Yunnan Botanee Bio-Technology Group Co., Ltd.
2023 Annual Report
2024-011
April, 2024
2023 Annual Report
Section I Important Notice, Table of Contents, and Definitions
Our Board of Directors, Board of Supervisors, directors, supervisors, andsenior managers guarantee that this annual report is true, accurate and completewithout falsehoods, misleading statements or major omissions, and undertakeindividual and joint legal liabilities arising therefrom.
Our Chairman and President Mr. Guo Zhenyu, CFO Mr. Wang Long, andHead of Accounting Department Mr. Liu Zhaofeng hereby declare that thefinancial statements herein are true, accurate, and complete.
All directors of Botanee have attended the board meeting for deliberating onthis report.
Forward-looking statements herein on Botanee’s future prospects, businessplans, etc. do not constitute substantial commitments to investors. Investors areadvised to read carefully such information, and watch investment risks. Investorsand related parties should maintain adequate risk awareness, and understandthe differences between plans, forecasts, and commitments.
We have described in detail possible risks in our operations and ourcountermeasures in “Section III Management Discussion and Analysis” and“Section XI Future Prospects of Botanee” of this report. Investors are kindlyrequested to pay attention to these sections.
Our profit-sharing plan deliberated on and adopted by the Board ofDirectors is: to distribute CNY6.00 of cash dividend for every 10 shares to allshareholders based on 420,605,382 shares, give them 0 bonus shares (taxincluded), and issue 0 shares for them for every 10 shares by transferring capitalreserve.
Table of Contents
Section I Important Notice, Table of Contents, and Definitions ...... 2
Section II Company Profile and Key Financial Indicators ...... 10
Section III Discussion and Analysis by the Management ...... 15
Section IV Corporate Governance ...... 60
Section V Environmental and Social Responsibility ...... 81
Section VI Significant Events ...... 82
Section VII Changes in Shares and Information about Shareholders ...... 111
SectionIV Share Repurchases during the Reporting Period ...... 115
Section VIII Preference Shares ...... 117
Section IX Bonds ...... 118
Section X Financial Report ...... 119
Documents Available for Inspection
(1) The original of our 2023 Annual Report signed by the Company’s legal representative Mr. Guo Zhenyu.
(2) The financial statements signed and sealed by the Company’s legal representative Mr. Guo Zhenyu, CFO Mr. Wang Long,and Head of Accounting Department Mr. Liu Zhaofeng, the person in charge of the accounting firm (Accounting Supervisor).
(3) The original of our audit report sealed by Talent Certified Public Accountants (Special General Partnership), and signedand sealed by its certified public accountants.
4) The original of all our documents and announcements that have been publicly disclosed during the reporting period.
The above documents are kept at our Board Secretary’s Office.
Definitions
| Term | Definition |
| CSRC | China Securities Regulatory Commission |
| SZSE | Shenzhen Stock Exchange |
| The Company/Botanee | Yunnan Botanee Bio-Technology Group Co., Ltd. |
| Botanee Co., Ltd. | Kunming Botanee Bio-Technology Co., Ltd., the predecessor of Botanee |
| Shanghai Botanee | Shanghai Botanee Bio-Technology Co., Ltd., a wholly-owned subsidiary of Botanee |
| Beixiaoni (Shanghai) | Beixiaoni (Shanghai) Technology Co., Ltd., a wholly-owned subsidiary of Shanghai Botanee |
| Yanyao Medical Management | Yanyao (Shanghai) Medical Management Co., Ltd., a wholly-owned subsidiary of Shanghai Botanee |
| Yanyao Medical Beauty | Shanghai Yanyao Medical Beauty Clinic Co., Ltd., a wholly-owned subsidiary of Yanyao Medical Management |
| Botanee (Xiamen) | Botanee (Xiamen) Technology Co., Ltd., a wholly-owned subsidiary of Shanghai Botanee |
| Botanee (Hangzhou) | Botanee (Hangzhou) Technology Co., Ltd., a wholly-owned subsidiary of Shanghai Botanee |
| Botanee (Hainan) | Botanee (Hainan) E-commerce Co., Ltd., a wholly-owned subsidiary of Shanghai Botanee |
| Chengdu Botanee | Chengdu Botanee Enterprise Management Co., Ltd., a wholly-owned subsidiary of Botanee |
| Sichuan Botanee | Sichuan Botanee Bio-Technology Co., Ltd., a holding subsidiary of Chengdu Botanee |
| Wuhou Botanee | Chengdu Wuhou Botanee Bio-Technology Co., Ltd., a wholly-owned subsidiary of Sichuan Botanee |
| Wuhan Botanee | Wuhan Botanee Bio-Technology Co., Ltd., a holding subsidiary of Botanee |
| Kunming Botanee Sales | Kunming Botanee Bio-Technology Sales Co., Ltd., a wholly-owned subsidiary of Botanee |
| Kunming Yunzhuang | Kunming Yunzhuang Biotechnology Co., Ltd., a wholly-owned subsidiary of Botanee |
| Kunming Winona | Kunming Winona Skincare Co., Ltd., a holding subsidiary of Winona Yunzhuang |
| Qiumei Technology (Shanghai) | Qiumei Technology (Shanghai) Co., Ltd., a wholly-owned subsidiary of Shanghai Botanee |
| Qiumei Technology (Kunming) | Qiumei Technology (Kunming) Co., Ltd., a wholly-owned subsidiary of Botanee |
| Shanghai Botanee Technology | Shanghai Botanee Health Technology Co., Ltd., a wholly-owned subsidiary of Botanee |
| Shanghai Jiyan Biomedical | Shanghai Jiyan Biomedical Development Co., Ltd., a wholly-owned subsidiary of Shanghai Botanee Technology |
| Botanee (Shanghai) Supply Chain | Botanee (Shanghai) Supply Chain Management Co., Ltd., a wholly-owned subsidiary of Shanghai Botanee Technology |
| Botanee (Kunming) Trading | Botanee (Kunming) Trading Co., Ltd., a wholly-owned subsidiary of Botanee |
| Botanee Trading | Botanee Trading Co., Ltd., a wholly-owned subsidiary of Botanee |
| Yunnan Yunke | Yunnan Yunke Specialty Plant Extraction Laboratory Co., Ltd., a wholly-owned subsidiary of Botanee |
| Shanghai Yibeini | Shanghai Yibeini Health Technology Co., Ltd., a wholly-owned subsidiary of Botanee |
| Aoxmed (Shanghai) | Aoxmed (Shanghai) Biotechnology Co., Ltd., a holding subsidiary of Shanghai Yibeini |
| Clinmate (Shanghai) | Clinmate (Shanghai) Biotechnology Co., Ltd., a wholly-owned subsidiary of Botanee |
| Hainan Botanee Investment | Hainan Botanee Investment Co., Ltd., a wholly-owned subsidiary of Botanee |
Hainan Botanee Private
| Hainan Botanee Private | Hainan Botanee Private Equity Fund Management Co., Ltd., a wholly-owned subsidiary of Botanee |
| Yunnan Weijia | Yunnan Weijia Biotechnology Co., Ltd., a holding subsidiary of Botanee |
| Sichuan Huifu Hospital Management | Sichuan Huifu Hospital Management Co., Ltd., a wholly-owned subsidiary of Chengdu Botanee |
| Chengdu Huifu Internet Hospital | Chengdu Wuhou Huifu Internet Hospital Co., Ltd., a wholly-owned subsidiary of Sichuan Huifu Hospital Management |
| Chengdu Huifu Outpatient Clinic | Chengdu Wuhou Yiduo Huifu Outpatient Clinic Co., Ltd., a wholly-owned subsidiary of Sichuan Huifu Hospital Management |
| Shanghai Haimoni | Shanghai Haimoni Biotechnology Co., Ltd., a wholly-owned subsidiary of Kunming Yunzhuang |
| Xiamen Chonglou Private | Xiamen Chonglou Private Equity Fund Management Co., Ltd., a wholly-owned subsidiary of Botanee |
| Nibei (Shanghai) Technology | Nibei (Shanghai) Technology Co., Ltd., a wholly-owned subsidiary of Shanghai Yibeini |
| Kunming Ansute | Kunming Ansute Biotechnology Co., Ltd., a wholly-owned subsidiary of Shanghai Haimoni |
| Hangzhou Ansute | Hangzhou Ansute Biotechnology Co., Ltd., a wholly-owned subsidiary of Shanghai Haimoni |
| Shanghai Beforteen | Shanghai Beforteen Technology Co., Ltd., a wholly-owned subsidiary of Shanghai Yibeini |
| Sichuan Beforteen Enterprise | Sichuan Beforteen Enterprise Management Co., Ltd., a wholly-owned subsidiary of Chengdu Botanee |
| Chengdu Beforteen Internet Hospital | Chengdu Wuhou Beforteen Internet Hospital Co., Ltd., a wholly-owned subsidiary of Sichuan Botanee Enterprise |
| Chengdu Beifu Outpatient Clinic | Chengdu Wuhou Beifu Comprehensive Outpatient Clinic Co., Ltd., a wholly-owned subsidiary of Sichuan Beforteen Enterprise |
| Yunnan Botanee Technology | Yunnan Botanee Health Technology Co., Ltd., a wholly-owned subsidiary of Botanee |
| Huzhou Botanee | Huzhou Botanee Biotechnology Co., Ltd., a wholly-owned subsidiary of Shanghai Botanee Technology |
| Shangri-La Yunke | Shangri-La Yunke Specialty Chinese Medicinal Materials Planting Co., Ltd., a wholly-owned subsidiary of Yunnan Yunke |
| Nuoweitai (Kunming) | Nuoweitai (Kunming) Biotechnology Co., Ltd., a holding subsidiary of Shanghai Yibeini |
| Clinmate (Kunming) | Clinmate (Kunming) Biotechnology Co., Ltd., a wholly-owned subsidiary of Clinmate (Shanghai) |
| Hunan Botanee | Hunan Botanee Biotechnology Co., Ltd., a wholly-owned subsidiary of Botanee |
| Changsha Meluda | Changsha Meluda Medical Equipment Co., Ltd., a wholly-owned subsidiary of Botanee |
| Hunan Ailemei | Hunan Ailemei Biotechnology Co., Ltd., a wholly-owned subsidiary of Botanee |
| ME Investment | ME (Guangzhou) Investment Co., Ltd., a wholly-owned subsidiary of Botanee |
| Hangzhou Meixi | Hangzhou Meixi Brand Management Co., Ltd., a joint venture invested by Hainan Botanee Investment |
| Shenzhen Nature | Shenzhen Natural Technology Co., Ltd., a joint venture invested by Hainan Botanee Investment |
| Beijing Huanfang Shidai | Beijing Huanfang Shidai Information Technology Co., Ltd., a joint venture invested by Hainan Botanee Investment |
| Yizheng (Suzhou) Biotech | Yizheng (Suzhou) Biotechnology Co., Ltd., a joint venture invested by Shanghai Botanee |
| Hunan Miaomiao Health | Hunan Miaomiao Kelaiyimei Health Management Co., Ltd., a joint venture invested by Clinmate (Shanghai) |
| WEMT Medical | WEMT Medical Technology (Wuxi) Co., Ltd., a joint venture invested by Hainan Botanee Investment |
| Shanghai Weimu Medical | Shanghai Weimu Medical Technology Co., Ltd., a joint venture invested by Hainan Botanee Investment |
Nuona Technology
| Nuona Technology | Kunming Nuona Technology Co., Ltd., a controlling shareholder of the Company |
| Sequoia Juye | Tianjin Sequoia Juye Equity Investment Partnership (Limited Partnership), a shareholder of Botanee |
| Zhenli Consulting | Xiamen Zhenli Consulting Co., Ltd., a shareholder of Botanee |
| Chonglou Investment | Xiamen Chonglou Investment Partnership (Limited Partnership), a shareholder of Botanee |
| Yunnan Haqisheng | Yunnan Haqisheng Enterprise Management Co., Ltd., a shareholder of Botanee |
| Company Law | Company Law of the People’s Republic of China |
| Securities Law | Securities Law of the People’s Republic of China |
| KOL | Key opinion leader, which usually refers to a person who has more access to product information, is trusted by his/her audience, and can influence their purchase |
| KOC | Key opinion consumer, a consumer who can influence his/her friends and fans to buy things. |
| 618 | The online shopping day that falls on June 18 every year, originated from large-scale promotion activities created by JD.com on June 18, 2010 |
| Double 11 | The online retail festival that takes place on November 11 every year, originated from the large promotion created by Taobao Mall (now Tmall) on November 11, 2009 |
| Cosmetics | Chemical industrial products or fine chemical products applied by smearing, spraying, or other similar means to any part of the surface of human body, such as skin, hair, fingernails, toenails, lips, and teeth, for the purpose of cleaning, taking care of, beautifying, modifying or altering the appearance, or for modifying body odor to maintaining human body in good condition |
| Skincare products | Cosmetics designed to protect or take care of the skin, and enhance its elasticity and vitality |
| Dermatological level/ functional skincare products | Skin care products with a mild and scientific formula suitable for sensitive skin and other skin conditions which emphasizes safety and professionalism, as defined by Euromonitor on dermocosmetics |
| Cosmetics industry | The industry that covers infant and children products, bath products, make-ups, deodorant antiperspirants, hair removers, perfumes, hair care products, men’s care products, oral care products, skin care products, sunscreen products, etc., as defined by Euromonitor on beauty and personal care |
| Medical devices | Instruments, equipment, appliances, in vitro diagnostic reagents and calibrators, materials, and other similar or related articles used directly or indirectly on human body. The medical devices manufactured and used by us mainly include hyaluronic acid-based biofilms and hyaluronic acid-based dressings used for the protection and care of barrier damaged skin after minimally invasive procedures |
| E-commerce | A new type of business operating model that enables online shopping by consumers, online transactions between merchants, and online electronic payments, as well as various business activities, transactions, financial activities and related integrated services amidst a wide range of commercial trade activities around the world, based on browser/server applications in an open network environment on the Internet, where buyers and sellers conduct various commercial activities without meeting each other |
| Online sales/ online channel sales | Product sales through e-commerce channels (telephone shopping, and TV shopping included) |
| Offline sales/ offline channel sales | Product sales through traditional sales channels (including department stores, hypermarkets, cosmetic specialty stores, direct stores, pharmacies, etc.) |
| Commissioned manufacturing | A manufacturing mode in which the client provides the commissioned with product formula, raw and auxiliary materials, and packaging materials, and sends an internal control team to guide and supervise the commissioned to manufacture products in accordance with required process |
| OEM manufacturing | A manufacturing mode in which the purchaser proposes requirements on product design, specifications, functions, etc. to the manufacturer, and the manufacturer manufacture products according to the purchaser’s requirements |
| CNY | China’s statutory currency |
| The end of the reporting period | December 31, 2023 |
| The beginning of the reporting period | January 1, 2023 |
| The end of previous/ last year | December 31, 2022 |
The reporting period
| The reporting period | From January 1, 2023 to December 31, 2023 |
| Same period of previous/ last year | From January 1, 2022 to December 31, 2022 |
Section II Company Profile and Key Financial Indicators
1. Company Profile
| Stock name | Botanee | Stock code | 300957 |
| Company name (in Chinese) | 云南贝泰妮生物科技集团股份有限公司 | ||
| Company name for short (in Chinese) | 贝泰妮 | ||
| Company name (in English) | Yunnan Botanee Bio-Technology Group Co. LTD | ||
| Company name for short (in English) | BTN | ||
| Legal representative | Guo Zhenyu | ||
| Registered address | No. 53, Keyi Road, High-tech Development Zone, Kunming City, Yunnan Province | ||
| Postal code of the registered address | 650106 | ||
| Changes in the registered address | N/A | ||
| Business address | No. 53, Keyi Road, Kunming High-tech Industrial Development Zone, Kunming, Yunnan Province | ||
| Postal code of the business address | 650106 | ||
| Website | http://www.botanee.com.cn/ | ||
| ir@botanee.com | |||
2. Contact information
| Board Secretary | Securities representative | |
| Contact person | Wang Long | Xu Ling |
| Address | No. 53, Keyi Road, Kunming High-tech Industrial Development Zone, Kunming, Yunnan Province | No. 53, Keyi Road, Kunming High-tech Industrial Development Zone, Kunming, Yunnan Province |
| Tel. | 0871-6801 3210 | 0871-6801 3210 |
| Fax | 0871-6801 3210 | 0871-6801 3210 |
| ir@botanee.com | ir@botanee.com |
3. Information Disclosure and Place for Keeping Documents Available for Inspection
| Website of the stock exchange that discloses our annual report | http://www.szse.cn/ |
| Media selected by us for information disclosure | Our website (http://www.botanee.com.cn/), CNINFO (http://www.cninfo.com.cn/), Securities Times, China Securities Journal, Shanghai Securities Journal, and Securities Daily |
| Place for keeping documents available for | Board Secretary’s Office of Botanee |
inspection
inspection
4. Other Relevant Information
Accounting firm engaged by us:
| Name | Talent Certified Public Accountants (Special General Partnership) |
| Business address | Room 1907, No. 106 Jiangdong Middle Road, Jianye District, Nanjing |
| Signing accountants | Wu Ting, and Zhang Xuewen |
Sponsor engaged by us to continuously perform supervisory function during the reporting period:
? Applicable □ N/A
| Name | Business address | Representatives | Continuous supervision period |
| Guosen Securities Co., Ltd. | 5/F, Cathaya Business Mansion, No. 105 Tiyuchang Road, Hangzhou | Lou Yu, and Wang Donghui | From March 25, 2021 to December 31, 2024 |
Financial advisor engaged by us to continuously perform supervisory function during the reporting period:
□ Applicable ? N/A
5. Key Accounting Data and Financial Indicators
Whether we retrospectively adjusted or restated accounting data accounting data for previous years or not:
?Yes □No
Reason for the retrospective adjustment or restatement:
Changes in accounting policies
| 2023 | 2022 | Change over previous year | 2021 | |||
| Before | After | After | Before | After | ||
| Operating revenue (CNY) | 5,522,168,263.00 | 5,013,873,729.44 | 5,013,873,729.44 | 10.14% | 4,022,403,431.75 | 4,022,403,431.75 |
| Net profit attributable to our shareholders (CNY) | 756,795,007.56 | 1,051,228,828.98 | 1,051,331,949.57 | -28.02% | 862,922,946.61 | 862,922,946.61 |
| Net profit attributable to our shareholders after deducting non-recurring gains and losses (CNY) | 618,058,791.53 | 951,225,441.18 | 953,787,022.86 | -35.20% | 813,020,602.86 | 815,482,746.34 |
| Net cash flows from our operating activities (CNY) | 610,438,763.71 | 769,445,621.45 | 769,445,621.45 | -20.67% | 1,152,720,351.41 | 1,152,720,351.41 |
| Basic earnings per share (CNY/share) | 1.79 | 2.48 | 2.48 | -27.82% | 2.12 | 2.12 |
| Diluted earnings per share (CNY/share) | 1.79 | 2.48 | 2.48 | -27.82% | 2.12 | 2.12 |
| Weighted average return on net assets | 13.21% | 20.48% | 20.48% | -7.27% | 23.33% | 23.33% |
| End of 2023 | End of 2022 | Change over previous year | End of 2021 | |||
Before
| Before | After | After | Before | After | ||
| Total assets (CNY) | 7,506,930,342.79 | 6,718,716,893.90 | 6,719,600,623.02 | 11.72% | 5,812,491,217.77 | 5,812,491,217.77 |
| Net assets attributable to our shareholders (CNY) | 5,860,994,371.02 | 5,552,272,818.71 | 5,602,349,316.16 | 4.62% | 4,755,204,197.34 | 4,755,204,197.34 |
Reason for changes in accounting policies and correction of accounting errors:
At the beginning of the reporting period, we adjusted our accounting data in accordance with “Accounting treatment that theexemption of initial recognition shall not apply to the deferred income tax relating to assets and liabilities arising from a singletransaction” specified in Interpretation No. 16 of Accounting Standards for Business Enterprises issued by the Ministry of Finance.For details, please refer to section “43. Changes in Important Accounting Policies and Accounting Estimates” in Section XV of thisreport titled “Important Accounting Policies and Accounting Estimates”.
Indicate the lower of our net profit before and after deducting non-recurring gains and losses in the last three accounting yearswas negative, and the latest auditor’s report shows there was uncertainty about our ability to continue as a going concern:
□Yes ?No
Indicate whether the lower of our net profit before and after deducting non-recurring gains and losses was negative or not:
□Yes ?No
Indicate whether our share capital has changed from the end of the reporting period to the date disclosing this annual reportdue to issuance of new shares, additional issuance, rights issue, exercise of equity incentive, repurchase, etc., and whether theamount of shareholders’ equity has been affected or not:
?Yes □No
| Dividends paid for preferred stock | |
| Interest paid from perpetual bonds (CNY) | |
| Fully diluted earnings per share calculated based on the latest share capital (CNY/share) | 1.7866 |
6. Quarterly Key Financial Indicators
Unit: CNY
| Q1 | Q2 | Q3 | Q4 | |
| Operating revenue | 863,307,083.80 | 1,504,435,530.14 | 1,063,740,686.07 | 2,090,684,962.99 |
| Net profit attributed to our shareholders | 158,265,044.32 | 291,747,169.73 | 129,177,837.99 | 177,604,955.52 |
| Net profit attributed to our shareholders after deducting non-recurring gains and losses | 126,577,596.71 | 247,105,276.77 | 134,347,151.14 | 110,028,766.91 |
| Net cash flows from our operating activities | -196,770,597.63 | 481,755,634.33 | -160,519,507.67 | 485,973,234.68 |
Indicate whether there is any major discrepancies between the above financial indicators or their sum and relevant indicatorsdisclosed in our quarterly or semi-annual report or not:
□Yes ?No
7. Differences in Accounting Data under China’s and Overseas Accounting Standards
7.1 Differences in Net Profit and Net Assets Disclosed in Our Financial Report Prepared under the ChinaAccounting Standards (CAS) and the International Financial Reporting Standards (IFRS)
□ Applicable ? N/A
7.2 Differences in Net Profit and Net Assets Disclosed in Our Financial Report Prepared under CAS andoverseas accounting standards
□ Applicable ? N/A
No such differences for the reporting period.
8. Non-recurring Gains and Losses
? Applicable □ N/A
Unit: CNY
| Item | 2023 | 2022 | 2021 | Note |
| Gains and losses from disposal of non-current assets (including the write-off of assets impairment) | 461,616.01 | -112,591.36 | 516,716.70 | Gains and losses from disposal of non-current assets |
| Government subsidies included in current profits and losses (except for government subsidies that are closely related to our normal business operations, meet national policies and regulations, are enjoyed in accordance with established standards, and have a lasting impact on our gains and losses) | 131,682,124.63 | 73,958,898.11 | 32,265,474.08 | Government subsidies included in “other income” |
| Gains and losses from changes in fair value arising from the holding of financial assets and financial liabilities by non-financial enterprises, and gains and losses arising from the disposal of financial assets and financial liabilities in addition to effective hedging business related to our normal business operations | -17,238,886.41 | -5,519,803.92 | 10,797,093.76 | Gains and losses from changes in fair value of entrusted cash |
| Gains and losses from assets invested or managed by the entrusted | 54,656,428.89 | 78,007,914.79 | 18,830,359.81 | Mainly investment income generated by the maturity of entrusted cash management |
| Other non-operating income and expenses other than the above | -7,167,283.17 | -33,230,882.52 | -5,986,664.83 | Mainly additional VAT credit for VAT input tax included in “other income” and public welfare donations included in “non-operating expenses” |
| Minus: our income tax | 22,633,297.72 | 15,788,459.33 | 8,906,790.81 | |
| Minority shareholders’ interests (after tax) | 1,024,486.20 | -229,850.94 | 75,988.44 | |
| Total | 138,736,216.03 | 97,544,926.71 | 47,440,200.27 |
Particulars about other items that meet the definition of non-recurring gain/loss:
? Applicable □ N/AAccording to the Explanatory Announcement on Information Disclosure by Companies Offering Securities to the Public No. 1:
Non-recurring Profit and Loss (Revised in 2023) issued by the China Securities Regulatory Commission on December 22, 2023,identified government subsidies that are closely related to our normal business operations, meet national policies and regulations, areenjoyed in accordance with established standards, and have a lasting impact on our gains and losses in 2023 as recurring gains andlosses, and adjusted our non-recurring gains and losses in 2022 and 2021 by the same caliber. Thus, our after-tax non-recurring gainsand losses attributable to shareholders in 2022 and 2021 decreased by CNY2,458,461.09 and CNY2,462,143.48, respectively.
Explain the reasons if we identified an item as recurring gain/loss which is enumerated as non-recurring gain/loss in theExplanatory Announcement on Information Disclosure by Companies Offering Securities to the Public No. 1: Non-recurring Profit andLoss:
□ Applicable ? N/A
Section III Discussion and Analysis by the ManagementBotanee is required to comply with:
Disclosure requirements for the “retail industry” as stated in the Self-regulatory Guidelines for Listed Companies of ShenzhenStock Exchange No. 3 - Industry Information Disclosure;Disclosure requirements for “Chemical Industry-related Business” as stated in the Self-regulatory Guidelines for ListedCompanies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure; andDisclosure requirements for “E-commerce Business” as stated in the Self-regulatory Guidelines for Listed Companies of ShenzhenStock Exchange No. 4 - GEM Industry Information Disclosure.
1. Overview of the Industry during the Reporting Period
Botanee operates in the daily chemical product manufacturing industry, which is classified as “Manufacture of Chemical RawMaterials and Chemical Products” (C26) in the Industry Classification Guidelines for Listed Companies issued by the ChinaAssociation for Public Companies. According to the Industrial Classification for National Economic Activities (GB/T 4754-2017),Botanee falls under the industry segment of cosmetics manufacturing (C2682) under daily chemical product manufacturing (C268).
According to data from the National Bureau of Statistics, the total retail sales of consumer goods in China during the reportingperiod amounted to approximately CNY47.15 trillion, which represented a year-on-year increase of 7.24%. Specifically, the retail salesof cosmetics and personal care products by enterprises above designated size amounted to approximately CNY414.17 billion, a year-on-year increase of 5.10%. During the reporting period, the year-on-year growth rate of retail sales of cosmetics and personal careproducts by enterprises above designated size was slightly lower than total retail sales of consumer goods, which was to some extentinfluenced by economic downturn and weakened market demands.
Nevertheless, with the enormous consumer base in China’s cosmetics market, as uncertainties gradually diminish, the Chinesecosmetics industry is still expected to be one of the fastest-growing and most promising markets globally. According to statistics fromglobal research firm Euromonitor
, the overall market capacity of China’s cosmetics industry achieved a compound annual growth rateof approximately 5.30% from 2018 to 2023. By 2023, the overall market capacity of China’s cosmetics industry is expected to reachapproximately CNY547.98 billion, which indicates that China’s cosmetics industry is still in a high-growth phase. Furthermore,Euromonitor predicts that the overall market capacity of China’s cosmetics industry will maintain a stable growth with a compoundannual growth rate of approximately 4.80% from 2024 to 2028. By 2024, the overall market capacity of China’s cosmetics industry isprojected to reach nearly CNY580.00 billion, representing an estimated year-on-year growth of 5.10%.
In the sub-market of dermatological skincare products, according to Euromonitor’s statistics, the market size of dermatological-level skincare products in China
during the reporting period was approximately CNY33.34 billion. This means Chinese market fordermatological skincare products is still in a golden development period, and is expected to continue supporting the recovery andgrowth of its cosmetics consumption market.
Based on Euromonitor’s statistics, during the reporting period, our Winona brand ranked 9th in the skincare product market,remaining relatively stable compared with the same period last year. However, it has consistently held the top position in the market fordermatological skincare products in China for several years. During the reporting period, Winona brand maintained its leading positionwith a market share of approximately 20.40% in the domestic market for dermatological skincare products, which remained stablecompared to the same period last year, demonstrating a significant head effect.Our products in different categories continue to maintain a strong and impressive performance in their respective sub-market areas.According to Euromonitor, Winona maintained its market ranking in the sunscreen care category, showing as good performance during
The data come from beauty and personal care estimate for 2024 released by Euromonitor International (Shanghai) Co., Ltd. (pre-released in March2024), which are calculated based on retail sales data in 2023. Brands included in statistics are based on Global Business Network (GBN). The futureforecast growth rate includes inflation factors.
The market size of dermatology-level skin care products is the sum of sales of mass and high-end dermatology-level skin care brands as defined byEuromonitor. This market segment is established based on the sales and market share of included brands, whose historical size may change due toexpanded brand coverage.
the reporting period as that over the same period last year. Its toner and face mask products both consistently ranked among the top fivein the market, ranking fourth. Its basic moisturizing products entered top ten in the market, ranking one position higher than the sameperiod last year. Besides, Winona performed excellently in the high-end skincare product market, ranking fourth during the reportingperiod and joining the ranks of top brands. Botanee and its Winona brand have a clear first-mover advantage, and continue to maintaina leading position in the cosmetics industry.
2. Main Business Operations during the Reporting Period
2.1 Main Business and Products
Botanee focuses on the development of multiple brands, including core brand Winona as well as Winona Baby, AOXMED,Beforteen, Za, and PURE&MILD. We specialize in providing professional and effective skincare products using pure natural plant-derived active ingredients, with a particular emphasis on sensitive skin. As a specialized cosmetics manufacturer that integrates deeplywith internet-based sales channels, our mission is to “create China’s skin health ecosystem” by deeply understanding consumer needs,basing its products on dermatological theories, and combining multidisciplinary technologies such as biology and botany tocontinuously conduct product research and technological innovation. We strive to provide professional skincare and makeup productsthat cater to different skin needs.
We have established a foundation through offline pharmaceutical channels and implemented an omnichannel strategy coveringonline platforms. With a comprehensive retail touchpoint system, we have successfully realized cross-industry marketing (OMO)leveraging the internet and new technologies like artificial intelligence. This has facilitated mutual penetration between offline andonline channels and achieved extensive coverage of consumer groups, which makes Botanee a leading company in the internet+ greaterhealth industry in China. Additionally, we capitalizes on the efficiency of the internet, the vast user traffic on mainstream e-commerceplatforms, and flexible new media marketing methods. With our strengths in e-commerce operations and high-quality products, wehave successfully seized the opportunities for rapid growth in the cosmetics industry driven by the “Chinese domestic products” trend.
Our main product categories include facial creams, toners, face masks, serums, lotions, as well as makeup products such assunscreens, powders, BB creams, and makeup removers. In addition to skincare and makeup, we are also engaged in the research,development, production, and sales of medical devices related to skincare. This includes medical devices such as hyaluronic acid repairbiofilm and hyaluronic acid repair dressings used for the protection and care of damaged skin barriers after minimally invasiveprocedures.
2.2 Main Brand Matrix
Winona
Winona is a professional dermatological skincare brand that is based on dermatological theories and supported by scientificresearch and innovative technologies such as biology and botany. It targets sensitive skin, addresses the root causes, repairs the skinbarrier, and helps users achieve healthy and beautiful skin.
Winona Baby
Inheriting the genetic essence of the parent brand Winona, Winona Baby is a professional dermatological skincare brand based onpediatric dermatology. It utilizes the abundant resources of Yunnan to extract plant essences, adhering to the concept of “professionalcare for delicate baby skin” and dedicated to safeguarding the skin health of infants and young children.
AOXMED
AOXMED is committed to creating highly effective and safe professional beauty solutions and providing an exquisite skincareexperience. With cutting-edge scientific research and advanced formulation technology as its foundation, AOXMED focuses onmultidimensional skin rejuvenation, bringing professional anti-aging technologies that empower the skin with youthful vitality.
Beforteen
Beforteen is a professional acne treatment brand that utilizes big data on Chinese skin diseases as its research foundation. Bycombining top medical research with AI deep learning, it has developed a unique integrated and precise acne solution.
Za
Za focuses on the characteristics of Asian women’s skin and offers high-performance base makeup solutions that are multi-functional and easy to use. It is positioned as an international light makeup brand that allows users to effortlessly enjoy their beautifuldaily life. The core products of the Za brand include primers, sunscreens, and powders.
PURE&MILD
With a 22-year brand history and designed specifically for Chinese women, PURE&MILD harnesses the power of technology toenhance the benefits of plant extracts. It carefully selects rare plants and effective ingredients globally to help consumers achieveyouthful and vibrant skin changes. PURE&MILD’s core products include facial creams and serums, among other skincare products.
2.3 Business Model for the Year 2023
2.3.1 Main Sales Models
During the reporting period, we adhered to an offline-based channel as the foundation and an online channel as the main driver,utilizing in-depth private domain OMO (Online-Merge-Offline) approach to successfully promote an integrated omnichannel salesmodel.
| Sales models | Description | Return and exchange obligations and risks in the sales model | Revenue and cost recognition policies |
Online self-operation
| Online self-operation | Self-operation | Promote and sell products through self-operated stores on major B2C platforms such as Tmall, Douyin, Winona Online Mall, or by guiding consumers through offline promotions to make purchases on our OMO platform called Winona Counter Service Platform which is built on Tencent’s ecosystem. | Based on the return and exchange rules of each platform, a generally accepted policy is a 7-day or 14-day no-reason return and exchange policy. After the consumer confirms receipt of the goods by clicking “confirm receipt” or when the platform's specified receipt deadline is reached and the receipt is automatically confirmed, the revenue is recognized, and the costs are allocated. | Consumers place orders and make payments online. After the company ships the goods, consumers receive the products and click to confirm receipt, or when the designated deadline for receipt on the platform is reached, the receipt is automatically confirmed. At that point, the revenue is recognized, and the costs are allocated. |
Onlinedistribution
| Online distribution | Distribution | B2C Sign product purchase and sales agreements with online distributors, who independently sell products through their own stores on major B2C platforms. | No returns or exchanges are accepted unless there are quality issues. During the reporting period, the company consistently followed the return and exchange policies of the respective platforms. | The company delivers the products to the buyers as agreed in the contract, and after the buyers accept and sign the logistics receipt, the sales revenue is recognized and costs are allocated. |
| Consignment | B2C Sign product consignment agreements with major B2C platforms, and settlement is based on the actual sales of products and other agreed-upon methods on the platforms, such as VIPShop, JD Supermarket, Tmall Supermarket, etc. | No returns or exchanges are accepted unless there are quality issues. During the reporting period, the company consistently followed the return and exchange policies of the respective platforms. | Botanee delivers products to the consignees, and after the consignees make sales to external customers and issue consignment invoices to the company, the sales revenue is recognized and costs are allocated. |
Offline self-
operation
| Offline self-operation | Self-operation | OMO Directly sell products to consumers through offline direct stores, utilizing the OMO model. | No returns or exchanges are accepted unless there are quality issues. During the reporting period, the company consistently followed the return and exchange policies of the respective platforms. | Consumers select the goods, make on-site payments, and collect the goods. After the transaction is completed, revenue is recognized, and costs are allocated. |
| Offline distribution | Distribution | Sign product purchase and sales agreements with offline distributors, who sell products through their offline sales networks. | No returns or exchanges are accepted unless there are quality issues. During the reporting period, the company consistently followed the return and exchange policies of the respective platforms. | Botanee delivers products to the buyers, and after the buyers accept and sign the logistics receipt, the sales revenue is recognized, and costs are allocated. |
| Consignment | Sign product consignment agreements with consignment customers, who sell products through their offline sales networks. Settlement is based on the actual sales of products and other agreed-upon methods. | No returns or exchanges are accepted unless there are quality issues. During the reporting period, the company consistently followed the return and exchange policies of the respective platforms. | Botanee delivers products to the consignees. After the consignees make sales to external customers and issue consignment invoices to the company, the sales revenue is recognized, and costs are allocated. |
2.3.2 Procurement Models
We have established a complete supply chain system, and have strict regulations in place for supplier selection and managementin various aspects, ensuring that the quality of purchased production materials meets its requirements. During the reporting period, allsuppliers for raw material procurement were non-related parties.
Unit: 10,000 CNY/ton or CNY/piece
| Main raw materials | Procurement model | Proportion of procurement amount to total procurement amount | Significant changes in settlement methods | Average price in the first half of the year | Average price in the second half of the year |
| Active ingredients | Inquiry-based procurement | 13.81% | No | 61.24 | 112.06 |
| Moisturizers | Inquiry-based procurement | 4.45% | No | 10.43 | 11.32 |
| Oils | Inquiry-based procurement | 1.80% | No | 12.39 | 11.69 |
| Sunscreen agents | Inquiry-based | 1.00% | No | 24.50 | 24.60 |
procurement
| procurement | |||||
| Facial mask sheet | Inquiry-based procurement | 0.40% | No | 0.17 | 0.10 |
Note: During the reporting period, the proportion of main raw material procurement to our total procurement was approximately
21.46%, accounting for approximately 76.62% of direct material procurement. The proportion of main raw material procurementremained stable compared with the same period last year. In the second half of the reporting period, the proportion of high-value activeingredient raw materials increased due to formula upgrades and other reasons, leading to an increase in the average unit price of activeingredients in the second half of the reporting period. Apart from this, there were no significant changes in the proportion and averageunit price of other production materials compared to the same period last year.Energy procurement accounted for over 30% of total production costs.
□ Applicable ? N/A
2.3.3 Production Models
We arrange manufacturing according to actual manufacturing and operational needs, using a combination of independentproduction, commissioned manufacturing, and OEM production. During the reporting period, we achieved industrialized production ofskincare products, medical devices, and cosmetics. For specific information on our manufacturing and R&D advantages, please refer toSection III of this report “Analysis of Core Competitiveness”.During the reporting period, our skincare products were produced through a combination of independent production,commissioned manufacturing, and OEM production. The sales costs of skincare products produced under the three modes accountedfor approximately 21.34%, 54.98%, and 4.31% of operating costs, respectively.During the reporting period, medical device products of the company were produced through a combination of independentproduction and OEM production. The sales costs of medical device products produced under the three modes accounted forapproximately 0.96% and 1.45% of operating costs, respectively.During the reporting period, cosmetics products of the company were produced through a combination of independent production,commissioned manufacturing, and OEM production. The sales costs of cosmetics products produced under the three modes accountedfor approximately 0.12%, 0.34%, and 2.77% of operating costs, respectively.
Information on technologies employed in main products:
| Main products | Stage of production technology | Status of core technical personnel | Patent technology | Product R&D advantages |
| Skincare Products | Industrialized Production | Our employees | Please refer to “2.3.4 R&D Models” under “2. Main Business Operations during the Reporting Period” in Section III of this report for details. | Please refer to “3. Analysis of Core Competitiveness” in Section III of this report for details. |
| Medical Devices | Industrialized Production | |||
| Cosmetics | Industrialized Production |
Production capacity of main products
| Main products | Design capacity | Capacity utilization rate | Capacity under development | Investment and construction status |
| Facial masks | Approximately 240 million standard sheets | Approximately 61.07% | During the reporting period, the construction of our central | Please refer to details on the construction project of the central factory in “7.5 Use of Raised |
Bottledproducts
| Bottled products | Approximately 300 million standard units | Approximately 40.85% | factory passed acceptance, and the factory has been put into operation. The transfer and production of the central factory went smoothly according to plan. | Funds” under “7. Investment Analysis” in Section III of this report. |
| Tubes and others | Approximately 100 million standard units | Approximately 27.91% |
Note: During the reporting period, we conducted manufacturing capacity analysis based on the production and assembly processesof production equipment that has been put into operation for the new central factory.Product types in major chemical industrial parks:
□ Applicable ? N/A
Environmental impact assessment approvals applied for or obtained during the reporting period:
□ Applicable ? N/A
Abnormal production stoppages occurred during the reporting period:
□ Applicable ? N/A
Status of relevant approvals, licenses, qualifications, and their validity:
? Applicable □ N/APlease refer to “2.3.4 R&D Models” under “2. Main Business Operations during the Reporting Period” in Section III of this reportfor details.
Engagement in petroleum processing and trading industry:
□Yes ?No
Engagement in the fertilizer industry:
□Yes ?No
Engagement in the pesticide industry:
□Yes ?No
Engagement in the chlor-alkali and soda ash industry:
□Yes ?No
2.3.4 R&D Models
We are firmly committed to pursuing independent R&D. Wdhering to the research philosophy of “small incisions, in-depth studies,and practical results”, we aim to create unique research advantages and establish our research barriers. We accurately position thesensitive skin market, extensively explore dermatological targets and mechanisms, fully utilize the abundant plant resources in Yunnan,and develop customized formulations that are highly targeted and effective. We also attach great importance to safety and efficacyverification, employing internationally leading technical methods and complemented by clinical efficacy validation, to establish arigorous, comprehensive, and efficient research and innovation system, ensuring excellent product quality.During the reporting period, we fully leveraged the leading role of the Botanee Research Institute and relied on the YunnanSpecialty Plant Extraction Laboratory. With independent research and development as the main focus, we adopted a research anddevelopment mode that integrates industry, academia, and research, closely collaborating with cutting-edge laboratories in France andJapan to conduct in-depth studies on dermatological targets and mechanisms. In addition, we actively integrate global scientificresearch resources. We engage in deep cooperation and exchanges with renowned universities, research institutes, and experts bothdomestically and internationally, continuously broadening our research horizons and improving our research capabilities. OurInnovative Raw Materials Research Center focuses on independent R&D of innovative raw materials, conducting fundamental researchin areas such as problem skin mechanisms and innovative raw material targets. The newly established Medical Device R&DDepartment is dedicated to the innovation research and development, registration application, and production transformation of Class IIand Class III medical devices, which further expands the scope of our business. The Efficacious Cosmetics Research Centercontinuously improves the standards for raw material access, enhancing the testing standards for the incoming raw materials regarding
purity, impurities, odor, and content of active monomers. In terms of formulation development, we conduct fundamental research informulation science from the perspectives of the two-phase interface and penetration technology, and continues to innovate informulation types, thus constantly improving product quality. In terms of product evaluation, we continuously develop innovativeefficacy evaluation methods from three directions: cells, 3D skin models, and zebrafish models, efficiently completing the screeningwork for the safety and efficacy of raw materials and products. At the same time, we pay attention to consumer evaluations,continuously carry out standardized and diversified trend insights based on establishing a comprehensive human efficacy evaluationsystem, and provide safety guarantees and feedback monitoring support for products. In terms of process transformation, we furtherenhance pilot production requirements, strengthen technical control for mass production, and establish two pilot R&D platforms inShanghai Health Technology and Yunnan Health Technology to provide technical support for the launch of new products. In terms ofclinical management, we strengthen and improve the clinical classification management of cosmetics and medical devices to providemore empirical research data. In terms of academic result commercialization, we actively promote the commercialization of R&Dresults with the market, improve product technical manuals, and narrow the gap between research and development and consumers.The Functional Food Research Center has completed the construction of its food research and development system, and severalinnovative products have entered the pilot stage and will soon be launched. Introducing these innovative products will further enrichthe Company’s product line and meet the needs of different consumers.During the reporting period, we achieved fruitful results in scientific research and innovation, which fully demonstrates ourprofessional strength and innovation capabilities in the field of sensitive skin. At the same time, we actively participate in internationalacademic exchanges, sharing research achievements with peers worldwide and enhancing our reputation and influence in theinternational market. In the future, we will continue to adhere to independent R&D, improve our research capabilities, provideconsumers with safer and more effective products and services, actively explore new business areas and market opportunities, andestablish a solid foundation for sustained development. At the end of the reporting period, valid patents, trademark rights, workcopyrights and software copyrights held by us are as follows:
| Category | Cumulative approved items | |
| Patents | Invention patents | 49 |
| Exterior design patents | 61 | |
| Utility model patents | 83 | |
| Trademark rights | 1,049 | |
| Copyrights and software copyrights (excluding academic papers) | 59 | |
By the end of the reporting period, we have gained a total of 318 general cosmetics filing certificates, obtained a total of 29 specialcosmetics registration certificates, received 18 Class II medical device registration certificates and 12 certificates for operating Class IImedical devices. At the end of the reporting period, we had completed clinical research for 3 Class III medical devices, obtained ethicalapproval for 1 Class III medical device, and was preparing to initiate clinical research. Furthermore, 1 innovative medical softwaredevice (artificial intelligence software) was undergoing classification determination.
2.3.5 Warehousing and Logistics Models
At the end of the reporting period, we have established local warehouses in Kunming, Shanghai, and Huzhou through self-ownedor leased means. Furthermore, in order to respond to consumer shopping demands more quickly and deliver products to consumers inthe shortest possible time, we established regional third-party distribution warehouses in major regions across the country throughcooperation with logistics enterprises, integrating advantageous resources from all parties, strengthening supply chain management,and improving customer experience. During the reporting period, our logistics transportation of goods and products was mainlyprovided by third-party logistics service providers with whom we had established deep cooperative relationships.
During the reporting period, our warehousing and logistics department processed approximately 27.575 million parcels, with anaverage daily processing volume of approximately 75,500 parcels, representing a growth of approximately 11.23% over the sameperiod last year.
During the reporting period, we strictly adhered to relevant internal control systems regarding inventory storage, scrapping and
destruction, and regular inventory checks.
2.3.6 Network and Information Security Management Models
As online channels account for a significant proportion of our sales, our business operations rely on telecommunications operators’network infrastructure and depend on the soundness of our information system. To ensure the security of the information system, westrictly comply with laws such as the Data Security Law of the People’s Republic of China, the Cybersecurity Law of the People’sRepublic of China, and the Personal Information Protection Law of the People’s Republic of China. We also execute our own multiplesecurity management systems, including Data Management Specification System, Access Control Management SpecificationInformation Security Management System, and Terminal Security Management Measures for Information Security and DataAuthorization Control. We revises, improves, implements, and supervises these systems in accordance with the needs of informationsecurity management to ensure the security of networks and data information, and to protect personal information and consumer rights.
Our information security sector provides organizational security for information security management and promote theimplementation of various security matters. The management structure consists of decision-making bodies (Information SecurityCommittee), management bodies (Information Security Management Team), and execution bodies (all employees). We strictly managethe personal information of consumers and potential consumers obtained through online channels, storing and managing sensitive datathrough measures such as encryption and de-identification. Additionally, we have established emergency mechanisms to respond todata leakage, damage, and loss incidents.
Our online and OMO sales systems have obtained national information security Level 3 certification, and we conduct annualretesting of them to ensure their ongoing security as required. In terms of technical safeguards, the systems have robust securitymeasures, including firewalls and intrusion detection, in compliance with regulations. Since the establishment and operation of ouronline channels, no significant information security risks have occurred. We will continue to improve the management systems andmeasures for information security protection, strengthen investment in information security, and ensure the security of networkinformation and consumer rights protection.
3. Analysis of Core Competitiveness
3.1 Brand Matrix Advantages
Botanee has a clear brand positioning and excellent brand shaping capabilities. Since its establishment, the Company has beendedicated to developing products for sensitive skin. After years of accumulation, it has built multiple brands centered around Winonawhich cover various areas such as soothing, sun protection, whitening, anti-aging, spot removal, and acne treatment. Among them,Winona focuses on sensitive skin care and modification, and it is the main brand that the company has long focused on and deeplycultivated. This brand has a complete product line, including skincare products, medical devices, and cosmetics. In addition to Winona,we also own other brands such as Winona Baby, AOXMED, Beforteen, Beauty Answers, Za, and PURE&MILD. These proprietarybrands have different market positioning and can cover different consumer groups. Our brand matrix has basically taken shape, thebrand hierarchy has been initially established, and brand advantages have gradually been established. Furthermore, we have cultivatedhigh brand loyalty through professional brand image building and the accumulation of private domain traffic. With excellent productquality, precise marketing strategies, the reputation of professional brands, and the exploration of new models of offline experience andonline sales, we have accumulated a group of highly loyal customers.
3.2 Sales Channel Advantages
We adhere to a strategy that integrates online and offline channels, and promote their coordinated development. Online channelshave achieved rapid growth in sales revenue through comprehensive online coverage, optimization of public domain traffic, andestablishment of private domain traffic. Online promotion and self-operated stores include official flagship stores on platforms such asTmall, Douyin, Kuaishou, Winona’s official flagship store on JD.com, and Winona’s online mall. Private domain traffic is representedby Winona counter service platform under OMO channel built within Tencent’s ecosystem. The WeChat mini program represents thecombination of public domain traffic and private domain traffic. In addition, we adopt a professional offline channel coverage strategy,focusing on sensitive skin care and emphasizing brand specialization. Offline sales mainly rely on OTC chain customers, commercial
companies, and regional distributors.
3.3 Research and Development Technology Advantages
Botanee attaches great importance to product R&D, and insists on technological innovation. With a strong R&D team and acomplete R&D system, we have established research centers in Kunming, Yunnan Province, and Shanghai, invested in establishing theBotanee Research Institute, and built research institutes and joint laboratories in Japan and France. At the end of the reporting period,we had nearly 500 comprehensive R&D personnel covering various research departments, including basic research, product and rawmaterial evaluation and screening, consumer research, process technology research, packaging development, formula research, andintegrated innovation. Leveraging the resources and advantages of the Yunnan Specialty Plant Extraction Laboratory, we focus onindependent R&D of effective ingredient preparation and sensitive skin care using Yunnan’s specialty plant extracts. We own multiplecore technologies and patents, and sales revenue generated from applying core technologies has consistently accounted for over 95% ofour main business revenue, which set a benchmark for the industry.
3.4 Product Quality Advantages
As cosmetics are daily necessities that directly contact the skin, consumers have high requirements for product safety. Ensuringproduct quality is the foundation for consumers to establish brand trust and loyalty. We focus on sensitive skin care and attach greatimportance to product quality, placing it in a prominent position. We run a comprehensive quality management system coveringproduct research and development, raw material procurement, production, logistics, and warehousing management. Our qualitymanagement system complies with certification standards of GB/T19001-2016/ISO 9001:2015 Quality Management Systems -Requirements. During the reporting period, we strictly complied with the provisions of various laws and regulations and followed aseries of technical management specifications such as GMPC and GB/T19001-2016/ISO 9001:2015 Quality Management Systems -Requirements to organize production activities, aiming to achieve comprehensive quality management.
3.5 Targeted Marketing Advantages
Our main sales channel is online. After years of internal training and external recruitment, the company has built an experiencedand highly skilled e-commerce operations management team. Through years of practice, the e-commerce operations team hasestablished a mature operating model and accumulated rich marketing experience. The company emphasizes consumer education andcollaborates closely with reputable Key Opinion Leaders (KOLs) and Key Opinion Consumers (KOCs). Through online live streaming,short videos, and other forms of intensive output, the team provides professional skincare knowledge, conveys the correct skincareconcepts, and enhances customers' skincare awareness. The operations team is keen to capture market trends and employs celebritieswhose personal image aligns well with the brand positioning to endorse the products. This cultivates focal figures who communicatewith consumers, achieving a two-way interaction between brand promotion and product sales. Through efficient informationdissemination, long-term establishment of marketing chains, coordinated online and offline efforts, and the alignment of time and space,the company leverages its established professional brand image to launch effective marketing campaigns that resonate with consumers,stimulate their desire to purchase, and achieve rapid growth in sales revenue.
3.6 Refined Information System Management Capability
We possess excellent capabilities in information system development and implementation. With a “horizontal + vertical”architecture, our information system connects different business processes of various divisions, brands, and departments, ensuringprecise management of each business aspect and providing consumers with a smooth and efficient experience. We adopt industry-leading Order Management System (OMS) and Warehouse Management System (WMS). Our “Omni-Channel Middleware System”and “End-to-End Integrated Information System Project for Supply Chain Planning” break down internal information barriers and forman integrated management system to ensure seamless business processes. Our Data Lake and Business Intelligence (BI) Projectachieves refined data collection and processing, ensuring accurate and timely data to provide reliable decision-making support. Users atall levels can access and track relevant business data and key performance indicators in real-time. The advanced information systemand refined management empower the Company in sales, operations, and management.
3.7 Operational Management Team Advantages
We run a professional, highly capable, and experienced operational management team with high operational efficiency, and haveaccumulated extensive practical management experience in such areas as cosmetics R&D, production, and sales. Recognizing thecharacteristics of the cosmetics industry, we have established a comprehensive supply chain management system covering product
R&D, raw material procurement, production organization, and product sales. We are committed to in-depth management in everyaspect of our operations, so as to respond rapidly in rapidly changing market environment.
4. Analysis of Main Business Operations
4.1 Overview
4.1.1 Review of Major Accomplishments in 2023
(1) Actively Strengthened Branding and Academic Development to Enhance Competitive Advantages
During the reporting period, we established a comprehensive marketing matrix and built a matrix-based communication platformconsisting of authoritative media, social media, and vertical media. This enabled us to achieve end-to-end communication andcollaborate with expert doctors, influential opinion leaders (KOLs), and key opinion consumers (KOCs) to conduct layered promotionand reputation marketing, precision content operations, and in-depth engagement with the target consumer group. These efforts helpedshape a professional brand image and effectively promote the products.In April 2023, Winona Research Institute, in collaboration with the Chinese Journal of Dermatology and the DermatologyProfessional Committee of the Chinese Non-Public Medical Institutions Association, hosted the 4th China Sensitive Skin Summit. Thesummit released “Insights into the Industry Trends of Pan-Sensitive Skin” in collaboration with the TMIC and launched the “2023 Pan-Sensitive Development Trend White Paper” in partnership with Tmall New Product Innovation Center. Together with DingxiangDoctor, they pioneered the concept of “Sensitive and Pan-Sensitive Care”. The summit discussed the development trends,characteristics, and care needs of sensitive skin consumers, released consumer big data analysis results, and proposed new standards forclassifying sensitive and pan-sensitive skin types. They also put forward precise skincare strategies for different types of sensitive skin,enhancing the reference value for skincare professionals and providing accurate guidance for skincare treatments.In July 2023, the 25th World Congress of Dermatology, themed “Dermatology Beyond Borders: Science, Care, Communities”,was held in Singapore. Botanee, represented by Winona brand, was invited to participate in the World Congress for the thirdconsecutive time as a representative of Chinese skincare brands. Botanee showcased China’s skin health ecosystem in the era of preciseskincare to the world. During the congress, we concurrently organized the “2023 International Skin Health Summit”, bringing togetherauthoritative dermatologists from both domestic and international communities. The summit focused on cutting-edge topics and trendsin dermatology and facilitated dialogues between Chinese and foreign experts. Through academic exchanges and intellectual collision,we demonstrated our professional strength as a leading enterprise in Chinese dermatology and embarked on a new journey in China’sskin health ecosystem in the era of precise skincare.In December 2023, the inaugural meeting of Yunnan Health Products and Cosmetics Industry Association, co-initiated by Botanee,was held in Kunming, the beautiful Spring City of Yunnan Province. Botanee was honored to be elected as the first president of theassociation. In the next phase, we will support the association by establishing 12 professional committees, including drug production,drug operation, drug supervision and management research, cosmetics and fragrances, medical devices, hospital preparations, and drugclinical trials. Leveraging the Company’s expertise and academic characteristics, we aim to further improve the management andservice capabilities of the Yunnan Health Products and Cosmetics Industry Association, enhance refinement and professionalism inserving its members, and strengthen cooperation within the industry and among associations. These efforts are geared towardspromoting standardized management in the health industry.The company has always upheld the vision to bring health and beauty to everyone and has been actively engaged in charityactivities, taking on social responsibilities. In 2023, “Winona Smile Sunshine Project”, a charity event, entered its eighth year. Duringthe reporting period, we collaborated with authoritative dermatology experts, the Yunnan Red Cross Winona Public Charity Fund, theRed Cross Society of Zhaotong City, as well as media and Winona fans, to carry out 8 free clinics in Yongren County, ChuxiongPrefecture, Lijiang City in Yunnan Province, and Shigatse City in the Tibet Autonomous Region. These activities aimed to establishthe foundation of brand value and promote the brand concept to different circles. The Yunnan Red Cross Winona Charity Foundationofficially launched the Skin Cancer Assistance Project named “Winona Smile Sunshine Project” in March 2023. It provides diseaseassistance and product care to patients with severe skin diseases identified during the free clinics, and establishes a dedicated assistance
program for skin cancer, thus realizing a complete cycle of charity. In addition, we actively conduct academic promotion and offlinedevelopment, including themed charity and academic promotion activities such as the “525 Scientific Skincare Week”, the “WinonaSecond Youth Campus Tour”, and the “919 Acne Week”. These activities deepen the brand’s professional image, resonate withconsumers, and enhance consumer identification with the brand.
(2) Expanded Main Brands and Improved Efficacy Matrix
Our main brand Winona focuses on the sensitive skin care field, maintaining the image of a benchmark brand and adhering to“comfort-sensitive” as the foundation, continuously expanding the product strategy of “Sensitive PLUS”. In 2023, during the “Double11” shopping festival, Winona successfully ranked among the top 5 in the skincare category on Tmall, making it the only domesticbrand to be listed among the top 10 in the skincare category for 7 consecutive years. During the reporting period, the core flagshipproducts of Winona remained strong. The two super-popular products, Moisturizing Special Cream and Sunscreen Lotion, maintainedstable performance. Winona Comforting Moisturizing Cream, a flagship product that spans multiple cycles, topped the Tmall “Double11” sensitive cream category for the second consecutive year. Winona Clear Sunscreen Lotion achieved excellent results by rankingfirst on the Tmall Sunscreen Cream annual popularity list. The sunscreen series actively expanded into more usage scenarios andachieved both high brand exposure and sales volume through collaborations with well-known coffee brand Manner and offlineadvertising. During the reporting period, Winona underwent brand self-diagnosis and refinement, promoted brand and visual upgrades,and officially announced Chinese female fencer and world champion Sun Yiwen as the brand ambassador. In May 2023, coincidingwith Disney’s 100th anniversary, Winona successfully collaborated with Disney to launch two limited edition Disney gift boxes, whichsold out within 4 hours. During the reporting period, Winona strengthened its presence in offline channels, including OTC pharmacychains and mass-market channels such as KA and duty-free shops. We steadily explored the model of offline flagship stores, expandedthe scale of various channels, increased offline presence, and enhanced brand and product exposure, reaching end consumers throughmultiple dimensions.During the reporting period, Winona brand evolved from focusing on sensitive skin repair to Sensitive PLUS, and introduced newBrightening Serum series for sensitive skin whitening. From its stunning debut at the 25th World Congress of Dermatology in July2023 to the scientific validation of the sensitive skin whitening solution in Winona Brightening Serum series, and the explosiveperformance during the 2023 “Double 11” shopping festival, Winona successfully seized the opportunity in the emerging field ofsensitive skin whitening. Winona Brightening Serum series achieved cumulative sales of over 100 million on the Douyin platform andrepeatedly topped the brand rankings in the beauty and skincare category. The success of Winona Brightening Serum and WinonaRadiant Freeze-Dried Mask series on the Douyin platform marked the continuous expansion of Winona from a single flagship productto a matrix of star products. It not only represents a breakthrough and rebirth in the field of sensitive skin repair but also serves as thefoundation for advanced research in sensitive skin PLUS.
(3) Actively Incubated New Brands to Create a Multi-Brand Matrix
In April 2023, Botanee focused on the professional skincare brand for baby and infant skin health, Winona Baby, and collaboratedwith the China Maternal and Child Health Association’s Pediatric Skin Professional Committee to host the "Forum for PromotingChildren’s Skin Health and the Inauguration Ceremony of the Chinese Pediatric Atopic Dermatitis Expert Committee" in Shanghai.The expert committee aims to focus on the field of pediatric atopic dermatitis (AD), improve the effectiveness and standardization ofdiagnosis and treatment for children with AD, promote the development of pediatric dermatology in China, and create a platform foroutstanding experts in the field of pediatric dermatology in China to share and discuss academic issues related to children’s skin health,providing authoritative skincare solutions and guidance for Chinese baby skin. During the reporting period, the company continuouslyenriched the product series of the Winona Baby brand to meet the various needs of infants and young children, including bathing,moisturizing, and sun protection. The Winona Baby brand achieved remarkable results and industry recognition during the reportingperiod. The brand’s ranking in the baby and child skincare category on Tmall rose two places to the top five. It ranked among the topthree in the Tmall "Double 11” sales ranking for the baby and child skincare category and received the Tmall “Double 11” ExcellentBaby and Child Skincare Award. The Winona Baby brand also received the Jingdong Mother and Baby 2023 Annual ConsumerFavorite Brand Award. In the industry, Winona Baby was ranked second in the baby and child skincare products’ efficacy category by“Mother and Baby Industry Observation” and received the “CBME China Pregnancy, Baby, and Child Exhibition - Annual NewMomentum Brand Award”. During the reporting period, the Winona Baby brand actively captured market share in the offline marketfor baby and infant skin health. By 2023, the number of offline stores and terminals had exceeded 5,000, including coverage of 985
terminal hospitals. It covered nearly 4,000 Watsons stores and ranked fourth in the Watsons baby and child skincare category. Thesolid and strong product development and brand operation capabilities of the company and the Winona Baby brand were evident duringthe reporting period.During the reporting period, the company internally incubated the first high-end professional anti-aging technology brand,AOXMED. The AOXMED brand's market debut year began with a focus on evidence-based medicine and cutting-edge research. Itcentered around the core patented ingredient “MLYAAT-1002 Multi-dimensional Anti-aging Essence” and its multi-target effects inthe field of anti-aging, as well as its core advantages in comprehensive anti-aging. The brand aimed to create a full-channel productmatrix from medical aesthetics to home aesthetics, meeting the demands for skin rejuvenation in various scenarios. During thereporting period, the AOXMED brand collaborated strategically with medical aesthetics and medical beauty institutions, expanded itsreach through online channels, and invested in high-end displays and value-added services in top domestic department stores. Itcontinuously built a medical beauty-grade brand for anti-aging with hardcore efficacy, professional quality, and a high-end image. TheAOXMED brand won several fashion and beauty awards during the reporting period, including the “VOGUE Beauty Awards 2023China Brand Special Award for Formula Research and Development”. The AOXMED brand will continue to focus on creatingeffective and safe professional beauty solutions and providing an ultimate skincare experience. It will rely on cutting-edge scientificresearch and advanced formula technology as the foundation of the brand, focusing on multidimensional skin rejuvenation, linkingmedical aesthetics with home aesthetics to create a new concept of “comprehensive anti-aging” for professional anti-aging technologybrands.In August 2023, the company held the “Beauty Transformation through ‘Intelligent’ Metamorphosis” new product launch event inShanghai, introducing its new acne treatment brand, Beforteen. Beforteen brand relies on plant technology and industry-academia-research collaboration. It utilizes the advantages of Yunnan’s natural plant resources, extracting core active ingredients from highlandplants unique to Yunnan and incorporating them into Beforteen products. The brand combines artificial intelligence technology withacne diagnosis and treatment, proposing a model and concept of “graded customization and precise anti-acne”. Beforteen uses AItechnology to classify acne conditions and provides customized skincare solutions for different levels of acne, benefiting ordinary acnesufferers. The company and the Beforteen brand jointly explore the integration of AI technology and the greater health industry,opening a new era of “AI+ skincare”. The Beforteen brand follows the guideline of integrated diagnosis and treatment, exploring acomprehensive solution for acne skin problems through a combination of medication, efficacy skincare products, and functional food.It targets the 18-30 age group with acne-prone skin, with a focus on new platforms such as Bilibili, Douyin, and Xiaohongshu. Duringthe reporting period, the search term “graded acne treatment Beforteen” created by the Beforteen brand achieved exposure of over 280million times, and the brand's official platforms accumulated over 200,000 followers.
(4) Investment and Mergers for Ecosystem Expansions
During the reporting period, Botanee continuously expanded its ecosystem through investment to meet the personalized anddiverse needs of more consumers. Adhering to the investment logic of “regional leadership, complementary positioning, channelpenetration, and technological innovation”, the company aimed to achieve comprehensive coverage across regions, multiple productcategories, and a wide range of target consumers. At the same time, investment and mergers helped the company navigate throughcycles, seize trends and opportunities, balance resources across different business areas and regions, and diversify the company'ssources of revenue. During the reporting period, the company successfully acquired Yuejiang Investment, obtaining two brands,PURE&MILD and Za, which filled the gaps in Botanee’s mass skincare and makeup portfolio. Investment and mergers are externalactions that requires our strong channels, R&D capabilities, and synergy between internal and external brand development to ensure thesuccessful operation and integration of the acquired targets. The company will continue to prioritize the independent development logicof each brand, abandoning standardized transformation approaches, respecting brand diversification, and preserving the communicationfoundation of existing brands, leaving ample room for the growth of each brand. Simultaneously, the company will share research anddevelopment fruits, integrate its advanced technology with the concept of natural skincare in sub-brands, and provide comprehensiveoperational support and leverage channel resources to facilitate brand expansion.
(5) Continuous Research and Development Innovation to Enhance Competitive Advantage
During the reporting period, we fully leveraged the leading role of Botanee Research Institute. Relying on the Yunnan SpecialtyPlant Extraction Laboratory, we adopted a research and development model that prioritizes independent innovation and integratesindustry, academia, and research. We closely collaborated with cutting-edge laboratories in France and Japan to conduct in-depth
research on dermatological targets and mechanisms, actively integrating global scientific research resources, and engaging in extensivecooperation and exchange with renowned domestic and international universities, research institutes, and experts. These effortsexpanded our research horizons and elevated our scientific research capabilities, marking the first step of our globalization strategy inthe “industry, academia, research, and medicine" realm and technology innovation. With an innovative spirit and an open attitude, westrengthen international scientific cooperation and promotes the development of the skincare industry through a global perspective.Over the years, we have independently developed and mastered more than 10 key core technologies at the domestic leading level.We are committed to providing consumers with safe and effective comprehensive solutions for skincare problems based ondermatological principles. During the reporting period, we developed a systematic R&D framework, optimizing and improving sevenfunctional modules: Efficacy Cosmetics R&D Center, Innovative Raw Material R&D Center, Functional Food R&D Center, SkinHealth Research Institute, Medical Device R&D Department, Special Plant Screening Research Department, and TechnologyAchievement Transformation Department.Since the establishment of Yunnan Specialty Plant Extraction Laboratory in 2021, we have focused on industrialization,addressing industry needs, integrating high-quality innovative resources from both domestic and international sources, and focusing onthe development of functional cosmetics, functional food, and pharmaceuticals based on Yunnan’s specialty plants. It has madecontinuous breakthroughs in core key technologies, promoted the transformation and sharing of research outcomes, and graduallydeveloped into a new driving force for fostering and developing Yunnan’s biopharmaceutical industry. During the reporting period, theYunnan Specialty Plant Extraction Laboratory, in collaboration with the Botanee Research Institute, supported the company indeveloping new products such as sunscreens, high-end anti-aging products, acne care, and infant skincare. We obtained 73 registrationsfor general cosmetics and 6 administrative licenses for special cosmetics, and were granted 14 invention patents and 30 utility modelpatents. Additionally, we published 83 papers, including 66 SCI papers, and formulated and released 55 group standards. Our internallyincubated acne treatment brand Beforteen creatively combines AI intelligent diagnosis and online doctor prescriptions, exploring atreatment path for acne skin problems through a comprehensive solution of “medication + efficacy skincare products + functionalfood”. It pioneered the professional scientific research of acne AI diagnosis technology from scratch, filling a research gap.
During the reporting period, Botanee achieved national drug administration filing and approval for three new raw materials:
extract of Ludwigia adscendens, fermented product of Candida bombicola/glucose/Prinsepia utilis oil, and fermented product ofCandida bombicola/glucose/coconut oil/Prinsepia utilis oil. The approved quantity ranked among the top in the industry nationwide.Building upon its selection as the 37th “National Standard Sample Laboratory for Natural Products”, our four standard samples,including Ginsenoside CK and Curcumin, have been included in the national standard sample development program after expertevaluation. This initiative aims to gradually establish a standard sample system of Yunnan’s specialty plant materials for functionalcosmetics. The company has invested in the establishment of public testing platforms in Kunming, Yunnan Province, and ShanghaiCity. During the reporting period, we obtained dual qualifications from the China National Accreditation Service for ConformityAssessment (CNAS) and the China Metrology Accreditation (CMA), becoming a professional third-party public testing institution withthe capability to provide local and remote testing and analysis services for efficacy cosmetics and food products of Yunnan's planthealth-related enterprises in both locations.
(6) Digital Transformation Empowered Rapid Development
Adhering to the principles of “setting standards and establishing a central platform”, we strategically initiated our digitaltransformation journey to adapt to future digital demands and build an enterprise organization accordingly. During the reporting period,our self-developed “Digital Collaboration Platform for Production-Supply-Sales” project integrated data throughout the entire valuechain, including product research and development, supply chain, sales, and marketing. The objective is to achieve effective memberand product lifecycle management, rational resource integration, and maximize company efficiency. Through continuous optimizationand upgrading, we have established an efficient supply chain management system, which includes complete systems such asprocurement management system (SRM), product lifecycle management system (PLM), enterprise resource planning system (ERP),order management system (OMS), and warehouse management system (WMS). Additionally, we launched an end-to-end supply chainplanning management system during the reporting period. By constructing a supply network model, we achieved integrated decision-making for demand, inventory, replenishment, allocation, production, and material supply chain planning. Agile sensing of demandchanges, coupled with rapid response within the supply chain, helped shorten planning cycles and facilitated the transformation of thesupply chain into an information-driven, data-oriented, and intelligent system.
During the reporting period,we introduced the “Single Sign-On (SSO) platform”, which, combined with data file encryption andbackup systems, enhanced personal information management and maintenance capabilities for consumers and potential consumersacross all channels. Furthermore, encryption, anonymization, storage, and other algorithmic procedures were optimized, andemergency mechanisms were updated to address potential risks such as data leaks, damage, and loss. We also released the “DataSecurity Management Specification” during the reporting period, which establishes a hierarchical management and access restrictionsystem for internal data to ensure appropriate protection of data at different levels.
4.1.2 Overview of Performance in 2023
During the reporting period, Botanee achieved a total operating revenue of CNY5,522,168,300, which represented a year-on-yearincrease of approximately 10.14%. Net profit attributable to our shareholders was CNY756,795,000, a decrease of approximately 28.02%compared to the previous year. The net profit attributable to shareholders of the listed company, which excludes CNY618,058,800 ofnon-recurring gains and losses, a decrease of approximately 35.20% compared with the previous year. The gross profit margin for salesreached approximately 73.90%, a decrease of 1.31 percentage points over the previous year. The net profit margin attributable to ourshareholders for sales was approximately 13.71%, a decrease of 7.26 percentage points over the previous year. During the reportingperiod, we achieved double-digit growth in operating revenue, but other key performance indicators fluctuated. This was mainly due tothe significant impact of uncertain factors and unstable expectations in the domestic economic environment during the reporting period.For more details, please refer to “2.5 Cash Flow” in “2. Revenue and Costs” under Section III “Main Business Analysis” of this report.
4.1.3 Detailed Performance in 2023
(1) Operating Revenue
Unit: CNY
| 2023 | 2022 | YoY increase/decrease | |||
| Amount | Ratio in operating revenue | Amount | Ratio in operating revenue | ||
| Main business revenue | 5,501,620,400 | 99.63% | 4,997,756,000 | 99.68% | 10.08% |
| Other business revenue | 20,547,900 | 0.37% | 16,117,700 | 0.32% | 27.49% |
| Total | 5,522,168,300 | 100.00% | 5,013,873,700 | 100.00% | 10.14% |
(2) Main Business Revenue
Unit: CNY
| Channel | Sales model | 2023 | 2022 | YoY increase/ decrease | ||
| Amount | Ratio of main business revenue | Amount | Ratio of main business revenue | |||
| Online sales | Self-operation | 2,712,365,800 | 49.31% | 2,694,882,600 | 53.92% | 0.65% |
| Distribution and consignment | 839,820,700 | 15.26% | 870,625,800 | 17.42% | -3.54% | |
| Subtotal | 3,552,186,500 | 64.57% | 3,565,508,400 | 71.34% | -0.37% | |
| OMO sales | Self-operation (online and offline) | 522,685,800 | 9.50% | 473,893,000 | 9.48% | 10.30% |
| Offline sales | Distribution and consignment | 1,426,748,100 | 25.93% | 958,354,600 | 19.18% | 48.87% |
| Total | Self-operation | 3,235,051,600 | 58.80% | 3,168,775,600 | 63.40% | 2.09% |
| Distribution and consignment | 2,266,568,800 | 41.20% | 1,828,980,400 | 36.60% | 23.93% | |
Note: During the reporting period, we added OMO channel sales based on business development, and adjusted comparativefigures for the same period in 2022 based on the same caliber. The same for below.
(3) Sales of Own Brand Products
Unit: CNY
| Category | Amount (CNY) | Ratio of main business revenue | Average selling price in the reporting period (CNY) | Average selling price in the same period of the previous year (CNY) |
| Skincare products | 4,869,891,500 | 88.52% | 42.30 | 42.98 |
| Medical devices | 463,107,600 | 8.42% | 98.83 | 85.58 |
| Cosmetics | 168,621,300 | 3.06% | 29.72 | 50.23 |
Total
| Total | 5,501,620,400 | 100% |
Note: Unit selling price = sales revenue /sales volume of regular products (excluding gifts and trial samples)
(4) Online Sales Performance in 2023
Unit: CNY
| Platform | Sales model | 2023 | 2022 | YoY increase/ decrease over the previous year | ||||
| Amount | Ratio of online channel revenue | Ratio of main business revenue | Amount | Ratio of online channel revenue | Ratio of main business revenue | |||
| Third-party platforms | Self-operation, distribution, and consignment | 3,488,638,900 | 98.21% | 63.41% | 3,525,662,100 | 98.88% | 70.55% | -1.05% |
| Self-built platforms | Self-operation | 63,547,600 | 1.79% | 1.16% | 39,846,300 | 1.12% | 0.79% | 59.48% |
| Total | 3,552,186,500 | 100.00% | 64.57% | 3,565,508,400 | 100.00% | 71.34% | -0.37% | |
(5) Platforms with a Main Business Revenue Share of 5% or More in the Online Channel and Their Sales Performance in 2023
| Platform | Store or client |
| Third-party platform - Alibaba | Tmall Winona flagship store |
| Tmall Winona Botanee store | |
| Tmall Winona Baby Maternal and Child flagship store | |
| Tmall Winona Qiumei store | |
| Tmall AOXMED official flagship store | |
| Tmall Beauty Answers flagship store | |
| Tmall Beforteen flagship store | |
| Tmall Za official flagship store | |
| Tmall PURE&MILD official flagship store | |
| Tmall Za overseas flagship store | |
| Zhejiang Tmall Technology Co., Ltd. | |
| Alibaba Health Pharmacy Chain Co., Ltd. | |
| Zhejiang Haochao Network Technology Co., Ltd. | |
| Third-party platform - Douyin | Douyin Winona official flagship store |
Douyin Winona flagship store
| Douyin Winona flagship store | |
| Douyin Winona Baby Maternal and Child flagship store | |
| Douyin Winona Beixiaoni store | |
| Douyin Winona medical dressings flagship store | |
| Douyin Za official flagship store | |
| Douyin Za Yuehui beauty and makeup flagship store | |
| Douyin PURE&MILD official flagship store | |
| Douyin AOXMED official flagship store | |
| Third-party platform - Vipshop | Vipshop (China) Co., Ltd. |
| Third-party platform - JD | Winona JD official flagship store |
| Winona JD self-operated flagship store | |
| Winona JD Health official flagship store | |
| JD Beauty Answers flagship store | |
| JD Za flagship store | |
| Za JD self-operated flagship store | |
| JD PURE&MILD flagship store | |
| PURE&MILD JD self-operated flagship store | |
| Beijing Jingdong Century Trading Co., Ltd. | |
| Beijing Jingdong Hongjian Health Co., Ltd. |
Unit: CNY
| Sales model | 2023 | 2022 | YoY increase/ decrease compared to the previous year | |||
| Amount | Proportion of main business revenue | Amount | Proportion of main business revenue | |||
Third-party platform -Alibaba
| Third-party platform - Alibaba | Self-operation, and consignment | 1,762,373,600 | 32.03% | 2,060,374,900 | 41.23% | -14.46% |
| Third-party platform - Douyin | Self-operation | 631,456,000 | 11.48% | 429,154,300 | 8.59% | 47.14% |
Third-party platform -Vipshop
| Third-party platform - Vipshop | Consignment | 306,636,200 | 5.57% | 301,778,100 | 6.04% | 1.61% |
| Third-party platform - JD | Self-operation, and consignment | 374,272,000 | 6.80% | 356,445,200 | 7.13% | 5.00% |
| Total | 3,074,737,800 | 55.88% | 3,147,752,500 | 62.99% | -2.32% | |
(6) Operational Data of Core Stores in the Online Self-operated Channel in 2023
During the reporting period, the sales of our top five online self-operated stores accounted for approximately 64.97% of our onlinechannel sales revenue and approximately 84.75% of our online self-operated channel sales revenue, maintaining stability over the sameperiod last year:
| Self-operated store | Amount (CNY) | Proportion of online channel revenue | Order quantity in 2023 | Average consumption frequency per person in 2023 (times) | Average order value in 2023 (CNY) | Two-year repurchase rate (note) |
Tmall Winona flagshipstore
| Tmall Winona flagship store | 1,527,324,600 | 43.00% | 11,442,700 | 2.37 | 372.05 | 34.65% |
Douyin Winona officialflagship store
| Douyin Winona official flagship store | 506,251,700 | 14.25% | 4,311,300 | 1.34 | 190.54 | 17.00% |
| Winona JD official flagship store | 95,934,400 | 2.70% | 1,032,000 | 1.87 | 208.28 | 40.91% |
| Winona Kuaishou beauty and makeup flagship store | 93,552,500 | 2.63% | 608,800 | 1.37 | 282.58 | 20.58% |
| Douyin Winona flagship store | 84,935,500 | 2.39% | 555,600 | 1.16 | 221.71 | 10.93% |
| Total | 2,307,998,700 | 64.97% |
Note: The two-year repurchase rate refers to the proportion of customers who made more than one purchase during a continuoustwo-year period compared to the total number of customers during that period.
(7) Operational Data of OMO Channels in 2023
| Category | 2023 | 2022 | YoY increase/ decrease | ||||
| Amount | Proportion of main business revenue | Sales gross profit margin | Amount | Proportion of main business revenue | Sales gross profit margin | ||
| Skincare products | 501,549,800 | 9.12% | 75.41% | 447,240,200 | 8.95% | 74.58% | 12.14% |
| Medical devices | 113,802,00 | 0.20% | 84.95% | 17,949,800 | 0.36% | 84.65% | -36.60% |
| Cosmetics | 9,755,800 | 0.18% | 61.12% | 8,703,100 | 0.17% | 74.28% | 12.10% |
| Total | 522,685,800 | 9.50% | 75.35% | 473,893,100 | 9.48% | 74.96% | 10.30% |
1) The OMO online self-operated retail business mainly refers to our product sales through its self-built online platforms. Duringthe reporting period, the operating revenue of our self-built Winona counter service platform was CNY484,854,000, an increase ofCNY22,807,000 over the previous year and showing a growth rate of approximately 4.94%. At the end of the reporting period, thenumber of registered users on our self-built OMO channel online sales platform was approximately 2.5779 million, with approximately784,800 new registered users during the reporting period:
| OMO online platform | Amount (CNY) | Proportion of main business revenue in 2023 | Order quantity in 2023 | Average consumption frequency per person in 2023 (times) | Average order value in 2023 (CNY) | Two-year repurchase rate (note) |
| Winona Counter Service Platform | 484,854,000 | 8.81% | 828,400 | 2.23 | 1,562.39 | 51.93% |
Note: The two-year repurchase rate refers to the proportion of customers who made more than one purchase during a continuoustwo-year period compared to the total number of customers during that period.
2) The OMO offline self-operated retail business primarily refers to the company's product sales through leased physical stores.During the reporting period, the company opened 50 new OMO offline self-operated stores and closed 4 stores, resulting in a total of123 stores by the end of the reporting period. The OMO offline self-operated model generated a revenue of CNY37,831,800,accounting for approximately 0.69% of the main business revenue, showing significant year-on-year growth. The offline OMO self-operated retail business is currently in a rapid development stage, but its impact on the company's overall performance is relatively
small.
Changes in the OMO offline self-operated stores during the reporting period are as follows:
| Region | Number of self-operated stores at the beginning of the reporting period | Number of new self-operated stores | Number of closed self-operated stores | Number of self-operated stores at the end of the reporting period | Contract leased area of OMO stores at the end of the reporting period (m2) |
| Southwest China | 17 | 30 | 1 | 46 | 2,602.33 |
| East China | 17 | 4 | 2 | 19 | 1,040.49 |
| Central China | 16 | 4 | 1 | 19 | 770.85 |
| North China | 12 | 2 | 14 | 635.43 | |
| South China | 8 | 2 | 10 | 540.53 | |
| Northwest China | 7 | 4 | 11 | 479.07 | |
| Northeast China | 4 | 4 | 300.06 | ||
| Total | 77 | 50 | 4 | 123 | 6,368.76 |
During the reporting period, the top five OMO offline self-operated stores in terms of revenue are as follows:
Unit: CNY
| Store | Address | Property ownership | Revenue |
| Winona store Kunming Changshui Airport | F3CA29 Area, Terminal of Kunming Changshui International Airport, Kunming City, Yunnan Province | Leased property | 297.2200 |
| Winona counter at Hangzhou Intime Department Store (West Lake) | Shop 107, 1st Floor, Intime Department Store (West Lake), Shangcheng District, Hangzhou City, Zhejiang Province | Leased property | 228.1300 |
| Winona Chengdu Yiduo Huifu Store | No. 201-1, 2nd Floor, Unit 1, Building 1, No. 2 Kehua Middle Road, Wuhou District, Chengdu City, Sichuan Province, China. | Own property | 178.4900 |
| AOXMED counter at SAGA International Shopping Mall Xian | 1st Floor, SAGA International Shopping Center, No. 123 Chang’an Middle Road, Yanta District, Xi’an City, Shaanxi Province | Leased property | 161.9600 |
| AOXMED counter at Hanguang Department Store Beijing | 1st Floor, Hanguang Department Store, No. 176 Xidan North Street, Xicheng District, Beijing City | Leased property | 153.06 |
Note: Property ownership status marked as “leased” includes various leasing models such as rental and profit-sharing.
(8) Operational Data of Offline OTC Distribution Channels in 2023
1) OTC distribution channels refer to our direct sales of products to OTC chain customers. During the reporting period, the OTCdistribution channel achieved a revenue of CNY816,118,100, accounting for approximately 14.83% of the main business revenue.
Unit: CNY
| Category | 2023 | 2022 | YoY increase/ decrease | ||||
| Amount | Proportion of offline channel revenue | Sales gross profit margin | Amount | Proportion of offline channel revenue | Sales gross profit margin | ||
| Skincare products | 575,914,400 | 40.37% | 81.72% | 328,254,100 | 34.25% | 81.51% | 75.45% |
Medical devices
| Medical devices | 236,018,100 | 16.54% | 74.33% | 155,317,900 | 16.21% | 75.43% | 51.96% |
| Cosmetics | 4,185,600 | 0.29% | 74.42% | 7,834,400 | 0.82% | 81.47% | -46.57% |
Total
| Total | 816,118,100 | 57.20% | 79.54% | 491,406,400 | 51.28% | 78.50% | 66.08% |
2) The top five OTC distribution clients in terms of revenue during the reporting period were as follows:
Unit: CNY
| No. | Client | 2023 | 2022 | YoY increase/ decrease | ||
| Amount | Proportion of offline channel revenue | Amount | Proportion of offline channel revenue | |||
| 1 | Client 1 | 223,571,600 | 15.67% | 168,634,700 | 17.60% | 32.58% |
| 2 | Client 2 | 91,236,200 | 6.39% | 75,014,500 | 7.83% | 21.62% |
| 3 | Client 3 | 88,984,700 | 6.24% | 71,417,300 | 7.45% | 24.60% |
| 4 | Client 4 | 38,368,700 | 2.69% | 25,592,600 | 2.67% | 49.92% |
| 5 | Client 5 | 34,878,900 | 2.44% | 20,527,600 | 2.14% | 69.91% |
| Total | 477,040,100 | 33.43% | 361,186,700 | 37.69% | 32.08% | |
4.2 Revenue and Costs
4.2.1 Composition of Operating Revenue
Overview of our operating revenue
Unit: CNY
| 2023 | 2022 | YoY increase/ decrease | |||
| Amount | Percentage of operating revenue | Amount | Percentage of operating revenue | ||
| Total operating revenue | 5,522,168,263.00 | 100% | 5,013,873,729.44 | 100% | 10.14% |
| By industry | |||||
| Daily chemical industry | 5,501,620,351.02 | 99.63% | 4,997,756,008.94 | 99.68% | 10.08% |
| Services and others | 20,547,911.98 | 0.37% | 16,117,720.50 | 0.32% | 27.49% |
| By product | |||||
| Skincare products | 4,869,891,463.93 | 88.19% | 4,557,155,815.09 | 90.89% | 6.86% |
| Medical devices | 463,107,605.63 | 8.39% | 387,454,279.67 | 7.73% | 19.53% |
| Cosmetics | 168,621,281.46 | 3.05% | 53,145,914.18 | 1.06% | 217.28% |
| Services and others | 20,547,911.98 | 0.37% | 16,117,720.50 | 0.32% | 27.49% |
| By region | |||||
| Chinese Mainland | 5,510,158,519.51 | 99.78% | 5,011,459,929.77 | 99.95% | 9.95% |
| Overseas | 12,009,743.49 | 0.22% | 2,413,799.67 | 0.05% | 397.55% |
| By sales model | |||||
| Online channel product sales | 3,552,186,453.05 | 64.33% | 3,565,508,392.14 | 71.12% | -0.37% |
| OMO channel product sales | 522,685,816.23 | 9.47% | 473,893,052.65 | 9.45% | 10.30% |
| Offline channel product sales | 1,426,748,081.74 | 25.84% | 958,354,564.15 | 19.11% | 48.87% |
| Offline channel services and Others | 20,547,911.98 | 0.37% | 16,117,720.50 | 0.32% | 27.49% |
4.2.2 Industries, Products, Regions, and Sales Models Accounting for 10% or More of Our Operating Revenue or OperatingProfit
? Applicable □ N/A
Unit: CNY
| Operating revenue | Operating costs | Gross profit margin | YoY increase/ decrease in operating revenue | YoY increase/ decrease in operating costs | YoY increase/decrease in gross profit margin | |
| By industry | ||||||
| Daily chemical industry | 5,501,620,351.02 | 1,432,514,965.73 | 73.96% | 10.08% | 16.08% | Decreased by 1.35% |
| By product | ||||||
| Skincare products | 4,869,891,463.93 | 1,282,695,510.54 | 73.66% | 6.86% | 11.74% | Decreased by 1.15% |
| By region | ||||||
| Chinese Mainland | 5,510,158,519.51 | 1,437,326,140.13 | 73.91% | 9.95% | 15.67% | Decreased by 1.29% |
| By sales model | ||||||
| Online channel product sales | 3,552,186,453.05 | 1,021,681,010.35 | 71.24% | -0.37% | 9.10% | Decreased by 2.50% |
| Offline channel product sales | 1,426,748,081.74 | 282,011,143.65 | 80.23% | 48.87% | 57.67% | Decreased by 1.10% |
In the case of adjustments to the statistical basis of our main business data during the reporting period, our most recent one-yearmain business data adjusted according to the end-of-period basis.
□ Applicable ? N/A
| Product name | Production volume | Sales volume | Revenue achievement | Price trend during the reporting period | Reasons for changes |
| Skincare products (finished products, including gifts and trial samples) | Approximately 319.75 million standard boxes/units | Approximately 209.05 million standard boxes/units | During the reporting period, we generated CNY4,869,891,463.93 of revenue from skincare products, representing an increase of around 6.86% over the same period last year. | The average selling price of our skincare products during the reporting period was around CNY42.30. | The average selling price experienced certain fluctuations within a certain range due to the continuous changes in the market demand for skincare products in terms of categories, forms, and capacities, as well as the impact of the changes in the sales volume and proportion of popular products during periodic promotional activities. |
Revenue or net profit generated from overseas operations as a percentage of our audited revenue or net profit for the most recentfiscal year exceeding 10%.
□Yes ?No
4.2.3 Whether Our physical sales revenue greater than service revenue
?Yes □No
| Industry | Item | Unit | 2023 | 2022 | YoY increase/ decrease |
| Daily chemical industry | Sales volume | Ten thousand standard boxes/units | 22,905 | 21,751 | 5.31% |
| Production volume | Ten thousand standard boxes/units | 33,404 | 30,225 | 10.52% | |
| Inventory volume | Ten thousand standard boxes/units | 23,694 | 25,242 | -6.13% |
Note: The sales volume includes the quantity of finished products released from inventory, which is accounted for in our mainbusiness cost and period expenses; the production volume includes the quantity of finished products and semi-finished productsreceived into inventory through in-house production, commissioned manufacturing, and OEM production; the inventory volumeincludes the closing quantity of all material categories accounted for in “inventory” item in our accounting.Explain the reasons for year-on-year changes exceeding 30%:
□ Applicable ? N/A
4.2.4 Fulfillment of significant sales contracts and significant procurement contracts signed by the company as of the end of thereporting period
□ Applicable ? N/A
4.2.5 Composition of Operating Costs
Industry:
Unit: CNY
| Industry | Item | 2023 | 2022 | YoY increase/ decrease | ||
| Amount | Percentage of operating costs | Amount | Percentage of operating costs | |||
| Daily chemical industry | In-house production (direct materials) | 264,031,331.36 | 18.32% | 202,936,146.24 | 16.33% | 30.11% |
| Daily chemical industry | In-house production (direct labor) | 7,365,687.84 | 0.51% | 5,788,615.77 | 0.47% | 27.24% |
| Daily chemical industry | In-house production (manufacturing expenses and others) | 51,811,329.44 | 3.59% | 28,764,637.74 | 2.30% | 80.12% |
| Daily chemical industry | Commissioned manufacturing | 797,384,629.16 | 55.32% | 782,666,746.87 | 62.96% | 1.88% |
| Daily chemical industry | OEM procurement, external material purchases | 139,135,835.33 | 9.65% | 51,415,759.11 | 4.14% | 170.61% |
| Daily chemical industry | Logistics and transportation expenses | 172,786,152.60 | 11.99% | 162,471,016.56 | 13.07% | 6.35% |
| Services and others | Service and other costs | 8,877,464.88 | 0.62% | 9,004,032.32 | 0.72% | -1.41% |
Other notes: none.
4.2.6 Changes in the Scope of Consolidation during the Reporting Period
?Yes □No
Please refer to “9. Changes in the Scope of Consolidation” under Section X of this report for details.
4.2.7 Significant Changes or Adjustments in Business, Products, or Services during the Reporting Period
□ Applicable ? N/A
4.2.8 Major Clients and Major Suppliers
Information on our major clients:
Total sales amount of the top five clients (CNY)
| Total sales amount of the top five clients (CNY) | 1,058,690,294.17 |
| Percentage of total annual sales from the top five clients | 19.18% |
| Percentage of related party sales in the total sales amount of the top five clients | 0.00% |
Information on our top 5 clients:
| No. | Client | Sales amount (CNY) | Percentage of total annual sales |
| 1 | Client 1 | 306,659,910.08 | 5.55% |
| 2 | Client 2 | 277,053,816.92 | 5.02% |
| 3 | Client 3 | 223,571,647.41 | 4.05% |
| 4 | Client 4 | 146,712,697.08 | 2.66% |
| 5 | Client 5 | 104,692,222.68 | 1.90% |
| Total | 1,058,690,294.17 | 19.18% |
Additional information on major clients: The statistics do not include sales from our online self-operated stores or OMO self-builtstores, but only include the top five distribution clients.Information on our major suppliers:
| Total purchase amount from the top five suppliers (CNY) | 781,512,897.74 |
| Percentage of total annual purchases from the top five suppliers | 49.97% |
| Percentage of related party purchases in the total purchase amount from the top five suppliers | 0.00% |
Information on our top 5 suppliers:
| No. | Supplier | Purchase amount (CNY) | Percentage of total annual purchases |
| 1 | Supplier 1 | 306,784,487.29 | 19.62% |
| 2 | Supplier 2 | 186,444,121.24 | 11.92% |
| 3 | Supplier 3 | 108,869,166.92 | 6.96% |
| 4 | Supplier 4 | 104,898,787.67 | 6.71% |
| 5 | Supplier 5 | 74,516,334.62 | 4.76% |
| Total | 781,512,897.74 | 49.97% |
Additional information on major suppliers: none.
4.3 Expenses
Unit: CNY
| 2023 | 2022 | YoY increase/ decrease | Significant dhanges | |
| Selling expenses | 2,609,676,656.49 | 2,047,880,755.09 | 27.43% | The increase in selling expenses during the reporting period was mainly attributed to our continued investment in brand promotion, personnel costs, and e-commerce channel expenses. The growth rate of selling expenses slightly exceeded the growth rate of operating income, which was primarily due to increased marketing, advertising, and customer acquisition expenses aimed at enhancing brand awareness during the reporting period. |
| Administrative expenses | 413,202,672.03 | 343,044,255.35 | 20.45% | The increase in administrative expenses is mainly attributed to the growth in our scale, resulting in increased costs for management personnel and |
other administrative expenses. The growth inadministrative expenses during the reporting periodis in line with our scale expansion.
| other administrative expenses. The growth in administrative expenses during the reporting period is in line with our scale expansion. | ||||
| R&D expenses | 298,817,308.11 | 254,698,441.37 | 17.32% | The increase in R&D expenses was primarily due to the smooth progress of our R&D activities. Leveraging the resources and advantages of Yunnan Specialty Plant Extraction Laboratory and Botanee Research Institute, we have further invested in research institutes and joint laboratories in Japan and France, and carried out multidimensional and in-depth research projects, including fundamental research on specialty plants, innovative material development, material selection and development, efficacy cosmetics research, functional food research, medical device research, and packaging development. Our R&D investment during the reporting period was in line with the research direction and progress. |
| Financial expenses | -21,304,608.80 | -14,361,051.91 | -48.35% | The decrease in financial expenses was mainly due to an increase in interest income from our current deposits in commercial banks during the reporting period. |
4.4 Research and Development Investment
? Applicable □ N/A
| Main R&D projects | Purpose | Progress | Intended goals | Expected influence on the Company’s future development |
| R&D project on efficacious cosmetics | The project aims to cater to the specific needs of individuals with sensitive skin, enhance the product line, and diversify the product categories. It involves continuous organization of academic research projects for product development, innovation in formulations, and high-efficiency products. The project also focuses on monitoring market feedback, implementing technological improvements, and meeting the requirements for product optimization and upgrades. Additionally, we aim to strengthen the synergistic effects of our products within the group. | The project is progressing smoothly according to the plan. | We conduct fundamental research, including raw material selection, formulation innovation, evaluation method enhancement, process optimization, and the establishment of academic barriers. These efforts aim to optimize and enhance the existing products of the group and enrich the product line. | We consistently adhere to the path of independent research and development and have established a rigorous, comprehensive, and efficient R&D innovation system. Botanee Research Institute focuses on independent research and development and follows a R&D model that integrates industry, academia, and research. Leveraging the resources and advantages of Yunnan Specialty Plant Extraction Laboratory platform, we integrate global scientific research resources and collaborates extensively with renowned universities, research institutes, and experts both domestically and internationally. We conduct targeted research on fundamental aspects of specialty plants, innovative raw material development, and raw material selection. Moreover, we engage in multidimensional and in-depth R&D projects, including efficacious cosmetics, functional food, medical devices, and packaging development. During the reporting period, our R&D investment, direction, and progress were |
| Specialty plant development project | The project focuses on the independent research and industrialization of specialty plants in Yunnan, which cater to various efficacy demands and address the mechanisms of problematic skin. It involves fundamental research on Yunnan's specialty plants, innovative extraction processes, the establishment of quality standards, and the determination of national standard samples for plant monomers. The project | The project is progressing smoothly according to the plan. | We organize fundamental research and continuously innovate the development of efficacy components derived from Yunnan’s specialty plants. These components are then applied to efficacious cosmetics and food products, which contributes to the technological strength of our brands. |
emphasizes independentdevelopment of innovativeraw materials and activelyengages in the registration ofnew cosmetic ingredients.Additionally, it includes theestablishment of specialtyplant cultivation bases andthe continuous development,launch, and reserve of activeingredients from specialtyplants.
| emphasizes independent development of innovative raw materials and actively engages in the registration of new cosmetic ingredients. Additionally, it includes the establishment of specialty plant cultivation bases and the continuous development, launch, and reserve of active ingredients from specialty plants. | generally aligned. In the future, we will continue to focus on industrialization and concentrate on the research and development of efficacious cosmetics, functional food, and pharmaceuticals based on Yunnan’s specialty plants. Simultaneously, we will integrate domestic and international talent resources and strive to build a high-tech innovation full-chain business encompassing basic theoretical research - application development - common key technology development for industrialization - industrial incubation - academic promotion - market marketing. This will provide continuous technological support for Yunnan’s specialty plant-based health industry, meet increasingly refined and diversified market demands, and enhance brand influence and core competitiveness. | |
Functional fooddevelopmentproject
| Functional food development project | The project focuses on raw material selection, formulation innovation, and efficacy evaluation, aiming to provide effective food solutions to consumers. | The project is progressing smoothly according to the plan. | We establish a functional food R&D system, build a raw material database, organize efficacy evaluation and selection, enhance formulation innovation, and launch a series of functional food products to meet consumer demands. |
| Medical device development project | The project focuses on the development and registration of medical devices in the field of dermatology. It involves the development of medical materials and the continuous layout of new material products in the medical device sector. | The project is progressing smoothly according to the plan. | We establish a medical device research and quality management system, organizes the development of new medical materials, applies them to medical device product layout, reserves a series of Class II and III medical devices, and organizes registration application work. |
| Product packaging development project | The project involves continuous development of packaging materials, especially biodegradable and environmentally friendly materials. It combines consumer segmentation market demands with industrial design and innovative mold development. Its goal is to increase the company's reserve of private molds and develop new packaging suitable for specific usage scenarios. | The project is progressing smoothly according to the plan. | We continue to build an improved packaging research and development system, conduct in-depth research on new materials and environmentally friendly materials, studies product industrial design, compatibility, and functionality, and form an innovative packaging research and development system with our unique characteristics. |
Our R&D personnel:
| 2023 | 2022 | Change in percentage | |
| Number of R&D personnel | 498 | 391 | 27.37% |
| Percentage of R&D personnel | 12.93% | 12.81% | Increase of 0.12% |
| Educational background | |||
| Bachelor | 285 | 228 | 25.00% |
| Master' | 156 | 121 | 28.93% |
| Ph.D. | 14 | 8 | 75.00% |
| Others | 43 | 34 | 26.47% |
| Age of R&D personnel | |||
| Below 30 years old | 275 | 222 | 23.87% |
30-40 years old
| 30-40 years old | 197 | 152 | 29.61% |
| Above 40 years old | 26 | 17 | 52.94% |
R&D investment amount and proportion of operating revenue in the past three years:
| 2023 | 2022 | 2021 | |
| R&D investment amount (CNY) | 335,436,951.02 | 278,214,688.08 | 120,112,765.08 |
| Proportion of R&D investment to operating revenue | 6.07% | 5.55% | 2.99% |
| Capitalized R&D expenditures (CNY) | 36,619,642.91 | 23,516,246.71 | 6,891,615.03 |
| Proportion of capitalized R&D expenditures to R&D investment | 10.92% | 8.45% | 5.74% |
| Proportion of capitalized R&D expenditures to net profit for the period | 4.84% | 2.24% | 0.80% |
Reasons and impacts of significant changes in the composition of R&D personnel:
□ Applicable ? N/A
Reasons for the significant changes in the proportion of R&D investment to operating revenue compared to the previous year:
□ Applicable ? N/A
Reasons and rationality explanation for the significant changes in the capitalized R&D expenditure ratio:
□ Applicable ? N/A
4.5 Cash Flow
Unit: CNY
| Item | 2023 | 2022 | YoY increase/decrease |
| Subtotal of cash inflows from operating activities | 6,225,375,529.13 | 5,601,557,337.79 | 11.14% |
| Subtotal of cash outflows from operating activities | 5,614,936,765.42 | 4,832,111,716.34 | 16.20% |
| Net cash flow from operating activities | 610,438,763.71 | 769,445,621.45 | -20.67% |
| Subtotal of cash inflows from investment activities | 5,155,750,819.89 | 7,143,543,733.03 | -27.83% |
| Subtotal of cash outflows from investment activities | 5,673,805,821.69 | 7,162,029,163.51 | -20.78% |
| Net cash flow from investment activities | -518,055,001.80 | -18,485,430.48 | -2,702.50% |
| Subtotal of cash inflows from financing activities | 112,950,000.00 | 100.00% | |
| Subtotal of cash outflows from financing activities | 571,420,050.45 | 319,663,978.70 | 78.76% |
| Net cash flow from financing activities | -458,470,050.45 | -319,663,978.70 | -43.42% |
| Net increase in cash and cash equivalents | -366,810,957.64 | 431,321,945.39 | -185.04% |
Explanation of the main factors affecting significant changes in comparable data:
? Applicable □ N/A
(1) The increase in cash inflows from operating activities is mainly due to the rapid growth in sales scale and revenue during thereporting period, resulting in increased cash inflows, which is in line with the company's sales growth.
(2) The increase in cash outflows from operating activities is mainly attributed to the increase in payments for goods and servicesas a result of the rapid growth in sales revenue and the corresponding increase in the scale of procurement; the comprehensive impactof increased investment in brand promotion, personnel expenses, and e-commerce channel expenses.
(3) The decrease in cash inflows from investment activities is mainly due to the utilization of idle raised funds and idle self-owned
funds for prudent cash management entrusted financial investments within the authorized limit of the shareholders' meeting during thereporting period, resulting in a decrease in the recovery of invested principal and the corresponding entrusted financial investmentincome.
(4) The decrease in cash outflows from investment activities is mainly due to the decrease in the payment of entrusted financialinvestment principal under the authorization of the shareholders' meeting during the reporting period; continued investment in ongoingconstruction projects such as the central factory's new base; and the comprehensive impact of the successful acquisition of a 51%equity stake in Yuejiang (Guangzhou) Investment during the reporting period.
(5) The significant increase in cash inflows from financing activities is mainly due to the proactive exploration of stable anddiversified financing channels based on dynamic capital requirements, resulting in short-term working capital loans obtained fromcommercial banks.
(6) The increase in cash outflows from financing activities is mainly due to the repurchase of ordinary shares by the companyusing self-owned funds through the centralized bidding trading method in accordance with the resolutions of the board of directors, andthe comprehensive impact of increased payment of cash dividends for the year 2022 during the reporting period.
Explanation of the significant difference between net cash flow generated from operating activities and net profit for the year:
□ Applicable ? N/A
5. Non-Core Business
? Applicable □ N/A
Unit: CNY
| Amount | Percentage of total profit | Formation reasons | Sustainable or not | |
| Other income | 149,420,643.48 | 17.20% | Mainly due to the government subsidies received by the company during the reporting period related to income, as well as the comprehensive impact of the value-added tax input tax deduction and preferential tax benefits enjoyed. | No |
| Investment income | 64,362,248.34 | 7.41% | Mainly due to the investment income generated from the company's cash management entrusted financial products reaching maturity during the reporting period. | No |
| Income/loss due to fair value changes | -17,238,886.41 | -1.98% | Mainly due to the fair value changes of trading financial assets held by the company during the reporting period. | No |
| Impairment loss on credit | -14,262,864.63 | -1.64% | Mainly due to the provision of impairment reserves for accounts receivable and other receivables made by the company during the reporting period. | No |
| Impairment loss on assets | -20,197,131.69 | -2.32% | Mainly due to the provision of inventory depreciation reserves made by the company during the reporting period. | No |
| Loss on asset disposal | 690,284.38 | 0.08% | No | |
| Non-operating income | 2,139,100.44 | 0.25% | No | |
| Non-operating expenses | -11,294,246.99 | -1.30% | Mainly due to the company's expenditure on external charity donations during the reporting period. | No |
6. Analysis of Assets and Liabilities
6.1 Significant Changes in Asset Composition
Unit: CNY
| As of the end of 2023 | As of the beginning of 2023 | Proportion increase/ decrease | Information on significant changes | |||
| Amount | Percentage of total assets | Amount | Percentage of total assets | |||
| Monetary funds | 2,091,459,861.58 | 27.86% | 2,514,295,715.26 | 37.42% | -9.56% | For details, please refer to Section III, "5. Cash Flow" under "IV. Analysis of Main Operations". |
| Trading financial assets | 1,238,356,707.34 | 16.50% | 1,433,635,489.84 | 21.34% | -4.84% | This is mainly due to a decrease in the balance of funds invested in cash management entrusted financing (financial products measured at fair value) using idle raised funds and idle self-owned funds, within the authorized limit of the shareholders' meeting at the end of the reporting period. |
| Notes receivable | 24,502,124.46 | 0.33% | 0.33% | This is mainly due to the unexpired, unendorsed, or undiscounted commercial acceptance drafts held by the company at the end of the reporting period. As of the disclosure date of this financial statement, the commercial acceptance drafts have matured and been accepted, and the related receivables have been fully collected on time. | ||
| Accounts receivable | 561,761,929.57 | 7.48% | 270,089,761.85 | 4.02% | 3.46% | During the reporting period, the growth of accounts receivable exceeded the growth of sales. This is mainly attributed to the rapid growth of the company's offline distribution business's sales revenue in the current year, as well as the comprehensive impact of the outstanding receivables from offline distribution business customers within the commercial credit cycle at the end of the reporting period and the successful acquisition of Yuejiang (Guangzhou) Investment Co., Ltd. (hereinafter referred to as "Yuejiang Investment") by the company during the reporting period. During the reporting period, there were no significant changes in the commercial credit policies of the company's major offline distribution customers, and there were no significant differences in the commercial credit policies of Yuejiang Investment's offline distribution customers compared to the company's existing customers in the same channel. The overall creditworthiness and strength of the company's credit sales customers are good. As of the end of the reporting period and the beginning of the year, the proportion of accounts receivable aged within one year to the total accounts receivable balance was approximately 98.65% and 97.67%, respectively, indicating a favorable aging status and strong liquidity. The company has good collection of accounts receivable, high quality of accounts receivable, and a lower possibility of bad debts. During the reporting period, we consistently implemented strict credit management |
systems and cautious provisions for baddebts, with sufficient provisions for baddebts. The provision for bad debts as apercentage of accounts receivable at theend of the reporting period and thebeginning of the year wasapproximately 4.64% and 5.13%,respectively.
| systems and cautious provisions for bad debts, with sufficient provisions for bad debts. The provision for bad debts as a percentage of accounts receivable at the end of the reporting period and the beginning of the year was approximately 4.64% and 5.13%, respectively. | ||||||
| Financing receivables | 156,659,263.78 | 2.09% | 238,668,244.17 | 3.55% | -1.46% | This is mainly due to a decrease in the balance of unexpired, unendorsed, or undiscounted bank acceptance drafts held by the company at the end of the reporting period. |
| Prepayments | 69,279,116.38 | 0.92% | 41,609,862.79 | 0.62% | 0.30% | Our prepayments mainly consist of marketing expenses prepaid to large B2C e-commerce platforms and other market promotion service providers, settled regularly based on activity cycles and marketing policies. At the end of the reporting period, the proportion of prepayments aged within one year was approximately 97.97%, indicating good quality of prepayments, which are expected to be fully settled and cleared within the next twelve months. At the end of the reporting period, the cumulative balance of prepayments aggregated by trading counterparties amounted to CNY37.12 million, accounting for approximately 53.59% of the ending balance. |
| Other receivables | 29,748,433.09 | 0.40% | 20,097,625.25 | 0.30% | 0.10% | During the reporting period, our acquisition of Yuejiang Investment resulted in an increase in the balance of other receivables. Other receivables mainly consist of deposits and guarantees paid by the company for business operations. |
| Inventory | 904,413,283.67 | 12.05% | 670,748,124.06 | 9.98% | 2.07% | During the reporting period, our acquisition of Yuejiang Investment led to an increase in the ending balance of inventory. The increase in the ending balance of inventory at the end of the reporting period corresponds to the company's actual sales growth for the year and the expected sales growth in the first half of 2024. The company has proactively planned, produced, and procured inventory for the hot-selling products of several major promotional activities in the first half of 2024, according to the supply chain plans of each brand. |
| Other current assets | 446,396,252.76 | 5.95% | 525,887,794.13 | 7.83% | -1.88% | This is mainly due to a decrease in the balance of funds invested in cash management entrusted financing (financial products measured at amortized cost) using idle raised funds and idle self-owned funds within the authorized limit of the shareholders' meeting at the end of the reporting period, as well as an increase in the provision for value-added tax awaiting recognition and offset at the end of the reporting period. |
| Long-term equity investments | 212,015,151.15 | 2.82% | 82,775,998.70 | 1.23% | 1.59% | This is mainly due to an increase in the company's investment in equity of joint ventures. During the reporting period, the company recognized a net |
investment income of CNY9.7058million from equity investments in jointventures accounted for using the equitymethod. For details, please refer toSection X, "18. Long-term EquityInvestments" under "VII. Note toConsolidated Financial StatementItems" of this report.
| investment income of CNY9.7058 million from equity investments in joint ventures accounted for using the equity method. For details, please refer to Section X, "18. Long-term Equity Investments" under "VII. Note to Consolidated Financial Statement Items" of this report. | ||||||
| Other non-current financial assets | 86,449,823.00 | 1.15% | 1.15% | This primarily represents the company's investments in financial assets measured at fair value with changes recognized in profit or loss. During the reporting period, there were no significant changes in the fair value of financial assets measured at fair value with changes recognized in profit or loss. | ||
| Fixed assets | 667,204,436.83 | 8.89% | 206,366,629.61 | 3.07% | 5.82% | This is mainly due to the successful acceptance and capitalization of the Central Factory's new base construction project during the reporting period. The Central Factory's new base construction project is one of the investment projects funded by the company's initial public offering in 2021, with a total project budget of CNY438.4092 million and actual investment completion of 102.11%. |
| Construction in progress | 40,220,147.41 | 0.54% | 349,466,401.13 | 5.20% | -4.66% | This is mainly due to the successful acceptance and capitalization of the Central Factory's new base construction project during the reporting period. |
| Intangible assets | 193,108,638.64 | 2.57% | 77,944,697.40 | 1.16% | 1.41% | This is mainly due to the significant increase in intangible assets, specifically trademark rights, as a result of the company's successful acquisition of Yuejiang Investment. For details, please refer to Section X, "26. Intangible Assets" under "VII. Note to Consolidated Financial Statement Items" of this report. |
| Goodwill | 413,740,760.61 | 5.51% | 5.51% | At the end of the reporting period, the carrying amount of the asset group related to the cash flows generated by the cosmetics business of Yuejiang Investment, independent of other assets or asset groups, including goodwill, was CNY949.2926 million. Based on the assessment, the recoverable amount of the asset group is approximately CNY1,132 million, and no impairment loss is recognized for the asset group. The company's goodwill remains unimpaired. For details, please refer to Section X, "27. Goodwill" under "VII. Note to Consolidated Financial Statement Items" of this report. | ||
| Long-term deferred expenses | 93,317,644.84 | 1.24% | 66,734,195.17 | 0.99% | 0.25% | This increase in the year-end balance of long-term deferred expenses is primarily due to the successful acceptance and capitalization of the new central factory construction project (part of which is classified as long-term deferred expenses) and the successful acquisition of Yuejiang Investment by the company. The long-term deferred expenses mainly represent investments in the renovation projects of owned or leased operating premises, which were |
primarily undertaken for production,warehousing, and office purposesduring the reporting period.
| primarily undertaken for production, warehousing, and office purposes during the reporting period. | ||||||
| Deferred income tax assets | 93,131,250.45 | 1.24% | 52,118,603.26 | 0.78% | 0.46% | The increase in deferred income tax assets is mainly attributed to a significant increase in temporary differences related to items such as "government grants recognized as deferred income", "tax loss carryforwards", and "fair value changes of financial assets". For more details, please refer to Section X, "19. Deferred Income Tax Assets and Deferred Income Tax Liabilities" under "VII. Note to Consolidated Financial Statement Items". |
| Other non-current assets | 75,431,420.74 | 1.00% | 50,155,670.77 | 0.75% | 0.25% | The increase in other non-current assets is primarily due to higher prepayments for long-term assets, including intangible assets, made by the company at the end of the reporting period. |
| Short-term borrowings | 103,816,588.60 | 1.38% | 1.38% | The company obtained short-term working capital financing from commercial banks during the reporting period based on its dynamic capital requirements and actively explored stable and diversified financing channels. | ||
| Other payables | 449,282,195.16 | 5.98% | 272,333,824.39 | 4.05% | 1.93% | The increase in other payables is mainly due to the company's increased marketing expenses incurred on large B2C e-commerce platforms and other market promotion service providers as its sales scale expanded during the reporting period. |
| Contract liabilities | 50,053,638.68 | 0.67% | 58,115,645.49 | 0.86% | -0.19% | The decrease in contract liabilities is primarily attributed to a comprehensive impact of a reduction in prepaid project equipment payments, such as advances received for sales and provision for sales rebates, as stipulated in contracts. |
| Other payables | 449,282,195.16 | 5.98% | 272,333,824.39 | 4.05% | 1.93% | The increase in other payables is primarily due to the company's increased marketing expenses incurred on large B2C e-commerce platforms and other market promotion service providers as its sales scale expanded during the reporting period. Additionally, it is also influenced by an increase in payable project equipment payments resulting from the successful acceptance of the new central factory construction project as per contract requirements and the corresponding increase in other payables due to the successful acquisition of Yuejiang Investment by the company. |
| Long-term borrowings | 4,700,000.00 | 0.06% | 0.06% | The increase in long-term borrowings is primarily due to the company's successful acquisition of Yuejiang Investment, resulting in a corresponding increase in long-term guaranteed bank loans. | ||
| Deferred income | 82,862,738.40 | 1.10% | 55,574,589.18 | 0.83% | 0.27% | The deferred income primarily represents government grants received by the company that have not been fully recognized as income at the end of the reporting period. For more details, |
please refer to Section X, "51. DeferredIncome" under "VII. Note toConsolidated Financial StatementItems".
| please refer to Section X, "51. Deferred Income" under "VII. Note to Consolidated Financial Statement Items". | ||||||
| Deferred income tax liabilities | 40,452,457.50 | 0.54% | 8,364,830.43 | 0.12% | 0.42% | The increase in deferred income tax liabilities is mainly attributed to a significant increase in temporary differences related to the "incremental fair value of assets from business combinations under non-common control". For more details, please refer to Section X, "19. Deferred Income Tax Assets and Deferred Income Tax Liabilities" under "VII. Note to Consolidated Financial Statement Items". |
| Treasury stock | 109,838,205.82 | 1.46% | 0.00% | 1.46% | The increase in treasury stock is due to the company's decision, as approved by the board of directors, to repurchase a certain number of common shares using internal funds through centralized bidding transactions. | |
| Minority interests | 154,823,217.41 | 2.06% | 49,479,106.00 | 0.74% | 1.32% | The increase in minority interests is primarily due to the company's acquisition of a 51% equity interest in Yuejiang Investment, resulting in a significant increase in minority shareholders' equity. |
Overseas asset proportion is relatively high:
□ Applicable ? N/A
6.2 Assets and liabilities measured at fair value
? Applicable □ N/A
Unit: CNY
| Item | Beginning balance | Gain/loss from fair value changes recognized in profit or loss | Accumulated gain/loss recognized in equity | Impairment provision recognized in the current period | Amount purchased in the current period | Amount sold in the current period | Other changes | Ending balance |
| Financial assets | ||||||||
| 1. Financial assets held for trading (excluding derivative financial assets) | 1,433,635,489.84 | -17,238,886.41 | 4,085,000,000.00 | 4,240,000,000.00 | 1,238,356,707.34 | |||
| 2. Receivables financing | 238,668,244.17 | -82,008,980.39 | 156,659,263.78 | |||||
| 3. Other non-current financial assets | 87,000,000.00 | 86,449,823.00 | ||||||
| Total | 1,672,303,734.01 | -17,238,886.41 | 4,172,000,000.00 | -82,008,980.39 | 1,481,465,794.12 | |||
Explanation of other changes: The other changes in receivables financing mainly result from the net changes in bank acceptancebills received, endorsed for transfer, or due for acceptance by the company during the reporting period.
Significant changes in the measurement attributes of the company's major assets as of the end of the reporting period
□Yes ?No
6.3 Restricted Assets as of the End of the Reporting Period
Please refer to “31. Assets Subject to Ownership or Use Restrictions” in “3. Notes to the Consolidated Financial Statements”under Section X of this report.
7. Investment Analysis
7.1 Overview
? Applicable □ N/A
| Investment amount for the reporting period (CNY) | Investment amount for the same period last year (CNY) | Percentage change |
| 5,673,805,821.69 | 7,162,029,163.51 | -20.78% |
7.2 Significant Equity Investment during the Reporting Period
? Applicable □ N/A
Unit: CNY
| Company invested | Main business | Investment method | Investment amount | Equity stake | Capital source | Partner | Investment period | Product type | Progress as of the balance sheet date | Expected returns | Investment gain/loss for the period | Involvement in litigation | Disclosure date (if applicable) | Disclosure index (if applicable) |
| Yuejiang Investment | Note 1 | Acquisition and capital increase | 53,550.00 | 51.00% | Own funds | N/A | Long-term | Note 1 | Completed | Note 2 | Note 3 | No | Oct. 20, 2023 | Note 2 |
| Total | -- | -- | 53,550.00 | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- | -- |
Note 1: Yuejiang Investment is a well-known multi-brand cosmetics brand management company dedicated to the operation andmanagement of cosmetics brands through various channels both domestically and internationally. It owns two major popular cosmeticsand skincare brands, Za and PURE&MILD. These brands have accumulated over 20 years of brand reputation, a solid user base, and agood reputation. Za is positioned as an international trendy cosmetics brand with core products such as sunscreen, foundation, andpowder. PURE&MILD is positioned as a plant-based technology skincare brand, offering multiple product lines including moisturizers,whitening products, and anti-aging solutions, encompassing various categories such as lotions, eye creams, face creams, and serums.
Note 2: For specific details, please refer to the Announcement of Yunnan Botanee Bio-Technology Group Co. Ltd. on theAcquisition of Equity and Capital Increase from External Investments (Updated) (2023-062) and the Supplementary Announcement onYunnan Botanee Bio-Technology Group Co. Ltd.'s Acquisition of Equity and Capital Increase from External Investments (2023-063)disclosed on the CNINFO website (http://www.cninfo.com.cn).
Note 3: For specific details, please refer to “5.1 Equity in Subsidiaries” in “10. Equity in Other Entities” under Section X of thisreport.
7.3 Significant Non-Equity Investments in Progress during the Reporting Period
? Applicable □ N/A
For specific details, please refer to “Central Factory Construction” in “7.5 Use of Raised Funds”, “7. Investment Analysis” underSection III of this report.
7.4 Financial Asset Investments
7.4.1 Securities Investment
□ Applicable ? N/A
7.4.2 Derivative Investment
□ Applicable ? N/A
7.5 Use of Raised Funds
? Applicable □ N/A
7.5.1 Overall Use of Raised Funds
? Applicable □ N/A
Unit: CNY
| Year of Fundraising | Method of Fundraising | Total Fundraising Amount | Net Fundraising Amount | Total Amount of Raised Funds Used in the Reporting Period | Cumulative Amount of Raised Funds Used | Total Amount of Raised Funds with Changed Purposes in the Reporting Period | Cumulative Amount of Raised Funds with Changed Purposes | Percentage of Cumulative Amount of Raised Funds with Changed Purposes | Total Amount of Unused Raised Funds | Purpose and Allocation of Unused Raised Funds | Amount of Raised Funds Idle for Over Two Years |
| 2021 2021 | A Public issuance of CNY common shares of A shares | 3,010,188,000 | 2,883,896,800 | 692,281,000 | 2,160,044,100 | 1,137,155,100 | Note 1 | 0 | |||
| Total | -- | 3,010,188,000 | 2,883,896,800 | 692,281,000 | 2,160,044,100 | 1,137,155,100 | -- | 0 | |||
| Explanation of the overall use of raised funds | |||||||||||
| On February 25, 2021, according to the approval of the China Securities Regulatory Commission on Reply of the Registration of the Initial Public Offering of Shares by Yunnan Botanee Bio-Technology Group Co. Ltd. (CSRC Approval [2021] No. 546), we were authorized to publicly issue no more than CNY63,600,000 common shares. As of March 22, 2021, we had issued a total of 63,600,000CNY common shares to strategic investors through targeted placements and to the general public through A-share offerings, with a par value of CNY1.00 per share and an issue price of CNY47.33 per share. The total amount of raised funds was CNY3,010,188,000, and the net amount of raised funds after deducting issuance expenses was CNY2,883,896,800. Following the issuance, the company's registered capital increased to CNY423,600,000, and the total share capital increased to 423,600,000 shares. On March 23, 2021, the Shenzhen Stock Exchange issued the Announcement on the Listing and Trading of Yunnan Botanee Bio-Technology Group Co. Ltd.'s Stock on the ChiNext Board, our A-share common stock began trading on the ChiNext Board of the Shenzhen Stock Exchange on March 25, 2021. The stock abbreviation is “Botanee”, and the stock code is “300957”. As of December 31, 2023, the company had invested a cumulative amount of CNY2,160,044,100 of raised funds into investment projects (including CNY400 million of permanent supplementary working capital from excess raised funds and CNY320 million of temporary supplementary working capital from excess raised funds). The idle raised funds used for cash management amounted to CNY530 million, and the accumulated cash management income obtained was CNY74,769,700. The | |||||||||||
accumulated interest income from the raised funds account, net of fees, was CNY185,322,700. As of December 31, 2023, thebalance of the raised funds account was CNY2,871,555,100 (including cash management income and interest income from theaccount, net of fees).
accumulated interest income from the raised funds account, net of fees, was CNY185,322,700. As of December 31, 2023, thebalance of the raised funds account was CNY2,871,555,100 (including cash management income and interest income from theaccount, net of fees).
Note 1: Except for the portion used for cash management, the unused raised funds of the company are deposited in a raised fundsaccount and strictly managed, and will continue to be used for the investment projects committed by the company. As of December 31,2023, the total amount of unused raised funds of the company was CNY11,371,555,100, including CNY530 million for cashmanagement, CNY320 million for temporary working capital, and a current account balance of CNY287,155,100 in the raised fundsaccount (including cash management income and interest income from the account, net of fees).
7.5.2 Fundraising Commitment Projects
? Applicable □ N/A
Unit: CNY
| Investment commitment projects and utilization of excess funds | Whether the project been changed (including partial changes) | Total amount of committed investment funds | Adjusted total investment amount (1) | Amount invested during this reporting period | Accumulated amount invested as of the end of the reporting period (2) | Investment progress as of the end of the reporting period (3) = (2) / (1) | Date when the project reached the planned usable state | Benefits achieved during this reporting period | Accumulated benefits achieved as of the end of the reporting period | Expected benefits achieved or not | Whether there has been a significant change in the project's feasibility |
| Commitment Investment Projects | |||||||||||
| Central factory new base construction project | No | 438,409,200 | 438,409,200 | 53,112,200 | 432,602,200 | 98.68% | Jun. 30, 2023 | 0 | 0 | Yes | No |
| Marketing channel and brand building project | No | 691,217,400 | 691,217,400 | 290,246,600 | 650,534,300 | 94.11% | Mar. 25, 2024 | 0 | 0 | Yes | No |
| Information system upgrade project | No | 105,063,500 | 105,063,500 | 28,922,200 | 56,745,100 | 54.01% | Mar. 25, 2024 | 0 | 0 | Yes | No |
| Supplementary operating capital | No | 3,000,000 | 3,000,000 | 0 | 300,162,500 | 100.05% | Mar. 25, 2024 | 0 | 0 | Yes | No |
| Subtotal of commitment investment projects | -- | 1,534,690,100 | 1,534,690,100 | 372,281,000 | 1,440,044,100 | -- | -- | 0 | 0 | -- | -- |
| Utilization of excess funds | |||||||||||
| Permanent | No | 4,000,000 | 400,000,000 | 100.00% | May 27, 2021 | 0 | 0 | N/A | No | ||
supplementaryworkingcapital
| supplementary working capital | |||||||||||
| Temporary supplementary working capital | No | 3,200,000 | 3,200,000 | 320,000,000 | 100.00% | Aug. 28, 2023 | 0 | 0 | N/A | No | |
| Subtotal of allocation of excess funds | -- | 7,200,000 | 3,200,000 | 7,200,000 | -- | -- | -- | -- | |||
| Total | -- | 1,534,690,100 | 2,254,690,100 | 692,281,000 | 2,160,044,100 | -- | -- | 0 | 0 | -- | -- |
| Explanation of project delays and failure to achieve planned progress and expected benefits (including reasons for selecting "not applicable" for "expected benefits not achieved") | N/A | ||||||||||
| Explanation of significant changes in project feasibility | N/A | ||||||||||
| Amount, purpose, and progress of utilization of excess funds | Applicable | ||||||||||
| Please refer to the specialized report "Special Report on the Amount, Purpose, and Progress of Utilization of Excess Funds of Yunnan Botanee Bio-Technology Group Co. Ltd. for the Year 2023" as disclosed on the CNINFO website (http://www.cninfo.com.cn) for detailed information on the amount, purpose, and progress of the raised funds. | |||||||||||
| Changes in implementation locations of funded investment projects | N/A | ||||||||||
| Adjustments to implementation methods of funded investment projects | N/A | ||||||||||
| Initial investment and replacement of funded investment projects | Applicable | ||||||||||
| Please refer to the specialized report "Special Report on the Amount, Purpose, and Progress of Utilization of Excess Funds of Yunnan Botanee Bio-Technology Group Co. Ltd. for the Year 2023" as disclosed on the CNINFO website (http://www.cninfo.com.cn) for detailed information on the initial investment and replacement of funded investment projects. | |||||||||||
| Utilization of idle raised funds as temporary working capital | Applicable | ||||||||||
| Please refer to the specialized report "Special Report on the Amount, Purpose, and Progress of Utilization of Excess Funds of Yunnan Botanee Bio-Technology Group Co. Ltd. for the Year 2023" as disclosed on the CNINFO website (http://www.cninfo.com.cn) for detailed information on the utilization of idle raised funds as temporary working capital. | |||||||||||
| Amount and reasons for fundraising surplus during project implementation | N/A | ||||||||||
| Purpose and allocation of unused raised funds | Apart from the portion used for cash management, the unused raised funds of the company are deposited in a dedicated account for strict management and will continue to be invested in the committed fundraising projects. As of December 31, 2023, the total unused raised funds of the company amounted to CNY148,586.27 million, of which CNY53,000.00 million was the unused amount for cash management, and the balance of CNY28,715.51 million was the current deposit balance of the dedicated account (including cash management income and account interest income, with net of handling fees deducted). | ||||||||||
| Issues or other circumstances in the use and disclosure of raised funds | N/A | ||||||||||
7.5.3 Changes in Raised Funds Projects
□ Applicable ? N/A
8. Significant Sale of Assets and Equity
8.1 Significant Asset Sale
□ Applicable ? N/A
8.2 Significant Equity Sale
□ Applicable ? N/A
9. Analysis of Key Holding and Equity Participating Companies
Analysis of major subsidiaries and equity participating companies with a net profit impact of over 10% on the company:
□ Applicable ? N/A
Acquisition and disposal of subsidiaries during the reporting period:
? Applicable □ N/A
| Company name | Method of acquisition and disposal of subsidiaries during the reporting period | Impact on overall production, operation, and performance |
| Qiumei Technology (Shanghai) | The equity relationship of Qiumei Technology (Shanghai) was transferred from direct ownership by Botanee to indirect ownership through the company's wholly-owned subsidiary, Shanghai Botanee. | An internal restructuring of the company's organization, with no impact on overall production, operation, and performance. |
| Shanghai Jiyan Biomedical | The equity relationship of Shanghai Jiyun Biomedical was transferred from direct ownership by Botanee to indirect ownership through the company's wholly-owned subsidiary, Shanghai Jiyun Technology. | |
| Botanee (Shanghai) Supply Chain | The equity relationship of Botanee (Shanghai) Supply Chain was transferred from direct ownership by Botanee to indirect ownership through the company's wholly-owned subsidiary, Shanghai Jiyun Technology. | |
| Hainan Botanee Investment Co., Ltd. | Liquidated | No significant impact on the performance during the reporting period. |
| ainan Botanee Private Equity Fund Management Co., Ltd. | Liquidated |
Explanation of key holding and equity participating companies:
□ Applicable ? N/A
10. Structured Entities Controlled by Botanee
□ Applicable ? N/A
11. Prospects for Our Future Development
11.1 Future Development Strategy
Following the mission to “create China's skin health ecosystem”, we are committed to continuously enhancing our productresearch and development capabilities. Through new images, new products and new technological capabilities, we will continue tobuild brand power, and through stronger product power, we will further consolidate the brand mentality of “use Winona for sensitiveskin”.
We adhere to long-termism and continuously develop innovative product formulas and product series based on market trends and
customer needs. At the same time, we increase the optimization of the service system and logistics system, and conduct refinedoperations in all dimensions of consumer touch points. We will use the brand's insistence on evidence-based medicine and the conceptof scientific skin care to establish deeper communication with consumers in multiple dimensions, making Winona the first choice brandfor people with sensitive skin. We will continue to focus on the pain points of sensitive skin and conduct more in-depth research on thecauses. Research, develop a richer product line, meet consumers’ “sensitive skin plus needs”, and create a fully functional systemsolution for 2.0 sensitive skin care.
We will base ourselves on dermatological science, amplify the co-creation genes of medical research, focus on the brand keywordof “dermatology”, and gradually enhance the brand influence and market position of sub-brands through the brand matrix strategy of"focusing on the main brand and expanding sub-brands", and improve the market position of sub-brands. The formulas and functions ofvarious products are iteratively upgraded to provide consumers with better solutions. At the same time, we build and improve a matrixof skin care products with different functions, continuously accumulate product reputation, and enhance user stickiness and brandreputation.
11.2 Key Business Plans for 2024
In 2024, against the backdrop of an improved macro environment, consumer trends, and economic conditions with graduallydiminishing uncertainties, all employees of Botanee will seize the moment, persist in exploration and innovation, consider productquality as paramount, prioritize customer satisfaction, take employee well-being as a responsibility, uphold the interests of shareholders,and regard industry development as its mission. The company will strive to accelerate its growth and bring health and beauty to anincreasing number of people.
11.2.1 Brand Upgrading and Potential Building of the Main Brand
In 2024, the core strategy for Winona is to strengthen the brand, consolidate recognition, and focus on breakthroughs, creating anew era of skin health and freedom for Winona 2.0. We will focus on five major dimensions: 1) announcing a new spokesperson toenhance the brand’s momentum; 2) deepening the brand's dermatological culture, strengthening medical targeting mechanisms, andadvancing botanical technology ingredients; 3) further focus on sensitive skin and solidify the mentality of “use Winona for sensitiveskin”; 4) create a PLUS boutique series for sensitive skin, sort out and streamline products; 5) adhering to core brand initiatives such asthe "Winona Smile Sunshine Project" and the "525 National Skincare Day", and continuously practicing sustainability.
In 2024, Winona will further focus on sensitive skin to enhance its brand potential. The "Sensitive Skin Track" has been built andlaid by Botanee and Winona, and the company not only has the responsibility to maintain the healthy development of the track but alsoresponds to the secondary demands of consumers for sensitive skin. In 2024, the "Winona" brand will continue to follow the researchand development guidelines of "small incisions, in-depth research, and effective results", continuously upgrading products in variousaspects including academia, formulations, packaging, and color range, and creating a series of premium products related to sensitiveskin. The company will set clearer goals for the management boundaries, strategic integration, category planning, and objectivebreakdown of internal systems to ensure the coordinated development of each department.
11.2.2 Constantly Enriching Product Categories with New Brands and Carefully Nurturing Eco-chain Brands
In 2024, we will coordinate resources to enable new brands to achieve breakthroughs from inception and focus on investingresources in the most promising brands to empower them to become stronger and larger.
Winona Baby brand will continue to deepen its focus on skincare products with efficacy for infants and children, constantlyenriching its product matrix. The key focus will be on creating “Comforting and Nourishing Cream” as a flagship product, and using itas a core to drive the growth of other product lines related to Winona Baby brand. In 2024, the key areas of focus for Winona Babybrand include: 1) focus on infant and child eczema research and continue to develop functional skin care for infants and children; 2)conduct industry-university-research and medical research to further strengthen the professional image of medicine; 3) accuratelypenetrate the core eczema babies and infant and child sun protection groups to strengthen the brand mentality; 4) enrich productsmatrix, continue to create core single products such as moisturizing cream and infant sunscreen, and intensively develop the babyeczema product line; 5) optimize channel strategies, take root in professional institutions offline, and work together with Tmall, Douyin,and JD.com.
Botanee aims to deepen the brand positioning of its "AOXMED" brand in 2024 by integrating medical aesthetics and homeaesthetics. The brand will upgrade its anti-aging concept from a single-layer approach to a comprehensive anti-aging skin rejuvenationmanagement strategy. It will introduce a new approach called "mechanized makeup alliance" by focusing on its core product,
Zhuanyan Line, and creating a "postoperative medical care solution for 0-28 days after phototherapy". Botanee will collaborate closelywith industry professionals to explore the value operation of the post-medical aesthetics market. The brand "Meiyan Line" willspecifically target the semi-medical aesthetic group pursuing medical aesthetic effects and the non-medical aesthetic consumer groupseeking quality anti-aging solutions. It aims to enhance its product line and positioning, capture the target audience's attention, andincrease its market share in high-end skincare channels. In 2024, AOXMED will focus on: 1) deepen the brand positioning of“connecting medical beauty and home beauty”; 2) Zhuanyan series product line deeply develops core single products, and do a goodjob in value operation of the medical and art after-sales market; 3) Meiyan series product line focuses deeply on anti-aging, improvesthe product line, and accelerates the market share of high-end skin care channels.; 4) continue to expand the scale and breadth ofcooperation with offline professional institutions starting from four aspects. By establishing a multi-scenario presence both online andoffline, bridging medical aesthetics and home aesthetics, Botanee aims to create synergistic effects between channels, integrate marketresources, and promote its brand and value proposition across all channels, striving for high-speed growth.Beforteen is an innovative brand that encompasses artificial intelligence, medical care, effective skincare, and internal beautyproducts, with a focus on addressing acne problems. In 2024, we will enhance its brand awareness through four key strategies: 1)establishing an AI diagnostic system across all channels to optimize user experience; 2) expanding new product layout, focusing onacne and acne-prone skin problems; 3) promoting the brand primarily on Xiaohongshu (Little Red Book) as the main platform forbrand influence; 4) Expanding channel distribution, with WeChat Mini Program as the main online channel and setting price standardson Tmall. Exploring benchmark hospitals and comprehensive OTC channel coverage to establish a solid foundation for futuredevelopment in 2025.Simultaneously, in 2024, the company will carefully incubate new brands within the skincare health ecosystem, continuouslyimproving its strategic landscape through minority equity investments, mergers and acquisitions, joint ventures (JVs), licensingagreements, and internal incubation.
11.2.3 Streamlining and Optimizing Product Lines, Implementing Comprehensive Pricing ControlIn 2024, the company will strictly maintain market order and pricing systems for each brand. Price stability is crucial for the"Winona" brand's sales and product scale. In 2024, the company aims to shift from price competition to value competition and reducereliance on major promotions. The company will strengthen its channel and product strategies with forward-looking perspectives toensure the efficiency of product output and the rational layout of channel product lines. Additionally, the company will establishmarket order and pricing management systems for each brand to facilitate clear and precise price control objectives.
In fiscal year 2024, the company will continuously review and streamline existing brand product lines. New product developmentwill be aligned with consumer demands and channel characteristics, emphasizing strict evaluation and control. The company aims toattract and complement various customer segments by leveraging the main efficacy lines of different brands.
11.2.4 Continuously Enriching Offline Channels and Exploring Emerging Markets
In fiscal year 2024, the company will continue to focus on expanding offline channels, including OTC pharmacy chains, clinics,and offline KAs and duty-free shops. It will steadily explore the direct-operated store model, expand the scale of various channels,enhance brand and product exposure, and reach end consumers through multi-dimensional and deep-level approaches. As urbanizationcontinues to deepen in China and first- and second-tier cities approach saturation, the company aims to seize opportunities in emergingmarkets in fiscal year 2024 to gain a larger market share and higher profit margins. The consumption concepts and behaviors ofconsumers in these emerging markets are changing and upgrading, providing significant opportunities for the company. In fiscal year2024, the company will selectively enter the CS channel to reach more consumers and enhance customer loyalty through improvedoffline shopping experiences and services.
11.2.5 Expansion of Overseas Business and Embarking on Internationalization
The company established its Southeast Asian headquarters in Bangkok, Thailand, in 2023 to enter overseas markets. In fiscal year2024, the company plans to build localized operating teams and truly promote brand globalization. For the Thai market, the companyplans to establish offline channels including KA beauty store chains and local well-known medical aesthetic clinics. Simultaneously,the company will also expand its presence on mainstream local e-commerce platforms. Marketing channels will cover popular socialmedia platforms such as Facebook, Instagram, YouTube, Twitter, and TikTok. The company will create localized marketing contentand collaborate with local influential figures (KOLs) to facilitate content dissemination.
11.2.6 Continued Investment in R&D to Enhance Innovation
In 2024, the company will continue to focus on key areas of research in dermatology, functional cosmetics, and Yunnan'sspecialty plants. This includes conducting fundamental research, platform construction, and key technology development. Thecompany will increase its investment in basic research in the fields of dermatology, specialty plants, formulation preparations, andelectroencephalography. It will also continue to promote the construction of innovative platforms, aiming to upgrade and transform theYunnan specialty plant extraction laboratory Phase 2 project to an internationally top-level laboratory. Additionally, the company willestablish international research and development centers in Japan and Switzerland, targeting cutting-edge technologies andcollaborating to tackle core key technologies. These efforts will lay a solid foundation for the company's future innovative productdevelopment and global expansion. In 2024, the company aims to achieve key technological breakthroughs in the development ofcritical technologies used in raw materials and products. This includes: developing 15 new plant raw materials (including 4 monomers),applying for 10 new cosmetic raw materials (including 2 monomers), conducting research and development on 20 cosmetic rawmaterials listed in catalogs, developing 8 food raw materials, and striving for industrial transformation. The expected breakthroughs incore key technologies will empower the company in the development of functional cosmetics such as soothing, spot lightening, barrierrepair, firming, and sun protection, as well as functional foods for soothing, spot lightening, and firming. In 2024, the company willcontinue to explore the application of Yunnan's specialty plants in the pharmaceutical industry, Class II/III medical devices, and otherhealth products. It aims to develop a new batch of high-value health products with strong technological barriers and achieveindustrialization.
11.2.7 Comprehensive Digital Transformation and Embracing New AI Technologies
In 2024, the company will fully embrace information technology and build a fully digital enterprise. During the reporting period,the company has initiated a series of digital system projects, such as the "Digital Collaborative Platform for Production, Supply, andSales". These systems will effectively improve the accuracy of marketing plans, reduce inventory and expired products, and enhancethe operational efficiency of the supply chain to meet the ever-changing market demands. The ongoing development of the data-driven"Intelligent Marketing Platform" based on big data will empower and serve the business needs of various brand fronts, furtherenhancing the company's capabilities in member lifecycle operations. In 2024, the company will continue to embrace new AItechnologies and explore different areas such as AI live streaming, AI-generated content, AI customer service, and AI advertisingdelivery. These initiatives will not only reduce operational costs but also enhance the company's operational efficiency andtechnological capabilities.
In 2024, the company will deploy an Alibaba Cloud-based "Data Center (including sales, supply chain operations, finance, andmember center)" to provide a data-driven decision-making platform for the business. Through the integration of the "DigitalCollaborative Platform for Production, Supply, and Sales", the company will manage end-to-end data from product development,supply chain, sales, and marketing, as well as the full lifecycle of members and products. By fully leveraging internal resources andintegrating the company's front, middle, and back-office departments, the company aims to achieve unified management and maximizethe advantages of its products, ultimately enhancing the consumer experience.
11.2.8 Deepening Organizational Transformation and Opening Up Employee Promotion Channels
Employees are the company's most valuable asset, and only by truly caring about their well-being can a company become great. In2024, the company will firmly carry out organizational transformation by empowering front-end business units through a robust middleand back-office system. The decision-making authority will be fully delegated to the front-end business units to inspire frontlineemployees' enthusiasm and innovative vitality. More frontline managers will be involved in decision-making and execution of majorprojects, fully tapping into the team's wisdom and strength, and enhancing the company's responsiveness to customers and the market.In the process of organizational transformation, the company will further emphasize core values in 2024, enabling its employees tomaintain resilience and determination in a challenging market. The company will fully implement a job-ranking management systemand open up employee career advancement channels. It will maintain a highly competitive compensation and incentive system in theindustry to instill pride in internal employees and attract external talents. The company's goal is not only to retain employees throughfavorable treatment but also to retain them through a sense of purpose and career development.
11.2.9 Enhancing Compliance System to Safeguard the Company’s Development
The company has always adhered to relevant regulations and operated in compliance with the law. We are committed to followinghigh standards of business conduct, firmly opposing corruption, bribery, unfair competition, money laundering, and other illegalactivities. We actively encourage employees, suppliers, and customers to uphold these principles, contributing to the creation of a
better business environment. The company has established a comprehensive internal management system to ensure businesscompliance and risk control and undergoes regular internal and external audits.
In 2024, the company will continue to deepen the work on compliance modules and enhance the construction of the compliancesystem. We will combine practicality with the flexible application of guidelines such as the OECD "Internal Control, Ethics, andCompliance: A Guide for Multinational Enterprises" and the "Principles of Corporate Governance" issued by the Ministry of Financeand other six ministries. We will organize and construct the company's basic compliance management system, including internalenvironment, risk assessment, control activities, information and communication, and internal supervision. The objective of internalcontrol is to ensure the lawful and compliant operation and management of the company, safeguard asset security, ensure theauthenticity and integrity of financial reports and related information, improve operational efficiency and effectiveness, and promotethe realization of the company's development strategies. We will conduct compliance management in areas such as basic operationalcompliance, securities law, anti-unfair competition law, anti-monopoly law, advertising law, and compliance management relating tothe cosmetics and medical device regulations in the company's industry. Starting from compliance with securities laws and informationdisclosure for listed companies, we will gradually extend it to comprehensive compliance management for the entire company. Inaccordance with national policies and guidelines such as the "Program for Pilot Work on Corporate Compliance Reform" issued by theSupreme People's Procuratorate, we will establish a pre-compliance system for risk identification, mechanism construction, compliancetraining, and publicity, fostering a strong corporate compliance culture. This will ensure the achievement of the compliance objectivesset by the company, maintain the ability for continuous improvement in the future, and monitor the development trends of non-compliant events.
11.2.10 Firmly Embracing ESG to Reshape Corporate Value
The company has always integrated social responsibility into its corporate strategy, committed to promoting ethical businesspractices, giving back to society, and achieving sustainable development. In 2024, the company will continue to promote the high-quality development of the New Era Hope Project, collaborate with charitable organizations, participate in community development,actively contribute funds and resources, and expand the scope of beneficiaries and forms of philanthropic activities. We willextensively engage in comprehensive public welfare initiatives such as education assistance and support, nurturing and educatingstudents. By staying true to our principles and embracing innovation, we will seize opportunities, fulfill our duties, and continuouslystrive for greater achievements. Looking ahead, the company will continue to promote community investment and philanthropic work,strengthen collaboration with charitable organizations, expand the scale and impact of public welfare projects, increase publicparticipation, and contribute to building a better society.
As pioneers in the industry, in 2024, the company will aim to establish a new paradigm for skin health and embark on a new era ofskin wellness, bringing health and beauty to an increasing number of people. We will firmly reshape corporate value through tangibleactions in ESG, focusing on both internal and external improvements, strengthening our foundation, continuously enhancingcompetitiveness, and contributing to the high-quality and sustainable development of the economy and society. The company aspires tobe a trailblazer and leader, transcending growth cycles' boundaries, and continuously creating sustainable value for consumers, theindustry, society, and the nation.
11.3 Potential Risks
11.3.1 Risk of Intensified Industry Competition
In recent years, the sales proportion achieved by cosmetics companies through online channels has been increasing. Internationalrenowned cosmetic brands have also started to pay attention to online channel development and have gradually increased theirmarketing efforts in this area. Compared to local cosmetic brands, international renowned brands have an advantage in the marketcompetition due to their strong brand positioning and financial strength. The continuous marketing investments made by internationalcosmetic brands in online channels may squeeze the market share of local cosmetic brands in the online space. Online sales channelswill remain the most important revenue-generating channel for the company in 2024. If the company fails to timely respond to theaforementioned changes, it may have an adverse impact on the company's sales revenue growth and even lead to a decline in salesrevenue, which could negatively affect the overall business performance of the company.
11.3.2 Risk of Relatively Concentrated Sales Platforms
In recent years, the company has closely followed the trend of e-commerce development and rapidly expanded its online saleschannels. It has established deep collaborations with well-known e-commerce platforms such as Tmall, Douyin, Vipshop, JD.com, and
Kuaishou. The company has also utilized the WeChat platform to establish an OMO channel online store for product sales. During thereporting period, the sales revenue generated through the five major platforms, including Tmall (including Tmall Supermarket), Douyin,Winona Counter Service Platform (WeChat platform), JD.com, and Kuaishou, has gradually increased as a proportion of the company'smain business revenue. These platforms have a significant impact on the company. If there are changes in the cooperative relationshipswith these platforms, a decline in platform traffic, or adjustments to platform sales policies and fee standards, it may have an adverseimpact on the company's business operations on these platforms. Additionally, if the company fails to timely expand into othercompetitive platforms, the aforementioned situations may negatively affect the company's overall business performance.
11.3.3 Risk of Seasonal Sales Fluctuations
The company relies heavily on e-commerce channels for sales, and it is significantly influenced by major promotional events suchas "618" and "Double 11". The company's sales revenue may experience explosive growth during these large-scale promotional periods,leading to a relatively higher proportion of sales revenue in the second and fourth quarters. As a result, the company's sales revenue andprofit exhibit seasonal fluctuations, posing a certain level of risk to its business performance.
11.3.4 Risk of Product Quality Control
Our products primarily target sensitive skin care and are more suitable for individuals with sensitive skin. The positioning of thetarget market determines that the company has higher quality requirements for its products compared to other cosmetics. However, ifthe company fails to effectively control the quality during procurement and production processes, resulting in consumer complaints ofallergies or other adverse reactions to the company's products, it may face the risk of administrative penalties from regulatoryauthorities. Moreover, if a large quantity of products exhibits similar quality issues and the company fails to handle them promptly andproperly, it may negatively affect the trust and loyalty of customers towards the company's brands, thereby impacting the overallbusiness performance of the company.
12. Summary of Exchanges and Inspection Visits during the Reporting Period
Applicable Not Applicable
| Date | Venue | Mode | Type of Participant | Participant | Main Topics Discussed and Information Provided | Basic Research Information Index |
| Mar. 30, 2023 | Online live streaming + teleconference | Online exchange on a web platform | Organization | 626 institutions and individuals, including YinHua Fund, Goldman Sachs, CICC, J.P. Morgan, CITIC Securities, Guotai Junan Securities, Changjiang Securities, TF Securities, and GF Securities. | Company's summary and review of 2022, details can be found in the Investor Relations Activity Record. | Disclosure of "Botanee: Investor Relations Activity Record on March 30, 2023" on the CNINFO website (Table Number: 2023-001). |
| Apr. 10, 2023 | Online live streaming | Online exchange on a web platform | Organization | Investors participating in the 2022 annual performance online conference through http://ir.p5w.net. | Company's 2022 annual performance conference, details can be found in the Investor Relations Activity Record. | Disclosure of "Botanee: Investor Relations Activity Record on April 10, 2023" on the CNINFO website (Table Number: 2023-002). |
| Apr. 27, 2023 | Online live streaming + teleconference | Online exchange on a web platform | Organization | 415 institutions and individuals, including CICC, TF Securities, Changjiang Securities, Everbright Securities, Guotai Junan Securities, Huatai Securities, Jingshun Great Wall Fund, and Southern Fund. | Company's Q1 2023 performance release conference, details can be found in the Investor Relations Activity Record. | Disclosure of "Botanee: Investor Relations Activity Record on April 27, 2023" on the CNINFO website (Table Number: 2023-003). |
| May 11, 2023 | Teleconference | Online exchange on a web platform | Organization | Investors participating in the 2023 collective reception day for listed companies in Yunnan through http://ir.p5w.net. | Company's business situation and 2023 outlook, details can be found in the Investor Relations Activity Record. | Disclosure of "Botanee: Investor Relations Activity Record on May 11, 2023" on the CNINFO website (Table Number: 2023-004). |
| May 18, 2023 | No. 1517 Majinpu Road, Chenggong District, | On-site exchange | Organization | 20 institutions, including Industrial Securities, China Bank Fund, Tianhong | Company's Q2 2023 performance outlook and new brand development plan, | Disclosure of "Botanee: Investor Relations Activity Record on May 18, 2023" on the CNINFO website |
Kunming City
| Kunming City | Fund, Guotai Fund, Pengyang Fund, Taiping Assets, and Lion Fund. | details can be found in the Investor Relations Activity Record. | (Table Number: 2023-005). | |||
| Jun. 7, 2023 | Block B, North Area, E-World, No. 999 Huaxu Highway, Qingpu District, Shanghai | On-site exchange | Organization | Institutions such as Goldman Sachs, Eastspring Invs (Singapore) Ltd, Foresight Fund Management Co., Ltd, Greenwoods Asset Management HK Ltd, and Hillhouse Capital Management Ltd. | Company's major research and development plans, product layout, and new product development plan for 2023, details can be found in the Investor Relations Activity Record. | Disclosure of "Botanee: Investor Relations Activity Record on June 7, 2023" on the CNINFO website (Table Number: 2023-006). |
| Sept. 5, 2023 | Building 2, Lingkong SOHO, No. 968 Jinzhong Road, Changning District, Shanghai | On-site exchange | Organization | Institutions such as Morgan Stanley, Stillpoint, Blue Creek Capital Management, etc. | Company's Q3 2023 performance outlook, strategic partnerships, and future growth plans, details can be found in the Investor Relations Activity Record. | Disclosure of "Botanee: Investor Relations Activity Record on September 5, 2023" on the CNINFO website (Table Number: 2023-007). |
| Sept. 25, 2023 | Online live streaming | Online exchange on a web platform | Organization | Investors who participated in the online briefing of the company's 2023 third-quarter performance through http://ir.p5w.net. | Companys 2023 Q3 performance briefing on Relations Activity Record. | Disclosure of "Botanee: Investor Relations Activity Record on September 5, 2023" on the CNINFO website (Table Number: 2023-008). |
13. Implementation of Our “Quality and Return Dual Enhancement” Action Plan
Did Botanee disclose its “Quality and Return Dual Enhancement” action plan??Yes □NoOn July 24, 2023, the meeting of the Political Bureau of the CPC Central Committee proposed to invigorate the capital market andboost investor confidence. On January 22, 2024, the Executive Meeting of the State Council pointed out the need to greatly enhance thequality and investment value of listed companies and take more effective measures to stabilize the market and boost confidence. As aleading company in the cosmetics industry, Botanee has always attached importance to investor interests and strives to improve thequality of business operations, investment value, and sustainable development level, actively maintaining market stability. Based onconfidence in our future prospects and recognition of our value, we have formulated our “Quality and Return Dual Enhancement”action plan, with the following specific measures:
13.1 Focus on the core business and comprehensively build a skin health internet+ greater health industry groupThe company positions itself as a major greater health industry group in the skin health internet+ sector. Over the years, it hasbeen deeply involved in the functional cosmetics segment, committed to creating China's skin health ecosystem and promoting thedevelopment of China's skincare and greater health industry.In terms of brand positioning, Botanee has a clear multi-brand matrix with "Winona" as the core brand and multiple brandsdeveloping together. It includes the sensitive skin-focused "Winona", the infant and baby skincare brand "Winona Baby", the high-efficiency professional anti-aging skincare brand "AOXMED", the professional acne treatment brand "Beforteen", the mass-marketbeauty brand "Za", and the mass skincare brand focusing on plant-based skincare "PURE&MILD". According to Euromonitor'sstatistics, the "Winona" brand has consistently ranked first in the domestic dermatological skincare market for several years. In 2022,the leading advantage of the "Winona" brand continued to expand, with a significant increase in market share in the domesticdermatological skincare market compared to the same period last year, reaching approximately 23.2%, demonstrating a strong marketpresence.In terms of channel strategy, the company has established a foundation through offline pharmaceutical channels and achieved fullonline coverage. By leveraging new technologies such as the internet and artificial intelligence, it has built an omnichannel system fornew retail, successfully achieving cross-sector marketing and penetrating both offline and online channels, effectively covering a widerange of consumer groups. It has become a leading enterprise in China's internet+ greater health industry.
13.2 Uphold technological innovation to continuously strengthen the driving force for company development.
Botanee was selected as a national high-tech enterprise in 2015. With a mission to create a skin health ecosystem in China, it hasestablished research and development centers in Shanghai and Kunming. Based on in-depth understanding of consumer needs and skinscience theory, the company focuses on independent research and development, combining industry, academia, and research to covervarious research disciplines, including basic research, product and raw material evaluation and selection, consumer research, processtechnology research, packaging development, formula R&D, and integrated innovation. Currently, the company has research platformssuch as the Yunnan Specialty Plant Extraction Laboratory, the National Ministry of Education Innovation Team, the Ministry ofEducation Collaborative Innovation Center, the Yunnan Enterprise Technology Center, the Yunnan Engineering Research Center, theYunnan Industrial Design Center, the Yunnan Engineering Technology Research Center, the Yunnan Collaborative Innovation Center,and the Yunnan Postdoctoral Research Workstation. Leveraging the resources and advantages of these research platforms, the companyclosely integrates the cutting-edge strengths of botany, biology, dermatology, and other fields, integrates global scientific researchresources, and continuously provides professional cosmetics that meet the diverse needs of consumers with different skincharacteristics. To date, the company has been honored with titles such as National Green Supply Chain Management DemonstrationEnterprise, National Industrial Design Center, and National Technology Innovation Demonstration Enterprise.
13.3 Focus on Shareholder Returns and Sharing the Achievements of Company Development
Botanee places great emphasis on shareholder returns and is committed to maintaining long-term and stable levels of shareholderreturns while ensuring sustainable and high-quality development. This is done to enhance investor recognition and satisfaction.
The company strictly adheres to the shareholder dividend distribution plan and profit allocation policy. Since its listing three yearsago, the company has consistently carried out cash dividends. As of the end of 2023, the company has cumulatively distributed cashdividends totaling CNY783.66 million. In the future, the company will continue to dynamically balance the development of thecompany, performance growth, and shareholder returns according to its development stage. By considering the company's operatingconditions and business development goals, it will reasonably formulate profit distribution policies, actively engage in cash dividends,and effectively allow investors to share in the company's growth and development achievements. This will continuously strengthen therecognition and satisfaction of a wide range of investors.
13.4 Active Share Repurchases to Maintain Market Stability
In the face of significant market fluctuations, based on confidence in the company's future development prospects and a high levelof recognition for its value, Mr. GUO ZHENYU, Chairman and General Manager of the company, proposed on August 23, 2023, thatthe company repurchase its own shares through centralized competitive trading.
On August 30, 2023, and October 27, 2023, the company held the 10th and 12th meetings of the second session of the board ofdirectors, respectively. During these meetings, the resolutions on the "Proposal on Share Repurchase Plan" and the "Proposal onAdjusting the Share Repurchase Plan" were deliberated and approved. Ultimately, it was agreed that the company would use its ownfunds to repurchase its shares through centralized competitive trading. The total amount of funds for the repurchase plan would not beless than CNY200 million (inclusive) and not exceed CNY300 million (inclusive).
After the share repurchase plan was disclosed, the company actively proceeded with the share repurchase program. As of March 5,2024, the company has cumulatively repurchased 2,994,618 shares through centralized competitive trading, accounting for 0.7069% ofthe company's total share capital. The total amount paid was CNY200,212,194.96 (excluding transaction costs). This initiative aims toeffectively stabilize market operations and boost investor confidence.
13.5 Standardize Operations and Enhance Corporate Governance
Botanee continuously improves its corporate governance system, strictly following the relevant provisions of the Company Law,Securities Law, administrative regulations, departmental rules, China Securities Regulatory Commission, and Shenzhen StockExchange. It formulates and continuously improves governance documents such as the Articles of Association, Shareholders' MeetingRules, Board Meeting Rules, and Supervisory Board Meeting Rules. This is done to enhance the level of standardized operations,strengthen internal control construction and risk prevention capabilities, and promote the fulfillment of duties by the "three meetingsand one layer". The company regulates the rights and obligations of the company and shareholders to prevent abuse of rights anddominant positions that may harm small and medium-sized investors' legitimate rights and interests. It effectively protects thelegitimate rights and interests of small and medium-sized investors.
13.6 Enhance the Quality of Information Disclosure and Effectively Convey Corporate Value
The company strictly complies with the rules of listing supervision and fulfills its obligations of information disclosure. It adheres
to the principles of "truthfulness, accuracy, completeness, timeliness, and fairness" and continuously improves the effectiveness andtransparency of information disclosure. It proactively discloses information that is useful for investors' investment decisions,strengthens the disclosure of key information such as industry development, company business, technological innovation, and riskfactors, and strives to effectively convey important information about the company's operations, management, strategy, finance, andindustry. Redundant information disclosure is minimized, and the company's intrinsic value is accurately conveyed to provide a basisfor investors' decision-making. In the 2022-2023 fiscal year, the company obtained an "A-level" rating for information disclosure fromthe Shenzhen Stock Exchange. The company will continue to enhance the quality of information disclosure, increase investors'understanding of the company's production and operations, and better convey the company's value.In the future, the company will continue to strengthen its focus on the core business, enhance its innovative developmentcapabilities, improve the quality of information disclosure, and strengthen the level of standardized operations. It will implement theinvestor-oriented concept, firmly establish a shareholder return consciousness, fulfill the responsibilities and obligations of a listedcompany, and continue to practice the "Quality and Return Dual Enhancement" action plan. It will effectively enhance investors'satisfaction, actively contribute to market stability and investor confidence, and play an active role.
Section IV Corporate Governance
1. Overview of Our Corporate Governance
1.1 General Meeting of Shareholders
As the highest authority of Botanee and composed of all shareholders, the General Meeting of Shareholders decides on theCompany’s business policies, investment plans, and major matters, and legally performs its rights and obligations under the CompanyLaw and our Articles of Association. We released the revised version of the Rules of Procedure for the General Meeting ofShareholders in March 2022, which includes improvements in the operating mechanism for the General Meeting of Shareholders.Since the establishment of Botanee as a joint-stock company, the General Meeting of Shareholders has maintained regulatedoperations in accordance with the provisions of the Company Law, our Articles of Association, and the Rules of Procedure for theGeneral Meeting of Shareholders. Previous sessions of the General Meeting of Shareholders complied with applicable laws andregulations as well as our Articles of Association on convening process, attendance rate, rule of procedures, voting method, content ofresolution, etc. All of them were legal and valid in terms of convening process and the content of resolution, without any violations ofthe Company Law and other regulations by the Board of Directors or senior management officers in performing their functions andpowers.
1.2 Board of Directors
As the operational decision-making body of the Company, the Board of Directors operates and manages corporate property, andreports to the General Meeting of Shareholders. We released the revised version of Rules of Procedure for the Board of Directors inMarch 2022, which includes improvements in the operating mechanism for the Board of Directors.
The Board of Directors consists of 9 directors (including 3 independent directors), who are elected or replaced through theGeneral Meeting of Shareholders. The Board of Directors shall have 1 Chairman, elected by more than half of total directors. Thedirectors shall have a three-year term of office, and can be reelected and reappointed for consecutive terms upon expiration of currentterm of office.
Previous meetings of the Board of Directors complied with applicable laws and regulations as well as our Articles of Associationin terms of convening process, attendance rate, rule of procedures, voting method, content of resolution, etc. All of them were legaland valid in terms of convening process and the content of resolution, without any violations of the Company Law and otherregulations by senior management officers in performing their functions and powers.
1.3 Board of Supervisors
The Board of Supervisors is the body for supervising and inspecting the Company’s business activities, which reports to theGeneral Meeting of Shareholders. We introduced the revised version of the Rules of Procedure for the Board of Supervisors in March2022, which improves the operating mechanism for the Board of Supervisors.
The Board of Supervisors shall be composed of 3 supervisors, including 1 employee representative. The non-employeerepresentative supervisors are elected through the General Meeting of Shareholders, and employee representative is democraticallyelected by employees through the Workers’ Representative Congress. The Board of Supervisors shall have 1 Chairman, elected bymore than half of all total supervisors.
During the reporting period, the Board of Supervisors held several meetings. All previous meetings convened by it complied withapplicable laws and regulations and our Articles of Association regarding convening process, attendance rate, rule of procedures,voting method, content of resolution, etc. The meetings were legal and valid in terms of convening process and the content ofresolution, without any violations of the Company Law and other regulations by the Board of Directors or senior management officersin performing their functions and powers.
1.4 Independent Directors
We introduced the revised version of the Working System for Independent Directors in March 2022, which improves theoperating mechanism for independent directors.
Since taking office, the independent directors have earnestly performed their functions and powers, improved the soundness ofdecision making by the Board of Directors, and safeguarded the rights and interests of small and medium investors in accordance withthe Company Law and other laws, regulations and rules, our Articles of Association and Working System for Independent Directors.Acting with expertise, diligence, care, and ethics, the independent directors have played a good role in helping the Board of Directorsformulate development strategies and investment plans, and making manufacturing and operational decisions, having effectivelyensured the soundness and reasonableness of our business decisions.
During the reporting period, the independent directors performed their functions and powers in accordance with relevant rules andregulations, and safeguarded the Company’s overall interests without being influenced by our controlling shareholders, actualcontrollers and other organizations or individuals with an interest in the Company. They conscientiously reviewed materials beforemeetings of the Board of Directors, attentively listened to director opinions, deliberated proposals, voted by their true intentions, andsigned meeting minutes after meticulously checking them.
1.5 Board Secretary
As a senior management officer of Botanee, the Board Secretary reports to the Company and the Board of Directors, andexercises rights and perform obligations under the Company Law and our Articles of Association. The revision of our Working Systemfor the Secretary of the Board of Directors was released in July 2021, which improves the operating mechanism for the BoardSecretary.
Since being appointed, the Board Secretary has diligently and conscientiously prepared for the General Meeting of Shareholdersand meetings of the Board of Directors, attended the General Meeting of Shareholders as well as meetings of the Board of Directors,the Board of Supervisors, and senior management officers, and produced meeting minutes in accordance with laws, regulations andour Articles of Association. The Board Secretary also deals with information disclosure, investor relations management, training onsecurities laws and regulations, listing rules of the Shenzhen Stock Exchange, relevant regulations, and other matters for directors,supervisors and senior management officers, playing a great role in improving our governance structure and coordinating with variousintermediaries.
Whether there was any significant differences between our actual corporate governance and laws, administrative regulations, andthe rules of CSRC governing the governance of listed companies or not:
□ Yes ?No
2. Independence of Our Assets, Personnel, Finance, Organizations and Businesses Separatefrom the Controlling Shareholder and the Actual Controller
We operate in strict accordance with the Company Law, the Securities Law and other applicable laws and regulations as well asour Articles of Association, and continually improve our corporate governance structure based on actual situation. The Company isindependent of our controlling shareholder, actual controller and other enterprises controlled by them in terms of assets, personnel,finance, organizational structure, and business, and is able to maintain independent and sustainable market-oriented operations.
2.1 Asset Integrity
We own key manufacturing systems, auxiliary manufacturing systems, and supporting facilities related to manufacturing andoperations, legally enjoy the ownership or right of use of main land, factories, machinery and equipment, trademarks, patents, and non-patented technologies related to our manufacturing and operations, and have independent raw materials procurement and product salessystems. The property rights of assets between the Company and our shareholders are clearly defined, and our manufacturing andoperational locations are independent, without reliance on our shareholders.
2.2 Personnel Independence
Our General Manager, Deputy General Managers, Chief Financial Officer, Board Secretary, and other senior managementofficers do not hold other positions except for director or supervisor in other enterprises of our controlling shareholder and actual
controller as well as other enterprises controlled by our controlling shareholder and actual controller, and do not receive remunerationfrom such enterprises. Besides, our financial personnel do not work part-time in such enterprises.
2.3 Financial Independence
We run an independent finance department with independent full-time financial personnel, and have established an independentfinancial accounting system in accordance with the requirements of the Accounting Law of the People’s Republic of China and otherrelevant laws and regulations, so that we can make financial decisions independently. We execute a regulated financial accountingsystem, and implement our financial management system for subsidiaries and branches at all levels. The Company and its subsidiariesat all levels have independent accounts in the bank, with no sharing of bank account with other enterprises of our controllingshareholder and actual controller as well as other enterprises controlled by them.
2.4 Institutional Independence
We have our own operation and management bodies which are constantly optimized, and independently exercise our operationand management functions and powers. Our management bodies include the General Meeting of Shareholders, the Board of Directors,the Board of Supervisors, General Manager, etc., which exercise their operation and management functions and powers according tolaw. There is no confusion among the Company and other enterprises of our controlling shareholder and actual controller as well asother enterprises controlled by them.
2.5 Business Independence
We mainly engage in the R&D, manufacturing, and sales of cosmetics. Our business is independent of other enterprises of ourcontrolling shareholder and actual controller as well as other enterprises controlled by them. There is no horizontal competitionbetween the Company and such enterprises, or connected transactions that seriously affect our independence or are unfair.
2.6 Stable Main Business, Control Power, and Management Team
Our main business, control power, and management team are stable, with no significant adverse changes over the past threeyears. The ownership of the Company’s shares held by our controlling shareholder, shareholder controlled by the actual controller,and the actual controller is clear. Our actual controller has not changed over the past three years, and there was no major ownershipdisputes that may lead to a change of control over the Company.
3. Horizontal Competition
□ Applicable ? N/A
4. Annual and Extraordinary General Meetings of Shareholders Convened during theReporting Period
4.1 General Meetings of Shareholders Convened During the Reporting Period
| Session | Type | Investor participation ratio | Convened on | Disclosed on | Resolution |
| 2021 General Meetings of Shareholders | Annual general meeting of shareholders | 74.86% | May 17, 2023 | May 17, 2023 | Participants voted on 22 proposals offline or online. For details, please refer to the Announcement on Resolutions of 2021 General Meeting of Shareholders of Yunnan Botanee Bio-Technology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn) . |
4.2 Extraordinary General Meetings of Shareholders Convened at the Request of Preference ShareholdersWhose Voting Right Have Been Resumed
□ Applicable ? N/A
5. Differences in Voting Rights
□ Applicable ? N/A
6. Red Chip Structure-based Corporate Governance
□ Applicable ? N/A
7. Directors, Supervisors and Senior Management Officers
7.1 General Information
| Name | Gender | Age | Position | Incumbent/ former | Term began from | Term end on | Number of shares held at the beginning of the reporting period | Number of increase d shares in current period | Number of decrease d shares in current period | Other share increase/ decrease | Number of shares at the end of the period | Reasons for the share increase/ decrease |
| Guo Zhenyu | Male | 60 | Chairman & General Manager | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Zhou Kui | Male | 55 | Director | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Gao Shaoyang | Male | 47 | Director & Deputy General Manager | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Ma Xiao | Male | 41 | Director & Deputy General Manager | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Zhou Wei | Female | 66 | Director | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Zhang Mei | Female | 44 | Director | Incumbent | May 17, 2023 | May 8, 2025 | N/A | |||||
| Zhang Mei | Female | 44 | Deputy General Manager | Incumbent | Feb. 28, 2023 | May 8, 2025 | N/A | |||||
| Li Ning | Male | 61 | Independent Director | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Wang Ao | Male | 53 | Independent Director | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Li Zhiwei | Male | 46 | Independent Director | Incumbent | Aug. 9, 2021 | May 8, 2025 | N/A | |||||
| Yu Shiru | Male | 52 | Supervisor | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Li Lei | Male | 44 | Supervisor | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Yang Zurong | Male | 48 | Employee Supervisor | Incumbent | Marc. 6, 2019 | May 8, 2025 | N/A | |||||
| Wang Long | Male | 41 | Financial Director & Board Secretary | Incumbent | Mar. 6, 2019 | May 8, 2025 | N/A | |||||
| Wang Long | Male | 41 | Deputy General Manager | Incumbent | Feb. 28, 2023 | May 8, 2025 | N/A | |||||
| Wang Feifei | Male | 39 | Deputy General Manager | Incumbent | Feb. 28, 2023 | May 8, 2025 | N/A | |||||
| Dong Junzi | Male | 42 | Director & Deputy General Manager | Former | Mar. 6, 2019 | Feb. 28, 2023 | N/A |
Total
| Total | -- | -- | -- | -- | -- | -- | -- |
Whether there was any departure of directors and supervisors and dismissal of senior management officers during the term ofoffice during the reporting period or not:
□Yes ?No
On February 28, 2023, we received a written resignation letter from Mr. Dong Junzi, who applied for resignation from hisposition as Director of the Second Board of Directors, member of the Strategy Committee, member of the Nomination Committee,and Deputy General Manager of the Company for personal reasons, and will no longer hold any position in the Company afterresignation. In accordance with the provisions of the Company Law and our Articles of Association, his resignation letter shall takeeffect from the date of delivery to our Board of Directors. For details, please refer to the Announcement of Yunnan Botanee Bio-Technology Group Co., Ltd. on the Resignation of Directors, By-election of Directors and Appointment of Senior ManagementOfficers (2023-005) disclosed by CNINFO (http://www.cninfo.com.cn).
Change of directors, supervisors and senior management officers:
? Applicable □ N/A
| Name | Position | Type of change | Date of change | Reason of change |
| Zhang Mei | Deputy General Manager | Appointed | Feb. 28, 2023 | After nomination by our General Manager and review by the Nomination Committee under our Board of Directors, the Fifth Meeting of our Second Board of Directors deliberated on and approved the Proposal on the Appointment of Senior Management Officers on February 28, 2023. Then on May 17, 2023, our 2022 General Meeting of Shareholders deliberated on and approved the Proposal on By-Election of Non-Independent Director of the Second Board of Directors, and agreed to hire Ms. Zhang Mei as our non-independent director and Deputy General Manager (senior management officer). Ms. Zhang Mei’s term as Deputy General Manager (senior management officer) shall commence from the date of deliberation and approval by this meeting of the Board of Directors. Her term as a non-independent director shall commence from the date of deliberation and approval by this General Meeting of Shareholders, and end on the date when the terms of the Second Board of Directors expires. For details, please refer to the Announcement of Yunnan Botanee Bio-Technology Group Co., Ltd. on the Resignation of Directors, By-election of Directors, and Appointment of Senior Management Officers disclosed by CNINFO (http://www.cninfo.com.cn), and the Announcement of Resolutions of the 2022 General Meeting of Shareholders of Yunnan Beitaini Biotechnology Group Co., Ltd. |
| Director | Appointed | May 17, 2023 | ||
| Wang Long | Deputy General Manager | Appointed | Feb. 28, 2023 | After nomination by our General Manager and review by the Nomination Committee under our Board of Directors, the Fifth Meeting of our Second Board of Directors deliberated on and approved the Proposal on the Appointment of Senior Management Officers on February 28, 2023, at which it was agreed that Mr. Wang Long be appointed as our Deputy President Manager (senior management officer). Mr. Wang Long’s term as Deputy President Manager (senior management officer) shall commence from the date of deliberation and approval by this meeting of the Board of Directors, and end on the date when the terms of the Second Board of Directors expires. For details, please refer to the Announcement of Yunnan Botanee Bio-Technology Group Co., Ltd. on the Resignation of Directors, By-election of Directors, and Appointment of Senior |
Management Officer disclosed by CNINFO(http://www.cninfo.com.cn).
| Management Officer disclosed by CNINFO (http://www.cninfo.com.cn). | ||||
| Wang Feifei | Deputy General Manager | Appointed | Feb. 28, 2023 | After nomination by our General Manager and review by the Nomination Committee under our Board of Directors, the Fifth Meeting of our Second Board of Directors deliberated on and approved the Proposal on the Appointment of Senior Management Office on February 28, 2023, at which it was agreed that Mr. Wang Feifei be appointed as our Deputy General Manager (senior management officer). Mr. Wang Feifei’s term as our Deputy General Manager (senior management officer) shall commence from the date of deliberation and approval by this meeting of the Board of Directors, and end on the date when the terms of the Second Board of Directors expires. For details, please refer to the Announcement of Yunnan Botanee Bio-Technology Group Co., Ltd. on the Resignation of Directors, By-election of Directors, and Appointment of Senior Management Officers disclosed by CNINFO (http://www.cninfo.com.cn). |
| Dong Junzi | Director & Deputy General Manager | Resignation& dismissal | Feb. 28, 2023 | On February 28, 2023, we received a written resignation letter from Mr. Dong Junzi, who applied for resignation from his position as Director of the Second Board of Directors, member of the Strategy Committee, member of the Nomination Committee, and Deputy General Manager of the Company for personal reasons, and will no longer hold any position in the Company after resignation. In accordance with the provisions of the Company Law and our Articles of Association, his resignation letter shall take effect from the date of delivery to our Board of Directors. For more information, please refer to the Announcement of Yunnan Botanee Bio-Technology Group Co., Ltd. on the Resignation of Directors, By-election of Directors, and Appointment of Senior Management Officers disclosed by CNINFO (http://www.cninfo.com.cn). |
7.2 Brief Biographies and Positions Held
Our incumbent directors, supervisors and senior management officers’ professional backgrounds, key work experience, andcurrent responsibilities at Botanee at the end of the reporting period:
7.2.1 Brief Biographies of Board Members
At the end of the reporting period, our Board of Directors consisted of 9 directors, 3 of whom are independent directors. Theirbrief biographies are as follows:
Mr. Guo Zhenyu, born in November 1963, is a Canadian citizen with the right of residence in China (valid for five years). Heholds a doctoral degree in Electrical Engineering. Guo served as Chairman of World Self-Medication Industry, and Chairman of ChinaNonprescription Medicines Association. He is now Chairman of International Self-care Fund (ISF), Vice Chairman of ChinaNonprescription Medicines Association, Deputy Director of Skin Professional Committee of Chinese Non-government MedicalInstitutions Association, and Executive Vice Chairman of Yunnan Non-governmental Enterprises Association. He worked as a lecturerat the Department of Radio, Yunnan University from September 1986 to July 1988; a teaching assistant at University of NewBrunswick, Canada from August 1988 to August 1989; an assistant professor at School of Medicine, Université de Montréal, Canadafrom July 1995 to July 1996; and a senior researcher at Institute of Clinical Medicine, Montreal, Canada from July 1995 to July 1996.From September 1996 to July 2002, he served as Assistant Professor, Associate Professor, and Tenured Professor at School ofEngineering, George Washington University. After that, he served as Chairman and President of Dihon Pharmaceutical Group Co.,Ltd. from January 2003 to November 2014, Chairman of Botanee Co., Ltd. from June 2014 to December 2016, Chairman and GeneralManager of Botanee Co., Ltd. from December 2016 to February 2019, and Chairman and General Manager of Botanee since March2019.
Mr. Zhou Kui, born in 1968, is a Chinese national with no right of residence abroad. He graduated from School of Economics andManagement, Tsinghua University in 2000 with a Master of Business Administration, and has worked at Sequoia Capital China as apartner since 2005. Zhou served as c of Botanee Co., Ltd. from November 2016 to February 2019, and has been Director of Botaneesince March 2019.
Mr. Gao Shaoyang, a Chinese citizen, was born in November 1976, and has no permanent residency overseas. Holding abachelor’s degree in Chemical Pharmaceuticals, he served as technician and department manager at Kunming Dihon PharmaceuticalCo., Ltd. from July 1999 to February 2005; Deputy General Manager of Shanghai Kangwang Daily Cosmetics Co., Ltd. fromFebruary 2005 to August 2008; and Project Director of Dihon Pharmaceutical Group Co., Ltd. from August 2008 to August 2012. Gaojoined Botanee Co., Ltd. in August 2012, serving as Executive Director and General Manager of Botanee Co., Ltd. from November2012 to June 2014, Director and General Manager of Botanee Co., Ltd. from June 2014 to December 2016, Director of Botanee Co.,Ltd. from December 2016 to December 2017, and Director and Deputy General Manager of Botanee Co., Ltd. from October 2018 toFebruary 2019. Since March 2019, he has served as Director and Deputy General Manager of Botanee.
Mr. Ma Xiao, born in September 1982, is a Chinese national with no right of residence abroad. Holding a master’s degree inChemical Engineering and a master’s degree in Business Administration, Ma is a licensed pharmacist and a senior engineer. Heserved as R&D Director and R&D Manager of Dihon Pharmaceutical Group Co., Ltd. from July 2004 to June 2010, and DeputyGeneral Manager and General Manager of Shanghai Dihon Pharmaceutical Co., Ltd. from June 2010 to January 2013. He joinedBotanee Co., Ltd. in January 2013, served as Head of R&D and Supply Chain of Botanee Co., Ltd. from July 2013 to June 2014, Headand Supervisor of R&D and Supply Chain of Botanee Co., Ltd. from June 2014 to December 2017, and Director and Deputy GeneralManager of Botanee Co., Ltd. from December 2017 to February 2019. Since March 2019, he has served as Director and DeputyGeneral Manager of Botanee.
Ms. Zhou Wei, born in April 1957, is a Chinese national with no right of residence abroad. She has a bachelor’s degree in PlantProtection, and is a researcher. She served as Office Director at Institute of Biology, Guizhou Academy of Sciences from January 1982to October 1988; Deputy Secretary of the CPC General Branch and Deputy Director of Scientific Research Department, PlantProtection Department, Guizhou University from October 1988 to March 1993; Manager and Deputy General Manager of InvestmentDepartment, Hainan Comprehensive Agricultural Development Corporation, and Chairman of Hainan Fuhai Food Industry Co., Ltd.from March 1993 to December 1995; Deputy General Manager of Guizhou University General Industry Company from December1995 to July 1998; and Scientific Research Director of Key Laboratory, Microbial Fermentation Engineering, Yunnan University,Deputy Director of “211” Office, and Researcher of State Key Laboratory of Biological Resources Protection and Utilization fromJuly 1998 to December 2016. Then she worked as Project Manager of Botanee and its predecessor from December 2016 to June 2019,and Director and Project Manager of Botanee since June 2019.
Ms. Zhang Mei, born in June 1979, is a Chinese national with no right of residence abroad. She holds a bachelor’s degree inTraditional Chinese Medicine and Pharmaceutical Engineering, and a master’s degree in Business Administration from FudanUniversity, China. She worked as Business Manager and E-commerce Distribution Director of Botanee Co., Ltd. from July 2012 toMarch 2017; Deputy General Manager of the E-commerce Division of Botanee Co., Ltd. from March 2017 to February 2019; DeputyGeneral Manager of the E-commerce Division of Botanee from March 2019 to 2019; General Manager of Brand Marketing Center ofBotanee from November 2019 to December 2021; General Manager of Beauty Instrument Project of Botanee from December 2021 toNovember 2022; Marketing Assistant to President of Botanee from December 2022to January 2023; and Deputy General Manager ofBotanee from February 2023 to April 2023. Since May 2023, she has served as Botanee’s Director and Deputy General Manager.
Mr. Li Ning, born in December 1962, is a Chinese national with no right of residence abroad. With a master’s degree in Law, heis a full-time lawyer. From September 1989 to June 1994, he served as Assistant Judge of Yunnan Provincial Higher People's Court;from August 1994 to December 1999, he served as apart-time lawyer at Yuntai Law Firm; from December 1999 to June 2002, heserved as Senior Partner and Deputy Chief Lawyer at Yunnan Qianhe Law Firm. Since June 2002, he has served as a Senior Partnerand Chief Lawyer at Yunnan Zhiguo Law Firm. Since March 2019, he has served as an Independent Director of the Company.
Mr. Wang Ao, born in October 1970, is a Chinese national with no right of residence abroad. With a bachelor’s degree inPharmacy, he worked as an official at Hospital Management Research Institute under the Ministry of Health from July 1994 toDecember 1998, and Director of Zhejiang Office of Shenzhen Sanjiu Pharmaceutical Trading Co., Ltd. from January 1999 to
December 2003. He serves as Secretary General of China Nonprescription Medicines Association since January 2004, and anindependent director of Botanee since March 2019.Mr. Li Zhiwei was born in October 1977 in Hong Kong, China, and obtained Master of Business Administration from Universityof Oxford. He is a member of Association of Chartered Certified Accountants in the UK, a Chartered Financial Analyst (CFA) offeredby US-based CFA Institute, and a member of Hong Kong Institute of Certified Public Accountants. Li worked at China tax andbusiness advisory team for PricewaterhouseCoopers HongKong, and for Sumitomo Corporation Equity Asia Limited. He served as co-founder and Chief Financial Officer of Guangzhou Fans-me Technology Co., Ltd. from March 2014 to September 2015; Director ofXin Yi Holding Ltd. (Beauty Hera) from March 2016 to October 2017; and worked in iClick Interactive Asia Group Ltd. (NASDAQlisted company: ICLK) since 2019, during which he served as its Chief Financial Officer from January 2019 to January 2022, Directorfrom July 2019 to January 2022, and Chief Strategy Advisor from February 2022 to date. Since August 2021, Li has served as anindependent director of Botanee.
7.2.2 Brief Biographies of Supervisors
Our Board of Supervisors consists of 3 supervisors, and has 1 Chairman. The brief biographies of our supervisors are presentedbelow:
Mr. Yu Shiru , born in March 1971, is a Chinese national with no right of residence abroad. With a bachelors degree in OrganicChemical Engineering, he is a licensed pharmacist and a senior engineer. Yu served as a technician at Kunming Bada Plant ChemicalCo., Ltd. from July 1995 to December 1996; and Technical Vice President of Dihon Pharmaceutical Group Co., Ltd. from January1997 to June 2015; Director the central factory of Botanee Co., Ltd. from July 2015 to February 2019; and Director of Botanee’scentral factory and General Manager of its Quality Management Center from March 2019 to December 2022. Since March 2019, hehas served as Chairman of Botanee’s Board of Supervisors.
Mr. Li Lei, born in July 1979, is a Chinese national with no right of residence abroad, and holds an Executive Master of BusinessAdministration. He worked as Financial Supervisor and Financial Manager of Telling Communication Co., Ltd. from December 2005to December 2011; Financial Manager of Yunnan Longrun Pharmaceutical Co., Ltd., and Yunnan Longrun Group Co., Ltd. fromDecember 2011 to August 2012; Chief Financial Officer of Botanee Co., Ltd. from August 2012 to December 2016; Audit Director ofBotanee Co., Ltd. from December 2016 to December 2017, and Audit Director and Supervisor of Botanee Co., Ltd. from December2017 to February 2019. Since March 2019, he has served as Botanee’s Audit Director and supervisor.
Mr. Yang Zurong, born in September 1975, is a Chinese national with no right of residence abroad. With a bachelor’s degree inTraditional Chinese Medicine, he is an engineer and a licensed pharmacist. He worked as a technician, quality controller, warehousekeeper, procurement planner, Deputy Manager, and Manager of the Supply Department of Dihon Pharmaceutical Group Co., Ltd. fromJuly 1998 to September 2010; Quality Director of Dihon Pharmaceutical Group Co., Ltd. from May 2008 to December 2016; andManager of nvestment Department, Deputy Director of President’s Office, Director of President’s Office, and Manager ofAdministration Department of Dihon Pharmaceutical Group Co., Ltd. from September 2010 to December 2016. Yang served asDirector of General Manager’s Office of Botanee Co., Ltd. from January 2017 to October 2018; Director of General Manager’s Officeand Employee Representative Supervisor of Botanee Co., Ltd. from November 2018 to February 2019; and Director of GeneralManager’s Office and Deputy General Manager of Botanee’s factory in Majinpu from March 2019 to December 2022. Since March2019, he has worked as the Company’s employee representative supervisor.
7.2.3 Brief Biographies of Senior Management Officers
Mr. Guo Zhenyu is currently the Company’s Chairman and General Manager. For more information about him, please refer to“Brief Biographies of Board Members” in this section.
Mr. Gao Shaoyang is currently the Company’s Director and Deputy General Manager. For more information about him, pleaserefer to “Brief Biographies of Board Members” in this section.
Mr. Ma Xiao serves as the Company’s Director and Deputy General Manager.For more information about him, please refer to“Brief Biographies of Board Members” in this section.
Ms. Zhang Mei serves as the Company’s Director and Deputy General Manager. For more information about her, please refer to“Brief Biographies of Board Members” in this section.
Mr. Wang Long, born in October 1982, is a Chinese national with no right of residence abroad. He holds a bachelor’s degree inAccounting from Tsinghua University, and is a member of Certified Practising Accountant (CPA) Australia. He served as Accountant,Financial Manager, and Assistant to General Manager of Finance of Jiangsu Simcere Pharmaceutical Co., Ltd. from July 2006 toMarch 2011; Chief Financial Officer of Simcere Zikang Jiangsu Pharmaceutical Co., Ltd. from March 2011 to January 2014; andChief Financial Officer of Edding Pharmaceutical (China) Co., Ltd. from January 2014 to November 2016. Then he works as ChiefFinancial Officer of Botanee Co., Ltd. since December 2016, Chief Financial Officer and Board Secretary of Botanee from October2018 to February 2019, Financial Director and Board Secretary of Botanee from March 2019 to January 2023, and Deputy GeneralManager, Financial Director, and Board Secretary since February 2023.
Mr. Wang Feifei, born in June 1984, is a Chinese national with no right of residence abroad. Holding a master’s degree inChemical Engineering, he is a senior engineer and licensed pharmacist. Wang worked as R&D Director of Shanghai Botanee, asubsidiary of Botanee Co., Ltd. from December 2014 to February 2019; R&D Director of Shanghai Botanee, a subsidiary of Botanee,from March 2019 to March 2020; R&D Director of Shanghai Jiyan Biomedicine, a subsidiary of Botanee, from March 2020 toJanuary 2021; and Executive Director of Botanee Research Institute from January 2021 to January 2023. Since February 2023, he hasserved as the Deputy General Manager of Botanee.
Positions held in Botanee’s shareholding entities
? Applicable □ N/A
| Name | Shareholding entity | Position in the shareholding entity | Term began from | Term end on | Receiving allowance from the shareholding entity |
| Guo Zhenyu | Nuona Technology | Chairman | Feb. 1, 2014 | No | |
| Guo Zhenyu | Yunnan Haqisheng | Executive Director | Nov. 1, 2018 | No | |
| Guo Zhenyu | Yunnan Haipo Enterprise Management Co., Ltd. | Executive Director | Aug. 1, 2017 | No | |
| Guo Zhenyu | Hanson Cosmeceutical (Hong Kong) Company Limited | Director | Dec. 1, 2013 | No | |
| Guo Zhenyu | Hanson Cosmeceutical Company Limited | Director | Dec. 1, 2013 | No | |
| Gao Shaoyang | Nuona Technology | Director | Nov. 1, 2012 | No | |
| Ma Xiao | Xiamen Chonglou Yunshui Investment Partnership (Limited Partnership) | Executive Partner | Dec. 1, 2018 | No | |
| Wang Long | Kunming Panfu Investment Partnership (Limited Partnership) | Executive Partner | Nov. 1, 2019 | No | |
| Note | N/A | ||||
Positions held in other entities
? Applicable □ N/A
| Name | Entity | Position in the entity | Term began from | Term end on | Receiving allowance from the entity |
| Guo Zhenyu | Wellness Republic (Hong Kong) Company Limited | Director | Dec. 2013 | No | |
| Guo Zhenyu | Wellness Republic Company Limited | Director | Jul. 2023 | No | |
| Wang Ao | China Nonprescription Medicines Association | Secretary General | Apr. 2014 | Oct. 2024 | Yes |
| Li Ning | Yunnan Zhiguo Law Firm | Senior partner & chief lawyer | Jun. 2002 | ||
| Li Ning | Kunming Zhongbei Transportation Tourism | External director | Sept. 2022 |
(Group) Co., Ltd.
| (Group) Co., Ltd. | |||||
| Li Ning | Yunnan Jianshui Rural Commercial Bank Co., Ltd. | External supervisor | Jan. 2023 | ||
| Li Ning | Yunnan Dianzhong New Area Equity Investment Management Co., Ltd. | External director | Apr. 2022 | ||
| Li Ning | Kunming Returned Overseas Chinese Federation | Part-time Vice Chairman | Aug. 2022 | ||
| Li Zhiwei | iClick Interactive Asia Group Limited | Chief Strategy Advisor | Feb. 2022 | ||
| Zhou Kui | Sequoia Capital China | Partner | Oct. 2005 | ||
| Zhou Kui | Guangzhou Koncen Biotechnology Co., Ltd. | director | Oct. 2013 | ||
| Zhou Kui | Beijing Sudo Technology Co., Ltd. | Director | Sept. 2021 | ||
| Zhou Kui | Shenzhen Fussen Technology Co., Ltd. | Director | May 2019 | ||
| Zhou Kui | Hangzhou Tiangu Information Technology Co., Ltd. | Director | Dec. 2021 | ||
| Zhou Kui | Shanghai YITU Information Technology Co., Ltd. | Director | Dec. 2014 | ||
| Zhou Kui | Eversec (Beijing) Technology Co., Ltd. | Director | May 2016 | ||
| Zhou Kui | Beijing Internet Based Engineering Co., Ltd. | Director | Dec. 2020 | ||
| Zhou Kui | Goodo Technology (Shanghai) Co., Ltd. | Director | Apr. 2021 | ||
| Zhou Kui | Shaanxi Huazhu Technology Co., Ltd. | Director | Jun. 2020 | ||
| Zhou Kui | Hangzhou Hewu System Tech Co., Ltd. | Director | Sept. 2021 | ||
| Zhou Kui | Beijing Dingxiang Technologies Co., Ltd. | Director | Sept. 2017 | ||
| Zhou Kui | Chengdu Jizhi Life Technology Co., Ltd. | Director | Aug. 2021 | ||
| Zhou Kui | Hangzhou Jinyuan Network Technology Co., Ltd. | Director | Jun. 2016 | ||
| Zhou Kui | Wuhan ABclonal Biotechnology Co., Ltd. | Director | Oct. 2021 | ||
| Zhou Kui | Moore Threads Intelligent Technology (Beijing) Co., Ltd. | Director | Feb. 2021 | ||
| Zhou Kui | Shukun Technology Co., Ltd. | Director | Dec. 2020 | ||
| Zhou Kui | Beijing Yuanxin Technology Group Co., Ltd. | Director | Nov. 2015 | ||
| Zhou Kui | JST Group Corporation Limited | Director | Feb. 2023 | ||
| Zhou Kui | Beijing Uteje Information Technology Co., Ltd. | Director | Nov. 2019 | ||
| Zhou Kui | Hangzhou Rongyisuan Technology Co., Ltd. | Director | Aug. 2019 | ||
| Zhou Kui | Beijing I Yong Cloud Co., Ltd. | Director | Apr. 2021 | ||
| Zhou Kui | Beijing InnoChem Science & Technology Co., Ltd. | Director | Dec. 2021 | ||
| Zhou Kui | Borui Persagy Technology Co., Ltd. | Director | May 2019 | ||
| Zhou Kui | Beijing PeopleSoft Interactive Network Technology Co., Ltd. | Director | Jan. 2021 | ||
| Zhou Kui | Shanghai Qingyi Industrial Software Co., Ltd. | Director | Jun. 2021 |
Zhou Kui
| Zhou Kui | Beijing Changyuanjia Information Technology Co., Ltd. | Director | Sept. 2021 | ||
| Zhou Kui | Fapon Biotech Inc. | Director | Sept. 2020 | ||
| Zhou Kui | Yitu limited | Director | Jun. 2014 | ||
| Zhou Kui | IngageApp Global Limited | Director | Apr. 2016 | ||
| Zhou Kui | Pony AI Inc. | Director | Mar. 2017 | ||
| Zhou Kui | YIMUTIAN INC. | Director | Dec. 2014 | ||
| Zhou Kui | Hangzhou Connect Medical Value Technology Co., Ltd. | Director | Mar. 2021 | ||
| Zhou Kui | Hangzhou Eagle Cloud Security Technology Co., Ltd. | Director | Oct. 2021 | ||
| Zhou Kui | Quanzhi Technology (Hangzhou) Co., Ltd. | Director | Nov. 2021 | ||
| Zhou Kui | Hecom (Beijing) Technology Co., Ltd. | Director | Feb. 2022 | ||
| Zhou Kui | Youdrop Internet (Beijing) Information Technology Co., Ltd. | Director | Mar. 2022 | ||
| Zhou Kui | Shenzhen Congheng Technology Co., Ltd. | Director | Oct. 2022 | ||
| Note | Mr. Zhou Kuialso holds positions in some entities under Sequoia Capital China. | ||||
Punishments imposed over the past three years by securities regulators on our incumbent directors, supervisors and seniormanagement officers, including those who have resigned, during the reporting period:
□ Applicable ? N/A
7.3 Remuneration of Directors, Supervisors and Senior Management Officers
Decision-making procedures, grounds on which decisions are made, and actual remuneration payment of directors, supervisorsand senior management officers:
The remuneration of our directors, supervisors, senior management officers, and other core personnel consists of salary, bonus,welfare and more. We pay them remuneration based on their responsibilities, contributions, criticality, etc. The remuneration systemand remuneration plan for directors and senior management officers are formulated by our Remuneration Committee. Theremuneration plan for directors shall be submitted to the Board of Directors for deliberation and then to the General Meeting ofShareholders for approval, while that for senior management officers shall be directly submitted to the Board of Directors fordeliberation and approval. During the reporting period, the allowance for each independent director was RMB 200,000 before tax. Theallowance plan shall be formulated by the Remuneration Committee, deliberated on by the Board of Directors, and then be approved bythe General Meeting of Shareholders.
Remuneration of directors, supervisors and senior management officers during the Reporting Period:
Unit: CNY
| Name | Gender | Age | Position | Incumbent/ former | Total before-tax remuneration from Botanee | Receiving remuneration from Botanee’s related parties |
| Guo Zhenyu | Male | 60 | Chairman & General Manager | Incumbent | 5 million | No |
| Zhou Kui | Male | 55 | Director | Incumbent | No | |
| Gao Shaoyang | Male | 47 | Director & Deputy General Manager | Incumbent | 4 million | No |
| Ma Xiao | Male | 41 | Director & Deputy General Manager | Incumbent | 4 million | No |
| Zhou Wei | Female | 66 | Director | Incumbent | 0.6 million | No |
Zhang Mei
| Zhang Mei | Female | 44 | Director & Deputy General Manager | Incumbent | 2.486 million | No |
| Wang Long | Male | 41 | Deputy General Manager, Financial Director, and Board Secretary | Incumbent | 2.88 million | No |
| Wang Feifei | Male | 39 | Deputy General Manager | Incumbent | 2.6285 million | No |
| Yu Shiru | Male | 52 | Supervisor | Incumbent | 1.012 million | No |
| Li Lei | Male | 44 | Supervisor | Incumbent | 0.8 million | No |
| Yang Zurong | Male | 48 | Employee Supervisor | Incumbent | 0.658 million | No |
| Wang Ao | Male | 53 | Independent director | Incumbent | 0.20 million | No |
| Li Ning | Male | 61 | Independent director | Incumbent | 0.20 million | No |
| Li Zhiwei | Male | 46 | Independent director | Incumbent | 0.20 million | No |
| Dong Junzi | Male | 42 | Director & Deputy General Manager | Former | 1.20 million | No |
| Total | -- | -- | -- | -- | 25.8645 million | -- |
Other information:
□ Applicable ? N/A
8. Duty Performance by Directors during the Reporting Period
8.1 Information of the Board of Directors during the Reporting Period
| Session | Held on | Disclosed on | Resolutions |
| The 5th Meeting of the Second Board of Directors | Feb. 28, 2023 | Mar. 1, 2024 | For details, please refer to the Announcement on Resolutions of the 5th Meeting of the Second Board of Directors of Yunnan Beitaini Biotechnology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). |
| The 6th Meeting of the Second Board of Directors | Mar. 28, 2023 | Mar. 30, 2023 | For details, please refer to the Announcement on Resolutions of the 6th Meeting of the Second Board of Directors of Yunnan Beitaini Biotechnology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). |
| The 8th Meeting of the Second Board of Directors | Apr. 25, 2023 | Apr. 27, 2023 | For details, please refer to the Announcement on Resolutions of the 7th Meeting of the Second Board of Directors of Yunnan Beitaini Biotechnology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). |
| The 8th Meeting of the Second Board of Directors | Jun. 29, 2023 | Jun. 30, 2023 | For details, please refer to the Announcement on Resolutions of the 8th Meeting of the Second Board of Directors of Yunnan Beitaini Biotechnology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). |
| The 9th Meeting of the Second Board of Directors | Aug. 28, 2023 | Aug. 29, 2023 | For details, please refer to the Announcement on Resolutions of the 9th Meeting of the Second Board of Directors of Yunnan Beitaini Biotechnology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). |
| The 10th Meeting of the Second Board of Directors | Aug. 30, 2023 | Aug. 30, 2023 | For details, please refer to the Announcement on Resolutions of the 10th Meeting of the Second Board of Directors of Yunnan Beitaini Biotechnology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). |
| The 11th Meeting of the Second Board of Directors | Sept. 27, 2023 | Sept. 28, 2023 | For details, please refer to the Announcement on Resolutions of the 11th Meeting of the Second Board of Directors of Yunnan Beitaini Biotechnology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). |
| The 12th Meeting of the Second Board of Directors | Oct. 27, 2023 | Oct. 30, 2023 | For details, please refer to the Announcement on Resolutions of the 12th Meeting of the Second Board of Directors of |
Yunnan Beitaini Biotechnology Group Co., Ltd. disclosed byCNINFO (http://www.cninfo.com.cn).
| Yunnan Beitaini Biotechnology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). | |||
| The 13th Meeting of the Second Board of Directors | Dec. 12, 2023 | N/A | N/A |
8.2 Attendance of Directors in Board Meetings and General Meeting of Shareholders
| Attendance of directors in board meetings and General Meeting of Shareholders | |||||||
| Name | Presence due at board meetings during the reporting period | Presence at board meetings offline | Presence at board meetings through telecommunication | Presence at board meetings through a proxy | Absence from board meetings | Absence from board meetings for two consecutive sessions | Presence at General Meeting of Shareholders |
| Guo Zhenyu | 9 | 9 | No | 1 | |||
| Zhou Kui | 9 | 9 | No | 1 | |||
| Gao Shaoyang | 9 | 5 | 4 | No | 1 | ||
| Zhang Mei | 9 | 4 | 5 | No | 1 | ||
| Ma Xiao | 6 | 2 | 4 | No | 1 | ||
| Zhou Wei | 9 | 5 | 4 | No | 1 | ||
| Li Zhiwei | 9 | 7 | 2 | No | 1 | ||
| Li Ning | 9 | 6 | 2 | 1 | No | 1 | |
| Wang Ao | 9 | 1 | 8 | No | 1 | ||
Explanation on failure to attend board meetings for two consecutive sessions:
□ Applicable ? N/A
8.3 Objections from Directors to Corporate Issues
Whether the directors had any objections to issues related to Botanee or not:
□Yes ?No
8.4 Other Information about the Activities of Directors
Whether the suggestions on Botanee proposed by directors were adopted or not:
?Yes □No
9. Activities of Specialized Committees under the Board of Directors during the ReportingPeriod
| Committee | Members | Number of meetings convened | Convened on | Topics deliberated on | Substantial opinions and suggestions | Other information | Objections (if any) |
| Strategy Committee | Jan. 1, 2023-Feb. 28, 2023: Mr. Guo Zhenyu, Mr. Zhou Kui, Mr. Gao Shaoyang, Mr. Dong Junzi, and Mr. Wang | 1 | Mar. 23, 2023 | 2 proposals including the “Proposal on Botanee 2022 Social Responsibility” | Approved the 2 proposals | No | No |
Ao; Feb. 28, 2023-now:
Mr. Guo Zhenyu, Mr.Zhou Kui, Mr. GaoShaoyang, Mr. MaXiao, and Mr. WangAo, of whom Mr. GuoZhenyu is the Chairman(convener)
| Ao; Feb. 28, 2023-now: Mr. Guo Zhenyu, Mr. Zhou Kui, Mr. Gao Shaoyang, Mr. Ma Xiao, and Mr. Wang Ao, of whom Mr. Guo Zhenyu is the Chairman (convener) | |||||||
| Audit Committee | Mr. Li Zhiwei, Mr. Wang Ao, and Mr. Li Ning, of whom Mr. Li Zhiwei is the Chairman (convener) | 4 | Mar. 24, 2023 | 9 proposals including the “Proposal on the Full Text and Summary of Botanee 2022 Annual Report” | Approved the 9 proposals | No | No |
| Apr. 21, 2023 | “Proposal on Botanee March Quarter 2023 Results” | Approved the proposals | No | No | |||
| Aug. 24, 2023 | 3 proposals including the “Proposal on the Full Text and Summary of Botanee 2023 Semi-annual Report” | Approved the 3 proposals | No | No | |||
| Oct. 24, 2023 | “Proposal on Botanee September Quarter 2023 Results” | Approved the proposals | No | No | |||
| Remuneration and Assessment Committee | Mr. Wang Ao, Mr. Zhou Kui, and Mr. Li Ning, of whom Mr. Wang Ao is the Chairman (convener) | 1 | Mar. 23, 2023 | 4 proposals including the “Proposal on Remuneration Plan for Non-Independent Directors of the Second Board of Directors” | Approved the 4 proposals | No | No |
| Nomination Committee | Jan. 1, 2023-Feb. 28, 2023: Mr. Li Ning, Mr. Dong Junzi, and Mr. Li Zhiwei; Feb. 28, 2023-now: Mr. Li Ning, Mr. Ma Xiao, and Mr. Li Zhiwei, of whom Mr. Li Ning is the Chairman (convener) | 1 | Feb. 28, 2023 | 2 proposals including the “Proposal on Nominating Candidates of Non-Independent Directors of the Second Board of Directors” | Approved the 2 proposals | No | No |
10. Activities of the Board of Supervisors
Whether the Board of Supervisors identified any risks within Botanee during the reporting period or not:
□Yes ?No
11. Employees
11.1 Employee Number, Functions, and Levels of Education Received
| Number of in-service employees in Botanee at the end of the reporting period | 481 |
| Number of in-service employees in Botanee’s main subsidiaries at the end of the reporting period | 3,371 |
| Total number of in-service employees at the end of the reporting period | 3,852 |
| Total number of employees receiving remuneration during the current period | 3,852 |
| Number of retirees that receive remuneration from Botanee and its main subsidiaries retirement pension | 1 |
| Functions | |
Function
| Function | Number of employees |
| Manufacturing | 348 |
| Marketing | 2,601 |
| R&D | 498 |
| Administration/management | 405 |
| Total | 3,852 |
| Levels of education received | |
| Level of education received | Number of employees |
| Doctor | 17 |
| Master | 354 |
| Bachelor and other | 3,481 |
| Total | 3,852 |
11.2 Remuneration Policy
We implement a sustainable, competitive salary and welfare system created based on the Company’s short-term, medium-term,and long-term goals as well as strategic planing. Our salary and welfare system, built on simplicity and scientificness, helps us attractand retain high-quality talents. We advocate comprehensive compensation, and give both material and spiritual incentives foremployees.Principles for remuneration: Our employee remuneration system, developed by Human Resources Management Center in strictaccordance with the Labor Law, the Labor Contract Law, and other laws and regulations, has been deliberated on and approved bythe management according to law and our Articles of Association. As stipulated in our Rules of Procedure of Remuneration andAssessment Committee, the remuneration system and remuneration plan for directors and senior management officers shall beformulated by the Remuneration Committee. The remuneration plan for directors formulated by the Remuneration Committee shallbe submitted to the Board of Directors for deliberation and the General Meeting of Shareholders for approval, while that for seniormanagement officers shall be directly submitted to the Board of Directors for deliberation and approval.We give employees remuneration based on their position, personal abilities and performance within corresponding remunerationrange. Employees’ contributions to the Company are primarily reflected in their commitment to job responsibilities and pursuit ofexcellence. Their contributions are the basis for us to give them remuneration, thus ensuring fairness. Regarding welfare, we providestatutory benefits to employees in accordance with laws and regulations, and offer diversified welfare programs to them such asphysical examinations, commercial insurance, and festival activities. We also run “Winona Fund” employee mutual aid program toprovide financial support to those in need.We review and evaluate our remuneration system both on a regular basis and ad hoc., and optimize it in the light of relevantfactors such as market environment, industry conditions, and our actual operations.
11.3 Training Plan
Our talent development is boosted through online platform “Botanee Academy”, with which our internal trainer team composedof middle and senior managers give on-the-job training, skills training, etc. to employees to stimulate their potential and empowertheir career development.
We implement a complete training system centering around Botanee Internal Training Program, Little Wolf Program for coretalents, and New Apollo Program, with a view to cultivating talents at all levels for the Company in the light of our employmentstandards and Botanee Academy’s competency model. The trainees are selected from fresh graduates at key universities and in-serveemployees, who should have a high level of competence, share similar values with the Company, show strong willingness to pursuecareer growth, and posses strong learning abilities. They are trained through training, seminars, coaching, challenging tasks, andbusiness practices to improve their knowledge, skills, and capabilities in an all-round manner.
Botanee Academy allows employees to learn massive online courses on such topics as business management, occupationalimprovement, and life knowledge bought or authorized by the Company at any time. It offers incentives such as learning pointsranking to stimulate employees to keep improving themselves.
In addition, we further enrich our lecturer database and course database, and offer more diversified learning channels integratingonline and offline forms. We uphold promoting training through training, and cultivating people through business practices tocontinually enhance employees’ capabilities, thus supporting their career growth and skill improvement. We will further improvelearning points ranking to stimulate employees’ enthusiasm for learning and build a culture of continuous learning.
11.4 Labor Outsourcing
□ Applicable ? N/A
During the reporting period, we conducted no significant labor outsourcing.
12. Profit Distribution and Share Issuance by Transferring Capital Reserve
Preparation, implementation or adjustment of profit distribution policy, especially cash dividend policy, during the reportingperiod:
□ Applicable ? N/A
(1) During the reporting period, we did not launch a new profit distribution policy or adjust our current policy.
(2) Implementation of profit distribution policy during the reporting period: We held the 2022 General Meeting of Shareholderson May 17, 2023, at which shareholders deliberated on and approved the Proposal on Botanee’s Profit Distribution Plan for 2022.According to the profit distribution plan, we should distribute CNY8.00 of cash dividend for every 10 shares to all shareholders basedon 423,600,000 shares, namely CNY338.88 million in total. This plan has been fully executed before June 30, 2023.
| Special statement on our cash dividend policy | |
| Compliance with our Articles of Association and resolutions of the General Meeting of Shareholders | Yes |
| Explicit and clear dividend distribution standard and ratio | Yes |
| Complete decision-making process and mechanism | Yes |
| Independent directors faithfully performed their duties and played their due role | Yes |
| Specific reasons for not distributing cash dividends and measures for enhancing investor returns | N/A |
| Minority shareholders were able to fully express their opinions and demands, and their legitimate rights and interests were fully protected | Yes |
| Compliant and transparent conditions and process in cash dividend policy adjustment or changes | N/A |
Our profit distribution plan and plan on share issuance by transferring capital reserve for the reporting period were consistentwith the relevant provisions of our Articles of Association, dividend management measures, etc.:
?Yes □No □N/A
Profit distribution and share issuance by transferring capital reserve for the reporting period:
| Number of bonus shares per 10 shares (share) | |
| Dividends per 10 shares (CNY) (tax-included) | 6.00 |
| Additional shares converted from capital surplus for every 10 shares (share) | |
| Total shares as the basis for the preliminary plan for profit distribution | 420,605,382 |
| Total cash dividends (CNY) (tax-included) | 252,363,229.20 |
| Cash dividends in other forms (e.g.: share repurchase) | |
| Total cash dividends (including those in other forms) | 252,363,229.20 |
Distributable profit (CNY)
| Distributable profit (CNY) | 1,988,181,888.41 |
| Cash dividend policy adopted for the reporting period | |
| Where the Company is at growth stage and has significant expenditure arrangements, cash dividends shall account for at least 20% of total distributable profit. | |
| Details on the preliminary plan for profit distribution and share issuance by transferring capital reserve | |
| According to relevant provisions of the Company Law and our Articles of Association, our profit distribution plan for 2022 was as follows: With 420,605,382 shares as the basis for profit distribution (423,600,000 total shares minus 2,994,618 shares repurchased through our special account for share repurchases), the Company shall distribute CNY6.00 of cash dividend (tax included) for every 10 shares to all shareholders, which represent a total cash dividend of CNY252.3632 million (tax included). In addition to aforementioned cash dividends, we did not implement distribution plan in other forms such as bonus shares or share issuance by transferring capital reserve. The above profit distribution plan conforms to the provisions of our Articles of Association and related review procedures, which fully protects the legitimate rights and interests of medium and small investors. Independent directors have expressed their independent opinions on it. The plan has been deliberated on and approved by the Board of Directors, and still needs to be submitted to the General Meeting of Shareholders for review. | |
The Company made profits and has obtained distributable profit for shareholders during the reporting period, but did not proposea preliminary plan for cash dividend distribution:
□ Applicable ? N/A
13. Implementation of Any Equity Incentive Schemes, Employee Stock OwnershipSchemes or Other Incentive Measures for Employees
? Applicable □ N/A
13.1 Equity Incentive Scheme
(1) Relevant approval procedures that have been completed for this incentive scheme
On March 28, 2023, the 6th Meeting of our Second Board of Directors deliberated on and approved proposals including theProposal on “Botanee 2023 Restricted Stock Incentive Scheme (Draft)” and Its Summary, the Proposal on Botanee “Measures forImplementation, Assessment and Management of the 2023 Restricted Stock Incentive Scheme”, and the Proposal on Requesting theGeneral Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related to Botanee 2023 Restricted StockIncentive Scheme. Our independent directors issued the independent opinion of “Agree” on matters related to this incentive scheme.
On the same day, the 5th Meeting of our Second Board of Supervisors deliberated on and approved the above-mentionedproposals.
From March 29, 2023 to April 7, 2023, we announced the list of the first batch of employees covered by this incentive scheme. Asof the expiration of the public notice, except that those who have resigned no longer met requirements for receiving the incentive, ourBoard of Supervisors did not received any objections to this list for this incentive scheme, and there was no other feedback. Then onApril 14, 2023, we disclosed the Explanation of the Board of Supervisors’ Verification Opinions and Publicity on the List of the FirstBatch of Employees Covered by the 2023 Restricted Stock Incentive Scheme.
On May 17, 2023, we convened the 2022 General Meeting of Shareholders, at which shareholders deliberated on and approvedproposals including the Proposal on “Botanee 2023 Restricted Stock Incentive Scheme (Draft)” and Its Summary, the Proposal onBotanee “Measures for Implementation, Assessment and Management of the 2023 Restricted Stock Incentive Scheme”, and theProposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle Matters Related toBotanee 2023 Restricted Stock Incentive Scheme. On the same day, we disclosed the Self-examination Report on the Purchase and Saleof Botanee Stocks by Insiders and Targets of the 2023 Restricted Stock Incentive Scheme.
On June 29, 2023, the 8th Meeting of our Second Board of Directors and the 7th Meeting of our Second Board of Supervisorsdeliberated on and approved the Proposal on Adjusting the List of Incentive Recipients, the Quantity and Price of Stock Granted underthe 2023 Restricted Stock Incentive Scheme, and the Proposal on the First Grant of Restricted Stocks to Employees Covered by the2023 Restricted Stock Incentive Scheme. The Board of Directors agreed that the first grant date of restricted stocks will take place June29, 2023, when 5.245 million restricted shares would be granted to 283 eligible recipients at a price of CNY61.30 per share. Our
independent directors issued the independent opinion of “Agree” on this, and our Board of Supervisors verified the list of incentiverecipients after this adjustment and issued verification opinions.
(2) Details of invalidation of some restricted stocks
1) Invalidated due to the resignation of incentive recipients
According to the provisions of our 2023 Restricted Stock Incentive Scheme, if the labor relationship or employment relationshipbetween the Company (including its holding subsidiaries) and incentive recipients expires, and the labor contract is not renewed or theemployee voluntarily resigns, the restricted stocks that have been granted and vested will not be withdrawn, while the restricted stocksthat have been granted but have not yet vested shall not be vested and will be invalidated.
Since among the first batch of employees covered by the restricted stock incentive scheme for 2023, 34 have resigned due topersonal reasons and are no longer eligible to receive the incentive. Their total of 650,000 restricted shares that have been granted buthave not yet vested shall not be vested, and will be invalidated.
2) Invalidated due to failure to meet company-level performance goal
The assessment years corresponding to the vesting of restricted stocks initially and reservedly granted under our 2023 restrictedstock incentive scheme are three fiscal years from 2023 to 2025. There will be assessment once in each fiscal year to achieve company-level and individual-level performance goals as vesting conditions for the incentive for the current year.
At the company level, the annual performance requirements for restricted stocks granted are as follows:
| Vesting period | Assessment year | Performance goal |
| 1st vesting period | 2023 | Operating income growth in 2023 should not be lower than 28% compared with operating income in 2022, and net profit growth in 2023 should not be lower than 28% compared with net profit in 2022. |
| 2nd vesting period | 2024 | Operating income growth in 2023 should not be lower than 61.28% compared with operating income in 2022, and net profit growth in 2023 should not be lower than 61.28% compared with net profit in 2022. |
| 3rd vesting period | 2025 | Operating income growth in 2023 should not be lower than 100% compared with operating income in 2022, and net profit growth in 2023 should not be lower than 100% compared with net profit in 2022. |
Note: The statistical calibers of “operating income” and “net profit” are the same as those in consolidated statements audited bythe accounting firm engaged by us. “Net profit” refers to the net profit attributable to our shareholders, excluding payment for sharesunder this incentive scheme. The same shall apply to descriptions below.
If the Company fails to meet performance target during each vesting period, all restricted stocks that can be vested by all incentivetargets in the corresponding assessment year will not be vested and will be invalidated.
According to the 2023 Annual Audit Report (TianHengShen (2024) No. 01527) produced by Talent Certified Public Accountants(Special General Partnership), Botanee achieved CNY5,522,168,300 of operating income and CNY756,795,000 of net profit in 2023,lower than performance goals set for the first vesting period. Since the Company did not achieve performance goal for the first vestingperiod of the restricted stocks granted under this incentive scheme, the 1.3785 million restricted shares that have been granted to 249recipients but cannot be vested in the first vesting period would be invalidated.
In summary, after the invalidation, there were a total of 3.2165 million shares that have been granted to the 249 recipients butcould not be vested.
Equity incentives for directors and senior management officers:
□ Applicable ? N/A
13.2 Employee Stock Ownership Schemes
□ Applicable ? N/A
13.3 Other Incentive Measures for Employees
□ Applicable ? N/A
14. Establishment and Implementation of Internal Control Systems during the ReportingPeriod
14.1 Establishment and Implementation of Internal Control Systems
For details, please refer to the 2022 Self-evaluation Report on Internal Control by Yunnan Botanee Bio-Technology GroupCo., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn).
14.2 Details about Major Defect in Internal Controls during the Reporting Period
?Yes ?No
15. Management and Control of Subsidiaries during the Reporting Period
At the end of the reporting period, our stock price was CNY68.17 per share. In this incentive plan, our directors Zhou Wei andZhang Mei, and senior management officers Wang Long totaled a total of 161,000 restricted shares that had been granted but not yetvested.
16. Self-evaluation Report on Internal Controls or Internal Control Audit Report
16.1 Self-evaluation Report on Internal Controls
| Disclosure date of the report | March 29, 2023 | ||
| Index to the disclosed report | For details, please refer to the 2022 Self-evaluation Report on Internal Controls by Yunnan Botanee Bio-Technology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). | ||
| Percentage of the total assets of appraised entities in consolidated total assets | 100.00% | ||
| Percentage of the operating revenue of appraised entities to consolidated operating revenue | 100.00% | ||
| Defect identification standards | |||
| Type | Financial-report-related | Non-financial-report-related | |
| Qualitative standards | (1) Major deficiencies: 1) Our directors, supervisors, and senior management officers committed fraudulent acts such as embezzlement, bribery, and misappropriation of public funds; 2) We failed to discover major accounting errors in previous years, and needs to correct submitted or disclosed financial reports; 3) Our certified public accountants found there was a major misstatement in the current financial report, but the internal control process failed to identify the misstatement; 4) The supervision of the Audit Committee on internal controls was invalid. (2) Significant deficiencies: 1) We did not select a proper accounting policy and apply it following generally accepted accounting principles; 2) We did not establish a control mechanism for accounting of unconventional or special transactions, or did not implement and did not have corresponding compensatory control; 3) We had one or more deficiencies in its control over the preparation of financial report at the end of the reporting period, and could not reasonably ensure that the prepared financial statements could achieve true and accurate objectives. (3) General deficiencies: other financial report-related internal control deficiencies, except for major deficiencies and significant deficiencies. | (1) Major deficiencies: 1) We lacked scientific decision-making procedures for decision-making on major issues, appointment and dismissal of personnel in important positions, investment decisions in major projects, use of large amounts of funds, and other decision-making procedures, thus resulting in major mistakes; 2) We seriously violates laws and administrative regulations, and were subject to major punishment; 3) Our development direction seriously deviated from strategic objectives. Our investment direction, business structure, business model, etc. did not support the realization of strategic objectives; 4) Major deficiencies in our internal controls were not effectively rectified. (2) Significant deficiencies: 1) Our decision-making procedures had serious deficiencies, which lead to serious mistakes; 2) Our directors, supervisors, and senior management officers violated internal management regulations and caused a large amount of losses; 3) Our development direction seriously deviated from strategic objectives, and investment direction, business structure, business model, etc. did not support the realization of strategic objectives to a large extent; 4) Important deficiencies in internal controls were not rectified. (3) General deficiencies: other non-financial report-related internal control deficiencies, except for major deficiencies and significant deficiencies. | |
| Quantitative standards | (1) Major deficiencies: 1) The misstatement was greater than 8% of the total profit of audited consolidated | (1) Major deficiencies: 1) The misstatement was greater than 8% of the total profit of audited consolidated | |
statements in the last accounting year; 2) Themisstatement was greater than 0.8% of the total assets ofaudited consolidated statements in the last accountingyear; 3) The misstatement was greater than 1% of thetotal operating income of audited consolidated statementsin the last accounting year.
(2) Significant deficiencies: 1) The misstatement was
between 4% and 8% of the total profit of auditedconsolidated statements in the last accounting year; 2)The misstatement was between 0.4% and 0.8% of thetotal assets of audited consolidated statements in thelatest accounting year; 3) The misstatement was between
0.5% and 1% of the total operating income of audited
consolidated statements in the last accounting year.
(3) General deficiencies: 1) The misstatement was less
than 4% of the total profit of audited consolidatedstatements in the last accounting year; 2) Themisstatement was less than 0.4% of the total assets ofaudited consolidated statements in the last accountingyear; 3) The misstatement was less than 0.5% of the totaloperating income of audited consolidated statements inthe last accounting year.If a misstatement involved multiple indicators, thequantitative criteria shall be the lowest one.
| statements in the last accounting year; 2) The misstatement was greater than 0.8% of the total assets of audited consolidated statements in the last accounting year; 3) The misstatement was greater than 1% of the total operating income of audited consolidated statements in the last accounting year. (2) Significant deficiencies: 1) The misstatement was between 4% and 8% of the total profit of audited consolidated statements in the last accounting year; 2) The misstatement was between 0.4% and 0.8% of the total assets of audited consolidated statements in the latest accounting year; 3) The misstatement was between 0.5% and 1% of the total operating income of audited consolidated statements in the last accounting year. (3) General deficiencies: 1) The misstatement was less than 4% of the total profit of audited consolidated statements in the last accounting year; 2) The misstatement was less than 0.4% of the total assets of audited consolidated statements in the last accounting year; 3) The misstatement was less than 0.5% of the total operating income of audited consolidated statements in the last accounting year. If a misstatement involved multiple indicators, the quantitative criteria shall be the lowest one. | statements in the last accounting year; 2) The misstatement was greater than 0.8% of the total assets of audited consolidated statements in the last accounting year; 3) The misstatement was greater than 1% of the total operating income of audited consolidated statements in the last accounting year. (2) Significant deficiencies: 1) The misstatement was between 4% and 8% of the total profit of audited consolidated statements in the last accounting year; 2) The misstatement was between 0.4% and 0.8% of the total assets of audited consolidated statements in the last accounting year; 3) The misstatement was between 0.5% and 1% of the total operating income of audited consolidated statements in the last accounting year. (3) General deficiencies: 1) The misstatement was less than 4% of the total profit of audited consolidated statements in the last accounting year; 2) The misstatement was less than 0.4% of the total assets of audited consolidated statements in the last accounting year; 3) The misstatement was less than 0.5% of the total operating income of audited consolidated statements in the last accounting year. If a misstatement involved multiple indicators, the quantitative criteria shall be the lowest one. |
16.2 Internal Control Audit Report or Verification Report
Internal control verification report:
□ Yes ?No
| Opinion paragraph in internal control verification report | |
| Shareholders of Yunnan Botanee Bio-Technology Group Co., Ltd.,: We have been entrusted to verify the the effectiveness of internal controls related to the financial statements of Yunnan Botanee Bio-Technology Group Co., Ltd. (hereinafter referred to as “Botanee”) as of December 31, 2022 by its management team. It is the responsibility of Botanee’s management team to establish and improve internal controls, and maintain the effectiveness of internal controls, while our responsibility is to produce opinion on the effectiveness of Botanee’s internal controls. Our audit was conducted in accordance with the Standards on Other Assurance Engagements for Certified Public Accountants of China No. 3101-Assurance Engagements Other than Audits or Reviews of Historical Financial Information and the Guidance on Internal Controls Audit. The above provisions require us to plan and implement our verification work, thus producing reasonable verification on whether there was material misstatement in Botanee’s explanation on the effectiveness of its internal controls. During the audit, we understood, tested and evaluated the rationality of its internal control design and effectiveness of implementation, and implemented other procedures that we deem necessary. We believe that our review provided a reasonable basis for our opinions. Internal controls have their inherently limitations, with a possibility that a misstatement may occur but not identified due to error or fraud. In addition, as changes in circumstances may lead to inappropriate internal controls or reduce the degree of compliance with control policies and procedures, it is to some extent risky to speculate on the effectiveness of future internal controls based on internal control evaluation results. In our opinion, Botanee has maintained effective internal controls over its financial statements in all material respects as of December 31, 2023 in accordance with the Basic Standard for Enterprise Internal Control and relevant standards. Talent Certified Public Accountants (Limited Liability Partnership) Certified Public Accountant in China: Wu Ting Certified Public Accountant in China: Zhang Xuewen Nanjing, China April 24, 2024 | |
| Disclosure of verification report on internal controls | Disclosed |
| Disclosure date of the internal control verification report | April 24, 2024 |
Disclosure index of the internal control verification report
| Disclosure index of the internal control verification report | For details, please refer to the 2023 Internal Control Verification Report of Yunnan Botanee Group Bio-Technology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn). |
| Type of opinion in the internal control verification report | Standard unqualified |
| Whether there were major defects in non-financial reports | No |
Whether the accounting firm gave modified opinions in its internal control authentication report or not:
□ Yes ?No
Consistency between the internal control authentication report produced by the accounting firm and the self-evaluation reportproduced by the Board of Directors:
?Yes □ No
17. Remediation of Problems Identified in Self-inspection in the Campaign on the Governanceof Listed Companies
□ Applicable ? N/A
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Section V Environmental and Social Responsibility
1. Major Environmental Issues
Whether Botanee and its subsidiaries belong to key pollutant discharging entities identified by environmental protection authorityor not:
□ Yes ?No
Administrative penalties imposed for environmental problems during the reporting period:
□ Applicable ? N/A
Botanee and its subsidiaries at all levels strictly implemented the Environment Protection Law of the People’s Republic of China,the Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution, the Law of the People’s Republicof China on the Prevention and Control of Water Pollution, the Law of the People’s Republic of China on the Prevention and Controlof Environmental Pollution by Solid Waste, and other environmental laws and regulations in their manufacturing and operationactivities, and consciously fulfilled their social responsibilities for environmental protection. Botanee and its subsidiaries were not keypollutant discharging entities identified by environmental protection authority.
Measures taken to reduce carbon emissions during the reporting period and their effects:
? Applicable □ N/A
For details of other environmental information such as environment protection and carbon emission reduction measures taken byduring the reporting period, please refer to the 2022 Social Responsibility Report & Environmental, Social, and Governance Report ofYunnan Botanee Bio-Technology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn).
2. Corporate Social Responsibility
For details on our fulfillment of social responsibility during the reporting period, please refer to the 2022 Social ResponsibilityReport & Environmental, Social, and Governance Report of Yunnan Botanee Bio-Technology Group Co., Ltd. disclosed by CNINFO(http://www.cninfo.com.cn).
3. Efforts in Consolidating and Expanding Achievements in Poverty Alleviation and RuralRevitalization
For details on our fulfillment of the responsibilities of consolidating and expanding the achievements of poverty alleviation andrural revitalization during the reporting period, please refer to the 2022 Social Responsibility Report & Environmental, Social, andGovernance Report of Yunnan Botanee Bio-Technology Group Co., Ltd. disclosed by CNINFO (http://www.cninfo.com.cn).
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Section VI Significant Events
1. Performance of Undertakings
1.1 Undertakings of Botanee’s Actual Controller, Shareholders, Related Parties and Acquirer, as well as theCompany and Other Commitment Makers That Have Been Fulfilled During the Reporting Period or WereOngoing as of the End of the Report Period
? Applicable □ N/A
| Undertaking | Undertaking giver | Type of undertaking | Details of undertaking | Undertaking date | Term | Particulars on performance |
| Undertakings made during initial public offering or refinancing | Nuona Technology | Undertakings such as restricted sales arrangement, voluntary lockup of shares, the extension of lockup period, and shareholders’ intention to hold and reduce shares | 1. Within 36 months from the date of Botanee’s initial public offering of shares and listing on the stock exchange (hereinafter referred to as “lockup period”), Nuona Technology will not transfer or entrust others to manage Botanee’s shares held by it before the initial public offering of shares, nor will Botanee repurchase such shares; 2. If Nuona Technology reduces Botanee’s shares held by it within two years after the expiration of lockup period, the price shall not be lower than the issuance price of IPO shares; 3. During the period from the listing of Botanee’s shares to the reduction, if there are ex-rights and ex-dividend such as dividend distribution, stock dividends, share issuance by transferring capital reserve, and allotment of shares, the lower limit of reserve price and the number of shares for reduction shall be adjusted accordingly; 4. If the closing price of Botanee’s shares is lower than its IPO price for 20 consecutive trading days within 6 months after the listing of its shares, or when the closing price at the end of the 6-month period after the listing is lower than its IPO price, the lockup period of Botanee’s shares held by Nuona Technology will be automatically extended for 6 months on the basis of original lockup period; 5. Shareholding intention: As the controlling shareholder of Botanee, Nuona Technology is confident of the future development of Botanee, and will continue to be optimistic about the future prospects of Botanee and the industry it is in; 6. Intention of share capital reduction: (1) Nuona Technology will not reduce its capital share within 36 months from the date of Botanee’s initial public offering of shares and listing on the stock exchange. If it intends to reduce its capital share after the | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
expiration of the aforementionedlockup period, it will carefully abideby relevant regulations of the ChinaSecurities Regulatory Commissionand the Shenzhen Stock Exchange onshare capital reduction, and prudentlyformulate a share capital reductionplan based on securities marketsituation, Botanee’s share trend andpublic information, its business needs,etc., and gradually reduce its sharecapital after the expiration of thelockup period;
(2) The price at which Nuona
Technology reduces its direct orindirect holdings of Botanee’s shares(if ex-rights and ex-dividends areconducted due to cash dividends,stock dividends, share issuance bytransferring capital reserve, additionalissuance of shares, and other reasons,corresponding adjustments shall bemade in accordance with relevantregulations, the same below) shall bedetermined in the light of currentsecondary market price, and shallcomply with relevant laws andregulations and the rules of theShenzhen Stock Exchange. IfBotanee’s shares directly or indirectlyheld by Nuona Technology beforeBotanee’s IPO are reduced within twoyears after the expiration of lockupperiod, the reduction price shall not belower than initial IPO price;
(3) When implementing share capital
reduction, Nuona Technology shallinform Botanee at least 3 trading daysin advance, and actively cooperatewith Botanee’s information disclosuresuch as announcement release;
(4) If Nuona Technology fails to
fulfill the above intention of capitalshare reduction, it will publiclyexplain the specific reasons for suchfailure on the General Meeting ofShareholders and at the conferenceheld for disclosure media designatedby the China Securities RegulatoryCommission, and apologize toBotanee’s shareholders and publicinvestors. If it reduces its shares inviolation of the above commitmentsor mandatory provisions of the law, itpromises that the proceeds fromillegal reduction of Botanee’s shareswill be owned by Botanee, and thelockup period of the remaining sharesdirectly or indirectly held by it will beautomatically extended by 3 monthsafter the expiration of the originallockup period.
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Undertakingsmade duringinitial publicoffering orrefinancing
| Undertakings made during initial public offering or refinancing | Guo Zhenyu, and Kevin Guo | Undertakings such as restricted sales arrangement, voluntary lockup of shares, the extension of lockup period, and shareholders’ intention to hold and reduce shares | 1. Within 36 months from the date of Botanee’s initial public offering of shares and listing on the stock exchange (hereinafter referred to as “lockup period”), I will not transfer or entrust others to manage Botanee’s shares held by me before the initial public offering of shares, nor will Botanee repurchase such shares; 2. If I reduce Botanee’s shares held by me within two years after the expiration of lockup period, the price shall not be lower than the issuance price of IPO shares; 3. During the period from the listing of Botanee’s shares to the reduction, if there are ex-rights and ex-dividend such as dividend distribution, stock dividends, share issuance by transferring capital reserve, and allotment of shares, the lower limit of reserve price and the number of shares for reduction shall be adjusted accordingly; 4. If the closing price of Botanee’s shares is lower than its IPO share price for 20 consecutive trading days within 6 months after the listing of its shares, or when the closing price at the end of the 6-month period after the listing is lower than its IPO price, the lockup period of Botanee’s shares held by me will be automatically extended for 6 months on the basis of original lockup period. | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Ongoing |
| Undertakings made during initial public offering or refinancing | Guo Zhenyu | Undertakings such as restricted sales arrangement, voluntary lockup of shares, the extension of lockup period, and shareholders’ intention to hold and reduce shares | If I resign from the position of Botanee’s director and senior management officers before the expiration of my term of office, within the term of office as determined at the time of appointment and within 6 months after the expiration of the term of office, I will abide by the following restrictive provisions: (1) The number of shares transferred by me each year shall not exceed 25% of the total number of Botanee’s shares directly and indirectly held by me; (2) I shall not transfer Botanee’s shares directly or indirectly held by me within half a year after leaving office; (3) Other provisions of laws, administrative regulations, departmental rules, normative documents and business rules of the Shenzhen Stock Exchange on the transfer of shares of directors, supervisors, and senior management officers. (4) The above undertakings will not be changed or invalidated due to my position change or resignation. | Jun. 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Undertakingsmade duringinitial publicoffering orrefinancing
| Undertakings made during initial public offering or refinancing | Yunnan Haqisheng | Undertakings such as restricted sales arrangement, voluntary lockup of shares, the extension of lockup period, and shareholders’ intention to hold and reduce shares | 1. Within 36 months from the date of Botanee’s initial public offering of shares and listing on the stock exchange (hereinafter referred to as “lockup period”), Yunnan Haqisheng will not transfer or entrust others to manage Botanee’s shares held by it before the initial public offering of shares, nor will Botanee repurchase such shares; 2. If Yunnan Haqisheng reduces Botanee’s shares held by it within two years after the expiration of lockup period, the price shall not be lower than the issuance price of IPO shares; 3. During the period from the listing of Botanee’s shares to the reduction, if there are ex-rights and ex-dividend such as dividend distribution, stock dividends, share issuance by transferring capital reserve, and allotment of shares, the lower limit of reserve price and the number of shares for reduction shall be adjusted accordingly; 4. If the closing price of Botanee’s shares is lower than its IPO price for 20 consecutive trading days within 6 months after the listing of its shares, or when the closing price at the end of the 6-month period after the listing is lower than its IPO price, the lockup period of Botanee’s shares held by Yunnan Haqisheng will be automatically extended for 6 months on the basis of original lockup period. | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Ongoing |
| Undertakings made during initial public offering or refinancing | Sequoia Juye | Undertakings such as restricted sales arrangement, voluntary lockup of shares, the extension of lockup period, and shareholders’ intention to hold and reduce shares | 1. Within 12 months from the date of Botanee’s IPO and listing on the stock exchange, Sequoia Juye will not transfer or entrust others to manage Botanee’s shares held by it before IPO, nor will Botanee repurchase such shares. In the case of changes in Botanee’s shares held by Sequoia Juye issued before IPO due to Botanee’s equity distribution and other reasons, Sequoia Juye will still abide by the above undertakings. It will faithfully fulfill the above undertakings and assume corresponding legal responsibilities; 2. Shareholding intention: As the shareholder of Botanee, Sequoia Juye is confident of the future development of Botanee, and will continue to be optimistic about the future prospects of Botanee and the industry it is in; 3. Intention of share capital reduction: (1) Sequoia Juye will not reduce its capital share within 36 months from the date of Botanee’s initial public offering of shares and listing on the stock exchange. If it intends to reduce its capital share after the expiration of the aforementioned lockup period, it will carefully abide by relevant regulations of the China Securities | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Undertakings during lockup period have been fulfilled, but other undertakings are still ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Regulatory Commission and theShenzhen Stock Exchange on sharecapital reduction, and prudentlyformulate a share capital reductionplan based on securities marketsituation, Botanee’s share trend andpublic information, its business needs,etc., and gradually reduce its sharecapital after the expiration of thelockup period;
(2) The price at which Sequoia Juye
reduces its direct or indirect holdingsof Botanee’s shares (if ex-rights andex-dividends are conducted due tocash dividends, stock dividends, shareissuance by transferring capitalreserve, additional issuance of shares,and other reasons, correspondingadjustments shall be made inaccordance with relevant regulations,the same below) shall be determinedin the light of current secondarymarket price, and shall comply withrelevant laws and regulations and therules of the Shenzhen StockExchange.
(3) When Sequoia Juye reduces
Botanee’s shares issued before IPOheld by it, it shall notify Botanee inwriting in advance of the intention ofits share capital reduction and thenumber of shares to be reduced ifrelevant current regulations andrequirements on share capitalreduction are met. Botanee shall makean announcement on the reductionthree trading days in advance, andabide by the Provisions on theReduction of Shares by Shareholders,Directors, Supervisors, and SeniorManagement Officers of ListedCompanies or relevant currentregulations on the reduction of sharesby shareholders of listed companies inperforming procedures of notice,filing, announcement, etc., exceptwhen Sequoia Juye holds less than 5%of Botanee’s shares;
(4) If Sequoia Juye fails to fulfill the
above undertakings, it agrees to bearlegal liabilities arising from suchundertakings.
| Regulatory Commission and the Shenzhen Stock Exchange on share capital reduction, and prudently formulate a share capital reduction plan based on securities market situation, Botanee’s share trend and public information, its business needs, etc., and gradually reduce its share capital after the expiration of the lockup period; (2) The price at which Sequoia Juye reduces its direct or indirect holdings of Botanee’s shares (if ex-rights and ex-dividends are conducted due to cash dividends, stock dividends, share issuance by transferring capital reserve, additional issuance of shares, and other reasons, corresponding adjustments shall be made in accordance with relevant regulations, the same below) shall be determined in the light of current secondary market price, and shall comply with relevant laws and regulations and the rules of the Shenzhen Stock Exchange. (3) When Sequoia Juye reduces Botanee’s shares issued before IPO held by it, it shall notify Botanee in writing in advance of the intention of its share capital reduction and the number of shares to be reduced if relevant current regulations and requirements on share capital reduction are met. Botanee shall make an announcement on the reduction three trading days in advance, and abide by the Provisions on the Reduction of Shares by Shareholders, Directors, Supervisors, and Senior Management Officers of Listed Companies or relevant current regulations on the reduction of shares by shareholders of listed companies in performing procedures of notice, filing, announcement, etc., except when Sequoia Juye holds less than 5% of Botanee’s shares; (4) If Sequoia Juye fails to fulfill the above undertakings, it agrees to bear legal liabilities arising from such undertakings. | ||||||
| Undertakings made during initial public offering or refinancing | Zhenli Consulting | Undertakings such as restricted sales arrangement, voluntary lockup of shares, the extension of lockup period, and shareholders’ intention to hold and reduce shares | 1. Within 12 months from the date of Botanee’s IPO and listing on the stock exchange, Zhenli Consulting will not transfer or entrust others to manage Botanee’s shares held by it before IPO, nor will Botanee repurchase such shares. In the case of changes in Botanee’s shares held by Zhenli Consulting issued before IPO due to Botanee’s equity distribution and other reasons, Zhenli Consulting will still abide by the above undertakings. Zhenli Consulting will faithfully fulfill the above undertakings and assume corresponding legal responsibilities; | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Undertakings during lockup period have been fulfilled, but other undertakings are still ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2. Shareholding intention: As the
shareholder of Botanee, ZhenliConsulting is confident of the futuredevelopment of Botanee, and willcontinue to be optimistic about thefuture prospects of Botanee and theindustry it is in;
3. Intention of share capital reduction:
(1) Zhenli Consulting will not reduce
its capital share within 36 monthsfrom the date of Botanee’s initialpublic offering of shares and listingon the stock exchange. If ZhenliConsulting intends to reduce itscapital share after the expiration of theaforementioned lockup period, it willcarefully abide by relevant regulationsof the China Securities RegulatoryCommission and the Shenzhen StockExchange on share capital reduction,and prudently formulate a sharecapital reduction plan based onsecurities market situation, Botanee’sshare trend and public information, itsbusiness needs, etc., and graduallyreduce its share capital after theexpiration of the lockup period;
(2) The price at which Zhenli
Consulting reduces its direct orindirect holdings of Botanee’s shares(if ex-rights and ex-dividends areconducted due to cash dividends,stock dividends, share issuance bytransferring capital reserve, additionalissuance of shares, and other reasons,corresponding adjustments shall bemade in accordance with relevantregulations, the same below) shall bedetermined in the light of currentsecondary market price, and shallcomply with relevant laws andregulations and the rules of theShenzhen Stock Exchange.
(3) When Zhenli Consulting reduces
Botanee’s shares issued before IPOheld by it, Zhenli Consulting shallnotify Botanee in writing in advanceof the intention of its share capitalreduction and the number of shares tobe reduced if relevant currentregulations and requirements on sharecapital reduction are met. Botaneeshall make an announcement on thereduction three trading days inadvance, and abide by the Provisionson the Reduction of Shares byShareholders, Directors, Supervisors,and Senior Management Officers ofListed Companies or relevant currentregulations on the reduction of sharesby shareholders of listed companies inperforming procedures of notice,filing, announcement, etc., exceptwhen Zhenli Consulting holds lessthan 5% of Botanee’s shares;
(4) If Zhenli Consulting fails to fulfill
the above intention of capital sharereduction, it will publicly explain the
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
specific reasons for such failure on theGeneral Meeting of Shareholders andat the conference held for disclosuremedia designated by the ChinaSecurities Regulatory Commission,and apologize to Botanee’sshareholders and public investors. If itreduces its shares in violation of theabove commitments or mandatoryprovisions of the law, it promises thatthe proceeds from illegal reduction ofBotanee’s shares will be owned byBotanee, and the lockup period of theremaining shares directly or indirectlyheld by it will be automaticallyextended by 3 months after theexpiration of the original lockupperiod.
| specific reasons for such failure on the General Meeting of Shareholders and at the conference held for disclosure media designated by the China Securities Regulatory Commission, and apologize to Botanee’s shareholders and public investors. If it reduces its shares in violation of the above commitments or mandatory provisions of the law, it promises that the proceeds from illegal reduction of Botanee’s shares will be owned by Botanee, and the lockup period of the remaining shares directly or indirectly held by it will be automatically extended by 3 months after the expiration of the original lockup period. | ||||||
| Undertakings made during initial public offering or refinancing | Gao Shaoyang, Ma Xiao, Zhou Wei, Wang Long, and Dong Junzi | Undertakings such as restricted sales arrangement, voluntary lockup of shares, the extension of lockup period, and shareholders’ intention to hold and reduce shares | 1. Within 12 months from the date of Botanee’s initial public offering of shares and listing on the stock exchange (hereinafter referred to as “lockup period”), I will not transfer or entrust others to manage Botanee’s shares held by me before the initial public offering of shares, nor will Botanee repurchase such shares; 2. If I reduce Botanee’s shares held by me within two years after the expiration of lockup period, the price shall not be lower than the issuance price of IPO shares; 3. During the period from the listing of Botanee’s shares to the reduction, if there are ex-rights and ex-dividend such as dividend distribution, stock dividends, share issuance by transferring capital reserve, and allotment of shares, the lower limit of reserve price and the number of shares for reduction shall be adjusted accordingly; 4. If the closing price of Botanee’s shares is lower than its IPO price for 20 consecutive trading days within 6 months after the listing of its shares, or when the closing price at the end of the 6-month period after the listing is lower than its IPO price, the lockup period of Botanee’s shares held by me will be automatically extended for 6 months on the basis of original lockup period. 5. If I resign from the position of Botanee’s director and senior management officers before the expiration of my term of office, within the term of office as determined at the time of appointment and within 6 months after the expiration of the term of office, I will abide by the following restrictive provisions: (1) The number of shares transferred by me each year shall not exceed 25% of the total number of Botanee’s shares directly and indirectly held by me; (2) I shall not transfer Botanee’s shares directly or indirectly held by me within | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Undertakings other than the price of share reduction have been fulfilled |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
half a year after leaving office;
(3) Other provisions of laws,
administrative regulations,departmental rules, normativedocuments and business rules of theShenzhen Stock Exchange on thetransfer of shares of directors,supervisors, and senior managementofficers.
6. The above undertakings will not be
changed or invalidated due to myposition change or resignation.
| half a year after leaving office; (3) Other provisions of laws, administrative regulations, departmental rules, normative documents and business rules of the Shenzhen Stock Exchange on the transfer of shares of directors, supervisors, and senior management officers. 6. The above undertakings will not be changed or invalidated due to my position change or resignation. | ||||||
| Undertakings made during initial public offering or refinancing | Yu Shiru, Li Lei, and Yang Zurong | Undertakings such as restricted sales arrangement, voluntary lockup of shares, the extension of lockup period, and shareholders’ intention to hold and reduce shares | 1. Within 12 months from the date of Botanee’s initial public offering of shares and listing on the stock exchange (hereinafter referred to as “lockup period”), I will not transfer or entrust others to manage Botanee’s shares held by me before the initial public offering of shares, nor will Botanee repurchase such shares; 2. During the period from the listing of Botanee’s shares to the reduction, if there are ex-rights and ex-dividend such as dividend distribution, stock dividends, share issuance by transferring capital reserve, and allotment of shares, the lower limit of reserve price and the number of shares for reduction shall be adjusted accordingly; 3. If I resign from the position of Botanee’s director and senior management officers before the expiration of my term of office, within the term of office as determined at the time of appointment and within 6 months after the expiration of the term of office, I will abide by the following restrictive provisions: (1) The number of shares transferred by me each year shall not exceed 25% of the total number of Botanee’s shares directly and indirectly held by me; (2) I shall not transfer Botanee’s shares directly or indirectly held by me within half a year after leaving office; (3) Other provisions of laws, administrative regulations, departmental rules, normative documents and business rules of the Shenzhen Stock Exchange on the transfer of shares of directors, supervisors, and senior management officers. 4. The above undertakings will not be changed or invalidated due to my position change or resignation. | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Undertakings other than the price of share reduction have been fulfilled |
| Undertakings made during initial public offering or refinancing | Botanee | Measures and undertakings for stabilizing stock price | 1. Botanee’s repurchase of shares for the purpose of stabilizing stock price shall comply with the provisions of relevant laws and regulations, and shall not cause the Company’s equity distribution to fail to meet listing requirements; | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2. In the case of any situation that
Botanee should start the contingencyplan for stabilizing stock price, it shallstart decision-making procedureswithin 2 working days after receivingthe notice, notify creditors, andperform filing procedures according tolaw according to the resolution of theGeneral Meeting of Shareholders.Botanee will repurchase shares bymeans of centralized bidding, offer,etc. on the stock exchange where it islisted. After the implementation of therepurchase plan, Botanee shallannounce its share change within 2working days, cancel the repurchasedshares according to law within 10days, and file the share change withindustrial and commercial authority;
3. The repurchase proposal shall be
approved by the Board of Directorsand the General Meeting ofShareholders, of which more than 2/3of shareholders present at the GeneralMeeting of Shareholders must approveit. Botanee’s directors (excludingindependent directors) promise to votein favor of the Board of Directors onsuch repurchase, while controllingshareholder and the actual controllerpromise to vote in favor of therepurchase at the General Meeting ofShareholders;
4. Botanee will repurchase its public
shares through the stock exchange’strading system within 30 trading daysfrom the date of announcement of therepurchase plan, and the repurchaseprice shall not be higher than itsaudited net assets per share at the endof the previous year. If it repurchasesshares by offer, the offer price shallnot be lower than the arithmeticaverage of the daily weighted averageprice of such shares 30 trading daysbefore the announcement of therepurchase report and shall not belower than its latest audited net assetsper share. If Botanee repurchasesshares by centralized bidding, therepurchase price shall not be higherthan the trading limit of its shares onthe day of repurchase;
5. When Botanee implements the
proposal of stabilizing stock price, thefund to be used shall be self-raised.
6. In addition to the requirements of
relevant laws and regulations, thefollowing requirements shall also bemet:
(1) The total amount of funds used by
Botanee to repurchase shares shall notexceed the total amount of funds raisedby it through IPO;
(2) The amount of funds used to
repurchase shares at a single time shallnot be higher than 10% of the auditednet profit attributable to shareholders
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
of the parent company in the previousaccounting year;
(3) The total amount of repurchase
funds used to stabilize stock price in asingle accounting year shall not exceed30% of the audited net profitattributable to shareholders of theparent company in the previousaccounting year;
7. If the amount exceeds the above
standard, relevant measures forstabilizing stock price will not beimplemented in the current year. But ifstock price still needs to be stabilizedin the next year, Botanee will continueto implement the contingency plan inaccordance with the above principles.
| of the parent company in the previous accounting year; (3) The total amount of repurchase funds used to stabilize stock price in a single accounting year shall not exceed 30% of the audited net profit attributable to shareholders of the parent company in the previous accounting year; 7. If the amount exceeds the above standard, relevant measures for stabilizing stock price will not be implemented in the current year. But if stock price still needs to be stabilized in the next year, Botanee will continue to implement the contingency plan in accordance with the above principles. | ||||||
| Undertakings made during initial public offering or refinancing | Guo Zhenyu, and Kevin Guo | Measures and undertakings for stabilizing stock price | 1. The increase of shares held by the controlling shareholder and actual controller for the purpose of stabilizing stock price shall comply with the Measures for the Administration of Takeover of Listed Companies and other relevant laws and regulations, and shall not cause Botanee’s equity distribution to fail to meet listing requirements; 2. In the case of any situation that Botanee needs to start the contingency plan for stabilizing stock price, the controlling shareholder and actual controller shall start internal decision-making procedures within 2 working days after receiving notice. Botanee shall announce in writing whether it has a specific plan for share increase, and make an announcement. It shall disclose such information as the quantity range, price range, total amount, and completion time of proposed increase. After going through relevant formalities, the shareholding increase plan shall be initiated within 2 trading days. After implementing the plan, Botanee shall announce its share change within 2 working days; 3. The controlling shareholder and the actual controller shall meet the following requirements when implementing the proposal of stock price stabilization: (1) The total amount of funds used by Botanee’s controlling shareholder and actual controller to increase their holdings at a single time shall not exceed 30% of the Company’s cash dividends in the previous year, and the total amount of funds used for increasing their holdings in the current year shall not exceed 60% of the cash dividends in the previous year. If the above standards are exceeded, the relevant stock price stabilization measures will not continue to be implemented in the current year. However, if the stock price still needs to be stabilized in the next year, Botanee will continue to implement | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
the stock price stabilization plan inaccordance with the above principles;
(2) The total single increase of
Botanee’s controlling shareholder andactual controller shall not exceed 2%of the Company’s total share capital,and the cumulative increase proportionwithin 12 consecutive months shall notexceed 5% of Botanee’s total shares;
(3) Botanee’s controlling shareholder
and actual controller will increase theirholdings of the Company’s publicshares through stock exchange tradingsystem within 30 trading days from thedate of announcement of theshareholding increase plan. Theincrease price will not be higher thanthe Company’s audited net assets pershare at the end of the previous year,and the increased shares shall not besold within 6 months after thecompletion of the shareholdingincrease.
| the stock price stabilization plan in accordance with the above principles; (2) The total single increase of Botanee’s controlling shareholder and actual controller shall not exceed 2% of the Company’s total share capital, and the cumulative increase proportion within 12 consecutive months shall not exceed 5% of Botanee’s total shares; (3) Botanee’s controlling shareholder and actual controller will increase their holdings of the Company’s public shares through stock exchange trading system within 30 trading days from the date of announcement of the shareholding increase plan. The increase price will not be higher than the Company’s audited net assets per share at the end of the previous year, and the increased shares shall not be sold within 6 months after the completion of the shareholding increase. | ||||||
| Undertakings made during initial public offering or refinancing | Gao Shaoyang, Ma Xiao, Zhou Wei, Wang Long, and Dong Junzi | Measures and undertakings for stabilizing stock price | 1. Non-independent directors and senior management who hold office at Botanee and receive remuneration from it shall increase their shares for the purpose of stabilizing stock price, which shall comply with the conditions and requirements of laws and regulations such as the Measures for the Administration of Turnover of Listed Companies and the Rules on the Management of Shares Held by the Directors, Supervisors and Senior Management Officers of Listed Companies and Related Changes. Furthermore, the increase of shares should not cause the distribution of Botanee’s equity to fail to meet listing requirements; 2. In the case of any situation that Botanee needs to start the contingency plan for stabilizing stock price, non-independent directors and senior management officers who hold office in the Company and receive remuneration from it shall notify the Company in writing of whether they have a specific plan to increase their holding of shares within 2 working days after receiving notice, and the Company shall make an announcement to disclose such information as the quantity range, price range, total amount, completion time of proposed increase. After going through relevant formalities according to law, the shareholding increase plan shall be started within 2 trading days. After the shareholding increase plan is completed, the Company shall announce the share change report within two working days. 3. Non-independent directors and senior management who hold office in the Company and receive remuneration from it shall acquire | Jun. 29, 2020 | Jun. 29, 2020 - Mar. 24, 2024 | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
publicly held shares of the Companythrough stock exchange trading systemwithin 30 trading days from the date ofannouncement of the shareholdingincrease plan. The price shall notexceed Botanee’s audited net assetsper share at the end of the previousyear, and the acquired shares shall notbe sold within 6 months after thecompletion of share increase.
4. When conducting share price
stabilization, non-independentdirectors and senior managementofficers who hold office in theCompany and receive remunerationfrom it shall not use cash forshareholding increase that exceed 30%of their annual cash remuneration anddividends received from the Company(after-tax) for a single increase, and thefunds used for shareholding increase ina year shall not exceed their annualcash remuneration received in theprevious year. If the above standardsare exceeded, relevant share pricestabilization measures will be stoppedin the current year. But the share pricestill needs to be stabilized in the nextyear, the Company will continue toimplement the share price stabilizationplan in accordance with the aboveprinciples;
5. Non-independent directors and
senior management officers who holdoffice in the Company and receiveremuneration from it shall signrelevant commitments in accordancewith the plan for stabilizing stock priceand relevant measures. Within 3 yearsafter the Company is listed, theCompany will urge newly elected orappointed directors (excludingindependent directors and directorswho do not hold office in the Companyand receive remuneration from it) andsenior management officers to signrelevant commitments in accordancewith the provisions of the share pricestabilization plan and related measures.
| publicly held shares of the Company through stock exchange trading system within 30 trading days from the date of announcement of the shareholding increase plan. The price shall not exceed Botanee’s audited net assets per share at the end of the previous year, and the acquired shares shall not be sold within 6 months after the completion of share increase. 4. When conducting share price stabilization, non-independent directors and senior management officers who hold office in the Company and receive remuneration from it shall not use cash for shareholding increase that exceed 30% of their annual cash remuneration and dividends received from the Company (after-tax) for a single increase, and the funds used for shareholding increase in a year shall not exceed their annual cash remuneration received in the previous year. If the above standards are exceeded, relevant share price stabilization measures will be stopped in the current year. But the share price still needs to be stabilized in the next year, the Company will continue to implement the share price stabilization plan in accordance with the above principles; 5. Non-independent directors and senior management officers who hold office in the Company and receive remuneration from it shall sign relevant commitments in accordance with the plan for stabilizing stock price and relevant measures. Within 3 years after the Company is listed, the Company will urge newly elected or appointed directors (excluding independent directors and directors who do not hold office in the Company and receive remuneration from it) and senior management officers to sign relevant commitments in accordance with the provisions of the share price stabilization plan and related measures. | ||||||
| Undertakings made during initial public offering or refinancing | Botanee | Measures and undertakings for share repurchase and buy-back | 1. If Botanee triggers the plan to stabilize its stock price after listing, it will repurchase its shares in accordance with the Measures and Undertakings for Stabilizing Stock Price; 2. If securities regulatory authority or other competent authorities identify falsehoods, misleading statements or major omissions in the Prospectus for the Initial Public Offering of Shares of Yunnan Botanee Bio- Technology Group Co., Ltd. and Listing on the Growth Enterprise Market, and such falsehoods, misleading statements or major omissions have a significant and substantial impact on judging whether the Company complies with the conditions for initial public offering and listing stipulated by laws, regulations and normative documents, | Jun. 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Botanee will perform the obligation ofshare repurchase in accordance withthe Share Repurchase and Share Buy-back Commitment for FraudulentIssuance and Listing.
| Botanee will perform the obligation of share repurchase in accordance with the Share Repurchase and Share Buy- back Commitment for Fraudulent Issuance and Listing. | ||||||
| Undertakings made during initial public offering or refinancing | Nuona Technology | Measures and undertakings for share repurchase and buy-back | 1. If Botanee triggers the plan to stabilize its stock price after listing, Nuona Technology will repurchase its shares in accordance with the Measures and Undertakings for Stabilizing Stock Price; 2. If securities regulatory authority or other competent authorities identify falsehoods, misleading statements or major omissions in the Prospectus for the Initial Public Offering of Shares of Yunnan Botanee Bio- Technology Group Co., Ltd. and Listing on the Growth Enterprise Market, and such falsehoods, misleading statements or major omissions have a significant and substantial impact on judging whether the Company complies with the conditions for initial public offering and listing stipulated by laws, regulations and normative documents, Nuona Technology will perform the obligation of share repurchase in accordance with the Share Repurchase and Share Buy- back Commitment for Fraudulent Issuance and Listing. | Jun. 29, 2020 | Long-term | Ongoing |
| Undertakings made during initial public offering or refinancing | Guo Zhenyu, and Kevin Guo | Measures and undertakings for share repurchase and buy-back | 1. If the Company triggers a plan to stabilize the Company's share price after listing, I will increase my shareholding in accordance with the Measures and Commitments for Share Price Stabilization; 2. If securities regulatory authority or other competent authorities identify falsehoods, misleading statements or major omissions in the Prospectus for the Initial Public Offering of Shares of Yunnan Botanee Bio- Technology Group Co., Ltd. and Listing on the Growth Enterprise Market, and such falsehoods, misleading statements or major omissions have a significant and substantial impact on judging whether the Company complies with the conditions for initial public offering and listing stipulated by laws, regulations and normative documents, I will perform the obligation of share repurchase in accordance with the Share Repurchase and Share Buy- back Commitment for Fraudulent Issuance and Listing. | Jun. 29, 2020 | Long-term | Ongoing |
| Undertakings made during initial public offering or refinancing | Gao Shaoyang, Ma Xiao, Zhou Wei, Wang Long, and Dong Junzi | Measures and undertakings for stabilizing stock price | 1. If Botanee triggers the plan to stabilize its stock price after listing, non-independent directors and senior management officers who hold office in the Company and receive remuneration from it shall repurchase shares in accordance with the Measures and Undertakings for Stabilizing Stock Price; | Jun. 29, 2020 | Long-term | Ongoing |
| Undertakings made during initial public | Botanee | Measures and undertakings for share | 1. Botanee promises that there are no falsehoods, misleading statements or | Jun. 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
offering orrefinancing
| offering or refinancing | repurchase and buy-back | major omissions in the prospectus of this offering and listing, and bears individual and joint legal liabilities for the authenticity, accuracy and completeness of the prospectus; 2. If securities regulatory authority or other competent authority identify falsehoods, misleading statements or major omissions in the prospectus which have a significant and substantial impact on judging whether Botanee complies with the requirements for initial public offering and listing stipulated by laws, regulations and normative documents, Botanee promises to repurchase all new IPO shares in the following manner according to law. The specific measures are as follows: (1) Under the circumstances permitted by law, if the above circumstances occur during the period when the new shares of Botanee’s IPO have been issued but are not listed for trading, Botanee will repurchase all its IPO shares from online winning investors and offline placing investors at the issue price plus the interest on deposits in the bank for the same period within 30 working days from the date when the securities regulatory authority or other competent departments determine that the Company has the above circumstances; (2) Under the circumstances permitted by law, if the above-mentioned circumstances occur after Botanee’s IPO shares have been listed and traded, the securities regulatory authority or other competent departments shall formulate a share repurchase plan within 5 working days from the date when the Company is determined to have the above-mentioned circumstances and submit it to the General Meeting of Shareholders for deliberation and approval, Botanee will repurchase all its IPO shares through the trading system of Shenzhen Stock Exchange. The repurchase price will be determined on the basis of the issue price and with reference to relevant market factors. In the case of ex-rights and ex-dividends such as dividend distribution, stock dividends and share issuance by transferring capital reserve after the listing of the Company, the above repurchase price shall be adjusted accordingly. | ||||
| Undertakings made during initial public offering or refinancing | Nuona Technology | Share repurchase and buy-back undertakings for fraudulent issuance and listing | 1. Nuona Technology guarantees that the contents of Botanee’s prospectus for this offering are true, accurate and complete; 2. Nuona Technology has carefully reviewed Botanee’s prospectus for this offering, confirmed that there are no falsehoods, misleading statements or major omissions, and promises that: | Jun. 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
(1) If there are falsehoods, misleading
statements or major omissions in theprospectus of this public offering ofshares which have a significant andsubstantial impact on judging whetherBotanee meets the issuance conditionsstipulated by law, Nuona Technologywill repurchase the old shares (if any)that have been publicly offered by it atthe time of IPO according to law, andthe repurchase price will be based onthe issue price (if dividenddistribution, share distribution, capitalreserve conversion to share capital andother ex-rights and ex-dividendmatters occur during this period of theCompany’s shares, the issue priceshall be adjusted accordingly) anddetermined by adding bank depositinterest for the same period, and shallbe implemented in accordance withthe procedures stipulated in relevantlaws, regulations and Botanee’sArticles of Association. Whenimplementing the repurchase of theabove shares, if there are otherprovisions stipulated in laws,regulations and the Articles ofAssociation, such provisions shallprevail;
(2) Nuona Technology agrees to use
the cash dividends enjoyed by it in theprofit distribution plan of the currentyear or subsequent years as theperformance guarantee. If it fails toperform the above repurchaseobligation, Botanee’s shares held by itshall not be transferred.
| (1) If there are falsehoods, misleading statements or major omissions in the prospectus of this public offering of shares which have a significant and substantial impact on judging whether Botanee meets the issuance conditions stipulated by law, Nuona Technology will repurchase the old shares (if any) that have been publicly offered by it at the time of IPO according to law, and the repurchase price will be based on the issue price (if dividend distribution, share distribution, capital reserve conversion to share capital and other ex-rights and ex-dividend matters occur during this period of the Company’s shares, the issue price shall be adjusted accordingly) and determined by adding bank deposit interest for the same period, and shall be implemented in accordance with the procedures stipulated in relevant laws, regulations and Botanee’s Articles of Association. When implementing the repurchase of the above shares, if there are other provisions stipulated in laws, regulations and the Articles of Association, such provisions shall prevail; (2) Nuona Technology agrees to use the cash dividends enjoyed by it in the profit distribution plan of the current year or subsequent years as the performance guarantee. If it fails to perform the above repurchase obligation, Botanee’s shares held by it shall not be transferred. | ||||||
| Undertakings made during initial public offering or refinancing | Guo Zhenyu, and Kevin Guo | Share repurchase and buy-back undertakings for fraudulent issuance and listing | 1. I guarantee that the contents of Botanee’s prospectus for this offering are true, accurate and complete; 2. I have carefully reviewed Botanee’s prospectus for this offering, confirmed that there are no falsehoods, misleading statements or major omissions, and promises that: (1) If there are falsehoods, misleading statements or major omissions in the prospectus of this public offering of shares which have a significant and substantial impact on judging whether Botanee meets the issuance conditions stipulated by law, I will repurchase the old shares (if any) that have been publicly offered by it at the time of IPO according to law, and the repurchase price will be based on the issue price (if dividend distribution, share distribution, capital reserve conversion to share capital and other ex-rights and ex-dividend matters occur during this period of the Company’s shares, the issue price shall be adjusted accordingly) and determined by adding bank deposit interest for the same period, and shall be implemented in accordance with the procedures stipulated in relevant laws, regulations and Botanee’s | Jun. 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Articles of Association. Whenimplementing the repurchase of theabove shares, if there are otherprovisions stipulated in laws,regulations and the Articles ofAssociation, such provisions shallprevail;
(2) I agree to use the cash dividends
enjoyed by it in the profit distributionplan of the current year or subsequentyears as the performance guarantee. IfI fail to perform the above repurchaseobligation, Botanee’s shares held byme shall not be transferred.
| Articles of Association. When implementing the repurchase of the above shares, if there are other provisions stipulated in laws, regulations and the Articles of Association, such provisions shall prevail; (2) I agree to use the cash dividends enjoyed by it in the profit distribution plan of the current year or subsequent years as the performance guarantee. If I fail to perform the above repurchase obligation, Botanee’s shares held by me shall not be transferred. | ||||||
| Undertakings made during initial public offering or refinancing | Nuona Technology, Guo Zhenyu, and Kevin Guo | Measures and undertakings for filling diluted spot return | 1. Nuona Technology/I do not interfere with Botanee’s operation and management activities beyond authority, encroach on Botanee’s interests, transfer benefits to other organizations or individuals free of charge or under unfair conditions, or harm Botanee’s interests in other ways; 2. The remuneration system formulated by the Board of Directors or the Remuneration and Assessment Committee is linked to the implementation of Botanee’s remedial and return measures; 3. If Botanee subsequently introduces equity incentive policies (if any), the exercise conditions of its equity incentive to be announced are linked to the implementation of its remedial and return measures; 4. After the date of issuance of this commitment, if the China Securities Regulatory Commission and the Shenzhen Stock Exchange make new regulatory provisions on remedial measures and commitments, and the above commitments cannot meet their requirements, the Enterprise/I promise that we will issue supplementary commitments in accordance with their latest regulations; 5. If Nuona Technology/I violate such commitments or refuse to fulfill the commitments, Nuona Technology/I voluntarily accept relevant punishment or management measures imposed by the China Securities Regulatory Commission, Shenzhen Stock Exchange, and other securities regulatory authorities on Nuona Technology/I according to law. Nuona Technology/I am willing to bear the liability for compensation according to the law if Nuona Technology/I violate such commitments and cause losses to Botanee or its shareholders. | Jun. 29, 2020 | Long-term | Ongoing |
| Undertakings made during initial public offering or refinancing | Botanee | Measures and undertakings for filling diluted spot return | Botanee will take the following measures to make up for the diluted shareholder returns due to this offering and listing: 1. Strengthen the management of proceeds, improve the use efficiency | Jun. 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
of proceeds, and accelerate theconstruction of projects invested byproceeds. The project invested byproceeds by this offering and listingclosely focuses on the Company’smain business and conforms torelevant national industrial policies.After the project is completed and putinto production, it is conducive toimproving the Company’s technicallevel, expanding the production scale,increasing market share, enhancing theCompany’s profitability, andenhancing its core competitiveness andsustainable development ability. Afterthe completion of this offering andlisting, Botanee will strictly managethe use of the proceeds in accordancewith the Company Law, the SecuritiesLaw and other laws and regulations,normative documents and therequirements of its Measures for theAdministration of Proceeds to ensurethe full and effective use of theproceeds. At the same time, Botaneewill actively promote the constructionand implementation of the investmentproject of the proceeds according tothe promised use and amount of theproceeds, so as to realize the projectincome as soon as possible andsafeguard the interests of all itsshareholders. After the proceeds bythis offering and listing are received,the Company will accelerate theinvestment and construction of theinvestment projects with proceeds,fully mobilize its resources inprocurement, production, sales andcomprehensive management, completethe construction of the investmentprojects in a timely and efficientmanner, ensure the timely arrival ofpersonnel in all aspects, and providesufficient and comprehensive skillstraining for newly introducedpersonnel. And through active marketdevelopment and good communicationwith customers, Botanee ensures thesmooth connection with the marketafter the production line is put intoproduction. Through all-roundpromotion measures, strive to makeprojects invested by proceeds reachproduction as soon as possible andachieve expected benefits;
2. Comprehensively improve
Botanee’s management level, improvethe efficiency of fund use, improve itsoperation efficiency, strengthen budgetmanagement, control its variousexpenses, improve the efficiency offund use, and comprehensively andeffectively control its operation andmanagement risks, thus improvingoperating efficiency and profitability.In addition, Botanee will improve thesalary and incentive mechanism,introduce outstanding talents in themarket, maximize the enthusiasm of
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
employees, and tap the creativity andpotential motivation of employees.Through the above measures, theCompany will comprehensivelyimprove its operational efficiency,reduce costs and improve its businessperformance;
2. Strengthen the return mechanism of
investors: According to the relevantregulations and regulatoryrequirements of the China SecuritiesRegulatory Commission, Botanee hasformulated the applicable articles ofassociation (draft) after listing, furtherclarified and improved the principlesand methods of profit distribution, thespecific conditions and proportions ofprofit distribution, especially cashdividends, the distribution conditionsand proportions of stock dividends,and improved the decision-makingprocedures and mechanisms of profitdistribution and the decision-makingprocedures of profit distribution policyadjustment;
4. Botanee has also formulated the
Dividend Return Plan of YunnanBotanee Bio-Technology Group Co.,Ltd. for the Next Three Years (2020-2022) after listing. It made specificarrangements for profit distribution forthree years after issuance and listing.The Company will maintain thecontinuity and stability of profitdistribution policies, attach importanceto the reasonable return on investmentfor investors, strengthen the protectionof the rights and interests of investors,and take into account the overallinterests of all shareholders and itssustainable development.
5. Other methods: Botanee promises to
continue to supplement, revise,improve and implement varioussystems for the protection of the rightsand interests of its investors in thefuture in accordance with the specificrules and requirements issued by theChina Securities RegulatoryCommission, the Shenzhen StockExchange and other regulatoryagencies, and with reference to thecommon practices of listed companies.The above measures are the guaranteemeasures for the effective use of theproceeds by Botanee for this offeringand listing and the measures to preventthe risk of diluted spot return from thisoffering and listing, and do notrepresent the guarantee made by it forfuture profits.
| employees, and tap the creativity and potential motivation of employees. Through the above measures, the Company will comprehensively improve its operational efficiency, reduce costs and improve its business performance; 2. Strengthen the return mechanism of investors: According to the relevant regulations and regulatory requirements of the China Securities Regulatory Commission, Botanee has formulated the applicable articles of association (draft) after listing, further clarified and improved the principles and methods of profit distribution, the specific conditions and proportions of profit distribution, especially cash dividends, the distribution conditions and proportions of stock dividends, and improved the decision-making procedures and mechanisms of profit distribution and the decision-making procedures of profit distribution policy adjustment; 4. Botanee has also formulated the Dividend Return Plan of Yunnan Botanee Bio-Technology Group Co., Ltd. for the Next Three Years (2020-2022) after listing. It made specific arrangements for profit distribution for three years after issuance and listing. The Company will maintain the continuity and stability of profit distribution policies, attach importance to the reasonable return on investment for investors, strengthen the protection of the rights and interests of investors, and take into account the overall interests of all shareholders and its sustainable development. 5. Other methods: Botanee promises to continue to supplement, revise, improve and implement various systems for the protection of the rights and interests of its investors in the future in accordance with the specific rules and requirements issued by the China Securities Regulatory Commission, the Shenzhen Stock Exchange and other regulatory agencies, and with reference to the common practices of listed companies. The above measures are the guarantee measures for the effective use of the proceeds by Botanee for this offering and listing and the measures to prevent the risk of diluted spot return from this offering and listing, and do not represent the guarantee made by it for future profits. | ||||||
| Undertakings made during initial public offering or refinancing | Nuona Technology, Guo Zhenyu, and Kevin Guo | Measures and undertakings for filling diluted spot return | 1. Nuona Technology/I do not interfere with Botanee’s operation and management activities beyond authority, encroach on Botanee’s interests, transfer benefits to other organizations or individuals free of charge or under unfair conditions, or harm Botanee’s interests in other | June 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
ways;
2. The remuneration system
formulated by the Board of Directorsor the Remuneration and AssessmentCommittee is linked to theimplementation of Botanee’s remedialand return measures;
3. If Botanee subsequently introduces
equity incentive policies (if any), theexercise conditions of its equityincentive to be announced are linked tothe implementation of its remedial andreturn measures;
4. After the date of issuance of this
commitment, if the China SecuritiesRegulatory Commission and theShenzhen Stock Exchange make newregulatory provisions on remedialmeasures and commitments, and theabove commitments cannot meet theirrequirements, the Enterprise/I promisethat we will issue supplementarycommitments in accordance with theirlatest regulations;
5. If Nuona Technology/I violate such
commitments or refuse to fulfill thecommitments, Nuona Technology/Ivoluntarily accept relevant punishmentor management measures imposed bythe China Securities RegulatoryCommission, Shenzhen StockExchange, and other securitiesregulatory authorities on NuonaTechnology/I according to law. NuonaTechnology/I am willing to bear theliability for compensation according tothe law if Nuona Technology/I violatesuch commitments and cause losses toBotanee or its shareholders.
| ways; 2. The remuneration system formulated by the Board of Directors or the Remuneration and Assessment Committee is linked to the implementation of Botanee’s remedial and return measures; 3. If Botanee subsequently introduces equity incentive policies (if any), the exercise conditions of its equity incentive to be announced are linked to the implementation of its remedial and return measures; 4. After the date of issuance of this commitment, if the China Securities Regulatory Commission and the Shenzhen Stock Exchange make new regulatory provisions on remedial measures and commitments, and the above commitments cannot meet their requirements, the Enterprise/I promise that we will issue supplementary commitments in accordance with their latest regulations; 5. If Nuona Technology/I violate such commitments or refuse to fulfill the commitments, Nuona Technology/I voluntarily accept relevant punishment or management measures imposed by the China Securities Regulatory Commission, Shenzhen Stock Exchange, and other securities regulatory authorities on Nuona Technology/I according to law. Nuona Technology/I am willing to bear the liability for compensation according to the law if Nuona Technology/I violate such commitments and cause losses to Botanee or its shareholders. | ||||||
| Undertakings made during initial public offering or refinancing | Gao Shaoyang, Ma Xiao, Zhou Wei, Wang Long, and Dong Junzi | Measures and undertakings for filling diluted spot return | 1. As a director/senior management officer of Botanee, I will not transfer benefits to other organizations or individuals free of charge or on unfair conditions, nor damage the interests of the Company in other ways; 2. I restrict my position-related consumption as a director/senior management officer of Botanee. The position-related consumption refers to incurred by the Company’s director/senior management officer during the performance of their work duties and borne by the Company; 3. I do not use Botanee’s assets to engage in investment and consumption activities unrelated to the performance of duties; 4. The remuneration system formulated by the Board of Directors or the Remuneration and Assessment Committee is linked to the implementation of Botanee’s remedial measures; 5. If Botanee subsequently introduces equity incentive policies (if any), then the exercise conditions of its equity incentive to be announced shall be linked to the implementation of its | June 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
remedial and return measures;
6. After the date of issuance of this
commitment, if the China SecuritiesRegulatory Commission and ShenzhenStock Exchange make new regulatoryprovisions on remedial and returnmeasures and commitments, and theabove commitments cannot meet theirrequirements, I promise that I willissue a supplementary commitment inaccordance with their latestregulations;
7. If I violate such commitment or
refuse to fulfill the commitment, Ivoluntarily assume correspondingresponsibilities in accordance with therelevant regulations of the ChinaSecurities Regulatory Commission andthe Shenzhen Stock Exchange.
| remedial and return measures; 6. After the date of issuance of this commitment, if the China Securities Regulatory Commission and Shenzhen Stock Exchange make new regulatory provisions on remedial and return measures and commitments, and the above commitments cannot meet their requirements, I promise that I will issue a supplementary commitment in accordance with their latest regulations; 7. If I violate such commitment or refuse to fulfill the commitment, I voluntarily assume corresponding responsibilities in accordance with the relevant regulations of the China Securities Regulatory Commission and the Shenzhen Stock Exchange. | ||||||
| Undertakings made during initial public offering or refinancing | Botanee | Undertaking on profit distribution policy | Botanee’s Articles of Association (Draft) has been deliberated on and approved at the Second Extraordinary General Meeting of Shareholders in 2020, and Botanee made the following undertakings on profit distribution policy and other matters: 1. Principles of profit distribution: Botanee implements an active profit distribution policy, attaches importance to the reasonable return on investment to shareholders, and maintains continuity and stability while taking into account its long-term interests, the overall interests of all shareholders and its sustainable development. It may distribute profits in the form of cash or shares, and cash dividends are preferred. The profit distribution shall not exceed the scope of accumulated distributable profits, and shall not damage the Company’s sustainable operation ability. Botanee’s Board of Directors, Board of Supervisors and the General Meeting of Shareholders should fully take into account the opinions of independent directors, external supervisors and public investors when making decisions and justifications for profit distribution policies. Botanee shall distribute profits at least once a year, and the accumulated distributed profits for every three consecutive years shall not be less than 30% of the average annual distributable profits realized in the last three years (the above financial indicators are calculated according to the standard of the parent company); 2. Ways of profit distribution: Botanee can distribute dividends through cash, stocks or cash-stock combination, and can carry out interim dividends if conditions permit; 3. Differentiated cash dividend policy: (1) The Board of Directors shall comprehensively consider the characteristics of the industry, its development stage, its business model, | Jun. 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
profitability and whether there aremajor capital expenditurearrangements, distinguish thefollowing situations, and proposedifferentiated cash dividend policies inaccordance with the proceduresstipulated in the Company’s Articles ofAssociation of:
(a) If Botanee’s development is matureand there is no major capitalexpenditure arrangement, theproportion of cash dividends in thisprofit distribution shall be at least 80%;(b) If Botanee is in the mature stage ofdevelopment and there are majorcapital expenditure arrangements, theproportion of cash dividends to thisprofit distribution shall be at least 40%during profit distribution;(c) If Botanee is in growth stage andthere are major capital expenditurearrangements, the proportion of cashdividends to this profit distributionshall be at least 20% during profitdistribution;
(2) Specific conditions and proportion
of cash dividends:
(a) Botanee’s profits in the current yearand accumulated undistributed profitsare positive, and the Company cancontinue to operate and develop for alongtime;(b) Botanee has no significantinvestment plan or significant cashexpenditure. On the premise ofmeeting the above conditions, its profitdistribution shall not exceed the scopeof accumulated distributable profits,and the profits distributed in cash in asingle year shall not be less than 10%of the distributable profits realized inthe current year (the above financialindicators are calculated according tothe standard of the parent company).Under the condition that Botanee hasreal and reasonable factors such asgrowth and dilution of net assets pershare, it can distribute profits by stockdividends.
3. Major investment plans or major
cash expenditures refer to one of thefollowing situations:
(1) Botanee’s cumulative expenditure
on foreign investment, assetsacquisition or equipment purchase inthe next 12 months reaches or exceeds50% of its latest audited net assets andexceeds CNY 50 million;
(2) Botanee’s cumulative expenditure
on foreign investment, assetsacquisition or equipment purchase inthe next 12 months reaches or exceeds30% of its latest audited total assets;
(3) The net cash flow generated from
Botanee’s operating activities in thecurrent year is less than 20% of itsdistributable profits realized in the
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
current year;
(4) Other circumstances stipulated by
the China Securities RegulatoryCommission or the Shenzhen StockExchange. Major investment plans ormajor cash expenditures that meet theabove conditions shall be submitted tothe General Meeting of Shareholdersfor deliberation and approval afterbeing reviewed by the Board ofDirectors.
4. Adjustment of profit distribution
policy: Botanee shall strictlyimplement the cash dividend policydetermined in the Articles ofAssociation and the specific cashdividend plan reviewed and approvedby the General Meeting ofShareholders. When Botanee reallyneeds to adjust the cash dividendpolicy stipulated in the Articles ofAssociation according to its productionand operation needs, investmentplanning and long-term development,or there are major changes in itsexternal business environment, theBoard of Directors shall fullydemonstrate the feasibility of adjustingor changing the profit distributionpolicy, and submit it to the GeneralMeeting of Shareholders for approvalafter forming a special resolution. Thedeliberation at the General Meeting ofShareholders shall be approved bymore than 2/3 of the voting rights heldby the shareholders (includingshareholder’s proxies) attending themeeting. Independent directors shallexpress independent opinions on thismatter, and the Board of Supervisorsshall also express opinions on thismatter. When Botanee proposes toadjust the profit distribution policy, itshall take the interests of shareholdersas the starting point, pay attention tothe protection of the interests ofshareholders, and specify the reasonsfor the adjustment in the proposalsubmitted to the General Meeting ofShareholders. The adjusted profitdistribution policy shall not violate therelevant provisions of the ChinaSecurities Regulatory Commission andthe stock exchanges.
5. Implementation of profit
distribution: The Board of Directorsshall complete the distribution ofdividends (or shares) within 2 monthsafter the approval of the GeneralMeeting of Shareholders. In the case ofillegal occupation of the funds by anyshareholder, Botanee will deduct thecash dividend to be distributed to thatshareholder to repay the occupiedfunds.
| current year; (4) Other circumstances stipulated by the China Securities Regulatory Commission or the Shenzhen Stock Exchange. Major investment plans or major cash expenditures that meet the above conditions shall be submitted to the General Meeting of Shareholders for deliberation and approval after being reviewed by the Board of Directors. 4. Adjustment of profit distribution policy: Botanee shall strictly implement the cash dividend policy determined in the Articles of Association and the specific cash dividend plan reviewed and approved by the General Meeting of Shareholders. When Botanee really needs to adjust the cash dividend policy stipulated in the Articles of Association according to its production and operation needs, investment planning and long-term development, or there are major changes in its external business environment, the Board of Directors shall fully demonstrate the feasibility of adjusting or changing the profit distribution policy, and submit it to the General Meeting of Shareholders for approval after forming a special resolution. The deliberation at the General Meeting of Shareholders shall be approved by more than 2/3 of the voting rights held by the shareholders (including shareholder’s proxies) attending the meeting. Independent directors shall express independent opinions on this matter, and the Board of Supervisors shall also express opinions on this matter. When Botanee proposes to adjust the profit distribution policy, it shall take the interests of shareholders as the starting point, pay attention to the protection of the interests of shareholders, and specify the reasons for the adjustment in the proposal submitted to the General Meeting of Shareholders. The adjusted profit distribution policy shall not violate the relevant provisions of the China Securities Regulatory Commission and the stock exchanges. 5. Implementation of profit distribution: The Board of Directors shall complete the distribution of dividends (or shares) within 2 months after the approval of the General Meeting of Shareholders. In the case of illegal occupation of the funds by any shareholder, Botanee will deduct the cash dividend to be distributed to that shareholder to repay the occupied funds. | ||||||
| Undertakings made during initial public offering or | Botanee | Undertaking to assume compensation liabilities | 1. Botanee promises that there are no falsehoods, misleading statements or major omissions in its prospectus for this offering and listing, and it shall bear | Jun. 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
refinancing
| refinancing | individual and joint legal liabilities for the authenticity, accuracy and completeness of the prospectus; 2. If there are falsehoods, misleading statements or major omissions in the prospectus which result in losses to investors in the securities trading of Botanee’s shares, Botanee will compensate investors for their losses according to law. The specific measures are as follows: After the China Securities Regulatory Commission and the Shenzhen Stock Exchange make a formal decision on administrative penalty to Botanee and verify that Botanee has committed the above illegal acts, Botanee will let public investors who file a claim to register related formation, and pay compensation in time after verifying their qualification and the amount of losses suffered by them. | |||||
| Undertakings made during initial public offering or refinancing | Nuona Technology | Undertaking to assume compensation liabilities | 1. Nuona Technology guarantees that the contents of Botanee’s prospectus for this offering are true, accurate and complete; 2. Nuona Technology has carefully reviewed Botanee’s prospectus for this offering, confirmed that there are no falsehoods, misleading statements or major omissions, and promise that: (1) If investors suffer losses in securities trading due to falsehoods, misleading statements or major omissions in the prospectus of Botanee’s public offering of shares, Nuona Technology will compensate them for the losses according to law; (2) Nuona Technology agrees to use cash dividends enjoyed by it in Botanee’s profit distribution plan for the current year or subsequent years as performance guarantee. If Nuona Technology fails to perform the above compensation obligations, Botanee’s shares held by it shall not be transferred. | Jun. 29, 2020 | Long-term | Ongoing |
| Undertakings made during initial public offering or refinancing | Guo Zhenyu, and Kevin Guo | Undertaking to assume compensation liabilities | 1. I guarantee that the contents of Botanee’s prospectus for this offering are true, accurate and complete; 2. I have carefully reviewed Botanee’s prospectus for this offering, confirmed that there are no falsehoods, misleading statements or major omissions, and promise that: (1) If investors suffer losses in securities trading due to falsehoods, misleading statements or major omissions in the prospectus of Botanee’s public offering of shares, I will compensate them for the losses according to law; (2) I agree to use cash dividends enjoyed by me in Botanee’s profit distribution plan for the current year or subsequent years as performance guarantee. If I fail to perform the | Jun. 29, 2020 | Long-term | Ongoing |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
above compensation obligations,Botanee’s shares held by me shall notbe transferred.
| above compensation obligations, Botanee’s shares held by me shall not be transferred. | ||||||
| Undertakings made during initial public offering or refinancing | Gao Shaoyang, Ma Xiao, Zhou Wei, Wang Long, and Dong Junzi | Undertaking to assume compensation liabilities | 1. I guarantee that the contents of Botanee’s prospectus for this offering are true, accurate and complete; 2. I have carefully reviewed Botanee’s prospectus for this offering, confirmed that there are no falsehoods, misleading statements or major omissions, and promise that if the China Securities Regulatory Commission, Shenzhen Stock Exchange or judicial authorities identify falsehoods, misleading statements or major omissions in the prospectus which result in actual losses to investors in securities trading, I will compensate investors for the losses according to law. | Jun. 29, 2020 | Long-term | Ongoing |
| Undertakings made during initial public offering or refinancing | Nuona Technology, Guo Zhenyu, and Kevin Guo | Undertaking to avoid horizontal competition | 1. I/Nuona Technology currently is not engaged in the same main business as the issuer, and there will be no direct or indirect horizontal competition with the issuer. In the future, I/Nuona Technology will not engage in any form of business activities that are the same or similar to the issuer’s existing main business and related products, including horizontal competition with the issuer in the form of investments, acquisitions, mergers or other economic organizations that have the same or similar to the issuer’s existing main business and related products. 2. The enterprises that I/Nuona Technology currently or will invest in or control in the future are not engaged in the same main business as the issuer, and do not compete directly or indirectly with the issuer. If the enterprises controlled by me/Nuona Technology intend to conduct the same main business as the issuer, I/Nuona Technology will exercise the right of veto to ensure that there is no direct or indirect horizontal competition with the issuer. 3. If there are business opportunities related to the issuer’s main business, I/Nuona Technology will give priority to transfer or introduce it to the issuer. For projects that the issuer has already constructed or plans to invest in, I/Nuona Technology will avoid being identical or similar to the issuer in terms of investment direction and project selection, and will not compete with the issuer in the same industry to safeguard the interests of the issuer. If the rights and interests of the issuer are damaged due to violation of the above commitments by myself/our company and other companies controlled by me/Nuona Technology, I/Nuona Technology will bear corresponding liability for compensation in accordance with the law. | Mar. 20, 2020 | Long-term | Ongoing [C1] |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
1.2 Where Any Earnings Forecast Was Made for Any of Botanee’s Assets Or Projects and the ReportingPeriod Is Still Within the Forecast Period, Botanee Shall Explain Whether the Performance of the Asset orProject Reaches the Earnings Forecast and Why
□ Applicable ? N/A
2. Occupation of the Company’s Capital by Its Controlling Shareholder or Related Parties forNon-Operating Purposes
□ Applicable ? N/A
No non-operating capital occupied by Botanee’s controlling shareholders and other related parties was not identified within thereporting period. For details, please refer to the Special Audit Report on the Summary of Non-operating Fund Occupation and OtherRelated Fund Transactions of Yunnan Botanee Bio-Technology Group Co., Ltd. in 2023 disclosed by CNINFO(http://www.cninfo.com.cn).
3. Illegal Provision of Guarantees for External Parties
□ Applicable ? N/A
During the reporting period, the Company has no illegal foreign guarantees.
4. Explanation of the Board of Directors Regarding the Last “Non-standard Audit Opinion”
□ Applicable ? N/A
5. Explanation by the Board of Directors, Supervisory Committee, and Independent Directors(If Any) Regarding “Non-standard Audit Opinion” for the Reporting Period
□ Applicable ? N/A
6. Changes in Accounting Policies and Accounting Estimates as Compared to the FinancialReport for the Prior Year, as well as Correction of Material Accounting Errors
□ Applicable ? N/A
| Whether the commitments are duly performed | Yes |
| Whether the undertakings were fulfilled on time or not Specific reasons for failure to fulfill any undertakings and plan for the next step | N/A. |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
7. Reason for Changes in Consolidated Financial Statements as Compared with FinancialReport for the Prior Year
? Applicable □ N/AFor details, please refer to “43. Changes in Significant Accounting Policies and Accounting Estimates” in item 5 “Changes in theScope of Consolidation” under Section X of this report.
8. Engagement and Disengagement of CPA Firm
| Name of the domestic CPA firm | Talent Certified Public Accountants (Special General Partnership) |
| Botanee’s payment to the domestic CPA firm | CNY 2 million |
| Consecutive years of the audit service provided by the domestic CPA firm | 6 |
| Names of the certified public accountants from the domestic CPA firm | Wu Ting, and Zhang Xuewen |
| Consecutive years of the audit service provided by the certified public accountants from the domestic CPA firm | 1 years, 2 years |
| Name of the overseas CPA firm (if any) | N/A |
| Botanee’s payment to the overseas CPA firm (if any) | N/A |
| Consecutive years of the audit service provided by the overseas CPA firm (if any) | N/A |
| Names of the certified public accountants from the overseas CPA firm (if any) | N/A |
| Consecutive years of the audit service provided by the certified public accountants from the overseas CPA firm (if any) | N/A |
Whether the CPA firm was changed in the current period or not:
? Yes □ NoEngagement of any CPA firm for internal control audit, financial advisor or sponsor:
□ Applicable ? N/A
9. Possibility of Delisting after Disclosure of this Report
□ Applicable ? N/A
10. Bankruptcy and Reorganization
□ Applicable ? N/A
11. Material Litigation and Arbitration
□ Applicable ? N/A
12. Punishments and Rectifications
□ Applicable ? N/A
13. Credit Conditions of Botanee as well as Its Controlling Shareholder and Actual Controller
□ Applicable ? N/A
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
14. Significant Related Transactions
14.1 Continuing Related Transactions
□ Applicable ? N/A
14.2 Related Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable ? N/A
14.3 Related Transactions Arising from Joint Investments in External Parties
□ Applicable ? N/A
14.4 Credits and Liabilities with Related Parties
□ Applicable ? N/A
14.5 Transactions with Related Finance Companies
□ Applicable ? N/A
14.6 Transactions between Finance Companies Controlled by the Company and Related Parties
□ Applicable ? N/A
14.7 Other Significant Related Transactions
? Applicable □ N/ABotanee held the 2nd Meeting of the Second Board of Directors on June 29, 2022, at which directors deliberated on and approvedthe Proposal on Investments in Cooperation with Professional Investment Institutions and Transactions with Related Party. TheCompany intended to invest in Hangzhou Sequoia Shengheng Equity Investment Partnership (Limited Partnership) (hereinafterreferred to as “Sequoia Fund”) established by Sequoia Capital Equity Investment Management (Tianjin) Co., Ltd. as the manager andHangzhou Sequoia Kunpeng Management Consulting Partnership (Limited Partnership) as the general partner, and planned to sign theLimited Partnership Agreement on Hangzhou Sequoia Shengheng Equity Investment Partnership (Limited Partnership). As one of thelimited partners of Sequoia Fund, Botanee subscribed CNY100 million with its own funds. The share of this investment in SequoiaFund will be confirmed according to final actual fundraising. As of the end of the reporting period, Botanee has paid CNY180 million.
Inquiries on the website where the interim report of major related transactions was disclosed:
| Name of interim announcement | Disclosure date of interim announcement | Website for interim bulletin |
| Announcement of Yunnan Botanee Bio-Technology Group Co., Ltd. on Cooperation with Professional Investment Institutions and Related Transactions | June 30, 2022 | CNINFO (http://www.cninfo.com.cn) |
15. Significant Contracts and Their Execution
15.1 Trusteeship, Contracting, and Leasing
(1) Trusteeship
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
□ Applicable ? N/A
(2) Contracting
□ Applicable ? N/A
(3) Leasing
□ Applicable ? N/A
Description:
During the reporting period, the premises leased by us were mainly used for R&D, storage and office purposes. And there was nomajor leasing projects that brought that brought gains or losses to us exceeding 10% of our total profit.
15.2 Major Guarantees
□ Applicable ? N/A
15.3 Entrusted Cash Management
(1) Entrusted Wealth Management
? Applicable □ N/A
Overview of entrusted wealth management during the reporting period:
Unit: CNY
| Category | Source of fund entrusted for management | Amount of entrusted fund | Outstanding balance | Overdue irrecoverable amount | Impairment provision for overdue unrecovered fund |
| Financial products from bank | Self-owned fund | 1,170,000,000 | 373,987,200 | ||
| Financial products from bank | Raised fund | 490,000,000 | |||
| Financial products from securities traders | Self-owned fund | 680,000,000 | 551,662,300 | ||
| Financial products from securities traders | Raised fund | 790,000,000 | 536,871,400 | ||
| Trust-based financial products | Self-owned fund | 154,000,000 | 85,835,800 | ||
| Total | 3,284,000,000 | 1,548,356,700 | |||
Details of high-risk entrusted wealth management with large amount for a single transaction, low security or poor liquidity:
□ Applicable ? N/A
Principal unrecovered or other conditions causing impairment for entrusted fund:
□ Applicable ? N/A
(2) Entrusted loans
□ Applicable ? N/A
15.4 Other Significant Contracts
□ Applicable ? N/A
16. Other Significant Events
? Applicable □ N/A
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
For details, please refer to “4. Other Related Parties” in item 14 “Related Parties and Transactions with Them” under Section X ofthis report.
17. Significant Events of Subsidiaries
□ Applicable ? N/A
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Section VII Changes in Shares and Information about Shareholders
1. Changes in Shares
1.1 Changes in Shares
Unit: share
| Before | Increase (+)/decrease (-) in this change | After | |||||||
| Quantity | Percentage | New issue | Bonus shares | Share issuance by transferring capital reserve | Miscellaneous | Subtotal | Quantity | Scale | |
| 1. Restricted shares | 206,206,289 | 48.68% | 206,206,289 | 48.68% | |||||
| 1.1 Shares held by the state | |||||||||
| 1.2 Shares held by state-owned corporations | |||||||||
| 1.3 Shares held by other domestic investors | 206,206,289 | 48.68% | 206,206,289 | 48.68% | |||||
| Among which: shares held by domestic corporations | 206,206,289 | 48.68% | 206,206,289 | 48.68% | |||||
| Shares held by domestic individuals | |||||||||
| 1.4 Shares held by foreign investors | |||||||||
| Among which: shares held by foreign corporations | |||||||||
| Shares held by foreign individuals | |||||||||
| 2. Non-restricted shares | 217,393,711 | 51.32% | 217,393,711 | 51.32% | |||||
| 2.1 CNY common shares | 217,393,711 | 51.32% | 217,393,711 | 51.32% | |||||
| 2.2 Domestically listed foreign shares | |||||||||
| 2.3 Overseas listed foreign shares | |||||||||
| 2.4 Other | |||||||||
| 3. Total shares | 423,600,0 00 | 100.00% | 423,600,0 00 | 100.00% | |||||
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Reasons for the changes in shares:
□ Applicable ? N/A
Approval of of the changes in shares:
□ Applicable ? N/A
Transfer for share ownership:
□ Applicable ? N/A
Effects of changes in shares on basic EPS, diluted EPS, net assets per share attributable to common shareholders of theCompany and other financial indexes over the last year and the last reporting period:
□ Applicable ? N/A
Other contents that Bonatee considers necessary or is required by securities regulatory authority to disclose:
□ Applicable ? N/A
1.2 Changes in Restricted Shares
? Applicable □ N/A
Unit: share
| Shareholder | Restricted shares as at the beginning of the period | Increased in current period | Unlocked in current period | Restricted shares as at the end of the period | Reasons for trading restriction | Date of unlocking |
| Nuona Technology | 195,212,611 | 195,212,611 | Shares issued before IPO | Mar. 25, 2024 (note) | ||
| Yunnan Haqisheng | 10,993,678 | 10,993,678 | Shares issued before IPO | Mar. 25, 2024 (note) | ||
| Total | 206,206,289 | 206,206,289 | -- | -- |
Note: For details, please refer to the Indicative Announcement on the Listing and Circulation of Part of the Issued Shares ofYunnan Botanee Bio-Technology Group Co., Ltd. before Its Initial Public Offering (announcement No.: 2024-008) disclosed byCNINFO (http://www.cninfo.com.cn).
2. Issuance and Listing of Securities
2.1 Issuance of Securities (Excluding Preferred Shares) in the Reporting Period
□ Applicable ? N/A
2.2 Changes in Our Total Shares and Shareholder Structure, as well as Asset and Liability Structures
□ Applicable ? N/A
2.3 Existing staff-held shares
□ Applicable ? N/A
3. Shareholders and Actual Controller
3.1 Total Number of Shareholders and Their Shareholdings
Unit: share
| Ordinary shareholders as of the end of the reporting period | 36,678 | Ordinary shareholders as at the end of the month before the disclosure of the annual report | 34,356 | Preferred shareholders whose voting rights are resumed at the end of the reporting period (if any) (see note 9) | Preferred shareholders whose voting rights are resumed at the end of the month before the disclosure of the annual report (if any) (see note 9) | Shareholders holding special voting shares (if any) | |||
| Shareholders holding more than 5% our shares or top 10 shareholders (excluding shares loaned through refinancing) | |||||||||
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Shareholder
| Shareholder | Nature of shareholder | Shareholding proportion | Number of shares held at the end of the reporting period | Share increase /decrease during the reporting period | Number of shares subject to trading restriction | Number of unrestricted shareholdings | Pledged, marked or frozen shares | |||
| Status of shares | Quantity | |||||||||
| Nuona Technology | Domestic non-state-owned corporation | 46.08% | 195,212,611 | 195,212,611 | N/A | |||||
| Sequoia Juye | Domestic non-state-owned corporation | 14.58% | 61,763,257 | 61,763,257 | N/A | |||||
| Zhenli Consulting | Domestic non-state-owned corporation | 6.54% | 27,685,934 | -6,314,300 | 27,685,934 | N/A | ||||
| Hong Kong Securities Clearing Company Limited | Overseas legal person | 2.94% | 12,463,299 | 3,315,352 | 12,463,299 | N/A | ||||
| Yunnan Haqisheng | Domestic non-state-owned corporation | 2.60% | 10,993,678 | 10,993,678 | N/A | |||||
| Xiamen Chonglou Yunshui Investment Partnership (Limited Partnership) | Domestic non-state-owned corporation | 1.88% | 7,959,753 | -4,730,573 | 7,959,753 | N/A | ||||
| Kuwait Investment Authority | Overseas legal person | 1.02% | 4,330,337 | 4,330,337 | 4,330,337 | N/A | ||||
| National Social Security Fund 504 Portfolio | Other | 0.49% | 2,068,475 | 816,930 | 2,068,475 | N/A | ||||
| China Taiping General Insurance Co., Ltd.-Traditional-General Insurance Products | Other | 0.39% | 1,634,939 | 1,084,966 | 1,634,939 | N/A | ||||
| Industrial and Commercial Bank of China Co., Ltd.-E Fund GEM Traded Open-End Index Securities Investment Fund | Other | 0.36% | 1,507,481 | 841,100 | 1,507,481 | N/A | ||||
| Status of the strategic investor or general legal person becoming one of top 10 shareholders due to equity offering (if any) (see note 4) | N/A | |||||||||
| Explanations of relationships between or concerted actions of the aforementioned shareholders | Both Nuona Technology and Yunnan Haqisheng are enterprises controlled by the actual controllers GUO ZHENYU and his son KEVIN GUO. Besides, no connected relationship and action in concert between other shareholders is known to the Company. | |||||||||
| Description of the above shareholders’ involvement in proxy/entrusted voting rights and waiver of voting rights | N/A | |||||||||
| Special description of repurchase special account among the top 10 shareholders (if any) (see Note 10) | As of December 31, 2023, the number of unrestricted shares held by Botanee’s repurchase special securities account was 1,539,500 shares, which accounted for approximately 0.36% of the Company’s issued CNY ordinary shares at the end of the reporting period. | |||||||||
| Shareholdings of top ten shareholders without trading limited condition | ||||||||||
| Shareholder | Number of shares not subject to trading restriction as at the end of reporting period | Types of shares | ||||||||
| Types of shares | Quantity | |||||||||
| Sequoia Juye | 61,763,257 | CNY common shares | 61,763,257 | |||||||
| Zhenli Consulting | 27,685,934 | CNY common shares | 12,463,299 | |||||||
| Hong Kong Securities Clearing Company Limited | 12,463,299 | CNY common shares | 12,463,299 | |||||||
| Xiamen Chonglou Yunshui Investment Partnership (Limited Partnership) | 7,959,753 | CNY common shares | 7,959,753 | |||||||
| Kuwait Investment Authority | 4,330,337 | CNY common shares | 4,330,337 | |||||||
| National Social Security Fund 504 Portfolio | 2,068,475 | CNY common shares | 2,068,475 | |||||||
| China Taiping General Insurance Co., Ltd.-Traditional-General Insurance Products | 1,634,939 | CNY common shares | 1,634,939 | |||||||
| Industrial and Commercial Bank of China Co., Ltd.-E Fund GEM Traded Open-End Index Securities Investment Fund | 1,507,481 | CNY common shares | 1,507,481 | |||||||
| China Life Insurance Company Limited - Dividends - Personal Dividends - 005LFH002 Shanghai | 1,326,617 | CNY common shares | 1,326,617 | |||||||
| Industrial and Commercial Bank of China Co., Ltd.-Rongtong Health Industry Flexible Allocation Hybrid Securities Investment Fund | 1,250,000 | CNY common shares | 1,250,000 | |||||||
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Description on the related relationship or concertedaction among top 10 unrestricted tradableshareholders, and between top 10 unrestrictedtradable shareholders and top 10 shareholders
| Description on the related relationship or concerted action among top 10 unrestricted tradable shareholders, and between top 10 unrestricted tradable shareholders and top 10 shareholders | No connected relationship or action in concert among top 10 unrestricted tradable shareholders, and between top 10 unrestricted tradable shareholders and top 10 shareholders are known to us. |
| Description of shareholders participating in securities margin trading (if any) (see Note 5) | N/A |
Top 10 shareholders involved in refinancing shares lending
□ Applicable ? N/A
Changes in top 10 shareholders compared with the previous period:
□ Applicable ? N/A
Differential voting rights arrangements:
□ Applicable ? N/A
Whether any of our top 10 common shareholders or top 10 non-restricted common shareholders conducted any promissoryrepurchase during the reporting period or not:
□ Yes ?No
2. Controlling Shareholder
Nature of the controlling shareholder: foreign-controlled
Type of the controlling shareholder: corporation
| Name | Legal representative/ person in charge | Date of establishment | Organization code | Main businesses |
| Nuona Technology | Guo Zhenyu | May 30, 2012 | 91530000597114966B | Information technology services, technical consultation; enterprise management consultation (the above items do not involve special management measures for foreign investment access) (items that are subject to approval according to law shall be operated only after relevant approvals are obtained from relevant departments). |
| Equity of other domestic and foreign listed companies controlled and equity participation by the controlling shareholder during the reporting period | N/A. | |||
Change in controlling shareholder in the reporting period
□ Applicable ? N/A
3. Actual controller and its Acting-in-concert Parties
Nature of the actual controller: overseas natural person
Type of the actual controller: natural person
| Name of actual controller | Relation with actual controller | Nationality | Right of residence in other countries or regions acquired or not |
| Guo Zhenyu | In person | Canada | Yes |
| Kevin Guo | In person | Dual nationality of Canada and the United States | Yes |
| Main occupation and title | Guo Zhenyu is the Chairman and General Manager of the Company. Kevin Guo does not hold any position in the Company and its subsidiaries at all levels. | ||
| Domestic and foreign listed companies held thereby in the past 10 years | N/A. | ||
Change of the actual controller during the reporting period:
□ Applicable ? N/A
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Block diagram of property right and control relationship between the Company and its actual controller
The actual controller controls the Company via trust or other ways of asset management:
□ Applicable ? N/A
4. Indicate Whether the Cumulative Shares of the Controlling Shareholder or the Largest Shareholder andTheir Acting-in-concert Parties That Are in Pledge Account for 80% or Greater of Their Shareholdings inthe Company
□ Applicable ? N/A
5. Other Corporate Shareholders with a Shareholding Percentage above 10%? Applicable □ N/A
| Name of corporate shareholder | Legal representative/ person in charge | Date of establishment | Registered Capital | Major operation and management activities |
| Sequoia Juye | Shanghai Zhexuan Investment Center (Limited Partnership） | Dec. 3, 2010 | CNY2,784,800,000 | Engage in investment in unlisted enterprises, investment in non-publicly issued shares of listed companies and related consulting services (items subject to approval according to law shall be operated only after relevant approvals are obtained from relevant departments). |
6. Limits on the Company’s Shares Held by Its Controlling Shareholder, Actual Controller, Reorganizer andOther Commitment Subjects
□ Applicable ? N/A
IV. Share Repurchases during the Reporting Period
Progress in the implementation of share repurchase? Applicable □ N/A
| Disclosure date of the scheme | Number of shares to be repurchased | As a percentage of the total share capital | Amount to be used | Repurchase period | Purpose | Number of shares repurchased | Shares repurchased as a percentage of the total target number of the equity incentive scheme (if any) |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Oct. 30, 2023
| Oct. 30, 2023 | Calculated based on the lower limit of the repurchase amount of CNY200 million and the upper limit of the repurchase price of CNY130 per share, the number of repurchases is approximately 1,538,461 shares, and the proportion of repurchased shares accounts for approximately 0.3632% of the Company’s total share capital. Based on the amount of this repurchase, the upper limit is CNY300 million and the upper limit of the repurchase price is CNY130 per share. The number of repurchases is approximately 2,307,692 shares, and the proportion of repurchased shares accounts for approximately 0.5448% of the Company’s total share capital. The specific number of shares repurchased shall be based on the actual number of shares repurchased when the repurchase period expires or the repurchase is terminated. | Within 12 months from the date we held the 10th Meeting of the Second Board of Directors on August 30, 2023 to deliberate on and approve the repurchase plan | Note 1 | 1,539,500 | 0.00% |
Note 1: Based on confidence in Botanee’s future development and recognition of its value, in order to effectively safeguard theinterests of shareholders, enhance investor confidence, and at the same time improve the Company’s long-term incentive mechanism,fully mobilize the enthusiasm of employees, and effectively combine the interests of shareholders, the Company and employees areclosely integrated. In accordance with relevant laws and regulations, we plan to repurchase our shares through centralized biddingtransactions, and all repurchased shares will be used to implement equity incentive plans or employee stock ownership plans. Fordetails, please refer to the Announcement of Yunnan Botanee Bio-Technology Group Co., Ltd. on the First Repurchase of Its Shares(announcement number: 2023-069) and the Announcement of Yunnan Botanee Bio-Technology Group Co., Ltd. on Adjusting the FirstRepurchase of Its Shares (announcement number: 2023-068) disclosed by CNINFO (http://www.cninfo.com.cn).Progress of any repurchased share reduction through centralized price bidding:
□ Applicable ? N/A
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Section VIII Preference Shares
□ Applicable ? N/A
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Section IX Bonds
□ Applicable ? N/A
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Section X Financial Report
1. Auditor’s Report
| Type of the auditor’s opinion | Unqualified opinion |
| Signing date of the auditor’s report | April 24, 2024 |
| Name of the auditor | Talent Certified Public Accountants (Special General Partnership) |
| No. of the auditor’s report | THSZ (2024) No. 01527 |
| Names of certified public accountants | Wu Ting, and Zhang Xuewen |
Text of the auditor’s report
Shareholders of Yunnan Botanee Bio-Technology Group Co., Ltd.,
1. Audit Opinion
We have audited the financial statements of Yunnan Botanee Bio-Technology Group Co., Ltd. (hereinafter referred to as“Botanee”or the “Company”), including Consolidated and Parent Company’s Balance Sheets as of December 31, 2023, as well asConsolidated and Parent Company’s Income Statements, Consolidated and Parent Company’s Cash Flow Statements, Consolidated andParent Company’s Statements of Changes in Owners’ Equity, and Notes to Financial Statements for the year then ended.In our opinion, the attached financial statements are prepared, in all material respects, in accordance with AccountingStandards for Business Enterprises and present fairly the Consolidated and Parent Company's financial position as at December 31,2023, and the Consolidated and Parent Company's financial performance and cash flows for the year then ended.
2. Basis for Audit Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants of China. The section inthe Auditor’s Report titled “CPAs’ Responsibilities for the Audit of the Financial Statements” further describes our responsibilitiesunder these standards. We are independent of the Company in accordance with the China Code of Ethics for Certified PublicAccountants and we have fulfilled our other ethical responsibilities. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion.
3. Key Audit Matters
Key audit matters are, in our professional judgment, the most important matters to the audit of Botanee’s financial statements forthe year 2023. To respond to these matters, we audited the financial statements overall and issued audit opinions. We do not expressany opinions on these matters separately.
(1) Revenue Calculation
i. Description
As described in Financial Statements V.41 “Operating Revenue” below, Botanee’s operating revenue in 2023 amounted toCNY5,522,168,300. As a main source of profits, operating revenue affects key performance indicators. There is a big risk ofmisstatement. Therefore, we consider the authenticity, accuracy and cut-off of revenue as key audit matters.
ii. Audit Methods
1) Understand the internal control mechanism for sales and payment collection, test and evaluate the design and implementationof the internal control mechanism for revenue recognition, and evaluate the compliance of revenue recognition policies withaccounting standards;
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2) Analyze revenue with analysis software to determine whether changes in revenue and gross profit margin are reasonable;
3) Check more details, such as contracts or orders with major customers, receipt forms, etc., to verify whether revenuerecognition is consistent with the accounting policies disclosed;
4) Check the order records of online stores in the information system and analyze such records in terms of concentration degree,average customer transaction, etc.; Verify the authenticity of transactions and identities of major customers for the distribution andconsignment businesses by sending confirmation letters or checking capital flow and vouchers;
5) Audit corresponding accounts receivable, check the transaction amount and balance of accounts receivable at the end of thereporting period with major customers through confirmation letters to verify whether the revenue and accounts receivable are accurate;
6) Understand change and refund policies, estimated refund calculation sheet, etc., and check whether the estimated change andrefund rate is reasonable; check change and refund data after the inspection period, and compare with estimated change and refunddata;
7) Perform cut-off testing on revenue to verify whether revenue recognition is conducted in the appropriate accounting period.
(2) Inventory Balance and Provision for Inventory Impairment
i. Description
As described in Financial Statements V.8 below, the book balance of Botanee’s inventory on December 31, 2023 wasCNY930,609,400, and the balance of the provision for inventory impairment was CNY26,196,100. Therefore, Botanee had asufficient inventory balance at the end of the reporting period. Botanee’s inventory was calculated at the lower of the cost or the netrealizable value. The provision for inventory impairment was calculated based on the difference between the cost of an individualinventory/category of inventory over the net realizable value. When confirming the net realizable value of a product, we find that theselling price is related to the remaining validity period of the product and the inventory status. As cosmetics are upgraded quickly,there may be risks of slow sales and inaccurate calculation of the provision for inventory impairment. In addition, when calculatingthe provision for inventory impairment, we have to consider the judgment of Botanee’s management (hereinafter referred to as the“management”) to determine the net realizable value. Therefore, we take the availability and accuracy of the inventory at the end ofthe reporting period as a key audit matter.
ii. Audit Methods
1) Understand internal control mechanisms for inventory purchasing, production, warehousing, delivery, etc., and test the designand implementation of the internal control mechanisms;
2) For inventory: Understand and check all warehouse bills of materials and inventory counting records, and sample-monitor theinventory to verify whether there are unsalable, gone-bad or damaged products; For the goods stored off-site: Random-check theinventory of major off-site warehouses at the end of the reporting period;
3) Understand Botanee’s calculation of inventory impairment, evaluate whether the management’s estimate (the provision forinventory impairment) is reasonable, and re-calculate the provision for inventory impairment.
4. Other Information
The management is responsible for other information. Other information comprises the information included in the Company’sAnnual Report of 2022, but does not include the financial statements and our audit report thereon.
Our audit opinion on the financial statements does not cover the other information and we do not express any form of assuranceconclusion thereon.
In connection with our audit on the financial statements, our responsibility is to read the other information and , in doing so,consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the auditor otherwise appears to be materially misstated.
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Based on the work that we have executed, we should report the fact in case of determining the material misstatement of otherinformation. In this regard, we have nothing to report.
5. Responsibilities of the Management and Those Charged with Governance for the Financial Statements
The Management shall be responsible for preparing financial statements that present fairly the data in accordance with theAccounting Standards for Business Enterprises, and for designing, implementing and maintaining the internal controls as theManagement deems necessary to enable the preparation of financial statements free from material misstatement, whether due to fraudor error.
In preparation of the financial statement, the management is responsible for assessing the going concern ability of Botanee,disclosing the going concern related items (if applicable) and applying going concern assumptions, unless otherwise the managementplans to liquidate, stop operation or it has no other practical choice.
Those charged with governance (hereinafter referred to as “the Governance”) of Botanee are responsible for overseeing Botanee’sfinancial reporting process.
6. CPAs’ Responsibility for Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from materialmisstatement, whether due to fraud or error, and to issue an audit report that includes our opinion. Reasonable assurance is a high levelof assurance, but it does not guarantee that an audit conducted in accordance with auditing standards can always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,they could reasonably be expected to influence the economic decisions users would take on the basis of these financial statements.
We exercise professional judgment and maintain professional skepticism in carrying out our audit in accordance with theAuditing Standards. At the same time, we also:
(1) Identify and assess risks of material misstatement of financial statements due to fraud or errors, design and implement auditprocedures to address these risks, and obtain adequate and appropriate audit evidence as a basis for issuing audit opinions. The risk offailing to detect a material misstatement due to fraud is higher than that of failing to detect a material misstatement resulting fromerror, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or overriding of internal control;
(2) Understand audit-related internal control in order to design appropriate audit procedures, but not for the purpose of expressingopinions on the effectiveness of internal control;
(3) Evaluate the appropriateness of the Management's selection of accounting policies and the rationality of accounting estimatesas well as related disclosures;
(4) Conclude on the appropriateness of the Management’s use of the going concern basis of accounting. conclude, based on theaudit evidence obtained, whether a material uncertainty exists related to any events or conditions that cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attentionin our Audit Report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.Our conclusions are based on information available as of the date of the Audit Report. However, future events or conditions maycause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation (including disclosure), structure and content of the financial statements, and whether thefinancial statements provide a fair representation of the underlying transactions and events;
(6) Obtain sufficient and appropriate audit evidence on the financial information of entities or business activities in the Companyto express an audit opinion on the consolidated financial statements. We are responsible for guiding, supervising, and performing thegroup audit, and assume all responsibilities for our opinion.
We communicate with the Governance regarding, among other matters, the planned scope and timing of the audit and significantaudit findings, including any significant deficiencies in internal control that we identify during our audit.
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
We also provide the Governance with a statement regarding compliance with ethical requirements related to independence andcommunicate with the Governance about all relationships and other matters that could reasonably be considered to affect ourindependence, as well as related precautions (if applicable).
We have determined which matters are the most important to audit the financial statement in the current period from the matterwhich has been communicated with the Governance, therefore, these matters form the key audit matters. We described these matters inour auditor's report, except in those cases where public disclosure of such matters is prohibited by law or regulation, or in those rarecases where we determine not to communicate with the Governance about a matter in our auditor's report if we reasonably expect thatthe adverse consequences of communicating about such matter in our auditor's report would outweigh the benefits in the public interest.
Talent Certified Public Accountants (Limited Liability Partnership)
Nanjing, ChinaApril 24, 2024
Certified Public Accountant of China: Wu Ting(Project Partner)Certified Public Accountant of China: Zhang Xuewen
2. Financial Statements
All amounts are presented in CNY.
2.1 Consolidated Balance Sheet
Prepared by: Yunnan Botanee Bio-Technology Group Co., Ltd.
December 31, 2023
Unit: CNY
| Item | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash at bank and on hand | 2,091,459,861.58 | 2,514,295,715.26 |
| Settlement reserves | ||
| Loans to banks and other financial institutions | ||
| Financial assets held for trading | 1,238,356,707.34 | 1,433,635,489.84 |
| Derivative financial assets | ||
| Notes receivable | 24,502,124.46 | |
| Accounts receivable | 561,761,929.57 | 270,089,761.85 |
| Receivables financing | 156,659,263.78 | 238,668,244.17 |
| Advances to suppliers | 69,279,116.38 | 41,609,862.79 |
| Premiums receivable | ||
| Reinsurance premium receivable | ||
| Reinsurance contract reserves receivable | ||
| Other accounts receivable | 29,748,433.09 | 20,097,625.25 |
| Including: interest receivable | ||
| Dividends receivable | ||
| Financial assets purchased under agreementstoresell | ||
| Inventories | 904,413,283.67 | 670,748,124.06 |
| Contract assets | ||
| Held-for-sale assets | ||
| Current portion of non-current assets | ||
| Other current assets | 446,396,252.76 | 525,887,794.13 |
| Total current assets | 5,522,576,972.63 | 5,715,032,617.35 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Non-current assets:
| Non-current assets: | ||
| Disbursement of loans and advances to customers | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investment | 212,015,151.15 | 82,775,998.70 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 86,449,823.00 | |
| Investment real estates | 9,021,481.56 | 9,475,142.28 |
| Fixed assets | 667,204,436.83 | 206,366,629.61 |
| Projects under construction | 40,220,147.41 | 349,466,401.13 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 100,712,614.93 | 109,530,667.35 |
| Intangible assets | 193,108,638.64 | 77,944,697.40 |
| Development expenditures | ||
| Goodwill | 413,740,760.61 | |
| Long-term deferred expenses | 93,317,644.84 | 66,734,195.17 |
| Deferred income tax assets | 93,131,250.45 | 52,118,603.26 |
| Other non-current assets | 75,431,420.74 | 50,155,670.77 |
| Total non-current assets | 1,984,353,370.16 | 1,004,568,005.67 |
| Total assets | 7,506,930,342.79 | 6,719,600,623.02 |
| Current liabilities: | ||
| Short-term borrowings | 103,816,588.60 | |
| Borrowings from the central bank | ||
| Placements from banks and other financial institutions | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | 67,562,710.23 | 61,550,650.47 |
| Accounts payable | 334,370,604.40 | 310,822,793.59 |
| Advances from customers | ||
| Contract liabilities | 50,053,638.68 | 58,115,645.49 |
| Financial assets sold under agreements to repurchase | ||
| Customer bank deposits and due to banks and other financial institutions | ||
| Customer brokerage deposits | ||
| Securities underwriting brokerage deposits | ||
| Employee compensation payable | 106,452,763.55 | 104,336,591.10 |
| Taxes payable | 132,117,765.46 | 119,410,385.90 |
| Other payables | 449,282,195.16 | 272,333,824.39 |
| Including: interests payable | ||
| Dividends payable | 4,305.04 | 1,171,873.24 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Handling charges and commission payable
| Handling charges and commission payable | ||
| Reinsurance premium payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 42,102,294.00 | 62,415,988.59 |
| Other current liabilities | 5,455,465.77 | 2,880,738.99 |
| Total current liabilities | 1,291,214,025.85 | 991,866,618.52 |
| Non-current liabilities: | ||
| Insurance contract reserves | ||
| Long-term borrowings | 4,700,000.00 | |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 63,283,532.61 | 50,945,268.73 |
| Long-term payables | 8,600,000.00 | 10,500,000.00 |
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 82,862,738.40 | 55,574,589.18 |
| Deferred tax liabilities | 40,452,457.50 | 8,364,830.43 |
| Other non-current liabilities | ||
| Total non-current liabilities | 199,898,728.51 | 125,384,688.34 |
| Total liabilities | 1,491,112,754.36 | 1,117,251,306.86 |
| Owners' equity: | ||
| Share capital | 423,600,000.00 | 423,600,000.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 2,846,004,685.04 | 2,846,004,685.04 |
| Less: treasury shares | 109,838,205.82 | |
| Other comprehensive incomes | 47,153.49 | -205.63 |
| Special reserves | ||
| Surplus reserve | 211,081,299.10 | 211,081,299.10 |
| General risk provision | ||
| Undistributed profit | 2,490,099,439.21 | 2,072,184,431.65 |
| Total owners' equity attributable to the parent company | 5,860,994,371.02 | 5,552,870,210.16 |
| Minority interest | 154,823,217.41 | 49,479,106.00 |
| Total owners' equity | 6,015,817,588.43 | 5,602,349,316.16 |
| Total liabilities and owners' equity | 7,506,930,342.79 | 6,719,600,623.02 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2.2 Balance Sheet of Parent Company
Unit: CNY
| Item | December 31, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash at bank and on hand | 1,180,715,275.53 | 1,719,036,581.75 |
| Financial assets held for trading | 1,179,764,123.27 | 1,218,089,952.18 |
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 665,045,992.28 | 544,097,038.46 |
| Receivables financing | 44,170,011.64 | 70,766,599.81 |
| Advances to suppliers | 34,878,652.76 | 27,970,405.21 |
| Other accounts receivable | 740,235,643.20 | 28,624,227.84 |
| Including: interest receivable | ||
| Dividends receivable | 169,335.03 | 1,219,704.81 |
| Inventories | 751,485,442.43 | 646,256,536.04 |
| Contract assets | ||
| Held-for-sale assets | ||
| Current portion of non-current assets | ||
| Other current assets | 360,559,949.32 | 503,641,150.71 |
| Total current assets | 4,956,855,090.43 | 4,758,482,492.00 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investment | ||
| Long-term receivables | ||
| Long-term equity investment | 481,799,055.23 | 531,799,055.23 |
| Investment in other equity instruments | ||
| Other non-current financial assets | 56,449,823.00 | |
| Investment real estates | ||
| Fixed assets | 503,133,909.42 | 110,087,336.76 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Projects under construction
| Projects under construction | 26,309,191.66 | 339,435,650.45 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 6,083,132.11 | 34,541,034.33 |
| Intangible assets | 68,101,744.02 | 64,311,765.95 |
| Development expenditures | ||
| Goodwill | ||
| Long-term deferred expenses | 14,275,088.24 | 8,415,929.21 |
| Deferred income tax assets | 9,502,667.43 | 7,801,855.71 |
| Other non-current assets | 45,998,901.86 | 30,091,998.90 |
| Total non-current assets | 1,211,653,512.97 | 1,126,484,626.54 |
| Total assets | 6,168,508,603.40 | 5,884,967,118.54 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Financial liabilities held for trading | ||
| Derivative financial liabilities | ||
| Notes payable | 67,562,710.23 | 61,550,650.47 |
| Accounts payable | 294,405,487.35 | 273,534,578.42 |
| Advances from customers | ||
| Contract liabilities | 24,019,507.89 | 23,646,408.70 |
| Employee compensation payable | 11,147,886.56 | 14,147,048.86 |
| Taxes payable | 82,529,256.12 | 78,138,602.23 |
| Other payables | 302,090,310.94 | 234,257,062.70 |
| Including: interests payable | ||
| Dividends payable | ||
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 2,777,578.52 | 23,518,782.83 |
| Other current liabilities | 75,547.60 | 97,519.01 |
| Total current liabilities | 784,608,285.21 | 708,890,653.22 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 3,797,077.24 | 12,742,104.95 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 13,916,252.61 | 4,470,831.07 |
| Deferred tax liabilities | 6,449,979.48 | 6,003,121.20 |
| Other non-current liabilities | ||
| Total non-current liabilities | 24,163,309.33 | 23,216,057.22 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Total liabilities
| Total liabilities | 808,771,594.54 | 732,106,710.44 |
| Owners’ equity: | ||
| Share capital | 423,600,000.00 | 423,600,000.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 2,845,993,326.27 | 2,845,993,326.27 |
| Less: treasury shares | 109,838,205.82 | |
| Other comprehensive incomes | ||
| Special reserves | ||
| Surplus reserve | 211,800,000.00 | 211,800,000.00 |
| Undistributed profit | 1,988,181,888.41 | 1,671,467,081.83 |
| Total owners’ equity | 5,359,737,008.86 | 5,152,860,408.10 |
| Total liabilities and owners’ equity | 6,168,508,603.40 | 5,884,967,118.54 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2.3 Consolidated Income Statement
Unit: CNY
| Item | Year 2023 | Year 2022 |
| I. Total operating revenue | 5,522,168,263.00 | 5,013,873,729.44 |
| Including: Operating revenue | 5,522,168,263.00 | 5,013,873,729.44 |
| Interest income | ||
| Earned premiums | ||
| Handling charges and commission income | ||
| II. Total operating cost | 4,806,968,860.89 | 3,930,409,505.94 |
| Including: operating costs | 1,441,392,430.61 | 1,243,046,954.61 |
| Interest expenses | ||
| Handling charges and commission expenses | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net provision for insurance contract reserves | ||
| Policy dividend expenses | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 65,184,402.45 | 56,100,151.43 |
| Selling expenses | 2,609,676,656.49 | 2,047,880,755.09 |
| Management expenses | 413,202,672.03 | 343,044,255.35 |
| R&D expenses | 298,817,308.11 | 254,698,441.37 |
| Financial expenses | -21,304,608.80 | -14,361,051.91 |
| Including: interest expenses | 4,966,901.69 | 4,753,216.51 |
| Interest income | 28,548,283.32 | 20,299,817.23 |
| Add: other incomes | 149,420,643.48 | 71,879,343.47 |
| Investment income (loss to be listed with “-”) | 64,362,248.34 | 80,577,953.49 |
| Including: income from investment in associates and joint ventures | 9,705,819.45 | 2,570,038.70 |
| Revenue from derecognition of financial assets at amortized cost | ||
| Exchange earnings (losses to be listed with “-”) | ||
| Net exposure hedging income (loss to be listed with “-”) | ||
| Profit arising from changes in fair value (loss expressed with “-”) | -17,238,886.41 | -5,519,803.92 |
| Credit impairment losses (losses to be listed with “-”) | -14,262,864.63 | 720,648.86 |
| Asset impairment loss (loss to be listed with "-") | -20,197,131.69 | -18,985,622.92 |
| Incomes of assets disposal (losses to be listed with “-”) | 690,284.38 | -27,685.55 |
| III. Operating profit (loss to be listed with "-") | 877,973,695.58 | 1,212,109,056.93 |
| Add: non-operating revenue | 2,139,100.44 | 8,950,542.58 |
| Less: Non-operating expenses | 11,294,246.99 | 7,194,974.27 |
| IV. Total profit (total loss to be listed with "-") | 868,818,549.03 | 1,213,864,625.24 |
| Less: income tax expenses | 109,606,792.65 | 163,332,490.13 |
| V. Net profit (net loss to be listed with "-") | 759,211,756.38 | 1,050,532,135.11 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
(I) Classified by going concern
| (I) Classified by going concern | ||
| 1. Net profit from continuing operations (net loss to be listed with “-”) | 759,211,756.38 | 1,050,532,135.11 |
| 2. Net profit from discontinued operations (net loss to be listed with "-") | ||
| (II) Classified by attribution of ownership | ||
| 1.Net profit attributable to the parent company's shareholders | 756,795,007.56 | 1,051,331,949.57 |
| 2. Non-controlling interests | 2,416,748.82 | -799,814.46 |
| VI. Net of tax of other comprehensive income | -78,932.64 | -207.61 |
| Other net after-tax comprehensive income attributable to the owners of the parent company | 47,359.12 | -207.61 |
| (I) Other comprehensive income that cannot be reclassified through profit or loss | ||
| 1. Changes arising from re-measurement of the defined benefit plan | ||
| 2. Other comprehensive incomes that cannot be reclassified into profit or loss under the equity method | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of the Company’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified into profit or loss | 47,359.12 | -207.61 |
| 1. Other comprehensive income that can be reclassified into profit or loss under the equity method | ||
| 2. Changes in fair value of other creditor's rights investments | ||
| 3. Amount of financial assets reclassified into other comprehensive incomes | ||
| 4. Provision for impairment of credit in other debt investments | ||
| 5. Reserves for cash flow hedge | ||
| 6. Translation difference arising from foreign currency financial statements | 47,359.12 | -207.61 |
| 7. Others | ||
| Other net after-tax comprehensive income attributable to minority shareholders | -126,291.76 | |
| VII. Total comprehensive income | 759,132,823.74 | 1,050,531,927.50 |
| Total comprehensive income attributable to the owners of the parent company | 756,842,366.68 | 1,051,331,741.96 |
| Total comprehensive income attributable to minority shareholders | 2,290,457.06 | -799,814.46 |
| VIII. Earnings per share | ||
| (I) Basic earnings per share | 1.79 | 2.48 |
| (II) Diluted earnings per share | 1.79 | 2.48 |
In case of business combinations under common control in current period, the net profit realized by the combined party beforecombination is CNY0.00 and the net profit realized by the combined party in previous period is CNY0.00.
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2.4 Income Statement of the Parent Company
Unit: CNY
| Item | Year 2023 | Year 2022 |
| I. Operating revenues | 3,598,270,732.74 | 3,601,683,026.81 |
| Less: operating costs | 1,468,142,964.23 | 1,243,741,933.41 |
| Taxes and surcharges | 36,362,963.20 | 35,515,061.69 |
| Selling expenses | 1,036,262,192.27 | 934,022,421.98 |
| Management expenses | 198,935,613.78 | 122,990,371.03 |
| R&D expenses | 236,264,427.90 | 252,376,900.60 |
| Financial expenses | -12,698,510.73 | -8,638,280.66 |
| Including: interest expenses | 752,142.51 | 1,728,145.73 |
| Interest income | 14,538,280.41 | 11,187,419.60 |
| Add: other incomes | 102,079,130.96 | 44,631,990.99 |
| Investment income (loss to be listed with “-”) | 51,541,522.52 | 77,444,660.41 |
| Including: income from investment in associates and joint ventures | ||
| Revenue from derecognition of financial assets at amortized cost | ||
| Net exposure hedging income (loss to be listed with “-”) | ||
| Profit arising from changes in fair value (loss expressed with "-") | 6,123,994.09 | -7,341,890.36 |
| Credit impairment losses (losses to be listed with “-”) | -232,472.77 | 774,330.87 |
| Asset impairment loss (loss to be listed with "-") | -22,419,644.25 | -18,985,622.92 |
| Incomes of assets disposal (losses to be listed with “-”) | 827,403.25 | |
| II. Operating Profit(loss to be listed with “-”) | 772,921,015.89 | 1,118,198,087.75 |
| Add: non-operating revenue | 1,422,919.56 | 7,447,721.69 |
| Less: Non-operating expenses | 8,968,214.08 | 4,708,584.81 |
| III. Total Profit(total loss to be listed with “-”) | 765,375,721.37 | 1,120,937,224.63 |
| Less: income tax expenses | 109,780,914.79 | 155,108,315.18 |
| IV. Net Profit(net loss to be listed with “-”) | 655,594,806.58 | 965,828,909.45 |
| (I) Net profit from continuing operations (net loss to be listed with "- ") | 655,594,806.58 | 965,828,909.45 |
| (II) Net profit from discontinued operations (net loss to be listed with "-") | ||
| V. Net amount of other comprehensive incomes after tax | ||
| (I) Other comprehensive income that cannot be reclassified through profit or loss | ||
| 1. Changes arising from re-measurement of the defined benefit plan | ||
| 2. Other comprehensive incomes that cannot be reclassified into profit or loss under the equity method | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of the Company’s credit risk | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified into profit or loss |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
1. Other comprehensive income that can be reclassified into profit or
loss under the equity method
| 1. Other comprehensive income that can be reclassified into profit or loss under the equity method | ||
| 2. Changes in fair value of other creditor's rights investments | ||
| 3. Amount of financial assets reclassified into other comprehensive incomes | ||
| 4. Provision for impairment of credit in other debt investments | ||
| 5. Reserves for cash flow hedge | ||
| 6. Translation difference arising from foreign currency financial statements | ||
| 7. Others | ||
| VI. Total comprehensive incomes | 655,594,806.58 | 965,828,909.45 |
| VII. Earnings per share: | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2.5 Consolidated Cash Flow Statement
Unit: CNY
| Item | Year 2023 | Year 2022 |
| I. Cash flows from operating activities: | ||
| Cash received from sales of goods or rendering of services | 6,003,439,999.19 | 5,467,926,309.59 |
| Net increase in deposits from customers and placements from banks and other financial institutions | ||
| Net increase in borrowings from the central bank | ||
| Net increase in placements from other financial institutions | ||
| Cash received for receiving premium of original insurance contract | ||
| Net cash received from reinsurance business | ||
| Net increase in deposits of the insured and investment | ||
| Cash received from interest, handling charges and commission | ||
| Net increase in placements from banks and other financial institutions | ||
| Net increase in capital for repurchase | ||
| Net cash received from securities trading agency services | ||
| Taxes and surcharges refunds | 5,676,415.09 | 7,916,977.36 |
| Other cash received relating to operating activities | 216,259,114.85 | 125,714,050.84 |
| Subtotal of cash inflows from operating activities | 6,225,375,529.13 | 5,601,557,337.79 |
| Cash paid for goods and services | 1,978,567,576.35 | 1,758,255,060.24 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits in the central bank and other financial institutions | ||
| Cash paid for claim settlements on original insurance contract | ||
| Net increase in placements from banks and other financial institutions | ||
| Cash paid for interest, handling charges and commission | ||
| Cash paid for policy dividends | ||
| Cash paid to and for employees | 740,845,898.06 | 569,184,049.01 |
| Payments of taxes and surcharges | 658,105,645.74 | 624,631,630.31 |
| Other cash paid relating to operating activities | 2,237,417,645.27 | 1,880,040,976.78 |
| Subtotal of cash outflows from operating activities | 5,614,936,765.42 | 4,832,111,716.34 |
| Net cash flow from operating activities | 610,438,763.71 | 769,445,621.45 |
| II. Cash flows from investing activities: | ||
| Cash received from the return of investment | 5,094,117,111.10 | 7,062,819,000.00 |
| Cash received from investment incomes | 58,746,501.98 | 80,713,933.03 |
| Net cash received from the disposal of fixed assets, intangible assets, and other long-term assets | 2,887,206.81 | 10,800.00 |
| Net cash received from the disposal of subsidiaries and other business entities | ||
| Other cash received relating to investing activities | ||
| Subtotal of cash inflows from investing activities | 5,155,750,819.89 | 7,143,543,733.03 |
| Cash paid to acquire fixed assets, intangible assets and other long- term assets | 274,275,480.81 | 353,420,863.88 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Cash paid to acquired investments
| Cash paid to acquired investments | 4,906,031,833.00 | 6,801,133,771.10 |
| Net increase in pledge loans | ||
| Net cash paid for acquisition of subsidiaries and other business entities | 493,498,507.88 | 7,474,528.53 |
| Other cash paid relating to investment activities | ||
| Subtotal of cash outflows from investing activities | 5,673,805,821.69 | 7,162,029,163.51 |
| Net cash flows from investing activities | -518,055,001.80 | -18,485,430.48 |
| III. Cash flows from financing activities: | ||
| Cash received from absorbing investments | 7,500,000.00 | |
| Including: Cash received by subsidiaries from minority shareholders'investments | 7,500,000.00 | |
| Cash received from borrowings | 105,450,000.00 | |
| Cash received relating to other financing activities | ||
| Subtotal of cash inflows from financing activities | 112,950,000.00 | |
| Cash paid for repayment of debts | 24,200,646.79 | |
| Cash paid for distribution of dividends, profits or interest repayment | 343,438,443.48 | 254,944,000.00 |
| Including: cash payments for dividends or profit to minority shareholders of subsidiaries | 4,298,573.21 | 784,000.00 |
| Other cash paid relating to financing activities | 203,780,960.18 | 64,719,978.70 |
| Subtotal of cash outflows from financing activities | 571,420,050.45 | 319,663,978.70 |
| Net cash flows from financing activities | -458,470,050.45 | -319,663,978.70 |
| IV. Effects from the change of exchange rate on cash and cash equivalents | -724,669.10 | 25,733.12 |
| V. Net increase in cash and cash equivalents | -366,810,957.64 | 431,321,945.39 |
| Add: Opening balance of cash and cash equivalents | 2,440,692,701.42 | 2,009,370,756.03 |
| VI. Closing balance of cash and cash equivalents | 2,073,881,743.78 | 2,440,692,701.42 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2.6 Cash Flow Statement of the Parent Company
Unit: CNY
| Item | Year2023 | Year 2022 |
| I. Cash flows from operating activities: | ||
| Cash received from sales of goods or rendering of services | 3,967,161,453.01 | 3,771,499,492.71 |
| Taxes and surcharges refunds | 900,000.00 | |
| Other cash received relating to operating activities | 112,600,340.58 | 101,914,030.05 |
| Subtotal of cash inflows from operating activities | 4,080,661,793.59 | 3,873,413,522.76 |
| Cash paid for goods and services | 1,863,494,237.01 | 1,749,873,073.87 |
| Cash paid to and for employees | 80,286,172.61 | 74,864,145.97 |
| Payments of taxes and surcharges | 332,766,216.27 | 383,261,187.24 |
| Other cash paid relating to operating activities | 2,004,379,648.28 | 1,227,158,949.34 |
| Subtotal of cash outflows from operating activities | 4,280,926,274.17 | 3,435,157,356.42 |
| Net cash flow from operating activities | -200,264,480.58 | 438,256,166.34 |
| II. Cash flows from investing activities: | ||
| Cash received from the return of investment | 5,046,548,289.81 | 6,781,000,000.00 |
| Cash received from investment incomes | 55,660,713.59 | 78,571,771.63 |
| Net cash received from the disposal of fixed assets, intangible assets, and other long-term assets | 145,420.18 | 52,415.18 |
| Net cash received from the disposal of subsidiaries and other business entities | 820,000.00 | |
| Other cash received relating to investing activities | ||
| Subtotal of cash inflows from investing activities | 5,102,354,423.58 | 6,860,444,186.81 |
| Cash paid to acquire fixed assets, intangible assets and other long- term assets | 132,136,135.85 | 216,466,579.58 |
| Cash paid to acquired investments | 4,790,948,323.00 | 6,516,118,611.10 |
| Net cash paid for acquisition of subsidiaries and other business entities | ||
| Other cash paid relating to investment activities | ||
| Subtotal of cash outflows from investing activities | 4,923,084,458.85 | 6,732,585,190.68 |
| Net cash flows from investing activities | 179,269,964.73 | 127,858,996.13 |
| III. Cash flows from financing activities: | ||
| Cash received from absorbing investments | ||
| Cash received from borrowings | ||
| Cash received relating to other financing activities | ||
| Subtotal of cash inflows from financing activities | ||
| Cash paid for repayment of debts | ||
| Cash paid for distribution of dividends, profits or interest repayment | 338,880,000.00 | 254,160,000.00 |
| Other cash paid relating to financing activities | 127,872,029.14 | 27,040,846.56 |
| Subtotal of cash outflows from financing activities | 466,752,029.14 | 281,200,846.56 |
| Net cash flows from financing activities | -466,752,029.14 | -281,200,846.56 |
| IV. Effects from the change of exchange rate on cash and cash equivalents | 11.81 | 27,079.75 |
| V. Net increase in cash and cash equivalents | -487,746,533.18 | 284,941,395.66 |
| Add: Opening balance of cash and cash equivalents | 1,651,433,867.91 | 1,366,492,472.25 |
| VI. Closing balance of cash and cash equivalents | 1,163,687,334.73 | 1,651,433,867.91 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2.7 Consolidated Statement of Changes in Owner’s Equity
Amount for the current period
Unit: CNY
| Item | 2023 | ||||||||||||||
| Equity attributable to the owners of the parent company | Minority inter est | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: treasury shares | Other Comprehensive incomes | Special reserves | Surpl us reserve | General risk provision | Undistributed profit | Miscellaneous | Subtotal | |||||
| Prefer red shares | Perpetual bonds | Miscellaneous | |||||||||||||
| I. Ending balance of the previous year | 423,600,000.00 | 2,846,004,685.04 | -205.63 | 211,081,299.10 | 2,072,184,431.65 | 5,552,870,210.16 | 49,479,106.00 | 5,602,349,316.16 | |||||||
| Add: changes in accounting policies | |||||||||||||||
| Correction of prior period errors | |||||||||||||||
| Business merger under common control | |||||||||||||||
| Miscellaneous | |||||||||||||||
| II. Beginning balance of the current year | 423,600,000.00 | 2,846,004,685.04 | -205.63 | 211,081,299.10 | 2,072,184,431.65 | 5,552,870,210.16 | 49,479,106.00 | 5,602,349,316.16 | |||||||
| III. Amount of movements of current period (decrease to be listed with “-”) | 109,838,205.82 | 47,359.12 | 417,915,007.56 | 308,124,160.86 | 105,344,111.41 | 413,468,272.27 | |||||||||
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
(I) Totalcomprehensiveincomes
| (I) Total comprehensive incomes | 47,359.12 | 756,795,007.56 | 756,842,366.68 | 2,290,457.06 | 759,132,823.74 | ||||||||||
| (II) Capital invested and decreased by owners | 109,838,205.82 | -109,838,205.82 | -10,000,000.00 | -119,838,205.82 | |||||||||||
| 1.Ordinary share invested by owners | 109,838,205.82 | -109,838,205.82 | -10,000,000.00 | -119,838,205.82 | |||||||||||
| 2. Capital contributed by the holders of other equity instruments | |||||||||||||||
| 3. Amount of share- based payments recognized as owners ’ equity | |||||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -338,880,000.00 | -338,880,000.00 | -3,131,005.01 | -342,011,005.01 | |||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Appropriation to provision for general risk |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
3.Distributionto owners(orshareholders)
| 3. Distribution to owners (or shareholders) | -338,880,000.00 | -338,880,000.00 | -3,131,005.01 | -342,011,005.01 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carryover of owners ’ equity | |||||||||||||||
| 1. Capital reserve transferred to capital (or share capital) | |||||||||||||||
| 2. Surplus reserves transferred to capital (or share capital) | |||||||||||||||
| 3. Recovery of losses by surplus reserves | |||||||||||||||
| 4. Retained earnings carried forward from changes In defined benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive income |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
6.Miscellaneous
| 6. Miscellaneous | |||||||||||||||
| (V) Special reserves | |||||||||||||||
| 1. Appropriation in the current period | |||||||||||||||
| 2. Use for current period | |||||||||||||||
| (VI) Others | 116,184,659.36 | 116,184,659.36 | |||||||||||||
| IV. Ending balance of the current period | 423,600,000.00 | 2,846,004,685.04 | 109,838,205.82 | 47,153.49 | 211,081,299.10 | 2,490,099,439.21 | 5,860,994,371.02 | 154,823,217.41 | 6,015,817,588.43 |
Amount in the previous period
Unit: CNY
| Item | Year 2022 | ||||||||||||||
| Equity attributable to the owners of the parent company | Minority inter est | Tota l owners' equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: treas ury shares | Other comprehensive incomes | Special reserves | Surplus reserve | General risk provision | Undistributed profit | Miscellaneous | Sub total | |||||
| Preferred shares | Perpetual bonds | Miscellaneous | |||||||||||||
| I. Ending balance of the previous year | 423,600,000.00 | 2,846,004,685.04 | 1.98 | 155,621,249.77 | 1,329,978,260.55 | 4,755,204,197.34 | 23,262,377.92 | 4,778,466,575.26 | |||||||
| Add: changes in accounting policies | 494,270.86 | 494,270.86 | -36,377.60 | 457,893.26 | |||||||||||
| Correction of prior period errors | |||||||||||||||
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Businessmergerundercommoncontrol
| Business merger under common control | |||||||||||||||
| Miscellaneous | |||||||||||||||
| II. Beginning Balance of the current year | 423,600,000.00 | 2,846,004,685.04 | 1.98 | 155,621,249.77 | 1,330,472,531.41 | 4,755,698,468.20 | 23,226,000.32 | 4,778,924,468.52 | |||||||
| III. Amount of movements of current period (decrease to be listed with “-”) | -207.61 | 55,460,049.33 | 741,711,900.24 | 797,171,741.96 | 26,253,105.68 | 823,424,847.64 | |||||||||
| (I) Total compreh ensive incomes | -207.61 | 1,051,331,949.57 | 1,051,331,741.96 | -799,814.46 | 1,050,531,927.50 | ||||||||||
| (II) Capital invested and decreased by owners | 29,008,793.38 | 29,008,793.38 | |||||||||||||
| 1. Ordinary share invested by owners | 29,008,793.38 | 29,008,793.38 | |||||||||||||
| 2. Capital contributed by the holders of other equity instruments |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
3.Amount ofshare-basedpaymentsrecognizedas owners ’equity
| 3. Amount of share-based payments recognized as owners ’ equity | |||||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | 55,460,049.33 | -309,620,049.33 | -254,160,000.00 | -1,955,873.24 | -256,115,873.24 | ||||||||||
| 1.Withdrawal of surplus reserves | 55,460,049.33 | -309,620,049.33 | |||||||||||||
| 2. Appropriation to provision for general risk | |||||||||||||||
| 3. Distribution to owners (or sharehol ders) | -254,160,000.00 | -254,160,000.00 | -1,955,873.24 | -256,115,873.24 | |||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal carryover of owners ’ equity | |||||||||||||||
| 1. Capital reserve transferred to capital (or share capital) | |||||||||||||||
| 2. Surplus reserves transferred to capital (or share capital) |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
3.Recoveryof losses bysurplusreserves
| 3. Recovery of losses by surplus reserves | |||||||||||||||
| 4.Retained earnings carried forward from changes in defined benefit plans | |||||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | |||||||||||||||
| 6. Miscellaneous | |||||||||||||||
| (V) Special reserves | |||||||||||||||
| 1. Appropriation in the current period | |||||||||||||||
| 2. Use for current period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Ending balance of the current period | 423,600,000.00 | 2,846,004,685.04 | -205.63 | 211,081,299.10 | 2,072,184,431.65 | 5,552,870,210.16 | 49,479,106.00 | 5,602,349,316.16 |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2.8 Statement of Changes in Owner’s Equity of Parent Company
Amount for the current period
Unit: CNY
| Item | 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserve s | Less: treasury shares | Other comprehensive income | Special reserve s | Surplus reserve | Undistributed profit | Miscellaneous | Total owner s' equity | |||
| Preferred shares | Perpetual bonds | Miscellaneous | ||||||||||
| es | ||||||||||||
| I. Ending balance of the previous year | 423,600,000.00 | 2,845,993,326.27 | 211,800,000.00 | 1,671,467,081.83 | 5,152,860,408.10 | |||||||
| Add: changes in accounting policies | ||||||||||||
| Correction of prior period errors | ||||||||||||
| Miscellaneous | ||||||||||||
| II. Beginnin g balance of the current year | 423,600,000.00 | 2,845,993,326.27 | 211,800,000.00 | 1,671,467,081.83 | 5,152,860,408.10 | |||||||
| III. Amount of movements of current period (decrease to be listed with “-”) | 109,838,205.82 | 316,714,806.58 | 206,876,600.76 | |||||||||
| (I) Total comprehensive incomes | 655,594,806.58 | 655,594,806.58 | ||||||||||
| (II) Capital invested and decrease d by owners | 109,838,205.82 | -109,838,205.82 | ||||||||||
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
1.Ordinaryshareinvested byowners
| 1. Ordinary share invested by owners | 109,838,205.82 | -109,838,205.82 | ||||||||||
| 2. Capital contributed by the holders of other equity instruments | ||||||||||||
| 3. Amount of share- based payment s recognized as owners ’ equity | ||||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -338,880,000.00 | -338,880,000.00 | ||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution to owners (or shareholders) | -338,880,000.00 | -338,880,000.00 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carryover of owners ’ equity | ||||||||||||
| 1. Capital reserve transferred to capital (or share capital) |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
2.SurplusReservestransferredto capital(or sharecapital)
| 2. Surplus Reserves transferred to capital (or share capital) | ||||||||||||
| 3. Recover y of losses by surplus reserves | ||||||||||||
| 4. Retained earnings carried forward from changes In defined benefit plans | ||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | ||||||||||||
| 6. Miscellaneous | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Appropriation in the current period | ||||||||||||
| 2. Use for current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of the current period | 423,600,000.00 | 2,845,993,326.27 | 109,838,205.82 | 211,800,000.00 | 1,988,181,888.41 | 5,359,737,008.86 |
Amount in the previous period
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
Unit: CNY
| Item | Year 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserve s | Less: treasury shares | Other comprehensive incomes | Specia l reserve s | Surplus reserve | Undistributed profit | Miscellaneous | Total owners' equity | |||
| Prefer red shares | Perpetual bonds | Miscellaneous | ||||||||||
| I. Ending balance of the previous year | 423,600,000.00 | 2,845,993,326.27 | 156,339,950.67 | 1,014,839,556.06 | 4,440,772,833.00 | |||||||
| Add: changes in accounting policies | 418,665.65 | 418,665.65 | ||||||||||
| Correction of prior period errors | ||||||||||||
| Miscellaneous | ||||||||||||
| II. Beginnin g balance of the current year | 423,600,000.00 | 2,845,993,326.27 | 156,339,950.67 | 1,015,258,221.71 | 4,441,191,498.65 | |||||||
| III. Amount of movements of current period (decrease to be listed with “-”) | 55,460,049.33 | 656,208,860.12 | 711,668,909.45 | |||||||||
| (I) Total comprehensive incomes | 965,828,909.45 | 965,828,909.45 | ||||||||||
| (II) Capital invested and decrease d by owners | ||||||||||||
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
1.Ordinaryshareinvestedbyowners
| 1. Ordinary share invested by owners | ||||||||||||
| 2. Capital contributed by the holders of other equity instruments | ||||||||||||
| 3. Amount of share- based payment s recognized as owners ’ equity | ||||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | 55,460,049.33 | -309,620,049.33 | -254,160,000.00 | |||||||||
| 1. Withdrawal of surplus reserves | 55,460,049.33 | -55,460,049.33 | ||||||||||
| 2. Distribution to owners (or shareholders) | -254,160,000.00 | -254,160,000.00 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal carryover of owners ’ equity |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
1.Capitalreservetransferredto capital (orsharecapital)
| 1. Capital reserve transferred to capital (or share capital) | ||||||||||||
| 2. Surplus reserves transferred to capital (or share capital) | ||||||||||||
| 3. Recovery of losses by surplus reserves | ||||||||||||
| 4. Retained earnings carried forward from changes in defined benefit plans | ||||||||||||
| 5. Retained earnings carried forward from other comprehensive income | ||||||||||||
| 6. Miscellaneous | ||||||||||||
| (V) Special reserves | ||||||||||||
| 1. Appropriation in the current period |
Full Text of Annual Report 2022 of Yunnan Botanee Bio-Technology Group Co., Ltd.
| 2. Use for current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Ending balance of the current period | 423,600,000.00 | 2,845,993,326.27 | 211,800,000.00 | 1,671,467,081.83 | 5,152,860,408.10 |
Legal representative: Guo Zhenyu CFO: Wang Long Head of Accounting Department: Liu Zhaofeng
3. Company Profile
1. History of the Company
Yunnan Botanee Bio-Technology Group Co., Ltd. (hereinafter referred to as "Company" or "the Company") is ajoint stocklimited company derived from Kunming Botanee Bio-Technology Co., Ltd. on an integral basis.Kunming Botanee Bio-Technology Co., Ltd. (hereinafter referred to as “the company limited”) was jointly funded by DAIKAIHUANG, DENG XIAOLING, and MA RUYU on May 13, 2010, with a registered capital of CNY500,000, of which, DAIKAIHUANG contributed CNY 225,000, accounting for 45% of the registered capital; DENG XIAOLING contributed CNY225,000,accounting for 45% of the registered capital; and MARUYU contributed CNY 50,000, accounting for 10% of the registered capital.The registered capital has been verified by the Capital Verification Report (YRZYZ [2010] No. A5053) issued by Yunnan RuizhongCertified Public Accountants (Special General Partnership).On March 7, 2019, the company limited was changed into a joint stock limited company on an integral basis with net assets ofCNY 385,696,551.32 as of November 30, 2018, as the base, which is equivalent to CNY360,000,000 of share capital calculated at theratio of CNY 1.0714:1. The share capital has been verified by the Capital Verification Report (THYZ [2019] No. 00030) issued byTalent Certified Public Accountants (Special General Partnership).
The Company publicly issued 63,600,000 shares of CNY ordinary shares with a par value of CNY1.00 to the public on February25, 2021, as approved by the Reply of the China Securities Regulatory Commission on Approving the Registration of the InitialPublic Offering of Yunnan Botanee Bio-Technology Group Co., Ltd. (ZJXK [2021] No. 546). Shenzhen Stock Exchangeissued the Announcement on the Listing and Trading of Stocks of Yunnan Botanee Bio-Technology Group Co., Ltd. on the ChiNextMarket on March 23, 2021, and the Company’s CNY ordinary shares were listed on the ChiNext Market of Shenzhen StockExchange on March 25, 2021. with the stock abbreviation of “Botanee” and the stock code of 300957.
2. Industry Nature and Business Scope of the Company
Industry nature: daily chemical industry;
Business scope: The company and its subsidiaries are mainly engaged in the research and development, production and sales ofcosmetics.
3. Registered Address and Unified Social Credit Code
Unified social credit code: 915301005551100783. .
The Company’s registered office and headquarters: No. 53, Keyi Road, High-tech Industrial Development Zone, Kunming City,
Yunnan Province
The financial statements and notes to the financial statements have been approved by the Sixth Meeting of the Second Board ofDirectors of the Company on April 24, 2024.
4. Basis of Preparation for Financial Statements
4.1 Basis of preparation
On the basis of a going concern, the Company recognizes and measures the actual transactions and events according to theAccounting Standards for Enterprises—Basic Standards issued by the Ministry of Finance, specific accounting standards, applicationguidelines, interpretations, and other provisions and prepares financial statements on this basis.
4.2 Going concern
The Board of Directors of the Company believes that the Company has sufficient working capital to continue as a going concernin the foreseeable future period of not less than 12 months after the approval of the financial statements. Accordingly, the Board ofDirectors of the Company continues to prepare the Company's financial statements 2023 for the year ended December 31, 2023, on agoing concern basis.
