership) (renamed as Xiamen Yutong Investment Partnership (limitedpartnership) in this reporting period, hereinafter referred to as the “Yutong Investment”), Shenzhen KanglongInvestment Partnership (limited partnership) (renamed as Xiamen Huikang Investment Partnership (limitedpartnership) in this reporting period, hereinafter referred to as the “Huikang Investment”) with HKD 10,322,400,HKD 4,414,500 and HKD 3,331,300 respectively. After the completion of the capital increase, the Company’sownership structure was changed as follows:
| Investor | Capital contribution amount (HKD ten thousand) | Proportion (%) |
Winner Group Limited
| Winner Group Limited | 19,627.13 | 91.5703 |
Leyuan Investment
| Leyuan Investment | 1,032.24 | 4.8159 |
Yutong Investment
| Yutong Investment | 441.45 | 2.0596 |
Huikang Investment
| Huikang Investment | 333.13 | 1.5542 |
Total
| Total | 21,433.95 | 100.0000 |
On October 17, 2013, the Company obtained the changed business license of the enterprise legal person issued byShenzhen Administration for Market Regulation and amended the Articles of Association accordingly. This capitalincrease was verified by Shenzhen Hengping Certified Public Accountants LLP (S.H.P.S.Y. Zi [2013] No.035capital verification report).On October 26, 2013, the Board of Directors of the Company decided to change its residence from WinnerIndustrial Park beside Bulong Road, Longhua Street, Bao’an District, Shenzhen City to Winner Industrial Park,No. 660 Bulong Road, Longhua New District, Shenzhen City. On November 4, 2013, the Company completed theindustrial and commercial registration of changes, obtained the changed business license of the enterprise legalperson issued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles ofAssociation accordingly.On July 1, 2014, the Board of Directors of the Company decided and agreed to increase the Company’s registeredcapital by HKD 3646,600. The registered capital after the change was HKD 217,986,100, and the total investmentwas still HKD 380.00 million. The capital increase was made by the original shareholder, Leyuan Investment,which subscribed HKD 3,646,600 with RMB 13.585 million, and the increased registered capital was paid in twoinstallments. After the completion of the capital increase, the Company’s ownership structure was changed asfollows:
| Investor | Capital contribution amount (HKD ten thousand) | Proportion (%) |
Winner Group Limited
| Winner Group Limited | 19,627.13 | 90.0385 |
Leyuan Investment
| Leyuan Investment | 1,396.90 | 6.4082 |
Yutong Investment
| Yutong Investment | 441.45 | 2.0251 |
Huikang Investment
| Huikang Investment | 333.13 | 1.5282 |
Total
| Total | 21,798.61 | 100.0000 |
On July 24, 2014, the Company obtained the changed business license of the enterprise legal person issued byShenzhen Administration for Market Regulation and amended the Articles of Association accordingly. This capitalincrease was verified by Shenzhen Hengping Certified Public Accountants LLP (S.H.P.S.Y. Zi [2014] No.030 andS.H.P.S.Y. Zi [2015] No.003 capital verification reports.On July 28, 2014, the board of directors of the Company decided to agree that the shareholder of the Company,Wenjian Group Limited, would transfer its 2.9503% equity of the Company to Yutong Investment, HuikangInvestment, and the newly introduced shareholder, Shenzhen Kangli Investment Partnership (limited partnership)(renamed as Xiamen Zepeng Investment Partnership (limited partnership) in this reporting period, hereinafterreferred to as the “Zepeng Investment”). After the completion of the equity transfer, the Company’s ownershipstructure was changed as follows:
| Investor | Capital contribution amount (HKD ten thousand) | Proportion (%) |
Winner Group Limited
| Winner Group Limited | 18,984.01 | 87.0882 |
Leyuan Investment
| Leyuan Investment | 1,396.90 | 6.4082 |
Yutong Investment
| Yutong Investment | 740.83 | 3.3985 |
Huikang Investment
| Huikang Investment | 447.37 | 2.0523 |
Zepeng Investment
| Zepeng Investment | 229.50 | 1.0528 |
Total
| Total | 21,798.61 | 100.0000 |
On August 29, 2014, the Company obtained the changed business license of the enterprise legal person issued byShenzhen Administration for Market Regulation and amended the Articles of Association accordingly.On September 28, 2014, the Board of Directors of the Company decided and agreed to increase the Company’sregistered capital by HKD 22,550,300. The registered capital after the change was HKD 240,536,400, and thetotal investment was still HKD 380.00 million. The new registered capital was subscribed by Beijing SequoiaXinyuan Equity Investment Center (limited partnership) (hereinafter referred to as “Sequoia Xin yuan”) with
300.00 million yuan. After the completion of the capital increase, the Company’s ownership structure waschanged as follows:
| Investor | Capital contribution amount (HKD ten thousand) | Proportion (%) |
| Winner Group Limited | 18,984.01 | 78.9236 |
Leyuan Investment
| Leyuan Investment | 1,396.90 | 5.8074 |
Yutong Investment
| Yutong Investment | 740.83 | 3.0800 |
Huikang Investment
| Huikang Investment | 447.37 | 1.8599 |
Zepeng Investment
| Zepeng Investment | 229.50 | 0.9541 |
Sequoia Xinyuan
| Sequoia Xinyuan | 2,255.03 | 9.3750 |
Total
| Total | 24,053.64 | 100.0000 |
As of October 31, 2014, it has received 300.00 million yuan from Sequoia Xinyuan in monetary funds. OnNovember 06, 2014, the Company obtained the changed business license of the enterprise legal person issued byShenzhen Administration for Market Regulation and amended the Articles of Association accordingly. This capitalincrease was verified by the Shenzhen Branch of Zhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi[2014] No.087 capital verification report).On April 30, 2015, through the resolution of the Board of Directors of the Company, with February 28, 2015 asthe base date, Winner Industries was wholly changed into a limited liability Company, with a registered capital of368 million yuan. In accordance with the provisions of the Sponsorship Agreement and Articles of Association,the shareholders converted their audited net assets as of February 28, 2015 of 1,058,194,956.32 yuan into 368million shares at a ratio of 1:0.3478, par value of each share was 1 yuan, and the total share capital was 368million yuan and held separately by the original shareholders in accordance with their original proportions; theremaining 690,194,956.32 yuan was included in the capital surplus (due to the change of calculation policy ofCompany’s receivables bad debt provision during the reporting period, the audited net assets of the Company as ofthe base date of share reform were adjusted to 1,050,812,354.45 yuan, and the corresponding share conversionratio was adjusted to 1: 0.3502). June 4, 2015, with the approval of Economy, Trade and Information Commissionof Shenzhen Municipality, Winner Industries was wholly changed into a limited liability company, renamed as“Winner Medical Co., Ltd.”, and obtained the business license of enterprise legal person with the registrationnumber of 440306503230896.On May 28, 2018, after voted through and approved by the extraordinary general meeting of shareholders, theCompany agreed to increase the registered capital by 8,492,308 yuan, with the registered capital after the changeof 376,492,308 yuan. The new registered capital was subscribed by Shenzhen Capital Group Co., Ltd. (hereinafterreferred to as “SCGC”) with 300.00 million yuan. After the completion of the capital increase, the Company’sownership structure was changed as follows:
| Investor | Amount of contribution (RMB 10,000) | Proportion (%) |
Winner Group Limited
| Winner Group Limited | 29,043.8848 | 77.1434 |
Leyuan Investment
| Leyuan Investment | 2,137.1232 | 5.6764 |
Yutong Investment
| Yutong Investment | 1,133.4400 | 3.0105 |
Huikang Investment
| Huikang Investment | 684.4432 | 1.8179 |
Zepeng Investment
| Zepeng Investment | 351.1088 | 0.9326 |
Sequoia Xinyuan
| Sequoia Xinyuan | 3,450.0000 | 9.1635 |
SCGC
| SCGC | 849.2308 | 2.2556 |
Total
| Total | 37,649.2308 | 100.0000 |
As of June 13, 2018, it has received 300.00 million yuan from SCGC in monetary funds. On June 15, 2018,Shenzhen Administration for Market Regulation issued the Notice of Change (Filing) (No.: 21801665051) on thischange and approved the capital increase. The Company amended the Articles of Association in respect of theabove matters. The Company amended the Articles of Association in respect of the above matters. This capitalincrease was verified by BDO China Shu Lun Pan Certified Public Accountants LLP (X.K.S.B.Zi [2018]No.ZI10525 capital verification report).On February 28, 2018, the Company obtained the renewed business license of the enterprise legal person issuedby Shenzhen Administration for Market Regulation with the unified social credit code 91440300723009295R.On August, 18, 2020, after the reply of China Securities Regulatory Commission on Approval of the Registrationof the Initial Public Offering of Winner Medical Co., Ltd. (Z.J.X.K. [2020] No.1822), the Company issued 50million RMB ordinary shares to the public, which was listed on the Shenzhen Stock Exchange on September 17,2020. Upon completion of the issuance, the registered capital of the Company was 426,492,308 yuan.
Business term: sustainable operation.Business scope: production and operation of Class II, III 6864 medical hygiene materials, medical biologicalmaterials, dressings and products, medical clothing, protective articles, textiles, non-woven products and moldedpackaging (the above products do not include the goods subject to national export license administration) andrelated products, disposable consumables and molded packaging; engaging in wholes ale, import and export, retail(including online sales) and other related ancillary businesses of all Class I medical devices, all Class II medicaldevices (excluding in vitro diagnostic reagents), Class III medical devices: medical hygiene materials anddressings, medical suture materials and adhesives, medical polymer materials and products (except disposabletransfusion apparatus (needle)), general diagnostic instruments, medical cold treatment, low temperature,refrigerating equipment and tools, cotton household articles, cotton clothing, cotton costume, cotton spun lacednon-woven fabric and its manufactured products, cotton, disinfection products, daily necessities, cosmetics,protective equipment and instruments and meters (if it does not involve goods subject to state trading, or involvesgoods subject to quotas, license management and other special provisions, it shall apply in accordance withrelevant regulations of the state); provide the technical consulting, technical services and after-sales services ofabove-mentioned products; sterilization technical services (if it needs to obtain relevant qualifications to operate,it shall apply in accordance with relevant regulations); enterprise management consulting, business informationconsulting, economic information consulting, warehouse services (excluding hazardous chemicals, precursorchemicals, refined oil and other dangerous goods), own property leasing (it can be operated only with the legalreal estate ownership certificate under the company's name). The above business scope does not include the itemssubject to special administrative measures for access stipulated by the state, and those involving the record andlicensing qualifications need to obtain the relevant certificates before operation.Company address: F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, MinzhiSubdistrict, Longhua District, Shenzhen City; Winner Industrial Park, No.660 Bulong Road, Longhua NewDistrict, Shenzhen City.The financial statements were approved by the Board of Directors of the Company on April 20, 2022.As of December 31, 2021, the subsidiaries in the consolidated financial statements of the Company are as follows:
Subsidiary nameWinner Medical (Jingmen) Co., Ltd. (hereinafter referred to as “Winner Medical (Jingmen)”)
Winner Medical (Jingmen) Co., Ltd. (hereinafter referred to as “Winner Medical (Jingmen)”)Yichang Winner Medical Textile Co., Ltd. (hereinafter referred to as “Winner Medical (Yichang)”)
Yichang Winner Medical Textile Co., Ltd. (hereinafter referred to as “Winner Medical (Yichang)”)Winner Medical (Tianmen) Co., Ltd. (hereinafter referred to as “Winner Medical (Tianmen)”)
Winner Medical (Tianmen) Co., Ltd. (hereinafter referred to as “Winner Medical (Tianmen)”)Winner Medical (Chongyang) Co., Ltd. (hereinafter referred to as “Winner Medical (Chongyang)”)
Winner Medical (Chongyang) Co., Ltd. (hereinafter referred to as “Winner Medical (Chongyang)”)Winner Medical (Jiayu) Co., Ltd. (hereinafter referred to as “Winner Medical (Jiayu)”)
Winner Medical (Jiayu) Co., Ltd. (hereinafter referred to as “Winner Medical (Jiayu)”)Winner Medical (Hong Kong) Ltd. (hereinafter referred to as “Hong Kong Winner”)
Winner Medical (Hong Kong) Ltd. (hereinafter referred to as “Hong Kong Winner”)Winner (Huanggang) Cotton Processing & Trading Co., Ltd. (hereinafter referred to as “Winner (Huanggang) Cotton”)
Winner (Huanggang) Cotton Processing & Trading Co., Ltd. (hereinafter referred to as “Winner (Huanggang) Cotton”)Winner Medical (Huanggang) Co., Ltd. (hereinafter referred to as “Winner Medical (Huanggang)”)
Winner Medical (Huanggang) Co., Ltd. (hereinafter referred to as “Winner Medical (Huanggang)”)Shenzhen Purcotton Technology Co., Ltd. (hereinafter referred to as “Shenzhen Purcotton”)
Shenzhen Purcotton Technology Co., Ltd. (hereinafter referred to as “Shenzhen Purcotton”)Guangzhou Purcotton Medical Technology Co., Ltd. (hereinafter referred to as “Guangzhou Purcotton”)
Guangzhou Purcotton Medical Technology Co., Ltd. (hereinafter referred to as “Guangzhou Purcotton”)Beijing Purcotton Technology Co., Ltd. (hereinafter referred to as “Beijing Purcotton”)
Beijing Purcotton Technology Co., Ltd. (hereinafter referred to as “Beijing Purcotton”)Shanghai Purcotton Technology Co., Ltd. (hereinafter referred to as “Shanghai Purcotton”)
Shanghai Purcotton Technology Co., Ltd. (hereinafter referred to as “Shanghai Purcotton”)Shenzhen Qianhai Purcotton E-Commerce Co., Ltd. (hereinafter referred to as “Qianhai Purcotton”)
Shenzhen Qianhai Purcotton E-Commerce Co., Ltd. (hereinafter referred to as “Qianhai Purcotton”)Winner Medical Malaysia Sdn. Bhd. (hereinafter referred to as “Winner Medical Malaysia”)
Winner Medical Malaysia Sdn. Bhd. (hereinafter referred to as “Winner Medical Malaysia”)Winner Medical (Heyuan) Co., Ltd.1* (hereinafter referred to as “Winner Medical (Heyuan)”)
Winner Medical (Heyuan) Co., Ltd.1* (hereinafter referred to as “Winner Medical (Heyuan)”)Winner Medical (Wuhan) Co., Ltd. 2* (hereinafter referred to as “Winner Medical (Wuhan)”) (former name: Hubei Winner MedicalCo., Ltd.)
Winner Medical (Wuhan) Co., Ltd. 2* (hereinafter referred to as “Winner Medical (Wuhan)”) (former name: Hubei Winner MedicalCo., Ltd.)Shenzhen PureH2B Technology Co., Ltd. 3* (hereinafter referred to as “PureH2B”)
Shenzhen PureH2B Technology Co., Ltd. 3* (hereinafter referred to as “PureH2B”)Pure HB (Shanghai) Co., Ltd. 4* (hereinafter referred to as “Pure HB (Shanghai)”)
Pure HB (Shanghai) Co., Ltd. 4* (hereinafter referred to as “Pure HB (Shanghai)”)Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd. 5* (hereinafter referred to as “Purunderwear”)
Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd. 5* (hereinafter referred to as “Purunderwear”)Huanggang Purcotton Ltd. 6* (hereinafter referred to as “Huanggang Purcotton”)
1*: Heyuan Winner was established on May 18, 2016.2*: Wuhan Winner was established on January 23, 2017, which former name was Hubei Winner Medical Co., Ltd.
(abbreviated as “Hubei Winner”). On August 28, 2020, Hubei Winner was renamed as Winner Medical (Wuhan) Co.,Ltd.3*: PureH2B was established on January 25, 2018.4*: Mifu Shanghai was established on March 16, 2018 and cancelled on February 21, 2022.5*: Cotton Lining was established on July 9, 2019.6*: Huanggang Purcotton was established on September 27, 2020.
The scope of the consolidated financial statements for this reporting period and its changes are detailed in thenotes “VIII. Consolidation scope changes” and “IX. Interests in other entities”.
IV. Preparation basis of financial statements
1. Preparation basis
This financial statement is prepared in accordance with the Accounting Standard for Business Enterprises -- BasicStandard issued by the Ministry of Finance, various special accounting standards, guideline for application ofaccounting standard for business enterprises, ASBE interpretations and other relevant regulations (hereinaftercollectively referred to as “Accounting Standard for Business Enterprises”) and No.15 of Compilation Rules forInformation Disclosure by Companies Offering Securities to the Public - General Provisions of Financial Reportsissued by China Securities Regulatory Commission.
2. Continual operation
There are no events affecting the Company's going-concern ability and it is expected that the Company will beable to operate as a ontinuing operations within the next 12 months. The Company's financial statements areprepared on the basis of the assumption of ontinuing operations.
V. Significant accounting policy and accounting estimate
Specific accounting policy and accounting estimate:
The following significant accounting policy and accounting estimate of the Company are formulated in accordance with theAccounting Standards for Business Enterprises. The business not mentioned is implemented in accordance with the relevantaccounting policies in the Accounting Standards for Business Enterprises.
1. Statement of compliance with Accounting Standards for Business EnterprisesThese financial statements comply with the requirements of the Accounting Standards for Business Enterprisesissued by the Ministry of Finance, and truly and completely reflect the consolidated and parent company financialposition of the Company on December 31, 2021 and the business performance and cash flows of the Company in2021.
2. Accounting period
The fiscal year of the Company runs from January 1 to December 31 of each calendar year.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Reporting currency
The reporting currency of the Company is RMB.
5. Accounting treatment of business combination involving enterprises under and not under common
controlBusiness combination involving enterprises under the same control: the assets and liabilities acquired by themerging party in the business combination (including the goodwill formed by the final controlling party bypurchasing the merged party) shall be measured on the basis of the book value of the assets and liabilities of themerged party in the consolidated financial statements of the final controlling party on the merger date. Thedifference between the book value of the net assets obtained and the consideration paid for the combination (ortotal par value of issued shares) is adjusted against capital reserve (capital stock premium); if the capital reserve(capital stock premium) is not sufficient to absorb the difference, the retained earnings shall be adjusted.Business combination not involving enterprises under common control: the cost of combination is the fair value ofthe assets paid, liabilities incurred or assumed and equity securities issued by the acquirer on the acquiring datefor acquisition of the control right of the acquiree. If the cost of combination is greater than the share of the fairvalue of the acquiree's identifiable net assets acquired in the combination, the difference is recognized as goodwill;if the cost of combination is less than the share of the fair value of the acquiree's identifiable net assets acquired inthe combination, the difference is included in the profit and loss of the current period. The acquiree's identifiableassets, liabilities and contingent liabilities obtained by the acquirer in the combination meeting the recognitionconditions are measured at fair value on the acquiring date.The directly related expenses incurred for the business combination are included in the profit and loss of thecurrent period; the transaction costs associated with the issue of equity or debt securities for the businesscombination are included in the initially recognized amounts of the equity or debt securities.
6. Methods for preparing consolidated financial statements
1) Consolidation scope
The consolidation scope of the consolidated financial statements is determined on a control basis and includes theCompany and all subsidiaries. Control means that the Company has the power over the invested entity, enjoysvariable returns by participating in the relevant activities of the invested entity, and has the ability to use the powerto influence the amount of returns.
2) Consolidation procedures
The Company regards the whole enterprise group as an accounting entity and prepares consolidated financialstatements in accordance with unified accounting policies to reflect the overall financial position, operating resultsand cash flow of the enterprise group. The impact of internal transactions between the Company and itssubsidiaries and between the subsidiaries are offset. If the internal transaction indicates that impairment loss hasoccurred to relevant assets, such loss shall be recognized in full. If the accounting policies and the accountingperiods adopted by the subsidiaries are inconsistent with those of the Company, necessary adjustments shall bemade in accordance with the accounting policies and the accounting periods of the Company when preparing theconsolidated financial statements.The minority shareholders' share of the subsidiary's owners' equity, current net profit and loss and currentcomprehensive income shall be separately listed under the owners' equity item in the consolidated balance sheet,under the net profit item and under the total comprehensive income item in the consolidated income statement. Ifthe current loss shared by the minority shareholders of the subsidiary exceeds their share in the owner's equity ofthe subsidiary at the beginning of the period, the minority equity shall be offset by the balance.
(1) Increase of subsidiaries or business
During the reporting period, if subsidiaries or business are increased due to business combination involvingenterprises under the same control, the operating results and cash flow from the beginning of the current period tothe end are incorporated into the consolidated financial statements, and the opening balance in the consolidatedfinancial statements and the related items in comparative statements are adjusted, which shall be regarded that thereporting subject after combination has been existed since the initial control point of the ultimate controlling party.
If the invested party under the same control is controlled by the additional investment and other reasons, theequity investment held before obtaining the control of the merged party, and the relevant profits and losses, othercomprehensive income and other net assets and other net assets changes between the date of acquisition of theoriginal equity and the date on which the merging party and the merged party are under the same control(whichever is later) and the merger date shall offset the period of between the opening retained earnings or currentprofits and losses in the comparative reporting period.During the reporting period, if subsidiaries or business are increased due to business combination of enterprisesnot under the same control, it shall be included in the consolidated financial statements as of the acquisition dateon the basis of the fair value of all identifiable assets, liabilities and contingent liabilities determined on theacquisition date.If it is able to exercise control over the invested entity that is not under the same control due to additionalinvestment or other reasons, the equity held by the acquiree before the acquisition date shall be re-measuredaccording to the fair value of the equity on the acquisition date, and the difference between the fair value and thebook value shall be included into the current investment income. Other comprehensive income, which can bereclassified into profit and loss in the future, and other changes in owners' equity under the equity method asrelated to the acquiree's equity held before the acquisition date are converted to the investment income of thecurrent period as of the acquisition date.
(2) Disposal of subsidiary
① General disposal method
When the Company loses the control right over the invested entity due to disposal of part of the equity investmentor other reasons, the residual equity investment after the disposal shall be re-measured at its fair value on the dateof losing the control right. The difference between the sum of the consideration acquired by disposal of the equityand the fair value of the residual equity, minus the sum of the share of the net assets of the original subsidiarycontinuously calculated from the acquisition date or the merging date and the goodwill according to the originalshareholding ratio, shall be included in the investment income in the period of lose of the control right. Othercomprehensive income related to the equity investment of the original subsidiary that can be reclassified intoprofit and loss in the future, and other changes in owners' equity under the equity method are converted to theinvestment income in the period of lose of the control right.
② Disposal of subsidiary by steps
For disposal of the equity investment in the subsidiary by steps through multiple transactions till loss of thecontrol right, the terms, conditions and economic impact of the disposal on each transaction in respect of theequity investment of the subsidiary are subject to one or more of the following circumstances, which generallyindicate that the multiple transactions are package deals:
i. The transactions were entered into simultaneously or with consideration of their mutual influence;ii. These transactions as a whole can only achieve a complete business result;iii. The occurrence of one transaction depends on the occurrence of at least one other transaction;iv. A transaction is not economical alone, but economic when considered with other transactions.If each transaction belongs to a package deal, each transaction shall be subject to accounting treatment as a dealfor disposal of subsidiary and loss of the control right; the difference between the disposal price and the share ofnet assets of the subsidiary corresponding to the disposal of investment before the loss of control right isrecognized as other comprehensive income in the consolidated financial statements and transferred into thecurrent profit and loss in the period of loss of control right.If each transaction does not belong to a package deal, the equity investment of the subsidiary shall be subject toaccounting treatment without loss of control right before losing the control right; and accounting treatment shallbe carried out in accordance with the general disposal method of the subsidiary when losing the control right.
(3) Purchase of the minority equity of the subsidiaries
The difference between the long-term equity investment obtained due to the purchase of minority equity and theshare of the net assets to be enjoyed and continuously calculated from the acquisition date or merging date
according to the increased shareholding ratio is adjusted against the capital stock premium in the capital reserve inthe consolidated balance sheet; if the capital stock premium in the capital reserve is not sufficient to offset thedifference, the retained earnings shall be adjusted.
(4) Partial disposal of equity investment in subsidiaries without loss of control rightThe difference between the disposal price and the disposal of long-term equity investment and the share of the netassets to be enjoyed and continuously calculated from the acquisition date or merging date, is adjusted against thecapital stock premium in the capital reserve in the consolidated balance sheet; if the capital stock premium in thecapital reserve is not sufficient to offset the difference, the retained earnings shall be adjusted.
7. Joint venture arrangements classification and Co-operation accounting treatmentThe joint venture arrangement is divided into joint management and joint venture.Joint management means the joint venture arrangement in which the joint venture parties enjoy the assets andassumes the liabilities related to the arrangement.The Company confirms the following items related to the share of interests in the joint operation:
(1) Recognize the assets held solely by the Company and the assets jointly held according to the share of theCompany;
(2) Recognize the liabilities undertaken solely by the Company and the liabilities jointly undertaken according tothe share of the Company;
(3) Recognize the income generated from the sale of the Company’s share of the joint operation output;
(4) Recognize the income generated from the sale of outputs of the joint operation according to the share of theCompany;
(5) Recognize the expenses incurred separately and the expenses incurred in joint operation according to theshare of the CompanyThe Company's investment in the joint venture shall be accounted by the equity method. See Note "V. 22Long-term equity investment" for details.
8. Determining standards of cash and cash equivalents
Cash represents the Company’s cash on hand and the deposit readily available for payment. Cash equivalentsrepresent the short-term, highly liquid investments that are readily convertible into known amounts of cash andthat are subject to an insignificant risk of change in value.
9. Foreign currency transaction and foreign currency statement translation
1) Foreign Currency Business
Foreign currency transaction adopts the spot exchange rate on the date of the transaction as the conversionexchange rate to convert the foreign currency amount into RMB for reporting.At the balance sheet date, the balance of foreign currency monetary items are converted by using the spotexchange rates at the balance sheet date. Exchange differences arising therefrom are recognized in current profitand loss, except the exchange differences related to a specific-purpose borrowing denominated in foreign currencythat qualify for capitalization are treated according to the capitalization of borrowing costs.
2) Conversion of financial statements denominated in foreign currenciesThe asset and liability items in the foreign currency balance sheets shall be translated at a spot exchange rate onthe balance sheet date. Among the owner's equity items, except the ones as “undistributed profits”, others shall betranslated at the spot exchange rate at the time when they are incurred. The income and expense items in the
income statement are converted at the spot rate on the date of transaction.When disposing of the overseas operation, the balance of the financial statements denominated in foreigncurrencies related to the overseas operation shall be transferred from the owner's equity item to the profit and lossof the disposal period.
10. Financial instruments
The Company recognizes a financial asset, financial liability or equity instrument when becoming a party of thefinancial instrument contract.
1) Classification of financial instruments
According to the Company's business model of managing financial assets and the contractual cash flowcharacteristics of financial assets, the financial assets are classified at the initial recognition as: financial assetsmeasured at the amortized cost, financial assets measured at fair value of which changes are recorded into othercomprehensive income, and financial assets at fair value of which changes are recorded in current profit and loss.
The Company classifies the financial assets that meet the following conditions and are not designated to bemeasured at fair value and whose changes are recorded into the profits and losses of the current period as financialassets measured at the amortized cost:
– The business model is aimed at collecting contract cash flows;– The contract cash flow is only the payment of the principal and interest based on the outstanding principalamount.The Company classifies the financial assets that meet the following conditions and are not designated to bemeasured at fair value and whose changes are recorded into the profits and losses of the current period as financialassets measured at fair value of which changes are recorded into other comprehensive income (debt instrument):
– The business model is aimed at collecting contract cash flows and the sale of such financial assets;– The contract cash flow is only the payment of the principal and interest based on the outstanding principalamount.For non-trading equity instrument investments, the Company may, at the time of initial recognition, irrevocablydesignate them as financial assets measured at fair value of which changes are recorded into other comprehensiveincome (equity instrument). The designation is made on a single investment basis and the related investmentsmeet the definition of an equity instrument from an issuer's perspective.
Except the above financial assets measured at the amortized cost and the financial assets measured at fair value ofwhich changes are recorded into other comprehensive income, the Company classifies all other financial assets asfinancial assets at fair value of which changes are recorded in current profit and loss. Upon initial recognition, ifaccounting mismatches can be eliminated or significantly reduced, the Company can irrevocably designate thefinancial assets that should have been classified as those measured at the amortized cost or measured at fair valueof which changes are recorded into other comprehensive income as the financial assets measured at fair value ofwhich changes are recorded in current profit and loss.
Financial liabilities are classified at the initial recognition as: financial liabilities measured at fair value of whichchanges are recorded in current profit and loss and financial liabilities measured at the amortized cost.
Financial liabilities that meet one of the following conditions may be designated at the initial recognition as thefinancial liabilities measured at fair value of which changes are recorded in current profit and loss.
① This designation can eliminate or significantly reduce accounting mismatches.
② Manage and conduct performance evaluation of the financial liability portfolio or financial assets andfinancial liability portfolio on the basis of fair value according to the enterprise risk management orinvestment strategy set forth in the official written documents, and report to the key management personnelwithin the enterprise on this basis.
③ The financial liability contains embedded derivatives that need to be split separately.
2) Recognition basis and measurement method of financial instruments
(1) Financial asset measured on the basis of post-amortization costs
The financial assets measured at the amortized costs include bills receivable, accounts receivable, otherreceivables, long-term receivables, debt investment, etc., which shall be initially measured at fair value, and therelevant transaction expenses are included in the initial recognized amount; the receivables excluding majorfinancing components and the accounts receivable that the Company decides not to consider the financingcomponents of less than one year shall be initially measured at the contract transaction price.The interest calculated by the effective interest rate method during the holding period is recorded into the currentprofit and loss.Upon recovery or disposal, the difference between the price obtained and the book value of the financial assetsshall be recorded into the current profit or loss.
(2) Financial assets measured at fair value of which changes are recorded into other comprehensive income (debtinstrument)Financial assets measured at fair value of which changes are recorded into other comprehensive income (debtinstrument), including receivables financing and other debt investments, are initially measured at fair value andrelated transaction costs are included in the initial recognized amount. The financial asset is subsequentlymeasured at its fair value, and changes in the fair value are recorded in other comprehensive income, except theinterest, impairment loss or gains and exchange gain and loss calculated by the effective interest rate method.Upon the de-recognition, the accumulated gains or losses previously recorded in other comprehensive income willbe transferred from other comprehensive income to current profit and loss.
(3) Financial assets measured at fair value of which changes are recorded into other comprehensive income(equity instrument)Financial assets measured at fair value of which changes are recorded into other comprehensive income (equityinstrument), including other equity instrument investment, are initially measured at fair value and relatedtransaction costs are included in the initial recognized amount. Such financial assets are subsequently measured atthe fair value and the change in the fair value is recorded into other comprehensive income. The dividendsobtained are recorded in current profit and loss.Upon the de-recognition, the accumulated gains or losses previously recorded in other comprehensive income willbe transferred from other comprehensive income to retained earnings.
(4) Financial assets measured with fair value and with the changes included in current profit and lossFinancial assets measured at fair value of which changes are recorded in current profit and loss, including tradablefinancial assets, derivative financial assets, other non-current financial assets, etc., are initially measured at fairvalue and related transaction expenses are recorded in current profit and loss. Such financial assets are
subsequently measured at the fair value and the change in the fair value is recorded into current profit and loss.
(5) Financial liabilities measured at fair values, changes of which recorded in the current profits or lossesFinancial liabilities measured at fair value of which changes are recorded in current profit and loss, includingtradable financial liabilities, derivative financial liabilities, etc., are initially measured at fair value and relatedtransaction expenses are recorded in current profit and loss. Such financial liabilities are subsequently measured atthe fair value and the change in the fair value is recorded into current profit and loss.Upon the de-recognition, the difference between its book value and the consideration paid is recorded in currentprofit and loss.
(6) Financial liabilities measured at the amortized cost
Financial liabilities measured at amortized cost, including short-term loans, notes payable, accounts payable, otherpayables, long-term borrowings, bonds payable and long-term payables, are initially measured at fair value, andrelated transaction expenses are included in the initial recognized amount.The interest calculated by the effective interest rate method during the holding period is recorded into the currentprofit and loss.Upon the de-recognition, the difference between the consideration paid and the book value of such financialliability is recorded in current profit and loss.
3) De-recognition and transfer of financial assets
The Company shall derecognize the financial assets if one of the following conditions is satisfied:
– Termination of the contractual right to collect the cash flow of financial assets;– The financial assets have been transferred, and almost all the risks and remuneration in its ownership havebeen transferred to the transferee;– The financial assets have been transferred, and while the Company has neither transferred nor retainedvirtually all of the risks and remuneration in the ownership of the financial assets, it has not retained controlof the financial assets.
In the event of a financial asset transfer, if almost all the risks and remuneration in the ownership of the financialasset are retained, the recognition of the financial asset will not be terminated.
The principle of substance over form is adopted when judging whether the transfer of financial assets meets theabove conditions for de-recognition of financial assets.The Company divides the transfer of financial assets into the whole transfer of financial assets and the partialtransfer of financial assets. If the overall transfer of the financial asset meets the de-recognition conditions, thedifference between the following two amounts shall be recorded into the current profits and losses:
(1) The book value of the transferred financial asset;
(2) The sum of the consideration received from the transfer and the cumulative amount of the fair value changesoriginally included in owner’s equity directly (where the financial asset involved in the transfer is measuredat fair value and the change is recorded in other comprehensive income (debt instrument)).
If the partial transfer of the financial asset meets the de-recognition conditions, the book value of the overall
transferred financial asset is distributed between the derecognized and non-derecognized part according to therelative fair value and the difference between the following two amounts is included in current profit and loss:
(1) The book value of derecognized part;
(2) Sum of the consideration of the derecognized part and the amount of corresponding derecognized part in thetotal fair value changes originally included in owner’s equity directly (where the financial asset involved inthe transfer is measured at fair value and the change is recorded in other comprehensive income (debtinstrument)).If the transfer of the financial asset does not meet the conditions of de-recognition, such financial asset shallcontinue to be recognized and the consideration received shall be recognized as a financial liability.
4) De-recognition of financial liabilities
Where the current obligation of a financial liability has been discharged in whole or in part, such financial liabilityor part thereof shall be derecognized; if the Company enters into an agreement with the creditor to replace theexisting financial liabilities by assuming new financial liabilities, and the contract terms of the new financialliabilities and the existing financial liabilities are substantially different, the Company shall derecognize theexisting financial liabilities and recognize the new financial liabilities at the same time.If all or part of the contract terms of the existing financial liabilities are substantially modified, the existingfinancial liability or part thereof shall be derecognized, and the financial liabilities after the modification shall berecognized as new financial liabilities.When a financial liability is derecognized in whole or in part, the difference between the book value of thederecognized financial liability and the consideration paid (including non-cash asset transferred out or the newfinancial liability undertaken) is recorded in current profit and loss.If the Company repurchases part of the financial liability, it shall allocate the overall book value of the financialliability on the repurchase date according to the relative fair value of the continuing recognition part and thede-recognition part. The difference between the book value allocated to the derecognized part and theconsideration paid (including non-cash asset transferred out or the liability undertaken) is recorded in currentprofit and loss.
5) Fair value determination method of financial assets and financial liabilitiesThe fair value of a financial instrument with an active market shall be recognized based on the quotation in theactive market. The fair value of a financial instrument without an active market shall be recognized by means ofvaluation techniques. Upon valuation, the Company adopts valuation techniques applicable to the current situationand supported by sufficient available data and other information, selects input values consistent with the asset orliability characteristics considered by market participants in the transaction of related assets or liabilities, andgives priority to relevant observable input values. The Company uses non-observable input values only whenrelevant observable input values cannot be obtained or are not practicable to obtain.
6) Test method and accounting treatment method of financial assets impairmentThe Company estimates the expected credit losses of financial assets measured at amortized cost, financial assetsmeasured at fair value of which changes are recorded into other comprehensive income (debt instrument) andfinancial guarantee contracts on a single or combined basis.
The Company calculates the probabilistic weighted amount of the present value of the difference between the cashflows receivable under the contracts and the cash flows expected to be received and recognizes the expected creditloss, taking into account reasonable and evidential information concerning past events, current conditions andprojections of future economic conditions, and weighting the risk of default.
If the credit risks of such financial instrument have increased significantly since the initial recognition, theCompany shall measure its loss provision according to the amount equivalent to the expected credit loss in theentire duration of such financial instrument. If the credit risks of such financial instrument have not increasedsignificantly since the initial recognition, the Company shall measure the loss provision according to the amountequivalent to the expected credit loss of such financial instrument in the next 12 months. The amount of theincrease or reversal of the loss provision resulting therefrom shall be recorded into the current profit and loss as animpairment loss or profit.By comparing the risk of default of financial instruments on the balance sheet date with the risk of default on theinitial recognition date, the Company determines the change of the default risk during the expected duration of thefinancial instruments, so as to assess whether the credit risks of financial instruments have significantly increasedsince the initial recognition. In general, the Company will consider that the credit risks of the financial instrumenthas increased significantly if it is more than 30 days overdue, unless there is conclusive evidence that the creditrisks of such financial instrument have not increased significantly since the initial recognition.If the credit risks of the financial instrument is low on the balance sheet date, the Company considers that thecredit risks of the financial instrument have not increased significantly since the initial recognition.If there is objective evidence that a certain financial asset has suffered credit impairment, the Company shall makeprovision for the impairment of the financial asset on an individual basis.For receivables and contract assets formed by transactions regulated by Accounting Standards for BusinessEnterprises No.14 - Revenue (2017), the Company always measures its loss provision at an amount equivalent tothe expected credit loss over the entire duration, whether o r not it contains major financing components.For lease receivable, the Company shall always measure its loss provision according to the amount equivalent tothe expected credit loss within the entire duration.
If the Company no longer reasonably expects that the contract cash flow of a financial asset can be recovered inwhole or in part, it will directly write down the book balance of such financial asset.
11. Notes receivable
See 12. Accounts receivable.
12. Accounts receivable
1) Impairment of notes receivable and accounts receivable
For notes receivable and accounts receivable, whether or not they contain major financing components, theCompany always measures its loss provision at an amount equivalent to the expected credit loss over the entireduration, and the increase or reversal amount of the loss provision thus formed is recorded into the current profitand loss as impairment loss or gain.For notes receivable, the Company shall always measure its loss provision according to the amount equivalent tothe expected credit loss within the entire duration. Based on the credit risk characteristics of notes receivable, it isdivided into different portfolios:
| Item | Basis for recognition of combination and accrual method of provision for bad debt |
Banker's acceptancebill
| Banker's acceptance bill | If the acceptor is a bank with higher credit rating (such as large state-owned commercial banks and listed joint-stock commercial banks), no provision for bad debts shall be made; if the acceptor is another bank or financial company, the expected credit loss is analyzed based on historical information and judged whether it is necessary to make provision for bad debts. |
Trade acceptance
| Trade acceptance | If the acceptor is a non-financial institution, its division is the same as that of accounts receivable (if accounts receivable are transferred to notes receivables, the age of accounts is calculated continuously). |
The Company combines the notes receivable-trade acceptance, accounts receivable (except in the consolidation)and prepayments with similar credit risk characteristics (aging), and estimates the proportion of bad debtprovision for notes receivable -trade acceptance, accounts receivable and prepayments based on all reasonableand informed information, including forward-looking information, as follows:
| Aging | Accruing proportion of accounts receivable (%) | Accruing proportion of trade acceptance (%) | Accruing proportion of prepaid accounts (%) |
Within 1 year (including 1year)
| Within 1 year (including 1 year) | 5 | 5 | 0 |
1-2 years
| 1-2 years | 10 | 10 | 0 |
2-3 years
| 2-3 years | 30 | 30 | 50 |
3-4 years
| 3-4 years | 50 | 50 | 100 |
4-5 years
| 4-5 years | 80 | 80 | 100 |
More than 5 years
| More than 5 years | 100 | 100 | 100 |
If there is objective evidence that a certain note receivable, account receivable or prepayment has incurred creditimpairment, the Company shall make a provision for bad debts for the note receivable or account receivable orprepayment separately and recognize the expected credit loss.
2) Other receivables
For the measurement of impairment loss of other receivables other than accounts receivable and notes receivable(including other receivables, long-term receivables, etc.), it shall be treated by referring to the “V. 10. Financialinstruments 6) Test method and accounting treatment method of financial assets impairment (excludingreceivables)”.
