Stock Code: 603605 Stock Abbreviation: ProyaBond Code: 113634 Bond Abbreviation: Proya Convertible Bond
Proya Cosmetics Co., Ltd.Annual Report 2023
Important Notes
I.The Board of Directors, Board of Supervisors, directors, supervisors and senior managementof the Company warrant that the content of the 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 standardunqualified audit report to the Company.
IV.HOU Juncheng, chairman of the Company, and WANG Li, CFO (and Head of AccountingDepartment) of the Company 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 Periodapproved by the Board of Directors
1. Based on the total share capital (excluding the shares in the Company's special securities account forrepurchase) as of the record date on which equity distribution is implemented, the Company proposes todistribute to all shareholders registered a cash dividend of RMB9.10 (tax inclusive) per 10 shares. Basedon the total share capital of 396,757,184 shares on December 31, 2023, deducting 2,210,825 shares in theCompany's special securities account for repurchase, it is estimated that the cash dividend to be distributedwill amount to RMB359,037,186.69 (tax inclusive) without converting the capital reserve into sharecapital or giving any bonus shares. 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 maintains thesaid distribution ratios and yet adjusts the total distribution amounts.
2. On October 23, 2023, the Company completed the implementation of the 2023 semi-annual profitdistribution plan. Based on the Company's total share capital of 396,823,346 shares before theimplementation of the plan, a cash dividend of RMB0.38 per share (tax inclusive) was distributed, with atotal of RMB150,792,871.48 cash dividends distributed.
3. According to the Guideline No. 7 for the Self-regulatory Rules of Companies Listed on the ShanghaiStock Exchange - Share Repurchase and other relevant regulations, for listed companies that repurchaseshares using cash as consideration through centralized bidding or tender offer, the amount of repurchasedshares in the current year shall be treated as the amount of cash dividends and counted in the calculationof the cash dividend proportion for that year. In 2023, the Company repurchased shares amounting toRMB39,076,754.20 (excluding transaction expenses) through centralized bidding.To conclude, the amount of cash dividends for the year 2023 (including the proposed annual dividend for2023, the semi-annual cash dividend for 2023, and the amount of repurchased shares through centralizedbidding for 2023) accounts for 45.98% of the net profit attributable to the shareholders of the Company inthe consolidated statement of 2023.
VI.Disclosure of risks involved in forward-looking statements
√ Applicable □ Not applicable
The Report contains forward-looking statements which involve the future plans, development strategies,etc. of the Company, yet do not constitute substantive undertakings of the Company to investors.Investors should exercise caution prior to making investment decisions.
VII.Whether there is any non-operating capital occupation by a controlling shareholder and otherrelated partiesNo
VIII.Whether there is any external guarantee provided in violation of specified decision-makingproceduresNo
IX.Whether the majority of the directors are unable to warrant the authenticity, accuracy andcompleteness of the Annual Report disclosed by the CompanyNo
X.Disclosure of major risksThe 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 ManagementDiscussion and 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 ...... 12
Section IV Corporate Governance ...... 46
Section V Environmental and Social Responsibility ...... 66
Section VI Important Matters ...... 71
Section VII Shareholders and Changes in Shares ...... 104
Section VIII Information on Preference Shares ...... 114
Section IX Information on Bonds ...... 115
Section X Financial Report ...... 120
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 Definitions
I.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 | Proya Cosmetics Co., Ltd. Huzhou Branch, a branch of the Company |
Shanghai Branch | refers to | Proya Cosmetics Co., Ltd. Shanghai Branch, 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 CORRECTORS | refers to | Hangzhou CORRECTORS Trade Co.,Ltd., a wholly-owned subsidiary of Meiligu |
Huzhou Keyan | refers to | Huzhou Keyan E-commerce 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) |
Proya Commercial | refers to | Hangzhou Proya Commercial Management Co., Ltd., a wholly-owned subsidiary of the Company |
Tielexin Aini | refers to | Hangzhou Tielexin Aini 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 |
Hong Kong Keshi | refers to | Hong Kong Keshi Trading Co., Ltd., a holding subsidiary of the Company |
Hong Kong Xinghuo | refers to | Hong Kong 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 Hong Kong Xinghuo |
Hong Kong Xuchen | refers to | Hong Kong Xuchen Trading Limited, a wholly-owned subsidiary of Hong Kong Xinghuo |
Proya Luxembourg | refers to | Proya Europe SARL, a wholly-owned subsidiary of Hong Kong Xinghuo |
Shanghai Zhongwen | refers | Shanghai Zhongwen Electronic Commerce Co., Ltd., a wholly-owned |
to | subsidiary of the Company | |
Huzhou Niuke | refers to | Huzhou Niuke Technology Co., Ltd., a wholly owned 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 |
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 Beauty | refers to | Zhejiang Beauty 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 | OR Off & Relax, 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 | Singuladerm (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 |
Hubei Laibo | refers to | Hubei Laibo Technology Co., Ltd., a wholly-owned subsidiary of the Company |
PROYA PTE | refers to | PROYA PTE. LTD., a wholly-owned subsidiary of the Company |
PROYA MALAYSIA | refers to | PROYA BEAUTY MALAYSIA SDN. BHD., a wholly-owned subsidiary of PROYA PTE |
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 | China Securities Co., Ltd. |
to | ||
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 | RMB/RMB '0,000 |
Reporting Period | refers to | January 1, 2023 to December 31, 2023 |
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, China Securities Journal, Securities Daily, Economic Information Daily, China Daily |
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 | Office Tower 2, Run'ao Business Center, Xiaoshan District, Hangzhou | |
Name of the signing accountant | YIN Zhibin, WU Shaofang | |
Sponsor performing continuous supervisory duty during the Reporting Period | 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 supervision | January 4, 2022 - December 31, 2023 |
VII.Major Accounting Data and Financial Indicators for the Past Three Years(I) Major accounting data
Unit: Yuan Currency: RMB
Major accounting data | 2023 | 2022 | Year-on-year change (%) | 2021 |
Operating revenue | 8,904,573,501.39 | 6,385,451,424.00 | 39.45 | 4,633,150,538.43 |
Net profit attributable to shareholders of the listed company | 1,193,868,141.81 | 817,400,223.93 | 46.06 | 576,119,025.56 |
Net profit attributable to shareholders of the listed company net of non-recurring profit or loss | 1,174,144,260.32 | 788,513,237.01 | 48.91 | 568,092,480.38 |
Net cash flow from operating activities | 1,468,793,814.58 | 1,111,136,117.23 | 32.19 | 829,670,943.82 |
As of the end of 2023 | As of the end of 2022 | Year-on-year change (%) | As of the end of 2021 | |
Net assets attributable to shareholders of the listed company | 4,349,545,381.60 | 3,524,488,659.96 | 23.41 | 2,876,975,835.98 |
Total assets | 7,323,078,222.45 | 5,778,071,824.19 | 26.74 | 4,633,049,783.03 |
(II) Key financial indicators
Key financial indicators | 2023 | 2022 | Year-on-year change (%) | 2021 |
Basic earnings per share (RMB/share) | 3.01 | 2.07 | 45.41 | 2.05 |
Diluted earnings per share (RMB/share) | 2.97 | 2.05 | 44.88 | 2.01 |
Basic earnings per share net of non-recurring profit and loss (RMB/share) | 2.96 | 2.00 | 48.00 | 2.02 |
Weighted average ROE (%) | 29.94 | 25.95 | Up by 3.99 percentage points | 22.25 |
Weighted average ROE net of non-recurring profit and loss (%) | 29.44 | 25.03 | Up by 4.41 percentage points | 21.94 |
Description of the Company's major accounting data and financial indicators for the recent three years asof the end of the Reporting Period
□ Applicable √ Not applicable
VIII.Differences in Accounting Data under Chinese and International Accounting Standards
1. Difference in net profit and net assets attributable to shareholders of the listed companyin the financial report disclosed in accordance with International accounting standards andChinese accounting standards
□ Applicable √ Not applicable
2. Differences in net profit and net assets attributable to shareholders of the listed companyin the financial report disclosed in accordance with International accounting standards andChinese accounting standards
□ Applicable √ Not applicable
3. Description of differences between international and Chinese accounting standards:
□ Applicable √ Not applicable
IX.Major Financial Data for 2023 by Quarter
Unit: Yuan Currency: RMB
Q1 (January - March) | Q2 (April - June) | Q3 (July - September) | Q4 (October - December) | |
Operating revenue | 1,621,514,039.25 | 2,005,477,838.97 | 1,621,577,872.94 | 3,656,003,750.23 |
Net profit attributable to shareholders of the listed company | 208,032,832.00 | 291,461,165.71 | 246,469,143.36 | 447,905,000.74 |
Net profit attributable to shareholders of the listed company net of non-recurring profit and loss | 197,980,896.41 | 280,910,955.86 | 246,996,239.57 | 448,256,168.48 |
Net cash flow from operating | 409,773,960.44 | 771,494,111.59 | -382,251,543.16 | 669,777,285.71 |
activities
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 2023 | Notes (if applicable) | Amount for 2022 | Amount for 2021 |
Gains or losses from disposal of non-current assets, including write-offs of provision for adjusted asset impairment | -703,593.33 | 60,155.60 | -112,183.24 | |
Government grants recognized in profit or loss for the current period (excluding government grants that are closely related to the Company’s business operations, compliant with national policies, granted at set standards, and imposing sustaining influence on the Company's gains and losses) | 44,043,618.77 | 38,463,732.07 | 15,448,962.01 | |
Gains or losses from change in fair value generated by financial assets and liabilities held by non-financial businesses as well as gains or losses from disposal of financial assets and liabilities | ||||
Capital occupation fees charged to the non-financial enterprises and included in profit or loss for the current period | ||||
Gains or losses from entrusting others with investment or asset management | ||||
Gains or losses from outward entrusted loaning | ||||
Asset loss incurred by force majeure such as natural disasters | ||||
Reversal of impairment provisions of accounts receivable that have undergone impairment testing alone | 289,706.45 | 2,782,350.76 |
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 | ||||
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 from exchange of non-monetary assets | ||||
Gains or losses from debt restructuring | ||||
One-time expenses incurred due to the cessation of relevant business activities, such as staffing expenses | ||||
One-time impact on current profit and loss due to the adjustments of taxes and accounting laws and regulations | ||||
One-time share-based payment recognized for cancellation and modification of equity incentive plans | ||||
Gains and losses from changes in the fair values of employee compensation payable for share-based payment in cash after the exercise date | ||||
Gains or losses from changes in the fair values of Investment real estate that are subsequently measured using the fair value model | ||||
Profits generated from transactions with unreasonable transaction price | ||||
Gains or losses on contingencies that have no relation with the normal operation of the Company | ||||
Custody fees of entrusted operation |
Other non-operating revenue and expenses besides the above items | -7,456,554.85 | -2,926,959.81 | -3,078,442.83 | |
Other items that conform to the definition of non-recurring profit or loss | -113,212.70 | Investment income from disposal of long-term equity investment | ||
Less: Effect of income tax | 10,105,613.47 | 3,689,885.55 | 1,917,310.27 | |
Effect of minority equity (after tax) | 6,230,469.38 | 5,802,406.15 | 2,314,480.49 | |
Total | 19,723,881.49 | 28,886,986.92 | 8,026,545.18 |
The reasons should be explained for the Company defining the non-recurring gains and losses items notlisted in the Explanatory Announcement on Information Disclosure for Companies Offering TheirSecurities to the Public No. 1 – Non-Recurring Gains and Losses as non-recurring gains and losses itemsof high value and defining the non-recurring profit and loss items listed in the same document as recurringgains and losses 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 | 7,378,700.06 | 7,378,700.06 | ||
Other equity instrument investments | 146,402,400.00 | 107,660,400.00 | -38,742,000.00 | |
Total | 146,402,400.00 | 115,039,100.06 | -31,363,299.94 |
XII.Other
□ Applicable √ Not applicable
Section III Management Discussion and Analysis
I.Business Discussion and Analysis
1. Year-on-year growth in operating revenue
Operating revenue - RMB8.905 billion, up by 39.45% YOYRMB8.89billion prime operating revenue, up by 39.74% YOYRMB15 million non-operating revenue
Prime operating revenue:
(1) By channel
Channel | Amount (RMB100 million) | Change in 2023 over the previous year YOY (%) | Change in 2022 over the previous year YOY (%) | Change in 2021 over the previous year YOY (%) | 2023 Percentage (%) | 2022 Percentage (%) | 2021 Percentage (%) |
Online | Direct sales | 67.48 | 50.70 | 59.79 | 76.16 | 75.91 | 70.40 | 60.66 |
Distribution | 15.26 | 16.49 | 16.79 | 8.56 | 17.16 | 20.58 | 24.27 | |
Subtotal | 82.74 | 42.96 | 47.50 | 49.54 | 93.07 | 90.98 | 84.93 | |
Offline | Household chemicals | 4.94 | 11.59 | -11.96 | -40.52 | 5.56 | 6.96 | 10.88 |
Other | 1.22 | -6.98 | -32.32 | -30.50 | 1.37 | 2.06 | 4.19 | |
Subtotal | 6.16 | 7.35 | -17.62 | -38.03 | 6.93 | 9.02 | 15.07 | |
Total | 88.90 | 39.74 | 37.69 | 23.28 | 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 2023 over the previous year YOY (%) | Change in 2022 over the previous year YOY (%) | Change in 2021 over the previous year YOY (%) | 2023 Percentage (%) | 2022 Percentage (%) | 2021 Percentage (%) | |
Self-owned brands | Proya | 71.77 | 36.36 | 37.46 | 28.25 | 80.73 | 82.74 | 82.87 |
TIMAGE | 10.01 | 75.06 | 132.04 | 103.48 | 11.26 | 8.99 | 5.33 | |
OR | 2.15 | 71.17 | 509.93 | - | 2.42 | 1.98 | - | |
Hapsode | 3.03 | 61.82 | 188.27 | - | 3.41 | 2.94 | - | |
Other brands | 1.94 | 18.86 | -60.11 | -5.96 | 2.18 | 2.57 | 8.85 | |
Subtotal | 88.90 | 40.86 | 40.74 | 26.63 | 100.00 | 99.22 | 97.05 | |
Agency brands | Cross-border agency brands | 0.00 | -100.00 | -63.01 | -34.04 | 0.00 | 0.78 | 2.95 |
Total | 88.90 | 39.74 | 37.69 | 23.28 | 100.00 | 100.00 | 100.00 |
Note: The percentage of sales of each brand is the proportion of its sales in primary operating revenue.The sales of OR and Hapsode were incorporated into other brands for 2021 and prior years, but theyhave been shown separately since 2022.
(3) By category
Category | Amount (RMB100 million) | Change in 2023 over the previous year YOY (%) | Change in 2022 over the previous year YOY (%) | Change in 2021 over the previous year YOY (%) | 2023 Percentage (%) | 2022 Percentage (%) | 2021 Percentage (%) |
Skincare (including cleansing) | 75.59 | 37.85 | 38.56 | 22.70 | 85.03 | 86.20 | 86.10 |
Make-up cosmetics | 11.16 | 48.28 | 21.70 | 32.97 | 12.55 | 11.82 | 13.38 |
Body & hair | 2.15 | 71.17 | 509.93 | - | 2.42 | 1.98 | - |
Others | 0.00 | - | -100.00 | -41.05 | 0.00 | 0.00 | 0.52 |
Total | 88.90 | 39.74 | 37.69 | 23.28 | 100.00 | 100.00 | 100.00 |
Note: The "Body & hair" category is included in the "Skin care (including cleansing)" category before2021, and is separately listed after 2022.
2. YOY growth in net profit
RMB1.194 billion net profit attributable to shareholders of the listed company, up by 46.06% YOYRMB1.174 billion net profit attributable to shareholders of the listed company net of non-recurringprofit and loss, up by 48.91% YOY
Indicator | 2023 | 2022 | 2021 | Note |
1. Net profit margin | 13.82% | 13.02% | 12.02% | Mainly due to: 1. Increase in gross profit margin; 2. Decrease in income tax expenses. |
2. Gross profit margin | 69.93% | 69.70% | 66.46% | Mainly due to increased percentage of online direct sales. |
3. Sales expense ratio | 44.61% | 43.63% | 42.98% | Mainly due to the increased prepayment for image promotion expenses. |
Of which: Image promotion fee rate | 39.69% | 37.90% | 36.12% | |
4. Administrative expense ratio | 5.11% | 5.13% | 5.12% | |
5. R&D expense ratio | 1.95% | 2.00% | 1.65% | The parent company's R&D expense ratio was 4.13% in 2023 (compared with 4.31% for the same period the previous year). |
6. Accounts receivable turnover rate (times/year) | 39.87 | 53.04 | 21.88 | Mainly due to increased sales incurred by Beijing Jingdong Century Trading Co., Ltd. |
7. Accounts receivable turnover days (days) | 9.03 | 6.79 | 16.45 | |
8. Inventory turnover rate (times/year) | 3.65 | 3.46 | 3.39 | |
9. Inventory turnover days (days) | 98.57 | 103.91 | 106.19 |
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 2023, the total retail sales of consumergoods reached RMB47,149.5 billion, up by 7.2% YOY; the total retail sales of cosmetics reachedRMB414.2billion, up by 5.1% 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 brand
(1) Proya, focusing on technology skincare, designed for young white-collar female customers, generally
priced at RMB200 to RMB500, sold both online and offline.
(2) Hapsode, positioned as an “expert in oily skin care”, focusing on college students and other youngfemale customers, generally priced at RMB50 to RMB200, sold mainly online.
2. Make-up brand
TIMAGE, a professional make-up artist brand customized for Chinese faces, generally priced at RMB150to RMB300, sold mainly online.
3. Body & hair brand
Off&Relax, positioned as an “expert in Asian scalp health, generally priced at RMB150 to RMB200, soldmainly online.
4. High-efficiency skincare brand
CORRECTORS, a high-efficiency skincare brand, generally 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 outthrough platforms such as Tmall, TikTok, JD, Kwai, and Pinduoduo, and distribution is based on platformssuch as Taobao, JD, and Vipshop.Offline sales are mainly operated through dealers. Channels include cosmetics franchise stores anddepartment 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 maintains R&D cooperation with front-end research institutions and high-quality raw material suppliers including Zhejiang University, Zhejiang University of Technology,Hangzhou Dianzi University, Jiangnan University, Beijing Technology and Business University, BASFChina, Ashland China, DSM Shanghai, CRODA China, Evonik China, Spanish LIPOTRUE, S.L., andShenzhen Siyomicro Bio-tech.
IV.Analysis of Core Competitiveness during the Reporting Period
√ Applicable □ Not applicable
The Company's core competitiveness is mainly embodied by:
Facing the rapidly changing external market, the Company was firmly committed to the leadership andimplementation of the 6*N Strategy. We consolidated and deepened precise operation management systemhighlighting "R&D, products, contents, operation". Supplemented by the construction of a self-drivenorganization featuring "culture-strategy-mechanism-talents". We flexibly responded to marketdevelopment changes, rapidly established our presence and invested in emerging channels. Furthermore,we explored overseas development opportunities, seized the chance for Chinese brands to expand globally,and drove business growth with an expanded market scope and enhanced responsiveness.We continued to make our "hero products" more competitive, and developed and improved the portfolioof "hero products", strengthened brand appeal, and enhanced brand vitality based on our keen insight intoconsumer needs. This was possible because of our strong R&D and our ability to rapidly respond tointernal organizational requirements. A self-driven agile organization was built to serve the second-brandproduct pipeline and the brands at the incubation stage, forming a fledgling brand matrix in skincare,make-up, and personal care products. By building our own MCN team and content marketing team, westrengthened the internal circular ecology and fostered the external ecosystem of Proya brand.
V.Main Operations during the Reporting Period
1. New product strategy
Proya:
During the Reporting Period, Proya continued to consolidate the hero product strategy and performed all-around upgrades for the hero products "Double Effect Brightening Series" and "Advanced FirmingNourishing Series" and used exclusive ingredients. Proya also improved product efficacy and userexperiences and enhanced the sustainability. In the second half of 2023, Proya launched the first patentednew cyclic peptide raw material approved and filed in China's makeup industry, and applied it in AdvancedFirming Nourishing Light Cream 3.0 as a way to further secure our professionalism and technologicalcapability in peptide, marking Proya's leadership in independent ingredient development.Meanwhile, Proya launched the first premium product line, the "Energy Series", which marked a brandnew solution to the anti-aging of mature skin by utilizing the unique and advanced skin energyenhancement and awakening technology Cellergy that helps repair skin wrinkles mildly and efficiently.
In 2023, Proya maintained 1st in the essence category, ranked 1st in the face cream category, 2nd in themask category, and 5th in the eye cream category on Tmall.
TIMAGE:
During the Reporting Period, TIMAGE continued to improve the hero product strategy in the facial make-up category, with core products ranking top in all categories. The "tri-colored contour palette" ranked 1stin the highlighter category on Tmall. The "dual-colored highlighter palette" ranked 2nd in the highlightercategory on Tmall. The "face primer" ranked 2nd in the sun block/primer category on Tmall. The "tri-colored concealer palette" ranked 1st in the concealer category on Tmall.In the first half of the year, TIMAGE launched the colorful brilliance product. In March, the brandintroduced the brand new "Vigorous and Flowing Jade Series" and launched three new products: the "Tri-color Blush Palette", the "All-in-one Brow Palette", and the "Matte Lipstick". Among them, the "Tri-colorBlush Palette" ranked 1st in the blush category on Tmall. Additionally, TIMAGE launched the all-new"Original Skin Cushion Compact" and upgraded the "Soft Mist Powder Compact (For Oily Skin)."In the second half of the year, TIMAGE launched the "Soft Mist Powder Compact (for dry skin)" to createhero products in the powder category, gaining momentum for the growth in 2024. The "Porcelain FlawlessFoundation" maintained remarkable growth and skyrocketed in the rankings on Tmall and TikTok.
Off&Relax (OR):
During the Reporting Period, OR continued to increase the market share and word of mouth of the heroproducts "OR Refreshing Springs Bouncy Shampoo" and "OR Refreshing Springs Hair Masque."Meanwhile, OR established and furthered the brand awareness of an "Expert in Asian Scalp Health" bylaunching the advanced oil-control and anti-hair loss series. The oil-control hero product "OR PurifyingScalp Cleanser" ranked 1st in the pre-shampoo category on both Tmall and Little Red Book during thepromotion period. The "OR Medicated Hair Tonic" ranked 9th in the anti-hair loss category on Tmall, aswell as ranked 1st in the Imported Scalp Essence Leaderboard and the Pre-sale Leaderboard on Tmallduring the 11.11 period.
Hapsode:
During the Reporting Period, Hapsode continuously enhanced the brand awareness of an "Expert in OilySkin Care" among consumers. In the first half of the year, the brand focused on upgrading "CleansingHoney 2.0" and "Multi-Acid Clay Mask 2.0" to strengthen its capability in cleansing product lines. In thesecond half of the year, the brand focused on addressing oxidation and dullness on oily skin, and launchedthe "Energizing Brightening Facial Mask" and the "Energizing Brightening Serum". Based on the painpoints of users with oily skin, the brand perfected the care process by expanding not only the range ofproducts, but their efficacy.
2. New marketing strategy
Proya:
During the Reporting Period, Proya brand strategy around two brand keywords: "youthfulness" and"technological prowess". Embracing the "spirit of exploration", the brand has addressed the multifacetedfactors behind specific skin concerns. The following brand marketing initiatives have been undertaken:
(1) "Thank You for Participation" in January. In this event, Proya expressed the most important "thankyou" to our users through short films posted in user stories and offline user story exhibitions. Proyaexpressed its gratitude to them for staying with us throughout 2022.
(2) "It's Gender, Not Border" on Women’s Day in March. In this event, Proya created educational picturebooks focusing on gender equality, produced thematic short films adapted from real stories, andcollaborated with law firms to launch the "Proya Public Welfare · Labor Legal Consultation Service".Through concrete efforts, Proya not only encouraged mention and discussion of "gender equality" onWomen's Day, but helped push for the issues to be considered on all other days of the year.
(3) On Mother's Day in May, Proya showed care for mothers and acknowledged both the visible physicallabor and the invisible mental labor they undertake as they support their families. Proya mentioned that"Mom can take care of family, but every family member can do the same". Through the short film "MoreThan Just Moms", Proya called on every family member to not only recognize the goodness of mothersbut also collectively take on family responsibilities.
(4) "Scientific Formulation, the Scientific Choice for Skin" in June. In this event, Proya organized 7"Daytime Coffee and Evening Alcohol Pop-Up stores" in 6 cities around China. The purpose of these pop-
up stores was to communicate the brand's concept of "scientific formulas" to consumers. Through offlineinteractions between the stores and consumers, participants had the opportunity for in-depth experience ofthe products and technological concepts.
(5) "Scientific Formulation, the Scientific Choice for Skin" light&shade technology exhibition in August.In this event, Proya interpreted the scientific skincare concept of "scientific formula" with a dynamicexperiential installation that utilized digital interaction technologies.
(6) "Glimmering Project" in September. In this event, Proya appealed for action against school bullyingand released the public welfare film "Aftermath of School Bullying", the "School Bullying Evidence"posters, and the public welfare picture book "It's Not Your Fault: A Healing Guide for the Aftermath ofSchool Bullying". Proya also worked with the Beijing New Sunshine Charity Foundation to establish the"Glimmering Project" anti-school-bullying helpline.
(7) "Echo Project" in October. In this event, Proya advocated that "We are not alone in the face ofemotions". By producing healing videos, Proya partnered with Dejavu and nine publishing houses to createa curated list of emotional healing books and blind boxes of books. It also worked with Tencent Music tohold public campus concerts at 30 universities in 6 cities across China, teaching people how to cope withtheir emotions in multiple ways.
(8) In the "Brand 20th Anniversary" event in late November, Proya produced a microfilm to capture thereal-life experiences of YANG Jianjun, a representative inheritor of the national-level intangible culturalheritage project "Iron Flower," over the past 30 years. The film showcases the spirit of the brand that hasbeen dedicated to scientific research in the past 20 years. Also, Proya interpreted the "Stupid Genius" spiritwith six true stories, paying tribute to resilient and hardworking people in all industries. With those "StupidGenius" stories, Proya hopes to spark the aspiration in the heart of people.
TIMAGE:
During the Reporting Period, TIMAGE continued to carry out marketing activities by following the"Chinese make-up, original beauty" brand philosophy. By launching and marketing new products throughe-commerce channels, TIMAGE carried out the following marketing events to enrich the core of Chineseaesthetics:
(1) In March, the "Vigorous and Flowing Jade Series" products were launched, accompanied by theunveiling of concept advertisement. Instructor TANG Yi hosted an online master class, collaborating withbeauty bloggers to create the "Vigorous and Flowing Jade Makeup" and sparking a trend of imitationmakeup. On March 2, a new product launch conference was held, with celebrities GAO Ye and MA Sichunappearing in person to arouse discussions on the Internet. The whole campaign received more than 500million views and topped the chart on Sina, TikTok, and Kwai, bringing up voices and discussions aroundthe brand.
(2) "Beyond Love" in May. In this event, TIMAGE produced a video to convey the brand idea of how tobetter love our partners, ourselves, and life. The brand also released TIMAGE 520 gift boxes tocommunicate brand emotions on holidays through KOLs in love life and female growth.
(3) On the Chinese Valentine's Day in August, TIMAGE established a partnership with the Zibo Ceramicand Glass Museum by virtue of the cultural heat in Shandong. With the theme "The Unique Love amidstMyriad Glimmers", TIMAGE extended its Chinese aesthetic legacy via the millennium-old intangiblecultural heritage craftsmanship. Meanwhile, TIMAGE launched limited-edition blush and lipstick forChinese Valentine's Day, which included a pair of glass cups to imprint the brand image of "Chineseculture" and "craftsmanship."
(4) In September, the "Revitalizing Hue" blush of the Vigorous and Flowing Jade Series was launched.With the theme "Origin of Primitive", the event debuted at the physical pop-up store in Huaihai Center inShanghai, bringing primitive nature into the city to create an immersive and original makeup experience.As for the online platform, the brand worked with the physiological media KnowYourself to jointly launchthe White Paper of Color Emotions, trying to bond colors and emotions. Inspired by autumn landscapes,Mr. Tang Yi launched the autumn edition of "Mountain Makeup", which has taken social media by storm.
3. New channel strategy
Proya:
Online:
(1) Tmall flagship store
During the Reporting Period, the Company continued to deepen the hero product strategy, optimize theportfolio, and improve the ranking of core categories and hero products; expanded product offerings across
various price segments and enhanced customer perception, thereby increasing average customer spendingand market penetration; refined operations, optimized the advertising strategy with decreased costs andincreased efficiency, and deepened collaboration between on-site and off-site audiences. By relying on theuser operation system, the Company increased the purchase frequency of customers to gain a highercustomer retention.In 2023, the gross merchandise volume (GMV) of Proya Flagship Store ranked 2nd on Tmall Beauty and1st among all domestic products. During the November 11 campaign, the GMV of Proya Flagship Storeclimbed to 1st on Tmall Beauty.
(2) TikTok
During the Reporting Period, the Company strengthened the universal operation of TikTok, completed thetransformation and efficiency enhancement of livestreaming accounts, and divided those accounts byproduct lines and target audience. The KOL livestreaming accounts kept a keen sight into market needs,and expanded the cooperation with more KOLs, while discovering new KOLs with high potential. Basedon the features of KOLs and fans, the Company customized the matchmaking mechanism to maximizethe value of exposure and unique visitors. The e-commerce channel focused on key platforms and gainedmore visitor flows from livestreaming accounts to further enhance the sales ratio. Efforts were made torefine population-based operation, improve the advertising strategy, and enhance efficiency.In 2023, Proya ranked 3rd on TikTok Beauty and 2nd among all domestic products in terms of the grossmerchandise volume (GMV). During the November 11 campaign, Proya ranked 1st on TikTok Beauty interms of GMV.
(3) JD
During the Reporting Period, the Company continued to strengthen the hero product strategy, improvedthe ranking of core hero products, optimized the brand layout in the long run, and increased the marketshare; refined operations based on target audience, established more targeted promotion strategies, soughtopportunities for collaboration between on-site and off-site audiences, and drew the attention of newcustomers with fewer costs and higher efficiency; continuously improved the product portfolios across allchannels and added more value for customers; sensed the bellwether for the industry and channels, andtook swift actions to explode the word of mouth.In 2023, Proya ranked 7th on JD Beauty and 1st among all domestic products in terms of the grossmerchandise volume (GMV). During the November 11 campaign, Proya ranked 4th on JD Beauty and 1stamong all domestic products in terms of GMV.
Offline:
(1) Department store channel: In 2023, the main goal for the department channel was to optimize the storestructure by phasing out low-performing and low-potential stores, and transitioning flagship stores to adirectly operated model. Meanwhile, the Company continuously strengthened internal management,further improved the training system for counter consultants, enhanced retail management skills, andincreased the average sales per counter.
(2) Cosmetics store channel: In terms of market positioning, the Company leveraged the potential of theProya brand to solidify our existing channels and increase the frequency of cooperation with major clients.Also, the Company actively sought opportunities for market growth and expanded collaboration with newstore clusters. In the first and second half of 2023, promotional measures were taken for the high-end anti-aging Capture Totale Series and the mid-end Youth Activating series, helping retail stores increase theiraverage customer spending and expand the customer base.
4. New organizational strategy
(1) Institutional construction: Based on strategic planning, the Company maintains a sophisticated front,middle, and back office coordination model, deepens the application of digital technology, and developsa flexible and efficient organizational operation mechanism. Based on the value return philosophy of "highinvestments, performance, and return", the Company has established a multifaceted and effective incentivesystem around the existing business strategy.
(2) Talent development: The Company insists on a talent strategy of introducing and cultivating youngtalents with international backgrounds to engage in research and development, design, and brandconstruction, aiming to build a dynamic, self-driven, and creative team of young talents. The dual-channel
promotion mechanism provides career opportunities for professional and managerial individuals toincrease the vitality and talent accumulation of the Company.
5. New R&D strategy
During the Reporting Period, the Longwu R&D Center and the Shanghai R&D Center were put into use.The Company continuously improved the R&D layout of all key stages from raw material to finishedproducts, including fundamental research, formula development, physical and chemical analysis, rawmaterial and product efficacy evaluation, etc. The focus was to conduct research on skin texture, designactive substances, verify their efficacy, as well as research and develop new skin care, make-up, andbody&hair products.
(1) Patents: During the Reporting Period, the Company newly applied for 14 national invention patents,6 utility model patents, and 27 design patents, totaling 47 new patents applied for; obtained 15 nationallylicensed invention patents, 9 utility model patents, and 17 design patents, totaling 41 patents obtained. Asof the end of the Reporting Period, the Company had 122 nationally licensed invention patents, 22 utilitymodel patents, and 112 design patents, totaling 256 patents obtained.
(2) Standard releasing: During the Reporting Period, the Company released 12 group standards, 3national standards and 1 light industry standard as a drafter. As of the end of the Reporting Period, theCompany had led or participated in the development of 17 national standards, 4 light industry standards,and 26 group standards.
(3) Achievements and awards: During the Reporting Period, the Company was granted the ExcellenceParticipation Award in the “2020-2022 Zhejiang Province Cosmetics Safety Popular Science Week” byZhejiang Medical Products Administration, the No.1 of Top 10 Enterprises in the Cosmetics Sector ofChina Light Industry (Universal Leaderboard), the Advanced Unit in Cosmetic Standardization of 2023by the Secretariat of Zhejiang Provincial Cosmetics Standardization Technology Committee. The paperon the research of the Deep Ocean Energy Series was published in the journal Skin Health and Disease ofthe British Association of Dermatologists. The paper Research on Preparation and Properties ofCrystalline Amino Acid Cleaning Cream was published in the journal Detergent & Cosmetics. The paperEnhancing Sun Protection through Zinc Oxide and Titanium Dioxide Processed by Bead Milling waspublished in the journal Frontiers in Materials. Additionally, the Company showcased a number ofscientific research achievements at the IFSCC 2023.
(4) Strategic cooperation: During the Reporting Period, the Company deepened the cooperation withexisting strategic partners, including Zhejiang University and Hangzhou Dianzi University, BeijingTechnology and Business University, and Jiangnan University in areas such as materials, functional activesubstances, and skin texture.
6. New supply chain guarantee
(1) During the Reporting Period, the Company realized green, low-carbon, and sustainable developmentby following the national "dual carbon" strategy; built a green supply chain system with a focus onresource conservation and environmental friendliness; promoted upstream and downstream enterprises toimprove resource utilization efficiency; reduced carbon emissions, and take active measures to become anenterprise featuring green supply chain management.
(2) During the Reporting Period, the Company continuously upgraded the supply chain informationplatform to achieve seamless data connectivity, enabling transparency in material procurement, production,product inspection, equipment operation, and logistics delivery throughout the entire supply chain, therebycreating a truly modern and intelligent transparent factory in the cosmetics industry. Additionally, withthe three intelligent engines (intelligent procurement platform, intelligent production scheduling, andintelligent logistics operations), the Company enhanced the efficiency of data transmission and businesscollaboration among business units on the supply chain, providing sustained support for brand promotions.
(3) During the Reporting Period, the Huzhou production base added multiple fully automated productionlines and installed several sets of emulsification equipment to ensure the enhancement of future capacity.The Company also installed fire water monitors and sprinkler systems in the warehouse to safeguard thesecurity of buildings and property. Additionally, the Company continues to strengthen safety training andemergency drills, represented by the "Employee Safety Training" that has been conducted for threeconsecutive years to ensure that every employee possesses safety awareness, concepts, and capabilities,thereby improving the capability and responsibility of all staff in safety management. Furthermore, theCompany conducted internal safety compliance assessments, graded the risks, established a control listfor graded risks, and created a spatial color-coded map to prevent safety hazards. Based on the assessment
result, the Company formulated and implemented improvement plans, identified key risks, and enhancedintrinsic safety.
(4) During the Reporting Period, the Company was honored with the title "National GreenSupply Chain Management Companies 2023" by the General Office of the Ministry ofIndustry and Information Technology of the PRC, and the Huzhou Factory was awarded the"2023 Zhejiang Provincial Level Green and Low-Carbon Factory" by the Economy and InformationTechnology Department of Zhejiang.
(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 | 8,904,573,501.39 | 6,385,451,424.00 | 39.45 |
Operating cost | 2,677,445,706.61 | 1,934,850,203.65 | 38.38 |
Selling expenses | 3,972,201,152.49 | 2,785,837,352.95 | 42.59 |
General and administrative expenses | 455,441,770.70 | 327,296,749.37 | 39.15 |
Financial expenses | -59,079,577.33 | -40,996,523.01 | Not applicable |
Research and development expenses | 173,570,127.49 | 128,009,104.49 | 35.59 |
Net cash flow from operating activities | 1,468,793,814.58 | 1,111,136,117.23 | 32.19 |
Net cash flow from investing activities | -475,831,195.84 | -298,215,550.57 | Not applicable |
Net cash flow from financing activities | -460,280,193.92 | -65,251,320.73 | Not applicable |
Cause for changes in operating revenue: mainly due to increased online sales.Cause for changes in operating costs: mainly due to increased operating revenue.Cause for change in sales expenses: In 2023, sales expenses amounted to RMB3.972billion, accountingfor 44.61% of the operating revenue (compared with 43.63% for the same period last year). Salesexpenses increased by RMB1.186 billion or 42.59% YOY, mainly due to an increase of RMB1.114billion or 46.04% in the image promotion expenses in the current period (used for the incubation of newbrands as well as development of offline channels and overseas channels).Cause for change in administrative expenses: In 2023, administrative expenses amounted toRMB455million, accounting for 5.11% of the operating revenue (compared with 5.13% for the sameperiod last year). General and administrative expenses increased by RMB128 million or 39.15% YOY,mainly due to increased equity incentive expenses for restricted shares, employee compensation, andservice fees.Cause for change in financial expenses: mainly due to increased interest income.Cause for change in R&D expenses: In 2023, R&D expenses amounted to RMB174million, an increaseof RMB45.56million YOY, accounting for 1.95% of the operating revenue (compared with 2.00% forthe same period last year). The parent company's R&D expense ratio was 4.13% in 2023 (compared with
4.31% for the same period the previous year).
Cause for change in net cash flow from operating activities: mainly due to 1. A YOY increase inoperating revenue and the increase in cash received from the sale of goods; 2. The increase in thepayment for goods; 3. The increase in the payment for image promotion expenses.Cause for change in net cash flow from investment activities: 1. RMB90million was paid for the equityinvestment in Gaolang Holdings Co., Ltd. in the previous period. No such event exists in the current period.
2. RMB300million was increased in other cash paid related to investment activities.Cause for change in net cash flow from financing activities: 1. RMB165million of equity incentiveexpense for restricted shares was received in the previous period. The event is not recognized in thecurrent period. 2. RMB224million was increased in cash paid for distribution of dividends or profits orsettlement of interest expenses.
A detailed description of major changes in the Company's activities, profit composition or sources ofprofit during 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 | 8,890,227,788.97 | 2,666,864,872.50 | 70.00 | 39.74 | 39.16 | Up by 0.13 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 (including cleansing) | 7,559,420,109.98 | 2,246,373,210.16 | 70.28 | 37.85 | 38.92 | Decreased by 0.23 percentage points |
Make-up cosmetics | 1,115,712,421.20 | 340,597,637.72 | 69.47 | 48.28 | 35.34 | Up by 2.92 percentage points |
Body & hair | 215,095,257.79 | 79,894,024.62 | 62.86 | 71.17 | 67.54 | Up by 0.81 percentage points |
Total | 8,890,227,788.97 | 2,666,864,872.50 | 70.00 | 39.74 | 39.16 | Up by 0.13 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 | 19,623,333.54 | 7,297,459.08 | 62.81 | 18.92 | 20.56 | Decreased by 0.51 percentage points |
North | 66,141,324.36 | 25,601,181.22 | 61.29 | -5.22 | -2.97 | Decreased |
China | by 0.90 percentage points | |||||
East China | 682,273,015.88 | 264,640,456.25 | 61.21 | -4.28 | -11.36 | Up by 3.10 percentage points |
South China | 52,827,183.21 | 19,406,138.04 | 63.26 | 17.59 | 7.53 | Up by 3.44 percentage points |
Central China | 127,858,964.46 | 52,800,759.63 | 58.70 | -14.74 | -14.63 | Decreased by 0.05 percentage points |
Northwest China | 42,799,826.73 | 15,112,592.49 | 64.69 | 22.04 | 29.28 | Decreased by 1.98 percentage points |
Southwest China | 74,752,733.67 | 27,725,014.63 | 62.91 | -5.64 | -7.30 | Up by 0.66 percentage points |
Hong Kong and overseas | 83,159,245.45 | 32,884,507.37 | 60.46 | 24.19 | 14.28 | Up by 3.43 percentage points |
Others (e-commerce) | 7,740,792,161.67 | 2,221,396,763.79 | 71.30 | 49.25 | 54.79 | Decreased by 1.03 percentage points |
Total | 8,890,227,788.97 | 2,666,864,872.50 | 70.00 | 39.74 | 39.16 | Up by 0.13 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 | 8,274,350,956.67 | 2,413,275,186.30 | 70.83 | 42.96 | 43.29 | Decreased by 0.07 percentage points |
Offline | 615,876,832.30 | 253,589,686.20 | 58.82 | 7.35 | 9.23 | Decreased by 0.71 percentage points |
Total | 8,890,227,788.97 | 2,666,864,872.50 | 70.00 | 39.74 | 39.16 | Up by 0.13 percentage points |
Explanation on 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 RMB8.274billion online sales (accounting for 93.07% of the online sales revenue), anincrease of RMB2.486billion or 42.96% YOY.
(2) Description of growth in make-up cosmetics: Mainly due to RMB1.001billion sales of TIMAGE thatfalls under the make-up cosmetics category during the Reporting Period, an increase of RMB429 millionor 75.06% YOY.
(3) Description of growth in body & hair: Mainly due to RMB215million sales of OR that falls under thebody & hair category during the Reporting Period, an increase of RMB89million or 71.17% YOY.
(4) Description by region: The main reason for the increase in revenue in the Northeast China, SouthChina, and Northwest China is the growth in offline sales of household chemicals. The decline inrevenue in the North China, East China, Central China, and Southwest China is primarily due to adecrease in online distribution sales. The growth in revenue in Hong Kong, overseas markets, and e-commerce is mainly due to the growth in online direct 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 | 355,211,533 | 336,222,351 | 109,169,214 | 13.10 | 21.81 | 21.06 |
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: Yuan
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 same period last year (%) | YOY change ratio (%) | Description Note |
Household chemicals industry | Raw materials | 1,675,244,940.56 | 62.82 | 1,268,693,580.45 | 66.20 | 32.04 | |
Labor and manufacturing cost | 162,684,501.36 | 6.10 | 107,432,847.50 | 5.61 | 51.43 | ||
Outsourcing | 444,682,665.46 | 16.67 | 302,956,467.34 | 15.81 | 46.78 | ||
Freight | 384,252,765.12 | 14.41 | 237,269,640.00 | 12.38 | 61.95 | ||
Subtotal | 2,666,864,872.50 | 100.00 | 1,916,352,535.29 | 100.00 | 39.16 | ||
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 current period (%) | YOY change ratio (%) | Description Note |
Skincare (including cleansing) | Raw materials | 1,633,516,443.19 | 72.72 | 1,228,433,567.23 | 75.97 | 32.98 | |
Labor and manufacturing cost | 153,451,655.40 | 6.83 | 101,753,659.87 | 6.29 | 50.81 | ||
Outsourcing | 151,422,368.92 | 6.74 | 92,297,157.26 | 5.71 | 64.06 | ||
Freight | 307,982,742.65 | 13.71 | 194,513,686.83 | 12.03 | 58.33 | ||
Subtotal | 2,246,373,210.16 | 100.00 | 1,616,998,071.19 | 100.00 | 38.92 | ||
Make-up cosmetics | Raw materials | 39,373,413.99 | 11.56 | 40,084,933.46 | 15.93 | -1.78 | |
Labor and manufacturing cost | 8,443,255.33 | 2.48 | 5,679,187.63 | 2.26 | 48.67 | ||
Outsourcing | 232,107,427.47 | 68.15 | 174,194,228.29 | 69.21 | 33.25 | ||
Freight | 60,673,540.93 | 17.81 | 31,708,656.87 | 12.60 | 91.35 | ||
Subtotal | 340,597,637.72 | 100.00 | 251,667,006.25 | 100.00 | 35.34 | ||
Body & hair | Raw materials | 2,355,083.38 | 2.95 | 175,079.76 | 0.37 | 1,245.15 | |
Labor and manufacturing cost | 789,590.63 | 0.99 | 0.00 | 0.00 | Not applicable | ||
Outsourcing | 61,152,869.07 | 76.54 | 36,465,081.79 | 76.46 | 67.70 | ||
Freight | 15,596,481.54 | 19.52 | 11,047,296.30 | 23.17 | 41.18 | ||
Subtotal | 79,894,024.62 | 100.00 | 47,687,457.85 | 100.00 | 67.54 |
Other explanationsNone
(5). Changes in consolidation due to changes in the equity of major subsidiaries during theReporting Period
√ Applicable □ Not applicable
For details, refer to the particulars contained in "IX. Changes in the Consolidation Scope", "Section XFinancial Report" of this Report.
