Winner Medical Co., Ltd.Semi-Annual Report
Caring for health and life, making a better world
Section I Important Notes, Contents, and Definitions
Section IImportant Notes,Contents, and Definitions
100%Pure Cotton
2023 Semi-Annual Report
Important Notes
The Board of Directors, the Board of Supervisors and directors, supervisors and senior management of Winner Medicalhereby guarantee that the statement in this Semi-annual Report is authentric, accurate and complete without false ormisleading information or material omission and will assume all the legal liabilities, individually and jointly.Li Jianquan, the head of the Company, Fang Xiuyuan, the accounting head, and Wu Kezhen, the head of accounting body(accounting manager), guarantee the authenticity, accuracy, and completeness of the financial report in this semi-annualreport.All directors of the Company personally attended the board meeting for reviewing this semi-annual report.The forward-looking contents in this semi-annual report, such as the future development strategy and performance planning,are the goals sets by the Company, which are planned matters. The achievement of the goals depends on many factors,including market change, which is uncertain. So these contents are not the Company's profit forecast for the next year and donot constitute a substantial commitment of the Company to investors and related parties. Investors and related parties shouldbe fully aware of related risks and understand the differences among plans, forecasts, and commitments. Investors are askedto beware of investment risks!The Company does not plan to distribute cash dividends, issue bonus share, or increase the share capital from reserves.
Contents
Section I Important Notes, Contents, and Definitions ...... 2
Section II Company Profile and Major Financial Indicators ...... 6
Section III Management Discussion and Analysis ...... 11
Section IV Corporate governance ...... 50
Section V Environment and Social Responsibility ...... 53
Section VI Important Matters ...... 63
Section VII Changes in Shares and Shareholders ...... 69
Section VIII Information Related to Preferred Shares ...... 75
Section IX Information Related to Bonds ...... 76
Section X Financial Report ...... 77
2023 Semi-Annual Report
Document Catalog
(I) Financial statements containing the signatures and seals of the person in charge of the Company, the accounting head,and the person in charge of the accounting body (accounting manager).
(II) The originals of all Company documents and announcements publicly disclosed during the reporting period.
Definitions
| Term | Refers to | Definition |
| Company, Winner Medical |
Refers to Winner Medical Co., Ltd.
| Winner Group | Refers to | Winner Group Limited, a controlling shareholder of the Company |
| Reporting period | Refers to | From January 1, 2023 to June 30, 2023 |
Section II Company Profile and Major Financial Indicators
Section IICompany Profileand MajorFinancialIndicators
2023 Semi-Annual Report
I. Company Profile
| Stock abbreviation | Winner Medical | Stock code | 300888 |
| Stock exchange | Shenzhen Stock Exchange | ||
| Company name in Chinese | Winner Medical Co., Ltd. | ||
| Chinese abbreviation of the company (if any) | Winner Medical | ||
| Company name in foreign language (if any) | Winner Medical Co., Ltd. | ||
| Company short name in foreign language (if any) | Winner Medical | ||
| Legal representative of the Company | Li Jianquan |
II. Contacts and contact information
| Secretary to the Board of Directors | Securities affairs representative | |
| Name | Chen Huixuan | Liu Yanxiang, Zhang Heng |
Contact address
| F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen | F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen | |
| Tel | 0755-28066858 | 0755-28066858 |
| Fax | 0755-28134688 | 0755-28134688 |
| investor@winnermedical.com | investor@winnermedical.com |
III. Other Information
1. Contact information
Whether the Company's registered address, office address and postal code, company website and email were changed duringthe reporting period?Applicable ?Not applicableThere is no change in the Company's registered address, office address and postal code, company website and email duringthe reporting period, as shown in 2022 annual report.
2. Information disclosure and keeping place
Whether information disclosure and the place where the semi-annual report is kept were changed during the reporting period?Applicable ?Not applicableThe name and URL of the stock exchange website and media for publishing the semi-annual report, and the place where thesemi-annual report is kept were not changed during the reporting period. See the 2022 Annual Report for details.
3. Change of registration
Whether the registration status was changed during the reporting period?Applicable ?Not applicableThere were no changes in the Company's registration during the reporting period. See the 2022 Annual Report for details.IV. Major Accounting Data and Financial IndicatorsWhether the Company needs to retroactively adjust or restate the accounting data of the previous years?Yes ?NoRetroactive adjustment or restatement of reasonsChanges in accounting policies
Current reporting
period
Same period last year
in this reportingperiod compared
with the sameperiod of the
| previous year | ||||
| Before adjustments | After adjustments | After adjustments | ||
| Operating income (yuan) | 4,266,838,038.66 | 5,157,944,495.72 | 5,157,944,495.72 | -17.28% |
| Net profits attributable to shareholders of listed companies (yuan) |
681,617,022.69 892,823,503.14 892,823,503.14 -23.66%
of non-
| recurring profits and losses (yuan) |
550,058,459.19 820,558,767.23 820,558,767.23 -32.97%
158,178,712.89 801,150,899.38 801,150,899.38 -80.26%
| Net cash flow from operating activities (yuan) | ||||
| Basic EPS (yuan/share) | 1.1599 | 2.11932 | 1.5207 | -23.73% |
| Diluted EPS (yuan/share) | 1.1599 | 2.1193 | 1.5207 | -23.73% |
| Weighted average return on net assets | 5.71% | 8.17% | 8.17% | -2.46% |
End of the reporting
period
End of the previous year
at the end of thereporting periodcompared to the
end of the
| previous year | ||||
| Before adjustments | After adjustments | After adjustments | ||
| Total assets (yuan) | 17,288,335,748.63 | 18,237,749,401.56 | 18,363,337,775.74 | -5.85% |
| Net assets attributable to shareholders of listed companies (yuan) |
11,606,416,823.57 11,704,606,570.71 11,719,768,089.06 -0.97%Note: 1 Mainly decrease in payments received in advance from customers, higher payment of prior year’s taxes and goods inthe current period2 Earnings per share for previous periods are adjusted in parallel with the transfer of shares from capital surplusduring the period.
Reasons for changes in accounting policies and correction of accounting errorsOn 30 November 2022, the Ministry of Finance issued Interpretation No. 16 for the Accounting Standards for BusinessEnterprises, which stipulates the “accounting treatments for deferred income taxes associated with assets and liabilitiesarising from a single transaction to which the initial recognition exemption does not apply”, effective for the Company as of1 January 2023. For lease liabilities and right-of-use assets recognized at the beginning of the earliest period of financialstatement presentation in which the provision is first implemented that give rise to taxable temporary differences anddeductible temporary differences as a result of a single transaction to which the provision applies, the Company has adjustedthe cumulative effect to retained earnings at the beginning of the earliest period of financial statement presentation and otherrelevant financial statement items in accordance with the said provision and Accounting Standard No. 18 for BusinessEnterprises - Income Tax.V. Differences in Accounting Data under Domestic and Foreign Accounting
Standards
1. The difference between net profits and net assets in financial statements disclosed according to the International
Accounting Standards (IAS) and Chinese Accounting Standards simultaneously?Applicable ?Not applicableNo difference between net profits and net assets in financial statements disclosed according to the International AccountingStandards (IAS) and Chinese Accounting Standards during the reporting period.
2. The difference between net profits and net assets in financial statements disclosed according to the Overseas
Accounting Standards (IAS) and Chinese Accounting Standards simultaneously?Applicable ?Not applicableNo difference between net profits and net assets in financial statements disclosed according to the Overseas AccountingStandards and Chinese Accounting Standards during the reporting period.VI. Non-recurring Profit and Loss Items and Amount
?Applicable ?Not applicable
Unit: RMB
| Item | Amount | Description |
| Profits and losses on the disposal of non-current assets (including the write-off part of the provision for asset impairment) |
3,740,723.17
and continuously granted in accordance with a certain standard
| quota or amount. |
46,758,694.51
holding trading financial assets and trading financial
| liabilities, as well as the investment income from disposal of trading financial assets, trading financial liabilities and available-for-sale financial assets |
97,471,458.42
| Income and expenditure other than those mentioned above | 3,301,678.67 | |
| Less: Amount affected by income tax | 23,439,559.06 | |
| Amount of minority shareholders' equity affected (after tax) | -3,725,567.79 | |
| Total | 131,558,563.50 |
Other profit and loss items that are consistent with the definition of non-recurring profit and loss:
?Applicable ?Not applicableThere was no other profit and loss items that are consistent with the definition of non-recurring profit and loss.Explanation on defining the non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 onInformation Disclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses as recurring profit andloss items?Applicable ?Not applicableNo definition of non-recurrent profit and loss items enumerated in the “Interpretative Announcement No. 1 on InformationDisclosure of Public Securities Issuing Companies - Non-recurrent Profits and Losses” as recurring profit and loss itemsduring the reporting period.
Section III Management Discussion and Analysis
Section IIIManagementDiscussion andAnalysis
I. Main Business of the Company during Reporting PeriodWinner Medical is a health enterprise developing both medical and consumption products under its brands of "Winner" and"Purcotton". Specifically, the Company has been adhering to the core business principle of "Quality before profit, brandbefore speed, social value before corporate value". Through continuous innovation and expansion of industrial boundaries,the Company has developed from a single manufacturer of medical consumables into a large medical health enterprisecovering wound care, infection prevention, personal care, home care, maternal and child care, home textile and clothing andother fields.
1. Medical consumables section
Winner Medical is a benchmarking enterprise in the domestic medical consumables industry. Its main product lines coverwound care, infection prevention and health & personal care. The specific products include high-end wound dressingproducts, traditional wound care and dressing products, consumable products in operating room, infection preventionproducts and health & personal care products.The Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain coveringcotton procurement, R&D, production, and direct export. The Company’s products have been certified by the EU CEcertification, the US FDA certification and the Japanese Ministry of Health, Labour and Welfare certification, and exportedto Europe, America, Japan and other countries. In 2005, “Winner” brand entered the domestic hospital and drugstore market.With its excellent product quality and service, Winner Medical gradually established a good brand and reputation in domestichospitals and drugstores. Since the outbreak of public health incident, the “Winner” brand epidemic prevention products haveentered the hospital and the civilian market. Thanks to its public commitment not to increase prices and the quality of itsproducts, it has won the unanimous praise at home and abroad, from government units and the public, and the brandreputation and popularity have been greatly improved.In terms of products, Winner Medical focuses on market demand, is close to clinical and terminal, is driven by R&D andinnovation, and constantly improves product layout. Its business scope extends from sales of single wound care products suchas cotton gauze to sales of integrated solutions of wound care, infection prevention, and health & personal care products.Disposable operating room consumables can more effectively reduce nosocomial infection than reusable medical products.With more attention of the state and hospitals to nosocomial infection and residents’ attention to personal health environment,disposable operating room consumables are gradually accepted by the domestic market. Winner Medical's medical dressingproduct line has been expanded from traditional dressing products mainly focusing on gauze products to high-end wounddressing products, such as silica gel foam dressing, hydrocolloid dressing, super absorbent pad, negative pressure drainageproducts, etc., which are mainly applied to chronic wound healing scenes such as diabetes, large-area burns and wounds. TheCompany’s technical level in the field of high-end wound dressings has been in the forefront of the industry, and is expectedto become the core products for the development of Winner Medical.
Medical cotton, gauze, bandages, etc.Traditional wound care andwound dressing products
Silicone dressings, alginate dressings,superabsorbent dressings etc.High-end wound dressingproducts
Surgical gloves, surgical packs, surgical
gowns, etc.Consumables in theoperating room
Masks, protective clothing, isolation
gowns, etc.Infection protection
Incontinence care, oral and nasalproducts, hands-free disinfection gel, etc.Health & personalcare
Injection and puncture products, test kits,
etc.Other products
Cotton tissues, wet tissues etc.Wet and dry cottontissues
Sanitary pads,disposable period panties
etc.Sanitary pads
Facial mask, makeup cotton, cottondiapers etc.Other non-wovenproducts
Baby's leisure wear, bath towels and
quilts etc.Baby clothing andsupplies
Adult's leisure wear, outing costume,underwear etc.Adult clothing
Bedding, bathroom accessories, etc.Other woven products
MedicalconsumablesWinner
Healthy
consumer
goods
Winner Medical
Purcotton
2. Healthy Consumer Goods Section
Purcotton is a healthy life brand with “Medical background, Purcotton philosophy, Quality in our DNA” as its corecompetitiveness, which starts with pure cotton spunlace non-woven fabric and takes “medicine close to life, Purcotton carefor health” as its brand proposition. Its products include pure cotton tissue, sanitary pads with pure cotton surface, pure cottonwet tissues and other non-woven consumer goods, as well as textile consumer goods such as baby supplies, clothing, hometextiles and garments. Purcotton advocates the life concept of "comfort, health, environmental protection", replacingchemical fiber with cotton and keeping away from chemical stimulation. It provides overall solutions for different life scenes,having a good user reputation and formed a fully differentiated brand image in the field of consumer goods with strong brandappeal.
In terms of products, with excellent quality control ability and technology research and development ability, the Companycontinues to introduce medical grade quality consumer goods. Cotton is the main raw material of core products of Purcotton,which adopts global high-quality cotton to control product quality and safety from the source. According to the high standardof medical consumables, all kinds of pollution sources are strictly controlled in the production process. Disposable underwear,newborn baby clothes and other close-fitting clothing are packaged with medical grade sterilization to further ensure thesafety and environmental protection of the products. Purcotton products cover multiple consumer groups, such as mothersand infants, children and adults, and span multiple product lines, such as high-end pure cotton tissues, female care, baby care,home textile products and clothing.
(II) Main Products and PurposesThe product categories of the medical consumables segment are divided into traditional wound care and dressing, high-endwound dressing, consumables in the operating room, infection prevention, health and personal care and other products; theproduct categories of the healthy consumer products segment are divided into wet and dry wipes, sanitary pads, other non-woven products, baby apparel and products, adult apparel and other textile products.The main categories and images of some products under the Company's medical consumables section are as follows:
| Product Category | Main Purpose | Product | Image of Some Products |
| Traditional wound care and wound dressing |
products
protection
| For absorbing wound exudate, dressing wounds, and sports | Medical cotton, gauze, bandages, |
etc.
High-
| end wound |
dressing products
interface to optimize its
| benefits for wound healing, reduce the frequency of dressing replacement, and reduce secondary |
damage
dressings, superabs
| orbent |
dressings etc.
| Product Category | Main Purpose | Product | Image of Some Products |
| Consumables in the |
operating room
operating room
| For preventing infections in the | Surgical gloves, surgical packs, |
surgical gowns, etc.
Infection protection
| For occupational protection of medical staff and patient |
isolation
straps, hats, etc.
| Masks, protective clothing, isolation gowns, gloves, foot |
Health & personal care
daily health care
| For wound cleaning and disinfection, and | Incontinence care, oral and nasal |
products, hands-
gel, alcohol disinfection
| tablets, |
band-aids, etc
Other products
| For health management to meet their medical |
needs
test kits, etc.
| Injection and puncture products, |
The main categories and images of some products under the company's healthy consumer goods section are as follows:
| Product Category | Product | Image of Some Products |
Wet and dry cotton tissues Cotton tissues, wet tissues etc.
Sanitary pads Sanitary pads,disposable period panties etc.
Other non-woven products
disposable underwear, etc.
| Facial mask, makeup cotton, cotton diapers, |
Baby clothing and supplies
bath towels, handkerchiefs and quilts, etc.
| Baby's leisure wear, outing costume, underwear, |
| Product Category | Product | Image of Some Products |
Adult clothing
footwear, etc.
| Adult's leisure wear, outing costume, underwear, |
Other woven products Bedding, bathroom accessories, etc.
(III) Main Operating Modes
1. Procurement mode
The Company promotes digital platform management and has established a robust procurement management system,procurement process, and risk control platform. Procurement is driven by planning, with procurement plans and strategiesformulated based on annual, quarterly, and monthly demands. Different modes of procurement are implemented according tothe types of materials required, including strategic procurement, centralized procurement, and decentralized procurement.Based on purchasing requirements, technical standards are determined through a combination of research and development,product analysis, and quality assessment. Procurement plans are then developed which include vendor selection, pricenegotiations, quota allocation, arrival schedules and payment terms. In the pursuit of a sustainable supply chain ecosystem,collaborative suppliers across product development, manufacturing, procurement fulfillment and other domains remainsteadfast in their commitment to achieving low carbon emissions, cost-effectiveness, transparency and social responsibility.
1) Responsible procurement: The Company mandates that the demand department submit procurement requests based on
customer orders, sales plans, and production plans. Upon approval of these requests and analysis of market conditions for rawmaterials and auxiliary supplies, the purchasing department will develop appropriate strategies for procuring differentmaterials. These group purchasing strategies may include strategic procurement, bidding procurement, centralizedprocurement and decentralized procurement. For example, adopt strategic sourcing rules for bulk raw materials (e.g. cotton,cotton yarn, etc.); implement risk level management for outsourced materials, and provide standard technical documents andquality testing standards for each product. From demand identification, sourcing, quotation comparison and selection,contract negotiation and signing, purchase order issuance and approval, goods receipt and warehousing management toinvoice reconciliation and payment application, the entire procurement process is visualized for easy supervision. Allprocurement activities must be strictly implemented in accordance with the established procurement management system.
2) Purchasing control process: The principle of transparency and quality priority is adopted to ensure the reliability of
product quality and stability of supply, while also maintaining the ability to respond to changes in the external market andsupport ongoing enterprise development. The Company has established a complete procurement management system, whichmainly includes the Procurement Control Process, Procurement Price Management Process, New Supplier Selection andReview Control Process, Supplier Performance Appraisal Management Process, and the Company also has made a QualifiedSupplier Directory.
3) Supply resources classification management: according to the Company's development, match the corresponding supplier
resources, cooperate with suppliers to seek win-win result, adopt different supplier cooperation strategies and reservecorresponding supply resources for different materials. Perform classification and dynamic management of existing and newsuppliers, prioritize cooperation with suppliers with higher evaluation scores, and ensure that key materials are provided atleast by two qualified suppliers, thereby reducing supply risk through competition among multiple suppliers. We alsoregularly assess material supply risks and timely adjust our procurement strategy to supplement our reserve suppliers andminimize supply risks.
4) Qualification review: For new suppliers, the Company has made strict selection criteria and supplier development and
process management systems, including supplier qualification review, and on-site inspection on suppliers (such as medicalproduction license, medical production registration certificate, ISO13485, TUV or CE certification); for suppliers with pooror even unqualified annual performance, the Company will add them to the key watch list or eliminate them.
5) Sustainable supply chain: The Company keeps improving its green and sustainable development, such as cooperation with
schools and hospitals. We are also working with the upstream and downstream of the supply chain to further promotesustainable development. For example, we have promoted the project of product package de-plasticization; multiplecategories of Purcotton products have obtained carbon footprint certification; we optimize product process to minimize theuse of energy, and upgrade the production equipment to enable energy recovery and reuse.
2. Production mode
Aligned with the Company's business strategy objectives, and directed by the Company-level S & OP sales and operationplan, we formulate medium and long-term strategic plans and short-term production and procurement plans according to theCompany's development and customer demand. We also coordinate all related upstream and downstream departments toensure the balance from front-end demand to supply and delivery. In the process of order fulfillment, we match capacityaccording to the characteristics of different demands and in combination of the actual supply of human, machine, material,method and environment. Through the flexible deployment of different production modes (MTO (Make to Order), MTS(Make to Store), ETO (Design to Order) and ATO (Assemble to Order)), we continuously improve our service level to meetcustomer demands and create value for customers.
1) In the production mode of Make to Order MTO, products are produced according to the customer's original product design;
procurement is performed according to the BOM for the accepted order. Therefore, inventory basically remains zero. ForOEM customer orders, as the market constantly reduces delivery cycle, it is common now to combine MTO & MTSproduction modes.
2) In the production mode of Make to Stock MTS, products are not customized for specific customers, and are usually
delivered to different customers; production plans are formulated according to market demand and existing inventory. Safeinventory is determined for such products according to the production cycle and the frequency of demand to ensure thatproducts are available when the customer places order.
3) In the mode of Engineer to Order, specific design requirements from a single customer can be met, usually for small
production lots; in the production process, the value mainly lies in product and packaging design work. Support for customdesign is an important part of this production mode. Inventory basically remains zero.
4) In the Assemble to Order mode, the components required for the production of finished products are stocked in advance.
When the customer places order, products can be assembled quickly to meet flexible delivery demands. Common materialsare stocked in advance to maintain balance between rapid delivery and inventory.
3. Sales mode
The Company sells products through multiple channels. The main sales channels are shown in the following figure:
4. Marketing mode
The Company is developing its products under the Winner Medical and Purcotton in a coordinated way. With 30 years ofexperience in the production of medical supplies, Winner is a leading medical consumables brand in the Chinese market anda brand with a global vision. With "caring for health and life, making a better world" as its vision and industry-leadingproduct quality as the cornerstone of its brand value, the product marketing and promotion for the brand rely more on itsbrand reputation. With pure cotton products as its label, Purcotton ad opts unique, differentiated strategies to build its brand.By integrating multiple promotion channels such as directly-operated stores, brand roadshows, celebrity endorsements, eventsponsorship, new media, and advertising, Purcotton keeps conveying to consumers its proposition of "medicine close to life,Purcotton care for health" and its vision of "changing the world with pure cotton", which helps deepen the meaning ofPurcotton brand and increase its brand awareness and loyalty.(IV) Main Driving Factors of Performance
1. Medical consumables industry and consumer goods industry will keep growing rapidly
As the global demand for healthcare of aging population increases, and medical and healthcare improve, the global medicalconsumables market is showing a steady growth trend. The use rate of disposable medical consumables and disposablesurgical packs will get higher; on the other hand, as the Chinese government attaches importance to the medical consumablesindustry, the supervision over the industry are continuously strengthened while the reserves of medical consumables areincreasing. Therefore, companies that do not comply with laws and regulations will surely be eliminated. In addition, China'smedical dressings are changing from traditional dressings to high-end wound dressings, and it is expected to replace importeddressings by domestic dressings step by step. After the occurrence of public health incident, the government, health careprofessionals, and consumers pay more attention to health protection and quality, and the demand for masks has increasedsignificantly compared to the pre-public health incident. The medical consumables market in China is growing rapidly,creating a good external environment for enterprise development.