5. Significant Accounting Policies and Accounting Estimates
According to the actual production and operation characteristics and in accordance with the relevant provisions of the ASBE, theCompany has formulated many specific accounting policies and accounting estimates for transactions and matters such as revenuerecognition and determination as detailed in “5.37 Revenue” under “Important Accounting Policies and Accounting Estimates”ofSection X herein.
5.1 Statement of Compliance with Accounting Standards for Business Enterprises
The financial statements prepared by the Company meet the requirements of ASBE and truly and fully reflect the financialposition and such relevant information as business performance and cash flow of the Company.
5.2 Accounting Period
The Company’s accounting year starts on January 1 and ends on December 31.
5.3 Business Cycle
For the purpose of the Company a business cycle is 12 months and it is regarded as classification criterion for the liquidity ofassets and liabilities.
5.4 Functional Currency
The functional currency is Chinese CNY (CNY).
5.5 Significance Determination Method and Basis of Selection
? Applicable □ N/A
| Item | Significance standard |
| Important prepayments aged more than 1 year | Prepaid accounts with a single aging of more than 1 year account for 10% of the total prepaid accounts and the amount exceeds CNY10 million. |
| Important projects under construction | The budget of a single project exceeds CNY100 million. |
| Important contract liabilities aged more than 1 year | Contract liabilities with a single aging of more than 1 year account for 10% of the total contract liabilities and the amount exceeds CNY10 million. |
| Important accounts payable aged more than 1 year | Accounts payable with a single aging of more than 1 year account for 10% of the total accounts payable and the amount exceeds CNY30 million. |
| Important other payables aged more than 1 year | Other payables with a single aging of more than 1 year account for 10% of the total other payables and the amount exceeds CNY30 million. |
| Significant capitalized R&D projects | The ending balance of a single project accounts for more than 10% of the ending balance of development expenditure and the amount is greater than CNY30 million. |
| Important non-wholly owned subsidiaries | The net assets of the subsidiary account for more than 5% of Botanee’s consolidated net assets, or the subsidiary's net profit accounts for more than 10% of its consolidated net profit. |
| Significant joint ventures and associates | The book value of a single project's long-term equity investment accounts for more than 5% of Botanee’s net assets, or the absolute value of investment profits and losses under the equity method of long-term equity investment accounts for more than 10% of its consolidated net profit. |
5.6 Accounting treatment method for business combination under common control and different control
5.6.1 Business Merger Under Common Control
If the parties involved in combination are under the final control of one or several same parties before and after the combination,and such control is not temporary, and the combination is the business combination under common control. Assets and liabilitiesreceived by the merging party from a business merger shall be subject to relevant accounting treatment based on the book value ofsuch assets and liabilities (including the goodwill formed from the acquisition of the merged party by the ultimate controlling party) ofthe merged party in the consolidated financial statements of the ultimate controlling party. The balance between the net book value ofassets acquired by the merging party and book value of the paid merging consideration (or total face value of issued shares) shall beused to adjust the capital surplus (stock premium); where capital surplus (stock premium) cannot be charged off, retained earningsshall be adjusted. The combination date refers to the date on which the merging party actually obtains control rights on the combinedparty.
For business merger under different control realized step-by-step through multiple transactions, the long-term equity investmentheld before the acquisition of the combined party’s control by the combining party and the profit or loss, other comprehensive incomesand changes in other owners’ equities that have been recognized during the period from the date of acquisition of the original equity,or the date of common control of the combining party and the combined entity (which is later) to the combination date shall offsetagainst the retained opening earnings or current profit or loss respectively during the period of comparative statement.
5.6.2 Business Combination Not Under Common Control
All parties merger not under common control is a business merger in which the merging companies are not ultimately controlledby the same party or the same parties both before and after the business merger. The merger cost paid by the acquirer is the sum of thefair value of the assets paid, liabilities incurred or borne, and equity securities issued on the acquisition date for obtaining the controlright of the acquiree. The difference between the fair value and its carrying amount of assets paid is included in the current profit orloss. Acquisition date refers to the date on which the acquirer actually obtains control rights on the acquiree.
On the acquisition date,the acquirer distributes the combination cost and recognizes the fair value of identifiable assets, liabilitiesand contingent liabilities acquired from the Acquiree during business merger. If the combination cost is higher than the fair value ofidentifiable net asset obtained from the acquiree by the Company, the difference can be recognized as goodwill; if the combinationcost is lower than the fair value of identifiable net asset obtained from the acquiree by the Company, the difference, afterreexamination, can be included in current profit or loss.
Under the circumstance that the business merger is realized under different control through multiple transactions step by step, theequity of the acquiree obtained before the acquisition date shall be recalculated as per the fair value of the equity on the acquisitiondate, with the balance between the fair value and its book value included into the current investment profits; if the equity of theacquiree held before the acquisition date involves other comprehensive income and other change of the shareholders' equity, therelevant other comprehensive incomes and other change of the shareholders' equity are transferred into the current investment incomeof the acquisition date. Other comprehensive benefits arising from the re-measurement of the net liabilities or net assets of thebeneficiary plan by the investor are excluded.
5.7 Judgment Criteria for Control Preparation Methods of Consolidated Financial Statements
The scope of consolidation of consolidated financial statements is determined on the basis of control and includes the Companyand its subsidiaries (referring to the entities controlled by the Company, including the separable parts of the enterprises and investeesand the structured entities controlled by the enterprises). The operating results and financial positions of subsidiaries are included inthe consolidated financial statements from the start date of control to the end date of control.
For subsidiaries acquired through business mergers under the common control of the Company, during the preparation ofconsolidated current financial statements, it shall be deemed that the consolidated subsidiaries are included in the scope ofconsolidation when the ultimate controlling party of the Company exercises control over them and the opening balance of theconsolidated financial statements and the comparative statements in the previous period shall be adjusted accordingly.
For subsidiaries acquired by the Company through business mergers under different control, during the preparation of theconsolidated current financial statements, the financial statements of the subsidiaries are adjusted based on the fair value of allidentifiable assets and liabilities recognized on the acquisition date and the consolidated subsidiaries are included in the scope ofconsolidation on the acquisition date.
When the accounting period or accounting policy adopted by the subsidiaries is inconsistent with that of the Company, theCompany has made necessary adjustments to the financial statements of the subsidiaries in accordance with the Company's accountingperiod or accounting policies during the preparation of the financial statements. All significant transactions, balances, and unrealizedprofits and losses between enterprises within the scope of consolidation are offset during the preparation of consolidated financialstatements. For the unrealized loss incurred in the internal transactions, if there is evidence indicating that such loss is an impairmentloss of the underlying asset, such loss shall not be offset.
The equity and profit and loss attributable to minority shareholders of subsidiaries are separately listed in the shareholders'equityof the consolidated balance sheet and the net profit in the consolidated income statement.
If the share of current losses of minority shareholders in a subsidiary exceeds their share of shareholder's equity in that subsidiaryat the beginning of the period, the difference shall be offset against the minority interest.
In the event the Company loses the right of control over its subsidiary due to disposal of partial equity investment or otherreasons, the residual equity must be recalculated according to its fair value on the day when the Company loses the right of control.The balance of the sum of consideration received from disposal of equity and the fair value of the residual equity less the share oforiginal net assets of the subsidiary calculated continuously based on the original shareholding proportion from the acquisition date
shall be included in the investment income of the period when losing the right of control and the goodwill shall be written down. Othercomprehensive income and changes in other shareholders' equity in connection with original equity investments of originalsubsidiaries shall be transferred into the investment income of the current period at the time of loss of control, except for thoseincurred because the investee remeasures the changes of net liabilities or net assets in the defined benefit plan.
For the equity investment in subsidiaries disposed step by step through multiple transactions till losing the right of control, it isnecessary to consider whether the transactions constitute a package deal. When the terms, conditions and economic impacts of thetransactions for subsidiary equity investment disposal conform to one or more following situations, then it indicates that thetransactions shall be subject to accounting treatment as part of the package deal: (1) the transactions are established simultaneously orat the consideration of mutual impact; (2) the transactions can constitute a complete commercial result only when operating as a whole;
(3) the occurrence of one transaction rests with that of another one or more; (4) individually, a single transaction is not economicalwhile, when combined with other transactions, it is economical.
If they do not belong to a package deal, each of the transactions shall be subject to accounting treatment as described above; forthe various transactions belong to the package deal for equity disposal by the Company that lead to the loss of controlling power overthe subsidiary, the transactions are subject to the accounting treatment oriented for subsidiary disposal and loss of controlling power;but, the difference between each disposal amount and the corresponding subsidiary net asset shares entitled to the disposal investmentis recognized as other comprehensive income in the consolidated financial statement, which is not transferred into the current profit orloss until the controlling power is lost.
5.8 Classification of Joint Operation Arrangement and Accounting Treatment Methods for Joint Operations
Joint arrangements can be classified into joint operations and joint ventures. Joint operation refers to a joint arrangement wherethe joint partner enjoys the relevant assets of such arrangement and assumes the relevant liabilities of such arrangement. Joint venturerefers to an arrangement that the joint venture party only has the power governing net assets of the arrangement.
The joint operation participant shall recognize the following items of it related to the interest share in the joint operation andconduct accounting treatment according to provisions of related ASBE: (1) assets solely held, and assets jointly owned as per theproportion; (2) liabilities solely held, and liabilities jointly owned as per the proportion; (3) income generated from sales of its share ofoutput of the joint operation; (4) income generated from sales of joint operation output as per the proportion; and (5) expenses incurredindependently, and expenses incurred from joint operation as per the proportion.
Where the Company invests assets (except that the assets form business) in or sells them to the joint operation, before the jointoperation sells the assets to a third party, only the portion of profit/loss arising from the transaction attributable to other participants ofthe joint operation shall be recognized. If the assets are invested or sold complying with the losses from asset impairment specified inthe Accounting Standards for Business Enterprises No. 8 – Impairment of Assets, the Company shall fully recognize the loss.
Where the Company buys assets (except that the assets form business) from the joint operation, before it sells the assets to a thirdparty, only the portion of profit/loss arising from the transaction attributable to other participants of the joint operation shall berecognized. If the assets are bought complying with the losses from asset impairment specified in the Accounting Standards forBusiness Enterprises No. 8 – Impairment of Assets, the Company shall recognize the loss based on its share.
For a participant of a joint operation but not sharing joint control, if it is entitled to the relevant assets of the joint operation andassumes the relevant liabilities of the joint operation, accounting treatment shall be conducted in accordance with aforesaid provisions.
5.9 Standards for Recognition of Cash and Cash Equivalents
Cash comprises cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents refer to the investmentheld by the Company having the features of short term, strong liquidity, easy to be converted into known amount of cash and smallrisk of variation in value.
5.10 Foreign currency transactions and translation of foreign currency financial statements
5.10.1 Accounting Treatment of Foreign Currency Transactions
For transaction in foreign currency, the foreign currency amount shall be translated into CNY amount based on the spot exchangerate on the transaction date.
The foreign currency monetary items on the balance sheet date are translated into CNY at the spot exchange rate on the same date;the translation difference is recognized as the current profits and losses, except those which should be capitalized as per the accounting
method for borrowing costs. Non-monetary items calculated by historical cost shall be translated on the balance sheet date as per spotexchange rate on the transaction date.
5.10.2 Translation of Foreign Currency Financial Statements
The asset and liability items of overseas operation in the balance sheet shall be translated as per the spot exchange rate of thebalance sheet date; the shareholders’ equity items, except for the items of “undistributed profit”, shall be translated at the spotexchange rate when incurred. The annual average exchange rate is used for the income and expense items in the income statement ofoverseas business. The difference arising from the above translation shall be separately listed in the shareholders’ equity.
5.11 Financial Instruments
A financial instrument refers to a contract that forms a financial asset of one party and a financial liability or equity instrument ofanother party.
5.11.1 Recognition and derecognition of financial instruments
When the Company becomes a party to a financial instrument contract, a financial asset or financial liability is recognized.
If a financial asset meets one of the following conditions, it shall be derecognized: (1) The contractual right to receive cash flowsfrom the financial asset terminates. (2) The right to collect cash flows from financial assets has been transferred, or the obligation topay the cash flows collected in full to a third party in a timely manner under a "pass-through agreement" has been transferred; andsubstantially all risks of ownership of financial assets have been transferred. and rewards, or relinquishes control of a financial assetwhile substantially neither transferring nor retaining substantially all the risks and rewards of ownership of the financial asset.
If the current obligation of a financial liability (or part thereof) has been discharged, the financial liability (or part thereof) shallbe derecognised.
For purchases or sales of financial assets in a regular manner, the company recognizes the assets to be received and the liabilitiesto be assumed on the transaction date, or derecognizes the sold assets on the transaction date.
5.11.2 Classification and measurement of financial assets
At the time of initial recognition of financial assets, according to the business mode of financial assets management and thecontract cash flow characteristics of financial assets, the Company classifies financial assets into: financial assets measured atamortized cost; financial assets at fair value through other comprehensive incomes; and financial assets at fair value through profit orloss.
1) Initial measurement of financial assets:
Financial assets are initially recognized at fair value. For financial assets at fair value through profit or loss, related transactionexpenses shall be directly included in the current profit or loss; the related transaction expenses of other financial assets shall beincluded in the initially recognized amount. For accounts receivable arising from the sale of products or the provision of labor services,which do not include or do not consider significant financing components, the Company makes initial measurement according to theconsideration expected to be entitled to receive.
2) Subsequent measurement for financial assets:
① Investment in debt instruments measured at amortized cost
The contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangements, that is, thecash flow generated on a specific date is only the payment of principal and interest based on the amount of outstanding principal andthe Company's business mode for managing the financial assets is to collect contractual cash flows. The Company classifies thefinancial assets into the financial assets measured at amortized cost. The financial assets shall be subsequently measured at amortizedcost by effective interest method, with profits or losses arising out from amortization, impairment or de-recognition included in thecurrent profits and losses.
② Debt instruments investment measured at fair value through other comprehensive income
The contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangements, that is, thecash flow generated on a specific date is only the payment of principal and interest based on the amount of outstanding principal andthe Company's business mode for managing the financial assets is both to collect contractual cash flows and sell the financial assets.
The Company classifies the financial assets into the financial assets that are measured at fair value and whose changes are included inother comprehensive income. The interest income, impairment loss, and exchange difference of the financial assets recognized by theeffective interest method are recognized as current profits and losses, and other changes in fair value are included in othercomprehensive income. At the derecognition, the accumulated gains or losses previously included in other comprehensive incomes aretransferred to the current profit or loss.
③ Equity instruments investment measured at fair value through other comprehensive incomeAt the initial recognition, some investments in non-trading equity instruments are designated by the Company as financial assetsat fair value through other comprehensive incomes. The Company includes the dividend income into the current profits and losses, andthe changes in fair value into other comprehensive incomes. When the financial assets are derecognized, the accumulated profits orlosses previously included in other comprehensive incomes will be transferred from other comprehensive income to the retainedearnings but not included in the current profit or loss.
④ Financial assets at fair value through profit or loss
Including financial assets measured at fair value and their changes included into current profits or losses, and financial assetsdesignated to be measured at fair value and their changes included into current profits or losses.The Company divides the financial assets not classified as calculating as per the amortized cost and fair value with changesincluded into other comprehensive income held by the Company into financial assets measured at the fair value with changes includedinto current profits and losses.At the time of initial recognition, in order to eliminate or significantly reduce accounting mismatch, the Company may designatesome financial assets as the financial assets measured at fair value with changes included in the current profits and losses.
5.11.3 Recognition basis and measurement method for transfer of financial assets
The Company derecognizes a financial asset if it transfers substantially all the risks and rewards of ownership of the financialasset to the transferee. If substantially all the risks and rewards of ownership of the financial asset is retained, the financial asset is notderecognized.
If the Company neither transfers nor retains almost all risks and rewards from the ownership of the financial assets, when thecontrol over the financial assets is not retained, the financial assets shall be derecognized, and the rights and obligations generated orretained in the transfer shall be separately recognized as assets or liabilities; when the control over the financial assets is retained, therelevant financial assets shall be recognized according to the extent of continuous involvement in the transferred financial assets, andthe relevant liabilities shall be recognized accordingly.
5.11.4 Classification and measurement of financial liabilities
Financial liabilities are classified, at the time of initial recognition, into financial liabilities at fair value through current profit orloss and other financial liabilities.
1) Initial measurement of financial liabilities
Financial liabilities are measured at fair value at initial recognition. For financial liabilities that are measured at fair value withtheir change recorded as losses or profits in the current period, related transaction expenses should be directly included into the currentloss and profit; the related transaction expenses of financial liabilities measured at amortized cost should be included into the initialrecognition amount.
2) Subsequent measurement for financial liabilities
① Financial liabilities at fair value through profit or loss
Including financial liabilities held for trading (including the derivative instruments which belong to financial liabilities) andfinancial liabilities designated as measured at fair value with changes recorded in current profit or loss at initial recognition.
Financial liabilities held for trading (including derivative instruments which belong to financial liabilities) are subsequentlymeasured according to the fair value. Except for those related to hedge accounting, changes in fair value are included in the currentprofit or loss.
For financial liabilities designated to be measured at fair value and whose changes are included in the current profits and lossesfor the period in which changes in fair value arising from changes in the Company's own credit risk are included in othercomprehensive income. Upon the derecognition thereof, the accumulated profit or loss previously included in other comprehensiveincome shall be transferred out from other comprehensive income and included in retained earnings. Other changes in fair value areincluded in the current profits and losses. If the aforesaid accounting treatment will cause or enlarge the accounting mismatch inprofits and losses, all profits or losses of the financial liabilities (including the impact amount of changes arising from the Company’sown credit risk) shall be included in the current profits and losses.
② Other financial liabilities
Other financial liabilities except for financial liabilities and financial guarantee contracts arising from non-conformance offinancial asset transfer to the derecognition conditions or continued involvement in the transferred financial assets are classified asfinancial liabilities measured at amortized cost and subsequently measured at amortized cost; gains or losses incurred by derecognitionor amortization are included in the current profits or losses.
5.11.5 Offset of financial assets and financial liabilities
The net amount of the financial assets and financial liabilities are presented in the balance sheet after being offset when thefollowing conditions are met at the same time: (1) has a legal right to offset the recognized amount and that such legal rights arecurrently enforceable; and (2) plans to settle in net amount or sell off financial assets and liquidate the financial liabilities at the sametime.
5.11.6 Method of determining fair value of financial instruments
For a financial instrument with active market, its fair value shall be recognized based on its quoted price in the active market. Fora financial instrument without active market, its fair value shall be recognized by adopting the estimation technique. During estimation,the Company shall adopt the valuation technique that is applicable in the current conditions and is supported sufficiently by availabledata and other information and shall select the input value with consistent characteristics of assets or liabilities considered in relevanttransactions of assets or liabilities with the market participants. The related observable input value is preferred as far as possible. Thenon-observable input value can be used only when it is impossible or not feasible to obtain a relevant observable input value.
5.11.7 Impairment of Financial Instruments (Excluding Receivables)
The Company makes the provision for impairment and recognizes the credit impairment loss for financial assets measured byamortized cost, liability instrument investment measured by fair value with changes included in other comprehensive income, andfinancial guarantee contracts based on expected credit loss.
For evaluation of the expected credit loss, the Company will consider all reasonable and reliable information, including forward-looking information.
The Company evaluates whether the credit risk of financial instruments has increased significantly since initial recognition oneach balance sheet date. If the default probability of a financial instrument within the expected duration recognized on the balancesheet date is significantly higher than the default probability within the expected duration recognized at the time of initial recognition,it indicates that the credit risk of the financial assets has increased significantly.
If the credit risk has not increased significantly since the initial recognition, it is in the first stage, and the Company measures theloss provision according to the amount of the expected credit loss in the next 12 months; if the credit risk has increased significantlysince the initial recognition, but no credit impairment has occurred, it is in the second stage, and the Company measures the lossprovision according to the amount equivalent to the expected credit loss over the whole duration; if credit impairment of financialinstruments occurs after the initial recognition, it is in the third stage, and the Company measures the loss provision based on expectedcredit losses over the whole duration.
For financial instruments with low credit risk on the balance sheet date, the Company assumes that the credit risk has notincreased significantly since the initial recognition, and measures the provision for loss according to the expected credit loss in the next12 months.
5.12 Notes receivable
For details, please refer to “5.13 Accounts Receivable” in 5. Important Accounting Policies and Accounting Estimates” under inSection X of this report.
5.13 Accounts receivable
Receivables of the Company mainly include notes receivable, accounts receivable, receivables financing and other receivables.
The Company takes receivables and lease receivables arising from the sale of products or the provision of services as expectedcredit losses within the entire duration when calculating the provision for credit losses.
For other receivables, the Company assesses at each balance sheet date whether the credit risk of a financial instrument hasincreased significantly since initial recognition. If the probability of default of a financial instrument during the estimated durationdetermined at the balance sheet date is significantly higher than that during the estimated duration determined at initial recognition, thecredit risk of the financial instrument has significantly increased.
If the credit risk has not increased significantly since initial recognition (first stage), the Company calculates the provision forcredit losses based on expected credit losses over the next 12 months; If the credit risk has increased significantly since initialrecognition but no credit impairment has occurred (second stage), the Company calculates the provision for credit losses based onexpected credit losses over the entire duration; If credit impairment has occurred since initial recognition of the receivables (third stage),the Company calculates the provision for credit losses based on expected credit losses over the entire duration.
For receivables with low credit risk at the balance sheet date, the Company calculates the provision for credit losses based onexpected credit losses over the next 12 months, assuming that their credit risks have not increased significantly since initial recognition.
Receivables whose credit risk is assessed separately include receivables from an associated party, receivables from a partyinvolved in a dispute, litigation or arbitration with the Company, and receivables where there are clear indications that the debtor islikely to be unable to meet the repayment obligations.
In addition to receivables whose credit risk is assessed separately, the Company divides receivables into several portfoliosaccording to the characteristics of their credit risks and evaluates overall credit risks based on these portfolios. These portfolios aredetermined as follows:
| Portfolio | Characteristics |
| Aging Portfolio | This portfolio is characterized by aging receivables. |
| Internal Transaction Portfolio | This portfolio is characterized by receivables from transactions between the mother company and its subsidiary included in consolidated financial statements. |
For receivables falling into the aging portfolio, the Company calculates the age of such receivables based on the period from thedate of their occurrence to the statement date. The Company refers to previous credit losses, considers the status quo and economicdevelopment forecast, prepares a comparison table between the age of the receivables and the expected credit loss rate over the entireduration and calculates expected credit losses.
The Company does not calculate the internal transaction portfolio into the provision for credit impairment.
5.14 Receivables Financing
For notes receivable and accounts receivable whose contractual cash flow characteristics are consistent with the basic lendingarrangements, and the Company's business mode for managing the financial assets is both to collect contractual cash flows and sell thefinancial assets, the Company classifies them as receivables financing that is measured at fair value and whose changes are included inother comprehensive income. The interest income, impairment loss, and exchange difference of the receivables financing recognizedby the effective interest method are recognized as current profits and losses, and other changes in fair value are included in othercomprehensive income. At the derecognition, the accumulated gains or losses previously included in other comprehensive incomes aretransferred to the current profit or loss.
5.15 Other Receivables
For details, please refer to “5.13 Accounts Receivable” in 5. Important Accounting Policies and Accounting Estimates” under inSection X of this report.
5.16 Contract Assets
5.16.1 Recognition methods and standards for the contractual assets
The Company presents the contract assets or contract liabilities in the balance sheet in accordance with the relationship betweenthe performance obligations and the payment by the customer. The consideration (excluding receivables) to which the Company hastransferred goods or provided services to customers and which it is entitled to receive is shown as a contractual asset.
5.16.2 Determination method and accounting method of expected credit loss of contractual assets
For contractual assets without material financing elements, the Company adopts a simplified model of expected credit loss wherethe loss provision is always measured at an amount equivalent to the expected credit loss over the entire duration, and the resultingincrease or reversal of the loss provision is recorded as the impairment loss or gain in the current profits and losses.
For contractual assets with material financing elements, the Company chooses to adopt a simplified model of expected credit losswhere the loss provision is always measured at an amount equivalent to the expected credit loss over the entire duration, and theresulting increase or reversal of the loss provision is recorded as the impairment loss or gain in the current profits and losses.
5.17 Inventories
(1) The inventories of the Company mainly include raw materials, turnover materials, products in process, self-made semi-finished products, finished products, etc.
(2) The raw materials and finished products are accounted for by the weighted average method when delivered.
(3) Basis for determining the inventory’s net realizable value and drawing methods for provision for decline in the value ofinventories:
Net realizable value is determined based on the estimated selling price less estimated costs to be incurred upon completion,estimated selling expenses and related taxes.
At the end of the reporting period, the provision for the decline in the value of inventories shall be drawn in accordance with thebalance of single item cost higher than net realizable value and are included in current profits and losses. If the influencing factors ofthe previous write-down of inventory value have disappeared, the write-down amount shall be restored and shall be reversed within theoriginal provision for the decline in the value of inventories. The reversed amount shall be included in the current profits and losses.For the inventories with high quantity and low unit price, inventory falling price reserves maybe withdrawn by inventory class.
(4) The Company adopts the perpetual inventory system for inventories.
(5) Turnover materials include low-priced consumables, packaging, etc. and they are amortized at requisition by the one-off write-off method.
5.18 Held-for-sale Assets
5.18.1 Held-for-sale
The Company recognizes the non-current assets or disposal groups meeting all the following conditions as the held-for-sale assets:
(1) Based on the practice of selling such assets or disposal groups in similar transactions, those can be sold immediately undercurrent conditions;
(2) Their sales are very likely to happen, that is, the Company has already made a resolution on a sales plan and obtained acertain purchase commitment and their sales are expected to be completed within one year. The relevant approval has been obtainedfrom relevant authorities of the Company or regulators for those available for sale as required by the relevant regulations.
When the non-current assets or disposal groups held for sale are measured initially or remeasured on the balance sheet date, if thecarrying amount is higher than the net amount obtained by deducting the selling expenses from the fair value, the carrying amountshallbe reduced to the net amount obtained by deducting the selling expenses from the fair value, and the write-down amount shall berecognized as the asset impairment losses and shall be included in the current profits or losses and the impairment provision of held-for-sale assets shall be made at the same time.
5.18.2 Discontinued Operation
Discontinued operation means a component that meets one of the following conditions and can be distinguished alone. Thecomponent has been disposed of or classified as “held for sale”:
①The component represents a separate principal business or a separate principal area of operation;
②The component is part of an associated plan to dispose of a separate principal business or a separate principal area ofoperation;
③The component is a subsidiary acquired specially for resale.
Where the disposal group that is to be out of use rather than sold meets the conditions of a component specified in the precedingparagraphs, it is included in discontinued operation from the date of being out of use; If a company loses its control over a subsidiarydue to the sale of its investment in the subsidiary, and the subsidiary meets the definition of discontinued operation, relevant profits andlosses incurred by discontinued operation are presented in the consolidated income statement.
For discontinued operation reported in the current period, the Company reports those data originally included in profits andlosses incurred by continued operation in the current financial statements as profits and losses incurred by discontinued operationduring the comparable accounting period.
5.19 Creditors’ Investment
□ Applicable ? N/A
5.20 Other creditors' Investment
□ Applicable ? N/A
5.21 Long-term Receivables
□ Applicable ? N/A
5.22 Long-term Equity Investment
5.22.1 Judgment standard for significant impact and joint control
1) The Company comprehensively considers whether it has a significant impact on the investee in combination with thefollowing circumstances: Whether representatives are designated to the Board of Directors or similar authorities of the investee;Whether to participate in the formulation of financial and operating policies of the investee; Whether there is any significanttransaction with the investee; Whether management personnel is assigned to the investee; and Whether the key technical data areprovided to the investee.
2) If the Company and other participants are bound by a joint arrangement, anyone participant cannot control the arrangementindependently, and anyone participant can prevent other participants or a combination of participants from controlling the arrangementindependently, the Company judges that it has joint control over the joint arrangement.
5.22.2 Determining of investment costs
The investment cost of long-term equity investments formed by business merger shall be recognized as per the followingmethods:
A. For the investment in subsidiaries formed by a business merger under joint control, the share of the book value of theshareholders’ equity of the merged party on the merger date in the consolidated financial statements of the ultimate controlling partyshall be recognized as the investment costs of long-term equity investment.
As to business mergers under joint control realized step by step, the initial investment cost of long-term equity investment shallbe recognized on the merger date based on the share of the book value of the merged party's net assets to be enjoyed after the mergerin the consolidated financial statements of the ultimate controlling party. The balance between the initial investment amount and thesum of the book value of long-term equity investments which has reached the amount before the merger and the book value of newpayment consideration obtained on the merger date shall be applied to adjust capital surplus (capital/share premium). If the capitalsurplus is insufficient to set it off, the retained earnings shall be written down. The equity investment held prior to the merger date andrecognized as other comprehensive income due to calculation by equity method or calculation as per recognition and measurementcriteria of financial instruments will not be subject to accounting treatment temporarily and will be subject to accounting treatment onthe same basis as that adopted by the investee for direct disposal of related assets or liabilities at the time of disposal. If it is recognizedas other changes in shareholders’ equity (excluding net profit/loss, other comprehensive income and profit distribution) in the netassets of the investee due to calculation by equity method, it will not be subject to accounting treatment temporarily and will betransferred to current profits and losses at the time of disposal. In which, if the residual equity after disposal is calculated by cost
method or equity method as per the standards, other comprehensive income and other shareholders’ equity shall be carried over inproportion, and if the disposed residual equity undergoes accounting treatment according to recognition and measurement guideline offinancial instruments, other comprehensive income and other shareholders' equity shall be fully carried over.
B. For the investment in subsidiaries formed by a business merger under different control, the business merger cost shall betaken as the investment cost.If the additional investment can control the investee not under joint control, the sum of the book value of the equity investment ofthe acquiree held before the acquisition date and the investment cost added on the acquisition date shall be recognized as the initialinvestment cost of the investment accounted for by the cost method. The equity investment held by the acquiree prior to the acquisitiondate recognized as other comprehensive income due to accounting by equity method shall be subject to accounting treatment on thesame basis as that adopted by the investee for direct disposal of related assets or liabilities at the time of disposal. Accountingtreatment of the equity investment held before the acquisition date shall be conducted in accordance with the Accounting Standards forBusiness Enterprises No. 22-Recognition and Measurement of Financial Instruments. Accumulated changes in fair value originallyincluded in other comprehensive income shall be transferred to retained earnings at the time of calculation by the cost method.
2) Except for the long-term equity investment acquired through the business merger, the investment cost of long-term equityinvestment acquired in other ways shall be determined in accordance with the following methods:
A. For long-term equity investment acquired by cash payment, the actual purchase price paid shall be regarded as investmentcost;
B. For the long-term equity investment obtained by issuing equity securities, the fair value of the issued equity securities shallbetaken as the investment cost;
3) Where the addition of investments confers upon the rights of common control over or significant influence on the investee butfails to confer rights constituting control over the investee, the sum of the fair value of the equity investment originally held,determined according to the Accounting Standards for Business Enterprises No. 22 – Recognition and Measurement of FinancialInstruments and the cost of the subsequent investments, shall be regarded as the initial investment cost, which shall be accounted forusing the equity method. If the originally held long-term equity investment is classified as other equity instrument investments, thebalance between the fair value and the book value, as well as accumulated changes in fair value originally included in othercomprehensive incomes shall be transferred to the retained earnings calculated by the equity method.
5.22. Subsequent measurement and recognition of profit or loss
1) Investment in subsidiaries
In the consolidated financial statements, investments in subsidiaries are treated in accordance with “5.6 Accounting treatmentmethods for business combinations under the same control and those not under the same control” in “5. Important Accounting Policiesand Accounting Estimates” under Section X of this report.
In the consolidated financial statements, the investment in subsidiaries shall be treated according to Note V "6. PreparationMethods of Consolidated Financial Statements" in Section X of this report.
In the financial statements of the parent company, the investment in subsidiaries is accounted for by using the cost method, andthe investment income is recognized when the investee declares the distributed cash dividends or profits.
2) Investment in joint ventures and associated ventures
The equity method is adopted for accounting of investment in joint ventures and associated ventures, and the specific accountingtreatment includes:
When the initial investment cost of a long-term equity investment exceeds the Group’s share of the fair value of the investee’sidentifiable net assets at the time of acquisition, the difference shall be included in the long-term equity investment cost; when theinitial investment cost is less than the Company’s interest in the fair values of the investee’s identifiable net assets at the acquisitiondate, the difference shall be credited to profit or loss for the period, and the cost of the long-term equity investment shall be adjustedaccordingly.
After obtaining the investments in joint ventures and associated enterprises, the Company recognizes the profit and loss oninvestments and other comprehensive incomes respectively according to its share of net profits or losses and other comprehensiveincomes of the investee to be enjoyed or shared, and meanwhile adjusts the book value of long-term equity investments; the part of dueshare is calculated according to the distributed cash dividend or profit declared by the investee, and the book value of the long- termequity investment is decreased accordingly.When calculating the share of net profits and losses realized by the investee that shall be enjoyed or shared, the fair value of theinvestee’s identifiable net assets when the investment is obtained is taken as the basis. Where there are any inconsistencies between theaccounting policies or accounting period adopted by the investee and the Company, the financial statement of the investee shall beadjusted as necessary according to the accounting policy and accounting period of the Company during accounting by the equitymethod. Unrealized profits and losses arising from intra-company transactions with joint ventures and associates are offset by theportion attributable to the Company as per the shareholding ratio when calculated by equity method. For the unrealized loss incurred inthe internal transactions, if there is evidence indicating that such loss is an impairment loss of the underlying asset, such loss isrecognized as loss in full amount.The Company recognizes the net losses of associated enterprises only to the point where the book value of the long-term equityinvestments and other long-term equities which substantially form the net investment in the investees are reduced to zero, unless theCompany has an obligation to bear extra losses. When the investees realize net profits later, the Company will recover the sharingamount of recognized profits after the sharing amount offsets the non-recognized sharing losses.For other changes of the shareholders’ equity except net profit or loss of interested entities, other comprehensive income andprofit distribution in investee, the book value of long-term equity investment shall be adjusted and included in capital reserve. Upondisposal of the investment, the part originally included in the capital reserve shall be transferred to current profits and losses incorresponding proportion.
(4) For the disposal of long-term equity investment, the difference between the carrying value and the actual purchase price isincluded in the current profits or losses. Long-term equity investments that are recognized using the equity method are disposed of onthe same basis as the investee's direct disposal of the related assets or liabilities, and the portion originally included in othercomprehensive income will be accounted for in a corresponding proportion.
Where the Company loses common control over or significant influence on the investee due to partial disposal of its equityinvestment, the equity remaining after disposal shall be treated according to the Accounting Standards for Business Enterprises No. 22– Recognition and Measurement of Financial Instruments, and the difference between fair and book values at the date of loss ofcommon control or significant influence shall be recorded in the profit and loss for the current period. Other comprehensive incomerelated to the original equity investment and recognized based on the equity method, shall be subject to treatment on the sameaccounting basis applied by the investee to directly disposals of relevant assets or liabilities, and usage of the equity methoddiscontinued.
When the control of the Company over the investee is lost due to disposal of partial equity investment etc., if the residual equityafter disposal could exert joint control or significant influence over the investee during the preparation of individual financialstatements, the equity method shall be adopted for the accounting, and adjustment shall be made on this partial equity deemed thatequity method has been used for accounting since the acquisition. If the remaining equity after disposal cannot exert joint control overor significant impact on the investee, the accounting treatment shall be conducted according to the relevant provisions of theAccounting Standard for Business Enterprises No. 22 — Recognition and Measurement of Financial Instruments, and the differencebetween the fair value and the book value on the date of losing the right of control shall be included in the current profits and losses.
5.23 Investment real estates
Measurement model of investment properties: measurement with cost method
Depreciation or amortization method: The Company makes a subsequent measurement of the investment properties with the costmodel and makes provision for depreciation or amortization by the straight-line method after deducting the estimated net residual valuefrom the service life of the investment properties.
Category
| Category | Service life (year) | Estimated net residual value ratio | Annual depreciation (amortization) rate |
| Buildings and structures | 20 | 5% | 4.75% |
5.24 Fixed assets
5.24.1 Recognition conditions
Fixed assets refer to the tangible assets whose service life is more than an accounting year and which are held for goodsproduction, labor service rendering, renting or operating management.
5.24.2 Depreciation method
| Type | Depreciation method | Depreciation period | Residual value rate | Annual depreciation rate |
| Buildings and structures | Straight-line method | 20-50 years | 5% | 1.90%-4.75% |
| Electronic equipment | Straight-line method | 3-5 years | 5% | 19.00%-31.67% |
| Machinery and equipment | Straight-line method | 3-5 years | 5% | 19.00%-31.67% |
| Transportation equipment | Straight-line method | 3-5 years | 5% | 19.00%-31.67% |
| Office equipment | Straight-line method | 3-5 years | 5% | 19.00%-31.67% |
At least at the end of every year, the Company shall recheck the expected service life, expected net salvage value anddepreciation methods of the fixed assets.
5.25 Projects under Construction
When the construction in progress is ready for its intended use, it shall be transferred to the fixed assets, intangible assets, andlong-term unamortized expenses accounting according to all the actual expenditures incurred.
When a project under construction reaches the predetermined usable state, the total expenses actually incurred are included infixed assets, intangible assets and long-term unamortized expenses for audit.
Standards and time for the transition of different types of projects under construction to fixed assets are as follows:
For products or by-products that are produced before reaching the predetermined usable state and sold, incomes and costs relatedto trial sales are included in accounting in accordance with the Accounting Standards for Business Enterprises No. 14-Income and theAccounting Standards for Business Enterprises No. 1-Inventory and included in profits and losses for the current period.
5.26 Borrowing Costs
(1) Borrowing costs include borrowing interests, amortization of discount or premium, auxiliary expenses and balance ofexchange incurred from foreign currency loans. The borrowing costs, which can be assigned to acquisition and construction or
| Type | Transition Standards and Time |
| Houses and Buildings | (1) Physical construction, including installation, has been completed or substantially completed; (2) The expenses on the house or building purchased or constructed are small or almost no longer occur; (3) The house or building purchased or constructed has met the design or contract requirements, or basically complies with the design or contract requirements; (4) The construction project has reached the predetermined usable state but has not yet completed the final settlement of account. From the date when such a project reaches the predetermined usable state, it is included in fixed assets at a value estimated according to the actual construction costs. |
| Machinery and Equipment | (1) Relevant equipment and other supporting facilities have been installed; (2) The equipment can maintain normal and stable operation for a certain period after debugging; (3) The equipment can produce qualified products stably for a certain period; (4) The equipment has passed the check for acceptance by the asset manager and user. |
production of assets in compliance with capitalization conditions, shall be capitalized and included in related asset cost, while otherborrowing costs shall be included in the current profits and losses.
(2) When the expenditures and borrowing costs of the assets are incurred and the activities relating to the acquisition,construction, or production of the assets that are necessary to prepare the assets for their intended use or sale have commenced, theCompany shall begin the capitalization of borrowing costs. Where the acquisition and construction or production of the asset eligiblefor capitalization is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of theborrowing costs shall be suspended. When the acquisition, construction, or production of assets is ready for its intended use or sale,the capitalization of borrowing costs shall cease and the borrowing costs incurred thereafter shall be included in the current profitsand losses.
(3) Calculation method for the capitalization amount of borrowing costs
1) The capitalization amount of the borrowing costs incurred from special borrowings for the acquisition, construction, orproduction of assets that meet the capitalization conditions (including the borrowing interest, amortization of discount or premium,auxiliary expenses, exchange difference between the principal and interest of special foreign currency borrowings) shall be the amountof borrowing costs actually incurred from special borrowings during the capitalization period, net of the interest income fromdepositing the not-yet-used borrowed funds in the bank or the investment income acquired from temporary investment of the not-yet-used borrowed funds.
2) The capitalization amount of the borrowing costs (including the borrowing interest, amortization of discount, or premium)incurred from general borrowings for the acquisition, construction, or production of assets that meet the capitalization conditions shallbe calculated and determined by multiplying the weighted average of the asset expenditures from the accumulated asset expendituresexceeding the special borrowings during the capitalization period by the capitalization rate of general borrowings occupied.
5.27 Biological assets
□ Applicable ? N/A
5.28 Oil and gas assets
□ Applicable ? N/A
5.29 Intangible assets
(1) Intangible assets are initially measured according to the cost upon acquisition.
(2) Amortization of intangible assets
The straight-line method is adopted for the amortization of intangible assets with limited service life within their service life.
| Category | Service life | Basis for determining service life |
| Land use right | 50 years or legal service life | Legal service life |
| Office Software | 5 years | Determine the service life with reference to the period that can bring economic benefits to us |
| Trademark right and patent right | 10 years | Determine the service life with reference to the period that can bring economic benefits to us |
| Non-patented technologies | 3 years | Determine the service life with reference to the period that can bring economic benefits to us |
At the end of each year, the Company rechecks the service life and the amortization method of intangible assets.
(3) Intangible assets with uncertain service life shall not be amortized. End at the end of each year, the service life of intangibleassets with uncertain service life shall be reviewed. If there is any evidence showing that its service life is limited, its service life shallbe estimated and amortized according to its service life.
Trademarks acquired in a business combination are recognized at fair value on the date of acquisition. Since a trademark can beautomatically renewed upon expiration, it is an intangible asset with an indefinite useful life. Therefore, no amortization is provided
for a trademark until it is determined that its useful life is limited. It will be tested for impairment annually or when there is anindication of impairment.
(4) Accounting policies of expenditures on internal research and development projects
1) Specific division standard of the research stage and development stage of internal research and development projectsResearch refers to a planned investigation with originality that is conducted to obtain and keep abreast of new scientific ortechnical knowledge. Development refers to the process where research results or other knowledge are applied to one or more plans ordesigns for producing new or substantially improved materials, devices, products and new processes before the commercialmanufacture or use.
2) Expenditures at the research stage shall be included in the current profit or loss when incurred. The expenditures in thedevelopment stage shall be capitalized if they meet all the following conditions:
A. With technical feasibility for finishing the intangible assets to use or sell;
B. With intention of finishing the intangible assets to use or sell;
C. Where the usefulness of methods for intangible assets to generate economic benefits shall be proved, including being able toprove that there is a potential market for the products manufactured by applying the intangible assets or there is a potential market forthe intangible assets themselves or the intangible assets will be used internally;
D. With enough support of technology, financial resources and other resources for finishing development of the intangible assetsas well as capacity for using or selling the assets;
E. The expenditure attributable to the intangible asset during its development phase can be reliably measured.
3) If the products or by-products produced in the R&D process are sold to the outside, the income and costs related to the trialsales shall be accounted for respectively and included in the current profits and losses in accordance with the provisions of theAccounting Standards for Business Enterprises No.14 - Revenue and the Accounting Standards for Business Enterprises No.1 -Inventory.
5.30 Impairment of long-term assets
On the balance sheet date, the Company determines whether there is any sign of impairment for long-term assets such as long-term equity investments, fixed assets, construction in progress, and intangible assets according to internal and external information,and conducts impairment tests on long-term assets with signs of impairment to estimate their recoverable amount. In addition, nomatter whether there is any sign of impairment, the Company will conduct impairment tests on goodwill, intangible assets withuncertain service life, and intangible assets that have not yet reached the usable condition at least at the end of each year to estimatetheir recoverable amount.
Where the recoverable amount of the above long-term assets is lower than the book value according to the estimated result ofrecoverable amount, the book value shall be written down to the recoverable amount, and the write-down amount shall be recognizedas impairment loss of assets and included in current profits and losses. Simultaneously, the corresponding reserves for impairmentshall be drawn accordingly.
The recoverable amount of assets (or asset groups, combination of asset groups, the same below) is the net amount of fair valueof assets deducting disposal fees, or present value of expected future cash flow of the assets, whichever is higher.
The asset group is the smallest asset portfolio that can be identified and the cash inflow produced by the asset group is basicallyindependent of the cash inflow produced by other assets or asset groups. Asset group is formed by related assets with generated cashflow. When identifying asset groups, the Company mainly takes into account whether they generate cash flows independently, as wellas how the management makes decision to manage the production and operation activities and deals with the asset utilization ordisposal.
The net amount of the fair value of the assets deducting the disposal expenses is determined by the price that can be received forselling an asset or paid for transferring a liability in the orderly transaction generated by the market participants on the measurementdate minus the disposal expenses directly attributable to the asset. The current value of estimated future cash flow of the assets shall
be determined by the amount discounted with appropriate rate before tax as per the estimated future cash flow during continuous useand final disposal of the assets.Impairment loss related to asset groups or combination of asset groups is deducted by book value amortized into the carryingvalue of goodwill in the asset groups or combination of asset groups and carrying value of other assets in proportion according to thepercentage of carrying value of other assets (except for goodwill) in the asset groups or combination of asset groups. However, thededucted carrying value of various assets shall not be lower than the largest value among net amount of fair value of the assets (ifdetermined) after the disposal cost is deducted, and the current value of estimated future cash flow of the asset (if determined) and zero.Once confirmed, the impairment loss of the aforesaid long-term assets shall not be reversed in future accounting periods.
5.31 Long-term deferred expenses
Long-term deferred expenses shall be subject to average amortization within the benefit period. If the long-term unamortizedexpenses will not benefit the future accounting period, the amortized value of the unamortized expenses shall be all transferred intothe current profits and losses.
5.32 Contract liabilities
The contractual liabilities refer to the Company's obligations to transfer commodities to the customer due to customerconsideration received or receivable. If the customer has paid the contract consideration or the Company has obtained the right toreceive the contract consideration unconditionally before the Company transfers the commodities to the customer, the Company shalllist the amount received or receivables as contract liabilities at the time when the customer actually makes the payment or at the timewhen the payment is due, whichever is earlier. Contract assets and contract liabilities under the same contract are to be listed on a netbasis; contract assets and contract liabilities under different contracts shall not be set off.
5.33 Employee Remuneration
5.33.1 Accounting treatment of short-term compensation
Employee benefits include short-term benefits, post-employment welfare, termination benefits and other long-term employeewelfare. In the accounting period in which staffs have rendered services, the Company shall recognize the payable salaries to staffs asliabilities.
The Company participates in the employee social security systems, such as basic pensions, medical insurance, housing funds andother social securities established by the government in accordance with relevant requirements. The related expenditures are eitherincluded in cost of related assets or charged to profit or loss in the period when they are incurred.
5.33.2 Accounting treatment of post-employment welfare
We participate in the employee social security system established by government agencies as required, including basic pensioninsurance, medical insurance, housing provident fund and other social security systems. The corresponding expenditures are includedin the relevant asset costs or current profits and losses when incurred.
5.33.3 Accounting treatment of dismissal welfare
When the Company terminates the employment relationship with employees before the employment contract expires or providescompensation to encourage employees to accept voluntary redundancy, the dismissal welfare payment, liabilities of employeecompensation shall be recognized and included into current profit or loss by our company on the day of the two situations (whicheveroccurs first): our company cannot unilaterally withdraw the dismissal welfare provided due to the labor relation plan termination or theredundancy offer or the company recognizes the costs related to restructuring relevant with the dismissal welfare payment.
5.33.4 Accounting treatment of other long-term employee welfare
□ Applicable ? N/A
5.34 Estimated liabilities
(1) An obligation related to the contingencies meeting all the following conditions shall be recognized as estimated liabilities:
1) This obligation is the current obligation undertaken by the Company;
2) It is likely to lead to the outflow of economic benefits from the Company when the obligations are fulfilled;
3) The amount of such obligation can be measured reliably.
(2) Estimated liabilities shall be initially measured in accordance with the best estimated amount of the necessary expenses forperformance of the current obligation.
If the required expenditure has a continuous range and all the results within this range are equally likely to occur, the bestestimate is determined according to the intermediate value within this range.
In other cases, the best estimate is treated separately as follows:
1) If the contingency involves a single project, then it shall be determined as per the most probable amount;
2) If the contingency involves multiple projects, then it shall be calculated and determined according to various possible resultsand relevant probabilities.
5.35 Share-based Payment
5.35.1 Types of Share-based Payment
The term “share-based payment” refers to a transaction in which an enterprise grants equity instruments or undertakes equity-instrument-based liabilities in return for services from employees or other parties. The share-based payment shall consist of equity-settled share-based payment and cash-settled share-based payment.
1) Equity-settled Share-based Payment
The equity-settled share-based payment in return for employee services shall be measured based on the fair value of the equityinstruments granted to the employees at the grant date. If the right of equity-settled share-based payment cannot be exercised until thevesting period comes to an end or until the prescribed performance conditions are met, then within the vesting period, the amount offair value shall, based on the best estimate of the number of vested equity instruments, be included in relevant costs or expensesaccording to the straight-line method; as to equity-settled share-based payment if the right may be exercised immediately after thegrant, the amount of fair value shall be included in relevant costs or expenses at the grant date, and the capital surplus shall beincreased accordingly.
For equity-settled share-based payment in return for the service of any other party, if the fair value of the service of any otherparty can be measured in a reliable way, the fair value of the service at the acquisition date by any other service party shall be includedin relevant costs or expenses; if the fair value of the service of any other party cannot be measured in a reliable way, but the fair valueof the equity instruments can be measured in a reliable way, the fair value of the equity instruments on date of the service acquisitionshall be included in relevant costs or expenses, and the shareholders ’ equity shall be increased accordingly.
2) Cash-settled share-based payment
Stock payment settled by cash shall be measured at the fair value of liabilities recognized based on stocks or other equityinstruments assumed by the Company. If the right maybe exercised immediately after the grant, the fair value shall, at the grant date,be included in relevant costs or expenses, and the liabilities shall be increased accordingly; as to cash-settled share-based payment, ifthe right cannot be exercised until the vesting period comes to an end or until the specified performance conditions are met, at eachbalance sheet date within the vesting period, the services acquired in current period shall, based on the best estimate of the informationabout the exercisable right, be included in relevant costs or expenses at the fair value of the liability undertaken by the Company, andthe liabilities shall be increased accordingly.
On each balance sheet date and the settlement date prior to the settlement of the relevant liabilities, the fair value of the liabilitiesshall be re-measured, with the change of the fair value recognized into current profit or loss.
5.35.2 Accounting Treatment on Implementation, Modification, and Termination of Share-based Payment Plan
During the modification of the share-based payment plan by the Company, if the fair value of granted equity instruments isincreased, the increase in services acquired shall be recognized based on the increase in fair value. The increase in fair values of equityinstruments refers to the difference between equity instrument’s fair values before and after amendment. If the total amount of fairvalue of share-based payment in the modification is decreased, or methods to the disadvantage of employees are adopted, theaccounting treatment on acquired services shall be continued and the change shall be deemed as not occurred, unless the Company hascanceled all or part of the granted equity instruments. Where the terms and conditions of the cash-settled share-based payment
agreement are modified to make it an equity-settled share-based payment, if the vesting period is extended or shortened due to themodification, the accounting treatment shall be carried out in accordance with the modified vesting period, and it is not necessary toconsider the relevant accounting treatment provisions that are unfavorable to the modification.
During the vesting period, if the granted instruments are canceled, the Company shall accelerate the exercise of such equityinstruments; the residual amount in the vesting period to be recognized shall be included in current profit and loss, and the capitalsurplus shall be recognized in the meantime. In the event that the employees or other parties can choose to meet the non-vestingconditions but fail to meet such conditions during the vesting period, the Company shall treat it as the cancellation of granted equityinstruments.
5.36 Other financial instruments as preferred shares and perpetual bond
□ Applicable ? N/A
5.37 Income
5.37.1 Accounting policies used for revenue recognition and measurement
When the Company has fulfilled its performance obligation of the contract, which means that the customer has obtained thecontrol rights of the relevant commodities or services, the Company recognizes the income according to the transaction priceapportioned to this performance obligation.
If the Contract contains two or more performance obligations, the Company shall, on the commencement date of the Contract,apportion the transaction price to each performance obligation according to the relative proportion of the individual selling price of thegoods or services promised by each performance obligation. For sales with quality assurance, if the quality assurance provides aseparate service to the customer in addition to assuring the customer that the goods or services sold meets the established standards,the quality assurance constitutes a single performance obligation. Otherwise, the Company will account for the quality assuranceresponsibility in accordance with the Accounting Standards for Business Enterprises No. 13 - Contingencies.
The transaction price is the amount of consideration that the Company is expected to be entitled to receive for the transfer ofcommodities or services to the customer, but not including payments received on behalf of third parties and payments expected to berefunded to customers by the Company. Where there is a variable consideration in the contract, the Company determines the bestestimate of the variable consideration based on the expected value or the most probable amount. The transaction price of the variableconsideration is included, which shall not exceed the amount of accumulative recognized income that will most likely not be greatreverse when the relevant uncertainty is removed. Where there is consideration payable to a customer in a contract, unless theconsideration is for the purpose of obtaining other clearly distinguishable goods or services from the customer, the Company offsetsthe consideration payable against the transaction price and deducts the current income at a later point between the recognition of therelevant income and the payment (or committed payment) of the customer consideration. If there is any material financing element inthe contract, the Company will adjust the transaction price according to the financing element in the contract; if the interval betweenthe transfer of control rights and the payment by the customer is less than one year, the Company will not consider the financingelement in the transfer of control rights.
If one of the following conditions is fulfilled, it is a performance obligation performed within a certain period of time. TheCompany recognizes the revenue within a certain period of time according to the progress of the performance: (1) the economicbenefits accruing to and consumed by the customer while the Company is performing its performance; (2) the customer has controlover the goods under construction in the course of the Company's performance; (3) commodities produced by the Company in thecourse of performance are irreplaceable and the Company is entitled to receive payment for the cumulative portion of performancecompleted to date throughout the contract period. Otherwise, the Company shall recognize the revenue at the time point when thecustomer gains control rights of the relevant commodities or services.
For the performance obligations performed within a certain period of time, the Company shall recognize the revenue within thatperiod according to the performance progress. If the performance progress cannot be reasonably confirmed, and the costs incurred canbe expected to be compensated, the revenue shall be recognized by the Company according to the amount of costs incurred until theperformance progress can be reasonably confirmed.
For performance obligations performed at a certain time point, the Company shall confirm the revenue at the time point when thecustomer gains control rights of the relevant goods. When judging whether the customer has obtained the control right of the goods orservices, the Company shall consider the following conditions: (1) The enterprise enjoys the right to the current collection, i.e. Thecustomer has the obligation to pay immediately with respect to the goods; (2) the enterprise has transferred the legal ownership of thegoods to the customer, i.e. the customer owns the legal ownership of the goods; (3) the enterprise has transferred to goods to thecustomer in kind, i.e. the customer has possessed the goods; (4) the enterprise has transferred the major risks and remuneration on theownership of the goods to the customer, i.e. the customer has obtained the major risks and remuneration on the ownership of the goods;
(5) the customer has accepted the goods.
The Company determines whether it is the principal responsible person or agent at the time of the transaction based on whether ithas control of the goods or services prior to the transfer of the goods or services to the customer. If the Company has control of thegoods or services before transferring goods or services to customers, the Company is the principal responsible person and recognizesthe revenue according to the total amount received or receivable; otherwise, the Company is an agent and recognizes revenue on thebasis of the amount of commissions or fees expected to be entitled to receive, which is determined on a net basis after deducting thetotal consideration received or receivable from the price payable to other relevant parties.
5.37.2 Specific principles for revenue recognition
The Company mainly sells cosmetics, medical devices and makeup. According to the settlement mode with customers, theCompany can be divided into distribution, direct sales, and consignment.
1) Distribution mode
The Company delivers the products to the purchaser according to the contract, which have been accepted by the purchaser andthe amount of product sales revenue has been determined. When the customer obtains the control right of the goods, the sales revenueis recognized.
2) Direct sales mode
The direct sales mode of the Company is divided into offline self-operation and online self-operation. For offline self-operation,retail is carried out through offline stores, while for online self-operation, sales are carried out by opening self-operated stores onmajor e-commerce platforms or through self-built websites.
Offline self-operation: The customer selects the goods, pays for the goods on-site, and the Company recognizes the income afterthe customer picks up the goods.
Online self-operation: The customer places an order online and makes a payment. After the Company delivers the goods, thecustomer confirms the receipt of the goods and the Company recognizes the income after receiving the payment for goods transferredby the e-commerce platform or the third-party payment company.
3) Consignment mode
The Company delivers the products to the entrusted party according to the contract and recognizes the sales revenue when theentrusted party issues a consignment list to the Company after realizing sales.
The Company grants reward points to customers while selling products. The reward points belong to sales with customers'additional purchase options, that is, the Company will grant options to customers while selling goods, allowing customers to purchaseadditional goods free of charge or at a discounted price. The reward points granted by the Company to the customer provide thecustomer with significant rights and thus constitute a single performance obligation. The Company shall apportion the transactionprice to the performance obligation in accordance with the relevant principles of transaction price apportionment. If the points are usedto exchange the goods provided by the Company, the Company can usually recognize the income related to the points only when therelevant goods are transferred to the customer or the points are invalid.
5.38 Contract Cost
5.38.1 Costs of Winning Contracts
Incremental costs that are incurred by the Company in winning a contract (i.e., costs that would not have been incurred otherwise)but the Company expects to recover are regarded as an asset, amortized on the same basis as incomes from goods or services associated
with the asset and included in profits or losses for the current period. If the asset is amortized for no more than one year, it is includedin profits and losses for the current period when incurred. Other expenses incurred by the Company to win a contract are included inprofits and losses for the current period when incurred, except those expressly borne by the customer.
5.38.2 Costs of Performing Contracts
Costs incurred by the Company for performing a contract are regarded as an asset if they do not fall within the scope ofaccounting standards for business enterprises other than revenue standards and meet the following conditions: ① The costs are directlyrelated to a current or expected contract; ② The costs increase the Company’s resources for future performance obligations; ③ Thecosts are expected to be recovered. Assets recognized are amortized on the same basis as incomes from goods or services associatedwith the asset are recognized and included in profits and losses for the current period.
5.38.3 Contract Cost Impairment
If the book value of the contract cost is higher than the difference between the following two items, the contract cost is calculatedin the provision for asset impairment and recognized as asset impairment losses: ① the remaining consideration expected to beobtained due to the transfer of goods related to the asset; ② estimated costs to be incurred for the transfer of goods related to the asset.
If the factors that lead to inventory impairment previously change so that the difference between ① and ② specified in thepreceding paragraph is higher than the book value of the contract cost, the contract cost that has been calculated in the provision forasset impairment shall be canceled and included in profits and losses for the current period, provided that the book value of the contractcost after cancellation shall not exceed the book value of the asset (assuming that the contract cost is not calculated in the provision forasset impairment) at the date of cancellation.
5.39 Government Grants
Government subsidies refer to monetary and non-monetary assets acquired from the government for free; however, the capitalinvested in the Company by the government as the owner of the Company shall be excluded. Government subsidies are divided intoasset-related and revenue-related government subsidies. The Company defines government subsidies acquired for establishing orforming long-term assets in other ways as asset-related government subsidies; and defines other government subsidies as revenue-related government subsidies. If government documents do not clearly stipulate assistance objects, the subsidies are divided intorevenue related government subsidies and asset related government subsidies in following ways: (1) if government documents definespecific projects that the subsidies are used for, the subsidies are divided based on the relative proportion of paid amount about to formassets in the budget of the specific project against the paid amount covered in the cost, and the proportion division shall be reviewedon every balance sheet date and changed if necessary; (2) if government documents only give a general description of subsidy usageand do not define specific projects, the subsidies are considered as revenue related government subsidies.
The government subsidies considered as monetary assets are measured at the amount received or receivable. If governmentsubsidies are non-monetary assets, they are measured at fair value. If the fair value cannot be reliably measured, they are measured atthe nominal amount.
The government grants can be recognized when they satisfy all the following conditions: (1) the Company can meet theconditions attached to government grants; and (2) the Company can receive the government grants. The government subsidies relatedto daily activities of the enterprise shall be included in other incomes or offset relevant costs based on the substance of businesstransactions. The government grants not related to daily activities of the enterprise shall be included in the non-operating income.
Revenue-related government subsidies used to compensate for related costs or losses during future periods of the enterprise shallbe recognized as deferred income, and shall be included in current profits and losses or offset relevant costs during the period whenrelated costs or losses are recognized; those used to compensate for the incurred related costs or losses of the enterprise shall beincluded in current profits and losses or offset relevant costs directly.
Asset-related government subsidies shall be recognized as deferred incomes or offset the book value of related assets. Theamount shall be included in the profits and losses by stages as per the straight-line method within the service life of relevant assets.Government subsidies measured at the nominal amount shall be directly included in current profit and loss. Where the relevant asset issold, transferred, scrapped or damaged before the end of its useful life, the undistributed balance of the relevant deferred revenue shallbe transferred to the current profits or losses when the asset is disposed of.
5.40 Deferred income Tax Assets/Deferred Income Tax Liabilities
The Company uses balance sheet liability method for accounting treatment of income tax.Current income tax expenses and deferred income tax expenses (or income) are included in current profits and losses, exceptthose related to transactions or matters directly included in shareholders’ equity.
Current income tax is the expected tax payables on the taxable income for the period, using tax rates enacted or substantiallyenacted at the reporting date, and any adjustment to tax payables in respect of previous periods.
On the balance sheet date, the current tax assets and liabilities are listed based on the net amount after offsetting when the taxpayer has the legal right to carry out and intends to carry out net settlement and assets are obtained at the same time when liabilities arepaid off.
Deferred income tax assets and deferred income tax liabilities shall be determined according to deductible temporary differencesand taxable temporary differences respectively and shall be measured at the applicable tax rate during the expected period forrecovering the assets or paying off the liabilities. Temporary differences are differences between the book value of assets or liabilitiesand the amounts on the tax base, including deductible losses and tax deduction which can be carried forward to future years. Thedeferred income tax assets shall be recognized to the extent of taxable income that is likely to be obtained by the company to be offsetby the temporary differences.
For the temporary difference with respect to initial recognition of assets or liabilities incurred in transaction which is not businesscombination and the occurrence of which has no impact on the accounting profits and the taxable incomes (or deductible losses),deferred income tax shall not be recognized. The Company will not recognize the deferred income taxes arise from the initialreorganization of the goodwill.
On the balance sheet date, the Company measures the carrying amount of deferred income tax assets and liabilities according tothe expected recovery or settlement method of deferred income tax assets and liabilities, the promulgated tax laws and the applicabletax rate during the expected recovery of the assets or the liquidation of the liabilities.
On a balance sheet date, the deferred tax assets and deferred tax liabilities are presented in the net value after set-off when thefollowing conditions are satisfied;
(1) The taxation subject has the legal right of settling income tax assets and liabilities in current period at net amount;
(2) The deferred tax assets and the deferred tax liabilities are related to the income taxes levied by the same taxation authority onthe same taxable entity, or on different taxable entities which intend either to carryout a net settlement for the current tax assets and thecurrent tax liabilities, or to acquire the assets at the same time when the liabilities are paid off, in each future period of reversal ofsignificant deferred tax assets and liabilities.
5.41 Lease
5.41.1 Accounting as a Lessee
The Company considers a lease for a lease term not exceeding 12 months (excluding a lease with purchase option) on thecommencement date of the lease term as a short-term lease. A lease with a low value (not exceeding 40,000 CNY) for a new asset isconsidered a lease of low-value assets. The Company chooses not to use right-of-use assets and lease liability for short-term leases andleases of low-value assets. These leases are calculated in relevant asset costs or profits and losses for the current period by the straight-line method during lease terms.
In addition to short-term leases and leases of low-value assets that are handled as above, the Company uses right-of-use assets andlease liability for leases identified.
5.41.2 Accounting for Leases as a Lessor
Lease can be divided by the Company into finance lease and operating lease at the commencement of lease.
A financing lease is a kind of lease in which all risks and rewards regarding the ownership of the leased assets are actuallytransferred. Its ownership maybe transferred or not in the end. Operating lease refers to the lease other than finance lease. As asublessor, the Company classifies subleases based on the right-of-use assets generated from the original lease. However, if the originallease is a short-term lease and the sublessor simplifies the original lease, the Company classifies the sublease as an operating lease.
At the commencement of the lease term, the Company recognizes the financial lease receivables for financial lease andderecognizes the financial leasing assets. When the Company initially measures the finance lease receivables, the net investment in alease is taken as the entry value of the finance lease receivables. The net investment in a lease is equivalent to the sum of theunguaranteed residual value and the present value of the lease receipts that have not yet been received at the commencement of thelease term which is discounted at the interest rate implicit in the lease. For the unrealized financing income, the current interest incomeis calculated and recognized at a fixed periodic rate during the lease term. Variable lease payments obtained by the Company but notconsidered in the measurement of net investment in leases are recognized in the current profit or loss when actually incurred.During each period of the lease term, the Company adopts the straight-line method to recognize the lease receipts from operatingleases as rental income. The variable lease payment which is not included in the measurement of lease receipts is included in thecurrent profit or loss when it actually occurs.
5.42 Other significant accounting policies and accounting estimates
□ Applicable ? N/A
5.43 Changes in significant accounting policy and accounting estimates
5.43.1 Changes in significant accounting policy
? Applicable □ N/A
1) Changes in accounting policies resulting from the implementation of Interpretation No. 16 of Accounting Standards forBusiness Enterprises:
Unit: CNY
| Contents and reasons for changes in our accounting policy | Names of report items that are significantly affected | Impact amount |
| Implement Interpretation No. 16 of Accounting Standards for Business Enterprises | Deferred tax assets | 883,729.12 |
| Implement Interpretation No. 16 of Accounting Standards for Business Enterprises | Deferred income tax liability | 310,069.13 |
| Implement Interpretation No. 16 of Accounting Standards for Business Enterprises | Undistributed profit | 597,391.45 |
| Implement Interpretation No. 16 of Accounting Standards for Business Enterprises | Minority interests | -23,731.46 |
| Implement Interpretation No. 16 of Accounting Standards for Business Enterprises | Deferred tax assets (parent company) | 257,978.02 |
| Implement Interpretation No. 16 of Accounting Standards for Business Enterprises | Income tax expense | -115,766.73 |
| Implement Interpretation No. 16 of Accounting Standards for Business Enterprises | Gains and loss of minority shareholders | 12,646.14 |
| Implement Interpretation No. 16 of Accounting Standards for Business Enterprises | Undistributed profits (parent company) | 257,978.02 |
| Implement Interpretation No. 16 of Accounting Standards for Business Enterprises | Income tax expense (parent company) | 160,687.63 |
2) Changes in Accounting Standards for Business Enterprises Specified in the Interpretation No. 17 on Accounting Standards forBusiness Enterprises
The Ministry of Finance issued the Interpretation No. 17 on Accounting Standards for Business Enterprises on October 25, 2023,explaining “the division between liquid liabilities and non-liquid liabilities”, “the disclosure of suppliers’ financing arrangements” and“accounting of leaseback transactions”. According to the Interpretation, the Company has implemented these accounting standardssince January 1, 2024.
5.43.2 Changes in significant accounting estimates
□ Applicable ? N/A
5.43.3 Adjustment of relevant items in our financial statements at the beginning of the year of new accounting standardsimplemented for the first time in 2023 and:
? Applicable □ N/ANote:
Since January 1, 2023, the Company has implemented the provision “deferred income tax related to assets and liabilities arisingfrom an individual transaction shall not be exempted from initial recognition” stipulated in the Interpretation on Accounting Standardsfor Business Enterprises No. 16 promulgated by the Ministry of Finance. The Company adjusted the individual transactions to whichthe provision applied and which occurred during the period from the earliest date of inclusion in the financial statements to which theprovision was first applied to the first implementation date according to the provision. Where taxable temporary differences anddeductible temporary differences arise in respect of lease liabilities and right-of-use assets recognized on the earliest period of inclusionin the financial statements to which the provision is first applied, as well as in respect of estimated liabilities related to the retirementobligation recognized and corresponding related assets, in accordance with this provision and the Accounting Standards for BusinessEnterprises No. 18-Income Tax, the cumulative impact factors are used to adjust retained earnings and other related financial statementitems on the earliest date of inclusion in the financial statements.The impact of implementing Interpretation No. 16 of Accounting Standards for Business Enterprises on our 2022 financialstatements is as follows:
Consolidated balance sheet:
Unit: CNY
| Item | December 31, 2022 | January 1, 2023 | Impact amount |
| Deferred tax assets | 51,234,874.14 | 52,118,603.26 | 883,729.12 |
| Deferred income tax liability | 8,054,761.30 | 8,364,830.43 | 310,069.13 |
| undistributed profit | 2,071,587,040.20 | 2,072,184,431.65 | 597,391.45 |
| minority interests | 49,502,837.46 | 49,479,106.00 | -23,731.46 |
Consolidated income statement:
Unit: CNY
| Item | Before the change for 2022 | After the change for 2022 | Impact amount |
| Income tax expense | 163,448,256.86 | 163,332,490.13 | -115,766.73 |
| Gains and losses of minority shareholders | -812,460.60 | -799,814.46 | 12,646.14 |
Balance sheet of parent company:
Unit: CNY
| Item | December 31, 2022 | January 1, 2023 | Impact amount |
| Deferred tax assets | 7,543,877.69 | 7,801,855.71 | 257,978.02 |
| Undistributed profit | 1,671,209,103.81 | 1,671,467,081.83 | 257,978.02 |
Income statement of parent company:
Unit: CNY
| Item | Before the change for 2022 | After the change for 2022 | Impact amount |
| Income taxes | 154,947,627.55 | 155,108,315.18 | 160,687.63 |
5.44 Miscellaneous
□ Applicable ? N/A
6. Taxes
6.1 Main taxes and tax rates
| Tax category | Taxation basis | Tax rate |
| VAT | Sales volume taxable | 13%, 9%, 6%, 1% |
| Consumption Tax | Sales volume taxable | 15% |
| City maintenance and construction tax | Taxable amount of turnover tax | 7%, 5% |
| Enterprise income tax | Taxable income | 25.59%, 25%, 21%, 20%, 17%, 16.5%, 15% |
| Educational surcharge | Taxable amount of turnover tax | 3% |
| Local education surcharge | Taxable amount of turnover tax | 2% |
Where there are taxation subjects with different enterprise income tax rates for tax payment, the disclosure is as follows:
? Applicable □ N/A
| Taxpayer | Income tax rate |
| Botanee, Shanghai Botanee Bio-Technology Co., Ltd., Shanghai Jiyan Biopharmaceutical Development Co., Ltd., Shanghai Botanee Health Technology Co., Ltd., Yuejiang (Hainan) E-commerce Co., Ltd., Yuehui (Chongqing) Bio-Technology Co., Ltd. | 15% |
| Botanee Trading Co., Ltd., ME Cosmetic Hong Kong Co.,Limited | 16.50% |
| Botanee Bio-Technology Japan Co., Ltd.., URUOI Co., Ltd. | 25.59% |
| BOtanee Bio-Technology (Singapore) Pte. Ltd., ME Cosmetic (Singapore) Pte.Ltd. | 17% |
| Botanee Bio-Technology (Thailand) Co., Ltd. | 20% |
| ME Cosmetic USA INC. | 21% |
| Other subsidiaries in the Chinese Mainland | 25% |
6.2 Tax preference
6.2.1 Enterprise income tax
① Income tax incentives for high-tech enterprise
| Company | Preferential tax rate | High-tech enterprise certificate number | Validity period |
| Yunnan Botanee Biotechnology Group Co., Ltd. | 15% | GR202153000724 | 2021 to 2023 |
| Shanghai Botanee Biotechnology Co., Ltd. | 15% | GR202131000004 | 2021 to 2023 |
| Shanghai Jiyan Biopharmaceutical Development Co., Ltd. | 15% | GR202131000009 | 2021 to 2023 |
| Qimei Technology (Shanghai) Co., Ltd. | 15% | GR202231001625 | 2022 to 2024 |
| Shanghai Botanee Health Technology Co., Ltd. | 15% | GR202331006179 | 2023 to 2025 |
② Preferential Corporate Income Tax in Hainan Free Trade Port
The Notice on Preferential Corporate Income Tax in Hainan Free Trade Port (CS [2020] No. 31) issued by the Ministry ofFinance and the State Administration of Taxation imposes a reduced corporate income tax rate (15%) on enterprises registered inHainan Free Trade Port and substantially operating in government-supported industries. The Company’s subsidiary Yuejiang (Hainan)E-commerce Co., Ltd. meets the above requirement and enjoys a 15% corporate income tax rate.
③Preferential Corporate Income Tax for Boosting the Development of China’s Western Region
According to the Announcement by the Ministry of Finance, the State Administration of Taxation and the National Developmentand Reform Commission on Continuing Preferential Corporate Income Tax to Boost the Development of China’s Western Region([2020] No. 23), from January 1, 2021 to December 31, 2030, enterprises engaged in government-supported industries and located inChina’s western region enjoy a reduced corporate income tax rate (15%). The Company’s subsidiary Yuehui (Chongqing) Bio-Technology Co., Ltd., meets the above requirement and enjoys a 15% corporate income tax rate.
④ Preferential Corporate Income Tax on Small and Micro Enterprises
According to the Announcement by the Ministry of Finance and the State Administration of Taxation on Preferential Income Taxon Small and Micro Enterprises and Individual Businesses (Announcement [2023] No. 6 of the Ministry of Finance and the StateAdministration of Taxation), the Announcement by the Ministry of Finance and the State Administration of Taxation on Tax to FurtherSupport the Development of Small and Micro Enterprises and Individual Businesses (Announcement [2023] No. 12 of the Ministry ofFinance and the State Administration of Taxation), small and low-profit businesses shall enjoy a 20% corporate income tax ratecalculated at 25% income taxable until December 31, 2027. The Company’s subsidiaries Wuhan Botanee Bio-Technology Co., Ltd.,Kunming Winona Medical Cosmetology Co., Ltd. and Shanghai Harmony Bio-Technology Co., Ltd., as small and micro-profitenterprises, enjoyed this tax incentive for small and micro enterprises in 2023.
6.2.2 Value-Added Tax (VAT)
According to the Announcement on the Policy on Value-Added Tax Credits for Advanced Manufacturing Enterprises(Announcement [2023] No. 43 of the Ministry of Finance and the General Administration of Taxation) promulgated by the Ministry ofFinance and the State Administration of Taxation, and the Notice by the General Office of the Ministry of Industry and InformationTechnology on Matters Concerning the Formulation of the List of Advanced Manufacturing Enterprises Eligible for the Policy onValue-Added Tax Credits in 2023 (GXTCH [2023]), from January 1, 2023 to December 31, 2027, advanced manufacturing enterprisescan have the VAT payable deducted by 5% in accordance with the current deductible input VAT (hereinafter referred to as the“additional deductions”). The Company enjoyed the additional VAT deductions for advanced manufacturing enterprises.
6.2.3 Miscellaneous
□ Applicable ? N/A
7. Notes to Items in Consolidated Financial Statement
7.1 Cash at Bank and on Hand
Unit: CNY
| Item | Ending balance | Opening balance |
| Cash at bank | 2,036,518,760.57 | 2,375,337,890.61 |
| Other cash at bank and on hand | 54,941,101.01 | 138,957,824.65 |
| Total | 2,091,459,861.58 | 2,514,295,715.26 |
| Including: total amount of money deposited abroad | 18,011,995.15 |
Note: At the end of the reporting period, except for CNY16,576,617.80 of bank deposits intended for purchasing entrustedfinancial products with limited usage, CNY 1,000,000.00 of letter of guarantee deposit, and CNY1,500.00 of ETC deposit, therewere no other restricted funds.
7.2 Financial assets held for trading
Unit: CNY
| Item | Ending balance | Opening balance |
| Financial assets at fair value through profit or loss | 1,238,356,707.34 | 1,433,635,489.84 |
| Including: entrusted financial management of cash management | 1,238,356,707.34 | 1,433,635,489.84 |
| Total | 1,238,356,707.34 | 1,433,635,489.84 |
Other note: None.
7.3 Derivative financial assets
□ Applicable ? N/A
7.4 Notes receivable
7.4.1 Classified Presentation of Notes Receivable
Unit: CNY
| Item | Ending balance | Opening balance |
Commercial acceptance notes
| Commercial acceptance notes | 24,502,124.46 | |
| Total | 24,502,124.46 |
7.4.2 Classified Disclosure based on Bad Debt Accrual
Unit: CNY
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Ratio | Amount | Provision ratio | Amount | Ratio | Amount | Provision ratio | |||
| Including: | ||||||||||
| Notes receivable with provision for bad debts on a portfolio basis | 25,791,709.96 | 100.00% | 1,289,585.50 | 5.00% | 24,502,124.46 | |||||
| Including: | ||||||||||
| Commercial acceptance bill portfolio with provision for bad debts based on aging portfolio | 25,791,709.96 | 100.00% | 1,289,585.50 | 5.00% | 24,502,124.46 | |||||
| Total | 25,791,709.96 | 100.00% | 1,289,585.50 | 5.00% | 24,502,124.46 | |||||
Provision for bad debts on a portfolio basis: CNY 1,289,585.50
Unit: CNY
| Item | Ending balance | ||
| Book balance | Provision for bad debts | Provision ratio | |
| Commercial acceptance notes | 25,791,709.96 | 1,289,585.50 | 5.00% |
| Total | 25,791,709.96 | 1,289,585.50 | |
Note on the basis for determining this combination: For details, please refer to “5.13 Accounts Receivable” in “5. ImportantAccounting Policies and Accounting Estimates” under Section X of this report.Whether bad debt provisions for notes receivable were made according to the general expected credit loss model or not:
□ Applicable ? N/A
7.4.3 Bad Debt Provisions Accrued, Recovered or Reversed in The Current Period
Bad debt provisions for the current period:
Unit: CNY
| Item | Opening balance | Amount of changes in the current period | Ending balance | |||
| Provision | withdraw or transfer | Write off | Other | |||
| Commercial acceptance bill portfolio with | 1,289,585.50 | 1,289,585.50 | ||||
provision for bad debtsbased on aging portfolio
provision for bad debtsbased on aging portfolio
Amount of recovery or reversal of bad debt provisions for the current period as important:
□ Applicable ? N/A
7.4.4 Pledged Notes Receivable at the End of the Period
□ Applicable ? N/A
7.4.5 Notes Receivable That Have Been Endorsed or Discounted by the Company at the End of the Periodand Have Not Yet Matured on the Balance Sheet Date
□ Applicable ? N/A
7.4.6 Notes Receivable Actually Written off in the Current Period
□ Applicable ? N/A
7.5 Accounts receivable
7.5.1 Disclosure by ageing
Unit: CNY
| Aging | Ending balance | Opening balance |
| Within 1 year (inclusive) | 581,127,699.23 | 278,053,663.78 |
| 1-2 years | 3,645,141.52 | 4,682,247.25 |
| 2-3 years | 3,246,922.05 | 683,802.11 |
| Over 3 years | 1,080,042.40 | 1,261,372.51 |
| 3-4 years | 1,080,042.40 | 735,412.51 |
| 4-5 years | 525,960.00 | |
| Total | 589,099,805.20 | 284,681,085.65 |
7.5.2 Accounts receivable classified by category
Unit: CNY
| Type | Ending balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carrying value | Book balance | Provision for bad debts | Carrying value | |||||
| Amount | Scale | Amount | Proportion of provision | Amount | Scale | Amount | Proportion of provision | |||
| Accounts receivable with provision for bad debts on a single basis | 525,960.00 | 0.18% | 525,960.00 | 100.00% | ||||||
| Including | ||||||||||
Accountsreceivable withinsignificant singleamount but baddebt provisionmade individually
| Accounts receivable with insignificant single amount but bad debt provision made individually | 525,960.00 | 0.18% | 525,960.00 | 100.00% | ||||||
| Accounts receivable for which provision for bad debts is made by combination | 589,099,805.20 | 100.00% | 27,337,875.63 | 4.64% | 561,761,929.57 | 284,155,125.65 | 99.82% | 14,065,363.80 | 4.95% | 270,089,761.85 |
| Including | ||||||||||
| Accounts receivables for which bad debts provision is accrued according to aging portfolios | 589,099,805.20 | 100.00% | 27,337,875.63 | 4.64% | 561,761,929.57 | 284,155,125.65 | 99.82% | 14,065,363.80 | 4.95% | 270,089,761.85 |
| Total | 589,099,805.20 | 100.00% | 27,337,875.63 | 4.64% | 561,761,929.57 | 284,681,085.65 | 100.00% | 14,591,323.80 | 5.13% | 270,089,761.85 |
Provision for bad debts made individually: CNY 525,960.00.
Unit: CNY
| Name | Opening balance | Ending balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision ration | Reasons for provision | |
| Company 1 | 525,960.00 | 525,960.00 | The individual amount is not significant and the management believes that there is no possibility of recovery. During the reporting period, we have written off this account receivable. | |||
| Total | 525,960.00 | 525,960.00 | ||||
Provision for bad debts made by portfolio: CNY 27,337,875.63.
Unit: CNY
| Name | Ending balance | ||
| Book balance | Provision for bad debts | Proportion of provision | |
| Within 1 year | 581,127,699.23 | 23,540,829.75 | 4.05% |
| 1-2 years | 3,645,141.52 | 1,093,542.45 | 30.00% |
| 2 to 3 years | 3,246,922.05 | 1,623,461.03 | 50.00% |
| Over 3 years | 1,080,042.40 | 1,080,042.40 | 100.00% |
| Total | 589,099,805.20 | 27,337,875.63 | |
Note on the basis for determining this combination: For details, please refer to “5.13 Accounts Receivable” in “5. ImportantAccounting Policies and Accounting Estimates” under Section X of this report.Whether bad debt provisions for notes receivable were made according to the general expected credit loss model or not:
□ Applicable ? N/A
7.5.3 Bad Debt Provision Provided, Recovered or Reversed in Current Period
Bad debt provision withdrawn in the reporting Period:
Unit: CNY
| Type | Opening balance | Amount changed in the current period | Ending balance | |||
| Provision | Recovery or reversal | Cancellation after verification | Miscellaneous | |||
| Bad debt provision for Account receivable | 14,591,323.80 | 11,734,440.87 | 525,960.00 | 1,538,070.96 | 27,337,875.63 | |
| Total | 14,591,323.80 | 11,734,440.87 | 525,960.00 | 1,538,070.96 | 27,337,875.63 | |
Significant recovery or reversal of bad debt provision for the current period:
□ Applicable ? N/A
7.5.4 Accounts receivable actually written off in current period
Unit: CNY
| Item | Write-off amount |
| Accounts receivable actually written off | 525,960.00 |
Significant write-offs of accounts receivable:
□ Applicable ? N/A
7.5.5 Accounts receivable with top five ending balance collected as per the borrowers:
Unit: CNY
| Company | Ending balance of accounts receivable | Proportion to total amount of balance carried forward of accounts receivable | Closing balance of provision for bad debts |
| Company 1 | 75,213,243.41 | 75,213,243.41 | |
| Company 2 | 55,728,944.79 | 55,728,944.79 | |
| Company 3 | 45,926,859.68 | 45,926,859.68 | |
| Company 4 | 36,490,331.42 | 36,490,331.42 | |
| Company 5 | 33,685,001.34 | 33,685,001.34 | |
| Total | 247,044,380.64 | 247,044,380.64 |
7.6 Contract assets
□ Applicable ? N/A
7.7 Receivables financing
7.7.1 Classified presentation of accounts receivable financing
Unit: CNY
| Item | Ending balance | Opening balance |
| Bank acceptance draft | 156,659,263.78 | 238,668,244.17 |
| Total | 156,659,263.78 | 238,668,244.17 |
7.7.2 Classified disclosure according to bad debt accrual
□ Applicable ? N/A
7.7.3 Bad debt provisions accrued, recovered or reversed in the current period
□ Applicable ? N/A
7.7.4 Financing of our pledged receivables at the end of the period
Unit: CNY
| Item | Amount pledged at the end of the period |
| Bank acceptance draft | 17,311,417.39 |
| Total | 17,311,417.39 |
7.7.5 Financing of receivables that have been endorsed or discounted by the company at the end of the periodand have not yet matured on the balance sheet date
Unit: CNY
| Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
| Bank acceptance draft | 167,412,383.48 | |
| Total | 167,412,383.48 |
7.7.6 Financing of receivables actually written off in the current period
□ Applicable ? N/A
7.7.7 About movements of accounts receivable financing in the current period and fair value changes
Other changes in receivables financing are mainly the net changes in bank acceptance bills received, endorsed and transferred ormatured for acceptance by Botanee during the reporting period. The fair value of bank acceptance bills held by us is determined basedon the face amount.
7.7.8 Other description
□ Applicable ? N/A
7.8 Other receivables
Unit: CNY
| Item | Ending balance | Opening balance |
| Other accounts receivable | 29,748,433.09 | 20,097,625.25 |
| Total | 29,748,433.09 | 20,097,625.25 |
7.8.1 Interest receivable
□ Applicable ? N/A
7.8.2 Dividends receivable
□ Applicable ? N/A
7.8.3 Other receivables
1) Other receivables classified by nature
Unit: CNY
| Payment nature | Ending book balance | Opening book balance |
Guarantee deposit and security deposit
| Guarantee deposit and security deposit | 35,642,177.42 | 24,503,452.43 |
| Employee provision | 644,168.97 | 519,088.27 |
| Miscellaneous | 887,481.81 | 1,820.48 |
| Total | 37,173,828.20 | 25,024,361.18 |
2) Disclosure by ageing
Unit: CNY
| Aging | Ending book balance | Opening book balance |
| Within 1 year (inclusive) | 15,063,310.31 | 9,053,873.14 |
| 1-2 years | 7,729,645.42 | 7,619,591.95 |
| 2-3 years | 7,460,099.07 | 4,985,278.09 |
| Over 3 years | 6,920,773.40 | 3,365,618.00 |
| 3-4 years | 3,555,155.40 | 3,365,618.00 |
| 4-5 years | 3,365,618.00 | |
| Total | 37,173,828.20 | 25,024,361.18 |
3) Disclosure of Classification by bad debt accrual
? Applicable □ N/A
Unit: CNY
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Ratio | Amount | Provision ratio | Amount | Ratio | Amount | Provision ratio | |||
| Including: | ||||||||||
| Provision for bad debts on a portfolio basis | 37,173,828.20 | 100.00% | 7,425,395.11 | 19.97% | 29,748,433.09 | 25,024,361.18 | 100.00% | 4,926,735.93 | 19.69% | 20,097,625.25 |
| Including: | ||||||||||
| Other receivables with provision for bad debts based on aging combinations | 37,173,828.20 | 100.00% | 7,425,395.11 | 19.97% | 29,748,433.09 | 25,024,361.18 | 100.00% | 4,926,735.93 | 19.69% | 20,097,625.25 |
| Total | 37,173,828.20 | 100.00% | 7,425,395.11 | 19.97% | 29,748,433.09 | 25,024,361.18 | 100.00% | 4,926,735.93 | 19.69% | 20,097,625.25 |
Provision for bad debts on a portfolio basis: CNY7,425,395.11
| Item | Ending balance | ||
| Book balance | Provision for bad debts | Provision ratio | |
| Other receivables with provision for bad debts based on aging combinations | 37,173,828.20 | 7,425,395.11 | 19.97% |
total
| total | 37,173,828.20 | 7,425,395.11 |
Note on the basis for determining this combination: For details, please refer to “5.13 Accounts Receivable” in “5. ImportantAccounting Policies and Accounting Estimates” under Section X of this report.
Provision for bad debts based on the general expected credit loss model:
Unit: CNY
| Provision for bad debts | Stage I | Stage II | Stage III | Total |
| Expected credit losses for the next 12 months | Expected credit loss within the whole duration (no credit impairment occurs) | Expected credit loss within the whole duration (credit impairment has occurred) | ||
| Balance on January 1, 2023 | 4,926,735.93 | 4,926,735.93 | ||
| Balance as at January 1, 2023 is in the current period. | ||||
| Provision in the current period | 1,238,388.26 | 1,238,388.26 | ||
| Sales in this period | 86,665.00 | 86,665.00 | ||
| Other changes | 1,346,935.92 | 1,346,935.92 | ||
| Balance as at December 31, 2022 | 7,425,395.11 | 7,425,395.11 |
Basis for division of each stage and provision ratio for bad debts:
□ Applicable ? N/A
Changes of carrying amount with significant amount changed of loss provision in the reporting period
□ Applicable ? N/A
4) Bad debt provision provided, recovered or reversed in current period
Bad debt provision withdrawn in the reporting period:
Unit: CNY
| Type | Opening balance | Amount changed in the current period | Ending balance | |||
| Provision | Recovery or reversal | Cancellation after verification | Miscellaneous | |||
| Other receivables with provision for bad debts made as per aging portfolio | 4,926,735.93 | 1,238,388.26 | 86,665.00 | 1,346,935.92 | 7,425,395.11 | |
| Total | 4,926,735.93 | 1,238,388.26 | 86,665.00 | 1,346,935.92 | 7,425,395.11 | |
Significant provision for bad debt recovered or reversed among the above:
□ Applicable ? N/A
5) Other receivables actually written off in the current period
□ Applicable ? N/A
6) Other receivables with top five ending balances carried forward collected as per the borrowers
Unit: CNY
| Name | Nature | Ending balance | Aging | Proportion to ending balance of other receivables | Closing balance of provision for bad debts |
| Company 1 | Deposit | 5,723,353.80 | 1-3 years, more than 3 years | 15.40% | 1,144,670.77 |
| Company 2 | Deposit | 3,100,000.00 | Within 1 year | 8.34% | 620,000.00 |
| Company 3 | Deposit | 2,414,429.93 | Within 1 year, 1-2 years | 6.49% | 482,885.99 |
| Company 4 | Deposit | 2,235,509.00 | Over 3 years | 6.01% | 447,101.80 |
| Company 5 | Deposit | 1,785,040.30 | Within 1 year, 1-3 years, more than 3 years | 4.80% | 357,008.07 |
| Total | 15,258,333.03 | 41.04% | 3,051,666.63 |
7) Presented in other receivables due to centralized management of funds
□ Applicable ? N/A
7.9 Advances to suppliers
7.9.1 Advances to suppliers shall be listed by aging analysis
Unit: CNY
| Aging | Ending balance | Opening balance | ||
| Amount | Scale | Amount | Scale | |
| Within 1 year | 67,872,305.63 | 97.97% | 36,513,173.89 | 87.75% |
| 1-2 years | 1,163,238.29 | 1.68% | 5,096,688.90 | 12.25% |
| 2-3 years | 243,572.46 | 0.35% | ||
| Total | 69,279,116.38 | 41,609,862.79 | ||
About the reason for no settlement of significant advances to suppliers with the ageing over 1 year: As of the end of the reportingperiod, we had no significant prepaid accounts aged more than one year.
7.9.2 Advances to suppliers with top five ending balances collected as per the suppliers
At the end of the reporting period, the total amount of the top five prepayments collected by the Company according to thecounterparty (the Company counts the counterparties under the same group as the same counterparty) was CNY 37,121,855.70,accounting for 53.49% of the total ending balance of prepayments.
7.10 Inventories
Whether the Company needs to comply with the disclosure requirements for real estate industry: No
7.10.1 Category of inventories
Unit: CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Falling price reserves of inventory or depreciation reserves of contract performance cost | Carrying value | Book balance | Falling price reserves of inventory or depreciation reserves of contract performance cost | Carrying value | |
Raw materials
| Raw materials | 69,380,560.62 | 2,258,921.06 | 67,121,639.56 | 143,297,414.36 | 3,060,303.59 | 140,237,110.77 |
| Goods in stocks | 836,637,929.16 | 21,598,709.45 | 815,039,219.71 | 535,545,737.30 | 15,939,434.47 | 519,606,302.83 |
| Semi-finished products | 12,772,346.32 | 478,650.98 | 12,293,695.34 | 5,361,028.98 | 178,897.82 | 5,182,131.16 |
| Low-value consumables | 11,818,559.41 | 1,859,830.35 | 9,958,729.06 | 6,807,097.15 | 1,084,517.85 | 5,722,579.30 |
| Total | 930,609,395.51 | 26,196,111.84 | 904,413,283.67 | 691,011,277.79 | 20,263,153.73 | 670,748,124.06 |
7.10.2 Provision for inventory impairment / contract performance cost impairment
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance | ||
| Provision | Miscellaneous | Reversal or write-off | Miscellaneous | |||
| Raw materials | 3,060,303.59 | 2,101,103.41 | 2,902,485.94 | 2,258,921.06 | ||
| Goods in stocks | 15,939,434.47 | 16,206,941.04 | 4,600,448.43 | 15,148,114.49 | 21,598,709.45 | |
| Semi-finished products | 178,897.82 | 477,820.30 | 178,067.14 | 478,650.98 | ||
| Low-value consumables | 1,084,517.85 | 1,411,266.94 | 635,954.44 | 1,859,830.35 | ||
| Total | 20,263,153.73 | 20,197,131.69 | 4,600,448.43 | 18,864,622.01 | 26,196,111.84 | |
Provision for inventory decline in value on a group basis：
□ Applicable ? N/A
7.10.3 About ending balance of inventories containing capitalization amount of borrowing costs
□ Applicable ? N/A
7.10.4 On amortized amount of contract performance cost in the current period
□ Applicable ? N/A
7.11 Held-for-sale assets
□ Applicable ? N/A
7.12 Current portion of non-current assets
□ Applicable ? N/A
7.13 Other current assets
Unit: CNY
| Item | Ending balance | Opening balance |
| Entrusted cash management | 310,000,000.00 | 480,117,111.10 |
| VAT retained and to be certified for deduction at the end of period | 127,318,554.33 | 41,177,277.15 |
| Tax paid in advance | 6,983,879.41 | 3,815,222.75 |
| Cost of returning products receivable | 802,608.90 | 374,186.41 |
| Miscellaneous | 1,291,210.12 | 403,996.72 |
| Total | 446,396,252.76 | 525,887,794.13 |
Other note: None
7.14 Creditors’ investment
□ Applicable ? N/A
7.15 Other creditors' investment
□ Applicable ? N/A
7.16 Investment in other equity instruments
□ Applicable ? N/A
7.17 Long-term receivables
□ Applicable ? N/A
7.18 Long-term equity investment
Unit: CNY
| Investee | Opening balance (book value) | Opening balance (carrying value) | Current increase or decrease | Ending balance (carrying amount) | Ending balance of impairment provision | |||||||
| Additional investment | Negative investment | Gains and losses on investments recognized under the equity method | Other comprehensive income adjustments | Other changes in equity | Declaration of cash dividends or profits | Provision for impairment | Miscellaneous | |||||
| II. Associates | ||||||||||||
| Hangzhou Meixi | 42,648,730.83 | 12,000,000.00 | 17,327,810.25 | 71,976,541.08 | ||||||||
| Shenzhen Nature | 33,127,267.87 | -4,842,523.25 | 28,284,744.62 | |||||||||
| Beijing Huanfang Shidai | 7,000,000.00 | -404,859.03 | 6,595,140.97 | |||||||||
| Yizheng (Suzhou) Biology | 35,000,000.00 | -418,425.06 | 34,581,574.94 | |||||||||
| Hunan Miaomiao Health | 1,200,000.00 | -217,223.05 | 982,776.95 | |||||||||
| Weimai Qingtong Medical | 36,333,333.00 | -1,738,960.41 | 34,594,372.59 | |||||||||
| Shanghai Weimu Medical | 35,000,000.00 | 35,000,000.00 | ||||||||||
| Subtotal Total | 82,775,998.70 | 119,533,333.00 | 9,705,819.45 | 212,015,151.15 | ||||||||
Recoverable amount determined as the net amount after fair value minus disposal costs:
□ Applicable ? N/A
Recoverable amount determined based on the present value of expected future cash flows:
□ Applicable ? N/A
Other note: none.
7.19 Other non-current financial assets
Item
| Item | Ending balance | Opening balance |
| Financial assets measured at fair value with changes included in current profits and losses | 86,449,823.00 | |
| Total | 86,449,823.00 |
Other note: None.
7.20 Investment real estates
7.20.1 Investment real estates measured at cost
? Applicable □ N/A
Unit: CNY
| Item | Houses and buildings | Land use rights | Construction in progress | Total |
| I. Original carrying value | ||||
| 1. Opening balance | 9,550,752.40 | 9,550,752.40 | ||
| 2. Increase in the current period | ||||
| (1) Outsourcing | ||||
| (2) Transfer of inventories\fixed assets\construction in progress | ||||
| (3) Business mergers increase | ||||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance | 9,550,752.40 | 9,550,752.40 | ||
| II. Accumulated depreciation and accumulated amortization | ||||
| 1. Opening balance | 75,610.12 | 75,610.12 | ||
| 2. Increase in the current period | 453,660.72 | 453,660.72 | ||
| (1) Provision or amortization | 453,660.72 | 453,660.72 | ||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance | 529,270.84 | 529,270.84 | ||
| III. Impairment provision | ||||
| 1. Opening balance | ||||
| 2. Increase amount in this period | ||||
| (1) Provision | ||||
| 3. Decrease amount in this period | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4. Closing balance | ||||
| IV. Carrying amount | ||||
| 1. Ending carrying amount | 9,021,481.56 | 9,021,481.56 | ||
| 2. Opening carrying value | 9,475,142.28 | 9,475,142.28 |
Net amount from recoverable amount based on fair value minus disposal costs:
□ Applicable ? N/A
Recoverable amount based on the present value of expected future cash flows:
□ Applicable ? N/A
Other note: None.
7.20.2 Investment properties measured at fair value
□ Applicable ? N/A
7.20.3 Converted to investment property and measured at fair value
□ Applicable ? N/A
7.20.4 Investment Property Failed to Accomplish Certification of Property
□ Applicable ? N/A
7.21 Fixed assets
Unit: CNY
| Item | Ending balance | Opening balance |
| Fixed assets | 667,204,436.83 | 206,366,629.61 |
| Total | 667,204,436.83 | 206,366,629.61 |
7.21.1 Details of fixed assets
Unit: CNY
| Item | Buildings and structures | Electronic equipment | Machinery and equipment | Transportatio n equipment | Office furniture | Total |
| I. Original carrying value: | ||||||
| 1. Opening balance | 50,350,770.48 | 14,108,250.68 | 196,169,097.55 | 11,539,429.83 | 6,197,997.16 | 278,365,545.70 |
| 2. Increase in the current period | 210,844,867.73 | 18,929,434.24 | 273,114,676.40 | 2,538,073.44 | 12,202,121.34 | 517,629,173.15 |
| (1) Purchase | 2,520,634.47 | 65,690,354.04 | 2,538,073.44 | 546,942.51 | 71,296,004.46 | |
| (2) Transfer to construction in progress | 210,844,867.73 | 15,381,014.82 | 195,843,603.62 | 1,449,802.89 | 423,519,289.06 | |
| (3) Increase from business combination | 1,027,784.95 | 11,580,718.74 | 10,205,375.94 | 22,813,879.63 | ||
| 3. Decrease in the current period | 71,046.14 | 2,644,251.29 | 4,219,951.33 | 63,205.58 | 6,998,454.34 | |
| (1) Disposal or retirement | 71,046.14 | 2,644,251.29 | 4,219,951.33 | 63,205.58 | 6,998,454.34 | |
| 4. Closing balance | 261,195,638.21 | 32,966,638.78 | 466,639,522.66 | 9,857,551.94 | 18,336,912.92 | 788,996,264.51 |
| II. Accumulated depreciation | ||||||
| 1. Opening balance | 6,812,040.68 | 8,394,836.34 | 47,511,649.68 | 6,798,467.63 | 2,481,921.76 | 71,998,916.09 |
2. Increase in the
current period
| 2. Increase in the current period | 4,585,673.58 | 5,091,633.21 | 41,061,540.47 | 1,260,610.39 | 2,162,312.27 | 54,161,769.92 |
| (1) Provision | 4,585,673.58 | 5,091,633.21 | 41,061,540.47 | 1,260,610.39 | 2,162,312.27 | 54,161,769.92 |
| 3. Decrease in the current period | 67,150.45 | 2,256,312.14 | 2,026,517.20 | 18,878.54 | 4,368,858.33 | |
| (1) Disposal or retirement | 67,150.45 | 2,256,312.14 | 2,026,517.20 | 18,878.54 | 4,368,858.33 | |
| 4. Closing balance | 11,397,714.26 | 13,419,319.10 | 86,316,878.01 | 6,032,560.82 | 4,625,355.49 | 121,791,827.68 |
| III. Impairment provision | ||||||
| 1. Opening balance | ||||||
| 2. Increase amount in this period | ||||||
| (1) Provision | ||||||
| 3. Reduction amount in this period | ||||||
| (1) Disposal or scrapping | ||||||
| 4. Closing balance | ||||||
| IV. Carrying amount | ||||||
| 1. Ending carrying amount | 249,797,923.95 | 19,547,319.68 | 380,322,644.65 | 3,824,991.12 | 13,711,557.43 | 667,204,436.83 |
| 2. Opening carrying value | 43,538,729.80 | 5,713,414.34 | 148,657,447.87 | 4,740,962.20 | 3,716,075.40 | 206,366,629.61 |
7.21.2 Temporarily idle fixed assets
□ Applicable ? N/A
7.21.3 Fixed assets leased out under operating leases
□ Applicable ? N/A
7.21.4 Details of fixed assets whose certificate of titles are not settled
□ Applicable ? N/A
7.21.5 Impairment testing of fixed assets
□ Applicable ? N/A
7.21.6 Disposal of fixed assets
□ Applicable ? N/A
7.22 Projects underconstruction
Unit: CNY
Item
| Item | Ending balance | Opening balance |
| Projects under construction | 40,220,147.41 | 349,466,401.13 |
| Total | 40,220,147.41 | 349,466,401.13 |
7.22.1 Information of construction in progress
Unit: CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Provision for Impairmen t | Carrying value | Book balance | Provision for Impairmen t | Carrying value | |
| Central Factory | 337,229,640.82 | 337,229,640.82 | ||||
| Other projects under construction | 40,220,147.41 | 40,220,147.41 | 12,236,760.31 | 12,236,760.31 | ||
| Total | 40,220,147.41 | 40,220,147.41 | 349,466,401.13 | 349,466,401.13 | ||
7.22.2 Changes of major construction in progress in the current period
Unit: CNY
| Item | Budget (ten thousand CNY) | Opening balance | Increa se in the current period | Amount transferred into fixed assets in the current period | Other decreases in the current perio d | Ending balance | Proportion of accumulated investment in constructions to budget | Construction progress | Accumulated amount of capitaliz ed interest | Including : Amount of capitalize d interest in the current period | Capitalization rate for current interest | Source of funds |
| Central Factory | 43,840.92 | 337,229,640.82 | 85,722,465.47 | 411,410,568.27 | 11,541,538.02 | 102.11% | 100.00% | 0.00 | 0.00 | 0.00% | Raised fund | |
| Total | 43,840.92 | 337,229,640.82 | 85,722,465.47 | 411,410,568.27 | 11,542,538.02 | 0.00 | 0.00 | 0.00% |
7.22.3 Provision for impairment of construction in progress in current period
□ Applicable ? N/A
7.22.4 Impairment testing of projects under construction
□ Applicable ? N/A
7.22.5 Construction materials
□ Applicable ? N/A
7.23 Productive biological assets
□ Applicable ? N/A
7.24 Oil and gas assets
□ Applicable ? N/A
7.25 Right-of-use assets
7.25.1 Right-of-use assets
Unit: CNY
| Item | Leased premises and buildings | Total |
| I. Original carrying value: | ||
| 1. Opening balance | 197,668,222.30 | 197,668,222.30 |
| 2. Increase in the current period | 74,696,857.15 | 74,696,857.15 |
| (1) Increase | 73,115,465.37 | 73,115,465.37 |
| (2) Increase due to business combination | 1,581,391.78 | 1,581,391.78 |
| 3. Decrease in the current period | 89,372,077.55 | 89,372,077.55 |
| (1) Termination of Lease | 89,372,077.55 | 89,372,077.55 |
| 4. Closing balance | 182,993,001.90 | 182,993,001.90 |
| II. Accumulated depreciation | ||
| 1. Opening balance | 88,137,554.95 | 88,137,554.95 |
| 2. Increase in the current period | 67,175,607.71 | 67,175,607.71 |
| (1) Provision | 67,175,607.71 | 67,175,607.71 |
| 3. Decrease in the current period | 73,032,775.69 | 73,032,775.69 |
| (1) Disposal | ||
| (2) Termination of lease | 73,032,775.69 | 73,032,775.69 |
| 4. Closing balance | 82,280,386.97 | 82,280,386.97 |
| III. Impairment provision | ||
| 1. Opening balance | ||
| 2. Increase amount in this period | ||
| (1) Provision | ||
| 3. Reduction amount in this period | ||
| (1) Disposal | ||
| 4. Closing balance | ||
| IV. Carrying amount | ||
| 1. Ending carrying amount | 100,712,614.93 | 100,712,614.93 |
| 2. Opening carrying value | 109,530,667.35 | 109,530,667.35 |
7.25.2 Impairment testing of right-of-use assets
□ Applicable ? N/A
7.26 Intangible assets
7.26.1 Details of intangible assets
Unit: CNY
| Item | Land use right | Patent rights | Non-patented technologies | Office Software | Trademark right | Total | |
| I. Original carrying value: | |||||||
| 1. Opening balance | 40,963,966.31 | 79,300.00 | 5,560,000.00 | 51,432,934.87 | 3,304,702.49 | 101,340,903.67 | |
| 2. Increase in the current period | 4,930,000.00 | 18,804,464.13 | 107,000,000.00 | 531,300.00 | 131,265,764.13 | ||
| (1) Purchase | 2,829,467.71 | 531,300.00 | 3,360,767.71 |
Note: At the end of the reporting period, the original value of intangible assets formed by the Company through internal R&Daccounts for about 18.95% of the original value of intangible assets.
7.26.2 Land use right failed to accomplish certification of property
□ Applicable ? N/A
7.26.3 Impairment testing of intangible assets
□ Applicable ? N/A
7.27 Goodwill
| (2) Internal R&D | 15,790,644.22 | 15,790,644.22 | |||||
| (3) Increase from business combination | 4,930,000.00 | 184,352.20 | 107,000,000.00 | 112,114,352.20 | |||
| 3. Decrease in the current period | |||||||
| (1) Disposal | |||||||
| 4. Closing balance | 40,963,966.31 | 79,300.00 | 10,490,000.00 | 70,237,399.00 | 110,304,702.49 | 531,300.00 | 232,606,667.80 |
| II. Accumulated amortization | |||||||
| 1. Opening balance | 4,053,000.24 | 64,421.00 | 1,853,333.33 | 15,683,635.72 | 1,741,815.98 | 23,396,206.27 | |
| 2. Increase in the current period | 1,024,094.52 | 7,929.96 | 2,913,055.55 | 11,847,783.67 | 300,104.19 | 8,855.00 | 16,101,822.89 |
| (1) Provision | 1,024,094.52 | 7,929.96 | 2,913,055.55 | 11,847,783.67 | 300,104.19 | 8,855.00 | 16,101,822.89 |
| 3. Decrease in the current period | |||||||
| (1) Disposal | |||||||
| 4. Closing balance | 5,077,094.76 | 72,350.96 | 4,766,388.88 | 27,531,419.39 | 2,041,920.17 | 8,855.00 | 39,498,029.16 |
| III. Impairment provision | |||||||
| 1. Opening balance | |||||||
| 2. Increase amount in this period | |||||||
| (1) Provision | |||||||
| 3. Reduction amount in this period | |||||||
| (1) Disposal | |||||||
| 4. Closing balance | |||||||
| IV. Carrying amount | |||||||
| 1. Ending carrying amount | 35,886,871.55 | 6,949.04 | 5,723,611.12 | 42,705,979.61 | 108,262,782.32 | 522,445.00 | 193,108,638.64 |
| 2. Opening carrying value | 36,910,966.07 | 14,879.00 | 3,706,666.67 | 35,749,299.15 | 1,562,886.51 | 77,944,697.40 |
7.27.1 Original book value of goodwill
unit: CNY
| Name of the invested unit or matters forming goodwill | Opening Balance | Increased in this issue | Decrease in this period | Ending balance |
| Formed by business merger | Dispose | |||
| Yuejiang Investment | 413,740,760.61 | 413,740,760.61 | ||
| total | 413,740,760.61 | 413,740,760.61 |
7.27.2 Goodwill impairment provision
□ Applicable ? N/A
7.27.3 Relevant information about the asset group or asset group combination where the goodwill is located
| name | The composition and basis of the asset group or portfolio to which it belongs | Operating segments and basis | Whether it is the same as previous year be consistent |
| Yuejiang Investment | The main cash inflows from the cosmetics business related to Yuejiang Investment are independent of other assets or asset groups. | not applicable | Not applicable, goodwill is newly added in this period |
Changes in asset group or asset group combination:
□ Applicable ? N/A
7.27.4 Specific determination method of recoverable amount
Net amount from recoverable amount based on fair value minus disposal costs:
□ Applicable ? N/A
Recoverable amount based on the present value of expected future cash flows:
? Applicable □ N/A
Unit: CNY10,000
| Item | Book value | Recoverable amount | Impairment amount | The number of years in the forecast period | Key Parameters for the Forecast Period | Key Parameters of Stable Phase | Basis for determining the key parameters of the stable period |
| Yuejiang Investment | 94,929.26 | 113,200.00 | 5 years | During the forecast period, the revenue growth rate is 59.35%-11.15%, the gross profit margin is 62%, and the | The revenue growth rate in the stable period is 0%, the gross profit margin is 62%, and the pre-tax discount rate | Revenue growth rate: Management determines the revenue growth rate during the forecast period based on historical experience and forecasts of market development. Revenue in the stable period refers to the level at the end of the forecast period, with a |
pre-taxdiscount rate is
12.42%.
| pre-tax discount rate is 12.42%. | is 12.42%. | growth rate of 0; Budgeted gross profit margin: Management determines the revenue growth rate based on the year before the budget year. Determine based on the average gross profit margin, taking into account future market and budget conditions; Discount rate: The discount rate adopted is a pre-tax discount rate that reflects the specific risks of the relevant asset group. | |||||
| Total | 94,929.26 | 113,200.00 |
Reasons for the obvious inconsistency between the aforementioned information and the information used in impairment testing inprevious years or external information:
□ Applicable ? N/A
Reasons for the discrepancy between the information used in the company's impairment testing in previous years and the actualsituation of that year:
□ Applicable ? N/A
7.27.5 Completion of performance commitments and corresponding impairment of goodwill
There is a performance commitment when goodwill is formed and the reporting period or the previous period of the reportingperiod is within the performance commitment period
? Applicable □ N/A
Unit: CNY10,000
| project | Completion of performance commitments | Goodwill impairment amount | ||||||
| This period | Previous period | This period | Previous period | |||||
| promise performance | actual performance | Completion rate | promise performance | actual performance | Completion rate | |||
| Yuejiang Investment | 5,000.00 | 4,310.22 | 86.20% | |||||
Other note: None.
7.28 Long-term deferred expenses
Unit: CNY
| Item | Opening balance | Increase in the current period | Current amortization amount | Other increases | Ending balance |
| Renovation costs | 66,734,195.17 | 62,568,615.74 | -431,294.24 | 37,079,077.73 | 92,655,027.42 |
| Other | 307,389.22 | -472,176.43 | 116,948.23 | 662,617.42 | |
| Total | 66,734,195.17 | 62,876,004.96 | -903,470.67 | 37,196,025.96 | 93,317,644.84 |
Other note: None.
7.29 Deferred income tax assets/Deferred income tax liabilities
7.29.1 Deferred income tax assets not offset
Unit: CNY
| Item | Ending balance | Opening balance | ||
| Deductible temporary difference | Deferred income tax assets | Deductible temporary difference | Deferred income tax assets | |
| Deductible losses | 196,374,355.95 | 48,706,314.79 | 90,582,869.88 | 22,645,717.51 |
| Lease liability | 105,242,787.71 | 18,858,727.39 | 113,361,257.32 | 20,666,573.23 |
| Government subsidies recognized as deferred income | 82,862,738.40 | 19,324,059.34 | 55,574,589.18 | 13,446,564.19 |
| Credit impairment loss | 34,266,427.95 | 7,680,053.55 | 19,518,059.73 | 4,269,349.65 |
| Unredeemed sales points, estimated return losses, etc. | 29,424,526.15 | 5,038,733.11 | 34,918,299.17 | 6,356,978.12 |
| Asset impairment provision loss | 24,589,713.75 | 3,768,688.38 | 20,263,153.73 | 3,039,473.06 |
| Changes in fair value of financial assets | 23,093,719.84 | 5,718,412.26 | ||
| Unrealized profits from insider transactions | 6,438,082.28 | 1,429,338.11 | 6,858,248.10 | 1,476,791.61 |
| Total | 502,292,352.03 | 110,524,326.93 | 341,076,477.11 | 71,901,447.37 |
7.29.2 Deferred income tax liabilities not offset
Unit: CNY
| Item | Ending balance | Opening balance | ||
| Taxable temporary difference | Deferred tax liabilities | Taxable temporary difference | Deferred tax liabilities | |
| Assets evaluation appreciation in the business combination not under the same control | 125,482,574.12 | 31,312,057.77 | 4,158,110.28 | 1,039,527.57 |
| Right-of-use assets | 100,496,553.54 | 18,155,270.15 | 109,530,667.35 | 20,092,913.24 |
| Accelerated depreciation of fixed assets | 40,600,232.01 | 6,571,587.57 | 40,032,709.94 | 6,004,906.49 |
| Changes in fair value of financial assets | 11,132,123.27 | 1,806,618.49 | 5,277,289.84 | 1,010,327.24 |
| Total | 277,711,482.94 | 57,845,533.98 | 158,998,777.41 | 28,147,674.54 |
7.29.3 Deferred tax assets or liabilities presented in net amount after being offset
Unit: CNY
| Item | Ending mutual offset amount between deferred income tax assets and liabilities | Ending balance of deferred income tax assets or liabilities after offset | Mutual set-off amount of deferred income tax assets and liabilities at the period-begin | Beginning balance of deferred income tax assets or liabilities after off-set |
| Deferred income tax assets | 17,393,076.48 | 93,131,250.45 | 19,782,844.11 | 52,118,603.26 |
| Deferred tax liabilities | 17,393,076.48 | 40,452,457.50 | 19,782,844.11 | 8,364,830.43 |
7.29.4 Details of unrecognized deferred tax assets
□ Applicable ? N/A
7.29.5 Deductible loss of unrecognized deferred tax assets will be due in the following years
□ Applicable ? N/A
7.30 Other non-current assets
Unit: CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Provision for Impairment | Carrying value | Book balance | Provision for Impairment | Carrying value | |
| Prepayments for acquisition and construction of fixed assets and construction in progress | 28,524,954.53 | 28,524,954.53 | 30,178,102.34 | 30,178,102.34 | ||
| Prepayment for purchase of intangible assets | 46,906,466.21 | 46,906,466.21 | 19,977,568.43 | 19,977,568.43 | ||
| Total | 75,431,420.74 | 75,431,420.74 | 50,155,670.77 | 50,155,670.77 | ||
Other note: None.
7.31 Assets with restricted ownership or use rights
Unit: CNY
| Item | Ending balance | Opening balance | ||||||
| Book balance | Book value | Type of restriction | Description | Book balance | Book value | Type of restriction | Description | |
| Money funds | 17,578,117.80 | 17,578,117.80 | Freeze | Bank acceptance bill deposit, letter of guarantee deposit, ETC deposit | 73,603,013.84 | 73,603,013.84 | Freeze | Bank deposits, bank acceptance bill deposits, letter of guarantee deposits and ETC deposits intended to be used to purchase entrusted financial products with restricted uses at the end of the reporting period |
| Receivables financing | 17,311,417.39 | 17,311,417.39 | Pledge | Note pool pledge | 37,064,070.53 | 37,064,070.53 | Pledge | Note pool pledge |
| Total | 34,889,535.19 | 34,889,535.19 | 110,667,084.37 | 110,667,084.37 | ||||
Other note: None.
7.32 Short-term borrowings
7.32.1 Classification of Short-term Loans
Unit: CNY
| Item | Ending balance | Opening balance |
| Credit loan | 100,000,000.00 | |
| Credit garanteed | 3,816,588.60 | |
| Total | 103,816,588.60 |
Note on the classification of short-term borrowings: At the end of the reporting period, we determined the categories ofborrowings based on the methods or conditions for obtaining short-term financing from the bank.
7.32.2 Overdue short-term borrowings that have not been repaid
□ Applicable ? N/A
7.33 Financial liabilities held for trading
□ Applicable ? N/A
7.34 Derivative financial liabilities
□ Applicable ? N/A
7.35 Notes payable
Unit: CNY
| Category | Ending balance | Opening balance |
| Trade acceptance draft | 67,562,710.23 | 61,550,650.47 |
| Total | 67,562,710.23 | 61,550,650.47 |
Note: At the end of the reporting period, we had no notes payable due but unpaid.
7.36 Accounts payable
7.36.1 Presentation of accounts payable
Unit: CNY
| Item | Ending balance | Opening balance |
| Accounts payable | 334,370,604.40 | 310,822,793.59 |
| Total | 334,370,604.40 | 310,822,793.59 |
7.36.2 Significant payables with the aging over 1 year
□ Applicable ? N/A
7.37 Other payables
Unit: CNY
Item
| Item | Ending balance | Opening balance |
| Dividends payable | 4,305.04 | 1,171,873.24 |
| Other payables | 449,277,890.12 | 271,161,951.15 |
| Total | 449,282,195.16 | 272,333,824.39 |
7.37.1 Interests payable
□ Applicable ? N/A
7.37.2 Dividends payable
Unit: CNY
| Item | Ending balance | Opening balance |
| Common stock dividends payable to minority shareholders of subsidiaries | 4,305.04 | 1,171,873.24 |
| Total | 4,305.04 | 1,171,873.24 |
Other note (including significant dividends payable unpaid for over 1 year, and the reason for failure of payment shall bedisclosed): No.
7.37.3 Other payables
1) Presentation of other payables by nature
Unit: CNY
| Item | Ending balance | Opening balance |
| Expenses payable | 339,375,044.92 | 200,765,806.28 |
| Project and equipment amount payable | 101,391,933.50 | 66,663,692.73 |
| Margin payable and deposit payable | 8,510,911.70 | 3,732,452.14 |
| Total | 449,277,890.12 | 271,161,951.15 |
2) Other payables with significant amount and age of over 1 year
□ Applicable ? N/A
3) Other payables with top five closing balances by counterparty
| Company | Nature of payment | Ending balance | Proportion to the total closing balance of other receivables |
| Company 1 | Project and equipment amount payable | 43,039,337.00 | 9.58% |
| Company 2 | Expenses payable | 33,695,667.24 | 7.50% |
| Company 3 | Expenses payable | 22,500,000.00 | 5.01% |
| Company 4 | Expenses payable | 21,179,091.00 | 4.71% |
| Company 5 | Expenses payable | 18,700,197.16 | 4.16% |
| Total | 139,114,292.40 | 30.96% |
7.38 Advances from customers
□ Applicable ? N/A
7.39 Contract liabilities
Unit: CNY
| Item | Ending balance | Opening balance |
Sales rebate and unredeemed points
| Sales rebate and unredeemed points | 31,485,888.29 | 34,791,182.51 |
| Advances from customers | 18,567,750.39 | 23,324,462.98 |
| Total | 50,053,638.68 | 58,115,645.49 |
Significant contract liabilities aged more than 1 year:
□ Applicable ? N/A
Amounts and reasons for significant changes in book value during the reporting period:
□ Applicable ? N/A
7.40 Employee compensation payable
7.40.1 Presentation of employee compensation payable
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Short-term employee benefits | 101,319,918.13 | 675,392,711.29 | 674,344,603.67 | 102,368,025.75 |
| 2. Post-employment benefits- defined contribution plans | 3,016,672.97 | 58,532,816.96 | 57,464,752.13 | 4,084,737.80 |
| 3. Dismissal benefits | 9,036,542.26 | 9,036,542.26 | ||
| Total | 104,336,591.10 | 742,962,070.51 | 740,845,898.06 | 106,452,763.55 |
7.40.2 Presentation of short-term salaries
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| 1. Wages, bonuses, allowances and subsidies | 98,475,727.42 | 566,402,976.33 | 566,234,564.76 | 98,644,138.99 |
| 2. Employee services and benefits | 41,763,927.40 | 41,763,927.40 | ||
| 3. Social insurance premiums | 1,852,274.71 | 37,360,851.84 | 36,736,981.79 | 2,476,144.76 |
| Including: medical insurance premiums | 1,813,993.13 | 35,839,237.51 | 35,305,985.19 | 2,347,245.45 |
| Work-related injury insurance premiums | 38,281.58 | 1,113,108.40 | 1,093,969.20 | 57,420.78 |
| Maternity insurance premiums | 408,505.93 | 337,027.40 | 71,478.53 | |
| 4. Housing accumulation fund | 991,916.00 | 24,282,601.73 | 24,026,775.73 | 1,247,742.00 |
| 5. Trade union funds and staff education funds | 5,582,353.99 | 5,582,353.99 | ||
| Total | 101,319,918.13 | 675,392,711.29 | 674,344,603.67 | 102,368,025.75 |
7.40.3 Presentation of defined contribution plan
Unit: CNY
| Item | Opening balance | Increase in the current | Decrease in the current | Ending balance |
period
| period | period | |||
| 1. Basic endowment insurance | 2,920,878.18 | 56,402,189.85 | 55,368,772.40 | 3,954,295.63 |
| 2. Unemployment insurance | 95,794.79 | 2,130,627.11 | 2,095,979.73 | 130,442.17 |
| Total | 3,016,672.97 | 58,532,816.96 | 57,464,752.13 | 4,084,737.80 |
Other note: None.
7.41Taxes payable
Unit: CNY
| Item | Ending balance | Opening balance |
| Enterprise income tax | 105,223,136.73 | 109,692,780.07 |
| VAT | 19,393,011.36 | 4,859,366.39 |
| Individual income tax | 2,794,864.10 | 2,763,480.53 |
| Consumption Tax | 808,944.25 | 372,522.21 |
| City maintenance and construction tax | 431,412.87 | 300,502.26 |
| Educational surcharge | 385,571.88 | 282,109.93 |
| Other taxes | 3,080,824.27 | 1,139,624.51 |
| Total | 132,117,765.46 | 119,410,385.90 |
Other note: None.
7.42 Held-for-sale liabilities
□ Applicable ? N/A
7.43 Non-current liabilities due within one year
Unit: CNY
| Item | Ending balance | Opening balance |
| Lease liabilities due within one year | 42,102,294.00 | 62,415,988.59 |
| Total | 42,102,294.00 | 62,415,988.59 |
Other note: None.
7.44 Other current liabilities
Unit: CNY
| Item | Ending balance | Opening balance |
| Payments of sales return payable | 3,602,963.86 | 1,869,058.68 |
| Taxes of items to be written off | 1,852,501.91 | 1,011,680.31 |
| Total | 5,455,465.77 | 2,880,738.99 |
Other note: None.
7.45 Long-term borrowings
7.45.1 Classification of Long-term borrowings
单位：元
| Item | Ending balance | Opening balance |
Credit garanteed
| Credit garanteed | 4,700,000.00 | |
| Total | 4,700,000.00 |
Note on the classification of short-term borrowings: At the end of the reporting period, we determined the categories ofborrowings based on the methods or conditions for obtaining short-term financing from the bank.
7.46 Bonds payable
□ Applicable ? N/A
7.47 Lease liabilities
Unit: CNY
| Item | Ending balance | Opening balance |
| Lease liabilities | 105,385,826.61 | 113,361,257.32 |
| Less: current portion of lease liabilities | 42,102,294.00 | 62,415,988.59 |
| Total | 63,283,532.61 | 50,945,268.73 |
Other note: None.
7.48 Long-term payables
Unit: CNY
| Item | Ending balance | Opening balance |
| Special payables | 8,600,000.00 | 10,500,000.00 |
| Total | 8,600,000.00 | 10,500,000.00 |
7.48.1 Long-term payables by nature of payment
| Item | Ending balance | Opening balance |
| Yunnan Provincial Characteristic Plant Laboratory Special Fund | 8,600,000.00 | 10,500,000.00 |
Other note: None.
7.48.2 Special payables
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance | Cause of formation |
| Special funds for Yunnan Characteristic Plant Laboratory | 10,500,000.00 | 100,000,000.00 | 101,900,000.00 | 8,600,000.00 | |
| Total | 10,500,000.00 | 100,000,000.00 | 101,900,000.00 | 8,600,000.00 |
Other note: None.
7.49 Long-term employee benefits payable
□ Applicable ? N/A
7.50 Estimated liabilities
□ Applicable ? N/A
7.51 Deferred income
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance | Cause of formation |
| Government subsidies | 55,574,589.18 | 85,460,808.00 | 58,172,658.78 | 82,862,738.40 | |
| Total | 55,574,589.18 | 85,460,808.00 | 58,172,658.78 | 82,862,738.40 |
Other note: None.
7.52 Other non-current liabilities
□ Applicable ? N/A
7.53 Share capital
Unit: CNY
| Opening balance | Increase or decrease (+,-) | Ending balance | |||||
| Issuance of new shares | Bonus shares | Conversion of the reserve funds into shares | Miscellaneo us | Subtotal | |||
| Total shares | 423,600,000.00 | 423,600,000.00 | |||||
Other note: None.
7.54 Other equity instruments
□ Applicable ? N/A
7.55 Capital reserves
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| Capital premium (share premium) | 2,846,004,685.04 | 2,846,004,685.04 | ||
| Total | 2,846,004,685.04 | 2,846,004,685.04 |
Other note (including notes about changes and causes thereof in movements in the current period): None.
7.56 Treasury shares
单位：元
| Item | Opening balance | Increase in the current period | Decrease in the current | Ending balance |
period
| period | ||||
| Common stock | 109,838,205.82 | 109,838,205.82 | ||
| Total | 109,838,205.82 | 109,838,205.82 |
Other explanations, including changes in increases and decreases in the current period and explanations of reasons for changes:
We held the 10th and 12th meetings of the second board of directors on August 30 and October 27, 2023 respectively, andreviewed and approved the “Proposal on the Plan for Repurchasing the Company's Shares” and “Adjustments to the Repurchase Plan”.“Proposal on the Company’s Share Plan” agrees that Botanee will use its own funds to repurchase the company's shares throughcentralized bidding transactions. All the repurchased shares will be used to implement the equity incentive plan or employee stockownership plan. The total amount of funds for this repurchase of shares is not low. Within CNY200 million (inclusive) and notexceeding CNY300 million (inclusive).
As of December 31, 2023, we have repurchased 1,539,500 shares of the company through centralized bidding transactions througha special securities account for share repurchases, accounting for 0.3634% of our current total share capital. The highest transactionprice is 78.00 CNY/share, and the lowest transaction price is 63.99 CNY/share, and the total amount paid is CNY109,838,205.82(excluding transaction fees).
7.57 Other comprehensive income
Unit: CNY
| Item | Opening balance | Amount incurred in the current period | Ending balance | |||||
| Amount | Less: | Less: | Less: | Attributab | Attribu | |||
| incurred before income tax in the current period | Amount included in other comprehens ive income in the previous period and transferred to profit and loss in the current period | Amount included in other comprehens ive income in the previous period and transferred to retained income in the current period | income tax expenses | leto the parent company - net of income tax | table to the minorit y shareh olders - net of income tax | |||
| II. Other comprehensive incomes to be reclassified into profits or losses | -205.63 | -78,932.64 | 47,359.12 | -126,291.76 | 47,153.49 | |||
| Differences arising from translation of foreign currency financial statements | -205.63 | -78,932.64 | 47,359.12 | -126,291.76 | 47,153.49 | |||
| Total other comprehensive income | -205.63 | -78,932.64 | 47,359.12 | -126,291.76 | 47,153.49 | |||
Other note (including effective part of cash flow hedging profit and loss converted into adjusted amount transferred toinitially recognized amount of hedged item): None.
7.58 Special reserves
□ Applicable ? N/A
7.59 Surplus reserves
Unit: CNY
| Item | Opening balance | Increase in the current period | Decrease in the current period | Ending balance |
| Statutory surplus reserves | 211,081,299.10 | 211,081,299.10 | ||
| Total | 211,081,299.10 | 211,081,299.10 |
Notes on surplus reserves (including explanations about changes and causes thereof in increase/decrease in the current period):
According to Article 166 of the Company Law of the People's Republic of China, if the cumulative amount of the provident fund ismore than 50% of a company’s registered capital, it may no longer be withdrawn. During the reporting period, Botanee (parentcompany) met the above requirements, no statutory surplus reserve fund was accrued.
7.60 Undistributed profits
Unit: CNY
| Item | Current period | Previous period |
| Undistributed profits at the end of the previous period before adjustment | 2,071,587,040.20 | 1,329,978,260.55 |
| Undistributed profits at the beginning of the period after adjustment | 597,391.45 | 494,270.86 |
| Add: Net profit attributable to owners of the parent company during the period | 2,072,184,431.65 | 1,330,472,531.41 |
| Less: Statutory surplus reserves appropriated | 756,795,007.56 | 1,051,331,949.57 |
| Ordinary share dividends payable | 55,460,049.33 | |
| Undistributed profits at the end of the period | 338,880,000.00 | 254,160,000.00 |
Breakdown of adjustments to undistributed profits at the beginning of the period:
(1) The amount that will affect the undistributed profit at the beginning of the period due to retroactive adjustment of ASBE andits relevant new regulations is CNY597,391.45.
(2) Due to accounting policy alternation, the affected retained earnings at the beginning of the period was CNY0.00.
(3) The amount that will affect the undistributed profit at the beginning of the year due to correction of major accounting error isCNY0.00.
(4) The amount that will affect the undistributed profit at the beginning of the year due to change of consolidation scope as aresult of common control is CNY0.00.
(5) Amount of the undistributed profit at the beginning of the period that will be affected due to total of other adjustments isCNY0.00.
7.61 Revenue and cost of sales
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period | ||
| Revenues | Costs | Revenues | Costs | |
Main business
| Main business | 5,501,620,351.02 | 1,432,514,965.73 | 4,997,756,008.94 | 1,234,042,922.29 |
| Other business | 20,547,911.98 | 8,877,464.88 | 16,117,720.50 | 9,004,032.32 |
| Total | 5,522,168,263.00 | 1,441,392,430.61 | 5,013,873,729.44 | 1,243,046,954.61 |
Audited net profit before and after deducting non-recurring gains and losses (whichever is lower, negative value or not):
□ Applicable ? N/A
Relevant information of revenue and cost:
Unit: CNY
| Contract classification | Daily chemical industry | Services and others | Total | |||
| Revenue | Cost | Revenue | Cost | Revenue | Cost | |
| By type of product | ||||||
| including | ||||||
| Skin care products | 4,869,891,463.93 | 1,282,695,510.54 | 4,869,891,463.93 | 1,282,695,510.54 | ||
| Medical Devices | 463,107,605.63 | 87,399,714.92 | 463,107,605.63 | 87,399,714.92 | ||
| Cosmetics | 168,621,281.46 | 62,419,740.27 | 168,621,281.46 | 62,419,740.27 | ||
| Services and others | 20,547,911.98 | 8,877,464.88 | 20,547,911.98 | 8,877,464.88 | ||
| Classification by business area | ||||||
| Including: | ||||||
| Within Chinese Mainland | 5,489,610,607.53 | 1,428,448,675.25 | 20,547,911.98 | 8,877,464.88 | 5,510,158,519.51 | 1,437,326,140.13 |
| Outside Chinese Mainland | 12,009,743.49 | 4,066,290.48 | 12,009,743.49 | 4,066,290.48 | ||
| Type of market or customer | ||||||
| Including: | ||||||
| Winona | 5,192,038,641.78 | 1,324,194,060.33 | 5,192,038,641.78 | 1,324,194,060.33 | ||
| Winona Baby | 149,647,517.83 | 39,148,947.89 | 149,647,517.83 | 39,148,947.89 | ||
| AOXMED | 36,187,062.67 | 8,618,424.13 | 36,187,062.67 | 8,618,424.13 | ||
| Za | 89,871,041.72 | 36,828,136.44 | 89,871,041.72 | 36,828,136.44 | ||
| PURE&MILD | 14,465,617.96 | 7,418,138.99 | 14,465,617.96 | 7,418,138.99 | ||
| Miscellaneous | 19,410,469.06 | 16,307,257.95 | 20,547,911.98 | 8,877,464.88 | 39,958,381.04 | 25,184,722.83 |
| Contract type | ||||||
| Including: | ||||||
| Self-operation | 3,235,051,572.87 | 904,446,283.88 | 20,547,911.98 | 8,877,464.88 | 3,255,599,484.85 | 913,323,748.76 |
| Distribution | 2,266,568,778.15 | 528,068,681.85 | 2,266,568,778.15 | 528,068,681.85 | ||
| Classified by the time of goods transfer | ||||||
| Including: | ||||||
| Revenue recognized at a certain time point | 5,501,620,351.02 | 1,432,514,965.73 | 5,501,620,351.02 | 1,432,514,965.73 | ||
| Revenue recognized in a certain period | 20,547,911.98 | 8,877,464.88 | 20,547,911.98 | 8,877,464.88 | ||
| Classification of contract term | ||||||
| Including: | ||||||
| Expected to be completed within one year | 5,501,620,351.02 | 1,432,514,965.73 | 20,547,911.98 | 8,877,464.88 | 5,522,168,263.00 | 1,441,392,430.61 |
| Classification by sales channel | ||||||
| Including: | ||||||
| Online channel product | 3,552,186,453.05 | 1,021,681,010.35 | 3,552,186,453.05 | 1,021,681,010.35 | ||
sales
| sales | ||||||
| OMO channel product sales | 522,685,816.23 | 128,822,811.73 | 522,685,816.23 | 128,822,811.73 | ||
| Offline channel product sales | 1,426,748,081.74 | 282,011,143.65 | 1,426,748,081.74 | 282,011,143.65 | ||
| Offline channel services and others | 20,547,911.98 | 8,877,464.88 | 20,547,911.98 | 8,877,464.88 | ||
| Total | 5,501,620,351.02 | 1,432,514,965.73 | 20,547,911.98 | 5,522,168,263.00 | 1,441,392,430.61 |
Information related to performance obligations:The Company has delivered the goods to the customer according to the agreeddelivery method. When the customer obtains the control right of the goods agreed in the contract, the Company recognizes the revenuewhen completing the contract performance obligations.
Information related to variable consideration in the contract:
□ Applicable ? N/A
Major contract changes or major transaction price adjustments:
? Applicable □ N/A
7.62 Taxes and surcharges
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| City maintenance and construction tax | 28,201,329.84 | 24,094,924.40 |
| Educational surcharge | 21,398,699.77 | 18,413,159.71 |
| Consumption Tax | 9,929,897.04 | 9,090,095.18 |
| Other taxes and fees | 5,654,475.80 | 4,501,972.14 |
| Total | 65,184,402.45 | 56,100,151.43 |
7.63 Management expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Personnel costs | 176,545,169.27 | 148,683,323.45 |
| Consulting service fees | 87,949,222.78 | 55,021,387.42 |
| Depreciation and amortization | 60,074,882.63 | 41,709,399.69 |
| Office and material expenses | 30,886,726.57 | 31,350,045.70 |
| Hospitality expenses | 9,674,801.42 | 9,564,882.22 |
| Travel allowance | 9,695,430.01 | 4,401,120.20 |
| Miscellaneous | 38,376,439.35 | 52,314,096.67 |
| Total | 413,202,672.03 | 343,044,255.35 |
Other note: None.
7.64 Selling expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Personnel costs | 417,741,433.95 | 301,645,844.20 |
Channel and advertising expenses
| Channel and advertising expenses | 1,922,443,535.15 | 1,534,412,005.90 |
| Warehousing and auxiliary expenses | 114,252,470.63 | 107,398,471.50 |
| Miscellaneous | 155,239,216.76 | 104,424,433.49 |
| Total | 2,609,676,656.49 | 2,047,880,755.09 |
Other note: None.
7.65 R&D expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Personnel costs | 114,473,350.07 | 100,623,562.85 |
| Material costs | 83,712,034.75 | 69,841,389.02 |
| Outsourcing R&D and testing expenses | 62,522,947.05 | 48,837,376.60 |
| Depreciation and amortization | 19,894,269.23 | 16,525,054.39 |
| Miscellaneous | 18,214,707.01 | 18,871,058.51 |
| Total | 298,817,308.11 | 254,698,441.37 |
Other note: None.
7.66 Financial expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Interest expenses | 4,966,901.69 | 4,753,216.51 |
| Less: interest income | 28,548,283.32 | 20,299,817.23 |
| Handling charge of financial institutions | 1,552,103.74 | 1,211,281.93 |
| Exchange loss | 724,669.09 | -25,733.12 |
| Total | -21,304,608.80 | -14,361,051.91 |
Other note: None.
7.67 Other income
Unit: CNY
| Sources of other incomes | Amount incurred in the current period | Amount incurred in the previous period |
| Government subsidies | 131,682,124.63 | 70,486,674.48 |
| Additional deduction for VAT input tax | 16,269,700.55 | 910,643.35 |
| Miscellaneous | 1,468,818.30 | 482,025.64 |
| Total | 149,420,643.48 | 71,879,343.47 |
7.68 Gain from Net Exposure to Hedging
□ Applicable ? N/A
7.69 Gain from Changes in Fair Value
Unit: CNY
| Source of gain from changes in fair value | Amount incurred in the current period | Amount incurred in the previous period |
| Financial assets held for trading | -17,238,886.41 | -5,519,803.92 |
| Total | -17,238,886.41 | -5,519,803.92 |
Other note: None.
7.70 Investment Income
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Income from entrusted financial management of cash management | 54,561,672.18 | 78,007,914.79 |
| Long-term equity investment incomes calculated at equity method | 9,705,819.45 | 2,570,038.70 |
| Dividend income from other non-current financial assets during the holding period | 94,756.71 | |
| Total | 64,362,248.34 | 80,577,953.49 |
Other note: None.
7.71 Credit Impairment Losses
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Bad debt loss for receivables | -12,973,279.13 | 720,648.86 |
| Bad debt losses on notes receivable | -1,289,585.50 | |
| Total | -14,262,864.63 | 720,648.86 |
Other note: None.
7.72 Asset Impairment Losses
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Inventory impairment loss and contract performance cost impairment loss | -20,197,131.69 | -18,985,622.92 |
| Total | -20,197,131.69 | -18,985,622.92 |
Other note: None.
7.73 Gain From Disposal of Assets
Unit: CNY
| Sources of income from asset disposal | Amount incurred in the current period | Amount incurred in the previous period |
| Gain from disposal of fixed assets | 486,279.15 | -27,685.55 |
| Revenue from disposal of right-of-use assets | 204,005.23 |
7.74 Non-operating Revenues
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in non- recurring gains and losses of the current period |
| Income from compensation and confiscation | 1,526,075.85 | 1,551,132.60 | 1,526,075.85 |
| Miscellaneous | 613,024.59 | 1,399,409.98 | 613,024.59 |
| Government subsidies | 6,000,000.00 | ||
| Total | 2,139,100.44 | 8,950,542.58 | 2,139,100.44 |
Other note: None.
7.75 Non-operating Expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in non-recurring gains and losses of the current period |
| External donation | 7,907,436.91 | 5,559,725.61 | 7,907,436.91 |
| Miscellaneous | 3,386,810.08 | 1,635,248.66 | 3,386,810.08 |
| Total | 11,294,246.99 | 7,194,974.27 | 11,294,246.99 |
Other note: None.
7.76 Income tax expenses
(1) List of income tax expenses
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Current income tax expenses | 143,699,474.83 | 192,447,340.85 |
| Deferred income tax expenses | -34,092,682.18 | -29,114,850.72 |
| Total | 109,606,792.65 | 163,332,490.13 |
(2) Adjustment process of accounting profits and income tax expenses
Unit: CNY
| Item | Amount incurred in the current period |
| Total profit | 868,818,549.03 |
| Income tax expenses based on statutory/applicable tax rate | 130,322,782.35 |
| Effects of different tax rates applied to subsidiaries | -6,625,500.83 |
| Effect of nondeductible cost, expense and loss | 24,214,003.85 |
| Weighted deduction of R&D expenses | -35,750,074.22 |
| Profit or loss of joint ventures accounted for using the equity method | -2,554,418.50 |
| Income tax expenses | 109,606,792.65 |
Other note: None.
7.77 Other comprehensive income
For details, please refer to 7.57 Other Comprehensive Income” in “7. Notes to Items in Consolidated Financial Statement” underSection X of this report.
7.78 Items in the statement of cash flows
7.78.1 Cash related to operating activities
Cash received relating to other operating activities:
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Various government subsidies and incentives received | 79,982,256.96 | 51,127,473.72 |
| Special payables received | 100,000,000.00 | 50,000,000.00 |
| Security deposits and deposits | 5,426,178.69 | 3,661,375.25 |
| Miscellaneous | 30,850,679.20 | 20,925,201.87 |
| Total | 216,259,114.85 | 125,714,050.84 |
Notes for cash received from other operating activities: None.
Cash paid relating to other operating activities:
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Payment of various expenses | 2,212,363,396.43 | 1,855,397,446.85 |
| Payment of special payables | 16,449,192.00 | 14,865,000.00 |
| Payment of various deposits and security deposits | 8,605,056.84 | 9,778,529.93 |
| Total | 2,237,417,645.27 | 1,880,040,976.78 |
Note for cash paid relating to other operating activities: None.
7.78.2 Cash related to investing activities
Other cash received relating to investment activities:
□ Applicable ? N/A
Significant cash received related to investing activities:
Unit: CNY
| Item | Amount incurred this period | Amount incurred last period |
| Entrusted cash management to recover the principal and investment income at maturity | 5,152,768,856.37 | 7,140,808,914.79 |
| Total | 5,152,768,856.37 | 7,140,808,914.79 |
Note for cash paid relating to other operating activities: None.
Cash paid relating to other investing activities:
□ Applicable ? N/A
Significant cash payments related to investing activities:
Unit: CNY
Item
| Item | Amount incurred this period | Amount incurred last period |
| Cash paid for purchasing entrusted cash management | 4,699,498,500.00 | 6,720,927,811.10 |
| Payment for merger and acquisition of enterprises not under common control | 493,498,507.88 | 7,474,528.53 |
| Cash paid for the purchase and construction of long-term assets such as fixed assets and intangible assets | 274,275,480.81 | 353,420,863.88 |
| Payment for equity investment in associates | 119,533,333.00 | 80,205,960.00 |
| Payment for investments in other non-current financial assets | 87,000,000.00 | |
| Total | 5,673,805,821.69 | 7,162,029,163.51 |
Note for cash paid relating to other operating activities: None.
7.78.3 Cash Related to Financing Activities
Other cash received relating to financing activities:
□ Applicable ? N/A
Cash paid relating to other financing activities:
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Payment for repurchase of A shares ordinary shares | 109,838,205.82 | |
| Payment of leased premises and buildings | 76,442,754.36 | 64,719,978.70 |
| Return investment from minority shareholders of subsidiaries | 17,500,000.00 | |
| Total | 203,780,960.18 | 64,719,978.70 |
Note for other paid cash related to financial activities: None.
Changes in liabilities arising from financing activities：
? Applicable □ N/A
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Ending balance | ||
| Cash changes | Non-cash changes | Cash changes | Non-cash changes | |||
| Short-term loan | 105,450,000.00 | 20,697,730.12 | 22,347,730.12 | 103,800,000.00 | ||
| Long term loan | 6,552,916.67 | 1,852,916.67 | 4,700,000.00 | |||
| Lease liabilities/non-current liabilities due within one year | 113,361,257.32 | 74,900,907.68 | 70,130,967.30 | 12,745,371.09 | 105,385,826.61 | |
| Total | 113,361,257.32 | 105,450,000.00 | 102,151,554.47 | 94,331,614.09 | 12,745,371.09 | 213,885,826.61 |
7.78.4 Instructions for presenting cash flows on a net basis
□ Applicable ? N/A
7.78.5 Major activities and financial impacts that do not involve current cash receipts and payments butaffect Botanee’s financial status or may affect its cash flow in the future
□ Applicable ? N/A
7.79 Supplementary information of the cash flow statement
7.79.1 Supplementary information of the cash flow statement
Unit: CNY
| Supplementary information | Amount for the current period | Amount in the previous period |
| 1. Reconciliation of net profit to cash flows from operating activities | ||
| Net profit | 1,050,416,368.38 | 864,062,453.99 |
| Add: provision for impairment of assets | 18,985,622.92 | 11,913,320.12 |
| Credit impairment loss | 25,819,197.63 | 13,851,699.16 |
| Depreciation of fixed assets, oil and gas assets, and productive biological assets | 56,682,693.62 | 38,873,022.15 |
| Depreciation of right-of-use assets | 10,323,691.93 | 5,805,110.63 |
| Amortization of intangible assets | 24,810,499.21 | 14,864,957.87 |
| Amortization of long-term deferred expenses | 112,591.36 | -516,716.70 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (income is listed with "-") | 40,689.02 | |
| Loss from scrapping of fixed assets (income is listed with "-") | 5,519,803.92 | - 10,797,093.76 |
| Loss from change in fair value (income is listed with "-") | 4,727,483.39 | 4,191,650.31 |
| Financial expenses (income is listed with "-") | -80,577,953.49 | - 18,830,359.81 |
| Investment losses (income is listed with "-") | -35,650,668.43 | - 1,860,954.26 |
| Decrease in deferred income tax assets (increases are indicated with "-") | 6,368,432.06 | 1,650,041.16 |
| Increase in deferred income tax liabilities (decreases are indicated with a “-” sign) | -214,147,770.09 | -221,433,616.06 |
| Decrease in inventory (increases are listed with "-") | -222,640,130.54 | -45,098,028.87 |
| Decrease in operating receivables (increases are indicated with a “-” sign) | 119,416,408.44 | 490,738,190.58 |
| Increase in operating payables (decreases are indicated with a “-” sign) | -720,648.86 | 5,265,985.88 |
| Credit impairment loss | 769,445,621.45 | 1,152,720,351.41 |
| Depreciation of fixed assets, depreciation of oil and gas assets, depreciation of productive biological assets | ||
| 2. Major investment and financing activities not relating to cash deposit and withdrawal | ||
| Conversion of debt into capital | ||
| Convertible corporate bonds due within one year | ||
| Financing leased fixed assets | ||
| 3. Net changes in cash and cash equivalents: | ||
| Closing balance of cash | 2,440,692,701.42 | 2,009,370,756.03 |
| Less: beginning balance of cash | 2,009,370,756.03 | 750,891,238.75 |
| Add: Ending balance of cash equivalents | ||
| Less: beginning balance of cash equivalents |
Net increase in cash and cash equivalents
| Net increase in cash and cash equivalents | 431,321,945.39 | 1,258,479,517.28 |
7.79.2 Net cash paid for acquisition of subsidiaries in the current period
Unit: CNY10,000
| Amount | |
| Cash or cash equivalents paid in the current period for business combinations in the current period: | 51,500.00 |
| Including | |
| Hunan Botanee | 150.00 |
| Hunan Elemei | 150.00 |
| Changsha Meluda | 150.00 |
| Yuejiang Investment | 51,050.00 |
| Less: cash and cash equivalents held by subsidiaries on acquisition date | 2,150.15 |
| Including: | |
| Hunan Botanee | 49.79 |
| Hunan Elemei | |
| Changsha Meluda | |
| Yuejiang Investment | 2,100.36 |
| Including: | |
| Net cash paid for acquisition of subsidiaries | 49,349.85 |
Other note: None.
7.79.3 Net Cash Received from Disposal of Subsidiaries in the Current Period
□ Applicable ? N/A
7.79.4 Composition of Cash and Cash Equivalents
Unit: CNY
| Item | Ending balance | Opening balance |
| I. Cash | 2,073,881,743.78 | 2,440,692,701.42 |
| Cash at bank available for payments at any time | 2,036,518,760.57 | 2,325,336,390.61 |
| Other cash at bank and on hand available for payment on demand | 37,362,983.21 | 115,356,310.81 |
| III. Closing balance of cash and cash equivalents | 2,073,881,743.78 | 2,440,692,701.42 |
7.79.5 Fund with Limited Scope of Use But Is Still Classified as Cash and Cash Equivalents
□ Applicable ? N/A
7.79.6 Monetary Funds other than Cash and Cash Equivalents
□ Applicable ? N/A
7.79.7 Other Major Events
□ Applicable ? N/A
7.80 Notes to Items in the Statement of Retained Earnings
Describe “other” and the amount of adjustments made to the closing balance of the previous year: None.
7.81 Foreign Currencies
7.81.1 Foreign Currencies
Unit: CNY
| Item | Ending balance | Exchange rate | Ending balance converted into CNY |
| Money market funds | 18,930,669.31 | ||
| Including: USD | 1,939,095.06 | 7.08 | 13,734,028.58 |
| EUR | |||
| HKD | 100,811.03 | 0.91 | 91,356.97 |
| SGD | 18,507.62 | 5.38 | 99,519.17 |
| JPY | 99,675,000.00 | 0.05 | 5,004,980.78 |
| THB | 500.00 | 0.21 | 103.68 |
| AUD | 140.28 | 4.85 | 680.13 |
| Accounts receivable | 13,619,271.72 | ||
| Including: USD | 310,179.39 | 7.08 | 2,196,907.57 |
| EUR | |||
| HKD | |||
| TWD | 49,542,562.70 | 0.23 | 11,422,364.15 |
| Long-term borrowings | |||
| Including: USD | |||
| EUR | |||
| HKD | |||
| Other accounts receivable | 95,206.93 | ||
| Including: HKD | 105,059.40 | 0.91 | 95,206.93 |
| Accounts payable | 5,708,055.71 | ||
| Including: HKD | 467,029.22 | 0.91 | 423,231.22 |
| SGD | 982,820.89 | 5.38 | 5,284,824.49 |
| Other accounts payable | 226,659.79 | ||
| Including: HKD | 57,434.79 | 0.91 | 52,048.56 |
| JPY | 3,475,346.00 | 0.05 | 174,507.55 |
| THB | 500.00 | 0.21 | 103.68 |
Other note: None.
7.81.2 Description of Overseas Business Entities (Including Important Overseas Business Entities) RegardingMain Business Location, Functional Currency, the Basis For Selection, and Reasons for Functional CurrencyChanges (If Any)
□ Applicable ? N/A
As of the end of the reporting period, Botanee had no significant overseas operating entities.
7.82 Lease
7.82.1 Botanee as the Lessee
? Applicable □ N/AVariable lease payments not included in lease liabilities:
□ Applicable ? N/A
Lease payments for simplified short-term leases or low-value assets? Applicable □ N/ADuring the reporting period, our payments for simplified short-term leases and low-value assets stood at CNY4,753,324.17.Sale and leaseback transactions
□ Applicable ? N/A
7.82.2 Botanee as the Lessor
Operating lease as lessor:
? Applicable □ N/A
Unit: CNY
| Item | Leasing income | Including: Income related to variable lease payments not included in lease receipts |
| Leasing of self-owned real estate | 867,847.45 | |
| Total | 867,847.45 |
Finance lease as lessor:
□ Applicable ? N/A
Undiscounted lease payments for each of the next five years:
□ Applicable ? N/A
Reconciliation of undiscounted lease receipts and net lease investment:
□ Applicable ? N/A
7.82.3 Recognizing financial lease sales profits and losses as a manufacturer or distributor
□ Applicable ? N/A
7.83 Miscellaneous
□ Applicable ? N/A
8. Research and Development Expenditures
Unit: CNY
| Item | Amount incurred this period | Amount incurred previous period |
| Staff costs | 114,472,358.04 | 101,226,944.16 |
| Material costs | 83,712,034.75 | 69,841,389.02 |
| Outsourced R&D and testing costs | 93,854,670.32 | 64,645,158.25 |
| Depreciation and amortization | 19,894,269.23 | 16,525,054.39 |
| Other | 23,503,618.68 | 25,976,142.26 |
| Total coasts | 335,436,951.02 | 278,214,688.08 |
| Including: expensed R&D expenditures | 298,817,308.11 | 254,698,441.37 |
| Capitalized R&D expenditures | 36,619,642.91 | 23,516,246.71 |
8.1 R&D projects eligible for capitalization
Unit: CNY
| Item | Opening balance | Increase in current period | Decrease in current period | Ending balance | ||
| Internal development expenditures | Other | Recognized as intangible assets | Transferred to current profit and loss | |||
| Software and system application projects | 19,180,368.43 | 36,619,642.91 | 8,893,545.13 | 46,906,466.21 | ||
| Total | 19,180,368.43 | 36,619,642.91 | 8,893,545.13 | 46,906,466.21 | ||
Significant capitalized R&D projects:
□ Applicable ? N/A
Impairment provision for development expenditures:
□ Applicable ? N/A
8.2 Important outsourced research projects
□ Applicable ? N/A
9 Changes in the Scope of Consolidation
9.1 Business combination not under common control
9.1.1 Business combinations not under common control in the current period
Unit: CNY10,000
| Name of acquiree | Acquisition date | Acquisition cost | Shareholding percentage | Acquisition method | Purchase date | Determination basis of purchase date | Income of the acquiree from the purchase date to the end of the period | Net profits of acquiree from the purchase date to the end of the period |
Hunan Botanee
| Hunan Botanee | Feb. 15, 2023 | 150.00 | 100.00% | Business combination not under common control | Feb. 15, 2023 | Transfer of control | 1,132,075.44 | 195,725.87 |
| Changsha Meluda | Jun. 14, 2023 | 150.00 | 100.00% | Business combination not under common control | Jun. 14, 2023 | Transfer of control | 19,801.98 | -294,559.01 |
| Hunan Elemei | Jun. 15, 2023 | 150.00 | 100.00% | Business combination not under common control | Jun. 15, 2023 | Transfer of control | 14,851.49 | -289,412.35 |
| Yuejiang Investment | Oct. 31, 2023 | 51,000.00 | 51.00% | Business combination not under common control | Oct. 31, 2023 | Transfer of control | 104,336,659.68 | 16,330,835.72 |
Other note: None.
9.1.2 Combination costs and goodwill
Unit: CNY10,000
| Combination cost | Hunan Botanee, Hunan Alemei, and Changsha Meluda | Yuejiang Investment |
| Cash | 450.00 | 51,000.00 |
| Total consolidated cost | 450.00 | 51,000.00 |
| Less: Fair value of net identifiable assets acquired | 468.04 | 9,625.92 |
| Amount of goodwill/consolidated cost less than the fair value of identifiable net assets acquired | -18.04 | 41,374.08 |
Method for determining the fair value of the merger cost: We value the assets and liabilities owned by each acquired company onthe acquisition date and based on industry experience. After full negotiation between the parties to the transaction, it was confirmedthat the transfer prices of 100% of the equity of Hunan Botanee, Changsha Meluda and Hunan Ailemei were CNY1.50 million,CNY1.50 million and CNY1.50 million respectively. The cost of acquiring 51% of the equity of Yuejiang Investment was CNY510million. The fair value of the identifiable net assets of Yuejiang Investment was evaluated by Shanghai Shenwei Asset Appraisal Co.,Ltd., which produced HSWPBZ (2024) No. XJ0011 report.Main reason for the formation of large amounts of goodwill: During the reporting period, we acquired 51% of the equity ofYuejiang Investment through a merger of enterprises not under common control. The merger cost was CNY510.0 million in cash, andthe fair value share of identifiable net assets obtained was CNY96.2592 million, which formed a goodwill of CNY413.7408 million.Other note: None.
9.1.3 Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: CNY 10,000
| Hunan Botanee, Hunan Alemei, and Changsha Meluda | Yuejiang Investment | |||
| Fair value on purchase date | Book value on purchase date | Fair value on purchase date | Book value on purchase date | |
Assets:
| Assets: | ||||
| Money market funds | 49.79 | 49.79 | 2,100.36 | 2,100.36 |
| Accounts receivable | 1.00 | 1.00 | 3,078.12 | 3,078.12 |
| Prepayments | 1,364.78 | 1,364.78 | ||
| Stock | 11,357.95 | 11,357.95 | ||
| Other current assets | 4.90 | 4.90 | 1,045.52 | 1,045.52 |
| Fixed assets | 0.75 | 0.75 | 2,280.64 | 911.67 |
| Intangible assets | 495.00 | 10,718.44 | 18.44 | |
| Right-of-use assets | 158.14 | 158.14 | ||
| Long-term prepaid expenses | 77.92 | 77.92 | ||
| Deferred tax assets | 731.82 | 731.82 | ||
| Other non-current assets | 41.21 | 41.21 | 516.75 | 516.75 |
| Liabilities: | ||||
| Loan | 2,735.52 | 2,735.52 | ||
| Accounts payable | 0.86 | 0.86 | 4,333.67 | 4,333.67 |
| Employee compensation payable | 551.44 | 551.44 | ||
| Taxes payable | 868.40 | 868.40 | ||
| Contract liabilities | 194.56 | 194.56 | ||
| Other current liabilities | 41.86 | 41.86 | ||
| Non-current liabilities due within one year | 129.85 | 129.85 | ||
| Deferred income tax liability | 123.75 | 3,154.09 | 143.88 | |
| Lease liability | 48.69 | 48.69 | ||
| Net assets | 468.04 | 96.79 | 21,372.30 | 12,313.54 |
| Less: Minority interests | -2.06 | -2.06 | ||
| Net assets acquired | 468.04 | 96.79 | 21,374.36 | 12,315.60 |
Method for determining the fair value of identifiable assets and liabilities: Botanee values the assets and liabilities owned by theacquired company on the acquisition date based on asset evaluation and industry experience.
Botanee values the acquired company based on its assets and liabilities on the acquisition date and industry experience.
Contingent liabilities undertaken by acquiree in business merger:
□ Applicable ? N/A
Other note: none.
9.1.4 Gains or losses arising from the remeasurement at the fair value of shares held before the purchase date
Transaction that realized business combination step by step through multiple transactions and obtained control during thereporting period:
□ Yes ? No
9.1.5 Notes related to the inability to reasonably determine the merger consideration or the fair value of the acquiree'sidentifiable assets and liabilities on the purchase date or at the end of the period of the merger
□ Applicable ? N/A
9.1.6 Other Description
□ Applicable ? N/A
9.2 Business combination under common control
□ Applicable ? N/A
9.3 Counter purchase
□ Applicable ? N/A
9.4 Disposal of subsidiaries
□ Applicable ? N/A
9.5 Changes in the scope of consolidation due to other reasons
9.5.1 New entities in current period
| Entity | Established on | Registered capital | Funding ratio |
| Huzhou Botanee | July 31, 2023 | CNY 2 million | 100.00% |
| Botanee Bio-technology Japan Co., Ltd. | December 7, 2023 | JPY100 million | 100.00% |
| Shangri-La Yunke | February 13, 2023 | CNY 5 million | 100.00% |
| Nuoweitai (Kunming) | May 22, 2023 | CNY 1 million | 70.00% |
| Clinmate (Kunming) | May 22, 2023 | CNY 5 million | 100.00% |
| Botanee Bio-Technology (Singapore) Pte. Ltd. | November 13, 2023 | CNY 1 | 100.00% |
| Botanee Bio-Technology (Thailand) Co., Ltd. | December 13, 2023 | THB 200 million | 100.00% |
| Xiamen Yunzhong Equity Investment Partnership (Limited Partnership) | May 10, 2023 | CNY 316 million | 95.25% |
9.5.2 Entities deregistered and liquidated in this period
| Entity | Deregistered on |
| Hainan Botanee Venture Capital Private Equity Fund Management Co., Ltd. | September 27, 2023 |
| Hainan Botanee Private Equity Fund Management Co., Ltd. | September 27, 2023 |
9.6 Miscellaneous
□ Applicable ? N/A
10. Equity in Other Entities
10.1 Equity in Subsidiaries
10.1.1 Subsidiaries of the Company
Unit: CNY
| Name | Registered capital | Principal place of business | Registered in | Nature of business | Shareholding ratio | Way of obtaining | |
| Direct | Indirect | ||||||
| Kunming Botanee Sales | CNY5 million | Kunming | Kunming | Sales service | 100.00% | 0.00% | Established |
| Qimei Technology (Shanghai) | CNY10 million | Shanghai | Shanghai | E-commerce | 0.00% | 100.00% | Established |
| Kunming Yunzhuang | CNY2 million | Kunming | Kunming | R&D, and sales services | 100.00% | 0.00% | Established |
| Kunming Winona | CNY2 million | Kunming | Kunming | Service industry | 0.00% | 98.00% | Established |
| Shanghai Botanee | CNY150 million | Shanghai | Shanghai | R&D, and e-commerce | 100.00% | 0.00% | Established |
| Sichuan Botanee | CNY1 million | Chengdu | Chengdu | R&D, and sales services | 0.00% | 51.00% | Established |
| Wuhan Botanee | CNY1.3 million | Wuhan | Wuhan | R&D, and sales services | 100.00% | 0.00% | Bought |
| Shanghai Jiyan Biomedicine | CNY2 million | Shanghai | Shanghai | R&D | 0.00% | 100.00% | Established |
| Qimei Technology (Kunming) | CNY10 million | Kunming | Kunming | E-commerce | 100.00% | 0.00% | Established |
| Botanee (Shanghai) Supply Chain | CNY2 million | Shanghai | Shanghai | Supply chain management, warehousing services | 0.00% | 100.00% | Established |
| Yunnan Yunke | CNY100 million | Kunming | Kunming | R&D | 100.00% | 0.00% | Established |
| Hainan Botanee Investment | CNY60 million | Haikou | Haikou | Capital market services | 100.00% | 0.00% | Established |
| Shanghai Yibeini | CNY150 million | Shanghai | Shanghai | Service industry | 100.00% | 0.00% | Established |
| Shanghai Botanee Technology | CNY30 million | Shanghai | Shanghai | R&D | 100.00% | 0.00% | Established |
| Clinmate (Shanghai) | CNY100 million | Shanghai | Shanghai | R&D, and sales services | 100.00% | 0.00% | Established |
| Botanee (Kunming) Trading | CNY100,000 | Kunming | Kunming | Sales service | 100.00% | 0.00% | Established |
| Bei Xiaoni (Shanghai) | CNY10 million | Shanghai | Shanghai | Sales service | 0.00% | 100.00% | Established |
| Medasi (Shanghai) | CNY100 million | Shanghai | Shanghai | Sales service | 0.00% | 70.00% | set up |
| Botanee Trading | HKD 10,000 | Hongkong | Hongkong | Sales service | 100.00% | 0.00% | set up |
| Yanyao Medical Management | CNY10 million | Shanghai | Shanghai | Service industry | 0.00% | 100.00% | acquisition |
| Yanyao Medical Beauty | CNY1 million | Shanghai | Shanghai | Service industry | 0.00% | 100.00% | acquisition |
| Chengdu Botanee | CNY50 million | Chengdu | Chengdu | Service industry | 100.00% | 0.00% | Established |
| Yunnan Weijia | CNY20 million | Kunming | Kunming | Sales service | 51.00% | 0.00% | Established |
| Wuhou Botanee | CNY10 million | Chengdu | Chengdu | Sales service | 0.00% | 51.00% | Established |
| Botanee (Xiamen) | CNY10 million | Xiamen | Xiamen | Sales service | 0.00% | 100.00% | Established |
| Botanee (Hangzhou) | CNY5 million | Hangzhou | Hangzhou | Sales service | 0.00% | 100.00% | Established |
| Botanee (Hainan) | CNY10 million | Hainan | Hainan | Sales service | 0.00% | 100.00% | Established |
| Shanghai Hemoni | CNY10 million | Shanghai | Shanghai | Service industry | 0.00% | 100.00% | Established |
| Kunming Ansuote | CNY800,000 | Kunming | Kunming | Service industry | 0.00% | 100.00% | Established |
| Hangzhou Ansuote | CNY800,000 | Hangzhou | Hangzhou | Service industry | 0.00% | 100.00% | Established |
| Nibei (Shanghai) Technology | CNY10 million | Shanghai | Shanghai | Sales service | 0.00% | 100.00% | Established |
| Shanghai Beforteen | CNY10 million | Shanghai | Shanghai | Service industry | 0.00% | 100.00% | Established |
Sichuan Huifu MedicalManagement
| Sichuan Huifu Medical Management | CNY10 million | Chengdu | Chengdu | Service industry | 0.00% | 100.00% | Bought |
| Chengdu Huifu Internet Hospital | CNY10 million | Chengdu | Chengdu | Service industry | 0.00% | 100.00% | Bought |
| Chengdu Huifu Clinic | CNY5.38 million | Chengdu | Chengdu | Service industry | 0.00% | 100.00% | Bought |
| Xiamen Chonglou Private Equity Fund Management | CNY30 million | Xiamen | Xiamen | Capital market investment, and services | 100.00% | 0.00% | Established |
| Sichuan Beforteen Enterprise Management | CNY10 million | Chengdu | Chengdu | Service industry | 0.00% | 100.00% | Established |
| Chengdu Beforteen Internet Hospital | CNY10 million | Chengdu | Chengdu | Service industry | 0.00% | 100.00% | Established |
| Chengdu Befort Clinic | CNY10 million | Chengdu | Chengdu | Service industry | 0.00% | 100.00% | Established |
| Yunnan Botanee Technology | CNY10 million | Kunming | Kunming | R&D, production and manufacturing | 100.00% | 0.00% | Established |
| Hunan Botanee | CNY10 million | Changsha | Changsha | Production, sales services | 0.00% | 100.00% | Bought in current period |
| Hunan Elemei | CNY2 million | Changsha | Changsha | Production, sales services | 0.00% | 100.00% | Bought in current period |
| Changsha Meluda | CNY2 million | Changsha | Changsha | Production, sales services | 0.00% | 100.00% | Bought in current period |
| Yuejiang Investment | CNY2.609855 million | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| Guangzhou Weimaitong Information Technology Co., Ltd. | CNY1 million | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| Yuejiang (Hainan) E-Commerce Co., Ltd. | CNY10 million | Hainan | Hainan | Sales service | 0.00% | 51.00% | Bought in current period |
| Guangzhou Lieshang Information Technology Co., Ltd. | CNY1 million | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| Guangzhou TaoCNY Electronic Technology Co., Ltd. | CNY5.08 million | Guangzhou | Guangzhou | Supply chain services | 0.00% | 51.00% | Bought in current period |
| Jirui Cosmetics Technology (Guangzhou) Co., Ltd. | CNY500,000 | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| Chengmei Technology (Guangzhou) Co., Ltd. | CNY1 million | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| Yuejiang Technology (Guangzhou) Co., Ltd. | CNY100,000 | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| Bomei Cosmetics Technology (Guangzhou) Co., Ltd. | CNY1 million | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| Yuejiang (Guangzhou) Daily Necessities Co., Ltd. | CNY10 million | Guangzhou | Guangzhou | Supply chain services | 0.00% | 51.00% | Bought in current period |
| Yuehui (Chongqing) Biotechnology Co., Ltd. | CNY5 million | Chongqing | Chongqing | Sales service | 0.00% | 51.00% | Bought in current period |
| Weiku Technology (Guangzhou) Co., Ltd. | CNY500,000 | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| Zisheng Technology (Guangzhou) Co., Ltd. | CNY1 million | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| Yuepu (Suzhou) Culture Media Co., Ltd. | CNY55 million | Guangzhou | Guangzhou | Sales service | 0.00% | 51.00% | Bought in current period |
| ME Cosmetic Hongkong Co.,Limited | HKD 10 million | Hongkong | Hongkong | Sales service | 0.00% | 51.00% | Bought in current period |
| ME Cosmetic (Singapore) Pte.Ltd. | SGD 10,000 | Singapore | Singapore | Sales service | 0.00% | 51.00% | Bought in current period |
| URUOI Co., Ltd. | JPY3 million | Japan | Japan | consultation service | 0.00% | 51.00% | Bought in current period |
ME Cosmetic USA INC.
| ME Cosmetic USA INC. | USD20,000 | USA | USA | Sales service | 0.00% | 51.00% | Bought in current period |
| Huzhou Botanee | CNY2 million | Huzhou | Huzhou | Warehousing Services | 0.00% | 100.00% | Established in current period |
| Botanee Bio-technology Japan Co., Ltd. | JPY100 million | Japan | Japan | R&D | 0.00% | 100.00% | Established in current period |
| Shangri-La Yunke | CNY5 million | Shangri-La | Shangri-La | R&D | 0.00% | 100.00% | Established in current period |
| Nuoweitai (Kunming) | CNY1 million | Kunming | Kunming | R&D, sales services | 0.00% | 70.00% | Established in current period |
| Clinmate (Kunming) | CNY5 million | Kunming | Kunming | Sales service | 0.00% | 100.00% | Established in current period |
| Botanee Bio-Technology (Singapore) Pte. Ltd. | CNY1 | Singapore | Singapore | Sales service | 0.00% | 100.00% | Established in current period |
| Botanee Bio-Technology (Thailand) Co., Ltd. | THB 200 million | Thailand | Thailand | Sales service | 0.00% | 100.00% | Established in current period |
| Xiamen Yunzhong Equity Investment Partnership (Limited Partnership) | CNY316 million | Xiamen | Xiamen | Capital market investment, and services | 94.93% | 0.32% | Established in current period |
Note on the fact that the shareholding percentage is different from proportion of votes in subsidiaries:
□ Applicable ? N/A
Basis for the Company’s control over the investee when holding half of the votes or less and the Company’s loss of controlover the investee when holding half of the votes or more:
□ Applicable ? N/A
Basis for control over the important structured entities incorporated in consolidated scope:
□ Applicable ? N/A
Basis to determine the company is the agent or the principal:
□ Applicable ? N/A
Other note: None.
10.1.2 Important non-wholly-owned subsidiaries
Unit: CNY
| Name | Shareholding ratio of minority shareholders | Profit and loss attributable to minority shareholders in the current period | Dividends declared to minority shareholders in this period | Balance of minority shareholders’ equity at the end of the period |
| Yuejiang Investment | 49.00% | 8,002,462.98 | 124,060,830.58 |
Note on the difference between the shareholding ratio of minority shareholders of subsidiaries and their voting rights ratio:
□ Applicable ? N/A
Other note: None.
10.1.3 Main financial information of important non-wholly-owned subsidiaries
Unit: CNY
| Name | Ending balance | Opening balance | ||||||||||
| Current | Non- | Total | Current | Non- | Total | Current | Non- | Total | Current | Non- | Total | |
assets
| assets | current assets | assets | liabilities | current liabilities | liabilities | assets | current assets | assets | liabilities | current liabilities | liabilities | |
| Yuejiang Investment | 201,808,085.51 | 141,945,488.71 | 343,753,574.22 | 54,413,280.88 | 36,133,843.67 | 90,547,124.55 |
Unit: CNY
| Name | Amount incurred in current period | Amount incurred in previous period | ||||||
| operating income | net profit | Total comprehensive income | cash flow from operating activities | operating income | net profit | Total comprehensive income | cash flow from operating activities | |
| Yuejiang Investment | 104,336,659.68 | 16,331,189.20 | 16,073,097.44 | 13,429,474.72 | ||||
Other note: None.
10.1.4 Major limitations on the use of enterprise group assets and payment of enterprise group debts
□ Applicable ? N/A
10.1.5 Financial support or other supports provided to the structural body within the combined financial statement
□ Applicable ? N/A
Other note: none.
10.2 Transactions in which the owners' equity in a subsidiary has changed and the subsidiary is stillunder control
□ Applicable ? N/A
10.3 Equities in joint ventures or associates
10.3.1 Important joint ventures or associates
□ Applicable ? N/A
10.3.2 Main financial information of important joint ventures
□ Applicable ? N/A
10.3.3 Main financial information of important associates
□ Applicable ? N/A
10.3.4 Summary of financial information of insignificant joint ventures and associates
Unit: CNY
| Ending balance / amount incurred in the current period | Opening balance / amount in the previous period |
Joint ventures:
| Joint ventures: | ||
| Total of the following items calculated based on shareholding ratio | ||
| Associates: | ||
| Total carrying amount of investments | 212,015,151.15 | 82,775,998.70 |
| Total (calculated by shareholding proportion) | ||
| Net profit | 9,705,819.45 | 2,570,038.70 |
| Total comprehensive income | 9,705,819.45 | 2,570,038.70 |
Other note: None.
10.3.5 Explanation on major restrictions on the capability of transferring capital from joint ventures or associatedenterprises to the Company:
□ Applicable ? N/A
10.3.6 Losses of joint ventures or associates in excess their investment costs
□ Applicable ? N/A
10.3.7 Unrecognized commitments related to investment in joint ventures
□ Applicable ? N/A
10.3.8 Contingent liabilities for investment in joint ventures or associates
□ Applicable ? N/A
10.4 Significant joint venture
□ Applicable ? N/A
10.5 Equity in structured entities not included in the consolidated financial statement
□ Applicable ? N/A
10.6 Miscellaneous
□ Applicable ? N/A
11. Government Subsidy
11.1 Government subsidies recognized according to the amount receivable at the end of the reporting period
□ Applicable ? N/A
11.2 Liabilities involving government subsidies
? Applicable □ N/A
Unit: CNY
| Accounting account | Opening balance | New subsidy amount for current period | Amount included in non-operating income in the current period | Amount of other income transferred to current period | Other changes in current period | Ending balance | Assets/ income related |
| Deferred income | 55,574,589.18 | 85,460,808.00 | 51,709,867.67 | 6,462,791.11 | 82,862,738.40 | Assets/income |
11.3 Government subsidies included in current profits and losses
? Applicable □ N/A
Unit: CNY
| Accounting account | Amount incurred in current period | Amount incurred in previous period |
| Other income | 131,682,124.63 | 70,486,674.48 |
Other note: None.
12. Risks Related to Financial Instruments
12.1 Risks arising from financial instruments
We face risks from various financial instruments in its daily activities, mainly including market risks (including exchange raterisks, interest rate risks and commodity price risks), credit risks and liquidity risks. Our main financial instruments include monetaryfunds, equity investments, loans, accounts receivable, other receivables, accounts payable, other payables, etc. Details of the relevantfinancial instruments are disclosed in each note. The risks associated with these financial instruments, and the risk managementpolicies adopted by us to mitigate these risks, are described below.
(1) Market Risk
The Company analyzed the possible impacts of reasonable and possible changes in risk variables on profits and losses for thecurrent period or shareholders’ equity through sensitivity analysis. Since any risk variable rarely causes an impact independently, andthe correlation between risk variables will have a significant impact on the ultimate amount affected by changes in a risk variable, thefollowing interpretations are based on the assumption that each variable changes independently.
1) Exchange rate risk refers to the risk of changes in foreign exchange rates that affect the Company’s financial results and cashflow. The Company’s foreign exchange risk is mainly related to bank deposits and receivables held in US dollars and Japanese yen dueto exchange rate changes between the US dollar or Japanese yen and the Company’s functional currency. However, the Company’smanagement believes that the Company does not face big foreign exchange risk as such bank deposits in US dollars or Japanese yenaccount for a small proportion of the Company’s total assets, and the Company’s major businesses are settled in CNY.
2) Interest Rate Risk-Changes in Fair Value
The risk of changes in fair value of financial instruments due to changes in interest rates faced by the Company is mainly relatedto fixed-rate bank loans. As the Company’s fixed-rate loans are all bank loans, the Company’s management believes that the Companydoes not face a big risk of changes in fair value. The Company does not have an interest rate hedging policy currently.
3) Interest Rate Risk-Changes in Cash Flow
The risk of changes in cash flow of financial instruments due to changes in interest rates faced by the Company is mainly relatedto bank loans on floating interest rates. The Company’s policy is to maintain floating interest rates on these loans to eliminate the riskof changes in fair value of interest rate.
4) Other price risks. Investments made by the Company and classified as trading financial assets are presented at their fair value atthe balance sheet date. Therefore, the Company is exposed to price risks. The Company has established an internal investmentmanagement department and designated members to closely monitor price fluctuations of investment products. The Company’sdirectors therefore consider that the Company’s price risks have been mitigated.
(2) Credit risks
As at December 31, 2023, the maximum credit risk exposure which will cause a financial loss to the Company is mainly fromthe loss of financial assets of the Company caused by the failure of the other party of the contract to perform the obligations. Toreduce the credit risk, the Company controls the line of credit, performs the credit approval and executes other monitoring proceduresto ensure that the necessary measures are taken to recover the overdue claims. In addition, the Company makes sufficient provision forbad debts on each balance sheet date according to the recovery of receivables. In this regard, the management of the Companyconsiders that the credit risk is significantly reduced.In addition, the credit risk on monetary funds of the Company is limited because the monetary funds are deposited in banks withhigh credit ratings.
(3) Liquidity risks
Liquidity risk refers to the risk of capital shortage when an enterprise meets its obligation to settle by delivery of cash or otherfinancial assets.
In managing liquidity risk, the Company maintains and monitors cash and cash equivalents deemed sufficient by themanagement to meet the Company’s operating and reduce the impact of cash flow fluctuations.
The Company’s management believes that the Company’s liquidity risk is low and will not have a material impact on theCompany’s operations and financial statements. This financial statement is prepared based on the assumption of continuous operations.
12.3 Hedging
□ Applicable ? N/A
12.3 Financial assets
12.3.1 Classification of transfer methods
□ Applicable □ N/A
Unit: CNY
| transfer method | Nature of financial assets transferred | Amount of financial assets transferred | Termination of confirmation | Basis for judgment on termination of confirmation |
| endorsement or discount | bank acceptance draft | 448,242,736.71 | Termination confirmation | The credit risk and deferred payment risk of a bank acceptance bill are very small, and the interest rate risk related to the bill has been transferred to the bank. It can be judged that the main risks and rewards of ownership have been transferred after the endorsement or discount of the bill, so the recognition is terminated after the endorsement or discount. |
| total | 448,242,736.71 |
12.3.2 Financial assets derecognized due to transfer
? Applicable □ N/A
Unit: CNY
| project | How financial assets are transferred | Amount of financial assets derecognized | Gains or losses related to derecognition |
| bank acceptance draft | endorsement or discount | 448,242,736.71 | |
| total | 448,242,736.71 |
12.3.3 Asset transfer financial assets that continue to be involved
□ Applicable ? N/A
13. Disclosure of Fair Value
13.1 Closing fair values of assets and liabilities at fair value
Unit: CNY
| Item | Ending fair value | |||
| Level 1 measurement at fair value | Level 2 measurement at fair value | Level 3 measurement at fair value | Total | |
| I. Continuous fair value measurement | ||||
| (I) Financial assets held for trading | 1,238,356,707.34 | 1,238,356,707.34 | ||
| 1. Financial assets at FVTPL | 1,238,356,707.34 | 1,238,356,707.34 | ||
| (II) Receivables financing | 156,659,263.78 | 156,659,263.78 | ||
| (III) Other non-current financial assets | 86,449,823.00 | 86,449,823.00 | ||
| Total assets continuously measured at fair value | 1,481,465,794.12 | 1,481,465,794.12 | ||
13.2 Basis for recognition of market prices for continuous and non-continuous level I measurement itemsat fair value
□ Applicable ? N/A
13.3 Qualitative and quantitative information on the valuation techniques and significant parameters usedfor continuous and non-continuous level II measurement items at fair value
□ Applicable ? N/A
13.4 Qualitative and quantitative information on the valuation techniques and significant parameters usedfor continuous and non-continuous level III measurement items at fair value
The company's third-level fair value measurement items include financial products, receivable financing and other non-currentfinancial assets. Among them: financial products predict future cash flows based on the expected rate of return as fair value, and theexpected rate of return is an unobservable input value. The receivables financing is all bank acceptance bills, the face value of which isclose to the fair value. Other non-current financial assets are investments in partnerships and are measured based on the period-end netvalue as a reasonable estimate of fair value.
13.5 Information on adjustment between beginning book value and ending book value of items subjectto continuous level 3 fair value measurement and sensitivity analysis of non-observable parameters
□ Applicable ? N/A
13.6 Reasons for conversion and policy for determining the timing of conversion for items thatare continuously measured at fair value and converted between levels during the period
□ Applicable ? N/A
13.7 Changes in valuation techniques during the period and reasons
□ Applicable ? N/A
13.8 Fair value of financial assets and financial liabilities not measured at fair value
□ Applicable ? N/A
13.9 Miscellaneous
□ Applicable ? N/A
14. Affiliates and related party transactions
14.1 Information of the parent company
| Name of parent company | Registration place | Business Nature | Registered Capital | Shareholding proportion of the parent company to the Company | Votes proportion of the parent company to the Company |
| Nuona Technology | Kunmin g | Information technology services and consulting; enterprise management consulting (the above items do not involve special management measures for foreign investment access) (items that are subject to approval according to law shall be operated only after relevant approvals are obtained from relevant departments) | CNY 2.3 million | 46.08% | 46.08% |
Introductions to the parent company of the Company:
The ultimate controlling parties of the Enterprise are Mr. Guo Zhenyu and Mr. Kevin Guo.The actual controllers of the Company are Mr. Guo Zhenyu and Mr. Kevin Guo. Mr. Guo Zhenyu and Mr. Kevin Guo are father-son relationship. As of the disclosure date of this report, Mr. Guo Zhenyu and Mr. Kevin Guo jointly controlled 48.68% of the votingshares of the Company through Nuona Technology and Yunnan Haqisheng.
14.2 Subsidiaries of the Company
For information on subsidiaries of the Enterprise, please refer to Section X "X. Interests in Other Entities" of this report.
14.3 Joint ventures and associates of the Company
For details of the company's important joint ventures or associates, please refer to "3. Equity in joint arrangements or associates"in Section 10 of this report, "10. Equity in Other Entities".The information on other joint ventures or associates that produced balance by conducting related-party transactions with theCompany in the current period or in the earlier period is shown as follows:
| Name of joint ventures or associates | Relationship with the Company |
| Hangzhou Meixi | Associates |
| Shenzhen Nature | Associates |
| Beijing Huanfang Shidai | Associates |
| Yizheng (Suzhou) Biology | Associates |
| Hunan Miao Miao Health | Associates |
| Weimai Qingtong Medical | Associates |
| Shanghai Weimu Medical | Associates |
Other note: During the reporting period, we had no significant joint ventures or associates.
14.4 Information on other related parties
| Name of other related parties | Relationship between other related parties and the Company |
| Hangzhou Hongshan Shengheng Equity Investment Partnership (LP) | Company controlled by Zhou Kui, Director of the Company |
Other note :
The Company held the second meeting of the second Board of Directors on June 29, 2022, and reviewed and approved theProposal on Cooperative Investment and Related Party Transactions with Professional Investment Institutions. The Companyintends to invest in Hangzhou Sequoia Shengheng Equity Investment Partnership (Limited Partnership) (hereinafter referred to as"Sequoia Fund") established by Sequoia Capital Equity Investment Management (Tianjin) Co., Ltd. as the manager and HangzhouSequoia Kunpeng Management Consulting Partnership (Limited Partnership) as the general partner. And it is planned to sign theLimited Partnership Agreement of Hangzhou Sequoia Shengheng Equity Investment Partnership (Limited Partnership) . Amongthem, the Company, as one of the limited partners of Sequoia Fund, subscribed CNY100 million with its own funds. The share ofSequoia Fund in the Company's investment will be confirmed according to the final actual fundraising. As of the end of thereporting period, we have completed investment of CNY18 million.
14.5 Related party transactions
14.5.1 Related party transactions of purchasing or selling goods and rendering or receiving services
□ Applicable ? N/A
14.5.2 Related entrusted management/contracting and entrusting management/outsourcing
□ Applicable ? N/A
14.5.3 Related party lease
□ Applicable ? N/A
14.5.4 Related party guarantees
□ Applicable ? N/A
14.5.5 Fund lending/borrowing of related parties
□ Applicable ? N/A
14.5.6 Asset transfer and debt restructuring of related parties
□ Applicable ? N/A
14.5.7 Remuneration of key management personnel
Unit: CNY 10,000
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Remuneration of key management personnel | 2,586.45 | 2,632.65 |
14.5.8 Other related tractions
For details, please refer to “14.4. Other Related Parties” in “14. Related Parties and Related Transactions” under Section X of thisreport.
14.6 Receivables and payables of related parties
□ Applicable ? N/A
14.7 Commitments by related parties
□ Applicable ? N/A
14.8 Miscellaneous
□ Applicable ? N/A
15. Share-based Payment
15.1 Overall situation of share-based payment
? Applicable □ N/A
Unit: 10,000 shares/10,000 CNY
| Grant object category | Granted in this issue | Exercise this period | Unlocked in this issue | This issue expires | ||||
| quantity | Amount | quantity | Amount | quantity | Amount | quantity | Amount | |
| marketing personnel | 204.00 | 6,120.30 | 80.10 | 2,256.71 | ||||
| Administrative functions/managers | 187.50 | 5,625.29 | 71.65 | 2,012.71 | ||||
| R & D personnel | 130.00 | 3,900.19 | 50.20 | 1,411.78 | ||||
| Production staff | 3.00 | 90.00 | 0.90 | 24.52 | ||||
| total | 524.50 | 15,735.78 | 202.85 | 5,705.72 | ||||
Stock options or other equity instruments outstanding at the end of the period? Applicable □ N/A
| Grant object category | Stock options outstanding at the end of the period | Other equity instruments outstanding at the end of the period | ||
| Exercise price range | Remaining term of contract | Exercise price range | Remaining term of contract | |
| Marketing personnel | CNY61.30 | 12-24 months | ||
| Administrative functions/managers | CNY61.30 | 12-24 months | ||
| R&D personnel | CNY61.30 | 12-24 months | ||
| Production staff | CNY61.30 | 12-24 months | ||
Other explanations: For details of share-based payment, please refer to "13. Implementation of the Company's Equity IncentivePlan, Employee Stock Ownership Plan or Other Employee Incentive Measures" in Section 4 "Corporate Governance" of this report.
15.2 Equity-settled share-based payment
? Applicable □ N/A
Unit: 10,000 CNY
| Method for determining the fair value of equity instruments on the date of grant | Black-Scholes option pricing model |
| Important parameters of fair value of equity instruments on grant date | Historical volatility, risk-free interest rate |
| Basis for determining the number of exercisable equity instruments | Management's best estimate |
| Reasons for significant differences between the current period’s estimates and the previous period’s estimates | None |
| The cumulative amount of equity-settled share-based payments included in capital reserves | |
| Total expenses recognized for equity-settled share-based payments in the current period |
Other notes: For details on equity-settled share-based payments, please refer to “13. Implementation of the Company’s EquityIncentive Plan, Employee Stock Ownership Plan or Other Employee Incentive Measures” in Section 4 “Corporate Governance” of thisreport.
15.3 Share-based payment settled in cash
□ Applicable ? N/A
15.4 Share-based payment expenses for this period
□ Applicable ? N/A
15.5 Modification and termination of share-based payment
□ Applicable ? N/A
15.6 Others
□ Applicable ? N/A
16. COMMITMENT AND CONTINGENCIES
□ Applicable ? N/A
17. EVENTS AFTER THE BALANCE SHEET DATE
17.1 Important non-adjusting events
□ Applicable ? N/A
17.2 Profit distribution
Unit: CNY
| Profit distribution scheme | On April 24, 2024, the 14th meeting of the company's second board of directors passed the "2023 Profit Distribution Proposal": As of the date of the company's current board meeting to review the profit distribution plan, the company's total share capital is 423,600,000 shares, excluding the company's special repurchase After the securities account has repurchased 2,994,618 shares, the base number of allocated shares is 420,605,382 shares. A cash dividend of CNY 6.00 (tax included) will be distributed to all shareholders for every 10 shares. It is expected that a cash dividend of CNY 252,363,229.20 (tax included) will be distributed. No bonus shares will be issued. The capital reserve is converted into share capital; the amount of cash dividends accounts for 12.6931% of the company's profits available for distribution to shareholders in 2023, and the company's remaining undistributed profits are carried forward to the next year. For example, between the date of disclosure of the distribution plan and the equity registration date for the implementation of equity distribution, the total share capital of the company with the right to profit distribution changes (for example, the company's total share capital increases due to convertible bonds, share repurchases, equity incentive exercise, refinancing) If there are changes due to reasons such as the listing of shares), the profit distribution ratio will be adjusted accordingly based on the principle that the total distribution amount remains unchanged. |
17.3 Sales return
□ Applicable ? N/A
17.4 Notes on other events after the balance sheet date
□ Applicable ? N/A
18. OTHER SIGNIFICANT EVENTS
18.1 Correction of accounting errors in the previous period
□ Applicable ? N/A
18.2 Debt restructuring
□ Applicable ? N/A
18.3 Asset replacement
□ Applicable ? N/A
18.4 Annuity plan
□ Applicable ? N/A
18.5 Discontinued operations
□ Applicable ? N/A
18.6 Segment information
(1) Basis for determining reportable segments and accounting policies
The Company's main business income is divided into reportable segments according to the types of products sold.
(2) Financial information of reportable segments
Unit: CNY
| Item | Incomes | Cost | Gross profit |
| Skin care products | 4,869,891,463.93 | 1,282,695,510.54 | 3,587,195,953.39 |
| Medical Devices | 463,107,605.63 | 87,399,714.92 | 375,707,890.71 |
| Cosmetics | 168,621,281.46 | 62,419,740.27 | 106,201,541.19 |
(3) Where the Company has no reportable segment or cannot disclose total assets and total liabilities of reportable segments,explain the reasons
□ Applicable ? N/A
(4) Other Description
□ Applicable ? N/A
18.7 Other significant transactions and events affecting investors' decisions
□ Applicable ? N/A
18.8 Miscellaneous
□ Applicable ? N/A
19. NOTES TO MAIN ITEMS IN THE PARENT COMPANY'S FINANCIALSTATEMENTS
19.1 Accounts receivable
(1) Disclosure by ageing
Unit: CNY
| Aging | Book ending balance | Book opening balance |
| Within 1 year (inclusive) | 665,107,918.02 | 544,623,016.46 |
| Total | 665,107,918.02 | 544,623,016.46 |
(2) Classified disclosure according to bad debt accrual method
Unit: CNY
| Type | Ending balance | Opening balance | ||||||||
| Book balance | Provision for bad debts | Carryi ng value | Book balance | Provision for bad debts | Carryi ng value | |||||
| Amount | Scale | Amount | Proportion of provision | Amount | Scale | Amount | Proportion of provision | |||
| Accounts receivable with provision for bad debts on a single basis | 525,960.00 | 0.10% | 525,960.00 | 100.00% | ||||||
| including | ||||||||||
| Accounts receivable with insignificant single amount but bad debt provision made individually | 525,960.00 | 0.10% | 525,960.00 | 100.00% | ||||||
| Accounts receivable for which provision for bad debts is made by combination | 665,107,918.02 | 100.00% | 61,925.74 | 0.01% | 665,045,992.28 | 544,097,056.46 | 99.90% | 18.00 | 0.00% | 544,097,038.46 |
| including | ||||||||||
| Accounts receivables from external customers for which bad debts provision is accrued according to aging portfolios | 6,333,369.04 | 0.95% | 61,925.74 | 0.98% | 6,271,443.30 | 2,147,788.25 | 0.39% | 18.00 | 0.00% | 2,147,770.25 |
| Internal transaction portfolios | 658,774,548.98 | 99.05% | 0.00% | 658,774,548.98 | 541,949,268.21 | 99.51% | 0.00% | 541,949,268.21 | ||
Total
| Total | 665,107,918.02 | 100.00% | 61,925.74 | 0.01% | 665,045,992.28 | 544,623,016.46 | 100.00% | 525,978.00 | 0.10% | 544,097,038.46 |
Provision for bad debts made individually: None .
Unit: CNY
| name | Opening Balance | Ending balance | ||||
| Book balance | Provision for bad debts | Book balance | Provision for bad debts | Provision ratio | Reasons for provision | |
| Unit one | 525,960.00 | 525,960.00 | The individual amount is not significant and the management believes that there is no possibility of recovery. During the reporting period, the company has written off this account receivable | |||
| total | 525,960.00 | 525,960.00 | ||||
Provision for bad debts made by portfolio: CNY 61,925.74 .
Unit: CNY
| Name | Ending balance | ||
| Book balance | Provision for bad debts | Proportion of provision | |
| Accounts receivables from external customers for which bad debts provision is accrued according to aging portfolios | 6,333,369.04 | 61,925.74 | 0.98% |
| Total | 6,333,369.04 | 61,925.74 | |
Notes of the basis for determining the portfolio: For details, please refer to "13. Accounts Receivable" in Section 10 of thisreport "V. Important Accounting Policies and Accounting Estimates".
Provision for bad debts made by portfolio: CNY 0.00 .
Unit: CNY
| Name | Ending balance | ||
| Book balance | Provision for bad debts | Proportion of provision | |
| Internal transaction portfolios | 658,774,548.98 | ||
| Total | 658,774,548.98 | ||
Notes of the basis for determining the portfolio: Refer to Note V "10. Financial Instruments" in Section X of this report for thedetermination method and accounting treatment method of expected credit losses of accounts receivable.
Whether bad debt provisions for accounts receivable were made according to the general expected credit loss model:
□ Applicable ? N/A
(3) Bad debt provision provided, recovered or reversed in current period
Bad debt provision withdrawn in the reporting Period:
Unit: CNY
| Amount changed in the current period |
Type
| Type | Opening balance | Provision | Recovery or reversal | Cancellation after verification | Miscellaneous | Ending balance |
| Provision for bad debts of accounts receivable | 525,978.00 | 61,907.74 | 525,960.00 | 61,925.74 | ||
| Total | 525,978.00 | 61,907.74 | 525,960.00 | 61,925.74 |
Significant recovery or reversal of bad debt provision for the current period:
□ Applicable ? N/A
( 4 ) Accounts receivable actually written off in current period
unit: CNY
| project | Write-off amount |
| Accounts receivable actually written off | 525,960.00 |
Important write-offs of accounts receivable:
□ Applicable ? N/A
( 5 ) Accounts receivable with top five ending balance collected as per the borrowers:
Unit: CNY
| company name | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assets | Proportion of the total closing balance of accounts receivable and contract assets | Ending balance of bad debt provision for accounts receivable and contract asset impairment provision |
| Internal customer one | 481,443,422.64 | 481,443,422.64 | 72.39% | ||
| Internal customer two | 112,366,491.11 | 112,366,491.11 | 16.89% | ||
| Internal customer three | 22,823,923.21 | 22,823,923.21 | 3.43% | ||
| Internal customers four | 14,069,949.73 | 14,069,949.73 | 2.12% | ||
| Internal customers five | 11,677,433.70 | 11,677,433.70 | 1.76% | ||
| total | 642,381,220.39 | 642,381,220.39 | 96.59% |
19.2 Other receivables
Unit: CNY
| Item | Ending balance | Opening balance |
| Dividends receivable | 169,335.03 | 1,219,704.81 |
| Other accounts receivable | 740,066,308.17 | 27,404,523.03 |
| Total | 740,235,643.20 | 28,624,227.84 |
(1) Interest receivable
□ Applicable ? N/A
(2) Dividends receivable
1) Category of dividends receivable
Unit: CNY
| Item (or the investee) | Ending balance | Opening balance |
| Common stock dividends receivable from subsidiaries | 169,335.03 | 1,219,704.81 |
| Total | 169,335.03 | 1,219,704.81 |
2) Significant Dividends Receivable Aged over 1 Year
□ Applicable ? N/A
3) Classified disclosure according to bad debt accrual method
□ Applicable ? N/A
4) Bad debt provisions accrued, recovered or reversed in the current period
□ Applicable ? N/A
5) Dividends receivable actually written off in the current period
□ Applicable ? N/A
Other instructions: None.
(3) Other receivables
1) Other receivables classified by nature
Unit: CNY
| Payment nature | Ending book balance | Opening book balance |
| Accounts receivables from subsidiaries | 734,000,000.00 | 22,000,000.00 |
| Guaranteed deposit and security deposit | 7,535,385.21 | 6,675,735.04 |
| Employee provision | 40,000.00 | 67,300.00 |
| Total | 741,575,385.21 | 28,743,035.04 |
2) Disclosure by ageing
Unit: CNY
| Aging | Ending book balance | Opening book balance |
Within 1 year (inclusive)
| Within 1 year (inclusive) | 714,190,850.17 | 21,327,700.00 |
| 1-2 years | 20,160,200.00 | 4,290,023.12 |
| 2-3 years | 4,226,023.12 | 2,780,576.42 |
| Over 3 years | 2,998,311.92 | 344,735.50 |
| 3-4 years | 2,653,576.42 | 344,735.50 |
| 4-5 years | 344,735.50 | |
| Total | 741,575,385.21 | 28,743,035.04 |
3) Classified disclosure according to bad debt accrual method
unit: CNY
| category | Ending balance | Opening Balance | ||||||||
| Book balance | Provision for bad debts | Book value | Book balance | Provision for bad debts | Book value | |||||
| Amount | Proportion | Amount | Provision Proportion | Amount | Proportion | Amount | Provision Proportion | |||
| in: | ||||||||||
| Provision for bad debts on a portfolio basis | 741,575,385.21 | 100.00% | 1,509,077.04 | 0.20% | 740,066,308.17 | 28,743,035.04 | 100.00% | 1,338,512.01 | 4.66% | 27,404,523.03 |
| in: | ||||||||||
| External other receivables accrued based on aging combination | 7,575,385.21 | 1.02% | 1,509,077.04 | 19.92% | 6,066,308.17 | 6,743,035.04 | 23.46% | 1,338,512.01 | 19.85% | 5,404,523.03 |
| internal transaction portfolio | 734,000,000.00 | 98.98% | 734,000,000.00 | 22,000,000.00 | 76.54% | 22,000,000.00 | ||||
| total | 741,575,385.21 | 100.00% | 1,509,077.04 | 0.20% | 740,066,308.17 | 28,743,035.04 | 100.00% | 1,338,512.01 | 4.66% | 27,404,523.03 |
Provision for bad debts on a group basis: CNY1,509,077.04
unit: CNY
| name | Ending balance | ||
| Book balance | Provision for bad debts | Provision ratio | |
| Provision of external other receivables based on aging combinations | 7,575,385.21 | 1,509,077.04 | 19.92% |
| total | 7,575,385.21 | 1,509,077.04 | |
Explanation of the basis for determining this combination: For details, please refer to "13. Accounts Receivable" in "V. ImportantAccounting Policies and Accounting Estimates" in Section 10 of this report.
Provision for bad debts based on combination: CNY0.00
unit: CNY
name
| name | Ending balance | ||
| Book balance | Provision for bad debts | Provision ratio | |
| internal transaction portfolio | 734,000,000.00 | ||
| total | 734,000,000.00 | ||
Explanation of the basis for determining this combination: For details, please refer to "13. Accounts Receivable" in "V. ImportantAccounting Policies and Accounting Estimates" in Section 10 of this report.
Provision for bad debts based on the general expected credit loss model:
Unit: CNY
| Provision for bad debts | Stage I | Stage II | Stage III | Total |
| Expected credit losses for the next 12 months | Expected credit loss within the whole duration (no credit impairment occurs) | Expected credit loss within the whole duration (credit impairment has occurred) | ||
| Balance on January 1, 202 3 | 1,338,512.01 | 1,338,512.01 | ||
| Balance as at January 1, 202 3 is in the current period. | ||||
| Provision in the current period | 170,565.03 | 170,565.03 | ||
| Balance as at December 31, 202 3 | 1,509,077.04 | 1,509,077.04 |
Basis for division of each stage and provision ratio for bad debts
□ Applicable ? N/A
Changes of carrying amount with significant amount changed of loss provision in the reporting period
□ Applicable ? N/A
4) Bad debt provision provided, recovered or reversed in current period
Bad debt provision withdrawn in the reporting Period:
Unit: CNY
| Type | Opening balance | Amount changed in the current period | Ending balance | |||
| Provision | Recovery or reversal | Cancellation after verification | Miscellaneous | |||
| Bad debt provision of other receivables | 1,338,512.01 | 170,565.03 | 1,509,077.04 | |||
Significant provision for bad debt recovered or reversed among the above:
□ Applicable ? N/A
5) Other receivables actually written off in the current period
□ Applicable ? N/A
6) Other receivables with top five ending balances carried forward collected as per the borrowers
Unit: CNY
| Company | Nature | Ending balance | Aging | Proportion to ending balance of other receivables | Closing balance of provision for bad debts |
| Company 1 | Accounts receivables from subsidiaries | 702,000,000.00 | Within 1 year | 94.66% | |
| Company 2 | Accounts receivables from subsidiaries | 27,000,000.00 | Within 1 year,1-4 years | 3.64% | |
| Company 3 | Accounts receivables from subsidiaries | 5,000,000.00 | Within 1 year | 0.67% | |
| Company 4 | Deposit | 2,235,509.00 | Within 3 years | 0.30% | 447,101.80 |
| Company 5 | Deposit | 1,583,838.00 | 2-3years | 0.21% | 316,767.60 |
| Total | 737,819,347.00 | 99.48% | 763,869.40 |
7) Other receivables derecognized due to transfer of financial assets
□ Applicable ? N/A
19.3 Long-term equity investment
Unit: CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Provision for Impairment | Carrying value | Book balance | Provision for Impairment | Carrying value | |
| Investment in subsidiaries | 481,799,055.23 | 481,799,055.23 | 531,799,055.23 | 531,799,055.23 | ||
| Total | 481,799,055.23 | 481,799,055.23 | 531,799,055.23 | 531,799,055.23 | ||
(1) Investment in subsidiaries
Unit: CNY
| The invested | Opening balance (book value) | Opening balance of impairment provision | Increases and decreases in the current period | Closing balance (book value) | Closing balance of impairment provision | |||
| additional investment | Reduce investment | Provision for impairment | other | |||||
| Kunming Yunzhuang | 25,920,000.00 | 25,920,000.00 | ||||||
| Kunming Botanee Sales | 5,000,000.00 | 5,000,000.00 | ||||||
| Shanghai Botanee | 2,000,000.00 | 10,000,000.00 | 12,000,000.00 | |||||
| Qimei Technology (Shanghai) | 10,000,000.00 | 10,000,000.00 | ||||||
| Shanghai Jiyan Biomedicine | 2,000,000.00 | 2,000,000.00 | ||||||
| Botanee (Shanghai) | 2,000,000.00 | 2,000,000.00 | ||||||
Supply Chain
| Supply Chain | ||||||||
| Yunnan Yunke | 100,000,000.00 | 100,000,000.00 | ||||||
| Hainan Botanee Investment | 60,000,000.00 | 60,000,000.00 | ||||||
| Shanghai Yibeini | 112,000,000.00 | 112,000,000.00 | ||||||
| Shanghai Botanee Technology | 30,000,000.00 | 4,000,000.00 | 34,000,000.00 | |||||
| Keningmei (Shanghai) | 20,000,000.00 | 10,000,000.00 | 30,000,000.00 | |||||
| Botanee (Kunming) Trading | 100,000.00 | 100,000.00 | ||||||
| Hainan Botanee Venture Capital Private Equity Fund Management Co., Ltd. | 30,000,000.00 | 30,000,000.00 | ||||||
| Botanee Trading | ||||||||
| Chengdu Botanee | 50,000,000.00 | 50,000,000.00 | ||||||
| Hainan Botanee Private Equity Fund Management Co., Ltd. | 40,000,000.00 | 40,000,000.00 | ||||||
| Yunnan Weijia | 10,200,000.00 | 10,200,000.00 | ||||||
| Wuhan Botanee | 1,579,055.23 | 1,579,055.23 | ||||||
| Qimei Technology (Kunming) | 1,000,000.00 | 1,000,000.00 | ||||||
| Xiamen Chonglou Private Equity Fund Management | 30,000,000.00 | 30,000,000.00 | ||||||
| Yunnan Botanee Technology | 10,000,000.00 | 10,000,000.00 | ||||||
| Xiamen Yunzhong Equity Investment Partnership (Limited Partnership) | 150,000,000.00 | 150,000,000.00 | ||||||
| Total | 531,799,055.23 | 184,000,000.00 | 234,000,000.00 | 481,799,055.23 |
(2) Investment in associates and joint ventures
□ Applicable ? N/A
(3) Other Description
□ Applicable ? N/A
4. Revenue and cost of sales
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period | ||
| Revenues | Costs | Revenues | Costs | |
| Main business | 3,563,496,378.36 | 1,444,430,592.65 | 3,598,178,418.03 | 1,242,510,124.16 |
| Other business | 34,774,354.38 | 23,712,371.58 | 3,504,608.78 | 1,231,809.25 |
| Total | 3,598,270,732.74 | 1,468,142,964.23 | 3,601,683,026.81 | 1,243,741,933.41 |
Relevant information of revenue and cost:
Unit: CNY
| Contract classification | Daily chemical industry | Services and others | Total | |||
| Revenue | Cost | Revenue | Cost | Revenue | Cost | |
| By type of product | ||||||
| including | ||||||
| Skin care products | 3,283,226,857.56 | 1,320,990,037.61 | 3,283,226,857.56 | 1,320,990,037.61 | ||
| Medical Devices | 219,087,540.94 | 94,858,397.97 | 219,087,540.94 | 94,858,397.97 | ||
| Cosmetics | 61,181,979.86 | 28,582,157.07 | 61,181,979.86 | 28,582,157.07 | ||
| Services and others | 34,774,354.38 | 23,712,371.58 | 34,774,354.38 | 23,712,371.58 | ||
| Classification by business area | ||||||
| Including: | ||||||
| Within Chinese Mainland | 3,563,496,378.36 | 1,444,430,592.65 | 34,774,354.38 | 23,712,371.58 | 3,598,270,732.74 | 1,468,142,964.23 |
| Outside Chinese Mainland | ||||||
| Type of market or customer | ||||||
| Including: | ||||||
| Winona | 3,475,101,846.70 | 1,378,726,540.56 | 3,475,101,846.70 | 1,378,726,540.56 | ||
| Winona Baby | 55,856,496.29 | 36,717,250.98 | 55,856,496.29 | 36,717,250.98 | ||
| 瑷科缦（AOXMED） | 15,503,715.22 | 12,120,877.87 | 15,503,715.22 | 12,120,877.87 | ||
| Miscellaneous | 17,034,320.15 | 16,865,923.24 | 34,774,354.38 | 23,712,371.58 | 51,808,674.53 | 40,578,294.82 |
| Contract type | ||||||
| Including: | ||||||
| Self-operation | 3,552,895,168.19 | 1,440,422,493.62 | 34,774,354.38 | 23,712,371.58 | 3,587,669,522.57 | 1,464,134,865.20 |
| Distribution | 10,601,210.17 | 4,008,099.03 | 10,601,210.17 | 4,008,099.03 | ||
| Classified by the time of goods transfer | ||||||
Including:
| Including: | ||||||
| Revenue recognized at a certain time point | 3,563,496,378.36 | 1,444,430,592.65 | 3,563,496,378.36 | 1,444,430,592.65 | ||
| Revenue recognized in a certain period | 34,774,354.38 | 23,712,371.58 | 34,774,354.38 | 23,712,371.58 | ||
| Classification of contract term | ||||||
| Including: | ||||||
| Expected to be completed within one year | 3,563,496,378.36 | 1,444,430,592.65 | 34,774,354.38 | 23,712,371.58 | 3,598,270,732.74 | 1,468,142,964.23 |
| Classification by sales channel | ||||||
| Including: | ||||||
| Online channel product sales | 1,661,630,814.36 | 960,042,911.61 | 1,661,630,814.36 | 960,042,911.61 | ||
| Offline channel product sales | 1,901,865,564.00 | 484,387,681.04 | 1,901,865,564.00 | 484,387,681.04 | ||
| Offline channel services and others | 34,774,354.38 | 23,712,371.58 | 34,774,354.38 | 23,712,371.58 | ||
| Total | 3,283,226,857.56 | 1,320,990,037.61 | 34,774,354.38 | 23,712,371.58 | 3,598,270,732.74 | 1,468,142,964.23 |
Information related to performance obligations:The Company has delivered the goods to the customer according to the agreed deliverymethod. When the customer obtains the control right of the goods agreed in the contract, the Company recognizes the revenue whencompleting the contract performance obligations.
Information related to variable consideration in the contract:
□ Applicable ? N/A
Major contract changes or major transaction price adjustments
□ Applicable ? N/A
5. Investment income
Unit: CNY
| Item | Amount incurred in the current period | Amount incurred in the previous period |
| Income from entrusted financial management of cash management | 53,372,195.12 | 75,098,955.60 |
| Dividends from subsidiaries | 1,143,391.98 | 2,035,704.81 |
| Dividends received from investments in non-current financial assets | 94,756.71 | |
| Investment income from the disposal of long-term equity investments | -3,068,821.29 | 310,000.00 |
| Total | 51,541,522.52 | 77,444,660.41 |
6. Others
□ Applicable ? N/A
20. Supplementary information
1. List of non-recurring loss/gain of the current period
? Applicable □ N/A
Unit: CNY
| Item | Amount | Description |
| Gains and losses from disposal of non-current assets | 461,616.01 | 461,616.01 |
| Government subsidies included in the current profit or loss (excluding those closely related to the normal business of the Company and granted under the national policies and continuously enjoyed according to a certain quota of amount or volume) | 131,682,124.63 | 131,682,124.63 |
| Except for the effective hedging activities related to the Company’s ordinary activities, profit or loss arising from changes in fair value of financial assets and financial liabilities held for trading, and investment income from disposal of financial assets and financial liabilities held for trading and available-for-sale financial assets | -17,238,886.41 | -17,238,886.41 |
| Profits and losses on the assets by entrusting others to invest or manage | 54,656,428.89 | 54,656,428.89 |
| Other non-operating income and expenses other than the above | -7,167,283.17 | -7,167,283.17 |
| Less: Effect on income tax | 22,633,297.72 | |
| Amount affected by minority shareholders ’ equity | 1,024,486.20 | |
| Total | 138,736,216.03 | -- |
Other profit or loss conforming to the definition of non-recurring gains and losses? Applicable □ N/AAccording to the relevant regulations of the "Explanatory Announcement No. 1 on Information Disclosure of Companies thatPublicly Offer Securities - Non-recurring Profit and Loss (Revised in 2023)" issued by the China Securities Regulatory Commission onDecember 22, 2023, the company will be closely related to the company's normal operating business in 2023. Government subsidiesthat comply with national policies, are enjoyed in accordance with determined standards, and have a lasting impact on the company'sprofits and losses are recognized as recurring profits and losses, and non-recurring profits and losses in 2022 and 2021 will be adjustedin the same manner. The after-tax non-recurring profits and losses attributable to shareholders of listed companies in 2022 and 2021will decrease by 2,458,461.09 CNY and 2,462,143.48 CNY respectively.Explanation on defining the non-recurring gains and losses set out in the Explanatory Announcement No. 1 on InformationDisclosure for Companies Offering Securities to the Public - Non-Recurring Gains and Losses as recurring gains and losses
□ Applicable ? N/A
2. Return on equity and earnings per share
| Profit in the report period | Weighted average return on net assets | Earnings per share | |
| Basic earnings per share (CNY/share) | Diluted earnings per share (CNY/share) | ||
| Net profit attributed to ordinary shareholders of the Company | 13.21% | 1.79 | 1.79 |
| Net profit attributed to ordinary shareholders of the Company after deducting non-recurring gains and losses | 10.79% | 1.46 | 1.46 |
3. Difference in accounting data under domestic and foreign accounting rules
(1) Discrepancy between the net profits and the net assets attributable to shareholders of the Listed Company in theFinancial Reports disclosed simultaneously according to the International Accounting Standard and China AccountingStandard
□ Applicable ? N/A
(2) The difference between net profits in the financial report and net assets belonging to the shareholders of listedcompanies exposed as per International Accounting Standard and Chinese Accounting Standard
□ Applicable ? N/A
(3) Specify the reasons for difference in accounting data under domestic and foreign accounting standards (if any); ifadjustment is made to data audited by overseas audit firm, specify the name of such audit firm
□ Applicable ? N/A
4. Miscellaneous
□ Applicable ? N/A