(6). Significant changes or adjustments to the Company's business activities, products or servicesduring 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 RMB1.12billion, accounting for 12.57% of the total annualsales; the sales of related parties of such top five customers amounted to RMB0, accounting for 0.00%of the 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 RMB513.36million, accounting for 22.31% 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 suppliersduring the Reporting Period
□ Applicable √ Not applicable
Other explanationsNone
3. Expenses
√ Applicable □ Not applicable
Unit: Yuan
Expense item | 2023 | 2022 | Change for the current period | Growth rate (%) |
Selling expenses | 3,972,201,152.49 | 2,785,837,352.95 | 1,186,363,799.54 | 42.59 |
General and administrative expenses | 455,441,770.70 | 327,296,749.37 | 128,145,021.33 | 39.15 |
R&D expenses | 173,570,127.49 | 128,009,104.49 | 45,561,023.00 | 35.59 |
Financial expenses | -59,079,577.33 | -40,996,523.01 | -18,083,054.32 | Not applicable |
4. R&D investment
(1).Statement of R&D investment
√ Applicable □ Not applicable
Unit: Yuan
Expensed R&D investment for the current period | 173,570,127.49 |
Capitalized R&D investment for the current period | 0.00 |
Total R&D investment | 173,570,127.49 |
Total R&D investment in operating revenue (%) | 1.95 |
Capitalization of R&D investment (%) | 0.00 |
(2).Statement of R&D personnel
√ Applicable □ Not applicable
Number of R&D personnel | 322 |
Percentage of R&D personnel (%) | 10.84 |
Educational background structure | |
Educational level | Number of persons |
PhD | 8 |
Master | 126 |
Bachelor | 152 |
Associate | 32 |
High school and below | 4 |
Age structure | |
Age range | Number of persons |
Under 30 (exclusive) | 154 |
30-40 (incl. 30 and excl. 40) | 131 |
40-50 (incl. 40 and excl. 50) | 34 |
50-60 (incl. 50 and excl. 60) | 3 |
60 and above | 0 |
(3).Description
□ Applicable √ Not applicable
(4).Cause for significant changes in the composition of R&D personnel and the impact on thefuture development of the Company
□ Applicable √ Not applicable
5. Cash flow
√ Applicable □ Not applicable
Unit: Yuan
Item | Amount for the current period | Amount for the same period last year | Growth rate (%) | Description |
Net cash flow from operating activities | 1,468,793,814.58 | 1,111,136,117.23 | 32.19 | 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 | -475,831,195.84 | -298,215,550.57 | Not applicable | Mainly due to: 1. A payment of RMB90 million for the equity investment in Gaolang Holdings Co., Ltd. in the previous period. The event is not recognized in the current period. 2. An increase of RMB300 million in cash paid related to investment activities. |
Net cash flow from financing activities | -460,280,193.92 | -65,251,320.73 | Not applicable | Mainly due to: 1. The Company received RMB165 million of equity incentive expense for restricted shares in the previous period. The event is not recognized in the current period. 2. The cash paid to distribute dividends, profits, or repay interest was increased by RMB224 million. |
Cash received from the sale of goods and the rendering of | 9,328,552,717.55 | 7,088,465,997.21 | 31.60 | Mainly due to the YOY increased operating revenue. |
services | ||||
Payments of various types of taxes | 1,017,756,020.64 | 660,096,624.31 | 54.18 | Mainly due to the expanded sales scale and the improved profitability of the Company. |
Other cash paid related to operating activities | 3,761,423,719.98 | 2,616,308,090.91 | 43.77 | 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 | 285,500.00 | 3,751,463.96 | -92.39 | Mainly due to the decreased cash receipts from disposals of fixed assets in the current period. |
Cash paid for investments | 18,636,363.64 | 131,003,609.10 | -85.77 | Mainly due to the new equity investment of RMB90 million to Gaolang Holdings Co., Ltd. in the previous period. The event is not recognized in the current period. |
Other cash paid related to investing activities | 300,000,000.00 | Not applicable | Mainly due to the purchase of fixed-term deposits in the current period. | |
Cash received from capital contributions | 165,676,000.00 | -100.00 | Mainly due to the receipt of payment for the equity incentive expense for restricted shares from employees in the previous period. The event is not recognized in the current period. | |
Cash paid for distribution of dividends or profits or settlement of interest expenses | 407,092,087.41 | 182,663,748.85 | 122.86 | Mainly due to the increased cash dividends paid in the current period. |
(II) Description of 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: Yuan
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 (%) | Explanation |
Accounts receivable | 344,570,196.54 | 4.71 | 102,157,898.41 | 1.77 | 237.29 | Mainly due to the increased end balance for the receivables of Beijing Jingdong Century Trading Co., Ltd. |
Receivable financing | 7,378,700.06 | 0.10 | 0.00 | 0.00 | Not applicable | Mainly due to the increased bank acceptance bills receivable. |
Prepayments | 202,870,195.58 | 2.77 | 91,483,523.15 | 1.58 | 121.76 | Mainly due the increased prepayment for image promotion expenses as of the end of the current period. |
Other current assets | 99,765,073.07 | 1.36 | 49,735,996.57 | 0.86 | 100.59 | Mainly due to the increased input VAT to be deducted. |
Fixed assets | 827,350,985.29 | 11.30 | 570,376,309.67 | 9.87 | 45.05 | Mainly due to the conversion of completed works of the Huzhou Expansion Production Base Construction Project (Phase I) and the Longwu R&D Center Construction Project into fixed assets. |
Construction in progress | 52,038,642.94 | 0.71 | 207,378,935.86 | 3.59 | -74.91 |
Mainly due tothe conversionof completedworks of theHuzhouExpansionProductionBaseConstructionProject (PhaseI) and theLongwu R&D
Center Construction Project into fixed assets, as well as long-term prepaid expenses. | ||||||
Right-of-use assets | 14,104,821.34 | 0.19 | 6,410,634.25 | 0.11 | 120.02 | Mainly due to the addition of an office site and the signing of lease contracts in the current period. |
Long-term prepaid expenses | 67,184,328.83 | 0.92 | 19,142,604.46 | 0.33 | 250.97 | Mainly due to converting the completed work of the Longwu R&D Center Construction Project from construction in progress to long-term prepaid expenses. |
Deferred income tax assets | 108,494,364.60 | 1.48 | 48,305,338.82 | 0.84 | 124.60 | Mainly due to the increased deductible temporary difference caused by unrealized profit from internal transactions and unredeemed gifts for sold products. |
Other non-current assets | 16,974,946.99 | 0.23 | 5,554,726.06 | 0.10 | 205.59 | Mainly due to the increase in prepayments for long-term asset purchase funds. |
Notes payable | 36,959,074.14 | 0.50 | 69,626,352.12 | 1.21 | -46.92 | Mainly due to the reduced balance of bank acceptance bills payable. |
Accounts payable | 1,018,522,358.60 | 13.91 | 475,427,484.23 | 8.23 | 114.23 | Mainly due to the increased end balance of payables for goods and |
expenses payable. | ||||||
Contract liabilities | 301,014,873.58 | 4.11 | 174,602,833.91 | 3.02 | 72.40 | Mainly due to (1) an increase in the number of members and the point conversion rate; (2) the Company had not distributed unredeemed gifts for sold products. |
Employee compensation payable | 166,444,494.43 | 2.27 | 124,938,749.36 | 2.16 | 33.22 | 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 payable | 222,765,869.94 | 3.04 | 152,918,871.45 | 2.65 | 45.68 | Mainly due to the expanded sales scale and the improved profitability of the Company. |
Non-current liabilities due within one year | 3,970,060.11 | 0.05 | 2,549,452.14 | 0.04 | 55.72 | Mainly due to the transfer of lease liabilities due within one year. |
Other current liabilities | 15,022,173.42 | 0.21 | 10,820,499.59 | 0.19 | 38.83 | The tax on items to be sold in advance receipt was listed in other current liabilities due to the expanded sales and increased advance receipt in the current period. |
Lease liabilities | 9,970,306.87 | 0.14 | 3,718,119.41 | 0.06 | 168.15 | Mainly due to the addition of an office site and the signing of lease |
contracts in the current period. | ||||||
Estimated liabilities | 33,063,299.45 | 0.45 | 59,282,928.68 | 1.03 | -44.23 | Mainly due to the change in the amount of anticipated return caused by the adjustment of supermarket and department store channels. |
Deferred income tax liabilities | 19,019,431.67 | 0.33 | -100.00 | Mainly due to the listing of net deferred income tax assets/liabilities for the same legal entity. | ||
Share capital | 396,757,184.00 | 5.42 | 283,519,469.00 | 4.91 | 39.94 | Mainly due to that the Company implemented the plan for the capitalization of capital reserves. |
Other comprehensive income | -53,847,100.91 | -0.74 | -1,918,603.07 | -0.03 | Not applicable | Mainly due to changes in fair value of other equity instrument investments and changes in other comprehensive income that cannot be reclassified to profit or loss under the equity method. |
Surplus reserve | 198,411,582.50 | 2.71 | 141,759,734.50 | 2.45 | 39.96 |
Mainly due tothe withdrawalof statutorysurplus reserveaccording to thenet profit of theparentcompany. Thestatutorysurplus reservedoes not needto bewithdrawn ifthe cumulativeamount reaches
fifty percent or more of the registered capital. | ||||||
Undistributed profit | 3,040,145,490.59 | 41.51 | 2,300,384,763.19 | 39.81 | 32.16 | Mainly due to the increased profit available for distribution attributable to shareholders of the Company in the current period. |
Minority interests | 50,765,849.41 | 0.69 | 12,734,670.33 | 0.22 | 298.64 | Mainly due to the increase in the profit of the Company's subsidiary Ningbo TIMAGE as well as gains or losses attributable to minority interests. |
Other explanationsNone
2. Overseas assets
√ Applicable □ Not applicable
(1) Scale of assets
Including RMB23,718.20 (Unit: RMB '0,000 Currency: RMB) of overseas assets, accounting for
3.23% 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: Yuan Currency: RMB
Item | Ending book balance | Ending book value | Type of restrictions | Cause for restrictions |
Cash and cash equivalents | 335,288,251.36 | 335,288,251.36 | Cannot be withdrawn at any time | Fixed-term deposit |
8,800,000.00 | 8,800,000.00 | Frozen | L/C deposit | |
250,000.00 | 250,000.00 | Frozen | Transformer deposit | |
70,000.00 | 70,000.00 | Frozen | Vehicle ETC deposit | |
5,298,890.00 | 5,298,890.00 | Frozen | Pinduoduo deposit | |
2,110,704.68 | 2,110,704.68 | Frozen | Direct store deposit |
Item | Ending book balance | Ending book value | Type of restrictions | Cause for restrictions |
Total | 351,817,846.04 | 351,817,846.04 |
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 information
1. 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 duringthe Reporting 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 the description in "5. New R&D strategy", "V. Main Operations during the Reporting Period","Section III Management Discussion 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 rawmaterialsFunctionalcomponents
Functionalcomponents
Heating todissolve
Heating to dissolve | Homogeneous emulsification | Cooling |
Warehousing
Warehousing | Cartoning | Packing | Filling | Storage |
Inspection of semi-finished products
Inspection of semi-finished productsHeat preservationand mixing
Heat preservation and mixing | Filtration and discharge |
Inspection offinished products
Inspection offinished products
Cleansing raw
materials
Cleansing raw
materials
Heating andmixing
Heating and mixing | Cooling |
Warehousing
Warehousing | Cartoning | Packing | Filling | Storage |
Inspection of semi-finished products
Inspection of semi-finished productsHeat preservation
and mixing
Heat preservation and mixing | Filtration and discharge |
Inspection offinished products
Inspection offinished productsPowder raw materials
Powder raw materialsMixing
MixingWarehousing
Warehousing | Cartoning | Packing |
Crushing and
Crushing and
sieving
Functional componentsDischarge
DischargeForming
FormingInspection offinished products
Inspection offinished products
Toning
Toning
Visualinspection
Visualinspection
Powder storage
Powder storageFilling
FillingInspection of semi-
finished products
Inspection of semi-finished productsAluminum plate
(2) Lipstick cosmetics
(3) Eyelashes and eyeliners
(5). Production capacity and operation status
√ Applicable □ Not applicable
Unit: RMB '0,000 Currency: RMB
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 | 380 million pcs | 82.20 | 21.18 million pcs | 4,019.40 | December 2024 |
Huzhou Cosmetics Factory | 40 million pcs | 20.75 |
Change in production capacity
□ Applicable √ Not applicable
Adjustment of product line and optimization of capacity structure
□ Applicable √ Not applicable
Unexpected shutdown
□ Applicable √ Not applicable
Wax-based raw
materials
Heating to
dissolve
WarehousingToning
ToningPacking
PackingDefoaming
DefoamingFunctional
Functional
components
MoldingFiltration and
Filtration and
discharge
StorageInspection offinished products
Inspection of finished products | Visual inspection |
Cartoning
CartoningInspection of semi-finished products
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 offinished products
Inspection offinished products
Homogeneousemulsification
Homogeneousemulsification
Cartoning
Cartoning
Inspection of semi-
finished products
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 | 2.63 | About 1,870 million pieces | About 1,857.28 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 | -3.65 | About 1,815 tons | About 1,878 tons |
Raw material_active substance | Mainly by price inquiry and comparison, while performing diversified cultivation of suppliers with a single source of supply | Settle within the payment period as agreed | 73.45 | About 597 tons | About 634 tons |
Raw material_grease wax | Mainly by competitive procurement, while establishing long-term strategic cooperation with advantageous suppliers | Settle within the payment period as agreed | 3.58 | About 744 tons | About 755 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 | 1.22 | About 125 tons | About 136 tons |
Raw material_sunscreen | Mainly by competitive procurement, while establishing | Settle within the payment period as agreed | -9.84 | About 29 tons | About 31 tons |
long-termstrategiccooperation withadvantageoussuppliers
Impact of changes in the prices of major raw materials on the Company's operating costs: Rising pricesof raw 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 | 224,917 tons | 224,917 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 | 1,450 tons | 1,450 tons |
Gas | Fixed agreement with the local gas supply company | Prepayment and monthly settlement or payment on demand according to the local requirements | -11.52 | 397,114 cbm | 397,114 cbm |
Impact of changes in the prices of major energy sources on the Company's operating costs: Minor impacton operating costs.
(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 margin (%) | Change in operating revenue YOY (%) | Change in operating cost YOY (%) | Change in gross profit margin YOY (%) | Gross profit margin for products in the same |
industry and field | |||||||
Skincare (including cleansing) | 755,942.01 | 224,637.32 | 70.28 | 37.85 | 38.92 | -0.23 | No public information available |
Make-up cosmetics | 111,571.24 | 34,059.76 | 69.47 | 48.28 | 35.34 | 2.92 | No public information available |
Body & hair | 21,509.53 | 7,989.40 | 62.86 | 71.17 | 67.54 | 0.81 | 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 | 827,435.10 | 42.96 |
Offline | 61,587.68 | 7.35 |
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 ReportingPeriod
□ Applicable √ Not applicable
(2). Major environmental violations
□ Applicable √ Not applicable
(V) Analysis of investmentOverall analysis of external equity investments
√ Applicable □ Not applicable
Unit: RMB
Item | Ending amount | Beginning amount |
Other equity instrument investments | 107,660,400.00 | 146,402,400.00 |
Investment in joint ventures | 3,059,991.91 | 3,068,948.16 |
Investment in associates | 110,514,166.58 | 135,464,429.30 |
Total | 221,234,558.49 | 284,935,777.46 |
For details, refer to the particulars contained in "17. Description of long-term equity investments", "VII. Notes to the Items of Consolidated Financial 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 for the current period | Accumulated change in fair value included in equities | Impairment accrued for the current period | Amount of purchase for the current period | Amount of sale/redemption for the current period | Other changes | Ending amount |
Other | 146,402,400.00 | -38,742,000.00 | 107,660,400.00 | |||||
Total | 146,402,400.00 | -38,742,000.00 | 107,660,400.00 |
For details, refer to the particulars contained in "18. Description of other equity instrument investments", "VII. Notes to the Items of Consolidated FinancialStatements", "Section X Financial Report" of this Report.
Description of securities investment
□ Applicable √ Not applicable
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 | 118,374.88 | 35,491.97 | 8,436.47 | Holding |
Hangzhou Proya Trade Co.,Ltd. | Cosmetics sales | Cosmetics | 5,000.00 | 33,320.09 | 10,823.95 | 5,182.01 | 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 2023, the total retail sales of consumergoods reached RMB47,149.5 billion, up by 7.2% YOY; the total retail sales of cosmetics reachedRMB414.2billion, up by 5.1% YOY (covering consumer goods above designated units).
(II) Development strategy of the Company
√ Applicable □ Not applicable
"6" refers to new consumption, new marketing, new organization, new mechanism, new technology andnew intelligent manufacturing; "N" refers to creating N brands
(1) New consumption: Refers to innovative services to meet more consumer needs and consumer value.It involves catering to consumers‘ diverse preferences in consumption channels and establishing apresence in emerging channels, such as the development of the Tiktok platform. Furthermore, it involvesadapting to the overseas market environment and embracing new challenges;
(2) New marketing: Refers to digital marketing, fine omni-channel operation, and accurate and advancedconsumer insight, focusing on improving the overall efficiency of the marketing process. It also involvespaying attention to future marketing possibilities in new areas and making preparations;
(3) New organization: Refers to an efficient organization that is flat, platform-based, self-driven andcollaborative, taking into account both supporting the efficient operation of mature brands andempowering the rapid growth of incubated brands;
(4) New mechanism: Refers to a flexible, diversified, business-oriented incentive mechanism to beestablished to enhance strategy execution (with a flexible project mechanism to promote businesscommunication efficiency and integrated synergies between various departments and business units);
(5) New technology: Refers to focusing on basic scientific research, establishing the presence ofindependent development of new raw materials and foreign innovative raw materials reserve, jointlydeveloping innovative technologies, seeking more R&D partners and resources in different fields,building internal and external cooperation platforms, actively exploring R&D resources worldwide to
form a global R&D landscape, provide technological guarantee for targeted product enhancement, andcreate a sustainable and unique R&D technological competitiveness; Additionally, measures are taken tofurther improve the intelligent operation management system and carry out targeted transformationtoward digital intelligence and informatization to improve operational refinement and managementefficiency in business and organization and achieve process transparency and accurate decision-making.By comprehensively planning and further enhancing the digital management system, we explore theapplication possibilities of new technological developments (such as artificial intelligence) at theconsumer end, catering to the demands of large-scale and rapidly evolving businesses;
(6) New intelligent manufacturing: Refers to the creation of an agile and flexible supply chain to servethe hero product matrix and the application of the digital management system to improve productionquality, strengthen the supply chain supervision, and guarantee product quality. In addition, we activelyassume social responsibilities and contribute to sustainable development by establishing greenproduction bases and introducing green raw materials and operational models.—— 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.
(III) Business plan
√ Applicable □ Not applicable
I. Construction of a multi-category and multi-brand matrix1 Skincare products - Proya, HapsodeProya:
(1) Brand: Continuously upgrade the brand. Shape the brand with a new image, new products, and newtechnologies. Further consolidate the brand mindset of "A Scientific Choice for Skin" with better productportfolios. Meanwhile, better improve the service and logistics systems, and refine operations in alldimensions related to consumers. Better communicate with consumers regarding our dedication toproducts and scientific formulas, making Proya the preferred choice of skincare for Chinese women.
(2) Product: Further study the cause of skin problems for female Chinese consumers and expand theproduct portfolio to meet more requirements. Strengthen more formulas for mature product lines, upgradethe formulas and efficacy of various products, and provide better solutions for consumers. Establish andimprove a large product portfolio with extensive efficacy, build up the word of mouth for products, andimprove user loyalty and brand reputation.
(3) Marketing: Continue to center the brand strategy around two brand keywords: "youthfulness" and"technological prowess." Embrace the "spirit of exploration," and address the multifaceted factors behindspecific skin concerns. In addition to carrying out promotional campaigns around key social topics suchas gender equality, family responsibility, intimate relationships, young people's growth, and mental health,the brand also plans to extend its philosophy "Not Just Today" and expand the impact of brand long-termism beyond brand incidents: 1) Based on the all-year-round brand marketing philosophy, Proya hasestablished its own online public welfare platform to accommodate long-lasting public welfare activitiesunder the brand tenet. The platform debuted in March 2023 and added the "Glimmering Project" anti-school-bullying helpline in September 2023. 2) The brand's TikTok account "Second Life in Proya" wascreated to convey brand attitudes with life-oriented and scenario-based plays.
(4) Channel:
1) Tmall: Better refine operations on Tmall and improve the operating strategy. In terms of products,continuously improve the product portfolio, enhance the market share of mature hero products, andcreate opportunities for new categories while deepening the product layout to seize the market. In termsof consumer attraction, draw the attention of visitors from touch points, take more advantages of content,and strengthen cooperation with IPs on the platform to increase the quantity and quality of attractivecontent and continuously increase the precise traffic of stores. Value the creation of customer perception,enrich forms of gifts for key products, and launch coordinative marketing activities to cover more coreconsumers of the brand. In terms of membership, secure the traditional member attraction channels withsample distribution while expanding presence to more channels. Better draw the attention of users andincrease the frequency of repeated purchases with a point mechanism. In terms of livestreaming,organically combine key and secondary KOLs as well as store-owned livestreaming accounts to create anetwork of abundant portfolios including new products, exclusive products, and brand benefits, thusboosting the surge of attention from livestreaming platforms.
2) TikTok: Establish a comprehensive presence that locates the right people for the right products,expands to new consumers, and breaks the circle with KOLs. Establish a presence in 6 major accountmatrices and sort out the connection between target audience in the livestreaming room and productssold to break through the popularity barriers of hero products. Reach intensive cooperation with KOLsand match them with corresponding products. Refine the operation of the e-commerce platform, attractconsumers through search, activities, and paid functions to promote the conversion ratio and furtherimprove the sales proportion. Improve the advertising quality and efficiency and increase the use ofselected materials.
3) JD: Seize industrial consumers from the perspectives of people, products, and venues to link upbusiness modes inside out. Improve the hero product strategy, deepen product combos, and try scenario-based sales. Reach deeper cooperation with platforms, continuously improve the advertising efficiency,and increase the sales at key promotional nodes.
4) Offline: Cosmetics store channel: Continuously explore sales opportunities through the channel andfind more opportunities to cooperate with different industries and business sectors to expand the salesnetwork. Optimize the product portfolio and increase the "dynamic sales" efficiency at the point of sale tosatisfy the needs of consumers at different ages. Help clients to complete sales with online tools andintensify the image building of management at the point of sale. Department store channel: Focus oninfluential business districts and large department store chains, make plans to open brick-and-mortar storesin multiple shopping centers nationwide, enhance the brand image design, and provide consumers with acompletely new shopping experience. Furthermore, continue to upgrade and optimize offline pop-upstores, maintain brand theme of "scientific formula" and enhance in-store sample distribution to attractmore consumers to participate.
Hapsode:
(1) Brand: Continue to upgrade the brand, enhance the scientific efficacy of products to create cost-efficient options that are suitable for oily skin, with noticeable effectiveness. Try a "less is more"marketing approach and convey the core user keyword "companionship" by collaborating on product IPsand optimizing brand-consumer touchpoints.
(2) Product: 1) Continuously monitor the health of oily skin types and develop a more comprehensiveand targeted solution for the health of oily skin. Committed to a visually delicate state of oily skin, deeplyprotecting the health of oily skin. 2) Streamlined product lines and provide solutions for oily and acne-prone skin.
(3) Marketing: Continue to collaborate with popular IPs and engage in cross-industry projects to connectwith the younger generation and have direct conversations with them. Collaborate with the most popularfemale celebrity, Loopy, a zoomer, to create a limited edition product packaging, thereby breaking intothe market by leveraging the popularity of the trendiest celebrity among young people.
(4) Channel: Utilize TikTok as the primary channel for growth and simultaneously enhance the refinedoperations of other online channels such as Tmall.
2. Make-up - TIMAGE
(1) Brand: Continue to express the brand theme of "Chinese make-up, original beauty", and strive tocollaborate with various partners to break boundaries and constantly enhance brand awareness. 1)Officially announce the appointment of actress CHEN Duling as the brand ambassador to attract fans fromdifferent circles. 2) Launch limited edition products by cooperating with popular IPs and continue toexplore TIMAGE's "Chinese aesthetics".
(2) Product: Continue to strengthen the hero product strategy, maintain the leading position in the facialmakeup category, build up reputation in the large makeup base category, and make breakthroughs in thefoundation makeup, compact, and pressed powder categories, so as to complete the makeup base portfolio.
(3) Marketing: Transform the brand into "a professional makeup artist brand customized for Chinesefaces", build a professional brand image, and form an impression in the mind of consumers. 1)Communicate with consumers on "professional makeup techniques and product features", while providingprofessional makeup solutions. 2) Utilize a professional service team and expert tutorials to advance thecustomized service system established by TIMAGE to the forefront. 3) Concentrate on leveragingTIMAGE's "professional endorsements" and "expertise" at brand milestones for impactful marketingoutput.
(4) Channel: Establish the brand image on Tmall, TikTok, JD, and other core channels and earn topranking positions.
3. Body & Hair - Off&Relax (OR):
(1) Brand: Persist in the long-term goal of "becoming an enabler of a healthy and caring lifestyle forAsian scalps," establish and deepen the mindset of being an "expert in Asian scalp health."
(2) Product: 1) Position the brand as an "expert in Asian scalp health," apply the product developmentconcept of "prevention through nurturing, gradual improvement, and an inside-out approach."Continuously upgrade hero products while expanding the range of supplementary products to achievecomprehensive benefits to scalp health. 2) Enhance the efficacy and clinical validation of products forthe Chinese market by synchronizing with third-party testing agencies to improve the efficacy validationand collaborating with the Hair Disease Medical Consortium of the China-Japan Friendship Hospital toachieve clinical validation.
(3) Marketing: 1) Implement an aggressive breakout strategy for hero products, create the core heroproduct "OR Refreshing Springs Bouncy Shampoo", enhance the layout of the shampoo category, andincrease the market penetration of the repair, anti-hair loss, and nourishing series. 2) Continue toincrease the market share of the "anti-hair loss" hero product by emphasizing professionalism and strongendorsement. 3) Improve the product layout and create a second-tier "Hair Care Series" (hair mask andhair care essence oil) bestsellers, continue to improve the market penetration of the oil control series(Purifying Scalp Cleanser).
(4) Channel: Focus on further enhancing the brand ranking on Tmall, JD, and TikTok to increase brandvisibility and market position.
II. R&D constructionIn 2024, the Company will continue to improve and upgrade the R&D system based on theinternationalization strategy.
(1) Fundamental research: Continue to plan for and apply the development pipeline of new technologiesand new raw materials, and continue to develop advanced enabling technologies in computational biology,genomics, and proteomics.
(2) Applied research: Guided by market demand, develop skincare and makeup products of variouslevels with obvious efficacy, great skin feel and favorable costs, and complete the technological layoutfor future iterations of all hero products.
(3) Clinical research: Continue with the clinical research and verification of products, and explore newmethods to verify the efficacy of raw materials and products. Develop new efficacy testing methods byusing advanced instruments and statistics.
(4) External cooperation: Stabilize existing cooperation channels while expanding and deepening thecooperation with universities and research institutions. Leverage their advanced equipment and cutting-edge technologies to empower and facilitate research work.
(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 differentoperation modes for different categories and the incompetent team.
(V) Other
□ Applicable √ Not applicable
VII.Circumstances Where the Company Fails to Disclose Due to Non-applicability or Special
Reasons Such as State Secrets and Trade Secrets and Statement of Reasons
□ Applicable √ Not applicable
Section IV Corporate GovernanceI.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 Codeof Corporate Governance of Listed Companies as well as the Articles of Association. The Company hasset up the general meeting of shareholders, Board of Directors, Board of Supervisors and specialcommittees under the Board of Directors as required and developed corresponding rules of procedure.Such rules define the duties, powers, procedures and obligations of organizations at all levels in terms ofdecision-making, supervision and implementation. They form a scientific and effective governancestructure featuring clear rights and responsibilities, mutual checks and balances, and mutualcoordination. During the Reporting Period, the Company consciously fulfilled the obligation forinformation disclosure, managed investor relationships, and promoted the Company to continuouslyimprove its standard operation. The corporate governance status complies with the requirements of thenormative documents on 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 theircontrol engage in the same or similar business activities, as well as the impact of horizontal competitionor major changes in horizontal competition on the Company, resolutions taken, progress and follow-upresolutions
□ Applicable √ Not applicable
III.Meetings of the General Meeting of Shareholders during the Reporting Period
Session | Date | Reference | Date of release | Resolution |
2022 Annual General Meeting of Shareholders | May 11, 2023 | Announcement No. 2023-026 on SSE website (www.sse.com.cn) | May 12, 2023 | The meeting approved proposals including the Company's Annual Report 2022 and its Summary, and the Plan for Annual Profit Distribution and Capitalization of Capital Reserves for 2022. For details, see the Announcement on Resolutions of the 2022 Annual General Meeting of Shareholders (No.: 2023-026) released on the SSE website on May 12, 2023 (http://www.sse.com.cn) and |
relevant media. | ||||
1st Extraordinary General Meeting of Shareholders in 2023 | September 14, 2023 | Announcement No. 2023-056 on SSE website (www.sse.com.cn) | September 15, 2023 | The meeting approved the Company's 2023 Semi-Annual Profit Distribution Plan, the Proposal on Changing the Company's Registered Capital, Revising the Articles of Association, and Applying for Business Change Registration, the Proposal on Revising the External Investment and Operation Decision-Making System, and other proposals. For details, see the Announcement on Resolutions of the 1st Extraordinary General Meeting of Shareholders in 2023 (No.: 2023-056) released on the SSE website on September 15, 2023 (http://www.sse.com.cn) and relevant media. |
2nd Extraordinary General Meeting of Shareholders in 2023 | November 9, 2023 | Announcement No. 2023-076 on SSE website (www.sse.com.cn) | November 10, 2023 | The meeting approved the Proposal on Revising the Articles of Association and Applying for Business Change Registration. For details, see the Announcement on Resolutions of the 2nd Extraordinary General Meeting of Shareholders in 2023 (No.: 2023-076) released on the SSE website on November 10, 2023 (http://www.sse.com.cn) and relevant media. |
3rd Extraordinary General Meeting of Shareholders in 2023 | December 29, 2023 | Announcement No. 2023-092 on SSE website (www.sse.com.cn) | December 30, 2023 | The meeting approved the Proposal on revising the Rules of Procedures, the Proposal on revising the Working Policies for Independent Directors, the Proposal on Revising the Accounting Firm Selection System, and other proposals. For details, see the Announcement on Resolutions of the 3rd Extraordinary General Meeting of Shareholders in 2023 (No.: 2023-092) released on the SSE website on December 30, 2023 (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 | 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 | 60 | 7/30/2015 | 9/8/2024 | 97,670,741 | 136,739,037 | 39,068,296 | Shares converted from capital reserve | 331.59 | No |
FANG Yuyou | Director, General Manager | Male | 55 | 7/30/2015 | 9/8/2024 | 45,772,470 | 59,625,258 | 13,852,788 | Shares converted from capital reserve and shares reduced for personal capital need | 329.45 | No |
HOU Yameng | Director | Male | 36 | 9/9/2021 | 9/8/2024 | 0 | 0 | 0 | 82.63 | No | |
HOU Yameng | Deputy General Manager | Male | 36 | 9/15/2021 | 9/8/2024 | 0 | 0 | 0 | 0.00 | No | |
MA Dongming | Independent Director | Male | 54 | 5/13/2021 | 9/8/2024 | 0 | 0 | 0 | 15.00 | No |
GE Weijun | Independent Director | Male | 49 | 9/9/2021 | 9/8/2024 | 0 | 0 | 0 | 15.00 | No | |
HOU Luting | Supervisor | Female | 35 | 5/2/2018 | 9/8/2024 | 0 | 0 | 0 | 29.09 | No | |
FANG Qin | Supervisor | Female | 34 | 5/8/2018 | 9/8/2024 | 0 | 0 | 0 | 36.88 | No | |
HU Lina | Supervisor | Female | 36 | 9/9/2021 | 9/8/2024 | 0 | 0 | 0 | 19.25 | No | |
JIN Yanhua | Deputy General Manager | Male | 62 | 4/16/2018 | 9/14/2024 | 216,973 | 303,762 | 86,789 | Shares converted from capital reserve | 255.61 | No |
WANG Li | CFO | Female | 46 | 9/3/2018 | 9/14/2024 | 225,251 | 315,491 | 90,240 | Capital reserve conversion to share capital and increase in shareholding by personal centralized bidding trading | 252.57 | No |
WANG Li | Deputy General Manager, Secretary of the Board of Directors | Female | 46 | 9/15/2021 | 9/14/2024 | 0 | 0 | 0 | 0.00 | No | |
Total | / | / | / | / | / | 143,885,435 | 196,983,548 | 53,098,113 | / | 1,367.05 | / |
Note: Main reasons for the change in the total pre-tax remuneration received by Company inside directors HOU Juncheng, FANG Yuyou, HOU Yameng and seniormanagement employees JIN Yanhua and WANG Li during the Reporting Period are as follows:
(1) The total pre-tax remuneration of 2023 includes the annual overperformance incentives of 2022 and quarterly overperformance bonuses of 2023 (the Companyexceeded its sales target in 2022, resulting in the first overperformance incentive payout for that year; the Company exceeded its sales targets for the 6.18 and 11.11promotion campaigns in 2023).
(2) The Company paid cash bonuses to core management employees at the 20th anniversary in November 2023.
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 been serving as Executive Director of the Company. From August 2012, he been serving as Chairman of the Company and its predecessor. As of the disclosure date 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 Mijing Siyu (Hangzhou), Executive Director of Proya (Hainan), Executive Director of Proya (Zhejiang), Chairman of CBI (Cosmetics Industry (Huzhou) Investment Development Co., Ltd., Executive Director and General Manager of Huzhou Beauty Town Technology Incubation Park 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 disclosure date of the Reporting Period, he concurrently served as General Manager of Meiligu, General Manager of Yueqing Laiya, Inside Director of Korea Hanna, Director of Hong Kong Xinghuo, Executive Director and General Manager of Hangzhou Fangxiake Investment 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 been serving as Director and Deputy General Manager of the Company since September 2021. As of the disclosure date 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, Director of PROYA MALAYSIA, and Executive Partner of Sanya WaveDash Technology Partnership (Limited Partnership). |
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 been serving 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. 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 at Shanghai University of Finance and Economics. Since January 2022, he has been serving as a full-time teacher (professor) at the Law School of Fudan University. Since September 2021, he has been serving 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 the Shanghai Arbitration Commission, Arbitrator at the Shenzhen Court of International Arbitration, Executive Officer of the China Commercial Law Society, Vice President of the Commercial Research Branch of Shanghai Judicial Think Tank Institution, Vice President of the Commercial Law Research Association of the Shanghai Law Society, Vice President of the Cultural Law 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. (Non-Listed Company), Independent Director of |
Hangzhou EZVIZ Network Co., Ltd. and Supervisor of Shanghai Fudan Asset Management 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 been serving 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 been serving 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 been serving 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 been serving as Deputy General Manager of the Company. As of the disclosure date 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 and Manager 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 OOMS, Director of Japan OR, Executive Director and 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 Singuladerm (Hangzhou), Chairman and General Manager of Ningbo Tangyu, Manager of Proya (Zhejiang), Executive Director and General Manager of Hangzhou CORRECTORS, Executive Director and General Manager of Huzhou Keyan, Executive Director and General Manager of Hubei Laibo, Executive Director and General Manager of Ningbo JIngzhe Cosmetics Co., Ltd., and Executive Director and General Manager of Hangzhou Gloris 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 Nanjing Sunport Photovoltaics Co., Ltd. Since April 2023, she has been serving 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
2. Positions held in other entities
□ Applicable □ Not applicable
Name of employee | Name of another entity | Position held | 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 | December 2023 | |
Mijing Siyu (Hangzhou) | Executive Director and General Manager | February 2018 | ||
Huzhou Younimi | Executive Director and General Manager | November 2022 | January 2024 | |
Proya (Hainan) | Executive Director | January 2021 | ||
Proya (Zhejiang) | Executive Director | May 2022 | ||
Hangzhou Kunyi Industrial Co., Ltd. | Chairman and General Manager | April 2014 | February 2024 | |
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 | March 2024 | |
Yongxinou (Ningbo) International Trade 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 | ||
Hong Kong Xinghuo | Director | March 2019 |
Hangzhou Fangxiake Investment Co., Ltd. | Executive Director and General Manager | May 2018 | ||
Hangzhou Kunyi Industrial Co., Ltd. | Director | April 2014 | February 2024 | |
Hangzhou Tairentang Biotechnology Co., Ltd. | Director | December 2014 | ||
Zhejiang Poweihui Grapevine Technology Co., Ltd. | Supervisor | November 2021 | ||
Jiangsu Lenong Weimei Agricultural Technology Development Co., Ltd. | Director | May 2022 | ||
HOU Yameng | Hainan Mengya Enterprise Consulting Co., Ltd. | Executive Director and General Manager | November 2021 | |
Hangzhou TIMAGE | Executive Director and General Manager | March 2022 | ||
PROYA MALAYSIA | Director | November 2023 | ||
Sanya WaveDash Technology Partnership (Limited Partnership) | Executive Partner | March 2024 | ||
MA Dongming | Transwarp Technology(Shanghai)Co., Ltd. | Independent Director | December 2020 | |
Zhejiang Shuangyuan Science & Technology Development Co., Ltd. | Independent Director | December 2020 | December 2023 | |
Merit Interactive Co., Ltd. | Independent Director | May 2022 | ||
GE Weijun | Shanghai Huace Navigation Technology Ltd. | Independent Director | December 2020 | |
Changzhou ECTEK Automotive Electronics System Co., Ltd. (Non-Listed Company) | Independent Director | September 2021 | ||
Hangzhou EZVIZ Network Co., Ltd. | Independent Director | March 2022 | ||
Zheshang Development Group Co., Ltd. | Independent Director | May 2022 | December 2023 | |
Shanghai Fudan Asset Management Co., Ltd. | Supervisor | August 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 Beauty | Executive Director and | March 2019 |
General Manager | ||||
Shanghai Zhongwen | Executive Director | April 2019 | ||
Ningbo Proya | Executive Director and General Manager | December 2019 | ||
Ningbo Keshi | Director | September 2019 | ||
Ningbo TIMAGE | Director | July 2019 | ||
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 | ||
Luxiaotie | Manager | March 2023 | ||
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 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 | ||
Singuladerm (Hangzhou) | Executive Director and General Manager | October 2021 | ||
Ningbo Tangyu | Chairman and General Manager | October 2021 | ||
Proya (Zhejiang) | Manager | May 2022 | ||
Hangzhou CORRECTORS | Executive Director and General Manager | December 2022 | ||
Huzhou Keyan | Executive Director and General Manager | March 2023 | ||
Hubei Laibo | Executive Director and General Manager | July 2023 | ||
Ningbo Jingzhe Cosmetics Co., Ltd. | Executive Director and General Manager | January 2024 | ||
Hangzhou Gloris Trading Co., Ltd. | Executive Director and General Manager | March 2024 | ||
WANG Li | Zhejiang Wazam New Materials Co., Ltd. | Independent Director | April 2023 | |
Description of position held in other entities | None |
(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. |
Whether the director recuses himself/herself when the board of directors is discussing his/her compensation | Yes |
Specific recommendations made by the Remuneration and Appraisal Committee or a special meeting of independent directors regarding the remuneration of directors, supervisors, and senior management. | The remuneration of directors, supervisors, and senior management shall be determined based on industry benchmarks and regional standards, as well as the Company's specific circumstances. |
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 RMB13.67million from the Company. |
(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 |
10th meeting of the 3rd session of Board of Directors | March 8, 2023 | The meeting approved the Proposal on No Early Redemption of "Proya Convertible Bonds". For details, see the Announcement on No Early Redemption of "Proya Convertible Bonds" (No.: 2023-005) released on the SSE website on March 9, 2023 (http://www.sse.com.cn) and relevant media. |
11th meeting of the 3rd session of Board of Directors | April 19, 2023 | The meeting approved the Company's Annual Report 2022 and its Summary, the Company's Sustainable Development & Environmental, Social, and Governance (ESG) Report 2022, the Company's Plan for Profit Distribution and Capitalization of Capital Reserves for 2022, and other proposals. For details, see the Announcement on Resolutions of the 11th Meeting of the 3rd |
Session of Board of Directors (No.: 2023-010) released on the SSE website on April 21, 2023 (http://www.sse.com.cn) and relevant media. | ||
12th meeting of the 3rd session of Board of Directors | June 20, 2023 | The meeting approved the Proposal on Adjusting the Price and Quantity of Restricted Shares Repurchased under the 2022 Restricted Shares Incentive Plan, the Proposal on Repurchasing and De-registering Part of Restricted Incentive Shares, and the Proposal on the Adjustment of the Conversion Price of "Proya Convertible Bond". For details, see the Announcement on Resolutions of the 12th Meeting of the 3rd Session of Board of Directors (No.: 2023-034) released on the SSE website on June 21, 2023 (http://www.sse.com.cn) and relevant media. |
13th meeting of the 3rd session of Board of Directors | August 28, 2023 | The meeting approved the Company's 2023 Semi-annual Report and its Summary, the 2023 Special Report on the Semi-annual Storage and Actual Use of Raised Fund, the Company's 2023 Semi-Annual Profit Distribution Plan, and other proposals. For details, see the Announcement on Resolutions of the 13th Meeting of the 3rd Session of Board of Directors (No.: 2023-046) released on the SSE website on August 30, 2023 (http://www.sse.com.cn) and relevant media. |
14th meeting of the 3rd session of Board of Directors | September 8, 2023 | The meeting approved the Proposal on Satisfying the Conditions for Release from Sales Restrictions in the First Release Period under the 2022 Restricted Shares Incentive Plan. For details, see the Announcement on Satisfying the Conditions for Release from Sales Restrictions in the First Release Period under the 2022 Restricted Shares Incentive Plan (No.: 2023-055) released on the SSE website on September 12, 2023 (http://www.sse.com.cn) and relevant media. |
15th meeting of the 3rd session of Board of Directors | September 14, 2023 | The meeting approved the Proposal on Repurchasing and De-registering Part of Restricted Incentive Shares. For details, see the Announcement on Repurchasing and De-registering Part of Restricted Incentive Shares (No.: 2023-058) released on the SSE website on September 15, 2023 (http://www.sse.com.cn) and relevant media. |
16th meeting of the 3rd session of Board of Directors | October 23, 2023 | The meeting approved the Company's 2023 Q3 Report, the Proposal on Adjusting the Repurchase Price under the 2022 Restricted Shares Incentive Plan, and other proposals. For details, see the Announcement on Resolutions of the 16th Meeting of the 3rd Session of Board of Directors (No.: 2022-067) released on the SSE website on October 24, 2023 (http://www.sse.com.cn) and relevant media. |
17th meeting of the 3rd session of Board of Directors | December 13, 2023 | The meeting approved the Proposal on Revising the Articles of Association and Applying for Business Change Registration, the Proposal on Revising the Rules of Procedures, the Proposal on Revising the Working Policies for Independent Directors, and other proposals. For details, see the Announcement on Resolutions of the 17th Meeting of the 3rd Session of Board of Directors (No.: 2022-082) released on the SSE website on December 14, 2023 (http://www.sse.com.cn) and relevant media. |
VI.Performance of Duties by Directors(I) Directors attending meetings of the Board of Directors and general meetings ofshareholders
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 | 8 | 8 | 0 | 0 | 0 | No | 4 |
FANG Yuyou | No | 8 | 8 | 0 | 0 | 0 | No | 4 |
HOU Yameng | No | 8 | 8 | 1 | 0 | 0 | No | 4 |
MA Dongming | Yes | 8 | 8 | 4 | 0 | 0 | No | 4 |
GE Weijun | Yes | 8 | 8 | 5 | 0 | 0 | No | 4 |
Description of 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 | 8 |
Including: number of on-site meetings | 3 |
Number of meetings held by communication | 0 |
Number of meetings held both on site and by communication | 5 |
(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
(I) 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 |
(II) Six meetings held by the Audit Committee during the Reporting Period
Date | Description | Important comments and suggestions | Other performance of duties |
April 19, 2023 | The 7th meeting of the 3rd session of the Audit Committee was held to deliberate on and approve the Company's Annual Report 2022 and its Summary, the Company's 2023 Q1 Report, the Company's Annual Financial Final Report 2022, the Performance Report 2022 of the Audit Committee under the Company's Board of Directors, the Company's Internal Control Evaluation Report 2022, the 2022 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 2022, the Proposal on Payment of Audit Fees for 2022 and Further Employment of the Accounting Firm for 2023, the Proposal on the Accrual of Asset Impairment Provision for 2022, the Proposal on the Adjustment of the Conversion Price of "Proya Convertible Bond", the Proposal on the Partial Delay of Raising Funds for Investment Projects, and the Company's Annual Internal Audit Work Report 2022. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
June 20, 2023 | The 8th meeting of the 3rd session of the Audit Committee was held to deliberate on and approve the Proposal on Adjusting the Price and Quantity of Restricted Shares Repurchased under the 2022 Restricted Shares Incentive Plan, the Proposal on Repurchasing and De-registering Part of Restricted Incentive Shares, 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 |
August 28, 2023 | The 9th meeting of the 3rd session of the Audit Committee was held to deliberate on and approve the Company's 2023 Semi-annual Report and its Summary, the 2023 Special Report on the Semi-annual Storage and Actual Use of Raised Fund, the Company's 2023 Semi-Annual Profit Distribution Plan, the Proposal on the Adjustment of the Conversion Price of "Proya Convertible Bond", and the Proposal on Revising the Internal Audit Management Policies. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
September 14, 2023 | The 10th meeting of the 3rd session of the Audit Committee was held to deliberate on and approve the Proposal on Repurchasing and De-registering Part of Restricted Incentive Shares. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
October 23, 2023 | The 11th meeting of the 3rd session of the Audit Committee was held to deliberate on and approve the Company's 2023 Q3 Report, the Proposal on Adjusting the Repurchase Price under the 2022 Restricted Shares Incentive Plan, the Proposal on the Adjustment of the Conversion Price of "Proya Convertible Bond", and the Proposal on the Accrual of Asset Impairment Provision for the First Three Quarters of 2022. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
December 13, 2023 | The 12th meeting of the 3rd session of the Audit Committee was held to deliberate on and approve | Approve these proposals and | None |
the Proposal on Revising the Work Rules for the Audit Committee of the Board of Directors, the Proposal on Developing the Accounting Firm Selection System, and the Proposal on the Plan for Repurchasing the Company's Shares Through Centralized Bidding. | agree to submit them to the Board of Directors for deliberation |
(III) Two meetings held by the Remuneration and Appraisal Committee during the ReportingPeriod
Date | Description | Important comments and suggestions | Other performance of duties |
April 19, 2023 | The 4th meeting of the 3rd session of Remuneration and Appraisal Committee was held to deliberate on and approve the Proposal on Confirming the Remuneration of Directors for 2022 and the Proposal on Confirming the Remuneration of Senior Management for 2022. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
September 8, 2023 | The 5th meeting of the 3rd session of Remuneration and Appraisal Committee was held to deliberate on and approve the Proposal on Satisfying the Conditions for Release from Sales Restrictions in the First Release Period under the 2022 Restricted Shares Incentive Plan. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
(IV) One meeting held by the Strategy Committee during the Reporting Period
Date | Description | Important comments and suggestions | Other performance of duties |
April 19, 2023 | The 3rd meeting of the 3rd session of Strategy Committee was held to deliberate on and approve the Proposal on the Company's Strategic Business Plan 2023. | Approve these proposals and agree to submit them to the Board of Directors for deliberation | None |
(V) Dissenting matters
□ Applicable √ Not applicable
VIII.Description of 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 | 1,477 |
Number of current employees of major subsidiaries | 1,494 |
Total number of employees | 2,971 |
Number of retired employees to be supported by the parent company and major subsidiaries | 4 |
Specialty distribution |
Category | Number of employees |
Production workers | 310 |
Sales specialists | 1,996 |
Management | 343 |
R&D personnel | 322 |
Total | 2,971 |
Educational background | |
Education level | Number (persons) |
Bachelor and above | 1,584 |
Associate | 740 |
High school and below | 647 |
Total | 2,971 |
(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 | RMB76,520,604.14 |
(1) Huzhou Branch and Zhejiang Beauty signed the Service Project Contracting Agreement with 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 DafengXinxinyuan Enterprise Management Co., Ltd. to outsource services such as partial goods handling,loading and unloading, combined packaging, and mask folding to the latter, and pay consideration forthe agreed quantities.