13. Accounts receivable financing
See 10. Financial instruments.
14. Other receivables
Recognition method and accounting treatment method of the expected credit loss of other receivablesFor the measurement of impairment loss of other receivables other than accounts receivable and notes receivable (including otherreceivables, long-term receivables, etc.), it shall be treated by referring to the “V. 10. Financial instruments 6) Test method andaccounting treatment method of financial assets impairment (excluding receivables)”.
15. Inventory
1) Classification and cost of inventories
The inventories are classified as raw materials, low priced and easily worn articles, merchandise inventory, workin progress, goods shipped in transit, goods processed by commission, wrappage, etc.Inventories are initially measured at cost. The inventory cost includes procurement costs, processing costs, andother expenses incurred to bring the inventory to its current location and condition.
2) Valuation method of delivered inventory
The sales of purchased finished products are priced according to the moving weighted average method at the timeof shipment; the sales of self-produced products are priced according to the standard cost method at the time ofshipment, and the difference between the actual cost and the standard cost shall be apportioned according to theinventory and sales ratio at the end of the period.
3) Recognition basis of net realizable value of different types of inventoriesThe inventories shall be measured on the balance sheet date according to the cost of inventories or net realizablevalue, whichever is lower. If the cost of the inventories is higher than the net realizable value, the inventory fallingprice reserves shall be withdrawn. The net realizable value of inventories is the amount of the estimated sale priceof the inventories subtracted by the estimated cost about to occur in completion, estimated selling expenses andrelated taxes in daily activities.For the finished products, merchandise inventory, materials for sale and other merchandise inventories directlyused for sale, the net realizable value is recognized by the amount of the estimated sale price of the inventoriessubtracted by the estimated selling expenses and related taxes in normal production and operation process; for thematerial inventory required to be processed, the net realizable value is recognized by the amount of the estimatedsale price of the finished products subtracted by the estimated cost about to occur in completion, estimated sellingexpenses and related taxes in normal production and operation process; for the inventories held to perform thesales contract or labor contract, the net realizable value is calculated on the basis of contract price. If the numberof the inventories held is greater than the quantity ordered in the sales contract, the net realizable value of theexcessive inventories is calculated on the basis of general sale price.
If the influence factors writing down the inventory value before have disappeared after withdrawal of theinventory falling price reserves, resulting in the net realizable value of the inventories higher than the book value,the amount written down is reversed within the originally withdrawn amount of inventory falling price reservesand the amount reversed is included in current profits and losses.
4) Inventory system
The perpetual inventory system is adopted.
5) Amortization methods of low priced and easily worn articles and wrappage
(1) The 50-50 amortization method is adopted for low-value consumables;
(2) The packaging adopts the one-time write-off method.
16. Contract assets
1) Methods and standards for the recognition of contract assets
The Company lists the contractual assets or contractual liabilities in the balance sheet according to the relationshipbetween performance obligations and customer payment. The Company's rights to receive consideration for thetransfer of goods or services to the customer (and such rights are subject to factors other than the passage of time)are listed as contractual assets. The contractual assets and contractual liabilities under the same contract are listedin the net amount. The rights that the Company owns and unconditionally (depending only on the passage of time)to collect consideration from the customer are listed separately as receivables.
2) Recognition method and accounting treatment method of the expected credit loss of contractual assetsFor the recognition methods and accounting treatment methods of the expected credit loss of the contract assets,please refer to Note “V. 10. Financial Instruments 6) Test method and accounting treatment method of financialassets impairment (excluding receivables) ".
17. Contract cost
Contract cost includes the contract performance cost and the contract acquisition cost.
If the cost incurred by the Company for the performance of the contract is not within the scope of relevantstandards for inventory, fixed assets or intangible assets, it shall be recognized as an asset as a contractperformance cost when the following conditions are met:
● The cost is directly related to a current or anticipated contract.
● The cost increases the Company’s future resources to meet its performance obligations.
● The cost is expected to be recoverable.
If the Company is expected to recover the incremental cost incurred in acquiring the contract, it shall berecognized as an asset as the contract acquisition cost.Assets related to contract costs are amortized on the same basis as income recognition of goods or services relatedto the asset; however, if the amortization period of the contract acquisition cost is less than one year, the Companyshall record it into the current profit and loss when it is incurred.If the book value of an asset related to the contract cost is higher than the difference between the following twoitems, the Company shall draw an impairment provision for the excess portion and recognize it as the assetsimpairment loss:
(1) Remaining consideration expected to be obtained as a result of the transfer of the goods or services related tothe asset;
(2) The costs is estimated and to be incurred for the transfer of the relevant goods or services.If the factors of impairment in the previous period change so that the difference above is higher than the bookvalue of the asset, the Company shall reverse the withdrawn impairment provision and include it into the currentprofit and loss, but the book value of the reversed asset shall not exceed the book value of such asset on thereversal date if the impairment provision is not withdrawn.
18. Assets held for sales
If the book value of an asset is recovered mainly through the sale (including the non-monetary assets exchange ofcommercial nature) rather than continuous use of a non-current asset or disposal group, such asset is classified asan asset held for sale.The Company classifies non-current assets or disposal groups as held for sale if they meet the followingconditions simultaneously:
(1) Immediately available for sale under current conditions in accordance with the usual practice of selling suchtype of assets or disposal groups in similar transactions;
(2) The sale is highly likely, that is, the Company has resolved a sale plan and obtained a firm purchasecommitment, and the sale is expected to be completed within one year. Where the relevant provisions requirethe approval of the relevant authority or regulatory authority of the Company before the sale, the approvalhas been obtained.Where it is classified as non-current assets (not including financial assets and deferred income tax assets,investment real estate using fair value measurement mode, the assets formed by the employee compensation) ordisposal groups held for sale, if its book value is higher than the net amount of the fair value minus the sellingexpense, the book value is written down to the net amount of the fair value minus the selling expense, the amountwritten down is recognized as the assets impairment loss and included in the current profit and loss. The provisionfor impairment of available for sale assets is withdrawn.
19. Debt investment
See 10. Financial instruments.
20. Other debt investments
See 10. Financial instruments.
21. Long-term receivables
N/A
22. Long-term equity investment
1) Criteria for determining joint control and significant influence
Joint control refers to the joint control over an arrangement in accordance with the relevant agreement, and therelated activities of the arrangement can only be decided upon the unanimous consent of the parties sharing thecontrol. Where the Company and other joint venture parties jointly exercise joint control over the invested entityand enjoy rights over the net assets of the invested entity. The invested entity shall be the joint venture of theCompany.Significant influence means the power to participate in the formulation of financial and operating decisions of theinvested entity, but not the power to control or jointly control the formulation of these policies together with otherparties. If the Company is able to exert significant influence on the invested entity, the invested entity is a jointventure of the Company.
2) Recognition of initial investment cost
(1) Long-term equity investment formed by business combination
For the long-term equity investment in a subsidiary formed by business combination under common control, theshare of the book value of the owner’s equity of the combining party in the consolidated financial statements ofthe final controlling party, on the combination date, is regarded as the initial cost of the long-term equityinvestment. The difference between the initial cost of the long-term equity investment and the book value of paidconsideration shall adjust the capital stock premium in capital reserve. If the capital stock premium in capitalreserve is insufficient to offset, the retained earnings shall be adjusted. Where it implements the control upon theinvested entity under the same control due to additional investment or other reasons, the difference between theinitial investment cost of the long-term equity investment recognized according to the above principle and the sumof the book value of the long-term equity investment before the combination plus the book value of the newconsideration for the acquisition of further shares on the merging date shall adjust the capital stock premium. Ifthe capital stock premium is insufficient to offset, the retained earnings shall be offset.For the long-term equity investment in a subsidiary formed by business combination not under common control,the combined cost recognized on the acquisition date is regarded as the initial cost of the long-term equityinvestment. Where it implements the control upon the invested entity not under the same control due to additionalinvestment and other reasons, the sum of the book value of the original equity investment plus the new investmentcost is taken as the initial investment cost.
(2) Long-term equity investment acquired by means other than business combinationIf the long-term equity investment is acquired by means of cash payment, the initial investment cost shall be thepurchase price actually paid.If the long-term equity investment is acquired by issuing equity securities, the initial investment cost shall be thefair value of the equity securities issued.
3) Subsequent Measurement and Approach for the Determination of Profit and Loss
(1) Long-term equity investment checked by cost method
The long-term equity investment made by the Company in its subsidiaries adopts the cost method, unless theinvestment meets the conditions of holding for sale. Except for cash dividends or profits already declared but notyet paid that are included in the price or consideration actually paid upon acquisition of the investment, the
Company recognize the investment income in current period in accordance with the attributable share of cashdividends or profit distributions declared by the invested entity.
(2) Long-term equity investment checked by equity method
The long-term equity investment of joint ventures and cooperative enterprises shall be calculated by the equitymethod. The initial in vestment cost of the long-term equity investment is not adjusted if it is greater than thedifference between the fair value share of the net identifiable assets of the invested entity in the investment; if theinitial investment cost of the long-term equity investment is less than the difference between the fair value shareof the net identifiable assets of the invested entity in the investment, it is recorded in current profit and loss andthe cost of the long-term equity investment is adjusted.The Company recognizes the investment income and other comprehensive income according to its share of netprofit or loss and other comprehensive income of the invested entity, and adjusts the boot value of the long-termequity investment accordingly; the Company decreases the book value of the long-term equity investmentaccordingly in accordance with the share of the profit distribution or cash dividends declared by the investedentity; for changes in owner’s equity of the invested entity other than those arising from its net profit o r loss,other comprehensive income and profit distribution (abbreviated as “other changes in owner’s equity”), theCompany adjusts the book value of the long-term equity investment and records in the owner’s equity.Upon recognizing the share of the net profit and loss, other comprehensive income and other changes in owner'sequity of the invested entity, it shall be recognized after adjusting the net income and other comprehensive incomeof the invested entity on the basis of the fair value of the identifiable net assets of the invested entity whenobtaining the investment, and in accordance with the Company's accounting policies and accounting periods.The profits and losses of unrealized internal transactions between the Company and joint ventures, cooperativeenterprises shall be calculated according to the proportion that should be enjoyed by the Company and shall beoffset. On this basis, investment income shall be recognized, except that the assets invested or sold constitutebusiness. The unrealized internal deal loss between the Company and the invested entity is recognized in fullamount if attributable to the assets impairment loss.The net loss incurred by the Company to the cooperative enterprise or joint venture, except for the liability foradditional loss, shall be written down to zero by the book value of long-term equity investment and otherlong-term equity substantially constituting the net investment in the cooperative enterprise or joint venture. If thecooperative enterprise or joint venture achieves the net profits in the later periods, the Company recovers torecognize the gain sharing amount after making up for the unrecognized loss sharing amount with the gain sharingamount.
(3) Disposal of long-term equity investment
On disposal of the long-term equity investment, the balance between the book value of the equity disposed of andthe actual price obtained is charged to current profit and loss.If part of the long-term equity investment is disposed of by the equity method, and the remaining equity is stillaccounted by the equity method, the other comprehensive income recognized by the original equity method shallbe carried forward on the same basis as the relevant assets or liabilities directly disposed of by the invested entityat the corresponding proportion, and the changes in other owners' equity shall be carried forward to the currentprofit and loss on a proportional basis.If the joint control or significant influence on the invested entity is lost due to the disposal of equity investment orother reasons, other comprehensive income of the original equity investment recognized by the equity methodshall be subject to accounting treatment through adopting the basis for the direct disposal of relevant assets ordebts when the equity method is terminated. Other changes in owners' equity will be transferred to current profitand loss when the equity method is terminated.If the Company loses its control rights over the invested entity due to the disposal of part of the equity investment,when preparing individual financial statement, in case of the residual equity with joint control or significantinfluence on the invested entity, the Company shall calculate and adjust the residual equity with equity method asupon obtaining. Other comprehensive income recognized before the acquisition of the control right of the investedentity shall be carried forward proportionately on the same basis as the direct disposal of relevant assets orliabilities by the invested entity, and other changes in owners' equity recognized by the equity method shall be
carried forward proportionately to the current profit and loss. If the residual equity cannot exercise joint control orexert significant influence on the invested entity, it shall be recognized as financial assets, the difference betweenits fair value and book value on the date of loss of control shall be included in the current profit and loss, and allother comprehensive income and other changes in owner’s equity recognized before obtaining the control right ofthe invested entity shall be carried forward.If the deals for disposal of the subsidiary’s equity investment by steps through several times of transaction untilthe loss of the control right belong to a package deal, the deals shall be subject to accounting treatment as a dealfor disposal of the equity investment in the subsidiary and loss of the control right; the difference between eachdisposal price and the book value of the long-term equity investment corresponding to the equity disposed ofbefore the loss of control right is, in individual financial statements, recognized as other comprehensive incomeand then transferred into the current profit and loss in the period of loss of control right. If it does not belong to apackage deal, each deal shall be accounted for separately.
23. Investment in real estates
Measurement mode of investment real estateN/A
24. Fixed assets
(1) Recognition conditions
The fixed assets refer to the tangible assets which are held for production of goods, provision of labor, lease oroperating management and whose service life exceeds a fiscal year. The fixed assets can be recognized whenmeeting the following conditions:
① The expected economic benefits related to the fixed assets are likely to flow to the enterprise;
② The cost of the fixed assets can be reliably measured.
The fixed assets are initially measured according to the cost (and the influence of the expected disposal costfactors).Subsequent expenditure related to fixed assets, if the economic benefits related may flow in and the cost can bereliably measured, is included in the fixed asset cost; and the book value of the replaced part is derecognized; allother subsequent expenditures are recorded into current profit and loss when incurred.
(2) Depreciation method
| Class | Depreciation method | Expected service life | Residual rate | Yearly depreciation |
Houses and building
| Houses and building | Straight-line depreciation | 10~35 years | 10.00% | 2.57%-9% |
Machinery equipment
| Machinery equipment | Straight-line depreciation | 2~15 years | 10.00% | 6%-45% |
Transportationequipment
| Transportation equipment | Straight-line depreciation | 3~10 years | 10.00% | 9%-30% |
Electronic equipmentand office equipment,etc.
| Electronic equipment and office equipment, etc. | Straight-line depreciation | 2~10 years | 10.00% | 9%-45% |
Depreciation of fixed assets is calculated by straight-line depreciation method and the depreciation rate isdetermined according to the category, expected useful life and expected net residual rate of the fixed assets. Forfixed assets with provision for impairment, the amount of depreciation shall be recognized in future periodsaccording to the book value after deducting the provision for impairment and based on the usable life. If thecomponents of the fixed assets have different useful life or provide economic benefits for the Company indifferent ways, the depreciation is calculated respectively by different depreciation rates or depreciation methods.
(3) Recognition basis, valuation and depreciation methods of fixed assets under financing lease
25. Construction in progress
The construction in progress is measured according to the actual cost incurred. Actual costs include constructioncosts, installation costs, borrowing costs eligible for capitalization, and other expenses necessary to bring theconstruction in progress to a predetermined usable state. When the construction in progress reaches the intendedserviceable condition. it is transferred into fixed assets and begin to withdraw the depreciation since the nextmonth.
26. Borrowing costs
1) Recognition principle of capitalization of borrowing costs
If the borrowing costs incurred by the Company can be directly attributed to the purchase, construction orproduction of the assets eligible for capitalization, they shall be capitalized and recorded into the cost of therelevant assets; other borrowing costs shall be recognized as expenses according to the amount incurred at thetime of occurrence and shall be recorded into the current profit and loss.Assets meeting the capitalization conditions refer to the fixed assets, investment real estate, inventories and otherassets which can reach the intended usable or marketable status only after quite a long time of construction orproduction activities.
2) Capitalization period of borrowing costs
Capitalization period refers to the period from the time point at which borrowing costs begin to be capitalized tothe time point at which borrowing costs cease to be capitalized, excluding the period during which thecapitalization of borrowing costs is suspended.Capitalization begins when borrowing costs meet the following conditions:
(1) Asset expenditures have been incurred, including expenditures incurred in the form of cash payment, transferof non-cash assets or undertaking interest-bearing liabilities for the purchase and construction of orproduction of assets eligible for capitalization;
(2) Borrowing costs have been incurred;
(3) The purchase, construction or production activities which are necessary to prepare the asset for its intendeduse or sale have started.When the purchase, construction or production of assets that meet the capitalization conditions reach thepredetermined usable or marketable state, the capitalization of borrowing costs shall cease.
3) Capitalization suspension period
If the assets that meet the capitalization conditions are abnormally interrupted in the process of purchase andconstruction or production, and the interruption period is more than 3 consecutive months, the capitalization ofborrowing costs shall be suspended; if the interruption is necessary for the purchase, construction or production ofthe assets that meet the capitalization conditions to reach the predetermined usable state or marketable state, theborrowing costs shall continue to be capitalized. The borrowing costs incurred during the interruption period arerecognized as the current profit and loss, until the borrowing costs continue to be capitalized after the purchaseand construction or the production activities of the assets are restarted.
4) Calculation method of capitalization rate and capitalization amount of borrowing costsFor the specific borrowing for the purchase and construction or production of assets eligible for capitalization, thecapitalization amount of borrowing costs shall be recognized by the borrowing costs actually occurring in thecurrent period of specific borrowing, minus the amount of the interest income obtained by depositing the unused
borrowing funds in the bank or the investment income obtained by making temporary investment.For the general borrowing occupied for the purchase, construction or production of assets that meet thecapitalization conditions, the amount of borrowing expenses to be capitalized for the general borrowing shall becalculated and recognized according to the weighted average of the accumulated asset expenditure exceeding thespecific borrowing multiplied by the capitalization rate of the general borrowing occupied. The capitalization rateis calculated and recognized according to the weighted average effective interest rate of the general borrowing.During the capitalization period, the difference between the exchange of the principal and interest of the specificforeign currency borrowing shall be capitalized and recorded into the cost of the assets eligible for capitalization.The exchange difference arising from the principal and interest of foreign currency borrowings other than specificforeign currency borrowing is recorded into the current profit and loss.
27. Biological assets
N/A
28. Oil and gas assets
N/A
29. Right-of-use assets
See Note V. 42. Lease.
30. Intangible assets
(1) Valuation method, service life and impairment test
1) Pricing methods for intangible assets
① The intangible assets are initially measured according to the cost;
The costs of purchased intangible assets include the purchase price, related taxes as well as other expensesincurred to make the assets reach the intended serviceable conditions and attributable to the assets.
② Subsequent measurement
The Company analyzes and judges the useful life of the intangible assets when obtaining.The intangible assets with limited useful life are amortized within the period when the intangible assets bringeconomic benefits to the Company; the intangible assets that cannot be expected to bring economic benefits to theCompany are deemed to have uncertain life and are not amortized.
2) Estimation of useful life of intangible assets with limited life
| Item | Expected useful life | Basis |
Land use right
| Land use right | 50 | Term of use specified in the land-use right certificate |
Software use right
| Software use right | 2-8 years | Useful life estimated by the management |
Trademark right
| Trademark right | 5-10 years | Benefit period specified in the certificate of trademark use |
Patent right
| Patent right | 5-10 years | Benefit period specified in the certificate of patent use |
Franchised use right
| Franchised use right | 3 | Term of use stipulated in the contract |
3) Basis for judging intangible assets with uncertain service life and the procedures for reviewing their
service lifeDuring this reporting period, the Company has no intangible assets with uncertain service life.
(2) Accounting policy of expenditure for internal research and development
1) Specific criteria for dividing research stage and development stageThe expenditure of the Company's internal R&D projects is classified into the expenditure at the research stageand the expenditure at the development stage.Research stage: the stage of original, planned investigation and research activities to acquire and understand newscientific or technical knowledge, etc.Development stage: the stage in which research or other knowledge is applied to a plan or design to produce newor substantially improved materials, devices, products, etc., prior to commercial production or use.
2) Specific conditions for the capitalization of expenditures in the development stageThe expenditure at the research stage is charged to the current profit and loss in occurrence. The expenditure at thedevelopment stage can be recognized as intangible assets only when meeting the following conditions and chargedto the current profit and loss if not meeting the following conditions:
① Technically feasible to complete the intangible assets, so that they can be used or sold;
② It is intended to finish and use or sell the intangible assets;
③ Ways of intangible assets to generate economic benefits, including those can prove that the products
generated by the intangible assets can be sold or the intangible assets themselves can be sold and prove that
the intangible assets to be used internally are useful;
④ It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with
the support of sufficient technologies, financial resources and other resources; and
⑤ The development expenditures of the intangible assets can be reliably measured.If the expenditure at the research stage and the expenditure at the development stage cannot be distinguished, theR&D expenditure incurred is fully charged to the current profit and loss.
The Company is required to comply with the disclosure requirements of “Medical Device Business” in the “Shenzhen StockExchange Self-Regulatory Guidelines for Listed Companies No. 4 -- Industry Information Disclosure for ChiNext Stock Market”
31. Long-term assets impairment
Long-term assets such as long-term equity investment, fixed assets, construction in progress, right-of-use assets,intangible assets with limited service life, and oil and gas assets, which show signs of impairment on the balancesheet date, shall be subject to impairment tests. If the impairment test results show that recoverable amount of theasset is below its book value, the provision for impairment is withdrawn according to the balance and charged tothe impairment loss. The recoverable amount is determined according to the higher of the net amount of the assetsfair value subtracted by the disposal costs and the present value of the expected future cash flow of the assets. Theprovision for impairment of assets is calculated and recognized on the basis of single asset. The Companyrecognizes the recoverable amount of the asset group based on the asset group to which the asset belongs if therecoverable amount of the single asset is difficult to estimate. An asset group is the smallest group of assets thatcan generate cash inflows independently.The goodwill formed due to business combination, intangible assets with uncertain service life and intangibleassets that have not yet reached the usable state shall be subject to impairment test at least at the end of each yearregardless of whether there are signs of impairment.The Company conducts the goodwill impairment tests. For the book value of the goodwill formed due to business
combination, it shall be apportioned to the relevant asset group by a reasonable method from the date of purchase;if it is difficult to apportion to the relevant asset group, it shall be apportioned to the relevant asset groupcombination. The relevant asset group or asset group combination is an asset group or asset group combinationthat can benefit from the synergies of business combination.When conducting impairment test on the relevant asset group or asset group combination containing goodwill, ifthere are signs of impairment in the asset group or asset group combination related to goodwill, conductimpairment test on the asset group or asset group combination without goodwill at first, calculate the recoverableamount and recognize the corresponding impairment loss compared with the relevant book value. Then conductan impairment test on the asset group or asset group combination containing goodwill to compare its book valuewith the recoverable amount. If the recoverable amount is less than the book value, the amount of impairment lossshall first offset the book value of goodwill amortized to the asset group or asset group combination, and thenoffset the book value of other assets proportionally according to the proportion of the book value of assets otherthan goodwill in the asset group or asset group combination. The above impairment loss of assets will not bereserved in subsequent accounting periods once recognized.
32. Long-term deferred expenses
Long-term deferred expenses refer to the expenses that have occurred but shall be burdened in current period andlater periods with the apportionment period more than one year.Amortization method: long-term deferred expenses are amortized on an average basis over the benefit period.
33. Contract liabilities
The Company lists the contractual assets or contractual liabilities in the balance sheet according to the relationshipbetween performance obligations and customer payment. The obligations of the Company to transfer goods orprovide services to customers for which consideration has been received or receivable are listed as contractualliabilities. The contractual assets and contractual liabilities under the same contract are listed in the net amount.
34. Employee compensation
(1) Short-term compensation accounting method
The Company recognizes the short-term compensation incurred actually during the accounting period when theemployees provide services for the Company as the liabilities and includes in current profits and losses or relatedasset costs.For the social insurance premiums and housing funds paid by the Company for the employees as wells as thelabor union expenditure and personnel education fund withdrawn according to the provisions, the correspondingemployee compensation amount is recognized according to the stipulated accruing basis and accruing proportionduring the accounting period when the employees provide services for the Company.The employee welfare expenses incurred by the Company shall be recorded into the current profit and loss orrelevant asset cost according to the actual amount when actually incurred, and the non-monetary welfare shall bemeasured at its fair value.
(2) Post-employment benefits accounting method
① Defined contribution plan
The Company pays the basic endowment insurance and unemployment insurance for the employees according torelevant provisions of the local government, calculates the amount payable according to local payment base andproportion in the accounting period when the employees provide services for the Company, recognizes the amountpayable as the liabilities and includes in current profits and losses or related asset costs. In addition, the Companyhas also participated in the corporation pension plan / supplementary pension insurance fund approved by therelevant departments of the state. The Company pays the fees to the pension plan / local social security institutionaccording to a certain proportion of the total employee wages and includes corresponding expenses in currentprofits and losses or related asset costs.
② Defined benefit plan
The Company attributes the welfare obligations generated from the defined benefit plan to the period when theemployees provide services by the formula recognized according to the expected cumulative welfare unit methodand includes in current profits and losses or related asset costs.The deficit or surplus formed from the present value of the defined benefit plan obligation subtracted by the fairvalue of the defined benefit plan assets is recognized as a net liability or net asset of the defined benefit plan. Incase of surplus in the defined benefit plan, the Company measures the net assets of the defined benefit planaccording to the lower of the surplus and asset upper limits of the defined benefit plan.All defined benefit plan obligations, including the obligations for payment within 12 months after the end of theexpected annual reporting period in which the employees provide services, are discounted according to thenational debts matching the defined benefit plan obligatory term and currency or the market return of thehigh-quality corporation bonds active in the market on the balance sheet date.The service costs generated from the defined benefit plan and the net interest of the net liabilities or net assets ofthe defined benefit plan are included in current profits and losses or related asset costs; the changes fromre-measurement of the net liabilities or net assets of the defined benefit plan are included in other comprehensiveincome and not written back to the profits and losses in subsequent accounting period. Upon the termination of theoriginal defined benefit plan, the part originally recorded into other comprehensive income within the scope ofrights and interests shall be carried forward to undistributed profit.In the settlement of the defined benefit plan, the settlement profits or losses are recognized according to thebalance between the present value of the defined benefit plan obligation and the settlement price recognized onthe settlement date.
(3) Termination benefits accounting method
When providing dismission welfare, the Company shall recognize the employee compensation liabilities arisingfrom the dismission welfare and record it in the current profit and loss whenever is earlier below: when theCompany fails to unilaterally withdraw the dismission welfare due to termination of labor relation plan ordownsizing suggestions; when the Company recognizes the costs or expenses related to restructuring involvingpayment of dimission welfare.
(4) Other long-term employee benefits accounting method
N/A
35. Lease liabilities
See Note V. 42. Lease.
36. Estimated liabilities
The estimated liabilities are recognized when the obligation related to contingencies meets the followingconditions simultaneously:
(1) The obligation is the current obligation undertaken by the Company;
(2) Performance of the obligation is likely to lead to the outflow of economic benefits;
(3) The amount of the obligation can be reliably measured.
The estimated liabilities are initially measured at the best estimate of the expenditure required to perform therelevant current obligations.In recognizing the best estimate, factors such as risk, uncertainty and time value of money related to contingenciesare taken into account. If the time value of money has a significant impact, the best estimate is determined by
discounting the relevant future cash outflows.If there is a continuous range of expenditure required and the probability of various outcomes within this range isthe same, the best estimate is recognized according to the middle value within this range; in other cases, the bestestimates are handled as follows:
● When a contingency involves a single item, the best estimate is recognized by the most possible amount.
● When a contingency involves more than one item, the best estimate is recognized according to a variety of
possible outcomes and related probabilities.When all or some of the expenses necessary for the liquidation of an estimated liabilities is expected to becompensated by a third party, the compensation shall be separately recognized as an asset only when it is virtuallycertain that the reimbursement will be obtained. Besides, the amount recognized for the reimbursement shall notexceed the book value of the estimated liabilities.
The Company reviews the book value of the estimated liabilities on the balance sheet date, and if there isconclusive evidence that the book value cannot reflect the current best estimate, it shall adjust the book valueaccording to the current best estimate.
37. Share-based payment
The Company's share-based payment refers to a transaction in which the company grants equity instruments orundertakes equity-instrument-based liabilities in return for services from employee or other parties. TheCompany's share-based payments shall consist of equity-settled share-based payments and cash-settledshare-based payments.
1) Equity-settled share-based payments and equity instruments
Where the equity-settled share-based payment is exchanged for the services provided by the employee, it shall bemeasured at the fair value of the equity instrument granted to the employee. For share-based payment transactionswith exercisable rights immediately after the grant, it shall be included in the relevant costs or expenses inaccordance with the fair value of the equity instrument on the grant date, and the capital reserves shall beincreased accordingly. For the share-based payment transaction where the service within the waiting period iscompleted after the grant or specified performance conditions are met, on every balance sheet date of the waitingperiod, the Company shall include the service obtained at the current period into relevant costs or expensesaccording to the fair value of the grant date on the basis of the best estimate of the number of equity instrumentswith exercisable rights, and increase the capital reserve accordingly.If the terms of the equity-settled share-based payment are modified, the services acquired are recognized at leastin terms of the unmodified terms. In addition, any modification that increases the fair value of the equityinstrument granted, or that is beneficial to the employee at the date of modification, recognizes an increase in theacquisition of services.During the waiting period, if the granted equity instrument is canceled, the company will treat the canceled equityinstrument as the accelerated exercise of power, and immediately include the balance that shall be recognized inthe remaining waiting period into the current profit and loss, and simultaneously confirm the capital reserve.However, if a new equity instrument is granted and the new equity instrument granted is deemed to be areplacement for the cancelled equity instrument on the grant date, the granted replacement equity instrument willbe handled in the same manner as any amendment to the terms and conditions of the original equity instrument.
2) Cash-settled share-based payments and equity instrument
The share-based payment settled by cash will be measured according to the fair value of the liability confirmedbasing on the shares borne by the company and other equity instruments. For share-based payment transactionswith exercisable rights immediately after the grant, the Company shall include it in the relevant costs or expensesin accordance with the fair value of the equity instrument on the grant date, and the liabilities shall be increased
accordingly. If the rights can only be exercised after the situation that service within the waiting period iscompleted and set performance is achieved, the service obtained in the current period, according to the fair valueof the liabilities borne by the Company, and basing on the best estimate for the condition of exercising rights, willbe recorded into relevant costs or expenses on each and every balance sheet date during the waiting period, andcorrespondingly recorded into the liabilities. Each and every balance sheet date and settlement before relevantliability settlement, the fair value of liability will be remeasured, of which changes occurred will be counted intothe current period.
38. Preferred shares, perpetual bonds and other financial instruments
At the time of initial recognition, the Company classifies the financial instrument or its components as a financialasset, financial liability or equity instrument based on the terms of the contract and the economic substancereflected in the issued preferred stock / perpetual bond, and not solely in legal form.In case that the financial instrument such as perpetual bond / preferred stock issued by the Company meet one ofthe following conditions, it, in whole or in part thereof, is classified as financial liabilities at the time of initialrecognition:
(1) There are contractual obligations which the Company cannot unconditionally avoid fulfilling by delivering
cash or other financial assets;
(2) It contains contractual obligations of delivering a variable number of its own equity instruments forsettlement;
(3) It contains derivative instrument (such as equity transfer, etc.) that is settled with its own equity, and such
derivative instrument does not exchange a fixed number of its own equity instruments for a fixed amount ofcash or other financial assets for settlement;
(4) There are contract clauses that indirectly form contractual obligations;
(5) When the issuer liquidates, the perpetual bonds are in the same order of liquidation as the ordinary bonds andother debts issued by the issuer.In case that the financial instrument such as perpetual bond / preferred stock issued by the Company does notmeet one of the above conditions, it, in whole or in part thereof, is classified as equity instrument at the time ofinitial recognition.
39. Income
Accounting policies for income recognition and measurementThe Company has fulfilled its contractual obligation to recognize income when the customer acquires control ofthe relevant goods or services. Obtaining control of the relevant goods or services is the ability to dominate theuse of the goods or services and gain almost all economic benefits from them.If the contract contains two or more performance obligations, the Company shall, on the commencement date ofthe contract, apportion the transaction price to each individual performance obligation according to the relativeproportion of the individual selling price of the goods or services committed by each individual performanceobligation. The Company's income shall be measured according to the transaction price apportioned to eachindividual performance obligation.The transaction price means the amount of consideration that the Company is expected to be entitled to collect forthe transfer of goods or services to the customer, excluding payments collected on behalf of third parties andamounts expected to be returned to the customer. The Company determines the transaction price in accordancewith the terms of the contract and in combination with its past practices, and in determining the transaction price,it takes into account the impact of variable consideration, material financing elements in the contract, non-cashconsideration, consideration payable to customers and other factors. The Company determines the transactionprice including the variable consideration by an amount not exceeding the amount of accumulated recognizedincome which is highly unlikely to be materially reversed when the relevant uncertainty is eliminated. If there is a
material financing component in the contract, the Company shall determine the transaction price based on theamount payable in cash when the customer acquires control of the goods or services, and shall amortize thedifference between the transaction price and the contract consideration by the effective interest method during thecontract period. If one of the following conditions is satisfied, it shall be deemed to have performed itsperformance obligation within a certain period of time; otherwise, it shall be deemed to have performed itsperformance obligation at a certain time point:
● The customer obtains and consumes the economic benefits arising from the Company’s performance at the
same time of the Company’s performance.
● The customer can control the goods under construction during the Company’s performance.
● The goods produced by the Company during the performance are of irreplaceable use, and the Companyshall be entitled to receive payment for the accumulated part of the performance completed so far during thewhole contract period.For the performance obligations performed within a certain period of time, the Company shall recognize theincome in accordance with the performance progress during that period, except where the performance progresscannot be reasonably determined. Taking into account the nature of the goods or services, the Company will usethe output method or input method to determine the performance schedule. If the performance schedule cannot bereasonably determined and the cost already incurred is expected to be compensated, the Company shall recognizethe income according to the cost already incurred until the performance schedule can be reasonably determined.For performance obligations performed at a certain time point, the Company recognizes income at the time pointwhen the customer acquires control of the relevant goods or services. In determining whether the customer hasacquired control of goods or services, the Company considers the following indications:
● The Company has the current collection right for the goods or services, that is, the customer has the current
payment obligation for the goods or services.
● The Company has transferred legal ownership to the goods to the customer, that is, the customer has legalownership of the goods.
● The Company has physically transferred the goods to the customer, that is, the customer has physicallypossessed the goods.
● The Company has transferred the main risk and remuneration in the ownership of the goods to the customer,that is, the customer has acquired the main risk and remuneration in the ownership of the goods.
● The customer has accepted the goods or services, etc.
Specific principles of recognition of income from selling goods:
(1) General foreign sales: recognize the income after commodity inspection, customs declaration and shipmentof goods (the company’s export income settlement mainly adopts FOB and CIF methods). For a very smallnumber of other settlement methods, such as for those adopting EXW terms, the buyer designates carrierdoor-to-door delivery as the time point of recognition of product sales revenue; for those adopting FCA terms,the delivery of products to the carrier designated by the buyer shall be the time point of recognition ofproduct sales revenue; for those adopting the DDP/DDU terms, the delivery of products to the destinationdesignated by the buyer shall be the time point of recognition of product sales revenue).
(2) General domestic sales: the recognition time of sales revenue is based on the customer’s confirmation ofreceipt (that is, the income is recognized after the customer signs for the receipt, but if the contract stipulatesthat acceptance is needed, the income will be recognized after acceptance by the customer).
(3) E-commerce business (B2C): the recognition time of sales revenue is based on the customer’s confirmationof the completion of the transaction (i.e., the income is recognized when the customer initiatively confirmsreceipt of the goods on the e-commerce platform and when the e-commerce platform automatically confirmsreceipt of the goods within a certain period of time after delivery, whichever is earlier).
(4) Store sales model: sales revenue is recognized according to settlement time and price (that is, the income is
recognized after the store salesperson receives payment and delivers the goods to the customer).
(5) Consignment mode: the Company delivers the goods to the place designated by the agent, and recognizes theincome after receiving the sales list and checking it according to the time of reconciliation agreed in thecontract.
Differences in income recognition accounting policies caused by different business modes for the same businessNA
40. Government subsidies
1) Type
Government subsidies refer to the monetary assets or non-monetary assets obtained free of charge by theCompany from the government, and are classified into asset related government subsidies and the income relatedgovernment subsidies.Government subsidies related to assets refer to the government subsidies obtained by the Company for thepurchase and construction of long-term assets or the formation of long-term assets by other means. Governmentsubsidies related to income refer to government subsidies in addition to government subsidies related to assets.
The Company's classifying government subsidies as related to assets is subject to the following specific criteria:
the government documents clearly stipulate the use of funds, and the expected use direction of the funds isexpected to form related assets;The Company's classifying government subsidies as related to income is subject to the following specific criteria:
the government documents do not stipulate the use purpose, and the expected use direction of the funds is tosupplement working capital;If the subsidy object is not clearly specified in the government documents, the judgment basis for the Company toclassify the government subsidy as related to assets or related to income is as follows: except that the Companydesignates its purpose as related to assets, it will be included in the current profit and loss.
2) Recognition time point
Government subsidies will be recognized when the conditions attached to them are met and received by theCompany.
3) Accounting treatment
The government subsidies related to assets write down the book value of the relevant assets or is recognized asdeferred income. If it is recognized as deferred income, it shall be recorded into the current profit and loss bystages in accordance with reasonable and systematic methods during the service life of the relevant assets (if it isrelated to the daily activities of the Company, it shall be recorded into other income; those not related to the dailyactivities of the Company shall be included in non-revenue);If the government subsidy related to the income is used to compensate the Company's related costs, expenses orlosses in the following period, it shall be recognized as deferred income and recorded into the current profit andloss during the period of recognition of the relevant costs, expenses or losses (if it is related to the Company'sdaily activities, it shall be recorded into other income; if it is not related to the daily activities of the Company, itshall be included in non-revenue) or write down relevant costs, expenses or losses; those used to compensate therelevant costs, expenses or losses incurred by the Company shall be directly recorded into the current profit and
loss (if it is related to the daily activities of the Company shall be recorded into other income; if it is not related tothe daily activities of the Company, it shall be included in non-revenue or write down relevant costs, expenses orlosses.The interest subsidy on policy-based preferential loans obtained by the Company shall be accounted for under thefollowing two conditions:
(1) If the finance department allocates the interest subsidy fund to the lending bank, and the lending bankprovides the loan to the Company at the policy-based preferential interest rate, the Company shall take theloan amount actually received as the entry value of the borrowing, and calculate the relevant borrowing costin accordance with the loan principal and the policy-based preferential interest rate.
(2) If the finance department allocates the interest subsidy fund directly to the Company, the Company willoffset the corresponding interest subsidy against the related borrowing costs.
41. Deferred income tax assets and deferred income tax liabilities
The income tax includes current income tax and deferred income tax. Except for the income tax arising from thebusiness combination and the transaction or item directly booked into the owners’ equity (including othercomprehensive income), the Company will record the current income tax and deferred income tax into the currentprofit and loss.Deferred income tax assets and deferred income tax liabilities shall be calculated and recognized on the basis ofthe difference (temporary difference) between the tax basis of the assets and liabilities and their book value.For the deferred income tax assets recognized through deductible temporary difference, it is limited to the amountof taxable income which is likely to be obtained to offset the deductible temporary difference in the future period.For the deductible loss and tax deduction that can be carried forward to the subsequent year, the correspondingdeferred income tax assets are recognized within the limit of the future taxable income amount that is possiblyobtained to deduct the deductible loss and tax deduction.For taxable temporary differences, except in special circumstances, the deferred income tax liability is recognized.Special circumstances in which deferred income tax assets or deferred income tax liabilities are not recognizedinclude:
● Initial recognition of goodwill;
● Transaction or item that is neither a business combination nor does it affect accounting profit and taxableincome (or deductible loss) at the time of occurrence.For the taxable temporary difference related to the investment of the subsidiaries, associated enterprises and jointventures, relevant deferred income tax liabilities are not recognized, unless the Company can control thetemporary difference write-back time and the temporary difference will probably not be written back in theforeseeable future. For the deductible temporary difference related to the investment of the subsidiaries, jointventures and cooperative enterprises, deferred income tax assets are recognized when it is likely to write back thetemporary difference in the foreseeable future or to obtain the income tax payable used to offset the deductibletemporary difference in the future.The deferred income tax assets and deferred income tax liabilities are measured on the balance sheet dateaccording to the tax law and the applicable tax rate in the period of expected recovery of relevant assets ofliquidation of relevant liabilities.On the balance sheet date, the Company reviews the book value of the deferred income tax assets. If it is likelynot to obtain sufficient income tax payable to deduct the interests of the deferred income tax assets in the future,the book value of the deferred income tax assets is written down. If it is likely to obtain sufficient income taxpayable, the amount written down is written back.When the Company has the legal right to settle with net amount and intends to settle with net amount or obtain theassets and liquidate the liabilities simultaneously, the income tax assets and income tax liabilities in the currentperiod are presented by the net amount after offset.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are listed in netamount after offset when both of the following conditions are met:
● The tax payer has the legal right to settle the current income tax assets and current income tax liabilities on anet basis;
● The deferred income tax assets and deferred income tax liabilities are related to the income tax levied by thesame tax collection and management department from the same subject of tax payment or from differentsubjects of tax payment but the subject of tax payment involved intends to settle the current income taxassets and liabilities with the net amount or obtain the assets and liquidate the liabilities simultaneously ineach future important period when the deferred income tax assets and liabilities are written back.
