Winner Medical Co., Ltd.2022 Semiannual Report
[Disclosure time]
Stock code: 300888
Winner Medical Co., Ltd.Semi-annual Report
Winner Medical Co., Ltd.Semi-annual Report
Caring for health and life, making a better world
Section I Important Notes, Contents, and Definitions
The Board of Directors, the Board of Supervisors and directors, supervisors andsenior management of Winner Medical hereby guarantee that the statement inthis Semi-annual Report is authentric, accurate and complete without false ormisleading information or material omission and will assume all the legalliabilities, individually and jointly.Li Jianquan, the head of the Company, Fang Xiuyuan, the accounting head, andWu Kezhen, the head of accounting body (accounting manager), guarantee theauthenticity, accuracy, and completeness of the financial report in this semi-annual report.All directors of the Company personally attended the board meeting for reviewingthis report.The forward-looking contents in this report, such as the future developmentstrategy and performance planning, are the goals sets by the Company, which areplanned matters. The achievement of the goals depends on many factors,including market change, which is uncertain. So these contents are not thecompany's profit forecast for the next year and do not constitute a substantialcommitment of the Company to investors and related parties. Investors andrelated parties should be fully aware of related risks and understand thedifferences among plans, forecasts, and commitments. Investors are asked tobeware of investment risks!The Company does not plan to distribute cash dividends, issue bonus share, orincrease the share capital from reserves.
Table of Contents
Section I Important Notes, Contents, and Definitions ...... 2
Section II Company Profile and Major Financial Indicators ...... 7
Section III Management Discussion and Analysis ...... 10
Section IV Corporate governance ...... 51
Section V Environment and Social Responsibility ...... 53
Section VI Important Matters ...... 60
Section VII Changes in Shares and Shareholders ...... 66
Section VIII Preferred Shares ...... 72
Section IX Information Related to Bonds ...... 73
Section X Financial Report ...... 74
Document Catalog(I) Financial statements containing the signatures and seals of the person in charge of the Company, the accounting head, and theperson in charge of the accounting body (accounting manager).(II) 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 shareholder of the Company before the initial public offering |
Xiamen Leyuan
| Xiamen Leyuan | Refers to | Xiamen Leyuan Investment Partnership (L.P.), a shareholder of the Company before the initial public offering |
Xiamen Yutong
| Xiamen Yutong | Refers to | Xiamen Yutong Investment Partnership (L.P.), a shareholder of the Company before the initial public offering |
SCGC
| SCGC | Refers to | Shenzhen Capital Group Co., Ltd., a shareholder of the Company before the initial public offering |
Xiamen Huikang
| Xiamen Huikang | Refers to | Xiamen Huikang Investment Partnership (L.P.), a shareholder of the Company before the initial public offering |
Xiamen Zepeng
| Xiamen Zepeng | Refers to | Xiamen Zepeng Investment Partnership (L.P.), a shareholder of the Company before the initial public offering |
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) |
Huanggang Purcotton
| Huanggang Purcotton | Refers to | Huanggang Purcotton Technology Co., Ltd., a wholly-owned subsidiary of Purcotton |
Winner Medical Malaysia
| Winner Medical Malaysia | Refers to | Winner Medical Malaysia Sdn. Bhd., a subsidiary controlled by the Company |
Winner Medical (HongKong)
| 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 |
CompanyPureH2B
| 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 | January 01, 2022 to June 30, 2022 |
Longterm Medical
| Longterm Medical | Refers to | Zhejiang Longterm Medical Technology Co., Ltd., an enterprise with 55% equity acquired by the Company |
Pingan Medical Device
| Pingan Medical Device | Refers to | Winner Pingan Medical (Hunan) Co., Ltd., formerly known as Hunan Pingan Medical Device Technology Co., Ltd., an enterprise with 68.70% equity acquired by the Company |
Guilin Latex
| Guilin Latex | Refers to | Winner (Guilin) Latex Products Co., Ltd., formerly known as "Guilin Zizhu Latex Products Co., Ltd.", an enterprise with 100.00% equity acquired by the Company |
Section II Company Profile and Major Financial IndicatorsI. Company Profile
| Stock abbreviation | Winner Medical | Stock code | 300888 |
Stock exchange
| Stock exchange | Shenzhen Stock Exchange |
Company name in Chinese
| Company name in Chinese | Winner Medical Co., Ltd. |
Chinese abbreviation of thecompany (if any)
| Chinese abbreviation of the company (if any) | Winner Medical |
Company name in foreignlanguage (if any)
| Company name in foreign language (if any) | Winner Medical Co., Ltd. |
Company short name in foreignlanguage (if any)
| Company short name in foreign language (if any) | Winner Medical |
Legal representative of thecompany
| Legal representative of the company | Li Jianquan |
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 | F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen |
Tel
| Tel | 0755-28066858 | 0755-28066858 |
Fax
| Fax | 0755-28134688 | 0755-28134688 |
| investor@winnermedical.com | investor@winnermedical.com |
III. Other Information
1. Contact information
Whether the Company's registered address, office address and postal code, company website and email were changed during thereporting period
□ Applicable ? Not applicable
There is no change in the Company's registered address, office address and postal code, company website and email during thereporting period, as shown in 2021 annual report.
2. Information disclosure and keeping place
Whether information disclosure and the place where the semi-annual report is kept were changed during the reporting period
□ Applicable ? Not applicable
The newspapers selected by the Company for information disclosure, the websites designated by the China Securities RegulatoryCommission (CSRC) for publishing the semi-annual report, and the place where the semi-annual report is kept were not changedduring the reporting period. See the 2021 Annual Report for details.
3. Change of registration
Whether the registration status was changed during the reporting period
□ Applicable ? Not applicable
There were no changes in the Company's registration during the reporting period. See the 2021 Annual Report for details.
IV. Major Accounting Data and Financial IndicatorsWhether the Company needs to retroactively adjust or restate the accounting data of the previous years
□Yes ?No
| Current reporting period | Same period last year | Increase/decrease in this reporting period compared with the same period of the previous year |
Operating income (yuan)
| Operating income (yuan) | 5,157,944,495.72Note1 | 4,059,865,654.92 | 27.05% |
Net profits attributable toshareholders of listedcompanies (yuan)
| Net profits attributable to shareholders of listed companies (yuan) | 892,823,503.14 | 761,038,730.24 | 17.32% |
Net profits attributable toshareholders of the listedcompany after deduction ofnon-recurring profits and losses(yuan)
| Net profits attributable to shareholders of the listed company after deduction of non-recurring profits and losses (yuan) | 820,558,767.23 | 627,255,609.19 | 30.82% |
Net cash flow from operatingactivities (yuan)
| Net cash flow from operating activities (yuan) | 801,150,899.38 | 197,604,865.77 | 305.43%Note2 |
Basic EPS (yuan/share)
| Basic EPS (yuan/share) | 2.1193 | 1.7844 | 18.77% |
Diluted EPS (yuan/share)
| Diluted EPS (yuan/share) | 2.1193 | 1.7715 | 19.63% |
Weighted average return on netassets
| Weighted average return on net assets | 8.17% | 7.06% | 1.11% |
| End of the reporting period | End of the previous year | Increase/decrease at the end of the reporting period compared to the end of the previous year |
Total assets (yuan)
| Total assets (yuan) | 15,522,494,964.51 | 13,266,610,200.37 | 17.00% |
Net assets attributable toshareholders of listedcompanies (yuan)
| Net assets attributable to shareholders of listed companies (yuan) | 10,991,151,831.97 | 10,674,912,166.80 | 2.96% |
Note 1: The income in the reporting period includes the consolidated operating income of Longterm Medical from May to June, whichis the newly acquired business of RMB 86,191,200 and the purchase date of Longterm Medical is April 30, 2022;Note 2: During the reporting period, the net cash flow from operating activities increased by 305.43% compared with last year, whichwas mainly due to the fact that: (1) in 2020, the Company applied a credit policy of 100% advance payment for the protective products,and in the first half of 2021, the Company's credit policy for protective products has returned to the normal level; (2) the goodperformance in 2020 has resulted in more taxes and fees paid after the final settlement in the first half of 2021.V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences between net profits and net assets in financial statements disclosed according to theInternational 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 AccountingStandards (IAS) and Chinese Accounting Standards during the reporting period.
2. Difference between net profits and net assets in financial statements disclosed according to the Foreign
Accounting Standards 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.VI. Non-recurring Profit and Loss Items and Amount?Applicable □ Not applicable
Unit: yuan
| Item | Amount | Description |
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) | （2,401,700.24） |
Government subsidies included into current profits andlosses, except the government subsidies which are closelyrelated to the normal business operations of the Companyand conform to the national policies and regulations, and
| Government subsidies included into current profits and losses, except the government subsidies which are closely related to the normal business operations of the Company and conform to the national policies and regulations, and | 28,755,938.72 |
continuously granted in accordance with a certain standardquota or amount.
In addition to the effective hedging business related to theCompany's normal business operations, the profit and lossfrom fair value changes arising from holding tradingfinancial assets and trading financial liabilities, as well asthe investment income from disposal of trading financialassets, trading financial liabilities and available-for-salefinancial 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 trading financial assets and trading financial liabilities, as well as the investment income from disposal of trading financial assets, trading financial liabilities and available-for-sale financial assets | 64,226,078.84 |
Income and expenditure other than those mentioned above
| Income and expenditure other than those mentioned above | （4,634,764.37） |
Less: Amount affected by income tax
| Less: Amount affected by income tax | 13,612,940.25 |
Amount of minority shareholders' equity affected(after tax)
| Amount of minority shareholders' equity affected (after tax) | 67,876.79 |
Total
| Total | 72,264,735.91 |
Other profit and loss items that are consistent with the definition of non-recurring profit and loss:
□ Applicable ? Not applicable
There was no other profit and loss items that are consistent with the definition of non-recurring profit and loss.Explanation on defining the non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 on InformationDisclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses as recurring profit and loss items
□ Applicable ? Not applicable
There was no circumstance in which non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 onInformation Disclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses are defined as non-recurringprofit and loss items.
Section III Management Discussion and AnalysisI. Main Business of the Company during Reporting Period
The Company needs to comply with the disclosure requirements of the "Medical Device Business" stipulated in the No. 4 Guidelineof Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by Growth Enterprises:
The Company needs to comply with the disclosure requirements of the "Textile and Apparel Business" stipulated in the No. 3Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.(I) Main Business of the Company during Reporting PeriodWinner Medical is a health enterprise developing both medical and consumption products under its three brands of "Winner","Purcotton" and "PureH2B". Specifically, the Company has been adhering to the core business principle of "Quality before profit,brand before speed, social value before corporate value". Through continuous innovation and expansion of industrial boundaries, theCompany has developed from a single manufacturer of medical consumables into a large medical health enterprise covering woundcare, infection prevention, 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, traditional woundcare and dressing products, infection control products in operating room, protective products and disinfection and cleaning productsfor 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 US FDAcertification and the Japanese Ministry of Health, Labour and Welfare certification, and exported to Europe, America, Japan and othercountries. In 2005, "Winner" brand entered the domestic hospital and drugstore market. With its excellent product quality and service,Winner Medical gradually established a good brand and reputation in domestic hospitals and drugstores. Since the outbreak of COVID-
Winner
Wound careMedical
ConsumablesInfection protection
Infection protectionDisinfection andcleaning
Disinfection andcleaningNon-woven consumergoods
Non-woven consumergoodsTextile consumer goods
Textile consumer goodsBeauty products and
perfumes
Beauty products and
perfumesHealth & personal care
Health & personal care
Home sports
Cotton tissues, sanitary pads, wet tissuesBaby supplies, baby clothing, adult clothing
19 in 2020, the "Winner" brand prevention products have entered the hospital and the civilian market. Thanks to the public commitmentnot to increase prices and the quality of its products, it has won the unanimous praise at home and abroad, from government units andthe 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 comprehensive solutions of wound care, infection prevention, disinfection and cleaning. Disposable operating roomconsumables can more effectively reduce nosocomial infection than reusable medical products. With more attention of the state andhospitals to nosocomial infection and residents' attention to personal health environment, disposable operating room consumables aregradually accepted by the domestic market. Winner Medical's medical dressing product line has been expanded from traditionaldressing products mainly focusing on gauze products to high-end wound dressing products, such as silica gel foam dressing,hydrocolloid dressing, super absorbent pad, negative pressure drainage products, etc., which are mainly applied to chronic woundhealing scenes such as diabetes, large-area burns and wounds. The Company's technical level in the field of high-end wound dressingshas been in the forefront of the industry, and is expected to become the core products for the development of Winner Medical.
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 other non-wovenconsumer goods, as well as baby supplies, baby clothing, baby products, adult clothing and other textile consumer goods. Purcottonadvocates the life concept of "comfort, health, environmental protection", replacing chemical fiber with cotton and keeping away fromchemical stimulation. It provides overall solutions for different life scenes, having a good user reputation and formed a fullydifferentiated 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 adopts globalhigh-quality cotton to control product quality and safety from the source. According to the high standard of medical consumables, allkinds of pollution sources are strictly controlled in the production process. Disposable underwear, newborn baby clothes and otherclose-fitting clothing are packaged with medical grade sterilization to further ensure the safety and environmental protection of theproducts. Purcotton products cover multiple consumer groups, such as mothers and infants, children and adults, and span multipleproduct lines, such as high-end cotton wipes, 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, personalcare, sports and other healthy and beautiful life needs. "PureH2B" has sold products through offline stores, online official website andWechat 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 products | For absorbing wound exudate, dressing wounds, and sports protection | Gauze sheets, non-woven sheets, gauze bandage, dressing change kits, etc. | |
| Advanced wound care 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 | OR infection control products | For preventing infections in the operating room | Surgical packs, surgical gowns, etc. | |
| Disease prevention and control products | For occupational protection of medical staff and patient isolation | Masks, protective clothing, isolation gowns, gloves, foot straps, hats, etc. |
Disinfecti
on &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-
wovenconsumer
goods
| Non-woven consumer goods | Cotton tissues | |
| Wet wipes | ||
| Sanitary pads |
| Other non-woven consumer goods | Cotton swabs, makeup cotton pads, disposable underwear, etc. |
Textileconsumergoods
| 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 nonwoven fabric are as follow:
| Class | Main Purpose | Image |
Cotton spun
lace non-
wovenfabric
| Cotton spun lace 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 cotton yar) is implemented in a unified manneraccording to the Company's rules on its strategic procurement. The Company implements a strict supplier management system to ensureproduct quality and stable product supply. The Company has set a supplier directory and a perfect update and elimination mechanismto dynamically manage existing suppliers and new suppliers, which enables the Company to preferentially cooperate with the supplierswith the highest assessment results. For new suppliers, the Company has made strict selection criteria and supplier development andprocess management systems, including on-site inspection on suppliers; for suppliers with poor or even unqualified annual performance,the Company will add them to the key watch list or eliminate them. Generally, the Company will sign an annual framework agreementwith a supplier to specify the cooperation content and the annual cooperation arrangement, and specific procurement contracts will besigned 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 more than 30years of experience in the production of medical supplies, Winner is a leading medical consumables brand in the Chinese market andwith a global vision. With "caring for health and life, making a better world" 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-operated 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 "changing theworld with pure cotton", 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 beauty salons,free makeup, and seminars. With "Love, protect and enjoy nature" as its brand vision, and "Influence the mainstream consumptionattitude with the philosophy of 'inner health brings outer beauty', and attract mainstream consumers with natural products" as its mission,PureH2B is bringing consumers a new all-round digital retail experience.
WinnerThird-party B2C platforms, such as Tmall, JD.com and Amazon
Third-party B2C platforms, such as Tmall, JD.com and Amazon
Medicalconsumables
Healthy consumer
goods
Online channels
Offline channels
Online channels
Offline channels
Domestic salesOverseas sales
E-commerce platforms
Real stores
Winner's own brand at hospitalsWinner's own brand at OTC drugstoresWinner's own brand salesOEM modeOfficial website and Wechat mini programs of
Purcotton, etc.Self-operated flagship stores at Tmall and JD.com
Self-operated flagship stores at Tmall and JD.com
Warehousing by e-commerce platforms, such as
JingDong self-run stores and Tmall Supermarket
Directly operated and franchised chain stores
Supermarkets, convenience stores and beauty stores
Bulk purchase by key accounts or customization
(IV) Main Driving Factors of Performance
1. Medical consumables industry and consumer goods industry will keep growing rapidlyAs 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 that beforethe COVID-19 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 get higher;on the other hand, as the Chinese government attaches importance to the medical consumables industry, the supervision over theindustry are continuously strengthened while the reserves of medical consumables are increasing. Therefore, companies that do notcomply with laws and regulations will surely be eliminated. In addition, China's medical dressings are changing from traditionaldressings to high-end wound dressings, and it is expected to replace imported dressings by domestic dressings step by step. The medicalconsumables market 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 steadily, showing an obvious trend of consumptionupgrading. Consumers' demand for green, healthy, and environmentally friendly products is increasing, bringing good opportunities inthe 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-grade qualitymanagement system in the industry, and has passed the ISO13485 Medical Devices Quality Management System Certification. Itsproduct quality complies with the European, American, Japanese, and Chinese standards. Winner Medical enjoys a high brandreputation and recognition. In 2020, Winner Medical was praised by the Joint Prevention and Control Mechanism of the State Councilas a well-deserved "ordnance factory" in fighting the pandemic. Its wholly-owned subsidiary Winner Medical (Huanggang) wasawarded the title of "National Advanced Unit for Fighting the COVID-19 Pandemic" by the CPC Central Committee and the StateCouncil. It is also the only enterprise awarded the title in Hubei Province. In May 2021, Winner Medical was selected by the Federationof Shenzhen Industries as the "Benchmarking Enterprise in China's Medical Consumables Sector" and at the same time recognized asan "International Renowned Brand" by the United Nations Industrial Development Organization. In December 2021, "pure cottonspunlace non-woven fabrics and its products" of Winner Medical was awarded as the national single champion of manufacturingindustry. In 2022, the epidemic prevention department of the Company was successively awarded the title of "Worker Pioneer" by AllChina Federation of Trade Unions and Shenzhen Federation of Trade Unions.Purcotton is committed to fulfilling consumers' upgrading demand for high-quality products which are "comfortable, healthy, andenvironmentally friendly". With constantly winning recognition from consumers since its launch in 2009, Purcotton has rapidly growninto a leading brand of maternal and child products on e-commerce platform, and has a high market share in the field of consumerproducts. In October 2019, Purcotton won the reputation of "70 Brand of the 70th Anniversary of the Founding of New China"sponsored by CCTV. In January 2021, Purcotton was honored as one of the "Shenzhen Top Brands" by Federation of ShenzhenIndustries. In April 2021, Purcotton was included into the list of the second "Shenzhen Top 100 Brands" announced by ShenzhenQuality City Promotion Association.In conclusion, with high brand value, the Winner Medical and Purcotton brands will help the Company enhance customer loyalty,stabilize product prices, and expand its market share in the competitive market, thereby ensuring its sustainable and stable profitability.II. Analysis of Core Competitiveness
1. Advantages of business philosophy and corporate culture
With offering quality products as its mission, the Winner Medical brand aims to lead in the medical dressing industry, to grow from asmall Chinese enterprise offering lower-price products to a large international enterprise offering high-quality products recognized bydeveloped countries, bringing Chinese medical dressings to the international stage. With "caring for health and life, making a betterworld" as its vision, the brand keeps focusing on product quantity and innovations, and making its way into the medical consumablesand high-end medical dressing market. Cotton fiber has ten prominent advantages, including natural, safe, comfortable, naturallydegradable, high output ratio, drought-resistant, salt and alkali-resistant, environmentally friendly, time-honored, as well as greateconomic and social value. With its corporate vision of "changing the world with pure cotton", Purcotton advocates a lifestyle withpure cotton by applying "comfortable, healthy, and environmentally friendly" in all aspects of daily life, to help customers raise lifequality, and deliver the brand concept of "reassurance, happiness and sustainability" to consumers. Sticking to the "cotton fiber only"principle in its operation, Purcotton aims to develop recyclable and renewable resources, gradually replace chemical fibers with naturalfibers, and give full play to the use value and environmental protection value of cotton fibers, following the path of low carbon,environmental friendly and sustainable development. With "love nature, protect nature, enjoy nature" as its brand vision, PureH2Binsists on the principle of pursuing beauty without sacrificing health for health is beauty. PureH2B select natural cosmetics and toiletries,healthy food and health products, 3C and health equipment with excellent experience from around the world for customers. Meanwhile,the groundbreaking, innovative natural products developed independently by PureH2B are winning the trust of consumers with theirapplicability and safety, meeting the needs of consumers who pursue both quality life and health and environmental protection. Thevisions and business philosophies regarding the company's three brands are focused on human health, environmental protection, andimproving the quality of life, which are in line with humans' sustainable development strategy.
The Company will always uphold its core operating principle of "prioritizing quality over profit, brand over speed, and socialresponsibility over corporate value", and stick by its core values of "others first, responsibility, unity and cooperation, hard work, self-criticism, and sustainable development". The Company promotes healthy sports such as running, mountain climbing, and ball games.The Company is weakening the power from titles to reduce bureaucracy, and creating open workplaces to ensure efficient cross-department communication. During the epidemic, the Company responded quickly and made every effort to ensure the production ofprotective products. It carried out a series of activities to improve the rapid response capability to market demand in terms of decision-making management, process integration, product and equipment innovation, and industry chain integration. Within one month at thebeginning of the epidemic outbreak in January 2020, the Company provided 108.9 million masks and 114,000 pieces of protectiveclothing to major hospitals in Hubei, showing the Company's efficient internal coordination capability.
2. Advantages of R&D and innovation
The Company independently developed the pure cotton spunlace non-woven technology in 2005, and has built a complete technologycluster based on the technology, obtaining patent licenses in more than 30 countries and regions including the United States, Europe,and Japan. The silica gel foam dressing and foam dressings successfully developed and launched by the Company have been awardedwith China's registration certificate for Class II and Class III medical devices respectively. This kind of high-end wet wound dressingis specially designed for the vulnerable skin of the elderly with chronic diseases, facilitates the observation of wound healing by medicalstaff, and also provides patients with a cost-effective solution for chronic wound treatment, effectively solving the clinical pain pointssuch as the adhesion of traditional gauze dressings to wounds and frequent dressing changes. The innovative application of pure cottonspunlace non-woven fabrics in infection prevention products, such as protective clothing, surgical gowns, and isolation gowns, has notonly alleviated the shortage of raw materials during the pandemic but also improved the breathability and comfort of anti-pandemicproducts, which is safe and environmentally friendly. In the field of consumer products, the Company has developed pure cotton tissues,pure cotton wet tissues, sanitary pads with pure cotton surface, as well as disposal cleansing towels, disposable underwear and otherproducts. It has been invited to participate in the development of a number of national standards and industry standards, drafting anddeveloping performance requirements for pure cotton non-woven surgical dressings, and technical specifications for contact traumadressings and children's masks. As the first and major drafter, Purcotton, a wholly-owned subsidiary of the Company, led thedevelopment of national standards for cotton tissues (GB/T 40276-2021), which requires that the fiber composition and content ofcotton tissues shall be identified, and the fiber content tolerance shall comply with the provisions of GB/T 29862 (implemented onDecember 1, 2021). In December 2021, "pure cotton spunlace non-woven fabrics and its products" of the Company was awarded asthe national single champion of manufacturing industry.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, and partneredwith Wuhan Textile University to carry out "repolymer gauze" for spinning technology; On December 27, the Company and WuhanTextile University jointly established the Innovation Research Institute of Winner Medical & Wuhan Textile University to acceleratethe transformation of scientific and technological achievements. Xu Weilin, academician of the Chinese Academy of Engineering,deputy party secretary and principal of Wuhan Textile University, was appointed as the president of the Research Institute. At the sametime, the Company and the Shenzhen Institute of Advanced Technology of the Chinese Academy of Sciences have jointly establishedthe "Joint Lab for Wound Dressing Innovative Technology Research" to conduct cutting-edge technology research and new productdevelopment of wound dressings. At present, the Company has two provincial R&D platforms, the "Guangdong Functional CottonEngineering Technology Research Center" and the "Guangdong Wound Repair Material Engineering Technology Research Center"that are dedicated to the research of functional cotton and wound repair materials. In July 2022, the Company signed a contract withthe National Innovation Center For Advanced Medical Devices in Shenzhen, China to build a joint research center, furtherstrengthening the cooperation between the two sides in the development of innovative medical devices, key core technology research,and clinical application transformation.As of June 30, 2022, the Company (including the acquired enterprises) has obtained 77 invention patents, 640 utility model patents,and 352 design patents in China; and 57 invention patents and 8 utility model patents from countries outside China. The Company wasregarded as a "Leading Enterprise in Independent Innovation" by the Shenzhen Municipal People's Government, and a "ShenzhenEnterprise with Intellectual 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 ISO13485, 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, and Level 1,Level 2 and Level 3 certification of FDA 510K in the United States, respectively, in overseas markets. The Company ranked 1st in thewhite 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 high reputation,allowing it to be the designated reserve unit of the government's prevention and control command, as well as the main material supplier
for Shanghai, Jilin, Shenzhen and Henan which have been hit by the COVID-19 pandemic in 2022. In addition, the Company's productquality has been widely recognized by the market. During the Tokyo Olympic Games and Beijing Winter Olympics, many athleteswear the Company's protective products, which protected athletes to ensure their excellent performance in the field. Guilin Latex, anenterprise acquired by the Company, is the original designated production enterprise of the National Family Planning Commission, acondom product supplier of the United Nations Population Fund, a vice-chairman unit of China Rubber Industry Association, thelocation and chairman unit of the Latex Branch, and a unit of Latex Products Standards Committee. It is also a participant and leaderin the formulation of 4 national standards and 6 industrial standards such as latex surgical gloves and condom products.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 wipes. All the workshops aremanaged according to the management requirements for the workshops of medical dressings, which can help strictly control bacterialcontamination 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 close tolife, Purcotton care for health", Purcotton not only applies quality natural cotton but also attaches importance to the environmentalfriendly weaving and finishing process. To ensure that its products are safe and reliable, no fluorescent brighteners are added to itsproducts. Some of its products are OEKO-TEX Standard 100 certified, and some infant textile products are Shenzhen Standard certified.Some non-woven products have passed the testing performed in accordance with the EU AP (2002) 1 and EC1935/2004 EU FoodContact Materials Regulation.
4. Product advantages
(1) Medical consumables
Through acquisition, the Company's product categories include wound care, infection protection, cleaning and disinfection, injectionand punching, covering application scenarios like clinical and medical institutions and families, which can better meet clients' needsof one-stop procurement. In addition to traditional acute wound care products, the Company has also developed representative high-end wet dressings like silicone foam dressings, hydrocolloid dressings, super absorbent pads and scar repair sheet for chronic woundsthat are difficult to heal, which has further enrich its products. For the clinical use scenarios, the Company is committed to change fromselling single products to providing customers with integrated solutions. Its infection prevention products include dozens of surgicalpacks for various sections, such as heart and brain, abdominal cavity, urology, reproduction, facial features, and limbs. In terms ofdisease protection and control, the Company replaces chemical fiber fabrics with pure cotton spunlace non-woven fabrics for masks,protective clothing, surgical gowns, and isolation gowns. Such innovative products not only meet infection prevention and controlstandards but also are more comfortable and environmentally friendly with better breathability. In the field of home care, the Companyprovides professional products for clinical use such as hyaluronic acid masks, saline cleaning pads, hydrocolloid band-aids and medicalmasks to consumers through portable, sterilized and diversified packages, applying these professional health care products and servicesin daily home care.
(2) Healthy consumer goods
The Company's healthy consumer goods consist of non-woven consumer goods and textile consumer goods. The non-woven consumergoods include cotton tissues, sanitary pads, and wet wipes; the textile consumer goods include baby supplies, baby clothing, adultclothing, and bedding. The Company accurately captured the market demand for domestic high-quality consumer products under thebackdrop of consumption upgrading, and took the lead in proposing the innovative concept of replacing chemical fibers with cottonand getting rid of chemical stimulation, and provide consumers with healthy, comfortable and environmentally friendly consumergoods. And its cotton tissues are pioneering tissues in the industry, which can partially replace household paper. Pure cotton tissues aremade of degradable cotton after physical processing. There are less chemical stimulation and the tissues can be reused. Both theproduction and use of the tissues are more comfortable, safe, and environmentally friendly, so consumer acceptance of the tissues hasbeen significantly improved, and there are many imitators in the market. For pure cotton wet wipes and sanitary pads with pure cottonsurface, cotton materials are innovatively used in the parts of these products that contact human skin to replace traditional chemicalfiber and effectively reduce chemical irritation, so they are popular in the markets of baby and female consumers. Due to the excellentbreathability and softness of gauze fabrics, the Company's clothing and textile consumer products such as gauze children's children'sclothing, household 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 and service,and holds exhibitions worldwide to launches the "Winner Medical Academy", aiming to invite experts to educate, organize andparticipate in academic forums and public welfare activities, thus promoting the brand, allowing "Winner Medical" to enjoy a highreputation in the industry, and enabling the products to be widely recognized by customers at home and abroad. During the COVID-19 pandemic, the Company's actions were highly recognized by the government of China. Winner Medical was praised by the JointPrevention and Control Mechanism of the State Council as a well-deserved "ordnance factory" in fighting the pandemic. WinnerMedical (Huanggang) was awarded the title of "National Advanced Unit for Fighting the COVID-19 Pandemic" by the CPC CentralCommittee and the State Council. The Company's medical consumables are mainly sold to developed countries and regions such asEurope, Japan and the United States, and the products under its brand Winner are mainly sold to developing countries and regions suchas Asia, Africa, and Latin America. The Company are providing services for world-renowned medical supplies companies such asM?lnlycke, Lohmann, and PAUL HARTMANN. According to statistics from the China Chamber of Commerce for Import and Exportof Medicines and Health Products (CCCMHPIE), the Company has been ranked among the top three exporters of Chinese medicaldressings for many consecutive years. The products of "Winner Medical" brands have covered all public and most private hospitals inHong Kong. In May 2021, Winner Medical was selected by the Federation of Shenzhen Industries as the "Benchmarking Enterprise inChina's Medical Consumables Sector" and at the same time recognized as an "International Renowned Brand" 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" principlein its operations, Purcotton insists on offering "comfortable, healthy, and environmentally friendly" cotton products with high qualityto consumers to constantly bring them happiness and quality products, which makes Purcotton products popular among consumers.Adhering to the concept of "medicine close to life, Purcotton care for health", Purcotton advocates the use of cotton, to reduce environmental pollution and to enable consumers to return to a natural and sustainable lifestyle with pure cotton. The pure cotton tissuesdeveloped by Purcotton is a pioneering category. By virtue of pure cotton wet tissues, sanitary pads with pure cotton surface, BBNice,as well as gauze textile products and clothing, Purcotton has built a brand image of "new Chinese products" with cotton as the corematerial and excellent product quality. Its brand awareness is increasing and its reputation is improving year by year, forming effectivecompetition barriers and 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 mainstream third-party e-commerce platforms, including Tmall, JD.com and Amazon. With the huge user traffic gathered, its sales has covered mostonline shopping consumer groups, and the sales data indicated that the sales of its products rank among the top in the relevant productcategories in major e-commerce platforms. With the attributes of "sales + social", Purcotton's official website and WeChat miniprograms are important platforms for its product display, user interaction, and brand promotion. At the same time, Purcotton is alsocooperating with new social retail platforms such as Douyin and Xiaohongshu, which helps it open up new sales growth channels.
(2) Advantages of offline channels
In the medical consumables section, the Company's domestic medical business distributors (hospital market) have covered over 4,000hospitals in more than 30 provinces (incl. municipalities and autonomous regions); retail pharmacy market distributors have covered140,000 retail pharmacies in more than 20 provinces (incl. municipalities and autonomous regions); foreign medical business customersand distributors have covered more than a hundred countries and regions such as Europe, Japan and the United States.As for healthy consumer goods section, the Company has opened a total of 339 offline stores as of June 30, 2022. Among them,Purcotton has opened 335 offline stores (including 27 franchisees) in more than 60 mid- and high-end shopping malls in Shenzhen,Shanghai, Beijing, Guangzhou and other key cities in China. The Company integrates its brand concept into its store design. It hires
well-known designers at home and abroad to upgrade its store image and to enhance its consumer experience with an exhibition-styleproduct display balancing both aesthetics and richness of products. It also adds an experience area to highlight product display and userexperience, which has helped increase the Company's sales revenue and further increase 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 6,000 outlets of China ResourcesVanguard, Ole' Supermarket, Sam's Clubs, Wal-Mart, Rainbow and other mainstream supermarket chains, over 20,000 outlets of 7-11,Rosen, Convenience Bee, Today, Every Day, Hong Qi and other convenience store chains, as well as over 7,500 beauty stores andoffline maternal & infant stores such as Watsons, Kidswant and Love Baby Island.
(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 integrate trafficand sales of offline stores and online mini programs, thereby further improving its operating efficiency and performance. Onlinechannels can meet offline consumers subsequent consumption needs while offline channels can provide online consumers furtherproduct information and service experience. Flows of traffics can be directed between the two kinds of channels, so online and offlinetraffic can be effectively obtained. As of June 30, 2022, the number of Purcotton users has exceeded 40 million, including over 19million registered members of its private platforms (8 million store registered members, and over 10 million registered members of itsofficial website and WeChat mini programs).
7. Advantages of full industrial chain
Adhering to the business philosophy of "Quality before profit", the Company has been constantly improving its product quality, costand delivery management and control, and 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 1 millionsquare meters, including 105,000 square meters of clean workshops, supplying large quantities of high-quality medical supplies anddaily necessities around the world each 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 of 67,000square meters, Winner Medical (Jingmen) is the main production site of gauze clothing, degreased medical bleached gauze, and dyedmedical gauze; with an area of 93,000 square meters, Winner Medical (Jiayu) has four product categories with pure cotton as basicmaterials, i.e. the cleaning, disinfection, beauty, and care categories, and two product collections: medical and daily use products;established in 2001 with an area of 140,000 square meters, Winner Medical (Chongyang) is the Company's main force of producingits disposable surgical kits and other infection control products in operating room, protective clothing and other epidemic preventionproducts, all kinds of cotton balls and cotton pads; established in 2017 with a total area of about 467,000 square meters of its phase Iand phases II sites, Winner Medical (Wuhan) has brought in electron beam sterilization and international modern cotton spunlaceproduction line; established in 2000 with a total area of about 150,000 square meters, Winner Medical (Tianmen) produce productssuch as pure cotton spunlace non-woven fabrics, pure cotton tissues, medical dressing, medical protection series products, being theproduction base of pure cotton tissues and medical gauze in China for trade; established in 1999, Winner Medical (Yichang) has 137advanced air-jet looms, being the main production base for its grey cloth. In January 2022, the Company acquired an industrial land ofnearly 15,000 square meters located in Guanlan Street, Longhua District. In the future, the land will be built into a industrial base formedical biological and infection control protection in the Guangdong-Hong Kong-Macao Greater Bay Area, which will be used forscientific research innovation and industrial production of medical biology, high-end medical dressings and medical infection controlprotection 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 production efficiencythrough equipment innovation. For example, its self-developed soft ear loop mask manufacturing equipment truly realize the unmannedmanufacturing of masks with high-efficient equipment; it has basically realized the fully automated production of its products likecotton tissues and wet wipes; it has preliminarily replace manual production with machinery production for cotton swabs, cotton balls,cotton pads, makeup cotton, packages, and drapes, which has greatly supported its rapid production and supply. The Company is alsogoing to explore and build smart factories. It will realize "unmanned production, process-based management, and processdigitalization" step by step.III. Main business analysis(I) Overview of business performanceDuring the reporting period, in the face of the severe challenges brought by the repeated outbreaks of COVID-19 epidemic and changesin the external economic environment to the business, the Company further clarified its strategic planning, strengthened its branddevelopment strategy, and focused on the business plan objectives. In the first half of 2022, the Company realized a main businessincome of RMB 5.11 billion, representing an increase of 27.4% compared with the same period of the previous year. In the first halfof 2022, in terms of sub-business section, the sales revenue from medical section was RMB 3.23 billion (including a revenue of RMB
0.09 billion contributed by Longterm Medical), representing a year-on-year increase of 45.3%. Wherein, there was a year-on-yearincrease of 53.9% from disease control and protection products, a year-on-year increase of 2.6 times from high-end dressing products,and a year-on-year increase of 27.5% from traditional wound care and dressing products. Despite of the great effect of epidemic, thesales revenue from health consumer goods section was RMB 1.88 billion in the first half of this year, representing a year-on-yearincrease of 5.1%. Wherein, there was a year-on-year increase of 2.4% from online channels (an increase of 10.0% from official websites,Wechat mini programs and other self-owned platforms), a year-on-year increase of 9.3% from offline channels (an increased of 35.0%from supermarket channel, and an increased of 4.8% from offline stores). During the reporting period, through measures such asoptimizing suppliers and customers, streamlining SKUs and improving personnel structure, the Company achieved preliminary successin cost reduction and efficiency increase. In the first half of the year, the sales expense rate decreased by 1.9 percentage points and themanagement expense rate decreased by 1.3 percentage points on a year-on-year basis. The Company obtained a net profit of RMB 890million attributable to the shareholders of the listed company, representing a year-on-year increase of 17.3%; and obtained a net profitafter deducting the non-recurring profit and loss of RMB 820 million, which was mainly due to the good growth of the main businessand the decrease of government subsidies, financial management income and other non-recurring profit and loss in the same period.In the second quarter of 2022, the Company obtained a main business income of RMB 2.81 billion, representing a year-on-year increaseof 59.5%, and obtained a net profits attributable to shareholders of listed companies of RMB 0.54 billion, representing a year-on-yearincrease of 91.0%. In the second quarter of 2022, in terms of sub-business section, the sales revenue from medical section was RMB
1.83 billion, representing a year-on-year increase of 130.1%, which was mainly due to the continuous improvement of the Company'sbrand awareness and reputation and the continuous enrichment of product categories. In particular, there was a rapid growth in therevenue from domestic channels. Wherein, the sales revenue of hospital channels was RMB 890 million, representing a year-on-yearincrease of 470.8%; the sales revenue of domestic pharmacies was RMB 110 million, representing a year-on-year increase of 128.9%;and the sales revenue from medical e-commerce channels was RMB 230 million, representing a year-on-year increase of 101.9%. Asof June 30, 2022, there was more than 10 million of fans from medical e-commerce channels, with a year-on-year increase of 17.4%,and a repurchase rate of members of 30.0%. In terms of healthy consumer goods section, although some stores were unable to operatenormally and some regional logistics were interrupted due to the impact of COVID-19, thanks to the diversified layout of online andoffline channels and the complementary advantages of multiple platforms and channels, the sales revenue from healthy consumer goodssection in the second quarter was RMB 990 million, representing a year-on-year increase of 2.0%. Wherein, the sales revenue fromonline channeles was RMB 650 million, representing a year-on-year increase of 4.4%, and the sales revenue from offline store channelswas affected by the epidemic, representing a year-on-year decrease of 2.6%. As of June 30, 2022, Purcotton has nearly 40 millionglobal members, including more than 19 million private members.The incomes by channels and by products during the reporting period are as follows:
1. Main business income through main channels
Unit: RMB ’0,000
| Business type | Channel type | First half of 2022 | First half of 2021 | YoY change | Reasons for YoY change in performance |
| Medical consumables | Hospitals in China | 159,467.75 | 59,701.88 | 167.11% | The quality of protective products is highly recognized by customers. In the case of sporadic outbreaks of COVID-19 pandemic in China, the company quickly seized the market opportunity and achieved a great increase in revenue from the hospital channel |
| Domestic pharmacies | 25,028.53 | 21,248.24 | 17.79% | Mainly due to the increase in the number of pharmacies covered | |
| E-commerce | 46,158.81 | 35,272.19 | 30.86% | A substantial growth in products such as gloves, mouth and nose cleaning and disinfection products, and high-end dressings | |
| Domestic direct selling | 22,083.97 | 5,799.87 | 280.77% | Increase in the number of protective products purchased by enterprises, institutions and government departments | |
| Overseas sales | 70,541.63 | 100,469.44 | -29.79% | Loose epidemic prevention and control at overseas markets, and declined demand for protective products | |
| Subtotal | 323,280.69 | 222,491.62 | 45.30% | / |
Healthyconsumer
goods
| Healthy consumer goods | E-commerce | 112,966.95 | 110,278.98 | 2.44% | No major changes |
| Wherein: (1) Tmall, JD.com and other third-party e-commerce platform channels | 87,279.96 | 86,924.58 | 0.41% | No major changes | |
| (2) Company-owned platform channels | 25,686.99 | 23,354.40 | 9.99% | User conversion rate was improved through private domain content operation |
| Business type | Channel type | First half of 2022 | First half of 2021 | YoY change | Reasons for YoY change in performance |
such as officialwebsite, Wechatmini program
| such as official website, Wechat mini program | and community operation |
Offline stores
| Offline stores | 56,866.34 | 54,263.42 | 4.80% | No major changes |
Supermarketchannels
| Supermarket channels | 14,332.75 | 10,617.06 | 35.00% | Continuously increase in the number of channels covered |
Key Client
| Key Client | 3,940.97 | 3,874.40 | 1.72% | No major changes |
Subtotal
| Subtotal | 188,107.01 | 179,033.86 | 5.07% | / |
Total
| Total | 511,387.70 | 401,525.48 | 27.36% | / |
Note 1: In the first half of 2021, domestic direct sales revenue included the sales revenue of domestic pure cotton spunlace non-wovenfabrics of RMB40,800,400, and foreign sales revenue included the sales revenue of foreign pure cotton spunlace non-woven fabrics ofRMB 57,552,100.Note 2: The "e-commerce" channel of medical consumables business includes domestic e-commerce platforms and cross-border e-commerce platforms.Note 3: The healthy consumer goods business consists of Purcotton business and PureH2B business.Note 4: The data of the "offline stores" channel of healthy consumer goods business cover directly-operated stores and franchisedstores.
2. Main business income of main products
Unit: RMB ’0,000
| Business type | Product type | First half of 2022 | First half of 2021 | YoY change | Reasons for YoY change in performance |
Medicalconsumabl
es
| Medical consumables | Traditional wound care products | 45,158.42 | 35,408.47 | 27.54% | Increase of new customers and unit prices in foreign trade channels and the steady growth of e-commerce channels |
| Advanced wound care products | 16,044.93 | 4,374.06 | 266.82% | Longterm Medical made a contribution for sales income of about RMB 67 million; representing an increase of about 113% excluding that contributed by Longterm Medical, which was mainly due to the substantial growth in products achieved by the Company through expanding sales channels and adding new customers. | |
| OR infection control products | 21,940.54 | 22,804.66 | -3.79% | Decrease in the number of patients undergoing surgery during the epidemic | |
| Disease prevention and control products | 225,166.66 | 146,319.30 | 53.89% | Frequent sporadic outbreaks of COVID-19 pandemic in China, leading to a sharp increase in the market demand for N95 masks and protective clothing compared with the same period last year | |
| Disinfection & cleaning products | 14,970.14 | 13,585.13 | 10.20% | No major changes | |
| Subtotal | 323,280.69 | 222,491.62 | 45.30% | / |
Healthy
consumer
goods
| Healthy consumer goods | Cotton tissues | 41,648.52 | 40,885.23 | 1.87% | No major changes |
| Sanitary pads | 29,290.16 | 26,454.67 | 10.72% | The year-on-year increase was due to the upgrade of packaging and products and the expansion of sales channels. Compared with previous periods, the growth rate of this product has decreased, which was mainly due to the decline in the flow of people in major sales channels such as supermarkets and convenience stores. | |
| Wet wipes | 7,928.06 | 9,019.84 | -12.10% | No major changes |
| Business type | Product type | First half of 2022 | First half of 2021 | YoY change | Reasons for YoY change in performance |
Other non-wovenconsumer goods
| Other non-woven consumer goods | 22,350.95 | 22,693.78 | -1.51% | No major changes |
Baby supplies
| Baby supplies | 17,459.71 | 17,998.93 | -3.00% | No major changes |
Baby clothing
| Baby clothing | 23,104.28 | 20,690.19 | 11.67% | Increase of the presentation by story theme series and improvement of product appearance, and increase of online channel marketing |
| Adult clothing | 30,774.83 | 27,451.73 | 12.11% | |
| Other textile consumer goods | 15,550.51 | 13,839.49 | 12.36% |
Subtotal
| Subtotal | 188,107.01 | 179,033.86 | 5.07% | / |
Total
| Total | 511,387.70 | 401,525.48 | 27.36% | / |
Note 1: In the first half of 2021, the sales revenue of traditional wound care and dressing products including pure cotton spunlace non-woven fabrics was RMB 98,352,500.Note 2: The purchase date of Longterm Medical is April 30, 2022, and its sales revenue from May to June is consolidated into theconsolidated financial statements of Winner Medical.(II) Overview of operation and managementDuring the reporting period, the Company focused on the following work:
1. Digital transformation
In order to promote "consumer-centric and digital and intelligent manufacturing-driven" business transformation, and carry out the fivedigital strategies of "digital commodity operation", "omni-channel digital operation", "consumer digital operation", "digital smartlogistics digital operation" and "smart manufacturing digital operation", the Company further delivered the digital project phase of corebusiness operation, and effectively promoted the whole industrial chain of the group to drive and lead the overall business change andinnovation from top to bottom. In the first half of 2022, the Company promoted the following digital projects: (1) The Companycontinued to promote the upgrading of digital operation capability of all categories of commodities: the Company build a full-dimensional commodity volume cost-benefit model based on the operation and integration of the whole life cycle of commodities, andeffectively make optimal solution for products gross profit and SKUs through AI technologies such as algorithm engine and machinelearning. The optimization of the prediction model has improved the matching accuracy of commodities, channels and consumers.Algorithms were used to automatically allocate and replenish goods, so as to predict the balance of production capacity, and toautomatically create a model and generate labels for good sales factors, further improving the overall product operation capabilities.
