Stock Code: 603195 Stock Name: Goneo Group
公牛集团股份有限公司GONEO GROUP CO., LTD.
Annual Report 2023
Important Notes
1. The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,supervisors and senior management of Goneo Group Co., Ltd. (hereinafter referred to as the“Company”) hereby guarantee that the contents of this Report are true, accurate and complete andfree of any misrepresentations, misleading statements or material omissions, and collectively andindividually accept legal responsibility for such contents.
2. All the directors of the Company attended the board meeting for the review of this Report.
3. Pan-China Certified Public Accountants LLP has issued an independent auditor’s report withunmodified unqualified opinion for the Company.
4. Ruan Liping, the Company’s legal representative, Liu Shengsong, the Company’s Chief FinancialOfficer, and Shen Kewei, head of the Company’s financial department (equivalent to financialmanager) hereby guarantee that the financial statements carried in this Report are true, accurateand complete.
5. Final dividend plan approved by the Board of Directors
As audited by Pan-China Certified Public Accountants LLP, net profit attributable to shareholders ofthe Company as the parent stood at RMB3,870,135,376.47 for 2023, and the cumulative distributableprofit of the Company as the parent was RMB5,044,894,263.44 as at 31 December 2023. The 2023 finaldividend plan is as follows: Based on the total share capital (exclusive of the shares in the Company’srepurchased share account) at the record date of the dividend payout, the Company intends to pay a cashdividend of RMB31 (tax inclusive) per 10 shares to shareholders, with a bonus issue of 4.5 additionalshares for every 10 shares held by shareholders from capital reserves.According to the total share capital of 891,540,875 shares minus the 46 shares in the repurchasedshare account at the date when this Report was authorized for issue, the total cash dividend amount isRMB2,763,776,569.90 (tax inclusive), and the total share capital will increase to 1,292,734,248 sharesupon the bonus issue (share capital subject to the number registered with the Shanghai branch of ChinaSecurities Depository and Clearing Co., Ltd., with tail difference, if any, due to rounding).
Where any change occurs to the total share capital before the record date of the dividend payout, thecash dividend and bonus issue per share shall remain the same while the total payout and bonus issueamount shall be adjusted accordingly.
The final dividend plan is subject to final approval by the 2023 Annual General Meeting ofShareholders.
6. Risk warning regarding forward-looking statements
√ Applicable □ Not applicable
Any plans, development strategies and other forward-looking statements mentioned in this Reportshall not be considered as promises to investors. Investors and those concerned shall be sufficiently awareof the risks and understand the differences between plans and forecasts and promises.
7. Indicate whether any of the controlling shareholder or other related parties occupied theCompany’s capital for non-operating purpose.N/A
8. Indicate whether the Company provided any guarantee for any external party in violation of theprescribed decision-making procedure.N/A
9. Indicate whether over half of the directors refused to guarantee the truthfulness, accuracy andcompleteness of this Report.N/A
10. Major risk warning
The Company has described the possible risks in this Report. For further information, please refer tothe contents under the heading “Possible risks” under Item VI (IV) in “Part III Management Discussionand Analysis”.
11. Other information
□ Applicable √ Not applicable
Taking the Long Way
——To Our Shareholders
In 2023, we embraced change and innovation amidst a complex economic landscape both at homeand abroad. Thanks to our unwavering dedication, we achieved commendable results, with our operatingrevenue and profit soaring to record highs as we attained robust growth across economic cycles. Duringthe year, we recorded operating revenue of RMB15.695 billion, up 11.46% year on year; and a net profitattributable to our shareholders of RMB3.87 billion, representing an increase of 21.37% from the yearearlier. We further fortified our strengths in the electric connection business. Despite profound adjustmentsin the real estate sector, we still managed to secure rapid growth in the smart electrical lighting business.And, riding tailwinds, we achieved leapfrog development in the new energy business. As a result, thevisibility and reputation of our brand—Goneo—have been further enhanced.In 2023, we were committed to innovation-driven development. Based on customer needs, weunveiled a range of highly recognised new products, such as the Master Track Socket, the Butterfly WingUltra-thin Switch, the Bladeless Fan Lamp, the “Mini Power Cabin” Socket, the Safe Charging Point, andthe Smart No-main-lamp Lighting. These inventions have elevated Goneo to new heights in terms of smart,high-end and trendy products. Throughout the year, the Company won more than ten Chinese andinternational design awards, including iF, Red Dot, IDEA, and Gmark.
In 2023, we vigorously promoted channel reform as well, converting existing store-in-stores intoflagship stores carrying comprehensive Goneo products. This has elevated both the stature of our outletsand the image of Goneo as a provider of comprehensive products. Furthermore, we also introduced a newretail model to achieve collaborative growth between our online and offline channels.
In 2023, we drove comprehensive brand upgrades. We joined forces with globally acclaimed lightdesigner Roger Narboni to launch “Murora”, an industry-pioneering no-main-lamp lighting brand that hasgarnered widespread interest. Furthermore, we secured the endorsement of international supermodel LiuWen, who subsequently agreed to become the face of Goneo. We also collaborated with esteemed supercardesigner Fabrizio Giugiaro in crafting our Master Track Socket. Through a range of branding and digitalmarketing activities, such as celebrity endorsements and KOL promotions, we have reinforced Goneo'simage as a leading trendsetter in safe electrical products.
In 2023, we pursued excellence with determination, arranging our businesses, markets, and corecapabilities from a forward-looking perspective. We also established our International BusinessDepartment, marking our comprehensive entry into the global market. Moreover, we founded our ProcessOptimisation and Digitalisation Centre and joined forces with Huawei Cloud to officially release Goneo'sblueprint for digitalisation. Additionally, construction officially began on our smart lighting industrial basein the city of Huizhou in Guangdong Province. These arrangements have laid a solid foundation for theCompany's long-term sustainable development.
In 2023, we also deepened our environmental, social, and governance (ESG) practices, vigorouslypromoting the utilisation of green energy and innovation in low-carbon products. We also advancedmodern corporate governance in line with international standards. Meanwhile, we proactively fulfilled oursocial responsibilities, donating a cumulative total of RMB193 million in the year to various causes suchas cultural education, healthcare, disaster relief, and poverty alleviation.Looking ahead, we will remain committed to our three major strategies: a smart ecosystem, newenergy, and internationalisation. These efforts are guided by our principles of “taking the long way withprofessionalism and devotion, and striving for No. 1”. We will also forge ahead with determinationtowards our goal of RMB100 billion operating revenue, as well as our vision of “becoming a leader in theinternational civil electrical industry”.
The Board of Directors of Goneo Group Co., Ltd.
April 2024
Contents
Part I Definitions ...... 7
Part II General Information of the Company and Key Financial Indicators ...... 10
Part III Management Discussion and Analysis ...... 16
Part IV Corporate Governance ...... 60
Part V Environmental and Social Responsibility ...... 86
Part VI Significant Events ...... 91
Part VII Changes in Ordinary Shares and Information about Shareholders ...... 111
Part VIII Relevant Information of Preference Shares ...... 126
Part IX Relevant Information of Corporate Bonds ...... 127
Part X Financial Statements ...... 128
| Documents available for reference | The financial statements for the year ended 31 December 2023 signed and stamped by the legal representative, the Chief Financial Officer, and the head of the financial department |
| The Independent Auditor’s Report for the year ended 31 December 2023 stamped by the CPA firm, as well as signed and stamped by the relevant certified public accountants | |
| The originals of all the Company’s documents and announcements disclosed on newspapers and websites designated by CSRC during the Reporting Period |
Part I DefinitionsI DefinitionsThe expressions in the left column in the table below refer to the contents in the right column unlessotherwise specified.
| Definitions of frequently used terms | ||
| The “Company”, “Goneo Group”, “Goneo”, or “we” | refers to | Goneo Group Co., Ltd. |
| Reporting Period | refers to | The period from 1 January 2023 to 31 December 2023 |
| Liangji Industrial | refers to | Ningbo Liangji Industrial Co., Ltd., the Company’s controlling shareholder |
| Ninghui Investment | refers to | Ningbo Ninghui Investment Management Partnership (Limited Partnership) , the Company’s shareholder |
| Suiyuan Investment | refers to | Xiamen Suiyuan Investment Partnership (Limited Partnership) , the Company’s shareholder |
| Qiyuanbao | refers to | Ningbo Qiyuanbao Investment Management Partnership (Limited Partnership) , the Company’s shareholder |
| Cixi Goneo | refers to | Cixi Goneo Electrics Co., Ltd., a wholly-owned subsidiary of the Company |
| Shanghai Goneo | refers to | Shanghai Goneo Electrics Co., Ltd., a wholly-owned subsidiary of the Company |
| Ningbo Goneo | refers to | Ningbo Goneo Electrics Co., Ltd., a wholly-owned subsidiary of the Company |
| Banmen Electric Appliance | refers to | Ningbo Banmen Electric Appliance Co., Ltd., a wholly-owned subsidiary of the Company |
| Goneo Photoelectric | refers to | Ningbo Goneo Photoelectric Technology Co., Ltd., a wholly-owned subsidiary of the Company |
| Goneo Precision | refers to | Ningbo Goneo Precision Manufacturing Co., Ltd., a wholly-owned subsidiary of the Company |
| Goneo Digital | refers to | Ningbo Goneo Digital Technology Co., Ltd., a wholly-owned subsidiary of the Company |
| Goneo International Trading | refers to | Ningbo Goneo International Trading Co., Ltd., a wholly-owned subsidiary of the Company |
| Xingluo Trading | refers to | Ningbo Xingluo Trading Co., Ltd., a wholly-owned subsidiary of the Company |
| Electric Sales | refers to | Ningbo Goneo Electric Sales Co., Ltd., a wholly-owned subsidiary of the Company |
| Goneo HK | refers to | Goneo International Trading (HK) Limited, a wholly-owned subsidiary of the Company |
| Goneo Low Voltage | refers to | Ningbo Goneo Low Voltage Electric Co., Ltd., a wholly-owned subsidiary of the Company |
| Hainan Dacheng | refers to | Hainan Dacheng Supply Chain Management Co., Ltd., a wholly-owned subsidiary of the Company |
| Murora Intelligent | refers to | Guangdong Murora Intelligent Lighting Co., Ltd., a wholly-owned subsidiary of the Company |
| Goneo New Energy | refers to | Ningbo Goneo New Energy Technology Co., Ltd., a wholly-owned subsidiary of the Company |
| Information Technology | refers to | Shanghai Goneo Information Technology Co., Ltd., a wholly-owned subsidiary of the Company |
| Intelligent Technology | refers to | Ningbo Goneo Intelligent Technology Co., Ltd. |
| Shenzhen Intelligent | refers to | Shenzhen Goneo Intelligent Information Co., Ltd., a wholly-owned subsidiary of the Company |
| Domestic Electrical | refers to | Ningbo Goneo Domestic Electrical Appliance Co., Ltd., |
| Appliance | a wholly-owned subsidiary of the Company | |
| Goneo Marketing | refers to | Ningbo Goneo Marketing Co., Ltd., a wholly-owned subsidiary of the Company |
| Hangniu Hardware | refers to | Hangzhou Hangniu Hardware and Electrical Co., Ltd. |
| Dalitek | refers to | Dalitek Intelligent Technology (Shanghai) Inc., a majority-owned subsidiary of the Company |
| Liangniu Hardware | refers to | Hangzhou Liangniu Hardware and Electrical Co., Ltd. |
| Feiniu Hardware | refers to | Hangzhou Feiniu Hardware and Electrical Co., Ltd. |
| Niuweiwang Trading | refers to | Suzhou Niuweiwang Trading Co., Ltd. |
| Cixi Libo | refers to | Cixi Libo Electric Co., Ltd. |
| Yaoyang Trading | refers to | Yichang Yaoyang Trading Co., Ltd. |
| Huantian Technology | refers to | Hubei Huantian Technology Co., Ltd. |
| Jianke Trading | refers to | Changde Jianke Trading Co., Ltd. |
| Chenhao Electronic | refers to | Beijing Chenhao Electronic Technology Co., Ltd. |
| Guoxin Trading | refers to | Changde Guoxin Trading Co., Ltd. |
| Qiudi Trading | refers to | Hebei Qiudi Trading Co., Ltd. |
| The “Articles of Association” | refers to | The Articles of Association of Goneo Group Co., Ltd. |
| The “Company Law” | refers to | The Company Law of the People’s Republic of China |
| The “Securities Law” | refers to | The Securities Law of the People’s Republic of China |
| A-stock | refers to | RMB-denominated ordinary stock |
| CSRC | refers to | China Securities Regulatory Commission |
| The Ministry of Finance | refers to | The Ministry of Finance of the People’s Republic of China |
| Sinolink Securities | refers to | Sinolink Securities Co., Ltd. |
| SSE | refers to | The Shanghai Stock Exchange |
| PCCPA or the “Independent Auditor” | refers to | Pan-China Certified Public Accountants LLP |
| RMB RMB’000 RMB’0,000 RMB’00,000,000 | refers to | Expressed in the Chinese currency of Renminbi Expressed in thousands of Renminbi Expressed in tens of thousands of Renminbi Expressed in hundreds of millions of Renminbi |
II Terminology
| Civil electrical appliances | refers to | Products that are typically purchased at the discretion of consumers and are suitable for use at home, in the office and on other occasions for power connection, transmission, storage, conversion, control and other functions, such as adaptors, wall switches and sockets, circuit breakers, distribution boxes, LED lamps, etc. |
| Adaptors | refers to | Products that are produced in accordance with GB/T 2099.3-2015 Plugs and Socket-outlets for Household and Similar Purposes -- Parts 2-5: Particular Requirements for Adaptors, GB/T 2099.7-2015 Plugs and Socket-outlets for Household and Similar Purposes -- Parts 2-7: Particular Requirements for Extension-cord Sockets and GB/T 2099.1-2008 Plugs and Socket-outlets for Household and Similar Purposes -- Part 1: General Requirements, as well as similar foreign standards, and are commonly referred to as adaptors in the Company. Consumers or peer companies often call adaptors socket-outlets, power strips, portable sockets, extension-cord sockets, or power converters. |
| PDU | refers to | Power Distribution Unit. PDU is an electric connection product suitable for power distribution at the data center end that can make power distribution more orderly, reliable, safe, professional and |
| beautiful and make power supply maintenance more convenient and reliable. | ||
| Wall switches and sockets | refers to | Wall switches and wall sockets. Specifically, a wall switch refers to a device mounted on the wall for switching on/off the current of one or more circuits and is commonly used to control the on/off status of lighting lamps. A wall socket, also known as a fixed socket, is an electrical accessory mounted on the wall, with a socket inserted with a pin of a plug and installed with terminals for connecting soft cables and hard wires, and is often used to provide a power supply interface for electrical products. |
| Smart ecosystem | refers to | A novel, intelligent household appliance network that builds an interconnected smart home ecosystem. |
| LED lighting | refers to | Light sources that are produced using light-emitting diodes (such as LED bulb lamps), or luminaries that are produced using LED as a light source. |
| No-main-lamp lighting | refers to | A lighting design style and lighting without the main light source, that is, a lighting design technique through which downlights, spotlights, light belts, track lights and other luminaries are used to create a light (light and shadow) atmosphere in a point-line-surface combination manner. |
| Charging plugs | refers to | Portable chargers that are suitable for AC charging of new energy vehicles and special protectors used to connect household sockets and electric vehicles, with such functions as over-voltage and under-voltage protection, over-current protection and leakage protection. |
| Charging points | refers to | Fixed charging devices for AC charging of new energy vehicles that often require special wiring and installation in garages and special parking spaces, with such functions as over-voltage and under-voltage protection, over-current protection, leakage protection, insulation detection, electricity billing, timed charging and reserved charging. |
| Circuit breakers | refers to | A mechanical switching device that can connect, carry and disconnect the current both under normal circuit conditions and under specified abnormal circuit conditions. They are also known as automatic switches and are widely used in households, factories and other distribution circuits. |
| Distribution, delivery, visit and sales | refers to | A sales model in which specialized vehicles are used to provide retail stores with goods distribution, goods delivery, visit services and door-to-door sales on a regular basis along a fixed planned route. |
| BBS | refers to | Bull Business System |
Part II General Information of the Company and Key Financial
Indicators
I Corporate Information
| Company name in Chinese | 公牛集团股份有限公司 |
| Abbr. | 公牛集团 |
| Company name in English | GONEO GROUP CO., LTD. |
| Abbr. | GONEO |
| Legal representative | Ruan Liping |
II Contact Information
| Board Secretary | Securities Representative | |
| Name | Liu Shengsong | Jin Xiaoxue |
| Address | Tower A7, 3888 Yinggang East Road, Qingpu District, Shanghai | Tower A7, 3888 Yinggang East Road, Qingpu District, Shanghai |
| Tel. | 021-33561091 | 021-33561091 |
| Fax | 021-33561091 | 021-33561091 |
| E-mail address | liushengsong@gongniu.cn | jinxx@gongniu.cn |
III General Company Information
| Registered address | East Zone of Guanhaiwei Town Industrial Park, Cixi City, Zhejiang Province |
| Changes of registered address | N/A |
| Office address | Tower A7, 3888 Yinggang East Road, Qingpu District, Shanghai |
| Zip code | 201703 |
| Company website | http://www.gongniu.cn |
| Email address | ir@gongniu.cn |
IV Media for Information Disclosure and Place where this Report Is Lodged
| Media and websites where this Report is disclosed | China Securities Journal, Shanghai Securities News, Securities Daily, and Securities Times |
| Stock exchange website where this Report is disclosed | http://www.sse.com.cn |
| Place where this Report is lodged | The Securities Department of the Company |
V Stock Profile
| Stock profile | ||||
| Class of stock | Stock exchange | Stock name | Stock code | Formerly used stock name |
| A-stock | Shanghai Stock exchange | Goneo Group | 603195 | / |
VI Other Information
| Domestic CPA firm appointed by the Company | Name | Pan-China Certified Public Accountants LLP |
| Office address | Block B, China Resources Building, 1366 Qianjiang Road, Jianggan District, Hangzhou | |
| Accountants writing signatures | Yao Benxia, and Chen Zhuoyan |
VII Key Financial Information for the Past Three Years(I) Key accounting information
Unit: RMB
| Key accounting information | 2023 | 2022 | 2023-over-2022 change (%) | 2021 | ||
| Restated | Before | Restated | Before | |||
| Operating revenue | 15,694,755,606.24 | 14,081,373,030.94 | 14,081,373,030.94 | 11.46 | 12,384,916,337.51 | 12,384,916,337.51 |
| Net profit attributable to the listed company’s shareholders | 3,870,135,376.47 | 3,188,709,584.89 | 3,188,619,359.56 | 21.37 | 2,780,180,761.75 | 2,780,360,732.66 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 3,703,188,544.28 | 2,904,238,642.83 | 2,904,148,417.50 | 27.51 | 2,632,296,518.65 | 2,632,476,489.56 |
| Net cash generated from/used in operating activities | 4,827,282,098.55 | 3,057,914,218.16 | 3,057,914,218.16 | 57.86 | 3,014,326,741.14 | 3,014,326,741.14 |
| 31 December 2023 | 31 December 2022 | Change of 31 December 2023 over 31 December 2022 (%) | 31 December 2021 | |||
| Restated | Before | Restated | Before | |||
| Equity attributable to the listed company’s shareholders | 14,445,921,963.84 | 12,398,775,930.17 | 12,398,865,675.75 | 16.51 | 10,755,571,605.72 | 10,755,751,576.63 |
| Total assets | 19,762,205,724.93 | 16,651,920,835.06 | 16,650,497,198.32 | 18.68 | 15,477,458,023.79 | 15,473,904,666.62 |
(II) Key financial indicators
| Key financial indicator | 2023 | 2022 | 2023-over-2022 change (%) | 2021 | ||
| Restated | Before | Restated | Before | |||
| Basic earnings per share (RMB/share) | 4.36 | 3.59 | 3.59 | 21.45 | 3.13 | 3.13 |
| Diluted earnings per share (RMB/share) | 4.36 | 3.59 | 3.59 | 21.45 | 3.13 | 3.13 |
| Basic earnings per share before exceptional gains and losses (RMB/share) | 4.18 | 3.27 | 3.27 | 27.83 | 2.96 | 2.96 |
| Weighted average return on equity (%) | 29.20 | 27.88 | 27.88 | Up by 1.32 percentage points | 28.28 | 28.28 |
| Basic earnings per share (RMB/share) | 27.94 | 25.39 | 25.39 | Up by 2.55 percentage points | 26.76 | 26.76 |
Explanations about the key accounting and financial information for the past three years:
√ Applicable □ Not applicable
The Company implemented the 2022 final dividend payout on 8 June 2023. Based on the totalshare capital of 601,077,590 shares minus the shares in the repurchased share account at the recorddate, a bonus issue of 0.48 additional share per existing share was carried out, and the total sharecapital increased to 889,594,811shares upon the bonus issue. To ensure the comparability of basicand diluted earnings per share, data during the prior year have been adjusted accordingly.Net cash generated from operating activities increased by RMB1,769.3679 milllion during2023 compared with last year, primarily driven by the decreased material costs and inventories.
VIII Accounting Data Differences under China’s Accounting Standards for BusinessEnterprises (CAS) and International Financial Reporting Standards (IFRS) and ForeignAccounting Standards(I) Differences in net profit and equity attributable to the listed company’s shareholders underCAS and IFRS
□ Applicable √ Not applicable
(II) Differences in net profit and equity attributable to the listed company’s shareholdersunder CAS and foreign accounting standards
□ Applicable √ Not applicable
(III) Reasons for accounting data differences above
□ Applicable √ Not applicable
IX Key Financial Information for 2023 by Quarter
Unit: RMB
| Q1 (January-March) | Q2 (April-June) | Q3 (July-September) | Q4 (October-December) | |
| Operating revenue | 3,334,141,811.90 | 4,258,286,219.83 | 4,014,398,938.17 | 4,087,928,636.34 |
| Net profit attributable to the listed company’s shareholders | 735,953,763.11 | 1,085,963,185.80 | 991,319,113.45 | 1,056,899,314.11 |
| Net profit attributable to the listed company’s shareholders before exceptional gains and losses | 645,437,841.61 | 1,020,193,181.61 | 957,161,316.24 | 1,080,396,204.82 |
| Net cash generated from/used in operating activities | 1,439,163,828.60 | 1,539,850,319.44 | 1,041,360,458.80 | 806,907,491.71 |
Indicate whether any of the quarterly financial data in the table above differs from what have beendisclosed in the Company’s past periodic reports.
□ Applicable √ Not applicable
X Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
| Item | 2023 | Notes (if applicable) | 2022 | 2021 |
| Gain or loss on disposal of | -5,614,733.30 | -3,980,890.27 | -9,714,625.18 |
| non-current assets (inclusive of impairment allowance write-offs) | ||||
| Government grants recognised in profit or loss (exclusive of those that are closely related to the Company's normal business operations and given in accordance with defined criteria and in compliance with government policies, and have a continuing impact on the Company's profit or loss) | 191,833,723.62 | 130,991,587.24 | 388,196,973.94 | |
| Gain or loss on fair-value changes in financial assets and liabilities held by a non-financial enterprise, as well as on disposal of financial assets and liabilities (exclusive of the effective portion of hedges that is related to the Company's normal business operations) | 7,786,015.00 | -7,385,680.00 | 11,107,836.63 | |
| Capital occupation charges on a non-financial enterprise that are recognised in profit or loss | 331,702.44 | 590,062.34 | 8,121,324.51 | |
| Gain or loss on assets entrusted to other entities for investment or management | 190,904,769.99 | 279,374,491.92 | 171,623,256.63 | |
| Gain or loss on loan entrustments | ||||
| Asset losses due to acts of God such as natural disasters | ||||
| Reversed portions of impairment allowances for receivables which are tested individually for impairment | ||||
| Gain equal to the amount by which investment costs for the Company to obtain subsidiaries, associates and joint ventures are lower than the Company’s enjoyable fair value of identifiable net assets of investees when making investments | ||||
| Current profit or loss on subsidiaries obtained in |
| business combinations involving entities under common control from the period-begin to combination dates, net | ||||
| Gain or loss on non-monetary asset swaps | ||||
| Gain or loss on debt restructuring | ||||
| One-off costs incurred by the Company as a result of discontinued operations, such as expenses for employee arrangements | ||||
| One-time effect on profit or loss due to adjustments in tax, accounting and other laws and regulations | ||||
| One-time share-based payments recognized due to cancellation and modification of equity incentive plans | ||||
| Gain or loss on changes in the fair value of employee benefits payable after the vesting date for cash-settled share-based payments | ||||
| Gain or loss on fair-value changes in investment property of which subsequent measurement is carried out using the fair value method | ||||
| Income from transactions with distinctly unfair prices | ||||
| Gain or loss on contingencies that are unrelated to the Company's normal business operations | ||||
| Income from charges on entrusted management | ||||
| Non-operating income and expense other than the above | -172,631,226.63 | -58,763,095.61 | -327,898,293.86 | |
| Other gains and losses that meet the definition of exceptional gain/loss | 1,712,485.52 | 2,739,167.53 | ||
| Less: Income tax effects | 45,407,663.66 | 57,894,123.94 | 96,291,397.10 | |
| Non-controlling interests effects (net of tax) | 255,755.27 | 173,895.14 | ||
| Total | 166,946,832.19 | 284,470,942.06 | 147,884,243.10 |
Items unlisted in the Explanatory Announcement No. 1 on Information Disclosure for CompaniesOffering Their Securities to the Public—Exceptional Gain/Loss Items are identified as exceptionaland the items are of a significant amount, and exceptional gain/loss items listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Gain/Loss Items are identified as recurrent.
□ Applicable √ Not applicable
XI Items Measured at Fair Value
√ Applicable □ Not applicable
Unit: RMB
| Item | Opening balance | Closing balance | Change in the period | Effect on current profit |
| Held-for-trading financial assets | 6,949,000,000.00 | 9,727,000,000.00 | 2,778,000,000.00 | |
| Derivative financial assets | 643,100.00 | 8,263,755.00 | 7,620,655.00 | |
| Receivables financing | 1,036,801.70 | 5,359,014.96 | 4,322,213.26 | |
| Held-for-trading financial liabilities | 18,200,000.00 | -18,200,000.00 | 18,200,000.00 | |
| Other current assets | 283,755,939.73 | 50,265,479.45 | -233,490,460.28 | |
| Total | 6,968,879,901.70 | 9,740,622,769.96 | 2,771,742,868.26 | 18,200,000.00 |
XII Other Information
□ Applicable √ Not applicable
Part III Management Discussion and Analysis
I Discussion and Analysis on Operations
In 2023, we embraced change and innovation amidst a complex economic landscape both athome and abroad. Thanks to our unwavering dedication, we achieved commendable results, withour operating revenue and profit soaring to record highs as we attained robust growth acrosseconomic cycles. During the year, we recorded operating revenue of RMB15.695 billion, up 11.46%year on year; and a net profit attributable to our shareholders of RMB3.87 billion, representing anincrease of 21.37% from the year earlier. We further fortified our strengths in the electric connectionbusiness. Despite profound adjustments in the real estate sector, we still managed to secure rapidgrowth in the smart electrical lighting business. And, riding tailwinds, we achieved leapfrogdevelopment in the new energy business. As a result, the visibility and reputation of our brand—Goneo—have been further enhanced.In 2023, the Company's brand value reached a new high, ranking 351st among World BrandLab China’s 500 Most Valuable Brands 2023 with a brand value of RMB24.567 billion. TheCompany's subsidiaries, Goneo Low Voltage and Intelligent Technology, were recognised for thefirst time as high-tech enterprises. The project “Pilot Demonstration of Electrical Products andAppliances Supply Chain Collaboration Based on Industrial Internet Platform” was successfullyselected to be on the list of “National Pilot Demonstration of Industrial Internet” by the Ministry ofIndustry and Information Technology of China. In addition, the Company was named one of the“Top 100 Manufacturing Enterprises of Zhejiang Province”, one of the second batch of Zhejiang's"Cloud-based Enterprises", and a Zhejiang "Eagle Enterprise" (Technology Leadership Type),among other honours.
In 2023, the Company achieved remarkable results as follows:
(I) The electric connection business continued to drive product upgrades, andstrengthened Goneo as a trendy and high-end brand.
In 2023, the electric connection business adhered to its positioning as an “Expert in SafeElectricity Use”, continually innovating and upgrading products around consumer demands. It ledthe trends towards younger, more upscale, and smarter industry developments. Over the year, thisbusiness achieved revenue of RMB7.387 billion, marking a 4.77% increase compared to theprevious year.
1. Product side:
(1) Adaptors
In 2023, our adaptors focused on innovation in three key directions: addressing the upgradedneeds of users, pinpointing requirements in niche scenarios, and catering to distinctive demands ininternational markets.
Regarding user upgrade demands, aligned with trends towards younger demographics,premium offerings, and smart technology, the adaptors underwent significant enhancements
including the launch of highly popular product series such as the Track Socket, the High-aestheticSocket, the Global Travel Converter, and the Generation Z Socket Series. In 2023, we collaboratedwith esteemed supercar designer Fabrizio Giugiaro in crafting our Master Track Socket, featuringmechanical safety shutters and an intelligent LCD display. This industry-first smart design reaffirmsGoneo's leadership in niche markets. Our High-aesthetic Socket breaks the mould of traditionaldesigns by combining stunning looks with high performance, and incorporating gallium nitride fast-charging technology to redefine the aesthetic appeal of desktop sockets. In response to the explosivetravel demands in the post-pandemic era, we systematically upgraded our travel converter series tocompact, multifunctional Fast-charging Travel Converter Series, bolstering our presence in therapidly growing business travel segment. Addressing the trend towards a younger consumer base,this year also saw the launch of the cost-effective, stylish Generation Z Socket Series, invigoratingthe youthful brand image of our adaptors with their vibrant product designs.For niche scenario pain points, based on user research, the Company introduced a series ofinnovative products in 2023. Addressing specific needs such as overcharging protection for electricbikes, accessing power in tight spaces, and powering high-capacity devices, the Company launchedproducts including the overcharge protection socket for electric bikes, extension cord, and a 16Aadaptor plug, continuously refining the electrical experience in segmented user scenarios. Ourproducts like PDUs and industrial connectors, targeting B2B sectors such as data centre powerdistribution and factory production, have also been well-received in the market. For electriciansseeking ultimate safety and value for money, our economical multi-outlet adaptors, professional-grade, and electrical accessory products further solidified our industry-leading position.To better advance our internationalisation strategy, in 2023, the adaptor business leveragedlocal market research and consumer insights to innovate products tailored for the Southeast Asianmarket. We planned and launched several locally adapted innovative products, offering competitiveand differentiated user experiences to international consumers, effectively enhancing our brandrecognition and reputation abroad.
(2) Digital accessories
In 2023, Goneo Digital continued to pursue a strategy of third-party premium offerings. Basedon a deep exploration of all-scenario electricity needs and keen market insights, a series ofinnovative products were launched. For multi-scenario, small-volume socket needs, the Companybroke through industry technological barriers with innovative structural and industrial designs tointroduce the "Mini Power Cabin" Socket, meeting dual demands for functionality and performance.For desktop electricity usage scenarios, the Company introduced a vertical smart display socket thatfeatures all-around power access, safety, and space-saving benefits, making it a preferred choice fordigital product setups. Addressing fast-charging scenarios, the Company combined its proprietary"Automatic Power-Off When Full" technology to introduce gallium nitride overcharge protectionchargers, enhancing the battery health of digital devices. For wireless charging scenarios, Goneo
launched a new magnetic suction wireless portable charger, significantly improving the chargingexperience in mobile settings.
2. Channel side
Electric connection products are primarily sold through the Company’s traditional strengths inoffline hardware channels, digital channels, and e-commerce. Currently, the Company has over750,000 hardware channel outlets and over 250,000 digital channel outlets, with a widely distributednetwork of end points that can provide consumers with quality products and services promptly andconveniently.In 2023, the hardware channels continued to deepen the "Distribution, delivery, visit and sales"system, strengthening channel capabilities. Centred around adaptors and leveraging synergies withelectrical tape, dry batteries, and power tools, measures such as improving store displays andcreating dedicated sales areas enhanced per-store efficiency and output, effectively driving salesacross various products while increasing the loyalty between end-point sales locations and customergroups. Additionally, the Company actively developed new channel outlets like boutique stores,trendy toy shops, stationery stores, and high-end supermarkets to promote an upgrade in storeformats and enhance the brand image. The operational capabilities of the Company’s hardwarechannels have continuously improved through lean product planning, market strategies,empowering distributor teams, supporting weaker markets, upgrading customer managementsystems, and new media marketing tools, effectively enhancing operational efficiency and reducingbusiness risks.
Digital channels continued to diversify, including mobile repair shops, digital accessory stores,small convenience stores, points malls, and gift channels, using mobile batteries and similarcategories to drive store upgrades towards service-oriented directions, offering consumersintegrated products and solutions. Channels also built lean marketing capabilities and short-videostreaming for local marketing, enabling traffic for end-point stores and collaborating with online e-commerce channels to rapidly drive business growth.
In 2023, the online e-commerce channels continually consolidated the industry-leadingposition of the electric connection category, with track socket sales reaching new heights and marketshare continuing to climb on a high base, driving overall industry growth and consumer upgrades.The Company’s e-commerce channel has progressively established a full-link, refined managementfrom innovative product development to hit product creation, further strengthening the productinnovation advantage, while also accelerating the construction of emerging platform channels,creating differentiated layouts based on the marketing characteristics of various e-commerceplatforms, establishing a frontline communication with consumers, and steadily enhancing Goneo’selectric connection category’s market position across the online channels.
3. Supply chain side
The Company has established a comprehensive, vertically integrated supply chain in theelectric connection manufacturing sector. Starting with the processing of raw materials such as
copper and plastic particles, we have moved towards in-house production. With ongoingenhancements in lean supply chain management, automation, and informatisation, the Company hasdeveloped significant competitive advantages in quality, cost, and efficiency.In 2023, our adaptor factories utilised new-generation information technologies such asindustrial internet and artificial intelligence to pioneer new delivery models like networkcollaboration and personalised customisation. This led to the initial realisation of digital design,intelligent production, smart management, collaborative manufacturing, and secure control withdata interconnectivity. These advancements earned the factory accolades as Zhejiang Province’s"Mobile Socket Smart Factory" and Ningbo’s "Factory of the Future". Additionally, continuousinnovation and optimisation in production processes, such as promoting modular and resistancewelding techniques, have enabled the automated mass production of wireless products, significantlyboosting production efficiency.
The digital factory, targeting "high flexibility and rapid delivery", has embraced lean factorytransformation and piloted the "small and micro business entity" model with USB cable products,focusing on "increasing output and reducing input". This approach has driven a rapid closed loop inresearch, production, and sales, resulting in notable improvements in per capita output and inventoryturnover rates. In automation applications, the continuous introduction of lean equipment andimplementation of regional automation have led to the establishment of an automated benchmarkline for surge-resistant products. In process development, the capability to produce "high power,small volume" product lines has been swiftly established, from surface treatments to productiontesting, and from lamination processes to high-precision welding, continuously enhancing ourcapabilities.
4. Brand side
The Company firmly adheres to its brand positioning as an “Expert and Leader in SafeElectricity Use”, aligning key projects with the brand. Through synchronised updates across onlineand offline endpoints, official websites, and new media at all consumer touchpoints, we havefacilitated an enhancement of the brand value. In 2023, leveraging innovative products andemploying media channels with high interactivity, wide coverage, and precise targeting, weassembled resources including celebrities, influencers, designers, and the media. We launchedmultiple rounds of brand communication campaigns around new products like the Master TrackSocket and the "Mini Power Cabin" Socket. This elevated the profile and popularity of ourrepresentative electric connection categories, rejuvenating consumer perceptions of trendy, high-value and well-designed products, and receiving positive market feedback.
(II) The smart electrical lighting business created a trendy and high-end productecosystem, vigorously promoted the channel reform featuring "flagship stores + new retailmodel", and achieved sustained growth across economic cycles.
In 2023, the Company was committed to creating an ecosystem of smart pre-decorationelectrical products with smart no-main-lamp lighting as the core, and comprehensive pre-decoration
products have been covered, including wall switches and sockets, LED lighting, bathroom heaters,circuit breakers, smart door locks, and smart clothes drying racks. To adapt to the changes inconsumption habits, new progress has been made in vigorously promoting the reform of the newretail pattern featuring "physical flagship stores + online traffic acquisition", meeting the consumers'needs for "one-stop shopping + experience", and tackling the challenges concerning in-depthadjustments in the real estate sector. In the year, the smart electrical lighting business achievedrevenue of RMB7.902 billion, representing a year-on-year growth of 15.37%.
1. Product side
(1) Wall switches and sockets
In 2023, the Company's wall switches and sockets strategy centred around "steadilyestablishing the foundation, targeting high-end markets, making insights into new opportunities,and promoting product innovation". This approach continued to optimise a tripartite combination ofbasic, high-end, and smart products, with strategic new products and innovative items progressingin parallel, enabling us to maintain a leading position in the competitive market.In line with our brand upgrade strategy and consumer pursuit of home aesthetics, in 2023, theCompany launched the Butterfly Wing Family of Ultra-thin Switches, which were well-received fortheir excellent industrial design and user experience, setting a new industry standard for ultra-thinprofiles. The Company also introduced the Cream Style Switch and Socket, closely followingpopular home decor trends and meeting the aesthetic shifts and detailed preferences of the post-90sgeneration. Additionally, to cater to consumers' varied material preferences, we launched the GlassSwitch and Socket, further strengthening the competitiveness of our mid-to-high-end products.Simultaneously, the Company delved deep into user needs research and identified pain points invarious segment scenarios, resulting in the launch of several innovative products such as invisiblesockets, flush-to-floor sockets, and voice-activated switches.Furthermore, targeting overseas and B2B markets, the Company actively carried out theplanning and development of wall switch products. Catering to the differentiated needs of variousconsumer groups and clients, we enhanced our platform-based, modular structural designs,improving product flexibility and expandability, and established an efficient product developmentprocess.
(2) LED lighting
Adhering to the positioning of "eye-caring", and oriented to meeting the needs for light in spaceand behaviour, the Company tapped into customer demand based on different customer groups anddifferent application scenarios, and continued to push forward the research of "light" and theinnovation and application of optical design. It made technological innovation in the directions of"anti-blue light", "visible flicker-free", "full spectrum", "high index", "anti-glare", "comfortablecolour temperature", etc., and is committed to providing consumers with a comfortable, healthylight environment.
In 2023, the basic light source business was driven by high targets, focusing on exploiting newopportunities and developing major products. The Company actively innovated, developing andlaunching several new categories including second-level energy-efficient flat panel lights, high-brightness ceiling lights, tri-proof lights, and solar street lights. These efforts continually enrichedand expanded the product line, gradually perfecting the space lighting solutions for small tomedium-sized engineering projects and commercial users following our home lighting solutions.The decorative lighting business prioritised "eye-caring technology", intelligent controls,platformisation, and standardisation as key directions for business development. In 2023, theCompany completed a comprehensive upgrade of its decorative lighting products, covering a rangeof design styles including "modern and simple" and "understated luxury", and highlighting featuressuch as "ultra-thin", offline voice control, and "quick-installation structures". To meet higher userexpectations for the appearance, quality, and lighting effects of fixtures, we introduced the flagshipeye-care product, the "Goneo Natural Light Series". This product uses a full-spectrum light sourcethat closely mimics natural light, providing a comfortable lighting experience and an ultra-thin,minimalist design, which received positive market feedback. Furthermore, the competitiveness ofour luminary products was comprehensively enhanced. The Company launched the new T02PLUSDownlight Series, which are noted for their high quality feel and deep anti-glare properties; and theT01PLUS Series, positioned as the ultimate cost-effective metal downlight, also showed strongmarket competitiveness.The portable lighting business continued to focus on reading and supplementary lightingscenarios. For reading scenarios, we successfully launched the new generation of eye-caring desklamps – the Xingyue Series. This series underwent a complete upgrade in optical technology,utilising honeycomb anti-glare technology to effectively reduce both direct and reflective glare, thusminimising eye damage. It innovatively employs dual three-dimensional lighting effects to achieveuniform and extensive lighting. This product has received the highest AAA-level certification fromthe SMQ Health Lighting Product Certification, the highest AA-level under the PerformanceRequirements for Table Lamps for Paper Task GB/T 9473-2017, and certification for Preventionand Control of Myopia in Children and Adolescents. For supplementary lighting scenarios, weintroduced decorative lighting that fits user needs – the Cat Eye Cabinet Light. Its small hillock lightshape adds different levels to the lighting arrangements in homes, greatly enriching consumers'lighting scenarios.
(3) Smart no-main-lamp lighting
Focusing on consumers' upgraded demand for minimalist decoration style and intelligent lightexperience, the Company has made smart no-main-lamp lighting a key development direction forits lighting business and is committed to creating a healthy, comfortable and professional lightenvironment and convenient control experience for users, better interpreting the lighting levels andlight atmosphere of a space. The Company promotes the rapid development of its no-main-lamplighting business through the dual-brand strategy of Goneo and Murora.
The Goneo brand focuses on high cost-performance no-main-lamp lighting. In 2023, the brandintroduced several high-quality, cost-effective product series including the T04, T03 Plus, and P06anti-glare downlight series; S04 ultra-narrow magnetic track light series; high Colour RenderingIndex ("CRI") COB soft light strips, and SMD bright light strips. Among these, the P06 deep anti-glare "small hillock" wall washer light quickly gained market recognition as a successful exampleof product definition meeting user needs.
The Murora brand is dedicated to providing consumers with integrated smart lighting solutions.In 2023, Murora no-main-lamp lighting, in collaboration with international lighting masters,launched professional lighting packages that include downlight, rail light, strip light, ambient light,and Murora MOS system. The Master T200 and S100 series are industry leaders in design, userexperience, and optical platforms, and quickly won the G-Mark award upon release. The proprietaryMurora MoS system focuses on the core lighting needs of users, continuously optimising anditerating the user experience in dimensions such as mass appeal and quality experience. Togetherwith smart screens and peripheral series ecosystem products, it enables linked home scenarios,providing users with a comfortable smart home experience.
(4) Ecosystem-based products
To meet consumers' needs for one-stop shopping during pre-decoration, the Company shiftsfrom providing products to providing better scenario-based solutions, constantly iterating andinnovating products such as bathroom heaters, smart door locks, smart clothes drying racks, smartcurtain machines, fan lights and circuit breakers. A household pre-decoration intelligent ecosystemwith smart no-main-lamp lighting as the core has been in shape.
In 2023, the Company's domestic electrical appliances business steadfastly adhered to a user-centric philosophy, attuning to trends in home decor, demographic characteristics, usage contexts,habits, and insights into consumer pain points to capture the differentiated demands for variousspatial scenarios. In the bathroom scenario, the Company introduced the Y30 series of bathroomheaters, conceptualised around the "Heaven Round, Earth Square" design philosophy, the Y18quick-heating bathroom heater utilising new materials and technologies, and the M02 electric warmair dryer, all notable for their aesthetically pleasing designs and superior performance. In the diningand bedroom scenarios, products such as the ultra-thin invisible fan lamp and the bladeless fan lampwere launched, which garnered multiple national and international design awards. The bladeless fanlamp broke industry conventions with its novel appearance, technology, and user experience,earning widespread acclaim from both the industry and consumers. For the balcony scenario, in2023, the Company introduced the "Ultra-thin Cicada Wing" J04 series and the linear J06 series ofclothes drying machines, aligning with the aesthetic preferences of younger consumers and meetingthe evolving demands of home decor and aesthetic spatial arrangements.
In 2023, the circuit breaker business continued to innovate on its existing home decor productplatform, focusing on "easy installation, ease of use, and superior service" to further enhance thehome decor product line. It also developed and expanded products specifically for factory
engineering clients and niche new energy industry scenarios, adding a series of industry-specificproducts including high-voltage DC, miniaturisation, and smart technologies. Additionally,capitalising on market opportunities, the Company expanded its range in the instrumentation sector,launching several types of electric meters and progressively moving towards smart, platform-basedsolutions, helping to solidify its presence in the leading home decor market channels.
The smart door lock business in 2023 continued to explore and gain insights into the homeentry scenario and deepened its in-house and platform-based strategies. By creating flagshipproducts, the entire line was optimised for performance with a competitive strategy of standard"peephole + screen" configurations, effectively lowering the entry barriers for smart door locks andeliciting an excellent market response. The newly launched high-end flagship "Pianai" seriesfeatured a unique eccentric handle design, winning multiple international awards. Its in-housedeveloped new generation Dynamic integrated drive not only enhanced the lock's performancestability and smoothness but also significantly improved battery life. In 2023, Goneo’s safety smartlocks Q04PF PRO and Q32P were among the first globally to receive the "T?V RheinlandCertification" jointly issued by T?V Rheinland and the Ministry of Public Security's Testing Centerin China, as well as being among the first in the lock industry to be awarded the "CQC Certification"by the China Quality Certification Centre, providing users with smarter, safer, and more user-friendly smart door locks through high technology and quality.
2. Channel side
Smart electrical lighting products are primarily sold through the Company’s traditionalstrengths in offline decorative channels and online e-commerce platforms. From 2023, we beganbuilding the Murora no-main-lamp lighting channel from scratch. Currently, the Company boastsover 120,000 decorative channel sales points. In recent years, the Company has actively alignedwith consumer trends by expanding towards home decoration companies and by vigorouslypromoting comprehensive and specialised upgrades in stores to better serve the one-stop buyingneeds at the pre-decoration stage of home refurbishments.
In 2023, the decorative channels facilitated the market penetration of wall switches and sockets,LED lighting, domestic electrical appliances, Goneo no-main-lamp lighting, and smart door locksinto county and town markets. This year also saw the initiation of a comprehensive flagship storeconstruction plan, which significantly drove the development of all product categories. In line withindustry trends, the decorative channels energetically expanded top-tier decoration enterprises tocreate home electrical solutions centred around no-main-lamp lighting, wall switches, and tracksockets. Meanwhile, through the development of smaller decoration firms and small-to-mediumprojects, new strategic growth channels were established. In 2023, the decorative channels activelyutilised the Bull Business System’s methodological tools to empower channel partners, enhancingchannel capabilities through lean market planning, value sales, and lean retail strategies.
The smart electrical lighting products saw sustained growth in online e-commerce channels in2023. Wall switches led the brand’s upgrade to high-end and stylish with the online ultra-thin large
panel series, achieving a breakthrough in overall online market share; the flagship store for thelighting category has become a benchmark in the industry; innovative products such as the bladelessfan lamp achieved breakthrough growth. The Company maintained robust growth on traditionalstrength e-commerce platforms like Tmall and JD.com, leading the industry, while simultaneouslyaccelerating layouts on emerging platforms like Douyin and Pinduoduo. For the decorativechannel’s flagship stores, new retail models introduced are gradually utilizing digital methods toblend online and offline traffic, capturing consumer needs more accurately, driving productinnovation and service upgrades, effectively integrating resources, and enhancing operationalefficiency.In 2023, the Murora no-main-lamp lighting professional channel completed a systematicconstruction of its marketing network, rapidly assembling a nearly 100-person professional team,forming an efficient channel structure of company-dealer-Murora experience store. Murora storesnow broadly cover all provincial capitals, most prefecture-level cities, and economically developedregions across the country. To ensure smooth business development, the Company specificallyestablished an empowerment team, creating an integrated training system of "tell, teach, practice,lead", combining online and offline elements, focused on empowering storefronts in customeracquisition, lighting design, and store operations. In 2023, nearly 300 marketing-oriented lightingdesigners and outstanding store sales management personnel were trained and certified, and digitaltools were developed to assist storefronts in efficient operations, laying a solid channel foundationfor the sustainable development of Murora no-main-lamp lighting.B2B channels have actively explored engineering project businesses, becoming an importantswitch partner for construction projects in regions such as Beijing-Tianjin-Hebei, Chengdu-Chongqing Economic Circle, and the Guangdong-Hong Kong-Macao Greater Bay Area, andfocusing on creating benchmark projects in affordable housing, education, hotels, and corporateinfrastructure; continuing to focus on expanding the business of fully furnished properties, securingongoing cooperation with top real estate companies like Taikang, Poly, and Longfor.
3. Supply chain side
Leveraging years of accumulated manufacturing management expertise, the Company hasestablished a deeply integrated supply chain system around various categories of its smart electricallighting business. Wall switches benefit from globally leading manufacturing bases in terms of scaleand efficiency. The manufacturing strengths of basic light sources and decorative lighting areincreasingly evident, while other ecosystem businesses focus on in-house research and production,actively promoting lean, automated, and digital supply chain developments. These initiatives haveyielded substantial results in delivery achievement, quality assurance, and cost control.In 2023, our wall switch factory pioneered the industry's first fully automated production linefor switch panels, achieving complete automation from incoming materials to finished productpackaging. Utilizing AI online analysis software integrated with a CCD imaging system, weconducted precise quality management in real-time. Through the optimisation of 5G base station
coverage, we significantly improved the accuracy and timeliness of equipment data collection,anomaly alerts, personnel deployment, and unmanned AGV scheduling, further ensuring productionstability. Additionally, on the foundation of core business process digitalisation and factorydigitisation, the wall switch factory has solidified its production and sales "hub" and supply chain"CPU" through the implementation of APS 3.0 and control tower structures, achieving "digitalintelligence connectivity" from sales to delivery.The light source factory increased its investment in production process innovation in 2023,leading the industry in multiple production efficiency and quality indicators. It developed theindustry's first efficient man-machine combination line for spotlight production, the first unmannedassembly line for column lights, and the first integrated assembly and packaging line for light strips,greatly enhancing product competitiveness.In 2023, the decorative lighting factory, recognising the characteristics of LED variety in smallbatches, primarily used automated and small-scale flexible production lines to ensure the flexibilityof deliveries. Targeted lean improvements and upgrades were made to establish a benchmark factorywith extremely low costs. In line with product upgrade and iteration needs, investments were madein bedroom lights, upgraded M32 ceiling lights, T32 downlights, and others, covering a full rangeof automated production lines that employ industry-leading technologies such as robotics, visualrecognition, and automated testing. The use of TPM, DM, and other lean methodologies has createdan integrated management approach to production technology, substantially improving overallproduction efficiency. On the digital implementation front, comprehensive deployment of APS(Automatic Scheduling System), AMS (Automated Material Management System), and WMS(Warehouse Management System) has achieved full-chain information management from thesupplier side to finished goods warehousing. Building on the existing MES, we deeply integratedthe DM process to establish a digital system for work order and anomaly management, furtherenhancing management and operational efficiency.In 2023, the smart lighting (no-main-lamp lighting) factory pioneered within the industry byachieving 100% production testing of light sources, ensuring uniformity in light colour, andintroducing an industry-first online ageing process through in-house developed equipment toguarantee product quality. The completion of capacity building in the injection moulding and SMTworkshops enhanced mould improvement and electronic capabilities. The preliminary setup of the"Sparrow Factory" model has been achieved, enabling in-house production of certain keycomponents. Looking towards long-term business development, the Company has initiated theconstruction of the intelligent no-main-lamp lighting industrial base in Huizhou Zhongkai Hi-techIndustrial Development Zone. This project has now entered a substantive construction phase and,once completed, will serve as the Company’s research and intelligent manufacturing centre in theGuangdong-Hong Kong-Macao Greater Bay Area.The domestic electrical appliances factory continued to implement lean improvements in 2023,developing a vertical supply chain and achieving 100% in-house production of core components
such as motors, PCBA, sheet metal parts, and injection moulded parts, thereby continuallyenhancing the core capabilities of the supply chain. The lean layout facilitated a production modelthat integrates the same base, building, floor, and area, highly integrating manufacturing units andutilising a BMS full value chain pull system. Improvements in purchasing loops and supplier directJIT delivery ensure a stable supply-demand system. In terms of quality, immersive improvementsempower suppliers to continuously enhance component yield rates, ensuring product quality.Additionally, the implementation of an automated production line for bathroom heaters hasestablished a platform-based, functionally modular, and component-standardised production system,laying a solid foundation for long-term development of smart factories.In 2023, the circuit breaker factory overcame several challenges, including silver spot non-destructive welding and integrated hot riveting welding processes, successfully achieving 100%automation coverage of critical micro-break processes. The introduction of integrated magnetic andthermal welding systems and automatic white pole assembly equipment has placed it at the forefrontof industry manufacturing. On the digital implementation front, the comprehensive introduction ofthe BMS system effectively addresses issues such as material shortages, complex processes, processwastage, and inventory turnover. Combined with the establishment of the Sparrow Factory and theuse of VSM tools to thoroughly review and adjust the product’s full value chain, the factory hasreduced discontinuities to achieve continuous flow, pushing for reductions in inventory, increasedefficiency per square meter, and improved timeliness of deliveries. Automatic deployment ofequipment parameter recipes and inter-process data error-proofing effectively track the full processdata of product testing and optimise parameters, enhancing product consistency and supportingquality improvements.In 2023, the smart door lock factory established fully automatic and semi-automatic productionlines, achieving platform-based, functionally modular, and standardised component production,while striving to develop a vertical supply chain. Core components such as die-casting, PCBA, andinjection moulded parts are now produced in-house, continually reducing product costs andenhancing product quality.
4. Brand side
The Company has vigorously promoted the Goneo brand within the smart electrical lightingsector to enhance both its visibility and reputation. In 2023, we launched several brand promotionand new product campaigns, including the "Butterfly Wing Ultra-thin Switch High-End FashionCampaign" and the "Bladeless Fan Lamp Innovative Category Breakthrough Campaign". Theseinitiatives leveraged the partnership with the aerospace sector, the official announcement of thebrand ambassador, and the cooperation with well-known home designers, generating livelydiscussions on platforms like Douyin, where keywords like "ultra-thin" and "butterfly wing"dominated the home renovation industry rankings. This significantly enhanced the fashionperception of Goneo switches among users and interior designers. Additionally, offline decorative
channel flagship stores also served as crucial media for brand promotion, where an appealing storeimage effectively strengthened consumer trust and enhanced the Goneo brand’s reputation.2023 marked the inaugural year for the "Murora" no-main-lamp lighting brand. The Companyutilised various activities for an all-around brand introduction to the industry and consumers,including a brand launch event, the opening ceremony of the Murora flagship store in Zhongshan,Guangdong, the Guangzhou International Lighting Exhibition ("GILE"), and Dragon TV's "DreamHome". Murora collaborated with its chief lighting consultant, the founding president of theAssociation Des Concepteurs Eclairagistes ("ACE") and the lighting designer of Notre-Dame deParis, to release a comprehensive home lighting solution and intelligent control systems, sparkingindustry discussions on the relationship between light and living spaces, and the layered needs fora healthy lighting environment in homes. The traction from the brand side and continually increasingconsumer recognition have laid a solid foundation for the smooth development of the business.(III) The new energy business swiftly enriched product offerings, increasedcompetitiveness across the board, such as technology, supply chain, and channels, andachieved leapfrog development.In an era marked by changes in energy structures, the Company’s new energy business,leveraging on its electrical technologies and brand advantages accumulated over the past years,quickly completed the transition of product lines and channels from alternating current to directcurrent, from slow charging to fast charging, from single charging point to group charging, fromcharging to energy storage, and from business-to-consumer (To C) to business-to-business (To B),which enables users to enjoy products and services featuring safety, convenience and efficiency andensures the rapid growth of this business. In 2023, the new energy business achieved revenue ofRMB380 million, representing a year-on-year growth of 148.64%.
1. Product side
(1) New energy vehicle charging plugs/points business
In 2023, our new energy business focused on enhancing the comprehensive scenario-basedcharging and discharging experience for electric vehicles, continually perfecting the product layoutand engaging in ongoing personalisation and innovation.For the consumer market ("C-end"), we met segmented user needs through trend-based userresearch by developing an innovative aluminium extruded integrated "portable charging points",which accommodates multiple charging scenarios including "fixed charge", "multi-point fastcharge", and "portable charge". The technologically inspired design of this station received theGerman iF Design Award, garnering positive market feedback. To enrich user options, followingthe classic style charging point, the Company launched the Enjoy Smart Charging Point with powercoverage of 7 kw/11 kw/21 kw, compatible with the majority of mainstream new energy vehiclemodels. These stations feature a 2.8-inch clear display screen that allows users to monitor chargingstatus in real-time, which has been highly praised by users. As the use of electric vehicles in outdoorscenarios (such as camping, car washing, and vehicle rescue) increases, the Company innovatively
developed discharge adapters and surge-protected extension sockets, supporting high power andmultiple types of electrical equipment.For the operator market ("B-end"), the Company rapidly deployed fast-charging direct currentpoints represented by group charging. By using a full matrix topology circuit and integrating withcloud platforms or mobile terminals, these charging points achieve true dynamic power distribution,making the charging system more intelligent and efficient. Through multi-module parallel design,these charging points prevent single-module failures from impacting usability, effectivelyenhancing equipment reliability. Additionally, group charging products can be power-scaledaccording to demand, support remote fault diagnostics, and remote OTA and USB-OTA updates onthe operational platform, significantly improving the equipment's scalability and advancedapplicability. In terms of core components, to enhance the overall stability and leading edge of thedirect current charging points, the Company has independently developed a new core power moduleusing the Vienna rectifier circuit design, achieving efficient power conversion and energy regulation.The Company's full potting process design enhances the sealing, moisture resistance, shockresistance, and heat dissipation of electronic products, significantly increasing the stability,reliability, and durability of the products.
(2) Energy storage business
In 2023, the Company fully engaged in the energy storage sector, strategically positioning itselfin the European market for residential energy storage and in the domestic market for commercialand industrial energy storage. Following initial consumer demand and industry pain point analysis,the residential energy storage solutions underwent differentiated design in several aspects includingsafety, ease of installation, system, and structure: these products feature an integrated fire safetymodule, dual-level active electrical protection, automatic battery module recognition, battery quick-connect terminals that require no wiring, support for up to 100 A high-current charging anddischarging, and a pre-configured diesel generator interface. To better meet the needs of domesticsmall and medium-sized commercial and industrial users for new energy storage and themanagement of industrial electricity demand peaks, the Company launched a 125 kw, 230 kwhliquid-cooled commercial and industrial energy storage cabinet. The AC side supports installationof up to 32 units in parallel, with a one-way conversion efficiency that reaches industry-leadinglevels; the product includes a triple fire safety design, features transformer load tracking capability,and can intelligently adjust its power input; additionally, it has a full power backup supplyfunctionality, capable of off-grid full power output, serving as a backup power source forcommercial and industrial use, accommodating various corporate electricity scenarios.Moreover, to continue building a competitive edge in new energy technologies for the future,the Company not only scans and tracks pioneering opportunities and technologies but has alsoestablished a close collaborative research and development partnership with well-knownuniversities with strong research capabilities within the industry. This collaboration focuses on"integrated photovoltaic storage and charging" and thermal management. Additionally, the
Company actively participates in setting standards in the new energy electricity sector, workingalongside relevant departments, professional associations, and leading industry participants tojointly promote the healthy and orderly development of the industry.
2. Channel side
In 2023, the Company vigorously expanded the domestic offline market for new energycharging points, focusing on the purchasing needs of individual consumers and operator clients. Itinnovated a "four-drive marketing" model to comprehensively boost sales growth. In terms ofchannel development, we continued to enhance the number and coverage of outlets nationwide,providing consumers with a more convenient purchasing experience. The C-end channels werespecifically expanded into new energy automotive trade stores and car beautification shops amongother professional distributors. By the end of the Reporting Period, the Company had developedover 17,000 terminal outlets, initially establishing a sales and service network that spans urban andrural areas. The B-end channels focused on covering government agencies, enterprises, properties,and charging station scenarios, developing clients through precise customer profiling, solidifyingmethodologies for government and enterprise project development, and refining Goneo'sbenchmark operational station integrated construction plans, significantly enhancing expansionefficiency. By the end of the Reporting Period, over 1,500 operator clients had been developed,actively responding to and effectively following the national policy guidance for the constructionof public new energy vehicle charging infrastructure. Moreover, the Company has establishedstrategic partnerships in product and technology areas with companies such as the China Tower,State Grid, Geely Farizon, and Seres. In terms of services, for C-end home charging points, a "one-stop installation" service system has been constructed. After two years of continuous effort, GoneoNew Energy AC charging point installation after-sales service was awarded the Electric VehicleCharging Facility Installation Service Provider Certificate by T?V Rheinland, one of the top fiveglobal authoritative certification bodies and a leading authority in the domestic new energy chargingpoint installation service sector. For B-end customer services, the Company offers a variety ofmodels including charging points + commercial and industrial storage devices, integratedphotovoltaic-storage-charging solutions, and operator ecosystem cooperation. These servicesempower partners in design planning, installation construction, operational lead generation, stationmaintenance, and resource integration, providing clients with high-quality products and rapid-response after-sales service.
Additionally, as an important purchasing channel for C-end consumers, the online e-commercechannel has been collaboratively developed. The Company has established an official flagship storefor the car charging category and has progressively perfected the system of professional industrydistributors and layouts across major e-commerce platforms, with the Company’s productsmaintaining a leading market share among third-party brands.
In 2023, the Company actively explored and validated the commercial and industrial energystorage business sector through marketing models, financial cooperation methods, and industry
studies, as well as through pilot developments for dealers and factories. It summarised andaccumulated marketing methodologies, accelerating the construction of marketing capabilities forthe energy storage business.
3. Supply chain side
Since its establishment, the Company's new energy factory has made manufacturingtechnology innovation a core competency, gradually deepening the vertical supply chain layoutfrom scratch and continuously enhancing quality, cost, and efficiency advantages. In 2023, guidedby lean manufacturing principles, the new energy factory aimed to establish an automotive-gradesupply chain system. Through lean product planning, BPD, and 3P improvement tools, the factoryachieved in-house development and manufacturing of DC group charging products, power modules,European residential energy storage products, and commercial and industrial energy storageproducts. Particularly, the design production capacity of charging points made significant leaps,with production cycles achieving D+1 rapid agile delivery, effectively ensuring the smooth andrapid development of the business.
4. Brand side
As a significant part of Goneo's strategic positioning in the electricity sector, the new energybusiness aligns closely with Goneo's brand image rooted in "safety" within the consumer's mind,successfully extending this brand gene. The "Goneo Safe Charging Point", founded on excellentproduct strength, received high consumer recognition upon launch.
In 2023, to promote the new energy business, the Company actively participated in industry-leading exhibitions, enhancing Goneo's charging point industry influence through professionaldomain advocacy. At the "Second Shanghai International Charging Pile and Battery SwappingStation Exhibition" ("CPSE Exhibition"), which represents the authoritative and professional brandselection in China's charging industry, Goneo showcased its integrated DC charging points, ACcharging points, charging plugs, and discharging plugs. Thanks to its focus on safe electricitytechnologies, quality assurance from lean production, and impressive sales performance, Goneowon two industry accolades: "2023 Top Ten Influential Brands in China's Charging Industry" and"2023 Top Ten Quality Excellence Award in China's Charging Industry". At CES, the largest andmost influential consumer electronics industry event globally, Goneo introduced the new homecharging point flagship model -- Wuji, leading the automotive charging industry into an era of visualinteractive and seamless start charging. Making its debut at the event, Goneo clinched the "2023-2024 International Innovative Enterprise Brand Award", and the Company's outstandingperformance during the exhibition also garnered extensive attention from international media suchas the Associated Press News and Agence France-Presse. Additionally, the Company actively builta promotional matrix around online content, short videos, and interest-based e-commerce platforms,leading the industry in both internal and external search rankings for charging categories, effectivelyenhancing the Goneo charging point brand’s influence.
(IV) Internationalisation: Efforts have been made in seizing opportunities arising acrossthe development cycles of the overseas markets to make the Company's operations moreinternational.In 2023, the Company established the International Business Department, set up overseassubsidiaries in countries and regions such as Germany and Indonesia, accelerated the localisation ofrelevant organisations and teams, rapidly integrated internal and external resources, and fully setsail for the overseas markets. Now all operations are progressing in an orderly manner.Embracing the new cycle of household electrification development in Southeast Asia and otherregions, the Company seized growth opportunities with a focus on products such as electricconnection and electrical lighting. In 2023, the Company took the lead in upgrading its distributorsystem in major Southeast Asian countries. Concurrently, it initiated deeper research and recruiteddistributors in emerging markets such as the Middle East and South America, swiftly expanding itsbusiness into target overseas markets. Focusing on long-term development, the Company adheredto the philosophy of product localisation, planning and developing specialised products tailored tolocal market demands and successfully implementing overseas product plans and arrangements. Interms of market expansion, the Company initiated localised innovation, upgrading the methodologyof "distribution, delivery, visit and sales" for the domestic market to drive the meticulousdevelopment and management of overseas market channels. Meanwhile, the Company establishedoverseas businesses in regional markets, efficiently driving the implementation of its overseasbusiness.Faced with the new cycle of new energy development in Europe and the US, the Companyswiftly shifted its focus to new energy charging and home energy storage sectors. In terms ofproducts, the Company accurately located market demands, swiftly and independently developedand made a range of energy storage products, and gradually integrated into the upstream supplychain. These efforts were aimed at bolstering its cost competitiveness. In terms of channels,leveraging extensive market exploration experience previously, the Company focused onestablishing installer channels. It conducted pilot recruitment and trial sales in key countries suchas Germany, preliminarily validating its business model. By establishing a distributed servicesystem featuring local teams and a user-centric approach and rapidly building and promoting aprofessional brand image, the Company achieved a differentiated competitive edge in the Europeannew energy market. In charging plug and point sectors, the Company initiated overseas marketresearch, completing product planning and supply chain deployment in advance and laying thegroundwork for business promotion.(V) Corporate operation: Continuously deepening organisational, process and digitalreforms to promote high-quality developmentIn 2023, the Company actively carried out organisational reforms and established the ProcessOptimisation and Digitalisation Centre, dedicated to advancing overall process optimisation,resource integration, and digital transformation. Through process optimisation, information
technology, and digital and intelligent means, the Company aimed to build core strength for itsfuture high-quality development.Actively learning from and catching up with industry leaders, in 2023, the Companybenchmarked itself against excellent practices of digital transformation in the industry. It alsocollaborated with Huawei Cloud to jointly draw a blueprint for Goneo Group's digitaltransformation. Through a thorough analysis of the current status and strategic objectives for thefuture, the Company clarified the planning project outcome of its digital transformation blueprint.Specifically, regarding the digital strategic vision guided by "1-3-6-X", "1" represents a completeblueprint; "3" means three goals to be achieved: "Restructuring the decision-making pattern,optimising user experience, and enhancing operational efficiency;" and "6" refers to six measures:
Product R&D standardisation, agile supply and procurement, integrated warehousing and logistics,platform-based marketing services, digital talent supply, and intelligent business management.Additionally, learning from Huawei's methods and practices regarding digital governance, theCompany achieved process reengineering and management transformation, thus supporting thecomprehensive development of its digital transformation and ultimately completing the transitionfrom a functional organisation to a process-oriented organisation. This planning outcome isexpected to guide the direction and path of the Company's digital transformation over the next threeto five years, facilitating the fulfilment of the Company's vision of "becoming a leader in theinternational civil electrical industry".After recent years of continuous enhancement and construction, the Bull Business System("BBS") has evolved into an important operational system driving the Company's improvement ofoperational quality. In 2023, based on the guiding principle of “accompanying throughout thebusiness and delivering results”, BBS formed a full value chain empowerment system with a focuson strategic planning and deployment ("PD"). Through thinking elevation and decomposition forimplementation, business flows were connected, forming a closed loop. This ensured improvementsin BBS would be fully integrated into the entire value chain of production, research, sales, andfunctions, empowering each business to achieve continuous success.In response to the demand for organisational skills and talent supply for future sustainabledevelopment, in 2023, the Company carried out a range of organisational and talent reforms guidedby the principles of elite and efficient organisation and orderly talent filling. This aimed to promoterapid enhancement of cadres' capabilities and the natural formation of talent pools. Meanwhile,regarding human resources, the Company focused on the cultivation and development of varioustalented professionals, such as cadres, experts, skilled talent, and young talent, laying a solid talentfoundation and providing robust support for the Company's development. Furthermore, accordingto changes in the external labour market, the Company further improved its remunerationmanagement and incentive mechanism, enhancing the competitiveness of employee remuneration.To support the promotion of international business more effectively, special adjustments were madeto the welfare and incentive policies for employees stationed overseas/overseas employees, fully
stimulating employees' creativity and enthusiasm and promoting the synchronous improvement ofthe Company's operating results, individual career development, and compensation and benefits.
II Introduction of the Industry where the Company Operates during the Reporting Period
1. Development stage and periodic characteristics of the industry
According to the Industry Classification of National Economy (GB/T 4754--2017) issued bythe National Bureau of Statistics, the main type of the Company's business is assigned to“Manufacturing Industry of C38 Electric Machine and Equipment”. Among them, adaptors, wallswitches and sockets, and digital accessories are all assigned to the specific type of “3899 Other NotClassified Manufacture of Electric Machine and Equipment”. LED lighting is assigned to thespecific type of “3872 Manufacture of Lighting Devices”. And new energy charging plugs/pointsfall in the specific type of “3829 Manufacture of Other Power Distribution and Control Facilities”.With the further improved economic structure as well as the continuous increase of the residentdiscretionary income and consumption level in China, industries such as household appliances,consumer electronics, real estate, home decoration, and new energy vehicles, grow continuouslyand rapidly, promoting the market demand for products in electric connection, smart electricallighting and new energy charging and storage. Nowadays, China is the main producing base ofadaptors across the world. The brands of wall switches and sockets in China’s market are nationallyleading as well as internationally famous. In the field of lighting, China has become the workshopof the world with products sold to around 220 countries and regions. In the field of new energyvehicles, China is the world's largest producer and consumer. In general, traditional electricconnection products such as adaptors and digital accessories, as well as wall switches and sockets,LED lighting and electrical lighting products, have entered a mature period of development, but thesub-categories, such as smart ecosystem household products, and new energy products are in agrowing period with increasing policy support.
Products of electric connection, smart electrical lighting and new energy all have closeconnection to people’s lives with no obvious characteristics of industry cycle and regions. Amongthem, some products of electric connection and smart electrical lighting have been affected by somefactors including cessation of business in major retail terminal end outlets (such as hardware stores,specialized markets and so on) and the reduction of housing fixtures during the Spring Festival.Therefore, the first quarter always has the fewer sales volume all over the year.
2. The Company’s position in the industry
The Company concentrates on the civil electric industry and always upholds the businessphilosophy of “Be Professional and Concentrated, and Go Further”. Since its establishment in1995, the Company has gradually formed three main businesses: electric connection, smartelectrical lighting and new energy. Relying on excellent product quality and sound word of mouth,the reputation of the Goneo brand has increased constantly and its sales volume has always beenleading. During the Reporting Period, the Company ranked 351st among World Brand Lab China’s
500 Most Valuable Brands 2023 with a brand value of RMB24.567 billion. In addition, it wasrecognized as a “National Industrial Internet Pilot Demonstration Enterprise” by the Ministry ofIndustry and Information Technology of China, and named one of the “Top 100 ManufacturingEnterprises of Zhejiang Province”, among other honours.According to the data provided by Info Master, in 2023, the Company’s products such asadaptors and wall switches and sockets had the No. 1 online sales volume on the e-commerceplatform of Tmall; and its new energy vehicle charging plugs and charging points also led the wayamong third-party brands in terms of online sales volume on Tmall.
III Principal Operations of the Company during the Reporting Period
1. Principal operations
During the Reporting Period, the Company focused on the three major businesses of electricconnection, smart electrical lighting and new energy towards its strategic objectives. The primaryproducts of electric connection are adaptors (power strips), digital accessories, etc. The products ofsmart electrical lighting mainly include wall switches and sockets, LED lights (smart no-main-lamplighting), safe circuit breakers, smart bathroom heaters, smart door locks, smart clothes drying racks,smart curtain machines and so on. The products of new energy mainly include new energy vehiclecharging points/plugs, household chargers, industrial and commercial chargers, outdoor portablechargers, etc.
The Company adheres to the vision of “Becoming a Leader in the International Civil ElectricIndustry”, the mission of “providing safe and comfortable electricity experience for customers” andthe development philosophy of “be professional, concentrated and go further”. Since itsestablishment in 1995, the Company has always adhered to the guidance of consumer demand andthe base of product quality. The Company started to from the segmentation of power strips,constantly promoting the innovation of functions, technology and design, and developing batches
| Electric Connection | Smart Electrical Lighting | New Energy |
of new products popular among consumers. Focusing on innovation, the Company has thecomprehensive advantages of product R&D, marketing, supply chain and branding. After years ofdeveloping and expanding, the Company has formed three major business segments: electricconnection, smart electrical lighting and new energy. Besides, it has also formed sustainablebusiness layout in the fields of civil electrical industry and lighting.
2. Business models
(1) Procurement model: The procurement business of the Company mainly includes theprocurement of operating supplies including copper, silver, aluminum, tin, plastic granule, paperpulp, etc., and the procurement of non-operating supplies such as IT materials, administrativesupplies and so on. The Company has established a procurement strategy with quality as the core.It has selected the main supplier through the mechanism of strict supplier entrance and regularexamination and inspection. Besides, the Company established strategic cooperating relationshipswith the main suppliers to ensure the quality and delivery. The Company has set up a procurementsharing platform with professional personnel at the group level. It improves the ability of negotiatingprices, lowers procurement costs, and controls the quality of raw materials through centralisedprocurement, direct procurement from source suppliers, tendering, etc. Furthermore, the Companyhas optimized and improved the suppliers management system, ERP system, manufacturing andstorage system, etc. Meanwhile, it has improved the management of procurement and constantlyimproved the procurement efficiency.The Company has performed centralised procurement of bulk raw materials such as copper,silver, aluminum, tin, plastic granules, paper pulp and so on. In addition, the Company has lockedthe trading price through ways such as forward hedging to reduce the uncertain risk brought by theprice fluctuation in spot market of raw materials.
(2) Production model: The Company has adopted the manufacturing model of “MarketForecast + Safe Inventory”. Products are mainly self-made. Some new products and supportingproducts have been made by adopting the OEM manufacturing mode. Every factory is responsiblefor the production of corresponding products and parts. They have ensured product quality, efficientmanagement and on-time delivery at the same time. Meanwhile, the Company has constantlypromoted the innovation of manufacturing model. By building a balanced production and salessystem, continuously improving lean, automated and digital levels, and insisting on technicalprocess innovation, the Company has gradually enhanced its "order-driven" flexible productionmodel while ensuring product quality and reducing inventory slow moving losses.
(3) Sales model: The Company has established online and offline integrated sales modelthrough omnichannel. The offline sales model is mainly based on distribution and partially basedon direct selling. The Company has promoted the innovative offline sales mode of “distribution,delivery, visit and sales” in the field of civil electrical appliances and implemented refinedmanagement of channels. Through efficiently organizing and transferring dealer resources aroundthe country, and long-term accumulation, the Company has established distribution network with
1.1 million retail stores covering national urban and rural areas. The online channel has covered themainstream e-commerce platforms through direct selling + distribution, with which we have madeevery effort to build the flagship stores into a brand promotion window. The Company has activelyimplemented digital marketing to realize “diversion outside the online channel and sales inside thechannel” with the help of each traffic inlet. Meanwhile, in terms of the smart electrical lightingproducts, the Company has beefed up development and sales in the B-end channels of decorationand engineering projects; and as for the new energy-related products, active efforts have been madeto develop B-end operator customers. Additionally, the Company has actively explored emergingmarkets such as Southeast Asia and markets of developed countries and regions such as the U.S.and Europe to speed up the global business layout.
IV Analysis on Core Competitiveness during the Reporting Period
√ Applicable □ Not applicable
The Company has always adhered to the core values of “Honest, Faithful, Professional andConcentrated”. With forward-looking strategies and the tactics of high-performance operation, ithas built up a sustainable business portfolio and comprehensive competitive edges.(I) Product strength
(1) The Company has established an edge of innovative product development based onconsumer demand.
For long, the Company has attached great importance to research on consumer demand and theinnovation of product planning and research. It has always viewed the promotion of consumerexperience as the primary goal in product research. The Company has established an integratedinnovation system and teams of forward research, product planning and research. It has created andapplied all kinds of new technologies, materials and crafts. Through the constant superposition ofmicro innovation, the Company has promoted a batch of products of electric connection, smartelectrical lighting and new energy with new and different characteristics in the aspects of design,performance, technology and function, which are popular among consumers. During 2023, theCompany was granted 10 international design awards. By the end of the Reporting Period, it hascumulatively won 77 domestic and international design awards, including Red Dot (Germany), iF(Germany), G-Mark (Japan), IDEA, Red Star (China), AWE, DIA (China), etc. In addition, it has aNational Industrial Design Centre recognized by the Ministry of Industry and InformationTechnology of China.
Each year, the Company formulates a three-year technical plan in a rolling manner, leveragingthe organisational structure of the Future Research Institute to plan prospective technologies, keytechnologies, and product application technologies. It has developed a roadmap for achievingtechnical development and leadership goals. Concurrently, the Company has actively integratedinternal and external resources, collaborating with top-notch universities and consulting firms inareas such as new energy-based electrical products, digital intelligent control, healthy lighting, andAI industrial applications. In 2023, the Company experienced a further boost in technological
capabilities, achieving 370 newly authorised patents and nine new software copyrights. By the endof the Reporting Period, the Company had accumulated a total of 2,686 valid patents authorised and68 software copyrights, had been recognised as a national demonstration enterprise in intellectualproperty rights, and had been approved for establishing a national post-doctoral workstation.In terms of promoting healthy development of the industry, for years, the Company hasparticipated in drafting 132 national standards, industry standards and association standards. It isthe vice chairman unit of the Electrical Accessories and Household Controller Branch of the ChinaElectrical Equipment Industry Association. It is also the vice chairman unit of the NationalTechnical Committee for Standardization of Electrical Accessories. What’s more, it is the firstelectrical enterprise in the industry to draft the “Made in Zhejiang” standard and attain certification.
(2) The Company has always adhered to the philosophy of winning through high qualityand put in place an efficient quality control system.Since its founding, the Company has aimed to manufacture high-quality products. The idea ofwinning through high quality has gained support among all in the Company. The Company hasestablished a good brand image and reputation on the market with reliable product quality.
In the aspects of selecting raw materials, procurement, research and production process control,product testing and after-sales service, the Company has established a comprehensive and perfectquality management system of product planning -- product design -- procurement -- production inbatch quantity -- post-sale strictly in line with the national standards, related laws and regulations,and enterprise standards. To ensure the efficient operation of the quality management system, theCompany has established a domestically leading quality test centre. Covering a building area of12,189 square metres, the quality test centre is equipped with three nationally accredited laboratories,which have obtained certifications such as "UL Witness Laboratory," "CNAS Laboratory," "CCCOn-site Laboratory", "WMT-certified Laboratory," "DEKRA Cooperative Laboratory," "HCTCooperative Laboratory," and "T?V Rheinland Authorised Laboratory" from professionalinstitutions. By the end of the Reporting Period, the Company was outfitted with cutting-edgehardware and software research assets valued at over RMB39 million, including more than 1,940sets of testing equipment. This has offered robust resource support for product quality control.Meanwhile, boasting an independent materials research institute, the Company has conducted pre-research and application verification of technologies to bolster material quality, thereby continuallyenhancing product reliability, durability, and sophistication. Additionally, leveraging informationtechnology systems and software platforms such as the Quality Management System ("QMS"),Manufacturing Execution System ("MES"), System Applications and Products ("SAP"), andProduct Lifecycle Management ("PLM"), the Company has put in place a comprehensive processmonitoring and problem-solving information technology-based process that spans aspects such ascustomer quality feedback, new product quality risks, internal manufacturing quality, and supplierquality. This ensures effective implementation and execution of the Company's quality controlsystem.
With long-term accumulation, the Company has formed an efficient and systematic qualitymanagement and control system. It has achieved the management system certification of IS09001,ISO14001, OHSAS18001, and AS9100D. Besides, it has been successively awarded over 20 prizesrelated to quality such as “National Qualified Products of Stable Quality”, “Products with ReliableQuality”, “Demonstration Enterprise of Export Quality and Safety in China”, “Famous BrandProducts in Zhejiang” and “Ningbo Mayor Quality Award”.
(II) Marketing strength
(1) Always being responsive to changes in consumer demand and habits, the Companyhas been foresighted in promoting channel reforms.
Supported by the offline marketing network of more than 1.1 million outlets covering urbanand rural areas, as well as a professional online marketing network, the Company has established amarketing system featuring coordinative online and offline channels in the civil electrical industry.Over the years, with an innovative offline sales model featuring “distribution, delivery, visit andsales”, it has developed in China more than 750,000 hardware channel retailers (including hardwarestores, grocery stores, office supplies stores, supermarkets and so on), more than 120,000specialized decoration and lamp decoration retailers, and more than 250,000 digital accessorieschannel retailers. These channels have expanded the selling points to stores, large market places,professional markets in urban and rural areas, forming an offline marketing network hard to beduplicated. At the same time, the Company has established a professional e-commerce direct sellingoperational team and an online distributor system with strong ability. Nowadays, the Company hascomprehensively entered the leading e-commerce platforms such as Tmall, Taobao, JD.com,Vipshop, Pinduoduo, and so on. It has dozens of authorized online distributors. On the basis ofmaintaining the sales on traditional e-commerce platforms, the Company also worked on hobby andcontent-oriented e-commerce channels to strengthen its brand presence while driving sales.According to the data provided by Info Master, in 2023, the Company’s products of adaptors andwall switches and sockets continued to maintain the first place in the Tmall online market share andcontinued to consolidate the leading position, while its new energy chargers led the way amongthird-party brands in terms of sales volume.
The high quality coordinated development between offline and online channels has helped theCompany establish a comprehensive, multilevel and stereoscopic marketing network, which is theunique channel advantage of the Company to maintain competitiveness. With the changes inconsumption trends and footfall structure, comprehensive flagship stores for the decoration channeland the new retail model of online and offline integration have been introduced and initially tested,which have become important directions for the Company’s channel development and innovationin the future. Simultaneously, the Company has always adhered to the refined management ofchannels for years, developing established systems in the aspects of development, management,operation, and so on. It has had the advantage of developing new channels swiftly. The systematic
channel layout of new energy and Murora products in a short period of time is an effectivemanifestation of this underlying capability.
(2) With “Goneo” being widely recognized as a safe and reliable brand, the Company isnow strengthening a trendy, high-end, and high-tech brand image.
Through a branding model with selling point promotion as the foundation, over the past morethan 20 years, the Company has made constant efforts to support the distributors to put the Goneobrand in retail stores and put advertising resources such as display inside and outside the stores, inso doing the Goneo brand has been disseminated to cities, towns and counties. It has formed a simple,efficient and unique branding model. Goneo has become a household name. Meanwhile, theCompany has constantly enriched the brand connotation and improved the brand’s penetration andloyalty among different consumers with the help of diversified, intelligent and young new productsand the Internet new media promotion. With the brand upgrading strategy, and based on continuousproduct innovation, the “Goneo” brand has gradually shifted from “safe and reliable” to “trendy,high-end and high-tech”. And the Company’s brand presence and reputation have been furtherenhanced.
(III) Operational strength
(1) The Company has a highly lean, automated and digitalized supply chain, helping itstay competitive with respect to quality, efficiency and cost.
With products as the core, the Company deeply integrates the upstream supply chain, mastersthe key components and core technology, and establishes a vertically integrated supply chain systemfrom basic raw materials to finished products. It has regarded manufacturing technology as theimportant carrier of core competitiveness in the supply chain. It is equipped with mold, hardware,electronic, spraying and other supporting factories. These factories design, develop and manufacturevarious high precision molds for the Company’s diverse products. With automated injectionmolding and molding integration, they have been developing and supplying sufficient precisionelectronic components for the Company. Meanwhile, by giving full play to synergies among them,the product quality, production efficiency and the product innovation competence have been greatlyimproved.
The Company has constantly improved the lean, automated and digitalised manufacturingcapabilities and established an industrial automatic team of integrated research, design andmanufacturing. The independent development and design, and the assembly application capabilityof automatic devices and smart assembly devices have constantly improved. The flexible productionmode of “man-machine integration” has been promoted rapidly. With the help of a leadingautomatic stereoscopic warehouse and smart sorting shipment system, the Company has achievedthe mechanization and automation of warehouse work, which greatly improves the speed ofdistribution and delivery, and the customer response ability. The automatic stereoscopic warehousehas efficiently connected the front-end automatic production. The smart manufacturing system forthe whole process of feedstock -- production -- storage -- shipment has been established. Meanwhile,
by comprehensively upgrading the MES system and integrating ERP, QMS, PLM and otherhardware and software systems, the Company has achieved digitalised whole-process informationmonitoring and management of “integrated design and manufacturing, automated production andprocessing, transparent production process, and precise logistics control”, providing solid supportfor the sustainable development of the Company’s business.
(2) The Bull Business System (BBS) has become a powerful engine to drive the Company'sbusiness development.As management reforms have been deepened over the past few years, BBS has become apivotal methodology and operational system driving the Company's improvement of operationalquality and a robust catalyst for innovation-driven growth, cost reduction, and efficiencyenhancement of the Company. Focusing on the Company's strategic goals, BBS has fully capitalisedon tools and methods to empower the organisation to continuously pursue excellence, consolidatethe foundation of its advantageous business, and secure breakthroughs in new business, therebyattaining satisfactory operating results.
V Major Operations during the Reporting Period
For the Reporting Period, operating revenue increased 11.46% year on year to RMB15.695billion and the net profit attributable to the Company’s shareholders amounted to RMB3.870 billion,up 21.37% from the previous year.(I) Analysis of Principal Operations
1. Changes in consolidated income statement and cash flow statement items
Unit: RMB
| Item | 2023 | 2022 | Change (%) |
| Operating revenue | 15,694,755,606.24 | 14,081,373,030.94 | 11.46 |
| Cost of sales | 8,914,184,532.27 | 8,730,082,585.08 | 2.11 |
| Selling expense | 1,070,438,160.60 | 800,387,659.41 | 33.74 |
| Administrative expense | 626,198,552.51 | 500,596,373.88 | 25.09 |
| Finance costs | -108,510,345.64 | -107,993,300.96 | Not applicable |
| R&D expense | 673,427,386.61 | 588,296,080.11 | 14.47 |
| Net cash generated from/used in operating activities | 4,827,282,098.55 | 3,057,914,218.16 | 57.86 |
| Net cash generated from/used in investing activities | -3,434,383,521.90 | -1,746,083,657.48 | Not applicable |
| Net cash generated from/used in financing activities | -1,987,046,180.27 | -1,945,455,689.54 | Not applicable |
The change in operating revenue was primarily driven by the steady growth in the traditional corebusiness and the fast growth in new businesses in the year.The change in cost of sales was primarily driven by the increased costs along with the increasedrevenue and the efforts in cost reduction in the year.The change in selling expense was primarily driven by the increased advertising and marketingexpenses.The change in administrative expense was primarily driven by the increased salaries and equityincentive expenditures for the management.The change in finance costs was primarily driven by the decreased exchange losses.The change in R&D expense was primarily driven by the increased R&D investments.
The change in net cash generated from/used in operating activities was primarily driven by theincreased sales.The change in net cash generated from/used in investing activities was primarily driven by theincreased purchases of financial products in the year.The change in net cash generated from/used in financing activities was primarily driven by theincreased dividend payout.
Particulars about any significant change to the Company’s business nature, profit composition orsources in the current period.
□ Applicable √ Not applicable
2. Revenue and cost analysis
√ Applicable □ Not applicable
In 2023, the electric connection business continued to drive product upgrades, strengthenedGoneo as a trendy and high-end brand, and achieved solid growth. The smart electrical lightingbusiness created a trendy and high-end product ecosystem, vigorously promoted the channel reformfeaturing "flagship stores + new retail model", and achieved sustained growth across economiccycles. The new energy business swiftly enriched product offerings, increased competitivenessacross the board, such as technology, supply chain, and channels, and achieved leapfrogdevelopment.
(1) Principal operations by operating division, product category, operating segment and salesmodel
Unit: RMB
| Principal operations by operating division | ||||||
| Operating division | Operating revenue | Cost of sales | Gross profit margin (%) | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) |
| Civil electrical appliances | 15,669,231,313.32 | 8,899,467,288.16 | 43.20 | 11.50 | 2.09 | Up by 5.23 percentage points |
| Principal operations by product category | ||||||
| Product category | Operating revenue | Cost of sales | Gross profit margin (%) | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) |
| Electric connection products | 7,387,125,686.25 | 4,366,868,543.35 | 40.89 | 4.77 | -5.81 | Up by 6.64 percentage points |
| Smart electrical lighting products | 7,902,394,358.10 | 4,282,575,223.38 | 45.81 | 15.37 | 7.67 | Up by 3.88 percentage points |
| New energy products | 379,711,268.97 | 250,023,521.43 | 34.15 | 148.64 | 141.97 | Up by 1.82 percentage points |
| Principal operations by operating segment | ||||||
| Operating segment | Operating revenue | Cost of sales | Gross profit margin (%) | YoY change in operating revenue (%) | YoY change in cost of sales (%) | YoY change in gross profit margin (%) |
| Domestic | 15,494,120,354.44 | 8,772,144,247.50 | 43.38 | 12.35 | 3.37 | Up by 4.91 percentage points |
| Overseas | 175,110,958.88 | 127,323,040.66 | 27.29 | -33.03 | -44.79 | Up by 15.50 percentage points |
Notes:
1) During the year, the electric connection business recorded operating revenue of RMB7.387billion, up 4.77% year on year; and a cost of sales of RMB4.367 billion, down 5.81% year on year.As the core of the Company, the electric connection business continued to drive product upgrades,strengthened Goneo as a trendy and high-end brand, and achieved solid growth.
2) During the year, the smart electrical lighting business recorded operating revenue ofRMB7.902 billion, up 15.37% year on year; and a cost of sales of RMB4.283 billion, up 7.67% yearon year. The smart electrical lighting business created a trendy and high-end product ecosystem,vigorously promoted the channel reform featuring "flagship stores + new retail model", andachieved sustained growth across economic cycles.
3) During the year, the new energy business recorded operating revenue of RMB380 million,up 148.64% year on year; and a cost of sales of RMB250 million, up 141.97% year on year. Thenew energy business swiftly enriched product offerings, increased competitiveness across the board,such as technology, supply chain, and channels, and achieved leapfrog development.
(2) Output and unit sales analysis
√ Applicable □ Not applicable
| Primary products | Unit | Output | Unit sales | Inventory | YoY change in output (%) | YoY change in unit sales (%) | YoY change in inventory (%) |
| Electricity connecting products | 0,000 pieces | 61,929.53 | 59,134.05 | 4,704.09 | 8.70 | 4.81 | 22.10 |
| Smart electrical lighting products | 0,000 pieces | 94,593.22 | 91,353.88 | 6,162.88 | 17.71 | 22.27 | 1.98 |
| New | 0,000 | 64.34 | 57.48 | 5.84 | 150.82 | 140.49 | 17.79 |
| energy products | pieces |
Notes:
1) The inventory of electric connection products increased steadily in the current periodcompared with last year.
2) The inventory of smart electrical lighting products increased steadily in the current periodcompared with last year.
3) The unit sales of new energy products showed a significant increase compared with last year,mainly due to the strong sales of these products.
(3) Execution of significant purchase or sales contracts
□ Applicable √ Not applicable
(4) Cost analysis
Unit: RMB
| By operating division | |||||||
| Operating division | Cost category | 2023 | As % of total costs in 2023 (%) | 2022 | As % of total costs in 2022 (%) | Change in amount (%) | Note |
| Civil electrical appliances | Direct materials | 7,137,885,744.17 | 80.07 | 6,975,115,126.99 | 79.90 | 2.33 | |
| Direct labor cost | 616,271,427.08 | 6.91 | 597,581,598.69 | 6.85 | 3.13 | ||
| Manufacturing expense | 1,145,310,116.91 | 12.85 | 1,144,233,978.87 | 13.11 | 0.09 | ||
Notes:
The manufacturing expense took up a smaller percentage of the total costs in the current periodcompared with last year, primarily driven by the efforts in manufacturing cost reduction.
(5) Changes to the consolidation scope due to changed ownership in principal subsidiaries inthe Reporting Period
√ Applicable □ Not applicable
For details, please refer to “IX Changes in Consolidation Scope” in “Part X FinancialStatements”.
(6) Significant changes to the business scope or product or service range in the ReportingPeriod
□ Applicable √ Not applicable
(7) Major customers and suppliers
A. Major customers
√ Applicable □ Not applicable
Sales to the top five customers stood at RMB1,290.9499 million, accounting for 8.23% of the totalannual sales. Sales to the related-parties among the top five customers stood at RMB0, accountingfor 0% of the total annual sales.
Indicate whether sales to a single customer accounted for over 50% of the total sales, there was anynew customer in the top five customers, or the Company heavily relied on a few number ofcustomers in the Reporting Period.
□ Applicable √ Not applicable
B. Major suppliers
√ Applicable □ Not applicable
Purchases from the top five suppliers stood at RMB1,773.6825 million, accounting for 12.20% ofthe total annual purchases. Purchases from the related-parties among the top five suppliers stood atRMB0, accounting for 0% of the total annual purchases.
Indicate whether purchases from a single supplier accounted for over 50% of the total purchases,there was any new supplier in the top five suppliers, or the Company heavily relied on a few numberof suppliers in the Reporting Period.
□ Applicable √ Not applicable
3. Expense
√ Applicable □ Not applicable
Unit: RMB
| Item | 2023 | 2022 | Amount of change | Change (%) |
| Selling expense | 1,070,438,160.60 | 800,387,659.41 | 270,050,501.19 | 33.74 |
| Administrative expense | 626,198,552.51 | 500,596,373.88 | 125,602,178.63 | 25.09 |
| R&D expense | 673,427,386.61 | 588,296,080.11 | 85,131,306.50 | 14.47 |
| Finance costs | -108,510,345.64 | -107,993,300.96 | -517,044.68 | Not applicable |
(1) Selling expense increased primarily driven by the increased advertising and marketing expenses.
(2) Administrative expense increased primarily driven by the increased employee salaries and equityincentive expenditures.
(3) R&D expense increased primarily driven by the increased R&D investments.
(4) Finance costs decreased primarily driven by the exchange losses.
4. R&D investments
(1) R&D investments
√ Applicable □ Not applicable
Unit: RMB
| Expensed R&D investments in the current period | 673,427,386.61 |
| Capitalized R&D investments in the current period | / |
| Total R&D investments | 673,427,386.61 |
| Total R&D investments as % of operating revenue | 4.29 |
| Capitalized R&D investments as % of total R&D investments | / |
(2) R&D personnel
√ Applicable □ Not applicable
| Number of R&D personnel | 1,581 |
| R&D personnel as % of total employees | 11.50 |
| Educational background of R&D personnel | |
| Educational background | Number of employees |
| Doctoral degree | 2 |
| Master’s degree | 87 |
| Bachelor’s degree | 818 |
| Junior colleges | 518 |
| Senior high school and below | 156 |
| Age structure of R&D personnel | |
| Age | Number of employees |
| Below 30 (exclusive) | 360 |
| 30-40 (inclusive of 30 and exclusive of 40) | 894 |
| 40-50 (inclusive of 40 and exclusive of 50) | 301 |
| 50-60(inclusive of 50 and exclusive of 60) | 25 |
| 60 and beyond | 1 |
(3) Other information
√ Applicable □ Not applicable
The Company, as a national industrial design center and a national postdoctoral workstation,has always attached importance to product development and technological innovation. Byestablishing a leading scientific research innovation platform and innovating mechanism, theCompany focuses on the research of industry basic and key common technologies to continuouslyimprove product development and technological innovation capability. Meanwhile, with greatemphasis on cultivation and introduction of talents of R&D and product planning as well as adheringto market demand-oriented principle, the Company continues to strengthen the insight and researchon the potential consumer demands and scenario-based requirements, constantly expands the areasby launching products that meet consumer demands to lead the industry development. In addition,the Company continues reinforcing the construction of the standardization system and the strategiclayout of intellectual property rights, and constantly promotes open innovation to set an excellentexample with respect to innovation capability.
(4) Reasons for any significant change to the composition of R&D personnel and the impacton the Company
□ Applicable √ Not applicable
5. Cash flows
√ Applicable □ Not applicable
Unit: RMB
| Item | 2023 | 2022 | Amount of change | Change |
| Net cash generated from/used in operating activities | 4,827,282,098.55 | 3,057,914,218.16 | 1,769,367,880.39 | 57.86 |
| Net cash generated from/used in investing | -3,434,383,521.90 | -1,746,083,657.48 | -1,688,299,864.42 | Not applicable |
| activities | ||||
| Net cash generated from/used in financing activities | -1,987,046,180.27 | -1,945,455,689.54 | -41,590,490.73 | Not applicable |
(1) Net cash generated from operating activities increased primarily driven by the increased salesand the decreased payments to suppliers.
(2) Net cash generated from investing activities decreased primarily driven by the increasedpurchases of financial products in the year.
(3) Net cash generated from financing activities decreased primarily driven by the increaseddividend payout in the year.
(II) Significant changes in profit incurred by non-core business
□ Applicable √ Not applicable
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
1. Assets and Liabilities
Unit: RMB
| Item | Closing amount | As % of closing total assets (%) | Opening amount | As % of opening total assets (%) | Change (%) | Note |
| Held-for-trading financial assets | 9,727,000,000.00 | 49.22 | 6,949,000,000.00 | 41.73 | 39.98 | |
| Derivative financial assets | 8,263,755.00 | 0.04 | 643,100.00 | 0.00 | 1,184.99 | |
| Receivables financing | 5,359,014.96 | 0.03 | 1,036,801.70 | 0.01 | 416.88 | |
| Prepayments | 56,229,933.95 | 0.28 | 49,635,694.61 | 0.30 | 13.29 | |
| Other receivables | 11,433,179.13 | 0.06 | 71,887,692.32 | 0.43 | -84.10 | |
| Other current assets | 109,982,385.06 | 0.56 | 363,825,426.89 | 2.18 | -69.77 | |
| Construction in progress | 806,585,458.56 | 4.08 | 611,457,850.54 | 3.67 | 31.91 | |
| Right-of-use assets | 18,802,451.89 | 0.10 | 13,312,707.57 | 0.08 | 41.24 | |
| Goodwill | - | 45,133,442.04 | 0.27 | -100.00 | ||
| Short-term borrowings | 588,344,176.01 | 2.98 | 845,374,749.03 | 5.08 | -30.40 | |
| Held-for-trading financial liabilities | - | 18,200,000.00 | 0.11 | -100.00 | ||
| Other payables | 705,060,906.64 | 3.57 | 446,413,870.85 | 2.68 | 57.94 | |
| Current portion of non-current liabilities | 406,959,339.77 | 2.06 | 8,798,658.13 | 0.05 | 4,525.24 | |
| Deferred | 68,417,470.86 | 0.35 | 53,820,328.00 | 0.32 | 27.12 |
| income | ||||||
| Other non-current liabilities | 86,411,741.16 | 0.44 | 34,814,148.70 | 0.23 | 125.66 | |
| Paid-in capital (or share capital) | 891,540,875.00 | 4.51 | 601,077,590.00 | 3.61 | 48.32 | |
| Other comprehensive income | 13,570,498.15 | 0.07 | 4,389,526.95 | 0.03 | 209.16 | |
| Surplus reserves | 562,217,890.93 | 2.84 | 302,797,998.73 | 1.82 | 85.67 |
Other notes:
Held-for-trading financial assets increased primarily driven by the increased investments in wealthmanagement instruments in the period.Derivative financial assets increased primarily driven by the positive floating returns on futures atthe end of the period.Receivables financing increased primarily driven by the increased balance of bank acceptance notesreceivable.Prepayments increased primarily driven by the increased advance expense payments.Other receivables decreased primarily driven by the full-amount allowances established for doubtfulother receivables from Sunac in the period.Other current assets decreased primarily driven by the decreased structured deposits at the end ofthe period.Construction in progress increased primarily driven by the increased investments in the raised fundsinvestment projects in the period.Right-of-use assets increased primarily driven by the increased building space under long-termleases in the period.Goodwill decreased primarily driven by the full-amount allowances established for impairments ingoodwill in the period.Short-term borrowings decreased primarily driven by the decreased loans that were due within oneyear in the period.Held-for-trading financial liabilities decreased primarily driven by the contingent consideration forbusiness combination that required no payment.Other payables increased primarily driven by the increased sales discount accruals as a result of theincreased sales.Current portion of non-current liabilities increased primarily driven by the increased loans with amaturity of over one year in the period.Deferred income increased primarily driven by the receipt of asset-related government grants in theperiod.Other non-current liabilities increased primarily driven by the increased over-one-year obligationsto repurchase restricted shares.Paid-in capital increased primarily driven by the bonus issue from capital reserves in the period.Other comprehensive income increased primarily driven by the positive floating returns on futuresat the end of the period.Surplus reserves increased primarily driven by the surplus reserves established in the period.
2. Overseas assets
√ Applicable □ Not applicable
(1) Value of assets
Of which: overseas assets stood at RMB23,091,555.51, accounting for 0.12% of the total assets.
(2) Explanation for the high proportion of overseas assets
□ Applicable √ Not applicable
3. Major restricted assets as at the period-end
√ Applicable □ Not applicable
For details, please refer to “19. Assets with restricted ownership or right to use” under “VIINotes to the Consolidated Financial Statements” of “Part X Financial Statements”.
4. Other information
□ Applicable √ Not applicable
(IV) Industry environment analysis
√ Applicable □ Not applicable
For details, please refer to “(I) Industry landscape and trends” under “VI Outlook Discussionand Analysis” of Part III Management Discussion and Analysis”.
(V) Investments madeEquity investments in other entities
□ Applicable √ Not applicable
1. Significant equity investments
□ Applicable √ Not applicable
2. Significant non-equity investments
√ Applicable □ Not applicable
For details, please refer to “(2) Changes in significant constructions in progress in the current period” under “12. Construction in progress” in “VII Notes to theConsolidated Financial Statements” of “Part X Financial Statements”.
3. Financial assets measured at fair value
√ Applicable □ Not applicable
For details, please refer to “XI Items Measured at Fair Value” in “Part II Corporate Information and Key Financial Information”.
Securities investments:
□ Applicable √ Not applicable
Notes to securities investments:
□ Applicable √ Not applicable
Investments in private equity funds:
□ Applicable √ Not applicable
Derivatives investments:
√ Applicable □ Not applicable
(1) Derivatives investments for hedging purposes in the Reporting Period
√ Applicable □ Not applicable
(2) Derivatives investments for speculation purposes in the Reporting Period
□ Applicable √ Not applicable
Other information:
The Company used commodity future contracts to hedge the expected bulk-purchase of raw materials of copper and plastic particles to avoid the risk offluctuations in the future cash flows caused by the fluctuations in the price of raw materials.The Company's specific hedging methods are described below:
| Hedged items | Expected bulk-purchase of raw materials such as copper and plastic particles |
| Hedge instruments | Commodity future contracts |
| Hedging method | Commodity future purchase contracts locked in changes of price in expected raw materials bulk-purchase contract |
Both the hedging instruments (commodity futures contracts) and the hedged items (expected bulk-purchase of raw materials) are based on variables such ascopper and plastic prices. The Company, guided by the Group Purchasing Decision Committee and based on actual raw material demand for production, conductshedging to safeguard against price fluctuations effectively. The aforementioned hedging is highly effective. Cash flow hedging is adopted for such hedging activities.
Additionally, the Company, in accordance with its risk management strategy, hedges certain raw materials such as silver, aluminium, and tin. However, due tofactors such as quantity conversion, the hedging may not be highly effective after futures closing, resulting in ineffective hedging portions being included in return oninvestment.
4. Progress on any major asset restructuring in the Reporting Period
□ Applicable √ Not applicable
(VI) Sale of significant assets and equity investments
□ Applicable √ Not applicable
(VII) Principal subsidiaries
√ Applicable □ Not applicable
1. Principal subsidiaries
Unit: RMB’0,000
| Full name of subsidiary | Principal activities | Registered capital | Total assets | Net assets | Operating revenue | Net profit |
| Ningbo Goneo Electrics Co., Ltd. | Household appliances manufacturing; manufacturing of mechanical and electrical equipment; manufacturing of distribution switch control equipment; lighting apparatus manufacturing; general merchandising of hardware products; electrical materials manufacturing; manufacturing of electronic components and electromechanical components and equipment; manufacturing of intelligent home consumption equipment; communication equipment manufacturing; network equipment manufacturing; IoT equipment manufacturing; technical services, technical development, technical consulting, technical communication, technical transfer, and technical promotion (business activities shall be conducted independently in accordance with laws with the business license, except the items that require approval in accordance with laws). Items permitted: Import and export of products; and import and export of technologies (business activities that require approval in accordance with laws shall be subject to the approval by relevant authorities. Specific business items are indicated on the approval results). | 10,000 | 485,716.82 | 214,498.30 | 517,082.34 | 194,883.42 |
| Ningbo Goneo Precisio | Manufacturing, processing and sales of mold, plastic products, hardware accessories, and | 10,000 | 84,996.49 | 27,964.30 | 244,566.41 | 8,056.64 |
| n Manufacturing Co., Ltd. | electronic components. | |||||
| Ningbo Goneo Electric Sales Co., Ltd. | General merchandising, retailing and online sales of electrical materials, electronic products, hardware products, household appliances, communication apparatus, lamps, and articles of everyday use; import and export businesses of self-owned and commissioned goods and technologies (excluding those limited or prohibited by state laws and regulations). (business activities that require approval in accordance with laws shall be subject to the approval by relevant authorities) | 10,000 | 204,830.92 | 30,127.61 | 1,071,038.37 | 7,777.24 |
| Ningbo Goneo Marketing Co., Ltd. | Wholesale of hardware, sales of electrical accessories, sales of household appliances, sales of communication equipment, sales of electronic products, sales of daily necessities, sales of special equipment for lighting apparatus production, sales of mechanical and electrical equipment, sales of lighting apparatus, sales of general merchandise, sales of lamps, sales of wind and power tools, sales of metal tools, wholesale of electronic components, sales of plastic products, sales of motor vehicle chargers, sales of charging points, sales of household goods, installation services for household appliances (business activities shall be conducted independently in accordance with laws with the business license, except the items that require approval in accordance with laws). | 1,000 | 62,601.01 | 16,578.55 | 410,894.41 | 16,298.82 |
Net profits of principal subsidiaries changed because sales increased, and costs decreased andefficiency improved in sourcing and manufacturing. Meanwhile, certain distribution channels ofNingbo Goneo Electric Sales Co., Ltd. were transferred to Ningbo Goneo Marketing Co., Ltd.,leading to significant changes in the net profits of these two subsidiaries in the current period.
2. New subsidiaries
Unit: RMB’0,000
| Full name of subsidiary | Principal activities | How it was obtained | Registered capital | Closing net assets | Net profit in the current period |
| Ningbo Qiquanyang Trading Co., Ltd. | Sales of motor vehicle chargers; sales of charging points; centralised fast charging station; sales of power transmission and distribution and monitor and control equipment; sales of batteries; sales of power and electronic components; sales of power utility equipment; sales of battery spare parts; sales of lamps; sales of lighting apparatus; sales of household appliances spare parts; sales of household appliances; sales of new energy vehicle power exchange facilities; sales of new energy primary-power equipment; sales of new energy vehicle electric accessories; residential plumbing and electricity installation and maintenance services; installation services for household appliances (business activities shall be conducted independently in accordance with laws with the business license, except the items that require approval in accordance with laws). | Incorporated | 1,000.00 | 0.89 | -0.11 |
| GONEO New Energy Europe GmbH | Specialising in the R&D, design, manufacture, sales and technical services of parts, equipment and components for photovoltaic, energy storage products and lithium battery products, as well as the import and export of related products and technical consulting and business services. | Incorporated | EUR2.50 | 7.27 | -12.18 |
| PT Goneo Electronic Indonesia | Wholesale of power distribution switch equipment, wires, cables, and connectors; appliances and appliance accessories; electric light sources and lighting lamps; pneumatic and metal tools, power tools, plastic products, hardware accessories, and electronic components; household appliances and communication equipment; photovoltaic equipment, energy storage, lithium batteries, electric vehicle charging stations and chargers and related products. | Incorporated | USD210.21 | / | / |
| Goneo International Trading (SG) Pte. Ltd. | General trading | Incorporated | USD5 | / | / |
(VIII) Structured entities controlled by the Company
□ Applicable √ Not applicable
VI Discussion and Analysis on the Company’s Future Development(I) Industry landscape and trends
√ Applicable □ Not applicable
According to the National Bureau of Statistics, the national GDP grew by 5.2% year on yearin 2023; the national per capita disposable income reached RMB39,218 in 2023, up by 6.3% yearon year; the national per capita consumption expenditure for the year was RMB26,796, up by 9.2%compared to the previous year; the urbanisation rate of the resident population was 66.16% at theend of the year, up by 0.94 percentage points compared to the end of the previous year. In 2023,several ministries outlined the direction for optimising real estate policies, with local authoritiescontinuing to implement such policies. Previous restrictive measures, introduced during periods ofmarket overheating, are gradually being phased out or refined. Guided by these policies, theMinistry of Housing and Urban-Rural Development reported that overall housing demand remainedstable, with the proportion of second-hand housing transactions reaching a historic high nationwide.The Central Economic Work Conference for the new year emphasised the importance of promotingstability through progress and establishing the new before abolishing the old. It also urged the realestate sector to address industry risks, advance "three major projects," and accelerate theestablishment of a new development model. We expect that the steady growth of the nationaleconomy, the high-quality development of the real estate industry, and the stable overall housingdemand will provide a good environment for the sustainable and healthy development of theCompany.
The domestic lighting market size is more than RMB200 billion, but the industrial pattern isscattered. In recent years, under the influence of complex changes in the social and economicenvironment and rising bulk raw materials, small and medium-sized lighting enterprises are facinggreater pressure to survive, and the advantages of leading enterprises will be more prominent. Withthe popularity of minimalist decoration style, as well as the rising concern of consumers for thehome light environment, light effect and light health, intelligent no-main-lamp lighting with lightquality are gaining more and more popularity and enter gradually into the mass market and becomea trend from the previous commercial lighting and high-end home decoration field. At the sametime, LED lighting technology innovation drives the cost reduction so that LED light has the basicconditions to become mass consumer goods; on this basis, the Company judges that no-main-lamplighting will be expected to grow into an important opportunity category in the lighting field. Afterincubation and cultivation, the Company's no-main-lamp lighting business has adopted a dual-brand-driven strategy and initially built up differentiated core competencies in hardware andsoftware products, channels, supply chain, etc. In the future, the Company will continue to promotebusiness synergies, seize the minds of consumers, and achieve ground-breaking development.
The smart home industry has undergone a transformation from single product to system andinteraction after the integration and evolution in recent years. With the increasing maturity of thesupply-side solutions and the gradual increase in consumer acceptance on the demand side, smarthome products are increasingly coming into homes and bringing convenient use experience. AVCmonitoring data suggest that in 2023, China's smart home overall (smart home system, smart switch,smart door lock) refined decoration market size reaches 1.128 million sets, of which the smart home
system configuration rate saw increases for three years in a row, and the fine decorationconfiguration rate increased from 9.6% in 2021 to 20.5% in 2023. The brand pattern of the smarthome industry has not yet been formed, and there is a huge market space behind the rapiddevelopment. As the core of the smart home system, the lighting control system has obvious userinteraction perception and high usage frequency. The Company makes intelligent no-main-lamplighting and self-developed control system the entry point, and integrates with smart door locks,smart curtain machines, smart clothes drying racks and other ecosystem product categories toprovide household solutions of safe electricity use, which will be an important developmentdirection and a differentiated competitive edge for the smart electrical lighting business.In 2023, under the dual impacts of policy and market, the new energy vehicle industrycontinued to grow rapidly. According to the China Association of Automobile Manufacturers, in2023, 9.587 million new energy vehicles were produced and 9.495 million were sold in China, up
35.8% and 37.9% year-on-year, and the market share was 31.6%, reaching ahead of schedule thegoal that by 2025, the sales of new energy vehicles will reach about 20% of the total sales of newvehicles in the New Energy Automobile Development Plan (2021-2035) issued by the GeneralOffice of the State Council. In June 2023, the State Council issued the Guiding Opinions on FurtherEstablishing a High-Quality Charging Infrastructure System. According to the document, a high-quality charging infrastructure system featuring wide coverage, an appropriate scale, a reasonablestructure, and well-improved functions is expected to be preliminarily established by 2030 tosupport the development of the new energy vehicle industry. Seizing this momentum, the Companyswiftly completed the layout of new energy vehicle charging plugs and points for both individualconsumers and operators, experiencing a business leap. Anticipating the future transformation inenergy structures, the Company has entered the emerging energy storage sector. Leveraging thestrengths of domestic supply chains in this sector, the Company has taken the lead in promotinghousehold-oriented smart energy systems in Europe, a region with tight energy supplies and amplefuture market potential. Domestically, the Company has promoted energy storage systems forindustrial and commercial users. Meanwhile, the Company will accelerate product innovation andtechnology reserves, proactively explore new business directions, meet the storage and chargingneeds of more user groups in a wider variety of scenarios, and seize the historical opportunities ofthe development of the new energy industry.
(II) Development strategies of the Company
√ Applicable □ Not applicable
With the vision of “Becoming a Leader in the International Civil Electrical Industry”, theCompany will grasp the opportunities of the times and accelerate the development of the smartecosystem, new energy and international operations. It will build up the four-wheel strategiccapabilities of “Technology Leadership, Customer First, Intelligent Transformation, and GlobalPresence”, and continue to build comprehensive competitive edges in product, marketing and
operational strengths, with an aim to provide consumers with more and better electrical productsand services.
(III) Business plans
√ Applicable □ Not applicable
In order to achieve its operating goals in 2024, the Company will work on the followingpriorities:
1. In the electric connection business, the Company will continue to drive innovationaround consumer demands and application scenarios, setting the trend towards safe andstylish electrical products.
Adaptors are the foundation of the Company. The Company will continue to study the marketand consumer trends in depth, carry out product innovation around the demands in segmentedelectricity scenarios, and continuously explore directions such as fashion, safety, scenario fit,intelligent upgrade, and intelligent power distribution. By introducing more high-value andaesthetically pleasing products, the Company aims to optimise and upgrade its product portfolio. Interms of digital accessory business, the Company will adhere to the third-party premium offeringstrategy, with a focus on the integration of scenarios and functions. It will utilise leading technologyand maximise cost-effectiveness to meet diverse consumer demands for digital charging products.
2. In terms of the smart electrical lighting business, the Company will, based on theconsumer demand for home improvement, accelerate the creation of a pre-decorationecosystem with smart no-main-lamp lighting at the core and drive the establishment offlagship stores in decorative channels and the development of new retail models.
In terms of the wall switch and sockets business, the Company will uphold the decorative line,grasp the intelligent, ultra-thin and other industry trends, and accelerate upgrading and iterationtowards high-end, intelligent products, so as to lead the industry's overall innovation and furtherenhance brand power and competitiveness through products with a strong sense of design and highvalue. In terms of LED lighting, the Company, adhering to its "Eye-Caring" positioning, willdevelop lighting solutions for segmented scenarios based on the demands of different user bases.As to the light source business, the Company will continue to expand into industrial and commercialmarkets and arrange in depth product lines in segmented areas such as outdoor scenarios, offices,and chains. Regarding the decorative lighting business, the Company will prioritise innovation inintelligent, simple yet stylish, and affordable products to continually capture market share. In theno-main-lamp lighting business, the product line layout will be further refined with a focus on thebrands of Goneo and Murora. Additionally, the Company will bolster both hardware and softwarestrengths to deliver digital, inductive, and health-conscious home lighting environments. Withrespect to ecosystem-based products, the product layout and expansion will be carried out in concept,appearance, and technology innovation to cater to diverse user demands. The ultimate goal is toprovide users with a richer, smarter, and higher-quality smart ecosystem of pre-decoration.
In 2024, the decoration channel will be fully committed to advancing the development ofcomprehensive flagship stores. Furthermore, it will actively leverage the new retail model toempower retail flagship stores, thereby boosting sales efficiency. Comprehensive development ofthe channel service system will be expedited to effectively support the operation of flagship stores,delivering consumers a more convenient and reassuring purchasing and use experience. Throughthe "Goneo Safe Home Electrical Solution", with no-main-lamp lighting, wall switches, and tracksockets at its core, efforts will be intensified to expand the installer project channel, therebysignificantly boosting market share in all aspects.
3. The Company will continuously enhance the competitiveness and channel developmentof new energy electrical products.
With respect to new energy vehicle charging plugs and points, the Company will continuouslyrefine existing product lines, transitioning from "complete" to "refined" offerings. In C-end products,the Company will drive industry development by prioritising safety, the sense of technology, andinnovation. Regarding B-end products, priority will be given to the development of a competitiveedge in high performance, maximum cost-effectiveness, and new technologies. Meanwhile, thedevelopment of the overseas product portfolio will be expedited. In the energy storage business,comprehensive arrangements for the home energy storage ecosystem will be made to explore furtherdevelopment of domestic industrial and commercial energy storage product lines, therebyfacilitating rapid business growth. In terms of the expansion of new energy channels, efforts will becontinued to bolster coverage and penetration of offline professional channels in the domesticmarket. Additionally, new retail models will be explored, which involves expanding into largeoperator and government-enterprise projects, in addition to the effective coverage of small andmedium operators. The Company will also drive the transformation and upgrading of distributorstowards service providers, thereby further increasing the timeliness and satisfaction of post-saleservices. Specialised channels for industrial and commercial energy storage will be built. Regardingthe new energy supply chain, the Company will continue to drive lean and scale R&D, procurement,and manufacturing, alongside the self-development and self-manufacturing of core parts. The aimis to establish a flexible supply chain that ensures low costs and high quality, thereby swiftlydeveloping a leading technological edge. As to brand building, in 2024, the Company will ramp uppromotional efforts for the Goneo brand in the new energy sector. By organising multi-level mediapromotions and publicity activities targeting different user bases, the Company will strive to captureconsumer attention.
4. The Company will adopt the strategy of localisation to advance the rapid growth ofinternational business.
As to the new energy business targeting developed countries, the Company will leverage itsexisting strengths in supply chain and R&D to swiftly develop home energy solutions that coverphotovoltaic power generation, storage and charging. Based on typical countries such as Germany,the Company will continuously develop installer channels. Through proactive participation in
exhibitions and industry exchanges, as well as advertising and promotions on online social mediaplatforms, the Company aims to rapidly increase brand visibility, assist with channel customeracquisition and conversion, and enhance the development foundation. In emerging markets, theCompany will continue its multi-category development approach with a focus on electric connectionand prioritise localisation in products, methods, and business operations to further empowerchannels, implement lean market planning, and identify distribution channels in advance. Cross-border e-commerce will be synchronised with offline overseas business, reaching target countriesand ultimately achieving the collaborative development of "online promotion and attraction andoffline business promotion and conversion". Meanwhile, the Company will seize the rising trend ofe-commerce in Southeast Asia and make active arrangements for emerging e-commerce platforms.
5. The Company will continuously deepen its organisational, process and digitaltransformation to enhance its high-quality operational capabilities across the entire chain.Based on the direction and path outlined in Goneo Group's digital transformation blueprint, theCompany will further deepen and advance the implementation of its digital transformation tasks. In2024, the Company will advance the establishment of an enterprise-level process managementsystem in an orderly manner, which will seamlessly integrate processes with corporate strategiesand the organisational structure to bolster process efficiency and reinforce the identification andcontrol of process-related risks. Across various processes such as R&D, production, and delivery,an integrated process management system will be established as an ongoing endeavour to explorethe in-depth integration of the Bull Business System into business transformation and processdevelopment. Moreover, the Company will drive the establishment of a data governance system tobolster its full-chain digital and high-quality operational capabilities.
(IV) Possible risks
√ Applicable □ Not applicable
1. Risk associated with the sluggish macroeconomic growth
Domestic and overseas political and economic environments are undergoing profound changes.The main products of the Company are consumer goods widely used at home, office, and otherplaces needing electricity. The cyclical fluctuation of economy will directly influence the actualdiscretionary income of consumers, consumers' income structure, and the consumer confidenceindex. Then, consumers' demand for consumer goods including electric connection products andsmart electrical lighting products will be affected. If the growth rate of the domestic macroeconomyis sluggish or slides, it will lead to a decrease in discretionary income and the power of consumptionof residents. It will also decrease consumers' demand and purchasing capacity for the Company'sproducts. As a result, the business development and the growth of results of the Company.
2. Risk of intensified market competition
The civil electrical industry demonstrates full market competition. There are not only manydomestic enterprises, but also some famous international brands. Meanwhile, adaptors, wallswitches and sockets, and other products, as the main controlled entrance of future smart home, also
have attracted many powerful new enterprises to join in the competition. In the future, the civilelectrical and lighting industry is expected to remain its relatively fierce competition. There areuncertainties in the changes of market competition. If the Company cannot adapt to the newcompetition situation, intensify and expand its original competition advantages, it will face the riskof losing market shares.
3. Risk of the new business development failing to reach expectation
At the time of intensifying and expanding the original competition advantages, centering onthe scenarios of new energy chargers and home decoration, the Company developed new businesssuch as charging plugs/points, chargers, no-main-lamp lighting, circuit breakers, bathroom heaters,smart door locks, smart clothes drying racks, and smart curtain machines. However, consideringuncertain factors including the development trend, market competition, and changes of consumerpreferences in relevant fields, the possibility that the development of new businesses will fail toreach expectation cannot be excluded.
4. Risk of the new channel and market development failing to reach expectation
According to the differences and changes of consumers' purchasing habits, the Companycontinued to improve the layout of channels. Regarding the B-end business with decorationcompanies as the core, the overlap of the channels such as the vehicle after-markets for new energycharging plugs/points and B-end operators and the existing competitive channels is relatively low.Meanwhile, the Company is in the early stage of business expansion in overseas markets and needsto gradually build up its competitive edges. The possibility that the development of new channelsand markets will fail to reach expectation cannot be excluded.
5. Risk of fluctuations in main material prices
The main materials that the Company needs for production are copper, plastic, assembly,hardware, packaging materials, electronic parts, etc. There is certain relevance between theprocurement prices of raw materials and the prices of bulk commodities such as copper and plastic.The procurement prices of raw materials have a relatively big impact on the cost of sales of theCompany. If the procurement prices of raw materials rise significantly or fluctuate sharply in thefuture, it will be harmful to the cost control of the Company and then influence the Company'sresults.
(V) Other information
□ Applicable √ Not applicable
VII Explanation of circumstances and reasons for non-disclosure by the companyinconsideration of inapplicable regulations, state secrets and commercial secrets.
□ Applicable √ Not applicable
Part IV Corporate Governance
I Overview of Corporate Governance
√ Applicable □ Not applicable
The Company is in strict accordance with the requirements of the Company Law, the SecuritiesLaw and other relevant national laws and regulations, and the China Securities RegulatoryCommission's Code of Corporate Governance for Listed Companies and other standardiseddocuments, and is constantly improving its corporate governance structure in light of the Company'sdevelopment. The Company has established a governance structure consisting of the GeneralMeeting of Shareholders, the Board of Directors, the Supervisory Committee, with distinctresponsibilities and powers at each level, each with its own responsibilities, effective checks andbalances, scientific decision-making and coordinated operation, which builds a solid foundation forthe Company's sustained, steady and healthy development.
The Board of Directors has set up four specialised committees, namely, Audit and RiskCommittee, Nomination Committee, Remuneration and Appraisal Committee and StrategyCommittee, of which the independent directors in the Audit and Risk Committee, NominationCommittee and Remuneration and Appraisal Committee are in the majority and act as the conveners,providing professional and objective advice to the Board of Directors to ensure the professionalismand comprehensiveness of the Board of Directors' deliberation and decision-making.
The Company has established a sound corporate governance system, forming a "1+3+N"governance system composed of "Articles of Association + Rules of Procedure for Three Meetings+ Various Special Governance Systems". During the year, the Company newly revised the WorkPolicy for Independent Directors in accordance with the rules and regulations of China SecuritiesRegulatory Commission and the Shanghai Stock Exchange, and continuously updated and perfectedit in conjunction with the actual operation, and amended the Rules of Procedure for Three Meetings,the Information Disclosure Management System, the Internal Reporting System RegardingSignificant Information and a number of other systems, which have fully safeguarded thestandardised operation of the Company's "Three Meetings and One Layer" and key internal controldepartments.
Meanwhile, the Company has established a relatively sound internal management and controlsystem, and has formulated relevant management systems in the areas of technology research anddevelopment, procurement management, safe production, marketing management, quality controland financial accounting. It conducted internal audit and supervision of the organization andmanagement, operating activities, financial revenues and expenditures and economic benefits of itssubsidiaries, and regularly inspected and evaluated the establishment and implementation of itsinternal control system to ensure the effectiveness of internal control.
The Company is committed to continuously building modern corporate governance andpromoting system establishment to effectively improve the quality of development as a publiccompany.
Indicate whether there was any material incompliance with the applicable laws and regulations, aswell as the CSRC’s requirements in corporate governance. If yes, please explain.
□ Applicable √ Not applicable
II Specific Measures Taken by the Controlling Shareholder and Actual Controller toGuarantee the Asset, Personnel, Financial, Organizational and Business Independence of theCompany, as well as Solutions, Progress and Subsequent Plans when the Company’sIndependence Is Intervened
□ Applicable √ Not applicable
Indicate whether the controlling shareholder, the actual controller, or any entity under their controlis engaged in the same or similar business with the Company. Please explain the impact of horizontalcompetition or any significant change to horizontal competition on the Company, solutions taken,progress and subsequent plans.
□ Applicable √ Not applicable
III General Meetings of Shareholders
| Meeting | Date | Index to disclosed resolutions | Disclosure date | Resolutions |
| The First Extraordinary General Meeting of Shareholders of 2023 | 6 January 2023 | www.sse.com.cn (the website of the Shanghai Stock Exchange) | 7 January 2023 | The Proposal on the Change of Registered Capital, Domicile and Business Scope and Amendments to the Articles of Association, Proposal on Amendments to the Rules of Procedure for General Meetings of Shareholders, and Proposal on Amendments to the Management Methods for the Use of Raised Funds were approved. |
| The 2022 Annual General Meeting of Shareholders | 18 May 2023 | www.sse.com.cn (the website of the Shanghai Stock Exchange) | 19 May 2023 | The Proposal on the Work Report of the Board of Directors in 2022, Proposal on the Work Report of the Supervisory Committee in 2022, Proposal on the Financial Final Account Report of 2022, Proposal on the Annual Report and its Summary for 2022, Proposal on the Plan for Profit Distribution and a Bonus Issue from Capital Reserves for 2022, Proposal on the Renewal of the Annual Auditor for 2023, Proposal on the Use of Equity Funds for Entrusting Wealth Management, Proposal on the Restricted Share Incentive Plan for 2023 (Draft) and its Summary, Proposal on the Management Measures for the Assessment of the Restricted Share Incentive Plan for 2023, Proposal on the Request to the General Meeting to Authorize the Board of Directors to Handle Share Incentive-Related Matters, and Proposal on Amendments to the |
Articles of Association wereapproved.
Extraordinary general meetings of shareholders convened at the request of preference shareholderswith resumed voting rights:
□ Applicable √ Not applicable
Notes to general meetings of shareholders:
√ Applicable □ Not applicable
For details, please refer to the Announcement on the Resolutions of the First ExtraordinaryGeneral Meeting of Shareholders of 2023 (Announcement No.: 2023-002), and the Announcementon the Resolutions of the 2022 Annual General Meeting of Shareholders (Announcement No.: 2023-032) published by the Company on the website of the Shanghai Stock Exchange(http://www.sse.com.cn).
IV Directors, Supervisors and Senior Management(I) Shareholding changes and remunerations of incumbent directors, supervisors and senior management and those who resigned before the end of theirtenures during the Reporting Period
√ Applicable □ Not applicable
Unit: share
| Name | Office title | Gender | Age | Start of tenure | End of tenure | Opening shareholding (share) | Closing shareholding (share) | Change in shareholding in the Reporting Period (share) | Reason for change | Total pre-tax remuneration received from the Company in the Reporting Period (RMB’ 0,000) | Remuneration received from any of the Company’s related parties (yes/no) |
| Ruan Liping | Chairman of the Board and President | Male | 60 | 2017-12-23 | 2027-1-4 | 96,864,199 | 143,693,654 | 46,829,455 | Bonus issue from capital reserves, and non-transaction transfer | 354.42 | No |
| Ruan Xueping | Vice Chairman of the Board | Male | 52 | 2017-12-23 | 2027-1-4 | 96,864,199 | 125,901,758 | 29,037,559 | Bonus issue from capital reserves, shareholding reduction through bulk trading, and non-transaction transfer | 248.00 | No |
| Liu Shengsong | Director, Senior Vice President and Board Secretary | Male | 54 | 2017-12-23 | 2027-1-4 | 42,400 | 152,048 | 109,648 | Bonus issue from capital reserves, and non- | 326.93 | No |
| Chief Financial Officer | 2024- | 2027- |
| 1-5 | 1-4 | transaction transfer | |||||||||
| Zhou Zhenghua | Director and Senior Vice President | Male | 52 | 2017-12-23 | 2027-1-4 | 42,600 | 196,993 | 154,393 | Bonus issue from capital reserves, and non-transaction transfer | 370.72 | No |
| Xie Weiwei | Director | Male | 44 | 2024-1-5 | 2027-1-4 | 48,100 | 110,853 | 62,753 | Bonus issue from capital reserves, and grant of restricted shares | 313.61 | No |
| Zhou Wenchuan | Director | Female | 40 | 2021-5-20 | 2027-1-4 | 0 | 0 | 0 | 0 | Yes | |
| Chen Zhen | Independent Director | Female | 66 | 2024-1-5 | 2027-1-4 | 0 | 0 | 0 | 0 | Yes | |
| Li Gang | Independent Director | Male | 60 | 2024-1-5 | 2027-1-4 | 0 | 0 | 0 | 0 | Yes | |
| Li Jianbin | Independent Director | Male | 45 | 2024-1-5 | 2027-1-4 | 0 | 0 | 0 | 0 | No | |
| Yu Yingqi | Chairman of the Supervisory Committee | Male | 47 | 2024-1-5 | 2027-1-4 | 5,100 | 19,920 | 14,820 | Bonus issue from capital reserves, and grant of restricted shares | 178.00 | No |
| Wei Lingpeng | Supervisor | Male | 47 | 2024-1-5 | 2027-1-4 | 8,400 | 28,200 | 19,800 | Bonus issue from capital reserves, and grant of restricted shares | 104.26 | No |
| He Min | Employee Supervisor | Male | 41 | 2024- | 2027- | 5,100 | 9,132 | 4,032 | Bonus issue | 85.84 | No |
| 1-5 | 1-4 | from capital reserves, and grant of restricted shares | |||||||||
| Li Guoqiang | Senior Vice President | Male | 57 | 2017-12-23 | 2027-1-4 | 44,200 | 244,008 | 199,808 | Bonus issue from capital reserves, and non-transaction transfer | 273.84 | No |
| Cai Yingfeng | Director and Senior Vice President (former) | Male | 61 | 2017-12-23 | 2024-1-5 | 43,800 | 288,066 | 244,266 | Bonus issue from capital reserves, and non-transaction transfer | 240.45 | No |
| Xie Tao | Independent Director (former) | Male | 61 | 2017-12-23 | 2024-1-5 | 0 | 0 | 0 | 20.00 | No | |
| Zhang Zeping | Independent Director (former) | Male | 51 | 2017-12-23 | 2024-1-5 | 0 | 0 | 0 | 20.00 | No | |
| He Hao | Independent Director (former) | Female | 48 | 2017-12-23 | 2024-1-5 | 0 | 0 | 0 | 20.00 | No | |
| Shen Huiyuan | Chairman of the Supervisory Committee (former) | Male | 60 | 2017-12-23 | 2024-1-5 | 0 | 178,593 | 178,593 | Non-transaction transfer | 272.94 | No |
| Guan Xuejun | Supervisor (former) | Male | 46 | 2017-12-23 | 2024-1-5 | 0 | 89,297 | 89,297 | Non-transaction transfer | 231.46 | No |
| Li Yu | Employee Supervisor (former) | Male | 41 | 2017-12-23 | 2024-1-5 | 0 | 44,648 | 44,648 | Non-transaction transfer | 150.90 | No |
| Zhang Lina | Senior Vice President and Chief Financial Officer (former) | Female | 64 | 2017-12-23 | 2024-1-5 | 21,600 | 121,264 | 99,664 | Bonus issue from capital reserves, | 185.82 | No |
| and non-transaction transfer | |||||||||||
| Total | / | / | / | / | / | 193,989,698 | 271,078,434 | 77,088,736 | / | 3,397.19 | / |
Note 1: For particulars about the changes in non-transaction transfers, see Reminder on Dissolution of Shareholder and Changes in Interests of the ControllingShareholders and the Parties Acting in Concert (announcement No. 2023-046) and Announcement on Completion of Non-transaction Transfers of Shareholders(announcement No. 2023-064).Note 2: Director Zhou Wenchuan, Independent Directors Chen Zhen and Li Gang received remuneration from corporations directly or indirectly controlled by them,or where they acted as directors (excluding independent directors of both parties) or executives. Therefore, "yes" is selected for them for "Remuneration received fromany of the Company’s related parties (yes/no)" in the above table.
| Name | Main work experience |
| Ruan Liping | Born in 1964, Bachelor's degree, Chinese nationality, with permanent residence in Singapore and a Hong Kong Identity Card. He once served as an engineer at Hangzhou Mechanical Design Institute of the Ministry of Water Resources, and Chairman of the Board and President of Goneo Group Co., Ltd. (the former private company). He is currently the Chairman of the Board and President of Goneo Group. Also, he is the General Manager of Goneo Photoelectric, and the Executive Director of Liangji Industrial, among others. |
| Ruan Xueping | Born in 1972, junior secondary education, Chinese nationality, with permanent residence in Singapore and a Hong Kong Identity Card. He once served as the Production Manager of Cixi Goneo, Vice Chairman of the Board of Goneo Group Co., Ltd. (the former private company). He is currently the Vice Chairman of the Board of Goneo Group. Also, he is the Executive Director of Cixi Goneo, and the Supervisor of Liangji Industrial. |
| Liu Shengsong | Born in 1970, Bachelor's degree, engineer, Chinese nationality, no permanent residence abroad. He once served as the Director's Assistant of the Science and Technology Department of Kmk Group, Senior Manager of Midea Group Co., Ltd., Director of strategic operations and Deputy General Manager of the Business Division of AUX Group Co., Ltd., President's Assistant and General Manager of the Business Division of Jiangxi Zhengbang Technology Co., Ltd., and Vice President of Goneo Group Co., Ltd. He is currently a director, Senior Vice President, Board Secretary, and Chief Financial Officer of Goneo Group, with the professional qualification of Board Secretary of the Shanghai Stock Exchange. |
| Zhou Zhenghua | Born in 1972, Master's degree, Chinese nationality, no permanent residence abroad. He once served as a technician of incoming material quality control (IQC) at Zhongshan Kawa Electronic(Group)Co., Ltd., the Managing Officer of quality control (QC) at One Earth Group Limited, General Manager of the product company of Midea Group Co., Ltd., and Vice President of Goneo Group Co., Ltd. (the former private company). He is currently a director and Senior Vice President of Goneo Group, as well as General Manager of the Wall Switch Division of Goneo Group. |
| Xie Weiwei | Born in 1979, Master's degree, Chinese nationality and no permanent residence abroad. He previously served as Operations Manager at Hi-P Shanghai Home Appliance Co., Ltd., Global Operations Manager at Dell (China) R&D Center, Supply Chain Development Manager at Motorola (China) Co., Ltd., Operations Director at Flex Precision Manufacturing Co., Ltd., Vice President of Goneo Group, and General Manager of Converter Business Unit. Currently he serves as Director, Vice President, and General Manager of New Energy Division at Goneo Group Co., Ltd. |
| Zhou Wenchuan | Born in 1983, Master's degree, Ph.D. in progress, permanent resident of Hong Kong. She is currently the President of Meilleure Health International Group, Chairman of the Board of Shenzhen Xiaozhou Investment Co., Ltd., a member of the Standing Executive Committee of Shenzhen Federation |
| of Industry & Commerce (Chamber of Commerce), and a director of Goneo Group. | |
| Chen Zhen | Born in 1957, Master's degree, Chinese nationality, and no permanent residence abroad. She previously served as Director of Legal Affairs Office of Zhejiang Provincial Electric Power Bureau and is currently the Founder and Director of Zhejiang Sunshine Era Law Firm, Vice Chairman of Legal Branch of China Electricity Enterprise Association, Vice Chairman of China Energy Law Research Association, Deputy Director of Renewable Energy Committee of China Energy Research Association, Executive Deputy Chairman of Zhejiang Energy Industry Association, Director of Carbon Neutral Industry Promotion Center of Zhejiang Renewable Energy Association, Independent Director of Hangzhou Redian, and Independent Director of Goneo Group Co., Ltd. |
| Li Gang | Born in 1963, Master's degree, Chinese nationality and no permanent residence abroad. He previously served as Sales Manager of ABB Robotics Business in China, Head of Automotive Industry Business, Head of Robot System Business, President of Robot Business Unit in China, President of Robot and Motion Control Business Unit in China, Senior Vice President of ABB (China) Co., Ltd., Member of the 13th Shanghai Municipal CPPCC. And he currently serves as Vice President of Shanghai Robotics Association, Co-founder and President of Aubo (Beijing) Robotics Technology Co., Ltd., and Independent Director of Goneo Group Co., Ltd. |
| Li Jianbin | Born in 1979, graduated from Peking University with dual bachelor's degrees in law and economics, Chinese nationality, no permanent residence abroad, and holds qualifications as a "Chinese Certified Public Accountant", "Chinese Certified Tax Agent", and "National Legal Professional Qualification (Chinese Certified Lawyer)". He previously served as Partner at Pricewaterhouse Coopers, Vice President of Finance Department at Xiaomi Group, Managing Partner of Strategic Investment Department at Xiaomi Group. Currently he serves as Independent Director of Hong Kong-listed companies Chaoju Eye Care Holdings Limited (2219.HK) and Beijing 4Paradigm Intelligent Technology Co., Ltd. (6682.HK), and Independent Director of Goneo Group Co., Ltd. |
| Yu Yingqi | Born in December 1976, Bachelor's degree, Chinese nationality, no permanent residence abroad. He previously served as a civil servant in Cixi, Zhejiang Province, Director and Vice President of Bowei Group Co., Ltd., Director of Ningbo Bode High-tech Co., Ltd. Currently he serves as Vice Chairman of the Third Enterprise Anti-fraud Alliance, Vice President, Chairman of the Supervisory Committee, and Head of Audit and Inspection Center of Goneo Group Co., Ltd. |
| Wei Lingpeng | Born in October 1976, Master's degree, Company Lawyer, Senior Registered Risk Manager, Chinese nationality, and no permanent residence abroad. He previously served as Manager of Legal Affairs Department and Legal Director at Goneo Group Co., Ltd. Currently he serves as Supervisor and Director of Legal Affairs Department at Goneo Group Co., Ltd. |
| He Min | Born in September 1982, Bachelor's degree, Chinese nationality, and no permanent residence abroad. Since May 2019, he has been working at the Human Resources Center of Goneo Group. Currently he serves as Employee Supervisor and Director of Human Resources Center at Goneo Group Co., Ltd. |
| Li Guoqiang | Born in 1967, junior college’s degree, Chinese nationality, no permanent residence abroad. He used to be a regional manager for TCL International Electrical (Huizhou) Co., Ltd., the Marketing Director of Aidiwei International Electrical (Huizhou) Co., Ltd., and the Marketing Vice President of Goneo Group. He is now a Senior Vice President of Goneo Group. |
Other information:
□ Applicable √ Not applicable
(II) Offices held by incumbent directors, supervisors and senior management and those whoresigned before the end of their tenures during the Reporting Period
1. Offices held concurrently in shareholding entities
√ Applicable □ Not applicable
| Name | Shareholding entity | Office held in the shareholding entity | Start of tenure | End of tenure |
| Ruan Liping | Ningbo Liangji Industrial Co., Ltd. | Executive Director | November 2011 | Currently ongoing |
| Ruan Xueping | Ningbo Liangji Industrial Co., Ltd. | Supervisor | November 2011 | Currently ongoing |
| Note | Not applicable | |||
2. Offices held concurrently in other entities
√ Applicable □ Not applicable
| Name | Other entity | Office held in other entity | Start of tenure | End of tenure |
| Ruan Liping | Wuhan Zhongjia Hongyi Technology Information Industrial Park Co., Ltd. | Director | January 2019 | Currently ongoing |
| Ruan Liping | Ningbo Goneo Precision Manufacturing Co., Ltd. | General Manager | September 2015 | Currently ongoing |
| Ruan Liping | Ningbo Meishan Bonded Port Shuojin Investment Management Co., Ltd. | Executive Director | November 2017 | Currently ongoing |
| Ruan Liping | Cixi Goneo Electrics Co., Ltd. | General Manager | January 2008 | Currently ongoing |
| Ruan Liping | Wuhan Fenjin Power Tech Co., Ltd. | Executive Director | December 2006 | Currently ongoing |
| Ruan Liping | Dalitek Intelligent Technology (Shanghai) Inc. | Chairman of the Board | October 2021 | Currently ongoing |
| Ruan Liping | Ningbo Goneo Photoelectric Technology Co., Ltd. | General Manager | June 2014 | Currently ongoing |
| Ruan Liping | Qingdao Haili Commercial Appliances Co., Ltd. | Director | May 2009 | Currently ongoing |
| Ruan Liping | Shanghai Minshen Property Co., Ltd. | Vice Chairman of the Board | July 1999 | Currently ongoing |
| Ruan Liping | Shenzhen Goneo Intelligent Information Co., Ltd. | General Manager | July 2022 | Currently ongoing |
| Ruan Xueping | Ningbo Meishan Bonded Port Shuojin Investment Management Co., Ltd. | Supervisor | November 2017 | Currently ongoing |
| Ruan Xueping | Cixi Goneo Electrics Co., Ltd. | Executive Director | January 1995 | Currently ongoing |
| Ruan Xueping | Dalitek Intelligent Technology (Shanghai) Inc. | Supervisor | September 2021 | Currently ongoing |
| Ruan Xueping | Shanghai Minshen Property Co., Ltd. | Director | July 1999 | Currently ongoing |
| Ruan Xueping | Shanghai Dumin Real Estate Co., Ltd. | Vice Chairman of the Board | August 2022 | Currently ongoing |
| Ruan Xueping | Shanghai Minshen Real Estate Management Co., Ltd. | Director | August 2005 | Currently ongoing |
| Liu | Wuhan Goneo Investment Management | Supervisor | October 2021 | Currently |
| Shengsong | Co., Ltd. | ongoing | ||
| Liu Shengsong | Shanghai Goneo Information Technology Co., Ltd. | Executive Director | March 2024 | Currently ongoing |
| Liu Shengsong | Wuhan Goneo Venture Capital Co., Ltd. | Supervisor | January 2021 | Currently ongoing |
| Liu Shengsong | Dalitek Intelligent Technology (Shanghai) Inc. | Director | September 2021 | Currently ongoing |
| Zhou Zhenghua | Ningbo Goneo Electrics Co., Ltd. | Executive Director and General Manager | February 2023 | Currently ongoing |
| Zhou Zhenghua | Ningbo Goneo Intelligent Technology Co., Ltd. | Executive Director and General Manager | February 2023 | Currently ongoing |
| Xie Weiwei | Ningbo Qiquanyang Trading Co., Ltd. | Executive Director, Manager | September 2023 | Currently ongoing |
| Xie Weiwei | Ningbo Goneo New Energy Technology Co., Ltd. | Executive Director and General Manager | April 2022 | Currently ongoing |
| Zhou Wenchuan | U-Home Group Co., Ltd. | Supervisor | June 2010 | Currently ongoing |
| Zhou Wenchuan | Wuhu Meilleure Health Management Co., Ltd. | General Manager | April 2018 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Xiaozhou Investment Co., Ltd. | General Manager | January 2009 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Yinguan Biological Technology Co., Ltd. | Director | February 2019 | Currently ongoing |
| Zhou Wenchuan | Zhuhai Fuhai Canyang Investment Development Co., Ltd. | Director | December 2009 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Meilleure Health Technology Company Limited | Executive Director | February 2024 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Taiwa Smart Charging Technology Co., Ltd. | Director | March 2024 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Ruima Technology Co., Ltd. | Executive Director and General Manager | September 2019 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Meiray Vap Technology Co., Ltd. | Chairman of the Board | December 2019 | Currently ongoing |
| Zhou Wenchuan | Shenzhen Skin Analysis Medical Beauty Clinic | Chairman of the Board | June 2017 | Currently ongoing |
| Zhou Wenchuan | Meilleure Health International Group Co., Ltd. | Vice Chairman of the Board and President | August 2013 | Currently ongoing |
| Zhou Wenchuan | Wuhu Ruimei Kunhe Industrial Investment Co., Ltd. | Executive Director and General Manager | September 2023 | Currently ongoing |
| Zhou | Kunshan Ruimei Kunrun Industrial | Executive | November | Currently |
| Wenchuan | Investment Co., Ltd. | Director | 2023 | ongoing |
| Zhou Wenchuan | Wuhu Ruimei Kuncheng Industrial Investment Co., Ltd. | Executive Director and General Manager | September 2023 | Currently ongoing |
| Zhou Wenchuan | Wuhu Ruimei Kunrun Industrial Investment Co., Ltd. | Executive Director and General Manager | September 2023 | Currently ongoing |
| Zhou Wenchuan | Beijing Meiaikang Technology Co., Ltd. | Director | February 2020 | Currently ongoing |
| Zhou Wenchuan | Wuhu Xiaozhou Investment Co., Ltd. | General Manager | October 2019 | Currently ongoing |
| Chen Zhen | Zhejiang Sunshine Era Law Firm | Founder, Director | February 1995 | Currently ongoing |
| Chen Zhen | Hangzhou Redian Group Co., Ltd | Independent Director | June 2018 | Currently ongoing |
| Li Gang | Aubo (Beijing) Robotics Technology Co., Ltd. | Co-founder and President | January 2015 | Currently ongoing |
| Li Gang | Shanghai Xintonglian Packaging Co., Ltd. | Independent Director | May 2022 | Currently ongoing |
| Li Jianbin | Chaoju Eye Care Holdings Limited | Independent Director | July 2021 | Currently ongoing |
| Li Jianbin | Beijing 4Paradigm Intelligent Technology Co., Ltd. | Independent Director | July 2021 | Currently ongoing |
| Yu Yingqi | Ningbo Goneo Supply Chain Management Co., Ltd. | Executive Director, General Manager | January 2023 | Currently ongoing |
| Li Guoqiang | Ningbo Goneo International Trading Co., Ltd. | Executive Director and General Manager | January 2023 | Currently ongoing |
| Cai Yingfeng (former) | Hainan Dacheng Supply Chain Management Co., Ltd. | Executive Director and General Manager | January 2021 | Currently ongoing |
| Xie Tao (former) | Shanghai Vico Precision Mold &Plastics Co., Ltd. | Director | May 2021 | Currently ongoing |
| Xie Tao (former) | China Yuchai International Limited | Independent Director | September 2020 | Currently ongoing |
| Xie Tao (former) | Zhejiang Wanfeng Auto Wheel Co., Ltd. | Independent Director | June 2020 | Currently ongoing |
| Zhang Zeping (former) | Shanghai Allied Industrial Co., Ltd. | Independent Director | December 2022 | Currently ongoing |
| Zhang Zeping (former) | Suzhou Kelinyuan Electronics Co., Ltd. | Director | January 2022 | Currently ongoing |
| Zhang Zeping (former) | CTS International Logistics Corporation Limited | Independent Director | January 2023 | Currently ongoing |
| Zhang Zeping (former) | Shenzhen Soocas Technology Co., Ltd. | Independent Director | October 2020 | September 2023 |
| He Hao (former) | Hang Fun International Group Limited | CEO | March 2023 | Currently ongoing |
| He Hao (former) | Shanghai Hang Fun Yunchao Intelligent Technology Co., Ltd. | Executive Director | August 2023 | Currently ongoing |
| He Hao (former) | Shanghai Xingduo Investment Partnership Enterprise (Limited Partnership) | Executive Partner | July 2018 | Currently ongoing |
| He Hao (former) | Shanghai Heyue Intelligent Technology Co., Ltd. | Executive Director | June 2022 | Currently ongoing |
| He Hao (former) | Beijing Xinghao Kairui Technology Co., Ltd. | Executive Director and Manager | December 2018 | Currently ongoing |
| Shen Huiyuan (former) | Hainan Dacheng Supply Chain Management Co., Ltd. | Supervisor | January 2021 | Currently ongoing |
| Guan Xuejun (former) | Ningbo Goneo Electric Sales Co., Ltd. | Executive Director and General Manager | December 2022 | Currently ongoing |
| Li Yu (former) | Ningbo Goneo Supply Chain Management Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu (former) | Ningbo Goneo Precision Manufacturing Co., Ltd. | Supervisor | November 2019 | Currently ongoing |
| Li Yu (former) | Ningbo Goneo Electrics Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu (former) | Cixi Goneo Electrics Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu (former) | Ningbo Goneo Low Voltage Electric Co., Ltd. | Executive Director and Manager | December 2022 | Currently ongoing |
| Li Yu (former) | Ningbo Banmen Electric Appliance Co., Ltd. | Supervisor | October 2021 | Currently ongoing |
| Li Yu (former) | Ningbo Goneo IntelligentTechnology Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu (former) | Ningbo Goneo Domestic Electrical Appliance Co., Ltd. | Supervisor | April 2020 | Currently ongoing |
| Li Yu (former) | Ningbo Goneo International Trading Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu (former) | Ningbo Goneo Digital Technology Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu (former) | Ningbo Goneo Photoelectric Technology Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Li Yu (former) | Shanghai Goneo Electrics Co., Ltd. | Supervisor | December 2017 | Currently ongoing |
| Zhang Lina (former) | Dalitek Intelligent Technology (Shanghai) Inc. | Supervisor | September 2021 | Currently ongoing |
| Note | Not applicable | |||
(III) Remunerations of directors, supervisors and senior management
√ Applicable □ Not applicable
| Decision-making procedures for the remuneration of directors, supervisors and senior management | The remuneration of directors and supervisors shall be deliberated and determined by the General Meeting of Shareholders. The remuneration of senior management personnel shall be reviewed and determined by the Board of |
| personnel | Directors. |
| Whether a director recused himself/herself from the Board’s discussion of his/her remuneration matters | Not applicable (personal remunerations not discussed) |
| Details of recommendations issued by the Remuneration and Appraisal Committee or independent directors at any special meeting on matters relating to the remunerations of directors, supervisors and senior management | The Remuneration and Appraisal Committee has approved the proposal on the matters relating to the remunerations of directors and senior management and unanimously agreed to submit the proposal to the Board of Directors and a general meeting of shareholders for review. |
| Basis for determining the remuneration of directors, supervisors and senior management personnel | Internal directors, supervisors and senior management personnel are paid remuneration in accordance with the specific management positions they hold in the Company, taking into account the Company's business picture, relevant remuneration system and results of performance appraisals. The remuneration of independent directors is based on an allowance system, and directors who do not hold specific management positions in the Company will not receive remuneration. |
| Actual payment of remuneration for directors, supervisors and senior management personnel | The earnings disclosed in the report represent the actual remuneration of the directors, supervisors and senior management personnel. |
| Total actual remuneration received by all directors, supervisors and senior management personnel at the end of the Reporting Period | RMB33.9719 million |
(IV) Changes of directors, supervisors and senior management
√ Applicable □ Not applicable
| Name | Office title | Type of change | Reason for change |
| Cai Yingfeng | Director and Senior Vice President | Resignation | Re-election of the Board of Directors |
| Xie Tao | Independent Director | Resignation | Re-election of the Board of Directors |
| Zhang Zeping | Independent Director | Resignation | Re-election of the Board of Directors |
| He Hao | Independent Director | Resignation | Re-election of the Board of Directors |
| Shen Huiyuan | Chairman of the Supervisory Committee | Resignation | Re-election of the Supervisory Committee |
| Guan Xuejun | Supervisor | Resignation | Re-election of the Supervisory Committee |
| Li Yu | Employee Supervisor | Resignation | Re-election of the Supervisory Committee |
| Zhang Lina | Senior Vice President and Chief Financial Officer | Resignation | Resignation upon expiry of tenure |
| Xie Weiwei | Director | Elected | Re-election of the Board of Directors |
| Chen Zhen | Independent Director | Elected | Re-election of the Board of Directors |
| Li Gang | Independent Director | Elected | Re-election of the Board of Directors |
| Li Jianbin | Independent Director | Elected | Re-election of the Board of Directors |
| Yu Yingqi | Chairman of the Supervisory Committee | Elected | Re-election of the Supervisory Committee |
| Wei Lingpeng | Supervisor | Elected | Re-election of the Supervisory Committee |
| He Min | Employee Supervisor | Elected | Re-election of the Supervisory Committee |
| Liu Shengsong | Chief Financial Officer | Appointed | Appointed by the Board of Directors |
Note: The Company’s directors, supervisors and senior management remained the same duringthe Reporting Period.
1. On 3 January 2024, He Min was elected as the Employee Supervisor of the ThirdSupervisory Committee at the Seventh Meeting of the Second Workers’ Congress. For furtherinformation, see Announcement on the Election Results for Employee Supervisor of the ThirdSupervisory Committee (announcement No. 2024-001).
2. On 5 January 2024, Ruan Liping, Ruan Xueping, Zhou Wenchuan, Liu Shengsong, ZhouZhenghua and Xie Weiwei were elected as non-independent directors of the Third Board ofDirectors, Chen Zhen, Li Gang and Li Jianbin were elected as independent directors of the ThirdBoard of Directors, and Yu Yingqi and Wei Lingpeng were elected as non-employee supervisors ofthe Third Supervisory Committee, at the First Extraordinary General Meeting of Shareholders of2024. For further information, see Announcement on the Resolutions of the First ExtraordinaryGeneral Meeting of Shareholders of 2024 (announcement No. 2024-002).
3. On 5 January 2024, Liu Shengsong was appointed as Board Secretary and Chief FinancialOfficer at the First Meeting of the Third Board of Directors. For further information, seeAnnouncement on the Resolutions of the First Meeting of the Third Board of Directors(announcement No. 2024-003).
(V) Punishments imposed by securities regulators in the past three years
□ Applicable √ Not applicable
(VI) Other information
□ Applicable √ Not applicable
V Board Meetings Convened during the Reporting Period
| Meeting | Date | Resolutions |
| The 17th Meeting of the Second Board of Directors | 27 April 2023 | The Proposal on the Work Report of the President (General Manager) in 2022, Proposal on the Work Report of the Board of Directors in 2022, Proposal on the Financial Final Account Report of 2022, Proposal on the Annual Report and its Summary for 2022, Proposal on the First Quarterly Report 2023, Proposal on the Plan for Profit Distribution and Bonus Issue from Capital Reserves for 2022, Proposal on the 2022 Annual Internal Control Evaluation Report, Proposal on the 2022 Environmental, Social and Governance Report, Proposal on the Work Report of Independent Directors for 2022, Proposal on the Report on the Performance of the Audit and Risk Committee of the Board of Directors for 2022, Proposal on |
| the Estimated Routine Related-party Transactions of the Company in 2023, Proposal on the Renewal of the Annual Auditor for 2023, Proposal on the Use of Equity Funds for Entrusting Wealth Management, Proposal on Conducting Foreign Exchange Derivative Trading, Proposal on the Special Report on the Deposit and Actual Use of Raised Funds for 2022, Proposal on the Restricted Share Incentive Plan in 2023 (Draft) and Its Summary, Proposal on the Management Measures for the Assessment of the Restricted Share Incentive Plan for 2023, Proposal on the Request to the General Meeting to Authorise the Board of Directors to Handle Share Incentive-Related Matters, Proposal on the Repurchase and Retirement of Certain Restricted Shares, Proposal on Amendments to the Articles of Association, and Proposal on Holding 2022 Annual General Meeting of Shareholders were approved. | ||
| The 18th Meeting of the Second Board of Directors | 9 June 2023 | The Proposal on the Adjustment of the Repurchase Price and Number of the 2020 Restricted Share Incentive Plan, Proposal on the Adjustment of the Repurchase Price and Number of the 2021 Restricted Share Incentive Plan, Proposal on the Adjustment of the Repurchase Price and Number of the 2022 Restricted Share Incentive Plan, Proposal on Adjusting the Number of Grants and the Grant Price of the 2023 Restricted Share Incentive Plan, Proposal on Granting Restrictive Shares to Awardees, Proposal on the Achievement of Lifting the Restriction Conditions in the Third Lifting Period of the 2020 Restricted Share Incentive Plan, Proposal on the Achievement of Lifting the Restriction Conditions in the Second Lifting Restriction Period of the 2021 Restricted Share Incentive Plan, and Proposal on the Achievement of Lifting the Restriction Conditions in the First Lifting Restriction Period of the 2022 Restricted Share Incentive Plan were approved. |
| The 19th Meeting of the Second Board of Directors | 17 August 2023 | The Proposal on the 2023 Interim Report and the Summary, Proposal on the Special Report on the Deposit and Actual Use of Raised Funds for H1 2023, Proposal on Amendments to the Articles of Association, and Proposal on Amendments to the Employee Home Purchase Loan Management Rules were approved by the resolution. |
| The 20th Meeting of the Second Board of Directors | 26 October 2023 | The Proposal on the Third Quarterly Report 2023, and Proposal on the Repurchase and Retirement of Certain Restricted Shares were approved. |
| The 21st Meeting of the Second Board of Directors | 20 December 2023 | The Proposal on the Re-election of the Board of Directors & the Nomination of Non-independent Director Candidates for the Third Board of Directors, Proposal on the Re-election of the Board of Directors & the Nomination of Independent Director Candidates for the Third Board of Directors, Proposal on the Remuneration Plan for the Directors of the Third Board of Directors and Senior Management, Proposal on Amendments to the Articles of Association, Proposal on Amendments to the Rules of Procedure for General Meetings of Shareholders; Proposal on Amendments to the Rules of Procedure for the Board of Directors, Proposal on Amendments to the Work Rules for Independent Directors, Proposal on Amendments to the Management Methods for the Use of Raised Funds, Proposal on Amendments to Certain Corporate Governance Rules, Proposal on the Use of Equity Funds for Entrusting Wealth Management, Proposal on the Extension of Some |
Investment Projects with Raised Funds, Proposal on theConclusion of Some Investment Projects with Raised Funds andthe Use of the Surplus Raised Funds for PermanentReplenishment of Working Capital, and Proposal on Holdingthe First Extraordinary General Meeting of Shareholders of2023 were approved.
VI Performance of Duty by Directors(I) Attendance of directors at board meetings and general meetings of shareholders during theReporting Period
| Name of director | Independent director or not | Attendance at board meetings | Attendance at general meetings of shareholders | |||||
| Total number of board meetings the director was supposed to attend | Board meetings attended on site | Board meetings attended by way of telecommunication | Board meetings attended through a proxy | Absence | The director failed to attend two consecutive board meetings (yes/no) | Total number of general meetings of shareholders the director was supposed to attend | ||
| Ruan Liping | No | 5 | 5 | 1 | 0 | 0 | No | 2 |
| Ruan Xueping | No | 5 | 5 | 2 | 0 | 0 | No | 2 |
| Liu Shengsong | No | 5 | 5 | 1 | 0 | 0 | No | 2 |
| Zhou Zhenghua | No | 5 | 5 | 1 | 0 | 0 | No | 2 |
| Xie Weiwei | No | 0 | 0 | 0 | 0 | 0 | No | 0 |
| Zhou Wenchuan | No | 5 | 5 | 2 | 0 | 0 | No | 2 |
| Chen Zhen | Yes | 0 | 0 | 0 | 0 | 0 | No | 0 |
| Li Gang | Yes | 0 | 0 | 0 | 0 | 0 | No | 0 |
| Li Jianbin | Yes | 0 | 0 | 0 | 0 | 0 | No | 0 |
| Cai Yingfeng (former) | No | 5 | 5 | 3 | 0 | 0 | No | 2 |
| Xie Tao (former) | Yes | 5 | 5 | 2 | 0 | 0 | No | 2 |
| Zhang Zeping (former) | Yes | 5 | 5 | 3 | 0 | 0 | No | 2 |
| He Hao (former) | Yes | 5 | 5 | 2 | 0 | 0 | No | 2 |
Explain why any director failed to attend two consecutive board meetings.
□ Applicable √ Not applicable
| Total number of board meetings convened in the Reporting Period | 5 |
| Of which: on-site meetings | 2 |
| Meetings convened by way of telecommunication | 1 |
| Meetings where on-site attendance and attendance by telecommunication were both allowed | 2 |
(II) Objections raised by directors on matters of the Company
□ Applicable √ Not applicable
(III) Other information
□ Applicable √ Not applicable
VII Specialized Committees under the Board of Directors
√ Applicable □ Not applicable
(I) Members of the specialized committees
| Specialized committee | Members |
| Audit and Risk Committee | Li Jianbin (convener), Chen Zhen, and Ruan Xueping |
| Nomination Committee | Li Gang (convener), Li Jianbin, and Ruan Liping |
| Remuneration and Appraisal Committee | Chen Zhen (convener), Li Gang, and Ruan Liping |
| Strategy Committee | Ruan Liping (convener), Chen Zhen, Li Gang, Li Jianbin, and Liu Shengsong |
Note: On 5 January 2024, the Proposal on the Election of Members for the Specialized Committeesof the Board of Directors was approved at the First Meeting of the Third Board of Directors. As theBoard of Directors was re-elected, members of the specialized committees were also adjusted. Forfurther information, see Announcement on the Resolutions of the First Meeting of the Third Boardof Directors (announcement No. 2024-003).
(II) The Audit and Risk Committee held three meetings during the Reporting Period.
| Date | Contents | Important comments and suggestions | Other performance of duties |
| 19 April 2023 | The Proposal on the 2022 Annual Report and the Summary, Proposal on the First Quarterly Report 2023, Proposal on the Financial Final Account Report of 2022, Proposal on the Estimated Continuing Related-party Transactions in 2023, Proposal on the Renewal of the Annual | The Audit and Risk Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the | For details, please refer to the Report of Goneo Group Co., Ltd. On the Duty Performance of the Audit and Risk Committee of the Board of Directors in 2023. |
| Auditor for 2023, Proposal on the Special Report on the Deposit and Actual Use of Raised Funds for 2022, Proposal on the 2022 Annual Internal Control Evaluation Report, and Proposal on the Work Report of the Audit and Risk Management Joint Office for 2022 were approved. | Company. Upon full communication and discussion, all proposals were unanimously approved. | ||
| 4 August 2023 | The Proposal on the 2023 Interim Report and the Summary, Proposal on the Special Report on the Deposit and Actual Use of Raised Funds for H1 2023, and Work Summary Report of the Audit and Risk Control Centre for H1 2023 were approved. | The Audit and Risk Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | For details, please refer to the Report of Goneo Group Co., Ltd. On the Duty Performance of the Audit and Risk Committee of the Board of Directors in 2023. |
| 20 October 2023 | The Proposal on the Third Quarterly Report 2023 was approved. | The Audit and Risk Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | For details, please refer to the Report of Goneo Group Co., Ltd. On the Duty Performance of the Audit and Risk Committee of the Board of Directors in 2023. |
(III) The Remuneration and Appraisal Committee held three meetings during the ReportingPeriod.
| Date | Contents | Important comments and suggestions | Other performance of duties |
| 27 April 2023 | The Proposal on the 2023 Restricted Share Incentive Plan (Draft) and the Summary, and Proposal on the Management Measures for the Appraisal of the 2023 Restricted Share Incentive | The Remuneration and Appraisal Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with |
| Plan were approved. | diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | ||
| 9 June 2023 | The Proposal on the Achievement of Lifting the Restriction Conditions in the Third Lifting Restriction Period of the 2020 Restricted Share Incentive Plan, Proposal on the Achievement of Lifting the Restriction Conditions in the Second Lifting Restriction Period of the 2021 Restricted Share Incentive Plan, and Proposal on the Achievement of Lifting the Restriction Conditions in the First Lifting Restriction Period of the 2022 Restricted Share Incentive Plan were approved. | The Remuneration and Appraisal Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. | |
| 19 December 2023 | The Proposal on the Remuneration Plan for the Directors of the Third Board of Directors and Senior Management was approved. | The Remuneration and Appraisal Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. |
(IV) The Nomination Committee held one meeting during the Reporting Period.
| Date | Contents | Important comments and suggestions | Other performance of duties |
| 19 December 2023 | The Proposal on the Nomination of Non-independent Director Candidates for the Third Board of Directors, and Proposal on the Nomination of Independent Director | The Nomination Committee carried out its work in strict accordance with laws, regulations and relevant rules and policies with diligence. |
| Candidates for the Third Board of Directors were approved. | It put forward relevant opinions based on the reality of the Company. Upon full communication and discussion, all proposals were unanimously approved. |
(V) Objections
□ Applicable √ Not applicable
VIII Risks Detected by the Supervisory Committee
□ Applicable √ Not applicable
The Supervisory Committee raised no objections during the Reporting Period.
IX Employees of the Company as the Parent and Its Principal Subsidiaries at the Period-end(I) Employees
| Number of in-service employees of the Company as the parent | 4,108 |
| Number of in-service employees of principal subsidiaries | 9,638 |
| Total number of in-service employees | 13,746 |
| Number of retirees to whom the Company as the parent or its principal subsidiaries need to pay retirement pensions | 0 |
| Functions | |
| Function | Employees |
| Production | 8,772 |
| Sales | 1,298 |
| Technical | 1,954 |
| Financial | 169 |
| Administrative | 1,553 |
| Total | 13,746 |
| Educational background | |
| Educational background | Employees |
| Bachelor’s degree and above | 2,402 |
| Junior college | 2,252 |
| Technical secondary school and below | 9,092 |
| Total | 13,746 |
(II) Remuneration policy
√ Applicable □ Not applicable
The Company further improved its remuneration management and incentive mechanismsystem and enhanced the competitiveness of employee remunerations by revising the managementsystem related to remuneration and benefits and reviewing remuneration guide lines for all levelsand categories of employees on a regular basis, with changes in the labor market taken into account.Following the start of the Company's expansion into overseas markets, special adjustments weremade to the welfare and incentive policies for overseas personnel to support the Company'sexpansion overseas. The Company conducted comprehensive and objective appraisals of employees
from dimensions such as company operating performance, job value, personal performance andpersonal ability. And it continued to improve the performance-oriented system of assessment,training, promotion and incentive, fully mobilizing the creativity and enthusiasm of employees andpromoting the Company's performance growth and personal career development while improvingthe remuneration and benefits.
(III)Training plans
√ Applicable □ Not applicable
The Company actively focuses on talent cultivation and development, focusing on thecultivation and construction of its cadre team, expert team, skilled worker team, and young talentteam, cultivating outstanding talents to continuously provide high-quality talents for businessdevelopment. In talent cultivation, the Company adheres to the learning philosophy of "combinationof training and practice, with a focus on practice and supplemented by training". For cadre teamtraining, based on the Goneo Talent Standard, the Company implemented multiple middle-levelcadre leadership training camps in 2023. For the expert team, diverse professional knowledgetraining resources are provided based on "BBS capabilities" and "professional job competencymodels". At the same time, training camps for team leaders and captains, as well as trainingprogrammes for grassroots technical positions, are carried out in an orderly manner. For youngtalents, the Company recruited more than 300 outstanding college students nationwide andimplemented the Goneo Plan training camp in accordance with the requirements of young talents,comprehensively cultivating excellent young people in line with the Company's cultural values andcompetency requirements. A culture of talent cultivation and development is built in all aspects andfields.
(IV) Labor outsourcing
□ Applicable √ Not applicable
X Dividend Payouts(I) Formulation, execution and adjustments of the cash dividend policy
√ Applicable □ Not applicable
1. The cash dividend policy
The Articles of Association clarifies the decision-making procedures and mechanism for profitdistribution, the principles of profit distribution, the conditions and proportion of cash dividends,etc., ensuring the transparency and operability of cash dividends to effectively safeguard thelegitimate rights and interests of small and medium shareholders and investors. The Company'sprofit distribution plan is strictly implemented in accordance with the provisions of the Articles ofAssociation and the resolutions of the Company's General Meeting of Shareholders.
The Company will implement sustaining and stable profit distribution methods in line with theprovisions of the Articles of Association. The Company may distribute dividends by means of cash,stocks, a combination of cash and stocks, or other means permitted by laws and regulations.
Among the profit distribution methods, the Company gives priority to cash dividends overstock dividends; if the Company adopts stock dividends for profit distribution, it shall have takeninto account factors such as its growth and stock liquidity.Description of dividends in the Articles of Association: The Board of Directors of the Companyshall comprehensively consider factors such as the Company's industry characteristics, developmentphase, business model, profitability, and whether there are arrangements for major capitalexpenditures, distinguish the following circumstances, and propose differentiated cash dividendpolicies according to the procedures set forth in the Articles of Association:
(1) If the Company is in the phase of mature development and there is no arrangement formajor capital expenditures, cash dividends shall account for at least 80% in the profit distribution;
(2) If the Company is in the phase of mature development and there are arrangements for majorcapital expenditures, cash dividends shall account for at least 40% in the profit distribution;
(3) If the Company is in the growth period and there are arrangements for major capitalexpenditures, cash dividends shall account for at least 20% in the profit distribution; where it isdifficult to distinguish the Company's development phase but there are arrangements for majorcapital expenditures, it may be handled in accordance with the provisions of the preceding paragraph.
2. Cash dividend payouts during the Reporting Period
As approved at the 2022 Annual General Meeting of Shareholders on 18 May 2023, the 2022final dividend payout was carried out. Based on the total share capital of 601,077,590 shares minusthe 46 shares in the repurchased share account at the record date of the dividend payout (i.e. 7 June2023), the Company paid out a cash dividend of RMB33 (tax inclusive) per 10 share to itsshareholders, with a bonus issue of 4.8 additional shares for every 10 shares held by shareholdersfrom capital reserves. The total amount of the cash dividend payout was RMB1,983,555,895.20 (taxinclusive), accounting for 62.21% of the net profit attributable to the Company’s ordinaryshareholders during 2022. The dividend payout was completed on 8 June 2023.
According to the applicable regulations, the cash amount of RMB215,219,556.49 that was usedto repurchase shares during 2022 was included in the cash dividend amount. Therefore, the totalamount of the cash dividend payout was RMB2,198,775,451.69 (tax inclusive), accounting for
68.96% of the net profit attributable to the Company’s ordinary shareholders during 2022.
(II) Special statement on the cash dividend policy
√ Applicable □ Not applicable
| In compliance with the Company’s Articles of Association or the relevant resolutions of general meeting of shareholders | √ Yes □ No |
| Specific and clear dividend standards and ratios | √ Yes □ No |
| Complete decision-making procedure and mechanism | √ Yes □ No |
| Independent directors have faithfully performed their duties and played their due role | √ Yes □ No |
| Non-controlling shareholders are able to fully express their opinion and demand and their legal rights and interests are fully protected | √ Yes □ No |
(III) Where the Company fails to put forward a cash dividend proposal despite the facts thatthe Company has made profits in the Reporting Period and the profits of the Company as theparent distributable to shareholders are positive, it shall give a detailed explanation of why, aswell as of the purpose and use plan for the retained earnings.
□ Applicable √ Not applicable
(IV) Final dividend plan for the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
| Bonus issue from profit (share/10 shares) | / |
| Cash dividend/10 shares (tax inclusive) | 31 |
| Bonus issue from capital reserves (share/10 shares) | 4.5 |
| Cash dividends (tax inclusive) | 2,763,776,569.90 |
| Consolidated net profit attributable to the ordinary shareholders of the listed company in the year | 3,870,135,376.47 |
| Cash dividends as % of consolidated net profit attributable to the ordinary shareholders of the listed company | 71.41 |
| Cash dividends in form of share repurchase in cash | 0 |
| Total dividend amount (tax inclusive) | 2,763,776,569.90 |
| Total dividend amount as % of consolidated net profit attributable to the ordinary shareholders of the listed company | 71.41 |
XI Status and Impact of Share Incentive Plans, Employee Shareholding Plan or OtherIncentive Measures for Employees(I)Relevant incentive matters disclosed in current announcement with no subsequent progressor change
√ Applicable □ Not applicable
| Overview | Index to the disclosed information |
| To further establish and improve its long-term incentive mechanisms, attract and retain outstanding talent, fully mobilise the Company's core team, effectively align the interests of shareholders, the Company and its core team, and promote all stakeholders’ common focus on the Company's long-term development , the Company formulated the 2023 Restricted Share Incentive Plan (Draft) of Goneo Group and its summary, completed the registration of the grant of the 2023 Restricted Share Incentive Plan on 29 June 2023, and granted a total of 2,189,848 restricted shares to 750 people at a price of RMB48.95/share. | For details, please refer to the following announcements disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn): The 2023 Restricted Share Incentive Plan (Draft) of Goneo Group; The Announcement on Adjusting the Number of Grants and the Grant Price of the 2023 Restricted Share Incentive Plan (Announcement No.: 2023-039); and The Announcement on the Grant Results of the 2023 Restricted Share Incentive Plan (Announcement No.: 2023-049) |
| According to the provisions of the 2020 Restricted Share Incentive Plan of Goneo Group Co., Ltd., the 2021 Restricted Share Incentive Plan of Goneo Group Co., Ltd., and the 2022 Restricted Share Incentive Plan of | For details, please refer to the following announcements disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn): |
| Goneo Group Co., Ltd., some awardees have lost the incentive qualification of the Incentive Plan due to their departure from the Company, and the Company completed the repurchase and cancellation of 47,170 restricted shares held by them which had been granted but not lifted from restricted sales on 4 September 2023. | The Announcement on the Repurchase and Cancellation of Some Restricted Shares (Announcement No.: 2023-024); The Announcement on Notifying Creditors of the Repurchase and Cancellation of Some Restricted Shares (Announcement No.: 2023-025); The Announcement on Adjusting the Repurchase Price and Number for the 2020 Restricted Share Incentive Plan (Announcement No.: 2023-036); The Announcement on Adjusting the Repurchase Price and Number for the 2021 Restricted Share Incentive Plan (Announcement No.: 2023-037); The Announcement on Adjusting the Repurchase Price and Number for the 2022 Restricted Share Incentive Plan (Announcement No.: 2023-038); and The Announcement on the Implementation of the Repurchase and Cancellation of Some Restricted Incentive Shares (Announcement No.: 2023-063) |
| According to the relevant provisions of the 2020 Restricted Share Incentive Plan, the lifting of the restriction conditions in the third lifting restriction period of the 2020 Restricted Share Incentive Plan has been achieved, and a total of 217,599 shares held by 441 awardees have met the conditions for lifting the sale restrictions, which were unlocked and listed on 6 July 2023. | For details, please refer to the following announcements disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn): The Announcement on Satisfaction of the Conditions for Lifting Restriction in the Third Lifting Restriction Period of the 2020 Restricted Share Incentive Plan (Announcement No.: 2023-041); and The Announcement on Lifting the Restriction Conditions in the Third Lifting Restriction Period of the 2020 Restricted Share Incentive Plan and Trading in the Market (Announcement No.: 2023-050) |
| According to the relevant provisions of the 2021 Restricted Share Incentive Plan, the lifting of the restriction conditions in the second lifting restriction period of the 2021 Restricted Share Incentive Plan has been achieved, and a total of 258,766 shares held by 455 awardees have met the conditions for lifting the sale restrictions, which were unlocked and listed on 17 July 2023. | For details, please refer to the following announcements disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn): The Announcement on Satisfaction of the Conditions for Lifting Restriction in the Second Lifting Restriction Period of the 2021 Restricted Share Incentive Plan (Announcement No.: 2023-042); and The Announcement on Lifting the Restriction Conditions in the Second Lifting Restriction Period of the 2021 Restricted Share Incentive Plan and Trading in the Market (Announcement No.: 2023-054) |
| According to the relevant provisions of the 2022 Restricted Share Incentive Plan, the lifting of the restriction conditions in the first lifting restriction period of the 2022 Restricted Share Incentive Plan has been achieved, and a total of 811,283 shares held | For details, please refer to the following announcements disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn): The Announcement on Satisfaction of the Conditions for Lifting Restriction in the First |
| by 610 awardees have met the conditions for lifting the sale restrictions, which were unlocked and listed on 21 June 2023. | Lifting Restriction Period of the 2022 Restricted Share Incentive Plan (Announcement No.: 2023-043); and The Announcement on Lifting the Restriction Conditions in the First Lifting Restriction Period of the 2022 Restricted Share Incentive Plan and Trading in the Market (Announcement No.: 2023-045) |
| According to the provisions of the 2020 Restricted Share Incentive Plan of Goneo Group Co., Ltd., the 2021 Restricted Share Incentive Plan of Goneo Group Co., Ltd., the 2022 Restricted Share Incentive Plan of Goneo Group Co., Ltd., and the 2023 Restricted Share Incentive Plan of Goneo Group Co., Ltd., some awardees have lost the incentive qualification of the Incentive Plan due to their departure from the Company, and the Company completed the repurchase and cancellation of 173,974 restricted shares held by them which had been granted but not lifted from restricted sales on 22 December 2023. | For details, please refer to the following announcements disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn): The Announcement on the Repurchase and Cancellation of Some Restricted Shares (Announcement No.: 2023-072); The Announcement on Notifying Creditors of the Repurchase and Cancellation of Some Restricted Shares (Announcement No.: 2023-073); and The Announcement on the Implementation of the Repurchase and Cancellation of Some Restricted Incentive Shares (Announcement No.: 2023-076) |
(II) Incentive Plans undisclosed in current announcements or disclosed but with new progressEquity Incentive Plans:
□ Applicable √ Not applicable
Other information:
□ Applicable √ Not applicable
Employee stock ownership plans:
□ Applicable √ Not applicable
Other incentive measures:
□ Applicable √ Not applicable
(III) Equity incentives granted to directors and senior management during the ReportingPeriod
□ Applicable √ Not applicable
(IV) Establishment and formulation of appraisal and incentive mechanisms for seniormanagement during the Reporting Period
√ Applicable □ Not applicable
The remuneration of the senior management personnel of the Company is implemented basedon the actual operations and the relevant rules of the Company.
XII Development and implementation of internal control systems during the Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, in strict compliance with the Company Law, Securities Law,Code of Corporate Governance for Listed Companies, Guidelines for Evaluation of EnterpriseInternal Control and other relevant laws and regulations, the Company continuously established andimproved its internal control system and enhanced the level of internal control management. The
risk and internal control management organization system, comprising the Audit and RiskCommittee and the Internal Audit Department, supervises and evaluates the internal controlmanagement of the Company. Through comprehensive risk identification and management, andsound operation and checking of the internal control system, the Company has effectively preventedvarious risks in its operation, promoted the realisation of internal control objectives, and furtherstrengthened compliance in operation.
Explanation of material weaknesses in internal control during the Reporting Period:
□ Applicable √ Not applicable
XIII Management and control over subsidiaries during the Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company strictly followed the requirements of the ShanghaiStock Exchange and various rules and regulations of the Board of Directors of the Company toregulate the management and risk control of subsidiaries. Subsidiaries reported significantinformation such as operations to the Company, and there were no undisclosed matters that shouldhave been disclosed.
XIV Independent auditor’s report on internal control
√ Applicable □ Not applicable
Upon its audit on the effectiveness of the Company’s internal control over financial reportingfor 2023, Pan-China Certified Public Accountants LLP is of the opinion that the Companymaintained, in all material respects, effective internal control over financial reporting as of 31December 2023, based on the Basic Rules on Enterprise Internal Control and other applicableregulations. For further information, see the Independent Auditor’s Report on Internal Control for2023, which has been disclosed together with this Report on the website of the Shanghai StockExchange (www.sse.com.cn).
Whether the Independent Auditor’s Report on Internal Control is disclosed: YesType of the independent auditor’s opinion: Unmodified unqualified opinion
XV Remediation of problems identified by self-inspection in the special action on thegovernance of the CompanyNot applicable
XVI Other information
□ Applicable √ Not applicable
Part V Environmental and Social Responsibility
I Environmental information
| Whether any environment protecting mechanism has been established | Yes |
| Spending on environmental protection during the Reporting Period (unit: RMB’0,000) | 599.34 |
(I) Description of the environmental protection of the company and its major subsidiaries thatare key emission units as declared by the environmental protection authorities
√ Applicable □ Not applicable
1. Discharge information
√ Applicable □ Not applicable
During the Reporting Period, due to the adjustment of the Company's production projects,Ningbo Goneo is no longer a key emission unit of Ningbo. The relevant project and the identity ofkey emission unit has been taken over by Goneo Group Co., Ltd. as a legal entity. Except for thislegal entity, none of the other units within the Group is a key emission unit as declared by theenvironmental protection authorities.During the Reporting Period, the Company discharged in strict accordance with therequirements of the implemented pollutant discharge standards, with no environmental pollutionincidents and no penalties imposed by the environmental protection authorities. The Group-widecommissioned disposal volume was 747 tons of hazardous waste in 2023. The Company's hazardouswaste disposal is in compliance with relevant regulations and administrative plans. Theconcentration and rate of emission of each pollutant meet the concentration limits and raterequirements of the emission standards.
2. Construction and operation of pollution control facilities
√ Applicable □ Not applicable
In 2023, the Company invested a total of RMB5.9934 million in operating expenses forenvironmental protection equipment, mainly used for the addition of new environmental protectionequipment and technological transformation of environmental protection equipment.
To reduce the generation of volatile organic compounds in the painting workshop, theCompany improved the spray process raw materials, using low-volatility water-based paint insteadof oil-based paint to solve the problem of volatile organic compound generation at the source,resulting in emission concentrations far below the emission limit requirements. The Company alsoextended the use period of consumables in the dry filter section, reducing the generation of filteringwaste and lowering energy consumption during the operation of the treatment facilities.
In the Company's "zeolite rotary adsorption + RTO combustion" waste gas treatment facility,the adsorption pressure difference in the rotary adsorption section reached the adsorption limitduring the Reporting Period, increasing the consumption of natural gas for RTO. To meet emissionstandards and reduce energy consumption requirements, the Company replaced the rotary
adsorption section, resulting in a significant decrease in emission concentration compared to beforeand minimising natural gas consumption.During the Reporting Period, the Company added an activated carbon catalytic combustionwaste gas treatment facility, aimed at the collection and treatment of granulation waste emissions.The use of catalytic combustion systems can extend the service life of activated carbon and reducepollutant emission concentrations, resulting in emission concentrations far below the limitrequirements.
3. Assessment of the environmental impact of construction projects and other administrativelicenses of environmental protection
√ Applicable □ Not applicable
All the Company's construction projects have fulfilled the environmental impact evaluationand other environmental protection administrative licensing procedures in accordance with therequirements of national environmental protection laws and regulations.
4. Contingency plan for environmental emergencies
√ Applicable □ Not applicable
The Company has established an effective emergency response mechanism for environmentalemergencies, and the chemical intermediate warehouse of each base and each plant involvinghazardous waste and hazardous chemicals rehearse the contingency plan at least twice a year. Inorder to improve the corporate ability to respond to environmental pollution accidents, the Companyhas formulated the Contingency Plan of Goneo Group Co., Ltd. (File No. 330282-2022-240-L), andthe Amendments to the Contingency Plan of Goneo Group Co., Ltd. (West Zone of GuanhaiweiTown) for Environmental Emergencies (File No. 330282-2023-004-L) in accordance with relevantlegal provisions such as the requirements of the Environmental Protection Law of the People'sRepublic of China and based on the actual situation, which provide standards and guidance for theCompany’s rescue operations for environmental pollution emergencies.
5. Environmental self-monitoring plan
√ Applicable □ Not applicable
In accordance with the pollutant discharge permits and the requirements of self-monitoring ofenvironmental protection, the Company has formulated the Management System for Self-monitoring of Pollution Sources and regularly carries out self-monitoring work. In 2023, itcommissioned qualified third-party testing units to orderly carry out tests on spraying exhaust gas,noise at the factory boundary, domestic sewage, etc., and made sure that the test reports issued wereall valid.
6. Administrative penalties imposed for environmental issues during the Reporting Period
□ Applicable √ Not applicable
7. Other environmental information that should be disclosed
√ Applicable □ Not applicable
During the Reporting Period, as required by the Department of Ecological Environment ofZhejiang Province, the Company prepared and disclosed a corporate environmental informationreport in accordance with the law. Goneo Group Co., Ltd. was rated A in the environmental creditevaluation of enterprises in Zhejiang Province in 2023.
(II) Environmental protection of companies other than key emission units
√ Applicable □ Not applicable
1. Administrative penalties for environmental problems
□ Applicable √ Not applicable
2. Other environmental information disclosed with reference to key emission units
√ Applicable □ Not applicable
Except for Goneo Group Co., Ltd. as a legal entity, all other units of the Group are not keyemission units and have strictly implemented relevant laws and regulations on environmentalprotection, installed environmental protection equipment with advanced filtration technology forprocesses that generate environmental pollution in accordance with the requirements of theenvironmental credit evaluation, which passed the acceptance and met the discharge standards withemission concentrations far below the limits. All three wastes were discharged in accordance withthe standard. There was no environmental pollution accident and no punishment by theenvironmental protection authorities, and all the units were rated A in the environmental creditevaluation of enterprises in Zhejiang Province.
During the Reporting Period, Goneo Photoelectric was recognized as a Green Factory ofNingbo in 2023; Goneo Digital was recognized as a Green Factory of Ningbo in 2023; and GoneoLow Voltage is among the first batch of Ningbo 2023 positive list of enterprises for ecological andenvironmental supervision and enforcement.
3. Reasons for not disclosing other environmental information
□ Applicable √ Not applicable
(III) Efforts and results in ecological protection, pollution prevention and environmentalresponsibility performance
√ Applicable □ Not applicable
To strengthen the awareness of environmental protection among employees, the Companyorganized a photographic event at the World Environment Day on 5 June 2023. Promotional photosand videos were taken on themes such as low carbon living and green factories, and winning workswere exhibited to motivate employees.
The Company has strengthened the environmental management on the spraying lines with theinternationally advanced “zeolite rotary adsorption + RTO combustion” technologies. The
environmental protection equipment operated in an efficient manner during the Reporting Period,with the VOC removal rate reaching over 95%.
In 2023, Goneo Group constructed two distributed photovoltaic power stations on idle factoryroofs, with a total installed capacity of 7.2 MW. It is expected to generate over 8 million kwh ofelectricity annually, with over 98% for self-consumption and the surplus for grid connection.
The waste heat recovery project utilizing air compressor waste heat at Goneo Group's WestZone Base was conducted at the end of 2023.
Ningbo Goneo implemented a centralised water supply project for precision carving machinewastewater treatment and recovery, where wastewater extracted from the total water tank undergoessolid-liquid separation before being returned to the total water tank for reuse.
Meanwhile, the spraying plants have increased research into source substitution - water-basedpaints instead of oil-based paints - during the Reporting Period. The substantial investment hasproduced preliminary results. Adhering to its business philosophy of “taking the long way withprofessionalism and devotion”, the Company is committed to environmental responsibility.
(IV) Measures taken to reduce carbon emissions during the Reporting Period and their effects
| Whether any measure was taken to reduce carbon emissions | Yes |
| Emissions of CO2 equivalent reduced (unit: ton) | / |
| Type of carbon reduction measures (for example, use of clean energy in power generation, use of carbon reducing technologies in production processes, development and production of novel products that can help reduce carbon emissions, etc.) | During the Reporting Period, the Company actively enhanced the management and conservation of energy resources and took necessary measures, including vigorously increasing the proportion of clean energy use such as photovoltaic. In 2023, the actual use of solar energy was about 5,540,000 kwh, and the total installed capacity of new photovoltaic power generation projects reached 7.2 MW, which is expected to generate more than 8,000,000 kwh of electricity annually. Meanwhile, the Company strengthened the energy consumption management of equipment and the conservation management of water resources, promoted green office and issued office rules, etc. Meanwhile, the Company is vigorously developing its new energy business and has launched various products such as new energy vehicle charging plugs/points, chargers and portable products to actively contribute to the national strategy of "carbon peaking and carbon neutrality". |
Detailed description:
□ Applicable √ Not applicable
II Fulfillment of Social Responsibility(I) Indicate whether a separate social responsibility report, sustainability report or ESGreport has been disclosed.
√ Applicable □ Not applicable
For details, please refer to the 2023 Environmental, Social and Governance Report of GoneoGroup Co., Ltd. published by the Company on the website of the Shanghai Stock Exchange(www.sse.com.cn).
(II) Specific efforts in relation to social responsibility
√ Applicable □ Not applicable
| Donations and public welfare programs | Number/content | Description |
| Total spending (RMB’0,000) | 19,322.49 | |
| Of which: Funds (RMB’0,000) | 19,147.52 | |
| Worth of supplies (RMB’0,000) | 174.97 | Donation of the Company’s products |
| Number of beneficiaries | / |
Detailed description:
√ Applicable □ Not applicable
For details, please refer to the 2023 Environmental, Social and Governance Report of GoneoGroup Co., Ltd. published by the Company on the website of the Shanghai Stock Exchange(www.sse.com.cn).
III Efforts in Poverty Alleviation, Rural Revitalization, etc
√ Applicable □ Not applicable
| Poverty alleviation and rural revitalization programs | Number/content | Description |
| Total spending (RMB’0,000) | 1,000 | |
| Of which: Funds (RMB’0,000) | 1,000 | |
| Worth of supplies (RMB’0,000) | 0 | |
| Number of beneficiaries | 4,172 | Residents of Guyaopu Village, Cixi City, Zhejiang Province, China |
| Way of helping (through industrial development, employment, educational development, etc.) | Building of a beautiful village |
Detailed description:
√ Applicable □ Not applicable
For details, please refer to the 2023 Environmental, Social and Governance Report of GoneoGroup Co., Ltd. published by the Company on the website of the Shanghai Stock Exchange(www.sse.com.cn).
Part VI Significant Events
I Fulfillment of Commitments(I) Commitments of the Company's actual controller, shareholders, related parties and acquirers, as well as the Company and other entities during theReporting Period or commitments continuing to the Reporting Period
√ Applicable □ Not applicable
| Commitment background | Commitment category | Promisor | Commitment contents | Time of commitment making | Whether there is a deadline for performance | Term of commitment | Whether it is timely and strictly performed | If it is not timely performed, the specific reasons shall be stated | If it is not timely performed, the plan for the next step shall be stated |
| Commitments related to IPO | Restricted share sales | Liangji Industrial, Ninghui Investment, Suiyuan Investment | Within 36 months from the date of listing of the Company's shares, the promisor will not transfer or entrust others to manage the shares he/she directly or indirectly holds in the Company which were issued before the IPO, nor will the Company repurchase such shares. If the shares held by the promisor are reduced within two years after the expiry of the lock-up period, the price of such reduction shall not be lower than the issue price of the IPO (if the Company's shares are subject to ex-rights and ex-dividend matters such as dividend distribution, share bonus and capital reserves to share capital, the issue price will be adjusted ex-rights and ex-dividend, the same below); if the closing price of the Company's shares for 20 consecutive trading days is lower than the issue price within six months after the listing of the Company, or the closing price at the end of six months after the listing is lower than the issue price, the lock-up period for holding the Company's shares will be automatically extended for at least six months. | 6 February 2020 | Yes | Within 36 months from the date of listing of the Company's shares | Yes | Not applicable | Not applicable |
| Restricted share sales | Qiyuanbao | Within 36 months from the date of listing of the Company's shares, the promisor will not transfer or entrust others to manage the shares he/she directly | 6 February 2020 | Yes | Within 36 months from the | Yes | Not applicable | Not applicable |
| or indirectly holds in the Company which were issued before the IPO, nor will the Company repurchase such shares. | date of listing of the Company's shares | |||||||
| Restricted share sales | Ruan Liping, Ruan Xueping, Cai Yingfeng, Liu Shengsong, Zhou Zhenghua, Li Guoqiang, Zhang Lina | Within 36 months from the date of listing of the Company's shares, the promisor will not transfer or entrust others to manage the shares he/she directly or indirectly holds in the Company which were issued before the IPO, nor will the Company repurchase such shares. If the Company's shares directly or indirectly held by the promisor are reduced within two years after the expiry of the lock-up period, the price of such reduction shall not be lower than the issue price (if the Company's shares are subject to ex-rights and ex-dividend matters such as dividend distribution, share bonus and capital reserves to share capital, the issue price will be adjusted ex-rights and ex-dividend, the same below); if the closing price of the Company's shares for 20 consecutive trading days is lower than the issue price within six months after the listing of the Company, or the closing price at the end of six months after the listing is lower than the issue price, the lock-up period for holding the Company's shares will be automatically extended for at least six months. After the expiry of the above-mentioned commitment lock-up period, during my term of office as a director, supervisor or senior management personnel of the Company, if I leave the Company before the expiry of my term of office, during the term of office determined at the time of my assumption of office and within six months after the expiry of my term of office: 1) I will transfer no more than 25% of the total number of shares of the Company held directly or indirectly by me each year; 2) I will not transfer the shares of the Company held directly or indirectly by me within six months after leaving the Company; 3) (iii) I will comply with laws, administrative regulations, departmental rules and regulations, regulatory documents and other regulations for the | 6 February 2020 | Yes | Within 36 months from the date of listing of the Company's shares | Yes | Not applicable | Not applicable |
| transfer of shares by directors, supervisors and senior management personnel of the business rules of the stock exchange. | ||||||||
| Restricted share sales | Shen Huiyuan, Guan Xuejun, Li Yu | Within 36 months from the date of listing of the Company's shares, the promisor will not transfer or entrust others to manage the shares he/she directly or indirectly holds in the Company which were issued before the IPO, nor will the Company repurchase such shares. After the expiry of the above-mentioned commitment lock-up period, during my term of office as a director, supervisor or senior management personnel of the Company, if I leave the Company before the expiry of my term of office, during the term of office determined at the time of my assumption of office and within six months after the expiry of my term of office: 1) I will transfer no more than 25% of the total number of shares of the Company held directly or indirectly by me each year; 2) I will not transfer the shares of the Company held directly or indirectly by me within six months after leaving the Company; 3) (iii) I will comply with laws, administrative regulations, departmental rules and regulations, regulatory documents and other regulations for the transfer of shares by directors, supervisors and senior management personnel of the business rules of the stock exchange. | 6 February 2020 | Yes | Within 36 months from the date of listing of the Company's shares | Yes | Not applicable | Not applicable |
| Other | Goneo Group | 1. Specific conditions for initiating the stock price stabilisation measures: Within three years of the Company’s IPO and listing, if the closing price of the Company's shares is lower than the latest audited net asset value per share for 20 consecutive trading days (hereinafter referred to as the "initiation condition"), the Company shall initiate the measures for stabilizing its stock prices in line with relevant provisions. In the event of changes in the Company's net assets or the total number of shares due to matters such as capitalisation from capital reserve, distribution of stock or cash dividends, follow-on offering, share allotment and stock reverse split-up after the latest audit base day, | 6 February 2020 | Yes | Three years from the date of the Company’s IPO and listing | Yes | Not applicable | Not applicable |
| the net assets per share shall be adjusted accordingly. 2. When the initiation condition for the specific measures to stabilise stock prices is triggered, the Company shall, in accordance with laws and regulations, normative documents, and relevant plans of the Articles of Association, take one or more of the following measures to stabilise stock prices at the same time or in steps in the light of the actual situation of the Company and the stock market, and based on the principle of protecting the interests of the Company and investors: (1) The Company repurchases shares from the public; (2) Controlling shareholders, directors who receive remuneration from the Company (except independent directors) and senior managers increase their holdings of the Company's shares. | ||||||||
| Other | Liangji Industrial | In strict accordance with the Proposal on the Stabilization of Share Price within Three Years of Listing, Ningbo Liangji Industrial Co., Ltd. will fully and effectively fulfill its obligations and responsibilities under the Proposal, and strongly urge the joint stock company and the relevant parties to fully and effectively fulfill their obligations and responsibilities under the Proposal. When the General Meeting of the Company resolves on the repurchase of shares in accordance with the provisions of the Proposal, Ningbo Liangji Industrial Co., Ltd. undertakes to vote in favor of the proposal on the repurchase at the General Meeting. | 6 February 2020 | Yes | Three years from the date of the Company’s IPO and listing | Yes | Not applicable | Not applicable |
| Other | Ruan Liping, Ruan Xueping | In strict accordance with the Proposal on the Stabilization of Share Price within Three Years of Listing, I will fully and effectively fulfill its obligations and responsibilities under the Proposal, and strongly urge the company and the relevant parties to fully and effectively fulfill the obligations and responsibilities under the Proposal. When the General Meeting of the Company resolves on the repurchase of shares in accordance with the provisions of the Proposal, I undertake that I and | 6 February 2020 | Yes | Three years from the date of the Company’s IPO and listing | Yes | Not applicable | Not applicable |
| those acting in concert will vote in favor of the proposal on the repurchase at the General Meeting. | ||||||||
| Other | Senior management of the Company | In strict accordance with the Proposal on the Stabilization of Share Price within Three Years of Listing, I will fully and effectively fulfill its obligations and responsibilities under the Proposal, and strongly urge the company and the relevant parties to fully and effectively fulfill the obligations and responsibilities under the Proposal. | 6 February 2020 | Yes | Three years from the date of the Company’s IPO and listing | Yes | Not applicable | Not applicable |
| Others | Liangji Industrial, Ruan Liping, and Ruan Xueping | 1. No reduction of the Company's shares will be performed within 36 months after the Company's shares are listed. 2. The methods of shareholding reduction include but are not limited to call auction on exchanges, block trade, and negotiating transfer. 3. When reducing shareholdings, information such as the amount and method of reduction shall be notified to the Company in writing in advance, and the Company shall make an announcement in a timely manner. Shareholding reduction shall be performed after three trading days from the date of the Company's announcement. | 6 February 2020 | Yes | Three years from the date of the Company’s IPO and listing | Yes | Not applicable | Not applicable |
| Settlement of horizontal competition | Liangji Industrial | (1) The company and companies or other organizations controlled by the company are not engaged in the same or similar business as the issuer and its subsidiaries, with no horizontal competition. (2) The company and companies or other organizations controlled by the company will not engage in the same or similar business as the existing business of the issuer and its subsidiaries in any form outside China, including not investing in, acquiring or merging with companies or other economic organizations outside China that compete with the existing principal business of the issuer and its subsidiaries. (3) If the issuer and its subsidiaries engage in new business in the future, the company and companies or other organizations controlled by the company will not engage in business activities in direct competition with the new business of the issuer and its subsidiaries by share holding or participating in but having substantial control over the shares of the issuer and | 6 February 2020 | No | Not applicable | No | Not applicable | Not applicable |
| its subsidiaries within or outside China, including investing in, acquiring or merging with companies or other economic organizations within or outside China that directly compete with the new business of the issuer and its subsidiaries in the future. (4) If the company and legal entities controlled by the company have business operations in direct competition with the issuer and its subsidiaries, the issuer and its subsidiaries shall have the right to centralize the competing businesses to the operations of the issuer and its subsidiaries through preferential acquisition or entrustment. (5) The company undertakes not to use its position as a shareholder of the issuer and its subsidiaries to seek improper benefits and thereby harm the rights and interests of other shareholders of the issuer and its subsidiaries. If the rights and interests of the issuer and its subsidiaries are damaged due to a breach of the above statements and commitments by the company and companies or other organizations controlled by the company, the company agrees to be liable to the issuer and its subsidiaries for the corresponding damages. | ||||||||
| Settlement of horizontal competition | Ruan Liping, Ruan Xueping | (1) I and companies or other organizations controlled by me are not engaged in the same or similar business as the issuer and its subsidiaries, with no horizontal competition. (2) I and companies or other organizations controlled by me will not engage in the same or similar business as the existing business of the issuer and its subsidiaries in any form outside China, including not investing in, acquiring or merging with companies or other economic organizations outside China that compete with the existing principal business of the issuer and its subsidiaries. (3) If the issuer and its subsidiaries engage in new business in the future, I and companies or other organizations controlled by me will not engage in business activities in direct competition with the new business of the issuer and its subsidiaries by share holding or participating in but having | 6 February 2020 | No | Not applicable | Yes | Not applicable | Not applicable |
| substantial control over the shares of the issuer and its subsidiaries within or outside China, including investing in, acquiring or merging with companies or other economic organizations within or outside China that directly compete with the new business of the issuer and its subsidiaries in the future. (4) If I and legal entities controlled by me have business operations in direct competition with the issuer and its subsidiaries, the issuer and its subsidiaries shall have the right to centralize the competing businesses to the operations of the issuer and its subsidiaries through preferential acquisition or entrustment. (5) I undertake not to use its position as a shareholder of the issuer and its subsidiaries to seek improper benefits and thereby harm the rights and interests of other shareholders of the issuer and its subsidiaries. If the rights and interests of the issuer and its subsidiaries are damaged due to a breach of the above statements and commitments by me and companies or other organizations controlled by me, I agree to be liable to the issuer and its subsidiaries for the corresponding damages. | ||||||||
| Settlement of related-party transactions | Liangji Industrial | The company will minimize and standardize the related-party transactions with Goneo Group Co., Ltd. and its wholly-owned or controlled subsidiaries. For related-party transactions that are inevitable or occur for reasonable reasons, the company will strictly comply with the provisions of relevant laws, regulations and the Articles of Association of the company, follow the principles of equitable, remunerative and fair transactions, perform legal procedures, and determine the transaction prices in accordance with reasonable prices recognized by the market to ensure the fairness of the related-party transactions. The company will not leverage its shareholder status to induce the General Meeting or the Board of Directors of the Company to make resolutions that infringe upon the legitimate rights and interests of the Company and other shareholders. In operating decisions, the company will strictly follow the | 6 February 2020 | No | Not applicable | Yes | Not applicable | Not applicable |
| relevant provisions of the Company Law and the Articles of Association to implement the avoidance system of related shareholders to safeguard the legitimate rights and interests of all shareholders. | |||||||||
| Settlement of related-party transactions | Ruan Liping, Ruan Xueping | I will minimize and standardize the related-party transactions with Goneo Group Co., Ltd. and its wholly-owned or controlled subsidiaries. For related-party transactions that are inevitable or occur for reasonable reasons, I will strictly comply with the provisions of relevant laws, regulations and the Articles of Association of the company, follow the principles of equitable, remunerative and fair transactions, perform legal procedures, and determine the transaction prices in accordance with reasonable prices recognized by the market to ensure the fairness of the related-party transactions. I will not leverage its shareholder status to induce the General Meeting or the Board of Directors of the Company to make resolutions that infringe upon the legitimate rights and interests of the Company and other shareholders. In operating decisions, I will strictly follow the relevant provisions of the Company Law and the Articles of Association to implement the avoidance system of related shareholders to safeguard the legitimate rights and interests of all shareholders. | 6 February 2020 | No | Not applicable | Yes | Not applicable | Not applicable | |
| Commitments related to IPO | Other | All partners of Suiyuan Investment | (1) Upon dissolution of Suiyuan Investment and the direct holding of Goneo Group shares by the promisor through non-trading transfer, the promisor shall inherit all commitments made by Suiyuan Investment in the Goneo Group's Prospectus for Initial Public Offering of Shares. The commitments not yet fulfilled by Suiyuan Investment shall continue to be fulfilled by the promisor until all commitments are fulfilled; (2) Some personnel within the promisor concurrently serve as directors, supervisors, and senior management of Goneo Group, and they will continue to strictly fulfill the commitments made in the Goneo Group's Prospectus for Initial Public Offering of Shares. They will also strictly adhere to | 21 June 2023 | Yes | 27 September 2024 | Yes | Not applicable | Not applicable |
| of Goneo Group shares held by each party of the promisor at that time. 3) Premised on compliance with and fulfillment of the aforementioned b) commitment obligations, the promisor shall submit a written report to Goneo Group 20 trading days before the first sale of shares, and Goneo Group shall report the promisor's reduction plan to the exchange in accordance with regulations and make it public. (4) The promisor shall strictly adhere to other regulations regarding shareholding of the promisor as stipulated by laws, administrative regulations, departmental rules, normative documents, and Shanghai Stock Exchange business rules. (5) If any party within the promisor fails to fulfill the commitments in this commitment letter or the performance does not conform to the commitments in this commitment letter, the profits obtained by that party shall belong collectively to the promisor, and if it causes losses to other entities within the promisor or Goneo Group, it shall fully compensate all losses of other entities within the promisor and Goneo Group, and shall also bear legal and regulatory provisions regarding the promisor's shareholding. | |||||||||
| Commitments related to equity incentives | Other | Goneo Group | The Company will not provide loans and any other forms of financial assistance, including provision of guarantees for loans, to the awardees of the Restricted Share Incentive Plan for acquiring the relevant restricted shares under the Incentive Plan. | Not applicable | No | Not applicable | Yes | Not applicable | Not applicable |
| Other | Awardees of restricted share Incentive Plans | If the Company is not eligible for the grant of equity or exercise of equity arrangement due to a false record, misleading statement or material omission in the information disclosure document, the awardee shall return to the Company all the benefits received from the share Incentive Plan after the false record, misleading statement or material omission are confirmed in relevant information disclosure documents. | Not applicable | No | Not applicable | Yes | Not applicable | Not applicable |
(II) Where there had been an earnings forecast for an asset or project and the Reporting Period wasstill within the forecast period, explain why the forecast has or has not been reached for theReporting Period.
□ Forecast reached □ Forecast unreached √ Not applicable
(III) Fulfillment of performance commitments and the impact on goodwill impairment tests
□ Applicable √ Not applicable
II Occupation of the Company’s Capital by the Controlling Shareholder or Other Related Partiesfor Non-Operating Purposes during the Reporting Period
□ Applicable √ Not applicable
III Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
IV Explanation Given by the Board of Directors Regarding “Independent Auditor’s Report withModified Opinion”
□ Applicable √ Not applicable
V Reasons for Accounting Policy or Estimate Changes or Correction of Material Accounting Errorsand the Impact(I) Reasons for accounting policy or estimate changes and the impact
√ Applicable □ Not applicable
For details, see “40. Changes to critical accounting policies and estimates” under “V CriticalAccounting Policies and Estimates” of “Part X Financial Statements”.
(II) Reasons for correction of material accounting errors and the impact
□ Applicable √ Not applicable
(III) Communications with the former CPA firm
□ Applicable √ Not applicable
(IV) Approval process and other information
□ Applicable √ Not applicable
VI Appointment and Dismissal of CPA Firm
Unit: RMB’0,000
| In service | |
| Name of the domestic CPA firm | Pan-China Certified Public Accountants LLP |
| The Company’s payment to the domestic CPA firm | 288 |
| How many years the domestic CPA firm has provided audit service for the Company | 11 |
| Name of certified public accountants of the domestic CPA firm | Yao Benxia, and Chen Zhuoyan |
| How many years the certified public accountants of the domestic CPA firm have provided audit service for the Company | Yao Benxia: 1 year Chen Zhuoyan: 1 year |
Note: The audit fees of the Company for the year 2023 amounted to RMB2,880,000, of which theaudit fee for the financial statements of the Company for the year 2023 amounted to RMB2,280,000, the
internal control audit fee amounted to RMB500,000 and the raised funds authentification fee amounted toRMB100,000.
| Name | Payment | |
| CPA firm for the audit of internal control | Pan-China Certified Public Accountants LLP | 50 |
Appointment and dismissal of CPA firm:
√ Applicable □ Not applicable
As resolved by the 2022 Annual General Meeting of Shareholders, the Company decided to re-appoint Pan-China Certified Public Accountants LLP as the independent auditor for the financialstatements and internal control of 2023.
Change of the CPA firm during the audit:
□ Applicable √ Not applicable
Indicate whether the audit fee decreased over 20% (inclusive) compared with last year.
□ Applicable √ Not applicable
VII Delisting Risk(I) Reasons for the delisting risk warning
□ Applicable √ Not applicable
(II) The Company’s response
□ Applicable √ Not applicable
(III) Risk of termination of listing and the reasons
□ Applicable √ Not applicable
VIII Insolvency and Reorganization
□ Applicable √ Not applicable
IX Significant Legal Matters
□ The Company has material litigation and arbitration this year
√ The Company has no material litigation and arbitration this year
X Punishments on the Company as well as Its Directors, Supervisors, Senior Management,Controlling Shareholder and Actual Controller for Violation of Laws or Regulations, as well as theRelevant Rectifications
□ Applicable √ Not applicable
XI Credit Standings of the Company as well as Its Controlling Shareholder and Actual Controller
during the Reporting Period
□ Applicable √ Not applicable
XII Major Related-Party Transactions(I) Continuing related-party transactions
1. Already disclosed in current announcement without new progress or changes
□ Applicable √ Not applicable
2. Disclosed in current announcement but with new progress or changes
√ Applicable □ Not applicable
The Proposal on Estimated Continuing Related-Party Transactions for 2023 was approved at the 17thMeeting of the Second Board of Directors. For details, please refer to the Announcement on EstimatedContinuing Related-Party Transactions for 2023 (Announcement No. 2023-018) disclosed by theCompany on the website of the Shanghai Stock Exchange (www.sse.com.cn). For the actual execution ofthe aforesaid estimated related-party transactions, see the Announcement on Estimated ContinuingRelated-Party Transactions for 2024 (Announcement No. 2024-019).
3. Undisclosed in current announcement
□ Applicable √ Not applicable
(II) Related-party transactions regarding purchase or sale of assets or equity investments
1. Already disclosed in current announcement without new progress or changes
□ Applicable √ Not applicable
2. Disclosed in current announcement but with new progress or changes
□ Applicable √ Not applicable
3. Undisclosed in current announcement
□ Applicable √ Not applicable
4. Where a performance commitment is involved in such a related-party transaction, theperformance results for the Reporting Period shall be disclosed.
□ Applicable √ Not applicable
(III) Major related-party transactions regarding joint investments in third parties
1. Already disclosed in current announcement without new progress or changes
□ Applicable √ Not applicable
2. Disclosed in current announcement but with new progress or changes
□ Applicable √ Not applicable
3. Undisclosed in current announcement
□ Applicable √ Not applicable
(IV) Amounts due to and from related parties
1. Already disclosed in current announcement without new progress or changes
□ Applicable √ Not applicable
2. Disclosed in current announcement but with new progress or changes
□ Applicable √ Not applicable
3. Undisclosed in current announcement
□ Applicable √ Not applicable
(V) Financial transactions between the Company and related finance companies, or between financecompanies under the Company’s control and related parties
□ Applicable √ Not applicable
(VI) Other information
□ Applicable √ Not applicable
XIII Major Contracts and the Execution(I) Entrustment, Contracting and Leases
1. Entrustment
□ Applicable √ Not applicable
2. Contracting
□ Applicable √ Not applicable
3. Leases
□ Applicable √ Not applicable
(II) Guarantees
□ Applicable √ Not applicable
(III) Cash entrusted to other entities for management
1. Cash entrusted for wealth management
(1) Total cash entrusted for wealth management
√ Applicable □ Not applicable
Unit: RMB’0,000
| Type | Funding source | Amount | Undue amount | Unrecovered overdue amount |
| Bank’s financial product | Self-funded | 224,000.00 | 63,000.00 | |
| Trust company’s financial product | Self-funded | 521,700.00 | 461,700.00 | |
| Securities firm’s financial product | Self-funded | 218,000.00 | 418,000.00 | |
| Securities firm’s financial product | Raised funds | 30,000.00 | 30,000.00 | |
| Structured deposits | Raised funds | 18,000.00 | 5,000.00 |
Other information
□ Applicable √ Not applicable
(2) Single Wealth Management Entrustment
□ Applicable √ Not applicable
Other information:
□ Applicable √ Not applicable
(3) Impairment allowances for wealth management entrustment
□ Applicable √ Not applicable
2. Entrustment loans
(1) Total entrustment loans
□ Applicable √ Not applicable
Other information:
□ Applicable √ Not applicable
(2) Single entrustment loans
□ Applicable √ Not applicable
Other information:
□ Applicable √ Not applicable
(3) Impairment allowances for entrustment loans
□ Applicable √ Not applicable
3. Other information
□ Applicable √ Not applicable
(IV) Other significant contracts
□ Applicable √ Not applicable
XIV Progress Report on the Use of Raised Funds
√ Applicable □ Not applicable
(I) Overall use of raised funds
√ Applicable □ Not applicable
Unit: RMB’0,000
| Source of raised funds | Raised funds availability date | Total raised funds | Of which: amount of excessively raised funds | Net raised funds after deduction of issuance expenses | Total committed investment amount with raised funds | Adjusted total committed investment amount with raised funds (1) | Cumulative amount of raised funds invested as of the end of Reporting Period (2) | Cumulative investment progress as of the end of Reporting Period (%) (3) = (2)/(1) | Investment amount for the current year (4) | Proportion of investment amount for the current year (%) (5)=(4)/(1) | Total amount of raised funds for changed purposes |
| Initial Public Offering of Shares | 22 January 2020 | 356,700.00 | 350,320.85 | 350,320.85 | 350,320.85 | 274,301.50 | 78.30 | 69,918.32 | 19.96 | 129,996.12 |
(II) Details of raised investment projects
√ Applicable □ Not applicable
Unit: RMB’0,000
| Project name | Project nature | Involvement in change of investment direction | Source of raised funds | Raised funds availability date | Use of excessively raised funds | Total committed investment amount for project | Adjusted total investment amount with raised funds (1) | Investment amount for the current year | Cumulative amount of raised funds invested as of the end of Reporting Period (2) | Cumulative investment progress as of the end of Reporting Period (%) (3)＝(2)/(1) | Planned date for project to reach designated usable state | Whether project has been completed | Whether investment progress meets planned progress | Specific reasons for investment progress not meeting plan | Benefits achieved this year | Benefits or research results achieved by this project | Significant changes in project feasibility, if any, please explain specifically | Remaining amount |
| Base construction project for annual output of 410 million sets of | Production and construction | No | Initial Public Offering | 22 January 2020 | No | 75,452.86 | 75,452.86 | 15,305.86 | 50,972.50 | 67.56 | February 2026 | No | Yes | For the base construction project for annual output of 410 million sets of wall switches and sockets, due to the large overall | N/A | N/A | No | 13,039.84 |
| wall switches and sockets | of Shares | engineering volume of the investment project, the construction period is long, and there are many uncontrollable factors during the project construction. Therefore, the construction and filing of the investment project have been adversely affected, resulting in an overall delay in the project progress compared to the plan. | ||||||||||||||||
| Construction project for automation upgrading of annual output of 400 million sets of adaptors | Production and construction | Yes | Initial Public Offering of Shares | 22 January 2020 | No | 58,883.63 | 58,883.63 | 7,115.04 | 47,836.88 | 81.24 | November 2023 | Yes | Yes | N/A | 2,408.26 | No | 9,777.57 | |
| Construction project for a base with annual output of 180 million sets of LED lamps, and R&D centre and headquarters | Production and construction | Yes | Initial Public Offering of Shares | 22 January 2020 | No | 115,203.61 | 115,203.61 | 20,336.38 | 86,185.73 | 74.81 | February 2025 | No | No | Due to the large overall engineering volume of the investment project, the construction period is long, and there are many uncontrollable factors during the project construction. In addition, due to external objective factors such as the COVID-19 pandemic, the construction and filing of the investment project have been adversely affected, resulting in an overall delay in the project progress compared to the plan. | N/A | N/A | No | 27,062.84 |
| Information technology promotion project | Operation and management | No | Initial Public Offering of Shares | 22 January 2020 | No | 16,035.00 | 16,035.00 | 578.99 | 11,038.16 | 68.84 | February 2025 | No | No | As the Company undergoes digital transformation and upgrading, the demand for information systems is continuously increasing and adjusting. Meanwhile, due to the need for a large amount of time for system implementation stage for configuration, testing, debugging, and optimisation, the overall implementation progress of the project has been delayed. | N/A | N/A | No | 5,552.85 |
| Channel end construction and brand promotion project | Operation and management | No | Initial Public Offering of Shares | 22 January 2020 | No | 84,745.75 | 84,745.75 | 26,582.05 | 78,268.23 | 92.36 | February 2025 | No | No | Due to external objective factors such as the COVID-19 pandemic, the Company's channel terminal construction and brand promotion activities have been somewhat restricted. Meanwhile, the | N/A | N/A | No | 60.38 |
Company actively analyses andjudges market changes,dynamically adjusts the pace ofchannel construction and brandpromotion, and more prudentlyexpends raised funds, leading to aslight delay in the constructionprogress of this project comparedto the original plan.
(III) Changes in or termination of raised funds invested projects during the Reporting Period
√ Applicable □ Not applicable
Unit: RMB’0,000
| Project before | Total raised funds investment amount before change/termination | Total raised funds input before change/termination | Project after | Reason for change/termination | Raised funds used to replenishing working capital after change/termination | decision-making process and information disclosed |
| Construction project for automation upgrading of annual output of 400 million sets of adaptors | 58,883.63 | 47,836.88 | Permanently replenishing working capital | As the project became ready for use and concluded on 30 November 2023, in order to improve the efficiency of the utilisation of raised funds, the Company permanently replenished the working capital with the balance of the raised funds and interest income for the project as at 30 November 2023. | 14,792.51 | For details, see the Announcement of Goneo Group Co., Ltd. on the Conclusion of Certain Raised Funds Invested Project and Replenishing Working Capital with the Balance of the Raised Funds (Announcement No. 2023-082), which has been disclosed by the Company on the website of the Shanghai Stock Exchange (www.sse.com.cn). |
(IV) Other use of the raised funds during the Reporting Period
1. Early investment and replacement regarding the investment projects with the raised funds
□ Applicable √ Not applicable
2. Temporary replenishment of working capital with the idle raised funds
√ Applicable □ Not applicable
On 27 December 2021, the Ninth Meeting of the Second Board of Directors and the NinthMeeting of the Second Supervisory Committee of the Company approved the Proposal on theContinued Use of Part of Idle Raised Funds for Temporary Replenishment of Working Capital,agreeing that the Company would use up to RMB1.2 billion of temporarily idle raised funds toreplenish working capital under the premise that the construction of the raised funds invested projectand the use of the raised funds would not be affected. The period of use is within 12 months fromthe expiration of the authorisation of the First Meeting of the Second Board of Directors, from 6February 2022, to 5 February 2023. After the expiration, the Company will promptly return thefunds to the dedicated account for raised funds. The independent directors, the SupervisoryCommittee and the sponsor expressed their consent to the continued use of part of idle raised fundsfor temporary replenishment of working capital.On 21 December 2022, the 16th Meeting of the Second Board of Directors and the 16thMeeting of the Second Supervisory Committee of the Company approved the Proposal on the Useof Part of Idle Raised Funds for Temporary Replenishment of Working Capital, agreeing that theCompany would use RMB1 billion of temporarily idle raised funds to replenish working capital.The period of use is within 12 months from the expiration of the authorisation of the 9th Meetingof the Second Board of Directors, from 6 February 2023, to 5 February 2024. After the expiration,the Company will promptly return the funds to the dedicated account for raised funds. Theindependent directors, the Supervisory Committee and the sponsor expressed their consent to theuse of part of idle raised funds for temporary replenishment of working capital.
As of 31 December 2023, the balance of idle raised funds that had not yet been returned wasnil.
3. Use of idle raised funds for cash management and investment in relevant products
√ Applicable □ Not applicable
Unit: RMB'0,000
| Date of deliberation by the Board of Directors | Effective deliberation amount of raised funds used for cash management | Start date | End date | Cash management balance at the end of Reporting Period | Whether the highest balance exceeded the authorised amount |
| 21 December 2022 | 120,000.00 | 6 February 2023 | 5 February 2024 | 35,000.00 | No |
Other notes:
As of 3 February 2024, the Company had a cash management balance of RMB0 using raisedfunds.
4. Permanent replenishment of liquid capital or repayment of bank loans with excessively raisedfunds
□ Applicable √ Not applicable
5. Others
√ Applicable □ Not applicable
The Proposal on Extension of Certain Raised Funds Invested Project was approved at the 21stMeeting of the 2nd Board of Directors and the 21st Meeting of the 2nd Supervisory Committee heldby the Company on 20 December 2023. Based on the current progress in conducting the investmentprojects with raised funds, the Company has decided to extend the time limit for the "baseconstruction project for annual output of 410 million sets of wall switches and sockets" to meet theexpected conditions for use to February 2026, and relevant implementation entity, investmentpurpose, and investment scale remain unchanged.
The "base construction project for annual output of 410 million sets of wall switches andsockets", a raised funds invested project, aims to fulfil the demands for the rapid growth of theCompany's wall switches and sockets business by building a new manufacturing plant withautomatic and lean product lines. The construction of the main body is in progress. The Companymade the decision based on the development plan at that time, taking into account various factors,such as market conditions, the industrial development trend, and the actual situation of the Company.However, due to the large overall engineering volume of the investment project, the constructionperiod is long, and there are many uncontrollable factors during the project construction. Therefore,the construction and filing of the investment project have been adversely affected, resulting in anoverall delay in the project progress compared to the plan.XV Other Significant Events for Investors’ Judgment of Value and Investment Decision-making
□ Applicable √ Not applicable
Part VII Changes in Ordinary Shares and Information about Shareholders
I Share Changes(I) Share changes
1. Share changes
Unit: share
| Before | Increase/decrease in the current period (+/-) | After | |||||||
| Shares | Percentage (%) | New issue | Bonus issue from profit | Bonus issue from capital reserves | Other | Subtotal | Shares | Percentage (%) | |
| I Restricted shares | 526,574,506 | 87.61 | 2,189,848 | 940,800 | -526,145,938 | -523,015,290 | 3,559,216 | 0.40 | |
| 1. Shares held by the state | |||||||||
| 2. Shares held by state-owned corporations | |||||||||
| 3. Shares held by other domestic investors | 526,574,506 | 87.61 | 2,189,848 | 940,800 | -526,145,938 | -523,015,290 | 3,559,216 | 0.40 | |
| Including: Shares held by domestic corporations | 330,886,108 | 55.05 | -330,886,108 | -330,886,108 | |||||
| Shares held by domestic individuals | 195,688,398 | 32.56 | 2,189,848 | 940,800 | -195,259,830 | -192,129,182 | 3,559,216 | 0.40 | |
| 4. Shares held by overseas investors | |||||||||
| Including: Shares held by overseas corporations | |||||||||
| Shares held by overseas individuals | |||||||||
| II Unrestricted shares | 74,503,084 | 12.39 | 287,576,421 | 525,902,154 | 813,478,575 | 887,981,659 | 99.60 | ||
| 1. RMB-denominated ordinary shares | 74,503,084 | 12.39 | 287,576,421 | 525,902,154 | 813,478,575 | 887,981,659 | 99.60 | ||
| 2. Domestically listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III Total shares | 601,077,590 | 100.00 | 2,189,848 | 288,517,221 | -243,784 | 290,463,285 | 891,540,875 | 100.00 |
Description of changes in shares:
√ Applicable □ Not applicable
On 6 February 2023, a total of 524,614,506 restricted shares in the Company’s IPO wereallowed for public trading upon the expiry of the lockup period. After this change, the total sharecapital of the Company remained unchanged, and the number of restricted public shares changedfrom 526,574,506 to 1,960,000, while that of unrestricted public shares changed from 74,503,084to 599,117,590. For details, please refer to the Announcement on Certain Restricted Shares in theIPO Allowed for Public Trading (Announcement No.: 2023-007) published by the Company on thewebsite of the Shanghai Stock Exchange (www.sse.com.cn) on 31 January 2023.On 8 June 2023, the Company implemented a dividend payout. Based on the total share capitalminus the shares in the repurchased share account at the record date of the dividend payout, theCompany paid out a cash dividend of RMB33 (tax inclusive) per 10 share to its shareholders, witha bonus issue of 4.8 additional shares for every 10 shares held by shareholders from capital reserves.After this change, the total share capital of the Company changed from 601,077,590 to 889,594,811,and the number of restricted public shares changed from 1,960,000 to 2,900,800, while that ofunrestricted public shares changed from 599,117,590 to 886,694,011. For details, please refer to theAnnouncement of Goneo Group Co., Ltd. on the 2022 Final Dividend Payout (Announcement No.:
2023-033) published by the Company on the website of the Shanghai Stock Exchange(www.sse.com.cn) on 2 June 2023.
On 21 June 2023, according to the relevant provisions, the lifting of the restriction conditionsin the first lifting restriction period of the 2022 Restricted Share Incentive Plan has been achieved,and a total of 811,283 shares held by 610 awardees have met the conditions for lifting the salerestrictions. After this change, the total share capital of the Company remained unchanged, and thenumber of restricted public shares changed from 2,900,800 to 2,089,517, while that of unrestrictedpublic shares changed from 886,694,011 to 887,505,294. For details, please refer to theAnnouncement of Goneo Group Co., Ltd. on Lifting the Restriction Conditions in the First LiftingRestriction Period of the 2022 Restricted Share Incentive Plan and Trading in the Market(Announcement No.: 2023-045) published by the Company on the website of the Shanghai StockExchange (www.sse.com.cn) on 16 June 2023.
On 29 June 2023, a total of 2,189,848 restricted shares were granted to 750 awardees under the2023 Restricted Share Incentive Plan. After this change, the total share capital of the Companychanged from 889,594,811 to 891,784,659, and the number of restricted public shares changed from2,089,517 to 4,279,365, while that of unrestricted public shares remained unchanged. For details,please refer to the Announcement of Goneo Group Co., Ltd. on the Grant Results of the 2023Restricted Share Incentive Plan (Announcement No.: 2023-049) published by the Company on thewebsite of the Shanghai Stock Exchange (www.sse.com.cn) on 1 July 2023.
On 6 July 2023, according to the relevant provisions, the lifting of the restriction conditions inthe third lifting restriction period of the 2020 Restricted Share Incentive Plan has been achieved,and a total of 217,599 shares held by 353 awardees have met the conditions for lifting the salerestrictions. After this change, the total share capital of the Company remained unchanged, and thenumber of restricted public shares changed from 4,279,365 to 4,061,766, while that of unrestrictedpublic shares changed from 887,505,294 to 887,722,893. For details, please refer to theAnnouncement of Goneo Group Co., Ltd. on Lifting the Restriction Conditions in the Third LiftingRestriction Period of the 2020 Restricted Share Incentive Plan and Trading in the Market(Announcement No.: 2023-050) published by the Company on the website of the Shanghai StockExchange (www.sse.com.cn) on 1 July 2023.
On 17 July 2023, according to the relevant provisions, the lifting of the restriction conditionsin the second lifting restriction period of the 2021 Restricted Share Incentive Plan has been achieved,and a total of 258,766 shares held by 455 awardees have met the conditions for lifting the salerestrictions. After this change, the total share capital of the Company remained unchanged, and thenumber of restricted public shares changed from 4,061,766 to 3,803,000, while that of unrestrictedpublic shares changed from 887,722,893 to 887,981,659. For details, please refer to theAnnouncement of Goneo Group Co., Ltd. on Lifting the Restriction Conditions in the SecondLifting Restriction Period of the 2021 Restricted Share Incentive Plan and Trading in the Market(Announcement No.: 2023-054) published by the Company on the website of the Shanghai StockExchange (www.sse.com.cn) on 12 July 2023.
On 4 September 2023, as 18 awardees of the 2020 Restricted Share Incentive Plan, 2021Restricted Share Incentive Plan and 2022 Restricted Share Incentive Plan have left the Company,the Company repurchased and cancelled 69,810 restricted shares held by them, which had been
granted but not lifted from restricted sales. After that, the total share capital of the Company changedfrom 891,784,659 to 891,714,849, and the number of restricted public shares changed from3,803,000 to 3,733,190, while that of unrestricted public shares remained unchanged. For details,please refer to the Announcement of Goneo Group on the Implementation of the Repurchase andCancellation of Some Restricted Incentive Shares (Announcement No.: 2023-063) published by theCompany on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 31 August 2023.On 22 December 2023, as 35 awardees of the 2020 Restricted Share Incentive Plan, 2021Restricted Share Incentive Plan, 2022 Restricted Share Incentive Plan and 2023 Restricted ShareIncentive Plan have left the Company, the Company repurchased and cancelled 173,974 restrictedshares held by them, which had been granted but not lifted from restricted sales. After that, the totalshare capital of the Company changed from 891,714,849 to 891,540,875, and the number ofrestricted public shares changed from 3,733,190 to 3,559,216, while that of unrestricted publicshares remained unchanged. For details, please refer to the Announcement of Goneo Group on theImplementation of the Repurchase and Cancellation of Some Restricted Incentive Shares(Announcement No.: 2023-076) published by the Company on the website of the Shanghai StockExchange (www.sse.com.cn) on 20 December 2023.
2. Impact of share changes on financial indicators such as earnings per share and net assetvalue per share for the most recent year and the most recent period (if any)
□ Applicable √ Not applicable
3. Other information necessary to be disclosed or required to be disclosed
□ Applicable √ Not applicable
(II) Change of restricted shares
√ Applicable □ Not applicable
Unit: Share
| Name of shareholder | Opening restricted shares | Number of shares lifted from restrictions during the year | Number of new restricted shares during the year | Shares repurchased and retired | Closing restricted shares | Reasons for restricted sales | Date of unlocking |
| Ningbo Liangji Industrial Co., Ltd. | 324,000,000 | 324,000,000 | 0 | Restricted shares in the IPO | 6 February 2023 | ||
| Ruan Liping | 96,864,199 | 96,864,199 | 0 | Restricted shares in the IPO | 6 February 2023 | ||
| Ruan Xueping | 96,864,199 | 96,864,199 | 0 | Restricted shares in the IPO | 6 February 2023 | ||
| Ningbo Ninghui Investment Management Partnership (Limited Partnership) | 4,072,954 | 4,072,954 | 0 | Restricted shares in the IPO | 6 February 2023 | ||
| Ningbo Suiyuan Investment Management Partnership (Limited Partnership) | 1,787,442 | 1,787,442 | 0 | Restricted shares in the IPO | 6 February 2023 | ||
| Ningbo Qiyuanbao Investment Management Partnership (Limited Partnership) | 1,025,712 | 1,025,712 | 0 | Restricted shares in the IPO | 6 February 2023 | ||
| Awardees of the 2020 Equity Incentive Plan | 135,800 | 217,599 | 85,750 | 3,951 | 0 | Conditions for unlocking the equity incentives are met | 6 July 2023 |
| Awardees of the 2021 Equity Incentive Plan | 374,800 | 258,766 | 159,336 | 24,285 | 251,085 | Conditions for unlocking the equity incentives are unmet | 17 July 2023 |
| Awardees of | 1,449,400 | 811,283 | 695,714 | 163,008 | 1,170,823 | Condition | 21 June |
| the 2022 Equity Incentive Plan | s for unlocking the equity incentives are unmet | 2023 | |||||
| Awardees of the 2023 Equity Incentive Plan | 0 | 0 | 2,189,848 | 52,540 | 2,137,308 | Conditions for unlocking the equity incentives are unmet | In lockup |
| Total | 526,574,506 | 525,902,154 | 3,130,648 | 243,784 | 3,559,216 | / | / |
II Issuance and Listing of Securities(I) Securities issued during the Reporting Period
□ Applicable √ Not applicable
Description of securities issued during the Reporting Period (for bonds with different interest ratesover the lifetime, please specify separately):
□ Applicable √ Not applicable
(II) Changes in Total Shares and Shareholder Structure, as well as in Asset and LiabilityStructures
√ Applicable □ Not applicable
For changes in the shareholder structure, see “(I) Share changes” under “I Share Changes” of“Part VII Share in Ordinary Shares and Information about Shareholders”.
For changes in asset and liabilities structures, see “(III) Analysis of assets and liabilities” under“V Business Overview for the Reporting Period” of “Part III Management Discussion and Analysis”.
(III) Existing staff-held shares
□ Applicable √ Not applicable
III Shareholders and Actual Controller(I) Total number of shareholders
| Number of ordinary shareholders at the period-end | 21,589 |
| Number of ordinary shareholders at the month-end prior to the disclosure of this Report | 20,249 |
| Number of preference shareholders with resumed voting rights at the period-end | Not applicable |
| Number of preference shareholders with resumed voting rights at the month-end prior to the disclosure of this Report | Not applicable |
(II) Top 10 shareholders and public shareholders (or unrestricted shareholders) at the period-end
Unit: share
| Top 10 shareholders (exclusive of shares lent in refinancing) | |||||||
| Full name of shareholder | Shareholding increase/decrease in the Reporting Period | Closing shareholding | Shareholding percentage (%) | Restricted shares held | Shares in pledge, marked or frozen | Nature of shareholder | |
| Status | Shares | ||||||
| Ningbo Liangji Industrial Co., Ltd. | 155,520,000 | 479,520,000 | 53.79 | N/A | Domestic non-state-owned corporation | ||
| Ruan Liping | 46,829,455 | 143,693,654 | 16.12 | N/A | Domestic individual | ||
| Ruan Xueping | 29,037,559 | 125,901,758 | 14.12 | N/A | Domestic individual | ||
| Hong Kong Securities Clearing Company Limited | 9,863,848 | 18,784,149 | 2.11 | N/A | Other | ||
| China Merchants Bank Co., Ltd.－Xingquan Herun Mixed Securities Investment Fund | 3,452,551 | 7,402,066 | 0.83 | N/A | Other | ||
| Ningbo Ninghui Investment Management Partnership (Limited Partnership) | 1,955,018 | 6,027,972 | 0.68 | N/A | Other | ||
| China Merchants | 1,900,192 | 4,500,807 | 0.50 | N/A | Other | ||
| Bank Co., Ltd.－Xingquan Heyi Dynamic Asset Allocation Mixed Securities Investment Fund (LOF) | |||||||
| National Social Security Fund—Portfolio 114 | 1,248,772 | 2,391,208 | 0.27 | N/A | Other | ||
| China Everbright Bank Company Limited－Xingquan Business Model Selected Mixed Securities Investment Fund (LOF) | 458,132 | 2,277,982 | 0.26 | N/A | Other | ||
| Industrial Bank Co., Ltd.－Xingquan New View Dynamic Asset Allocation Regularly Open-ended Mixed Initiated Securities Investment Fund | 368,217 | 2,246,323 | 0.25 | N/A | Other |
| Top 10 unrestricted shareholders | |||
| Name of shareholder | Unrestricted public shares held | Type and number of shares | |
| Class | Shares | ||
| Ningbo Liangji Industrial Co., Ltd. | 479,520,000 | RMB-denominated ordinary stock | 479,520,000 |
| Ruan Liping | 143,693,654 | RMB-denominated ordinary stock | 143,693,654 |
| Ruan Xueping | 125,901,758 | RMB-denominated ordinary stock | 125,901,758 |
| Hong Kong Securities Clearing Company Limited | 18,784,149 | RMB-denominated ordinary stock | 18,784,149 |
| China Merchants Bank Co., Ltd.－Xingquan Herun Mixed Securities Investment Fund | 7,402,066 | RMB-denominated ordinary stock | 7,402,066 |
| Ningbo Ninghui Investment Management Partnership (Limited Partnership) | 6,027,972 | RMB-denominated ordinary stock | 6,027,972 |
| China Merchants Bank Co., Ltd.－Xingquan Heyi Dynamic Asset Allocation Mixed Securities Investment Fund (LOF) | 4,500,807 | RMB-denominated ordinary stock | 4,500,807 |
| National Social Security Fund—Portfolio 114 | 2,391,208 | RMB-denominated ordinary stock | 2,391,208 |
| China Everbright Bank Company Limited Co., Ltd.－Xingquan Business Model Selected Mixed Securities Investment Fund (LOF) | 2,277,982 | RMB-denominated ordinary stock | 2,277,982 |
| Industrial Bank Co., Ltd.－Xingquan New View Dynamic Asset Allocation Regularly Open-ended Mixed Initiated Securities Investment Fund | 2,246,323 | RMB-denominated ordinary stock | 2,246,323 |
| Share repurchase account among the top 10 shareholders | Not applicable | ||
| Shareholders above entrusting/entrusted with or waiving voting rights | Not applicable | ||
| Related or acting-in-concert parties among shareholders above | Ruan Liping and Ruan Xueping are brothers and acting-in-concert parties. They jointly control Ningbo Liangji Industrial Co., Ltd., the Company’s controlling shareholder. Ningbo Meishan Bonded Port Area Shuo Jin Investment Management Co., Ltd., under the joint control of Ruan Liping and Ruan Xueping, is an executive partner of Ningbo Ninghui Investment Management Partnership | ||
| (Limited Partnership), one of the Company’s shareholders. Save as disclosed above, the Company is not aware of any other related parties or acting-in-concert parties as defined in the Administration Methods for Acquisition of Listed Companies among the shareholders above. | |
| Preference shareholders with resumed voting rights and their shareholdings | Not applicable |
Top 10 shareholders involved in refinancing shares lending:
□ Applicable √ Not applicable
Changes in top 10 shareholders compared with the prior period:
□ Applicable √ Not applicable
Shareholdings of the top 10 restricted shareholders and the restrictions:
√ Applicable □ Not applicable
Unit: share
| No. | Name of restricted shareholder | Restricted shares held | Restricted shares allowed for public trading | Restriction | |
| Date when public trading is allowed | Increase in restricted shares allowed for public trading | ||||
| 1 | Xie Weiwei | 64,884 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan | |
| 2 | Jiang Jinbiao | 47,744 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan | |
| 3 | Liu Jiancheng | 27,498 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan | |
| 4 | Wang Qingwang | 27,277 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan | |
| 5 | Zhou Zhenghua | 26,196 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan | |
| 6 | Cui Jie | 25,574 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan | |
| 7 | Zhou Peifeng | 24,420 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan |
| 8 | Zhu Fuxian | 23,309 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan | |
| 9 | Zhao Kefeng | 23,296 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan | |
| 10 | Lu Maomao | 23,148 | To be unlocked when the conditions for the equity incentives are met | In the lockup period according to the equity Incentive Plan | |
| Related or acting-in-concert parties among shareholders above | No | ||||
(III) Indicate whether any strategic investor or general corporation has become a top-10shareholder in a rights issue.
□ Applicable √ Not applicable
IV Controlling Shareholder and Actual Controller(I) Controlling shareholder
1. Corporation
√ Applicable □ Not applicable
| Name | Ningbo Liangji Industrial Co., Ltd. |
| Legal representative/company principal | Ruan Liping |
| Date of establishment | 23 November 2011 |
| Principal activities | Investment management |
| Interests held in other domestically and overseas listed companies in the Reporting Period | Not applicable |
| Other information | Not applicable |
2. Individual
□ Applicable √ Not applicable
3. Special statement regarding the fact that the Company does not have a controllingshareholder
□ Applicable √ Not applicable
4. Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
5. Illustration of the controlling shareholder’s ownership in the Company
√ Applicable □ Not applicable
(II) Actual controller
1. Corporation
□ Applicable √ Not applicable
2. Individual
√ Applicable □ Not applicable
| Name | Ruan Liping |
| Nationality | Chinese |
| Residency in other countries or regions (yes/no) | Yes |
| Main occupations and positions | Chairman of the Board and President of Goneo Group Co., Ltd. |
| Controlling interests in other domestically and overseas listed | Not applicable |
Ningbo Liangji Industrial Co., Ltd.
Ningbo Liangji Industrial Co., Ltd.Goneo Group Co., Ltd.
Goneo Group Co., Ltd.
53.79%
| companies in the past 10 years | |
| Name | Ruan Xueping |
| Nationality | Chinese |
| Residency in other countries or regions (yes/no) | Yes |
| Main occupations and positions | Vice Chairman of the Board of Goneo Group Co., Ltd. and General Manager of Shanghai Goneo Electrics Co., Ltd. |
| Controlling interests in other domestically and overseas listed companies in the past 10 years | Not applicable |
3. Special statement regarding the fact that the Company does not have an actual controller.
□ Applicable √ Not applicable
4. Change of the actual controller in the Reporting Period
□ Applicable √ Not applicable
5. Illustration of the actual controller’s ownership in the Company
√ Applicable □ Not applicable
6. Indicate whether the actual controller controls the Company via trust or other ways of assetmanagement.
□ Applicable √ Not applicable
(III) Other information about the controlling shareholder and the actual controller
□ Applicable √ Not applicable
V Indicate whether the cumulative number of shares put in pledge by the Company’scontrolling shareholder or the largest shareholder and its acting-in-concert parties accountsfor over 80% of their shareholdings in the Company.
□ Applicable √ Not applicable
VI Other 10% or Greater Corporate Shareholders
□ Applicable √ Not applicable
VII Restrictions on Shareholding Reduction
□ Applicable √ Not applicable
VIII Share Repurchases during the Reporting Period
□ Applicable √ Not applicable
Part VIII Relevant Information of Preference Shares
□ Applicable √ Not applicable
Part IX Relevant Information of Corporate BondsI Enterprise Bonds, Corporate Bonds and Debt Financing Instruments of Non-financial Enterprise
□ Applicable √ Not applicable
II Convertible Corporate Bonds
□ Applicable √ Not applicable
Part X Financial StatementsI Independent Auditor’s Report
√ Applicable □ Not applicable
Independent Auditor’s ReportPCCPA Audit [2024] No. 4005
To the shareholders of Goneo Group Co., Ltd.:
I OpinionWe have audited the financial statements of Goneo Group Co., Ltd. (“Goneo” or the “Company”),which comprise the consolidated and parent company (the Company as the parent exclusive of subsidiaries)balance sheets as at 31 December 2023, the consolidated and parent company statements of income, cashflows and changes in owners’ equity for the year then ended, as well as the notes to the financial statements.In our opinion, the financial statements referred to above present fairly, in all material respects, theconsolidated and parent company financial position of the Company at 31 December 2023, and theconsolidated and parent company operating results and cash flows for the year then ended, in conformitywith the Chinese Accounting Standards (CAS).II Basis for OpinionWe conducted our audits in accordance with the Audit Standards for Chinese Registered Accountants.Our responsibilities under those standards are further described in the Auditor’s Responsibilities for Auditof Financial Statements section of our report. We are independent of the Company in accordance with theChina Code of Ethics for Certified Public Accountants, and we have fulfilled our other ethicalresponsibilities in accordance with the said Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
III Key Audit MattersKey audit matters are matters that, based on our professional judgment, are deemed most importantto the audit of the financial statements of the current period. These matters were addressed in the contextof our audit of the financial statements as a whole, and in forming our opinion thereon, and we do notprovide a separate opinion on these matters.
(I) Revenue recognition
1. Description
For relevant information disclosed, please refer to the Notes to the Financial Statements: III (XXII),V (II) 1, and XV (I).The revenue of Goneo Group is mainly derived from electric connection, smart electrical lightingand new energy products. In 2023, Goneo Group achieved operating revenue of RMB15.695 billion.Goneo Group has identified different specific methods of revenue recognition for different sales methods.As operating revenue is one of the key performance indicators of Goneo Group, there may be aninherent risk that Goneo Group's management (hereinafter referred to as the “management”) will achieve
specific objectives or expectations through inappropriate revenue recognition. Therefore, we haveidentified revenue recognition as a key audit matter.
2. Audit response
The audit procedures we performed in relation to revenue recognition primarily include:
(1) Understanding the key internal controls relating to revenue recognition, evaluating the design ofthose controls, determining whether they are implemented and testing the effectiveness of the operationof the relevant internal controls;
(2) Examining major sales contracts for major contractual terms and evaluating whether the revenuerecognition policy is in line with the provisions of the Accounting Standard for Business Enterprises;
(3) Implementing substantive analysis procedures for operating revenue and gross margin on amonthly, product and customer basis to identify any significant or abnormal fluctuations and analyze thecauses of fluctuations;
(4) For domestic sales revenue, conducting sample-check on supporting documents related to revenuerecognition, including sales contracts, orders, sales invoices, outbound delivery orders, delivery notes,transportation orders and customer sign-off sheets; for export revenue, obtaining information from theAdministration of Foreign Exchange and reconciling it with the carrying records, and checking supportingdocuments such as sales contracts, export customs declarations, freight bills of lading and sales invoiceson a sample basis;
(5) Confirming with key customers on a sample basis regarding sales for the period based on theaccounts receivable letter;
(6) Verifying operating revenue recognized around the balance sheet date on a sample basis tosupporting documents such as outbound delivery orders, delivery notes, customer sign-off sheets andfreight bills of lading, and evaluating whether operating revenue is recognized in the appropriate period;
(7) Checking whether the information relating to operating revenue is properly presented in thefinancial statements.
(II) Recognition, measurement and presentation of wealth management products
1. Description
For relevant information disclosed, please refer to the Notes to the Financial Statements: III (X), V(I) 2, V (I) 10, V (II) 8, and X.
As at 31 December 2023, the wealth management balance of held-for-trading financial assets ofGoneo Group was RMB9,727 million, the wealth management balance of other current assets was RMB50million, and the cumulative return on investment for wealth management products in 2023 amounted toRMB191 million. We determined the recognition, measurement and presentation of wealth managementproducts as a key audit matter due to the large amount of wealth management products and the fact thatthe return on investment of the relevant products had a significant impact on the net profit of Goneo Groupfor 2023.
2. Audit response
The audit procedures we performed in relation to the recognition, measurement and presentation ofwealth management products primarily include:
(1) Understanding the key internal controls relating to investments in wealth management products,evaluating the design of those controls, determining whether they are implemented and testing theeffectiveness of the operation of the relevant internal controls;
(2) Checking whether the classification of wealth management products is correct based on thecontractual cash flow characteristics of the wealth management products and the business model of GoneoGroup in managing the wealth management products;
(3) Obtaining statements of account related to wealth management products, reconciling them withthe carrying amount and writing to banks, securities companies and trust companies to confirm the assetbalance and the existence of balances of wealth management products;
(4) Checking the supporting documents for increase and reduction in wealth management productsduring the period on a sample basis, checking whether they have been authorized and approved, andconfirming that the amounts relating to the purchase, sale and return on investment of wealth managementproducts are correct and fully recorded;
(5) Reviewing the valuation method of wealth management products to check whether the basis forobtaining their fair value, the measurement of their value at the end of the period and the accountingtreatment are correct;
(6) Checking whether information related to the recognition, measurement and presentation of wealthmanagement products has been properly presented in the financial statements.
IV Other Information
The Company’s management is responsible for the other information. The other informationcomprises all of the information included in the Company’s 2021 Annual Report other than the financialstatements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not expressany form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.
V Responsibilities of Management and Those Charged with Governance for FinancialStatements
The Company’s management is responsible for the preparation of the financial statements that givea fair view in accordance with CAS, and for designing, implementing and maintaining such internalcontrol as the management determines is necessary to enable the preparation of financial statements thatare free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’sability to continue as a going concern, disclosing, as applicable, matters related to going concern (ifapplicable) and using the going concern basis of accounting unless the management either intends toliquidate the Company or to cease operations, or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company’s financial reportingprocess.VI Auditor’s Responsibilities for Audit of Financial StatementsOur objectives are to obtain reasonable assurance about whether the financial statements as a wholeare free from material misstatement, whether due to fraud or error, and to issue an auditor’s report thatincludes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an auditconducted in accordance with CAS will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,they could reasonably be expected to influence the economic decisions of users taken on the basis of thesefinancial statements.As part of an audit in accordance with CAS, we exercise professional judgment and maintainprofessional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accountingestimates and related disclosures made by the management.
(IV) Conclude on the appropriateness of the management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the Company’s ability to continue as a goingconcern. If we conclude that a material uncertainty exists, we are required by CAS to draw users’ attentionin our auditor’s report to the related disclosures in the financial statements or, if such disclosures areinadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However, future events or conditions may cause the Company to cease tocontinue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whetherthe financial statements represent the underlying transactions and events in a manner that achieves fairpresentation.
(VI) Obtain sufficient appropriate audit evidence regarding the financial information of the entitiesor business activities within the Company to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the Company audit. We remain solelyresponsible for our audit opinion.We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any noteworthy deficiencies ininternal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence, and communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, relatedsafeguards.From the matters communicated with those charged with governance, we determine those mattersthat were of most significance in the audit of the financial statements of the current period and are thereforethe key audit matters. We describe these matters in our auditor’s report unless law or regulation precludespublic disclosure about the matter or when, in extremely rare circumstances, we determine that a mattershould not be communicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Pan-China Certified Public Accountants LLP Chinese certified public accountant: Yao Benxia(engagement partner)
Hangzhou·China Chinese certified public accountant: Chen Zhuoyan
25 April 2024
II Financial Statements
Consolidated Balance Sheet31 December 2023Prepared by Goneo Group Co., Ltd.
Unit: RMB
| Item | Note | 31 December 2023 | 31 December 2022 |
| Current assets： | |||
| Monetary assets | 4,743,714,425.66 | 4,611,966,169.54 | |
| Settlement reserve | |||
| Loans to other banks and financial institutions | |||
| Held-for-trading financial assets | 9,727,000,000.00 | 6,949,000,000.00 | |
| Derivative financial assets | 8,263,755.00 | 643,100.00 | |
| Notes receivable | |||
| Accounts receivable | 264,754,433.75 | 226,808,699.19 | |
| Receivables financing | 5,359,014.96 | 1,036,801.70 | |
| Prepayments | 56,229,933.95 | 49,635,694.61 | |
| Premiums receivable | |||
| Reinsurance receivables | |||
| Receivable reinsurance contract reserve | |||
| Other receivables | 11,433,179.13 | 71,887,692.32 | |
| Of which: Interest receivable | |||
| Dividends receivable | |||
| Financial assets purchased under resale agreements | |||
| Inventories | 1,421,078,059.44 | 1,285,218,456.09 | |
| Contract assets | |||
| Assets held for sale | |||
| Current portion of non-current assets | |||
| Other current assets | 109,982,385.06 | 363,825,426.89 | |
| Total current assets | 16,347,815,186.95 | 13,560,022,040.34 | |
| Non-current assets： | |||
| Loans and advances to customers | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | |||
| Other equity investments | |||
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 1,986,168,945.03 | 1,854,494,510.57 | |
| Construction in progress | 806,585,458.56 | 611,457,850.54 | |
| Productive living assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 18,802,451.89 | 13,312,707.57 | |
| Intangible assets | 334,817,972.71 | 325,725,286.18 | |
| Development costs | |||
| Goodwill | 45,133,442.04 | ||
| Long-term prepaid expense | 22,765,692.24 | 20,364,230.78 | |
| Deferred income tax assets | 185,493,645.53 | 144,902,751.27 | |
| Other non-current assets | 59,756,372.02 | 76,508,015.77 | |
| Total non-current assets | 3,414,390,537.98 | 3,091,898,794.72 | |
| Total assets | 19,762,205,724.93 | 16,651,920,835.06 | |
| Current liabilities： | |||
| Short-term borrowings | 588,344,176.01 | 845,374,749.03 | |
| Borrowings from the central bank | |||
| Loans from other banks and financial institutions | |||
| Held-for-trading financial liabilities | 18,200,000.00 | ||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 2,056,657,805.40 | 1,643,661,963.53 | |
| Advances from customers | |||
| Contract liabilities | 528,493,231.61 | 431,654,611.71 | |
| Financial assets sold under repurchase agreements | |||
| Customer deposits and deposits from other banks and financial institutions | |||
| Payables for acting trading of securities | |||
| Payables for underwriting of securities | |||
| Employee benefits payable | 404,816,287.63 | 335,092,159.01 | |
| Taxes and levies payable | 311,190,845.43 | 300,308,365.64 | |
| Other payables | 705,060,906.64 | 446,413,870.85 | |
| Of which: Interest payable | |||
| Dividends payable | |||
| Fees and commissions payable | |||
| Reinsurance payables | |||
| Liabilities directly associated with assets held for sale | |||
| Current portion of non-current liabilities | 406,959,339.77 | 8,798,658.13 | |
| Other current liabilities | 68,532,796.91 | 56,140,971.75 | |
| Total current liabilities | 5,070,055,389.40 | 4,085,645,349.65 | |
| Non-current liabilities： | |||
| Insurance contract reserve | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Of which: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | 4,743,227.39 | 4,544,619.22 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | 68,417,470.86 | 53,820,328.00 | |
| Deferred income tax liabilities | 72,166,350.39 | 57,821,992.37 | |
| Other non-current liabilities | 86,411,741.16 | 34,814,148.70 | |
| Total non-current liabilities | 231,738,789.80 | 151,001,088.29 | |
| Total liabilities | 5,301,794,179.20 | 4,236,646,437.94 | |
| Owners’ equity (or shareholders’ equity)： | |||
| Paid-in capital (or share capital) | 891,540,875.00 | 601,077,590.00 | |
| Other equity instruments | |||
| Of which: Preference shares | |||
| Perpetual bonds | |||
| Capital reserves | 3,760,751,549.12 | 3,863,547,883.54 | |
| Less: Treasury shares | 165,893,723.38 | 129,612,354.00 | |
| Other comprehensive income | 13,570,498.15 | 4,389,526.95 | |
| Specific reserve | |||
| Surplus reserves | 562,217,890.93 | 302,797,998.73 | |
| General reserve | |||
| Retained earnings | 9,383,734,874.02 | 7,756,575,284.95 | |
| Total equity attributable to owners (or shareholders) of the Company as the parent | 14,445,921,963.84 | 12,398,775,930.17 | |
| Non-controlling interests | 14,489,581.89 | 16,498,466.95 | |
| Total owners’ equity (or shareholders’ equity) | 14,460,411,545.73 | 12,415,274,397.12 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 19,762,205,724.93 | 16,651,920,835.06 |
Legal representative: Ruan Liping Chief Financial Officer: Liu ShengsongHead of the financial department: Shen Kewei
Balance Sheet of the Company as the Parent
31 December 2023Prepared by Goneo Group Co., Ltd.
Unit: RMB
| Item | Note | 31 December 2023 | 31 December 2022 |
| Current assets： | |||
| Monetary assets | 2,043,009,633.46 | 2,558,169,565.15 | |
| Held-for-trading financial assets | 4,930,000,000.00 | 3,000,000,000.00 | |
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | 279,744,567.07 | 341,413,356.20 | |
| Receivables financing | 2,996,611.56 | ||
| Prepayments | 80,438,282.35 | 60,568,126.16 | |
| Other receivables | 1,933,070,108.44 | 2,756,026,303.85 | |
| Of which: Interest receivable | |||
| Dividends receivable | 1,100,000,000.00 | 1,700,000,000.00 | |
| Inventories | 351,411,922.28 | 292,728,441.34 | |
| Contract assets | |||
| Assets held for sale | |||
| Current portion of non-current assets | |||
| Other current assets | 50,265,479.45 | 253,744,657.54 | |
| Total current assets | 9,670,936,604.61 | 9,262,650,450.24 | |
| Non-current assets： | |||
| Debt investments | |||
| Other debt investments | |||
| Long-term receivables | |||
| Long-term equity investments | 742,389,522.46 | 688,178,210.52 | |
| Other equity investments | |||
| Other non-current financial assets | |||
| Investment property | |||
| Fixed assets | 964,809,501.44 | 812,047,460.58 | |
| Construction in progress | 585,682,503.17 | 517,776,172.33 | |
| Productive living assets | |||
| Oil and gas assets | |||
| Right-of-use assets | 3,090,067.64 | 2,707,156.94 | |
| Intangible assets | 228,710,136.82 | 244,677,232.50 | |
| Development costs | |||
| Goodwill | |||
| Long-term prepaid expense | 21,863,048.81 | 19,172,452.61 | |
| Deferred income tax assets | 9,403,769.99 | 8,221,067.37 | |
| Other non-current assets | 31,728,444.17 | 58,509,382.81 | |
| Total non-current assets | 2,587,676,994.50 | 2,351,289,135.66 | |
| Total assets | 12,258,613,599.11 | 11,613,939,585.90 | |
| Current liabilities： | |||
| Short-term borrowings | 233,206,211.94 | 611,169,986.13 | |
| Held-for-trading financial liabilities | 18,200,000.00 | ||
| Derivative financial liabilities | |||
| Notes payable | |||
| Accounts payable | 803,088,395.25 | 596,911,385.90 | |
| Advances from customers | |||
| Contract liabilities | 223,654,473.24 | 550,246,157.68 | |
| Employee benefits payable | 134,932,917.12 | 108,720,042.83 | |
| Taxes and levies payable | 77,900,289.24 | 70,631,710.25 | |
| Other payables | 154,649,519.47 | 196,246,589.96 | |
| Of which: Interest payable | |||
| Dividends payable | |||
| Liabilities directly associated with assets held for sale | |||
| Current portion of non-current liabilities | 385,433,228.70 | 1,660,616.21 | |
| Other current liabilities | 29,075,081.52 | 71,532,000.50 | |
| Total current liabilities | 2,041,940,116.48 | 2,225,318,489.46 | |
| Non-current liabilities： | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Of which: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | 981,494.50 | 1,074,013.26 | |
| Long-term payables | |||
| Long-term employee benefits payable | |||
| Provisions | |||
| Deferred income | 14,597,142.86 | ||
| Deferred income tax liabilities | 25,671,672.66 | 25,750,110.98 | |
| Other non-current liabilities | 86,411,741.16 | 34,814,148.70 | |
| Total non-current liabilities | 127,662,051.18 | 61,638,272.94 | |
| Total liabilities | 2,169,602,167.66 | 2,286,956,762.40 | |
| Owners’ equity (or shareholders’ equity)： | |||
| Paid-in capital (or share capital) | 891,540,875.00 | 601,077,590.00 | |
| Other equity instruments | |||
| Of which: Preference shares | |||
| Perpetual bonds | |||
| Capital reserves | 3,756,252,125.46 | 3,859,048,459.88 | |
| Less: Treasury shares | 165,893,723.38 | 129,612,354.00 | |
| Other comprehensive income | |||
| Specific reserve | |||
| Surplus reserves | 562,217,890.93 | 302,797,998.73 | |
| Retained earnings | 5,044,894,263.44 | 4,693,671,128.89 | |
| Total owners’ equity (or shareholders’ equity) | 10,089,011,431.45 | 9,326,982,823.50 | |
| Total liabilities and owners’ equity (or shareholders’ equity) | 12,258,613,599.11 | 11,613,939,585.90 | |
Legal representative: Ruan Liping Chief Financial Officer: Liu ShengsongHead of the financial department: Shen Kewei
Consolidated Income StatementJanuary-December 2023
Unit: RMB
| Item | Note | 2023 | 2022 |
| I Total revenues | 15,694,755,606.24 | 14,081,373,030.94 | |
| Of which: Operating revenue | 15,694,755,606.24 | 14,081,373,030.94 | |
| Interest income | |||
| Insurance premium income | |||
| Fee and commission income | |||
| II Total costs and expenses | 11,308,534,454.64 | 10,627,127,457.42 | |
| Of which: Cost of sales | 8,914,184,532.27 | 8,730,082,585.08 | |
| Interest expense | |||
| Fee and commission expense | |||
| Surrenders | |||
| Net insurance claims paid | |||
| Net amount provided as insurance contract reserve | |||
| Expenditure on policy dividends | |||
| Reinsurance premium expense | |||
| Taxes and levies | 132,796,168.29 | 115,758,059.90 | |
| Selling expense | 1,070,438,160.60 | 800,387,659.41 | |
| Administrative expense | 626,198,552.51 | 500,596,373.88 | |
| R&D expense | 673,427,386.61 | 588,296,080.11 | |
| Finance costs | -108,510,345.64 | -107,993,300.96 | |
| Of which: Interest expense | 28,282,578.99 | 35,925,352.09 |
| Interest income | 136,526,600.97 | 137,795,215.87 | |
| Add: Other income | 253,389,151.69 | 132,940,722.76 | |
| Return on investment (“－” for loss) | 198,690,784.99 | 271,988,811.92 | |
| Of which: Share of profit or loss of joint ventures and associates | |||
| Income from the derecognition of financial assets at amortized cost | |||
| Exchange gain (“－” for loss) | |||
| Net gain on exposure hedges (“－” for loss) | |||
| Gain on changes in fair value (“－” for loss) | 18,200,000.00 | ||
| Credit impairment loss (“－” for loss) | -61,075,301.86 | -30,470,523.21 | |
| Asset impairment loss (“－” for loss) | -62,644,874.13 | -11,504,455.94 | |
| Asset disposal income (“－” for loss) | -5,484,474.02 | -3,139,686.69 | |
| III Operating profit (“－” for loss) | 4,727,296,438.27 | 3,814,060,442.36 | |
| Add: Non-operating income | 2,773,882.97 | 3,784,363.32 | |
| Less: Non-operating expense | 193,735,368.88 | 63,388,662.51 | |
| IV Gross profit (“－” for gross loss) | 4,536,334,952.36 | 3,754,456,143.17 | |
| Less: Income tax expense | 672,008,460.95 | 568,905,187.60 | |
| V Net profit (“－” for net loss) | 3,864,326,491.41 | 3,185,550,955.57 | |
| (I) By operating continuity | |||
| 1.Net profit from continuing operations (“－” for net loss) | 3,864,326,491.41 | 3,185,550,955.57 | |
| 2.Net profit from discontinued operations (“－” for net loss) | |||
| (II) By ownership | |||
| 1.Net profit attributable to owners of the Company as the parent (“－” for net loss) | 3,870,135,376.47 | 3,188,709,584.89 | |
| 2.Net profit attributable to non-controlling interests (“－” for net loss) | -5,808,885.06 | -3,158,629.32 | |
| VI Other comprehensive income, net of tax | 9,180,971.20 | -3,147,863.42 | |
| (I) Other comprehensive income, net of tax attributable to owners of the Company as the parent | 9,180,971.20 | -3,147,863.42 | |
| 1．Other comprehensive income that will not be reclassified to profit or loss | |||
| （1）Changes caused by remeasurements on defined benefit schemes | |||
| （2）Other comprehensive income that will not be reclassified to profit or loss under the equity method | |||
| （3）Changes in the fair value of other equity investments | |||
| （4）Changes in the fair value arising from changes in own credit risk | |||
| 2．Other comprehensive income that will be reclassified to profit or loss | 9,180,971.20 | -3,147,863.42 | |
| （1）Other comprehensive income that will be reclassified to profit or loss under the equity method | |||
| （2）Changes in the fair value of other debt investments | |||
| （3）Other comprehensive income arising from the reclassification of financial assets | |||
| （4）Credit impairment allowance for other debt investments | |||
| （5）Reserve for cash flow hedges | 9,871,936.10 | -3,182,910.54 | |
| （6）Differences arising from the translation of foreign currency-denominated financial statements | -690,964.90 | 35,047.12 | |
| （7）Others | |||
| (II) Other comprehensive income, net of tax attributable to non-controlling interests | |||
| VII Total comprehensive income | 3,873,507,462.61 | 3,182,403,092.15 | |
| (I) Total comprehensive income attributable to owners of the Company as the parent | 3,879,316,347.67 | 3,185,561,721.47 | |
| (II) Total comprehensive income attributable to non-controlling interests | -5,808,885.06 | -3,158,629.32 | |
| VIII Earnings per share： | |||
| (I) Basic earnings per share (RMB/share) | 4.36 | 3.59 | |
| (II) Diluted earnings per share (RMB/share) | 4.36 | 3.59 | |
Where business combinations involving entities under common control occurred in the current period, thenet profit achieved by the acquirees before the combinations was nil, with the amount for last year beingnil.
Legal representative: Ruan Liping Chief Financial Officer: Liu ShengsongHead of the financial department: Shen Kewei
Income Statement of the Company as the Parent
January-December 2023
Unit: RMB
| Item | Note | 2023 | 2022 |
| I Operating revenue | 6,046,213,479.23 | 5,527,593,701.30 |
| Less: Cost of sales | 4,207,217,252.60 | 4,279,629,067.01 | |
| Taxes and levies | 37,871,317.79 | 29,964,139.67 | |
| Selling expense | 58,217,696.55 | 24,152,009.03 | |
| Administrative expense | 303,182,739.78 | 257,770,302.62 | |
| R&D expense | 255,939,611.18 | 243,157,154.27 | |
| Finance costs | -47,250,144.67 | -41,364,078.62 | |
| Of which: Interest expense | 16,635,447.25 | 24,239,236.11 | |
| Interest income | 64,458,205.14 | 66,036,418.38 | |
| Add: Other income | 72,658,749.79 | 18,055,681.70 | |
| Return on investment (“－” for loss) | 1,557,162,295.01 | 1,811,912,481.21 | |
| Of which: Share of profit or loss of joint ventures and associates | |||
| Income from the derecognition of financial assets at amortized cost | |||
| Net gain on exposure hedges (“－” for loss) | |||
| Gain on changes in fair value (“－” for loss) | 18,200,000.00 | ||
| Credit impairment loss (“－” for loss) | 45,336,291.05 | -54,867,900.40 | |
| Asset impairment loss (“－” for loss) | -65,852,432.40 | -1,215,659.46 | |
| Asset disposal income (“－” for loss) | -433,490.70 | -1,475,418.41 | |
| II Operating profit (“－” for loss) | 2,858,106,418.75 | 2,506,694,291.96 | |
| Add: Non-operating income | 2,221,989.66 | 2,547,612.90 | |
| Less: Non-operating expense | 107,961,306.02 | 10,152,903.02 | |
| III Gross profit (“－” for gross loss) | 2,752,367,102.39 | 2,499,089,001.84 | |
| Less Income tax expense | 158,168,180.44 | 89,614,702.68 | |
| IV Net profit (“－” for net loss) | 2,594,198,921.95 | 2,409,474,299.16 | |
| (I) Net profit from continuing operations (“－” for net loss) | 2,594,198,921.95 | 2,409,474,299.16 | |
| (II) Net profit from discontinued operations (“－” for net loss) | |||
| V Other comprehensive income, net of tax | |||
| (I) Other comprehensive income that will not be reclassified to profit or loss | |||
| 1. Changes caused by remeasurements on defined benefit schemes | |||
| 2. Other comprehensive income that will not be reclassified to profit or loss under the equity method | |||
| 3. Changes in the fair value of other equity investments | |||
| 4. Changes in the fair value arising from changes in own credit risk |
| (II) Other comprehensive income that will be reclassified to profit or loss | |||
| 1. Other comprehensive income that will be reclassified to profit or loss under the equity method | |||
| 2. Changes in the fair value of other debt investments | |||
| 3. Other comprehensive income arising from the reclassification of financial assets | |||
| 4. Credit impairment allowance for other debt investments | |||
| 5. Reserve for cash flow hedges | |||
| 6. Differences arising from the translation of foreign currency-denominated financial statements | |||
| 7. Others | |||
| VI Total comprehensive income | 2,594,198,921.95 | 2,409,474,299.16 | |
| VII Earnings per share： | |||
| (I) Basic earnings per share (RMB/share) | |||
| (II) Diluted earnings per share (RMB/share) | |||
Legal representative: Ruan Liping Chief Financial Officer: Liu ShengsongHead of the financial department: Shen Kewei
Consolidated Cash Flow StatementJanuary-December 2023
Unit: RMB
| Item | Note | 2023 | 2022 |
| I Cash flows from operating activities: | |||
| Proceeds from sale of goods and rendering of services | 17,836,040,227.21 | 15,641,388,293.29 | |
| Net increase in customer deposits and deposits from other banks and financial institutions | |||
| Net increase in borrowings from the central bank | |||
| Net increase in loans from other financial institutions | |||
| Premiums received on original insurance contracts | |||
| Net proceeds from reinsurance | |||
| Net increase in deposits and investments of policy holders | |||
| Interest, fees and commissions received | |||
| Net increase in loans from other banks and financial institutions | |||
| Net increase in proceeds from repurchase transactions | |||
| Net proceeds from acting trading of securities | |||
| Tax and levy rebates | 15,375,947.44 | 25,583,045.08 | |
| Cash generated from other operating activities | 484,470,792.10 | 370,035,518.43 | |
| Subtotal of cash generated from operating activities | 18,335,886,966.75 | 16,037,006,856.80 | |
| Payments for goods and services | 8,552,858,075.92 | 8,181,607,639.34 | |
| Net increase in loans and advances to customers | |||
| Net increase in deposits in the central bank and other banks and financial institutions | |||
| Payments for claims on original insurance contracts | |||
| Net increase in loans to other banks and financial institutions | |||
| Interest, fees and commissions paid | |||
| Policy dividends paid | |||
| Cash paid to and for employees | 2,078,209,390.40 | 1,902,469,445.47 | |
| Taxes and levies paid | 1,674,790,028.26 | 1,783,549,323.16 | |
| Cash used in other operating activities | 1,202,747,373.62 | 1,111,466,230.67 | |
| Subtotal of cash used in operating activities | 13,508,604,868.20 | 12,979,092,638.64 | |
| Net cash generated from/used in operating activities | 4,827,282,098.55 | 3,057,914,218.16 | |
| II Cash flows from investing activities: | |||
| Proceeds from disinvestment | |||
| Return on investment | 194,153,746.50 | 290,169,702.87 | |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-term assets | 2,648,921.84 | 3,462,880.79 | |
| Net proceeds from the disposal of subsidiaries and other business units | |||
| Cash generated from other investing activities | 9,076,568,830.88 | 9,613,715,309.31 | |
| Subtotal of cash generated from investing activities | 9,273,371,499.22 | 9,907,347,892.97 | |
| Payments for the acquisition and construction of fixed assets, intangible assets and other long-term assets | 655,201,996.12 | 1,018,824,058.36 | |
| Payments for investments | |||
| Net increase in pledged loans granted | |||
| Net payments for the acquisition of subsidiaries and other business units | 19,107,492.09 | ||
| Cash used in other investing activities | 12,052,553,025.00 | 10,615,500,000.00 | |
| Subtotal of cash used in investing activities | 12,707,755,021.12 | 11,653,431,550.45 | |
| Net cash generated from/used in investing activities | -3,434,383,521.90 | -1,746,083,657.48 | |
| III Cash flows from financing activities: | |||
| Capital contributions received | 110,993,059.60 | 94,703,508.00 | |
| Of which: Capital contributions by non-controlling interests to subsidiaries | 3,800,000.00 | ||
| Borrowings received | 1,448,972,102.34 | 1,685,000,000.00 | |
| Cash generated from other financing activities | |||
| Subtotal of cash generated from financing activities | 1,559,965,161.94 | 1,779,703,508.00 | |
| Repayment of borrowings | 1,312,000,000.00 | 2,010,000,000.00 | |
| Interest and dividends paid | 2,011,974,345.06 | 1,478,511,496.88 | |
| Of which: Dividends paid by subsidiaries to non-controlling interests | |||
| Cash used in other financing activities | 223,036,997.15 | 236,647,700.66 | |
| Subtotal of cash used in financing activities | 3,547,011,342.21 | 3,725,159,197.54 | |
| Net cash generated from/used in financing activities | -1,987,046,180.27 | -1,945,455,689.54 | |
| IV Effect of foreign exchange rate changes on cash and cash equivalents | 990,633.94 | 6,251,850.30 | |
| V Net increase in cash and cash equivalents | -593,156,969.68 | -627,373,278.56 | |
| Add: Cash and cash equivalents, beginning of the period | 1,925,343,174.98 | 2,552,716,453.54 | |
| VI Cash and cash equivalents, end of the period | 1,332,186,205.30 | 1,925,343,174.98 | |
Legal representative: Ruan Liping Chief Financial Officer: Liu ShengsongHead of the financial department: Shen Kewei
Cash Flow Statement of the Company as the Parent
January-December 2023
Unit: RMB
| Item | Note | 2023 | 2022 |
| I Cash flows from operating activities: | |||
| Proceeds from sale of goods and rendering of services | 6,599,093,565.42 | 6,407,458,800.74 | |
| Tax and levy rebates | |||
| Cash generated from other operating activities | 923,317,676.31 | 843,447,820.27 | |
| Subtotal of cash generated from operating activities | 7,522,411,241.73 | 7,250,906,621.01 | |
| Payments for goods and services | 4,234,884,701.23 | 3,994,662,575.62 | |
| Cash paid to and for employees | 664,312,737.79 | 632,474,762.15 | |
| Taxes and levies paid | 405,537,370.59 | 433,295,397.95 | |
| Cash used in other operating activities | 921,810,410.79 | 1,409,134,256.52 | |
| Subtotal of cash used in operating activities | 6,226,545,220.40 | 6,469,566,992.24 | |
| Net cash generated from/used in operating activities | 1,295,866,021.33 | 781,339,628.77 | |
| II Cash flows from investing activities: | |||
| Proceeds from disinvestment | |||
| Return on investment | 2,160,641,473.10 | 2,118,439,604.49 | |
| Net proceeds from the disposal of fixed assets, intangible assets and other long-term assets | 13,316,532.29 | 5,068,195.56 | |
| Net proceeds from the disposal of subsidiaries and other business units | |||
| Cash generated from other investing activities | 4,559,069,155.00 | 3,920,000,000.00 | |
| Subtotal of cash generated from investing activities | 6,733,027,160.39 | 6,043,507,800.05 | |
| Payments for the acquisition and construction of fixed assets, intangible assets and other long-term assets | 343,212,736.25 | 450,775,042.68 | |
| Payments for investments | 57,449,318.78 | 148,409,344.00 | |
| Net payments for the acquisition of subsidiaries and other business units | |||
| Cash used in other investing activities | 6,150,000,000.00 | 5,120,000,000.00 | |
| Subtotal of cash used in investing activities | 6,550,662,055.03 | 5,719,184,386.68 | |
| Net cash generated from/used in investing activities | 182,365,105.36 | 324,323,413.37 | |
| III Cash flows from financing activities: | |||
| Capital contributions received | 107,193,059.60 | 94,703,508.00 | |
| Borrowings received | 800,972,102.34 | 1,010,000,000.00 | |
| Cash generated from other financing activities | |||
| Subtotal of cash generated from financing activities | 908,165,161.94 | 1,104,703,508.00 | |
| Repayment of borrowings | 795,000,000.00 | 1,060,000,000.00 | |
| Interest and dividends paid | 2,000,859,649.52 | 1,466,589,386.88 | |
| Cash used in other financing activities | 13,237,196.67 | 225,449,579.56 | |
| Subtotal of cash used in financing activities | 2,809,096,846.19 | 2,752,038,966.44 | |
| Net cash generated from/used in financing activities | -1,900,931,684.25 | -1,647,335,458.44 | |
| IV Effect of foreign exchange rate changes on cash and cash equivalents | |||
| V Net increase in cash and cash equivalents | -422,700,557.56 | -541,672,416.30 | |
| Add: Cash and cash equivalents, beginning of the period | 1,187,537,825.42 | 1,729,210,241.72 | |
| VI Cash and cash equivalents, end of the period | 764,837,267.86 | 1,187,537,825.42 |
Legal representative: Ruan Liping Chief Financial Officer: Liu ShengsongHead of the financial department: Shen Kewei
Consolidated Statements of Changes in Owners’ Equity
January-December 2023
Unit: RMB
| Item | 2023 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I Balance as at the end of the prior year | 601,077,590.00 | 3,863,547,883.54 | 129,612,354.00 | 4,389,526.95 | 302,797,998.73 | 7,756,575,284.95 | 12,398,775,930.17 | 16,498,466.95 | 12,415,274,397.12 | ||||||
| Add: Adjustments for changes in accounting policies | |||||||||||||||
| Adjustments for correction of previous errors | |||||||||||||||
| Other adjustments | |||||||||||||||
| II Balance as at the beginning of the year | 601,077,590.00 | 3,863,547,883.54 | 129,612,354.00 | 4,389,526.95 | 302,797,998.73 | 7,756,575,284.95 | 12,398,775,930.17 | 16,498,466.95 | 12,415,274,397.12 | ||||||
| III Increase/decrease in the period (“-” for decrease) | 290,463,285.00 | -102,796,334.42 | 36,281,369.38 | 9,180,971.20 | 259,419,892.20 | 1,627,159,589.07 | 2,047,146,033.67 | -2,008,885.06 | 2,045,137,148.61 | ||||||
| (I) Total comprehensive income | 9,180,971.20 | 3,870,135,376.47 | 3,879,316,347.67 | -5,808,885.06 | 3,873,507,462.61 | ||||||||||
| (II) Capital increased and reduced by owners | 1,946,064.00 | 185,720,886.58 | 36,281,369.38 | 151,385,581.20 | 3,800,000.00 | 155,185,581.20 | |||||||||
| 1. Ordinary shares increased by owners | 1,946,064.00 | 94,557,385.41 | 96,503,449.41 | 3,800,000.00 | 100,303,449.41 | ||||||||||
| 2. Capital increased by other equity holders | |||||||||||||||
| 3. Share-based payments recognized in owners’ equity | 91,163,501.17 | 36,281,369.38 | 54,882,131.79 | 54,882,131.79 | |||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | 259,419,892.20 | -2,242,975,787.40 | -1,983,555,895.20 | -1,983,555,895.20 | |||||||||||
| 1. Appropriation to surplus reserves | 259,419,892.20 | -259,419,892.20 | |||||||||||||
| 2. Appropriation to general reserve | |||||||||||||||
| 3. Appropriation to owners (or shareholders) | -1,983,555,895.20 | -1,983,555,895.20 | -1,983,555,895.20 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfers within owners’ equity | 288,517,221.00 | -288,517,221.00 | |||||||||||||
| 1. Increase in capital (or share capital) from capital reserves | 288,517,221.00 | -288,517,221.00 | |||||||||||||
| 2. Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3. Surplus reserves used to offset loss | |||||||||||||||
| 4. Changes in defined benefit schemes |
| transferred to retained earnings | |||||||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Specific reserve | |||||||||||||||
| 1. Increase in the period | |||||||||||||||
| 2. Used in the period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV Balance as at the end of the period | 891,540,875.00 | 3,760,751,549.12 | 165,893,723.38 | 13,570,498.15 | 562,217,890.93 | 9,383,734,874.02 | 14,445,921,963.84 | 14,489,581.89 | 14,460,411,545.73 |
| Item | 2022 | ||||||||||||||
| Equity attributable to owners of the Company as the parent | Non-controlling interests | Total owners’ equity | |||||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | General reserve | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I Balance as at the end of the prior year | 601,180,520.00 | 3,914,068,288.56 | 80,711,540.00 | 7,537,390.37 | 302,797,998.73 | 6,010,878,918.97 | 10,755,751,576.63 | 10,755,751,576.63 | |||||||
| Add: Adjustments for changes in accounting policies | -179,970.91 | -179,970.91 | -179,970.91 | ||||||||||||
| Adjustments for correction | |||||||||||||||
| of previous errors | |||||||||||||||
| Other adjustments | |||||||||||||||
| II Balance as at the beginning of the year | 601,180,520.00 | 3,914,068,288.56 | 80,711,540.00 | 7,537,390.37 | 302,797,998.73 | 6,010,698,948.06 | 10,755,571,605.72 | 10,755,571,605.72 | |||||||
| III Increase/decrease in the period (“-” for decrease) | -102,930.00 | -50,520,405.02 | 48,900,814.00 | -3,147,863.42 | 1,745,876,336.89 | 1,643,204,324.45 | 16,498,466.95 | 1,659,702,791.40 | |||||||
| (I) Total comprehensive income | -3,147,863.42 | 3,188,709,584.89 | 3,185,561,721.47 | -3,158,629.32 | 3,182,403,092.15 | ||||||||||
| (II) Capital increased and reduced by owners | -102,930.00 | -50,520,405.02 | 48,900,814.00 | -99,524,149.02 | 19,657,096.27 | -79,867,052.75 | |||||||||
| 1. Ordinary shares increased by owners | -102,930.00 | -127,989,881.86 | 215,286,334.56 | -343,379,146.42 | -343,379,146.42 | ||||||||||
| 2. Capital increased by other equity holders | |||||||||||||||
| 3. Share-based payments recognized in owners’ equity | 77,469,476.84 | -166,385,520.56 | 243,854,997.40 | 243,854,997.40 | |||||||||||
| 4. Others | 19,657,096.27 | 19,657,096.27 | |||||||||||||
| (III) Profit distribution | -1,442,833,248.00 | -1,442,833,248.00 | -1,442,833,248.00 |
| 1. Appropriation to surplus reserves | |||||||||||||||
| 2. Appropriation to general reserve | |||||||||||||||
| 3. Appropriation to owners (or shareholders) | -1,442,833,248.00 | -1,442,833,248.00 | -1,442,833,248.00 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Transfers within owners’ equity | |||||||||||||||
| 1. Increase in capital (or share capital) from capital reserves | |||||||||||||||
| 2. Increase in capital (or share capital) from surplus reserves | |||||||||||||||
| 3. Surplus reserves used to offset loss | |||||||||||||||
| 4. Changes in defined benefit |
| schemes transferred to retained earnings | |||||||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Specific reserve | |||||||||||||||
| 1. Increase in the period | |||||||||||||||
| 2. Used in the period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV Balance as at the end of the period | 601,077,590.00 | 3,863,547,883.54 | 129,612,354.00 | 4,389,526.95 | 302,797,998.73 | 7,756,575,284.95 | 12,398,775,930.17 | 16,498,466.95 | 12,415,274,397.12 |
Legal representative: Ruan Liping Chief Financial Officer: Liu Shengsong Head of the financial department: Shen Kewei
Statements of Changes in Owners’ Equity of the Company as the Parent
January-December 2023
Unit: RMB
| Item | 2023 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Total owners’ equity | |||
| Preference shares | Perpetual bonds | Others | |||||||||
| I Balance as at the end of the prior year | 601,077,590.00 | 3,859,048,459.88 | 129,612,354.00 | 302,797,998.73 | 4,693,671,128.89 | 9,326,982,823.50 | |||||
| Add: Adjustments for changes in accounting policies | |||||||||||
| Adjustments for correction of previous errors | |||||||||||
| Other adjustments | |||||||||||
| II Balance as at the beginning of the year | 601,077,590.00 | 3,859,048,459.88 | 129,612,354.00 | 302,797,998.73 | 4,693,671,128.89 | 9,326,982,823.50 | |||||
| III Increase/ decrease in the period (“-” for decrease) | 290,463,285.00 | -102,796,334.42 | 36,281,369.38 | 259,419,892.20 | 351,223,134.55 | 762,028,607.95 | |||||
| (I) Total comprehensive income | 2,594,198,921.95 | 2,594,198,921.95 | |||||||||
| (II) Capital increased and reduced by owners | 1,946,064.00 | 185,720,886.58 | 36,281,369.38 | 151,385,581.20 | |||||||
| 1. Ordinary shares increased by owners | 1,946,064.00 | 94,557,386.41 | 96,503,450.41 | ||||||||
| 2. Capital increased by other equity holders | |||||||||||
| 3. Share-based payments recognized in owners’ equity | 35,125,846.90 | 36,281,369.38 | -1,155,522.48 | ||||||||
| 4. Others | 56,037,653.27 | 56,037,653.27 | |||||||||
| (III) Profit distribution | 259,419,892.20 | -2,242,975,787.40 | -1,983,555,895.20 | ||||||||
| 1. Appropriation to surplus reserves | 259,419,892.20 | - 259,419,892.20 | |||||||||
| 2. Appropriation to owners (or shareholders) | -1,983,555,895.20 | -1,983,555,895.20 | |||||||||
| 3. Others | |||||||||||
| (IV) Transfers within owners’ equity | 288,517,221.00 | -288,517,221.00 | |||||||||
| 1. Increase in capital (or share capital) from capital reserves | 288,517,221.00 | -288,517,221.00 | |||||||||
| 2. Increase in capital (or share capital) from surplus reserves | |||||||||||
| 3. Surplus reserves used to offset loss |
| 4. Changes in defined benefit schemes transferred to retained earnings | |||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Specific reserve | |||||||||||
| 1. Increase in the period | |||||||||||
| 2. Used in the period | |||||||||||
| (VI) Others | |||||||||||
| IV Balance as at the end of the period | 891,540,875.00 | 3,756,252,125.46 | 165,893,723.38 | 562,217,890.93 | 5,044,894,263.44 | 10,089,011,431.45 |
| Item | 2022 | ||||||||||
| Paid-in capital (or share capital) | Other equity instruments | Capital reserves | Less: Treasury shares | Other comprehensive income | Specific reserve | Surplus reserves | Retained earnings | Total owners’ equity | |||
| Preference shares | Perpetual bonds | Others | |||||||||
| I Balance as at the end of the prior year | 601,180,520.00 | 3,909,568,864.90 | 80,711,540.00 | 302,797,998.73 | 3,726,954,923.09 | 8,459,790,766.72 | |||||
| Add: Adjustments for changes in accounting policies | 75,154.64 | 75,154.64 | |||||||||
| Adjustments for correction of previous errors | |||||||||||
| Other adjustments | |||||||||||
| II Balance as at the beginning of the year | 601,180,520.00 | 3,909,568,864.90 | 80,711,540.00 | 302,797,998.73 | 3,727,030,077.73 | 8,459,865,921.36 | |||||
| III Increase/ decrease in the period (“-” for decrease) | -102,930.00 | -50,520,405.02 | 48,900,814.00 | 966,641,051.16 | 867,116,902.14 | ||||||
| (I) Total comprehensive income | 2,409,474,299.16 | 2,409,474,299.16 | |||||||||
| (II) Capital increased and reduced by owners | -102,930.00 | -50,520,405.02 | 48,900,814.00 | -99,524,149.02 | |||||||
| 1. Ordinary shares increased by owners | -102,930.00 | -127,989,881.86 | 215,286,334.56 | -343,379,146.42 | |||||||
| 2. Capital increased by other equity holders | |||||||||||
| 3. Share-based payments recognized in owners’ equity | 28,594,844.11 | -166,385,520.56 | 194,980,364.67 | ||||||||
| 4. Others | 48,874,632.73 | 48,874,632.73 | |||||||||
| (III) Profit distribution | -1,442,833,248.00 | -1,442,833,248.00 | |||||||||
| 1. Appropriation to surplus reserves | |||||||||||
| 2. Appropriation to owners (or shareholders) | -1,442,833,248.00 | -1,442,833,248.00 | |||||||||
| 3. Others | |||||||||||
| (IV) Transfers within owners’ equity | |||||||||||
| 1. Increase in capital (or share capital) from capital reserves | |||||||||||
| 2. Increase in capital (or share capital) from surplus reserves | |||||||||||
| 3. Surplus reserves used to offset loss | |||||||||||
| 4. Changes in defined benefit schemes transferred to retained earnings | |||||||||||
| 5. Other comprehensive income transferred to retained earnings | |||||||||||
| 6. Others | |||||||||||
| (V) Specific reserve | |||||||||||
| 1. Increase in the period | |||||||||||
| 2. Used in the period | |||||||||||
| (VI) Others | |||||||||||
| IV Balance as at the end of the period | 601,077,590.00 | 3,859,048,459.88 | 129,612,354.00 | 302,797,998.73 | 4,693,671,128.89 | 9,326,982,823.50 |
Legal representative: Ruan Liping Chief Financial Officer: Liu Shengsong Head of the financial department: Shen Kewei
III Company Profile
1. Company overview
√ Applicable □ Not applicable
Goneo Group Co., Ltd (hereinafter referred to as “the Company” or “Goneo”) is a joint stock limitedcompany transformed from the former Goneo Group Limited with 31 August 2017 as the base date. It wasregistered with Ningbo Municipal Market Supervision Administration on 27 December 2017 and isheadquartered in Ningbo City, Zhejiang Province. The Company now holds a business license with aunified social credit code of 91330282671205242Y, with a registered capital of RMB891.5409 millionand a total of 891.5409 million shares (each with a par value of RMB1). Among them, there are 3.5592million restricted public A-shares and 887.9817 million unrestricted public A-shares. The Company’sshares were listed for public trading on the Shanghai Stock Exchange on 6 February 2020.The Company pertains to the electrical machinery and equipment manufacturing industry. It is mainlyengaged in the research, development, production and sales of power connection and power extensionproducts such as adaptors, wall switches and sockets, LED lighting and digital accessories. Productsmainly include adaptors, wall switches and sockets, LED lighting and digital accessories.These financial statements have been authorized for issue by the Second Meeting of the Third Boardof Directors of the Company on 25 April 2024.
For the sake of conciseness, the subsidiaries and other related companies of the Company arehereinafter referred to by their abbreviations as follows:
| Full name | Abbreviation |
| Subsidiaries | |
| Ningbo Goneo Electrics Co., Ltd. | Ningbo Goneo |
| Ningbo Goneo Photoelectric Technology Co., Ltd. | Goneo Photoelectric |
| Ningbo Goneo Digital Technology Co., Ltd. | Goneo Digital |
| Ningbo Goneo Precision Manufacturing Co., Ltd. | Goneo Precision |
| Ningbo Banmen Electric Appliance Co., Ltd. | Banmen Electric Appliance |
| Cixi Goneo Electrics Co., Ltd. | Cixi Goneo |
| Shanghai Goneo Electrics Co., Ltd. | Shanghai Goneo |
| Goneo International Trading (HK) Limited | Goneo HK |
| Ningbo Goneo Supply Chain Management Co., Ltd. | Goneo Management |
| Ningbo Goneo International Trading Co., Ltd. | Goneo International Trading |
| Ningbo Goneo Electric Sales Co., Ltd. | Electric Sales |
| Ningbo Xingluo Trading Co., Ltd. | Xingluo Trading |
| Ningbo Goneo Low Voltage Electric Co., Ltd. | Goneo Low Voltage Electric |
| Ningbo Goneo Domestic Electrical Appliance Co., Ltd. | Domestic Electrical Appliance |
| Hainan Dacheng Supply Chain Management Co., Ltd. | Hainan Dacheng |
| Ningbo Goneo Intelligent Technology Co., Ltd. | Intelligent Technology |
| Dalitek Intelligent Technology (Shanghai) Inc. | Dalitek |
| Shanghai Goneo Information Technology Co., Ltd. | Information Technology |
| Ningbo Goneo Tool Technology Co., Ltd. | Goneo Tool |
| Ningbo Goneo New Energy Technology Co., Ltd. | Goneo New Energy |
| Shenzhen Goneo Intelligent Information Co., Ltd. | Shenzhen Intelligent |
| Guangdong Murora Intelligent Lighting Co., Ltd. | Murora Intelligent |
| Ningbo Goneo Marketing Co., Ltd. | Goneo Marketing |
| Ningbo Qiquanyang Trading Co., Ltd. | Qiquanyang Trading |
| PT Goneo Electronic Indonesia | Goneo Indonesia |
| GONEO New Energy Europe GmbH | Goneo Germany |
| Goneo International Trading (SG) Pte. Ltd. | Goneo Singapore |
| Other related parties | |
| Ningbo Liangji Industrial Co., Ltd. | Liangji Industrial |
| Hangzhou Liangniu Hardware and Electrical Co., Ltd. | Liangniu Hardware |
| Hangzhou Hangniu Hardware and Electrical Co., Ltd. | Hangniu Hardware |
| Hangzhou Feiniu Hardware and Electrical Co., Ltd. | Feiniu Hardware |
| Yichang Yaoyang Trading Co., Ltd. | Yaoyang Trading |
| Hubei Huantian Technology Co., Ltd. | Huantian Trading |
| Cixi Libo Electric Co., Ltd. | Cixi Libo |
| Suzhou Niuweiwang Trading Co., Ltd. | Niuweiwang Trading |
| Beijing Chenhao Electronic Technology Co., Ltd. | Chenhao Electronic |
| Changde Jianke Trading Co., Ltd. | Jianke Trading |
| Shanghai Minshen Property Co., Ltd. | Minshen Property |
| Hebei Qiudi Trading Co., Ltd. | Qiudi Trading |
| Changde Guoxin Trading Co., Ltd. | Guoxin Trading |
| Cixi Shenghui Electronics Co., Ltd. | Shenghui Electronics |
| Ningbo Goneo Property Co., Ltd. | Goneo Property |
| Kunshan Gaoshu Decoration Co., Ltd. | Kunshan Gaoshu |
| Shanghai Jiangcheng Industrial Co., Ltd. | Jiangcheng Industrial |
IV Preparation Basis of Financial Statement
1. Basis of preparation
The financial statements of the Company are based on continuing operations.
2. Continuing operations
√ Applicable □ Not applicable
The Company does not undergo any event or situation which may cause great concern aboutsustainable operation ability within 12 months since the end of the reporting period.
V Significant Accounting Policies and Accounting EstimatesSpecific accounting policies and accounting estimation hint:
□ Applicable √ Not applicable
1. Statement on Compliance with Accounting Standards for Business Enterprises
The Company’s Financial Statements are prepared in accordance with Accounting Standards forBusiness Enterprises, and indicate relevant information about the Company's financial status, businessresults and cash flow truly and completely.
2. Accounting period
The fiscal year of the Company is from January 1 to December 31 of every calendar year.
3. Operating cycle
√ Applicable □ Not applicable
The operating cycle of the Company is short, and 12 months is taken as the liquidity criterion forassets and liabilities.
4. Standard currency for accounting
The standard currency for accounting is RMB.
5. Method and Basis of Selection of Materiality Standards
√ Applicable □ Not applicable
The Company follows the principle of materiality in the preparation and disclosure of the financialstatements. The disclosures in the notes to the financial statements cover matters involving judgmentsabout materiality standards, the methods for determining materiality thresholds, and the bases for selectingthese standards are set out below:
| Disclosure Matters Involving Materiality Standard Determination | Disclosure in the Notes to the Financial Statements | Method and Basis of Selection of Materiality Standards |
| Significant individual provision for bad debts of notes receivable | No significant individual provision for bad debts of notes receivable in the current period | Exceeding 0.3% of the total assets |
| Significant individual provision for bad debts of accounts receivable | No significant individual provision for bad debts of accounts receivable in the current period | Exceeding 0.3% of the total assets |
| Significant write-off of accounts receivables | ||
| Significant individual provision for bad debts of other receivables | VII 8 | The Company recognises individual other receivables exceeding 0.3% of the total assets as significant other receivables. |
| Significant construction in progress | VII 12 | The Company recognises projects with amounts or balances exceeding 0.3% of the total assets as significant projects under construction. |
| Significant cash flows from investing activities | No significant cash flows from investing activities that require disclosure in the current period | The Company considers investing cash flows exceeding 5% of the total assets as significant investing cash flows. |
| Significant subsidiaries and non-wholly-owned subsidiaries | X | The Company identifies a subsidiary with operating revenue exceeding 15% of the Group's total operating revenue as a significant subsidiary or non-wholly-owned subsidiary. |
| Significant commitment | XVI | The Company considers commitments amounting to 0.3% of the total assets as significant commitments. |
| Significant subsequent events as of the balance sheet date | XVII | The Company considers events with amounts exceeding 0.3% of the total assets as significant subsequent events on the balance sheet date. |
6. Accounting treatment of business combination under the same control and business combinationnot under the same control
√ Applicable □ Not applicable
(1) Accounting methods of business combination under the same control
The Company’s assets and liabilities acquired from business combinations will be measuredaccording to the carrying value of the acquiree in financial statement of the final controlling party. TheCompany will adjust capital reserves according to proportion of the acquiree’s carrying value inconsolidated financial statement of the final controlling party and the balance between carrying value andthe carrying value paid for combination consideration or total nominal value of issued shares; if the capitalreserve is insufficient to offset such difference, the difference will be offset against retained earnings.
(2) Accounting methods of business combination not under the same control
On the acquisition date, the difference between the combined cost and the fair value share of theidentifiable net assets of the acquiree obtained in the merger is recognized as goodwill. If the combinedcost is less than the fair value share of the identifiable net assets of the acquiree obtained in the combination,firstly, the fair value of identifiable assets, liabilities and contingent liabilities of the acquiree and themeasurement of combined cost are reviewed. If the combined cost is still less than the fair value share ofidentifiable net assets of the acquiree obtained in the merger after review, the difference is recorded inprofit and loss of the current period.
7. Judgment criteria for control and method of preparation of consolidated financial statements
√ Applicable □ Not applicable
(1) Judgment of control
Ownership of rights over the investee, variable returns through involvement in the investee's relevantactivities, and the ability to influence the variable returns of the investee by exercising control over it arerecognised as control.
(2) Method of preparation of consolidated financial statements
The Company as the parent brings all subsidiaries under its control into the consolidated scope of theconsolidated financial statements. The consolidated financial statements are based on the financialstatements of the Company as the parent and its subsidiaries and are prepared by the Company as theparent according to other relevant information and Accounting Standards for Enterprises No. 33 -Consolidated Financial Statements.
8. Classification of joint arrangements and accounting of joint operations
□ Applicable √ Not applicable
9. Criteria for recognition of cash and cash equivalents
Cash listed in cash flow statement refers to cash on hand and reserves always available for payment.
Cash equivalents refer to investments that are held for short term, highly liquid, and readily convertible toknown amounts of cash and subject to insignificant risk of change in value.
10. Foreign currency business and conversion of foreign currency statement
√ Applicable □ Not applicable
(1) Conversion of foreign currency business
At the initial recognition of foreign currency transactions, foreign currency shall be converted intoRMB at the approximate exchange rate of the spot exchange rate on the transaction date. On the balancesheet date, foreign currency monetary items are converted at the spot exchange rate on the balance sheetdate, and the exchange difference arising from different exchange rates is recorded in profit and loss ofthe current period except the exchange difference between the principal and interest of foreign currencyspecial loans related to the purchase and construction of assets eligible for capitalization. Foreign currencynon-monetary items measured at historical cost adopt a similar exchange rate of the spot exchange rate onthe transaction date, without changing their RMB amount. Foreign currency non-monetary items measuredat fair value shall be converted at the spot exchange rate on the date when the fair value is determined, andthe difference shall be recorded in the profit and loss of the current period or other comprehensive income.
(2) Conversion of foreign currency financial statements
Assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the balancesheet date. Except for the “undistributed profit” item, other items of owner’s equity items are converted atthe spot exchange rate on the transaction date; the income and expense items in the income statement areconverted at a similar exchange rate of the spot exchange rate on the transaction date. The differencesarising from the above conversion of foreign currency-denominated financial statements shall be recordedin other comprehensive income.
11. Financial instruments
√ Applicable □ Not applicable
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories when they are initially recognized:
(1) Financial assets measured at amortized cost; (2) financial assets at fair value through othercomprehensive income; (3) financial assets at fair value through current profit or loss.
Financial liabilities are classified into the following four categories when they are initially recognized:
(1) Financial liabilities at fair value through current profit or loss; (2) financial liabilities arising from thetransfer of financial assets not meeting the de-recognition criteria or from the continuing involvement inthe transferred assets; (3) financial guarantee contracts which do not fall within the category of (1) or (2)above, and loan commitments which do not fall within category (1) above and made at an interest ratelower than the market rate; (4) financial liabilities measured at amortized cost.
2. Recognition basis, measurement methods and derecognition conditions for financial assets andfinancial liabilities
(1) Determination basis and measuring methods for financial assets and financial liabilitiesA financial instrument is recognized as an asset or liability when the Company becomes a partythereto. For financial assets or financial liabilities measured at fair value through profit or loss, thetransaction expenses are directly included in profit and loss of the current period; for financial assets orfinancial liabilities in other categories, the transaction expenses are included in the amount initiallyrecognized. However, accounts receivable initially recognized by the Company that do not include asignificant financing component or where the Company does not consider the financing component in acontract with a term not exceeding one year will be initially measured at the transaction price defined inAccounting Standard for Business Enterprises No.14-Income.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
Financial assets are subsequently measured at amortized cost by the effective interest method. Gainsor losses arising from a financial asset measured at amortized cost which does not form part of any hedgingrelationship are recorded in current profit or loss at the time of de-recognition, reclassification,amortization according to the effective interest method or recognition of impairment.
2) Investments in debt instruments at fair value through other comprehensive income
Such financial assets shall be subsequently measured at fair value. Interest, impairment loss or gainand exchange gain/loss calculated using the effective interest method are recorded in current profit or loss,other gains or losses are recorded in other comprehensive income. On derecognition, cumulative gains orlosses that were previously recorded in other comprehensive income are transferred from othercomprehensive income and recorded in current profit or loss.
3) Investments in equity instruments at fair value through other comprehensive income
Such financial assets shall be subsequently measured at fair value. Dividend received (except for theportion which forms part of investment cost recovered) is recorded in current profit or loss, other gains orlosses are recorded in other comprehensive income. On derecognition, cumulative gains or losses thatwere previously recorded in other comprehensive income are transferred from other comprehensiveincome and recorded in retained earnings.
4) Financial assets at fair value through profit or loss
Gains or losses (including interest income and dividend income) arising from the subsequentmeasurement at fair value are recorded in current profit or loss, unless the financial asset forms part of ahedging relationship.
(3) Method for the subsequent measurement of financial liabilities
1) Financial liabilities measured at fair value through profit and loss of the current period
Such financial liabilities include transactional financial liabilities (including derivative instrumentswhich belong to the category of financial liabilities) and financial liabilities designated as at fair valuethrough current profit or loss. Such financial liabilities are subsequently measured at fair value. Theamount of changes in the fair value of financial liabilities designated as at fair value through profit or loss,which arise from the change in the credit risk of the Company, is recorded in other comprehensive income,
unless such accounting treatment would result in or increase the accounting mismatch of gain and loss.Other gains or losses (including interest expense, except for the fair value changes arising from the changein credit risk of the Company) on such financial liabilities are recorded in current profit or loss, unlesssuch financial liabilities form part of a hedging relationship. On derecognition, cumulative gains or lossesthat were previously recorded in other comprehensive income are transferred from other comprehensiveincome and recorded in retained earnings.
2) Financial liabilities resulting from the transfer of financial assets which does not satisfy the de-recognition criteria or from the continuing involvement in the transferred assets are measured accordingto the relevant provisions of the Accounting Standard for Business Enterprises No.23-Transfer of FinancialAssets.
3) Financial guarantee contracts that do not fall within the category of 1) or 2) above, and loancommitments that do not fall within the category of 1) above and made at an interest rate lower than themarket rate, are subsequently measured at the higher of the two following amounts after initial recognition:
① The amount of loss provision determined according to the rules related to the impairment of financialinstruments; ② The remaining balance of the initially recognized amount after deducting the amount ofcumulative amortization determined according to relevant rules of the Accounting Standard for BusinessEnterprises No.14-Income.
4) Financial liabilities measured at amortized cost
Such financial liabilities are measured at amortized cost using the effective interest method. Gains orlosses arising from a financial liability measured at amortized cost which does not form part of any hedgingrelationship are recorded in current profit or loss at the time of de-recognition or amortization accordingto the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when any of the following criteria is met:
① The contractual rights to receive the cash flows from the financial assets terminate; or
② The financial asset has been transferred, and such transfer satisfies the criteria set out in theAccounting Standard for Business Enterprises No.23-Transfer of Financial Assets regarding the de-recognition of financial assets.
2) Where the present obligation of a financial liability (or a portion thereof) has been discharged, theCompany de-recognizes the financial liability (or a portion thereof).
3. Recognition basis and measurement method of financial asset transfer
If the Company has transferred substantially all risks and rewards of ownership of the financial asset,the financial asset is de-recognized, and the right and obligation arising from or retained in the transfer areindividually recognized as an asset or liability. If substantially all risks and rewards of ownership of thefinancial asset are retained, the financial asset transferred remains recognized. If the Company has nottransferred or retained nearly all the risks and remunerations of ownership of the credit assets, differentmeasures should be taken in accordance with the following circumstances respectively: (1) If the Companygives up the control of the financial assets, these financial assets shall be derecognized; (2) if the Company
does not give up the control of the financial assets, the relevant financial assets shall be recognized andthe relevant liabilities shall be recognized accordingly in accordance with the extent of their continuedinvolvement in the transferred financial assets.
If the overall transfer of financial assets meets the conditions for derecognition, the differencebetween the following two amounts shall be recorded in profit and loss of the current period: (1) Thecarrying value of the transferred financial asset as of the date of derecognition; (2) Sum of theconsideration received for the transfer of the financial asset, and the portion of the cumulative amount offair value changes previously recorded in other comprehensive income that corresponds with the portionof the asset de-recognized (the transferred financial asset is an investment in debt instruments at fair valuethrough other comprehensive income). Where a portion of the financial asset has been transferred and thetransferred portion as a whole satisfies the derecognition criteria, the carrying value of the financial assetas a whole prior to its transfer is allocated between the portion of the asset derecognized and the portionthat remains recognized, according to their relative fair value as of the transfer date, and the differencebetween the two amounts mentioned below is recorded in current profit or loss: (1) The carrying value ofthe derecognized portion; (2) Sum of the consideration received for the derecognition portion, and theportion of the cumulative amount of fair value changes previously recorded in other comprehensiveincome, which corresponds with the derecognized portion (the transferred financial asset is an investmentin debt instruments at fair value through other comprehensive income).
4. Methods for determining the fair value of financial assets and financial liabilities
The Company applies valuation techniques that are applicable in the current situation and aresupported by sufficient available data and other information to determine the fair value of relevantfinancial assets and financial liabilities. The Company classifies the inputs of valuation techniques intothe following levels and applies them accordingly:
(1) Level 1 inputs are the unadjusted quotation of the same assets or liabilities available on the activemarket on the measurement day;
(2) Level 2 inputs are inputs for the relevant assets or liabilities other than the level 1 inputs, whichare directly or indirectly observable, including quotations for similar assets or liabilities in an active market;quotations for the same or similar assets or liabilities in an inactive market; other observable inputs otherthan quotations, such as interest rate and yield curve observable during normal quotation intervals; andmarket-tested inputs;
(3) Level 3 inputs are non-observable inputs for the relevant assets or liabilities, including interestrate and stock volatility which cannot be directly observed or cannot be verified by observable marketdata, the future cash flow of a retirement obligation assumed in a business combination, and financialforecast performed based on internal data.
5. Impairment of financial instruments
Based on the expected credit loss, for financial assets measured in amortized cost, investment in debtinstruments measured at fair value and whose changes are recorded in other comprehensive income,contract assets, lease receivables, loan commitments classified as financial liabilities measured at fair
value and whose changes are recorded in profit and loss of the current period, financial guarantee contractsthat do not belong to financial liabilities measured at fair value and whose changes are recorded in theprofits and losses of the current period or financial liabilities formed by the transfer of financial assets thatdo not meet the conditions for derecognition or continue to be involved in the transferred financial assetsshall be impaired and loss reserves shall be recognized.
Expected credit loss refers to the weighted average of credit loss of financial instruments weightedwith default risks. Credit loss refers to the difference between all contractual cash flow receivable by theCompany under contracts which are discounted according to the original effective interest rate, and all thecash flow expected to be received, namely the present value of all cash shortfall. Specifically, financialassets acquired or derived to which credit impairment has occurred are discounted by the Companyaccording to the credit-adjusted effective interest rate.For the acquired or derived financial assets with credit impairment, the Company only recognizes thecumulative change of expected credit loss over the lifetime after initial recognition as the loss reserve onthe balance sheet date.For lease receivables, receivables and contract assets formed by transactions regulated by AccountingStandards for Business Enterprises No.14-Income, the Company uses simplified measurement methods tomeasure the loss reserve according to the expected credit loss amount over the lifetime.For financial assets other than the above measurement methods, at each balance sheet date, theCompany assesses the financial assets to see if the credit risk has significantly increased after initialrecognition. If the credit risk has significantly increased after initial recognition, the Company calculatesprovision for loss according to the amount of expected credit loss over the lifetime of the assets; if creditrisk has not significantly increased after initial recognition, the Company calculates loss provision basedon expected credit loss in the future 12 months.The Company uses available reasonable and well-founded information, including forward-lookinginformation, to determine whether the credit risk of financial instruments has increased significantly sincethe initial recognition by comparing the default risk of financial instruments on the balance sheet date withthe default risk on the initial recognition date.On the balance sheet date, if the Company judges that the financial instrument only has low creditrisk, it is assumed that the credit risk of the financial instrument has not increased significantly since theinitial recognition.The Company assesses the expected credit risk and measures the expected credit loss on the basis ofsingle financial instrument or portfolios of financial instruments. When based on the portfolio of financialinstruments, the Company classifies the financial instruments into different portfolios according to thecommon risk characteristics.The Company re-measures expected credit loss at each balance sheet date, and the amount of increasein loss provision or the written-back amount of loss provision arising from re-measurement is recorded incurrent profit or loss as an impairment loss or gain. For financial assets measured at amortized cost,impairment losses were allocated to offset the carrying value of the financial asset presented in the balance
sheet. For the debt investments measured at fair value through other comprehensive income, the Companyrecognized its loss reserves in other comprehensive income but did not offset the carrying value of thefinancial asset.
6. Offsetting financial assets and financial liabilities
The financial assets and financial liabilities are respectively listed in the balance sheet, not offsettingeach other. However, when all the following criteria are met, financial assets and liabilities are shown ona net basis after offsetting: (1) The Company has the statutory right to offset the recognized amounts, andsuch right is currently enforceable; (2) The Company intends to settle the financial assets and liabilitieson a net basis, or to realize the assets and settle the liabilities simultaneously.For the transfer of financial assets where the derecognition criteria are not met, the Company maynot offset the financial assets transferred against the related liabilities.
12. Notes receivable
□ Applicable √ Not applicable
Determination methods and accounting methods of the expected credit losses of notes receivable
□ Applicable √ Not applicable
Categories of groups for which allowances for doubtful accounts are established on a grouping basisof credit risk characteristics and the basis for determining them
□ Applicable √ Not applicable
Aging methodology for age-based recognition of a group of credit risk characteristics
□ Applicable √ Not applicable
Judgment criteria for establishing allowances for doubtful accounts on an individual basis
□ Applicable √ Not applicable
13. Accounts receivable
□ Applicable √ Not applicable
Determination methods and accounting methods of the expected credit losses of accounts receivable
□ Applicable √ Not applicable
Categories of groups for which allowances for doubtful accounts are established on a grouping basisof credit risk characteristics and the basis for determining them
□ Applicable √ Not applicable
Aging methodology for age-based recognition of a group of credit risk characteristics
√ Applicable □ Not applicable
Judgment criteria for establishing allowances for doubtful accounts on an individual basis
√ Applicable □ Not applicable
14. Receivables financing
□ Applicable √ Not applicable
Determination methods and accounting methods of the expected credit losses of receivablesfinancing
□ Applicable √ Not applicable
Categories of groups for which allowances for doubtful accounts are established on a grouping basisof credit risk characteristics and the basis for determining them
□ Applicable √ Not applicable
Aging methodology for age-based recognition of a group of credit risk characteristics
□ Applicable √ Not applicable
Judgment criteria for establishing allowances for doubtful accounts on an individual basis
□ Applicable √ Not applicable
15. Other receivables
√ Applicable □ Not applicable
Determination methods and accounting methods of the expected credit losses of other receivables
□ Applicable √ Not applicable
Categories of groups for which allowances for doubtful accounts are established on a grouping basisof credit risk characteristics and the basis for determining them
□ Applicable √ Not applicable
Aging methodology for age-based recognition of a group of credit risk characteristics
√ Applicable □ Not applicable
Judgment criteria for establishing allowances for doubtful accounts on an individual basis
√ Applicable □ Not applicable
16. Inventories
√ Applicable □ Not applicable
Inventory categories, issue valuation method, inventory system, amortisation method for low-valueconsumables and packing materials
√ Applicable □ Not applicable
1. Classification of inventories
Inventories refer to finished goods or commodities for sale held in daily activities, unfinished goodsin manufacturing process, and materials and supplies consumed in process of manufacturing products orproviding services, etc.
2. Valuation method of inventories upon delivery
The cost measurement for the inventories delivered is made with a one-time weighted average methodat the end of the month.
3. Inventory system of inventories
The perpetual inventory system is adopted for the inventories of the Company.
4. Amortization of low-value consumables and packing materials
(1) Low-value consumables
Low-value consumables are amortized with a one-time write-off method.
(2) Packing materials
Packing materials are amortized with a one-time write-off method.
Recognition standards and establishment methods for inventory valuation allowances
√ Applicable □ Not applicable
On the balance sheet date, inventories should be measured whichever is lower in accordance with thecost and net reliable value, and the provision for decline in value of inventories shall be made accordingto the difference that the cost of inventories higher than the net realizable value. For inventories directlyused for sale, the net realizable value shall be determined by the estimated selling price of the inventoryminus the estimated selling expenses and relevant taxes and fees in the normal production and operationprocess. For materials inventory requiring processing during normal process of production and operation,the net realizable value shall be determined by deducting estimated costs occurring during completion,estimated selling expenses and related taxes from estimated sale price of finished products. On the balancesheet date, some of the same inventory have contract price agreed, others not; their net realizable valueshall be recognized respectively and compared with the corresponding cost to determine the amount ofprovision or write-back of inventory depreciation reserve.
Categories of groups for which inventory valuation allowances are established on a grouping basisand the basis for determining them, as well as the basis for determining net realizable value fordifferent categories of inventories
□ Applicable √ Not applicable
Calculation method and basis for determining the net realisable value of each age group for thepurpose of recognising the net realisable value of inventories based on the age of the inventories
□ Applicable √ Not applicable
17. Contract assets
√ Applicable □ Not applicable
Method and criteria for determining contract assets
√ Applicable □ Not applicable
The Company presented contract assets or contract liabilities on the balance sheet in accordance withthe relationship between performance obligations and customer payment. The Company will set off the
contract assets and contract liabilities under the same contract and present them in net amount.
The right of the Company to receive consideration from its customers unconditionally (i.e. onlydepending on the passage of time) is presented as receivables, and the right to receive consideration forgoods transferred to its customers (depending on factors other than the passage of time) is presented as acontract asset.
The obligation to transfer goods to customers for consideration received or receivable from customersis presented as a contract liability.
Determination methods and accounting methods of the expected credit losses of contract assets
□ Applicable √ Not applicable
Categories of groups for which allowances for doubtful accounts are established on a grouping basisof credit risk characteristics and the basis for determining them
□ Applicable √ Not applicable
Aging methodology for age-based recognition of a group of credit risk characteristics
□ Applicable √ Not applicable
Judgment criteria for establishing allowances for doubtful accounts on an individual basis
□ Applicable √ Not applicable
18. Non-current assets or disposal groups held for sale
□ Applicable √ Not applicable
Recognition standards and accounting treatments for non-current assets or disposal groups held forsale
□ Applicable √ Not applicable
Recognition standards and presentation methods for discontinued operations
□ Applicable √ Not applicable
19. Long-term equity investments
√ Applicable □ Not applicable
1. Judgment criteria for joint control and significant influence
Joint control refers to the control the Company shares with other entities over a certain arrangementfollowing relevant agreements by which any activity under the arrangement may be conducted only withthe unanimous agreement of all participants sharing the power of control. Significant influence refers tothe power to participate in making decisions on the financial and operating policies of an investee, but notto control or do joint control together with other parties over the formulation of these policies.
2. Determination of investment cost
(1) In case of a business combination under the same control, if the acquirer pays cash, transfers non-cash assets, assumes debts or issues equity securities as merger consideration, the share of the owner’sequity of the acquiree obtained on combination date in the carrying value of the financial statements ofthe ultimate controlling party is deemed as an initial investment cost. Capital reserve is adjusted based onthe difference between initial investment cost of long-term equity investment and carrying value of paidcombination consideration or total nominal value of issued share; if the capital reserve is insufficient tooffset such difference, the difference will be offset against retained earnings.If business combination under the same control is realized step by step through multiple transactions,whether the multiple transactions is a “Package Deal” is determined. If the deals fell into a "Package Deal",all transactions shall be treated as a transaction to gain control. If it is not a “package deal”, on thecombination date, the initial investment cost of the long-term equity investment shall be determined basedon the share of net assets’ carrying value of the acquiree in the consolidated financial statements of theultimate controlling party. The capital reserve is adjusted based on the difference between the initialinvestment cost of the long-term equity investment on the combination date and the sum of the carryingvalue of the long-term equity investment before the acquisition and the carrying value of the new paymentconsideration on the acquisition date. If the capital reserve is insufficient to offset such difference, thedifference will be offset against retained earnings.
(2) For business combinations not under the same control, the fair value of the combinationconsideration paid by it on the acquisition date shall be its initial investment cost.
For long-term equity investment formed by a business combination achieved step by step throughmultiple transactions, relevant accounting treatment is performed with distinctions made between separatefinancial statements and consolidated financial statements:
1) In the separate financial statements, the sum of the fair value of the originally held equityinvestment and the additional investment cost shall be taken as the initial investment cost when convertingto using the cost method.
2) In the consolidated financial statements, it is determined whether it is a “package deal”. If the dealsfell into a "Package Deal", all transactions shall be treated as a transaction to gain control. If it is not a“Package Deal”, the equity of the acquiree held prior to the acquisition date shall be re-measured accordingto the fair value of the equity at the acquisition date, and the difference between the fair value and thecarrying value shall be recorded in the current investment income. Where the equity of the acquiree heldprior to the acquisition date involves other comprehensive income accounted for based on the equitymethod, etc., the other comprehensive income related to it shall be converted into the current investmentincome of the acquisition date. However, other comprehensive income arising from the re-measurementof net liabilities or changes in net assets of defined benefit plans by the investee is excluded.
(3) Except for business combination: If it is acquired by paying cash, the actual acquisition price shallbe taken as its initial investment cost; if it is acquired by issuing equity securities, the fair value of theissued equity securities shall be taken as its initial investment cost; if it is acquired by means of debtrestructuring, the initial investment cost shall be determined according to the Accounting Standards for
Business Enterprises No. 12-Debt Restructuring; if it is acquired by exchange of non-monetary assets, theinitial investment cost shall be determined according to the Accounting Standards for Business EnterprisesNo. 7-Exchange of Non-monetary Assets.
3. Method for subsequent measurement and recognition of profit or loss
The long-term equity investment controlled by the investee shall be accounted for by the cost method;the long-term equity investment of associated enterprises and joint ventures shall be accounted for by theequity method.
4. Treatment method of investing in subsidiaries until loss of control right step by step throughmultiple transactions
(1) Principles for determining whether or not a transaction is a "package deal"
Multiple transactions for disposing of equity investments in subsidiaries until losing control, theCompany evaluates whether such step-by-step transactions constitute a "package deal" based on the terms,conditions, disposal prices obtained separately, recipients of the equity sold, disposal methods, and timingof each step of the transactions, taking into consideration their mutual influence. Terms, conditions, andeconomic effects of transactions that meet one or more of the following criteria typically indicate that themultiple transactions constitute a "package deal":
1) The transactions are concluded simultaneously or considering their mutual influence;
2) The transactions together achieve a complete commercial result;
3) The occurrence of one transaction depends on the occurrence of at least one other transaction;
4) A single transaction is uneconomical but becomes economical when considered together with othertransactions.
(2) Accounting treatment for transactions that are not "package deals"
1) Separate financial statements
For the disposal of long-term equity investments, the difference between the carrying value and theactual price acquired shall be recorded into profit and loss of the current period. For the remaining equity,if it still has a significant impact on the investee or implements joint control with other parties, it shall beaccounted for by the equity method; if it is no longer possible to exercise control, joint control orsignificant influence on the investee, accounting shall be carried out in accordance with the relevantprovisions of Accounting Standards for Business Enterprises No. 22-Recognition and Measurement ofFinancial Instruments.
2) Consolidated financial statements
Before the loss of control right, the difference between the disposal price and the share of net assetsis continuously calculated by the subsidiary from the acquisition date or combination date correspondingto the disposal of long-term equity investment shall be adjusted, and the capital reserve (capital premium)shall be adjusted. If the capital premium is insufficient to offset, the retained earnings shall be offset.
In case of loss of control over the original subsidiary, the remaining equity shall be re-measuredaccording to its fair value on the date of loss of control. The aggregate of the consideration obtained bydisposing of the equity and the fair value of the remaining equity less the portion of the net assets of the
subsidiary that has been measured, as calculated at the original shareholding proportion, from theacquisition date or combination date is recognized in profit and loss of the current period on investmentsin which the control is lost, and goodwill shall be offset. Other comprehensive income, etc. related to theoriginal subsidiary’s equity investment will be converted into income from investment for the currentperiod when the control is lost.
(3) Accounting treatment for transactions that are "package deals"
1) Individual financial statements
Each transaction is accounted for as a single disposal of a subsidiary and loss of control. However,any difference between the disposal proceeds and the carrying value of the long-term equity investmentcorresponding to the disposal investment is recognised in other comprehensive income in the individualfinancial statements, and transferred to the profit or loss of the period when control is lost.
2) Consolidated financial statements
The Company treats each transaction as a transaction that disposes of a subsidiary and loses control.However, the difference between each disposal price before losing control and the share of subsidiaries’net assets corresponding to the disposed investment shall be recognized as other comprehensive incomein the consolidated financial statements, and shall be transferred into the profits and losses of the currentperiod in case of loss of control.
20. Investment property
Not applicable
21. Fixed assets
(1). recognition criteria
√ Applicable □ Not applicable
The fixed assets of the Company refer to tangible assets held for production of goods, provision oflabor services, lease or business with a service life of over a fiscal year. Fixed assets shall be recognizedwhen the economic benefits are flowing in and the cost can be measured reliably.
(2). Depreciation method
√ Applicable □ Not applicable
| Category | Depreciation method | Depreciable life (year) | Residual value rate | Annual depreciation rate |
| Houses and buildings | Straight-line depreciation method | 20 | 3% | 4.85% |
| Machinery equipment | Straight-line depreciation method | 4-10 | 3% | 9.70%-24.25% |
| Means of transportation | Straight-line depreciation method | 2-10 | 3% | 9.70%-48.50% |
| Electronic and other equipment | Straight-line depreciation method | 2-10 | 3% | 9.70%-48.50% |
| Fixed assets fixtures | Straight-line depreciation method | 5 | 0% | 20% |
22. Construction in progress
√ Applicable □ Not applicable
1. Fixed assets shall be recognized when the economic benefits are flowing in and the cost can bemeasured reliably. The construction in progress is measured according to the actual cost incurred beforethe construction of the asset reaches its intended serviceable condition.
2. When construction in progress reaches expected serviceable conditions, it will be carried forwardinto fixed assets based on its actual cost. For those that have reached their intended serviceable status buthave not yet completed the settlement, they shall be transferred to fixed assets according to the estimatedvalue, and the original provisional value shall be adjusted according to the actual cost after the finalaccounts are completed, but the depreciation already accrued shall not be adjusted.
| Category | Standard and timing for transferring construction in progress to fixed assets |
| Buildings and constructions | Transferred to fixed assets after completion inspection and fire inspection |
| Machinery equipment | Transferred to fixed assets after installation, commissioning, reaching the intended usable state, and passing acceptance |
| Electronic and other equipment | Transferred to fixed assets after installation, commissioning, reaching the intended usable state, and passing acceptance |
23. Borrowing costs
√ Applicable □ Not applicable
1. Recognition principles for the capitalization of borrowing costs
The borrowing costs that have occurred and can be directly attributed to the acquisition, constructionor production of assets eligible for capitalization are capitalized by the Company and recorded in relevantcost of assets; other borrowing costs are recognized as expenses based on the amount incurred when theyoccur, and shall be recorded in profit and loss of current period.
2. Period for capitalization of borrowing costs
(1) When all the following conditions are met by the borrowing costs, capitalization will start: 1)asset expenditure has occurred; 2) borrowing costs have occurred; 3) acquisition, construction orproduction activities have started in order to make the fixed asset be ready for the intended use or sale.
(2) If the acquisition, construction or production of an asset eligible for capitalization is continuouslysuspended for over 3 months for abnormal reasons, capitalization of the borrowing costs shall besuspended; borrowing costs incurred during the suspension shall be recognized as the current expensesuntil the acquisition, construction or production of the asset is resumed.
(3) When the assets with the purchase, construction or production meeting the capitalization
conditions reach the expected available or marketable state, the borrowing cost ceases to be capitalized.
3. Capitalization rate and capitalization amount of borrowing costs
For a specifically borrowed fund for the acquisition, construction or production of an asset eligible forcapitalization, the amount of interest that shall be capitalized is determined based on the interest expensesincurred in the period when a specifically borrowed fund is obtained (including the amortization ofdiscounts or premiums recognized according to the effective interest method) less any income earned onthe unused borrowing fund as a deposit in a bank or as a temporary investment. Where a general borrowingis used for the acquisition, construction and production of an asset eligible for capitalization, the amountof interest that shall be capitalized is determined by multiplying the part of the accumulative assetdisbursements in excess of the weighted average asset disbursement for the specifically borrowed fund bythe capitalization rate of the general borrowing used.
24. Biological assets
□ Applicable √ Not applicable
25. Oil and gas assets
□ Applicable √ Not applicable
26. Intangible assets
(1) Service life and determination basis, estimation, amortization method or review process
√ Applicable □ Not applicable
1. Intangible assets include land use rights, software, etc., which are initially measured at costs.
2. Intangible assets with limited service life are properly amortized within the service life based onthe expected method to realize economic benefits relating to the intangible assets. Where the expectedrealization method cannot be reliably determined, Straight-line Amortization Method is adopted. Thedetails are as follows:
| Item | Amortization period (year) | Amortization method |
| Land use right | Duration of land use | Straight line method |
| Software | 2-5 | Straight line method |
27. Long-term assets impairment
√ Applicable □ Not applicable
For long-term equity investments, fixed assets, construction in progress, right-of-use assets, long-term assets with limited service life and other long-term assets, if there are signs of impairment on thebalance sheet date, the recoverable amount shall be estimated. Goodwill and intangible assets withuncertain service life formed by business combinations are tested for impairment every year regardless ofwhether there are signs of impairment. Goodwill is tested for impairment in conjunction with the asset
group or combination of asset groups to which it relates.If the recoverable amount of the above-mentioned long-term assets is lower than its carrying value,the asset impairment reserve shall be recognized according to the difference and recorded in profit andloss of the current period.
28. Long-term prepaid expense
√ Applicable □ Not applicable
Long-term prepaid expenses are accounted for all expenses that have been paid and have anamortization period of more than one year (excluding one year). The long-term prepaid expenses areaccounted for according to the actual amount incurred and are amortized averagely over the benefit periodor the specified period. If the long-term deferred expenses item cannot bring benefit in the subsequentaccounting period, the amortized value of the item that has not been amortized will be transferred to theprofit or loss for the current period.
29. Contract liabilities
√ Applicable □ Not applicable
The Company presented contract assets or contract liabilities on the balance sheet in accordance withthe relationship of performance obligations and customer payment. The Company will set off the contractassets and contract liabilities under the same contract and present them in net amount.
The right of the Company to receive consideration from its customers unconditionally (i.e. onlydepending on the passage of time) is presented as receivables, and the right to receive consideration forgoods transferred to its customers (depending on factors other than the passage of time) is presented ascontract assets.
The obligations of transferring goods to customers as a result of the consideration that the Companyhad received or shall receive from customers were presented as contract liabilities.
30. Employee remuneration
(1) Accounting treatment methods of short-term remuneration
√ Applicable □ Not applicable
Within the accounting period when employees provide service, the actual short-term remunerationshall be recognized as liabilities and be recorded in profit and loss of the current period or relevant assetcosts.
(2) Accounting treatment method for post-employment benefits
√ Applicable □ Not applicable
The Company classifies post-employment benefit plans into the defined contribution plan and thedefined benefit plan.
(1) During the accounting period in which the employees provide services to the Company, the
amount to be contributed as calculated according to the defined contribution plan is recognized as aliability and recorded in the profit or loss for the current period or the related asset costs.
(2) The accounting handling of the defined benefit plan usually includes the following steps:
1) Based on the projected unit credit method, related demographic variables and financial variablesare estimated by using unbiased and mutually compatible actuarial assumptions, the obligations under thedefined benefit plan are measured, and the periods to which relevant obligations are attributed aredetermined. Meanwhile, the Company will discount the obligations incurred from a defined benefit plan,to determine present value of defined benefit plan and current service cost.
2) The deficit or surplus formed by present value of obligations to the defined benefit plan minus thefair value of assets of the defined benefit plans is recognized as one net liabilities or net profits of thedefined benefit plans. If the defined benefit plans have a surplus, the Company shall measure the net profitof the defined benefit plans according to whichever is lower between the surplus and upper limit on theassets of the defined benefit plans.
3) At the end of the period, the employee compensation cost incurred in the defined benefit plan isrecognized as service cost, net interest arising from the net liabilities and net assets of the defined benefitplan, and changes in the net liabilities or net assets of the remeasured defined benefit plan. Of which, thenet interest arising from the net liabilities or net assets of the defined benefit plan is recorded in profit andloss of the current period or related asset cost, and changes in the net liabilities or net assets of theremeasured defined benefit plan are recorded in other comprehensive income, and is not written-back toprofits and losses in subsequent accounting periods. But these amounts recognized in other comprehensiveincome can be transferred within the scope of equity.
(3). Accounting treatment method for dismissal benefits
√ Applicable □ Not applicable
If the Company provides the employee with dismissal benefits, the Company shall recognize theemployee remuneration liabilities and record them in profit or loss for the current period on the followingdates (whichever is earlier): (1) the date when the Company may not unilaterally withdraw dismissalbenefits provided due to termination of labor relationship plans or layoff proposals; (2) the date when theCompany recognizes costs or expenses relating to the restructure of payments of dismissal benefits.
(4). Accounting treatment method for other long-term employee benefits
√ Applicable □ Not applicable
If other long-term benefits provided by the Company to employees meet the conditions of the definedcontribution plan, accounting treatment shall be carried out according to the relevant provisions of definedcontribution plan. Except for that, the other long-term benefits shall be subject to the accounting handlingaccording to the defined benefit plan. To simplify the related accounting treatment, employeecompensation cost incurred in the defined benefit plan is recognized as service costs. Net interests of netliabilities or net assets of other long-term employee benefits, as well as the total net amount of changes
caused by re-measurement of net liabilities or net assets of other long-term employee benefits, will berecorded in profit and loss of the current period or the related asset costs.
31. Provisions
□ Applicable √ Not applicable
32. Share-based payment
√ Applicable □ Not applicable
1. Category of share-based payment
The Company's share-based payment includes equity-settled share-based payment and cash-settledshare-based payment.
2. Relevant accounting processing for the implementation, modification, and termination of share-based payment plans
(1) Equity-settled share-based payment
For an equity-settled share-based payment in return for services of employees, if the right can beexercised immediately after the grant, the fair value of the equity instruments shall, on the grant date, berecorded in the relevant costs or expenses and the capital reserve shall be adjusted accordingly. For anequity-settled share-based payment in return for employee services, if the right cannot be exercised onlyafter completing the service during the vesting period or meeting the prescribed performance conditions,then on each balance sheet date within the vesting period, the services acquired in the current period shall,based on the best estimate of the number of vested equity instruments, be recorded in the relevant costs orexpenses at the fair value of the equities instruments on the grant date, and the capital reserve shall beincreased accordingly.
For an equity-settled share-based payment in return for the service of any other party, if the fair valueof the service of any other party can be reliably measured, it shall be measured at the fair value of theservice of any other party on the acquisition date; if the fair value of the service of any other party can notbe reliably measured, but the fair value of the equity instruments can be reliably measured, it shall bemeasured at the fair value of the equity instruments on the acquisition date and recorded in the relevantcosts or expenses, and the owner's equity shall be increased correspondingly.
(2) Cash-settled share payment
For a cash-settled share-based payment in return for services of employees, if the right can beexercised immediately after the grant, the fair value of liabilities assumed by the Company shall, on thegrant date, be recorded in the relevant costs or expenses and the liabilities shall be increased accordingly.For a cash-settled share-based payment, if the right cannot be exercised only after completing the serviceduring the vesting period or meeting the prescribed performance conditions, on each balance sheet datewithin the vesting period, the services acquired in the current period shall, based on the best estimate ofthe information about the vesting right, be recorded in the relevant costs or expenses and the correspondingliabilities at the fair value of the liabilities assumed by the Company.
(3) Modification and termination of share-based payment plans
If the modification increases the fair value of the granted equity instruments, the Company shallrecognize the increase of the services acquired according to the increase of the fair value of the equityinstruments. If the modification increases the number of the granted equity instruments, the Companyshall recognize the increased fair value of equity instruments as the increase of the services acquired. Ifthe Company modifies the vesting conditions in a way that is favorable to employees, the Company shallconsider the modified vesting conditions when processing vesting conditions.If the modification reduces the fair value of the granted equity instruments, the Company shallcontinue to recognize the amount of the service acquired based on the fair value of the equity instrumentson the grant date, and shall not consider the decrease of the fair value of the equity instruments. If themodification reduces the number of equity instruments, the Company shall process equity instruments byreducing some of them as the cancellation of the granted equity instruments. If the vesting conditions aremodified in a way that is unfavorable to employees, the Company shall not consider the modified vestingconditions when processing vesting conditions.If the Company cancels the granted equity instruments or settles the granted equity instruments (notincluding those canceled due to failure to meet vesting conditions) during the vesting period, thecancellation or settlement shall be processed as the vested right and the amount to be recognized withinthe remaining vesting period originally shall be recognized immediately.
33. Preference shares, perpetual bonds and other financial instruments
□ Applicable √ Not applicable
34. Revenue
(1). Accounting policy for recognition and measurement of revenue by type of business
√ Applicable □ Not applicable
1. Principles of revenue recognition
On the commencement date of a contract, the Company shall assess the contract, identify each singleperformance obligation in the contract, and determine that each single performance obligation is satisfiedwhether within a certain period of time or at a certain point in time.
When one of the following conditions is met, it belongs to fulfilling the performance obligation withina certain period of time, otherwise, it belongs to fulfilling the performance obligation at a certain point intime: (1) The customer obtains and consumes the economic benefits brought by the Company'sperformance while the Company performs the obligation; (2) The customer can control the goods underconstruction during the performance of the Company; (3) The goods produced during the performance ofthe Company have irreplaceable uses, and the Company has the right to collect amount for the cumulativeperformance completed so far during the whole contract period.
For the performance obligations performed within a certain period of time, the Company recognizesthe revenue according to the performance progress within that period of time. When the performance
progress cannot be reasonably determined, if the cost incurred is expected to be compensated, the revenueshall be recognized according to the amount of the cost incurred until the performance progress can bereasonably determined. For performance obligations performed at a certain point in time, revenue isrecognized at the time when the customer obtains control over related goods or services. To decide whetherthe customer has obtained the control over goods, the Company takes into account the following signs: (1)the enterprise has the present right to collection for the goods, meaning the customer bears the presentobligation to payment for the goods; (2) the enterprise has passed the legal title to the goods to the customer,meaning the customer has had the legal title to the goods; (3) the enterprise has transferred the physicalpossession of the goods to the customer, meaning the customer has had the physical possession of thegoods; (4) the enterprise has transferred the major risks and remunerations concerning the title to the goodsto the customer, meaning the customer has obtained the major risks and remunerations concerning the titleto the goods; (5) the customer has accepted the goods; (6) other signs to show that the customer hasobtained the control over the goods.
2. Principles of revenue measurement
(1) The Company measures revenue on the basis of the transaction price allocated to eachperformance obligation. Transaction price is the amount of consideration that the Company is expected tobe entitled to receive for transferring goods or services to customers, excluding the amount received onbehalf of third parties and the amount expected to be refunded to customers.
(2) If there is variable consideration in a contract, the Company shall determine the best estimate ofthe variable consideration according to the expected value or the most likely amount, but the transactionprice including the variable consideration shall not exceed the amount that the cumulative recognizedincome will most likely not be significantly written-back when the relevant uncertainty is eliminated.
(3) If there is a significant financing component in a contract, the Company shall determine thetransaction price according to the amount payable in cash when the customer assumes control of the goodsor services. The difference between the transaction price and the contract consideration shall be amortizedby the effective interest rate method during the contract period.
(4) If a contract contains two or more performance obligations, the Company shall allocate thetransaction price to each single performance obligation according to the relative proportion of the singleselling price of the goods promised by each single performance obligation on the commencement date ofthe contract.
3. Specific methods for revenue recognition
The Company mainly sells adaptors, wall switches and sockets, LED lighting and digital accessories.
(1) The specific time points for revenue recognition of various domestic sales methods of theCompany
1) Distribution method: Revenue is recognized when the goods are sent to the designated place andthe distributor receives the goods.
2) Direct sales: For direct sales by supermarkets and e-commerce, when the customer receives thegoods and publishes the information on the quantity and amount of goods received on its supplier platform,
the Company recognizes the revenue when it completes the reconciliation. For sales by opening an onlineshop on the e-commerce platform, the Company recognizes the revenue when the customer receives thegoods and confirms such receipt on the e-commerce platform. For offline direct sales to customers inShanghai, etc., the Company recognizes the revenue when the goods are delivered to the customer.
3) Consignment method: The Company recognizes the revenue when receiving the consignment list.
(2) The Company recognizes its revenue when it has completed the customs declaration formalitiesand obtained the bill of lading.
(2) Different recognition and measurement methods for revenue for different business modelsadopted in the same type of business
□ Applicable √ Not applicable
35. Contract costs
√ Applicable □ Not applicable
Assets related to contract costs include costs of obtaining a contract and costs to fulfill a contract.
The Company recognizes as an asset the incremental costs of obtaining a contract if it expects torecover those costs. The costs of obtaining a contract shall be included in profit or loss if the asset'samortization period is one year or less.
If the costs incurred in fulfilling a contract are not within the scope of standards related to inventories,fixed assets or intangible assets, etc., the Company shall recognize the costs to fulfill a contract as an assetif all the following criteria are satisfied:
1. The costs relate directly to a contract or to an anticipated contract, including direct labour, directmaterials, manufacturing overhead cost (or a similar cost), costs that are explicitly chargeable to thecustomer under the contract, and other costs that are only related to the contract.
2. The costs enhance the resources of the Company that will be used in satisfying performanceobligations in the future.
3. The costs are expected to be recovered.
An asset related to contract costs shall be amortized on a systematic basis that is consistent withrelated goods or services and included in profit or loss.
The Company shall make provision for impairment and recognize it as impairment losses on assetsto the extent that the carrying amount of an asset related to the contract costs exceeds the remaining amountof consideration that the Company expects to receive in exchange for the goods or services to which theasset relates less the costs expected to be incurred. If the remaining amount of consideration that theCompany expects to receive in exchange for the goods or services to which the asset relates minus thecosts expected to be incurred is higher than the carrying amount of the asset due to the subsequent changesin the factors of impairment in previous periods, the asset impairment provisions set aside should bereversed and included in profit and loss of the current period. However, the carrying amount of the assetupon the reversal should not exceed the carrying amount of the asset on the reversal date, supposing thatimpairment provisions are not set aside.
36. Government grants
√ Applicable □ Not applicable
1. Government grants are recognized when all the criteria below are satisfied: (1) The Company isable to satisfy all the conditions attached to such government grant; (2) The Company is able to receivethe grants from the government. Government grants were measured at the amount received or receivableif they were monetary assets. Non-monetary government grants were measured at fair value; if the fairvalue could not be reliably obtained, they were measured at the nominal amount.
2. Judgment basis and accounting treatment method for government grants related to assets
Government documents stipulate that government grants used to purchase, build or otherwise formlong-term assets are classified as government grants related to assets. If the government documentsconcerning a government grant do not specify the target of the grant, it should be determined based on thebasic conditions that must be met in order to receive the grant, and government grants which areconditional upon a long-term asset acquired, constructed or otherwise formed are classified as asset-relatedgovernment grants. Government grants related to assets are used to offset carrying value of assets or arerecognized as deferred income. If recognized as deferred income, government grants related to assets shallbe recorded in the profit and loss in stages in a reasonable and systematic manner within the useful life ofthe relevant asset. Government grants measured at nominal amount were directly recognized as profit orloss for the current period. If the underlying assets were sold, transferred, scrapped, or damaged beforethe end of the useful life, the unallocated balance of the relevant deferred income was transferred to theprofit or loss for the period of assets disposal.
3. Judgment basis and accounting treatment method for government grants related to income
Government grants other than government grants related to assets were classified as governmentgrants related to income. For government grants, including both asset-related parts and income-relatedparts that are difficult to be distinguished, overall government grants shall be classified as governmentgrants related to income. Government grants related to income shall be recognized as deferred income ifthey are used to compensate related future expenses or losses and recorded in profit and loss of the currentperiod during the period when relevant expenses are recognized, or shall be recognized as current profitand loss or offset the related costs if they are used to compensate related expenses or losses incurred.
4. Government grants related to daily activities are recognized as other income or used to offsetrelevant costs according to the substance of business activities. Government grants that are not related todaily activities are recognized as non-operating income and expenses.
5. Accounting method for interest subsidy on policy prime loans
(1) If the fiscal system allocated the funds of interest subsidies to the lending bank, and the lendingbank provided loans to the Company at a policy prime interest rate, the actual loan amount received bythe Company was recognised as the carrying value of the loan, and the relevant borrowing costs werecalculated in accordance with the loan principal and the policy prime interest rate.
(2) If the fiscal system allocated the funds of interest subsidies to the Company directly, the Company
reduced the corresponding interest subsidies against relevant borrowing costs.
37. Deferred income tax assets/Deferred income tax liabilities
√ Applicable □ Not applicable
1. Based on the difference between the carrying value of assets and liabilities and their tax bases (thedifference between the tax base and the carrying value, where tax bases of items that are not recognizedas assets and liabilities can be determined according to the tax law), deferred income tax assets or deferredincome tax liabilities are recognized in accordance with the applicable tax rates during the expected periodin which such assets are to be recovered or such liabilities are to be settled.
2. Deferred income tax assets shall be recognized to the extent of the amount of the taxable incomethat is likely to be obtained and deducted from deductible temporary difference. On the balance sheet date,if there is conclusive evidence that it is probable that sufficient taxable income will be available to offsetthe deductible temporary differences in the future, the deferred income tax assets that have not beenrecognized in the previous accounting period shall be recognized.
3. The Company reviews carrying values of deferred tax assets on the balance sheet date. If it isdetermined that the Company is not Period likely to obtain adequate taxable income to offset benefits fromdeferred tax assets, the carrying values of deferred tax assets are written down. Such write-downs arereversed when it becomes probable that sufficient taxable income should be available.
4. The current income tax and deferred income tax of the Company shall be recorded in profit andloss of the current period as income tax expenses or incomes, excluding the income taxes incurred in thefollowing circumstances: (1) Business combination; (2) Transactions or events directly recognized in theowner's equity.
5. Deferred income tax assets and deferred income tax liabilities are presented in net amount afteroffsetting when the following conditions are simultaneously met: (1) there is a legal right to settle currentincome tax assets and current income tax liabilities on a net basis; (2) the deferred income tax assets anddeferred income tax liabilities are related to income taxes levied by the same tax authority on the sametaxable entity or are related to different taxable entities, but are not expected to reverse in the future ineach of the periods in which the deferred income tax assets and deferred income tax liabilities are material;and the taxable entities involved intend to settle current income tax assets and current income tax liabilitieson a net basis. However, in each future period in which the deferred tax assets and deferred tax liabilitiesare reversed, the taxable entity involved intends to either settle the current income tax assets and currentincome tax liabilities on a net basis or to acquire the assets and settle the liabilities at the same time.
38. Leases
√ Applicable □ Not applicable
1. The Company as the leasee
On the beginning date of the lease term, the Company will recognize the lease with a lease term notexceeding 12 months and excluding the purchase option as a short-term lease. Leases with lower value
when a single leased asset is a brand-new asset are identified as low-value asset leases. If the Companysublets or expects to sublet the leased assets, the original lease shall not be deemed as a low-value assetlease.
The Company records the payments of short-term and low-value asset leases incurred during eachperiod of the lease term in the relevant asset costs or the profit or loss for the current period by the straight-line method/workload method.The Company will recognize right-of-use assets and lease liabilities on the inception date of the leaseterm, excluding the above short-term and low-value asset leases.
(1) Right-of-use assets
Right-of-use assets are initially measured at costs, including: 1) The initial measurement amount oflease liabilities; 2) If there is a lease incentive for the lease payment paid on or before the start date of thelease term, the relevant amount of the lease incentive already enjoyed shall be deducted; 3) Initial directexpenses incurred by the lessee; 4) The expected cost to be borne by the lessee in order to dismantle andremove the assets leased, restore original state of the place where the assets leased are in, or restore theassets leased to the state stipulated in the lease terms.
The Company depreciates right-of-use assets on a straight-line basis. If it is reasonably certain thatownership of the leased asset(s) will be obtained at the end of the lease term, the Company depreciates theleased asset(s) over its/their remaining service life. If it is not reasonably certain that the ownership of theleasehold property will be obtained at the end of the lease term, the Company will depreciate the leasedasset(s) over the lease term or the remaining service life, whichever is shorter.
(2) Lease liabilities
On the start date of the lease term, the Company recognizes the present value of the outstanding leasepayments as lease liabilities. The Company regards the interest rate implicit in lease as the rate of discountwhen calculating the present value of the lease payment. The incremental lending rate of the lessee willbe deemed as the rate of discount, if the interest rate implicit in lease cannot be confirmed. The differencebetween the lease payment and its present value is regarded as an unrecognized financing expense. Interestexpense is recognized at the discount rate of the present value of the recognized lease payment duringeach period of the lease term and is recorded in the profits and losses of the current period. Variable leasepayments that are not recorded in the lease liabilities measurement are recorded in profits and losses ofthe current period when they are actually incurred.
After the start of the lease term, in case of any changes in actual fixed payment amount, the expectedpayable amount of the guarantee residual value, the index or ratio used to determine the lease paymentamount, and the evaluation result or actual exercise of the purchase option, renewal option or terminationoption, the Company will re-calculate the lease obligation using the present value of the changed leasepayment, and adjusts the carrying value of right-of-use assets accordingly. If the carrying value of right-of-use assets has been reduced to zero, while lease liabilities still needs to be further reduced, the remainingamount will be recorded in the profits and losses of the current period.
Judgment criteria and accounting treatments for simplified treatments for short-term leases andleases of low-value assets as lessee
□ Applicable √ Not applicable
Classification criteria and accounting treatments for leases as lessor
√ Applicable □ Not applicable
2. The Company as lessor
On the start date of the lease term, the Company divides the lease that substantially transfers almostall risks and rewards related to the ownership of the leased assets into finance leases, except for operatingleases.
(1) Operating leases
The Company recognizes the lease payments receivable as rental earnings in each period within thelease term on a straight-line basis. The initial direct costs related to the operating lease are capitalized,amortized within the lease term on the same basis as the recognition of rental earnings, and included inthe profit or loss for the current period. Variable lease payments obtained by the Company in relation tooperating leases that are not included in the lease receivable are included in the profit or loss for the currentperiod when they are actually incurred.
(2) Finance leases
At the commencement date, the Company recognises the finance lease payment receivable based onthe net investment in the lease (sum of the present value of unguaranteed residual value and lease receiptsthat are not received at the commencement date, discounted by the interest rate implicit in the lease), andderecognises assets held under the finance lease. The Company calculates and recognises interest incomeusing the interest rate implicit in the lease over the lease term.
Variable lease payments not included in the measurement of the net investment in the lease arecharged as profit or loss in the periods in which they are incurred.
3. Sale and leaseback
(1) The Company as the lessee
The Company assesses whether the asset transfer in a sale and leaseback transaction is a sale inaccordance with relevant provisions of the Accounting Standards for Business Enterprises No. 14 - Income.
If the asset transfer in a sale and leaseback transaction is a sale, the Company measures the right-of-use assets formed by the sale and leaseback based on the portion of the original asset's carrying value thatis related to the use right acquired by the leaseback, and recognises related gains or losses only for theright transferred to the lessor.
If the asset transfer in a sale and leaseback transaction is not a sale, the Company continues torecognise the transferred asset and at the same time recognises a financial liability equivalent to the transferincome, and conducts corresponding accounting treatment for the financial liability in accordance with
the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of FinancialInstruments.
(2) The Company as the lessor
The Company assesses whether the asset transfer in a sale and leaseback transaction is a sale inaccordance with relevant provisions of the Accounting Standards for Business Enterprises No. 14 - Income.
If the asset transfer in a sale and leaseback transaction is a sale, the Company applies other accountingstandards for business enterprises to the accounting treatment for asset purchase, and conductscorresponding accounting treatment for asset lease in accordance with the Accounting Standard forBusiness Enterprises No. 21 - Leases.
If the asset transfer in a sale and leaseback transaction is not a sale, the Company does not recognisethe transferred asset, but recognises a financial asset equivalent to the transfer income, and conductscorresponding accounting treatment for the financial asset in accordance with the Accounting Standardsfor Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
39. Other important accounting policies and accounting estimation
√ Applicable □ Not applicable
1. Basis for applying hedge accounting, and accounting treatments
(1) The hedging relationship is classified into fair value hedge, cash flow hedge and hedge of netinvestment in foreign operations.
(2) For hedging that meets the following conditions, hedging accounting methods are used to dealwith it: 1) The hedging relationship is only composed of qualified hedging instruments and hedgedinstruments; 2) At the beginning of hedging, the Company formally designated hedging instruments andhedged items, and prepared written documents on hedging relationship and risk management strategiesand risk management objectives of the Company engaged in hedging; 3) The hedging relationship meetsthe requirements of hedging effectiveness.
When the hedging meets the following conditions at the same time, the Company determines that thehedging relationship meets the requirements of hedging effectiveness: 1) There is an economicrelationship between the hedged item and the hedging instrument; 2) Credit risk does not play a dominantrole in the value changes caused by the economic relationship between hedged items and hedginginstruments; 3) The hedging ratio of the hedging relationship is equal to the ratio of the number of hedgeditems actually hedged by the Company to the actual number of hedging instruments, but does not reflectthe imbalance of the relative weights of hedged items and hedging instruments.
The Company continuously evaluates whether the hedging relationship meets the hedgingeffectiveness requirements on and after the hedging start date. If the hedging relationship no longer meetsthe requirements of hedging effectiveness due to the hedging ratio, but the risk management objectives ofthe designated hedging relationship have not changed, the Company shall rebalance the hedgingrelationship.
(3) Hedging accounting treatment
1) Fair value hedge
① Gain or loss arising from a hedging instrument shall be recorded in profit and loss of the currentperiod. If the hedging instrument is used to hedge a non-trading equity instrument (or a component thereof)
that is chosen to be measured at fair value and whose changes are included in other comprehensive income,the gains or losses arising from the hedging instrument are included in other comprehensive income.
② Gain or loss of a hedged item arising from hedged risk exposure shall be recorded in profit andloss of the current period and meanwhile the carrying value of the hedged item not measured at fair valueshall be adjusted. If a hedged item is classified as financial assets (or a component thereof) that aremeasured at fair value and whose changes are recorded in other comprehensive income according toArticle 18 of Accounting Standards for Business Enterprises No.22-Recognition and Measurement ofFinancial Instruments, its gains or losses due to hedged risk exposure are recorded in profit and loss of thecurrent period, and its carrying value has been measured at fair value and will not be adjusted. If thehedged item is a non-trading equity instrument investment (or a component thereof) that the Companychooses to measure at fair value and its changes are recorded in other comprehensive income, the gains orlosses arising from the hedged risk exposure are recorded in other comprehensive income, and its carryingvalue has been measured at fair value and will not be adjusted.
If a hedged item is an unrecognized firm commitment (or a component thereof), the cumulativechanges in the fair value arising from hedged risk after the designation of hedging relationship shall berecognized as an asset or liability, and the related gain or loss shall be recorded in profit and loss of therespective periods. In case of acquiring assets or bearing liabilities for performing a firm commitment, theinitially recognized amount of the assets or liabilities shall be adjusted to include the cumulative changesin the fair value of the recognized hedged item.
If a hedged item is a financial instrument (or a component thereof) at measured amortized cost, theadjustment to the carrying value of the hedged item shall be amortized based on the actual interest raterecalculated on the commencement date of amortization and recorded in profit and loss of the currentperiod. If a hedged item is classified as financial assets (or a component thereof) that are measured at fairvalue and whose changes are recorded in other comprehensive income according to Article 18 ofAccounting Standards for Business Enterprises No.22-Recognition and Measurement of FinancialInstruments, cumulative recognized hedging gains or losses are amortized in the same manner andrecorded in profit and loss of the current period, but the carrying value of financial assets (or theircomponents) is not adjusted.
2) Cash flow hedge
① The part of the gain or loss of the hedging instrument that belongs to the effective hedging isincluded in the other comprehensive income as a reserve for cash flow hedges, and the invalid part isincluded in profit and loss of the current period. The amount of reserve for cash flow hedges is recognizedas the absolute amount of the lower of the following two items: A. The cumulative gains or losses ofhedging instruments since hedging; B. The cumulative change in the present value of the estimated futurecash flows of the hedged item since hedging.
② If a hedged item is a forecast transaction and the forecast transaction leads the Company tosubsequently recognize a non-financial asset or non-financial liability, or the forecast transaction of thenon-financial asset or non-financial liability forms a recognized commitment to which fair value hedgeaccounting is applicable, the original amount of reserve for cash flow hedges recognized in othercomprehensive income shall be transferred out and recorded in the initially recognized amount of suchnon-financial asset or non-financial liability.
③ For other cash flow hedges, the amount of reserve for cash flow hedges originally included inother comprehensive income is transferred out during the same period when the hedged expectedtransaction affects the profit and loss, and is recorded in the profit and loss of the current profit.
3) Net investment hedge in a foreign operation
The part of the gains or losses formed by hedging instruments that belong to effective hedging isrecognized as other comprehensive income, and when disposing of foreign operations, it is transferred outand recorded in the profit and loss of the current profit. The part of the gains or losses resulting fromhedging instruments that belong to invalid hedging shall be recorded in profit and loss of the current period.
40. Changes in important accounting policies and accounting estimation
(1) Changes in important accounting policy
√ Applicable □ Not applicable
Unit: RMB
| Contents of and reasons for changes in accounting policy | Financial statement line item which is significantly impacted | Amount of impact |
| The Ministry of Finance of China issued in November 2022 Interpretation No. 16, which states that “the accounting treatments of initial recognition exemption are not applicable to deferred income tax related to assets and liabilities arising from individual transactions”. The Company has adjusted its accounting policies according to Interpretation No. 16 and adopted the adjustments since 1 January 2023. | Deferred income tax assets | 1,423,636.74 |
| Deferred income tax liabilities | 1,513,382.32 | |
| Retained earnings | -89,745.58 | |
| Income tax expense | -90,225.33 |
Other notes:
This change in accounting policy is a reasonable change made by the Company in accordance with therelevant regulations and requirements of the Ministry of Finance and is in compliance with relevant lawsand regulations. The implementation of the changed accounting policies can objectively and fairly reflectthe financial position and operating results of the Company. This change in accounting policy will nothave any material impact on the Company's financial position, operating results or cash flows for thecurrent period, and will not be detrimental to the interests of the Company and its minority shareholders.
(2) Changes in important accounting estimates
□ Applicable √ Not applicable
(3) Adjustments to the financial statements at the beginning of the year of implementation of thenew accounting standards or interpretations of the standards for the first time since 2023
□ Applicable √ Not applicable
41. Other information
□ Applicable √ Not applicable
VI Taxation
1. Main taxes and tax rates
Major types of taxes and tax rates
√ Applicable □ Not applicable
| Tax | Tax basis | Tax rate |
| VAT | Revenue from commodity sales and taxable services calculated according to the tax law are the basic calculation of output tax. After deducting the amount of input tax which is allowed to be deducted in the current period, the difference is the VAT payable. | 13%, 9%, 6%, 5% [Note 1] |
| Real estate tax | Ad valorem tax: levied at 1.2% of the remaining value after deducting 30% from the original value of the housing property; Tax levied from rent: levied at 12% of the rental income. | 1.2%, 12% |
| Urban maintenance and construction tax | Turnover tax paid | 5%, 7% [Note 2] |
| Educational fee | Turnover tax paid | 3% |
| Local educational fee | Turnover tax paid | By 2% |
| Enterprise income tax | Amount of taxable income | 25%, 15%, 8.25%, 15.825% |
[Note 1] The tax of the Company's main products is levied at the tax rate of 13%, and VAT of interestincome is levied at the tax rate of 6%; VAT of the real estate rental income of subsidiaries Banmen ElectricAppliance and Shanghai Goneo is levied at a tax rate of 5% according to the simple method; VAT ofLingbo Goneo's real estate rental income is partly levied at a tax rate of 9% and partly at 5% according tothe simple method.[Note 2] Electric Sales is levied at a tax rate of 7%, and other companies at a tax rate of 5%Explanation of disclosure if different income tax rates apply to different corporate taxpayers
√ Applicable □ Not applicable
| Name of taxpayer | Income tax rate (%) |
| The Company | 15% |
| Ningbo Goneo | 15% |
| Goneo Photoelectric | 15% |
| Goneo Digital | 15% |
| Domestic Electrical Appliance | 15% |
| Goneo Low Voltage | 15% |
| Intelligent Technology | 15% |
| Dalitek | 15% |
| Goneo HK | 8.25% |
| Goneo Germany | 15.825% |
| Other taxpayers except the above | 25% |
2. Tax concessions
1. According to the Notice on Publishing the List of the First Batch of High-tech Enterprises inNingbo in 2021 issued by Beilun District Science and Technology Bureau of Ningbo on 19 January 2022,Ningbo Goneo and Goneo Photoelectric were recognized as high-tech enterprises in Ningbo in 2020, and
their qualification is valid for 3 years. From 2021 to 2023, Ningbo Goneo and Goneo Photoelectric enjoya preferential corporate income tax rate of 15%.
2. According to the Notice on the Filing of the First Batch of High-tech Enterprises Identified byNingbo City's Accreditation Authority in 2022 issued by the Office of the National Leading Group for theIdentification and Management of High-tech Enterprises on 30 December 2022, the Company andDomestic Electrical Appliance were identified as high-tech enterprises in Ningbo in 2022, with a validterm of 3 years. Therefore, from 2022 to 2024, the Company and Domestic Electrical Appliance enjoy apreferential corporate income tax rate of 15%.
3. According to the Notice on Publishing the List of the Third Batch of High-tech Enterprises-to-Bein Shanghai in 2022 (H.G.Q.R.B [2022] No. 021) issued by the Shanghai High-tech EnterpriseRecognition Steering Group on 14 November 2022, Dalitek was recognized as a high-tech enterprise inShanghai in 2022. From 2022 to 2024, Dalitek enjoys a preferential corporate income tax rate of 15%.
4. According to the Public Notice on the First Batch of High-tech Enterprises Identified and Reportedby the Ningbo Municipal Accreditation Organisation for Filing in 2023 issued by the Office of the NationalLeading Group for the Identification and Management of High-tech Enterprises on 8 December 2023,Intelligent Technology and Goneo Low Voltage were recognized as High-tech Enterprises in Ningbo in2023, and Goneo Digital passed the High-tech Enterprise review, with a valid period of three years. Assuch, from 2023 to 2025, Intelligent Technology, Goneo Low Voltage, and Goneo Digital enjoy apreferential corporate income tax rate of 15%.
VII Notes to the Consolidated Financial Statements
1. Monetary assets
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Cash on hand | 14,467.69 | 34,167.84 |
| Bank deposits | 4,548,290,085.14 | 4,435,294,692.17 |
| Other monetary assets | 100,324,302.30 | 55,930,602.55 |
| Interest receivable on term deposits | 95,085,570.53 | 120,706,706.98 |
| Total | 4,743,714,425.66 | 4,611,966,169.54 |
| Of which: Total amount deposited overseas | 23,017,044.95 | 174,605.10 |
2. Held-for-trading financial assets
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | Reasons and basis for recognition |
| Financial assets at fair value through profit or loss | 9,727,000,000.00 | 6,949,000,000.00 | / |
| Of which: | |||
| Banking WM products | 630,000,000.00 | 1,919,000,000.00 | / |
| Trust product | 4,617,000,000.00 | 1,260,000,000.00 | / |
| Asset management plan | 4,180,000,000.00 | 3,420,000,000.00 | / |
| Securities return voucher | 300,000,000.00 | 350,000,000.00 | / |
| Total | 9,727,000,000.00 | 6,949,000,000.00 | / |
Other notes:
√Applicable□Not applicable
(1) Description of held-for-trading financial assets with restrictions on the realisationThe closing balance of held-for-trading financial assets includes closed-end WM products worthRMB8,277 million.
(2) Details of banking WM products
| Bank | Closing amount | Opening amount |
| China Everbright Bank Co., Ltd., Ningbo Branch | 300,000,000.00 | 300,000,000.00 |
| Bank of Ningbo Co., Ltd., Cixi Sub-branch | 200,000,000.00 | 815,000,000.00 |
| Industrial Bank Co., Ltd., Ningbo Cixi Sub-branch | 110,000,000.00 | |
| China Minsheng Bank Co., Ltd., Ningbo Cixi Sub-branch | 20,000,000.00 | 298,000,000.00 |
| Bank of China Limited, Cixi Guancheng Sub-branch | 300,000,000.00 | |
| Bank of Ningbo Co., Ltd., Cixi Central District Sub-branch | 150,000,000.00 | |
| China Merchants Bank Co., Ltd., Ningbo Hangzhou Bay New Area Sub-branch | 30,000,000.00 | |
| Agricultural Bank of China Limited, Cixi Shiqiao Sub-branch | 26,000,000.00 | |
| Subtotal | 630,000,000.00 | 1,919,000,000.00 |
(3) Details of trust products
| Trust company | Closing amount | Opening amount |
| SDIC Taikang Trust Co., Ltd. | 1,367,000,000.00 | 180,000,000.00 |
| COFCO Trust Co., Ltd. | 1,300,000,000.00 | 50,000,000.00 |
| Lujiazui International Trust Co., Ltd. | 650,000,000.00 | 700,000,000.00 |
| Minmetals International Trust Co., Ltd. | 450,000,000.00 | |
| Huaneng Guicheng Trust Co., Ltd. | 300,000,000.00 | 300,000,000.00 |
| China Railway Trust Co., Ltd. | 250,000,000.00 | |
| Shaanxi International Trust Co., Ltd. | 200,000,000.00 | |
| China Fortune International Trust Co., Ltd. | 50,000,000.00 | |
| Everbright Xinglong Trust Co., Ltd. | 50,000,000.00 | |
| Shanghai International Trust Co., Ltd. | 30,000,000.00 |
| Subtotal | 4,617,000,000.00 | 1,260,000,000.00 |
(4) Asset management plan
| Securities firm | Closing amount | Opening amount |
| Shanghai Everbright Securities Asset Management Co., Ltd. | 1,800,000,000.00 | 1,720,000,000.00 |
| Founder Securities Co., Ltd. | 800,000,000.00 | 300,000,000.00 |
| Huafu Securities Co., Ltd. | 550,000,000.00 | 200,000,000.00 |
| Soochow Securities Co., Ltd. | 530,000,000.00 | |
| Southwest Securities Co., Ltd. | 350,000,000.00 | |
| Shanghai Guotai Junan Securities Asset Management Co., Ltd. | 100,000,000.00 | |
| Changjiang Securities (Shanghai) Asset Management Co., Ltd. | 50,000,000.00 | |
| Shanghai Haitong Securities Asset Management Co., Ltd. | 1,000,000,000.00 | |
| Shanghai Yongxing Securities Asset Management Co., Ltd. | 200,000,000.00 | |
| Subtotal | 4,180,000,000.00 | 3,420,000,000.00 |
(5) Securities return voucher
| Securities firm | Closing amount | Opening amount |
| Founder Securities Co., Ltd. | 100,000,000.00 | |
| Industrial Securities Co., Ltd. | 50,000,000.00 | 50,000,000.00 |
| Southwest Securities Co., Ltd. | 50,000,000.00 | |
| Sinolink Securities Co., Ltd. | 50,000,000.00 | 50,000,000.00 |
| Caitong Securities Co., Ltd. | 50,000,000.00 | 130,000,000.00 |
| Everbright Securities Co., Ltd. | 120,000,000.00 | |
| Subtotal | 300,000,000.00 | 350,000,000.00 |
3. Derivative financial assets
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Hedge instruments - commodity future contract | 8,263,755.00 | 643,100.00 |
| Total | 8,263,755.00 | 643,100.00 |
Other notes:
The Company hedged raw materials such as copper and plastic particles purchased, performedaccounting treatment as cash flow hedges, and recorded the profit on the book in the derivative financialassets.
4. Notes receivable
(1) Notes receivable listed by category
□Applicable√Not applicable
(2) Breakdown by method of establishing bad debt provisions
√Applicable□Not applicable
Unit: RMB
| Type | Closing balance | Opening balance | ||||||||
| Gross amount | Bad debt provision | Carrying amount | Gross amount | Bad debt provision | Carrying amount | |||||
| Amount | Percentage (%) | Amount | Provision percentage (%) | Amount | Percentage (%) | Amount | Provision percentage (%) | |||
| Bad debt provision established on an individual basis | 3,712,829.75 | 100.00 | 3,712,829.75 | 100.00 | 3,712,829.75 | 100.00 | 3,712,829.75 | 100.00 | ||
| Of which: | ||||||||||
| Bank acceptance notes | ||||||||||
| Trade acceptance notes | 3,712,829.75 | 100.00 | 3,712,829.75 | 100.00 | 3,712,829.75 | 100.00 | 3,712,829.75 | 100.00 | ||
| Bad debt provision established on a grouping basis | ||||||||||
| Of which: | ||||||||||
| Bank acceptance notes | ||||||||||
| Trade acceptance notes | ||||||||||
| Total | 3,712,829.75 | 100.00 | 3,712,829.75 | 100.00 | 3,712,829.75 | 100.00 | 3,712,829.75 | 100.00 | ||
Bad debt provision established on an individual basis:
√Applicable□Not applicable
Unit: RMB
| Name | Closing balance |
| Gross amount | Bad debt provision | Provision percentage (%) | Reason for provision | |
| Sunac Real Estate Group Co., Ltd. | 3,712,829.75 | 3,712,829.75 | 100.00 | Significant impairment risk expected |
| Total | 3,712,829.75 | 3,712,829.75 | 100.00 | / |
Notes to bad debt provision established on an individual basis:
√Applicable□Not applicable
Note: Sunac Real Estate Group Co., Ltd. referred to the ultimate note issuers that were controlled by SunacReal Estate Group.
Bad debt provision established on a grouping basis:
□Applicable√Not applicable
Bad debt provision established using the general model of expected credit loss
□Applicable√Not applicable
Significant change in the gross amount of a note receivable with change in loss provision in the period:
□Applicable√Not applicable
(3) Bad debt provision
√Applicable□Not applicable
Unit: RMB
| Type | Opening balance | Changes for the current period | Closing balance | |||
| Established | Reversed or transferred-back | Charged-off/Written-off | Other changes | |||
| Bad debt provision established on an individual basis | 3,712,829.75 | 3,712,829.75 | ||||
| Bad debt provision established on a grouping basis | ||||||
| Total | 3,712,829.75 | 3,712,829.75 | ||||
Of which significant amount of recovered or transferred-back bad debt provision for the current period:
□Applicable√Not applicable
5. Accounts receivable
(1) Breakdown by aging
√Applicable□Not applicable
Unit: RMB
| Aging | Closing gross amount | Opening gross amount |
| Within 1 year | ||
| Of which: Sub-items within 1 year | ||
| Within 1 year | 273,476,497.96 | 233,008,605.06 |
| Subtotal within 1 year | 273,476,497.96 | 233,008,605.06 |
| 1 to 2 years | 7,866,907.10 | 5,456,955.48 |
| 2 to 3 years | 3,459,391.51 | 1,078,528.87 |
| Over 3 years | 6,542,888.61 | 6,932,922.28 |
| Total | 291,345,685.18 | 246,477,011.69 |
(2) Breakdown by method of establishing bad debt provisions
√Applicable□Not applicable
Unit: RMB
| Type | Closing balance | Opening balance | ||||||||
| Gross amount | Bad debt provision | Carrying amount | Gross amount | Bad debt provision | Carrying amount | |||||
| Amount | Percentage (%) | Amount | Provision percentage (%) | Amount | Percentage (%) | Amount | Provision percentage (%) | |||
| Bad debt provision established on an individual basis | 4,182,353.15 | 1.44 | 4,182,353.15 | 100.00 | ||||||
| Of which: | ||||||||||
| Bad debt provision established on a grouping basis | 287,163,332.03 | 98.56 | 22,408,898.28 | 7.80 | 264,754,433.75 | 246,477,011.69 | 100.00 | 19,668,312.50 | 7.98 | 226,808,699.19 |
| Of which: | ||||||||||
| Total | 291,345,685.18 | 100.00 | 26,591,251.43 | 9.13 | 264,754,433.75 | 246,477,011.69 | 100.00 | 19,668,312.50 | 7.98 | 226,808,699.19 |
Bad debt provision established on an individual basis:
□Applicable√Not applicable
Bad debt provision established on a grouping basis:
√Applicable□Not applicable
Unit: RMB
| Name | Closing balance | ||
| Accounts receivable | Bad debt provision | Provision percentage (%) | |
| Within 1 year | 271,595,825.88 | 13,579,791.30 | 5.00 |
| 1 to 2 years | 5,565,226.03 | 556,522.60 | 10.00 |
| 2 to 3 years | 3,459,391.51 | 1,729,695.77 | 50.00 |
| Over 3 years | 6,542,888.61 | 6,542,888.61 | 100.00 |
| Total | 287,163,332.03 | 22,408,898.28 | 7.80 |
Notes to bad debt provision established on a grouping basis:
□Applicable√Not applicable
Bad debt provision established using the general model of expected credit loss
□Applicable√Not applicable
Significant change in the gross amount of an account receivable with change in loss provision in the period:
□Applicable√Not applicable
(3) Bad debt provision
√Applicable□Not applicable
Unit: RMB
| Type | Opening balance | Changes for the current period | Closing balance | |||
| Established | Recovered or reversed | Transferred or written-off | Other changes | |||
| Bad debt provision established on a grouping basis | 19,668,312.50 | 4,288,482.82 | 1,547,897.04 | 22,408,898.28 | ||
| Bad debt provision established on an individual basis | 4,182,353.15 | 4,182,353.15 | ||||
| Total | 19,668,312.50 | 8,470,835.97 | 1,547,897.04 | 26,591,251.43 | ||
Of which significant amount of recovered or transferred-back bad debt provision for the current period:
□Applicable√Not applicable
(4) Top five entities with respect to accounts receivable and contract assets
√Applicable □Not applicable
Unit: RMB
| Entity | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assts combined | As % of the closing balance of total accounts receivable and contract assts combined | Closing balance of bad debt provision |
| Beijing Jingdong Century Trading Co., Ltd. | 78,489,962.66 | 26.94 | 3,924,498.13 | ||
| Alpha. Ltd | 14,387,019.84 | 4.94 | 719,350.99 | ||
| Zhejiang TMALL Technology Co., Ltd. | 11,041,168.49 | 3.79 | 552,058.42 | ||
| Shenzhen Oushangte Technology Co., Ltd. | 7,040,593.45 | 2.42 | 352,029.67 | ||
| Belkin International, Inc | 6,371,890.78 | 2.19 | 318,594.54 | ||
| Total | 117,330,635.22 | 40.28 | 5,866,531.75 |
Other notes:
□Applicable √Not applicable
6. Receivables financing
(1) Breakdown of receivables financing
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Bank acceptance notes | 5,359,014.96 | 1,036,801.70 |
| Total | 5,359,014.96 | 1,036,801.70 |
7. Prepayments
(1) Breakdown of prepayments by aging
√Applicable □Not applicable
Unit: RMB
| Aging | Closing balance | Opening balance | ||
| Amount | Percentage (%) | Amount | Percentage (%) | |
| Within 1 year | 55,113,449.56 | 98.02 | 48,536,368.53 | 97.79 |
| 1 to 2 years | 927,511.80 | 1.65 | 955,431.40 | 1.92 |
| 2 to 3 years | 158,328.10 | 0.28 | 101,394.68 | 0.20 |
| Over 3 years | 30,644.49 | 0.05 | 42,500.00 | 0.09 |
| Total | 56,229,933.95 | 100.00 | 49,635,694.61 | 100.00 |
Reason for outstanding prepayments that are over 1 year and of a substantial amount:
None.
(2) Top five entities with respect to prepayments
√Applicable □Not applicable
| Entity | Closing balance | As % of the closing balance of total prepayments |
| Guangxi Jingdong Qingchuan E-commerce Co., Ltd. | 8,774,619.05 | 15.60 |
| State Grid Zhejiang Electric Power Co., Ltd. Cixi Power Supply Company | 6,058,053.53 | 10.77 |
| Hangzhou Alimama Software Service Co., Ltd. | 4,166,954.20 | 7.41 |
| Beijing Jiahe Jingshi Culture Media Co., Ltd. | 2,830,188.68 | 5.03 |
| Ningbo Funde Energy Co., Ltd. | 2,740,187.64 | 4.87 |
| Total | 24,570,003.10 | 43.68 |
Other notes
□Applicable √Not applicable
8. Other receivables
Breakdown
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Interests receivable | ||
| Dividends receivable | ||
| Other receivables | 11,433,179.13 | 71,887,692.32 |
| Total | 11,433,179.13 | 71,887,692.32 |
Other notes:
□Applicable√Not applicable
Other receivables
(1) Breakdown by aging
√Applicable□Not applicable
Unit: RMB
| Aging | Closing gross amount | Opening gross amount |
| Within 1 year | ||
| Of which: Sub-items within 1 year | ||
| Within 1 year | 6,237,495.11 | 13,221,675.68 |
| Subtotal within 1 year | 6,237,495.11 | 13,221,675.68 |
| 1 to 2 years | 5,865,665.18 | 5,000,909.07 |
| 2 to 3 years | 2,356,920.27 | 111,402,564.49 |
| Over 3 years | 111,890,639.86 | 4,575,618.48 |
| Total | 126,350,720.42 | 134,200,767.72 |
(2) Breakdown by nature
√Applicable□Not applicable
Unit: RMB
| Nature | Closing gross amount | Opening gross amount |
| Call money | 110,000,000.00 | 110,000,000.00 |
| Housing loan for employees | 6,447,164.88 | 12,466,303.78 |
| Guaranteed deposit | 7,915,806.25 | 8,486,128.40 |
| Others | 1,987,749.29 | 3,248,335.54 |
| Total | 126,350,720.42 | 134,200,767.72 |
(3) Bad debt provision
√Applicable□Not applicable
Unit: RMB
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month expected credit loss | Lifetime expected credit loss (without credit impairment) | Lifetime expected credit loss (with credit impairment) | ||
| Balance of 1 January 2023 | 1,111,083.75 | 925,090.91 | 60,276,900.74 | 62,313,075.40 |
| Balance of 1 January 2023 in the Current Period | 1,111,083.75 | 925,090.91 | 60,276,900.74 | 62,313,075.40 |
| - Transferred to Stage 2 | -293,283.26 | 293,283.26 | ||
| - Transferred to Stage 3 | -235,692.03 | 235,692.03 | ||
| - Transferred back to Stage 2 | ||||
| - Transferred back to Stage 1 | ||||
| Amount accrued for the current period | -505,925.74 | 53,884.38 | 53,056,507.25 | 52,604,465.89 |
| Amount transferred-back for the current period | ||||
| Amount charged-off for the |
| current period | ||||
| Amount written-off for the current period | ||||
| Other changes | ||||
| Balance as at 31 December 2023 | 311,874.75 | 1,036,566.52 | 113,569,100.02 | 114,917,541.29 |
Significant change in the gross amount of an other receivable with change in loss provision in the period:
□Applicable√Not applicable
Basis for a significant increase in a bad debt provision and the credit risk of a financial instrument in thecurrent period:
□Applicable√Not applicable
(4) Bad debt provision
√Applicable□Not applicable
Unit: RMB
| Type | Opening balance | Changes for the current period | Closing balance | |||
| Established | Reversed or transferred-back | Charged-off/Written-off | Other changes | |||
| Bad debt provision established on an individual basis | 55,500,000.00 | 55,000,000.00 | 110,500,000.00 | |||
| Bad debt provision established on a grouping basis | 6,813,075.40 | -2,395,534.11 | 4,417,541.29 | |||
| Total | 62,313,075.40 | 52,604,465.89 | 114,917,541.29 | |||
Of which the bad debt provision recovered or transferred-back with significant amount during thecurrent period:
□Applicable√Not applicable
(5) Top five entities with respect to other receivables
√Applicable□Not applicable
Unit: RMB
| Entity | Closing balance | As % of the closing balance of total other receivables | Nature of other receivable | Aging | Closing balance of bad debt provision |
| Sunac Real Estate Group Co., Ltd. | 110,000,000.00 | 87.06 | Call money | Over 3 years | 110,000,000.00 |
| Changzhou Pa’erlingke Intelligent Lifting Lighting Equipment Co., Ltd. | 1,099,532.00 | 0.87 | Payment for goods | Over 3 years | 1,099,532.00 |
| Beijing Jingdong Century Trading Co., Ltd. | 750,000.00 | 0.59 | Security deposit | Within 1 year | 37,500.00 |
| Zhejiang Tmall Technology Co., Ltd. | 643,617.22 | 0.51 | Security deposit | Within 1 year | 32,180.86 |
| Shanghai Mehood Hotel Management Co., Ltd. | 500,000.00 | 0.40 | Security deposit | 1-2 years | 500,000.00 |
| Total | 112,993,149.22 | 89.43 | / | / | 111,669,212.86 |
[Note] The loan was provided by the Company's subsidiary Electric Sales to Sunac Real Estate GroupCo., Ltd. Inclusive of seven of its subsidiaries in order to expand its sales to Sunac Group in the principalamount of RMB110,000,000.00 for a period of two years, which was guaranteed by Sunac Group.
9. Inventories
(1) Category of inventories
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Gross amount | Inventory valuation allowances or impairment allowances for contract performance costs | Carrying amount | Gross amount | Inventory valuation allowances or impairment allowances for contract performance costs | Carrying amount | |
| Finished goods | 852,787,019.73 | 19,542,429.66 | 833,244,590.07 | 673,207,187.70 | 14,761,249.29 | 658,445,938.41 |
| Goods in transit | 269,047,594.97 | 269,047,594.97 | 293,819,050.68 | 293,819,050.68 | ||
| Raw materials | 109,031,530.45 | 3,757,832.62 | 105,273,697.83 | 113,937,083.04 | 113,937,083.04 | |
| Work-in-progress | 165,210,953.31 | 165,210,953.31 | 160,824,141.92 | 160,824,141.92 | ||
| Commissioned products | 32,755,034.14 | 32,755,034.14 | 41,122,518.19 | 41,122,518.19 | ||
| Low-value consumables | 7,979,087.01 | 7,979,087.01 | 9,948,213.19 | 9,948,213.19 | ||
| Packaging material | 7,567,102.11 | 7,567,102.11 | 7,121,510.66 | 7,121,510.66 | ||
| Total | 1,444,378,321.72 | 23,300,262.28 | 1,421,078,059.44 | 1,299,979,705.38 | 14,761,249.29 | 1,285,218,456.09 |
(2) Inventory valuation allowances and impairment allowances for contract performance costs
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Established | Others | Reversed or charged off | Others | |||
| Finished goods | 14,761,249.29 | 13,753,599.47 | 8,972,419.10 | 19,542,429.66 | ||
| Raw materials | 3,757,832.62 | 3,757,832.62 | ||||
| Total | 14,761,249.29 | 17,511,432.09 | 8,972,419.10 | 23,300,262.28 | ||
Reasons for charge-off/write-off of inventory valuation provisions in the current period:
√Applicable□Not applicable
| Item | The specific basis for determining the net realizable value | Reasons for transferred-backing the reserve for inventory shrinkage | Reasons for charged-off the reserve for inventory shrinkage |
| Raw materials | Realizable net value determined by deducting estimated selling price of related finished products from estimated cost to completion, estimated selling expenses, and related taxes | Realizable net value of inventory for which impairment reserves were previously recognised increased during the period | Inventory for which impairment reserves were previously recognised was consumed/sold during the current period |
| Finished goods | The net realizable value is determined by estimated selling price deducting the estimated selling expense and the relevant taxes | Realizable net value of inventory for which impairment reserves were previously recognised increased during the period | Inventory for which impairment reserves were previously recognised was consumed/sold during the current period |
Inventory valuation allowances established on a grouping basis:
□Applicable√Not applicable
Basis for establishing inventory valuation allowances on a grouping basis:
□Applicable√Not applicable
10. Other current assets
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Contract acquisition costs | ||
| Refund costs receivable | ||
| Wealth management products | 50,265,479.45 | 283,755,939.73 |
| Input VAT to be credited | 44,858,276.65 | 63,937,448.75 |
| Advance payment of enterprise income tax | 14,858,628.96 | 16,132,038.41 |
| Total | 109,982,385.06 | 363,825,426.89 |
Other notes:
Details of WM products:
| Item | Closing balance | Opening balance | Type |
| Structured deposit of Ningbo Bank | 50,000,000.00 | 150,000,000.00 | Structured bank deposit |
| Yangguangbi Jigouying of Everbright Bank | 10,000.00 | 10,000.00 | Fixed income |
| Return voucher of Founder Securities | 100,000,000.00 | Fixed income | |
| Structured deposit of China Merchants Bank | 30,000,000.00 | Structured bank deposit | |
| Interest on structured bank deposits | 255,479.45 | 3,745,939.73 | |
| Total | 50,265,479.45 | 283,755,939.73 |
11. Fixed assets
Breakdown
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Fixed assets | 1,981,807,551.42 | 1,851,129,657.93 |
| Fixed assets disposed of | 4,361,393.61 | 3,364,852.64 |
| Total | 1,986,168,945.03 | 1,854,494,510.57 |
Other notes:
√Applicable□Not applicable
1) Schedule
| Item | Buildings and constructions | Machinery equipment | Transportation vehicle | Electronic and other equipment | Decoration of the fixed assets | Total |
| I Gross amount: | ||||||
| 1. Opening balance | 1,605,846,858.69 | 1,035,514,604.00 | 34,189,267.41 | 149,783,413.04 | 68,545,313.62 | 2,893,879,456.76 |
| 2. Increase in the current period | 184,676,907.08 | 165,236,256.15 | 1,245,554.04 | 20,796,926.33 | 9,393,775.02 | 381,349,418.62 |
| (1) Purchased | 56,951,149.08 | 21,407,351.89 | 1,245,554.04 | 6,445,625.69 | 605,555.97 | 86,655,236.67 |
| (2) Transfer from construction in progress | 127,725,758.00 | 143,828,904.26 | 14,351,300.64 | 8,788,219.05 | 294,694,181.95 | |
| 3. Decrease in the current period | 67,557,139.56 | 1,972,484.87 | 6,440,948.80 | 649,658.49 | 76,620,231.72 | |
| (1) Disposal or retirement | 67,557,139.56 | 1,972,484.87 | 6,440,948.80 | 649,658.49 | 76,620,231.72 | |
| 4. Closing balance | 1,790,523,765.77 | 1,133,193,720.59 | 33,462,336.58 | 164,139,390.57 | 77,289,430.15 | 3,198,608,643.66 |
| II Accumulated depreciation | ||||||
| 1. Opening balance | 303,349,247.38 | 530,004,540.52 | 32,585,039.05 | 120,306,218.02 | 51,289,287.89 | 1,037,534,332.86 |
| 2. Increase in the current period | 71,453,026.70 | 136,382,138.35 | 2,066,676.20 | 21,400,270.53 | 10,215,113.16 | 241,517,224.94 |
| (1) Established | 71,453,026.70 | 136,382,138.35 | 2,066,676.20 | 21,400,270.53 | 10,215,113.16 | 241,517,224.94 |
| 3. Decrease in the current period | 58,136,366.67 | 1,859,529.51 | 6,332,013.80 | 516,723.65 | 66,844,633.63 | |
| (1) Disposal or retirement | 58,136,366.67 | 1,859,529.51 | 6,332,013.80 | 516,723.65 | 66,844,633.63 | |
| 4. Closing balance | 374,802,274.08 | 608,250,312.20 | 32,792,185.74 | 135,374,474.75 | 60,987,677.40 | 1,212,206,924.17 |
| III Impairment allowances | ||||||
| 1. Opening balance | 4,595,825.79 | 619,640.18 | 5,215,465.97 | |||
| 2. Increase in the current period | ||||||
| 3. Decrease in the current period | 618,451.64 | 2,846.26 | 621,297.90 | |||
| (1) Disposal or retirement | 618,451.64 | 2,846.26 | 621,297.90 | |||
| 4. Closing balance | 3,977,374.15 | 616,793.92 | 4,594,168.07 | |||
| IV Carrying amount | ||||||
| 1. Closing carrying amount | 1,415,721,491.69 | 520,966,034.24 | 670,150.84 | 28,148,121.90 | 16,301,752.75 | 1,981,807,551.42 |
| 2. Opening carrying amount | 1,302,497,611.31 | 500,914,237.69 | 1,604,228.36 | 28,857,554.84 | 17,256,025.73 | 1,851,129,657.93 |
2) Fixed assets leased out under operating leases
| Item | Closing carrying amount |
| Buildings and constructions | 2,293,354.34 |
| Subtotal | 2,293,354.34 |
3) Fixed assets with pending ownership certificate
| Item | Carrying amount | Reason for not obtaining ownership certificate |
| A technology information company in Room 301 and others, Building 7, Zone A, Yinggang East Road, Zhao Xiang Town | 260,040,799.00 | Delivered and procedures are in process |
| The 3# Factory in the Western Base of the Company and ancillary works | 206,768,408.10 | Information needs to be changed, and ownership certificate needs to be replaced |
| The 1# Factory and ancillary works in Cidong Precision Manufacturing Base of the Company | 77,216,332.11 | Information needs to be changed, and ownership certificate needs to be replaced |
| Subtotal | 544,025,539.21 |
Fixed assets disposed of
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Scrapped machinery equipment yet to be completely disposed | 4,361,393.61 | 3,364,852.64 |
| Total | 4,361,393.61 | 3,364,852.64 |
12. Construction in progress
Construction in progress
(1) Details of construction in progress
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Gross amount | Impairment allowances | Carrying amount | Gross amount | Impairment allowances | Carrying amount | |
| R&D centre and headquarters base construction project | 276,146,641.36 | 276,146,641.36 | 212,491,009.57 | 212,491,009.57 | ||
| Base construction project for annual output of 410 million sets of wall switches and sockets | 182,584,672.19 | 182,584,672.19 | 130,109,662.81 | 130,109,662.81 | ||
| Ningbo Goneo | 171,044,303.30 | 171,044,303.30 | 65,201,429.24 | 65,201,429.24 | ||
| Longshan Community construction project | ||||||
| Base construction project for annual output of 180 million sets of LED lamps | 107,721,542.79 | 107,721,542.79 | 146,348,397.94 | 146,348,397.94 | ||
| Information technology promotion project | 3,371,026.55 | 3,371,026.55 | 2,814,215.88 | 2,814,215.88 | ||
| Construction project for automation upgrading of annual output of 400 million sets of adaptors | 20,761,287.51 | 20,761,287.51 | ||||
| Equipment to be installed | 36,630,850.28 | 36,630,850.28 | 22,521,969.18 | 22,521,969.18 | ||
| Other miscellaneous projects | 29,086,422.09 | 29,086,422.09 | 11,209,878.41 | 11,209,878.41 | ||
| Total | 806,585,458.56 | 806,585,458.56 | 611,457,850.54 | 611,457,850.54 |
(2) Changes in significant construction in progress during the current period
√Applicable□Not applicable
Unit: RMB
| Project | Budget | Period-beginning balance | Increase in the current period | Transferred to fixed assets in the current period | Other decreases in the current period | Period-end balance | Cumulative project investment as % of the budget | Project progress (%) | Cumulative capitalised interest | Of which: Capitalised interest in the current period | Interest capitalisation rate for the current period (%) | Funding source |
| R&D centre and headquarters base construction project | 708,225,600.00 | 212,491,009.57 | 67,969,770.98 | 4,314,139.19 | 276,146,641.36 | 90.16 | 90.00 | Raised funds | ||||
| Base construction project for annual output of 180 million sets of LED lamps | 743,810,500.00 | 146,348,397.94 | 92,986,257.34 | 131,613,112.49 | 107,721,542.79 | 29.86 | 35.00 | Raised funds | ||||
| Base construction project for annual output of 410 million sets of wall switches and sockets | 1,204,528,600.00 | 130,109,662.81 | 68,787,053.37 | 16,312,043.99 | 182,584,672.19 | 42.32 | 45.00 | Raised funds | ||||
| Ningbo Goneo Longshan Community construction project | 278,500,000.00 | 65,201,429.24 | 105,842,874.06 | 171,044,303.30 | 61.95 | 65.00 | Own funds | |||||
| Information technology promotion project | 240,350,000.00 | 2,814,215.88 | 1,743,276.54 | 1,186,465.87 | 3,371,026.55 | 45.93 | 50.00 | Raised funds |
| Construction project for automation upgrading of annual output of 400 million sets of adaptors | 999,036,300.00 | 20,761,287.51 | 36,784,559.88 | 57,545,847.39 | 81.24 | 100.00 | Raised funds | |||||
| Equipment to be installed | 22,521,969.18 | 92,238,759.97 | 78,129,878.87 | 36,630,850.28 | Own funds | |||||||
| Total | 4,174,451,000.00 | 600,247,972.13 | 466,352,552.14 | 289,101,487.80 | 777,499,036.47 | / | / | / | / |
13. Right-of-use assets
(1) Details of right-of-use assets
√Applicable□Not applicable
Unit: RMB
| Item | Buildings and constructions | Total |
| I Gross amount | ||
| 1. Opening balance | 36,547,808.12 | 36,547,808.12 |
| 2. Increase in the current period | 22,613,890.22 | 22,613,890.22 |
| (1) Rent | 22,613,890.22 | 22,613,890.22 |
| (2) Increase through consolidation | ||
| 3. Decrease in the current period | 23,439,710.77 | 23,439,710.77 |
| (1) Disposed amount | 23,439,710.77 | 23,439,710.77 |
| 4. Closing balance | 35,721,987.57 | 35,721,987.57 |
| II Accumulated depreciation | ||
| 1. Opening balance | 23,235,100.55 | 23,235,100.55 |
| 2. Increase in the current period | 13,680,373.05 | 13,680,373.05 |
| (1) Accrued amount | 13,680,373.05 | 13,680,373.05 |
| 3. Decrease in the current period | 19,995,937.92 | 19,995,937.92 |
| (1) Disposal | 19,995,937.92 | 19,995,937.92 |
| 4. Closing balance | 16,919,535.68 | 16,919,535.68 |
| III Impairment allowances | ||
| 1. Opening balance | ||
| 2. Increase in the current period | ||
| (1) Accrued amount | ||
| 3. Decrease in the current period | ||
| (1) Disposal | ||
| 4. Closing balance | ||
| IV Carrying amount | ||
| 1. Closing carrying amount | 18,802,451.89 | 18,802,451.89 |
| 2. Opening carrying amount | 13,312,707.57 | 13,312,707.57 |
(2) Impairment tests of right-of-use assets
□Applicable√Not applicable
Determination of the net recoverable amount (fair value less costs of disposal):
□Applicable√Not applicable
Determination of the recoverable amount based on the present value of the expected future cashflow:
□Applicable√Not applicable
Reasons for significant inconsistency between the above-mentioned information and theinformation adopted in the impairment tests in the prior year or external information:
□Applicable√Not applicable
Reasons for significant inconsistency between the information adopted in the impairment tests inthe prior year and the actual situation in the year:
□Applicable√Not applicable
14. Intangible assets
(1) Details of intangible assets
√Applicable □Not applicable
Unit: RMB
| Item | Land use rights | Patent rights | Non-patented technologies | Software | Patent and know-how | Total |
| I Gross amount | ||||||
| 1. Opening balance | 356,739,324.07 | 90,754,870.46 | 30,283,018.69 | 477,777,213.22 | ||
| 2. Increase in the current period | 27,830,600.00 | 753,214.67 | 28,583,814.67 | |||
| (1) Purchased | 27,830,600.00 | 753,214.67 | 28,583,814.67 | |||
| (2) Developed internally | ||||||
| (3) Increase through business combination | ||||||
| 3. Decrease in the current period | 280,041.38 | 280,041.38 | ||||
| (1) Disposal | 280,041.38 | 280,041.38 | ||||
| 4. Closing balance | 384,569,924.07 | 91,228,043.75 | 30,283,018.69 | 506,080,986.51 | ||
| II Accumulated depreciation | ||||||
| 1. Opening balance | 46,953,887.48 | 74,815,020.87 | 30,283,018.69 | 152,051,927.04 | ||
| 2. Increase in the current period | 7,215,511.89 | 12,275,393.05 | 19,490,904.94 | |||
| (1) Established | 7,215,511.89 | 12,275,393.05 | 19,490,904.94 | |||
| 3. Decrease in the current period | 279,818.18 | 279,818.18 | ||||
| (1) Disposal | 279,818.18 | 279,818.18 | ||||
| 4. Closing balance | 54,169,399.37 | 86,810,595.74 | 30,283,018.69 | 171,263,013.80 | ||
| III Impairment allowances | ||||||
| 1. Opening balance | ||||||
| 2. Increase in | ||||||
| the current period | ||||||
| (1) Established | ||||||
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| 4. Closing balance | ||||||
| IV Carrying amount | ||||||
| 1. Closing carrying amount | 330,400,524.70 | 4,417,448.01 | 334,817,972.71 | |||
| 2. Opening carrying amount | 309,785,436.59 | 15,939,849.59 | 325,725,286.18 | |||
The proportion of intangible assets developed internally by the Company at the period-end to the closingbalance of intangible assets is 0.
15. Goodwill
(1) Gross amount of goodwill
√Applicable□Not applicable
Unit: RMB
| Investee or item generating goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Generated due to business combination | Disposal | |||||
| Dalitek | 45,133,442.04 | 45,133,442.04 | ||||
| Total | 45,133,442.04 | 45,133,442.04 | ||||
(2) Impairment allowances for goodwill
√Applicable□Not applicable
Unit: RMB
| Investee or item generating goodwill | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Established | Disposal | |||||
| Dalitek | 45,133,442.04 | 45,133,442.04 | ||||
| Total | 45,133,442.04 | 45,133,442.04 | ||||
(3) Information on the asset group or combination of asset groups to which goodwill is apportioned
√Applicable□Not applicable
| Name | Composition and basis of the asset group or combination of asset | Operating segment to which it belongs and basis | Whether it is consistent with that of the prior years |
| groups to which it belongs | |||
| Dalitek assets group | Dalitek’s relevant operating assets and liabilities/The assets group can generate cash flows independently | Shanghai segment/division | Yes |
Changes in the assets group or combination of assets groups
□Applicable √Not applicable
Other notes:
√Applicable □Not applicable
Approaches to calculating recoverable amounts:
| Item | Carrying value of asset group or asset group combination containing goodwill | Recoverable amount | Impairment accrued during the current period |
| Dalitek assets group | 97,849,430.93 | 31,438,746.96 | 45,133,442.04 |
| Subtotal | 97,849,430.93 | 31,438,746.96 | 45,133,442.04 |
(Continued)
| Item | Forecast period | Parameters of the forecast period, such as revenue growth rate and profit rate, and relevant evidence to determine them | Parameters of the stable period, including growth rate and profit rate, and relevant evidence to determine them | Discount rate and relevant evidence to determine it |
| Dalitek assets group | The next five years | Determination based on the Company's operating performance in previous years, growth rate, industrial development level, and the management's prediction about the market development | Consistent with the figures of the final year during the forecast period | Determination according to adjustments based on the weighted average cost of capital (WACC) |
| Subtotal |
(4) Performance commitments and corresponding goodwill impairment
When goodwill is formed, there is a commitment to the results and the Reporting Period or the periodpreceding the Reporting Period is within the commitment period
√Applicable □Not applicable
Unit: RMB
| Item | Performance commitment fulfilment status | Impairment amount in the previous period |
| Current period | Previous period | Current period | Previous period | |||||
| Committed results | Actual results | Completion rate (%) | Committed results | Actual results | Completion rate (%) | |||
| Dalitek | 95,610,240.00 | 43,910,717.81 | 45.93 | 79,675,200.00 | 53,135,968.72 | 66.69 | 45,133,442.04 | |
| Subtotal | 95,610,240.00 | 43,910,717.81 | 45.93 | 79,675,200.00 | 53,135,968.72 | 66.69 | 45,133,442.04 | |
Note: The above results are for the current year's revenue from main operations.
Other notes:
□Applicable√Not applicable
16. Long-term prepaid expense
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Amortisation in the current period | Other decreases | Closing balance |
| 2020 Special Talent Shareholding Plan | 19,172,452.61 | 9,835,655.00 | 7,145,058.80 | 21,863,048.81 | |
| Payment for fixtures | 1,191,778.17 | 767,160.08 | 1,056,294.82 | 902,643.43 | |
| Total | 20,364,230.78 | 10,602,815.08 | 8,201,353.62 | 22,765,692.24 |
Other notes:
For details of the 2020 Special Talent Shareholding Plan, please refer to “6. Other information” under“XV Share-based Payments” of “Part X Financial Statements” herein.
17. Deferred income tax assets/Deferred income tax liabilities
(1) Deferred income tax assets before offsetting
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Discount on sale accrued in advance | 357,643,266.34 | 89,410,816.58 | 215,847,304.76 | 53,961,826.18 |
| Unrealised profit of internal transactions | 271,313,758.99 | 67,271,169.94 | 252,930,292.22 | 62,732,294.01 |
| Restricted share incentive plan | 94,025,510.93 | 16,173,194.84 | 75,629,104.14 | 12,895,430.16 |
| Bad debt provisions | 18,191,268.29 | 4,546,678.09 | 12,807,769.56 | 2,837,063.79 |
| Inventory valuation allowances | 16,718,107.31 | 2,999,271.21 | 11,405,652.18 | 2,113,928.17 |
| 2020 Special Talent Shareholding Plan | 6,812,580.85 | 1,135,364.21 | 5,153,783.46 | 865,523.02 |
| Lease liabilities | 13,236,198.11 | 2,994,334.16 | 6,788,398.74 | 1,423,636.74 |
| Deductible losses | 3,851,266.00 | 962,816.50 | ||
| Deferred income | 53,820,328.00 | 8,073,049.20 | ||
| Total | 781,791,956.82 | 185,493,645.53 | 634,382,633.06 | 144,902,751.27 |
(2) Deferred income tax liabilities before offsetting
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Increase in valuation of assets obtained in a business combination not involving entities under common control | ||||
| Changes in the fair value of other debt investments | ||||
| Changes in the fair value of other equity investments | ||||
| Depreciation policy on fixed assets subject to tax variances | 397,854,112.55 | 68,629,693.19 | 340,139,021.71 | 54,854,169.49 |
| Gain and loss of hedge instrument included in the other comprehensive income | 5,817,762.23 | 1,454,440.56 | ||
| Right-of-use assets | 15,382,655.83 | 3,536,657.20 | 7,136,392.05 | 1,513,382.32 |
| Total | 413,236,768.38 | 72,166,350.39 | 353,093,175.99 | 57,821,992.37 |
(3) Schedule of deferred income tax assets unrecognised
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Deductible temporary differences | 119,511,709.36 | 88,836,167.52 |
| Deductible losses | 35,440,787.99 | 37,516,651.15 |
| Total | 154,952,497.35 | 126,352,818.67 |
(4) Deductible losses on which deferred income tax assets were unrecognised will expire in thefollowing years
√Applicable□Not applicable
Unit: RMB
| Year | Closing balance | Opening balance | Remark |
| 2026 | 5,998,535.59 | ||
| 2027 | 31,518,115.56 | ||
| 2028 | 35,440,787.99 | ||
| Total | 35,440,787.99 | 37,516,651.15 | / |
Other notes:
□Applicable√Not applicable
18. Other non-current assets
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Gross amount | Impairment allowances | Carrying amount | Gross amount | Impairment allowances | Carrying amount | |
| Contract acquisition costs | ||||||
| Contract performance costs | ||||||
| Refund costs receivable | ||||||
| Contract assets | ||||||
| Prepayment for equipment acquisition | 50,181,765.02 | 50,181,765.02 | 57,186,173.77 | 57,186,173.77 | ||
| 2020 Special Talent Shareholding Plan | 9,574,607.00 | 9,574,607.00 | 19,321,842.00 | 19,321,842.00 | ||
| Total | 59,756,372.02 | 59,756,372.02 | 76,508,015.77 | 76,508,015.77 |
19. Assets with restricted ownership or right of use
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||||
| Gross amount | Carrying amount | Type of restriction | Condition of restriction | Gross amount | Carrying amount | Type of restriction | Condition of restriction | |
| Monetary assets | 243,689,624.83 | 243,689,624.83 | Frozen | In pledge for short-term borrowings, and security deposits that cannot be withdrawn on demand | 20,916,287.58 | 20,916,287.58 | Frozen | Security deposits that cannot be withdrawn on demand |
| Notes receivable | ||||||||
| Inventories | ||||||||
| Fixed assets | ||||||||
| Intangible assets | ||||||||
| Total | 243,689,624.83 | 243,689,624.83 | / | / | 20,916,287.58 | 20,916,287.58 | / | / |
20. Short-term borrowings
(1) Category of short-term borrowings
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Borrowings secured by pledge | 200,000,000.00 | |
| Borrowings secured by collateral | ||
| Borrowings secured by guarantee [note] | 5,000,000.00 | 4,000,000.00 |
| Unsecured borrowings | 382,972,102.34 | 840,000,000.00 |
| Interest payable on short-term borrowings | 372,073.67 | 1,374,749.03 |
| Total | 588,344,176.01 | 845,374,749.03 |
Notes of the category for short-term borrowings:
Note: Zhang Wenying, a minority shareholder of Dalitek, and her spouse, Zhou Yun, provided guaranteefor the loan to Dalitek.
21. Held-for-trading financial liabilities
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Closing balance | Recognition basis |
| Held-for-trading financial liabilities | 18,200,000.00 | / | |
| Of which: | |||
| Investment payables | 18,200,000.00 | / | |
| Financial liabilities at fair value through profit or loss | |||
| Of which: | |||
| Total | 18,200,000.00 | / | |
Other notes:
√Applicable□Not applicable
The contingent consideration for the Company's acquisition of Dalitek was RMB27.3 million. Dalitekhas fulfilled the performance commitment in 2021 and the Company paid the contingent consideration ofRMB9.1 million on 2 September 2022; Dalitek's audited revenue in 2022 and 2023 have not met theperformance commitment and the remaining contingent consideration was therefore not payable. Thisreduced the payables for investment by RMB18.2 million and the same amount of income from changesin fair value was recognized in the current period.
22. Accounts payable
(1) Breakdown of accounts payable
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Payment for goods | 1,947,816,314.15 | 1,506,053,347.86 |
| Engineering equipment | 69,305,849.84 | 87,123,159.57 |
| Payment for expense | 39,535,641.41 | 50,485,456.10 |
| Total | 2,056,657,805.40 | 1,643,661,963.53 |
23. Contract liabilities
(1) Details of contract liabilities
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Advance receipt of payment for goods | 528,493,231.61 | 431,654,611.71 |
| Total | 528,493,231.61 | 431,654,611.71 |
24. Employee benefits payable
(1) Breakdown of employee benefits payable
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| I Short-term Benefits | 326,610,564.37 | 2,021,790,969.72 | 1,961,196,188.03 | 387,205,346.06 |
| II After-service Benefits-defined Contribution Schemes | 8,414,094.64 | 125,113,675.01 | 116,078,905.08 | 17,448,864.57 |
| III Severance Benefits | 67,500.00 | 5,996,743.49 | 5,902,166.49 | 162,077.00 |
| IV Other Benefits that are due within 1 year | ||||
| Total | 335,092,159.01 | 2,152,901,388.22 | 2,083,177,259.60 | 404,816,287.63 |
(2) Breakdown of short-term benefits
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| I Salaries, Bonuses, Allowances and Subsidies | 320,756,805.77 | 1,821,618,990.98 | 1,761,947,133.25 | 380,428,663.50 |
| II Staff welfare | 54,208,890.38 | 54,208,890.38 | ||
| III Social Insurance Premiums | 5,736,242.65 | 64,111,980.15 | 63,389,363.48 | 6,458,859.32 |
| Of which: Medical insurance premiums | 5,331,811.11 | 59,780,595.52 | 59,465,480.21 | 5,646,926.42 |
| Work-related injury insurance premiums | 404,431.54 | 4,331,384.63 | 3,923,883.27 | 811,932.90 |
| Maternity insurance | ||||
| IV Housing Allowance | 117,515.95 | 59,040,738.45 | 58,840,431.16 | 317,823.24 |
| V Labour Union Expense and Employee Education Budget | 22,810,369.76 | 22,810,369.76 | ||
| VI Short-term Paid Absence | ||||
| VII Short-term Profit Sharing Plan | ||||
| Total | 326,610,564.37 | 2,021,790,969.72 | 1,961,196,188.03 | 387,205,346.06 |
(3) List of defined contribution plan
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| 1. Basic pension insurance | 8,125,733.17 | 120,404,307.48 | 111,679,190.10 | 16,850,850.55 |
| 2. Unemployment insurance premiums | 288,361.47 | 4,709,367.53 | 4,399,714.98 | 598,014.02 |
| 3. Supplementary pension payment | ||||
| Total | 8,414,094.64 | 125,113,675.01 | 116,078,905.08 | 17,448,864.57 |
Other notes:
□Applicable√Not applicable
25. Taxes and levies payable
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Enterprise income tax | 187,097,927.11 | 203,734,037.13 |
| VAT | 70,436,420.37 | 58,417,765.49 |
| Educational surcharges | 2,308,204.30 | 1,838,024.51 |
| Local educational fee | 1,540,340.20 | 1,225,349.64 |
| Real estate tax | 13,388,952.58 | 10,551,939.19 |
| Land use tax | 4,853,339.15 | 4,827,210.48 |
| Stamp duty | 6,741,966.75 | 8,636,239.12 |
| Personal income tax | 5,465,677.83 | 4,800,514.20 |
| Urban construction and maintenance tax | 3,924,664.19 | 3,173,319.78 |
| Disability allowance | 15,417,409.54 | 3,103,966.10 |
| Vehicle and vessel use tax | 15,943.41 | |
| Total | 311,190,845.43 | 300,308,365.64 |
26. Other payables
(1) Breakdown
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Interest payable | ||
| Dividends payable | ||
| Other payables | ||
| Discount on sale accrued in advance | 357,643,266.34 | 215,847,304.76 |
| Obligations of restricted stock repurchase within one year | 79,475,388.22 | 94,791,611.30 |
| Security deposits | 149,562,097.52 | 90,292,099.16 |
| Accrued expenses | 116,657,943.25 | 44,520,261.35 |
| Temporary receipts and advances payable | 1,722,211.31 | 962,594.28 |
| Total | 705,060,906.64 | 446,413,870.85 |
Other notes:
□Applicable√Not applicable
27. Current portion of non-current liabilities
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Current portion of long-term borrowings | 393,000,000.00 | |
| Current portion of bonds payable | ||
| Current portion of long-term payables | ||
| Lease obligation matured within 1 year | 13,685,200.88 | 8,798,658.13 |
| Current portion of long-term borrowings - interest payable | 274,138.89 | |
| Total | 406,959,339.77 | 8,798,658.13 |
28. Other current liabilities
Other current liabilities
√Applicable □Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Short-term bond payable | ||
| Refunds payable | ||
| Output VAT to be charged off | 68,532,796.91 | 56,140,971.75 |
| Total | 68,532,796.91 | 56,140,971.75 |
Increase/decrease of the short-term bonds payable:
□Applicable√Not applicable
Other notes:
□Applicable√Not applicable
29. Lease liabilities
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| The amount of the lease payment that has not yet been made | 4,788,785.53 | 4,668,943.91 |
| Minus: Unrecognised financing expenses | 45,558.14 | 124,324.69 |
| Total | 4,743,227.39 | 4,544,619.22 |
30. Deferred income
Deferred income
√Applicable □Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Reason for formation |
| Government grants | 53,820,328.00 | 17,030,000.00 | 2,432,857.14 | 68,417,470.86 | Related to assets |
| Total | 53,820,328.00 | 17,030,000.00 | 2,432,857.14 | 68,417,470.86 | / |
Other notes:
□Applicable√Not applicable
31. Other non-current liabilities
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Contract liabilities | ||
| Obligations of restricted stock repurchase for over one year | 86,411,741.16 | 34,814,148.70 |
| Total | 86,411,741.16 | 34,814,148.70 |
32. Share capital
√Applicable□Not applicable
Unit: RMB
| Opening balance | Increase/decrease in the current period (+/-) | Closing balance | |||||
| New issue | Bonus issue from profit | Bonus issue from capital reserves | Others | Subtotal | |||
| Total shares | 601,077,590 | 2,189,848 | 288,517,221 | -243,784 | 290,463,285 | 891,540,875 | |
Other notes:
(1) Restricted shares were granted during the current period, increasing the total shares by 2,189,848shares and the share capital by RMB2,189,848.00; and a bonus issue from capital reserves was carried outduring the current period, increasing the total shares by 288,517,221 shares and the share capital byRMB288,517,221.00.
(2) Due to the departure of employees participating in the restricted share incentive plan in the currentperiod, the Company repurchased 243,784 shares of restricted shares, reducing the share capital byRMB243,784.00.
33. Capital reserves
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Capital premium (share premium) | 3,628,393,991.93 | 153,723,339.81 | 298,963,047.19 | 3,483,154,284.55 |
| Other capital reserves | 235,153,891.61 | 91,163,501.17 | 48,720,128.21 | 277,597,264.57 |
| Total | 3,863,547,883.54 | 244,886,840.98 | 347,683,175.40 | 3,760,751,549.12 |
Other notes, including a description of the increase or decrease for the current period and the reasons forthe change:
(1) Restricted shares were granted during the current period, increasing capital reserves (sharepremium) by RMB105,003,211.60.
(2) A bonus issue from capital reserves was carried out during the current period, decreasing capitalreserves (share premium) by RMB288,517,221; and restricted shares were repurchased, decreasing capitalreserves (share premium) by RMB10,445,826.19.
(3) Based on the performance appraisal conditions and service vesting period of the restricted shares,the Company recognised the share-based payment cost of RMB91,163,501.17, which was recorded incapital reserves (other capital reserves).
(4) All restricted shares under the 2020 Restricted Share Incentive Plan were unlocked, the equityincentive expenditure of RMB48,720,128.21, recorded in other capital reserves in the prior period, wasreclassified to capital reserves (share premium).
34. Treasury shares
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Treasury shares | 129,612,354.00 | 107,193,059.60 | 70,911,690.22 | 165,893,723.38 |
| Total | 129,612,354.00 | 107,193,059.60 | 70,911,690.22 | 165,893,723.38 |
Other notes, including a description of the increase or decrease for the current period and the reasons forthe change:
(1) Restricted shares were granted during the current period, increasing treasury shares byRMB107,193,059.60.
(2) The departure of awardees of the restricted share incentive plans in the current period resulted ina decrease in treasury shares worth RMB10,689,610.19; the partially unlocked restricted shares in thecurrent period caused a decrease in treasury shares worth RMB53,754,080.03; and the dividend for thecurrent period includes locked-up restricted share incentives and the cash dividend is revocable, resultingin a decrease in treasury shares worth RMB6,468,000.00.
35. Other comprehensive income
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Amount incurred in the current period | Closing balance | |||||
| Amount before income tax incurred in the current period | Less: amount previously recognized in other comprehensive income and currently transferred to profit or loss | Less: amount previously recognized in other comprehensive income and currently transferred to retained earnings | Less: Income tax expense | After-tax amount attributable to the Company as the parent | After-tax amount attributable to non-controlling interests | |||
| I Other comprehensive income that will not be reclassified to profit or loss | ||||||||
| Of which: Changes caused by remeasurements on defined benefit schemes | ||||||||
| Other comprehensive income that will not be reclassified to profit or loss under the equity method | ||||||||
| Changes in the fair value of other equity investments | ||||||||
| Changes in the fair value arising from changes in own credit risk | ||||||||
| II Other comprehensive income that will be reclassified to profit or loss | 4,389,526.95 | 9,180,971.20 | 9,180,971.20 | 13,570,498.15 | ||||
| Of which: Other comprehensive income that will be reclassified to profit or loss under the equity method | ||||||||
| Changes in the fair value of other debt investments | ||||||||
| Other comprehensive income arising from the reclassification of financial assets | ||||||||
| Credit impairment allowances for other debt investments | ||||||||
| Reserve for cash flow hedges | 4,363,321.67 | 9,871,936.10 | 9,871,936.10 | 14,235,257.77 | ||||
| Differences arising from the translation of foreign currency-denominated financial statements | 26,205.28 | -690,964.90 | -690,964.90 | -664,759.62 | ||||
| Total other comprehensive income | 4,389,526.95 | 9,180,971.20 | 9,180,971.20 | 13,570,498.15 |
Other notes, including the adjustment of the effective gain/loss on cash flow hedges to the initial recognised amount:
None.
36. Surplus reserves
√Applicable□Not applicable
Unit: RMB
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance |
| Statutory surplus reserves | 302,797,998.73 | 259,419,892.20 | 562,217,890.93 | |
| Discretional surplus reserves | ||||
| Reserve funds | ||||
| Enterprise development funds | ||||
| Others | ||||
| Total | 302,797,998.73 | 259,419,892.20 | 562,217,890.93 |
Notes, including changes and reason of change:
Statutory surplus reserves were established based on 10% of the net profit of the Company as theparent for the current period.
37. Retained earnings
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Retained earnings as at the end of the prior year before adjustment | 7,756,665,030.53 | 6,010,878,918.97 |
| Adjustment to opening retained earnings (“+” for increase, “-” for decrease) | -89,745.58 | -179,970.91 |
| Opening retained earnings after adjustment | 7,756,575,284.95 | 6,010,698,948.06 |
| Add: Net profit attributable to owners of the Company as the parent in the current period | 3,870,135,376.47 | 3,188,709,584.89 |
| Less: Appropriation to statutory surplus reserves | 259,419,892.20 | |
| Appropriation to discretionary surplus reserves | ||
| Appropriation to general reserve | ||
| Dividends payable to ordinary shareholders | 1,983,555,895.20 | 1,442,833,248.00 |
| Dividends for ordinary shareholders that are converted to share capital | ||
| Closing retained earnings | 9,383,734,874.02 | 7,756,575,284.95 |
Specific adjustments to the opening retained earnings:
1. An effect of RMB-89,745.58 was incurred on the opening retained earnings by retrospective adjustmentconducted according to the Accounting Standards for Business Enterprises and relevant new regulations.
2. An effect of RMB0.00 was incurred on the opening retained earnings by changes in accounting policies.
3. An effect of RMB0.00 was incurred on the opening retained earnings by correction of significantaccounting errors.
4. An effect of RMB0.00 was incurred on the opening retained earnings by changes in combination scopearising from same control.
5. An effect of RMB0.00 was incurred on the opening retained earnings by other adjustments combined.
38. Revenue and cost of sales
(1) Operating revenue and cost of sales
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 | ||
| Revenue | Costs | Revenue | Costs | |
| Principal operations | 15,669,231,313.32 | 8,899,467,288.16 | 14,052,771,512.23 | 8,716,930,704.54 |
| Other operations | 25,524,292.92 | 14,717,244.11 | 28,601,518.71 | 13,151,880.54 |
| Total | 15,694,755,606.24 | 8,914,184,532.27 | 14,081,373,030.94 | 8,730,082,585.08 |
| Of which: Revenue generated by contracts with customers | 15,693,833,748.56 | 8,913,978,591.03 | 14,080,683,516.01 | 8,729,867,530.13 |
39. Taxes and levies
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Urban maintenance and construction tax | 46,317,630.84 | 43,535,121.72 |
| Educational surcharges | 26,534,961.64 | 24,378,077.48 |
| Local education surcharge | 18,164,178.51 | 16,252,051.57 |
| Real estate tax | 16,243,518.69 | 10,331,309.05 |
| Stamp duty | 20,563,494.46 | 16,430,918.58 |
| Land use tax | 4,911,276.63 | 4,770,521.69 |
| Vehicle and vessel use tax | 41,465.24 | 44,403.17 |
| Environment protection tax | 19,642.28 | 15,656.64 |
| Total | 132,796,168.29 | 115,758,059.90 |
40. Selling expense
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Marketing expense | 390,294,513.42 | 299,723,604.19 |
| Employee remuneration | 364,755,937.75 | 325,364,319.34 |
| Advertising expense | 192,142,669.81 | 77,484,221.03 |
| Travel expense | 59,289,771.77 | 43,297,989.40 |
| Administrative expense | 53,807,002.61 | 36,290,184.82 |
| Lease rental | 1,179,097.69 | 9,778,151.66 |
| Others | 8,969,167.55 | 8,449,188.97 |
| Total | 1,070,438,160.60 | 800,387,659.41 |
41. Administrative expense
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Employee remuneration | 309,588,670.20 | 256,350,627.82 |
| Share-based payments | 98,308,559.97 | 84,081,337.22 |
| Depreciation and amortisation | 64,818,434.02 | 52,172,006.88 |
| Office expense | 58,115,972.47 | 45,742,988.76 |
| House and equipment maintenance expense | 27,812,968.10 | 21,657,342.01 |
| Tax | 26,961,305.32 | 3,082,509.25 |
| Consultant service expense | 19,765,182.88 | 16,904,014.09 |
| Lease rental | 8,361,416.56 | 9,285,328.92 |
| Business entertainment expense | 8,118,461.86 | 5,668,555.03 |
| Others | 4,347,581.13 | 5,651,663.90 |
| Total | 626,198,552.51 | 500,596,373.88 |
42. R&D expense
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| R&D of adaptors | 267,326,234.98 | 249,597,370.31 |
| R&D of wall switches and sockets | 184,030,365.79 | 154,925,908.04 |
| R&D of LED | 82,511,039.76 | 67,196,736.33 |
| R&D of digital accessories | 58,579,343.70 | 51,413,278.02 |
| R&D of household appliances | 35,641,121.17 | 25,044,926.07 |
| R&D of circuit breakers | 19,437,610.52 | 15,897,548.30 |
| R&D of smart door locks | 15,229,440.10 | 12,858,419.10 |
| R&D of smart lighting | 10,672,230.59 | 11,361,893.94 |
| Total | 673,427,386.61 | 588,296,080.11 |
43. Finance costs
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Interest costs | 28,282,578.99 | 35,925,352.09 |
| Interest income | -136,526,600.97 | -137,795,215.87 |
| Exchange profit and loss | -1,681,603.84 | -6,216,803.18 |
| Auxiliary expense | 1,780,809.64 | 812,258.47 |
| Cash discount | -365,529.46 | -718,892.47 |
| Total | -108,510,345.64 | -107,993,300.96 |
44. Other income
√Applicable□Not applicable
Unit: RMB
| By nature | 2023 | 2022 |
| Government grants related to income | 189,400,866.48 | 130,991,587.24 |
| Over-deduction in the calculation of the taxable income amount for value added tax | 57,939,648.64 | |
| Return of auxiliary expense for individual income tax withheld | 1,978,429.43 | 1,712,485.52 |
| Employment VAT reduction or exemption for veterans and key groups | 1,637,350.00 | 236,650.00 |
| Government grants related to assets | 2,432,857.14 | |
| Total | 253,389,151.69 | 132,940,722.76 |
45. Return on investment
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Return on long-term equity investments measured using the equity method | ||
| Income from the disposal of long-term equity investments | ||
| Income derived during the period of holding held-for-trading financial assets | ||
| Dividend income derived during the period of holding other equity investments | ||
| Interest income derived during the period of holding debt investments | ||
| Interest income derived during the period of holding other debt investments | ||
| Income from the disposal of held-for-trading financial assets | ||
| Income from the disposal of other equity investments | ||
| Income from the disposal of debt investments | ||
| Income from the disposal of other debt investments | ||
| Income from debt restructuring | ||
| Return on investments in bank’s wealth management products | 190,904,769.99 | 279,374,491.92 |
| Income from the disposal of financial instruments | 7,786,015.00 | -7,385,680.00 |
| Of which: futures investments | 7,786,015.00 | -7,385,680.00 |
| Total | 198,690,784.99 | 271,988,811.92 |
46. Gain on changes in fair value
√Applicable□Not applicable
Unit: RMB
| Source of gain on changes in fair value | 2023 | 2022 |
| Held-for-trading financial assets | ||
| Of which: Gain on changes in the fair value of derivative financial instruments | ||
| Held-for-trading financial liabilities | 18,200,000.00 | |
| Investment property measured at fair value | ||
| Of which: Gain on changes in the fair value of financial liabilities at fair value through profit or loss | 18,200,000.00 | |
| Total | 18,200,000.00 |
Other notes:
For details, please refer to “21. Held-for-trading financial liabilities” under “VII Notes to theConsolidated Financial Statements” of “Part X Financial Statements” herein.
47. Credit impairment loss
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Loss on bad debts of notes receivable | ||
| Bad debt loss of accounts receivable | ||
| Bad debt loss of other receivables | ||
| Impairment loss on investment in debt obligations | ||
| Impairment loss on other investment in debt obligations | ||
| Bad debt loss of long-term receivables | ||
| Impairment loss on financial guarantees | ||
| Contractual asset impairment loss | ||
| Bad debt loss | -61,075,301.86 | -30,470,523.21 |
| Total | -61,075,301.86 | -30,470,523.21 |
48. Asset impairment loss
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| I Impairment loss on contract assets | ||
| II Inventory valuation loss and impairment loss on contract performance costs | -17,511,432.09 | -11,504,455.94 |
| III Impairment Loss on Long-term Equity Investment | ||
| IV Impairment Loss on Investment Property | ||
| V Impairment loss on fixed assets | ||
| VI Depreciation Loss of Engineering Materials | ||
| VII Impairment Losses on Construction in Progress | ||
| VIII Impairment Losses on Productive Living Assets | ||
| IX Impairment Losses of Oil & Gas Assets | ||
| X Impairment Losses on Intangible Assets | ||
| XI Impairment losses on Goodwill | -45,133,442.04 | |
| XII Others | ||
| Total | -62,644,874.13 | -11,504,455.94 |
49. Gains on disposal of assets
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Gains on disposal of fixed assets | -5,484,474.02 | -3,139,686.69 |
| Total | -5,484,474.02 | -3,139,686.69 |
50. Non-operating income
Details of non-operating income:
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 | Amount recognized in exceptional gains and losses |
| Total gains on the disposal of non-current assets | |||
| Of which: Gains on the disposal of fixed assets | |||
| Gains on the disposal of intangible assets | |||
| Gains on the swap of non-monetary assets | |||
| Donations received | |||
| Government grants | |||
| Damages for infringement and contract breaching | 1,949,809.06 | 2,952,203.08 | 1,949,809.06 |
| Default revenue of suppliers | 563,915.11 | 498,535.51 | 563,915.11 |
| Default revenue of dealers | 13,132.00 | 17,277.64 | 13,132.00 |
| Payment not required to be made | 12,773.55 | ||
| Others | 247,026.80 | 303,573.54 | 247,026.80 |
| Total | 2,773,882.97 | 3,784,363.32 | 2,773,882.97 |
Other notes:
□Applicable√Not applicable
51. Non-operating expenses
√Applicable □Not applicable
Unit: RMB
| Item | 2023 | 2022 | Amount recognized in exceptional gains and losses |
| Total loss on the disposal of non-current assets | 130,259.28 | 841,203.58 | 130,259.28 |
| Of which: Loss on the disposal of fixed assets | |||
| Loss on the disposal of intangible assets | |||
| Loss on the swap of non-monetary assets | |||
| Donations made | 193,224,919.52 | 62,500,296.94 | 193,224,919.52 |
| Compensation expense | 225,015.70 | 225,015.70 | |
| Others | 155,174.38 | 47,161.99 | 155,174.38 |
| Total | 193,735,368.88 | 63,388,662.51 | 193,735,368.88 |
Other notes:
Details of donations:
| Item | 2023 | 2022 |
| Cixi General Institution of Charity | 119,480,000.00 | 56,275,000.00 |
| Red Cross Society of China Cixi Branch | 67,427,494.72 | 4,688,737.42 |
| Renovation of the Guyaopu Village | 3,000,000.00 | |
| New Energy Class, Industrial College, College of Science and Technology, Ningbo University | 1,000,000.00 | |
| Ningbo University Sports College Basketball Team | 1,000,000.00 | |
| Shanghai Charity Foundation | 1,000,000.00 | |
| Other petty donations | 1,317,424.80 | 536,559.52 |
| Subtotal | 193,224,919.52 | 62,500,296.94 |
52. Income tax expense
(1) Income tax expense
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Current income tax expense | 696,800,556.63 | 589,710,229.89 |
| Deferred income tax expense | -24,792,095.68 | -20,805,042.29 |
| Total | 672,008,460.95 | 568,905,187.60 |
Reconciliation between accounting profit and income tax expense
Unit: RMB
| Item | 2023 | 2022 |
| Gross profit | 4,536,334,952.36 | 3,754,456,143.17 |
| Income tax expense based on the applicable tax rate of the Company as the parent | 680,450,242.85 | 563,168,421.48 |
| Effects of different tax rates of subsidiaries | 54,734,255.39 | 87,944,503.29 |
| Effects of adjustments to income tax of the prior period | -11,123,948.89 | 237,402.68 |
| Effects of non-deductible costs, expenses and losses | 1,269,258.03 | 793,597.28 |
| Effects of the utilization of deductible losses on which deferred income tax assets were unrecognized in the prior period | -1,887,198.57 | -10,088,778.03 |
| Effects of deductible temporary differences or losses on which deferred income tax assets are unrecognized in the current period | 37,870,938.40 | 13,199,517.70 |
| Effect of over-deduction in the calculation of the taxable amount in relation to R&D costs | -89,305,086.26 | -77,819,239.95 |
| Over-dedcution in the calculation of the taxable amount in relation to fixed assets in the fourth quarter | -8,530,236.85 | |
| Income tax expense | 672,008,460.95 | 568,905,187.60 |
53. Other comprehensive income
√Applicable□Not applicable
For details of other comprehensive income after tax, please refer to “35. Other comprehensiveincome” under “VII Notes to the Consolidated Financial Statements” of “Part X Financial Statements”herein.
54. Cash flow statement items
(1) Cash flows from operating activities
Cash generated from other operating activities:
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Income from government subsidy | 206,430,866.48 | 184,811,915.24 |
| Deposit received | 223,283,524.93 | 94,815,279.98 |
| Interest income | 45,509,126.14 | 76,560,589.37 |
| Return of housing loan for employees | 3,591,449.23 | 8,172,679.13 |
| Others | 5,655,825.32 | 5,675,054.71 |
| Total | 484,470,792.10 | 370,035,518.43 |
Cash used in other operating activities:
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Out-of-pocket expense | 842,934,130.51 | 982,834,528.81 |
| Deposit payment | 159,339,465.18 | 58,237,557.33 |
| Donation expenditure | 191,475,200.00 | 62,500,296.94 |
| Housing loan for employees | 1,130,000.00 | 3,821,203.62 |
| Others | 7,868,577.93 | 4,072,643.97 |
| Total | 1,202,747,373.62 | 1,111,466,230.67 |
(2) Cash flows from investing activities
Cash generated from important investing activities:
□Applicable√Not applicable
Cash used in important investing activities:
□Applicable√Not applicable
Cash generated from other investing activities:
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Redemption of investments such as bank wealth management | 8,999,638,611.27 | 9,314,400,000.00 |
| Return of futures margin | 76,930,219.61 | 298,315,309.31 |
| Received interest on call money | 1,000,000.00 | |
| Total | 9,076,568,830.88 | 9,613,715,309.31 |
Cash used in other investing activities:
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Investment expenditure such as bank wealth management | 11,958,753,025.00 | 10,321,800,000.00 |
| Payment for futures margin | 93,800,000.00 | 293,700,000.00 |
| Total | 12,052,553,025.00 | 10,615,500,000.00 |
(3) Cash flows from financing activities
Cash generated from other financing activities:
□Applicable√Not applicable
Cash used in other financing activities:
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Term deposits in pledge | 200,000,000.00 | |
| Repayment of lease liabilities | 12,347,289.52 | 13,844,786.80 |
| Repurchase of share incentives | 10,689,707.63 | 222,802,913.86 |
| Total | 223,036,997.15 | 236,647,700.66 |
Changes in liabilities incurred in financing activities:
□Applicable√Not applicable
55. Supplementary information to the cash flow statement
(1) Supplementary information to the cash flow statement
√Applicable□Not applicable
Unit: RMB
| Supplementary information | 2023 | 2022 |
| 1. Reconciliation of net profit to net cash generated from/used in operating activities： | ||
| Net profit | 3,864,326,491.41 | 3,185,550,955.57 |
| Add: Asset impairment allowances | 62,644,874.13 | 11,504,455.94 |
| Credit impairment loss | 61,075,301.86 | 30,470,523.21 |
| Depreciation of fixed assets, depletion of oil and gas assets, and depreciation of productive living assets | 241,517,224.94 | 222,420,678.01 |
| Amortization of right-of-use assets | 13,680,373.05 | 14,110,005.67 |
| Amortization of intangible assets | 19,490,904.94 | 20,494,628.97 |
| Amortization of long-term prepaid expense | 8,201,353.62 | 8,006,255.46 |
| Loss on the disposal of fixed assets, intangible assets and other long-term assets (“-” for gain) | 5,484,474.02 | 3,139,686.69 |
| Loss on the retirement of fixed assets (“-” for gain) | 130,259.28 | 841,203.58 |
| Loss on changes in fair value (“-” for gain) | -18,200,000.00 | |
| Finance costs (“-” for income) | -64,416,499.68 | -30,687,370.90 |
| Loss on investment (“-” for income) | -198,690,784.99 | -271,988,811.92 |
| Decrease in deferred income tax assets (“-” for increase) | -40,590,894.26 | -24,893,024.32 |
| Increase in deferred income tax liabilities (“-” for decrease) | 14,344,358.02 | 3,808,544.99 |
| Decrease in inventories (“-” for increase) | -153,504,804.57 | 100,544,363.75 |
| Decrease in operating receivables (“-” for increase) | -25,388,458.25 | -72,562,204.17 |
| Increase in operating payables (“-” for decrease) | 946,014,423.86 | -220,315,149.21 |
| Others | 91,163,501.17 | 77,469,476.84 |
| Net cash generated from/used in operating activities | 4,827,282,098.55 | 3,057,914,218.16 |
| 2. Significant investing and financing activities that involve no cash proceeds or payments： | ||
| Conversion of debt to capital | ||
| Current portion of convertible corporate bonds | ||
| Fixed assets under finance leases | ||
| 3. Net changes in cash and cash equivalents： | ||
| Closing balance of cash | 1,332,186,205.30 | 1,925,343,174.98 |
| Less: Opening balance of cash | 1,925,343,174.98 | 2,552,716,453.54 |
| Add: Closing balance of cash equivalents | ||
| Less: Opening balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -593,156,969.68 | -627,373,278.56 |
(2) Breakdown of cash and cash equivalents
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| I Cash | 1,332,186,205.30 | 1,925,343,174.98 |
| Of which: Cash on hand | 14,467.69 | 34,167.84 |
| Bank deposits that can be readily drawn on demand | 1,275,537,060.14 | 1,890,294,692.17 |
| Other monetary assets that can be readily drawn on demand | 56,634,677.47 | 35,014,314.97 |
| Deposits in the central bank that can be used for payment | ||
| Deposits in banks and other financial institutions | ||
| Borrowings from banks and other financial institutions | ||
| II Cash equivalents | ||
| Of which: Bond investments that will be due within three months | ||
| III Cash and cash equivalents, end of the period | 1,332,186,205.30 | 1,925,343,174.98 |
| Of which: Restricted cash and cash equivalents of the Company as the parent and subsidiaries within the Group |
(3) Items that were restricted in use but still presented as cash and cash equivalents
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | Reason |
| Raised funds | 554,934,817.54 | Raised funds can only be used in raised funds invested projects. |
| Total | 554,934,817.54 | / |
(4) Monetary assets that were not recorded in cash and cash equivalents
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 | Reason |
| Term deposits | 3,272,753,025.00 | 2,545,000,000.00 | With obtaining interest income as the primary purpose |
| Interest receivable on term deposits | 95,085,570.53 | 120,706,706.98 | Not in the Company’s account |
| Futures margins | 40,681,592.44 | 13,774,515.95 | Not withdrawable on demand |
| Security deposits for letters of guarantee | 3,008,032.39 | 7,141,771.63 | Not withdrawable on demand |
| Total | 3,411,528,220.36 | 2,686,622,994.56 | / |
Other notes:
√Applicable□Not applicable
Changes in liabilities incurred in financing activities:
| Item | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | ||
| Change in cash | Change in non-cash items | Change in cash | Change in non-cash items | |||
| Short-term borrowings | 845,374,749.03 | 1,055,972,102.34 | 27,415,774.51 | 1,340,418,449.87 | 588,344,176.01 | |
| Long-term borrowings (inclusive of the current portion of long-term borrowings) | 393,000,000.00 | 274,138.89 | 393,274,138.89 | |||
| Lease liabilities (inclusive of the current portion of lease liabilities) | 13,343,277.35 | 17,432,440.44 | 12,347,289.52 | 18,428,428.27 | ||
| Total | 858,718,026.38 | 1,448,972,102.34 | 45,122,353.84 | 1,352,765,739.39 | 1,000,046,743.17 | |
56. Monetary items denominated in foreign currencies
(1) Monetary items denominated in foreign currencies
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance in foreign currency | Exchange rate | Closing balance in RMB |
| Monetary assets | - | - | 24,775,126.37 |
| Of which: USD | 3,211,721.50 | 7.0827 | 22,747,659.87 |
| EUR | 257,587.74 | 7.8592 | 2,024,433.57 |
| HKD | 2,639.78 | 0.9062 | 2,392.17 |
| GBP | 13.9 | 9.0411 | 125.67 |
| IDR | 1,030,185.00 | 0.0005 | 515.09 |
| Accounts receivable | - | - | 26,367,296.92 |
| Of which: USD | 3,722,774.78 | 7.0827 | 26,367,296.92 |
57. Leases
(1) As the lessor
Operating leases as the lessor:
√Applicable□Not applicable
Unit: RMB
| Item | Lease income | Of which: Income related to variable lease payments and not included in lease receipts |
| Building space | 921,857.68 | |
| Total | 921,857.68 |
Operating leases as the lessor:
□Applicable√Not applicable
Reconciliation of undiscounted lease receipts to net investment in leases:
□Applicable√Not applicable
Undiscounted lease receipts for the next five years:
□Applicable√Not applicable
VIII R&D Expenditures
(1) Presented by nature of expenditure
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Employee remuneration | 406,595,244.35 | 355,037,509.43 |
| Direct expenditures | 197,805,013.87 | 170,137,510.77 |
| Depreciation and amortization | 13,096,686.15 | 13,144,547.42 |
| Others | 55,930,442.24 | 49,976,512.49 |
| Total | 673,427,386.61 | 588,296,080.11 |
| Of which: expensed R&D expenditures | 673,427,386.61 | 588,296,080.11 |
| Capitalised R&D expenditures |
IX Changes to the Scope of the Consolidated Financial Statements
1. Business combinations not involving entities under common control
□Applicable√Not applicable
(1) Business combinations not involving entities under common control in the current period
□Applicable√Not applicable
(2) Cost of acquisition and goodwill
□Applicable√Not applicable
(3) Identifiable assets and liabilities of acquirees on the date of acquisition
□Applicable√Not applicable
(4) Gains or losses arising from the remeasurement at fair value of equity interests held before thedates of acquisitionIndicate whether there were business combinations which were achieved by stages and of which controlwas obtained in the Reporting Period.
□Applicable√Not applicable
(5) Inability to reasonably determine the acquisition consideration or the fair value of acquirees’identifiable assets and liabilities at acquisition dates or the period-ends of the combinations
□Applicable√Not applicable
(6) Other notes
□Applicable√Not applicable
2. Business combinations involving entities under common control
□Applicable√Not applicable
(1) Business combinations involving entities under common control in the current period
□Applicable√Not applicable
(2) Cost of acquisition
□Applicable√Not applicable
(3) Fair value of assets and liabilities of acquirees on the date of acquisition
□Applicable√Not applicable
3. Counter-purchases
□Applicable√Not applicable
4. Disposal of subsidiaries
Indicate whether there was any transaction or matter in the current period where the Company ceased to control a subsidiary.
□Applicable√Not applicable
Other notes:
□Applicable√Not applicable
Indicate whether Company ceased to control a subsidiary in multiple disposals of its investment in the subsidiary.
□Applicable√Not applicable
Other notes:
□Applicable√Not applicable
5. Changes to the scope of the consolidated financial statements due to other reasonsChanges to the scope of the consolidated financial statements due to other reasons (incorporation, liquidation, etc.)：
√Applicable□Not applicable
| Company name | How the interest in the subsidiary was obtained | Time when the interest was obtained | The Company’s capital contribution | As % of the subsidiary’s total capital |
| Qiquanyang Trading | Incorporated | September 2023 | RMB10,000 | 100.00% |
| Goneo Germany | Incorporated | May 2023 | EUR25,000 | 100.00% |
| Goneo Indonesia | Incorporated | November 2023 | 100.00% | |
| Goneo Singapore | Incorporated | October 2023 | 100.00% |
On 5 September 2023, Qiquanyang Trading completed the business registration procedures, and obtained a business license with a unified social credit code of91330282MACU320T5A, with a registered capital of RMB10 million, and a 100% shareholding by the Company’s subsidiary Information Technology, whichincorporated it. As at 31 December 2023, Information Technology’s paid-up capital contribution was RMB10,000. Therefore, since the date of its establishment,Qiquanyang Trading has been included in the scope of the consolidated financial statements.Goneo Germany was incorporated in Frankfurt, Germany in 22 May 2023 with a registered capital of EUR25,000 and a 100% shareholding by Goneo HK. As at31 December 2023, Goneo HK’s paid-up capital contribution was EUR25,000. Therefore, since the date of its establishment, Goneo Germany has been included inthe scope of the consolidated financial statements.
Goneo Singapore was incorporated in Singapore on 20 October 2023 with a 100% shareholding by Goneo HK and a registered capital of USD50,000. As at 31December 2023, Goneo HK’s paid-up capital contribution was nil. Since the date of its establishment, Goneo Singapore has been included in the scope of theconsolidated financial statements.
Goneo Indonesia was incorporated in Indonesia on 17 November 2023 with a registered capital of USD2.1021 million. It was incorporated with joint investmentsfrom the Company’s subsidiaries Goneo HK and Goneo Singapore, with a 90% shareholding by Goneo HK and the rest 10% by Goneo Singapore. As at 31 December2023, the paid-up capital contributions of Goneo HK and Goneo Singapore were both nil. Since the date of its establishment, Goneo Indonesia has been included inthe scope of the consolidated financial statements.
6. Others
□Applicable√Not applicable
X Interests in Other Entities
1. Interests in subsidiaries
(1) Subsidiaries
√Applicable□Not applicable
Unit: RMB’0,000
| Subsidiary | Principal place of business | Registered capital | Place of registration | Nature of business | The Company’s interest | How the subsidiary was obtained | |
| Direct | Indirect | ||||||
| Ningbo Goneo | Ningbo, Zhejiang | 10,000 | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Combination under common control | |
| Goneo Photoelectricity | Ningbo, Zhejiang | 1,000 | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Incorporated | |
| Goneo Digital | Ningbo, Zhejiang | 1,000 | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Incorporated | |
| Banmen Electrical Appliances | Ningbo, Zhejiang | 1,034.70 | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Incorporated | |
| Goneo Precision Manufacturing | Ningbo, Zhejiang | 10,000 | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Incorporated | |
| Electric Sales | Ningbo, Zhejiang | 10,000 | Ningbo, Zhejiang | Commercial | 100.00 | Combination under common control | |
| Cixi Goneo | Ningbo, Zhejiang | 3,066 | Ningbo, Zhejiang | Commercial | 100.00 | Combination under common control | |
| Shanghai Goneo | Shanghai | 3,800 | Shanghai | Commercial | 100.00 | Combination under common control | |
| Goneo Management | Ningbo, Zhejiang | 10,000 | Ningbo, Zhejiang | Commercial | 100.00 | Incorporated | |
| Goneo International Trade | Ningbo, Zhejiang | 1,000 | Ningbo, Zhejiang | Commercial | 100.00 | Incorporated | |
| Hong Kong Goneo | Hong Kong | Hong Kong | Commercial | 100.00 | Combination under common control | ||
| Xingluo Trading | Ningbo, Zhejiang | 500 | Ningbo, Zhejiang | Commercial | 100.00 | Combination under common control | |
| Goneo Low Voltage Electric Electrical | Ningbo, Zhejiang | 2,000 | Ningbo, Zhejiang | Commercial | 100.00 | Incorporated | |
| Household Electrical Appliances | Ningbo, Zhejiang | 1,000 | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Incorporated | |
| Hainan Dacheng | Sanya, Hainan | 1,000 | Sanya, Hainan | Commercial services | 100.00 | Incorporated | |
| Intelligent Technology | Ningbo, Zhejiang | 1,000 | Ningbo, Zhejiang | Manufacturing industry | 100.00 | Incorporated | |
| Dalitek | Shanghai | 1,500 | Shanghai | Commercial | 70.00 | Combination not under common control | |
| Information technology | Shanghai | 10,000 | Shanghai | Commercial | 100.00 | Incorporated | |
| Goneo Tools | Ningbo, Zhejiang | 3,840 | Ningbo, Zhejiang | Commercial | 62.00 | Incorporated | |
| Goneo New Energy | Ningbo, Zhejiang | 1,000 | Ningbo, Zhejiang | Commercial | 100.00 | Incorporated | |
| Murora Intelligent | Guangdong | 10,000 | Guangdong | Manufacturing industry | 100.00 | Incorporated | |
| Shenzhen Intelligent | Shenzhen | 1,000 | Shenzhen | Manufacturing industry | 100.00 | Incorporated | |
| Goneo Marketing | Ningbo, Zhejiang | 1,000 | Ningbo, Zhejiang | Commercial | 100.00 | Incorporated |
Notes of shareholding percentage in subsidiaries different from voting percentage:
None.
Basis of holding half or less voting rights but still controlling the investee and holding more than half ofthe voting rights but not controlling the investee:
None.
Basis of controlling significant structural entities incorporated in the scope of combination:
None.
Basis of determining whether the Company is the agent or the mandatorNone.
(2) Substantial non-wholly-owned subsidiaries
√Applicable□Not applicable
Unit: RMB
| Subsidiary | Non-controlling interests | Net profit or loss attributable to non-controlling interests in the current period | Declared dividends for non-controlling interests in the current period | Closing balance of non-controlling interests |
| Dalitek | 30.00% | -4,385,637.44 | 12,112,829.51 |
Holding proportion of non-controlling interests in subsidiary different from voting proportion:
□Applicable√Not applicable
Other notes:
□Applicable√Not applicable
(3) Key financial information of substantial non-wholly-owned subsidiaries
√Applicable□Not applicable
Unit: RMB
| Subsidiary | Closing balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Dalitek | 54,160,179.57 | 4,311,638.29 | 58,471,817.86 | 17,842,776.42 | 252,943.07 | 18,095,719.49 | 70,444,095.63 | 7,160,779.01 | 77,604,874.64 | 19,948,974.82 | 2,661,009.99 | 22,609,984.81 |
| Subsidiary | 2023 | 2022 | ||||||
| Operating revenue | Net profit | Total comprehen | Net cash generated from/use | Operating revenue | Net profit | Total comprehen | Net cash generated from/use | |
| sive income | d in operating activities | sive income | d in operating activities | |||||
| Dalitek | 43,910,717.81 | -14,618,791.46 | -14,618,791.46 | -8,096,766.95 | 53,135,968.72 | -10,528,764.40 | -10,528,764.40 | -4,681,119.04 |
XI Government Grants
1. Government grants recognized at the receivable amount at the period-end
□Applicable√Not applicable
Reasons for not receiving the expected government grant at the expected time:
□Applicable√Not applicable
2. Liabilities associated with government grants
√Applicable□Not applicable
Unit: RMB
| Financial statement line item | Opening balance | Increase in the government grant in the current period | Amount recorded in non-operating income in the current period | Transferred to other income in the current period | Other changes in the current period | Closing balance | Related to assets/income |
| Deferred income | 53,820,328.00 | 17,030,000.00 | 2,432,857.14 | 68,417,470.86 | Related to assets | ||
| Total | 53,820,328.00 | 17,030,000.00 | 2,432,857.14 | 68,417,470.86 | / |
3. Government grants recorded in profit or loss
√Applicable□Not applicable
Unit: RMB
| Type | 2023 | 2022 |
| Related to income | 191,833,723.62 | 130,991,587.24 |
| Total | 191,833,723.62 | 130,991,587.24 |
XII Risks Related to Financial Instruments
1. Risks on financial instruments
√Applicable□Not applicable
The Company is engaged in risk management to achieve balance between risks and returns,minimizing the negative effects of risks on its operation performance and maximizing the interests of itsshareholders and other equity investors. Based on that risk management goal, the fundamental strategy ofits risk management is to identify and analyse various risks facing the Company, establish an appropriaterisk bottom line, carry out risk management and monitor various risks in a timely and reliable manner tocontrol them within a restricted scope.The Company faces various risks related to financial instruments in its routine activities, mainlyincluding credit risk, liquidity risk market risk. The management has reviewed and approved the policiesof managing those risks, which are summarised as follows.
(I) Credit risk
Credit risk means the risk of financial losses incurred to the other party when one party of a financialinstrument is unable to fulfil its obligations.
1. Practices of credit risk management
(1) Methods for evaluating credit risk
On each balance sheet date, the Company shall evaluate whether the credit risk of relevant financialinstruments has increased significantly since the initial recognition. After determining whether the creditrisk has increased significantly since the initial recognition, the Company shall consider obtainingreasonable and reliable information without paying unnecessary extra costs or efforts, including qualitativeand quantitative analysis based on historical data, external credit risk rating and forward-lookinginformation. On the basis of the single financial instrument or combination of financial instruments withsimilar credit risk characteristics, the Company compares the risk of default of financial instruments onthe balance sheet date with the risk of default on the initial recognition date to determine the change ofdefault risk of financial instruments during their expected duration.
When one or more of the following quantitative and qualitative criteria prevails, the Company shallbelieve the credit risk of financial instruments has increased significantly:
1) The quantitative criteria are mainly that the probability of default in the remaining period at thebalance sheet date increases by more than a certain percentage from the time of initial recognition;
2) The qualitative criteria are mainly material adverse changes in the debtor’s operating or financialstatus, changes in the existing or expected technical, market, economic or legal environment that will havea material adverse impact on the debtor’s ability to repay the Company.
(2) Definition of default and asset with credit impairment
When a financial instrument meets one or more of the following conditions, the Company shall definethe financial asset as having defaulted, and its criteria are consistent with the definition of having incurredcredit impairment:
1) The debtor has major financial difficulties;
2) The debtor violates the binding clauses of the contract against the debtor;
3) The debtor is likely to go bankrupt or undergo other financial restructuring;
4) The creditor, out of economic or contractual considerations related to the debtor’s financialdifficulties, gives concessions to the debtor which would not have been made in any other circumstances.
2. Measurement of expected credit losses
The key parameters for measuring expected credit loss included default probability, loss given defaultand exposure at default. The Company considered quantitative analysis and forward-looking informationof historical statistical data (such as counterparty rating, guarantee method, repayment method, etc.) toestablish a model of probability of default, default loss ratio and default risk exposure.
3. For details of the reconciliation statements of opening balance and closing balance of financialinstrument loss provision, please refer to “4. Notes receivable”, “5. Accounts receivable”, “6. Receivablesfinancing”, and “8. Other receivables” under “VII Notes to the Consolidated Financial Statements” of“Part X Financial Statements” herein.
4. Credit risk exposure and credit risk concentrations
The Company’s credit risk mainly comes from monetary assets and accounts receivable. To controlthe aforementioned relevant risks, the Company has adopted the following measures.
(1) Monetary assets
The Company places the bank deposit and its monetary assets with financial institutions of high creditratings. Thus, its credit risk is low.
(2) Accounts receivable
The Company continuously conducted credit assessments for customers who trade on credit lines.Based on the credit assessment result, the Company chooses to trade with recognised customers with goodcredit and monitor the balance of the accounts receivable from them to ensure that the Company will notface any significant bad debt risk.
Due to the Company merely trades with the authorised third party with good credit, the guarantee isnot required. Credit risk concentration is managed in accordance with the customers. As at 31 December2023, there were certain credit concentration risks in the Company, and 41.28% of the accounts receivableof the Company (44.01% on 31 December 2022) came from the top 5 customers by balance. The Companyhasn’t held any guarantee or other credit enhancement for accounts receivable and contract assets.
The maximum credit risk exposure the Company undertook shall be the carrying value of eachfinancial asset on balance sheet.
(II) Liquidity risk
Liquidity risk refers to the risk of fund shortage occurring when the Company fulfils the settlementobligation in the mode of cash delivery or other financial assets. Liquidity risk may originate from thefailure to sell financial assets at fair value as soon as possible; or from the other party’s failure to pay offits contractual debts; or from the earlier maturity of debts; or from the failure to generate the expected cashflow.To control the risk, the Company comprehensively used a variety of financing methods such as bankclearing and bank borrowing, and adopted the appropriate combination of long-term and short-termfinancing methods to optimise the financing structure and maintain a balance between financingsustainability and flexibility. The Company has obtained the line of credit from a number of commercialbanks to satisfy its operation fund needs and capital expenditure.Financial liabilities classified by remaining maturity:
| Item | As at the end of the current period | ||||
| Carrying amount | Undiscounted contract amount | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 981,618,314.90 | 992,128,718.24 | 992,128,718.24 | ||
| Held-for-trading financial liabilities | |||||
| Accounts payable | 2,056,657,805.40 | 2,056,657,805.40 | 2,056,657,805.40 | ||
| Other payables | 705,060,906.64 | 705,060,906.64 | 705,060,906.64 | ||
| Current portion of non-current liabilities | 13,685,200.88 | 14,116,740.15 | 14,116,740.15 | ||
| Lease liabilities | 4,743,227.39 | 4,788,785.53 | 4,788,785.53 | ||
| Subtotal | 3,761,765,455.21 | 3,772,752,955.96 | 3,767,964,170.43 | 4,788,785.53 | |
(Continued)
| Item | As at the end of the prior period | ||||
| Carrying amount | Undiscounted contract amount | Within 1 year | 1-3 years | Over 3 years | |
| Bank borrowings | 845,374,749.03 | 857,063,545.21 | 857,063,545.21 | ||
| Held-for-trading financial liabilities | 18,200,000.00 | 18,200,000.00 | 18,200,000.00 | ||
| Accounts payable | 1,643,661,963.53 | 1,643,661,963.53 | 1,643,661,963.53 | ||
| Other payables | 446,413,870.85 | 446,413,870.85 | 446,413,870.85 | ||
| Current portion of non-current liabilities | 8,798,658.13 | 9,116,363.36 | 9,116,363.36 | ||
| Lease liabilities | 4,544,619.22 | 4,668,943.91 | 4,668,943.91 | ||
| Subtotal | 2,966,993,860.76 | 2,979,124,686.86 | 2,974,455,742.95 | 4,668,943.91 | |
(III) Market risk
Market risk refers to the risk of fluctuations in the fair value or future cash flows of financialinstruments arising from changes in market prices. Market risk mainly includes interest rate risk andforeign exchange risk.
1. Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flows of financialinstruments arising from changes in market interest rates. Interest-bearing financial instruments with fixedinterest rates may bring the fair value interest rate risk to the Company, while those with floating interest
rate may bring the cash flow interest rate risk to the Company. The Company will determine the proportionbetween the financial instruments with fixed interest rate and those with floating interest rate incombination with market environment, and maintain an appropriate portfolio of financial instrumentsthrough regular review and monitoring. The interest rate risk of cash flows facing the Company is mainlyrelated to the bank loans calculated by floating interest rate of the Company.
As at 31 December 2023, the Company had no borrowings with floating income, and the interest ratechange would not have a significant influence on the Company’s gross profit and shareholders’ equity.
2. Foreign exchange risk
Foreign exchange risk refers to the risk that may lead to the changes of fair value of financialinstruments or future cash flows due to fluctuation in exchange rate. The Company operates in mainlandChina, and the main activities are recorded by RMB. Thus, the foreign exchange market risk undertakenis insignificant for the Company.
For details of the Company’s foreign currency monetary assets and liabilities at the end of the CurrentPeriod, please refer to “56. Monetary items denominated in foreign currencies” under “VII Notes to theConsolidated Financial Statements” of “Part X Financial Statements” herein.
2. Hedges
(1) The Company conducts hedging operations for risk management
□Applicable √Not applicable
Other notes:
√Applicable □Not applicable
The Company used commodity future contracts to hedge the expected bulk-purchase of raw materialsof copper and plastic particles to avoid the risk of fluctuations in the future cash flows caused by thefluctuations in the price of raw materials.
The Company's specific hedging methods are described below:
| Hedged items | Expected bulk-purchase of raw materials such as copper and plastic particles |
| Hedge instruments | Commodity future contracts |
| Hedging method | Commodity future purchase contracts locked in changes of price in expected raw materials bulk-purchase contract |
Both the hedging instruments (commodity futures contracts) and the hedged items (expected bulk-purchase of raw materials) are based on variables such as copper and plastic prices. The Company, guidedby the Group Purchasing Decision Committee and based on actual raw material demand for production,conducts hedging to safeguard against price fluctuations effectively. The aforementioned hedging is highlyeffective. Cash flow hedging is adopted for such hedging activities.
Additionally, the Company, in accordance with its risk management strategy, hedges certain rawmaterials such as silver, aluminium, and tin. However, due to factors such as quantity conversion, thehedging may not be highly effective after futures closing, resulting in ineffective hedging portions beingincluded in investment income.
As of 31 December 2023, the amount of futures margin occupied by the Company reported underother monetary funds was RMB40,681,592.44. The commodity futures contracts purchased by theCompany were reported under derivative financial assets, with a fair value of RMB8,263,755.00 at theend of the period. The Company recognised pre-tax gains from fair value changes of cash flow hedginginstruments included in other comprehensive income of RMB14,235,257.77, which is expected togradually transfer to the Company's profit and loss statement during subsequent raw material procurementperiods.
In 2023, due to hedging, the Company recognised operating costs of RMB7,739,285.00 in the profitand loss statement, and ineffective hedging of silver, aluminium, and tin accounted for RMB7,786,015.00in investment income.
(2) The Company conducts qualifying hedging operations and applies hedge accounting
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
(3) The Company conducts hedging operations for risk management, expects to achieve its riskmanagement objectives, but does not apply hedge accounting.
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
3. Transfer of financial assets
(1) Classification of transfer methods
□Applicable √Not applicable
(2) Financial assets derecognised due to transfer
□Applicable √Not applicable
(3) Transferred financial assets that continue to be involved
□Applicable √Not applicable
Other notes:
□Applicable √Not applicable
XIII Disclosure of Fair Value
1. Closing fair value of assets and liabilities measured at fair value
√Applicable□Not applicable
Unit: RMB
| Item | Closing fair value | |||
| Level 1 fair value measurement | Level 2 fair value measurement | Level 3 fair value measurement | Total | |
| I Continuous fair value measurement | ||||
| (I) Held-for-trading financial assets | 8,263,755.00 | 9,782,624,494.41 | 9,790,888,249.41 | |
| 1. Financial assets at fair value through profit or loss | ||||
| (1) Debt investments | ||||
| (2) Equity investments | ||||
| (3) Derivative financial assets | 8,263,755.00 | 8,263,755.00 | ||
| (4) Bank’s wealth management and other products | 9,727,000,000.00 | 9,727,000,000.00 | ||
| (5) Receivables financing | 5,359,014.96 | 5,359,014.96 | ||
| (6) Other current assets | 50,265,479.45 | 50,265,479.45 | ||
| 2. Designated financial assets at fair value through profit or loss | ||||
| (1) Debt investments | ||||
| (2) Equity investments | ||||
| (II) Other debt investments | ||||
| (III) Other equity investments | ||||
| (IV) Investment property | ||||
| 1. Land use rights for rental | ||||
| 2. Buildings for rental | ||||
| 3. Land use rights held for the purpose of sale for appreciation | ||||
| (V) Living assets | ||||
| 1. Consumptive living assets | ||||
| 2. Productive living assets | ||||
| Total assets continuously measured at fair value | 8,263,755.00 | 9,782,624,494.41 | 9,790,888,249.41 | |
| (VI) Held-for-trading financial liabilities | ||||
| 1. Financial liabilities at fair value through profit or loss | ||||
| Of which: Trading bonds issued | ||||
| Derivative financial liabilities | ||||
| Others | ||||
| 2. Designated financial liabilities at fair value through profit or loss | ||||
| Total liabilities continuously measured at fair value | ||||
| II Non-continuous fair value measurement | ||||
| (I) Assets held for sale | ||||
| Total assets not continuously measured at fair value | ||||
| Total liabilities not continuously measured at fair value |
2. Basis for determining the market prices of continuous and non-continuous Level 1 fair valuemeasurement items
√Applicable□Not applicable
The Company’s Level 1 fair value measurement items were derivative financial assets (futurescontracts), of which the fair value was determined based on the open quotations in the futures market.
3. Continuous and non-continuous Level 2 fair value measurement items, valuation techniques used,and the qualitative and quantitative information of important parameters
□Applicable √Not applicable
4. Continuous and non-continuous Level 3 fair value measurement items, valuation techniques used,and the qualitative and quantitative information of important parameters
√Applicable□Not applicable
As the bank’s wealth management products, trust products, etc. held by the Company had lowerexpected rates of return and smaller changes in fair value, their fair value was determined at their initiallyrecognised costs.The estimated fair value of structured deposits held by the Company was based on the principalamount and interest accrued at a determined rate.Receivables financing held by the Company are measured at the face amount as a reasonable estimateof fair value.
5. Continuous and non-continuous Level 3 fair value measurement items, information on theadjustment between the opening and closing carrying amounts, and sensitivity analysis ofunobservable parameters
□Applicable √Not applicable
6. If a continuous fair value measurement item was converted between levels for the current period,the reasons for such conversion and the policies for determining the conversion point
□Applicable √Not applicable
7. Valuation technique changes incurred in the current period and the reasons for such changes
□Applicable √Not applicable
8. Fair value of financial assets and financial liabilities not measured at fair value
□Applicable √Not applicable
9. Others
□Applicable √Not applicable
XIV Related Parties and Related-party Transactions
1. The Company’s parent company
√Applicable□Not applicable
Unit: RMB’0,000
| Name of the Company’s parent company | Place of registration | Nature of business | Registered capital | The parent company’s shareholding percentage in the Company | The parent company’s voting right percentage in the Company |
| Liangji Industrial | Ningbo, Zhejiang | Investment | 50,000 | 53.79 | 53.79 |
Notes to the Company’s parent company:
Ruan Liping and Ruan Xueping are the joint actual controllers of the Company, and the two jointlyhold 100% of Liangji Industrial, 53.79% of the equity of the Company through Liangji Industrial, directlyhold 30.24% of the equity of the Company, and indirectly holds 0.68% of the voting rights of the Companythrough Ningbo Ninghui Investment Management Partnership (Limited Partnership).
The ultimate controllers of the Company are Ruan Liping and Ruan Xueping.
2. Subsidiaries of the Company
Details of the subsidiaries of the Company are in the notes
√Applicable □Not applicable
The Company’s subsidiaries are detailed in “1. Interests in subsidiaries” under “X Interests in OtherEntities” of “Part X Financial Statements” herein.
3. Joint ventures and associated enterprises of the Company
Details of joint ventures and associated enterprises of the Company are in the notes
□Applicable√Not applicable
The following are the circumstances of other joint ventures or associated enterprises that have a balancewith the Company for the current period or that have formed balances from related-party transactions withthe Company for the previous period
□Applicable√Not applicable
Other notes
□Applicable√Not applicable
4. Other related party
√Applicable□Not applicable
| Name of other related party | Relationship with the Company |
| Shenghui Electronics | A company controlled by Liangji Industrial |
| Goneo Property | A company controlled by Liangji Industrial |
| Minshen Property | Actual controller Ruan Liping holds 30% of the shares, and actual controller Ruan Xueping holds 20% of the shares |
| Liangniu Hardware | A company controlled by the actual controller, Ruan Liping’s wife’s brother Pan Minfeng and his wife Xu Yirong |
| Hangniu Hardware | A company controlled by the actual controller, Ruan Liping’s wife’s brother Pan Minfeng and his wife Xu Yirong |
| Feiniu Hardware | The actual controller Ruan Liping’s wife’s brother Pan Minfeng and his wife Xu Yirong’s son Pan Qianliang holds 55% of the shares, and Xu Yirong holds 45% of the shares |
| Kunshan Gaoshu | A company controlled by Sun Xiaoping, spouse of Ruan Xueping, the actual controller |
| Ruan Shuhong | Daughter of the actual controller Ruan Liping |
| Jiangcheng Industrial | A company controlled by Zhu Huning, the spouse of Ruan Shuhong, daughter of Ruan Liping, the actual controller |
| Niuweiwang Trading | A company controlled by Yu Shoufu, father of Director Cai Yingfeng’s daughter’s spouse |
| Cixi Libo | An entity controlled by Cai Libo, sister of Director Cai Yingfeng |
| Jianke Trading | A company controlled by the Ying Jianguo, brother-in-law of Director Cai Yingfeng |
| Guoxin Trading | A company controlled by Ying Jianguo, brother-in-law of Director Cai Yingfeng |
| Yaoyang Trading | Zhang Meina, sister of Senior Executive Zhang Lina, holds 100% of the shares |
| Huantian Trading | Xu Yanhao, son of Zhang Meina, sister of Senior Executive Zhang Lina, holds 32% of the shares |
| Qiudi Trading | A company controlled by the siblings of the spouse of Senior Executive Li Guoqiang |
| Chenhao Electronics | A company controlled by Xia Zhonggui, brother of Supervisor Li Yu’s spouse, and his spouse Zeng Minhui |
5. Related-party transactions
(1) Related-party transactions involving purchase and sale of goods, as well as receipt and renderingof servicesPurchases of goods/receipt of services:
□Applicable√Not applicable
Sale of goods/rendering of services:
√Applicable□Not applicable
Unit: RMB
| Related party | Contents of transaction | 2023 | 2022 |
| Hangniu Hardware | Adapters, wall switches, LEDs, digital accessories | 40,461,383.23 | 36,858,578.23 |
| Liangniu Hardware | Adapters, wall switches, LEDs, digital accessories | 14,005,203.73 | 13,079,962.46 |
| Feiniu Hardware | Adapters, digital accessories | 1,479,757.39 | 1,481,704.60 |
| Subtotal of Hangniu Hardware | 55,946,344.35 | 51,420,245.29 | |
| Guoxin Trading | Adapters, LEDs, digital accessories | 12,578,951.10 | 7,242,317.55 |
| Jianke Trading | Adapters, LEDs, digital accessories | 917.43 | 3,625,007.82 |
| Subtotal of Guoxin Trading | 12,579,868.53 | 10,867,325.37 | |
| Niuweiwang Trading | Adapters, LEDs | 24,592,948.77 | 21,583,182.90 |
| Cixi Libo | Adapters, LEDs, digital accessories | 14,240,501.18 | 12,230,224.20 |
| Huantian Trading | Adapters, LEDs, digital accessories | 13,575,262.69 | 14,088,847.19 |
| Qiudi Trading | Adapters, LEDs, digital accessories | 8,060,800.82 | 5,174,741.27 |
| Chenhao Electronics | Digital accessories, adapters | 1,420,756.10 | 1,116,890.54 |
| Kunshan Gaoshu | Adapters, wall switches, LEDs, digital accessories | 167,924.26 | |
| Minshen Property | Adapters, wall switches, LEDs, digital accessories | 79,392.18 | 252,151.56 |
| Jiangcheng Industrial | Adapters, wall switches, LEDs, digital accessories | 14,380.89 | |
| Goneo Property | Illuminaries | 9,611.57 | |
| Total | 130,687,791.34 | 116,733,608.32 |
Notes to related-party transactions involving purchase and sale of goods, as well as receipt and renderingof services:
□Applicable√Not applicable
(2) Management entrustment and contracting between the Company and related partiesThe Company as the trustee of management/contractor:
□Applicable√Not applicable
Notes to related-party transactions with the Company as the trustee of management/contractor:
□Applicable√Not applicable
The Company as the trustor of management/contractee:
□Applicable√Not applicable
Notes to related-party transactions with the Company as the trustor of management/contractee:
□Applicable√Not applicable
(3) Leases between the Company and related parties
The Company as the lessor:
□Applicable√Not applicable
The Company as the lessee:
√Applicable□Not applicable
Unit: RMB
| Lessor | Type of the leased asset | Rental expense of simplified short-term leases and low-value asset leases (if applicable) | Variable lease payments that are not covered in the measurement of the lease liabilities (if applicable) | Rent payable | Interest expense on lease liabilities borne | Added right-of-use assets | |||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||
| Ruan Shuhong | Buildings and constructions | 959,138.91 | 798,806.97 | 46,722.44 | 29,123.59 | ||||||
| Shenghui Electronics | Buildings and constructions | 233,539.20 | |||||||||
Notes to leases between the Company and related parties:
□Applicable√Not applicable
(4) Guarantees between the Company and related parties
The Company as the guarantor:
□Applicable√Not applicable
The Company as the guaranteed party:
□Applicable√Not applicable
Notes to guarantees between the Company and related parties:
□Applicable√Not applicable
(5) Loans between the Company and related parties
□Applicable√Not applicable
(6) Asset transfers and debt restructuring involving related parties
□Applicable√Not applicable
(7) Remuneration of key management
√Applicable□Not applicable
Unit: RMB’0,000
| Item | 2023 | 2022 |
| Remuneration of key management | 3,397.19 | 2,507.90 |
(8) Other related-party transactions
□Applicable√Not applicable
6. Amounts due from and to related parties
(1) Amounts due from related parties
□Applicable√Not applicable
(2) Amounts due to related parties
√Applicable □Not applicable
Unit: RMB
| Item | Related party | Closing gross amount | Opening gross amount |
| Contract liabilities | Guoxin Trading | 1,024,406.47 | 527,657.82 |
| Contract liabilities | Hangniu Hardware | 891,269.85 | 2,387,446.01 |
| Contract liabilities | Huantian Trading | 628,223.79 | 234,326.66 |
| Contract liabilities | Liangniu Hardware | 375,514.78 | 126,617.06 |
| Contract liabilities | Cixi Libo | 220,379.32 | 437,257.56 |
| Contract liabilities | Qiudi Trading | 193,819.28 | 3,955.24 |
| Contract liabilities | Niuweiwang Trading | 191,186.78 | 883,947.33 |
| Contract liabilities | Goneo Property | 42,521.60 | |
| Contract liabilities | Chenhao Electronics | 5,232.07 | 245.67 |
| Contract liabilities | Yaoyang Trading | 3,461.19 | 3,461.19 |
| Contract liabilities | Feiniu Hardware | 3,004.00 | 90,790.88 |
| Contract liabilities | Jianke Trading | 194,410.70 | |
| Subtotal | 3,579,019.13 | 4,890,116.12 | |
| Other payables | Liangniu Hardware | 70,000.00 | 70,000.00 |
| Other payables | Hangniu Hardware | 70,000.00 | 70,000.00 |
| Other payables | Feiniu Hardware | 20,000.00 | 20,000.00 |
| Other payables | Subtotal of Hangniu Hardware | 160,000.00 | 160,000.00 |
| Other payables | Yaoyang Trading | 30,000.00 | 30,000.00 |
| Other payables | Chenhao Electronics | 30,000.00 | 20,000.00 |
| Other payables | Cixi Libo | 30,000.00 | 30,000.00 |
| Other payables | Qiudi Trading | 23,000.00 | 23,000.00 |
| Other payables | Huantian Trading | 20,000.00 | 20,000.00 |
| Other payables | Guoxin Trading | 20,000.00 | 20,000.00 |
| Other payables | Niuweiwang Trading | 20,000.00 | 20,000.00 |
| Subtotal | 333,000.00 | 323,000.00 |
(3) Other items
□Applicable √Not applicable
7. Commitments involving related parties
□Applicable √Not applicable
8. Others
□Applicable √Not applicable
XV Share-based Payments
1. Equity instruments
√Applicable□Not applicable
Quantity unit: Share Currency unit: RMB
| Type of awardee | Granted in the current period | Exercised in the current period | Unlocked in the current period | Lapsing in the current period | ||||
| Quantity | Amount | Quantity | Amount | Quantity | Amount | Quantity | Amount | |
| Management | 2,189,848 | 107,193,059.60 | 1,287,648 | 53,754,080.03 | 243,784 | 10,689,610.19 | ||
| Total | 2,189,848 | 107,193,059.60 | 1,287,648 | 53,754,080.03 | 243,784 | 10,689,610.19 | ||
Issued and outstanding share options or other equity instruments at the period-end:
□Applicable √Not applicable
2. Equity-settled share-based payments
√Applicable □Not applicable
Unit: RMB
| Method of determining the fair value of equity instruments at the date of grant | The fair value of restricted shares is the closing price at the date of grant |
| Important parameters for the fair value of equity instruments at the date of grant | The fair value of restricted shares is the closing price at the date of grant |
| Basis for determining the number of exercisable equity instruments | Number of persons expected to exercise multiplied by the number of grants per person |
| Reasons for significant differences between current and prior period estimates | No |
| Cumulative amount of equity-settled share-based payments recorded in capital reserves | 230,319,626.77 |
Other notes:
(1) Restricted Share Incentive Plan in 2020
According to the resolutions of the 12th Meeting of the 1st Board of Directors of the Company andthe 2019 Annual General Meeting, the Company granted 613,800 restricted shares to 441 employees whomet the conditions for the grant at a price of RMB76.13 per share on 3 June 2020.
The main performance appraisal requirements for restricted shares: For the first release period, theperformance appraisal target was the operating revenue or net profit attributable to the shareholders of thelisted company in 2020 was not less than the average of the previous three fiscal years (i.e. 2017 - 2019);for the second release period, the performance appraisal target was the operating revenue or net profitattributable to the shareholders of the listed company in 2021 was not lower than the average of theprevious three fiscal years (i.e. 2018 - 2020); for the third release period, the performance appraisal targetwas the operating revenue or net profit attributable to the shareholders of the listed company in 2022 wasnot lower than the average of the previous three fiscal years (i.e. 2019 - 2021).
In 2023, the Company’s Restricted Share Incentive Plan in 2020 recognised equity incentiveexpenses of RMB1,872,164.21. As of 31 December 2023, all the restricted shares under the RestrictedShare Incentive Plan in 2020 had been unlocked.
(2) Restricted Share Incentive Plan in 2021
According to the resolutions of the 5th Meeting of the 2nd Board of Directors of the Company andthe 2020 Annual General Meeting, the Company granted 668,400 restricted shares to 523 employees whomet the conditions for the grant at a price of RMB88.15 per share on 4 June 2021.
The main performance appraisal requirements for restricted shares: For the first release period, theperformance appraisal target was the operating revenue or net profit attributable to the shareholders of thelisted company in 2021 was not less than 110% of the average of the previous three fiscal years (i.e. 2018- 2020); for the second release period, the performance appraisal target was the operating revenue or netprofit attributable to the shareholders of the listed company in 2022 was not less than 110% of the averageof the previous three fiscal years (i.e. 2019 - 2021); for the third release period, the performance appraisaltarget was the operating revenue or net profit attributable to the shareholders of the listed company in 2023was not less than 110% of the average of the previous three fiscal years (i.e. 2020 - 2022).
In 2023, the Company’s Restricted Share Incentive Plan in 2020 recognised equity incentiveexpenses of RMB9,611,450.86.
(3) Restricted Share Incentive Plan in 2022
According to the resolutions of the 10th and 12th Meeting of the 2nd Board of Directors of theCompany and the 2021 Annual General Meeting, the Company implemented the restricted share IncentivePlan with shares of the Company’s common stock repurchased from the secondary market. The Companygranted 1,501,800 restricted shares to 646 employees who met the conditions for the grant at a price ofRMB63.06 per share on 20 May 2022.
The main performance appraisal requirements for restricted shares in 2022: For the first releaseperiod, the performance appraisal target was the operating revenue or net profit attributable to theshareholders of the listed company in 2022 was not less than 110% of the average of the previous threefiscal years (i.e. 2019 - 2021); for the second release period, the performance appraisal target was theoperating revenue or net profit attributable to the shareholders of the listed company in 2023 was not lessthan 110% of the average of the previous three fiscal years (i.e. 2020 - 2022); for the third release period,the performance appraisal target was the operating revenue or net profit attributable to the shareholders ofthe listed company in 2024 was not less than 110% of the average of the previous three fiscal years (i.e.2021 - 2023).
In 2023, the Company’s Restricted Share Incentive Plan in 2022 recognised equity incentiveexpenses of RMB39,869,660.23.
(4) Restricted Share Incentive Plan in 2023
According to the resolutions of the 18th Meeting of the 2nd Board of Directors of the Company andthe 2022 Annual General Meeting, the Company granted 2,189,848 restricted shares to 750 employeeswho met the conditions for the grant at a price of RMB48.95 per share on 9 June 2023.
The main performance appraisal requirements for restricted shares in 2023: For the first releaseperiod, the performance appraisal target was the operating revenue or net profit attributable to theshareholders of the listed company in 2023 was not less than 110% of the average of the previous threefiscal years (i.e. 2020 - 2022); for the second release period, the performance appraisal target was theoperating revenue or net profit attributable to the shareholders of the listed company in 2024 was not lessthan 110% of the average of the previous three fiscal years (i.e. 2021 - 2023); for the third release period,the performance appraisal target was the operating revenue or net profit attributable to the shareholders ofthe listed company in 2025 was not less than 110% of the average of the previous three fiscal years (i.e.2022 - 2024).
In 2023, the Company’s restricted Share Incentive Plan in 2023 recognised equity incentive expensesof RMB39,810,225.87.
3. Cash-settled share-based payments
□Applicable√Not applicable
4. Share-based payments in the current period
√Applicable □Not applicable
Unit: RMB
| Type of awardee | Equity-settled share-based | Cash-settled share-based |
| payments | payments | |
| Management | 91,163,501.17 | |
| Total | 91,163,501.17 |
5. Modification and termination of share-based payments
□Applicable√Not applicable
6. Others
√Applicable □Not applicable
On 23 April 2020, the Company held the 11th Meeting of the 1st Board of Directors, where theSpecial Talent Shareholding Plan (hereinafter referred to as the “shareholding plan”) was deliberated andadopted, which granted shares of the Shareholding Plan to eligible employees of the Company. Thenumber of people involved included supervisors, specially introduced talents and talents with specialcontribution. The source of funds for the shareholding plan is the special fund of the shareholding planaccrued by the Company, and the total amount is RMB50 million. The total number of shares in theshareholding plan is 50 million, with an amount of RMB1 per share.As of 31 December 2023, the Company had granted 40,425,393 shares under the shareholding plan,with 9,574,607 ungranted shares. The Company presents the granted share of the plan as the long-termprepaid expense, confirmed the amortisation of expense by the evaluation period, and presents the portionnot granted as the other non-current assets. In 2023, the Company’s amortisation by service period wasincluded in the administrative expense of RMB7,145,058.80.
XVI Commitments and Contingencies
1. Significant commitments
√Applicable□Not applicable
Significant ongoing commitments on the balance sheet date, as well as the nature and amounts involved:
As of 31 December 2023, the Company’s investment projects with funds raised through publicoffering are as follows:
| Project | Raised funds investment amount (RMB’0,000) | Cumulatively used amount of raised funds (RMB’0,000) |
| Construction project for a base with annual output of 180 million sets of LED lamps, and R&D centre and headquarters | 115,203.61 | 86,185.73 |
| Channel end construction and brand promotion project | 84,745.75 | 78,268.23 |
| Base construction project for annual output of 410 million sets of wall switches and sockets | 75,452.86 | 50,972.50 |
| Construction project for automation upgrading of annual output of 400 million sets of adaptors | 58,883.63 | 47,836.88 |
| Information technology promotion project | 16,035.00 | 11,038.16 |
| Total | 350,320.85 | 274,301.50 |
2. Contingencies
(1) Significant ongoing contingencies on the balance sheet date
□Applicable √Not applicable
(2) The Company shall make it clear if it has no significant contingencies that are required to bedisclosed.
□Applicable √Not applicable
(3) Other information
□Applicable √Not applicable
XVII Events after the Balance Sheet Date
1. Significant non-adjustment matters
□Applicable √Not applicable
2. Profit distribution
√Applicable□Not applicable
Unit: RMB
| Profit or dividends to be distributed | 2,763,776,569.90 |
| Approved and declared profit or dividends to be distributed |
3. Return of sales
□Applicable √Not applicable
4. Other events after the balance sheet date
√Applicable□Not applicable
(1) The 2024 Restricted Share Incentive Plan
According to the 2024 Restricted Share Incentive Plan approved at the Second Meeting of the ThirdBoard of Directors on 25 April 2024, the Company intends to grant a total of 2,430,000 restricted sharesto 888 awardees at a certain price. The plan is subject to final approval by a general meeting ofshareholders.The restricted shares granted under the incentive plan will be subject to performance appraisal inthree unlocking years/periods, with the achievement of the performance requirements as the condition forthe unlocking of the restricted shares for the awardees. For the first unlocking period, the operating revenueor net profit in 2024 shall be no less than the average of the previous three fiscal years (i.e. 2021-2023)and no less than 110% of the average of the previous two fiscal years (i.e. 2022-2023); for the secondunlocking period, the operating revenue or net profit in 2025 shall be no less than the average of theprevious three fiscal years (i.e. 2022-2024) and no less than 110% of the average of the previous two fiscalyears (i.e. 2023-2024); and for the third unlocking period, the operating revenue or net profit in 2026 shallbe no less than the average of the previous three fiscal years (i.e. 2023-2025) and no less than 110% of theaverage of the previous two fiscal years (i.e. 2024-2025).
(2) 2024 Special Talent Shareholding Plan
According to the 2024 Special Talent Shareholding Plan passed at the 2nd Meeting of the 3rd Boardof Directors held by the Company on 25 April 2024, the Company plans to offer equity incentives to thetalent playing a crucial role in the Company's overall operating performance and its medium- and long-term development, including directors (independent directors are not eligible unless otherwise specified),supervisors, senior management, and core talent. The source of relevant funds is the Company's employeelong-term incentive rewards.
The underlying shares obtained in each batch of this shareholding plan (including first granting andreserved granting) are granted in four phases. The proportion of underlying shares granted in each phase
is 25%, 25%, 25%, and 25%, respectively. The underlying shares of a first granting shall be grantedrespectively after 12 months, 24 months, 36 months, or 48 months from the date when the Companyreleases them to this shareholding plan for the first time. The underlying shares of a reserved grantingshall be granted respectively after 12 months, 24 months, 36 months, or 48 months from the releasing dateaccording to the reserved granting agreement. The actual releasing proportion and number of theunderlying shares in each year shall be determined based on the Company's operating performance andrelevant individual performance assessment.
If the Company's operating performance targets concerning this shareholding plan are achieved, themanagement committee will sell the batch of corresponding underlying shares according to marketconditions and the proceeds will be distributed to holders based on their holding proportions afterdeducting relevant taxes (including personal income tax) in accordance with the law, or transfer thecorresponding underlying shares to a holder's personal securities account in a non-trading manner.Unallocated underlying shares and relevant dividends belong to the Company.To meet the performance assessment target for releasing each batch of underlying shares concerningthe shareholding plan, the operating revenue or net profit in the current year shall not be lower than theaverage of the previous three fiscal years and also not be less than 110% of the average of the previoustwo fiscal years.
(3) The Company's share repurchase plan
The Company held the Second Meeting of the Third Board of Directors on 25 April 2024, where itintended to repurchase its shares through a call auction transaction with its own funds, and the repurchaseprice shall not exceed RMB156 per share (inclusive); the total amount of repurchase shall not be less thanRMB250,000,000 (inclusive) and shall not exceed RMB350,000,000 (inclusive), and the repurchaseperiod shall be within 12 months from the date when the Company's Board of Directors deliberates andadopts the repurchase scheme.
The shares repurchased by the Company will be used for equity incentives at an appropriate time inthe future, and will be granted within three years after the date of the announcement of the implementationof the share repurchase and the announcement of the change of shares. If it is not granted, the Companywill perform the procedures for deducting the registered capital in accordance with the law, and the sharesnot transferred will be retired.
XVIII Other Significant Events
1. Correction of prior accounting errors
(1) Retrospective restatement method
□Applicable √Not applicable
(2) Prospective application method
□Applicable √Not applicable
2. Significant debt restructuring
□Applicable √Not applicable
3. Swap of assets
(1) Swap of non-monetary assets
□Applicable √Not applicable
(2) Swap of other assets
□Applicable √Not applicable
4. Annuity plans
□Applicable √Not applicable
5. Discontinued operations
□Applicable √Not applicable
6. Segment information
(1) Basis for the determination of the reporting segment and accounting policies
√Applicable□Not applicable
The Company determines the reporting segments on the basis of the regional divisions, the revenuefrom principal operations and the cost of principal operations are divided based on the final sales places,and the assets and liabilities are divided based on the locations of the operating entities.
(2) Financial information of reporting segments
√Applicable □Not applicable
Unit: RMB
| Item | Domestic | Overseas operations of domestic companies | Overseas operations of overseas companies | Offset among segments | Total |
| Revenue from principal operations | 15,494,120,354.44 | 175,092,663.92 | 18,294.96 | 15,669,231,313.32 | |
| Cost of principal operations | 8,772,144,247.50 | 127,323,040.66 | 8,899,467,288.16 |
| Item | Domestic | Overseas | Offset among segments | Total |
| Total assets | 19,739,114,169.42 | 23,091,555.51 | 19,761,948,042.96 | |
| Total liabilities | 5,301,788,871.97 | 5,307.23 | 5,301,483,026.64 |
(3) Reasons shall be given if the Company has no reporting segments or is unable to disclose thetotal assets and liabilities of the reporting segments.
□Applicable √Not applicable
(4) Other information
□Applicable √Not applicable
7. Other significant transactions and matters that may affect decision-making of investors
□Applicable √Not applicable
8. Other information
□Applicable √Not applicable
XIX Notes to Key Items of the Financial Statements of the Company as the Parent
1. Accounts receivable
(1) Breakdown by aging
√Applicable □Not applicable
Unit: RMB
| Aging | Closing gross amount | Opening gross amount |
| Within 1 year | ||
| Of which: Sub-items within 1 year | ||
| Within 1 year | 294,467,965.34 | 359,382,480.21 |
| Subtotal within 1 year | 294,467,965.34 | 359,382,480.21 |
| 1 to 2 years | ||
| 2 to 3 years | ||
| Over 3 years | ||
| 3 to 4 years | ||
| 4 to 5 years | ||
| Over 5 years | ||
| Total | 294,467,965.34 | 359,382,480.21 |
(2) Breakdown by method of establishing bad debt provisions
√Applicable□Not applicable
Unit: RMB
| Type | Closing balance | Opening balance | ||||||||
| Gross amount | Bad debt provision | Carrying amount | Gross amount | Bad debt provision | Carrying amount | |||||
| Amount | Percentage (%) | Amount | Provision percentage (%) | Amount | Percentage (%) | Amount | Provision percentage (%) | |||
| Bad debt provision established on an individual basis | ||||||||||
| Bad debt provision established on a grouping basis | 294,467,965.34 | 100.00 | 14,723,398.27 | 5.00 | 279,744,567.07 | 359,382,480.21 | 100.00 | 17,969,124.01 | 5.00 | 341,413,356.20 |
| Total | 294,467,965.34 | / | 14,723,398.27 | / | 279,744,567.07 | 359,382,480.21 | / | 17,969,124.01 | / | 341,413,356.20 |
(3) Bad debt provision
√Applicable□Not applicable
Unit: RMB
| Type | Opening balance | Changes for the current period | Closing balance | |||
| Established | Recovered or reversed | Transferred or written-off | Other changes | |||
| Bad debt provision established on a grouping basis | 17,969,124.01 | -3,245,725.74 | 14,723,398.27 | |||
| Total | 17,969,124.01 | -3,245,725.74 | 14,723,398.27 |
(4) Accounts receivable written off in the current period
□Applicable√Not applicable
Significant accounts receivable written off:
□Applicable√Not applicable
Notes to the accounts receivable written off:
□Applicable√Not applicable
(5) Top five entities with respect to accounts receivable and contract assets
√Applicable □Not applicable
Unit: RMB
| Entity | Closing balance of accounts receivable | Closing balance of contract assets | Closing balance of accounts receivable and contract assts combined | As % of the closing balance of total accounts receivable and contract assts combined | Closing balance of bad debt provision |
| Information Technology | 176,686,946.05 | 176,686,946.05 | 60.00 | 8,834,347.30 | |
| Electric Sales | 113,146,238.40 | 113,146,238.40 | 38.42 | 5,657,311.92 | |
| China Railway Construction Group Co., Ltd. | 992,800.00 | 992,800.00 | 0.34 | 49,640.00 | |
| Intelligent Technology | 747,334.44 | 747,334.44 | 0.25 | 37,366.72 | |
| Chongqing Seres New Electric Vehicle Sales Co., Ltd. | 490,495.95 | 490,495.95 | 0.17 | 24,524.80 | |
| Total | 292,063,814.84 | 292,063,814.84 | 99.18 | 14,603,190.74 |
2. Other receivables
Breakdown
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance |
| Interests receivable | ||
| Dividends receivable | 1,100,000,000.00 | 1,700,000,000.00 |
| Other receivables | 833,070,108.44 | 1,056,026,303.85 |
| Total | 1,933,070,108.44 | 2,756,026,303.85 |
Interest receivable
(1) Classification of interest receivable
□Applicable√Not applicable
(2) Significant overdue interest
□Applicable√Not applicable
(3) Breakdown by method of bad debt provision establishment
□Applicable√Not applicable
(4) Bad debt provision established using the general model of expected credit loss
□Applicable√Not applicable
Significant change in the gross amount of interest receivable with change in loss provision in the period:
□Applicable√Not applicable
(5) Bad debt provision
□Applicable√Not applicable
(6) Interest receivable written off in the current period
□Applicable√Not applicable
Dividends receivable
(7) Dividends receivable
√Applicable□Not applicable
Unit: RMB
| Item (or investee) | Closing balance | Opening balance |
| Ningbo Goneo | 1,100,000,000.00 | 1,200,000,000.00 |
| Electric Sales | 500,000,000.00 | |
| Total | 1,100,000,000.00 | 1,700,000,000.00 |
(8) Significant dividends receivable that are over one year
□Applicable√Not applicable
(9) Breakdown by method of bad debt provision establishment
□Applicable√Not applicable
(10) Bad debt provision established using the general model of expected credit loss
□Applicable√Not applicable
Significant change in the gross amount of dividends receivable with change in loss provision in the period:
□Applicable√Not applicable
(11) Bad debt provision
□Applicable√Not applicable
(12) Dividends receivable written off in the current period
□Applicable√Not applicable
Other receivables
(13) Breakdown by aging
√Applicable□Not applicable
Unit: RMB
| Aging | Closing gross amount | Opening gross amount |
| Within 1 year | ||
| Of which: Sub-items within 1 year | ||
| Within 1 year | 731,770,734.60 | 437,048,066.18 |
| Subtotal within 1 year | 731,770,734.60 | 437,048,066.18 |
| 1 to 2 years | 152,898,549.49 | 711,594,599.88 |
| 2 to 3 years | 558,432.05 | 791,002.18 |
| Over 3 years | 729,436.58 | 1,570,245.20 |
| 3 to 4 years | ||
| 4 to 5 years | ||
| Over 5 years | ||
| Total | 885,957,152.72 | 1,151,003,913.44 |
(14) Breakdown by nature
√Applicable□Not applicable
Unit: RMB
| Nature | Closing gross amount | Opening gross amount |
| Intercourse funds | 881,424,411.48 | 1,143,058,695.61 |
| Guaranteed deposit | 1,694,367.06 | 1,858,945.12 |
| Housing loan for employees | 2,053,072.80 | 4,768,468.33 |
| Others | 785,301.38 | 1,317,804.38 |
| Total | 885,957,152.72 | 1,151,003,913.44 |
(15) Bad debt provision
√Applicable□Not applicable
Unit: RMB
| Bad debt provision | Stage 1 | Stage 2 | Stage 3 | Total |
| 12-month expected credit loss | Lifetime expected credit loss (without credit impairment) | Lifetime expected credit loss (with credit impairment) | ||
| Balance of 1 January 2023 | 21,852,403.31 | 71,159,459.99 | 1,965,746.29 | 94,977,609.59 |
| Balance of 1 January 2023 in the Current Period | ||||
| - Transferred to Stage 2 | -7,644,927.47 | 7,644,927.47 | ||
| - Transferred to Stage 3 | -55,843.21 | 55,843.21 | ||
| - Transferred back to Stage 2 | ||||
| - Transferred back to Stage 1 | ||||
| Amount accrued for the current period | 22,381,060.88 | -63,458,689.30 | -1,012,936.89 | -42,090,565.31 |
| Amount transferred-back for the current period | ||||
| Amount charged-off for the current period | ||||
| Amount written-off for the current period | ||||
| Other changes | ||||
| Balance as at 31 December 2023 | 36,588,536.72 | 15,289,854.95 | 1,008,652.61 | 52,887,044.28 |
Significant change in the gross amount of an other receivable with change in loss provision in the period:
□Applicable√Not applicable
(16) Bad debt provision
√Applicable□Not applicable
Unit: RMB
| Type | Opening balance | Changes for the current period | Closing balance | |||
| Established | Reversed or transferred-back | Charged-off/Written-off | Other changes | |||
| Bad debt provision established on a grouping basis | 94,977,609.59 | -42,090,565.31 | 52,887,044.28 | |||
| Total | 94,977,609.59 | -42,090,565.31 | 52,887,044.28 | |||
Of which the bad debt provision recovered or transferred-back with significant amount during thecurrent period:
□Applicable√Not applicable
(17) Other receivables written off in the current period
□Applicable√Not applicable
Significant other receivables written off:
□Applicable√Not applicable
Notes to the other receivables written off:
□Applicable√Not applicable
(18) Top five entities with respect to other receivables
√Applicable□Not applicable
Unit: RMB
| Entity | Closing balance | As % of the closing balance of total other receivables | Nature of other receivable | Aging | Closing balance of bad debt provision |
| Ningbo Goneo | 307,049,080.03 | 34.66 | Transaction amount | Within 1 year | 15,352,454.00 |
| 38,494,341.56 | 4.34 | Transaction amount | 1-2 years | 3,849,434.16 | |
| Electric Sales | 255,432,408.44 | 28.83 | Transaction amount | Within 1 year | 12,771,620.42 |
| Cixi Goneo | 64,000,000.00 | 7.22 | Transaction amount | Within 1 year | 3,200,000.00 |
| 112,700,000.00 | 12.72 | Transaction amount | 1-2 years | 11,270,000.00 | |
| Goneo Photoelectricity | 70,568,493.67 | 7.97 | Transaction amount | Within 1 year | 3,528,424.68 |
| Information Technology | 30,848,038.18 | 3.48 | Transaction amount | Within 1 year | 1,542,401.91 |
| Total | 879,092,361.88 | 99.22 | / | / | 51,514,335.17 |
(19) Centrally managed funds presented in other receivables
□Applicable√Not applicable
3. Long-term equity investments
√Applicable□Not applicable
Unit: RMB
| Item | Closing balance | Opening balance | ||||
| Gross amount | Impairment provision | Carrying amount | Gross amount | Impairment provision | Carrying amount | |
| Investments in subsidiaries | 805,126,253.60 | 62,736,731.14 | 742,389,522.46 | 688,178,210.52 | 688,178,210.52 | |
| Investments in joint ventures and associates | ||||||
| Total | 805,126,253.60 | 62,736,731.14 | 742,389,522.46 | 688,178,210.52 | 688,178,210.52 | |
(1) Investments in subsidiaries
√Applicable□Not applicable
Unit: RMB
| Investee | Opening balance | Increase in the current period | Decrease in the current period | Closing balance | Impairment provision established in the current period | Closing balance of impairment provision |
| Ningbo Goneo | 156,847,510.96 | 15,247,961.84 | 172,095,472.80 | |||
| Goneo Photoelectricity | 22,266,150.16 | 6,435,640.46 | 28,701,790.62 | |||
| Goneo Digital | 21,036,126.97 | 6,690,670.01 | 27,726,796.98 | |||
| Banmen Electrical Appliances | 11,834,384.06 | 289,762.45 | 12,124,146.51 | |||
| Goneo Precision Manufacturing | 104,730,804.30 | 2,930,339.07 | 107,661,143.37 | |||
| Cixi Goneo | 43,569,472.13 | 7,932.84 | 43,577,404.97 | |||
| Shanghai Goneo | 42,319,121.07 | 402,841.31 | 42,721,962.38 | |||
| Goneo Management | 30,127,384.46 | 96,591.41 | 30,223,975.87 | |||
| Goneo International Trade | 3,331,613.44 | 46,270.94 | 3,285,342.50 | |||
| Electric Sales | 21,810,748.47 | 6,918,407.74 | 28,729,156.21 | |||
| Xingluo Trading | 9,910,274.20 | 9,910,274.20 | ||||
| Goneo Low Voltage | 2,937,223.01 | 1,058,722.33 | 3,995,945.34 | |||
| Household Electrical Appliances | 5,463,647.05 | 4,493,459.14 | 9,957,106.19 | |||
| Hainan Dacheng | 10,000,000.00 | 10,000,000.00 | ||||
| Intelligent Technology | 2,929,997.01 | 1,655,655.00 | 4,585,652.01 | |||
| Dalitek | 91,000,000.00 | 91,000,000.00 | 62,736,731.14 | 62,736,731.14 | ||
| Information technology | 104,999,859.03 | 9,612,836.02 | 114,612,695.05 | |||
| Goneo New Energy | 600,000.00 | 9,926,482.71 | 10,526,482.71 |
| Shenzhen Intelligent | 1,271,829.22 | 3,227,461.01 | 4,499,290.23 | |||
| Murora Intelligent | 1,192,064.98 | 15,252,892.66 | 16,444,957.64 | |||
| Goneo HK | 23,749,318.78 | 23,749,318.78 | ||||
| Goneo Tools | 6,200,000.00 | 6,200,000.00 | ||||
| Goneo Marketing | 2,797,339.24 | 2,797,339.24 | ||||
| Total | 688,178,210.52 | 116,994,314.02 | 46,270.94 | 805,126,253.60 | 62,736,731.14 | 62,736,731.14 |
[Note] The investment in Goneo International Trade was reduced by RMB46,270.94 in the current perioddue to the reversal of previously recognized equity incentive expense as a result of the resignation of equityincentive employee before the unlocking in the current period.
(2) Investments in joint ventures and associates
□Applicable√Not applicable
(3) Impairment tests of long-term equity investments
4. Operating revenue and cost of sales
(1) Details of operating revenue and cost of sales
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 | ||
| Revenue | Costs | Revenue | Costs | |
| Principal operations | 6,013,474,226.02 | 4,189,846,946.77 | 5,488,247,628.07 | 4,258,503,387.22 |
| Other operations | 32,739,253.21 | 17,370,305.83 | 39,346,073.23 | 21,125,679.79 |
| Total | 6,046,213,479.23 | 4,207,217,252.60 | 5,527,593,701.30 | 4,279,629,067.01 |
| Of which: Revenue generated by contracts with customers | 6,024,523,530.53 | 4,195,601,773.35 | 5,503,428,124.33 | 4,271,075,267.90 |
(2) Breakdown of operating revenue and cost of sales
□Applicable√Not applicable
Other notes:
□Applicable√Not applicable
(3) Notes to contract performance obligations
□Applicable√Not applicable
(4) Notes to allocation to residual contract performance obligations
□Applicable√Not applicable
(5) Significant contract change or significant adjustment to the transaction price
□Applicable√Not applicable
5. Return on investment
√Applicable□Not applicable
Unit: RMB
| Item | 2023 | 2022 |
| Return on long-term equity investments measured using the cost method | 1,500,000,000.00 | 1,700,000,000.00 |
| Return on long-term equity investments measured using the equity method | ||
| Income from the disposal of long-term equity investments | ||
| Income derived during the period of holding held-for-trading financial assets | ||
| Dividend income derived during the period of holding other equity investments | ||
| Interest income derived during the period of holding debt investments | ||
| Interest income derived during the period of holding other debt investments | ||
| Income from the disposal of held-for-trading financial assets | ||
| Income from the disposal of other equity investments | ||
| Income from the disposal of debt investments | ||
| Income from the disposal of other debt investments | ||
| Income from debt restructuring | ||
| Return on investments in bank’s wealth management products, etc. | 57,162,295.01 | 111,912,481.21 |
| Total | 1,557,162,295.01 | 1,811,912,481.21 |
6. Other information
□Applicable√Not applicable
XX Supplementary Information
1. Schedule of exceptional gains and losses in the current period
√Applicable□Not applicable
Unit: RMB
| Item | Amount | Note |
| Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) | -5,614,733.30 | |
| Government grants recognised in profit or loss (exclusive of those that are closely related to the Company's normal business operations and given in accordance with defined criteria and in compliance with government policies, and have a continuing impact on the Company's profit or loss) | 191,833,723.62 | |
| Gain or loss on fair-value changes in financial assets and liabilities held by a non-financial enterprise, as well as on disposal of financial assets and liabilities (exclusive of the effective portion of hedges that is related to the Company's normal business operations) | 7,786,015.00 |
| Capital occupation charges on a non-financial enterprise that are recognised in profit or loss | 331,702.44 | |
| Gain or loss on assets entrusted to other entities for investment or management | 190,904,769.99 | |
| Gain or loss on loan entrustments | ||
| Asset losses due to acts of God such as natural disasters | ||
| Reversed portions of impairment allowances for receivables which are tested individually for impairment | ||
| Gain equal to the amount by which investment costs for the Company to obtain subsidiaries, associates and joint ventures are lower than the Company’s enjoyable fair value of identifiable net assets of investees when making investments | ||
| Current profit or loss on subsidiaries obtained in business combinations involving entities under common control from the period-begin to combination dates, net | ||
| Gain or loss on non-monetary asset swaps | ||
| Gain or loss on debt restructuring | ||
| One-off costs incurred by the Company as a result of discontinued operations, such as expenses for employee arrangements | ||
| One-time effect on profit or loss due to adjustments in tax, accounting and other laws and regulations | ||
| One-time share-based payments recognized due to cancellation and modification of equity incentive plans | ||
| Gain or loss on changes in the fair value of employee benefits payable after the vesting date for cash-settled share-based payments | ||
| Gain or loss on fair-value changes in investment property of which subsequent measurement is carried out using the fair value method | ||
| Income from transactions with distinctly unfair prices | ||
| Gain or loss on contingencies that are unrelated to the Company's normal business operations | ||
| Income from charges on entrusted management | ||
| Non-operating income and expense other than the above | -172,631,226.63 | |
| Other gains and losses that meet the definition of exceptional gain/loss | ||
| Less: Income tax effects | 45,407,663.66 | |
| Non-controlling interests effects (net of tax) | 255,755.27 | |
| Total | 166,946,832.19 |
Items unlisted in the Explanatory Announcement No. 1 on Information Disclosure for Companies OfferingTheir Securities to the Public—Exceptional Gain/Loss Items are identified as exceptional and the itemsare of a significant amount, and exceptional gain/loss items listed in the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public—ExceptionalGain/Loss Items are identified as recurrent.
□ Applicable √ Not applicable
Other notes:
□ Applicable √ Not applicable
2. Return on equity (ROE) and earnings per share (EPS)
√Applicable□Not applicable
| Profit in the Reporting Period | Weighted average ROE (%) | EPS | |
| Basic earnings per share | Diluted earnings per share | ||
| Net profit attributable to ordinary shareholders of the Company | 29.20 | 4.36 | 4.36 |
| Net profit attributable to ordinary shareholders of the Company before exceptional gains and losses | 27.94 | 4.18 | 4.17 |
3. Accounting data differences under domestic and overseas accounting standards
□ Applicable √ Not applicable
4. Other information
□ Applicable √ Not applicable
Chairman of the Board: Ruan LipingDate when this Report was authorized for issue: 25 April 2024
Revised information:
□Applicable √Not applicable