(3) Huzhou Branch signed the Service Project Contracting Agreement with Zhejiang Hongfu SupplyChain 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 shareholders
To 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 institutionalarrangements 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's 2022 Annual General Meeting of Shareholders deliberatedon and approved the profit distribution plan of 2022: Based on the Company's total share capital of283,520,339 shares before the implementation of the plan, a cash dividend of RMB0.87 per share (taxinclusive) was distributed, with a total of RMB246,662,694.93 cash dividends distributed. The saiddividend distribution was completed on May 29, 2023.During the Reporting Period, the Company's 2023 Annual General Meeting of Shareholders deliberatedon and approved the 2023 semi-annual profit distribution plan: Based on the Company's total sharecapital of 396,823,346 shares before the implementation of the plan, a cash dividend of RMB0.38 pershare (tax inclusive) was distributed, with a total of RMB150,792,871.48 cash dividends distributed. Thesaid dividend distribution was completed on October 23, 2023.
(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 profitsavailable 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) | 9.10 |
Conversions per 10 shares (shares) | 0 |
Amount of cash dividends (tax included) | 359,037,186.69 |
Net profit attributable to ordinary shareholders of the Company in the annual consolidated statement of dividends | 1,193,868,141.81 |
Proportion in the net profit attributable to ordinary shareholders of the Company in the consolidated statement (%) | 30.07 |
Amount of shares repurchased in cash included in cash dividends | 39,076,754.20 |
Total dividend amount (tax included) | 398,113,940.89 |
Proportion of the dividend amount in the net profit attributable to ordinary shareholders of the Company in the consolidated statement (%) | 33.35 |
Note: 1. The Company held the 18th meeting of the 3rd session of Board of Directors on April 17, 2024,during which the Company deliberated on and approved the 2023 Annual Profit Distribution Plan. Basedon the total share capital (excluding the shares in the Company's special securities account for repurchase)as of the record date on which equity distribution is implemented, the Company proposes to distribute toall shareholders registered a cash dividend of RMB9.10 (tax inclusive) per 10 shares. Based on the totalshare capital of 396,757,184 shares on December 31, 2023, deducting 2,210,825 shares in the Company'sspecial securities account for repurchase, it is estimated that the cash dividend to be distributed will amountto RMB359,037,186.69 (tax inclusive) without converting the capital reserve into share capital or givingany bonus shares. In case of a change in the Company's total share capital due to the conversion ofconvertible bonds before the record date for equity distribution, the Company maintains the saiddistribution ratios and yet adjusts the total distribution amounts.
2. On October 23, 2023, the Company completed the implementation of the 2023 semi-annual profitdistribution plan. Based on the Company's total share capital of 396,823,346 shares before theimplementation of the plan, a cash dividend of RMB0.38 per share (tax inclusive) was distributed, with atotal of RMB150,792,871.48 cash dividends distributed.
3. According to the Guideline No. 7 for the Self-regulatory Rules of Companies Listed on the ShanghaiStock Exchange - Share Repurchase and other relevant regulations, for listed companies that repurchaseshares using cash as consideration through centralized bidding or tender offer, the amount of repurchasedshares in the current year shall be treated as the amount of cash dividends and counted in the calculation
of the cash dividend proportion for that year. In 2023, the Company repurchased shares amounting toRMB39,076,754.20 (excluding transaction expenses) through centralized bidding.To conclude, the amount of cash dividends for the year 2023 (including the proposed annual dividendfor 2023, the semi-annual cash dividend for 2023, and the amount of repurchased shares throughcentralized bidding for 2023) accounts for 45.98% of the net profit attributable to the shareholders of theCompany in the consolidated statement of 2023.
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 progressor changes in subsequent implementation
√ Applicable □ Not applicable
Matter | Reference |
Announcement on Adjusting the Price and Quantity of Restricted Shares Repurchased under the 2022 Restricted Shares Incentive Plan | No. 2023-036 announcement published on the SSE website, Shanghai Securities News, and Securities Times on June 21, 2023 |
Announcement on the Repurchase and Cancellation of Some Equity Incentive Restricted Shares | No. 2023-037 announcement published on the SSE website, Shanghai Securities News, and Securities Times on June 21, 2023 |
Announcement on the Implementation of the Repurchase and Cancellation of Some Restricted Shares under the 2022 Restricted Shares Incentive Plan | No. 2023-044 announcement published on the SSE website, Shanghai Securities News, and Securities Times on August 22, 2023 |
Announcement on the Repurchase and Cancellation of Some Equity Incentive Restricted Shares | No. 2023-058 announcement published on the SSE website, Shanghai Securities News, Securities Times, China Securities Journal, Securities Daily, Economic Information Daily, and China Daily on September 15, 2023 |
Announcement on the Satisfaction of Conditions for Release from Sales Restrictions in the First Release Period under the 2022 Restricted Shares Incentive Plan and Listing | No. 2023-061 announcement published on the SSE website, Shanghai Securities News, Securities Times, China Securities Journal, Securities Daily, Economic Information Daily, and China Daily on September 20, 2023 |
Announcement on Adjusting the Repurchase Price of the 2022 Restricted Shares Incentive Plan | No. 2023-069 announcement published on the SSE website, Shanghai Securities News, Securities Times, China Securities Journal, Securities Daily, Economic Information Daily, and China Daily on October 24, 2023 |
Announcement on the Implementation of the Repurchase and Cancellation of Some Restricted Shares under the 2022 Restricted Shares Incentive Plan | No. 2023-080 announcement published on the SSE website, Shanghai Securities News, Securities Times, China Securities Journal, Securities Daily, Economic Information Daily, and China Daily on December 11, 2023 |
(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 ReportingPeriod
□ 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 | 140,000 | 0 | 78.56 | 58,800 | 137,200 | 137,200 | 99.40 |
WANG Li | Deputy General Manager, Secretary of the Board of Directors, CFO | 180,000 | 0 | 78.56 | 75,600 | 176,400 | 176,400 | 99.40 |
Total | / | 320,000 | 0 | / | 134,400 | 313,600 | 313,600 | / |
Note: The Company implemented the 2022 Equity Distribution Plan on May 29, 2023, in which theCompany distributed to all shareholders a cash dividend of RMB8.70 (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 "lockedshares", "unlocked shares" and "number of restricted shares held at the end of the period" mentioned inthe table above include the shared converted through the capitalization of the capital reserve in 2022.
(IV) Evaluation mechanism for senior management as well as the establishment andimplementation 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 Management Policies, theExternal Guarantee Decision-making Management System, the Related Transaction Decision-MakingPolicies, the Raised Funds Management System, and the Information Disclosure Management System,and established 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 sustainable
development of the Company.
Description of 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-Making System and the Subsidiary Management System to implement centralized control oversubsidiaries. The Company HQ is responsible for its finance, asset operation and overall strategicplanning while all subsidiaries develop their strategic plans based on the Company's overall strategicplanning.
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 (T.J.S.[2024]No.[2241]),in which opinion the Company had maintained effective internal control over financialreporting in all material aspects as of December 31, 2023 pursuant to the Basic Rules for InternalControl and 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 ListedCompaniesNone
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) | 402.44 |
(I) Description of environmental issues of the Company and major subsidiaries included inthe list of primary pollutant discharge entities announced by the environmental authority
□ Applicable √ Not applicable
(II) Description of environmental issues of the Company not included in the list of primarypollutant 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 pollutantdischarge entities
√ Applicable □ Not applicable
The Company strictly complies with environmental laws and regulations, including the EnvironmentalProtection Law of the People’s Republic of China, the Law of the People's Republic of China on thePrevention and Control of Environmental Pollution by Solid Wastes, and the Regulations on the SafetyManagement of Hazardous Chemicals. We follow an environmental management policy to save energy,reduce consumption and emissions, and increase efficiency. The Company continuously strengthens itsenvironmental risk management to ensure that its production and operations comply with relevant laws,regulations, and standards. The Company has established management documentation covering allenvironmental impact factors. Additionally, the Company implements various management policies inits production and operations to ensure effective control of environment-related risks. During theReporting Period, the Company's resource use had no significant impact on the environment. In addition,the Company paid environmental protection taxes and fees in full, and no violations of environmentalprotection laws or regulations occurred. The Company passed the ISO14001:2015 EnvironmentalManagement System certification (valid until February 14, 2025).The Company's Huzhou Factory was designed and built in accordance with GMP standards. Allproduction workshops meet the environmental control standards for cosmetic clean areas. The intelligentwarehousing center has fully optimized the data and the robot-driven automation system, maximizingthe sustainability of healthy and ecological production and achieving our strategic goals of costreduction and efficiency enhancement.In September 2023, the Company's Huzhou Factory was awarded the title "Green and Low-CarbonFactory of Zhejiang 2023". During the Reporting Period, the Company's Huzhou factory was honored asa water-saving enterprise for the year 2023.In 2023, the Company submitted the Climate Change Questionnaire to the Carbon Disclosure Project(CDP) and achieved grade "B", reflecting its effective management in sustainability and climate action.The discharge of industrial wastewater, waste gas, and residues mainly occur from product production.Main administrative measures taken during the Reporting Period include:
(1) Wastewater:
① Constructed a wastewater treatment system to ensure that the treated wastewater is highly purifiedand recycled.
② Installed the Multi Vision COD online automatic monitoring instrument to monitor the COD contentin treated water 24 hours a day.
③ Installed a new sludge pressing device at the Huzhou factory to ensure class-A sewage discharge.
④ Excavated, replaced, repaired and retested some damaged rain and sewage pipes in the factory areain accordance with the result reported by the underground pipeline CCTV detection system (CCTVdetection).
(2) Waste gas:
① Added a waste gas treatment facility for the cream production line to reduce the emission of dust andorganic waste gas. After being used, the facility can collect 99% dust and remove 75% organic wastegas.
② Installed a highly-precise volatile organic chemical (VOC) gas collection device to effectivelyreduce unorganized gas emissions.
(3) Solid waste:
The Company properly disposed of solid waste generated in production and operations. The Companymanaged solid waste in a macroscopical manner and the factories can track the whole process data onsolid waste and prevent risks by requesting to report the amount of generated hazardous waste on theZhejiang Information System Platform for the Supervision of Solid Wastes every year, selectinghazardous waste treatment service providers through open bidding on the platform, and requesting forthe treatment of hazardous waste on the platform.During the Reporting Period, the sludge pressing device at the Huzhou factory reduced the sludgeproduction by 75%, resulting in an annual reduction of approximately 540 tons of sludge.
3. Reasons for non-disclosure of other environmental information
□ Applicable √ Not applicable
(III) The Company's performance in helping protect the environment, prevent pollution andfulfill environmental responsibilities
√ Applicable □ Not applicable
The Company's emissions of greenhouse gasesare generated throughout the product lifecycle, with a smallpercentage arising from office operations. Based on identified sources of greenhouse gas emissions, weset greenhouse gas emission reduction goals in the Proya Sustainable Development Strategic Plan andcollect greenhouse gas emission data every year to assess our performance in climate change management.In the sales process, all the Company's stores choose the best energy-saving solutions during renovationto reduce carbon emissions during operation. The Company's extensive sales are also engaged in carbonreduction initiatives. For example, a photovoltaic power generation facility has been installed at HainingIntime Department Store to partially replace traditional energy sources.During the Reporting Period, the Company reached a consensus with top ten strategic partners on theProya Sustainable Development Strategic Plan and released the "Together for A Zero Carbon Future,Beauty in Harmony" carbon reduction manifesto, committing to reduce carbon emissions by 2025.During the Reporting Period, the Company carried out energy-saving and technology upgrade in anorderly manner, resulting in a reduction of 177.21 tons of carbon dioxide emissions.Additionally, theCompany's initiatives such as purchasing green electricity and implementing photovoltaic powergeneration led to a reduction of 4,744.30 tons of carbon dioxide emissions, and the Company's reductionof packaging and use of replacement packaging led to a further reduction of 650.42 tons of carbon dioxideemissions.The Company actively communicates and collaborates with original equipment manufacturers (OEMs)and original design manufacturers (ODMs) to seek carbon reduction opportunities in production. Duringthe Reporting Period, an OEM factory reduced its electricity consumption by using automated products,saving approximately 28 mWh of electricity per year.The Company promotes carbon reduction policies to its raw material suppliers and plans for theestablishment of a system for collecting and evaluating suppliers’ carbon emission data. The Companyprioritizes suppliers with lower carbon emissions. During the Reporting Period, the range of carbon datacollection covered 156 suppliers, accounting for 90% (cooperation amount) of raw material suppliers.Additionally, during the Reporting Period, the Company's e-commerce delivery boxes (May 1, 2023 -December 31, 2023) had achieved carbon neutrality by suppliers through carbon offset, reducing thecarbon footprint of products in the distribution and transportation processes.
(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: tons) | 5,571.93 |
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. Implement energy-saving and technology upgrades: Carried out clean production as well as energy-saving and technology upgrades in an orderly manner. Reduced carbon dioxide emissions by 177.21 tons. 2. Use clean energy: (1) Used 6,121.42 megawatt-hours of green electricity. (2) Installed a photovoltaic system on the roof of the new warehouse, with an installation area of 38,197 square meters and a capacity of 2,000 kilowatts. The annual electricity output reached around 2,000 mWh. During the Reporting Period, the photovoltaic system generated 2,197.53 mWh of electricity. (3) All forklifts at the factory were replaced with new energy forklifts. The Company reduced carbon dioxide emissions by 4,744.30 tons. 3. Carbon reduction in packaging: (1) PROYA Advanced Firming Nourishing Light Cream 3.0 simplified packaging design compared with PROYA Advanced Firming Nourishing Light Cream 2.0, reducing |
the use of plastic by about 100.49 tons during the ReportingPeriod;
(2) PROYA Double Effect Brightening Essence was
changed to a replacement design, reducing the use ofplastic by about 107.97 tons during the Reporting Period;The Company reduced carbon dioxide emissions by 650.42tons.
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 Sustainability & Environmental, Social, and Governance (ESG) Report 2023disclosed 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) | 866.12 | Include funds and materials donated by the Company to various community philanthropy and charitable activities |
Including: fund (RMB'0,000) | 850.14 | 1. The Company donated RMB300,000 to Shanghai Adream Foundation for charitable purposes. 2. The Company donated RNB100,000 to the Yunhe County Charity Association for the rural revitalization project in Yunhe, Huzhou. 3. The Company donated RMB494,593.80 to the Beijing New Sunshine Charity Foundation for the Glimmering Project and RMB404,525 for the Echo Project. 4. The Company donated RMB800,000 to the Wuxing Charity Federation. 5. The Company donated RMB6,402,271.85 to the Zhejiang Proya Public Welfare Foundation. The fund will be used for promoting educational development, facilitating social innovation, providing emergency relief assistance, and supporting employee volunteerism. |
Cash value of materials (RMB'0,000) | 15.98 | The Company donated personal care items (such as coral fleece towels and skincare products) to the Zhejiang Proya Public Welfare Foundation. |
Number of beneficiaries (person) | 92,319 |
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) | 69.43 | 1. The Company donated RNB100,000 to the Yunhe County Charity Association for the rural revitalization project in Yunhe, Huzhou. 2. The Company donated RMB402,271.85 to the Zhejiang Proya Public Welfare Foundation for the Proya Hope Primary School project. 3. The Company purchased agricultural products worth RMB192,000. |
Including: fund (RMB'0,000) | 69.43 | |
Cash value of materials (RMB'0,000) | 0 | |
Number of beneficiaries (person) | 38 | The number of beneficiaries cannot be calculated for the donation of agricultural products to the Yunhe County Charity Association. |
Form of support (such as industrial support, employment support, education support, etc) | Rural revitalization, 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 partiesduring the Reporting Period or continuing to the Reporting Period
√ Applicable □ Not applicable
Background | Promise Type | Promisor | Promise Description | Date | Any deadline for performance | Duration | 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 | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
IPO, or the closing price as of the end of the 6-month period after the Company's IPO is lower than the offering price, the lock-up period for 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 | April 16, 2018 | No | From April 16, 2018 onwards | Yes | Not applicable | Not applicable |
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 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 or their partnership violate the said share lock-up commitments, the lock-up period for their or 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, | September 3, 2018 | No | From September 3, 2018 onwards | Yes | Not applicable | Not applicable |
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 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. | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 media | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 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. | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
Other | The Company's directors | When the preconditions for enabling the share price stabilization plan are met, if | November 15, 2017 | No | From November | Yes | Not applicable | Not applicable |
(excluding independent directors) and senior management | 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 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. | 15, 2017 onwards | ||||||
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 | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 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 | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 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 | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 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 | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 Company's directors and senior management, promise that: (1) They will not offer | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 Issuer's future profits. | ||||||||
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 | November 15, 2017 | No | From November 15, 2017 onwards | Yes | Not applicable | Not applicable |
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 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 | April 21, 2021 | No | From April 21, 2021 onwards | Yes | Not applicable | Not applicable |
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 duty-related consumption; 3. They will not use the Company's | April 21, 2021 | No | From April 21, 2021 onwards | Yes | Not applicable | Not applicable |
fulfill the above commitments,they shall be subject to thepunishment or relevantregulatory measures imposed onthem by the securities regulatoryauthorities such as the CSRCand the SSE in accordance withthe relevant regulations andrules.
(II) Statement of whether the Company's assets or projects fulfilled the original profit forecastand its reason where the Company had profit forecasts on assets or projects and the ReportingPeriod fell within the term of profit forecastsWhether the original profit forecast is reached and the description of reasons
□ Fulfilled □ Unfulfilled √ Not applicable
(III) Execution of the performance undertakings and their impact on the goodwill impairmenttesting
□ 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.Description of the Company's Board of Directors on the "Non-standard Audit Report" fromthe 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
(II) Analysis and explanation from the Company on the reasons and impact of the correctionon significant accounting errors
□ Applicable √ Not applicable
(III) Communication with the previous accounting firm
□ Applicable √ Not applicable
(IV) Approval process and 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 | 13 |
Names of CPAs from the domestic accounting firm | YIN Zhibin, WU Shaofang |
Continual term of audit service provided by the CPAs from the domestic accounting firm | YIN Zhibin: 4 years of continual term of audit service WU Shaofang: 1 year 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 |
Description of appointment and dismissal of the accounting firm
□ Applicable √ Not applicable
Description of the change of accounting firm during the Auditing Period
□ Applicable √ Not applicable
Description of the decrease in audit fees by more than 20% (inclusive) compared to the previous year.
□ 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 nomaterial litigations 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.Description of the Integrity of the Company and Its Controlling Shareholders and Actual
Controllers During the Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company and its controlling shareholders and actual controllers werein 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 changein the follow-up implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changesin the follow-up implementation
□ Applicable √ Not applicable
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 changein the follow-up implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changesin 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 changein the follow-up implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changesin the follow-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 changein the follow-up implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changesin 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, holdingfinancial companies and related parties
□ Applicable √ Not applicable
(VI) Other
1. □ 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. Progress on the Use of Raised Funds
√ Applicable □ Not applicable
(I) Overall use of raised funds
√ Applicable □ Not applicable
Unit: RMB '0,000
Source of raised funds | Time of paying in | Amount of raised funds | Including: Amount of over-raised funds | Net amount of raised funds after deduction of issuance expenses | Amount of fund raising commitment | Adjusted amount of fund raising commitment (1) | Amount of raised fund as of the end of the Reporting Period (2) | Progress of fund raising as of the end of the Reporting Period (%) (3) = (2) / (1) | Amount invested in the current year (4) | Percentage of amount invested in the current year (%) (5) = (4) / (1) | Amount of fund raising whose purpose is changed |
Issuance of convertible bonds | December 14, 2021 | 75,171.30 | 74,450.87 | 75,171.30 | 74,450.87 | 58,165.74 | 78.13 | 25,828.34 | 34.69 | 0.00 |
(II) Details of fund raising projects
√ Applicable □ Not applicable
Unit: RMB '0,000
Item | Project | Whether investment subject is changed | Source of raised funds | Time of paying in | Whether over-raised funds are used | Amount of fund raising commitment in the project | Adjusted amount of fund raising (1) | Amount invested in the current year | Amount of raised fund as of the end of the Reporting Period (2) | Progress of fund raising as of the end of the Reporting Period (%) (3) = (2) / (1) | Date when the project becomes available | Settled or not | Whether investment progress in line with the planned schedule | Reason for failure to keep up with the schedule | Benefit achieved in the current year | Benefit or research achievement that has been realized in this project | Whether there is a significant change in the feasibility of the project. If so, please provide specific details | Amount of balance |
Huzhou Production Base Expansion Project (Phase I) | Construction | No | Issuance of convertible bonds | December 14, 2021 | No | 33,850.00 | 33,850.00 | 6,634.05 | 23,435.69 | 69.23 | December 2024 | No | Yes | Not applicable | 22,255.40 | Not applicable | No | 11,190.83 |
Longwu R&D Center Construction Project | Research and development | No | Issuance of convertible bonds | December 14, 2021 | No | 19,450.00 | 19,450.00 | 7,370.18 | 19,053.45 | 97.96 | June 2024 | No | Yes | Not applicable | Not applicable | No | 646.59 | |
Information System Upgrade Project | Operation management | No | Issuance of convertible bonds | December 14, 2021 | No | 9,050.00 | 8,801.27 | 2,265.11 | 3,143.45 | 35.72 | December 2024 | No | Yes | Not applicable | Not applicable | No | 5,929.55 | |
Additional working capital | Supplementing working capital and repaying debts | No | Issuance of convertible bonds | December 14, 2021 | No | 12,821.30 | 12,349.60 | 9,559.00 | 12,533.15 | 101.49 | Not applicable | Not applicable | No | 34.13 |
[Note] The adjusted amount of fund raising is RMB744.51million, while the amount of fund raising commitment is RMB751.71million yuan, which differs byRMB7.20million. Due to underwriting and sponsorship fees, lawyer fees, accountant fees, credit rating fees, and issuance handling charges incurred in the issuanceof raised funds, the actual net amount of raised funds is RMB744.51million. For the difference, the Company adjusted the amount of fund raising for theInformation System Upgrade Project and the additional working capital.As of the end of the period, the amount invested in additional working capital exceeded the adjusted amount of fund raising, and the progress at the end of the periodexceeded 100.00%. This was due to the use of interest income generated from idle funds in the fundraising account for additional working capital.
(III) Change or termination of fund raising during the Reporting Period
□ Applicable √ Not applicable
(IV) Other uses of funds raised during the Reporting Period
1. Advance investment and replacement in the project invested by the raised fund
√ Applicable □ Not applicable
During the Reporting Period, the Company did not have any advance investment or replacement in the project invested by the raised fund.
2. Use of idle raised fund to temporarily refill working capital
□ Applicable √ Not applicable
3. Management of idled raised fund through investment
√ Applicable □ Not applicable
Unit: RMB '0,000 Currency: RMB
Review data by the board meeting | Effective quota of raised fund approved for cash management | Start date | End date | Balance of cash management as of the end of the Reporting Period | Whether the peak balance exceeds the authorized quota during the Reporting Period |
April 19, 2023 | 20,000 | April 19, 2023 | April 18, 2024 | 0 | No |
Other explanationsNone
4. Use of over-raised fund to permanent refill working capital or repay bank loans
□ Applicable √ Not applicable
5. Other
□ Applicable √ Not applicable
XV.Description of 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 | 210 | 0.7407 | 84 | -98.2940 | -14.2940 | 195.7060 | 0.4933 | ||
1. Shares held by the state | |||||||||
2. Shares held by state-owned legal persons | |||||||||
3. Shares held by other domestic funds | 210 | 0.7407 | 84 | -98.2940 | -14.2940 | 195.7060 | 0.4933 | ||
Including: Shares held by domestic non-state-owned legal persons | |||||||||
Shares held by domestic natural persons | 210 | 0.7407 | 84 | -98.2940 | -14.2940 | 195.7060 | 0.4933 | ||
4. Shares held by foreign funds | |||||||||
Wherein: Shares held by foreign legal persons | |||||||||
Shares held by foreign natural persons |
II. Unrestricted outstanding shares | 28,141.9469 | 99.2593 | 11,256.8136 | 81.2519 | 11,338.0655 | 39,480.0124 | 99.5067 | ||
1. RMB Ordinary Shares | 28,141.9469 | 99.2593 | 11,256.8136 | 81.2519 | 11,338.0655 | 39,480.0124 | 99.5067 | ||
2. Foreign-funded shares listed domestically | |||||||||
3. Foreign-funded shares listed overseas | |||||||||
4. Others | |||||||||
III. Total shares | 28,351.9469 | 100.00 | 11,340.8136 | -17.0421 | 11,323.7715 | 39,675.7184 | 100.00 |
2. Description of changes in shares
√ Applicable □ Not applicable
On May 11, 2023, the 2022 annual General Meeting of Shareholders was held to deliberate on and approvethe Company's Plan for Profit Distribution and Capitalization of Capital Reserves for 2022, in which theCompany distributed to all shareholders a cash dividend of RMB8.70 (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, totaling113,408,136 shares converted. Wherein, the number of restricted circulating shares is increased by840,000, from 2,100,000 to 2,940,000. The number of unrestricted circulating shares is increased by112,568,136, from 281,419,469 to 393,987,605.On June 20, 2023, the 12th meeting of the 3rd session of Board of Directors and the 11th meeting of the3rd session of Board of Supervisors were held to deliberate on and approve the Proposal on Repurchasingand De-registering Part of Restricted Incentive Shares. Considering that the 6 incentive recipients whowere eligible for the 2022 Restricted Shares Incentive Plan had left the Company and no longer meet theincentive conditions, it was agreed to repurchase and cancel 78,008 restricted shares that have been grantedbut not yet released from restriction. Additionally, as 3 incentive recipients did not meet the performancecriteria for 2022, they do not qualify for the full release of restricted shares. Therefore, it was agreed torepurchase and cancel 27,342 restricted shares that have been granted but not yet released from restriction.The total number of restricted shares repurchased and canceled in this transaction amounted to 105,350shares. On August 24, 2023, the Company completed the repurchase and cancellation of 105,350 incentiverestricted shares under the 2022 Restricted Shares Incentive Plan. As a result, the number of restrictedcirculating shares decreased from 2,940,000 to 2,834,650.On September 8, 2023, the 14th meeting of the 3rd session of Board of Directors and the 13th meeting ofthe 3rd session of Board of Supervisors were held to deliberate on and approve the Proposal on Satisfyingthe Conditions for Release from Sales Restrictions in the First Release Period under the 2022 RestrictedShares Incentive Plan. It was agreed that the conditions for release from sales restrictions in the firstrelease period under the 2022 Restricted Shares Incentive Plan were satisfied and the sales restrictions on89 eligible incentive recipients were lifted, amounting to 811,398 restricted shares. The circulation dateof released shares is September 26, 2023. The number of the unrestricted circulating shares of theCompany increased from 393,987,605 before the listing to 394,799,003, while the number of the restrictedcirculating shares decreased from 2,834,650 before the listing to 2,023,252.On September 14, 2023, the 15th meeting of the 3rd session of Board of Directors and the 14th meetingof the 3rd session of Board of Supervisors were held to deliberate on and approve the Proposal onRepurchasing and De-registering Part of Restricted Incentive Shares. Considering that the 8 eligibleincentive recipients had left the Company and no longer meet the incentive conditions, it was agreed to
repurchase and cancel 66,192 restricted shares that have been granted but not yet released from restriction.On December 13, 2023, the Company completed the repurchase and cancellation of 66,192 incentiverestricted shares under the 2022 Restricted Shares Incentive Plan. As a result, the number of restrictedcirculating shares decreased from 2,023,252 to 1,957,060.With the Approval of the CSRC, namely, the Reply on Approving Proya Cosmetics Co., Ltd.'s PublicIssuance of Convertible Corporate Bonds (CSRC Approval [2021] No. 3408), on December 8, 2021, theCompany publicly issued 7,517,130 convertible bonds with a face value of RMB100 per share and a totalface value of RMB751,713,000, with a term of 6 years. With the approval of the SSE's Self-RegulatorySupervision Decision Letter [2021] No. 503, the convertible corporate bonds issued by the Companyamounting to RMB751,713,000 would be listed and traded on the Shanghai Stock Exchange from January4, 2022, with the short name of "Proya Convertible Bond" and the bond code of "113634". ProyaConvertible Bonds began to be converted into shares on June 14, 2022. During the Reporting Period,RMB148,000 of Proya Convertible Bond had been converted to A-share stocks of the Company,generating 1,121 shares. The number of the unrestricted circulating shares of the Company increased by1,121.
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 2022 plan for capitalization of capital reserves: calculated based on the dilutedtotal share 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 | 140,000 | 58,800 | 56,000 | 137,200 | 2022 Restricted Shares Incentive Plan | September 26, 2023 |
WANG Li | 180,000 | 75,600 | 72,000 | 176,400 | 2022 Restricted Shares Incentive Plan | September 26, 2023 |
99 persons granted for the first time under 2022 Restricted Shares Incentive Plan | 1,780,000 | 676,998 | 540,458 | 1,643,460 | 2022 Restricted Shares Incentive Plan | September 26, 2023 |
Total | 2,100,000 | 811,398 | 668,458 | 1,957,060 | / | / |
II.Issuance and Listing of Securities
(I) Issuance of securities as of the Reporting Period
□ Applicable √ Not applicable
Description of the issuance of securities in the Reporting Period (provide separate description of bondswith different interest rates in their duration):
□ Applicable √ Not applicable
(II) Changes in the total number of shares and shareholder structure of the Company andchanges in 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 Periodwas 283,519,469 and 396,757,184 respectively.The Company's total assets and total liabilities at the beginning 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%.The Company's total assets and total liabilities at the end of the Reporting Period amounted toRMB7,323,078,222.45 and RMB2,922,766,991.44 respectively, with the asset-liability ratio of 39.91%.
(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 | 19,133 |
Total number of shareholders of ordinary shares at the end of last month prior to the disclosure date of the Annual Report | 23,713 |
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 ofcirculating shares (or unrestricted shareholders) as of the end of the Reporting Period
Unit: Share
Shareholdings of the top ten shareholders (excluding securities lending and refinancing) | |||||||
Name of shareholder (full name) | Change during the Reporting Period | Number of shares held at the end of the period | Percentage (%) | Number of restricted shares held | Pledged, marked or frozen | Nature of shareholder | |
Share status | Number | ||||||
HOU Juncheng | 39,068,296 | 136,739,037 | 34.46 | 0 | None | Domestic natural person | |
Hong Kong Securities Clearing Company Limited | 14,836,428 | 79,309,897 | 19.99 | 0 | None | Other |
FANG Yuyou | 13,852,788 | 59,625,258 | 15.03 | 0 | Frozen | 17,041,269 | Domestic natural person | |
Aberdeen Standard Investment Management (Asia) Co., Ltd. - Aberdeen Fund - China A-share Sustainable Equity Fund | 2,514,120 | 5,066,413 | 1.28 | 0 | None | Other | ||
China Construction Bank Co., Ltd. - CUAM Consumer Industry Hybrid Securities Investment Fund | 1,250,045 | 4,350,058 | 1.10 | 0 | None | Other | ||
Industrial and Commercial Bank of China Limited - Jingshun Changcheng Emerging Growth Hybrid Securities Investment Fund | 952,000 | 3,332,000 | 0.84 | 0 | None | Other | ||
TEMASEK FULLERTON ALPHA PTE LTD | 2,855,734 | 3,014,734 | 0.76 | 0 | None | Other | ||
National Social Security Fund 109 Portfolio | 3,010,974 | 3,010,974 | 0.76 | 0 | None | Other | ||
GIC PRIVATE LIMITED | 2,890,269 | 2,890,269 | 0.73 | 0 | None | Other | ||
Abu Dhabi Investment Authority (ADIA) | 1,530,571 | 2,376,168 | 0.60 | 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 | 136,739,037 | RMB ordinary shares | 136,739,037 | |||||
Hong Kong Securities Clearing Company Limited | 79,309,897 | RMB ordinary shares | 79,309,897 | |||||
FANG Yuyou | 59,625,258 | RMB ordinary shares | 59,625,258 | |||||
Aberdeen Standard Investment Management (Asia) Co., Ltd. - Aberdeen Fund - China A-share Sustainable Equity Fund | 5,066,413 | RMB ordinary shares | 5,066,413 |
China Construction Bank Co., Ltd. - CUAM Consumer Industry Hybrid Securities Investment Fund | 4,350,058 | RMB ordinary shares | 4,350,058 |
Industrial and Commercial Bank of China Limited - Jingshun Changcheng Emerging Growth Hybrid Securities Investment Fund | 3,332,000 | RMB ordinary shares | 3,332,000 |
TEMASEK FULLERTON ALPHA PTE LTD | 3,014,734 | RMB ordinary shares | 3,014,734 |
National Social Security Fund 109 Portfolio | 3,010,974 | RMB ordinary shares | 3,010,974 |
GIC PRIVATE LIMITED | 2,890,269 | RMB ordinary shares | 2,890,269 |
Abu Dhabi Investment Authority (ADIA) | 2,376,168 | RMB ordinary shares | 2,376,168 |
Description of the special account for repurchase among the top ten shareholders | N/A. The Company opened a special securities account for the repurchase of shares for Proya Cosmetics Co., Ltd. during the Reporting Period. Securities account No.: B882678426. | ||
Description of the above-mentioned shareholders' entrusting voting rights, entrusted voting rights and abstention from voting rights | None | ||
Description of 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. | ||
Description of the shareholders of preferred shares with voting rights restored and their shareholdings | None |
Securities lending and refinancing involved by top ten shareholders
√ Applicable □ Not applicable
Unit: Share
Securities lending and refinancing involved by top ten shareholders | ||||||||
Name of shareholder (full name) | Shareholdings in regular and credit accounts at the beginning of the period | Shares lent but not returned at the beginning of the period | Shareholdings in the regular and credit accounts at the end of the period | Shares lent but not returned at the end of the period | ||||
Total number | Percentage (%) | Total number | Percentage (%) | Total number | Percentage (%) | Total number | Percentage (%) | |
National Social Security Fund 109 Portfolio | 0 | 0.00 | 0 | 0.00 | 3,010,974 | 0.76 | 88,800 | 0.02 |
Note: Shareholdings in the regular and credit accounts of the National Social Security Fund 109Portfolio at the beginning of the period are not included in the top 200 shareholders.
Changes in the top ten shareholders over the previous period
√ Applicable □ Not applicable
Unit: Share
Changes in the top ten shareholders over the end of the previous period | |||||
Name of shareholder (full name) | Addition/exit in the Reporting Period | Number of shares lent but not returned at the end of the period | Number of shares held in the regular and credit accounts and shares lent but not returned at the end of the period | ||
Total number | Percentage (%) | Total number | Percentage (%) | ||
TEMASEK FULLERTON ALPHA PTE LTD | Addition | 0 | 0.00 | 3,014,734 | 0.76 |
National Social Security Fund 109 Portfolio | Addition | 88,800 | 0.02 | 3,010,974 | 0.76 |
GIC PRIVATE LIMITED | Addition | 0 | 0.00 | 2,890,269 | 0.73 |
Abu Dhabi Investment Authority (ADIA) | Addition | 0 | 0.00 | 2,376,168 | 0.60 |
China Construction Bank Co., Ltd. - Yinhua Fuyu Theme Hybrid Securities Investment Fund | Exit | 0 | 0.00 | - | - |
CAO Liangguo | Exit | 0 | 0.00 | 1,528,702 | 0.39 |
Industrial and Commercial Bank of China Limited - CUAM Consumption Upgrade Hybrid Securities Investment Fund | Exit | 0 | 0.00 | 1,350,006 | 0.34 |
J. P. Morgan Securities PLC - Self-owned Capital | Exit | 0 | 0.00 | 1,142,425 | 0.29 |
Note: Shareholdings in the regular and credit accounts of China Construction Bank Co., Ltd. - YinhuaFuyu Theme Hybrid Securities Investment Fund at the end of the period are not included in the top 200shareholders.
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 | 1,957,060 | See the note 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 2022Restricted Shares Incentive Plan. The restricted period was 12 months, 24 months, and 36 months fromthe completion of their registration with CSDC Shanghai Branch (September 6, 2022).
(III) Strategic investors or general legal persons becoming the top ten shareholders because ofplacing of new shares
□ Applicable √ Not applicable
IV. Controlling Shareholders and Actual Controllers
(I) Controlling shareholders
1. 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 description of the situation that the Company has no controlling shareholders
□ Applicable √ Not applicable
4. Description of changes in controlling shareholders during the Reporting Period
□ Applicable √ Not applicable
5. Diagram of the ownership and controlling relationship between the Company and itscontrolling shareholders
√ Applicable □ Not applicable
(II) Actual controllers
1. 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 description of the situation that the Company has no actual controllers
□ Applicable √ Not applicable
4. Description of 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 itsactual controllers
√ Applicable □ Not applicable
6. Control of the Company by actual controllers by way of trust or other means of assetmanagement
□ 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 thelargest 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. Description of Limitation on Reduction of Shareholding
□ Applicable √ Not applicable
VIII. Specific Implementation of Share Repurchase During the Reporting Period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Name of the share repurchase plan | Plan for Repurchase of Company Shares Through Centralized Bidding |
Disclosure time of the share repurchase plan | December 14, 2023 |
Number of shares to be repurchased and its percentage in total share capital (%) | Based on the minimum amount of RMB100 million and the maximum amount of RMB 200 million for the repurchase, and the maximum repurchase price of RMB130 per share, the estimated number of repurchased shares ranges from approximately 769,200 to 1,538,400, accounting for approximately 0.19% to 0.39% of the Company's total share capital. |
Amount of proposed repurchase | Not less than RMB100 million (inclusive), and not more than RMB200 million (inclusive) |
Period of proposed repurchase | Within 12 months from the date when the share repurchase plan is deliberated on and approved by the 17th meeting of the 3rd session of Board of Directors |
Purpose of repurchase | Equity incentives or employee stock ownership plans |
Number of shares repurchased (share) | 395,980 |
Percentage of repurchased shares in the underlying stocks involved in the equity incentive plan, if applicable | Not applicable |
Progress of reducing repurchased shares held by the Company by means of centralized bidding | Not applicable |
Note: 1. In the above table, the "total share capital" in the "number of shares to be repurchased and itspercentage in total share capital" refers to the total share capital of the Company as of December 12,2023, which is 396,823,366 shares.
2. As of January 31, 2024, the Company has completed the share repurchase plan, repurchasing a total of2,210,825 shares of the Company. For details, see the Announcement on the Implementation Results of
Share Repurchase and Changes in Shareholding (No.: 2024-004) released on the SSE website onFebruary 1, 2024 (www.sse.com.cn).
Section VIII Information on Preference Shares
□ Applicable √ Not applicable
Section IX Information on Bonds
I.Enterprise Bonds, Corporate Bonds and Non-financial Corporate Debt Financing Instruments
□ Applicable √ Not applicable
II.Information on Convertible Corporate Bonds
√ Applicable □ Not applicable
(I) Information on 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 RMB195.98/share. The latest conversion price isRMB98.25/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 SharesIncentive Plan was completed, the conversion price of the Proya Convertible Bond has been adjusted toRMB138.92/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).
3. Since the 2022 Equity Distribution Plan was implemented by the Company, the conversion price of theProya Convertible Bond was adjusted to RMB98.61/share on May 29, 2023. For details, see theAnnouncement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price due to 2022 EquityDistribution Plan (No.: 2023-030) released by the Company on the SSE website on May 23, 2023(www.sse.com.cn).
4. Since the Company completed the repurchase and cancellation of 105,350 incentive restricted sharesunder the 2022 Restricted Shares Incentive Plan, the conversion price of the Proya Convertible Bond wasadjusted to RMB98.62/share on August 29, 2023. For details, see the Announcement of Proya CosmeticsCo., Ltd. on Completion of Repurchase and Cancellation of Some Incentive Restricted Shares andAdjustment of Conversion Price (No.: 2023-045) released by the Company on the SSE website on August28, 2023 (www.sse.com.cn).
5. Since the 2023 Semi-Annual Equity Distribution Plan was implemented by the Company, theconversion price of the Proya Convertible Bond was adjusted to RMB98.24/share on October 23, 2023.For details, see the Announcement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price dueto 2023 Semi-Annual Equity Distribution Plan (No.: 2023-065) released by the Company on the SSEwebsite on October 17, 2023 (www.sse.com.cn).Since the Company completed the repurchase and cancellation of 66,192 incentive restricted shares underthe 2022 Restricted Shares Incentive Plan, the conversion price of the Proya Convertible Bond wasadjusted to RMB98.25/share on December 18, 2023. For details, see the Announcement of Proya
Cosmetics Co., Ltd. on Adjustment of Conversion Price and Trading Suspension for Conversion (No.:
2023-086) released by the Company on the SSE website on December 15, 2023 (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 Reporting Period | 8,553 | |
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 - China CITIC Bank - Dajia Assets Houkun No.40 Collective Asset Management Product | 39,960,000 | 5.32 |
Agricultural Bank of China Co., Ltd. - South Xiyuan Convertible Bond Securities Investment Fund | 26,790,000 | 3.57 |
Industrial and Commercial Bank of China Limited - Southern Profitable Return Bond Securities Investment Fund | 24,664,000 | 3.29 |
Bank of China Co., Ltd. - South Changyuan Convertible Bond Securities Investment Fund | 23,567,000 | 3.14 |
Dajia Assets - Minsheng Bank - Dajia Assets - Selected Conservative Portfolio No.3 (Issue 5) Collective Asset Management Product | 23,173,000 | 3.09 |
China Southern Asset Management Ningkang Convertible Bonds Fixed-benefit Pension Products - Bank of China Co., Ltd. | 21,311,000 | 2.84 |
Industrial and Commercial Bank of China Limited - GF Convertible Bond Issuing Securities Investment Fund | 20,000,000 | 2.66 |
Dajia Assets - Postal Savings Bank of China - Dajia Assets - Selected Conservative Portfolio No.6 (Issue 2) Collective Asset Management Product | 17,462,000 | 2.33 |
National Social Security Fund 201 Portfolio | 17,298,000 | 2.30 |
Taikang Pension Insurance Co., Ltd. - Self-Owned Funds | 16,246,000 | 2.16 |
(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 | 750,937,000 | 148,000 | 750,789,000 |
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) | 148,000 |
Number of shares converted from bonds in the Reporting Period (share) | 1,121 |
Accumulated number of shares converted from bonds (share) | 6,638 |
Proportion of the accumulated number of converted shares in the total number of issued shares of the Company before conversion (%) | 0.0024 |
Amount of bonds not converted into shares (RMB) | 750,789,000 |
Proportion of unconverted convertible bonds in the total amount of convertible bonds issued (%) | 99.8771 |
(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 | Description of adjustments to the conversion price Note |
May 30, 2022 | RMB139.37/share | May 24, 2022 | SSE website (http://www.sse.com.cn), 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 RMB139.37/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 | RMB138.92/share | September 8, 2022 | SSE website (http://www.sse.com.cn), Shanghai Securities News, Securities Times | Since the registration of restricted shares involved in the grant under the 2022 Restricted Shares Incentive Plan was completed, the conversion price of the Proya Convertible Bond has been adjusted to RMB138.92/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). | ||||
May 29, 2023 | RMB98.61/share | May 23, 2023 | SSE website (http://www.sse.com.cn), Shanghai Securities News, Securities Times | Since the 2022 Equity Distribution Plan was implemented by the Company, the conversion price of the Proya Convertible Bond was adjusted to RMB98.61/share on May 29, 2023. For details, see the Announcement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price due to 2022 Equity Distribution Plan (No.: 2023-030) released by the Company on the SSE website on May 23, 2023 (www.sse.com.cn). |
August 29, 2023 | RMB98.62/share | August 28, 2023 | SSE website (http://www.sse.com.cn), Shanghai Securities News, Securities Times | Since the Company completed the repurchase and cancellation of 105,350 incentive restricted shares under the 2022 Restricted Shares Incentive Plan, the conversion price of the Proya Convertible Bond was adjusted to RMB98.62/share on August 29, 2023. For details, see the Announcement of Proya Cosmetics Co., Ltd. on Completion of Repurchase and Cancellation of Some Incentive Restricted Shares and Adjustment of Conversion Price (No.: 2023-045) released by the Company on the SSE website on August 28, 2023 (www.sse.com.cn). |
October 23, 2023 | RMB98.24/share | October 17, 2023 | SSE website (www.sse.com.cn), Shanghai Securities News, Securities Times, | Since the 2023 Semi-Annual Equity Distribution Plan was implemented by the |
China Securities Journal, Securities Daily, Economic Information Daily, China Daily | Company, the conversion price of the Proya Convertible Bond was adjusted to RMB98.24/share on October 23, 2023. For details, see the Announcement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price due to 2023 Semi-Annual Equity Distribution Plan (No.: 2023-065) released by the Company on the SSE website on October 17, 2023 (www.sse.com.cn). | |||
December 18, 2023 | RMB98.25/share | December 15, 2023 | SSE website (www.sse.com.cn), Shanghai Securities News, Securities Times, China Securities Journal, Securities Daily, Economic Information Daily, China Daily | Since the Company completed the repurchase and cancellation of 66,192 incentive restricted shares under the 2022 Restricted Shares Incentive Plan, the conversion price of the Proya Convertible Bond was adjusted to RMB98.25/share on December 18, 2023. For details, see the Announcement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price and Trading Suspension for Conversion (No.: 2023-086) released by the Company on the SSE website on December 15, 2023 (www.sse.com.cn). |
Latest conversion price as of the end of the Reporting Period | RMB98.25/share |
(V) The Company's liabilities, changes in credit, and cash arrangements for debt repaymentin 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 ReportT.J.S. [2024] No.2241
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 of December 31,2023, the consolidated and parent company's income statements, the consolidated and parent company'scash flow statements, and the consolidated and parent company's statements of changes in shareholders'equity for the year of 2023, 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 theconsolidated and parent company's financial position of Proya as at December 31, 2023 and of itsconsolidated and parent company's operating results and cash flows for the year of 2023.
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 Ethicsof Chinese 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 thefinancial statements as a whole and, in forming our opinion thereon, we do not provide a separateopinion on these matters.(I) Recognition of revenue
1. Description of matters
For relevant information disclosure, refer to "34. Revenue" in "V. Significant Accounting Policies andEstimates", "61. Operating income and cost" in "VII. Notes to the Items of Consolidated FinancialStatements", and "6. Segment information" in "XVIII. Other Important Matters" of "Section XFinancial Report" herein.The operating revenue of Proya primarily comes from the sale of cosmetics. The operating revenue for2023 shown in Proya's financial statements was RMB8.90billion.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) Understood the key internal controls related to the recognition of revenue, evaluated the design ofthese controls, determined whether these controls were implemented, and tested the operationaleffectiveness of these controls.
(2) Issued letters to the main customers to confirm the sales amount in 2023 and the balance of accountsreceivable as at the end of 2023;
(3) Tested details and performed a spot-check on supporting documents for recognition of revenue(including sales contracts, delivery documents, receipts, agency sales lists, and sales invoices),understood major contract terms or conditions, and evaluated the appropriateness of the method forrecognition of revenue;
(4) Implemented analysis procedures, including analysis on fluctuations in revenue of each month of2023 and analysis on changes in sales revenue of major customers;
(5) Obtained the rebate and subsidy policies, rebate and subsidy calculation sheets and otherinformation, and checked whether the withholding amount of rebate and subsidy as at the end of 2023was sufficient; analyzed whether the amount of rebate and subsidy and the withholding amount werereasonable based on the rebate and subsidy policy as well as the revenue in 2023 and checked thesettlement after the rebate and subsidy withholding period as at the end of 2023;
(6) Obtained the return and exchange policy, calculation sheet of estimated liabilities and otherinformation, and checked whether the estimated future return and exchange rate was reasonable;checked the subsequent return and exchange situation and compared it with the estimated return andexchange data;
(7) Learned about the inventory and stock age of each major dealer as of the end of 2023 and checkedwhether the inventory amounts and structures of dealers were reasonable;
(8) Analyzed 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 storesand comparing them with the selling prices and normal use days of Proya products, so as to judge therationality of the above data in combination with normal consumption habits and analyze theauthenticity and rationality of the income of online chain stores;
(9) Compared the background transaction data, receipt data of capital accounts such as Alipay, and salesrevenue data on financial accounts of online chain stores, and analyzed the consistency of data, so as tocheck the authenticity of sales from the online chain stores;
(10) Checked whether the information related to the operating revenue was properly presented in thefinancial statements.(II) Net realizable value of inventories
1. Description of matters
For relevant information disclosure, refer to "16. Inventories" in "V. Significant Accounting Policies andEstimates" and "10. Inventories" in "VII. Notes to the Items of Consolidated Financial Statements" of"Section X Financial Report" herein.As at December 31, 2023, the book balance of inventories of Proya amounted to RMB901.11million, theprovision for devaluation of inventories amounted to RMB103.89million, and the carrying value ofinventories amounted to RMB797.22million.Inventories are measured at the lower of cost and net realizable value. The management determines theestimated selling price based on the historical selling price, actual selling price, and future market trends,and also determines the net realizable value based on the amount after deducting the estimated cost ofcompletion, estimated sale expense and relevant taxes from the estimated sale price of inventories.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) Obtained an understanding of key internal controls related to the net realizable value of inventories,evaluated the design of these controls, determined whether these controls were implemented, and testedthe operational effectiveness of these controls;
(2) Obtained the calculation process of the net realizable value of inventories of Proya, and re-checkedthe calculation process;
(3) Obtained the list of products that are no longer sold, counted the products rolling off the productionlines in the inventories and the corresponding raw material inventories, and verified whether theprovision for devaluation of inventories was accrued for the raw material inventories;
(4) Checked whether the inventories as at the end of the period had long stock ages, outdated models andchanges in market demand in combination with the inventory monitoring, and evaluated whether themanagement reasonably estimated the net realizable value;
(5) Checked 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 coveredin the 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 otherinformation and, in doing so, consider whether the other information is materially inconsistent with thefinancial statements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.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 viewin accordance with the Accounting Standards for Business Enterprises, and for the design,implementation and maintenance of necessary internal control to enable the preparation of financialstatements that are free 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 thegoing concern basis of accounting unless the management either intends to liquidate the Company or tocease operations, 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 thefinancial statements as a whole due to fraud or error and to issue an audit report containing auditopinion. Reasonable assurance is a highly reliable assurance, but is not a guarantee that an auditconducted in accordance with China Standards on Auditing will always identify a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered material if, individually orin aggregate, they could reasonably be expected to influence the economic decisions of users taken onthe basis of these financial statements.As part of an audit in accordance with the auditing standards, we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due tofraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of not identifying a materialmisstatement resulting from fraud is higher than that of failing to detect one resulting from error, asfraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.(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, whether a material uncertainty exists related to events orconditions that may significantly affect Proya's ability to continue as a going concern. If we concludethat a material uncertainty exists, we are required to draw attention in our audit report to the relateddisclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our audit report. However, futureevents 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 orbusiness activity of Proya in order to express an opinion on the financial statements. We are responsiblefor directing, supervising and performing group audits. We take full responsibility for the audit opinion.We communicate with those charged with governance regarding, among other matters, the plannedscope and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during the audit.We also provide a statement to management on compliance with ethical requirements related toindependence, and communicate with governing bodies about all relationships and other matters thatmay be reasonably considered to affect our independence, as well as related precautions (if applicable).From the matters we discuss with the governing bodies, we confirmed which matters are most importantto the audit of the financial statements for the current period and thus constitute the key audit matters.We describe these matters in the audit report unless laws or regulations preclude public disclosure aboutthese matters or when, in extremely rare circumstances, we determine that a matter should not becommunicated in our audit report because the adverse consequences of doing so would reasonably beexpected 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: WU Shaofang
April 17, 2024
II.Financial Statements
Consolidated Balance SheetAs of December 31, 2023Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
Item | Notes | As of December 31, 2023 | As of December 31, 2022 |
Current assets: | |||
Cash and cash equivalents | VII. 1 | 4,011,085,558.07 | 3,161,003,085.05 |
Clearing settlement funds | |||
Loans to banks and other financial institutions | |||
Held-for-trading financial assets | |||
Derivative financial assets | |||
Notes receivable | |||
Accounts receivable | VII. 5 | 344,570,196.54 | 102,157,898.41 |
Receivable financing | VII. 7 | 7,378,700.06 | |
Prepayments | VII. 8 | 202,870,195.58 | 91,483,523.15 |
Premiums receivable | |||
Reinsurance premium receivable | |||
Reserves for reinsurance contract receivable | |||
Other receivables | VII. 9 | 81,966,213.90 | 73,564,083.63 |
Including: Interest receivable | |||
Dividend receivable | |||
Financial assets purchased under resale agreements | |||
Inventories | VII. 10 | 797,215,155.68 | 669,051,326.73 |
Contract assets | |||
Held-for-sale assets | |||
Non-current assets due within one year | |||
Other current assets | VII. 13 | 99,765,073.07 | 49,735,996.57 |
Total current assets | 5,544,851,092.90 | 4,146,995,913.54 | |
Non-current assets: | |||
Loans and advances to customers | |||
Debt investments | |||
Other debt investments | |||
Long-term receivables | |||
Long-term equity investments | VII. 17 | 113,574,158.49 | 138,533,377.46 |
Other equity instrument investments | VII. 18 | 107,660,400.00 | 146,402,400.00 |
Other non-current financial assets | |||
Investment real estate | VII. 20 | 66,156,471.91 | 68,654,700.81 |
Fixed assets | VII. 21 | 827,350,985.29 | 570,376,309.67 |
Construction in progress | VII. 22 | 52,038,642.94 | 207,378,935.86 |
Productive biological assets | |||
Oil and gas assets | |||
Right-of-use assets | VII. 25 | 14,104,821.34 | 6,410,634.25 |
Intangible assets | VII. 26 | 404,688,009.16 | 420,316,883.26 |
Development expenditure | |||
Goodwill | |||
Long-term prepaid expenses | VII. 28 | 67,184,328.83 | 19,142,604.46 |
Deferred income tax assets | VII. 29 | 108,494,364.60 | 48,305,338.82 |
Other non-current assets | VII. 30 | 16,974,946.99 | 5,554,726.06 |
Total non-current assets | 1,778,227,129.55 | 1,631,075,910.65 | |
Total assets | 7,323,078,222.45 | 5,778,071,824.19 | |
Current liabilities: | |||
Short-term borrowings | VII. 32 | 200,155,555.56 | 200,195,890.41 |
Loans from the central bank | |||
Loans from banks and other financial institutions | |||
Held-for-trading financial liabilities | |||
Derivative financial liabilities | |||
Notes payable | VII. 35 | 36,959,074.14 | 69,626,352.12 |
Accounts payable | VII. 36 | 1,018,522,358.60 | 475,427,484.23 |
Receipts in advance | VII. 37 | 30,514.45 | 464,328.26 |
Contract liabilities | VII. 38 | 301,014,873.58 | 174,602,833.91 |
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 | 166,444,494.43 | 124,938,749.36 |
Taxes payable | VII. 40 | 222,765,869.94 | 152,918,871.45 |
Other payables | VII. 41 | 155,345,148.68 | 216,392,183.41 |
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 | 3,970,060.11 | 2,549,452.14 |
Other current liabilities | VII. 44 | 15,022,173.42 | 10,820,499.59 |
Total current liabilities | 2,120,230,122.91 | 1,427,936,644.88 | |
Non-current liabilities: | |||
Insurance contract reserves | |||
Long-term borrowings | |||
Bonds payable | VII. 46 | 753,119,902.88 | 724,491,557.93 |
Including: Preference shares | |||
Perpetual bonds | |||
Lease liabilities | VII. 47 | 9,970,306.87 | 3,718,119.41 |
Long-term payables | |||
Long-term employee compensation payable | |||
Estimated liabilities | VII. 50 | 33,063,299.45 | 59,282,928.68 |
Deferred income | VII. 51 | 6,383,359.33 | 6,399,811.33 |
Deferred income tax liabilities | VII. 29 | 19,019,431.67 | |
Other non-current liabilities | |||
Total non-current liabilities | 802,536,868.53 | 812,911,849.02 | |
Total liabilities | 2,922,766,991.44 | 2,240,848,493.90 | |
Owners' equity (or shareholders' equity): | |||
Paid-in capital (or share capital) | VII. 53 | 396,757,184.00 | 283,519,469.00 |
Other equity instruments | VII. 54 | 50,893,986.60 | 50,903,510.12 |
Including: Preference shares | |||
Perpetual bonds | |||
Capital reserve | VII. 55 | 864,150,974.43 | 914,815,786.22 |
Less: Treasury stock | VII. 56 | 146,966,735.61 | 164,976,000.00 |
Other comprehensive income | VII. 57 | -53,847,100.91 | -1,918,603.07 |
Special reserve | |||
Surplus reserve | VII. 59 | 198,411,582.50 | 141,759,734.50 |
General risk reserve | |||
Retained profits | VII. 60 | 3,040,145,490.59 | 2,300,384,763.19 |
Total owners' equity (or shareholders' equity) attributable to equity holders of the parent company | 4,349,545,381.60 | 3,524,488,659.96 | |
Minority interests | 50,765,849.41 | 12,734,670.33 | |
Total owners' equity (or shareholders' equity) | 4,400,311,231.01 | 3,537,223,330.29 | |
Total liabilities and owners' equity (or shareholders' equity) | 7,323,078,222.45 | 5,778,071,824.19 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiPerson in charge of Accounting Department: WANG Li
Parent Company's Balance Sheet
As of December 31, 2023Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
Item | Notes | As of December 31, 2023 | As of December 31, 2022 |
Current assets: | |||
Cash and cash equivalents | 2,816,366,399.45 | 2,169,179,716.12 | |
Held-for-trading financial assets | |||
Derivative financial assets | |||
Notes receivable | |||
Accounts receivable | XIX. 1 | 586,728,691.35 | 289,883,063.24 |
Receivable financing | 4,732,700.06 | ||
Prepayments | 66,223,228.82 | 34,908,418.05 | |
Other receivables | XIX. 2 | 80,702,024.60 | 141,574,549.59 |
Including: Interest receivable | |||
Dividend receivable | |||
Inventories | 516,042,533.80 | 458,341,886.37 | |
Contract assets | |||
Held-for-sale assets | |||
Non-current assets due within one year | |||
Other current assets | 38,762,926.06 | 32,667,616.71 | |
Total current assets | 4,109,558,504.14 | 3,126,555,250.08 | |
Non-current assets: | |||
Debt investments | |||
Other debt investments | |||
Long-term receivables | |||
Long-term equity investments | XIX. 3 | 418,748,241.23 | 394,321,950.41 |
Other equity instrument investments | 71,838,000.00 | 110,580,000.00 | |
Other non-current financial assets | |||
Investment real estate | 95,815,110.34 | 348,408,309.83 | |
Fixed assets | 783,893,280.52 | 278,011,361.35 | |
Construction in progress | 51,841,256.80 | 206,756,324.14 | |
Productive biological assets | |||
Oil and gas assets | |||
Right-of-use assets | 13,640,458.38 | 5,707,540.03 | |
Intangible assets | 371,083,311.38 | 382,584,698.57 | |
Development expenditure | |||
Goodwill | |||
Long-term prepaid expenses | 62,969,904.19 | 13,494,337.73 | |
Deferred income tax assets | 8,256,631.70 | 11,372,733.52 | |
Other non-current assets | 17,197,966.38 | 4,916,417.58 | |
Total non-current assets | 1,895,284,160.92 | 1,756,153,673.16 | |
Total assets | 6,004,842,665.06 | 4,882,708,923.24 | |
Current liabilities: | |||
Short-term borrowings | 200,155,555.56 | 200,195,890.41 | |
Held-for-trading financial liabilities | |||
Derivative financial liabilities | |||
Notes payable | 36,959,074.14 | 69,626,352.12 |
Accounts payable | 603,314,221.56 | 217,330,371.42 | |
Receipts in advance | |||
Contract liabilities | 220,349,629.19 | 68,099,041.17 | |
Employee compensation payable | 88,243,004.64 | 58,246,111.22 | |
Taxes payable | 161,141,517.93 | 69,952,710.78 | |
Other payables | 113,223,667.48 | 167,125,433.78 | |
Including: Interest receivable | |||
Dividends payable | |||
Held-for-sale liabilities | |||
Non-current liabilities due within one year | 3,488,575.66 | 2,210,449.03 | |
Other current liabilities | 28,645,451.80 | ||
Total current liabilities | 1,455,520,697.96 | 852,786,359.93 | |
Non-current liabilities: | |||
Long-term borrowings | |||
Bonds payable | 753,119,902.88 | 724,491,557.93 | |
Including: Preference shares | |||
Perpetual bonds | |||
Lease liabilities | 9,970,306.87 | 3,354,028.30 | |
Long-term payables | |||
Long-term employee compensation payable | |||
Estimated liabilities | |||
Deferred income | 6,383,359.33 | 6,399,811.33 | |
Deferred income tax liabilities | 18,758,960.23 | ||
Other non-current liabilities | |||
Total non-current liabilities | 769,473,569.08 | 753,004,357.79 | |
Total liabilities | 2,224,994,267.04 | 1,605,790,717.72 | |
Owners' equity (or shareholders' equity): | |||
Paid-in capital (or share capital) | 396,757,184.00 | 283,519,469.00 | |
Other equity instruments | 50,893,986.60 | 50,903,510.12 | |
Including: Preference shares | |||
Perpetual bonds | |||
Capital reserve | 917,524,533.21 | 964,613,342.84 | |
Less: Treasury stock | 146,966,735.61 | 164,976,000.00 | |
Other comprehensive income | -53,180,700.00 | ||
Special reserve | |||
Surplus reserve | 198,411,582.50 | 141,759,734.50 | |
Retained profits | 2,416,408,547.32 | 2,001,098,149.06 | |
Total owners' equity (or shareholders' equity) | 3,779,848,398.02 | 3,276,918,205.52 | |
Total liabilities and owners' equity (or shareholders' equity) | 6,004,842,665.06 | 4,882,708,923.24 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiPerson in charge of Accounting Department: WANG Li
Consolidated Income Statement
January - December 2023
Unit: Yuan Currency: RMB
Item | Notes | 2023 | 2022 |
I. Total operating revenue | VII. 61 | 8,904,573,501.39 | 6,385,451,424.00 |
Including: Operating revenue | VII. 61 | 8,904,573,501.39 | 6,385,451,424.00 |
Interest income | |||
Premiums earned | |||
Fee and commission income | |||
II. Total operating costs | 7,310,234,937.16 | 5,191,391,396.39 | |
Including: Operating cost | VII. 61 | 2,677,445,706.61 | 1,934,850,203.65 |
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 | 90,655,757.20 | 56,394,508.94 | |
Selling expenses | VII. 63 | 3,972,201,152.49 | 2,785,837,352.95 |
General and administrative expenses | VII. 64 | 455,441,770.70 | 327,296,749.37 |
R&D expenses | VII. 65 | 173,570,127.49 | 128,009,104.49 |
Financial expenses | VII. 66 | -59,079,577.33 | -40,996,523.01 |
Including: Interest expenses | 18,355,694.64 | 13,019,503.91 | |
Interest income | 75,347,198.04 | 51,707,124.62 | |
Add: Other income | VII. 67 | 45,026,299.74 | 39,065,105.62 |
Investment income ("-" refers to losses) | VII. 68 | -17,392,371.65 | -5,658,023.28 |
Including: Income from investments in associates and joint ventures | -17,279,158.95 | -5,658,023.28 | |
Income from derecognition of financial assets measured at amortized cost | |||
Foreign exchange gains ("-" refers to losses) | |||
Net gains on exposure hedging ("-" refers to losses) | |||
Gains on changes in fair value ("-" refers to losses) | |||
Credit impairment losses ("-" refers to losses) | VII. 71 | -10,397,224.17 | -5,057,425.43 |
Asset impairment losses ("-" refers to losses) | VII. 72 | -108,095,314.38 | -164,884,555.28 |
Gains from disposal of assets ("-" refers to losses) | VII. 73 | -703,593.33 | 60,155.60 |
III. Operating profits ("-" refers to losses) | 1,502,776,360.44 | 1,057,585,284.84 | |
Add: Non-operating revenue | VII. 74 | 4,166,661.77 | 1,178,886.33 |
Less: Non-operating expenses | VII. 75 | 11,623,216.62 | 4,613,645.24 |
IV. Total profits ("-" refers to total losses) | 1,495,319,805.59 | 1,054,150,525.93 | |
Less: Income tax expenses | VII. 76 | 264,515,655.25 | 222,866,719.56 |
V. Net profits ("-" refers to net losses) | 1,230,804,150.34 | 831,283,806.37 | |
(I) Classified by the nature of continuing operations | |||
1. Net profits from continuing operations ("-" refers to net losses) | 1,230,804,150.34 | 831,283,806.37 |
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) | 1,193,868,141.81 | 817,400,223.93 | |
2. Profits or losses attributable to minority interests ("-" refers to net losses) | 36,936,008.53 | 13,883,582.44 | |
VI. Other comprehensive income, net of tax | VII. 77 | -51,928,497.84 | -670,928.97 |
(I) Other comprehensive income attributable to owners of the parent company, net of tax | -51,928,497.84 | -670,928.97 | |
1. Other comprehensive income that cannot be reclassified to profit or loss | -53,180,700.00 | ||
(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 | -20,250,000.00 | ||
(3) Changes in fair value of other equity instrument investments | -32,930,700.00 | ||
(4) Changes in fair value of enterprises' own credit risks | |||
2. Other comprehensive income that will be reclassified into profit or loss | 1,252,202.16 | -670,928.97 | |
(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 | 1,252,202.16 | -670,928.97 | |
(7) Others | |||
(II) Other comprehensive income attributable to minority interests, net of tax | |||
VII. Total comprehensive income | 1,178,875,652.50 | 830,612,877.40 | |
(I) Total comprehensive income attributable to owners of the parent company | 1,141,939,643.97 | 816,729,294.96 | |
(II) Total comprehensive income attributable to minority interests | 36,936,008.53 | 13,883,582.44 | |
VIII. Earnings per share | |||
(I) Basic earnings per share (RMB/share) | 3.01 | 2.07 | |
(II) Diluted earnings per share (RMB/share) | 2.97 | 2.05 |
In case of business combination under common control, net profit realized by the combined before thecombination 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 LiPerson in charge of Accounting Department: WANG Li
Parent Company's Income Statement
January - December 2023
Unit: Yuan Currency: RMB
Item | Notes | 2023 | 2022 |
I. Operating revenue | XIX. 4 | 4,244,455,041.32 | 3,081,136,936.75 |
Less: Operating cost | XIX. 4 | 1,966,981,451.80 | 1,424,725,111.00 |
Taxes and surcharges | 44,411,104.27 | 24,372,917.75 | |
Selling expenses | 597,090,222.91 | 472,193,858.89 | |
General and administrative expenses | 318,149,093.59 | 218,455,156.75 | |
R&D expenses | 175,400,671.99 | 132,656,295.93 | |
Financial expenses | -46,265,107.81 | -41,965,768.21 | |
Including: Interest expenses | 18,219,770.96 | 13,019,503.91 | |
Interest income | 59,296,736.20 | 42,503,905.91 | |
Add: Other income | 11,113,880.99 | 15,650,274.95 | |
Investment income ("-" refers to losses) | XIX. 5 | -19,824,288.29 | -4,161,437.71 |
Including: Income from investments in associates and joint ventures | -17,279,158.95 | -5,149,438.13 | |
Income from derecognition of financial assets measured at amortized cost | |||
Net gains on exposure hedging ("-" refers to losses) | |||
Gains on changes in fair value ("-" refers to losses) | |||
Credit impairment losses ("-" refers to losses) | -82,262,296.44 | 53,589,117.29 | |
Asset impairment losses ("-" refers to losses) | -71,022,124.11 | -126,987,703.77 | |
Gains from disposal of assets ("-" refers to losses) | -603,420.52 | 60,155.60 | |
II. Operating profits ("-" refers to losses) | 1,026,089,356.20 | 788,849,771.00 | |
Add: Non-operating revenue | 681,685.66 | 22,010.99 | |
Less: Non-operating expenses | 10,162,782.71 | 1,516,181.13 | |
III. Total profits ("-" refers to total losses) | 1,016,608,259.15 | 787,355,600.86 | |
Less: Income tax expenses | 147,190,446.48 | 116,008,968.02 | |
IV. Net profits ("-" refers to net losses) | 869,417,812.67 | 671,346,632.84 | |
(I) Net profits from continuing activities ("-" refers to net losses) | 869,417,812.67 | 671,346,632.84 | |
(II) Net profits from discontinuing activities ("-" refers to net losses) | |||
V. Net amount of other comprehensive income after tax | -53,180,700.00 | ||
(I) Other comprehensive income that cannot be reclassified into profit or loss | -53,180,700.00 |
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 | -20,250,000.00 | ||
3. Changes in the fair value of other equity instrument investments | -32,930,700.00 | ||
4. Changes in the fair value of the 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. Changes in the 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 | 816,237,112.67 | 671,346,632.84 | |
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 LiPerson in charge of Accounting Department: WANG Li
Consolidated Cash Flow StatementJanuary - December 2023
Unit: Yuan Currency: RMB
Item | Notes | 2023 | 2022 |
I. Cash flows from operating activities: | |||
Cash received from the sale of goods and the rendering of services | 9,328,552,717.55 | 7,088,465,997.21 | |
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 contracts | |||
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 agencies | |||
Receipts of tax refunds | 3,525,948.82 | ||
Other cash received related to operating activities | VII. 78(1) | 125,413,607.47 | 99,500,140.40 |
Sub-total of cash inflows from operating activities | 9,457,492,273.84 | 7,187,966,137.61 | |
Cash paid for goods purchased and services received | 2,509,354,309.80 | 2,241,842,834.78 | |
Net increase in loans and advances to customers | |||
Net increase in balance with the central bank and due from banks and other financial institutions | |||
Cash paid for compensation payments under original insurance contracts | |||
Net increase in loans to banks and other financial institutions | |||
Cash paid for interest, fees and commissions | |||
Cash paid for insurance policyholder dividends | |||
Cash payments to and on behalf of employees | 700,164,408.84 | 558,582,470.38 | |
Payments of various types of taxes | 1,017,756,020.64 | 660,096,624.31 | |
Other cash paid related to operating activities | VII. 78(1) | 3,761,423,719.98 | 2,616,308,090.91 |
Sub-total of cash outflows from operating activities | 7,988,698,459.26 | 6,076,830,020.38 | |
Net cash flow from operating activities | 1,468,793,814.58 | 1,111,136,117.23 | |
II. Cash flows from investing activities: | |||
Cash received from disposal and recovery of investments | 5,500,000.00 | ||
Cash received from investment income | 466,821.72 | ||
Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 285,500.00 | 3,751,463.96 | |
Net cash received from disposal of subsidiaries and other business entities | 3,018,142.61 | ||
Other cash received related to investing activities | VII.78 (2) | 13,193,392.00 |
Sub-total of cash inflows from investing activities | 22,463,856.33 | 3,751,463.96 | |
Cash paid for acquisition or construction of fixed assets, intangible assets and other long-term assets | VII.78 (2) | 179,658,688.53 | 170,963,405.43 |
Cash paid for investments | VII.78 (2) | 18,636,363.64 | 131,003,609.10 |
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 (2) | 300,000,000.00 | |
Sub-total of cash outflows from investing activities | 498,295,052.17 | 301,967,014.53 | |
Net cash flow from investing activities | -475,831,195.84 | -298,215,550.57 | |
III. Cash flows from financing activities: | |||
Cash received from capital contributions | 165,676,000.00 | ||
Including: Cash received from capital contributions from minority shareholders of subsidiaries | 700,000.00 | ||
Cash received from borrowings | 300,000,000.00 | 300,000,000.00 | |
Other cash received related to financing activities | |||
Sub-total of cash inflows from financing activities | 300,000,000.00 | 465,676,000.00 | |
Cash repayments of borrowings | 300,000,000.00 | 300,000,000.00 | |
Cash paid for distribution of dividends or profits or settlement of interest expenses | 407,092,087.41 | 182,663,748.85 | |
Including: Payments for distribution of dividends or profits to minority owners of subsidiaries | |||
Other cash paid related to financing activities | VII.78 (3) | 53,188,106.51 | 48,263,571.88 |
Sub-total of cash outflows from financing activities | 760,280,193.92 | 530,927,320.73 | |
Net cash flow from financing activities | -460,280,193.92 | -65,251,320.73 | |
IV. Impact of foreign exchange rate changes on cash and cash equivalents | 1,252,202.16 | -670,928.97 | |
V. Net increase in cash and cash equivalents | 533,934,626.98 | 746,998,316.96 | |
Add: Opening balance of cash and cash equivalents | 3,125,333,085.05 | 2,378,334,768.09 | |
VI. Closing balance of cash and cash equivalents | 3,659,267,712.03 | 3,125,333,085.05 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiPerson in charge of Accounting Department: WANG Li
Parent Company's Cash Flow Statement
January - December 2023
Unit: Yuan Currency: RMB
Item | Notes | 2023 | 2022 |
I. Cash flows from operating activities: | |||
Cash received from the sale of goods and the rendering of services | 4,644,368,388.33 | 3,625,216,143.38 | |
Receipts of tax refunds | 3,525,948.82 | ||
Other cash received related to operating activities | 96,881,632.24 | 1,133,863,796.96 | |
Sub-total of cash inflows from operating activities | 4,744,775,969.39 | 4,759,079,940.34 | |
Cash paid for goods purchased and services received | 1,945,629,515.66 | 1,830,694,703.17 | |
Cash payments to and on behalf of employees | 373,444,752.18 | 265,940,955.35 | |
Payments of various types of taxes | 375,674,085.29 | 276,743,971.90 | |
Other cash paid related to operating activities | 772,902,793.66 | 595,570,988.89 | |
Sub-total of cash outflows from operating activities | 3,467,651,146.79 | 2,968,950,619.31 | |
Net cash flow from operating activities | 1,277,124,822.60 | 1,790,129,321.03 | |
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 | 1,946,534.67 | 1,057,300.53 | |
Net cash received from disposal of subsidiaries and other business entities | 2,501,326.27 | ||
Other cash received related to investing activities | 22,272,596.52 | 1,271,529,576.13 | |
Sub-total of cash inflows from investing activities | 26,720,457.46 | 1,274,286,876.66 | |
Cash paid for acquisition or construction of fixed assets, intangible assets and other long-term assets | 173,025,274.68 | 163,990,474.83 | |
Cash paid for investments | 23,236,363.64 | 179,238,922.10 | |
Net cash paid for acquiring subsidiaries and other operating entities | |||
Other cash paid related to investing activities | 315,549,000.00 | 2,248,367,720.97 | |
Sub-total of cash outflows from investing activities | 511,810,638.32 | 2,591,597,117.90 | |
Net cash flow from investing activities | -485,090,180.86 | -1,317,310,241.24 | |
III. Cash flows from financing activities: |
Cash received from capital contributions | 164,976,000.00 | ||
Cash received from borrowings | 300,000,000.00 | 300,000,000.00 | |
Other cash received related to financing activities | |||
Sub-total of cash inflows from financing activities | 300,000,000.00 | 464,976,000.00 | |
Cash repayments of borrowings | 300,000,000.00 | 300,000,000.00 | |
Cash paid for distribution of dividends or profits or settlement of interest expenses | 407,092,087.41 | 182,663,957.72 | |
Other cash paid related to financing activities | 51,844,122.36 | 766,654.65 | |
Sub-total of cash outflows from financing activities | 758,936,209.77 | 483,430,612.37 | |
Net cash flow from financing activities | -458,936,209.77 | -18,454,612.37 | |
IV. Impact of foreign exchange rate changes on cash and cash equivalents | |||
V. Net increase in cash and cash equivalents | 333,098,431.97 | 454,364,467.42 | |
Add: Opening balance of cash and cash equivalents | 2,138,929,716.12 | 1,684,565,248.70 | |
VI. Closing balance of cash and cash equivalents | 2,472,028,148.09 | 2,138,929,716.12 |
The chairman of the Company: HOU Juncheng CFO of the Company: WANG LiPerson in charge of Accounting Department: WANG Li
Consolidated Statements of Changes in Owners' Equity
January - December 2023Unit: Yuan Currency: RMB
Item | 2023 | ||||||||||||||
Equity attributable to owners of the parent company | Minority interests | Total equity attributable to owners | |||||||||||||
Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury stock | 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 | 283,519,469.00 | 50,903,510.12 | 914,815,786.22 | 164,976,000.00 | -1,918,603.07 | 141,759,734.50 | 2,300,384,763.19 | 3,524,488,659.96 | 12,734,670.33 | 3,537,223,330.29 | |||||
Add: Changes in accounting policies | |||||||||||||||
Correction for previous errors | |||||||||||||||
Other | |||||||||||||||
II. Balance at the beginning of the current year | 283,519,469.00 | 50,903,510.12 | 914,815,786.22 | 164,976,000.00 | -1,918,603.07 | 141,759,734.50 | 2,300,384,763.19 | 3,524,488,659.96 | 12,734,670.33 | 3,537,223,330.29 | |||||
III. Increase of the current period ("- | 113,237,715.00 | -9,523.52 | -50,664,811.79 | -18,009,264.39 | -51,928,497.84 | 56,651,848.00 | 739,760,727.40 | 825,056,721.64 | 38,031,179.08 | 863,087,900.72 |
" refers to decrease) | |||||||||||||||
(I) Total comprehensive income | -51,928,497.84 | 1,193,868,141.81 | 1,141,939,643.97 | 36,936,008.53 | 1,178,875,652.50 | ||||||||||
(II) Owners' contribution and capital reduction | -170,421.00 | -9,523.52 | 66,340,892.08 | 29,588,211.71 | 36,572,735.85 | 36,572,735.85 | |||||||||
1. Ordinary shares contributed by the owners | -171,542.00 | -9,322,685.24 | -9,494,227.24 | ||||||||||||
2. Capital contributions by other equity instrument holders | |||||||||||||||
3. Amount of share-based payments credited to owners' equity | 75,515,052.71 | 75,515,052.71 | 75,515,052.71 | ||||||||||||
4. Other | 1,121.00 | -9,523.52 | 148,524.61 | 39,082,438.95 | -38,942,316.86 | -38,942,316.86 | |||||||||
(III) Profit distribution | 56,651,848.00 | -454,107,414.41 | -397,455,566.41 | -397,455,566.41 |
1. Withdrawal of surplus reserve | 56,651,848.00 | -56,651,848.00 | |||||||||||||
2. Withdrawal of general risk provision | |||||||||||||||
3. Distribution to owners (or shareholders) | -397,455,566.41 | -397,455,566.41 | -397,455,566.41 | ||||||||||||
4. Other | |||||||||||||||
(IV) Internal carry-forward of owners' equity | 113,408,136.00 | -113,408,136.00 | |||||||||||||
1. Transfer of capital reserve to capital (or share capital) | 113,408,136.00 | -113,408,136.00 | |||||||||||||
2. Transfer of surplus reserve to capital (or share capital) |
3. Surplus reserve to cover loss | |||||||||||||||
4. Changes in defined benefit scheme carried forward to retained earnings | |||||||||||||||
5. 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 | -3,597,567.87 | -47,597,476.10 | 43,999,908.23 | 1,095,170.55 | 45,095,078.78 | ||||||||||
IV. Balance at the end of the period | 396,757,184.00 | 50,893,986.60 | 864,150,974.43 | 146,966,735.61 | -53,847,100.91 | 198,411,582.50 | 3,040,145,490.59 | 4,349,545,381.60 | 50,765,849.41 | 4,400,311,231.01 |
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 stock | 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 | |||||||||||||||
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 | 210,987,934.74 | 159,347,871.79 | 53,692,467.96 | 700,000.00 | 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 | 700,000.00 | 6,328,128.21 | |||||||||
2. Capital contributions by other equity instrument holders | |||||||||||||||
3. Amount of share-based payments credited to owners' equity | 47,357,121.24 | 47,357,121.24 | 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 | 41,124,954.50 | -41,124,954.50 |
surplus reserve | |||||||||||||||
2. Withdrawal of general risk provision | |||||||||||||||
3. Distribution to owners (or shareholders) | -172,868,570.76 | -172,868,570.76 | -172,868,570.76 | ||||||||||||
4. 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 | -50,040,368.18 | -50,040,368.18 | -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 |
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 2023
Unit: Yuan Currency: RMB
Item | 2023 | ||||||||||
Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury stock | 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 | 283,519,469.00 | 50,903,510.12 | 964,613,342.84 | 164,976,000.00 | 141,759,734.50 | 2,001,098,149.06 | 3,276,918,205.52 | ||||
Add: Changes in accounting policies | |||||||||||
Correction for previous errors | |||||||||||
Other | |||||||||||
II. Balance at the beginning of the current year | 283,519,469.00 | 50,903,510.12 | 964,613,342.84 | 164,976,000.00 | 141,759,734.50 | 2,001,098,149.06 | 3,276,918,205.52 | ||||
III. Increase of the current period ("-" refers to decrease) | 113,237,715.00 | -9,523.52 | -47,088,809.63 | -18,009,264.39 | -53,180,700.00 | 56,651,848.00 | 415,310,398.26 | 502,930,192.50 | |||
(I) Total comprehensive income | -53,180,700.00 | 869,417,812.67 | 816,237,112.67 | ||||||||
(II) Owners' contribution and capital reduction | -170,421.00 | -9,523.52 | 66,340,892.08 | 29,588,211.71 | 36,572,735.85 | ||||||
1. Ordinary shares contributed by the owners | -171,542.00 | -9,322,685.24 | -9,494,227.24 | ||||||||
2. Capital contributions by other equity instrument holders | |||||||||||
3. Amount of share-based payments credited to owners' equity | 75,515,052.71 | 75,515,052.71 | |||||||||
4. Other | 1,121.00 | -9,523.52 | 148,524.61 | 39,082,438.95 | -38,942,316.86 | ||||||
(III) Profit distribution | 56,651,848.00 | -454,107,414.41 | -397,455,566.41 | ||||||||
1. Withdrawal of surplus reserve | 56,651,848.00 | -56,651,848.00 |
2. Distribution to owners (or shareholders) | -397,455,566.41 | -397,455,566.41 | |||||||||
3. Other | |||||||||||
(IV) Internal carry-forward of owners' equity | 113,408,136.00 | -113,408,136.00 | |||||||||
1. Transfer of capital reserve to capital (or share capital) | 113,408,136.00 | -113,408,136.00 | |||||||||
2. Transfer of surplus reserve to capital (or share capital) | |||||||||||
3. Surplus reserve to cover loss | |||||||||||
4. Changes in defined benefit scheme carried forward to retained earnings | |||||||||||
5. 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 | -21,565.71 | -47,597,476.10 | 47,575,910.39 | ||||||||
IV. Balance at the end of the period | 396,757,184.00 | 50,893,986.60 | 917,524,533.21 | 146,966,735.61 | -53,180,700.00 | 198,411,582.50 | 2,416,408,547.32 | 3,779,848,398.02 |
Item | 2022 | ||||||||||
Paid-in capital (or share capital) | Other equity instruments | Capital reserve | Less: Treasury stock | 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 current year | 201,009,966.00 | 50,956,622.11 | 834,563,920.32 | 5,628,128.21 | 100,634,780.00 | 1,543,745,041.48 | 2,725,282,201.70 | ||||
III. 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 |
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 the Huzhou Municipal Administration forIndustry and Commerce on May 24, 2006. Headquartered in Hangzhou, Zhejiang, the Company nowholds the business license with the unified social credit code of 91330100789665033F. The Company'sregistered capital is RMB396,823,165.00, and the paid-in capital is RMB396,757,184.00 (the paid-incapital is RMB65,981.00 less than the registered capital due to the conversion of convertible bonds andthe repurchasing and de-registering of the granted but unreleased restricted shares without industrial andcommercial change registration). The Company has 1,957,060 restricted circulating A shares and394,800,124 unrestricted circulating A shares. The Company’s shares were listed for trading on SSE onNovember 15, 2017.The Company is a beauty and personal care company mainly engaged in cosmetics R&D, production,and sales.The financial statements were approved for external disclosure by the 18th meeting of the 3rd session ofBoard of Directors of the Company on April 17, 2024.
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
Important notes: The Company has formulated specific accounting policies and estimates fortransactions or events related to impairment of financial instruments, inventories, depreciation of fixedassets, construction in progress, intangible assets, and revenue recognition based on the actualproduction and operation characteristics.
1. Statement of compliance with accounting standards for business enterprisesThe financial statements have been prepared by the Company in compliance with the China AccountingStandards for Business Enterprises, and give an accurate and complete view of the Company's financialposition, operating results, changes in shareholders' equity, cash flow and other related information.
2. Accounting period
The accounting 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 theliquidity classification criteria for assets and liabilities.
4. Functional currency
The Company and our domestic subsidiaries use RMB as the functional currency, while our overseassubsidiaries, such as Hapsode Co., Ltd., Hanna Cosmetics Co., Ltd., and OR Off&Relax choose the
currency of the main economic environment in which they operate as the functional currency since theyengage in overseas operations.
5. Determination method and selection basis of importance criteria
√ Applicable □ Not applicable
Item | Importance criteria |
Accounts receivable | The Company recognizes accounts receivable that individually exceed 0.3% of the total assets as important accounts receivable. |
Receivable financing | The Company recognizes receivable financing that individually exceed 0.3% of the total assets as important receivable financing. |
Other receivables | The Company recognizes other receivables that individually exceed 0.3% of the total assets as important other receivables. |
Important prepayments with an account age of more than one year | The Company recognizes prepayments that individually exceed 0.3% of the total assets as important prepayments. |
Important construction in progress | The Company recognizes construction in progress that individually exceeds 0.3% of the total assets as important construction in progress. |
Important accounts payable with an account age of more than one year | The Company recognizes accounts payable that individually exceed 0.3% of the total assets as important accounts payable. |
Important receipts in advance with an account age of more than one year or overdue | The Company recognizes receipts in advance that individually exceeds 0.3% of the total assets as important Receipts in advance. |
Important contract liabilities with an account age of more than one year | The Company recognizes contract liabilities that individually exceed 0.3% of the total assets as important contract liabilities. |
Important other payables with an account age of more than one year | The Company recognizes other payables that individually exceed 0.3% of the total assets as important other payables. |
Important estimated liabilities | The Company recognizes estimated liabilities that individually exceed 0.3% of the total assets as important estimated liabilities. |
Important cash flows from investing activities | The Company recognizes cash flows from investing activities that individually exceed 5% of the total assets as important cash flows from investing activities. |
Important subsidiaries and non wholly-owned subsidiaries | The Company recognizes subsidiaries with absolute value of contribution to total profits that exceeds 5% of the absolute value of consolidated profits as important subsidiaries or important non-wholly-owned subsidiaries. |
Important joint ventures, affiliates and joint operations | The Company recognizes joint ventures, affiliates and joint operations with absolute value of contribution to total profits that exceeds 5% of the absolute value of consolidated profits as important joint ventures, affiliates and joint operations. |
Important contingencies | The Company recognizes contingencies that have an impact on balance sheet items exceeding 1% of total assets or an impact on income statement items exceeding 5% of total profits as important contingencies. |
Important commitments | The Company recognizes commitments that have |
an impact on balance sheet items exceeding 1% of total assets or an impact on income statement items exceeding 5% of total profits as important commitments. | |
Important events after the balance sheet date | The Company recognizes events after the balance sheet date that have an impact on balance sheet items exceeding 1% of total assets or an impact on income statement items exceeding 5% of total profits as important events after the balance sheet date. |
6. Accounting treatment of business combination under or not under common control
√ Applicable □ Not applicable
1. Accounting treatment of 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 owner’s equity of the combined party in the consolidatedfinancial statements of the ultimate controlling party and the carrying value of the consideration paid forthe business combination or the total nominal value of the issued shares. If the capital reserve is notsufficient to offset the difference, the retained earnings will be adjusted.
2. Accounting treatment of business combination not under common control
The difference by which the cost of combination is greater than the fair value of the net identifiableassets of the acquiree is recognized by the Company as goodwill on the acquisition date; the differenceby which the combination cost is less than the fair value share of the net identifiable assets of theacquiree is recorded into the profit or loss after the re-check of the measurement of the fair value ofidentifiable assets, liabilities or contingent liabilities acquired from the acquiree, and the combinationcost.
7. Criteria for judgment of control and preparation of consolidated financial statements
√ Applicable □ Not applicable
1. Judgment of control
Control is having the power over the invested party, enjoying variable returns through participating inrelated activities of the invested party, and having the ability to use the power over the invested party toinfluence its variable return amount.
2. Preparation of consolidated financial statements
(1) The parent company incorporates all subsidiaries under its control into the consolidation scope of theconsolidated financial statements. The consolidated financial statements are based on the financialstatements of the parent company and its subsidiaries, and prepared by the parent company inaccordance with the Accounting Standards for Business Enterprises No. 33 - Consolidated FinancialStatements.
(2) Accounting treatment of buying and then selling, or selling and then buying the equity of the samesubsidiary in two consecutive fiscal years: the acquisition of the equity of the acquiree is to control itsoperating and financial policies and to obtain long-term benefits from its operating activities. When theright to control the acquiree is acquired, it is included in the consolidation scope of the consolidatedfinancial statements. Due to changes in the Company's business plans and arrangements, if the equity ofthe acquiree is disposed of in the second fiscal year to the point of losing control over it, the acquireewill be excluded from the consolidation scope of the consolidated financial statements when the controlis lost.
8. 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 holdingshare;
(5) Cost incurred alone, and cost incurred from the joint operation on proportion.
9. Determination of cash and cash equivalents
Cash presented in the cash flow statement refers to cash on hand and deposits that can be used forpayment at any time. Cash equivalents refer to the short-term and highly liquid investments that arereadily convertible to known amounts of cash and subject to an insignificant risk of change in value.
10. 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. At the balance sheet date, the foreign currency monetaryitems are translated based on the spot rate at the balance sheet date. The exchange difference arisingfrom the different exchange rate is included in the current profit or loss, except the exchange differencebetween the principal and interest of the foreign currency borrowed for meeting the capitalizationrequirements. The foreign currency non-monetary items measured at historical cost are also translatedbased on the approximate rate of the spot rate on the transaction date, and the RMB amount is notchanged. The foreign currency non-monetary items measured at fair value are translated based on thespot rate on the determination date of the fair value, and the difference is included in the current profit orloss 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.
11. 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) financialassets measured at amortized cost; (2) financial assets measured at fair value through othercomprehensive income; (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 that arise when a transferof a financial 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 contractsmentioned in item (1) or (2) above and those not belonging to item (1) above and given at a rate lowerthan the market interest rate; (4) financial liabilities measured at amortized cost.
2. Recognition basis, measurement method and derecognition conditions for financial assets andliabilities
(1) Recognition basis and initial measurement method for financial assets and financial 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 aredirectly included in the current profit or loss; for other categories of financial assets or liabilities,relevant transaction costs are recognized as expenses at initial recognition. However, where the accountsreceivable initially recognized by the Company do not contain a significant financing component or theCompany does not consider the financing component in the contract of less than one year, the initial
measurement is made according to the transaction price defined in the Accounting Standards forBusiness Enterprises No. 14 – Revenue.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
Such financial assets are subsequently measured at amortized cost using the effective interest method.The gains and losses incurred by the financial assets measured at amortized cost but not belonging toany hedging relationship are included in the current profit or loss during derecognition, reclassification,amortization according to the effective interest method or impairment recognition.
2) Debt instrument investments measured at fair value through other comprehensive incomeThey are subsequently measured at fair value. The interest, impairment losses or gains and exchangegains or losses calculated with the effective interest method are included in the current profit or loss, andother gains or losses are included in other comprehensive income. At derecognition, the gains or lossesaccumulated previously through comprehensive income are transferred from other comprehensiveincome and 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 frominvestment cost recovery) are included in the current profit or loss, and other gains or losses are includedin other comprehensive income. At derecognition, the gains or losses accumulated previously throughother comprehensive income are transferred from other comprehensive income and included intoretained earnings.
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 ofthe hedging 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 valuethrough profit or loss. Such financial liabilities are subsequently measured at fair value. Changes in thefair value of financial liabilities measured at fair value through profit or loss due to changes in theCompany's own credit risk are included in other comprehensive income, unless the treatment will causeor enlarge the accounting mismatch in the profit or loss. Other gains or losses generated from suchfinancial liabilities (including interest expenses, except the changes in the fair value arising from thecredit risk change of the Company) are included in the current profit or loss, unless the financialliabilities belong to part of the hedging relationship. At derecognition, the gains or losses accumulatedpreviously through other comprehensive income are transferred from other comprehensive income andincluded 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)above and 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 initialrecognition: ① loss provisions determined according to regulations on impairment of financialinstruments; ② balance of the initially recognized amount after deducting cumulative amortizationrecognized in accordance with the regulations set out in the Accounting Standards for BusinessEnterprises No. 14 – Revenue.
4) Financial liabilities measured at amortized cost
They are measured at amortized cost using the effective interest method. The gains and losses incurredby the 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 effectiveinterest method.
(4) Derecognition of financial assets and liabilities
1) Financial assets satisfying one of the following conditions are derecognized:
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, suchfinancial liabilities (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 financialassets, the financial assets are derecognized, and the rights and obligations resulting from or retained inthe transfer are separately recognized as assets or liabilities. In case that almost all the risks and rewardsrelated to the ownership of the financial assets are retained, the recognition of the transferred financialassets is continued. In case that almost all the risks and rewards related to the ownership of the financialassets are neither transferred nor retained, disposal applies depending on the following circumstances:
(1) if the control over the financial assets is not retained, the financial assets are derecognized, and therights and obligations resulting from or retained in the transfer are separately recognized as assets orliabilities; (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 differencebetween the two amounts below are included in the current profit or loss: (1) the carrying value of thetransferred financial assets at the date of derecognition; (2) the sum of consideration received for thetransfer of the financial asset, plus the corresponding derecognized portion of accumulated change in fairvalue previously included in other comprehensive income (in cases where the transferred financial assetis a debt instrument investment measured at fair value with changes included in other comprehensiveincome). If part of the financial assets is transferred and the transfer satisfies the conditions forderecognition, the overall carrying value before the transfer of financial assets is apportioned accordingto their respective relative fair value at the transfer date between the portion of derecognized part and theremaining part, and the difference between the two amounts below is included in the current profit orloss: If part of the financial assets is transferred and the transfer satisfies the conditions forderecognition, the overall carrying value before the transfer of financial assets is apportioned accordingto their respective relative fair value at the transfer date between the portion of derecognized part and theremaining part, and the difference between the two amounts below is included in the current profit orloss:
4. Determination of the fair value of financial assets and liabilities
The Company adopts valuation techniques appropriate to the prevailing circumstances with the supportof sufficient data and other information available to determine the fair value of relevant financial assetsand liabilities. The Company divides the inputs for the estimation technique into the following levels anduses them in turn:
(1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities thatthe Company 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 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, andfinancial forecasts made based on its own data, which cannot be observed directly or cannot be verifiedaccording to observable market data.
5. Impairment 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, leasereceivables, loan commitments other than financial liabilities measured at fair value through profit orloss, and financial guarantee contracts of financial liabilities not measured at fair value through profit orloss or financial liabilities not from failure of transfer of financial assets to meet the derecognitionconditions or continued 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 discountedaccording to the original effective interest rate and receivable under contracts by the Company and allcash flows as expected, i.e. the present value of all cash shortages. The purchased or underlying financialassets of the Company with credit impairment incurred are discounted according to their effectiveinterest rates upon credit adjustment.For purchased or underlying financial assets with credit impairment incurred, only accumulative changesin the expected credit loss in the whole duration after initial recognition are recognized by the Companyas loss provisions at the balance sheet date.For lease receivables, and receivables and contract assets from transactions in accordance with theAccounting Standards for Business Enterprises No. 14 – Revenue, excluding significant financingcomponents or without consideration, by the Company, to the financing components in the contract ofno more than one year, the Company measures the loss provision according to the amount equal to theexpected credit loss in the whole duration by applying the simplified measurement method.For financial assets other than those applicable to the above measurement methods, the Company assesson each balance sheet date whether their credit risk has increased significantly since initial recognition.If the credit risk has increased significantly since the initial recognition, the Company will measure theloss provision based on the amount of expected credit loss in the whole duration; if the credit risk hasnot significantly increased since the initial recognition, the Company will measure the loss provisionbased on the amount of expected credit loss for the financial instruments in the next 12 months.The Company determines whether the credit risk of financial instruments has increased significantlysince initial recognition by utilizing the available, reasonable and well-grounded information, includingforward-looking information, and comparing the default risks of the financial instruments at the balancesheet date and on the initial recognition date.If the Company determines that the financial instruments bear a low credit risk at the balance sheet date,we assume 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 the portfolio of financial instruments isused as the basis, 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, areincluded in the current profit or loss. For financial assets measured at amortized cost, the carrying valueof the financial assets listed in the balance sheet is deducted from the loss provision; for the debtinvestment measured at fair value with changes included in other comprehensive income, the Companyrecognizes its loss provision in other comprehensive income without deducting the carrying value of thefinancial assets.
6. Offset of financial assets and liabilities
Financial assets and liabilities are presented in the balance sheet respectively without offsetting.However, when the following conditions are met simultaneously, the financial assets and liabilities arepresented at the net amount after mutual offset in the balance sheet: (1) the Company has the legal rightof offsetting the recognized amount and such legal right is currently executable; (2) the Company plansto settle by net amount or simultaneously realize the financial assets and clear off the financial liabilities.When the financial assets that do not meet the derecognition conditions are transferred, the Companydoes not offset the transferred financial assets with the relevant liabilities.
12. Notes receivable
□ Applicable √ Not applicable
13. Accounts receivable
√ Applicable □ Not applicable
Determination and accounting treatment of the expected credit loss of accounts receivable
√ Applicable □ Not applicable
Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
Classification and determination basis of portfolios with bad debt provisions accrued by portfolioof credit risk characteristics
√ Applicable □ Not applicable
Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
Calculation of account ages of portfolios of credit risk characteristics recognized on the accountage basis
√ Applicable □ Not applicable
The expected credit loss is calculated through a table that compares the account age of accountsreceivable and expected credit loss rate by referring to historical experience in credit loss and accordingto the current situation and the forecast on future economic conditions.Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
Criteria for judgment of recognized bad debt provisions accrued individually
√ Applicable □ Not applicable
Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
14. Receivable financing
√ Applicable □ Not applicable
Determination and accounting treatment of the expected credit loss of receivable financing
√ Applicable □ Not applicable
Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
Classification and determination basis of portfolios with bad debt provisions accrued by portfolioof credit risk characteristics
√ Applicable □ Not applicable
The expected credit loss is calculated through the default risk exposure and the expected credit loss ratein the whole duration by referring to historical experience in credit loss and according to the currentsituation and the forecast on future economic conditions.Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
Calculation of account ages of portfolios of credit risk characteristics recognized on the accountage basis
√ Applicable □ Not applicable
Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
Criteria for judgment of provision for bad debts accrued individually
√ Applicable □ Not applicable
Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
15. Other receivables
√ Applicable □ Not applicable
Determination and accounting treatment of the expected credit loss of other receivables
√ Applicable □ Not applicable
Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
Classification and determination basis of portfolios with bad debt provisions accrued by portfolioof credit risk characteristics
√ Applicable □ Not applicable
The expected credit loss is calculated through a table that compares the account age of other receivablesand expected credit loss rate by referring to historical experience in credit loss and according to thecurrent situation and the forecast on future economic conditions.Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
Calculation of account ages of portfolios of credit risk characteristics recognized on the accountage basis
√ Applicable □ Not applicable
Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
Criteria for judgment of provision for bad debts accrued individually
√ Applicable □ Not applicable
Refer to "11. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section XFinancial Report" in this Report.
16. Inventories
√ Applicable □ Not applicable
Classification of inventories, valuation method for delivered inventories, inventory system, andamortization of low-value consumables and packaging
√ Applicable □ Not applicable
1. Classification of inventories
Inventories include finished goods or commodities for sale in daily operations, work in process,materials consumed during production or rendering of service.
2. Valuation method for delivered inventories
The moving weighted average is adopted for delivered inventories.
3. Inventory system
The Company adopts a perpetual inventory system.
4. Amortization of low-value consumables and packaging
(1) Low-value consumables
Amortization is performed via the immediate write-off method.
(2) Packaging
Amortization is performed via the immediate write-off method.
Recognition and accrual of provision for devaluation of inventories
√ Applicable □ Not applicable
At the balance sheet date, inventories are measured at the lower of cost and net realizable value, andprovision for devaluation of inventories is accrued based on the positive difference between cost and netrealizable value. The net realizable value of inventories directly for sale is determined by the amount ofthe estimated selling price after subtracting the estimated selling 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 selling expenses and relevant taxes during thenormal production and operation. At the balance sheet date, the net realizable value is determinedseparately for the two parts of the same inventory with or without contract price, and is compared withthe relevant costs to separately determine the amount withdrawn or reversed for provision fordevaluation of inventories.
Classification and determination basis of portfolios with provision for devaluation of inventoriesaccrued by portfolio and determination basis of net realizable value of different categories ofinventories
□ Applicable √ Not applicable
Calculation method and determination basis of net realizable value of each stock age portfolio forinventories with net realizable value recognized based on stock age
□ Applicable √ Not applicable
17. Contract assets
√ Applicable □ Not applicable
Recognition methods and standards of contract assets
√ Applicable □ Not applicable
The rights of the Company to collect consideration from the customer unconditionally (i.e. onlydepending on time) are presented as receivables; the rights (dependent on factors other than time) tocollect consideration for transferring goods to the customer are presented as contract assets.
Determination and accounting treatment of the expected credit loss of contract assets
□ Applicable √ Not applicable
Classification and determination basis of portfolios with bad debt provisions accrued by portfolioof credit risk characteristics
□ Applicable √ Not applicable
Calculation of account ages of portfolios of credit risk characteristics recognized on the accountage basis
□ Applicable √ Not applicable
Criteria for judgment of recognized bad debt provisions accrued individually
□ Applicable √ Not applicable
18. Held-for-sale non-current assets or disposal groups
□ Applicable √ Not applicable
Recognition and accounting treatment of non-current assets or disposal groups classified as held-for-sale
□ Applicable √ Not applicable
Recognition and presentation of termination of operation
□ Applicable √ Not applicable
19. Long-term equity investments
√ Applicable □ Not applicable
1. Joint control or significant influence criterion
Joint control is the contractually agreed sharing of control of an arrangement. It exists only whendecisions about the relevant activities of the arrangement require the unanimous consent of the partiessharing control. Significant influence refers to the power to participate in the decision-making processon the financial and operating policies of the investee, but not to control or impose joint control togetherwith other 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:
where the 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 ofthe 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 equityinvestment at the combination date and the sum of the carrying amount of long-term equity investmentbefore business combination and the carrying value of newly paid consideration for additional sharesacquired on the combination date is adjusted to the capital reserve. If the capital reserve is not sufficientto be offset, the retained 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 investmentcost.
2) In the consolidated financial statements, the item is determined based on whether the transactions area "package deal". If yes, the transactions are subject to accounting treatment as one deal that hasacquired control right. If no, the equity of the acquiree held before the acquisition date is re-measured atthe fair value of the equity on the acquisition date, and the difference between the fair value and itscarrying value is included in the current investment income. If the equity of the acquiree held before theacquisition date is related to other comprehensive income under the equity method, the other relatedcomprehensive income is converted into the current income on the acquisition date, excluding the othercomprehensive income derived from changes in net liabilities or assets due to re-measurement ondefined benefit plans by the investee.
(3) For a long-term equity investment obtained by means other than business combination: If it isobtained by cash, the initial investment cost is the actual payment; if it is obtained through issuing equitysecurities, the initial investment cost is the fair value of the issued equity securities. If it is obtainedthrough debt restructuring, the initial investment cost is determined based on the Accounting Standardsfor Business Enterprises 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 forBusiness 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) Judgment of whether transactions are a "package deal"
In case of loss of control upon stepwise disposal of investment to subsidiaries through multipletransactions, the Company judges whether such transactions are a "package deal" based on the terms ofthe transaction agreement of each step of stepwise transactions, the disposal consideration obtainedrespectively, the target of equity sale, the disposal method, the disposal time and other information.When the terms, conditions and economic impact of each transaction meet one or more of the followingcircumstances, it usually indicates that the multiple transactions are a "package deal":
1) these transactions were entered into simultaneously or after considering the effects of each other;
2) these transactions constituted a complete commercial result as a whole;
3) one transaction was conditional upon at least one of the other transaction;
4) one transaction was not economical on its own but was economical when considering othertransactions.
(2) Accounting treatment of transactions which are not a "package deal"
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 via the equity
method in case of significant influence on the investee or implementation of joint control with otherparties. However, in case of no control, joint control or significant influence on the investee, theaccounting of remaining equity must comply with the relevant provisions of the Accounting Standardsfor Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
2) Consolidated financial statements
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 asof the date on which the control is lost. The difference between the sum of the consideration receivedfrom equity disposal and the fair value of the remaining equity and the net assets of the originalsubsidiary proportionate to the original shareholding accumulated from the date of acquisition orbusiness combination is included in investment gains of the period during which the control is lost, andmeanwhile, the goodwill is offset. Other comprehensive income related to the equity investment in theoriginal subsidiary is transferred to investment gains of the period during which the control is lost.
(3) Accounting treatment of transactions which are a "package deal"
1) Individual financial statements
All transactions are regarded as one transaction disposing the subsidiary and losing the control right foraccounting treatment. However, the difference between the amount received each time for disposalbefore the control is lost and the carrying value of long-term equity investments corresponding to thedisposal of investment is recognized as other comprehensive income in the individual financialstatements, and is transferred to profit or loss of the period during which the control is lost upon loss ofcontrol.
2) Consolidated financial statements
All transactions are regarded as one transaction disposing the subsidiary and losing the control right foraccounting treatment. However, the difference between the amount received each time for disposalbefore the control is lost and the net assets of such subsidiary corresponding to the disposal ofinvestment is recognized as other comprehensive income in the consolidated financial statements, and istransferred to profit or loss of the period during which the control is lost upon loss of control.
20. Investment real estate
(1). In case of applying a cost measurement model:
Depreciation or amortization method
1. Investment real estate includes leased land use rights, land use rights held for transfer uponappreciation, and leased buildings.
2. Investment real estate is initially measured at cost and subsequently measured with the cost model,and depreciated or amortized with the same method as that for fixed assets and intangible assets.
21. 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 simultaneously: theeconomic benefits are likely to inflow to the Company and the costs of such fixed assets can bemeasured reliably.
(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% |
22. Construction in progress
√ Applicable □ Not applicable
1. Construction in progress is recognized when the following conditions are satisfied simultaneously: theeconomic benefits are likely to inflow to the Company and the costs of such construction in progress canbe measured reliably. Construction in progress is measured at the actual cost incurred to prepare theassets for their intended use.
2. Construction in progress is transferred to fixed assets at the actual cost when it reaches the expectedconditions for service. When construction in progress has achieved serviceable conditions but finalsettlement has not been finished, 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.
Category | Criteria and timing for the transfer of construction in progress to fixed assets |
Dedicated equipment | After installation and commissioning, the construction meets the design requirements or the standards stipulated in the contract |
Houses and buildings | When the physical construction has been fully or substantially completed and can be put into use |
23. 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 andconstruction of assets eligible for capitalization, are capitalized and included in the costs of the relatedassets. Other borrowing costs are recognized as expenses in the period in which they are incurred and areincluded in the current profit or loss.
2. Capitalization period of borrowing costs
(1) The capitalization of borrowing costs begins when the following three conditions are fully satisfied:
1) expenditures for the assets have been incurred; 2) borrowing costs have been incurred; 3) acquisitionand construction or production that are necessary to enable the assets to reach the intended usable orsalable conditions have commenced.
(2) Where abnormal interruption of assets eligible for capitalization occurs during the acquisition andconstruction or production process and such interruption has lasted for more than three consecutivemonths, the capitalization of borrowing costs is suspended; the borrowing costs during the interruptionare 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 bankinterests for the unused portion or the investment income for temporary investment from the interestcosts (including recognized depreciation or amortization of premium under the effective interest method)actually incurred in the current period of specific borrowing; for general borrowing occupied for theacquisition and construction or production of assets meeting the capitalization conditions, the interestamount to be capitalized is determined via the result obtained by multiplying the capitalization rate ofoccupied general borrowing with the weighted average value of the asset expenditure for theaccumulated expenditure exceeding the specific borrowing portion.
24. Biological assets
□ Applicable √ Not applicable
25. Oil and gas assets
□ Applicable √ Not applicable
26. Intangible assets
(1). Service life and its determination basis, estimation, amortization method or reviewprocedure
√ Applicable □ Not applicable
1. Intangible assets, including land use rights, patent rights and non-patented technologies, are initiallymeasured at 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 information is shown as below:
Item | Service life (year) | Determination basis of service life | Amortization method |
Land use rights | 40 or 50 | Estimated service life | Straight-line method |
Non-patented technologies | 5 | Estimated service life | Straight-line method |
Office software | 3-10 | Estimated service life | Straight-line method |
Patent right | 5 | Estimated service life | Straight-line method |
Customer resources | 3 | Estimated earning life | Straight-line method |
Trademark rights | 10 | Estimated service life | Straight-line method |
(2). Collection scope of R&D expenditures and related accounting treatment methods
√ Applicable □ Not applicable
1. Collection scope of R&D expenditures
(1) Labor costs
Labor costs include salaries, basic endowment insurance premiums, basic medical insurance premiums,unemployment insurance premiums, work-related injury insurance premiums, maternity insurancepremiums and housing provident funds of the Company's R&D personnel, as well as labor costs ofexternal R&D personnel.If R&D personnel serve multiple R&D projects at the same time, the labor costs are allocatedproportionally among different R&D projects based on the working hour records of R&D personnel ofvarious R&D projects provided by the management department of the Company.If the personnel directly engaged in R&D activities and external R&D personnel are also engaged innon-R&D activities, the Company will allocate the actual labor costs between R&D expenses andproduction & operation expenses by adopting reasonable methods such as the proportion of actualworking hours based on the working hour records of R&D personnel at different positions.
(2) Direct input costs
Direct input costs refer to the relevant expenses actually incurred by the Company for theimplementation of R&D activities, Including: 1) costs of directly consumed materials, fuel and power; 2)development and manufacturing expenses of molds and process equipment used for intermediate testsand product trial production, purchase expenses of samples, prototypes and general testing means whichdo not constitute fixed assets, and inspection expenses of trial production products; 3) expenses foroperation, maintenance, adjustment, inspection, testing and maintenance of instruments and equipmentused for R&D activities.
(3) Depreciation expenses and long-term prepaid expenses
Depreciation expenses refer to the depreciation expenses of instruments, equipment and buildings in usefor R&D activities.If the instruments, equipment and buildings in use for R&D activities are also used for non-R&Dactivities, the use of such instruments, equipment and buildings in use are recorded as necessary, and thedepreciation expenses actually incurred are allocated between R&D expenses and production &operation expenses in a reasonable way based on the actual working hours, usable area and other factors.Long-term prepaid expenses refer to the long-term prepaid expenses incurred in the process ofreconstruction, modification, decoration and repair of R&D facilities, which are collected according tothe actual expenditures and amortized evenly by stages within the prescribed period.
(4) Amortization expenses of intangible assets
Amortization expenses of intangible assets refer to the amortization expenses of software, intellectualproperty rights and non-patented technologies (including proprietary technology, licenses, designs andcalculation methods) used for R&D activities.
(5) Entrusted external R&D expenses
Entrusted external R&D expenses refer to the expenses incurred by the Company in entrusting otherinstitutions or individuals at home and abroad to carry out R&D activities (the results of R&D activitiesare owned by the Company and closely related to the Company's main operations).
(6) Others expenses
Other expenses refer to other expenses directly related to R&D activities other than the above expenses,including costs of technical books and materials, data translation fees, expert consultation fees, high-techR&D insurance premiums, retrieval, demonstration, evaluation, appraisal and acceptance fees of R&Dresults, intellectual property application fees, registration fees, agency fees, conference fees, travelexpenses, and communication fees.
2. Expenditure incurred during the research phase of internal R&D projects is included in the currentprofit or loss when actually incurred. Expenditure incurred during the development phase is recognizedas expenditure on an intangible asset when all of the following conditions are satisfied simultaneously:
(1) Completing the intangible asset so that it will be available for use or sale is technically feasible; (2)The intention to complete the intangible asset so that it will be available for use or sale exists; (3) Theintangible asset will generate probable future economic benefits. Amongst other things, the Companycan demonstrate the existence of a market for the output of the intangible asset or the intangible assetitself or, if it is used internally, the usefulness of the intangible asset; (4) Adequate technical, financialand other resources to complete the development and to use or sell the intangible asset are available; (5)The expenditure attributable to the intangible asset during its development can be reliably measured.
27. Impairment of long-term assets
√ Applicable □ Not applicable
For long-term assets such as long-term equity investments, investment real estate measured with the costmodel, fixed assets, construction in progress, right-of-use assets and intangible assets with limitedservice life, in case that there are signs indicating impairment at the balance sheet date, the recoverableamount should be estimated. Whether there is a sign of impairment or not, the goodwill acquired throughthe business combination and intangible assets with indefinite service life is tested for impairment eachyear. The impairment test on goodwill is carried out in combination with its related asset group or assetgroup portfolio.In case the recoverable amount of the above long-term assets is less than its carrying value, the provisionfor asset impairment is recognized according to its differences and included in the current profit or loss.
28. Long-term prepaid expenses
√ Applicable □ Not applicable
For long-term assets such as long-term equity investments, investment real estate measured with the costmodel, fixed assets, construction in progress, right-of-use assets and intangible assets with limitedservice life, in case that there are signs indicating impairment at the balance sheet date, the recoverableamount should be estimated. Whether there is a sign of impairment or not, the goodwill acquired throughthe business combination and intangible assets with indefinite service life is tested for impairment eachyear. The impairment test on goodwill is carried out in combination with its related asset group or assetgroup portfolio.
In case the recoverable amount of the above long-term assets is less than its carrying value, the provisionfor asset impairment is recognized according to its differences and included in the current profit or loss.
29. 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.
30. 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 is recognized as a liability andincluded in the current profit or loss or the costs of the related assets.
(2) The accounting treatment for the defined benefit plan generally comprises the following steps:
1) According to the expected cumulative benefit unit method, the demographic variables, financialvariables, and other variables are estimated through unbiased and mutually consistent actuarialassumption, so as to measure the obligations arising from the defined benefit plan and determine theperiod of relevant obligations. In addition, the obligation generated from the defined benefit plan isdiscounted, so as to determine the present value of defined benefit plan obligation and current servicecost;
2) In case assets exist in the defined benefit plan, the deficit or surplus generated from the present valueof obligations of the defined benefit plan minus the fair value of the assets of the defined benefit plan isrecognized as a net liability or net asset 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 the definedbenefit plan 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 thedefined benefit plan, in which the service costs and the net interest of the net liabilities or net assets ofthe defined benefit plan are included in the current profit or loss or the costs of the related assets, and thechanges generated by re-measurement of the net liabilities or net assets of the defined benefit plan areincluded in other comprehensive income, and cannot be reversed to profit or loss in the subsequentaccounting period. However, the amount recognized in other comprehensive income can be transferredwithin the equity scope.
(3). Accounting treatment 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 treatedin accounting as stipulated in the defined contribution plan; 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.
31. Estimated liabilities
√ Applicable □ Not applicable
1. The obligations imposed by contingencies, such as providing external guarantees, lawsuits, productquality assurance and onerous contracts, become the current obligations assumed by the Company,which are determined by the Company as provisions when their performance is very likely to result ineconomic benefit outflow from the Company and their amount can be measured as estimated liabilities.
2. The estimated liabilities are initially measured by the Company based on the optimal estimate to bepaid for performing relevant current obligations and their carrying value is reviewed at the balance sheetdate.
32. 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 are included in relevant costs or expenses as per the fair value of the equityinstruments on the grant date, and the capital reserve is 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.If the reliable measurement of the fair value of other parties services is impossible, but the reliablemeasurement of the fair value of the equity instruments is possible, they are measured as per the fairvalue of the equity instruments on the date of acquiring the services and included in relevant costs orexpenses, with the owners' equity is increased accordingly.
(2) Cash-settled share-based payments
Cash-settled share-based payments vested immediately after the grant date and exchanged for employeeservices are included in relevant costs or expenses as per the fair value of the liabilities assumed by theCompany on the grant date, and the liabilities are increased accordingly. For cash-settled share-basedpayments that are vested only after the services within the waiting period are completed or the specifiedperformance conditions are satisfied and that are exchanged for employee services, the services acquiredin the current period are included in relevant costs or expenses and corresponding liabilities as per thefair value of the liabilities assumed by the Company based on the optimal estimate of the vestingconditions 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 ofthe acquired services according to the fair value of the equity instruments. If the number of the grantedequity instruments is increased, the Company recognizes the increased fair value of the equityinstruments as the increase of the acquired services accordingly. If the Company modifies the vestingconditions in a way favorable to employees, the Company considers the modified vesting conditionswhen dealing with the vesting conditions.
If the fair value of the granted equity instruments is decreased, the Company continues to recognize theamount of the acquired services according to the fair value of the equity instruments on the grant date,without taking into account the decrease of the fair value of the equity instruments. If the number of thegranted equity instruments is decreased, the Company treats the decreased part as cancellation of thegranted equity instruments. If the Company modifies the vesting conditions in a way unfavorable toemployees, the Company will not consider the modified vesting conditions when dealing with thevesting conditions.If the Company cancels or settles the granted equity instruments within the waiting period (other thanthe cancellation arising from failure to meet the vesting conditions), the cancellation or settlement isregarded as accelerated vesting treatment to immediately recognize the amount that should berecognized within the remaining waiting period.
33. 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 classifies 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.At the balance sheet date, for financial instruments classified as equity instruments, interest expenses ordividend distributions are treated by the Company as profit distribution. Repurchases, cancellations, andsimilar transactions are treated as changes in equity. For financial instruments classified as financialliabilities, their interest expense or dividend distribution are treated as borrowing costs, and the gains orlosses from repurchase or redemption are included in the current profit or loss.
34. Revenue
(1). Accounting policy applied for recognition and measurement of revenues disclosed bybusiness type
√ Applicable □ Not applicable
1. Revenue recognition principle
On the commencement date of the contract, the Company evaluates the contract, identifies the individualperformance obligations provided in the contract and determines whether to perform them within aperiod or at a time point.The performance obligations are deemed to be performed within a period if one of the followingconditions is satisfied, otherwise, at a time point: (1) The customer acquires and consumes the economicbenefits brought by the Company's performance while the Company is performing its obligations; (2) thecustomer is capable to control the commodities under creation during the Company's performance; (3)the commodities produced during the Company's performance have an irreplaceable purpose and theCompany has the right to collect the amounts for the performance part already completed to date withinthe whole contract 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 is recognized according to theincurred amount of costs until the performance progress can be determined in a reasonable way. For theobligations performed at a time point, the revenue is recognized at the time of the customer's acquiringthe control of related commodities or services. The Company takes into account the following whenjudging whether the customer has acquired the control over a commodity: (1) The Company has thecurrent right for collection, namely the customer has the current obligation for payment with respect tothe commodity; (2) the Company has transferred the legal title of the commodity to the customer,namely the customer has possessed the legal title of the commodity; (3) the Company has transferred thephysical commodity to the customer, namely the customer has physical possession of the commodity;
(4) the Company has transferred the main risks and returns on the commodity’s title to the customer,namely the customer has acquired the same; (5) the customer has accepted the commodity; and (6) thereare other signs indicating that the customer has acquired 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,excluding the amounts charged on behalf of a 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 ofthe variable 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 transactionprice according to the payable amount assumed to be paid by the customer in cash immediately after itacquires the control over the commodities or services. The difference between the transaction price andthe contract consideration is amortized with the effective interest method within the contract term. If theCompany expects, on the commencement date of the contract, that the interval between the customer'sacquisition of the control of the commodities or services and its payment is not more than one year, themajor financing composition in the contract is not taken into account.
(4) In case of two or more performance obligations in the contract, the Company apportions thetransaction price to the individual performance obligations according to the relative proportion of theindividual sales price of the commodities undertaken as per the individual performance obligations onthe commencement date of the contract.
(2). Difference in accounting policies for revenue recognition and measurement resultingfrom different business models for similar businesses
√ Applicable □ Not applicable
The Company mainly sells cosmetics. We have different sales models classified as distribution, directselling and 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.
35. Contract cost
□ Applicable √ Not applicable
36. 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 ableto receive the government subsidies. In case of government subsidies as monetary assets, they aremeasured at the amount received or receivable. In case of government subsidies as non-monetary assets,they are measured at the fair value; in case that the fair value cannot be acquired in a reliable way, theyare measured at the nominal amount.
2. Determination and accounting treatment method for government subsidies related to assetsGovernment subsidies that are used for purchasing and construction or otherwise forming long-termassets as specified in government documents are classified as government subsidies related to assets. Incase of no provision in government documents, the government subsidies are determined on the basis ofthe essential condition required for obtaining the subsidies, and considered as related to assets if theessential condition is purchasing and construction or otherwise forming long-term assets. Government
subsidies related to assets offset the carrying value of relevant assets or are recognized as deferredincome. If the government subsidies related to assets are recognized as deferred income, they areincluded in the profit and loss in a reasonable and systematic way within the service life of relevantassets. Government subsidies measured at nominal amount are directly included in the current profit orloss. If related assets are sold, transferred, scrapped or damaged before the end of their service life,related deferred income balance unallocated is transferred into the profit and loss for the period of assetdisposal.
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 incomethat are used for compensation for relevant costs or losses in subsequent periods are recognized asdeferred income, and included in the current profit or loss or offset relevant costs in the period in whichrelevant costs or losses are recognized; those used for compensation for relevant costs or losses that haveincurred are 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 subsidiesunrelated to the daily business activities of the Company are included in non-operating revenue orexpenses.
37. 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 deferredincome tax assets or liabilities are calculated and recognized according to the tax rate applicable in theperiod where it is expected to recover the assets or liquidate the liabilities.
2. Deferred income tax assets are recognized to the extent that it is very likely to obtain the taxableincome to deduct the deductible temporary differences. If at the balance sheet date, there is conclusiveevidence proving that it is very likely that sufficient taxable income will be obtained in future periods todeduct the deductible temporary differences, the deferred income tax assets not recognized in previousaccounting periods is recognized.
3. At the balance sheet date, the carrying value of the deferred income tax assets is reviewed. When it isvery likely that sufficient taxable income will not be obtained in future periods to deduct their benefits,the carrying value of the deferred income tax assets is written down. When it is very likely that sufficienttaxable income will be obtained, 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 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.
5. Where the following conditions are met simultaneously, the Company will present the deferredincome tax assets and deferred income tax liabilities at the net amount after offset: (1) the Company hasa legal right to settle the current income tax assets and liabilities; (2) the deferred tax assets andliabilities relate to income taxes levied by the same taxation authority on either the same taxable entity,or different taxable entities. However, in the future, for each significant period of deferred income taxassets and liabilities being reversed, the involved taxable entity intends to either settle current taxliabilities and assets on a net basis, or to acquire the assets and settle the liabilities simultaneously.
38. Lease
√ Applicable □ Not applicable
Judgment and accounting treatment of the Company as the lessee for short-term leases and low-value asset leases subject to simplified treatment
√ Applicable □ Not applicable
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 assets
are brand-new assets are recognized as leases of low-value assets. If the Company subleases or isexpected to sublease the leased assets, the original lease is not recognized as a lease of low-value assets.For all short-term leases and leases of low-value assets, the Company records the lease payments in thecost of related assets or the current profit or loss by applying the straight-line method over each period ofthe 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 a lease incentive exists; 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 are located, or restore the leased assets to the condition agreedupon in the lease terms.The Company depreciates right-of-use assets with the straight-line method. If it can be reasonablydetermined that the Company will acquire ownership of the leased assets at the expiration of the leaseterm, the Company accrues depreciation over the remaining service life of the leased assets. If it cannotbe reasonably determined that the Company will acquire ownership of the leased assets at the expirationof the lease term, the Company accrues depreciation over the lease term or the remaining service life ofthe leased assets, whichever is shorter.
(2) Lease liabilities
On the start date of the lease term, the Company recognizes the present value of the outstanding leasepayments as lease liabilities. When calculating the present value of lease payments, the interest rateimplicit in the lease is used as the discount rate. If the interest rate implicit in the lease cannot bedetermined, the Company’s incremental borrowing rate is used as the discount rate. The differencebetween the lease payment and its present value is regarded as the unrecognized financing expense, andthe interest expense is recognized in each period of the lease term according to the discount rate of thepresent value of the recognized lease payment, and is included in the current profit or loss. Variablelease payments that are not included in the measurement of lease liabilities are included in the currentprofit or loss when actually incurred.After the start date of the lease term, when there is a change in the actual amount of fixed payment, achange in the estimated payable amount of the guaranteed residual value, a change in the index or ratioused to determine the lease payment amount, or a change in the evaluation results or actual exercise ofthe purchase option, renewal option or termination option, the Company re-measures the lease liabilitiesaccording to the present value of the changed lease payments, and adjusts the carrying value of the right-of-use assets accordingly. If the carrying value of the right-of-use assets has been reduced to zero, butthe lease liabilities still need to be further reduced, the remaining amount is included in the current profitor loss.
Classification and accounting treatment of the Company as the lessor for leases
√ Applicable □ Not applicable
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, andother leases as operating leases.
(1) Operating leases
During each period of the lease term, the Company recognizes the lease receipts as rental income byapplying the straight-line method, capitalizes the initial direct expenses incurred and amortizes theexpenses on the same basis as for rental income recognition, to be included in the current profit or loss ininstallments. The variable lease payments obtained by the Company related to operating leases but notincluded in the lease receipts are included in the current profit or loss when actually incurred.
(2) Financial leases
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 leasereceipts that have not been received on the start date of the lease term discounted at the interest rateimplicit in lease), and derecognizes financial lease assets. During each period of the lease term, theCompany calculates and recognizes interest income based on the interest rate implicit in the lease.
The variable lease payments 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.
39. Other significant accounting policies and estimates
√ Applicable □ Not applicable
Accounting treatment related to repurchasing the Company’s sharesIf the Company’s shares are acquired due to reasons such as reducing registered capital or rewardingemployees, the actual amount paid is treated as treasury shares and recorded for future reference. Wherethe repurchased shares are canceled, the difference between the total face value of the shares calculatedbased on the face value and number of canceled shares and the actual amount paid for the repurchasewill be offset against the capital reserve. If the capital reserve is insufficient to be offset, the retainedearnings will be offset. Where the repurchased shares are rewarded to employees of the Company asequity-settled share-based payments, the cost of treasury shares delivered to employees and thecumulative amount of capital reserves (other capital reserves) during the waiting period is charged offwhen employees exercise their rights to purchase shares of the Company and relevant payments arereceived, and the capital reserves (share premium) are also adjusted according to the difference.
40. Changes in significant accounting policies and estimates
(1). Changes in significant accounting policies
□ Applicable √ Not applicable
(2). Changes in significant accounting estimates
□ Applicable √ Not applicable
(3). Financial statements at the beginning of the year of the first implementation which areadjusted due to the first implementation of new accounting standards or relevantinterpretations from 2023
□ Applicable √ Not applicable
41. 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 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. | 13%, 9%, 6%, 1% |
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, details will be disclosed
√ 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 |
Hangzhou CORRECTORS Trade Co., Ltd. | 20 |
Hangzhou Weiluoke Cosmetics Co., Ltd. | 20 |
Hanna Cosmetics Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in South Korea |
Hapsode Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in South Korea |
Hong Kong Keshi Trading Co., Ltd. | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Hong Kong Xinghuo Industry Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Hong Kong Wanyan Electronic Commerce Co., Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Hong Kong Zhongwen Electronic Commerce Co., Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Hong Kong Xuchen Trading Limited | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Boya (Hong Kong) Investment Management Co., Limited. | Relevant taxes are calculated and paid according to local tax regulations in Hong Kong, China |
Proya Europe SARL | Relevant taxes are calculated and paid according to local tax regulations in Luxembourg |
PROYA PTE. LTD | Relevant taxes are calculated and paid according to local tax regulations in Singapore |
PROYA BEAUTY MALAYSIA SDN. BHD | Relevant taxes are calculated and paid according to local tax regulations in Malaysia |
OR Off&Relax | 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 passed the high-tech enterprise review on December 8, 2023 and obtained the high-techenterprise certificate, which is valid for 3 years. The preferential period of corporate income tax is from2023 to 2025. The Company was subject to the enterprise income tax at the preferential rate of 15%during the Reporting Period.According to the Announcement of the Ministry of Finance and the State Taxation Administration onFurther Implementing Preferential Policies of Income Tax for Small and Micro Enterprises(Announcement No. 13 of 2022 of the Ministry of Finance and the State Taxation Administration) andthe Announcement on Preferential Policies of Income Tax for Small and Micro Enterprises andIndividual Industrial and Commercial Households (Announcement No. 6 of 2023 of the Ministry ofFinance and the State Taxation Administration), the subsidiaries Huzhou Niuke Technology Co., Ltd.,Xuzhou Laibo Information Technology Co., Ltd., Hangzhou CORRECTORS Trade Co., Ltd., andHangzhou Weiluoke Cosmetics Co., Ltd. meet the tax standards for small low-profit enterprises. Thus,the portion of taxable income not exceeding RMB1 million in the current period is reduced by 25% to beincluded in the taxable income and the enterprise income tax is paid by such subsidiaries at the rate of
20%, and the portion of taxable income exceeding RMB1 million but not exceeding RMB3 million inthe current period is also reduced by 25% to be included in the taxable income and the enterprise incometax is also paid by such subsidiaries at the rate of 20%.According to the Announcement of the Ministry of Finance and the State Taxation Administration onClarifying Policies for Value-Added Tax Reduction and Exemption for Small-Scale Taxpayers(Announcement No. 1 of 2023 of the Ministry of Finance and the State Taxation Administration), thesubsidiary Hangzhou Proya Commercial Management Co., Ltd. meets the conditions for generaltaxpayers engaging in the life service industry. From January 1, 2023 to December 31, 2023, thesubsidiary is allowed to offset the tax payable by an additional 5% of the deductible input tax amount forthe current period.
