Stock Code: 603605 Stock Abbreviation: ProyaBond Code: 113634 Bond Abbreviation : Proya Convertible Bond
Proya Cosmetics Co., Ltd.Annual Report 2022
Important Notes
I. The Board of Directors, Board of Supervisors, directors, supervisors and senior management
of the Company warrant that the content of the Annual Report is authentic, accurate andcomplete, free from false records, misleading statements and major omissions, and shall bejointly and severally liable therefore.
II. All directors of the Company attended the meeting of the Board of Directors.
III. Pan-China Certified Public Accountants (Special General Partnership) has issued a standard
unqualified audit report to the Company.
IV. HOU Juncheng, chairman of the Company, and WANG Li, CFO of the Company and Head
of Accounting Department, represent and warrant that the financial report in the AnnualReport is authentic, accurate and complete.
V. The profit distribution plan or capital reserve capitalization plan for the Reporting Period
approved by the Board of DirectorsBased on the total share capital as of the record date on which equity distribution is implemented, theCompany proposes to distribute to all shareholders registered a cash dividend of RMB8.7 (tax inclusive)per 10 shares, and convert the capital reserve into share capital in the proportion of 4 shares for every 10shares held, but give no bonus shares. Based on the total share capital of 283,519,469 shares on December31, 2022, it is estimated that the cash dividend to be distributed will amount to RMB246,661,938.03 (taxinclusive) and a total of 113,407,788 shares will be converted.In case of a change in the Company's total share capital due to the conversion of convertible bonds beforethe record date for equity distribution, the Company maintain the said distribution and conversation ratiosand yet adjust the total distribution and conversion amounts.
VI. Disclosure of risks involved in forward-looking statements
√ Applicable □ Not applicable
Any future plan, development strategy and other descriptions contained in the forward-looking statementsherein shall not be deemed as the Company's substantial commitments to investors. Investors should notethat investment involves risks.
VII. Whether there is any non-operating capital occupation by a controlling shareholder and
other related partiesNo
VIII. Whether there is any external guarantee provided in violation of specified decision-making
proceduresNo
IX. Whether the majority of the directors are unable to warrant the authenticity, accuracy and
completeness of the Annual Report disclosed by the CompanyNo
X. Major risk tipsThe Company has described the existing risks in details in this Report. Refer to "(IV) Possible risks", "VI.Discussion and Analysis of the Company's Future Development", "Section III Management Discussionand Analysis".
XI. Other
□ Applicable √ Not applicable
Contents
Section I Definitions ...... 5
Section II Company Profile and Key Financial Indicators ...... 7
Section III Management Discussion and Analysis ...... 13
Section IV Corporate Governance ...... 50
Section V Environmental and Social Responsibility ...... 72
Section VI Important Matters ...... 77
Section VII Shareholders and Changes in Shares ...... 105
Section VIII Information on Preference Shares ...... 115
Section IX Information on Bonds ...... 116
Section X Financial Report ...... 119
Documents Available for Inspection | Financial statements signed and sealed by the Legal Representative, CFO of the Company, and person in charge of Accounting Department |
Original copy of the audit report stamped by the accounting firm and signed and sealed by certified public accountants. | |
Original copies of all documents and announcements of the Company disclosed during the Reporting Period in newspapers designated by China Securities Regulatory Commission. |
Section I DefinitionsI. DefinitionsIn this report, unless the context otherwise requires, the following terms have the following meanings:
Definition | ||
Proya Cosmetics, this Company, or the Company | refers to | Proya Cosmetics Co., Ltd. |
Huzhou Branch | refers to | Huzhou Branch of Proya Cosmetics Co., Ltd., a branch of the Company |
Shanghai Branch | refers to | Shanghai Branch of Proya Cosmetics Co., Ltd., a branch of the Company |
Proya Trade | refers to | Hangzhou Proya Trade Co., Ltd., a wholly-owned subsidiary of the Company |
Korea Hanna | refers to | Hanna Cosmetics Co., Ltd., a wholly-owned subsidiary of the Company |
Anya (Huzhou) | refers to | Anya (Huzhou) Cosmetics Co., Ltd., a wholly-owned subsidiary of Korea Hanna |
Yueqing Laiya | refers to | Yueqing Laiya Trading Co., Ltd., a wholly-owned subsidiary of the Company |
Huzhou UZERO | refers to | Huzhou UZERO Trading Co., Ltd., a wholly-owned subsidiary of the Company |
Mijing Siyu (Hangzhou) | refers to | Mijing Siyu (Hangzhou) Cosmetics Co., Ltd., a wholly-owned subsidiary of the Company |
Meiligu | refers to | Zhejiang Meiligu Electronic Commerce Co., Ltd., a wholly-owned subsidiary of the Company |
Chuangdai Electronics | refers to | Huzhou Chuangdai E-commerce Co., Ltd., a wholly-owned subsidiary of Meiligu |
Hangzhou Boxin | refers to | Hangzhou Boxin Trading Co., Ltd., a wholly-owned subsidiary of Meiligu |
Hapsode (Hangzhou) | refers to | Hapsode (Hangzhou) Cosmetics Co., Ltd., a wholly-owned subsidiary of the Company |
Korea Hapsode | refers to | Hapsode Co., Ltd., a wholly-owned subsidiary of Hapsode (Hangzhou) |
Huzhou Hapsode | refers to | Huzhou Hapsode Trading Co., Ltd., a wholly-owned subsidiary of Hapsode (Hangzhou) |
Danyang Hapsode | refers to | Danyang Hapsode Cosmetics Trading Co., Ltd., a wholly-owned subsidiary of Hapsode (Hangzhou) |
Proya Commercial | refers to | Hangzhou Proya Commercial Management Co., Ltd., a wholly-owned subsidiary of the Company |
Tiedingxian | refers to | Hangzhou Tiedingxian Catering Management Co., Ltd., a holding subsidiary of Proya Commercial |
Tielexin Aini | refers to | Hangzhou Tielexin Aini Catering Management Co., Ltd., a wholly-owned subsidiary of Proya Commercial |
Xiake Bar | refers to | Hangzhou Xiake Bar Catering Management Co., Ltd., a wholly-owned subsidiary of Proya Commercial |
Luxiaotie | refers to | Hangzhou Luxiaotie Fitness Co., Ltd., a wholly-owned subsidiary of Proya Commercial |
Donghai Wangchao | refers to | Hangzhou Donghai Wangchao Catering Management Co., Ltd., a wholly-owned subsidiary of Proya Commercial |
Hong Kong Keshi | refers to | Hong Kong Keshi Trading Co., Ltd., a holding subsidiary of the Company |
Hongkong Xinghuo | refers to | Hongkong Xinghuo Industry Limited, a wholly-owned subsidiary of the Company |
Hong Kong Zhongwen | refers to | Hong Kong Zhongwen Electronic Commerce Co., Limited, a wholly-owned subsidiary of Hongkong Xinghuo |
Hong Kong Xuchen | refers to | Hong Kong Xuchen Trading Limited, a wholly-owned subsidiary of Hongkong Xinghuo |
Proya Luxembourg | refers to | Proya Europe SARL, a wholly-owned subsidiary of Hongkong Xinghuo |
Shanghai Zhongwen | refers to | Shanghai Zhongwen Electronic Commerce Co., Ltd., a wholly-owned subsidiary of the Company |
Huzhou Niuke | refers to | Huzhou Niuke Technology Co., Ltd., a holding subsidiary of the Company |
Hangzhou Wanyan | refers to | Hangzhou Wanyan Culture Media Co., Ltd., a wholly-owned subsidiary of Huzhou Niuke |
Hong Kong Wanyan | refers to | Hong Kong Wanyan Electronic Commerce Co., Limited, a wholly-owned subsidiary of Huzhou Niuke |
Huzhou Younimi | refers to | Huzhou Younimi Cosmetics Co., Ltd., a wholly-owned subsidiary of the Company |
Korea Younimi | refers to | Korea Younimi Cosmetics Co., Ltd., a holding subsidiary of the Company |
Ningbo TIMAGE | refers to | Ningbo TIMAGE Cosmetics Co., Ltd., a holding subsidiary of the Company |
Hangzhou TIMAGE | refers to | Hangzhou TIMAGE Cosmetics Co., Ltd., a wholly-owned subsidiary of Ningbo TIMAGE |
Ningbo Keshi | refers to | Ningbo Keshi Trading Limited, a holding subsidiary of the Company |
Zhejiang Beute | refers to | Zhejiang Beute Cosmetics Co., Ltd., a wholly-owned subsidiary of the Company |
Ningbo Proya | refers to | Ningbo Proya Enterprise Consulting Management Co., Ltd., a wholly-owned subsidiary of the Company |
Zhejiang Qingya | refers to | Zhejiang Qingya Culture Art Communication Co., Ltd., a holding subsidiary of the Company |
Boya (Hong Kong) | refers to | Boya (Hong Kong) Investment Management Co., Limited, a wholly-owned subsidiary of the Company |
Japan OR | refers to | O&R Co., Ltd., a holding subsidiary of Boya (Hong Kong) |
Ningbo Tangyu | refers to | Ningbo Tangyu Trading Co., Ltd., a wholly-owned subsidiary of Japan OR |
Hangzhou Weiluoke | refers to | Hangzhou Weiluoke Cosmetics Co., Ltd., a wholly-owned subsidiary of the Company |
Hangzhou Yizhuo | refers to | Hangzhou Yizhuo Culture Media Co., Ltd., a wholly-owned subsidiary of the Company |
Hangzhou Oumisi | refers to | Hangzhou Oumisi Trading Co., Ltd., a wholly-owned subsidiary of the Company |
Guangzhou Qianxi | refers to | Guangzhou Qianxi Network Technology Co., Ltd., a wholly-owned subsidiary of the Company |
Proya (Hainan) | refers to | Proya (Hainan) Cosmetics Co., Ltd., a wholly-owned subsidiary of the Company |
Singuladerm (Hangzhou) | refers to | Shenggelan (Hangzhou) Cosmetics Co., Ltd., a wholly-owned subsidiary of the Company |
Xuzhou Laibo | refers to | Xuzhou Laibo Information Technology Co., Ltd., a wholly-owned subsidiary of the Company |
Proya (Zhejiang) | refers to | Proya (Zhejiang) Cosmetics Co., Ltd., a wholly-owned subsidiary of the Company |
CSRC | refers to | China Securities Regulatory Commission |
SSE | refers to | Shanghai Stock Exchange |
Pan-China | refers to | Pan-China Certified Public Accountants (Special General Partnership) |
CSC | refers to | China Securities Co., Ltd. |
Company Law | refers to | Company Law of the People's Republic of China |
Securities Law | refers to | Securities Law of the People's Republic of China |
Articles of Association | refers to | Articles of Association of Proya Cosmetics Co., Ltd. |
RMB/RMB’0,000 | refers to | Renminbi Yuan/Renminbi 10,000 Yuan |
Reporting Period | refers to | January 1, 2022 to December 31, 2022 |
Section II Company Profile and Key Financial IndicatorsI. Company Information
Chinese name of the Company | Proya Cosmetics Co., Ltd. |
Short name of the Company in Chinese | 珀莱雅 |
English name of the Company | Proya Cosmetics Co., Ltd. |
Abbreviation of English name of the Company | Proya |
Legal representative of the company | HOU Juncheng |
II. Contact Details
Board Secretary | Securities Affairs Representative | |
Name | WANG Li | WANG Xiaoyan |
Mailing address | 10/F, Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province | 10/F, Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province |
Telephone | 0571-87352850 | 0571-87352850 |
Fax | 0571-87352813 | 0571-87352813 |
proyazq@proya.com | proyazq@proya.com |
III. General Information
Registered address | No. 588, Xixi Road, Liuxia Street, Xihu District, Hangzhou City, Zhejiang Province |
Historical changes in the Company's registered address | For details, please refer to the Announcement on Amending the Articles of Association and Applying for Changing Business Registration (No.2019-008) disclosed by the Company on the designated media on February 27, 2019. |
Office address of the Company | Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province |
Postal code of the registered office address | 310023 |
Company website | http://www.proya-group.com |
proyazq@proya.com |
IV. Information Disclosure and Place for Obtaining the Report
Media for the Company's information disclosure | Shanghai Securities News, Securities Times |
CSRC's designated website for the Company's Annual Report disclosure | http://www.sse.com.cn |
The Company's Annual Report may be obtained at | Board of Director's Office, Proya Building, No. 588 Xixi Road, Xihu District, Hangzhou City, Zhejiang Province |
V. Stock Information
Stock Information | ||||
Stock class | Stock exchange | Stock abbreviation | Stock code | Stock abbreviation before changes |
A share | Shanghai Stock Exchange | Proya | 603605 | None |
VI. Other Relevant Information
Auditor of the Company (domestic) | Name | Pan-China Certified Public Accountants (Special General Partnership) |
Office address | Block B, China Resources Building, No. 1366, Qianjiang Road, Jianggan District, Hangzhou | |
Name of the signing accountant | YIN Zhibin, WANG Xiaokang | |
Sponsor performing continuous supervisory duty during the Reporting | Name | China Securities Co., Ltd. |
Office address | Room 2203, North Tower, Shanghai Securities Building, No. 528, Pudong South Road, Shanghai | |
Names of the sponsor's signing representatives | GE Liang, WANG Zhan | |
Period of continuous | January 4, 2022 - December 31, 2023 |
Period | supervision |
VII. Major Accounting Data and Financial Indicators for the Past Three Years(I) Major Accounting Data
Unit: Yuan Currency: RMB
Major accounting data | 2022 | 2021 | Year-on-year change (%) | 2020 |
Operating revenue | 6,385,451,424.00 | 4,633,150,538.43 | 37.82 | 3,752,386,849.02 |
Net profit attributable to shareholders of the listed company | 817,400,223.93 | 576,119,025.56 | 41.88 | 476,009,298.41 |
Net profit attributable to shareholders of the listed company net of non-recurring profit or loss | 788,513,237.01 | 568,092,480.38 | 38.80 | 469,935,904.22 |
Net cash flow from operating activities | 1,111,136,117.23 | 829,670,943.82 | 33.92 | 331,550,109.14 |
As of the end of 2022 | As of the end of 2021 | Year-on-year change (%) | As of the end of 2020 | |
Net assets attributable to shareholders of the listed company | 3,524,488,659.96 | 2,876,975,835.98 | 22.51 | 2,391,535,435.94 |
Total assets | 5,778,071,824.19 | 4,633,049,783.03 | 24.71 | 3,636,882,185.29 |
(II) Key Financial Indicators
Key financial indicators | 2022 | 2021 | Year-on-year change (%) | 2020 |
Basic earnings per share (RMB/share) | 2.90 | 2.87 | 1.05 | 2.37 |
Diluted earnings per share (RMB/share) | 2.87 | 2.81 | 2.14 | 2.37 |
Basic earnings per share net of non-recurring profit and loss (RMB/share) | 2.80 | 2.83 | -1.06 | 2.34 |
Weighted average ROE (%) | 25.95 | 22.25 | Up by 3.70 percentage points | 21.82 |
Weighted average ROE net of non-recurring profit and loss (%) | 25.03 | 21.94 | Up by 3.09 percentage points | 21.54 |
Explanation on the Company's major accounting data and financial indicators for the recent three years as
of the end of the Reporting Period
□ Applicable √ Not applicable
VIII. Differences in Accounting Data under Chinese and International Accounting Standards(I) Difference in net profit and net assets attributable to shareholders of the listed company in thefinancial report disclosed in accordance with International accounting standards and Chineseaccounting standards
□ Applicable √ Not applicable
(II) Differences in net profit and net assets attributable to shareholders of the listed company in
the financial report disclosed in accordance with International accounting standards andChinese accounting standards
□ Applicable √ Not applicable
(III) Description of differences between international and Chinese accounting standards:
□ Applicable √ Not applicable
IX. Major Financial Data for 2022 by Quarter
Unit: Yuan Currency: RMB
Q1 (January - March) | Q2 (April - June) | Q3 (July - September) | Q4 (October - December) | |
Operating revenue | 1,254,357,336.99 | 1,371,585,907.30 | 1,336,130,787.67 | 2,423,377,392.04 |
Net profit attributable to shareholders of the listed company | 158,420,986.20 | 138,518,529.34 | 198,375,641.64 | 322,085,066.75 |
Net profit attributable to shareholders of the listed company net of non-recurring profit and loss | 146,724,879.18 | 134,172,539.35 | 196,100,724.25 | 311,515,094.23 |
Net cash flow from operating activities | 342,107,055.69 | 371,675,074.69 | 58,091,203.29 | 339,262,783.56 |
Description of differences between quarterly data and disclosed regular report data
□ Applicable √ Not applicable
X. Non-recurring Profit and Loss Items and Amounts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Non-recurring profit and loss item | Amount for 2022 | Note (if applicable) | Amount for 2021 | Amount for 2020 |
Gain or loss on disposal of non-current assets | 60,155.60 | -112,183.24 | 150,560.30 | |
Unauthorized approval, no formal |
Non-recurring profit and loss item | Amount for 2022 | Note (if applicable) | Amount for 2021 | Amount for 2020 |
approval, or occasional tax refund or reduction | ||||
Government grants recognized in profit or loss for the current period (excluding government grants that are closely related to the Company's business operations and gained at a fixed amount or quantity according to national standards) | 38,463,732.07 | 15,448,962.01 | 12,198,410.18 | |
Capital occupation fees charged to the non-financial enterprises and included in profit or loss for the current period | ||||
Gains when the investment cost of acquiring a subsidiary, an associate and a joint venture is less than the fair value of the identifiable net assets of the invested entity | ||||
Gains or losses from exchange of non-monetary assets | ||||
Gains or losses from entrusting others with investment or asset management | ||||
Asset impairment provision accrued for force majeure such as natural disasters | ||||
Gains or losses from debt restructuring | ||||
Enterprise restructuring fees, such as staffing expenses and integration fees | ||||
Profit and loss of the part exceeding fair value generated from transaction with unreasonable transaction price | ||||
Current net gains or losses of subsidiaries established by business combination involving enterprises under common control from the beginning of the period to the combination date | ||||
Gains or losses on contingencies that have no relation with the normal operation of the Company | ||||
Gains or losses from change in fair value by held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities, and investment income from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative | 2,266,301.37 |
Non-recurring profit and loss item | Amount for 2022 | Note (if applicable) | Amount for 2021 | Amount for 2020 |
financial liabilities and other debt investments, excluding the effective hedging businesses related with normal operations of the Company | ||||
Reversal of provision for impairment of receivables and contract assets individually tested for impairment | 2,782,350.76 | |||
Gains or losses from outward entrusted loaning | ||||
Gains or losses from changes in the fair values of Investment real estate that are subsequently measured using the fair value model | ||||
Impact of a one-time adjustment on current profit and loss according to the requirements of tax and accounting laws and regulations | ||||
Custody fees of entrusted operation | ||||
Other non-operating revenue and expenses besides the above items | -2,926,959.81 | -3,078,442.83 | -6,810,805.57 | |
Other items that conform to the definition of non-recurring profit or loss | ||||
Less: Effect of income tax | 3,689,885.55 | 1,917,310.27 | 1,042,102.64 | |
Effect of minority equity (after tax) | 5,802,406.15 | 2,314,480.49 | 688,969.45 | |
Total | 28,886,986.92 | 8,026,545.18 | 6,073,394.19 |
The reasons should be explained for the non-recurring profit and loss items defined by the Companyaccording to the definition of the Explanatory Announcement No.1 on Information Disclosure forCompanies Offering Their Securities to the Public: Non-recurring Profit and Loss, and the definition ofthe non-recurring profit and loss items listed in the Explanatory Announcement No.1 on InformationDisclosure for Companies Offering Their Securities to the Public: Non-recurring Profit and Loss asrecurring profit and loss items.
□ Applicable √ Not applicable
XI. Items Measured at Fair Value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Ending balance | Current change | Amount of impact on the current profit |
Receivable financing | 3,242,000.00 | -3,242,000.00 | 0.00 | |
Other equity | 56,402,400.00 | 146,402,400.00 | 90,000,000.00 | 0.00 |
instrument investments | ||||
Total | 59,644,400.00 | 146,402,400.00 | 86,758,000.00 | 0.00 |
XII. Other
□ Applicable √ Not applicable
Section III Management Discussion and Analysis
I. Business Discussion and Analysis
1. Year-on-year growth in operating revenue
RMB6.385 billion operating revenue, up by 37.82% YOYincluding RMB6.362 billion prime operating revenue, up by 37.69% YOYRMB23 million non-operating revenue
Prime operating revenue:
(1) By channel
Channel | Amount (RMB100 million) | Change in 2022 over the previous year YOY (%) | Change in 2021 over the previous year YOY (%) | Change in 2020 over the previous year YOY (%) | Proportion of 2022 (%) | Proportion of 2021 (%) | Proportion of 2020 (%) | |
Online | Direct sales | 44.78 | 59.79 | 76.16 | 79.63 | 70.40 | 60.66 | 42.45 |
Distribution | 13.10 | 16.79 | 8.56 | 34.36 | 20.58 | 24.27 | 27.56 | |
Subtotal | 57.88 | 47.50 | 49.54 | 58.59 | 90.98 | 84.93 | 70.01 | |
Offline | Household chemicals | 4.43 | -11.96 | -40.52 | -19.28 | 6.96 | 10.88 | 22.56 |
Others | 1.31 | -32.32 | -30.50 | -32.81 | 2.06 | 4.19 | 7.43 | |
Subtotal | 5.74 | -17.62 | -38.03 | -23.12 | 9.02 | 15.07 | 29.99 | |
Total | 63.62 | 37.69 | 23.28 | 20.26 | 100.00 | 100.00 | 100.00 |
Note: The percentage of sales from each channel is the proportion of its sales in the prime operatingrevenue.
(2) By brand
Brand | Amount (RMB100 million) | Change in 2022 over the previous year YOY (%) | Change in 2021 over the previous year YOY (%) | Change in 2020 over the previous year YOY (%) | Proportion of 2022 (%) | Proportion of 2021 (%) | Proportion of 2020 (%) | |
Self-owned brands | Proya | 52.64 | 37.46 | 28.25 | 12.43 | 82.74 | 82.87 | 79.66 |
TIMAGE | 5.72 | 132.04 | 103.48 | - | 8.99 | 5.33 | - | |
OR | 1.26 | 509.93 | - | - | 1.98 | - | - | |
Hapsode | 1.87 | 188.27 | - | - | 2.94 | - | - |
Other brands | 1.63 | -60.11 | -5.96 | 36.91 | 2.57 | 8.85 | 11.59 | |
Subtotal | 63.12 | 40.74 | 26.63 | 19.11 | 99.22 | 97.05 | 94.48 | |
Agency brands | Cross-border agency brands | 0.50 | -63.01 | -34.04 | 44.09 | 0.78 | 2.95 | 5.52 |
Total | 63.62 | 37.69 | 23.28 | 20.26 | 100.00 | 100.00 | 100.00 |
Note: The proportion of sales of each brand is the proportion of its sales in the prime operating revenue;Thedata of OR and Hapsode is incorporated into that of other brands in 2021 and therebefore, but is separatelylisted in 2022 and thereafter.
(3) By category
Category | Amount (RMB100 million) | Change in 2022 over the previous year YOY (%) | Change in 2021 over the previous year YOY (%) | Change in 2020 over the previous year YOY (%) | Proportion of 2022 (%) | Proportion of 2021 (%) | Proportion of 2020 (%) |
Skincare (including cleansing) | 54.84 | 38.56 | 22.70 | 11.38 | 86.20 | 86.10 | 86.50 |
Make-up cosmetics | 7.52 | 21.70 | 32.97 | 181.91 | 11.82 | 13.38 | 12.41 |
Body & hair | 1.26 | 509.93 | - | - | 1.98 | - | - |
Others | 0.00 | -100.00 | -41.05 | 0.47 | 0.00 | 0.52 | 1.09 |
Total | 63.62 | 37.69 | 23.28 | 20.26 | 100.00 | 100.00 | 100.00 |
Note: The " Body & hair " category is included in the "Skincare (including cleansing)" category before2021, and is separately listed after 2022.
2. YOY growth in net profit
RMB817 million net profit attributable to shareholders of the listed company, up by 41.88% YOYRMB789 million net profit attributable to shareholders of the listed company net of non-recurring profitand loss, up by 38.80% YOY
Indicator | 2022 | 2021 | 2020 | Notes |
1. Net profit margin | 13.02% | 12.02% | 12.04% | Mainly due to the increased gross profit margin. |
2. Gross profit margin | 69.70% | 66.46% | 63.55% | Mainly due to: 1. Increased percentage of online direct sales; 2. Hero product strategy; |
3. Sales expense ratio. | 43.63% | 42.98% | 39.90% | Mainly due to: 1. Incubation of new brands (such as TIMAGE and OR); 2. Reshaping of brands (such as Hapsode) and increased |
spending in image promotion. | ||||
Of which: image promotion fee rate | 37.90% | 36.12% | 32.68% | |
4. Administrative expense ratio | 5.13% | 5.12% | 5.44% | |
5. R&D expense ratio | 2.00% | 1.65% | 1.92% | Mainly due to: 1. The R&D expense was increased by 67.15% YOY (an absolute increase of RMB51.43 million); 2. The parent company's R&D expense ratio was 4.31% in 2022 (compared with 3.55% for the same period last year). |
6. Accounts receivable turnover rate (time/year) | 53.04 | 21.88 | 15.53 | Mainly due to: 1. Year-on-year growth in operating revenue in 2022 2. Decreased average balance of accounts receivable. |
7. Accounts receivable turnover days (days) | 6.79 | 16.45 | 23.18 | |
8. Inventory turnover rate (time/year) | 3.46 | 3.39 | 3.50 | |
9. Inventory turnover days (days) | 103.91 | 106.19 | 102.86 |
II. The Company's Industry Situation during the Reporting PeriodAccording to the Guidelines for the Industry Classification of Listed Companies by the CSRC, theCompany falls under chemical raw material and chemical product manufacturing (classification code:
C26); according to the Industrial Classification for National Economic Activities (GB/T 4754-2017), theCompany falls under the manufacturing of daily chemical products (C268) and further under themanufacturing of cosmetics (C2682).According to statistics from the National Bureau of Statistics, in 2022, the total retail sales of consumergoods reached RMB43,973.3 billion, down by 0.2% YOY; the total retail sales of cosmetics reachedRMB393.6 billion, down by 4.5% YOY (covering consumer goods above designated units).
III. The Company's Business Operations during the Reporting Period(I) Main businessThe Company seeks to build a new domestic cosmetics industry platform, and is primarily engaged inR&D, production and sales of cosmetic products. Main brands owned by the Company include Proya,TIMAGE, Off&Relax, Hapsode, CORRECTORS, INSBAHA, UZERO and Anya. The Company's ownbrands have covered fields such as popular skincare, make-up, body & hair, and high-efficiency skincare:
1. Popular exquisite skincare
(1) Proya, focusing on technology skincare, designed for young white-collar female customers, priced atRMB200 to RMB500, sold both online and offline.
(2) Hapsode, customized for young skin, especially for college students and other young female customers,priced at RMB50 to RMB150, sold mainly online.
2. Make-up
TIMAGE, a professional make-up brand with a new Chinese style, priced at RMB150 to RMB300, soldonline.
3. Body & hair
Off&Relax, developed and made in Japan, focusing on scalp care, priced at RMB150 to RMB200, soldmainly online.
4. High-efficiency skincare
CORRECTORS, a high-efficiency skincare brand, priced at RMB260 to RMB600, sold online.
(II) Business models
1. Sales models
Mainly online sales, supplemented by offline sales.Online sales are mainly operated through direct sales and distribution. Direct sales are mainly carried outon platforms such as Tmall, TikTok, JD, Kwai, and Pinduoduo. Distribution platforms include Taobao,JD, and Vipshop.Offline sales are mainly operated through dealers. Channels include cosmetics franchise stores,supermarkets, and single-item stores.
2. Production/R&D models
Self-production is the main production model of the Company, supplemented by OEM production. Theskincare products of the Company are self-produced while make-up products are both self-produced andOEM-produced. The Company has self-built skincare and make-up factories.Independent R&D is the main R&D model of the Company, supplemented by industry-university-researchcooperation. The Company has maintained R&D cooperation with front-end research institutions andhigh-quality raw material suppliers including the Institute of Microbiology, Chinese Academy of Sciences,Zhejiang University of Technology, BASF China, Ashland China, Royal DSM Shanghai, LIPOTRUES.L., and Shenzhen Siyomicro Bio-tech.
IV. Analysis of Core Competitiveness during the Reporting Period
√ Applicable □ Not applicable
The Company's core competitiveness is mainly embodied by:
The Company adheres to the guidance of the 6*N strategy and puts it into practice amid the rapidlychanging market; consolidates and deepens the refined operation management system highlighting "R&D,products, contents, operation"; constructs a self-driven organization featuring "culture-strategy-mechanism-talents".With a keen insight into consumers' needs, the Company keeps sharpening the strengths of hero products,as well as building and improving the matrix of core hero products based on R&D and relying on quickresponse and organizational capabilities.The Company has built a self-driven and agile organization to serve brands in the second echelon thathave taken shape as well as brands under incubation. By building our own MCN team and content
marketing team, the Company strengthens the internally circular ecosystem and connects Proya brandswith the external ecosystem.
V. Main Operations during the Reporting Period
1. New product strategy
Proya:
During the Reporting Period, Proya continued to deepen the "Hero Product Strategy"; primarily expandedand upgraded the categories and efficacy of Elastic Brightening Youth Essence, Ruby Essence, andAdvanced Original product families; launched Advanced Original Face Cream, Advanced Original FaceMask, and other new products; upgraded the Elastic Brightening Youth Activating Eye Cream, the DeepOcean Energy Wrinkless and Firming Moisture Cream, and the Advanced Original Essence to version 2.0,which further solidified the mindset of the three product families; continued to explore high-end productcategories by launching the Inaugurating Nourishing Face Oil. These products give consumers moreoptions and better product experiences.In 2022, Proya ranked 1st in the essence category, 4th in the mask category, 4th in the eye cream category,and 9th in the face cream category on Tmall.
TIMAGE:
During the Reporting Period, TIMAGE further completed the deployment of facial make-up product lines,and strengthened the impression of a "professional make-up artist" for consumers. Based on the facialmake-up category, TIMAGE created two segments of "Contour Line" and "Base Make-up". In additionto contour, highlighter, and primer, TIMAGE created another six categories including liquid foundation,concealer, and setting spray. The large base make-up category was supplemented while maintainingadvantages in contour lines, so that the base make-up category could establish a wider presence.In 2022, the "tri-colored contour palette" and "dual-colored highlighter palette" of TIMAGE maintainedtheir advantages in the highlighter category, led the growth for the brand aggressively, improved productpenetration, and brought a large number of new customers to the brand. The tri-colored contour paletteranked 1st in the highlighter category on Tmall. The dual-colored highlighter palette ranked 2nd in thehighlighter category on Tmall. The face primer ranked 1st in the sun block/primer category on Tmall. Thenewly-launched tri-colored concealer palette ranked 1st in the concealer category on Tmall. The newly-launched setting spray ranked top 10 in the setting spray category on Tmall.
Off&Relax (OR):
During the Reporting Period, the Company continued to optimize the product structure and facilitated theconstruction of a scalp health care system for the brand.Making scalp health a focus for the brand penetrating the market, OR solves users' pain points by rapidlybuilding two flagship products "Off&Relax Hot Spring Water SPA Shampoo" and "Off&Relax Hot SpringWater Hair Mask". Based on the existing market environment and the characteristics of Japanese brands,OR sorts out product selling points, provides various scalp and hair care products for high-net-valueconsumers, who care user experience of cleansing and care products, to satisfy the demands of differentconsumers.
Hapsode:
During the Reporting Period, Hapsode focused on building two cleansing products: Amino Acid Crystaland Multiple Acids Purely Cleansing Mud Musk. Cleansing products allow the Company to rapidly reach
young consumers with oily skin. Also, Hapsode completes the brand and category portfolio by launchinghighly-effective skin cleansing products such as the "Ultra Soothing Facial Mask " and the "Oil ControlBalanced Serum", builds up a pyramid-typed product system for oily skin, and gradually improvesconsumers' recognition of Hapsode as "an expert for the care of oily skin".
2. New marketing strategy
Proya:
During the Reporting Period, the Proya brand continuously built its brand around the "spirit of discovery",focused on socially important issues such as gender equality, mental health and intimate relationships, andcreated and communicated brand content on issues related to young people's growth and the targetaudience for long-lasting effects. The Company carried out brand marketing events as follows:
(1) "Next Stop, Decisive Turn" in January: Proya delivered the hope for the new year with poems andgave the audience a beautiful wish for good luck by organizing a subway poetry exhibition.
(2) "Gender is Not the Borderline, Prejudice is" on Women's Day in March: Aiming at gender equalityonce again, Proya invited the female soccer WANG Shuang and the Nanxing Hexingtang Lion DanceTeam to shoot a documentary. Efforts were made to unite with seven brands to continuously strive for "agender equal world" with concrete actions.
(3) "Visible Only to Moms" on Mother's Day in May: Proya told the stories of "mothers", who are one ofthe target consumer groups of the brand, to all family members, and invited experts of different fields toparticipate in topic discussions. Differentiated from the "Thank You Mother" topic in the same period, theevent drummed up more discussions about the "division of household labor and responsibilities".
(4) "Dare to love, dare not to love" on the Chinese Valentine's Day in August: Proya worked withFUJIFILM and photographers to discuss with consumers the form of self presentation in love in the wayof pictures and texts. Meanwhile, the Company proposed the brand technology mindset of "A ScientificChoice for Skin" while working with the original content platform Zhihu to seek the answer to the question"what is the best scientific choice for skin", and better help consumers understand the knowledge ofscientific skin care so they can choose products more wisely.
(5) "The Smallest Thing Is Important" in September: Proya advocated for school bullying victims, heldthe attention to the signs of campus bullying that seem "insignificant", and called on the public to realizethe "multi-faced look" of campus bullying, so as to light up the road ahead for those growing amidst bullies.
(6) World Mental Health Day in October: Proya continued on the "Echo Project" brand marketingcampaign, paid sustaining attention to the mental health of young people, and output the brand attitude ofProya. Joining hands with Beijing New Sunshine Charity Foundation, Douban, Owspace, FangsuoCommune, The Mind, Xiaoyuzhou Podcast APP, and xinli001.com, Proya presented everyone themultiple possibilities of "emotional outlets".
(7) Pop-up series at 9 stores in 8 cities across China in November: By understanding the youngsters'“Coffee & Alcohol Pop Up” mindset, Proya effectively integrated its hero products into a popular lifestyleof young people, delivering a young brand image by catering to a lifestyle that better suits youngconsumers.
TIMAGE:
During the Reporting Period, TIMAGE comprehensively deepened the brand recognition of "Chinesemake-up, original beauty" and had a dialog with Chinese female consumers with its uniqueprofessionalism and aesthetics. By means of cross-border marketing, brand responsibility and care, andbrand values delivery, TIMAGE carried out the following marketing events:
(1) "Unfiltered You" on Women's Day in March: Photographers were invited to output the opinions of"original beauty", speak out for the brand, and interpret the concept of original beauty as female artists.Starting from the insight into "filters", the event presents the brand concept and aesthetic tonality oforiginal beauty.
(2) "Witness the Original Beauty" in April: TIMAGE worked with Hippocampus, a professionalphotography organization, to provide ID photo make-up of "original beauty". Hippocampus set up specialmake-up tables at its 180 stores. Large-screen advertisements were launched in 5 major cities and onlinetopics were promoted to most searched hashtags to encourage consumers to share their changes in themake-up before taking an ID photo over the years.
(3) "Life is Beautiful" in June: TIMAGE collaborated with the One Way Street Library to start topics.Many art workers, music critics, directors, writers, and screenwriters sent articles and photos of theirexperiences to share and output positive content. TIMAGE also produced peripheral sachets and gavethem to consumers for free.
(4) "Origin at the Beginning of Autumn" in August: TIMAGE produced a video with three female contentKOLs to present the life attitude that "It is Never too Late to Do" and encourage everyone to find morepossibilities in life.
(5) "You Are Beautiful in Every Single Way" in October: TIMAGE released the first high-quality brandpromotion film to set the latest visual identity of the brand, complete the full-chain communication loopfrom "original beauty" to "Chinese make-up", and showcase the brand tonality of TIMAGE as well as itsattitude toward women's intrinsic growth.
(6) "See Your Beauty" in December: By producing thank-you letters and peripheral gifts, TIMAGEinteracted with fans to express its gratitude for the support of fans.
3. New channel strategy
Proya:
Online:
(1) Tmall flagship store
During the Reporting Period, the Company continued to consolidate the hero product matrix strategy andcreated super-hero products throughout the Internet. Combining factors of consumers, goods, and venues,the Company deeply maintains the members and regular customers of stores, improves their possibilitiesof repurchase and per customer transaction, increases the penetration into populations and high-value usersin tier 1 and tier 2 cities; heightens the ranking in core categories and draws the attention of consumers;values the operation of self live-streaming and improves the proportion of self live-streaming. Duringthe "6.18" and "11.11" shopping festivals in 2022, the gross merchandise volume (GMV) of ProyaFlagship Store ranked 5th on Tmall Beauty and 1st among all Chinese products. In 2022, the GMV ofProya Flagship Store ranked 4th on Tmall Beauty and 1st among all Chinese products.
(2) TikTok
During the Reporting Period, the Company strengthened self live-streaming and multi-matrix accountoperation: increased the consumer maintenance efficiency while stepping up the maintenance of membersand fans; optimized the product structure, and dramatically increased the proportion of hero products andthe per customer transaction of stores. During the "6.18" and "11.11" shopping festivals in 2022, Proyaranked 1st both on TikTok Beauty and among all Chinese products. In 2022, Proya ranked 3rd on TikTokBeauty and 1st among all Chinese products.
(3) JD
During the Reporting Period, the Company deeply implemented the hero product strategy and furtherimproved the sales proportion of hero products through efficient operation; improved the experience ofmembers, attracted new high-value customers, and increased the repurchase ratio to have a better insightinto the population and lock target consumers; optimized the quality of advertisement content, expandedadvertisement channels, and operated various channels in a more refined manner. During the "6.18" and"11.11" shopping festivals in 2022, Proya ranked 1st both on JD Beauty and among all Chinese products.In 2022, Proya ranked 10th on JD Beauty, and ranked 1st among all Chinese products.
Offline:
(1) Household chemicals: Corresponding rating systems are matched for strongly influential areas andweekly influential areas of the brand to manage outlets in an targeted and differentiated manner. Thebusiness logic is now driven by "dynamic sales" instead of "channel policies", so as to optimize badinventory in channels, ensure maximum benefits for retailers, and keep close eyes on the fund, inventory,and benefits of retailers.
(2) Supermarkets: The brand power enables the department store channel to improve existing counters,upgrade the image, and enhance the efficiency. The "Coffee & Alcohol Pop Up" initiative is held throughbrand marketing campaigns at 9 stores in 8 cities including Hangzhou, Shenzhen, Ningbo, Suzhou,Wenzhou, and Xi'an, so as to reach young target customers, strengthen the communication with the youngpopulation, and promote the strategic cooperation between the brand and key systems. Also, thecooperation with supermarkets is shrunk strategically.
4. New organizational strategy
(1) Organization: The Company continuously improves the organizational structure, opens up the brandplanning mode that connects both the upper level and the lower level, builds a management modeintegrating a product and delivery capability-focused "middle platform" and an "agile front", continues todeepen the application of digital technologies, and promotes the incubation and growth of new businessesthrough the empowerment of platforms and digitalization.
(2) Talents: The Company continuously promotes the talent supply chain mechanism for young andinternational talents based on business needs, steps up the introduction of talents for research, development,and information application, accurately and rapidly identifies, and efficiently utilizes talents, and graduallybuilds a dynamic, competent and self-driven talent team through the combination of training and practices.Through the dual-channel management, the Company improves the talent density, facilitates talentdevelopment, and builds a talent echelon.
(3) Mechanism: The Company deepens a performance culture featuring high investment, highperformance and high returns, improves a performance management system emphasizing targets, processand results; flexible utilizes the diversified incentive system covering short-term (quarterly performanceand project incentives), middle-term (annual performance dividends) and long-term (equity incentives andpartners) incentives. Also, the Company deepens the application of the project system, builds up a three-level project management system consisting of the Company, business divisions, and departments, andputs efforts on the end-to-end value chain and internal control projects to continuously hone theorganization capability.
5. New R&D strategy
During the Reporting Period, the Company took the R&D Innovation Center and the InternationalAcademy of Sciences as the engine for innovation; improved the R&D of all key stages from raw materialto finished products, including fundamental research, formula development, physical and chemical
analysis, raw material and product efficacy evaluation, etc. The Company continues to push theconstruction of the International Academy of Sciences to conduct the research of skin texture, designactive substances, and verify their efficacy. The R&D Innovation Center continues to focus on researchingand developing new skin care and make-up products. Now the Shanghai R&D Center is under constructionand the Japan R&D Center is under preparation.
(1) Patents: During the Reporting Period, the Company newly applied for 21 national invention patents,7 utility model patents, and 23 design patents, totaling 51 new patents applied for; obtained 15 nationallylicensed invention patents and 17 design patents, totaling 32 patents obtained. As of the end of theReporting Period, the Company had 107 nationally licensed invention patents, 19 utility model patents,and 99 design patents, totaling 225 patents obtained.
(2) Standard releasing: During the Reporting Period, the Company participated the drafting of two newlyreleased group standards, namely the TZHCA 017-2022 Hair Growth and Rest Period Quantity Ratio TestMethod and the T/ZHCA 019-2022 Cosmetics Anti-dandruff Efficacy Test Method. As of the end of theReporting Period, the Company had led or participated in the development of 14 national standards, 3industry standards, and 14 group standards.
(3) Achievements and awards: During the Reporting Period, the Company was granted the followinghonorable titles, including the Hangzhou "Kunpeng" Enterprise, One of the Top Ten Enterprise in China'sLight Industry ad Cosmetics Industry, One of the Top 100 Enterprises in Hangzhou ManufacturingIndustry, Third Prize in National Commercial Technology Advancement Award, Top Ten Make-upBrands of Zhejiang in 2021. At the IFSCC International Cosmetic Science Conference, the Companypresented a number of its scientific achievements.
(4) Strategic cooperation: During the Reporting Period, the Company deepened the strategic cooperationwith existing partners, and performed strategic cooperation with Zhejiang Peptites Biotech Co., Ltd.
6. New supply chain guarantee
(1) Procurement and planning:
During the Reporting Period, the Company's supply chain system integrated the data and information fromvarious information platforms and timely calculated the demand for raw materials based on the demandat the terminal while synchronizing inventory of suppliers, procurement cycle, and logistic information.In the end, these information is accurately and agilely transmitted to all departments through the supplychain information platform to reach a balance between terminal sales and productivity and provide a back-end support for promotions on 6.18 and 11.11.The Company has organized multiple training sessions for suppliers in terms of sustainable development,actively adopts sustainable packaging, and achieves remarkable effect in reducing plastics, usingenvironmentally-friendly materials, and minimizing packaging.
(2) Production:
Based on market sales and needs, the Company makes productivity arrangement in advance, adheres tolean manufacturing, and keeps improving production efficiency by using automated, intelligent, anddigital technologies. During the Reporting Period, the Company expanded some workshops, addedmultiple production lines, and enhanced productivity to meet the demands during the 6.18 and 11.11shopping festivals. In addition, the Company further strengthened the full-process quality managementand risk management, regularly held communication meetings of quality experiences for consumers,received market feedback as soon as possible, and implemented project-specific management and closed-loop tracking.During the Reporting Period, the Company completed the "Massive Safety Training For A MillionEmployees" program, allowing all employees to master and grasp laws and regulations related to safe
production, enhance their awareness safe production hazards, and improve the safety emergency responsecapability. The Huzhou Factory installed the independent fire control and management platform of theprovincial fire and rescue corps to systematically manage the fire control work. The Company upgradedand renovated the fire-fighting system to control the whole process of smoke exhaust.
(3) Logistics:
During the Reporting Period, the Company continued to improve the logistics management system andinitiated the installation of the automated three-dimensional warehouse equipment. The Company wasrated as the winner of the "China Logistics Industry Golden Ant Award 2021 and 2022" by the organizingcommittee of the LET-a CeMAT ASIA
(I) Analysis of main business
1. Analysis of changes in accounts in the Income Statement and the Cash Flow Statement
Unit: Yuan Currency: RMB
Account | Amount for the current period | Amount for the same period last year | Change ratio (%) |
Operating revenue | 6,385,451,424.00 | 4,633,150,538.43 | 37.82 |
Operating cost | 1,934,850,203.65 | 1,554,155,646.61 | 24.50 |
Selling expenses | 2,785,837,352.95 | 1,991,534,076.73 | 39.88 |
General and administrative expenses | 327,296,749.37 | 236,988,519.23 | 38.11 |
Financial expenses | -40,996,523.01 | -7,484,395.13 | 447.76 |
Research and development expenses | 128,009,104.49 | 76,583,650.83 | 67.15 |
Net cash flow from operating activities | 1,111,136,117.23 | 829,670,943.82 | 33.92 |
Net cash flow from investing activities | -298,215,550.57 | -341,823,618.60 | Not applicable |
Net cash flow from financing activities | -65,251,320.73 | 489,615,295.96 | -113.33 |
Cause for change in operating revenue: mainly due to increased online sales.Cause for change in operating cost: mainly due to increased operating costs resulting from the increase ofoperating revenue.Cause for change in sales expenses: In 2022, sales expenses amounted to RMB2.786 billion, accountingfor 43.63% of the operating revenue (compared with 42.98% for the same period last year). Sellingexpenses increased by RMB794 million or 39.88% YOY, mainly due to an increase of RMB746 millionor 44.60% YOY in the image promotion expenses in the current period (used for the incubation of newbrands such as TIMAGE, OR, and brand re-shaping).Cause for change in general and administrative expenses: In 2022, administrative expenses amounted toRMB327 million, accounting for 5.13% of the operating revenue (compared with 5.12% for the sameperiod last year). General and administrative expenses increased by RMB90.31 million or 38.11% YOY,mainly due to increased equity incentive expense for restricted shares, employee compensation, andservice fees.Cause for change in financial expenses: The general impact of interest income and foreign exchange gainsand losses reduced financial expenses by RMB33.51 million.
Cause for change in R&D expenses: In 2022, R&D expenses amounted to RMB128.01 million, an increaseof RMB51.43 million YOY, accounting for 2.00% of the operating revenue (compared with 1.65% for thesame period last year). In 2022, the parent company's R&D expense ratio was 4.31% (compared with 3.55%for the same period last year).Cause for change in net cash flow from operating activities: 1. mainly due to the YOY increase in theoperating revenue and the increase in cash received from commodity sales; 2. increased payment for goods;
3. increased image promotion fees.
Cause for change in net cash flow from investment activities: a YOY increase of RMB44million, mainlydue to decreased cash flow from investment activities caused by the disposal of the 52% equity ofShanghai Healthlong Biochemical Technology Co., Ltd in the previous period. The event is not recognizedin the current period.Causes for change in net cash flow from financing activities: a YOY decrease of RMB555 million, mainlydue to that (1) the cash received from absorbing investment (equity incentive expense for restricted shares)is increased by RMB165 million; (2) the cash received from reclaiming borrowings is decreased byRMB647 million (RMB747million of fund raised in the previous period by issuing the "Proya ConvertibleBond"); (3) the cash paid related to financing activities is increased by RMB43 million; (4) the cash paidto distribute dividends, profits, or repay interest is increased by RMB28 million.
A detailed description of major changes in the Company's activities, profit composition or sources of profitduring the current period
□ Applicable √ Not applicable
2. Revenue and cost analysis
√ Applicable □ Not applicable
For details, see the analysis in "1. Analysis of changes in accounts in the Income Statement and the CashFlow Statement", "(I) Analysis of main business", "V. Main Operations during the Reporting Period","Section III Management Discussion and Analysis" of this report.
(1). Main business activities by industry, product, region and sales model
Unit: Yuan Currency: RMB
Main business activities by industry | ||||||
Industry | Operating revenue | Operating cost | Gross profit margin (%) | Change in operating revenue YOY (%) | Change in operating cost YOY (%) | Change in gross profit margin YOY (%) |
Household chemicals industry | 6,361,763,550.69 | 1,916,352,535.29 | 69.88 | 37.69 | 24.03 | Up by 3.32 percentage points |
Main business activities by product | ||||||
Product | Operating revenue | Operating cost | Gross profit margin (%) | Change in operating revenue YOY (%) | Change in operating cost YOY (%) | Change in gross profit margin YOY (%) |
Skincare | 5,483,643,868.53 | 1,616,998,071.19 | 70.51 | 38.56 | 29.68 | Up by 2.02 |
(including cleansing) | percentage points | |||||
Make-up cosmetics | 752,460,286.08 | 251,667,006.25 | 66.55 | 21.70 | -4.46 | Up by 9.16 percentage points |
Body & hair | 125,659,396.08 | 47,687,457.85 | 62.05 | 509.93 | 365.92 | Up by 11.73 percentage points |
Others | 0.00 | 0.00 | - | -100.00 | -100.00 | |
Total | 6,361,763,550.69 | 1,916,352,535.29 | 69.88 | 37.69 | 24.03 | Up by 3.32 percentage points |
Main business activities by region | ||||||
Region | Operating revenue | Operating cost | Gross profit margin (%) | Change in operating revenue YOY (%) | Change in operating cost YOY (%) | Change in gross profit margin YOY (%) |
Northeast China | 16,501,625.98 | 6,052,777.83 | 63.32 | -25.21 | -25.27 | Up by 0.03 percentage points |
North China | 69,783,559.44 | 26,385,241.51 | 62.19 | 9.94 | -6.42 | Up by 6.61 percentage points |
East China | 712,780,874.13 | 298,564,036.15 | 58.11 | 4.34 | -12.84 | Up by 8.26 percentage points |
South China | 44,924,050.01 | 18,046,419.43 | 59.83 | -41.91 | -45.33 | Up by 2.51 percentage points |
Central China | 149,971,246.18 | 61,852,910.54 | 58.76 | -15.39 | -11.34 | Decreased by 1.88 percentage points |
Northwest China | 35,070,252.17 | 11,689,484.54 | 66.67 | -34.60 | -35.02 | Up by 0.22 percentage points |
Southwest China | 79,218,140.12 | 29,907,969.48 | 62.25 | -11.65 | -14.12 | Up by 1.09 percentage points |
Hong Kong and overseas | 66,959,765.22 | 28,775,729.85 | 57.03 | 73.16 | -17.26 | Up by 46.97 percentage points |
Others (e-commerce) | 5,186,554,037.44 | 1,435,077,965.96 | 72.33 | 51.87 | 47.06 | Up by 0.90 percentage points |
Total | 6,361,763,550.69 | 1,916,352,535.29 | 69.88 | 37.69 | 24.03 | Up by 3.32 percentage points |
Main business activities by sales model | ||||||
Sales model | Operating revenue | Operating cost | Gross profit margin (%) | Change in operating revenue YOY (%) | Change in operating cost YOY (%) | Change in gross profit margin YOY (%) |
Online | 5,788,034,421.87 | 1,684,190,321.43 | 70.90 | 47.50 | 35.26 | Up by 2.63 percentage points |
Offline | 573,729,128.82 | 232,162,213.86 | 59.53 | -17.62 | -22.60 | Up by 2.60 percentage points |
Total | 6,361,763,550.69 | 1,916,352,535.29 | 69.88 | 37.69 | 24.03 | Up by 3.32 percentage points |
Description of main business activities by industry, product, region and sales model
(1) Description of growth in household chemicals: The growth in prime operating revenue this year wasmainly due to RMB5.788 billion online sales (accounting for 90.98% of the prime operating revenue), anincrease of RMB1.864 billion or 47.50% YOY.
(2) Description of growth in make-up cosmetics: mainly due to RMB572 million sales of TIMAGE thatfalls under the make-up cosmetics category during the Reporting Period, an increase of RMB326millionor 132.04% YOY.
(3) Description of growth in body and hair: mainly due to RMB126 million sales of OR that falls underthe Body & hair category during the Reporting Period, an increase of RMB105 million or 509.93% YOY.
(4) Description of growth in others: No income of other categories is reported this year, mainly due to thatthe Company no longer operated the cross-border brand agency business.
(5) Description by region: The sales of other regions declined, except e-commerce, Hong Kong andoverseas, East China, and North China, mainly due to a YOY fall in offline sales.
(2). Analysis table of production and sales
√ Applicable □ Not applicable
Major products | Unit | Production | Sales | Inventory | Change in production YOY (%) | Change in sales YOY (%) | Change in inventory YOY (%) |
Household chemicals | Piece | 314,064,556 | 276,025,390 | 90,180,032 | 42.44 | 27.66 | 72.95 |
Description of production and salesThe quantities in the above table include self-produced and OEM products, excluding the quantity ofproducts produced through cross-border brand agency.
(3). Performance of major purchase contracts and major sales contracts
□ Applicable √ Not applicable
(4). Cost statement analysis
Unit: RMB
Statement by industry | |||||||
Industry | Cost composition | Amount for the current period | Proportion% in total cost for the current period (%) | Amount for the same period last year | Proportion% in total cost for the current period (%) | YOY change ratio (%) | Description |
Household chemicals industry | Raw materials | 1,268,693,580.45 | 66.20 | 976,123,853.77 | 63.18 | 29.97 | |
Labor and manufacturing cost | 107,432,847.50 | 5.61 | 81,119,950.03 | 5.25 | 32.44 | ||
Outsourcing | 302,956,467.34 | 15.81 | 316,528,909.08 | 20.49 | -4.29 | ||
Freight | 237,269,640.00 | 12.38 | 171,325,756.44 | 11.09 | 38.49 | ||
Subtotal | 1,916,352,535.29 | 100.00 | 1,545,098,469.32 | 100.00 | 24.03 | ||
Statement by product | |||||||
Product | Cost composition | Amount for the current period | Proportion in total cost for the current period (%) | Amount for the same period last year | Proportion in total cost for the same period last year (%) | YOY change ratio (%) | Description |
Skincare (including cleansing) | Raw materials | 1,228,433,567.23 | 75.97 | 914,082,589.13 | 73.31 | 34.39 | |
Labor and manufacturing cost | 101,753,659.87 | 6.29 | 74,591,026.00 | 5.98 | 36.42 | ||
Outsourcing | 92,297,157.26 | 5.71 | 113,127,555.81 | 9.07 | -18.41 | ||
Freight | 194,513,686.83 | 12.03 | 145,076,420.66 | 11.64 | 34.08 | ||
Subtotal | 1,616,998,071.19 | 100.00 | 1,246,877,591.60 | 100.00 | 29.68 | ||
Make-up cosmetics | Raw materials | 40,084,933.46 | 15.93 | 62,041,264.64 | 23.55 | -35.39 | |
Labor and manufacturing | 5,679,187.63 | 2.26 | 6,528,924.03 | 2.48 | -13.01 |
cost | |||||||
Outsourcing | 174,194,228.29 | 69.21 | 170,978,877.92 | 64.91 | 1.88 | ||
Freight | 31,708,656.87 | 12.60 | 23,869,561.68 | 9.06 | 32.84 | ||
Subtotal | 251,667,006.25 | 100.00 | 263,418,628.27 | 100.00 | -4.46 | ||
Body & hair | Raw materials | 175,079.76 | 0.37 | - | - | - | |
Labor and manufacturing cost | - | 0.00 | - | - | - | ||
Outsourcing | 36,465,081.79 | 76.46 | 8,307,839.73 | 81.17 | 338.92 | ||
Freight | 11,047,296.30 | 23.17 | 1,927,244.65 | 18.83 | 473.22 | ||
Subtotal | 47,687,457.85 | 100.00 | 10,235,084.38 | 100.00 | 365.92 | ||
Others | Raw materials | - | - | - | - | - | |
Labor and manufacturing cost | - | - | - | - | - | ||
Outsourcing | - | - | 24,114,635.62 | 98.16 | -100.00 | ||
Freight | - | - | 452,529.45 | 1.84 | -100.00 | ||
Subtotal | - | - | 24,567,165.07 | 100.00 | -100.00 |
Other explanationsNone
(5). Changes in consolidation due to changes in the equity of major subsidiaries during the
Reporting Period
√ Applicable □ Not applicable
For details, see "VIII. Changes in the Consolidation Scope", "Section X Financial Report".
(6). Significant changes or adjustments to the Company's business activities, products or services
during the Reporting Period
□ Applicable √ Not applicable
(7). Major sales customers and major suppliers
A. The Company's major customers
√ Applicable □ Not applicable
The sales of top five customers amounted to RMB798.31million, accounting for 12.55% of the total annualsales; the sales of related parties of such top five customers amounted to RMB0, accounting for 0.00% ofthe total annual sales.
Circumstances where a single customer contributed to more than 50% of the total sales, top 5 customersincluded a new customer, or the Company relied heavily on a small number of customers during theReporting Period
□ Applicable √ Not applicable
B. The Company's major suppliers
√ Applicable □ Not applicable
The purchase amount of top 5 suppliers amounted to RMB393.25million, accounting for 20.57% of thetotal annual purchase amount; the purchase amount of related parties of such top 5 suppliers amounted toRMB0, accounting for 0.00% of the total annual purchase amount.
Circumstances where a single supplier accounted for more than 50% of the total procurement, top 5suppliers included a new supplier, and the Company relied heavily on a small number of suppliers duringthe Reporting Period
□ Applicable √ Not applicable
Other explanationsNone
3. Expenses
√ Applicable □ Not applicable
Unit: RMB
Expense item | 2022 | 2021 | Change for the current period | Growth rate (%) |
Selling expenses | 2,785,837,352.95 | 1,991,534,076.73 | 794,303,276.22 | 39.88 |
General and administrative expenses | 327,296,749.37 | 236,988,519.23 | 90,308,230.14 | 38.11 |
Research and development expenses | 128,009,104.49 | 76,583,650.83 | 51,425,453.66 | 67.15 |
Financial expenses | -40,996,523.01 | -7,484,395.13 | -33,512,127.88 | Not applicable |
4. R&D investment
(1). Statement of R&D investment
√ Applicable □ Not applicable
Unit: RMB
Expensed R&D investment for the current period | 128,009,104.49 |
Capitalized R&D investment for the current period | 0.00 |
Total R&D investment | 128,009,104.49 |
Total R&D investment in operating revenue (%) | 2.00 |
Capitalization of R&D investment (%) | 0.00 |
(2). Statement of R&D personnel
√ Applicable □ Not applicable
Number of R&D personnel | 229 |
Percentage of R&D personnel (%) | 7.21 |
Educational background structure | |
Educational level | Number of persons |
PhD | 4 |
Master | 69 |
Bachelor | 123 |
Associate | 31 |
High school and below | 2 |
Age structure | |
Age range | Number of persons |
Under 30 (exclusive) | 100 |
30-40 (incl. 30 and excl. 40) | 106 |
40-50 (incl. 40 and excl. 50) | 21 |
50-60 (incl. 50 and excl. 60) | 1 |
60 and above | 1 |
(3). Description
□ Applicable √ Not applicable
(4). Cause for significant changes in the composition of R&D personnel and the impact on the futuredevelopment of the Company
□ Applicable √ Not applicable
5. Cash flow
√ Applicable □ Not applicable
Unit: RMB
Item | Amount for the current period | Amount for the same period last year | Growth rate (%) | Description |
Net cash flow from operating activities | 1,111,136,117.23 | 829,670,943.82 | 33.92 | Mainly due to: 1. YOY increase in the operating revenue and the increase in cash received from commodity sales; 2. Increased payment for goods; 3. Increased payment for image promotion fees. |
Net cash flow from investing activities | -298,215,550.57 | -341,823,618.60 | Not applicable | Mainly due to the disposal of the 52% equity of Shanghai Healthlong Biochemical Technology Co., Ltd. in the |
previous period. The event is not recognized in the current period. | ||||
Net cash flow from financing activities | -65,251,320.73 | 489,615,295.96 | -113.33 | Mainly due to: 1. The cash received from absorbing investment (equity incentive expense for restricted shares) is increased by RMB165 million; 2. The cash received from reclaiming borrowings is decreased by RMB647million (RMB747million of fund raised for the previous period by issuing the "Proya Convertible Bond"); 3. The cash paid related to financing activities is increased by RMB43 million; 4. The cash paid to distribute dividends, profits, or repay interest is increased by RMB28 million. |
Cash received from the sale of goods and the rendering of services | 7,088,465,997.21 | 5,130,176,845.31 | 38.17 | Mainly due to the increased operating revenue. |
Other cash received related to operating activities | 99,500,140.40 | 54,614,521.56 | 82.19 | Mainly due to the increased bank interest and government subsidies received in the current period. |
Cash paid for goods purchased and services received | 2,241,842,834.78 | 1,616,390,215.85 | 38.69 | Mainly due to the expanded sales scale and the increased payment relating to production. |
Payments of various types of taxes | 660,096,624.31 | 432,668,333.55 | 52.56 | Mainly due to the expanded sales scale and the improved profitability of the Company. |
Other cash paid related to operating activities | 2,616,308,090.91 | 1,864,985,801.02 | 40.29 | Mainly due to the expanded sales scale and the increased payment for image promotion expenses. |
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 3,751,463.96 | 47,622.98 | 7,777.42 | Mainly due to the increased cash receipts from disposals of fixed assets in the current period |
Cash paid for investments | 131,003,609.10 | 70,029,200.00 | 87.07 | Mainly due to the new equity investment of RMB90 million to Hangzhou Gaolang Holdings Co., Ltd. in the current period. |
Other cash paid related to investing activities | 77,739,374.88 | -100.00 | Mainly due to the disposal of equity in Shanghai Healthlong Biochemical Technology Co., Ltd. and payment of other cash RMB64.25 million for investment activities in the previous period. The event is not recognized for the current period. | |
Cash received from capital contributions | 165,676,000.00 | 700,000.00 | 23,568.00 | Mainly due to the receipt of payment for the equity incentive expense for restricted shares from employees in the current period. |
Cash received from borrowings | 300,000,000.00 | 946,996,018.87 | -68.32 | Mainly due to the issuance of “Proya Convertible Bond” in the previous period for RMB747 million. This event is not recognized in the current period. |
Other cash paid related to financing activities | 48,263,571.88 | 4,835,393.12 | 898.13 | Mainly due to the payment for acquisition of minority equity in Ningbo TIMAGE Cosmetics Co., Ltd. in the current period. |
(II) Description on significant changes in profit caused by non-primary business activities
□ Applicable √ Not applicable
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
1. Assets and liabilities
Unit: RMB
Item | Amount as of the end of the current period | in total assets(%) | Amount as of the end of the previous period | in total assets(%) | YOY change ratio (%) | Description |
Cash and cash equivalents | 3,161,003,085.05 | 54.71 | 2,391,048,249.81 | 51.61 | 32.20 | Mainly due to increased cash inflows from operating activities in the current period. |
Receivable financing | 3,242,000.00 | 0.07 | -100.00 | Mainly due to the reduced balance of bank acceptance bills as of the end of the current period. | ||
Prepayments | 91,483,523.15 | 1.58 | 58,406,647.11 | 1.26 | 56.63 | Mainly due to the increased prepayment for image promotion expenses as of the end of the current period. |
Inventories | 669,051,326.73 | 11.58 | 447,938,758.29 | 9.67 | 49.36 | Mainly due to the increased stock quantity for 1Q2023 arising from the expanded sales scope of the Company. |
Other equity instrument investments | 146,402,400.00 | 2.53 | 56,402,400.00 | 1.22 | 159.57 | Mainly due to the new equity investment of RMB90 million to Hangzhou Gaolang Holdings Co., Ltd. in the current period. |
Construction in progress | 207,378,935.86 | 3.59 | 108,678,896.27 | 2.35 | 90.82 | Mainly due to the additional investment in the Huzhou Expansion Production Base Construction Project (Phase I) and the |
Item | Amount as of the end of the current period | in total assets(%) | Amount as of the end of the previous period | in total assets(%) | YOY change ratio (%) | Description |
Longwu R&D Center Construction Project. | ||||||
Right-of-use assets | 6,410,634.25 | 0.11 | Not applicable | Mainly due to the addition of an office site and the signing of lease contracts in the current period. | ||
Long-term prepaid expenses | 19,142,604.46 | 0.33 | 29,756,474.11 | 0.64 | -35.67 | Mainly due to the amortization of renovation costs. |
Other non-current assets | 5,554,726.06 | 0.10 | 44,167,303.56 | 0.95 | -87.42 | Mainly due to that the trademark amount of RMB39.90 million (SINGULADERM) in the beginning balance is transferred to intangible assets since the trademark transfer registration is completed in the current period. |
Contract liabilities | 174,602,833.91 | 3.02 | 91,151,985.32 | 1.97 | 91.55 | Mainly due to the increase of the number of members and the point conversion rate. |
Employee compensation payable | 124,938,749.36 | 2.16 | 78,649,049.72 | 1.70 | 58.86 | Mainly due to the increased benefits payable to employees at the end of the period because of the expanded operation scale and continuous staffing adjustment in the current period. |
Taxes | 152,918,87 | 2.65 | 99,893,176.9 | 2.16 | 53.08 | Mainly due to the |
Item | Amount as of the end of the current period | in total assets(%) | Amount as of the end of the previous period | in total assets(%) | YOY change ratio (%) | Description |
payable | 1.45 | 7 | expanded sales scale and the improved profitability of the Company. | |||
Other payables | 216,392,183.41 | 3.75 | 62,162,153.55 | 1.34 | 248.11 | Mainly due to increased restricted stock repurchase obligations at the end of the period. |
Non-current liabilities due within one year | 2,549,452.14 | 0.04 | Not applicable | Mainly due to the transfer of lease liabilities due within one year. | ||
Lease liabilities | 3,718,119.41 | 0.06 | Not applicable | Mainly due to the addition of an office site and the signing of lease contracts in the current period. | ||
Estimated liabilities | 59,282,928.68 | 1.03 | 10,812,084.88 | 0.23 | 448.30 | Mainly due to the adjustment of offline channels, the intensified adjustment of the department store channel, the optimization of household chemicals outlets, and the shrinking of the supermarket channel. |
Deferred income tax liabilities | 19,019,431.67 | 0.33 | 8,408,158.81 | 0.18 | 126.20 | Mainly due to the increased deferred income tax liabilities accrued for one-time depreciation of fixed assets. |
Share capital | 283,519,469.00 | 4.91 | 201,009,966.00 | 4.34 | 41.05 | Mainly due to that the Company |
Item | Amount as of the end of the current period | in total assets(%) | Amount as of the end of the previous period | in total assets(%) | YOY change ratio (%) | Description |
implemented the plan for the capitalization of capital reserves and the 2022 restricted share incentive plan. | ||||||
Treasury stock | 164,976,000.00 | 2.86 | 5,628,128.21 | 0.12 | 2,831.28 | Mainly due to that the Company implemented the 2022 restricted share incentive plan, recognized liabilities for repurchase obligations and included them in the treasury stock. |
Other comprehensive income | -1,918,603.07 | -0.03 | -1,247,674.10 | -0.03 | Not applicable | Mainly due to the changes in translation difference of financial statements denominated in foreign currencies. |
Surplus reserve | 141,759,734.50 | 2.45 | 100,634,780.00 | 2.17 | 40.87 | Mainly due to the withdrawal of statutory surplus reserve according to the net profit of the parent company. The statutory surplus reserve does not need to be withdrawn if the cumulative amount reaches fifty percent or more of the registered capital. |
Retained profits | 2,300,384,763.19 | 39.81 | 1,696,978,064.52 | 36.63 | 35.56 | Mainly due to increased net profit |
Item | Amount as of the end of the current period | in total assets(%) | Amount as of the end of the previous period | in total assets(%) | YOY change ratio (%) | Description |
in the current period. |
Other explanationsNone
2. Overseas assets
√ Applicable □ Not applicable
(1) Scale of assets
Including RMB216.10million of overseas assets, accounting for 3.74% of the total assets.
(2) Description of a high percentage of overseas assets
□ Applicable √ Not applicable
3. Restrictions on prime assets as of the end of the Reporting Period
√ Applicable □ Not applicable
Unit: RMB
Item | Ending book value | Cause for restrictions |
Cash and cash equivalents | 35,670,000.00 | Including transformer deposit, Pinduoduo deposit, L/C deposit, Tmall deposit, and Alipay deposit, etc. |
Total | 35,670,000.00 |
4. Other explanations
□ Applicable √ Not applicable
(IV) Analysis of industry operational information
√ Applicable □ Not applicable
Refer to the "Analysis of chemical operational information" below
Analysis of chemical operational information1 Basic industry information
(1). Industry policies and changes
□ Applicable √ Not applicable
(2). Major sub-industries and industrial status of the Company
√ Applicable □ Not applicable
See the description in "(I) Industry pattern and trends", "VI. Discussion and Analysis of the Company'sFuture Development", "Section III Management Discussion and Analysis".
Industrial status of the Company:
According to comprehensive industry data analysis, the Company has gained some market share in thedomestic cosmetics market.
2 Products and production
(1). Major business models
√ Applicable □ Not applicable
See the description of business models in "III. Business Activities Carried out by the Company during theReporting Period", "Section III Management Discussion and Analysis".
Adjusted business models during the Reporting Period
□ Applicable √ Not applicable
(2). Major products
√ Applicable □ Not applicable
Products | Sub-industry | Major upstream raw materials | Major downstream application areas | Major price influencing factors |
Skincare (including cleansing) | Skincare | Humectant, active substance, grease wax, emulsifier, surfactant, essence, packaging | Skincare, cleansing | Personal income, skin type, lifestyle habits, brand preference |
Make-up cosmetics | Make-up | Grease wax, emulsifier, toner, essence, packaging | Make-up, beauty, contour | Personal income, living habits, brand preference |
Body & hair | Body & hair | Surfactant, humectant, essence, packaging | Body & hair | Personal income, skin type, lifestyle habits, brand preference |
(3). R&D innovation
√ Applicable □ Not applicable
See "5. New R&D strategy", "V. Main Operations during the Reporting Period", "Section III ManagementDiscussion and Analysis".
(4). Production technologies and process
√ Applicable □ Not applicable
The Company's products are mainly divided into skincare (including cleansing) and make-up cosmetics.Their production processes are shown as follows:
1. Production process of skincare cosmetics
2. Production process of cleansing cosmetics
3. Production process of make-up cosmetics
(1) Cosmetic powder blocks:
Skincare raw materials | Functional components | |
Heating todissolve
Heating to dissolve | Homogeneous emulsification | Cooling |
Warehousing
Warehousing | Cartoning | Packing | Filling | Storage |
Inspection
Inspection
of semi-finished
products
Heat
Heat
preservation
and mixingFiltration anddischarge
Filtration anddischargeInspection offinished products
Inspection offinished productsCleansingraw materials
Cleansingraw materialsHeating and
mixing
Heating and mixing | Cooling |
Warehousing
Warehousing | Cartoning | Packing | Filling | Storage |
Inspection
Inspection
of semi-finished
products
Heat
Heat
preservation
and mixingFiltration and
discharge
Filtration and
discharge
Inspection of
finished products
(2) Lipstick cosmetics
(3) Eyelashes and eyeliners
(5). Production capacity and operation status
√ Applicable □ Not applicable
Unit: RMB ’0,000 Currency: RMB
Powder rawmaterialsMixing
MixingWarehousing
Warehousing | Cartoning | Packing |
Crushing and
sieving
Crushing and
sieving
Functionalcomponents
Functionalcomponents
Discharge
DischargeForming
FormingInspection of
Inspection of
finished
products
Toning
Toning
Visual
inspection
Visual
inspection
Powder storage
Powder storageFilling
FillingInspection ofsemi-finished
products
Inspection ofsemi-finished
productsAluminum plate
Aluminum plate
Wax-basedraw materials
Wax-basedraw materials
Heating todissolve
Heating todissolve
Warehousing
WarehousingToning
ToningPacking
PackingDefoaming
DefoamingFunctionalcomponents
Functionalcomponents
Molding
MoldingFiltration anddischarge
Filtration and
discharge
Storage
StorageInspection of
Inspection of
finished
products | Visual |
inspection
Cartoning
CartoningInspection
Inspection
of semi-finished
products
Basic raw
materials
Basic raw
materials
Heating to
dissolve
Heating to
dissolveWarehousing
WarehousingToning
ToningPacking
PackingCooling
CoolingFunctionalcomponents
Functionalcomponents
Filling
FillingDischarge
DischargeStorage
StorageInspection of
Inspection of
finished
products
Homogeneousemulsification
HomogeneousemulsificationCartoning
CartoningInspection
Inspection
of semi-finished
Main plant or project | Designed capacity | Capacity utilization ratio (%) | Capacity under construction | Amount of investment in capacity under construction | Estimated time of completion of capacity under construction |
Huzhou Skincare Factory | 300million pcs | 86.67 | 101.18 million pcs | 16,801.64 | December 2024 |
Huzhou Cosmetics Factory | 40 million pcs | 25.06 |
Change in production capacity
□ Applicable √ Not applicable
Adjustment of product line and optimization of capacity structure
□ Applicable √ Not applicable
Unexpected shutdown
□ Applicable √ Not applicable
3 Procurement of raw materials
(1). Basic information on major raw materials
√ Applicable □ Not applicable
Major raw materials | Purchase model | Settlement method | YOY price change ratio (%) | Purchase quantity | Consumption |
Packaging materials | Mainly by competitive procurement, except for some strategic suppliers | Settle within the payment period as agreed | -14.77 | About 1,560 million pieces | About 1,510 million pieces |
Raw material_humectant | Mainly by competitive procurement, while establishing long-term strategic cooperation with advantageous suppliers | Settle within the payment period as agreed | 5.31 | About 2,052 tons | About 1,953 tons |
Raw material_active | Mainly by price inquiry and | Settle within the | 42.15 | About 754 tons | About 720 tons |
substance | comparison, while performing diversified cultivation of suppliers with a single source of supply | payment period as agreed | |||
Raw material_grease wax | Mainly by competitive procurement, while establishing long-term strategic cooperation with advantageous suppliers | Settle within the payment period as agreed | 24.62 | About 850 tons | About 810 tons |
Raw material_emulsifier | Mainly by competitive procurement, while cooperating with industry-leading suppliers on some raw materials | Settle within the payment period as agreed | 31.46 | About 160 tons | About 150 tons |
Raw material_sunscreen | Mainly by competitive procurement, while establishing long-term strategic cooperation with advantageous suppliers | Settle within the payment period as agreed | 2.89 | About 102 tons | About 92 tons |
Impact of changes in the prices of major raw materials on the Company's operating costs: Rising prices ofraw materials increase operating costs.
(2). Basic information on major sources of energy
√ Applicable □ Not applicable
Major energy | Purchase model | Settlement method | YOY price change ratio (%) | Purchase quantity | Consumption |
Water | Fixed agreement with the local water company | Prepayment and monthly settlement or payment on demand according to the local requirements | 0.00 | 201,279 tons | 201,279 tons |
Electricity | Fixed agreement with the local power supply company | Prepayment and monthly settlement or payment on demand according to the local requirements | 0.00 | 11.76 million kwh | 11.76 million kwh |
Gas | Fixed agreement with the local gas supply company | Prepayment and monthly settlement or payment on demand according to the local requirements | 38.67 | 368,936 cbm | 368,936 cbm |
Impact of changes in the prices of major energy on the Company's operating costs: The price of gas isincreased by 38.67%, resulting in a slight increase in operating cost since the consumption of gas onlytakes up a small part in the energy structure.
(3). Countermeasures for risks of fluctuations in the prices of raw materialsMajor financial products such as derivatives
□ Applicable √ Not applicable
(4). Basic information on other methods adopted such as staged reserves
□ Applicable √ Not applicable
4 Product sales
(1). Basic information on the Company's primary business activities by sub-industry
√ Applicable □ Not applicable
Unit: RMB ’0,000 Currency: RMB
Sub-industry | Operating revenue | Operating cost | Gross profit | Change in operating | Change in operating | Change in gross profit | Gross profit margin for products in |
margin (%) | revenue YOY (%) | cost YOY (%) | margin YOY (%) | the same industry and field | |||
Skincare (including cleansing) | 548,364.39 | 161,699.81 | 70.51 | 38.56 | 29.68 | 2.02 | No public information available |
Make-up cosmetics | 75,246.03 | 25,166.70 | 66.55 | 21.70 | -4.46 | 9.16 | No public information available |
Body & hair | 12,565.94 | 4,768.74 | 62.05 | 509.93 | 365.92 | 11.73 | No public information available |
Others | 0.00 | 0.00 | - | -100.00 | -100.00 | - | No public information available |
(2). Basic information on the Company's primary business activities by sales channel
√ Applicable □ Not applicable
Unit: RMB ’0,000 Currency: RMB
Sales channel | Operating revenue | Change in operating revenue YOY (%) |
Online | 578,803.44 | 47.50 |
Offline | 57,372.91 | -17.62 |
Statement of accounting policies
□ Applicable √ Not applicable
5 Environmental protection and safety
(1). Basic information on major work safety accidents of the Company during the Reporting Period
□ Applicable √ Not applicable
(2). Major environmental violations
□ Applicable √ Not applicable
(V) Analysis of investmentOverall analysis of external equity investments
√ Applicable □ Not applicable
Item | Ending amount | Beginning amount | ||||
Carrying amount | Impairment provision | Book value | Carrying amount | Impairment provision | Book value | |
Other equity instrument investments | 146,402,400.00 | 146,402,400.00 | 56,402,400.00 | 56,402,400.00 | ||
Investment in joint ventures | 3,068,948.16 | 3,068,948.16 | 3,074,758.68 | 3,074,758.68 | ||
Investment in associates | 216,906,642.52 | 81,442,213.22 | 135,464,429.30 | 181,555,246.18 | 14,670,468.59 | 166,884,777.59 |
Total | 366,377,990.68 | 81,442,213.22 | 284,935,777.46 | 241,032,404.86 | 14,670,468.59 | 226,361,936.27 |
For details, see the description in "17. Long-term equity investments" and "18. Other equity instrument investments ", "VII. Notes to the Items in ConsolidatedFinancial Statements", "Section X Financial Report" of this report.
1. Significant equity investments
□ Applicable √ Not applicable
2. Significant non-equity investments
□ Applicable √ Not applicable
3. Financial assets measured at fair value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Asset category | Beginning amount | Profit and loss from changes in fair value | Accumulated change in fair | Impairment accrued for the current period | Amount of purchase for | Amount of sale/redemption | Other changes | Ending amount |
for the current period | value included in equities | the current period | for the current period | |||||
Other | 56,402,400.00 | 90,000,000.00 | 146,402,400.00 | |||||
Total | 56,402,400.00 | 90,000,000.00 | 146,402,400.00 |
For details, refer to the particulars contained in "18. Description of other equity instrument investments" in "VII. Notes to the Items of Consolidated FinancialStatements", of "Section X Financial Report" of this report
Description of securities investment
□ Applicable √ Not applicable
Description of private equity investment
□ Applicable √ Not applicable
Description of derivatives investment
□ Applicable √ Not applicable
4. Progress of major asset restructuring and integration during the Reporting Period
□ Applicable √ Not applicable
(VI) Sale of major assets and equity
□ Applicable √ Not applicable
(VII) Analysis of major holding companies
√ Applicable □ Not applicable
Unit: RMB’0,000
Major subsidiary | Nature of business | Major products and services | Registered capital | Total assets | Net assets | Net profit | Holding or shareholding |
Zhejiang Meiligu Electronic Commerce Co., Ltd. | Cosmetics sales | Cosmetics | 1,000.00 | 62,360.91 | 25,376.57 | 8,238.00 | Holding |
Hangzhou Proya Trade Co., Ltd. | Cosmetics sales | Cosmetics | 5,000.00 | 27,637.31 | 5,554.91 | -5,333.47 | Holding |
(VIII) Structured entities controlled by the Company
□ Applicable √ Not applicable
VI. Discussion and Analysis of the Company's Future Development(I) Industry pattern and trends
√ Applicable □ Not applicable
According to statistics from the National Bureau of Statistics, in 2022, the total retail sales of consumergoods reached RMB43,973.3 billion, down by 0.2% YOY; the total retail sales of cosmetics reachedRMB393.6 billion, down by 4.5% YOY (covering consumer goods above designated units).
(II) Development strategy of the Company
√ Applicable □ Not applicable
Winning Now Winning Later, "6*N" strategy, enhanced core competence, and enriched brand matrix."6" represents new consumption, new marketing, new organization, new mechanism, new technology,new intelligent manufacturing; "N" represents N brands created
(1) New consumption: Innovative services to meet more consumer needs and consumer value;
(2) New marketing: Digital marketing, fine omni-channel operation, and accurate and advanced consumerinsight. Focus on future marketing possibilities in new areas and make preparations;
(3) New organization: An efficient organization that is flat, platform-based, self-driven and collaborative;
(4) New mechanism: A flexible, diversified, business-oriented incentive mechanism to be established;
(5) New technology: The focus on basic scientific research and the actions taken to establish the presenceof new raw materials and new R&D technologies, develop more R&D partners and resources in differentfields to form a global R&D landscape, provide technological guarantee for targeted product enhancement,and create a sustainable and unique R&D technological competitiveness; measures taken to furtherimprove the intelligent operation management system and carry out targeted transformation toward digitalintelligence and informatization to improve operational refinement and management efficiency in businessand organization and achieve process transparency and accurate decision-making;
(6) New intelligent manufacturing: Creation of an agile and flexible supply chain to serve the hero productmatrix and the application of the digital management system to improve production quality, strengthen thesupply chain supervision, and guarantee product quality.- The core connotation of "6*N" is to enable or incubate different brands that meet different needs ofdifferent consumers based on the above six capabilities.While Proya, as the main brand, maintains rapid and steady development, the Company creates, replicates,enables and incubates different brands to meet the different needs of different consumers based on thesuccessful experience and core competence, enlarges the customer base, extends the demand coverage ofthe life cycle of customers, gradually builds and improves the multi-brand matrix, and achieves long-termsustainable growth.
(III) Business plan
√ Applicable □ Not applicable
I. Construction of a multi-category and multi-brand matrix1 Skincare products - Proya, HapsodeProya:
(1) Brand: Better establish the brand awareness of "A Scientific Choice for Skin" by more scientificproduct portfolios, better and more delicate product experiences, and the output of the reasonable conceptof skincare, thus taking the brand to a new level. Maintain outstanding products as the core driver of thebrand, and make satisfactory services and experiences consumers' reason for choice. Dig deeper into thebrand's insistence on products and belief in scientific formula, communicate with consumers in an all-around manner, deliver needed products and great experiences to consumers, and make Proya a leader inthe era of "home-made products".
(2) Product: Better upgrade the product in formula, efficacy, design, and use experiences around the coremid-end product line, consolidate the status of hero products; better divide the needs of users with differentskin types, reserve richer and more detailed efficacy and categories, and expand the coverage to moreconsumers to satisfy their needs for skin care.
(3) Marketing: 1) In 2023, Proya will keep carving the brand by taking "exploration and discovery" asthe core, continuously express our opinions in gender equality, family responsibility, intimate relationships,young people's growth, mental health, and other socially important issues, so as to expand the impact ofbrand long-termism beyond brand incidents. 2) Based on the brand identity of the year, Proya will buildits own online public welfare platform to carry long-term public welfare actions and content under thebrand's core projects and extend care of the brand.
(4) Channel:
1) Tmall: Strengthen the hero product matrix of the three major families to build multiple super-heroproducts, penetrate into the market of the essence category as the core of the brand, enhance the penetrationof face cream, face mask, facial care kits, and other core categories, further improve the proportion ofhigh-value users, better refine the operation, improve services, and lift the brand mindset.
2) TikTok: Strengthen the universal operation of TikTok, open multiple hero product matrix accounts toachieve integrated operation of brand recommendation and purchase, improve the overall operationefficiency, establish presence in the shelf e-commerce on TikTok, better work with high-quality KOLs,and achieve diversified and healthy brand development in TikTok.
3) JD: Continuously deepen population-based operation, off-site brand marketing, and in-depth platformcooperation to realize resonance inside and outside the site; change to user-based operation for themembership section with the focus on improving service level and user experiences and maintaining userloyalty; continuously strengthen the refined operation of all traffic channels.
4) Offline: Household chemicals: Continuously deepen the outlet structure; adjust the structure of channelproducts and primarily aim at the direction of basic moisturizing and anti-aging products; beef up thedigitalization capability to empower offline sales, improve product turnover rate, and raise the satisfactionof channel customers. Department stores: Focus on influential business district and large department storegroups, explore the new "online+offline" sales mode, and increase the repurchase rate and per customertransaction.
Hapsode:
(1) Brand: Continuously consolidate the strategy of hero cleansing products, take the existing advantagein the oil remover category, expand the customer base of Hapsode, and increase brand penetration in theyoung population.
(2) Product: Complete the layout of the full cleansing product line based on Hapsode's pyramid-typedproduct system for oily skin. Keep improving the product efficacy of oil control in 2023 as the corecompetitiveness of an oily skin care brand; create the product combo for oily and sensitive skin for thesoothing product line around the Ultra Soothing Facial Mask and the Ultra Soothing Serum.
(3) Marketing: Keep focusing on college students as the core target consumers and carry out serial brandevents to deliver Hapsode's young and dynamic brand image.
(4) Channel: Focus on TikTok and Tmall and put more efforts on self live-streaming.
2. Make-up - TIMAGE
(1) Brand: Focus on building a professional brand of "Chinese make-up" around the brand core of"Chinese make-up, original beauty" to deliver "original beauty" experiences to consumers. Consolidatebrand professionalism with marketing content, improve brand services by seeing through the targetcustomer group, and enhance the brand's sense of value by innovating in brand peripherals and gifts.
(2) Product: Further expand the "Contour Line" advantages and keep increasing the brand penetration.Continue to establish presence in the large make-up base category, reserve sub-categories such as liquidfoundation, cream foundation, cushion, and powder & pact, complete the make-up base mindset, andcreate a "professional" brand image.
(3) Marketing: Carry out content marketing around new product launch, festival topics, and IPcooperation.
(4) Channel: Focus on Tmall and TikTok.
3. Body&Hair - Off&Relax (OR):
(1) Brand: Establish the brand image of a scalp health expert from Japan, stabilize the product strength,and strengthen the core brand efficacy as "a scalp health solution", allowing core consumers to recognizethe brand values of OR.
(2) Product: Further bring together international R&D capabilities and complete the global supply chainsystem. Rely on Japan's leading fundamental research and technological development advantages to erect
a technological barrier and offer consumers a complete scalp health solution. Make further presence in thescalp solution market, upgrade hair masks, hair care essence oil, and other hair care products, and createa new flagship product line.
(3) Marketing: Output the brand personality and accumulate brand assets by communicating OR's brandtrait as a "professional scalp health care expert". Launch product marketing based on the core mindset ofa top Japanese brand and a scalp health expert, allow consumers to better understand the conditions oftheir scalp, and help them build up the basic scalp health knowledge base; continue with the "tiny butbeautiful" brand marketing, advocate a lifestyle from scalp health to mental and physical health, penetrateinto the core population, and enhance the brand likability among target consumers.
(4) Channel: Focus on Tmall (Tmall Global, Tmall Flagship Store) and TikTok in the Chinese Mainland;make more breakthroughs in physical stores in Japan while increasing the online traffic.
II. R&D constructionIn 2023, the Company will keep adopting the internationalization strategy, complete and upgrade theresearch and development system, introduce high-level and cross-discipline talents with a global visioncovering chemistry, chemical engineering, pharmacology, dermatology, statistics, and computationalbiology; establish research and development laboratories at home and abroad based on R&D advantagesin all regions across the globe. While completing the system of consumer and technology insight,technology development, raw material development, formula, product development, and efficacyevaluation, the Company also strengthens strategic partnerships with globally-leading research institutionsspecializing in biotechnologies, life sciences, cytology, and dermatology.
(1) Fundamental research: Continue to plan for the development pipeline of new technologies and newraw materials, and develop advanced enabling technologies in computational biology, genomics, andproteomics.
(2) Applied research: Guided by market demand, develop skin care and make-up products of various levelswith obvious efficacy, great skin feel and favorable costs, and complete the technological layout for futureiterations of all hero products.
(3) Clinical research: Continue with the clinical research and verification of products, explore newmethods to verify the efficacy of raw materials and products, and develop new efficacy testing methodsby using advanced instruments and statistics.
(IV) Possible risks
√ Applicable □ Not applicable
1. Industry competition risks
(1) The Company's brand strategy and channel strategy fail to come up to expectations due to intensifiedcompetition from various brands in the industry;
(2) The control of digital and precise delivery costs fails to come up to expectations due to intensifiedcompetition in marketing and ads delivery.
2. Project incubation risks
(1) New brand incubation risk: Performance fails to come up to expectations despite big investment inmarketing;
(2) New category cultivation risk: Performance fails to come up to expectations due to different operationmodes for different categories and the incompetent team.
3. Impact of the uncertainties of the international situation on the supply chain
(V) Other
□ Applicable √ Not applicable
VII. Circumstances Where the Company Fails to Disclose Due to Non-applicability or SpecialReasons Such as State Secrets and Trade Secrets and Statement of Reasons
□ Applicable √ Not applicable
Section IV Corporate Governance
I. Description of Corporate Governance
√ Applicable □ Not applicable
During the Reporting Period, the Company continuously improved its standard operation and corporategovernance structure based on the actual situation pursuant to applicable laws and regulations, includingthe Company Law, the Securities Law, the Listing Rules of the Shanghai Stock Exchange and the Code ofCorporate Governance of Listed Companies as well as the Articles of Association. The Company has setup the general meeting of shareholders, Board of Directors, Board of Supervisors and special committeesunder the Board of Directors as required and developed corresponding rules of procedure. Such rulesdefine the duties, powers, procedures and obligations of organizations at all levels in terms of decision-making, supervision and implementation. They form a scientific and effective governance structurefeaturing clear rights and responsibilities, mutual checks and balances, and mutual coordination. Duringthe Reporting Period, the Company consciously fulfilled the obligation for information disclosure,managed investor relationships, and promoted the Company to continuously improve its standardoperation. The corporate governance status complies with the requirements of the normative documentson the governance of listed companies issued by the CSRC.
Whether there are significant differences between the Company's corporate governance and therequirements of laws, administrative regulations and CSRC's regulations on the governance of listedcompanies; if so, explain the reasons.
□ Applicable √ Not applicable
II. Specific measures taken by the Company's controlling shareholders and actual controllers to
ensure the Company's independence in assets, personnel, finance, organization and businessactivities as well as solutions, work progress and subsequent work plans taken due to influenceon the Company's independence
□ Applicable √ Not applicable
Circumstances where any controlling shareholders, actual controllers and other entities under their controlengage in the same or similar business activities, as well as the impact of horizontal competition or majorchanges in horizontal competition on the Company, resolutions taken, progress and follow-up resolutions
□ Applicable √ Not applicable
III. Meetings of the General Meeting of Shareholders during the Reporting Period
Session | Date | Reference | Date of release | Resolution |
2021 Annual General Meeting of Shareholders | May 12, 2022 | Announcement No. 2022-027 on SSE website (www.sse.com.cn) | May 13, 2022 | The meeting approved proposals including the Company's Annual Report 2021 and its Summary, and the Plan for Annual Profit Distribution and Capitalization of Capital Reserves for 2021. For details, see the Announcement on Resolutions of the 2021 Annual General Meeting of Shareholders (No.: 2022-027) released on the SSE website on May 13, 2022 (http://www.sse.com.cn) and relevant media. |
1st Extraordinary General Meeting of Shareholders in 2022 | July 25, 2022 | Announcement No. 2022-041 on SSE website (www.sse.com.cn) | July 26, 2022 | The meeting approved proposals including the Proposal on 2022 Restricted Share Incentive Plan of the Company (Draft) and Its Summary, and the Proposal on Formulating the Assessment Management Method for the 2022 Restricted Share Incentive Plan. For details, see the Announcement on Resolutions of the 2022 First Extraordinary General Meeting of Shareholders (No.: 2022-041) released on the SSE website on July 26, 2022 (http://www.sse.com.cn) and relevant media. |
Request of preferred shareholders with restored voting rights for convening an extraordinary generalmeeting
□ Applicable √ Not applicable
Description of the General Meeting of Shareholders
□ Applicable √ Not applicable
IV. Directors, Supervisors and Senior Management(I) Changes in shareholding and remuneration of current and resigned directors, supervisors and senior management during the Reporting Period
√ Applicable □ Not applicable
Unit: share
Name | Position (Note) | Gender | Age | Term start date | Term end date | Number of shares held at the beginning of the year | Number of shares held at the end of the year | Change in shares during the year | Cause for change | Total pre-tax remuneration received from the Company during the Reporting Period (RMB’0,000) | Any remuneration from the Company's related parties |
HOU Juncheng | Chairman of the Board of Directors | Male | 59 | 7/30/2015 | 9/8/2024 | 69,764,815 | 97,670,741 | 27,905,926 | Shares converted from capital reserve | 162.94 | No |
FANG Yuyou | Director, General Manager | Male | 54 | 7/30/2015 | 9/8/2024 | 36,347,843 | 45,772,470 | 9,424,627 | Shares converted from capital reserve and shares reduced for personal capital need | 162.94 | No |
HOU Yameng | Director | Male | 35 | 9/9/2021 | 9/8/2024 | 0 | 0 | 0 | 48.06 | No | |
HOU Yameng | Deputy General | Male | 35 | 9/15/2021 | 9/8/2024 | 0 | 0 | 0 | 0.00 | No |
Manager | |||||||||||
MA Dongming | Independent Director | Male | 53 | 5/13/2021 | 9/8/2024 | 0 | 0 | 0 | 15.00 | No | |
GE Weijun | Independent Director | Male | 48 | 9/9/2021 | 9/8/2024 | 0 | 0 | 0 | 15.00 | No | |
HOU Luting | Supervisor | Female | 34 | 5/2/2018 | 9/8/2024 | 0 | 0 | 0 | 22.28 | No | |
FANG Qin | Supervisor | Female | 33 | 5/8/2018 | 9/8/2024 | 0 | 0 | 0 | 32.02 | No | |
HU Lina | Supervisor | Female | 35 | 9/9/2021 | 9/8/2024 | 0 | 0 | 0 | 17.19 | No | |
JIN Yanhua | Deputy General Manager | Male | 61 | 4/16/2018 | 9/14/2024 | 54,981 | 216,973 | 161,992 | Shares converted from capital reserve and grant of 2022 restricted stock incentive | 70.79 | No |
WANG Li | CFO | Female | 45 | 9/3/2018 | 9/14/2024 | 32,322 | 225,251 | 192,929 | Shares converted from capital reserve and grant of 2022 restricted stock incentive | 120.17 | No |
WANG Li | Deputy General Manager, Secretary of the Board of Directors | Female | 45 | 9/15/2021 | 9/14/2024 | 0 | 0 | 0 | 0.00 | No | |
Total | / | / | / | / | / | 106,199,961 | 143,885,435 | 37,685,474 | / | 666.40 | / |
Notes:
The total pre-tax remuneration received by the above directors, supervisors and the senior management from the Company during the Reporting Period is the totalpre-tax remuneration during their term of office in the Reporting Period.
Name | Working experience |
HOU Juncheng | He once worked in Yiwu Liaoyuan Daily Chemical Co., Ltd., Hangzhou Proya Cosmetics Co., Ltd., and Hangzhou Proya Holding Co., Ltd. Since 2007, he has been working in the Company and its predecessor. From September 2007, he has served as Executive Director of the Company. From August 2012, he has served as Chairman of the Company and its predecessor. As of the end of the Reporting Period, he concurrently served as Executive Director and General Manager of Proya Trade, Executive Director of Meiligu, Executive Director of Chuangdai Electronics, Executive Director of Yueqing Laiya, Inside Director and Representative Director of Korea Hanna, Executive Director and General Manager of Hapsode (Hangzhou), Executive Director and General Manager of Huzhou Hapsode, Executive Director and General Manager of Danyang Hapsode, Executive Director and General Manager of Mijing Siyu (Hangzhou), Executive Director and General Manager of Huzhou Younimi, Executive Director of Proya (Hainan), Executive Director of Proya (Zhejiang), Chairman and General Manager of Hangzhou Kunyi Industrial Co., Ltd., Chairman of CBIC, Executive Director and General Manager of Huzhou Beauty Town Technology Incubation Park Co., Ltd., Director of Xinjiang Huanyu New Silk Road Investment Development Co., Ltd., Director of Yongxinou (Ningbo) International Trading Co., Ltd., and Executive Director of Zhejiang Zhujin Enterprise Management Co., Ltd. |
FANG Yuyou | He once worked in Shijiazhuang Liaoyuan Cosmetics Co., Ltd., Hangzhou Proya Cosmetics Co., Ltd., and Hangzhou Proya Holdings Co., Ltd. Since 2007, he has been working in the Company and its predecessor. Since August 2012, he has served as Director and General Manager of the Company and its predecessor. As of the end of the Reporting Period, he concurrently served as General Manager of Meiligu, General Manager of Yueqing Laiya, Inside Director of Korea Hanna, Director of Hongkong Xinghuo, Executive Director and General Manager of Hangzhou Fangxiake Investment Co., Ltd., Director of Hangzhou Kunyi Industrial Co., Ltd., Director of Hangzhou Tairentang Biotechnology Co., Ltd., Supervisor of Zhejiang Boweihui Grapevine Technology Co., Ltd., and Director of Jiangsu Lenong Weimei Agricultural Technology Development Co., Ltd. |
HOU Yameng | He once worked in the E-commerce Department of Proya Cosmetics Co., Ltd., and has served as Director and Deputy General Manager of the Company since September 2021. As of the end of the Reporting Period, he concurrently served as Executive Director and General Manager of Hainan Mengya Enterprise Consulting Co., Ltd. and Executive Director and General Manager of Hangzhou TIMAGE. |
MA Dongming | He used to be Deputy Director and Director of CSRC Zhejiang Branch, Director of the Commissioner's Office of CSRC Shanghai Branch, and Deputy General Manager and Secretary of the Board of Directors of Yongan Futures Co., Ltd. Since May 2021, he has served as Independent Director of the Company. As of the end of the Reporting Period, he concurrently served as Independent Director of Transwarp Technology (Shanghai) Co., Ltd., Independent Director of Zhejiang Shuangyuan Technology Co., Ltd., and Independent Director of Merit Interactive Co., Ltd. |
GE Weijun | He once worked in Zhejiang Xingyun Law Firm and Xingyun Law Firm Shanghai Branch. From February 2006 to December 2021, he served as Professor, Doctoral Supervisor, and Legal Adviser of Shanghai University of Finance and Economics. Since January 2022, he has served as a full-time teacher (professor) at the Law School of Fudan University. Since September 2021, he has served as Independent Director of the Company. He also serves as Arbitrator at the China International Economic and Trade Arbitration Commission, Arbitrator at the Shanghai International Economic and Trade Arbitration Commission, Arbitrator at Shanghai Arbitration Commission ,Arbitrator at Shenzhen Court of International Arbitration, Executive Officer of the China Commercial Law Society, Vice President of the Commercial Research Branch of the Shanghai Judicial Think Tank, Vice President of the Commercial Law Research Association of the Shanghai Law Society, Vice President of the Cultural Law Research Association of the Shanghai Law Society, Independent Director of Shanghai Huace Navigation Technology Ltd., Independent Director of Changzhou ECTEK Automotive Electronics System Co., Ltd., Independent Director of Hangzhou EZVIZ Network Co., Ltd. and Independent Director of Zheshang Development Group Co., Ltd. |
HOU Luting | From July 2013 to January 2014, she served as an expatriate financial specialist at Zhonghui Accounting Firm. From February 2014 to June 2017, she served as a packaging material procurement specialist at the Purchasing Department of the Company. From June 2017 to April 2019, she served as a raw material procurement specialist at the Purchasing Department of the Company. From April 2019 to March 2021, she served as a raw material evaluation engineer. From March 2021 to December 2022, she served as a deputy price review manager. From December 2022 to present, she has served as a price review manager. Since May 2018, she has served as Supervisor of the Company. |
FANG Qin | From November 2008 to January 2018, she served as Director of the Planning Department of the Company and its predecessor. From January 2018 to July 2022, she served as Planning Strategy Manager of the Company. Since July 2022, she has served as Senior Planning Strategy Manager of the Company. Since May 2018, she has served as Supervisor of the Company. |
HU Lina | She once worked in Pan-China Certified Public Accountants (Special General Partnership), and has served as Strategy Supervisor at the Company since 2013, and has served as Supervisor of the Company since September 2021. |
JIN Yanhua | He once worked in Zhejiang Sanmen Fertilizer Factory, Zhejiang InBev Yandangshan Beer Co., Ltd., Zhejiang InBev Jinhua Beer Co., Ltd., |
Hangzhou Proya Cosmetics Co., Ltd., and Hangzhou Proya Holding Co., Ltd. From 2007 to August 2012, he served as General Manager of the Huzhou Factory under the Company and its predecessor. Since August 2012, he has served as General Manager of the Company's Supply Chain Management Center; since April 2018, he has served as Deputy General Manager of the Company. As of the end of the Reporting Period, he concurrently served as Executive Director of Hanya (Huzhou), Executive Director of Huzhou UZERO, Manager of Chuangdai Electronics, Executive Director and General Manager of Proya Commercial, Executive Director and General Manager of Huzhou Niuke, Executive Director and General Manager of Hangzhou Wanyan, Executive Director and General Manager of Zhejiang Beute, Executive Director of Shanghai Zhongwen, Executive Director and General Manager of Ningbo Proya, Chairman of Ningbo Keshi, Chairman of Ningbo TIMAGE, Director of Hong Kong Keshi, Director of Hong Kong Wanyan, Director of Hong Kong Zhongwen, Executive Director of Zhejiang Qingya, Executive Director of Luxiaotie, Executive Director and General Manager of Hangzhou Yizhuo, Executive Director and General Manager of Hangzhou Weiluoke, Executive Director and General Manager of Hangzhou Oumisi, Director of Japan OR, Executive Director and General Manager of Guangzhou Qianxi, Director of Ningbo Xiyou Interactive Entertainment Culture Media Co., Ltd., General Manager of Proya (Hainan), Director of Korea Hapsode, Executive Director and General Manager of Xuzhou Laibo, Executive Director and General Manager of Shenggelan (Hangzhou), Chairman and General Manager of Ningbo Tangyu, Manager of Proya (Zhejiang), Executive Director and General Manager of Hangzhou Boxin, Executive Director and General Manager of Huzhou Keyan Trading Co., Ltd. | |
WANG Li | She once served as CFO of Guangzhou Yingtai Digital Power Technology Co., Ltd., Financial Representative of US CELLSTAR (Phonest Star), Financial Manager of Shanghai Ruili Sports Co., Ltd., Financial Director of Vgrass Fashion Co., Ltd., Financial Director of Zhuoshang Clothing (Hangzhou) Co., Ltd., and Financial Director of Jiangsu Sunport Power Corp., Ltd. Since April 2023, she has served as Independent Director of Zhejiang Wazam New Materials Co., Ltd. She is currently Deputy General Manager, Secretary of the Board of Directors, and CFO of Proya Cosmetics Co., Ltd. |
Other explanations
□ Applicable √ Not applicable
(II) Positions of current and resigned directors, supervisors and senior management during theReporting Period
1. Positions held in shareholder entities
√ Applicable □ Not applicable
Name of employee | Name of shareholder entity | Position held in shareholder entity | Term start date | Term end date |
JIN Yanhua | Peixian Deyi Network Technology Partnership (Limited Partnership) | Executive Partner | August 2019 | February 2022 |
Description of position held in shareholder entities | None |
Notes: Peixian Deyi Network Technology Partnership (Limited Partnership) was deregistered in February2022.
2. Positions held in other entities
√ Applicable □ Not applicable
Name of employee | Name of another entity | Position held in shareholder entity | Term start date | Term end date |
HOU Juncheng | Proya Trade | Executive Director and General Manager | June 2011 | |
Meiligu | Executive Director | November 2012 | ||
Chuangdai Electronics | Executive Director | December 2016 | ||
Yueqing Laiya | Executive Director | September 2015 | ||
Korea Hanna | Inside Director and Representative Director | November 2011 | ||
Hapsode (Hangzhou) | Executive Director and General Manager | February 2018 | ||
Huzhou Hapsode | Executive Director and General Manager | May 2016 | ||
Danyang Hapsode | Executive Director and General Manager | December 2016 | ||
Mijing Siyu (Hangzhou) | Executive Director and General Manager | February 2018 | ||
Huzhou Younimi | Chairman of the Board of Directors | March 2019 | November 2022 | |
Huzhou Younimi | Executive Director and General Manager | November 2022 | ||
Proya (Hainan) | Executive Director | January 2021 | ||
Proya (Zhejiang) | Executive Director | May 2022 | ||
Hangzhou Kunyi | Chairman and General | April 2014 |
Name of employee | Name of another entity | Position held in shareholder entity | Term start date | Term end date |
Industrial Co., Ltd. | Manager | |||
Cosmetics Industry (Huzhou) Investment Development Co., Ltd. | Chairman of the Board of Directors | December 2018 | ||
Huzhou Beauty Town Technology Incubation Park Co., Ltd. | Executive Director and General Manager | January 2019 | ||
Xinjiang Huanyu New Silk Road Investment Development Co., Ltd. | Director | March 2021 | ||
Yongxinou (Ningbo) International Trading Co., Ltd. | Director | May 2022 | ||
Zhejiang Zhujin Enterprise Management Co., Ltd. | Executive Director | September 2022 | ||
FANG Yuyou | Meiligu | General Manager | November 2012 | |
Yueqing Laiya | General Manager | September 2015 | ||
Korea Hanna | Inside Director | November 2011 | ||
Hongkong Xinghuo | Director | March 2019 | ||
Huzhou Younimi | Director | March 2019 | November 2022 | |
Hangzhou Fangxiake Investment Co., Ltd. | Executive Director and General Manager | May 2018 | ||
Hangzhou Kunyi Industrial Co., Ltd. | Director | April 2014 | ||
Hangzhou Tairentang Biotechnology Co., Ltd. | Director | December 2014 | ||
Zhejiang Boweihui Grapevine Technology Co., Ltd. | Supervisor | November 2021 | ||
Jiangsu Lenong Weimei Agricultural Technology Development Co., Ltd. | Director | May 2022 | ||
HOU Yameng | Hangzhou Yishan Design Co., Ltd. | Supervisor | September 2017 | January 2022 |
Hainan Mengya Enterprise Consulting Co., Ltd. | Executive Director and General Manager | November 2021 | ||
Hangzhou TIMAGE | Executive Director and | March 2022 |
Name of employee | Name of another entity | Position held in shareholder entity | Term start date | Term end date |
General Manager | ||||
MA Dongming | Particle Culture Technology Group (Hangzhou) Co., Ltd. | Independent Director | October 2020 | March 2022 |
Transwarp Technology(Shanghai)Co., Ltd. | Independent Director | December 2020 | ||
Zhejiang Shuangyuan Science & Technology Development Co., Ltd. | Independent Director | December 2020 | ||
Merit Interactive Co., Ltd. | Independent Director | May 2022 | ||
GE Weijun | Wuxi Genecast Biotechnology Co., Ltd. | Independent Director | January 2020 | August 2022 |
Shanghai Huace Navigation Technology Ltd. | Independent Director | December 2020 | ||
Changzhou ECTEK Automotive Electronics System Co., Ltd. | Independent Director | September 2021 | ||
Hangzhou EZVIZ Network Co., Ltd. | Independent Director | March 2022 | ||
Zheshang Development Group Co., Ltd. | Independent Director | May 2022 | ||
JIN Yanhua | Anya (Huzhou) | Executive Director | December 2016 | |
Huzhou UZERO | Executive Director | January 2018 | ||
Chuangdai Electronics | Manager | February 2018 | ||
Proya Commercial | Executive Director and General Manager | September 2018 | ||
Huzhou Niuke | Executive Director and General Manager | December 2018 | ||
Hangzhou Wanyan | Executive Director and General Manager | January 2019 | ||
Zhejiang Beute | Executive Director and General Manager | March 2019 | ||
Shanghai Zhongwen | Chairman of the Board of Directors | April 2019 | ||
Ningbo Proya | Executive Director and General Manager | December 2019 | ||
Ningbo Keshi | Director | September 2019 | ||
Ningbo TIMAGE | Director | July 2019 | ||
Peixian Deyi Network | Executive Partner | August 2019 | February 2022 |
Name of employee | Name of another entity | Position held in shareholder entity | Term start date | Term end date |
Technology Partnership (Limited Partnership) | ||||
Hong Kong Keshi | Director | March 2019 | ||
Hong Kong Wanyan | Director | October 2019 | ||
Hong Kong Zhongwen | Director | July 2019 | ||
Zhejiang Qingya | Executive Director | May 2020 | ||
Luxiaotie | Executive Director | August 2020 | ||
Hangzhou Yizhuo | Executive Director and General Manager | July 2020 | ||
Hangzhou Weiluoke | Executive Director and General Manager | July 2020 | ||
Hangzhou Oumisi | Executive Director and General Manager | August 2020 | ||
Japan OR | Director | August 2020 | ||
Guangzhou Qianxi | Executive Director and General Manager | October 2020 | ||
Ningbo Xiyou Interactive Entertainment Culture Media Co., Ltd. | Director | September 2020 | ||
Proya (Hainan) | General Manager | January 2021 | ||
Korea Hapsode | Director of the Company | June 2021 | ||
Xuzhou Laibo | Executive Director and General Manager | January 2022 | ||
Huzhou Boyun | Executive Director and General Manager | September 2020 | August 2022 | |
Xuzhou Proya Information Technology Co., Ltd. | Executive Director and General Manager | January 2021 | July 2022 | |
Singuladerm (Hangzhou) | Executive Director and General Manager | October 2021 | ||
Ningbo Tangyu | Chairman and General Manager | October 2021 | ||
Proya (Zhejiang) | Manager | May 2022 | ||
Hangzhou Boxin | Executive Director and General Manager | December 2022 | ||
Huzhou Keyan Trading Co., Ltd. | Executive Director and General Manager | March 2023 | ||
WANG Li | Zhejiang Wazam New Materials Co., Ltd. | Independent Director | April 2023 | |
Description of position held in | None |
Name of employee | Name of another entity | Position held in shareholder entity | Term start date | Term end date |
other entities |
(III) Remuneration of directors, supervisors and senior management
√ Applicable □ Not applicable
Decision-making procedures for remuneration of directors, supervisors and senior management | The remuneration of directors and supervisors of the Company shall be approved by the Remuneration and Appraisal Committee, the Board of Directors and the Board of Supervisors respectively. Then, the remuneration plan shall be submitted to the general meeting of shareholders for deliberation. The remuneration of senior management shall be deliberated by the Remuneration and Appraisal Committee and the Board of Directors. |
Basis for determination of remuneration of directors, supervisors and senior management | The annual remuneration of the Company's directors, supervisors and senior management shall be paid based on basic pay and performance appraisal results. |
Actual payment of remuneration of directors, supervisors and senior management | Paid. |
Total remuneration actually received by all directors, supervisors and senior management as of the end of the Reporting Period | During the Reporting Period, the Company's directors, supervisors and senior management actually received a total remuneration of RMB6.6640 million from the Company (including current and resigned supervisors and senior management during the Reporting Period). |
(IV) Changes in the Company's directors, supervisors and senior management
□ Applicable √ Not applicable
(V) Description of punishments by the CSRC in the past three years
□ Applicable √ Not applicable
(VI) Other
□ Applicable √ Not applicable
V. Meetings of the Board of Directors held during the Reporting Period
Session | Date | Resolution |
4th meeting of the third session of Board of Directors | January 12, 2022 | The meeting approved proposals including the Proposal on the Satisfaction of Conditions for Releasing the Sales Restrictions for the Third Release Period of the Restricted Shares Granted for the First Time and with Reserve under the 2018 Restricted Share Incentive Plan, the Proposal on the |
Use of Raised Funds to Replace Self-raised Funds Already Invested in Fundraising Projects, and the Proposal on Using Some Idle Raised Fund for Cash Management. For details, see the Announcement on Resolutions of the 4th Meeting of the Third Session of Board of Directors (No.: 2022-002) disclosed by the Company on the SSE website (http://www.sse.com.cn) and relevant media on January 13, 2022. | ||
5th meeting of the third session of Board of Directors | April 20, 2022 | The meeting approved proposals including the Company's Annual Report 2021 and its Summary, the Company's ESG Report 2021, and the Company's Plan for Profit Distribution and Capitalization of Capital Reserves for 2021. For details, see the Announcement on Resolutions of the 5th Meeting of the Third Session of Board of Directors (No.: 2022-014) disclosed by the Company on the SSE website (http://www.sse.com.cn) and relevant media on April 22, 2022. |
6th meeting of the third session of Board of Directors | July 8, 2022 | The meeting approved proposals including the Proposal on 2022 Restricted Share Incentive Plan of the Company (Draft) and Its Summary, and the Proposal on Formulating the Assessment Management Method for the 2022 Restricted Share Incentive Plan. For details, see the Announcement on Resolutions of the 6th Meeting of the Third Session of Board of Directors (No.: 2022-033) released on the SSE website on July 9, 2022 (http://www.sse.com.cn) and relevant media. |
7th meeting of the third session of Board of Directors | July 25, 2022 | The meeting approved the Proposal on the Granting of Restricted Shares to Incentive Recipients. For details, see the Announcement on Granting of Restricted Shares to Incentive Recipients (No.: 2022-044) released on the SSE website on July 26, 2022 (http://www.sse.com.cn) and relevant media. |
8th meeting of the third session of Board of Directors | August 24, 2022 | The meeting approved proposals including the Company's 2022 Semi-annual Report and its Summary and the 2022 Special Report on the Semi-annual Storage and Actual Use of Raised Fund. For details, see the Announcement on Resolutions of the 8th Meeting of the Third Session of Board of Directors (No.: 2022-045) disclosed by the Company on the SSE website (http://www.sse.com.cn) and relevant media on August 26, 2022. |
9th meeting of the third session of Board of Directors | October 27, 2022 | The meeting approved the Company's 2022 Third Quarter Report. For details, see the 2022 Third Quarter Report disclosed by the Company on the SSE website (http://www.sse.com.cn) and relevant media on October 28, 2022. |
VI. Performance of Duties by Directors(I) Directors attending meetings of the Board of Directors and general meetings of shareholders
Director name | Independent director or not | Attendance at meetings of the Board of Directors | Attendance at general meetings of shareholders | |||||
Number of meetings of the Board of Directors to be attended this year | Number of meetings of the Board of Directors attended in person | Number of meetings of the Board of Directors attended by communication | Number of meetings of the Board of Directors attended by proxy | Number of meetings of the Board of Directors absent from | Fail to attend two consecutive meetings of the Board of Directors or not | Number of general meetings of shareholders attended | ||
HOU Juncheng | No | 6 | 6 | 0 | 0 | 0 | No | 2 |
FANG Yuyou | No | 6 | 6 | 0 | 0 | 0 | No | 2 |
HOU Yameng | No | 6 | 6 | 0 | 0 | 0 | No | 2 |
MA Dongming | Yes | 6 | 6 | 6 | 0 | 0 | No | 2 |
GE Weijun | Yes | 6 | 6 | 6 | 0 | 0 | No | 2 |
Explanation on absence from two consecutive meetings of the Board of Directors
□ Applicable √ Not applicable
Number of meetings of the Board of Directors held during the year | 6 |
Including: number of on-site meetings | 0 |
Number of meetings held by communication | 0 |
Number of meetings held both on site and by communication | 6 |
(II) Circumstances where directors object to the Company's relevant matters
□ Applicable √ Not applicable
(III) Other
□ Applicable √ Not applicable
VII. Special Committees under the Board of Directors
√ Applicable □ Not applicable
(1). Members of special committees under the Board of Directors
Category of special committee | Name of member |
Audit Committee | HOU Yameng, MA Dongming, GE Weijun |
Nomination Committee | HOU Juncheng, MA Dongming, GE Weijun |
Remuneration and Appraisal Committee | FANG Yuyou, MA Dongming, GE Weijun |
Strategy Committee | HOU Juncheng, MA Dongming, GE Weijun |
(2). Four meetings held by the Audit Committee during the Reporting Period
Date | Description | Important comments and suggestions | Other performance of duties |
April 20, 2022 | The 3rd meeting of the third session of the Audit Committee was held to deliberate on and approve the Company's Annual Report 2021 and its Summary, the Company's 2022 Q1 Report, the Company's Annual Financial Final Report 2021, the Performance Report 2021 of the Audit Committee under the Company's Board of Directors, the Company's Internal Control Evaluation Report 2021, the 2021 Special Report on the Annual Storage and Actual Use of Raised Fund, the Company's Plan for Profit Distribution and Capitalization of Capital Reserves for 2021, the Proposal on Payment of Audit Fees for 2021 and Further Employment of the Accounting Firm for 2022, the Proposal on the Estimated Amount of Daily Related-party Transactions for 2022, the Proposal on the Accrual of Asset Impairment Provision for 2021, the Proposal on the Adjustment of the Conversion Price of "Proya Convertible Bond", and the Company's Annual Internal Audit Work Report 2021. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
July 8, 2022 | The 4th meeting of the third session of Audit Committee was held to deliberate on and approve the Proposal on 2022 Restricted Share Incentive Plan of the Company (Draft) and Its Summary. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
August 24, 2022 | The 5th meeting of the third session of Audit Committee was held to deliberate on and approve the Company's 2022 Semi-annual Report and its Summary, the 2022 Special Report on the Semi-annual Storage and Actual Use of Raised Fund, and the Proposal on the Adjustment of the Conversion Price of "Proya Convertible Bond". | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
October 27, 2022 | The 6th meeting of the third session of Audit Committee was held to deliberate on and approve the Company's 2022 Third Quarter Report. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
(3). Three meetings held by the Remuneration and Appraisal Committee during the ReportingPeriod
Date | Description | Important comments and suggestions | Other performance of duties |
January 12, 2022 | The 1st meeting of the third session of Remuneration and Appraisal Committee was held to deliberate on and approve the Proposal on the Satisfaction of Conditions for Releasing the Sales Restrictions for the Third Release Period of the Restricted Shares Granted for the First Time and with Reserve under the 2018 Restricted Share Incentive Plan. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
April 20, 2022 | The 2nd meeting of the third session of Remuneration and Appraisal Committee was held to deliberate on and approve the Proposal on Confirming the Remuneration of Directors for 2021 and the Proposal on Confirming the Remuneration of Senior Management for 2021. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
July 8, 2022 | The 3rd meeting of the third session of Remuneration and Appraisal Committee was held to deliberate on and approve the Proposal on 2022 Restricted Share Incentive Plan of the Company (Draft) and Its Summary, the Proposal on Formulating the Assessment Management Method for the 2022 Restricted Share Incentive Plan, and the Proposal on Verifying the List of Incentive Recipients for the 2022 Restricted Share Incentive Plan. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
(4). One meeting held by the Strategy Committee during the Reporting Period
Date | Description | Important comments and suggestions | Other performance of duties |
April 20, 2022 | The 2nd meeting of the third session of Strategy Committee was held to deliberate on and approve the Proposal on the Company's Strategic Business Plan 2022. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
(5). Dissenting matters
□ Applicable √ Not applicable
VIII. Explanation on the Company's Risks Identified by the Board of Supervisors
□ Applicable √ Not applicable
The Board of Supervisors had no objection to matters supervised during the Reporting Period.
IX. Employees of the Parent Company and Major Subsidiaries as of the End of the Reporting
Period(I) Employees
Number of current employees of the parent company | 1,129 |
Number of current employees of major subsidiaries | 2,048 |
Total number of employees | 3,177 |
Number of retired employees to be supported by the parent company and major subsidiaries | 4 |
Specialty composition | |
Category | Number of employees |
Production workers | 276 |
Sales specialists | 2,370 |
Management | 302 |
R&D personnel | 229 |
Total | 3,177 |
Educational background | |
Education level | Number (persons) |
Bachelor and above | 1,217 |
Associate | 724 |
High school and below | 1,236 |
Total | 3,177 |
(II) Remuneration policy
√ Applicable □ Not applicable
Value creation is the Company's basis for salary distribution. Performance is an intuitive reflection ofvalue. By establishing a comprehensive and objective performance evaluation system, the Companycombines salary distribution and performance evaluation of employees with an aim to fully guide andmotivate employees to create value.
(III) Training program
√ Applicable □ Not applicable
The Company adheres to the goal of gathering and training outstanding professionals by alwaysconsidering staff learning and growth as a primary task, and continuously innovating in and optimizingtraining research, training topics, training forms, training implementation, training evaluation andimprovement, and trainer management. In terms of the form of learning, the Company combines internaland external learning and fully improves the engagement of employees in training, thus making thetraining more effective.
(IV) Labor outsourcing
√ Applicable □ Not applicable
Total man-hours for labor outsourcing | |
Total remuneration paid for labor outsourcing | RMB53,644,979.66 |
1. Huzhou Branch and Zhejiang Beutesigned the Service Project Contracting Agreement with Jiangxi PujiLabor Service Co., Ltd. to outsource auxiliary services including canteen, greening, cleaning, and goodshandling, loading and unloading, and packaging to the latter and pay consideration for the agreedquantities.
2. Huzhou Branch signed the Service Project Contracting Agreement with Yancheng Dafeng XinxinyuanEnterprise Management Co., Ltd. to outsource services such as partial goods handling, loading andunloading, combined packaging, and mask folding to the latter, and pay consideration for the agreedquantities.
X. Profit Distribution or Capital Reserve Conversion Plan(I) Development, implementation or adjustment of the cash dividend distribution policy
√ Applicable □ Not applicable
The Company held the 16th meeting of the second session of Board of Directors and the 3rd extraordinaryGeneral Meeting of Shareholders on October 12, 2020 and October 28, 2020 respectively and approvedthe Proposal on the Company's Planning for Dividends to Shareholders for the Next Three Years (2020-2022), as detailed below:
I. Factors considered in developing the planning for dividend distribution to shareholdersTo promote the long-term and sustainable development, based on a comprehensive analysis of thecorporate development strategy, shareholder requirements and expectations, social capital costs, andexternal financing environment, the Company has solicited and listened to the requirements andexpectations of shareholders, especially small and medium shareholders, fully considered the Company'scurrent and future profitability, cash flow, development stage, project investment capital needs, and bankcredit, balanced the short-term and long-term interests of shareholders, and made institutional
arrangements for profit distribution, so as to establish a sustainable and stable mechanism for dividenddistribution to investors to ensure the continuity and stability of the Company's profit distribution policy.II. Principles for planning for dividend distribution to shareholdersThe Company implements a continuous and stable profit distribution policy, attaches importance toreasonable investment returns to investors while considering sustainable development, and has establisheda continuous and stable mechanism for returns to investors in combination with the Company'sprofitability and actual needs for the future development strategy. The Company shall make a profitdistribution plan in accordance with the Articles of Association. The Company's Board of Directors, Boardof Supervisors and General Meeting of Shareholders shall fully consider the opinions of independentdirectors, supervisors and public investors in deciding and demonstrating the profit distribution policy.III. Planning for dividend distribution to shareholders (2020-2022)
1. The Company shall implement a continuous and stable profit distribution policy, and considerreasonable investment returns to investors as well as the Company's actual operating conditions andsustainable development for the current year in profit distribution.
2. The Company may distribute profits in the form of cash or shares or both, or other methods permittedby laws and regulations. The distribution shall not exceed the accumulated distributable profits, and shallnot undermine the Company's ability to continue as a going concern. When eligible for cash dividends,the Company shall distribute profits first in cash.When eligible for cash dividends under the Company's Articles of Association, the Company shall, inprinciple, distribute profits in cash on a yearly basis. The Company's Board of Directors may propose thatthe Company should distribute interim cash dividends according to the Company's profitability and capitalneeds. The Company shall maintain the continuity and stability of the profit distribution policy, anddistribute every year at least 20% of the distributable profits achieved for the current year. The Company'sBoard of Directors shall propose a differentiated cash dividend policy in line with the procedure under theCompany's Articles of Association after a comprehensive analysis of factors such as industrycharacteristics, development stage, its own business mode, profitability, and major spending arrangements.
3. Adjustment of the profit distribution plan and related decision-making mechanism
(1) The Company shall evaluate the implemented plan for dividend distribution to shareholders once everythree years. According to applicable laws and regulations, the Company's operating conditions, and theopinions of shareholders (especially small and medium investors) and independent directors, the Companymay modify its current profit distribution policy when necessary and make a new plan for dividenddistribution to shareholders. Upon adjustment, the plan for dividend distribution to shareholders shall beapproved by voting at the General Meeting of Shareholders.
(2) The Company's Board of Directors shall make an appropriate annual distribution plan or an interimprofit distribution plan as necessary for development after fully considering the Company's profitability,cash flow, development capital needs, financing costs, and the external financing environment, andimplement them upon the approval by the Company's General Meeting of Shareholders.During the Reporting Period, the Company approved the 2021 annual profit distribution plan at the 2021Annual General Meeting of Shareholders, whereby distributing a cash dividend of RMB8.60 (tax inclusive)for each 10 shares to all shareholders registered as of the record date on the basis of the total share capitalas of the record date for dividend distribution for a total of RMB172,868,570.76 (tax inclusive). The saiddividend distribution was completed on May 30, 2022.
(II) Special description of the cash dividend policy
√ Applicable □ Not applicable
Is the cash dividend policy acceptable under the Company's Articles of Association or as required by resolutions at the General Meeting of Shareholders? | √Yes □No |
Are dividend distribution standard and ratio clearly defined? | √Yes □No |
Are decision-making procedures and mechanisms complete? | √Yes □No |
Do independent directors fulfill their duties and play their roles diligently? | √Yes □No |
Do minority shareholders have the opportunity to fully express their opinions and demands, and are their legitimate rights and interests fully protected? | √Yes □No |
(III) Where the Company made profits and the parent company could provide positive profits
available to shareholders for distribution but did not propose a cash profit distribution planduring the Reporting Period, the Company shall disclose the reasons in details and the purposeand use of undistributed profits.
□ Applicable √ Not applicable
(IV) Profit distribution and capitalization of capital reserves during the Reporting Period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Number of bonus shares distributed per 10 shares (shares) | 0 |
Dividends per 10 shares (RMB) (tax included) | 8.70 |
Conversions per 10 shares (shares) | 4 |
Amount of cash dividends (tax included) | 246,661,938.03 |
Net profit attributable to ordinary shareholders of the Company in the annual consolidated statement of dividends | 817,400,223.93 |
Proportion in the net profit attributable to ordinary shareholders of the Company in the consolidated statement (%) | 30.18 |
Amount of shares repurchased in cash included in cash dividends | 0.00 |
Total dividend amount (tax included) | 246,661,938.03 |
Proportion of the dividend amount in the net profit attributable to ordinary shareholders of the Company in the consolidated statement (%) | 30.18 |
XI. The Company's Equity Incentive Plans, Employee Stock Ownership Plans or Other Employee
Incentives and Their Impact(I) Relevant incentive matters disclosed in the temporary announcement and with no progress
or changes in subsequent implementation
√ Applicable □ Not applicable
Matter | Reference |
Announcement on the Satisfaction of Conditions for Releasing the Sales Restrictions for the Third | SSE website, Shanghai Securities News, Securities Times on January 13, 2022 |
Release Period of the Restricted Shares Granted for the First Time and with Reserve under the 2018 Restricted Share Incentive Plan and Listing | |
Announcement on 2022 Restricted Share Incentive Plan of the Company (Draft) and Its Summary | SSE website, Shanghai Securities News, Securities Times on July 9, 2022 |
Announcement on the Granting of Restricted Shares to Incentive Recipients | SSE website, Shanghai Securities News, Securities Times on July 26, 2022 |
Announcement on the Granting Result of the 2022 Restricted Stock Incentive Plan | SSE website, Shanghai Securities News, Securities Times on September 8, 2022 |
(II) Incentives not disclosed in the interim announcement or with subsequent progressEquity incentives
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
Employee stock ownership plans
□ Applicable √ Not applicable
Other incentives
□ Applicable √ Not applicable
(III) Equity incentives granted to directors and senior management during the Reporting Period
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: share
Name | Position | Number of restricted shares held at the beginning of the year | Number of newly granted restricted shares during the Reporting Period | Price of restricted shares granted (RMB) | Unlocked shares | Locked shares | Number of restricted shares held at the end of the Reporting Period | Market price as of the end of the Reporting Period (RMB) |
JIN Yanhua | Deputy General Manager | 54,981 | 140,000 | 78.56 | 76,973 | 140,000 | 216,973 | 36,338,638.04 |
WANG | Deputy | 32,322 | 180,000 | 78.56 | 45,25 | 180,000 | 225,251 | 37,725,037.4 |
Li | General Manager, Secretary of the Board of Directors, CFO | 1 | 8 | |||||
Total | / | 87,303 | 320,000 | / | 122,224 | 320,000 | 442,224 | / |
Note: The Company implemented the 2021 Equity Distribution Plan on May 30, 2022, in which theCompany distributed to all shareholders a cash dividend of RMB8.60 (tax inclusive) per 10 shares basedon the total share capital as of the record date on which equity distribution is implemented and issued 4shares for every 10 shares to all shareholders through capitalization of the capital reserve. The "unlockedshares" and "number of restricted shares held at the end of the period" mentioned in the table above includethe shared converted through the capitalization of the capital reserve in 2021.(IV) Evaluation mechanism for senior management as well as the establishment and
implementation of the incentive mechanism during the Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company's General Manager and other senior management wereevaluated based on performance indicators and their annual performance remuneration was submitted bythe Remuneration and Appraisal Committee to the Board of Directors for deliberation.
XII. Construction and Implementation of the Internal Control System during the Reporting Period
√ Applicable □ Not applicable
The Company has developed relevant systems including the Internal Audit System, the ExternalGuarantee Decision-making Management System, the Related-party Transaction Management System,the Raised Funds Management System, and the Information Disclosure Management System, andestablished processes for company establishment/investment/change applications, entrusted wealthmanagement application, and guarantee application. The Company continuously improves the internalcontrol system and related processes, regulates the implementation of the internal control system,strengthens the supervision and inspection of internal control, and promotes the healthy and sustainabledevelopment of the Company.
Description on Material deficiencies in internal control during the Reporting Period
□ Applicable √ Not applicable
XIII. Management and Control of Subsidiaries during the Reporting Period
√ Applicable □ Not applicable
The Company has developed systems including the External Investment and Operation Decision-makingSystem and the Subsidiary Management System to implement centralized control over subsidiaries. TheCompany HQ is responsible for its finance, asset operation and overall strategic planning while allsubsidiaries develop their strategic plans based on the Company's overall strategic planning.
XIV. Description of the Internal Control Audit Report
√ Applicable □ Not applicable
During the Reporting Period, Pan-China Certified Public Accountants (Special General Partnership), theCompany's internal control auditing firm, issued the Internal Control Audit Report (Tian Jian Shen [2023]No.3129), in which opinion the Company had maintained effective internal control over financialreporting in all material aspects as of December 31, 2022 pursuant to the Basic Rules for Internal Controland other applicable provisions.Whether to disclose the internal control audit report: YesType of opinion in the internal control audit report: standard unqualified opinion
XV. Correction of Problems Identified in the Special Campaign for Governance of Listed
CompaniesNone
XVI. Other
□ Applicable √ Not applicable
Section V Environmental and Social ResponsibilityI. Environmental Information
Whether to establish the environmental protection mechanism | Yes |
Investment in environmental protection during the Reporting Period (Unit: RMB’0,000) | 344.54 |
(I) Environmental issues of the Company and major subsidiaries included in the list of primarypollutant discharge entities announced by the environmental authority
□ Applicable √ Not applicable
(II) Environmental issues of the Company not included in the list of primary pollutant discharge
entities
√ Applicable □ Not applicable
1. Administrative penalties due to environmental issues
□ Applicable √ Not applicable
2. Disclosure of other environmental information with reference to primary pollutant discharge
entities
√ Applicable □ Not applicable
During the Reporting Period, the Company passed the ISO14001:2015 Environmental ManagementSystem certification (valid until February 14, 2025). The emission of greenhouse gases and discharge ofindustrial wastewater, air emissions, and residues mainly occur from product production.The wastewater produced by the Company mainly comes from domestic sewage and productionwastewater and is discharged to landscape water pools or to the outside through a consolidated water pipeafter being treated by the sewage treatment station. The air emissions produced mainly comes from boilers.The Company has formulated the Sewage Treatment Management System, the Boiler Management System,
and other management documents to strictly control the discharge of wastewater and air emissions. Duringthe Reporting Period, the Company discharged wastewater and air emissions up to standards.Main administrative measures taken during the Reporting Period include:
(1) Wastewater:
The Company installed the Multi Vision COD online automatic monitoring instrument, and monitored theCOD in treated water 24 hours a day to ensure class-A sewage discharge; constructed a sewage treatmentsystem to make sure treated sewage is highly purified and recycled; renovated environmental protectiontechnologies in the production park:
① Underground pipeline CCTV detection system: Consisting of crawlers, lenses, cable reels, and acontrol system, the underground pipeline CCTV detection system is used to clear the blockage in thepipeline inside the park and maintain and repair the pipeline network, so as to prevent the risk of sewageleakage due to outdated pipeline and provide reliable technological support for zero sewage discharge;
② Perform technological transformation on the anaerobic tower of the sewage treatment station toimprove the biological anaerobic effect;
③ Increase the capacity and efficiency of the air flotation tank of the sewage treatment station to 10 tons;improve the capability of treating gas explosion of sewage in the air flotation tank, and enhance the cleanwater treatment capacity on the original basis.
(2) Air emissions:
① Huzhou production base (skincare factory): A air emissions treatment facility for the cream productionline was added to reduce the emission of dust and organic air emissions. After being use, the facility cancollect 99% dust and remove 75% organic air emissions. A highly-precise volatile organic chemical (VOC)gas collection device was installed to effectively reduce unorganized gas emission;
② Huzhou production base (make-up factory): A Swiss-made VOC gas and dust treatment facility wasadded.
(3) The Company properly disposes of solid waste generated in production and operations. The Companymanages solid wastes in a macroscopical manner and our factories can track the whole process data onsolid wastes and prevent risks by requesting to report the amount of generated hazardous waste on theNational Information System Platform for the Management of Solid Wastes and Chemicals every year,selecting hazardous waste treatment service providers through open bidding on the platform, andrequesting for the treatment of hazardous wastes on the platform.
3. Reasons for non-disclosure of other environmental information
□ Applicable √ Not applicable
(III) The Company's performance in helping protect the environment, prevent pollution and fulfill
environmental responsibilities
√ Applicable □ Not applicable
The emission of greenhouse gases and discharge of industrial wastewater, air emissions, and residuesmainly occur from product production. Moreover, the consumption of energy, raw materials, and otherresources principally occurs when products are made. Therefore, sustainable production can improve theusage efficiency of resources and energy in production processes, reduce pollutants and greenhouse gasemissions, and build a resource-saving and eco-friendly production system.During the Reporting Period, the Company carried out a new round of audits on cleaner production in theHuzhou Production Base (skincare factory). We investigated the current situation of pollutant emissions,
energy management, and environmental protection, and also developed several cleaner productionimplementation programs according to the investigation results.During the Reporting Period, the Huzhou Production Base (skincare factory) planned and implemented14 cleaner production programs, thus achieving the following outcomes:
(1) Reduced waste water discharge by 4,400 tons;
(2) Reduced COD emission by 0.17 tons and ammonia nitrogen emission by 0.001 tons;
(3) Reduced the generation of hazardous waste by 3 tons;
(4) Reduced carbon dioxide emissions by 322.73 tons;
(5) Saved electricity by 565.9 MWh;
(6) Saved raw materials worth RMB108 thousand;
(7) Saved natural gas by 3,000 Nm?;
(8) Saved water by 4,600 m?.
(IV) Measures taken to reduce carbon emissions during the Reporting Period and their effects
Whether to take carbon emission reduction measures | Yes |
Carbon dioxide emission equivalent reduced (unit: ton) | 4,255 |
Type of carbon emission reduction measures (such as electricity generation with clean energy, carbon reduction technologies used in production, or the development and production of new products that help reduce carbon emissions) | 1. Procurement of raw materials: Explain carbon reduction policies to suppliers, cooperate with them to reduce carbon emissions in the stage of procurement, and prioritize suppliers with low carbon emissions. 2. Production: (1) Regularly collect carbon emissions data, invite professional third parties to conduct data audits, and make improvements to correct deviations inside the Company; (2) Carry out energy-saving and technology upgrade projects to improve energy efficiency; (3) Carry out clean energy replacement and increase the proportion of clean energy use through photovoltaic power generation and the purchase of green electricity. 3. Product packaging: Carry out green packaging projects to reduce carbon emissions after packaging disposal through packaging usage reduction, packaging recycling, and other methods. 4. Transportation and logistics: Optimize the warehousing and logistics system to reduce energy consumption in the process of warehousing and logistics by rationally arranging warehouses and planning transportation routes. 5. Product usage and disposal: Publicize the concept of sustainable consumption to consumers to provide them with more sustainable choices. |
Specific description
□ Applicable √ Not applicable
II. Social Responsibility(I) Whether to independently disclose social responsibility reports, sustainable developmentreports, or ESG reports
√ Applicable □ Not applicable
For details, see the Proya Sustainable Development & Environmental, Social, and Governance (ESG)Report 2022 disclosed by the Company on the SSE website (www.sse.com.cn) disclosed on the same day.
(II) Description of social responsibilities
√ Applicable □ Not applicable
External donation and charity projects | Quantity/content | Description |
Total investment (RMB’0,000) | 143.46 | Include funds and materials donated by the Company to various community philanthropy and charitable activities |
Including: fund (RMB’0,000) | 140.00 | 1. The Company donated RMB1 million to Shanghai Adream Foundation for the "One County, One Dream" charity project. 2. The Company once again paired with Liwu Village, Jiulong County, Ganzi Prefecture, Sichuan Province, and donated RMB100,000 to village school so they could buy stationery and books; 3. The Company donated RMB300 thousand to the charity project jointly operated by the Wuxing District Charity Federation of Huzhou and Proya. |
Cash value of materials (RMB’0,000) | 3.46 | The Company donated anti-epidemic supplies to Dongyue Community, Xihu District, Hangzhou |
Number of beneficiaries (person) | 9,087 |
Specific description
□ Applicable √ Not applicable
III. Poverty Alleviation and Rural Revitalization Progress
√ Applicable □ Not applicable
Poverty alleviation and rural revitalization project | Quantity/content | Description |
Total investment (RMB’0,000) | 110 | 1. The Company donated RMB1 million to Shanghai Adream Foundation for the "One County, One Dream" charity project. 2. The Company once again paired with |
Liwu Village, Jiulong County, Ganzi Prefecture, Sichuan Province, and donated RMB100,000 to village school so they could buy stationery and books; | ||
Including: fund (RMB’0,000) | 110 | |
Cash value of materials (RMB’0,000) | 0 | |
Number of beneficiaries (person) | 8,085 | |
Form of support (such as industrial support, employment support, education support, etc.) | Education support |
Specific description
□ Applicable √ Not applicable
Section VI Important Matters
I. Fulfillment of Commitments(I) Commitments made by the Company's actual controllers, shareholders, related parties, acquirers and the Company and other relevant parties during
the Reporting Period or continuing to the Reporting Period
√ Applicable □ Not applicable
Background | Type | Promisor | Description | Date and duration | Any deadline for performance | Whether the commitment is timely and strictly performed | Cause for any failure to perform in time | The next step in the event of failure to perform in time |
IPO-related commitments | Restrictions on sales | Directors, senior management HOU Juncheng, FANG Yuyou and CAO Liangguo | (1) During their terms as the Company's director/senior management, they shall not transfer more than 25% of their total shares directly or indirectly held in the Company each year. Within six months after leaving office, they shall not transfer their shares directly or indirectly held in the Company. (2) If their shares in the Company are sold within two years upon expiration of the lock-up period, the selling price shall not be lower than the offering price. If the closing price of the Company's shares is lower than the offering price for 20 consecutive trading days within 6 months after the Company's IPO, or the closing price as of the end of the 6-month period after the Company's IPO is lower than | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
the offering price, the lock-up period for their shares in the Company will be automatically extended for 6 months. Their commitments above shall survive job change and resignation. (3) Should any of them/their partnership violate the said share lock-up commitments, the lock-up period for their/their partnership's shares in the Company will be automatically extended for 6 months. | |||||||
Restrictions on sales | Senior management JIN Yanhua | (1) Within 12 months from the date of the Company's IPO, they shall not transfer or authorize any other to manage their shares directly or indirectly held in the Company or have the Company repurchase such shares. (2) During their terms as the Company's senior management, they shall not transfer more than 25% of their total shares directly or indirectly held in the Company each year. Within six months after leaving office, they shall not transfer their shares directly or indirectly held in the Company. (3) If their shares in the Company are sold within two years upon expiration of the lock-up period, the selling price shall not be lower than the offering price. If the closing price of the Company's shares is lower than the offering price for 20 consecutive trading days within 6 months after the Company's IPO, or the closing price as of the end of the 6-month period after the | Date: April 16, 2018 Duration: April 16, 2018 to long-term | No | Yes | Not applicable | Not applicable |
Company's IPO is lower than the offering price, the lock-up period for their shares in the Company will be automatically extended for 6 months. Their commitments above shall survive job change and resignation. (4) Should any of them/their partnership violate the said share lock-up commitments, the lock-up period for their/their partnership's shares in the Company will be automatically extended for 6 months. | |||||||
Restrictions on sales | Senior management WANG Li | (1) Within 12 months from the date of the Company's IPO, they shall not transfer or authorize any other to manage their shares directly or indirectly held in the Company or have the Company repurchase such shares. (2) During their terms as the Company's senior management, they shall not transfer more than 25% of their total shares directly or indirectly held in the Company each year. Within six months after leaving office, they shall not transfer their shares directly or indirectly held in the Company. (3) If their shares in the Company are sold within two years upon expiration of the lock-up period, the selling price shall not be lower than the offering price. If the closing price of the Company's shares is lower than the offering price for 20 consecutive trading days within 6 months after the Company's IPO, or the closing price as of | Date: September 3, 2018 Duration: September 3, 2018 to long-term | No | Yes | Not applicable | Not applicable |
the end of the 6-month period after the Company's IPO is lower than the offering price, the lock-up period for their shares in the Company will be automatically extended for 6 months. Their commitments above shall survive job change and resignation. (4) Should any of them/their partnership violate the said share lock-up commitments, the lock-up period for their/their partnership's shares in the Company will be automatically extended for 6 months. | |||||||
Restrictions on sales | Controlling shareholder and actual controller HOU Juncheng and FANG Aiqin | (1) Within 24 months upon expiration of the lock-up period, they shall not directly or indirectly reduce their shares in the Issuer by more than 6% of the total number of shares of the Issuer before such IPO. (2) They must sell shares in the Company through methods including but not limited to collective trading through bidding, block trading, and transfer by agreement and transfer by agreement in line with applicable laws, regulations and rules. (3) Before selling the Company's shares, they shall announce the same three trading days in advance, discharge the obligation to disclose information in a timely and accurate manner as per the rules of the securities exchange, except to the extent that their shares in the Company are less than 5%. (4) Should they fail to perform the said intent of share reduction, they | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
must explain the cause for failing to do so in the Company's General Meeting of Shareholders and the media designated by the CSRC and publicly apologize to the Company's shareholders and public investors. | |||||||
Restrictions on sales | Shareholders FANG Yuyou and LI Xiaolin directly holding more than 5% shares in the Company | (1) If they intend to reduce shares after the lock-up period expires, they will prudently make a share reduction plan as necessary for the Company to stabilize the share price and conduct operations and capital operations as required by the CSRC and the exchange on shareholders for share reduction, whereby reducing shares gradually upon expiration of the lock-up period. (2) They must sell shares in the Company with methods including but not limited to collective trading through bidding, block trading, and transfer by agreement in line with applicable laws, regulations and rules. (3) Before selling the Company's shares, they shall announce the same three trading days in advance, discharge the obligation to disclose information in a timely and accurate manner as per the rules of the securities exchange except to the extent that their shares in the Company are less than 5%. (4) Should they fail to perform the said intent of share reduction, they must explain the cause for failing to do so in the Company's General Meeting of Shareholders and the | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
media designated by the CSRC and publicly apologize to the Company's shareholders and public investors. | |||||||
Other | The Company | When the preconditions for enabling the share price stabilization plan are met, if the Company fails to take specific measures to stabilize the share price, the Company must explain the cause for failing to do so in the Company's General Meeting of Shareholders and the media designated by the CSRC and publicly apologize to the Company's shareholders and public investors. In the event of losses to investors not as a result of force majeure, the Company will be liable for compensation to investors by law, and be liable otherwise as required by laws, regulations and competent regulators; if the losses are caused due to force majeure, the Company shall work out a plan in the shortest possible time to minimize losses to investors and submit it to the General Meeting of Shareholders for deliberation, so as to protect the interests of the Company's investors as much as possible. Within three years from the date of the Company's IPO, if the Company appoints new directors and senior management, the Company will require such new directors and senior management to fulfill the commitments made by the directors and | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
senior management at the time of the Company's IPO. | |||||||
Other | The Company's controlling shareholders and actual controllers | When the preconditions for enabling the share price stabilization plan are met, if failing to take specific measures to stabilize the share price, they must explain the cause for failing to do so at the Issuer's General Meeting of Shareholders and the media designated by the CSRC and publicly apologize to the Issuer's shareholders and public investors. Where the commitment is not fulfilled, they will not receive shareholder dividends from the Issuer within 5 working days from the date when the said incident occurs, and they will not be able to transfer their shares until they take measures to stabilize the share price as per the said plan and achieve results. | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
Other | The Company's directors (excluding independent directors) and senior management | When the preconditions for enabling the share price stabilization plan are met, if failing to take specific measures to stabilize the share price as per the plan to stabilize the share price, they must explain the cause for failing to do so at the Issuer's General Meeting of Shareholders and the media designated by the CSRC and publicly apologize to the Issuer's shareholders and public investors. Where the commitment is not fulfilled, they will not receive remuneration and shareholder dividends (if any) from the Issuer within 5 | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
working days from the date when the said incident occurs, and they will not be able to transfer their shares until they take measures to stabilize the share price as per the said plan and achieve results. | |||||||
Other | The Company | If the Company's prospectus contains false records, misleading statements or major omissions, which causes investors to suffer losses in securities transactions, the Company will compensate investors for such losses by law. After the illegal facts mentioned above are identified by the CSRC or the stock exchange or the judicial authority where the Company is located, the Company will actively compensate investors for direct economic losses incurred therefrom by settling with investors with respect to measurable economic losses directly incurred to investors, mediating with investors through a third party and establishing an investor compensation fund based on the principles of procedure simplification, active negotiation, compensation in advance, and effective protection of investors' interests, especially small and medium investors. If found to have violated the said commitments, the Company will publicly apologize to shareholders and public investors for failing to perform the said compensation measures at the General | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
Meeting of Shareholders and the media designated by the CSRC and compensate investors for the actual losses identified by the CSRC and the judicial authority. | |||||||
Other | The Issuer's controlling shareholders and actual controllers | If the Issuer's prospectus contains false records, misleading statements or major omissions, which causes investors to suffer losses in securities transactions, they will compensate investors for such losses by law. After the illegal facts mentioned above are identified by the CSRC or the stock exchange or the judicial authority where the Company is located, the Company will actively compensate investors for direct economic losses incurred therefrom by settling with investors with respect to measurable economic losses directly incurred to investors, mediating with investors through a third party and establishing an investor compensation fund based on the principles of procedure simplification, active negotiation, compensation in advance, and effective protection of investors' interests, especially small and medium investors. If found to have violated the said commitments, the Company's controlling shareholders and actual controllers will publicly apologize to the Issuer's shareholders and public investors for failing to perform the said compensation measures at the | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
Issuer's General Meeting of Shareholders and the media designated by the CSRC and will not receive shareholder dividends from the Issuer within 5 working days from the date when the said commitments are violated, and their shares in the Issuer will not be transferred until they take compensation measures as per the said commitments and achieve results. | |||||||
Other | Directors, supervisors and senior management | If the Issuer's prospectus contains false records, misleading statements or major omissions, which causes investors to suffer losses in securities transactions, they will compensate investors for such losses by law. After the illegal facts mentioned above are identified by the CSRC or the stock exchange or the judicial authority where the Company is located, the Company will actively compensate investors for direct economic losses incurred therefrom by settling with investors with respect to measurable economic losses directly incurred to investors, mediating with investors through a third party and establishing an investor compensation fund based on the principles of procedure simplification, active negotiation, compensation in advance, and effective protection of investors' interests, especially small and medium investors. If found to have violated the said commitments, the Company's | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
directors, supervisors and senior management will publicly apologize to the Issuer's shareholders and public investors for failing to perform the said compensation measures at the Issuer's General Meeting of Shareholders and the media designated by the CSRC and will not receive remuneration (or allowances) and shareholder dividends (if any) from the Issuer within 5 working days from the date when the said commitments are violated, and their shares in the Issuer will not be transferred until they take compensation measures as per the said commitments and achieve results. | |||||||
Other | The Company | In order to ensure the effective use of the proceeds from the IPO, effectively prevent the risk of diluting immediate returns and improve future returns, the Company intends to take measures including tightening operation management and internal control, accelerating the progress of fundraising projects, and strengthening the investor return mechanism, so as to improve asset quality, increase operation revenue, raise future earnings, and achieve sustainable development to fill the diluted immediate returns. The Company promises to continuously improve various measures to fill the diluted spot returns in accordance with the implementation rules issued by the CSRC and Shanghai Stock | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
Exchange. If found to have violated the said commitments, the Company will promptly announce the facts and cause of such violation, except for force majeure or other reasons not attributable to the Company, apologize to the Company's shareholders and public investors, make supplementary commitments or substitute commitments to investors to protect the interests of investors as much as possible, and implement such supplementary commitments or substitute commitments subject to the approval by the Company's General Meeting of Shareholders. | |||||||
Other | Controlling shareholder and actual controller HOU Juncheng and FANG Aiqin | In order to ensure that the Company's measures to fill the diluted immediate returns can be effectively performed, they, as the Company's controlling shareholder and actual controller, promise that: (1) Under no circumstances will they abuse the position as the controlling shareholder and actual controller by ultra vires interfering with the Company's operation and management activities or encroaching on the Company's interests; (2) After the CSRC and Shanghai Stock Exchange have otherwise released opinions and implementation rules on measures to fill the diluted immediate returns and relevant commitments, if the Company's relevant provisions and their commitments | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
contradict such rules, they will immediately make supplementary commitments in line with such rules of the CSRC and Shanghai Stock Exchange, and actively promote the Company to issue new commitments or measures up to the requirements of the CSRC and Shanghai Stock Exchange; (3) They will fully, completely and timely perform the Company's measures to fill the diluted immediate returns and their commitments regarding the measures to fill the diluted immediate returns. If found to have violated such commitments, which causes losses to the Company or shareholders, they are willing to: ① state the cause and apologize at the General Meeting of Shareholders and the media designated by the CSRC; ② be liable for compensation to the Company and/or shareholders by law; ③ unconditionally accept the penalties or regulatory measures taken by the CSRC and/or Shanghai Stock Exchange and other securities regulators as per their current rules. The said measures to fill the diluted immediate returns shall not be deemed to constitute a guarantee for the Company's future profits. | |||||||
Other | Directors, senior management | In order to ensure that the Company's measures to fill the diluted immediate returns can be effectively performed, they, as the | Date: November 15, 2017 | No | Yes | Not applicable | Not applicable |
Company's directors and senior management, promise that: (1) They will not offer benefits to other entities or individuals for free or on unfair terms, or otherwise harm the Company's interests; (2) They will strictly follow the Company's budget management by limiting their duty-related consumption to the extent required, subject to the Company's supervision, and free from waste or extravagance; (3) They will not use the Company's assets to engage in investment and consumption activities unrelated to their duties; (4) They will actively promote the improvement of the Company's compensation system to better meet the requirements for filling the diluted immediate returns; support the Company's Board of Directors or Remuneration Committee to link the development, revision, and supplementation of the Company's compensation system with the implementation of the measures to fill the diluted immediate returns; promise that the vesting conditions for the Company's equity incentives will be linked to the implementation of the Company's measures to fill the diluted immediate returns; (5) After the CSRC and Shanghai Stock Exchange have otherwise released the opinions and implementation rules on the measures to fill the diluted | Duration: November 15, 2017 to long-term |
Avoiding horizontal competition | Controlling shareholder and actual controller HOU Juncheng and FANG Aiqin | 1. They do not and will not directly or indirectly engage in any activities constituting horizontal competition with the existing and future businesses of the Company and its holding subsidiaries, including but not limited to the R&D, production and sale of any products same as or similar to those of the Company and its holding subsidiaries. They shall be liable for the economic losses to the Company caused by violation of the above commitments. 2. For the enterprises under their control, They will perform their obligations under such commitments by assigning agencies and personnel (including but not limited to directors and managers), and They shall be liable for the economic losses to the Company caused by violation of the above commitments. 3. From the date of signing this letter of commitment, if the Company further expands its product and business scope, the enterprises under their control shall not compete with the Company within the expanded product or business scope, or will, in case of any possible competition with the Company within the expanded product or business scope, withdraw from the competition by: (1) stopping the production of competing or potentially competing products; (2) stopping the operation of competing or | Date: November 15, 2017 Duration: November 15, 2017 to long-term | No | Yes | Not applicable | Not applicable |
potentially competing business; (3) transferring the competing business to the Company; or (4) transferring the competing business to an unrelated third party. 4. Their shareholding companies, including Hangzhou Huazhuang Industrial Investment Co., Ltd., Huzhou Mogan Wangshu Cosmetics Industry Phase I Venture Capital Partnership (Limited Partnership), and companies that they invest in, engage in no cosmetics business or related upstream and downstream business. If they engage in such businesses in the future, They commit that they will withdraw their investment in those business through equity transfer and other means, and that the Company will be given priority to invest in the said enterprises according to legal provisions and the consent of other shareholders of those enterprises. | ||||||||
Commitments on refinancing | Other | Controlling shareholder and actual controller HOU Juncheng and FANG Aiqin | Commitments on the effective fulfillment of the Company's measures to fill the diluted immediate returns: 1. Under no circumstances will they interfere with the Company's operation and management activities or encroach on the company's interests by ultra vires; 2. From the date of the issuance of these commitments to the date of the Company's public issuance of A-share convertible corporate bonds, if the CSRC releases new | Date: April 21, 2021 Duration: April 21, 2021 to long-term | No | Yes | Not applicable | Not applicable |
regulatory rules on the measures to fill the diluted immediate returns and relevant commitments and the above-mentioned commitments can no longer satisfy the new regulatory rules, they will make supplementary commitments in line with the latest rules of the CSRC; 3. They will practically fulfill the Company's measures for filling the diluted immediate returns and their commitments regarding the measures to fill the diluted immediate returns. Where they violate those commitments, causing losses to the Company or investors, they will assume the compensation liability to the Company or investors according to law. As one of the parties responsible for the measures to fill the immediate returns, should they violate or refuse to fulfill the above commitments, they shall be subject to the punishment or relevant regulatory measures imposed on them by the securities regulatory authorities such as the CSRC and the SSE in accordance with the relevant regulations and rules. | |||||||
Other | Directors, senior management | Commitments on the effective fulfillment of the Company's measures to fill the diluted immediate returns: 1. They will not offer benefits to other entities or individuals for free or on unfair terms, or otherwise harm the Company's interests; 2. They will limit their | Date: April 21, 2021 Duration: April 21, | No | Yes | Not applicable | Not applicable |
duty-related consumption; 3. They will not use the Company's assets to engage in investment and consumption activities unrelated to their duties; 4. The compensation system developed by the Board of Directors and the Remuneration and Appraisal Committee will be linked to the implementation of the measures for filling the diluted immediate returns; 5. If the Company issues equity incentives in the future, the vesting conditions for the Company's equity incentives will be linked to the implementation of the Company's measures to fill the diluted immediate returns; 6. From the date of the issuance of these commitments to the date of the Company's public issuance of A-share convertible corporate bonds, if the CSRC releases new regulatory rules on the measures to fill the diluted immediate returns and relevant commitments and the above-mentioned commitments can no longer satisfy the new regulatory rules, they will make supplementary commitments in line with the latest rules of the CSRC. As one of the parties responsible for the measures to fill the immediate returns, should they violate or refuse to fulfill the above commitments, they shall be subject to the punishment or relevant regulatory measures imposed on them by the | 2021 to long-term |
securities regulatory authorities such as theCSRC and the SSE in accordance with therelevant regulations and rules.
(II) Statement of whether the Company's assets or projects fulfilled the original profit forecast
and its reason where the Company had profit forecasts on assets or projects and the ReportingPeriod fell within the term of profit forecasts
□Fulfilled □Unfulfilled √Not applicable
(III) Execution of the performance undertakings and their impact on the goodwill impairment
testing
□ Applicable √ Not applicable
II. Non-operating Occupation of Funds by the Controlling Shareholders and Other Related Parties during the Reporting Period
□ Applicable √ Not applicable
III. Illegal Guarantee
□ Applicable √ Not applicable
IV. Explanation of the Company's Board of Directors on the "Non-standard Audit Report" from
the Accounting Firm
□ Applicable √ Not applicable
V. Analysis and Explanation from the Company on the Reasons and Impact of Changes inAccounting Policies, Accounting Estimates or Correction on Significant Accounting Errors(I) Analysis and explanation from the Company on the reasons and impact of changes inaccounting policies or accounting estimates
√ Applicable □ Not applicable
For details, see the description in "44. Changes in significant accounting policies and accountingestimates", "V. Significant Accounting Policies and Accounting Estimates", "Section X Financial Report".
(II) Analysis and explanation from the Company on the reasons and impact of the correction onsignificant accounting errors
□ Applicable √ Not applicable
(III) Communication with the previous accounting firm
□ Applicable √ Not applicable
(IV) Other explanations
□ Applicable √ Not applicable
VI. Appointment and Dismissal of the Accounting Firm
Unit: Yuan Currency: RMB
Current accounting firm | |
Name of the domestic accounting firm | Pan-China Certified Public Accountants (Special General Partnership) |
Remuneration of the domestic accounting firm | 1,400,000 |
Term of office of the domestic accounting firm | 12 |
Names of CPAs from the domestic accounting firm | YIN Zhibin, WANG Xiaokang |
Continual term of audit service provided by the CPAs from the in the domestic accounting firm | YIN Zhibin: 3 years of continual term of audit service WANG Xiaokang: 5 years of continual term of audit service |
Name | Remuneration | |
Accounting firm for internal control and audit | Pan-China Certified Public Accountants (Special General Partnership) | 200,000 |
Explanation on appointment and dismissal of the accounting firm
□ Applicable √ Not applicable
Explanation on the change of accounting firm during the Auditing Period
□ Applicable √ Not applicable
VII. Particulars on Risk of Delisting(I) Reasons for the delisting risk warning
□ Applicable √ Not applicable
(II) Measures to be taken by the Company
□ Applicable √ Not applicable
(III) Situation and causes for termination of listing
□ Applicable √ Not applicable
VIII. Matters Related to Bankruptcy and Reorganization
□ Applicable √ Not applicable
IX. Material Litigations and Arbitrations
□ The Company had material litigations and arbitrations during the year √ The Company had no materiallitigations and arbitrations during the year
X. Suspected Violations, Penalties and Rectifications of the Company and Its Directors,Supervisors, Senior Management, Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XI. Integrity of the Company and Its Controlling Shareholders and Actual Controllers During theReporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company and its controlling shareholders and actual controllerswere in good faith.
XII. Significant Related-party Transactions(I) Related-party transactions pertaining to daily operation
1. Matters that have been disclosed in the interim announcement without progress or change inthe follow-up implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in the
follow-up implementation
√ Applicable □ Not applicable
The 5th meeting of the third session of Board of Directors and the 2021 annual General Meeting ofShareholders were held by the Company on April 20, 2022 and May 12, 2022 respectively to deliberate
on and approve the Proposal on the Estimated Amount of Daily Related-party Transactions for 2022. Fordetails, see the Announcement on the Estimated Amount of Daily Related-party Transactions for 2022(No.: 2022-020) disclosed by the Company on the SSE website (www.sse.com.cn) on April 22, 2022. Thenumber of daily related-party transactions of the Company in 2022 does not exceed the estimated numberat the beginning of the year.The estimated and actual amounts of the Company's daily related-party transactions in 2022 are as follows:
Category of related-party transactions | Related party | Estimated amount in 2022 | Actual amount in 2022 |
Deposits in bank accounts opened with the related party | Zhejiang Yueqing Rural Commercial Bank Co., Ltd. | No more than RMB150 million for daily amount | RMB146.67million |
Information of related lease | Huzhou Beauteville Technology Incubator Co., Ltd. | RMB1.8 million | RMB1.12million |
Note: The "actual amount in 2022" represents the balance in the accounts as of March 15, 2022 as ZhejiangYueqing Rural Commercial Bank Co., Ltd. has no longer been identified as an affiliated entity of theCompany since March 16, 2022. From January 1, 2022 to March 15, 2022, the Company obtained a depositinterest of RMB1.44million from Zhejiang Yueqing Rural Commercial Bank Co., Ltd.
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
(II) Related-party transactions arising from acquisition and disposal of assets or equity
1. Matters that have been disclosed in the interim announcement without progress or change in
the follow-up implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in the
follow-up implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
4. Disclosable performance achievements during the Reporting Period involving agreed-upon
performance
□ Applicable √ Not applicable
(III) Significant related-party transactions pertaining to joint external investment
1. Matters that have been disclosed in the interim announcement without progress or change inthe follow-up implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in thefollow-up implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
(IV) Credits and debits with related parties
1. Matters that have been disclosed in the interim announcement without progress or change inthe follow-up implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in the
follow-up implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
(V) Financial business between the Company and related financial companies, holding financialcompanies and related parties
□ Applicable √ Not applicable
(VI) Other
□ Applicable √ Not applicable
XIII. Significant Contracts and Their Performance(I) Trusteeship, contracting and leasing
1. Trusteeship
□ Applicable √ Not applicable
2. Contracting
□ Applicable √ Not applicable
3. Leasing
□ Applicable √ Not applicable
(II) Guarantee
□ Applicable √ Not applicable
(III) Entrusting others to manage cash assets
1. Entrusted wealth management
(1) Overall condition of entrusted wealth management
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(2) Individual entrusted wealth management
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(3) Impairment provisions of entrusted wealth management
□ Applicable √ Not applicable
2. Entrusted loans
(1) Overall condition of entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(2) Individual entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(3) Impairment provisions of entrusted loans
□ Applicable √ Not applicable
3. Others
□ Applicable √ Not applicable
(IV) Other material contracts
□ Applicable √ Not applicable
XIV. Other Major Matters That Have A Significant Impact on Investors' Value Judgments and
Investment Decisions
□ Applicable √ Not applicable
Section VII Shareholders and Changes in Shares
I. Changes in Share Capital(I) Table of changes in shares
1. Table of changes in shares
Unit: ’0,000 shares
Before this change | Increase or decrease (+ or -) due to this change | After this change | |||||||
Number | Percentage (%) | Issuance of new shares | Bonus shares | Shares converted from capital reserve | Other | Subtotal | Number | Percentage (%) | |
I. Restricted shares | 34.7201 | 0.1727 | 210 | -34.7201 | 175.2799 | 210 | 0.7407 | ||
1. Shares held by the state | |||||||||
2. Shares held by state-owned legal persons | |||||||||
3. Shares held by other domestic funds | 34.7201 | 0.1727 | 210 | -34.7201 | 175.2799 | 210 | 0.7407 | ||
Wherein: Shares held by domestic non-state-owned legal persons | |||||||||
Shares held by domestic natural persons | 34.7201 | 0.1727 | 210 | -34.7201 | 175.2799 | 210 | 0.7407 | ||
4. Shares held by foreign funds | |||||||||
Wherein: Shares held by foreign legal persons | |||||||||
Shares held by foreign natural persons | |||||||||
II. Unrestricted outstanding shares | 20,066.2765 | 99.8273 | 8,040.3986 | 35.2718 | 8,075.6704 | 28,141.9469 | 99.2593 | ||
1. RMB Ordinary Shares | 20,066.2765 | 99.8273 | 8,040.3986 | 35.2718 | 8,075.6704 | 28,141.9469 | 99.2593 | ||
2. Foreign-funded shares listed domestically | |||||||||
3. Foreign-funded shares listed overseas |
4. Others | |||||||||
III. Total shares | 20,100.9966 | 100.00 | 210 | 8,040.3986 | 0.5517 | 8,250.9503 | 28,351.9469 | 100.00 |
2. Changes in shares
√ Applicable □ Not applicable
On January 12, 2022, the 4th meeting of the third session of Board of Directors and the 4th meeting of thethird session of Board of Supervisors were held to deliberate on and approve the Proposal on theSatisfaction of Conditions for Releasing the Sales Restrictions for the Third Release Period of theRestricted Shares Granted for the First Time and with Reserve under the 2018 Restricted Share IncentivePlan, agreeing that the Company may handle the release procedure for the incentive recipients who meetthe conditions for releasing the sales restrictions. A total of 347,201 restricted shares were released fromthe sales restriction. The circulation date of released shares is January 20, 2022. The number of theunrestricted circulating shares of the Company increased from 200,662,765 before the listing to201,009,966, while the number of the restricted circulating shares decreased from 347,201 before thelisting to 0.On May 12, 2022, the 2021 annual General Meeting of Shareholders was held to deliberate on and approvethe Company's Plan for Profit Distribution and Capitalization of Capital Reserves for 2021, in which theCompany distributed to all shareholders a cash dividend of RMB8.60 (tax inclusive) per 10 shares basedon the total share capital as of the record date on which equity distribution is implemented and issued 4shares for every 10 shares to all shareholders through capitalization of the capital reserve, totaling80,403,986 shares converted. The circulation date of unrestricted circulating shares is May 31, 2022. Thenumber of the unrestricted circulating shares of the Company increased from 201,009,966 before thelisting to 281,413,952.On July 25, 2022, the 7th meeting of the third session of Board of Directors and the 7th meeting of thethird session of Board of Supervisors were held to deliberate on and approve the Proposal on the Grantingof Restricted Shares to Incentive Recipients, which considered that the granting conditions specified in the2022 Restricted Share Incentive Plan of the Company (Draft) had been met and agreed that 2.1 millionrestricted shares would be granted to 101 eligible incentive recipients at the consideration ofRMB78.56/share on July 25, 2022, which is considered the grant day. On September 6, 2022, the Companycompleted the registration of the grant under the 2022 Restricted Share Incentive Plan at CSDC ShanghaiBranch. The number of the restricted circulating shares of the Company increased from 0 before the listingto 2,100,000.With the Approval of the CSRC, namely, the Reply on Approving Proya Cosmetics Co., Ltd.'s PublicIssuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021] No. 3408), on December 8, 2021,the Company publicly issued 7,517,130 convertible bonds with a face value of RMB100 per share and atotal face value of RMB751,713,000, with a term of 6 years. With the approval of the SSE's Self-Regulatory Supervision Decision Letter [2021] No. 503, the convertible corporate bonds issued by theCompany amounting to RMB751,713,000 would be listed and traded on the Shanghai Stock Exchangefrom January 4, 2022, with the short name of "Proya Convertible Bond" and the bond code of "113634".The Proya Convertible Bond started conversion on June 14, 2022. As of December 31, 2022, RMB776,000of Proya Convertible Bond had been converted to A-share stocks of the Company, generating 5,517 shares.The number of the unrestricted circulating shares of the Company increased by 5,517.
3. Impact of changes in shares on the earnings per share, net asset value per share and otherfinancial indicators in the last year and period (if any)
√ Applicable □ Not applicable
Implementation of the 2021 plan for capitalization of capital reserves: calculated based on the diluted totalshare capital after the capitalization of capital reserves.Changes in other shares: no material impact.
4. Disclosure of other content that the Company deems necessary or the securities regulatoryauthority requires
□ Applicable √ Not applicable
(II) Changes in restricted shares
√ Applicable □ Not applicable
Unit: Share
Name of shareholder | Number of restricted shares at the beginning of the year | Number of restricted shares released during the year | Number of restricted shares increased during the year | Number of restricted shares at the end of the year | Reason for sales restriction | Date of releasing the sales restriction |
JIN Yanhua | 39,320 | 39,320 | 140,000 | 140,000 | 2022 Restricted Stock Incentive Plan | - |
WANG Li | 22,382 | 22,382 | 180,000 | 180,000 | 2022 Restricted Stock Incentive Plan | - |
16 persons granted for the first time under 2018 Restricted Stock Incentive Plan | 239,379 | 239,379 | 0 | 0 | The grant for the first time under 2018 Restricted Stock Incentive Plan | January 20, 2022 |
4 persons granted with reserve under 2018 Restricted Stock Incentive Plan | 46,120 | 46,120 | 0 | 0 | The grant with reserve under 2018 Restricted Stock Incentive Plan | January 20, 2022 |
99 persons granted under 2022 Restricted Stock Incentive Plan | 0 | 0 | 1,780,000 | 1,780,000 | 2022 Restricted Stock Incentive Plan | - |
Total | 347,201 | 347,201 | 2,100,000 | 2,100,000 | / | / |
II. Issuance and Listing of Securities(I) Issuance of securities as of the Reporting Period
√ Applicable □ Not applicable
Unit: Share Currency: RMB
Category of shares and their derivatives | Issue date | Issue price (or interest rate) | Issue quantity | Circulation date | Number of shares available for circulation and trading | Termination date |
Convertible corporate bonds and warrant bonds | ||||||
Convertible corporate bonds | 12/8/2021 | RMB100 | 7,517,130 | 1/4/2022 | 7,517,130 | 12/7/2027 |
Issuance of securities in the Reporting Period (provide separate explanation on bonds with differentinterest rates in their duration):
√ Applicable □ Not applicable
With the Approval of the CSRC, namely, the Reply on Approving Proya Cosmetics Co., Ltd.'s PublicIssuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021] No. 3408), on December 8, 2021,the Company publicly issued 7,517,130 convertible bonds with a face value of RMB100 per share and atotal face value of RMB751,713,000. These convertible bonds were issued at face value with a term of 6years.With the approval of the SSE's Self-Regulatory Supervision Decision Letter [2021] No. 503, theconvertible corporate bonds issued by the Company amounting to RMB751,713,000 would be listed andtraded on the Shanghai Stock Exchange from January 4, 2022, with the short name of "Proya ConvertibleBond" and the bond code of "113634". The nominal interest rate of the convertible corporate bonds issuedthis time was as follows: 0.30% in the first year, 0.50% in the second year, 1.00% in the third year, 1.50%in the fourth year, 1.80% in the fifth year, and 2.00% in the sixth year. The duration of the convertiblecorporate bonds runs from December 8, 2021 to December 7, 2027.According to relevant regulations and the Prospectus of Proya Cosmetics Co., Ltd. for the Public Offeringof A-Share Convertible Corporate Bonds, this “Proya Convertible Bond” issued by the Company can beconverted to the Company's shares from June 14, 2022. The convertible period is from June 14, 2022 toDecember 7, 2027. The initial conversion price is 195.98 RMB/share. The latest conversion price is 138.92RMB/share. The historical adjustments to the conversion price are as follows:
1. Since the 2021 Equity Distribution Plan was implemented by the Company, the conversion price of the“Proya Convertible Bond” was adjusted to RMB139.37/share on May 30, 2022. For details, see theAnnouncement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price due to 2021 Equity
Distribution Plan (No.: 2022-029) released by the Company on the SSE website on May 24, 2022(www.sse.com.cn).
2. Since the registration of restricted shares involved in the grant under the 2022 Restricted Stock IncentivePlan was completed, the conversion price of the “Proya Convertible Bond” has been adjusted to 138.92RMB/share since September 9, 2022. For details, see the Announcement of Proya Cosmetics Co., Ltd. onAdjustment of Conversion Price due to Additional Issuance from Granting of Restricted Shares (No.:
2022-052) released by the Company on the SSE website on September 8, 2022 (www.sse.com.cn).
(II) Changes in the total number of shares and shareholder structure of the Company and changesin the structure of assets and liabilities of the Company
√ Applicable □ Not applicable
The total number of the Company's ordinary shares at the beginning and end of the Reporting Period was201,009,966 and 283,519,469 respectively.The Company's total assets and total liabilities at the beginning of the Reporting Period amounted toRMB4,633,049,783.03 and RMB1,746,209,355.96 respectively, with the asset-liability ratio of 37.69%.The Company's total assets and total liabilities at the end of the Reporting Period amounted toRMB5,778,071,824.19 and RMB2,240,848,493.90 respectively, with the asset-liability ratio of 38.78%.
(III) Existing internal employee shares
□ Applicable √ Not applicable
III. Shareholders and Actual Controllers(I) Total number of shareholders
Total number of shareholders of ordinary shares as of the end of the Reporting Period | 13,915 |
Total number of shareholders of ordinary shares at the end of last month prior to the disclosure date of the Annual Report | 13,080 |
Total number of shareholders of preferred shares whose voting rights have been restored as of the end of the Reporting Period | 0 |
Total number of shareholders of preferred shares whose voting rights have been restored at the end of last month prior to the disclosure date of the Annual Report | 0 |
(II) Table of shareholdings of the top ten shareholders and the top ten shareholders of circulating
shares (or unrestricted shareholders) as of the end of the Reporting Period
Unit: share
Shareholdings of the top ten shareholders | ||||||
Name of shareholder (full name) | Change during the | Number of shares held at the end | Percentage (%) | Number of restricted | Pledged, marked or frozen | Nature of shareholder |
Reporting Period | of the period | shares held | Share status | Number | |||
HOU Juncheng | 27,905,926 | 97,670,741 | 34.45 | 0 | None | Domestic natural person | |
Hong Kong Securities Clearing Company Limited | 17,317,429 | 64,473,469 | 22.74 | 0 | None | Other | |
FANG Yuyou | 9,424,627 | 45,772,470 | 16.14 | 0 | None | Domestic natural person | |
China Construction Bank Co., Ltd. - Yinhua Fuyu Theme Hybrid Securities Investment Fund | 5,801,301 | 5,801,301 | 2.05 | 0 | None | Other | |
China Construction Bank Co., Ltd. - CUAM Consumer Industry Hybrid Securities Investment Fund | 1,699,930 | 3,100,013 | 1.09 | 0 | None | Other | |
Aberdeen Standard Investment Management (Asia) Co., Ltd. - Aberdeen Standard - China A-share Equity Fund | 852,970 | 2,552,293 | 0.90 | 0 | None | Other |
Industrial and Commercial Bank of China Limited - Jingshun Changcheng Emerging Growth Hybrid Securities Investment Fund | 680,000 | 2,380,000 | 0.84 | 0 | None | Other | |
Industrial and Commercial Bank of China Limited - CUAM Consumption Upgrade Hybrid Securities Investment Fund | 300,002 | 1,500,089 | 0.53 | 0 | None | Other | |
CAO Liangguo | -2,407,401 | 1,362,537 | 0.48 | 0 | None | Domestic natural person | |
J. P. Morgan Securities PLC - Self-owned Capital | 530,432 | 1,252,260 | 0.44 | 0 | None | Other | |
Shareholdings of the top ten unrestricted shareholders | |||||||
Name of shareholder | Number of unrestricted circulating shares held | Type and number of shares | |||||
Type | Number | ||||||
HOU Juncheng | 97,670,741 | RMB ordinary shares | 97,670,741 | ||||
Hong Kong Securities Clearing Company Limited | 64,473,469 | RMB ordinary shares | 64,473,469 | ||||
FANG Yuyou | 45,772,470 | RMB ordinary shares | 45,772,470 | ||||
China Construction Bank Co., Ltd. - Yinhua Fuyu Theme Hybrid Securities Investment Fund | 5,801,301 | RMB ordinary shares | 5,801,301 | ||||
China Construction Bank Co., Ltd. - CUAM Consumer Industry Hybrid Securities Investment Fund | 3,100,013 | RMB ordinary shares | 3,100,013 |
Aberdeen Standard Investment Management (Asia) Co., Ltd. - Aberdeen Standard - China A-share Equity Fund | 2,552,293 | RMB ordinary shares | 2,552,293 |
Industrial and Commercial Bank of China Limited - Jingshun Changcheng Emerging Growth Hybrid Securities Investment Fund | 2,380,000 | RMB ordinary shares | 2,380,000 |
Industrial and Commercial Bank of China Limited - CUAM Consumption Upgrade Hybrid Securities Investment Fund | 1,500,089 | RMB ordinary shares | 1,500,089 |
CAO Liangguo | 1,362,537 | RMB ordinary shares | 1,362,537 |
J. P. Morgan Securities PLC - Self-owned Capital | 1,252,260 | RMB ordinary shares | 1,252,260 |
Explanation on the special account for repurchase among the top ten shareholders | None | ||
Explanation on the above-mentioned shareholders' entrusting voting rights, entrusted voting rights and abstention from voting rights | None | ||
Explanation on the related relationship or parties acting in concert among the above shareholders | FANG Yuyou is the younger brother of HOU Juncheng's spouse FANG Aiqin, so HOU Juncheng and FANG Yuyou are related. | ||
Explanation on the shareholders of preferred shares with voting rights restored and their shareholdings | None |
Shareholdings and sales restrictions of the top ten restricted shareholders
√ Applicable □ Not applicable
Unit: share
Number | Name of shareholder of restricted shares | Number of restricted shares held | Availability of restricted shares for circulation and trading | Sales restrictions |
Time of availability for circulation and trading | Number of new shares available for circulation and trading | ||||
1 | Equity incentive recipient | 2,100,000 | See the explanation below for details | ||
Explanation on the related relationship or parties acting in concert among the above shareholders | None |
Note: The restricted shares held by equity incentive recipients are those granted under the 2022 RestrictedStock Incentive Plan. The restricted period was 12 months, 24 months, and 36 months from the completionof their registration with CSDC Shanghai Branch (September 6, 2022).
(III) Strategic investors or general legal persons becoming the top ten shareholders because of
placing of new shares
□ Applicable √ Not applicable
IV. Controlling shareholders and Actual Controllers(I) Controlling shareholders1 Legal person
□ Applicable √ Not applicable
2 Natural person
√ Applicable □ Not applicable
Name | HOU Juncheng and Fang Aiqin |
Nationality | Chinese |
Acquire residence permits in other countries or regions or not | No |
Main job and title | HOU Juncheng and Fang Aiqin are husband and wife. HOU Juncheng serves as the Chairman of the Company, and Fang Aiqin serves as the Senior Purchasing Consultant of the Company. |
3 Special explanation on the situation that the Company has no controlling shareholders
□ Applicable √ Not applicable
4 Explanation on changes in controlling shareholders during the Reporting Period
□ Applicable √ Not applicable
5 Diagram of the ownership and controlling relationship between the Company and its
controlling shareholders
√ Applicable □ Not applicable
(II) Actual controllers1 Legal person
□ Applicable √ Not applicable
2 Natural person
√ Applicable □ Not applicable
Name | HOU Juncheng and Fang Aiqin |
Nationality | Chinese |
Acquire residence permits in other countries or regions or not | No |
Main job and title | HOU Juncheng and Fang Aiqin are husband and wife. HOU Juncheng serves as the Chairman of the Company, and Fang Aiqin serves as the Senior Purchasing Consultant of the Company. |
Shareholdings in other domestic or overseas listed companies over the past 10 years | None |
3 Special explanation on the situation that the Company has no actual controllers
□ Applicable √ Not applicable
4 Explanation on changes in the control of the Company during the Reporting Period
□ Applicable √ Not applicable
5 Diagram of the ownership and controlling relationship between the Company and its actualcontrollers
√ Applicable □ Not applicable
6 Control of the Company by actual controllers by way of trust or other means of asset
management
□ Applicable √ Not applicable
(III) Other explanations on controlling shareholders and actual controllers
□ Applicable √ Not applicable
V. The accumulative number of pledged shares of the Company's controlling shareholders or the
largest shareholder and its persons acting in concert accounted for more than 80% of theCompany's shares held by them
□ Applicable √ Not applicable
VI. Other Legal Person Shareholders with More Than 10% Shareholdings
□ Applicable √ Not applicable
VII. Explanation on Limitation on Reduction of Shareholding
□ Applicable √ Not applicable
VIII. Specific Implementation of Share Repurchase During the Reporting Period
□ Applicable √ Not applicable
Section VIII Information on Preferred Shares
□ Applicable √ Not applicable
Section IX Information on Bonds
I. Enterprise Bonds, Corporate Bonds and Non-financial Corporate Debt Financing Instruments
□ Applicable √ Not applicable
II. Convertible Corporate Bonds
√ Applicable □ Not applicable
(I) Issuance of convertible bonds
√ Applicable □ Not applicable
With the Approval of the CSRC, namely, the Reply on Approving Proya Cosmetics Co., Ltd.'s PublicIssuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021] No. 3408), on December 8, 2021,the Company publicly issued 7,517,130 convertible bonds with a face value of RMB100 per share and atotal face value of RMB751,713,000. These convertible bonds were issued at face value with a term of 6years.With the approval of the SSE's Self-Regulatory Supervision Decision Letter [2021] No. 503, theconvertible corporate bonds issued by the Company amounting to RMB751,713,000 would be listed andtraded on the Shanghai Stock Exchange from January 4, 2022, with the short name of "Proya ConvertibleBond" and the bond code of "113634". The nominal interest rate of the convertible corporate bonds issuedthis time was as follows: 0.30% in the first year, 0.50% in the second year, 1.00% in the third year, 1.50%in the fourth year, 1.80% in the fifth year, and 2.00% in the sixth year. The duration of the convertiblecorporate bonds runs from December 8, 2021 to December 7, 2027.According to relevant regulations and the Prospectus of Proya Cosmetics Co., Ltd. for the Public Offeringof A-Share Convertible Corporate Bonds, this “Proya Convertible Bond” issued by the Company can beconverted to the Company's shares from June 14, 2022. The convertible period is from June 14, 2022 toDecember 7, 2027. The initial conversion price is 195.98 RMB/share. The latest conversion price is 138.92RMB/share. The historical adjustments to the conversion price are as follows:
1. Since the 2021 Equity Distribution Plan was implemented by the Company, the conversion price of theProya Convertible Bond was adjusted to RMB139.37/share on May 30, 2022. For details, see theAnnouncement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price due to 2021 EquityDistribution Plan (No.: 2022-029) released by the Company on the SSE website on May 24, 2022(www.sse.com.cn).
2. Since the registration of restricted shares involved in the grant under the 2022 Restricted Stock IncentivePlan was completed, the conversion price of the Proya Convertible Bond has been adjusted to 138.92RMB/share since September 9, 2022. For details, see the Announcement of Proya Cosmetics Co., Ltd. onAdjustment of Conversion Price due to Additional Issuance from Granting of Restricted Shares (No.:
2022-052) released by the Company on the SSE website on September 8, 2022 (www.sse.com.cn).
(II) Holders and guarantors of convertible bonds during the Reporting Period
√ Applicable □ Not applicable
Name of the convertible corporate bond | Proya Convertible Bond |
Number of holders of the convertible corporate bond at the end of the | 14,778 |
Reporting Period | ||
Guarantors of the convertible bond of the Company | None | |
The top ten holders of the convertible bond are as follows: | ||
Name of holders of the convertible corporate bond | Number of bonds held at the end of the Reporting Period (RMB) | Holding ratio (%) |
Dajia Assets - Minsheng Bank - Dajia Assets - Selected Conservative Portfolio No.5 (Issue 2) Collective Asset Management Product | 47,735,000 | 6.36 |
China Merchants Bank Co., Ltd. - Huabao Convertible Bond Securities Investment Fund | 40,233,000 | 5.36 |
ICBC Credit Suisse Ruixi Fixed-income Pension Product - Bank of China Limited | 26,647,000 | 3.55 |
Industrial and Commercial Bank of China Limited - Southern Profitable Return Bond Securities Investment Fund | 24,664,000 | 3.28 |
Dajia Assets - China Merchants Bank - Dajia Assets - Selected Conservative Portfolio No.1 (Issue 1) Collective Asset Management Product | 22,577,000 | 3.01 |
Industrial and Commercial Bank of China Limited - Yinhua Convertible Bond Securities Investment Fund | 21,487,000 | 2.86 |
Dajia Assets - China CITIC Bank - Dajia Assets Houkun No.40 Collective Asset Management Product | 20,481,000 | 2.73 |
Generali Asset Management - Industrial and Commercial Bank of China - Generali Asset Management - Selected Bond Asset Management Product | 19,000,000 | 2.53 |
Dajia Assets - Postal Savings Bank of China - Dajia Assets - Selected Conservative Portfolio No.6 (Issue 2) Collective Asset Management Product | 16,745,000 | 2.23 |
China Merchants Bank Co., Ltd. - Oriental Juli Bond Securities Investment Fund | 12,500,000 | 1.66 |
(III) Changes in convertible bonds during the Reporting Period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Name of the convertible corporate bond | Before this change | Increase or decrease due to this change | After this change | ||
Share conversion | Redemption | Sell-back | |||
Proya Convertible Bond | 751,713,000 | 776,000 | 0 | 0 | 750,937,000 |
Cumulative conversion of convertible bonds during the Reporting Period
√ Applicable □ Not applicable
Name of the convertible corporate bond | Proya Convertible Bond |
Amount of shares converted from bonds in the Reporting Period (RMB) | 776,000 |
Number of shares converted from bonds in the Reporting Period (share) | 5,517 |
Accumulated number of shares converted from bonds (share) | 5,517 |
Proportion of the accumulated number of converted shares in the total number of issued shares of the Company before conversion (%) | 0.0020 |
Amount of bonds not converted into shares (RMB) | 750,937,000 |
Proportion of unconverted convertible bonds in the total amount of convertible bonds issued (%) | 99.8968 |
(IV) Historical adjustments to the conversion price
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Name of the convertible corporate bond | Proya Convertible Bond | |||
Date of adjustment | Adjusted conversion price | Time of disclosure | Media of disclosure | Explanation on adjustments to the conversion price |
May 30, 2022 | 139.37 RMB/share | May 24, 2022 | SSE website, Shanghai Securities News, Securities Times | Since the 2021 Equity Distribution Plan was implemented by the Company, the conversion price of the Proya Convertible Bond was adjusted to 139.37 RMB/share on May 30, 2022. For details, see the |
Announcement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price due to 2021 Equity Distribution Plan (No.: 2022-029) released by the Company on the SSE website on May 24, 2022 (www.sse.com.cn). | ||||
September 9, 2022 | 138.92 RMB/share | September 8, 2022 | SSE website, Shanghai Securities News, Securities Times | Since the registration of restricted shares involved in the grant under the 2022 Restricted Stock Incentive Plan was completed, the conversion price of the Proya Convertible Bond has been adjusted to 138.92 RMB/share since September 9, 2022. For details, see the Announcement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price due to Additional Issuance from Granting of Restricted Shares (No.: 2022-052) released by the Company on the SSE website on September 8, 2022 (www.sse.com.cn). |
Latest conversion price as of the end of the Reporting Period | 138.92 RMB/share |
(V) The Company's liabilities, changes in credit, and cash arrangements for debt repayment in
future years
□ Applicable √ Not applicable
(VI) Other explanations on convertible bonds
□ Applicable √ Not applicable
Section X Financial Report
I. Audit Report
√ Applicable □ Not applicable
Audit Report
Tian Jian Shen [2023] No.3128
To all shareholders of Proya Cosmetics Co., Ltd.:
I. Audit OpinionWe have audited the financial statements of Proya Cosmetics Co., Ltd. (hereinafter referred to as "Proya"),which comprise the consolidated and parent company's balance sheets as at December 31, 2022, theconsolidated and parent company's income statements, the consolidated and parent company's cash flowstatements, and the consolidated and parent company's statements of changes in shareholders' equity forthe year of 2022, as well as notes to financial statements.In our opinion, the accompanying financial statements were prepared in accordance with the AccountingStandards for Business Enterprises in all material aspects and give a true and fair view of the consolidatedand parent company's financial position of Proya as at December 31, 2022 and of its consolidated andparent company's operating results and cash flows for the year of 2022.
II. Basis of Audit OpinionWe have conducted our audit in accordance with the Chinese Auditing Standards for Certified PublicAccountants. The "Responsibilities of CPAs for the Audit of the Financial Statements" herein furtherillustrate our responsibilities under those standards. In accordance with the Code of Professional Ethics ofChinese Certified Public Accountants, we are independent of Proya and have performed otherresponsibilities in respect of professional ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion.
III. Key Audit MattersKey audit matters are, in our professional judgment, most significant in our audit of the financialstatements for the current period. These matters were addressed in the context of our audit of the financialstatements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on thesematters.(I) Recognition of revenue
1. Description of matters
For relevant information disclosure, refer to "38. Revenue" in "V. Significant Accounting Policies andEstimates", "61. Operating revenue and operating costs" in "VII. Notes to the Items of ConsolidatedFinancial Statements", and "6. Segment information" in "XVI. Other Significant Matters" of "Section XFinancial Report" herein.The operating revenue of Proya primarily comes from the sale of cosmetics. The operating revenue for2022 shown in Proya's financial statements was RMB6.39billion.Pursuant to the sales contract between Proya and its customer, under the distribution model, the salesrevenue is recognized by Proya when its products are delivered to and accepted by the buyers. Under theagency sales model, the sales revenue is recognized by Proya when its products are delivered to the agentand the agent completes the sales and issues the sales list for goods. Under the direct sales model, the salesrevenue is recognized by Proya when its products are delivered to its consumer and the consumer confirmsthe receipt and makes the payment.Since operating revenue is one of the key performance indicators of Proya, there is an inherent risk thatthe management of Proya (hereinafter referred to as the "management") achieves specific goals orexpectations through inappropriate recognition of revenue. Therefore, we identify the recognition ofrevenue as a key audit matter.
2. Audit response
For recognition of revenue, we primarily implemented the following audit procedures:
(1) To obtain an understanding of key internal controls related to the recognition of revenue, evaluate thedesign of these controls, determine whether these controls were implemented, and test the operationaleffectiveness of these controls;
(2) To issue letters to the main customers to confirm the sales amount in 2022 and the balance of accountsreceivable as at the end of 2022;
(3) To test details and make a spot-check on supporting documents for recognition of revenue (includingsales contracts, delivery documents, receipts, agency sales lists, and sales invoices), understand majorcontract terms or conditions, and evaluate the appropriateness of the method for recognition of revenue;
(4) To implement analysis procedures, including analysis on fluctuations in revenue of each month of2022 and analysis on changes in sales revenue of major customers;
(5) To obtain the rebate and subsidy policies, rebate and subsidy calculation sheets and other information,and check whether the withholding amount of rebate and subsidy as at the end of 2022 was sufficient; toanalyze whether the amount of rebate and subsidy and the withholding amount were reasonable based onthe rebate and subsidy policy as well as the revenue in 2022; and to check the settlement after the rebateand subsidy withholding period as at the end of 2022;
(6) To obtain the return and exchange policy, calculation sheet of provisions and other information, andcheck whether the estimated future return and exchange rate is reasonable; to check the subsequent returnand exchange situation and compare it with the estimated return and exchange data;
(7) To learn about the inventory and stock age of each major dealer as at the end of 2022 and check whetherthe inventory amount and structure of the dealer were reasonable;
(8) To analyze the sales data of main online chain stores by calculating the consumption per capita,consumption per time, purchase times and repurchase information of customers of online chain stores andcomparing them with the selling prices and normal use days of Proya products, so as to judge the rationalityof the above data in combination with normal consumption habits and analyze the authenticity andrationality of the income of online chain stores;
(9) To compare the background transaction data, Alipay receipt data and sales revenue data on financialaccounts of online chain stores, and analyze the matching attribute of data, so as to check the authenticityof sales from the online chain stores;
(10) To check whether the information related to the operating revenue is properly presented in thefinancial statements.(II) Net realizable value of inventories
1. Description of matters
For relevant information disclosure, refer to "15. Inventories" in "V. Significant Accounting Policies andEstimates" and "9. Inventories" in "VII. Notes to the Items of Consolidated Financial Statements" of"Section X Financial Report" herein.As of December 31, 2022, the book balance of inventories of Proya amounted to RMB710.13million, theprovision for devaluation of inventories amounted to RMB41.08million, and the carrying value ofinventories amounted to RMB669.05million.At the balance sheet date, inventories are measured at the lower of cost and net realizable value, andprovision for devaluation of inventories is made if the cost of a single inventory is higher than its netrealizable value. On the basis of considering the purpose of holding inventories, the managementdetermines the estimated selling price based on the historical selling price, actual selling price, and futuremarket trends, and also determines the net realizable value based on the amount after deducting theestimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price ofinventories.
Since the amount of inventories is significant and the determination of the net realizable value ofinventories involves significant judgment by the management, we identified the net realizable value ofinventories as a key audit matter.
2. Audit response
For net realizable value of inventories, we primarily implemented the following audit procedures:
(1) To obtain an understanding of key internal controls related to the net realizable value of inventories,evaluate the design of these controls, determine whether these controls were implemented, and test theoperational effectiveness of these controls;
(2) To obtain the accrual policy and calculation process for provision for devaluation of inventories, andre-check the calculation process;
(3) To obtain the list of products that are no longer sold, count the products rolling off the production linesin the inventories and the corresponding raw material inventories, and verify whether the provision fordevaluation of inventories was accrued for the raw material inventories;
(4) To check whether the inventories as at the end of the period had long inventory ages, outdated modelsand changes in market demand in combination with the inventory monitoring, and evaluate whether themanagement reasonably estimated the net realizable value;
(5) To check whether the information related to the net realizable value of inventories was properlypresented in the financial statements.
IV. Other InformationThe management is responsible for the other information, which comprises all the information covered inthe Annual Report other than the financial statements and this audit report.Our audit 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 other informationand, in doing so, consider whether the other information is materially inconsistent with the financialstatements 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 this otherinformation, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged With Governance for the FinancialStatementsThe management is responsible for the preparation of financial statements that give a true and fair view inaccordance with the Accounting Standards for Business Enterprises, and for the design, implementationand maintenance of necessary internal control to enable the preparation of financial statements that arefree from material misstatement, whether due to fraud or error.In preparing the financial statements, the management is responsible for assessing Proya's ability tocontinue as a going concern, disclosing, as applicable, matters related to going concern and using the goingconcern basis of accounting unless the management either intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.The governance of Proya (hereinafter referred to as "governance") is responsible for overseeing thefinancial reporting process of Proya.
VI. Responsibilities of CPAs for the Audit of the Financial StatementsOur objective is to obtain reasonable assurance of whether there is a material misstatement in the financialstatements as a whole due to fraud or error and to issue an audit report containing audit opinion.
Reasonable assurance is a highly reliable assurance, but is not a guarantee that an audit conducted inaccordance with China Standards on Auditing will always identify 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 the auditing standards, we exercise professional judgment andmaintained professional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraudor error, design and perform audit procedures responsive to those risks, and obtain audit evidence that issufficient and appropriate to provide a basis for our opinion. The risk of not identifying a materialmisstatement resulting from fraud is higher than that of failing to detect one resulting from error, as fraudmay involve collusion, forgery, intentional omissions, misrepresentations, or the override of internalcontrol.(II) Obtain an understanding of internal control related to the audit to design the appropriate auditprocedures.(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 of accountingand, based on the audit evidence obtained, determined whether a material uncertainty exists related toevents or conditions that may significantly affect Proya's ability to continue as a going concern. If weconclude that a material uncertainty exists, we are required to draw attention in our audit report to therelated disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our audit report. However,future events or conditions may cause Proya to cease to continue as a going concern.(V) Evaluate the overall presentation, structure and content of the financial statements, and determinewhether the financial statements reflect the related transactions and events fairly.(VI) Obtain sufficient and appropriate audit evidence of the financial information of the entity or businessactivity of Proya in order to express an opinion on the financial statements. We are responsible fordirecting, supervising and performing group audits. We take full responsibility for the audit opinion.We communicate with the governance regarding, among other matters, the planned scope and timing ofthe audit and significant audit findings, including any significant deficiencies in internal control that weidentify during the audit.We also provide a statement to those charged with governance on compliance with ethical requirementsrelated to independence, and communicate with them all relationships and other matters that may bereasonably considered to affect our independence, as well as related precautions (if applicable).From the matters we discussed with the those charged with governance, we determine those matters wereof most significance in the audit of the financial statements for the current period and are therefore the keyaudit matters. We describe these matters in the audit report unless laws or regulations preclude publicdisclosure about these matters or when, in extremely rare circumstances, we determine that a matter shouldnot be communicated in our audit 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 CPA: YIN Zhibin(Project Partner)
Hangzhou, China Chinese CPA: WANG Xiaokang
April 19, 2023
II. Financial Statements
Consolidated Balance Sheet
As at December 31, 2022Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
Item | Notes | As at December 31, 2022 | As at December 31, 2021 |
Current assets: | |||
Cash and cash equivalents | VII. 1 | 3,161,003,085.05 | 2,391,048,249.81 |
Clearing settlement funds | |||
Loans to banks and other financial institutions | |||
Held-for-trading financial assets | |||
Derivative financial assets | |||
Notes receivable | |||
Accounts receivable | VII. 5 | 102,157,898.41 | 138,626,627.90 |
Receivable financing | VII. 6 | 3,242,000.00 | |
Prepayments | VII. 7 | 91,483,523.15 | 58,406,647.11 |
Premiums receivable | |||
Reinsurance premium receivable | |||
Reserves for reinsurance contract receivable | |||
Other receivables | VII. 8 | 73,564,083.63 | 66,043,707.81 |
Including: Interest receivable | |||
Dividends receivable | |||
Financial assets purchased under resale agreements | |||
Inventories | VII. 9 | 669,051,326.73 | 447,938,758.29 |
Contract assets | |||
Held-for-sale assets | |||
Non-current assets due within one year | |||
Other current assets | VII. 13 | 49,735,996.57 | 53,534,962.39 |
Total current assets | 4,146,995,913.54 | 3,158,840,953.31 | |
Non-current assets: | |||
Loans and advances to customers | |||
Debt investments |
Other debt investments | |||
Long-term receivables | |||
Long-term equity investments | VII. 17 | 138,533,377.46 | 169,959,536.27 |
Other equity instrument investments | VII. 18 | 146,402,400.00 | 56,402,400.00 |
Other non-current financial assets | |||
Investment real estate | VII. 20 | 68,654,700.81 | 70,321,868.00 |
Fixed assets | VII. 21 | 570,376,309.67 | 558,981,209.20 |
Construction in progress | VII. 22 | 207,378,935.86 | 108,678,896.27 |
Bearer biological assets | |||
Oil and gas assets | |||
Right-of-use assets | VII. 25 | 6,410,634.25 | |
Intangible assets | VII. 26 | 420,316,883.26 | 397,145,124.29 |
Development expenditure | |||
Goodwill | |||
Long-term prepaid expenses | VII. 29 | 19,142,604.46 | 29,756,474.11 |
Deferred income tax assets | VII. 30 | 48,305,338.82 | 38,796,018.02 |
Other non-current Assets | VII. 31 | 5,554,726.06 | 44,167,303.56 |
Total non-current assets | 1,631,075,910.65 | 1,474,208,829.72 | |
Total assets | 5,778,071,824.19 | 4,633,049,783.03 | |
Current liabilities: | |||
Short-term borrowings | VII. 32 | 200,195,890.41 | 200,251,506.85 |
Loans from the central bank | |||
Placements from banks and other financial institutions | |||
Held-for-trading financial liabilities | |||
Derivative financial liabilities | |||
Notes payable | VII. 35 | 69,626,352.12 | 79,156,771.40 |
Accounts payable | VII. 36 | 475,427,484.23 | 404,026,241.16 |
Advance from customers | VII. 37 | 464,328.26 | 173,769.85 |
Contract liabilities | VII. 38 | 174,602,833.91 | 91,151,985.32 |
Financial assets sold under repurchase agreements | |||
Customer deposits and deposits from banks and other financial institutions | |||
Funds from securities trading agencies | |||
Funds from underwriting securities agencies |
Employee compensation payable | VII. 39 | 124,938,749.36 | 78,649,049.72 |
Taxes payable | VII. 40 | 152,918,871.45 | 99,893,176.97 |
Other payables | VII. 41 | 216,392,183.41 | 62,162,153.55 |
Including: Interest payable | |||
Dividends payable | |||
Fees and commissions payable | |||
Amounts payable under reinsurance contracts | |||
Held-for-sale liabilities | |||
Non-current liabilities due within one year | VII. 43 | 2,549,452.14 | |
Other current liabilities | VII. 44 | 10,820,499.59 | 9,521,415.32 |
Total current liabilities | 1,427,936,644.88 | 1,024,986,070.14 | |
Non-current liabilities: | |||
Insurance contract reserves | |||
Long-term borrowings | |||
Bonds payable | VII. 46 | 724,491,557.93 | 695,586,778.80 |
Including: Preferred stock | |||
Perpetual bonds | |||
Lease liabilities | VII. 47 | 3,718,119.41 | |
Long-term payables | |||
Long-term employee compensation payable | |||
Povisions | VII. 50 | 59,282,928.68 | 10,812,084.88 |
Deferred income | VII. 51 | 6,399,811.33 | 6,416,263.33 |
Deferred income tax liabilities | VII. 30 | 19,019,431.67 | 8,408,158.81 |
Other non-current liabilities | |||
Total non-current liabilities | 812,911,849.02 | 721,223,285.82 | |
Total liabilities | 2,240,848,493.90 | 1,746,209,355.96 | |
Owners' equity (or shareholders' equity): | |||
Paid-in capital (or share capital) | VII. 53 | 283,519,469.00 | 201,009,966.00 |
Other equity instruments | VII. 54 | 50,903,510.12 | 50,956,622.11 |
Including: Preferred stock | |||
Perpetual bonds | |||
Capital reserve | VII. 55 | 914,815,786.22 | 834,272,205.66 |
Less: Treasury shares | VII. 56 | 164,976,000.00 | 5,628,128.21 |
Other comprehensive income | VII. 57 | -1,918,603.07 | -1,247,674.10 |
Special reserve |
Surplus reserve | VII. 59 | 141,759,734.50 | 100,634,780.00 |
General risk reserve | |||
Retained profits | VII. 60 | 2,300,384,763.19 | 1,696,978,064.52 |
Total owners' equity (or shareholders' equity) attributable to equity holders of the parent company | 3,524,488,659.96 | 2,876,975,835.98 | |
Minority interests | 12,734,670.33 | 9,864,591.09 | |
Total owners' equity (or shareholders' equity) | 3,537,223,330.29 | 2,886,840,427.07 | |
Total liabilities and owners' equity (or shareholders' equity) | 5,778,071,824.19 | 4,633,049,783.03 | |
The chairman of the Company: HOU Juncheng | CFO of the Company: WANG Li | Person in charge of Accounting Department: WANG Li |
Parent Company's Balance SheetAs at December 31, 2022Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
Item | Notes | As at December 31, 2022 | As at December 31, 2021 |
Current assets: | |||
Cash and cash equivalents | 2,169,179,716.12 | 1,691,858,730.42 | |
Held-for-trading financial assets | |||
Derivative financial assets | |||
Notes receivable | |||
Accounts receivable | XVII. 1 | 289,883,063.24 | 354,196,955.99 |
Receivable financing | 3,092,000.00 | ||
Prepayments | 34,908,418.05 | 24,580,460.37 | |
Other receivables | XVII. 2 | 141,574,549.59 | 222,452,930.42 |
Including: Interest receivable | |||
Dividends receivable | |||
Inventories | 458,341,886.37 | 271,436,146.45 | |
Contract assets | |||
Held-for-sale assets | |||
Non-current assets due within one year | |||
Other current assets | 32,667,616.71 | 33,270,945.69 | |
Total current assets | 3,126,555,250.08 | 2,600,888,169.34 | |
Non-current assets: | |||
Debt investments |
Other debt investments | |||
Long-term receivables | |||
Long-term equity investments | XVII. 3 | 394,321,950.41 | 350,003,540.49 |
Other equity instrument investments | 110,580,000.00 | 20,580,000.00 | |
Other non-current financial assets | |||
Investment real estate | 348,408,309.83 | 362,657,495.17 | |
Fixed assets | 278,011,361.35 | 253,209,471.02 | |
Construction in progress | 206,756,324.14 | 105,012,647.89 | |
Bearer biological assets | |||
Oil and gas assets | |||
Right-of-use assets | 5,707,540.03 | ||
Intangible assets | 382,584,698.57 | 395,609,113.72 | |
Development expenditure | |||
Goodwill | |||
Long-term prepaid expenses | 13,494,337.73 | 20,075,870.93 | |
Deferred income tax assets | 11,372,733.52 | 22,968,793.93 | |
Other non-current Assets | 4,916,417.58 | 4,493,322.95 | |
Total non-current assets | 1,756,153,673.16 | 1,534,610,256.10 | |
Total assets | 4,882,708,923.24 | 4,135,498,425.44 | |
Current liabilities: | |||
Short-term borrowings | 200,195,890.41 | 200,251,506.85 | |
Held-for-trading financial liabilities | |||
Derivative financial liabilities | |||
Notes payable | 69,626,352.12 | 79,156,771.40 | |
Accounts payable | 217,330,371.42 | 282,934,452.33 | |
Advance from customers | |||
Contract liabilities | 68,099,041.17 | 28,108,787.35 | |
Employee compensation payable | 58,246,111.22 | 33,926,736.55 | |
Taxes payable | 69,952,710.78 | 66,893,331.24 | |
Other payables | 167,125,433.78 | 8,546,397.66 | |
Including: Interest payable | |||
Dividends payable | |||
Held-for-sale liabilities | |||
Non-current liabilities due within one year | 2,210,449.03 | ||
Other current liabilities | |||
Total current liabilities | 852,786,359.93 | 699,817,983.38 | |
Non-current liabilities: |
Long-term borrowings | |||
Bonds payable | 724,491,557.93 | 695,586,778.80 | |
Including: Preferred stock | |||
Perpetual bonds | |||
Lease liabilities | 3,354,028.30 | ||
Long-term payables | |||
Long-term employee compensation payable | |||
Provisions | |||
Deferred income | 6,399,811.33 | 6,416,263.33 | |
Deferred income tax liabilities | 18,758,960.23 | 8,395,198.23 | |
Other non-current liabilities | |||
Total non-current liabilities | 753,004,357.79 | 710,398,240.36 | |
Total liabilities | 1,605,790,717.72 | 1,410,216,223.74 | |
Owners' equity (or shareholders' equity): | |||
Paid-in capital (or share capital) | 283,519,469.00 | 201,009,966.00 | |
Other equity instruments | 50,903,510.12 | 50,956,622.11 | |
Including: Preferred stock | |||
Perpetual bonds | |||
Capital reserve | 964,613,342.84 | 834,563,920.32 | |
Less: Treasury shares | 164,976,000.00 | 5,628,128.21 | |
Other comprehensive income | |||
Special reserve | |||
Surplus reserve | 141,759,734.50 | 100,634,780.00 | |
Retained profits | 2,001,098,149.06 | 1,543,745,041.48 | |
Total owners' equity (or shareholders' equity) | 3,276,918,205.52 | 2,725,282,201.70 | |
Total liabilities and owners' equity (or shareholders' equity) | 4,882,708,923.24 | 4,135,498,425.44 | |
The chairman of the Company: HOU Juncheng | CFO of the Company: WANG Li | Person in charge of Accounting Department: WANG Li |
Consolidated Income StatementJanuary - December 2022
Unit: Yuan Currency: RMB
Item | Notes | 2022 | 2021 |
I. Total operating revenue | VII. 61 | 6,385,451,424.00 | 4,633,150,538.43 |
Including: Operating revenue | VII. 61 | 6,385,451,424.00 | 4,633,150,538.43 |
Interest income | |||
Premiums earned | |||
Fee and commission income | |||
II. Total operating costs | 5,191,391,396.39 | 3,892,457,794.07 | |
Including: Operating costs | VII. 61 | 1,934,850,203.65 | 1,554,155,646.61 |
Interest expenses | |||
Fee and commission expenses | |||
Surrenders | |||
Claims and policyholder benefits (net of amounts recoverable from reinsurers) | |||
Net provision for insurance liability reserves | |||
Insurance policyholder dividends | |||
Expenses for reinsurance accepted | |||
Taxes and surcharges | VII. 62 | 56,394,508.94 | 40,680,295.80 |
Selling expenses | VII. 63 | 2,785,837,352.95 | 1,991,534,076.73 |
General and administrative expenses | VII. 64 | 327,296,749.37 | 236,988,519.23 |
Research and development expenses | VII. 65 | 128,009,104.49 | 76,583,650.83 |
Financial expenses | VII. 66 | -40,996,523.01 | -7,484,395.13 |
Including: Interest expenses | 13,019,503.91 | 9,759,260.83 | |
Interest income | 51,707,124.62 | 28,096,157.42 | |
Add: Other income | VII. 67 | 39,065,105.62 | 16,458,269.45 |
Investment income ("-" refers to loss) | VII. 68 | -5,658,023.28 | -7,337,735.84 |
Including: Income from investments in associates and joint ventures | -5,658,023.28 | -7,337,735.84 | |
Income from derecognition of financial assets measured at amortized cost | |||
Foreign exchange gains ("-" refers to loss) | |||
Net gain on exposure hedging ("-" refers to loss) | |||
Gains on changes in fair value ("-" refers to loss) | |||
Credit impairment loss ("-" refers to loss) | VII. 71 | -5,057,425.43 | -24,834,947.18 |
Asset impairment losses ("-" refers to losses) | VII. 72 | -164,884,555.28 | -53,513,590.04 |
Gains from disposal of assets ("-" refers to loss) | VII. 73 | 60,155.60 | -112,183.24 |
III. Operating profit ("-" refers to loss) | 1,057,585,284.84 | 671,352,557.51 | |
Add: Non-operating revenue | VII. 74 | 1,178,886.33 | 249,852.89 |
Less: Non-operating expenses | VII. 75 | 4,613,645.24 | 3,801,835.06 |
IV. Total profits ("-" refers to total losses) | 1,054,150,525.93 | 667,800,575.34 | |
Less: Income tax expenses | VII. 76 | 222,866,719.56 | 110,746,888.31 |
V. Net profits ("-" refers to net losses) | 831,283,806.37 | 557,053,687.03 | |
(I) Classified by the nature of continuing operations | |||
1. Net profits from continuing operations ("-" refers to net losses) | 831,283,806.37 | 557,053,687.03 | |
2. Net profits from discontinued operations ("-" refers to net losses) | |||
(II) Classified by ownership | |||
1. Net profits attributable to shareholders of the parent company ("-" refers to net losses) | 817,400,223.93 | 576,119,025.56 | |
2. Profits or losses attributable to minority interests ("-" refers to net losses) | 13,883,582.44 | -19,065,338.53 | |
VI. Other comprehensive income, net of tax | -670,928.97 | -978,607.97 | |
(I) Other comprehensive income attributable to owners of the parent company, net of tax | -670,928.97 | -978,607.97 | |
1. Other comprehensive income that cannot be reclassified to profit or loss | |||
(1) Changes arising from the re-measurement of net liabilities or net assets of defined benefit plans | |||
(2) Other comprehensive income that cannot be reclassified to profit or loss under the equity method | |||
(3) Changes in fair value of other equity instrument investments | |||
(4) Changes in fair value of enterprises' own credit risks |
2. Other comprehensive income that will be reclassified into profit or loss | -670,928.97 | -978,607.97 | |
(1) Other comprehensive income that will be reclassified to profit or loss under the equity method | |||
(2) Changes in fair value of other debt investments | |||
(3) Amounts of financial assets reclassified into other comprehensive income | |||
(4) Provision for credit impairment of other debt investments | |||
(5) Reserve for cash flow hedges | |||
(6) Translation differences of financial statements denominated in foreign currencies | -670,928.97 | -978,607.97 | |
(7) Others | |||
(II) Other comprehensive income attributable to minority interests, net of tax | |||
VII. Total comprehensive income | 830,612,877.40 | 556,075,079.06 | |
(I) Total comprehensive income attributable to owners of the parent company | 816,729,294.96 | 575,140,417.59 | |
(II) Total comprehensive income attributable to minority interests | 13,883,582.44 | -19,065,338.53 | |
VIII. Earnings per share | |||
(I) Basic earnings per share (RMB/share) | 2.90 | 2.87 | |
(II) Diluted earnings per share (RMB/share) | 2.87 | 2.81 |
In case of business combination under common control, net profit realized by the combined party beforethe combination in the current period was RMB0.00; net profit realized by the combined in the previousperiod was RMB0.00.
The chairman of the Company: HOU Juncheng | CFO of the Company: WANG Li | Person in charge of Accounting Department: WANG Li |
Parent Company's Income Statement
January - December 2022
Unit: Yuan Currency: RMB
Item | Notes | 2022 | 2021 |
I. Operating revenue | XVII. 4 | 3,081,136,936.75 | 2,273,848,366.50 |
Less: Operating cost | XVII. 4 | 1,424,725,111.00 | 1,076,826,259.92 |
Taxes and surcharges | 24,372,917.75 | 19,398,763.14 | |
Selling expenses | 472,193,858.89 | 284,076,298.04 | |
General and administrative expenses | 218,455,156.75 | 200,860,543.73 | |
Research and development expenses | 132,656,295.93 | 80,793,699.46 | |
Financial expenses | -41,965,768.21 | -9,534,296.78 | |
Including: Interest expenses | 13,019,503.91 | 7,909,483.79 | |
Interest income | 42,503,905.91 | 23,839,106.03 | |
Add: Other income | 15,650,274.95 | 7,273,692.73 | |
Investment income ("-" refers to loss) | XVII. 5 | -4,161,437.71 | -18,567,432.77 |
Including: Income from investments in associates and joint ventures | -5,149,438.13 | -7,608,313.87 | |
Income from derecognition of financial assets measured at amortized cost | |||
Net gain on exposure hedging ("-" refers to loss) | |||
Gains on changes in fair value ("-" refers to loss) | |||
Credit impairment loss ("-" refers to loss) | 53,589,117.29 | 45,090,048.44 | |
Asset impairment losses ("-" refers to losses) | -126,987,703.77 | -25,486,816.12 | |
Gains from disposal of assets ("-" refers to loss) | 60,155.60 | ||
II. Operating profit ("-" refers to loss) | 788,849,771.00 | 629,736,591.27 | |
Add: Non-operating revenue | 22,010.99 | 25,856.69 | |
Less: Non-operating expenses | 1,516,181.13 | 3,739,409.87 | |
III. Total profits ("-" refers to total losses) | 787,355,600.86 | 626,023,038.09 | |
Less: Income tax expenses | 116,008,968.02 | 72,463,653.90 | |
IV. Net profits ("-" refers to net losses) | 671,346,632.84 | 553,559,384.19 | |
(I) Net profits from continuing activities ("-" refers to net losses) | 671,346,632.84 | 553,559,384.19 | |
(II) Net profits from discontinuing activities ("-" refers to net losses) | |||
V. Net amount of other comprehensive income after tax | |||
(I) Other comprehensive income that cannot be reclassified into profit or loss |
1. Changes arising from re-measurement of defined benefit plans | |||||
2. Other comprehensive income that cannot be reclassified to profit or loss under the equity method | |||||
3. Changes in the fair value of other equity instrument investments | |||||
4. Change in fair value of enterprise's own credit risk | |||||
(II) Other comprehensive income to be reclassified into profit or loss | |||||
1. Other comprehensive income that may be reclassified to profit or loss under equity method | |||||
2. Change in fair value of other debt investments | |||||
3. Amount included in other comprehensive income on reclassification of financial assets | |||||
4. Credit impairment provisions of other debt investments | |||||
5. Cash flow hedging reserve | |||||
6. Exchange differences from translation of financial statements | |||||
7. Others | |||||
VI. Total comprehensive income | 671,346,632.84 | 553,559,384.19 | |||
VII. Earnings per share: | |||||
(I) Basic earnings per share (RMB/share) | |||||
(II) Diluted earnings per share (RMB/share) | |||||
The chairman of the Company: HOU Juncheng | CFO of the Company: WANG Li | Person in charge of Accounting Department: WANG Li |
Consolidated Cash Flow Statement
January - December 2022
Unit: Yuan Currency: RMB
Item | Notes | 2022 | 2021 |
I. Cash flows from operating activities: | |||
Cash received from the sale of goods and the rendering of services | 7,088,465,997.21 | 5,130,176,845.31 | |
Net increase in customer deposits and deposits from banks and other financial institutions |
Net increase in loans from the central bank | |||
Net increase in taking from other financial institutions | |||
Cash received from premiums under original insurance contract | |||
Net cash received from reinsurance business | |||
Net cash received from policyholders' deposits and investment contract liabilities | |||
Cash received from interest, fees and commissions | |||
Net increase in taking from banks and other financial institutions | |||
Net increase in financial assets sold under repurchase arrangements | |||
Net cash received from securities trading agency | |||
Receipts of tax refunds | 80,005.56 | ||
Other cash received related to operating activities | VII. 78 (1) | 99,500,140.40 | 54,614,521.56 |
Sub-total of cash inflows from operating activities | 7,187,966,137.61 | 5,184,871,372.43 | |
Cash paid for goods purchased and services received | 2,241,842,834.78 | 1,616,390,215.85 | |
Net increase in loans and advances to customers | |||
Net increase in balance with the central bank and due from banks and other financial institution | |||
Cash paid for compensation payments under original insurance contract | |||
Net increase in loans to banks and other financial institutions | |||
Cash paid for interest, fees and commissions | |||
Cash paid for insurance policyholder dividends | |||
Cash paid to and on behalf of employees | 558,582,470.38 | 441,156,078.19 | |
Payments of various types of taxes | 660,096,624.31 | 432,668,333.55 | |
Other cash paid related to operating activities | VII. 78 (2) | 2,616,308,090.91 | 1,864,985,801.02 |
Sub-total of cash outflows from operating activities | 6,076,830,020.38 | 4,355,200,428.61 | |
Net cash flow from operating activities | 1,111,136,117.23 | 829,670,943.82 | |
II. Cash flows from investing activities: | |||
Cash received from disposal and recovery of investments | |||
Cash received from investment income | |||
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 3,751,463.96 | 47,622.98 | |
Net cash received from disposal of subsidiaries and other business entities | |||
Other cash received related to investing activities | |||
Sub-total of cash inflows from investing activities | 3,751,463.96 | 47,622.98 | |
Cash paid for acquisition or construction of fixed assets, intangible assets and other long-term assets | 170,963,405.43 | 194,102,666.70 | |
Cash paid for investments | 131,003,609.10 | 70,029,200.00 | |
Net increase in pledged loans receivables | |||
Net cash paid for acquiring subsidiaries and other operating entities | |||
Other cash paid related to investing activities | VII. 78 (4) | 77,739,374.88 | |
Sub-total of cash outflows from investing activities | 301,967,014.53 | 341,871,241.58 | |
Net cash flow from investing activities | -298,215,550.57 | -341,823,618.60 | |
III. Cash flows from financing activities: | |||
Cash received from capital contributions | 165,676,000.00 | 700,000.00 | |
Including: Cash received from capital contributions from minority shareholders of subsidiaries | 700,000.00 | 700,000.00 | |
Cash received from borrowings | 300,000,000.00 | 946,996,018.87 | |
Other cash received related to financing activities | |||
Sub-total of cash inflows from financing activities | 465,676,000.00 | 947,696,018.87 | |
Cash repayments of borrowings | 300,000,000.00 | 299,000,000.00 |
Cash paid for distribution of dividends or profits or settlement of interest expenses | 182,663,748.85 | 154,245,329.79 | |||
Including: Payments for distribution of dividends or profits to minority owners of subsidiaries | |||||
Other cash paid related to financing activities | VII. 78 (6) | 48,263,571.88 | 4,835,393.12 | ||
Sub-total of cash outflows from financing activities | 530,927,320.73 | 458,080,722.91 | |||
Net cash flow from financing activities | -65,251,320.73 | 489,615,295.96 | |||
IV. Impact of foreign exchange rate changes on cash and cash equivalents | -670,928.97 | -978,607.97 | |||
V. Net increase in cash and cash equivalents | 746,998,316.96 | 976,484,013.21 | |||
Add: Opening balance of cash and cash equivalents | 2,378,334,768.09 | 1,401,850,754.88 | |||
VI. Closing balance of cash and cash equivalents | 3,125,333,085.05 | 2,378,334,768.09 | |||
The chairman of the Company: HOU Juncheng | CFO of the Company: WANG Li | Person in charge of Accounting Department: WANG Li |
Parent Company's Cash Flow Statement
January - December 2022
Unit: Yuan Currency: RMB
Item | Notes | 2022 | 2021 |
I. Cash flows from operating activities: | |||
Cash received from the sale of goods and the rendering of services | 3,625,216,143.38 | 2,675,584,845.60 | |
Receipts of tax refunds | |||
Other cash received related to operating activities | 1,133,863,796.96 | 58,197,895.33 | |
Sub-total of cash inflows from operating activities | 4,759,079,940.34 | 2,733,782,740.93 | |
Cash paid for goods purchased and services received | 1,830,694,703.17 | 1,330,189,908.22 | |
Cash paid to and on behalf of employees | 265,940,955.35 | 180,867,131.86 | |
Payments of various types of taxes | 276,743,971.90 | 197,049,919.18 | |
Other cash paid related to operating activities | 595,570,988.89 | 380,848,687.45 | |
Sub-total of cash outflows from operating activities | 2,968,950,619.31 | 2,088,955,646.71 | |
Net cash flow from operating activities | 1,790,129,321.03 | 644,827,094.22 |
II. Cash flows from investing activities: | |||
Cash received from disposal and recovery of investments | 1,700,000.00 | ||
Cash received from investment income | |||
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 1,057,300.53 | ||
Net cash received from disposal of subsidiaries and other business entities | |||
Other cash received related to investing activities | 1,271,529,576.13 | 196,608,800.56 | |
Sub-total of cash inflows from investing activities | 1,274,286,876.66 | 196,608,800.56 | |
Cash paid for acquisition or construction of fixed assets, intangible assets and other long-term assets | 163,990,474.83 | 135,132,853.40 | |
Cash paid for investments | 179,238,922.10 | 36,338,783.21 | |
Net cash paid for acquisition of subsidiaries and other business units | |||
Other cash paid related to investing activities | 1,271,529,576.13 | 59,230,243.83 | |
Sub-total of cash outflows from investing activities | 1,614,758,973.06 | 230,701,880.44 | |
Net cash flow from investing activities | -340,472,096.40 | -34,093,079.88 | |
III. Cash flows from financing activities: | |||
Cash received from capital contributions | 164,976,000.00 | ||
Cash received from borrowings | 300,000,000.00 | 946,996,018.87 | |
Other cash received related to financing activities | |||
Sub-total of cash inflows from financing activities | 464,976,000.00 | 946,996,018.87 | |
Cash repayments of borrowings | 300,000,000.00 | 200,000,000.00 | |
Cash paid for distribution of dividends or profits or settlement of interest expenses | 182,663,957.72 | 152,530,597.10 | |
Other cash paid related to financing activities | 766,654.65 | 4,653,409.91 | |
Sub-total of cash outflows from financing activities | 483,430,612.37 | 357,184,007.01 | |
Net cash flow from financing activities | -18,454,612.37 | 589,812,011.86 | |
IV. Impact of foreign exchange rate changes on cash and cash equivalents | |||
V. Net increase in cash and cash equivalents | 1,431,202,612.26 | 1,200,546,026.20 | |
Add: Opening balance of cash and cash equivalents | 1,684,565,248.70 | 484,019,222.50 |
VI. Closing balance of cash and cash equivalents | 3,115,767,860.96 | 1,684,565,248.70 | ||||
The chairman of the Company: HOU Juncheng | CFO of the Company: WANG Li | Person in charge of Accounting Department: WANG Li |
Consolidated Statements of Changes in Owners' Equity
January - December 2022
Unit: Yuan Currency: RMB
Item | 2022 | ||||||||||||||
Equity attributable to owners of the parent company | Minority interests | Total equity attributable to owners | |||||||||||||
Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Retained profits | Other | Subtotal | |||||
Preference shares | Perpetual bonds | Other | |||||||||||||
I. Balance at the end of the previous year | 201,009,966.00 | 50,956,622.11 | 834,272,205.66 | 5,628,128.21 | -1,247,674.10 | 100,634,780.00 | 1,696,978,064.52 | 2,876,975,835.98 | 9,864,591.09 | 2,886,840,427.07 | |||||
Add: Changes in accounting policies | |||||||||||||||
Correction for previous errors | |||||||||||||||
Business combination under common control | |||||||||||||||
Other | |||||||||||||||
II. Balance at the beginning of the current year | 201,009,966.00 | 50,956,622.11 | 834,272,205.66 | 5,628,128.21 | -1,247,674.10 | 100,634,780.00 | 1,696,978,064.52 | 2,876,975,835.98 | 9,864,591.09 | 2,886,840,427.07 | |||||
III. Increase of the current period ("-" refers to decrease) | 82,509,503.00 | -53,111.99 | 80,543,580.56 | 159,347,871.79 | -670,928.97 | 41,124,954.50 | 603,406,698.67 | 647,512,823.98 | 2,870,079.24 | 650,382,903.22 | |||||
(I) Total comprehensive income | -670,928.97 | 817,400,223.93 | 816,729,294.96 | 13,883,582.44 | 830,612,877.40 |
(II) Owners' contribution and capital reduction | 2,105,517.00 | -53,111.99 | 210,987,934.75 | 159,347,871.79 | 53,692,467.97 | 700,000 | 54,392,467.96 | ||||||||
1. Ordinary shares contributed by the owners | 2,100,000.00 | 162,876,000.00 | 159,347,871.79 | 5,628,128.21 | 700,000 | 6,328,128.21 | |||||||||
2. Capital contributions by other equity instrument holders | |||||||||||||||
3. Amount of share-based payments credited to owners' equity | 47,357,121.25 | 47,357,121.25 | 47,357,121.24 | ||||||||||||
4. Other | 5,517.00 | -53,111.99 | 754,813.50 | 707,218.51 | 707,218.51 | ||||||||||
(III) Profit distribution | 41,124,954.50 | -213,993,525.26 | -172,868,570.76 | -172,868,570.76 | |||||||||||
1. Withdrawal of surplus reserve | 41,124,954.50 | -41,124,954.50 | |||||||||||||
2. Withdrawal of general risk provision | |||||||||||||||
3. Distribution to owners (or shareholders) | -172,868,570.76 | -172,868,570.76 | -172,868,570.76 | ||||||||||||
4. Other | |||||||||||||||
(IV) Internal carry-forward of owners' equity | 80,403,986.00 | -80,403,986.00 | |||||||||||||
1. Transfer of capital reserve to capital (or share capital) | 80,403,986.00 | -80,403,986.00 |
2. Transfer of surplus reserve to capital (or share capital) | |||||||||||||||
3. Surplus reserve to cover loss | |||||||||||||||
4. Changes in defined benefit scheme carried forward to retained earnings | |||||||||||||||
5. Carry-forward of other comprehensive income to retained earnings | |||||||||||||||
6. Other | |||||||||||||||
(V) Special reserve | |||||||||||||||
1. Withdrawal for the period | |||||||||||||||
2. Utilization for the period | |||||||||||||||
(VI) Others | -50,040,368.19 | -50,040,368.19 | -11,713,503.20 | -61,753,871.38 | |||||||||||
IV. Balance at the end of the period | 283,519,469.00 | 50,903,510.12 | 914,815,786.22 | 164,976,000.00 | -1,918,603.07 | 141,759,734.50 | 2,300,384,763.19 | 3,524,488,659.96 | 12,734,670.33 | 3,537,223,330.29 |
Item | 2021 | ||||||||||
Equity attributable to owners of the parent company | Minority interests | Total equity attributable to owners | |||||||||
Other equity instruments | Capital reserve | Surplus reserve | Retained profits | Other | Subtotal |
Paid-in capital (or share capital) | Preference shares | Perpetual bonds | Other | Less: Treasury shares | Other comprehensive income | Special reserve | General risk reserve | ||||||||
I. Balance at the end of the previous year | 201,116,925.00 | 837,034,836.69 | 12,653,905.25 | -269,066.13 | 100,634,780.00 | 1,265,671,865.63 | 2,391,535,435.94 | 90,326,830.19 | 2,481,862,266.13 | ||||||
Add: Changes in accounting policies | |||||||||||||||
Correction for previous errors | |||||||||||||||
Business combination under common control | |||||||||||||||
Other | |||||||||||||||
II. Balance at the beginning of the year | 201,116,925.00 | 837,034,836.69 | 12,653,905.25 | -269,066.13 | 100,634,780.00 | 1,265,671,865.63 | 2,391,535,435.94 | 90,326,830.19 | 2,481,862,266.13 | ||||||
III. Increase of the current period ("-" refers to decrease) | -106,959.00 | 50,956,622.11 | -2,762,631.03 | -7,025,777.04 | -978,607.97 | 431,306,198.89 | 485,440,400.04 | -80,462,239.10 | 404,978,160.94 | ||||||
(I) Total comprehensive income | -978,607.97 | 576,119,025.56 | 575,140,417.59 | -19,065,338.53 | 556,075,079.06 | ||||||||||
(II) Owners' contribution and capital reduction | -106,959.00 | -1,999,494.15 | -7,025,777.04 | 4,919,323.89 | 700,000.00 | 5,619,323.89 | |||||||||
1. Ordinary shares contributed by the owners | -106,959.00 | -1,626,846.39 | -7,025,777.04 | 5,291,971.65 | 700,000.00 | 5,991,971.65 | |||||||||
2. Capital contributions by other equity |
instrument holders | |||||||||||||||
3. Amount of share-based payments credited to owners' equity | -372,647.76 | -372,647.76 | -372,647.76 | ||||||||||||
4. Other | |||||||||||||||
(III) Profit distribution | -144,804,186.00 | -144,804,186.00 | -144,804,186.00 | ||||||||||||
1. Withdrawal of surplus reserve | |||||||||||||||
2. Withdrawal of general risk provision | |||||||||||||||
3. Distribution to owners (or shareholders) | -144,804,186.00 | -144,804,186.00 | -144,804,186.00 | ||||||||||||
4. Other | |||||||||||||||
(IV) Internal carry-forward of owners' equity | |||||||||||||||
1. Transfer of capital reserve to capital (or share capital) | |||||||||||||||
2. Transfer of surplus reserve to capital (or share capital) | |||||||||||||||
3. Surplus reserve to cover loss | |||||||||||||||
4. Changes in defined benefit scheme carried forward to retained |
earnings | |||||||||||||||
5. Carry-forward of other comprehensive income to retained earnings | |||||||||||||||
6. Other | |||||||||||||||
(V) Special reserve | |||||||||||||||
1. Withdrawal for the period | |||||||||||||||
2. Utilization for the period | |||||||||||||||
(VI) Others | 50,956,622.11 | -763,136.88 | -8,640.67 | 50,184,844.56 | -62,096,900.57 | -11,912,056.01 | |||||||||
IV. Balance at the end of the period | 201,009,966.00 | 50,956,622.11 | 834,272,205.66 | 5,628,128.21 | -1,247,674.10 | 100,634,780.00 | 1,696,978,064.52 | 2,876,975,835.98 | 9,864,591.09 | 2,886,840,427.07 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li Person in charge of Accounting Department: WANG Li
Parent Company's Statement of Changes in Owners' Equity
January - December 2022
Unit: Yuan Currency: RMB
Item | 2022 | ||||||||||
Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained profits | Total equity attributable to owners | |||
Preference shares | Perpetual bonds | Other | |||||||||
I. Balance at the end of the previous year | 201,009,966.00 | 50,956,622.11 | 834,563,920.32 | 5,628,128.21 | 100,634,780.00 | 1,543,745,041.48 | 2,725,282,201.70 | ||||
Add: Changes in accounting policies |
Correction for previous errors | |||||||||||
Other | |||||||||||
II. Balance at the beginning of the year | 201,009,966.00 | 50,956,622.11 | 834,563,920.32 | 5,628,128.21 | 100,634,780.00 | 1,543,745,041.48 | 2,725,282,201.70 | ||||
III. Increase of the current period ("-" refers to decrease) | 82,509,503.00 | -53,111.99 | 130,049,422.52 | 159,347,871.79 | 41,124,954.50 | 457,353,107.58 | 551,636,003.82 | ||||
(I) Total comprehensive income | 671,346,632.84 | 671,346,632.84 | |||||||||
(II) Owners' contribution and capital reduction | 2,105,517.00 | -53,111.99 | 210,987,934.74 | 159,347,871.79 | 53,692,467.96 | ||||||
1. Ordinary shares contributed by the owners | 2,100,000.00 | 162,876,000.00 | 159,347,871.79 | 5,628,128.21 | |||||||
2. Capital contributions by other equity instrument holders | |||||||||||
3. Amount of share-based payments credited to owners' equity | 47,357,121.24 | 47,357,121.24 |
4. Other | 5,517.00 | -53,111.99 | 754,813.50 | 707,218.51 | |||||||
(III) Profit distribution | 41,124,954.50 | -213,993,525.26 | -172,868,570.76 | ||||||||
1. Withdrawal of surplus reserve | 41,124,954.50 | -41,124,954.50 | |||||||||
2. Distribution to owners (or shareholders) | -172,868,570.76 | -172,868,570.76 | |||||||||
3. Other | |||||||||||
(IV) Internal carry-forward of owners' equity | 80,403,986.00 | -80,403,986.00 | |||||||||
1. Transfer of capital reserve to capital (or share capital) | 80,403,986.00 | -80,403,986.00 | |||||||||
2. Transfer of surplus reserve to capital (or share capital) | |||||||||||
3. Surplus reserve to cover loss | |||||||||||
4. Changes in defined benefit scheme carried forward to retained earnings | |||||||||||
5. Carry-forward of other |
comprehensive income to retained earnings | |||||||||||
6. Other | |||||||||||
(V) Special reserve | |||||||||||
1. Withdrawal for the period | |||||||||||
2. Utilization for the period | |||||||||||
(VI) Others | -534,526.22 | -534,526.22 | |||||||||
IV. Balance at the end of the period | 283,519,469.00 | 50,903,510.12 | 964,613,342.84 | 164,976,000.00 | 141,759,734.50 | 2,001,098,149.06 | 3,276,918,205.52 |
Item | 2021 | ||||||||||
Paid-up capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Retained profits | Total equity attributable to owners | |||
Preference shares | Perpetual bonds | Other | |||||||||
I. Balance at the end of the previous year | 201,116,925.00 | 837,075,425.32 | 12,653,905.25 | 100,634,780.00 | 1,134,989,843.29 | 2,261,163,068.36 | |||||
Add: Changes in accounting policies | |||||||||||
Correction for previous errors | |||||||||||
Other |
II. Balance at the beginning of the current year | 201,116,925.00 | 837,075,425.32 | 12,653,905.25 | 100,634,780.00 | 1,134,989,843.29 | 2,261,163,068.36 | |||||
III. Increase of the current period ("-" refers to decrease) | -106,959.00 | 50,956,622.11 | -2,511,505.00 | -7,025,777.04 | 408,755,198.19 | 464,119,133.34 | |||||
(I) Total comprehensive income | 553,559,384.19 | 553,559,384.19 | |||||||||
(II) Owners' contribution and capital reduction | -106,959.00 | -1,999,494.15 | -7,025,777.04 | 4,919,323.89 | |||||||
1. Ordinary shares contributed by the owners | -106,959.00 | -1,626,846.39 | -7,025,777.04 | 5,291,971.65 | |||||||
2. Capital contributions by other equity instrument holders | |||||||||||
3. Amount of share-based payments credited to owners' equity | -372,647.76 | -372,647.76 | |||||||||
4. Other | |||||||||||
(III) Profit distribution | -144,804,186.00 | -144,804,186.00 |
1. Withdrawal of surplus reserve | |||||||||||
2. Distribution to owners (or shareholders) | -144,804,186.00 | -144,804,186.00 | |||||||||
3. Other | |||||||||||
(IV) Internal carry-forward of owners' equity | |||||||||||
1. Transfer of capital reserve to capital (or share capital) | |||||||||||
2. Transfer of surplus reserve to capital (or share capital) | |||||||||||
3. Surplus reserve to cover loss | |||||||||||
4. Changes in defined benefit scheme carried forward to retained earnings | |||||||||||
5. Carry-forward of other comprehensive income to |
retained earnings | |||||||||||
6. Other | |||||||||||
(V) Special reserve | |||||||||||
1. Withdrawal for the period | |||||||||||
2. Utilization for the period | |||||||||||
(VI) Others | 50,956,622.11 | -512,010.85 | 50,444,611.26 | ||||||||
IV. Balance at the end of the period | 201,009,966.00 | 50,956,622.11 | 834,563,920.32 | 5,628,128.21 | 100,634,780.00 | 1,543,745,041.48 | 2,725,282,201.70 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li Person in charge of Accounting Department: WANG Li
III. General Information about the Company
1. Company profile
√ Applicable □ Not applicable
Proya Cosmetics Co., Ltd. (hereinafter referred to as "Company" or the "Company"), formerly known asProya (Huzhou) Cosmetics Co., Ltd., was registered in Wuxing Branch of Huzhou MunicipalAdministration for Industry and Commerce on May 24, 2006. Headquartered in Hangzhou, Zhejiang, theCompany now holds the business license with the unified social credit code of 91330100789665033F.Currently, the Company's registered capital is RMB283,513,952.00, and the paid-in capital isRMB283,519,469.00 (the paid-in capital is RMB5,517.00 higher than the registered capital due to theconversion of convertible bonds without industrial and commercial change registration). The total numberof shares converted is 283,519,469 (with a par value of 1.00 RMB/per share), including 2,100,000restricted circulating A shares and 281,419,469 unrestricted circulating A shares. which were listed fortrading on SSE on November 15, 2017.The Company is a beauty and personal care company mainly engaged in cosmetics research anddevelopment, production, and sales. The Company's main products are cosmetics.The financial statements were approved for external disclosure by the 11th meeting of the third session ofthe Board of Directors of the Company on April 19, 2023.
2. Scope of consolidated financial statements
√ Applicable □ Not applicable
The Company has incorporated 47 subsidiaries, including Hangzhou Proya Trade Co., Ltd., Anya (Huzhou)Cosmetics Co., Ltd., Zhejiang Meiligu Electronic Commerce Co., Ltd., Huzhou Chuangdai E-commerceCo., Ltd., Yueqing Laiya Trading Co., Ltd. and Hapsode (Hangzhou) Cosmetics Co., Ltd., into theconsolidated financial statements of the reporting period. For details, refer to the particulars contained innotes "VIII. Change of Consolidation Scope" and "IX. Equity in Other Entities" in this report.
IV. Preparation Basis of Financial Statements
1. Preparation basis
The financial statements of the Company are prepared based on going concern.
2. Going concern
√ Applicable □ Not applicable
There are no matters or situations that may substantially affect the Company's ability to continue as agoing concern within 12 months since the end of the Reporting Period.
V. Significant Accounting Policies and EstimatesNotes to specific accounting policies and accounting estimates:
√ Applicable □ Not applicable
Refer to "44. Changes in Significant Accounting Policies and Estimates" in "V. Significant AccountingPolicies and Estimates" of "Section X Financial Report" for details.
1. Statement of compliance of accounting standards for business enterprisesThe financial statements have been prepared by the Company in conformity with the China Accounting
Standards for Business Enterprises, and present truly and completely the Company's financial position,operating performance, changes in shareholders' equity, cash flow and other related information.
2. Accounting period
The accounting period of the Company is from January 1 to December 31 of each calendar year.
3. Operating cycle
√ Applicable □ Not applicable
The operating cycle of the Company's businesses is short; the Company adopts 12 months as the liquidityclassification criteria for assets and liabilities.
4. Functional currency
The functional currency of the Company is RMB. Overseas subsidiaries including Hapsode Co., Ltd.,Hanna Cosmetics Co., Ltd., Korea Younimi Cosmetics Co., Ltd. and O&R Co., Ltd. adopt the currency intheir major econonmic environment of operation as their function currency.
5. Accounting treatment of business combination under or not under common control
√ Applicable □ Not applicable
1. Accounting treatments for business combination under common control
The assets and liabilities acquired by the Company through business combination are measured at thecarrying value of the combined party in the consolidated financial statements of the ultimate controllingparty at the combination date. The Company adjusts the capital reserve in accordance with the differencebetween the carrying value share of the owners' equity of the combined party in the consolidated financialstatements of the ultimate controlling party and the carrying value of the consideration paid for thebusiness combination or the total nominal value of the issued shares. If the capital reserve is not sufficientto offset the difference, the retained earnings will be adjusted.
2. Accounting treatments for business combination not under common control
The difference by which the cost of combination is greater than the fair value of the net identifiable assetsof the acquiree is recognized by the Company as goodwill on the acquisition date; the difference by whichthe combination cost is less than the fair value share of the net identifiable assets of the acquiree is recordedinto the profit or loss after the re-check of the measurement of the fair value of identifiable assets, liabilitiesor contingent liabilities acquired from the acquiree, and the combination cost.
6. Preparation of consolidated financial statements
√ Applicable □ Not applicable
1. The parent company incorporates all subsidiaries under its control into the consolidated financialstatements. The consolidated financial statements are based on the financial statements of the parentcompany and its subsidiaries, and prepared by the parent company in accordance with the AccountingStandards for Business Enterprises No. 33 - Consolidated Financial Statements.
2. Accounting treatment methods for buying and then selling, or selling and then buying the equity of thesame subsidiary in two consecutive fiscal yearsThe acquisition of the equity of the acquiree is to control its operating and financial policies and to obtainlong-term benefits from its operating activities. After the right to control the acquiree is acquired, theacquiree is included in the consolidation scope of the consolidated financial statements. Due to changes
in the Company's business plans and arrangements, if the equity of the acquiree is disposed of in the secondfiscal year to the point of losing control over it, the acquiree will be excluded from the consolidation scopeof the consolidated financial statements when the control is lost.
7. Classification of joint arrangement and accounting treatment of joint operation
√ Applicable □ Not applicable
1. Joint arrangement can be divided into joint operation and joint venture.
2. When the Company is a joint party of a joint operation, the Company recognizes the following itemsrelated to the share of interests in the joint operation:
(1) Assets solely held, and assets jointly held on proportion;
(2) Liabilities solely undertaken, and liabilities jointly undertaken on proportion;
(3) Income generated from selling the Company's output share of the joint operation;
(4) Income of the joint operation generated from selling assets according to the Company's holding share;
(5) Cost incurred alone, and cost incurred from the joint operation on proportion;
8. Determination of cash and cash equivalents
Cash presented in the cash flow statement refers to cash on hand and deposits that can be used for paymentat any time. Cash equivalents refer to the short-term (generally the expiration is within three months fromthe date of purchase) and highly liquid investments that are readily convertible to known amounts of cashand subject to an insignificant risk of change in value.
9. Foreign currency transactions and translation of foreign-currency statements
√ Applicable □ Not applicable
1. Translation of foreign currency transactions
Foreign currency transactions are translated into RMB at the approximate rate of spot rate on thetransaction date during initial recognition. On the balance sheet date, the foreign-currency monetary itemsare calculated based on the spot rate on the same date. The exchange difference arising from the differentexchange rates is included in the current profit or loss, except the exchange difference between theprincipal and interest of the foreign currency loans specially borrowed for the purchase and constructionof assets eligible for capitalization. The foreign currency non-monetary items measured at historical costare still translated based on the approximate rate of the spot rate on the transaction date, and the RMBamount is not changed. The foreign currency non-monetary items measured at fair value are translatedbased on the spot rate on the determination date of the fair value, and the difference is included in thecurrent profit or loss or other comprehensive income.
2. Translation of foreign-currency financial statements
Assets and liabilities items in the balance sheet are translated at the spot rates prevailing at the balancesheet date. Owners' equity items other than "undistributed profits" are translated at the spot rates on thetransaction dates. Income and expense items in the income statement are translated at the approximaterates of the spot rates on the transaction dates. Any balance incurred from the translation of foreign-currency financial statements by the above method is included in other comprehensive income.
10. Financial instruments
√ Applicable □ Not applicable
1. Classification of financial assets and liabilities
Financial assets are classified into the following three categories at initial recognition: (1) financial assetsmeasured at amortized cost; (2) financial assets measured at fair value through other comprehensiveincome; (3) financial assets measured at fair value through profit or loss.Financial liabilities are classified into the following four categories at initial recognition: (1) financialliabilities measured at fair value through profit or loss; (2) financial liabilities arise when a transfer of afinancial asset does not qualify for derecognition or that are accounted for using the continuing-involvement method; (3) loan commitments not belonging to the financial guarantee contracts mentionedin item (1) or (2) above and those not belonging to item (1) above and given at a rate lower than marketinterest rate; (4) financial liabilities measured at amortized cost.
2. Recognition basis, measurement method and derecognition conditions for financial assets and liabilities
(1) Recognition basis and initial measurement method for financial assets and liabilitiesA financial asset or liability is recognized when the Company becomes a party to a financial instrumentcontract. Financial assets and liabilities are measured at the fair value at initial recognition. For financialassets and liabilities measured at fair value through profit or loss, relevant transaction expenses are directlyincluded in the current profit or loss; for other categories of financial assets or liabilities, relevanttransaction costs are recognized as expenses at initial recognition. However, where the accounts receivableinitially recognized by the Company do not contain a significant financing component or the Companydoes not consider the financing component in the contract of less than one year, the initial measurementis made according to the transaction price defined in the Accounting Standards for Business EnterprisesNo. 14 – Revenue.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
Such financial assets are subsequently measured at amortized cost using the effective interest method. Thegains and losses incurred by the financial assets measured at amortized cost but not belonging to anyhedging relationship are included in the current profit or loss during derecognition, reclassification,amortization according to the effective interest method or impairment recognition.
2) Debt instrument investments measured at fair value through other comprehensive incomeThey are subsequently measured at fair value. The interest, impairment losses or gains and exchange gainsor losses calculated with the effective interest method are included in the current profit or loss, and othergains or losses are included in other comprehensive income. At derecognition, the gains or lossesaccumulated previously through comprehensive income are transferred from other comprehensive incomeand included into the current profit or loss.
3) Equity instrument investments measured at fair value through other comprehensive incomeThey are subsequently measured at fair value. The dividends obtained (except for the part from investmentcost recovery) are included in the current profit or loss, and other gains or losses are included in othercomprehensive income. At derecognition, the gains or losses accumulated previously through othercomprehensive income are transferred from other comprehensive income and included into retainedearnings.
4) Financial assets measured at fair value with changes included in the current profit or lossThey are subsequently measured at fair value. The generated gains or losses (including interest anddividend income) are included in the current profit or loss, unless the financial assets belong to part of thehedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities measured at fair value through profit or loss
Such financial liabilities include held-for-trading financial liabilities (including derivative instrumentsbelonging to financial liabilities) and those designated as financial liabilities measured at fair value through
profit or loss. Such financial liabilities are subsequently measured at fair value. Changes in the fair valueof financial liabilities measured at fair value through profit or loss due to changes in the Company's owncredit risk are included in other comprehensive income, unless the treatment will cause or enlarge theaccounting mismatch in the profit or loss. Other gains or losses (including interest, except changes in thefair value arising from the Company's own credit risk) are included in the current profit or loss, unless thefinancial liabilities belong to part of the hedging relationship. At derecognition, the gains or lossesaccumulated previously through other comprehensive income are transferred from other comprehensiveincome and included into retained earnings.
2) Financial liabilities from failure of transfer of financial assets to meet the derecognition conditions orcontinued involvement in transferred financial assetsThey are measured in accordance with the Accounting Standards for Business Enterprises No. 23 -Transfer of Financial Assets.
3) Loan commitments not belonging to the financial guarantee contracts mentioned in item 1) or 2) aboveand those not belonging to item 1) above and given at a rate lower than market interest rateThey are subsequently measured at the higher one of the following two amounts, after initial recognition:
① loss provisions determined according to regulations on impairment of financial instruments; ②balance of the initially recognized amount after deducting cumulative amortization recognized inaccordance with the regulations set out in the Accounting Standards for Business Enterprises No. 14 –Revenue.
4) Financial liabilities measured at amortized cost
They are measured at amortized cost using the effective interest method. The gains and losses incurred bythe financial liabilities measured at amortized cost but not belonging to any hedging relationship areincluded in the current profit or loss during derecognition or amortization according to the effective interestmethod.
(4) Derecognition of financial assets and liabilities
1) Financial assets are derecognized when any one of the following conditions is satisfied:
① The contract right to collect cash flow from the financial assets has terminated;
② The financial assets have been transferred and such transfer satisfies the provisions for derecognitionof financial assets in the Accounting Standards for Business Enterprises No. 23 - Transfer of FinancialAssets.
2) When the present obligations under the financial liabilities (or part thereof) are released, such financialliabilities (or that part thereof) are derecognized.
3. Recognition basis and measurement of transfer of financial assets
If the Company has transferred almost all the risks and rewards related to the ownership of financial assets,the financial assets are derecognized, and the rights and obligations resulting from or retained in thetransfer are separately recognized as the assets or liabilities. In case that almost all the risks and rewardsrelated to the ownership of the financial assets are retained, the recognition of the transferred financialassets is continued. In case that almost all the risks and rewards related to the ownership of the financialassets are neither transferred nor retained, disposal shall apply depending on the following circumstances:
(1) if the control over the financial assets is not retained, the financial assets shall be derecognized, andthe rights and obligations resulting from or retained in the transfer are separately recognized as the assetsor liabilities; (2) if the control over the financial assets is retained, the relevant financial assets arerecognized according to the degree of continued involvement in the transferred financial assets, and therelevant liabilities are recognized accordingly.If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between
the two amounts below shall be included in the current profit or loss: (1) Carrying value of the transferredfinancial assets at the date of derecognition; (2) The sum of consideration received for the transfer offinancial asset, plus the corresponding derecognized portion of accumulated change in fair valuepreviously included in other comprehensive income (in cases where the transferred financial asset is debtinstrument investment measured at fair value with changes included in other comprehensive income). Ifpart of the financial assets is transferred and the transfer satisfies the conditions for derecognition, theoverall carrying value before the transfer of financial assets is apportioned according to their respectiverelative fair value at the transfer date between the portion of derecognized part and the remaining part, andthe difference between the two amounts below is included in the current profit or loss: (1) carrying valueof the derecognized part; (2) the sum of consideration for the derecognized part, plus the correspondingderecognized part of accumulated change in fair value previously included in other comprehensive income(in cases where the transferred financial assets are debt instrument investment measured at fair value withchanges included in other comprehensive income).
4. Determination of the fair value of financial assets and liabilities
The Company adopts valuation techniques appropriate to the prevailing circumstances with the support ofsufficient data and other information available, to determine the fair value of relevant financial assets andliabilities. The Company divides the inputs for the estimation technique into the following levels and usesthem in turn:
(1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that theCompany can access at the measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable, eitherdirectly or indirectly, including: the quotation of similar assets or liabilities in an active market; thequotation of the identical or similar assets or liabilities in an inactive market; other observable inputs otherthan the quotation, such as the interest rate and yield curves that can be observed during the normalquotation intervals; and the market validation inputs;
(3) Level 3 inputs are unobservable inputs of related assets or liabilities, including the interest rate, stockvolatility, future cash flow of retirement obligations borne during the business combination, and financialforecasts made based on its own data, which cannot be observed directly or cannot be verified accordingto observable market data.
5. Impairment of financial instruments
(1) Impairment measurement and accounting treatment of financial instruments
Based on the expected credit loss, the Company carries out accounting treatment for impairment andrecognizes the loss provision for the financial assets measured at amortized cost, the debt instrumentinvestment measured at fair value through other comprehensive income, contract assets, lease receivables,the loan commitment other than financial liabilities measured at fair value through profit or loss, and thefinancial guarantee contracts of financial liabilities not measured at fair value through profit or loss orfinancial liabilities not from failure of transfer of financial assets to meet the derecognition conditions orcontinued involvement in transferred financial assets.Expected credit loss refers to the weighted average of credit losses of financial instruments weighted bythe risk of default. Credit loss refers to the balance between all contractual cash flows discounted accordingto the original effective interest rate and receivable under the contract by the Company and all cash flowsas expected, i.e. the present value of all cash shortages. The purchased or underlying financial assets ofthe Company with credit impairment incurred are discounted according to their effective interest ratesupon credit adjustment.
For the purchased or underlying financial assets with credit impairment incurred, only the accumulativechanges in the expected credit loss in the whole duration after initial recognition are recognized by theCompany as loss provisions on the balance sheet date.For the receivables and contract assets from transactions in accordance with the Accounting Standards forBusiness Enterprises No. 14 – Revenue, excluding significant financing components or withoutconsideration, by the Company, to the financing components in the contract of no more than one year, theCompany measures the loss provision according to the amount equal to the expected credit loss in thewhole duration by applying simplified measurement method.For the lease receivables as well as receivables and contract assets from transactions in accordance withthe Accounting Standards for Business Enterprises No. 14 – Revenue, including significant financingcomponents, the Company measures the loss provision according to the amount equal to the expectedcredit loss in the whole duration by applying simplified measurement method.For financial assets other than the above measurement methods, the Company shall, on each balance sheetdate, assess whether their credit risk has increased significantly since initial recognition. If the credit riskhas increased significantly since the initial recognition, the Company will measure the loss provision basedon the amount of expected credit loss in the whole duration; if the credit risk has not significantly increasedsince the initial recognition, the Company will measure the loss provision based on the amount of expectedcredit loss for the financial instruments in the next 12 months.The Company determines whether the credit risk of financial instruments has increased significantly sinceinitial recognition by utilizing the available, reasonable and well-grounded information, includingforward-looking information, and comparing the default risks of the financial instruments on the balancesheet date and on the initial recognition date.If the Company determines that the financial instruments bear a low credit risk on the balance sheet date,it assumes that the credit risk of the financial instruments has not increased significantly since initialrecognition.The Company evaluates the expected credit risk and measures the expected credit loss based on singlefinancial instrument or portfolio of financial instruments. When based on the portfolio of financialinstruments, the Company divides financial instruments into different portfolios on the basis of thecommon risk characteristics.The Company re-measures the expected credit loss on each balance sheet date, and the increased orreversed amount of the loss provision arising therefrom, as losses or gains from impairment, shall beincluded in the current profit or loss. For financial assets measured at amortized cost, the loss provisiondeducts the carrying value of the financial assets listed in the balance sheet; for the debt investmentmeasured at fair value with changes included in other comprehensive income, the Company recognizes itsloss provision in other comprehensive income without deducting the carrying value of the financial assets.
(2) Financial instruments of which expected credit risks are assessed by portfolio and expected creditlosses are measured with a three-stage model
Item | Basis for determining the portfolio | Method for measuring the expected credit loss |
Other receivables - account age portfolio | Account age | Calculating the expected credit loss by the default risk exposure and the expected credit loss rate in next 12 months or in the whole duration by referring to historical experience in credit |
loss and according to thecurrent situation and theforecast on future economicconditions.
(3) Receivables and contract assets with expected credit losses measured by portfolio with a simplifiedmeasurement method
1) Portfolio details and measurement of expected credit loss
Item | Basis for determining the portfolio | Method for measuring the expected credit loss |
Receivables financing - bank acceptance note | Bill type | Calculating the expected credit loss by the default risk exposure and the expected credit loss rate in the whole duration by referring to historical experience in credit loss and according to the current situation and the forecast on future economic conditions |
Accounts receivable - account age portfolio | Account age | Calculating the expected credit loss by preparing the comparison table between account age of accounts receivable and expected credit loss rate in the whole duration by referring to historical experience in credit loss and according to the current situation and the forecast on future economic conditions |
2) Accounts receivable - Comparison between account age of account age portfolio and expected creditloss rate in the whole duration
Account age | Accounts receivable Expected credit loss rate (%) |
Within 1 year (inclusive, same for below) | 5 |
1 - 2 years | 30 |
2 - 3 years | 50 |
Above 3 years | 100 |
6. Offset of financial assets and liabilities
Financial assets and liabilities are resented in the balance sheet respectively without offsetting. However,when the following conditions are met, the financial assets and liabilities are presented at the net amountafter mutual offset in the balance sheet: (1) the Company has the legal right of offsetting the recognizedamount and such legal right is currently executable; (2) the Company plans to settle by net amount orsimultaneously realize the financial assets and clear off the financial liabilities.When the financial assets that do not meet the derecognition conditions are transferred, the Company doesnot offset the transferred financial assets with the relevant liabilities.
11. Notes receivable
Determination and accounting treatment of the expected credit loss of notes receivable
□ Applicable √ Not applicable
12. Accounts receivable
Determination and accounting treatment of the expected credit loss of accounts receivable
√ Applicable □ Not applicable
Refer to "10. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" of this report.
13. Receivable financing
√ Applicable □ Not applicable
Refer to "10. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" of this report.
14. Other receivables
Determination and accounting treatment of the expected credit loss of other receivables
√ Applicable □ Not applicable
Refer to "10. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" of this report.
15. Inventories
√ Applicable □ Not applicable
1. Classification of inventories
Inventories include finished goods or commodities for sale in daily operations, goods in process duringthe production, materials consumed during production or rendering of service.
2. Valuation method for delivered inventories
Moving weighted average method is adopted for delivered inventories.
3. Basis for the determination of net realizable value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value, andprovision for devaluation of inventories is made if the cost of a single inventory is higher than its netrealizable value. The net realizable value of inventories directly for sale is determined by the amount ofthe estimated selling price after subtracting the estimated sales expenses and relevant taxes during thenormal production and operation; the net realizable value of inventories required to be processed isdetermined by the amount of the estimated selling price of the finished products after subtracting theestimated cost by the end of processing, the estimated sales expenses and relevant taxes during the normalproduction and operation. On the balance sheet date, the net realizable value is determined separately forthe two parts of the same inventory with or without contract price, and is compared with the relevant coststo separately determine the amount withdrawn or reversed for inventory falling price reserve.
4. Inventory system
The Company adopts a perpetual inventory system.
5. Amortization of low-value consumables and packaging
(1) Low-value consumables
Amortization is performed by the immediate write-off method.
(2) Packaging
Amortization is performed by the immediate write-off method.
16. Contract assets
(1). Recognition methods and standards of contract assets
√ Applicable □ Not applicable
The rights of the Company to collect consideration from the customer unconditionally (i.e. only dependingon time) are presented as receivables; the rights (depend on other factors than time) to collect considerationfor transferring goods to the customer are presented as contract assets.
(2). Determination and accounting treatment of the expected credit loss of contract assets
□ Applicable √ Not applicable
17. Held-for-sale assets
□ Applicable √ Not applicable
18. Debt investments
(1). Determination and accounting treatment of the expected credit loss of debt investments
□ Applicable √ Not applicable
19. Other debt investments
(1). Determination and accounting treatment of the expected credit loss of other debt investments
□ Applicable √ Not applicable
20. Long-term receivables
(1). Determination and accounting treatment of the expected credit loss of long-term receivables
□ Applicable √ Not applicable
21. Long-term equity investments
√ Applicable □ Not applicable
1. Joint control or significant influence criterion
Joint control is the contractually agreed sharing of control of an arrangement. It exists only when decisionsabout the relevant activities of the arrangement require the unanimous consent of the parties sharingcontrol. Significant influence refers to the power to participate in the decision-making process on thefinancial and operating policies of the investee, but not to control or impose joint control together withother parties over the formulation of these policies.
2. Determination of investment cost
(1) For a long-term equity investment obtained from a business combination under common control: wherethe combining party pays cash, transfers non-cash assets, bears debts or issues equity securities ascombination consideration, the initial investment cost is the share with reference to the carrying value of
the owners' equity of the combined party in the consolidated financial statements of the ultimatecontrolling party on the combination date. The difference between the initial investment cost of the long-term equity investment and the carrying value of the consideration paid for the business combination orthe total nominal value of the issued shares is adjusted to capital reserve. If the capital reserve is notsufficient to offset the difference, the retained earnings are adjusted.For a long-term equity investment obtained from a business combination under common control throughmultiple transactions by step, the Company judges whether the transactions are a "package deal". If yes,the transactions are subject to accounting treatment as one deal that has acquired control right. If no, theinitial investment cost is determined on the basis of the share with reference to the carrying value of thenet asset of the combined party in the consolidated financial statements of the ultimate controlling partyon the combination date. The difference between the initial investment cost of long-term equity investmentat the combination date and the sum of the carrying amount of long-term equity investment before businesscombination and the carrying value of newly paid consideration for additional shares acquired on thecombination date is adjusted to the capital reserve. If the capital reserve is not sufficient to be offset, theretained earnings are adjusted.
(2) For a long-term equity investment obtained from a business combination not under common control,the fair value of consideration paid for business combination is regarded as the initial investment cost onthe acquisition date.For the long-term equity investment achieved by the Company via a business combination not undercommon control through multiple transactions by step, the relevant accounting treatment is based onindividual financial statements or consolidated financial statements:
1) In the individual financial statements, the initial investment cost calculated with the cost method is thesum of the carrying value of the equity investment originally held and the newly increased investment cost.
2) In the consolidated financial statements, the item is determined based on whether the transactions are a"package deal". If yes, the transactions are subject to accounting treatment as one deal that has acquiredcontrol right. If no, the equity of the acquiree held before the acquisition date is re-measured at the fairvalue of the equity on the acquisition date, and the difference between the fair value and its carrying valueis included in the current investment income. If the equity of the acquiree held before the acquisition dateis related to other comprehensive income under the equity method, the other related comprehensiveincome is converted into the current income on the acquisition date, excluding the other comprehensiveincome derived from changes in net liabilities or assets due to re-measurement on defined benefit plansby the investee.
(3) For a long-term equity investment obtained by means other than business combination: If it is obtainedby cash, the initial investment cost is the actual payment; If it is obtained through issuing equity securities,the initial investment cost is the fair value of the issued equity securities. If it is obtained through debtrestructuring, the initial investment cost is determined based on the Accounting Standards for BusinessEnterprises No. 12 - Debt Restructuring. If it is obtained through the exchange of non-monetary assets,the initial investment cost is determined based on the Accounting Standards for Business Enterprises No.7 - Exchange of Non-monetary Assets.
3. Subsequent measurement and recognition of profit or loss
For a long-term equity investment controlled by the investee, the cost method is adopted for accounting.For a long-term equity investment in associates and joint ventures, the equity method is adopted foraccounting.
4. Treatment methods for loss of control upon a stepwise disposal of investment to subsidiaries throughmultiple transactions
(1) Individual financial statements
For disposal of equity, the difference between the carrying value and the consideration actually receivedis included in the current profit or loss. The accounting of remaining equity is completed by equity methodin case of significant influence on the investee or implementation of joint control with other parties.However, in case of no control, joint control or significant influence on the investee, the accounting ofremaining equity must comply with the relevant provisions of the Accounting Standards for BusinessEnterprises No.22 - Recognition and Measurement of Financial Instruments.
(2) Consolidated financial statement
1) Loss of control upon stepwise disposal of investment to subsidiaries through multiple transactions, notbelonging to a "package deal"Before the loss of control, the difference between the price of disposal and the subsidiary's net assetsentitled from the disposal of long-term equity investment cumulatively calculated from the acquisitiondate or the combination date, is adjusted to capital reserve (capital premium). If the capital premium isinsufficient to offset the difference, the retained earnings are adjusted.When the control over the original subsidiary is lost, the remaining equity is re-measured at fair value asat the date on which the control is lost. The difference between the sum of the consideration received fromequity disposal and the fair value of the remaining equity and the net assets of the original subsidiaryproportionate to the original shareholding accumulated from the date of acquisition or businesscombination is included in investment gains of the period during which the control is lost, and meanwhile,the goodwill is offset. Other comprehensive income related to the equity investment in the originalsubsidiary is transferred to investment gains of the period during which the control is lost.
2) Loss of control upon stepwise disposal of investment to subsidiaries through multiple transactions,belonging to a "package deal"All transactions are regarded as one transaction disposing the subsidiaries and losing the control right foraccounting treatment. However, the difference between the amount received each time for disposal beforethe control is lost and the net assets of such subsidiary corresponding to the disposal of investment isrecognized as other comprehensive income in the consolidated financial statements, and is transferred toprofit or loss of the period during which the control is lost upon loss of control.
22. Investment real estate
(1). In case of a cost measurement model:
Depreciation or amortization method
1. Investment real estate includes leased land use right, land use right held for transfer upon appreciation,and building leased-out.
2. Investment real estate is initially measured at cost and subsequently measured with the cost model, anddepreciated or amortized with the same method as that for fixed assets and intangible assets.
23. Fixed assets
(1). Conditions for recognition
√ Applicable □ Not applicable
Fixed assets are tangible assets that are held for use in the production or rendering of goods or services,for rental to others, or for administrative purposes, and have a service life of more than one accountingyear. The fixed assets are recognized when the following conditions are satisfied at the same time: theeconomic benefits are likely to inflow to the Company. The costs of such fixed assets can be measuredreliably.
(2). Depreciation method
√ Applicable □ Not applicable
Category | Depreciation method | Depreciation life (year) | Residual value | Annual depreciation rate |
Houses and buildings | Straight-line method | 10 or 30 | 5% | 9.50% or 3.17% |
General equipment | Straight-line method | 3 - 10 | 5% | 31.67%-9.50% |
Dedicated equipment | Straight-line method | 5 - 10 | 5% | 19.00%-9.50% |
Means of transportation | Straight-line method | 5 | 5% | 19.00% |
(3). Recognition basis, valuation and depreciation of fixed assets under financial lease
□ Applicable √ Not applicable
24. Construction in progress
√ Applicable □ Not applicable
1. Construction in progress is recognized when the following conditions are satisfied at the same time: theeconomic benefits are likely to inflow to the Company; the costs of such construction in progress can bemeasured reliably. Construction in progress is measured at the actual cost incurred to make the assets readyfor their intended use.
2. Construction in progress is transferred to fixed assets at the actual cost when it reaches the expectedcondition for service. When construction in progress has achieved serviceable conditions but finalsettlement has not been finished yet, it is first transferred to fixed assets as per estimated value. After finalsettlement is finished, the estimated value is adjusted based on actual cost, but the depreciated amount isnot adjusted.
25. Borrowing costs
√ Applicable □ Not applicable
1. Criteria for recognition of capitalized borrowing costs
Borrowing costs incurred by the Company, which are directly attributable to the purchase and constructionof assets eligible for capitalization, are capitalized and included in the costs of the related assets. Otherborrowing costs are recognized as expense in the period in which they incur and are included in the currentprofit or loss.
2. Capitalization period of borrowing costs
(1) Capitalization of borrowing costs begins when the following three conditions are fully satisfied: 1)expenditures for the assets have incurred; 2) borrowing costs have incurred; 3) acquisition and constructionor production that are necessary to enable the assets reach the intended usable or saleable conditions havecommenced.
(2) Where abnormal interruption of the assets eligible for capitalization occurs during the acquisition andconstruction or production process and such interruption has lasted for more than 3 consecutive months,the capitalization of borrowing costs is suspended; the borrowing costs during the interruption are
recognized as current expenses till resumption of purchasing or production of the assets.
(3) Capitalization of borrowing costs is suspended during periods in which the qualifying asset underacquisition and construction or production is ready for the intended use or sale.
3. Capitalization rate and amount of borrowing costs
In case of special borrowing for the acquisition and construction or production of assets meeting thecapitalization conditions, interest amount to be capitalized is recognized after deducting the bank interestsfor the unused portion or the investment income for temporary investment from the interest costs(including recognized depreciation or amortization of premium under effective interest method) actuallyincurred in the current period of specific borrowing; for general borrowing occupied for the acquisitionand construction or production of assets meeting the capitalization conditions, the interest amount to becapitalized shall be determined by the result obtained by multiplying the capitalization rate of occupiedgeneral borrowing with the weighted average value of the asset expenditure for the accumulatedexpenditure exceeding the specific borrowing portion.
26. Biological assets
□ Applicable √ Not applicable
27. Oil and gas assets
□ Applicable √ Not applicable
28. Right-of-use assets
√ Applicable □ Not applicable
Refer to "42. Lease" in "V. Significant Accounting Policies and Estimates" of "Section X FinancialReport" of this report for details.
29. Intangible assets
(1). Valuation method, service life and impairment test
√ Applicable □ Not applicable
1. Intangible assets, including land use rights, patent rights and non-patented technologies, are measuredat the cost.
2. Intangible assets with limited service life are amortized systematically and reasonably over their servicelife in accordance with the expected realization method of the economic benefits related to the intangibleassets. If the expected realization method cannot be reliably determined, the straight-line method is usedfor amortization. The specific year information is shown as below:
Item | Amortization period (year) |
Land use rights | 40 or 50 |
Unpatented technology | 5 |
Office software | 3 - 10 |
Patent right | 5 |
Customer resources | 3 |
Trademark right | 10 |
(2). Accounting policy regarding the expenditure on the internal research and development
√ Applicable □ Not applicable
Expenditure incurred during the research phase of the internal research and development projects isincluded in the current profit or loss when actually incurred. Expenditure incurred during the developmentphase is recognized as an intangible asset when all of the following conditions are satisfied simultaneously.
(1) The technical feasibility of completing the intangible asset so that it will be available for use or sale.
(2) Its intention to complete the intangible asset so that it will be available for use or sale.
(3) How the intangible asset will generate probable future economic benefits. Amongst other things, theCompany can demonstrate the existence of a market for the output of the intangible asset or the intangibleasset itself or, if it is used internally, the usefulness of the intangible asset.
(4) The availability of adequate technical, financial and other resources to complete the development andto use or sell the intangible asset.
(5) Its ability to reliably measure the expenditure attributable to the intangible asset during its development.
30. Impairment of long-term assets
√ Applicable □ Not applicable
For such long-term assets as long-term equity investment, investment real estate measured with the costmodel, fixed assets, construction in progress and intangible assets with limited service life, in case thatthere are signs indicating impairment on the balance sheet date, the recoverable amount should beestimated. Whether there is a sign of impairment or not, the goodwill acquired through the businesscombination and intangible assets with indefinite service life is tested for impairment each year. Theimpairment test on goodwill is carried out in combination with its related asset group or asset groupportfolio.In case the recoverable amount of the above long-term assets is less than its carrying value, the provisionfor asset impairment is recognized according to its differences and included in the current profit or loss.
31. Long-term prepaid expenses
√ Applicable □ Not applicable
The long-term prepaid expenses involve all expenses already paid with amortization period of more than1 year (excluding 1 year). Long-term prepaid expenses are entered in an account at the actual amounts,and are amortized by even amortization within the benefit period or prescribed amortization period. If thelong-term prepaid expenses cannot provide benefit to the future accounting period, then all of theamortized value of the unamortized long-term prepaid expenses are transferred into the current profit orloss.
32. Contract liabilities
(1). Recognition of contract liabilities
√ Applicable □ Not applicable
The Company recognizes the obligation to transfer goods to customers for the consideration received orreceivable from the customers as contract liabilities.
33. Employee compensation
(1). Accounting treatment of short-term compensation
√ Applicable □ Not applicable
During the accounting period when employees render services for the Company, the short-termcompensation actually incurred is recognized as liabilities and included in the current profit or loss or thecosts of the related assets.
(2). Accounting treatment of post-employment benefits
√ Applicable □ Not applicable
Post-employment benefits are divided into the defined contribution plan and the defined benefit plan.
(1) During the accounting period when employees render services for the Company, the amount to bedeposited as calculated according to the defined contribution plan are recognized as liabilities and includedin the current profit or loss or the costs of the related assets.
(2) The accounting treatment for the defined benefit plan generally comprises the following steps:
1) According to the expected cumulative benefit unit method, the demographic variables, financialvariables, etc. are estimated through unbiased and mutually consistent actuarial assumption, so as tomeasure the obligations arising from the defined benefit plan and determine the period of relevantobligations. In addition, the obligation generated from the defined benefit plan shall be discounted, so asto determine the present value of defined benefit plan obligation and current service cost;
2) In case of assets in the defined benefit plan, the deficit or surplus generated from the present value ofobligations of the defined benefit plan minus the fair value of the assets of defined benefit plan isrecognized as net liabilities or net assets in the defined benefit plan. When the defined benefit plan hassurplus, the net assets of the defined benefit plan are measured at the lower of the surplus of defined benefitplan and the upper limit of the assets;
3) At the end of the period, the employee compensation costs generated by the defined benefit plan arerecognized as three parts, i.e., service costs, net interest of the net liabilities or net assets of the definedbenefit plan, and the changes generated by re-measurement of the net liabilities or net assets of the definedbenefit plan, in which the service costs and the net interest of the net liabilities or net assets of the definedbenefit plan are included in the current profit or loss or the costs of the related assets, and the changesgenerated by re-measurement of the net liabilities or net assets of the defined benefit plan are included inother comprehensive income, and cannot be reversed to profit or loss in the subsequent accounting period.However, the amount recognized in other comprehensive income can be transferred within the equityscope.
(3). Accounting treatment of termination benefits
√ Applicable □ Not applicable
If termination benefits are provided to employees, the employee compensation liabilities arising from thetermination benefits are recognized on the earlier date of the following and included in the current profitor loss: (1) when the Company cannot unilaterally withdraw the termination benefits provided due totermination of labor relation plan or layoff proposal; (2) when the Company recognizes the cost orexpenses related to the restructuring involving payment of termination benefits.
(4). Accounting treatment of other long-term employee benefits
√ Applicable □ Not applicable
Other long-term employee benefits satisfying the conditions in the defined contribution plan are treated inaccounting as stipulated in the defined contribution plan; and other long-term benefits beyond those aretreated in accounting as stipulated in the defined benefit plan. In order to simplify the related accountingtreatment, the generated employee compensation cost is recognized as the service cost. The total netamount of items including the net interest of net liabilities or assets of other long-term employeecompensation and the changes generated from re-measuring net liabilities or assets of other long-termemployee compensation is included in the current profit or loss or the costs of the related assets.
34. Lease liabilities
√ Applicable □ Not applicable
Refer to "42. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" of this report for details.
35. Provisions
√ Applicable □ Not applicable
1. The obligations imposed by contingencies, such as providing external guarantee, lawsuits, productquality assurance and onerous contract, become the current obligations assumed by the Company, whichare determined by the Company as Provisions when their performance is very likely to result in economicbenefit outflow from the Company and their amount can be measured reliably.
2. The provisions are initially measured by the Company based on the optimal estimate to be paid forperforming relevant current obligations and their carrying value are reviewed on the balance sheet date.
36. Share-based payments
√ Applicable □ Not applicable
1. Types of share-based payments
There are equity-settled and cash-settled share-based payments.
2. Relevant accounting treatment of implementing, modifying and terminating the share-based paymentschedule
(1) Equity-settled share-based payments
These equity-settled share-based payments vested immediately after the grant date and exchanged foremployee services shall be included in relevant costs or expenses as per the fair value of the equityinstruments on the grant date, and the capital reserve shall be adjusted accordingly. For the equity-settledshare-based payments that are vested only after the services within the waiting period are completed orthe specified performance conditions are satisfied and that are exchanged for employee services, theservices acquired in the current period are included in relevant costs or expenses as per the fair value ofthe equity instruments on the grant date based on the optimal estimate of the number of vesting equityinstruments on each balance sheet date within the waiting period, and the capital reserve is adjustedaccordingly.The equity-settled share-based payments exchanged for services of other parties are measured as per thefair value of the services of other parties on the date of acquiring if its reliable measurement is possible,and as per the fair value of the equity instruments on the date of acquiring the services if the reliablemeasurement of the fair value of other parties' services is impossible, but that of the equity instruments ispossible, they are included in relevant costs or expenses, and the owners' equity is increased accordingly.
(2) Cash-settled share-based payments
These cash-settled share-based payments vested immediately after the grant date and exchanged foremployee services shall be included in relevant costs or expenses as per the fair value of the liabilitiesassumed by the Company on the grant date, and the liabilities shall be increased accordingly. For thesecash-settled share-based payments that are vested only after the services within the waiting period arecompleted or the specified performance conditions are satisfied and that are exchanged for employeeservices, the services acquired in the current period shall be included in relevant costs or expenses andcorresponding liabilities as per the fair value of the liabilities assumed by the Company based on theoptimal estimate of the vesting conditions on each balance sheet date within the waiting period.
(3) Modifying and terminating the share-based payment schedule
If the fair value of the granted equity instruments is increased, the Company recognizes the increase of theacquired services according to the fair value of the equity instruments. If the number of the granted equityinstruments is increased, the Company recognizes the increased fair value of the equity instruments as theincrease of the acquired services accordingly. If the Company modifies the vesting conditions in a wayfavorable to employees, the Company considers the modified vesting conditions when dealing with thevesting conditions.If the fair value of the granted equity instruments is decreased, the Company continues to recognize theamount of the acquired services according to the fair value of the equity instruments on the grant date,without taking into account the decrease of the fair value of the equity instruments. If the number of thegranted equity instruments is decreased, the Company treats the decreased part as cancellation of thegranted equity instruments. If the Company modifies the vesting conditions in a way unfavorable toemployees, the Company will not consider the modified vesting conditions when dealing with the vestingconditions.If the Company cancels or settles the granted equity instruments within the waiting period (other than thecancellation arising from failure to meet the vesting conditions), the cancellation or settlement is regardedas accelerated vesting treatment to immediately recognize the amount that should be recognized withinthe remaining waiting period.
37. Preferred shares, perpetual bonds and other financial instruments
√ Applicable □ Not applicable
According to the relevant standards for financial instruments and the Regulations on the Provisions onAccounting Treatment of Perpetual Bonds (C.C. [2019] No.2), for financial instruments such asconvertible corporate bonds issued, the Company shall classify these financial instruments or theircomponents as financial assets, financial liabilities or equity instruments during initial recognition, basedon the contractual terms of the financial instruments issued and the economic substance they reflect, notonly in legal form, but in combination with the definitions of financial assets, financial liabilities andequity instruments.On the balance sheet date, for financial instruments classified as equity instruments, the accountingtreatment for interest expense or dividend distribution as the Company's profit distribution, and forrepurchase, cancellation, etc. as changes in equity is carried out; for financial instruments classified asfinancial liabilities, the accounting treatment for interest expense or dividend distribution as borrowingcosts is carried out, and the gains or losses from repurchase or redemption are included in the current profitor loss.
38. Revenue
(1). Accounting policy applied for revenue recognition and measurement
√ Applicable □ Not applicable
1. Revenue recognition principle
The Company shall, on the commencement date of the contract, evaluate the contract, identify theindividual performance obligations provided in the contract and determine whether to perform them withina period or at a time point.The performance obligations are deemed to be performed within a period if one of the following conditionsis satisfied, otherwise, at a time point: (1) The customer acquires and consumes the economic benefitsbrought by the Company's performance while the Company is performing its obligations; (2) the customeris capable to control the commodities under creation during the Company's performance; (3) thecommodities produced during the Company's performance have irreplaceable purpose and the Companyhas the right to collect the amounts for the performance part already completed to date within the wholecontract term.For the obligations performed within a period, the Company recognizes the revenue according to theperformance progress in that period. If the performance progress cannot be determined in a reasonableway, but the incurred costs are expected to be reimbursed, the revenue shall be recognized according tothe incurred amount of costs until the performance progress can be determined in a reasonable way. Forthe obligations performed at a time point, the revenue shall be recognized at the time of the customer'sacquiring the control of related commodities or services. The Company takes into account the followingwhen judging whether the customer has acquired the control over commodity: (1) The Company has thecurrent right for collection, namely the customer has the current obligation for payment with respect to thecommodity; (2) the Company has transferred the legal title of the commodity to the customer, namely thecustomer has possessed the legal title of the commodity; (3) the Company has transferred the physicalcommodity to the customer, namely the customer has physical possession of the commodity; (4) theCompany has transferred the main risks and return on the commodity's title to the customer, namely thecustomer has acquired the same; (5) the customer has accepted the commodity; and (6) there are othersigns indicating that the customer has acquired the control over the commodity.
2. Revenue measurement principle
(1) The Company measures the revenue according to the transaction price apportioned to the individualperformance obligations. Transaction price refers to the consideration amount of which the Company isexpected to have right for collection due to transfer of commodities or services to the customer, excludingthe amounts charged on behalf of the third party and expected to refund to the customer.
(2) In case of a variable consideration in the contract, the Company determines the optimal estimate of thevariable consideration according to the expected value or the amount most likely to incur, while thetransaction price including the variable consideration cannot exceed the amount under the circumstancewhere the accumulatively recognized revenue will be highly unlikely to suffer major reversal whenrelevant uncertainties are eliminated.
(3) In case of a major financing composition in the contract, the Company determines the transaction priceaccording to the payable amount assumed to be paid by the customer in cash immediately after it acquiresthe control over the commodities or services. The difference between the transaction price and the contractconsideration is amortized with the effective interest method within the contract term. If the Companyexpects, on the commencement date of the contract, that the interval between the customer's acquisitionof the control of the commodities or services and its payment is not more than one year, the major financingcomposition in the contract shall not be taken into account.
(4) In case of two or more performance obligations in the contract, the Company apportions the transactionprice to the individual performance obligations according to the relative proportion of the individual salesprice of the commodities undertaken as per the individual performance obligations on the commencementdate of the contract.
(2). Difference in accounting policies for revenue recognition resulting from different businessmodels for similar businesses
√ Applicable □ Not applicable
The Company mainly sells cosmetics. It has different sales models classified as distribution, direct sellingand sales on commission.
(1) Distribution
The sales revenue is recognized after the Company delivers the products to the buyer according to theprovisions of the contract and the buyer accepts the same.
(2) Direct selling
The sales revenue is recognized after the Company delivers the commodities to the consumer and theconsumer confirms receipt and makes payment.
(3) Sales on commission
The sales revenue is recognized after the Company delivers the products to the commissioned partyaccording to the provisions of the contract and the commissioned party provides the list of sales oncommission to the Company upon selling the products to others.
39. Contract cost
√ Applicable □ Not applicable
The assets associated with the contract cost include the contract acquisition cost and the contractperformance cost.The incremental cost incurred by the Company for acquiring the contract that is expected to be recoverable,as the contract acquisition cost, is recognized as an asset. If the amortization period of the contractacquisition cost is no more than one year, it cost is directly included in the current profit or loss when it isincurred.The cost incurred by the Company for performing the contract that falls out of the standard scope ofrelevant criteria for inventories, fixed assets or intangible assets and that satisfies the following conditions,as the contract performance cost, is recognized as an asset:
1. The cost is directly related to one contract acquired currently or as expected, including direct labor,direct materials and manufacturing expenses (or similar), costs expressly borne by the customer and othercosts incurred solely in connection with the contract;
2. The cost increases the resources for the Company to perform its obligations in the future;
3. The cost is expected to be recoverable.
The Company amortizes the assets related to the contract cost on the same basis as for recognizing therevenue of the commodities or services in connection with the assets and record the same in the currentprofit or loss.If the carrying value of the assets related to the contract cost is more than the surplus considerationexpected to be acquired for transferring the commodities or services in connection with the assets minusthe cost expected to incur, the Company makes the impairment provision against the exceeding part andrecognizes it as the asset impairment loss. If any changes in the factors for impairment in previous periodsmake the surplus consideration expected to be acquired for transferring the commodities or services in
connection with the assets minus the cost expected to incur higher than the carrying value of the assets,the impairment provisions of assets made originally will be reversed and included in the current profit orloss, provided that the reversed carrying value of the assets is no more than that on the reversal date withoutmaking the Impairment Provision.
40. Government subsidies
√ Applicable □ Not applicable
1. Government subsidies are recognized when all of the following conditions are satisfied: (1) TheCompany is able to meet the conditions attached to the Government subsidies; (2) the Company is able toreceive the government subsidies. In case of government subsidies as monetary assets, they are measuredat the amount received or receivable. In case of government subsidies as non-monetary assets, they aremeasured at the fair value; in case that the fair value cannot be acquired in a reliable way, they are measuredat the nominal amount.
2. Determination and accounting treatment method for Government subsidies related to assetsGovernment subsidies that are used for purchasing and constructing or otherwise forming long-term assetsas specified in government documents are classified as government subsidies related to assets. In case ofno provision in government documents, the government subsidies are determined on the basis of theessential condition required for obtaining the Subsidies, and considered as related to assets if the essentialcondition is purchasing and constructing or otherwise forming long-term assets. Government subsidiesrelated to assets offset the carrying value of relevant assets or are recognized as deferred income. If thegovernment subsidies related to assets are recognized as deferred income, they are included in the profitand loss in a reasonable and systematic way within the service life of relevant assets. Governmentsubsidies measured at nominal amount are directly included in the current profit or loss. If related assetsare sold, transferred, scrapped or damaged before the end of their service life, related deferred incomebalance unallocated is transferred into the profit and loss in the current period of assets disposal.
3. Determination and accounting treatment of government subsidies related to incomeGovernment subsidies other than those related to assets are classified as government subsidies related toincome. If it is difficult to distinguish whether the government subsidies containing both the part relatedto assets and the part related to income are related to assets or income, the government subsidies areentirely classified as government subsidies related to income. Government subsidies related to income thatare used for compensation for relevant costs or losses in subsequent periods are recognized as deferredincome, and included in the current profit or loss or offset relevant costs in the period in which relevantcosts or losses are recognized; those used for compensation for relevant costs or losses that have incurredare directly included in the current profit or loss or offset relevant costs.
4. Government subsidies related to daily business activities of the Company are included in other incomeor offset relevant costs according to the nature of the economic business. Government subsidies unrelatedto the daily business activities of the Company are included in non-operating revenue or expenses.
41. Deferred income tax assets/liabilities
√ Applicable □ Not applicable
1. Based on the difference between the carrying value of the assets or liabilities and their tax basis (if thetax basis of the items not recognized as assets or liabilities can be determined according to the provisionsof the tax law, the difference between that tax basis and their physical count quantity), the deferred incometax assets or liabilities are calculated and recognized according to the tax rate applicable in the periodwhere it is expected to recover the assets or liquidate the liabilities.
2. Deferred income tax assets are recognized to the extent that it is very likely to obtain the taxable incometo deduct the deductible temporary differences. If on the balance sheet date, there is conclusive evidenceproving that it is very likely to obtain sufficient taxable income in future periods to deduct the deductibletemporary differences, the deferred income tax assets not recognized yet in previous accounting periodsis recognized.
3. If the carrying value of the deferred income tax assets is reviewed on the balance sheet date and it isvery likely to not obtain sufficient taxable income in future periods to deduct their benefits, the carryingvalue of the deferred income tax assets is written down. When it is very likely to obtain sufficient taxableincome, the amount written down is reversed.
4. The current income tax and deferred income tax of the Company are included in the current profit orloss as the income tax expense or income, except for the income tax arising from the followingcircumstances: (1) business combination; (2) transaction or matters recognized directly in the owners'equity.
42. Lease
(1). Accounting treatment of operating lease
□ Applicable √ Not applicable
(2). Accounting treatment of financing lease
□ Applicable √ Not applicable
(3). Determination and accounting treatment of lease under new lease standards
√ Applicable □ Not applicable
1. The Company as lessee
On the start date of the lease term, the Company recognizes leases with a lease term not exceeding 12months and no purchase option as short-term leases; leases with low value when individual leased assetsare brand-new assets are recognized as leases of low-value assets. If the Company subleases or is expectedto sublease the leased assets, the original lease is not recognized as a lease of low-value assets.For all short-term leases and leases of low-value assets, the Company records the lease payments in thecost of related assets or the current profit or loss by straight-line method over each period of the lease term.Except for the above-mentioned short-term leases and leases of low-value assets that adopt simplifiedtreatment, the Company recognizes leases as right-of-use assets and lease liabilities, on the start date ofthe lease term.
(1) Right-of-use assets
Right-of-use assets are initially measured at cost which includes: 1) the initial measurement amount oflease liabilities; 2) the lease payments made on or before the start date of the lease term, deducting theamounts related to the lease incentive given if there is the lease incentive; 3) the initial direct costs incurredby the lessee; 4) the estimated costs to be incurred by the lessee to dismantle and remove leased assets,restore the site where the leased assets locate, or restore the leased assets to the condition agreed upon inthe lease terms.The Company depreciates right-of-use assets with the straight-line method. If it can be reasonablydetermined that the ownership of the leased assets will be acquired at the expiration of the lease term, theCompany accrues depreciation over the remaining service life of the leased assets. If it cannot bereasonably determined that the ownership of the leased assets can be acquired at the expiration of the lease
term, the Company accrues depreciation over the lease term or the remaining service life of the leasedassets, whichever shorter.
(2) Lease liabilities
On the start date of the lease term, the Company recognizes the present value of the outstanding leasepayments as lease liabilities. When calculating the present value of lease payments, the interest rateimplicit in the lease is used as the discount rate. If the interest rate implicit in the lease cannot bedetermined, the Company's incremental borrowing rate is used as the discount rate. The difference betweenthe lease payment and its present value is regarded as the unrecognized financing expense, and the interestexpense is recognized in each period of the lease term according to the discount rate of the present valueof the recognized lease payment, and is included in the current profit or loss. Variable lease payments thatare not included in the measurement of lease liabilities are included in the current profit or loss whenactually incurred.After the start date of the lease term, when there is a change in the actual amount of fixed payment, achange in the estimated payable amount of the guaranteed residual value, a change in the index or ratioused to determine the lease payment amount, or a change in the evaluation result or actual exercise of thepurchase option, renewal option or termination option, the Company re-measures the lease liabilitiesaccording to the present value of the changed lease payments, and adjusts the carrying value of the right-of-use assets accordingly. If the carrying value of the right-of-use assets has been reduced to zero, but thelease liabilities still need to be further reduced, the remaining amount shall be included in the current profitor loss.
2. The Company as lessor
On the start date of the lease term, the Company classifies the leases that have almost all the risks andrewards related to the ownership of the leased assets substantially transferred as financial leases, and otherleases as operating leases.
(1) Operating lease
During each period of the lease term, the Company recognizes the lease receipts as rental income bystraight-line method, capitalizes the initial direct expenses incurred and amortizes the expenses on thesame basis as for rental income recognition, to be included in the current profit or loss in installments. Thevariable lease payments obtained by the Company related to operating leases but not included in the leasereceipts are included in the current profit or loss when actually incurred.
(2) Financial lease
On the start date of the lease term, the Company recognizes the financial lease receivables based on thenet lease investment (the sum of the unguaranteed residual value and the present value of the lease receiptsthat have not been received on the start date of the lease term discounted at the interest rate implicit inlease), and derecognizes financial lease assets. During each period of the lease term, the Companycalculates and recognizes interest income based on the interest rate implicit in the lease.The variable lease payments obtained by the Company that are not included in the measurement of netlease investment are included in the current profit or loss when actually incurred.
43. Other significant accounting policies and estimates
□ Applicable √ Not applicable
44. Changes in significant accounting policies and estimates
(1). Changes in significant accounting policies
√ Applicable □ Not applicable
Contents and reasons of changes in accounting policies | Review and approval procedure | Remarks (name and amount of report items affected materially) |
None |
Other explanationsThe Company has implemented the provisions on "Accounting Treatment of Enterprises on External Saleof Fixed Assets before Reaching the Intended Usable State or Products or By-products Produced duringthe Research and Development Process" in the Interpretation No. 15 of the Accounting Standards forBusiness Enterprises issued by the Ministry of Finance since January 1, 2022. This accounting policychange has no impact on the Company's financial statements.The Company has implemented the provisions on "Judgment on Loss Contract" in the Interpretation No.15 of the Accounting Standards for Business Enterprises issued by the Ministry of Finance since January1, 2022. This accounting policy change has no impact on the Company's financial statements.From 2022, the Company has adopted in advance the provisions of "Accounting Standards for BusinessEnterprises Interpretation No. 16" issued by the Ministry of Finance, which states that the accountingtreatment for deferred income tax related to assets and liabilities arising from individual transactions isnot applicable to the exemption from initial recognition. This accounting policy change has no impact onthe Company's financial statements.The Company has implemented the provisions on "Accounting Treatment of Income Tax Effects onDividends Related to Financial Instruments Classified as Equity Instruments by the Issuer" in theInterpretation No. 16 of the Accounting Standards for Business Enterprises issued by the Ministry ofFinance since November 30, 2022. This accounting policy change has no impact on the Company'sfinancial statements.The Company has implemented the provisions on "Accounting Treatment for Enterprises Changing Cash-settled Share-based Payments to Equity-settled Share-based Payments" in the Interpretation No. 16 of theAccounting Standards for Business Enterprises issued by the Ministry of Finance since November 30,2022. This accounting policy change has no impact on the Company's financial statements.
(2). Changes in significant accounting estimates
□ Applicable √ Not applicable
(3). The first adoption of new accounting standards or standard interpretations since 2022 involvesadjusting the financial statements at the beginning of the year of the first adoption
□ Applicable √ Not applicable
45. Other
□ Applicable √ Not applicable
VI. Taxes
1. Major tax types and tax rates
Particulars on major tax types and tax rates
√ Applicable □ Not applicable
Tax type | Taxing basis | Tax rate |
Value added tax ("VAT") | The output tax is calculated on the | 13%, 9%, 6%, 1% |
basis of the income from sales of products and taxable income from rendering of services calculated according to the provisions of the tax law. The difference between the output tax and the amount after deducting the input tax which is allowed to be deductible in the current period is the payable VAT. | ||
Consumption tax | Taxable sales (volume) | 15% |
Property tax | In case of ad valorem taxation, it is calculated and paid as per 1.2% of the remaining value after 30% of the original value of the property is deducted in a lump sum; in case of taxation according to lease, it is calculated and paid as per 12% of the rental income. | 12%, 1.2% |
Urban maintenance and construction tax | Actual turnover tax paid | 7%, 5% |
Education surcharge | Actual turnover tax paid | 3% |
Surcharge for local education | Actual turnover tax paid | 2% |
Enterprise income tax | Taxable income | [Note] |
[Note]: Descriptions on tax payers with different enterprise income tax ratesIf there are taxpayers with different enterprise income tax rates, the disclosure will be made for description
√ Applicable □ Not applicable
Name of taxpayer | Income tax rate (%) |
The Company | 15 |
Huzhou Niuke Technology Co., Ltd. | 20 |
Xuzhou Laibo Information Technology Co., Ltd. | 20 |
Korea Younimi Cosmetics Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in South Korea |
Hanna Cosmetics Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in South Korea |
Hapsode Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in South Korea |
HongKong Keshi Trading Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Hongkong Xinghuo Industry Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Hong Kong Wanyan Electronic Commerce Co., Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Hong Kong Zhongwen Electronic Commerce Co., Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Hongkong Xuchen Trading Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
BOYA (Hong Kong) Investment Management Co., Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Proya Europe SARL | Relevant taxes are calculated and paid according to local tax regulations in Luxembourg |
O&R Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in Japan |
Tax payers other than the above | 25 |
2. Tax preference
√ Applicable □ Not applicable
The Company was reviewed as the high-tech enterprise on December 1, 2020 and obtained the high-techenterprise certificate, with the validity of certification of 3 years and the grace period for enterprise incometax during 2020 - 2022. The Company was subject to the enterprise income tax at the preferential rate of15% during the Reporting Period.According to the Notice of the Ministry of Finance and the State Taxation Administration on theImplementation of Inclusive Tax Relief Policy for Small and Micro Enterprises (CS [2019] No.13), theAnnouncement of the State Taxation Administration on Relevant Issues on the Implementation of InclusiveTax Relief Policy for Small and Micro Enterprises (Announcement No.2 of the State TaxationAdministration in 2019), and Announcement of the Ministry of Finance and the State TaxationAdministration on the Implementation of Preferential Income Tax Policies for Small and MicroEnterprises and Individual Industrial and Commercial Households (CS [2021] No.12), and theAnnouncement on the Implementation of Preferential Income Tax Policies for Small and MicroEnterprises (SAT 2022 No.13 Decree of the Ministry of Finance), Huzhou Niuke Technology Co., Ltd.and Xuzhou Laibo Information Technology Co., Ltd. comply with the criteria for tax payment of smalland micro enterprises, and would calculate taxable income as per a reduced tax rate of 12.5% for thetaxable income not greater than RMB1 million and pay the enterprise income tax as per the tax rate of20%. For the taxable income greater than RMB1 million but lower than RMB3 million, it would calculatetaxable income as per a reduced tax rate of 25% and pay the enterprise income tax as per the tax rate of20%.In accordance with the provisions of the Announcement on Relevant Policies for Deepening the Value-Added Tax Reform jointly issued by the Ministry of Finance, the State Taxation Administration and theGeneral Administration of Customs (Announcement No.39 of the Ministry of Finance, the State TaxationAdministration and the General Administration of Customs in 2019), Hangzhou Proya CommercialManagement Co., Ltd., a subsidiary of the Company, complies with the conditions for general tax payersengaged in consumer-oriented service industries, and the input tax deductible in the current period plus10% is used for deducting the taxes payable from October 1, 2019 to December 31, 2022.
3. Other
□ Applicable √ Not applicable
VII. Notes to the Items in Consolidated Financial Statements
1. Cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Cash on hand | 20,176.08 | 22,348.23 |
Cash at bank | 3,078,501,723.18 | 2,339,040,989.92 |
Other monetary capital | 82,481,185.79 | 51,984,911.66 |
Total | 3,161,003,085.05 | 2,391,048,249.81 |
Of which: Total cash deposited outside China | 73,162,153.00 | 69,786,305.02 |
Other explanationsAt the end of the period, bank deposits subject to restricted use included the fixed-term deposit ofRMB30,000,000.00, the transformer fixed deposit of RMB250,000.00, the ETC vehicle deposit ofRMB70,000.00, the Pingduoduo deposit of RMB5,000,000.00, and the Tmall and Alipay deposits ofRMB350,000.00.At the beginning of the period, bank deposits subject to restricted use included the transformer fixeddeposit of RMB293,481.72, and the L/C deposit of RMB7,000,000.00, ETC vehicle deposit ofRMB70,000.00, Pingduoduo deposit of RMB5,000,000.00, and the Tmall and Alipay deposits ofRMB350,000.00 in other monetary capital.
2. Held-for-trading financial assets
□ Applicable √ Not applicable
3. Derivative financial assets
□ Applicable √ Not applicable
4. Notes receivable
(1). Presentation of notes receivable by category
□ Applicable √ Not applicable
(2). Notes receivable pledged by the Company at the end of the period
□ Applicable √ Not applicable
(3). Notes receivable endorsed or discounted by the Company at the end of the period and not yetdue on the balance sheet date
□ Applicable √ Not applicable
(4). Notes that have been transferred to accounts receivable by the Company at the end of theperiod due to the non-performance of the contract of the drawer
□ Applicable √ Not applicable
(5). Disclosed by the classification of bad debt accrual method
□ Applicable √ Not applicable
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
If the bad debt provision is accrued according to the general model of expected credit loss, refer to thedisclosure of other receivables:
□ Applicable √ Not applicable
(6). Information of bad-debt provision
□ Applicable √ Not applicable
(7). Notes receivable actually written off in the current period
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
5. Accounts receivable
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age | Book balance at the end of the period |
Within 1 year | |
Including: Sub-items within 1 year | |
Within 1 year | 102,578,046.19 |
Sub-total within 1 year | 102,578,046.19 |
1 - 2 years | 3,828,412.88 |
2 - 3 years | 5,152,061.48 |
Above 3 years | 14,301,950.43 |
3 - 4 years | |
4 - 5 years | |
Above 5 years | |
Total | 125,860,470.98 |
(2). Disclosed by the classification of bad debt accrual method
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Ending balance | Opening balance | ||||||||
Carrying amount | Provision for bad debts | Book value | Carrying amount | Provision for bad debts | Book value | |||||
Amount | Percentage (%) | Amount | Accrual ratio (%) | Amount | Percentage (%) | Amount | Accrual ratio (%) |
Provision for bad debts accrued individually | 13,574,973.09 | 10.79 | 13,574,973.09 | 100.00 | 14,489,512.75 | 8.89 | 14,489,512.75 | 100.00 | ||
Including: | ||||||||||
Provision for bad debts accrued by portfolio | 112,285,497.89 | 89.21 | 10,127,599.48 | 9.02 | 102,157,898.41 | 148,581,371.95 | 91.11 | 9,954,744.05 | 6.70 | 138,626,627.90 |
Including: | ||||||||||
Account age portfolio | 112,285,497.89 | 89.21 | 10,127,599.48 | 9.02 | 102,157,898.41 | 148,581,371.95 | 91.11 | 9,954,744.05 | 6.70 | 138,626,627.90 |
Total | 125,860,470.98 | / | 23,702,572.57 | / | 102,157,898.41 | 163,070,884.70 | / | 24,444,256.80 | / | 138,626,627.90 |
Provision for bad debts accrued individually:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Name | Ending balance | |||
Carrying amount | Provision for bad debts | Accrual ratio (%) | Reason for accrual | |
Provision for bad debts accrued individually | 13,574,973.09 | 13,574,973.09 | 100.00 | Expected to be uncollectible |
Total | 13,574,973.09 | 13,574,973.09 | 100.00 | / |
Explanation of bad debt provision by item:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
√ Applicable □ Not applicable
By portfolio: account age portfolio
Unit: Yuan Currency: RMB
Name | Ending balance | ||
Accounts receivable | Provision for bad debts | Accrual ratio (%) | |
Account age portfolio | 112,285,497.89 | 10,127,599.48 | 9.02 |
Total | 112,285,497.89 | 10,127,599.48 | 9.02 |
Determination and explanation of bad debts accrued by portfolio
√ Applicable □ Not applicable
Account age | Ending amount | ||
Carrying amount | Provision for bad debts | Accrual ratio (%) | |
Within 1 year | 102,403,884.74 | 5,120,194.23 | 5.00 |
1 - 2 years | 3,825,395.93 | 1,147,618.78 | 30.00 |
2 - 3 years | 4,392,861.51 | 2,196,430.76 | 50.00 |
Above 3 years | 1,663,355.71 | 1,663,355.71 | 100.00 |
Subtotal | 112,285,497.89 | 10,127,599.48 | 9.02 |
If the bad debt provision is accrued according to the general model of expected credit loss, refer to thedisclosure of other receivables:
□ Applicable √ Not applicable
(3). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Opening balance | Changes in amount for the current period | Ending balance | |||
Accrual | Withdrawal or write-back | Charge-off or write-off | Other changes | |||
Provision for bad debts accrued individually | 14,489,512.75 | 425,831.10 | 1,340,370.76 | 13,574,973.09 | ||
Provision for bad debts accrued by portfolio | 9,954,744.05 | 173,230.67 | 375.24 | 10,127,599.48 | ||
Total | 24,444,256.80 | 599,061.77 | 1,340,370.76 | 375.24 | 23,702,572.57 |
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
(4). Accounts receivable actually written off in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Written off amount |
Accounts receivable actually written off | 375.24 |
Among them, information of accounts receivable significantly written off
□ Applicable √ Not applicable
Explanation on the write-off of the account receivable:
□ Applicable √ Not applicable
(5). Accounts receivable of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Company name | Ending balance | Proportion of total balance of accounts receivable at the end of the period (%) | Ending balance of bad debt provision |
Beijing JD Century Trading Co., Ltd. | 45,723,754.71 | 36.33 | 2,286,187.74 |
Vipshop (China) Co., Ltd. | 26,051,305.59 | 20.70 | 1,302,565.28 |
Shanghai Zimei Investment Management Co., Ltd. | 4,928,414.98 | 3.92 | 261,599.75 |
Hangzhou Yongyi Network Technology Co., Ltd. | 4,640,580.00 | 3.69 | 4,640,580.00 |
Zhejiang Haochao Network Technology Co., Ltd. | 4,305,623.60 | 3.42 | 215,281.18 |
Total | 85,649,678.88 | 68.05 | 8,706,213.95 |
Other explanationsNone
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7). The amount of assets and liabilities formed by transferring accounts receivable and continuing
to be involved
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
6. Receivable financing
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Bank acceptance bills | 3,242,000.00 | |
Total | 3,242,000.00 |
Changes in the current period of receivables financing and changes in fair value:
□ Applicable √ Not applicable
If the bad debt provision is accrued according to the general model of expected credit loss, refer to thedisclosure of other receivables:
□ Applicable √ Not applicable
Other explanations:
√ Applicable □ Not applicable
Notes receivable endorsed or discounted by the Company at the end of the period and not yet due on thebalance sheet date
Item | Recognized amount terminated at the end of the period |
Bank acceptance bills | 7,545,731.88 |
Subtotal | 7,545,731.88 |
It is unlikely that a bank acceptance note will be overdue, as the acceptor of bank acceptance note is ahigh-credit commercial bank. Therefore, the Company has derecognized endorsed or discounted bankacceptance notes. If any of such bills is overdue, the Company will be still jointly and severally liable tothe holder according to the Negotiable Instruments Law.
7. Prepayments
(1). Prepayments are listed by age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age | Ending balance | Opening balance | ||
Amount | Percentage (%) | Amount | Percentage (%) | |
Within 1 year | 88,898,806.55 | 97.18 | 57,284,969.16 | 98.08 |
1 - 2 years | 1,696,085.16 | 1.85 | 1,062,309.95 | 1.82 |
2 - 3 years | 829,263.44 | 0.91 | 59,368.00 | 0.10 |
Above 3 years | 59,368.00 | 0.06 | ||
Total | 91,483,523.15 | 100.00 | 58,406,647.11 | 100.00 |
Explanation of reasons why prepayments with more than 1 year's age and significant amount are not settledin time:
At the end of the period, there were no important unsettled prepayments with an account age of more than1 year.
(2). Prepayments of the top five ending balances collected by prepaid objects
√ Applicable □ Not applicable
Company name | Ending balance | Ratio of total ending balance of prepayment (%) |
Hangzhou Alimama Software Service Co., Ltd.[Note 1] | 26,544,217.54 | 29.02 |
Wuhan Juliang Xingtu Technology Co., Ltd.[Note 2] | 14,095,425.65 | 15.41 |
Shanghai Xunmeng Information Technology Co., Ltd. | 9,620,124.20 | 10.52 |
Guangxi Jingdong Xinjie E-commerce Co., Ltd. | 7,337,797.29 | 8.02 |
Shanghai Zhuiji Information Technology Co., Ltd. | 3,381,976.54 | 3.70 |
Total | 60,979,541.22 | 66.67 |
Other explanations
[Note 1] The payment to Hangzhou Alimama Software Service Co., Ltd. refers to the consolidated amountto Hangzhou Alimama Software Service Co., Ltd., Zhejiang Alibaba Communication Technology Co.,Ltd., and other companies that are under the same control.[Note 2] The payment to Wuhan Juliang Xingtu Technology Co., Ltd. refers to the consolidated amountto Hubei Juliang Yinqing Technology Co., Ltd., Wuhan Juliang Xingtu Technology Co., Ltd., and othercompanies that are under the same control.
Other explanations
□ Applicable √ Not applicable
8. Other receivables
Presentation by item
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ Applicable √ Not applicable
(2). Significant overdue interest
□ Applicable √ Not applicable
(3). Provision for bad debts
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Dividends receivable
(4). Dividends receivable
□ Applicable √ Not applicable
(5). Important dividends receivable with an account age of more than 1 year
□ Applicable √ Not applicable
(6). Provision for bad debts
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Other receivables
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age | Book balance at the end of the period |
Within 1 year | |
Including: Sub-items within 1 year | |
Within 1 year | 65,862,919.09 |
Sub-total within 1 year | 65,862,919.09 |
1 - 2 years | 19,331,287.17 |
2 - 3 years | 22,496,350.23 |
Above 3 years | 6,470,493.57 |
3 - 4 years | |
4 - 5 years | |
Above 5 years | |
Total | 114,161,050.06 |
[Note] The ending balance with an account age of 2-3 years is greater than the opening balance with anaccount age of 1-2 years, which is due to changes in foreign currency exchange rates
(2).Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Nature of payment | Book balance at the end of the period | Opening book balance |
Security deposits | 22,781,728.37 | 24,126,373.18 |
Suspense payment receivables | 90,500,345.08 | 74,931,769.08 |
Reserve fund | 552,985.89 | 624,289.31 |
Other | 325,990.72 | 1,336,042.57 |
Total | 114,161,050.06 | 101,018,474.14 |
(3).Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Provision for bad debts | First stage | Second stage | Third stage | Total |
Expected credit losses over the next 12 months | Expected credit loss for the entire duration (credit impairment not occurred) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
Balance as at January 1, 2022 | 3,254,330.37 | 517,127.76 | 31,203,308.20 | 34,974,766.33 |
The balance as of January 1, 2022 is in the current period | ||||
- Transferred to the second stage | -738,418.35 | 738,418.35 | ||
- Transferred to the third stage | -393,872.19 | 393,872.19 |
- Returned to the second stage | ||||
- Returned to the first stage | ||||
Accrual in the current period | 953,768.29 | 3,568,836.19 | 2,718,109.94 | 7,240,714.42 |
Amount written back in the current period | -1,441,980.00 | -1,441,980.00 | ||
Current write off | ||||
Current recovery | ||||
Amount written off in the current period | -176,534.32 | -176,534.32 | ||
Other changes | ||||
Balance as at December 31, 2022 | 3,293,145.99 | 4,430,510.11 | 32,873,310.33 | 40,596,966.43 |
Explanation of significant changes in book balance of other receivables with changes in provision for lossin the current period:
□ Applicable √ Not applicable
The amount of bad debt provision in the current period and the basis for evaluating whether the credit riskof financial instruments increases significantly:
□ Applicable √ Not applicable
(4).Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Opening balance | Changes in amount for the current period | Ending balance | |||
Accrual | Withdrawal or write-back | Charge-off or write-off | Other changes | |||
Provision for bad debts accrued individually | 26,987,367.33 | 275,975.78 | -1,441,980.00 | 25,821,363.11 | ||
Provision for bad debts accrued by portfolio | 7,987,399.00 | 6,964,738.64 | -176,534.32 | 14,775,603.32 | ||
Total | 34,974,766.33 | 7,240,714.42 | -1,441,980.00 | -176,534.32 | 40,596,966.43 |
Among them, significant amount of bad-debt provision written back or withdrawn in the current period:
□ Applicable √ Not applicable
(5).Other receivables actually written off in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Written off amount |
Other accounts receivable actually written off | 176,534.32 |
Wherein, write-off of other important receivables:
□ Applicable √ Not applicable
Explanation on write-off of other receivables:
□ Applicable √ Not applicable
(6).Other receivables of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Company name | Nature of payment | Ending balance | Account age | As a proportion of total ending balance in other receivables (%) | Provision for bad debts Ending balance |
Zhejiang Tmall Technology Co., Ltd. | Suspense payment receivables/Security deposits | 35,327,628.48 | [Note 1] | 30.95 | 1,813,881.42 |
Beijing Space Transformation Technology Co., Ltd. | Suspense payment receivables/Security deposits | 25,525,791.01 | [Note 2] | 22.36 | 1,281,414.55 |
EURL PHARMATICA | Suspense payment receivables | 18,232,635.52 | [Note 3] | 15.97 | 18,232,635.52 |
Wuxing District Daixi Town People's Government of Huzhou City | Security deposits | 13,493,392.00 | 1 - 2 years | 11.82 | 4,048,017.60 |
SIKEROM EURPOE GMBH | Suspense payment receivables | 7,588,727.59 | 2 - 3 years | 6.65 | 7,588,727.59 |
Total | / | 100,168,174.60 | / | 87.75 | 32,964,676.68 |
[Note 1] RMB35,277,628.48 with the account age within 1 year, and RMB50,000.00 with the account ageof above 3 years[Note 2] RMB25,505,291.01 with the account age within 1 year, and RMB20,500.00 with the accountage of 1-2 years
[Note 3] RMB6,308,815.77 with the account age of 1 to 2 years, RMB11,923,819.75 with an account ageof 2 to 3 years
(7).Receivables involving government subsidies
□ Applicable √ Not applicable
(8).Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(9).Amount of assets or liabilities formed by transfer of other receivables and continued involvement
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
9. Inventories
(1). Classification of inventories
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance | ||||
Carrying amount | Provision for devaluation of inventories/Impairment provision of contract performance cost | Book value | Carrying amount | Provision for devaluation of inventories/Impairment provision of contract performance cost | Book value | |
Raw materials | 80,114,114.87 | 1,703,611.59 | 78,410,503.28 | 29,764,865.65 | 1,131,843.45 | 28,633,022.20 |
Packaging | 42,300,426.18 | 1,016,137.11 | 41,284,289.07 | 37,042,703.68 | 650,080.09 | 36,392,623.59 |
Goods in process | 18,952,830.41 | 134,093.52 | 18,818,736.89 | 13,001,345.50 | 168,931.64 | 12,832,413.86 |
Outsourcing gifts | 12,011,197.41 | 65,685.51 | 11,945,511.90 | 14,904,454.81 | 111,096.40 | 14,793,358.41 |
Inventory commodities | 546,279,426.61 | 37,780,598.48 | 508,498,828.13 | 373,318,017.14 | 25,067,162.01 | 348,250,855.13 |
Low value consumables | 10,474,077.34 | 380,619.88 | 10,093,457.46 | 7,337,309.01 | 300,823.91 | 7,036,485.10 |
Total | 710,132,072.82 | 41,080,746.09 | 669,051,326.73 | 475,368,695.79 | 27,429,937.50 | 447,938,758.29 |
(2). Provision for devaluation of inventories and impairment provision of contract performancecost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Decreased amount in the current period | Ending balance |
Accrual | Other | Write-back or charge-off | Other | |||
Raw materials | 1,131,843.45 | 2,409,980.19 | 1,838,212.05 | 1,703,611.59 | ||
Packaging | 650,080.09 | 8,376,906.03 | 8,010,849.01 | 1,016,137.11 | ||
Goods in process | 168,931.64 | 1,226,977.70 | 1,261,815.82 | 134,093.52 | ||
Outsourcing gifts | 111,096.40 | 37,989.58 | 83,400.46 | 65,685.51 | ||
Inventory commodities | 25,067,162.01 | 82,441,537.99 | 69,728,101.53 | 37,780,598.48 | ||
Low value consumables | 300,823.91 | 147,546.34 | 67,750.37 | 380,619.88 | ||
Total | 27,429,937.50 | 94,640,937.84 | 80,990,129.24 | 41,080,746.09 |
(3). Description of capitalized amount of borrowing expenses included in ending balance of
inventories
□ Applicable √ Not applicable
(4). Description of current amortization amount of contract performance cost
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
10. Contract assets
(1). Description of contract assets
□ Applicable √ Not applicable
(2). Amount of and reasons for significant changes in carrying amount during the Reporting Period
□ Applicable √ Not applicable
(3). Impairment provision of contract assets accrued in the current period
□ Applicable √ Not applicable
If the bad debt provision is accrued according to the general model of expected credit loss, refer to thedisclosure of other receivables:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
11. Held-for-sale assets
□ Applicable √ Not applicable
12. Non-current assets due within one year
□ Applicable √ Not applicable
Significant debt investments and other debt investments at the end of the period:
□ Applicable √ Not applicable
Other explanationsNone
13. Other current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Contract acquisition cost | ||
Return cost receivable | 8,782,156.33 | 3,425,429.44 |
Advance payment of taxes | 4,009,626.89 | 11,095,721.02 |
Input VAT to be deducted | 36,944,213.35 | 39,013,811.93 |
Total | 49,735,996.57 | 53,534,962.39 |
Other explanationsNone
14. Debt investments
(1). Description of debt investment
□ Applicable √ Not applicable
(2). Significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Accrual of impairment provisions
□ Applicable √ Not applicable
Amount of impairment provision accrued in the current period and the basis for evaluating whether thecredit risk of financial instruments increases significantly
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
15. Other debt investments
(1). Description of other debt investments
□ Applicable √ Not applicable
(2). Other significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Accrual of impairment provisions
□ Applicable √ Not applicable
Amount of impairment provision accrued in the current period and the basis for evaluating whether thecredit risk of financial instruments increases significantly
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
16. Long-term receivables
(1). Description of long-term receivables
□ Applicable √ Not applicable
(2). Provision for bad debts
□ Applicable √ Not applicable
Amount of provision for bad debts accrued in the current period and the basis for evaluating whether thecredit risk of financial instruments increases significantly
□ Applicable √ Not applicable
(3). Long-term receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(4). Amount of assets and liabilities formed by transfer of long-term receivables and continued
involvement
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
17. Long-term equity investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Invested entity | Opening balance | Current changes | Ending balance | Ending balance of impairment provisions | |||||||
Additional investment | Investment decrease | Recognized investment gain and loss under equity method | Other comprehensive income adjustments | Other changes in equity | Declared payment of cash dividends or profits | Impairment provision | Other | ||||
I. Joint Venture | |||||||||||
Huzhou Panrui Industry Investment Partnership (Limited Partnership) | 3,074,758.68 | -5,810.52 | 3,068,948.16 | ||||||||
Subtotal | 3,074,758.68 | -5,810.52 | 3,068,948.16 | ||||||||
II. Affiliate | |||||||||||
Xiongke Culture Media (Hangzhou) Co., Ltd. | 2,789,460.66 | -139,840.96 | 2,649,619.70 | ||||||||
Jiaxing Woyong Investment | 72,681,733.38 | 41,003,609.10 | -2,432,120.55 | 111,253,221.93 |
Partnership (Limited Partnership) | |||||||||||
Zhuhai Healthlong Biotechnology Co., Ltd. | 79,413,882.37 | -2,065,839.07 | 66,771,744.63 | 10,576,298.67 | 81,442,213.22 | ||||||
Beijing Xiushi Culture Development Co., Ltd. | 5,424,692.37 | -505,827.03 | 4,918,865.34 | ||||||||
Metis Info Tech (Guangzhou) Co., Ltd. | 6,575,008.81 | -508,585.15 | 6,066,423.66 | ||||||||
Subtotal | 166,884,777.59 | 41,003,609.10 | -5,652,212.76 | 66,771,744.63 | 135,464,429.30 | 81,442,213.22 | |||||
Total | 169,959,536.27 | 41,003,609.10 | -5,658,023.28 | 66,771,744.63 | 138,533,377.46 | 81,442,213.22 |
Other explanationsNone
18. Other equity instrument investments
(1). Description of other equity instrument investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Hangzhou Regenovo Biotechnology., Ltd. | 20,580,000.00 | 20,580,000.00 |
LIPOTRUE,S.L. | 35,822,400.00 | 35,822,400.00 |
Hangzhou Golong Holding Co., Ltd. | 90,000,000.00 | |
Total | 146,402,400.00 | 56,402,400.00 |
(2). Description of non-transactional equity instrument investments
□ Applicable √ Not applicable
Other explanations:
√ Applicable □ Not applicable
The Company invests in equity for strategic investment purposes, and the investees will take theCompany's investments as equity instruments. Therefore, the Company designates such equity instrumentinvestments as financial assets at fair value through other comprehensive income.
19. Other non-current financial assets
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
20. Investment real estate
Measurement mode of investment real estate
(1). Investment real estate adopting the cost measurement mode
Unit: Yuan Currency: RMB
Item | Building and construction | Land use rights | Construction in progress | Total |
I. Original book value | ||||
1. Opening balance | 77,820,579.40 | 77,820,579.40 | ||
2. Current increase | 960,563.86 | 960,563.86 | ||
(1) Outsourcing | 272,699.95 | 272,699.95 | ||
(2) Transfer-in of inventory\fixed assets\construction in process | 687,863.91 | 687,863.91 | ||
3. Current decrease | ||||
4. Ending balance | 78,781,143.26 | 78,781,143.26 | ||
II. Accumulated depreciation and accumulated amortization | ||||
1. Opening balance | 7,498,711.40 | 7,498,711.40 | ||
2. Current increase | 2,627,731.05 | 2,627,731.05 | ||
(1) Provision or amortization | 2,609,451.73 | 2,609,451.73 | ||
(2) Transfer-in of fixed assets | 18,279.32 | 18,279.32 | ||
3. Current decrease | ||||
4. Ending balance | 10,126,442.45 | 10,126,442.45 | ||
III. Impairment Provision | ||||
1. Opening balance | ||||
2. Current increase | ||||
(1) Provision | ||||
3. Current decrease | ||||
(1) Disposal | ||||
(2) Other transfer-out | ||||
4. Ending balance | ||||
IV. Book Value | ||||
1. Ending book value | 68,654,700.81 | 68,654,700.81 | ||
2. Opening book value | 70,321,868.00 | 70,321,868.00 |
(2). Real estate held for investment with pending proprietorship certificate
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
21. Fixed assets
Presentation by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Fixed assets | 570,376,309.67 | 558,981,209.20 |
Disposal of fixed assets | ||
Total | 570,376,309.67 | 558,981,209.20 |
Other explanations:
□ Applicable √ Not applicable
Fixed assets
(1). Description of fixed assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Houses and buildings | General equipment | Dedicated equipment | Means of transportation | Total |
I. Original book value: | |||||
1. Opening balance | 539,801,215.99 | 74,636,230.21 | 196,651,852.38 | 19,877,806.90 | 830,967,105.48 |
2. Current increase | 182,150.89 | 8,000,967.84 | 56,065,281.42 | 1,309,061.59 | 65,557,461.74 |
(1) Purchase | 182,150.89 | 8,000,967.84 | 16,165,718.07 | 1,309,061.59 | 25,657,898.39 |
(2) Transfer-in of construction in progress | 39,899,563.35 | 39,899,563.35 | |||
3. Current decrease | 687,863.91 | 2,160,194.53 | 3,067,801.13 | 602,274.52 | 6,518,134.10 |
(1) Disposal or scrapping | 2,160,194.53 | 3,067,801.13 | 602,274.52 | 5,830,270.19 | |
(2) Transfer to investment real estate | 687,863.91 | 687,863.91 | |||
4. Ending balance | 539,295,502.97 | 80,477,003.52 | 249,649,332.67 | 20,584,593.97 | 890,006,433.12 |
II. Accumulated depreciation | |||||
1. Opening balance | 107,920,939.15 | 32,895,830.60 | 117,135,329.26 | 14,033,797.27 | 271,985,896.28 |
2. Current increase | 19,647,032.67 | 9,697,672.52 | 17,799,152.75 | 2,799,551.58 | 49,943,409.52 |
(1) Provision | 19,647,032.67 | 9,697,672.52 | 17,799,152.75 | 2,799,551.58 | 49,943,409.52 |
3. Current decrease | 18,279.32 | 815,229.70 | 947,190.65 | 518,482.67 | 2,299,182.35 |
(1) Disposal or scrapping | 815,229.70 | 947,190.65 | 518,482.67 | 2,280,903.03 |
(2) Transfer to investment real estate | 18,279.32 | 18,279.32 | |||
4. Ending balance | 127,549,692.50 | 41,778,273.42 | 133,987,291.36 | 16,314,866.18 | 319,630,123.45 |
III. Impairment Provision | |||||
1. Opening balance | |||||
2. Current increase | |||||
(1) Provision | |||||
3. Current decrease | |||||
(1) Disposal or scrapping | |||||
4. Ending balance | |||||
IV. Book Value | |||||
1. Ending book value | 411,745,810.47 | 38,698,730.10 | 115,662,041.31 | 4,269,727.79 | 570,376,309.67 |
2. Opening book value | 431,880,276.84 | 41,740,399.61 | 79,516,523.12 | 5,844,009.63 | 558,981,209.20 |
(2). Temporarily idle fixed assets
□ Applicable √ Not applicable
(3). Fixed assets leased in through finance lease
□ Applicable √ Not applicable
(4). Fixed assets leased out through operating lease
□ Applicable √ Not applicable
(5). Fixed assets without property right certificate
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Disposal of fixed assets
□ Applicable √ Not applicable
22. Construction in progress
Presentation by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Construction in progress | 207,378,935.86 | 108,678,896.27 |
Engineering materials | ||
Total | 207,378,935.86 | 108,678,896.27 |
Other explanations:
□ Applicable √ Not applicable
Construction in progress
(1). Description of construction in progress
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance | ||||
Carrying amount | Impairment provision | Book value | Carrying amount | Impairment provision | Book value | |
Huzhou Production Base Expansion Project (Phase I) | 141,886,053.44 | 141,886,053.44 | 55,292,163.04 | 55,292,163.04 | ||
Longwu R&D Center Construction Project | 34,804,789.71 | 34,804,789.71 | 7,157,088.81 | 7,157,088.81 | ||
Decoration engineering | 5,282,700.29 | 5,282,700.29 | 5,374,335.45 | 5,374,335.45 | ||
Information System Upgrade Project | 4,266,606.14 | 4,266,606.14 | 641,190.64 | 641,190.64 | ||
Make-up Factory | 14,323,636.47 | 14,323,636.47 | 26,447,530.33 | 26,447,530.33 | ||
Other sporadic projects | 6,815,149.81 | 6,815,149.81 | 13,766,588.00 | 13,766,588.00 | ||
Total | 207,378,935.86 | 207,378,935.86 | 108,678,896.27 | 108,678,896.27 |
(2). Changes of items under important construction in progress in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Budget | Opening balance | Current increase | Amount of transfer to fixed assets in the current period | Amount of other decreases in the current period | Ending balance | Proportion of accumulated project investment to budget (%) | Progress of works | Accumulated amount of interest capitalization | Including: Amount of interest capitalization in the current period | Interest capitalization rate in the current period (%) | Source of fund |
Huzhou Production Base Expansion Project (Phase I) | RMB416.78million | 55,292,163.04 | 97,107,221.35 | 10,513,330.95 | 141,886,053.44 | 36.57 | 36.57% | 10,391,387.54 | 9,475,140.14 | 4.57 | Raised funds and self-owned funds | |
Longwu R&D Center Construction Project | RMB128.61million | 7,157,088.81 | 27,647,700.90 | 34,804,789.71 | 27.06 | 27.06% | 6,888,331.35 | 6,361,861.28 | 4.57 | Raised funds and self-owned funds | ||
Information System Upgrade Project | RMB112.40million | 641,190.64 | 3,625,415.50 | 4,266,606.14 | 3.80 | 3.80% | 2,636,042.58 | 2,391,078.36 | 4.57 | Raised funds and self-owned funds | ||
Makeup Factory | RMB66.11million | 26,447,530.33 | 12,123,893.86 | 14,323,636.47 | 43.33 | 18.34% | ||||||
Total | RMB723.90million | 89,537,972.82 | 128,380,337.75 | 22,637,224.81 | 195,281,085.76 | / | / | 19,915,761.47 | 18,228,079.78 | / | / |
(3). Impairment provision of construction in progress accrued in the current period
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
Engineering materials
(4). Engineering materials
□ Applicable √ Not applicable
23. Productive biological assets
(1). Productive biological assets with cost measurement mode
□ Applicable √ Not applicable
(2). Productive biological assets with fair value econometric mode
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Houses and buildings | Total |
I. Original book value | ||
1. Opening balance | ||
2. Current increase | 7,481,934.15 | 7,481,934.15 |
1) Lease-in | 7,481,934.15 | 7,481,934.15 |
3. Current decrease |
4. Ending balance | 7,481,934.15 | 7,481,934.15 |
II. Accumulated depreciation | ||
1. Opening balance | ||
2. Current increase | 1,071,299.90 | 1,071,299.90 |
(1) Accrual | 1,071,299.90 | 1,071,299.90 |
3. Current decrease | ||
4. Ending balance | 1,071,299.90 | 1,071,299.90 |
III. Impairment Provision | ||
1. Opening balance | ||
2. Current increase | ||
(1) Accrual | ||
3. Current decrease | ||
(1) Disposal | ||
4. Ending balance | ||
IV. Book Value | ||
1. Ending book value | 6,410,634.25 | 6,410,634.25 |
2. Opening book value |
Other explanations:
None
26. Intangible assets
(1). Description of intangible assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Land use rights | Patent right | Unpatented technology | Customer resources | Trademark right | Software | Total |
I. Original book value | |||||||
1. Opening balance | 472,400,130.10 | 446,367.92 | 563,293.07 | 12,833,684.00 | 137,131.75 | 23,546,496.96 | 509,927,103.80 |
2. Current increase | 28,721.78 | 39,897,000.00 | 780,737.56 | 40,706,459.34 | |||
(1) Purchase | 28,721.78 | 39,897,000.00 | 780,737.56 | 40,706,459.34 | |||
3. Current decrease | 137,131.75 | 46,956.09 | 184,087.84 | ||||
(1) Disposal | 137,131.75 | 46,956.09 | 184,087.84 | ||||
4. Ending balance | 472,400,130.10 | 475,089.70 | 563,293.07 | 12,833,684.00 | 39,897,000.00 | 24,280,278.43 | 550,449,475.30 |
II. Accumulated amortization | |||||||
1. Opening balance | 80,337,918.89 | 423,582.17 | 533,063.88 | 11,764,210.33 | 51,966.23 | 19,671,238.01 | 112,781,979.51 |
2. Current increase | 11,941,951.57 | 7,039.30 | 6,756.49 | 1,055,400.46 | 2,340,748.70 | 2,094,088.62 | 17,445,985.14 |
(1) Provision | 11,941,951.57 | 7,039.30 | 6,756.49 | 1,055,400.46 | 2,340,748.70 | 2,094,088.62 | 17,445,985.14 |
3. Current decrease | 51,966.23 | 43,406.38 | 95,372.61 | ||||
(1) Disposal | 51,966.23 | 43,406.38 | 95,372.61 | ||||
4. Ending balance | 92,279,870.46 | 430,621.47 | 539,820.37 | 12,819,610.79 | 2,340,748.70 | 21,721,920.25 | 130,132,592.04 |
III. Impairment Provision | |||||||
1. Opening balance | |||||||
2. Current increase | |||||||
(1) Provision | |||||||
3. Current decrease | |||||||
(1) Disposal | |||||||
4. Ending balance | |||||||
IV. Book Value | |||||||
1. Ending book value | 380,120,259.64 | 44,468.23 | 23,472.70 | 14,073.21 | 37,556,251.30 | 2,558,358.18 | 420,316,883.26 |
2. Opening book value | 392,062,211.21 | 22,785.75 | 30,229.19 | 1,069,473.67 | 85,165.52 | 3,875,258.95 | 397,145,124.29 |
At the end of this period, the proportion of intangible assets formed through internal research anddevelopment of the Company to the balance of intangible assets is 0.00%.
(2). The land use right without the property ownership certificate
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
27. Development expenditure
□ Applicable √ Not applicable
28. Goodwill
(1). Original book value of goodwill
□ Applicable √ Not applicable
(2). Impairment provision of goodwill
□ Applicable √ Not applicable
(3). Information about the asset group or combination of asset groups of goodwill
□ Applicable √ Not applicable
(4). Explain the goodwill impairment test process, key parameters (such as the forecast period
growth rate, stable period growth rate, profit rate, discount rate, forecast period when thepresent value of the future cash flow is expected, if applicable) and the recognition method ofgoodwill impairment loss
□ Applicable √ Not applicable
(5). Impact of goodwill impairment test
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
29. Long-term prepaid expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Amortized amount in the current period | Other decreased amount | Ending balance |
Renovation costs | 28,035,222.52 | 6,908,686.99 | 15,834,323.90 | 19,109,585.61 | |
Endorsement fee | 1,297,168.97 | 1,297,168.97 | |||
Garage use fee | 192,950.56 | 192,950.56 | |||
Software service fee | 231,132.06 | 198,113.21 | 33,018.85 | ||
Total | 29,756,474.11 | 6,908,686.99 | 17,522,556.64 | 19,142,604.46 |
Other explanations:
None
30. Deferred income tax assets/liabilities
(1). Deferred income tax assets without offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance | ||
Deductible temporary difference | Deferred income taxes Assets | Deductible temporary difference | Deferred income taxes Assets | |
Impairment provision of assets |
Unrealized profit from internal transaction | 42,025,801.32 | 10,506,450.33 | 51,427,566.52 | 11,315,875.56 |
Deductible loss | 24,661,711.36 | 6,165,427.84 | ||
Government subsidies pertinent to assets | 6,399,811.33 | 959,971.70 | 6,416,263.33 | 962,439.50 |
Unused membership points | 83,272,601.46 | 20,818,150.36 | ||
Anticipated return losses | 4,541,544.48 | 1,135,386.12 | 4,699,734.32 | 1,174,933.59 |
Short-term lease expenses | 449,832.92 | 67,474.94 | ||
Advertising and business promotion expenses | 3,258,145.25 | 814,536.31 | ||
Provisions for bad debts of accounts receivable | 14,181,029.90 | 3,545,098.74 | 12,133,125.37 | 3,033,245.75 |
Inventory valuation reserve | 24,366,081.72 | 4,518,122.80 | 13,851,297.64 | 2,192,173.55 |
Impact of share-based payment | 31,280,678.91 | 5,940,147.52 | 64,709,836.24 | 13,951,922.23 |
Total | 209,775,527.29 | 48,305,338.82 | 177,899,534.78 | 38,796,018.02 |
(2). Deferred income tax liabilities without offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance | ||
Taxable temporary difference | Deferred income taxes Liabilities | Taxable temporary difference | Deferred income taxes Liabilities | |
Assets assessment appreciation in businesses consolidation under common control | ||||
Changes in the fair value of other debt investments | ||||
Changes in the fair value of other equity instrument investments | ||||
One-time deduction for depreciation of fixed assets | 126,101,620.56 | 19,019,431.67 | 56,019,830.45 | 8,408,158.81 |
Total | 126,101,620.56 | 19,019,431.67 | 56,019,830.45 | 8,408,158.81 |
(3). Deferred income tax assets or liabilities presented in net amount after offset
□ Applicable √ Not applicable
(4). Details of unrecognized deferred income tax assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Deductible temporary difference | 218,452,946.39 | 86,680,894.07 |
Deductible loss | 393,391,257.51 | 328,350,840.97 |
Total | 611,844,203.90 | 415,031,735.04 |
(5). Deductible loss of unrecognized deferred income tax assets will expire in the following years
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Year | Ending balance | Beginning balance | Remarks |
2022 | 36,720,246.07 | ||
2023 | 44,562,908.90 | 54,275,434.81 | |
2024 | 89,520,734.89 | 92,977,432.81 | |
2025 | 66,686,117.23 | 80,408,649.72 | |
2026 | 63,349,129.45 | 63,969,077.56 | |
2027 | 129,272,367.04 | ||
Total | 393,391,257.51 | 328,350,840.97 | / |
Other explanations:
□ Applicable √ Not applicable
31. Other non-current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance | ||||
Carrying amount | Impairment provision | Book value | Carrying amount | Impairment provision | Book value | |
Contract acquisition cost | ||||||
Contract performance cost | ||||||
Return cost receivable | ||||||
Contract assets | ||||||
Prepaid for long-term asset purchase funds | 39,897,000.00 | 39,897,000.00 |
Other long-term assets | 5,554,726.06 | 5,554,726.06 | 4,270,303.56 | 4,270,303.56 | ||
Total | 5,554,726.06 | 5,554,726.06 | 44,167,303.56 | 44,167,303.56 |
Other explanations:
None
32. Short-term borrowings
(1). Classification of short-term borrowings
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Credit loans | 200,195,890.41 | 200,251,506.85 |
Total | 200,195,890.41 | 200,251,506.85 |
Description of classification of short-term borrowingsNone
(2). Overdue but yet unrepaid short-term borrowings
□ Applicable √ Not applicable
Particulars of important overdue but yet unrepaid short-term borrowings:
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
33. Held-for-trading financial liabilities
□ Applicable √ Not applicable
34. Derivative financial liabilities
□ Applicable √ Not applicable
35. Notes payable
(1). Presentation of notes payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Type | Ending balance | Opening balance |
Bank acceptance bills | 69,626,352.12 | 79,156,771.40 |
Total | 69,626,352.12 | 79,156,771.40 |
The amount of notes payable due and unpaid at the end of this period is RMB0.00.
36. Accounts payable
(1). Presentation of accounts payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Payment for goods | 252,113,782.78 | 309,697,429.86 |
Expenses | 213,566,905.71 | 84,316,536.83 |
Payment for acquisition of long-term assets | 9,746,795.74 | 10,012,274.47 |
Total | 475,427,484.23 | 404,026,241.16 |
(2). Important accounts payable with the account age of more than one year
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
37. Receipts in advance
(1). Presentation of receipts in advance
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Rents receivable in advance | 464,328.26 | 173,769.85 |
Total | 464,328.26 | 173,769.85 |
(2). Important receipts in advance with an account age of more than one year
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
38. Contract liabilities
(1). Information of contract liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Advance receipt of payment for goods | 83,234,612.24 | 82,548,148.92 |
Unused membership points | 91,368,221.67 | 8,603,836.40 |
Total | 174,602,833.91 | 91,151,985.32 |
(2). Amount of and reasons for significant changes in carrying amount during the Reporting Period
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
39. Employee compensation payable
(1). Presentation of employee compensation payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance |
I. Short-term compensation | 78,069,805.10 | 585,679,799.99 | 539,470,862.08 | 124,278,743.01 |
II. Post-employment benefits - defined contribution plans | 579,244.62 | 22,463,138.12 | 22,382,376.39 | 660,006.35 |
III. Dismissal Benefit | ||||
IV. Other benefits due within one year | ||||
Total | 78,649,049.72 | 608,142,938.11 | 561,853,238.47 | 124,938,749.36 |
(2). Presentation of short-term compensation
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance |
I. Salaries, bonuses, allowances and subsidies | 77,170,134.07 | 536,580,186.31 | 490,610,993.51 | 123,139,326.87 |
II. Welfare expense of employee | 6,691.56 | 21,458,796.83 | 21,465,488.39 | |
III. Social insurance premium | 518,125.19 | 15,540,497.97 | 15,293,767.31 | 764,855.85 |
Including: Medical insurance premium | 484,798.88 | 14,741,022.63 | 14,478,264.93 | 747,556.58 |
Industrial injury insurance premium | 13,009.69 | 704,718.01 | 704,474.40 | 13,253.30 |
Maternity insurance premium | 20,316.62 | 94,757.33 | 111,027.98 | 4,045.97 |
IV. Housing provident fund | 374,854.28 | 9,032,832.44 | 9,033,126.43 | 374,560.29 |
V. Trade union fund and staff education fund | 3,067,486.44 | 3,067,486.44 | ||
VI. Short-term paid leave | ||||
VII. Short-term profit sharing plan | ||||
Total | 78,069,805.10 | 585,679,799.99 | 539,470,862.08 | 124,278,743.01 |
(3). List by defined contribution plan
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance |
1. Basic endowment insurance | 555,518.72 | 21,693,211.19 | 21,611,300.01 | 637,429.90 |
2. Unemployment insurance | 23,725.90 | 769,926.93 | 771,076.38 | 22,576.45 |
3. Enterprise annuity payment | ||||
Total | 579,244.62 | 22,463,138.12 | 22,382,376.39 | 660,006.35 |
Other explanations:
□ Applicable √ Not applicable
40. Taxes payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Enterprise income tax | 111,162,751.37 | 63,190,175.54 |
Value added tax ("VAT") | 27,112,038.46 | 23,812,907.23 |
Property tax | 6,689,657.49 | 2,133,274.27 |
Withholding of personal income tax | 4,226,657.07 | 1,481,039.09 |
Urban maintenance and construction tax | 1,288,999.75 | 4,705,718.03 |
Surtax for education expenses | 1,003,854.07 | 2,598,933.67 |
Stamp duties | 796,591.64 | 175,861.55 |
Surcharge for local education | 619,094.66 | 1,732,622.45 |
Land use tax | 44,922.50 | |
Disabled security fund | 19,226.94 | 14,175.52 |
Consumption tax | 3,547.12 | |
Total | 152,918,871.45 | 99,893,176.97 |
Other explanations:
None
41. Other payables
Presentation by item
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Interests payable
(1). Presentation by category
□ Applicable √ Not applicable
Dividends payable
(2). Presentation by category
□ Applicable √ Not applicable
Other payables
(1). List other payables by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Security deposits | 46,394,144.19 | 52,827,845.96 |
Restricted share repurchase obligations | 164,976,000.00 | 5,628,128.21 |
Other | 5,022,039.22 | 3,706,179.38 |
Total | 216,392,183.41 | 62,162,153.55 |
(2). Important other payables with an account age of more than one year
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
42. Holding liabilities for sale
□ Applicable √ Not applicable
43. Non-current liabilities due within one year
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Lease liabilities due within one year | 2,549,452.14 | |
Total | 2,549,452.14 |
Other explanations:
None
44. Other current liabilities
Description of other current liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Short-term bonds payable | ||
Return payment payable | ||
Tax on items to be resold | 10,820,499.59 | 9,521,415.32 |
Total | 10,820,499.59 | 9,521,415.32 |
Changes in short-term bonds payable:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
45. Long-term borrowings
(1). Classification of long-term loans
□ Applicable √ Not applicable
Other explanations, including interest rate range:
□ Applicable √ Not applicable
46. Bonds payable
(1). Bonds payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Convertible corporate bonds | 724,491,557.93 | 695,586,778.80 |
Total | 724,491,557.93 | 695,586,778.80 |
(2). Changes of bonds payable: (excluding other financial instruments such as preferred shares andperpetual bonds classified as financial liabilities)
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Bonds Name | Face value | Issuance Date | Bonds Period | Issuance Amount | Opening balance | Current period Issuance | Interest accrued by face value | Premium or discount amortization | Current period Repayment | Impact of current share conversion | Ending balance |
Proya Convertible Bond | 100.00 | December 8, 2021 | 6 | 751,713,000.00 | 695,586,778.80 | 2,352,576.15 | 29,467,309.84 | 2,252,817.00 | 662,289.86 | 724,491,557.93 | |
Total | / | / | / | 751,713,000.00 | 695,586,778.80 | 2,352,576.15 | 29,467,309.84 | 2,252,817.00 | 662,289.86 | 724,491,557.93 |
(3). Descriptions of the conditions and time for conversion of convertible corporate bonds
√ Applicable □ Not applicable
With the approval issued by China Securities Regulatory Commission in the Approval on Public Issue ofConvertible Corporate Bonds of Proya Cosmetics Co., Ltd. (ZJXK [2021] No. 3408), on December 8,
2021, the Company issued 7,517,130 convertible corporate bonds to unspecified targets with the face valueof 100.00 RMB/share and the total issuance amount of RMB751,713,000.00.The coupon rate of the aforesaid convertible corporate bonds is 0.30% for the first year, 0.50% for thesecond year, 1.00% for the third year, 1.50% for the fourth year, 1.80% for the fifth year and 2.00% forthe sixth year. Annual interest payment dates are anniversaries of the date of initial offering of convertiblebonds. The Company will, no later than five trading days after the interests payment day of each year, paythe interests of the year and, no later than five trading days after the maturity date of convertible corporatebonds, redeem all unconverted convertible bonds from investors at a price of 115% of the par value of theconvertible bonds issued this time (including the annual interests of the last tranche).The convertible period of convertible bonds starts from the first trading day after the expiration of 6months from the issuance date of convertible bonds until the maturity date of convertible bonds. The initialconversion price shall be 195.98 RMB/share, in no case, lower than the average trading price of A sharesof the Company in the twenty trading days prior to the publication of the prospectus (if the stock price isadjusted for ex-dividend or ex-dividend in the twenty trading days, the closing price of the trading daybefore such adjustment is calculated according to the price after the ex-dividend or ex-dividend adjustment)or the average trading price of A shares of the Company in the previous trading day, and shall not beadjusted up.In May 2022, the Company completed the 2021 equity distribution plan. In accordance with the relevantprovisions of the Prospectus for the Public Offering of A-Share Convertible Corporate Bonds by ProyaCosmetics Co., Ltd. and the relevant regulations of the China Securities Regulatory Commission on theissuance of convertible corporate bonds, the share price of Proya convertible bonds was adjusted from
195.98 RMB/share to 139.37 RMB/share, and the adjusted price took effect on May 30, 2022 (ex-dividenddate).In the current period, a total of 7,760 convertible corporate bonds were converted, with an increase ofRMB5,517.00 in capital stock, an increase of RMB754,813.50 in capital reserve (capital stock premium),and a decrease of RMB53,111.99 in other equity instruments.
(4). Explanation on other financial instruments classified as financial liabilitiesBasic information of other financial instruments such as preferred shares and perpetual bonds issued at theend of the period
□ Applicable √ Not applicable
Statement of changes in financial instruments such as preferred shares and perpetual bonds issued at theend of the period
□ Applicable √ Not applicable
Explanation on the basis for classifying other financial instruments as financial liabilities:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
47. Lease liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Payable operating lease payment | 3,814,629.83 |
Unrecognized financing expenses | -96,510.42 | |
Total | 3,718,119.41 |
Other explanations:
None
48. Long-term accounts payable
Presentation by item
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Long-term payables
(1). Long-term payables presented by nature
□ Applicable √ Not applicable
Special accounts payable
(2). Special payables presented by nature
□ Applicable √ Not applicable
49. Long-term employee compensation payable
□ Applicable √ Not applicable
50. Estimated liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Ending balance | Cause of formation |
Provide external guarantees | |||
Pending litigations | |||
Product quality assurance | |||
Restructuring obligation | |||
Loss-making contract to be performed | |||
Return payment payable | 10,812,084.88 | 59,282,928.68 | Estimated future potential return losses |
Other | |||
Total | 10,812,084.88 | 59,282,928.68 | / |
Other particulars, including the particulars on key assumptions and estimates concerning estimatedsignificant liabilities
None
51. Deferred income
Information of deferred income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance | Cause of formation |
Government subsidies | 6,416,263.33 | 2,062,638.00 | 2,079,090.00 | 6,399,811.33 | Government subsidies |
Total | 6,416,263.33 | 2,062,638.00 | 2,079,090.00 | 6,399,811.33 | / |
Items involving government subsidies:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Liability item | Opening balance | Amount of new subsidies in the current period | Amount included in non-operating revenue in the current period | Amount included in other income in the current period | Other changes | Ending balance | Asset-related/income-related |
Subsidies for modified cosmetic technology | 6,416,263.33 | 2,062,638.00 | 2,079,090.00 | 6,399,811.33 | Asset-related |
Other explanations:
√ Applicable □ Not applicable
For the details on inclusion of government subsidies of the current period into the current profit or loss,refer to the particulars contained in "84. Government subsidies" in "VII. Notes to the Items of ConsolidatedFinancial Accounts" of "Section X Financial Report" of this report.
52. Other non-current liabilities
□ Applicable √ Not applicable
53. Capital stock
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase or decrease in the change (+, -) |
Opening balance | Issuance of shares | Bonus shares | Provident fund Share conversion | Other | Subtotal | Ending balance | |
Total shares | 201,009,966 | 2,100,000 | 80,403,986 | 5,517 | 82,509,503 | 283,519,469 |
Other explanations:
According to the resolution of the fifth meeting of the third session of Board of Directors, the resolutionof the 2021 annual general meeting of shareholders, the resolution of the sixth meeting of the third sessionof Board of Directors, the resolution of the first extraordinary general meeting of 2022, and the revisedarticles of association of the Company, the Company applied to increase its registered capital byRMB80,403,986.00, which was converted from capital reserves. The benchmark date for conversion wasDecember 31, 2021, and the changed registered capital was RMB281,413,952.00. The above matter hasbeen verified by Pan-China Certified Public Accountants LLP (Special General Partnership) which hasissued the Capital Verification Report (TJY (2022) No. 414).According to the resolution of the sixth meeting of the third session of Board of Directors, the resolutionof the seventh meeting of the third session of Board of Directors, the first extraordinary general meetingof 2022 and the provisions of the restricted share incentive agreement, the Company applied to increasethe registered capital by RMB2,100,000.00 through issuing 2,100,000 ordinary shares (A share) to 101incentive agreement participants, including SHEN Bin, at a price of 78.56 RMB/share (with the face valueof 1.00 RMB/share). The Company had received a total of RMB164,976,000.00 in monetary contributionsfrom 101 participants, including RMB2,100,000.00 included in the paid up capital andRMB162,876,000.00 included in the capital reserve (capital stock premium). The above matter has beenverified by Pan-China Certified Public Accountants LLP (Special General Partnership) which has issuedthe Capital Verification Report (TJY (2022) No. 415).In the current period, a total of 7,760 convertible corporate bonds were converted, with an increase ofRMB5,517.00 in capital stock, an increase of RMB754,813.50 in capital reserve (capital stock premium),and a decrease of RMB53,111.99 in other equity instruments.
54. Other equity instruments
(1). Basic information of other financial instruments such as preferred shares and perpetual bondsissued at the end of the period
□ Applicable √ Not applicable
(2). Statement of changes in financial instruments such as preferred shares and perpetual bonds
issued at the end of the period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Outstanding financial instruments | Opening | Current increase | Current decrease | Ending | ||||
Number | Book value | Number | Book value | Number | Book value | Number | Book value | |
Proya Convertible | 7,517,130 | 50,956,622.11 | 7,760 | 53,111.99 | 7,509,370 | 50,903,510.12 |
Changes of other equity instruments in the current period, Explanation on reasons for changes, and basisfor relevant accounting treatment:
□ Applicable √ Not applicable
Other notes:
√ Applicable □ Not applicable
The current decrease of RMB53,111.99 was due to the current conversion of 7,760 convertible corporatebonds into shares, with an increase of RMB5,517.00 in capital stock, an increase of RMB754,813.50 incapital reserve (capital stock premium), and a decrease of RMB53,111.99 in other equity instruments.
55. Capital reserve
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance |
Capital premium (Equity premium) | 799,674,532.76 | 183,791,378.23 | 125,277,272.12 | 858,188,638.87 |
Other capital reserve | 34,597,672.90 | 47,357,121.24 | 25,327,646.79 | 56,627,147.35 |
Total | 834,272,205.66 | 231,148,499.47 | 150,604,918.91 | 914,815,786.22 |
Other explanations, including the current changes and the explanation on the reasons for the changes:
1) Changes in capital premium
During the period, the capital premium (capital stock premium) increased by RMB183,791,378.23, ofwhich: ① RMB10,519,504.61 was increased due to the transfer of other capital reserves recognized forthe unlocked part of restricted shares issued under the equity incentive plan in the waiting period to thecapital stock premium; ② RMB9,641,060.12 was increased due to the difference between the price paidfor the purchase of minority shareholders' equity of the subsidiary Huzhou Younimi Cosmetics Co., Ltd.and the Company's share of identifiable net asset of the subsidiary calculated based on the newly-increasedshareholding ratio; ③ RMB162,876,000.00 was increased due to the equity incentive granted in theperiod and included in the capital reserve (refer to the explanation of "53. Capital stock" in "VII. Notes tothe Items of Consolidated Financial Statements" of "Section X Financial Report" of this report for details);
④ RMB754,813.50 was increased due to the current conversion of convertible corporate bonds intoshares (refer to the explanation of "46. Bonds payable" in "VII. Notes to the Items of ConsolidatedFinancial Statements" of "Section X Financial Report" of this report for details).The capital premium (equity premium) for the current period is reduced by RMB125,277,272.12: ① Thedecrease of RMB80,403,986.00 is due to the capitalization of capital reserves. For details, refer to theparticulars contained in the "53. Share capital" in "VII. Notes to the Items of Consolidated FinancialStatements" of "Section X Financial Report" of this report; ② The decrease of RMB44,873,286.12 is thedifference between the payment made for the purchase of the minority shares of the subsidiary NingboTIMAGE Cosmetics Co., Ltd. and the share of identifiable net assets of the subsidiary calculated accordingto the newly increased shareholding ratio;
Bond | ||||||||
Total | 7,517,130 | 50,956,622.11 | 7,760 | 53,111.99 | 7,509,370 | 50,903,510.12 |
2) Changes in other capital reserves
The increase of RMB47,357,121.24 in other capital reserve of the current period is due to the recognitionof RMB47,357,121.24 as 2022 restricted stock incentive fee and the inclusion of the same into othercapital reserve.The capital reserve for the current period is reduced by RMB25,327,646.79: ① The decrease ofRMB10,519,504.61 is the released part of restricted shares issued under the equity incentive plan, forwhich other capital reserve recognized during the waiting period is transferred to share premium; ② Thedecrease of RMB763,475.30 is due to the adjustment of capital reserve for the difference between theactual pre-tax deductible amount of released part and recognized amount of previous years; ③ Thedecrease of RMB14,044,666.88 is due to the write-back of the deferred tax asset of the part the estimatedpre-tax deductible amount in future period is higher than the recognized restricted stock incentive fee andthe write-down of other capital reserve.
56. Treasury stock
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance |
Restricted shares with repurchase obligation | 5,628,128.21 | 164,976,000.00 | 5,628,128.21 | 164,976,000.00 |
Total | 5,628,128.21 | 164,976,000.00 | 5,628,128.21 | 164,976,000.00 |
Other explanations, including the current changes and the explanation on the reasons for the changes:
During the period, the increase of RMB164,976,000.00 was primarily due to the grant of restricted sharesduring the period to the incentive objects. Refer to "53. Capital stock" in "VII. Notes to the Items ofConsolidated Financial Statements" of "Section X Financial Report" of this report for details.During the period, the current decrease of RMB5,628,128.21 was due to the unlocking of 347,201restricted shares by the Company according to the Proposal on Satisfying the Conditions for Release fromSales Restrictions in the Third Release Period for Initially Granted Shares and Reserved Shares Under2018 Restricted Share Incentive Plan deliberated and approved at the 4th meeting of the third session ofBoard of Directors of the Company held on January 20, 2022, with the grant price of 16.21 RMB/shareafter deducting the distributed cash dividends.
57. Other comprehensive income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Amount incurred in the current period | Ending balance | |||||
Amount incurred before income tax in the current period | Less: Included in other comprehensive income for the previous period and transferred in profit or loss for the current period | Less: Included in other comprehensive income for the previous period and transferred in retained earnings for the current period | Less: Income tax expenses | Attributed to parent company after tax | Attributed to minority shareholders after tax |
I. Other comprehensive income that will not be subsequently reclassified into profit and loss | ||||||||
Including: Remeasure the variation amount of defined benefit plan | ||||||||
Other comprehensive income that can't be reversed through profit and loss under equity method | ||||||||
Changes in the fair value of other equity instrument investments | ||||||||
Changes in the fair value of enterprise's own credit risk | ||||||||
II. Other comprehensive income that will be reclassified into profit or loss | -1,247,674.10 | -670,928.97 | -670,928.97 | -1,918,603.07 | ||||
Including: other comprehensive income that can be converted into gains and losses under the equity method | ||||||||
Changes in the fair value of other debt investments | ||||||||
Amount of financial assets reclassified into other comprehensive income |
Credit impairment provision of other debt investments | ||||||||
Cash flow hedge reserve | ||||||||
Difference from translation of financial statements in foreign currency | -1,247,674.10 | -670,928.97 | -670,928.97 | -1,918,603.07 | ||||
Total other comprehensive incomes | -1,247,674.10 | -670,928.97 | -670,928.97 | -1,918,603.07 |
Other explanations, including the adjustment of the effective part of cash flow hedging gains and lossesinto the initially recognized amount of the hedged item:
None
58. Special reserve
□ Applicable √ Not applicable
59. Surplus reserve
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance |
Legal surplus | 100,634,780.00 | 41,124,954.50 | 141,759,734.50 | |
Discretionary surplus reserve | ||||
Reserve fund | ||||
Enterprise development fund | ||||
Other | ||||
Total | 100,634,780.00 | 41,124,954.50 | 141,759,734.50 |
Explanation on surplus reserves, including the current changes and the explanation on the reasons for thechanges:
The increase of RMB41,124,954.50 for the current period is mainly due to the withdrawal of statutorysurplus reserve according to the net profit of the parent company. The statutory surplus reserve does notneed to be withdrawn if the cumulative amount reaches fifty percent or more of the registered capital, andis not withdrawn any more.
60. Retained profits
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Current period | Prior period |
Undistributed profit at the end of last period before adjustment | 1,696,978,064.52 | 1,265,671,865.63 |
Total undistributed profit at the beginning of the adjustment period (+ for increase, - for decrease) | ||
Unappropriated earnings at the beginning of period after adjustment | 1,696,978,064.52 | 1,265,671,865.63 |
Plus: net profit attributable to the owner of the parent company in the current period | 817,400,223.93 | 576,119,025.56 |
Less: Withdrawal of statutory surplus reserve | 41,124,954.50 | |
Withdrawal of any surplus reserves | ||
Withdrawal of general risk provision | ||
Dividends payable on common stock | 172,868,570.76 | 144,804,186.00 |
Common stock dividends converted to share capital | ||
Other decreases | 8,640.67 | |
Undistributed profit at the end of the period | 2,300,384,763.19 | 1,696,978,064.52 |
According to the Resolution of the 2021 Annual General Meeting of the Company, the Companydistributed cash dividends of RMB8.60 (tax inclusive) per 10 shares to all shareholders based on the totalshare capital of 201,009,966 shares registered on the registration date of dividend-paying equity, totalingRMB172,868,570.76 (tax inclusive).Details of the adjustment of the undistributed profit at the beginning of the period:
1. The undistributed profit affected by the retroactive adjustment in accordance with Accounting Standardsfor Business Enterprises and its related new regulations at the beginning of the period is RMB0.00.
2. The undistributed profit affected by the change of accounting policy at the beginning of the period isRMB0.00.
3. The undistributed profit affected by the correction of major accounting errors at the beginning of theperiod is RMB0.00.
4. The undistributed profit affected by the change of combination scope caused by the common control atthe beginning of the period is RMB0.00.
5. The undistributed profit affected by other adjustments at the beginning of the period is RMB0.00.
61. Operating revenue and operating costs
(1). Information of operating revenue and operating costs
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Revenue | Cost | Revenue | Cost | |
Main business | 6,361,763,550.69 | 1,916,352,535.29 | 4,620,431,686.01 | 1,545,098,469.32 |
Other business | 23,687,873.31 | 18,497,668.36 | 12,718,852.42 | 9,057,177.29 |
Total | 6,385,451,424.00 | 1,934,850,203.65 | 4,633,150,538.43 | 1,554,155,646.61 |
(2). Information of income generated by the contract
□ Applicable √ Not applicable
Income generated by the contract:
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
Other explanations:
1) Income breakdown by goods or service type
Main product type | Amount |
Products sales | 6,363,192,536.17 |
Other | 22,258,887.83 |
Subtotal | 6,385,451,424.00 |
2) Income breakdown by goods or service transfer time
Item | Amount for the current period | Amount for the same period last year |
Income recognized at a certain point | 6,383,224,182.76 | 4,630,019,693.64 |
Income recognized over a period | 2,227,241.24 | 3,130,844.79 |
Subtotal | 6,385,451,424.00 | 4,633,150,538.43 |
(3) Revenue included in the opening book value of contract liabilities during the period wasRMB90,434,839.12.
62. Taxes and surcharges
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Urban maintenance and construction tax | 25,692,368.39 | 17,952,927.40 |
Education surcharge | 12,641,385.47 | 9,040,908.31 |
Surcharge for local education | 8,447,813.01 | 6,041,735.14 |
Property tax | 6,663,485.15 | 6,121,024.24 |
Stamp duties | 2,921,661.26 | 1,391,884.80 |
Consumption tax | 14,370.78 | 67,697.81 |
Vehicle and vessel use tax | 10,724.88 | 19,195.60 |
Cultural undertaking construction tax | 2,700.00 | |
Land use tax | 44,922.50 | |
Total | 56,394,508.94 | 40,680,295.80 |
Other explanations:
None
63. Sales expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Image promotion expense | 2,419,867,469.08 | 1,673,478,545.28 |
Employee compensation | 314,177,020.39 | 259,892,827.21 |
Office allowances | 28,106,339.49 | 26,009,040.14 |
Travel expenses | 11,852,844.96 | 13,885,848.84 |
Meeting affair charges | 4,094,821.02 | 8,691,079.85 |
Equity incentive expense for restricted shares | 3,815,630.91 | |
Survey consulting fee | 3,156,462.06 | 5,815,173.17 |
Other | 766,765.04 | 3,761,562.24 |
Total | 2,785,837,352.95 | 1,991,534,076.73 |
Other explanations:
None
64. General and administrative expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Employee compensation and service fee | 156,737,777.08 | 127,971,906.74 |
Office allowance and business entertainment expenses | 61,368,432.01 | 45,243,541.73 |
Expenses for depreciation, amortization and lease | 45,778,417.02 | 43,230,494.44 |
Equity incentive expense for restricted shares | 38,406,625.33 | -372,647.76 |
Consultation and intermediary fee | 12,338,732.18 | 10,207,746.14 |
Travel expense and conference fee | 5,024,738.17 | 4,178,358.16 |
Other | 7,642,027.58 | 6,529,119.78 |
Total | 327,296,749.37 | 236,988,519.23 |
Other explanations:
None
65. Research and development expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Labor cost | 66,055,676.59 | 40,214,757.14 |
Outsourced R&D expense | 41,417,003.04 | 26,453,748.31 |
Direct input cost | 8,833,694.90 | 3,452,688.42 |
Expenses for depreciation, amortization and lease | 5,485,513.91 | 4,857,429.74 |
Equity incentive expense for restricted shares | 5,134,865.00 | |
Other | 1,082,351.05 | 1,605,027.22 |
Total | 128,009,104.49 | 76,583,650.83 |
Other explanations:
None
66. Financial expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Interest expenses | 13,019,503.91 | 9,759,260.83 |
Handling fees | 634,636.61 | 757,405.88 |
Exchange gains and losses | -2,943,538.91 | 10,095,095.58 |
Interest income | -51,707,124.62 | -28,096,157.42 |
Total | -40,996,523.01 | -7,484,395.13 |
Other explanations:
None
67. Other incomes
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Government subsidies pertinent | 2,079,090.00 | 2,079,090.00 |
to assets | ||
Government subsidies related to income | 36,384,642.07 | 13,369,872.01 |
Refund of service charges for withholding personal income tax | 507,799.10 | 473,539.34 |
VAT input tax addition and reduction | 93,574.45 | 535,768.10 |
Total | 39,065,105.62 | 16,458,269.45 |
Other explanations:
None
68. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Long-term equity investment income calculated by the equity method | -5,658,023.28 | -7,337,735.84 |
Investment income from disposal of long-term equity investment | ||
Investment income of held-for-trading financial assets during the holding period | ||
Dividend income from other equity instrument investments during the holding period | ||
Interest income from debt investment during the holding period | ||
Interest income from other debt investments during the holding period | ||
Investment income from disposal of held-for-trading financial assets | ||
Investment income from disposal of other equity instrument investments | ||
Investment income from disposal of debt investment | ||
Investment income from disposal of other debt investments | ||
Gains of debt restructuring | ||
Total | -5,658,023.28 | -7,337,735.84 |
Other explanations:
None
69. Net exposure hedging income
□ Applicable √ Not applicable
70. Income from the change in fair values
□ Applicable √ Not applicable
71. Credit impairment loss
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Loss on bad debts of notes receivable | ||
Loss on bad debts of accounts receivable | 741,308.99 | 5,361,282.08 |
Loss on bad debts of other receivables | -5,798,734.42 | -30,196,229.26 |
Impairment losses of debt investment | ||
Impairment losses of other debt investments | ||
Loss on bad debts of long-term receivables | ||
Impairment losses of contract assets | ||
Total | -5,057,425.43 | -24,834,947.18 |
Other explanations:
None
72. Asset impairment losses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
I. Loss on bad debts | ||
II. Loss for devaluation of inventories and impairment loss of contract performance cost | -94,640,937.84 | -38,843,121.45 |
III. Impairment loss of long-term equity investment | -66,771,744.63 | -14,670,468.59 |
IV. Impairment loss of investment real estate | ||
V. Asset impairment losses | ||
VI. Impairment loss from engineering materials | ||
VII. Impairment loss of projects under construction | ||
VIII. Impairment loss of productive biological assets | ||
IX. Impairment loss of oil and gas assets |
X. Impairment loss of intangible assets | ||
XI. Impairment loss of goodwill | ||
XII. Others | ||
Anticipated return losses | -3,471,872.81 | |
Total | -164,884,555.28 | -53,513,590.04 |
Other explanations:
None
73. Income from disposal of assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Gains from disposal of fixed assets | 60,155.60 | -112,183.24 |
Total | 60,155.60 | -112,183.24 |
Other explanations:
None
74. Non-operating revenue
Non-operating revenue
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in current non-recurring gains and losses |
Total profit from disposal of non-current assets | |||
Including: Gains from disposal of fixed assets | |||
Gains from disposal of intangible assets | |||
Non-monetary asset exchange profits | |||
Accepting donations | |||
Government subsidies | |||
Amount not required to be paid | 505,051.10 | 505,051.10 | |
Revenue from fines and liquidated damages | 252,782.71 | 160,694.23 | 252,782.71 |
Other | 421,052.52 | 89,158.66 | 421,052.52 |
Total | 1,178,886.33 | 249,852.89 | 1,178,886.33 |
Government subsidies included in the current profit or loss
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
75. Non-operating expenditure
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in current non-recurring gains and losses |
Total loss from disposal of non-current assets | 136,692.79 | 136,692.79 | |
Including: Loss from disposal of fixed assets | 136,692.79 | 136,692.79 | |
Loss from disposal of intangible assets | |||
Non-monetary asset exchange losses | |||
External donation | 1,434,600.00 | 3,700,000.00 | 1,434,600.00 |
Expenditure of overdue fine | 2,915,707.07 | 2,915,707.07 | |
Other | 126,645.38 | 101,835.06 | 126,645.38 |
Total | 4,613,645.24 | 3,801,835.06 | 4,613,645.24 |
Other explanations:
None
76. Income tax expenses
(1). Income tax expense statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Current income tax expense | 239,665,217.82 | 104,812,397.97 |
Deferred income tax expense | -16,798,498.26 | 5,934,490.34 |
Total | 222,866,719.56 | 110,746,888.31 |
(2). Adjustment process of accounting profit and income tax expense
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period |
Total profit | 1,054,150,525.93 |
Income tax expense calculated at statutory/applicable tax rate | 263,537,631.49 |
Impact of different tax rates applicable to subsidiaries | |
Impact of adjusting income tax in previous periods | 7,253,374.96 |
Impact of non-taxable income | |
Impact of non-deductible costs, expenses and losses | 4,619,849.58 |
Impact of utilization of deductible loss for which no deferred tax assets were previously recognized | -24,105,090.31 |
Impact of deductible temporary differences for which no deferred tax assets or deductible losses were recognized for the period | 65,506,404.65 |
Additional deductions for R&D expenditures | -16,980,175.15 |
Impact of applicable preferential tax rates | -76,965,275.66 |
Income tax expenses | 222,866,719.56 |
Other explanations:
□ Applicable √ Not applicable
77. Other comprehensive income
√ Applicable □ Not applicable
For the details on other comprehensive income, refer to the particulars contained in "57. OtherComprehensive Income" in "VII. Notes to the Items of Consolidated Financial Statements", of "SectionX Financial Report" of this report
78. Items in the cash flow statement
(1). Other cash received related to operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Interest income from bank deposits | 51,707,124.62 | 28,096,157.42 |
Government subsidies | 38,447,280.07 | 13,369,872.01 |
Receivables and payables and others | 9,345,735.71 | 13,148,492.13 |
Total | 99,500,140.40 | 54,614,521.56 |
Explanation on other cash received related to operating activities:
None
(2). Other cash paid related to operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Expenses paid in cash | 2,579,629,003.60 | 1,846,712,604.69 |
Other expenses paid in cash | ||
Receivables and payables and others | 36,679,087.31 | 18,273,196.33 |
Total | 2,616,308,090.91 | 1,864,985,801.02 |
Explanation on other cash paid related to operating activities:
None
(3). Other cash received related to investing activities
□ Applicable √ Not applicable
(4). Other cash paid related to investment activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Net cash payment of disposal of subsidiaries | 64,245,982.88 | |
Payment for construction deposit | 13,493,392.00 | |
Total | 77,739,374.88 |
Explanation on other cash paid related to investment activities:
None
(5). Other cash received from financing activities
□ Applicable √ Not applicable
(6). Other cash paid related to financing activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Amount for acquisition of minority equity | 46,085,313.00 | 181,983.21 |
Payment for operating lease rent | 1,319,087.27 | |
Payment for liquidation funds to minority shareholders | 859,171.61 | |
Payment for share repurchase | 1,733,805.39 | |
Expense for issuance of convertible bonds | 2,919,604.52 |
Total | 48,263,571.88 | 4,835,393.12 |
Explanation on other cash paid related to financing activities:
None
79. Supplementary information to cash flow statement
(1). Supplementary information to cash flow statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Supplementary information | Amount for the current period | Amount of previous period |
1. Reconciliation of net profits to cash flows from operating activities: | ||
Net profit | 831,283,806.37 | 557,053,687.03 |
Add: Asset impairment provision | 169,941,980.71 | 78,348,537.22 |
Credit impairment loss | ||
Depreciation of fixed assets, depletion of oil and gas assets and depreciation of productive biological assets | 52,552,861.25 | 47,382,558.76 |
Amortization of right-to-use assets | 1,071,299.90 | |
Amortization of intangible assets | 17,445,985.14 | 17,891,004.03 |
Amortization of long-term unamortized expenses | 17,522,556.64 | 30,679,385.75 |
Losses on disposal of fixed assets, intangible assets and other long-term assets ("-" for income) | -60,155.60 | 112,183.24 |
Losses on retirement of fixed assets ("-" refers to income) | 136,692.79 | |
Losses on changes in fair value ("-" refers to income) | ||
Financial expenses ("-" refers to income) | 13,019,503.91 | 9,759,260.83 |
Investment loss ("-" refers to income) | 5,658,023.28 | 7,337,735.84 |
Decrease in deferred income tax assets ("-" refers to increase) | -27,409,771.12 | 4,400,436.98 |
Increase in deferred income tax liabilities ("-" refers to decrease) | 10,611,272.86 | 1,534,053.36 |
Decrease in inventory ("-" refers to increase) | -315,753,506.27 | -30,645,504.60 |
Decrease in operating receivables ("-" refers to increase) | -28,573,373.07 | 62,613,217.00 |
Increase in operating payables ("-" refers to decrease) | 316,331,819.20 | 42,845,585.19 |
Other | 47,357,121.24 | 358,803.19 |
Net cash flow from operating activities | 1,111,136,117.23 | 829,670,943.82 |
2. Major investment and financing activities that do not involve cash receipts and payments: | ||
Conversion of debt into capital | ||
Convertible corporate bonds due within one year | ||
Fixed assets under finance lease | ||
3. Net changes in cash and cash equivalents: | ||
Ending balance of cash | 3,125,333,085.05 | 2,378,334,768.09 |
Less: Opening balance of cash | 2,378,334,768.09 | 1,401,850,754.88 |
Add: Ending balance of cash equivalents | ||
Less: Opening balance of cash equivalents | ||
Net increase in cash and cash equivalents | 746,998,316.96 | 976,484,013.21 |
(2). Net cash paid for acquisition of subsidiaries in the current period
□ Applicable √ Not applicable
(3). Net cash received from disposal of subsidiaries in the current period
□ Applicable √ Not applicable
(4). Composition of cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
I. Cash | 3,125,333,085.05 | 2,378,334,768.09 |
Including: Cash on hand | 20,176.08 | 22,348.23 |
Bank deposits that can be used for payment at any time | 3,048,251,723.18 | 2,338,747,508.20 |
Other monetary funds that can be used for payment at any time | 77,061,185.79 | 39,564,911.66 |
Funds deposited with the central bank for payment | ||
Deposits in other banks | ||
Funds for interbank lending | ||
II. Cash equivalents | ||
Including: Bond investment due within three months | ||
III. Ending balance of cash and cash equivalents | 3,125,333,085.05 | 2,378,334,768.09 |
Including: Cash and cash equivalents with restricted use by the parent company or a subsidiary of the group |
Amount of the commercial paper transferred by endorsement that does not involve cash receipts andpayments
Item | Amount for the current period | Amount for the previous period |
Amount of the commercial paper transferred by endorsement | 26,020,864.88 | 27,230,343.90 |
Including: Payment for goods | 26,020,864.88 | 27,230,343.90 |
Other explanations:
√ Applicable □ Not applicable
Supplementary information to the cash flow statement
Time point | Balance of monetary capital | Cash and cash equivalents | Amounts of differences | Causes of differences |
December 31, 2022 | 3,161,003,085.05 | 3,125,333,085.05 | 35,670,000.00 | It includes the fixed-term deposit of RMB30,000,000.00, the transformer fixed -term deposit of RMB250,000.00, the ETC vehicle deposit of RMB70,000.00, the Pingduoduo deposit of RMB5,000,000.00, and the Tmall and Alipay deposits of RMB350,000.00. |
December 31, 2021 | 2,391,048,249.81 | 2,378,334,768.09 | 12,713,481.72 | RMB293,481.72 fixed-term deposit margin for transformers, RMB7,000,000.00 L/C deposit, RMB70,000.00 ETC vehicle deposit, RMB5,000,000.00 Pinduoduo deposit, and RMB350,000.00 Tmall and Alipay deposits |
80. Notes on items in the statement of changes in owners' equity
Explanation on the names of "other" items for adjusting the ending balance of last year and adjustmentamounts:
□ Applicable √ Not applicable
81. Assets with limited ownership or use rights
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending book value | Cause for restrictions |
Cash and cash equivalents | 35,670,000.00 | Including transformer deposit, Pinduoduo deposit, L/C deposit, Tmall deposit, and Alipay deposit |
Notes receivable |
Inventories | ||
Fixed assets | ||
Intangible assets | ||
Total | 35,670,000.00 | / |
Other explanations:
None
82. Foreign-currency monetary items
(1). Foreign-currency monetary items
√ Applicable □ Not applicable
Unit: RMB
Item | Ending foreign currency balance | Converted exchange rate | Converted RMB at the end of period balance |
Cash and cash equivalents | - | - | 78,681,219.02 |
Including: SF | 22,953.48 | 7.5432 | 173,142.69 |
EUR | 4,823,916.14 | 7.4229 | 35,807,447.12 |
HKD | 19,833,443.38 | 0.8933 | 17,716,619.97 |
JPY | 314,448,186.96 | 0.0524 | 16,463,878.17 |
KRW | 311,989,121.00 | 0.0055 | 1,723,125.60 |
USD | 975,936.23 | 6.9646 | 6,797,005.47 |
Accounts receivable | - | - | 3,734,893.40 |
Including: EUR | 219,393.66 | 7.4229 | 1,628,537.20 |
HKD | 581,033.69 | 0.8933 | 519,019.96 |
JPY | 30,313,547.88 | 0.0524 | 1,587,156.74 |
KRW | 32,500.27 | 0.0055 | 179.50 |
Long-term borrowings | - | - | |
Including: USD | |||
EUR | |||
HKD | |||
Other receivables | 22,047,584.09 | ||
Including: EUR | 2,865,596.08 | 7.4229 | 21,271,033.15 |
HKD | 321,039.70 | 0.8933 | 286,775.13 |
JPY | 4,569,595.10 | 0.0524 | 239,254.86 |
KRW | 35,970.62 | 6.9646 | 250,520.95 |
Accounts payable | 7,799,354.24 | ||
Including: EUR | 806,683.38 | 7.4229 | 5,987,930.08 |
HKD | 273,057.42 | 0.8933 | 243,914.00 |
JPY | 29,938,312.39 | 0.0524 | 1,567,510.16 |
Other payables | 1,156,758.55 | ||
Including: EUR | |||
HKD | 455,798.03 | 0.8933 | 407,150.71 |
JPY | 14,316,968.56 | 0.0524 | 749,607.84 |
USD | 416.00 | 6.9646 | 2,897.27 |
Other explanations:
None
(2). Explanation on overseas operating entities: for important overseas operating entities, the mainoverseas operating places, functional currency and selection basis should be disclosed, and thereasons for changes in functional currency should also be disclosed.
√ Applicable □ Not applicable
Hapsode Co., Ltd., Hanna Cosmetics Co., Ltd. and Korea Younimi Cosmetics Co., Ltd. are domiciled inSouth Korea, with business income and expenditure dominated by Korean Won, and adopt KRW as theirfunctional currency. Hongkong Xinghuo Industry Limited, Hong Kong Zhongwen Electronic CommerceCo., Limited, HONGKONG XUCHEN TRADING LIMITED, HONGKONG KESHI TRADINGLIMITED, BOYA (Hong Kong) Investment Management Co., Limited, and Hong Kong WanyanElectronic Commerce Co., Limited are domiciled in Hong Kong and adopt RMB as the functional currency.O&R Co., Ltd. is domiciled in Japan, with business income and expenditure dominated by Japanese Yen,and adopts JPY as its functional currency.
83. Hedging
□ Applicable √ Not applicable
84. Government subsidies
(1). Basic information of government subsidies
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Type | Amount | Reported items | Amount included in the current profit or loss |
Government subsidies pertinent to assets | 2,079,090.00 | Other incomes | 2,079,090.00 |
Government subsidies related to income | 36,384,642.07 | Other incomes | 36,384,642.07 |
(2). Return of government subsidies
□ Applicable √ Not applicable
Other explanations:
None
85. Other
√ Applicable □ Not applicable
(1) Details
1) Government subsidies related to assets
Item | Opening Deferred income | Current period New subsidy | Amortization in the current period | Ending Deferred income | Amortization in the current period Reported items | Note |
Subsidies for modified cosmetic technology | 6,416,263.33 | 2,062,638.00 | 2,079,090.00 | 6,399,811.33 | Other incomes | |
Subtotal | 6,416,263.33 | 2,062,638.00 | 2,079,090.00 | 6,399,811.33 |
According to the Decision on the Award for Technical Transformation of Proya Cosmetics Co., Ltd.Huzhou Branch issued by the People's Government of Daixi Town, Huzhou,the Company receivedtechnical transformation subsidy of RMB14,561,400.00 from the Government of Daixi Town in 2014, andapportioned the subsidy on an average basis over the service life of the asset. RMB1,456,140.00 wasrecorded in the other income in the current period.According to the Notice on Issuing Construction and Development Fund (First Batch) for PowerfulIndustrial City in 2015 (HCQ [2015] No. 150) issued by Huzhou Finance and Huzhou Economy andInformation Bureau, the technical transformation subsidy of RMB2,350,000.00 was paid by HuzhouFinance in 2015. The Company apportioned the subsidy on an average basis over the service life of theasset. RMB235,000.00 was recorded in the other income in the current period.According to the Notice on Issuing Special Funds (Second Batch) for "Machine Substitution for Humans"Project in 2014 (WFG [2015] No. 18) issued by Development and Reform Commission of Wuxing District,Huzhou and Finance Bureau of Wuxing District, the technical transformation subsidy of RMB500,000.00was paid by Finance Bureau of Wuxing District, Huzhou in 2015. The Company apportioned the subsidyon an average basis over the service life of the asset. RMB50,000.00 was recorded in the other income inthe current period.According to the Notice on Issuing Special Funds (Second Batch) for Industrial Development in Huzhouin 2018 (HCQ [2018] No. 319) issued by Huzhou Finance and Huzhou Economy and Information Bureau,the technical transformation subsidy of RMB1,379,500.00 was paid by Huzhou Finance in December 2018.The Company apportioned the subsidy on an average basis over the service life of the asset.RMB137,950.00 was recorded in the other income in the current period.According to the Notice on Allocating Special Subsidy Funds for 2019 Demonstration IntelligentWorkshop in Wuxing District (W.C.Q.H. [2020] No.145) issued by Wuxing District Finance Bureau andWuxing District Development, Reform, and Economic Information Technology Bureau, in May 2020, atechnical renovation subsidy of RMB2,000,000.00 was allocated to the Company by Huzhou WuxingDistrict Finance Bureau, which was evenly distributed by the Company throughout the service life of theformed related assets and of which RMB200,000.00 was included in current other income.According to the Agreement of Investment for Construction and Land Use sign between the Company andthe People's Government of Daixi Town, Wuxing District, Huzhou City, in January 2022, the People'sGovernment of Daixi Town, Wuxing District, Huzhou City invested RMB2,062,638.00 of constructionsubsidy. As of December 31, 2022, the project had not finished yet.
2) Government subsidies related to income and used to compensate the Company for relevant costs orlosses incurred
Item | Amount | Reported items | Note |
Enterprise development support fund | 18,000,000.00 | Other incomes | Allocated by Ningbo Meishan Bonded Port Area Finance Bureau according to the investment promotion contract signed by the Company with Ningbo Meishan Bonded Port Area Finance Bureau |
Enterprise development support fund | 15,734,700.00 | Other incomes | Allocated by Huzhou Wuxing District Finance Bureau according to the Notice of the Office of Wuxing District People's Government on Issuing the Implementation Opinions on the High Quality Development of Manufacturing Industry in Wuxing District (2020-2024) (W.Z.B.F. [2022] No. 42) |
Job stabilization subsidies | 1,428,408.19 | Other incomes | Allocated by Hangzhou Municipal Employment Management Service Center according to the documents including the Notice of Zhejiang Provincial Department of Human Resources and Social Security, Zhejiang Provincial Department of Finance, and Zhejiang Provincial Tax Service, State Taxation Administration on Doing a Good Job in Providing Unemployment Insurance to Stabilize Jobs, Improve Skills, and Prevent Unemployment (Z.R.S.F.(2022) No.37) |
Special funds for business development | 950,000.00 | Other incomes | Allocated by Hangzhou Xihu District Bureau of Commerce according to documents including the Notice of Hangzhou Municipal Bureau of Commerce on Issuing the Implementation Rules for the Policy of Increasing Support for the Wholesale and Retail Industry and the Accommodation and Catering Industry |
Special funds for technology development | 200,000.00 | Other incomes | Allocated by Hangzhou Xihu District Bureau of Science and Technology, according to the Notice on Issuing the Fifth Batch of Hangzhou Special Science and Technology Development Fund for 2022 (H.C.J. [2022] No. 22) |
Other subsidies such as intellectual property subsidy funds, Party organization funds, and patent subsidy funds | 71,533.88 | Other incomes | Allocated by Hangzhou Xihu District Market Supervision Bureau, Hangzhou Xihu District People's Government Xixi Sub-district Office, State Treasury Huzhou Central Branch, and Ningbo Meishan FTZ Finance Bureau |
Subtotal | 36,384,642.07 |
(2) The amount of government subsidies included in the current profit or loss in the current period wasRMB38,463,732.07.
VIII. Change of Consolidation Scope
1. Business combination not under common control
□ Applicable √ Not applicable
2. Business combination under common control
□ Applicable √ Not applicable
3. Counter purchase
□ Applicable √ Not applicable
4. Disposal of subsidiaries
Is there a single disposal of investment in a subsidiary, that is, is there a loss of control
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
5. Change of combination scope for other reasons
Explain the changes in the consolidation scope caused by other reasons (for example, newly established subsidiary, liquidated subsidiary, etc.) and the specificinformation:
√ Applicable □ Not applicable
(I) Increase of consolidation scope
Company name | Equity acquisition method | Time point of equity acquisition | Contribution amount | Contribution ratio |
Xuzhou Laibo Information Technology Co., Ltd. | Newly established subsidiary | January 2022 | 100.00% | |
Hangzhoun TIMAGE Cosmetics Co., Ltd. | Newly established subsidiary | March 2022 | 1,000,000.00 | 100.00% |
Proya (Zhejiang) Cosmetics Co., Ltd. | Newly established subsidiary | May 2022 | 100.00% | |
Hangzhou Donghai Wangchao Catering Management Co., Ltd. | Newly established subsidiary | September 2022 | 100.00% | |
Hangzhou Boxin Trade Co., Ltd. | Newly established subsidiary | December 2022 | 100.00% |
(II) Decrease of consolidation scope
Company name | Equity disposal method | Time point of equity disposal | Net assets as at the disposal date | From the beginning of the period to the disposal date Net profit |
Xuzhou Proya Information Technology Co., Ltd. | Cancel | July 2022 | 1,408,790.53 | -364,888.38 |
Huzhou Boyun Electronic Commerce Co., Ltd. | Cancel | August 2022 | 2,151,631.53 | 41,571.37 |
6. Other
□ Applicable √ Not applicable
IX. Equity in Other Entities
1. Equity in subsidiaries
(1). Composition of enterprise group
√ Applicable □ Not applicable
Subsidiary Name | Main place of business | Registration place | Nature of business | Shareholding ratio (%) | Mode of acquisition | |
Direct | Indirect | |||||
Hangzhou Proya Trade Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
Zhejiang Meiligu Electronic Commerce Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
Huzhou Chuangdai E-commerce Co., Ltd. | Huzhou | Huzhou | Wholesale and retail | 100.00 | Establishment | |
Hapsode (Hangzhou) Cosmetics Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
Huzhou UZERO Trading Co., Ltd. | Huzhou | Huzhou | Wholesale and retail | 100.00 | Establishment | |
Hongkong Xinghuo Industry Limited | Hong Kong | Hong Kong | Wholesale and retail | 100.00 | Establishment | |
Mijing Siyu (Hangzhou) Cosmetics Co., Ltd. | Hangzhou | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
Ningbo TIMAGE Cosmetics Co., Ltd. | Ningbo | Ningbo | Wholesale and retail | 71.36 | Establishment |
Explanation on the shareholding ratio in subsidiaries different from the voting ratio;None
Basis for holding half or less voting rights but still controlling the investee, and holding more than halfvoting rights but not controlling the investee:
None
Basis for controlling the important structured entities included in the consolidation scope:
None
Basis for determining whether a company is an agent or a principal:
None
Other explanations:
None
(2). Important non-wholly owned subsidiary
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Name of subsidiary | Shareholding ratio of the minority shareholder Percentage | Gain or loss attributable to minority shareholders in the current period | Dividends declared and distributed to minority shareholders in the current period | Balance of minority interest at the end of the period |
Ningbo TIMAGE Cosmetics Co., Ltd. | 28.64% | 23,146,719.87 | 18,282,355.15 |
Explanation on the shareholding ratio of minority shareholder in subsidiaries different from the votingratio:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
(3). Major financial information of important non-wholly-owned subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Name of subsidiary | Ending balance | Opening balance | ||||||||||
Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Ningbo TIMAGE Cosmetics Co., Ltd. | 173,712,882.33 | 5,198,059.78 | 178,910,942.11 | 112,248,423.70 | 1,672,655.27 | 113,921,078.97 | 83,031,785.97 | 94,867.22 | 83,126,653.19 | 94,774,666.19 | 94,774,666.19 |
Name of subsidiary | Amount incurred in the current period | Amount incurred in the previous period | ||||||
Operating revenue | Net profit | Total comprehensive incomes | Cash flows generated from operating activities | Operating revenue | Net profit | Total comprehensive incomes | Cash flows generated from operating activities | |
Ningbo TIMAGE | 571,701,521.25 | 76,095,826.44 | 76,095,826.44 | 36,940,377.15 | 280,899,630.28 | 10,089,908.81 | 10,089,908.81 | 36,200,196.82 |
CosmeticsCo., Ltd.
Other explanations:
None
(4). Major restrictions on using enterprise group assets and paying off enterprise group debts
□ Applicable √ Not applicable
(5). Financial support or other support provided to structured entities included in the scope of
consolidated financial statements
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
2. Transactions where the share of owners' equity in a subsidiary changes and the subsidiary is
still controlled
√ Applicable □ Not applicable
(1). Explanation on changes in the share of owners' equity in subsidiaries on equity
√ Applicable □ Not applicable
Name of subsidiary | Time of change | Shareholding ratio before change | Shareholding ratio after change |
Huzhou Younimi Cosmetics Co., Ltd. | October 2022 | 51.00% | 100.00% |
Ningbo TIMAGE Cosmetics Co., Ltd. | February 2022 | 61.36% | 71.36% |
(2). The impact of transactions on minority shareholders' equity and the equity attributable to theparent company
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Huzhou Younimi Cosmetics Co., Ltd. | Ningbo TIMAGE Cosmetics Co., Ltd. |
Purchase cost/disposal consideration | ||
- Cash | 1,085,313.00 | 45,000,000.00 |
- Fair value of non-cash assets | ||
Total purchase cost/disposal consideration | 1,085,313.00 | 45,000,000.00 |
Less: The net asset share of a subsidiary calculated according to the proportion of the equity acquired/disposed of | 10,726,373.12 | 126,713.88 |
Difference | -9,641,060.12 | 44,873,286.12 |
Including: Adjustment to capital reserves | -9,641,060.12 | 44,873,286.12 |
Adjustment to surplus reserves | ||
Adjustment to undistributed profits |
Other explanations
□ Applicable √ Not applicable
3. Rights and interests in joint ventures and affiliates
√ Applicable □ Not applicable
(1). Important joint ventures and affiliates
□ Applicable √ Not applicable
(2). Major financial information of important joint ventures
□ Applicable √ Not applicable
(3). Major financial information of important affiliates
□ Applicable √ Not applicable
(4). Summary financial information of unimportant joint ventures and affiliates
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance/amount incurred in the current period | Beginning balance/amount incurred in previous period | |
Joint ventures: | ||
Total book value of investment | 3,068,948.16 | 3,074,758.68 |
Total of the following items calculated according to the shareholding ratio | ||
- Net profits | -5,810.52 | -231,871.89 |
- Other comprehensive income | ||
- Total comprehensive income | -5,810.52 | -231,871.89 |
Affiliates: | ||
Total book value of investment | 135,464,429.30 | 166,884,777.60 |
Total of the following items calculated according to the shareholding ratio | ||
- Net profits | -5,652,212.76 | -7,105,863.95 |
- Other comprehensive income | ||
- Total comprehensive income | -5,652,212.76 | -7,105,863.95 |
Other explanationsNone
(5). Statement of important restrictions on the ability of joint ventures or associates to transfercapital to the Company
□ Applicable √ Not applicable
(6). Excess losses incurred by joint ventures or affiliates
□ Applicable √ Not applicable
(7). Unconfirmed commitments related to investments in joint ventures
□ Applicable √ Not applicable
(8). Contingent liabilities related to investments in joint ventures or associates
□ Applicable √ Not applicable
4. Important joint operations
□ Applicable √ Not applicable
5. Rights and interests in structured entities not included in the scope of consolidated financialstatementsExplanation on structured entities not included in the scope of consolidated financial statements:
□ Applicable √ Not applicable
6. Other
□ Applicable √ Not applicable
X. Risks Related to Financial Instruments
√ Applicable □ Not applicable
The Company's risk management aims to reach balancing between risks and benefits, to minimize thenegative impact of risks on the Company's operating results, and to maximize the interests of shareholdersand other equity investors. Based on these risk management goals, the Company's basic strategy for riskmanagement is to determine and analyze various risks faced by the Company, establish an appropriate risktolerance bottom line and conduct risk management, and supervise various risks in a timely and reliablemanner to control the risks within a limited scope.The Company faces various risks related to financial instruments in its daily activities, including creditrisk, liquidity risk and market risk. The management has deliberated and approved the policing governingthese risks as outlined below:
(I) Credit riskCredit risk refers to the risk that one party of a financial instrument fails or is unable to fulfill its obligations,resulting in financial losses to the other party.
1. Credit risk management practice
(1) Assessment method of credit risk
The Company, on each balance sheet date, assesses whether the credit risk of relevant financialinstruments has increased significantly since initial recognition. In determining whether the credit risk hasincreased significantly since initial recognition, the Company takes into account the reasonable and well-
founded information available without unnecessary additional costs or efforts, including qualitative andquantitative analysis based on historical data, external credit risk rating and forward-looking information.The Company determines the changes that may result in default risk of financial instruments within theirexpected duration by comparing the default risk of the financial instruments on the balance sheet date andthe initial recognition date based on an individual financial instrument or the combined financialinstruments with similar credit risk characteristics.The Company deems that the credit risk of the financial instruments has increased significantly if any oneor more of the following quantitative and qualitative standards are triggered:
1) The main quantitative standard is that the probability of default within the remaining duration on thebalance sheet date has increased by more than certain proportion compared with that at the initialrecognition;
2) The main qualitative standard is that there are material adverse changes occurring to the business orfinancial conditions of the debtor and changes in the exiting or anticipated technology, market, economicor legal environment which have a material adverse effect on the debtor's ability to make repayment to theCompany.
(2) Definitions of default and assets with credit impairment
If the financial instruments meet any one or more of the following conditions, the Company defines thefinancial assets as in default, with its standard consistent with the definition of credit impairment:
1) The debtor faces major financial difficulties;
2) The debtor breaches the provisions governing it in the contract;
3) The debtor is very likely to become bankrupt or go into other financial restructuring proceedings;
4) The creditor makes a concession to the debtor which it will not make under any other circumstances forthe economic or contractual considerations in connection with the debtor's financial difficulties.
2. Measurement of expected credit loss
The key parameters for measurement of expected credit loss include the probability of default, loss givendefault and default risk exposure. The Company builds the models of probability of default, loss givendefault and default risk exposure considering the quantitative analysis of historical statistical data (such ascounterparty rating, guarantee type, category of collateral and pledge, repayment method) and forward-looking information.
3. For the details on the Reconciliation Statement of Beginning Balance and Ending Balance of FinancialInstrument Loss Provisions, refer to the particulars contained in "5. Accounts receivable, 6. Receivablefinancing and 8. Other receivables" in "VII. Notes to the Items of Consolidated Financial Statements" of"Section X Financial Report" of this report.
4. Credit risk exposure and credit risk concentration
The credit risk of the Company is derived mainly from the monetary capital and accounts receivable. Tocontrol the above related risk, the Company has respectively taken the following measures.
(1) Monetary capital
The bank deposit and other monetary capitals of the Company were deposited with financial institutionswith high credit rating; therefore, the credit risk was low.
(2) Accounts receivable
The Company continuously carries out credit assessment on customers who trade in credit. According tothe result of credit assessment, the Company deals with approved and credible customers, and monitorsthe balance of its accounts receivable, so as to prevent significant bad debt risk.No guarantee is required as the Company only transacts with recognized and reputable third parties. Creditrisk concentration is managed as per customers. As at December 31, 2022, there was certain creditconcentration risk in the Company and 68.05% (December 31, 2021: 77.35%) of the accounts receivable
of the Company were concentrated on top five customers in the balance of account receivable. TheCompany had no guarantee or other credit enhancement on the balance of the accounts receivable.The maximum credit risk exposure of the Company is the book value of the financial assets in the balancesheet.(II) Liquidity riskLiquidity risk refers to the risk of shortage of funds when the Company fulfills its obligation to settle bydelivering cash or other financial assets. Liquidity risk may arise from the inability to sell financial assetsat fair value as soon as possible, the counterparty's inability to pay off its contractual debt, the accelerationof debt or the inability to generate expected cash flow.To control such risk, the Company applies various financing methods, such as bill settlement and bankloans, in appropriate combination of long-term and short-term financing ways to optimize the financingstructure and keep the balancing between financing sustainability and flexibility. The Company hasobtained lines of credit from several commercial banks to satisfy its working capital demand and capitalexpenditure.Classification of financial liabilities by the remaining due days
Item | Ending amount | ||||
Book value | Undiscounted contract value | Within 1 year | 1 - 3 years | Above 3 years | |
Short-term borrowings | 200,195,890.41 | 201,900,886.94 | 201,900,886.94 | ||
Notes payable | 69,626,352.12 | 69,626,352.12 | 69,626,352.12 | ||
Accounts payable | 475,427,484.23 | 475,427,484.23 | 475,427,484.23 | ||
Other payables | 216,392,183.41 | 216,392,183.41 | 216,392,183.41 | ||
Bonds payable | 724,491,557.93 | 900,552,174.00 | 3,754,685.00 | 18,773,425.00 | 877,094,416.00 |
Lease liabilities | 3,718,119.41 | 3,718,119.41 | 3,718,119.41 | ||
Non-current liabilities due within one year | 2,549,452.14 | 2,549,452.14 | 2,549,452.14 | ||
Subtotal | 1,692,401,039.65 | 1,870,166,652.25 | 969,651,043.84 | 22,491,544.41 | 877,094,416.00 |
(Continued)
Item | Balance at the end of the previous year | ||||
Book value | Undiscounted contract value | Within 1 year | 1 - 3 years | Above 3 years | |
Short-term borrowings | 200,251,506.85 | 201,745,068.49 | 201,745,068.49 | ||
Notes payable | 79,156,771.40 | 79,156,771.40 | 79,156,771.40 | ||
Accounts payable | 404,026,241.16 | 404,026,241.16 | 404,026,241.16 | ||
Other payables | 62,162,153.55 | 62,162,153.55 | 62,162,153.55 | ||
Bonds payable | 695,586,778.80 | 902,807,313.00 | 2,255,139.00 | 11,275,695.00 | 889,276,479.00 |
Subtotal | 1,441,183,451.76 | 1,649,897,547.60 | 749,345,373.60 | 11,275,695.00 | 889,276,479.00 |
(III) Market risk
Market risk refers to that the fair value or future cash flow of financial instruments may fluctuate due tochanges in market prices. Market risks include interest rate and foreign exchange risks.
1. Interest rate risk
Interest rate risk refers to that the fair value or future cash flow of financial instruments may fluctuate dueto changes in market interest rates. The interest-bearing financial instruments with a fixed interest ratecause the interest rate risk of fair value, and those with a floating interest rate cause the interest rate riskof cash flow. The Company determines the proportion of financial instruments with a fixed interest rateand financial instruments with a floating interest rate according to the market environment, and maintainsan appropriate combination of financial instruments through regular review and monitoring.
2. Foreign exchange risk
Foreign exchange risk refers to that the fair value or future cash flow of financial instruments will fluctuatedue to the change of foreign exchange rate. The risk of changes in foreign exchange rates faced by theCompany is mainly related to the Company's foreign currency assets and liabilities. The Company carriesout business in the Chinese mainland, and therefore has main activities valuated in RMB. Therefore, themarket risk of foreign exchange changes faced by the Company is minor.For the details on foreign-currency monetary assets and liabilities of the Company at the end of the period,refer to the particulars contained in "82. Foreign-currency monetary items" in "VII. Notes to the Items ofConsolidated Financial Statements" of "Section X Financial Report" of this report.
XI. Disclosure of Fair Value
1. Ending fair value of assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending fair value | |||
The first level of fair value measurement | The second level of fair value measurement | The third level of fair value measurement | Total | |
I. Continuous fair value measurement | ||||
(I) Held-for-trading financial assets | ||||
1. Financial assets measured at fair value through profit or loss | ||||
(1) Debt instrument investment | ||||
(2) Equity instrument investment | ||||
(3) Derivative financial assets | ||||
2. Financial assets designated as measured at fair value through profit or loss | ||||
(1) Debt instrument investment | ||||
(2) Equity instrument investment |
(II) Other debt investments | ||||
(III) Other equity instrument investments | 146,402,400.00 | 146,402,400.00 | ||
(IV) Investment real estate | ||||
1. Land use right for lease | ||||
2. Leased buildings | ||||
3. Land use rights that are held for transfer upon appreciation | ||||
(V) Biological assets | ||||
1. Consumable biological assets | ||||
2. Productive biological assets | ||||
Total assets continuously measured at fair value | 146,402,400.00 | 146,402,400.00 | ||
(VI) Held-for-trading financial liabilities | ||||
1. Financial liabilities measured at fair value through profit or loss | ||||
Including: Trading bonds issued | ||||
Derivative financial liabilities | ||||
Other | ||||
2. Financial liabilities designated to be measured at fair value through profit or loss | ||||
Total liabilities continuously measured at fair value | ||||
II. Non-continuous Fair Value Measurement | ||||
(I) Held-for-sale assets | ||||
Total assets not continuously measured at fair value | ||||
Total liabilities not continuously measured at fair value |
2. Determination basis for the market price of continuous and non-continuous first-level fairvalue measurement items
□ Applicable √ Not applicable
3. Qualitative and quantitative information on the valuation techniques and important
parameters used in continuous and non-continuous second-level fair value measurement items
□ Applicable √ Not applicable
4. Qualitative and quantitative information on the valuation techniques and importantparameters used in continuous and non-continuous third-level fair value measurement items
√ Applicable □ Not applicable
For other equity instrument investments held, historical cost is used as their fair value.
5. Adjustment information and sensitivity analysis of non-observable parameters betweenbeginning and ending book value for continuous third-level fair value measurement items
□ Applicable √ Not applicable
6. For continuous fair value measurement items, if the conversion occurs among different levelswithin the current period, the reasons for the conversion and the policy for determining theconversion time point
□ Applicable √ Not applicable
7. Changes in valuation techniques during the current period and the reasons for the changes
□ Applicable √ Not applicable
8. Fair value of financial assets and liabilities not measured at fair value
□ Applicable √ Not applicable
9. Other
□ Applicable √ Not applicable
XII. Related Parties and Transactions
1. Information about the parent company of the Company
□ Applicable √ Not applicable
2. Information on subsidiaries of the Company
Refer to the notes for the details on subsidiaries of the Company
√ Applicable □ Not applicable
For the details on subsidiaries of the Company, refer to the particulars contained in "IX. Interests in OtherEntities" of "Section X Financial Report" of this report.
3. Information on joint ventures and associated enterprises of the CompanyRefer to the notes for details of the important joint ventures or associates of the Company
□ Applicable √ Not applicable
Information about other joint ventures or associates that have related transactions with the Company inthe current period, or have balance resulting from related transactions with the Company in the previousperiod is as follows
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
4. Information of other related parties
√ Applicable □ Not applicable
Name of other related parties | Relationship between other related parties and the Company |
Zhejiang Yueqing Rural Commercial Bank Co., Ltd. | Other |
Huzhou Beauty Town Technology Incubation Park Co., Ltd. | Other |
Ningbo Weiman Cosmetics Co., Ltd. | Other |
CBIC | Other |
Zhuhai Healthlong Biotechnology Co., Ltd. | Other |
Shaoxing Keqiao Qingteng Culture Investment Co., Ltd. | Other |
PARISEZHAN HK LIMITED | Other |
EURLPHARMATICA | Other |
SARLORTUS | Other |
S.A.SAREDIS | Other |
Korea Youke Co., Ltd. | Other |
Shanghai Youke Brand Management Co., Ltd. | Other |
Shanghai Youke Jiabei Technology Co., Ltd. | Other |
Pan Xiang | Other |
Beauty Hi-tech Innovation Co., Ltd. | Other |
[Note] Transactions between subsidiaries Hong Kong Keshi Trading Co., Ltd., Ningbo Keshi TradingLimited, Korea Younimi Cosmetics Co., Ltd., Huzhou Younimi Cosmetics Co., Ltd., O&R Co., Ltd.,Zhejiang Qingya Culture Art Communication Co., Ltd., and their minority shareholders or companiescontrolled by the actual controllers of their minority shareholders have been disclosed in "5. Informationof related transactions" in "XII. Others" of "Section X Financial Report" of this report by referring to theprovisions on related-party transactions.Other explanationsNone
5. Information of related transactions
(1). Related transactions of purchasing and selling goods, providing and receiving labor servicesStatement of purchasing goods/accepting labor services
√ Applicable □ Not applicable
Unit: RMB’0,000 Currency: RMB
Related parties | Related transaction content | Amount incurred in the current period | Approved transaction limit (if applicable) | Whether the transaction limit is exceeded (if applicable) | Amount incurred in the previous period |
Zhuhai Healthlong Biotechnology Co., Ltd. | Purchase of goods | Not applicable | 2,456.11 | ||
Beauty Hi-tech Innovation Co., Ltd. | Purchase of goods | 32.50 | Not applicable | 35.16 | |
Ningbo Weiman Cosmetics Co., Ltd. | Purchase of goods | 10.79 | Not applicable | 12.22 |
Statement of sales of goods/provision of services
√ Applicable □ Not applicable
Unit: RMB’0,000 Currency: RMB
Related parties | Related transaction content | Amount incurred in the current period | Amount incurred in the previous period |
Shanghai Youke Brand Management Co., Ltd. | Sales of goods | 1,228.90 | 8,198.31 |
Shanghai Youke Jiabei Technology Co., Ltd. | Sales of goods | 3,361.65 | |
Ningbo Weiman Cosmetics Co., Ltd. | Sales of goods | 63.08 | 6.99 |
CBIC | Sales of goods | 0.33 | 0.30 |
PARISEZHAN HK LIMITED | Sales of goods | 842.97 | |
Korea Youke Co., Ltd. | Sales of goods | 136.06 | |
Shaoxing Keqiao Qingteng Culture Investment Co., Ltd. | Sales of goods | 2.62 | |
Zhejiang Yueqing Rural Commercial Bank Co., Ltd. | Sales of goods | 1.41 |
Explanation on related party transactions in purchasing and selling goods, providing and receiving laborservices
□ Applicable √ Not applicable
(2). Related entrusted management/contracting and entrusted management/outsourcingStatement of entrusted management/contracting of the Company:
□ Applicable √ Not applicable
Explanation on related trusteeship/contracting
□ Applicable √ Not applicable
Statement of entrusted management/outsourcing of the Company
□ Applicable √ Not applicable
Explanation on related management/outsourcing
□ Applicable √ Not applicable
(3). Information of related lease
The Company as the lessor:
□ Applicable √ Not applicable
The Company as the lessee:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Name of lessor | Types of leased assets | Rent expenses of short-term leases and low-value asset leases subject to simplified treatment (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Rent paid | Interest expenses on lease liabilities assumed | Right-of-use assets increased | |||||
Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | Amount incurred in the current period | Amount incurred in the previous period | ||
Huzhou Beauty Town Technology Incubation Park Co., Ltd. | Field | 386,182.00 | 15,292.30 | 693,678.71 |
Explanation on related lease
□ Applicable √ Not applicable
(4). Information of related guarantee
The Company as the guarantor
□ Applicable √ Not applicable
The Company as the guarantee
□ Applicable √ Not applicable
Description of related guarantee
□ Applicable √ Not applicable
(5). Borrowing of related party funds
□ Applicable √ Not applicable
(6). Information of asset transfer and debt restructuring of related parties
□ Applicable √ Not applicable
(7). Remuneration of key management personnel
√ Applicable □ Not applicable
Unit: RMB’0,000 Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Remuneration of key management personnel | 666.40 | 700.02 |
[Note] Relevant remuneration recognized without stock payment
(8). Other related party transactions
√ Applicable □ Not applicable
The Company and its subsidiaries have opened bank accounts with Zhejiang Yueqing Rural CommercialBank Company Limited and collected the interests accrued on their deposits at the market interest rate.
(1) Deposits with related party banks
Unit: RMB’0,000
Related parties | Related transaction content | Ending amount | Amount for the same period last year |
Zhejiang Yueqing Rural Commercial Bank Co., Ltd. | Cash at bank | 0.00 | 14,645.33 |
(2) Interests collected from related parties
Unit: RMB’0,000
Related parties | Related transaction content | Amount for the current period | Amount for the same period last year |
Zhejiang Yueqing Rural Commercial Bank Co., Ltd. | Interest income | 144.49 | 638.49 |
6. Accounts receivable and payable from related parties
(1). Accounts receivable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Related parties | Ending balance | Opening balance | ||
Carrying amount | Provision for bad debts | Carrying amount | Provision for bad debts | ||
Accounts receivable | Ningbo Weiman Cosmetics Co., Ltd. | 79,007.60 | 3,950.38 | ||
Prepayments | Huzhou Beauty Town Technology Incubation Park Co., Ltd. | 43,000.00 | 43,000.00 | ||
Other receivables | EURL PHARMATICA [Note] | 18,232,635.52 | 18,232,635.52 | 19,606,379.23 | 19,606,379.23 |
Other receivables | Huzhou Beauty Town Technology Incubation Park Co., Ltd. | 133,568.20 | 132,868.20 | 133,568.20 | 121,334.10 |
[Note] Other receivables from EURL PHARMATICA are the consolidated statistics of PAN Xiang,EURL PHARMATICA, PARISEZHAN HK LIMITED, SARLORTUS, and S.A.SAREDIS controlled byPAN Xiang.
(2). Payable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Related parties | Book balance at the end of the period | Opening book balance |
Accounts payable | S.A.SAREDIS | 243,598.94 | 236,930.48 |
Accounts payable | Ningbo Weiman Cosmetics Co., Ltd. | 121,884.94 | 121,884.94 |
7. Commitment of related parties
□ Applicable √ Not applicable
8. Other
□ Applicable √ Not applicable
XIII. Share-based Payments
1. Overall situation of share-based payment
√ Applicable □ Not applicable
Unit: Share Currency: RMB
Total amount of equity instruments granted by the Company in the current period | 2,100,000 |
Total amount of equity instruments exercised by the Company in the current period | 347,201 |
Total amount of equity instruments of the Company which are invalid in the current period | Not applicable |
The range of exercise price of stock options issued by the Company at the end of the period and their remaining period of contract | Not applicable |
The range of exercise price of other equity instrument options issued by the Company at the end of the period and their remaining period of contract | The price for the granted restricted shares is 78.56 RMB/share, and the grant period is 48 months from the grant date. |
Other explanationsAccording to the Proposal on Satisfying the Conditions for Release from Sales Restrictions in the ThirdRelease Period for Initially Granted Shares and Reserved Shares Under 2018 Restricted Share IncentivePlan deliberated and approved at the 4th meeting of the third session of Board of Directors of the Companyin 2022, 347,201 restricted shares held by the incentive objects who had satisfied the release conditions ofthe third release period were released from sales restrictions. The circulating date of the sales was January20, 2022.On July 25, 2022, according to the Proposal on 2022 Restricted Share Incentive Plan of the Company(Draft) and Its Summary deliberated and approved at the First Extraordinary General Meeting of theCompany in 2022, under the Incentive Plan, the Company proposed to grant up to 2,100,000 restrictedshares to incentive objects. The initial grant date of the restricted shares is July 25, 2022. The incentiveplan participators include senior executives, middle-level managers and core employees working for theCompany (excluding independent directors and supervisors, and the shareholders or actual controllersseverally or jointly holding more than 5% of shares of the Company and their spouses, parents andchildren), 101 persons in total, and the grant price is 78.56 RMB/share. The subject shares under theIncentive Plan are derived from the ordinary shares A of the Company privately issued by the Companyto the incentive objects. The validity period of the Incentive Plan begins from the date when the registrationof the grant of restricted shares is completed to the date when all the restricted shares granted to theincentive objects are released or repurchased and de-registered, in no case longer than 48 months. Thegranted restricted shares will be released in three tranches (30%:30%:40%) over 36 months after the endof 12 months after the initial grant of the restricted shares. The performance condition for the initial releaseis that: On the basis of the operating revenue and net profit in 2021, the growth rate of operating revenueand net profit in 2022 was no less than 25% and 25%, respectively. The performance condition for thesecond release is that: On the basis of the operating revenue and net profit in 2021, the growth rate ofoperating revenue and net profit in 2023 was no less than 53.75% and 53.75%, respectively. Theperformance condition for the third release is that: On the basis of the operating revenue and net profit in2021, the growth rate of operating revenue and net profit in 2024 was no less than 87.58% and 87.58%,respectively.
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Determination method of the fair value of equity instruments on grant date | Determined as per the share price on the grant date and the grant price of restricted shares |
Basis for determining the quantity of feasible equity instruments | Determined according to the estimated performance conditions in the release period |
Reason for significant difference with estimation in the current period and estimation in the previous period | Not applicable |
Accumulative amount of equity-settled share-based payment included in capital reserve | 87,157,508.45 |
Pay confirmed total expenses settled with equities in the current period | 47,357,121.24 |
Other explanationsNone
3. Share-based payment settled in cash
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
□ Applicable √ Not applicable
5. Other
□ Applicable √ Not applicable
XIV. Commitments and Contingencies
1. Important commitments
√ Applicable □ Not applicable
Important external commitments, nature and amount existing at the balance sheet dateAs of December 31, 2022, the investment projects of the Company's public offering for fund raising areas follows:
Unit: RMB’0,000
Item | Total investment amount | Fund raising commitment | Ending accumulated investment | Project Filing or Approval No. |
Huzhou Production Base Expansion Project (Phase I) | 43,752.54 | 33,850.00 | 16,801.64 | 2011-330502-04-01-178735 |
Longwu R&D Center Construction Project | 21,774.45 | 19,450.00 | 11,683.27 | 2101--330106--04--02--307916 |
Information System Upgrade Project | 11,239.50 | 9,050.00 | 878.34 |
Additional working capital | 18,000.00 | 12,821.30 | 2,974.15 | |
Total | 94,766.49 | 75,171.30 | 32,337.40 |
2. Contingencies
(1). Important contingencies on the balance sheet date
□ Applicable √ Not applicable
(2). Even if the Company does not have important contingencies to be disclosed, it shall also state:
□ Applicable √ Not applicable
3. Other
□ Applicable √ Not applicable
XV. Events subsequent to the Balance Sheet Date
1. Important non-adjustment matters
□ Applicable √ Not applicable
2. Profit distribution
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Profits or dividends to be distributed | 246,661,938.03 |
Profits or dividend declared after deliberation and approval | 172,868,570.76 |
According to the 11th meeting of the third session of Board of Directors to be held on April 19, 2023,based on the total share capital as at the record date on which equity distribution is implemented, theCompany proposes to distribute to all shareholders registered a cash dividend of RMB8.70 (tax inclusive)per 10 shares, and convert the capital reserve into share capital in the proportion of 4 shares for every 10shares held. Based on the total share capital of 283,519,469 shares on December 31, 2022, it is estimatedthat the cash dividend to be distributed will amount to RMB246,661,938.03 (tax inclusive) and a total of113,407,788 shares will be converted. In case of a change in the Company's total share capital due to theconversion of convertible bonds before the record date for equity distribution, the Company maintain thesaid distribution and conversation ratios and yet adjust the total distribution and conversion amounts. Thematter above is to be deliberated and approved by the General Meeting.
3. Sales return
□ Applicable √ Not applicable
4. Explanation of other events after the balance sheet date
□ Applicable √ Not applicable
XVI. Other Important Matters
1. Correction of early accounting errors
(1). Retrospective restatement
□ Applicable √ Not applicable
(2). Prospective application
□ Applicable √ Not applicable
2. Debt restructuring
□ Applicable √ Not applicable
3. Asset replacement
(1). Exchange of non-monetary assets
□ Applicable √ Not applicable
(2). Replacement of other assets
□ Applicable √ Not applicable
4. Annuity plan
□ Applicable √ Not applicable
5. Termination of operation
□ Applicable √ Not applicable
6. Segment information
(1). Determination basis and accounting policy of reportable segment
√ Applicable □ Not applicable
The Company does not have diversified operations or cross-regional operations, so there is no division-based reporting. The details of main business income and main business cost of the Company classifiedby brands are as follows:
2022
brands | Income from main business | Cost of main business | Gross profit |
Proya brand | 5,263,675,333.17 | 1,520,575,295.77 | 3,743,100,037.40 |
Other brands | 1,098,088,217.52 | 395,777,239.52 | 702,310,978.00 |
Subtotal | 6,361,763,550.69 | 1,916,352,535.29 | 4,445,411,015.40 |
2021
brands | Income from main business | Cost of main business | Gross profit |
Proya brand | 3,829,139,612.21 | 1,173,186,069.95 | 2,655,953,542.26 |
Other brands | 791,292,073.80 | 371,912,399.37 | 419,379,674.43 |
Subtotal | 4,620,431,686.01 | 1,545,098,469.32 | 3,075,333,216.69 |
(2). Financial information of the reportable segment
□ Applicable √ Not applicable
(3). If the Company has no reportable segment, or cannot disclose the total assets and liabilities of
each reportable segment, the reasons shall be explained
□ Applicable √ Not applicable
(4). Other explanations
□ Applicable √ Not applicable
7. Other important transactions and matters that have an impact on investors' decisions
□ Applicable √ Not applicable
8. Other
√ Applicable □ Not applicable
Lease
1. The Company as lessee
[Note] For details on right-of-use assets, refer to the particulars contained in "25. Right-of-use assets" in"VII. Notes to the Items of Consolidated Financial Statements" of "Section X Financial Report" of thisreport.For the details on accounting policies for short-term leases and low value asset leases of the Company,refer to the particulars contained in "42. Lease" in "V. Significant Accounting Policies and Estimates" of"Section X Financial Report" of this report. Short-term lease expenses included in the current profit orloss are as below:
Item | Amount for the current period | Amount for the same period last year |
Short-term lease expenses | 2,725,585.47 | 6,675,815.55 |
Low value asset lease expenses (except for short-term lease expenses) | 178,817.29 | 402,597.20 |
Total | 2,904,402.76 | 7,078,412.75 |
(3) Current profit or loss and cash flow related to lease
Item | Amount for the current period | Amount for the same period last year |
Interest expense on lease liabilities | 41,422.91 | |
Variable lease payments included in the current profit or loss but not incorporated in the measurement of lease liabilities | ||
Income from subleasing right-of-use assets |
Total cash outflows related to lease | 4,397,754.20 | 7,503,117.52 |
Profit or loss related to sales and leaseback transactions |
(4) Details of maturity analysis and corresponding liquidity risk management of lease liabilities can befound in the explanation of "X. Risks related to Financial Instruments" in "Section X Financial Report" ofthis report.
2. The Company as lessor
Operating lease
(1) Lease income
Item | Amount for the current period | Amount for the same period last year |
Lease income | 1,962,289.59 | 3,130,844.79 |
(2) Assets under operating lease
Item | Ending amount | Amount for the same period last year |
Investment real estate | 68,654,700.81 | 70,321,868.00 |
Subtotal | 68,654,700.81 | 70,321,868.00 |
For the details on the operation and rent-out of investment real estate, refer to the particulars contained in"20. Investment real estate" in "VII. Notes to the Items of Consolidated Financial Statements" of "SectionX Financial Report" of this report.
XVII. Notes on Main Items of the Financial Statements of the Parent Company
1. Accounts receivable
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age | Book balance at the end of the period |
Within 1 year | |
Including: Sub-items within 1 year | |
Within 1 year | 259,683,548.62 |
Sub-total within 1 year | 259,683,548.62 |
1 - 2 years | 54,333,721.43 |
2 - 3 years | 10,300,174.10 |
Above 3 years | |
3 - 4 years | |
4 - 5 years | |
Above 5 years | |
Total | 324,317,444.15 |
(2). Disclosed by the classification of bad debt accrual method
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Ending balance | Opening balance | ||||||||
Carrying amount | Provision for bad debts | Book value | Carrying amount | Provision for bad debts | Book value | |||||
Amount | Percentage (%) | Amount | Accrual ratio (%) | Amount | Percentage (%) | Amount | Accrual ratio (%) | |||
Provision for bad debts accrued individually | 108,670,171.06 | 23.32 | 80,084,373.88 | 73.69 | 28,585,797.18 | |||||
Including: | ||||||||||
Provision for bad debts accrued by portfolio | 324,317,444.15 | 100.00 | 34,434,380.91 | 10.62 | 289,883,063.24 | 357,273,937.54 | 76.68 | 31,662,778.73 | 8.86 | 325,611,158.81 |
Including: | ||||||||||
Account age portfolio | 324,317,444.15 | 100.00 | 34,434,380.91 | 10.62 | 289,883,063.24 | 357,273,937.54 | 76.68 | 31,662,778.73 | 8.86 | 325,611,158.81 |
Total | 324,317,444.15 | / | 34,434,380.91 | / | 289,883,063.24 | 465,944,108.60 | / | 111,747,152.61 | / | 354,196,955.99 |
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
√ Applicable □ Not applicable
By portfolio: account age portfolio
Unit: Yuan Currency: RMB
Name | Ending balance | ||
Accounts receivable | Provision for bad debts | Accrual ratio (%) | |
Within 1 year | 259,683,548.62 | 12,984,177.43 | 5.00 |
1 - 2 years | 54,333,721.43 | 16,300,116.43 | 30.00 |
2 - 3 years | 10,300,174.10 | 5,150,087.05 | 50.00 |
Total | 324,317,444.15 | 34,434,380.91 | 10.62 |
Determination and explanation of bad debts accrued by portfolio
□ Applicable √ Not applicable
If the bad debt provision is accrued according to the general model of expected credit loss, refer to thedisclosure of other receivables:
□ Applicable √ Not applicable
(3). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Opening balance | Changes in amount for the current period | Ending balance | |||
Accrual | Withdrawal or write-back | Charge-off or write-off | Other changes | |||
Provision for bad debts accrued individually | 80,084,373.88 | -80,084,373.88 | ||||
Provision for bad debts accrued by portfolio | 31,662,778.73 | 2,771,602.18 | 34,434,380.91 | |||
Total | 111,747,152.61 | 2,771,602.18 | -80,084,373.88 | 34,434,380.91 |
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
(4). Accounts receivable actually written off in the current period
□ Applicable √ Not applicable
Among them, information of accounts receivable significantly written off
□ Applicable √ Not applicable
(5). Accounts receivable of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Company name | Ending balance | Proportion of total balance of accounts receivable at the end of the period (%) | Ending balance of bad debt provision |
Zhejiang Meiligu Electronic Commerce Co., Ltd. | 101,338,564.94 | 31.25 | 5,066,928.25 |
Huzhou UZERO Trading Co., Ltd. | 73,774,168.89 | 22.75 | 16,958,882.64 |
Hapsode (Hangzhou) Cosmetics Co., Ltd. | 44,351,306.04 | 13.68 | 4,435,130.60 |
Huzhou Hapsode Trading Co., Ltd. | 37,642,480.39 | 11.61 | 1,882,124.02 |
Hangzhou Proya Trade Co., Ltd. | 28,301,731.83 | 8.73 | 4,068,991.30 |
Total | 285,408,252.09 | 88.02 | 32,412,056.81 |
Other explanationsNone
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7). The amount of assets and liabilities formed by transferring accounts receivable and continuingto be involved
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
2. Other receivables
Presentation by item
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ Applicable √ Not applicable
(2). Significant overdue interest
□ Applicable √ Not applicable
(3). Provision for bad debts
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Dividends receivable
(4). Dividends receivable
□ Applicable √ Not applicable
(5). Important dividends receivable with an account age of more than 1 year
□ Applicable √ Not applicable
(6). Provision for bad debts
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Other receivables
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age | Book balance at the end of the period |
Within 1 year |
Including: Sub-items within 1 year | |
Within 1 year | 33,856,482.33 |
Sub-total within 1 year | 33,856,482.33 |
1 - 2 years | 62,659,488.92 |
2 - 3 years | 131,098,498.27 |
Above 3 years | 4,741,614.72 |
3 - 4 years | |
4 - 5 years | |
Above 5 years | |
Total | 232,356,084.24 |
(2). Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Nature of payment | Book balance at the end of the period | Opening book balance |
Current account receivable | 210,637,812.50 | 269,104,993.77 |
Security deposits | 18,833,006.72 | 19,187,006.72 |
Suspense payment receivables | 2,334,148.44 | 802,310.17 |
Other | 551,116.58 | 416,500.00 |
Total | 232,356,084.24 | 289,510,810.66 |
(3). Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Provision for bad debts | First stage | Second stage | Third stage | Total |
Expected credit losses over the next 12 months | Expected credit loss for the entire duration (credit impairment not occurred) | Expected credit loss for the entire duration (credit impairment has occurred) | ||
Balance as at January 1, 2022 | 4,343,549.18 | 57,973,623.70 | 4,740,707.36 | 67,057,880.24 |
The balance as of January 1, 2022 is in the current period | ||||
- Transferred to the second stage | -3,132,974.45 | 3,132,974.45 | ||
- Transferred to the third stage | -21,087,259.16 | 21,087,259.16 | ||
- Returned to the second stage |
- Returned to the first stage | ||||
Accrual in the current period | 482,249.39 | -21,221,492.31 | 44,462,897.34 | 23,723,654.41 |
Amount written back in the current period | ||||
Current write off | ||||
Amount written off in the current period | ||||
Other changes | ||||
Balance as at December 31, 2022 | 1,692,824.12 | 18,797,846.68 | 70,290,863.86 | 90,781,534.65 |
Explanation of significant changes in book balance of other receivables with changes in provision for lossin the current period:
□ Applicable √ Not applicable
The amount of bad debt provision in the current period and the basis for evaluating whether the credit riskof financial instruments increases significantly:
□ Applicable √ Not applicable
(4). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Opening balance | Changes in amount for the current period | Ending balance | |||
Accrual | Withdrawal or write-back | Charge-off or write-off | Other changes | |||
Provision for bad debts accrued by portfolio | 67,057,880.24 | 23,723,654.41 | 90,781,534.65 | |||
Total | 67,057,880.24 | 23,723,654.41 | 90,781,534.65 |
Among them, significant amount of bad-debt provision written back or withdrawn in the current period:
□ Applicable √ Not applicable
(5). Other receivables actually written off in the current period
□ Applicable √ Not applicable
(6). Other receivables of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Company name | Nature of payment | Ending balance | Account age | As a proportion of total ending balance in other receivables (%) | Provision for bad debts Ending balance |
Hongkong Xinghuo Industry Limited | Suspense payment receivables | 153,873,588.89 | [Note 1] | 66.22 | 67,594,364.92 |
BOYA (Hong Kong) Investment Management Co., Limited | Suspense payment receivables | 35,629,920.00 | [Note 2] | 15.33 | 9,765,696.00 |
Wuxing District Daixi Town People's Government of Huzhou City | Security deposits | 13,493,392.00 | [Note 3] | 5.81 | 4,048,017.60 |
Hangzhou Xiake Bar Catering Management Co., Ltd. | Suspense payment receivables | 10,000,000.00 | [Note 4] | 4.30 | 1,750,000.00 |
Hangzhou Yizhuo Culture Media Co., Ltd. | Suspense payment receivables | 5,238,815.82 | [Note 5] | 2.25 | 1,186,940.79 |
Total | / | 218,235,716.71 | / | 93.91 | 84,345,019.31 |
[Note 1] RMB18,603,298.35 with the account age within 1 year, RMB4,854,726.35 with the account ageof 1-2 years, and RMB130,415,564.19 with the account age of 2-3 years[Note 2] RMB3,693,120.00 with the account age within 1 year, and RMB31,936,800.00 with the accountage of 1-2 years[Note 3] RMB13,493,392.00 with the account age of 1-2 years[Note 4] RMB5,000,000.00 with the account age within 1 year, RMB5,000,000.00 with the account ageof 1-2 years[Note 5] RMB1,538,815.82 with the account age within 1 year, RMB3,700,000.00 with the account ageof 1-2 years
(7). Receivables involving government subsidies
□ Applicable √ Not applicable
(8). Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(9). The amount of assets and liabilities formed by transferring other receivables and continuing tobe involved
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
3. Long-term equity investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance | ||||
Carrying amount | Impairment provision | Book value | Carrying amount | Impairment provision | Book value | |
Investments in subsidiaries | 304,354,996.61 | 42,500,000.00 | 261,854,996.61 | 229,119,013.03 | 42,500,000.00 | 186,619,013.03 |
Investments in associates and joint ventures | 213,909,167.02 | 81,442,213.22 | 132,466,953.80 | 178,054,996.05 | 14,670,468.59 | 163,384,527.46 |
Total | 518,264,163.63 | 123,942,213.22 | 394,321,950.41 | 407,174,009.08 | 57,170,468.59 | 350,003,540.49 |
(1). Investments in subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Invested entity | Opening balance | Current increase | Current decrease | Ending balance | Impairment provision accrued in the current period | Ending balance of impairment provisions |
Hangzhou Proya Trade Co., Ltd. | 30,772,988.32 | 1,468,070.77 | 32,241,059.09 | |||
Hanna Cosmetics Co., Ltd. | 2,094,048.00 | 2,094,048.00 | ||||
Zhejiang Meiligu Electronic | 14,956,877.14 | 11,956,545.55 | 26,913,422.69 |
Commerce Co., Ltd. | ||||||
Yueqing Laiya Trading Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
Hapsode (Hangzhou) Cosmetics Co., Ltd. | 42,500,000.00 | 42,500,000.00 | 42,500,000.00 | |||
Mijing Siyu (Hangzhou) Cosmetics Co., Ltd. | 18,000,000.00 | 18,000,000.00 | ||||
Huzhou UZERO Trading Co., Ltd. | 5,460,276.70 | 5,460,276.70 | ||||
Huzhou Niuke Technology Co., Ltd. | 3,500,000.00 | 3,500,000.00 | ||||
Hangzhou Proya Commercial Management Co., Ltd. | 5,000,000.00 | 5,000,000.00 | ||||
Huzhou Younimi Cosmetics Co., Ltd. | 20,308,163.00 | 1,085,313.00 | 21,393,476.00 | |||
Shanghai Zhongwen Electronic Commerce Co., Ltd. | 5,400,000.00 | 529,948.75 | 5,929,948.75 | |||
Korea Younimi Cosmetics Co., Ltd. | 5,046,455.61 | 5,046,455.61 | ||||
HongKong Keshi Trading Limited | 24,736,491.00 | 24,736,491.00 | ||||
Hongkong Xinghuo Industry Limited | 10,185,924.00 | 10,185,924.00 |
Ningbo TIMAGE Cosmetics Co., Ltd. | 15,902,200.00 | 45,428,469.19 | 61,330,669.19 | |||
Ningbo Keshi Trading Limited | 520,000.00 | 520,000.00 | ||||
Zhejiang Beute Cosmetics Co., Ltd. | 10,181,983.21 | 10,181,983.21 | ||||
Ningbo Proya Enterprise Consulting Management Co., Ltd. | 5,353,606.05 | 14,204,881.28 | 19,558,487.33 | |||
Hangzhou Yizhuo Culture Media Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
Hangzhou Oumisi Trading Co., Ltd. | 2,400,000.00 | 1,500,000.00 | 3,900,000.00 | |||
Guangzhou Qianxi Network Technology Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
Zhejiang Qingya Culture Art Communication C | 1,100,000.00 | 550,000.00 | 1,650,000.00 | |||
Huzhou Boyun Electronic Commerce Co., Ltd. | 1,200,000.00 | 1,200,000.00 | ||||
Hangzhou Weiluoke Cosmetics Co., Ltd. | 500,000.00 | 500,000.00 | ||||
Xuzhou Proya Information Technology Co., Ltd. | 500,000.00 | 500,000.00 | ||||
Singuladerm (Hangzhou) Cosmetics Co., Ltd. | 500,000.00 | 500,000.00 |
Proya (Hainan) Cosmetics Co., Ltd. | 100,000.00 | 100,000.00 | ||||
Hangzhou TIMAGE Cosmetics Co., Ltd. | 112,755.04 | 112,755.04 | ||||
Total | 229,119,013.03 | 76,935,983.58 | 1,700,000.00 | 304,354,996.61 | 42,500,000.00 |
(2). Investments in associates and joint ventures
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Investment Unit | Opening balance | Current changes | Ending balance | Ending balance of impairment provisions | |||||||
Additional investment | Investment decrease | Recognized investment gain and loss under equity method | Other comprehensive income adjustments | Other changes in equity | Declared payment of cash dividends or profits | Impairment provision | Other | ||||
I. Joint Venture | |||||||||||
Huzhou Panrui Industry Investment Partnership (Limited Partnership) | 3,074,758.68 | -5,810.52 | 3,068,948.16 | ||||||||
Subtotal | 3,074,758.68 | -5,810.52 | 3,068,948.16 | ||||||||
II. Affiliate | |||||||||||
Xiongke Culture Media (Hangzhou) Co., Ltd. | 2,789,460.66 | -139,840.96 | 2,649,619.70 | ||||||||
Jiaxing Woyong Investment Partnership (Limited Partnership) | 72,681,733.38 | 41,003,609.10 | -2,432,120.55 | 111,253,221.93 | |||||||
Zhuhai Healthlong Biotechnology Co., Ltd. | 79,413,882.37 | -2,065,839.07 | 66,771,744.63 | 10,576,298.67 | 81,442,213.22 | ||||||
Beijing Xiushi Culture Development Co., Ltd. | 5,424,692.37 | -505,827.03 | 4,918,865.34 | ||||||||
Subtotal | 160,309,768.78 | 41,003,609.10 | -5,143,627.61 | 66,771,744.63 | 129,398,005.64 | 81,442,213.22 |
Total | 163,384,527.46 | 41,003,609.10 | -5,149,438.13 | 66,771,744.63 | 132,466,953.80 | 81,442,213.22 |
Other explanations:
None
4. Operating revenue and operating cost
(1). Information of operating revenue and costs
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period | ||
Revenue | Cost | Revenue | Cost | |
Main business | 3,061,899,622.39 | 1,407,736,680.98 | 2,239,048,621.69 | 1,059,535,186.57 |
Other business | 19,237,314.36 | 16,988,430.02 | 34,799,744.81 | 17,291,073.35 |
Total | 3,081,136,936.75 | 1,424,725,111.00 | 2,273,848,366.50 | 1,076,826,259.92 |
(2). Information of income generated by the contract
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
Other explanations:
Breakdown of revenue by major categories
1) Income breakdown by goods or service type
Main product type | Amount |
Products sales | 3,063,670,101.01 |
Other | 17,466,835.74 |
Subtotal | 3,081,136,936.75 |
2) Income breakdown by goods or service transfer time
Item | Amount for the current period | Amount for the same period last year |
Income recognized at a certain point | 3,063,670,101.01 | 2,240,732,805.87 |
Income recognized over a period | 17,466,835.74 | 33,115,560.63 |
Subtotal | 3,081,136,936.75 | 2,273,848,366.50 |
3) Revenue recognized in the current period and included in the opening book value of contract liabilitiesis RMB28,108,787.35.
5. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Long-term equity investment income calculated by the cost method | ||
Long-term equity investment income calculated by the equity method | -5,149,438.13 | -7,608,313.87 |
Investment income from disposal of long-term equity investment | 988,000.42 | -10,959,118.90 |
Investment income of held-for-trading financial assets during the holding period | ||
Dividend income from other equity instrument investments during the holding period | ||
Interest income from debt investment during the holding period | ||
Interest income from other debt investments during the holding period | ||
Investment income from disposal of held-for-trading financial assets | ||
Investment income from disposal of other equity instrument investments | ||
Investment income from disposal of debt investment | ||
Investment income from disposal of other debt investments | ||
Gains of debt restructuring | ||
Total | -4,161,437.71 | -18,567,432.77 |
Other explanations:
None
6. Other
□ Applicable √ Not applicable
XVIII. Supplementary Information
1. Statement of non-recurring gains and losses for the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount | Note |
Gains or losses from disposal of non-current assets | 60,155.60 | |
Tax refund and reduction with ultra vires approval or without formal approval documents | ||
Government subsidies included in the current profit or loss (except those that are closely related to the enterprise's business and granted on a basis of quota or quantitative amount in accordance with the national unified standards) | 38,463,732.07 | |
Capital occupation fees charged to the non-financial enterprises and included in profit or loss for the current period | ||
Gains when the investment cost of acquiring a subsidiary, an associate and a joint venture is less than the fair value of the identifiable net assets of the invested entity | ||
Gains or losses from exchange of non-monetary assets | ||
Gains or losses from entrusting others with investment or asset management | ||
Asset impairment provision accrued for force majeure such as natural disasters | ||
Gains or losses from debt restructuring | ||
Enterprise restructuring fees, such as staffing expenses and integration fees | ||
Profit and loss of the part exceeding fair value generated from transaction with unreasonable transaction price | ||
Current net gains or losses of subsidiaries established by business combination involving enterprises under common control from the beginning of the period to the combination date | ||
Gains or losses on contingencies that have no relation with the normal operation of the Company | ||
Gains or losses from change in fair value by held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities and derivative financial liabilities, and investment income from disposal of held-for-trading financial assets, derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and other debt investments, excluding the effective hedging businesses related with normal operations of the Company | ||
Reversal of impairment provisions of accounts receivable and contract assets that have undergone impairment test alone | 2,782,350.76 | |
Gains or losses from outward entrusted loaning | ||
Gains or losses from changes in the fair values of Investment real estate that are subsequently measured using the fair value model |
Impact of a one-time adjustment on current profit and loss according to the requirements of tax and accounting laws and regulations | ||
Custody fees of entrusted operation | ||
Other non-operating revenue and expenses besides the above items | -2,926,959.81 | |
Other items that conform to the definition of non-recurring profit or loss | ||
Less: Effect of income tax | 3,689,885.55 | |
Affected amount of minority shareholders' equity | 5,802,406.15 | |
Total | 28,886,986.92 |
The reasons should be explained for the non-recurring gains and losses items defined by the Companyaccording to the definition of Explanatory Announcement on Information Disclosure for CompaniesOffering Their Securities to the Public No.1 - Non-recurring Gains and Losses, and the non-recurringprofit and loss items listed in Explanatory Announcement on Information Disclosure for CompaniesOffering Their Securities to the Public No.1 - Non-recurring Gains and Losses as recurring gains andlosses items.
□ Applicable √ Not applicable
2. Net assets income rate and earnings per share
√ Applicable □ Not applicable
Profit during the Reporting Period | Weighted average ROE (%) | Earnings per share | |
Basic earnings per share | Diluted earnings per share | ||
Net profits attributable to ordinary shareholders of the Company | 25.95 | 2.90 | 2.87 |
Net profits attributable to ordinary shareholders of the Company after deducting non-recurring gains and losses | 25.03 | 2.80 | 2.77 |
3. Differences in accounting data under Chinese and international accounting standards
□ Applicable √ Not applicable
4. Other
□ Applicable √ Not applicable
Chairman: HOU JunchengDate of submission approved by the Board of Directors: April 19, 2023
Revision information
□ Applicable √ Not applicable