42. Leased
(1) Accounting treatment method of operating lease
Accounting policy effective on January 1, 2021.Lease refers to a contract in which the lessor transfers the right to use the asset to the lessee within a certain periodof time to for consideration. On the commencement date of the contract, the Company assesses whether thecontract is a lease or contains a lease. If a party to the contract transfers the right to control the use of one or moreidentified assets within a certain period in exchange for consideration, the contract is a lease or contains a lease.When a contract contains several separate leases, the Company will split the contract and conduct accountingtreatments for each of the separate leases. When a contract contains both lease and non-lease components, thelessee and the lessor split the lease and non-lease components.The Company can choose to adopt the simplified method for all leases and does not evaluate the lease change orre-evaluate the lease classification if rent remission, deferred payment and other rental concessions reached onexisting lease contracts directly caused by COVID-19 and the following conditions are met:
The lease consideration after the concession is reduced or basically unchanged compared with that before theconcession, where the lease consideration is not discounted or is discounted according to the discount rate beforethe concession;The concession applies only to lease payments payable before June 30, 2022. An increase in lease paymentspayable after June 30, 2022 does not affect the satisfaction of this condition, while a decrease in lease paymentspayable after June 30, 2022 does not satisfy this condition; other terms and conditions of the lease are determinedto be unchanged significantly after a comprehensive consideration of qualitative and quantitative factors.
1. The Company as the lessee
(1) Right-of-use assets
At the beginning of the lease term, in addition to short-term leases and low-value asset leases, the Companyrecognizes the right-of-use assets. The right-of-use asset is initially measured at cost, which includes:
The initial measurement amount of the lease liabilities;If there is a lease incentive for the lease payment paid on or before the start of the lease term, the amount of thegranted lease incentive shall be deducted;The initial direct expenses incurred by the Company;Costs expected to be incurred by the Company to disassemble and remove a leased asset, restore the site where theleased asset is located, or restore the leased asset to the condition agreed upon under the terms of the lease,excluding costs incurred to produce inventory.The Company shall use the straight-line method subsequently to depreciate the right-of-use assets. If it can be
reasonably determined that the ownership of the leased asset can be obtained at the end of the lease term, thedepreciation shall be accrued within the remaining service life of the leased asset. Otherwise, the depreciationshall be accrued within the shorter of the lease term and the remaining service life of the leased asset.The Company determines whether the right-of-use assets have been impaired in accordance with the principlesstated in Note "V. 31. Long-term assets impairment", and conducts accounting treatment for the recognizedimpairment losses.
(2) Lease liabilities
At the beginning of the lease term, in addition to short-term leases and low-value asset leases, the Companyrecognizes the lease liabilities. and initially measures the lease liabilities at the present value of the lease paymentsoutstanding. Lease payments include:
Fixed payment amount (including substantial fixed payment amount), deducting the amount related to leaseincentive if any;Variable lease payments that depend on an index or rate;The amount to be paid shall be estimated based on the residual value of the guarantee provided by the Company;Exercise price of the purchase option, provided that the Company is reasonably certain that it will exercise theoption;The amount payable for exercising the termination option, provided that the lease term reflects that the Companywill exercise the termination option.The lease liability is initially measured, discounted using the interest rate implicit in the lease or, if that rate cannotbe readily determined, the Company’s incremental borrowing rate is used.The Company calculates the interest expense of the lease liability during each period of the lease term accordingto a fixed periodic rate, and includes it in the current profit and loss or the cost of related assets.Variable lease payments that are not included in the measurement of the lease liabilities are included in currentprofit or loss or the cost of the related asset when they are actually incurred.In case of any of the following circumstances after the commencement date of the lease term, the Company shallre-measure the lease liabilities and adjust the corresponding right-of-use assets. If the book value of theright-of-use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the differenceshall be recorded into the current profits and losses:
If the evaluation results of the purchase option, renewal option or termination option change, or the actual exerciseof the aforementioned options is inconsistent with the original evaluation results, the Company shall re-measurethe lease liabilities according to the present value calculated from the changed lease payment amount and therevised discount rate;In case of a change in the substantial fixed payment amount, a change in the expected amount payable of theguarantee residual value or a change in the index or ratio used to determine the lease payment amount, theCompany shall re-measure the lease liabilities according to the present value calculated from the changed leasepayment amount and the original discount rate. However, if changes in lease payment amount are caused bychanges in floating interest rate, the present value is calculated using the revised discount rate.
(3) Short-term leases and low-value asset leases
The Company de-recognizes the right-of-use assets and lease liabilities for short-term leases and low-value assetleases and includes the relevant lease payments into current profits and losses or costs of related assets in eachperiod of the lease term according to the straight-line method. Short-term leases are leases for a period of not morethan 12 months and do not include a purchase option on the commencement date of the lease. A low-value assetlease is a lease with a lower value when the single leased asset is a new asset. Where the Company subleases orintends to sublease the leased asset, the original lease is not a low-value asset lease.
(4) Lease change
If a lease change meets the following conditions, the Company will treat the lease change as a separate lease foraccounting treatment:
The lease change expands the scope of the lease by adding the right to use one or more leased assets;The increased consideration is equivalent to the amount of the separate price for the extended portion of the leaseadjusted for the circumstances of the contract.If the lease change is not accounted for as a separate lease, on the effective date of the lease change, the Companyshall re-apportion the consideration of the contract after the change, re-determine the lease term, and re-measurethe lease liabilities according to the present value calculated from the changed lease payment and the reviseddiscount rate.If the lease change results in the narrowing of the lease scope or shortening of the lease term, the Company shallcorrespondingly reduce the book value of the right-of-use assets and record the profits or losses related to thepartial or complete termination of the lease into the current profits and losses. If other lease changes result in there-measurement of lease liabilities, the Company shall adjust the book value of the right-of-use assets accordingly.
(5) Rent concession related to COVID-19
If the simplified method is used for rent concession related to COVID-19, the Company does not evaluate thepresence of the lease change and shall continue to calculate the interest expense of the lease liabilities and includeit in the current profits and losses at the discount rate consistent with that before the concession, and continue todepreciate the right-of-use assets in the same manner as before the concession. In case of rent concession, theCompany will use the reduced rent as variable lease payment, and when the original rent payment obligation isrelieved by a concessional agreement, write down the cost or expense of relevant assets according to the discountamount at the undiscounted or pre-discounted rate, and adjust the lease liabilities accordingly; in case of deferredpayment of rent, the Company shall write down the lease liabilities recognized in the earlier period when theactual payment is made.For short-term leases and low-value asset leases, the Company continues to include the original contract rent inthe cost or expense of the related assets in the same manner as before the concession. In case of rent concession,the Company will use the reduced rent as variable lease payment to write down the cost or expense of relatedassets during the concession period; in case of deferred payment of rent, the Company shall recognize the rentpayable as payables during the original payment period to write down the payables recognized in the earlierperiod when the actual payment is made.
2. The Company as the lessor
The Company classifies leases as finance leases and operating leases at the lease commencement date. Financelease refers to the lease where almost all risks and rewards related to the leased asset ownership have beensubstantively transferred no matter whether the ownership is finally transferred. Operating leases refer to leasesother than financial leases. When the Company acts as a sublessee, it shall classify subleases based on theright-of-use assets generated from the original lease.
(1) Accounting treatment method of operating lease
The rental income of operating lease shall be recognized as rental income in accordance with the straight-linemethod during each period of the lease term. The initial direct expenses in connection with the lease transactionshall be capitalized and recorded into the current profits and losses according to the same basis as the rentrecognition the lease period. Variable lease payments that are not recorded in the rental income are included incurrent profit or loss when they are actually incurred. The Company shall treat a changed operating lease as a newlease for accounting treatment from the effective date of the change, and the amount of lease receipts received in
advance or receivable related to the lease before the change will be regarded as the receipts of the new lease.
(2) Accounting treatment method of finance lease
On the commencement date of the lease term, the Company recognizes finance lease receivables for financeleases and derecognizes the finance lease assets. When the finance lease receivable is initially measured, the netlease investment shall be used as the entry value of the finance lease receivable. The net lease investment is thesum of the unguaranteed residual value and the present value of the lease receipts that have not been received atthe commencement date of the lease, discounted at the interest rate implicit in the lease.The Company calculates and recognizes interest income for each period of the lease term based on the fixedperiodic rate. The de-recognition and impairment of the finance lease receivables shall be accounted for inaccordance with the Note "V. 10 Financial instruments".Variable lease payments that are not included in the measurement of the net lease investment are included incurrent profit or loss or the cost of the related asset when they are actually incurred.Any change meeting the following conditions shall be treated as a separate lease for accounting treatment:
The change expands the scope of the lease by adding the right to use one or more leased assets;The increased consideration is equivalent to the amount of the separate price for the extended portion of the leaseadjusted for the circumstances of the contract.If a finance lease change is not accounted for as a separate lease, the Company shall deal with the changed leaseunder the following circumstances:
If the change takes effect on the commencement date of the lease and lease will be classified as an operating lease,the Company shall treat it as a new lease for accounting treatment from the effective date of the lease change, andtake the net lease investment before the effective date of the lease change as the book value of the leased asset;If the change takes effective on the commencement date of the lease, the lease will be classified as a finance lease,and subject to the accounting treatment in accordance with the policy of modifying or renegotiating the contract inNote "V. 10 Financial instruments".
(3) Rent concession related to COVID-19
If the change takes effect on the commencement date of the lease and lease will be classified as an operating lease,the Company shall treat it as a new lease for accounting treatment from the effective date of the lease change, andtake the net lease investment before the effective date of the lease change as the book value of the leased asset;If the change takes effective on the commencement date of the lease, the lease will be classified as a finance lease,and subject to the accounting treatment in accordance with the policy of modifying or renegotiating the contract inNote "V. 10 Financial instruments".
3. Sale and leaseback transaction
The Company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale inaccordance with the principles described in this Note “V. 39 Revenue”.
(1) As a lessee
If the transfer of an asset in a sale-and-leaseback transaction is a sale, the Company, as the lessee, measures theright-of-use asset resulting from the sale-and-leaseback at the portion of the original asset's book value that relatesto the right to use acquired by the leaseback, and recognizes a gain or loss related to the right transferred to thelessor only; if the transfer of an asset in a sale-and-leaseback transaction is not a sale, the Company, as the lessee,continues to recognize the transferred asset and at the same time recognizes a financial liability equal to the
transfer income. See this Note “V. 10. Financial instruments” for the accounting treatment of financial liabilities.
(2) As a lessor
If the transfer of assets in a sale-and-leaseback transaction is a sale, the Company, as a lessor, accounts for thepurchase of the assets, and accounts for the lease of the assets in accordance with the aforementioned policy of “2.The Company as a lessor"; if the transfer of assets in a sale-and-leaseback transaction is not a sale, the Company,as a lessor, does not recognize the transferred assets, but recognizes a financial asset equal to the transfer income.See this Note “V. 10. Financial instruments” for the accounting treatment of financial assets.
Accounting policy before January 1, 2021Leases are classified into finance lease and operating lease. Finance lease refers to the lease where all risks andrewards related to asset ownership have been substantively transferred. Operating leases refer to leases other thanfinancial leases.The Company can choose to adopt the simplified method for all leases (Note: If not for all leases, the nature of thelease contracts treated by the simplified method should be disclosed, but the choice of the simplified methodshould be uniformly applied to similar lease contracts) and does not evaluate the lease change or re-evaluate thelease classification if rent remission, deferred payment and other rental concessions reached on existing leasecontracts directly caused by COVID-19 and the following conditions are met:
The lease consideration after the concession is reduced or basically unchanged compared with that before theconcession, where the lease consideration is not discounted or is discounted according to the discount rate beforethe concession;The concession applies only to lease payments payable before June 30, 2021. An increase in lease paymentspayable after June 30, 2021 does not affect the satisfaction of this condition, while a decrease in lease paymentspayable after June 30, 2021 does not satisfy this condition;Other terms and conditions of the lease are determined to be unchanged significantly after a comprehensiveconsideration of qualitative and quantitative factors.
1. Accounting treatment method of operating lease
(1) The lease payments made by the Company for leased assets shall be amortized on a straight-line basis
(reminder: if other reasonable methods are used, please specify) over the entire lease term without deductingthe rent-free period and included in the current expense. The initial direct expenses paid by the Company inconnection with the lease transaction are included in the current expenses.When the lessor of the asset bears the lease-related expenses that should be borne by the Company, the Companyshall deduct such expenses from the total rent, apportion the deducted rent expenses in the lease term and recordthem into the current expenses.For the operating lease adopting the simplified method for rent concession related to COVID-19, the Companycontinues to include the original contract rent in the cost or expense of the related assets in the same manner asbefore the concession. In case of rent concession, the Company will use the reduced rent as the contingent rentalto be included in the profits and losses during the concession period; in case of deferred payment of rent, theCompany shall recognize the rent payable as payables during the original payment period to write down thepayables recognized in the earlier period when the actual payment is made.
(2) The lease payments received by the Company for leasing assets shall be amortized on a straight-line basis(reminder: if other reasonable methods are used, please specify) over the entire lease term without deductingthe rent-free period and recognized as lease-related income. The initial direct expenses paid by the Companyin connection with the lease transaction shall be included in the current expenses; if the amount is large, itwill be capitalized and recorded into the current income by stages according to the same basis as thelease-related income recognition throughout the lease period.When the Company bears the lease-related expenses that should be borne by the lessee, the Company shall deduct
such expenses from the total rental income, apportion them according to the deducted rental expenses during thelease period.For the operating lease adopting the simplified method for rent concession related to COVID-19, the Companycontinues to recognize the original contract rent as the rental income in the same manner as before the concession;in case of rent concession, the Company will use the reduced rent as the contingent rental to write down the rentalincome during the concession period; in case of deferred collection of rent, the Company shall recognize the rentreceivable as receivables during the original collection period to write down the receivables recognized in theearlier period when actually received.
2. Accounting treatment method of finance lease
(1) Assets acquired under finance leases: upon commencement of the lease term, the Company takes the lower
of the fair value of the leased asset on the lease commencement date and the present value of the minimumlease payment as the entry value of the leased asset, and the minimum lease payment as the entry value of thelong-term payables, and their balance as the unrecognized finance fees. The Company adopts the effectiveinterest rate method to amortize the unrecognized financing costs within the period of the asset lease andrecord them into financial expenses. The initial direct expenses incurred by the Company shall be included inthe value of the leased assets.For the finance lease adopting the simplified method for rent concession related to COVID-19, the Companycontinues to recognize the unrecognized financing expenses as the current financing expenses at the samediscount rate as before the concession and continues to depreciate the assets acquired under finance leases in thesame manner as before the concession; in case of rent concession, the Company will use the reduced rent as thecontingent rental, include it in current profits and losses when the original rent payment obligation is relieved by aconcessional agreement, and adjust the long-term payables accordingly, or include into current profits and lossesand adjust unrecognized financing expenses at the discount rate before concession; in case of deferred payment ofrent, the Company shall write down the long-term payables recognized in the earlier period when the actualpayment is made.
(2) Assets rent out under finance leases: upon commencement of the lease, the Company recognizes the
difference between the s um of the receivable finance lease amount and the unguaranteed residual value andits present value as unrealized financing income, and recognizes it as rental income in each period in whichthe rent is received in the future. The initial direct expenses incurred by the Company in connection with theleasing transaction shall be included in the initial measurement of the finance lease receivable, and theamount of income recognized during the lease term shall be reduced.For the finance lease adopting the simplified method for rent concession related to COVID-19, the Companycontinues to recognize the unrealized financing income as the rental income at the same interest rate implicit inthe lease as before the concession. In case of rent concession, the Company will use the reduced rent as thecontingent rental to write down the originally recognized rental income when waiving the right to collect theoriginal rent by reaching a concession agreement, include the part that is not write-down into the income frominvestment, adjust the long-term receivables accordingly, or include into current profits and losses and adjustunrealized financing income at the discount rate before concession; in case of deferred collection of rent, theCompany shall write down the long-term receivables recognized in the earlier period when actually received.
(2) Accounting treatment method of finance lease
43. Other significant accounting policy and accounting estimate
1) Discontinued operation
Discontinued operation is a separate component that meets one of the following conditions and has been disposedof or classified into the held for sale category by the Company:
(1) The component represents an independent principal business or an independent principal area of operation;
(2) The component is part of an associated plan proposed to dispose of an independent principal business or anindependent principal area of operation;
(3) The component is a subsidiary acquired exclusively for resale.
2) Hedge accounting
(1) Classification of hedging
1) A fair value hedge refers to a hedge of the fair value change risk of an asset or liability that has beenrecognized and a certain commitment that has not been recognized (except foreign exchange risk).
2) A cash flow hedge refers to a hedge of the risk of changes in cash flow arising from a particular type of risk
relating to a recognized asset or liability, an anticipated transaction that is likely to occur, or the foreignexchange risk contained in an unrecognized firm commitment
3) A hedge of net investment in overseas operations refers to a hedge of foreign exchange risks of netinvestment of overseas operations. Net investment in overseas operations refers to the equity share of theenterprise in the net assets of overseas operations.
(2) Designation of hedging relationship and identification of hedging effectivenessAt the beginning of the hedging relationship, the Company has a formal designation of the hedging relationshipand has prepared formal written documents on the hedging relationship, risk management objectives and hedgingstrategies. The documents specify the nature and quantity of the hedging instrument, the nature and quantity of thehedged items, the nature of the hedged risk, type of hedging, and the Company's evaluation of the effectiveness ofthe hedging instrument. Hedging effectiveness refers to the degree to which the change in the fair value or cashflow of the hedging instrument can offset the change in the fair value or cash flow of the hedged item caused bythe hedged risk.The Company continuously evaluates the effectiveness of hedging and judges whether the hedging meets therequirements of hedging accounting for effectiveness during the accounting period in which the hedgingrelationship is designated. If it is not satisfied, the hedging relationship shall be terminated.The application of hedge accounting shall meet the following requirements for the effectiveness of hedging:
1) There is an economic relationship between the hedged item and the hedging instrument.
2) In the value changes caused by the economic relationship between the hedged item and the hedginginstrument, the influence of credit risk does not play a dominant role.
3) Adopting the appropriate hedge ratio will not cause the imbalance between the relative weight of the hedgeditem and the hedging instrument, thus generating accounting results inconsistent with the hedge accountingobjectives. If the hedge ratio is no longer appropriate, but the hedging risk management objectives have notchanged, the number of hedged items or hedging instruments shall be adjusted to make the hedge ratio meetthe requirements of effectiveness again.
(3) Hedge accounting treatment methods
1) Fair value hedging
Changes in the fair value of hedge derivative instruments are recorded in the current profit and loss. Changesformed by the fair value of the hedged item due to the hedging risk shall be included in the current profit and loss,and the book value of the hedged item shall be adjusted simultaneously.For fair value hedging related to financial instruments measured at amortized cost, the adjustments to the bookvalue of the hedged item are amortized during the remaining period between the adjustment to the due date andrecorded in the current profit and loss. Amortization under the effective interest rate method may commenceimmediately after the book value adjustment and shall not be later than the adjustment of fair value changes in thetermination of hedging risks by the hedged item.
If the hedged item is terminated, the unamortized fair value is recognized as the current profit and loss.Where the hedged item is a firm commitment that has not been recognized, the accumulative change in the fairvalue of the firm commitment caused by the hedging risk is recognized as an asset or liability, and the relevantgains or losses are recorded into the current profits and losses. Changes in the fair value of hedging instrumentsare also recorded in the current profit and loss.
2) Cash flow hedging
The part of the gain or loss of the hedging instrument that belongs to the effective hedging shall be directlyrecognized as other comprehensive income, while the part that belongs to the invalid hedging shall be recordedinto the current profit and loss.If the hedged transaction affects the current profit and loss, such as when the hedged financial income or financialexpense is recognized or when the expected sale occurs, the amount recognized in other comprehensive incomewill be transferred to the current profit and loss. If a hedged item is the cost of a non-financial asset ornon-financial liability, the amount originally recognized in other comprehensive income amount is transferred outand recorded into the amount of initial recognition of the non-financial asset or non-financial liability (or theamount originally recognized in other comprehensive income is transferred out during the same period as thenon-financial asset or non-financial liability affecting the profit and loss, and recorded into the current profit andloss).If the expected transaction or firm commitment is not expected to occur, the accumulated gains or losses of thehedging instrument previously recorded in other comprehensive income are transferred out and recorded in thecurrent profit and loss. If the hedging instrument has expired, been sold, the contract terminated or exercised (butnot replaced or renewed), or the designation of the hedging relationship is withdrawn, the amount previouslyrecorded in other comprehensive income is not transferred out until the anticipated transaction or firmcommitment affects the current profit or loss.
3) Hedging of net investment in overseas operations
The hedging of net investment in overseas operations, including the hedging of monetary items that are part of thenet investment, shall be treated similarly to the cash flow hedging. In the gain or loss of the hedging instrument,the part that is recognized as effective hedging is recorded in other comprehensive income, while the part that isinvalid hedging is recognized as current profit and loss. When disposing of overseas operations, any accumulatedgains or losses previously recorded in other comprehensive income will be transferred out and recorded intocurrent profit and loss.
3) Segmental reporting
The Company determines the operating segments based on the internal organizational structure, managementrequirements and internal reporting system, and determines the reporting segments based on the operatingsegments and discloses the information of the segments.Operating segments refer to the components of the Company that meet the following conditions at the same time:
(1) The component is able to generate revenue and incur expenses in its daily activities; (2) The management ofthe Company can regularly evaluate the operating results of the component to determine the allocation ofresources to it and evaluate its performance; (3) The Company can obtain relevant accounting information such asthe financial position, operating results and cash flow of the component. If two or more operating segments havesimilar economic characteristics and meet certain conditions, they may be merged into one operating segment.
4) Repurchase of shares in the Company
If the Company repurchases its shares due to the reduction of its registered capital, the amount actually paid shallbe debited to "treasury stock" and credited to "bank deposits". When canceled, the treasury stocks shall be debitedto the account of "capital stock” according to the total par value of stocks calculated from the par value of stocksand the number of canceled stocks, and credited to the account of “treasury stock” according to the book balanceof treasury stocks. According to the difference, the premium part originally recorded in capital reserve when thestock is issued is debited to the account of “Capital surplus - share premium” and the portion of the repurchaseprice in excess of the above write-down of "Capital stock" and "Capital surplus - share premium” is debited to
“Earned surplus” and “Profit distribution - Undistributed profit” successively. If the repurchase price is lower thanthe corresponding capital stock of the repurchased shares, the difference between the book balance of thecancelled treasury stocks and the capital stock written down is treated as the added capital stock premium, debitedto “Capital stock: according to the book value of capital stock corresponding to the repurchased shares, credited to“Treasury stock” according to the book balance of cancelled treasury stocks and credited to “Capital surplus -share premium” according to the difference.
44. Significant accounting policy and accounting estimate change
(1) Changes in significant accounting policies
√Applicable □ Not applicable
| Content and reasons of changes in accounting policies | Approval procedures | Remark |
Adjustment of operating lease existingprior to the first implementation date bythe Company as a lessee
| Adjustment of operating lease existing prior to the first implementation date by the Company as a lessee | Board of directors |
1. Implement the Accounting Standards for Business Enterprises No. 21 - Leases (revised in 2018)The Ministry of Finance revised the Accounting Standards for Business Enterprises No. 21 - Leases (hereinafterreferred to as “New Lease Standards”) in 2018. The Company has implemented the new lease standards sinceJanuary 1, 2021. Under the revised standards, the Company selects not to reassess whether a contract existingprior to the first implementation date is a lease or includes a lease on the first implementation date.
The Company as the lesseeThe Company shall adjust the retained earnings and other relevant items in the financial statements at thebeginning of the year according to the cumulative influence number of the new lease standards during the firstimplementation of the standards, and the information of comparable periods shall not be adjusted.For the operating lease that exists prior to the first implementation date, the Company shall, on the firstimplementation date, measure the lease liabilities according to the remaining lease payments at the present valuediscounted at the incremental borrowing rate of the Company on the first implementation date, and choose thefollowing methods to measure the right-of-use assets for each lease:
If the book value stipulated in the new lease standards is used from the commencement date of the lease, theincremental borrowing rate of the Company on the first implementation date shall be used as the discount rate.For the operating lease prior to the first implementation date, the Company shall choose to apply one or more ofthe following simplifications for each lease while applying above method:
1) Leases completed within 12 months after the first implementation date will be treated as short-term leases;
2) In measurement of lease liabilities, leases with similar characteristics adopts the same discount rate;
3) The measurement of the right-of-use assets does not include the initial direct expenses;
4) In case of renewal option or termination option, the lease term is determined based on the actual exercise of
the option prior to the first implementation date and other updates;
5) As an alternative to the impairment test of the right-of-use assets, the Company shall assess whether a
contract containing lease is a loss contract prior to the first implementation date in accordance with Note "V.
36. Estimated liabilities", and adjust the right-of-use assets according to the amount of loss provisionsrecorded in the balance sheet prior to the first implementation date;
6) Lease changes occurring before the first implementation date will not be retroactively adjusted, and will be
accounted according to the final arrangement of lease changes and the new lease standards.In measuring lease liabilities, the Company shall discount the lease payments using the lessee's incremental
borrowing rate as of January 1, 2021 (weighted average: 5%).
| Minimum lease payments outstanding for significant operating leases as disclosed in the consolidated financial statements as of December 21, 2020 | 654,340,469.27 |
Present value discounted at the Company's incremental borrowing rate as of January 1,2021
| Present value discounted at the Company's incremental borrowing rate as of January 1, 2021 | 564,334,375.76 |
Lease liabilities under the new lease standards as of January 1, 2021
| Lease liabilities under the new lease standards as of January 1, 2021 | 564,334,375.76 |
Difference between the above discounted present value and the lease liabilities
| Difference between the above discounted present value and the lease liabilities | 0.00 |
For the existing finance lease prior to the first implementation date, the Company shall measure the right-of-useassets and lease liabilities respectively according to the original book value of the assets acquired under financeleases and the payable finance lease amount on the first implementation date.
The main influences of the Company's implementation of the new lease standards on the financial statements areas follows:
| Content and reasons of changes in accounting policies | Approval procedures | Affected report item | Affected amount in balance on January 1, 2021 |
| Consolidation |
Adjustment ofoperating lease existingprior to the firstimplementation date bythe Company as alessee
| Adjustment of operating lease existing prior to the first implementation date by the Company as a lessee | Board of directors | Right-of-use assets | 504,205,737.73 |
| Lease liabilities | 363,828,691.92 | ||
| Non-current liabilities due within one year | 200,505,683.84 | ||
| Undistributed profit | (60,128,638.03) |
(2) Significant accounting estimate change
□ Applicable √ Not applicable
(3) The adjustment of the financial statements at the beginning of the year for the first implementation ofthe new lease standards from 2021
√Applicable □ Not applicable
Whether to adjust the balance sheet accounts at the beginning of the year
√ Yes □ No
Consolidated Balance Sheet
Unit: yuan
| Item | December 31, 2020 | January 01, 2021 | Adjusted figure |
Current assets:
| Current assets: |
Cash and cashequivalents
| Cash and cash equivalents | 4,162,539,245.78 | 4,162,539,245.78 |
Deposit reservation forbalance
| Deposit reservation for balance |
Lending funds
| Lending funds |
Tradable financial assets
| Tradable financial assets | 4,131,178,589.44 | 4,131,178,589.44 |
Derivative financialassets
| Derivative financial assets |
Notes receivable
| Notes receivable |
Accounts receivable
| Accounts receivable | 844,317,708.12 | 844,317,708.12 |
Accounts receivablefinancing
| Accounts receivable financing | 18,182,662.70 | 18,182,662.70 |
Advances to suppliers
| Advances to suppliers | 124,031,239.05 | 124,031,239.05 |
| Insurance premiums receivables |
Reinsurance premiumreceivable
| Reinsurance premium receivable |
Receivable reserve forreinsurance contract
| Receivable reserve for reinsurance contract |
Other receivables
| Other receivables | 458,174,652.72 | 458,174,652.72 |
Including: Interestreceivable
| Including: Interest receivable |
Dividendsreceivable
| Dividends receivable |
Monetary assetspurchased under resaleagreements
| Monetary assets purchased under resale agreements |
Inventory
| Inventory | 1,216,486,940.21 | 1,216,486,940.21 |
Contract assets
| Contract assets |
Assets held for sales
| Assets held for sales |
Non-current assets duewithin a year
| Non-current assets due within a year |
Other current assets
| Other current assets | 35,184,227.09 | 35,184,227.09 |
Total current assets
| Total current assets | 10,990,095,265.11 | 10,990,095,265.11 |
Non-current assets:
| Non-current assets: |
Loans and advances
| Loans and advances |
Debt investment
| Debt investment |
Other debt investments
| Other debt investments |
Long-term receivables
| Long-term receivables |
Long-term equityinvestment
| Long-term equity investment | 13,424,230.41 | 13,424,230.41 |
Other equity instrumentinvestments
| Other equity instrument investments |
Other non-currentfinancial assets
| Other non-current financial assets |
Investment in real estates
| Investment in real estates |
Fixed assets
| Fixed assets | 1,400,749,050.00 | 1,400,749,050.00 |
Construction in progress
| Construction in progress | 61,383,340.97 | 61,383,340.97 |
Productive biologicalassets
| Productive biological assets |
Oil and gas assets
| Oil and gas assets |
Right-of-use assets
| Right-of-use assets | 504,205,737.73 | 504,205,737.73 |
Intangible assets
| Intangible assets | 208,325,103.79 | 208,325,103.79 |
Developmentexpenditure
| Development expenditure |
Goodwill
| Goodwill |
Long-term deferredexpenses
| Long-term deferred expenses | 121,335,007.33 | 121,335,007.33 |
Deferred income taxassets
| Deferred income tax assets | 143,132,351.08 | 143,132,351.08 |
Other non-current assets
| Other non-current assets | 63,807,415.75 | 63,807,415.75 |
Total non-current assets
| Total non-current assets | 2,012,156,499.33 | 2,516,362,237.06 | 504,205,737.73 |
Total assets
| Total assets | 13,002,251,764.44 | 13,506,457,502.17 | 504,205,737.73 |
Current liabilities
| Current liabilities |
Short-term loans
| Short-term loans | 150,071,416.66 | 150,071,416.66 |
Borrowings from theCentral Bank
| Borrowings from the Central Bank |
| Borrowing funds |
Tradable monetaryliabilities
| Tradable monetary liabilities |
Derivative financialliabilities
| Derivative financial liabilities |
Notes payable
| Notes payable | 29,418,100.00 | 29,418,100.00 |
Accounts payable
| Accounts payable | 726,577,306.94 | 726,577,306.94 |
Advance from customers
| Advance from customers |
Contract liabilities
| Contract liabilities | 530,188,257.63 | 530,188,257.63 |
Monetary assets sold forrepurchase
| Monetary assets sold for repurchase |
Deposits from customersand interbank
| Deposits from customers and interbank |
Acting trading securities
| Acting trading securities |
Acting underwritingsecurities
| Acting underwriting securities |
Payroll payable
| Payroll payable | 169,957,077.81 | 169,957,077.81 |
Taxes payable
| Taxes payable | 444,381,369.49 | 444,381,369.49 |
Other payables
| Other payables | 352,543,008.89 | 352,543,008.89 |
Including: Interestpayable
| Including: Interest payable |
Dividends payable
| Dividends payable |
Fees and commissionspayable
| Fees and commissions payable |
Dividend payable forreinsurance
| Dividend payable for reinsurance |
Liabilities held forsales
| Liabilities held for sales |
Non-current liabilitiesdue within one year
| Non-current liabilities due within one year | 200,505,683.84 | 200,505,683.84 |
Other current liabilities
| Other current liabilities | 23,638,266.47 | 23,638,266.47 |
Total current liabilities
| Total current liabilities | 2,426,774,803.89 | 2,426,774,803.89 | 200,505,683.84 |
Non-current liabilities
| Non-current liabilities |
Reserve fund forinsurance contracts
| Reserve fund for insurance contracts |
Long-term loans
| Long-term loans |
Bonds payable
| Bonds payable |
Including: Preferredstock
| Including: Preferred stock |
Perpetual bond
| Perpetual bond |
Lease liabilities
| Lease liabilities | 363,828,691.92 | 363,828,691.92 |
Long-term payable
| Long-term payable |
Long-term payrollpayable
| Long-term payroll payable |
Estimated liabilities
| Estimated liabilities |
Deferred income
| Deferred income | 94,921,260.87 | 94,921,260.87 |
Deferred income taxliabilities
| Deferred income tax liabilities | 12,165,608.24 | 12,165,608.24 |
Other non-currentliabilities
| Other non-current liabilities |
Total non-current liabilities
| Total non-current liabilities | 107,086,869.11 | 671,421,244.87 | 363,828,691.92 |
Total liabilities
| Total liabilities | 2,533,861,673.00 | 3,098,196,048.76 | 564,334,375.76 |
Owner's equity:
| Owner's equity: |
Capital stock
| Capital stock | 426,492,308.00 | 426,492,308.00 |
| Other equity instruments |
Including: Preferredstock
| Including: Preferred stock |
Perpetual bond
| Perpetual bond |
Additional paid-in capital
| Additional paid-in capital | 4,481,709,983.24 | 4,481,709,983.24 |
Less: treasury stock
| Less: treasury stock |
Other comprehensiveincome
| Other comprehensive income | (1,111,035.08) | (1,111,035.08) |
Special reserve
| Special reserve |
Surplus reserve
| Surplus reserve | 420,212,778.13 | 420,212,778.13 |
General risk reserve
| General risk reserve |
Undistributed profit
| Undistributed profit | 5,126,630,011.14 | 5,066,501,373.11 | (60,128,638.03) |
Total shareholders’ equityattributable to the owners ofparent company
| Total shareholders’ equity attributable to the owners of parent company | 10,453,934,045.43 | 10,393,805,407.40 | (60,128,638.03) |
Noncontrolling interest
| Noncontrolling interest | 14,456,046.01 | 14,456,046.01 |
Total shareholders’ equity
| Total shareholders’ equity | 10,468,390,091.44 | 10,408,261,453.41 | (60,128,638.03) |
Total liabilities and equity
| Total liabilities and equity | 13,002,251,764.44 | 13,506,457,502.17 | 504,205,737.73 |
Adjustment descriptionBalance sheet of parent company
Unit: yuan
| Item | December 31, 2020 | January 01, 2021 | Adjusted figure |
Current assets:
| Current assets: |
Cash and cashequivalents
| Cash and cash equivalents | 3,669,286,043.43 | 3,669,286,043.43 |
Tradable financial assets
| Tradable financial assets | 3,779,510,798.34 | 3,779,510,798.34 |
Derivative financialassets
| Derivative financial assets |
Notes receivable
| Notes receivable |
Accounts receivable
| Accounts receivable | 679,644,839.39 | 679,644,839.39 |
Accounts receivablefinancing
| Accounts receivable financing | 26,281,743.01 | 26,281,743.01 |
Advances to suppliers
| Advances to suppliers | 1,141,185,179.88 | 1,141,185,179.88 |
Other receivables
| Other receivables | 361,160,139.37 | 361,160,139.37 |
Including: Interestreceivable
| Including: Interest receivable |
Dividendsreceivable
| Dividends receivable |
Inventory
| Inventory | 244,264,320.15 | 244,264,320.15 |
Contract assets
| Contract assets |
Assets held for sales
| Assets held for sales |
Non-current assets duewithin a year
| Non-current assets due within a year |
Other current assets
| Other current assets | 2,986,600.60 | 2,986,600.60 |
Total current assets
| Total current assets | 9,904,319,664.17 | 9,904,319,664.17 |
Non-current assets:
| Non-current assets: |
Debt investment
| Debt investment |
Other debt investments
| Other debt investments |
Long-term receivables
| Long-term receivables |
Long-term equityinvestment
| Long-term equity investment | 738,074,914.56 | 738,074,914.56 |
Other equity instrument
| Other equity instrument |
investmentsOther non-currentfinancial assets
| Other non-current financial assets |
Investment in real estates
| Investment in real estates |
Fixed assets
| Fixed assets | 47,677,210.41 | 47,677,210.41 |
Construction in progress
| Construction in progress | 625,889.08 | 625,889.08 |
Productive biologicalassets
| Productive biological assets |
Oil and gas assets
| Oil and gas assets |
Right-of-use assets
| Right-of-use assets |
Intangible assets
| Intangible assets | 11,093,821.43 | 11,093,821.43 |
Developmentexpenditure
| Development expenditure |
Goodwill
| Goodwill |
Long-term deferredexpenses
| Long-term deferred expenses | 4,270,865.79 | 4,270,865.79 |
Deferred income taxassets
| Deferred income tax assets | 18,761,956.53 | 18,761,956.53 |
Other non-current assets
| Other non-current assets | 7,420,450.61 | 7,420,450.61 |
Total non-current assets
| Total non-current assets | 827,925,108.41 | 827,925,108.41 |
Total assets
| Total assets | 10,732,244,772.58 | 10,732,244,772.58 |
Current liabilities
| Current liabilities |
Short-term loans
| Short-term loans | 120,071,416.66 | 120,071,416.66 |
Tradable monetaryliabilities
| Tradable monetary liabilities |
Derivative financialliabilities
| Derivative financial liabilities |
Notes payable
| Notes payable | 8,757,000.00 | 8,757,000.00 |
Accounts payable
| Accounts payable | 734,959,933.53 | 734,959,933.53 |
Advance from customers
| Advance from customers |
Contract liabilities
| Contract liabilities | 483,370,540.77 | 483,370,540.77 |
Payroll payable
| Payroll payable | 57,086,457.61 | 57,086,457.61 |
Taxes payable
| Taxes payable | 332,551,933.15 | 332,551,933.15 |
Other payables
| Other payables | 261,840,719.70 | 261,840,719.70 |
Including: Interestpayable
| Including: Interest payable |
Dividends payable
| Dividends payable |
Liabilities held forsales
| Liabilities held for sales |
Non-current liabilitiesdue within one year
| Non-current liabilities due within one year |
Other current liabilities
| Other current liabilities | 14,855,171.12 | 14,855,171.12 |
Total current liabilities
| Total current liabilities | 2,013,493,172.54 | 2,013,493,172.54 |
Non-current liabilities
| Non-current liabilities |
Long-term loans
| Long-term loans |
Bonds payable
| Bonds payable |
Including: Preferredstock
| Including: Preferred stock |
Perpetual bond
| Perpetual bond |
Lease liabilities
| Lease liabilities |
Long-term payable
| Long-term payable |
Long-term payrollpayable
| Long-term payroll payable |
| Estimated liabilities |
Deferred income
| Deferred income | 22,798,583.10 | 22,798,583.10 |
Deferred income taxliabilities
| Deferred income tax liabilities | 1,426,619.75 | 1,426,619.75 |
Other non-currentliabilities
| Other non-current liabilities |
Total non-current liabilities
| Total non-current liabilities | 24,225,202.85 | 24,225,202.85 |
Total liabilities
| Total liabilities | 2,037,718,375.39 | 2,037,718,375.39 |
Owner's equity:
| Owner's equity: |
Capital stock
| Capital stock | 426,492,308.00 | 426,492,308.00 |
Other equity instruments
| Other equity instruments |
Including: Preferredstock
| Including: Preferred stock |
Perpetual bond
| Perpetual bond |
Additional paid-in capital
| Additional paid-in capital | 4,507,116,745.59 | 4,507,116,745.59 |
Less: treasury stock
| Less: treasury stock |
Other comprehensiveincome
| Other comprehensive income |
Special reserve
| Special reserve |
Surplus reserve
| Surplus reserve | 411,397,111.21 | 411,397,111.21 |
Undistributed profit
| Undistributed profit | 3,349,520,232.39 | 3,349,520,232.39 |
Total shareholders’ equity
| Total shareholders’ equity | 8,694,526,397.19 | 8,694,526,397.19 |
Total liabilities and equity
| Total liabilities and equity | 10,732,244,772.58 | 10,732,244,772.58 |
Adjustment description
(4) Description of retrospective adjustment of the previous comparative data for the first implementationof the new lease standard from 2021
□ Applicable √ Not applicable
45. Others
NAVI. Tax
1. Main tax categories and tax rates
| Tax category | Taxation basis | Tax rate |
Added value tax
| Added value tax | Calculate the substituted money on VAT on the basis of the income from selling goods and taxable services according to the tax law. After deduction of the withholdings on VAT allowed to deduct in current period, the balance is the VAT payable | 13%, 9%, 6%, 3% |
Consumption tax
| Consumption tax | N/A | N/A |
Urban maintenance and construction tax
| Urban maintenance and construction tax | Actual paid value added tax (including the exemption part) and consumption tax | 7%, 5% |
Corporate income tax
| Corporate income tax | Levied by income tax payable | 25%, 20%, 16.5%, 15% |
Education surcharge
| Education surcharge | Actual paid value added tax (including the exemption part) and consumption tax | 3% |
If there are taxpayers with different enterprise income tax rates, the disclosure statement shall present
| Name of taxpayer | Income tax rate |
Winner Medical, Winner Medical (Huanggang), Winner Medical(Tianmen), Winner Medical (Jingmen), Winner Medical(Chongyang), Winner Medical (Jiayu), Qianhai Purcotton
| Winner Medical, Winner Medical (Huanggang), Winner Medical (Tianmen), Winner Medical (Jingmen), Winner Medical (Chongyang), Winner Medical (Jiayu), Qianhai Purcotton | 15.00% |
| Winner Medical (Hong Kong) | 16.50% |
Pure HB (Shanghai)
| Pure HB (Shanghai) | 20.00% |
2. Tax preference
(1) On December 23, 2021, according to the Notice on Publicizing the List of First Batch of High-tech
Enterprises to be Identified in Shenzhen in 2018 issued by the Leading Group Office of National High-techEnterprise Accreditation Administration, the Company passed the High-tech Enterprise QualificationReexamination (Certificate No. GR202144202494). From 2021 to 2023, its corporate income tax can still bepaid at the preferential rate of 15.00%.
(2) According to the Notice on Publicizing the List of the Second Batch of High-tech Enterprises to be Identifiedin Hubei Province in 2019, Huanggang Winner was identified as the second batch of high-tech enterpriseswith the certificate number GR201942002414. During the period from 2019 to 2021, Huanggang Winner canpay corporate income tax at the preferential tax rate of 15.00%.
(3) Qianhai Purcotton was established on July 21, 2015, with its domicile located in Shenzhen QianhaiShenzhen-Hong Kong Cooperation Zone. According to the Notice of Enterprise Income Tax PreferentialPolicies and Preferential Directory in Shenzhen Qianhai Shenzhen-Hong Kong Modern Service IndustryCooperation Zone of Hengqin New Fujian Pingtan Comprehensive Experimental Area (C.S. [2014] No. 26)issued by the Ministry of Finance and State Taxation Administration, Qianhai Purcotton pays its enterpriseincome tax at the tax rate of 15.00%.
(4) According to the Notice on Publicizing the List of Fourth Batch of High-tech Enterprises to be Identified inHubei Province in 2021 issued by the Leading Group Office of National High-tech Enterprise AccreditationAdministration on December 23, 2021, Jingmen Winner obtained the High-tech Enterprise Certificate(Certificate No. GR202142004475) on December 3, 2021. From 2021 to 2023, its corporate income tax canstill be paid at the preferential rate of 15.00%.
(5) According to the Notice on Publicizing the List of Fifth Batch of High-tech Enterprises to be Identified inHubei Province in 2021 issued by the Leading Group Office of National High-tech Enterprise AccreditationAdministration on December 23, 2021, Jiayu Winner obtained the High-tech Enterprise Certificate(Certificate No. GR202142005582) on December 17, 2021. From 2021 to 2023, its corporate income tax canstill be paid at the preferential rate of 15.00%.
(6) According to the Notice on Publicizing the List of Second Batch of High-tech Enterprises to be Identified inHubei Province in 2021 on December 15, 2021, Chongyang Winner and Tianmen Winner obtained theHigh-tech Enterprise Certificates (Certificate No. GR202142000579, GR202142002367) on November 15,2021. From 2021 to 2023, its corporate income tax can still be paid at the preferential rate of 15.00%.
(7) Pure HB (Shanghai) was established on March 16, 2018 and registered in Pudong New Area, Shanghai City.
According to the Notice on Implementing the Preferential Tax Reduction Policy for Small and Micro-sizedEnterprises (C.S. [2019] No. 13) issued by the Ministry of Finance and State Taxation Administration, thetaxable income of Pure HB (Shanghai) in 2021 shall not exceed 1 million yuan, which shall be reduced by 25%and included into the taxable income, and the corporate income tax shall be paid at the tax rate of 20%.
3. Others
NA
VII. Notes to items in consolidated financial statements
1. Cash and cash equivalents
Unit: yuan
| Item | Closing Balance | Beginning balance |
Cash on hand
| Cash on hand | 65,897.39 | 49,287.18 |
Bank deposit
| Bank deposit | 4,088,546,364.65 | 4,149,685,407.20 |
Other cash and cash equivalents
| Other cash and cash equivalents | 185,326,064.78 | 12,804,551.40 |
Total
| Total | 4,273,938,326.82 | 4,162,539,245.78 |
| Where: total amount deposited abroad | 11,841,008.78 | 95,608,086.45 |
Total amount of funds withrestrictions on use due to mortgage,pledge or freeze
| Total amount of funds with restrictions on use due to mortgage, pledge or freeze | 185,326,064.78 | 12,804,551.40 |
Other description
The breakdown of monetary funds with restrictions on use due to mortgages, pledges or freezes, restrictions oncentralized management and withdrawal of funds as well as those placed outside China with restrictions onrepatriation of funds, is as follows:
| Item | Closing Balance | Balance at the end of previous year |
Letter of Credit deposit*1
| Letter of Credit deposit*1 | 27,597,366.13 | 6,958,192.79 |
Performance bond*2
| Performance bond*2 | 2,162,025.10 | 2,369,198.81 |
Other restricted monetary fund balances*3
| Other restricted monetary fund balances*3 | 155,566,673.55 | 3,477,159.80 |
Total
| Total | 185,326,064.78 | 12,804,551.40 |
*1 Letter of Credit deposit is the deposit made by Winner Medical (Tianmen) for international and domesticLetters of Credit.*2 Performance bond is the deposit made by Winner Medical (Hong Kong) for transactions with customers.*3 The balance of other restricted monetary funds refers to the cash in transit of financial products purchased inthe banking accounts of Winner Medical and the balance of special deposit accounts for restricted non-budgetunits opened by Shenzhen Purecotton in accordance with the regulations of prepaid card issuance formulated bythe Ministry of Commerce.
2. Tradable financial assets
Unit: yuan
| Item | Closing Balance | Beginning balance |
Financial assets measured with fair valueand with the changes included in currentprofit and loss
| Financial assets measured with fair value and with the changes included in current profit and loss | 3,130,529,709.10 | 4,131,178,589.44 |
Including:
| Including: |
Including: Bank financial products
| Including: Bank financial products | 1,778,361,521.42 | 3,930,375,900.71 |
Forward foreign exchange contract
| Forward foreign exchange contract | 6,334,756.86 | 802,688.73 |
Trust products
| Trust products | 1,345,833,430.82 | 200,000,000.00 |
Including:
| Including: |
Total
| Total | 3,130,529,709.10 | 4,131,178,589.44 |
Other description:
3. Derivative financial assets
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other description:
4. Notes receivable
(1) Classified presentation of notes receivable
Unit: yuan
| Item | Closing Balance | Beginning balance |
Unit: yuan
| Class | Closing Balance | Beginning balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proporti | Amount | Accruin | Amount | Proportio | Amount | Accruing | |||
| on | g proportion | n | proportion |
Including:
| Including: |
Including:
| Including: |
Provision for bad debt by single item:
Unit: yuan
| Name | Closing Balance | |||
| Book balance | Provision for bad debt | Accruing proportion | Reasons for provision | |
Provision for bad debt by combination:
Unit: yuan
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Accruing proportion | |
Description of the basis for determining the combination:
If the bad debt provision of notes receivable is withdrawn according to the general model of expected credit loss, please refer to thedisclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ Not applicable
(2) Provision, recovery or reversal of bad debt reserves in the current periodProvision for bad debts in current period:
Unit: yuan
| Class | Beginning balance | Amount of change in current period | Closing Balance | |||
| Accrual | Recovered or reversed | Write-off | Others | |||
Where the amount of bad debt provision recovered or reversed is important:
□ Applicable √ Not applicable
(3) Notes receivable pledged by the Company at the end of the period
Unit: yuan
| Item | Pledged amount at the end of the period |
(4) Notes receivable endorsed or discounted by the Company at the end of the period and not expired yeton the balance sheet date
Unit: yuan
| Item | Amount with recognition terminated at the end of the period | Amount with recognition not terminated at the end of the period |
(5) Notes transferred to accounts receivable by the Company at the end of the period due to failure of thedrawer to perform
Unit: yuan
| Item | Amount transferred to accounts receivable at the end of the period |
Other description
(6) Notes receivable actually written off at the current period
Unit: yuan
| Item | Amount written off |
Write-off of important notes receivable:
Unit: yuan
| Unit name | Nature of notes receivable | Amount written off | Reasons for write-off | Write-off procedures performed | Whether the payments arise from connected transactions |
Description of write-off notes receivable:
5. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: yuan
| Class | Closing Balance | Beginning balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proportion | Amount | Accruing proportion | Amount | Proportion | Amount | Accruing proportion | |||
Including:
| Including: |
Accounts receivableof provision for baddebt by combination
| Accounts receivable of provision for bad debt by combination | 816,650,641.20 | 100.00% | 41,104,051.78 | 5.03% | 775,546,589.42 | 888,816,011.14 | 100.00% | 44,498,303.02 | 5.01% | 844,317,708.12 |
Including:
| Including: |
Total
| Total | 816,650,641.20 | 100.00% | 41,104,051.78 | 5.03% | 775,546,589.42 | 888,816,011.14 | 100.00% | 44,498,303.02 | 5.01% | 844,317,708.12 |
Provision for bad debt by single item:
Unit: yuan
| Name | Closing Balance | |||
| Book balance | Provision for bad debt | Accruing proportion | Reasons for provision | |
Provision for bad debt by combination: aging analysis method
Unit: yuan
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Accruing proportion | |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 812,541,858.45 | 40,627,093.27 | 5.00% |
1~2 years (including 2 years)
| 1~2 years (including 2 years) | 4,023,973.09 | 402,397.18 | 10.00% |
2~3 years (including 3 years)
| 2~3 years (including 3 years) | 14,640.46 | 4,392.13 | 30.00% |
More than 5 years
| More than 5 years | 70,169.20 | 70,169.20 | 100.00% |
Total
| Total | 816,650,641.20 | 41,104,051.78 | -- |
Description of the basis for determining the combination:
Recognition criteria and description of bad debts by combination: On December 31, 2021, the Company reviewedthe appropriateness of the provision for bad debts of receivables in the previous year according to the historicalbad debt loss, and believed that the default probability has a strong correlation with the aging of accounts, and theaccount age is still a sign of whether the credit risk of the company's receivables has significantly increased.Therefore, the Company's credit risk loss on December 31, 2021 is estimated based on the aging of accounts andestimated at the original loss ratio.Provision for bad debt by combination:
Unit: yuan
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Accruing proportion | |
Description of the basis for determining the combination:
If the bad debt provision of accounts receivable is withdrawn according to the general model of expected credit loss, please refer tothe disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ Not applicable
Disclosure by aging
Unit: yuan
| Aging | Book balance |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 812,541,858.45 |
1~2 years
| 1~2 years | 4,023,973.09 |
2~3 years
| 2~3 years | 14,640.46 |
More than 3 years
| More than 3 years | 70,169.20 |
| More than 5 years | 70,169.20 |
Total
| Total | 816,650,641.20 |
(2) Provision, recovery or reversal of bad debt reserves in the current periodProvision for bad debts in current period:
Unit: yuan
| Class | Beginning balance | Amount of change in current period | Closing Balance | |||
| Accrual | Recovered or reversed | Write-off | Others | |||
Provision for baddebt of accountsreceivable
| Provision for bad debt of accounts receivable | 44,498,303.02 | 14,560,526.46 | 17,954,777.70 | 41,104,051.78 |
Total
| Total | 44,498,303.02 | 14,560,526.46 | 17,954,777.70 | 41,104,051.78 |
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
| Unit name | Amount recovered or reversed | Recovery way |
(3) Accounts receivable actually written off at the current period
Unit: yuan
| Item | Amount written off |
Write-off of important accounts receivable:
Unit: yuan
| Unit name | Nature of accounts receivable | Amount written off | Reasons for write-off | Write-off procedures performed | Whether the payments arise from connected transactions |
Description of write-off accounts receivable:
NA
(4) Accounts receivable with top 5 ending balances by debtor
Unit: yuan
| Unit name | Ending balance of accounts receivable | Proportion in total other ending balance of accounts receivable | Ending balance of bad debt provision |
First
| First | 53,239,700.00 | 6.52% | 2,661,985.00 |
Second
| Second | 37,163,406.73 | 4.55% | 1,858,170.34 |
Third
| Third | 35,962,673.92 | 4.40% | 1,798,133.70 |
Fourth
| Fourth | 22,486,530.30 | 2.75% | 1,124,326.52 |
Fifth
| Fifth | 21,173,173.90 | 2.59% | 1,058,658.70 |
Total
| Total | 170,025,484.85 | 20.81% |
(4) Accounts receivable derecognized due to transfer of financial assets
NA
(5) Amount of assets and liabilities formed by transferring accounts receivables and continuing
involvementNAOther description:
NA
6. Accounts receivable financing
Unit: yuan
| Item | Closing Balance | Beginning balance |
Notes receivable - banker's acceptance bill
| Notes receivable - banker's acceptance bill | 9,940,272.21 | 18,182,662.70 |
Total
| Total | 9,940,272.21 | 18,182,662.70 |
Changes in the increase and decrease of receivables financing and changes in the fair value in the current period
□ Applicable √ Not applicable
If the impairment provision of receivables financing is withdrawn according to the general model of expected credit loss, please referto the disclosure method of other receivables to disclose the relevant information of impairment provision:
□ Applicable √ Not applicable
Other description:
Notes receivable endorsed or discounted by the Company at the end of the period and not expired yet onthe balance sheet date
| Item | 2021.12.31 | 2020.12.31 | ||
| Amount with recognition terminated at the end of the period | Amount with recognition not terminated at the end of the period | Amount with recognition terminated at the end of the period | Amount with recognition not terminated at the end of the period | |
Banker's acceptancebill
| Banker's acceptance bill | 19,790,607.90 | 3,408,110.27 | 18,706,652.69 | 4,525,816.87 |
Total
| Total | 19,790,607.90 | 3,408,110.27 | 18,706,652.69 | 4,525,816.87 |
* The Company shall terminate recognition at the time of endorsement transfer or discount of the bankacceptance bill held by a bank with higher credit rating, and shall continue to recognize the notes receivableat the time of endorsement transfer or discount of the bank acceptance bill held by a bank with generalcredit rating, and terminate recognition at the time of payment upon maturity.
7. Advances to suppliers
(1) Presentation of advances to suppliers by aging
Unit: yuan
| Aging | Closing Balance | Beginning balance | ||
| Amount | Proportion | Amount | Proportion | |
Within 1 year
| Within 1 year | 104,201,209.67 | 94.33% | 124,030,319.05 | 100.00% |
1~2 years
| 1~2 years | 6,261,384.71 | 5.67% | 920.00 |
Total
| Total | 110,462,594.38 | -- | 124,031,239.05 | -- |
Reasons for non-timely settlement of important advances from customers with the aging more than 1 year:
There is no important advances aged for more than one year during this reporting period.
(2) Advances to suppliers with top 5 ending balances by prepayment object
| Advance object | Closing Balance | Proportion in total ending balance of advances (%) |
First
| First | 44,104,368.85 | 39.93 |
Second
| Second | 11,084,010.92 | 10.03 |
Third
| Third | 3,167,448.30 | 2.87 |
Fourth
| Fourth | 2,528,039.97 | 2.29 |
Fifth
| Fifth | 2,332,000.00 | 2.11 |
Total
| Total | 63,215,868.04 | 57.23 |
Other description:
8. Other receivables
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other receivables
| Other receivables | 329,179,077.01 | 458,174,652.72 |
Total
| Total | 329,179,077.01 | 458,174,652.72 |
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
| Item | Closing Balance | Beginning balance |
2) Important overdue interest
Unit: yuan
| Borrower | Closing Balance | Overdue time | Overdue reason | Whether there is impairment and its judgment basis |
Other description:
3) Provision for bad debt
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit: yuan
| Project (or invested unit) | Closing Balance | Beginning balance |
2) Important dividends receivable with the aging more than 1 year
Unit: yuan
| Project (or invested unit) | Closing Balance | Aging | Reason for non-recovery | Whether there is impairment and its judgment basis |
3) Provision for bad debt
□ Applicable √ Not applicable
Other description:
(3) Other receivables
1) Other receivables classified by nature
Unit: yuan
| Nature of payment | Ending book balance | Beginning book balance |
Compensation for investment andconstruction project of Winner Medical(Heyuan)
| Compensation for investment and construction project of Winner Medical (Heyuan) | 238,655,320.00 | 387,655,320.00 |
Margin and deposit
| Margin and deposit | 112,419,848.22 | 98,537,244.23 |
Export drawback
| Export drawback | 7,309,079.43 | 7,809,612.57 |
Employee pretty cash
| Employee pretty cash | 3,238,544.33 | 2,496,966.71 |
Others
| Others | 15,766,563.91 | 6,013,308.92 |
Total
| Total | 377,389,355.89 | 502,512,452.43 |
2) Provision for bad debt
Unit: yuan
| Provision for bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit losses over the entire duration (no credit impairment occurred) | Expected credit losses over the entire duration (credit impairment has occurred) |
Balance on January 1,2021
| Balance on January 1, 2021 | 44,337,799.71 | 44,337,799.71 |
Balance on January 1,2021 in the currentperiod
| Balance on January 1, 2021 in the current period | —— | —— | —— | —— |
- Carried over to Stage 2
| - Carried over to Stage 2 |
- Carried over to Stage 3
| - Carried over to Stage 3 | (5,870,314.77) | 5,870,314.77 |
-- Reversed to Stage 2
| -- Reversed to Stage 2 |
-- Reversed to Stage 1
| -- Reversed to Stage 1 |
Accrual in current period
| Accrual in current period | 13,564,017.57 | 5,870,314.77 | 19,434,332.34 |
Reversal in currentperiod
| Reversal in current period | 15,466,080.53 | 15,466,080.53 |
Other changes
| Other changes | (95,772.64) | (95,772.64) |
Balance on December31, 2021
| Balance on December 31, 2021 | 36,469,649.34 | 11,740,629.54 | 48,210,278.88 |
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable √ Not applicable
Disclosure by aging
Unit: yuan
| Aging | Book balance |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 48,935,151.22 |
1~2 years
| 1~2 years | 28,415,705.45 |
2~3 years
| 2~3 years | 258,129,423.45 |
More than 3 years
| More than 3 years | 41,909,075.77 |
3~4 years
| 3~4 years | 36,725,907.73 |
4~5 years
| 4~5 years | 3,057,874.96 |
More than 5 years
| More than 5 years | 2,125,293.08 |
Total
| Total | 377,389,355.89 |
3) Provision, recovery or reversal of bad debt reserves in the current periodProvision for bad debts in current period:
Unit: yuan
| Class | Beginning balance | Amount of change in current period | Closing Balance | |||
| Accrual | Recovered or reversed | Write-off | Others | |||
Provision for baddebts of otherreceivables
| Provision for bad debts of other receivables | 44,337,799.71 | 19,434,332.34 | 15,466,080.53 | (95,772.64) | 48,210,278.88 |
Total
| Total | 44,337,799.71 | 19,434,332.34 | 15,466,080.53 | (95,772.64) | 48,210,278.88 |
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
| Unit name | Amount reversed or recovered | Recovery way |
4) Other receivable actually written off at the current period
Unit: yuan
| Item | Amount written off |
Write-off of important other receivables:
Unit: yuan
| Unit name | Nature of other receivables | Amount written off | Reasons for write-off | Write-off procedures performed | Whether the payments arise from connected transactions |
Description of write-off of other receivables
5) Other receivables with Top 5 ending balances by debtor
Unit: yuan
| Unit name | Nature of payment | Closing Balance | Aging | Proportion in total other ending balance receivable | Ending balance of bad debt provision |
First
| First | Receivables related to Heyuan project | 238,655,320.00 | 2-3 years | 63.24% | 35,798,298.00 |
Second
| Second | Margin and deposit | 7,857,968.76 | Within 1 year | 2.08% | 392,898.44 |
Third
| Third | Advance payment receivables | 5,870,314.77 | 1-2 years | 1.56% | 5,870,314.77 |
Fourth
| Fourth | Margin and deposit | 5,088,270.42 | 1-2 years | 1.35% | 254,413.52 |
Fifth
| Fifth | Margin and deposit | 2,746,332.73 | Within 1 year | 0.73% | 137,316.64 |
Total
| Total | -- | 260,218,206.68 | -- | 68.96% | 42,453,241.37 |
6) Accounts receivable involving government subsidies
Unit: yuan
| Unit name | Name of government subsidy project | Closing Balance | Ending aging | Estimated collection time, amount and basis |
NA
7) Other receivables derecognized due to transfer of financial assetsNA
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvementNAOther description:
NA
9. Inventory
Does the Company need to follow the disclosure requirements of real estate industryNo
(1) Inventory classification
Unit: yuan
| Item | Closing Balance | Beginning balance | ||||
| Book balance | Inventory falling price reserves or provision for impairment of contract performance costs | Book value | Book balance | Inventory falling price reserves or provision for impairment of contract performance costs | Book value | |
Raw materials
| Raw materials | 250,762,666.63 | 5,117,956.28 | 245,644,710.35 | 376,925,094.86 | 8,304,812.08 | 368,620,282.78 |
| Work in process | 172,991,958.16 | 4,599,718.11 | 168,392,240.05 | 131,194,111.13 | 4,032,195.26 | 127,161,915.87 |
Merchandiseinventory
| Merchandise inventory | 1,256,964,242.78 | 100,692,345.17 | 1,156,271,897.61 | 772,693,263.07 | 136,714,538.94 | 635,978,724.13 |
Semi-finishedproducts shippedin transit
| Semi-finished products shipped in transit | 16,843,633.88 | 16,843,633.88 | 76,790,690.31 | 76,790,690.31 |
Low priced andeasily wornarticles
| Low priced and easily worn articles | 10,226,415.09 | 1,852.99 | 10,224,562.10 | 8,170,543.67 | 235,216.55 | 7,935,327.12 |
Total
| Total | 1,707,788,916.54 | 110,411,872.55 | 1,597,377,043.99 | 1,365,773,703.04 | 149,286,762.83 | 1,216,486,940.21 |
(2) Inventory falling price reserves and provision for impairment of contract performance costs
Unit: yuan
| Item | Beginning balance | Amount increased in current period | Amount decreased in current period | Closing Balance | ||
| Accrual | Others | Reversal or write-back | Others | |||
Raw materials
| Raw materials | 8,304,812.08 | 14,611,095.58 | 17,797,951.38 | 5,117,956.28 |
Work in process
| Work in process | 4,032,195.26 | 11,096,444.91 | 10,528,922.06 | 4,599,718.11 |
Merchandiseinventory
| Merchandise inventory | 136,714,538.94 | 77,995,279.61 | 114,017,473.38 | 100,692,345.17 |
Low priced andeasily wornarticles
| Low priced and easily worn articles | 235,216.55 | 2,063.40 | 235,426.96 | 1,852.99 |
Total
| Total | 149,286,762.83 | 103,704,883.50 | 142,579,773.78 | 110,411,872.55 |
(3) Description of ending balance of inventory containing the capitalized amount of borrowing costsNA
(4) Description of current amortization amount of contract performance costNA
10. Contract assets
Unit: yuan
| Item | Closing Balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Amount and reason of significant change in the book value of contract assets in current period:
Unit: yuan
| Item | Amount of change | Reason for change |
If the bad debt provision of contract assets is accrued according to the general model of expected credit loss, please refer to thedisclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ Not applicable
Provision for impairment of contract assets in current period
Unit: yuan
| Item | Accrual in current period | Reversal in current period | Write off/verification in current period | Reasons |
Other description:
11. Assets held for sales
Unit: yuan
| Item | Ending book balance | Provision for impairment | Ending book value | Fair value | Estimated disposal cost | Estimated disposal time |
Other description:
12. Non-current assets due within a year
Unit: yuan
| Item | Closing Balance | Beginning balance |
Important debt investments/other debt investments
Unit: yuan
| Debt item | Closing Balance | Beginning balance | ||||||
| Book value | Coupon rate | Actual rate | Maturity date | Book value | Coupon rate | Actual rate | Maturity date | |
Other description:
13. Other current assets
Unit: yuan
| Item | Closing Balance | Beginning balance |
Return cost receivable
| Return cost receivable | 733,984.30 | 1,449,440.77 |
Interest on fixed time deposits/wholesaledeposits
| Interest on fixed time deposits/wholesale deposits | 50,158,601.37 |
VAT input tax to be deducted / uncertifiedinput tax
| VAT input tax to be deducted / uncertified input tax | 43,055,676.36 | 31,138,563.62 |
Prepaid corporate income tax
| Prepaid corporate income tax | 17,873,716.95 |
Deferred expenses
| Deferred expenses | 5,174,471.98 | 2,595,244.40 |
Others
| Others | 1,763,374.60 | 978.30 |
Total
| Total | 118,759,825.56 | 35,184,227.09 |
Other description:
14. Debt investment
Unit: yuan
| Item | Closing Balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Important debt investments
Unit: yuan
| Debt item | Closing Balance | Beginning balance | ||||||
| Book value | Coupon rate | Actual rate | Maturity date | Book value | Coupon rate | Actual rate | Maturity date | |
Provision for impairment
Unit: yuan
| Provision for bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit losses over the entire duration (no credit impairment occurred) | Expected credit losses over the entire duration (credit impairment has occurred) |
Balance on January 1,2021 in the currentperiod
| Balance on January 1, 2021 in the current period | —— | —— | —— | —— |
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable √ Not applicable
Other description:
15. Other debt investments
Unit: yuan
| Item | Beginning balance | Accrued interest | Fair value change in current period | Closing Balance | Cost | Accumulated fair value change | Accumulated provision for loss recognized in other comprehensive income | Remark |
Important other debt investments
Unit: yuan
| Other debt item | Closing Balance | Beginning balance | ||||||
| Book value | Coupon rate | Actual rate | Maturity date | Book value | Coupon rate | Actual rate | Maturity date | |
Provision for impairment
Unit: yuan
| Provision for bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit losses over the entire duration (no credit impairment occurred) | Expected credit losses over the entire duration (credit impairment has occurred) |
Balance on January 1,2021 in the currentperiod
| Balance on January 1, 2021 in the current period | —— | —— | —— | —— |
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable √ Not applicable
Other description:
16. Long-term receivables
(1) Long-term receivables
Unit: yuan
| Item | Closing Balance | Beginning balance | Discount rate range | ||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | ||
Impairment of provision for bad debt
Unit: yuan
| Provision for bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit losses over the entire duration (no credit impairment occurred) | Expected credit losses over the entire duration (credit impairment has occurred) |
Balance on January 1,2021 in the currentperiod
| Balance on January 1, 2021 in the current period | —— | —— | —— | —— |
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable √ Not applicable
(2) Long-term receivables derecognized due to transfer of financial assets
(3) Amount of assets and liabilities formed by transferring long-term receivables and continuing
involvementOther description
17. Long-term equity investment
Unit: yuan
| Invested unit | Beginning balance (book value) | Increase or decrease in current period | Ending balance (book value) | Balance of impairment provision at the end of period | |||||||
| Further investment | Capital reduction | Investment gains and losses recognized by the equity method | Adjustment of other comprehensive income | Changes in other equity | Declared payment of cash dividends or profits | Provision for impairment | Others | ||||
I. Cooperative enterprise
I. Cooperative enterpriseII. Joint venture
II. Joint ventureChengduWinner
| Chengdu Winner | 13,424,230.41 | 3,525,570.83 | 16,949,801.24 |
Subtotal
| Subtotal | 13,424,230.41 | 3,525,570.83 | 16,949,801.24 |
Total
| Total | 13,424,230.41 | 3,525,570.83 | 16,949,801.24 |
Other description
18. Other equity instrument investments
Unit: yuan
| Item | Closing Balance | Beginning balance |
Itemized disclosure of the current non-trading equity instrument investment
Unit: yuan
| Project name | Recognized dividend income | Accumulated gains | Accumulated losses | Amount of other comprehensive income transferred into retained income | Reasons for designating to be measured at fair value and its changes are recorded into other comprehensive income | Reasons for other comprehensive income transferring into retained income |
Other description:
19. Other non-current financial assets
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other description:
20. Investment in real estates
(1) Investment real estates using cost measurement mode
□ Applicable √ Not applicable
(2) Investment real estates using fair value measurement mode
□ Applicable √ Not applicable
(3) Investment real estates without certificate of title
Unit: yuan
| Item | Book value | Reasons for not obtaining the certificate of title |
Other description
21. Fixed assets
Unit: yuan
| Item | Closing Balance | Beginning balance |
Fixed assets
| Fixed assets | 1,477,320,848.63 | 1,400,749,050.00 |
Total
| Total | 1,477,320,848.63 | 1,400,749,050.00 |
(1) Fixed assets
Unit: yuan
| Item | Houses and building | Machinery equipment | Transportation equipment | Electronic equipment and office equipment, etc. | Total |
I. Original bookvalue:
| I. Original book value: |
1. Beginning
balance
| 1. Beginning balance | 926,386,555.07 | 1,064,281,471.00 | 20,440,318.74 | 92,956,202.87 | 2,104,064,547.68 |
2. Amount
increased incurrent period
| 2. Amount increased in current period | 71,725,032.00 | 153,472,843.98 | 4,639,482.14 | 38,392,518.35 | 268,229,876.47 |
(1) Purchase
| (1) Purchase | 42,675,705.50 | 74,938,175.02 | 4,639,482.14 | 37,741,741.57 | 159,995,104.23 |
(2) Transfer
fromconstruction inprogress
| (2) Transfer from construction in progress | 29,049,326.50 | 78,534,668.96 | 650,776.78 | 108,234,772.24 |
(3) Increase by
businesscombination
| (3) Increase by business combination |
3. Amount
decreased incurrent period
| 3. Amount decreased in current period | 3,006,284.90 | 67,034,449.84 | 811,746.42 | 5,977,992.12 | 76,830,473.28 |
(1) Disposal or
scrap
| (1) Disposal or scrap | 3,006,284.90 | 67,034,449.84 | 811,746.42 | 5,977,992.12 | 76,830,473.28 |
4. Closing Balance
| 4. Closing Balance | 995,105,302.17 | 1,150,719,865.14 | 24,268,054.46 | 125,370,729.10 | 2,295,463,950.87 |
II. Accumulateddepreciation
| II. Accumulated depreciation |
1. Beginning
balance
| 1. Beginning balance | 196,666,419.77 | 343,952,942.83 | 10,785,778.37 | 45,364,340.26 | 596,769,481.23 |
2. Amount
increased incurrent period
| 2. Amount increased in current period | 41,413,892.44 | 98,137,211.90 | 1,792,990.48 | 14,554,440.66 | 155,898,535.48 |
(1) Accrual
| (1) Accrual | 41,413,892.44 | 98,137,211.90 | 1,792,990.48 | 14,554,440.66 | 155,898,535.48 |
3. Amount
decreased incurrent period
| 3. Amount decreased in current period | 1,263,240.11 | 37,096,113.75 | 419,861.38 | 3,548,462.43 | 42,327,677.67 |
(1) Disposal or
scrap
| (1) Disposal or scrap | 1,263,240.11 | 37,096,113.75 | 419,861.38 | 3,548,462.43 | 42,327,677.67 |
4. Closing Balance
| 4. Closing Balance | 236,817,072.10 | 404,994,040.98 | 12,158,907.47 | 56,370,318.49 | 710,340,339.04 |
III. Provision forimpairment
| III. Provision for impairment |
1. Beginning
balance
| 1. Beginning balance | 47,897,289.81 | 58,276,333.59 | 372,393.05 | 106,546,016.45 |
| 2. Amount increased in current period | 7,924,893.69 | 7,924,893.69 |
(1) Accrual
| (1) Accrual | 7,924,893.69 | 7,924,893.69 |
3. Amount
decreased incurrent period
| 3. Amount decreased in current period | 2,215,098.79 | 4,215,961.63 | 237,086.52 | 6,668,146.94 |
(1) Disposal or
scrap
| (1) Disposal or scrap | 2,215,098.79 | 4,215,961.63 | 237,086.52 | 6,668,146.94 |
4. Closing Balance
| 4. Closing Balance | 45,682,191.02 | 61,985,265.65 | 135,306.53 | 107,802,763.20 |
IV. Book value
| IV. Book value |
1. Ending book
value
| 1. Ending book value | 712,606,039.05 | 683,740,558.51 | 12,109,146.99 | 68,865,104.08 | 1,477,320,848.63 |
2. Beginning book
value
| 2. Beginning book value | 681,822,845.49 | 662,052,194.58 | 9,654,540.37 | 47,219,469.56 | 1,400,749,050.00 |
(2) Fixed assets that are temporarily idle
Unit: yuan
| Item | Original book value | Accumulated depreciation | Provision for impairment | Book value | Remark |
Electronicequipment
| Electronic equipment | 11,464.80 | 9,794.05 | 1,670.75 | Not needed for now |
Machineryequipment
| Machinery equipment | 2,931,847.02 | 1,967,885.39 | 85,913.42 | 878,048.21 | Not needed for now |
Total
| Total | 2,943,311.82 | 1,977,679.44 | 85,913.42 | 879,718.96 |
(3) Fixed assets leased out by operating lease
Unit: yuan
| Item | Ending book value |
(4) Fixed assets without certificate of title
Unit: yuan
| Item | Book value | Reasons for not obtaining the certificate of title |
Main plant of Winner Medical (Tianmen)Spunlace Phase II
| Main plant of Winner Medical (Tianmen) Spunlace Phase II | 16,257,581.83 | The formalities have not yet been completed |
Winner Medical (Jingmen) NorthDormitory Building (six storeys)
| Winner Medical (Jingmen) North Dormitory Building (six storeys) | 12,859,291.42 | The formalities have not yet been completed |
First floor of Tianmen Winner MedicalBuilding
| First floor of Tianmen Winner Medical Building | 9,479,460.46 | The formalities have not yet been completed |
Winner Medical (Jingmen) Office Building(four storeys)
| Winner Medical (Jingmen) Office Building (four storeys) | 6,803,491.83 | The formalities have not yet been completed |
Winner Medical (Jingmen) Northwarehouse
| Winner Medical (Jingmen) North warehouse | 6,558,442.20 | The formalities have not yet been completed |
Second floor of Tianmen Winner MedicalBuilding
| Second floor of Tianmen Winner Medical Building | 5,707,447.63 | The formalities have not yet been completed |
Winner Medical (Jingmen) New Canteen
| Winner Medical (Jingmen) New Canteen | 1,837,671.15 | The formalities have not yet been completed |
Winner Medical (Tianmen) Finishing Plant3 (Mask Plant)
| Winner Medical (Tianmen) Finishing Plant 3 (Mask Plant) | 1,124,413.44 | The formalities have not yet been completed |
Other description
(5) Liquidation of fixed assets
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other description
22. Construction in progress
Unit: yuan
| Item | Closing Balance | Beginning balance |
Construction in progress
| Construction in progress | 216,096,622.30 | 61,383,340.97 |
Total
| Total | 216,096,622.30 | 61,383,340.97 |
(1) Construction in progress
Unit: yuan
| Item | Closing Balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Tianmeninfrastructureproject
| Tianmen infrastructure project | 28,206,760.19 | 28,206,760.19 | 3,103,139.22 | 3,103,139.22 |
Winner Medical(Chongyang)engineeringproject
| Winner Medical (Chongyang) engineering project | 3,920,741.93 | 3,920,741.93 |
Winner Medical(Huanggang)EngineeringProject
| Winner Medical (Huanggang) Engineering Project | 264,970.51 | 264,970.51 |
Winner Medical(Jiayu)engineeringproject
| Winner Medical (Jiayu) engineering project | 4,821,946.07 | 4,821,946.07 | 206,839.83 | 206,839.83 |
Yichanginfrastructureproject
| Yichang infrastructure project | 829,816.92 | 829,816.92 |
Jingmeninfrastructureproject
| Jingmen infrastructure project | 11,748,247.37 | 11,748,247.37 |
Wuhan Winnerengineeringproject
| Wuhan Winner engineering project | 75,214,244.85 | 75,214,244.85 | 25,508,709.25 | 25,508,709.25 |
Other equipmentto be installedand sporadicprojects
| Other equipment to be installed and sporadic projects | 109,049,108.52 | 1,460,407.84 | 107,588,700.68 | 17,526,254.29 | 1,460,407.84 | 16,065,846.45 |
Total
| Total | 217,557,030.14 | 1,460,407.84 | 216,096,622.30 | 62,843,748.81 | 1,460,407.84 | 61,383,340.97 |
(2) Current changes in major projects under construction
Unit: yuan
| Project name | Budget number | Beginning balance | Amount increased in current period | Amount carried forward to fixed assets in current period | Other decreases in current period | Closing Balance | Proportion of total project input to the budget | Progress of works | Accumulated amount of interest capitalization | Including: interest capitalization funds in the current period | Interest capitalization rate in the current period | Source of funds |
Infrastru
| Infrastru | 48,000,0 | 4,403,66 | 22,018,3 | 26,422,0 | 55.05% | 60.00% | Others |
| cture project of Winner Medical (Tianmen) Automated warehouse project | 00.00 | 9.72 | 48.62 | 18.34 |
Non-wovencardingmachineandspunlacemachineinSpunlace Line 3ofWinnerMedical(Wuhan)
| Non-woven carding machine and spunlace machine in Spunlace Line 3 of Winner Medical (Wuhan) | 37,000,000.00 | 36,849,434.96 | 36,849,434.96 | 99.59% | 90.00% | Others |
WinnerMedical(Tianmen)AutomatedProjectequipment andinstallationproject
| Winner Medical (Tianmen) Automated Project equipment and installation project | 22,950,000.00 | 6,092,920.35 | 6,092,920.35 | 26.55% | 30.00% | Others |
WinnerMedical(Jingmen) officedormitorybuilding
| Winner Medical (Jingmen) office dormitory building | 21,000,000.00 | 11,654,612.45 | 7,094,513.67 | 18,749,126.12 | 89.28% | 100.00% | Others |
High-yieldcardingmachineandequipment inde-dusting shopofWinnerMedical(Wuhan)
| High-yield carding machine and equipment in de-dusting shop of Winner Medical (Wuhan) | 16,000,000.00 | 15,044,247.76 | 15,044,247.76 | 94.03% | 90.00% | Others |
Pileengineering of1-3sortingcenterof
| Pile engineering of 1-3 sorting center of | 268,000,000.00 | 10,000,000.00 | 10,000,000.00 | 3.73% | 3.73% | Others |
WinnerMedical(Wuhan)Phase II
WinnerMedical(Wuhan)Phase IImainproject
| Winner Medical (Wuhan) Phase II main project | 110871722.11 | 49,892,274.96 | 49,892,274.96 | 45.00% | 45.00% | Others |
WinnerMedical(Tianmen)Spunlace PhaseIIIFinishing PlantProject
| Winner Medical (Tianmen) Spunlace Phase III Finishing Plant Project | 7,600,000.00 | 4,880,733.94 | 4,880,733.94 | 64.22% | 70.00% | Others |
Total
| Total | 531,421,722.11 | 16,058,282.17 | 151,872,474.26 | 18,749,126.12 | 149,181,630.31 | -- | -- | -- |
(3) Provision for impairment of construction in progress in current period
Unit: yuan
| Item | Current accrued amount | Reason for accrual |
Other descriptionNA
(4) Engineering materials
Unit: yuan
| Item | Closing Balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Other description:
23. Productive biological assets
(1) Productive biological assets using cost measurement mode
□ Applicable √ Not applicable
(2) Productive biological assets using fair value measurement mode
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
Unit: yuan
| Item | Houses and building | Total |
I. Original book value:
| I. Original book value: |
1. Beginning balance
| 1. Beginning balance | 836,548,177.77 | 836,548,177.77 |
2. Amount increased in current period
| 2. Amount increased in current period | 246,481,539.66 | 246,481,539.66 |
New lease
| New lease | 246,481,539.66 | 246,481,539.66 |
3. Amount decreased in current period
| 3. Amount decreased in current period | 36,413,608.18 | 36,413,608.18 |
Disposal
| Disposal | 36,413,608.18 | 36,413,608.18 |
| 4. Closing Balance | 1,046,616,109.25 | 1,046,616,109.25 |
II. Accumulated depreciation
| II. Accumulated depreciation |
1. Beginning balance
| 1. Beginning balance | 332,342,440.04 | 332,342,440.04 |
2. Amount increased in current period
| 2. Amount increased in current period | 210,025,059.74 | 210,025,059.74 |
(1) Accrual
| (1) Accrual | 210,025,059.74 | 210,025,059.74 |
3. Amount decreased in current period
| 3. Amount decreased in current period | 27,486,833.97 | 27,486,833.97 |
(1) Disposal
| (1) Disposal | 27,486,833.97 | 27,486,833.97 |
4. Closing Balance
| 4. Closing Balance | 514,880,665.81 | 514,880,665.81 |
III. Provision for impairment
| III. Provision for impairment |
1. Beginning balance
| 1. Beginning balance |
2. Amount increased in current period
| 2. Amount increased in current period |
(1) Accrual
| (1) Accrual |
3. Amount decreased in current period
| 3. Amount decreased in current period |
(1) Disposal
| (1) Disposal |
4. Closing Balance
| 4. Closing Balance |
IV. Book value
| IV. Book value |
1. Ending book value
| 1. Ending book value | 531,735,443.44 | 531,735,443.44 |
2. Beginning book value
| 2. Beginning book value | 504,205,737.73 | 504,205,737.73 |
Other description:
26. Intangible assets
(1) Intangible assets
Unit: yuan
| Item | Land use right | Patent right | Nonpatented technology | Trademark right | Software use right | Franchised use right | Total |
I. Originalbook value
| I. Original book value |
1. Beginning
balance
| 1. Beginning balance | 215,498,508.06 | 1,573,637.86 | 1,710,590.99 | 44,776,668.88 | 10,228,226.53 | 273,787,632.32 |
2. Amount
increased incurrentperiod
| 2. Amount increased in current period | 50,675,510.82 | 17,489,919.41 | 68,165,430.23 |
(1) Purcha
se
| (1) Purchase | 50,675,510.82 | 17,489,919.41 | 68,165,430.23 |
(2) Internal
R&D
| (2) Internal R&D |
(3) Increas
e bybusinesscombination
| (3) Increase by business combination |
3. Amount
decreased incurrentperiod
| 3. Amount decreased in current period | 4,613,205.00 | 4,613,205.00 |
(1) Dispos
al
| (1) Disposal | 4,613,205.00 | 4,613,205.00 |
| 4. Closing Balance | 266,174,018.88 | 1,573,637.86 | 1,710,590.99 | 57,653,383.29 | 10,228,226.53 | 337,339,857.55 |
II. Accumulated amortization
| II. Accumulated amortization |
1. Beginning
balance
| 1. Beginning balance | 23,228,466.51 | 1,126,804.28 | 1,661,457.66 | 29,217,573.55 | 10,228,226.53 | 65,462,528.53 |
2. Amount
increased incurrentperiod
| 2. Amount increased in current period | 4,810,650.67 | 120,650.11 | 13,400.00 | 5,844,942.59 | 10,789,643.37 |
(1) Accrua
l
| (1) Accrual | 4,810,650.67 | 120,650.11 | 13,400.00 | 5,844,942.59 | 10,789,643.37 |
3. Amount
decreased incurrentperiod
| 3. Amount decreased in current period | 4,613,205.00 | 4,613,205.00 |
(1) Dispos
al
| (1) Disposal | 4,613,205.00 | 4,613,205.00 |
4. Closing
Balance
| 4. Closing Balance | 28,039,117.18 | 1,247,454.39 | 1,674,857.66 | 30,449,311.14 | 10,228,226.53 | 71,638,966.90 |
III. Provisionfor impairment
| III. Provision for impairment |
1. Beginning
balance
| 1. Beginning balance |
2. Amount
increased incurrentperiod
| 2. Amount increased in current period |
(1) Accrua
l
| (1) Accrual |
3. Amount
decreased incurrentperiod
| 3. Amount decreased in current period |
(1) Dispos
al
| (1) Disposal |
4. Closing
Balance
| 4. Closing Balance |
IV. Bookvalue
| IV. Book value |
1. Ending
book value
| 1. Ending book value | 238,134,901.70 | 326,183.47 | 35,733.33 | 27,204,072.15 | 265,700,890.65 |
2. Beginning
book value
| 2. Beginning book value | 192,270,041.55 | 446,833.58 | 49,133.33 | 15,559,095.33 | 208,325,103.79 |
The proportion of intangible assets formed through internal R & D of the Company in the balance of intangible assets at the end ofcurrent period: 0.00%
(2) Land use right without certificate of title
Unit: yuan
| Item | Book value | Reasons for not obtaining the certificate of title |
Other description:
27. Development expenditure
Unit: yuan
| Item | Beginning balance | Amount increased in current period | Amount decreased in current period | Closing Balance | ||||
| Internal development expenditure | Others | Recognized as intangible assets | Transfer to current profit and loss | |||||
Total
| Total |
Other description
28. Goodwill
(1) Original book value of goodwill
Unit: yuan
| invested entity name or goodwill forming matter | Beginning balance | Increase in current period | Decrease in current period | Closing Balance | ||
| Formed by business combination | Disposal | |||||
Businesscombination notunder commoncontrol -Acquisition ofMalaysia Winner
| Business combination not under common control - Acquisition of Malaysia Winner | 2,681,232.09 | 2,681,232.09 |
Total
| Total | 2,681,232.09 | 2,681,232.09 |
(2) Provision for impairment of goodwill
Unit: yuan
| invested entity name or goodwill forming matter | Beginning balance | Increase in current period | Decrease in current period | Closing Balance | ||
| Accrual | Disposal | |||||
Businesscombination notunder commoncontrol -Acquisition ofMalaysia Winner
| Business combination not under common control - Acquisition of Malaysia Winner | 2,681,232.09 | 2,681,232.09 |
Total
| Total | 2,681,232.09 | 2,681,232.09 |
Information relating to the asset group or asset group combination of goodwillExplain the goodwill impairment test process, key parameters (such as forecast period growth rate at the present value of expectedfuture cash flow, steady period growth rate, profit margin, discount rate, forecast period, etc.) and recognition method of goodwillimpairment loss:
Impact of goodwill impairment testsOther description
29. Long-term deferred expenses
Unit: yuan
| Item | Beginning balance | Amount increased in current period | Amortization amount in current period | Other decreases | Closing Balance |
Decoration cost
| Decoration cost | 16,585,327.02 | 35,035,282.28 | 7,873,132.11 | 21,589.46 | 43,725,887.73 |
Decoration expensesfor operating leasedfixed assets
| Decoration expenses for operating leased fixed assets | 104,749,680.31 | 78,454,347.45 | 47,781,416.46 | 4,362,728.20 | 131,059,883.10 |
Total
| Total | 121,335,007.33 | 113,489,629.73 | 55,654,548.57 | 4,384,317.66 | 174,785,770.83 |
Other description
30. Deferred income tax assets and deferred income tax liabilities
(1) Unoffset deferred income tax assets
Unit: yuan
| Item | Closing Balance | Beginning balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
Provision for impairmentof assets
| Provision for impairment of assets | 308,989,374.25 | 55,407,470.14 | 342,367,005.23 | 65,132,073.97 |
Unrealized profit ofinternal transaction
| Unrealized profit of internal transaction | 114,388,686.49 | 23,660,535.47 | 218,425,773.62 | 33,265,658.66 |
Deductible loss
| Deductible loss | 60,670,842.73 | 15,167,710.69 | 91,373,086.80 | 20,778,878.65 |
Dismission welfare
| Dismission welfare | 2,315,103.48 | 347,265.52 | 2,318,903.48 | 347,835.52 |
Deferred income
| Deferred income | 109,625,401.82 | 17,710,015.89 | 94,921,260.87 | 15,374,283.41 |
Member points
| Member points | 10,319,207.78 | 2,579,801.95 | 16,282,017.02 | 4,070,504.26 |
Expected return andaccrued expenses
| Expected return and accrued expenses | 1,881,955.47 | 410,114.78 | 1,316,336.08 | 329,084.02 |
Advertising expenses inexcess of the taxdeductible limit
| Advertising expenses in excess of the tax deductible limit | 39,046,992.53 | 5,857,048.88 | 256,467.28 | 64,116.82 |
Equity incentive fee
| Equity incentive fee | 10,509,464.48 | 1,576,419.67 | 25,132,771.81 | 3,769,915.77 |
Total
| Total | 657,747,029.03 | 122,716,382.99 | 792,393,622.19 | 143,132,351.08 |
(2) Unoffset deferred income tax liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
Changes in fair value oftradable financial assets
| Changes in fair value of tradable financial assets | 27,097,991.08 | 4,242,794.56 | 11,178,589.44 | 1,754,263.42 |
Depreciation of fixedassets
| Depreciation of fixed assets | 52,132,715.97 | 9,094,365.12 | 59,458,724.22 | 10,411,344.82 |
Total
| Total | 79,230,707.05 | 13,337,159.68 | 70,637,313.66 | 12,165,608.24 |
(3) Deferred income tax assets or liabilities presented as net amount after offset
Unit: yuan
| Item | Ending offset amount of deferred income tax assets and liabilities | Ending balance of deferred income tax assets and liabilities after offset | Beginning offset amount of deferred income tax assets and liabilities | Beginning balance of deferred income tax assets and liabilities after offset |
Deferred income taxassets
| Deferred income tax assets | 122,716,382.99 | 143,132,351.08 |
Deferred income taxliabilities
| Deferred income tax liabilities | 13,337,159.68 | 12,165,608.24 |
(4) Details of unrecognized deferred income tax assets
Unit: yuan
| Item | Closing Balance | Beginning balance |
Deductible loss
| Deductible loss | 206,266,023.76 | 100,460,644.28 |
Provision for impairment of assets andamortization of depreciation
| Provision for impairment of assets and amortization of depreciation | 5,372,991.42 | 5,508,170.07 |
Total
| Total | 211,639,015.18 | 105,968,814.35 |
(5) Deductible losses on unrecognized deferred income tax assets will expire in the following year
Unit: yuan
| Year | Closing balance | Beginning amount | Remark |
2022
| 2022 | 14,402,997.46 | 305,751.35 |
2023
| 2023 | 25,574,944.59 | 23,804,062.08 |
2024
| 2024 | 48,810,687.88 | 31,489,882.74 |
2025
| 2025 | 44,934,541.40 | 38,128,355.56 |
2026
| 2026 | 65,783,169.18 |
No maturity date
| No maturity date | 6,759,683.25 | 6,732,592.55 |
Total
| Total | 206,266,023.76 | 100,460,644.28 | -- |
Other description:
31. Other non-current assets
Unit: yuan
| Item | Closing Balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
Advance project payment / equipmentpurchase payment / advance storeengineering and decoration payment
| Advance project payment / equipment purchase payment / advance store engineering and decoration payment | 115,571,001.80 | 115,571,001.80 | 63,807,415.75 | 63,807,415.75 |
Total
| Total | 115,571,001.80 | 115,571,001.80 | 63,807,415.75 | 63,807,415.75 |
Other description:
32. Short-term loans
(1) Classification of short-term loans
Unit: yuan
| Item | Closing Balance | Beginning balance |
Guaranteed borrowing
| Guaranteed borrowing | 120,000,000.00 |
Fiduciary loan
| Fiduciary loan | 30,000,000.00 |
Borrowing interest
| Borrowing interest | 71,416.66 |
Total
| Total | 150,071,416.66 |
Description of classification of short-term loans:
Year 2021
1. On February 5, 2020, Winner Medical signed a loan agreement (0400000014-2019 Longhua (B.) Zi No.0029;0400000014-2019 Longhua (B.) Zi No.0030) with Longhua Sub-branch of Industrial and Commercial Bankof China; the loan amount is RMB 50 million; the loan term is from February 5, 2020 to February 5, 2021;the loan interest rate is 2.5%; Qianhai Purcotton, Shenzhen Purcotton and Li Jianquan provide guarantee forsuch loan, and have signed the maximum amount guarantee contract (0400000014-2019 Longhua (B.) ZiNo.0029; 0400000014-2019 Longhua (B.) Zi No.0030; 0400000014-2019 Longhua (B.) No.0031). As ofDecember 31, 2021, the loan has been repaid.
2. On February 17, 2020, Winner Medical signed a loan agreement (2020 Z.Z.Y.H.B.Zi No.0027) with LonghuaSub-branch of Bank of China; the relevant credit extension agreement number is 2020 Z.Z.Y.H.E.X.ZiNo.0027; the loan amount is RMB 20 million; the loan term is from February 17, 2020 to February 17, 2021;the loan interest rate is 1.8%; Li Jianquan provides guarantee for such loan, and has signed the maximumamount guarantee contract (2020 Z.Z.Y.H.B.Zi No.0027). As of December 31, 2021, the loan has beenrepaid.
3. On February 14, 2020, Winner Medical signed a loan agreement (No.4430202001100002554) with ChinaDevelopment Bank; the loan amount is RMB 50 million; the loan term is from February 14, 2020 toFebruary 14, 2021; the loan interest rate is 2%; Shenzhen Purcotton provides guarantee for such loan, and
has signed the maximum amount guarantee contract. As of December 31, 2021, the loan has been repaid.
4. On February 13, 2020, Chongyang Winner signed a loan agreement (0181800301-2020 (Chongyang)
No.00015) with Chongyang County Sub-branch of Industrial and Commercial Bank of China; the loanamount is RMB 30 million.; the loan term is from February 13, 2020 to February 12, 2021; the loan interestrate is 2.5% without relevant mortgage guarantee. As of December 31, 2021, the loan has been repaid.
(2) short-term loans unpaid overdue
The total amount of overdue short-term loans at the end of the period is XXXX yuan, of which the important overdue short-termborrowings are as follows:
Unit: yuan
| Borrower | Closing Balance | Borrowing interest rate | Overdue time | Overdue interest rate |
Other description:
33. Tradable monetary liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance |
Including:
| Including: |
Including:
| Including: |
Other description:
34. Derivative financial liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other description:
35. Notes payable
Unit: yuan
| Type | Closing Balance | Beginning balance |
Banker's acceptance bill
| Banker's acceptance bill | 36,200,130.04 | 29,418,100.00 |
Total
| Total | 36,200,130.04 | 29,418,100.00 |
The total amount of notes payable due and have not been paid at the end of current period is 0.00 yuan.
36. Accounts payable
(1) Presentation of accounts payable
Unit: yuan
| Item | Closing Balance | Beginning balance |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 714,681,791.55 | 711,659,249.43 |
1~2 years (including 2 years)
| 1~2 years (including 2 years) | 16,519,858.09 | 10,837,529.41 |
2~3 years (including 3 years)
| 2~3 years (including 3 years) | 2,213,757.41 | 977,275.13 |
More than 3 years
| More than 3 years | 1,106,083.55 | 3,103,252.97 |
Total
| Total | 734,521,490.60 | 726,577,306.94 |
(2) Important accounts payable with the aging more than 1 year
Unit: yuan
| Item | Closing Balance | Reasons for failure of payment or carryover |
Other description:
37. Advance from customers
(1) Presentation of advance from customers
Unit: yuan
| Item | Closing Balance | Beginning balance |
(2) Important advances from customers with the aging more than 1 year
Unit: yuan
| Item | Closing Balance | Reasons for failure of payment or carryover |
38. Contract liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance |
Customer consideration received
| Customer consideration received | 330,856,457.64 | 513,906,240.61 |
Member points
| Member points | 10,319,207.78 | 16,282,017.02 |
Total
| Total | 341,175,665.42 | 530,188,257.63 |
Amount and reasons for significant changes in book value during the reporting period
Unit: yuan
| Item | Amount of change | Reason for change |
39. Payroll payable
(1) Presentation of payroll payable
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance |
I. Short-termcompensation
| I. Short-term compensation | 159,456,636.87 | 1,266,769,672.38 | 1,251,646,583.07 | 174,579,726.18 |
II. Welfare afterdismission - definedcontribution plan
| II. Welfare after dismission - defined contribution plan | 8,181,537.46 | 86,425,388.80 | 86,820,571.40 | 7,786,354.86 |
III. Dismission welfare
| III. Dismission welfare | 2,318,903.48 | 772,579.24 | 776,379.24 | 2,315,103.48 |
Total
| Total | 169,957,077.81 | 1,353,967,640.42 | 1,339,243,533.71 | 184,681,184.52 |
(2) Presentation of short-term compensation
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance |
1. Wages, bonuses,
allowances and subsidies
| 1. Wages, bonuses, allowances and subsidies | 158,773,217.39 | 1,160,925,967.18 | 1,147,781,557.00 | 171,917,627.57 |
2. Employee welfare
expenses
| 2. Employee welfare expenses | 136,421.00 | 32,808,824.37 | 31,046,678.96 | 1,898,566.41 |
3. Social insurance
premium
| 3. Social insurance premium | 392,645.68 | 42,429,154.82 | 42,238,184.52 | 583,615.98 |
Including: medicalinsurance premium
| Including: medical insurance premium | 232,807.39 | 37,996,487.96 | 37,837,568.17 | 391,727.18 |
Industrial injuryinsurancepremium
| Industrial injury insurance premium | 106,558.29 | 2,032,345.89 | 2,011,789.61 | 127,114.57 |
Birth insurancepremium
| Birth insurance premium | 53,280.00 | 2,400,320.97 | 2,388,826.74 | 64,774.23 |
4. Housing fund
| 4. Housing fund | 6,792.00 | 25,568,824.93 | 25,570,432.93 | 5,184.00 |
5. Labor union
expenditure and
| 5. Labor union expenditure and | 147,560.80 | 5,036,901.08 | 5,009,729.66 | 174,732.22 |
personnel education fundTotal
| Total | 159,456,636.87 | 1,266,769,672.38 | 1,251,646,583.07 | 174,579,726.18 |
(3) Presentation of defined contribution plans
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance |
1. Basic endowment
insurance
| 1. Basic endowment insurance | 8,064,367.91 | 83,587,246.34 | 83,981,713.42 | 7,669,900.83 |
2. Unemployment
insurance premium
| 2. Unemployment insurance premium | 117,169.55 | 2,838,142.46 | 2,838,857.98 | 116,454.03 |
Total
| Total | 8,181,537.46 | 86,425,388.80 | 86,820,571.40 | 7,786,354.86 |
Other description:
40. Taxes payable
Unit: yuan
| Item | Closing Balance | Beginning balance |
Added value tax
| Added value tax | 4,177,794.77 | 18,181,804.05 |
Corporate income tax
| Corporate income tax | 80,626,257.39 | 415,529,360.40 |
Individual income tax
| Individual income tax | 2,915,638.55 | 2,036,312.66 |
Urban maintenance and construction tax
| Urban maintenance and construction tax | 484,733.91 | 2,884,475.60 |
Housing property tax
| Housing property tax | 2,544,714.33 | 2,317,520.34 |
Education surcharge and local educationsurcharge
| Education surcharge and local education surcharge | 365,615.00 | 2,193,371.26 |
Land use tax
| Land use tax | 1,462,224.90 | 721,674.83 |
Environmental protection tax
| Environmental protection tax | 22,044.78 | 27,808.56 |
Stamp duty
| Stamp duty | 1,260,046.05 | 489,041.79 |
Total
| Total | 93,859,069.68 | 444,381,369.49 |
Other description:
41. Other payables
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other payables
| Other payables | 443,946,028.46 | 352,543,008.89 |
Total
| Total | 443,946,028.46 | 352,543,008.89 |
(1) Interest payable
Unit: yuan
| Item | Closing Balance | Beginning balance |
Important overdue and unpaid interest:
Unit: yuan
| Borrower | Overdue amount | Overdue reason |
Other description:
(2) Dividends payable
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other explanations, including important dividends payable that have not been paid for more than 1 year, shall disclose the reasons fornon-payment:
(3) Other payables
1) Other payables listed by nature
Unit: yuan
| Item | Closing Balance | Beginning balance |
Payment received from the third party
| Payment received from the third party | 20,895,856.79 | 14,357,347.93 |
Margin and deposit
| Margin and deposit | 162,215,690.65 | 154,311,464.02 |
Provision of commission
| Provision of commission | 76,615,789.42 | 68,139,060.51 |
Freight, advertising expenses and otheraccrued expenses
| Freight, advertising expenses and other accrued expenses | 176,844,834.39 | 94,068,852.36 |
Others
| Others | 7,373,857.21 | 21,666,284.07 |
Total
| Total | 443,946,028.46 | 352,543,008.89 |
2) Important other payable with the aging more than 1 year
Unit: yuan
| Item | Closing Balance | Reasons for failure of payment or carryover |
Other description
42. Liabilities held for sales
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other description:
43. Non-current liabilities due within one year
Unit: yuan
| Item | Closing Balance | Beginning balance |
Lease liabilities due within one year
| Lease liabilities due within one year | 216,181,531.82 | 200,505,683.84 |
Total
| Total | 216,181,531.82 | 200,505,683.84 |
Other description:
44. Other current liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance |
Refund payable
| Refund payable | 2,012,198.90 | 2,765,776.85 |
Output tax to be transferred
| Output tax to be transferred | 22,153,201.60 | 20,872,489.62 |
Total
| Total | 24,165,400.50 | 23,638,266.47 |
Increase/decrease of short-term bonds payable:
Unit: yuan
| Name of bond | Book value | Issue date | Maturity of bond | Issue amount | Beginning balance | Current issue | Accrued interest at book value | Amortization of premium and discount | Current repayment | Closing Balance |
Total
| Total | -- | -- | -- |
Other description:
45. Long-term loans
(1) Classification of long-term borrowing
Unit: yuan
| Item | Closing Balance | Beginning balance |
Description of classification of long-term borrowing:
Other descriptions, including interest rate range:
46. Bonds payable
(1) Bonds payable
Unit: yuan
| Item | Closing Balance | Beginning balance |
(2) Increase and decrease of bonds payable (excluding preferred shares, perpetual bonds and otherfinancial instruments classified as financial liabilities)
Unit: yuan
| Name of bond | Book value | Issue date | Maturity of bond | Issue amount | Beginning balance | Current issue | Accrued interest at book value | Amortization of premium and discount | Current repayment | Closing Balance |
Total
| Total | -- | -- | -- |
(3) Description of conditions and time of conversion of convertible corporate bonds
(4) Description of other financial instruments classified as financial liabilitiesBasic information of the outstanding preferred shares, perpetual bonds and other financial instruments at the end of the periodTable of changes in outstanding financial instruments, such as preferred shares, perpetual bonds at the end of the period
Unit: yuan
| Outstanding financial instruments | The beginning of the period | Increase in current period | Decrease in current period | The end of the period | ||||
| Quantity | Book value | Quantity | Book value | Quantity | Book value | Quantity | Book value | |
Description of the basis for the classification of other financial instruments into financial liabilitiesOther description
47. Lease liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance |
Lease payments
| Lease payments | 431,547,562.69 | 415,639,217.32 |
Unrecognized financing expenses
| Unrecognized financing expenses | (49,738,637.60) | (51,810,525.40) |
Total
| Total | 381,808,925.09 | 363,828,691.92 |
Other description
48. Long-term payable
Unit: yuan
| Item | Closing Balance | Beginning balance |
(1) Long-term payables listed by nature
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other description:
(2) Special accounts payable
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance | Causes |
Other description:
49. Long-term payroll payable
(1) Table of long-term payroll payable
Unit: yuan
| Item | Closing Balance | Beginning balance |
(2) Changes in defined benefit plan
Present value of defined benefit plan obligations:
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Planned assets:
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Net liabilities (net assets) of defined benefit plan
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Description of the content of defined benefit plan and its related risks, impact on the Company's future cash flow, time anduncertainty:
Description of significant actuarial assumptions and sensitivity analysis results of defined benefit plan:
Other description:
50. Estimated liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance | Causes |
Other descriptions, including relevant important assumptions and estimation descriptions of important estimated liabilities:
51. Deferred income
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance | Causes |
Governmentsubsidies
| Government subsidies | 94,921,260.87 | 38,902,446.91 | 24,198,305.96 | 109,625,401.82 | Government subsidies related to assets |
Total
| Total | 94,921,260.87 | 38,902,446.91 | 24,198,305.96 | 109,625,401.82 | -- |
Projects involving government subsidies:
Unit: yuan
| Liability item | Beginning balance | Amount of additional subsidy in current period | Amount included in current non-revenue | Amount included in other income in current period | Amount offsetting the cost in the current period | Other changes | Closing Balance | Asset/income related |
Subsidy of
| Subsidy of | 277,085.67 | 58,333.00 | 218,752.67 | Asset |
| 2012 Provincial high-tech industry development special project - Winner Medical (Huanggang) | related |
Subsidy of2014 Hubeiprovincialscience andtechnologysupport planproject (thesecondbatch) -WinnerMedical(Huanggang)
| Subsidy of 2014 Hubei provincial science and technology support plan project (the second batch) - Winner Medical (Huanggang) | 712,500.00 | 150,000.00 | 562,500.00 | Asset related |
Subsidy forHuanggangChibiAvenuedemolitioncompanyplanningchange -WinnerMedical(Huanggang)
| Subsidy for Huanggang Chibi Avenue demolition company planning change - Winner Medical (Huanggang) | 2,482,664.69 | 105,645.31 | 2,377,019.38 | Asset related |
TechnologyCenter R &D projectsubsidy -theCompany
| Technology Center R & D project subsidy - the Company | 1,055,170.73 | 299,841.84 | 755,328.89 | Asset related |
Newmedicalbandagefactory landacquisitionland useright grantfeeremission ofWinnercompany inPailouTown,Jingmen -WinnerMedical(Jingmen)
| New medical bandage factory land acquisition land use right grant fee remission of Winner company in Pailou Town, Jingmen - Winner Medical (Jingmen) | 629,970.00 | 20,320.00 | 609,650.00 | Asset related |
Subsidyfunds formunicipalgovernmentprojectinfrastructur
| Subsidy funds for municipal government project infrastructur | 9,270,412.50 | 413,550.00 | 8,856,862.50 | Asset related |
econstruction- WinnerMedical(Chongyang)
Landsubsidiesand sewagetreatmentsubsidies -WinnerMedical(Jiayu)
| Land subsidies and sewage treatment subsidies - Winner Medical (Jiayu) | 10,209,500.01 | 406,833.34 | 9,802,666.67 | Asset related |
2015Huanggangprovincialbudgetinvestmentplan,HuanggangWinner’scottonspunlacednon-woven(Line 8)extensionprojectsubsidy -WinnerMedical(Huanggang)
| 2015 Huanggang provincial budget investment plan, Huanggang Winner’s cotton spunlaced non-woven (Line 8) extension project subsidy - Winner Medical (Huanggang) | 285,000.00 | 60,000.00 | 225,000.00 | Asset related |
2014Huanggangurbanindustrialdevelopment specialfundsubsidy -WinnerMedical(Huanggang)
| 2014 Huanggang urban industrial development special fund subsidy - Winner Medical (Huanggang) | 118,750.00 | 25,000.00 | 93,750.00 | Asset related |
2014 Hubeiprovincialbudgetindustrialfixed assetsinvestmentplan, 10billiongauze padexpansionprojectsubsidy -WinnerMedical(Tianmen)
| 2014 Hubei provincial budget industrial fixed assets investment plan, 10 billion gauze pad expansion project subsidy - Winner Medical (Tianmen) | 34,615.30 | 34,615.28 | 0.02 | Asset related |
2015Tianmenindustrialenterprisekey
| 2015 Tianmen industrial enterprise key | 262,481.00 | 50,004.00 | 212,477.00 | Asset related |
technicaltransformation andexpansionprojectsubsidy -WinnerMedical(Tianmen)
2015Huanggangurbanindustrialdevelopment specialfund(Construction of Weipin2#productionline) -HuanggangWinner
| 2015 Huanggang urban industrial development special fund (Construction of Weipin 2# production line) - Huanggang Winner | 210,000.00 | 40,000.00 | 170,000.00 | Asset related |
Automatictransformation ofsurgicalconsumables productionline - theCompany
| Automatic transformation of surgical consumables production line - the Company | 1,209,000.00 | 186,000.00 | 1,023,000.00 | Asset related |
2016Tianmenindustrialkeytechnicaltransformation andexpansionprojectreward -WinnerMedical(Tianmen)
| 2016 Tianmen industrial key technical transformation and expansion project reward - Winner Medical (Tianmen) | 312,485.00 | 50,004.00 | 262,481.00 | Asset related |
2017increaseproductionandexpansionequipmentsubsidy forTianmenprocessing& trade -WinnerMedical(Tianmen)
| 2017 increase production and expansion equipment subsidy for Tianmen processing & trade - Winner Medical (Tianmen) | 100,000.00 | 15,000.00 | 85,000.00 | Asset related |
Yichang gasboilersubsidy -WinnerMedical(Yichang)
| Yichang gas boiler subsidy - Winner Medical (Yichang) | 100,000.09 | 15,999.96 | 84,000.13 | Asset related |
Secondbatch of
| Second batch of | 1,307,339.54 | 209,174.28 | 1,098,165.26 | Asset related |
traditionalindustrytransformation subsidyin 2017 -WinnerMedical(Huanggang)
2017 cottonspunlacednon-wovenfabricproject withtheproductionof 15,000tons -WinnerMedical(Tianmen)
| 2017 cotton spunlaced non-woven fabric project with the production of 15,000 tons - Winner Medical (Tianmen) | 475,471.79 | 79,245.24 | 396,226.55 | Asset related |
Keytechnicalreform andexpansionproject(cottonspunlungewipesproductionline project)- TianmenWinner
| Key technical reform and expansion project (cotton spunlunge wipes production line project) - Tianmen Winner | 702,703.00 | 108,108.00 | 594,595.00 | Asset related |
Productionline projectwith anannualoutput of120 millionbales ofcotton fabricin 2017 -WinnerMedical(Tianmen)
| Production line project with an annual output of 120 million bales of cotton fabric in 2017 - Winner Medical (Tianmen) | 706,442.28 | 107,307.72 | 599,134.56 | Asset related |
Secondbatch ofspecialfunds forthetransformation andupgradingoftraditionalindustries -WinnerMedical(Yichang)
| Second batch of special funds for the transformation and upgrading of traditional industries - Winner Medical (Yichang) | 181,250.08 | 24,999.96 | 156,250.12 | Asset related |
Technicalinnovationsubsidy forthePurcottonPhase II
| Technical innovation subsidy for the Purcotton Phase II | 4,491,886.85 | 166,366.20 | 4,325,520.65 | Asset related |
ExpansionProject -WinnerMedical(Jingmen)
Keytechnicalreform andexpansionproject(pure cottonspunlacenon-wovenfabricproductionprojectPhase II) -TianmenWinner
| Key technical reform and expansion project (pure cotton spunlace non-woven fabric production project Phase II) - Tianmen Winner | 841,666.71 | 99,999.96 | 741,666.75 | Asset related |
20180311Subsidiesfor research,science andinnovationon thetechnologyofthermo-responsiveself-curingwoundregenerationand repairmaterials -theCompany
| 20180311 Subsidies for research, science and innovation on the technology of thermo-responsive self-curing wound regeneration and repair materials - the Company | 1,034,412.37 | 241,698.00 | 792,714.37 | Asset related |
2018provincialtraditionalindustrytransformation andupgradingspecialfunds forthe secondbatch ofliquidationblock fundsubsidies -WinnerMedical(Jiayu)
| 2018 provincial traditional industry transformation and upgrading special funds for the second batch of liquidation block fund subsidies - Winner Medical (Jiayu) | 1,391,904.76 | 52,857.14 | 1,339,047.62 | Asset related |
Subsidiesfor firstbatch oftechnologicaltransformation award ofindustrialenterprisesin 2018 -WinnerMedical
| Subsidies for first batch of technological transformation award of industrial enterprises in 2018 - Winner Medical | 796,532.20 | 106,157.12 | 690,375.08 | Asset related |
(Chongyang)
Provincialtraditionalindustrytransformation andupgradingspecialfunds forthe firstbatch ofblock fundsallocationplan inTianmenCity in 2019- WinnerMedical(Tianmen)
| Provincial traditional industry transformation and upgrading special funds for the first batch of block funds allocation plan in Tianmen City in 2019 - Winner Medical (Tianmen) | 1,160,689.66 | 136,551.72 | 1,024,137.94 | Asset related |
2018 urbantechnicaltransformation fund ofHuanggangCity -WinnerMedical(Huanggang)
| 2018 urban technical transformation fund of Huanggang City - Winner Medical (Huanggang) | 416,666.70 | 55,555.52 | 361,111.18 | Asset related |
First batchoftraditionalsubsidies in2019 -WinnerMedical(Huanggang)
| First batch of traditional subsidies in 2019 - Winner Medical (Huanggang) | 1,089,000.00 | 121,000.00 | 968,000.00 | Asset related |
2019 districttechnicalimprovement subsidy -WinnerMedical(Jingmen)
| 2019 district technical improvement subsidy - Winner Medical (Jingmen) | 378,461.60 | 29,112.36 | 349,349.24 | Asset related |
2020technicaltransformation projectof ShenzhenCOVID-19epidemicpreventionand controlkey materialproductionenterprises -theCompany
| 2020 technical transformation project of Shenzhen COVID-19 epidemic prevention and control key material production enterprises - the Company | 19,500,000.00 | 2,000,000.00 | 17,500,000.00 | Asset related |
MunicipalEconomicandInformationBureau on
| Municipal Economic and Information Bureau on | 1,189,565.22 | 751,296.00 | 438,269.22 | Asset related |
the issuanceofemergencymaterialsupportsystemconstructiontechnicaltransformation specialsubsidy -WinnerMedical(Huanggang)
Centralgovernment's budgetspecial fundformunicipalfinancialmaskextensionenergy -WinnerMedical(Huanggang)
| Central government's budget special fund for municipal financial mask extension energy - Winner Medical (Huanggang) | 282,352.94 | 225,882.36 | 56,470.58 | Asset related |
Productionsubsidy forCOVID-19epidemicpreventionmaterials in2020 -HuanggangWinner
| Production subsidy for COVID-19 epidemic prevention materials in 2020 - Huanggang Winner | 10,260,000.00 | 6,840,000.00 | 3,420,000.00 | Asset related |
2019 districttechnicalimprovement subsidy -WinnerMedical(Jingmen)
| 2019 district technical improvement subsidy - Winner Medical (Jingmen) | 387,636.35 | 29,818.20 | 357,818.15 | Asset related |
2019 specialfund projectof thetransformation andupgradingoftraditionalindustries -WinnerMedical(Jiayu)
| 2019 special fund project of the transformation and upgrading of traditional industries - Winner Medical (Jiayu) | 723,214.29 | 26,785.69 | 696,428.60 | Asset related |
Surgicalgownproductionline projectsubsidy -ChongyangWinner
| Surgical gown production line project subsidy - Chongyang Winner | 3,711,711.71 | 432,432.44 | 3,279,279.27 | Asset related |
Funds
| Funds | 5,543,025.21 | 563,697.48 | 4,979,327.73 | Asset |
| subsidy for purchasing epidemic prevention equipment in key enterprises of “Three Batches” - Chongyang Winner | related |
Project onimplementing thetechnicalreformationpolicy of“Zero Land”in Wuhanand themunicipalindustrialinvestmentandtechnicaltransformation specialfund projectof Bureaufor Science,TechnologyandEconomicInformationTechnologyof XinzhouDistrict -HubeiWinner
| Project on implementing the technical reformation policy of “Zero Land” in Wuhan and the municipal industrial investment and technical transformation special fund project of Bureau for Science, Technology and Economic Information Technology of Xinzhou District - Hubei Winner | 7,708,855.65 | 582,288.74 | 7,126,566.91 | Asset related |
Subsidy ofCOVID-19epidemicpreventionand controlmaterialsproductionenterprisefor capacityexpansion &technicalupgradingproject -HubeiWinner
| Subsidy of COVID-19 epidemic prevention and control materials production enterprise for capacity expansion & technical upgrading project - Hubei Winner | 3,370,836.97 | 591,720.31 | 2,779,116.66 | Asset related |
Equipmentpurchasesubsidy forkeyenterprise"ThreeBatches” atprovinciallevels -WinnerMedical(Huanggang
| Equipment purchase subsidy for key enterprise "Three Batches” at provincial levels - Winner Medical (Huanggang | 9,370,000.00 | 6,847,307.73 | 2,522,692.27 | Asset related |
) (1*)
2020Specialfunds forthehigh-qualitydevelopment ofmanufacturing - WinnerMedical(Huanggang) (2*)
| 2020 Special funds for the high-quality development of manufacturing - Winner Medical (Huanggang) (2*) | 3,000,000.00 | 308,411.22 | 2,691,588.78 | Asset related |
2021 urbantechnicaltransformation funds -WinnerMedical(Huanggang)
| 2021 urban technical transformation funds - Winner Medical (Huanggang) | 1,050,000.00 | 9,375.00 | 1,040,625.00 | Asset related |
2021Equipmentsubsidiesduring theCOVID-19pandemic -WinnerMedical(Jingmen)(3*)
| 2021 Equipment subsidies during the COVID-19 pandemic - Winner Medical (Jingmen) (3*) | 6,800,000.00 | 1,275,000.00 | 5,525,000.00 | Asset related |
2020Provincialspecialfunds forthehigh-qualitydevelopment ofmanufacturing - WinnerMedical(Jiayu) (4*)
| 2020 Provincial special funds for the high-quality development of manufacturing - Winner Medical (Jiayu) (4*) | 1,000,000.00 | 96,491.22 | 903,508.78 | Asset related |
Annualequipmentinvestmentsubsidies(SpunlacePhase III,stereoscopicwarehouse)- WinnerMedical(Tianmen)(5*)
| Annual equipment investment subsidies (Spunlace Phase III, stereoscopic warehouse) - Winner Medical (Tianmen) (5*) | 15,000,000.00 | 15,000,000.00 | Asset related |
1 millionlevelprovincialfund for thedevelopment ofmanufacturing - WinnerMedical(Wuhan)
| 1 million level provincial fund for the development of manufacturing - Winner Medical (Wuhan) | 1,000,000.00 | 104,305.17 | 895,694.83 | Asset related |
(6*)
Subsidies toincreaseproductioncapacity oftheemergencysuppliessupportsystem fromthe centralgovernment- WinnerMedical(Wuhan)(7*)
| Subsidies to increase production capacity of the emergency supplies support system from the central government - Winner Medical (Wuhan) (7*) | 1,600,000.00 | 41,139.46 | 1,558,860.54 | Asset related |
Others
| Others | 82,446.91 | 3,074.99 | 79,371.92 | Asset related |
Total
| Total | 94,921,260.87 | 38,902,446.91 | 24,198,305.96 | 109,625,401.82 |
Other description:
Projects involving government subsidies:
1* According to the Notice of the Department of Economy and Information Technology of Hubei Province onDistributing the Subsidiary Fund Distribution Plan for Purchase of Equipment in Key Enterprises of “ThreeBatches” (EJXGHH [2020] No. 249), Winner Medical (Huanggang) received the subsidy of RMB 9.37 million inApril 2021 for the purchase of mask machines. Since the equipment was consolidated in March 2020 and April2020 respectively and the amortization period is 2 years, the amortization will be carried out within 12 monthsand 13 months of the remaining life of the asset from April 2021. As of December 31, 2021, the balance ofdeferred income is RMB 2,522,692.27, and the amount amortized into the profit and loss of the current period isRMB 6,847,307.73.2* According to the Notice of the Department of Economy and Information Technology of Hubei Province onAllocation of Special Funds for the High-Quality Development of Provincial Manufacturing in 2020 (EJXGHH[2020] No. 219) and the Detailed rules for the Implementation of Special Fund Management for theTransformation and Upgrading of Traditional Industries of Huanggang City (HCQ [2018] No. 1), WinnerMedical (Huanggang) received the subsidy of RMB 3 million in December 2021 for the purchase of a high-speedfolder. Since the equipment was capitalized in December 2019, the amortization will be carried out within 107months of the remaining life of the asset starting from February 2021. As of December 31, 2021, the balance ofdeferred income is RMB 2,691,588.78, and the amount amortized into the profit and loss of the current period isRMB 308,411.22.3* According to the Notice of the Department of Economy and Information Technology of Hubei Province onDistributing the Subsidiary Fund Distribution Plan for Purchase of Equipment in Key Enterprises of “ThreeBatches” (EJXGHH [2020] No. 249), 9 assets purchased by Winner Medical (Jingmen) have been consolidatedand depreciated within their respective service life. Since Jingmen Winner received the subsidy of RMB 6.8million in July 2020, it is amortized within the remaining service life of the corresponding assets respectively. Asof December 31, 2021, the balance of deferred income is RMB 5,525,000.00, and the amount amortized into theprofit and loss of the current period is RMB 1,275,000.00.4* According to the Notice of the Department of Economy and Information Technology of Hubei Province onAllocation of Special Funds for the High-Quality Development of Provincial Manufacturing in 2020 (EJXGHH[2020] No. 219), Winner Medical (Jiayu) received the provincial traditional industry transformation andupgrading special funds of RMB 1 million for purchase subsidy of 18 equipments. The assets involved in thisproject were capitalized in June 2020 and amortized according to the remaining life 9.5 years of the assets. As ofDecember 31, 2021, the balance of deferred income is RMB 903,508.78, and the amount amortized into the profitand loss of the current period is RMB 96,491.22.5* According to the Letter of Tianmen Bureau of Economy and Information Technology on Allocating Subsidyfunds for the Construction of Central Emergency Supplies Support System in 2020, Winner Medical (Tianmen)
obtained the annual equipment investment subsidies of RMB 4.67 million and RMB 10.33 million (SpunlacePhase III and stereoscopic warehouse) in February and May 2021 respectively, totaling RMB 15 million. Asrelated assets have not been consolidated, they have not been amortized.6* According to the Notice of the Department of Economy and Information Technology of Hubei Province onPrinting and Distributing the Guide on Application for Special Funds for the High-Quality Development ofProvincial Manufacturing in 2021 (EJXGH [2021] No. 88), Winner Medical (Wuhan) received the subsidy ofRMB 1 million in May 2021 for the purchase of 17 assets. As the assets involved have been consolidated, they areamortized within the remaining service life of the corresponding assets respectively. As of December 31, 2021, thebalance of deferred income is RMB 895,694.83, and the amount amortized into the profit and loss of the currentperiod is RMB 104,305.17.7* According to the Notice of the Department of Finance of Hubei Province on Application for Subsidies for theConstruction of Central Emergency Supplies Support System (ECCF 〔2020〕 No. 32), Winner Medical (Wuhan)received a subsidy of RMB 1.6 million for the production line of epidemic prevention materials in October 2021for purchase of 21 assets. As the assets involved have been consolidated, they are amortized within the remainingservice life of the corresponding assets respectively. As of December 31, 2021, the balance of deferred income isRMB 1,558,860.5, and the amount amortized into the profit and loss of the current period is RMB 41,139.46.