Third-party B2C platforms, such as Tmall,
JD.com and Amazon
HospitalsPharmacy/convenience storesGovernment and enterpriseplatformPrivate brandOEM/ODM salesTmall, JD.com and other traditional e-commerce platformsTikTok, Kuaishou and other interest e-commerce platformsOfficial shopping mall and Wechatmini programs of PurcottonDirectly operated and franchised chain
storesSupermarkets, convenience stores andbeauty storesReal stores
E-commerceplatforms
Overseas salesDomestic salesMedicalconsumables
Winner
Healthyconsumergoods
Offline channels
Online channels
Offline channels
Online channels
On October 25, 2021, the CPC Central Committee and the State Council officially announced the "Opinions on the complete,accurate and comprehensive implementation of the new development concept to achieve carbon peak and carbon neutrality".It is pointed out that strengthening China's green and low-carbon technological innovation and continuously expanding greenand low-carbon industries will accelerate the formation of new drivers and sustainable growth poles of green economy. Wewill significantly improve the quality and efficiency of economic and social development and provide strong impetus to buildChina into a great modern socialist country in all respects. On December 4, 2021, the National Development and ReformCommission, together with nine departments including the Ministry of Ecology and Environment, jointly issued the "14thFive-Year Plan for Promoting Clean Production", with the core objectives of basically establishing the system of cleanproduction, significantly improving the overall level of clean production, and growing the clean production industry. It is ofpositive significance to help achieve the goal of carbon peak, carbon neutrality, and promote green development. In recentyears, the total retail sales of consumer goods in China has been rising steadily. As people grow more confident on thenational culture, the domestic goods have injected new vitality into the national economy, becoming an important drivingforce to promote consumption and expand domestic demand. At the same time, consumers are increasingly concerned aboutthe environmental performance and sustainability of products, and the rise of environmental protection and low carbonconcept is also driving the transformation and upgrading of the consumer goods industry.
2. High-quality products and precise brand positioning enhance brand value
The Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain coveringcotton procurement, R&D, production, and direct export. The Company is one of the early companies that established amedical-grade quality management system in the industry, and has passed the ISO13485 Medical Devices QualityManagement System Certification. Its product quality complies with the European, American, Japanese, and Chinesestandards. Winner Medical enjoys a high brand reputation and recognition. In May 2021, Winner Medical was selected bythe Federation of Shenzhen Industries as the "Benchmarking Enterprise in China's Medical Consumables Sector" and at thesame time recognized as an "International Renowned Brand" by the United Nations Industrial Development Organization. InDecember 2021, "pure cotton spunlace non-woven fabrics and its products" of Winner Medical was awarded as the nationalsingle champion of manufacturing industry. In April 2022, Winner Medical was awarded the honor of "National PioneerWorker" by the All-China Federation of Trade Unions. Winner Medical has expanded its business from the medical field tothe consumer goods field, which has also increased the brand value of its consumer products.Purcotton is committed to fulfilling consumers’ demand for high-quality products which are “comfortable, healthy, andenvironmentally friendly”. Constantly winning recognition from consumers since its launch in 2009, Purcotton has rapidlygrown into a top brand of maternal and child products on Tmall, and has gained greater market shares in the field of maternaland child consumer products. In October 2019, Purcotton won the reputation of "70 Brand of the 70th Anniversary of theFounding of New China" sponsored by CCTV. In January 2021, Purcotton was honored as one of the "Shenzhen TopBrands" by Federation of Shenzhen Industries. In April 2021, Purcotton was included into the list of the second "ShenzhenTop 100 Brands" announced by Shenzhen Quality City Promotion Association.In conclusion, with high brand value, the Winner Medical and Purcotton brands will help the Company enhance customerloyalty, stabilize product prices, and expand its market share in the competitive market, thereby ensuring its sustainable andstable profitability.The Company needs to comply with the disclosure requirements of the "Medical Device Business" stipulated in the No. 4Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by GrowthEnterprises:
The Company needs to comply with the disclosure requirements of the "Textile and Apparel Business" stipulated in the No. 3Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.II. Analysis of Core Competitiveness
1. Advantages of Business Philosophy and Corporate Culture
With offering quality products as its mission, the Winner Medical brand aims to lead in the medical dressing industry, togrow from a small Chinese enterprise offering lower-price products to a large international enterprise offering high-qualityproducts recognized by developed countries, bringing Chinese medical dressings to the international stage. With "caring forhealth and life, making a better world" as its vision, the brand keeps focusing on product quantity and innovations, andmaking its way into the medical consumables and high-end medical dressing market. Through the "internal growth+ externalgrowth" approach, the Company is committed to taking the lead in the field of medical consumables and providing one-stopmedical consumables solutions. With its corporate vision of "changing the world with pure cotton", Purcotton advocates alifestyle with pure cotton by applying "comfortable, healthy, and environmentally friendly" in all aspects of daily life, anddeliver the brand concept of "reassurance, happiness and sustainability" to consumers. Sticking to the "cotton fiber only"principle in its operation, Purcotton aims to develop recyclable and renewable resources, gradually replace chemical fiberswith natural fibers, and give full play to the use value and environmental protection value of cotton fibers, following the pathof low carbon, environmental friendly and sustainable development. The visions and business philosophies regarding theCompany's two brands are focused on human health, environmental protection, and improving the quality of life, which arein line with humans' sustainable development strategy.
The Company will always uphold its core operating principle of “prioritizing quality over profit, brand over speed, and socialvalue over corporate value”, and stick by its core values of "hard work, self-criticism, exploration and innovation, andsustainable development". The Company promotes healthy sports such as running, mountain climbing, and ball games. TheCompany is weakening the power from titles to reduce bureaucracy, and creating open workplaces to ensure efficient cross-department communication.
2. Advantages of R&D and Innovation
The Company independently developed the pure cotton spunlace non-woven technology in 2005, and has built a completetechnology cluster based on the technology, obtaining patent licenses in more than 30 countries and regions including theUnited States, Europe, and Japan. The silica gel foam dressing and foam dressings successfully developed and launched bythe Company have been awarded with China's registration certificate for Class II and Class III medical devices respectively.In the first half of this year, relying on the success of last year's research and development of a variety of core basic materialsand mass production and application, the company continued to improve the second generation of high-end wet wounddressings product line technology arrangements, had the scar repair new products successfully marketed in China, andobtained access qualification for a variety of newly developed antibacterial dressings from the U.S. FDA in the first half ofthis year. In the field of medical consumables, the company focused on the development of core basic materials in the firsthalf of the year on the application of operating room consumables such as surgical gowns, isolation gowns, surgical towelsand wipes, to enhance the comfort of the products, reduce the cost of production of the products, and to further enhance themarket competitiveness of the products. It was invited to participate in the formulation of many national standards andindustry standards, including the performance requirements of pure cotton nonwoven surgical dressings, and technicalspecifications for contact layer dressings and masks for children. In the field of consumer products, the Company hasdeveloped pure cotton tissues, pure cotton wet tissues, sanitary pads with pure cotton surface, as well as disposal cleansingtowels, disposable underwear and other products. As the first and major drafter, Purcotton, a wholly-owned subsidiary of theCompany, led the development of national standards for cotton tissues (GB/T 40276-2021), which requires that the fibercomposition and content of cotton tissues shall be identified, and the fiber content tolerance shall comply with the provisionsof GB/T 29862 (implemented on December 1, 2021).Since its establishment, the Company has been attaching great importance to scientific and technological innovation andcooperation. It has carried out industry–university–research (IUR) projects with many universities and research institutes,including Hong Kong Polytechnic University, Hong Kong Research Institute of Textiles and Apparel, Wuhan TextileUniversity, and Soochow University. In January 2022, the Company and Huazhong Agricultural University jointlyestablished the Cotton Research Institute and appointed Prof. Zhang Xianlong as the Chief Cotton Scientist of Purcotton tocooperate in research and development. The research institute relies on biological breeding technology to cultivate cottonstrains that are exclusive to cotton, and to discover cotton strains that are specialized for spunlace nonwoven fabrics. In June2022, the Company, together with Wuhan Textile University and Huazhong University of Science and Technology, jointlydeclared a major science and technology project in Hubei to promote the industrialization of the currently developedcorrugated structure with slow-release function artificial blood vessels and polyester large-caliber woven artificial bloodvessels, so as to realize the domestic replacement of artificial blood vessels early, solve the bottleneck project in China, andbetter serve patients with vascular diseases. In addition, the Company also joined hands with Wuhan Textile University to setup the Innovation Research Institute of Winner Medical & Wuhan Textile University to accelerate the transformation ofscientific and technological achievements. Xu Weilin, academician of the Chinese Academy of Engineering, deputy partysecretary and principal of Wuhan Textile University, was appointed as the president of the Research Institute.As of June 30, 2023, the Company obtained 95 patents for inventions, 726 patents for utility models, and 375 design patentsin China; and obtained 31 patents for inventions and 7 patents for utility models overseas. The Company was regarded as a“Leading Enterprise in Independent Innovation” by the Shenzhen Municipal People's Government, and a “ShenzhenEnterprise with Intellectual Property Advantages” by the Shenzhen Administration for Market Regulation.
3. Advantages of quality control
With a history of more than 30 years since its establishment, Winner Medical has achieved sustainable development andmaintained a leading position in the industry. It is inseparable from the Company's three core principles of "quality overprofit, brand over speed, social value over corporate value". In this context, the quality policy of "Rigorous work, strictcompliance with laws and regulations, and continuously improve to win the full trust of customers" was formed and has beenimplemented to date. Based on this guideline, Winner Medical Group has adopted EN ISO13485:2016 (ISO13485:2016),China's Medical Device Manufacturing Quality Management Practice, the United States 21 CFR Part 820, and the EuropeanUnion MDD (DIRECTIVE 93/42/EEC), EU MDR (REGULATION (EU) 2017/745) and EU PPE (REGULATION (EU)2016/425) as cornerstones, forming a quality management system model based on process management. Under this model,Winner Medical focuses on the research of product quality standards and regulatory requirements of differentcountries/regions, and actively passes the corresponding product registration/certification procedures. It has obtained productaccess qualifications in China, EU, USA, Japan, UK, Switzerland, Russia, Australia, Malaysia, Thailand, Saudi Arabia andother countries/regions, providing domestic and foreign customers with high quality products and good after-sales service. Atthe same time, Winner Medical has been committed to building professional, reliable and comprehensive product qualitytesting capabilities. The Company's R&D center laboratory and Jingmen Winner Laboratory have been accredited by theChina National Accreditation Service for Conformity Assessment (CNAS). With professional and reliable product testingcapabilities, it not only provides guarantee for product quality control, but also serves as a source of data for continuousproduct improvement.
To ensure the safety of raw materials for its products, Purcotton uses high-quality cotton from around the world to produce itscore products, such as its pure cotton tissue, sanitary pads with pure cotton surface, and pure cotton wet tissues. All theworkshops are managed according to the management requirements for the workshops of medical dressings, which can helpstrictly control bacterial contamination and pollution sources. With its strict quantity management control system, Purcottonis able to provide customers with high-quality consumer goods that are safe and environmentally friendly. Adhering to theconcept of "medicine close to life, Purcotton care for health", Purcotton not only applies quality natural cotton but alsoattaches importance to the environmental friendly weaving and finishing process. To ensure that its products are ecologicallysafe, no fluorescent brighteners are added to its products. Some of its products are OEKO-TEX Standard 100 certified. Somenon-woven products have passed the testing performed in accordance with the EU AP (2002) 1 and EC1935/2004 EU FoodContact Materials Regulation.
4. Product advantages
(1) Medical consumables
The Company's product categories include high-end wound dressing products, traditional wound care and dressing products,consumable products in operating room, infection protection products and health & personal care products, coveringapplication scenarios like clinical and medical institutions and families, which can better meet clients' needs of one-stopprocurement. In addition to traditional wound care products and dressing products, the Company has also developedrepresentative high-end wet dressings like silicone foam dressings, hydrocolloid dressings, super absorbent pads and scarrepair sheet for chronic wounds that are difficult to heal, which has further enrich its products. For the clinical use scenarios,the Company is committed to changing from selling single products to providing customers with integrated solutions. Itsinfection prevention products include dozens of surgical packs for various sections, such as heart and brain, abdominal cavity,urology, reproduction, facial features, and limbs. In terms of protective products, the Company has successfully developedand marketed biodegradable masks, N95 medical protective masks of high permeability and other products, providingsolutions for the environmental attributes of mask products and greatly enhancing the comfort of mask products. In the fieldof home care, the Company provides professional products for clinical use such as hyaluronic acid masks, saline cleaningpads, hydrocolloid band-aids and medical sheet masks to consumers through portable, sterilized and diversified packages.These professional health care products and services in daily home care help customers reduce the frequency of going to thehospital.
(2) Healthy consumer goods
The Company's healthy consumer goods consist of non-woven consumer goods and textile consumer goods. Non-wovenconsumer products mainly include wet and dry cotton towels, sanitary pads, etc.; textile consumer products mainly includebaby clothing and supplies, adult clothing and other textile products. Cotton fiber has ten prominent advantages, includingnatural, safe, comfortable, naturally degradable, high output ratio, drought-resistant, salt and alkali-resistant, environmentallyfriendly, time-honored, as well as great economic and social value. The Company takes the lead in proposing the innovativeconcept of replacing chemical fibers with cotton and getting rid of chemical stimulation, and provides consumers withhealthy, comfortable and environmentally friendly consumer goods. And its cotton tissues are pioneering tissues in theindustry, which can partially replace household paper. Pure cotton tissues are made of degradable cotton after physicalprocessing. There are less chemical stimulation and the tissues can be reused. The tissues are more comfortable, safe, andenvironmentally friendly, so consumer acceptance of the tissues has been significantly improved, and there are manyimitators in the market. For pure cotton wet tissues and sanitary pads with pure cotton surface, cotton materials areinnovatively used in the parts of these products that contact human skin to replace traditional chemical fiber and effectivelyreduce chemical irritation, so they are popular in the markets of baby and female consumers. Due to the excellentbreathability and softness of gauze fabrics, the Company's clothing and textile consumer products such as gauze children'schildren's clothing, household clothing, bedding and bath towels are getting more popular.
5. Brand advantages
(1) Brand advantages in the field of medical consumables
As a benchmark enterprise in the domestic medical consumables industry, the Company takes “leading products withoperational excellence” as its core strategy, and through a variety of ways, such as holding exhibitions worldwide andlaunching the wound care training base of “Winner Medical Academy”, it has the brand of “Winner Medical” has gainedwide recognition in the medical field, and the business philosophy and product quality trusted by domestic and foreigncustomers. The Company's medical consumables are mainly sold to 110 countries, mainly developed countries and regionssuch as Europe, Japan and the United States, and the products under its brand Winner are mainly sold to developing countriesand regions such as Asia, Africa, and Latin America. The Company are providing services for world-renowned medicalsupplies companies such as M?lnlycke, Lohmann, and PAUL HARTMANN. According to statistics from the China Chamberof Commerce for Import and Export of Medicines and Health Products (CCCMHPIE), the Company has been ranked amongthe top three exporters of Chinese medical dressings for many consecutive years. The products of “Winner Medical” brandshave covered all public and most private hospitals in Hong Kong. In April 2023, Winner Medical was ranked 61st on the listof the top 100 medical device companies in the world by Medical Device+Diagnostic Industry.
(2) Brand advantages in the field of healthy consumer goods
Purcotton is a wholly owned subsidiary of Winner Medical. With high quality cotton as the core material, Purcotton insistson prioritizing quality with heart and soul, bringing comfortable, healthy and environmentally friendly cotton lifestyle toconsumers. Purcotton products have been recognized and trusted by more than 48 million members. Adhering to the brandconcept of “reassurance, happiness and sustainability”, Purcotton advocates the public to use more cotton, reduceenvironmental pollution and return to the natural way of life. The all-cotton tissues developed by Purcotton is a pioneeringcategory. Purcotton are creating new categories and lifestyles by applying cotton materials in its core products, such as its all-cotton cotton wet wipes, sanitary pads with pure cotton surface, pure cotton diapers, and its gauze textile products andclothing. It has shaped a brand image of “new Chinese products” with cotton as the core material and excellent productquality. Its brand awareness is increasing and its reputation is improving year by year, forming effective competition barriersand bringing powerful added value of products for Purcotton.
6. Advantages of sales channels
(3) Advantages of online channels
In terms of online channels, the Company's "Winner Medical" and "Purcotton" have completed the deployment ofmainstream third-party e-commerce platforms, including Tmall, Jd.com, Pinduoduo, Vipshop and Amazon. With the hugeuser traffic gathered, its sales has covered most online shopping consumer groups, and the sales data indicated that the salesof its products rank among the top in the relevant product categories in major e-commerce platforms. With the attributes of"sales + social", Purcotton's official website and WeChat mini programs are important platforms for its product display, userinteraction, and brand promotion. At the same time, Purcotton is also cooperating with new social retail platforms such as TikTok, Kuaishou and Xiaohongshu, which helps it open up new sales growth channels.
(4) Advantages of offline channels
In the medical consumables section, the Company has covered more than 1,000 medical institutions and 170,000 retailpharmacies in China; foreign medical business customers and distributors have covered more than a hundred of countries andregions such as Europe, Japan and the United States.In the healthy consumer goods section, as of June 30, 2023, Purcotton has opened 353 offline stores (including 44 franchisees)in more than 80 mid- and high-end shopping malls in Shenzhen, Shanghai, Beijing, Guangzhou and other key cities in China.The Company integrates its brand concept into its store design. It hires well-known designers at home and abroad to upgradeits store image and to enhance its consumer experience with an exhibition-style product display balancing both aesthetics andrichness of products. It also adds an experience area to highlight product display and consumer experience, which has helpedincrease the Company's sales revenue and further increase its brand awareness.
As for offline terminals like chain stores and supermarkets, based on Purcotton's positioning of high-quality consumer goods,the Company mainly deploys Purcotton products in well-known supermarket chain, high-end boutique supermarkets, localleading supermarkets and chain convenient stores. Meanwhile, the Company also has set up dedicated sales teams to coverthe bulk purchase or customized purchase needs of corporate clients. The Company's core products, such as Purcotton'scotton tissue and Nice Princess, have successfully entered supermarket chains, convenience store chains and offline maternal& infant stores and communities, including about 17,000 outlets of Wal-Mart, China Resources Vanguard, Rt-Mart, Rainbow,Ole' Supermarket, Sam's Clubs, and other mainstream supermarket chains, over 17,700 outlets of Meiyijia, 7-11, Rosen,Convenience Bee, Today, Every Day, Hong Qi and other convenience store chains, as well as over 6,600 beauty stores andoffline maternal & infant stores such as Watsons, Kidswant and MAM & BAB.
(5) Advantages of integration between online and offline channels
The omnichannel retail model is a newly emerging retail form that provides consumers with a consistent shopping experienceby integrating physical stores, third-party e-commerce platforms, and mobile e-commerce channels. In such form, theconvenience of online channels and the consumer experience of offline channels can complement each other. Having a deepinsight into the development trend of integrating online and offline omni-channel integration, the Company thoroughlyoptimized and integrated various channels to integrate traffic and sales of offline stores, supermarkets, stores and online apps,and home delivery platforms (Meituan, daojia.jd.com, and ele.me, etc.), thereby further improving its operating efficiencyand performance. Online channels can meet offline consumers subsequent consumption needs while offline channels canprovide online consumers further product information and service experience. Flows of traffics can be directed between thetwo kinds of channels, so online and offline traffic can be effectively obtained. As of June 30, 2023, the number of domain-wide Purcotton users has exceeded 48 million, including over 24 million registered members of its private platforms (1.1million store registered members, and over 1.3 million registered members of its official website and apps).
7. Advantages of full industrial chain
Adhering to the business philosophy of "Quality before profit", the Company has been constantly improving its productquality, cost and delivery management and control, and has built a full industrial chain with advantages from procurement,production, sterilization, warehousing, to delivery. The Company has eleven wholly-owned production subsidiaries, coveringa total area of more than 1 million square meters, including 105,000 square meters of clean workshops, supplying largequantities of high-quality medical supplies and daily necessities around the world each year. Established in 2005 with an areaof 550,000 square meters, Winner Medical (Huanggang) is the main production site of pure cotton spunlace non-wovenfabrics, cotton tissues, sanitary pads, and masks; with an area of 67,000 square meters, Winner Medical (Jingmen) is the mainproduction site of gauze clothing, degreased medical bleached gauze, and dyed medical gauze; with an area of 93,000 squaremeters, Winner Medical (Jiayu) has four product categories with pure cotton as basic materials, i.e. the cleaning, disinfection,beauty, and care categories, and two product collections: medical and daily use products; established in 2001 with an area of140,000 square meters, Winner Medical (Chongyang) is the Company's main force of producing its disposable surgical kitsand other infection control products in operating room, protective clothing and other epidemic prevention products, all kindsof cotton balls and cotton pads; established in 2017 with a total area of about 467,000 square meters of its phase I and phasesII sites, Winner Medical (Wuhan) has brought in electron beam sterilization and international modern cotton spunlaceproduction line; established in 2000 with a total area of about 150,000 square meters, Winner Medical (Tianmen) produceproducts such as pure cotton spunlace non-woven fabrics, pure cotton tissues, medical dressing, medical protection seriesproducts, being the production base of pure cotton tissues and medical gauze in China for trade; established in 1999, WinnerMedical (Yichang) has 137 advanced air-jet looms, being the main production base for its grey cloth. In January 2022, theCompany acquired an industrial land of nearly 15,000 square meters located in Guanlan Street, Longhua District. In the
future, the land will be built into an industrial base for medical biological and infection control protection in the Guangdong-Hong Kong-Macao Greater Bay Area, which will be used for scientific research innovation and industrial production ofmedical biology, high-end medical dressings and medical infection control protection products. In 2022, the Companyacquired three companies, i.e. Longterm Medical, Winner Guilin, and Winner Medical (Hunan), to solidify the keyfoundation for building the capability of one-stop medical consumables solution. Through continuous construction andimprovement, the daily management system within the factory was optimized through lean management, standardization,automation, digitalization and greening. In future, the Company is also going to explore and build smart factories. It willrealize "unmanned production, process-based management, and process digitalization" step by step.
III. Main business analysis
Overview(I) Business data
(1) Income from main operations through main channels
Unit: 10,000 yuanBusiness type Channel type First half of 2023 First half of 2022
| YoY change | Reasons for YoY change in performance |
Medicalconsumables
China
57,391.82 159,467.76
| Hospitals in |
-64.01%
Domesticpharmacies
21,943.98 25,028.53
| Effective control of public health incidents and reduced market demand for infection protection products | ||
-12.32%
incidents
| and reduced market demand for infection protection products |
E-commerce 42,071.65 46,158.81
-8.85%
| Effective control of public health |
incidents
| and reduced market demand for infection protection products | ||
| Overseas sales |
69,019.77 70,541.63
-2.16% /
| Domestic direct selling |
26,878.42 24,455.98
9.91% /
| Subtotal | 217,305.64 | 325,652.71 | -33.27% | / | |
| Healthy consumer |
goods
E-commerce 124,262.01 112,519.99
10.44%
| Increased online marketing efforts while continuing to drive new leads to increase penetration and conversions. |
Offline stores 64,695.93 54,941.28
17.75%
| Effective control of public health incidents and gradual recovery of passenger flow | ||||
| Supermarket channels |
14,168.35 14,332.75
-1.15% /Key accounts 3,175.05 3,940.97
-19.43%
| Mainly decline in sales of products related to public health events | |||||
| Subtotal | 206,301.34 | 185,734.99 | 11.07% | / | |
| Total | 423,606.98 | 511,387.70 | -17.17% | / |
In 2023, the Company split PureH2B business and adjusted the management organization, and merged the health personalcare business of PureH2B business into the medical segment for management, and therefore synchronously adjusted the datafor the first half of 2022 by adjusting part of the business of PureH2B business, which was originally in the consumer goodssegment, to the health personal care products in the medical segment.