(2) The Company connected all members to conduct omni-channel integrated marketing operations, to ensure the consistency ofmember experience and improve the repurchase rate and transformation of members. During the reporting period, the Company hadcompleted the connection of all members. In the second half of the year, the Company will further promote the construction of CDP-MA marketing cloud and strive to comprehensively accelerate the digital operation capability of omni-channel consumers. (3) TheCompany promoted the construction of digital operation capacity of smart logistics in the entire network warehouse, and strove tocreate an integrated, intelligent, scalable, and active logistics system with quick response speed based on customer demand orientation,and independently developed WMS&TMS systems through new technologies, effectively promoting logistics costs reduction, andimproving efficiency and user experience. Currently, the Company is committed to the launch promotion of multi warehouses, andwill further promote the upgrading in the second half of the year. (4) The Company accelerated the construction of digital operationcapabilities for all-intelligent manufacturing, applied advanced solutions in the industry to build a green, low-carbon, agile industrialchain ecological lighthouse factory and an industry-leading Win+ industrial Internet intelligent manufacturing platform. Due to theindependent development of four major types of applications including APS, MES, QMS and IOT based on new technologies, 9 majormanufacturing bases have been empowered to improve quality, reduce costs and improve efficiency. At present, the development,testing and launch of version 1.0 has been completed, and the comprehensive competitiveness will be continuously improved.
2. R&D and Innovation
In the field of medical consumables, the Company will focus on developing the application of core basic materials in epidemicprevention products such as masks and protective clothing, so as to provide better product experience for epidemic prevention personneland ordinary users when the epidemic is normalized and continue to create greater value for users. In the field of high-end medicaldressing products, the Company will continue to upgrade and iterate on the wet dressing products. In the first half of the year, theCompany continued to strive to R&D and upgrade of adhesive product formula, medical urethanes materials, polymer superabsorbentmaterials and other core raw material process formulas. At present, some materials is being performed with the product verification,which can meet the differentiated customization needs of different customers and different markets after mass production. At the sametime, the Company is also accelerating the deployment of domestic and foreign product certificate access to prepare in advance for theswitch of EU regulations and the substitution of imported products with domestic products. In the first half of this year, the Company'sself-developed antibacterial fiber dressing was approved by the US FDA, and its scar cream products were awarded with China'sregistration certificate for Class II medical devices, and more than a dozen high-end dressings were successfully registered in CE, FDAand China. Relying on the medical R&D technology platform, the Company's product R&D layout has gradually expanded frommedical dressing consumables to daily skin care products, and plans to focus on creating a series of medical and beauty products withbioactivity functions in the next few years, such as facial mask, cream and other categories.In the field of health consumer goods, the wide knitted liquid ammonia cotton fabric, which is pioneered by the Company in the industry
and featured with luxurious texture and comfortable and skin-friendly feelings, has been applied to bedding suites; The cotton sunscreen
2.0 developed by the Company is featured with not only the super sunscreen effect of UPF50 + and good moisture absorption andpermeability, but also upgraded function of peppermint cooling; The high elastic gauze technology, which provides the solution for theproblem of gauze with no elastic and restrained wearing, is widely used in pure cotton gauze products; At the same time, the Companyhas also started the carbon footprint certification of core cotton products. Through the carbon footprint certification of cotton tissues,wet tissues, gauze baby clothes, four-piece bedding sets and T-shirts, the total amount of greenhouse gas emissions of products can bequantitatively calculated, making it convenient to identify the key points of improvement in the production process of products, andproviding the basis and direction for the sustainable improvement of products. The implementation of carbon footprint certification isan important step to achieve the goal of reaching the peak carbon of all cotton. In terms of industry–university–research (IUR)collaboration, in view of the fact that the current state-approved cotton varieties, which are more suitable for use in the textile andclothing industry, but not suitable for the production and use of non-woven spunlaced cotton, the Company and South ChinaAgricultural University have jointly established a cotton research institute and appointed Professor Zhang Xianlong as the chief cottonscientist of Purcotton to carry out cooperation in cotton breeding and spunlaced cotton R&D projects. Currently, (Sanya) Purcotton No.1, a variety developed through hybrid breeding of sea land fusion, has been expanded and planted in Xinjiang in April; At the sametime, the Company has cooperated with the National Environmental Protection Engineering Technology Center of Donghua University- Textile Industry Pollution Textile to carry out the analysis and detection project of microplastics released from textile materials, andoutput the comparison data of microfiber and microplastics produced by the cotton materials and similar products of chemical fibermaterials in the process of use based on scientific experiments, so as to strengthen the consumer's awareness of deplasticization.
3. Brand building
In the first half of 2022, Winner Medical continued to consolidate the brand image favored by the public and trusted by doctors andnurses, and continuously improved brand awareness and reputation through effective means. During the reporting period, bycooperating with a number of authoritative media and innovating forms, the Company's influence in the industry and consumers wasfurther promoted. Wherein, Winner Medical was invited by Shenzhen Press Group, and visited by a number of media for high-qualitydevelopment investigation and special reports publication; Winner Medical was invited to participate in CCTV's Dialogue program,Phoenix's Chief Interview program to tell the brand story of Winner Medical to create value for society as a national enterprise; WinnerMedical and China Youth Daily jointly launched an advertising film for the interview of Winter Olympic athletes with the theme of"Go to the Stadium and Win Together"; In collaboration with China Women's News and famous actress Liu Mintao, Winner Medicalreleased the public welfare theme film My Slash Mother, which was widely discussed and praised by the public. In terms of cross-border brand cooperation, we have cooperated with Carslan and Genki Forest to expand the attention of Winner Medical in "GenerationZ" and social media platforms. In terms of pharmacy chain, during the college entrance examination, we cooperated with pharmaciesin China to launch more than 70 offline activities of "Winner's Energy Station for Candidates" in various places, helping students toattend the examination successfully and winning praise from a large number of teachers, students and parents. In the field ofprofessional academic, we have held academic conferences at all levels to have an effect on the professional market, and held thecharity activity of caring for white angels on the Nurse's Day on May 12, involving more than 50 hospitals in China, furtherstrengthening exchanges and cooperation with domestic heading hospitals.In terms of brand construction, Purcotton continued to deepen its communication with consumers, and continued to convey toconsumers the multiple advantages of "cotton" in environmental protection and sustainable development through spokespersons,creation of original high-quality content, offline exhibition tours and press conferences, so as to enhance consumer awareness andloyalty to the brand. On March 1, Purcotton officially announced Guo Jingjing, a former national diving team athlete and Olympicchampion, as the brand spokesperson. At the same time, the "reassuring guardian ambassador" Guo Jingjing launched the "Power of aCotton" public welfare action together with Purcotton; Based on the conjunction with China Women's News and Xin Shixiang,Purcotton has created the original brand character documentary series "Her Changes" Luo Haixiang and Shui Qingxia, through realcharacters and stories representing the spirit of the times and high-quality original content, to communicate with consumers at a deeperlevel, establish the link of spirit and value, and form the brand's own content IP; On the occasion of the coming "World Ocean Day",Purcotton held the "Go Green Go Live" brand conference and the 2021 social responsibility report conference of Winner Medical, todeeply understand the environmental protection value of cotton and convey the brand's sustainable development vision to consumersthrough online live broadcasts. At the same time, it launched offline themed image exhibitions with China National GeographyMagazine in Shenzhen and Chengdu to enhance the public's attention to environmental protection and the brand of Purcotton.
4. Extensional M&A
During the reporting period, the Company adhered to the strategy of creating a one-stop solution for medical consumables and launchedan extensional M&A around the field of low-value medical consumables. It has successively acquired the controlling interest inLongterm Medical and Hunan Pingan Medical Device, and 100% equity of Guilin Latex, further enriched the product line,supplemented the product weakness, expanded domestic and foreign business channels, and improved the Company's strategic layout.On April 8, by virtue of its own funds of RMB 730 million, the Company acquired a total of 55% equity of Longterm Medical, whosemain business was the research and development, production and sales of high-end wound dressings, and the acquisition date was April
30. With more than 10 years of long-term accumulation of high-quality customers, Longterm Medical has 4 registration certificates forClass III medical devices and 21 registration certificates for Class II medical devices, leading the industry among high-end wounddressing enterprises in China. In 2021, it obtained an operating income of RMB 350 million and a net profit of RMB 86.374 million.The acquisition is helpful to the Company to build a leading position in high-end wound dressings in China, which is of great strategicsignificance.On May 18, the Company invested a total of RMB 750 million to hold 68.7% equity of Hunan Pingan Medical Device after capitalincrease and share expansion. The acquisition date was July 1. Hunan Pingan Medical Device, which is mainly engaged in the research
and development, production and sales of medical devices such as syringes, infusion sets, blood collection tubes, blood collectionneedles and indwelling needles, is a well-known trademark in China and a national high-tech enterprise. In 2020, it was awarded the"second batch of specialized, refined, special and new small giant enterprises". In 2021, Hunan Pingan Medical Device obtained anoperating income of RMB 360 million and a net profit of RMB 85.032 million. Hunan Pingan Medical Device has 17 and 19 registrationcertificates for Class III and Class II medical devices respectively, and 24 patent certificates. It makes business at domestic and overseasmarkets, and has a leading market share in the hospital market of Hunan Province. Through the acquisition, the gap of the Company'sproducts in the field of injection and puncture was filled, helping the Company become one of the most comprehensive enterprises inmedical consumables product line in China.On June 6, the Company acquired 100% equity of Guilin Latex with its own capital of RMB 450 million, and the acquisition date wasJune 30. Guilin Latex is mainly engaged in the production and sales of medical latex surgical gloves, medical inspection gloves andlatex condoms. In 2021, Guilin Latex obtained an operating income of RMB 320 million and a net profit of RMB 50.854 million.Guilin Latex is a participant and leader in the formulation of 4 national standards and 6 industrial standards such as latex surgicalgloves and condom products, in possession of 11 medical device registration certificates and 35 patent certificates, including 13invention patents. Guilin Latex's medical latex surgical gloves are leading in brand awareness, scale and quality in the hospitals inChina, and also indispensable conventional consumables for various surgeries. They can be used together with the Company's operatingroom consumables and wound care products to form various combinations, providing one-stop customized solutions to hospital usersand solving the pain points of hospital users. At the same time, Guilin Latex's condom products will be introduced into the Company'sconsumer channels, enriching the Company's consumer product line.(III) YoY changes in key financial data
Unit: yuan
| Current reporting period | Same period last year | Year-on-year increase/decrease | Reason for change |
Operating income
| Operating income | 5,157,944,495.72 | 4,059,865,654.92 | 27.05% | Mainly due to the larger revenue growth in medical consumables section |
Operating costs
| Operating costs | 2,640,556,563.64 | 1,921,789,702.47 | 37.40% | Mainly due to the increase in commodity priceand the increase in labor costs |
Sales expenses
| Sales expenses | 950,172,124.74 | 825,805,820.57 | 15.06% | For details, please refer to "3. selling expenses and Composition" of "IV. Other information required by the disclosure guidelines for textile and apparel-related sectors" below. |
Administrative expenses
| Administrative expenses | 325,391,883.32 | 310,652,551.64 | 4.74% | No major changes |
Financial expenses
| Financial expenses | （73,619,152.34） | （12,616,456.80） | 483.52% | Mainly due to the increase in interest income and exchange gains and losses |
Income tax expenses
| Income tax expenses | 145,670,282.34 | 143,286,407.76 | 1.66% | No major changes |
R&D expenses
| R&D expenses | 238,644,498.62 | 189,917,265.47 | 25.66% | Mainly due to the increase in R&D investment |
Net cash flow fromoperating activities
| Net cash flow from operating activities | 801,150,899.38 | 197,604,865.77 | 305.43% | (1) In 2020, the Company applied a credit policy of 100% payment for protective products, and in the first half of 2021, the Company's credit policy for the protective products has returned to the normal level; (2) The good performance in 2020 has resulted in more taxes and fees paid after the final settlement in the first half of 2021. |
| Net cash flow from investing activities | （966,552,145.71） | 1,134,322,825.18 | -185.21% | Mainly due to the payment or prepayment of investment funds in 3 M&A units during the reporting period |
Net cash flow fromfinancing activities
| Net cash flow from financing activities | 192,733,749.29 | （821,629,805.97） | 123.46% | Mainly due to bank loans obtained during the reporting period |
Net increase in cash andcash equivalents
| Net increase in cash and cash equivalents | 54,933,264.88 | 510,599,067.48 | -89.24% | Mainly due to the increase in cash paid for investment during the reporting period |
Significant changes in the profit composition or profit source of the Company during the reporting period
□ Applicable ? Not applicable
There was no significant change occurred in the profit composition or profit source of the Company during the reporting period.Products or services accounting for more than 10%?Applicable □ Not applicable
Unit: RMB ’0,000
| Operating income | Operating costs | Gross margin ratio | Year-on-year increase/decrease of operating income | Increase or decrease in operating costs over the same period of the previous year | Year-on-year increase/decrease of gross margin ratio |
By products or services
By products or services
Medicalconsumables -products ondiseaseprevention andcontrol
| Medical consumables - products on disease prevention and control | 225,166.66 | 113,971.32 | 49.38% | 53.89% | 92.31% | -10.12%Note 1 |
The Company needs to comply with the disclosure requirements of the "Textile and Apparel Business" stipulated in the No. 3Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
Unit: yuan
| Operating income | Operating costs | Gross margin ratio | Year-on-year increase/decrease of operating income | Increase or decrease in operating costs over the same period of the previous year | Year-on-year increase/decrease of gross margin ratio |
By sectors
By sectorsMedicalconsumables
| Medical consumables | 3,232,806,937.03 | 1,734,857,098.62 | 46.34% | 45.30% | 60.88% | -5.19% |
Healthyconsumer goods
| Healthy consumer goods | 1,881,070,146.61 | 878,872,880.90 | 53.28% | 5.07% | 7.07% | -0.87% |
By products
By productsBy regions
By regionsDomestic
| Domestic | 4,367,167,496.07 | 2,200,074,326.83 | 49.62% | 50.28% | 56.31% | -1.94% |
Abroad
| Abroad | 746,709,587.58 | 413,655,652.69 | 44.60% | -32.69% | -15.87% | -11.08%注2 |
Note: 1. Mainly due to the decline in gross margin of overseas sales;
2. Mainly due to the decline in gross margin caused by the decreased demand from overseas markets and increase in raw materialprices and other factors;
3. The incomes mentioned above are main business income.
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 □ NoDistribution 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 | 312 | 119,886 | 19 | 29 | Expiration of contract and active store closing for strategic consideration | Purcotton, PureH2B |
Franchises
| Franchises | 27 | 5,901 | 5 | 1 | Transfer from franchise store to directly-operated store | Purecotton |
Total area and performances of directly-operated stores
| Levels of areas | Number of stores | Total area | Operating income in January-June 2022(10,000 yuan) | Operating income for the same period last year (10,000 yuan) | Average year-on-year increase/decrease in performance of stores | Reasons |
Lessthan
㎡
| Less than 300㎡ | 116 | 25,485.06 | 15,904.31 | 16,066.76 | -1.01% |
300-500㎡
| 300-500㎡ | 73 | 27,360.62 | 14,045.91 | 14,187.08 | -1.00% |
500-800㎡
| 500-800㎡ | 57 | 35,201.40 | 12,626.51 | 13,243.44 | -4.66% |
Morethan
㎡
| More than800㎡ | 20 | 18,900.70 | 5,097.70 | 5,176.20 | -1.52% |
Total
| Total | 266 | 106,947.78 | 47,674.43 | 48,673.49 | -2.05% | It is mainly due to the fact that in the first half of 2022, some stores were unable to open their doors normally due to the successive closures and personnel isolation measures taken for epidemic control, which had an impact on the offline business of the stores |
Note: The above stores are Purcotton's stores opened for more than 12 months as of June 30, 2022. The operating income of offlinestores does not include the sales of offline stores diverted to online Wechat mini-programs.Top 5 Stores in terms of Operating Revenues
| S/N | Name of stores | Opening date | Operating income (yuan) | Average performance of the store (yuan/m2) |
| 1 | Store I | October 25, 2017 | 6,577,590.87 | 16,289.23 |
| 2 | Store II | September 19, 2014 | 5,027,339.22 | 6,685.29 |
| 3 | Store III | January 18, 2018 | 4,689,890.40 | 3,518.30 |
| 4 | Store IV | May 15, 2010 | 4,510,150.29 | 6,933.36 |
| 5 | Store V | October 31, 2021 | 4,448,679.42 | 10,203.39 |
Total
| Total | -- | -- | 25,253,650.20 | 43,629.57 |
New stores of listed companies?Yes □ No
| Name of stores | Address of stores | Opening time | Contract area (m2) | Investment amount (RMB) | Product Category | Operation form | Business model | Property ownership status | Number of stores |
Direct-sale
stores ofPurecotton
| Direct-sale stores of Purecotton | Central China | 2022 | 2,479.18 | 14,049,871.98 | Healthy consumer goods | Retail | Direct-sale stores | Purecotton leasing | 10 |
Direct-sale
stores ofPurecotton
| Direct-sale stores of Purecotton | North China | 2022 | 1,024.00 | 6,289,649.97 | Healthy consumer goods | Retail | Direct-sale stores | Purecotton leasing | 4 |
| Direct-sale stores of Purecotton | West China | 2022 | 660.70 | 3,267,045.22 | Healthy consumer goods | Retail | Direct-sale stores | Purecotton leasing | 3 |
Direct-sale
stores ofPurecotton
| Direct-sale stores of Purecotton | South China | 2022 | 486.00 | 2,453,416.35 | Healthy consumer goods | Retail | Direct-sale stores | Purecotton leasing | 2 |
| Direct-sale stores of Purecotton | North China | 2022 | 300 | 433,305.92 | Healthy consumer goods | Retail | Franchises | Purecotton leasing | 1 |
Direct-sale
stores ofPurecotton
| Direct-sale stores of Purecotton | South China | 2022 | 221 | 412,273.00 | Healthy consumer goods | Retail | Franchises | Purecotton leasing | 1 |
| Direct-sale stores of Purecotton | West China | 2022 | 370 | 629,994.30 | Healthy consumer goods | Retail | Franchises | Purecotton leasing | 2 |
Direct-sale
stores ofPurecotton
| Direct-sale stores of Purecotton | Central China | 2022 | 191.3 | 309,182.22 | Healthy consumer goods | Retail | Franchises | Purecotton leasing | 1 |
Total
| Total | 5,732.18 | 27,844,738.96 | 24 |
Does the Company disclose the information on Top 5 franchises
□Yes ?No
IV. Other information required by the disclosure guidelines for textile and apparel-relatedsectors
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 | January-June 2022 | January-June 2021 | Percentage of change in production capacity utilization rate | Change reason description | ||||
| Production capacity | Output | Production capacity | Production capacity | Output | Production capacity | |||||
| Utilization rate | Utilization rate | |||||||||
Medicalconsumables
| Medical consumables | Gauze | ton | 5,585 | 3,568 | 64% | 5,276 | 3,210 | 61% | 3% | No major changes |
| Cotton | ton | 1,373 | 1,026 | 75% | 1,030 | 857 | 83% | -9% | No major changes | |
| Mask | ’0,000 pieces | 328,051 | 295,621 | 90% | 197,351 | 148,799 | 75% | 15% | Frequent sporadic outbreaks of COVID-19 |
pandemic inChina, leadingto the demandfor productsincreasingfaster than theincrease inproductioncapacity
Protectiveclothing
| Protective clothing | ’0,000 suits | 2,652 | 2,627 | 99% | 780 | 517 | 66% | 33% | Sporadic outbreaks of COVID-19 pandemic, leading to a significant increase in the demand for products quantity |
Surgicalgowns
| Surgical gowns | ’0,000 suits | 1,950 | 1,796 | 92% | 1,560 | 1,215 | 78% | 14% | Frequent sporadic outbreaks of COVID-19 pandemic in China, leading to the demand for products increasing faster than the increase in production capacity |
Medicalcombo kits
| Medical combo kits | ’0,000 kits | 2,600 | 2,329 | 90% | 2,595 | 2,219 | 86% | 4% | No major changes |
Cotton spunlace non-wovenfabric
| Cotton spun lace non-woven fabric | ton | 25,628 | 14,241 | 56% | 24,090 | 12,435 | 52% | 4% | No major changes |
Healthyconsumer
goods
| Healthy consumer goods | Cotton tissues | ’0,000 kits | 17,397 | 6,565 | 38% | 13,822 | 6,934 | 50% | -12% | Mainly due to the increase of new production capacity and the slight decrease of sales volume |
| Sanitary pads | ’0,000 pieces | 25,040 | 19,496 | 78% | 25,040 | 18,925 | 76% | 2% | No major changes |
Is there overseas production capacity?
□Yes ?No
2. Sales model and channels
Sales channels and actual operation of productsThe Company's healthy consumer goods is involved in textile and apparel industries. The sales channels for healthy consumer goodsinclude e-commerce, direct chains and supermarkets, key accounts and franchisees.
Unit: yuan
| Sales channels | Operating income | Operating costs | Gross margin ratio | Year-on-year increase/decrease of operating income | Increase or decrease in operating costs over the same period of the | Year-on-year increase/decrease of gross margin ratio |
previous yearOnline sales
| Online sales | 1,129,669,514.64 | 577,404,203.98 | 48.89% | 26,879,726.10 | 22,437,124.73 | -0.79% |
Offline stores
| Offline stores | 568,663,387.31 | 226,868,732.28 | 60.10% | 26,029,153.51 | 16,031,334.21 | -1.04% |
Supermarketchannels
| Supermarket channels | 143,327,527.80 | 54,670,363.89 | 61.86% | 37,156,885.44 | 18,477,517.03 | -4.05% |
Key Client
| Key Client | 39,409,716.86 | 19,929,580.75 | 49.43% | 665,822.66 | 1,105,998.59 | -1.99% |
Total
| Total | 1,881,070,146.61 | 878,872,880.90 | 53.28% | 90,731,587.71 | 58,051,974.55 | -0.87% |
Reasons for changeThere was no significant change in the gross profit margin of sales of healthy consumer goods through various channels during thecurrent period.
3. Selling expenses and composition
| Sales expenses | January-June 2022 | January-June 2021 | Year-on-year increase/decrease | Description of significant changes |
Employee compensation
| Employee compensation | 322,603,966.58 | 229,922,405.33 | 40.31% | Mainly due to the increase in sales staff and medical business performance, and the corresponding increase in employee compensation |
Travel expenses
| Travel expenses | 3,848,684.40 | 5,786,992.03 | -33.49% | Mainly due to the decrease in business trips of sales staff caused by the impact of epidemic |
Office communicationcosts
| Office communication costs | 8,396,979.22 | 3,075,901.11 | 172.99% | Mainly due to the increase in office and network service fees |
Sales commission
| Sales commission | 118,542,577.52 | 98,622,807.60 | 20.20% | No major changes |
Insurance premiums
| Insurance premiums | 3,018,944.71 | 2,574,426.91 | 17.27% | No major changes |
| Depreciation and amortization | 156,566,925.78 | 113,209,102.14 | 38.30% | Mainly due to the amortization of right-of-use assets added for new stores of the consumer goods business and the amortization of long-term deferred expenses added for closed stores |
Advertising andmarketing expenses
| Advertising and marketing expenses | 235,198,138.16 | 233,984,397.50 | 0.52% | No major changes |
Rent
| Rent | 66,454,933.41 | 85,737,804.97 | -22.49% | No major changes |
Other
| Other | 35,540,974.97 | 52,891,982.98 | -32.80% | Mainly due to the decrease in other miscellaneous selling expenses |
Total
| Total | 950,172,124.74 | 825,805,820.57 | 15.06% |
4. 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 | November 09, 2020 | No | 2,047,316.15 | Primary |
| 2 | Franchisee II | May 01, 2020 | No | 1,637,036.90 | Primary |
| 3 | Franchisee III | June 12, 2020 | No | 1,339,037.08 | Primary |
| 4 | Franchisee IV | December 24, 2020 | No | 1,000,843.62 | Primary |
| 5 | Franchisee V | June 01, 2021 | No | 866,781.02 | Primary |
| Total | -- | -- | -- | 6,891,014.77 | -- |
Top 5 distributors
| S/N | Name of franchisee | Time of cooperation | A related party or not | Total sales (Rmb) |
5. 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 | 19,084,848 |
Average number of monthly active users
| Average number of monthly active users | 2,060,000 |
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 livingconsumer products)
| Taobao (healthy living consumer products) | 545,164,917.16 | 46,120,707.23 | 1.80% |
Jingdong (healthy livingconsumer products)
| Jingdong (healthy living consumer products) | 259,640,720.20 | 23,003,627.07 | 1.39% |
Amazon (medicalconsumables)
| Amazon (medical consumables) | 40,826,636.09 | 19,388,903.05 | 2.82% |
Vipshop (healthy livingconsumer products)
| Vipshop (healthy living consumer products) | 25,755,382.12 | 1,440,373.59 | 4.86% |
Opening or closing online sales channels by the Company
□ Applicable ? Not applicable
Description of the impact on the current and future development of the CompanyNot applicable.
6. Agency operation
Does it adopt agency operation?
□Yes ?No
7. Inventory
Inventory
| Main products | Inventory turnover in days | Inventory value | YoY increase/decrease in inventory balance | Reasons |
Medical dressings
| Medical dressings | 70 | 789,656,200.96 | 273,128,769.49 | A year-on-year increase of 52.88%, mainly due to the increase of merchandise inventory to meet the sales demand |
Healthy consumer goods
| Healthy consumer goods | 235 | 1,019,398,812.02 | （61,450,800.50） | A decrease of 5.69% over the end of last year without significant changes |
Overall
| Overall | 125 | 1,809,055,012.98 | 211,677,968.99 | An increase of 13.25% over the end of last year |
without significantchanges
Provision accrual for inventory depreciation
| Product Category | Amount of inventory depreciation reserves | Proportion of depreciation reserves | Net value of inventories | Original value of inventories | Inventory age | |||
| Within 1 year | 1-2 | 2-3 | 3 years and above | |||||
Medicalconsumables
| Medical consumables | 38,144,310.20 | 4.63% | 789,656,200.96 | 827,800,511.16 | 790,119,141.49 | 23,569,214.34 | 10,482,438.74 | 3,629,716.59 |
| Healthy consumer goods | 104,116,890.45 | 9.27% | 1,019,398,812.02 | 1,123,515,702.47 | 964,923,556.81 | 137,686,484.52 | 12,791,122.55 | 8,114,538.59 |
Total
| Total | 142,261,200.65 | 7.30% | 1,809,055,012.98 | 1,951,316,213.63 | 1,755,042,698.30 | 161,255,698.86 | 23,273,561.29 | 11,744,255.18 |
Inventory information of end channels such as franchises or distributorsIn 2022, in terms of healthy life consumer goods, the Company opened 5 new stores under the brand of Purcotton, with a total of 27stores. The franchise stores are operated in a business model in which franchisees are responsible for store construction and dailyoperations, and Purcotton provides brand marketing, merchandise and supply chain support. After the sales of stores, Purcotton andthe franchisees obtain their respective profits through sharing; The ownership of the franchise store inventory belongs to Purcotton.As of June 30, 2022, there was a inventory balance of RMB 10,530,000, with average RMB 390,000 in each store.
8. Brand building
Whether the company is involved in the production and sales of branded clothing, apparel and home textile products?Yes □ NoPrivate brand
| Brand name | Trademark name | Main product types | Features | Target customers | Main product price bands | Main market territory | Level of cities |
Purecotton
| Purecotton | Purecotton | 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 | RMB 5-30 /pack (100 pieces) | Nationwide | Second- and third-tier cities and above |
Purecotton
| Purecotton | Nice Princess | Sanitary pads | 100% cotton surface layer (surface layer, spacer, sanitary wing surface layer) | Female population at appropriate ages | RMB 1.99-3.99 /piece | Nationwide | Second- and third-tier cities and above |
Purecotton
| Purecotton | BBNice | Cotton diapers | 100% cotton surface layer; | Parental population | RMB 3.32-4.14 /piece | Nationwide | Second- and third-tier cities |
| unique in the market; made from natural cotton; 2mm ultra-thin core with 28 times ultra-high absorption capacity | and above |
Purecotton
| Purecotton | Purecotton | Wet wipes | 100% cotton material; soft and non-slippery; gentle and non-irritating | All-age customer base | RMB 20-40 /pack | Nationwide | Second- and third-tier cities and above |
Purecotton
| Purecotton | Purecotton | Baby products/clothing | 100% cotton material without fluorescent nor formaldehyde; the unique gauze fabric to provide more comfortable care | Expecting mothers, newborns, babies, toddlers | RMB 100-400 /piece | Nationwide | Second- and third-tier cities and above |
Purecotton
| Purecotton | Purecotton | Adult clothing / intimate apparel | 100% cotton material; high-quality cotton without fluorescent nor formaldehyde; soft to the touch; the unique gauze fabrics to provide more comfortable care | adults at appropriate ages | Outwear: RMB 200-600 yuan/piece; home wear: 200-500 yuan/piece; thermal underwear: RMB 100-500 yuan/piece; underwear: RMB 48-68 yuan/pair; socks: RMB 20-80 yuan/pair | Nationwide | Second- and third-tier cities and above |
Purecotton
| Purecotton | Purecotton | 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 | Expecting mothers, newborns, babies, toddlers and adult 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,ChinaAerospace
| Purcotton, China Aerospace | Purcotton, China Aerospace modeling figures | Baby clothing and supplies | The product is made from 100% cotton material and designed with China Aerospace image | Infants and young children customer group | RMB 198-458 /piece | Nationwide | Second- and third-tier cities and above | Shanghai Character License Administrative Co,.Ltd. | 9/15/2021 - 10/14/2021 | No |
Purcotton,Ultraman
| Purcotton, Ultraman | Purcotton, Ultraman modeling characters | Cotton tissues, wet tissues, bath towels | The product is made from 100% cotton material and designed with Ultraman cartoon image | All-age customer base | RMB 21.8-298 /piece | Nationwide | Second- and third-tier cities and above | Party A: Koni Culture (Beijing) Co., Ltd. Party B: Hangzhou Qianxi Culture Communication Co., Ltd | September 01,2021 - October 31,2022 | No |
Marketing and operation of each brand during the reporting periodPlease refer to the "Brand marketing" in "III. Analysis of Main Business" of "Section 3 Management Discussion and Analysis" formarketing and operation of brands.Cases involved in trademark ownership disputes
□ Applicable ? Not applicable
9. Other
Whether the Company is engaged in apparel design-related business?Yes □ No
| The number of fashion designers in the Company | 33 | The number of contracted fashion designers | 1 |
The operation of the builtdesigner platform
| The operation of the built designer platform | PLM syetem, 3D design platform and digital color tool Coloro Creative Intelligence |
Did the company hold an order meeting?
□Yes ?No
V. Non-main business analysis?Applicable □ Not applicable
Unit: yuan
| Amount | Proportion in total profits | Formation reasons | Is it sustainable |
Investment income
| Investment income | 31,452,189.90 | 3.01% | Mainly refers to the income from cash management with raised funds and self-owned funds | No |
Pro?t/los from changes
in fair value
| Pro?t/los from changes in fair value | 35,182,098.83 | 3.37% | Mainly refers to the income from cash management with raised | No |
funds and self-owned fundsImpairment of assets
| Impairment of assets | -73,045,565.34 | -7.00% | Mainly refers to the impairment arising from fair value assessment of inventories and fixed assets | No |
Non-operating income
| Non-operating income | 2,152,935.65 | 0.21% | Mainly refers to the gains from scrapping fixed assets | No |
Non-operating expenses
| Non-operating expenses | 8,633,722.09 | 0.83% | Mainly refers to the loss of scrapping fixed assets | No |
Credit impairment Loss
| Credit impairment Loss | （7,749,168.11） | -0.74% | Mainly refers to the estimated provision for credit impairment loss of accounts receivable and other receivables | No |
Gains from assetdisposal
| Gains from asset disposal | （547,132.74） | -0.05% | Mainly refers to the loss on disposal of non-current assets | No |
VI. Analysis of assets and liabilities
1. Significant changes in the composition of assets
Unit: yuan
| End of the reporting period | End of the previous year | Increase/decrease in proportions | Description of significant changes | |||
| Amount | The proportion in total assets | Amount | The proportion in total assets | |||
Monetary capital
| Monetary capital | 4,213,668,508.76 | 27.15% | 4,273,938,326.82 | 32.22% | -5.07% | No major changes |
Accountsreceivable
| Accounts receivable | 1,002,762,209.29 | 6.46% | 775,546,589.42 | 5.85% | 0.61% | Mainly due to sales growth |
Inventory
| Inventory | 1,809,055,012.98 | 11.65% | 1,597,377,043.99 | 12.04% | -0.39% | No major changes |
Long-termequityinvestments
| Long-term equity investments | 19,358,011.13 | 0.12% | 16,949,801.24 | 0.13% | -0.01% | No major changes |
Fixed assets
| Fixed assets | 1,924,347,463.68 | 12.40% | 1,477,320,848.63 | 11.14% | 1.26% | Mainly due to the increase caused by new mergers and acquisitions |
Construction inprogress
| Construction in progress | 531,760,298.29 | 3.43% | 216,096,622.30 | 1.63% | 1.80% | Mainly due to the increase in plant and equipment investment by subsidiaries |
Right-of-useassets
| Right-of-use assets | 473,619,587.07 | 3.05% | 531,735,443.44 | 4.01% | -0.96% | No major changes |
Short-term debt
| Short-term debt | 1,141,476,733.93 | 7.35% | 0.00 | 0.00% | 7.35% | Mainly due to increased borrowing |
Contractliabilities
| Contract liabilities | 320,794,802.74 | 2.07% | 341,175,665.42 | 2.57% | -0.50% | No major changes |
Long-term loans
| Long-term loans | 28,000,000.00 | 0.18% | 0.00 | 0.00% | 0.18% | Mainly due to the increase caused by new mergers and acquisitions |
Lease liabilities
| Lease liabilities | 316,525,936.97 | 2.04% | 381,808,925.09 | 2.88% | -0.84% | No major changes |
Advance to
| Advance to | 420,787,215.37 | 2.71% | 110,462,594.38 | 0.83% | 1.88% | Mainly due to |
| supplier | the increase in advance payment for raw material purchase |
Intangible assets
| Intangible assets | 799,026,401.97 | 5.15% | 265,700,890.65 | 2.00% | 3.15% | Mainly due to the appraisal appreciation of newly acquired companies |
Other non-current assets
| Other non-current assets | 252,312,831.03 | 1.63% | 115,571,001.80 | 0.87% | 0.76% | Mainly due to prepayment of equity funds to Pingan Medical Device |
Goodwill
| Goodwill | 588,885,371.18 | 3.79% | 0.00 | 0.00% | 3.79% | Mainly due to the premium generated by the newly acquired company |
Notes payable
| Notes payable | 146,065,963.57 | 0.94% | 36,200,130.04 | 0.27% | 0.67% | Mainly due to the increase in the amount settled by bills |
Accountspayable
| Accounts payable | 996,960,746.96 | 6.42% | 734,521,490.60 | 5.54% | 0.88% | Mainly due to the increase in the amount payable for raw material purchase |
Taxes payable
| Taxes payable | 183,490,178.24 | 1.18% | 93,859,069.68 | 0.71% | 0.47% | Mainly due to the increase in corporate income tax payable |
Deferred incometax liabilities
| Deferred income tax liabilities | 80,180,343.95 | 0.52% | 13,337,159.68 | 0.10% | 0.42% | Mainly due to the increase of deferred income tax liabilities recognized by the newly acquired companies in the appraisal appreciation |
2. Major overseas assets
□ Applicable ? Not applicable
3. 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. Trading
financialassets(excludingderivative
| 1. Trading financial assets (excluding derivative | 3,130,529,709.10 | 35,182,098.83 | 3,093,150,000.00 | 3,499,161,820.00 | 2,726,914,556.35 |
financialassets)Financialassetssubtotal
| Financial assets subtotal | 3,130,529,709.10 | 35,182,098.83 | 3,093,150,000.00 | 3,499,161,820.00 | 2,726,914,556.35 |
Total of theabove
| Total of the above | 3,130,529,709.10 | 35,182,098.83 | 3,093,150,000.00 | 3,499,161,820.00 | 2,726,914,556.35 |
Financialliabilities
| Financial liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 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
4. Restricted rights to assets as of the end of the reporting period
The breakdown of monetary funds that are restricted in use due to mortgages, pledges or freezes, restricted inwithdrawal due to centralized management of funds, as well as those placed outside China with restrictions onrepatriation of funds, is as follows:
| Item | Closing Balance | Beginning balance |
L/C deposit*1
| L/C deposit*1 | 50,672,072.00 | 27,597,366.13 |
Deposit for bank acceptance bill*2
| Deposit for bank acceptance bill*2 | 11,119,000.00 | - |
Performance bond*3
| Performance bond*3 | 2,354,080.27 | 2,162,025.10 |
Balance of other restricted monetary funds * 4
| Balance of other restricted monetary funds * 4 | 5,977,829.57 | 155,566,673.55 |
Total
| Total | 70,122,981.84 | 185,326,064.78 |
*1 L/C deposit refers to the deposit deposited by Winner Medical and Winner Medical (Tianmen) to for the processing of letters ofcredit.*2 Deposit for bank acceptance bill refers to the deposit deposited by Longterm Medical for issuance of acceptance bill.*3 The performance bond is the deposit deposited by Winner Medical (Hong Kong) in the bank for transactions with customers.*4 Balance of other restricted monetary funds refers to the balance of special deposit accounts for restricted non-budget units openedby Shenzhen Purcotton and PureH2B in accordance with the regulations of prepaid card issuance formulated by the Ministry ofCommerce.VII. Analysis of investment
1. Overall situation
?Applicable □ Not applicable
| Investment amount in the reporting period (RMB) | Investment amount in the same period of the previous year (RMB) | Change percentage |
4,609,168,278.88
| 4,609,168,278.88 | 2,855,178,484.95 | 61.43% |
2. Significant equity investments acquired during the reporting period
?Applicable □ Not applicable
Unit: yuan
| Name of the invested company | Principal operation | Investment method | Investment amount | Shareholding ratio | Source of funds | Partner | Investment period | Product type | Progress as of the balance sheet date | Estimated income | Current investment profit and loss | Involved in litigation | Date of disclosure (if any) | Disclosure index (if any) |
ZhejiangLongterm
| Zhejiang Longterm | R&D, production and | Acquisition | 727,540,000.00 | 55.00% | Self-owned funds | / | / | Medical consumables | The acquisition date | 0.00 | 4,894,217.53Note | No | April 11, 2022 |
| Medical Technology Co., Ltd. | sales of high-end wound dressings | was April 30, 2022, the income statement for May-June 2022 and the balance sheet as of June 30, 2022 are included in the consolidation scope |
GuilinZizhuLatexProducts Co.,Ltd.
| Guilin Zizhu Latex Products Co., Ltd. | Production and sales of medical latex surgical gloves, medical inspection gloves and latex condoms | Acquisition | 450,000,000.00 | 100.00% | Self-owned funds | / | / | Medical consumables | The acquisition date was June 30, 2022, the balance sheet as of June 30, 2022 is included in the consolidation scope | 0.00 | 0.00 | No | June 08, 2022 |
Total
| Total | -- | -- | 1,177,540,000.00 | -- | -- | -- | -- | -- | -- | 0.00 | 4,894,217.53 | -- | -- | -- |
Note: The current investment profit and loss of Longterm Medical is RMB 4,894,217.53, which is the net profit attributable to theparent company from May to June 2022 continuously calculated on the basis of the fair value of identifiable net assets on thepurchase date.
3. Significant non-equity investments in progress during the reporting period?Applicable □ Not applicable
Unit: yuan
| Project name | Investment method | Investment in fixed assets or not | Industries involved in investment projects | Investment amount in the current reporting period | Cumulative actual investment amount as of the | Source of funds | Project progress | Estimated income | Cumulative realized gains as of the end of the | Reasons for not meeting the scheduled progress | Date of disclosure (if any) | Disclosure index (if any) |
| end of the reporting period | reporting period | and projected earnings |
High-enddressingproduction lineconstructionproject
| High-end dressing production line construction project | Independent | Yes | Medical consumables | 54,806,787.08 | 86,790,500.00 | Proceeds | 40.02% | 0.00 | 0.00 | N/A |
Marketingnetworkconstructionproject
| Marketing network construction project | Independent | Yes | Healthy consumer goods | 60,632,961.37 | 279,014,300.00 | Proceeds | 39.60% | 0.00 | 0.00 | N/A |
R&DCenterconstructionproject
| R&D Center construction project | Independent | Yes | Medical consumables + healthy living consumer products | 27,481,988.87 | 101,222,600.00 | Proceeds | 43.00% | 0.00 | 0.00 | N/A |
Digitalmanagementsystemproject
| Digital management system project | Independent | Yes | Medical consumables + healthy living consumer products | 12,861,053.53 | 113,234,500.00 | Proceeds | 42.12% | 0.00 | 0.00 | N/A |
WinnerIndustrial Park(Jiayu)Project
| Winner Industrial Park (Jiayu) Project | Independent | Yes | Medical consumables | 11,971,947.87 | 64,086,300.00 | Proceeds | 16.02% | 0.00 | 0.00 | N/A |
Phase IIexpansionprojectofWinnerMedicalWuhan
| Phase II expansion project of Winner Medical Wuhan | Independent | Yes | Medical consumables + healthy living consumer products | 170,723,540.16 | 377,566,700.00 | Proceeds | 62.93% | 0.00 | 0.00 | N/A |
Total
| Total | -- | -- | -- | 338,478,278.88 | 1,021,914,900.00 | -- | -- | 0.00 | 0.00 | -- | -- | -- |
4. Financial assets measured at 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 | Other changes | Closing balance | Source of funds |
Trustproducts
| Trust products | 1,330,000,000.00 | 8,923,223.76 | 959,000,000.00 | 1,039,000,000.00 | 3,240,646.93 | 1,273,043,323.76 | Self-owned funds |
| Funds | 40,000,000.00 | 40,000,000.00 | Self-owned funds |
Other
| Other | 1,770,996,820.00 | 26,258,875.07 | 2,094,150,000.00 | 2,460,161,820.00 | 25,803,333.08 | 1,413,871,232.59 | Owned + raised funds |
Other
| Other | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Self-owned funds |
Total
| Total | 3,100,996,820.00 | 35,182,098.83 | 0.00 | 3,093,150,000.00 | 3,499,161,820.00 | 29,043,980.01 | 0.00 | 2,726,914,556.35 | -- |
5. The use of proceeds
?Applicable □ Not applicable
(1) The overall use of proceeds
?Applicable □ Not applicable
Unit: RMB ’0,000
| Total amount of proceeds | 355,884.93 |
Total amount of proceeds invested during the reporting period
| Total amount of proceeds invested during the reporting period | 87,378.13 |
Total accumulated amount raised for proceeds
| Total accumulated amount raised for proceeds | 219,621.78 |
Total amount of proceeds for alteration purposes during thecurrent reporting period
| Total amount of proceeds for alteration purposes during the current reporting period | 8,787 |
Total accumulated amount of proceeds for alteration purposesduring the current reporting period
| Total accumulated amount of proceeds for alteration purposes during the current reporting period | 8,787 |
Proportion of total amount of proceeds for alteration purposesduring the current reporting period
| Proportion of total amount of proceeds for alteration purposes during the current reporting period | 2.47% |
Description of the overall use of proceeds
Description of the overall use of proceedsIn the first half of 2022, the Company used raised funds of RMB 873,781,300. As of June 30, 2022, the Company had actually usedraised funds of RMB 2,196,217,800.
In the first half of 2022, the Company used raised funds of RMB 873,781,300. As of June 30, 2022, the Company had actually usedraised funds of RMB 2,196,217,800.
(2) Projects committed with raised funds
?Applicable □ Not applicable
Unit: RMB ’0,000
| 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 projects
Committed investment projects
High-enddressingproduction lineconstructionproject
| High-end dressing production line construction project | No | 21,685.86 | 21,685.86 | 5,480.68 | 8,679.05 | 40.02% | September 30, 2024 | 0 | 0 | N/A | No |
Marketingnetworkconstructionproject
| Marketing network construction project | Yes | 70,456.87 | 61,669.87 | 6,063.3 | 27,901.43 | 39.60% | September 30, 2024 | 0 | 0 | N/A | No |
R&D
| R&D | No | 23,542.1 | 23,542.1 | 2,748.2 | 10,122.2 | 43.00% | Septemb | 0 | 0 | N/A | No |
| Center construction project | 5 | 5 | 6 | er 30, 2024 |
Digitalmanagementsystemproject
| Digital management system project | No | 26,881.05 | 26,881.05 | 1,286.11 | 11,323.45 | 42.12% | September 30, 2024 | 0 | 0 | N/A | No |
Bolsterworkingcapital
| Bolster working capital | No | 8,787 | 0 | 0 | 0.00% | 0 | 0 | N/A | No |
Subtotalofcommittedinvestmentprojects
| Subtotal of committed investment projects | -- | 142,565.93 | 142,565.93 | 15,578.29 | 58,026.19 | -- | -- | 0 | 0 | -- | -- |
Investment of over-raised proceeds
Investment of over-raised proceedsWinnerIndustrial Park(Jiayu)Project
| Winner Industrial Park (Jiayu) Project | 40,000 | 1,197.19 | 6,408.63 | 16.02% | June 30, 2023 | 0 | 0 | N/A | No |
Phase IIexpansion projectofWinnerMedicalWuhan
| Phase II expansion project of Winner Medical Wuhan | 60,000 | 17,072.35 | 37,756.67 | 62.93% | December 30, 2022 | 0 | 0 | N/A | No |
Return ofbankloans (ifany)
| Return of bank loans (if any) | -- | -- | -- | -- | -- | -- |
Bolsterworkingcapital(if any)
| Bolster working capital (if any) | -- | 113,319 | 53,530.3 | 117,430.3 | 100.00% | -- | -- | -- | -- | -- |
Subtotalof use ofover-raisedproceeds
| Subtotal of use of over-raised proceeds | -- | 213,319 | 71,799.84 | 161,595.6 | -- | -- | -- | -- |
Total
| Total | -- | 142,565.93 | 355,884.93 | 87,378.13 | 219,621.79 | -- | -- | 0 | 0 | -- | -- |
Information onandreasonsfor notmeetingthescheduledprogressorprojectedearnings(byspecificproject)
| Information on and reasons for not meeting the scheduled progress or projected earnings (by specific project) | N/A |
| Description of significant changes in project feasibility | N/A |
Amount,purposeandprogressof use ofover-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 RMB 639 million of the over-raised proceeds to permanently supplement the working capital. As of June 30, 2022, RMB 1174.303 million 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 RMB 400.0000 million 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 RMB 900.0000 million, 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 wipes, medical cotton/gauze/nonwoven fabrics, hand sanitizer and other products. As of June 30, 2022, the total amount invested in the above projects was 64.0863 million. 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 RMB 600.0000 million 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 RMB 1,500.0000 million, and the implementing entity is Winner Medical (Wuhan) Co., Ltd. The project includes nonwoven 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. The Company held the sixth meeting of the third session of the Board of Directors and the fifth meeting of the third session of the Supervisory Committee on April 20, 2022, and the annual general meeting of 2021 on May 13, 2022, respectively, and 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 RMB 494.19 million of the over-raised proceeds and the corresponding cash proceeds to permanently supplement the working capital. |
Changeoflocationfor theimplementationof theproceedsinvestment project
| Change of location for the implementation of the proceeds investment project | Applicable |
| Occurred in previous years | |
| 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 theimplementation
| Adjustment of the implementation | Applicable |
| Occurred during the reporting period | |
| 2021 annual general meeting reviewed and approved the "Proposal on Adjusting the Implementation Mode, Extending |
| mode of the proceeds investment project | the Construction Period and Permanently Bolstering the Working Capital of Some Fund Raising Projects", and agreed to adjust the implementation mode of some of the fund-raising projects. To quickly respond to market changes, improve the efficiency of the use of funds raised, and build marketing network projects, the investment related to the online marketing of the wholly-owned subsidiary Shenzhen PurCotton Technology Co., Ltd. was increased. |
Pre-investment andreplacement of theproceedsinvestment project
| 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 on the Replacement of Self-financing Funds Pre-invested in New Projects with Excess Funds Raised", respectively, and agreed that the Company could replace the self-raised funds pre-invested in the fundraising project with RMB 100.1742 million of proceeds. It has been verified by the [2021] No.ZI10031 "Special Auditor’s Report on Proceeds Replacement of Winner Medical Products Co., Ltd." 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 RMB 100.1742 million, of which: RMB 85.8942 million was invested in the Wuhan Phase II expansion project, and RMB 14.28 million was invested in Winner Industrial Park (Jiayu) Project. In February and March 2021, the Company transferred 14.28 million yuan and RMB85.8942 million respectively from the special account for proceeds to replace the self-raised funds that had been invested in advance in the 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 RMB 233.7173 million of proceeds. It has been verified by the [2020] No.ZI10635 "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 RMB 233.7173 million, of which: RMB 26.5062 million was invested in high-end dressing production line construction project, RMB 110.0794 million was invested in marketing network building project, RMB 50.2174 million was invested in R&D center construction project, RMB 46.9143 million was invested in digital management system project. In October and November 2020, the Company transferred RMB 73.4204 million and RMB 160.2968 million respectively from the special account for proceeds to replacing the self-raised funds that had been invested in advance in the proceeds project. |
Temporaryreplenishment ofworkingcapitalwith idleproceeds
| Temporary replenishment of working capital with idle proceeds | N/A |
Amountof andreasonsfor thebalanceofproceedsresultingfromprojectimplementation
| Amount of and reasons for the balance of proceeds resulting from project implementation | N/A |
Usageandpurposesofproceedsnot usedduringthecurrentreportingperiod
| Usage and purposes of proceeds not used during the current reporting period | As of June 30, 2022, the balance of unused proceeds of the Company was RMB1,471.0514 million, of which: the balance of cash management was RMB1,436.9954 million and the balance of RMB34.056 million was deposited in the account for proceeds. |
Problemsor othercircumst
| Problems or other circumst | NA |
ances inthe useanddisclosure ofproceeds
(3) Changes in proceeds projects
?Applicable ?Not applicable
| Project after change | Corresponding original committed projects | Total amount of proceeds to be invested in the changed project (1) | Actual investment amount in the current reporting period | Actual 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 | Whether projected benefits are met | Whether there is a significant change in the feasibility of the changed project |
Marketingnetworkconstruction project
| Marketing network construction project | Marketing network construction project | 61,669.8 | 6,063.3 | 27,901.43 | 45.24% | September 30, 2024 | 0 | N/A | No |
Total
| Total | -- | 61,669.8 | 6,063.3 | 27,901.43 | -- | -- | 0 | -- | -- |
Reasons for change, decision-makingprocedures and information disclosure(by specific project)
| Reasons for change, decision-making procedures and information disclosure (by specific project) | Due to the strategic adjustment of the Company, the Company held the sixth meeting of the third session of the Board of Directors and the fifth meeting of the third session of the Supervisory Board on April 20, 2022 and the annual general meeting of 2021 on May 13, 2022, respectively, and reviewed and approved the Proposal on Adjusting the Implementation Mode, Extending the Construction Period and Permanently Bolstering the Working Capital of Some Fund Raising Projects, and investment on the marketing network building project of the wholly-owned subsidiary Shenzhen PureH2B Technology Co., Ltd. was terminated On April 22, 2022, the Company disclosed the Announcement on Adjusting the Implementation Mode, Extending the Construction Period and Permanently Bolstering the Working Capital of Some Fund Raising Projects (Announcement No. 2022-021) |
Information on and reasons for notmeeting the scheduled progress orprojected earnings (by specificproject)
| Information on and reasons for not meeting the scheduled progress or projected earnings (by specific project) | The fund-raising capital investment project has not been completed and the benefits generated by the fund-raising capital investment project cannot be calculated yet |
Description of significant changes inthe feasibility of the changed project
| Description of significant changes in the feasibility of the changed project | The feasibility of the marketing network building project has not changed significantly |
6. Entrusted financial management, derivatives investment and entrusted loans
(1) Entrusted financial management
?Applicable □ Not applicableOverview 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 | Impairment of overdue financial management |
Bank financialproducts
| Bank financial products | Self-owned funds | 74,160 | 28,000 | 0 | 0 |
Bank financialproducts
| Bank financial products | Proceeds | 135,255 | 112,498.5 | 0 | 0 |
Trust financialproducts
| Trust financial products | Self-owned funds | 95,900 | 125,000 | 0 | 0 |
Other categories
| Other categories | Self-owned funds | 4,000 | 4,000 | 0 | 0 |
Total
| Total | 309,315 | 269,498.5 | 0 | 0 |
Specific circumstance of high-risk entrusted financing with significant single amount or with low security, poor liquidity and notbreak-even
□ 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) Derivative investment
□ Applicable ? Not applicable
The Company has no derivative investment in the reporting period.
(3) Entrusted loans
□ Applicable ? Not applicable
The Company had no entrusted loan during the reporting period.VIII. Sales of significant asset and equity
1. Information of significant assets for sale
□ 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 major holding companies and joint stock companies?Applicable □ Not applicableInformation 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 | Operating income | 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 | 1,377,173,770.23 | 1,056,382,873.59 | 1,048,357,744.53 | 175,602,477.72 | 153,811,702.62 |
Acquisition and disposal of subsidiaries during the reporting period?Applicable ?Not applicable
| Company name | Method of acquisition and disposal of subsidiaries during the reporting period | Impact on overall production operations and performances |
Zhejiang Longterm Medical TechnologyCo., Ltd.
| Zhejiang Longterm Medical Technology Co., Ltd. | Acquisition | Helps to enrich the Company's product line and expand business channels |
Winner Guilin Latex Co., Ltd.
| Winner Guilin Latex Co., Ltd. | Acquisition | Helps to enrich the Company's product line and expand business channels |
Description of major holding companies and joint stock companies
X. Structured subjects controlled by the Company
□ Applicable ? Not applicable
XI. Risks faced by the Company and countermeasures
1. Risk of earnings volatility due to the COVID-19 outbreak and countermeasuresAffected by the COVID-19 pandemic, the Company’s sales of epidemic protective products, such as medical masks and protective
clothing increased significantly in 2020. In 2021, with the effective prevention and control of the Covid-19 across the globe and thegrowth of a wide range of vaccination, medical protection products and increased competition, the Company's medical protectionproducts sales decreased year-on-year. In the first half of 2022, Shanghai, Hong Kong and other places suffered from severe epidemicprevention and control circumstances, and the Company's medical protection products sales increased year on year. The Company'smedical protection products are affected by the epidemic changes, and short-term sales revenue and net profit may fluctuate.Hit by the COVID-19 pandemic, the country, hospitals and the public have raised the requirements for a hygienic environment, theCompany’s brand awareness, reputation and influence has been greatly enhanced, while sales channels have been further expanded.The Company then will seize market opportunities, make product adjustments according to market demands, increase its share andcoverage 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 capita disposableincome or purchasing power, or an uncertain expected economic outlook, the downstream demand situation of the Company, especiallyconsumers’ willingness and ability to purchase high-quality products, may be affected, which would adversely affect the Company’soperating results. In addition, after more than ten years of rapid development, the growth of e-commerce in China has slowed downand the difficulty of acquiring customers has increased. If the Company cannot adjust its business strategy based on market conditions,it may not be able to continuously expand its customer base and reduce customer acquisition costs, which would adversely affect theCompany’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 in thefuture, it will have a greater cost pressure on the Company’s production and operation. If the Company fails to the adjustment of salesprice 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 is relativelylow, and when the cotton price rises to a certain level, it will adjust the sales price appropriately to reduce the negative impact on theCompany’s profitability.
4. 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 of regulationsand policies on industry standards, bidding, price formation mechanisms, circulation systems, etc., which have a wide and profoundimpact on the development of the medical device industry. Affected by the COVID-19 pandemic, the foreign economic environmenthas been relatively sluggish, which may lead to medical budget cuts, and the price sensitivity of medical products has increased,resulting in a risk of further compressing the operating profits. If the Company fails to adapt to profound changes in industry policiesin a timely manner, it may have an impact on the Company’s operations.
5. Risk of not receiving reimbursement for the Heyuan Winner Medical Investment Project and countermeasuresDue 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, theAgreement on Investment and Construction of Medical Combo Kits and Cotton HouseholdProducts Production Project entered into by and between the Company and the People’s Government of Zijin County, Heyuan City inMay 2016 could not be fulfilled. In November 2019, the International Arbitration Court in Ganjiang New District issued an Awardconfirming the termination of the Investment and Construction Agreement of Medical Combo Kits and Cotton Household ProductsProduction Project, and the People’s Government of the Zijin County shall compensate the Company for economic losses of RMB550 million, with 50% to be paid by the People’s Government of Zijin County by December 31, 2019 and 50% by February 29, 2020.As of the disclosure date of the report, the Company has received a land transfer deposit of RMB 3 million and a compensation paymentof RMB 319 million returned by the People’s Government of Zijin County. There is a risk that the remaining amount may not bereceived on time in accordance with the Award. The Company is currently closely following up on the subsequent payment plan of thePeople’s Government of Zijin County, Heyuan City.
6. Risks of proceeds projects and countermeasures
The Company plans to allocate the proceeds from this issuance to the construction projects of high-end dressing production lines,marketing network, R&D Center and digital management system. The development progress and operation of such projects willcontribute to the Company’s development and profitability in the next few years.
XII. Registration forms for receptions of surveys, communication, interviews and otheractivities during the reporting period
?Applicable □ Not applicable
| Time | Location | Method | Types of objects | Objects | Main contents of discussions and documents provided | Basic information index of surveys |
January 07, 2022
| January 07, 2022 | Headquarter conference rooms | Telephone communication | Institutions | 85 investors, including Rongtong Fund, Alpha Fund and Fullgoal Fund | Business overview and operation | For details, please refer to SZSE Interactive Ease |
February 08,2022
| February 08, 2022 | Headquarter conference rooms | Telephone communication | Institutions | 102 investors, including GF Fund, ChinaAMC, Bosera Funds | Business overview and operation | For details, please refer to SZSE Interactive Ease |
February 28,2022
| February 28, 2022 | Guojin Securities Strategy Meeting | Telephone communication | Institutions | 18 investors, including Springs Capital, Minghe Investment | Business overview and operation | For details, please refer to SZSE Interactive Ease |
March 02, 2022
| March 02, 2022 | Huachuang Securities Strategy Meeting | Telephone communication | Institutions | 37 investors, including Fullgoal Fund, GF Fund, ABC-CA Fund | Business overview and operation | For details, please refer to SZSE Interactive Ease |
March 04, 2022
| March 04, 2022 | Changjiang Securities & Orient Securities Strategy Meeting and UBS telephone research | Telephone communication | Institutions | 47 investors, including ChinaAMC, Invesco Great Wall Funds, China Southern Fund | Business overview and operation | For details, please refer to SZSE Interactive Ease |
April 22, 2022
| April 22, 2022 | Webcast platform | Other | Other | Online investor | FY2021 operation | For details, please refer to SZSE Interactive Ease |
April 26, 2022
| April 26, 2022 | Headquarter conference rooms | Telephone communication | Institutions | 79 investors, including BlackRock, PAG Fund, UBS | Business overview and operation | For details, please refer to SZSE Interactive Ease |
April 27, 2022
| April 27, 2022 | Headquarter conference rooms | Telephone communication | Institutions | 35 investors, including China Universal Asset, Aegon-industrial Fund, BOCOM Schroders | FY2021 performance communication | For details, please refer to SZSE Interactive Ease |
April 28, 2022
| April 28, 2022 | Headquarter conference rooms | Telephone communication | Institutions | 9 investors, including Huafu Fund, BOC Investment, Guolian Securities | FY2021 performance communication | For details, please refer to SZSE Interactive Ease |
April 29, 2022
| April 29, 2022 | Headquarter conference rooms | Field surveys | Institutions | 2 investors, including China Merchants Securities | FY2021 performance communication | For details, please refer to SZSE Interactive Ease |
May 10, 2022
| May 10, 2022 | Interactive Ease | Other | Other | All online investors | Business overview and operation | For details, please refer to SZSE Interactive |
EaseMay 19, 2022
| May 19, 2022 | Headquarter conference rooms | Telephone communication | Institutions | 84 investors, including Invesco Great Wall Funds, China Southern Fund, Great Wall Fund | Company M&A | For details, please refer to SZSE Interactive Ease |
May 27, 2022
| May 27, 2022 | Headquarter conference rooms | Field surveys | Individual | Various individual investors | Business overview and operation | For details, please refer to SZSE Interactive Ease |
June 09, 2022
| June 09, 2022 | Headquarter conference rooms | Telephone communication | Institutions | 60 investors, including Perseverance Asset, Aegon-industrial Fund and King Time Investment | Company M&A | For details, please refer to SZSE Interactive Ease |
Section IV Corporate governance
I. 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 | Meeting resolutions |
Annual generalmeeting ofshareholders in2021
| Annual general meeting of shareholders in 2021 | Annual general meeting of shareholders | 77.06% | May 13, 2022 | May 13, 2022 | Proposal on the <Annual Report and Summary for 2021>, Proposal on the Plan on the Profit Distribution for 2021, etc. |
2. The preferred shareholders with voting rights restored request an extraordinary general meeting ofshareholders
□ Applicable ? Not applicable
II. Change of directors, supervisors and senior management
□ Applicable ? Not applicable
There were no changes in the directors, supervisors and senior management of the Company during the reporting period, which canbe found in the Annual Report 2021.III. Profit distribution and share capital increase from capital surplus during the reportingperiod
□ Applicable ? Not applicable
The Company plans not to distribute cash dividends, send bonus shares or increase capital by capital reserve for the half-year.IV. Implementation of the Company's equity incentive plan, employee stock ownership planor other employee incentive measures?Applicable □ Not applicable
1. Share Incentive
On November 27, 2020 and December 15, 2020, the Company held the 15th meeting of the second board of directors and the 6thextraordinary general meeting of shareholders in 2020 respectively, deliberated and passed the Proposal on the Company's RestrictedStock Incentive Plan in 2020 (Draft) and Its Abstract and related matters. The general meeting of shareholders authorized the board ofdirectors to determine the grant date of restricted stocks, and relevant matters which is necessary to grant restricted shares to theincentive object and go through the procedures 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, 2020and 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 boardof supervisors respectively, deliberated and passed the Proposal on Matters Related to the Adjustment of the Restricted Stock IncentivePlan in 2020 and the Proposal on the First Grant of Restricted Stocks to the Incentive Objects, and determined that December 18, 2020will 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 relevant announcement disclosed by the Company on the website (http://www.cninfo.com.cn) on December 22, 2020.On April 20, 2022 and May 13, 2022, the Company held the sixth meeting of the third session of the Board of Directors and the annualgeneral meeting of 2021, respectively to review and approve the Proposal on the revocation of some of the granted restricted sharesthat have not yet vested. As the Company did not meet the performance evaluation target in 2021 and some of the incentive targets areno longer qualified for the incentive, the Company revoked a total number of 3,336.6925 restricted shares.
2. Implementation of Employee Stock Ownership Plan
□ Applicable ? Not applicable
3. Other Employee Incentive Measures
□ Applicable ? Not applicable
Section V Environment and Social Responsibility
I. Significant environmental issuesWhether 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?, 134mg/m? | 20mg/m?, 50mg/m?, 200mg/m? | NOX: 2.051T, SO2: 0.048T | 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 | 7.6, 52mg/L, 12.5mg/L, 1.34mg/L, 9mg/L | 6-9, 80mg/L, 20mg/L, 10mg/L, 50mg/L | COD: 10.04T, NH3-N: 0.233T | 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 | 3.3mg/m?, 4mg/m?, 152mg/m? | 20mg/m?, 50mg/m?, 200mg/m? | NOX: 1.636T, SO2: 0.043T | NOX:, SO2: 未许可 | 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 | 8.2, 48mg/L, 14.2mg/L, 0.15mg/L, 11mg/L | 6-9, 100mg/L, 20mg/L, 15mg/L, 70mg/L | COD: 4.33T, NH3-N: 0.04T | 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?, 42/117mg/m? | 20mg/m?, 50 mg/m?, 200mg/m? | NOX: 6.48T, SO2: 0.807T | NOX: 23.52T/a, SO2: | 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 | 7.8, 74mg/L, 14.8mg/L, 1.07mg/L, 10mg/L | 6-9, 500mg/L, 300mg/L, 45mg/L, 400mg/L | COD: 32.02T, NH3-N: 0.51T | 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 | 2.8mg/m?, <3mg/m?, 100mg/m? | 20mg/m?, 50mg/m?, 200mg/m? | NOX: 1.94T, SO2: 0.118T | 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 | 7.6, 64mg/L, 19.2mg/L, 1.18mg/L, 16mg/L | 6-9, 400mg/L, 150mg/L, 30mg/L, 250mg/L | COD: 9.94T NH3-N: 0.095T | 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, chromaticity | Indirect discharge | 1 | Sewage discharge outlet | 7.6, 183mg/L, 39.8mg/L, 7.66mg/L, 7 | 6-9, 500mg/L, 300mg/L, 45mg/L, 64 | COD: 20.14T, NH3-N: 2.01T | COD: 61T/a, NH3-N: 6.1T/a | Not exceeding the standard |
WinnerMedical
| Winner Medical | PM, SO2, NOX | / | 1 | Boiler discharge | 1.9mg/m?, <3 mg/m?, | 20mg/m?, 50mg/m?, | NOX: 1.057T, | NOX: 10.83T/a, | Not exceeding |
| (Jingmen) Co., Ltd. | outlet | 75mg/m? | 150mg/m? | SO2: 0.046T | SO2: 3.11T/a | the standard |
WinnerMedical(Jingmen)Co., Ltd.
| Winner Medical (Jingmen) Co., Ltd. | PH, COD, BOD, NH3-N, SS | Indirect discharge | 1 | Sewage discharge outlet | 8.1, 43mg/L, 7.0mg/L, 0.54mg/L, 12mg/L | 6-9, 200mg/L, 50mg/L, 20mg/L, 100mg/L | COD: 5.696T, NH3-N: 0.570T | COD: 19.48T/a, NH3-N: 1.95T/a | Not exceeding the standard |
YichangWinnerTextileWeavingCo., Ltd.
| Yichang Winner Textile Weaving 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 |
YichangWinnerTextileWeavingCo., Ltd.
| Yichang Winner Textile Weaving 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 discharge | 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. Relevant information is published in theemission permit management platform, and all branches submit emission permit execution reports as required.All companies have built general waste storage sites and hazardous waste rooms in accordance with regulations. The general solidwaste is managed in a ledger; the hazardous waste is managed throughout the process, and an agreement is signed with a third-partycompany to entrust the disposal of the waste, and the waste is regularly transferred and entrusted to the third party for treatment.Environmental impact assessment of construction projects and other administrative permits for environmental protectionWinner 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 6390M
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 the 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 project was approvedby Xianning Ecological Environment Bureau on March 15, 2021 (X.H.S [2021] No. 21), and construction is currently underway.Yichang Winner Textile Weaving 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 Tianmen City on January 25, 2017; the independent acceptance of phase II will be completed onMay 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. "Medical Products Sterilization Center Project" received the approval of the Tianmen EcologicalEnvironment Bureau on January 17, 2022 (T.H.H. [2022] No. 4), and is currently under acceptance.Winner Medical (Jingmen) Co., Ltd.: "30 million meters per year medical gauze bleaching and refining production line expansionproject" obtained the EIA approval from the 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 expansionproject) obtained the EIA approval (J.H.S. [2020] No.112) from Jingmen Municipal Bureau of Ecology and Environment onDecember 24, 2020.Winner Medical (Huanggang) Co., Ltd.: "cotton spun laced non-woven fabric production project (phase I and phase II)" obtained theEIA approval (E.H.H. [2011] No.628) from the 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, and completed the project 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, but the project has not started construction yet; "new electron accelerator irradiationdevice project" obtained the EIA approval (W.H.G. [2018] No.5) from Wuhan Environmental Protection Bureau on January 15,2018. The project will be built in two phases, with the independent acceptance of phase I completed on May 15, 2020, and theindependent acceptance of phase II completed on Nov 19, 2021. The environmental impact report form of "Upgrading andtransformation project of medical protective products" obtained the approval from Administrative Approval Bureau of XinzhouDistrict on May 7, 2021 ([2021] No. 95), however, the project is not completed. "Winner Medical Phase II Expansion Project" wasapproved by Wuhan Ecological Environment Bureau and Wuhan Administrative Approval Bureau on June 21, 2022 ([2022] No. 27),the project is currently under construction.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, sent them to the local environmental protection authorities for record, and regularly conducts emergency drills forenvironmental emergencies.Environmental self-monitoring schemeAll subsidiaries have applied for discharge permits, of which the self-monitoring programs are formulated in accordance with therelevant industry norms. Pollutants are mainly detected through a combination of manual laboratory tests + commissionedmonitoring + online monitoring. The online monitoring systems of the subsidiaries involved in the online monitoring of productionwastewater discharge are networked with government authorities for real-time monitoring, and the online monitoring equipment isentrusted to a professional third-party company for operation and maintenance. Commissioned monitoring and manual monitoringprojects are implemented according to the requirements of the monitoring program, and the monitoring results are released in atimely manner on the provincial pollutant platform.Self-monitoring scheme of each subsidiary is made public on the national pollutant discharge permit management platform.Administrative penalties imposed for environmental issues during the reporting period
| Company or | Reason | Violation | Result | Impact on the | Corrective measure |
| subsidiary name | production and operation of the listed company |
N/A
| N/A | N/A | N/A | N/A | N/A | N/A |
Other environmental information that should be disclosedNoneMeasures taken to reduce its carbon emissions during the reporting period and their effects?Applicable □ Not applicableThe Company conducts monthly statistical analysis of carbon emissions of its subsidiaries, establishes a carbon emissionmanagement system and carries out carbon footprint accounting for some products.Other information related to environmental protectionNoneThe Company needs to comply with the disclosure requirements of the "Textile and Apparel Business" stipulated in the No. 3Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - 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. Yichang Winner Textile Weaving Co., Ltd.:
No production wastewater discharge, domestic wastewater enters the municipal pipe network, and clean energy natural gas is used asfuel. Environmental monitoring is conducted as required.
4. 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 station
completed 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.
5. 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.
6. 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.
7. 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/dafter the completion of phase I, 4067.11t/d after the completion of phase II and 6004.5t/d after the completion of phase III. Thewastewater is treated by the process of "hydrolysis acidification + anaerobic + biological contact oxidation method". Onlinemonitoring of wastewater has been installed, and the phase I project of the sewage station completed independent acceptance onJanuary 7, 2020, implementing the level III standard limit in Table 4 of Integrated Wastewater Discharge Standard (GB8978-1996).The sewage plant’s structure is concrete structure, with a service life of 20 years and environmental protection equipment for 10years.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 the Standard 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.
8. Winner Guilin Latex Co., Ltd.
The wastewater of the project mainly includes mold cleaning wastewater, leaching wastewater, soaking wastewater and equipmentcleaning wastewater, and the production wastewater contains gum, insoluble coagulant and impurities in other raw and auxiliarymaterials, which are pretreated and removed before entering the comprehensive wastewater treatment station in the plant. Thedomestic wastewater of employees is treated by the existing three-stage septic tank and then enters the comprehensive sewagetreatment station together with the pretreated production wastewater. The station adopts an air flotation + filtration process and
discharges treated water into the municipal sewage treatment plant. The exhaust gas from compound preparation, pre-vulcanizationtank, latex parking tank, latex dipping drying and post-vulcanization is collected and discharged after treatment by exhaust gastreatment system (water spray + dehumidification + activated carbon adsorption).General industrial solid waste is waste rubber, unqualified products, waste packaging shall be taken up by the latex supplier forregular recycling, sludge and domestic waste shall be taken up by the local sanitation department for unified cleaning and disposal.Hazardous wastes are waste resin and waste activated carbon. They shall be collected centrally and entrusted to units withcorresponding hazardous waste treatment qualifications for disposal.
9. Zhejiang Longterm Medical Technology Co., Ltd.
Cleaning wastewater, concentrated water for pure water preparation and domestic sewage are discharged. Domestic sewage ispretreated by the septic tank in the factory, and then piped to Deqing Hengfeng Sewage Treatment Co., Ltd for centralized treatmentwith the concentrated water for pure water preparation and domestic sewage. Process exhaust gas is treated by one set of photo-oxidation catalytic treatment equipment and then discharged through a 15m exhaust funnel. Process dust is treated by 1 set of clothbag dust collectors and then discharged through a 15m exhaust funnel.The solid wastes are mainly the waste from the daily life of employees and solid wastes from the canteen are disposed of bysanitation department, the trimmings and defective products generated in the production process, waste packaging bags generatedfrom raw and auxiliary materials are sold to material recycling companies; hazardous wastes are waste activated carbon generated inthe process of waste gas treatment and ethylene oxide waste liquid generated in the process of sterilization, which is entrusted tocorresponding qualified companies for treatment.Summary: In the first half of 2022, the above-mentioned enterprises complied with relevant environmental protection laws andregulations, discharged according to the emission outfalls included in the emission permits, conducted monitoring and ledger recordsas required by the emission permits, and submitted emission permit execution reports as required by the emission permits.
II. Social responsibilityIn 2021, Winner Medical has completed the gorgeous transformation from an industry leader to a capital newcomer. While winningthe favor of the capital market, the Company has gained wide recognition from the public for its responsible image, and has continuedto forge ahead with its vision of being "the most trusted medical and lifestyle products company". In the face of the new journey of thenext 30 years, Winner Medical will continue to work with the nation and the times, adhere to the guiding principle of "build a strongnation with industry and technology", contribute to the prosperity and wealth of society with corporate development, and empower thesustainable development of society with corporate responsibility.
1. Caring for health
Looking back on the past thirty years of progress and growth, the Company has always adhered to the principle of "quality first, productsafety first, social responsibility first". As a benchmark enterprise in the domestic medical consumables industry, the Company servesmarket demands and clinical & terminal needs. Driven by R & D innovation, Winner Medical constantly improves its production lines,takes the initiative to perform the duty of "medical consumption expert", and cares for the health of the country.
2. Focus on excellent products
Beginning with the pure dream of "bring people to return a natural, healthy and comfortable life" and the pure belief of "theincomparable reverence and infinite love of cotton", Purcotton built its brand with its exclusive cotton spun laced non-woven fabricfrom the start. With "medicine cares life, cotton cares health" as the brand proposition, Purcotton aims to bring more consumers betternatural health products, so as to improve the accessibility of quality products.Continuous research and development exploration yield fruitful results. An innovative waterless process and gauze atomized washingprocess was used to achieve zero emissions of water-washed products. Compared with the 1:10 process bath ratio of traditional gauzewashing products, the bath ratio of atomized washing process can reach 1:0.6, significantly optimizing the existing washing process,saving water resources and reducing the discharge of sewage. Consumers are offered more cost-effective, safer products.
3. Green development
To meet the development trend of the times and respond to the national "carbon peaking and carbon neutrality" action, the Companyactively participates in the training and study of low carbon management and emission reduction strategies, and strives to do its bid toachieve carbon neutrality. The Company actively adjusts the energy structure and industrial structure, vigorously promotes green office,creates green factories, and practices the "carbon peaking and carbon neutrality" action in multiple ways, striving to achieve the twogoals 3 and 10 years ahead of the national target, respectively.
4. Public welfare
In the first half of 2022, the Company also shouldered its corporate responsibility. To support the epidemic prevention work inuniversities, the Company has donated epidemic prevention materials nearly worth RMB8 million to Shanghai Jiaotong University,Fudan University, Shanghai International Studies University, Xi'an Jiaotong University and other universities across the country tolend a hand; in February, Purcotton donated materials worth more than 1.1 million yuan to the China Women's DevelopmentFoundation, including 8,000 pieces of maternity kits, sanitary pads, cotton diapers. In May, the Company donated 100 cases of medical
surgical masks and cooling vests, cool wipes and other materials to 55 hospitals in 25 cities across the country, and sent more than2,300 nurses across the country a Nurse's Daycare gift box.
Section VI Important MattersI. Commitments fulfilled within and not fulfilled by the end of the reporting period by theCompany’s actual controller, shareholders, related parties, acquirers and other commitmentparties
□ Applicable ? Not applicable
No commitments fulfilled within and within and not fulfilled by the end of the reporting period by the Company’s actual controller,shareholders, related parties, acquirers and other commitment parties.II. Non-operating occupation of funds of listed companies by controlling shareholders andtheir related parties
□ Applicable ? Not applicable
No non-operating occupation of funds of listed companies by controlling shareholders and their related parties during the reportingperiod.III. Illegal external guarantee
□ Applicable ? Not applicable
No illegal external guarantee of the Company during the reporting period.IV. Appointment of and dismissal of accounting firmsWhether the semi-annual financial report has been audited
□Yes ?No
The semi-annual report of the Company has not been audited.
V. Statement of the board of directors and the board of supervisors on the "non-standardaudit report" of the accounting firm during the reporting period
□ Applicable ? Not applicable
VI. Statement of the board of directors on the "non-standard audit report" of the previousyear
□ Applicable ? Not applicable
VII. Bankruptcy reorganization
□ Applicable ? Not applicable
No bankruptcy reorganization of the Company during the reporting period.VIII. Litigation mattersMajor 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 |
WinnerMedical v.People'sGovernmentof ZijinCounty,arbitrationcase of
| Winner Medical v. People's Government of Zijin County, arbitration case of | 55,565.53 | No | The People's Government of Zijin County has not yet paid attorney's fees, litigation of RMB2,653,30 | [Case No.: (2019) G.G.Z Zi No. 095] The ruling confirmed that the original Investment Agreement | As of the disclosure date of the report, the Company has received the land transfer deposit of |
| contract dispute [Case No.: (2019) G.G.Z Zi No. 095] | 0 and the remaining RMB231 million to the Company in accordance with the award, and the Company has applied to the court for enforcement and has been accepted by the court. | was terminated, and the People's Government of Zijin County had to bear the lawyer's fees, legal costs and other expenses totaling RMB 2.6553 million, return RMB 3 million of land transfer deposit to the Company, and compensate for economic losses of RMB 550 million. 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. | 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. |
TianmenWinner,ShenzhenPurcotton,HuanggangWinner v.ChinaNationalIntellectualPropertyAdministration,administrativedispute case ofpatentinvalidation
| Tianmen Winner, Shenzhen Purcotton, Huanggang Winner 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 | 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 | N/A |
| 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, Tianmen Winner, Shenzhen Purcotton and Huanggang Winner filed a lawsuit with the Beijing Intellectual Property Court under the Patent Law regarding the invalidation decision of the patent right, requesting the revocation of the invalidation decision of the patent right. On August 28, 2020, Beijing Intellectual Property Court issued the Notice of Acceptance of Administrative Case. On December 27, 2021, the court of the first instance rejected the plaintiff's request. On January 14, 2022, the plaintiff filed a request for a second instance. On April 21, 2022, the second trial has been held. As of the date of disclosure of this report, the court has not yet | still use the technology and will not have a significant adverse impact on the normal production and operation of the Company. |
announced theresult of thesecond trial.
Other litigation 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 |
Summary ofsmall lawsuitsin which theCompany orits subsidiariesare plaintiffsthat do notmeet thecriteria fordisclosure ofmateriallitigation
| Summary of small lawsuits in which the Company or its subsidiaries are plaintiffs that do not meet the criteria for disclosure of material litigation | 6,651.5 | No | In progress according to the litigation/arbitration process, some cases have not yet been concluded, and the concluded cases are executed according to the process | No significant impact on the Company's production and operation | Executed according to litigation/arbitration process |
Summary ofsmall lawsuitsin which theCompany orits subsidiariesare defendantsthat do notmeet thedisclosurestandards formateriallitigation
| Summary of small lawsuits in which the Company or its subsidiaries are defendants that do not meet the disclosure standards for material litigation | 3,394.2 | No | In progress according to the litigation/arbitration process, some cases have not yet been concluded, and the concluded cases are executed according to the process | No significant impact on the Company's production and operation | Executed according to litigation/arbitration process |
IX. Punishment and rectification
□ Applicable ? Not applicable
X. Credit conditions of the Company, its controlling shareholders and actual controllers
□ Applicable ? Not applicable
XI. Major related transactions
1. Related transactions related to daily operation
□ Applicable ? Not applicable
No related transactions related to 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 related finance companies
□ Applicable ? Not applicable
There is no deposit, loan, credit or other financial business between the Company and the finance company with which it is affiliated,the finance company controlled by the Company and the related parties.
6. Transactions between finance companies controlled by the Company and related parties
□ Applicable ? Not applicable
There is no deposit, loan, credit or other financial business between the finance companies controlled by the Company and relatedparties.
7. Other major related transactions
□ Applicable ? Not applicable
No other major related transactions of the Company during the reporting period.XII. 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
No leasing of the Company during the reporting period.
2. Major guarantee
□ Applicable ? Not applicable
The Company has no significant guarantees during the reporting period.
3. Major contracts for daily operation
Unit: yuan
| Name of the Company to the contract | Name of the other party to the contract | Total contract amount | Progress of contract performance | Amount of sales revenue recognized during the reporting period | Cumulative amount of sales revenue recognized | Collection status of accounts receivable | Any significant change in the conditions that may affect the performance of major contracts | Any significant risk that may hamper the performance of contracts |
4. Other major contracts
□ Applicable ? Not applicable
No other major contracts of the Company during the reporting period.XIII. Description of other important events?Applicable □ Not applicableIn order to further enrich the product line, expand the business channels and improve the strategic layout, the Company has signedthe agreement to acquire 55% equity interest in Longterm Medical, 68.70% equity interest in Pingan Medical and 100% equityinterest in Guilin Latex with a total capital of RMB 1,929.4615 million during the reporting period, which has helped the Companyto grow into one of the most comprehensive enterprises in the domestic medical consumables product line.XIV. Major events of subsidiaries
□ Applicable ? Not applicable
Section VII Changes in Shares and ShareholdersI. Changes in shares
1. Changes 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 | Other | Subtotal | Quantity | Proportion | |
I.Restrictedshares
| I. Restricted shares | 290,438,848 | 68.10% | 56,475 | 56,475 | 290,495,323 | 68.11% |
1. State
shareholding
| 1. State shareholding |
2. State
legalpersonshareholding
| 2. State legal person shareholding |
3. Other
domesticholdings
| 3. Other domestic holdings | 56,475 | 56,475 | 56,475 | 0.01% |
Wherein:
domesticlegalpersonshareholding
| Wherein: domestic legal person shareholding |
Domestic naturalpersonshareholding
| Domestic natural person shareholding | 56,475 | 56,475 | 56,475 | 0.01% |
4.Foreignshareholding
| 4. Foreign shareholding | 290,438,848 | 68.10% | 290,438,848 | 68.10% |
Wherein: foreignlegalpersonshareholding
| Wherein: foreign legal person shareholding | 290,438,848 | 68.10% | 290,438,848 | 68.10% |
Foreign naturalpersonshareholding
| Foreign natural person shareholding |
II.Unrestricted shares
| II. Unrestricted shares | 136,053,460 | 31.90% | （56,475） | （56,475） | 135,996,985 | 31.89% |
1. RMB
commonshare
| 1. RMB common share | 136,053,460 | 31.90% | （56,475） | （56,475） | 135,996,985 | 31.89% |
2.
| 2. |
Foreignshareslisted inChina3/Foreignshareslistedabroad
| 3/ Foreign shares listed abroad |
4. Other
| 4. Other |
III. Totalamount ofshares
| III. Total amount of shares | 426,492,308 | 100.00% | 426,492,308 | 100.00% |
Causes for change in shares
□ Applicable ? Not applicable
Approval of changes in shares
□ Applicable ? Not applicable
Transfer of share changes
□ Applicable ? Not applicable
Implementation progress of share repurchase?Applicable □ Not applicableOn September 17, 2021, the Company held the third meeting of the third session of the board of directors and the third meeting of thethird session of the supervisory board to consider and adopt the Proposal on the Share Repurchase Program, in which the Companyintends to use its funds of RMB300~500 million to repurchase shares of the Company for equity incentive or employee stock ownershipplan at a repurchase price not exceeding RMB116 per share. As of April 7, 2022, the Company repurchased 6,754,659 shares of theCompany by way of centralized competitive bidding trading through the special securities account for repurchase, accounting for
1.5838% of the total share capital of the Company, with the highest transaction price of RMB82.42 per share and the lowest transactionprice of RMB60.09 per share, for a total transaction amount of RMB499,991,560.55 (excluding transaction fees). The share repurchaseprogram has been implemented.Implementation progress of reducing repurchased shares by centralized competitive bidding
□ 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 shares released from restricted sale in current period | Number of restricted shares increased 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 GroupLimited
| Winner Group Limited | 290,438,848 | 0 | 0 | 290,438,848 | Restricted shares before IPO | September 17, 2023 |
Fang Xiuyuan
| Fang Xiuyuan | 0 | 0 | 30,000 | 30,000 | Senior management lock-up shares | 100% unlocked after six months from the date of expiration of |
term of officeWang Ying
| Wang Ying | 0 | 0 | 22,500 | 22,500 | Senior management lock-up shares | 100% unlocked after six months from the date of expiration of term of office |
Chen Huixuan
| Chen Huixuan | 0 | 0 | 3,975 | 3,975 | Senior management lock-up shares | 100% unlocked after six months from the date of expiration of term of office |
Total
| Total | 290,438,848 | 0 | 56,475 | 290,495,323 | -- | -- |
II. Securities issuance and listing
□ Applicable ? Not applicable
III. Number and shareholding of the Company's shareholders
Unit: share
| Total number of common shareholders at the end of the reporting period | 30,264 | Total number of preferred shareholders with voting rights restored at the end of the reporting period (if any) (see Note 8) | 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's name
| 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 | Pledged, tagged or frozen | |
| Status of shares | Quantity | |||||||
WinnerGroupLimited
| 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 | 6.61% | 28,183,253 | （964,847） | 0 | 28,183,253 |
XiamenLeyuanInvestmentPartnership(LimitedPartnership)
| Xiamen Leyuan Investment Partnership (Limited Partnership) | Domestic non-state legal person | 3.97% | 16,951,998 | （709,502） | 0 | 16,951,998 |
XiamenYutongInvestmentPartnership(LimitedPartnership)
| Xiamen Yutong Investment Partnership (Limited Partnership) | Domestic non-state legal person | 1.89% | 8,071,363 | （1,294,072） | 0 | 8,071,363 |
ShenzhenCapitalGroupCo.,Ltd.
| Shenzhen Capital Group Co.,Ltd. | State legal person | 1.55% | 6,601,608 | （1,890,700） | 0 | 6,601,608 |
XiamenHuikangInvestment
| Xiamen Huikang Investment | Domestic non-state legal person | 1.14% | 4,883,062 | （772,901） | 0 | 4,883,062 |
Partnership(LimitedPartnership)
XiamenZepengInvestmentPartnership(LimitedPartnership)
| Xiamen Zepeng Investment Partnership (Limited Partnership) | Domestic non-state legal person | 0.58% | 2,471,488 | （431,800） | 0 | 2,471,488 |
IndustrialBankCo.,Ltd -Aegon-industrialNew VisionFlexibleAllocationRegularOpen-endedMixedInitiatingSecuritiesInvestmentFund
| Industrial Bank Co.,Ltd - Aegon-industrial New Vision Flexible Allocation Regular Open-ended Mixed Initiating Securities Investment Fund | Other | 0.30% | 1,275,682 | 1,275,682 | 0 | 1,275,682 |
ChinaEverbrightBank Co.,Ltd -XingquanBusinessModelPreferredHybridSecuritiesInvestmentFund (LOF)
| China Everbright Bank Co., Ltd - Xingquan Business Model Preferred Hybrid Securities Investment Fund (LOF) | Other | 0.29% | 1,223,740 | 1,223,740 | 0 | 1,223,740 |
Hong KongSecuritiesClearingCompanyLimited
| Hong Kong Securities Clearing Company Limited | Overseas legal person | 0.26% | 1,097,333 | 92,022 | 0 | 1,097,333 |
Situation of strategicinvestors or general legalpersons becoming the top10 shareholders due to theallotment of new shares (ifany) (see note 3)
| Situation of strategic investors or general legal persons becoming the top 10 shareholders due to the allotment of new shares (if any) (see note 3) | None |
Description of the above-mentioned shareholderassociation or concertedaction
| Description of the above-mentioned shareholder association or concerted action | None |
Description of the aboveshareholders involved inentrusting / entrustedvoting right and waiver ofvoting right
| 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 (seeNote 11)
| Special Note on the existence of repurchase special accounts among the top 10 shareholders (see Note 11) | As of June 30, 2022, the Company repurchased 6,754,659 shares of the Company held in the "special securities account for the repurchase 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 | Share type |
| reporting period | Share type | Quantity |
Beijing Sequoia XinyuanEquity Investment Center(limited partnership)
| Beijing Sequoia Xinyuan Equity Investment Center (limited partnership) | 28,183,253 | RMB common share | 28,183,253 |
Xiamen LeyuanInvestment Partnership(Limited Partnership)
| Xiamen Leyuan Investment Partnership (Limited Partnership) | 16,951,998 | RMB common share | 16,951,998 |
Xiamen YutongInvestment Partnership(Limited Partnership)
| Xiamen Yutong Investment Partnership (Limited Partnership) | 8,071,363 | RMB common share | 8,071,363 |
Shenzhen Capital GroupCo.,Ltd.
| Shenzhen Capital Group Co.,Ltd. | 6,601,608 | RMB common share | 6,601,608 |
Xiamen HuikangInvestment Partnership(Limited Partnership)
| Xiamen Huikang Investment Partnership (Limited Partnership) | 4,883,062 | RMB common share | 4,883,062 |
Xiamen ZepengInvestment Partnership(Limited Partnership)
| Xiamen Zepeng Investment Partnership (Limited Partnership) | 2,471,488 | RMB common share | 2,471,488 |
Industrial Bank Co.,Ltd -Aegon-industrial NewVision Flexible AllocationRegular Open-endedMixed Initiating SecuritiesInvestment Fund
| Industrial Bank Co.,Ltd - Aegon-industrial New Vision Flexible Allocation Regular Open-ended Mixed Initiating Securities Investment Fund | 1,275,682 | RMB common share | 1,275,682 |
China Everbright BankCo., Ltd - XingquanBusiness Model PreferredHybrid SecuritiesInvestment Fund (LOF)
| China Everbright Bank Co., Ltd - Xingquan Business Model Preferred Hybrid Securities Investment Fund (LOF) | 1,223,740 | RMB common share | 1,223,740 |
Hong Kong SecuritiesClearing Company Limited
| Hong Kong Securities Clearing Company Limited | 1,097,333 | RMB common share | 1,097,333 |
Agricultural Bank of ChinaLimited－Wanjia GEMtwo-year regular openingof hybrid securitiesinvestment fund
| Agricultural Bank of China Limited－Wanjia GEM two-year regular opening of hybrid securities investment fund | 999,952 | RMB common share | 999,952 |
Description of theassociation or concertedaction between top 10public shareholders withunlimited sales conditions,and between top 10 publicshareholders withunlimited sales conditionsand top 10 shareholders
| 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 the top 10common shareholdersparticipating in thefinancing and securitiesfinancing business (if any)(see Note 4)
| Description of the top 10 common shareholders participating in the financing and securities financing business (if any) (see Note 4) | None |
Whether the Company has arrangements for differences in voting rights
□Yes ?No
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 a
repurchase transaction during the reporting periodIV. The cumulative number of shares pledged by the controlling shareholder or the largestshareholder of the Company and its concert parties reaches 80% of the number of shares heldby them in the Company
□ Applicable ? Not applicable
V. Equity changes of directors, supervisors and senior management?Applicable ?Not applicable
| Name | Position | Status of service | 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) | Number of shares held at the end of the period (shares) | Number of restricted shares granted at the beginning of the period (shares) | Number of restricted shares granted in current period (shares) | Number of restricted shares granted at the end of the period (shares) |
FangXiuyuan
| Fang Xiuyuan | Director, deputy general manager, chief financial officer | Incumbent | 0 | 40,000 | 0 | 40,000 | 50,000 | 0 | 25,000 |
Wang Ying
| Wang Ying | Supervisor | Incumbent | 0 | 30,000 | 0 | 30,000 | 0 | 0 | 0 |
ChenHuixuan
| Chen Huixuan | Deputy general manager, secretary to the board of directors | Incumbent | 0 | 5,300 | 0 | 5,300 | 30,000 | 0 | 15,000 |
Total
| Total | -- | -- | 0 | 75,300 | 0 | 75,300 | 80,000 | 0 | 40,000 |
VI. Change in controlling shareholders or actual controllers
Change of controlling shareholders during the reporting period
□ Applicable ? Not applicable
No change in controlling shareholders during the reporting period.Changes in actual controller during the reporting period
□ Applicable ? Not applicable
No change in actual controller during the reporting period.
Section VIII Preferred Shares
□ Applicable ? Not applicable
No preferred shares of the Company during the reporting period.
Section IX Information Related to Bonds
□ Applicable ? Not applicable
Section X Financial ReportI. Audit ReportWhether the semi-annual report is audited
□Yes ?No
The Company's semi-annual financial report has not been audited.II. Financial reportsUnit of statements in financial notes: RMB
1. Consolidated Balance Sheet
Prepared by: Winner Medical Co., Ltd.
June 30, 2022
Unit: yuan
| Item | June 30, 2022 | January 01, 2022 |
Current assets:
| Current assets: |
Monetary capital
| Monetary capital | 4,213,668,508.76 | 4,273,938,326.82 |
Deposit reservation for balance
| Deposit reservation for balance |
Lending funds
| Lending funds |
Trading financial assets
| Trading financial assets | 2,726,914,556.35 | 3,130,529,709.10 |
Derivative financial assets
| Derivative financial assets |
Notes receivable
| Notes receivable |
Accounts receivable
| Accounts receivable | 1,002,762,209.29 | 775,546,589.42 |
Amounts receivable financing
| Amounts receivable financing | 29,770,412.07 | 9,940,272.21 |
Advances to suppliers
| Advances to suppliers | 420,787,215.37 | 110,462,594.38 |
Premiums receivables
| Premiums receivables |
Reinsurance accounts receivable
| Reinsurance accounts receivable |
Provision of cession receivable
| Provision of cession receivable |
Other receivables
| Other receivables | 321,798,808.08 | 329,179,077.01 |
Including: Interest receivable
| Including: Interest receivable |
Dividends receivable
| Dividends receivable |
Redemptory monetary capital for sale
| Redemptory monetary capital for sale |
Inventory
| Inventory | 1,809,055,012.98 | 1,597,377,043.99 |
Contract assets
| Contract assets |
Assets held for sales
| Assets held for sales |
Non-current assets due within a year
| Non-current assets due within a year |
Other current assets
| Other current assets | 116,083,037.74 | 118,759,825.56 |
Total current assets
| Total current assets | 10,640,839,760.64 | 10,345,733,438.49 |
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 investments
| Long-term equity investments | 19,358,011.13 | 16,949,801.24 |
Other equity instrument investments
| Other equity instrument investments |
Other non-current financial assets
| Other non-current financial assets |
Investment real estates
| Investment real estates |
Fixed assets
| Fixed assets | 1,924,347,463.68 | 1,477,320,848.63 |
Construction in progress
| Construction in progress | 531,760,298.29 | 216,096,622.30 |
Productive biological assets
| Productive biological assets |
| Oil and gas assets |
Right-of-use assets
| Right-of-use assets | 473,619,587.07 | 531,735,443.44 |
Intangible assets
| Intangible assets | 799,026,401.97 | 265,700,890.65 |
Development expenditure
| Development expenditure |
Goodwill
| Goodwill | 588,885,371.18 |
Long-term unamortized expenses
| Long-term unamortized expenses | 155,843,883.68 | 174,785,770.83 |
Deferred income tax assets
| Deferred income tax assets | 136,501,355.84 | 122,716,382.99 |
Other non-current assets
| Other non-current assets | 252,312,831.03 | 115,571,001.80 |
Total non-current assets
| Total non-current assets | 4,881,655,203.87 | 2,920,876,761.88 |
Total assets
| Total assets | 15,522,494,964.51 | 13,266,610,200.37 |
Current liabilities
| Current liabilities |
Short-term debt
| Short-term debt | 1,141,476,733.93 |
Borrowings from central bank
| Borrowings from central bank |
Borrowing funds
| Borrowing funds |
Trading financial liabilities
| Trading financial liabilities |
Derivative financial liabilities
| Derivative financial liabilities |
Notes payable
| Notes payable | 146,065,963.57 | 36,200,130.04 |
Accounts payable
| Accounts payable | 996,960,746.96 | 734,521,490.60 |
Advance from customers
| Advance from customers |
Contract liabilities
| Contract liabilities | 320,794,802.74 | 341,175,665.42 |
Financial assets sold for repurchase
| Financial assets sold for repurchase |
Deposits from customers and interbank
| Deposits from customers and interbank |
Acting trading securities
| Acting trading securities |
Acting underwriting securities
| Acting underwriting securities |
Payroll payable
| Payroll payable | 216,277,874.11 | 184,681,184.52 |
Taxes payable
| Taxes payable | 183,490,178.24 | 93,859,069.68 |
Other payables
| Other payables | 451,898,553.42 | 443,946,028.46 |
Including: Interest payable
| Including: Interest payable |
Dividends 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 within oneyear
| Non-current liabilities due within one year | 220,802,679.89 | 216,181,531.82 |
Other current liabilities
| Other current liabilities | 27,051,175.46 | 24,165,400.50 |
Total current liabilities
| Total current liabilities | 3,704,818,708.32 | 2,074,730,501.04 |
Non-current liabilities
| Non-current liabilities |
Reserve fund for insurance contracts
| Reserve fund for insurance contracts |
Long-term loans
| Long-term loans | 28,000,000.00 |
Bonds payable
| Bonds payable |
Including: preferred stock
| Including: preferred stock |
Perpetual bond
| Perpetual bond |
Lease liabilities
| Lease liabilities | 316,525,936.97 | 381,808,925.09 |
Long-term payable
| Long-term payable |
Long-term payroll payable
| Long-term payroll payable | 9,303,066.32 |
Estimated liabilities
| Estimated liabilities |
Deferred income
| Deferred income | 99,203,761.08 | 109,625,401.82 |
Deferred income tax liabilities
| Deferred income tax liabilities | 80,180,343.95 | 13,337,159.68 |
Other non-current liabilities
| Other non-current liabilities |
Total non-current liabilities
| Total non-current liabilities | 533,213,108.32 | 504,771,486.59 |
Total liabilities
| Total liabilities | 4,238,031,816.64 | 2,579,501,987.63 |
| 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 |
Capital reserve
| Capital reserve | 4,592,017,346.75 | 4,549,621,096.81 |
Less: treasury stock
| Less: treasury stock | 500,082,734.11 | 257,992,366.68 |
Other comprehensive income
| Other comprehensive income | （682,771.81） | （1,556,935.43） |
Special reserve
| Special reserve |
Surplus reserve
| Surplus reserve | 420,212,778.13 | 420,212,778.13 |
General risk provision
| General risk provision |
Undistributed profit
| Undistributed profit | 6,053,194,905.01 | 5,538,135,285.97 |
Total owners' equities attributable to theowners of parent company
| Total owners' equities attributable to the owners of parent company | 10,991,151,831.97 | 10,674,912,166.80 |
Minority equity
| Minority equity | 293,311,315.90 | 12,196,045.94 |
Total owners' equities
| Total owners' equities | 11,284,463,147.87 | 10,687,108,212.74 |
Total liabilities and owners' equities
| Total liabilities and owners' equities | 15,522,494,964.51 | 13,266,610,200.37 |
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting body: Wu Kezhen
2. Balance sheet of parent company
Unit: yuan
| Item | June 30, 2022 | January 01, 2022 |
Current assets:
| Current assets: |
Monetary capital
| Monetary capital | 3,447,509,579.63 | 3,580,157,428.37 |
Trading financial assets
| Trading financial assets | 1,799,864,253.19 | 2,234,720,701.50 |
Derivative financial assets
| Derivative financial assets |
Notes receivable
| Notes receivable |
Accounts receivable
| Accounts receivable | 626,298,295.74 | 502,217,638.86 |
Amounts receivable financing
| Amounts receivable financing | 27,989,738.20 | 13,669,076.67 |
Advances to suppliers
| Advances to suppliers | 2,324,572,918.19 | 1,991,853,374.17 |
Other receivables
| Other receivables | 206,866,953.22 | 218,099,656.42 |
Including: Interest receivable
| Including: Interest receivable |
Dividends receivable
| Dividends receivable |
Inventory
| Inventory | 407,237,823.98 | 297,766,006.91 |
Contract assets
| Contract assets |
Assets held for sales
| Assets held for sales |
Non-current assets due within a year
| Non-current assets due within a year |
Other current assets
| Other current assets | 75,338,414.99 | 54,582,482.01 |
Total current assets
| Total current assets | 8,915,677,977.14 | 8,893,066,364.91 |
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 investments
| Long-term equity investments | 2,101,448,695.28 | 921,600,485.39 |
Other equity instrument investments
| Other equity instrument investments |
Other non-current financial assets
| Other non-current financial assets |
Investment real estates
| Investment real estates |
Fixed assets
| Fixed assets | 85,358,401.56 | 65,889,542.40 |
Construction in progress
| Construction in progress | 14,459,427.50 | 2,671,206.77 |
Productive biological assets
| Productive biological assets |
Oil and gas assets
| Oil and gas assets |
| Right-of-use assets | 53,594,562.69 | 61,525,338.09 |
Intangible assets
| Intangible assets | 57,549,802.25 | 10,941,470.75 |
Development expenditure
| Development expenditure |
Goodwill
| Goodwill |
Long-term unamortized expenses
| Long-term unamortized expenses | 27,285,520.61 | 27,181,217.32 |
Deferred income tax assets
| Deferred income tax assets | 14,978,589.71 | 15,829,010.17 |
Other non-current assets
| Other non-current assets | 149,626,110.67 | 50,585,930.78 |
Total non-current assets
| Total non-current assets | 2,504,301,110.27 | 1,156,224,201.67 |
Total assets
| Total assets | 11,419,979,087.41 | 10,049,290,566.58 |
Current liabilities
| Current liabilities |
Short-term debt
| Short-term debt | 980,079,166.67 |
Trading financial liabilities
| Trading financial liabilities |
Derivative financial liabilities
| Derivative financial liabilities |
Notes payable
| Notes payable |
Accounts payable
| Accounts payable | 413,158,990.99 | 744,765,121.01 |
Advance from customers
| Advance from customers |
Contract liabilities
| Contract liabilities | 197,717,618.41 | 274,656,460.55 |
Payroll payable
| Payroll payable | 70,681,638.46 | 57,013,025.70 |
Taxes payable
| Taxes payable | 86,754,131.04 | 68,694,400.06 |
Other payables
| Other payables | 251,827,157.91 | 257,073,388.79 |
Including: Interest payable
| Including: Interest payable |
Dividends payable
| Dividends payable |
Liabilities held for sales
| Liabilities held for sales |
Non-current liabilities due within oneyear
| Non-current liabilities due within one year | 17,287,832.04 | 14,395,962.64 |
Other current liabilities
| Other current liabilities | 8,201,671.52 | 13,678,129.69 |
Total current liabilities
| Total current liabilities | 2,025,708,207.04 | 1,430,276,488.44 |
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 | 39,027,342.35 | 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 | 18,751,271.02 | 20,071,043.26 |
Deferred income tax liabilities
| Deferred income tax liabilities | 4,082,662.98 | 3,648,582.23 |
Other non-current liabilities
| Other non-current liabilities |
Total non-current liabilities
| Total non-current liabilities | 61,861,276.35 | 72,696,950.75 |
Total liabilities
| Total liabilities | 2,087,569,483.39 | 1,502,973,439.19 |
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 |
Capital reserve
| Capital reserve | 4,617,424,109.10 | 4,575,027,859.16 |
Less: treasury stock
| Less: treasury stock | 500,082,734.11 | 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 | 4,377,178,809.82 | 3,391,392,215.70 |
Total owners' equities
| Total owners' equities | 9,332,409,604.02 | 8,546,317,127.39 |
Total liabilities and owners' equities
| Total liabilities and owners' equities | 11,419,979,087.41 | 10,049,290,566.58 |
3. Consolidated Statement of Income
Unit: yuan
| Item | Semiannual 2022 | Semiannual 2021 |
I. Total operating income
| I. Total operating income | 5,157,944,495.72 | 4,059,865,654.92 |
Including: Operating income
| Including: Operating income | 5,157,944,495.72 | 4,059,865,654.92 |
Interest revenue
| Interest revenue |
Premium earned
| Premium earned |
Fee and commission income
| Fee and commission income |
II. Operating cost
| II. Operating cost | 4,122,305,279.41 | 3,268,705,562.33 |
Including: Operating costs
| Including: Operating costs | 2,640,556,563.64 | 1,921,789,702.47 |
Interest expenditure
| Interest expenditure |
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
| Net reserve fund extracted for insurance liability |
Bond insurance expense
| Bond insurance expense |
Reinsurance costs
| Reinsurance costs |
Taxes and surcharges
| Taxes and surcharges | 41,159,361.43 | 33,156,678.98 |
Sales expenses
| Sales expenses | 950,172,124.74 | 825,805,820.57 |
Administrative expenses
| Administrative expenses | 325,391,883.32 | 310,652,551.64 |
R&D expenses
| R&D expenses | 238,644,498.62 | 189,917,265.47 |
Financial expenses
| Financial expenses | （73,619,152.34） | （12,616,456.80） |
Including: interestexpenditure
| Including: interest expenditure | 5,765,880.43 | 379,713.89Note |
Interest revenue
| Interest revenue | 62,087,089.05 | 35,424,028.29 |
Plus: other incomes
| Plus: other incomes | 28,747,393.29 | 86,754,859.99 |
Income from investment (lossexpressed with “-”)
| Income from investment (loss expressed with “-”) | 31,452,189.90 | 50,073,259.81 |
Including: Income frominvestment of joint venture andcooperative enterprise
| Including: Income from investment of joint venture and cooperative enterprise | 2,408,209.89 | 1,655,597.53 |
Income fromderecognition of financial assets measuredat amortized cost
| Income from derecognition of financial assets measured at amortized cost |
Exchange gain (loss expressedwith “-”)
| Exchange gain (loss expressed with “-”) |
Net exposure hedging gain (lossexpressed with “-”)
| Net exposure hedging gain (loss expressed with “-”) |
Income from fair value changes(loss expressed with “-”)
| Income from fair value changes (loss expressed with “-”) | 35,182,098.83 | 31,408,220.30 |
Credit impairment losses (lossexpressed with “-”)
| Credit impairment losses (loss expressed with “-”) | （7,749,168.11） | 11,808,406.71 |
Assets impairment losses (lossexpressed with “-”)
| Assets impairment losses (loss expressed with “-”) | （73,045,565.34） | （60,597,532.59） |
Income from disposal of assets(loss expressed with “-”)
| Income from disposal of assets (loss expressed with “-”) | （547,132.74） | （37,621.25） |
III. Operating profit (loss to be filled outwith the minus sign "-")
| III. Operating profit (loss to be filled out with the minus sign "-") | 1,049,679,032.14 | 910,569,685.56 |
Plus: Non-operating income
| Plus: Non-operating income | 2,152,935.65 | 2,339,463.94 |
| Less: non-operating expenditure | 8,633,722.09 | 8,502,804.42 |
IV. Total profit (total loss to be filled outwith the minus sign "-")
| IV. Total profit (total loss to be filled out with the minus sign "-") | 1,043,198,245.70 | 904,406,345.08 |
Less: Income tax expenses
| Less: Income tax expenses | 145,670,282.34 | 143,286,407.76 |
V. Net profit (net loss to be filled out withthe minus sign "-")
| V. Net profit (net loss to be filled out with the minus sign "-") | 897,527,963.36 | 761,119,937.32 |
(I) Classified by business continuity
| (I) Classified by business continuity |
1. Net profits from ongoing operation
(net loss expressed with “-”)
| 1. Net profits from ongoing operation (net loss expressed with “-”) | 897,527,963.36 | 761,119,937.32 |
2. Net profits from discontinuing
operation (net loss expressed with “-”)
| 2. Net profits from discontinuing operation (net loss expressed with “-”) |
(II) Classified by ownership
| (II) Classified by ownership |
1. Net profits attributable to the
owners of parent company
| 1. Net profits attributable to the owners of parent company | 892,823,503.14 | 761,038,730.24 |
2. Minority interest income
| 2. Minority interest income | 4,704,460.22 | 81,207.08 |
VI. Net amount of other comprehensiveincome after tax
| VI. Net amount of other comprehensive income after tax | 1,457,765.86 | （292,542.91） |
Net amount of other comprehensiveincome after tax attributed to parentcompany owners
| Net amount of other comprehensive income after tax attributed to parent company owners | 874,163.62 | （140,119.24） |
(I) Other comprehensive income that can'tbe reclassified into profit and loss
| (I) Other comprehensive income that can't be reclassified into profit and loss |
1. Remeasure the variation of net
indebtedness or net asset of definedbenefit plan
| 1. Remeasure the variation of net indebtedness or net asset of defined benefit plan |
2. Other comprehensive income
that can't be reclassified into profit andloss in the invested enterprise under equitymethod
| 2. Other comprehensive income that can't be reclassified into profit and loss in the invested enterprise under equity method |
3. Fair value change of other
equity instrument investments
| 3. Fair value change of other equity instrument investments |
4. Fair value change of enterprise
credit risks
| 4. Fair value change of enterprise credit risks |
5. Other
| 5. Other |
(II) Other comprehensive income that willbe reclassified into profit and loss
| (II) Other comprehensive income that will be reclassified into profit and loss | 874,163.62 | （140,119.24） |
1. Other comprehensive income
that will be reclassified into profit and lossin the invested enterprise under equitymethod
| 1. Other comprehensive income that will be reclassified into profit and loss in the invested enterprise under equity method |
2. Fair value change of other debt
investments
| 2. Fair value change of other debt investments |
3. Amount of financial assets
reclassified into other comprehensiveincome
| 3. Amount of financial assets reclassified into other comprehensive income |
4. Provision for credit impairment
of other debt investments
| 4. Provision for credit impairment of other debt investments |
5. Cash flow hedging reserve
| 5. Cash flow hedging reserve |
6. Translation reserve
| 6. Translation reserve | 874,163.62 | （140,119.24） |
7. Other
| 7. Other |
Net amount of other comprehensiveincome after tax attributed to minorityshareholders
| Net amount of other comprehensive income after tax attributed to minority shareholders | 583,602.24 | （152,423.67） |
VII. Total comprehensive income
| VII. Total comprehensive income | 898,985,729.22 | 760,827,394.41 |
Total comprehensive income attributedto parent company owners
| Total comprehensive income attributed to parent company owners | 893,697,666.76 | 760,898,611.00 |
Total comprehensive income attributedto minority shareholders
| Total comprehensive income attributed to minority shareholders | 5,288,062.46 | （71,216.59） |
| VIII. Earnings per share: |
(I) Basic earnings per share
| (I) Basic earnings per share | 2.1193 | 1.7844 |
(II) Diluted earnings per share
| (II) Diluted earnings per share | 2.1193 | 1.7715 |
Note: Interest expense in the first half of 2021 included interest expense on lease liabilities of RMB13,560,020.61.In case of business combination involving enterprises under common control in current period, the net profits achieved by themerged party before combination were RMB 0.00 and achieved by the merged party in previous period were RMB 0.00.Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting body: Wu Kezhen
4. Income statement of parent company
Unit: yuan
| Item | Semiannual 2022 | Semiannual 2021 |
I. Operating income
| I. Operating income | 3,098,525,248.00 | 2,152,770,959.97 |
Subtract: Operating costs
| Subtract: Operating costs | 1,934,623,204.93 | 1,237,349,900.78 |
Taxes and surcharges
| Taxes and surcharges | 16,034,785.38 | 8,841,847.49 |
Sales expenses
| Sales expenses | 180,002,852.70 | 120,613,735.57 |
Administrative expenses
| Administrative expenses | 207,912,208.98 | 206,394,645.48 |
R&D expenses
| R&D expenses | 93,688,666.00 | 82,054,298.04 |
Financial expenses
| Financial expenses | （68,427,155.06） | （22,564,403.10） |
Including: interest expenditure
| Including: interest expenditure | 4,091,660.56 | 288,805.56注 |
Interest revenue
| Interest revenue | 57,354,975.22 | 31,213,130.97 |
Plus: other incomes
| Plus: other incomes | 8,538,808.91 | 43,098,834.69 |
Income from investment (lossexpressed with “-”)
| Income from investment (loss expressed with “-”) | 717,992,220.00 | 45,603,797.04 |
Including: Income frominvestment of joint venture andcooperative enterprise
| Including: Income from investment of joint venture and cooperative enterprise | 2,348,078.76 | 1,655,597.53 |
Income fromderecognition of financial assets measuredat amortized cost
| Income from derecognition of financial assets measured at amortized cost |
Net exposure hedging gain (lossexpressed with “-”)
| Net exposure hedging gain (loss expressed with “-”) |
Income from fair value changes(loss expressed with “-”)
| Income from fair value changes (loss expressed with “-”) | 31,577,241.02 | 28,642,089.79 |
Credit impairment losses (lossexpressed with “-”)
| Credit impairment losses (loss expressed with “-”) | （6,534,785.58） | 17,063,895.54 |
Assets impairment losses (lossexpressed with “-”)
| Assets impairment losses (loss expressed with “-”) | （4,973,851.97） | （13,698,792.65） |
Income from disposal of assets(loss expressed with “-”)
| Income from disposal of assets (loss expressed with “-”) |
II. Operating profit (loss to be filled outwith the minus sign "-")
| II. Operating profit (loss to be filled out with the minus sign "-") | 1,481,290,317.45 | 640,790,760.12 |
Plus: Non-operating income
| Plus: Non-operating income | 43,721.08 | 810,681.71 |
Less: non-operating expenditure
| Less: non-operating expenditure | 324,053.04 | 152,332.97 |
III. Total profit (total loss to be filled outwith the minus sign "-")
| III. Total profit (total loss to be filled out with the minus sign "-") | 1,481,009,985.49 | 641,449,108.86 |
Less: Income tax expenses
| Less: Income tax expenses | 117,459,507.27 | 95,097,573.86 |
IV. Net profit (net loss to be filled outwith the minus sign "-")
| IV. Net profit (net loss to be filled out with the minus sign "-") | 1,363,550,478.22 | 546,351,535.00 |
(I) Net profits from going concern (netloss expressed with "-")
| (I) Net profits from going concern (net loss expressed with "-") | 1,363,550,478.22 | 546,351,535.00 |
(II) Net profits from discontinuingoperation (net loss expressed with "-")
| (II) Net profits from discontinuing operation (net loss expressed with "-") |
V. Net amount of other comprehensiveincome after tax
| V. Net amount of other comprehensive income after tax |
(I) Other comprehensive income that can't
| (I) Other comprehensive income that can't |
be reclassified into profit and loss
1. Remeasure the variation of net
indebtedness or net asset of definedbenefit plan
| 1. Remeasure the variation of net indebtedness or net asset of defined benefit plan |
2. Other comprehensive income
that can't be reclassified into profit andloss in the invested enterprise under equitymethod
| 2. Other comprehensive income that can't be reclassified into profit and loss in the invested enterprise under equity method |
3. Fair value change of other
equity instrument investments
| 3. Fair value change of other equity instrument investments |
4. Fair value change of enterprise
credit risks
| 4. Fair value change of enterprise credit risks |
5. Other
| 5. Other |
(II) Other comprehensive income that willbe reclassified into profit and loss
| (II) Other comprehensive income that will be reclassified into profit and loss |
1. Other comprehensive income
that will be reclassified into profit and lossin the invested enterprise under equitymethod
| 1. Other comprehensive income that will be reclassified into profit and loss in the invested enterprise under equity method |
2. Fair value change of other debt
investments
| 2. Fair value change of other debt investments |
3. Amount of financial assets
reclassified into other comprehensiveincome
| 3. Amount of financial assets reclassified into other comprehensive income |
4. Provision for credit impairment
of other debt investments
| 4. Provision for credit impairment of other debt investments |
5. Cash flow hedging reserve
| 5. Cash flow hedging reserve |
6. Translation reserve
| 6. Translation reserve |
7. Other
| 7. Other |
VI. Total comprehensive income
| VI. Total comprehensive income | 1,363,550,478.22 | 546,351,535.00 |
VII. Earnings per share:
| VII. Earnings per share: |
(I) Basic earnings per share
| (I) Basic earnings per share |
(II) Diluted earnings per share
| (II) Diluted earnings per share |
Note: Finance costs for the first half of 2021 included interest expense on lease liabilities of RMB1,110,492.88.
5. Consolidated Statement of Cash Flow
Unit: yuan
| Item | Semiannual 2022 | Semiannual 2021 |
I. Cash flow from financing activities:
| I. Cash flow from financing activities: |
Cash from selling goods or offeringlabor
| Cash from selling goods or offering labor | 5,116,730,407.67 | 4,211,780,432.64 |
Net increase of customer deposit anddeposit from other banks
| Net increase of customer deposit and deposit from other banks |
Net increase of borrowings from centralbank
| Net increase of borrowings from central bank |
Net increase of borrowing funds fromother financial institutions
| Net increase of borrowing funds from other financial institutions |
Cash from obtaining original insurancecontract premium
| Cash from obtaining original insurance contract premium |
Cash received from insurance premiumof original insurance contract
| Cash received from insurance premium of original insurance contract |
Net increase of deposit and investmentof insured
| Net increase of deposit and investment of insured |
Cash from interest, handling chargesand commissions
| Cash from interest, handling charges and commissions |
Net increase of borrowing funds
| Net increase of borrowing funds |
Net increase of repurchase of business
| Net increase of repurchase of business |
fundsNet cash from acting trading securities
| Net cash from acting trading securities |
Refund of tax and levies
| Refund of tax and levies | 54,482,126.94 | 24,562,159.29 |
Other cash received related to operatingactivities
| Other cash received related to operating activities | 56,108,219.58 | 150,416,678.31 |
Subtotal of inward cash inflow fromoperating activities
| Subtotal of inward cash inflow from operating activities | 5,227,320,754.19 | 4,386,759,270.24 |
Cash paid for selling goods or offeringlabor
| Cash paid for selling goods or offering labor | 2,939,776,049.76 | 2,731,814,025.31 |
Net increase of customer loans andadvances
| Net increase of customer loans and advances |
Net increase of amount due from centralbank and interbank
| Net increase of amount due from 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, handling chargesand commissions
| Cash paid for interest, handling charges and commissions |
Cash paid for policy dividend
| Cash paid for policy dividend |
Cash paid to and for employees
| Cash paid to and for employees | 800,031,019.92 | 596,881,901.63 |
Taxes and fees paid
| Taxes and fees paid | 319,812,985.54 | 573,374,688.67 |
Other cash paid related to operatingactivities
| Other cash paid related to operating activities | 366,549,799.59 | 287,083,788.86 |
Subtotal of outward cash inflow fromoperating activities
| Subtotal of outward cash inflow from operating activities | 4,426,169,854.81 | 4,189,154,404.47 |
Net cash flow from operating activities
| Net cash flow from operating activities | 801,150,899.38 | 197,604,865.77 |
II. Cash flow from investment activities:
| II. Cash flow from investment activities: |
Cash from investment withdrawal
| Cash from investment withdrawal | 4,024,661,820.00 | 4,090,000,000.00 |
Cash from investment income
| Cash from investment income | 96,593,854.89 | 63,620,238.79 |
Net cash from disposal of fixed assets,intangible assets and other long-termassets
| Net cash from disposal of fixed assets, intangible assets and other long-term assets | 6,741,954.00 | 153,218,248.95 |
Net cash received from the disposal ofsubsidiaries and other business entities
| 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 of inward cash inflow frominvestment activities
| Subtotal of inward cash inflow from investment activities | 4,127,997,628.89 | 4,306,838,487.74 |
Cash paid for the purchase andconstruction of fixed assets, intangibleassets and other long term assets
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long term assets | 513,652,602.31 | 327,515,662.56 |
Cash paid for investment
| Cash paid for investment | 3,577,034,300.00 | 2,845,000,000.00 |
Net cash received from reinsurancebusiness
| Net cash received from reinsurance business |
Net cash paid for obtaining subsidiariesand other business units
| Net cash paid for obtaining subsidiaries and other business units | 1,003,862,872.29 |
Other cash paid related to investmentactivities
| Other cash paid related to investment activities |
Subtotal of outward cash inflow frominvestment activities
| Subtotal of outward cash inflow from investment activities | 5,094,549,774.60 | 3,172,515,662.56 |
Net cash flow from investing activities
| Net cash flow from investing activities | （966,552,145.71） | 1,134,322,825.18 |
III. Cash flow from financing activities:
| III. Cash flow from financing activities: |
Receipts from equity securities
| Receipts from equity securities | 14,000,000.00 |
Including: Cash received fromsubsidies’ absorption of minorityshareholders’ investment
| Including: Cash received from subsidies’ absorption of minority shareholders’ investment |
| Cash received from borrowings | 1,050,000,000.00 |
Other cash received related to financingactivities
| Other cash received related to financing activities |
Subtotal of inward cash inflow fromfinancial activities
| Subtotal of inward cash inflow from financial activities | 1,064,000,000.00 |
Cash repayments of amounts borrowed
| Cash repayments of amounts borrowed | 55,000,000.00 | 150,000,000.00 |
Cash paid for distribution of dividendsor profits and for interest expenses
| Cash paid for distribution of dividends or profits and for interest expenses | 396,090,530.15 | 568,137,284.96 |
Including: Dividends and profits paidby subsidiaries to minority shareholders
| Including: Dividends and profits paid by subsidiaries to minority shareholders |
Other cash paid related to financingactivities
| Other cash paid related to financing activities | 420,175,720.56 | 103,492,521.01 |
Subtotal of outward cash inflow fromfinancial activities
| Subtotal of outward cash inflow from financial activities | 871,266,250.71 | 821,629,805.97 |
Net cash flow from financing activities
| Net cash flow from financing activities | 192,733,749.29 | （821,629,805.97） |
IV. Impact of exchange rate movementson cash and cash equivalents
| IV. Impact of exchange rate movements on cash and cash equivalents | 27,600,761.92 | 301,182.50 |
V. Net increase in cash and cashequivalents
| V. Net increase in cash and cash equivalents | 54,933,264.88 | 510,599,067.48 |
Plus: Balance of cash and cashequivalents at the beginning of the period
| Plus: Balance of cash and cash equivalents at the beginning of the period | 4,088,612,262.04 | 4,149,734,694.38 |
VI. Balance of cash and cash equivalentsat end of period
| VI. Balance of cash and cash equivalents at end of period | 4,143,545,526.92 | 4,660,333,761.86 |
6. Cash flow statement of parent company
Unit: yuan
| Item | Semiannual 2022 | Semiannual 2021 |
I. Cash flow from financing activities:
| I. Cash flow from financing activities: |
Cash from selling goods or offeringlabor
| Cash from selling goods or offering labor | 3,258,287,430.41 | 2,095,126,701.06 |
Refund of tax and levies
| Refund of tax and levies | 7,667,891.23 | 15,568,316.68 |
Other cash received related to operatingactivities
| Other cash received related to operating activities | 364,335,473.72 | 320,575,959.00 |
Subtotal of inward cash inflow fromoperating activities
| Subtotal of inward cash inflow from operating activities | 3,630,290,795.36 | 2,431,270,976.74 |
Cash paid for selling goods or offeringlabor
| Cash paid for selling goods or offering labor | 2,053,877,022.21 | 2,269,677,579.57 |
Cash paid to and for employees
| Cash paid to and for employees | 213,532,606.79 | 144,426,888.77 |
Taxes and fees paid
| Taxes and fees paid | 183,161,300.38 | 418,581,781.00 |
Other cash paid related to operatingactivities
| Other cash paid related to operating activities | 645,932,910.29 | 552,812,218.15 |
Subtotal of outward cash inflow fromoperating activities
| Subtotal of outward cash inflow from operating activities | 3,096,503,839.67 | 3,385,498,467.49 |
Net cash flow from operating activities
| Net cash flow from operating activities | 533,786,955.69 | （954,227,490.75） |
II. Cash flow from investment activities:
| II. Cash flow from investment activities: |
Cash from investment withdrawal
| Cash from investment withdrawal | 2,697,990,188.87 | 3,705,000,000.00 |
Cash from investment income
| Cash from investment income | 775,721,707.52 | 43,683,535.21 |
Net cash from disposal of fixed assets,intangible assets and other long-termassets
| Net cash from disposal of fixed assets, intangible assets and other long-term assets | 5,431,000.00 | 54,520,000.00 |
Net cash received from the disposal ofsubsidiaries and other business entities
| 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 of inward cash inflow frominvestment activities
| Subtotal of inward cash inflow from investment activities | 3,479,142,896.39 | 3,803,203,535.21 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long term assets | 73,115,880.93 | 30,867,495.67 |
Cash paid for investment
| Cash paid for investment | 3,396,124,300.00 | 1,949,823,493.17 |
Net cash paid for obtaining subsidiariesand other business units
| Net cash paid for obtaining subsidiaries and other business units |
Other cash paid related to investmentactivities
| Other cash paid related to investment activities |
Subtotal of outward cash inflow frominvestment activities
| Subtotal of outward cash inflow from investment activities | 3,469,240,180.93 | 1,980,690,988.84 |
Net cash flow from investing activities
| Net cash flow from investing activities | 9,902,715.46 | 1,822,512,546.37 |
III. Cash flow from financing activities:
| III. Cash flow from financing activities: |
Receipts from equity securities
| Receipts from equity securities |
Cash received from borrowings
| Cash received from borrowings | 100,000,000.00 |
Other cash received related to financingactivities
| Other cash received related to financing activities |
Subtotal of inward cash inflow fromfinancial activities
| Subtotal of inward cash inflow from financial activities | 100,000,000.00 |
Cash repayments of amounts borrowed
| Cash repayments of amounts borrowed | 120,000,000.00 |
Cash paid for distribution of dividendsor profits and for interest expenses
| Cash paid for distribution of dividends or profits and for interest expenses | 394,672,045.23 | 566,402,956.84 |
Other cash paid related to financingactivities
| Other cash paid related to financing activities | 300,624,090.59 |
Subtotal of outward cash inflow fromfinancial activities
| Subtotal of outward cash inflow from financial activities | 695,296,135.82 | 686,402,956.84 |
Net cash flow from financing activities
| Net cash flow from financing activities | （595,296,135.82） | （686,402,956.84） |
IV. Impact of exchange rate movementson cash and cash equivalents
| IV. Impact of exchange rate movements on cash and cash equivalents | 18,970,584.36 | 8,840,584.52 |
V. Net increase in cash and cashequivalents
| V. Net increase in cash and cash equivalents | （32,635,880.31） | 190,722,683.30 |
Plus: Balance of cash and cashequivalents at the beginning of the period
| Plus: Balance of cash and cash equivalents at the beginning of the period | 3,430,110,781.71 | 3,669,286,043.43 |
VI. Balance of cash and cash equivalentsat end of period
| VI. Balance of cash and cash equivalents at end of period | 3,397,474,901.40 | 3,860,008,726.73 |
7. Consolidated statement of change in equity
Current amount
Unit: yuan
| Item | Semiannual 2022 | ||||||||||||||
| Owners' equities attributable to the owners of parent company | Minority equity | Total owners' equities | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profit | Other | Subtotal | |||||
| Preferred stock | Perpetual bond | Other | |||||||||||||
I. Closingbalance of theprevious year
| I. Closing balance of the previous year | 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 |
Plus:
Changes inaccountingpolicies
| Plus: Changes in accounting policies |
Priorperiod errorcorrection
| Prior period error correction |
| Business combination under common control |
Other
| Other |
II. Beginningbalance incurrent year
| II. Beginning balance in current year | 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 |
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 "-) | 42,396,249.94 | 242,090,367.43 | 874,163.62 | 515,059,619.04 | 316,239,665.17 | 281,115,269.96 | 597,354,935.13 |
(I) Totalcomprehensive income
| (I) Total comprehensive income | 874,163.62 | 892,823,503.14 | 893,697,666.76 | 5,288,062.46 | 898,985,729.22 |
(II) Owner’sinvested anddecreasedcapital
| (II) Owner’s invested and decreased capital | 42,396,249.94 | 42,396,249.94 | 275,827,207.50 | 318,223,457.44 |
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 | 42,396,249.94 | 42,396,249.94 | 42,396,249.94 |
4. Other
| 4. Other | 275,827,207.50 | 275,827,207.50 |
(III) Profitdistribution
| (III) Profit distribution | （377,763,884.10） | （377,763,884.10） | （377,763,884.10） |
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) | （377,763,884.10） | （377,763,884.10) | （377,763,884.10） |
4. Other
| 4. Other |
(IV) Internaltransfer ofowner’s equity
| (IV) Internal transfer of owner’s equity |
1. Capital
| 1. Capital |
surplustransfer topaid-in capital(or capitalstock)
2. Earned
surplustransfer topaid-in capital(or capitalstock)
| 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 ofdefinedbenefit plan
| 4. Carryforward retained earnings in variation of defined benefit plan |
5. Carryforwar
d retainedearnings ofothercomprehensive income
| 5. Carryforward retained earnings of other comprehensive income |
6. Other
| 6. Other |
(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) Other
| (VI) Other | 242,090,367.43 | （242,090,367.43） | （242,090,367.43） |
IV. Balance atthe end ofcurrent period
| IV. Balance at the end of current period | 426,492,308.00 | 4,592,017,346.75 | 500,082,734.11 | （682,771.81） | 420,212,778.13 | 6,053,194,905.01 | 10,991,151,831.97 | 293,311,315.90 | 11,284,463,147.87 |
Prior year amount
Unit: yuan
| Item | Semiannual 2021 | ||||||||||||||
| Owners' equities attributable to the owners of parent company | Minority equity | Total owners' equities | |||||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | General risk provision | Undistributed profit | Other | Subtotal | |||||
| Preferred stock | Perpetual bond | Other | |||||||||||||
I. Closingbalance of theprevious year
| I. Closing balance of the 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 period error correction |
Businesscombinationundercommoncontrol
| Business combination under common control |
Other
| Other |
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 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 "-) | 131,658,639.68 | (140,119.24) | (6,647,424.15) | 124,871,096.29 | (71,216.59) | 124,799,879.70 |
(I) Totalcomprehensive income
| (I) Total comprehensive income | (140,119.24) | 761,038,730.24 | 760,898,611.00 | (71,216.59) | 760,827,394.41 |
(II) Owner’sinvested anddecreasedcapital
| (II) Owner’s invested and decreased capital | 131,658,639.68 | 131,658,639.68 | 131,658,639.68 |
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 | 131,658,639.68 | 131,658,639.68 | 131,658,639.68 |
4. Other
| 4. Other |
(III) Profitdistribution
| (III) Profit distribution | (767,686,154.39) | (767,686,154.39) | (767,686,154.39) |
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) | (767,686,154.39) | （767,686,154.39） | （767,686,154.39） |
4. Other
| 4. Other |
(IV) Internaltransfer ofowner’s equity
| (IV) Internal transfer of owner’s equity |
| 1. Capital surplus transfer to paid-in capital (or capital stock) |
2. Earned
surplustransfer topaid-in capital(or capitalstock)
| 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 ofdefinedbenefit plan
| 4. Carryforward retained earnings in variation of defined benefit plan |
5. Carryforwar
d retainedearnings ofothercomprehensive income
| 5. Carryforward retained earnings of other comprehensive income |
6. Other
| 6. Other |
(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) Other
| (VI) Other |
IV. Balance atthe end ofcurrent period
| IV. Balance at the end of current period | 426,492,308.00 | 4,613,368,622.92 | （1,251,154.32） | 420,212,778.13 | 5,059,853,948.96 | 10,518,676,503.69 | 14,384,829.42 | 10,533,061,333.11 |
8. Statement of change in equity of parent company
Current amount
Unit: yuan
| Item | Semiannual 2022 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Other | Total owners' equities | |||
| Preferred stock | Perpetual bond | Other | ||||||||||
I. Closingbalance of theprevious year
| I. Closing balance of the previous year | 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 |
Plus:
Changes inaccountingpolicies
| Plus: Changes in accounting policies |
Priorperiod errorcorrection
| Prior period error correction |
Othe
| Othe |
rII. Beginningbalance incurrent year
| II. Beginning balance in current year | 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 |
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 "-) | 42,396,249.94 | 242,090,367.43 | 985,786,594.12 | 786,092,476.63 |
(I) Totalcomprehensive income
| (I) Total comprehensive income | 1,363,550,478.22 | 1,363,550,478.22 |
(II) Owner’sinvested anddecreasedcapital
| (II) Owner’s invested and decreased capital | 42,396,249.94 | 42,396,249.94 |
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 | 42,396,249.94 | 42,396,249.94 |
4. Other
| 4. Other |
(III) Profitdistribution
| (III) Profit distribution | （377,763,884.10） | （377,763,884.10） |
1. Withdrawal
of surplusreserves
| 1. Withdrawal of surplus reserves |
2. Distribution
of owners (orshareholders)
| 2. Distribution of owners (or shareholders) | （377,763,884.10） | （377,763,884.10） |
3. Other
| 3. Other |
(IV) Internaltransfer ofowner’s equity
| (IV) Internal transfer of owner’s equity |
1. Capital
surplustransfer topaid-in capital(or capitalstock)
| 1. Capital surplus transfer to paid-in capital (or capital stock) |
2. Earned
surplustransfer topaid-in capital(or capitalstock)
| 2. Earned surplus transfer to paid-in capital (or capital stock) |
3. Earned
surpluscovering thedeficit
| 3. Earned surplus covering the deficit |
| 4. Carryforward retained earnings in variation of defined benefit plan |
5. Carryforwar
d retainedearnings ofothercomprehensive income
| 5. Carryforward retained earnings of other comprehensive income |
6. Other
| 6. Other |
(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) Other
| (VI) Other | 242,090,367.43 | ）242,090,367.43） |
IV. Balance atthe end ofcurrent period
| IV. Balance at the end of current period | 426,492,308.00 | 4,617,424,109.10 | 500,082,734.11 | 411,397,111.21 | 4,377,178,809.82 | 9,332,409,604.02 |
Last term amount
Unit: yuan
| Item | Semiannual 2021 | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Other | Total owners' equities | |||
| Preferred stock | Perpetual bond | Other | ||||||||||
I. Closingbalance of theprevious year
| I. Closing balance of the 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:
Changes inaccountingpolicies
| Plus: Changes in accounting policies |
Priorperiod errorcorrection
| Prior period error correction |
Other
| Other |
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 befilled out withthe minus sign"-)
| III. Increase/decrease in the current period (less to be filled out with the minus sign "-) | 131,658,639.68 | （221,334,619.39） | （89,675,979.71） |
(I) Totalcomprehensive income
| (I) Total comprehensive income | 546,351,535.00 | 546,351,535.00 |
(II) Owner’sinvested anddecreased
| (II) Owner’s invested and decreased | 131,658,639.68 | 131,658,639.68 |
capital
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 | 131,658,639.68 | 131,658,639.68 |
4. Other
| 4. Other |
(III) Profitdistribution
| (III) Profit distribution | （767,686,154.39） | （767,686,154.39） |
1. Withdrawal
of surplusreserves
| 1. Withdrawal of surplus reserves |
2. Distribution
of owners (orshareholders)
| 2. Distribution of owners (or shareholders) | （767,686,154.39） | （767,686,154.39） |
3. Other
| 3. Other |
(IV) Internaltransfer ofowner’s equity
| (IV) Internal transfer of owner’s equity |
1. Capital
surplustransfer topaid-in capital(or capitalstock)
| 1. Capital surplus transfer to paid-in capital (or capital stock) |
2. Earned
surplustransfer topaid-in capital(or capitalstock)
| 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 ofothercomprehensive income
| 5. Carryforward retained earnings of other comprehensive income |
6. Other
| 6. Other |
(V) Specialreserve
| (V) Special reserve |
1. Draw in this
current
| 1. Draw in this current |
| 2. Use in this current |
(VI) Other
| (VI) Other |
IV. Balance atthe end ofcurrent period
| IV. Balance at the end of current period | 426,492,308.00 | 4,638,775,385.27 | 411,397,111.21 | 3,128,185,613.00 | 8,604,850,417.48 |
III. Basic status of the Company
Winner Medical Co., Ltd. (hereinafter referred to as the "Company" or "our Company"), formerly known as WinnerIndustries (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 installments. 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. The businessscope of the original company is: the production and operation of sanitary materials, dressings and their products,medical clothing, textiles, non-woven products and moulded packaging (excluding the products subject to nationalexport 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, the Companyobtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau forIndustry 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 third installmentof the registered capital totaling HKD 6,005,722.20 paid by Winner International Trading Corporation, includingHKD 3,665,722.20 in currency and HKD 2,340,000.00 in kind. This investment was verified by Shenzhen LishangCertified 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 134.00million. On December 10, 2002, 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 May 27, 2003, it has received the fourth installment of the registered capital totaling HKD14,525,928.59 paid by (Hong Kong) Winner International Trading Corporation. This capital increase was verifiedby Shenzhen Yuehua Certified Public Accountants Co., Ltd. (S.Y.H.Y. Zi [2003] No.339 capital verification report).On May 25, 2003, with the approval of the Board of Directors of the Company, the shareholder Winner InternationalTrading Corporation signed the Equity Transfer Agreement with Winner Group Limited, under which WinnerInternational Trading Corporation transferred 100% of its equity to Winner Group Limited. On July 28, 2003, theCompany obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureaufor 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 capital fromHKD 70.00 million to HKD 126.00 million, and the total investment from HKD 134.00 million to HKD 270.00million. The newly increased registered capital of HKD 56 million was transferred from the undistributed profitsafter tax of the Company, and such newly increased registered capital was invested within half a year afterregistration of the change. On June 30, 2006, 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 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 capital
verification 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, and thecumulative paid-in capital after the change was HKD 126.00 million. This capital increase was verified by ShenzhenHengping Certified Public Accountants Co., Ltd. (S.H.P.W.Y. Zi [2007] No.0004 capital verification report). OnAugust 13, 2007, the Company obtained the changed business license of the enterprise legal person issued byShenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Association accordingly. Theregistration 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 legal personissued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Associationaccordingly.On April 1, 2010, the Board of Directors of the Company decided to increase the Company's registered capital fromHKD 126.00 million to HKD 192.00 million, and the total investment from HKD 270.00 million to HKD 380.00million. The increased amount of the registered capital was contributed by the original shareholders in cash inforeign 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 Hengping CertifiedPublic Accountants LLP (S.H.P.S. (W.) Y. Zi [2010] No.13 capital verification report). On July 2, 2010, theCompany obtained the changed business license of the enterprise legal person issue d by Shenzhen Administrationfor Market Regulation (since September 9, 2009, Shenzhen Municipal Bureau for Industry and Commerce has beenintegrated into Shenzhen Administration for Market Regulation) and amended the Articles of Associationaccordingly.On April 27, 2011, with the approval of General Administration for Industry and Commerce of Shenzhen, theCompany changed its residence address from No. 1 Wenjian Avenue, Bulong Road, Longhua Street, Bao'an District,Shenzhen to Winner Industrial Park beside Bulong Road, Longhua Street, Bao'an District, Shenzhen.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 196,271,300, and the totalinvestment was still HKD 380,000,000.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)*conversion 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 Textile Weaving 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 registered capitalby HKD 18,068,200. The registered capital after the change was HKD 214,339,500, and the total investment wasstill HKD 380,000,000. The new investment was subscribed by Shenzhen Kangsheng Investment Partnership (L.P.)(renamed as Shenzhen Leyuan Investment Partnership (L.P.), hereinafter referred to as the "Leyuan Investment"),Shenzhen Kangxin Investment Partnership (L.P.) (renamed as Xiamen Yutong Investment Partnership (L.P.),hereinafter referred to as the "Yutong Investment"), Shenzhen Kanglong Investment Partnership (L.P.) (renamed asXiamen Huikang Investment Partnership (L.P.), hereinafter referred to as the "Huikang Investment") with HKD10,322,400, HKD 4,414,500 and HKD 3,331,300 respectively. After the completion of the capital increase, theCompany's ownership 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 Winner IndustrialPark beside Bulong Road, Longhua Street, Bao'an District, Shenzhen City to Winner Industrial Park, No. 660Bulong Road, Longhua New District, Shenzhen. On November 4, 2013, the Company completed the industrial andcommercial registration of changes, obtained the changed business license of the enterprise legal person issued byShenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Association accordingly.On July 01, 2014, the Board of Directors of the Company decided and agreed to increase the Company's registeredcapital by HKD 3,646,600. The registered capital after the change was HKD 217,981,610, and the total investmentwas still HKD 380,000,000. The capital increase was made by the original shareholder, Leyuan Investment, whichsubscribed HKD 3,646,600 with RMB 13,585,000, and the increased registered capital was paid in two installments.After the completion of the capital increase, the Company’s ownership structure was changed as follows:
| 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,Winner Group Limited, would transfer its 2.9503% equity of the Company to Yutong Investment, HuikangInvestment, and the newly introduced shareholder, Shenzhen Kangli Investment Partnership (L.P.) (renamed asXiamen Zepeng Investment Partnership (L.P.), hereinafter referred to as "Zepeng Investment"). After thecompletion of the equity transfer, the Company’s ownership structure 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 the totalinvestment was still HKD 380,000,000. The new registered capital was subscribed by Beijing Sequoia XinyuanEquity Investment Center (L.P.) (hereinafter referred to as "Sequoia Xinyuan") with RMB 300.00 million. After thecompletion of the capital increase, the Company’s ownership structure was changed as follows:
| Investor | Capital contribution amount (HKD ten thousand) | Proportion (%) |
Winner Group Limited
| 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 RMB 300.00 million 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 as thebase date, Winner Industries was wholly changed into a limited liability Company, with a registered capital of RMB368 million. In accordance with the provisions of the Sponsorship Agreement and Articles of Association, theshareholders converted their audited net assets as of February 28, 2015 of RMB 1,058,194,956.32 into 368 millionshares at a ratio of 1:0.3478, par value of each share was RMB 1, and the total share capital was RMB 368 millionand held separately by the original shareholders in accordance with their original proportions; the remaining RMB690,194,956.32 was included in the capital surplus (due to the change of calculation policy of Company'sreceivables bad debt provision during the reporting period, the audited net assets of the Company as of the base dateof share reform were adjusted to RMB 1,050,812,354.45, and the corresponding share conversion ratio was adjustedto 1: 0.3502). June 4, 2015, with the approval of Economy, Trade and Information Commission of ShenzhenMunicipality, Winner Industries was wholly changed into a limited liability company, renamed as "Winner MedicalCo., Ltd.", and obtained the business license of enterprise legal person with the registration number of440306503230896.On May 28, 2018, after being voted through and approved by the extraordinary general meeting of shareholders,the Company agreed to increase the registered capital by RMB 8,492,308, with the registered capital after the changeof RMB 376,492,308. The new registered capital was subscribed by Shenzhen Capital Group Co., Ltd. (hereinafter
referred to as "SCGC") with RMB 300.00 million. 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 RMB 300.00 million 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 the abovematters. The Company amended the Articles of Association in respect of the above matters. This capital increasewas verified by BDO China Shu Lun Pan Certified Public Accountants LLP (X.K.S.B.Zi [2018] No.ZI10525 capitalverification report).On February 28, 2018, the Company obtained the renewed business license of the enterprise legal person issued byShenzhen 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 50 millioncommon shares in RMB 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 RMB 426,492,308.Business term: sustainable operation.General business scope: production of special labor protection articles; sales of special labor protection articles;production of labor protection articles; sales of labor protection articles; clothing manufacturing; clothing andapparel wholesale; clothing and apparel retail; sales of sanitary supplies and disposable medical supplies; sales ofpersonal hygiene products; shoes manufacturing; wholesale of shoes and hats; retail of shoes and hats; sales ofshoemaking raw and auxiliary materials; manufacturing of maternal and infant supplies; sales of maternal and infantsupplies; sales of Class I medical devices; retail of Class II medical devices; lease of non residential real estate;engagement in investment activities with self-owned funds. (The above items do not involve special managementmeasures for foreign investment access) (Except for the items subject to approval according to law, independentlycarry out business activities according to law with business license) Licensed business scope: production andoperation of medical biological materials, dressings and products, medical clothing, protective articles, textiles, non-woven products and molded packaging (the above products do not include the goods subject to national exportlicense administration) and related products, disposable consumables and molded packaging; wholesale, import andexport, retail (including online sales) of cotton household articles, cotton spunlaced non-woven fabric and itsproducts, cotton, disinfection products, daily necessities, cosmetics, protective articles, health care products andinstruments and meters, and other related ancillary businesses (if it does not involve goods subject to state trading,or involves goods subject to quotas, license management and other special provisions, it shall be subject to theapplication in accordance with relevant regulations of the state); research and development, production and sales ofsmart home appliances; development of new materials; provision of the technical consulting, technical services andafter-sales services for above-mentioned products; sterilization technical services (if relevant qualifications arerequired for operation, it shall be subject to the application in accordance with relevant regulations); enterprisemanagement consulting, business information consulting, economic information consulting, logistics supply chainmanagement and warehouse services (excluding hazardous chemicals, precursor chemicals, refined oil and otherdangerous goods), self-owned property leasing (only operation with the legal property ownership certificate underthe Company's name is approved); production of Class I medical devices; production of Class II medical devices;sales of Class II medical devices; production of Class III medical devices; operation of Class III medical devices.(The above items do not involve special management measures for foreign investment access) (Items subject toapproval according to the law can only be carried out after getting the approval of relevant departments. Specificoperating projects are subject to the approval documents or permits of relevant departments.)