52. Other non-current liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other description:
53. Capital stock
Unit: yuan
| Beginning balance | Increase/decrease (+, -) | Closing Balance | |||||
| New issue of shares | Share donation | Share capital increase from reserved funds | Others | Subtotal | |||
Total amountof shares
| Total amount of shares | 426,492,308.00 | 426,492,308.00 |
Other description:
54. Other equity instruments
(1) Basic information of the outstanding preferred shares, perpetual bonds and other financialinstruments at the end of the period
(2) Table of changes in outstanding financial instruments, such as preferred shares, perpetual bonds atthe end of the period
Unit: yuan
| Outstanding financial instruments | The beginning of the period | Increase in current period | Decrease in current period | The end of the period | ||||
| Quantity | Book value | Quantity | Book value | Quantity | Book value | Quantity | Book value | |
The increase and decrease of other equity instruments in current period, the reasons for the change, and the basis of relevantaccounting treatment:
Other description:
55. Additional paid-in capital
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance |
Capital premium (capitalstock premium)
| Capital premium (capital stock premium) | 4,457,762,555.30 | 4,457,762,555.30 |
Other capital surplus
| Other capital surplus | 23,947,427.94 | 67,911,113.57 | 91,858,541.51 |
| Total | 4,481,709,983.24 | 67,911,113.57 | 4,549,621,096.81 |
Other description, including current increase/decrease and change reasons:
56. Treasury stock
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance |
Treasury stock
| Treasury stock | 257,992,366.68 | 257,992,366.68 |
Total
| Total | 257,992,366.68 | 257,992,366.68 |
Other description, including current increase/decrease and change reasons:
57. Other comprehensive income
Unit: yuan
| Item | Beginning balance | Amount incurred in current period | Closing Balance | |||||
| Amount before current income tax | Less: amount included in other comprehensive income in previous period transferred into profit and loss in current period | Less: amount included in other comprehensive income in previous period transferred into retained income in current period | Less: Income tax expenses | Attributable to the parent company after tax | Attributable to minority shareholders after tax | |||
II. Other comprehensive incomethat will be reclassified into profitand loss
| II. Other comprehensive income that will be reclassified into profit and loss | (1,111,035.08) | (830,700.50) | (445,900.35) | (384,800.15) | (1,556,935.43) |
Foreign currency reportingtranslation discrepancy
| Foreign currency reporting translation discrepancy | (1,111,035.08) | (830,700.50) | (445,900.35) | (384,800.15) | (1,556,935.43) |
Total other comprehensive income
| Total other comprehensive income | (1,111,035.08) | (830,700.50) | (445,900.35) | (384,800.15) | (1,556,935.43) |
Other explanations, including the adjustment of the effective part of the cash flow hedging gains and losses transferred to the initialrecognized amount of the hedged item:
58. Special reserve
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance |
Other description, including current increase/decrease and change reasons:
59. Surplus reserve
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance |
Statutory surplusreserves
| Statutory surplus reserves | 420,212,778.13 | 420,212,778.13 |
Total
| Total | 420,212,778.13 | 420,212,778.13 |
Description of surplus reserves, including current increase/decrease and change reasons:
60. Undistributed profit
Unit: yuan
| Item | Current period | Prior period |
Undistributed profit at the end of previous periodbefore adjustment
| Undistributed profit at the end of previous period before adjustment | 5,126,630,011.14 | 1,718,075,177.67 |
Total undistributed profits at the beginning of theadjustment period (+ for increase and - fordecrease)
| Total undistributed profits at the beginning of the adjustment period (+ for increase and - for decrease) | (60,128,638.03) |
Undistributed profits at the beginning of the periodafter adjustment
| Undistributed profits at the beginning of the period after adjustment | 5,066,501,373.11 | 1,718,075,177.67 |
Plus: Net profits attributable to the owners ofparent company in the current period
| Plus: Net profits attributable to the owners of parent company in the current period | 1,239,320,067.26 | 3,810,412,504.40 |
Less: withdrawal legal surplus
| Less: withdrawal legal surplus | 303,357,670.93 |
Common stock dividends payable
| Common stock dividends payable | 767,686,154.40 | 98,500,000.00 |
Undistributed profits at the end of the period
| Undistributed profits at the end of the period | 5,538,135,285.97 | 5,126,630,011.14 |
Details of undistributed profits at the beginning of the adjustment period:
1) Due to retroactive adjustment of Accounting Standards for Business Enterprises and relevant new regulations, 0.00 yuan of the
undistributed profit at the beginning of the period was affected.
2) Due to the change of accounting policy, -60,128,638.03 yuan of the undistributed profit at the beginning of the period wasaffected.
3) Due to the correction of major accounting errors, 0.00 yuan of the undistributed profit at the beginning of the period wasaffected.
4) Due to the change of consolidation scope caused by the same control, 0.00 yuan of the undistributed profit at the beginning ofthe period was affected.
5) 0.00 yuan of the undistributed profit at the beginning of the period was affected by the total amount of other adjustments
61. Revenue and cost
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period | ||
| Income | Cost | Income | Cost | |
Main business
| Main business | 7,976,221,600.59 | 3,995,298,393.86 | 12,437,774,260.04 | 5,013,032,168.77 |
Other businesses
| Other businesses | 61,199,212.32 | 32,948,252.31 | 96,171,686.59 | 57,390,132.99 |
Total
| Total | 8,037,420,812.91 | 4,028,246,646.17 | 12,533,945,946.63 | 5,070,422,301.76 |
Whether the net profit deducting non-recurring profit and loss after audit is negative
□Yes √No
Income related information:
Unit: yuan
| Contract classification | Medical consumables | Healthy consumer goods | Total |
Type of goods
| Type of goods |
Including:
| Including: |
Main business
| Main business | 3,922,006,868.38 | 4,054,214,732.21 | 7,976,221,600.59 |
Other businesses
| Other businesses | 61,199,212.32 | 61,199,212.32 |
Classified by operatingarea
| Classified by operating area |
Including:
| Including: |
Domestic sales
| Domestic sales | 2,289,563,590.31 | 4,054,214,732.21 | 6,343,778,322.52 |
Overseas sales
| Overseas sales | 1,693,642,490.39 | 1,693,642,490.39 |
Market or customer type
| Market or customer type |
Including:
| Including: |
| Contract type |
Including:
| Including: |
Classified by commoditytransfer time
| Classified by commodity transfer time |
Including:
| Including: |
Classified by contractperiod
| Classified by contract period |
Including:
| Including: |
Classified by saleschannels
| Classified by sales channels |
Including:
| Including: |
Total
| Total |
Information related to performance obligations:
NoneInformation related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations signed but not yet performed or completed at the end of thisreporting period is RMB 126,034,200.03, of which RMB 126,034,200.03 is expected to be recognized as income in 2022.Other description
62. Taxes and surcharges
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Urban maintenance and construction tax
| Urban maintenance and construction tax | 26,709,162.04 | 59,435,664.56 |
Education surcharge
| Education surcharge | 12,172,848.90 | 26,320,395.32 |
Housing property tax
| Housing property tax | 8,202,839.28 | 5,926,418.32 |
Land use tax
| Land use tax | 5,356,635.09 | 2,027,167.21 |
Vehicle and vessel use tax
| Vehicle and vessel use tax | 15,402.27 | 14,323.60 |
Stamp duty
| Stamp duty | 4,334,626.82 | 5,893,961.68 |
Surcharge for local education
| Surcharge for local education | 8,372,544.74 | 16,589,229.97 |
Environmental protection tax
| Environmental protection tax | 140,942.02 | 221,322.94 |
Others
| Others | 85,050.00 | 140,737.75 |
Total
| Total | 65,390,051.16 | 116,569,221.35 |
Other description:
63. Selling and marketing
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Employee compensation
| Employee compensation | 535,320,245.23 | 397,499,114.63 |
Travel expenses
| Travel expenses | 14,589,718.50 | 8,983,106.15 |
Office communication costs
| Office communication costs | 12,577,824.48 | 15,438,257.66 |
Sales commission
| Sales commission | 222,716,753.83 | 285,232,187.12 |
Insurance premiums
| Insurance premiums | 5,302,498.97 | 7,140,391.33 |
Depreciation and amortization
| Depreciation and amortization | 52,193,907.26 | 92,468,599.20 |
Advertising and promotion expenses
| Advertising and promotion expenses | 692,445,882.66 | 372,944,041.90 |
Lease and property management fees
| Lease and property management fees | 152,728,211.40 | 294,980,913.63 |
Material consumption
| Material consumption | 5,212,855.45 | 11,464,378.72 |
| Water/electricity fee | 11,632,395.90 | 9,181,005.97 |
Service fees
| Service fees | 6,522,845.03 | 9,840,472.61 |
Others
| Others | 86,048,976.09 | 69,991,443.57 |
Depreciation of Right-of-use assets
| Depreciation of Right-of-use assets | 191,875,674.76 |
Total
| Total | 1,989,167,789.56 | 1,575,163,912.49 |
Other description:
64. General and administrative
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Employee compensation
| Employee compensation | 298,562,603.50 | 213,994,465.12 |
Depreciation and amortization charge
| Depreciation and amortization charge | 35,794,417.00 | 40,246,232.86 |
Travel expenses
| Travel expenses | 4,380,791.71 | 3,925,947.37 |
Office allowance
| Office allowance | 4,475,089.91 | 7,898,820.35 |
Consultant and intermediary service fees
| Consultant and intermediary service fees | 14,590,734.04 | 31,718,741.96 |
Water/electricity fee
| Water/electricity fee | 9,396,543.04 | 4,996,195.22 |
Communication expense
| Communication expense | 18,015,557.80 | 13,327,325.02 |
Maintenance and debugging expenses
| Maintenance and debugging expenses | 23,082,184.26 | 41,219,106.78 |
Material consumption
| Material consumption | 7,873,344.53 | 28,768,975.44 |
IPO cost
| IPO cost | 15,551,190.73 |
Depreciation of Right-of-use assets
| Depreciation of Right-of-use assets | 18,149,384.98 |
Others
| Others | 20,069,298.13 | 35,318,445.37 |
Total
| Total | 454,389,948.90 | 436,965,446.22 |
Other description:
65. Research and development
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Employee compensation
| Employee compensation | 126,551,089.29 | 94,315,577.68 |
Depreciation and amortization
| Depreciation and amortization | 15,510,211.39 | 23,962,990.53 |
Material
| Material | 119,134,692.81 | 229,378,046.60 |
Other miscellaneous expenses
| Other miscellaneous expenses | 36,966,372.67 | 63,726,558.99 |
Total
| Total | 298,162,366.16 | 411,383,173.80 |
Other description:
66. Financial expenses
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Interest expenses
| Interest expenses | 434,844.98 | 3,614,778.86 |
Interest expenses of lease liabilities
| Interest expenses of lease liabilities | 29,553,772.26 |
Less: Interest revenue
| Less: Interest revenue | 137,186,581.16 | 23,340,834.75 |
Less: Financial discount interest
| Less: Financial discount interest | 797,400.00 | 2,810,700.00 |
Exchange gain or loss
| Exchange gain or loss | (607,837.15) | 239,426,448.65 |
Others
| Others | 1,103,839.96 | 1,751,275.56 |
Total
| Total | (107,499,361.11) | 218,640,968.32 |
Other description:
67. Other incomes
Unit: yuan
| Other sources of income | Amount incurred in current period | Amount incurred in previous period |
| Government subsidies | 102,353,195.81 | 70,291,282.76 |
Total
| Total | 102,353,195.81 | 70,291,282.76 |
68. Investment income
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Long-term equity investment gains measuredby employing the equity method
| Long-term equity investment gains measured by employing the equity method | 3,525,570.83 | 4,565,754.26 |
Investment income from purchasing financialproducts
| Investment income from purchasing financial products | 15,019,953.42 | 17,019,368.90 |
Investment income from disposal of tradablefinancial assets
| Investment income from disposal of tradable financial assets | 84,692,023.73 |
Total
| Total | 103,237,547.98 | 21,585,123.16 |
Other description:
69. Net exposure hedging
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Other description:
70. Income from changes in fair value
Unit: yuan
| Sources of gains from fair value change | Amount incurred in current period | Amount incurred in previous period |
Forward foreign exchange contract
| Forward foreign exchange contract | 6,334,756.86 | 802,688.73 |
Bank financial products and trust products
| Bank financial products and trust products | 52,139,711.50 | 10,375,900.71 |
Total
| Total | 58,474,468.36 | 11,178,589.44 |
Other description:
71. Credit impairment Loss
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Loss on bad debts of other receivables
| Loss on bad debts of other receivables | (3,968,251.81) | (13,426,561.35) |
Loss on bad debts of accounts receivable
| Loss on bad debts of accounts receivable | 3,394,251.24 | (22,515,131.48) |
Total
| Total | (574,000.57) | (35,941,692.83) |
Other description:
72. Assets impairment losses
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
II. Inventory falling price loss andimpairment loss of contract performancecosts
| II. Inventory falling price loss and impairment loss of contract performance costs | (92,740,339.23) | (141,565,283.29) |
V. Impairment loss of fixed assets
| V. Impairment loss of fixed assets | (7,924,893.69) | (97,161,058.39) |
VII. Impairment loss of construction inprogress
| VII. Impairment loss of construction in progress | (1,460,407.84) |
Total
| Total | (100,665,232.92) | (240,186,749.52) |
Other description:
73. Gains from asset disposal
Unit: yuan
| Source of income from disposal of assets | Amount incurred in current period | Amount incurred in previous period |
| Gains from disposal of non-current assets | 3,275,886.08 | 15,447.79 |
Including: Gains on disposal of fixedassets
| Including: Gains on disposal of fixed assets | 28,225.52 | 15,447.79 |
Gains from disposal of right-of-useassets
| Gains from disposal of right-of-use assets | 3,247,660.56 |
Loss on disposal of non-current assets
| Loss on disposal of non-current assets | (25,437.81) | (5,681.93) |
Including: Loss on disposal of fixed assets
| Including: Loss on disposal of fixed assets | (25,437.81) | (5,681.93) |
Total
| Total | 3,250,448.27 | 9,765.86 |
74. Non-revenue
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period | Amounts recorded in the non-recurring gains and losses of the current period |
Government subsidies
| Government subsidies | 1,982,375.49 | 1,490,813.60 | 1,982,375.49 |
Non-current assets scrap gains
| Non-current assets scrap gains | 1,196,285.18 | 632,816.66 | 1,196,285.18 |
Income from compensation orfines
| Income from compensation or fines | 1,348,234.56 | 553,853.86 | 1,348,234.56 |
Others
| Others | 1,513,123.84 | 1,550,023.44 | 1,513,123.84 |
Total
| Total | 6,040,019.07 | 4,227,507.56 | 6,040,019.07 |
Government subsidies recorded in current profit and loss
Unit: yuan
| Subsidized project | Granting subject | Granting reason | Type of nature | Whether the subsidy affects the profit and loss of current year | Special subsidy or not | Amount incurred in current period | Amount incurred in previous period | Asset/income related |
2018 pilotreward fundsofintegrationof ITapplicationwithindustrialization -JingmenWinner
| 2018 pilot reward funds of integration of IT application with industrialization - Jingmen Winner | Reward | No | No | 100,000.00 | Income related |
2019invisiblechampionenterpriseaward funds- JingmenWinner
| 2019 invisible champion enterprise award funds - Jingmen Winner | Reward | No | No | 200,000.00 | Income related |
Evaluationreward ofenterpriseintegrationof ITapplicationwithindustrialization -TianmenWinner
| Evaluation reward of enterprise integration of IT application with industrialization -Tianmen Winner | Reward | No | No | 111,400.00 | Income related |
Ten milliontax projectreward -
| Ten million tax project reward - | Reward | No | No | 300,000.00 | Income related |
TianmenWinner
Fiscal TaxContributionAward forIndustrialEnterprises(2019) -ChongyangWinner
| Fiscal Tax Contribution Award for Industrial Enterprises (2019) - Chongyang Winner | Reward | No | No | 100,000.00 | Income related |
Enterprisetransformation andupgradingaward -ChongyangWinner
| Enterprise transformation and upgrading award - Chongyang Winner | Reward | No | No | 100,000.00 | Income related |
Socialinsurancesubsidy ofFinanceBureau -ChongyangWinner
| Social insurance subsidy of Finance Bureau - Chongyang Winner | Subsidy | No | No | 267,213.60 | Income related |
Condolencepayment ofHuanggangCOVID-19EpidemicPreventionand ControlHeadquarters- HuanggangWinner
| Condolence payment of Huanggang COVID-19 Epidemic Prevention and Control Headquarters - Huanggang Winner | Subsidy | No | No | 100,000.00 | Income related |
Others
| Others | No | No | 5,075.49 | 212,200.00 | Income related |
Rewardsfromgovernmenton foreignexchangethroughexports in2020 -WinnerMedical(Chongyang)
| Rewards from government on foreign exchange through exports in 2020 - Winner Medical (Chongyang) | Reward | No | No | 180,000.00 | Income related |
TaxContributionAward forIndustrialEnterprises -ChongyangWinner
| Tax Contribution Award for Industrial Enterprises - Chongyang Winner | Reward | No | No | 600,000.00 | Income related |
MayorQualityAward 2020of LonghuaDistrictreceived byICBC -WinnerMedical
| Mayor Quality Award 2020 of Longhua District received by ICBC - Winner Medical | Reward | No | No | 1,000,000.00 | Income related |
Awards on
| Awards on | Reward | No | No | 197,300.00 | Income |
| opening up of foreign trade enterprises from the Municipal Commerce Bureau - Winner Medical (Huanggang) | related |
Total
| Total | 1,982,375.49 | 1,490,813.60 |
Other description:
75. Non-operating expenses
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period | Amounts recorded in the non-recurring gains and losses of the current period |
External donations
| External donations | 4,497,184.74 | 2,303,609.26 | 4,497,184.74 |
Loss on damage and scrap ofnon-current assets
| Loss on damage and scrap of non-current assets | 13,527,120.74 | 26,557,319.27 | 13,527,120.74 |
Including: Loss on scrap offixed assets
| Including: Loss on scrap of fixed assets | 13,527,120.74 | 26,557,319.27 | 13,527,120.74 |
Others
| Others | 895,001.31 | 4,644,896.54 | 895,001.31 |
Total
| Total | 18,919,306.79 | 33,505,825.07 | 18,919,306.79 |
Other description:
76. Income tax expenses
(1) Income tax expenses table
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Current income tax expenses
| Current income tax expenses | 196,937,865.17 | 740,992,371.76 |
Deferred income tax expenses
| Deferred income tax expenses | 21,378,341.19 | (61,400,866.60) |
Adjustment of the previous annual incometax amount in the current period
| Adjustment of the previous annual income tax amount in the current period | 6,999,437.58 | 318,358.65 |
Total
| Total | 225,315,643.94 | 679,909,863.81 |
(2) Accounting profit and income tax expense adjustment process
Unit: yuan
| Item | Amount incurred in current period |
Total profit
| Total profit | 1,462,760,511.28 |
Income tax expenses calculated at the appropriate/applicable taxrate
| Income tax expenses calculated at the appropriate/applicable tax rate | 219,414,076.69 |
Impact of different tax rates applied on subsidiaries
| Impact of different tax rates applied on subsidiaries | 794,428.59 |
Impact of income tax before adjustment
| Impact of income tax before adjustment | 6,999,437.58 |
Impact of non-deductible costs, expenses and losses
| Impact of non-deductible costs, expenses and losses | 18,608,894.80 |
Impact of temporary difference or deductible losses onunrecognized deferred income tax assets in the current period
| Impact of temporary difference or deductible losses on unrecognized deferred income tax assets in the current period | 15,804,080.67 |
Impact of weighted deduction of R&D costs
| Impact of weighted deduction of R&D costs | (36,305,274.39) |
Income tax expenses
| Income tax expenses | 225,315,643.94 |
Other description
77. Other comprehensive income
See Note 57 for details.
78. Cash flow statement items
(1) Other cash received related to operating activities
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Deposit, margin and quality guaranteedeposit received
| Deposit, margin and quality guarantee deposit received | 15,037,420.79 | 3,081,911.81 |
Interest income received* 1
| Interest income received* 1 | 42,673,242.80 | 23,340,834.75 |
Government subsidies received
| Government subsidies received | 119,837,112.25 | 123,396,713.03 |
Others
| Others | 9,185,867.26 | 33,163,382.40 |
Total
| Total | 186,733,643.10 | 182,982,841.99 |
Explanation on other cash received related to operating activities: *1 Excluding interest income from CDS.
(2) Other cash paid related to operating activities
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Management expenses and R&D expensespaid in cash
| Management expenses and R&D expenses paid in cash | 124,259,182.05 | 157,769,645.84 |
Selling expenses paid in cash
| Selling expenses paid in cash | 282,879,625.34 | 405,213,437.73 |
Deposit, margin and quality guaranteedeposit paid
| Deposit, margin and quality guarantee deposit paid | 43,490,664.87 | 19,754,562.48 |
Bank handling charge
| Bank handling charge | 1,103,839.96 | 1,751,275.56 |
Others
| Others | 15,768,791.30 | 4,322,867.95 |
Total
| Total | 467,502,103.52 | 588,811,789.56 |
Description of other cash paid related to operating activities
(3) Other cash received related to investment activities
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Description of other cash received related to investment activities:
(4) Other cash paid related to investment activities
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Description of other cash paid related to investment activities:
(5) Other cash received related to financing activities
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Description of other cash received related to financing activities:
(6) Other cash paid related to financing activities
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Listing fees paid
| Listing fees paid | 33,727,072.53 |
Principal and interest of lease liabilitiespaid
| Principal and interest of lease liabilities paid | 233,452,456.57 |
Repurchased treasury stock paid
| Repurchased treasury stock paid | 257,992,366.68 |
| Total | 491,444,823.25 | 33,727,072.53 |
Description of other cash paid related to financing activities:
79. Further information on cash flow statement
(1) Further information on cash flow statement
Unit: yuan
| Further information | Current amount | Last term amount |
1. Reconciliation from net profits to cash
flows from operating activities
| 1. Reconciliation from net profits to cash flows from operating activities | -- | -- |
Net profit
| Net profit | 1,237,444,867.34 | 3,822,549,060.24 |
Plus: Provision for impairment of assets
| Plus: Provision for impairment of assets | 101,239,233.49 | 276,128,442.35 |
Depreciation of fixed assets, oil andgas assets and productive biologicalassets
| Depreciation of fixed assets, oil and gas assets and productive biological assets | 155,898,535.48 | 147,635,980.81 |
Depreciation of Right-of-use assets
| Depreciation of Right-of-use assets | 210,025,059.74 |
Amortization of intangible assets
| Amortization of intangible assets | 10,789,643.37 | 10,988,997.61 |
Amortization of long-term deferredexpenses
| Amortization of long-term deferred expenses | 55,654,548.57 | 99,119,620.61 |
Losses on disposal of fixed assets,intangible assets and other long-termassets (gains expressed with “-”)
| Losses on disposal of fixed assets, intangible assets and other long-term assets (gains expressed with “-”) | (3,250,448.27) | (9,765.86) |
Loss on retirement of fixed assets(gains expressed with “-”)
| Loss on retirement of fixed assets (gains expressed with “-”) | 12,330,835.56 | 25,924,502.61 |
Loss from fair value change (gainsexpressed with “-”)
| Loss from fair value change (gains expressed with “-”) | (58,474,468.36) | (11,178,589.44) |
Financial expenses (gains expressedwith “-”)
| Financial expenses (gains expressed with “-”) | (62,543,190.63) | (1,312,647.36) |
Investment losses (gains expressedwith “-”)
| Investment losses (gains expressed with “-”) | (103,237,547.98) | (21,585,123.16) |
Decreased in deferred income taxassets (increase expressed with “-”)
| Decreased in deferred income tax assets (increase expressed with “-”) | 20,206,789.76 | (73,566,474.84) |
Increase in deferred income taxliabilities (decrease expressed with “-”)
| Increase in deferred income tax liabilities (decrease expressed with “-”) | 1,171,551.44 | 12,165,608.24 |
Decrease in inventories (increaseexpressed with “-”)
| Decrease in inventories (increase expressed with “-”) | (473,630,443.01) | (365,641,049.64) |
Decrease in operating receivables(increase expressed with “-”)
| Decrease in operating receivables (increase expressed with “-”) | (27,098,897.28) | (499,624,352.97) |
Increase in operating payables(decrease expressed with “-”)
| Increase in operating payables (decrease expressed with “-”) | (289,569,059.18) | 1,272,381,877.68 |
Others
| Others | 84,732,891.89 | 73,520,200.51 |
Net cash flow from operating activities
| Net cash flow from operating activities | 871,689,901.93 | 4,767,496,287.39 |
2. Significant investment and financing
activities not involving cash deposit andwithdrawal:
| 2. Significant investment and financing activities not involving cash deposit and withdrawal: | -- | -- |
Conversion of debt into capital
| Conversion of debt into capital |
Convertible bonds due within 1 year
| Convertible bonds due within 1 year |
Fixed assets under financing lease
| Fixed assets under financing lease |
3. Net changes in cash and cash equivalents:
| 3. Net changes in cash and cash equivalents: | -- | -- |
Ending balance of cash
| Ending balance of cash | 4,088,612,262.04 | 4,149,734,694.38 |
Less: Beginning balance of cash
| Less: Beginning balance of cash | 4,149,734,694.38 | 459,169,719.65 |
Plus: Ending balance of cash equivalents
| Plus: Ending balance of cash equivalents |
Less: Ending balance of cash equivalents
| Less: Ending balance of cash equivalents |
Net increase of cash and cash equivalents
| Net increase of cash and cash equivalents | (61,122,432.34) | 3,690,564,974.73 |
(2) Net cash paid for obtaining subsidiaries in current period
Unit: yuan
| Amount |
Including:
| Including: | -- |
Including:
| Including: | -- |
Including:
| Including: | -- |
Other description:
(3) Net cash from disposal of subsidiaries in current period
Unit: yuan
| Amount |
Including:
| Including: | -- |
Including:
| Including: | -- |
Including:
| Including: | -- |
Other description:
(4) Composition of cash and cash equivalents
Unit: yuan
| Item | Closing Balance | Beginning balance |
I. Cash
| I. Cash | 4,088,612,262.04 | 4,149,734,694.38 |
Including: cash on hand
| Including: cash on hand | 65,897.39 | 49,287.18 |
Bank deposit readily available forpayment
| Bank deposit readily available for payment | 4,088,546,364.65 | 4,149,685,407.20 |
III. Balance of cash and cash equivalents atend of period
| III. Balance of cash and cash equivalents at end of period | 4,088,612,262.04 | 4,149,734,694.38 |
Other description:
80. Notes to items in statement of owner's equity
State the name of "other" items and the amount of adjustment to the ending balance of previous year:
Not applicable.
81. Assets with ownership or use rights restricted
Unit: yuan
| Item | Ending book value | Causes for restriction |
Cash and cash equivalents
| Cash and cash equivalents | 185,326,064.78 | For details, see “1. Monetary Funds, VII. Notes to Items in Consolidated Financial Statements” of Section 10 Financial Statements |
Fixed assets
| Fixed assets | 6,567,843.41 | For details, see “1. Urban Renewal Project of Winner Industrial Park, 7. Other important matters affecting the decision-making of investors, XVI. Other important issues” of Section 10 Financial Statements |
Total
| Total | 191,893,908.19 | -- |
Other description:
82. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: yuan
| Item | Ending balance in foreign currency | Conversion exchange rate | Ending balance converted to RMB |
| Cash and cash equivalents | -- | -- | 211,304,211.64 |
Including: USD
| Including: USD | 29,934,189.09 | 6.3757 | 190,851,409.38 |
EUR
| EUR | 925,201.16 | 7.2197 | 6,679,674.81 |
HKD
| HKD | 16,386,640.74 | 0.8176 | 13,397,717.47 |
Yen
| Yen | 4,960,507.92 | 0.0554 | 274,812.14 |
Ringgit
| Ringgit | 65,892.34 | 1.5267 | 100,597.84 |
Accounts receivable
| Accounts receivable | -- | -- | 204,411,955.36 |
Including: USD
| Including: USD | 30,221,063.60 | 6.3757 | 192,680,435.20 |
EUR
| EUR | 190,050.34 | 7.2197 | 1,372,106.44 |
HKD
| HKD | 10,829,513.87 | 0.8176 | 8,854,210.54 |
Ringgit
| Ringgit | 985,919.42 | 1.5267 | 1,505,203.18 |
Other receivables
| Other receivables | 1,739.66 |
Including: Ringgit
| Including: Ringgit | 1,139.49 | 1.5267 | 1,739.66 |
Accounts payable
| Accounts payable | 10,234,002.17 |
Including: USD
| Including: USD | 209,718.97 | 6.3757 | 1,337,105.24 |
EUR
| EUR | 26,518.80 | 7.2197 | 191,457.78 |
HKD
| HKD | 7,386,468.03 | 0.8176 | 6,039,176.26 |
Yen
| Yen | 2,553,600.00 | 0.0554 | 141,469.44 |
Ringgit
| Ringgit | 1,653,758.73 | 1.5267 | 2,524,793.45 |
Other payables
| Other payables | 80,708,558.62 |
Including: USD
| Including: USD | 10,965,868.63 | 6.3757 | 69,915,088.62 |
HKD
| HKD | 12,371,013.41 | 0.8176 | 10,114,540.56 |
Ringgit
| Ringgit | 444,703.90 | 1.5267 | 678,929.44 |
Long-term loans
| Long-term loans | -- | -- |
Including: USD
| Including: USD |
EUR
| EUR |
HKD
| HKD |
Other description:
(2) Description of overseas operating entities, including for important overseas operating entities, the
main overseas business place, recording currency and selection basis shall be disclosed, and thereasons for changes in recording currency shall also be disclosed.
□ Applicable √ Not applicable
83. Hedge
Disclose the qualitative and quantitative information of hedging items, related hedging instruments and hedged risks according to thehedging category:
84. Government subsidies
(1) Basic information of government subsidies
Unit: yuan
| Type | Amount | Presented item | Amount recorded in current profit and loss |
1. Government subsidies
related to assets
| 1. Government subsidies related to assets |
Subsidy of 2014 Hubeiprovincial science andtechnology support plan project(the second batch) - WinnerMedical (Huanggang)
| Subsidy of 2014 Hubei provincial science and technology support plan project (the second batch) - Winner Medical (Huanggang) | 1,500,000.00 | Deferred income | 150,000.00 |
Subsidy for Huanggang ChibiAvenue demolition company
| Subsidy for Huanggang Chibi Avenue demolition company | 3,169,359.20 | Deferred income | 105,645.31 |
planning change - WinnerMedical (Huanggang)Technology Center R & Dproject subsidy - the Company
| Technology Center R & D project subsidy - the Company | 12,420,000.00 | Deferred income | 299,841.84 |
Subsidy funds for municipalgovernment projectinfrastructure construction -Winner Medical (Chongyang)
| Subsidy funds for municipal government project infrastructure construction - Winner Medical (Chongyang) | 12,406,500.00 | Deferred income | 413,550.00 |
Park project construction inYuyue Town - Jiayu Winner
| Park project construction in Yuyue Town - Jiayu Winner | 9,880,000.00 | Deferred income | 406,833.34 |
Automatic transformation ofsurgical consumablesproduction line - the Company
| Automatic transformation of surgical consumables production line - the Company | 1,860,000.00 | Deferred income | 186,000.00 |
Second batch of traditionalindustry transformation subsidyin 2017 - Winner Medical(Huanggang)
| Second batch of traditional industry transformation subsidy in 2017 - Winner Medical (Huanggang) | 1,900,000.00 | Deferred income | 209,174.28 |
Key technical reform andexpansion project (cottonspunlunge wipes productionline project) - Tianmen Winner
| Key technical reform and expansion project (cotton spunlunge wipes production line project) - Tianmen Winner | 1,000,000.00 | Deferred income | 108,108.00 |
Production line project with anannual output of 120 millionbales of cotton fabric in 2017 -Winner Medical (Tianmen)
| Production line project with an annual output of 120 million bales of cotton fabric in 2017 - Winner Medical (Tianmen) | 930,000.00 | Deferred income | 107,307.72 |
Technical innovation subsidyfor the Purcotton Phase IIExpansion Project - WinnerMedical (Jingmen)
| Technical innovation subsidy for the Purcotton Phase II Expansion Project - Winner Medical (Jingmen) | 4,755,300.00 | Deferred income | 166,366.20 |
20180311 Subsidies forresearch, science andinnovation on the technology ofthermo-responsive self-curingwound regeneration and repairmaterials - the Company
| 20180311 Subsidies for research, science and innovation on the technology of thermo-responsive self-curing wound regeneration and repair materials - the Company | 1,200,000.00 | Deferred income | 241,698.00 |
Subsidies for first batch oftechnological transformationaward of industrial enterprisesin 2018 - Winner Medical(Chongyang)
| Subsidies for first batch of technological transformation award of industrial enterprises in 2018 - Winner Medical (Chongyang) | 1,000,000.00 | Deferred income | 106,157.12 |
Provincial traditional industrytransformation and upgradingspecial funds for the first batchof block funds allocation planin Tianmen City in 2019 -Winner Medical (Tianmen)
| Provincial traditional industry transformation and upgrading special funds for the first batch of block funds allocation plan in Tianmen City in 2019 - Winner Medical (Tianmen) | 1,320,000.00 | Deferred income | 136,551.72 |
First batch of traditionalsubsidies in 2019 - WinnerMedical (Huanggang)
| First batch of traditional subsidies in 2019 - Winner Medical (Huanggang) | 1,210,000.00 | Deferred income | 121,000.00 |
2020 technical transformationproject of Shenzhen COVID-19epidemic prevention andcontrol key material productionenterprises - the Company
| 2020 technical transformation project of Shenzhen COVID-19 epidemic prevention and control key material production enterprises - the Company | 20,000,000.00 | Deferred income | 2,000,000.00 |
Municipal Economic andInformation Bureau on theissuance of emergency materialsupport system constructiontechnical transformation specialsubsidy - Winner Medical(Huanggang)
| Municipal Economic and Information Bureau on the issuance of emergency material support system construction technical transformation special subsidy - Winner Medical (Huanggang) | 1,440,000.00 | Deferred income | 751,296.00 |
Production subsidy for
| Production subsidy for | 11,400,000.00 | Deferred income | 6,840,000.00 |
COVID-19 epidemicprevention materials in 2020 -Huanggang WinnerSurgical gown production lineproject subsidy - ChongyangWinner
| Surgical gown production line project subsidy - Chongyang Winner | 4,000,000.00 | Deferred income | 432,432.44 |
Funds subsidy for purchasingepidemic prevention equipmentin key enterprises of “ThreeBatches” - Chongyang Winner
| Funds subsidy for purchasing epidemic prevention equipment in key enterprises of “Three Batches” - Chongyang Winner | 5,590,000.00 | Deferred income | 563,697.48 |
Project on implementing thetechnical reformation policy of“Zero Land” in Wuhan and themunicipal industrial investmentand technical transformationspecial fund project of Bureaufor Science, Technology andEconomic InformationTechnology of Xinzhou District- Wuhan Winner
| Project on implementing the technical reformation policy of “Zero Land” in Wuhan and the municipal industrial investment and technical transformation special fund project of Bureau for Science, Technology and Economic Information Technology of Xinzhou District - Wuhan Winner | 8,000,000.00 | Deferred income | 582,288.74 |
Subsidy of COVID-19epidemic prevention andcontrol materials productionenterprise for capacityexpansion & technicalupgrading project - WuhanWinner
| Subsidy of COVID-19 epidemic prevention and control materials production enterprise for capacity expansion & technical upgrading project - Wuhan Winner | 3,645,000.00 | Deferred income | 591,720.31 |
Equipment purchase subsidyfor key enterprise "ThreeBatches” at provincial levels -Winner Medical (Huanggang)
| Equipment purchase subsidy for key enterprise "Three Batches” at provincial levels - Winner Medical (Huanggang) | 9,370,000.00 | Deferred income | 6,847,307.73 |
2020 Special funds for thehigh-quality development ofmanufacturing - WinnerMedical (Huanggang)
| 2020 Special funds for the high-quality development of manufacturing - Winner Medical (Huanggang) | 3,000,000.00 | Deferred income | 308,411.22 |
2021 urban technicaltransformation funds - WinnerMedical (Huanggang)
| 2021 urban technical transformation funds - Winner Medical (Huanggang) | 1,050,000.00 | Deferred income | 9,375.00 |
2021 Equipment subsidiesduring the COVID-19pandemic - Winner Medical(Jingmen)
| 2021 Equipment subsidies during the COVID-19 pandemic - Winner Medical (Jingmen) | 6,800,000.00 | Deferred income | 1,275,000.00 |
2020 Provincial special fundsfor the high-qualitydevelopment of manufacturing- Winner Medical (Jiayu)
| 2020 Provincial special funds for the high-quality development of manufacturing - Winner Medical (Jiayu) | 1,000,000.00 | Deferred income | 96,491.22 |
Annual equipment investmentsubsidies (Spunlace Phase III,stereoscopic warehouse) -Winner Medical (Tianmen)
| Annual equipment investment subsidies (Spunlace Phase III, stereoscopic warehouse) - Winner Medical (Tianmen) | 15,000,000.00 | Deferred income |
1 million level provincial fundfor the development ofmanufacturing - WinnerMedical (Wuhan)
| 1 million level provincial fund for the development of manufacturing - Winner Medical (Wuhan) | 1,000,000.00 | Deferred income | 104,305.17 |
Subsidies to increaseproduction capacity of theemergency supplies supportsystem from the centralgovernment - Winner Medical(Wuhan)
| Subsidies to increase production capacity of the emergency supplies support system from the central government - Winner Medical (Wuhan) | 1,600,000.00 | Deferred income | 41,139.46 |
Others
| Others | 11,625,301.34 | Deferred income | 996,607.66 |
Total
| Total | 159,071,460.54 | 24,198,305.96 |
| 2. Government subsidies related to income |
Special fund for industrialdevelopment from LonghuaDistrict Industry andInformation Bureau - theCompany
| Special fund for industrial development from Longhua District Industry and Information Bureau - the Company | 585,900.00 | Other incomes | 585,900.00 |
Subsidies for shipping cotton in2019 collected
| Subsidies for shipping cotton in 2019 collected | 1,739,600.00 | Other incomes | 1,739,600.00 |
2020 special funds for stableindustrial growth granted byFinance Bureau to ICBC
| 2020 special funds for stable industrial growth granted by Finance Bureau to ICBC | 20,000,000.00 | Other incomes | 20,000,000.00 |
Domestic marketing and listingsubsidies - the Company
| Domestic marketing and listing subsidies - the Company | 3,500,000.00 | Other incomes | 3,500,000.00 |
Special funds for strategicemerging industries - theCompany
| Special funds for strategic emerging industries - the Company | 1,032,300.00 | Other incomes | 1,032,300.00 |
Foreign trade premium growthfund - the Company
| Foreign trade premium growth fund - the Company | 1,573,787.00 | Other incomes | 1,573,787.00 |
Capacity expansion projectaward - the Company
| Capacity expansion project award - the Company | 13,333,300.00 | Other incomes | 13,333,300.00 |
Special subsidies for industrialdevelopment from the FinanceBureau - the Company
| Special subsidies for industrial development from the Finance Bureau - the Company | 2,500,000.00 | Other incomes | 2,500,000.00 |
Science and TechnologyInnovation Award - theCompany
| Science and Technology Innovation Award - the Company | 816,000.00 | Other incomes | 816,000.00 |
Funding for the cultivation ofhigh-tech enterprises - theCompany
| Funding for the cultivation of high-tech enterprises - the Company | 1,000,000.00 | Other incomes | 1,000,000.00 |
Special funds for economicdevelopment - ShenzhenPurcotton
| Special funds for economic development - Shenzhen Purcotton | 1,400,300.00 | Other incomes | 1,400,300.00 |
Incentives for capacityexpansion of industrialenterprises - ShenzhenPurcotton
| Incentives for capacity expansion of industrial enterprises - Shenzhen Purcotton | 8,524,000.00 | Other incomes | 8,524,000.00 |
Enterprise R & D funding -Shenzhen Purcotton
| Enterprise R & D funding - Shenzhen Purcotton | 776,000.00 | Other incomes | 776,000.00 |
Subsidies for expandingincentive programs - ShenzhenPurcotton
| Subsidies for expanding incentive programs - Shenzhen Purcotton | 6,666,700.00 | Other incomes | 6,666,700.00 |
Special funds for enhancementsupport program of quality andbrand - Shenzhen Purcotton
| Special funds for enhancement support program of quality and brand - Shenzhen Purcotton | 800,000.00 | Other incomes | 800,000.00 |
Consumption promotionsupport funds in 2021 - QianhaiPurcotton
| Consumption promotion support funds in 2021 - Qianhai Purcotton | 500,000.00 | Other incomes | 500,000.00 |
Post-recognition subsidy forhigh-tech enterprises,post-innovation platformsubsidy - Winner Medical(Huanggang)
| Post-recognition subsidy for high-tech enterprises, post-innovation platform subsidy - Winner Medical (Huanggang) | 1,050,000.00 | Other incomes | 1,050,000.00 |
Integration of IT applicationwith industrialization andinvisible champion award -Winner Medical (Huanggang)
| Integration of IT application with industrialization and invisible champion award - Winner Medical (Huanggang) | 800,000.00 | Other incomes | 800,000.00 |
Planned project fund - WinnerMedical (Huanggang)
| Planned project fund - Winner Medical (Huanggang) | 600,000.00 | Other incomes | 600,000.00 |
Electricity subsidies for
| Electricity subsidies for | 1,015,602.25 | Other incomes | 1,015,602.25 |
COVID-19 pandemicprevention and control - WinnerMedical (Tianmen)Subsidies for shipping cotton -Winner Medical (Tianmen)
| Subsidies for shipping cotton - Winner Medical (Tianmen) | 1,351,100.00 | Other incomes | 1,351,100.00 |
Enterprise and school projectsubsidies - Winner Medical(Jingmen)
| Enterprise and school project subsidies - Winner Medical (Jingmen) | 1,000,000.00 | Other incomes | 1,000,000.00 |
Financial discount interest
| Financial discount interest | 797,400.00 | Financial expenses | 797,400.00 |
Received Mayor Quality Award2020 of Longhua District
| Received Mayor Quality Award 2020 of Longhua District | 1,000,000.00 | Non-revenue | 1,000,000.00 |
Others
| Others | 8,572,676.09 | Other income / Non-revenue | 8,572,676.09 |
Total
| Total | 80,934,665.34 | 80,934,665.34 |
(2) Return of government subsidies
□ Applicable √ Not applicable
Other description:
85. Others
NA
VIII. Consolidation scope changes
1. Business combination not under common control
(1) Business combination not under common control occurred in current period
Unit: yuan
| Name of the acquiree | Time of equity acquisition | Cost of equity acquisition | Equity acquisition ratio | Method of equity acquisition | Acquisition date | Basis for determination of acquisition date | Income of the acquiree from the acquisition date to the end of the period | Net profit of the acquiree from the acquisition date to the end of the period |
Other description:
NA
(2) Combination cost and goodwill
Unit: yuan
| Combination cost |
- Cash
| - Cash |
- Fair value of non-cash assets
| - Fair value of non-cash assets |
- Fair value of liabilities issued or assumed
| - Fair value of liabilities issued or assumed |
- Fair value of equity securities issued
| - Fair value of equity securities issued |
- Fair value of contingent consideration
| - Fair value of contingent consideration |
- Fair value of equity held prior to the acquisition date on theacquisition date
| - Fair value of equity held prior to the acquisition date on the acquisition date |
- Others
| - Others |
- Total combination cost
| - Total combination cost |
Less: Share of the fair value of the identifiable net assets acquired
| Less: Share of the fair value of the identifiable net assets acquired |
Amount of goodwill/combination cost less than the share of thefair value of the identifiable net assets acquired
| Amount of goodwill/combination cost less than the share of the fair value of the identifiable net assets acquired |
Determination method of fair value of combination cost, contingent consideration and explanation of its changes:
Not applicable.
Main reasons for the formation of large amount of goodwill:
Not applicable.Other description:
Not applicable.
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: yuan
| Fair value on the acquisition date | Book value on the acquisition date |
Assets:
| Assets: |
Cash and cash equivalents
| Cash and cash equivalents |
Receivables
| Receivables |
Inventory
| Inventory |
Fixed assets
| Fixed assets |
Intangible assets
| Intangible assets |
Liabilities:
| Liabilities: |
Borrowing
| Borrowing |
Payables
| Payables |
Deferred income tax liabilities
| Deferred income tax liabilities |
Net assets
| Net assets |
Less: Minority equity
| Less: Minority equity |
Net assets acquired
| Net assets acquired |
Determination method of fair value of identifiable assets and liabilities:
Not applicable.Contingent liabilities of the acquiree incurred in business combinationNot applicable.Other description:
Not applicable.
(4) Gains or losses arising from remeasurement of equity held prior to the acquisition date at fair valueWhether there are transactions that realize the business combination step by step through multiple transactions and obtain controlright during the reporting period
□Yes √No
(5) Relevant description of the combination consideration or the fair value of the identifiable assets andliabilities of the acquiree that cannot be reasonably determined on the acquisition date or at the end ofcurrent period of the combinationNot applicable.
(6) Other description
Not applicable.
2. Business combination under common control
(1) Business combination under common control occurred in current period
Unit: yuan
| Name of merged party | Proportion of equity | Basis of business | Merger date | Basis for determinatio | Income of the | Net profit of the | Income of the | Net profit of the |
| obtained in business combination | combination under common control | n of merger date | combined party from the beginning of current period to the date of combination | combined party from the beginning of current period to the date of combination | combined party during the comparison period | combined party during the comparison period |
Other description:
(2) Combination cost
Unit: yuan
| Combination cost |
- Cash
| - Cash |
- Book value of non-cash assets
| - Book value of non-cash assets |
- Book value of liabilities issued or assumed
| - Book value of liabilities issued or assumed |
- Face value of equity securities issued
| - Face value of equity securities issued |
- Contingent consideration
| - Contingent consideration |
Contingent consideration and explanation of its changes:
Other description:
(3) Book value of assets and liabilities of the combined party on the date of combination
Unit: yuan
| Merger date | End of previous period |
Assets:
| Assets: |
Cash and cash equivalents
| Cash and cash equivalents |
Receivables
| Receivables |
Inventory
| Inventory |
Fixed assets
| Fixed assets |
Intangible assets
| Intangible assets |
Liabilities:
| Liabilities: |
Borrowing
| Borrowing |
Payables
| Payables |
Net assets
| Net assets |
Less: Minority equity
| Less: Minority equity |
Net assets acquired
| Net assets acquired |
Contingent liabilities of the combined party incurred in business combinationOther description:
3. Reverse purchase
Basic information of transaction, basis of transaction forming reverse purchase, whether the assets and liabilities retained by thelisted company constitute business and their basis, determination of combination cost, amount and calculation of adjusted equity inaccordance with equity transaction:
4. Disposal of subsidiary
Whether there is a single disposal of investment in subsidiaries, i.e. loss of control right
□Yes √No
Whether there is a situation that the investment in subsidiaries is disposed step by step through multiple transactions and the control
right is lost in current period
□Yes √No
5. Change of merger scope for other reasons
Explain the changes in the scope of combination caused by other reasons (such as the establishment of new subsidiaries, liquidationof subsidiaries, etc.) and relevant information:
6. Others
IX. Interests in other entities
1. Interests in a subsidiary
(1) Composition of enterprise group
| Subsidiary name | Main operation site | Registration place | Business nature | Shareholding ratio | Way of obtaining | |
| Direct | Indirect | |||||
ShenzhenPurcotton
| Shenzhen Purcotton | Shenzhen City, Guangdong Province | Shenzhen City, Guangdong Province | Sale of Purcotton products | 100.00% | Establishment |
Beijing Purcotton
| Beijing Purcotton | Beijing | Beijing | Sale of Purcotton products | 100.00% | Establishment |
GuangzhouPurcotton
| Guangzhou Purcotton | Guangzhou City, Guangdong Province | Guangzhou City, Guangdong Province | Sale of Purcotton products | 100.00% | Establishment |
ShanghaiPurcotton
| Shanghai Purcotton | Shanghai | Shanghai | Sale of Purcotton products | 100.00% | Establishment |
QianhaiPurcotton
| Qianhai Purcotton | Shenzhen City, Guangdong Province | Shenzhen City, Guangdong Province | Sale of Purcotton products | 100.00% | Establishment |
Winner Medical(Huanggang)
| Winner Medical (Huanggang) | Huanggang City, Hubei Province | Huanggang City, Hubei Province | Production and sales of cotton spun laced non-woven fabric, medical consumables and Purcotton products | 100.00% | Business combination under common control |
Winner Medical(Jingmen)
| Winner Medical (Jingmen) | Jingmen City, Hubei Province | Jingmen City, Hubei Province | Production and sales of medical consumables and Purcotton products | 100.00% | Business combination under common control |
Winner Medical(Chongyang)
| Winner Medical (Chongyang) | Chongyang County, Hubei Province | Chongyang County, Hubei Province | Production and sales of medical consumables | 100.00% | Business combination under common control |
Winner Medical(Jiayu)
| Winner Medical (Jiayu) | Jiayu County, Hubei Province | Jiayu County, Hubei Province | Production and sales of medical consumables and Purcotton products | 100.00% | Business combination under common control |
Winner Medical(Yichang)
| Winner Medical (Yichang) | Zhijiang City, Hubei Province | Zhijiang City, Hubei Province | Production and sales of medical gray cloth | 100.00% | Business combination under common control |
Winner Medical(Tianmen)
| Winner Medical (Tianmen) | Tianmen City, Hubei Province | Tianmen City, Hubei Province | Production and sales of cotton spun laced non-woven fabric and Purcotton products | 100.00% | Business combination under common control |
| Winner Medical (Hong Kong) | Hong Kong | Hong Kong | Sales of medical consumables and consumer goods | 60.00% | Business combination under common control |
Winner(Huanggang)Cotton
| Winner (Huanggang) Cotton | Huanggang City, Hubei Province | Huanggang City, Hubei Province | Cotton trade | 100.00% | Business combination under common control |
Winner MedicalMalaysia
| Winner Medical Malaysia | Malaysia | Malaysia | There is no actual business operation | 100.00% | Business combination not under common control |
Winner Medical(Heyuan)
| Winner Medical (Heyuan) | Heyuan City, Guangdong Province | Heyuan City, Guangdong Province | There is no actual business operation at present | 100.00% | Establishment |
Winner Medical(Wuhan)
| Winner Medical (Wuhan) | Wuhan City, Hubei Province | Wuhan City, Hubei Province | Production and sterilization of cotton spun laced non-woven fabric and Purcotton products | 100.00% | Establishment |
PureH2B
| PureH2B | Shenzhen City, Guangdong Province | Shenzhen City, Guangdong Province | Sales of personal care and other products | 100.00% | Establishment |
Mifu Shanghai1*
| Mifu Shanghai 1* | Shanghai | Shanghai | Import and domestic sales of cosmetics | 100.00% | Establishment |
Purunderwear
| Purunderwear | Shenzhen City, Guangdong Province | Shenzhen City, Guangdong Province | Sales of Cotton Lining products | 100.00% | Establishment |
HuanggangPurcotton
| Huanggang Purcotton | Huanggang City, Hubei Province | Huanggang City, Hubei Province | Sale of Purcotton products | 100.00% | Establishment |
Difference between the shareholding ratio and the voting right ratio in the subsidiary:
Not applicable.Basis for holding half or less of the voting rights but still controlling the invested entity, and holding more than half of the votingrights but not controlling the invested entity:
Not applicable.For the important structured entity included in the combination scope, the control basis is as follows:
Not applicable.Basis for determining whether the company is an agent or a principal:
Not applicable.Other description:
1* Mifu Shanghai was cancelled on February 21, 2022.
(2) Important non-wholly owned subsidiary
Unit: yuan
| Subsidiary name | Minority shareholding ratio | Current profits and losses attributable to minority shareholders | Current dividends declared to minority shareholders | Ending balance of minority equity |
Difference between the shareholding ratio and the voting right ratio of the minority shareholders of the subsidiary:
Not applicable.
Other description:
Not applicable.
(3) Main financial information of important non-wholly owned subsidiaries
Unit: yuan
| Subsidiary name | Closing Balance | Beginning balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Unit: yuan
| Subsidiary name | Amount incurred in current period | Amount incurred in previous period | ||||||
| Revenue | Net profit | Total comprehensive income | Cash flow from financing activities | Revenue | Net profit | Total comprehensive income | Cash flow from financing activities | |
Other description:
Not applicable.
(4) Major restrictions on the use of enterprise group assets and the settlement of enterprise group debtsNot applicable.
(5) Financial or other support provided to structured entity included in the consolidated financialstatementsNot applicable.Other description:
Not applicable.
2. Transactions in which the share of ownership interest in a subsidiary changes and the subsidiary isstill controlled
(1) Description of changes in the owner's equity share in the subsidiary
Not applicable.
(2) Impact of transactions on minority shareholders' equity and shareholders’ equity attributable to theowners of parent company
Unit: yuan
Purchase cost/disposal consideration
| Purchase cost/disposal consideration |
- Cash
| - Cash |
- Fair value of non-cash assets
| - Fair value of non-cash assets |
Total purchase cost/disposal consideration
| Total purchase cost/disposal consideration |
Less: Share of net assets of subsidiaries calculated by proportionof equity acquired/disposed
| Less: Share of net assets of subsidiaries calculated by proportion of equity acquired/disposed |
Difference
| Difference |
Including: Adjust capital surplus
| Including: Adjust capital surplus |
Adjust surplus reserve
| Adjust surplus reserve |
Adjust undistributed profit
| Adjust undistributed profit |
Other descriptionNot applicable.
3. Equity in joint venture arrangement or joint venture
(1) Important cooperative enterprises or joint ventures
| Name of cooperative enterprise or joint venture | Main operation site | Registration place | Business nature | Shareholding ratio | Accounting treatment method of investment in cooperative enterprises or joint ventures | |
| Direct | Indirect | |||||
Difference between the shareholding ratio and the voting right ratio in the cooperative enterprise or joint venture:
Not applicable.Basis for holding less than 20% of the voting rights but having a significant impact, or holding 20% or more of the voting rights butnot having a significant impact:
Not applicable.
(2) Major Financial Information about Important Cooperative Enterprises
Unit: yuan
| Ending balance/amount incurred in current period | Beginning balance/amount incurred in previous period |
Current assets
| Current assets |
Including: cash and cash equivalents
| Including: cash and cash equivalents |
Non-current assets
| Non-current assets |
Total assets
| Total assets |
Current liabilities
| Current liabilities |
Non-current liabilities
| Non-current liabilities |
Total liabilities
| Total liabilities |
Noncontrolling interest
| Noncontrolling interest |
Shareholders' equities attributable to theowners of parent company
| Shareholders' equities attributable to the owners of parent company |
Share of net assets in proportion toshareholding
| Share of net assets in proportion to shareholding |
Adjustment items
| Adjustment items |
- Goodwill
| - Goodwill |
- Unrealized profit of internal transaction
| - Unrealized profit of internal transaction |
- Others
| - Others |
Book value of equity investment in jointventures
| Book value of equity investment in joint ventures |
Fair value of equity investment in jointventures with public offer
| Fair value of equity investment in joint ventures with public offer |
Revenue
| Revenue |
Financial expenses
| Financial expenses |
Income tax expenses
| Income tax expenses |
Net profit
| Net profit |
Net profits from discontinued operations
| Net profits from discontinued operations |
Other comprehensive income
| Other comprehensive income |
Total comprehensive income
| Total comprehensive income |
Dividends received from joint ventures inthe current year
| Dividends received from joint ventures in the current year |
Other descriptionNot applicable.
(3) Major Financial Information About Important Jointly Operated Enterprises
Unit: yuan
| Ending balance/amount incurred in current period | Beginning balance/amount incurred in previous period |
Current assets
| Current assets |
Non-current assets
| Non-current assets |
Total assets
| Total assets |
Current liabilities
| Current liabilities |
Non-current liabilities
| Non-current liabilities |
Total liabilities
| Total liabilities |
Noncontrolling interest
| Noncontrolling interest |
Shareholders' equities attributable to theowners of parent company
| Shareholders' equities attributable to the owners of parent company |
Share of net assets in proportion toshareholding
| Share of net assets in proportion to shareholding |
Adjustment items
| Adjustment items |
- Goodwill
| - Goodwill |
- Unrealized profit of internal transaction
| - Unrealized profit of internal transaction |
- Others
| - Others |
Book value of equity investment inassociated enterprises
| Book value of equity investment in associated enterprises |
Fair value of equity investment inassociated enterprises with public offer
| Fair value of equity investment in associated enterprises with public offer |
Revenue
| Revenue |
Net profit
| Net profit |
Net profits from discontinued operations
| Net profits from discontinued operations |
Other comprehensive income
| Other comprehensive income |
Total comprehensive income
| Total comprehensive income |
Dividends received from associatedenterprises in the current year
| Dividends received from associated enterprises in the current year |
Other descriptionNot applicable.
(4) Summary of financial information of unimportant cooperative enterprises and joint ventures
Unit: yuan
| Ending balance/amount incurred in current period | Beginning balance/amount incurred in previous period |
Cooperative enterprise:
| Cooperative enterprise: | -- | -- |
Total number of following items byshareholding ratio
| Total number of following items by shareholding ratio | -- | -- |
- Joint venture:
| - Joint venture: | -- | -- |
Total book value of investment
| Total book value of investment | 16,949,801.24 | 13,424,230.41 |
Total number of following items byshareholding ratio
| Total number of following items by shareholding ratio | -- | -- |
- Net profit
| - Net profit | 3,525,570.83 | 4,565,754.26 |
- Total comprehensive income
| - Total comprehensive income | 3,525,570.83 | 4,565,754.26 |
Other description
(5) Significant restrictions on the ability of cooperative enterprises and joint ventures to transfer funds to
the CompanyNot applicable.
(6) Excess losses of cooperative enterprise or joint venture
Unit: yuan
| Name of cooperative enterprise or joint venture | Accumulated unrecognized losses in the previous period | Unrecognized loss in current period (or net profit shared in current period) | Accumulated unrecognized losses at the end of current period |
Other descriptionNot applicable.
(7) Unconfirmed commitments related to investment in cooperative enterpriseNot applicable.
(8) Contingent liabilities related to investment in cooperative enterprise or joint ventureNot applicable.
4. Important pooling of interests
| Name of joint operation | Main operation site | Registration place | Business nature | Shareholding ratio / share enjoyed | |
| Direct | Indirect | ||||
Difference between the shareholding ratio or share enjoyed and the voting right ratio in joint operation:
Not applicable.If the joint operation is a separate entity, it shall be classified as the basis of joint operation:
Not applicable.Other descriptionNot applicable.
5. Equity in the structured entity that is not included in the consolidated financial statements
Description of structured entity not included in the consolidated financial statementsNot applicable.
6. Others
NAX. Risks associated with financial instruments
The Company faces various financial risks in the process of operation: credit risk, market risk and liquidity risk.The Board of Directors of the Company is fully responsible for the determination of risk management objectivesand policies and ultimately responsible for the risk management objectives and policies, provided that the Boardof Directors has authorized the Company’s internal audit department to design and implement procedures toensure the effective implementation of risk management objectives and policies. The board reviews theeffectiveness of the procedures implemented and the reasonableness of risk management objectives and policiesthrough monthly reports submitted by the internal audit supervisor.The overall objective of the Company’s risk management is to develop risk management policies to minimize riskwithout overly affecting the Company' s competitiveness and strain capacity.
(I) Credit riskCredit risk refers to the risk of financial loss to the Company due to the failure of the counterparty to fulfill its
contractual obligations.The Company is mainly faced with the customer credit risk caused by credit sales. Prior to signing a new contract,the Company will assess the credit risk of a new customer, including external credit ratings and, in some cases,bank reference letter (when such information is available). The Company sets a credit sales limit for eachcustomer, which is the maximum amount that does not require additional approval.The Company ensures that the overall credit risk of the Company is under control by quarterly monitoring of thecredit rating of existing customers and monthly review of the aging analysis of accounts receivable. Whenmonitoring the credit risk of customers, they are grouped according to their credit characteristics. Customers ratedas “high risk” are placed on the Restricted Customer List and can only be sold on credit for a future period withadditional approval, or they must be required to pay in advance.
(II) Liquidity riskLiquidity risk refers to the risk of capital shortage when the Company performs the obligation of settlement bycash payment or other financial assets. The Company’s policy is to ensure that there is sufficient cash to pay thedebt due. Liquidity risk is centrally controlled by the Financial Department of the Company. By monitoring cashbalances, securities that can be turned into cash at any time, and rolling forecasting of cash flows over the next 12months, the Finance Department ensures that the Company has sufficient funds to repay its debts under allreasonable projections.The Company’s various financial liabilities are shown as follows in terms of undiscounted contract cash flows onmaturity dates:
| Item | Closing Balance | |||||
| Immediate repayment | Within 1 year | 1-2 years | 2-5 years | More than 5 years | Total | |
Notes payable
| Notes payable | 36,200,130.04 | 36,200,130.04 |
Accountspayable
| Accounts payable | 734,521,490.60 | 734,521,490.60 |
Other payables
| Other payables | 443,946,028.46 | 443,946,028.46 |
Lease liabilities
| Lease liabilities | 240,795,667.26 | 189,493,128.55 | 808,798,827.96 | 1,239,087,623.77 |
Total
| Total | 1,455,463,316.36 | 189,493,128.55 | 808,798,827.96 | 2,453,755,272.87 |
| Item | Balance at the end of previous year | |||||
| Immediate repayment | Within 1 year | 1-2 years | 2-5 years | More than 5 years | Total | |
Short-term loans
| Short-term loans | 150,071,416.66 | 150,071,416.66 |
Notes payable
| Notes payable | 29,418,100.00 | 29,418,100.00 |
Accounts payable
| Accounts payable | 726,577,306.94 | 726,577,306.94 |
Other payables
| Other payables | 352,543,008.89 | 352,543,008.89 |
Total
| Total | 1,258,609,832.49 | 1,258,609,832.49 |
(III) Market riskMarket risk of financial instruments refers to the risk that the fair value or future cash flow of financialinstruments fluctuates due to the change of market price, including exchange rate risk, interest rate risk and otherprice risk.
1. Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due tothe change of market interest rate.The interest rate risk that the Company faces mainly comes from the bank's long-term borrowing. The Company
has no long-term borrowings for the current period.
2. Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates dueto the change of foreign exchange rate.The Company continues to monitor foreign currency transactions and the size of foreign currency assets andliabilities to minimize exposure to foreign exchange. In addition, the Company may enter into forward foreignexchange contracts or currency exchange contracts to achieve the purpose of avoiding the exchange rate risk. TheCompany did not enter into any forward foreign exchange contracts or currency swap contracts during the currentand previous periods.The exchange rate risk faced by the Company mainly come from financial assets and financial liabilitiesdenominated in USD. The amounts of foreign currency financial assets and foreign currency financial liabilitiesconverted into RMB are listed as follows:
| Item | Closing Balance | |||||
| US dollar | EUR | HKD | Yen | Ringgit | Total | |
Foreigncurrencyfinancialassets
| Foreign currency financial assets |
Cash andcashequivalents
| Cash and cash equivalents | 190,851,409.38 | 6,679,674.81 | 13,397,717.47 | 274,812.14 | 100,597.84 | 211,304,211.64 |
Accountsreceivable
| Accounts receivable | 192,680,435.20 | 1,372,106.44 | 8,854,210.54 | 1,505,203.18 | 204,411,955.36 |
Otherreceivables
| Other receivables | 1,739.66 | 1,739.66 |
Subtotal
| Subtotal | 383,531,844.58 | 8,051,781.25 | 22,251,928.01 | 274,812.14 | 1,607,540.68 | 415,717,906.66 |
Foreigncurrencyfinancialliabilities
| Foreign currency financial liabilities |
Accountspayable
| Accounts payable | 1,337,105.24 | 191,457.78 | 6,039,176.26 | 141,469.44 | 2,524,793.45 | 10,234,002.17 |
Otherpayables
| Other payables | 69,915,088.62 | 10,114,540.56 | 678,929.44 | 80,708,558.62 |
Subtotal
| Subtotal | 71,252,193.86 | 191,457.78 | 16,153,716.82 | 141,469.44 | 3,203,722.89 | 90,942,560.79 |
Net amount
| Net amount | 312,279,650.72 | 7,860,323.47 | 6,098,211.19 | 133,342.70 | (1,596,182.21) | 324,775,345.87 |
On December 31, 2021, if the RMB appreciates or depreciates by 5% against USD / EUR / HKD / Yen / Ringgit,all other variables being held constant, the net profits of the Company will be increased or decreased by RMB13,738,289.79. Management considers that 5% is a reasonable reflection of the reasonable range of possiblechanges in RMB against USD in the next year.
3. Other price risks
Other price risks refer to the risks that the fair value or future cash flow of financial instruments fluctuates due tothe change of market price rate other than exchange rate risk and interest rate risk.
XI. Fair value disclosure
1. Ending fair value of assets and liabilities measured with fair value
Unit: yuan
| Item | Closing fair value | |||
| Measurement of fair value at first level | Measurement of fair value at second level | Measurement of fair value at third level | Total | |
I. Continuous fair valuemeasurement
| I. Continuous fair value measurement | -- | -- | -- | -- |
(I) Tradable financialassets
| (I) Tradable financial assets | 1,784,696,278.28 | 1,345,833,430.82 | 3,130,529,709.10 |
1. Financial assets
measured with fair valueand with the changesincluded in current profitand loss
| 1. Financial assets measured with fair value and with the changes included in current profit and loss | 1,784,696,278.28 | 1,345,833,430.82 | 3,130,529,709.10 |
(1) Debt instruments
investment
| (1) Debt instruments investment | 1,784,696,278.28 | 1,345,833,430.82 | 3,130,529,709.10 |
1. Accounts receivable
financing
| 1. Accounts receivable financing | 9,940,272.21 | 9,940,272.21 |
Total assets continuouslymeasured at fair value
| Total assets continuously measured at fair value | 1,794,636,550.49 | 1,345,833,430.82 | 3,140,469,981.31 |
II. Non-continuous fairvalue measurement
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. Continuous and non-continuous measurement items of fair value at first level and recognition basis for
market priceNot applicable.
3. Continuous and non-continuous measurement items of fair value at second level, qualitative and
quantitative information on valuation techniques adopted and important parametersNot applicable.
4. Continuous and non-continuous measurement items of fair value at third level, qualitative and
quantitative information on valuation techniques adopted and important parameters
Not applicable.
5. Continuous measurement items of fair value at third level, adjustment information between opening
and closing book value and sensitivity analysis of unobservable parameters
Not applicable.
6. For continuous measurement items of fair value, if there is a conversion between different levels in
current period, the reasons for the conversion and the policies for determining the conversion time
point
Not applicable.
7. Valuation technology change and reason of change in current periodNot applicable.
8. Fair value of financial assets and financial liabilities not measured at fair valueNot applicable.
9. Others
Not applicable.
XII. Related parties and related transactions
1. Parent company of the Company
| Parent company name | Registration place | Business nature | Registered capital | Shareholding ratio of the parent company in the Company | Voting right ratio of the parent company in the Company |
Winner GroupLimited
| Winner Group Limited | Cayman Islands | Equity investment and management business | HKD 1,143,000.00 | 68.10% | 68.10% |
Parent company of the CompanyWinner Group Limited was incorporated in the Cayman Islands on April 8, 2003 with registration number 124887 and an authorizedshare capital of 360,000,000.00 shares with a nominal value of HKD 1 per share. 1,143,000 shares have been issued. The registeredaddress is Vistra (Cayman) Limited, P.O. Box 31119, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman KY1-1205,Cayman Islands.
The ultimate controlling party of the Company is Li Jianquan.Other description:
NA
2. Subsidiaries of the Company
See Note “IX. Interests in other entities”.
3. Cooperative enterprises and joint ventures
See the note “IX. Interests in other entities” for important cooperative enterprises or joint ventures of the Company.Other cooperative enterprises or joint ventures that made related party transactions with the Company in the current period, or formedthe balance of related party transactions with the Company in the previous periods are as follows:
| Name of cooperative enterprise or joint venture | Relationship with the Company |
Chengdu Winner
| Chengdu Winner | Joint venture |
Other descriptionSummary of financial information of unimportant cooperative enterprises and joint ventures:
| Ending balance / amount in current period | Balance at the end of previous year / amount in previous period |
- Joint venture:
| - Joint venture: |
Chengdu Winner
| Chengdu Winner |
Total book value of investment
| Total book value of investment | 16,949,801.24 | 13,424,230.41 |
Total number of following items byshareholding ratio
| Total number of following items by shareholding ratio |
- Net profit
| - Net profit | 3,525,570.83 | 4,565,754.26 |
— Other comprehensive income
| — Other comprehensive income |
— Total comprehensive income
| — Total comprehensive income | 3,525,570.83 | 4,565,754.26 |
4. Situation of other related parties
| Name of other related parties | Relationship of other related parties with the Company |
Sequoia Xinyuan
| Sequoia Xinyuan | Shareholder of the Company, holding 6.83% of the Company’s shares |
Xiamen Leyuan Investment Partnership (Limited Partnership)
| Xiamen Leyuan Investment Partnership (Limited Partnership) | Shareholder of the Company, holding 4.14% of the Company’s |
sharesXiamen Yutong Investment Partnership (Limited Partnership)
| Xiamen Yutong Investment Partnership (Limited Partnership) | Shareholder of the Company, holding 2.20% of the Company’s shares |
SCGC
| SCGC | Shareholder of the Company, holding 1.99% of the Company’s shares |
Xiamen Huikang Investment Partnership (Limited Partnership)
| Xiamen Huikang Investment Partnership (Limited Partnership) | Shareholder of the Company, holding 1.33% of the Company’s shares |
Xiamen Zepeng Investment Partnership (limited partnership)
| Xiamen Zepeng Investment Partnership (limited partnership) | Shareholder of the Company, holding 0.68% of the Company’s shares |
Wuhan Zhuoling Packaging Co., Ltd. ((hereinafter referred to as“Wuhan Zhuoling”)
| Wuhan Zhuoling Packaging Co., Ltd. ((hereinafter referred to as “Wuhan Zhuoling”) | A company controlled by close family members of the Company’s key managers |
Glory Ray Holdings Limited
| Glory Ray Holdings Limited | A company controlled by the actual controller |
Shenzhen Breo Technology Co., Ltd. (hereinafter referred to as“Breo”)
| Shenzhen Breo Technology Co., Ltd. (hereinafter referred to as “Breo”) | A company with the Company’s independent director Liang Wenzhao as an independent director |
Shenzhen Ellassay Fashion Co., Ltd. (hereinafter referred to as“Ellassay”)
| Shenzhen Ellassay Fashion Co., Ltd. (hereinafter referred to as “Ellassay”) | A company with the Company’s independent director Zhou Xiaoxiong as an independent director |
Li Jianquan
| Li Jianquan | Actual controller of the company |
Xie Ping
| Xie Ping | Shareholder of the Company, holding 13.94% of the Company’s shares |
Li Xiaoyuan
| Li Xiaoyuan | Shareholder of the Company, holding 6.32% of the Company’s shares |
Fang Xiuyuan
| Fang Xiuyuan | Director, deputy general manager, chief financial officer |
Xu Xiaodan
| Xu Xiaodan | Director |
Guo Zhenwei
| Guo Zhenwei | Director |
Liang Wenzhao
| Liang Wenzhao | Independent director, outgoing in current period |
Zhou Xiaoxiong
| Zhou Xiaoxiong | Independent director, outgoing in current period |
Bi Qun
| Bi Qun | Independent director, outgoing in current period |
Liu Weiwei
| Liu Weiwei | Chairman of the board of supervisors, outgoing in current period |
Ye Yangjing
| Ye Yangjing | Supervisor, outgoing in current period |
Key Ke Liu
| Key Ke Liu | Independent director, take office in current period |
Peng Jianfeng
| Peng Jianfeng | Independent director, take office in current period |
Xie Jiawei
| Xie Jiawei | Independent director, take office in current period |
Zhang Tingting
| Zhang Tingting | Chairman of the board of supervisors, take office in current period |
Liu Hua
| Liu Hua | Supervisor, take office in current period |
Wang Ying
| Wang Ying | Supervisor |
Yin Wenling
| Yin Wenling | Deputy general manager, outgoing in current period |
Zhang Li
| Zhang Li | Deputy general manager, take office in current period |
Chen Huixuan
| Chen Huixuan | Deputy general manager, secretary to the Board of Directors |
Song Haibo
| Song Haibo | Key technical personnel |
Wang Huan
| Wang Huan | Key technical personnel |
Other description
5. Related transaction
(1) Related transaction of purchases and sales of goods, provision and acceptance of servicesPurchase of goods/acceptance of services
Unit: yuan
| Related party | Related transaction content | Amount incurred in current period | Approved transaction quota | Whether the transaction quota is exceeded | Amount incurred in previous period |
Wuhan Zhuoling
| Wuhan Zhuoling | Purchasing goods or services | 35,219,394.72 | 8,983,368.26 |
Chengdu Winner
| Chengdu Winner | Purchasing goods | 280,008.49 | 356,964.47 |
or servicesBreo
| Breo | Purchasing goods or services | 84,650.44 | 107,172.57 |
Selling commodities/offering labor
Unit: yuan
| Related party | Related transaction content | Amount incurred in current period | Amount incurred in previous period |
Chengdu Winner
| Chengdu Winner | Selling goods or services | 6,870,744.20 |
Ellassay
| Ellassay | Selling goods or services | 59,342.47 | 1,407,141.59 |
SCGC
| SCGC | Selling goods or services | 130,787.61 | 230,380.54 |
Connected transaction of purchases and sales of goods, provision and acceptance of servicesNot applicable.
(2) Associated fiduciary management/contracting and entrusted management/subcontractingEntrusted management / contracting of the Company:
Unit: yuan
| Name of entrusting party / subcontractor | Name of entrusting party / contractor | Entrusted / contracting asset type | Fiduciary / contracting start date | Fiduciary / contracting termination date | Pricing basis of fiduciary income / contracting income | Fiduciary income / contracting income recognized in current period |
Associated fiduciary / contractingNot applicable.Entrustment management / subcontracting of the Company:
Unit: yuan
| Name of entrusting party / subcontractor | Name of entrusting party / contractor | Entrusted / subcontracting asset type | Entrusted / subcontracting start date | Entrusted / subcontracting termination date | Pricing basis of fiduciary fee / subcontracting fee | Fiduciary fee / subcontracting fee recognized in current period |
Associated management / subcontractingNot applicable.
(3) Related-party lease
The Company as the lessor:
Unit: yuan
| Name of lessee | Type of leased assets | Lease income recognized in the current period | Lease income recognized in the previous period |
The Company as the lessee:
Unit: yuan
| Name of lessor | Type of leased assets | Lease fee recognized in the current period | Lease fee recognized in the previous period |
Related-party lease descriptionNot applicable.
(4) Related-party guarantee
The Company as the guarantor
Unit: yuan
| Secured party | Amount guaranteed | Guarantee start date | Guarantee maturity date | Whether the guarantee has been fulfilled |
The Company as the secured party
Unit: yuan
| Guarantor | Amount guaranteed | Guarantee start date | Guarantee maturity date | Whether the guarantee has been fulfilled |
Qianhai Purcotton,Shenzhen Purcotton, LiJianquan
| Qianhai Purcotton, Shenzhen Purcotton, Li Jianquan | 50,000,000.00 | February 05, 2020 | February 05, 2021 | No |
Shenzhen Purcotton
| Shenzhen Purcotton | 200,000,000.00 | February 14, 2020 | February 14, 2021 | No |
Li Jianquan
| Li Jianquan | 20,000,000.00 | February 17, 2020 | February 17, 2021 | No |
Related-party guarantee
* All the above guarantees include related party guarantees that have signed the guarantee agreements but havenot actually borrowed loans.