(2) Income from main operations of main products
Unit: 10,000 yuan
Business type Product type
| First half of 2023 | First half of 2022 | YoY change | Reasons for YoY change in performance |
Medicalconsumables
56,975.15
| Traditional wound care and wound dressing products |
51,923.99 9.73% /
dressing products
28,260.82
| Advanced wound |
16,304.37 73.33%
business rose
| after the integration of mergers and |
acquisitions; 2. High-
dressing sales rose through e-
| commerce channels. | ||
| Operating room |
consumables
27,111.46
15,457.76 75.39%
| The Company increased the marketing efforts for operating room consumables |
Infection preventionproducts
73,448.50
225,166.66 -67.38%
| Effective control of public health incidents and reduced market demand for infection protection products | |||
| Health & personal |
care products
11,775.69
16,799.93 -29.91%
| Mainly decline in sales of |
products
Other products 19,734.02
| related to hand hygiene and other public health events | ||
| Mainly test kits and safety infusion products | ||||
| Subtotal | 217,305.64 | 325,652.71 | -33.27% | / |
Healthyconsumer goods
tissues
54,513.16
| Wet and dry cotton |
49,576.57 9.96%
| Continuous attraction of new members and product iterations and upgrades to enhance product strength | ||||
| Sanitary pads | 29,531.59 | 29,290.16 | 0.82% | / |
| Other non-woven products |
19,870.43
19,978.93 -0.54% /
| Baby clothing and |
supplies
43,008.65
40,563.99 6.03%
| Effective control of public health incidents and gradual recovery of passenger flow | ||||
| Adult clothing | 40,039.52 | 30,774.83 | 30.10% | Enhancing the product appearance, focusing on specialty fabrics, and improving product comfort. |
| Other woven |
products
19,337.99
15,550.51 24.36%
| Subtotal | 206,301.34 | 185,734.99 | 11.07% | / | |
| Total | 423,606.98 | 511,387.70 | -17.17% | / |
With the expansion of the Company's business scope, the product categories have become more diversified. In 2022 annualreport, the Company reclassified the product categories according to application scenarios; the Company adjusted theclassification of the products for the half-year of FY2022 by the adjusted product classification for FY2022. The newclassification eliminates disinfection and cleaning products and adds new health personal care products, adjusting cottonswabs, cotton balls, cotton pads and other products applicable to wound care in the original disinfection and cleaningproducts to the traditional wound care category, and adjusting the remaining hand disinfectant, functional wet wipes, andalcohol disinfectant tablets products to the health personal care products; adjusting the small care packs applicable to basiccare in the operating room consumables products to traditional wound care, and personal care products such as oral and nasalcavity to health personal care products; adjusting the products applicable to personal care scenarios, such as cotton towels intraditional wound care and dressing products, to health personal care products; and adjusting the band-aids in the high-enddressings to health personal care products. In 2023, the Company split PureH2B business and adjusted the managementorganization, and merged the health personal care business of PureH2B business into the medical segment for management,and therefore synchronously adjusted the data for the first half of 2022 by adjusting part of the business of PureH2B business,which was originally in the consumer goods segment, to the health personal care products in the medical segment.
(II) Business analysis
In the first half of 2023, as the economy and society fully resumed normalized operation market demand gradually recovered,production and supply continued to increase, and overall economic performance rebounded to a positive trend. In the face ofthe changing external environment under the new situation, Winner Medical, based on the two businesses of medicalconsumables and consumer healthcare products, has responded positively and adjusted flexibly under the guidance of thethree core business principles of “quality over profit, brand over speed, and social value over corporate value”. Based on theimpact of the high base of infection protection products in the same period of last year, the company's operating income inthe first half of 2023 was RMB4.27 billion, down 17.3%; net profit attributable to shareholders of listed companies wasRMB680 million, and net profit after extraordinary gains and losses was RMB550 million, down 23.7% and 33.0%,respectively. The Company has always adhered to the core strategy of “leading products with operational excellence”, deeplyexplored channels and enhanced the competitiveness of its products, enjoying a sustained improvement in the overall qualityof its operations during the reporting period.
(1) Medical consumables business: significant impact of high base of infection protection products, steady
development of conventional products businessIn the first half of 2023, the overall operating income of the medical sector was 2.17 billion yuan, down 33.3%. Due to thedecline in market demand for infection protection products and the high inventory of related products on the demand side andthe channel side, the dynamic sales were at a very low speed level, coupled with the impact of last year's high base, theoperating income of infection protection products during the reporting period amounted to RMB730 million, representing adecrease of 67.4%. Also affected were some health personal care products (disinfectant wipes, hand hygiene, etc.), amountedan operating income of RMB120 million during the reporting period, a decline of 29.9%. In addition, the business ofconventional medical consumables developed steadily. Revenue from the traditional dressings business was RMB570 million,an increase of 9.7%, while revenue from the high-end dressings and operating room consumables business was RMB280million and RMB270 million, an increase of 73.3% and 75.4% respectively, representing a better growth trend. Withinnovation to promote product development, the company in the first half of the year focused on the developed cottonspunlace nonwoven materials applied to surgical gowns, isolation gowns, surgical towels and wipes as well as otheroperating room supplies. Compared with the chemical fiber nonwoven disposable operating room supplies, cotton materialdisposable operating room supplies products, in order to achieve infection control at the same time, has a strong comfort anddegradability. It can be seen that this product will greatly enhance the competitiveness of the market in the disposableoperating room consumable fabric products. As of the end of the reporting period, we hold 732 patents in the medicalconsumables segment and 332 medical product registrations (including 25 registrations of Category III medical products).In terms of channels, the company continued to deepen its cultivation in the first half of 2023 through a variety of ways toactively open up marketing channels. Besides, changes in the public health event situation restored a more balanced andrationalized revenue structure across channels. During the reporting period, operating income from foreign markets amountedto RMB690 million, accounting for 31.8% of the medical revenue. The domestic hospital channel expanded steadily,achieving operating income of RMB570 million, with the revenue share recovering to 26.4%. The C-end business developedsteadily, and the operating income of e-commerce and domestic pharmacies in the first half of the year was 420 million yuanand 220 million yuan, respectively, raising the combined revenue share to 29.5%. In terms of e-commerce, as of the end ofthe reporting period, the number of fans on domestic e-commerce platform totaled 16.42 million, with a new addition ofnearly 3 million in the first half of the year; in the cross-border e-commerce Amazon platform, the ranking of the core large-item category continued to stay ahead.
(2) Health consumer goods business: All-cotton products build differentiation and offline recovery drives
performance improvementIn the first half of 2023, total retail sales of consumer goods amounted to 22.8 trillion yuan, with the overall vitality of theconsumer market gradually recovering; but residents’ consumption capacity and confidence in consumption still need to bestrengthened, and the foundation for restoring and expanding consumption needs to be further consolidated. In such a marketenvironment, the healthy lifestyle consumer goods business under the brand name of “Purcotton” continued to consolidate itsbrand building, focused on three scenarios and practiced the strategy of explosive products, announcing an operating incomeof RMB2.06 billion during the reporting period; a growth of 11.1% compared to the same period of last year when the basefigure was not significantly low last year, and an increase of 55.5% over the same period of 2019, showing a strongdevelopment resilience.In terms of products, Purcotton tries to builds a differentiated product matrix around “one cotton, one fiber”, and keepsimproving product competitiveness by continuously enriching product categories through research and developmentinnovation. By the end of the reporting period, Purcotton has obtained 502 patents. During the reporting period, non-wovenproducts and woven products contributed operating income of RMB1.04 billion and RMB1.02 billion, respectively. Thecompany's core best-selling product, wet and dry cotton wipes, experienced a steady increase in sales, contributing operatingincome of 550 million yuan in the reporting period, up 10.0%. Thanks to the rapid recovery of offline sales, adult apparel andother consumer textile products (mainly bedding and bathroom products) with stronger sense of experience grew at asignificant rate, contributing operating income of RMB400 million and RMB190 million respectively during the reportingperiod, an increase of 30.1% and 24.4%. The company continues to promote green product certification, product carbonfootprinting, research and development of biodegradable products, organic cotton breeding and application, leading the greendevelopment of the industry.
In terms of channels, Purcotton has diversified online and offline channels, including traditional third-party platforms such asTmall, Jingdong, Vipshop, e-commerce platforms such as TikTok, Xiaohongshu and other interest in e-commerce platforms,as well as its own official website and applets and other self-owned platforms. In terms of the offline channel, it takes thestrategy of increasing the density of offline direct-sale stores in first-tier and second-tier cities, and accelerating thedevelopment of high-quality franchisees; at the same time, through the mode of offline experience and online re-purchase,deep integration of multiple channels, complementary advantages of multiple platforms. As of the end of the reporting period,there were approximately 48 million members in across the domain, an increase of 12.1% from the end of last year. With therecovery of offline traffic, average store performance, store efficiency and other operating indicators steadily improved,profitability improved significantly; as of the end of the reporting period, the company had 353 offline stores (including 309directly-managed stores, 44 franchised stores), including 22 newly opened stores in the first half of the year (7 directlyoperated stores and 15 franchised stores); during the reporting period, offline stores announced an operating income of 650million yuan, an increase of 17.8%. The online channel focused on new products and best-selling products matrix,strengthened mutual penetration between categories, and strived to improve the conversion rate of new members and therepurchase rate of regular customers, announcing an operating income of 1.24 billion yuan during the reporting period, anincrease of 10.4%.
(3) Profitability: More initiatives to help improve gross profitability
In the first half of 2023, the company steadily increased its gross profit margin to 51.5% through multiple ways such as valuereturn, cost reduction and efficiency improvement, and new product iteration and optimization of product structure, anincrease of 2.6% over the same period last year. The health and life consumer goods business performed well, helpingPurcotton achieve a gross profit margin of 58.2% in the first half of the year, earning an operating profit of 270 million yuan,an increase of 28.7% over the same period last year; restoring profitability to a good level in 2019, with an operating marginof 12.9%. In the first half of the year when the situation of public health events changed significantly, the Company took theinitiative to vigorously promote the steady development of conventional medical consumables and consumer goods, and itactively improved the management ability, and tried to reduce the impact of the sharp decline in the sales of infectionprotection products on the profitability, finally achieving a net profit margin of 16.0%, a decline of only 1.3% compared withthe same period of last year, with the net profit attributable to shareholders of listed companies up to 680 million yuan.
(4) Outlook for future development: Focus firmly on the two main industries and take the road of high-quality
developmentMedical consumables are just-demanded, high-frequency, widely-used products, with huge domestic and international marketspace. The medical consumables industry in China is extremely decentralized, but in overseas markets, after decades ofdevelopment, the concentration effect of the leader has emerged. With strong manufacturing capacity, Winner Medical relieson its brand awareness and reputation accumulated in recent years to further consolidate the construction of online and offlinechannels, laying a solid foundation for the steady development of conventional products and the continuous improvement ofmarket share. In the future, Winner Medical will endeavor to enhance its endogenous capabilities in manufacturing,innovation and R&D as well as industry chain control, and stay active to seek opportunities for outward mergers andacquisitions so as to make great strides towards the strategic goal of “leading in medical consumables and providing one-stopmedical consumables solutions”.Healthy life consumer goods brand - Purcotton, backed by the parent company's more than 30 years of medical experienceand quality genes, has formed a differentiated competitive advantage with “all-cotton” comfortable, healthy, environmentallyfriendly materials, high stickiness of the customer base, and the excellent product quality. Especially after the big challengesof the macro environment in the past three years, the company has practiced hard to optimize the store area, adjust theproduct structure, reduce costs and increase efficiency and other initiatives, so that the first half of 2023 saw no decline inprofits, but a significant increase in the gross profit margin and operating profit margin. Purcotton will continue to focus onthe scenarios, practicing the best-selling strategy, and be active to explore domestic and international online and offlinechannels, so that more consumers get access to the cotton products with good quality and good price, reduce environmentalpollution, and return to the natural way of life. Purcotton will continue to promote the healthy lifestyle of cotton, shaping thebrand mind, to convey the original intension and brand value of “changing the world with pure cotton”, and firmly take theroad of brand development.Opportunities always exist alongside challenges in the complex and changing external environment. The Company willcontinue to promote the core strategy of “product leadership and operation excellence”, focus on its main business, insist onthe parallel development of medical and consumer, both online and offline, and the synergistic development of endogenousand exogenous, and endeavor to open a new chapter in the high-quality development of Winner Medical.
(III) Business management analysis
(1) Product R&D
The Company sticks to independent innovation and development of basic materials. In the field of medical wound care, theCompany continued to improve the second generation of high-end wet wound dressings product line technologyarrangements, had the scar repair new products successfully marketed in China, and obtained access qualification for avariety of newly developed antibacterial dressings from the U.S. FDA. Relying on the success of last year's research anddevelopment of a variety of core basic materials and mass production and application, the company in the first half of thisyear focused on improving product competitiveness in the direction of product development and upgrading to meet thedifferentiated customized design needs of customers. In the field of medical consumables, the company focuses on the
development of core basic materials on the application of operating room consumables such as surgical gowns, isolationgowns, surgical towels and wipes, to enhance the comfort of the products, reduce the cost of production of the products, andto further enhance the market competitiveness of the products, provide a better experience of the products for the medicalpractitioners and other users, and continue to create greater value for users. In June this year, the company and Wuhan TextileUniversity jointly built a comprehensive technological innovation platform for advanced fiber materials in Hubei Province tocarry out industrial incubation, and trying to complete the in vitro and in vivo biological evaluation of a new series ofartificial blood vessels with high patency rate early, to break the monopoly of artificial blood vessels abroad, and to achievethe substitution with home-made products.In the field of health consumer goods, Purcotton has independently developed soft cotton yarn and created a series of softcotton flannel warmer products, with a thermal insulation rate of more than 30% and a weight reduced by 20%. Thedeveloped elastic hoodie fabric greatly improves the comfort and elasticity of hoodies and pants for infants and youngchildren. The developed ozone bleaching technology can be used to desize and bleach cotton fabric by gaseous ozonetreatment at low temperature. Compared with traditional pretreatment, it saves 92% of water and discharges zero sewage; andit saves 44% of chemicals, 49% of energy, and reduces carbon dioxide emissions by 95%. The technology has beenpioneered in the application of bedding suits and sandwich quilts. The company continues to carry out the excavation andtransformation of low-carbon production processes, and has completed the verification statement of carbon footprint for fivecore products. In addition, on that basis, the company has carried out carbon reduction by the low-temperature de-bleachingtechnology, with the unit steam consumption reduced by more than 30%. The company has also carried out research withTianjin Polytechnic University on the comfort of all-cotton leisure wear, and with Jiangnan University on the technicaldevelopment of cotton and cotton-type yarn performance enhancement.
(2) Brand building
In the first half of 2023, Winner Medical continued to consolidate the brand image favored by the public and trusted bydoctors and nurses, and continuously improved brand awareness and reputation through effective means. Brand buildingefforts during the reporting period were mainly centered on joint media promotions, sponsorship of large-scale events,heterogeneous brand co-marketing, participation in medical exhibitions, as well as hospital and pharmacy promotions. In thefirst half of the year, Winner Medical participated in 8 domestic and overseas exhibitions to showcase its product matrix andcomprehensive strengths to both professional and general audiences; launched a special campaign to improve the skills ofmedical staff in hospital infection prevention and control, helping medical staff in China to develop better habits of hygieneprotection; and launched the third phase of the “Winner Medical Academy (Sensitive Control)” training in Beijing at the endof March, focusing on the medical staff’s own protection under the theme of “helping to prevent and control infections andcaring for one’s own protection”.In terms of brand construction, Purcotton continued to deepen its communication with consumers, and continued to convey toconsumers the multiple advantages of "cotton" in environmental protection and sustainable development throughspokespersons, creation of original high-quality content, offline exhibition tours and press conferences, so as to enhanceconsumer awareness and loyalty to the brand. In March, the brand continued to launch its original character documentaryseries, “What She Changed” by Bai Xiangen, with over 42 million video views and 734 million microblog topic reads. InFebruary, Winner Medical and Purcotton, as the “Official Partner of 2022 Shenzhen Marathon”, provided high-quality healthprotection products and cotton lifestyle products to convey the concept of “Love Life and Love Health”. On February 26,Purcotton officially announced new generation actor Sun Qian as its brand ambassador and held a new product release event.It joined hands with 80 colleges and universities across the country to continue the [WE Eco Cotton-Use] environmentalprotection program, and jointly carried out a packaging design competition, environmental protection public welfare lectures(including a special session at Peking University), the Earth Lights Out Concert and other campus environmental protectioncampaigns, so that students participated in the interaction and at the same time, understood the relationship between cottonand environmental protection, thus having safe and comfortable cotton enter into the lives of more young people groups tohave them join the sustainable all-cotton lifestyle and to protect the blue sky, green land and clear water.