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 | 29,332.00 | 20,176.08 |
Cash at bank | 3,783,575,412.37 | 3,078,501,723.18 |
Other monetary capital | 227,480,813.70 | 82,481,185.79 |
Deposits with finance companies | ||
Total | 4,011,085,558.07 | 3,161,003,085.05 |
Including: Total cash deposited outside China | 79,895,831.50 | 73,162,153.00 |
Other explanationsAt the end of the period, bank deposits subject to restricted use included the fixed-term deposit ofRMB335,288,251.36, the transformer fixed-term deposit of RMB250,000.00, and the L/C deposit ofRMB8,800,000.00, ETC vehicle deposit of RMB70,000.00, Pinduoduo deposit of 5,298,890.00, and theTmall and Alipay deposits of RMB2,110,704.68 in other monetary capital.At the beginning 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 Pinduoduo deposit of RMB5,000,000.00, and the Tmall and Alipay deposits ofRMB350,000.00.
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 notyet due on the balance sheet date
□ Applicable √ Not applicable
(4). 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
Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of notes receivable with changes in provision for lossin the current period:
□ Applicable √ Not applicable
(5). Information on provisions for bad debts
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanations:
None
(6). Notes receivable actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important notes receivable:
□ Applicable √ Not applicable
Explanation on the write-off of notes receivable:
□ 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 | Ending book balance | Opening book balance |
Within 1 year | ||
Including: Sub-items within 1 year | ||
Within 1 year | 361,290,118.83 | 102,578,046.19 |
Sub-total within 1 year | 361,290,118.83 | 102,578,046.19 |
1-2 years | 1,358,203.20 | 3,828,412.88 |
2-3 years | 787,682.79 | 5,152,061.48 |
Above 3 years | 12,055,855.34 | 14,301,950.43 |
3-4 years | ||
4-5 years | ||
Above 5 years | ||
Total | 375,491,860.16 | 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 | 8,401,266.23 | 2.24 | 8,401,266.23 | 100.00 | 13,574,973.09 | 10.79 | 13,574,973.09 | 100.00 | ||
Including: | ||||||||||
Provision for bad debts accrued individually | 8,401,266.23 | 2.24 | 8,401,266.23 | 100.00 | 13,574,973.09 | 10.79 | 13,574,973.09 | 100.00 | ||
Provision for bad debts accrued by portfolio | 367,090,593.93 | 97.76 | 22,520,397.39 | 6.13 | 344,570,196.54 | 112,285,497.89 | 89.21 | 10,127,599.48 | 9.02 | 102,157,898.41 |
Including: | ||||||||||
Account age portfolio | 367,090,593.93 | 97.76 | 22,520,397.39 | 6.13 | 344,570,196.54 | 112,285,497.89 | 89.21 | 10,127,599.48 | 9.02 | 102,157,898.41 |
Total | 375,491,860.16 | / | 30,921,663.62 | / | 344,570,196.54 | 125,860,470.98 | / | 23,702,572.57 | / | 102,157,898.41 |
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 | 8,401,266.23 | 8,401,266.23 | 100.00 | Expected to be unrecoverable |
Total | 8,401,266.23 | 8,401,266.23 | 100.00 | / |
Explanation on 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 (%) | |
Account age portfolio | 367,090,593.93 | 22,520,397.39 | 6.13 |
Total | 367,090,593.93 | 22,520,397.39 | 6.13 |
Explanation on provision for bad debts accrued by portfolio:
√ Applicable □ Not applicable
Account age | Ending amount | ||
Carrying amount | Provision for bad debts | Accrual ratio (%) | |
Within 1 year | 361,290,118.83 | 18,064,505.92 | 5.00 |
1-2 years | 1,358,203.20 | 407,460.96 | 30.00 |
2-3 years | 787,682.79 | 393,841.40 | 50.00 |
Above 3 years | 3,654,589.11 | 3,654,589.11 | 100.00 |
Subtotal | 367,090,593.93 | 22,520,397.39 | 6.13 |
Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of accounts receivable with changes in provision forloss in the current period:
□ Applicable √ Not applicable
(3). Information on provisions for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Opening balance | Amount of changes in the current period | Ending balance | |||
Accrual | Withdrawal or write-back | Charge-off or write-off | Other changes | |||
Provision for bad debts accrued individually | 13,574,973.09 | 124,369.15 | 289,706.45 | 5,008,369.56 | 8,401,266.23 | |
Provision for bad debts accrued by portfolio | 10,127,599.48 | 13,254,766.42 | 861,968.51 | 22,520,397.39 | ||
Total | 23,702,572.57 | 13,379,135.57 | 289,706.45 | 5,870,338.07 | 30,921,663.62 |
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanations:
None
(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 | 5,870,338.07 |
Among them, information on accounts receivable significantly written off
□ Applicable √ Not applicable
Explanation on the write-off of the account receivable:
□ Applicable √ Not applicable
(5). Accounts receivable and contract assets of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Company name | Balance of accounts receivable at the end of the period | Balance of contract assets at the end of the period | Balance of accounts receivable and contract assets at the end of the period | Proportion of total balance of accounts receivable and contract assets at the end of the period (%) | Ending balance of provision for bad debts |
Beijing Jingdong Century Trading Co., Ltd. | 318,502,679.98 | 318,502,679.98 | 84.82 | 15,925,134.00 | |
Vipshop (China) Co., Ltd. | 21,478,514.58 | 21,478,514.58 | 5.72 | 1,073,925.73 | |
Zhejiang Haochao Network Technology Co., Ltd. | 3,779,622.99 | 3,779,622.99 | 1.01 | 188,981.15 | |
BOTANIERA (Hangzhou) Health Technology Co., Ltd. | 3,622,381.28 | 3,622,381.28 | 0.96 | 181,119.06 | |
Hangzhou Zhishang Technology Co., Ltd. | 3,199,647.18 | 3,199,647.18 | 0.85 | 254,859.68 | |
Total | 350,582,846.01 | 350,582,846.01 | 93.36 | 17,624,019.62 |
Other explanationsNone
Other explanations:
□ Applicable √ Not applicable
6. Contract assets
(1). Description of contract assets
□ Applicable √ Not applicable
(2). Amount of and reasons for significant changes in carrying amount during the ReportingPeriod
□ Applicable √ Not applicable
(3). Disclosed by the classification of bad debt accrual method
□ Applicable √ Not applicable
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Explanation on provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of contract assets with changes in provision for lossin the current period:
□ Applicable √ Not applicable
(4). Provision for bad debts of contract assets accrued in the current period
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanations:
None
(5). Contract assets actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important contract assets:
□ Applicable √ Not applicable
Explanation on write-off of contract assets:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
7. Receivable financing
(1). Presentation of receivable financing by category
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Bank acceptance bills | 7,378,700.06 | |
Total | 7,378,700.06 |
(2). Receivable financing pledged by the Company at the end of the period
□ Applicable √ Not applicable
(3). Receivable financing endorsed or discounted by the Company at the end of the period andnot yet due on the balance sheet date
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount derecognized at the end of the period | Amount not derecognized at the end of the period |
Bank acceptance bills | 600,000.00 | |
Total | 600,000.00 |
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 notes is overdue, the Company will be still jointly and severally liable tothe holder according to the Negotiable Instruments Law.
(4). 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 | ||||||||||
Including: | ||||||||||
Provision for bad debts accrued by portfolio | 7,378,700.06 | 100.00 | 7,378,700.06 | |||||||
Including: | ||||||||||
Bank acceptance bills | 7,378,700.06 | 100.00 | 7,378,700.06 | |||||||
Total | 7,378,700.06 | / | / | 7,378,700.06 | / | / |
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Explanation on provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of receivable financing with changes in provision forloss in the current period:
□ Applicable √ Not applicable
(5). Information on provisions for bad debts
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanations:
None
(6). Receivable financing actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important receivable financing:
□ Applicable √ Not applicable
Explanation on write-off of receivable financing:
□ Applicable √ Not applicable
(7). Changes in the current period of receivables financing and changes in fair value:
□ Applicable √ Not applicable
(8). Other explanations:
□ Applicable √ Not applicable
8. Prepayments
(1). Prepayments are presented by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age | Ending balance | Opening balance | ||
Amount | Percentage (%) | Amount | Percentage (%) | |
Within 1 year | 200,521,100.41 | 98.84 | 88,898,806.55 | 97.18 |
1-2 years | 1,427,668.59 | 0.70 | 1,696,085.16 | 1.85 |
2-3 years | 383,035.66 | 0.19 | 829,263.44 | 0.91 |
Above 3 years | 538,390.92 | 0.27 | 59,368.00 | 0.06 |
Total | 202,870,195.58 | 100.00 | 91,483,523.15 | 100.00 |
Explanation on reasons for prepayments with an account age of more than one year and a significantamount are not settled in time:
None
(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] | 57,138,476.76 | 28.17 |
Wuhan Juliang Xingtu Technology Co., Ltd. [Note 2] | 34,771,709.17 | 17.14 |
Guangxi Jingdong Qingchuan E-commerce Co., Ltd. [Note 3] | 29,688,880.41 | 14.63 |
Shanghai Boguan Ruisi Media Technology Co., Ltd. | 12,671,442.01 | 6.25 |
Shanghai Zhuiji Information Technology Co., Ltd. | 9,140,806.81 | 4.51 |
Total | 143,411,315.16 | 70.70 |
Other explanations[Note 1] The prepayments are the consolidated statistics of Hangzhou Alimama Software Service Co.,Ltd. and Zhejiang Alibaba Communication Technology Co., Ltd. under common control.[Note 2] The prepayments are the consolidated statistics of Hubei Juliang Engine Technology Co., Ltd.and Wuhan Juliang Xingtu Technology Co., Ltd. under common control.[Note 3] The prepayments are the consolidated statistics of Guangxi Jingdong Qingchuan E-commerceCo., Ltd. and Chongqing Jingdong Haijia e-commerce Co., Ltd.. under common control.
Other explanations
□ Applicable √ Not applicable
9. Other receivables
Presentation by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Interest receivable | ||
Dividend receivable | ||
Other receivables | 81,966,213.90 | 73,564,083.63 |
Total | 81,966,213.90 | 73,564,083.63 |
Other explanations:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ Applicable √ Not applicable
(2). Significant overdue interest
□ Applicable √ Not applicable
(3). Disclosed by the classification of bad debt accrual method
□ Applicable √ Not applicable
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Explanation on provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
(4). Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of interest receivable with changes in provision forloss in the current period:
□ Applicable √ Not applicable
(5). Information on provisions for bad debts
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanations:
None
(6). Interest receivable actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important interest receivable
□ Applicable √ Not applicable
Explanation on write-off of receivable financing:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Dividend receivable
(1). Dividend receivable
□ Applicable √ Not applicable
(2). Important dividends receivable with an account age of more than one year
□ Applicable √ Not applicable
(3). Disclosed by the classification of bad debt accrual method
□ Applicable √ Not applicable
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Explanation on provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
(4). Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of dividends receivable with changes in provision forloss in the current period:
□ Applicable √ Not applicable
(5). Information on provisions for bad debts
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanations:
None
(6). Dividends receivable actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important dividends receivable
□ Applicable √ Not applicable
Explanation on write-off of receivable financing:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Other receivables
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age | Ending book balance | Opening book balance |
Within 1 year | ||
Including: Sub-items within 1 year | ||
Within 1 year | 83,104,304.36 | 65,862,919.09 |
Sub-total within 1 year | 83,104,304.36 | 65,862,919.09 |
1-2 years | 3,463,981.21 | 19,331,287.17 |
2-3 years | 5,143,264.28 | 22,496,350.23 |
Above 3 years | 28,159,425.53 | 6,470,493.57 |
3-4 years | ||
4-5 years | ||
Above 5 years | ||
Total | 119,870,975.38 | 114,161,050.06 |
(2). Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Nature of payment | Ending book balance | Opening book balance |
Security deposits | 10,750,199.61 | 22,781,728.37 |
Suspense payment receivables | 105,147,206.95 | 90,500,345.08 |
Reserve funds | 620,596.53 | 552,985.89 |
Temporary loans | 3,000,000.00 | |
Other | 352,972.29 | 325,990.72 |
Total | 119,870,975.38 | 114,161,050.06 |
(3). Information on 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 of January 1, 2023 | 3,293,145.99 | 4,430,510.11 | 32,873,310.33 | 40,596,966.43 |
Balance as of January 1, 2023 in the current period | ||||
– Transferred into the second stage | -173,199.06 | 173,199.06 | ||
– Transferred into the 3rd stage | -355,402.74 | 355,402.74 | ||
– Transferred back to the second stage | ||||
– Transferred back to the first stage | ||||
Amount accrued in the current period | 1,035,268.26 | -3,209,112.07 | -518,361.14 | -2,692,204.95 |
Amount written back in the current period | ||||
Amount charged-off in the current period | ||||
Amount written off in the current period | ||||
Other changes | ||||
Balance as of December 31, 2023 | 4,155,215.19 | 1,039,194.36 | 32,710,351.93 | 37,904,761.48 |
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of other receivables with changes in provision for lossin the current period:
□ Applicable √ Not applicable
The amount of provision for bad debts in the current period and the basis for evaluating whether thecredit risk of financial instruments increases significantly:
□ Applicable √ Not applicable
(4). Information on provisions for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Opening balance | Amount of changes in the current period | Ending balance | |||
Accrual | Withdrawal or write-back | Charge-off or write-off | Other changes | |||
Provision for bad debts accrued individually | 25,821,363.11 | 382,862.44 | 26,204,225.55 | |||
Provision for bad debts accrued by portfolio | 14,775,603.32 | -3,075,067.39 | 11,700,535.93 | |||
Total | 40,596,966.43 | -2,692,204.95 | 37,904,761.48 |
Among them, significant amount of bad-debt provision written back or withdrawn in the current period:
□ Applicable √ Not applicable
Other explanationsNone
(5). Other receivables actually written off in the current period
□ Applicable √ Not applicable
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 | Ending balance | As a proportion of total ending balance in other receivables (%) | Nature of payment | Account age | Provision for bad debts Ending balance |
Beijing Youzhuju Network Technology Co., Ltd. | 58,826,562.99 | 49.07 | Suspense payment receivables | RMB58,801,562.99 with an account age within 1 year, and RMB25,000.00 with an account age of 2-3 years | 2,952,578.15 |
Zhejiang Tmall Technology Co., Ltd. | 18,463,296.17 | 15.40 | Suspense payment receivables | Within 1 year | 923,164.81 |
EURL PHARMATICA | 18,169,451.02 | 15.16 | Suspense payment receivables | Above 3 years | 18,169,451.02 |
SIKEROM EURPOE GMBH | 8,034,774.53 | 6.70 | Suspense payment receivables | Above 3 years | 8,034,774.53 |
Hangzhou Property Maintenance Fund Management Center | 4,708,614.72 | 3.93 | Security deposits | Above 3 years | 4,708,614.72 |
Total | 108,202,699.43 | 90.26 | / | / | 34,788,583.23 |
(7). Presented as other receivables due to centralized fund management
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
10. 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 | Carrying value | Carrying amount | Provision for devaluation of inventories/Impairment provision of contract performance cost | Carrying value | |
Raw materials | 64,320,795.95 | 10,411,607.57 | 53,909,188.38 | 80,114,114.87 | 1,703,611.59 | 78,410,503.28 |
Packaging | 54,811,928.32 | 4,460,418.42 | 50,351,509.90 | 42,300,426.18 | 1,016,137.11 | 41,284,289.07 |
Work in process | 22,883,723.89 | 252,167.47 | 22,631,556.42 | 18,952,830.41 | 134,093.52 | 18,818,736.89 |
Outsourcing gifts | 22,364,071.52 | 171,660.98 | 22,192,410.54 | 12,011,197.41 | 65,685.51 | 11,945,511.90 |
Inventory commodities | 725,768,386.69 | 88,209,742.39 | 637,558,644.30 | 546,279,426.61 | 37,780,598.48 | 508,498,828.13 |
Low-value consumables | 10,957,787.46 | 385,941.32 | 10,571,846.14 | 10,474,077.34 | 380,619.88 | 10,093,457.46 |
Total | 901,106,693.83 | 103,891,538.15 | 797,215,155.68 | 710,132,072.82 | 41,080,746.09 | 669,051,326.73 |
(2). Provision for devaluation of inventories and impairment provision of contractperformance cost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Increased amount in the current period | Decreased amount in the current period | Ending balance | ||
Accrual | Other | Write-back or charge-off | Other | |||
Raw materials | 1,703,611.59 | 9,254,051.84 | 546,055.86 | 10,411,607.57 | ||
Packaging | 1,016,137.11 | 4,393,756.45 | 949,475.14 | 4,460,418.42 | ||
Work in process | 134,093.52 | 250,947.19 | 132,873.24 | 252,167.47 | ||
Outsourcing gifts | 65,685.51 | 1,106,061.12 | 1,000,085.65 | 171,660.98 | ||
Inventory commodities | 37,780,598.48 | 91,647,961.79 | 41,218,817.88 | 88,209,742.39 | ||
Low-value consumables | 380,619.88 | 105,003.73 | 99,682.29 | 385,941.32 | ||
Total | 41,080,746.09 | 106,757,782.12 | 43,946,990.06 | 103,891,538.15 |
Reason for write-back or charge-off of provisions for devaluation of inventories in the current period
√ Applicable □ Not applicable
At the end of the current period, the net realizable value of some products was lower than theircorresponding cost, so the provision for devaluation of inventories was accrued based on the differencebetween the cost and the net realizable value; In the current period, the Company consumed, sold orscraped some of the inventories of which the Company had already accrued provisions for devaluation,so the provisions for devaluation was charged off in the current period.
Provision for devaluation of inventories accrued by portfolio
□ Applicable √ Not applicable
Accrual standards for provision for devaluation of inventories accrued by portfolio
□ Applicable √ Not applicable
(3). Capitalized amount of borrowing expenses included in ending balance of inventories andits calculation standard and basis
□ Applicable √ Not applicable
(4). Explanation on current amortization amount of contract performance cost
□ 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
Debt investments due within one year
□ Applicable √ Not applicable
Other debt investments due within one year
□ Applicable √ Not applicable
Other explanations on non-current assets due within one yearNone
13. Other current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Contract acquisition cost | ||
Return cost receivable | 9,190,580.83 | 8,782,156.33 |
Input VAT to be deducted | 90,306,570.44 | 36,944,213.35 |
Advance payment of taxes | 267,921.80 | 4,009,626.89 |
Total | 99,765,073.07 | 49,735,996.57 |
Other explanationsNone
14. Debt investments
(1). Information on debt investments
□ Applicable √ Not applicable
Changes in impairment provisions of debt investments in the current period
□ Applicable √ Not applicable
(2). Significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Information on accrual of impairment provisions
□ Applicable √ Not applicable
Classification basis and accrual ratio of impairment provisions for each stage:
None
Explanation on significant changes in book balance of debt investments with changes in provision for lossin the current period:
□ 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
(4). Information on debt investments actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important debt investments
□ Applicable √ Not applicable
Explanation on write-off of debt investments:
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
15. Other debt investments
(1). Information on other debt investments
□ Applicable √ Not applicable
Changes in impairment provisions of other debt investments in the current period
□ Applicable √ Not applicable
(2). Important other debt investments at the end of the period
□ Applicable √ Not applicable
(3). Information on accrual of impairment provisions
□ Applicable √ Not applicable
Classification basis and accrual ratio of impairment provisions for each stage:
None
Explanation on significant changes in book balance of other debt investments with changes in provisionfor loss in the current period:
□ 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
(4). Information on other debt investments actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important other debt investments
□ Applicable √ Not applicable
Explanation on write-off of other debt investments:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
16. Long-term receivables
(1). Information on long-term receivables
□ Applicable √ Not applicable
(2). Disclosed by the classification of bad debt accrual method
□ Applicable √ Not applicable
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Explanation on provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
(3). Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of long-term receivables with changes in provisionfor loss in the current period:
□ 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
(4). Information on provisions for bad debts
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanations:
None
(5). Information on long-term receivables actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important long-term receivables:
□ Applicable √ Not applicable
Explanation on the write-off of long-term receivables:
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
17. Long-term equity investments
(1). Information on 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 the equity method | Other comprehensi-ve income adjustments | Other changes in equity | Declared payment of cash dividends or profits | Impairment provision accrued | Other | ||||
I. Joint Venture | |||||||||||
Huzhou Panrui Industry Investment Partnership (Limited Partnership) | 3,068,948.16 | -8,956.25 | 3,059,991.91 | ||||||||
Subtotal | 3,068,948.16 | -8,956.25 | 3,059,991.91 | ||||||||
II. Affiliate | |||||||||||
Xiongke Culture Media (Hangzhou) Co., Ltd. | 2,649,619.70 | -31,784.81 | 2,617,834.89 | ||||||||
Jiaxing Woyong Investment Partnership (Limited Partnership) | 111,253,221.93 | 18,636,363.64 | -8,675,141.73 | -20,250,000.00 | 100,964,443.84 | ||||||
Zhuhai Haishilong Biotechnology Co., Ltd. | 10,576,298.67 | -8,175,090.89 | 2,401,207.78 | 81,442,213.22 | |||||||
Beijing Xiushi Cultural Development Co., Ltd. | 4,918,865.34 | -388,185.27 | 4,530,680.07 | ||||||||
Matis Information Technology (Guangzhou) Co., Ltd. | 6,066,423.66 | 6,066,423.66 | |||||||||
Subtotal | 135,464,429.30 | 18,636,363.64 | 6,066,423.66 | -17,270,202.70 | -20,250,000.00 | 110,514,166.58 | 81,442,213.22 | ||||
Total | 138,533,377.46 | 18,636,363.64 | 6,066,423.66 | -17,279,158.95 | -20,250,000.00 | 113,574,158.49 | 81,442,213.22 |
(2). Information on impairment testing of long-term equity investments
□ Applicable √ Not applicable
Other explanationsNone
18. Other equity instrument investments
(1). Information on other equity instrument investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current changes | Ending balance | Dividend income recognized in the current period | Accumulated gains recognized in other comprehensi-ve income | Accumulated losses recognized in other comprehensive income | Reason for other equity instrument investments designated as measured at fair value through other comprehensi-ve income | ||||
Additional investment | Investment decrease | Gains recognized in other comprehensi-ve income in the current period | Losses recognized in other comprehensi-ve income in the current period | Other | |||||||
Hangzhou Regenovo Bio-technology Co., Ltd. | 20,580,000.00 | 20,580,000.00 | Refer to “Other explanations” | ||||||||
LIPOTRUE,S.L. | 35,822,400.00 | 35,822,400.00 | Refer to “Other explanations” | ||||||||
Golong Holdings Co., Ltd. | 90,000,000.00 | -38,742,000.00 | 51,258,000.00 | -38,742,000.00 | Refer to “Other explanations” | ||||||
Total | 146,402,400.00 | -38,742,000.00 | 107,660,400.00 | -38,742,000.00 | / |
(2). Explanation on derecognition in the current period
□ Applicable √ Not applicable
Other explanations:
√ Applicable □ Not applicable
Reason for equity instrument investments designated as measured at fair value through other comprehensive incomeThe Company invests in equity for strategic investment purposes, and the investees will take the Company's investments as equity instruments. Therefore, theCompany designates such equity instrument investments 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 with the cost measurement mode
Unit: Yuan Currency: RMB
Item | Building and construction | Land use rights | Construction in progress | Total |
I. Original carrying value | ||||
1. Beginning balance | 78,781,143.26 | 78,781,143.26 | ||
2. Current increase | ||||
(1) Outsourcing | ||||
(2) Transfer-in of inventories, fixed assets, or construction in process | ||||
(3) Increase due to business combination | ||||
3. Current decrease | ||||
(1) Disposal | ||||
(2) Other transfer-out | ||||
4. Ending balance | 78,781,143.26 | 78,781,143.26 | ||
II. Accumulated depreciation and amortization | ||||
1. Beginning balance | 10,126,442.45 | 10,126,442.45 | ||
2. Current increase | 2,498,228.90 | 2,498,228.90 | ||
(1) Accrual or amortization | 2,498,228.90 | 2,498,228.90 | ||
3. Current decrease | ||||
(1) Disposal | ||||
(2) Other transfer-out | ||||
4. Ending balance | 12,624,671.35 | 12,624,671.35 | ||
III. Impairment provision | ||||
1. Beginning balance | ||||
2. Current increase | ||||
(1) Accrual | ||||
3. Current decrease | ||||
(1) Disposal | ||||
(2) Other transfer-out | ||||
4. Ending balance | ||||
IV. Carrying value | ||||
1. Ending carrying value | 66,156,471.91 | 66,156,471.91 | ||
2. Opening carrying value | 68,654,700.81 | 68,654,700.81 |
(2). Real estate held for investment with pending proprietorship certificate
□ Applicable √ Not applicable
(3). Information on impairment testing of investment real estate with the costmeasurement mode
□ 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 | 827,350,985.29 | 570,376,309.67 |
Disposal of fixed assets | ||
Total | 827,350,985.29 | 570,376,309.67 |
Other explanations:
□ Applicable √ Not applicable
Fixed assets
(1). Information on fixed assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Houses and buildings | General equipment | Dedicated equipment | Means of transportation | Total |
I. Original carrying value: | |||||
1. Beginning balance | 539,295,502.97 | 80,477,003.51 | 249,649,332.67 | 20,584,593.97 | 890,006,433.12 |
2. Current increase | 202,409,554.02 | 11,394,343.95 | 103,401,559.42 | 6,037,463.71 | 323,242,921.10 |
(1) Purchase | 9,613,663.30 | 11,847,662.98 | 6,037,463.71 | 27,498,789.99 | |
(2) Transfer-in of construction in process | 202,409,554.02 | 1,780,680.65 | 91,553,896.44 | 295,744,131.11 | |
(3) Increase due to business combination | |||||
3. Current decrease | 4,685,530.91 | 11,082,474.20 | 510,746.31 | 16,278,751.42 | |
(1) Disposal or scrapping | 4,685,530.91 | 11,082,474.20 | 510,746.31 | 16,278,751.42 | |
4. Ending balance | 741,705,056.99 | 87,185,816.55 | 341,968,417.89 | 26,111,311.37 | 1,196,970,602.80 |
II. Accumulated depreciation | |||||
1. Beginning balance | 127,549,692.50 | 41,778,273.41 | 133,987,291.36 | 16,314,866.18 | 319,630,123.45 |
2. Current increase | 21,550,471.57 | 10,992,033.33 | 24,581,637.89 | 3,356,409.23 | 60,480,552.02 |
(1) Accrual | 21,550,471.57 | 10,992,033.33 | 24,581,637.89 | 3,356,409.23 | 60,480,552.02 |
3. Current decrease | 946,981.73 | 10,457,692.86 | 423,915.63 | 11,828,590.22 |
(1) Disposal or scrapping | 946,981.73 | 10,457,692.86 | 423,915.63 | 11,828,590.22 | |
4. Ending balance | 149,100,164.07 | 51,823,325.01 | 148,111,236.39 | 19,247,359.78 | 368,282,085.25 |
III. Impairment provision | |||||
1. Beginning balance | |||||
2. Current increase | 1,337,532.26 | 1,337,532.26 | |||
(1) Accrual | 1,337,532.26 | 1,337,532.26 | |||
3. Current decrease | |||||
(1) Disposal or scrapping | |||||
4. Ending balance | 1,337,532.26 | 1,337,532.26 | |||
IV. Carrying value | |||||
1. Ending carrying value | 592,604,892.92 | 35,362,491.54 | 192,519,649.24 | 6,863,951.59 | 827,350,985.29 |
2. Opening carrying value | 411,745,810.47 | 38,698,730.10 | 115,662,041.31 | 4,269,727.79 | 570,376,309.67 |
(2). Information on temporarily idle fixed assets
□ Applicable √ Not applicable
(3). Fixed assets leased out through operating lease
□ Applicable √ Not applicable
(4). Information on fixed assets without property right certificate
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Carrying value | Reason for failure to obtain the property right certificate |
Expansion of Huzhou Production Base | 123,603,623.54 | The property right certificate is still being processed |
Longwu R&D Center | 77,580,055.84 | The property right certificate is still being processed |
Total | 201,183,679.38 |
(5). Information on impairment testing of fixed assets
√ Applicable □ Not applicable
The recoverable amount is determined based on the net amount after deducting disposalexpenses from fair value
□ Applicable √ Not applicable
Unit: Yuan Currency: RMB
Item | Carrying value | Recoverable amount | Impairment amount | Determination of fair value and disposal costs | Key parameter | Determination basis of key parameters |
Dedicated equipment | 1,337,532.26 | 1,337,532.26 | It is the equipment to be scrapped, with the estimated disposal value of RMB0 | |||
Total | 1,337,532.26 | 1,337,532.26 | / | / | / |
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable √ Not applicable
Reasons for significant discrepancies between the aforementioned information and theinformation used in previous years’ impairment tests or external information
□ Applicable √ Not applicable
Reasons for significant discrepancies between the information used in previous years’impairment tests of the Company and the actual situation of the current year
□ 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 | 52,038,642.94 | 207,378,935.86 |
Engineering materials | ||
Total | 52,038,642.94 | 207,378,935.86 |
Other explanations:
□ Applicable √ Not applicable
Construction in progress
(1). Information on construction in progress
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance | ||||
Carrying amount | Impairment provision | Carrying value | Carrying amount | Impairment provision | Carrying value | |
Huzhou Production Base Expansion Project (Phase I) | 24,853,830.82 | 24,853,830.82 | 141,886,053.44 | 141,886,053.44 |
Longwu R&D Center Construction Project | 8,377,199.03 | 8,377,199.03 | 34,804,789.71 | 34,804,789.71 | ||
Decoration engineering | 4,759,533.93 | 4,759,533.93 | 5,282,700.29 | 5,282,700.29 | ||
Information System Upgrade Project | 8,545,628.83 | 8,545,628.83 | 4,266,606.14 | 4,266,606.14 | ||
Makeup Factory | 14,323,636.47 | 14,323,636.47 | ||||
Other sporadic projects | 5,502,450.33 | 5,502,450.33 | 6,815,149.81 | 6,815,149.81 | ||
Total | 52,038,642.94 | 52,038,642.94 | 207,378,935.86 | 207,378,935.86 |
(2). Information on changes in important construction in progress projects in the currentperiod
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Budget | Opening balance | Increased amount in the current period | Amount of transfer to fixed assets in the current period | Amount of other decrease-s in the current period | Ending balance | Proportion of accum-ulated project invest-ment to budget (%) | Progres-s of works (%) | Accum-ulated amount of interest capitali-zation | Including: Amount of interest capitaliza-tion in the current period | Interest capitali-zation rate in the current period (%) | Source of funds |
Huzhou Production Base Expansion Project (Phase I) | RMB416.78million | 141,886,053.44 | 77,130,719.15 | 194,162,941.77 | 24,853,830.82 | 61.15 | 61.15 | 15,611,853.14 | 5,220,465.60 | 4.57 | Raised funds and self-owned funds | |
Longwu R&D Center Construction Project | RMB128.61million | 34,804,789.71 | 89,143,735.33 | 77,580,055.84 | 37,991,270.17 | 8,377,199.03 | 96.37 | 96.37 | 14,857,625.44 | 7,969,294.09 | 4.57 | Raised funds and self-owned funds |
Information System Upgrade Project | RMB112.40million | 4,266,606.14 | 10,963,788.53 | 1,780,680.65 | 4,904,085.19 | 8,545,628.83 | 13.55 | 13.55 | 5,338,134.02 | 2,702,091.44 | 4.57 | Raised funds and self-owned funds |
Makeup Factory | RMB66.11million | 14,323,636.47 | 84,955.75 | 14,408,592.22 | 43.45 | 100.00 | ||||||
Total | RMB723.90million | 195,281,085.76 | 177,323,198.76 | 287,932,270.48 | 42,895,355.36 | 41,776,658.68 | / | / | 35,807,612.60 | 15,891,851.13 | / | / |
[Note 1] Amount of other decreases in the current period of Longwu R&D Center Construction Projectwas incurred due to the partial transfer of decoration fees of lease houses to long-term deferred expenses[Note 2] Amount of decrease in the current period of the Information System Upgrade Project wasincurred due to the partial transfer of the Information System Upgrade Project to intangible assets orlong-term prepaid expenses upon completion
(3). Information on impairment provision of construction in progress accrued in thecurrent period
□ Applicable √ Not applicable
(4). Information on impairment testing of construction in progress
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
Engineering materials
(1). Information on engineering materials
□ Applicable √ Not applicable
23. Productive biological assets
(1). Productive biological assets with the cost measurement mode
□ Applicable √ Not applicable
(2). Information on impairment testing of productive biological assets with the costmeasurement mode
□ Applicable √ Not applicable
(3). Productive biological assets with fair value econometric mode
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
24. Oil and gas assets
(1) Information on oil and gas assets
□ Applicable √ Not applicable
(2) Information on impairment testing of oil and gas assets
□ Applicable √ Not applicable
Other explanations:
None
25. Right-of-use assets
(1) Information on right-of-use assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Houses and buildings | Total |
I. Original carrying value | ||
1. Beginning balance | 7,481,934.15 | 7,481,934.15 |
2. Current increase | 12,158,843.83 | 12,158,843.83 |
1) Lease-in | 12,158,843.83 | 12,158,843.83 |
3. Current decrease | ||
4. Ending balance | 19,640,777.98 | 19,640,777.98 |
II. Accumulated depreciation |
1. Beginning balance | 1,071,299.90 | 1,071,299.90 |
2. Current increase | 4,464,656.74 | 4,464,656.74 |
(1) Accrual | 4,464,656.74 | 4,464,656.74 |
3. Current decrease | ||
(1) Disposal | ||
4. Ending balance | 5,535,956.64 | 5,535,956.64 |
III. Impairment provision | ||
1. Beginning balance | ||
2. Current increase | ||
(1) Accrual | ||
3. Current decrease | ||
(1) Disposal | ||
4. Ending balance | ||
IV. Carrying value | ||
1. Ending carrying value | 14,104,821.34 | 14,104,821.34 |
2. Opening carrying value | 6,410,634.25 | 6,410,634.25 |
(2) Information on impairment testing of right-of-use assets
□ Applicable √ Not applicable
Other explanations:
None
26. Intangible assets
(1). Information on intangible assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Land use rights | Office software | Patent right | Non-patented technologies | Customer resources | Trademark rights | Total |
I. Original carrying value | |||||||
1. Beginning balance | 472,400,130.10 | 24,280,278.43 | 475,089.70 | 563,293.07 | 12,833,684.00 | 39,897,000.00 | 550,449,475.30 |
2. Current increase | 2,891,511.70 | 2,891,511.70 | |||||
(1) Purchase | 90,515.95 | 90,515.95 | |||||
(2) Internal R&D | |||||||
(3) Increase due to business combination | |||||||
(4) Transfer-in of | 2,800,995.75 | 2,800,995.75 |
construction in process | |||||||
3. Current decrease | 4,000.00 | 4,000.00 | |||||
(1) Disposal | 4,000.00 | 4,000.00 | |||||
4. Ending balance | 472,400,130.10 | 27,171,790.13 | 471,089.70 | 563,293.07 | 12,833,684.00 | 39,897,000.0 | 553,336,987.00 |
II. Accumulated amortization | |||||||
1. Beginning balance | 92,279,870.46 | 21,721,920.25 | 430,621.47 | 539,820.37 | 12,819,610.79 | 2,340,748.70 | 130,132,592.04 |
2. Current increase | 11,948,578.91 | 2,552,061.57 | 6,705.97 | 5,966.14 | 14,073.21 | 3,989,700.00 | 18,517,085.80 |
(1) Accrual | 11,948,578.91 | 2,552,061.57 | 6,705.97 | 5,966.14 | 14,073.21 | 3,989,700.00 | 18,517,085.80 |
3. Current decrease | 700.00 | 700.00 | |||||
(1) Disposal | 700.00 | 700.00 | |||||
4. Ending balance | 104,228,449.37 | 24,273,981.82 | 436,627.44 | 545,786.51 | 12,833,684.00 | 6,330,448.70 | 148,648,977.84 |
III. Impairment provision | |||||||
1. Beginning balance | |||||||
2. Current increase | |||||||
(1) Accrual | |||||||
3. Current decrease | |||||||
(1) Disposal | |||||||
4. Ending balance | |||||||
IV. Carrying value | |||||||
1. Ending carrying value | 368,171,680.73 | 2,897,808.31 | 34,462.26 | 17,506.56 | 33,566,551.30 | 404,688,009.16 | |
2. Opening carrying value | 380,120,259.64 | 2,558,358.18 | 44,468.23 | 23,472.70 | 14,073.21 | 37,556,251.30 | 420,316,883.26 |
At the end of the current period, the proportion of intangible assets formed through internal R&D of theCompany to the balance of intangible assets is 0.00%.
(2). Information on land use rights without the property ownership certificate
□ Applicable √ Not applicable
(3) Information on impairment testing of intangible assets
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
27. Goodwill
(1). Original carrying 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
Changes to the asset group or combination of asset groups
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(4). Specific methods for determining the recoverable amount
The recoverable amount is determined based on the net amount after deducting disposal expenses fromfair value
□ Applicable √ Not applicable
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable √ Not applicable
Reasons for significant discrepancies between the aforementioned information and the information usedin previous years’ impairment tests or external information
□ Applicable √ Not applicable
Reasons for significant discrepancies between the information used in previous years’ impairment testsof the Company and the actual situation of the current year
□ Applicable √ Not applicable
(5). Information on performance commitments and corresponding goodwill impairmentWhen goodwill is formed, there is a performance commitment and the reporting period or its previousperiod is within the performance commitment period
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
28. Long-term prepaid expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Increased amount in the current period | Amortized amount in the current period | Other decreased amount | Ending balance |
Renovation costs | 19,109,585.61 | 56,322,765.83 | 9,581,084.61 | 65,851,266.83 | |
Software service fees | 33,018.85 | 1,999,593.00 | 699,549.85 | 1,333,062.00 | |
Total | 19,142,604.46 | 58,322,358.83 | 10,280,634.46 | 67,184,328.83 |
Other explanations:
None
29. Deferred income tax assets or 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 | ||||
Provision for bad debts of accounts receivable | 22,142,965.55 | 5,533,579.62 | 14,181,029.90 | 3,545,098.74 |
Provision for devaluation of inventories | 82,737,837.07 | 15,220,065.94 | 24,366,081.72 | 4,518,122.80 |
Impact of share-based payments | 31,715,129.69 | 5,935,847.80 | 31,280,678.91 | 5,940,147.52 |
Unrealized profit from internal transactions | 159,567,947.59 | 39,891,986.91 | 42,025,801.32 | 10,506,450.33 |
Unused membership points | 127,713,129.39 | 31,928,282.35 | 83,272,601.46 | 20,818,150.36 |
Government subsidies pertinent to assets | 6,383,359.33 | 957,503.90 | 6,399,811.33 | 959,971.70 |
Anticipated return losses | 6,686,117.43 | 1,671,529.37 | 4,541,544.48 | 1,135,386.12 |
Estimated unused gifts for sold products | 50,074,244.87 | 12,518,561.21 | ||
Interest expenses on convertible bonds | 1,321,312.76 | 198,196.91 | ||
Lease expenses | 13,940,366.98 | 2,139,203.47 | 449,832.92 | 67,474.94 |
Advertising and business promotion expenses | 10,339,382.64 | 2,584,845.66 | 3,258,145.25 | 814,536.31 |
Accrued expenses | 14,451,922.15 | 2,914,846.09 | ||
Changes in the fair value of other equity instrument investments | 38,742,000.00 | 5,811,300.00 | ||
Total | 565,815,715.45 | 127,305,749.23 | 209,775,527.29 | 48,305,338.82 |
(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 | 110,300,243.62 | 16,649,225.12 | 126,101,620.56 | 19,019,431.67 |
Deferred income tax recognized on right-of-use assets | 14,104,821.34 | 2,162,159.51 | ||
Total | 124,405,064.96 | 18,811,384.63 | 126,101,620.56 | 19,019,431.67 |
(3). Deferred income tax assets or liabilities presented in net amount after offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Deferred income tax assets and liabilities offset at the end of the period | Ending balance of deferred income tax assets or liabilities after offset | Deferred income tax assets and liabilities offset at the beginning of the period | Opening balance of deferred income tax assets or liabilities after offset |
Deferred income tax assets | 18,811,384.63 | 108,494,364.60 | 48,305,338.82 | |
Deferred income tax liabilities | 18,811,384.63 | 19,019,431.67 |
(4). Details of unrecognized deferred income tax assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Deductible temporary difference | 200,424,961.81 | 218,452,946.39 |
Deductible losses | 414,387,984.35 | 393,391,257.51 |
Total | 614,812,946.16 | 611,844,203.90 |
(5). Deductible loss of unrecognized deferred income tax assets will expire in the followingyears
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Year | Ending balance | Beginning balance | Remarks |
2023 | 44,562,908.90 | ||
2024 | 71,058,103.62 | 89,520,734.89 | |
2025 | 61,988,728.89 | 66,686,117.23 |
2026 | 53,623,347.32 | 63,349,129.45 | |
2027 | 127,093,665.49 | 129,272,367.04 | |
2028 | 100,624,139.03 | ||
Total | 414,387,984.35 | 393,391,257.51 | / |
Other explanations:
□ Applicable √ Not applicable
30. Other non-current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance | ||||
Carrying amount | Impairment provision | Carrying value | Carrying amount | Impairment provision | Carrying value | |
Contract acquisition cost | ||||||
Contract performance cost | ||||||
Return cost receivable | ||||||
Contract assets | ||||||
Funds prepaid for purchase of long-term assets | 8,775,522.84 | 8,775,522.84 | ||||
Other long-term assets | 8,199,424.15 | 8,199,424.15 | 5,554,726.06 | 5,554,726.06 | ||
Total | 16,974,946.99 | 16,974,946.99 | 5,554,726.06 | 5,554,726.06 |
Other explanations:
None
31. Assets with limited ownership or use rights
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending | Opening | ||||||
Carrying amount | Carrying value | Type of restrictions | Description | Carrying amount | Carrying value | Type of restrictions | Description | |
Cash and cash equivalents | 351,817,846.04 | 351,817,846.04 | Other | Note 1 | 35,670,000.00 | 35,670,000.00 | Frozen | Note 2 |
Accounts receivable | ||||||||
Invento |
ries | ||||||||
Fixed assets | ||||||||
Intangible assets | ||||||||
Total | 351,817,846.04 | 351,817,846.04 | / | / | 35,670,000.00 | 35,670,000.00 | / | / |
Note 1: It includes fixed-term deposits of RMB335,288,251.36 that cannot be withdrawn at any time,and frozen monetary funds of RMB16,529,594.68, including: the L/C deposit of RMB8,800,000.00, thetransformer deposit of RMB250,000.00, ETC vehicle deposit of RMB70,000.00, Pinduoduo deposit ofRMB5,298,890.00, and the direct-sales store deposit of RMB2,110,704.68.Note 2: It includes the transformer deposit of RMB250,000.00, ETC vehicle deposit of RMB70,000.00,Pinduoduo deposit of RMB5,000,000.00, and the direct-sales store deposit of RMB350,000.00.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 |
Pledged borrowings | ||
Mortgaged borrowings | ||
Guaranteed borrowings | ||
Credit loans | 200,155,555.56 | 200,195,890.41 |
Total | 200,155,555.56 | 200,195,890.41 |
Explanation on classification of short-term borrowingsNone
(2). Information on 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
Other explanations:
□ 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 |
Commercial acceptance bills | ||
Bank acceptance bills | 36,959,074.14 | 69,626,352.12 |
Total | 36,959,074.14 | 69,626,352.12 |
The amount of notes payable due and unpaid at the end of this period is RMB0.00. The reason for failureto pay is that such notes do not exist.
36. Accounts payable
(1). Presentation of accounts payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Payment for goods | 524,325,866.69 | 252,113,782.78 |
Expenses | 422,130,510.68 | 213,566,905.71 |
Payment for acquisition of long-term assets | 72,065,981.23 | 9,746,795.74 |
Total | 1,018,522,358.60 | 475,427,484.23 |
(2). Important accounts payable with an account age of more than one year or overdue
□ 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 | 30,514.45 | 464,328.26 |
Total | 30,514.45 | 464,328.26 |
(2). Important receipts in advance with an account age of more than one year
□ Applicable √ Not applicable
(3). Amount of and reasons for significant changes in carrying amount during the ReportingPeriod
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
38. Contract liabilities
(1). Information on contract liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Advance receipt of payment for goods | 116,005,079.06 | 83,234,612.24 |
Unused membership points | 134,935,549.65 | 91,368,221.67 |
Unused gifts for sold products | 50,074,244.87 |
Total | 301,014,873.58 | 174,602,833.91 |
(2). Important contract liabilities with an account age of more than one year
□ Applicable √ Not applicable
(3). Amount of and reasons for significant changes in carrying amount during theReporting 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 | 124,278,743.01 | 713,532,993.76 | 672,990,610.04 | 164,821,126.73 |
II. Post-employment benefits – Defined contribution plans | 660,006.35 | 22,525,305.34 | 22,200,906.95 | 984,404.74 |
III. Dismissal benefits | 3,252,390.82 | 2,613,427.86 | 638,962.96 | |
IV. Other benefits due within one year | ||||
Total | 124,938,749.36 | 739,310,689.92 | 697,804,944.85 | 166,444,494.43 |
(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 | 123,139,326.87 | 650,994,994.44 | 611,956,277.51 | 162,178,043.80 |
II. Welfare expense of employee | 26,617,247.44 | 26,617,247.44 | ||
III. Social insurance premium | 764,855.85 | 15,244,969.41 | 13,835,210.62 | 2,174,614.64 |
Including: Medical insurance premium | 747,556.58 | 14,300,711.60 | 12,909,467.01 | 2,138,801.17 |
Work-related injury insurance premium | 13,253.30 | 913,366.91 | 893,997.66 | 32,622.55 |
Maternity insurance premium | 4,045.97 | 30,890.90 | 31,745.95 | 3,190.92 |
IV. Housing provident fund | 374,560.29 | 16,192,604.20 | 16,098,696.20 | 468,468.29 |
V. Trade union fund and staff education fund | 4,483,178.27 | 4,483,178.27 | ||
VI. Short-term paid leave | ||||
VII. Short-term profit sharing plan | ||||
Total | 124,278,743.01 | 713,532,993.76 | 672,990,610.04 | 164,821,126.73 |
(3). Presentation by defined contribution plan
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance |
1. Basic endowment insurance | 637,429.90 | 21,749,419.31 | 21,435,853.57 | 950,995.64 |
2. Unemployment insurance | 22,576.45 | 775,886.03 | 765,053.38 | 33,409.10 |
3. Enterprise annuity payment | ||||
Total | 660,006.35 | 22,525,305.34 | 22,200,906.95 | 984,404.74 |
Other explanations:
□ Applicable √ Not applicable
40. Taxes payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Enterprise income tax | 127,005,079.31 | 111,162,751.37 |
Value-added tax (VAT) | 71,556,095.69 | 27,112,038.46 |
Consumption tax | ||
Income tax | ||
Urban maintenance and construction tax | 7,644,618.17 | 1,288,999.75 |
Property tax | 6,734,175.81 | 6,689,657.49 |
Education surcharge | 4,287,830.76 | 1,003,854.07 |
Surcharge for local education | 2,866,440.40 | 619,094.66 |
Withholding of personal income tax | 1,867,193.08 | 4,226,657.07 |
Stamp duties | 804,436.72 | 796,591.64 |
Disabled security fund | 19,226.94 | |
Total | 222,765,869.94 | 152,918,871.45 |
Other explanations:
None
41. Other payables
(1). Presentation by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Interest payable | ||
Dividends payable | ||
Other payables | 155,345,148.68 | 216,392,183.41 |
Total | 155,345,148.68 | 216,392,183.41 |
Other explanations:
□ Applicable √ Not applicable
(2). Interest payable
Presentation by category
□ Applicable √ Not applicable
Important overdue interest payable:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
(3). Dividends payable
Presentation by category
□ Applicable √ Not applicable
(4). Other payables
Other payables presented by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Security deposits | 41,092,318.36 | 46,394,144.19 |
Restricted share repurchase obligations | 107,884,296.66 | 164,976,000.00 |
Other | 6,368,533.66 | 5,022,039.22 |
Total | 155,345,148.68 | 216,392,183.41 |
Important other payables with an account age of more than one year or overdue
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Reason for failure to repay or carry forward |
Restricted share repurchase obligations | 107,884,296.66 | Restricted share repurchase obligations have not been fulfilled yet |
Total | 107,884,296.66 | / |
Other explanations:
□ Applicable √ Not applicable
42. Held-for-sale liabilities
□ Applicable √ Not applicable
43. Non-current liabilities due within one year
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Long-term borrowings due within one year | ||
Bonds payable due within one year | ||
Long-term payables due within one year | ||
Lease liabilities due within one year | 3,970,060.11 | 2,549,452.14 |
Total | 3,970,060.11 | 2,549,452.14 |
Other explanations:
None
44. Other current liabilities
Information on 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 | 15,022,173.42 | 10,820,499.59 |
Total | 15,022,173.42 | 10,820,499.59 |
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:
□ Applicable √ Not applicable
46. Bonds payable
(1). Bonds payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Convertible corporate bonds | 753,119,902.88 | 724,491,557.93 |
Total | 753,119,902.88 | 724,491,557.93 |
(2). Specific information on bonds payable (excluding other financial instruments such as preferred shares and perpetual bonds classified as financialliabilities):
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Bonds Name | Face value | Coupon rate (%) | 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 | Default or not |
Proya Convertible Bond | 100.00 | 0.5 | December 8, 2021 | 6 years | 751,713,000.00 | 724,491,557.93 | 4,000,219.29 | 28,522,197.85 | 3,753,950.00 | 140,122.09 | 753,119,902.88 | No | |
Total | / | / | / | / | 751,713,000.00 | 724,491,557.93 | 4,000,219.29 | 28,522,197.85 | 3,753,950.00 | 140,122.09 | 753,119,902.88 | / |
(3). Explanation on convertible corporate bonds
√ Applicable □ Not applicable
Item | Share conversion conditions | Share conversion time |
Proya Convertible Bond | With the approval of the CSRC, namely, the Reply on Approving Proya Cosmetics Co., Ltd.’s Public Issuance of Convertible Corporate Bonds (CSRC Approval [2021] No. 3408), the Company publicly issued 7,517,130 convertible bonds to non-specific targets on December 8, 2021, each bond with a face value of RMB 100.00. The total amount of issuance is RMB751,713,000.00. The coupon rate of the aforesaid convertible corporate bonds is 0.30% for the first year, 0.50% for the second year, 1.00% for the 3rd year, 1.50% for the fourth year, 1.80% for the fifth year and 2.00% for the sixth year. Annual interest payment dates are anniversaries of the date of initial offering of convertible bonds. The Company will, no later than five trading days after the interests payment day of each year, pay the interests of the year and, no later than five trading days after the maturity date of convertible corporate bonds, redeem all unconverted convertible bonds from investors at a price of 115% of the par value of the convertible bonds issued that 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 six months from the issuance date of convertible bonds until the maturity date of convertible bonds. The initial conversion price is RMB195.98/share, in no case, lower than the average trading price of A shares of the Company in the twenty trading days prior to the publication of the prospectus (if the stock price is adjusted for ex-dividend or ex-dividend in the twenty trading days, the closing price of the trading day before 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 is not adjusted up. Due to the implementation of the equity distribution plan and the repurchase and cancellation of some equity incentive restricted shares by the Company, according to the relevant provisions of the Prospectus of Proya Cosmetics Co., Ltd. for Public Issuance of A-share Convertible Corporate Bonds and the relevant provisions of the CSRC on the issuance of convertible corporate bonds, the conversion price of Proya convertible bonds was adjusted from RMB195.98/share to RMB98.25/share, and the adjusted price took effect on December 18, 2023. | June 14, 2022 to December 7, 2027 |
Accounting treatment and judgment basis of share conversion rights
√ Applicable □ Not applicable
In the current period, a total of 1,480 convertible corporate bonds were converted, with an increase of RMB1,121.00 in capital stock, an increase of RMB148,524.61in capital reserve (capital stock premium), and a decrease of RMB9,523.52 in other equity instruments.
(4). Explanation on other financial instruments classified as financial liabilitiesBasic information on other financial instruments such as preferred shares and perpetual bonds issued at the end of the period
□ Applicable √ Not applicable
Statement of changes in financial instruments such as preferred shares and perpetual bonds issued at the end 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 | 11,172,403.17 | 3,814,629.83 |
Unrecognized financing expenses | -1,202,096.30 | -96,510.42 |
Total | 9,970,306.87 | 3,718,119.41 |
Other explanations:
None
48. Long-term payable
Presentation by item
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Long-term payable
(1). Long-term payables presented by nature
□ Applicable √ Not applicable
Special accounts payable
(1). 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 | 59,282,928.68 | 33,063,299.45 | Estimated future potential return losses |
Other | |||
Total | 59,282,928.68 | 33,063,299.45 | / |
Other particulars, including the particulars on key assumptions and estimates concerning estimatedsignificant liabilitiesNone
51. Deferred income
Information on deferred income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance | Cause of formation |
Government subsidies | 6,399,811.33 | 2,062,638.00 | 2,079,090.00 | 6,383,359.33 | Government subsidies |
Total | 6,399,811.33 | 2,062,638.00 | 2,079,090.00 | 6,383,359.33 | / |
Other explanations:
□ Applicable √ Not applicable
52. Other non-current liabilities
□ Applicable √ Not applicable
53. Share capital
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening balance | Increase or decrease in the change (+, -) | Ending balance | |||||
Issuance of shares | Bonus shares | Provident fund Share conversion | Other | Subtotal | |||
Total shares | 283,519,469 | -171,542 | 113,408,136 | 1,121 | 113,237,715 | 396,757,184 |
Other explanations:
According to the resolution of the 11th meeting of the 3rd session of Board of Directors, the resolutionof the 13th meeting of the 3rd session of Board of Directors, the resolution of the 2022 annual GeneralMeeting of Shareholders, the resolution of the First Extraordinary General Meeting of Shareholders in2023 and the revised articles of association of the Company, the Company applied for an increase inregistered capital of RMB113,408,136.00, which is increased from capital reserve. The base date ofincrease is the registration date of implementing equity distribution, and the registered capital afterchange is RMB396,927,605.00. The above matter has been verified by Pan-China Certified PublicAccountants LLP (Special General Partnership) which has issued the Capital Verification Report (TJY(2023) No. 551).According to the resolution of the 12th meeting of the 3rd session of Board of Directors, the resolutionof the 13th meeting of the 3rd session of Board of Directors, the resolution of the First ExtraordinaryGeneral Meeting of Shareholders in 2023 and the revised articles of association of the Company, theCompany applied for cash repurchase of 105,350 restricted RMB ordinary shares (A shares) granted butnot yet released, and paid a total share repurchase amount of RMB5,846,187.54, of whichRMB105,350.00 was reduced in share capital and RMB5,740,837.54 was reduced in capital reserve(equity premium). The above matter has been verified by Pan-China Certified Public Accountants LLP(Special General Partnership) which has issued the Capital Verification Report (T.J.Y. (2023) No. 552).According to the resolution of the 15th meeting of the 3rd session of Board of Directors and theresolution of the 14th meeting of the 3rd session of Board of Supervisors of the Company in 2023, theCompany applied for cash repurchase of 66,192 restricted RMB ordinary shares (A shares) granted butnot yet released, and paid a total share repurchase amount of RMB3,648,039.70, of whichRMB66,192.00 was reduced in share capital and RMB3,581,847.70 was reduced in capital reserve(equity premium). The above matter has been verified by Pan-China Certified Public Accountants LLP(Special General Partnership) which has issued the Capital Verification Report (T.J.Y. (2024) No.93).In the current period, a total of 1,480 convertible corporate bonds were converted, with an increase ofRMB1,121.00 in capital stock, an increase of RMB148,524.61 in capital reserve (capital stockpremium), and a decrease of RMB9,523.52 in other equity instruments.
54. Other equity instruments
(1). Basic information on other financial instruments such as preferred shares and perpetualbonds issued at the end of the period
□ Applicable √ Not applicable
(2). Statement of changes in financial instruments such as preferred shares and perpetualbonds issued at the end of the period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Information on changes of other equity instruments in the current period, explanation on reasons forchanges, and basis for relevant accounting treatment:
□ Applicable √ Not applicable
Other explanations:
√ Applicable □ Not applicable
In the current period, there was a decrease of RMB9,523.52 due to the current conversion of 1,480convertible corporate bonds into shares, with an increase of RMB1,121.00 in capital stock, an increaseof RMB148,524.61 in capital reserve (capital stock premium), and a decrease of RMB9,523.52 in otherequity instruments.
55. Capital reserve
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance |
Capital premium (Equity premium) | 858,188,638.87 | 51,289,781.41 | 126,433,214.30 | 783,045,205.98 |
Other capital reserve | 56,627,147.35 | 75,619,877.90 | 51,141,256.80 | 81,105,768.45 |
Total | 914,815,786.22 | 126,909,659.31 | 177,574,471.10 | 864,150,974.43 |
Other explanations, including the information on current changes and the explanation on reasons for thechanges:
1) Changes in capital premium
Capital reserve (capital stock premium) increased by RMB51,289,781.41 in the current period, of which:
① RMB148,524.61 was increased due to the current conversion of convertible corporate bonds intoshares. For relevant details, refer to the particulars contained in "46. Bonds payable", "VII. Notes to theItems of Consolidated Financial Statements", "Section X Financial Report" of this Report; ②RMB51,141,256.80 was increased due to the transfer of other capital reserves recognized during thewaiting period for the released portion of restricted shares issued by the equity incentive plan into capitalstock premium;Capital reserve (capital stock premium) decreased by RMB126,433,214.30, of which: ①RMB113,408,136.00 was decreased due to capitalization of capital reserves. For relevant details, refer to
Outstanding financial instruments | Opening | Current increase | Current decrease | Ending | ||||
Number | Carrying value | Number | Carrying value | Number | Carrying value | Number | Carrying value | |
Proya Convertible Bond | 7,509,370 | 50,903,510.12 | 1,480 | 9,523.52 | 7,507,890 | 50,893,986.60 | ||
Total | 7,509,370 | 50,903,510.12 | 1,480 | 9,523.52 | 7,507,890 | 50,893,986.60 |
the particulars contained in "53. Capital stock", "VII. Notes to the Items of Consolidated FinancialStatements", "Section X Financial Report" of this Report; ② RMB9,322,685.24 was decreased due tothe Company's cash repurchase of restricted RMB ordinary shares (A shares) granted but not yetreleased. For relevant details, refer to the particulars contained in "53. Capital stock", "VII. Notes to theItems of Consolidated Financial Statements", "Section X Financial Report" of this Report; ③RMB3,702,393.06 was decreased due to the difference between the payment for purchase of minorityequity of the subsidiary Huzhou Niuke Technology Co., Ltd. and the attributable share of identifiable netassets of the subsidiary calculated according to the newly increased shareholding ratio.
2) Changes in other capital reserves
Other capital reserve increased by RMB75,619,877.90 in the current period, of which: ①RMB104,825.19 was increased due to the deferred income tax assets accrued for the positive differencebetween the amount expected to be deducted before tax in the future period and the recognized restrictedstock incentive expenses, which is included in other capital reserves increased; ② RMB75,515,052.71was increased due to the incentive expenses of RMB75,515,052.71 for restricted shares in 2023recognized according to the Company's equity incentive plan, which are included in other capitalreserves.Other capital reserve decreased by RMB51,141,256.80 in the current period due to the transfer of othercapital reserves recognized during the waiting period for the released portion of restricted shares issuedby the equity incentive plan into capital stock premium.
56. Treasury stock
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance |
Restricted shares with repurchase obligation | 164,976,000.00 | 57,091,703.34 | 107,884,296.66 | |
Share repurchase | 39,082,438.95 | 39,082,438.95 | ||
Total | 164,976,000.00 | 39,082,438.95 | 57,091,703.34 | 146,966,735.61 |
Other explanations, including the information on current changes and the explanation on reasons for thechanges:
RMB39,082,438.95 was increased in the current period due to the Company's repurchase of sharesthrough centralized bidding trading with its own funds according to the Proposal on Repurchasing theCompany's Shares Through Centralized Bidding Trading, which was approved at the 17th meeting ofthe 3rd session of Board of Directors in December 13, 2023. As of December 31, 2023, the Companyhad cumulatively repurchased 395,980 shares of the Company through centralized bidding trading, witha total payment of RMB39,076,754.20 and the transaction costs of RMB5,684.75.RMB57,091,703.34 was decreased in the current period, of which: ① RMB2,570,682.80 wasdecreased since dividends allocated to restricted stocks that have not yet been released were offsetagainst treasury stocks and other payables were adjusted accordingly; ② RMB9,494,227.24 wasdecreased since the Company repurchased in form of cash 171,542 restricted RMB ordinary shares (Ashares) granted but not yet released. For relevant details, refer to Note V(I) 33 Capital stock herein; ③RMB45,026,793.30 was decreased since the Company released 811,398 restricted shares according tothe Proposal on Satisfying the Conditions for Release from Sales Restrictions in the First Release PeriodUnder 2022 Restricted Share Incentive Plan deliberated and approved at the 14th meeting of the 3rdsession of Board of Directors of the Company held on September 8, 2023 (the Company issued 0.40share for every 1 share to all shareholders through capital reserve in May 2023, resulting in a total of579,570 shares before the capital reserve was increased), and the grant price per share was RMB77.31after the deduction of the distributed cash dividends.
57. Other comprehensive income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening | 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 | balance | |
I. Other comprehensive income that will not be subsequently reclassified into profit and loss | -58,992,000.00 | -5,811,300.00 | -53,180,700.00 | -53,180,700.00 | ||||
Including: Changes arising from re-measurement of defined benefit plans | ||||||||
Other comprehensive income that can't be reversed through profit and loss under the equity method | -20,250,000.00 | -20,250,000.00 | -20,250,000.00 | |||||
Changes in the fair value of other equity instrument investments | -38,742,000.00 | -5,811,300.00 | -32,930,700.00 | -32,930,700.00 | ||||
Changes in the fair value of enterprise’s own credit risk | ||||||||
II. Other comprehensive income that will be reclassified into profit or loss | -1,918,603.07 | 1,252,202.16 | 1,252,202.16 | -666,400.91 | ||||
Including: Other comprehensive income that will be reclassified to profit or loss under the equity method | ||||||||
Changes in the fair value of other debt investments | ||||||||
Amount of financial assets reclassified into other comprehensive income |
Credit impairment provision of other debt investments | ||||||||
Cash flow hedge reserve | ||||||||
Difference from translation of financial statements in foreign currency | -1,918,603.07 | 1,252,202.16 | 1,252,202.16 | -666,400.91 | ||||
Total other comprehensive income | -1,918,603.07 | -57,739,797.84 | -5,811,300.00 | -51,928,497.84 | -53,847,100.91 |
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 | 141,759,734.50 | 56,651,848.00 | 198,411,582.50 | |
Discretionary surplus reserve | ||||
Reserve fund | ||||
Enterprise development fund | ||||
Other | ||||
Total | 141,759,734.50 | 56,651,848.00 | 198,411,582.50 |
Explanation on surplus reserves, including the current changes and the explanation on the reasons for thechanges:
RMB56,651,848.00 was increased in the current period due to the withdrawal of statutory surplusreserve according to the net profit of the parent company. The statutory surplus reserve does not need tobe withdrawn if the cumulative amount reaches 50% or more of the registered capital.
60. Undistributed profits
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Current period | Prior period |
Undistributed profit at the end of previous period before adjustment | 2,300,384,763.19 | 1,696,978,064.52 |
Total undistributed profit at the beginning of the adjustment period (+ for increase, - for decrease) | ||
Unappropriated earnings at the beginning of the period after adjustment | 2,300,384,763.19 | 1,696,978,064.52 |
Add: Net profit attributable to the owner of the parent company in the current period | 1,193,868,141.81 | 817,400,223.93 |
Less: Withdrawal of statutory surplus reserve | 56,651,848.00 | 41,124,954.50 |
Withdrawal of any surplus reserves | ||
Withdrawal of general risk provision | ||
Dividends payable on common stock | 397,455,566.41 | 172,868,570.76 |
Common stock dividends converted to share capital | ||
Undistributed profit at the end of the period | 3,040,145,490.59 | 2,300,384,763.19 |
According to the Resolution of the 2022 annual General Meeting of Shareholders of the Company, theCompany distributed cash dividends of RMB8.70 (tax inclusive) per 10 shares to all shareholders basedon the total share capital of 283,520,339 shares registered on the registration date of dividend-payingequity, totaling RMB246,662,694.93 (tax inclusive).According to the Resolution of the First Extraordinary General Meeting of Shareholders of the Companyin 2023, the Company distributed cash dividends of RMB3.80 (tax inclusive) per 10 shares to allshareholders based on the total share capital of 396,823,346 shares registered on the registration date ofdividend-paying equity, totaling RMB150,792,871.48 (tax inclusive).Details of the adjustment of the undistributed profit at the beginning of the period:
1. The undistributed profit affected by the retroactive adjustment in accordance with AccountingStandards for Business Enterprises and its related new regulations at the beginning of the period isRMB0.00.
2. The undistributed profit affected by the change of accounting policy at the beginning of the period isRMB0.00.
3. The undistributed profit affected by the correction of major accounting errors at the beginning of theperiod is RMB0.00.
4. The undistributed profit affected by the change of combination scope caused by 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 costs
(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 | 8,890,227,788.97 | 2,666,864,872.50 | 6,361,763,550.69 | 1,916,352,535.29 |
Other business | 14,345,712.42 | 10,580,834.11 | 23,687,873.31 | 18,497,668.36 |
Total | 8,904,573,501.39 | 2,677,445,706.61 | 6,385,451,424.00 | 1,934,850,203.65 |
(2). Breakdown of operating revenue and costs
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
(5). Significant contract changes or significant transaction price adjustments
□ Applicable √ Not applicable
Other explanations:
Breakdown of revenue
1) Breakdown of income generated from contracts with clients by goods or service type
Item | Amount for the current period | Amount for the same period last year | ||
Revenue | Cost | Revenue | Cost | |
Products sales | 8,890,227,788.97 | 2,666,864,872.50 | 6,363,192,536.17 | 1,920,643,747.84 |
Other | 14,345,712.42 | 10,580,834.11 | 22,258,887.83 | 14,206,455.81 |
Subtotal | 8,904,573,501.39 | 2,677,445,706.61 | 6,385,451,424.00 | 1,934,850,203.65 |
2) Breakdown of income generated from contracts with clients 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 | 8,901,828,883.95 | 6,383,224,182.76 |
Income recognized in a certain period | 2,744,617.44 | 2,227,241.24 |
Subtotal | 8,904,573,501.39 | 6,385,451,424.00 |
3) Revenue recognized in the current period and included in the beginning carrying value of contractliabilities is RMB174,418,612.87.
62. Taxes and surcharges
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Income tax | ||
Urban maintenance and construction tax | 43,276,504.94 | 25,692,368.39 |
Education surcharge | 21,357,013.35 | 12,641,385.47 |
Surcharge for local education | 14,122,981.38 | 8,447,813.01 |
Stamp duties | 3,999,013.74 | 2,921,661.26 |
Property tax | 7,672,905.13 | 6,663,485.15 |
Consumption tax | 186,353.52 | 14,370.78 |
Vehicle and vessel use tax | 35,456.20 | 10,724.88 |
Cultural undertaking construction tax | 5,528.94 | 2,700.00 |
Resource tax | ||
Land use tax | ||
Total | 90,655,757.20 | 56,394,508.94 |
Other explanations:
None
63. Selling expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Image promotion expenses | 3,533,952,237.22 | 2,419,867,469.08 |
Employee compensation and service fees | 362,407,560.34 | 314,177,020.39 |
Office allowances | 37,424,067.84 | 28,106,339.49 |
Travel expenses | 15,189,368.08 | 11,852,844.96 |
Meeting affair charges | 12,158,679.33 | 4,094,821.02 |
Equity incentive expenses for restricted shares | 4,186,552.14 | 3,815,630.91 |
Survey consulting fees | 4,761,013.66 | 3,156,462.06 |
Other | 2,121,673.88 | 766,765.04 |
Total | 3,972,201,152.49 | 2,785,837,352.95 |
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 fees | 199,180,004.62 | 156,737,777.08 |
Office allowance and business entertainment expenses | 86,374,110.35 | 61,368,432.01 |
Equity incentive expenses for restricted shares | 62,868,293.10 | 38,406,625.33 |
Expenses for depreciation, amortization and lease | 47,863,814.80 | 45,778,417.02 |
Travel expense and conference fees | 28,771,703.61 | 5,024,738.17 |
Consultation and intermediary fees | 26,131,927.56 | 12,338,732.18 |
Other | 4,251,916.66 | 7,642,027.58 |
Total | 455,441,770.70 | 327,296,749.37 |
Other explanations:
None
65. R&D expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Labor cost | 87,886,568.10 | 66,055,676.59 |
Outsourced R&D expenses | 49,917,542.88 | 41,417,003.04 |
Expenses for depreciation, amortization and lease | 14,907,715.74 | 5,485,513.91 |
Direct input costs | 9,067,633.86 | 8,833,694.90 |
Equity incentive expenses for restricted shares | 8,460,207.47 | 5,134,865.00 |
Other | 3,330,459.44 | 1,082,351.05 |
Total | 173,570,127.49 | 128,009,104.49 |
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 | 18,355,694.64 | 13,019,503.91 |
Handling fees | 712,455.44 | 634,636.61 |
Exchange gains and losses | -2,800,529.37 | -2,943,538.91 |
Interest income | -75,347,198.04 | -51,707,124.62 |
Total | -59,079,577.33 | -40,996,523.01 |
Other explanations:
None
67. Other income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Classification by nature | Amount incurred in the current period | Amount incurred in the previous period |
Government subsidies pertinent to assets | 2,079,090.00 | 2,079,090.00 |
Government subsidies related to income | 41,964,528.77 | 36,384,642.07 |
Refund of service charges for withholding personal income tax | 702,780.68 | 507,799.10 |
Additional deduction for VAT | 279,900.29 | 93,574.45 |
Total | 45,026,299.74 | 39,065,105.62 |
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 | -17,279,158.95 | -5,658,023.28 |
Investment income from disposal of long-term equity investment | -113,212.70 | |
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 | -17,392,371.65 | -5,658,023.28 |
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 | -13,089,429.12 | 741,308.99 |
Loss on bad debts of other receivables | 2,692,204.95 | -5,798,734.42 |
Impairment losses of debt investment | ||
Impairment losses of other debt investments | ||
Loss on bad debts of long-term receivables | ||
Impairment losses related to financial guarantees | ||
Total | -10,397,224.17 | -5,057,425.43 |
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. Impairment losses of contract assets |
I. Loss for devaluation of inventories and impairment loss of contract performance cost | -106,757,782.12 | -94,640,937.84 |
II. Impairment loss of long-term equity investment | -66,771,744.63 | |
III. Impairment loss of investment real estate | ||
IV. Impairment loss of fixed assets | -1,337,532.26 | |
V. Impairment loss of engineering materials | ||
VI. Impairment loss of construction in progress | ||
VII. Impairment loss of productive biological assets | ||
VIII. Impairment loss of oil and gas assets | ||
IX. Impairment loss of intangible assets | ||
X. Impairment loss of goodwill | ||
XI. Others | ||
Anticipated return losses | -3,471,872.81 | |
Total | -108,095,314.38 | -164,884,555.28 |
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 |
Income from disposal of non-current assets | -703,593.33 | 60,155.60 |
Total | -703,593.33 | 60,155.60 |
Other explanations:
None
74. Non-operating revenue
Information on 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 | |||
Revenue from fines and liquidated damages | 1,787,058.74 | 252,782.71 | 1,787,058.74 |
Amount not required to be paid | 686,774.60 | 505,051.10 | 686,774.60 |
Income from right protection funds | 1,528,566.87 | 1,528,566.87 | |
Other | 164,261.56 | 421,052.52 | 164,261.56 |
Total | 4,166,661.77 | 1,178,886.33 | 4,166,661.77 |
Other explanations:
□ Applicable √ Not applicable
75. Non-operating expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period | Amount included in current non-recurring gains and losses |
Total loss from disposal of non-current assets | |||
Including: Losses from disposal of fixed assets | |||
Loss from disposal of intangible assets | |||
Non-monetary asset exchange losses | |||
External donation | 8,865,320.50 | 1,434,600.00 | 8,865,320.50 |
Late fees | 2,320,528.94 | 2,320,528.94 | |
Fines | 220,000.00 | 2,915,707.07 | 220,000.00 |
Other | 116,512.19 | 126,645.38 | 116,512.19 |
Loss from damage and scrapping of non-current assets | 100,854.99 | 136,692.79 | 100,854.99 |
Total | 11,623,216.62 | 4,613,645.24 | 11,623,216.62 |
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 | 337,808,223.91 | 239,665,217.82 |
Deferred income tax expense | -73,292,568.66 | -16,798,498.26 |
Total | 264,515,655.25 | 222,866,719.56 |
(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 | 1,495,319,805.59 |
Income tax expense calculated at statutory or applicable tax rate | 373,829,951.41 |
Impact of different tax rates applicable to subsidiaries | |
Impact of adjusting income tax in previous periods | 2,053,410.29 |
Impact of non-taxable income | |
Impact of non-deductible costs, expenses and losses | 11,462,350.79 |
Impact of using deductible losses of deferred income tax assets unrecognized in the previous period | -13,652,192.96 |
Impact of deductible temporary differences or deductible losses of deferred income tax assets unrecognized in the current period | 27,431,942.45 |
Impact of applicable preferential tax rates | -114,497,159.95 |
Additional deductions for R&D expenditures | -22,112,646.78 |
Income tax expenses | 264,515,655.25 |
Other explanations:
□ Applicable √ Not applicable
77. Other comprehensive income
√ Applicable □ Not applicable
For details, refer to the particulars contained in "57. Other comprehensive income", "VII. Notes to theItems of Consolidated Financial Statements", "Section X Financial Report" of this Report.
78. Items in the cash flow statement
(1). Cash related to operating activities
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 | 74,557,758.90 | 51,707,124.62 |
Government subsidies | 45,009,847.74 | 38,447,280.07 |
Receivables and payables and others | 5,846,000.83 | 9,345,735.71 |
Total | 125,413,607.47 | 99,500,140.40 |
Explanation on other cash received related to operating activities:
None
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 | 3,732,844,574.91 | 2,579,629,003.60 |
Receivables and payables | 28,579,145.07 | 36,679,087.31 |
Total | 3,761,423,719.98 | 2,616,308,090.91 |
Explanation on other cash paid related to operating activities:
None
(2). Cash related to investing activities
Important cash received related to investing activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Cash received for construction deposit | 13,193,392.00 | |
Total | 13,193,392.00 |
Explanation on important cash received related to investing activitiesNone
Important cash paid related to investing activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Payment for the purchase and construction of long-term assets | 179,658,688.53 | 170,963,405.43 |
Capital increase by Jiaxing Woyong Investment Partnership (Limited Partnership) | 18,636,363.64 | 41,003,609.10 |
Investment by Golong Holdings Co., Ltd. | 90,000,000.00 | |
Purchase of fixed-term deposits | 300,000,000.00 | |
Total | 498,295,052.17 | 301,967,014.53 |
Explanation on important cash paid related to investing activitiesNone
Other cash received related to investing activities
□ Applicable √ Not applicable
Other cash paid related to investing activities
□ Applicable √ Not applicable
(3). Cash related to financing activities
Other cash received related to financing activities
□ Applicable √ Not applicable
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 |
Payment for equity incentive repurchase | 9,494,227.24 | |
Payment for repurchase of the Company’s shares | 39,082,438.95 | |
Payment for acquisition of minority equity | 46,085,313.00 | |
Payment for operating lease rent | 3,607,485.92 | 1,319,087.27 |
Payment for liquidation funds to minority shareholders | 1,003,954.40 | 859,171.61 |
Total | 53,188,106.51 | 48,263,571.88 |
Explanation on other cash paid related to financing activities:
None
Information on changes in liabilities arising from financing activities:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Opening balance | Current increase | Current decrease | Ending balance | ||
Cash changes | Non-cash changes | Cash changes | Non-cash changes | |||
Short-term borrowings | 200,195,890.41 | 300,000,000.00 | 300,000,000.00 | 40,334.85 | 200,155,555.56 | |
Bonds payable (including bonds payable due within one year) | 724,491,557.93 | 33,093,877.87 | 3,753,950.00 | 711,582.92 | 753,119,902.88 | |
Lease liabilities (including lease liabilities due within one year) | 6,267,571.55 | 12,997,592.65 | 3,607,485.92 | 1,717,311.30 | 13,940,366.98 | |
Total | 930,955,019.89 | 300,000,000.00 | 46,091,470.52 | 307,361,435.92 | 2,469,229.07 | 967,215,825.42 |
(4). Explanation on presentation of cash flows at net amount
□ Applicable √ Not applicable
(5). Significant activities and financial impacts that do not involve current cash receipts andpayments but affect the financial condition of the enterprise or may affect the cash flow of theenterprise in the future
√ Applicable □ Not applicable
Item | Amount for the current period | Amount for the same period last year |
Amount of the commercial paper transferred by endorsement | 3,900,925.86 | 26,020,864.88 |
Including: Payment for goods | 3,900,925.86 | 26,020,864.88 |
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 | 1,230,804,150.34 | 831,283,806.37 |
Add: Impairment provision of assets | 118,492,538.55 | 169,941,980.71 |
Credit impairment loss | ||
Depreciation of fixed assets, depletion of oil and gas assets and depreciation of productive biological assets | 62,978,780.92 | 52,552,861.25 |
Amortization of right-to-use assets | 4,464,656.74 | 1,071,299.90 |
Amortization of intangible assets | 18,517,085.80 | 17,445,985.14 |
Amortization of long-term unamortized expenses | 10,280,634.46 | 17,522,556.64 |
Losses on disposal of fixed assets, intangible assets and other long-term assets ("-" refers to income) | 703,593.33 | -60,155.60 |
Losses on retirement of fixed assets ("-" refers to income) | 100,854.99 | 136,692.79 |
Losses on changes in fair value ("-" refers to income) | ||
Financial expenses ("-" refers to income) | 13,067,443.28 | 13,019,503.91 |
Investment loss ("-" refers to income) | 17,392,371.65 | 5,658,023.28 |
Decrease in deferred income tax assets ("-" refers to increase) | -54,273,136.99 | -27,409,771.12 |
Increase in deferred income tax liabilities ("-" refers to decrease) | -19,019,431.67 | 10,611,272.86 |
Decrease in inventories ("-" refers to increase) | -234,921,611.07 | -315,753,506.27 |
Decrease in operating receivables ("-" refers to increase) | -449,560,276.02 | -28,573,373.07 |
Decrease in operating payables ("-" refers to increase) | 674,251,107.56 | 316,331,819.20 |
Other | 75,515,052.71 | 47,357,121.24 |
Net cash flow from operating activities | 1,468,793,814.58 | 1,111,136,117.23 |
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 | 3,659,267,712.03 | 3,125,333,085.05 |
Less: Beginning balance of cash | 3,125,333,085.05 | 2,378,334,768.09 |
Add: Ending balance of cash equivalents | ||
Less: Beginning balance of cash equivalents | ||
Net increase in cash and cash equivalents | 533,934,626.98 | 746,998,316.96 |
(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 | 3,659,267,712.03 | 3,125,333,085.05 |
Including: Cash on hand | 29,332.00 | 20,176.08 |
Bank deposits that can be used for payment at any time | 3,448,037,161.01 | 3,048,251,723.18 |
Other monetary funds that can be used for payment at any time | 211,201,219.02 | 77,061,185.79 |
Funds deposited with the central bank for payment | ||
Deposits in interbank | ||
Funds for interbank lending | ||
II. Cash equivalents | ||
Including: Bond investments due within three months | ||
III. Ending balance of cash and cash equivalents | 3,659,267,712.03 | 3,125,333,085.05 |
Including: Cash and cash equivalents with restricted use by the parent company or a subsidiary of the group | 257,906,850.60 | 507,079,183.81 |
(5). Information on funds with restricted use but still presented as cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount for the current period | Reason |
Raised funds | 178,011,019.10 | Special account of raised funds |
Cash subject to foreign exchange control of overseas operating subsidiaries | 79,895,831.50 | Subject to foreign exchange control |
Total | 257,906,850.60 | / |
(6). Monetary funds not belonging to cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount for the current period | Amount of previous period | Reason |
Fixed-term deposit | 335,288,251.36 | 30,000,000.00 | No withdrawal at any time |
L/C deposit | 8,800,000.00 | No withdrawal at any time | |
Transformer deposit | 250,000.00 | 250,000.00 | No withdrawal at any time |
Vehicle ETC deposit | 70,000.00 | 70,000.00 | No withdrawal at any time |
Pinduoduo deposit | 5,298,890.00 | 5,000,000.00 | No withdrawal at any time |
Direct store deposit | 2,110,704.68 | 350,000.00 | No withdrawal at any time |
Total | 351,817,846.04 | 35,670,000.00 | / |
Other explanations:
□ Applicable √ Not applicable
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 the previous year andadjustment amounts:
□ Applicable √ Not applicable
81. Foreign-currency monetary items
(1). Foreign-currency monetary items
√ Applicable □ Not applicable
Unit: Yuan
Item | Ending foreign currency balance | Converted exchange rate | Converted RMB at the end of period balance |
Cash and cash equivalents | - | - | 284,606,933.99 |
Including: USD | 7,847,098.42 | 7.0827 | 55,578,643.98 |
EUR | 26,105,651.86 | 7.8592 | 205,169,539.10 |
HKD | 22,387,179.89 | 0.9062 | 20,287,262.42 |
SF | 193,233.76 | 8.4184 | 1,626,719.09 |
JPY | 32,304,317.77 | 0.0502 | 1,621,676.75 |
KRW | 58,744,118.00 | 0.0055 | 323,092.65 |
Accounts receivable | - | - | 4,164,394.64 |
Including: EUR | 218,942.52 | 7.8592 | 1,720,713.05 |
HKD | 66,999.18 | 0.9062 | 60,714.66 |
JPY | 47,465,900.00 | 0.0502 | 2,382,788.18 |
KRW | 32,499.71 | 0.0055 | 178.75 |
Other receivables | - | - | 26,732,449.48 |
Including: USD | 558,965.44 | 7.0827 | 3,958,984.52 |
EUR | 2,832,778.86 | 7.8592 | 22,263,375.62 |
HKD | 99,313.63 | 0.9062 | 89,998.01 |
JPY | 8,368,353.22 | 0.0502 | 420,091.33 |
Accounts payable | - | - | 8,078,057.66 |
Including: EUR | 777,723.41 | 7.8592 | 6,112,283.82 |
HKD | 610,942.50 | 0.9062 | 553,636.09 |
JPY | 28,130,234.00 | 0.0502 | 1,412,137.75 |
Other payables | - | - | 865,815.54 |
Including: HKD | 5,975.00 | 0.9062 | 5,414.55 |
JPY | 683,412.06 | 0.0502 | 34,307.29 |
KRW | 150,198,853.99 | 0.0055 | 826,093.70 |
Other explanations:
None
(2). Explanation on overseas operating entities, including the main overseas operating location,bookkeeping currency, selection criteria, and reasons for change in the bookkeeping currencyof important overseas operating entities, which should be disclosed
√ Applicable □ Not applicable
Hapsode Co., Ltd.and Hanna Cosmetics Co., Ltd. operate in South Korea, and their business income andexpenditures are mainly in KRW, thus they choose KRW as the bookkeeping currency. Hong KongXinghuo Industry Limited, LIMITED, Hong Kong Zhongwen Electronic Commerce Co., Limited, HongKong Xuchen Trading Limited, Hong Kong Keshi Trading Co., Ltd., Boya (Hong Kong) InvestmentManagement Co., Limited and Hong Kong Wanyan Electronic Commerce Co., Limited operate in HongKong, thus they choose HKD as the bookkeeping currency. OR Off&Relax operates in Japan and its
business income and expenditures are mainly in JPY, thus it chooses JPY as the bookkeepingcurrency.PROYA PTE. LTD. operates in Singapore, and its business income and expenditures aremainly in SGD, thus it chooses SGD as the bookkeeping currency; PROYA BEAUTY ALAYSIA SDHBHD. operates in Malaysia and its business income and expenditures are mainly in MYR, thus itchooses MYR as the bookkeeping currency.
82. Lease
(1) The Company as the lessee
√ Applicable □ Not applicable
1) 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" hereof.
2) For the details on accounting policies for short-term leases and low-value asset leases of theCompany, refer to the particulars contained in "38. Lease" in "V. Significant Accounting Policies andEstimates" of "Section X Financial Report" of this Report.Variable lease payments not included in the measurement of lease liabilities
□ Applicable √ Not applicable
Lease expenses of short-term leases or low-value asset leases subject to simplified treatment
√ Applicable □ Not applicable
Item | Amount for the current period | Amount for the same period last year |
Short-term lease expenses | 6,986,080.67 | 2,725,585.47 |
Low value asset lease expenses (except for short-term lease expenses) | 2,169,311.63 | 178,817.29 |
Total | 9,155,392.30 | 2,904,402.76 |
Sale and leaseback transactions and judgment basis
□ Applicable √ Not applicable
Total cash outflows related to leases is 13,312,201.76 (Unit: Yuan Currency: RMB)For the details of maturity analysis and corresponding liquidity risk management of lease liabilities, referto the particulars contained in "1(II) Liquidity risk" in "XII. Risks related to Financial Instruments" in"Section X Financial Report" hereof.
(2) The Company as the lessor
Operating lease where the Company is the lessor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Lease income | Including: Income related to variable lease payments not included in lease receipts |
Investment real estate | 2,744,617.44 | |
Total | 2,744,617.44 |
For the details of fixed assets leased out through operating lease, refer to the particulars contained in "20Investment real estate" in "VII. Notes to the Items of Consolidated Financial Statements" of "Section XFinancial Report" hereof.
Financing lease where the Company is the lessor
□ Applicable √ Not applicable
Reconciliation of undiscounted lease receipts and net lease investments
□ Applicable √ Not applicable
Undiscounted lease receipts in the next five years
□ Applicable √ Not applicable
(3) Profits and losses of financial lease sales recognized by the Company as a manufacturer ordistributor
□ Applicable √ Not applicable
Other explanationsNone
83. Other
□ Applicable √ Not applicable
VIII.R&D expenditures
(1). Presentation by nature of expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Labor cost | 87,886,568.10 | 66,055,676.59 |
Outsourced R&D expenses | 49,917,542.88 | 41,417,003.04 |
Expenses for depreciation, amortization and lease | 14,907,715.74 | 5,485,513.91 |
Direct input costs | 9,067,633.86 | 8,833,694.90 |
Equity incentive expenses for restricted shares | 8,460,207.47 | 5,134,865.00 |
Other | 3,330,459.44 | 1,082,351.05 |
Total | 173,570,127.49 | 128,009,104.49 |
Including: Expensed R&D expenditures | 173,570,127.49 | 128,009,104.49 |
Capitalized R&D expenditures |
Other explanations:
None
(2). R&D project development expenditures eligible for capitalization
□ Applicable √ Not applicable
Important capitalized R&D project
□ Applicable √ Not applicable
Impairment provision of development expenditures
□ Applicable √ Not applicable
Other explanationsNone
(3). Important outsourcing projects under research
□ Applicable √ Not applicable
IX.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
Were there any transactions or events that resulted in the loss of control over a subsidiary in the current period
□ Applicable √ Not applicable
Unit: Yuan Currency: RMB
Name of subsidiary | Time point of loss of control | Disposal price at the time point of loss of control | Disposal ratio at the time point of loss of control (%) | Disposal method at the time point of loss of control | Judgment basis of the time point of loss of control | Difference between the disposal price and the attributable share of net assets of the subsidiary at the level of consolidated financial statements corresponding to the disposal of investment | Proportion of remaining equity on the date of loss of control (%) | Carrying value of remaining equity at the level of consolidated financial statements on the date of loss of control | Fair value of remaining equity at the level of consolidated financial statements on the date of loss of control | Gains or losses arising from re-measurement of remaining equity at fair value | Determination methods and major assumptions for fair value of remaining equity at the level of consolidated financial statements on the date of loss of control | Amount of other comprehensive income related to equity investments in original subsidiaries transferred to investment gains and losses or retained earnings |
Hangzhou Tiedingxian Catering Management Co., Ltd. | February 2023 | 1,500,000.00 | 100.00 | Selling equity to external parties | Completed equity delivery | -12,828.43 | ||||||
Hangzhou Xiake Bar Catering Management Co., Ltd. | February 2023 | 3,500,000.00 | 100.00 | Selling equity to external parties | Completed equity delivery | -11,332.08 |
Other explanations:
□ Applicable √ Not applicable
Was there a stepwise disposal of investment to subsidiaries through multiple transactions and a loss of control in the current period
□ 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
1. Expansion of consolidation scope
Company name | Equity acquisition method | Time point of equity acquisition | Contribution amount | Contribution ratio |
Huzhou Keyan Trading Co., Ltd. | Newly established subsidiary | March 2023 | 100.00% | |
Hubei Laibo Information Co., Ltd. | Newly established subsidiary | July 2023 | 100,000.00 | 100.00% |
PROYA PTE. LTD | Newly established subsidiary | November 2023 | 100.00% | |
PROYA BEAUTY MALAYSIA SDH. BHD. | Newly established subsidiary | November 2023 | 100.00% |
2. Narrowing 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 |
Korea Younimi Cosmetics Co., Ltd. | Cancel | April 2023 | 1,801,826.67 | -1,740,215.20 |
Hangzhou Donghai Wangchao Catering Management Co., Ltd. | Cancel | June 2023 | ||
Danyang Hapsode Cosmetics Trading Co., Ltd. | Cancel | December 2023 | 970.33 | 7,268,352.65 |
6. Other
□ Applicable √ Not applicable
X.Equity in Other Entities
1. Equity in subsidiaries
(1). Composition of enterprise group
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Subsidiary Name | Main place of business | Registered capital | Registration place | Nature of business | Shareholding ratio (%) | Mode of acquisition | |
Direct | Indirect | ||||||
Zhejiang Meiligu Electronic Commerce Co., Ltd. | Hangzhou | 10 million | Hangzhou | Wholesale and retail | 100.00 | Establishment | |
Ningbo TIMAGE Cosmetics Co., Ltd. | Ningbo | 1 million | Ningbo | Wholesale and retail | 71.36 | Establishment | |
Proya (Zhejiang) Cosmetics Co., Ltd. | Huzhou | 10 million | Huzhou | Manufacturing | 100.00 | 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:
The Company incorporated 46 subsidiaries, including Hangzhou Proya Trade Co.,Ltd. and ZhejiangMeiligu Electronic Commerce Co., Ltd., into the consolidation scope of the consolidated financialstatements.
(2). Important non-wholly-owned subsidiaries
√ 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% | 37,167,220.38 | 55,449,339.11 |
Explanation on the shareholding ratio of minority shareholders 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. | 297,733,820.74 | 11,052,026.21 | 308,785,846.95 | 111,987,809.76 | 1,079,017.49 | 113,066,827.25 | 173,712,882.33 | 5,198,059.78 | 178,910,942.11 | 112,248,423.70 | 1,672,655.27 | 113,921,078.97 |
Name of subsidiary | Amount incurred in the current period | Amount incurred in the previous period | ||||||
Operating revenue | Net profit | Total comprehensive income | Cash flows generated from operating activities | Operating revenue | Net profit | Total comprehensive income | Cash flows generated from operating activities | |
Ningbo TIMAGE Cosmetics Co., Ltd. | 1,000,707,718.37 | 129,773,814.16 | 129,773,814.16 | 98,459,950.02 | 571,701,521.25 | 76,095,826.44 | 76,095,826.44 | 36,940,377.15 |
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 ofconsolidated financial statements
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
2. Transactions where the share of owners' equity in a subsidiary changes and the subsidiaryis still controlled
□ 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 or amount incurred in the current period | Beginning balance or amount incurred in the previous period | |
Joint ventures: | ||
Total carrying value of investment | 3,059,991.91 | 3,068,948.16 |
Total of the following items calculated according to the shareholding ratio | ||
– Net profit | -8,956.25 | -5,810.52 |
– Other comprehensive income | ||
– Total comprehensive income | ||
Affiliates: | ||
Total carrying value of investment | 110,514,166.58 | 135,464,429.30 |
Total of the following items calculated according to the shareholding ratio | ||
– Net profit | -17,270,202.70 | -5,652,212.76 |
– Other comprehensive income | -20,250,000.00 | |
– Total comprehensive income |
Other explanationsNone
(5). Explanation on major 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 consolidatedfinancial statementsExplanation on structured entities not included in the scope of consolidated financial statements:
□ Applicable √ Not applicable
6. Other
□ Applicable √ Not applicable
XI. Government subsidies
1. Government subsidies recognized by amount receivable at the end of the Reporting Period
□ Applicable √ Not applicable
Reasons for failure to receive the expected amount of government subsidies at the expected time point
□ Applicable √ Not applicable
2. Liability items involving government subsidies:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Items in financial statements | Opening balance | Amount of new subsidies in the current period | Amount included in non-operating revenue in the current period | Amount transferred in other income in the current period | Other changes in the current period | Ending balance | Related to assets or income |
Deferred income | 6,399,811.33 | 2,062,638.00 | 2,079,090.00 | 6,383,359.33 | Related to assets | ||
Total | 6,399,811.33 | 2,062,638.00 | 2,079,090.00 | 6,383,359.33 | / |
3. Government subsidies included in the current profit or loss
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Type | Amount incurred in the current period | Amount incurred in the previous period |
Related to income | 44,043,618.77 | 38,463,732.07 |
Total | 44,043,618.77 | 38,463,732.07 |
Other explanations:
None
XII.Risks Related to Financial Instruments
1. Risks of 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 ofshareholders and other equity investors. Based on these risk management goals, the Company's basicstrategy for risk management is to determine and analyze various risks faced by the Company, establishan appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in atimely and reliable manner to control the risks within a limited scope.The Company faces various risks related to financial instruments in its daily activities, including creditrisk, liquidity risk and market risk. The management has deliberated and approved the policinggoverning these risks as outlined below:
(I) Credit riskCredit risk refers to the risk that one party of a financial instrument fails or is unable to fulfill itsobligations, resulting in financial losses to the other party.
1. 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
has increased significantly since initial recognition, the Company takes into account the reasonable andwell-founded information available without unnecessary additional costs or efforts, including qualitativeand quantitative analyses based on historical data, external credit risk rating and forward-lookinginformation. The Company determines the changes that may result in default risk of financialinstruments within their expected duration by comparing the default risk of the financial instruments onthe balance sheet date and the initial recognition date based on an individual financial instrument orcombined financial instruments with similar credit risk characteristics.The Company deems that the credit risk of the financial instruments has increased significantly if one ormore of the following quantitative and qualitative standards are reached:
1) The main quantitative standard is that the probability of default within the remaining duration on thebalance sheet date has increased by more than a certain proportion compared with that at the initialrecognition;
2) The main qualitative standard is that there are material adverse changes occurring to the business orfinancial conditions of the debtor and changes in the exiting or anticipated technology, market, economicor legal environment which have a material adverse effect on the debtor's ability to make repayment tothe Company.
(2) Definitions of default and assets with credit impairment
If the financial instruments meet one or more of the following conditions, the Company defines thefinancial assets as in default, with its standard consistent with the definition of credit impairment:
1) The debtor faces major financial difficulties;
2) The debtor breaches the provisions governing it in the contract;
3) The debtor is very likely to become bankrupt or go into other financial restructuring proceedings;
4) The creditor makes a concession to the debtor which it will not make under any other circumstancesfor the economic or contractual considerations in connection with the debtor’s financial difficulties.
2. Measurement of expected credit loss
The key parameters for measurement of expected credit loss include the probability of default, loss givendefault and default risk exposure. The Company builds the models of probability of default, loss givendefault and default risk exposure considering the quantitative analysis of historical statistical data (suchas counterparty rating, guarantee type, category of collateral and pledge, repayment method) andforward-looking information.
3. For the details of the Reconciliation of Beginning Balance and Ending Balance of Provision for Loss ofFinancial Instruments, refer to the particulars contained in "5. Accounts receivable", “7. Receivablefinancing” and “9. 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 assessments on customers who trade in credit. Accordingto the results of credit assessments, the Company deals with approved and credible customers, andmonitors the 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 3rd parties.Credit risk concentration is managed on a per-customer basis. As of December 31, 2023, the Companyhad a certain credit concentration risk of 93.36% (as of December 31, 2022: 68.05%) of the Company'saccounts receivable originating from the top five customers in the balance. The Company had noguarantee 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 thebalance sheet.(II) Liquidity riskLiquidity risk refers to the risk of shortage of funds when the Company fulfills its obligation to settle bydelivering cash or other financial assets. Liquidity risk may arise from the inability to sell financialassets at fair value as soon as possible, the counterparty's inability to pay off its contractual debt, theacceleration of debt or the inability to generate expected cash flow.
To control such risk, the Company applies various financing methods, such as bill settlements and bankloans, in appropriate combination of long-term and short-term financing 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 | ||||
Carrying value | Undiscounted contract value | Within 1 year | 1-3 years | Above 3 years | |
Short-term borrowings | 200,155,555.56 | 204,136,925.42 | 204,136,925.42 | ||
Notes payable | 36,959,074.14 | 36,959,074.14 | 36,959,074.14 | ||
Accounts payable | 1,018,522,358.60 | 1,018,522,358.60 | 1,018,522,358.60 | ||
Other payables | 155,345,148.68 | 155,345,148.68 | 155,345,148.68 | ||
Bonds payable | 753,119,902.88 | 902,651,337.03 | 7,500,387.51 | 31,446,772.75 | 863,704,176.77 |
Lease liabilities | 9,970,306.87 | 14,684,876.69 | 5,269,969.69 | 9,414,907.00 | |
Non-current liabilities due within one year | 3,970,060.11 | 4,213,792.92 | 4,213,792.92 | ||
Subtotal | 2,178,042,406.84 | 2,336,513,513.48 | 1,426,677,687.27 | 36,716,742.44 | 873,119,083.77 |
(Continued)
Item | Balance at the end of the previous year | ||||
Carrying 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 |
(III) Market riskMarket risk refers to the risk of fluctuations in the fair value or future cash flow of financial instrumentsdue to changes in market prices. Market risks include interest rate and foreign exchange risks.
1. Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flow of financialinstruments due to changes in market interest rates. Interest-bearing financial instruments with a fixedinterest rate cause the interest rate risk of fair value, and those with a floating interest rate cause theinterest rate risk of cash flow. The Company determines the proportion of financial instruments with afixed interest rate and financial instruments with a floating interest rate according to the market
environment, and maintains an appropriate combination of financial instruments through regular reviewand monitoring.
2. Foreign exchange risk
Foreign exchange risk refers to the risk of fluctuations in the fair value or future cash flow of financialinstruments due to the change of foreign exchange rates. The risk of changes in foreign exchange ratesfaced by the Company is mainly related to the Company's foreign currency assets and liabilities. TheCompany carries out business in the Chinese mainland, and therefore has main activities valuated inRMB. Therefore, the market 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 theperiod, refer to the particulars contained in "81. Foreign-currency monetary items" in "VII. Notes to theItems of Consolidated Financial Statements" of "Section X Financial Report" of this Report.
2. Hedging
(1) The Company carries out hedging business for risk management
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(2) The Company carries out qualified hedging business and applies hedging accounting
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(3) The Company carries out hedging business for risk management, expects to achieve riskmanagement objectives, but does not apply hedging accounting
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
3. Transfer of financial assets
(1) Classification of transfer methods
□ Applicable √ Not applicable
(2) Financial assets derecognized due to transfer
□ Applicable √ Not applicable
(3) Financial assets transferred due to continued involvement
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
XIII.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 | The 3rd level of fair value measurement | Total |
value measurement | ||||
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 | 107,660,400.00 | 107,660,400.00 | ||
(IV) Investment real estate | ||||
1. Land use rights 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 | ||||
Receivable financing | 7,378,700.06 | 7,378,700.06 | ||
Total assets continuously measured at fair value | 115,039,100.06 | 115,039,100.06 | ||
(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 importantparameters 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 3rd-level fair value measurement items
√ Applicable □ Not applicable
1. For bank acceptance bills held by the Company, the fair value is determined by the par value.
2. As for investments in other equity instruments held by the Company, due to important changes inbusiness environment, operating conditions, financial conditions and external valuation of the investees,including Hangzhou Regenovo Bio-technology Co., Ltd., Golong Holdings Co., Ltd., andLIPOTRUE,S.L., the Company takes the investment cost as a reasonable estimate of fair value formeasurement. Due to the difference between the financial situation of the investee Golong Holdings Co.,Ltd. in 2023 and the expectations at the time of investment, the Company determines the fair value at theend of the period based on the asset evaluation report issued by a professional evaluation agency, thevaluation technique adopted by the Company is based on the reasonably available information, and theimportant parameters adopted include the EBITDA, and the P/E ratio and EV/EBITDA value ratio oflisted companies in the same industry.
5. Adjustment information and sensitivity analysis of non-observable parameters betweenbeginning and ending carrying value for continuous 3rd-level fair value measurement items
□ Applicable √ Not applicable
6. For continuous fair value measurement items, if the conversion occurs among differentlevels within the current period, the reasons for the conversion and the policy for determiningthe conversion time point
□ Applicable √ Not applicable
7. Changes in valuation techniques during the current period and the reasons for the changes
□ Applicable √ Not applicable
8. Information on Fair value of financial assets and liabilities not measured at fair value
□ Applicable √ Not applicable
9. Other
□ Applicable √ Not applicable
XIV.Related Parties and Transactions
1. Information on 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 "X. Equity in OtherEntities","Section X Financial Report" of this Report.
3. Information on joint ventures and affiliates of the Company
Refer to the notes for details of the important joint ventures or affiliates of the Company
√ Applicable □ Not applicable
For the details on important joint ventures or affiliates of the Company, refer to the particulars containedin "X. Equity in Other Entities","Section X Financial Report" of this Report.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 on other related parties
√ Applicable □ Not applicable
Name of other related party | Relationship between other related party and the Company |
Huzhou Beauty Town Technology Incubation Park Co., Ltd. | Other |
Ningbo Weiman Cosmetics Co., Ltd. | Other |
Cosmetics Industry (Huzhou) Investment Development Co., Ltd. | Other |
Beijing Xiushi Cultural Development Co., Ltd. | Other |
Hangzhou Regenovo Bio-technology Co., Ltd. | Other |
Hangzhou Slow Coral Cultural Tourism Planning and Design Co., Ltd. | Other |
PARISEZHAN HK LIMITED | Other |
EURL PHARMATICA | Other |
SARL ORTUS | Other |
S.A.S AREDIS | Other |
Shanghai Youke Brand Management Co., Ltd. | Other |
Shanghai Youke Jiabei Technology Co., Ltd. | Other |
Beauty Hi-tech Innovation Co.Ltd | Other |
Other explanationsNone
5. Information on related transactions
(1). Related transactions of purchasing and selling goods, and providing and receiving laborservicesStatement of purchasing goods or accepting labor services
√ Applicable □ Not applicable
Unit: Yuan 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 |
Hangzhou Slow Coral Cultural Tourism Planning and Design Co., Ltd. | Promotional services | 621,966.94 | Not applicable | ||
Beijing Xiushi Cultural Development Co., Ltd. | Promotional services | 169,811.41 | Not applicable | ||
Ningbo Weiman Cosmetics Co., Ltd. | Purchase of goods | 121,884.94 | Not applicable | 107,862.78 | |
Hangzhou Regenovo Bio-technology Co., Ltd. | Purchase of goods | 41,663.72 | Not applicable | ||
Beauty Hi-tech Innovation Co.Ltd | Purchase of goods | 4,545,263.84 | Not applicable | 324,982.00 |
Statements of sales of goods or provision of services
√ Applicable □ Not applicable
Unit: Yuan 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 | 12,289,045.76 | |
Shanghai Youke Jiabei Technology Co., Ltd. | Sales of goods | 33,616,486.42 | |
Ningbo Weiman Cosmetics Co., Ltd. | Sales of goods | 14,321.36 | 630,810.70 |
Cosmetics Industry (Huzhou) Investment Development Co., Ltd. | Sales of goods | 3,396.23 |
Explanation on related party transactions in purchasing and selling goods, and providing and receivinglabor services
□ Applicable √ Not applicable
(2). Related entrusted management, contracting and entrusted management, and outsourcingStatement of entrusted management or contracting of the Company:
□ Applicable √ Not applicable
Explanation on related trusteeship or contracting
□ Applicable √ Not applicable
Statement of entrusted management or outsourcing of the Company
□ Applicable √ Not applicable
Explanation on related management or outsourcing
□ Applicable √ Not applicable
(3). Information on 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 | 85,715.77 | 214,434.03 | 517,536.00 | 386,182.00 | 27,952.40 | 15,292.30 | -229,315.75 | 693,678.71 |
Explanation on related lease
□ Applicable √ Not applicable
(4). Information on 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: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Remuneration of key management personnel | 9,373,634.51 | 6,664,014.49 |
Note: The above remuneration excludes the relevant remuneration recognized by share-based payment
(8). Other related party transactions
□ Applicable √ Not applicable
6. Information on unsettled items such as accounts receivable from and accounts payable torelated parties
(1). 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. | 15,052.00 | 752.60 | |||
Subtotal | 15,052.00 | 752.60 | |||
Prepayments | |||||
Huzhou Beauty Town Technology Incubation Park Co., Ltd. | 43,000.00 | ||||
Beauty Hi-tech Innovation Co.Ltd | 21,021.52 | ||||
Subtotal | 21,021.52 | 43,000.00 |
Other receivables | |||||
EURL PHARMATICA [Note] | 18,169,451.02 | 18,169,451.02 | 18,232,635.52 | 18,232,635.52 | |
Huzhou Beauty Town Technology Incubation Park Co., Ltd. | 132,568.20 | 132,568.20 | 133,568.20 | 132,868.20 | |
Beauty Hi-tech Innovation Co., Ltd. | 82,767.74 | 4,138.39 | |||
Subtotal | 18,384,786.96 | 18,306,157.61 | 18,366,203.72 | 18,365,503.72 |
[Note] Other receivables from EURL PHARMATICA are the consolidated statistics of receivables fromPAN Xiang and receivables from EURL PHARMATICA, PARISEZHAN HK LIMITED,SARLORTUS, and S.A.SAREDIS controlled by PAN Xiang.
(2). Payable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Related parties | Ending book balance | Opening book balance |
Accounts payable | |||
Hangzhou Slow Coral Cultural Tourism Planning and Design Co., Ltd. | 199,622.64 | ||
Ningbo Weiman Cosmetics Co., Ltd. | 121,884.94 | 121,884.94 | |
S.A.S AREDIS | 243,598.94 | ||
Subtotal | 321,507.58 | 365,483.88 | |
Other payables | |||
HOU Juncheng | 2,000,000.00 | ||
Subtotal | 2,000,000.00 |
(3). Other items
□ Applicable √ Not applicable
7. Commitment of related parties
□ Applicable √ Not applicable
8. Other
□ Applicable √ Not applicable
XV.Share-based Payments
1. Equity instruments
√ Applicable □ Not applicable
Quantity unit: Share Amount unit: Yuan Currency: RMB
Categories of granted objects | Awarded in the current period | Exercised in the current period | Released in the current period | Invalid in the current period | ||||
Number | Amount | Number | Amount | Number | Amount | Number | Amount | |
Management | 679,770 | 42,844,932.00 | 110,404 | 6,105,220.21 | ||||
R&D personnel | 91,518 | 5,768,248.80 | 13,720 | 761,363.96 |
Sales specialists | 40,110 | 2,528,076.00 | 47,418 | 2,627,643.07 | ||||
Total | 811,398 | 51,141,256.80 | 171,542 | 9,494,227.24 |
[Note] On May 29, 2023, the Company implemented the annual equity distribution for 2022, distributinga cash dividend of RMB0.87 (including tax) per share and issuing 0.40 shares for every 1 share to allshareholders through capitalization of the capital reserve, so this number is the number of shares afterthe capitalization of the capital reserve.Outstanding stock options and other equity instruments at the end of the period
√ Applicable □ Not applicable
Categories of granted objects | Outstanding stock options at the end of the period | Outstanding other equity instruments at the end of the period | ||
Scope of exercise price | Remaining term of contract | Scope of exercise price | Remaining term of contract | |
Management | Not applicable | Not applicable | RMB78.56/Share | 31 months |
R&D personnel | Not applicable | Not applicable | RMB78.56/Share | 31 months |
Sales specialists | Not applicable | Not applicable | RMB78.56/Share | 31 months |
Other explanationsOn July 25, 2022, the Company, according to the Proposal on the 2022 Restricted Shares Incentive Planof the Company (Draft) and Its Summary deliberated and approved at the First Extraordinary GeneralMeeting of Shareholders of the Company in 2022, under the Incentive Plan, proposed to grant up to2,100,000 restricted shares to incentive objects. The grant date of restricted shares is July 25, 2022, andthe incentive objects are 101 persons including senior managers, middle managers and core backbonepersonnel of the Company (excluding independent directors, supervisors and shareholders or actualcontrollers holding more than 5% of the company's shares alone or in total, as well as their spouses,parents and children). The grant price is RMB78.56 per share. The subject shares under the IncentivePlan are derived from the A-share ordinary shares of the Company privately issued by the Company tothe incentive objects. The validity period of the Incentive Plan begins from the date when theregistration of the grant of restricted shares is completed to the date when all the restricted sharesgranted to the incentive objects are released or repurchased and de-registered, in no case taking longerthan 48 months. The granted restricted shares will be released in 3 installments (30%, 30%, 40%) over36 months after the first 12 months after the initial grant of the restricted shares. The performancecondition for the first release is that: On the basis of the operating revenue and net profit in 2021, thegrowth rates of operating revenue and net profit in 2022 were no less than 25% and 25%, respectively.The performance condition for the second release is that: On the basis of the operating revenue and netprofit in 2021, the growth rates of operating revenue and net profit in 2023 were no less than 53.75%and 53.75%, respectively. The performance condition for the 3rd release is that: On the basis of theoperating revenue and net profit in 2021, the growth rates of operating revenue and net profit in 2024were no less than 87.58% and 87.58%, respectively.According to the Proposal on Satisfying the Conditions for Release from Sales Restrictions in the FirstRelease Period under the 2022 Restricted Shares Incentive Plan deliberated and approved at the 14thmeeting of the 3rd session of Board of Directors of the Company in 2023, the Company released the811,398 restricted shares held by the incentive objects who had satisfied the first release conditions (andissued 0.40 shares for every 1 share to all shareholders through capitalization of the capital reserve, sothis number is the number of shares after the capitalization of the capital reserve). The circulating date ofthe sales was September 26, 2023.
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Determination method of the fair value of equity instruments on the grant date | Determined as per the share price on the grant date and the grant price of restricted shares |
Important parameters of fair value of equity instruments on the grant date | |
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 |
Cumulative amount of equity-settled share-based payments included in the capital reserve | 163,564,812.98 |
Other explanationsNone
3. Information on cash-settled share-based payments
□ Applicable √ Not applicable
4. Share-based payment expenses in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Categories of granted objects | Equity-settled share-based payment expenses | Cash-settled share-based payment expenses |
Management | 62,868,293.10 | |
R&D personnel | 8,460,207.47 | |
Sales specialists | 4,186,552.14 | |
Total | 75,515,052.71 |
Other explanationsNone
5. Information on modification and termination of share-based payments
□ Applicable √ Not applicable
6. Other
□ Applicable √ Not applicable
XVI.Commitments and Contingencies
1. Important commitments
√ Applicable □ Not applicable
Important external commitments, nature and amount existing at the balance sheet dateAs of December 31, 2023, the investment projects conducted by the Company through public issuanceof convertible bonds were as follows:
Unit: RMB '0,000
Item | Total investment amount | Adjusted investment amount of raised funds | Ending accumulated investment | Project filing or approval No. |
Huzhou Production Base Expansion Project (Phase I) | 43,752.54 | 33,850.00 | 23,435.69 | 2011-330502-04-01-178735 |
Longwu R&D Center Construction Project | 21,774.45 | 19,450.00 | 19,053.45 | 2101-330106-04-02-307916 |
Information System Upgrade Project | 11,239.50 | 8,801.27 | 3,143.45 | |
Additional working capital | 18,000.00 | 12,349.60 | 12,533.15 | |
Total | 94,766.49 | 74,450.87 | 58,165.74 |
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 mustalso state:
□ Applicable √ Not applicable
3. Other
□ Applicable √ Not applicable
XVII.Events after the balance sheet date
1. Important non-adjustment matters
□ Applicable √ Not applicable
2. Information on profit distribution
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Profits or dividends to be distributed | 359,037,186.69 |
Profits or dividends declared after deliberation and approval | 397,455,566.41 |
According to the 18th meeting of the 3rd session of Board of Directors on April 17, 2024, the Companydistributed a cash dividend of RMB9.10 (including tax) per 10 shares to all shareholders registered onthe equity registration date based on the total share capital on the registration date of dividenddistribution (deducting the shares in the Company's special securities account for repurchase), totalingRMB 359,037,186.69 (including tax). In case of a change in the Company's total share capital due to theconversion of convertible bonds before the date of record for equity distribution, the Company maintainsthe said distribution and conversion ratios and adjusts the total distribution and conversion amounts. Theabove matter is yet to be deliberated and approved at the shareholders’ meeting.
3. Sales return
□ Applicable √ Not applicable
4. Explanation on other events after the balance sheet date
□ Applicable √ Not applicable
XVIII.Other Important Matters
1. Correction of early accounting errors
(1). Retrospective restatement
□ Applicable √ Not applicable
(2). Prospective application
□ Applicable √ Not applicable
2. Important 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's main business is the production and sale of cosmetics. The Company regards thisbusiness as a whole to implement management and evaluate business results. Therefore, the Companyhas no need to disclose segment information. For the details on revenue breakdown of the Company,refer to the particulars contained in Note V(II)1 of the Financial Statements.The details of main business income and main business cost of the Company classified by brands are asfollows:
2023
Brand | Income from main business | Cost of main business | Gross profit |
Proya brand | 7,177,344,635.84 | 2,097,878,713.27 | 5,079,465,922.57 |
Other brands | 1,712,883,153.13 | 568,986,159.23 | 1,143,896,993.90 |
Subtotal | 8,890,227,788.97 | 2,666,864,872.50 | 6,223,362,916.47 |
2022
Brand | 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 |
(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 liabilitiesof each reportable segment, the reasons must 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
XIX.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 | Ending book balance | Opening book balance |
Within 1 year | ||
Including: Sub-items within 1 year | ||
Within 1 year | 601,922,452.45 | 259,683,548.62 |
Sub-total within 1 year | 601,922,452.45 | 259,683,548.62 |
1-2 years | 21,289,087.90 | 54,333,721.43 |
2-3 years | 10,300,174.10 | |
Above 3 years | ||
3-4 years | ||
4-5 years | ||
Above 5 years | ||
Total | 623,211,540.35 | 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 | ||||||||||
Including: | ||||||||||
Provision for bad debts accrued by portfolio | 623,211,540.35 | 100.00 | 36,482,849.00 | 5.85 | 586,728,691.35 | 324,317,444.15 | 100.00 | 34,434,380.91 | 10.62 | 289,883,063.24 |
Including: | ||||||||||
Account age portfolio | 623,211,540.35 | 100.00 | 36,482,849.00 | 5.85 | 586,728,691.35 | 324,317,444.15 | 100.00 | 34,434,380.91 | 10.62 | 289,883,063.24 |
Total | 623,211,540.35 | / | 36,482,849.00 | / | 586,728,691.35 | 324,317,444.15 | / | 34,434,380.91 | / | 289,883,063.24 |
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 | 601,922,452.45 | 30,096,122.63 | 5.00 |
1-2 years | 21,289,087.90 | 6,386,726.37 | 30.00 |
Total | 623,211,540.35 | 36,482,849.00 | 5.85 |
Explanation on provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of accounts receivable with changes in provision forloss in the current period:
□ Applicable √ Not applicable
(3). Information on provisions for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Opening balance | Amount of changes in the current period | Ending balance | |||
Accrual | Withdrawal or write-back | Charge-off or write-off | Other changes | |||
Provision for bad debts accrued by portfolio | 34,434,380.91 | 2,048,468.09 | 36,482,849.00 | |||
Total | 34,434,380.91 | 2,048,468.09 | 36,482,849.00 |
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanationsNone
(4). Accounts receivable actually written off in the current period
□ Applicable √ Not applicable
Among them, information on accounts receivable significantly written off
□ Applicable √ Not applicable
Explanation on the write-off of the account receivable:
□ Applicable √ Not applicable
(5). Accounts receivable and contract assets of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Company name | Balance of accounts receivable at the end of the period | Balance of contract assets at the end of the period | Balance of accounts receivable and contract assets at the end of the period | Proportion of total balance of accounts receivable and contract assets at the end of the period (%) | Ending balance of provision for bad debts |
Proya (Zhejiang) Cosmetics Co., Ltd. | 260,909,671.88 | 260,909,671.88 | 41.87 | 13,045,483.59 | |
Huzhou Hapsode Trading Co., Ltd. | 84,267,184.00 | 84,267,184.00 | 13.52 | 4,213,359.20 | |
Huzhou UZERO Trading Co., Ltd. | 51,127,826.40 | 51,127,826.40 | 8.20 | 2,556,391.32 | |
Ningbo Tangyu Trading Co., Ltd. | 49,945,434.71 | 49,945,434.71 | 8.01 | 2,497,271.74 | |
Hangzhou Proya Commercial Management Co., Ltd. | 43,959,624.86 | 43,959,624.86 | 7.05 | 6,633,111.85 | |
Total | 490,209,741.85 | 490,209,741.85 | 78.65 | 28,945,617.70 |
Other explanationsNone
Other explanations:
□ Applicable √ Not applicable
2. Other receivables
Presentation by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Ending balance | Opening balance |
Interest receivable | ||
Dividend receivable | ||
Other receivables | 80,702,024.60 | 141,574,549.59 |
Total | 80,702,024.60 | 141,574,549.59 |
Other explanations:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ Applicable √ Not applicable
(2). Significant overdue interest
□ Applicable √ Not applicable
(3). Disclosed by the classification of bad debt accrual method
□ Applicable √ Not applicable
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Explanation on provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
(4). Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of interest receivable with changes in provision forloss in the current period:
□ Applicable √ Not applicable
(5). Information on provisions for bad debts
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanations:
None
(6). Interest receivable actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important interest receivable
□ Applicable √ Not applicable
Explanation on write-off of receivable financing:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Dividend receivable
(1). Dividend receivable
□ Applicable √ Not applicable
(2). Important dividends receivable with an account age of more than one year
□ Applicable √ Not applicable
(3). Disclosed by the classification of bad debt accrual method
□ Applicable √ Not applicable
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Explanation on provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
(4). Provision for bad debts accrued according to the general model of expected credit loss
□ Applicable √ Not applicable
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of dividends receivable with changes in provision forloss in the current period:
□ Applicable √ Not applicable
(5). Information on provisions for bad debts
□ Applicable √ Not applicable
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
Other explanations:
None
(6). Dividends receivable actually written off in the current period
□ Applicable √ Not applicable
Wherein, write-off of important dividends receivable
□ Applicable √ Not applicable
Explanation on write-off of receivable financing:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Other receivables
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age | Ending book balance | Opening book balance |
Within 1 year | ||
Including: Sub-items within 1 year | ||
Within 1 year | 36,258,395.66 | 33,856,482.33 |
Sub-total within 1 year | 36,258,395.66 | 33,856,482.33 |
1-2 years | 32,135,546.26 | 62,659,488.92 |
2-3 years | 47,523,332.69 | 131,098,498.27 |
Above 3 years | 135,780,112.99 | 4,741,614.72 |
3-4 years | ||
4-5 years | ||
Above 5 years | ||
Total | 251,697,387.60 | 232,356,084.24 |
(2). Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Nature of payment | Ending book balance | Opening book balance |
Current accounts receivable | 244,184,515.37 | 210,637,812.50 |
Security deposits | 6,322,669.24 | 18,833,006.72 |
Suspense payment receivables | 234,768.29 | 2,334,148.44 |
Other | 955,434.70 | 551,116.58 |
Total | 251,697,387.60 | 232,356,084.24 |
(3). Information on 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 of January 1, 2023 | 1,692,824.12 | 18,797,846.68 | 70,290,863.86 | 90,781,534.65 |
Balance as of January 1, 2023 in the current period | ||||
– Transferred into the second stage | -1,606,777.31 | 1,606,777.31 | ||
– Transferred into the Third stage | -7,128,499.90 | 7,128,499.90 | ||
– Transferred back to the second stage | ||||
– Transferred back to the first stage | ||||
Amount accrued in the current period | 1,726,872.98 | -3,635,460.21 | 82,122,415.58 | 80,213,828.35 |
Amount written back in the current period | ||||
Amount charged-off in the current period | ||||
Amount written off in the current period | ||||
Other changes |
Balance as of December 31, 2023 | 1,812,919.79 | 9,640,663.88 | 159,541,779.34 | 170,995,363.00 |
Classification basis and accrual ratio of provision for bad debts for each stageNone
Explanation on significant changes in book balance of other receivables with changes in provision for lossin the current period:
□ Applicable √ Not applicable
The amount of provision for bad debts in the current period and the basis for evaluating whether thecredit risk of financial instruments increases significantly:
□ Applicable √ Not applicable
(4). Information on provisions for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category | Opening balance | Amount of changes in the current period | Ending balance | |||
Accrual | Withdrawal or write-back | Charge-off or write-off | Other changes | |||
Account age portfolio | 90,781,534.65 | 80,213,828.35 | 70,995,363.00 | |||
Total | 90,781,534.65 | 80,213,828.35 | 70,995,363.00 |
Among them, significant amount of bad-debt provision written back or withdrawn in the current period:
□ Applicable √ Not applicable
Other explanationsNone
(5). Other receivables actually written off in the current period
□ Applicable √ Not applicable
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 | Ending balance | As a proportion of total ending balance in other receivables (%) | Nature of payment | Account age | Provision for bad debts Ending balance |
Hong Kong Xinghuo Industry Limited | 158,596,921.24 | 63.01 | Current accounts receivable | Note [1] | 138,826,631.30 |
Boya (Hong Kong) Investment Management Co., Limited | 37,724,160.00 | 14.99 | Current accounts receivable | 2-3 years | 18,862,080.00 |
Zhejiang Meiligu Electronic Commerce Co., Ltd. | 17,430,278.00 | 6.93 | Current accounts receivable | Within 1 year | 871,513.90 |
Hangzhou Yizhuo Culture Media Co., Ltd. | 7,491,913.31 | 2.98 | Current accounts receivable | Note [2] | 2,484,299.62 |
Ningbo Keshi Trading Limited | 7,053,500.14 | 2.80 | Current accounts receivable | Note [3] | 978,425.05 |
Total | 228,296,772.69 | 90.71 | / | / | 162,022,949.87 |
[Note 1] RMB1,378,625.13 with an account age within 1 year, RMB25,296,150.57 with an account ageof 1-2 years, RMB1,506,581.35 with an account age of 2-3 years, and RMB130,415,564.19 with anaccount age of above 3 years.[Note 2] RMB2,253,097.49 with an account age within 1 year, RMB1,238,815.82 with an account ageof 1-2 years, and RMB4,000,000.00 with an account age of 2-3 years.[Note 3] RMB5,609,833.36 with an account age within 1 year, RMB119,500.04 with an account age of1-2 years, and RMB1,324,166.74 with an account age of 2-3 years.
(7). Presented as other receivables due to centralized fund management
□ 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 | Carrying value | Carrying amount | Impairment provision | Carrying value | |
Investments in subsidiaries | 347,674,082.74 | 42,500,000.00 | 305,174,082.74 | 304,354,996.61 | 42,500,000.00 | 261,854,996.61 |
Investments in affiliates and joint ventures | 195,016,371.71 | 81,442,213.22 | 113,574,158.49 | 213,909,167.02 | 81,442,213.22 | 132,466,953.80 |
Total | 542,690,454.45 | 123,942,213.22 | 418,748,241.23 | 518,264,163.63 | 123,942,213.22 | 394,321,950.41 |
(1) Investments in subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Invested entity | Opening balance | Current increase | Current decrease | Ending balance | Impairment provi | Ending balance of |
sion accrued in the current period | impairment provisions | |||||
Hangzhou Proya Trade Co.,Ltd. | 32,241,059.09 | 2,338,647.32 | 1,468,369.21 | 33,111,337.20 | ||
Hanna Cosmetics Co., Ltd. | 2,094,048.00 | 2,094,048.00 | ||||
Zhejiang Meiligu Electronic Commerce Co., Ltd. | 26,913,422.69 | 19,870,916.12 | 3,208,555.13 | 43,575,783.68 | ||
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. | 21,393,476.00 | 21,393,476.00 | ||||
Shanghai Zhongwen Electronic Commerce Co., Ltd. | 5,929,948.75 | 936,247.72 | 6,866,196.47 | |||
Korea Younimi Cosmetics Co., Ltd. | 5,046,455.61 | 5,046,455.61 | ||||
Hong Kong Keshi Trading Co., Ltd. | 24,736,491.00 | 24,736,491.00 | ||||
Hong Kong Xinghuo Industry Limited | 10,185,924.00 | 10,185,924.00 | ||||
Ningbo TIMAGE Cosmetics Co., Ltd. | 61,330,669.19 | 756,966.23 | 62,087,635.42 | |||
Ningbo Keshi Trading Limited | 520,000.00 | 520,000.00 | ||||
Zhejiang Beauty Cosmetics Co., Ltd. | 10,181,983.21 | 10,181,983.21 | ||||
Ningbo Proya Enterprise Consulting Management Co., Ltd. | 19,558,487.33 | 24,613,354.27 | 272,867.22 | 43,898,974.38 | ||
Hangzhou Yizhuo Culture Media Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
Hangzhou Oumisi Trade Co., Ltd. | 3,900,000.00 | 3,900,000.00 |
Guangzhou Qianxi Network Technology Co., Ltd. | 1,000,000.00 | 1,000,000.00 | ||||
Zhejiang Qingya Culture Art Communication Co., Ltd. | 1,650,000.00 | 1,650,000.00 | ||||
Hangzhou Weiluoke Cosmetics Co., Ltd. | 500,000.00 | 500,000.00 | ||||
Singuladerm (Hangzhou) Cosmetics Co., Ltd. | 500,000.00 | 4,500,000.00 | 5,000,000.00 | |||
Proya (Hainan) Cosmetics Co., Ltd. | 100,000.00 | 100,000.00 | ||||
Hangzhou TIMAGE Cosmetics Co., Ltd. | 112,755.04 | 199,201.64 | 311,956.68 | |||
Hubei Laibo Information Co., Ltd. | 100,000.00 | 100,000.00 | ||||
Total | 304,354,996.61 | 53,315,333.30 | 9,996,247.17 | 347,674,082.74 | 42,500,000.00 |
(2) Investments in affiliates 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 the equity method | Other comprehensive income adjustments | Other changes in equity | Declared payment of cash dividends or profits | Impairment provision accrued | Other | ||||
I. Joint Venture | |||||||||||
Huzhou Panrui Industry Investment Partnership (Limited Partnership) | 3,068,948.16 | -8,956.25 | 3,059,991.91 | ||||||||
Subtotal | 3,068,948.16 | -8,956.25 | 3,059,991.91 | ||||||||
II. Affiliate | |||||||||||
Xiongke Culture Media (Hangzhou) Co., Ltd. | 2,649,619.70 | -31,784.81 | 2,617,834.89 | ||||||||
Jiaxing Woyong Investment Partnership (Limited Partnership) | 111,253,221.93 | 18,636,363.64 | -8,675,141.73 | -20,250,000.00 | 100,964,443.84 | ||||||
Zhuhai Haishilong Biotechnology Co., Ltd. | 10,576,298.67 | -8,175,090.89 | 2,401,207.78 | 81,442,213.22 |
Beijing Xiushi Cultural Development Co., Ltd. | 4,918,865.34 | -388,185.27 | 4,530,680.07 | ||||||||
Subtotal | 129,398,005.64 | 18,636,363.64 | -17,270,202.70 | -20,250,000.00 | 110,514,166.58 | 81,442,213.22 | |||||
Total | 132,466,953.80 | 18,636,363.64 | -17,279,158.95 | -20,250,000.00 | 113,574,158.49 | 81,442,213.22 |
(3). Information on impairment testing of long-term equity investments
□ Applicable √ Not applicable
Other explanations:
None
4. Operating revenue and costs
(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 | 4,208,203,129.11 | 1,951,916,303.90 | 3,061,899,622.39 | 1,407,736,680.98 |
Other business | 36,251,912.21 | 15,065,147.90 | 19,237,314.36 | 16,988,430.02 |
Total | 4,244,455,041.32 | 1,966,981,451.80 | 3,081,136,936.75 | 1,424,725,111.00 |
(2). Breakdown of operating revenue and costs
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
(5). Significant contract changes or significant transaction price adjustments
□ Applicable √ Not applicable
Other explanations:
1) Breakdown of income generated from contracts with clients by goods or service type
Item | Amount for the current period | Amount for the same period last year | ||
Revenue | Cost | Revenue | Cost | |
Products sales | 4,208,203,129.11 | 1,951,916,303.90 | 3,063,670,101.01 | 1,407,736,680.98 |
Other | 36,251,912.21 | 15,065,147.90 | 17,466,835.74 | 16,988,430.02 |
Item | Amount for the current period | Amount for the same period last year | ||
Revenue | Cost | Revenue | Cost | |
Subtotal | 4,244,455,041.32 | 1,966,981,451.80 | 3,081,136,936.75 | 1,424,725,111.00 |
2) Breakdown of income generated from contracts with clients 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 | 4,215,112,328.12 | 3,063,670,101.01 |
Income recognized in a certain period | 29,342,713.20 | 17,466,835.74 |
Subtotal | 4,244,455,041.32 | 3,081,136,936.75 |
3) Revenue recognized in the current period and included in the beginning carrying value of contractliabilities is RMB68,099,041.17.
5. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item | Amount incurred in the current period | Amount incurred in the previous period |
Long-term equity investment income calculated by applying the cost method | ||
Long-term equity investment income calculated by the equity method | -17,279,158.95 | -5,149,438.13 |
Investment income from disposal of long-term equity investment | -2,545,129.34 | 988,000.42 |
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 | -19,824,288.29 | -4,161,437.71 |
Other explanations:
None
6. Other
□ Applicable √ Not applicable
XX.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, including write-offs of provision for adjusted asset impairment | -703,593.33 | |
Government grants recognized in profit or loss for the current period (excluding government grants that are closely related to the Company’s business operations, compliant with national policies, granted at set standards, and imposing sustaining influence on the Company's gains and losses) | 44,043,618.77 | |
Gains or losses from change in fair value generated by financial assets and liabilities held by non-financial businesses as well as gains or losses from disposal of financial assets and liabilities | ||
Capital occupation fees charged to the non-financial enterprises and included in profit or loss for the current period | ||
Gains or losses from entrusting others with investment or asset management | ||
Gains or losses from outward entrusted loaning | ||
Asset loss incurred by force majeure such as natural disasters | ||
Reversal of impairment provisions of accounts receivable that have undergone impairment testing alone | 289,706.45 | |
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 | ||
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 from exchange of non-monetary assets | ||
Gains or losses from debt restructuring | ||
One-time expenses incurred due to the cessation of relevant business activities, such as staffing expenses | ||
One-time impact on current profit and loss due to the adjustments of taxes and accounting laws and regulations | ||
One-time share-based payment recognized for cancellation and modification of equity incentive plans | ||
Gains and losses from changes in the fair values of employee compensation payable for share-based payment in cash after the exercise date | ||
Gains or losses from changes in the fair values of Investment real estate that are subsequently |
measured using the fair value model | ||
Profits generated from transactions with unreasonable transaction price | ||
Gains or losses on contingencies that have no relation with the normal operation of the Company | ||
Custody fees of entrusted operation | ||
Other non-operating revenue and expenses besides the above items | -7,456,554.85 | |
Other items that conform to the definition of non-recurring profit or loss | -113,212.70 | Investment income from disposal of long-term equity investment |
Less: Effect of income tax | 10,105,613.47 | |
Effect of minority equity (after tax) | 6,230,469.38 | |
Total | 19,723,881.49 |
Impact of the implementation of the Explanatory Announcement on Information Disclosure forCompanies Offering Their Securities to the Public No.1 - Non-recurring Gains and Losses (Revised in2023) on the amount of non-recurring gains and losses for the year of 2022
Item | Amount |
Net non-recurring gains and losses attributable to owners of the parent company for the year of 2022 | 28,886,986.92 |
Net non-recurring gains and losses attributable to owners of the parent company for the year of 2022 calculated in accordance with the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Non-recurring Gains and Losses (Revised in 2023) | 28,474,794.06 |
Difference | 412,192.86 |
The reasons should be explained for the Company defining the non-recurring gains and losses items notlisted in the Explanatory Announcement on Information Disclosure for Companies Offering TheirSecurities to the Public No. 1 – Non-Recurring Gains and Losses as non-recurring gains and losses itemsof high value and defining the non-recurring profit and loss items listed in the same document asrecurring gains and losses items.
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
2. Return on equity 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 | 29.94 | 3.01 | 2.97 |
Net profits attributable to ordinary shareholders of the Company after deducting non-recurring gains and losses | 29.44 | 2.96 | 2.92 |
3. Differences in Accounting Data under Chinese and International Accounting Standards
□ Applicable √ Not applicable
4. Other
□ Applicable √ Not applicable
Chairman of the Board of Directors: HOU JunchengDate of submission approved by the Board of Directors: April 17, 2024
Revision information
□ Applicable √ Not applicable