(5) Related party loan at call
Unit: yuan
| Related party | Borrowing amount | Start date | Maturity date | Description |
Borrowing
BorrowingLending
(6) Asset transfer and debt restructuring of related party
Unit: yuan
Lending
Related party
| Related party | Related transaction content | Amount incurred in current period | Amount incurred in previous period |
(7) Key management personnel remuneration
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Key management personnel remuneration
| Key management personnel remuneration | 11,225,549.33 | 11,404,125.60 |
(8) Other connected transactions
NA
6. Accounts receivable and payable by related parties
(1) Receivables
Unit: yuan
| Project name | Related party | Closing Balance | Beginning balance | ||
| Book balance | Provision for bad debt | Book balance | Provision for bad debt | ||
Accounts receivable
| Accounts receivable | Chengdu Winner | 1,925,119.44 | 96,255.97 | 39,800.00 | 1,990.00 |
Accounts receivable
| Accounts receivable | Ellassay | 746,070.00 | 37,303.50 |
Accounts receivable
| Accounts receivable | SCGC | 35,880.00 | 1,794.00 | - | - |
Advances tosuppliers
| Advances to suppliers | Breo | 59,198.00 |
(2) Payables
Unit: yuan
| Project name | Related party | Ending book balance | Beginning book balance |
Accounts payable
| Accounts payable | Chengdu Winner | 69,711.48 | 67,630.00 |
Accounts payable
| Accounts payable | Wuhan Zhuoling | 17,557,893.52 | 4,705,258.45 |
Accounts payable
| Accounts payable | Breo | 51,511.50 |
Contract liabilities
| Contract liabilities | Chengdu Winner | 1,193,017.20 |
Contract liabilities
| Contract liabilities | SCGC | 11,946.90 | 29,486.73 |
7. Related party commitment
NA
8. Others
NA
XIII. Share-based payment
1. Overall status of share-based payment
√Applicable □ Not applicable
Unit: yuan
| Total amount of equity instruments granted by the company during the current period | 508,824,220.00 |
Total amount of equity instruments exercised by the company during thecurrent period
| Total amount of equity instruments exercised by the company during the current period | 0.00 |
Total amount of equity instruments invalidated by the company during thecurrent period
| Total amount of equity instruments invalidated by the company during the current period | 0.00 |
Range of the exercise price of the Company’s stock options outstanding atthe end of the period and the remaining term of the contract
| Range of the exercise price of the Company’s stock options outstanding at the end of the period and the remaining term of the contract | In case of the audited revenue in 2021 ≥ 12 billion yuan, the ownership proportion at the Company level is 100%; in case of 10 billion yuan ≤ the audited revenue in 2021 < 12 billion yuan, the ownership proportion at the Company level is 80%; in case of the audited business income in 2021 < 10 billion yuan, the restricted stock planned to be vested by the incentive object shall not be vested and become invalid. In case of the audited revenue in 2022 ≥ the audited revenue in 2021 * (1+30%), the ownership proportion at the Company level is 100%; in case of the audited revenue in 2021 * (1+20%) ≤ the audited revenue in 2022 < the audited revenue in 2021 * (1+30%), the ownership proportion at the Company level is 80%; in case of the audited business income in 2022 < the audited revenue in 2021 * (1+20%), the restricted stock planned to be vested by the incentive object shall not be vested and become invalid. |
Range of the exercise price of the Company’s other equity instrumentsoutstanding at the end of the period and the remaining term of the contract
| Range of the exercise price of the Company’s other equity instruments outstanding at the end of the period and the remaining term of the contract | None |
Other description2020 Restricted Stock Incentive Plan
1. Number of restricted stock granted
On November 27, 2020, the Company held the 15th meeting of the second board of directors and the 9th meeting of the second boardof supervisors, deliberated and passed the Proposal on the Company’s 2020 Restricted Stock Incentive Plan (Draft) and Its Abstract.On December 15, 2020, the Company held the sixth extraordinary general meeting of shareholders in 2020 to deliberate and pass theProposal on the Company’s 2020 Restricted Stock Incentive Plan (Draft) and Its Abstract. According to the above proposal, thenumber of restricted stock (Class II restricted stock) to be granted in this incentive plan is 6.5 million, and the underlying stockinvolved is A -share common stock, accounting for about 1.52% of the total capital stock of the Company at the time ofannouncement of the draft incentive plan. Among them, 5.9 million shares were granted for the first time, accounting for about 1.38%of the total capital stock o f the Company at the time of announcement of the draft incentive plan, and 90.77% of the total equity tobe granted. 0.6 million shares were reserved to be granted, accounting for about 0.14% of the total capital stock of the Company atthe time of announcement of the draft incentive plan, and 9.23% of the total equity to be granted. No more than 1,053 incentiveobjects will be granted at the first time, including directors, senior managers, and other persons deemed to need incentives by theBoard of Directors.On December 18, 2020, the Company’s 17th meeting of the second Board of Directors and the 11th meeting of the second Board ofSupervisors deliberated and adopted the Proposal on First Granting Restricted Stocks to Incentive Objects. In view of the fact that 17incentive objects gave up the restricted stock to be granted by the Company due to resignation or personal reasons, they no longerqualified for the incentive conditions. According to the 2020 Restricted Stock Incentive Plan (Draft), the Company adjusted theincentive objects and the number of grants. The number of incentive objects granted for the first time was adjusted from 1,053 to1,036, and the total number of restricted stock granted for the first time was adjusted from 5.90 million to 5.833 million.
2. Validity, grant date, vesting arrangement and lock-up period of this incentive plan
① The incentive plan shall be valid for no more than 48 months from the date of the first grant of restricted stock to the date whenall the restricted stock granted to the incentive object is vested or invalidated.
② After the incentive plan is approved by the general meeting of shareholders of the Company, the Board of Directors shalldetermine the grant date, and the grant date must be the trading day. The Company shall grant the restricted stock and completethe announcement within 60 days after the approval of the general meeting of shareholders. If the Company fails to completethe above work within 60 days, the implementation of this incentive plan will be terminated, and the restricted stock notgranted will become invalid.The Company shall, within 12 months after the deliberation and approval of the incentive plan by the general meeting of shareholders, specify the incentive objects reserved for award. If the incentive objects are not specified for more than 12 months, therestricted stock corresponding to the reserved part shall become invalid.
③ The vesting arrangement for the first grant of restricted stock in this incentive plan is shown in the following table:
| Vesting arrangement | Vesting period | Vesting ratio |
First vesting period
| First vesting period | From the first trading day of 17 months from the date of the first grant to the last trading day within 29 months from the date of the first grant | 50% |
Second vesting period
| Second vesting period | From the first trading day of 29 months from the date of the first grant to the last trading day within 41 months from the date of the first grant | 50% |
If the restricted stock corresponding to the reserved part is granted within 2020, the vesting arrangement for granting restricted stocksreserved in this incentive plan is consistent with the vesting arrangement for the first grant of restricted stock.If the restricted stock corresponding to the reserved part is granted within 2021, the vesting arrangement for granting restricted stocksreserved in this incentive plan is shown in the following table:
| Vesting arrangement | Vesting period | Vesting ratio |
First vesting period
| First vesting period | From the first trading day of 12 months from the date of reserved granting to the last trading day within 24 months from the date of reserved granting | 50% |
Second vesting period
| Second vesting period | From the first trading day of 24 months from the date of reserved granting to the last trading day within 36 months from the date of reserved granting | 50% |
If the incentive objects are directors and senior management of the Company, the shares transferred each year during their term ofoffice shall not exceed 25% of the total number of the Company’s shares they hold; they shall not transfer the shares they hold withinhalf a year after leaving the Company
2. Equity-settled share-based payments
√Applicable □ Not applicable
Unit: yuan
| Method for determining the fair value of equity instruments on the grant date | The fair value of the restricted stocks of directors and senior management is calculated using the Black-Scholes model option pricing formula; the fair value of other employee restricted stocks is determined by reference to the stock closing price on the grant date without taking into account the liquidity discount. |
Basis for the determination of the number of viable equityinstruments
| Basis for the determination of the number of viable equity instruments | None |
Reasons for significant differences between the current and previousestimates
| Reasons for significant differences between the current and previous estimates | None |
Accumulated amount of equity-settled share-based paymentsrecorded in capital reserves
| Accumulated amount of equity-settled share-based payments recorded in capital reserves | 91,858,541.52 |
Total amount of expenses recognized by equity-settled share-basedpayments in current period
| Total amount of expenses recognized by equity-settled share-based payments in current period | 68,120,291.90 |
Other description
The first attribution period fails to meet the performance conditions and becomes invalid.
3. Share-based payment settled by cash
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
NA
5. Others
NA
XIV. Commitment and contingencies
1. Important commitment issues
Important commitments on balance sheet date
(1) Large contract awarding contracts that have been signed and are in the process of being performed or to beperformed and their financial impactAs of December 31, 2021, the outstanding contracts among the large-value contracts signed by the Company andits subsidiaries that are being or are about to be performed are as follows:
| Project name | Amount |
Winner Medical (Chongyang) - Purification decoration and HVACengineering for Phase II surgical gown workshop
| Winner Medical (Chongyang) - Purification decoration and HVAC engineering for Phase II surgical gown workshop | 3,285,000.00 |
Winner Medical (Huanggang) - Sanitary pads packagingproduction line
| Winner Medical (Huanggang) - Sanitary pads packaging production line | 7,420,000.00 |
Winner Medical (Huanggang) - Sanitary pads productionequipment
| Winner Medical (Huanggang) - Sanitary pads production equipment | 31,500,000.00 |
Jiayu Winner- New plant project costs
| Jiayu Winner- New plant project costs | 895,189,115.88 |
Winner Medical (Tianmen) - EO sterilization workshop
| Winner Medical (Tianmen) - EO sterilization workshop | 4,232,500.00 |
Winner Medical (Tianmen) - Intelligent 3D e-commerce warehousefor pure cotton business
| Winner Medical (Tianmen) - Intelligent 3D e-commerce warehouse for pure cotton business | 50,547,500.00 |
Tianmen Winner - spunlace seven thread
| Tianmen Winner - spunlace seven thread | 22,809,900.00 |
Tianmen Winner - spunlace seven thread - cotton cleaner
| Tianmen Winner - spunlace seven thread - cotton cleaner | 24,835,768.00 |
Winner Medical (Wuhan) - Funds for pile engineering of 1-3sorting center
| Winner Medical (Wuhan) - Funds for pile engineering of 1-3 sorting center | 258,000,000.00 |
Winner Medical (Wuhan) - Phase II engineering fund
| Winner Medical (Wuhan) - Phase II engineering fund | 60,979,447.15 |
Total
| Total | 1,358,799,231.03 |
2. Contingencies
(1) Important contingencies on balance sheet date
The Company has no significant contingencies to be disclosed as of December 31, 2021.
(2) Explanation is also required if the Company has no important contingencies to be disclosedThe Company has no important contingencies to be disclosed.
3. Others
NA
XV. Post-balance sheet events
1. Important non-adjustment items
Unit: yuan
| Item | Description | Influence number | Reasons for |
| of financial position and operating results | influence number cannot be estimated |
Important foreign
investments
| Important foreign investments | On April 08, 2022, the Company held the fifth meeting of the Third Board of Directors and deliberated and approved the Proposal on Acquisition of 55% Equity of Longterm Medical. The Company plans to use its own funds of RMB 727.54 million for acquisition of 55% equity of Zhejiang Longterm Medical Technology Co., Ltd. from Mr. Wu Kangping, Ms. Huang Lepei and Mr. Wu Di. Longterm Medical is mainly engaged in the R&D, production and sales of high-end wound dressing (including silicone rubber foam, hydrocolloid, silica gel, aquogel, film application and stoma products). The transaction parties signed the Equity Transfer Agreement of Zhejiang Longterm Medical Technology Co., Ltd. on April 8, 2022. |
2. Profit distribution
Unit: yuan
| Profits or dividends to be distributed | 377,763,884.10 |
Profits or dividends declared fordistribution after deliberation and
approval
| Profits or dividends declared for distribution after deliberation and approval | 377,763,884.10 |
3. Sales return
The Company has no significant sales returns after the balance sheet date.
4. Other post-balance sheet events
NA
XVI. Other important issues
1. Correction of previous accounting errors
(1) Retrospective restatement
Unit: yuan
| Content of accounting error correction | Processing procedures | Report item name of each affected comparison period | Cumulative influence number |
(2) Prospective application
| Content of accounting error correction | Approval procedures | Reason for adopting prospective application |
2. Debt restructuring
Not applicable.
3. Assets replacement
(1) Exchange of non-monetary assets
Not applicable.
(2) Other asset replacement
Not applicable.
4. Pension plan
Not applicable.
5. Discontinued operation
Unit: yuan
| Item | Income | Cost | Total profit | Income tax expenses | Net profit | Profit from discontinued operations attributable to the owners of parent company |
Other descriptionNot applicable.
6. Segment information
(1) Determination basis and accounting policy of reporting segment
According to the Company's internal organizational structure, management requirements and internal reporting system, two reportingsegments have been determined, respectively: medical consumables and health consumer goods. Reporting segments of the Companyoffers different products or services or operates in different regions. Since each segment requires different technologies or marketingstrategies, the management of the Company manages the operating activities of each reporting segment separately and regularlyevaluates the operating results of these reporting segments to determine the allocation of resources to them and evaluate theirperformance.The inter-segment transfer price is determined on the basis of the actual transaction price, and the expenses indirectly attributable tothe segments are distributed among the segments in proportion to the income (as determined by the Company). Assets are allocatedaccording to the operations of a segment and the location of the assets. Liabilities of a segment include liabilities attributable to thatsegment arising from the operations of a segment. If expenses related to liabilities shared by multiple operating segments areallocated to those operating segments, such shared liabilities are also allocated to those operating segments.
(2) Financial information of the reporting segment
Unit: yuan
| Item | Medical consumables (segment 1) | Healthy consumer goods (segment 2) | Unallocated | Total |
Revenue
| Revenue | 3,983,206,080.68 | 4,054,214,732.23 | 8,037,420,812.91 |
Costs
| Costs | 2,091,899,484.86 | 1,936,347,161.31 | 4,028,246,646.17 |
Assets impairment loss& credit impairment loss
| Assets impairment loss & credit impairment loss | 57,501,336.49 | 46,705,131.00 | (2,967,234.00) | 101,239,233.49 |
Depreciation expenseand amortizationexpense
| Depreciation expense and amortization expense | 67,175,336.55 | 246,348,258.84 | 313,523,595.39 |
Operating profit / loss
| Operating profit / loss | 870,436,027.53 | 438,158,425.02 | 167,045,346.45 | 1,475,639,799.00 |
Non-revenue andexpense
| Non-revenue and expense | (12,879,287.72) | (12,879,287.72) |
Assets and liabilities
| Assets and liabilities |
Total assets
| Total assets | 5,441,722,100.96 | 3,370,887,494.54 | 4,454,000,604.87 | 13,266,610,200.37 |
Total liabilities
| Total liabilities | 950,676,601.26 | 1,279,372,778.69 | 349,452,607.68 | 2,579,501,987.63 |
(3) If the Company has no reporting segments, or cannot disclose the total assets and total liabilities of
each reporting segment, the reasons shall be explained
NA
(4) Other description
NA
7. Other important transactions and matters affecting the decision-making of investors
1. Urban Renewal Project of Winner Industrial Park
(1) Project Overview
On April 6, 2017, the Company and Shenzhen Galaxy Real Estate Development Co., Ltd. (hereinafter referred toas “Galaxy Real Estate”) signed the Cooperation Agreement on Urban Renewal Project of Winner Industrial Parkto apply for and implement the demolition and reconstruction of urban renewal and reconstruction of WinnerIndustrial Park in Longhua District, Shenzhen City (hereinafter referred to as “the Project”). The scope of land tobe demolished for the Project is a state-owned land that has been transferred. The land parcel number isA819-0123. The land area is 29,064.49 m
, and the current use is industrial land. According to the statutory planof [Pinus tabulaeformis area] of No.402-19&20&21, Bao’an District, Shenzhen City, the planned use of this landparcel is a second-class residential land. The land has been registered for title with a construction area of36,625.89 m
, used for office, plant and dormitory. The Company shall be the sole subject of rights to the saidparcel and all the buildings (structures) and appendages thereon. At present, the above target land and part of thebuilding are not mortgaged. At present, one to six storeys of Office Building 2, one to six storeys of DormitoryBuilding 3 and one to six storeys of Dormitory Building 4 have been mortgaged.
(2) Cooperation mode
The Company agrees to entrust the target land and building to Galaxy Real Estate for application for approval ofthe urban renewal unit plan, and accepts the relocation compensation of Galaxy Real Estate according to theconditions agreed in this agreement. Galaxy Real Estate is responsible for all the work related to the declaration ofrenewal unit plan of the target land and building and implementation of urban renewal, responsible for therelocation compensation and demolition and reconstruction funds, and enjoys the interest in the renewal project asthe single market implementer.After the renewal and reconstruction of the target land and buildings is approved by the urban renewal unit plan,the specific transformation and development intensity, planned purpose and indicators, etc. shall be discussed byGalaxy Real Estate with the Company in advance before the formal application for construction, but the finalapproval shall be subject to the relevant government departments.Galaxy Real Estate shall pay the cooperation consideration to the Company by paying the relocationcompensation consideration to the Company. The Company voluntarily chooses the relocation compensationmethod that combines monetary compensation and property right exchange (relocation), including: 1) monetarycompensation: 400 million yuan; 2) Property right exchange (relocation): the area of property right exchange(relocation) obtained by Party B shall be determined at 40% of the gross floor area for sale based on the grossfloor area for sale determined in the final approval of the special planning of the renewal unit of this Project.
(3) Current progress
Up to now, Galaxy Real Estate has paid the first margin of 50 million yuan and the second advance compensationof 100 million yuan for demolition to the Company according to the agreement. The project was announced inSeptember 2019 and approved in December 2019. Subsequent progress will be made in accordance with theprocedures stipulated by the government, and the specific progress will be subject to the government's approval.According to the agreement, if the project fails to obtain the approval of the renewal unit plan due to governmentpolicy or force majeure, either party has the right to terminate the contract, and the amount collected by theCompany will be returned to Galaxy Real Estate without interest within 30 days after the termination of thecontract.
2. Heyuan investment and construction project
(1) Background
In 2016, under the guidance and promotion of Shenzhen Longhua District Committee and District Government,the Company plans to transfer part of the production and logistics functions to Heyuan Zijin Linjiang IndustrialPark in response to the policy of supporting Heyuan City as a counterpart of Shenzhen City. In May 2016, theCompany and the People’s Government of Zijin County of Heyuan City signed the Agreement on Investment andConstruction of Medical Package and Cotton Household Goods Production Project (hereinafter referred to as the“Investment Agreement”), with the construction land of the project covering 200,000 m
.After the agreement was signed and the Land Use Notice was obtained, the Company submitted the planning plan,
project application and approval form as required, and started the construction. In August 2016, Winner Medical(Heyuan) obtained the Record Certificate of Enterprise Investment Projects in Guangdong Province issued by theDevelopment and Reform Bureau of Zijin County. In June 2017, Environmental Protection Bureau of ZijinCounty issued the Approval on the Environmental Impact Report Form of the Construction Project of WinnerMedical (Heyuan) Co., Ltd. In accordance with the agreement, the Zijin County Government assisted in obtaininga series of licenses such as state-owned land use right certificate and construction land planning permit.After the project was signed and started construction, the government required all construction projects underconstruction in Zijin Linjiang Industrial Park to stop due to land conflicts between the project site and the plannedHeyuan East Station of Jiangxi-Shenzhen High-speed Railway and the High-speed Railway New Town.Meanwhile, the relevant land use procedures were suspended.
(2) Current progress
In June 2019, the Regulatory Detailed Planning and Constructional Detailed Urban Design of the Core Area ofHeyuan High-speed Railway New Town was published to the public from June 22, 2019 to July 22, 2019.According to the final publicity content, it is determined that the square in front of Heyuan East Station ofHigh-speed Railway, National Highway 205 and the High-speed Railway New Town overlap with the project landof Winner Medical (Heyuan).In October 2019, the Company signed a tripartite agreement with the People's Government of Zijin County andthe Management Committee of Heyuan Jiangdong New District to clarify the overall disposal plan. The land usedfor Winner Medical (Heyuan)’s project and its above-ground buildings will be recovered by the People’sGovernment of Zijin County, and the three parties agree to determine the amount of compensation througharbitration. The People’s Government of Zijin County paid 30 million yuan to the Company as the performancebond.In November 2019, International Arbitration Court of Ganjiang New District issued the award ((2019) G.G.Z.ZiNo.095), which confirmed the termination of the original Investment Agreement, and the People's Government ofZijin County shall bear the attorney fees, legal costs and other expenses totaling 2,655,320.00 yuan. The landtransfer deposit of 3 million yuan shall be returned to t he Company and compensate for the economic loss of 550million yuan. The People's Government of Zijin County shall pay 50% of the amount before December 31, 2019and 50% before February 29, 2020. As of December 31, 2021, the Company has received the land transfer depositof 3 million yuan returned by the People's Government of Zijin County and paid the compensation of 314 millionyuan. The Company has also handed over the project land, above-ground buildings, equipment and facilities andrelevant supporting materials to the People's Government of Zijin County.
(3) Impact of this matter on the Company's operation
Winner Medical (Heyuan)'s business positioning is mainly the production, logistics and warehousing functions ofmedical package and cotton daily necessities. At present, the Company has transferred the production, logisticsand warehousing functions of Purcotton daily necessities to the Company's subsidiary Hubei Winner, and theproduction of medical package has been transferred to the Company's subsidiary Winner Medical (Chongyang).Hubei Winner and Winner Medical (Chongyang) have sufficient capacity to undertake the aforementionedproduction, logistics and warehousing business originally intended to be undertaken by Winner Medical (Heyuan).The above matters of Winner Medical (Heyuan) have not caused significant adverse impact on the normalproduction and operation of the Company.
8. Other
NA
XVII. Notes on main items of parent company's financial statement
1. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: yuan
| Class | Closing Balance | Beginning balance | ||||||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | Book value | |||||
| Amount | Proportion | Amount | Accruing proportion | Amount | Proportion | Amount | Accruing proportion | |||
Including:
| Including: |
Accounts receivableof provision for baddebt by combination
| Accounts receivable of provision for bad debt by combination | 528,512,638.89 | 100.00% | 26,295,000.03 | 4.98% | 502,217,638.86 | 711,959,379.83 | 100.00% | 32,314,540.44 | 4.54% | 679,644,839.39 |
Including:
| Including: |
Aging analysiscombination
| Aging analysis combination | 521,018,955.26 | 98.58% | 26,295,000.03 | 5.05% | 494,723,955.23 | 644,741,680.92 | 90.56% | 32,314,540.44 | 5.01% | 612,427,140.48 |
Other combination
| Other combination | 7,493,683.63 | 1.42% | 7,493,683.63 | 67,217,698.91 | 9.44% | 67,217,698.91 |
Total
| Total | 528,512,638.89 | 100.00% | 26,295,000.03 | 4.98% | 502,217,638.86 | 711,959,379.83 | 100.00% | 32,314,540.44 | 4.54% | 679,644,839.39 |
Provision for bad debt by single item:
Unit: yuan
| Name | Closing Balance | |||
| Book balance | Provision for bad debt | Accruing proportion | Reasons for provision | |
Provision for bad debt by combination: other combination - related parties within the group
Unit: yuan
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Accruing proportion | |
Other combination - relatedparties within the group
| Other combination - related parties within the group | 7,493,683.63 | 0.00 | 0.00% |
Total
| Total | 7,493,683.63 | 0.00 | -- |
Description of the basis for determining the combination:
According to the Company's accounting policy, the related parties within the group do not make provision for bad debts.Provision for bad debt by combination: aging analysis combination
Unit: yuan
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Accruing proportion | |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 518,947,822.64 | 25,947,391.23 | 5.00% |
1~2 years (including 2 years)
| 1~2 years (including 2 years) | 1,614,247.44 | 161,424.81 | 10.00% |
2~3 years (including 3 years)
| 2~3 years (including 3 years) | 386,715.98 | 116,014.79 | 30.00% |
More than 5 years
| More than 5 years | 70,169.20 | 70,169.20 | 100.00% |
Total
| Total | 521,018,955.26 | 26,295,000.03 | -- |
Description of the basis for determining the combination:
On December 31, 2021, the Company reviewed the appropriateness of the provision for bad debts of receivables in the previous yearaccording to the historical bad debt loss, and believed that the default probability has a strong correlation with the aging of accounts,and the account age is still a sign of whether the credit risk of the company's receivables has significantly increased. Therefore, theCompany's credit risk loss on December 31, 2021 is estimated based on the aging of accounts and estimated at the original loss ratio.
Provision for bad debt by combination:
Unit: yuan
| Name | Closing Balance | ||
| Book balance | Provision for bad debt | Accruing proportion | |
Description of the basis for determining the combination:
If the bad debt provision of accounts receivable is withdrawn according to the general model of expected credit loss, please refer tothe disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable √ Not applicable
Disclosure by aging
Unit: yuan
| Aging | Book balance |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 524,223,728.98 |
1~2 years
| 1~2 years | 1,614,247.44 |
2~3 years
| 2~3 years | 386,715.98 |
More than 3 years
| More than 3 years | 2,287,946.49 |
3~4 years
| 3~4 years | 1,728,440.97 |
4~5 years
| 4~5 years | 489,336.32 |
More than 5 years
| More than 5 years | 70,169.20 |
Total
| Total | 528,512,638.89 |
(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
| Class | Beginning balance | Amount of change in current period | Closing Balance | |||
| Accrual | Recovered or reversed | Write-off | Others | |||
Provision for baddebt of accountsreceivable
| Provision for bad debt of accounts receivable | 32,314,540.44 | 6,950,424.96 | 12,969,965.37 | 26,295,000.03 |
Total
| Total | 32,314,540.44 | 6,950,424.96 | 12,969,965.37 | 26,295,000.03 |
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
| Unit name | Amount recovered or reversed | Recovery way |
NA
(3) Accounts receivable actually written off at the current period
Unit: yuan
| Item | Amount written off |
Write-off of important accounts receivable:
Unit: yuan
| Unit name | Nature of accounts receivable | Amount written off | Reasons for write-off | Write-off procedures performed | Whether the payments arise from connected transactions |
Description of write-off accounts receivable:
NA
(4) Accounts receivable with top 5 ending balances by debtor
Unit: yuan
| Unit name | Ending balance of accounts receivable | Proportion in total other ending balance of accounts receivable | Ending balance of bad debt provision |
First
| First | 37,163,406.73 | 7.03% | 1,858,170.34 |
Second
| Second | 35,962,673.92 | 6.80% | 1,798,133.70 |
Third
| Third | 21,173,173.90 | 4.01% | 1,058,658.70 |
Fourth
| Fourth | 17,964,338.96 | 3.40% | 898,216.95 |
Fifth
| Fifth | 17,338,183.10 | 3.28% | 866,909.16 |
Total
| Total | 129,601,776.61 | 24.52% |
(5) Accounts receivable derecognized due to transfer of financial assets
NA
(6) Amount of assets and liabilities formed by transferring accounts receivables and continuinginvolvement
NAOther description:
NA
2. Other receivables
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other receivables
| Other receivables | 218,099,656.42 | 361,160,139.37 |
Total
| Total | 218,099,656.42 | 361,160,139.37 |
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
| Item | Closing Balance | Beginning balance |
2) Important overdue interest
| Borrower | Closing Balance | Overdue time | Overdue reason | Whether there is impairment and its judgment basis |
Other description:
3) Provision for bad debt
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit: yuan
| Project (or invested unit) | Closing Balance | Beginning balance |
2) Important dividends receivable with the aging more than 1 year
Unit: yuan
| Project (or invested unit) | Closing Balance | Aging | Reason for non-recovery | Whether there is impairment and its judgment basis |
3) Provision for bad debt
□ Applicable √ Not applicable
Other description:
(3) Other receivables
1) Other receivables classified by nature
Unit: yuan
| Nature of payment | Ending book balance | Beginning book balance |
Compensation for investment andconstruction project of Winner Medical(Heyuan)
| Compensation for investment and construction project of Winner Medical (Heyuan) | 238,655,320.00 | 387,655,320.00 |
Export drawback
| Export drawback | 7,187,293.68 | 7,190,798.48 |
Margin and deposit
| Margin and deposit | 5,370,048.01 | 3,650,806.01 |
Employee pretty cash
| Employee pretty cash | 333,170.12 | 175,183.18 |
Others
| Others | 2,795,640.07 | 1,528,756.45 |
Total
| Total | 254,341,471.88 | 400,200,864.12 |
2) Provision for bad debt
Unit: yuan
| Provision for bad debt | Stage 1 | Stage 2 | Stage 3 | Total |
| Expected credit losses over the next 12 months | Expected credit losses over the entire duration (no credit impairment occurred) | Expected credit losses over the entire duration (credit impairment has occurred) |
Balance on January 1,2021
| Balance on January 1, 2021 | 39,040,724.75 | 39,040,724.75 |
Balance on January 1,2021 in the currentperiod
| Balance on January 1, 2021 in the current period | —— | —— | —— | —— |
Accrual in current period
| Accrual in current period | 11,603,126.70 | 11,603,126.70 |
Reversal in currentperiod
| Reversal in current period | 14,402,035.99 | 14,402,035.99 |
Balance on December31, 2021
| Balance on December 31, 2021 | 36,241,815.46 | 36,241,815.46 |
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable √ Not applicable
Disclosure by aging
Unit: yuan
| Aging | Book balance |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 12,850,615.74 |
1~2 years
| 1~2 years | 2,815,513.64 |
2~3 years
| 2~3 years | 238,675,342.50 |
Total
| Total | 254,341,471.88 |
3) Provision, recovery or reversal of bad debt reserves in the current periodProvision for bad debts in current period:
Unit: yuan
| Class | Beginning balance | Amount of change in current period | Closing Balance | |||
| Accrual | Recovered or reversed | Write-off | Others | |||
Provision for baddebts of other
| Provision for bad debts of other | 39,040,724.75 | 11,603,126.70 | 14,402,035.99 | 36,241,815.46 |
receivables
Total
| Total | 39,040,724.75 | 11,603,126.70 | 14,402,035.99 | 36,241,815.46 |
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
| Unit name | Amount reversed or recovered | Recovery way |
NA
4) Other receivable actually written off at the current period
Unit: yuan
| Item | Amount written off |
Write-off of important other receivables:
Unit: yuan
| Unit name | Nature of other receivables | Amount written off | Reasons for write-off | Write-off procedures performed | Whether the payments arise from connected transactions |
Description of write-off of other receivablesNA
5) Other receivables with Top 5 ending balances by debtor
Unit: yuan
| Unit name | Nature of payment | Closing Balance | Aging | Proportion in total other ending balance receivable | Ending balance of bad debt provision |
First
| First | Receivables related to Heyuan project | 238,655,320.00 | 2-3 years | 93.83% | 35,798,298.00 |
Second
| Second | Deposit | 2,544,135.21 | Within 1 year | 1.00% | 127,206.76 |
Third
| Third | Deposit | 2,311,115.80 | Within 1 year | 0.91% | 115,555.79 |
Fourth
| Fourth | Others | 424,131.00 | Within 1 year | 0.17% | 21,206.55 |
Fifth
| Fifth | Deposit | 399,599.00 | Within 1 year | 0.16% | 19,979.95 |
Total
| Total | -- | 244,334,301.01 | -- | 96.07% | 36,082,247.05 |
6) Accounts receivable involving government subsidies
Unit: yuan
| Unit name | Name of government subsidy project | Closing Balance | Ending aging | Estimated collection time, amount and basis |
NA
7) Other receivables derecognized due to transfer of financial assets
NA
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvementNAOther description:
NA
3. Long-term equity investment
Unit: yuan
| Item | Closing Balance | Beginning balance |
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value |
Investment insubsidiaries
| Investment in subsidiaries | 908,737,678.63 | 4,086,994.48 | 904,650,684.15 | 728,737,678.63 | 4,086,994.48 | 724,650,684.15 |
Investment inassociatedenterprises andjoint enterprises
| Investment in associated enterprises and joint enterprises | 16,949,801.24 | 16,949,801.24 | 13,424,230.41 | 13,424,230.41 |
Total
| Total | 925,687,479.87 | 4,086,994.48 | 921,600,485.39 | 742,161,909.04 | 4,086,994.48 | 738,074,914.56 |
(1) Investment in subsidiaries
Unit: yuan
| Invested unit | Beginning balance (book value) | Increase or decrease in current period | Ending balance (book value) | Balance of impairment provision at the end of period | |||
| Further investment | Capital reduction | Provision for impairment | Others | ||||
Winner Medical(Huanggang)
| Winner Medical (Huanggang) | 267,491,627.79 | 267,491,627.79 |
Winner Medical(Jingmen)
| Winner Medical (Jingmen) | 27,242,761.31 | 27,242,761.31 |
ShenzhenPurcotton
| Shenzhen Purcotton | 50,000,000.00 | 80,000,000.00 | 130,000,000.00 |
Winner Medical(Chongyang)
| Winner Medical (Chongyang) | 33,629,806.08 | 33,629,806.08 |
Winner Medical(Jiayu)
| Winner Medical (Jiayu) | 36,436,595.28 | 36,436,595.28 |
Winner Medical(Tianmen)
| Winner Medical (Tianmen) | 39,697,276.28 | 39,697,276.28 |
Winner Medical(Hong Kong)
| Winner Medical (Hong Kong) | 1,456,720.00 | 1,456,720.00 |
Winner Medical(Yichang)
| Winner Medical (Yichang) | 18,595,897.41 | 18,595,897.41 |
Winner MedicalMalaysia
| Winner Medical Malaysia | 0.00 | 4,086,994.48 |
Winner Medical(Heyuan)
| Winner Medical (Heyuan) | 100,000,000.00 | 100,000,000.00 |
Winner Medical(Wuhan)
| Winner Medical (Wuhan) | 100,000,000.00 | 100,000,000.00 |
PureH2B
| PureH2B | 50,000,000.00 | 100,000,000.00 | 150,000,000.00 |
Pure HB(Shanghai)
| Pure HB (Shanghai) | 100,000.00 | 100,000.00 |
Total
| Total | 724,650,684.15 | 180,000,000.00 | 904,650,684.15 | 4,086,994.48 |
(2) Investment in associated enterprises and joint enterprises
Unit: yuan
| Invested entity | Beginning balance (book value) | Increase or decrease in current period | Ending balance (book value) | Balance of impairment provision at the end of period | |||||||
| Further investment | Capital reduction | Investment gains and losses recognized by the equity method | Adjustment of other comprehensive income | Changes in other equity | Declared payment of cash dividends or profits | Provision for impairment | Others | ||||
I. Cooperative enterprise
I. Cooperative enterpriseII. Joint venture
| Chengdu Winner | 13,424,230.41 | 3,525,570.83 | 16,949,801.24 |
Subtotal
| Subtotal | 13,424,230.41 | 3,525,570.83 | 16,949,801.24 |
Total
| Total | 13,424,230.41 | 3,525,570.83 | 16,949,801.24 |
(3) Other description
NA
4. Revenue and cost
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period | ||
| Income | Cost | Income | Cost | |
Main business
| Main business | 3,750,575,739.60 | 2,431,548,447.53 | 8,810,788,637.62 | 4,299,577,993.11 |
Other businesses
| Other businesses | 46,506,912.98 | 6,176,043.52 | 79,322,320.00 | 24,356,964.05 |
Total
| Total | 3,797,082,652.58 | 2,437,724,491.05 | 8,890,110,957.62 | 4,323,934,957.16 |
Income related information:
Unit: yuan
| Contract classification | Segment 1 | Segment 2 | Total |
Type of goods
| Type of goods |
Including:
| Including: |
Classified by operatingarea
| Classified by operating area |
Including:
| Including: |
Market or customer type
| Market or customer type |
Including:
| Including: |
Contract type
| Contract type |
Including:
| Including: |
Classified by commoditytransfer time
| Classified by commodity transfer time |
Including:
| Including: |
Classified by contractperiod
| Classified by contract period |
Including:
| Including: |
Classified by saleschannels
| Classified by sales channels |
Including:
| Including: |
Total
| Total |
Information related to performance obligations:
NAInformation related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations signed but not yet performed or completed at the end of thisreporting period is RMB 0.00, of which RMB is expected to recognize the income, RMB is expected to recognize the income and
RMB is expected to recognize the income.Other description:
5. Investment income
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Long-term equity investment gains measuredby employing the equity method
| Long-term equity investment gains measured by employing the equity method | 3,525,570.83 | 4,565,754.26 |
Investment income from purchasingfinancial products
| Investment income from purchasing financial products | 15,019,953.42 | 14,559,320.69 |
Investment income from disposal of tradablefinancial assets
| Investment income from disposal of tradable financial assets | 70,324,759.75 |
Total
| Total | 88,870,284.00 | 19,125,074.95 |
6. Others
NA
XVIII. Further information
1. Current non-recurring gain and loss statement
√Applicable □ Not applicable
Unit: yuan
| Item | Amount | Description |
Profit and loss on disposal of non-currentassets
| Profit and loss on disposal of non-current assets | (9,080,387.29) |
Government subsidies included into thecurrent profits and losses, except thosegovernment subsidies, which are closelyrelated to the regular business of a companyand continuously enjoyed in accordance withnational policies, a certain standard quota orquantity of the state
| Government subsidies included into the current profits and losses, except those government subsidies, which are closely related to the regular business of a company and continuously enjoyed in accordance with national policies, a certain standard quota or quantity of the state | 105,132,971.30 |
In addition to the effective hedging businessrelated to the Company’s normal businessoperations, the profit and loss from fair valuechanges arising from holding tradablefinancial assets and tradable financialliabilities, as well as the investment incomefrom disposal of tradable financial assets,tradable financial liabilities, andavailable-for-sale financial assets.
| In addition to the effective hedging business related to the Company’s normal business operations, the profit and loss from fair value changes arising from holding tradable financial assets and tradable financial liabilities, as well as the investment income from disposal of tradable financial assets, tradable financial liabilities, and available-for-sale financial assets. | 158,186,445.51 |
Income and expenditure other than thosementioned above
| Income and expenditure other than those mentioned above | (2,530,827.65) |
Less: Amount affected by income tax
| Less: Amount affected by income tax | 41,394,596.42 |
Amount of minority shareholders'equity affected
| Amount of minority shareholders' equity affected | (878.83) |
Total
| Total | 210,314,484.28 | -- |
Details of other profit and loss items that conforming to the definition of non-recurring profit and loss:
□ Applicable √ Not applicable
The Company does not have details of other profit and loss items that conforming to the definition of non-recurring profit and loss.Information on the definition of non-recurring profit and loss items enumerated in “Interpretative Announcement No. 1 onInformation Disclosure of Public Securities Issuing Companies - Non-recurrent Profits and Losses” as the recurring profit and lossitems
□ Applicable √ Not applicable
2. Return on net assets and earnings per share
| Reporting profit | Weighted average return on net assets | Earnings Per Share | |
| Basic EPS (yuan/share) | Diluted EPS (yuan/share) | ||
Net profit attributable to commonshareholders of the Company
| Net profit attributable to common shareholders of the Company | 11.76% | 2.91 | 2.91 |
Net profit attributable to commonshareholders of the Company afterdeduction of non-recurring profitsand losses
| Net profit attributable to common shareholders of the Company after deduction of non-recurring profits and losses | 9.76% | 2.41 | 2.41 |
3. Differences in Accounting Data under Domestic and Foreign Accounting Standards
(1) The difference between net profits and net assets in financial statements disclosed according to the
International Accounting Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
(2) The difference between net profits and net assets in financial statements disclosed according to theOverseas Accounting Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
(3) Causes for differences in accounting data under domestic and foreign accounting standards. If thedifference adjustment has been made to the data audited by the overseas audit institution, the name ofthe overseas audit institution shall be indicatedNot applicable.
4. Others
NA
In case of a divergence of the interpretation the Chinese version of the annual report shall prevail