Domicile of the Company: 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 NewDistrict, Shenzhen.The financial statements were approved by the Board of Directors of the Company on August 16, 2022.As of June 30, 2022, 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. (hereinafter referred to as "Winner Medical (Heyuan)")
Winner Medical (Heyuan) Co., Ltd. (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")Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd. 4* (hereinafter referred to as "Purunderwear")
Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd. 4* (hereinafter referred to as "Purunderwear")Huanggang Purcotton Ltd. 5* (hereinafter referred to as "Huanggang Purcotton")
Huanggang Purcotton Ltd. 5* (hereinafter referred to as "Huanggang Purcotton")Zhejiang Longterm Medical Technology Co., Ltd. (hereinafter referred to as "Longterm Medical")
Zhejiang Longterm Medical Technology Co., Ltd. (hereinafter referred to as "Longterm Medical")Hangzhou Shengyi Technology Co., Ltd. (hereinafter referred to as "Hangzhou Shengyi")
Hangzhou Shengyi Technology Co., Ltd. (hereinafter referred to as "Hangzhou Shengyi")Xi'an Longtemu Medical Technology Co., Ltd. (hereinafter referred to as "Xi'an Longtemu")
Xi'an Longtemu Medical Technology Co., Ltd. (hereinafter referred to as "Xi'an Longtemu")Deqing Longterm Medical Silica Gel Products Co., Ltd. (hereinafter referred to as "Deqing Longterm")
Deqing Longterm Medical Silica Gel Products Co., Ltd. (hereinafter referred to as "Deqing Longterm")Longterm Medical US LLC (hereinafter referred to as "American Longterm")
Longterm Medical US LLC (hereinafter referred to as "American Longterm")Winner (Guilin) Latex Products Co., Ltd. (hereinafter referred to as "Guilin Latex")
Winner (Guilin) Latex Products Co., Ltd. (hereinafter referred to as "Guilin Latex")
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*: Cotton Lining was established on July 9, 2019.5*: Huanggang Purcotton was established on September 27, 2020.In the current period, Longterm Medical and Guilin Latex were newly added through business combination notunder the same control. Under Longterm Medical, there are four subsidiaries, namely Hangzhou Shengyi, Xi'anLongtemu, Deqing Longterm and American Longterm.Pure HB (Shanghai) Co., Ltd. (hereinafter referred to as "Pure HB (Shanghai)") was established on March 16, 2018and cancelled on February 21, 2022.The scope of the consolidated financial statements for this reporting period and its changes are detailed in the Note"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 -- Basic
Standard 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 be ableto operate as a going concern within the next 12 months. The Company's financial statements are prepared on thebasis of the assumption of going concern.
V. Significant accounting policy and accounting estimateSpecific accounting policy and accounting estimate:
The following significant accounting policy and accounting estimate of the Company are formulated in accordancewith the Accounting Standards for Business Enterprises. The business not mentioned is implemented in accordancewith the relevant accounting 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 June 30, 2022 and the business performance and cash flows of the Company in the firsthalf of 2022.
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 bookkeeping 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 (or totalpar value of issued shares) is adjusted against capital reserve (capital stock premium); if the capital reserve (capitalstock 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 date foracquisition of the control right of the acquiree. If the cost of combination is greater than the share of the fair valueof the acquiree's identifiable net assets acquired in the combination, the difference is recognized as goodwill; if thecost of combination is less than the share of the fair value of the acquiree's identifiable net assets acquired in thecombination, the difference is included in the profit and loss of the current period. The acquiree's identifiable assets,liabilities and contingent liabilities obtained by the acquirer in the combination meeting the recognition conditionsare 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 the currentperiod; the transaction costs associated with the issue of equity or debt securities for the business combination areincluded 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 its subsidiariesand between the subsidiaries are offset. If the internal transaction indicates that impairment loss has occurred torelevant assets, such loss shall be recognized in full. If the accounting policies and the accounting periods adoptedby the subsidiaries are inconsistent with those of the Company, necessary adjustments shall be made in accordancewith the accounting policies and the accounting periods of the Company when preparing the consolidated financialstatements.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, the equityinvestment 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 (whicheveris later) and the merger date shall offset the period of between the opening retained earnings or current profits andlosses in the comparative reporting period.During the reporting period, if subsidiaries or business are increased due to business combination of enterprises notunder the same control, it shall be included in the consolidated financial statements as of the acquisition date on thebasis of the fair value of all identifiable assets, liabilities and contingent liabilities determined on the acquisitiondate.If it is able to exercise control over the invested entity that is not under the same control due to additional investmentor other reasons, the equity held by the acquiree before the acquisition date shall be re-measured according to thefair value of the equity on the acquisition date, and the difference between the fair value and the book value shallbe included into the current investment income. Other comprehensive income, which can be reclassified into profitand loss in the future, and other changes in owners' equity under the equity method as related to the acquiree's equityheld before the acquisition date are converted to the investment income of the current period as of the acquisitiondate.
(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 subsidiary
continuously 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 into profitand loss in the future, and other changes in owners' equity under the equity method are converted to the investmentincome 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 the controlright, the terms, conditions and economic impact of the disposal on each transaction in respect of the equityinvestment of the subsidiary are subject to one or more of the following circumstances, which generally indicatethat 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 deal fordisposal of subsidiary and loss of the control right; the difference between the disposal price and the share of netassets of the subsidiary corresponding to the disposal of investment before the loss of control right is recognized asother comprehensive income in the consolidated financial statements and transferred into the current profit and lossin 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 shall becarried 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 accordingto the increased shareholding ratio is adjusted against the capital stock premium in the capital reserve in theconsolidated balance sheet; if the capital stock premium in the capital reserve is not sufficient to offset the difference,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 the
Company;
(2) Recognize the liabilities undertaken solely by the Company and the liabilities jointly undertaken according to
the 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 the
Company;
(5) Recognize the expenses incurred separately and the expenses incurred in joint operation according to the shareof the CompanyThe Company's investment in the joint venture shall be accounted by the equity method. Please refer to Note "V.
22. Long-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 and thatare 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 conversion exchangerate to convert the foreign currency amount into RMB for bookkeeping.At the balance sheet date, the balance of foreign currency monetary items is converted by using the spot exchangerates at the balance sheet date. Exchange differences arising therefrom are recognized in current profit and loss,except the exchange differences related to a specific-purpose borrowing denominated in foreign currency thatqualify 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 on thebalance 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 incomestatement 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 foreign currenciesrelated to the overseas operation shall be transferred from the owner's equity item to the profit and loss of thedisposal 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 be measuredat fair value and whose changes are recorded into the profits and losses of the current period as financial assetsmeasured 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 principal
amount.The Company classifies the financial assets that meet the following conditions and are not designated to be measuredat fair value and whose changes are recorded into the profits and losses of the current period as financial assetsmeasured 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 investments meetthe 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 and financial
liability portfolio on the basis of fair value according to the enterprise risk management or investment strategyset forth in the official written documents, and rep ort to the key management personnel within the enterpriseon 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, other receivables,long-term receivables, debt investment, etc., which shall be initially measured at fair value, and the relevanttransaction expenses are included in the initial recognized amount; the receivables excluding major financingcomponents and the accounts receivable that the Company decides not to consider the financing components of lessthan 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 assets shallbe recorded into the current profit or loss.
(2) Financial assets measured at fair value of which changes are recorded into other comprehensive income (debt
instrument)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 subsequently measuredat its fair value, and changes in the fair value are recorded in other comprehensive income, except the interest,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 (equity
instrument), including other equity instrument investment, are initially measured at fair value and related transactioncosts are included in the initial recognized amount. Such financial assets are subsequently measured at the fair valueand the change in the fair value is recorded into other comprehensive income. The dividends obtained are recordedin 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 tradingfinancial 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 subsequentlymeasured 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, including tradingfinancial liabilities, derivative financial liabilities, etc., are initially measured at fair value and related transactionexpenses are recorded in current profit and loss. Such financial liabilities are subsequently measured at the fair valueand 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 borrowings, notes payable, accounts payable,other payables, long-term borrowings, bonds payable and long-term payables, are initially measured at fair value,and related 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 financial liabilityis 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 retained virtuallyall of the risks and remuneration in the ownership of the financial assets, it has not retained control of thefinancial 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 partial transferof financial assets. If the overall transfer of the financial asset meets the de-recognition conditions, the differencebetween 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 changes
originally included in owner's equity directly (where the financial asset involved in the transfer is measured atfair 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 overalltransferred 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 in thetransfer is measured at fair value and the change is recorded in other comprehensive income (debt instrument)).If the transfer of the financial asset does not meet the conditions of de-recognition, such financial asset shall continueto 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 the existingfinancial 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 existing financialliability or part thereof shall be derecognized, and the financial liabilities after the modification shall be recognizedas 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 the de-recognition part. The difference between the book value allocated to the derecognized part and the considerationpaid (including non-cash asset transferred out or the liability undertaken) is recorded in current profit 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, and givespriority to relevant observable input values. The Company uses non-observable input values only when relevantobservable 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, the Companyshall measure its loss provision according to the amount equivalent to the expected credit loss in the entire durationof such financial instrument. If the credit risks of such financial instrument have not increased significantly sincethe initial recognition, the Company shall measure the loss provision according to the amount equivalent to theexpected credit loss of such financial instrument in the next 12 months. The amount of the increase or reversal of
the loss provision resulting therefrom shall be recorded into the current profit and loss as an impairment loss orprofit.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 are low on the balance sheet date, the Company considers that the creditrisks 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
Please refer to "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'sacceptance bill
| 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 debt provisionfor notes receivable -trade acceptance, accounts receivable and prepayments based on all reasonable and informedinformation, 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 1 year)
| Within 1 year (including 1 year) | 5 | 5 | 0 |
1-2 years
| 1-2 years | 10 | 10 | 0 |
| 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 (excluding receivables)impairment".
13. Amounts receivable financing
Please refer to "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 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 (excluding receivables)impairment".
15. Inventory
1) Classification and cost of inventories
The inventories are classified as raw materials, low priced and easily worn articles, merchandise inventory, work inprogress, goods shipped in transit, goods processed by commission, wrappage, etc.Inventories are initially measured at cost. The inventory cost includes procurement costs, processing costs, and otherexpenses 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 directly usedfor sale, the net realizable value is recognized by the amount of the estimated sale price of the inventories subtractedby the estimated selling expenses and related taxes in normal production and operation process; for the materialinventory required to be processed, the net realizable value is recognized by the amount of the estimated sale priceof the finished products subtracted by the estimated cost about to occur in completion, estimated selling expensesand related taxes in normal production and operation process; for the inventories held to perform the sales contractor labor contract, the net realizable value is calculated on the basis of contract price. If the number of the inventoriesheld is greater than the quantity ordered in the sales contract, the net realizable value of the excessive 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 the inventoryfalling price reserves, resulting in the net realizable value of the inventories higher than the book value, the amountwritten down is reversed within the originally withdrawn amount of inventory falling price reserves and the amountreversed 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 relevant standardsfor inventory, fixed assets or intangible assets, it shall be recognized as an asset as a contract performance cost whenthe 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 be recognizedas 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 to
the 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 book value
of the asset, the Company shall reverse the withdrawn impairment provision and include it into the current profitand loss, but the book value of the reversed asset shall not exceed the book value of such asset on the reversal dateif 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 following conditionssimultaneously:
(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 purchase
commitment, 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 approval hasbeen obtained.Where it is classified as non-current assets (not including financial assets, deferred income tax assets, investmentproperties that are subsequently measured at fair value, the assets formed by the employee compensation) or disposalgroups held for sale, if its book value is higher than the net amount of the fair value minus the selling expense, thebook value is written down to the net amount of the fair value minus the selling expense, the amount written downis recognized as the assets impairment loss and included in the current profit and loss, and the impairment provisionfor assets held for sale shall be made at the same time.
19. Debt investment
Please refer to "10. Financial instruments".
20. Other debt investments
Please refer to "10. Financial instruments".
21. Long-term receivables
N/A
22. Long-term equity investments
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 of thefinal controlling party, on the combination date, is regarded as the initial cost of the long-term equity investment.The difference between the initial cost of the long-term equity investment and the book value of paid considerationshall adjust the capital stock premium in capital reserve. If the capital stock premium in capital reserve is insufficient
to offset, the retained earnings shall be adjusted. Where it implements the control upon the invested entity under thesame control due to additional investment or other reasons, the difference between the initial investment cost of thelong-term equity investment recognized according to the above principle and the sum of the book value of the long-term equity investment before the combination plus the book value of the new consideration for the acquisition offurther shares on the merging date shall adjust the capital stock premium. If the capital stock premium is insufficientto 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 equity investment.Where it implements the control upon the invested entity not under the same control due to additional investmentand other reasons, the sum of the book value of the original equity investment plus the new investment cost is takenas 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 Companyrecognize the investment income in current period in accordance with the attributable share of cash dividends orprofit 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 share ofthe net identifiable assets of the invested entity in the investment, it is recorded in current profit and loss and thecost 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 invested entity;for changes in owner's equity of the invested entity other than those arising from its net profit o r loss, othercomprehensive income and profit distribution (abbreviated as "other changes in owner's equity"), the Companyadjusts 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 when obtainingthe 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 full amountif 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 other long-termequity substantially constituting the net investment in the cooperative enterprise or joint venture. If the cooperative
enterprise or joint venture achieves the net profits in the later periods, the Company recovers to recognize the gainsharing amount after making up for the unrecognized loss sharing amount with the gain sharing amount.
(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 method shallbe subject to accounting treatment through adopting the basis for the direct disposal of relevant assets or debts whenthe equity method is terminated. Other changes in owners' equity will be transferred to current profit and loss whenthe 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 or liabilitiesby the invested entity, and other changes in owners' equity recognized by the equity method shall be carried forwardproportionately to the current profit and loss. If the residual equity cannot exercise joint control or exert significantinfluence on the invested entity, it shall be recognized as financial assets, the difference between its fair value andbook value on the date of loss of control shall be included in the current profit and loss, and all other comprehensiveincome and other changes in owner’s equity recognized before obtaining the control right of the invested entity shallbe carried forward.If the deals for disposal of the subsidiary’s equity investment by steps through several times of transaction until theloss of the control right belong to a package deal, the deals shall be subject to accounting treatment as a deal fordisposal of the equity investment in the subsidiary and loss of the control right; the difference between each disposalprice and the book value of the long-term equity investment corresponding to the equity disposed of before the lossof control right is, in individual financial statements, recognized as other comprehensive income and then transferredinto the current profit and loss in the period of loss of control right. If it does not belong to a package deal, each dealshall be accounted for separately.
23. Investment real estates
Measurement mode of investment propertiesN/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 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 cost factors).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 | Depreciation 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 in differentways, 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 next month.
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 or productionof the assets eligible for capitalization, they shall be capitalized and recorded into the cost of the relevant assets;other borrowing costs shall be recognized as expenses according to the amount incurred at the time of occurrenceand shall be recorded into the current profit and loss.Assets meeting the capitalization conditions refer to the fixed assets, investment properties, 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 to thetime point at which borrowing costs cease to be capitalized, excluding the period during which the capitalization ofborrowing 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 or productionof 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 intended
use 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 purchase andconstruction 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 the currentperiod of specific borrowing, minus the amount of the interest income obtained by depositing the unused borrowingfunds 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 the capitalizationconditions, the amount of borrowing expenses to be capitalized for the general borrowing shall be calculated andrecognized according to the weighted average of the accumulated asset expenditure exceeding the specificborrowing multiplied by the capitalization rate of the general borrowing occupied. The capitalization rate iscalculated 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
Please refer to 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 expenses incurredto 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 | Useful life estimated by the management |
Trademark right
| Trademark right | 5-10 | Benefit period specified in the certificate of |
| Item | Expected useful life | Basis |
trademark use
trademark usePatent right
| Patent right | 5-10 | 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 stage
The expenditure of the Company's internal R&D projects is classified into the expenditure at the research stage andthe 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 measuredIf 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 needs to comply with the disclosure requirements of the "Medical Device Business" in the No. 4Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by GrowthEnterprises.
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 Company recognizesthe recoverable amount of the asset group based on the asset group to which the asset belongs if the recoverableamount of the single asset is difficult to estimate. An asset group is the smallest group of assets that can generatecash inflows independently.The goodwill formed due to business combination, intangible assets with uncertain service life and intangible assets
that have not yet reached the usable state shall be subject to impairment test at least at the end of each year regardlessof whether there are signs of impairment.The Company conducts the goodwill impairment tests. For the book value of the goodwill formed due to businesscombination, 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 group combination.The relevant asset group or asset group combination is an asset group or asset group combination that can benefitfrom 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, conduct impairmenttest on the asset group or asset group combination without goodwill at first, calculate the recoverable amount andrecognize the corresponding impairment loss compared with the relevant book value. Then conduct an impairmenttest on the asset group or asset group combination containing goodwill to compare its book value with therecoverable amount. If the recoverable amount is less than the book value, the amount of impairment loss shall firstoffset the book value of goodwill amortized to the asset group or asset group combination, and then offset the bookvalue of other assets proportionally according to the proportion of the book value of assets other than goodwill inthe asset group or asset group combination. The above impairment loss of assets will not be reserved in subsequentaccounting periods once recognized.
32. Long-term unamortized expenses
Long-term unamortized expenses refer to the expenses that have occurred but shall be burdened in current periodand later periods with the apportionment period more than one year.Amortization method: long-term unamortized 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 the laborunion 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 current profitsand 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. In caseof surplus in the defined benefit plan, the Company measures the net assets of the defined benefit plan according tothe 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 the nationaldebts matching the defined benefit plan obligatory term and currency or the market return of the high-qualitycorporation 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 from re-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 the balancebetween the present value of the defined benefit plan obligation and the settlement price recognized on thesettlement 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 the Companyfails to unilaterally withdraw the dismission welfare due to termination of labor relation plan or downsizingsuggestions; when the Company recognizes the costs or expenses related to restructuring involving payment ofdimission welfare.
(4) Other long-term employee benefits accounting method
N/A
35. Lease liabilities
Please refer to Note "V. 42: Lease".
36. Estimated liabilities
The estimated liabilities are recognized when the obligation related to contingencies meets the following conditionssimultaneously:
(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 bydiscounting 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 is conclusiveevidence that the book value cannot reflect the current best estimate, it shall adjust the book value according to thecurrent 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. The Company'sshare-based payments shall consist of equity-settled share-based payments and cash-settled share-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 be increasedaccordingly. For the share-based payment transaction where the service within the waiting period is completed afterthe grant or specified performance conditions are met, on every balance sheet date of the waiting period, theCompany shall include the service obtained at the current period into relevant costs or expenses according to thefair value of the grant date on the basis of the best estimate of the number of equity instruments with exercisablerights, and increase the capital reserve accordingly.If the terms of the equity-settled share-based payment are modified, the services acquired are recognized at least interms of the unmodified terms. In addition, any modification that increases the fair value of the equity instrumentgranted, or that is beneficial to the employee at the date of modification, recognizes an increase in the acquisitionof 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 in theremaining 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 a replacement for thecancelled equity instrument on the grant date, the granted replacement equity instrument will be handled in the samemanner 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 transactions withexercisable rights immediately after the grant, the Company shall include it in the relevant costs or expenses inaccordance with the fair value of the equity instrument on the grant date, and the liabilities shall be increasedaccordingly. If the rights can only be exercised after the situation that service within the waiting period is completedand set performance is achieved, the service obtained in the current period, according to the fair value of theliabilities borne by the Company, and basing on the best estimate for the condition of exercising rights, will berecorded 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 substance reflected
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 deliveringcash or other financial assets;
(2) It contains contractual obligations of delivering a variable number of its own equity instruments for settlement;
(3) It contains derivative instrument (such as equity transfer, etc.) that is settled with its own equity, and suchderivative 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 not meetone of the above conditions, it, in whole or in part thereof, is classified as equity instrument at the time of initialrecognition.
39. Income
Accounting policies for income recognition and measurementThe Company has fulfilled its contractual obligation to recognize income when the customer acquires control of therelevant goods or services. Obtaining control of the relevant goods or services is the ability to dominate the use ofthe 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 of thecontract, 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 accordance withthe terms of the contract and in combination with its past practices, and in determining the transaction price, it takesinto 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 transaction priceincluding the variable consideration by an amount not exceeding the amount of accumulated recognized incomewhich is highly unlikely to be materially reversed when the relevant uncertainty is eliminated. If there is a materialfinancing component in the contract, the Company shall determine the transaction price based on the amountpayable in cash when the customer acquires control of the goods or services, and shall amortize the differencebetween the transaction price and the contract consideration by the effective interest method during the contractperiod. If one of the following conditions is satisfied, it shall be deemed to have performed its performanceobligation within a certain period of time; otherwise, it shall be deemed to have performed its performanceobligation at a certain time point:
? The customer obtains and consumes the economic benefits arising from the Company's performance at thesame 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 Company shallbe entitled to receive payment for the accumulated part of the performance completed so far during the wholecontract period.For the performance obligations performed within a certain period of time, the Company shall recognize the income
in accordance with the performance progress during that period, except where the performance progress cannot bereasonably determined. Taking into account the nature of the goods or services, the Company will use the outputmethod or input method to determine the performance schedule. If the performance schedule cannot be reasonablydetermined and the cost already incurred is expected to be compensated, the Company shall recognize the incomeaccording 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 shipment of
goods (the Company's export income settlement mainly adopts FOB and CIF methods. For a very small number
of other settlement methods, such as for those adopting EXW terms, the buyer designates carrier door-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 of product sales revenue;
for those adopting the DDP/DDU terms, the delivery of products to the destination designated 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 of receipt
(that is, the income is recognized after the customer signs for the receipt, but if the contract stipulates that
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 confirmation of
the completion of the transaction (i.e., the income is recognized when the customer initiatively confirms receipt
of the goods on the e-commerce platform and when the e-commerce platform automatically confirms receipt
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 the
income after receiving the sales list and checking it according to the time of reconciliation agreed in the contract.Differences in income recognition accounting policies caused by different business modes for the same business
40. Government subsidies
1) Type
Government subsidies refer to the monetary assets or non-monetary assets obtained free of charge by the Companyfrom the government, and are classified into asset related government subsidies and the income related governmentsubsidies.Government subsidies related to assets refer to the government subsidies obtained by the Company for the purchaseand construction of long-term assets or the formation of long-term assets by other means. Government subsidiesrelated 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 is expected toform 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 by stagesin accordance with reasonable and systematic methods during the service life of the relevant assets (if it is relatedto the daily activities of the Company, it shall be recorded into other income; those not related to the daily activitiesof the Company shall be included in non-operating income);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 and lossduring the period of recognition of the relevant costs, expenses or losses (if it is related to the Company's dailyactivities, it shall be recorded into other income; if it is not related to the daily activities of the Company, it shall beincluded in non-operating income) 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 to thedaily activities of the Company, it shall be included in non-operating income) or write down relevant costs, expensesor losses.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 bank providesthe loan to the Company at the policy-based preferential interest rate, the Company shall take the loan amountactually received as the entry value of the borrowing, and calculate the relevant borrowing cost in accordancewith 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 will offsetthe 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 of thedifference (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 taxable income(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 the temporarydifference write-back time and the temporary difference will probably not be written back in the foreseeable future.For the deductible temporary difference related to the investment of the subsidiaries, joint ventures and cooperativeenterprises, deferred income tax assets are recognized when it is likely to write back the temporary difference in theforeseeable future or to obtain the income tax payable used to offset the deductible temporary difference in thefuture.The deferred income tax assets and deferred income tax liabilities are measured on the balance sheet date accordingto the tax law and the applicable tax rate in the period of expected recovery of relevant assets of liquidation ofrelevant liabilities.On the balance sheet date, the Company reviews the book value of the deferred income tax assets. If it is likely notto obtain sufficient income tax payable to deduct the interests of the deferred income tax assets in the future, thebook value of the deferred income tax assets is written down. If it is likely to obtain sufficient income tax payable,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 net amountafter 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 a netbasis;The deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the sametax col lection and management department from the same subject of tax payment or from different subjects of taxpayment but the subject of tax payment involved intends to settle the current income tax assets and liabilities withthe net amount or obtain the assets and liquidate the liabilities simultaneously in each future important period whenthe 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 the contractis a lease or contains a lease. If a party to the contract transfers the right to control the use of one or more identifiedassets within a certain period in exchange for consideration, the contract is a lease or contains a lease.If a contract contains several separate leases information, the Company will split the contract and conductaccounting treatment for each of the separate leases. When a contract contains both lease and non-lease information,the lessee and the lessor shall separate lease information from and non-lease information.For rent concessions, such as rent reduction and deferred payment, directly caused by the COVID-19 epidemic andagreed on the existing lease contracts, where the following conditions are satisfied, the Company shall adopt asimplified method for all lease options, and shall not assess on whether there is a lease change or reevaluate thelease classification:
1) The lease consideration after the concession is reduced or essentially unchanged compared with that before theconcession, where the lease consideration can not be discounted or discounted at the discount rate before
concession;
2) The concession is only made for lease payments payable before June 30, 2022; If the lease payments payable
after June 30, 2022 is increased, it shall not affect the condition satisfaction; If the lease payments payableafter June 30, 2022 is decreased, it shall not satisfy this condition; The other terms and conditions of the leasewere found to be unchanged after considering qualitative and quantitative factors.
1. The Company acts as the lessee:
(1) Right-of-use assets
On the commencement date of the lease period, the Company recognizes right-of-use assets for leases other thanshort-term leases and leases of low-value assets. The right-of-use assets is initially measured at cost. The costincludes:
1) The initial measurement amount of the lease liabilities;
2) If there is a lease incentive for the lease payment paid on or before the start of the lease term, the amount ofthe granted lease incentive shall be deducted;
3) The initial direct expenses incurred by the Company;
4) Costs expected to be incurred by the Company to disassemble and remove a leased asset, restore the site where
the leased 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 subsequently withdraws depreciation of right-of-use assets with the straight-line method. Where itcan be reasonably determined that the ownership of the leased assets can be acquired upon the expiration of thelease term, depreciation shall be calculated and withdrawn by the Company within the service life of the leasedassets; Otherwise, the depreciation shall be calculated and withdrawn within a shorter period of the lease term andthe service life of the leased assets.The company determines whether the right-of-use asset has been impaired in accordance with the principlesdescribed in Note "V. 31. Long-term assets impairment", and conducts accounting treatment for the identifiedimpairment losses.
(2) Lease liabilities
On the commencement date of the lease period, the Company recognizes lease liabilities for leases other than short-term leases and leases of low-value assets. Lease liabilities are initially measured at the present value of outstandinglease payments. Lease payments include:
1) Fixed payments (including actual fixed payments), if there is lease incentive, the relevant amount of leaseincentive shall be deducted;
2) Variable lease payments that depend on an index or rate;
3) The amount estimated to be paid based on the residual value of the guarantee provided by the Company;
4) The exercise price of the purchase option, provided that the Company reasonably determines that the option
will be exercised;
5) The amount to be paid to exercise the option to terminate the lease, provided that the lease term reflects thatthe Company will exercise the option to terminate the lease.The Company adopts the interest rate implicit in the lease as the discount rate. However, if the interest rate implicitin the lease cannot be reasonably determined, the incremental borrowing interest rate of the Company will beadopted as the discount rate.The Company calculates the interest expense of the lease liability during each period of the lease term at a fixedperiodic 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 shall be included in currentprofit or loss or the cost of the related asset when they are actually incurred.
After the commencement date of the lease term, in case of the following circumstances, the Company shallremeasure the lease liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-useassets has been reduced to zero, but the lease liabilities still need to be further reduced, the difference shall beincluded in the current profit and loss:
1) In case of any change in the appraisal results of the purchase option, lease renewal option or termination option,or the actual exercise of the aforementioned options is inconsistent with the original appraisal result, theCompany shall remeasure the lease liability according to the present value which is calculated based on thechanged lease payment and the revised discount rate;
2) In case of any change in substantial fixed payment, the estimated payable amount of the residual value of theguarantee, or the index or ratio used to determine the lease payment, the Company shall remeasure the leaseliability according to the present value which is calculated based on the changed lease payment and the reviseddiscount rate. However, if the changes in lease payment results from the changes in floating interest rate, arevised discount rate shall be used for calculation of the present value.
(3) Short-term leases and low-value asset leases
The Company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and low-valueasset leases, and includes the relevant lease payments in the current profit and loss or related asset costs on a straight-line basis over each period of the lease term. Short-term leases refer to the leases with a lease term of not more than12 months and excluding purchase options on the commencement date of the lease term. Low-value asset leasesrefers to the leases with a lower value when the single leased asset is a new asset. Where the Company subleases orexpects to sublease the leased assets, the original lease will not be a low-value asset lease.
(4) Lease changes
In case of any lease changes that meet the following conditions, the Company shall treat the lease change as aseparate lease for accounting treatment:
1) The lease change expands the lease scope by adding the right to use one or more leased assets;
2) The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease
upon adjustment based on the contract.If the lease change is not accounted for as a separate lease, on the effective date of the lease change, the Companyshall reallocate the consideration of the contract after the change, redetermine the lease term, and remeasure thelease liability according to the present value which is calculated based on the changed lease payment and the reviseddiscount rate.If the lease change leads to the narrowing of the lease scope or the shortening of the lease term, the Company shallreduce the book value of the right-of-use asset accordingly, and credit the relevant gains or losses on partial orcomplete termination of the lease into the current profit and loss. If other lease changes result in re-measurement oflease liabilities, the Company shall adjust the book value of the right-of-use asset accordingly.
(5) Rent concessions related to COVID-19
If the simplified method of rent concessions related to COVID-19 is adopted, the Company will not assess whetherthere is any lease change, continues to calculate the interest expense of the lease liability at the same discount rateas that before the concession and include it in the current profit and loss, and continues to withdraw the depreciationof the right-of-use asset with the same method as that before the concession. In case of rent reduction or exemption,the Company will treat the reduced rent as variable lease payment amount. When the original rent paymentobligation is relieved by reaching a concession agreement, the Company will offset the relevant asset costs orexpenses by the undiscounted amount or the amount discounted at the discount rate before concession, and adjustthe lease liabilities accordingly; In case of delayed payment of rent, the Company will offset the lease liabilitiesrecognized in the previous period upon actual payment.For short-term leases and low-value asset leases, the Company will continue to credit the original contract rent intorelevant asset costs or expenses in the same manner as that before the concession. In case of rent reduction orexemption, the Company will treat the rent reduced as variable lease payment amount and offset the relevant assetcosts or expenses during the reduction or exemption period; In case of deferred payment of rent, the Company willrecognize the rent payable as account payable in the original payment period, and offset the account payable
recognized in the previous period upon actual payment.
2. The Company acts as the lessor:
The Company classifies leases as finance leases and operating leases at the commencement date of the lease term.Finance leases refers to the leases where almost all risks and rewards related to the ownership of leased assets havebeen substantively transferred regardless of whether the ownership is eventually transferred or not. Operating leasesrefer to leases other than financial leases. When the Company acts as a sublease lessor, sublease classification willbe made based on the right-of-use asset arising from the original lease.
(1) Accounting for operating lease
The lease receipts from operating lease are recognized as rental income on a straight-line basis over each period ofthe lease term. The Company capitalizes the initial direct expenses incurred in relation to operating leases, whichare amortized and included in the current profit and loss on the same basis as the rental income is recognized duringthe lease term. The variable lease payments not credited into lease receipts shall be included in current profit or lossor when they are actually incurred. In case of any change in the operating lease, the Company shall treat it as a newlease for accounting treatment from the effective date of the change, and the advance receipts or lease receivablesrelated to the lease before the change shall be deemed to be the amount received for the new lease.
(2) Accounting for finance lease
On the commencement date of the lease term, the Company recognizes finance lease receivables for finance leasesand terminates the recognition of the finance lease assets. When the Company initially measures the finance leasereceivables, the net lease investment is regarded as the entry value of the finance lease receivables. The net leaseinvestment is the sum of the unguaranteed residual value and the present value of the lease receipts that have notbeen received at the commencement date of the lease, discounted at the interest rate implicit in the lease.The Company calculates and recognizes the interest income during each period of the lease term at a fixed periodicrate. The derecognition and impairment of finance lease receivables shall be accounted for in accordance with Note"V. 10. Financial instruments".The variable lease payments that are not included in the measurement of net lease investment shall be included incurrent profit or loss or when they are actually incurred.In case of any changes that meet the following conditions, the Company shall treat the change as a separate leasefor accounting treatment:
1) The change expands the lease scope by adding the right to use one or more leased assets;
2) The increased consideration is equivalent to the amount of the separate price of the expanded part of the leaseupon adjustment based on the contract.In case that the change of a financial lease is not accounted for as a separate lease, the Company shall deal with thechanged lease under the following circumstances:
1) If the change takes effect on the commencement date of the lease term, and the lease is classified as an operating
lease, the Company will account for it as a new lease from the effective date of the lease change, and take thenet lease investment before the effective date of the lease change as the book value of the leased asset;
2) If the change takes effect on the commencement date of the lease term, and the lease is classified as a financial
lease, the Company will conduct accounting treatment according to the policy in Note "V. 10. Financialinstruments" regarding the modification or renegotiation of contracts.
(3) Rent concessions related to COVID-19
For the operating leases for which the simplified method of rent concessions related to COVID-19 is adopted, theCompany will continue to recognize the original contract rent as lease income in the same method as that before theconcessions; In case of rent reduction or exemption, the Company will treat the rent reduced as variable leasepayment amount and offset the lease income during the reduction or exemption period; In case of deferred paymentof rent, the Company will recognize the rent receivable as account receivable in the original payment period, andoffset the account receivable recognized in the previous period when the rent is actually received.
For the finance leases for which the simplified method of rent concessions related to COVID-19 is adopted, theCompany will continue to calculate the interest at the same discount rate as that before the concession and recognizeit as lease income. In case of rent reduction or exemption, the Company will treat the reduced rent as variable leasepayment amount. When the original rent collection right is waived by reaching a concession agreement, theCompany will offset the previously recognized lease income by the undiscounted amount or the amount discountedat the discount rate before concession (the part insufficient to offset will be included in the investment income), andadjust the finance lease receivables accordingly; In case of delayed collection of rent, the Company will offset thefinance lease receivables recognized in the previous period upon actual receipt.
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 the 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 transferincome. Please refer to the 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.Please refer to the 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.For rent concessions, such as rent reduction and deferred payment, directly caused by the COVID-19 epidemic andagreed on the existing lease contracts, where the following conditions are satisfied, the Company shall adopt asimplified method for all lease options (reminder: if not adopted for all leases, the nature of the lease contractstreated with the simplified method shall also be disclosed, but the selection of the simplified method shall beconsistently applied to similar lease contracts), and shall not assess on whether there is a lease change or reevaluatethe lease classification:
The lease consideration after the concession is reduced or essentially unchanged compared with that before theconcession, where the lease consideration can not be discounted or discounted at the discount rate before concession;The concession is only made for lease payments payable before June 30, 2021; If the lease payments payable afterJune 30, 2021 is increased, it shall not affect the condition satisfaction; If the lease payments payable after June 30,2021 is decreased, it shall not satisfy this condition;The other terms and conditions of the lease were found to be unchanged after considering qualitative andquantitative factors.
1. Accounting for operating lease
(1) The lease payments made by the Company for leased assets shall be amortized on a straight-line basis over theentire lease term without deducting the rent-free period and included in the current expense. The initial directexpenses paid by the Company in connection 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 for which the simplified method of rent concessions related to COVID-19 is adopted, theCompany will continue to include the original contract rent in the relevant asset costs or expenses in the samemanner as that before the concession. In case of rent reduction or exemption, the Company will treat the rent reducedas contingent rent and record it in profit and loss during the reduction or exemption period; In case of deferredpayment of rent, the Company will recognize the rent payable as account payable in the original payment period,and offset the account payable recognized in the previous period upon actual payment.
(2) The lease payments received by the Company for leasing assets shall be amortized on a straight-line basis overthe entire lease term without deducting the rent-free period and recognized as lease-related income. The initialdirect expenses paid by the Company in connection with the lease transaction shall be included in the currentexpenses; if the amount is large, it will be capitalized and recorded into the current income by stages accordingto the same basis as the lease-related income recognition throughout the lease period.When the Company bears the lease-related expenses that should be borne by the leasee, the Company shall deductsuch expenses from the total rental income, apportion them according to the deducted rental expenses during thelease period.For the operating leases for which the simplified method of rent concession related to COVID-19 is adopted, theCompany will continue to recognize the original contract rent as lease income in the same method as that before theconcession; In case of rent reduction or exemption, the Company will treat the rent reduced as contingent rent andoffset the lease income during the reduction or exemption period; In case of deferred payment of rent, the Companywill recognize the rent receivable as account receivable in the original payment period, and offset the accountreceivable recognized in the previous period when the rent is actually received.
(2) Accounting treatment method of finance lease
(1) Assets acquired under finance leases: on commencement of the lease term, the Company takes the lower of the
fair value of the leased asset and the present value of the minimum lease payment as the entry value of theleased asset, and the minimum lease payment as the entry value of the long-term payables, and their balanceas the unrecognized financial expenses. The Company adopts the effective interest rate method to amortize theunrecognized financing costs within the period of the asset lease and record them into financial expenses. Theinitial direct expenses incurred by the Company shall be included in the value of the leased assets.For the finance leases for which the simplified method of rent concessions related to COVID-19 is adopted, theCompany will continue to recognize unrecognized financial expenses as current financial expenses at the samediscount rate as that before the concession and recognize it as lease income, and continue to withdraw thedepreciation of the assets acquired under finance leases with the same method as that before concession; In case ofrent reduction or exemption, the Company will treat the reduced rent as contingent rent, include it in current profitand loss when the original rent payment obligation is relieved by reaching a concession agreement, and adjust long-term payables accordingly, or make a discount at the pre-concession discount rate before concession and include itin current profit and loss and adjust the unrecognized financial expenses; In case of delayed payment of rent, theCompany will offset the long-term payables recognized in the previous period upon actual payment.
(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 and its presentvalue as unrealized financing income, and recognizes it as rental income in each period in which the rent isreceived in the future. The initial direct expenses incurred by the Company in connection with the leasingtransaction shall be included in the initial measurement of the finance lease receivable, and the amount ofincome recognized during the lease term shall be reduced.For the finance leases for which the simplified method of rent concessions related to COVID-19 is adopted, theCompany will continue to recognize the unrealized financing income as lease income at the same interest rateimplicit in the lease as that before the concession. In case of rent reduction or exemption, the Company will treatthe reduced rent as contingent rent. When the original rent collection right is waived by reaching a concessionagreement, the Company will offset the previously recognized lease income with the part insufficient to offset willbe included in the investment income, and adjust the long-term receivables accordingly, or make a discount at thepre-concession discount rate before concession and include it in current profit and loss and adjust the unrecognizedfinancial expenses accordingly; In case of delayed collection of rent, the Company will offset the long-termreceivables recognized in the previous period upon actual receipt.
43. Other significant accounting policy and accounting estimate
1) Discontinued operation
Termination of 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 been recognizedand 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 riskrelating 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 net investment
of overseas operations. Net investment in overseas operations refers to the equity share of the enterprise in thenet 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 relationship andhas 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 cash flowof the hedging instrument can offset the change in the fair value or cash flow of the hedged item caused by thehedged 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 hedging relationshipis 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 hedging instrument,
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 hedged
item 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. Changes formedby the fair value of the hedged item due to the hedging risk shall be included in the current profit and loss, and thebook 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 book value
of the hedged item are amortized during the remaining period between the adjustment to the due date and recordedin the current profit and loss. Amortization under the effective interest rate method may commence immediatelyafter the book value adjustment and shall not be later than the adjustment of fair value changes in the terminationof 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 relevant gainsor losses are recorded into the current profits and losses. Changes in the fair value of hedging instruments are alsorecorded 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 recorded intothe 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 income willbe transferred to the current profit and loss. If a hedged item is the cost of a non-financial asset or non-financialliability, the amount originally recognized in other comprehensive income amount is transferred out and recordedinto the amount of initial recognition of the non-financial asset or non-financial liability (or the amount originallyrecognized in other comprehensive income is transferred out during the same period as the non-financial asset ornon-financial liability affecting the profit and loss, and recorded into the current profit and loss).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 firm commitmentaffects 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, thepart that is recognized as effective hedging is recorded in other comprehensive income, while the part that is invalidhedging is recognized as current profit and loss. When disposing of overseas operations, any accumulated gains orlosses previously recorded in other comprehensive income will be transferred out and recorded into current profitand 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 operating segmentsand 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 of theCompany can regularly evaluate the operating results of the component to determine the allocation of resources toit and evaluate its performance; (3) The Company can obtain relevant accounting information such as the financialposition, operating results and cash flow of the component. If two or more operating segments have similareconomic characteristics and meet certain conditions, they may be merged into one operating segment.
4) Repurchase of the Company's shares
If the Company repurchases its shares due to the reduction of its registered capital, it shall debit the "Treasury Stock"and credit the "Bank Deposits" and other subjects according to the amount actually paid. When the treasury stockis cancelled, the total par value of the shares calculated according to the par value of the shares and the number ofcancelled shares shall be debited to the "Share Capital", and the book balance of the cancelled treasury stock shallbe credited to the "Treasury Stock". The premium originally recorded in the capital surplus at the time of stock
issuance shall be offset according to the difference, and the "Capital Surplus - capital stock premium" shall bedebited. The part of the repurchase price exceeding the above offset of "Share Capital" and "Capital Surplus - capitalstock premium" shall be debited to the "Surplus Reserves" and "Profit Distribution - undistributed profits" and othersubjects in turn. If the repurchase price is lower than the share capital corresponding to the repurchased shares, thedifference between the book balance of the cancelled treasury stock and the offset share capital will be treated as anincrease in capital stock premium, and debit to the "Share Capital" according to the par value of the share capitalcorresponding to the repurchased shares, credit the "Treasury Stock" according to the book balance of the cancelledtreasury stock, and credit the "Capital Surplus - capital stock premium" according to the difference.
44. Significant accounting policy and accounting estimate change
(1) Changes in significant accounting policies
□ Applicable ? Not applicable
(2) Changes in major accounting estimates
□ Applicable ? Not applicable
45. Other
NA
VI. Taxation
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%, 16.5%, 15%, 2.5% |
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,Longterm Medical, Guilin Latex
| Winner Medical, Winner Medical (Huanggang), Winner Medical (Tianmen), Winner Medical (Jingmen), Winner Medical (Chongyang), Winner Medical (Jiayu), Qianhai Purcotton, Longterm Medical, Guilin Latex | 15.00% |
Winner Medical (Hong Kong)
| Winner Medical (Hong Kong) | 16.50% |
Hangzhou Shengyi, Xi'an Longtemu, Deqing Longterm
| Hangzhou Shengyi, Xi'an Longtemu, Deqing Longterm | See 2. Tax preference (8) |
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 2021 issued by the Leading Group Office of National High-tech EnterpriseAccreditation Administration, the Company passed the High-tech Enterprise Qualification Reexamination(Certificate No.: GR202144202494). From 2021 to 2023, corporate income tax can be paid at a preferentialtax 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, Winner Medical (Huanggang) was identified as the second batch of high-techenterprises with the certificate number GR201942002414. From 2019 to 2021, Winner Medical (Huanggang)could pay 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 Qianhai Shenzhen-Hong Kong Cooperation Zone. According to the Notice of Enterprise Income Tax Preferential Policies andPreferential Directory in Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zoneof Hengqin New Fujian Pingtan Comprehensive Experimental Area (C.S. [2014] No. 26) issued by theMinistry of Finance and State Taxation Administration, Qianhai Purcotton pays its enterprise income tax at thetax 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, Winner Medical (Jingmen) obtained the High-tech EnterpriseCertificate (Certificate No.: GR202142004475) on December 03, 2021. From 2021 to 2023, corporate incometax can be paid at a preferential tax rate of 15.00%.
(5) According to the Notice on Publicizing the List of Fifth Batch of High-tech Enterprises to be Identified in
Hubei Province in 2021 issued by the Leading Group Office of National High-tech Enterprise AccreditationAdministration on December 23, 2021, Winner Medical (Jiayu) obtained the High-tech Enterprise Certificate(Certificate No.: GR202142005582) on December 17, 2021. From 2021 to 2023, corporate income tax can bepaid at a preferential tax 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, Winner Medical (Chongyang) and Winner Medical (Tianmen)obtained the High-tech Enterprise Certificates (Certificate No.: GR202142000579, GR202142002367) onNovember 15, 2021. The prepayment of corporate income tax shall be at a rate of 15.00% in 2021.
(7) Longterm Medical was recognized as a high-tech enterprise on November 13, 2017 to pay corporate incometax at a preferential tax rate of 15% with a validity period of three years until November 13, 2020. LongtermMedical obtained an updated high-tech enterprise qualification certificate on December 1, 2020 to paycorporate income tax at a preferential tax rate of 15% with a validity period of three years until November 30,2023.
(8) Hangzhou Shengyi, Xi'an Longtemu, Deqing Longterm are all small enterprises with small profits. The partwith annual taxable income not exceeding RMB 1 million shall be reduced by 12.5% and included into thetaxable income, and the corporate income tax shall be paid at the tax rate of 20%; The part with annual taxableincome exceeding RMB 1 million but not exceeding RMB 3 million shall be reduced by 25% and includedinto the taxable income, and corporate income tax shall be paid at the rate of 20%. At present, the annualtaxable income of these three companies is less than RMB 1 million, and the actual tax rate is 2.5%.
(9) According to the Notice on Publicizing the List of First Batch of Identified High-tech Enterprises in GuangxiZhuang Autonomous Region in 2027 (G. K. G. Z [2017] No. 280), Guilin Latex was recognized as a high-techenterprise to pay corporate income tax at a preferential tax rate of 15% with a validity period of three yearsuntil July 30, 2020. Guilin Latex obtained an updated high-tech enterprise qualification certificate on October23, 2020 to pay corporate income tax at a preferential tax rate of 15% with a validity period of three years untilOctober 22, 2023.
3. Other
NA
VII. Notes to items in consolidated financial statements
1. Monetary capital
Unit: yuan
| Item | Closing Balance | Beginning balance |
Cash on hand
| Cash on hand | 125,582.80 | 65,897.39 |
Bank deposit
| Bank deposit | 4,143,197,161.70 | 4,088,546,364.65 |
Other monetary capital
| Other monetary capital | 70,345,764.26 | 185,326,064.78 |
Total
| Total | 4,213,668,508.76 | 4,273,938,326.82 |
Where: total amount depositedabroad
| Where: total amount deposited abroad | 16,799,464.52 | 11,841,008.78 |
Total amount of funds with
| Total amount of funds with | 70,122,981.84 | 185,326,064.78 |
restrictions on use due to mortgage, pledgeor freeze
Other descriptionWherein, the breakdown of monetary funds that are restricted in use due to mortgages, pledges or freezes, restricted in withdrawal dueto centralized management of funds, as well as those placed outside China with restrictions on repatriation of funds, is as follows:
| Item | Closing Balance | Beginning balance |
L/C deposit*1
| L/C deposit*1 | 50,672,072.00 | 27,597,366.13 |
Deposit for bank acceptance bill*2
| Deposit for bank acceptance bill*2 | 11,119,000.00 | - |
Performance bond*3
| Performance bond*3 | 2,354,080.27 | 2,162,025.10 |
Balance of other restricted monetary funds * 4
| Balance of other restricted monetary funds * 4 | 5,977,829.57 | 155,566,673.55 |
Total
| Total | 70,122,981.84 | 185,326,064.78 |
*1 L/C deposit refers to the deposit deposited by Winner Medical and Winner Medical (Tianmen) to for the processing of letters ofcredit.*2 Deposit for bank acceptance bill refers to the deposit deposited by Longterm Medical for issuance of acceptance bill.*3 The performance bond is the deposit deposited by Winner Medical (Hong Kong) in the bank for transactions with customers.*4 Balance of other restricted monetary funds refers to the balance of special deposit accounts for restricted non-budget units openedby Shenzhen Purcotton and PureH2B in accordance with the regulations of prepaid card issuance formulated by the Ministry ofCommerce.
2. Trading 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 | 2,726,914,556.35 | 3,130,529,709.10 |
Including:
| Including: |
Bank financial products
| Bank financial products | 1,413,871,232.59 | 1,778,361,521.42 |
Forward foreign exchange contract
| Forward foreign exchange contract | 0.00 | 6,334,756.86 |
Trust products
| Trust products | 1,313,043,323.76 | 1,345,833,430.82 |
Including:
| Including: |
Total
| Total | 2,726,914,556.35 | 3,130,529,709.10 |
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 | Proportion | Amount | Accruing proportion | Amount | Proportion | Amount | Accruing proportion | |||
Including:
| Including: |
Including:
| Including: |
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 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 | Other | |||
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 the
drawer 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 related 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: |
Accountsreceivableofprovisionfor baddebt bycombinati
| Accounts receivable of provision for bad debt by combinati | 1,056,460,600.44 | 100.00% | 53,698,391.15 | 5.08% | 1,002,762,209.29 | 816,650,641.20 | 100.00% | 41,104,051.78 | 5.03% | 775,546,589.42 |
on
Including:
| Including: |
Total
| Total | 1,056,460,600.44 | 100.00% | 53,698,391.15 | 5.08% | 1,002,762,209.29 | 816,650,641.20 | 100.00% | 41,104,051.78 | 5.03% | 775,546,589.42 |
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 1year)
| Within 1 year (including 1 year) | 1,046,576,065.98 | 52,328,803.29 | 5.00% |
1~2 years (including 2 years)
| 1~2 years (including 2 years) | 8,784,226.49 | 878,422.65 | 10.00% |
2~3 years (including 3 years)
| 2~3 years (including 3 years) | 650,385.68 | 195,115.71 | 30.00% |
3~4 years (including 4 years)
| 3~4 years (including 4 years) | 266,722.93 | 133,361.47 | 50.00% |
4~5 years (including 5 years)
| 4~5 years (including 5 years) | 102,556.66 | 82,045.33 | 80.00% |
More than 5 years
| More than 5 years | 80,642.70 | 80,642.70 | 100.00% |
Total
| Total | 1,056,460,600.44 | 53,698,391.15 |
Description of the basis for determining the combination:
Recognition criteria and description of bad debts by combination: On June 30, 2022, the Company reviewed the appropriateness ofthe provision for bad debts of receivables in the previous year according to the historical bad debt loss, and believed that the defaultprobability has a strong correlation with the aging of accounts, and the account age is still a sign of whether the credit risk of thecompany's receivables has significantly increased. Therefore, the Company's credit risk loss on June 30, 2022 is estimated based onthe aging of accounts and estimated at the original loss ratio.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 | Closing Balance |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 1,046,576,065.98 |
1~2 years
| 1~2 years | 8,784,226.49 |
2~3 years
| 2~3 years | 650,385.68 |
More than 3 years
| More than 3 years | 449,922.29 |
3~4 years
| 3~4 years | 266,722.93 |
4~5 years
| 4~5 years | 102,556.66 |
More than 5 years
| More than 5 years | 80,642.70 |
Total
| Total | 1,056,460,600.44 |
(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 | Other | |||
Provision for baddebt of accountsreceivable
| Provision for bad debt of accounts receivable | 41,104,051.78 | 18,659,980.51 | 5,879,391.59 | 186,249.55 | 53,698,391.15 |
Total
| Total | 41,104,051.78 | 18,659,980.51 | 5,879,391.59 | 186,249.55 | 53,698,391.15 |
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 |
Irrecoverable balance receivable
| Irrecoverable balance receivable | 186,249.55 |
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 related transactions |
Description of write-off accounts receivable:
(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 | 43,760,936.31 | 4.14% | 2,188,046.82 |
Second
| Second | 32,648,629.50 | 3.09% | 1,632,431.48 |
Third
| Third | 26,752,033.96 | 2.53% | 1,337,601.70 |
Fourth
| Fourth | 25,220,932.55 | 2.39% | 1,261,046.63 |
Fifth
| Fifth | 24,028,702.91 | 2.27% | 1,201,435.15 |
Total
| Total | 152,411,235.23 | 14.42% |
(5) Accounts receivable derecognized due to transfer of financial assetsNA
(6) Amount of assets and liabilities formed by transferring accounts receivables and continuing
involvementNAOther description:
6. Amounts receivable financing
Unit: yuan
| Item | Closing Balance | Beginning balance |
Notes receivable - banker's acceptance bill
| Notes receivable - banker's acceptance bill | 29,770,412.07 | 9,940,272.21 |
Total
| Total | 29,770,412.07 | 9,940,272.21 |
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:
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 | 419,561,887.69 | 99.71% | 104,201,209.67 | 94.33% |
1~2 years
| 1~2 years | 1,225,327.68 | 0.29% | 6,261,384.71 | 5.67% |
Total
| Total | 420,787,215.37 | 110,462,594.38 |
Reasons for non-timely settlement of important advances from customers with the aging more than 1 year:
Not applicable.
(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 | 233,196,958.77 | 55.42% |
Second
| Second | 26,352,196.69 | 6.26% |
Third
| Third | 19,256,447.50 | 4.58% |
Fourth
| Fourth | 9,237,549.34 | 2.20% |
Fifth
| Fifth | 5,686,389.90 | 1.35% |
Total
| Total | 293,729,542.20 | 69.81% |
Other description:
8. Other receivables
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other receivables
| Other receivables | 321,798,808.08 | 329,179,077.01 |
Total
| Total | 321,798,808.08 | 329,179,077.01 |
(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 Heyuan Winner
| Compensation for investment and construction project of Heyuan Winner | 233,655,320.00 | 238,655,320.00 |
Margin and deposit
| Margin and deposit | 110,776,324.02 | 112,419,848.22 |
Export drawback
| Export drawback | 7,309,079.43 |
Employee pretty cash
| Employee pretty cash | 4,325,411.77 | 3,238,544.33 |
Other
| Other | 25,445,142.44 | 15,766,563.91 |
Total
| Total | 374,202,198.23 | 377,389,355.89 |
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 1,2022
| Balance on January 1, 2022 | 36,469,649.34 | 11,740,629.54 | 48,210,278.88 |
Balance on January 1,2022 in the currentperiod
| Balance on January 1, 2022 in the current period |
Accrual in currentperiod
| Accrual in current period | 5,306,099.38 | 5,306,099.38 |
Reversal in currentperiod
| Reversal in current period | 1,112,988.11 | 1,112,988.11 |
Balance on June 30,2022
| Balance on June 30, 2022 | 40,662,760.61 | 11,740,629.54 | 52,403,390.15 |
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable ? Not applicable
Disclosure by aging
Unit: yuan
| Aging | Closing Balance |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 44,171,307.73 |
1~2 years
| 1~2 years | 27,133,898.82 |
2~3 years
| 2~3 years | 244,245,037.51 |
More than 3 years
| More than 3 years | 58,651,954.17 |
3~4 years
| 3~4 years | 15,598,377.40 |
4~5 years
| 4~5 years | 34,010,114.42 |
More than 5 years
| More than 5 years | 9,043,462.35 |
Total
| Total | 374,202,198.23 |
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 | Other | |||
| Provision for bad debts of other receivables | 48,210,278.88 | 5,306,099.38 | 1,112,988.11 | 52,403,390.15 |
Total
| Total | 48,210,278.88 | 5,306,099.38 | 1,112,988.11 | 52,403,390.15 |
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 related 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 | 233,655,320.00 | 2-3 | 62.44% | 35,048,298.00 |
Second
| Second | Receivable advance payments | 5,870,314.77 | 1-2 | 1.57% | 5,870,314.77 |
Third
| Third | Margin and deposit | 5,088,270.42 | 1-2 | 1.36% | 254,413.51 |
Fourth
| Fourth | Margin and deposit | 2,746,332.73 | 1-2 | 0.73% | 137,316.64 |
Fifth
| Fifth | Margin and deposit | 2,311,115.80 | 1-2 | 0.62% | 115,555.79 |
Total
| Total | 249,671,353.72 | 66.72% | 41,425,898.71 |
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 |
Not applicable.
7) Other receivables derecognized due to transfer of financial assets
Not applicable.
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvementNot applicable.Other description:
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 | 340,448,507.55 | 10,087,607.17 | 330,360,900.38 | 250,762,666.63 | 5,117,956.28 | 245,644,710.35 |
Work in process
| Work in process | 177,205,514.74 | 5,233,445.24 | 171,972,069.50 | 172,991,958.16 | 4,599,718.11 | 168,392,240.05 |
Merchandiseinventory
| Merchandise inventory | 1,387,049,883.22 | 126,935,379.76 | 1,260,114,503.46 | 1,256,964,242.78 | 100,692,345.17 | 1,156,271,897.61 |
Semi-finishedproducts shippedin transit
| Semi-finished products shipped in transit | 29,319,155.18 | 29,319,155.18 | 16,843,633.88 | 16,843,633.88 |
Low priced andeasily wornarticles
| Low priced and easily worn articles | 17,293,152.94 | 4,768.48 | 17,288,384.46 | 10,226,415.09 | 1,852.99 | 10,224,562.10 |
Total
| Total | 1,951,316,213.63 | 142,261,200.65 | 1,809,055,012.98 | 1,707,788,916.54 | 110,411,872.55 | 1,597,377,043.99 |
(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 | Other | Reversal or write-back | Other | |||
Raw materials
| Raw materials | 5,117,956.28 | 10,629,905.21 | 5,660,254.32 | 10,087,607.17 |
Work in process
| Work in process | 4,599,718.11 | 4,963,356.07 | 4,329,628.94 | 5,233,445.24 |
Merchandiseinventory
| Merchandise inventory | 100,692,345.17 | 79,537,814.77 | 53,294,780.18 | 126,935,379.76 |
Low priced andeasily wornarticles
| Low priced and easily worn articles | 1,852.99 | 5,015.13 | 2,099.64 | 4,768.48 |
Total
| Total | 110,411,872.55 | 95,136,091.18 | 63,286,763.08 | 142,261,200.65 |
(3) Description of ending balance of inventory containing the capitalized amount of borrowing costs
(4) Description of current amortization amount of contract performance cost
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 impairment 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 impairment 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 | 761,415.68 | 733,984.30 |
Interest on fixed deposit / large deposit
| Interest on fixed deposit / large deposit | 67,754,605.45 | 50,158,601.37 |
VAT input tax to be deducted / uncertifiedinput tax
| VAT input tax to be deducted / uncertified input tax | 15,059,421.72 | 43,055,676.36 |
Prepaid corporate income tax
| Prepaid corporate income tax | 3,513,266.27 | 17,873,716.95 |
Unamortized expenses
| Unamortized expenses | 26,395,912.04 | 5,174,471.98 |
Other
| Other | 2,598,416.58 | 1,763,374.60 |
Total
| Total | 116,083,037.74 | 118,759,825.56 |
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 1,2022 in the currentperiod
| Balance on January 1, 2022 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 1,2022 in the currentperiod
| Balance on January 1, 2022 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 1,2022 in the currentperiod
| Balance on January 1, 2022 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 continuinginvolvementOther description:
17. Long-term equity investments
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 | Other | ||||
I. Cooperative enterprise
I. Cooperative enterpriseII. Joint venture
II. Joint ventureChengduWinner
| Chengdu Winner | 16,949,801.24 | 2,408,209.89 | 19,358,011.13 |
Subtotal
| Subtotal | 16,949,801.24 | 2,408,209.89 | 19,358,011.13 |
Total
| Total | 16,949,801.24 | 2,408,209.89 | 19,358,011.13 |
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
| Item | 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 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 | 1,924,347,463.68 | 1,477,320,848.63 |
Total
| Total | 1,924,347,463.68 | 1,477,320,848.63 |
(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 | 995,105,302.17 | 1,150,719,865.14 | 24,268,054.46 | 125,370,729.10 | 2,295,463,950.87 |
2. Amount
increased in currentperiod
| 2. Amount increased in current period | 327,519,322.75 | 285,385,530.40 | 6,410,989.58 | 37,546,834.23 | 656,862,676.96 |
(1) Purchase
| (1) Purchase | 14,800,560.38 | 126,644,435.06 | 2,563,730.54 | 17,827,298.19 | 161,836,024.17 |
(2) Transfer from
construction inprogress
| (2) Transfer from construction in progress | 17,062,082.99 | 9,605,229.66 | 292,035.40 | 26,959,348.05 |
(3) Increase by
businesscombination
| (3) Increase by business combination | 295,656,679.38 | 149,135,865.68 | 3,847,259.04 | 19,427,500.64 | 468,067,304.74 |
3. Amount
decreased in currentperiod
| 3. Amount decreased in current period | 5,602,517.04 | 11,022,972.08 | 2,039,488.03 | 4,039,706.83 | 22,704,683.98 |
(1) Disposal or
scrap
| (1) Disposal or scrap | 5,602,517.04 | 11,022,972.08 | 2,039,488.03 | 4,039,706.83 | 22,704,683.98 |
4. Closing Balance
| 4. Closing Balance | 1,317,022,107.88 | 1,425,082,423.46 | 28,639,556.01 | 158,877,856.50 | 2,929,621,943.85 |
II. Accumulateddepreciation
| II. Accumulated depreciation |
1. Beginning
balance
| 1. Beginning balance | 236,817,072.10 | 404,994,040.98 | 12,158,907.47 | 56,370,318.49 | 710,340,339.04 |
2. Amount
increased in currentperiod
| 2. Amount increased in current period | 52,378,173.52 | 122,253,316.39 | 3,844,345.66 | 17,476,518.45 | 195,952,354.02 |
(1) Accrual
| (1) Accrual | 21,744,316.91 | 52,425,745.03 | 1,136,872.10 | 9,239,553.57 | 84,546,487.61 |
(2) Increase by
businesscombination
| (2) Increase by business combination | 30,633,856.61 | 69,827,571.36 | 2,707,473.56 | 8,236,964.88 | 111,405,866.41 |
3. Amount
decreased in currentperiod
| 3. Amount decreased in current period | 2,106,887.24 | 2,501,836.59 | 1,791,342.77 | 1,245,263.24 | 7,645,329.84 |
(1) Disposal or
scrap
| (1) Disposal or scrap | 2,106,887.24 | 2,501,836.59 | 1,791,342.77 | 1,245,263.24 | 7,645,329.84 |
| 4. Closing Balance | 287,088,358.38 | 524,745,520.78 | 14,211,910.36 | 72,601,573.70 | 898,647,363.22 |
III. Provision forimpairment
| III. Provision for impairment |
1. Beginning
balance
| 1. Beginning balance | 45,682,191.02 | 61,985,265.65 | 135,306.53 | 107,802,763.20 |
2. Amount
increased in currentperiod
| 2. Amount increased in current period | 1,346,409.85 | 0.00 | 0.00 | 1,346,409.85 |
(1) Accrual
| (1) Accrual | 1,346,409.85 | 1,346,409.85 |
3. Amount
decreased in currentperiod
| 3. Amount decreased in current period | 2,519,194.81 | 2,861.29 | 0.00 | 0.00 | 2,522,056.10 |
(1) Disposal or
scrap
| (1) Disposal or scrap | 2,519,194.81 | 2,861.29 | 2,522,056.10 |
4. Closing Balance
| 4. Closing Balance | 43,162,996.21 | 63,328,814.21 | 0.00 | 135,306.53 | 106,627,116.95 |
IV. Book value
| IV. Book value |
1. Ending book
value
| 1. Ending book value | 986,770,753.29 | 837,008,088.47 | 14,427,645.65 | 86,140,976.27 | 1,924,347,463.68 |
2. Beginning book
value
| 2. Beginning book value | 712,606,039.05 | 683,740,558.51 | 12,109,146.99 | 68,865,104.08 | 1,477,320,848.63 |
(2) Fixed assets that are temporarily idle
Unit: yuan
| Item | Original book value | Accumulated depreciation | Provision for impairment | Book value | Remark |
Machineryequipment
| Machinery equipment | 745,242.33 | 611,498.76 | 84,482.78 | 49,260.79 | Not needed for now |
Electricalequipment
| Electrical equipment | 14,664.80 | 12,641.28 | 2,023.52 | Not needed for now |
Total
| Total | 759,907.13 | 624,140.04 | 84,482.78 | 51,284.31 |
(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 Phase II Spunlace Non-woven Fabric of Tianmen Winner
| Main plant of Phase II Spunlace Non-woven Fabric of Tianmen Winner | 15,995,217.15 | The formalities have not yet been completed |
Tianmen Winner Medical Building 1stFloor
| Tianmen Winner Medical Building 1st Floor | 9,316,365.54 | The formalities have not yet been completed |
Tianmen Winner Medical Building 2ndFloor
| Tianmen Winner Medical Building 2nd Floor | 5,609,288.05 | The formalities have not yet been completed |
Tianmen Winner No.3 Workshop forfinished products (Mask Workshop)
| Tianmen Winner No.3 Workshop for finished products (Mask Workshop) | 3,451,995.65 | 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 | 531,760,298.29 | 216,096,622.30 |
Total
| Total | 531,760,298.29 | 216,096,622.30 |
(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 | 97,029,056.67 | 97,029,056.67 | 28,206,760.19 | 28,206,760.19 |
HuanggangWinnerEngineeringProject
| Huanggang Winner Engineering Project | 69,122,685.24 | 69,122,685.24 | 264,970.51 | 264,970.51 |
Jiayu Winnerengineeringproject
| Jiayu Winner engineering project | 15,925,565.46 | 15,925,565.46 | 4,821,946.07 | 4,821,946.07 |
Wuhan Winnerengineeringproject
| Wuhan Winner engineering project | 293,116,022.30 | 293,116,022.30 | 75,214,244.85 | 75,214,244.85 |
Jingmen WinnerEngineeringProject
| Jingmen Winner Engineering Project | 18,469,250.42 | 18,469,250.42 |
Other equipmentto be installedand sporadicprojects
| Other equipment to be installed and sporadic projects | 39,558,126.04 | 1,460,407.84 | 38,097,718.20 | 109,049,108.52 | 1,460,407.84 | 107,588,700.68 |
Total
| Total | 533,220,706.13 | 1,460,407.84 | 531,760,298.29 | 217,557,030.14 | 1,460,407.84 | 216,096,622.30 |
(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 |
HuanggangWinner-Production Line4 andLine 5forSanitaryPads
| Huanggang Winner - Production Line 4 and Line 5 for Sanitary Pads | 50,000,000.00 | 20,927,430.33 | 20,927,430.33 | 41.85% | 45.00% | Other |
HuanggangWinner-Compre
| Huanggang Winner - Compre | 90,000,000.00 | 48,195,254.91 | 48,195,254.91 | 53.55% | 50.00% | Other |
hensiveWorkshop
JingmenWinner-AutomatedPlant -Southwest
| Jingmen Winner - Automated Plant - Southwest | 60,000,000.00 | 15,869,748.44 | 15,869,748.44 | 26.45% | 40.00% | Other |
TianmenWinner-Intelligent 3D e-commercewarehouse forpurecottonbusiness
| Tianmen Winner - Intelligent 3D e-commerce warehouse for pure cotton business | 86,600,000.00 | 7,096,181.97 | 34,454,460.85 | 41,550,642.82 | 47.98% | 50.00% | Other |
TianmenWinner-Spunlace Line 7
| Tianmen Winner - Spunlace Line 7 | 73,500,000.00 | 10,817,198.26 | 44,566,875.97 | 55,384,074.23 | 75.35% | 80.00% | Other |
JiayuWinner- NewFactoryProject
| Jiayu Winner - New Factory Project | 980,000,000.00 | 4,810,884.12 | 10,564,828.48 | 15,375,712.60 | 1.57% | 2.00% | Other |
WuhanWinnerPhase II1-3SortingCenterProject
| Wuhan Winner Phase II 1-3 Sorting Center Project | 268,000,000.00 | 10,000,000.00 | 119,908,256.93 | 129,908,256.93 | 48.47% | 50.00% | Other |
WuhanWinnerPhase IIMainProject
| Wuhan Winner Phase II Main Project | 110,871,722.11 | 49,892,274.96 | 30,515,152.88 | 80,407,427.84 | 72.52% | 75.00% | Other |
Total
| Total | 1,718,971,722.11 | 82,616,539.31 | 325,002,008.79 | 0.00 | 0.00 | 407,618,548.10 |
(3) Provision for impairment of construction in progress in current period
Unit: yuan
| Item | Current accrued amount | Reason for accrual |
Other description
(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) 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 | 1,046,616,109.25 | 1,046,616,109.25 |
2. Amount increased in current period
| 2. Amount increased in current period | 128,675,744.76 | 128,675,744.76 |
(1) New lease
| (1) New lease | 127,983,810.86 | 127,983,810.86 |
(2) Increase by business combination
| (2) Increase by business combination | 691,933.90 | 691,933.90 |
3. Amount decreased in current period
| 3. Amount decreased in current period | 204,890,720.86 | 204,890,720.86 |
Disposal
| Disposal | 204,890,720.86 | 204,890,720.86 |
4. Closing Balance
| 4. Closing Balance | 970,401,133.15 | 970,401,133.15 |
II. Accumulated depreciation
| II. Accumulated depreciation |
1. Beginning balance
| 1. Beginning balance | 514,880,665.81 | 514,880,665.81 |
2. Amount increased in current period
| 2. Amount increased in current period | 114,858,188.74 | 114,858,188.74 |
(1) Accrual
| (1) Accrual | 114,777,463.11 | 114,777,463.11 |
(2) Increase by business combination
| (2) Increase by business combination | 80,725.63 | 80,725.63 |
3. Amount decreased in current period
| 3. Amount decreased in current period | 132,957,308.47 | 132,957,308.47 |
(1) Disposal
| (1) Disposal | 132,957,308.47 | 132,957,308.47 |
4. Closing Balance
| 4. Closing Balance | 496,781,546.08 | 496,781,546.07 |
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 | 473,619,587.07 | 473,619,587.08 |
2. Beginning book value
| 2. Beginning book value | 531,735,443.44 | 531,735,443.44 |
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 | Client relations | Total |
I. Originalbook value
| I. Original book value |
1. Beginning
| 1. Beginning | 266,174,018. | 1,573,637.86 | 1,710,590.99 | 57,653,383.2 | 10,228,226.5 | 337,339,857. |
| balance | 88 | 9 | 3 | 55 |
2. Amount
increased incurrentperiod
| 2. Amount increased in current period | 147,702,289.42 | 296,866,627.89 | 5,390.00 | 48,890,133.08 | 61,750,000.00 | 555,214,440.39 |
(1) Purchase
| (1) Purchase | 28,460,748.00 | 25,829,859.17 | 54,290,607.17 |
(2) Internal
R&D
| (2) Internal R&D |
(3) Increase
by businesscombination
| (3) Increase by business combination | 119,241,541.42 | 296,866,627.89 | 5,390.00 | 23,060,273.91 | 61,750,000.00 | 500,923,833.22 |
3. Amount
decreased incurrentperiod
| 3. Amount decreased in current period |
(1) Disposal
| (1) Disposal |
4. Closing
Balance
| 4. Closing Balance | 413,876,308.30 | 298,440,265.75 | 1,715,980.99 | 106,543,516.37 | 10,228,226.53 | 61,750,000.00 | 892,554,297.94 |
II. Accumulatedamortization
| II. Accumulated amortization |
1. Beginning
balance
| 1. Beginning 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 |
2. Amount
increased incurrentperiod
| 2. Amount increased in current period | 12,887,021.92 | 4,981,841.98 | 7,046.52 | 4,013,018.65 | 21,888,929.07 |
(1) Accrual
| (1) Accrual | 3,418,167.85 | 4,650,458.67 | 6,700.00 | 3,188,981.83 | 11,264,308.35 |
(2) Increase
by businesscombination
| (2) Increase by business combination | 9,468,854.07 | 331,383.31 | 346.52 | 824,036.82 | 10,624,620.72 |
3. Amount
decreased incurrentperiod
| 3. Amount decreased in current period |
(1) Disposal
| (1) Disposal |
4. Closing
Balance
| 4. Closing Balance | 40,926,139.10 | 6,229,296.37 | 1,681,904.18 | 34,462,329.79 | 10,228,226.53 | 93,527,895.97 |
III. Provision forimpairment
| III. Provision for impairment |
1. Beginning
balance
| 1. Beginning balance |
2. Amount
increased incurrentperiod
| 2. Amount increased in current period |
(1) Accrual
| (1) Accrual |
3. Amount
decreased incurrentperiod
| 3. Amount decreased in current period |
(1) Disposal
| (1) Disposal |
4. Closing
Balance
| 4. Closing Balance |
IV. Bookvalue
| IV. Book value |
1. Ending
book value
| 1. Ending book value | 372,950,169.20 | 292,210,969.38 | 34,076.81 | 72,081,186.58 | 61,750,000.00 | 799,026,401.97 |
2. Beginning
book value
| 2. Beginning book value | 238,134,901.70 | 326,183.47 | 35,733.33 | 27,204,072.15 | 265,700,890.65 |
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 | ||||
| Beginning balance | Internal development expenditure | Other | Recognized as intangible assets | Transfer to current profit and loss | Closing Balance | |||
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 | Closing Balance | ||||
Businesscombination notunder commoncontrol -Acquisition ofMalaysia Winner
| Business combination not under common control - Acquisition of Malaysia Winner | 2,681,232.09 | 2,681,232.09 |
Businesscombination notunder commoncontrol -Acquisition ofLongterm Health
| Business combination not under common control - Acquisition of Longterm Health | 390,417,857.50 | 390,417,857.50 |
Businesscombination notunder commoncontrol -Acquisition ofGuilin Latex
| Business combination not under common control - Acquisition of Guilin Latex | 198,467,513.68 | 198,467,513.68 |
Total
| Total | 2,681,232.09 | 588,885,371.18 | 591,566,603.27 |
(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 | Closing Balance | ||||
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 unamortized expenses
Unit: yuan
| Item | Beginning balance | Amount increased in current period | Amortization amount in current period | Other decreases | Closing Balance |
Decoration cost
| Decoration cost | 43,725,887.73 | 22,232,950.85 | 18,937,489.95 | 283,018.87 | 46,738,329.76 |
Decorationexpenses foroperating leasedfixed assets
| Decoration expenses for operating leased fixed assets | 131,059,883.10 | 35,810,406.28 | 28,613,763.85 | 29,150,971.61 | 109,105,553.92 |
Total
| Total | 174,785,770.83 | 58,043,357.13 | 47,551,253.80 | 29,433,990.48 | 155,843,883.68 |
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 forimpairment of assets
| Provision for impairment of assets | 344,543,642.72 | 62,442,938.37 | 308,989,374.25 | 55,407,470.14 |
Unrealized profit ofinternal transaction
| Unrealized profit of internal transaction | 114,388,686.49 | 23,660,535.47 | 114,388,686.49 | 23,660,535.47 |
Deductible loss
| Deductible loss | 113,962,501.30 | 28,272,447.37 | 60,670,842.73 | 15,167,710.69 |
Dismission welfare
| Dismission welfare | 2,315,103.48 | 347,265.52 | 2,315,103.48 | 347,265.52 |
Deferred income
| Deferred income | 99,203,761.08 | 16,109,546.16 | 109,625,401.82 | 17,710,015.89 |
Member points
| Member points | 10,309,457.59 | 2,577,364.40 | 10,319,207.78 | 2,579,801.95 |
Expected return,Accrued expenses
| Expected return, Accrued expenses | 3,101,202.39 | 775,300.60 | 1,881,955.47 | 410,114.78 |
Advertising expenses inexcess of the taxdeductible limit
| Advertising expenses in excess of the tax deductible limit | 15,439,719.70 | 2,315,957.95 | 39,046,992.53 | 5,857,048.88 |
Equity incentive fee
| Equity incentive fee | 10,509,464.48 | 1,576,419.67 |
Total
| Total | 703,264,074.75 | 136,501,355.84 | 657,747,029.03 | 122,716,382.99 |
(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 | |
Asset evaluationincrement for businesscombination not undercommon control
| Asset evaluation increment for business combination not under common control | 440,280,645.62 | 66,042,096.84 |
Changes in fair value oftrading financial assets
| Changes in fair value of trading financial assets | 30,794,000.09 | 4,636,565.77 | 27,097,991.08 | 4,242,794.56 |
Depreciation of fixedassets
| Depreciation of fixed assets | 43,558,481.15 | 7,702,940.68 | 52,132,715.97 | 9,094,365.12 |
Asset evaluationincrement restructure
| Asset evaluation increment restructure | 11,991,604.40 | 1,798,740.66 |
Total
| Total | 526,624,731.26 | 80,180,343.95 | 79,230,707.05 | 13,337,159.68 |
(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 | 136,501,355.84 | 122,716,382.99 |
Deferred income taxliabilities
| Deferred income tax liabilities | 80,180,343.95 | 13,337,159.68 |
(4) Details of unrecognized deferred income tax assets
Unit: yuan
| Item | Closing Balance | Beginning balance |
Deductible loss
| Deductible loss | 259,682,230.82 | 206,266,023.76 |
Provision for impairment of assets andamortization of depreciation
| Provision for impairment of assets and amortization of depreciation | 11,390,552.21 | 5,372,991.42 |
Total
| Total | 271,072,783.03 | 211,639,015.18 |
(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 | 13,908,108.66 | 14,402,997.46 |
2023
| 2023 | 25,574,944.59 | 25,574,944.59 |
2024
| 2024 | 48,794,287.92 | 48,810,687.88 |
2025
| 2025 | 44,675,230.79 | 44,934,541.40 |
2026
| 2026 | 65,783,169.18 | 65,783,169.18 |
2027
| 2027 | 53,948,512.86 |
No maturity date
| No maturity date | 6,997,976.82 | 6,759,683.25 |
Total
| Total | 259,682,230.82 | 206,266,023.76 |
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
| Advance project | 121,928,531.03 | 121,928,531.03 | 115,571,001.80 | 115,571,001.80 |
payment /equipmentpurchasepayment /advance storeengineering anddecorationpaymentAdvance equitypayment forPingan MedicalDevice
| Advance equity payment for Pingan Medical Device | 130,384,300.00 | 130,384,300.00 |
Total
| Total | 252,312,831.03 | 252,312,831.03 | 115,571,001.80 | 115,571,001.80 |
Other description:
32. Short-term debt
(1) Classification of short-term loans
Unit: yuan
| Item | Closing Balance | Beginning balance |
Guaranteed borrowing
| Guaranteed borrowing | 10,000,000.00 |
Debt of honor
| Debt of honor | 106,244,942.26 |
Bill Discount Credit
| Bill Discount Credit | 930,000,000.00 |
Assurance + Mortgage
| Assurance + Mortgage | 95,000,000.00 |
Borrowing interest
| Borrowing interest | 231,791.67 |
Total
| Total | 1,141,476,733.93 |
Description of classification of short-term borrowing:
(2) short-term loans unpaid overdue
The total amount of overdue short-term borrowings at the end of the period is RMB 0.00, 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. Trading financial 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 | 146,065,963.57 | 36,200,130.04 |
Total
| Total | 146,065,963.57 | 36,200,130.04 |
The total amount of notes payable due and have not been paid at the end of current period is RMB 0.00.
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) | 958,493,036.41 | 714,681,791.55 |
1~2 years (including 2 years)
| 1~2 years (including 2 years) | 24,845,986.18 | 16,519,858.09 |
2~3 years (including 3 years)
| 2~3 years (including 3 years) | 9,430,201.31 | 2,213,757.41 |
More than 3 years
| More than 3 years | 4,191,523.06 | 1,106,083.55 |
Total
| Total | 996,960,746.96 | 734,521,490.60 |
(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 |
Other description:
38. Contract liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance |
Customer consideration received
| Customer consideration received | 310,485,345.15 | 330,856,457.64 |
Member points
| Member points | 10,309,457.59 | 10,319,207.78 |
Total
| Total | 320,794,802.74 | 341,175,665.42 |
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 | 174,579,726.18 | 774,710,310.27 | 743,921,517.69 | 205,368,518.76 |
II. Welfare afterdismission - definedcontribution plan
| II. Welfare after dismission - defined contribution plan | 7,786,354.86 | 51,303,324.94 | 51,595,869.62 | 7,493,810.18 |
III. Dismission welfare
| III. Dismission welfare | 2,315,103.48 | 5,834,517.52 | 4,734,075.83 | 3,415,545.17 |
Total
| Total | 184,681,184.52 | 831,848,152.73 | 800,251,463.14 | 216,277,874.11 |
(2) Presentation of short-term compensation
Unit: yuan
| Item | Beginning balance | Increase in current period | Decrease in current period | Closing Balance |
1. Salary, bonus,
allowance and subsidy
| 1. Salary, bonus, allowance and subsidy | 171,917,627.57 | 728,899,297.88 | 696,616,036.73 | 204,200,888.72 |
2. Welfare expenses for
employees
| 2. Welfare expenses for employees | 1,898,566.41 | 5,878,955.09 | 7,354,221.09 | 423,300.41 |
3. Social security
| 3. Social security | 583,615.98 | 24,672,967.96 | 24,835,303.12 | 421,280.82 |
Including: medicalinsurance premium
| Including: medical insurance premium | 391,727.18 | 22,276,564.46 | 22,422,720.49 | 245,571.15 |
Industrialinjury insurancepremium
| Industrial injury insurance premium | 127,114.57 | 1,175,408.69 | 1,180,066.59 | 122,456.67 |
Birthinsurance premium
| Birth insurance premium | 64,774.23 | 1,220,994.81 | 1,232,516.04 | 53,253.00 |
4. Housing accumulation
fund
| 4. Housing accumulation fund | 5,184.00 | 14,909,362.35 | 14,872,755.35 | 41,791.00 |
5. Union dues and staff
education fund
| 5. Union dues and staff education fund | 174,732.22 | 349,726.99 | 243,201.40 | 281,257.81 |
Total
| Total | 174,579,726.18 | 774,710,310.27 | 743,921,517.69 | 205,368,518.76 |
(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 | 7,669,900.83 | 49,647,179.30 | 49,928,202.75 | 7,388,877.38 |
2. Unemployment
insurance premium
| 2. Unemployment insurance premium | 116,454.03 | 1,656,145.64 | 1,667,666.87 | 104,932.80 |
Total
| Total | 7,786,354.86 | 51,303,324.94 | 51,595,869.62 | 7,493,810.18 |
Other description
40. Taxes payable
Unit: yuan
| Item | Closing Balance | Beginning balance |
Added value tax
| Added value tax | 47,691,221.78 | 4,177,794.77 |
Corporate income tax
| Corporate income tax | 118,878,264.76 | 80,626,257.39 |
Individual income tax
| Individual income tax | 3,136,081.77 | 2,915,638.55 |
Urban maintenance and construction tax
| Urban maintenance and construction tax | 4,262,872.30 | 484,733.91 |
Housing property tax
| Housing property tax | 3,050,422.73 | 2,544,714.33 |
Education surcharge and local educationsurcharge
| Education surcharge and local education surcharge | 3,239,295.22 | 365,615.00 |
Land use tax
| Land use tax | 1,370,278.75 | 1,462,224.90 |
Stamp duty
| Stamp duty | 654,514.96 | 1,260,046.05 |
Other
| Other | 1,207,225.97 | 22,044.78 |
Total
| Total | 183,490,178.24 | 93,859,069.68 |
Other description
41. Other payables
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other payables
| Other payables | 451,898,553.42 | 443,946,028.46 |
Total
| Total | 451,898,553.42 | 443,946,028.46 |
(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 |
Intercourse funds of the third parties
| Intercourse funds of the third parties | 21,515,400.83 | 20,895,856.79 |
Margin and deposit
| Margin and deposit | 170,181,127.48 | 162,215,690.65 |
Provision of commission
| Provision of commission | 30,615,588.75 | 76,615,789.42 |
Freight, advertising expenses and otheraccrued expenses
| Freight, advertising expenses and other accrued expenses | 202,730,644.78 | 176,844,834.39 |
Other
| Other | 26,855,791.58 | 7,373,857.21 |
Total
| Total | 451,898,553.42 | 443,946,028.46 |
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 | 220,429,023.53 | 216,181,531.82 |
Long-term payroll payable due within oneyear
| Long-term payroll payable due within one year | 373,656.36 |
Total
| Total | 220,802,679.89 | 216,181,531.82 |
Other description:
44. Other current liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance |
Refund payable
| Refund payable | 3,101,202.39 | 2,012,198.90 |
Output tax to be transferred
| Output tax to be transferred | 23,949,973.07 | 22,153,201.60 |
Total
| Total | 27,051,175.46 | 24,165,400.50 |
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 |
Mortgage
| Mortgage | 28,000,000.00 |
Total
| Total | 28,000,000.00 |
Description of classification of long-term borrowing:
Longterm Health and Zhejiang Deqing Rural Commercial Bank Co., Ltd. signed a long-term loan contract with the contract number8811120180040452 on December 2018 with a loan amount of RMB28 million and a maturity date on December 20, 2023. It is agreedthat the interest will be paid in installments and the principal will be repaid at maturity with the borrowing rate of 4.90%. The mortgagedamount is RMB53,712,324.86, and the mortgage contract numbered 8811320210000908 is signed with the real estate certificate [No.Zhejiang (2021) Deqing County Real Estate No. 0001524] of its own No.1-6 Building. The loan has not been repaid as of June 30,2022.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 liabilities
Other description
47. Lease liabilities
Unit: yuan
| Item | Closing Balance | Beginning balance |
Lease payments
| Lease payments | 358,823,599.66 | 431,547,562.69 |
Unrecognized financing expenses
| Unrecognized financing expenses | （42,297,662.69） | （49,738,637.60） |
Total
| Total | 316,525,936.97 | 381,808,925.09 |
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 |
Retirement welfare and Dismissalpayments
| Retirement welfare and Dismissal payments | 9,303,066.32 |
Total
| Total | 9,303,066.32 |
(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 | 109,625,401.82 | 1,349,807.52 | 11,771,448.26 | 99,203,761.08 | Government subsidies related to assets |
Total
| Total | 109,625,401.82 | 1,349,807.52 | 11,771,448.26 | 99,203,761.08 |
Projects involving government subsidies:
Unit: yuan
| Liability item | Beginning balance | Amount of additional subsidy in current period | Amount included in current non-operating income | Amount included in other income in current period | Amount offsetting the cost in the current period | Other changes | Closing Balance | Asset/income related |
Subsidy forHuanggangChibiAvenuedemolitioncompanyplanningchange -HuanggangWinner
| Subsidy for Huanggang Chibi Avenue demolition company planning change - Huanggang Winner | 2,377,019.38 | 52,822.64 | 2,324,196.74 | Asset related |
Subsidyfunds formunicipalgovernmentprojectinfrastructureconstruction- ChongyangWinner
| Subsidy funds for municipal government project infrastructure construction - Chongyang Winner | 8,856,862.50 | 206,775.00 | 8,650,087.50 | Asset related | ||||
| Subsidy funds for land and subsidy funds for sewage treatment - Jiayu Winner | 9,802,666.67 | 203,416.66 | 9,599,250.01 | Asset related |
Automatictransformation ofsurgicalconsumablesproductionline - theCompany
| Automatic transformation of surgical consumables production line - the Company | 1,023,000.00 | 93,000.00 | 930,000.00 | Asset related |
| Second batch of traditional industry transformation subsidy in 2017 - Huanggang Winner | 1,098,165.26 | 104,587.14 | 993,578.12 | Asset related |
Technicalinnovationsubsidy forthePurcottonPhase IIExpansionProject -JingmenWinner
| Technical innovation subsidy for the Purcotton Phase II Expansion Project - Jingmen Winner | 4,325,520.65 | 83,183.10 | 4,242,337.55 | Asset related |
2018provincialtraditionalindustrytransformation andupgradingspecial fundsfor thesecond batchofliquidationblock fundsubsidies -JiayuWinner
| 2018 provincial traditional industry transformation and upgrading special funds for the second batch of liquidation block fund subsidies - Jiayu Winner | 1,339,047.62 | 26,428.57 | 1,312,619.05 | Asset related |
Provincialtraditionalindustrytransformation andupgradingspecial fundsfor the firstbatch ofblock fundsallocationplan inTianmenCity in 2019- TianmenWinner
| Provincial traditional industry transformation and upgrading special funds for the first batch of block funds allocation plan in Tianmen City in 2019 - Tianmen Winner | 1,024,137.94 | 68,275.86 | 955,862.08 | Asset related |
2020technicaltransformation project ofShenzhenCOVID-19epidemicpreventionand controlkey materialproductionenterprises -theCompany
| 2020 technical transformation project of Shenzhen COVID-19 epidemic prevention and control key material production enterprises - the Company | 17,500,000.00 | 1,000,000.00 | 16,500,000.00 | Asset related |
| Production subsidy for COVID-19 epidemic prevention materials in 2020 - Huanggang Winner | 3,420,000.00 | 3,420,000.00 | 0 | Asset related |
Surgicalgownproductionline projectsubsidy -ChongyangWinner
| Surgical gown production line project subsidy - Chongyang Winner | 3,279,279.27 | 216,216.22 | 3,063,063.05 | Asset related |
Fundssubsidy forpurchasingepidemicpreventionequipment inkeyenterprisesof "ThreeBatches" -ChongyangWinner
| Funds subsidy for purchasing epidemic prevention equipment in key enterprises of "Three Batches" - Chongyang Winner | 4,979,327.73 | 281,848.74 | 4,697,478.99 | Asset 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 | 7,126,566.91 | 291,144.36 | 6,835,422.55 | Asset related |
Subsidy ofCOVID-19epidemicpreventionand controlmaterialsproductionenterprisefor capacity
| Subsidy of COVID-19 epidemic prevention and control materials production enterprise for capacity | 2,779,116.66 | 295,860.16 | 2,483,256.50 | Asset related |
expansion &technicalupgradingproject -WuhanWinner
Subsidy forpurchasingequipment inkeyenterprise"ThreeBatches" atprovinciallevels -HuanggangWinner
| Subsidy for purchasing equipment in key enterprise "Three Batches" at provincial levels - Huanggang Winner | 2,522,692.27 | 2,522,692.27 | 0 | Asset related |
2020 specialfunds for thehigh-qualitydevelopmentofmanufacturing -HuanggangWinner
| 2020 special funds for the high-quality development of manufacturing - Huanggang Winner | 2,691,588.78 | 168,224.30 | 2,523,364.48 | Asset related | ||||
| 2021 urban technical transformation fund - Huanggang Winner | 1,040,625.00 | 56,250.00 | 984,375.00 | Asset related |
2021equipmentsubsidiesduring theCOVID-19pandemic -JingmenWinner
| 2021 equipment subsidies during the COVID-19 pandemic - Jingmen Winner | 5,525,000.00 | 850,000.00 | 4,675,000.00 | Asset related |
Annualequipmentinvestmentsubsidies(SpunlacePhase III) -TianmenWinner
| Annual equipment investment subsidies (Spunlace Phase III) - Tianmen Winner | 15,000,000.00 | 15,000,000.00 | Asset related |
Receivedsubsidiesfrom thedevelopmentof the centralgovernmentemergencymaterialsecuritysystem forproductioncapacityimprovement - WuhanWinner
| Received subsidies from the development of the central government emergency material security system for production capacity improvement - Wuhan Winner | 1,558,860.54 | 22,465.06 | 1,536,395.48 | Asset related |
Other
| Other | 12,355,924.64 | 1,349,807.52 | 0 | 1,808,258.18 | 0 | 0 | 11,897,473.98 | Asset related |
| Total | 109,625,401.82 | 1,349,807.52 | 0 | 11,771,448.26 | 0 | 0 | 99,203,761.08 |
Other description:
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 | Other | 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. Capital reserve
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 | 91,858,541.51 | 42,396,249.94 | 134,254,791.45 |
Total
| Total | 4,549,621,096.81 | 42,396,249.94 | 4,592,017,346.75 |
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 | 242,090,367.43 | 500,082,734.11 |
Total
| Total | 257,992,366.68 | 242,090,367.43 | 500,082,734.11 |
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 | Less: amount included in other | Less: amount included in other | Less: Income tax expenses | Attributable to the parent company after tax | Attributable to minority shareholders after tax | |||
| tax | comprehensive income in previous period transferred into profit and loss in current period | comprehensive income in previous period transferred into retained income in current period |
II. Othercomprehensive incomethat will bereclassifiedinto profitand loss
| II. Other comprehensive income that will be reclassified into profit and loss | （1,556,935.43） | 1,457,765.86 | 874,163.62 | 583,602.24 | （682,771.81） |
Balancearising fromthetranslation offoreigncurrencyfinancialstatements
| Balance arising from the translation of foreign currency financial statements | （1,556,935.43） | 1,457,765.86 | 874,163.62 | 583,602.24 | （682,771.81） |
Total othercomprehensive income
| Total other comprehensive income | （1,556,935.43） | 1,457,765.86 | 874,163.62 | 583,602.24 | （682,771.81） |
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 previousperiod before adjustment
| Undistributed profit at the end of previous period before adjustment | 5,538,135,285.97 | 5,126,630,011.14 |
Total undistributed profits at the beginningof the adjustment period (+ for increaseand - for decrease)
| Total undistributed profits at the beginning of the adjustment period (+ for increase and - for decrease) | （60,128,638.03） |
Undistributed profits at the beginning ofthe period after adjustment
| Undistributed profits at the beginning of the period after adjustment | 5,538,135,285.97 | 5,066,501,373.11 |
Plus: Net profits attributable to the ownersof parent company in the current period
| Plus: Net profits attributable to the owners of parent company in the current period | 892,823,503.14 | 1,239,320,067.26 |
Common stock dividends payable
| Common stock dividends payable | 377,763,884.10 | 767,686,154.40 |
Undistributed profits at the end of theperiod
| Undistributed profits at the end of the period | 6,053,194,905.01 | 5,538,135,285.97 |
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, RMB0.00 of the
undistributed profit at the beginning of the period was affected.
2) Due to the change of accounting policy, RMB0.00 of the undistributed profit at the beginning of the period was affected.
3) Due to the correction of major accounting errors, RMB0.00 of the undistributed profit at the beginning of the period was
affected.
4) Due to the change of consolidation scope caused by the same control, RMB0.00 of the undistributed profit at the beginning of
the period was affected.
5) RMB0.00 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 | 5,113,877,083.65 | 2,613,729,979.52 | 4,015,254,836.74 | 1,899,194,820.44 |
Other businesses
| Other businesses | 44,067,412.07 | 26,826,584.12 | 44,610,818.18 | 22,594,882.03 |
Total
| Total | 5,157,944,495.72 | 2,640,556,563.64 | 4,059,865,654.92 | 1,921,789,702.47 |
Income related information:
Unit: yuan
| Contract classification | Medical consumables (segment 1) | Healthy consumer goods (segment 2) | Total |
Type of goods
| Type of goods |
Including:
| Including: |
Main business
| Main business | 3,232,806,937.04 | 1,881,070,146.61 | 5,113,877,083.65 |
Other businesses
| Other businesses | 44,067,412.07 | 44,067,412.07 |
Classified by operatingarea
| Classified by operating area |
Including:
| Including: |
Domestic sales
| Domestic sales | 2,530,164,761.53 | 1,881,070,146.61 | 4,411,234,908.14 |
Overseas sales
| Overseas sales | 746,709,587.58 | 746,709,587.58 |
Type of markets orclients
| Type of markets or clients |
Including:
| Including: |
Type of contracts
| Type of contracts |
Including:
| Including: |
Sorted by time of goodstransfer
| Sorted by time of goods transfer |
Including:
| Including: |
Sorted by contractduration
| Sorted by contract duration |
Including:
| Including: |
Sorted by sales channels
| Sorted 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 RMB0.00, of which RMB0.00 is expected to be recognized as revenue in year, RMB0.00 is expected to berecognized as revenue in year, and RMB0.00 is expected to be recognized as revenue in year.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 | 18,495,175.61 | 13,351,264.31 |
Education surcharge
| Education surcharge | 8,259,222.82 | 6,083,856.56 |
Housing property tax
| Housing property tax | 4,020,316.15 | 4,009,111.81 |
Land use tax
| Land use tax | 1,666,760.16 | 3,601,190.09 |
Vehicle and vessel use tax
| Vehicle and vessel use tax | 8,823.96 | 5,699.53 |
Stamp duty
| Stamp duty | 3,124,207.56 | 1,751,155.99 |
Surcharge for local education
| Surcharge for local education | 5,505,078.38 | 4,282,630.01 |
Environmental protection tax
| Environmental protection tax | 79,776.79 | 71,770.68 |
Total
| Total | 41,159,361.43 | 33,156,678.98 |
Other description:
NA
63. Sales expenses
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Employee compensation
| Employee compensation | 322,603,966.58 | 229,922,405.33 |
Travel expenses
| Travel expenses | 3,848,684.40 | 5,786,992.03 |
Office communication costs
| Office communication costs | 8,396,979.22 | 3,075,901.11 |
Sales commission
| Sales commission | 118,542,577.52 | 98,622,807.60 |
Insurance premiums
| Insurance premiums | 3,018,944.71 | 2,574,426.91 |
Depreciation and amortization
| Depreciation and amortization | 156,566,925.78 | 113,209,102.14 |
Advertising and promotion expenses
| Advertising and promotion expenses | 235,198,138.16 | 233,984,397.50 |
Rent
| Rent | 66,454,933.41 | 85,737,804.97 |
Other
| Other | 35,540,974.96 | 52,891,982.98 |
Total
| Total | 950,172,124.74 | 825,805,820.57 |
Other description:
NA
64. Administrative expenses
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Employee compensation
| Employee compensation | 153,347,954.56 | 102,543,267.30 |
Equity incentive fee
| Equity incentive fee | 42,396,249.94 | 142,429,497.69 |
Depreciation and amortization charge
| Depreciation and amortization charge | 31,523,347.61 | 17,278,124.21 |
Consultant and intermediary service fees
| Consultant and intermediary service fees | 17,011,517.75 | 5,420,967.74 |
Maintenance cost
| Maintenance cost | 15,965,110.27 | 7,113,384.60 |
Communication and network services,cloud service fees, etc.
| Communication and network services, cloud service fees, etc. | 10,844,678.10 | 27,088,830.21 |
Water/electricity fee
| Water/electricity fee | 4,826,421.80 | 2,270,363.17 |
Material consumption
| Material consumption | 2,583,067.32 | 2,792,481.93 |
Recruitment fee
| Recruitment fee | 2,138,742.55 | 1,834,795.43 |
| Other | 44,754,793.42 | 1,880,839.36 |
Total
| Total | 325,391,883.32 | 310,652,551.64 |
Other description
65. R&D expenses
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Employee compensation
| Employee compensation | 80,616,282.16 | 60,924,410.97 |
Depreciation and amortization
| Depreciation and amortization | 9,034,205.00 | 8,456,760.23 |
Material
| Material | 97,340,715.49 | 81,191,111.26 |
Other miscellaneous expenses
| Other miscellaneous expenses | 51,653,295.97 | 39,344,983.01 |
Total
| Total | 238,644,498.62 | 189,917,265.47 |
Other descriptionNA
66. Financial expenses
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Interest expenditure
| Interest expenditure | 5,765,880.43 | 379,713.89 |
Interest expense of lease liabilities
| Interest expense of lease liabilities | 13,353,482.15 | 13,560,020.61 |
Less: Interest revenue
| Less: Interest revenue | 62,087,089.05 | 35,424,028.29 |
Exchange gain or loss
| Exchange gain or loss | （31,671,165.22） | 8,101,623.57 |
Other
| Other | 1,019,739.35 | 766,213.42 |
Total
| Total | （73,619,152.34） | （12,616,456.80） |
Other description
67. Other incomes
Unit: yuan
| Other sources of income | Amount incurred in current period | Amount incurred in previous period |
Government subsidies
| Government subsidies | 28,747,393.29 | 86,754,859.99 |
68. Investment income
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Long-term equity investment gainsmeasured by employing the equity method
| Long-term equity investment gains measured by employing the equity method | 2,408,209.89 | 1,655,597.53 |
Investment income from purchasingfinancial products
| Investment income from purchasing financial products | 29,043,980.01 | 48,417,662.28 |
Total
| Total | 31,452,189.90 | 50,073,259.81 |
Other descriptionNA
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 |
Income from structured deposits of bankfinancial products and trust products
| Income from structured deposits of bank financial products and trust products | 35,182,098.83 | 31,408,220.30 |
| Total | 35,182,098.83 | 31,408,220.30 |
Other description:
NA
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 | 571,417.02 | 13,360,426.19 |
Loss on bad debts of accounts receivable
| Loss on bad debts of accounts receivable | （8,320,585.13） | （1,552,019.48） |
Total
| Total | （7,749,168.11） | 11,808,406.71 |
Other descriptionThe credit impairment loss cannot be cross-checked with the provision for bad debts and the provision for bad debts reversed in thecurrent period in the notes of other receivables and accounts receivable. The difference is mainly due to the impact of the balance ofbad debt provision on the purchase date of Longterm Health and Guilin Latex, which were newly included in the scope of consolidationin the current period.
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 | （71,699,155.49） | （52,186,443.71） |
V. Impairment loss of fixed assets
| V. Impairment loss of fixed assets | （1,346,409.85） | （8,411,088.88） |
Total
| Total | （73,045,565.34） | （60,597,532.59） |
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 |
Loss on disposal of non-current assets
| Loss on disposal of non-current assets | （547,132.74） | （37,621.25） |
Including: Loss on disposal of fixed assets
| Including: Loss on disposal of fixed assets | （547,132.74） | （37,621.25） |
74. Non-operating income
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 | 8,545.43 | 36,262.29 | 8,545.43 |
Non-current assets scrap gains
| Non-current assets scrap gains | 755,380.00 | 14,489.12 | 755,380.00 |
Income from compensation orfines
| Income from compensation or fines | 509,551.22 | 498,130.83 | 509,551.22 |
Other
| Other | 879,459.00 | 1,790,581.70 | 879,459.00 |
Total
| Total | 2,152,935.65 | 2,339,463.94 | 2,152,935.65 |
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 |
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 | 956,452.02 | 208,387.94 | 956,452.02 |
Loss on damage and scrap ofnon-current assets
| Loss on damage and scrap of non-current assets | 2,609,947.50 | 7,968,231.63 | 2,609,947.50 |
Including: Loss on scrap offixed assets
| Including: Loss on scrap of fixed assets | 2,609,947.50 | 7,968,231.63 | 2,609,947.50 |
Other
| Other | 5,067,322.57 | 326,184.85 | 5,067,322.57 |
Total
| Total | 8,633,722.09 | 8,502,804.42 | 8,633,722.09 |
Other description:
76. Income tax expenses
(1) Income tax expense table
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Current income tax expenses
| Current income tax expenses | 158,472,538.37 | 152,217,622.09 |
Deferred income tax expenses
| Deferred income tax expenses | （12,007,847.00） | （15,926,486.89） |
Adjustment of the previous annual incometax amount in the current period
| Adjustment of the previous annual income tax amount in the current period | （794,409.03） | 6,995,272.56 |
Total
| Total | 145,670,282.34 | 143,286,407.76 |
(2) Accounting profit and income tax expense adjustment process
Unit: yuan
| Item | Amount incurred in current period |
Total profit
| Total profit | 1,043,198,245.70 |
Income tax expenses calculated at the appropriate/applicable taxrate
| Income tax expenses calculated at the appropriate/applicable tax rate | 156,479,736.86 |
Impact of different tax rates applied on subsidiaries
| Impact of different tax rates applied on subsidiaries | （8,373,278.31） |
Impact of income tax before adjustment
| Impact of income tax before adjustment | （794,409.03） |
Impact of non-deductible costs, expenses and losses
| Impact of non-deductible costs, expenses and losses | 8,252,480.79 |
Impact of deductible losses on unrecognized deferred income taxassets in the prior period
| Impact of deductible losses on unrecognized deferred income tax assets in the prior period | -123,722.20 |
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 | 13,599,533.22 |
Impact of weighted deduction of R&D costs
| Impact of weighted deduction of R&D costs | -23,370,058.99 |
Income tax expenses
| Income tax expenses | 145,670,282.34 |
Other description:
NA
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 | 14,529,056.53 | 5,168,682.39 |
Interest income received
| Interest income received | 7,191,289.35 | 35,424,028.29 |
| Government subsidies received | 18,335,704.11 | 107,535,255.10 |
Other
| Other | 16,052,169.59 | 2,288,712.53 |
Total
| Total | 56,108,219.58 | 150,416,678.31 |
Explanation on other cash received related to operating activities:
(2) Other cash paid related to operating activities
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Management and development costs paidin cash
| Management and development costs paid in cash | 130,183,042.11 | 40,188,212.76 |
Selling expenses paid in cash
| Selling expenses paid in cash | 117,260,516.70 | 146,432,180.23 |
Deposit, margin and quality guaranteedeposit paid
| Deposit, margin and quality guarantee deposit paid | 16,980,843.60 | 36,326,773.36 |
Bank handling charge
| Bank handling charge | 1,019,739.35 | 766,213.42 |
Other
| Other | 101,105,657.83 | 63,370,409.09 |
Total
| Total | 366,549,799.59 | 287,083,788.86 |
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 |
Lease liability principal and interest paidon lease payments
| Lease liability principal and interest paid on lease payments | 128,085,353.13 | 103,492,521.01 |
Treasury stock repurchase paid
| Treasury stock repurchase paid | 242,090,367.43 |
L/C loan deposit paid
| L/C loan deposit paid | 50,000,000.00 |
Total
| Total | 420,175,720.56 | 103,492,521.01 |
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 | 897,527,963.36 | 761,119,937.32 |
Plus: Provision for impairment of assets
| Plus: Provision for impairment of assets | 80,794,733.45 | 48,789,125.89 |
Depreciation of fixed assets, oiland gas assets and productive biologicalassets
| Depreciation of fixed assets, oil and gas assets and productive biological assets | 84,546,487.61 | 79,903,000.47 |
Depreciation of Right-of-use assets
| Depreciation of Right-of-use assets | 114,777,463.11 | 99,318,820.49 |
| Amortization of intangible assets | 11,264,308.35 | 4,688,455.41 |
Amortization of long-term deferredexpenses
| Amortization of long-term deferred expenses | 34,480,229.33 | 25,521,431.94 |
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 “-”) | 547,132.74 | 37,621.25 |
Loss on retirement of fixed assets(gains expressed with “-”)
| Loss on retirement of fixed assets (gains expressed with “-”) | 1,854,567.50 | 7,968,231.63 |
Loss from fair value change (gainsexpressed with “-”)
| Loss from fair value change (gains expressed with “-”) | （35,182,098.83） | （31,408,220.30） |
Financial expenses (gainsexpressed with “-”)
| Financial expenses (gains expressed with “-”) | （63,381,020.43） | 13,939,734.50 |
Investment losses (gains expressedwith “-”)
| Investment losses (gains expressed with “-”) | （31,452,189.90） | （50,073,259.81） |
Decreased in deferred income taxassets (increase expressed with “-”)
| Decreased in deferred income tax assets (increase expressed with “-”) | （10,159,727.35） | （6,463,163.49） |
Increase in deferred income taxliabilities (decrease expressed with “-”)
| Increase in deferred income tax liabilities (decrease expressed with “-”) | （1,977,084.09） | 1,307,851.74 |
Decrease in inventories (increaseexpressed with “-”)
| Decrease in inventories (increase expressed with “-”) | （61,057,169.21） | （100,165,058.76） |
Decrease in operating receivables(increase expressed with “-”)
| Decrease in operating receivables (increase expressed with “-”) | （395,035,590.30） | （202,353,385.01） |
Increase in operating payables(decrease expressed with “-”)
| Increase in operating payables (decrease expressed with “-”) | 141,628,284.84 | （606,929,030.07） |
Other
| Other | 31,974,609.20 | 152,402,772.57 |
Net cash flow from operatingactivities
| Net cash flow from operating activities | 801,150,899.38 | 197,604,865.77 |
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 | 4,143,545,526.92 | 4,660,333,761.86 |
Less: Beginning balance of cash
| Less: Beginning balance of cash | 4,088,612,262.04 | 4,149,734,694.38 |
Plus: Ending balance of cashequivalents
| Plus: Ending balance of cash equivalents |
Less: Ending balance of cashequivalents
| Less: Ending balance of cash equivalents |
Net increase in cash and cashequivalents
| Net increase in cash and cash equivalents | 54,933,264.88 | 510,599,067.48 |
(2) Net cash paid for obtaining subsidiaries in current period
Unit: yuan
| Amount |
Cash or cash equivalents paid in the current period for businesscombinations occurred in current period
| Cash or cash equivalents paid in the current period for business combinations occurred in current period | 1,177,540,000.00 |
Including:
| Including: |
Longterm Medical
| Longterm Medical | 727,540,000.00 |
Guilin Latex
| Guilin Latex | 450,000,000.00 |
Less: Cash and cash equivalents held by the company on theacquisition date
| Less: Cash and cash equivalents held by the company on the acquisition date | 173,677,127.71 |
Including:
| Including: |
Longterm Medical
| Longterm Medical | 57,724,670.60 |
| Guilin Latex | 115,952,457.11 |
Including:
| Including: |
Net cash paid for obtaining subsidiaries
| Net cash paid for obtaining subsidiaries | 1,003,862,872.29 |
Other description:
(3) Net cash from disposal of subsidiaries in current period
Unit: yuan
| Amount |
Cash or cash equivalents received by disposal of subsidiaries inthe current period
| Cash or cash equivalents received by disposal of subsidiaries in the current period | 39,868.87 |
Including:
| Including: |
Mifu Shanghai
| Mifu Shanghai | 39,868.87 |
Less: Cash and cash equivalents held by the company on thedate of losing the control right
| Less: Cash and cash equivalents held by the company on the date of losing the control right | 39,868.87 |
Including:
| Including: |
Mifu Shanghai
| Mifu Shanghai | 39,868.87 |
Including:
| Including: |
Net cash from disposal of subsidiaries
| Net cash from disposal of subsidiaries | 0.00 |
Other description:
(4) Composition of cash and cash equivalents
Unit: yuan
| Item | Closing Balance | Beginning balance |
I. Cash
| I. Cash | 4,143,545,526.92 | 4,088,612,262.04 |
Including: cash on hand
| Including: cash on hand | 125,582.80 | 65,897.39 |
Bank deposit readily available forpayment
| Bank deposit readily available for payment | 4,143,197,161.70 | 4,088,546,364.65 |
Other monetary capital readilyavailable for payment
| Other monetary capital readily available for payment | 222,782.42 |
III. Balance of cash and cash equivalentsat end of period
| III. Balance of cash and cash equivalents at end of period | 4,143,545,526.92 | 4,088,612,262.04 |
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 |
Monetary capital
| Monetary capital | 70,122,981.84 | For details, see Section X. Financial Statements "\7. Notes to consolidated financial statements \1. Monetary Funds". |
Fixed assets
| Fixed assets | 6,320,201.24 | For details, please refer to Section X. Financial Statements "\XVI. Other Important Issues \7. Other Important Transactions and Events that Affect Investors’ Decisions 1. Urban Renewal Project of Winner Industrial Park". |
Total
| Total | 76,443,183.08 |
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 |
Monetary capital
| Monetary capital | 313,057,448.52 |
Including: USD
| Including: USD | 43,410,193.68 | 6.7114 | 291,343,173.86 |
EUR
| EUR | 816,600.39 | 7.0084 | 5,723,062.17 |
HKD
| HKD | 18,581,344.23 | 0.8552 | 15,890,765.59 |
Yen
| Yen | 97,323.00 | 0.0491 | 4,778.56 |
Ringgit
| Ringgit | 62,733.34 | 1.5250 | 95,668.34 |
Accounts receivable
| Accounts receivable | 254,102,893.25 |
Including: USD
| Including: USD | 36,147,256.23 | 6.7114 | 242,598,695.46 |
EUR
| EUR | 1,024,452.51 | 7.0084 | 7,179,772.97 |
HKD
| HKD | 5,048,285.94 | 0.8552 | 4,317,294.14 |
Yen
| Yen | 145,227.73 | 0.0491 | 7,130.68 |
Long-term loans
| Long-term loans |
Including: USD
| Including: USD |
EUR
| EUR |
HKD
| HKD |
Other receivables
| Other receivables | 7,041,898.35 |
Including: USD
| Including: USD | 62,500.00 | 6.7114 | 419,462.50 |
HKD
| HKD | 7,743,727.61 | 0.8552 | 6,622,435.85 |
Accounts payable
| Accounts payable | 1,681,802.35 |
Including: USD
| Including: USD | 66,588.65 | 6.7114 | 446,903.07 |
EUR
| EUR | 119,403.49 | 7.0084 | 836,827.42 |
HKD
| HKD | 446,151.00 | 0.8552 | 381,548.34 |
Yen
| Yen | 336,528.00 | 0.0491 | 16,523.52 |
Other payables
| Other payables | 45,095,601.17 |
Including: USD
| Including: USD | 5,578,404.06 | 6.7114 | 37,438,901.01 |
EUR
| EUR | 28,890.51 | 7.0084 | 202,476.25 |
HKD
| HKD | 8,716,351.63 | 0.8552 | 7,454,223.91 |
Other description:
NA
(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) -Huanggang Winner
| Subsidy of 2014 Hubei provincial science and technology support plan project (the second batch) - Huanggang Winner | 1,500,000.00 | Deferred income | 75,000.00 |
Subsidy for Huanggang ChibiAvenue demolition companyplanning change - HuanggangWinner
| Subsidy for Huanggang Chibi Avenue demolition company planning change - Huanggang Winner | 3,169,359.20 | Deferred income | 52,822.64 |
Second batch of traditionalindustry transformation subsidyin 2017 - Huanggang Winner
| Second batch of traditional industry transformation subsidy in 2017 - Huanggang Winner | 1,900,000.00 | Deferred income | 104,587.14 |
First batch of traditionalsubsidies in 2019 - HuanggangWinner
| First batch of traditional subsidies in 2019 - Huanggang Winner | 1,210,000.00 | Deferred income | 60,500.00 |
Municipal Economic andInformation Bureau on theissuance of emergency materialsupport system constructiontechnical transformationspecial subsidy - HuanggangWinner
| Municipal Economic and Information Bureau on the issuance of emergency material support system construction technical transformation special subsidy - Huanggang Winner | 1,440,000.00 | Deferred income | 375,648.00 |
Production subsidy forCOVID-19 epidemicprevention materials in 2020 -Huanggang Winner
| Production subsidy for COVID-19 epidemic prevention materials in 2020 - Huanggang Winner | 11,400,000.00 | Deferred income | 3,420,000.00 |
Subsidy for purchasingequipment in key enterprise"Three Batches" at provinciallevels - Huanggang Winner
| Subsidy for purchasing equipment in key enterprise "Three Batches" at provincial levels - Huanggang Winner | 9,370,000.00 | Deferred income | 2,522,692.27 |
2020 special funds for thehigh-quality development ofmanufacturing - HuanggangWinner
| 2020 special funds for the high-quality development of manufacturing - Huanggang Winner | 3,000,000.00 | Deferred income | 168,224.30 |
2021 urban technicaltransformation fund -Huanggang Winner
| 2021 urban technical transformation fund - Huanggang Winner | 1,050,000.00 | Deferred income | 56,250.00 |
Technology Center R & Dproject subsidy - the Company
| Technology Center R & D project subsidy - the Company | 4,070,932.05 | Deferred income | 106,394.88 |
Automatic transformation ofsurgical consumablesproduction line - the Company
| Automatic transformation of surgical consumables production line - the Company | 1,860,000.00 | Deferred income | 93,000.00 |
20180311 Subsidies forresearch, science andinnovation on the technologyof thermo-responsive self-curing wound regeneration andrepair materials - 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 | 120,377.36 |
2020 technical transformationproject of Shenzhen COVID-19 epidemic 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 | 1,000,000.00 |
| Technical innovation subsidy for the Purcotton Phase II Expansion Project - Jingmen Winner | 4,755,300.00 | Other incomes | 83,183.10 |
2021 equipment subsidiesduring the COVID-19pandemic - Jingmen Winner
| 2021 equipment subsidies during the COVID-19 pandemic - Jingmen Winner | 6,800,000.00 | Deferred income | 850,000.00 |
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 | 54,054.00 |
Production line project with anannual output of 120 millionbales of cotton fabric in 2017 -Tianmen Winner
| Production line project with an annual output of 120 million bales of cotton fabric in 2017 - Tianmen Winner | 930,000.00 | Deferred income | 53,653.86 |
Provincial traditional industrytransformation and upgradingspecial funds for the first batchof block funds allocation planin Tianmen City in 2019 -Tianmen Winner
| Provincial traditional industry transformation and upgrading special funds for the first batch of block funds allocation plan in Tianmen City in 2019 - Tianmen Winner | 1,320,000.00 | Deferred income | 68,275.86 |
Annual equipment investmentsubsidies (Spunlace Phase III) -Tianmen Winner
| Annual equipment investment subsidies (Spunlace Phase III) - Tianmen Winner | 15,000,000.00 | Deferred income | 0.00 |
Key technical transformationand expansion projects(Spunlace production lineproject Phase II) - TianmenWinner
| Key technical transformation and expansion projects (Spunlace production line project Phase II) - Tianmen Winner | 1,000,000.00 | Deferred income | 49,999.98 |
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 XinzhouDistrict - 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 | 291,144.36 |
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 | 295,860.16 |
1 million provincial specialfunds for the development ofmanufacturing - WuhanWinner
| 1 million provincial special funds for the development of manufacturing - Wuhan Winner | 1,000,000.00 | Deferred income | 31,413.39 |
Received subsidies from thedevelopment of the centralgovernment emergencymaterial security system forproduction capacityimprovement - Wuhan Winner
| Received subsidies from the development of the central government emergency material security system for production capacity improvement - Wuhan Winner | 1,600,000.00 | Deferred income | 2,740.44 |
Subsidy funds for municipalgovernment projectinfrastructure construction -Chongyang Winner
| Subsidy funds for municipal government project infrastructure construction - Chongyang Winner | 12,406,500.00 | Deferred income | 206,775.00 |
Subsidies for first batch oftechnological transformationaward of industrial enterprises
| Subsidies for first batch of technological transformation award of industrial enterprises | 1,000,000.00 | Deferred income | 53,078.56 |
in 2018 - Chongyang WinnerSurgical gown production lineproject subsidy - ChongyangWinner
| Surgical gown production line project subsidy - Chongyang Winner | 4,000,000.00 | Deferred income | 216,216.22 |
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 | 281,848.74 |
Award for technical upgradingproject - Chongyang Winner
| Award for technical upgrading project - Chongyang Winner | 600,000.00 | Deferred income | 32,727.27 |
2020 Provincial special fundsfor the high-qualitydevelopment of manufacturing- Jiayu Winner
| 2020 Provincial special funds for the high-quality development of manufacturing - Jiayu Winner | 1,000,000.00 | Deferred income | 52,631.58 |
Subsidy funds for land andsubsidy funds for sewagetreatment - Jiayu Winner
| Subsidy funds for land and subsidy funds for sewage treatment - Jiayu Winner | 11,265,000.00 | Deferred income | 203,416.66 |
Xianning finance provincialtraditional industrytransformation and upgradingfund - Jiayu Winner
| Xianning finance provincial traditional industry transformation and upgrading fund - Jiayu Winner | 1,480,000.00 | Deferred income | 26,428.57 |
2019 fund project of thetransformation and upgradingof traditional industries - JiayuWinner
| 2019 fund project of the transformation and upgrading of traditional industries - Jiayu Winner | 750,000.00 | Deferred income | 13,392.85 |
Other
| Other | 7,718,055.23 | Deferred income | 749,111.08 |
Total
| Total | 152,030,146.48 | 11,771,448.26 |
2. Government subsidies
related to income
| 2. Government subsidies related to income |
0117 2021 Tax fee refundreceived - the Company
| 0117 2021 Tax fee refund received - the Company | 453,393.92 | Other incomes | 453,393.92 |
0111 Special fund for scientificand technological innovationreceived - the Company
| 0111 Special fund for scientific and technological innovation received - the Company | 429,537.00 | Other incomes | 429,537.00 |
0111 2021 Special fund byLonghua District for industrydevelopment received - Thefirst batch in 2020 - theCompany
| 0111 2021 Special fund by Longhua District for industry development received - The first batch in 2020 - the Company | 801,294.00 | Other incomes | 801,294.00 |
0111 2021 Special fund byLonghua District for industrydevelopment received - Thesecond batch in 2019 - theCompany
| 0111 2021 Special fund by Longhua District for industry development received - The second batch in 2019 - the Company | 457,735.00 | Other incomes | 457,735.00 |
0330 Subsidy by theInformation TechnologyBureau for the single championof manufacturing received - theCompany
| 0330 Subsidy by the Information Technology Bureau for the single champion of manufacturing received - the Company | 2,000,000.00 | Other incomes | 2,000,000.00 |
0425 Special subsidy againstepidemic by Shenzhen Instituteof Advanced Technologyreceived - the Company
| 0425 Special subsidy against epidemic by Shenzhen Institute of Advanced Technology received - the Company | 750,000.00 | Other incomes | 750,000.00 |
0428 Special fund by ShenzhenLonghua District Science andTechnology Innovation Bureaufor scientific and technologicalinnovation received - theCompany
| 0428 Special fund by Shenzhen Longhua District Science and Technology Innovation Bureau for scientific and technological innovation received - the Company | 489,000.00 | Other incomes | 489,000.00 |
0531 Subsidy by CommerceBureau of Shenzhen
| 0531 Subsidy by Commerce Bureau of Shenzhen | 1,540,000.00 | Other incomes | 1,540,000.00 |
Municipality for a premiumfrom Jan. to Jun. in 2021received - the Company0628 2022 Special fund for thedevelopment of epidemicprevention industry received -the Company
| 0628 2022 Special fund for the development of epidemic prevention industry received - the Company | 137,900.00 | Other incomes | 137,900.00 |
Xinjiang Finance - Subsidiesfor shipping cotton out ofXinjiang - Huanggang Winner
| Xinjiang Finance - Subsidies for shipping cotton out of Xinjiang - Huanggang Winner | 675,700.00 | Other incomes | 675,700.00 |
Award for high-tech enterprise- Tianmen Winner
| Award for high-tech enterprise - Tianmen Winner | 200,000.00 | Other incomes | 200,000.00 |
2021 Subsidies for shippingcotton out of Xinjiang -Tianmen Winner
| 2021 Subsidies for shipping cotton out of Xinjiang - Tianmen Winner | 253,300.00 | Other incomes | 253,300.00 |
Subsidy for no shutdown andearly resumption of workduring the 2022 Spring Festival- Tianmen Winner
| Subsidy for no shutdown and early resumption of work during the 2022 Spring Festival - Tianmen Winner | 206,100.00 | Other incomes | 206,100.00 |
Tax Contribution Award -Chongyang Winner
| Tax Contribution Award - Chongyang Winner | 500,000.00 | Other incomes | 500,000.00 |
Social security subsidies forpeople with enterpriseemployment difficulty -Chongyang Winner
| Social security subsidies for people with enterprise employment difficulty - Chongyang Winner | 602,114.00 | Other incomes | 602,114.00 |
Export Performance Award -Chongyang Winner
| Export Performance Award - Chongyang Winner | 276,900.00 | Other incomes | 276,900.00 |
Overtime subsidy for enterpriseduring the Spring Festival -Chongyang Winner
| Overtime subsidy for enterprise during the Spring Festival - Chongyang Winner | 254,500.00 | Other incomes | 254,500.00 |
Special fund by the centralgovernment for foreign tradedevelopment - ChongyangWinner
| Special fund by the central government for foreign trade development - Chongyang Winner | 200,000.00 | Other incomes | 200,000.00 |
Recruitment of key groups foremployment - ChongyangWinner
| Recruitment of key groups for employment - Chongyang Winner | 514,800.00 | Other incomes | 514,800.00 |
Incentive funds for scientificand technological innovation(Municipal-level jointinnovation by enterprise anduniversity / Transformation ofscientific and technologicalachievements) - Jiayu Winner
| Incentive funds for scientific and technological innovation (Municipal-level joint innovation by enterprise and university / Transformation of scientific and technological achievements) - Jiayu Winner | 325,000.00 | Other incomes | 325,000.00 |
2020 Incentive funds forinvisible champion enterprisein Jiayu county - Jiayu Winner
| 2020 Incentive funds for invisible champion enterprise in Jiayu county - Jiayu Winner | 100,000.00 | Other incomes | 100,000.00 |
Special fund by LonghuaDistrict Industry andInformation TechnologyBureau for industrydevelopment - PurCotton
| Special fund by Longhua District Industry and Information Technology Bureau for industry development - PurCotton | 1,192,300.00 | Other incomes | 1,192,300.00 |
Other
| Other | 4,616,371.11 | Other incomes | 4,616,371.11 |
Total
| Total | 16,975,945.03 | 16,975,945.03 |
(2) Return of government subsidies
□ Applicable ? Not applicable
Other description:
85. Other
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 |
ZhejiangLongtermMedicalTechnologyCo., Ltd.
| Zhejiang Longterm Medical Technology Co., Ltd. | April 30, 2022 | 727,540,000.00 | 55.00% | Acquisition | April 30, 2022 | Actual control right obtained | 86,191,160.11 | 8,898,577.33 |
WinnerGuilin LatexCo., Ltd.
| Winner Guilin Latex Co., Ltd. | June 30, 2022 | 450,000,000.00 | 100.00% | Acquisition | June 30, 2022 | Actual control right obtained | 0.00 | 0.00 |
Other description:
The net profit of Zhejiang Longterm Medical Technology Co., Ltd. from the purchase date to the end of the period is the net profit ofthe acquiree calculated continuously based on the fair value of identifiable net assets on the purchase date (April 30, 2022)
(2) Combination cost and goodwill
Unit: yuan
| Combination cost | Longterm Medical | Guilin Latex |
--Cash
| --Cash | 727,540,000.00 | 450,000,000.00 |
--Fair value of non-cash assets
| --Fair value of non-cash assets |
--Fair value of debt issued or assumed
| --Fair value of debt 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 the equity held prior to the purchase date on the purchase date
| --Fair value of the equity held prior to the purchase date on the purchase date |
--Others
| --Others |
Total combination cost
| Total combination cost | 727,540,000.00 | 450,000,000.00 |
Loss: the share of the fair value of identifiable net assets acquired
| Loss: the share of the fair value of identifiable net assets acquired | 337,122,142.50 | 251,532,486.32 |
The amount of goodwill / combination cost less than the share of the fair valueof identifiable net assets acquired
| The amount of goodwill / combination cost less than the share of the fair value of identifiable net assets acquired | 390,417,857.50 | 198,467,513.68 |
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:
Other description:
NA
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: yuan
| Longterm Medical | Guilin Latex | |||
| Fair value on the acquisition date | Book value on the acquisition date | Fair value on the acquisition date | Book value on the acquisition date | |
Assets:
| Assets: | 1,000,483,007.30 | 691,579,798.72 | 427,163,795.13 | 289,256,819.04 |
Monetary capital
| Monetary capital | 68,842,612.15 | 68,842,612.15 | 115,952,457.11 | 115,952,457.11 |
Accounts receivable payments
| Accounts receivable payments | 69,693,735.14 | 69,693,735.14 | 9,223,748.32 | 9,223,748.32 |
| Inventory | 83,199,252.80 | 76,423,001.15 | 83,232,113.75 | 71,013,902.10 |
Fixed assets
| Fixed assets | 373,892,189.76 | 364,324,320.78 | 56,493,495.59 | 34,935,720.80 |
Intangible assets
| Intangible assets | 343,100,504.54 | 50,178,817.10 | 147,365,520.92 | 43,234,531.27 |
Long-term unamortized expenses
| Long-term unamortized expenses | 2,531,712.35 | 2,894,311.84 |
Other assets
| Other assets | 59,223,000.56 | 59,223,000.56 | 14,896,459.44 | 14,896,459.44 |
Debt:
| Debt: | 387,533,657.30 | 341,198,176.02 | 175,631,308.81 | 154,945,262.40 |
Loan
| Loan | 176,996,912.90 | 176,996,912.90 | 0.00 |
Account payable payments
| Account payable payments | 43,109,810.82 | 43,109,810.83 | 20,528,701.09 | 20,528,701.09 |
Deferred income tax liabilities
| Deferred income tax liabilities | 46,335,481.29 | 0.00 | 20,686,046.41 | 0.00 |
Notes payable
| Notes payable | 56,030,000.00 | 56,030,000.00 | 0.00 | 0.00 |
Contract liabilities
| Contract liabilities | 16,984,188.90 | 16,984,188.90 | 48,572,857.70 | 48,572,857.70 |
Other debts
| Other debts | 48,077,263.39 | 48,077,263.39 | 85,843,703.61 | 85,843,703.61 |
Net assets
| Net assets | 612,949,350.00 | 350,381,622.70 | 251,532,486.32 | 134,311,556.64 |
Loss: Minority equity
| Loss: Minority equity | 275,827,207.50 | 157,671,730.22 | 0.00 | 0.00 |
Net assets acquired
| Net assets acquired | 337,122,142.50 | 192,709,892.49 | 251,532,486.32 | 134,311,556.64 |
Determination method of fair value of identifiable assets and liabilities:
Contingent liabilities of the acquiree incurred in business combinationNot applicable.Other description:
(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 and
liabilities of the acquiree that cannot be reasonably determined on the acquisition date or at the end ofcurrent period of the combination
(6) Other description
2. Business combination under common control
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 controlright 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:
Pure HB (Shanghai) was deregistered on February 21, 2022.
6. Other
NA
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 |
BeijingPurcotton
| 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)
| 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 Medical
| Winner Medical | Malaysia | Malaysia | There is no | 100.00% | Business |
| Malaysia | actual business operation | 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 |
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 |
LongtermMedical
| Longterm Medical | Huzhou, Zhejiang | Huzhou, Zhejiang | Production and sales of medical consumables | 55.00% | Business combination not under common control |
HangzhouShengyi
| Hangzhou Shengyi | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Technology promotion and application service industry | 55.00% | Business combination not under common control |
Xi’an LongTemu
| Xi’an Long Temu | Xi’an, Shaanxi | Xi’an, Shaanxi | Software and Information Technology Services Industry | 55.00% | Business combination not under common control |
DeqingLongterm
| Deqing Longterm | Deqing, Zhejiang | Deqing, Zhejiang | Rubber and plastic products industry | 55.00% | Business combination not under common control |
United StatesLongterm
| United States Longterm | Georgia, United States | Georgia, United States | No business yet | 55.00% | Business combination not under common control |
Guilin Latex
| Guilin Latex | Guilin, Guangxi | Guilin, Guangxi | Rubber products | 100.00% | Business combination not under common control |
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:
Basis for determining whether the company is an agent or a principal:
Other description:
(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 | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flow from financing activities | Operating income | Net profit | Total comprehensive income | Cash flow from financing activities | |
Other description:
(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 financial
statements
Not applicable.Other description:
Not applicable.
2. Transactions in which the share of ownership interest in a subsidiary changes and the subsidiary is
still 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 owners' equities attributable to the
owners 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 |
Loss: The share of the net asset of a subsidiary calculated based
| Loss: The share of the net asset of a subsidiary calculated based |
on the proportion of equity acquired/disposedBalance
| Balance |
Including: Capital reserve adjusted
| Including: Capital reserve adjusted |
Surplus reserve adjusted
| Surplus reserve adjusted |
Undistributed profit adjusted
| Undistributed profit adjusted |
Other descriptionNot applicable.
3. Equity in joint venture arrangement or joint venture
(1) Important cooperative enterprises or joint ventures
| Important cooperative enterprises or joint ventures | 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 |
Minority equity
| Minority equity |
Attributable to the parent companyshareholders’ equity
| Attributable to the parent company shareholders’ equity |
Share of net assets by shareholding ratio
| Share of net assets by shareholding ratio |
Adjustment items
| Adjustment items |
--Goodwill
| --Goodwill |
--Unrealized profit of internal transaction
| --Unrealized profit of internal transaction |
--Others
| --Others |
Book value of equity investments in jointventures
| Book value of equity investments in joint ventures |
The fair value of equity investments injoint ventures with publicly quoted prices
| The fair value of equity investments in joint ventures with publicly quoted prices |
Operating income
| Operating income |
Financial expenses
| Financial expenses |
Income tax expenses
| Income tax expenses |
Net profit
| Net profit |
| Net profit of discontinued operation |
Other comprehensive income
| Other comprehensive income |
Total comprehensive income
| Total comprehensive income |
Dividends received from joint ventures incurrent year
| Dividends received from joint ventures in current year |
Other description
(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 |
Minority equity
| Minority equity |
Attributable to the parent companyshareholders’ equity
| Attributable to the parent company shareholders’ equity |
Share of net assets by shareholding ratio
| Share of net assets by shareholding ratio |
Adjustment items
| Adjustment items |
--Goodwill
| --Goodwill |
--Unrealized profit of internal transaction
| --Unrealized profit of internal transaction |
--Others
| --Others |
Book value of equity investments incooperative enterprises
| Book value of equity investments in cooperative enterprises |
Fair value of equity investments incooperative enterprises with publiclyquoted prices
| Fair value of equity investments in cooperative enterprises with publicly quoted prices |
Operating income
| Operating income |
Net profit
| Net profit |
Net profit of discontinued operation
| Net profit of discontinued operation |
Other comprehensive income
| Other comprehensive income |
Total comprehensive income
| Total comprehensive income |
Dividends received from cooperativeenterprises in current year
| Dividends received from cooperative enterprises in current year |
Other description
(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 book value of investment
| Total book value of investment | 19,358,011.13 | 16,949,801.24 |
Total number of following items byshareholding ratio
| Total number of following items by shareholding ratio |
- Joint venture:
| - Joint venture: |
Total number of following items byshareholding ratio
| Total number of following items by shareholding ratio |
| - Net profit | 2,408,209.89 | 3,525,570.83 |
- Total comprehensive income
| - Total comprehensive income | 2,408,209.89 | 3,525,570.83 |
Other description
(5) Significant restrictions on the ability of cooperative enterprises and joint ventures to transfer funds tothe Company
Not 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 enterprise
Not 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 description
5. Equity in the structured entity that is not included in the consolidated financial statementsDescription of structured entity not included in the consolidated financial statementsNot applicable.
6. Other
Not applicable.X. Risks associated with financial instrumentsThe 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 objectives andpolicies and ultimately responsible for the risk management objectives and policies, provided that the board ofdirectors has authorized the Company’s internal audit department to design and implement procedures to ensure theeffective implementation of risk management objectives and policies. The board reviews the effectiveness of theprocedures implemented and the reasonableness of risk management objectives and policies through monthlyreports 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 risk refers to the risk of financial loss to the Company due to the failure of the counterparty to fulfill itscontractual 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, bankreference letter (when such information is available). The Company sets a credit sales limit for each customer, whichis 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 risk refers to the risk of capital shortage when the Company performs the obligation of settlementby cash 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 | |
Short-term debt
| Short-term debt | 1,141,476,733.93 | 1,141,476,733.93 |
Notes payable
| Notes payable | 146,065,963.57 | 146,065,963.57 |
Accountspayable
| Accounts payable | 996,960,746.96 | 996,960,746.96 |
Other payables
| Other payables | 451,898,553.42 | 451,898,553.42 |
Long-termloans
| Long-term loans | 28,000,000.00 | 28,000,000.00 |
Lease liabilities
| Lease liabilities | 220,429,023.53 | 172,727,158.22 | 186,096,441.44 | 578,908,208.74 |
Total
| Total | 2,956,831,021.41 | 200,727,158.22 | 186,096,441.44 | 3,343,310,206.62 |
Item
| Item | Beginning 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 |
(III) Market riskMarket risk of financial instruments refers to the risk that the fair value or future cash flow of financial instrumentsfluctuates due to the change of market price, including exchange rate risk, interest rate risk and other price 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.
2. Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due tothe change of foreign exchange rate.The Company continuously monitors foreign currency transactions and the scale of foreign currency assets andliabilities to minimize foreign exchange risks. In addition, the Company may enter into forward foreign exchangecontracts or currency exchange contracts to achieve the purpose of avoiding the exchange rate risk. The Companyhas not signed any forward foreign exchange contracts or currency swap contracts during the current period and theprevious period.The exchange rate risk faced by the Company mainly comes 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 | |||||
| USD | EUR | HKD | Yen | Ringgit | Total | |
Foreign currencyfinancial assets
| Foreign currency financial assets |
Monetary capital
| Monetary capital | 291,343,173.86 | 5,723,062.17 | 15,890,579.77 | 4,782.06 | 95,670.85 | 313,057,268.71 |
Accountsreceivable
| Accounts receivable | 242,598,695.46 | 7,179,772.97 | 4,317,243.65 | 7135.91 | 254,102,847.99 |
Otherreceivables
| Other receivables | 419,462.50 | 6,622,358.41 | 7,041,820.91 |
Subtotal
| Subtotal | 534,361,331.82 | 12,902,835.14 | 26,830,181.83 | 11,917.97 | 95,670.85 | 574,201,937.61 |
Foreign currencyfinancialliabilities
| Foreign currency financial liabilities | 0.00 |
Accountspayable
| Accounts payable | 446,903.07 | 836,827.42 | 381,543.87 | 16,535.64 | 1,681,810.00 |
Other payables
| Other payables | 37,438,901.01 | 202476.25 | 7,454,136.75 | 45,095,514.01 |
Subtotal
| Subtotal | 37,885,804.08 | 1,039,303.67 | 7,835,680.62 | 16,535.64 | - | 46,777,324.01 |
Net amount
| Net amount | 496,475,527.74 | 11,863,531.47 | 18,994,501.21 | （4,617.67） | 95,670.85 | 527,424,613.60 |
On 30 June 2022, if the RMB appreciates or depreciates by 5% against USD / EUR / HKD / Yen / Ringgit, all othervariables being held constant, the net profit of the Company will be reduced or increased by RMB22,683,384.59.Management considers that 5% is a reasonable reflection of the reasonable range of possible changes in RMBagainst USD.
3. Other price risks
Other price risks refer to the risks that the fair value or future cash flows of financial instruments fluctuate due tothe changes in market prices 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) Trading financialassets
| (I) Trading financial assets | 1,413,871,232.59 | 1,313,043,323.76 | 2,726,914,556.35 |
1. Financial assets
measured with fair valueand with the changesincluded in current profit
| 1. Financial assets measured with fair value and with the changes included in current profit | 1,413,871,232.59 | 1,313,043,323.76 | 2,726,914,556.35 |
and loss
(1) Debt instruments
investment
| (1) Debt instruments investment | 1,413,871,232.59 | 1,313,043,323.76 | 2,726,914,556.35 |
(2) Amounts receivable
financing
| (2) Amounts receivable financing | 29,770,412.07 | 29,770,412.07 |
Total assetscontinuously measuredat fair value
| Total assets continuously measured at fair value | 1,443,641,644.66 | 1,313,043,323.76 | 2,756,684,968.42 |
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 price
3. Continuous and non-continuous measurement items of fair value at second level, qualitative and
quantitative information on valuation techniques adopted and important parameters
4. Continuous and non-continuous measurement items of fair value at third level, qualitative andquantitative information on valuation techniques adopted and important parameters
5. Continuous measurement items of fair value at third level, adjustment information between openingand closing book value and sensitivity analysis of unobservable parameters
6. For continuous measurement items of fair value, if there is a conversion between different levels incurrent period, the reasons for the conversion and the policies for determining the conversion timepoint
7. Valuation technology change and reason of change in current period
8. Fair value of financial assets and financial liabilities not measured at fair value
9. Other
XII. Related parties and connected 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" for information on the subsidiaries of the Company.
3. Cooperative enterprises and joint ventures
See 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 description
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 shares |
Xiamen 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, left in the last period |
Zhou Xiaoxiong
| Zhou Xiaoxiong | Independent director, left in the last period |
Bi Qun
| Bi Qun | Independent director, left in the last period |
Liu Weiwei
| Liu Weiwei | Chairman of the Board of Supervisors, left in the last period |
Ye Yangjing
| Ye Yangjing | Independent director, left in the last period |
Key Ke Liu (Liu Ke)
| Key Ke Liu (Liu Ke) | Independent director |
Peng Jianfeng
| Peng Jianfeng | Independent director |
Xie Jiawei
| Xie Jiawei | Independent director |
Zhang Tingting
| Zhang Tingting | Chairman of the board of supervisors |
Liu Hua
| Liu Hua | Supervisor |
Wang Ying
| Wang Ying | Supervisor |
Yin Wenling
| Yin Wenling | Deputy general manager, left in the last period |
Zhang Li
| Zhang Li | Deputy general manager |
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. Connected transaction
(1) Connected 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 ZhuolingPackaging Co., Ltd.
| Wuhan Zhuoling Packaging Co., Ltd. | Purchasing goods or services | 37,624,707.33 | No | 10,406,270.74 |
Chengdu Winner
| Chengdu Winner | Purchasing goods or services | 343,008.97 | No | 88,633.66 |
Breo
| Breo | Purchasing goods or services | 0.00 | No | 124,234.00 |
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 | 5,497,777.06 | 2,362,509.36 |
SCGC
| SCGC | Selling goods or services | 59,350.00 | 28,238.94 |
Related transaction of purchases and sales of goods, provision and acceptance of services
(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 | Simplified processing of short-term leases and rental expenses of | Variable lease payments that are not included in the measurement of the | Rent paid | Interest expenses incurred on lease liabilities | Right-of-use assets increased |
| low-value asset leases (if applicable) | lease liabilities (if applicable) |
Amountincurred
incurrentperiod
| Amount incurred in current period | Amount incurred in previous period | Amount incurred in current period | Amount incurred in previous period | Amount incurred in current period | Amount incurred in previous period | Amount incurred in current period | Amount incurred in previous period | Amount incurred in current period | Amount incurred in 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 |
Related-party guarantee
(5) Related party loan at call
Unit: yuan
| Related party | Borrowing amount | Start date | Maturity date | Description |
Borrowing
BorrowingLending
Lending
(6) Asset transfer and debt restructuring of related party
Unit: yuan
| 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 | 5,879,069.64 | 4,653,199.81 |
(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 | 0.00 | 0.00 | 1,925,119.44 | 96,255.97 |
Accounts receivable
| Accounts receivable | SCGC | 0.00 | 0.00 | 35,880.00 | 1,794.00 |
(2) Payables
Unit: yuan
| Project name | Related party | Ending book balance | Beginning book balance |
Accounts payable
| Accounts payable | Chengdu Winner | 4,172.20 | 69,711.48 |
| Accounts payable | Wuhan Zhuoling | 17,701,619.71 | 17,557,893.52 |
Contract liabilities
| Contract liabilities | SCGC | 11,946.90 | 11,946.90 |
Contract liabilities
| Contract liabilities | Chengdu Winner | 751,931.29 | 0.00 |
7. Related party commitment
NA
8. Other
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 companyduring the current period
| Total amount of equity instruments exercised by the company during the current period | 0.00 |
Total amount of equity instruments invalidated by the companyduring the current 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 optionsoutstanding at the end of the period and the remaining term ofthe 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 operating income in 2021 ≥ RMB 12 billion, the ownership proportion at the Company level is 100%; in case of RMB 10 billion ≤ the audited operating income in 2021 < RMB 12 billion, the ownership proportion at the Company level is 80%; in case of the audited business income in 2021 < RMB 10 billion, the restricted stock planned to be vested by the incentive object shall not be vested and become invalid. In case of the audited operating income in 2022 ≥ the audited operating income in 2021 * (1+30%), the ownership proportion at the Company level is 100%; in case of the audited operating income in 2021 * (1+20%) ≤ the audited operating income in 2022 < the audited operating income in 2021 * (1+30%), the ownership proportion at the Company level is 80%; in case of the audited business income in 2022 < the audited operating income 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 equityinstruments outstanding at the end of the period and theremaining 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 meetingof the second Board of Supervisors, deliberated and passed the Proposal on the Company’s 2020 Restricted StockIncentive Plan (Draft) and Its Abstract. On December 15, 2020, the Company held the sixth extraordinary generalmeeting of shareholders in 2020 to deliberate and pass the Proposal on the Company’s 2020 Restricted StockIncentive Plan (Draft) and Its Abstract. According to the above proposal, the number of restricted stock (Class IIrestricted stock) to be granted in this incentive plan is 6.5 million, and the underlying stock involved is A -sharecommon stock, accounting for about 1.52% of the total capital stock of the Company at the time of announcementof 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 to be granted. 0.6 million shares were reserved to be granted, accounting for about 0.14% of thetotal capital stock of the Company at the time of announcement of the draft incentive plan, and 9.23% of the totalequity to be granted. No more than 1,053 incentive objects will be granted at the first time, including directors,
senior managers, and other persons deemed to need incentives by the Board of Directors.On December 18, 2020, the Company’s 17th meeting of the second Board of Directors and the 11th meeting of thesecond Board of Supervisors deliberated and adopted the Proposal on First Granting Restricted Stocks to IncentiveObjects. In view of the fact that 17 incentive objects gave up the restricted stock to be granted by the Company dueto resignation or personal reasons, they no longer qualified for the incentive conditions. According to the 2020Restricted Stock Incentive Plan (Draft), the Company adjusted the incentive objects and the number of grants. Thenumber of incentive objects granted for the first time was adjusted from 1,053 to 1,036, and the total number ofrestricted 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 stockto the date when all 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 shall determine the grant date, and the grant date must be the trading day. The Company shall grantthe restricted stock and complete the announcement within 60 days after the approval of the general meetingof shareholders. If the Company fails to complete the above work within 60 days, the implementation of thisincentive plan will be terminated, and the restricted stock not granted will become invalid.The Company shall, within 12 months after the deliberation and approval of the incentive plan by the generalmeeting of share holders, specify the incentive objects reserved for award. If the incentive objects are notspecified for more than 12 months, the restricted 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 followingtable:
| Vesting arrangement | Vesting period | Vesting ratio |
| 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 | 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 grantingrestricted stocks reserved in this incentive plan is consistent with the vesting arrangement for the first grant ofrestricted stock.If the restricted stock corresponding to the reserved part is granted within 2021, the vesting arrangement for grantingrestricted stocks reserved in this incentive plan is shown in the following table:
| Vesting arrangement | Vesting period | Vesting ratio |
| 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 | 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 yearduring their term of office shall not exceed 25% of the total number of the Company’s shares they hold; they shallnot transfer the shares they hold within half 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 stock 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 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 | 134,254,791.45 |
Total amount of expenses recognized by equity-settled share-based payments in current period
| Total amount of expenses recognized by equity-settled share-based payments in current period | 42,396,249.94 |
Other descriptionThe first vesting period shall become invalid if it falls to meet the performance conditions.
3. Cash-settled share-based payments
□ Applicable ? Not applicable
4. Modification and termination of share-based payment
NA
5. Other
NA
XIV. Commitment and contingencies
1. Important commitment issues
Important commitments on balance sheet date
(1) Large-scale outsourcing contracts that have been signed or are about to be performed and their financial
implicationsAs of Thursday, June 30, 2022, the outstanding contracts among the large-value contracts signed by the Companyand its subsidiaries that are being or are about to be performed are as follows:
| Project name | Amount |
Purcotton - Smart Logistics
| Purcotton - Smart Logistics | 11,427,862.00 |
Huanggang Winner - Packaging and production line for sanitary pads
| Huanggang Winner - Packaging and production line for sanitary pads | 7,420,000.00 |
Huanggang Winner - Sanitary pads production equipment
| Huanggang Winner - Sanitary pads production equipment | 15,890,000.00 |
Huanggang Winner - Comprehensive Workshop
| Huanggang Winner - Comprehensive Workshop | 57,800,000.00 |
Jiayu Winner - Workshop development
| Jiayu Winner - Workshop development | 258,340,000.00 |
Tianmen Winner - Intelligent 3D e-commerce warehouse for purecotton business
| Tianmen Winner - Intelligent 3D e-commerce warehouse for pure cotton business | 28,460,636.70 |
Wuhan Winner - Project payment Phase II
| Wuhan Winner - Project payment Phase II | 185,789,572.20 |
Total
| Total | 565,128,070.90 |
2. Contingencies
(1) Important contingencies on balance sheet date
As of June 30, 2022, the Company has no important contingencies to be disclosed.
(2) Explanation is also required if the Company has no important contingencies to be disclosedThe Company has no important contingencies to be disclosed.
3. Other
NA
XV. Post-balance sheet events
1. Important non-adjustment items
Unit: yuan
| Item | Description | Influence number of financial position and operating results | Reasons for influence number cannot be estimated |
2. Profit distribution
Unit: yuan
3. Sales return
The Company has no significant sales returns after the balance sheet date.
4. Other post-balance sheet events
NAXVI. 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
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 reporting segments have been determined, respectively: medical consumables, health consumer goods.Reporting segments of the Company offers different products or services or operates in different regions. Since eachsegment requires different technologies or marketing strategies, the management of the Company manages theoperating activities of each reporting segment separately and regularly evaluates the operating results of thesereporting segments to determine the allocation of resources to them and evaluate their performance.The inter-segment transfer price is determined on the basis of the actual transaction price, and the expenses indirectlyattributable to the segments are distributed among the segments in proportion to the income (as determined by theCompany). Assets are allocated according to the operations of a segment and the location of the assets. Liabilitiesof a segment include liabilities attributable to that segment arising from the operations of a segment. If expensesrelated to liabilities shared by multiple operating segments are allocated to those operating segments, such sharedliabilities 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 | Offset between segments | Total |
Operating income
| Operating income | 3,276,874,349.09 | 1,881,070,146.63 | 5,157,944,495.72 |
Operating costs
| Operating costs | 1,761,683,682.74 | 878,872,880.90 | 2,640,556,563.64 |
Assets impairmentloss & creditimpairment loss
| Assets impairment loss & credit impairment loss | 27,589,830.16 | 53,204,903.29 | 80,794,733.45 |
Depreciationexpense andamortizationexpense
| Depreciation expense and amortization expense | 46,449,128.24 | 150,675,350.15 | 197,124,478.39 |
Operating profit /loss
| Operating profit / loss | 779,613,976.01 | 206,682,696.75 | 63,382,359.38 | 1,049,679,032.14 |
Non-operatingincome and expense
| Non-operating income and expense | （6,480,786.44） | （6,480,786.44） |
Assets and liabilities
| Assets and liabilities |
Total assets
| Total assets | 5,909,996,547.66 | 3,431,793,583.51 | 6,180,704,833.34 | 15,522,494,964.51 |
Total liabilities
| Total liabilities | 1,378,796,616.09 | 1,248,798,572.38 | 1,610,436,628.17 | 4,238,031,816.64 |
(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
(4) Other description
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 is A819-0123.The land area is 29,064.49 m
, and the current use is industrial land. According to the statutory plan of [Pinustabulaeformis area] of No.402-19&20&21, Bao’an District, Shenzhen City, the planned use of this land parcel is asecond-class residential land. The land has been registered for title with a construction area of 36,625.89 m
, usedfor office, plant and dormitory. The Company shall be the sole subject of rights to the said parcel and all the buildings(structures) and appendages thereon. At present, the above target land and part of the building are not mortgaged.The first to sixth floors of the second office building, the first to sixth floors of the third dormitory building, and thefirst to sixth floors of the fourth dormitory building have been mortgaged at present.
(2) Cooperation mode
The Company agrees to entrust the target land and building to Xinghe Real Estate for application for approval ofthe urban renewal unit plan, and accepts the relocation compensation of Xinghe Real Estate according to theconditions agreed in this agreement. Xinghe 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 the relocationcompensation and demolition and reconstruction funds, and enjoys the interest in the renewal project as the singlemarket 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 byXinghe 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 relocation compensationconsideration to the Company. The Company voluntarily chooses the relocation compensation method thatcombines monetary compensation and property right exchange (relocation), including: 1) monetary compensation:
RMB400 million; 2) Property right exchange (relocation): the area of property right exchange (relocation) obtainedby Party B shall be determined at 40% of the gross floor area for sale based on the gross floor area for saledetermined 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 RMB50 million and the second advance compensationof RMB100 million for demolition to the Company according to the agreement. The project has been publicized onSeptember 2019, and approved on December 2019. The special regulations have been approved by the officemeeting of the Update Bureau, and are waiting for the review and approval of the leadership group meeting ofLonghua District. Subsequent progress will be made in accordance with the procedures 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 the Companywill be returned to Galaxy Real Estate without interest within 30 days after the termination of the contract.
2. Heyuan investment and construction project
(1) Problem background
In 2016, under the guidance and promotion of Shenzhen Longhua District Committee and District Government, theCompany plans to transfer part of the production and logistics functions to Heyuan Zijin Linjiang Industrial Park inresponse to the policy of supporting Heyuan City as a counterpart of Shenzhen City. In May 2016, the Companyand the People’s Government of Zijin County of Heyuan City signed the Agreement on Investment and Constructionof Medical Package and Cotton Household Goods Production Project (hereinafter referred to as the "InvestmentAgreement"), 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 Zijin Countyissued the Approval on the Environmental Impact Report Form of the Construction Project of Winner Medical(Heyuan) Co., Ltd. In accordance with the agreement, the Zijin County Government assisted in obtaining a seriesof 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 of High-speed Railway,National Highway 205 and the High-speed Railway New Town overlap with the project land of Winner Medical(Heyuan).In October 2019, the Company signed a tripartite agreement with the People's Government of Zijin County and theManagement Committee of Heyuan Jiangdong New District to clarify the overall disposal plan. The land used forWinner Medical (Heyuan)’s project and its above-ground buildings will be recovered by the People’s Governmentof Zijin County, and the three parties agree to determine the amount of compensation through arbitration. ThePeople’s Government of Zijin County paid RMB30 million to the Company as the performance bond.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 RMB2,655,320.00. The landtransfer deposit of RMB3 million shall be returned to t he Company and compensate for the economic loss ofRMB550 million. The People's Government of Zijin County shall pay 50% of the amount before December 31,2019 and 50% before February 29, 2020. As of June 30, 2022, the Company has received the land transfer depositof RMB3 million returned by the People's Government of Zijin County and paid the compensation of RMB319million. 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
Heyuan Winner's business positioning is mainly the production, logistics and warehousing functions of medicalpackage and cotton daily necessities. At present, the Company has transferred the production, logistics andwarehousing functions of Purcotton daily necessities to the Company's subsidiary Hubei Winner, and the productionof medical package has been transferred to the Company's subsidiary Chongyang Winner. Hubei Winner andChongyang Winner have sufficient capacity to undertake the aforementioned production, logistics and warehousingbusiness originally intended to be undertaken by Heyuan Winner. The above matters of Heyuan Winner have notcaused significant adverse impact on the normal production 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: |
Accountsreceivableofprovisionfor baddebt bycombination
| Accounts receivable of provision for bad debt by combination | 659,391,278.10 | 100.00% | 33,092,982.36 | 5.02% | 626,298,295.74 | 528,512,638.89 | 100.00% | 26,295,000.03 | 4.98% | 502,217,638.86 |
Including:
| Including: |
Aginganalysiscombination
| Aging analysis combination | 652,636,467.43 | 98.98% | 33,092,982.36 | 5.07% | 619,543,485.07 | 521,018,955.26 | 98.58% | 26,295,000.03 | 5.05% | 494,723,955.23 |
Other
| Other | 6,754,810 | 1.02% | 6,754,810 | 7,493,683 | 1.42% | 7,493,683 |
| combination | .67 | .67 | .63 | .63 |
Total
| Total | 659,391,278.10 | 100.00% | 33,092,982.36 | 5.02% | 626,298,295.74 | 528,512,638.89 | 100.00% | 26,295,000.03 | 4.98% | 502,217,638.86 |
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 | 6,754,810.67 | 0.00 | 0.00% |
Total
| Total | 6,754,810.67 | 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 1year)
| Within 1 year (including 1 year) | 646,351,977.70 | 32,317,598.89 | 5.00% |
1~2 years (including 2 years)
| 1~2 years (including 2 years) | 7,439,964.88 | 743,996.49 | 10.00% |
3~4 years (including 4 years)
| 3~4 years (including 4 years) | 50,000.00 | 25,000.00 | 50.00% |
More than 5 years
| More than 5 years | 70,169.20 | 70,169.20 | 100.00% |
Total
| Total | 653,912,111.78 | 33,156,764.57 |
Description of the basis for determining the combination:
On June 30, 2022, 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 June 30, 2022 is estimated based on the aging of accounts and estimated at the original loss ratio.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 | Closing Balance |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 651,831,144.02 |
1~2 years
| 1~2 years | 7,439,964.88 |
More than 3 years
| More than 3 years | 120,169.20 |
3~4 years
| 3~4 years | 50,000.00 |
More than 5 years
| More than 5 years | 70,169.20 |
Total
| Total | 659,391,278.10 |
(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 | Other | |||
Provision for baddebt of accounts
| Provision for bad debt of accounts | 26,295,000.03 | 7,376,614.91 | 392,383.03 | 186,249.55 | 33,092,982.36 |
receivableTotal
| Total | 26,295,000.03 | 7,376,614.91 | 392,383.03 | 186,249.55 | 33,092,982.36 |
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
| Unit name | Amount recovered or reversed | Recovery way |
Not applicable.
(3) Accounts receivable actually written off at the current period
Unit: yuan
| Item | Amount written off |
Irrecoverable balance receivable
| Irrecoverable balance receivable | 186,249.55 |
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 related transactions |
Description of write-off accounts receivable:
Not applicable.
(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 | 43,760,936.31 | 6.64% | 2,188,046.82 |
Second
| Second | 26,752,033.96 | 4.06% | 1,337,601.70 |
Third
| Third | 16,781,715.04 | 2.55% | 839,085.75 |
Fourth
| Fourth | 24,028,702.91 | 3.64% | 1,201,435.15 |
Fifth
| Fifth | 32,648,629.50 | 4.95% | 1,632,431.48 |
Total
| Total | 143,972,017.72 | 21.84% |
(5) Accounts receivable derecognized due to transfer of financial assets
NA
(6) Amount of assets and liabilities formed by transferring accounts receivables and continuinginvolvementNAOther description:
NA
2. Other receivables
Unit: yuan
| Item | Closing Balance | Beginning balance |
Other receivables
| Other receivables | 206,866,953.22 | 218,099,656.42 |
Total
| Total | 206,866,953.22 | 218,099,656.42 |
(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 Heyuan Winner
| Compensation for investment and construction project of Heyuan Winner | 233,655,320.00 | 238,655,320.00 |
Export drawback
| Export drawback | 7,187,293.68 |
Margin and deposit
| Margin and deposit | 6,382,203.51 | 5,370,048.01 |
Employee pretty cash
| Employee pretty cash | 341,256.17 | 333,170.12 |
Other
| Other | 2,280,542.69 | 2,795,640.07 |
Total
| Total | 242,659,322.37 | 254,341,471.88 |
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 1,2022
| Balance on January 1, 2022 | 36,241,815.46 | 36,241,815.46 |
Balance on January 1,2022 in the currentperiod
| Balance on January 1, 2022 in the current period |
Reversal in currentperiod
| Reversal in current period | 449,446.31 | 449,446.31 |
Balance on June 30,2022
| Balance on June 30, 2022 | 35,792,369.15 | 35,792,369.15 |
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable ? Not applicable
Disclosure by aging
Unit: yuan
| Aging | Closing Balance |
Within 1 year (including 1 year)
| Within 1 year (including 1 year) | 4,118,451.36 |
1~2 years
| 1~2 years | 4,855,251.01 |
2~3 years
| 2~3 years | 233,655,320.00 |
More than 3 years
| More than 3 years | 30,300.00 |
3~4 years
| 3~4 years | 30,300.00 |
Total
| Total | 242,659,322.37 |
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 | Other | |||
Provision for baddebts of otherreceivables
| Provision for bad debts of other receivables | 36,241,815.46 | 449,446.31 | 35,792,369.15 |
Total
| Total | 36,241,815.46 | 449,446.31 | 35,792,369.15 |
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
| Unit name | Amount reversed or recovered | Recovery way |
Not applicable.
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 related transactions |
Description of write-off of other receivables:
Not applicable.
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 | 233,655,320.00 | 2-3 years | 96.29% | 35,048,298.00 |
Second
| Second | Deposit | 2,544,135.21 | 1-2 years | 1.05% | 127,206.76 |
Third
| Third | Deposit | 2,311,115.80 | 1-2 years | 0.95% | 115,555.79 |
Fourth
| Fourth | Deposit | 1,000,000.00 | Within 1 year | 0.41% | 50,000.00 |
Fifth
| Fifth | Deposit | 399,599.00 | Within 1 year | 0.16% | 19,979.95 |
Total
| Total | 239,910,170.01 | 98.86% | 35,361,040.50 |
6) Accounts receivable involving government subsidies
Unit: yuan
| Unit name | Name of government | Closing Balance | Ending aging | Estimated collection |
| subsidy project | time, amount and basis |
Not applicable.
7) Other receivables derecognized due to transfer of financial assets
Not applicable.
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvementOther description:
3. Long-term equity investments
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 | 2,086,177,678.63 | 4,086,994.48 | 2,082,090,684.15 | 908,737,678.63 | 4,086,994.48 | 904,650,684.15 |
Investment inassociatedenterprises andjoint enterprises
| Investment in associated enterprises and joint enterprises | 19,358,011.13 | 19,358,011.13 | 16,949,801.24 | 16,949,801.24 |
Total
| Total | 2,105,535,689.76 | 4,086,994.48 | 2,101,448,695.28 | 925,687,479.87 | 4,086,994.48 | 921,600,485.39 |
(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 | Other | ||||
WinnerMedical(Huanggang)
| Winner Medical (Huanggang) | 267,491,627.79 | 267,491,627.79 |
WinnerMedical(Jingmen)
| Winner Medical (Jingmen) | 27,242,761.31 | 27,242,761.31 |
ShenzhenPurcotton
| Shenzhen Purcotton | 130,000,000.00 | 130,000,000.00 |
WinnerMedical(Chongyang)
| Winner Medical (Chongyang) | 33,629,806.08 | 33,629,806.08 |
WinnerMedical(Jiayu)
| Winner Medical (Jiayu) | 36,436,595.28 | 36,436,595.28 |
WinnerMedical(Tianmen)
| Winner Medical (Tianmen) | 39,697,276.28 | 39,697,276.28 |
WinnerMedical(Hong Kong)
| Winner Medical (Hong Kong) | 1,456,720.00 | 1,456,720.00 |
WinnerMedical(Yichang)
| Winner Medical (Yichang) | 18,595,897.41 | 18,595,897.41 |
WinnerMedicalMalaysia
| Winner Medical Malaysia | 0.00 | 0.00 | 4,086,994.48 |
WinnerMedical(Heyuan)
| Winner Medical (Heyuan) | 100,000,000.00 | 100,000,000.00 |
| Winner Medical (Wuhan) | 100,000,000.00 | 100,000,000.00 |
PureH2B
| PureH2B | 150,000,000.00 | 150,000,000.00 |
Mifu Shanghai
| Mifu Shanghai | 100,000.00 | 100,000.00 | 0.00 |
LongtermMedical
| Longterm Medical | 727,540,000.00 | 727,540,000.00 |
Guilin Latex
| Guilin Latex | 450,000,000.00 | 450,000,000.00 |
Total
| Total | 904,650,684.15 | 1,177,540,000.00 | 100,000.00 | 2,082,090,684.15 | 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 | Other | ||||
I. Cooperative enterprise
I. Cooperative enterpriseII. Joint venture
II. Joint ventureChengduWinner
| Chengdu Winner | 16,949,801.24 | 2,408,209.89 | 19,358,011.13 |
Subtotal
| Subtotal | 16,949,801.24 | 2,408,209.89 | 19,358,011.13 |
Total
| Total | 16,949,801.24 | 2,408,209.89 | 19,358,011.13 |
(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 | 3,058,391,903.35 | 1,930,682,989.44 | 2,129,805,774.91 | 1,233,799,517.75 |
Other businesses
| Other businesses | 40,133,344.65 | 3,940,215.49 | 22,965,185.06 | 3,550,383.03 |
Total
| Total | 3,098,525,248.00 | 1,934,623,204.93 | 2,152,770,959.97 | 1,237,349,900.78 |
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: |
Type of markets orclients
| Type of markets or clients |
| Including: |
Type of contracts
| Type of contracts |
Including:
| Including: |
Sorted by time of goodstransfer
| Sorted by time of goods transfer |
Including:
| Including: |
Sorted by contractduration
| Sorted by contract duration |
Including:
| Including: |
Sorted by sales channels
| Sorted 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 RMB0.00, of which RMB0.00 is expected to be recognized as revenue in year 0, RMB0.00 is expected to berecognized as revenue in year 0, and RMB0.00 is expected to be recognized as revenue in year 0.Other description:
5. Investment income
Unit: yuan
| Item | Amount incurred in current period | Amount incurred in previous period |
Long-term equity investment incomechecked by cost method
| Long-term equity investment income checked by cost method | 700,000,000.00 |
Long-term equity investment gainsmeasured by employing the equity method
| Long-term equity investment gains measured by employing the equity method | 2,408,209.89 | 1,655,597.53 |
Investment income from disposal of long-term equity investment
| Investment income from disposal of long-term equity investment | （60,131.13） |
Investment income from purchasingfinancial products
| Investment income from purchasing financial products | 15,644,141.24 | 43,948,199.51 |
Total
| Total | 717,992,220.00 | 45,603,797.04 |
6. Other
NAXVIII. 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 | （2,401,700.24） |
Government subsidies included intocurrent profits and losses, except thegovernment subsidies which are closely
| Government subsidies included into current profits and losses, except the government subsidies which are closely | 28,755,938.72 |
related to the normal business operationsof the Company and conform to thenational policies and regulations, andcontinuously granted in accordance with acertain standard quota or amount.
In addition to the effective hedgingbusiness related to the company's normalbusiness operations, the profit and lossfrom fair value changes arising fromholding trading financial assets, tradingfinancial liabilities, as well as theinvestment income from disposal oftrading financial assets, trading financialliabilities, and salable 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 trading financial assets, trading financial liabilities, as well as the investment income from disposal of trading financial assets, trading financial liabilities, and salable financial assets. | 64,226,078.84 |
Income and expenditure other than thosementioned above
| Income and expenditure other than those mentioned above | （4,634,764.37） |
Less: Amount affected by income tax
| Less: Amount affected by income tax | 13,612,940.25 |
Amount of minority shareholders'equity affected
| Amount of minority shareholders' equity affected | 67,876.79 |
Total
| Total | 72,264,735.91 | -- |
Other profit and loss items that are consistent with the definition of non-recurring profit and loss:
□ Applicable ? Not applicable
There was no other profit and loss items that are consistent with the definition of non-recurring profit and loss.Explanation on defining the non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 on InformationDisclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses as recurring profit and loss items
□ 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 common shareholders of the Company | 8.17% | 2.1193 | 2.1193 |
| Net profit attributable to common shareholders of the Company after deduction of non-recurring profits and losses | 7.51% | 1.9478 | 1.9478 |
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 the
Overseas 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 indicated
Not applicable.
4. Other
NAIn case of a divergence of the interpretation the Chinese version of the annual report shall prevail.