(3) Digital transformation
In order to promote "consumer-centric and digital and intelligent manufacturing-driven" business transformation, and carryout the five digital strategies of "digital commodity operation", "omni-channel digital operation", "consumer digitaloperation", "digital smart logistics digital operation" and "smart manufacturing digital operation", the Company furtherdelivered the digital project phase of core business operation, and effectively promoted the whole industrial chain of thegroup to drive and lead the overall business change and innovation from top to bottom.The Company advanced the following digitization projects in the first half of 2023. ① The Company continuously promotedthe construction of the domain-wide member union and the CDP-MA marketing cloud, and completed the constructionpartially in some platforms during the reporting period. ② The Company continued to promote the upgrade of the digitaloperation capability of the whole category and life cycle of the commodity, and based on the end-to-end connection of thecommodity supply chain, empowered the automatic distribution and replenishment system to balance the supply chaincapacity and effectively reduce the risk of inventory with advanced algorithms. ④ The Company accelerated the building ofdigital operation capabilities for intelligent manufacturing. Based on the new-generation ICT technologies such as Big Data,cloud computing, IoT, and AI, the Win+ Intelligent Manufacturing Digital Operation Platform consists of 4 majorapplications, namely self-developed Advanced Planning & Scheduling System (APS), Manufacturing Execution System(MES), Quality Management System (QMS) and Internet of Things Platform (IoT). With over 300 functions, it coversvarious functions, such as planning and scheduling, manufacturing execution, quality management, equipment monitoring,
energy management. As of the first half of 2023, Win+ platform was successfully launched in 5 factories, together with IOT600+ manufacturing equipment, 800+ smart meters, algorithmic applications in 6 scenarios, constituted a secondary nodeplatform for industrial Internet identification analysis, improving the comprehensive competitiveness of manufacturing. ④The Company promoted the construction of digital operation capacity of smart logistics in the entire network warehouse, andstrove to create an integrated, intelligent, scalable, and active logistics system with quick response speed based on customerdemand orientation, and independently developed WMS&TMS systems through new technologies, effectively promotinglogistics costs reduction, and improving efficiency and user experience.YoY changes in key financial data
Unit: yuan
| Current reporting period | Same period last year | Year-on-year increase/decrease |
Reason for changeOperating income 4,266,838,038.66 5,157,944,495.72 -17.28%
Operating costs 2,071,428,206.72 2,640,556,563.64 -21.55%
| Mainly decline in revenue from the medical consumables | ||||
| Lower revenues corresponding to lower costs | ||||
| Selling expenses | 960,442,911.44 | 950,172,124.74 | 1.08% | No major changes |
| Administrative expenses | 289,596,702.14 | 325,391,883.32 | -11.00% | No major changes |
Financial expenses -52,794,426.69 -73,619,152.34 -28.29%
Income tax expenses 114,886,459.15 145,670,282.34 -21.13%
| Mainly increase in interest expense and decrease in foreign exchange gain | ||||
| Mainly decrease in total profit | ||||
| R&D expenses | 194,636,202.14 | 238,644,498.62 | -18.44% | No major changes |
| Net cash flow from operating |
activities
158,178,712.89 801,150,899.38 -80.26%
of
| prior year’s taxes and goods in the current period | ||
| Net cash flow from investing |
activities
380,420,978.74 -966,552,145.71 -139.36%
| Mainly payment for the acquisition of the company’s equity in the prior period | ||
| Net cash flow from financing |
activities
-678,722,588.25 192,733,749.29 -452.16%
| Mainly higher repayment of bank borrowings during the period | ||
| Net increase in cash and cash |
equivalents
-134,381,719.01 54,933,264.88 -344.63%
Significant changes in the profit composition or profit source of the Company during the reporting period?Applicable ?Not applicableThere was no significant change occurred in the profit composition or profit source of the Company during the reportingperiod.Products or services accounting for more than 10%?Applicable ?Not applicable
The Company needs to comply with the disclosure requirements of the "Textile and Apparel Business" stipulated in the No. 3Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.Unit: yuanOperating income Operating costs
Grossprofitmargin
Year-on-yearincrease/decrease ofoperatingincome
Year-on-year
increase/decrease ofoperating cost
yearincrease/decreaseof grossmargin
| ratio | ||||||
| By industries | ||||||
| Medical consumables | 2,173,056,329.26 | 1,190,712,847.40 | 45.21% | -33.27% | -31.98% | -1.04% |
| Healthy consumer goods | 2,063,013,439.28 | 862,440,651.91 | 58.20% | 11.07% | -0.08% | 4.67% |
| By products | ||||||
| Medical consumables - traditional wound care and wound dressing products |
569,751,468.09 362,344,232.29
36.40% 9.73% 4.62% 3.11%
| Medical consumables - infection prevention products |
734,484,964.80 343,008,384.18
53.30% -67.38% -69.90% 3.92%
| Healthy consumer goods - wet and dry cotton tissues |
545,131,629.73 249,856,538.28
54.17% 9.96% 1.09% 4.02%
| By regions | ||||||
| Domestic | 3,486,307,548.95 | 1,640,031,127.77 | 52.96% | -20.17% | -25.46% | 3.34% |
| Abroad | 749,762,219.59 | 413,122,371.54 | 44.90% | 0.41% | -0.13% | 0.30% |
In the event that the statistical caliber of the Company’s main business data is adjusted in the reporting period, the Companyshall follow the main business data in the past year adjusted by the caliber at the end of the reporting period?Applicable ?Not applicableWhether the Company has sales terminals in brick-and-mortar stores?Yes ?NoDistribution of brick-and-mortar stores
Types of stores
Number ofstores
Area of stores
Number of new
reporting period
| stores during the | Number of |
stores closed atthe end of the
Reasons forstore closings
Brands involved
| reporting period | ||
| Direct-sale stores |
309 105,790 7 9
Purcotton
| Contract Expiration | ||||||
| Franchises | 44 | 10,842 | 15 | 0 | / | Purcotton |
Total area and performances of direct-sale stores
Levels of areas
Number ofstores
Total area
Operating incomein January-June
2023(10,000
yuan)
Operating incomefor the same periodlast year(10,000 yuan)
on-yearincrease/decrease inperformance
| of stores |
Reasons
| 300m2 or less | 140 | 30,824.45 | 21,993.94 | 19,208.56 | 14.50% | |
| 300-500m2 | 90 | 33,471.59 | 18,399.06 | 16,973.53 | 8.40% | |
| 500-800m2 | 39 | 24,262.28 | 10,508.97 | 9,233.42 | 13.81% | |
| 800m2 or more | 11 | 10,287.48 | 3,428.11 | 3,016.03 | 13.66% |
Total 280 98,845.80 54,330.09 48,431.54 12.18%
of offline storesIncrease over thesame period of the
| previous year |
Note: The above stores are Purcotton's stores opened for more than 12 months as of June 30, 2023. The operating income ofoffline stores include the sales of O2O, does not include the sales of offline stores diverted to online Wechat mini-programs.Top 5 Stores in terms of Operating IncomeS/N Name of stores Opening date Operating income (yuan)
| Average performance of the store | ||||
| 1 | First | October 25, 2017 | 7,515,843.59 | 18,589.77 |
| 2 | Second | August 06, 2012 | 6,119,372.39 | 10,464.22 |
| 3 | Third | May 15, 2010 | 6,052,052.24 | 9,303.69 |
| 4 | Fourth | September 19, 2014 | 5,492,677.43 | 7,304.09 |
| 5 | Fifth | April 30, 2015 | 5,405,008.08 | 4,873.77 |
| Total | -- | -- | 30,584,953.72 | 8,737.09 |
New stores of listed companies?Yes ?NoName of stores
Addressof stores
Opening
time
| Contract |
area
| ) |
Investmentamount (yuan)
ProductCategory
Businesstype
Businessmodel
ownership
| status |
Numberof storesDirect-sale stores ofPurcotton
CentralChina
2023 214.78
1,281,038.69
| Healthy |
consumer
Retail
Direct-sale
stores
Purcotton
leasing
| goods |
Direct-sale stores ofPurcotton
NorthChina
2023 269.5
1,822,208.38
| Healthy |
consumer
Retail
Direct-sale
stores
Purcotton
leasing
| goods |
Direct-sale stores ofPurcotton
SouthChina
2023 684.36
3,516,407.23
| Healthy |
consumer
Retail
Direct-salestores
Purcottonleasing
| goods |
Direct-sale stores ofPurcotton
EastChina
2023 206
880,363.75
| Healthy |
consumer
Retail
Direct-sale
stores
Purcotton
leasing
| goods |
Purcottonfranchisees
NorthChina
2023 200
297,885.38
| Healthy |
consumer
Retail
Franchisee
s
Purcottonfranchisees
| goods |
Purcottonfranchisees
SouthChina
2023 914.66
1,502,039.85
| Healthy |
consumer
Retail
Franchisee
s
Purcottonfranchisees
| goods |
Purcottonfranchisees
WestChina
2023 817.07
1,495,406.11
| Healthy |
consumer
Retail
Franchisee
s
Purcottonfranchisees
| goods |
Purcottonfranchisees
Central
China
2023 1,033.82
1,521,775.51
| Healthy |
consumer
Retail
Franchisee
s
Purcottonfranchisees
| goods |
Purcottonfranchisees
EastChina
2023 225.75
374,079.31
| Healthy |
consumer
Retail
Franchisee
sPurcottonfranchisees
| goods | |||||||||
| Total | 4,565.94 | 12,691,204.21 | 22 |
Does the Company disclose the information on the Top 5 franchises?Yes ?NoIV. Other information required by the disclosure guidelines for textile and apparel-
related sectors
1. Production capacity
The Company's production capacity
| Current reporting period | Same period last year |
More than 10% YoY change in production capacity utilization rate?Yes ?NoBusinesscategory
ProductCategory
Unit
| January-June 2023 | January-June 2022 | Production |
capabilityutilizationrateChange inpercentage
Change reason descriptionProductioncapacity
Output
Productioncapabilityutilization
rate
Producti
oncapacity
Output
Productioncapabilityutilization
rate
Medicalconsumables
| points | |||||||||
| Gauze | ton | 5,018 | 3,255 | 65% | 5,585 | 3568 | 64% | 1% | No major changes |
Cotton ton 1,373 1,252 91% 1,373 1,026 75% 16%
Mask
'0,000pieces
305,313 145,824 48% 328,051 295,621 90% -42%
| Fewer orders in the first half of 2022 due to the impact of public health events, sales demand grew this year and production increased. |
| Market demand declined and factories adjusted production capacity accordingly |
Protectiveclothing
'0,000suits
632 282 45% 2,652 2,627 99% -54%
| Public health events were effectively controlled but market demand decreased significantly, resulting in a decrease in production capacity output in the first half of 2023 | |||
| Surgical gowns | '0,000 suits |
720 646 90% 1,950 1,796 92% -2% No major changes
| Medical combo kits | '0,000 kits |
2,545 2,326 91% 2,600 2,329 90% 1% No major changes
spunlacenon-woven
| fabric |
ton 25,628 13,344 52% 25,628 14,241 56% -4% No major changesHealthyconsumergoods
| Cotton tissues | '0,000 kits |
17,987 7,742 43% 17,397 6,565 38% 5% No major changesSanitarypads
'0,000pieces
31,869 20,225 63% 25,040 19,496 78% -15%
half of 2023, while sales did
| not rise significantly, resulting in a decrease in capacity utilization rate |
Is there overseas production capacity??Yes ?No
2. Sales model and channels
Sales channels and actual operation of productsThe Company's healthy consumer goods is involved in textile and apparel industries. The sales channels for healthyconsumer goods include e-commerce, direct chains and supermarkets, key accounts and franchisees.
Unit: RMBSaleschannels
Operating income Operating costs
Gross profitmargin
increase/decrease ofoperating
| income (%) | Year-on-year |
increase/decrease ofoperating cost
| (%) | Year-on-year |
increase/decrease ofgross margin
| ratio | ||||||
| Online sales | 1242620067.03 | 568596423.04 | 54.24% | 10.44 | -1.07 | 5.32 |
| Offline stores |
646959312.93 227641518.20 64.81% 17.75 6.47 3.73
| Supermarket channels |
141683490.06 51388698.39 63.73% -1.15 -6.00 1.87
| Key accounts |
31750569.26 14814012.28 53.34% 19.43 -25.67 3.91
| Total | 2063013439.28 | 862440651.91 | 58.20% | 11.07 | -0.08 | 4.67 |
Reasons for change
3. Selling expenses and composition
Selling expenses January-June 2023 January-June 2022
increase/
| decrease |
Description of significant changes
315,528,733.79 322,603,966.58 -2.19%
| Employee compensation |
No major changesTravel expenses 10,524,681.48 3,848,684.40 173.46%
| Increase in travel demand after effective control of public health incidents | |||
| Office |
communication
6,090,498.20 8,396,979.22 -27.47%
| costs |
No major changes
| Sales commission | 125,398,549.11 | 118,542,577.52 | 5.78% | No major changes |
| Insurance premiums | 2,967,753.30 | 3,018,944.71 | -1.70% | No major changes |
| Depreciation and amortization |
112,902,943.06 156,566,925.78 -27.89%
No major changes
| Advertising and promotion expenses |
276,337,254.06 235,198,138.16 17.49%
No major changes
| Rent | 77,531,439.61 | 66,454,933.41 | 16.67% | No major changes |
| Others | 33,161,058.83 | 35,540,974.96 | -6.70% | No major changes |
| Total | 960,442,911.44 | 950,172,124.74 | 1.08% | No major changes |
4. Franchising and distribution
The proportion of franchisees and distributors' sales revenues exceeds 30%?Yes ?No
Top 5 franchiseesS/N Name of franchisee Time of cooperation
Total sales (yuan) Level of franchisee
| A related party or not | |||||
| 1 | Franchisee I | May 1, 2020 | No | 2,779,690.03 | Primary |
| 2 | Franchisee II | November 9, 2020 | No | 2,609,494.32 | Primary |
| 3 | Franchisee III | June 26, 2022 | No | 1,883,116.72 | Primary |
| 4 | Franchisee IV | June 10, 2021 | No | 1,739,555.35 | Primary |
| 5 | Franchisee V | October 24, 2020 | No | 1,715,897.65 | Primary |
| Total | -- | -- | -- | 10,727,754.07 | -- |
Top 5 distributors
| S/N | Name of franchisee | Time of cooperation | A related party or not | Total sales (yuan) |
5. Online sales
The proportion of online sales in sales revenues exceeds more than 30%?Yes ?NoIs there a self-built sales platform??Yes ?No
| Operation starting time | January 6, 2014 |
| Number of registered users | 13,208,503 |
| The average number of monthly active users | 1,601,600 |
Does it work with a third-party sales platform??Yes ?No
Unit: RMB
| Name of platform | Transaction amount during the reporting period | Return rate |
| Taobao (healthy consumer goods) | 594,823,048.85 | 2.03% |
Opening or closing online sales channels by the Company?Applicable ?Not applicableDescription of the impact on the current and future development of the Company
6. Agency operation
Does it adopt agency operation??Yes ?No
7. Inventory
InventoryMain products
turnover
| in days |
Inventory balance
Inventoryaging
increase/decrease in
| inventory balance |
Reasons
277,811,574.68 -110,030,904.60
| Raw materials and goods processed by the commission | Mainly due to the year-on-year decrease in Purcotton inventory and cotton inventory |
Work in process 180,932,253.18 17,389,240.47
increase in semi-
| finished products in process | ||
| Merchandise inventory |
916,052,498.36 -14,221,789.00Semi-finished
transit
28,477,092.97 -32,913,019.15
| products shipped in | Mainly resulting from the decrease in inventories not yet received by the Company's shipped customers | |
| Low priced and easily worn articles |
10,419,634.45 -5,454,047.45
| Total | 156 | 1,413,693,053.64 | -145,230,519.73 |
Provision accrual for inventory depreciation
Item Beginning balance
Amount increased in current period
Closing BalanceAccrual Others
| Amount decreased in current period | |
| Reversal or write-back | |
Others
| Raw materials | 54,831,465.50 | 10,616,808.72 | 39,153,897.95 | 26,294,376.27 | ||
| Work in process |
9,184,849.77 23,924,918.05
7,659,434.85
25,450,332.97
| Merchandise inventory |
258,680,380.74 157,009,803.06
1,074,316.06 176,715,280.05
240,049,219.81
| Semi-finished |
products
130,228.78
| shipped in transit |
130,228.78
| Low priced and easily worn articles |
1,591,988.35 709,144.82
1,339,094.08
962,039.09
| Total | 324,418,913.14 | 192,260,674.65 | 1,074,316.06 | 224,997,935.71 | 292,755,968.14 |
Inventory information of end channels such as franchises or distributorsThe Purcotton franchisees, selling the Company's healthy consumer goods, had 44 stores. Its business model requiresfranchisees to be responsible for store construction and daily operation while Purcotton provides goods and supply chainsupports. After the sales of stores, Purcotton and the franchisees obtain their respective profits through sharing; the franchisestore inventory ownership belongs to Purcotton. As of June 30, 2023, the inventory balance were 17.16 million yuan, or390,000 yuan on average in each store.
8. Brand building
Whether the company is involved in the production and sales of branded clothing, apparel and home textile products?Whether private ?brandBrandname
Trademark
name
product
| types |
Features
Targetcustomers
Main product price
bands
Main market
territory
Level of
cities
Purcotton Purcotton
Cottontissues
mild and non-
| irritating; meeting the daily needs of consumers |
All-agecustomerbase
RMB 5-30 /pack (100pieces)
Nationwide
Second-
third-tier
| cities and |
above
Purcotton
NicePrincess
Sanitarypads
surface layer)
| 100% cotton surface layer (surface layer, spacer, sanitary wing | The female |
population atappropriateages
RMB 1.99-3.99 /piece Nationwide
third-tier
| cities and |
above
Purcotton BBNice
Cottondiapers
| 100% cotton surface layer; unique in the market; made from natural cotton; 2mm |
ultra-
28 times ultra-
| high absorption capacity |
Parentalpopulation
RMB 3.32-4.14 /piece Nationwide
Second-
third-tier
| cities and |
above
Purcotton Purcotton
Wettissues
non-
| slippery; gentle |
and non-irritating
All-agecustomerbase
RMB 20-40 /pack Nationwide
third-tier
| cities and |
above
Purcotton Purcotton
Babyproducts/clothing
| 100% cotton material without fluorescent nor formaldehyde; the unique gauze fabric to provide more comfortable care |
Expectingmothers,newborns,babies,toddlers
100-500 yuan /piece Nationwide
Second-
third-tier
| cities and |
above
Purcotton Purcotton
Adultclothing/intimateapparel
material; high-
| quality cotton without fluorescent nor formaldehyde; soft to the touch; the unique gauze fabrics |
to provide
comfortable care
Adultapparel:
| more | adult men and women of all ages; |
intimateapparel:
all ages
| customers of | Outwear: 150-800 yuan/piece; home |
wear: 200-800
underwear: 200-600yuan/piece;underwear: 48-128
| yuan/pair (pack); |
socks: 20-40
Nationwide
Second-
| yuan/pair | and |
third-tier
above
Purcotton Purcotton
Bedding,toiletries
| cities and | ||
| 100% cotton |
material; high-
Expectingmothers,newborns,babies,
| quality cotton without fluorescent nor formaldehyde; soft to the touch; the unique gauze fabrics to provide more comfortable care | toddlers and |
adultcustomerbase
268-
| 500 yuan/set; |
toddler bedding: 198-
bedding: 268-3198yuan/set
| Bathroom products: |
38-398 yuan/piece
Nationwide
Second-
third-tier
| cities and |
above
Partner brandsBrandname
Trademarkname
Mainproducttypes
Features
Targetcustomers
productprice
| bands |
Mainmarketterritory
Level
ofcities
Brand andtrademark rightsownership
PartnernameCooperation
mode
Cooperation
periodLicensed brand
Brand name
Trademarkname
Mainproduct
types
Features
Targetcustomers
productprice
| bands |
Mainmarketterritory
Level of
cities
Licensor
Licenseperiod
Exclusivelicense or
notPurcotton,ChinaAerospace
Purcotton,ChinaAerospacemodelingfigures
Babyclothingandsupplies
Infants
| The product is made from 100% cotton material and designed with China Aerospace image | and young |
childrencustomergroup
198-458yuan/piece
Nationwide
andthird-tiercitiesand
| above |
KoniCulture(Beijing)Co., Ltd.
2021.9.1520
23.10.14
NoPurcotton,Ultraman
Purcotton,Ultramancharacters
tissues,wettissues,bath
| towels | The product is made from 100% cotton material and designed with Ultraman cartoon image |
All-agecustomerbase
21.8-298
yuan/piece
Nationwide
andthird-tiercitiesand
| above | Shanghai |
CharacterLicenseAdministrative
2021.9.1202
4.1.31
No
Marketing and operation of each brand during the reporting periodPlease refer to the "III. Analysis of Main Business" of "Section III Management Discussion and Analysis" for details.Cases involved in trademark ownership disputes?Applicable ?Not applicable
9. Others
Whether the Company is engaged in apparel design-related business?Yes ?NoDid the company hold an order meeting??Yes ?No
V. Non-main business analysis
?Applicable ?Not applicable
Unit: RMBAmount
Formation reasons
| Proportion in total profits | Is it sustainable |
Investment income 39,412,441.13
4.80%
| Mainly refers to the income from cash |
management with raised funds and self-
NoPro?
| owned funds | ||
| t/loss from |
changes in fair value
59,639,836.03
7.26%
| Mainly refers to the income from cash |
management with raised funds and self-
NoImpairment of assets -100,794,883.37
| owned funds | ||
-12.28%
No
| Mainly refers to the impairment arising from fair value assessment of inventories | ||
| Non-operating income |
6,702,598.77
0.82%
| Mainly refers to the gains from scrapping fixed assets |
No
4,906,948.03
| Non-operating expenses |
0.60%
No
| Mainly refers to the loss of scrapping fixed assets | ||
| Credit impairment |
Loss
2,831,973.61
0.34%
| Mainly refers to the estimated provision for credit impairment loss of accounts receivable and other receivables |
No
5,324,751.10
| Gains from asset disposal |
0.65%
NoOther incomes 46,680,694.51
| Mainly refers to the loss on disposal of non-current assets | ||
5.69%
NoVI. Analysis of assets and liabilities
1. Major changes in asset composition
Unit: RMB
It is mainly due to receiving governmentsubsidies related to operating activities.End of the reporting period
| End of the reporting period | End of the previous year |
Increase/decrease inproportions
changesAmount
Description of significant
The
proportion
in total
| assets |
Amount
proportionin total
| assets | ||
| Cash and cash equivalents |
4,343,196,327.38 25.12% 4,526,877,578.90
24.65% 0.47%
No major changes
800,588,299.16 4.63% 932,642,061.04
| Accounts receivable |
5.08% -0.45%
| Mainly due to decrease in sales | ||||||
| Inventory | 1,413,693,053.64 | 8.18% | 1,558,923,573.37 | 8.49% | -0.31% | No major changes |
| Investment real estates |
8,224,991.33 0.05% 8,747,014.25
0.05% 0.00%
No major changes
equity
| investment |
23,328,454.74 0.13% 21,747,635.99
0.12% 0.01%
No major changes
| Fixed assets | 2,362,409,101.13 | 13.66% | 2,312,982,598.88 | 12.60% | 1.06% | No major changes |
| Construction in |
progress
1,017,739,015.40 5.89% 765,009,910.63
4.17% 1.72%
| Mainly due to the increase in plant and equipment investment | |||||
| Right-of-use assets |
416,590,030.56 2.41% 472,356,125.64
2.57% -0.16%
No major changes
| End of the reporting period | End of the previous year |
Increase/decrease inproportions
changesAmount
Description of significantThe
proportion
in total
| assets |
Amount
proportionin total
| assets |
Short-term loans 1,763,023,992.64 10.20% 2,295,218,930.85
12.50% -2.30%
| Mainly due to repayment of bank loans during the period |
Contractliabilities
239,363,072.30 1.38% 566,819,254.08
3.09% -1.71%
| Mainly due to the decrease in advance receipts during the period |
Long-term loans 180,000,000.00 1.04% 0.00
0.00% 1.04%
| Mainly due to the |
increase in long-
| term bank borrowings during the period | ||||||
| Lease liabilities | 303,947,082.02 | 1.76% | 326,459,697.90 | 1.78% | -0.02% | No major changes |
Notes receivable 23,164,092.22 0.13% 51,001,784.57
0.28% -0.15%
| Decrease in bank acceptance bill received from customers | |||||
| Amounts |
receivable
38,279,923.83 0.22% 93,093,113.79
| financing |
0.51% -0.29%
| Decrease in bank acceptance bill received from customers | |||
| Advances to |
suppliers
135,413,790.57 0.78% 229,225,273.09
1.25% -0.47%
| Mainly due to the decrease in purchases during the period | |||||
| Other current |
assets
175,698,904.05 1.02% 119,059,084.47
0.65% 0.37%
| Mainly due to the |
increase in value-
Other non-current assets
136,785,373.15 0.79% 83,524,640.64
| added tax to be offset | ||
0.45% 0.34%
| Mainly due to the increase in prepayment for equipment and project |
Payroll payable 203,597,080.67 1.18% 312,450,241.38
1.70% -0.52%
| Mainly due to excess bonus accruals at the end of the previous year |
Taxes payable 84,539,799.83 0.49% 322,101,244.04
1.75% -1.26%
| Mainly due to better sales at the end of last year and higher VAT and EIT payable |
Other payables 917,656,694.74 5.31% 570,843,242.88
3.11% 2.20%
| Mainly due to the unpaid cash dividend of Winner Group at the end of the period |
Capital stock 594,387,367.00 3.44% 426,492,308.00
2.32% 1.12%
| Mainly due to the increase in share capital due to stock dividends paid during the period |
2. Major overseas assets
?Applicable ?Not applicable
3. Assets and liabilities measured at fair value
?Applicable ?Not applicable
Unit: RMBItem Opening balance
Gain/loss fromchanges in fairvalue for the
period
fair valuechangesincluded in
| equity | Impairment |
in theaccrual ofthe current
| period | Purchase |
amountduring thereporting
Sales amount
during thereporting period
Other changes Closing balance
| period | |||
| Financial assets | |||
| 1. Trading financial assets | |||
(excludingderivativefinancial
4,378,789,960.23 59,639,836.03
2,971,245,00
0.00
3,829,582,315.00 45,084,821.92 3,623,520,946.56
| assets) |
| 5. Other non- |
current
40,000,000.00
30,000,000.0
70,000,000.00
| financial assets |
| Total of the above |
4,418,789,960.23 59,639,836.03
3,829,582,315.00 45,084,821.92 3,693,520,946.56
| 3,001,245,000.00 | ||
| Financial liabilities |
0.00 0.00Other changesOther changes were the balance of financial assets held for trading at the date of merger and acquisition of ShanghaiHongsong.Whether there were any significant changes in the measurement attributes of the Company's primary assets during thereporting period?Yes ?No
4. Restricted rights to assets as of the end of the reporting period
For details, see Section X. Financial Statements "\7. Notes to consolidated financial statements \81. Assets with RestrictedOwnership or Use Rights".
VII. Analysis of investment
1. Overall situation
?Applicable ?Not applicable
| Investment amount in the reporting period (yuan) | Investment amount in the same period of the previous year (yuan) |
Change percentage
| 3,287,448,839.13 | 4,609,168,278.88 | -28.68% |
2. Significant equity investments acquired during the reporting period
?Applicable ?Not applicable
3. Significant non-equity investments in progress during the reporting period
?Applicable ?Not applicableProject name
Investmentmethod
Investment in fixedassets ornot
Industriesinvolved ininvestmentprojects
Investment amountin the currentreporting period
Cumulative actualinvestment amountas of the end of thereporting period
Source of
funds
Projectprogress
Estimated income
Cumulativerealized gains asof the end of thereporting period
not meeting
thescheduledprogress and
projected
| earnings |
Date ofdisclosure(if any)
DisclosureIndex (if
any)
construction
| project |
Independent Yes
Medicalconsumables
20,062,706.26 135,793,225.58 Proceeds 62.62% 0.00 0.00 N/A
construction
| project |
Independent Yes
Healthy consumergoods
91,840,093.19 400,166,046.20 Proceeds 64.75% 0.00 0.00 N/A
constructionproject
Independent Yes
| R&D Center | Medical |
consumables +healthy livingconsumer
26,112,172.15 150,066,344.12 Proceeds 69.66% 0.00 0.00 N/ADigitalmanagementsystem project
Independent Yes
| products |
| Medical |
consumables +healthy livingconsumer
24,472,391.47 144,685,912.11 Proceeds 53.82% 0.00 0.00 N/A
| products | ||
| Winner Industrial Park (Jiayu) Project |
Independent Yes
Medicalconsumables
129,274,043.91 370,803,301.13 Proceeds 88.29% 0.00 0.00 N/A
of Winner MedicalWuhan
Independent Yes
| Phase II Expansion Project | Medical |
consumables +healthy livingconsumer
54,442,432.15 580,529,382.72 Proceeds 96.75% 0.00 0.00 N/A
| products | ||||||||||||
| Total | -- | -- | -- | 346,203,839.13 | 1,782,044,211.86 | -- | -- | 0.00 | 0.00 | -- | -- | -- |
4. Financial assets measured at fair value
?Applicable ?Not applicable
Assetclasses
Initial investmentcost
Gain/loss fromchanges in fairvalue for theperiod
fair valuechangesincluded in
| equity |
Purchase amount
in the currentreporting period
Sales amount in thecurrent reporting
period
Accumulatedinvestment
income
Other changes Closing balance
Source of
funds
| Others | 493,000,000.00 | 6,039,558.65 | 1,114,500,000.00 | 1,289,587,315.00 | 7,521,787.32 | 319,090,847.26 | Proceeds |
Others 2,548,995,000.00 23,393,546.98 1,646,745,000.00 2,419,995,000.00 28,853,427.38 45,084,821.92 1,844,223,368.90
owned
| funds |
Trustproducts
1,340,000,000.00 30,206,730.40 180,000,000.00 90,000,000.00 1,456,407.69 1,460,206,730.40
owned
| funds | |||||||||
| Total | 4,381,995,000.00 | 59,639,836.03 | 0.00 | 2,941,245,000.00 | 3,799,582,315.00 | 37,831,622.39 | 45,084,821.92 | 3,623,520,946.56 | -- |
5. The use of proceeds
?Applicable ?Not applicable
The overall use of proceeds
?Applicable ?Not applicable
Unit: 10,000 yuan
| Total amount of proceeds | 355,884.93 |
| Total amount of proceeds invested during the reporting period | 34,631.61 |
| Total accumulated amount raised for proceeds | 304,748.08 |
| Total amount of proceeds for alteration purposes during the current reporting period | 2,000 |
| Total accumulated amount of proceeds for alteration purposes during the current reporting period |
11,102.13
3.12%
| Proportion of total amount of proceeds for alteration purposes during the current reporting period | |
| Description of the overall use of proceeds | |
| The China Securities Regulatory Commission (CSRC) approved that, in its "CSRC License [2020] No. 1822" document, the | |
Company made an
(excluding tax), net proceeds totaled 3,558.8493 million yuan. The proceeds mentioned above were verified by BDO CHINA
| SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP with a “Capital Verification Report” (Xin Kuai Shi Bao Zi |
[2020] No. ZI10584).In the first half of 2023, the Company mo
proceeds were used by the fundraising projects (including 112,300 yuan for replenishment of working capital).In the first half of 2023, the Company mobilized a total of
| 3.0474808 billion yuan of proceeds, of which: 1.7820442 billion |
yuan of proceeds were used for fundraising projects (including a total of 1.4481528 billion yuan of proceeds invested in fund-raising projects and 333.8914 million yuan of funds pre-invested in fund-raising projects by replacing self-
Committed proceeds projects?Applicable ?Not applicable
Unit: 10,000 yuan
Committed investment
financing funds),and a total of 1.2654366 billion yuan of idle proceeds for permanently replenishing the working capital.
projects and investment
of over-raised proceeds
| projects and investment | Whether |
the projecthas beenchanged(including
partial
Totalinvestmentin committed
proceeds
Adjusted
totalinvestment
(1)
Investmentamount inthe currentreporting
period
Cumulativeinvestmentamount as ofthe end ofthe reporting
period (2)
| change) | Investment |
progress asof the end
of thereportingperiod (3) =
The projectreaches theintended usable
status date
Benefitsrealizedin thecurrentreporting
period
Cumulative
benefitsrealized asof the end ofthe reportingperiod
Whetherprojectedbenefitsare met
Whetherthere is asignificantchange in
projectfeasibility
(2)/(1)
Committed investment projects
| Committed investment projects | |
| High-end dressing production line construction project | |
No 21,685.86 21,685.86 2,006.27 13,579.32 62.62%
September 30,2024
0 0 N/A No
Yes 70,456.87 61,804.04 9,184.01 40,016.6 64.75%
| Marketing network construction project | September 30, 2024 |
0 0 N/A No
Yes 23,542.15 21,542.15 2,611.22 15,006.64 69.66%
| R&D Center construction project | September 30, 2024 |
0 0 N/A No
No 26,881.05 26,881.05 2,447.24 14,468.59 53.82%
| Digital management system project | September 30, 2024 |
0 0 N/A No
| Bolster working capital | No | 9,102.13 | 9,102.13 | 0 | 0 | N/A | No | ||||
| Subtotal of committed investment projects |
-- 142,565.93 141,015.23 16,248.74 92,173.28 -- -- 0 0 -- --
| Investment of over-raised proceeds | |
| Winner Industrial Park (Jiayu) Project | |
Yes 42000 12927.4 37080.33 88.29%
0 0 N/A No
Committed investment
of over-raised proceeds
| projects and investment | Whether |
the projecthas beenchanged(includingpartial
Totalinvestmentin committedproceeds
Adjustedtotalinvestment
(1)Investmentamount inthe currentreporting
period
Cumulativeinvestmentamount as ofthe end ofthe reporting
period (2)
| change) | Investment |
progress asof the end
of thereportingperiod (3) =
The projectreaches theintended usable
status date
Benefitsrealizedin thecurrentreporting
period
Cumulative
benefitsrealized asof the end ofthe reporting
period
Whetherprojectedbenefitsare met
Whetherthere is asignificantchange in
projectfeasibility
(2)/(1)
Phase II ExpansionProject of WinnerMedical Wuhan
No 60,000 5,444.24 58,052.94 96.75%
December 31,2023
0 0 N/A No
| Phase II Expansion Project of Winner Medical Wuhan |
| Bolster working capital (if any) |
-- 117,441.53 11.23 117,441.53 100.00% -- -- -- -- --
-- 219,441.53 18,382.87 212,574.8 -- -- -- --
| Subtotal use of over-raised proceeds | |||||||||||
| Total | -- | 142,565.93 | 360,456.76 | 34,631.61 | 304,748.08 | -- | -- | 0 | 0 | -- | -- |
| Description of and reasons for not meeting |
the scheduled progress or
N/A
| projected earnings by projects (including the reasons for selecting "Not applicable" for "Whether projected benefits are met") |
| Description of significant changes in project feasibility |
N/A
progress of use of over-raised proceeds
| Amount, purpose and | Applicable |
| On October 12, 2020, the 13th meeting of the Second Board of Directors and the seventh meeting of the Second Board of Supervisors of the Company reviewed |
and approved the "Proposal Regarding the Use of Some Over-raised Proceeds To Permanently Supplement the Working Capital”, and agreed that the Companycould allocate RMB 639 million of the over-raised proceeds to supplement the working capital permanently. The Fifth Extraordinary General Meeting of 2020held on October 29, 2020, considered and approved the proposal. As of November 2, 2020, RMB 639.0000 million of over-raised proceeds have been used tobolster working capital.On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors of the Company reviewedand approved the “Proposal Regarding the Use of Over-raised Proceeds for the Investment in Winner
considered and passed by the Sixth Extraordinary General Meeting of 2020 held on December 15, 2020 and became effective. The main body of the Proposal isas follows: The Company plans to allocate RMB 400.0000 million of the over-raised proceeds to the investment in the Winner Industrial Park (Jiayu) Project.The total investment in Winner Industrial Park (Jiayu) Project is estimated at RMB 900.0000 million, and the implementing entity is Winner Medical (Jiayu)Co., Ltd. The project is located in Hubei Jiayu Economic Development Zone, adjacent to the Park’s 2nd Road in the north, 3rd Road in the south, Jiayu Avenuein the east, and Shijingpu Road in the west. The total land area is about 451 mu. The project r
| elies on independent research and development of patented |
technology achievements, and based on the existing advantages of the Company in the industry, considers natural cotton as the primary raw material to innovateand improve degreasing and spunlace technology. It adopts comprehensive use of high-pressure “water needle” and other high-
technologies, and plans to build production projects about spunlace, wash care, wet wipes, medical cotton/gauze/nonwoven fabrics, hand sanitizer and otherproducts. As of June 30, 2023, the total amount invested in the above project is RMB 370.8033 million.On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors of the Company reviewedand approved the “Proposal Regarding the Use of Over-raised Proceeds for the Phase II Expansion Project of Winner Medical Wuhan”. The main body of theProposal is as follows: The Company plans to allocate RMB 600.0000 million of the over-raised proceeds to the investment in the Phase II Expansion Project ofWinner Medical Wuhan. The total investment in Phase II Expansion Project of Winner Medical Wuhan totals RMB 1,500.0000 million, and the implementingentity is Winner Medical (Wuhan) Co., Ltd. The project includes non-woven coil center, sterilization processing center, domestic medical sales and marketingcenter, intelligent distribution center of Hubei regional headquarters, regional headquarters in Central China and the second R&D center of the Group, which arefully invested and independently operated by the Company. Thanks to the project construction, the Company's production capaci
| ty and market share will be |
increased, enabling it to become a global leader in overall technical level and product quality scale. As of June 30, 2023, the total amount invested in the aboveproject is RMB 580.5294 million.The Company held the sixth meeting of the third session of the Board of Directors and the fifth meeting of the third session of the Board of Supervisors on April20, 2022, and reviewed and approved the “Proposal Regarding the Use of Some Over-raised Proceeds to Supplement the Working Capital Permanently”, andagreed that the Company could allocate 494.19 million yuan of the over-raised proceeds and the co
working capital (and subsequently, together with the proceeds from finance products, the actually supplemented working capita
| l was 535.4153 million yuan). The proposal was considered and passed by the Annual General Meeting of 2021 held on May 13, 2022 and became effective. | |
| Change of location for the implementation of the proceeds investment |
project
| Applicable |
| Occurred in the previous year |
| On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors of the Company reviewed |
and approved the “Proposal Regarding Capital Increase in Wholly owned Subsidiaries with Some of the Proceeds, Changes to Impl
Fundraising Projects, and Addition of Implementation Sites of Some Fundraising Projects”. The main body of the Proposal is as follows: To further improve theproduction, management efficiency and comprehensive utilization rate of resources, seize market development oppor
| tunities, and better promote the |
implementation of fundraising projects, the Company plans to use some of the proceeds to increase the capital of the wholly-owned subsidiaries and change theimplementing entity of the fundraising projects, and add new implementation sites for the fundraising projects. Where the original implementing entity of The"R&D Center Construction Project" was Winner Medical (Wuhan) Co., Ltd. Based on the corporate development strategies and actu
proposed to add Winner Medical Co., Ltd. as the implementing entity of "R&D Center Construction Project", and add "Winner Industrial Park, No. 660 Bulong
| Road, Longhua New District, Shenzhen City" as the project implementation location accordingly. | |
| Adjustment of the |
i
project
| mplementation mode of the proceeds investment | Applicable |
| Occurred in the previous year | |
| The Company held the sixth meeting of the third session of the Board of Directors and the fifth meeting of the third session of the Board of Supervisors on April |
20, 2022, and reviewed and approved the "Proposal on Adjusting the Implementation Mode, Extending the Construction Period and Permanently Bolstering theWorking Capital of Some Fund Raising Projects", which became effective after the consideration of the 2021 Annual General Meeting of Shareholders held onMay 13, 2022. The main contents of the proposal were as follows: To quickly respond to market changes and improve the utilization efficiency of proceeds, themarketing network building project increased the investment related to online marketing of Shenzhen Purcotton Technology Co., Ltd., a wholly-ownedsubsidiary. Also, due to strategic adjustments, the marketing network building project terminated the investment related to network building of Shenzhen
Committed investment
of over-raised proceeds
| projects and investment | Whether |
the projecthas beenchanged(includingpartial
Totalinvestmentin committedproceeds
Adjustedtotalinvestment
(1)Investmentamount inthe currentreporting
period
Cumulativeinvestmentamount as ofthe end ofthe reporting
period (2)
| change) | Investment |
progress asof the end
of thereportingperiod (3) =
The projectreaches theintended usable
status date
Benefitsrealizedin thecurrentreporting
period
Cumulative
benefitsrealized asof the end ofthe reporting
period
Whetherprojectedbenefitsare met
Whetherthere is asignificantchange in
projectfeasibility
Pre-
(2)/(1)
investment andreplacement of theproceeds investment
project
| investment and replacement of the proceeds investment | Applicable |
| On February 26, 2021, the 18th meeting of the Second Board of Directors and the 12th meeting of the Second Board of Supervisors of the Company reviewed |
and approved the "Proposal on Opening bank Accounts and the Replacement of Self-financing Funds Pre-invested in New Projects with Excess Funds Raised",respectively, and agreed that the Company could replace the self-raised funds pre-
has been verified by the [2021] No.ZI10031 "Special Auditor's Report on Proceeds Replacement of Winner Medical Products Co.,
| Ltd." issued by BDO |
Certified Public Accountants (Special General Partnership) on February 23, 2021. Among them: the actual investment amount of the Company’s self-raisedfunds pre-invested in the proceeds investment project is RMB 100.1742 million, of which: RMB 85.8942 million was invested in the Wuhan Phase II expansionproject, and RMB 14.28 million was invested in Winner Industrial Park (Jiayu) Project. In February and March 2021, the Compan
yuan and RMB85.8942 million respectively from the special account for proceeds to replace the self-
| raised funds that had been invested in advance in the |
proceeds project.On October 12, 2020, the 13th meeting of the Second Board of Directors and the seventh meeting of the Second Board of Supervisors of the Company reviewedand approved the “Proposal Regarding the Use of Proceeds to Replace Self-raised Funds Pre-invested in the Fundraising Project”, respectively, and agreed thatthe Company could replace the self-raised funds pre-invested in the fundraising project with RMB 233.
[2020] No.ZI10635 "Special Auditor’s Report on Proceeds Replacement of Winner Medical Products Co., Ltd." issued by BDO Certi
| fied Public Accountants |
(Special General Partnership) on October 12, 2020. Among them: the actual investment amount of the Company’s self-raised funds pre-invested in the proceedsinvestment project is RMB 233.7173 million, of which: RMB 26.5062 million was invested in high-
110.0794 million was invested in marketing network building project, RMB 50.2174 million was invested in R&D center construction
| project, RMB 46.9143 |
million was invested in digital management system project. In October and November 2020, the Company transferred RMB 73.4204 million and RMB 160.2968
| million respectively from the special account for proceeds to replacing the self-raised funds that had been invested in advance in the proceeds project. | |
| Temporary replenishment of |
working capital with idle
N/A
| proceeds |
| Amount of and reasons for the balance of proceeds resulting from project implementation |
N/A
proceeds not used during
| the current reporting period |
As of June 30, 2023, the balance of unused proceeds of the Company was 647.974 million, of which: the balance of cash management was 537.9127 million andthe balance of 110.0613 million was deposited in the account for proceeds.
circumstances in the use
| and disclosure of proceeds |
N/A
Changes in proceeds projects?Applicable ?Not applicable
Unit: 10,000 yuan
Project after change
Correspondingoriginal committed
projects
amount ofproceeds tobe invested
in thechanged
| project (1) |
Actualinvestmentamount inthe currentreportingperiod
cumulativeinvestmentamount as of
the end ofthe reporting
| period (2) | Investment |
progress asof the endof thereportingperiod (3) =
The projectreaches theintended usable
status date
Benefitsrealizedin thecurrentreporting
period
Whetherprojectedbenefitsare met
Whether there is asignificant change inthe feasibility of the
changed project
| (2)/(1) | |||
| Marketing network construction project | Marketing network construction project |
61,804.04 9,184.01 40,016.6 64.75%
0 N/A No
| September 30, 2024 | |||
| R&D Center construction project | R&D Center construction project |
21,542.15 2,611.22 15,006.64 69.66%
0 N/A No
| September 30, 2024 | |||
| Winner Industrial Park (Jiayu) Project | Winner Industrial Park (Jiayu) Project |
42,000 12,927.4 37,080.33 88.29%
0 N/A No
| December 31, 2023 | |||||||||
| Total | -- | 125,346.19 | 24,722.63 | 92,103.57 | -- | -- | 0 | -- | -- |
Reasons for change, decision-
information disclosure (by specific project)
| making procedures and | The Company held the sixth meeting of the third session of the Board of Directors and the fifth meeting of the |
third session of the Board of Supervisors on April 20, 2022, and reviewed and approved the "Proposal on
Working Capital of Some Fund Raising Projects", which became effective after the consideration of the 2021
| Annual General Meeting of Shareholders held on May 13, 2022. The investment on the marketing network |
building project of PureH2B was terminated. The remaining proceeds not used for the marketing network
replenished together with the proceeds of th
| e financial products will be 91.0213 million yuan). |
(Announcement No.: 2022-021)
the third session of the Board of Supervisors on 5 May 2023, and r
| eviewed and approved the ''Proposal on Adjusting the Use of Proceeds, Extending the Construction Period of Some Fund Raising Projects'', which became effective after the consideration of the 2022 Annual General Meeting of Shareholders held on May |
16, 2022.
| The proceeds from the research and development center construction project should be adjusted among the implementation entities, part of the proceeds from the R&D Center Construction Project shall be moved to the Winner Industrial Park (Jiayu) Project. (Announcement No.: 2023-018) | |
| Information on and reasons for not meeting the scheduled progress or projected earnings (by specific project) | The fund-raising capital investment project has not been completed and the benefits generated by the fund-raising capital investment project cannot be calculated yet |
| Description of significant changes in the feasibility of the changed project | There has been no material change in the feasibility of the marketing network building project, the R&D center construction project and the Winner Industrial Park (Jiayu) Project |
6. Entrusted financial management, derivatives investment and entrusted loans
Information of entrusted financial management?Applicable ?Not applicableOverview of entrusted financial management during the reporting period
Unit: 10,000 yuanSpecific type
Source of funds forentrusted financialmanagement
in entrustedfinancial
| management |
Outstanding
balance
Overdue amount not
recovered
impairment for
overdue financial
| management | ||
| Bank financial products |
Self-owned funds 167,674.5
184,422.34 0 0
| Bank financial products |
Proceeds 111,450
31,909.08 0 0
| Trust financial products |
Self-owned funds 18,000
146,020.67 0 0
| Total | 297,124.5 | 362,352.09 | 0 | 0 |
Specific circumstance of high-risk entrusted financing with significant single amount or with low security and poor liquidity?Applicable ?Not applicableThe entrusted financing is expected not to recover the principal or has other circumstances that may cause impairment?Applicable ?Not applicable
Derivatives investment?Applicable ?Not applicableThe Company has no derivative investment in the reporting period.Information of entrusted loans?Applicable ?Not applicableThe Company had no entrusted loan during the reporting period.VIII. Sales of significant asset and equity
1. Information of significant assets for sale
?Applicable ?Not applicableThe Company did not sell any significant assets during the reporting period.
2. Information of significant equity for sale
?Applicable ?Not applicable
IX. Analysis of major holding companies and joint stock companies
?Applicable ?Not applicableInformation on major subsidiaries and joint stock companies with an impact of 10% or more on the Company's net profit
| Company name | Company type |
Principal operation Registered capital Total assets Net assets Operating income Operating profit Net profitWinnerMedical(Huanggang)Co., Ltd.
Subsidiaries
259,459,200.00 1,521,382,941.58 1,358,906,294.91 602,253,321.24 107,275,995.48 94,270,507.52
Acquisition and disposal of subsidiaries during the reporting period?Applicable ?Not applicable
Company name
Mainly responsiblefor the productionof large rolls ofcotton and cottontissuesMethod of acquisition and disposal ofsubsidiaries during the reporting period
| Method of acquisition and disposal of subsidiaries during the reporting period | Impact on overall production operations and performances | |
| Pan-China (H.K.) | Establishment | No material impact |
| Mexico Longtai | Establishment | No material impact |
Description of major holding companies and joint stock companies
X. Structured subjects controlled by the Company
?Applicable ?Not applicable
XI. Risks faced by the Company and countermeasures
1. Risk of raw material price fluctuations and countermeasures
The Company's main raw materials are cotton as well as cotton yarn and cotton greige fabric for medical use made fromcotton. The prices of cotton are affected by multiple factors such as planting area, natural production, inventory cycle,agricultural price policy of origin, consumer demand and even futures prices. In addition, the prices of imported cotton arealso affected by other factors such as international trade policies and exchange rate fluctuations. If the purchase price of rawmaterials such as cotton continues to rise in the future, it will have a greater cost pressure on the Company's production andoperation. If the Company fails to the adjustment of sales price with that of raw material price, it may have a negative impacton the stability of the Company's profitability.
To deal with the risk of cotton price fluctuations, the Company usually adopts a cotton procurement stocking mechanism, andwhen the cotton price rises to a certain level, it will adjust the sales price appropriately to reduce the negative impact on theCompany's profitability.
2. Exchange rate risks and countermeasures
Medical consumables are the main exports of the Company, which are settled in major international currencies such as USdollars. In the first half of 2023, the Company's foreign sales amount in the overall revenue accounted for 17.7%. In recentyears, with the accelerated pace of China Yuan internationalization and further marketization of the China Yuan exchangerate formation mechanism, the exchange rate flexibility of China Yuan against the above currencies has increased.Fluctuations in the China Yuan exchange rate will, on the one hand, affect the Company's product export sales prices; on theother hand, it will also cause the Company to generate exchange gains and losses. Suppose there is a significant appreciationof China Yuan in the future. In that case, it will affect the Company's price competitiveness in overseas markets, and causeexchange losses, which will adversely affect the Company's operating income and profits.To reduce the impact of exchange rate fluctuations on the Company's performance, (1) for long-term stable customers, theCompany has an agreed price adjustment mechanism, and in case of significant fluctuations in key elements affecting theprice, the price shall be adjusted generally according to the agreed price adjustment mechanism; and at the same time, theCompany adjusts the quotation cycle for new orders received, shortens the quotation cycle, and adjusts the quotationexchange rate in a timely manner; (2) the Company carries out forward settlement and sale of foreign exchange for thepurpose of hedging, and locks the forward settlement exchange rate in advance to reduce the risk and hedge the exchange raterisk in international business; and (3) The Company will strengthen its research and analysis of exchange rates, pay attentionto changes in the international market environment in real time, and adjust its business strategies in a timely manner tominimize the risk of exchange rate fluctuations.
3. Risk of changes in industry policies and standards
Medical device, which directly affects users' life and health safety, has been a key supervised industry. In recent years, asChina further deepens the reform of the medical and health system, relevant government departments have introduced aseries of regulations and policies on industry standards, bidding, price formation mechanisms, circulation systems, etc.,which have a wide and profound impact on the development of the medical device industry. If the Company fails to adapt toprofound changes in industry policies in a timely manner, it may impact the Company's operations.
4. Impairment risk of goodwill and other assets and countermeasures
Since 2022, the Company acquired Longterm Medical, Winner Medical (Hunan) and Winner Guilin to improve its industrialchain. As of the first half of 2023, the carrying value of goodwill amounted to 1.054 billion yuan, accounting for 8.93% of itsnet assets. In case of subsequent underperformance of the aforementioned acquired company, the Company will take animpairment on the goodwill, which may ultimately harm the Company's performance.At the end of each year, the Company performs an impairment test on participating companies or companies consolidatedunder non-common control (whether or not there is an indication of impairment). The Company will make provision forimpairment, if any, based on the impairment test results. The existence of the case mentioned above will likely have animpact on the Company's annual net profit. To deal with the risk of impairment of assets such as goodwill, the Company willmake more efforts to strengthen its business management, improve its business performance and reduce the risk of assetimpairment.
5. Risk of not receiving reimbursement for the Medical Investment Project of Winner Medical (Heyuan) and
countermeasuresDue to the planning of the square of Heyuan High-speed Railway Station and the surrounding high-speed railway new townalong the Jiangxi-Shenzhen High-speed Railway, the "Agreement on Investment and Construction of Medical Combo Kitsand Cotton Household Products Production Project" entered into by and between the Company and the People's Governmentof Zijin County, Heyuan City in May 2016 could not be fulfilled. In November 2019, the International Arbitration Court inGanjiang New District issued an "Award" confirming the termination of the "Investment and Construction Agreement ofMedical Combo Kits and Cotton Household Products Production Project", and the People's Government of the Zijin Countyshall compensate the Company for economic losses of 550 million yuan, with 50% to be paid by the People's Government ofZijin County by December 31, 2019 and 50% by February 29, 2020. As of the disclosure date of the report, the Company hasreceived a land transfer deposit of 3 million yuan and a compensation payment of 328 million yuan returned by the People'sGovernment of Zijin County. There is a risk that the remaining amount of 225 million yuan may not be received on time inaccordance with the "Award". The Company has made a provision for bad debts of 112 million yuan in accordance with theaccounting policy. The Company has applied to the court for enforcement and has been accepted by the court. The Companyis currently closely following up on the subsequent payment plan of the People's Government of Zijin County, Heyuan City.
6. Risks of proceeds projects and countermeasures
The Company plans to allocate the proceeds from this listing to the construction projects of advanced wound dressingproduction lines, a marketing network, an R&D Center and a digital management system. Such projects' developmentprogress and operation will contribute to the Company's development and profitability in the next few years.Based on the future market forecast, the Company has conducted a prudential and sufficient feasibility study anddemonstration of the proceeds investment project. Thanks to the Company's rich business experience and market foundationaccumulated over the years, it is expected that the proceeds investment project could realize good investment income.However, suppose there are changes in external factors such as the industry market. In that case, it cannot rule out that someprojects may not be implemented as scheduled or the actual investment returns may be lower than expected. Followingchanges in the external market and the internal control and management system of proceeds projects, the Company willstrictly control the progress of capital investment in various projects and keep an eye on project investment risk.XII. Registration forms for receptions of surveys, communication, interviews and other
activities during the reporting period
?Applicable ?Not applicableTime Location Method
Types ofobjects
Objects
Main contents ofdiscussions anddocuments provided
information
index of
| surveys |
January 17, 2023
Headquarterconferencerooms
Telephonecommunication
Institutions
Great Wall Funds
| 119 investors, including China Southern Fund, Fullgoal Fund and Invesco | Business overview and |
operation
SZSEInteractive
| Ease |
February 8, 2023
Headquarterconferencerooms
Telephonecommunication
Institutions
Fund and Infore Capital
| 32 investors, including Ping An Fund, Rongtong | Business overview and |
operation
SZSEInteractive
| Ease |
February 20, 2023
Headquarterconferencerooms
Telephonecommunication
Institutions
| 53 investors, including ChinaAMC, Beike Investment, Ping An Securities Asset Management | Business overview and |
operation
SZSEInteractive
| Ease |
April 25, 2023
ShenzhenPanoramaRoadshowHall
Others Institutions
Da Cheng Fund
| 87 investors or media, including China Southern Fund, Fullgoal Fund and | Company's FY2022 operation and financial |
performance
SZSEInteractive
| Ease |
April 26, 2023
Headquarterconferencerooms
Telephonecommunication
Institutions
Fund and ChinaAMC
| 80 investors, including China Southern Fund, GF | Company's FY2022 operation and financial |
performance
SZSEInteractive
| Ease |
June 5, 2023
Headquarterconferencerooms
Telephonecommunication
Institutions
Lombarda China Fund
| Investors such as CCB Wealth Management, Danyi Investment, | Business overview and |
operation
SZSEInteractive
| Ease |
Section IV Corporate governance
Section IVCorporateGovernance
I. Information about the annual general meeting of shareholders and extraordinary
general meeting of shareholders held during the reporting period
1. General meeting of shareholders during the reporting period
Meetingsession
Meeting type
participation
| proportion |
Convening date Date of disclosure Resolutions of the meeting
Annual generalmeeting ofshareholders
76.92% May 16, 2023 May 17, 2023
| Annual general meeting of shareholders in 2022 | Proposal on the <Annual Report and Summary for 2022>, Proposal on the Plan on the Profit Distribution for 2022, etc. |
2. The preferred shareholders with voting rights restored request an extraordinary general meeting of
shareholders?Applicable ?Not applicableII. Change of directors, supervisors and senior management
?Applicable ?Not applicableThere were no changes in the directors, supervisors and senior management of the Company during the reporting period,which can be found in the Annual Report 2022.III. Profit distribution and share capital increase from capital surplus during the
reporting period?Applicable ?Not applicableThe Company plans not to distribute cash dividends, send bonus shares or increase capital by capital reserve for the half-year.
IV. Implementation of the company's equity incentive plan, employee stock ownership
plan or other employee incentive measures
?Applicable ?Not applicable
1. Share Incentive
The Company held the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board ofSupervisors on November 27, 2020, as well as the 6th Extraordinary General Meeting of Shareholders 2020 on December 15,2020, respectively, deliberated and approved the "Proposal on the 2020 Restricted Stock Incentive Plan (Draft) and ItsAbstract" and related matters. The General Meeting of Shareholders authorized the Board of Directors to determine the grantdate of restricted shares, and relevant matters which is necessary to grant restricted shares to the incentive object and gothrough the procedures for granting restricted shares when the incentive object meets the conditions. For details, please referto relevant announcements disclosed by the Company on CNINFO.com on December 16, 2020 and November 30, 2020.
On December 18, 2020, the Company held the 17th meeting of the Second Board of Directors and the 11th meeting of theSecond Board of Supervisors respectively, deliberated and approved the "Proposal on the Matters Related to the Adjustmentof 2020 Restricted Shares Incentive Plan" and the "Proposal on the First Grant of Restricted Shares to the Incentive Objects",and determined that December 18, 2020 will be the grant date of the incentive plan, 5.833 million restricted shares will begranted to 1,036 eligible incentive objects. For details, please refer to relevant announcement disclosed by the Company onCNINFO.com on December 22, 2020.The Company held the 6th meeting of the Third Board of Directors and the 5th meeting of the Third Board of Supervisors onApril 20, 2022, as well as the Annual General Meeting of Shareholders 2021 on May 13, 2021, respectively, deliberated andapproved the "Proposal on the Revocation of Partially Granted Restricted Shares Not Yet Vested". 3.366925 million grantedbut unvested restricted shares were revoked, because some incentive recipients could not meet the incentive conditions due totheir demission or holding the post of supervisors, while the Company failed to complete the incentive assessment targets for2021. For details, please refer to relevant announcements disclosed by the Company on CNINFO.com on April 22, 2022.The Company held the 11th Meeting of the Third Session of the Board of Directors and the 8th Meeting of the Third Sessionof the Supervisory Board on April 23, 2023, and deliberated and approved the "Proposal on the Achievement of the VestingConditions for the Second Vesting Period of the 2020 Restricted Shares Incentive Plan", and the vesting conditions for thesecond vesting period of the 2020 Restricted Shares Incentive Plan had been accomplished and the number of the Class IIRestricted Shares which could be vested in the current time was The number of Class II restricted shares that can be vestedthis time is 1.16214 million shares, and the Company will handle the vesting procedures for the 388 incentive recipients whomeet the vesting conditions in accordance with the relevant regulations. In addition, the "Proposal on Voiding Part of theGranted Restricted Shares Not Yet Vested" was deliberated and approved, due to the fact that an additional 95 incentiverecipients in the 2020 Restricted Shares Incentive Plan of the Company have left their jobs, and 419 incentive recipientsfailed to meet the standards of performance appraisal at the individual level in the year of 2022 resulting in failure to fullyvest the granted restricted shares, the Company intends to void the total number of its granted restricted shares of 1.303935million shares.
2. Implementation of Employee Stock Ownership Plan
?Applicable ?Not applicable
3. Other Employee Incentive Measures
?Applicable ?Not applicable
Section V Environment and Social Responsibility
Section VEnvironment andSocialResponsibility
I. Significant environmental issues
Whether the listed company and its subsidiaries are key pollutant discharging units announced by environmental protectionauthorities?Yes ?NoEnvironmental protection-related policies and industry standardsThe Company strictly complies with environmental protection related laws and regulations in its daily production andoperation, including the Environmental Protection Law of the People's Republic of China, the Law of People's Republic ofChina on Environmental Impact Assessment and Protection, the Law of the People's Republic of China on the Prevention andControl of Atmospheric Pollution, the Law of the People's Republic of China on Prevention and Control of EnvironmentalPollution by Solid Waste, the Water Pollution Prevention and Control Law of the People's Republic of China, the Law of thePeople's Republic of China on the Prevention and Control of Environmental Noise Pollution, Regulations on Administrationof Pollutant Discharge Permits, and the Measures for the Management of Automatic Pollution Sources Monitoring andGuidelines for Automatic Pollution Sources Monitoring and Management Technology of Hubei Province; and strictlyimplements relevant national emission standards, including the Discharge Standards of Water Pollutants for Dyeing andFinishing of Textile Industry (GB4287-2012), the Integrated Wastewater Discharge Standard (GB8978-1996), the IntegratedEmission Standard of Air Pollutants (GB16297-1996), the Emission Standard of Air Pollutants for Boiler (GB 13271-2014),the Emission Standards for Odorous Pollutants (GB14554-1993), and the Emission Standard for Industrial Enterprises Noiseat Boundary (GB 12348—2008).
Administrative license for environmental protection
| Company | Project name | Approval unit | Approval time | Acceptance |
WinnerMedical(Chongyang)
| Medical degreasing gauze series production line | Chongyang County |
EnvironmentalProtection Bureau
September 21, 2005 August 22, 2008
March 29, 2013 June 26, 2014
| Sterilization packaging and sterilization production line project |
| Qingshan plant construction project |
November 18, 2015 March 1, 2016
| Qingshan sewage treatment plant project | Xianning |
EnvironmentalProtection Bureau
March 01, 2017 March 20, 2017
RegistrationNewly built 6390M2 workshopproject
May 17, 2017 /WinnerMedical(Jiayu)
| Newly built 6390M2 workshop project | |
| Annual output of 800 tons of degreased cotton project | Jiayu County |
EnvironmentalProtection Bureau
March 20, 2013 September 20, 2014
December 25, 2014 September 28, 2017
| Winner Medical Purcotton construction project |
| Environmental Impact Assessment Report of Winner |
Industrial Park (Jiayu) Project
XianningEcologicalEnvironment
| Bureau |
March 15, 2021 Under construction
Medical
| (Yichang) | Annual output of 90 million |
meters of medical gauze project
Environmental
| Protection Bureau |
December 19, 2014 October 14, 2015WinnerMedical(Tianmen)
Pure cotton spunlace non-woven
products production projectTianmenEnvironmentalProtection Bureau
March 11, 2015
| fabric and medical dressing | Phase I January 25, 2017; |
Phase II May 10, 2020;
| Phase III December 31, 2022 | ||
| Medical dressing production line automation upgrading project |
January 19, 2016 March 23, 2018
January 17, 2022 December 31, 2022
| Company | Project name | Approval unit | Approval time | Acceptance |
WinnerMedical(Jingmen)
JingmenEnvironmentalProtection Bureau
October 18, 1999 December 14, 2001
| 30 million meters/year medical gauze bleaching and refining production line expansion project |
| Reform and expansion project of gauze pads, gauze sheets and shrinkage bandages |
September 23, 2003 August 3, 2005Annual output of 1500t de-bleaching medical gauze project
DistrictEnvironmental
| Protection Bureau |
April 5, 2006 September 27, 2017
construction project
| Winner Medical Purcotton | Jingmen |
Environmental
October 19, 2016 September 27, 2017
| Protection Bureau | |
| Expansion project of deblended gauze production line (Purcotton phase II expansion project) | Jingmen Ecological |
Environment
December 24, 2020 Under construction
WinnerMedical(Huanggang)
| Bureau | |
| Phase I of pure cotton spunlace |
non-
Hubei E.P.D. August 5, 2011
Phase I May 8, 2012;Phase II December 31, 2015
| woven fabric production project |
| Phase II of pure cotton spunlace |
non-
HuanggangEnvironmentalProtection Bureau
December 31, 2015 January 24, 2017
| woven fabric production project |
| New project of Purcotton distribution center |
June 27, 2016 October 10, 2018
| Boiler remodeling project | January 29, 2018 | November 14, 2019 | |
| Foam roll production line project (expansion) |
February 5, 2018 October 8, 2018
production line construction
| project |
November 6, 2018
yet
| Construction has not started | ||
| Medical protective products renovation project |
July 20, 2020 October 19, 2021
WinnerMedical(Wuhan)
cotton spun laced nonwovens and
| products production project | Wuhan Xinzhou |
District
Approval Bureau
July 12, 2017
| Administration and | Phase I January 18, 2020; Phase II is under construction | |
R&D Center construction project December 24, 2018
| Construction has not started yet | ||
| New electron accelerator |
irradiator project
Environmental
| Protection Bureau |
January 15, 2018
| Phase I May 15, 2020; Phase II November 19, 2021 | ||
| Medical protective equipment |
renovation project
Administrative
| Approval Bureau |
May 7, 2021 Under construction
| Winner Medical phase II expansion project | Administrative Approval Bureau of Wuhan Ecological |
Environment
June 21, 2022 Under construction
BureauInnovation research institute
construction project
August 9, 2022 Under constructionWinner Guilin
| Innovation research institute |
| Annual output of 200 million |
pairs of TPU-
| covered medical gloves, automation upgrading and energy saving retrofit project | Guilin Ecological |
EnvironmentBureau
May 15, 2023 Under construction
Discharge procedures: All subsidiaries of the Company have applied for discharge permits in accordance with relevanttechnical specifications, including Technical Specifications for the Application and Issuance of Pollutant Permit - GeneralRules (HJ942-2018), Technical Specifications for the Application and Issuance of Pollutant Permit - Textile and DyeingIndustry (HJ 861—2017), Technical Specifications for the Application and Issuance of Pollutant Permit - Boiler (HJ953—2018), Technical Specifications for the Application and Issuance of Pollutant Permit - General Wastewater Treating Process(HJ1120—2020), Self-monitoring Technology Guidelines for Pollution Sources - General Rules (HJ 819-2017), TechnicalSpecifications for Environmental Management Ledger and Emission Permit Implementation Report for Pollution Sources -General Rules (Trial) (HJ944-2018), Self-monitoring Technology Guidelines for Pollution Sources - Textile and DyeingIndustry (HJ 879-2017), and Self-monitoring Technology Guidelines for Pollution Sources - Thermal Power Generation andBoiler (HJ 820-2017).
The status of emission permits for each branch and subsidiary is as follows:
Subsidiaries Closing date
registration and
| issuance |
Validity Certificate No. Remark
| Chongyang Plant I | August 12, 2020 | August 12, 2020 | August 11, 2023 | 91421223732699160U003P | Registered |
| Chongyang Plant II |
April 28, 2020 April 28, 2020 April 27, 2025 91421223732699160U001P Registered
April 28, 2020 April 28, 2020 April 27, 2025 91421223732699160U002w Applied
| Chongyang Plant III |
| Winner Medical (Huanggang) Co., |
Ltd.
| September 22, 2020 | September 22, 2020 | September 21, 2023 |
91421100767435675X001V AppliedMay 27, 2021
| September 22, 2020 | September 21, 2023 |
91421100767435675X001V Re-appliedAugust 27, 2021
| September 22, 2020 | September 21, 2023 |
91421100767435675X001V Changed
August 21, 2020 August 21, 2020 August 20, 2023 914212217261049092001V Applied
| Winner Medical (Jiayu) Co., Ltd. |
| Winner Medical (Jingmen) Co., |
Ltd.
| August 27, 2020 | August 27, 2020 | August 26, 2023 | 914208006158216140001P | Applied |
| June 29, 2021 | August 27, 2020 | August 26, 2023 | 914208006158216140001P | Changed |
March 11, 2022 August 27, 2020 August 26, 2023 914208006158216140001P Re-applied
Ltd.
| Winner Medical (Tianmen) Co., | August 1, 2020 | August 6, 2020 | August 5, 2023 | 914290067261112368001P | Applied |
| September 1, 2022 | August 31, 2022 | August 30, 2027 | 914290067261112368001P | Re-applied | |
| December 13, 2022 |
August 31, 2022 August 30, 2027 914290067261112368001P Changed
(Wuhan) Co., Ltd.
September 1, 2020 September 1, 2020 August 31, 2023
| Winner Medical | 91420000MA48TD7BXB001V | |
AppliedJuly 18, 2022 September 1, 2020 August 31, 2023
Changed
| 91420000MA48TD7BXB001V | ||
| Yichang Winner Medical Textile Co., Ltd. |
April 30, 2020 April 30, 2020 April 29, 2025 91420583706860379K001W Registered
Latex Co., Ltd.
| Winner Guilin | July 27, 2020 | July 27, 2020 | July 26, 2023 | 914503008988813841001U | Applied |
| March 4, 2022 | July 27, 2020 | July 26, 2023 | 914503008988813841001U | Re-applied | |
July 20, 2022 July 27, 2020 July 26, 2023 914503008988813841001U Changed
(Hunan) Co., Ltd.
June 5, 2020 June 5, 2020 June 4, 2025 91430723565949803B001X
| Winner Medical | First registration | |
May 5, 2022 June 5, 2020 June 4, 2025 91430723565949803B001X
August 27, 2022 June 5, 2020 June 4, 2025 91430723565949803B001X
| Change of registration | ||
| Change of registration | ||
| Zhejiang Longterm Medical Technology Co., Ltd. |
May 29, 2020 May 29, 2020 May 28, 2025 91330500051340478U001Z
| First registration | ||
| November 11, 2021 |
May 29, 2020 May 28, 2025 91330500051340478U001Z
Industry emission standards and details of pollutant emissions involved in production and operation process
subsidiaryname
| Company or | Category of |
mainpollutantsandcharacteristic
| pollutants | Names of |
mainpollutants
andcharacteristic
Emission
mode
Number
ofdischarge
outlets
Distributi
on ofdischarge
outlets
Emissionconcentration/
intensity
Pollutant emission
standardsimplemented
Total emissions
Total emissions
approved
Emissions
beyondstandards
| pollutants | ||
| Winner |
Medical(Chongyang)
Gaseouspollutants
PM, SO
,NOX
/ 1
Boilerdischargeoutlet
6.2mg/m
,<3mg/m
,136mg/m
20mg/m
,50mg/m
,200mg/m
NOX:0.356T,SO
:0.007T
NOX：
13.28T/a,SO
:3.32T/a
Notexceedingthe standard
| Co., Ltd. |
| Winner |
Medical(Chongyang)
Liquidpollutants
PH,COD,BOD,NH
-N,SS
Directdischarge
Sewagedischargeoutlet
7.6,65mg/L,18.4mg/L
,0.18mg/L,5mg/L
6-9,80mg/L,20mg/L,10mg/L,50mg/L
COD:8.52T,NH
-N:0.143T
COD:57.6T/a,NH
-N:7.27T/a
Notexceedingthe standard
| Co., Ltd. |
| Winner |
Medical
Gaseouspollutants
PM, SO
,NOX
/ 1
Boilerdischargeoutlet
8.3mg/m
,<3mg/m
,87mg/m
20mg/m
,50mg/m
,200mg/m
NOX:1.399T,SO
:0.038T
NOX:
unlicensed, SO
:
unlicensed
Notexceedingthe standard
| (Jiayu) Co., Ltd. |
| Winner |
Medical
Liquidpollutants
PH,COD,BOD,NH
-N,SS
Directdischarge
Sewagedischargeoutlet
7.4,25mg/L,8.0mg/L,
0.323mg/L,9mg/L
6-9,100mg/L,20mg/L,15mg/L,70mg/L
COD:5.285T,NH
-N:0.48T
COD:34.29T/a,NH
-N:1.19T/a
Notexceedingthe standard
| (Jiayu) Co., Ltd. |
| Winner |
Medical(Huanggang)
Gaseouspollutants
PM, SO
,NOX
/ 2
| Co., Ltd. | 1#2# |
boilerdischarge
10.6/8.0mg/m
,<3mg/m
,93/87mg/m
20mg/m
,50mg/m
,200mg/m
NOX:5.872T,SO
:0.006T
| outlet | NOX: 23.52T/a, |
SO
: unlicensed
Notexceedingthe standard
Medical(Huanggang)
| Co., Ltd. |
Liquidpollutants
PH,COD,BOD,NH
-N,SS
Indirectdischarge
Sewagedischargeoutlet
7.2,68mg/L,14.3mg/L
,2.78mg/L,22mg/L
6-9,500mg/L,300mg/L,45mg/L,400mg/L
COD:21.11T,NH
-N:0.81T
COD90T/a,NH
-N:13.5T/a
Notexceedingthe standard
Medical(Tianmen)
| Co., Ltd. |
Gaseouspollutants
PM, SO
,NOX
/ 1
Boilerdischargeoutlet
2.8mg/m
,<3mg/m
,104mg/m
20mg/m
,50mg/m
,200mg/m
NOX:1.873T,SO
:0.053T
NOX:16.8764T/a,SO
:1.804T/a
Notexceedingthe standard
Medical(Tianmen)
| Co., Ltd. |
Liquidpollutants
PH,COD,BOD,NH
-N,SS
Indirectdischarge
Sewagedischargeoutlet
7.2,45mg/L,24.6mg/L
,0.83mg/L,20mg/L
6-9,400mg/L,150mg/L,30mg/L,250mg/L
COD:7.24TNH
-N:0.321T
COD:62.573T/a,NH
-N:6.2573T/a
Notexceedingthe standard
Medical
| (Wuhan) Co., Ltd. |
Gaseouspollutants
PM, SO
,NOX
/ / / / / /
license
Notexceedingthe standard
| No boiler, no | ||
| Winner |
Medical
Liquidpollutants
| (Wuhan) Co., Ltd. | PH, COD, |
BOD, NH3-N,
Indirectdischarge
Sewagedischargeoutlet
7.4,203mg/L,39.0mg/
L,1.1mg/L,3
6-9,500mg/L,300mg/L,45mg/L,64
COD:12.34T,NH
-N:1.234T
COD:90.35T/a,NH
-N:9.04T/a
Notexceedingthe standard
subsidiaryname
| Company or | Category of |
mainpollutants
andcharacteristic
| pollutants | Names of |
mainpollutants
andcharacteristic
Emissionmode
NumberofdischargeoutletsDistributi
on ofdischarge
outlets
Emissionconcentration/
intensity
Pollutant emissionstandardsimplemented
Total emissions
Total emissions
approved
Emissionsbeyondstandards
pollutantsWinner
Medical(Jingmen) Co.,
| Ltd. |
Gaseouspollutants
PM, SO
,NOX
/ 1
Boilerdischargeoutlet
2.8mg/m
,<3mg/m
,86mg/m
20mg/m
,50mg/m
,150mg/m
NOX:0.921T,SO
:0.038T
NOX：
10.83T/a,SO
:3.11T/a
Notexceedingthe standard
Medical(Jingmen) Co.,
| Ltd. |
Liquidpollutants
PH,COD,BOD,NH
-N,SS
Indirectdischarge
Sewagedischargeoutlet
8.1,43mg/L,9.4mg/L,
0.54mg/L,12mg/L
6-9,200mg/L,50mg/L,20mg/L,100mg/L
COD:4.33T,NH
-N:0.433T
COD：
19.48T/a,NH
-N:1.95T/a
Notexceedingthe standard
WinnerMedical
| Textile Co., Ltd. |
Gaseouspollutants
PM, SO
,NOX
/ 1
Boilerdischargeoutlet
/
20mg/m
,50mg/m
,150mg/m
Unlicensed Unlicensed
Decommiss
2022
| ioned in | ||
| Yichang |
WinnerMedical
Liquidpollutants
PH,COD,BOD,NH
-N,SS
Indirectdischarge
Sewagedischargeoutlet
7.6,131mg/L,39.3mg/
L,12.5mg/L,45mg/L
6-9,500mg/L,300mg/L,45mg/L,400mg/L
Unlicensed Unlicensed
Notexceedingthe standard
| Textile Co., Ltd. |
| Winner Guilin Latex Co., Ltd. |
Liquidpollutants
PH,COD,BOD,NH
-NSS
Indirectdischarge
discharge
| outlet |
7.4,54mg/L,16mg/L,4
.2mg/L,110mg/L
9,300mg/L,80mg/L,3
| 0mg/L,150mg/L |
Unlicensed Unlicensed
exceeding
| the standard | ||
| Winner |
Medical
Liquidpollutants
Residualchlorine
Indirectdischarge
Sewagedischargeoutlet
0.2mg/L - Unlicensed Unlicensed
Notexceedingthe standard
| (Hunan) Co., Ltd. |
| Zhejiang |
LongtermMedicalTechnology
Liquidpollutants
PH,COD,NH
-N
Indirectdischarge
Sewagedischargeoutlet
7.3,300mg/L,0.195m
g/L
6-9,500mg/L,45mg/L Unlicensed Unlicensed
Notexceedingthe standard
Processing of pollutants
① Winner Medical (Jiayu) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater mainly includes domestic sewage and production wastewater.Domestic sewage (including canteen wastewater) is first treated in oil separation tank and septic tank, and then mixed withproduction wastewater to enter the sewage treatment station in the plant. The sewage treatment station adopts "hydrolysisacidification + biological contact oxidation method" for treatment, and then discharged from the drainage outlet throughpipeline after reaching the standard. The wastewater has been installed with on-line monitoring. The sewage treatment stationpassed the environmental protection acceptance after the Environmental Protection Bureau of Jiayu County was completedon September 28, 2017, implementing the limit value of Discharge Standards of Water Pollutants for Dyeing and Finishing ofTextile Industry (GB4287-2012). The sewage plant were concrete structures with a service life of 20 years, and theenvironmental protection equipment has a service life of 10 years.Solid waste is mainly domestic waste of employees; impurities (cotton residue, cotton dust and cotton batting) generated inthe production process and cotton dust collected by dust removal equipment; the leftover materials produced in the slicingprocess; sludge from sewage treatment station; the hazardous waste generated is chemical material packaging barrel. Forgeneral solid wastes, disposal agreements are signed with disposal units; for hazardous wastes, disposal agreements aresigned with qualified disposal units.
② Winner Medical (Chongyang) Co., Ltd.
It is a key wastewater discharge enterprise. The project's wastewater mainly includes domestic, production, and experimentalwastewater. The production wastewater is discharged into the wastewater treatment station (hydrolysis acidification +biological contact oxidation method), and the treatment reaches the standard; the experimental wastewater is hazardous wasteand has been entrusted to a third party company for treatment. The domestic sewage of the employees and productionwastewater generated by the enterprise are directly discharged into the sewage treatment plant and discharged after reachingthe standard. Online wastewater monitoring has been installed, and the sewage station completed independent acceptance onMarch 20, 2017, implementing the limit value of Discharge Standards of Water Pollutants for Dyeing and Finishing ofTextile Industry (GB4287-2012). The sewage plant were concrete structures with a service life of 20 years, and theenvironmental protection equipment has a service life of 10 years.Solid waste mainly includes office and domestic waste of employees, dust, leftover materials and unqualified productsproduced in production. For domestic waste and general solid waste, disposal agreements are signed with disposal units, andfor hazardous waste, entrustment agreements are signed with third parties.
③ Yichang Winner Medical Textile Co., Ltd.
No production wastewater discharge, domestic wastewater enters the municipal pipe network, and clean energy natural gas isused as fuel. The gas boiler was decommissioned in 2022.
④ Winner Medical (Tianmen) Co., Ltd.
It is a key wastewater discharge enterprise. The wastewater mainly comes from the production wastewater produced by thedegreasing and bleaching workshop and the domestic sewage in the plant area. The main pollutants are pH, COD, suspendedsolids and BOD5. The production wastewater is discharged to the sewage treatment station (hydrolysis acidification +biological contact oxidation method), and the treatment reaches the standard; domestic sewage enters the sewage treatmentstation and is treated with the production wastewater. Online monitoring of wastewater has been installed, and the phase Iproject of the sewage station completed independent acceptance on March 23, 2018, implementing the limit value ofDischarge Standards of Water Pollutants for Dyeing and Finishing of Textile Industry (GB4287-2012). The sewage plantwere concrete structures with a service life of 20 years, and the environmental protection equipment has a service life of 10years.Treatment agreements are signed with disposal units for general solid waste and domestic waste. Hazardous solid waste ismainly chemical material packaging barrels, which raw material suppliers recycle, and no hazardous waste is transferred fordisposal.
⑤ Winner Medical (Jingmen) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewaterand domestic sewage. The production wastewater mainly comes from the scouring and bleaching process. The PH value ofthe wastewater is obviously alkaline and the COD value is high, but there is no harmful poisonous substance in it. Thewastewater is discharged into the self-built sewage station, treated by "flocculation precipitation + hydrolysis acidification +biological contact oxidation method + biological aerated filter", and then discharged into the downstream municipal sewageplant. After simple treatment in septic tank, domestic sewage will be treated in self-built sewage station. The sewage stationhas been built, online wastewater monitoring has been installed, and the pollutant discharge permit has been obtained. It is tobe accepted. It implements the limit value of Discharge Standards of Water Pollutants for Dyeing and Finishing of TextileIndustry (GB4287-2012). The sewage plant were concrete structures with a service life of 20 years, and the environmentalprotection equipment has a service life of 10 years.For domestic waste and general solid wastes, disposal agreements are signed with disposal units, and for hazardous wastes,transfer agreements are signed with third-party disposal units.
⑥ Winner Medical (Huanggang) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewaterand domestic sewage. The wastewater mainly comes from spun lace forming, degreasing / bleaching, and soft waterpreparation processes. Most of the wastewater from spun lace forming process is reused for production after being treated bywater treatment circulation system, while a small part of the wastewater are discharged into the self-built sewage station withthat from degreasing / bleaching process, and then discharged after being treated by "hydrolysis acidification + biologicalcontact oxidation" and reaching the standard. After simple treatment in septic tank, domestic sewage will be treated in self-built sewage station. Online monitoring of wastewater has been installed, and the sewage station passed the environmentalprotection acceptance after completion of Environmental Protection Bureau of Huanggang City on January 24, 2017,implementing the level III standard limit in Table 4 of Integrated Wastewater Discharge Standard (GB8978-1996). Thesewage plant were concrete structures with a service life of 20 years, and the environmental protection equipment has aservice life of 10 years.
The solid wastes of the project include general solid wastes, other solid wastes and hazardous solid wastes. The general solidwastes are mainly cotton impurities, leftover materials, defective products, boiler coal cinders, sludge from sewage treatmentfacilities, etc. generated in the production process. Other solid wastes are domestic wastes generated from office and life.Among them, cotton impurities, leftover materials and defective products are sold for comprehensive utilization; after thesludge is dehydrated, it will be treated by the environmental sanitation department together with the domestic waste.Hazardous solid wastes are mainly chemical waste packaging barrels, which raw material suppliers recycle, and the waste oilis stored in the plant area, and delivered to qualified units for disposal after reaching the transportation volume.
⑦ Winner Medical (Wuhan) Co., Ltd.
It is a key wastewater discharge enterprise. The project's wastewater mainly includes preparation, spun laced, degreasing,bleaching, domestic water, etc. The wastewater discharge of the project is 2126.93t/d after the completion of phase I,4067.11t/d after phase II, and 6004.5t/d after phase III. The process treats the wastewater of “hydrolysis acidification +anaerobic + biological contact oxidation method”. Online monitoring of wastewater has been installed, and the phase Iproject of the sewage station completed independent acceptance on January 7, 2020, implementing the level III standard limitin Table 4 of Integrated Wastewater Discharge Standard (GB8978-1996). The sewage plant were concrete structures with aservice life of 20 years, and the environmental protection equipment has a service life of 10 years.The solid wastes of the project are mainly divided into general solid wastes, other solid wastes and hazardous solid wastes.Among them, cotton impurities, leftover materials, defective products and fiber dust are purchased and recycled, and theenvironmental sanitation department disposes sludge and domestic waste.According to the Standard for Pollution Control on Hazardous Waste Storage (GB 18597-2001), the temporary storage roomof hazardous waste shall be constructed and the hazardous waste shall be stored as required. Meanwhile, the dailymanagement of hazardous waste should be strengthened. Disposal agreements for all hazardous waste are signed with thequalified units.
⑧ Winner Guilin Latex Co., Ltd.
The wastewater of the project mainly includes mold cleaning wastewater, leaching wastewater, soaking wastewater andequipment cleaning wastewater, and the production wastewater contains gum, insoluble coagulant and impurities in other rawand auxiliary materials, which are pretreated and removed before entering the comprehensive wastewater treatment station inthe plant. The existing three-stage septic tank treats the domestic wastewater of employees and then enters the comprehensivesewage treatment station together with the pretreated production wastewater. The company's integrated wastewater treatmentstation adopts air flotation + filtration process, and discharges the treated wastewater into the municipal wastewater treatmentplant. The exhaust gas from compound preparation, pre-vulcanization tank, latex parking tank, latex dipping drying and post-vulcanization is collected and discharged after treatment by exhaust gas treatment system (water spray + dehumidification +activated carbon adsorption).General industrial solid waste is waste rubber, unqualified products, waste packaging shall be taken up by the latex supplierfor regular recycling, sludge and domestic waste shall be taken up by the local sanitation department for unified cleaning anddisposal. Hazardous wastes are waste resin and waste activated carbon. They shall be collected centrally and entrusted tounits with corresponding hazardous waste treatment qualifications for disposal.
⑨ Winner Medical (Hunan) Co., Ltd.
A small amount of production wastewater and domestic sewage is discharged, among which production wastewater mainlyincludes cleaning wastewater, workshop cleaning wastewater, ethylene oxide exhaust absorption wastewater and pure waterpreparation wastewater. The wastewater, including the cleaning wastewater and workshop cleaning wastewater treated bysedimentation tank, the ethylene oxide exhaust absorption wastewater treated by adsorption method, and the canteenwastewater pretreated by grease trap, will be discharged to septic tank for treatment, and to Li County Wastewater TreatmentPlant for further treatment through municipal pipeline network. The waste gas, including the Injection molding waste gas,organic waste gas volatilized from printing process, and organic waste gas from bonding, will be collected and treated by lyespraying tower, and then sent to the UV photolysis + activated carbon adsorption device for treatment. After treatment, thewaste gas will be discharged through a 15m exhaust pipe.The general industrial solid waste consists of waste fabric and waste packaging materials, which are collected and recycledby the material company for comprehensive purposes. Hazardous wastes are waste raw material drums, waste activatedcarbon, waste mineral oil, waste UV photolysis lamps and waste adsorbent, which are collected centrally after classificationand disposed of by units entrusted with the corresponding hazardous waste treatment qualification.
⑩ Zhejiang Longterm Medical Technology Co., Ltd.Cleaning wastewater, concentrated water for pure water preparation and domestic sewage are discharged. The septic tank inthe factory pretreats domestic sewage, and then piped to Deqing Hengfeng Sewage Treatment Co., Ltd for centralizedtreatment with the concentrated water for pure water preparation and domestic sewage. Process exhaust gas is treated by onephoto-oxidation catalytic treatment equipment set and then discharged through a 15m exhaust funnel. Process dust is treatedby 1 set of cloth bag dust collectors and then discharged through a 15m exhaust funnel.The solid wastes are mainly the waste from the daily life of employees and solid wastes from the canteen are disposed of bysanitation department, the trimmings and defective products generated in the production process, waste packaging bagsgenerated from raw and auxiliary materials are sold to material recycling companies; hazardous wastes are waste activatedcarbon generated in the process of waste gas treatment and ethylene oxide waste liquid generated in the process ofsterilization, which is entrusted to corresponding qualified companies for treatment.
Environmental self-monitoring schemeAll companies have applied for discharge permits, of which the self-monitoring programs are formulated in accordance withthe relevant industry norms. Pollutants are mainly detected through a combination of manual laboratory tests + commissionedmonitoring + online monitoring. The key sewage subsidiaries involved in the production of wastewater discharge areinstalled with online monitoring systems, which are networked with government authorities for real-time monitoring, and theonline monitoring equipment is entrusted to a professional third-party company for operation and maintenance.Commissioned monitoring and manual monitoring projects are implemented according to the requirements of the monitoringprogram, and the monitoring results are released in a timely manner on the provincial pollutant platform. Self-monitoringscheme of each company is made public on the national pollutant discharge permit management platform.Emergency plan for environmental emergenciesIn order to further improve the emergency management system of environmental pollution accidents, improve the ability todeal with major environmental pollution accidents to ensure the safety of production and operation, improve the ability ofemployees to deal with accidents, standardize the Company's emergency management and corresponding emergencyprocedures, and implement emergency rescue work in a timely and effective manner, prevent and reduce the occurrence ofaccidents to the greatest extent, Winner Medical Co., Ltd. and its subsidiaries have set up an environmental accidentemergency leading group and formulated the Emergency Plan for Environmental Accidents.
Investment in environmental treatment and protection and related information on payment of environmentalprotection tax
During the reporting period, the amount of environmental protection tax paid by the Company and its subsidiaries accountedfor 69,600 yuan.
Administrative penalties imposed due to environmental issues during the reporting periodCompany orsubsidiary name
Reasons for
penalty
Violations Punishment
Impacts on the production andoperation of listed companies
measures of the
| Company | |||||
| None | None | None | None | None | None |
Other environmental information that should be disclosedN/AMeasures taken to reduce its carbon emissions during the reporting period and their effects
?Applicable ?Not applicableThe company has been actively engaged in energy-saving and consumption reduction activities by taking measures such asswitching to high-efficiency motors, implementing waste heat recovery, and optimizing pipelines. During the reportingperiod, a total of 3.719 million yuan was saved in energy costs.
Other information related to environmental protectionN/AThe Company needs to comply with the disclosure requirements of the "Textile and Apparel Business" stipulated in the No. 3Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
Information on environmental accidents of listed companies
N/A
II. Social responsibilityThe company was founded thirty-two years ago, and since its inception, it has always insisted on achieving the organic unityand dynamic balance of corporate benefits, environmental benefits and social benefits, unswervingly taking the road ofsustainable development, constructing a large health consumption system, and practicing the concept of green environmentalprotection. Winner Medical has always adhered to the core principles of "quality over profit, brand over speed, and socialvalue over corporate value", and practiced ESG concepts, pursuing stable development while always keeping in mind to feedthe society and contribute to green development.In the field of operational excellence, we will take digital transformation as a key, focus on the development direction of "sixinsights", invest more in scientific research and innovation, enhance management and operational efficiency, andcontinuously strengthen our internal strengths on the road of corporate development. In the field of environmental protection,we will continue to implement the national "carbon peaking and carbon neutrality goals", promote the building of thecompany's carbon management system in a scientific, systematic manner, and strive to realize low-carbon and environmentalprotection from raw materials in all stages of product design, R&D and production. In the field of social welfare, we willcontinue to give full play to the energy of the public welfare IP of "The Power of a Piece of Cotton", fight against the anxietyand impatience of the times with positive, tolerant and benevolent attitude, attach greater importance to the disadvantagedgroups, and build a harmonious and loving society together.
Section VI Important Matters
Section VIImportant Matters
I. Commitments fulfilled within and not fulfilled by the end of the reporting periodby the Company’s actual controller, shareholders, related parties, acquirers and othercommitment parties?Applicable ?Not applicableNo commitments fulfilled within and within and not fulfilled by the end of the reporting period by the Company’s actualcontroller, shareholders, related parties, acquirers and other commitment parties.II. Non-operating occupation of funds of listed companies by controlling shareholders
and their related parties?Applicable ?Not applicableNo non-operating occupation of funds of listed companies by controlling shareholders and their related parties during thereporting period.III. Illegal external guarantee
?Applicable ?Not applicableNo illegal external guarantee of the Company during the reporting period.IV. Appointment of and dismissal of accounting firmsWhether the semi-annual financial report has been audited?Yes ?NoThe semi-annual report of the Company has not been audited.
V. Statement of the board of directors and the board of supervisors on the "non-
standard audit report" of the accounting firm during the reporting period?Applicable ?Not applicableVI. Statement of the board of directors on the "non-standard audit report" of the
previous year?Applicable ?Not applicable
VII. Bankruptcy reorganization
?Applicable ?Not applicableNo bankruptcy reorganization of the Company during the reporting period.
VIII. Litigation mattersMajor litigation, arbitration matters?Applicable ?Not applicableBasic information oflitigation(arbitration)
involved(10,000
| yuan) | Whether |
to formestimated
Progress oflitigation(arbitration)
Trial result and influence of
litigation (arbitration)
| liabilities | Implementation |
of litigation(arbitration)
Date ofdisclosure
Disclosure
index
| judgment | ||
| Winner Medical v. |
People'sGovernment of Zijin
Zhong Zi No. 095]
55,565.53
| County, arbitration case of contract dispute [Case No.: (2019) Gan Guo |
No
compensation
| to the Company in |
accordancewith the award,
enforcement
| and has been |
accepted by thecourt.
terminat
| ed, and the People's Government of Zijin County had to return RMB 3 million of land transfer deposit to the Company, and compensate for economic losses of RMB 550 million as well as the lawyer's fees and legal costs. The land, |
above-
equip
| ment and facilities and relevant supporting materials of Heyuan Winner investment and construction project were handed over to the People's Government of Zijin County. There will be no adverse impact on the |
Company.
the report, the
| Company has received the land transfer deposit |
of RMB 3 millionand compensation
million
| (excluding legal fees and litigation |
costs) returned by
Zijin County. The
| Company has handed over the project land, |
above-groundbuildings,
relevantsupporting
| materials to the |
People's
| Government of Zijin County. |
Other litigation matters?Applicable ?Not applicableBasic information oflitigation (arbitration)
Amountinvolved(10,000 yuan)
to formestimated
| liabilities |
Progress of
litigation(arbitration)
and influenceof litigation
| (arbitration) | Implementation |
of litigation(arbitration)
Disclosure
Date
Disclosure
index
| judgment | ||
| Summary of other small |
lawsuits in which the
that do not meet the criteria
| for disclosure of material |
litigation
7,460.48 No
litigation/arbitrationprocess, some cases
| have not yet been concluded, and the |
concluded cases are
Nosignificant
| executed according to the process | impacts on |
theCompany'sproductionand operation
Executed
litigation/arbitration process
| according to | ||
| Summary of other small lawsuits in which the Company or its subsidiaries are defendants |
that do not meet the criteria
litigation
64.28 No
| for disclosure of material | In progress according to the |
litigation/arbitrationprocess, some cases
concluded cases are
| executed according to the process |
Nosignificant
theCompany'sproductionand operation
Executed
| impacts on | according to |
litigation/arbitration process
IX. Punishment and rectification
?Applicable ?Not applicable
X. Credit conditions of the company, its controlling shareholders and actual
controllers?Applicable ?Not applicableXI. Major related transactions
1. Connected transactions related to daily operation
?Applicable ?Not applicableThere were no connected transactions related to the Company's daily operation during the reporting period.
2. Connected transactions arising from the acquisition or sale of assets or equity
?Applicable ?Not applicable
No connected transactions arise from the company's acquisition or sale of assets or equity during the reporting period.
3. Connected transaction of joint foreign investments
?Applicable ?Not applicable
No connected transactions of joint foreign investment of the Company during the reporting period.
4. Related credit and debt transactions
?Applicable ?Not applicableNo related claims and debts of the Company during the reporting period.
5. Transactions with related finance companies
?Applicable ?Not applicable
There is no deposit, loan, credit or other financial business between the Company and the finance company with which it isaffiliated, the finance company controlled by the Company and the related parties.
6. Transactions between finance companies controlled by the Company and related parties
?Applicable ?Not applicableThere is no deposit, loan, credit or other financial business between the finance companies controlled by the Company andrelated parties.
7. Other major connected transactions
?Applicable ?Not applicableNo other major connected transactions of the Company during the reporting period.XII. Major contracts and their performance
1. Trusteeship, contracting and lease
(1) Trusteeship
?Applicable ?Not applicableNo trusteeship of the Company during the reporting period.
(2) Contracting
?Applicable ?Not applicableNo contracting of the Company during the reporting period.
(3) Lease
?Applicable ?Not applicableNo leasing of the Company during the reporting period.
2. Major guarantee
?Applicable ?Not applicableNo major guarantees of the Company during the reporting period.
3. Major contracts for daily operation
Unit: RMBName of
theCompany
to thecontract
Name ofthe otherparty to
thecontract
Totalcontractamount
Progress ofcontractperformance
sales revenue
recognizedduring thereporting
| period |
Cumulativeamount ofsalesrevenuerecognized
Collectionstatus ofaccountsreceivable
change in theconditions thatmay affect theperformance of
| major contracts | Any |
significantrisk that may
hamper theperformance
4. Other major contracts
?Applicable ?Not applicableNo other major contracts of the Company during the reporting period.XIII. Description of other important events?Applicable ?Not applicableThe Company needs to explain no other significant matters in the reporting period.
XIV. Major events of subsidiaries
?Applicable ?Not applicable
Section VII Changes in Shares and Shareholders
Section VIIChanges in Sharesand Shareholders
I. Changes in shares
1. Changes in shares
Unit: share
| Before this change | Increase/decrease (+, -) | After this change |
Quantity Proportion
issue of
| shares |
Sharedonation
increase from
| reserved funds |
Others Subtotal Quantity Proportion
| I. Restricted shares | 290,495,323 | 68.11% | 116,198,129 | 116,198,129 | 406,693,452 | 68.42% | |||
| 1. State shareholding | |||||||||
| 2. State legal person shareholding |
56,475 0.01% 22,590 22,590 79,065 0.01%
| 3. Other domestic holdings |
| Wherein: domestic legal person shareholding |
56,475 0.01% 22,590 22,590 79,065 0.01%
| Domestic natural person shareholding |
| 4. Foreign shareholding |
290,438,848 68.10% 116,175,539 116,175,539 406,614,387 68.41%
290,438,848 68.10% 116,175,539 116,175,539 406,614,387 68.41%
| Wherein: foreign legal person shareholding |
| Foreign natural person shareholding |
| II. Unrestricted shares | 135,996,985 | 31.89% | 51,696,930 | 51,696,930 | 187,693,915 | 31.58% | |||
| 1. RMB common share |
135,996,985 31.89% 51,696,930 51,696,930 187,693,915 31.58%
| 2. Foreign shares listed in China |
| 3/ Foreign shares listed abroad |
| 4. Other | |||||||||
| III. Total amount of shares |
426,492,308 100.00% 167,895,059 167,895,059 594,387,367 100.00%
Causes for change in shares?Applicable ?Not applicableThe Company implemented the 2022 equity distribution plan on June 1, 2023, which is the equity registration date. Based onthe 419,737,649 shares after deducting the repurchased shares, the Company intended to distribute a cash dividend of RMB
19.00 (tax-inclusive) per 10 shares to all shareholders, with 4 shares converted into share capital for every 10 shares without
any bonus shares. Therefore, the Company's total share capital including repurchased shares increased from 426,492,308shares to 594,387,367 shares.Approval of changes in shares?Applicable ?Not applicableThe Company held the 11th meeting of the 3rd Board of Directors, the 8th meeting of the 3rd Board of Supervisors on April23, 2023, and the 2022 Annual General Meeting on May 16, 2023, respectively, to review and approve the Proposal on the2022 Annual Profit Distribution Plan. Based on the 419,737,649 shares after deducting the repurchased shares, the Companyintended to distribute a cash dividend of RMB 19.00 (tax-inclusive) per 10 shares to all shareholders, with 4 shares convertedinto share capital for every 10 shares without any bonus shares.
Transfer of share changes?Applicable ?Not applicableImplementation progress of share repurchase?Applicable ?Not applicableImplementation progress of reducing repurchased shares by centralized competitive bidding?Applicable ?Not applicableInfluence of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of theCompany and other financial indexes in the most recent year and the most recent period?Applicable ?Not applicableWithout considering the impact of the new share change, the Company's basic earnings per share in the first half of 2023 willbe RMB 1.62, diluted earnings per share will be RMB 1.62, and the net assets per share attributable to ordinary shareholdersof the Company will be RMB 27.65;Take into consideration of the impact of the new share change, according to the latest calculation of total share capital afterthe share change, the Company's basic earnings per share in the first half of 2023 will be RMB 1.16, diluted earnings pershare will be RMB 1.16, and the net assets per share attributable to ordinary shareholders of the Company will be RMB 19.75;Other information the Company deems necessary or required by the securities regulatory authorities to disclose?Applicable ?Not applicable
2. Changes in restricted shares
?Applicable ?Not applicable
Unit: shareShareholder'sname
Number ofrestrictedshares at thebeginning of
the period
sharesreleased
fromrestricted
sale incurrent
| period |
Number ofrestricted
sharesincreased incurrent period
Number ofrestricted sharesat the end of the
period
Reasons forrestricted sale
The proposed date oflifting the restricted sale
Group
| Limited |
290,438,848 0 116,175,539 406,614,387
September 17, 2023Fang Xiuyuan 30,000 0 12,000 42,000
| Restricted shares before IPO |
| Shares locked by directors, supervisors and |
senior
| management | Unlocking in accordance with relevant regulations on shareholding by directors, supervisors and senior management |
Wang Ying 22,500 0 9,000 31,500
senior
| management | Unlocking in accordance with relevant regulations on shareholding by directors, supervisors and senior management |
ChenHuixuan
3,975 0 1,590 5,565
senior
| management | Unlocking in accordance with relevant regulations on shareholding by directors, supervisors and senior management | |||||
| Total | 290,495,323 | 0 | 116,198,129 | 406,693,452 | -- | -- |
II. Securities Issuance and Listing
?Applicable ?Not applicableIII. Number and shareholding of the Company's shareholders
Unit: share
reporting period
27762
| Total number of common shareholders at the end of the | Total number of preferred shareholders with voting rights |
restored at the end
| of the reporting period (if any) (see Note 8) | Total number of shareholders holding special voting shares |
(if any)
Shareholder's name
Shareholdernature
Shareholdingratio
| Shareholders holding more than 5% shares or top 10 shareholders | ||
| Number of | ||
shares held atthe end of the
reporting
Increase ordecrease during
the reporting
period
Note 1
| period | Number of |
shares heldwith limited
sales
| conditions | Number of |
shares heldwith unlimited
sales
| conditions | Pledged, tagged or frozen shares |
Status ofshares
QuantityWinner Group Limited
68.41% 406,614,387 116,175,539 406,614,387 0
| Overseas legal person | |
| Beijing Sequoia Xinyuan |
Equity Investment Center
Domestic non-state legal person
4.58% 27,240,487 5,106,345 0 27,240,487
| (Limited Partnership) |
| Xiamen Leyuan Investment Partnership (Limited Partnership) |
Domestic non-state legal person
3.01% 17,910,410 4,148,235 0 17,910,410
Domestic non-state legal person
1.60% 9,498,962 2,174,389 0 9,498,962
| Xiamen Yutong Investment Partnership (Limited Partnership) |
| Xiamen Huikang Investment Partnership (Limited Partnership) |
Domestic non-state legal person
0.97% 5,736,027 1,317,965 0 5,736,027
Domestic non-state legal person
0.50% 2,942,503 710,515 0 2,942,503
| Xiamen Zepeng Investment Partnership (Limited Partnership) |
| National Social Security Fund 101 Portfolio |
Others 0.49% 2,940,162 1,376,162 0 2,940,162
Others 0.46% 2,754,742 2,754,742 0 2,754,742
| Basic Endowment Insurance Fund 1001 Portfolio |
| Basic Endowment Insurance Fund 808 Portfolio |
Others 0.38% 2,269,120 1,033,140 0 2,269,120
Others 0.38% 2,265,037 1,695,733 0 2,265,037
| Industrial and Commercial Bank of China - E Fund ETF | |
| Strategic investors or general legal persons | |
becoming the top 10 shareholders due to the
N/A
| allotment of new shares (if any) |
| Description of the above-mentioned shareholder association or concerted action |
N/A
involved in entrusting / entrusted voting right
| and waiver of voting right |
N/A
| Special note on the existence of repurchase special accounts among the top 10 shareholders | As of June 30, 2023, the Company repurchased 6,754,659 shares held in the "special securities account for the |
repurchase of Winner Medical Co., Ltd."
Shareholder's name
| Shareholding of top 10 shareholders with unlimited sales conditions | ||
| Number of shares with unlimited sales | ||
conditions held at the end of the reporting
| period | Share type |
Share type Quantity
27,240,487 RMB common share 27,240,487
| Beijing Sequoia Xinyuan Equity Investment Center (Limited Partnership) |
| Xiamen Leyuan Investment Partnership (Limited Partnership) |
17,910,410 RMB common share 17,910,410
9,498,962 RMB common share 9,498,962
| Xiamen Yutong Investment Partnership (Limited Partnership) |
| Xiamen Huikang Investment Partnership (Limited Partnership) |
5,736,027 RMB common share 5,736,027
2,942,503 RMB common share 2,942,503
| Xiamen Zepeng Investment Partnership (Limited Partnership) | |||
| National Social Security Fund 101 Portfolio | 2,940,162 | RMB common share | 2,940,162 |
| Basic Endowment Insurance Fund 1001 Portfolio | 2,754,742 | RMB common share | 2,754,742 |
| Basic Endowment Insurance Fund 808 Portfolio | 2,269,120 | RMB common share | 2,269,120 |
| Industrial and Commercial Bank of China - E Fund ETF |
2,265,037 RMB common share 2,265,037
1,821,887 RMB common share 1,821,887
| Hong Kong Securities Clearing Company Limited |
| Description of the association or concerted action between top 10 public shareholders with unlimited sales conditions, and between top 10 |
public
N/A
| shareholders with unlimited sales conditions and top 10 shareholders |
| Description of the top 10 common shareholders participating in the financing and securities financing business (if any) |
N/ANote 1: The the number of shares in the "increase or decrease during the reporting period" of some shareholders increased,which is due to the Company's implementation of a plan of 4 shares converted into share capital for every 10 shares on June 2,2023.Whether the Company has arrangements for differences in voting rights?Yes ?NoWhether the Company's top 10 common shareholders and op 10 common shareholders with unlimited sales conditions agreedon a repurchase transaction during the reporting period?Yes ?NoThe Company's top 10 common shareholders and op 10 common shareholders with unlimited sales conditions did not agreeon a repurchase transaction during the reporting period
IV. The cumulative number of pledged shares of the controlling shareholder or the
largest shareholder of the Company and the person acting in concert accountsfor 80% of the total number of shares held by them in the Company?Applicable ?Not applicableV. Equity changes of directors, supervisors and senior management
?Applicable ?Not applicableThere was no change in the shareholding of directors, supervisors and senior management of the Company during thereporting period, which can be found in 2022 Annual Report.VI. Change in controlling shareholders or actual controllersChange of controlling shareholders during the reporting period?Applicable ?Not applicableThere was no change in controlling shareholders during the reporting period. Changes in actual controller during thereporting period?Applicable ?Not applicableThere was no change in actual controller during the reporting period.
Section VIII Information Related to Preferred Shares
Section VIIIInformationRelated toPreferred Shares
Applicable
Not applicable
Section IX Information Related to Bonds
Section IXInformationRelated to Bonds
Applicable
Not applicable
Section X Financial Report
Section XFinancial Report
I. Audit Report
Whether the semi-annual report is audited
?Yes ?No
The Company's semi-annual financial report has not been audited.
II. Financial Statements
Unit of statements in financial notes: RMB
1. Consolidated Balance Sheet
| Prepared by: Winner Medical Co., Ltd. | June 30, 2023 | Unit: yuan |
| Item | June 30, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and cash equivalents | 4,343,196,327.38 | 4,526,877,578.90 |
| Deposit reservation for balance | ||
| Lending funds | ||
| Tradable financial assets | 3,623,520,946.56 | 4,378,789,960.23 |
| Derivative financial assets | ||
| Notes receivable | 23,164,092.22 | 51,001,784.57 |
| Accounts receivable | 800,588,299.16 | 932,642,061.04 |
| Amounts receivable financing | 38,279,923.83 | 93,093,113.79 |
| Advances to suppliers | 135,413,790.57 | 229,225,273.09 |
| Premiums receivables | ||
| Reinsurance accounts receivable | ||
| Provision of cession receivable | ||
| Other receivables | 220,541,980.86 | 236,298,390.78 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Redemptory monetary capital for sale | ||
| Inventory | 1,413,693,053.64 | 1,558,923,573.37 |
| Item | June 30, 2023 | January 1, 2023 |
| Contract assets | ||
| Assets held for sales | ||
| Non-current assets due within a year | 0.00 | |
| Other current assets | 175,698,904.05 | 119,059,084.47 |
| Total current assets | 10,774,097,318.27 | 12,125,910,820.24 |
| Non-current assets: | ||
| Loans and advances | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 23,328,454.74 | 21,747,635.99 |
| Other equity instrument investments | ||
| Other non-current financial assets | 70,000,000.00 | 40,000,000.00 |
| Investment real estates | 8,224,991.33 | 8,747,014.25 |
| Fixed assets | 2,362,409,101.13 | 2,312,982,598.88 |
| Construction in progress | 1,017,739,015.40 | 765,009,910.63 |
| Productive biological assets | 0.00 | 0.00 |
| Oil and gas assets | 0.00 | 0.00 |
| Right-of-use assets | 416,590,030.56 | 472,356,125.64 |
| Intangible assets | 1,026,411,606.71 | 1,033,109,803.45 |
| Development expenditure | 0.00 | |
| Goodwill | 1,053,578,033.51 | 1,044,674,814.01 |
| Long-term unamortized expenses | 116,016,428.56 | 132,692,286.03 |
| Deferred income tax assets | 283,155,395.27 | 322,582,125.98 |
| Other non-current assets | 136,785,373.15 | 83,524,640.64 |
| Total non-current assets | 6,514,238,430.36 | 6,237,426,955.50 |
| Total assets | 17,288,335,748.63 | 18,363,337,775.74 |
| Current liabilities: | ||
| Short-term loans | 1,763,023,992.64 | 2,295,218,930.85 |
| Borrowings from central bank | ||
| Borrowing funds |
| Item | June 30, 2023 | January 1, 2023 |
| Trading financial liabilities | 0.00 | |
| Derivative financial liabilities | ||
| Notes payable | 86,200,204.52 | 24,760,000.00 |
| Accounts payable | 805,598,628.73 | 1,119,574,518.58 |
| Advance from customers | ||
| Contract liabilities | 239,363,072.30 | 566,819,254.08 |
| Financial assets sold for repurchase | ||
| Deposits from customers and interbank | ||
| Acting trading securities | ||
| Acting underwriting securities | ||
| Payroll payable | 203,597,080.67 | 312,450,241.38 |
| Taxes payable | 84,539,799.83 | 322,101,244.04 |
| Other payables | 917,656,694.74 | 570,843,242.88 |
| Including: Interest payable | ||
| Dividends payable | 566,642,012.68 | |
| Fees and commissions payable | ||
| Dividend payable for reinsurance | ||
| Liabilities held for sales | ||
| Non-current liabilities due within one year | 191,760,393.47 | 215,946,889.32 |
| Other current liabilities | 19,429,632.19 | 59,604,591.85 |
| Total current liabilities | 4,311,169,499.09 | 5,487,318,912.98 |
| Non-current liabilities: | ||
| Reserve fund for insurance contracts | ||
| Long-term loans | 180,000,000.00 | |
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Lease liabilities | 303,947,082.02 | 326,459,697.90 |
| Long-term payable | ||
| Long-term payroll payable | 8,579,637.94 | 8,579,637.94 |
| Estimated liabilities |
| Item | June 30, 2023 | January 1, 2023 |
| Deferred income | 126,610,563.31 | 98,791,412.91 |
| Deferred income tax liabilities | 233,730,351.12 | 244,258,589.21 |
| Other non-current liabilities | ||
| Total non-current liabilities | 852,867,634.39 | 678,089,337.96 |
| Total liabilities | 5,164,037,133.48 | 6,165,408,250.94 |
| Owner's equity: | ||
| Capital stock | 594,387,367.00 | 426,492,308.00 |
| Other equity instruments | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Capital reserve | 4,379,321,924.89 | 4,546,247,611.24 |
| Less: treasury stock | 500,082,734.11 | 500,082,734.11 |
| Other comprehensive income | 2,346,650.43 | 782,778.15 |
| Special reserve | ||
| Surplus reserve | 420,212,778.13 | 420,212,778.13 |
| General risk provision | 0.00 | |
| Undistributed profit | 6,710,230,837.23 | 6,826,115,347.65 |
| Total owners' equities attributable to the owners of parent company |
11,606,416,823.57 11,719,768,089.06
| Minority equity | 517,881,791.58 | 478,161,435.74 |
| Total owners' equities | 12,124,298,615.15 | 12,197,929,524.80 |
| Total liabilities and owners' equities | 17,288,335,748.63 | 18,363,337,775.74 |
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
2. Balance sheet of parent company
| Prepared by: Winner Medical Co., Ltd. | Unit: RMB |
| Item | June 30, 2023 | January 1, 2023 |
| Current assets: | ||
| Cash and cash equivalents | 3,410,124,924.05 | 3,657,596,762.00 |
| Tradable financial assets | 3,326,545,477.38 | 3,937,805,999.74 |
| Derivative financial assets | ||
| Notes receivable | 3,029,488.75 | 15,100,060.05 |
| Accounts receivable | 340,382,858.59 | 454,131,329.85 |
| Amounts receivable financing | 14,481,337.07 | 72,766,987.70 |
| Advances to suppliers | 680,838,901.90 | 1,247,948,057.70 |
| Other receivables | 125,325,368.83 | 123,628,108.60 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventory | 339,388,759.84 | 335,624,519.05 |
| Contract assets | ||
| Assets held for sales | ||
| Non-current assets due within a year | ||
| Other current assets | 127,698,486.46 | 100,484,526.44 |
| Total current assets | 8,367,815,602.87 | 9,945,086,351.13 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 3,580,096,539.05 | 3,547,654,880.31 |
| Other equity instrument investments | ||
| Other non-current financial assets | 70,000,000.00 | 40,000,000.00 |
| Investment real estates | ||
| Fixed assets | 56,328,105.37 | 99,683,983.66 |
| Construction in progress | 48,631,437.68 | 28,127,353.45 |
| Productive biological assets |
| Item | June 30, 2023 | January 1, 2023 |
| Oil and gas assets | ||
| Right-of-use assets | 63,457,441.86 | 73,896,162.36 |
| Intangible assets | 41,437,022.98 | 37,561,928.32 |
| Development expenditure | ||
| Goodwill | ||
| Long-term unamortized expenses | 18,202,393.57 | 20,782,444.19 |
| Deferred income tax assets | 49,530,678.50 | 50,466,779.11 |
| Other non-current assets | 26,182,128.75 | 24,649,870.57 |
| Total non-current assets | 3,953,865,747.76 | 3,922,823,401.97 |
| Total assets | 12,321,681,350.63 | 13,867,909,753.10 |
| Current liabilities: | ||
| Short-term loans | 810,000,000.00 | 1,010,087,083.33 |
| Trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 704,649,839.51 | 980,000,000.00 |
| Accounts payable | 356,902,087.14 | 868,496,158.04 |
| Advance from customers | 0.00 | |
| Contract liabilities | 133,639,732.52 | 464,022,623.08 |
| Payroll payable | 50,679,704.69 | 123,859,226.02 |
| Taxes payable | 10,533,051.56 | 145,900,821.94 |
| Other payables | 687,809,053.47 | 346,143,459.66 |
| Including: Interest payable | 0.00 | |
| Dividends payable | 551,833,811.20 | 0.00 |
| Liabilities held for sales | ||
| Non-current liabilities due within one year | 43,499,574.70 | 22,369,924.68 |
| Other current liabilities | 5,984,448.12 | 44,098,604.24 |
| Total current liabilities | 2,803,697,491.71 | 4,004,977,900.99 |
| Non-current liabilities: | ||
| Long-term loans | 180,000,000.00 | |
| Bonds payable | ||
| Including: preferred stock |
| Item | June 30, 2023 | January 1, 2023 |
| Perpetual bond | ||
| Lease liabilities | 44,352,557.70 | 54,991,421.86 |
| Long-term payable | ||
| Long-term payroll payable | ||
| Estimated liabilities | ||
| Deferred income | 16,119,246.53 | 17,434,675.44 |
| Deferred income tax liabilities | 17,873,544.72 | 12,594,840.31 |
| Other non-current liabilities | ||
| Total non-current liabilities | 258,345,348.95 | 85,020,937.61 |
| Total liabilities | 3,062,042,840.66 | 4,089,998,838.60 |
| Owner's equity: | ||
| Capital stock | 594,387,367.00 | 426,492,308.00 |
| Other equity instruments | ||
| Including: preferred stock | ||
| Perpetual bond | ||
| Capital reserve | 4,404,728,687.24 | 4,571,654,373.59 |
| Less: treasury stock | 500,082,734.11 | 500,082,734.11 |
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 411,397,111.21 | 411,397,111.21 |
| Undistributed profit | 4,349,208,078.63 | 4,868,449,855.81 |
| Total owners' equities | 9,259,638,509.97 | 9,777,910,914.50 |
| Total liabilities and owners' equities | 12,321,681,350.63 | 13,867,909,753.10 |
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
3. Consolidated Statement of Income
| Prepared by: Winner Medical Co., Ltd. | Unit: RMB |
| Item | Semiannual 2023 | Semiannual 2022 |
| I. Total operating income | 4,266,838,038.66 | 5,157,944,495.72 |
| Including: Operating income | 4,266,838,038.66 | 5,157,944,495.72 |
| Interest revenue | ||
| Premium earned | ||
| Fee and commission income | ||
| II. Total operating costs | 3,500,655,804.36 | 4,122,305,279.41 |
| Including: Operating costs | 2,071,428,206.72 | 2,640,556,563.64 |
| Interest expenditure | ||
| Fee and commission expense | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net reserve fund extracted for insurance liability | ||
| Bond insurance expense | ||
| Reinsurance costs | ||
| Taxes and surcharges | 37,346,208.61 | 41,159,361.43 |
| Selling expenses | 960,442,911.44 | 950,172,124.74 |
| Administrative expenses | 289,596,702.14 | 325,391,883.32 |
| R&D expenses | 194,636,202.14 | 238,644,498.62 |
| Financial expenses | -52,794,426.69 | -73,619,152.34 |
| Including: interest expenditure | 32,891,514.25 | 19,119,362.58 |
| Interest revenue | 69,863,134.66 | 62,087,089.05 |
| Plus: other incomes | 46,680,694.51 | 28,747,393.29 |
| Income from investment (loss expressed with "-") | 39,412,441.13 | 31,452,189.90 |
| Including: Income from investment of joint venture and cooperative enterprise |
1,580,818.74 2,408,209.89
| Income from derecognition of financial assets measured at amortized cost |
| Exchange gain (loss expressed with "-") | ||
| