Stock Code: 603605 Stock Abbreviation: ProyaBond Code: 113634 Bond Abbreviation: Proya convertible bond
Proya Cosmetics Co., Ltd.Semi-Annual Report 2023
Important Notes
I. The Board of Directors, Board of Supervisors, directors, supervisors and senior managementof the Company warrant that the content of the Semi-Annual Report is authentic, accurateand complete, free from false records, misleading statements and major omissions, and shallbe jointly and severally liable therefore.
II. All directors of the Company attended the Board meeting.
III. The Semi-Annual Report has not been audited.
IV. HOU Juncheng, chairman of the Company, and WANG Li, CFO (and Head of the AccountingDepartment) of the Company represent and warrant that the financial report in theSemi-Annual Report is authentic, accurate and complete.
V. Profit distribution plan or plan for conversion of capital reserve to share capital approved bythe Board during the Reporting PeriodBased on the total share capital as at the record date on which equity distribution is implemented, theCompany proposes to distribute to all shareholders registered a cash dividend of RMB3.80 (taxinclusive) per 10 shares. Based on the total share capital of 396,928,515 shares on June 30, 2023, it isestimated that the cash dividend to be distributed will amount to RMB150,832,835.70 (tax inclusive).No the capital reserve will be converted into share capital and no bonus shares will be given.In case of a change in the Company’s total share capital due to the conversion of convertible bondsbefore the record date for equity distribution, the Company maintains the said distribution ratios and yetadjusts the total distribution and conversion amounts.
VI. Risk declaration for the forward-looking statements
√ Applicable □ Not applicable
The Report contains forward-looking statements that involve the future plans, development strategies,etc. of the Company, yet do not constitute substantive undertakings of the Company to investors.Investors should exercise caution prior to making investment decisions.
VII. Are there any non-operating capital occupation by the controlling shareholder and its
related parties?No
VIII. Is there any external grantee provided in violation of the specified decision-making
procedures?No
IX. Are the majority of the directors unable to warrant the authenticity, accuracy andcompleteness of the Semi-Annual Report disclosed by the Company?No
X. Disclosure of major risksThe Company has disclosed the existing risks in this Report. These risks are discussed in detail in (I)Potential risks, V. Other disclosures, Section III Management Discussion and Analysis.
XI. Others
□ Applicable √ Not applicable
Contents
Section I Definitions ...... 5
Section II Company Profile and Key Financial Indicators ...... 5
Section III Management Discussion and Analysis ...... 9
Section IV Corporate Governance ...... 24
Section V Environmental and Social Responsibility ...... 26
Section VI Important Matters ...... 28
Section VII Shareholders and Changes in Shares ...... 53
Section VIII Information on Preference Shares ...... 59
Section IX Information on Bonds ...... 59
Section X Financial Report ...... 64
| Documents Available for Inspection | Financial statements signed and sealed by the legal representative, the CFO of the Company, and the head of accounting department |
| Original copies of all documents and announcements of the Company publicly disclosed in newspapers designated by China Securities Regulatory Commission during the Reporting Period |
Section I Definitions
In this report, unless the context otherwise requires, the following terms shall have the followingmeanings:
| Definition | ||
| Proya Cosmetics, this Company or the Company | refers to | Proya Cosmetics Co., Ltd. |
| CSRC | refers to | China Securities Regulatory Commission |
| SSE | refers to | Shanghai Stock Exchange |
| Articles of Association | refers to | Articles of Association of Proya Cosmetics Co., Ltd. |
| RMB/RMB ’0,000 | refers to | Renminbi Yuan/Renminbi 10,000 Yuan |
Section II Company Profile and Key Financial IndicatorsI. Company Information
| Chinese name of the Company | 珀莱雅化妆品股份有限公司 |
| Abbreviation of the Chinese name | 珀莱雅 |
| English name of the Company | Proya Cosmetics Co., Ltd. |
| Abbreviation of the English name | Proya |
| Legal representative of the Company | HOU Juncheng |
II. Contact Details
| Board Secretary | Securities Affairs Representative | |
| Name | WANG Li | WANG Xiaoyan |
| Contact address | 10/F, Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province | 10/F, Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province |
| Telephone | 0571-87352850 | 0571-87352850 |
| Fax | 0571-87352813 | 0571-87352813 |
| proyazq@proya.com | proyazq@proya.com |
III. Changes in General Information
| Registered address | No. 588, Xixi Road, Liuxia Neighborhood, Xihu District, Hangzhou City, Zhejiang Province |
| Historical changes in the Company’s registered address | For details, please see Announcement on Revision of the Articles of Association and Change in Business Registration (Announcement No. 2019-008) disclosed by the Company in the designated information disclosure media on February 27, 2019 |
| Office address of the Company | Proya Building, No.588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province |
| Postal code of the office address | 310023 |
| Company website | http://www.proya-group.com |
| proyazq@proya.com |
| Index for query of changes during the Reporting Period | Not applicable |
IV. Changes in Information Disclosure and Places for Inspection
| Name of designated newspapers for information disclosure by the Company | Shanghai Securities News, Securities Times |
| Website for the publication of the Semi-Annual Report | http://www.sse.com.cn |
| Place for inspection of the Semi-Annual Report of the Company | Board of Director’s Office, Proya Building, No.588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province |
| Index for query of changes during the Reporting Period | Not applicable |
V. Stock Overview
| Stock class | Stock exchange | Stock abbreviation | Stock code | Stock abbreviation prior to change |
| A share | Shanghai Stock Exchange | Proya | 603605 | None |
VI. Other Relevant Information
□ Applicable √ Not applicable
VII. Key Accounting Data and Financial Indicators of the Company(I) Key accounting data
Unit: Yuan Currency: RMB
| Key accounting data | In the Reporting Period (Jan - Jun) | Same period of prior year | Year-on-year change (%) |
| Operating revenue | 3,626,991,878.22 | 2,625,943,244.29 | 38.12 |
| Net profit attributable to shareholders of the listed company | 499,493,997.71 | 296,939,515.54 | 68.21 |
| Net profit attributable to shareholders of the listed company, after deducting non-recurring gains or losses | 478,891,852.27 | 280,897,418.53 | 70.49 |
| Net cash flows from operating activities | 1,181,268,072.03 | 713,782,130.38 | 65.49 |
| End of the Reporting Period | End of prior year | Year-on-year change (%) | |
| Net assets attributable to shareholders of the listed company | 3,830,453,154.15 | 3,524,488,659.96 | 8.68 |
| Total assets | 6,669,650,520.45 | 5,778,071,824.19 | 15.43 |
(II) Key financial indicators
| Key financial indicators | In the Reporting Period | Same period of prior year | Year-on-year change (%) |
| (Jan - Jun) | |||
| Basic EPS (RMB/share) | 1.25 | 1.06 | 17.92 |
| Diluted EPS (RMB/share) | 1.24 | 1.04 | 19.23 |
| Basic EPS after deducting non-recurring gains or losses (RMB/share) | 1.20 | 1.00 | 20.00 |
| Weighted average ROE (%) | 13.29 | 10.10 | Up by 3.19 percentage points |
| Weighted average ROE after deducting non-recurring gains or losses (%) | 12.74 | 9.56 | Up by 3.18 percentage points |
Notes to key accounting data and financial indicators
□ Applicable √ Not applicable
VIII. Differences in Accounting Data under Chinese and International Accounting Standards
□ Applicable √ Not applicable
IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Non-recurring gains and losses item | Amount | Notes (if applicable) |
| Gains or losses on disposal of non-current assets | -217,694.21 | |
| Tax refund or reduction approved beyond authority or without official approval or on an occasional basis | ||
| Government grants as included in the gains or losses of current period (note: Government grants that are closely related to the normal business, in compliance with the relevant policies and continuously entitled with specific amount according to certain standards are not included) | 34,639,076.23 | |
| Fund occupation fees charged from non-financial businesses included in the current gains and losses | ||
| Gains arising from investment costs for acquisition of subsidiaries, associates and joint ventures less than the fair values of attributable identifiable net assets of the invested entity at the time of acquisition | ||
| Gains and losses on non-monetary assets exchange | ||
| Gains and losses on authorizing others to invest or manage assets |
| Provisions for various asset impairments due to force majeure factors such as natural disasters | ||
| Gains and losses on restructuring of debts | ||
| Corporate restructuring expenses, such as re-settlement expenses and integration cost | ||
| Gains and losses in excess of the fair value generated from obviously unfairly priced transactions | ||
| Net gains and losses of subsidiaries generated from the merger of companies under common control from the beginning of the period to the date of merger | ||
| Gains and losses arising from contingent events unrelated to the Company’s normal operations | ||
| Gains and losses from changes in fair value arising from financial assets held for trading, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, and investment gain from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments, except for effective hedging related to the Company’s normal operations | ||
| Reversal of provision for impairment of receivables and contract assets individually tested for impairment | 421,794.92 | |
| Gains or losses from entrusted loans | ||
| Gains and losses arising from changes in the fair value of investment property subsequently measured with the fair value model | ||
| Impact of one-time adjustments on the current gains and losses according to the requirements of tax and accounting laws and regulations on the current gains and losses | ||
| Custody fee income from entrusted operations | ||
| Other non-operating revenue and expenses other than the above items | -873,327.35 | |
| Other gains and losses items under the definition of non-recurring gains and losses | ||
| Less: Income tax impact | 7,638,568.45 |
| Impact of minority shareholders’ equity (after tax) | 5,729,135.70 | |
| Total | 20,602,145.44 |
The reasons should be explained for the non-recurring gains and losses items defined by the Companyaccording to the definition of Explanatory Announcement on Information Disclosure for CompaniesOffering Their Securities to the Public No.1--Non-recurring Gains and Losses, and the non-recurringgains and losses items listed in Explanatory Announcement on Information Disclosure for CompaniesOffering Their Securities to the Public No.1--Non-recurring Gains and Losses as recurring gains andlosses items.
□ Applicable √ Not applicable
X. Others
□ Applicable √ Not applicable
Section III Management Discussion and Analysis
I. Description of the Industry in Which the Company Operates and Primary Businesses of theCompany during the Reporting Period(I) Primary businesses and productsThe Company is committed to building a new domestic cosmetics industry platform, and is primarilyengaged in the R&D, production and sales of cosmetic products. Main brands owned by the Companyinclude Proya, TIMAGE, Off&Relax, Hapsode, CORRECTORS, INSBAHA, UZERO and ANYA. TheCompany’s own brands cover fields such as popular exquisite skincare, make-up, body&hair, andhigh-efficiency skincare:
1. Popular exquisite skincare
(1) Proya, focusing on skincare technology, is designed for young white-collar female customers. Itsproducts are generally priced between RMB200-500, and sold both online and offline.
(2) Hapsode, customized for young skin, focuses on college students and other young female customers.Its products are generally priced between RMB50-150, and mainly sold online.
2. Make-up
TIMAGE, a professional make-up brand with a new Chinese style, is generally priced betweenRMB150-300, and only sold online.
3. Body&hair
Off&Relax, developed and produced in Japan, focuses on scalp health. Its products are generally pricedbetween RMB150-200, and mainly sold online.
4. High-efficiency skincare
CORRECTORS, a high-efficiency skincare brand, is generally priced between RMB260-600, and onlysold online.
(II) Business models
1. Sales models
Mainly online sales, supplemented by offline sales.Online sales are mainly conducted through direct sales and distribution. Direct sales are mainly based onplatforms such as Tmall, TikTok, JD, Kwai, and Pinduoduo, and distribution is based on platformsincluding Taobao, JD, and Vipshop.
Offline sales are mainly operated through dealers. Channels include cosmetics franchise stores,supermarkets, and single-brand stores.
2. Production/R&D models
Self-production is the main production model of the Company, supplemented by OEM production. Theskincare products of the Company are self-produced and OEM-produced. The Company has builtskincare and make-up factories.Independent R&D is the main R&D model of the Company, supplemented byindustry-university-research cooperation. The Company maintains R&D cooperation with front-endresearch institutions and high-quality raw material suppliers including Institute of Microbiology,Chinese Academy of Sciences, Zhejiang University of Technology, BASF China, Ashland China, DSMShanghai, LIPOTRUE, S.L., and Shenzhen Siyomicro Bio-tech.
(III) Industry overviewAccording to the Guidelines for the Industry Classification of Listed Companies issued by the CSRC,the Company falls under chemical raw material and chemical product manufacturing (classification code:
C26); according to Industrial Classifications for National Economic Activities (GB/T 4754-2017), theCompany falls under the category of manufacturing of daily chemical products (C268), as well asmanufacture of cosmetics (C2682).According to the National Bureau of Statistics, from January to June 2023, the total retail sales ofconsumer goods reached RMB22,758.8 billion, a YOY increase of 8.2%; the total retail sales ofcosmetics reached RMB207.1 billion, a YOY increase of 8.6% (the retail sales value from the businessesabove a certain size).
II. Analysis of Core Competitiveness during the Reporting Period
√ Applicable □ Not applicable
In the face of rapid changes in the external market environment, the Company was firmly committed tothe leadership and implementation of the 6*N Strategy. We established a precise operation managementsystem highlighting “R&D, products, content, operations”, and built a self-driven organizationhighlighting “culture-strategy-mechanism-talent”.We continued to make our “hero products” more competitive, and developed and improved the portfolioof “hero products” based on our keen insight into consumer needs. This was possible because of ourstrong R&D strength and our ability to rapidly respond to internal organizational requirements.A self-driven agile organization was built to serve the second-brand product pipeline and the brands atthe incubation stage. By building our own MCN team and content marketing team, we strengthened theinternal circular ecology and fostered the external ecosystem of Proya brand.
III. Business Discussion and Analysis(I) Finance analysis
1. Year-on-year growth in operating revenue
Operating revenue RMB3.627 billion, a YOY increase of 38.12%Including: primary operating revenue of RMB3.619 billion, a YOY increase of 38.36%Other operating revenue of RMB8 million
Primary operating revenue:
(1) Breakdown by channel
| By channel | Amount (RMB100 million) | Change in H1 2023 YOY (%) | Change in 2022 YOY (%) | Change in 2021 YOY (%) | Change in 2020 YOY (%) | Proportion of H1 2023 (%) | Proportion of 2022 (%) | Proportion of 2021 (%) | Proportion of 2020 (%) | |
| Online | Direct sales | 26.59 | 52.36 | 59.79 | 76.16 | 79.63 | 73.49 | 70.40 | 60.66 | 42.45 |
| Distribution | 6.71 | 19.04 | 16.79 | 8.56 | 34.36 | 18.54 | 20.58 | 24.27 | 27.56 | |
| Subtotal | 33.30 | 44.23 | 47.50 | 49.54 | 58.59 | 92.03 | 90.98 | 84.93 | 70.01 | |
| Offline | Cosmetics stores | 2.41 | 5.64 | -11.96 | -40.52 | -19.28 | 6.66 | 6.96 | 10.88 | 22.56 |
| Others | 0.48 | -39.15 | -32.32 | -30.50 | -32.81 | 1.31 | 2.06 | 4.19 | 7.43 | |
| Subtotal | 2.89 | -5.81 | -17.62 | -38.03 | -23.12 | 7.97 | 9.02 | 15.07 | 29.99 | |
| Total | 36.19 | 38.36 | 37.69 | 23.28 | 20.26 | 100.00 | 100.00 | 100.00 | 100.00 | |
Note: The percentage of sales from each channel is the proportion of its sales in primary operatingrevenue.
(2) Breakdown by brand
| By brand | Amount (RMB100 million) | Change in H1 2023 YOY (%) | Change in 2022 YOY (%) | Change in 2021 YOY (%) | Change in 2020 YOY (%) | Proportion of H1 2023 (%) | Proportion of 2022 (%) | Proportion of 2021 (%) | Proportion of 2020 (%) | |
| Own brands | Proya | 28.92 | 35.86 | 37.46 | 28.25 | 12.43 | 79.87 | 82.74 | 82.87 | 79.66 |
| TIMAGE | 4.14 | 78.65 | 132.04 | 103.48 | - | 11.45 | 8.99 | 5.33 | - | |
| OR | 0.97 | 94.17 | 509.93 | - | - | 2.69 | 1.98 | - | - | |
| Hapsode | 1.32 | 64.80 | 188.27 | - | - | 3.64 | 2.94 | - | - | |
| Other brands | 0.84 | 10.71 | -60.11 | -5.96 | 36.91 | 2.35 | 2.57 | 8.85 | 11.59 | |
| Subtotal | 36.19 | 41.02 | 40.74 | 26.63 | 19.11 | 100.00 | 99.22 | 97.05 | 94.48 | |
| Agency brands | Cross-border agency brands | 0.00 | -100.00 | -63.01 | -34.04 | 44.09 | 0.00 | 0.78 | 2.95 | 5.52 |
| Total | 36.19 | 38.36 | 37.69 | 23.28 | 20.26 | 100.00 | 100.00 | 100.00 | 100.00 | |
Note: The percentage of sales of each brand is the proportion of its sales in primary operating revenue.The sales of OR and Hapsode were incorporated into other brands for 2021 and prior years, but theyhave been shown separately since 2022.
(3) Breakdown by category
| By category | Amount (RMB100 million) | Change in H1 2023 YOY (%) | Change in 2022 YOY (%) | Change in 2021 YOY (%) | Change in 2020 YOY (%) | Proportion of H1 2023 (%) | Proportion of 2022 (%) | Proportion of 2021 (%) | Proportion of 2020 (%) |
| Skincare (including cleansing) | 30.56 | 38.06 | 38.56 | 22.70 | 11.38 | 84.44 | 86.20 | 86.10 | 86.50 |
| Make-up | 4.66 | 32.30 | 21.70 | 32.97 | 181.91 | 12.87 | 11.82 | 13.38 | 12.41 |
| Body&hair | 0.97 | 94.17 | 509.93 | - | - | 2.69 | 1.98 | - | - |
| Others | 0.00 | 0.00 | -100.00 | -41.05 | 0.47 | 0.00 | 0.00 | 0.52 | 1.09 |
| Total | 36.19 | 38.36 | 37.69 | 23.28 | 20.26 | 100.00 | 100.00 | 100.00 | 100.00 |
Note: The sales of body&hair products were incorporated into skincare (including cleansing) for 2021and prior years, but they have been shown separately since 2022.
2. Year-on-year growth in net profit
The net profit attributable to shareholders of the listed company amounted to RMB499 million, a YOYincrease of 68.21%The net profit attributable to shareholders of the listed company after deducting non-recurring profits orlosses amounted to RMB479 million, a YOY increase of 70.49%
| Indicator | H1 2023 | 2022 | 2021 | 2020 | Notes |
| 1. Net profit margin | 14.56% | 13.02% | 12.02% | 12.04% | Mainly due to the increase in gross profit margin and the decrease in provision for asset impairment loss. |
| 2. Gross profit margin | 70.51% | 69.70% | 66.46% | 63.55% | Primary reasons: 1. Increased percentage of online direct sales; 2. Hero product strategy. |
| 3. Sales expense ratio | 43.56% | 43.63% | 42.98% | 39.90% | |
| Including: image promotion fee rate | 37.92% | 37.90% | 36.12% | 32.68% | |
| 4. Administrative expense ratio | 5.30% | 5.13% | 5.12% | 5.44% | |
| 5. R&D expense ratio | 2.52% | 2.00% | 1.65% | 1.92% | Primary reasons: 1. R&D expenses increased by 49.87% or RMB30.45 million YOY; 2. The parent company’s R&D expense ratio for January to June 2023 was 5.10% (compared with 4.69% for the same period last year). |
| 6. Accounts receivable turnover rate (times) | 74.05 | 53.04 | 21.88 | 15.53 | Primary reasons: 1. Operating revenue for January to June 2023 recorded a YOY increase; 2. Decline of the average balance of accounts receivable. |
| 7. Accounts receivable turnover days (days) | 4.86 | 6.79 | 16.45 | 23.18 | |
| 8. Inventory turnover rate (times) | 3.43 | 3.46 | 3.39 | 3.50 | |
| 9. Inventory turnover days (days) | 105.08 | 103.91 | 106.19 | 102.86 |
(II) Discussion and analysis of business conditions
1. New product strategy
Proya:
During the Reporting Period, we deepened the “hero product strategy” by focusing on three family seriesproducts, namely Elastic Brightening Series, Deep Ocean Energy Series and Advanced Original RepairSeries. For the “Elastic Brightening Series”, the core hero product, Elastic Brightening Energy Essence,has been upgraded to version 3.0. The establishment of exclusive ingredient barriers has significantlyenhanced the product’s efficacy and user experience. We have also improved its sustainability, therebyincreasing its irreplaceability among young consumers. The Elastic Brightening Series make-up waterand lotion cream have been upgraded and adjusted to better meet the efficacy needs of “young skin”,which have continuously reinforced the customer mindset of the Elastic Brightening Series. Regardingthe “Deep Ocean Energy Series”, the Deep Ocean Energy Facial Mask and Deep Ocean Energy FirmingEye Cream have both launched 2.0 versions. The Deep Ocean Energy Moisture Lotion has also beenupgraded to provide a more enriched product experience, catering to consumers’ diverse needs frommultiple dimensions. In addition, the “Recycling Series” featuring moisturizing effects and the “SunAround Skin Care Mineral Sunscreen Serum” single product for sensitive skin were launched.In the first half of 2023, the Proya brand ranked first in the essence category, second in the face creamcategory, second in the face mask category, and fifth in the eye cream category on the Tmall platform.
TIMAGE:
During the Reporting Period, TIMAGE constantly broadened market horizons and improved categoryarrangement. While maintaining a leading position in core hero products such as highlighters,contouring, concealers, primers, and setting sprays within the existing advantageous product categories,we continuously increased market share.In March, we introduced the brand new “Vigorous and Flowing Jade Series” and launched three newproducts: the “Tri-color Blush Palette”, the “All-in-one Brow Palette”, and the “Matte Lipstick”. Amongthem, the flagship product “Tri-color Blush Palette” has shown remarkable performance, ranking secondin the blush category on Tmall in the first half of 2023. During the “618” shopping festival, we launchedthe all-new “Original Radiant Cushion Foundation” and upgraded the “Matte Glow Pressed Powder”,both of which received positive market feedback.
Off&Relax (OR):
During the Reporting Period, we continued to increase the market penetration of our star hero products,“OR Spa Shampoo Refresh” and “OR Spa Hair Mask”. During the “618” shopping festival, the shampooranked second on Tmall’s best-selling list for international imported shampoos, while the hair masqueranked first on the best-selling list for hair masques.We have continuously nurtured a consumer mindset that recognizes us as an “expert in scalp health”.We launched a new pre-shampoo category called “Purifying Scalp Cleanser” to meet the needs ofmiddle-and high-end consumers who prioritize a superior cleansing experience for their scalp. Duringthe “618” shopping festival, our “Purifying Scalp Cleanser” ranked second in the pre-shampoo categoryon Tmall.
Hapsode:
During the Reporting Period, we focused on building our product categories and enhancing consumerawareness that recognizes Hapsode as an “expert in oily skin care”. We introduced the upgradedproducts: Cleansing Honey 2.0, Multi-Acid Clay Mask 2.0 and Olive Oil Face Mask 2.0. We alsore-launched three core products of our oil-control family: Oil Control Essence 2.0, Pore Refining Serumand Oil Control Loose Powder. These improvements aim to enhance the overall skincare routine for oilyskin.
2. New marketing strategy
Proya:
During the Reporting Period, the Proya brand has centered its brand strategy around two brand keywords:
“youthfulness” and “technological prowess”. Embracing the “spirit of exploration”, the brand hasaddressed the multifaceted factors behind specific skin concerns. The following brand marketinginitiatives have been undertaken:
(1) “Thank You for Participation” in January. In this event, we expressed the most important “thank you”to our users through short films posted in user stories and offline user story exhibitions. We expressedour gratitude to them for their being with us throughout 2022.
(2) “Just the Right Warmth of Love” on Valentine’s Day in February. In this event, we joined handswith Jingdezhen Royal Kiln Museum to create a customized collection of “Royal Kiln Duo Cups”.These cups are designed to deliver the perfect temperature to every perfect couple out there, and toanyone who dares to try something new.
(3) “Gender is not the borderline, prejudice is” on Women’s Day in March. In this event, we creatededucational picture books focusing on gender equality, produced thematic short films adapted from realstories, and collaborated with law firms to launch the “Proya Public Welfare Labor Legal ConsultationService”. Through concrete efforts, we not only encouraged mention and discussion of “gender equality”on Women's Day, but helped push for the issues to be considered on all other days of the year.
(4) On Mother’s Day in May, we showed care for mothers and acknowledged both the visible physicallabor and the invisible mental labor they undertake in as they support their families. We mentioned that“Moms can take care of the family, but every family member can do the same”. Through the short film“More Than Just Moms”, we called on every family member to not only recognize the goodness ofmothers but also collectively take on family responsibilities.
(5) “Scientific Formulas, Scientific Choices for the Skin” in June. In this event, we organized 7 “DayCoffee and Night Alcohol Pop-Up stores” in 6 cities around China. The purpose of these pop-up storeswas to communicate the brand’s concept of “scientific formulas” to consumers. Through offlineinteractions between the stores and consumers, participants had the opportunity for in-depth experienceof the products and technological concepts.
TIMAGE:
During the Reporting Period, TIMAGE continued to present the concept of “Chinese make-up, originalbeauty” with craftsmanship and professionalism. TIMAGE carried out the following brand marketingevents:
(1) Newly launched the “Vigorous and Flowing Jade” series colorful brilliance products in March. Inthis event, we defined Chinese aesthetics. The concept advertisement of the new “Vigorous and FlowingJade” series was unveiled. Instructor TANG Yi hosted a master class, collaborating with beauty bloggersto create the “Vigorous and Flowing Jade Make-up” and sparking a trend of imitation make-up. Anoffline Vigorous and Flowing Jade press conference was held in collaboration with celebrities GAO Yeand MA Sichun appearing in person to show their support.
(2) “Beyond Love” in May. In this event, we joined hands with three couples who have been together fora long time to shoot a short film that explores how to draw energy from the inherent beauty of life in ourfast-paced era, and how to better love our partners, ourselves, and life. We also launched the TIMAGE520 gift box, which enabled the brand to convey emotions and provide special treatment, expanding thebrand’s value.
Off&Relax (OR):
During the Reporting Period, OR conducted a series of brand activities centered around the brandphilosophy of “Purifying from the skin to the body and mind”. These activities encompassed variousaspects such as physical and mental well-being, and embracing nature. Relevant events are as follows:
(1) In January, we joined hands with the “Cao Sichuan Ride-Hailing” app platform to launch the“Switching to off mode on the way home” event, allowing everyone to find release from the fatigue ofthe year and taking a relaxing trip back home.
(2) In March, we introduced a limited edition Sakura Season package, and collaborated with youngillustrator SUN Yijia to create it. Through the “Chasing Spring Blossoms, let’s set off immediately”campaign, we invited everyone to immerse themselves in nature and pursue the essence of spring.
(3) In April, in celebration of Earth Day, we launched the “Off&Relax recycling program”. For thisproject, we collaborated with key opinion leaders (KOLs) and ordinary individuals to unlock the“second life” of empty bottles and transform them into a meaningful part of daily life through creativeendeavors. We also advocated for the purchase of refillable products to reduce the generation of emptybottles.
(4) In June, during the “618” shopping festival, we jointly launched the “Guide for Life Metabolism”campaign, advocating for busy urban people to instantly let their troubles go and reclaim their lives. Inaddition, we collaborated to launch the OffNight bar, a “life metabolism” book list, and soundmeditation classes to provide everyone with various ways to “let it go”.
3. New channel strategy
Proya:
Online:
(1) Tmall flagship store
During the Reporting Period, we continued to consolidate the “hero product” portfolio strategy anddevelop star hero products. We strengthened the category penetration of the Deep Ocean Energy Creamand Elastic Brightening Face Masks, solidified the position of the Elastic Brightening Essence 3.0 as asuper hero product, and further enhanced the penetration rate of high-value customers. We reduced costsand improved efficiency, optimized the advertising structure, and deepened collaboration betweenon-site and off-site audiences. We continued to optimize the product structure, focused on expanding ourcustomer base, increased customer retention among existing customers, and significantly improvedcustomer satisfaction with customer service and logistics.During the “618” shopping festival in 2023, the gross merchandise volume (GMV) of Proya’s Tmallflagship store ranked fourth on Tmall Beauty, and ranked first among Chinese products. In the first halfof 2023, the GMV of Proya’s Tmall flagship store ranked fourth on Tmall Beauty, and ranked firstamong Chinese products.
(2) TikTok
During the Reporting Period, we strengthened the comprehensive operations of TikTok, optimized thethree major series of portfolio accounts (Elastic Brightening Series, Deep Ocean Energy Series,Advanced Original Repair Series), and increased the proportion of product cards. We enhanced therefined operation of the platform, upgraded the product structure, and improved the conversion rate ofinfluencers and product recommendations. We also promoted the increase in the number of membersand raised the average customer spending.
During the “618” shopping festival in 2023, the GMV of Proya ranked sixth on TikTok Beauty, andranked first among Chinese products. In the first half of 2023, the GMV of Proya ranked third onTikTok Beauty, and ranked first among Chinese products.
(3) JD
During the Reporting Period, we steadily advanced our strategy of focusing on key hero products,continuously and efficiently increased our market share, and enhanced brand visibility. We improvedour product structure, with a focus on star hero products, and improved the ranking of our core productcategories. We valued the refined operation of our target audience, optimized our promotion methods,and improved the effectiveness of our promotions. We optimized our user operation system, efficientlyattracted new customers, and increased customer retention rate among existing customers.During “38” activity and the “618” shopping festival in 2023, the GMV of Proya ranked first amongChinese products on JD Beauty; In the first half of 2023, the GMV of Proya ranked seventh on JDBeauty, and ranked first among Chinese products.
Offline:
(1) Cosmetics store channels: Leveraging the strength of the Proya brand, we expanded cooperationwith new multi-brand stores. During holidays such as Women’s Day (March 8) and the InternationalLabor Day (May 1), we enhanced the retail management of store activities. In addition, the launch of ournew anti-aging star product, the Capture Totale Series, has helped retail stores achieve an increase inaverage transaction value.
(2) Department stores channel: We further invested in the construction of counters in departmentstores, and simultaneously promoted direct cooperation with multiple retail systems nationwide. We alsoenhanced online and offline integration, maintained the brand’s “Science-based Formula” theme, andconducted offline pop-up activities of “Day Coffee and Night Alcohol Pop-Up stores” in multiple citiesand locations.
4. New organizational strategy
(1) Organization: We continued to optimize the brand planning strategy by establishing a collaborativemodel between product, delivery middle office and agile front-end processes. We deepened theapplication of digital technology, and built a flexible and efficient organizational optimizationmechanism through platform and digitization empowerment.
(2) Talent: We promoted the talent supply chain mechanism for young and international talent based onbusiness needs, and increased the introduction of R&D, design and brand development talent. By takingan approach that encourages learning through practice, and which combines training with application,we rapidly identified promising young talent to build teams that are aligned with the company values,vibrant, highly competitive, and self-driven. Through dual-channel management, we enhanced talentdensity, promoted talent development and built an olive-shaped talent pipeline.
(3) System: We continued to deepen the performance culture featuring high investment, highperformance and high returns; enhanced the performance management system emphasizing targets,process and results; and based on our business strategy, flexibly used the diversified incentive systemcovering short-term (monthly, quarterly performance and project incentives), middle-term (annualperformance dividends) and long-term (equity incentives and partnership) incentives. Wecomprehensively applied the project system and built a three-level project management system thatincludes company, divisional and departmental levels, to work on the end-to-end main value chainprocess development and internal control projects and continue to consolidate organizational
capabilities.
5. New R&D strategy
During the Reporting Period, the Company continued to advance the establishment of the InternationalAcademy of Sciences, focusing on researching skin texture, design of active ingredients, and efficacyverification. The R&D Innovation Center maintained its dedication to the research and development ofskincare and new cosmetic products. Currently, the Longwu R&D Center in Hangzhou and ShanghaiR&D Center are under construction, and preparation is underway for the Japan R&D Center.
(1) Patents: During the Reporting Period, we have filed 5 new national invention patents, 2 utilitymodel patents, and 11 design patents, totaling 18 new patent applications. Additionally, we have beengranted 4 national invention patents, 5 utility model patents, and 8 design patents, totaling 17 newlyacquired patents. As of the end of the Reporting Period, the Company owned 111 nationally authorizedinvention patents, 24 utility model patents, and 99 appearance patents, totaling 234 patents.
(2) Standard release: During the Reporting Period, as a drafter, we participated in the release of 2national standards: “Validation criteria for analytical results of cosmetics using chromatographictechniques” GB/T 42462-2023, and “Determination of dichlorobenzyl alcohol and chlorophensin incosmetics - High performance liquid chromatography” GB/T 42423-2023. Additionally, we have alsoparticipated in the release of 2 group standards: “Efficacy Evaluation Method for Facial Pore-TighteningCosmetics” T/ZHCA023-2023, and “Whitening Moisturizing Cream” T/ZZB 0948-2023. As of the endof the Reporting Period, the Company had led or participated in the development of 16 nationalstandards, 3 industry standards, and 18 group standards.
(3) Awards and achievements: During the Reporting Period, the Company received several awards atthe China Fragrance, Flavor and Cosmetics Technology Conference, including “Outstanding R&D Teamin the Cosmetics Industry”, “Outstanding Engineer in the Cosmetics Industry”, and “Emerging Engineerin the Cosmetics Industry”. We were honored with the Excellence Participation Award at the“2020-2022 Zhejiang Province Cosmetics Safety Popular Science Week” by Zhejiang ProvincialMedical Products Administration. In addition, we released a research paper on core technologicalresearch on Deep Ocean Energy Series in the periodical Skin Health and Disease, published by theBritish Association of Dermatologists.And the research paper Research on preparation and properties ofcrystalline amino acid cleaning cream was published in the periodical DETERGENT & COSMETICS.
(4) Strategic cooperation: During the Reporting Period, we further deepened our existing strategicpartnerships and enhanced collaborations with Zhejiang University and Hangzhou Dianzi University inareas such as materials, functional active substances, and skin texture.
6. New supply chain guarantee
(1) During the Reporting Period, the supply chain achieved complete digital management from productdevelopment to product delivery. This was achieved through data interconnection and communicationbetween various collaborative systems such as SRM, SAP, APS, MFS, MES, WMS, and TMS. Itresulted in transparent material procurement, transparent production processes, transparent productinspections, transparent equipment operations, and transparent logistics delivery throughout the supplychain. In addition, the intelligentization of the procurement platform, production scheduling and logisticsoperations has improved the efficiency of data transmission and business collaboration between thesupply chain business sectors. This continuous improvement has aided brand promotions and campaigns.
(2) During the Reporting Period, Huzhou production site of the Company added multiple automatedproduction lines for facial masks and purchased 2 units of 2-ton German EKATO emulsifying pots. Weoptimized the factory area’s road planning, strengthened the construction of the safety risk control
system, and improved the standardization of safety management. We organized all staff to activelyparticipate in fire safety education, training, and assessment. The intelligent logistics warehouse wasofficially put into trial operation, with over 95% of the business operations inside the warehouseachieving unmanned operation. Our smart logistics has become an industry benchmark.
Material changes in business conditions of the Company during the Reporting Period and mattersthat occurred during the Reporting Period that had and are expected to have significant impactson business conditions of the Company
□ Applicable √ Not applicable
IV. Overview of Business Operations during the Reporting Period(I) Analysis of primary business1 Analysis of changes in items related to financial statements
Unit: Yuan Currency: RMB
| Item | Amount for the current period | Amount for the same period in the previous year | Change (%) |
| Operating revenue | 3,626,991,878.22 | 2,625,943,244.29 | 38.12 |
| Operating costs | 1,069,489,813.93 | 837,034,743.80 | 27.77 |
| Selling expenses | 1,579,997,275.26 | 1,116,921,650.63 | 41.46 |
| General and administrative expenses | 192,127,158.56 | 127,140,154.83 | 51.11 |
| Financial expenses | -30,353,566.91 | -14,804,776.98 | Not applicable |
| R&D expenses | 91,520,865.15 | 61,066,694.07 | 49.87 |
| Net cash flows from operating activities | 1,181,268,072.03 | 713,782,130.38 | 65.49 |
| Net cash flows from investing activities | -102,775,712.36 | -176,651,474.45 | Not applicable |
| Net cash flows from financing activities | -252,230,919.73 | -220,919,542.24 | Not applicable |
Reasons for changes in operating revenue: Mainly due to increased online sales.Reasons for changes in operating costs: Mainly due to corresponding increased operating revenue.Reasons for changes in selling expenses: Selling expenses for January to June 2023 amounted toRMB1.580 billion, accounting for 43.56% of operating revenue (compared with 42.53% for the sameperiod last year). Selling expenses increased by RMB463 million, a YOY increase of 41.46%, which isprimarily because image promotion expenses increased by RMB460 million, a YOY increase of 50.34%,mainly due to new brand incubation, and the exploration of offline and overseas channels.Reasons for changes in general and administrative expenses: General and administrative expenses forJanuary to June 2023 amounted to RMB192 million, accounting for 5.30% of operating revenue(compared with 4.84% for the same period last year). General and administrative expenses increased byRMB64.99 million, a YOY increase of 51.11%, mainly due to the YOY increase in restricted shareequity incentive fees.Reasons for changes in financial expenses: Mainly due to a decrease in financial expenses of RMB14.86million as a result of the combined effect of interest income and exchange gains and losses.Reasons for changes in R&D expenses: R&D expenses for January to June 2023 amounted to
RMB91.52 million, a YOY increase of RMB30.45 million, accounting for 2.52% of operating revenue(compared with 2.33% for the same period last year). The parent company’s R&D expense ratio forJanuary to June 2023 was 5.10% (compared with 4.69% for the same period last year).Reasons for changes in net cash flows from operating activities: Mainly due to: 1. A YOY increase inoperating revenue and the increase in cash received from the sale of goods; 2. The decrease in thepayment for goods; 3. The increase in the payment for image promotion expenses.Reasons for changes in net cash flows from investing activities: Net flow increased by RMB73.88million YOY, mainly due to the new equity investment of RMB90 million in Hangzhou GolongHoldings Co. Ltd. (renamed Gaolang Holdings Co., Ltd. ) in the previous period, which did not occur inthe current period.Reasons for changes in net cash flows from financing activities: Insignificant YOY change.
2 Details of material changes in business type, components or source of profits during thecurrent period
□ Applicable √ Not applicable
(II) Description of material changes in profits caused by non-primary business activities
□ Applicable √ Not applicable
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
1. Assets and liabilities
Unit: Yuan
| Item | Closing amount of the current period | To total assets (%) | Closing amount of the previous period | To total assets (%) | Change ratio YOY (%) | Cause |
| Receivables financing | 1,350,925.86 | 0.02 | Not applicable | Mainly due to the increased balance of bank acceptance notes as of the end of the period. | ||
| Other receivables | 10,143,560.07 | 0.15 | 73,564,083.63 | 1.27 | -86.21 | Mainly because the annual rebates receivable from certain e-commerce platforms for the previous year were recovered during the current period. |
| Right-of-use assets | 15,947,216.77 | 0.24 | 6,410,634.25 | 0.11 | 148.76 | Mainly due to the additionally leased business premises during the current period. |
| Deferred tax assets | 67,181,222.24 | 1.01 | 48,305,338.82 | 0.84 | 39.08 | Mainly due to the increase in deferred tax assets provided for impairment of inventories, internal unrealized gains and losses and the effect of share-based payments |
| during the current period. | ||||||
| Other non-current assets | 16,869,569.52 | 0.25 | 5,554,726.06 | 0.10 | 203.70 | Mainly due to the increase in prepayments for long-term asset purchase funds. |
| Accounts payable | 1,063,096,364.64 | 15.94 | 475,427,484.23 | 8.23 | 123.61 | Mainly due to the YOY increase in sales, resulting in an increase of RMB510 million in payables for goods. |
| Employee benefits payable | 79,784,211.66 | 1.20 | 124,938,749.36 | 2.16 | -36.14 | Mainly due to the opening amount of the period includes the unpaid year-end bonus payable for the year 2022. |
| Non-current liabilities due within one year | 3,864,732.04 | 0.06 | 2,549,452.14 | 0.04 | 51.59 | Mainly due to the transfer of lease liabilities due within one year. |
| Lease liabilities | 11,281,561.28 | 0.17 | 3,718,119.41 | 0.06 | 203.42 | Mainly due to the additionally leased business premises during the current period. |
| Estimated liabilities | 9,143,868.44 | 0.14 | 59,282,928.68 | 1.03 | -84.58 | Mainly due to the increased efforts in adjusting the department store channel, refinement of the cosmetics store channel and contraction of the supermarket channel during the previous period. |
| Paid-in capital (or share capital) | 396,928,515 | 0.06 | 283,519,469 | 0.05 | 40.00 | Mainly due to the Company’s implementation of a capital reserve capitalization plan during the current period. |
| Minority interests | 39,401,771.32 | 0.01 | 12,734,670.33 | 0.00 | 209.41 | Mainly due to the increase in net profit earned by our subsidiary Ningbo TIMAGE Cosmetics Co., Ltd. during the current period. |
Other descriptionNone
2. Overseas assets
√ Applicable □ Not applicable
(1) Scale of assets
Including overseas assets of RMB225,520.9 thousand, accounting for 3.38% of total assets.
(2) Statement on high proportion of overseas assets
□ Applicable √ Not applicable
Other descriptionNone
3. Restrictions on prime assets as of the end of the Reporting Period
√ Applicable □ Not applicable
Currency: RMB
| Item | Book value as of the end of the period | Cause for restrictions |
| Monetary capital | 7,362,952.89 | Including transformer deposit, Pinduoduo deposit, Tmall deposit and Alipay deposit, etc. |
| Total | 7,362,952.89 |
4. Other description
□ Applicable √ Not applicable
(IV) Analysis of investment
1. Overall analysis of external equity investments
√ Applicable □ Not applicable
Currency: RMB
| Item | Closing amount | Opening amount | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investments in other equity instruments | 146,402,400.00 | 146,402,400.00 | 146,402,400.00 | 146,402,400.00 | ||
| Investment in joint ventures | 3,066,898.78 | 3,066,898.78 | 3,068,948.16 | 3,068,948.16 | ||
| Investment in associates | 221,895,173.25 | 92,018,511.89 | 129,876,661.36 | 216,906,642.52 | 81,442,213.22 | 135,464,429.30 |
| Total | 371,364,472.03 | 92,018,511.89 | 279,345,960.14 | 366,377,990.68 | 81,442,213.22 | 284,935,777.46 |
For details, see description in “17. Long-term equity investments” and “18. Investments in other equityinstruments”, “VII. Notes to the Items of Consolidated Financial Statements”, “Section X FinancialReport”.
(1). Major equity investments
□ Applicable √ Not applicable
(2). Major non-equity investments
□ Applicable √ Not applicable
(3). Financial assets measured at fair value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Category of assets | Opening amount | Gains and losses from changes in fair value during the current period | Cumulative amount of changes in fair value stated as equity | Provision for impairment during the current period | Purchase amount for the current period | Amount sold/redeemed for the current period | Other changes | Closing amount |
| Others | 146,402,400.00 | 146,402,400.00 | ||||||
| Total | 146,402,400.00 | 146,402,400.00 |
Investment in securities
□ Applicable √ Not applicable
Description of investment in securities
□ Applicable √ Not applicable
Investment in private equity fund
□ Applicable √ Not applicable
Investment in derivatives
□ Applicable √ Not applicable
(V) Sale of major assets and equity
□ Applicable √ Not applicable
(VI) Analysis of major controlled and invested companies
√ Applicable □ Not applicable
Unit: RMB’0,000
| Major subsidiary | Nature of business | Major products and services | Registered capital | Total assets | Net assets | Net profit | Holding or shareholding |
| Zhejiang Meiligu Electronic Commerce Co., Ltd. | Cosmetics sales | Cosmetics | 1,000.00 | 86,967.52 | 32,657.69 | 14,073.65 | Holding |
| Hangzhou Proya Trade Co., Ltd. | Cosmetics sales | Cosmetics | 5,000.00 | 26,605.75 | 9,660.07 | 3,953.24 | Holding |
(VII) Structured entities controlled by the Company
□ Applicable √ Not applicable
V. Other Disclosures(I) Potential risks
√ Applicable □ Not applicable
1. Industry competition risks
(1) Given the intensified competition among various brands in the industry, the Company’s brandstrategy and channel strategy fail to meet expectations;
(2) Given the intensified competition for marketing investment, the control of digital and refinedinvestment costs may fail to reach the expected goal.
2. Project incubation risks
(1) New brand incubation risk: performance fails to match up to expectations despite heavy investmentin marketing;
(2) New category cultivation risk: as the operation modes for different categories of products differgreatly, the team may be unable to meet the requirements and performance may fall short ofexpectations.
(II) Other disclosures
□ Applicable √ Not applicable
Section IV Corporate GovernanceI. General Meetings of Shareholders
| Session of meeting | Date of meeting | Query index of the designated website where the resolution is published | Resolution disclosure date | Meeting resolution |
| 2022 Annual General Meeting of Shareholders | May 11, 2023 | Announcement No. 2023-026 on SSE website (www.sse.com.cn) | May 12, 2023 | The meeting considered and approved proposals including the Company’s Annual Report 2022 and its Summary, and the Company’s 2022 Annual Profit Distribution and Capital Reserve Conversion to Share Capital Plan. For details, see the Announcement on Resolutions of the 2022 Annual General Meeting of Shareholders (No.: 2023-026) released on the SSE website (http://www.sse.com.cn) on May 12, 2023 and relevant information disclosure media. |
Holders of preferred shares with resumed voting rights requesting to hold extraordinary generalmeeting
□ Applicable √ Not applicable
Description of the General Meeting of Shareholders
□ Applicable √ Not applicable
II. Changes in Directors, Supervisors and Senior Management of the Company
□ Applicable √ Not applicable
Description of changes in directors, supervisors and senior management of the Company
□ Applicable √ Not applicable
III. Profit Distribution or Capital Reserve Conversion PlanProfit distribution plan and plan for conversion of capital reserve into share capital proposed forthe first half of 2023
| Distribution or conversion or not | Yes |
| Number of bonus shares to be distributed per 10 shares (share) | 0 |
| Amount of cash dividends per 10 shares (RMB) (tax inclusive) | 3.80 |
| Number of shares converted per 10 shares (share) | 0 |
| Description of profit distribution plan and plan for conversion of capital reserve into share capital | |
| Based on the total share capital as at the record date on which equity distribution is implemented, the Company proposes to distribute to all shareholders registered a cash dividend of RMB3.80 (tax inclusive) per 10 shares. Based on the total share capital of 396,928,515 shares on June 30, 2023, it is estimated that the cash dividend to be distributed will amount to RMB150,832,835.70 (tax inclusive). No the capital reserve will be converted into share capital and no bonus shares will be given. In case of a change in the Company’s total share capital due to the conversion of convertible bonds before the record date for equity distribution, the Company maintains the said distribution ratios and yet adjusts the total distribution and conversion amounts. | |
IV. Equity Incentive Plan, Employee Stock Ownership Plan or Other Employee Incentives of theCompany and Their Impact(I) Relevant equity incentive matters disclosed in the interim announcement and with no
progress or change in subsequent implementation
√ Applicable □ Not applicable
| Matter | Reference |
| Matters related to adjustment of the price and quantity of restricted shares repurchased under the 2022 Restricted Share Incentive Plan | Announcement No. 2023-036 disclosed on SSE website, Shanghai Securities News, Securities Times on June 21, 2023 |
| Matters related to the repurchase and cancellation of certain equity incentive restricted shares | Announcement No. 2023-037 disclosed on SSE website, Shanghai Securities News, Securities Times on June 21, 2023 |
| Matters related to notifying creditors of the repurchase and cancellation of certain restricted shares | Announcement No. 2023-038 disclosed on SSE website, Shanghai Securities News, Securities Times on June 21, 2023 |
| Matters related to the announcement on the implementation of repurchase and cancellation of certain restricted shares under the 2022 Restricted Share Incentive Plan | Announcement No. 2023-044 disclosed on SSE website, Shanghai Securities News, Securities Times on August 22, 2023 |
(II) Incentives not disclosed in the interim announcement or with subsequent progressParticulars of equity incentives
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
Particulars of employee stock ownership plan
□ Applicable √ Not applicable
Other incentives
□ Applicable √ Not applicable
Section V Environmental and Social ResponsibilityI. Environmental Information(I) Environmental issues of companies and their major subsidiaries belonging to key pollutant
discharging units as announced by the environmental protection department
□ Applicable √ Not applicable
(II) Statement on environmental protection of companies not included in the list of key pollutantdischarging units
√ Applicable □ Not applicable
1. Administrative penalties imposed due to environmental issues
□ Applicable √ Not applicable
2. Other environmental information disclosed by referencing key pollutant discharging units
√ Applicable □ Not applicable
During the Reporting Period, Proya factories took the initiative to excavate, replace, repair and retestsome damaged rain and sewage pipes in the factory area in accordance with the 2022 rain and sewagepipe inspection report issued by CCTV.Proya factories actively responded to government requirements on the inspection of pollutant preventionand control in key enterprises. With the intention to protect the environment and fulfill socialresponsibilities, they carried out soil pollution (groundwater) prevention and control, conducted on-siteexploration and sampling for analysis, and prepared compliance testing reports.At present, new laws and regulations issued by the government’s environmental protection departmentsare imposing stricter requirements. Proya factories have made extensive efforts to remain at the forefrontof interpretation of new environmental regulations, conduct preemptive strategic planning for green andlow-carbon factories, and raise the level of environmental, occupational and health management systemsthroughout the industry. For example, the factories implemented environmental protection project-basedmanagement, and signed environmental protection comprehensive butler services with third-partyqualified units. Leveraging the professional, practical and service capabilities of the third-party system,they avoided risks and conducted more reasonable environmental management planning and feasiblesuggestions, helping factories to make their environmental protection work more professional, secure,low-carbon and green.
3. Reason for non-disclosure of other environmental information
□ Applicable √ Not applicable
(III) Statement on subsequent progress or change in environmental information disclosed during
the Reporting Period
□ Applicable √ Not applicable
(IV) Relevant information contributing to ecological protection, pollution prevention and control,and fulfillment of environmental responsibilities
□ Applicable √ Not applicable
(V) Measures taken to reduce carbon emissions during the Reporting Period and their effects
□ Applicable √ Not applicable
II. Detailed Information on Consolidation and Expansion of Achievements in Poverty Alleviationand Rural Revitalization
√ Applicable □ Not applicable
In mid-March 2023, in response to the “Special Action to Support the High-Quality Development of 26Districts and Counties in Mountainous Areas” initiative of Zhejiang Province, Proya traveled to YunheCounty, Lishui City to participate in paired-up exchanges and assistance actions under the unifiedorganization of the Zhejiang Federation of Industry and Commerce. We provided local governmentofficials and business representatives with a detailed introduction of our resources and advantages in thefield of platform e-commerce and live e-commerce operation. And we announced our cooperationintention to boost the online development of the “children’s toy industry” with local characteristics inYunhe through financial assistance, personnel training, experience sharing, project cooperation, etc.
Section VI Important Events
I. Fulfillment of Undertakings(I) Undertakings fulfilled during the Reporting Period or not yet fulfilled as of the Reporting Period by the parties to the commitment such as the
Company’s actual controllers, shareholders, related parties, acquirers and the Company
√ Applicable □ Not applicable
| Background of commitment | Type of commitment | Party of commitment | Content of commitment | Date and duration | Any time line for performance | Commitment strictly fulfilled according to schedule or not | Specific reasons for failure of on-time fulfillment | The next step in the event of failure of on-time fulfillment |
| IPO-related commitments | Restrictions on sales of shares | HOU Juncheng, FANG Yuyou and CAO Liangguo, director and senior management | (1) During their terms as the Company’s director/senior management, they shall not transfer more than 25% of their total shares directly or indirectly held in the Company each year. Within six months after leaving office, they shall not transfer their shares directly or indirectly held in the Company; (2) If their shares in the Company are sold within two years upon expiration of the lock-up period, the selling price shall not be lower than the offering price. If the closing price of the Company’s shares is lower than the offering price for 20 consecutive trading days within 6 months after the Company’s IPO, or the closing price as of the end of the 6-month period after the Company’s IPO is | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| lower than the offering price, the lock-up period for their shares in the Company will be automatically extended for 6 months. Their commitments above shall survive job changes and resignation; (3) If they or their partnerships violate the said share lock-up commitments, the lock-up period for their/their partnerships’ shares in the Company will be automatically extended for 6 months. | |||||||
| Restrictions on sales of shares | JIN Yanhua, senior management | (1) Within 12 months from the date of the Company’s IPO, he shall not transfer or authorize any other person to manage his shares directly or indirectly held in the Company or let the Company repurchase such shares; (2) During his term as the Company’s senior management, he shall not transfer more than 25% of his total shares directly or indirectly held in the Company each year. Within six months after leaving office, he shall not transfer his shares directly or indirectly held in the Company; (3) If his shares in the Company are sold within two years upon expiration of the lock-up period, the selling price shall not be lower than the offering price. If the closing price of the Company’s shares is lower than the offering price for 20 consecutive trading | Commitment date: April 16, 2018 Duration: April 16, 2018 to long-term | No | Yes | Not applicable | Not applicable |
| days within 6 months after the Company’s IPO, or the closing price as of the end of the 6-month period after the Company’s IPO is lower than the offering price, the lock-up period for his shares in the Company will be automatically extended for 6 months. His commitments above shall survive job change and resignation; (4) Should he/his partnership violate the said share lock-up commitments, the lock-up period for his/his partnership’s shares in the Company will be automatically extended for 6 months. | |||||||
| Restrictions on sales of shares | WANG Li, senior management | (1) Within 12 months from the date of the Company’s IPO, she shall not transfer or authorize any other person to manage her shares directly or indirectly held in the Company or let the Company repurchase such shares; (2) During her term as the Company’s senior management, she shall not transfer more than 25% of her total shares directly or indirectly held in the Company each year. Within six months after leaving office, she shall not transfer her shares directly or indirectly held in the Company; (3) If her shares in the Company are sold within two years upon expiration of the lock-up period, the selling price shall not be lower than the offering price. If the | Commitment date: September 3, 2018 Duration: September 3, 2018 to long-term | No | Yes | Not applicable | Not applicable |
| closing price of the Company’s shares is lower than the offering price for 20 consecutive trading days within 6 months after the Company’s IPO, or the closing price as of the end of the 6-month period after the Company’s IPO is lower than the offering price, the lock-up period for her shares in the Company will be automatically extended for 6 months. Her commitments above shall survive job change and resignation; (4) Should she/her partnership violate the said share lock-up commitments, the lock-up period for her/her partnership’s shares in the Company will be automatically extended for 6 months. | |||||||
| Restrictions on sales of shares | HOU Juncheng and FANG Aiqin, controlling shareholder and actual controller | (1) Within 24 months upon expiration of the lock-up period, they shall not directly or indirectly reduce their shares in the Issuer by more than 6% of the total number of shares of the Issuer before such IPO; (2) They must sell their shares in the Company through methods including but not limited to collective trading through bidding at the stock exchange, block trading and transfer by agreement in line with applicable laws, regulations and rules; (3) Before selling the Company’s shares, they shall announce the same three trading days in advance, and | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| discharge the obligation to disclose information in a timely and accurate manner as per the rules of the stock exchange, except to the extent that they hold less than 5% of the Company’s shares; (4) Should they fail to perform the said intent of share reduction, they must explain the reason for failing to do so in the Company’s General Meeting of Shareholders and media designated by the CSRC and publicly apologize to the Company’s shareholders and public investors. | |||||||
| Restrictions on sales of shares | FANG Yuyou and LI Xiaolin, shareholders directly holding more than 5% of the Company’s shares | (1) If they intend to reduce shares after the lock-up period expires, they will prudently make a share reduction plan as necessary for the Company to stabilize the share price and conduct operations and capital operations as required by the CSRC and the exchange on shareholders for share reduction, whereby shares shall be reduced gradually upon expiration of the lock-up period; (2) They must sell shares in the Company through methods including but not limited to collective trading through bidding at the stock exchange, block trading and transfer by agreement in line with applicable laws, regulations and rules; (3) Before selling the Company’s shares, they shall announce the | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| same three trading days in advance, and discharge the obligation to disclose information in a timely and accurate manner as per the rules of the stock exchange, except to the extent that they hold less than 5% of the Company’s shares; (4) Should they fail to perform the said intent of share reduction, they must explain the cause for failing to do so in the Company’s General Meeting of Shareholders and media designated by the CSRC and publicly apologize to the Company’s shareholders and public investors. | |||||||
| Others | The Company | When the preconditions for enabling the share price stabilization plan are met, if the Company fails to take specific measures to stabilize the share price, the Company must explain the reasons for failing to do so in the Company’s General Meeting of Shareholders and media designated by the CSRC and publicly apologize to the Company’s shareholders and public investors. In the event of losses to investors not resulting from force majeure, the Company will be liable for compensation to investors according to law, and be liable otherwise as required by laws, regulations and the regulators; if losses are due to force | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| majeure, the Company shall work out a plan in the shortest possible time to minimize losses to investors and submit it to the General Meeting of Shareholders for consideration, so as to protect the interests of the Company’s investors as much as possible. Within three years from the date of the Company’s IPO, if the Company appoints new directors and senior management, the Company will require the new directors and senior management to fulfill the commitments made by the directors and senior management at the time of the Company’s IPO. | |||||||
| Others | The Company’s controlling shareholders and actual controllers | When the preconditions for enabling the share price stabilization plan are met, if they fail to take specific measures to stabilize the share price according to the plan, they must explain the reasons for failing to do so at the Issuer’s General Meeting of Shareholders and in the media designated by the CSRC and publicly apologize to the Issuer’s shareholders and public investors. Where no such commitment is fulfilled, they will not receive shareholder dividends from the Issuer within 5 working days from the date of the said incident, and they will not be able to transfer his or her shares until they | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| have taken and carried out measures to stabilize the share price as per the said plan. | |||||||
| Others | The Company’s directors (excluding independent directors) and senior management | When the preconditions for enabling the share price stabilization measures are met, if there is a failure to take specific measures as per the plan to stabilize the share price, they must explain the reasons for failing to do so at the Issuer’s General Meeting of Shareholders and in the media designated by the CSRC and publicly apologize to the Issuer’s shareholders and public investors. Where no such commitment is fulfilled, they will not receive remuneration and shareholder dividends (if any) from the Issuer within 5 working days from the date of the said incident, and they will not be able to transfer his or her shares until they have taken and carried out measures to stabilize the share price as per the said plan. | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| Others | The Company | If the Company’s prospectus contains any false records, misleading statements or major omissions which cause investors to suffer losses in securities transactions, the Company will compensate investors for such losses according to law. After such violations are identified by the CSRC or the stock exchange where the Company is listed or the judicial authorities, they will actively | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| compensate investors for direct economic losses incurred therefrom by settling with investors with respect to measurable economic losses directly incurred by investors, mediating with investors through a third party and establishing an investor compensation fund based on the principles of simplifying procedures, actively negotiating, compensating in advance, and effectively protecting the interests of investors, especially small and medium investors. If it is found to have violated the said commitments, the Company will publicly apologize to shareholders and public investors for failing to perform the said compensation measures at the General Meeting of Shareholders and the media designated by the CSRC and compensate investors for actual losses identified by the CSRC and the judicial authorities. | |||||||
| Others | The Issuer’s controlling shareholders and actual controllers | If the Issuer’s prospectus contains any false records, misleading statements or major omissions, which causes investors to suffer losses in securities transactions, they will compensate investors for such losses according to law. After such violations are identified by the CSRC or the stock exchange where the Company is listed or | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| the judicial authorities, they will actively compensate investors for direct economic losses incurred therefrom by settling with investors with respect to measurable economic losses directly incurred to investors, mediating with investors through a third party and establishing an investor compensation fund based on the principles of simplifying procedures, actively negotiating, compensating in advance, and effectively protecting the interests of investors, especially small and medium-sized investors. If found to have violated the said commitments, the Company’s controlling shareholders and actual controllers will publicly apologize to the Issuer’s shareholders and public investors for failing to perform the said compensation measures at the Issuer’s General Meeting of Shareholders and the media designated by the CSRC and will not receive shareholder dividends from the Issuer within 5 working days from the date of the said violation, and their shares in the Issuer will not be transferred until they have taken and carried out compensation measures as per the said commitments. | |||||||
| Others | Directors, | If the Issuer’s prospectus contains any false | Commitment | No | Yes | Not | Not |
| supervisors and senior management | records, misleading statements or major omissions, which causes investors to suffer losses in securities transactions, they will compensate investors for such losses according to law. After such violations are identified by the CSRC or the stock exchange where the Company is listed or the judicial authorities, they will actively compensate investors for direct economic losses incurred therefrom by settling with investors with respect to measurable economic losses directly incurred to investors, mediating with investors through a third party and establishing an investor compensation fund based on the principles of simplifying procedures, actively negotiating, compensating in advance, and effectively protecting the interests of investors, especially small and medium-sized investors. If it is found to have violated the said commitments, the Company’s directors, supervisors and senior management will publicly apologize to the Issuer’s shareholders and public investors for failing to perform the said compensation measures at the Issuer’s General Meeting of Shareholders and the media designated by the CSRC and will not receive remuneration | date: November 15, 2017 Duration: November 15, 2017 to long-term | applicable | applicable |
| (or allowances) and shareholder dividends (if any) from the Issuer within 5 working days from the date of the said violation, and their shares in the Issuer (if any) will not be transferred until they have taken and carried out compensation measures as per the said commitments. | |||||||
| Others | The Company | In order to ensure the effective use of the proceeds from the IPO, effectively prevent the risk of diluting immediate returns and improve future returns, the Company intends to take measures including tightening operation, management and internal control, accelerating the progress of fundraising projects, and strengthening the investor return mechanism, so as to improve asset quality, increase operating revenue, increase future earnings, and achieve sustainable development to compensate for the diluted immediate returns. The Company promises to continuously improve various measures to fill the diluted immediate returns in accordance with the implementation rules subsequently issued by the CSRC and the SSE. If it is found to have violated the said commitments, the Company will promptly announce the facts and causes of such violation, except for | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| force majeure or other reasons not attributable to the Company, apologize to the Company’s shareholders and public investors, make supplementary commitments or substitute commitments to investors to protect the interests of investors as much as possible, and implement such supplementary commitments or substitute commitments subject to approval by the Company’s General Meeting of Shareholders. | |||||||
| Others | HOU Juncheng and FANG Aiqin, controlling shareholder and actual controller | In order to ensure that the Company’s measures to fill the diluted immediate returns can be effectively performed, they, as the Company’s controlling shareholder and actual controller, promise that: (1) Under no circumstances will they abuse their position as the controlling shareholder and actual controller by ultra vires interfering with the Company’s operation and management activities or encroaching on the Company’s interests; (2) After the CSRC and the SSE have otherwise released opinions and implementation rules on measures to fill the diluted immediate returns and such commitments, if the Company’s relevant provisions and his or her commitments contradict such rules, they | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| Others | Directors, senior management | In order to ensure that the Company’s measures to compensate for the diluted immediate returns can be effectively performed, they, as the Company’s directors and senior management, promise that: (1) They will not offer benefits to other entities or individuals for free or on unfair terms, or otherwise harm the Company’s interests; (2) They will strictly follow the Company’s budget management by limiting his or her duty consumption to the extent required, subject to the Company’s supervision and free from wastes or excessive consumption; (3) They will not use the Company’s assets to engage in investment and consumption activities unrelated to his or her duties; (4) They will actively work towards the improvement of the Company’s compensation system, so as to be more in line with the requirements for filling the diluted immediate returns; support the Company’s Board of Directors or Remuneration Committee in linking the implementation of the Company’s measures to fill the diluted immediate returns to developing, revising and supplementing the Company’s compensation system; promise that the vesting conditions for the | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| shareholders by law; ? unconditionally accept the penalties or regulatory measures taken by the CSRC and/or the SSE and other securities regulators as per relevant regulations and rules. The said measures to fill the diluted immediate returns shall not be deemed as constituting a guarantee for the Issuer’s future profits. | |||||||
| Avoiding horizontal competition | HOU Juncheng and FANG Aiqin, controlling shareholder and actual controller | 1. They do not and will not directly or indirectly engage in any activities constituting horizontal competition with the existing and future businesses of the Company and its holding subsidiaries, including but not limited to the R&D, production and sale of any products that are the same as or similar to those of the Company and its holding subsidiaries. They shall be liable for economic losses caused by violation of the above commitments to the Company. 2. For the enterprises under his or her control, they will perform their obligations under such commitments through the agencies and personnel (including but not limited to directors and managers), and they shall be liable for the economic losses caused by violation of the above commitments to the Company. 3. From the date of signing this letter of | Commitment date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
| priority to decide whether to invest in the said enterprises according to legal provisions and the consent of other shareholders of such enterprises. | ||||||||
| Commitments on refinancing | Others | HOU Juncheng and FANG Aiqin, controlling shareholder and actual controller | In order to ensure that the Company’s measures to fill the immediate returns can be effectively performed, they commit that: 1. They will not interfere with the Company’s operation and management activities beyond their authority or encroach on the Company’s interests; 2. From the date of making these commitments to the completion of the Company’s public offering of A-share convertible corporate bonds, to the extent that the CSRC makes other new regulatory requirements regarding the measures to fill returns and the commitments thereof, and if the above commitments cannot satisfy such requirements of the CSRC, they will make supplementary commitments as per the latest requirements of the CSRC at that time; 3. They will effectively implement the Company’s measures to fill returns and their commitments in this regard, and if found to have violated such commitments, which results in losses to the Company or investors, they are willing to be liable for | Commitment date: April 21, 2021 Duration: April 21, 2021 to long-term | No | Yes | Not applicable | Not applicable |
| compensation to the Company or investors according to law. As one of the parties responsible for the measures to fill returns, should they violate or refuse to fulfill the above commitments, they shall be subject to the punishment or relevant regulatory measures imposed on them by the securities regulatory authorities such as the CSRC and the SSE in accordance with the relevant regulations and rules. | |||||||
| Others | Directors, senior management | In order to ensure that the Company’s measures to fill the immediate returns can be effectively performed, they commit that: 1. They will not offer benefits to other entities or individuals for free or on unfair terms, or otherwise harm the Company’s interests; 2. They will restrict their post-related consumption behaviors; 3. They will not use the Company’s assets to engage in investment and consumption activities unrelated to his or her duties; 4. They will link the remuneration system established by the Board of Directors or the Remuneration and Appraisal Committee to the implementation of the Company’s measures for filling returns; 5. If the Company implements equity incentives in the future, the vesting conditions for the Company’s | Commitment date: April 21, 2021 Duration: April 21, 2021 to long-term | No | Yes | Not applicable | Not applicable |
equity incentives to be announced will belinked to the implementation of theCompany’s measures to fill the returns; 6.From the date of this commitment to thecompletion of the Company’s publicoffering of A-share convertible corporatebonds, if the CSRC makes other newregulatory requirements regarding themeasures to fill returns and thecommitments thereof, and if the abovecommitments cannot satisfy suchrequirements of the CSRC, they will makesupplementary commitments as per thelatest requirements of the CSRC. As one ofthe parties responsible for the measures tofill returns, should they violate or refuse tofulfill the above commitments, they shall besubject to the punishment or relevantregulatory measures imposed on them bythe securities regulatory authorities such asthe CSRC and the SSE in accordance withthe relevant regulations and rules.
II. Non-Operating Use of Funds by the Controlling Shareholders and Other Related Parties during the Reporting Period
□ Applicable √ Not applicable
III. Information on Illegal Guarantees
□ Applicable √ Not applicable
IV. Audit of the Semi-Annual Report
□ Applicable √ Not applicable
V. Information on Changes and Handling of Matters Related to Non-Standard Audit Opinions
in the Annual Report for the Previous Year
□ Applicable √ Not applicable
VI. Matters Related to Bankruptcy Reorganization
□ Applicable √ Not applicable
VII. Material Litigation and Arbitration Matters"□ The Company had material litigation and arbitration matters during the Reporting Period""√ The Company had no material litigation and arbitration matters during the Reporting Period"
VIII. Information on Punishment and Rectification of the Listed Company and its Directors,
Supervisors, Senior Management, Controlling Shareholders, and Actual Controllers due toViolations of Laws and Regulations
□ Applicable √ Not applicable
IX. Integrity of the Company and its controlling shareholders and actual controllers during theReporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company and its controlling shareholders and actual controllers actedin good faith.
X. Significant Related-Party Transactions(I) Related-party transactions relevant to the ordinary course of business
1. Matters that have been disclosed in the interim announcement without progress or changes inthe subsequent implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in thesubsequent implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
(II) Related-party transactions relevant to asset acquisition or equity acquisition and disposal
1. Matters that have been disclosed in the interim announcement without progress or changes inthe subsequent implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in thesubsequent implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
4. In case of performance agreement, information on performance realization during the
Reporting Period shall be disclosed
□ Applicable √ Not applicable
(III) Significant related-party transactions relevant to joint external investment
1. Matters that have been disclosed in the interim announcement without progress or changes in
the subsequent implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in thesubsequent implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
(IV) Credits and debts with related parties
1. Matters that have been disclosed in the interim announcement without progress or changes inthe subsequent implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in the
subsequent implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
(V) Financial business among the Company, related financial companies and holding financialcompanies, and related parties
□ Applicable √ Not applicable
(VI) Other significant related-party transactions
□ Applicable √ Not applicable
(VII) Others
□ Applicable √ Not applicable
XI. Material Contracts and Their Enforcement1 Custody, contracting and leasing
□ Applicable √ Not applicable
2 Significant guarantees that have been performed or outstanding during the Reporting Period
□ Applicable √ Not applicable
3 Other material contracts
□ Applicable √ Not applicable
XII. Explanations on Other Significant Matters
□ Applicable √ Not applicable
Section VII Shareholders and Changes in Shares
I. Changes in Share Capital(I) Table of changes in shares
1. Table of changes in shares
Unit: ’0,000 shares
| Before this change | Increase or decrease (+ or -) due to this change | After this change | |||||||
| Number | Percentage (%) | Issuance of new shares | Bonus shares | Shares converted from capital reserve | Others | Subtotal | Number | Percentage (%) | |
| I. Shares subject to selling restrictions | 210 | 0.7407 | 84 | 84 | 294 | 0.7407 | |||
| 1. Shares held by state government | |||||||||
| 2. Shares held by state-owned legal persons | |||||||||
| 3. Shares held by other domestic funds | 210 | 0.7407 | 84 | 84 | 294 | 0.7407 | |||
| Including: Shares held by domestic non-state-owned legal persons | |||||||||
| Shares held by domestic natural persons | 210 | 0.7407 | 84 | 84 | 294 | 0.7407 | |||
| 4. Shares held by foreign funds | |||||||||
| Including: Shares held by foreign legal persons | |||||||||
| Shares held by foreign natural persons | |||||||||
| II. Shares not subject to selling restrictions | 28,141.9469 | 99.2593 | 11,256.8136 | 0.0910 | 11,256.9046 | 39,398.8515 | 99.2593 | ||
| 1. Ordinary RMB shares | 28,141.9469 | 99.2593 | 11,256.8136 | 0.0910 | 11,256.9046 | 39,398.8515 | 99.2593 | ||
| 2. Foreign-funded shares listed domestically | |||||||||
| 3. Foreign-funded shares listed overseas | |||||||||
| 4. Others | |||||||||
| III. Total number of shares | 28,351.9469 | 100.00 | 11,340.8136 | 0.0910 | 11,340.9046 | 39,692.8515 | 100.00 |
2. Explanation on changes in shares
√ Applicable □ Not applicable
On May 11, 2023, the Company held the 2022 Annual General Meeting of Shareholders, and reviewedand approved the 2022 Annual Profit Distribution and Capital Reserve Conversion to Share CapitalPlan. Based on the total share capital as at the record date for equity distribution, all shareholders weredistributed a cash dividend of RMB8.70 (tax inclusive) per 10 shares. In addition, the capital reserve wasconverted into share capital in the proportion of 4 shares for every 10 shares, totaling 113,408,136 shares.Among them, the number of shares subject to selling restrictions increased by 840,000 shares, and thenumber of shares not subject to selling restrictions increased by 112,568,136 shares.With the approval of the China Securities Regulatory Commission, namely, the Reply on ApprovingProya Cosmetics Co., Ltd.'s Public Issuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021]No. 3408), on December 8, 2021, the Company publicly issued 7,517,130 convertible corporate bondswith a nominal value of RMB100 per share, a total nominal value of RMB751,713,000, and a term of 6years. With the approval of the Shanghai Stock Exchange's Self-Regulatory Supervision Decision Letter[2021] No. 503, the Company's convertible corporate bonds amounting to RMB751,713,000 were listedand traded on the Shanghai Stock Exchange from January 4, 2022. The bond is referred to as “ProyaConvertible Bond”, with the bond code of “113634”. Proya Convertible Bonds began to be convertedinto shares on June 14, 2022. During the Reporting Period, a total of RMB127,000 of Proya ConvertibleBonds had been converted into A shares of the Company, and the number of shares converted was 910shares. The number of shares not subject to selling restrictions of the Company increased by 910 shares.
3. Impact of share changes on earnings per share, net assets per share and other financialindicators from the end of the Reporting Period to the disclosure date of the interim report (if any)
√ Applicable □ Not applicable
On June 20, 2023, the 12th meeting of the third session of Board of Directors of the Company reviewedand approved the Proposal on Repurchasing and De-registering Part of Restricted Incentive Shares, andthe total number of restricted shares repurchased and de-registered was 105,350 shares. The Companycompleted the repurchase and cancellation procedures in August 2023, which did not have a materialimpact on earnings per share, net assets per share and other financial indicators.
4. Other information that the Company deems necessary or as required by the securitiesregulators
□ Applicable √ Not applicable
(II) Changes in shares with selling restrictions
√ Applicable □ Not applicable
Unit: Share
| Name of shareholder | Number of shares with selling restrictions at the | Number of shares with selling restrictions released during | Number of shares with selling restrictions increased | Number of shares with selling restrictions at the end of the | Reason for selling restrictions | Date of releasing the sales restrictions |
| beginning of the period | the Reporting Period | during the Reporting Period | Reporting Period | |||
| JIN Yanhua | 140,000 | 0 | 56,000 | 196,000 | 2022 Restricted Stock Incentive Plan | - |
| WANG Li | 180,000 | 0 | 72,000 | 252,000 | 2022 Restricted Stock Incentive Plan | - |
| 99 persons granted under 2022 Restricted Stock Incentive Plan | 1,780,000 | 0 | 712,000 | 2,492,000 | 2022 Restricted Stock Incentive Plan | - |
| Total | 2,100,000 | 0 | 840,000 | 2,940,000 | / | / |
Note: The increase in the number of shares with selling restrictions by shareholders in the above table ismainly due to the completion of the Company's equity distribution in 2022. Based on the total sharecapital as at the record date for equity distribution, the capital reserve was converted into share capital inthe proportion of 4 shares for every 10 shares to all shareholders.
II. Shareholders(I) Total number of shareholders:
| Total number of shareholders of ordinary shares as at the end of the Reporting Period | 18,526 |
| Total number of shareholders of preference shares whose voting rights have been restored as at end of the Reporting Period | 0 |
(II) Table of shareholdings of the top ten shareholders and the top ten shareholders of
outstanding shares (or shareholders without selling restrictions) as at the end of theReporting Period
Unit: Share
| Shareholdings of the top ten shareholders | |||||||
| Name of shareholder (full name) | Change during the Reporting Period | Number of shares held as at the end of the period | Percentage (%) | Number of shares held with selling restrictions | Pledged, placed with mark, lock-up or not | Nature of shareholder | |
| Share status | Number | ||||||
| HOU Juncheng | 39,068,296 | 136,739,037 | 34.45 | 0 | None | Domestic natural person | |
| Hong Kong Securities Clearing Company Limited | 25,248,690 | 89,722,159 | 22.60 | 0 | None | Others | |
| FANG Yuyou | 13,852,788 | 59,625,258 | 15.02 | 0 | Frozen | 17,041,269 | Domestic natural person |
| China Construction Bank Co., Ltd. - Yinhua Fuyu Themed Hybrid Securities Investment Fund | 816,677 | 6,617,978 | 1.67 | 0 | None | Others | ||
| Aberdeen Standard Investment Management (Asia) Limited - Aberdeen Standard - China A-Share Fund | 2,505,720 | 5,058,013 | 1.27 | 0 | None | Others | ||
| China Construction Bank Co., Ltd. - China Universal Consumer Industry Hybrid Securities Investment Fund | 1,300,005 | 4,400,018 | 1.11 | 0 | None | Others | ||
| Industrial and Commercial Bank of China Limited - Invesco Great Wall Emerging Growth Hybrid Securities Investment Fund | 952,000 | 3,332,000 | 0.84 | 0 | None | Others | ||
| TEMASEK FULLERTON ALPHA PTE LTD | 2,348,469 | 2,507,469 | 0.63 | 0 | None | Others | ||
| CAO Liangguo | 545,015 | 1,907,552 | 0.48 | 0 | None | Domestic natural person | ||
| Bank of Communications Co., Ltd. - China Universal Mid Cap Value Selected Hybrid Securities Investment Fund | 900,106 | 1,700,131 | 0.43 | 0 | None | Others | ||
| Shareholdings of the top ten shareholders without selling restrictions | ||||||||
| Name of shareholder | Number of unrestricted tradable shares held | Type and number of shares | ||||||
| Type | Number | |||||||
| HOU Juncheng | 136,739,037 | RMB ordinary shares | 136,739,037 | |||||
| Hong Kong Securities Clearing Company Limited | 89,722,159 | RMB ordinary shares | 89,722,159 | |||||
| FANG Yuyou | 59,625,258 | RMB ordinary shares | 59,625,258 | |||||
| China Construction Bank Co., Ltd. - Yinhua Fuyu Themed Hybrid Securities Investment Fund | 6,617,978 | RMB ordinary shares | 6,617,978 | |||||
| Aberdeen Standard Investment Management (Asia) Limited - Aberdeen Standard - China A-Share Fund | 5,058,013 | RMB ordinary shares | 5,058,013 |
| China Construction Bank Co., Ltd. - China Universal Consumer Industry Hybrid Securities Investment Fund | 4,400,018 | RMB ordinary shares | 4,400,018 |
| Industrial and Commercial Bank of China Limited - Invesco Great Wall Emerging Growth Hybrid Securities Investment Fund | 3,332,000 | RMB ordinary shares | 3,332,000 |
| TEMASEK FULLERTON ALPHA PTE LTD | 2,507,469 | RMB ordinary shares | 2,507,469 |
| CAO Liangguo | 1,907,552 | RMB ordinary shares | 1,907,552 |
| Bank of Communications Co., Ltd. - China Universal Mid Cap Value Selected Hybrid Securities Investment Fund | 1,700,131 | RMB ordinary shares | 1,700,131 |
| Notes on the special repurchase account among the top ten shareholders | None | ||
| Description of the above shareholders involved in entrustment/entrusted voting rights and waiver of voting rights | None | ||
| Explanation on the related relationship or parties acting in concert among the above shareholders | FANG Yuyou is the younger brother of HOU Juncheng's spouse FANG Aiqin, therefore HOU Juncheng and FANG Yuyou are related. | ||
| Description of the shareholders of preference shares with voting rights restored and the number of preference shares | None | ||
Shareholdings and sales restrictions of the top ten shareholders with selling restrictions
√ Applicable □ Not applicable
Unit: Share
| Serial number | Name of shareholder with selling restrictions | Number of shares with selling restrictions held | Listing and trading of shares with selling restrictions | Selling restrictions | |
| Time for listing and trading | Number of additional shares to be listed and traded | ||||
| 1 | Equity incentive object | 2,940,000 | See note for details | ||
| Explanation on the related relationship or parties acting in concert among the above shareholders | None | ||||
Note: The restricted shares held by the equity incentive objects are the shares granted under theCompany's 2022 Restricted Stock Incentive Plan, and the shares that the Company has completed the2022 Equity Distribution and converted from capital reserve. The restricted period is 12 months, 24months and 36 months from the completion of registration (September 6, 2022) of the restricted sharesgranted with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.
(III) Strategic investors or general legal persons becoming the top ten shareholders through
placement of new shares
□ Applicable √ Not applicable
III. Information on Directors, Supervisors and Senior Management(I) Changes in shareholdings of current Directors, Supervisors, and Senior Management andthose who resigned during the Reporting Period
√ Applicable □ Not applicable
Unit: Share
| Name | Position | Number of shares held at the beginning of the period | Number of shares held at the end of the period | Change in shares during the Reporting Period | Reason for the change |
| HOU Juncheng | Chairman | 97,670,741 | 136,739,037 | 39,068,296 | Capital reserve conversion to share capital |
| FANG Yuyou | Director, General Manager | 45,772,470 | 59,625,258 | 13,852,788 | Capital reserve conversion to share capital and reduction of personal capital needs |
| JIN Yanhua | Deputy General Manager | 216,973 | 303,762 | 86,789 | Capital reserve conversion to share capital |
| WANG Li | CFO, Deputy General Manager, Secretary of the Board of Directors | 225,251 | 315,491 | 90,240 | Capital reserve conversion to share capital and increase in shareholding by centralized bidding trading |
Other description
□ Applicable √ Not applicable
(II) Equity incentives granted to Directors, Supervisors and Senior Management during theReporting Period
□ Applicable √ Not applicable
(III) Other description
□ Applicable √ Not applicable
IV. Changes in Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
Section VIII Information on Preference Shares
□ Applicable √ Not applicable
Section IX Information on Bonds
I. Enterprise Bonds, Corporate Bonds and Non-financial Corporate Debt Financing
Instruments
□ Applicable √ Not applicable
II. Information on Convertible Corporate Bonds
√ Applicable □ Not applicable
(I) Issuance of convertible bondsWith the Approval of the China Securities Regulatory Commission, namely, the Reply on ApprovingProya Cosmetics Co., Ltd.’s Public Issuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021]No. 3408) on December 8, 2021, the Company publicly issued 7,517,130 convertible corporate bondswith a nominal value of RMB100 per share and a total nominal value of RMB751,713,000. Theseconvertible bonds were issued at nominal value with a term of 6 years.With the approval of the Shanghai Stock Exchange’s Self-Regulatory Supervision Decision Letter [2021]No. 503, the Company’s convertible corporate bonds amounting to RMB751,713,000 were listed andtraded on the Shanghai Stock Exchange from January 4, 2022. The bond is referred to as “ProyaConvertible Bond”, with the bond code of “113634”. The nominal interest rate of the convertiblecorporate bonds issued this time was as follows: 0.30% in the first year, 0.50% in the second year, 1.00%in the third year, 1.50% in the fourth year, 1.80% in the fifth year, and 2.00% in the sixth year. Theduration of the convertible corporate bonds runs from December 8, 2021 to December 7, 2027.According to the relevant regulations and the agreement of the Public Issuance of Convertible CorporateBonds of A Shares of Proya Cosmetics Co., Ltd., the “Proya Convertible Bond” issued by the Companycan be converted into the Company’s shares from June 14, 2022, with the conversion period from June14, 2022 to December 7, 2027. The initial conversion price is RMB195.98 per share, and the latestconversion price is RMB98.61 per share. Historical adjustments to the conversion price are as follows:
1. Due to the Company’s implementation of 2021 Equity Distribution Plan, the conversion price ofProya convertible bond has been adjusted to RMB139.37 per share since May 30, 2022. For details,please refer to the Announcement of Proya Cosmetics Co., Ltd. on Adjusting the Conversion Price ofConvertible Bonds in Relation to the 2021 Equity Distribution (Announcement No.: 2022-029) disclosedby the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on May 24, 2022.
2. Due to the Company’s completion of the registration of restricted shares granted under the 2022Restricted Share Incentive Plan, the conversion price of Proya convertible bond has been adjusted toRMB138.92 per share since September 9, 2022. For details, please refer to the Announcement of ProyaCosmetics Co., Ltd. on Adjusting the Conversion Price of “Proya Convertible Bonds” in Relation to theGranting of Additional Shares of Restricted Shares (Announcement No.: 2022-052) disclosed by theCompany on the website of Shanghai Stock Exchange (www.sse.com.cn) on September 8, 2022.
3. Due to the Company’s implementation of 2022 Equity Distribution Plan, the conversion price ofProya convertible bond has been adjusted to RMB98.61 per share since May 29, 2023. For details,please refer to the Announcement of Proya Cosmetics Co., Ltd. on Adjusting the Conversion Price of
Convertible Bonds in Relation to the 2022 Equity Distribution (Announcement No.: 2023-030) disclosedby the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on May 23, 2023.
4. Due to the Company’s completion of the repurchase and cancellation of certain equity incentiverestricted shares, the conversion price of Proya convertible bond has been adjusted to RMB98.62 pershare since August 29, 2023. For details, please refer to the Announcement of Proya Cosmetics Co., Ltd.on Completing the Repurchase and Cancellation of Certain Equity Incentive Restricted Shares andAdjusting the Conversion Price of “Proya Convertible Bonds” (Announcement No.: 2023-045)disclosed by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on August 28,2023.
(II) Information on holders and guarantors of convertible bonds during the Reporting Period
| Name of convertible corporate bonds | Proya convertible bond | |
| Holders of convertible corporate bonds as at the end of the period | 9,249 | |
| Guarantors of convertible bonds of the Company | None | |
| Material changes in the profitability, asset conditions and credit conditions of the guarantors | None | |
| The top ten holders of convertible bonds are as follows: | ||
| Name of holders of convertible corporate bonds | Value of bonds held as at the end of the period (RMB) | Holding ratio (%) |
| Soochow Securities Co., Ltd. | 71,677,000 | 9.55 |
| Dajia Assets - China CITIC Bank - Dajia Assets Houkun No.40 Collective Asset Management Products | 31,601,000 | 4.21 |
| Dajia Assets - Postal Savings Bank - Dajia Assets - Wenjian Selected No.6 (Tranche 2) Collective Asset Management Products | 30,806,000 | 4.10 |
| National Social Security Fund 201 Portfolio | 30,119,000 | 4.01 |
| Agricultural Bank of China Co., Ltd. - South Xiyuan Convertible Bond Securities Investment Fund | 26,790,000 | 3.57 |
| Industrial and Commercial Bank of China Limited － South Guangli Return Bond Securities Investment Fund | 24,664,000 | 3.28 |
| Bank of China Co., Ltd. - South Changyuan Convertible Bond Securities Investment Fund | 23,567,000 | 3.14 |
| China Galaxy Securities Co., Ltd. | 21,494,000 | 2.86 |
| Sinokorea Life Insurance Co., Ltd. - Traditional Insurance | 19,868,000 | 2.65 |
| China Southern Asset Management Ningkang Convertible Bonds Fixed-benefit Pension Products - Bank of China Co., Ltd. | 19,561,000 | 2.61 |
(III) Changes in convertible bonds during the Reporting Period
Unit: Yuan Currency: RMB
| Name of convertible corporate bonds | Before this change | Increase or decrease due to this change | After this change | ||
| Share conversion | Redemption | Repurchase | |||
| Proya | 750,937,000 | 127,000 | 0 | 0 | 750,810,000 |
convertible bond
(IV) Accumulative conversion of convertible bonds into shares during the Reporting Period
| Name of convertible corporate bonds | Proya convertible bond |
| Value of shares converted from convertible bonds during the Reporting Period (RMB) | 127,000 |
| Number of shares converted from convertible bonds during the Reporting Period (Share) | 910 |
| Accumulative number of shares converted from convertible bonds (Share) | 6,427 |
| Accumulative number of shares converted from convertible bonds accounting for the total number of issued shares of the Company before the conversion (%) | 0.0023 |
| Value of bonds not yet converted (RMB) | 750,810,000 |
| Proportion of unconverted convertible bonds to the total issuance of convertible bonds (%) | 99.8799 |
(V) Historical adjustments to the conversion price
Unit: Yuan Currency: RMB
| Name of convertible corporate bonds | Proya convertible bond | ||||
| Date of adjusting the conversion price | Price of convertible shares after adjustment | Disclosure date | Disclosure media | Explanation on adjusting the conversion price | |
| May 30, 2022 | RMB139.37/share | May 24, 2022 | SSE website (http://www.sse.com.cn), Shanghai Securities News, Securities Times | Due to the Company’s implementation of 2021 Equity Distribution Plan, the conversion price of Proya convertible bond has been adjusted to RMB139.37 per share since May 30, 2022. For details, please refer to the Announcement of Proya Cosmetics Co., Ltd. on Adjusting the Conversion Price of Convertible Bonds in Relation to the 2021 Equity Distribution | |
| (Announcement No.: 2022-029) disclosed by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on May 24, 2022. | ||||
| September 9, 2022 | RMB138.92/share | September 8, 2022 | SSE website (http://www.sse.com.cn), Shanghai Securities News, Securities Times | Due to the Company’s completion of the registration of restricted shares granted under the 2022 Restricted Share Incentive Plan, the conversion price of Proya convertible bond has been adjusted to RMB138.92 per share since September 9, 2022. For details, please refer to the Announcement of Proya Cosmetics Co., Ltd. on Adjusting the Conversion Price of “Proya Convertible Bonds” in Relation to the Granting of Additional Shares of Restricted Shares (Announcement No.: 2022-052) disclosed by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on September 8, 2022. |
| May 29, 2023 | RMB98.61/share | May 23, 2023 | SSE website (http://www.sse.com.cn), Shanghai Securities News, Securities Times | Due to the Company’s implementation of 2022 Equity Distribution Plan, the conversion price of Proya convertible bond has been adjusted to RMB98.61 per share since May 29, 2023. For |
| details, please refer to the Announcement of Proya Cosmetics Co., Ltd. on Adjusting the Conversion Price of Convertible Bonds in Relation to the 2022 Equity Distribution (Announcement No.: 2023-030) disclosed by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on May 23, 2023. | ||
| The latest conversion price as at the end of the Reporting Period | RMB98.61/share | |
Description: Due to the Company’s completion of the repurchase and cancellation of certain equityincentive restricted shares, the conversion price of Proya convertible bond has been adjusted toRMB98.62 per share since August 29, 2023. For details, please refer to the Announcement of ProyaCosmetics Co., Ltd. on Completing the Repurchase and Cancellation of Certain Equity IncentiveRestricted Shares and Adjusting the Conversion Price of “Proya Convertible Bonds” (AnnouncementNo.: 2023-045) disclosed by the Company on the website of Shanghai Stock Exchange(www.sse.com.cn) on August 28, 2023.
(VI) The Company’s liabilities, changes in credit and cash arrangements for debt repayment infuture yearsAs of June 30, 2023, the Company’s total assets were RMB6,669,650,520.45, and its liabilities totaledRMB2,799,795,594.98, with a gearing ratio of 41.98%. On June 16, 2023, the rating agency ChinaLianhe Credit Rating Co., Ltd. issued the 2023 Tracking Rating Report on the Public Issuance ofConvertible Corporate Bonds by Proya Cosmetics Co., Ltd. The main long-term credit rating of theCompany is “AA”, the credit rating of Proya convertible bond is “AA”, and the rating outlook is“stable”. The results of this rating remain consistent with the previous rating.(VII) Other explanations on convertible bondsNone
Section X Financial ReportI. Audit Report
□ Applicable √ Not applicable
II. Financial Statements
Consolidated Balance Sheet
June 30, 2023Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Notes | June 30, 2023 | December 31, 2022 |
| Current assets: | |||
| Monetary capital | VII. 1 | 3,960,227,111.24 | 3,161,003,085.05 |
| Provision for settlement | |||
| Loans to banks and other financial institutions | |||
| Financial assets held for trading | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | VII. 5 | 125,495,812.05 | 102,157,898.41 |
| Receivables financing | VII. 6 | 1,350,925.86 | |
| Prepayments | VII. 7 | 91,897,478.31 | 91,483,523.15 |
| Premiums receivable | |||
| Reinsurance accounts receivable | |||
| Provision for reinsurance contract receivable | |||
| Other receivables | VII. 8 | 10,143,560.07 | 73,564,083.63 |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Financial assets purchased under resale agreements | |||
| Inventory | VII. 9 | 730,021,306.83 | 669,051,326.73 |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | VII. 13 | 48,455,696.25 | 49,735,996.57 |
| Total current assets | 4,967,591,890.61 | 4,146,995,913.54 | |
| Non-current assets: | |||
| Loans and advances to customers | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | VII. 17 | 132,943,560.14 | 138,533,377.46 |
| Investments in other equity instruments | VII. 18 | 146,402,400.00 | 146,402,400.00 |
| Other non-current financial assets | |||
| Investment property | VII. 20 | 66,302,354.38 | 68,654,700.81 |
| Fixed assets | VII. 21 | 559,647,512.15 | 570,376,309.67 |
| Construction in progress | VII. 22 | 267,796,910.29 | 207,378,935.86 |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | VII. 25 | 15,947,216.77 | 6,410,634.25 |
| Intangible assets | VII. 26 | 411,690,785.95 | 420,316,883.26 |
| Development expenditure | |||
| Goodwill | |||
| Long-term deferred expenses | VII. 29 | 17,277,098.40 | 19,142,604.46 |
| Deferred tax assets | VII. 30 | 67,181,222.24 | 48,305,338.82 |
| Other non-current assets | VII. 31 | 16,869,569.52 | 5,554,726.06 |
| Total non-current assets | 1,702,058,629.84 | 1,631,075,910.65 | |
| Total assets | 6,669,650,520.45 | 5,778,071,824.19 | |
| Current liabilities: | |||
| Short-term borrowings | VII. 32 | 200,155,555.56 | 200,195,890.41 |
| Loans from the central bank | |||
| Loans from banks and other financial institutions | |||
| Financial liabilities held for trading | |||
| Derivative financial liabilities | |||
| Notes payable | VII. 35 | 56,801,810.60 | 69,626,352.12 |
| Accounts payable | VII. 36 | 1,063,096,364.64 | 475,427,484.23 |
| Receipts in advance | VII. 37 | 351,138.49 | 464,328.26 |
| Contract liabilities | VII. 38 | 213,456,941.60 | 174,602,833.91 |
| Financial assets sold under repurchase agreements | |||
| Customer deposits and deposits from banks and other financial institutions | |||
| Brokerage for trading securities | |||
| Brokerage for underwriting securities | |||
| Employee benefits payable | VII. 39 | 79,784,211.66 | 124,938,749.36 |
| Taxes payable | VII. 40 | 167,087,805.43 | 152,918,871.45 |
| Other payables | VII. 41 | 211,974,456.13 | 216,392,183.41 |
| Including: Interest payable | |||
| Dividends payable | |||
| Fees and commissions payable | |||
| Reinsurance accounts payable | |||
| Held-for-sale liabilities | |||
| Non-current liabilities due within one year | VII. 43 | 3,864,732.04 | 2,549,452.14 |
| Other current liabilities | VII. 44 | 12,821,142.71 | 10,820,499.59 |
| Total current liabilities | 2,009,394,158.86 | 1,427,936,644.88 | |
| Non-current liabilities: | |||
| Insurance contract reserves | |||
| Long-term borrowings | |||
| Bonds payable | VII. 46 | 740,666,717.66 | 724,491,557.93 |
| Including: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | VII. 47 | 11,281,561.28 | 3,718,119.41 |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Estimated liabilities | VII. 50 | 9,143,868.44 | 59,282,928.68 |
| Deferred income | VII. 51 | 5,360,266.33 | 6,399,811.33 |
| Deferred tax liabilities | VII. 30 | 23,949,022.41 | 19,019,431.67 |
| Other non-current liabilities | |||
| Total non-current liabilities | 790,401,436.12 | 812,911,849.02 | |
| Total liabilities | 2,799,795,594.98 | 2,240,848,493.90 | |
| Owner’s equity (or shareholders’ equity): | |||
| Paid-in capital (or share capital) | VII. 53 | 396,928,515.00 | 283,519,469.00 |
| Other equity instruments | VII. 54 | 50,895,410.14 | 50,903,510.12 |
| Including: Preference shares | |||
| Perpetual bonds | |||
| Capital reserve | VII. 55 | 851,451,398.25 | 914,815,786.22 |
| Less: Treasury shares | VII. 56 | 163,149,000.00 | 164,976,000.00 |
| Other comprehensive income | VII. 57 | -648,969.71 | -1,918,603.07 |
| Special reserve | |||
| Surplus reserve | VII. 59 | 141,759,734.50 | 141,759,734.50 |
| General risk reserve | |||
| Undistributed profit | VII. 60 | 2,553,216,065.97 | 2,300,384,763.19 |
| Total owner’s equity (or shareholders’ equity) attributable to the parent company | 3,830,453,154.15 | 3,524,488,659.96 | |
| Minority interests | 39,401,771.32 | 12,734,670.33 | |
| Total owner’s equity (or shareholders’ equity) | 3,869,854,925.47 | 3,537,223,330.29 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 6,669,650,520.45 | 5,778,071,824.19 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiHead of Accounting Department: WANG Li
Parent Company’s Balance Sheet
June 30, 2023Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
| Item | Notes | June 30, 2023 | December 31, 2022 |
| Current assets: | |||
| Monetary capital | 2,818,164,027.86 | 2,169,179,716.12 | |
| Financial assets held for trading | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | XVII. 1 | 353,922,507.08 | 289,883,063.24 |
| Receivables financing | |||
| Prepayments | 103,156,688.46 | 34,908,418.05 | |
| Other receivables | XVII. 2 | 137,185,024.99 | 141,574,549.59 |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Inventory | 398,433,957.16 | 458,341,886.37 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 38,520,431.16 | 32,667,616.71 | |
| Total current assets | 3,849,382,636.71 | 3,126,555,250.08 | |
| Non-current assets: | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | XVII. 3 | 417,241,390.52 | 394,321,950.41 |
| Investments in other equity instruments | 110,580,000.00 | 110,580,000.00 | |
| Other non-current financial assets | |||
| Investment property | 341,242,193.53 | 348,408,309.83 | |
| Fixed assets | 271,178,537.15 | 278,011,361.35 | |
| Construction in progress | 267,252,826.91 | 206,756,324.14 | |
| Productive biological assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 15,250,672.29 | 5,707,540.03 | |
| Intangible assets | 376,044,847.80 | 382,584,698.57 | |
| Development expenditure | |||
| Goodwill | |||
| Long-term deferred expenses | 13,530,516.04 | 13,494,337.73 | |
| Deferred tax assets | 16,895,311.59 | 11,372,733.52 | |
| Other non-current assets | 17,092,588.91 | 4,916,417.58 | |
| Total non-current assets | 1,846,308,884.74 | 1,756,153,673.16 | |
| Total assets | 5,695,691,521.45 | 4,882,708,923.24 | |
| Current liabilities: | |||
| Short-term borrowings | 200,155,555.56 | 200,195,890.41 | |
| Financial liabilities held for trading | |||
| Derivative financial liabilities | |||
| Notes payable | 56,801,810.60 | 69,626,352.12 | |
| Accounts payable | 610,338,918.25 | 217,330,371.42 | |
| Receipts in advance | |||
| Contract liabilities | 360,346,848.33 | 68,099,041.17 | |
| Employee benefits payable | 44,344,709.28 | 58,246,111.22 | |
| Taxes payable | 62,211,979.04 | 69,952,710.78 | |
| Other payables | 168,532,109.47 | 167,125,433.78 | |
| Including: Interest payable | |||
| Dividends payable | |||
| Held-for-sale liabilities | |||
| Non-current liabilities due within one year | 3,390,001.54 | 2,210,449.03 | |
| Other current liabilities | |||
| Total current liabilities | 1,506,121,932.07 | 852,786,359.93 | |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Bonds payable | 740,666,717.66 | 724,491,557.93 | |
| Including: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | 11,288,783.54 | 3,354,028.30 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Estimated liabilities | |||
| Deferred income | 5,360,266.33 | 6,399,811.33 | |
| Deferred tax liabilities | 22,661,366.04 | 18,758,960.23 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 779,977,133.57 | 753,004,357.79 | |
| Total liabilities | 2,286,099,065.64 | 1,605,790,717.72 | |
| Owner’s equity (or shareholders’ equity): | |||
| Paid-in capital (or share capital) | 396,928,515.00 | 283,519,469.00 | |
| Other equity instruments | 50,895,410.14 | 50,903,510.12 | |
| Including: Preference shares | |||
| Perpetual bonds | |||
| Capital reserve | 901,272,578.97 | 964,613,342.84 | |
| Less: Treasury shares | 163,149,000.00 | 164,976,000.00 | |
| Other comprehensive income | |||
| Special reserve | |||
| Surplus reserve | 141,759,734.50 | 141,759,734.50 | |
| Undistributed profit | 2,081,885,217.20 | 2,001,098,149.06 | |
| Total owner’s equity (or shareholders’ equity) | 3,409,592,455.81 | 3,276,918,205.52 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 5,695,691,521.45 | 4,882,708,923.24 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiHead of Accounting Department: WANG Li
Consolidated Income StatementJanuary to June 2023
Unit: Yuan Currency: RMB
| Item | Notes | H1 2023 | H1 2022 |
| I. Gross revenue | 3,626,991,878.22 | 2,625,943,244.29 | |
| Including: Operating revenue | VII. 61 | 3,626,991,878.22 | 2,625,943,244.29 |
| Interest income | |||
| Premiums earned | |||
| Fees and commission income | |||
| II. Total operating costs | 2,941,251,103.74 | 2,152,787,578.39 | |
| Including: Operating costs | VII. 61 | 1,069,489,813.93 | 837,034,743.80 |
| Interest expenses | |||
| Fees and commissions expenses | |||
| Surrender value | |||
| Net compensation expenses | |||
| Net provisions drawn for insurance contracts | |||
| Insurance policy dividend expenses | |||
| Reinsurance expenses | |||
| Taxes and surcharges | VII. 62 | 38,469,557.75 | 25,429,112.04 |
| Selling expenses | VII. 63 | 1,579,997,275.26 | 1,116,921,650.63 |
| General and administrative expenses | VII. 64 | 192,127,158.56 | 127,140,154.83 |
| R&D expenses | VII. 65 | 91,520,865.15 | 61,066,694.07 |
| Financial expenses | VII. 66 | -30,353,566.91 | -14,804,776.98 |
| Including: Interest expenses | 5,817,515.18 | 6,535,131.18 | |
| Interest income | 34,019,097.62 | 24,330,282.91 | |
| Add: Other income | VII. 67 | 35,532,621.58 | 20,627,971.50 |
| Investment income (“-” for losses) | VII. 68 | -1,164,626.88 | -3,658,316.04 |
| Including: Income from investment in associates and joint ventures | -1,831,700.47 | -3,658,316.04 | |
| Gains from derecognition of financial assets measured at amortized cost (“-” for losses) | |||
| Foreign exchange gains (“-” for losses) | |||
| Net exposure hedging gains (“-” for losses) | |||
| Income from changes in fair value (“-” for losses) | |||
| Credit impairment losses (“-” for losses) | VII. 71 | 6,753,856.82 | 875,552.05 |
| Asset impairment losses (“-” for losses) | VII. 72 | -52,178,199.75 | -89,555,181.24 |
| Gains from disposal of assets (“-” for losses) | VII. 73 | -217,694.21 | |
| III. Operating profit (“-” for losses) | 674,466,732.04 | 401,445,692.17 | |
| Add: Non-operating revenue | VII. 74 | 1,359,664.17 | 308,882.06 |
| Less: Non-operating expenses | VII. 75 | 2,913,343.62 | 550,781.27 |
| IV. Total profit (“-” for total losses) | 672,913,052.59 | 401,203,792.96 | |
| Less: Income tax expenses | VII. 76 | 144,644,731.37 | 92,647,427.04 |
| V. Net profit (“-” for net losses) | 528,268,321.22 | 308,556,365.92 | |
| (I) Categorized by the nature of continuing operations | |||
| 1. Net profit from continuing | 528,268,321.22 | 308,556,365.92 | |
| operations (“-” for net losses) | |||
| 2. Net profit from discontinuing operations (“-” for net losses) | |||
| (II) Classification by ownership | |||
| 1. Net profit attributable to shareholders of the parent company (“-” for net losses) | 499,493,997.71 | 296,939,515.54 | |
| 2. Minority interest income (“-” for net losses) | 28,774,323.51 | 11,616,850.38 | |
| VI. Other comprehensive income, net of tax | 1,269,633.36 | -249,117.09 | |
| (I) Other comprehensive income (net of tax) attributable to owners of the parent company | 1,269,633.36 | -249,117.09 | |
| 1. Other comprehensive income that cannot be reclassified into profit or loss | |||
| (1) Changes arising from the re-measurement of defined benefit plans | |||
| (2) Other comprehensive income that cannot be reclassified into profit or loss under the equity method | |||
| (3) Changes in the fair value of other investments in equity instruments | |||
| (4) Changes in the fair value of the Company’s own credit risks | |||
| 2. Other comprehensive income to be reclassified into profit or loss | 1,269,633.36 | -249,117.09 | |
| (1) Other comprehensive income that can be reclassified into profit or loss under the equity method | |||
| (2) Changes in the fair value of other debt investments | |||
| (3) Amount of financial assets | |||
| reclassified into other comprehensive income | |||
| (4) Credit impairment provisions of other debt investments | |||
| (5) Cash flow hedging reserve | |||
| (6) Conversion differences of financial statements denominated in foreign currencies | 1,269,633.36 | -249,117.09 | |
| (7) Others | |||
| (II) Other comprehensive income (net of tax) attributable to minority shareholders | |||
| VII. Total comprehensive income | 529,537,954.58 | 308,307,248.83 | |
| (I) Total comprehensive income attributable to owners of the parent company | 500,763,631.07 | 296,690,398.45 | |
| (II) Total comprehensive income attributable to minority shareholders | 28,774,323.51 | 11,616,850.38 | |
| VIII. Earnings per share: | |||
| (I) Basic earnings per share (RMB/share) | 1.25 | 1.06 | |
| (II) Diluted earnings per share (RMB/share) | 1.24 | 1.04 | |
For business combinations involving enterprises under common control in the current period, the netprofit realized by the acquirees before the combination is RMB0.00, and the net profit realized therebyin the prior period was RMB0.00.The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiHead of Accounting Department: WANG Li
Parent Company’s Income Statement
January to June 2023
Unit: Yuan Currency: RMB
| Item | Notes | H1 2023 | H1 2022 |
| I. Operating Revenue | XVII. 4 | 1,730,545,125.09 | 1,338,618,165.34 |
| Less: Operating costs | XVII. 4 | 823,776,575.95 | 616,362,778.04 |
| Taxes and surcharges | 15,808,311.59 | 10,380,101.33 | |
| Selling expenses | 265,242,258.63 | 213,869,474.60 | |
| General and administrative expenses | 137,869,495.89 | 98,835,341.03 | |
| R&D expenses | 88,272,258.48 | 62,747,420.22 | |
| Financial expenses | -29,081,987.57 | -18,381,341.10 | |
| Including: Interest expenses | 79,333.44 | 6,439,386.65 | |
| Interest income | 1,254.56 | 19,969,174.65 | |
| Add: Other income | 4,808,666.20 | 14,152,667.95 | |
| Investment income (“-” for losses) | XVII. 5 | -4,145,129.34 | -3,474,371.02 |
| Including: Income from investment in associates and joint ventures | -1,600,000.00 | -3,474,371.02 | |
| Gains from derecognition of financial assets measured at amortized cost (“-” for losses) | |||
| Net exposure hedging gains (“-” for losses) | |||
| Income from changes in fair value (“-” for losses) | |||
| Credit impairment losses (“-” for losses) | 10,624,149.77 | 61,920,164.56 | |
| Asset impairment losses (“-” for losses) | -50,071,970.30 | -78,282,507.05 | |
| Gains from disposal of assets (“-” for losses) | 30,842.94 | ||
| II. Operating profit (“-” for losses) | 389,904,771.39 | 349,120,345.66 | |
| Add: Non-operating revenue | 189,623.01 | 6,939.37 | |
| Less: Non-operating expenses | 1,904,339.55 | 34,601.49 | |
| III. Total profit (“-” for total losses) | 388,190,054.85 | 349,092,683.54 | |
| Less: Income tax expenses | 60,740,291.78 | 54,384,602.86 | |
| IV. Net profit (“-” for net losses) | 327,449,763.07 | 294,708,080.68 |
| (I) Net profit from continuing operations (“-” for net losses) | 327,449,763.07 | 294,708,080.68 | |
| (II) Net profit from discontinuing operations (“-” for net losses) | |||
| V. Other comprehensive income, net of tax | |||
| (I) Other comprehensive income that cannot be reclassified into profit or loss | |||
| 1. Changes arising from the re-measurement of defined benefit plans | |||
| 2. Other comprehensive income that cannot be reclassified into profit or loss under the equity method | |||
| 3. Changes in the fair value of other investments in equity instrument | |||
| 4. Changes in the fair value of the Company’s own credit risks | |||
| (II) Other comprehensive income that will be reclassified into profit or loss | |||
| 1. Other comprehensive income that can be reclassified into profit or loss under the equity method | |||
| 2. Changes in the fair value of other debt investments | |||
| 3. Amount of financial assets reclassified into other comprehensive income | |||
| 4. Credit impairment provisions of other debt investments | |||
| 5. Cash flow hedging reserve | |||
| 6. Foreign exchange differences from translation of financial |
| statements | |||
| 7. Others | |||
| VI. Total comprehensive income | 327,449,763.07 | 294,708,080.68 | |
| VII. Earnings per share: | |||
| (I) Basic earnings per share (RMB/share) | |||
| (II) Diluted earnings per share (RMB/share) | |||
The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiHead of Accounting Department: WANG Li
Consolidated Cash Flow Statement
January to June 2023
Unit: Yuan Currency: RMB
| Item | Notes | H1 2023 | H1 2022 |
| I. Cash flows from operating activities: | |||
| Cash receipts from sales of goods and rendering of services | 4,012,341,644.34 | 2,996,503,490.56 | |
| Net increase in customer deposits and deposits from banks and other financial institutions | |||
| Net increase in loans from the central bank | |||
| Net increase in loans from other financial institutions | |||
| Cash receipts from premiums under original insurance contracts | |||
| Net cash receipts from reinsurance business | |||
| Net increase in deposits and investments from policyholders | |||
| Cash receipts from interest, fees and commissions | |||
| Net increase in loans from banks and other financial | |||
| institutions | |||
| Net increase in repurchase business capital | |||
| Net cash receipts from securities trading agency services | |||
| Tax refund receipts | 1,438,462.09 | ||
| Other cash receipts relating to operating activities | VII. 78 (1) | 139,316,229.94 | 64,342,142.15 |
| Subtotal of cash inflows from operating activities | 4,151,657,874.28 | 3,062,284,094.80 | |
| Cash payments for goods and services | 799,703,317.01 | 775,028,311.27 | |
| Net increase in customer loans and advances | |||
| Net increase in deposits with the central bank and other banks | |||
| Cash payments for compensation payments under original insurance contract | |||
| Net increase in loans to banks and other financial institutions | |||
| Cash payments for interest, fees and commissions | |||
| Cash payments for policy dividends | |||
| Cash payments to and on behalf of employees | 338,318,620.54 | 263,654,300.60 | |
| Payments of various types of taxes | 462,196,371.81 | 315,679,187.15 | |
| Other cash payments relating to operating activities | VII. 78 (2) | 1,370,171,492.89 | 994,140,165.40 |
| Subtotal of cash outflows from operating activities | 2,970,389,802.25 | 2,348,501,964.42 | |
| Net cash flows from operating activities | 1,181,268,072.03 | 713,782,130.38 |
| II. Cash flows from investing activities: | |||
| Cash receipts from returns on investments | |||
| Cash receipts from investments income | 338,439.51 | ||
| Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 3,018,142.61 | ||
| Net cash receipts from disposal of subsidiaries and other business units | |||
| Other cash receipts relating to investing activities | |||
| Subtotal of cash inflows from investing activities | 3,356,582.12 | ||
| Cash payments for purchase and construction of fixed assets, intangible assets and other long-term assets | 99,314,112.66 | 72,466,047.18 | |
| Cash payments for investments | 6,818,181.82 | 104,185,427.27 | |
| Net increase in pledged loans | |||
| Net cash payments for acquisition of subsidiaries and other business units | |||
| Other cash payments relating to investing activities | |||
| Subtotal of cash outflows from investing activities | 106,132,294.48 | 176,651,474.45 | |
| Net cash flows from investing activities | -102,775,712.36 | -176,651,474.45 | |
| III. Cash flows from financing activities: | |||
| Cash receipts from capital contributions | 700,000.00 | ||
| Including: Cash receipts by subsidiaries from minority | 700,000.00 | ||
| shareholders’ investment | |||
| Cash receipts from borrowings | 100,000,000.00 | 200,000,000.00 | |
| Other cash receipts relating to financing activities | |||
| Subtotal of cash inflows from financing activities | 100,000,000.00 | 200,700,000.00 | |
| Cash payments for debt repayment | 100,000,000.00 | 200,000,000.00 | |
| Cash payments for distribution of dividends, profits or payment of interest expenses | 249,213,328.27 | 176,619,542.24 | |
| Including: Dividends and profits paid by subsidiaries to minority shareholders | |||
| Other cash payments relating to financing activities | VII. 78 (6) | 3,017,591.46 | 45,000,000.00 |
| Subtotal of cash outflows from financing activities | 352,230,919.73 | 421,619,542.24 | |
| Net cash flows from financing activities | -252,230,919.73 | -220,919,542.24 | |
| IV. Effect of changes in foreign exchange rates on cash and cash equivalents | 1,269,633.36 | -249,117.09 | |
| V. Net increase in cash and cash equivalents | 827,531,073.30 | 315,961,996.60 | |
| Add: Opening balance of cash and cash equivalents | 3,125,333,085.05 | 2,378,334,768.09 | |
| VI. Closing balance of cash and cash equivalents | 3,952,864,158.35 | 2,694,296,764.69 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiHead of Accounting Department: WANG Li
Parent Company’s Cash Flow Statement
January to June 2023
Unit: Yuan Currency: RMB
| Item | Notes | H1 2023 | H1 2022 |
| I. Cash flows from operating activities: | |||
| Cash receipts from sales of goods and rendering of services | 2,184,341,066.74 | 1,560,499,082.76 | |
| Tax refund receipts | |||
| Other cash receipts relating to operating activities | 103,874,829.15 | 132,070,257.42 | |
| Subtotal of cash inflows from operating activities | 2,288,215,895.89 | 1,692,569,340.18 | |
| Cash payments for goods and services | 559,795,926.80 | 589,859,418.74 | |
| Cash payments to and on behalf of employees | 153,659,418.21 | 113,360,200.45 | |
| Payments of various types of taxes | 200,776,457.67 | 160,233,972.59 | |
| Other cash payments relating to operating activities | 338,218,749.52 | 170,292,344.51 | |
| Subtotal of cash outflows from operating activities | 1,252,450,552.20 | 1,033,745,936.29 | |
| Net cash flows from operating activities | 1,035,765,343.69 | 658,823,403.89 | |
| II. Cash flows from investing activities: | |||
| Cash receipts from returns on investments | 2,540,410.44 | ||
| Cash receipts from investments income | |||
| Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | |||
| Net cash receipts from disposal of subsidiaries and other business units | |||
| Other cash receipts relating to investing activities | |||
| Subtotal of cash inflows | 2,540,410.44 | ||
| from investing activities | |||
| Cash payments for purchase and construction of fixed assets, intangible assets and other long-term assets | 96,289,876.84 | 71,839,761.78 | |
| Cash payments for investments | 11,318,181.82 | 150,335,427.27 | |
| Net cash payments for acquisition of subsidiaries and other business units | |||
| Other cash payments relating to investing activities | |||
| Subtotal of cash outflows from investing activities | 107,608,058.66 | 222,175,189.05 | |
| Net cash flows from investing activities | -105,067,648.22 | -222,175,189.05 | |
| III. Cash flows from financing activities: | |||
| Cash receipts from capital contributions | |||
| Cash receipts from borrowings | 100,000,000.00 | 200,000,000.00 | |
| Other cash receipts relating to financing activities | |||
| Subtotal of cash inflows from financing activities | 100,000,000.00 | 200,000,000.00 | |
| Cash payments for debt repayment | 100,000,000.00 | 200,000,000.00 | |
| Cash payments for distribution of dividends, profits or payment of interest expenses | 249,213,328.27 | 176,619,542.24 | |
| Other cash payments relating to financing activities | 2,500,055.46 | ||
| Subtotal of cash outflows from financing activities | 351,713,383.73 | 376,619,542.24 | |
| Net cash flows from financing activities | -251,713,383.73 | -176,619,542.24 | |
| IV. Effect of changes in foreign | |||
| exchange rates on cash and cash equivalents | |||
| V. Net increase in cash and cash equivalents | 678,984,311.74 | 260,028,672.60 | |
| Add: Opening balance of cash and cash equivalents | 2,138,929,716.12 | 1,684,565,248.70 | |
| VI. Closing balance of cash and cash equivalents | 2,817,914,027.86 | 1,944,593,921.30 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiHead of Accounting Department: WANG Li
Consolidated Statements of Changes in Owners’ Equity
January to June 2023
Unit: Yuan Currency: RMB
| Item | H1 2023 | ||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total equity attributable to owners | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of the previous year | 283,519,469.00 | 50,903,510.12 | 914,815,786.22 | 164,976,000.00 | -1,918,603.07 | 141,759,734.50 | 2,300,384,763.19 | 3,524,488,659.96 | 12,734,670.33 | 3,537,223,330.29 | |||||
| Add: Changes in accounting policies | |||||||||||||||
| Correction for previous errors | |||||||||||||||
| Business combinations under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 283,519,469.00 | 50,903,510.12 | 914,815,786.22 | 164,976,000.00 | -1,918,603.07 | 141,759,734.50 | 2,300,384,763.19 | 3,524,488,659.96 | 12,734,670.33 | 3,537,223,330.29 | |||||
| III. Movement for the current period (“-” for decrease) | 113,409,046.00 | -8,099.98 | -63,364,387.97 | -1,827,000.00 | 1,269,633.36 | 252,831,302.78 | 305,964,494.19 | 26,667,100.99 | 332,631,595.18 | ||||||
| (I) Total comprehensive income | 1,269,633.36 | 499,493,997.71 | 500,763,631.07 | 28,774,323.51 | 529,537,954.58 | ||||||||||
| (II) Owner’s contribution and capital reduction | 910.00 | -8,099.98 | 50,088,937.85 | -1,827,000.00 | 51,908,747.87 | 51,908,747.87 | |||||||||
| 1. Ordinary shares contributed by owners | -1,827,000.00 | 1,827,000.00 | 1,827,000.00 | ||||||||||||
| 2. Capital | |||||||||||||||
| contributions by other equity instrument holders | |||||||||||||||
| 3. Amount of share-based payments credited to owners’ equity | 49,961,246.32 | 49,961,246.32 | 49,961,246.32 | ||||||||||||
| 4. Others | 910.00 | -8,099.98 | 127,691.53 | 120,501.55 | 120,501.55 | ||||||||||
| (III) Profit distribution | -246,662,694.93 | -246,662,694.93 | -246,662,694.93 | ||||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Withdrawal of general risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -246,662,694.93 | -246,662,694.93 | -246,662,694.93 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal transfer within owners’ equity | 113,408,136.00 | -113,408,136.00 | |||||||||||||
| 1. Transfer of capital reserve to capital (or share capital) | 113,408,136.00 | -113,408,136.00 | |||||||||||||
| 2. Transfer of surplus reserve to capital (or share capital) | |||||||||||||||
| 3. Surplus reserve to cover loss | |||||||||||||||
| 4. Changes in defined benefit scheme carried forward to retained earnings | |||||||||||||||
| 5. Transfer of other comprehensive |
| income to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawal for the current period | |||||||||||||||
| 2. Utilization for the current period | |||||||||||||||
| (VI) Others | -45,189.82 | -45,189.82 | -2,107,222.52 | -2,152,412.34 | |||||||||||
| IV. Closing balance of the current period | 396,928,515.00 | 50,895,410.14 | 851,451,398.25 | 163,149,000.00 | -648,969.71 | 141,759,734.50 | 2,553,216,065.97 | 3,830,453,154.15 | 39,401,771.32 | 3,869,854,925.47 |
| Item | H1 2022 | ||||||||||||||
| Equity attributable to owners of the parent company | Minority interests | Total equity attributable to owners | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. Closing balance of the previous year | 201,009,966.00 | 50,956,622.11 | 834,272,205.66 | 5,628,128.21 | -1,247,674.10 | 100,634,780.00 | 1,696,978,064.52 | 2,876,975,835.98 | 9,864,591.09 | 2,886,840,427.07 | |||||
| Add: Changes in accounting policies | |||||||||||||||
| Correction for previous errors | |||||||||||||||
| Business combinations under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Opening balance of the current year | 201,009,966.00 | 50,956,622.11 | 834,272,205.66 | 5,628,128.21 | -1,247,674.10 | 100,634,780.00 | 1,696,978,064.52 | 2,876,975,835.98 | 9,864,591.09 | 2,886,840,427.07 | |||||
| III. Movement for the current period (“-” for decrease) | 80,406,194.00 | -21,217.44 | -127,298,849.74 | -5,628,128.21 | -249,117.09 | 124,070,944.78 | 82,536,082.72 | 12,190,136.50 | 94,726,219.22 | ||||||
| (I) Total comprehensive income | -249,117.09 | 296,939,515.54 | 296,690,398.45 | 11,616,850.38 | 308,307,248.83 | ||||||||||
| (II) Owner’s contribution and capital reduction | 2,208.00 | -21,217.44 | 302,521.21 | 283,511.77 | 700,000.00 | 983,511.77 | |||||||||
| 1. Ordinary shares contributed by owners | 700,000.00 | 700,000.00 | |||||||||||||
| 2. Capital contributions by other equity instrument holders | |||||||||||||||
| 3. Amount of share-based payments credited to owners’ equity | |||||||||||||||
| 4. Others | 2,208.00 | -21,217.44 | 302,521.21 | 283,511.77 | 283,511.77 | ||||||||||
| (III) Profit distribution | -172,868,570.76 | -172,868,570.76 | -172,868,570.76 | ||||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Withdrawal of general risk provision | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -172,868,570.76 | -172,868,570.76 | -172,868,570.76 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal transfer within owners’ equity | 80,403,986.00 | -127,601,370.95 | -5,628,128.21 | -41,569,256.74 | -126,713.88 | -41,695,970.62 | |||||||||
| 1. Transfer of capital reserve to capital (or share capital) | 80,403,986.00 | -80,403,986.00 | |||||||||||||
| 2. Transfer of surplus reserve to capital (or share capital) |
| 3. Surplus reserve to cover loss | |||||||||||||||
| 4. Changes in defined benefit scheme carried forward to retained earnings | |||||||||||||||
| 5. Transfer of other comprehensive income to retained earnings | |||||||||||||||
| 6. Others | -47,197,384.95 | -5,628,128.21 | -41,569,256.74 | -126,713.88 | -41,695,970.62 | ||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawal for the current period | |||||||||||||||
| 2. Utilization for the current period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Closing balance of the current period | 281,416,160.00 | 50,935,404.67 | 706,973,355.92 | -1,496,791.19 | 100,634,780.00 | 1,821,049,009.30 | 2,959,511,918.70 | 22,054,727.59 | 2,981,566,646.29 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li Head of Accounting Department: WANG Li
Statement of Changes in Owners’ Equity of the Parent Company
January to June 2023
Unit: Yuan Currency: RMB
| Item | H1 2023 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Total equity attributable to owners | |||
| Preference shares | Perpetual bonds | Others | |||||||||
| I. Closing balance of the previous year | 283,519,469.00 | 50,903,510.12 | 964,613,342.84 | 164,976,000.00 | 141,759,734.50 | 2,001,098,149.06 | 3,276,918,205.52 | ||||
| Add: Changes in accounting policies | |||||||||||
| Correction for previous errors | |||||||||||
| Others | |||||||||||
| II. Opening balance of the current year | 283,519,469.00 | 50,903,510.12 | 964,613,342.84 | 164,976,000.00 | 141,759,734.50 | 2,001,098,149.06 | 3,276,918,205.52 | ||||
| III. Movement for the current period (“-” for decrease) | 113,409,046.00 | -8,099.98 | -63,340,763.87 | -1,827,000.00 | 80,787,068.14 | 132,674,250.29 | |||||
| (I) Total comprehensive income | 327,449,763.07 | 327,449,763.07 | |||||||||
| (II) Owner’s contribution and capital reduction | 910.00 | -8,099.98 | 50,088,937.85 | -1,827,000.00 | 51,908,747.87 | ||||||
| 1. Ordinary shares contributed by owners | -1,827,000.00 | 1,827,000.00 | |||||||||
| 2. Capital contributions by other equity instrument holders | |||||||||||
| 3. Amount of share-based payments credited to owners’ equity | 49,961,246.32 | 49,961,246.32 | |||||||||
| 4. Others | 910.00 | -8,099.98 | 127,691.53 | 120,501.55 | |||||||
| (III) Profit distribution | -246,662,694.93 | -246,662,694.93 | |||||||||
| 1. Withdrawal of surplus reserve | |||||||||||
| 2. Distribution to owners (or shareholders) | -246,662,694.93 | -246,662,694.93 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal transfer within | 113,408,136.00 | -113,408,136.00 | |||||||||
| owners’ equity | |||||||||||
| 1. Transfer of capital reserve to capital (or share capital) | 113,408,136.00 | -113,408,136.00 | |||||||||
| 2. Transfer of surplus reserve to capital (or share capital) | |||||||||||
| 3. Surplus reserve to cover loss | |||||||||||
| 4. Changes in defined benefit scheme carried forward to retained earnings | |||||||||||
| 5. Transfer of other comprehensive income to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Withdrawal for the current period | |||||||||||
| 2. Utilization for the current period | |||||||||||
| (VI) Others | -21,565.72 | -21,565.72 | |||||||||
| IV. Closing balance of the current period | 396,928,515.00 | 50,895,410.14 | 901,272,578.97 | 163,149,000.00 | 141,759,734.50 | 2,081,885,217.20 | 3,409,592,455.81 |
| Item | H1 2022 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Total equity attributable to owners | |||
| Preference shares | Perpetual bonds | Others | |||||||||
| I. Closing balance of the previous year | 201,009,966.00 | 50,956,622.11 | 834,563,920.32 | 5,628,128.21 | 100,634,780.00 | 1,543,745,041.48 | 2,725,282,201.70 | ||||
| Add: Changes in accounting policies | |||||||||||
| Correction for previous errors | |||||||||||
| Others | |||||||||||
| II. Opening balance of the current year | 201,009,966.00 | 50,956,622.11 | 834,563,920.32 | 5,628,128.21 | 100,634,780.00 | 1,543,745,041.48 | 2,725,282,201.70 | ||||
| III. Movement for the current period (“-” for decrease) | 80,406,194.00 | -21,217.44 | -80,657,556.72 | -5,628,128.21 | 121,839,509.92 | 127,195,057.97 | |||||
| (I) Total comprehensive income | 294,708,080.68 | 294,708,080.68 | |||||||||
| (II) Owner’s contribution and capital reduction | 2,208.00 | -21,217.44 | 302,521.21 | 283,511.77 | |||||||
| 1. Ordinary shares contributed by owners | |||||||||||
| 2. Capital contributions by other equity instrument holders | |||||||||||
| 3. Amount of share-based payments credited to owners’ equity | |||||||||||
| 4. Others | 2,208.00 | -21,217.44 | 302,521.21 | 283,511.77 | |||||||
| (III) Profit distribution | -172,868,570.76 | -172,868,570.76 | |||||||||
| 1. Withdrawal of surplus reserve | |||||||||||
| 2. Distribution to owners (or shareholders) | -172,868,570.76 | -172,868,570.76 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal transfer within owners’ equity | 80,403,986.00 | -80,403,986.00 | |||||||||
| 1. Transfer of capital reserve to capital (or share capital) | 80,403,986.00 | -80,403,986.00 | |||||||||
| 2. Transfer of surplus reserve to capital (or share capital) | |||||||||||
| 3. Surplus reserve to cover loss | |||||||||||
| 4. Changes in defined benefit scheme carried forward to retained earnings | |||||||||||
| 5. Transfer of other comprehensive income to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Withdrawal for the current period | |||||||||||
| 2. Utilization for the current |
| period | |||||||||||
| (VI) Others | -556,091.93 | -5,628,128.21 | 5,072,036.28 | ||||||||
| IV. Closing balance of the current period | 281,416,160.00 | 50,935,404.67 | 753,906,363.60 | 100,634,780.00 | 1,665,584,551.40 | 2,852,477,259.67 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li Head of Accounting Department: WANG Li
III. General Information about the Company
1. Company profile
√ Applicable □ Not applicable
Proya Cosmetics Co., Ltd. (hereinafter referred to as the “Company” or this “Company”), formerlyknown as Proya (Huzhou) Cosmetics Co., Ltd., was registered in Wuxing Branch of Huzhou MunicipalAdministration for Industry and Commerce on May 24, 2006. Our corporate headquarters is located inHangzhou, Zhejiang province. The Company now holds the business license with the unified socialcredit code of 91330100789665033F. The current registered capital is RMB283,513,952.00, and paid-incapital is RMB396,928,515.00. (The paid-in capital is RMB113,414,563.00 more than the registeredcapital, which is due to the fact that the change in industrial and commercial registration have not beencompleted in the shares conversion from capital reserve and convertible bonds.) And the total number ofshares is 396,928,515 shares (par value of RMB1 per share). Among these shares, there are 2,940,000 Ashares with restrictions in circulation, and 393,988,515 A shares that are not subject to restriction incirculation. The shares of the Company were listed for trading on SSE on November 15, 2017.The Company is a beauty and personal care company. The Company is mainly engaged in cosmeticsresearch and development, production, and sales. The products are mainly cosmetics.The financial statements were approved for external disclosure by the 13th meeting of the third sessionof the Board of Directors on August 28, 2023.
2. Scope of consolidated financial statements
√ Applicable □ Not applicable
The Company has incorporated 44 subsidiaries, including Hangzhou Proya Trade Co., Ltd., ANYA(Huzhou) Cosmetics Co., Ltd., Zhejiang Meiligu Electronic Commerce Co., Ltd., Huzhou ChuangdaiE-commerce Co., Ltd., Yueqing Laiya Trading Co., Ltd. and Hapsode (Hangzhou) Cosmetics Co., Ltd.,into the consolidated financial statements of the Reporting Period. See “VIII. Change in ConsolidationScope” and “IX. Equity in Other Entities” in “Section X Financial Report” of this report for details.
IV. Preparation Basis of Financial Statements
1. Preparation basis
The financial statements of the Company are prepared on a going-concern basis.
2. Going concern
√ Applicable □ Not applicable
There are no matters or situations that may substantially affect the going-concern ability of the Companywithin 12 months since the end of the Reporting Period.
V. Significant Accounting Policies and Accounting EstimatesNotes to specific accounting policies and accounting estimates:
□ Applicable √ Not applicable
1. Statement of compliance with the Accounting Standards for Business EnterprisesThe financial statements have been prepared by the Company in compliance with the China AccountingStandards for Business Enterprises, and give an accurate and complete view of the Company’s financialposition, operating results, changes in shareholders’ equity, cash flow and other related information.
2. Accounting period
The accounting year of the Company is from January 1 to December 31 of each calendar year.
3. Operating cycle
√ Applicable □ Not applicable
The operating cycle of the Company’s businesses is short; the Company adopts 12 months as theliquidity classification criteria for assets and liabilities.
4. Recording currency
The Company and its domestic subsidiaries use RMB as their recording currency. Hapsode Co., Ltd.,Hanna Cosmetics Co., Ltd., Japan OR and other overseas subsidiaries choose the currency in the maineconomic environment where they operate as their recording currency.
5. Accounting treatment for business combinations (mergers) involving enterprises undercommon control and business combinations involving enterprises not under common control
√ Applicable □ Not applicable
1. Accounting treatments for enterprise mergers under common control
The assets and liabilities acquired by the Company through enterprise merger are measured at thecarrying value of the acquiree in the consolidated financial statements of the ultimate controlling party atthe date of the merger. The Company adjusts the capital reserve in accordance with the differencebetween the carrying value of the owner’s equity of the acquiree in the final consolidated financialstatements of the ultimate controlling party and the carrying value of the consideration paid for themerger or the total nominal value of the issued shares. If the capital reserve is insufficient to offset thedifference, the retained earnings shall be adjusted.
2. Accounting treatments for enterprise mergers not under common control
Where the cost of the merger is higher than the fair value proportion of the net identifiable assetsacquired from the acquiree in the merger on the acquisition date, the Company recognizes suchdifference as goodwill. Where the cost of merger is lower than the fair value proportion of the netidentifiable assets acquired from the acquiree in the merger on the acquisition date, the measurement ofthe acquired fair value of the acquiree’s identifiable assets, liabilities or contingent liabilities, as well asthe cost of merger shall be rechecked. If the cost of the merger remains lower than the fair valueproportion of the net identifiable assets acquired from the acquiree in the merger after the recheck, thedifference shall be included in the current profit or loss.
6. Preparation of consolidated financial statements
√ Applicable □ Not applicable
1. The parent company incorporates all subsidiaries under its control into consolidation scope of theconsolidated financial statements. The consolidated financial statements are based on the financial
statements of the parent company and its subsidiaries, and prepared by the parent company inaccordance with the Accounting Standards for Business Enterprises No.33 - Consolidated FinancialStatements, based on other relevant information.
2. Accounting treatment methods for buying and then selling, or selling and then buying the equity ofthe same subsidiary in two consecutive fiscal years: the acquisition of the equity of the acquiree is tocontrol its operating and financial policies and to obtain long-term benefits from its operating activities.When the right to control the acquiree is acquired, it is included in the consolidation scope of theconsolidated financial statements. Due to changes in the Company’s business plan arrangements, etc., ifthe equity of the acquiree is disposed of in the second fiscal year to the point of losing control over it, itwill be excluded from the consolidation scope of the consolidated financial statements when the controlis lost.
7. Classification of joint arrangement and accounting treatment for joint operation
√ Applicable □ Not applicable
1. A joint arrangement can be divided into joint operation and joint venture.
2. When the Company is involved in a joint operation, the following items related to the share of interestin joint operation are recognized:
(1) The solely-held assets, and jointly owned assets according to the shareholding;
(2) The solely-assumed liabilities, and jointly undertaken liabilities according to the shareholding;
(3) Income incurred from disposing of the Company’s share of output under the joint operation;
(4) Income incurred from disposing of assets of joint operation according to the Company’s share;
(5) The solely-incurred expenses, and expenses incurred from joint operation according to theCompany’s share.
8. Standards for determination of cash and cash equivalents
Cash presented in the cash flow statement refers to cash on hand and deposits that can be readilywithdrawn on demand. Cash equivalents refer to the short-term (generally the expiration is within threemonths from the date of purchase) and highly liquid investments that are readily convertible to knownamounts of cash and subject to an insignificant risk of change in value.
9. Foreign currency transactions and translation of foreign-currency statements
√ Applicable □ Not applicable
1. Translation of foreign currency transactions
Foreign currency transactions are translated into RMB at the approximate spot rate on the transactiondate during initial recognition. On the balance sheet date, the foreign currency monetary items aretranslated based on the spot rate on the balance sheet date. The exchange difference arising from thedifferent exchange rate is included in the current profit or loss, except the exchange difference betweenthe principal and interest of the foreign currency borrowed for meeting the capitalization requirements.The foreign currency non-monetary items measured at historical cost are also translated based on theapproximate rate of the spot rate on the transaction date, and the RMB amount is not changed. Theforeign currency non-monetary items measured at fair value are translated based on the spot rate on thedetermination date of the fair value, and the difference is included in the current profit or loss or othercomprehensive income.
2. Translation of foreign-currency financial statements
Assets and liabilities items in the balance sheet are translated at the spot rates prevailing at the balancesheet date. Owners’ equity items other than “undistributed profit” are translated at the spot rates on thetransaction dates. Income and expense items in the income statement are translated at the approximaterates of the spot rates on the transaction dates. Any balance incurred from the translation offoreign-currency financial statements by the above method is included in other comprehensive income.
10. Financial instruments
√ Applicable □ Not applicable
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories during initial recognition: (1) financialassets measured at amortized cost; (2) financial assets measured at fair value with changes included inother comprehensive income; (3) financial assets measured at fair value with changes included in currentprofit or loss.Financial liabilities are divided into the following four categories during initial recognition: (1) financialliabilities measured at fair value with changes included in current profit or loss; (2) financial liabilitiesfrom failure of transfer of financial assets to meet the derecognition conditions or continued involvementin transferred financial assets; (3) financial guarantee contracts not belonging (1) or (2) above, and loancommitments that are given at a rate lower than the market interest rate, and not in the case described in
(1) above; (4) financial liabilities measured at amortized cost.
2. Recognition basis, measurement method and derecognition conditions for financial assets andfinancial liabilities
(1) Recognition basis and initial measurement method for financial assets and financial liabilitiesOne financial asset or financial liability is recognized when the Company becomes one party of afinancial instrument contract. The financial assets or financial liabilities are measured at the fair valueduring initial recognition. For financial assets and financial liabilities measured at fair value withchanges included in current profit or loss, relevant transaction expenses are directly included in thecurrent profit or loss; for other kinds of financial assets or financial liabilities, relevant transactionexpenses are included in the amount of initial recognition. However, where the accounts receivableinitially recognized by the Company do not contain a significant financing component or the Companydoes not consider the financing component in the contract of less than one year, the initial measurementis made according to the transaction price defined in the Accounting Standards for Business EnterprisesNo. 14 – Revenue.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
Such financial assets are subsequently measured at amortized cost using the effective interest method.The gains and losses incurred by the financial assets measured at amortized cost but not belonging toany hedging relationship are included in the current profit or loss during derecognition, reclassification,amortization according to the effective interest method or impairment recognition.
2) Debt instrument investment measured at fair value with changes included in other comprehensiveincomeThe method of subsequent measurement at the fair value is adopted. The interest, impairment losses orgains, and exchange gains and losses based on the effective interest method are included in the currentprofit or loss, and other gains or losses are included in other comprehensive income. Duringderecognition, the accumulated gains or losses previously included in other comprehensive income aretransferred from other comprehensive income to the current profit or loss.
3) Equity instrument investment measured at fair value with changes included in other comprehensiveincomeThe method of subsequent measurement at the fair value is adopted. The dividends obtained (except forthe part from investment cost recovery) shall be included in the current profit or loss, and other gains orlosses are included in other comprehensive income. During derecognition, the accumulated gains orlosses previously included in other comprehensive income are transferred from other comprehensiveincome and included in retained earnings.
4) Financial assets measured at fair value with changes included in the current profit or lossThe method of subsequent measurement at fair value is adopted. The generated gains or losses(including interest and dividend income) are included in the current profit or loss, unless the financialassets belong to part of a hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities measured at fair value with changes included in the current profit or lossSuch financial liabilities include financial liabilities held for trading (including derivative instrumentsbelonging to financial liabilities) and those designated as financial liabilities measured at fair value withchanges included in the current profit or loss. As for such financial liabilities, the method of subsequentmeasurement at the fair value is adopted. The fair value changes of financial liabilities measured at fairvalue with said change included in the current profit or loss due to an adjustment in the Company’s owncredit risk are included in other comprehensive income, unless the treatment will cause or enlarge theaccounting mismatch in the profit or loss. Other gains or losses generated from such financial liabilities(including interest expense, except the fair value changes arising from the credit risk adjustment of theCompany) shall be included in the current profit or loss, unless the financial liabilities belong to part ofthe hedging relationship. During derecognition, the accumulated gains or losses previously included inother comprehensive income are transferred from other comprehensive income and included in retainedearnings.
2) Financial liabilities from failure of transfer of financial assets to meet the derecognition conditions orcontinued involvement in transferred financial assetsMeasurement shall be performed in accordance with the Accounting Standards for Business EnterprisesNo.23 - Transfer of Financial Assets.
3) Financial guarantee contracts not belonging 1) or 2) above, and loan commitments that are given at arate lower than the market interest rate, and not in the case described in 1) aboveThe subsequent measurement is made at the higher one of the following two amounts, after initialrecognition: ? loss provisions determined according to regulations on impairment of financialinstruments; ? balance of the initially recognized amount after deducting cumulative amortizationrecognized in accordance with the regulations set out in the Accounting Standards for BusinessEnterprises No.14 – Revenue.
4) Financial liabilities measured at amortized cost
The measurement at amortized cost using the effective interest method is adopted. The gains and lossesincurred by the financial liabilities measured at amortized cost but not belonging to any hedgingrelationship are included in the current profit or loss during derecognition or amortization in accordancewith the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets satisfying one of the following conditions are derecognized:
? The contract right to collect cash flow from the financial assets has been terminated;
? The financial assets have been transferred and such transfer meets the provisions for derecognition offinancial assets in the Accounting Standards for Business Enterprises No.23 - Transfer of FinancialAssets.
2) When the existing obligations under the financial liabilities (or part thereof) are released, suchfinancial liabilities (or that part thereof) are derecognized.
3. Recognition basis and measurement method for transfer of financial assets
If the Company has transferred almost all the risks and rewards related to the ownership of financialassets, the financial assets are derecognized, and the rights and obligations resulting from or retained inthe transfer are separately recognized as assets or liabilities. In case that almost all the risks and rewardsrelated to the ownership of the financial assets are retained, the recognition of the transferred financialassets is continued. In the case that almost all the risks and rewards related to the ownership of thefinancial assets are neither transferred nor retained, it shall be treated in the following scenarios: (1) ifcontrol over the financial assets is not retained, the financial assets shall be derecognized, and the rightsand obligations resulting from or retained in the transfer are separately recognized as the assets orliabilities; (2) if control over the financial assets is retained, the relevant financial assets are recognizedaccording to the degree of continued involvement in the transferred financial assets, and the relevantliabilities are recognized accordingly.If the transfer of an entire financial asset satisfies the conditions for derecognition, the differencebetween the two amounts below shall be included in the current profit or loss: (1) Carrying value of thetransferred financial assets at the date of derecognition; (2) The sum of consideration received for thetransfer of the financial asset, plus the corresponding derecognized portion of accumulated change in fairvalue previously included in other comprehensive income (in cases where the transferred financial assetis debt instrument investment measured at fair value with changes included in other comprehensiveincome). If part of the financial asset is transferred and the transfer satisfies the conditions forderecognition, the overall carrying value before the transfer of the financial asset is allocated accordingto their respective relative fair value at the transfer date between the portion of the derecognized part andthe remaining part, and the difference between the two amounts below is included in the current profit orloss: (1) carrying value of the derecognized part; (2) the sum of consideration for the derecognized part,plus the corresponding derecognized part of accumulated change in fair value previously included inother comprehensive income (in cases where the transferred financial assets are debt instrumentinvestments measured at fair value with changes included in other comprehensive income).
4. Method of determining the fair value of financial assets and financial liabilitiesThe Company adopts valuation techniques appropriate to the prevailing circumstances with the supportof sufficient data and other information available, to determine the fair value of relevant financial assetsand financial liabilities. The Company divides the inputs for the estimation technique into the followinglevels and uses them in turn:
(1) The input of the first level is the unadjusted quotation of the same assets or liabilities that can beobtained on the measurement date in the active market;
(2) The input of the second level is the directly or indirectly observable input of related assets orliabilities except the input of the first level, including: the quotation of similar assets or liabilities in anactive market; the quotation of the same or similar assets or liabilities in an inactive market; otherobservable inputs other than quotation, such as the interest rate and yield curves that can be observedduring the normal quotation intervals; and the inputs for market validation;
(3) The input of the third level is the unobservable input of related assets or liabilities, including interestrates that cannot be observed directly or cannot be verified according to observable market data, stock
volatility, future cash flows of retirement obligations borne during the business merger, and financialforecasts based on its own data.
5. Impairment of financial instruments
(1) Impairment measurement and accounting treatment of financial instruments
Based on the expected credit loss, the Company carries out accounting treatment for impairment andrecognizes the loss provision for the financial assets measured at amortized cost, the debt instrumentinvestment measured at fair value with changes included in other comprehensive income, contract assets,lease receivables, loan commitment other than financial liabilities measured at fair value with changesincluded in the current profit or loss, and the financial guarantee contracts of financial liabilities notmeasured at fair value with changes included in the current profit or loss or financial liabilities not fromfailure of transfer of financial assets to meet the derecognition conditions or continued involvement intransferred financial assets.Expected credit loss refers to the weighted average of credit losses of financial instruments weighted bythe risk of default. Credit loss refers to the balance between all contractual cash flows discountedaccording to the original effective interest rate and receivables under contract by the Company and allcash flows expected to be collected, i.e. the present value of all cash shortages. The purchased orunderlying financial assets of the Company with credit impairment incurred shall be discountedaccording to their effective interest rate upon credit adjustment.For purchased or underlying financial assets with credit impairment incurred, only the accumulativechanges in the expected credit loss in the whole duration after initial recognition shall be recognized bythe Company as loss provision on the balance sheet date.For receivables and contract assets from transactions in accordance with the Accounting Standards forBusiness Enterprises No.14 – Revenue, excluding significant financing components or withoutconsideration, by the Company, to financing components in the contract of no more than one year, theCompany measures the loss provision according to the amount equal to the expected credit loss in thewhole duration by applying the simplified measurement method.For lease receivables as well as receivables and contract assets from transactions in accordance with theAccounting Standards for Business Enterprises No.14 – Revenue, including significant financingcomponents, the Company measures the loss provision according to the amount equal to the expectedcredit loss in the whole duration by applying the simplified measurement method.For financial assets other than the above measurement methods, the Company shall, on each balancesheet date, assess whether their credit risk has increased significantly since initial recognition. If thecredit risk has increased significantly since the initial recognition, the Company will measure the lossprovision based on the amount of expected credit loss in the whole duration; if the credit risk has notsignificantly increased since the initial recognition, the Company will measure the loss provision basedon the amount of expected credit loss for the financial instruments in the next 12 months.The Company determines whether the credit risk of financial instruments has increased significantlysince initial recognition by utilizing the available, reasonable and well-grounded information, includingforward-looking information, and comparing the default risks of the financial instruments on the balancesheet date and on the initial recognition date.If the Company determines that the financial instruments bear a low credit risk on the balance sheet date,it assumes that the credit risk of the financial instruments has not increased significantly since initialrecognition.The Company evaluates the expected credit risk and measures the expected credit loss based on singlefinancial instruments or portfolio of financial instruments. When based on the portfolio of financial
instruments, the Company divides financial instruments into different portfolios on the basis of theircommon risk characteristics.The Company re-measures the expected credit loss on each balance sheet date, and the increased orreversed amount of the loss provision arising therefrom, as losses or gains from impairment, shall beincluded in the current profit or loss. For financial assets measured at amortized cost, the loss provisiondeducts the carrying value of the financial assets listed in the balance sheet; for the debt investmentmeasured at fair value with changes included in other comprehensive income, the Company recognizesits loss provision in other comprehensive income without deducting the carrying value of the financialassets.
(2) Financial instruments with expected credit risk assessed on a portfolio basis and expected credit lossmeasured under three-stage model
| Item | Basis for determining the portfolio | Method for measurement of expected credit loss |
| Other receivables - aging portfolio | Account age | Calculating the expected credit loss by the default risk exposure and the expected credit loss rate in the next 12 months or in the whole duration by referring to historical experience in credit loss and according to the current situation and the forecast on future economic conditions |
(3) Receivables and contract assets with expected credit loss measured under simplified measurementapproach and on a portfolio basis
1) Portfolio details and method for measurement of expected credit loss
| Item | Basis for determining the portfolio | Method for measurement of expected credit loss |
| Receivables financing - bank acceptance note | Note type | Calculating the expected credit loss by the default risk exposure and the expected credit loss rate in the whole duration by referring to historical experience in credit loss and according to the current situation and the forecast on future economic conditions |
| Accounts receivable - aging portfolio | Account age | Calculating the expected credit loss by preparing a comparison table between age of accounts receivable and expected credit loss rate in the whole duration by referring to historical experience in credit loss and according to the current situation and the forecast on future economic conditions |
2) Accounts receivable - the comparison table between age of aging portfolio and expected credit lossrate in the whole duration
| Account age | Accounts receivable Expected credit loss rate (%) |
| Within 1 year (inclusive, same for below) | 5 |
| 1-2 years | 30 |
| 2-3 years | 50 |
| Above 3 years | 100 |
6. Offset of financial assets and financial liabilities
The financial assets and financial liabilities are listed in the balance sheet respectively without offsetting.However, when the following conditions are met, the financial assets and liabilities are presented at thenet amount after mutual offset in the balance sheet: (1) the Company has the legal right of offsetting therecognized amount and such legal right is currently enforceable; (2) the Company plans to settle by netamount or simultaneously realize the financial assets and clear off the financial liabilities.When the financial assets that do not meet the derecognition conditions are transferred, the Companydoes not offset the transferred financial assets with the relevant liabilities.
11. Notes receivable
Determination and accounting treatment of the expected credit loss of notes receivable
□ Applicable √ Not applicable
12. Accounts receivable
Determination and accounting treatment of the expected credit loss of accounts receivable
√ Applicable □ Not applicable
Refer to “10. Financial instruments” in “V. Significant Accounting Policies and Accounting Estimates”of “Section X Financial Report” of this report for details.
13. Receivables financing
√ Applicable □ Not applicable
Refer to “10. Financial instruments” in “V. Significant Accounting Policies and Accounting Estimates”of “Section X Financial Report” of this report for details.
14. Other receivables
Determination and accounting treatment of the expected credit loss of other receivables
√ Applicable □ Not applicable
Refer to “10. Financial instruments” in “V. Significant Accounting Policies and Accounting Estimates”of “Section X Financial Report” of this report for details.
15. Inventory
√ Applicable □ Not applicable
1. Classification of inventories
Inventories include finished goods or commodities held for sale in the ordinary course of business,goods in process during the production, materials consumed in the course of production and rendering oflabor services.
2. Valuation method of delivered inventories
The moving weighted average method is adopted for delivered inventories.
3. Basis for the determination of net realizable value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value, andprovision for impairment of inventories is made based on the positive difference between a singleinventory cost and its net realizable value. The net realizable value of inventories directly for sale isdetermined by the amount of the estimated selling price after deducting the estimated selling expensesand relevant taxes during the ordinary course of production and business; the net realizable value of
inventories required to be processed is determined by the amount of the estimated selling price of thefinished products after deducting the estimated cost to completion, the estimated selling expenses andrelevant taxes during the ordinary course of production and business. On the balance sheet date, the netrealizable value is determined separately for the two parts of the same inventory with or without contractprice, and is compared with the relevant costs to separately determine the amount withdrawn or reversedfor provision for impairment of inventories.
4. Inventory system
The Company adopts a perpetual inventory system.
5. Amortization of low-value consumables and packaging materials
(1) Low-value consumables
Amortization is performed by the immediate write-off method.
(2) Packaging materials
Amortization is performed by the immediate write-off method.
16. Contract assets
(1). Recognition methods and standards of contract assets
√ Applicable □ Not applicable
The rights of the Company to collect consideration from the customer unconditionally (i.e. onlydepending on time) are presented as receivables; the rights (depending on other factors than time) tocollect consideration for transferring goods to the customer are presented as contract assets.
(2). Determination and accounting treatment of the expected credit loss of contract assets
□ Applicable √ Not applicable
17. Assets held for sale
□ Applicable √ Not applicable
18. Debt investments
Determination and accounting treatment of the expected credit loss of debt investments
□ Applicable √ Not applicable
19. Other debt investments
Determination and accounting treatment of the expected credit loss of other debt investments
□ Applicable √ Not applicable
20. Long-term receivables
Determination and accounting treatment of the expected credit loss of long-term receivables
□ Applicable √ Not applicable
21. Long-term equity investments
√ Applicable □ Not applicable
1. Joint control or significant influence criterion
Joint control is the contractually agreed sharing of control of an arrangement. It exists only whendecisions about the relevant activities of the arrangement require the unanimous consent of the partiessharing control. Significant influence refers to the power to participate in the decision-making processon the financial and operating policies of the investee. It cannot control or jointly control the formulationof such policies with other parties.2. Determination of investment cost
(1) For an enterprise merger under common control: where the merging party pays cash, transfersnon-cash assets, bears debts or issues equity securities as consideration of the merger, the initialinvestment cost is the share with reference to the carrying value of the owners’ equity of the acquiree inthe consolidated financial statements of the ultimate controlling party on the date of merger. Thedifference between the initial investment cost of long-term equity investment and the carrying value ofthe consideration paid for the merger or total nominal value of the issued shares is adjusted to capitalreserve. If the capital reserve is not sufficient to offset the difference, the retained earnings are adjusted.The Company judges whether the item is a “package deal” via long-term equity investment formed byan enterprise merger under common control through multiple transactions. For items belong to the“package deal”, multiple deals are subject to accounting treatment as one deal with control rights havingbeen acquired. For items that do not belong to the “package deal”, the initial investment cost isdetermined on the basis of the share with reference to the carrying value of the net assets of the acquireein the consolidated financial statements of the ultimate controlling party on the date of merger. Thedifference between initial investment cost of long-term equity investment at the date of merger and thesum of the carrying amount of long-term equity investment before merger and carrying value of newlypaid consideration for additional shares acquired on the date of merger is to adjust capital reserve. If thecapital reserve is insufficient to offset the difference, the retained earnings are adjusted.
(2) For the business merger not under common control, the fair value of consideration paid for merger isregarded as the initial investment cost on the acquisition date.For the long-term equity investment achieved by the Company via business merger not under commoncontrol through several transactions, the relevant accounting treatment is based on individual financialstatements or consolidated financial statements:
1) In individual financial statements, the initial investment cost calculated by the cost method instead isthe sum of the carrying value of the equity investment originally held and the newly increasedinvestment cost.
2) In the consolidated financial statements, the item is determined whether it is a “package deal”. Foritems belong to the “package deal”, multiple deals are subject to accounting treatment as one deal withcontrol rights having been acquired. For items that do not belong to the “package deal”, the equity of theacquiree held before the acquisition date is re-measured at the fair value of this equity on the acquisitiondate, and the difference between the fair value and its carrying value is included in the currentinvestment income. If the equity of the acquiree held before the acquisition date is related to othercomprehensive income under the equity method, the other related comprehensive income is convertedinto the current income on the acquisition date, excluding the other comprehensive income derived fromchanges of net liabilities or net assets due to re-measurement on defined benefit plan by the investee.
(3) For cases other than business merger: If it is acquired with cash, the initial investment cost shall bethe actual payment. If it is acquired through issuing equity securities, the initial investment cost is thefair value of the equity securities in issue. If it is acquired through debt restructuring, the initialinvestment cost is determined based on the Accounting Standards for Business Enterprises No.12 - DebtRestructuring. If it is acquired through the exchange of non-monetary assets, the initial investment costis determined based on the Accounting Standards for Business Enterprises No.7 - Exchange ofNon-monetary Assets.
3. Subsequent measurement and recognition of profit or loss
For long-term equity investment controlled by the investee, the cost method is adopted for accounting.For the long-term equity investment of associates and joint ventures, the equity method is adopted foraccounting.
4. Treatment of losing of control upon disposal of investment to subsidiaries through multipletransactions
(1) Individual financial statements
For disposal of equity, the difference between the carrying value and the consideration actually receivedis included in the current profit or loss. The accounting of remaining equity is completed by the equitymethod in case of significant influence on the investee or implementation of joint control with otherparties. However, in case of no control, joint control or significant influence on the investee, theaccounting of remaining equity must comply with the relevant provisions of the Accounting Standardsfor Business Enterprises No.22 - Recognition and Measurement of Financial Instruments.
(2) Consolidated financial statements
1) Loss of control upon disposal of investment in subsidiary through multiple transactions, and notbelonging to the “package deal”Before losing control, the difference between the price of disposal and the subsidiary’s share of netassets entitled from the disposal of long-term equity investment cumulatively calculated from theacquisition date or the date of merger, is adjusted to capital reserve (capital premium). If the capitalpremium is insufficient to offset the difference, the retained earnings are adjusted.When control over the original subsidiary is lost, the remaining equity is re-measured at fair value as atthe date on which the control is lost. The difference between the sum of the consideration received fromequity disposal and the fair value of the remaining equity minus the share of the net assets of the originalsubsidiary proportionate to the original shareholding accumulated from the date of acquisition or mergeris included in investment gains of the period during which the control is lost, and meanwhile, thegoodwill is offset. Other comprehensive income related to the equity investment in the originalsubsidiary is transferred to investment gains of the period during which the control is lost.
2) Loss of control upon disposal of investment to subsidiaries through multiple transactions, andbelonging to the “package deal”Accounting treatment is made by taking each transaction as one transaction disposing the subsidiary andlosing the control right. However, the difference between the amount received each time for disposalbefore the control is lost and the net assets of said subsidiary corresponding to the disposal of investmentis recognized as other comprehensive income in the consolidated financial statements, and is transferredto profit or loss of the period during which the control is lost upon loss of control.
22. Investment property
(1). In case of cost measurement model:
Depreciation or amortization method
1. Investment property includes leased land use rights, land use rights held for transfer upon appreciation,and rental buildings.
2. The cost method is employed for initial measurement of investment property, and cost model forsubsequent measurement. Depreciation or amortization shall be withdrawn using the same method asthat for fixed assets and intangible assets.
23. Fixed assets
(1). Conditions for recognition
√ Applicable □ Not applicable
Fixed assets are tangible assets that are held for the sake of production of goods, rendering of services,lease or business management, with a service life of more than one accounting year. A fixed asset isrecognized when related economic benefits are likely to flow into the Company and the cost of this fixedasset can be measured reliably.
(2). Method for depreciation
√ Applicable □ Not applicable
| Category | Method for depreciation | Useful lives of depreciation (year) | Residual value rate | Annual depreciation rate |
| Property and buildings | Straight-line method | 10 or 30 | 5% | 9.50% or 3.17% |
| General equipment | Straight-line method | 3-10 | 5% | 9.50% or 3.17% |
| Dedicated equipment | Straight-line method | 5-10 | 5% | 19.00% -9.50% |
| Transportation vehicles | Straight-line method | 5 | 5% | 19.00% |
(3). Recognition basis, valuation and depreciation method of fixed assets under financial lease
□ Applicable √ Not applicable
24. Construction in progress
√ Applicable □ Not applicable
1. Construction in progress is recognized when the following conditions are satisfied at the same time:
economic benefits are likely to flow into the Company; and the costs of such construction in progresscan be measured reliably. Construction in progress is measured at the actual cost incurred to make theassets ready for their intended use.
2. Construction in progress is transferred to fixed assets at the actual cost when it meets the expectedcondition for service. When construction in progress has achieved serviceable conditions but finalsettlement has not been finished yet, it is first transferred to fixed assets as per estimated value. Afterfinal settlement is finished, the estimated value is adjusted based on actual cost, but the depreciatedamount will not be adjusted.
25. Borrowing costs
√ Applicable □ Not applicable
1. Criteria for recognition of capitalized borrowing costs
For borrowing costs incurred by the Company that are directly attributable to the acquisition andconstruction or production of assets qualified for capitalization, the costs will be capitalized andincluded in the costs of the related assets. Other borrowing costs shall be recognized as expenses as theyare incurred and are included in the current profit or loss.
2. Capitalization period of borrowing costs
(1) Capitalization of borrowing costs begins when the following three conditions are fully satisfied: 1)
expenditures for the assets have been incurred; 2) borrowing costs have been incurred; 3) acquisition andconstruction or production that are necessary to make the assets ready for the intended use or sale havebegun.
(2) Where abnormal interruption of the assets eligible for capitalization occurs during the acquisition andconstruction or production process and such interruption has lasted for more than 3 consecutive months,the capitalization of borrowing costs is suspended; the borrowing costs during the interruption arerecognized as expenses of the current period till resumption of acquisition and construction orproduction of the assets.
(3) Capitalization of borrowing costs is suspended during periods in which the asset qualified forcapitalization under acquisition and construction or production is ready for the intended use or sale.
3. Capitalization rate and amount of borrowing costs
In case of special borrowing for the acquisition and construction or production of assets meeting thecapitalization conditions, the interest amount to be capitalized is recognized after deducting the bankinterests for the unused portion or the investment income for temporary investment from the interestcosts (including recognized depreciation or amortization of premium under effective interest method)actually incurred in the current period of specific borrowing; for general borrowing occupied for theacquisition and construction or production of assets meeting the capitalization conditions, the interestamount to be capitalized shall be determined by the result obtained by multiplying the capitalization rateof occupied general borrowing with the weighted average value of the asset expenditure for theaccumulated expenditure exceeding the specific borrowing portion.
26. Biological assets
□ Applicable √ Not applicable
27. Oil and gas assets
□ Applicable √ Not applicable
28. Right-of-use assets
√ Applicable □ Not applicable
Refer to “42. Lease” in “V. Significant Accounting Policies and Accounting Estimates” of “Section XFinancial Report” of this report for details.
29. Intangible assets
(1). Valuation method, useful life and impairment test
√ Applicable □ Not applicable
1. Intangible assets, including land use rights, patent rights and non-patented technologies, are measuredat cost.
2. Amortization for the intangible assets with limited useful life is reasonably performed in the expectedrealization pattern according to economic benefits related to the intangible assets within its useful life; ifthe expected realization pattern cannot be reliably determined, the straight-line method shall be adoptedfor amortization. The specific year information is shown as below:
| Item | Useful lives of amortization (year) |
| Land use rights | 40 or 50 |
| Non-patented technology | 5 |
| Office software | 3-10 |
| Patent rights | 5 |
| Customer resources | 3 |
| Trademark rights | 10 |
(2). Accounting policy regarding the expenditure on the internal research and development
√ Applicable □ Not applicable
Expenses incurred during the research phase of the internal research and development projects areincluded in the current profit or loss. Expenses in the development phase are recognized as intangibleassets when all of the following conditions are satisfied:
(1) It is technically feasible to complete the intangible assets so that it will be available for use or sale;
(2) There is an intention to complete the intangible assets for use or sale;
(3) The intangible assets can produce economic benefits, including that there is evidence that theproducts produced using the intangible assets has a market or the intangible assets itself has a market; ifthe intangible assets is for internal use, there is evidence that there exists usage for the intangible assets;
(4) There is sufficient support in terms of technology, financial resources and other resources in order tocomplete the development of the intangible assets, and there is capability to use or sell the intangibleassets;
(5) The expenses attributable to the development phase of the intangible assets can be measured reliably.
30. Impairment of long-term assets
√ Applicable □ Not applicable
For such long-term assets as long-term equity investment, investment properties measured by the costmodel, fixed assets, construction in progress and intangible assets with limited useful life, in case thatthere are signs indicating impairment on the balance sheet date, the recoverable amount shall beestimated. Whether there is a sign of impairment or not, the goodwill acquired in the enterprise mergerand intangible assets with indefinite useful life is tested for impairment each year. The impairment teston goodwill is carried out in combination with its related asset group or asset group portfolio.In case the recoverable amount of the above long-term assets is less than its carrying value, the provisionfor asset impairment is recognized according to its differences and included in the current profit or loss.
31. Long-term deferred expenses
√ Applicable □ Not applicable
The long-term deferred expenses involve all expenses already paid with amortization period of morethan 1 year (excluding 1 year). Long-term deferred expenses are entered in an account at the actualamounts, and are amortized by even amortization within the benefit period or prescribed amortizationperiod. If the long-term deferred expenses cannot provide benefit to future accounting periods, then allof the amortized value of the unamortized long-term deferred expenses are transferred into the currentprofit or loss.
32. Contract liabilities
Recognition method of contract liabilities
√ Applicable □ Not applicable
The Company recognizes the obligation to transfer goods to customers for the consideration received orreceivable from the customers as contract liabilities.
33. Employee remuneration
(1). Accounting treatment for short-term remuneration
√ Applicable □ Not applicable
During the accounting period when employees provide service for the Company, the short-termremuneration actually incurred will be recognized as liabilities, and will be included in the current profitor loss or the costs of the related assets.
(2). Accounting treatment for post-employment benefits
√ Applicable □ Not applicable
Post-employment benefits are divided into the defined contribution plan and defined benefit plan.
(1) During the accounting period when employees provide service for the Company, the amount to bedeposited as calculated according to the defined contribution plan shall be recognized as liabilities, andwill be included in the current profit or loss or the costs of the related assets.
(2) The accounting treatment for the defined benefit plan generally comprises the following steps:
1) According to the expected cumulative benefit unit method, the demographic variables, financialvariables, etc. shall be estimated through unbiased and mutually consistent actuarial assumption, so as tomeasure the obligations arising from the defined benefit plan and determine the period of relevantobligations. In addition, the obligations generated from the defined benefit plan shall be discounted, soas to determine the present value of defined benefit plan obligations and current service cost;
2) In case of assets in the defined benefit plan, the deficit or surplus generated from the present value ofobligations of the defined benefit plan minus the fair value of the assets of defined benefit plan isrecognized as net liabilities or net assets in the defined benefit plan. When the defined benefit plan has asurplus, the net assets of the defined benefit plan are measured at the lower of the surplus of the definedbenefit plan and the asset caps;
3) At the end of the period, the employee remuneration costs generated by the defined benefit plan arerecognized as three parts, i.e., service costs, net interest of the net liabilities or net assets of the definedbenefit plan, and the changes generated by re-measurement of the net liabilities or net assets of thedefined benefit plan, in which the service costs and the net interest of the net liabilities or net assets ofthe defined benefit plan are included in the current profit or loss or the costs of the related assets, and thechanges generated by re-measurement of the net liabilities or net assets of the defined benefit plan areincluded in other comprehensive income, and cannot be reversed to profit or loss in the subsequentaccounting period. However, the amount recognized in other comprehensive income can be transferredwithin the equity scope.
(3). Accounting treatment for termination benefits
√ Applicable □ Not applicable
If termination benefits are provided to employees, the employee remuneration liabilities arising from thetermination benefits are recognized on the earlier date of the following and included in the current profitor loss: (1) when the Company cannot unilaterally withdraw the termination benefits provided due totermination of labor relation plan or layoff proposal; (2) when the Company recognizes the cost orexpenses related to the restructuring involving payment of termination benefits.
(4). Accounting treatment for other long-term employees’ benefits
√ Applicable □ Not applicable
Other long-term employee benefits satisfying the conditions in the defined contribution plan are treatedin accounting as stipulated in the defined contribution plan; and other long-term benefits beyond that aretreated in accounting as stipulated in the defined benefit plan. In order to simplify related accountingtreatment, the generated employee remuneration costs are recognized as the service cost. The total netamount of item composed of the net interest of net liabilities or net assets of other long-term employeebenefits and the changes generated from re-measuring net liabilities or net assets of other long-termemployee benefits is included in the current profit or loss or the costs of the related assets.
34. Lease liabilities
√ Applicable □ Not applicable
Refer to “42. Lease” in “V. Significant Accounting Policies and Accounting Estimates” of “Section XFinancial Report” of this report for details.
35. Estimated liabilities
√ Applicable □ Not applicable
1. The obligations imposed by contingencies, such as providing external guarantee, lawsuits, productquality assurance and onerous contracts, become the current obligations assumed by the Company,which are determined by the Company as estimated liabilities when their performance is very likely toresult in economic benefit outflow from the Company and their amount can be measured reliably.
2. The estimated liabilities are initially measured by the Company based on the optimal estimate to bepaid for performing relevant current obligations and their carrying value is reviewed on the balancesheet date.
36. Share-based payments
√ Applicable □ Not applicable
1. Types of share-based payments
There are equity-settled and cash-settled share-based payments.
2. Relevant accounting treatment of implementing, modifying and terminating the share-based paymentscheme
(1) Equity-settled share-based payments
These equity-settled share-based payments vested immediately after the grant date and exchanged foremployee services shall be included in relevant costs or expenses as per the fair value of the equityinstruments on the grant date, and the capital reserve shall be adjusted accordingly. For equity-settledshare-based payments that are vested only after the services within the waiting period are completed orthe specified performance conditions are satisfied and that are exchanged for employee services, theservices acquired in the current period are included in relevant costs or expenses as per the fair value ofthe equity instruments on the grant date based on the optimal estimate of the number of vesting equityinstruments on each balance sheet date within the waiting period, and the capital reserve is adjustedaccordingly.The equity-settled share-based payments exchanged for services of other parties are measured as per thefair value of the services of other parties on the date of acquisition if its reliable measurement is possible;
if the reliable measurement of the fair value of other parties’ services is impossible, but that of the equityinstruments is possible, they will be measured as per the fair value of the equity instruments on the dateof acquiring the services and are included in relevant costs or expenses, and the owner’s equity isincreased accordingly.
(2) Cash-settled share-based payments
These cash-settled share-based payments vested immediately after the grant date and exchanged foremployee services shall be included in relevant costs or expenses as per the fair value of the liabilitiesassumed by the Company on the grant date, and the liabilities shall be increased accordingly. For thesecash-settled share-based payments that are vested only after the services within the waiting period arecompleted or the specified performance conditions are satisfied and that are exchanged for employeeservices, the services acquired in the current period shall be included in relevant costs or expenses andcorresponding liabilities as per the fair value of the liabilities assumed by the Company based on theoptimal estimate of the vesting conditions on each balance sheet date within the waiting period.
(3) Modifying and terminating the share-based payment scheme
If the fair value of the granted equity instruments is increased, the Company recognizes the increase ofthe acquired services according to the increase of the fair value of the equity instruments. If the numberof the granted equity instruments is increased, the Company recognizes the increased fair value of theequity instruments as the increase of the acquired services accordingly. If the Company modifies thevesting conditions in a way favorable to employees, the Company considers the modified vestingconditions when dealing with the vesting conditions.If the fair value of the granted equity instruments is decreased, the Company continues to recognize theamount of the acquired services according to the fair value of the equity instruments on the grant date,without taking into account the decrease of the fair value of the equity instruments. If the number of thegranted equity instruments is decreased, the Company treats the decreased part as cancellation of thegranted equity instruments. If the Company modifies the vesting conditions in a way unfavorable toemployees, the Company will not consider the modified vesting conditions when dealing with thevesting conditions.If the Company cancels or settles the granted equity instruments within the waiting period (other thanthe cancellation arising from failure to meet the vesting conditions), the cancellation or settlement isregarded as accelerated vesting treatment to immediately recognize the amount that should berecognized within the remaining waiting period.
37. Preference shares, perpetual bonds and other financial instruments
√ Applicable □ Not applicable
According to the relevant standards for financial instruments and the Regulations on RelevantAccounting Treatment of Perpetual Bonds (Ministry of Finance [2019] No. 2), for financial instrumentssuch as convertible corporate bonds issued, the Company shall classify these financial instruments ortheir components as financial assets, financial liabilities and equity instruments during initial recognition,based on the contractual terms of the financial instruments issued and the economic substance theyreflect, not only in legal form, but in combination with the definitions of financial assets, financialliabilities or equity instruments.On the balance sheet date, for financial instruments classified as equity instruments, the accountingtreatment for interest expense or dividend distribution as the Company’s profit distribution, and forrepurchase, cancellation, etc. as changes in equity is carried out; for financial instruments classified asfinancial liabilities, the accounting treatment for interest expense or dividend distribution as borrowing
costs is carried out, and the gains or losses from repurchase or redemption are included in the currentprofit or loss.
38. Revenue
(1). Accounting policy applied for revenue recognition and measurement
√ Applicable □ Not applicable
1. Revenue recognition principle
The Company shall, on the commencement date of the contract, evaluate the contract, identify theindividual performance obligations provided in the contract and determine whether to perform themwithin a period or at a time point.The performance obligations shall be deemed to be performed within a period if one of the followingconditions is satisfied, otherwise, they will be deemed to be performed at a time point: (1) The customeracquires and consumes the economic benefits brought by the Company’s performance while theCompany is performing its obligations; (2) the customer is capable to control the commodities inprogress during the Company’s performance; (3) the commodities produced during the Company’sperformance have irreplaceable purpose and the Company has the right to collect the amounts for theperformance part already completed to date within the whole contract term.For the obligations performed within a period, the Company shall recognize the revenue according to theperformance progress in that period. If the performance progress cannot be determined in a reasonableway, but the incurred costs are expected to be reimbursed, the revenue shall be recognized according tothe incurred amount of costs until the performance progress can be determined in a reasonable way. Forthe obligations performed at a time point, the revenue shall be recognized at the time of the customer’sacquiring the control of related commodities or services. The Company shall take into account thefollowing when judging whether the customer has acquired the commodity control: (1) The Companyhas the current right for collection, namely the customer has the current obligation for payment withrespect to the commodity; (2) the Company has transferred the legal title of the commodity to thecustomer, namely the customer has acquired the same; (3) the Company has transferred the physicalcommodity to the customer, namely the customer has physical possession of the commodity; (4) theCompany has passed the main risks and return on the commodity’s title to the customer, namely thecustomer has acquired the same; (5) the customer has accepted the commodity; and (6) there is otherinformation indicating that the customer has acquired the commodity control.
2. Revenue measurement principle
(1) The Company shall measure the revenue according to the transaction price apportioned to theindividual performance obligations. The transaction price refers to the consideration amount of whichthe Company is expected to have right for collection due to transfer of commodities or services to thecustomer, excluding the amounts charged on behalf of the third party and expected to refund to thecustomer.
(2) In case of variable consideration in the contract, the Company shall determine the optimal estimateof the variable consideration according to the expected value or the amount most likely to be incurred,while the transaction price including the variable consideration shall not exceed the amount under thecircumstance where the accumulatively recognized revenue will be highly unlikely to suffer majorreversal when relevant uncertainties are eliminated.
(3) In case of major financing composition in the contract, the Company shall determine the transactionprice according to the payable amount assumed to be paid by the customer in cash immediately after heacquires the control of the commodities or services. The difference between the transaction price and the
contract consideration shall be amortized by the effective interest method within the contract term. If theCompany expects, on the commencement date of the contract, that the interval between the customer’sacquisition of the control of the commodities or services and its payment is not more than one year, themajor financing composition in the contract shall not be taken into account.
(4) In case of two or more performance obligations in the contract, the Company shall, on thecommencement date of the contract, apportion the transaction price to the individual performanceobligations according to the relative proportion of the individual sales price of the commoditiesundertaken as per the individual performance obligations.
(2). Difference in accounting policies for revenue recognition resulting from different businessmodels for similar businesses
√ Applicable □ Not applicable
The Company mainly sells cosmetics. It has different sales models classified as distribution, directselling and sales on commission.
(1) Distribution
The sales revenue shall be recognized after the Company delivers the products to the buyer according tothe provisions of the contract and the buyer accepts the same.
(2) Direct selling
The sales revenue shall be recognized after the Company delivers the commodities to the consumer, andthe consumer confirms receipt and makes payment.
(3) Sales on commission
The sales revenue shall be recognized after the Company delivers the products to the commissionedparty according to the provisions of the contract and the commissioned party provides the list of sales oncommission to the Company upon selling the products to others.
39. Contract cost
√ Applicable □ Not applicable
The assets associated with the contract acquisition cost include the contract acquisition cost and contractperformance cost.The incremental cost incurred by the Company for acquiring the contract that is expected to berecoverable, as the contract acquisition cost, shall be recognized as an asset. If the amortization period ofthe contract acquisition cost is no more than one year, it shall be directly included in the current profit orloss when incurred.The cost incurred by the Company for performing the contract that falls out of the standard scope ofrelevant criteria for stocks, fixed assets or intangible assets and that satisfies the following conditions, asthe contract performance cost, shall be recognized as an asset:
1. The cost is directly related to one contract acquired currently or as expected, including direct labor,direct materials and manufacturing expenses (or similar), costs expressly borne by the customer andother costs incurred solely in connection with the contract;
2. The cost increases the resources for the Company to perform its obligations in the future;
3. The cost is expected to be recoverable.
The Company shall amortize the assets related to the contract cost on the same basis as for recognizingthe revenue of the commodities or services in connection with the assets and shall be charged to thecurrent profit or loss.If the carrying value of the assets related to the contract cost is higher than the surplus consideration
expected to be acquired for transferring the commodities or services in connection with the assets minusthe cost expected to be incurred, the Company shall make the provision for impairment against theexceeding part and recognize it as the assets impairment loss. If any changes in the factors forimpairment in previous periods make the surplus consideration expected to be acquired for transferringthe commodities or services in connection with the assets minus the cost expected to be incurred higherthan the carrying value of the assets, the provision for assets impairment made originally shall bereversed and included in the current profit or loss, provided that the reversed carrying value of the assetsis no more than that on the reversal date without making the provision for impairment.
40. Government grants
√ Applicable □ Not applicable
1. Government grants are recognized when all of the following conditions are satisfied: (1) TheCompany is able to meet the conditions attached to the government grants; (2) the Company is able toreceive the government grants. In case of government grants as monetary assets, they shall be measuredas per the amount received or receivable. In case of government grants as non-monetary assets, theyshall be measured as per the fair value; in case that the fair value cannot be acquired in a reliable way,they shall be measured as per the nominal amount.
2. Basis of determination and accounting treatment method for government grants related to assetsThese government grants that are used for purchasing and constructing or otherwise forming long-termassets as specified in government documents are classified as government grants related to assets. Incase of no clear provision in government documents, the government grants shall be determined on thebasis of the essential condition required for obtaining the grants, and shall be considered as related toassets if the essential condition is purchasing and constructing or otherwise forming long-term assets.The government grants related to assets shall offset the carrying value of relevant assets or be recognizedas deferred income. If the government grants related to assets are recognized as deferred income, theyshall be included in the profit and loss in a reasonable and systematic way within the useful life ofrelevant assets. The government grants measured as per the nominal amount shall be directly included inthe current profit or loss. If related assets are sold, transferred, scrapped or damaged before the end oftheir useful life, the related deferred income balance unallocated shall be transferred into the profit andloss in the current period of assets disposal.
3. Basis of determination and accounting treatment method for government grants related to incomeThe government grants other than those related to assets are classified as government grants related toincome. If it is difficult to distinguish whether the government grants containing both the part related toassets and the part related to income are related to assets or income, they shall be entirely classified asthe government grants related to income. The government grants related to income that are used forcompensation for relevant costs or losses in subsequent periods shall be recognized as deferred income,and included in the current profit or loss or offset relevant costs in the period in which relevant costs orlosses are recognized; those used for compensation for relevant costs or losses that have incurred shallbe directly included in the current profit or loss or offset relevant costs.
4. The government grants related to daily business activities of the Company shall be included in otherincome or offset relevant costs according to the nature of the economic business. The government grantsunrelated to the daily activities of the Company shall be included in non-operating income and expenses.
41. Deferred tax assets/ liabilities
√ Applicable □ Not applicable
1. According to the difference between the carrying value of the assets and liabilities and their tax basis(if the tax basis of the items recognized not as assets and liabilities can be determined according to theprovisions of the tax law, the difference between that tax basis and their carrying amount), the deferredtax assets or liabilities shall be calculated and recognized according to the tax rate applicable in theperiod where it is expected to recover the assets or liquidate the liabilities.
2. Deferred tax assets are recognized to the extent that it is very likely to obtain the taxable income todeduct the deductible temporary differences. If on the balance sheet date, there is conclusive evidenceproving that it is very likely to obtain sufficient taxable income in future periods to deduct the deductibletemporary differences, the deferred tax assets not recognized yet in previous accounting periods shall berecognized.
3. If the carrying value of the deferred tax assets is reviewed on the balance sheet date and it is verylikely to not obtain sufficient taxable income in future periods to deduct their benefits, the carrying valueof the deferred tax assets shall be written down. When it is very likely to obtain sufficient taxableincome, the amount written down shall be reversed.
4. The current income tax and deferred tax of the Company are included in the current profit or loss asthe income tax expense or income, except for the income tax arising from the following circumstances:
(1) business merger; (2) transactions or matters recognized directly in the owner’s equity.
42. Lease
(1). Accounting treatment of operating lease
□ Applicable √ Not applicable
(2). Accounting treatment of financing lease
□ Applicable √ Not applicable
(3). Determination method and accounting treatment of lease under new lease standards
√ Applicable □ Not applicable
1. The Company as lessee
On the start date of the lease term, the Company recognizes leases with a lease term not exceeding 12months and no purchase option as short-term leases; leases with low value when individual leased assetsare brand-new assets are recognized as leases of low-value assets. If the Company subleases or isexpected to sublease the leased assets, the original lease is not recognized as a lease of low-value assets.For all short-term leases and leases of low-value assets, the Company records the lease payments in thecost of related assets or the current profit or loss by straight-line method over each period of the leaseterm.Except for the above-mentioned short-term leases and leases of low-value assets that adopt simplifiedtreatment, the Company recognizes leases as right-of-use assets and lease liabilities, on the start date ofthe lease term.
(1) Right-of-use assets
Right-of-use assets are initially measured at cost which includes: 1) the initial measurement amount oflease liabilities; 2) the lease payments made on or before the start date of the lease term, deducting theamounts related to the lease incentive given if there is a lease incentive; 3) the initial direct costsincurred by the lessee; 4) the estimated costs to be incurred by the lessee to dismantle and remove leasedassets, restore the site where the leased assets are located, or restore the leased assets to the condition
agreed upon in the lease terms.The Company depreciates right-of-use assets by the straight-line method. If it can be reasonablydetermined that the ownership of the leased assets will be acquired at the expiration of the lease term,the Company shall accrue depreciation over the remaining useful life of the leased assets. If it cannot bereasonably determined that the ownership of the leased assets can be acquired at the expiration of thelease term, the Company shall accrue depreciation over the lease term or the remaining useful life of theleased assets, whichever is shorter.
(2) Lease liabilities
On the start date of the lease term, the Company recognizes the present value of the outstanding leasepayments as lease liabilities. When calculating the present value of lease payments, the interest rateimplicit in the lease is used as the discount rate. If the interest rate implicit in the lease cannot bedetermined, the Company’s incremental borrowing rate is used as the discount rate. The differencebetween the lease payment and its present value is regarded as the unrecognized financing expense, andthe interest expense is recognized in each period of the lease term according to the discount rate of thepresent value of the recognized lease payment, and is included in the current profit or loss. Variablelease payments that are not included in the measurement of lease liabilities are included in the currentprofit or loss when actually incurred.After the start date of the lease term, when there is a change in the actual amount of fixed payment, achange in the estimated payable amount of the guaranteed residual value, a change in the index or ratioused to determine the lease payment amount, or a change in the evaluation result or actual exercise ofthe purchase option, renewal option or termination option, the Company re-measures the lease liabilitiesaccording to the present value of the changed lease payments, and adjusts the carrying value of theright-of-use assets accordingly. If the carrying value of the right-of-use assets has been reduced to zero,but the lease liabilities still need to be further reduced, the remaining amount shall be included in thecurrent profit or loss.
2. The Company as lessor
On the start date of the lease term, the Company classifies the leases that have almost all the risks andrewards related to the ownership of the leased assets substantially transferred as financing leases, andother leases as operating leases.
(1) Operating lease
During each period of the lease term, the Company recognizes the lease receipts as rental income by thestraight-line method, capitalizes the initial direct expenses incurred and amortizes the expenses on thesame basis as for rental income recognition, to be included in the current profit or loss in installments.The variable lease payments obtained by the Company related to operating leases but not included in thelease receipts are included in the current profit or loss when actually incurred.
(2) Financing lease
On the start date of the lease term, the Company recognizes the financing lease receivables based on thenet lease investment (the sum of the unguaranteed residual value and the present value of the leasereceipts that have not been received on the start date of the lease term discounted at the interest rateimplicit in lease), and derecognizes financing lease assets. During each period of the lease term, theCompany calculates and recognizes interest income based on the interest rate implicit in the lease.The variable lease payments received by the Company that are not included in the measurement of netlease investment are included in the current profit or loss when actually incurred.
43. Other significant accounting policies and accounting estimates
□ Applicable √ Not applicable
44. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
□ Applicable √ Not applicable
(2). Changes in significant accounting estimates
□ Applicable √ Not applicable
(3). Adjustments to financial statements at the beginning of the year upon the first adoption ofnew accounting standards or interpretation of standards from 2023
□ Applicable √ Not applicable
45. Others
□ Applicable √ Not applicable
VI. Taxes
1. Major tax types and tax rates
Particulars on major tax types and tax rates
√ Applicable □ Not applicable
| Tax type | Taxing basis | Tax rate |
| Value added tax (“VAT”) | The output tax is calculated on the basis of the income from sales of products and taxable income from rendering of services calculated according to the provisions of tax law. The difference between the output tax and the amount after deducting the input tax which is allowed to be deductible in the current period is the payable VAT. | 13%, 9%, 6%, 1% |
| Consumption tax | Taxable sales (volume) | 15% |
| Property tax | In the case of ad valorem taxation, it is calculated and paid as per 1.2% of the remaining value after 30% of the original value of the property is deducted in a lump sum; in the case of taxation according to a lease, it is calculated and paid as per 12% of the rental income. | 12%, 1.2% |
| Urban maintenance and construction tax | Actual turnover tax paid | 7%, 5% |
| Education surcharge | Actual turnover tax paid | 3% |
| Surcharge for local education | Actual turnover tax paid | 2% |
| Enterprise income tax | Taxable income | [Note] |
[Note] Descriptions on taxpayers with different enterprise income tax ratesIf there are taxpayers with different enterprise income tax rates, the disclosure will be made fordescription
√ Applicable □ Not applicable
| Name of taxpayer | Income tax rate (%) |
| The Company | 15 |
| Huzhou Niuke Technology Co., Ltd. | 5 |
| Xuzhou Laibo Information Technology Co., Ltd. | 5 |
| Hangzhou Boxin Trading Co., Ltd. | 5 |
| Danyang Hapsode Cosmetics Trading Co., Ltd. | 5 |
| Hangzhou Weiluoke Cosmetics Co., Ltd. | 5 |
| Korea Younimi Cosmetics Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in South Korea |
| Hanna Cosmetics Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in South Korea |
| Hapsode Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in South Korea |
| Hong Kong Keshi Trading Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
| Hong Kong Xinghuo Industry Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
| Hong Kong Wanyan Electronic Commerce Co., Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
| Hong Kong Zhongwen Electronic Commerce Co., Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
| Hong Kong Xuchen Trading Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
| BOYA (Hong Kong) Investment Management Co., Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
| Proya Europe SARL | Relevant taxes are calculated and paid according to local tax regulations in Luxembourg |
| Japan OR | Relevant taxes are calculated and paid according to local tax regulations in Japan |
| Taxpayers other than the above | 25 |
2. Tax preference
√ Applicable □ Not applicable
The Company was reviewed as a high-tech enterprise on December 1, 2020 and obtained the High-techEnterprise Certificate, with the validity of certification of 3 years and the grace period for enterpriseincome tax from 2020 to 2022. The Company is applying for a review of its qualification as a high-techenterprise in 2023. The Company will be temporarily subject to the enterprise income tax at thepreferential rate of 15% in 2023.According to the relevant provisions of the Announcement of Preferential Income Tax Policies for Smalland Micro Enterprises and Individual Industrial and Commercial Households (Announcement No. 6 of
the Ministry of Finance and the State Taxation Administration in 2023), from January 1, 2023 toDecember 31, 2024, small and micro enterprises would calculate taxable income as per a reduced taxrate of 25% and pay the enterprise income tax as per the tax rate of 20% for the portion of annual taxableincome not exceeding RMB1 million. According to the relevant provisions of the Announcement of theMinistry of Finance and the State Taxation Administration on Further Implementing PreferentialIncome Tax Policies for Small and Micro Enterprises (Announcement No. 13 of the Ministry of Financeand the State Taxation Administration in 2022), from January 1, 2022 to December 31, 2024, small andmicro enterprises would calculate taxable income as per a reduced tax rate of 25% and pay the enterpriseincome tax as per the tax rate of 20% for the portion of annual taxable income exceeding RMB1 millionbut not exceeding RMB3 million. Huzhou Niuke Technology Co., Ltd., Xuzhou Laibo InformationTechnology Co., Ltd., Hangzhou Boxin Trading Co., Ltd., Danyang Hapsode Cosmetics Trading Co.,Ltd., and Hangzhou Weiluoke Cosmetics Co., Ltd., subsidiaries of the Company, comply with thecriteria for tax payment of small and micro enterprises, and will pay the enterprise income tax as per thetax rate of 5% in 2023.According to the provisions of Article 3 (2) of the Announcement of the Ministry of Finance and theState Taxation Administration on Defining Policies for Reducing and Exempting VAT for Small-scaleVAT Taxpayers (Announcement No. 1 of the Ministry of Finance and the State Taxation Administrationin 2023), for taxpayers engaged in consumer-oriented service industries, the input tax deductible in thecurrent period plus 10% would be used for deducting the tax payable from January 1, 2023 to December31, 2023. Taxpayers engaged in consumer-oriented service industries refer to taxpayers whose salesfrom providing consumer-oriented service account for more than 50% of the total sales. Hangzhou ProyaCommercial Management Co., Ltd., a subsidiary of the Company, complies with the conditions forgeneral taxpayers engaged in consumer-oriented service industries, and the input tax deductible in thecurrent period plus 10% would be used for deducting the tax payable from January 1, 2023 to December31, 2023.
3. Others
□ Applicable √ Not applicable
VII. Notes to the Items in the Consolidated Financial Statements
1. Monetary capital
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 21,976.11 | 20,176.08 |
| Cash at bank | 3,933,070,722.34 | 3,078,501,723.18 |
| Other monetary capital | 27,134,412.79 | 82,481,185.79 |
| Total | 3,960,227,111.24 | 3,161,003,085.05 |
| Of which: Total cash deposited outside China | 92,213,212.06 | 73,162,153.00 |
| Deposits with Finance Company |
Other description:
At the end of the period, the scope of restricted use covered the margin for fixed-term deposits oftransformers of RMB250,000.00 in bank deposits, as well as ETC vehicle deposit of RMB70,000.00,
Pinduoduo deposit of RMB5,000,000.00 and Tmall and Alipay deposits of RMB2,042,952.89 in othermonetary capital.At the beginning of the period, the scope of restricted use covered fixed-term deposits ofRMB30,000,000.00 in bank deposits, the margin for fixed-term deposits of transformers ofRMB250,000.00, as well as the ETC vehicle deposit of RMB70,000.00, Pinduoduo deposit ofRMB5,000,000.00 and Tmall and Alipay deposits of RMB350,000.00 in other monetary capital.
2. Financial assets held for trading
□ Applicable √ Not applicable
3. Derivative financial assets
□ Applicable √ Not applicable
4. Notes receivable
(1). List by the classification of notes receivable
□ Applicable √ Not applicable
(2). Notes receivable pledged by the Company at the end of the period
□ Applicable √ Not applicable
(3). Notes receivable endorsed or discounted by the Company at the end of the period and not yetdue on the balance sheet date
□ Applicable √ Not applicable
(4). Notes that have been transferred to accounts receivable by the Company at the end of theperiod due to the non-performance of the contract of the drawer
□ Applicable √ Not applicable
(5). Disclosed by classification of bad debt accrual method
□ Applicable √ Not applicable
(6). Information of bad-debt provision
□ Applicable √ Not applicable
(7). Notes receivable actually written off in the current period
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
5. Accounts receivable
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Account age | Book balance at the end of the period |
| Within 1 year | |
| Including: Subitem within 1 year | |
| Within 1 year | 128,845,808.66 |
| Sub-total within 1 year | 128,845,808.66 |
| 1-2 years | 1,922,881.09 |
| 2-3 years | 4,561,375.07 |
| Above 3 years | 14,031,186.12 |
| 3-4 years | |
| 4-5 years | |
| Above 5 years | |
| Total | 149,361,250.94 |
(2). Disclosed by method of provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying value | Book balance | Provision for bad debts | Carrying value | |||||
| Amount | Percentage (%) | Amount | Provision ratio (%) | Amount | Percentage (%) | Amount | Provision ratio (%) | |||
| Provision for bad debts by item | 13,180,540.21 | 8.82 | 13,180,540.21 | 100.00 | 13,574,973.09 | 10.79 | 13,574,973.09 | 100.00 | ||
| Including: | ||||||||||
| Provision for bad debts by portfolio | 136,180,710.73 | 91.18 | 10,684,898.68 | 7.85 | 125,495,812.05 | 112,285,497.89 | 89.21 | 10,127,599.48 | 9.02 | 102,157,898.41 |
| Including: | ||||||||||
| Aging portfolio | 136,180,710.73 | 91.18 | 10,684,898.68 | 7.85 | 125,495,812.05 | 112,285,497.89 | 89.21 | 10,127,599.48 | 9.02 | 102,157,898.41 |
| Total | 149,361,250.94 | / | 23,865,438.89 | / | 125,495,812.05 | 125,860,470.98 | / | 23,702,572.57 | / | 102,157,898.41 |
Provision for bad debts by item:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Name | Closing balance | |||
| Book balance | Provision for bad debts | Provision ratio (%) | Reason for accrual | |
| Provision for bad debts by item | 13,180,540.21 | 13,180,540.21 | 100.00 | Expected as unable to recover |
| Total | 13,180,540.21 | 13,180,540.21 | 100.00 | / |
Explanation of bad debt provision by item:
□ Applicable √ Not applicable
Provision for bad debts by portfolio:
√ Applicable □ Not applicable
Provision by portfolio: Aging portfolio
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Accounts receivable | Provision for bad debts | Provision ratio (%) | |
| Aging portfolio | 136,180,710.73 | 10,684,898.68 | 7.85 |
| Total | 136,180,710.73 | 10,684,898.68 | 7.85 |
Recognition standard and explanation of provision for bad debts made by portfolio:
√ Applicable □ Not applicable
| Account age | Closing amount | ||
| Book balance | Provision for bad debts | Provision ratio (%) | |
| Within 1 year | 128,845,808.66 | 6,470,977.58 | 5.00 |
| 1-2 years | 1,922,881.09 | 576,864.32 | 30.00 |
| 2-3 years | 3,549,928.39 | 1,774,964.19 | 50.00 |
| Above 3 years | 1,862,092.59 | 1,862,092.59 | 100.00 |
| Subtotal | 136,180,710.73 | 10,684,898.68 | 7.85 |
If the bad debt provision is made according to the general model of expected credit loss, please refer tothe disclosure of other receivables:
□ Applicable √ Not applicable
(3). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Category | Opening balance | Changes in the current period | Closing balance | |||
| Accrual | Withdrawal or written-back | Charge-off or write-off | Other changes | |||
| Provision for bad debts by item | 13,574,973.09 | 102,076.15 | 421,794.92 | 74,714.11 | 13,180,540.21 | |
| Provision for bad debts by portfolio | 10,127,599.48 | 692,047.70 | 53,023.83 | 81,724.67 | 10,684,898.68 | |
| Total | 23,702,572.57 | 794,123.85 | 421,794.92 | 127,737.94 | 81,724.67 | 23,865,438.89 |
The other decrease of RMB81,724.67 in the provision for bad debts by portfolio in the current period isthe disposal of the equity of Hangzhou Xiake Bar Catering Management Co., Ltd. (hereinafter referredto as “Hangzhou Xiake Bar Company”) and Hangzhou Tiedingxian Catering Management Co., Ltd.(hereinafter referred to as “Hangzhou Tiedingxian Company”), and the bad debt provision for accountreceivables is transferred out accordingly.Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
(4). Accounts receivable actually written off in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Written off amount |
| Accounts receivable actually written off | 127,737.94 |
Significant accounts receivable that are written off
□ Applicable √ Not applicable
Explanation of the write-off of accounts receivable
□ Applicable √ Not applicable
(5). Accounts receivable of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Company name | Closing balance | Proportion of total balance of accounts receivable at the end of the period (%) | Closing balance of bad debt provision |
| Beijing Jingdong Century Trading Co., Ltd. | 76,260,712.77 | 51.06 | 3,813,035.64 |
| Vipshop (China) Co., Ltd. | 30,824,131.18 | 20.64 | 1,541,206.56 |
| Zhejiang Haochao Network Technology Co., Ltd. | 9,014,731.83 | 6.04 | 450,736.59 |
| Hangzhou Zhishang Technology Co., Ltd. | 2,630,324.26 | 1.76 | 131,516.21 |
| Hangzhou Fahema Import & Export Trading Co., Ltd. | 2,079,936.42 | 1.39 | 1,039,968.21 |
| Total | 120,809,836.46 | 80.89 | 6,976,463.21 |
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7). Amount of assets or liabilities for which accounts receivable have been transferred but
involvement continues in the Company
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
6. Receivables financing
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance notes | 1,350,925.86 | |
| Total | 1,350,925.86 |
Changes in the current period of receivables financing and changes in fair value:
□ Applicable √ Not applicable
If the bad debt provision is made according to the general model of expected credit loss, please refer tothe disclosure of other receivables:
□ Applicable √ Not applicable
Other description:
√ Applicable □ Not applicable
Notes receivable endorsed or discounted by the Company at the end of the period and not yet due on thebalance sheet date
| Item | Recognized amount terminated at the end of the period |
| Bank acceptance notes | 1,950,000.00 |
| Subtotal | 1,950,000.00 |
It is unlikely that a bank acceptance note will be overdue, as the acceptor of bank acceptance bill is ahigh-credit commercial bank. Therefore, the Company has derecognized endorsed or discounted bankacceptance bills. If any of such bills are overdue, the Company will be still jointly and severally liable tothe holder according to the Negotiable Instruments Law.
7. Prepayments
(1). Prepayments are listed by age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Account age | Closing balance | Opening balance | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year | 88,967,528.26 | 96.80 | 88,898,806.55 | 97.18 |
| 1-2 years | 2,201,962.94 | 2.40 | 1,696,085.16 | 1.85 |
| 2-3 years | 501,729.07 | 0.55 | 829,263.44 | 0.91 |
| Above 3 years | 226,258.04 | 0.25 | 59,368.00 | 0.06 |
| Total | 91,897,478.31 | 100.00 | 91,483,523.15 | 100.00 |
Explanation of reasons why prepayments with more than 1 year’s age and significant amount are notsettled in time:
There are no significant unsettled prepayments with an age of more than 1 year at the end of the period.
(2). Prepayments of the top five closing balances collected by prepaid objects
√ Applicable □ Not applicable
| Company name | Closing balance | Proportion of total ending balance of prepayment (%) |
| Shanghai Vision Star Media Co., Ltd. | 12,588,511.07 | 13.70 |
| Zhejiang Alibaba Communication Technology Co., Ltd. | 17,772,204.46 | 19.34 |
| Guangxi Jingdong Qingchuan E-commerce Co., Ltd. | 14,548,908.42 | 15.83 |
| Wuhan Juliang Xingtu Technology Co., Ltd. | 11,957,774.42 | 13.01 |
| Shanghai Zhuiji Information Technology Co., Ltd. | 7,757,929.91 | 8.44 |
| Total | 64,625,328.28 | 70.32 |
Other description
□ Applicable √ Not applicable
8. Other receivables
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividend receivable | ||
| Other receivables | 10,143,560.07 | 73,564,083.63 |
| Total | 10,143,560.07 | 73,564,083.63 |
Other description:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ Applicable √ Not applicable
(2). Significant overdue interest
□ Applicable √ Not applicable
(3). Provision for bad debts
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
Dividend receivable
(1). Dividend receivable
□ Applicable √ Not applicable
(2). Significant dividends receivable with an age of more than 1 year
□ Applicable √ Not applicable
(3). Provision for bad debts
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
Other receivables
(4). Disclosed by account age
√ Applicable□ Not applicable
Unit: Yuan Currency: RMB
| Account age | Book balance at the end of the period |
| Within 1 year | |
| Including: Subitem within 1 year | |
| Within 1 year | 9,913,470.33 |
| Sub-total within 1 year | 9,913,470.33 |
| 1-2 years | 220,303.21 |
| 2-3 years | 27,552,437.52 |
| Above 3 years | 5,534,893.76 |
| 3-4 years | |
| 4-5 years | |
| Above 5 years | |
| Total | 43,221,104.82 |
(5). Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Nature of payment | Book balance at the end of the period | Book balance at the beginning of the period |
| Security deposits | 7,582,210.19 | 22,781,728.37 |
| Suspense payment receivables | 29,137,807.19 | 90,500,345.08 |
| Reserve funds | 652,910.33 | 552,985.89 |
| Others | 5,848,177.11 | 325,990.72 |
| Total | 43,221,104.82 | 114,161,050.06 |
(6). Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Provision for bad debts | First stage | Second stage | Third stage | Total |
| Expected credit loss over the next 12 months | Expected credit loss for the entire duration (credit impairment not occurred) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance as at January 1, 2023 | 3,293,145.99 | 4,430,510.11 | 32,873,310.33 | 40,596,966.43 |
| Balance as at January 1, 2023 is in the current period | ||||
| -Transferred to the second stage | -11,015.16 | 11,015.16 | ||
| -Transferred to the third stage | -342,930.62 | 342,930.62 | ||
| -Written-back to the second stage | ||||
| -Written-back to the first stage |
| Accrual in the current period | -2,733,212.85 | -4,032,503.69 | -360,469.21 | -7,126,185.75 |
| Written-back in the current period | ||||
| Written-off in the current period | ||||
| Charge off in the current period | -2,000.00 | -339,991.49 | -341,991.49 | |
| Other changes | -51,244.44 | -51,244.44 | ||
| Balance as at June 30, 2023 | 495,673.54 | 66,090.96 | 32,515,780.25 | 33,077,544.75 |
[Note]: Other changes are the disposal of the equity of Hangzhou Xiake Bar Company and HangzhouTiedingxian Company, and the bad debt provision for other receivables is transferred out accordingly.Explanation of significant changes in the book balance of other receivables with changes in provision forloss in the current period:
□ Applicable √ Not applicable
The amount of bad debt provision in the current period and the basis for evaluating whether the creditrisk of financial instruments increases significantly:
□ Applicable √ Not applicable
(7). Information of bad-debt provision
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision written-back or withdrawn in the current period:
□ Applicable √ Not applicable
(8). Other receivables actually write-off in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Written off amount |
| Other receivables actually written off | 341,991.49 |
Wherein, write-off of other important receivables:
□ Applicable √ Not applicable
Explanation on write-off of other receivables:
□ Applicable √ Not applicable
(9). Other receivables of the top five closing balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Company name | Nature of payment | Closing balance | Account age | As a proportion of total closing balance in other receivables (%) | Provision for bad debts Closing balance |
| EURL PHARMATICA | Suspense payment receivables | 18,356,261.04 | 2-3 years | 42.47 | 18,356,261.04 |
| SIKEROM EURPOE GMBH | Suspense payment receivables | 8,053,074.41 | 2-3 years | 18.63 | 8,053,074.41 |
| Hangzhou Property Maintenance Fund Management Center | Security deposits | 4,708,614.72 | Above 3 years | 10.89 | 4,708,614.72 |
| Hangzhou Xiake Bar Catering Management Co., Ltd. | Others | 3,000,000.00 | Within 1 year | 6.94 | 150,000.00 |
| Zhejiang Qiaoxing Construction Group Co., Ltd. | Security deposits | 878,000.00 | Within 1 year | 2.03 | 43,900.00 |
| Total | / | 34,995,950.17 | / | 80.96 | 31,311,850.17 |
(10). Receivables involving government grants
□ Applicable √ Not applicable
(11). Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(12). The amount of assets and liabilities formed by transferring other receivables and continuing
to be involved
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
9. Inventory
(1). Classification of inventories
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Book balance | Inventory falling price reserves/Provision for impairment of contract performance cost | Carrying amount | Book balance | Inventory falling price reserves/Provision for impairment of contract performance cost | Carrying amount | |
| Raw materials | 54,807,838.48 | 1,813,163.07 | 52,994,675.41 | 80,114,114.87 | 1,703,611.59 | 78,410,503.28 |
| Packaging | 44,645,222.82 | 7,002,690.94 | 37,642,531.88 | 42,300,426.18 | 1,016,137.11 | 41,284,289.07 |
| Goods in process | 11,545,472.56 | 467,206.41 | 11,078,266.15 | 18,952,830.41 | 134,093.52 | 18,818,736.89 |
| Outsourcing gifts | 13,357,978.64 | 495,569.76 | 12,862,408.88 | 12,011,197.41 | 65,685.51 | 11,945,511.90 |
| Inventory commodities | 659,726,539.17 | 59,489,358.74 | 600,237,180.43 | 546,279,426.61 | 37,780,598.48 | 508,498,828.13 |
| Low value consumables | 15,802,217.22 | 595,973.14 | 15,206,244.08 | 10,474,077.34 | 380,619.88 | 10,093,457.46 |
| Total | 799,885,268.89 | 69,863,962.06 | 730,021,306.83 | 710,132,072.82 | 41,080,746.09 | 669,051,326.73 |
(2). Inventory falling price reserves and provision for impairment of contract performance cost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Amount increased in the current period | Amount decreased in the current period | Closing balance | ||
| Accrual | Others | Written-back or charge-off | Others | |||
| Raw materials | 1,703,611.59 | 1,975,674.67 | 1,866,123.19 | 1,813,163.07 | ||
| Packaging | 1,016,137.11 | 7,159,582.19 | 1,173,028.36 | 7,002,690.94 | ||
| Goods in process | 134,093.52 | 341,646.02 | 8,533.13 | 467,206.41 | ||
| Outsourcing gifts | 65,685.51 | 498,298.20 | 68,413.95 | 495,569.76 | ||
| Inventory commodities | 37,780,598.48 | 30,983,450.13 | 9,274,689.87 | 59,489,358.74 | ||
| Low value consumables | 380,619.88 | 643,249.87 | 427,896.61 | 595,973.14 | ||
| Total | 41,080,746.09 | 41,601,901.08 | 12,818,685.11 | 69,863,962.06 | ||
(3). Explanation on the closing balance of inventory containing the capitalized amount of
borrowing costs
□ Applicable √ Not applicable
(4). Explanation on amortization amount of contract performance cost in the current period
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
10. Contract assets
(1). Description of contract assets
□ Applicable √ Not applicable
(2). The amount and reasons for significant changes in carrying amount during the Reporting
Period
□ Applicable √ Not applicable
(3). Provision for impairment of contract assets in the current period
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
11. Assets held for sale
□ Applicable √ Not applicable
12. Non-current assets due within one year
□ Applicable √ Not applicable
13. Other current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Contract acquisition cost | ||
| Return cost receivable | 2,193,531.03 | 8,782,156.33 |
| Advance payment of taxes | 174,948.49 | 4,009,626.89 |
| Input VAT to be deducted | 46,087,216.73 | 36,944,213.35 |
| Total | 48,455,696.25 | 49,735,996.57 |
Other description:
None
14. Debt investments
(1). Description of debt investments
□ Applicable √ Not applicable
(2). Significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Impairment provision accrual
□ Applicable √ Not applicable
15. Other debt investments
(1). Description of other debt investments
□ Applicable √ Not applicable
(2). Other significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Impairment provision accrual
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
16. Long-term receivables
(1) Description of long-term receivables
□ Applicable √ Not applicable
(2) Provision for bad debts
□ Applicable √ Not applicable
(3) Long-term receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(4) Assets or liabilities formed by the continuing involvement of transferred long-termreceivables
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
17. Long-term equity investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Invested entity | Opening balance | Changes in the current period | Closing balance | Closing balance of impairment provision | |||||||
| Additional investment | Investment decrease | Recognized investment gains and losses under equity method | Other comprehensive income adjustments | Other changes in equity | Declared payment of cash dividends or profits | Provision for impairment | Others | ||||
| I. Joint Venture | |||||||||||
| Huzhou Panrui Industry Investment Partnership (Limited Partnership) | 3,068,948.16 | -2,049.38 | 3,066,898.78 | ||||||||
| Subtotal | 3,068,948.16 | -2,049.38 | 3,066,898.78 | ||||||||
| II. Affiliated enterprises | |||||||||||
| Xiongke Culture Media (Hangzhou) Co., Ltd. | 2,649,619.70 | -14,687.84 | 2,634,931.86 | ||||||||
| Metis Info Tech (Guangzhou) Co., Ltd. | 6,066,423.66 | -231,700.47 | 5,834,723.19 | ||||||||
| Jiaxing Woyong Investment Partnership (Limited Partnership) | 111,253,221.93 | 6,818,181.82 | -1,546,592.11 | 116,524,811.64 | |||||||
| Zhuhai | 10,576,298.67 | 10,576,298.67 | 92,018,511.89 | ||||||||
| Healthlong Biotechnology Co., Ltd. | |||||||||||
| Beijing Xiushi Culture Development Co., Ltd. | 4,918,865.34 | -36,670.67 | 4,882,194.67 | ||||||||
| Subtotal | 135,464,429.30 | 6,818,181.82 | -1,829,651.09 | 10,576,298.67 | 129,876,661.36 | 92,018,511.89 | |||||
| Total | 138,533,377.46 | 6,818,181.82 | -1,831,700.47 | 10,576,298.67 | 132,943,560.14 | 92,018,511.89 |
Other descriptionNone
18. Investments in other equity instruments
(1). Description of investments in other equity instruments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Hangzhou Regenovo Biotechnology., Ltd. | 20,580,000.00 | 20,580,000.00 |
| LIPOTRUE,S.L. | 35,822,400.00 | 35,822,400.00 |
| Golong Holdings Co., Ltd. [Note] | 90,000,000.00 | 90,000,000.00 |
| Total | 146,402,400.00 | 146,402,400.00 |
[Note] Hangzhou Golong Holdings Co. Ltd. changed its name to Golong Holdings Co. Ltd. in April2023
(2). Description of non-transactional equity instrument investments
□ Applicable √ Not applicable
Other description:
√ Applicable □ Not applicable
Based on the purpose of strategic investment, the Company makes external equity investment, and theinvestee regards the acquired investment of the Company as an equity instrument. Therefore, theCompany designates this part of the equity instrument investment as a financial asset measured at fairvalue through other comprehensive income.
19. Other non-current financial assets
□ Applicable √ Not applicable
20. Investment property
Measurement mode of investment property
(1). Investment property adopting cost measurement model
Unit: Yuan Currency: RMB
| Item | Property and buildings | Land use rights | Construction in progress | Total |
| I. Original book value | ||||
| 1. Opening balance | 78,781,143.26 | 78,781,143.26 | ||
| 2. Amount increased in the current period | ||||
| (1) Outsourcing | ||||
| (2) Transfer-in of inventory\fixed assets\construction in process | ||||
| (3) Increase in enterprise mergers | ||||
| 3. Amount decreased in the current period | ||||
| (1) Disposal | ||||
| (2) Others transferred out | ||||
| 4. Closing balance | 78,781,143.26 | 78,781,143.26 | ||
| II. Accumulated depreciation and accumulated amortization | ||||
| 1. Opening balance | 10,126,442.45 | 10,126,442.45 | ||
| 2. Amount increased in the current period | 2,352,346.43 | 2,352,346.43 | ||
| (1) Provision or amortization | 2,352,346.43 | 2,352,346.43 | ||
| 3. Amount decreased in the current period | ||||
| (1) Disposal | ||||
| (2) Others transferred out | ||||
| 4. Closing balance | 12,478,788.88 | 12,478,788.88 | ||
| III. Provision for impairment | ||||
| 1. Opening balance | ||||
| 2. Amount increased in the current period | ||||
| (1) Provision | ||||
| 3. Amount decreased in the current period | ||||
| (1) Disposal | ||||
| (2) Others transferred out | ||||
| 4. Closing balance | ||||
| IV. Carrying amount | ||||
| 1. Carrying amount at the end of the period | 66,302,354.38 | 66,302,354.38 | ||
| 2. Carrying amount at the beginning of the period | 68,654,700.81 | 68,654,700.81 | ||
(2). Investment property with pending proprietorship certificate:
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
21. Fixed assets
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 559,647,512.15 | 570,376,309.67 |
| Disposal of fixed assets | ||
| Total | 559,647,512.15 | 570,376,309.67 |
Other description:
None
Fixed assets
(1). Description of fixed assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Property and buildings | General equipment | Dedicated equipment | Means of transportation | Total |
| I. Original book value: | |||||
| 1. Opening balance | 539,295,502.97 | 80,477,003.52 | 249,649,332.67 | 20,584,593.97 | 890,006,433.12 |
| 2. Amount increased in the current period | 413,512.99 | 9,426,908.46 | 2,899,075.10 | 5,081,088.53 | 17,820,585.08 |
| (1) Purchase | 13,054.27 | 4,664,817.63 | 1,927,676.85 | 4,585,867.27 | 11,191,416.02 |
| (2) Transfer from construction in progress | 400,458.72 | 4,762,090.83 | 971,398.25 | 495,221.26 | 6,629,169.06 |
| (3) Increase in enterprise mergers | |||||
| 3. Amount decreased in the current period | 3,921,197.11 | 132,339.00 | 391,990.86 | 4,445,526.97 | |
| (1) Disposal or scrapping | 666,818.52 | 132,339.00 | 391,990.86 | 1,191,148.38 | |
| (2) Other decreases [Note] | 3,254,378.59 | 3,254,378.59 | |||
| 4. Closing balance | 539,709,015.96 | 85,982,714.86 | 252,416,068.77 | 25,273,691.64 | 903,381,491.23 |
| II. Accumulated depreciation | |||||
| 1. Opening balance | 127,549,692.50 | 41,778,273.42 | 133,987,291.36 | 16,314,866.18 | 319,630,123.45 |
| 2. Amount increased in the current period | 8,475,679.88 | 4,885,069.48 | 10,435,898.86 | 1,535,456.31 | 25,332,104.53 |
| (1) Provision | 8,475,679.88 | 4,885,069.48 | 10,435,898.86 | 1,535,456.31 | 25,332,104.53 |
| 3. Amount decreased in the current period | 815,098.38 | 40,759.20 | 372,391.32 | 1,228,248.90 | |
| (1) Disposal or scrapping | 633,477.57 | 40,759.20 | 372,391.32 | 1,046,628.09 | |
| (2) Other decreases [Note] | 181,620.81 | 181,620.81 | |||
| 4. Closing balance | 136,025,372.38 | 45,848,244.51 | 144,382,431.02 | 17,477,931.17 | 343,733,979.08 |
| III. Provision for impairment | |||||
| 1. Opening balance | |||||
| 2. Amount increased in the current period | |||||
| (1) Provision | |||||
| 3. Amount decreased in the current period | |||||
| (1) Disposal or scrapping | |||||
| 4. Closing balance | |||||
| IV. Carrying amount | |||||
| 1. Carrying amount at the end of the period | 403,683,643.58 | 40,134,470.35 | 108,033,637.75 | 7,795,760.47 | 559,647,512.15 |
| 2. Carrying amount at the beginning of the period | 411,745,810.47 | 38,698,730.10 | 115,662,041.31 | 4,269,727.79 | 570,376,309.67 |
[Note] Other decreases of the original value of fixed assets of RMB3,254,378.59 and other decreases ofaccumulated depreciation of RMB181,620.81 are due to the disposal of the equity of Hangzhou XiakeBar Company and Hangzhou Tiedingxian Company, and the original value of fixed assets andaccumulated depreciation are transferred out accordingly.
(2). Description of temporarily idle fixed assets
□ Applicable √ Not applicable
(3). Description of fixed assets rented through financial leasing
□ Applicable √ Not applicable
(4). Fixed assets leased out through operating lease
□ Applicable √ Not applicable
(5). Fixed assets without property right certificate
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
Disposal of fixed assets
□ Applicable √ Not applicable
22. Construction in progress
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Construction in progress | 267,796,910.29 | 207,378,935.86 |
| Project goods and material | ||
| Total | 267,796,910.29 | 207,378,935.86 |
Other description:
None
Construction in progress
(1). Description of construction in progress
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Huzhou Production Base Expansion Project (Phase I) | 158,595,879.28 | 158,595,879.28 | 141,886,053.44 | 141,886,053.44 | ||
| Longwu R&D Center Construction Project | 75,707,305.82 | 75,707,305.82 | 34,804,789.71 | 34,804,789.71 | ||
| Decoration Engineering | 4,198,401.85 | 4,198,401.85 | 5,282,700.29 | 5,282,700.29 | ||
| Information System Upgrade Project | 6,224,928.29 | 6,224,928.29 | 4,266,606.14 | 4,266,606.14 | ||
| Make-up Factory | 14,406,085.10 | 14,406,085.10 | 14,323,636.47 | 14,323,636.47 | ||
| Other sporadic projects | 8,664,309.95 | 8,664,309.95 | 6,815,149.81 | 6,815,149.81 | ||
| Total | 267,796,910.29 | 267,796,910.29 | 207,378,935.86 | 207,378,935.86 | ||
(2). Changes of items under important construction in progress in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Budget | Opening balance | Amount increased in the current period | Amount transferred to fixed assets in the current period | Other decreased amount in the current period | Closing balance | Proportion of accumulated project investment to budget (%) | Progress of project | Accumulated amount of interest capitalization | Including: Amount of interest capitalization in the current period | Interest capitalization rate in the current period (%) | Source of fund |
| Huzhou Production Base Expansion Project (Phase I) | RMB416.7833 million | 141,886,053.44 | 18,509,560.32 | 1,799,734.48 | 158,595,879.28 | 41.27 | 41.27% | 16,252,002.95 | 5,860,615.41 | 4.57 | Raised funds and owned funds |
| Longwu R&D Center Construction Project | RMB128.6113 million | 34,804,789.71 | 41,830,834.72 | 928,318.61 | 75,707,305.82 | 59.59 | 58.05% | 10,645,888.94 | 3,757,557.59 | 4.57 | Raised funds and owned funds | |
| Information System Upgrade Project | RMB112.395 million | 4,266,606.14 | 2,170,839.56 | 212,517.41 | 6,224,928.29 | 5.73 | 5.16% | 3,921,244.04 | 1,285,201.46 | 4.57 | Raised funds and owned funds | |
| Make-up Factory | RMB66.11 million | 14,323,636.47 | 2,147,325.49 | 2,064,876.86 | 14,406,085.10 | 93.95 | 98.79% | |||||
| Total | RMB723.8996 million | 195,281,085.76 | 64,658,560.09 | 5,005,447.36 | 254,934,198.49 | / | / | 30,819,135.93 | 10,903,374.46 | / | / |
(3). Provision for impairment of construction in progress in the current period
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
Project goods and material
□ Applicable √ Not applicable
23. Productive biological assets
(1). Productive biological assets with cost measurement mode
□ Applicable√ Not applicable
(2). Productive biological assets with fair value econometric mode
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Property and buildings | Total |
| I. Original book value | ||
| 1. Opening balance | 7,481,934.15 | 7,481,934.15 |
| 2. Amount increased in the current period | 12,032,718.40 | 12,032,718.40 |
| 1) Lease-in | 12,032,718.40 | 12,032,718.40 |
| 3. Amount decreased in the current period | ||
| 4. Closing balance | 19,514,652.55 | 19,514,652.55 |
| II. Accumulated depreciation | ||
| 1. Opening balance | 1,071,299.90 | 1,071,299.90 |
| 2. Amount increased in the current period | 2,496,135.88 | 2,496,135.88 |
| (1) Provision | 2,496,135.88 | 2,496,135.88 |
| 3. Amount decreased in the current period | ||
| (1) Disposal | ||
| 4. Closing balance | 3,567,435.78 | 3,567,435.78 |
| III. Provision for impairment | ||
| 1. Opening balance | ||
| 2. Amount increased in the current period | ||
| (1) Provision | ||
| 3. Amount decreased in the current period | ||
| (1) Disposal | ||
| 4. Closing balance | ||
| IV. Carrying amount | ||
| 1. Carrying amount at the end of the period | 15,947,216.77 | 15,947,216.77 |
| 2. Carrying amount at the beginning of the period | 6,410,634.25 | 6,410,634.25 |
Other description:
None
26. Intangible assets
(1). Description of intangible assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Land use rights | Office software | Patent rights | Non-patented technology | Customer resources | Trademark rights | Total |
| I. Original book value | |||||||
| 1. Opening balance | 472,400,130.10 | 24,280,278.43 | 475,089.70 | 563,293.07 | 12,833,684.00 | 39,897,000.00 | 550,449,475.30 |
| 2. Amount increased in the current period | 385,431.92 | 385,431.92 | |||||
| (1) Purchase | 246,983.64 | 246,983.64 | |||||
| (2) Internal R&D | |||||||
| (3) Increases in business mergers | |||||||
| (4) Transfer from construction in progress | 138,448.28 | 138,448.28 | |||||
| 3. Amount decreased in the current period | 4,000.00 | 4,000.00 | |||||
| (1) Disposal | |||||||
| (2) Other decreases [Note] | 4,000.00 | 4,000.00 | |||||
| 4. Closing balance | 472,400,130.10 | 24,665,710.35 | 475,089.70 | 563,293.07 | 12,833,684.00 | 39,893,000.00 | 550,830,907.22 |
| II. Accumulated amortization | |||||||
| 1. Opening balance | 92,279,870.46 | 21,721,920.25 | 430,621.47 | 539,820.37 | 12,819,610.79 | 2,340,748.70 | 130,132,592.04 |
| 2. Amount increased in the current period | 6,007,884.87 | 999,112.64 | 3,144.66 | 2,995.40 | 1,995,091.66 | 9,008,229.23 | |
| (1) Provision | 6,007,884.87 | 999,112.64 | 3,144.66 | 2,995.40 | 1,995,091.66 | 9,008,229.23 | |
| 3. Amount decreased in the current period | 700.00 | 700.00 | |||||
| (1) Disposal | |||||||
| (2) Other decreases [Note] | 700.00 | 700.00 | |||||
| 4. Closing balance | 98,287,755.33 | 22,721,032.89 | 433,766.13 | 539,820.37 | 12,822,606.19 | 4,335,140.36 | 139,140,121.27 |
| III. Provision for impairment | |||||||
| 1. Opening balance | |||||||
| 2. Amount increased in the current period | |||||||
| (1) Provision | |||||||
| 3. Amount | |||||||
| decreased in the current period | |||||||
| (1) Disposal | |||||||
| 4. Closing balance | |||||||
| IV. Carrying amount | |||||||
| 1. Carrying amount at the end of the period | 374,112,374.77 | 1,944,677.46 | 41,323.57 | 23,472.70 | 11,077.81 | 35,557,859.64 | 411,690,785.95 |
| 2. Carrying amount at the beginning of the period | 380,120,259.64 | 2,558,358.18 | 44,468.23 | 23,472.70 | 14,073.21 | 37,556,251.30 | 420,316,883.26 |
At the end of this period, the proportion of intangible assets formed through internal research anddevelopment of the Company to the balance of intangible assets is 0.00%.
(2). The land use right without the property ownership certificate
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
27. Development expenditure
□ Applicable √ Not applicable
28. Goodwill
(1). Original book value of goodwill
□ Applicable √ Not applicable
(2). Provision for impairment of goodwill
□ Applicable √ Not applicable
(3). Relevant information regarding the asset portfolio and set of asset portfolios to which the
goodwill belongs
□ Applicable √ Not applicable
(4). Descriptions of the process of goodwill impairment testing, key parameters (such as the
growth rate of the forecast period, the growth rate of the stable period, the profit rate, thediscount rate and the forecast period, etc. when the present value of future cash flows areexpected, if applicable) and the recognition method of the impairment losses on goodwill
□ Applicable √ Not applicable
(5). Impact of goodwill impairment test
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
29. Long-term deferred expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Amount increased in the current period | Amortized amount in the current period | Other decreased amount | Closing balance |
| Renovation costs | 19,109,585.61 | 5,392,301.77 | 6,361,736.13 | 879,562.23 | 17,260,589.02 |
| Software service fee | 33,018.85 | 16,509.47 | 16,509.38 | ||
| Total | 19,142,604.46 | 5,392,301.77 | 6,378,245.60 | 879,562.23 | 17,277,098.40 |
Other description:
None
30. Deferred tax assets/deferred tax liabilities
(1). Deferred tax assets without offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary difference | Deferred tax assets | Deductible temporary difference | Deferred tax assets | |
| Provision for impairment of assets | ||||
| Unrealized profit from internal transactions | 73,222,637.62 | 18,305,659.40 | 42,025,801.32 | 10,506,450.33 |
| Deductible loss | ||||
| Government grants related to assets | 5,360,266.33 | 804,039.95 | 6,399,811.33 | 959,971.70 |
| Unused membership credits | 89,939,268.13 | 22,484,817.04 | 83,272,601.46 | 20,818,150.36 |
| Anticipated return losses | 4,541,544.49 | 1,135,386.13 | 4,541,544.48 | 1,135,386.12 |
| Lease charges | 449,832.92 | 67,474.94 | ||
| Advertising fees and business promotion fees | 3,258,145.25 | 814,536.31 | 3,258,145.25 | 814,536.31 |
| Provisions for bad debts of accounts receivable | 15,372,900.91 | 3,843,194.22 | 14,181,029.90 | 3,545,098.74 |
| Provision for obsolete inventory | 56,141,300.99 | 9,042,822.05 | 24,366,081.72 | 4,518,122.80 |
| Impact of share-based | 56,996,057.82 | 10,695,362.68 | 31,280,678.91 | 5,940,147.52 |
| payments | ||||
| Total | 304,832,121.54 | 67,125,817.78 | 209,775,527.29 | 48,305,338.82 |
(2). Deferred tax liabilities without offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Asset appreciation assessment in businesses consolidation not under common control | ||||
| Changes in the fair value of other debt investments | ||||
| Changes in the fair value of other investments in equity instrument | ||||
| One-time deduction for depreciation of fixed assets | 156,226,399.14 | 23,949,022.41 | 126,101,620.56 | 19,019,431.67 |
| Total | 156,226,399.14 | 23,949,022.41 | 126,101,620.56 | 19,019,431.67 |
(3). Deferred tax assets or liabilities listed in net amount after offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Offset amount of deferred tax assets and liabilities at the end of the period | Closing balance of deferred tax assets and liabilities after offsetting | Offset amount of deferred tax assets and liabilities at the beginning of the period | Opening balance of deferred tax assets and liabilities after offsetting |
| Deferred tax assets | 2,263,290.36 | 55,404.46 | ||
| Deferred tax liabilities |
(4). Details of unrecognized deferred tax assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary difference | 152,450,062.18 | 218,452,946.39 |
| Deductible loss | 415,477,977.81 | 393,391,257.51 |
| Total | 567,928,039.99 | 611,844,203.90 |
(5). The deductible loss of unrecognized deferred tax assets will expire in the following years
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Year | Closing amount | Opening amount | Remarks |
| 2023 | 35,615,368.24 | 44,562,908.90 | |
| 2024 | 72,738,168.38 | 89,520,734.89 | |
| 2025 | 62,952,836.45 | 66,686,117.23 | |
| 2026 | 59,479,346.58 | 63,349,129.45 | |
| 2027 | 127,093,665.49 | 129,272,367.04 | |
| 2028 | 57,598,592.67 | ||
| Total | 415,477,977.81 | 393,391,257.51 | / |
Other description:
□ Applicable √ Not applicable
31. Other non-current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Contract acquisition cost | ||||||
| Contract performance cost | ||||||
| Return cost receivable | ||||||
| Contract assets | ||||||
| Other long-term assets | 7,598,619.42 | 7,598,619.42 | 5,554,726.06 | 5,554,726.06 | ||
| Prepaid for long-term asset purchase funds | 9,270,950.10 | 9,270,950.10 | ||||
| Total | 16,869,569.52 | 16,869,569.52 | 5,554,726.06 | 5,554,726.06 | ||
Other description:
None
32. Short-term borrowings
(1). Classification of short-term borrowings
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Pledge loans | ||
| Mortgage loan | ||
| Guaranteed loan | ||
| Credit loans | 200,155,555.56 | 200,195,890.41 |
| Total | 200,155,555.56 | 200,195,890.41 |
Explanation on classification of short-term borrowings:
None
(2). Overdue and outstanding short-term borrowings
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
33. Financial liabilities held for trading
□ Applicable √ Not applicable
34. Derivative financial liabilities
□ Applicable √ Not applicable
35. Notes payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Type | Closing balance | Opening balance |
| Trade acceptance notes | ||
| Bank acceptance notes | 56,801,810.60 | 69,626,352.12 |
| Total | 56,801,810.60 | 69,626,352.12 |
The total amount of outstanding notes payable due at the end of the current period is RMB0.00.
36. Accounts payable
(1). List by accounts payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Payment for goods | 762,167,654.73 | 252,113,782.78 |
| Expenses payable | 237,660,741.42 | 213,566,905.71 |
| Payment for engineering equipment | 63,267,968.49 | 9,746,795.74 |
| Total | 1,063,096,364.64 | 475,427,484.23 |
(2). Significant accounts payable with an aging of more than one year
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
37. Receipts in advance
(1). List by advance accounts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Rents receivable in advance | 351,138.49 | 464,328.26 |
| Total | 351,138.49 | 464,328.26 |
(2). Significant advance accounts with an aging of more than one year
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
38. Contract liabilities
(1). Description of contract liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Advance payment | 114,487,238.02 | 83,234,612.24 |
| Unused membership credits | 98,969,703.58 | 91,368,221.67 |
| Total | 213,456,941.60 | 174,602,833.91 |
(2). The amount and reasons for significant changes in book value during the Reporting Period
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
39. Employee benefits payable
(1). List by employee benefits payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| I. Short-term compensation | 124,278,743.01 | 317,385,935.24 | 362,687,803.57 | 78,976,874.68 |
| II. Post-employment | 660,006.35 | 10,486,485.34 | 10,339,154.71 | 807,336.98 |
| benefits - defined contribution plans | ||||
| III. Dismissal benefit | ||||
| IV. Other benefits due within one year | ||||
| Total | 124,938,749.36 | 327,872,420.58 | 373,026,958.28 | 79,784,211.66 |
(2). List by short-term compensation
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| I. Salaries, bonuses, allowances and subsidies | 123,139,326.87 | 291,380,593.72 | 336,258,851.51 | 78,261,069.08 |
| II. Welfare expenses of employees | 9,797,429.34 | 9,790,737.78 | 6,691.56 | |
| III. Social insurance premium | 764,855.85 | 7,100,941.70 | 7,265,605.80 | 600,191.75 |
| Including: Medical insurance premium | 747,556.58 | 6,648,544.12 | 6,824,569.83 | 571,530.87 |
| Industrial injury insurance premium | 13,253.30 | 434,070.11 | 419,238.79 | 28,084.62 |
| Maternity insurance premium | 4,045.97 | 18,327.47 | 21,797.18 | 576.26 |
| IV. Housing provident fund | 374,560.29 | 7,599,205.80 | 7,864,843.80 | 108,922.29 |
| V. Trade union fund and staff education fund | 1,507,764.68 | 1,507,764.68 | ||
| VI. Short-term compensated absences | ||||
| VII. Short-term profit sharing plan | ||||
| Total | 124,278,743.01 | 317,385,935.24 | 362,687,803.57 | 78,976,874.68 |
(3). List by defined contribution plan
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Basic endowment insurance | 637,429.90 | 10,122,170.53 | 9,979,916.89 | 779,683.54 |
| 2. Unemployment insurance expense | 22,576.45 | 364,314.81 | 359,237.82 | 27,653.44 |
| 3. Enterprise annuity payment | ||||
| Total | 660,006.35 | 10,486,485.34 | 10,339,154.71 | 807,336.98 |
Other description:
□ Applicable √ Not applicable
40. Taxes payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Enterprise income tax | 95,000,869.96 | 111,162,751.37 |
| Value added tax | 56,320,974.02 | 27,112,038.46 |
| Property tax | 2,855,180.41 | 6,689,657.49 |
| Withholding of personal income tax | 1,497,040.34 | 4,226,657.07 |
| Urban maintenance and construction tax | 6,697,207.17 | 1,288,999.75 |
| Surtax for education expenses | 2,609,649.12 | 1,003,854.07 |
| Stamp tax | 349,503.93 | 796,591.64 |
| Surcharge for local education | 1,739,766.08 | 619,094.66 |
| Disabled security fund | 17,614.40 | 19,226.94 |
| Total | 167,087,805.43 | 152,918,871.45 |
Other description:
None
41. Other payables
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest payable | ||
| Dividends payable | ||
| Other payables | 211,974,456.13 | 216,392,183.41 |
| Total | 211,974,456.13 | 216,392,183.41 |
Other description:
None
Interest payable
□ Applicable √ Not applicable
Dividends payable
□ Applicable √ Not applicable
Other payables
(1). List other payables by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Security deposits | 41,089,622.51 | 46,394,144.19 |
| Restricted stock repurchase obligations | 163,149,000.00 | 164,976,000.00 |
| Others | 7,735,833.62 | 5,022,039.22 |
| Total | 211,974,456.13 | 216,392,183.41 |
(2). Significant other payables with an aging of more than one year
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
42. Held-for-sale liabilities
□ Applicable √ Not applicable
43. Non-current liabilities due within one year
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Long-term borrowings due within one year | ||
| Bonds payable due within one year | ||
| Long-term payables due within one year | ||
| Lease liabilities due within one year | 3,864,732.04 | 2,549,452.14 |
| Total | 3,864,732.04 | 2,549,452.14 |
Other description:
None
44. Other current liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Short-term bonds payable | ||
| Return payment payable | ||
| Tax on items to be resold | 12,821,142.71 | 10,820,499.59 |
| Total | 12,821,142.71 | 10,820,499.59 |
Changes in short-term bonds payable:
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
45. Long-term borrowings
(1). Classification of long-term borrowings
□ Applicable √ Not applicable
Other explanations, including the range of interest rate:
□ Applicable √ Not applicable
46. Bonds payable
(1). Bonds payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Convertible corporate bonds | 740,666,717.66 | 724,491,557.93 |
| Total | 740,666,717.66 | 724,491,557.93 |
(2). Changes of bonds payable (excluding other financial instruments such as preference sharesand perpetual bonds classified as financial liabilities)
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Bond name | Face value | Issuance date | Bond period | Issuance amount | Opening balance | Issuance in the current period | Interest accrued by face value | Premium or discount amortization | Repayment in the current period | Effect of share conversion | Closing balance |
| Proya convertible bond | 100.00 | December 8, 2021 | 6 years | 751,713,000.00 | 724,491,557.93 | 1,862,600.02 | 14,136,701.91 | 175,857.80 | 740,666,717.66 | ||
| Total | / | / | / | 751,713,000.00 | 724,491,557.93 | 1,862,600.02 | 14,136,701.91 | 175,857.80 | 740,666,717.66 |
(3). Explanation on conversion conditions and tranches of convertible bonds
√ Applicable □ Not applicable
With the approval issued by China Securities Regulatory Commission in the Approval on Public Issue ofConvertible Corporate Bonds of Proya Cosmetics Co., Ltd. (ZJXK [2021] No. 3408), on December 8,2021, the Company issued 7,517,130 convertible corporate bonds to unspecified targets at RMB100.00par value per share for total consideration of RMB751,713,000.00.The coupon rate of the aforesaid convertible corporate bonds is 0.30% for the first year, 0.50% for thesecond year, 1.00% for the third year, 1.50% for the fourth year, 1.80% for the fifth year and 2.00% forthe sixth year. Annual interest payment date is the anniversary of the date of initial offering ofconvertible bonds. The Company will, no later than five trading days after the interest payment date ofeach year, pay the interests of the year and, no later than five trading days after the maturity date ofconvertible corporate bonds, redeem all outstanding convertible bonds from investors at a price of 115%of the par value of the convertible bonds issued this time (including the annual interests of the lasttranche).The convertible period of convertible bonds starts from the first trading day after the expiration of 6months from the issuance date of convertible bonds until the maturity date of convertible bonds. The
initial conversion price shall be RMB195.98 per share, not lower than the average trading price of Ashares of the Company in the twenty trading days prior to the publication of the prospectus (if the stockprice is adjusted for ex-rights or ex-dividend in the twenty trading days, the closing price of the tradingday before such adjustment is calculated according to the price after the ex-rights or ex-dividendadjustment) or the average trading price of A shares of the Company in the previous trading day, andshall not be adjusted upward.In May 2022, the Company completed the 2021 Equity Distribution Plan. According to the relevantterms of Public Issuance of Convertible Corporate Bonds of A Shares of Proya Cosmetics Co., Ltd. andrelevant requirements of CSRC on issuance of convertible corporate bonds, the price of conversion ofProya convertible bond was adjusted to RMB139.37 per share from RMB195.98 per share, which tookeffect since May 30, 2022 (the ex-dividend date).In September 2022, the Company completed the registration of the Restricted Shares granted under the2022 Restricted Stock Incentive Plan. According to the relevant terms of Public Issuance of ConvertibleCorporate Bonds of A Shares of Proya Cosmetics Co., Ltd. and relevant requirements of CSRC onissuance of convertible corporate bonds, the price of conversion of Proya convertible bond was adjustedto RMB138.92 per share from RMB139.37 per share, which took effect since September 9, 2022.In May 2023, the Company completed the 2022 Equity Distribution Plan. According to the relevantterms of Public Issuance of Convertible Corporate Bonds of A Shares of Proya Cosmetics Co., Ltd. andrelevant requirements of CSRC on issuance of convertible corporate bonds, the price of conversion ofProya convertible bond was adjusted to RMB98.61 per share from RMB138.92 per share, which tookeffect since May 29, 2023 (the ex-dividend date).In 2022, there were 7,760 shares converted from convertible corporate bonds, the share capital increasedby RMB5,517.00, capital reserves (equity premium) increased by RMB754,813.50, and other equityinstruments reduced by RMB53,111.99.During the current period, there were 1,270 shares converted from convertible corporate bonds, the sharecapital increased by RMB910.00, capital reserves (equity premium) increased by RMB127,691.53, andother equity instruments decreased by RMB8,099.98.
(4). Explanation on other financial instruments classified as financial liabilitiesBasic information of other financial instruments such as preference shares and perpetual bonds that areoutstanding at the end of the period
□ Applicable √ Not applicable
Statement of changes in financial instruments such as preference shares and perpetual bonds that areoutstanding at the end of the period
□ Applicable √ Not applicable
Explanation on the basis of classifying other financial instruments into financial liabilities:
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
47. Lease liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Operating leases payable | 12,673,933.97 | 3,814,629.83 |
| Unrecognized financing expense | -1,392,372.69 | -96,510.42 |
| Total | 11,281,561.28 | 3,718,119.41 |
Other description:
None
48. Long-term payables
List by item
□ Applicable √ Not applicable
Long-term payables
□ Applicable √ Not applicable
Special accounts payable
□ Applicable √ Not applicable
49. Long-term employee benefits payable
□ Applicable √ Not applicable
50. Estimated liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Closing balance | Cause of formation |
| Provide external guarantees | |||
| Pending litigations | |||
| Product quality assurance | |||
| Restructuring obligation | |||
| Loss-making contract to be performed | |||
| Return payment payable | 59,282,928.68 | 9,143,868.44 | Estimated future potential return losses |
| Others | |||
| Total | 59,282,928.68 | 9,143,868.44 | / |
Other explanations, including key assumptions and estimates concerning estimated significant liabilities:
None
51. Deferred income
Information of deferred income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Cause of formation |
| Government grants | 6,399,811.33 | 1,039,545.00 | 5,360,266.33 | Funded by the government | |
| Total | 6,399,811.33 | 1,039,545.00 | 5,360,266.33 | / |
Items involving government grants:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Liability item | Opening balance | Amount of new subsidies in the current period | Amount included in non-operating revenue of the current period | Amount included in other income in the current period | Other changes | Closing balance | Asset-related/ income-related |
| Subsidies for modified cosmetic technology | 6,399,811.33 | 1,039,545.00 | 5,360,266.33 | Asset-related |
Other description:
√ Applicable □ Not applicable
For the details on inclusion of government grants of the current period into profit or loss of the currentperiod, please see the particulars contained in “84. Government grants”, “VII. Notes to the Items in theConsolidated Financial Statements”, “Section X Financial Report”.
52. Other non-current liabilities
□ Applicable √ Not applicable
53. Share capital
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Opening balance | Increase or decrease in the change (+, -) | Closing balance | |||||
| Issuance of new shares | Bonus shares | Shares converted from capital reserve | Others | Subtotal | |||
| Total shares | 283,519,469 | 113,408,136 | 910 | 113,409,046 | 396,928,515 | ||
Other description:
(1) Changes in equity
Shares converted from capital reserve increased by 113,408,136 shares, which was decided at the 11thmeeting of the third session of the Board of Directors of the Company held in 2023 and 2022 AnnualGeneral Meeting, based on the total share capital of 283,520,339 shares of the Company as of thedividend payment date of record. Four shares will be issued for every ten shares to all shareholdersthrough capitalization of the capital reserve and share capital increased by RMB113,408,136.Other shares increased by 910 shares, which was due to the conversion of convertible corporate bonds ofthe Company totaled 1,270 shares in the current period. After the conversion, the share capital increasedby RMB910.00.
(2) Description of share freezing
| Name of shareholder | Number of shareholding (shares) | Frozen shares (shares) | Type of freezing |
| FANG Yuyou | 59,625,258 | 17,041,269 | Judicial freezing |
| Subtotal | 59,625,258 | 17,041,269 |
54. Other equity instruments
(1) Basic information of other financial instruments such as preference shares and perpetualbonds that are outstanding at the end of the period
□ Applicable √ Not applicable
(2) Statement of changes in financial instruments such as preference shares and perpetual bondsthat are outstanding at the end of the period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Outstanding financial instruments | Opening | Increase in the current period | Decrease in the current period | Closing | ||||
| Number | Carrying amount | Number | Carrying amount | Number | Carrying amount | Number | Carrying amount | |
| Proya convertible bond | 7,509,370 | 50,903,510.12 | 1,270 | 8,099.98 | 7,508,100 | 50,895,410.14 | ||
| Total | 7,509,370 | 50,903,510.12 | 1,270 | 8,099.98 | 7,508,100 | 50,895,410.14 | ||
Changes of other equity instruments in the current period, explanation on reasons for changes, and basisfor relevant accounting treatment:
□ Applicable √ Not applicable
Other description:
√ Applicable □ Not applicable
The decrease in the current period amounted to RMB8,099.98, which was due to 1,270 shares convertedfrom convertible corporate bonds. The share capital increased by RMB910.00, capital reserves (equitypremium) increased by RMB127,691.53, and other equity instruments decreased by RMB8,099.98.
55. Capital reserve
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Capital premium (Equity premium) | 858,188,638.87 | 127,691.53 | 113,408,136.00 | 744,908,194.40 |
| Other capital reserves | 56,627,147.35 | 49,961,246.32 | 45,189.82 | 106,543,203.85 |
| Total | 914,815,786.22 | 50,088,937.85 | 113,453,325.82 | 851,451,398.25 |
Other explanations, including the increase and decrease in the current period and the explanation on thereasons for the changes:
1) Increase/decrease in capital premium
The capital premium (equity premium) of the current period increased by RMB127,691.53, which wasdue to the conversion of convertible corporate bonds in the current period. For details, please see theparticulars contained in “46. Bonds payable”, “VII. Notes to the Items of Consolidated FinancialStatements”, “Section X Financial Report”.The capital premium (equity premium) of the current period decreased by RMB113,408,136.00, whichwas due to the conversion of capital reserve into share capital of the Company. For details, please see theparticulars contained in “53. Share capital”, “VII. Notes to the Items of Consolidated FinancialStatements”, “Section X Financial Report”.
2) Increase/decrease in other capital reserves
Other capital reserves of the current period increased by RMB49,961,246.32, which was due to therestricted stock incentives of RMB49,961,246.32 recognized under the Equity Incentive Plan andcalculated into other capital reserves;Other capital reserves of the current period decreased by RMB45,189.82, which was due to the deferredtax assets accrued for the part of restricted share incentives recognized after writing back amountsdeductible before tax for expected future periods and offsetting other capital reserves.
56. Treasury stock
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Restricted shares with repurchase obligation | 164,976,000.00 | 1,827,000.00 | 163,149,000.00 | |
| Total | 164,976,000.00 | 1,827,000.00 | 163,149,000.00 |
Other explanations, including the increase and decrease in the current period and the explanation on thereasons for the changes:
The treasury stock of the current period decreased by RMB1,827,000.00, which was due to treasurystock offset by dividends distributed on unlocked 2,100,000 restricted shares and the correspondingadjustment of other accounts payable.
57. Other comprehensive income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Amount incurred in the current period | Closing balance | |||||
| Amount incurred before income tax in the current period | Less: Included in other comprehensive income for the previous period and transferred in profit or loss for the current period | Less: Included in other comprehensive income for the previous period and transferred in retained earnings for the current period | Less: Income tax expenses | Attributed to parent company after tax | Attributed to minority shareholders after tax | |||
| I. Other comprehensive income that cannot be reclassified into profit or loss | ||||||||
| Including: Changes arising from the re-measurement of defined benefit plans | ||||||||
| Other comprehensive income that cannot be reclassified into profit or loss under equity method | ||||||||
| Changes in the fair value of other investments in equity | ||||||||
| instrument | ||||||||
| Changes in fair value of the Company's own credit risks | ||||||||
| II. Other comprehensive income to be reclassified into profit or loss | -1,918,603.07 | 1,269,633.36 | 1,269,633.36 | -648,969.71 | ||||
| Including: Other comprehensive income that can be converted into profit or loss under the equity method | ||||||||
| Changes in the fair value of other debt investments | ||||||||
| Amount of financial assets reclassified into other comprehensive income | ||||||||
| Credit impairment provisions for other debt investments | ||||||||
| Cash flow hedging reserve | ||||||||
| Conversion differences of financial statements denominated in foreign currencies | -1,918,603.07 | 1,269,633.36 | 1,269,633.36 | -648,969.71 | ||||
| Total other comprehensive income | -1,918,603.07 | 1,269,633.36 | 1,269,633.36 | -648,969.71 |
Other explanations, including the adjustment of the effective part of cash flow hedging profit or loss intothe initially recognized amount of the hedged item:
None
58. Special reserve
□ Applicable √ Not applicable
59. Surplus reserve
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Legal surplus reserve | 141,759,734.50 | 141,759,734.50 | ||
| Discretionary surplus reserve | ||||
| Reserve fund | ||||
| Enterprise development fund | ||||
| Others | ||||
| Total | 141,759,734.50 | 141,759,734.50 |
Explanation on surplus reserves, including the increase and decrease in the current period and theexplanation on the reasons for the changes:
None
60. Undistributed profit
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | In the current period | Previous year |
| Undistributed profit at the end of the previous period before adjustment | 2,300,384,763.19 | 1,696,978,064.52 |
| Total undistributed profit at the beginning of the adjustment period (+ for increase, - for decrease) | ||
| Unappropriated earnings at the beginning of period after adjustment | 2,300,384,763.19 | 1,696,978,064.52 |
| Plus: Net profit attributable to the owner of the parent company in the current period | 499,493,997.71 | 817,400,223.93 |
| Less: Withdrawal of statutory surplus reserve | 41,124,954.50 | |
| Withdrawal of any surplus reserves | ||
| Withdrawal of general risk provision | ||
| Dividends payable on common stock | 246,662,694.93 | 172,868,570.76 |
| Common stock dividends converted to share capital | ||
| Undistributed profit at the end of the period | 2,553,216,065.97 | 2,300,384,763.19 |
According to the Resolution of the 2022 Annual General Meeting of the Company, the Companydistributed cash dividend of RMB8.70 (tax inclusive) per 10 shares to all shareholders based on the totalshare capital of 283,520,339 shares registered on the registration date of dividend-paying equity, totalingRMB246,662,694.93 (tax inclusive).Details of the adjustment of the undistributed profit at the beginning of the period:
1. The undistributed profit affected by the retroactive adjustment in accordance with AccountingStandards for Business Enterprises and its related new regulations at the beginning of the period isRMB0.00.
2. The undistributed profit affected by the change of accounting policy at the beginning of the period isRMB0.00.
3. The undistributed profit affected by the correction of major accounting errors at the beginning of theperiod is RMB0.00.
4. The undistributed profit affected by the change of combination scope caused by the common controlat the beginning of the period is RMB0.00.
5. The undistributed profit affected by other adjustments at the beginning of the period is RMB0.00.
61. Operating revenue and operating cost
(1). Information of operating revenue and operating cost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 3,619,374,788.36 | 1,061,937,769.29 | 2,615,919,115.33 | 830,689,997.38 |
| Other business | 7,617,089.86 | 7,552,044.64 | 10,024,128.96 | 6,344,746.42 |
| Total | 3,626,991,878.22 | 1,069,489,813.93 | 2,625,943,244.29 | 837,034,743.80 |
(2). Information of income generated by the contract
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
Other description:
1) For details on income breakdown by brand, please see the particulars contained in “6. Segmentinformation”, “XVI. Other Significant Matters”, “Section X Financial Report”.
2) Income breakdown by goods or service transfer time
| Item | Amount for the current period | Amount for the same period in the previous year |
| Income recognized at a certain point | 3,619,396,232.21 | 2,624,582,336.26 |
| Income recognized within a period of time | 7,595,646.01 | 1,360,908.03 |
| Subtotal | 3,626,991,878.22 | 2,625,943,244.29 |
62. Taxes and surcharges
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Consumption tax | 184,238.97 | 10,616.45 |
| Urban maintenance and construction tax | 18,641,207.09 | 12,367,541.47 |
| Education surcharge | 8,646,048.99 | 6,098,531.01 |
| Surcharge for local education | 5,764,032.69 | 4,065,687.34 |
| Stamp tax | 1,427,080.88 | 861,783.14 |
| Property tax | 3,793,909.73 | 2,020,782.23 |
| Vehicle and vessel use tax | 13,039.40 | 4,170.40 |
| Total | 38,469,557.75 | 25,429,112.04 |
Other description:
None
63. Selling expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Image promotion expense | 1,375,271,382.64 | 914,789,856.38 |
| Employee remuneration | 160,955,637.56 | 176,935,767.31 |
| Office allowances | 18,803,085.77 | 11,157,885.89 |
| Travel expenses | 6,410,208.59 | 5,239,809.36 |
| Conference fees | 4,299,563.82 | 1,369,251.43 |
| Equity incentive expense for restricted shares | 2,582,590.71 | |
| Survey consulting fees | 6,319,252.31 | 3,284,713.25 |
| Others | 5,355,553.86 | 4,144,367.00 |
| Total | 1,579,997,275.26 | 1,116,921,650.63 |
Other description:
None
64. General and administrative expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Employee remuneration and service fees | 78,175,887.74 | 71,686,202.20 |
| Office allowance and business entertainment expenses | 34,943,670.30 | 24,577,036.46 |
| Expenses for depreciation, amortization and leases | 21,646,521.25 | 21,559,690.88 |
| Equity incentive expense for restricted shares | 42,040,845.63 | |
| Consultation and intermediary fees | 6,340,974.78 | 5,676,074.62 |
| Travel expense and conference fees | 4,740,467.63 | 1,708,872.35 |
| Others | 4,238,791.23 | 1,932,278.31 |
| Total | 192,127,158.56 | 127,140,154.83 |
Other description:
None
65. R&D expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Labor cost | 36,691,200.82 | 30,174,033.12 |
| Outsourced R&D expense | 31,341,477.15 | 21,504,716.33 |
| Direct input cost | 8,855,671.21 | 6,836,001.15 |
| Expenses for depreciation, amortization and leases | 4,277,735.35 | 1,820,592.19 |
| Equity incentive expense for restricted shares | 5,337,809.98 | |
| Others | 5,016,970.64 | 731,351.28 |
| Total | 91,520,865.15 | 61,066,694.07 |
Other description:
None
66. Financial expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Interest income | -34,019,097.62 | -24,330,282.91 |
| Interest expenses | 5,817,515.18 | 6,535,131.18 |
| Handling fees | 317,082.93 | 286,819.54 |
| Exchange gains and losses | -2,469,067.40 | 2,703,555.21 |
| Total | -30,353,566.91 | -14,804,776.98 |
Other description:
None
67. Other incomes
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Government grants | 34,639,076.23 | 20,440,098.37 |
| Refund of service charges for withholding personal income tax | 680,352.10 | 523,373.72 |
| Additional deduction of input VAT | 213,193.25 | -335,500.59 |
| Total | 35,532,621.58 | 20,627,971.50 |
Other description:
For the details on government grants included in other income of the current period, please see theparticulars contained in “84. Government grants”, “VII. Notes to the Items of Consolidated FinancialStatements”, “Section X Financial Report”.
68. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Long-term equity investment income measured by equity method | -1,831,700.47 | -3,658,316.04 |
| Investment income from disposal of long-term equity investment | 667,073.59 | |
| Investment income of financial assets held for trading during the holding period | ||
| Dividend income from investment in other equity instruments during the holding period | ||
| Interest income from debt investment during the holding period | ||
| Interest income from other debt investments during the holding period | ||
| Investment income from disposal of financial assets held for trading | ||
| Investment income from disposal of investment in other equity instruments | ||
| Investment income from disposal of debt investment | ||
| Investment income from disposal of other debt investments | ||
| Gains of debt restructuring | ||
| Total | -1,164,626.88 | -3,658,316.04 |
Other description:
None
69. Net exposure hedging gains
□ Applicable √ Not applicable
70. Income from changes in fair value
□ Applicable √ Not applicable
71. Credit impairment losses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Bad debt loss on notes receivable | ||
| Bad debt loss on accounts receivable | -372,328.93 | 813,881.14 |
| Bad debt loss on other receivables | 7,126,185.75 | 61,670.91 |
| Impairment losses of debt investment | ||
| Other impairment losses of debt investment | ||
| Bad debt loss on long-term receivables | ||
| Loss from impairment of contract assets | ||
| Total | 6,753,856.82 | 875,552.05 |
Other description:
None
72. Assets impairment loss
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| I. Loss on bad debts | ||
| II. Loss of inventory falling price and impairment loss of contract performance cost | -41,601,901.08 | -63,474,565.18 |
| III. Impairment loss of long-term equity investment | -10,576,298.67 | -26,080,616.06 |
| IV. Impairment loss of investment property | ||
| V. Fixed asset impairment losses | ||
| VI. Impairment loss from construction materials | ||
| VII. Impairment loss of projects under construction | ||
| VIII. Impairment loss of productive biological assets | ||
| IX. Loss of impairment of oil and gas assets | ||
| X. Impairment loss of intangible assets | ||
| XI. Impairment loss of goodwill | ||
| XII. Others | ||
| Total | -52,178,199.75 | -89,555,181.24 |
Other description:
None
73. Income from disposal of assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Gains on disposal of fixed assets | -217,694.21 | |
| Total | -217,694.21 |
Other description:
□ Applicable √ Not applicable
74. Non-operating revenue
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in current non-recurring gains and losses |
| Total profit from disposal of non-current assets | |||
| Including: Gains from disposal of fixed assets | |||
| Gains from disposal of intangible assets | |||
| Revenue from debt restructuring | |||
| Non-monetary asset exchange profits | |||
| Accepting donations | |||
| Government grants | |||
| Amounts not required to be paid | 819,297.29 | 819,297.29 | |
| Revenue from fines and liquidated damages | 80,499.36 | 50,000.00 | 80,499.36 |
| Others | 459,867.52 | 258,882.06 | 459,867.52 |
| Total | 1,359,664.17 | 308,882.06 | 1,359,664.17 |
Government grants included in current profits and losses
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
75. Non-operating expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in current non-recurring gains and losses |
| Total loss from disposal of non-current assets | |||
| Including: Loss from disposal of fixed assets | |||
| Loss on disposal of intangible assets | |||
| Loss from debt restructuring | |||
| Non-monetary asset exchange losses | |||
| External donation | 459,615.00 | 34,600.00 | 459,615.00 |
| Late payment fees | 2,347,897.07 | 2,347,897.07 | |
| Loss on retirement of non-current assets | 100,854.99 | 100,854.99 | |
| Others | 4,976.56 | 516,181.27 | 4,976.56 |
| Total | 2,913,343.62 | 550,781.27 | 2,913,343.62 |
Other description:
None
76. Income tax expenses
(1) Income tax expense statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Current income tax expense | 158,636,450.28 | 85,324,305.00 |
| Deferred income tax expense | -13,991,718.91 | 7,323,122.04 |
| Total | 144,644,731.37 | 92,647,427.04 |
(2) Adjustment process of accounting profit and income tax expense
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period |
| Total profit | 672,913,052.59 |
| Income tax expense calculated at statutory/applicable tax rate | 168,228,263.15 |
| Influence of different tax rates applied to subsidiaries | -41,375,352.13 |
| Influence of adjusting income tax in previous periods | -1,045,113.54 |
| Influence of non-taxable income | |
| Influence of non-deductible costs, expenses and losses | 2,874,985.49 |
| Influence of deductible loss of unrecognized deferred income tax assets in the previous period | -8,877,968.09 |
| Influence of deductible temporary differences or deductible losses of unrecognized deferred income tax assets in the current period | 31,792,050.31 |
| Additional deduction of R&D expenses | -6,952,133.82 |
| Income tax expense | 144,644,731.37 |
Other description:
□ Applicable √ Not applicable
77. Other comprehensive income
√ Applicable □ Not applicable
For the details, please see the particulars contained in “57. Other comprehensive income”, “VII. Notes tothe Items of Consolidated Financial Statements”, “Section X Financial Report”.
78. Items in cash flow statement
(1). Other cash received relating to operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Interest income from bank deposits | 34,019,097.62 | 24,233,809.41 |
| Government grants | 33,499,531.23 | 19,400,553.37 |
| Receivables, payables and others | 71,797,601.09 | 20,707,779.37 |
| Total | 139,316,229.94 | 64,342,142.15 |
Explanation on other cash received relating to operating activities:
None
(2). Other cash paid relating to operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Expenses paid in cash | 1,352,917,250.79 | 969,394,367.73 |
| Receivables, payables and others | 17,254,242.10 | 24,745,797.67 |
| Total | 1,370,171,492.89 | 994,140,165.40 |
Explanation on other cash paid relating to operating activities:
None
(3). Other cash received relating to investing activities
□ Applicable √ Not applicable
(4). Other cash paid relating to investing activities
□ Applicable √ Not applicable
(5). Other cash received relating to financing activities
□ Applicable √ Not applicable
(6). Other cash paid relating to financing activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Operating lease rentals paid | 3,017,591.46 | |
| Amount for acquisition of minority equity | 45,000,000.00 | |
| Total | 3,017,591.46 | 45,000,000.00 |
Other cash paid relating to financing activities:
None
79. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Supplementary information | Amount of the current period | Amount of the previous period |
| 1. Reconciliation of net profit to cash flows from operating activities: | ||
| Net profit | 528,268,321.22 | 308,556,365.92 |
| Add: Provision for impairment of assets | 52,178,199.75 | 89,555,181.24 |
| Credit impairment losses | -6,753,856.82 | -875,552.05 |
| Depreciation of fixed assets, depletion of oil and gas assets and depreciation of productive biological assets | 17,248,552.10 | 25,408,239.42 |
| Amortization of right-of-use assets | 1,734,279.12 | |
| Amortization of intangible assets | 9,008,229.23 | 8,420,860.43 |
| Amortization of long-term deferred expenses | 6,398,143.87 | 8,386,299.09 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (“-” for income) | 217,694.21 | |
| Loss on retirement of fixed assets (“-” for income) | 100,854.99 | |
| Losses on changes in fair value (“-” for income) | ||
| Financial expenses (“-” for income) | 5,817,515.18 | 6,535,131.18 |
| Investment loss (“-” for income) | 1,164,626.88 | 3,658,316.04 |
| Decrease in deferred tax assets (“-” for increase) | -18,921,309.65 | 7,323,122.04 |
| Increase in deferred tax liabilities (“-” for decrease) | 4,929,590.74 | -885,037.35 |
| Decrease in inventory (“-” for increase) | -102,571,881.18 | -138,821,424.14 |
| Decrease of operating receivable items (“-” for increase) | 69,128,299.79 | 42,008,373.99 |
| Increase in operational payables (“-” for decrease) | 563,359,566.28 | 354,512,254.57 |
| Others | 49,961,246.32 | |
| Net cash flows from operating activities | 1,181,268,072.03 | 713,782,130.38 |
| 2. Major investing and financing activities that do not involve cash receipts and payments: | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets under finance lease | ||
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 3,952,864,158.35 | 2,694,296,764.69 |
| Less: Opening balance of cash | 3,125,333,085.05 | 2,378,334,768.09 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | 827,531,073.30 | 315,961,996.60 |
(2) Net cash paid to acquire subsidiaries in the current period
□ Applicable √ Not applicable
(3) Net cash received from disposal of subsidiaries in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| amount | |
| Cash or cash equivalents received from disposal of subsidiaries in the current period | 5,000,000.00 |
| Including: Hangzhou Xiake Bar Catering Management Co., Ltd. | 3,500,000.00 |
| Hangzhou Tiedingxian Catering Management Co., Ltd. | 1,500,000.00 |
| Less: Cash and cash equivalents held by subsidiary on date of losing control | 1,981,857.39 |
| Including: Hangzhou Xiake Bar Catering Management Co., Ltd. | 1,294,311.74 |
| Hangzhou Tiedingxian Catering Management Co., Ltd. | 687,545.65 |
| Add: Cash or cash equivalents received in the current period from disposal of subsidiaries in previous periods | |
| Net cash received from disposal of subsidiaries | 3,018,142.61 |
Other description:
None
(4) Composition of cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| I. Cash | 3,952,864,158.35 | 3,125,333,085.05 |
| Including: Cash in vault | 21,976.11 | 20,176.08 |
| Bank deposits that can be used for payment at any time | 3,933,070,722.34 | 3,048,251,723.18 |
| Other monetary capital that can be used for payment at any time | 19,771,459.90 | 77,061,185.79 |
| Funds deposited with the central bank for payment |
| Deposits in other banks | ||
| Funds for interbank lending | ||
| II. Cash equivalents | ||
| Including: Bond investment due within three months | ||
| III. Closing balance of cash and cash equivalents | 3,952,864,158.35 | 3,125,333,085.05 |
| Including: Cash and cash equivalents with restricted use by the parent company or a subsidiary of the group |
Other description:
√ Applicable □ Not applicable
| Time point | Balance of monetary capital | Cash and cash equivalents | Difference | Causes of difference |
| June 30, 2023 | 3,960,227,111.24 | 3,952,864,158.35 | 7,362,952.89 | Fixed-term deposit margin for transformers of RMB250,000.00, as well as ETC vehicle deposit of RMB70,000.00, Pinduoduo deposit of RMB5,000,000.00 and Tmall and Alipay deposits of RMB2,042,952.89 in other monetary capital. |
| December 31, 2022 | 3,161,003,085.05 | 3,125,333,085.05 | 35,670,000.00 | Fixed-term deposits of RMB30,000,000.00, fixed-term deposit margin for transformers of RMB250,000.00, ETC vehicle deposit of RMB70,000.00, Pinduoduo deposit of RMB5,000,000.00 as well as Tmall and Alipay deposits of RMB350,000.00. |
80. Notes on items in the change statement of owner's equity
Explanation on the name of “Others” item for adjusting the closing balance of the previous year andadjustment amounts:
□ Applicable √ Not applicable
81. Assets with limited ownership or use rights
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Carrying amount at the end of the period | Cause for restrictions |
| Monetary capital | 7,362,952.89 | Fixed-term deposit margin for transformers, Pinduoduo deposit, as well as Tmall and Alipay deposits |
| Notes receivable | ||
| Inventory | ||
| Fixed assets | ||
| Intangible assets | ||
| Total | 7,362,952.89 | / |
Other description:
None
82. Foreign currency monetary items
(1). Foreign currency monetary items
√ Applicable □ Not applicable
Unit: Yuan
| Item | Closing foreign currency balance | Converted exchange rate | RMB balance converted at the end of period |
| Monetary capital | - | - | 84,393,047.26 |
| Including: SF | 22,953.62 | 8.0614 | 185,038.31 |
| EUR | 4,539,846.21 | 7.8771 | 35,760,822.58 |
| HKD | 32,893,119.75 | 0.9220 | 30,326,798.55 |
| JPY | 165,227,935.00 | 0.0501 | 8,276,928.18 |
| KRW | 57,791,646.00 | 0.0055 | 317,588.87 |
| SGD | 9,646.04 | 5.3442 | 51,550.37 |
| USD | 1,310,973.29 | 7.2258 | 9,472,830.80 |
| VND | 4,805,159.00 | 0.0003 | 1,489.60 |
| Accounts receivable | - | - | 2,477,505.48 |
| Including: EUR | 218,942.52 | 7.8771 | 1,724,632.12 |
| HKD | 1,603.06 | 0.9220 | 1,477.99 |
| JPY | 14,999,708.00 | 0.0501 | 751,395.37 |
| Other receivables | - | - | 23,373,011.55 |
| Including: EUR | 2,865,596.08 | 7.8771 | 22,572,586.88 |
| JPY | 15,978,454.00 | 0.0501 | 800,424.67 |
| Accounts payable | 7,841,975.24 | ||
| Including: EUR | 876,165.02 | 7.8771 | 6,901,639.48 |
| HKD | 22,500.00 | 0.9220 | 20,744.55 |
| JPY | 18,357,312.45 | 0.0501 | 919,591.21 |
| Other payables | - | - | 302,922.31 |
| Including: HKD | 5,975.00 | 0.9220 | 5,508.83 |
| JPY | 52,200.00 | 0.0501 | 2,614.91 |
| KRW | 53,644,495.00 | 0.0055 | 294,798.57 |
Other description:
None
(2). Descriptions of overseas operating entities, including disclosure of the main overseas businesslocations, functional currency and the basis for selection of important overseas operatingentities, and the reasons for changes in functional currency (if any)
√ Applicable □ Not applicable
Hapsode Co., Ltd. and Hanna Cosmetics Co., Ltd. are located in South Korea, with business income andexpenditures denominated in Korean Won which is used as their accounting currency. Hong KongXinghuo Industry Limited, Hong Kong Zhongwen Electronic Commerce Co., Limited, Hong KongXuchen Trading Limited, Hong Kong Keshi Trading, Ltd., Boya (Hong Kong) Investment ManagementCo., Ltd. and Hong Kong Wanyan Electronic Commerce Co., Ltd. are located in Hong Kong and useRMB as their accounting currency. P.R.O Co., Ltd. is located in Japan, with business income andexpenditures denominated in Japanese Yen, and adopts JPY as its accounting currency.
83. Hedging
□ Applicable √ Not applicable
84. Government grants
(1). Basic information of government grants
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Type | Amount | Reported items | Amount included in current profits and losses |
| Government grants related to assets | 1,039,545.00 | Other incomes | 1,039,545.00 |
| Government grants related to income | 33,599,531.23 | Other incomes | 33,599,531.23 |
(2). Return of government grants
□ Applicable √ Not applicable
Other description
(1) Details
1) Government grants related to assets
| Item | Deferred income at the beginning of the period | New subsidies in the current period | Amortization in the current period | Closing deferred income | Amortization in the current period reported items | Notes |
| Subsidies for modified | 6,399,811.33 | 1,039,545.00 | 5,360,266.33 | Other incomes |
| Item | Deferred income at the beginning of the period | New subsidies in the current period | Amortization in the current period | Closing deferred income | Amortization in the current period reported items | Notes |
| cosmetic technology | ||||||
| Subtotal | 6,399,811.33 | 1,039,545.00 | 5,360,266.33 |
According to the Decision on the Award for Technical Transformation of Proya Cosmetics Co., Ltd.Huzhou Branch issued by the People's Government of Daixi Town, Huzhou, the Company received thetechnical transformation subsidy of RMB14,561,400.00 from the Government of Daixi Town in 2014,and apportioned the subsidy on an average basis over the service life of the asset. RMB728,070.00 wasrecorded under Other Income in the current period.According to the Notice on Issuing Construction and Development Fund (First Batch) for PowerfulIndustrial City in 2015 (HCQ [2015] No. 150) issued by Huzhou Finance Bureau and Huzhou Economyand Information Technology Commission, the technical transformation subsidy of RMB2,350,000.00was paid by Huzhou Finance Bureau in 2015. The Company apportioned the subsidy on an averagebasis over the service life of the asset. RMB117,500.00 was recorded under Other Income in the currentperiod.According to the Notice on Issuing Special Funds (Second Batch) for the “Machine Substitution forHumans” Project in 2014 (WFG [2015] No. 18) issued by the Development, Reform and EconomyCommission of Wuxing District, Huzhou and the Finance Bureau of Wuxing District, the technicaltransformation subsidy of RMB500,000.00 was paid by the Finance Bureau of Wuxing District, Huzhouin 2015. The Company apportioned the subsidy on an average basis over the service life of the asset.RMB25,000.00 was recorded under Other Income in the current period.According to the Notice on Issuing Special Funds (Second Batch) for Industrial Development in Huzhouin 2018 (HCQ [2018] No. 319) issued by Huzhou Finance Bureau and Huzhou Economy andInformation Technology Commission, the technical transformation subsidy of RMB1,379,500.00 waspaid by Huzhou Finance Bureau in December 2018. The Company apportioned the subsidy on anaverage basis over the service life of the asset. RMB68,975.00 was recorded under Other Income in thecurrent period.According to the Notice on Appropriating Special Subsidy Fund for Demonstration IntelligentWorkshop in Wuxing District in 2019 (WCQH [2020] No. 145) issued by the Huzhou Finance Bureauand the Development, Reform and Economic Information Technology Bureau of Wuxing District, thetechnical transformation subsidy of RMB2,000,000.00 was paid by the Finance Bureau of WuxingDistrict, Huzhou in May 2020. The Company apportioned the subsidy on an average basis over theservice life of the asset. RMB100,000.00 was recorded under Other Income in the current period.According to the Investment Construction and Land Use Agreementsigned between Wuxing DistrictDaixi Town People's Government of Huzhou City and the Company, RMB2,062,638.00 was granted bythe People's Government of Daixi Town, Wuxing District, Huzhou City in January 2022 as subsidy forconstruction works. As of June 30, 2023, the works had not been completed.
2) Government grants related to income and used to compensate the Company for relevant costs orlosses incurred
| Item | Amount | Reported items | Notes |
| Enterprise development support funds | 28,420,000.00 | Other incomes | According to the Notice of Opinions on Implementing the High-quality Development of Manufacturing industry in Wuxing District (2020-2024) Issued by the Office of Wuxing District People's Government (WZBF [2022] No. 42), it was paid by the Finance Bureau of Wuxing District, Huzhou City. |
| Enterprise development support funds | 2,062,638.00 | Other incomes | Paid by the Finance Bureau of Daixi Town, Wuxing District, Huzhou. |
| Enterprise development support funds | 1,000,000.00 | Other incomes | According to the investment promotion contract signed with the Finance Bureau of Ningbo Meishan Free Trade Port, it was paid by the Finance Bureau of Ningbo Meishan Free Trade Port. |
| Enterprise development support funds | 700,000.00 | Other incomes | According to the XFGJX [2023] No. 19 Issued by the Development, Reform and Economic Information Technology Bureau and the Finance Bureau of Xihu District, it was paid by the Development, Reform and Economic Information Technology Bureau of Xihu District, Hangzhou. |
| Subsidies for low-income housing Programs | 695,200.00 | Other incomes | According to the Letter of Huzhou Housing and Urban-Rural Development Bureau on Applying for the Early Grant of Subsidies for the 2023 Government-Financed Urban Affordable Housing Programs, it was paid by the Finance Bureau of Wuxing District, Huzhou. |
| Commercial enterprise development support funds | 423,600.00 | Other incomes | According to the Notice on Facilitating Special Fund Management Measures of Ningbo Southern Affairs Issued by Ningbo Municipal Bureau of Commerce and Ningbo Finance Bureau (YYSWCH [2021] No. 14) and the Notice on the Issuance of the Purchase and Implementation Opinions to Promote the Development of Commercial Enterprises by Ningbo Municipal Bureau of Commerce and Ningbo Finance Bureau (Trial) (JSWSM [2022] No. 115), it was paid by Ningbo Finance Bureau. |
| E-commerce economy development | 100,000.00 | Other incomes | According to the WZBF [2019] No. 65 Issued by the Office of Wuxing District People's Government of Huzhou and New Ten |
| Item | Amount | Reported items | Notes |
| support funds | Supportive Policies on Accelerating the E-Commerce Development of Huzhou, it was paid by the Finance Bureau of Wuxing District. | ||
| Stabilization employment subsidy | 100,000.00 | Other incomes | According to the term of “encouraging enterprises to stabilize posts and keep workers for undisrupted production” set out in the Notice on Measures for Supporting Enterprises in Stabilizing Production, Expanding Investment and Increasing Investments, it was paid by the Finance Bureau of Wuxing District. |
| Intellectual property subsidies, Party organization funds, and patent support funds | 98,093.23 | Other incomes | It was paid by Hangzhou Xihu District Market Supervision Administration, Sub-district Office of Xihu District People's Government of Hangzhou, the Development, Reform and Economic Information Technology Bureau of Wuxing District, Huzhou, and the Finance Bureau of Wuxing District. |
| Subtotal | 33,599,531.23 |
(2) The amount of government grants included in the profits and losses in the current period isRMB34,639,076.23.
85. Others
□ Applicable √ Not applicable
VIII. Change of Combination Scope
1. Business combinations not under common control
□ Applicable √ Not applicable
2. Business combinations under common control
□ Applicable √ Not applicable
3. Reversed purchase
□ Applicable √ Not applicable
4. Disposal of subsidiaries
Is there a single disposal of investment in a subsidiary leading to the loss of control
√ Applicable□ Not applicable
Unit: Yuan Currency: RMB
| Name of subsidiary | Payment for equity disposal | Equity disposal ratio (%) | Equity disposal method | Time point of losing control | The basis for determining the time point when the control right is lost | Difference in net assets of the subsidiary at the consolidated financial statement level corresponding to the disposal price and disposal investment | Ratio of remaining equity on the date of losing control (%) | Carrying amount of remaining equity on the date of losing control | Fair value of remaining equity on the date of losing control | Gain or loss from remaining equity re-measured at fair value | The determination method and main assumption of the fair value of the remaining equity on the date of loss of control | Amount of other comprehensive income related to the equity investment of previous subsidiaries transferred to the investment profit and loss |
| Hangzhou Xiake Bar Catering Management Co., Ltd. | 3,500,000.00 | 100.00 | Disposal | February 2023 | Losing control upon the transfer of property rights | -11,332.08 | ||||||
| Hangzhou Tiedingxian Catering Management Co., Ltd. | 1,500,000.00 | 80.00 | Disposal | February 2023 | Losing control upon the transfer of property rights | -12,828.43 |
Other description:
□ Applicable √ Not applicable
5. Change of combination scope for other reasons
Description of the changes in the combination scope caused by other reasons (for example, newly established subsidiaries, liquidation of subsidiaries, etc.) and thespecific information:
√ Applicable □ Not applicable
1. Increase of consolidation scope
| Company name | Equity acquisition method | Time point of equity acquisition | Amount of contribution | Contribution ratio |
| Huzhou Keyan Trading Co., Ltd. | New subsidiaries | March 2023 | 100.00% |
2. Decrease in consolidation scope
| Company name | Equity disposal method | Time point of equity disposal | Net assets as at the disposal date | Net profits from the beginning of the period to the disposal date |
| Korea Younimi Cosmetics Co., Ltd. | Cancel | April 2023 | 3,532,993.47 | -1,740,215.20 |
| Hangzhou Donghai Wangchao Catering Management Co., Ltd. | Cancel | June 2023 |
6. Others
□ Applicable √ Not applicable
IX. Interests in other entities
1. Interests in subsidiaries
(1). Composition of enterprise group
√ Applicable □ Not applicable
| Subsidiary name | Main place of business | Registration place | Nature of business | Holding ratio (%) | Mode of acquisition | |
| Direct | Indirect | |||||
| Hangzhou Proya Trade Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
| Zhejiang Meiligu Electronic Commerce Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
| Huzhou Chuangdai E-commerce Co., Ltd. | Huzhou | Huzhou | Wholesale and retail | 100.00 | Establishment | |
| Hapsode (Hangzhou) Cosmetics Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
| Huzhou UZERO Trading Co., Ltd. | Huzhou | Huzhou | Wholesale and retail | 100.00 | Establishment | |
| Hong Kong Xinghuo Industry Limited | Hong Kong | Hong Kong | Wholesale and retail | 100.00 | Establishment | |
| Mijing Siyu (Hangzhou) Cosmetics Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
| Ningbo TIMAGE Cosmetics Co., Ltd. | Ningbo | Ningbo | Wholesale and retail | 71.36 | Establishment | |
Explanation on the shareholding ratio in subsidiaries different from the voting ratio:
None
Basis for holding 50% or less of voting rights but still controlling the investee, and holding more than 50%of voting rights but not controlling the investee:
None
Basis for controlling the important structured entities included in the combination scope:
None
Basis for determining whether a company is an agent or a principal:
None
Other description:
None
(2). Significant non-wholly owned subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Name of subsidiary | Shareholding ratio of the minority shareholder (%) | Gain or loss attributable to minority shareholders in the current period | Dividends declared and distributed to minority shareholders in the current period | Balance of minority interests at the end of the period |
| Ningbo TIMAGE Cosmetics Co., Ltd. | 28.64 | 28,172,384.54 | 46,454,503.27 |
Explanation on the shareholding ratio of minority shareholder in subsidiaries different from the votingratio:
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
(3). Main financial information of important non-wholly-owned subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Name of subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Ningbo TIMAGE Cosmetics Co., Ltd. | 302,697,597.36 | 6,398,297.92 | 309,095,895.28 | 142,668,661.73 | 1,672,655.27 | 144,341,317.00 | 173,712,882.33 | 5,198,059.78 | 178,910,942.11 | 112,248,423.70 | 1,672,655.27 | 113,921,078.97 |
| Name of subsidiary | Amount incurred in the current period | Amount incurred in the previous period | ||||||
| Operating revenue | Net profit | Total comprehensive income | Cash flows generated from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows generated from operating activities | |
| Ningbo TIMAGE Cosmetics Co., Ltd. | 429,841,111.95 | 98,618,452.96 | 98,618,452.96 | 77,958,227.70 | 234,672,214.61 | 40,846,250.55 | 40,846,250.55 | 24,728,583.15 |
Other description:
None
(4). Major restrictions on using enterprise group assets and paying off enterprise group debts
□ Applicable √ Not applicable
(5). Financial support or other support provided to structured entities included in the scope ofconsolidated financial statements:
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
2. The share of owner’s equity in the subsidiary has changed and still controls the transactionsof the subsidiary
□ Applicable √ Not applicable
3. Rights and interests in joint ventures or associates
√ Applicable □ Not applicable
(1). Significant joint ventures or associates
□ Applicable √ Not applicable
(2). Main financial information of significant joint ventures
□ Applicable √ Not applicable
(3). Main financial information of significant associates
□ Applicable √ Not applicable
(4). Summary of financial information of insignificant joint ventures or associates
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Closing balance/amount incurred in the current period | Beginning balance/amount incurred in the previous period | |
| Joint ventures: | ||
| Total book value of investment | 3,066,898.78 | 3,068,948.16 |
| The total of the following items calculated according to the shareholding ratio | ||
| -Net profit | -2,049.38 | -5,814.02 |
| -Other comprehensive income | ||
| -Total comprehensive income | -2,049.38 | -5,814.02 |
| Associates: | ||
| Total book value of investment | 129,876,661.36 | 135,464,429.30 |
| The total of the following items calculated according to the shareholding ratio | ||
| -Net profit | -1,829,651.09 | -3,652,502.02 |
| -Other comprehensive income | ||
| -Total comprehensive income | -1,829,651.09 | -3,652,502.02 |
Other descriptionNone
(5). Statement of significant restrictions on the ability of joint ventures or associates to transfercapital to the Company
□ Applicable √ Not applicable
(6). Excess losses incurred by joint ventures or associates
□ Applicable √ Not applicable
(7). Unconfirmed commitments related to the investment in joint ventures
□ Applicable √ Not applicable
(8). Contingent liabilities related to investments in joint ventures or associates
□ Applicable √ Not applicable
4. Important joint operation
□ Applicable √ Not applicable
5. Rights and interests in structured entities not included in the scope of consolidated financialstatementsExplanation on structured entities not included in the scope of consolidated financial statements:
□ Applicable √ Not applicable
6. Others
□ Applicable √ Not applicable
X. Risks related to Financial Instruments
√ Applicable □ Not applicable
The Company’s risk management aims to reach a balance between risks and benefits, to minimize thenegative impact of risks on the Company’s operating results, and to maximize the interests ofshareholders and other equity investors. Based on these risk management goals, the Company’s basicstrategy for risk management is to determine and analyze various risks faced by the Company, establishan appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in atimely and reliable manner to control the risks within a limited scope.The Company faces various risks related to financial instruments in its daily activities, including creditrisk, liquidity risk and market risk. The management has deliberated and approved the policinggoverning these risks as outlined below.(I) Credit riskCredit risk refers to the risk that one party of a financial instrument fails or is unable to fulfill itsobligations, resulting in financial losses to the other party.
1. Approach to credit risk
(1) Assessment method of credit risk
The Company, on each balance sheet date, assesses whether the credit risk of relevant financialinstruments has increased significantly since initial recognition. In determining whether the credit riskhas increased significantly since initial recognition, the Company takes into account the reasonable and
well-founded information available without unnecessary additional costs or efforts, including qualitativeand quantitative analysis based on historical data, external credit risk rating and forward-lookinginformation. The Company determines the changes that may result in default risk of financialinstruments within their expected duration by comparing the default risk of the financial instruments onthe balance sheet date and the initial recognition date based on an individual financial instrument or thecombined financial instruments with similar credit risk characteristics.The Company deems that the credit risk of the financial instruments has increased significantly if anyone or more of the following quantitative and qualitative standards are triggered:
1) The main quantitative standard is that the probability of default within the remaining duration on thebalance sheet date has increased by more than a certain proportion compared with that at the initialrecognition;
2) The main qualitative standard is that there are material adverse changes occurring to the business orfinancial conditions of the debtor and changes in the exiting or anticipated technology, market, economicor legal environment which have a material adverse effect on the debtor’s ability to make repayment tothe Company.
(2) Definitions of default and assets with credit impairment
If the financial instruments meet any one or more of the following conditions, the Company defines thefinancial assets as in default, with its standard consistent with the definition of credit impairment:
1) The debtor faces major financial difficulties;
2) The debtor breaches the provisions governing it in the contract;
3) The debtor is very likely to become bankrupt or go into other financial restructuring proceedings;
4) The creditor makes a concession to the debtor which it will not make under any other circumstancesfor the economic or contractual considerations in connection with the debtor’s financial difficulties.
2. Measurement of expected credit loss
The key parameters for measurement of expected credit loss include the probability of default, loss givendefault and default risk exposure. The Company builds the models of probability of default, loss givendefault and default risk exposure considering the quantitative analysis of historical statistical data (suchas counterparty rating, guarantee type, category of collateral and pledge, repayment method) andforward-looking information.
3. For the details on the Reconciliation Statement of Beginning Balance and Closing Balance ofFinancial Instrument Loss Reserve, please see the particulars contained in “5. Account receivable; 6.Receivables financing; and 8. Other receivables”, “VII. Notes to the Items in the Consolidated FinancialStatements”, “Section X Financial Report”.
4. Credit risk exposure and credit risk concentration
The credit risk of the Company is derived mainly from the monetary capital and accounts receivable. Tocontrol the above related risk, the Company has respectively taken the following measures.
(1) Monetary capital
Bank deposits and other monetary capital of the Company were deposited with financial institutions withhigh credit rating; therefore, the credit risk was low.
(2) Accounts receivable
The Company continuously carries out credit assessment on customers who trade in credit. According tothe result of credit assessment, the Company deals with approved and credible customers, and monitorsthe balance of their accounts receivable, so as to prevent significant bad debt risk.No guarantee is required as the Company only transacts with recognized and reputable third parties.Credit risk concentration is managed as per customers. As of June 30, 2023, there was certain creditconcentration risk in the Company and 80.89% (December 31, 2022: 68.05%) of the accounts receivable
of the Company were concentrated on top five customers in the balance of account receivable. TheCompany had no guarantee or other credit enhancement on the balance of the accounts receivable.The maximum credit risk exposure of the Company is the carrying amount of the financial assets in thebalance sheet.(II) Liquidity riskLiquidity risk refers to the risk of shortage of funds when the Company fulfills its obligation to settle bydelivering cash or other financial assets. Liquidity risk may arise from the inability to sell financialassets at fair value as soon as possible, the counterparty’s inability to pay off its contractual debt, theacceleration of debt or the inability to generate expected cash flow.To control such risk, the Company applies various financing methods, such as bill settlement and bankloans, in appropriate combination of long-term and short-term financing ways to optimize the financingstructure and keep the balance between financing sustainability and flexibility. The Company hasobtained lines of credit from several commercial banks to satisfy its working capital demands and capitalexpenditure.Classification of financial liabilities by the remaining due days
| Item | Closing amount | |||||
| Carrying amount | Undiscounted contract value | Within 1 year | 1-3 years | Above 3 years | ||
| Short-term borrowings | 200,155,555.56 | 203,990,000.00 | 203,990,000.00 | |||
| Notes payable | 56,801,810.60 | 56,801,810.60 | 56,801,810.60 | |||
| Accounts payable | 1,063,096,364.64 | 1,063,096,364.64 | 1,063,096,364.64 | |||
| Other payables | 211,974,456.13 | 211,974,456.13 | 211,974,456.13 | |||
| Bonds payable | 740,666,717.66 | 899,470,380.00 | 3,754,050.00 | 18,770,250.00 | 876,946,080.00 | |
| Lease liabilities | 11,281,561.28 | 11,281,561.28 | 11,281,561.28 | |||
| Non-current liabilities due within one year | 3,864,732.04 | 3,864,732.04 | 3,864,732.04 | |||
| Subtotal | 2,287,841,197.91 | 2,450,479,304.69 | 1,543,481,413.41 | 30,051,811.28 | 876,946,080.00 | |
(Continued)
| Item | Balance at the end of the previous year | |||||
| Carrying amount | Undiscounted contract value | Within 1 year | 1-3 years | Above 3 years | ||
| Short-term borrowings | 200,195,890.41 | 201,900,886.94 | 201,900,886.94 | |||
| Notes payable | 69,626,352.12 | 69,626,352.12 | 69,626,352.12 | |||
| Accounts payable | 475,427,484.23 | 475,427,484.23 | 475,427,484.23 | |||
| Other payables | 216,392,183.41 | 216,392,183.41 | 216,392,183.41 | |||
| Item | Balance at the end of the previous year | |||||
| Carrying amount | Undiscounted contract value | Within 1 year | 1-3 years | Above 3 years | ||
| Bonds payable | 724,491,557.93 | 900,552,174.00 | 3,754,685.00 | 18,773,425.00 | 877,094,416.00 | |
| Lease liabilities | 3,718,119.41 | 3,718,119.41 | 3,718,119.41 | |||
| Non-current liabilities due within one year | 2,549,452.14 | 2,549,452.14 | 2,549,452.14 | |||
| Subtotal | 1,692,401,039.65 | 1,870,166,652.25 | 969,651,043.84 | 22,491,544.41 | 877,094,416.00 | |
(III) Market riskMarket risk refers to the fact that the fair value or future cash flow of financial instruments may fluctuatedue to changes in market prices. Market risks include interest rate and foreign exchange risks.
1. Interest rate risk
Interest rate risk refers to that the fair value or future cash flow of financial instruments may fluctuatedue to changes in market interest rates. The interest-bearing financial instruments with a fixed interestrate cause the interest rate risk of fair value, and those with a floating interest rate cause the interest raterisk of cash flow. The Company determines the proportion of financial instruments with a fixed interestrate and financial instruments with a floating interest rate according to the market environment, andmaintains an appropriate combination of financial instruments through regular review and monitoring.
2. Foreign exchange risk
Foreign exchange risk refers to that the fair value or future cash flow of financial instruments mayfluctuate due to changes in foreign exchange rates. The risk of changes in foreign exchange rates facedby the Company is mainly related to the Company’s foreign currency assets and liabilities. TheCompany carries out most of its business in the Chinese mainland, and therefore has main activitiesvaluated in RMB. Therefore, the market risk of foreign exchange changes faced by the Company isminor.For the details on the monetary assets and liabilities in foreign currency of the Company at the end of theperiod, please see the particulars contained in “82. Foreign currency monetary items”, “VII. Notes to theItems in the Consolidated Financial Statements”, “Section X Financial Report”.
XI. Disclosure of fair value
1. The closing fair value of assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing fair value | |||
| The first level of fair value measurement | The second level of fair value measurement | The third level of fair value measurement | Total | |
| I. Continuous fair value measurement | ||||
| (I) Financial assets held for trading | ||||
| 1. Financial assets measured at fair value with changes included in the current profit or loss | ||||
| (1) Debt instrument investment | ||||
| (2) Equity instrument investment | ||||
| (3) Derivative financial assets | ||||
| 2. Financial assets designated as measured at fair value and the changes of which are accounted in the current profit or loss | ||||
| (1) Debt instrument investment | ||||
| (2) Equity instrument investment | 146,402,400.00 | 146,402,400.00 | ||
| (II) Other debt investments | ||||
| (III) Other equity instrument investments | ||||
| (IV) Investment property | ||||
| 1. Land use right for lease | ||||
| 2. Leased buildings | ||||
| 3. Land use rights that are held for transfer upon appreciation | ||||
| (V) Biological assets | ||||
| 1. Consumable biological assets | ||||
| 2. Productive biological assets | ||||
| Total assets consistently measured at fair value | 146,402,400.00 | 146,402,400.00 | ||
| (VI) Financial liabilities held for trading | ||||
| 1. Financial liabilities measured at fair value with changes included in the current profit or loss | ||||
| Including: Trading bonds issued | ||||
| Derivative financial liabilities |
| Others | ||||
| 2. Financial liabilities designated as measured at fair value and the changes of which are accounted in current profit or loss | ||||
| Total liabilities consistently measured at fair value | ||||
| II. Non-continuous fair value measurement | ||||
| (I) Assets held for sale | ||||
| Total assets measured by non-continuous fair value | ||||
| Total liabilities measured by non-continuous fair value |
2. Determination basis for the market price of continuous and non-continuous first-level fairvalue measurement items
□ Applicable √ Not applicable
3. Qualitative and quantitative information on the valuation techniques and important
parameters used in continuous and non-continuous second-level fair value measurementitems
□ Applicable √ Not applicable
4. Qualitative and quantitative information on the valuation techniques and importantparameters used in continuous and non-continuous third-level fair value measurement items
√ Applicable □ Not applicable
The fair value of other equity instrument investments is determined according to their historic cost.
5. Adjustment information and sensitivity analysis of non-observable parameters betweenbeginning and closing carrying amount for continuous third-level fair value measurementitems
□ Applicable √ Not applicable
6. For continuous fair value measurement items, if the conversion occurs among different levelswithin the current period, the reasons for the conversion and the policy for determining theconversion time point
□ Applicable √ Not applicable
7. Changes in valuation techniques during the current period and the reasons for the changes
□ Applicable √ Not applicable
8. Fair value of financial assets and financial liabilities not measured at fair value
□ Applicable √ Not applicable
9. Others
□ Applicable √ Not applicable
XII. Related parties and related transactions
1. Information about the parent company of the Company
□ Applicable √ Not applicable
2. Information on subsidiaries of the Company
See the notes for details of the subsidiaries of the Company
√ Applicable □ Not applicable
For the details on subsidiaries of the Company, please see the particulars contained in “IX. Interests inOther Entities”, “Section X Financial Report”.
3. Information on joint ventures and associates of the Company
See the notes for details of the significant joint ventures or associates of the Company
□ Applicable √ Not applicable
Information about other joint ventures or associates that have related transactions with the Company inthe current period, or have balance resulting from related transactions with the Company in the previousperiod is as follows
□ Applicable √ Not applicable
4. Information of other related parties
√ Applicable □ Not applicable
| Name of other related parties | Relationship between other related parties and the Company |
| Huzhou Beauty Town Technology Incubation Park Co., Ltd. | Others |
| Cosmetics Industry (Huzhou) Investment Development Co., Ltd. | Others |
| Hangzhou Tiedingxian Catering Management Co., Ltd. | Others |
| Hangzhou Xiake Bar Catering Management Co., Ltd. | Others |
| Shaoxing Keqiao Qingteng Culture Investment Co., Ltd. | Others |
| PARISEZHAN HK LIMITED | Others |
| EURL PHARMATICA | Others |
| SARL ORTUS | Others |
| S.A.S AREDIS | Others |
| Korea Youke Co., Ltd. | Others |
| Shanghai Youke Brand Management Co., Ltd. | Others |
| Shanghai Youke Jiabei Technology Co., Ltd. | Others |
| PAN Xiang | Others |
| Beauty Hi-tech Innovation Co., Ltd. | Others |
Other descriptionNone
5. Information of related party transactions
(1). Related party transactions of purchasing and selling goods, rendering and receiving servicesStatement of purchasing goods/receiving services
√ Applicable □ Not applicable
Unit:’0,000 Currency: RMB
| Related parties | Details of related party transaction | Amount incurred in the current period | Approved transaction amount (if applicable) | Exceeding the transaction limit or not (if applicable) | Amount incurred in the previous period |
| Hangzhou Xiake Bar Catering Management Co., Ltd. | Catering service fee | 71.43 | |||
| Hangzhou Tiedingxian Catering Management Co., Ltd. | Catering service fee | 83.52 | |||
| Beauty Hi-tech Innovation Co., Ltd. | Agent operation service fee | 250.47 |
Statement of sales of goods/rendering of service
√ Applicable □ Not applicable
Unit:’0,000 Currency: RMB
| Related parties | Details of related party transaction | Amount incurred in the current period | Amount incurred in the previous period |
| Shanghai Youke Jiabei Technology Co., Ltd. | Sales of goods | 3,361.65 | |
| Shanghai Youke Brand Management Co., Ltd. | Sales of goods | 1,228.90 | |
| Ningbo Weiman Cosmetics Co., Ltd. | Sales of goods | 63.08 | |
| Cosmetics Industry (Huzhou) Investment Development Co., Ltd. | Sales of goods | 0.53 |
Explanation on related party transactions in purchasing and selling goods, rendering and receivingservices
□ Applicable √ Not applicable
(2). Related entrusted management/contracting and entrusted management/outsourcingStatement of entrusted management/contracting of the Company:
□ Applicable √ Not applicable
Explanation on related trusteeship/contracting
□ Applicable √ Not applicable
Statement of entrusted management/outsourcing of the Company
□ Applicable √ Not applicable
Explanation on related management/outsourcing
□ Applicable √ Not applicable
(3). Related-party lease
The Company as the lesser:
√ Applicable □ Not applicable
Unit: ’0,000 Currency: RMB
| Name of lessee | Types of leased assets | Lease income recognized in the current period | Lease income recognized in the previous year |
| Hangzhou Xiake Bar Catering Management Co., Ltd. | Site | 15.12 | |
| Hangzhou Tiedingxian Catering Management Co., Ltd. | Site | 15.36 |
The Company as the lessee:
√ Applicable □ Not applicable
Unit: ’0,000 Currency: RMB
| Name of lesser | Types of leased assets | Simple short-term lease and low-value asset rental expense (if applicable) | Variable lease payments not included in the measurement of lease liability (if applicable) | Rent paid | Interest expense assumed on lease liability | Increased right-of-use assets | |||||
| Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | ||
| Huzhou Beauty Town Technology Incubation Park Co., Ltd. | Site | 517,536.00 | 13,976.20 | ||||||||
Explanation on related lease
□ Applicable √ Not applicable
(4). Information on related guarantees
The Company as the guarantor
□ Applicable √ Not applicable
The Company as the guaranteed party
□ Applicable √ Not applicable
Explanation on related guarantee
□ Applicable √ Not applicable
(5). Borrowing of related party funds
□ Applicable √ Not applicable
(6). Information of asset transfer and debt restructuring of related parties
□ Applicable √ Not applicable
(7). Remuneration of key management personnel
√ Applicable □ Not applicable
Unit: ’0,000 Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Remuneration of key management personnel | 654.49 | 449.45 |
[Note] Excludes related compensation recognized for share-based payment
(8). Other related party transactions
□ Applicable √ Not applicable
6. Accounts receivable and payable from related parties
(1). Receivable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Related parties | Closing balance | Opening balance | ||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | ||
| Accounts receivable | |||||
| Hangzhou Xiake Bar Catering Management Co., Ltd. | 58,056.75 | 2,902.84 | |||
| Hangzhou Tiedingxian Catering | 51,670.51 | 2,583.53 | |||
| Management Co., Ltd. | |||||
| Subtotal | 109,727.26 | 5,486.37 | |||
| Prepayments | |||||
| Huzhou Beauty Town Technology Incubation Park Co., Ltd. | 43,000.00 | ||||
| Subtotal | 43,000.00 | ||||
| Other receivables | |||||
| EURL PHARMATICA [Note] | 18,431,261.04 | 18,431,261.04 | 18,232,635.52 | 18,232,635.52 | |
| Huzhou Beauty Town Technology Incubation Park Co., Ltd. | 132,568.20 | 132,568.20 | 133,568.20 | 133,568.20 | |
| Hangzhou Xiake Bar Catering Management Co., Ltd. | 3,000,000.00 | 150,000.00 | |||
| Beauty Hi-tech Innovation Co., Ltd. | 82,571.59 | 82,571.59 | |||
| Subtotal | 21,646,400.83 | 18,796,400.83 | 18,366,203.72 | 18,365,503.72 |
[Note] The amount of EURL PHARMATICA is from PAN Xiang and the consolidated statistics ofEURL PHARMATICA, PARISEZHAN HK LIMITED, SARL ORTUS and S.A.S AREDIS under thecontrol of PAN Xiang.
(2). Payable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Related parties | Book balance at the end of the period | Book balance at the beginning of the period |
| Accounts payable | |||
| S.A.S AREDIS | 258,504.52 | 258,504.52 | |
| Ningbo Weiman Cosmetics Co., Ltd. | 121,884.94 | ||
| Hangzhou Tiedingxian Catering Management Co., Ltd. | 19.00 | ||
| Subtotal | 380,408.46 | 380,408.46 |
| Receipts in advance | |||
| Subtotal | |||
| Other payables | |||
| Hangzhou Tiedingxian Catering Management Co., Ltd. | 20,000.00 | ||
| Cosmetics Industry (Huzhou) Investment Development Co., Ltd. | 8,057.00 | ||
| Subtotal | 28,057.00 |
7. Commitment of related parties
□ Applicable √ Not applicable
8. Others
□ Applicable √ Not applicable
XIII. Share-based payments
1. Overall situation of share-based payment
√ Applicable □ Not applicable
Unit: Share Currency: RMB
| Total amount of equity instruments granted by the Company in the current period | Not applicable |
| Total amount of equity instruments exercised by the Company in the current period | |
| Total amount of equity instruments of the Company which are invalid in the current period | |
| The range of exercise pricing of stock options issued by the Company at the end of the period and their remaining periods of contracts | Not applicable |
| The range of exercise pricing of other equity instrument options issued by the Company at the end of the period and their remaining periods of contracts | The grant price of restricted shares granted is RMB78.56 per share, and the term is 48 months from the grant date |
Other descriptionAccording to the Proposal on Satisfying the Conditions for Release from Sales Restrictions in the ThirdRelease Period for Initially Granted Shares and Reserved Shares Under 2018 Restricted Share IncentivePlan deliberated and approved at the 4th meeting of the third session of Board of Directors in 2022, theCompany released the 347,201 restricted shares held by the incentive objects who had satisfied the thirdrelease conditions. The circulating date of the sales was January 20, 2022.On July 25, 2022, according to the Proposal on 2022 Restricted Share Incentive Plan of the Company(Draft) and Its Summary deliberated and approved at the First Extraordinary General Meeting of theCompany in 2022, under the Incentive Plan, the Company proposed to grant up to 2,100,000 restrictedshares to incentive objects. The grant date of the restricted shares is July 25, 2022. The incentive objectsinclude senior management, middle-level managers and backbone employees working for the Company
(excluding independent directors and supervisors, and the shareholders or actual controllers severally orjointly holding more than 5% shares of the Company and their spouses, parents and children), 101persons in total, and the grant price is RMB78.56 per share. The subject shares under the Incentive Planare derived from the ordinary A shares of the Company privately issued by the Company to the incentiveobjects. The validity period of the Incentive Plan begins from the date when the registration of the grantof restricted shares is completed to the date when all the restricted shares granted to the incentive objectsare released or repurchased and de-registered, in no case longer than 48 months. The granted restrictedshares will be released in three tranches (30%, 30% and 40%) over 36 months after the end of 12 monthsfollowing the initial grant of the restricted shares. The performance condition for the initial release isthat: On the basis of the operating revenue and net profit in 2021, the growth rate of operating revenueand net profit in 2022 was no less than 25% and 25%, respectively. The performance condition for thesecond release is that: On the basis of the operating revenue and net profit in 2021, the growth rate ofoperating revenue and net profit in 2023 was no less than 53.75% and 53.75%, respectively. Theperformance condition for the third release is that: On the basis of the operating revenue and net profit in2021, the growth rate of operating revenue and net profit in 2024 was no less than 87.58% and 87.58%,respectively.
2. Equity-settled share-based payments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Determination method of the fair value of equity instruments on grant date | Determined as per the share price on the grant date and the grant price of restricted shares |
| Basis for determining the quantity of feasible equity instruments | Determined according to the estimated performance conditions in the release period |
| Reason for material difference between estimation in the current period and estimation in the previous period | Not applicable |
| Accumulative amount of equity-settled share-based payment included in capital reserves | 97,318,367.56 |
| Total recognized expenses of equity-settled share-based payment in the current period | 49,961,246.32 |
Other descriptionNone
3. Cash-settled share-based payment
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
□ Applicable √ Not applicable
5. Others
□ Applicable √ Not applicable
XIV. Commitments and contingencies
1. Significant commitments
√ Applicable □ Not applicable
Significant external commitments, nature and amount existing at the balance sheet dateAs of June 30, 2023, the investment projects of the Company’s public offering for fund raising are asfollows:
Unit: RMB’0,000
| Item | Total investment amount | Fund raising commitment | Closing accumulated investment | Project Filing or Approval No. |
| Huzhou Production Base Expansion Project (Phase I) | 43,752.54 | 33,850.00 | 20,768.63 | 2011-330502-04-01-178735 |
| Longwu R&D Center Construction Project | 21,774.45 | 19,450.00 | 15,960.58 | 2101-330106-04-02-307916 |
| Information System Upgrade Project | 11,239.50 | 9,050.00 | 1,658.42 | |
| Additional working capital | 18,000.00 | 12,821.30 | 12,533.15 | |
| Total | 94,766.49 | 75,171.30 | 50,920.78 |
2. Contingencies
(1). Important contingencies on the balance sheet date
□ Applicable √ Not applicable
(2). Even if the Company does not have important contingencies to be disclosed, it shall also state:
□ Applicable √ Not applicable
3. Others
□ Applicable √ Not applicable
XV. Events after balance sheet day
1. Important non-adjustment matters
□ Applicable √ Not applicable
2. Profit distribution
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Profits or dividends to be distributed | 150,832,835.70 |
| Profits or dividend declared after deliberation and approval |
According to the 13th meeting of the third session of Board of Directors on August 28, 2023, based onthe total share capital as at the record date on which equity distribution is implemented, the Companyproposes to distribute to all shareholders registered a cash dividend of RMB3.80 (tax inclusive) per 10
shares. Based on the total share capital of 396,928,515 shares on June 30, 2023, it is estimated that thecash dividend to be distributed will amount to RMB150,832,835.70 (tax inclusive). In case of a changein the Company’s total share capital due to the conversion of convertible bonds before the record datefor equity distribution, the Company maintains the said distribution ratios and yet adjusts the totaldistribution and conversion amounts. The matter above is to be deliberated and approved by the GeneralMeeting.
3. Sales return
□ Applicable √ Not applicable
4. Explanation of other events after the balance sheet date
□ Applicable √ Not applicable
XVI. Other significant matters
1. Correction of early accounting errors
(1). Retrospective restatement
□ Applicable √ Not applicable
(2). Prospective application
□ Applicable √ Not applicable
2. Debt restructuring
□ Applicable √ Not applicable
3. Asset replacement
(1). Exchange of non-monetary assets
□ Applicable √ Not applicable
(2). Replacement of other assets
□ Applicable √ Not applicable
4. Annuity plan
□ Applicable √ Not applicable
5. Termination of operation
□ Applicable √ Not applicable
6. Segment information
(1). Determination basis and accounting policy of reportable segment
√ Applicable □ Not applicable
The Company does not have diversified operations or cross-regional operations, so there is nodivision-based reporting. The details of main business income and main business costs of the Companyclassified by brands are as follows:
January to June 2023
| Brand | Income from main business | Costs of main business | Gross profit |
| Proya brand | 2,891,721,842.83 | 828,597,188.97 | 2,063,124,653.86 |
| Other brands | 727,652,945.53 | 233,340,580.32 | 494,312,365.21 |
| Subtotal | 3,619,374,788.36 | 1,061,937,769.29 | 2,557,437,019.07 |
January to June 2022
| Brand | Income from main business | Costs of main business | Gross profit |
| Proya brand | 2,128,414,002.19 | 632,399,637.33 | 1,496,014,364.86 |
| Other brands | 487,505,113.14 | 198,290,360.05 | 289,214,753.09 |
| Subtotal | 2,615,919,115.33 | 830,689,997.38 | 1,785,229,117.95 |
(2). Financial information of the reportable segment
□ Applicable √ Not applicable
(3). If the Company has no reportable segment, or cannot disclose the total assets and liabilities of
each reportable segment, the reasons shall be explained
□ Applicable √ Not applicable
(4). Other description
□ Applicable √ Not applicable
7. Other significant transactions and matters that have an impact on investors’ decisions
□ Applicable √ Not applicable
8. Others
√ Applicable □ Not applicable
1. The Company as lessee
(1) For details of the right-of-use assets, please see the particulars contained in “25. Right-of-use assets”,“VII. Notes to the Items in the Consolidated Financial Statements”, “Section X Financial Report”.
(2) For the details on accounting policies for short term leases and low value asset leases of theCompany, please see the particulars contained in “42. Lease”, “V. Significant Accounting Policies andAccounting Estimates”, “Section X Financial Report”. Short term lease charges and low value assetlease charges included in current profits and losses are as below:
| Item | Amount for the current period | Amount for the same period in the previous year |
| Short term lease charges | 1,522,375.17 | |
| Low value asset lease charges (except for short term lease charges) | 238,389.59 | 85,154.60 |
| Total | 238,389.59 | 1,607,529.77 |
(3) Current profit and loss and cash flows related to the lease
| Item | Amount for the current period | Amount for the same period in the previous year |
| Interest expenses on the lease liabilities | 116,147.15 | |
| Variable lease payments that are not included in the measurement of lease liabilities are included in the current profit or loss | ||
| Income from sub-leasing of right-of-use assets | ||
| Total cash outflows related to the lease | 3,166,110.79 | |
| Related profit and loss arising from sale and leaseback transactions |
(4) For the maturity analysis of lease liabilities and the corresponding liquidity risk management, pleasesee the particulars contained in “X. Risks Related to Financial Instruments”, “Section X FinancialReport”.
2. The Company as lessor
Operating lease
(1) Lease Revenue
| Item | Amount for the current period | Amount for the same period in the previous year |
| Lease income | 816,122.40 | 796,423.81 |
(2) Assets under operating lease
| Item | Closing amount | Balance at the end of the previous year |
| Investment property | 66,302,354.38 | 68,654,700.81 |
| Subtotal | 66,302,354.38 | 68,654,700.81 |
For the details on the operation and rent-out of investment property, please see the particulars containedin “20. Investment property”, “VII. Notes to the Items in the Consolidated Financial Statements”,“Section X Financial Report”.
XVII. Notes on Main Items in Financial Statements of the Parent Company
1. Accounts receivable
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Account age | Book balance at the end of the period |
| Within 1 year | |
| Including: Subitem within 1 year | |
| Within 1 year | 364,655,531.02 |
| Sub-total within 1 year | 364,655,531.02 |
| 1-2 years | 10,713,932.31 |
| 2-3 years | |
| Above 3 years | |
| 3-4 years | |
| 4-5 years | |
| Above 5 years | |
| Total | 375,369,463.33 |
(2). Disclosed by classification of bad debt accrual method
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Category | Closing balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying amount | Book balance | Provision for bad debts | Carrying amount | |||||
| Amount | Percentage (%) | Amount | Provision ratio (%) | Amount | Percentage (%) | Amount | Provision ratio (%) | |||
| Provision for bad debts by item | ||||||||||
| Including: | ||||||||||
| Provision for bad debts by portfolio | 375,369,463.33 | 100.00 | 21,446,956.25 | 5.71 | 353,922,507.08 | 324,317,444.15 | 100.00 | 34,434,380.91 | 10.62 | 289,883,063.24 |
| Including: | ||||||||||
| Aging portfolio | 375,369,463.33 | 100.00 | 21,446,956.25 | 5.71 | 353,922,507.08 | 324,317,444.15 | 100.00 | 34,434,380.91 | 10.62 | 289,883,063.24 |
| Total | 375,369,463.33 | / | 21,446,956.25 | / | 353,922,507.08 | 324,317,444.15 | / | 34,434,380.91 | / | 289,883,063.24 |
Provision for bad debts by item:
□ Applicable √ Not applicable
Provision for bad debts by portfolio:
√ Applicable □ Not applicable
Provision by portfolio: Aging portfolio
Unit: Yuan Currency: RMB
| Name | Closing balance | ||
| Accounts receivable | Provision for bad debts | Provision ratio (%) | |
| Within 1 year | 364,655,531.02 | 18,232,776.56 | 5.00 |
| 1-2 years | 10,713,932.31 | 3,214,179.69 | 30.00 |
| Total | 375,369,463.33 | 21,446,956.25 | 5.71 |
Recognition standard and explanation of provision for bad debts made by portfolio:
□ Applicable √ Not applicable
If the bad debt provision is made according to the general model of expected credit loss, please refer tothe disclosure of other receivables:
□ Applicable √ Not applicable
(3). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Category | Opening balance | Changes in the current period | Closing balance | |||
| Accrual | Withdrawal or written-back | Charge-off or write-off | Other changes | |||
| Provision for bad debts by portfolio | 34,434,380.91 | -12,987,424.66 | 21,446,956.25 | |||
| Total | 34,434,380.91 | -12,987,424.66 | 21,446,956.25 | |||
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
(4). Accounts receivable actually written off in the current period
□ Applicable √ Not applicable
(5). Accounts receivable of the top five ending balances collected by debtor
√ Applicable □ Not applicable
| Company name | Book balance | Proportion of accounts receivable balance (%) | Provision for bad debts |
| Huzhou Hapsode Trading Co., Ltd. | 113,353,159.61 | 30.20 | 5,667,657.98 |
| Huzhou UZERO Trading Co., Ltd. | 69,204,107.61 | 18.44 | 3,460,205.38 |
| Hangzhou Proya Commercial Management Co., Ltd. | 44,351,306.05 | 11.82 | 4,435,130.61 |
| Proya(Zhejiang) Cosmetics Co., Ltd. | 42,709,775.17 | 11.38 | 2,135,488.76 |
| Hangzhou Proya Trade Co., Ltd. | 35,464,726.52 | 9.45 | 1,773,236.33 |
| Subtotal | 305,083,074.96 | 81.29 | 17,471,719.06 |
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7). Amount of assets or liabilities for which accounts receivable have been transferred butinvolvement continues in the Company
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
2. Other receivables
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance |
| Interest receivable | ||
| Dividend receivable | ||
| Other receivables | 137,185,024.99 | 141,574,549.59 |
| Total | 137,185,024.99 | 141,574,549.59 |
Other description:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ Applicable √ Not applicable
(2). Significant overdue interest
□ Applicable √ Not applicable
(3). Provision for bad debts
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
Dividend receivable
(4). Dividend receivable
□ Applicable √ Not applicable
(5). Significant dividends receivable with an age of more than 1 year
□ Applicable √ Not applicable
(6). Provision for bad debts
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
Other receivables
(7). Disclosed by account age
√ Applicable□ Not applicable
Unit: Yuan Currency: RMB
| Account age | Book balance at the end of the period |
| Within 1 year | |
| Including: Subitem within 1 year | |
| Within 1 year | 34,315,573.68 |
| Sub-total within 1 year | 34,315,573.68 |
| 1-2 years | 44,794,534.68 |
| 2-3 years | 146,458,111.45 |
| Above 3 years | 4,761,614.72 |
| 3-4 years | |
| 4-5 years | |
| Above 5 years | |
| Total | 230,329,834.53 |
(8). Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Nature of payment | Book balance at the end of the period | Book balance at the beginning of the period |
| Current accounts receivable | 220,626,230.89 | 210,637,812.50 |
| Security deposits | 5,639,614.72 | 18,833,006.72 |
| Suspense payment receivables | 1,412,395.89 | 2,334,148.44 |
| Others | 2,651,593.03 | 551,116.58 |
| Total | 230,329,834.53 | 232,356,084.24 |
(9). Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Provision for bad debts | First stage | Second stage | Third stage | Total |
| Expected credit loss over the next 12 months | Expected credit loss for the entire duration (credit impairment not occurred) | Expected credit loss for the entire duration (credit impairment occurred) | ||
| Balance as at January 1, 2023 | 1,692,824.12 | 18,797,846.68 | 70,290,863.86 | 90,781,534.65 |
| Balance as of January 1, 2023 is in the current |
| period | ||||
| -Transferred to the second stage | -2,239,726.73 | 2,239,726.73 | ||
| -Transferred to the third stage | -43,937,433.44 | 43,937,433.44 | ||
| -Written-back to the second stage | ||||
| -Written-back to the first stage | ||||
| Accrual in the current period | 2,262,681.30 | 36,338,220.43 | -36,237,626.85 | 2,363,274.89 |
| Written-back in the current period | ||||
| Written-off in the current period | ||||
| Charge off in the current period | ||||
| Other changes | ||||
| Balance as at June 30, 2023 | 1,715,778.69 | 13,438,360.40 | 77,990,670.45 | 93,144,809.54 |
Explanation of significant changes in the book balance of other receivables with changes in provision forloss in the current period:
□ Applicable √ Not applicable
The amount of bad debt provision in the current period and the basis for evaluating whether the creditrisk of financial instruments increases significantly:
□ Applicable √ Not applicable
(10). Information of bad-debt provision
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision written-back or withdrawn in the current period:
□ Applicable √ Not applicable
(11). Other receivables actually written off in the current period
□ Applicable √ Not applicable
Explanation on write-off of other receivables:
□ Applicable √ Not applicable
(12). Other receivables of the top five closing balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Company name | Nature of payment | Closing balance | Account age | As a proportion of total closing balance in other receivables (%) | Closing balance of bad debt provision |
| Hong Kong Xinghuo Industry Limited | Current accounts receivable | 160,611,460.14 | [Note 1] | 68.99 | 73,380,619.79 |
| BOYA (Hong Kong) Investment Management Co., Limited | Current accounts receivable | 37,810,080.00 | [Note 2] | 16.24 | 10,300,584.00 |
| Ningbo Keshi Trading Limited | Current accounts receivable | 7,022,833.46 | [Note 3] | 3.02 | 704,391.70 |
| Hangzhou Yizhuo Culture Media Co., Ltd. | Current accounts receivable | 6,355,939.55 | [Note 4] | 2.73 | 1,440,405.31 |
| Hangzhou Property Maintenance Fund Management Center | Security deposits | 4,708,614.72 | Above 3 years | 2.02 | 4,708,614.72 |
| Total | / | 216,508,927.87 | / | 93.00 | 90,534,615.52 |
[Note 1] RMB13,247,905.35 in 1 year; RMB4,817,764.35 in 1-2 years; RMB142,545,790.44 in 2-3years.[Note 2] RMB4,169,760.00 in 1 year; RMB33,640,320.00 in 1-2 years.[Note 3] RMB5,609,833.36 in 1 year; RMB1,413,000.10 in 1-2 years.[Note 4] RMB1,865,506.22 in 1 year; RMB4,490,433.33 in 1-2 years.
(13). Receivables involving government grants
□ Applicable √ Not applicable
(14). Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(15). The amount of assets and liabilities formed by transferring other receivables and continuingto be involved
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
3. Long-term equity investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Closing balance | Opening balance | ||||
| Book balance | Provision for impairment | Carrying amount | Book balance | Provision for impairment | Carrying amount | |
| Investments in subsidiaries | 332,632,553.57 | 42,500,000.00 | 290,132,553.57 | 304,354,996.61 | 42,500,000.00 | 261,854,996.61 |
| Investments in associates and joint ventures | 219,127,348.84 | 92,018,511.89 | 127,108,836.95 | 213,909,167.02 | 81,442,213.22 | 132,466,953.80 |
| Total | 551,759,902.41 | 134,518,511.89 | 417,241,390.52 | 518,264,163.63 | 123,942,213.22 | 394,321,950.41 |
(1) Investments in subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Invested entity | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Provision for impairment in the current period | Closing balance of impairment provision |
| Hangzhou Proya Trade Co., Ltd. | 32,241,059.09 | 50,742.51 | 32,291,801.60 | |||
| Hanna Cosmetics Co., Ltd. | 2,094,048.00 | 2,094,048.00 | ||||
| Zhejiang Meiligu Electronic Commerce Co., Ltd. | 26,913,422.69 | 12,073,781.97 | 38,987,204.66 | |||
| Yueqing Laiya Trading Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
| Hapsode (Hangzhou) Cosmetics Co., Ltd. | 42,500,000.00 | |||||
| Mijing Siyu (Hangzhou) Cosmetics Co., Ltd. | 18,000,000.00 | 18,000,000.00 | ||||
| Huzhou UZERO Trading Co., Ltd. | 5,460,276.70 | 5,460,276.70 | ||||
| Huzhou Niuke Technology Co., Ltd. | 3,500,000.00 | 3,500,000.00 | ||||
| Hangzhou Proya Commercial Management Co., Ltd. | 5,000,000.00 | 5,000,000.00 | ||||
| Huzhou Younimi Cosmetics Co., Ltd. | 21,393,476.00 | 21,393,476.00 | ||||
| Shanghai Zhongwen Electronic Commerce Co., Ltd. | 5,929,948.75 | 599,504.52 | 6,529,453.27 | |||
| Korea Younimi Cosmetics Co., Ltd. | 5,046,455.61 | 5,046,455.61 | ||||
| Hong Kong Keshi Trading Limited | 24,736,491.00 | 24,736,491.00 | ||||
| Hong Kong Xinghuo Industry Limited | 10,185,924.00 | 10,185,924.00 | ||||
| Ningbo TIMAGE Cosmetics Co., Ltd. | 61,330,669.19 | 484,705.77 | 61,815,374.96 | |||
| Ningbo Keshi Trading Limited | 520,000.00 | 520,000.00 | ||||
| Zhejiang Beute Cosmetics Co., Ltd. | 10,181,983.21 | 10,181,983.21 | ||||
| Ningbo Proya Enterprise | 19,558,487.33 | 15,487,723.66 | 35,046,210.99 |
| Consulting Management Co., Ltd. | ||||||
| Hangzhou Yizhuo Culture Media Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
| Hangzhou Oumisi Trading Co., Ltd. | 3,900,000.00 | 3,900,000.00 | ||||
| Guangzhou Qianxi Network Technology Co., Ltd | 1,000,000.00 | 1,000,000.00 | ||||
| Zhejiang Qingya Culture Art Communication Co., Ltd | 1,650,000.00 | 1,650,000.00 | ||||
| Hangzhou Weiluoke Cosmetics Co., Ltd. | 500,000.00 | 500,000.00 | ||||
| Singuladerm (Hangzhou) Cosmetics Co., Ltd. | 500,000.00 | 4,500,000.00 | 5,000,000.00 | |||
| Proya (Hainan) Cosmetics Co., Ltd. | 100,000.00 | 100,000.00 | ||||
| Hangzhou TIMAGE Cosmetics Co., Ltd. | 112,755.04 | 127,554.14 | 240,309.18 | |||
| Total | 261,854,996.61 | 33,324,012.57 | 5,046,455.61 | 290,132,553.57 | 42,500,000.00 |
(2) Investments in associates and joint ventures
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Investment unit | Opening balance | Changes in the current period | Closing balance | Closing balance of impairment provision | |||||||
| Additional investment | Investment decrease | Recognized investment gain and loss under equity method | Other comprehensive income adjustments | Other changes in equity | Declared payment of cash dividends or profits | Provision for impairment | Others | ||||
| I. Joint Venture | |||||||||||
| Huzhou Panrui Industry Investment Partnership (Limited Partnership) | 3,068,948.16 | -2,049.38 | 3,066,898.78 | ||||||||
| Subtotal | 3,068,948.16 | -2,049.38 | 3,066,898.78 | ||||||||
| II. Associates | |||||||||||
| Xiongke Culture Media (Hangzhou) Co., Ltd. | 2,649,619.70 | -14,687.84 | 2,634,931.86 | ||||||||
| Jiaxing Woyong Investment Partnership (Limited Partnership) | 111,253,221.93 | 6,818,181.82 | -1,546,592.11 | 116,524,811.64 | |||||||
| Zhuhai Healthlong Biotechnology Co., Ltd. | 10,576,298.67 | 10,576,298.67 | 92,018,511.89 | ||||||||
| Beijing Xiushi Culture Development Co., Ltd. | 4,918,865.34 | -36,670.67 | 4,882,194.67 | ||||||||
| Subtotal | 129,398,005.64 | 6,818,181.82 | -1,597,950.62 | 10,576,298.67 | 124,041,938.17 | 92,018,511.89 | |||||
| Total | 132,466,953.8 | 6,818,181.82 | -1,600,000.00 | 10,576,298.67 | 127,108,836.95 | 92,018,511.89 | |||||
Other description:
□ Applicable √ Not applicable
4. Operating revenue and operating cost
(1). Information of operating revenue and operating cost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period | ||
| Revenue | Cost | Revenue | Cost | |
| Main business | 1,710,497,142.80 | 814,221,197.64 | 1,338,252,463.90 | 608,471,644.94 |
| Other business | 20,047,982.29 | 9,555,378.31 | 365,701.44 | 7,891,133.10 |
| Total | 1,730,545,125.09 | 823,776,575.95 | 1,338,618,165.34 | 616,362,778.04 |
(2). Information of income generated by the contract
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
Other description:
Breakdown information by major categories of revenue arising from contracts with customers
(1) Income breakdown by goods or service transfer time
| Item | Amount for the current period | Amount for the same period in the previous year |
| Income recognized at a certain point | 1,713,705,273.22 | 1,338,554,957.83 |
| Income recognized within a period of time | 16,839,851.87 | 63,207.51 |
| Subtotal | 1,730,545,125.09 | 1,338,618,165.34 |
(2) Revenue recognized in the current period included in the opening carrying amount of contractliabilities is RMB68,099,041.17.
5. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Long-term equity investment income measured by cost method | ||
| Long-term equity investment income | -1,600,000.00 | -3,474,371.02 |
| measured by equity method | ||
| Investment income from disposal of long-term equity investment | -2,545,129.34 | |
| Investment income of financial assets held for trading during the holding period | ||
| Dividend income from investment in other equity instruments during the holding period | ||
| Interest income from debt investment during the holding period | ||
| Interest income from other debt investments during the holding period | ||
| Investment income from disposal of financial assets held for trading | ||
| Investment income from disposal of investment in other equity instruments | ||
| Investment income from disposal of debt investment | ||
| Investment income from disposal of other debt investments | ||
| Gains of debt restructuring | ||
| Total | -4,145,129.34 | -3,474,371.02 |
Other description:
None
6. Others
□ Applicable √ Not applicable
XVIII. Supplementary information
1. Statement of non-recurring gains and losses for the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
| Item | amount | Notes |
| Gain or loss on disposal of non-current assets | -217,694.21 | |
| Tax refund or reduction approved beyond authority or without official approval or on an occasional basis | ||
| Government grants included in the current profit and loss (except those that are closely related to the enterprise’s business, in compliance with the relevant policies and enjoy in accordance with the national unified standard quota or quantitative amount) | 34,639,076.23 |
| Fund occupation fees charged from non-financial businesses included in the current profit and loss | ||
| Gains arising from investment costs for acquisition of subsidiaries, associates and joint ventures less than the fair values of attributable identifiable net assets of the invested entity at the time of acquisition | ||
| Gain or loss from exchange of non-monetary assets | ||
| Gain and loss on authorizing others to invest or manage assets | ||
| Provisions for various asset impairments due to force majeure factors such as natural disasters | ||
| Gain and loss on restructuring of debts | ||
| Corporate restructuring expenses, such as re-settlement expenses and integration cost | ||
| Profit and loss in excess of the fair value generated from obviously unfairly priced transactions | ||
| Net profit and loss of subsidiaries generated from the merger of companies under common control from the beginning of the period to the date of merger | ||
| Profit and loss arising from contingent events unrelated to the Company’s normal operations | ||
| Profit and loss from changes in fair value arising from financial assets held for trading, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, and investment gain from disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments, except for effective hedging related to the Company’s normal operations | ||
| Reversal of provision for impairment of receivables and contract assets individually tested for impairment | 421,794.92 | |
| Profit or loss from entrusted loans | ||
| Profit and loss arising from changes in the fair value of investment property subsequently measured with the fair value model |
Impact of one-time adjustments on the currentprofit and loss according to the requirements oftax and accounting laws and regulations on the
| current profit and loss | ||
| Custody fee income from entrusted operations | ||
| Other non-operating revenue and expenses other than the above items | -873,327.35 | |
| Other gains and losses items under the definition of non-recurring gains and losses | ||
| Less: Income tax impact | 7,638,568.45 | |
| Effect of minority shareholders’ equity (after tax) | 5,729,135.70 | |
| Total | 20,602,145.44 |
The reasons should be explained for the non-recurring gains and losses items defined by the Companyaccording to the definition of Explanatory Announcement on Information Disclosure for CompaniesOffering Their Securities to the Public No.1--Non-recurring Gains and Losses, and the non-recurringgains and losses items listed in Explanatory Announcement on Information Disclosure for CompaniesOffering Their Securities to the Public No.1--Non-recurring Gains and Losses as recurring gains andlosses items.
□ Applicable √ Not applicable
2. Net assets income rate and earnings per share
√ Applicable □ Not applicable
| Profit during the Reporting Period | Weighted average ROE (%) | Earnings per share | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to ordinary shareholders of the Company | 13.29 | 1.25 | 1.24 |
| Net profit attributable to ordinary shareholders of the Company after deducting non-recurring gains and losses | 12.74 | 1.20 | 1.19 |
3. Differences in Accounting Data under Chinese and International Accounting Standards
□ Applicable √ Not applicable
4. Others
□ Applicable √ Not applicable
Chairman: HOU JunchengDate of submission approved by the Board of Directors: August 28, 2023
Revision information
□ Applicable √ Not applicable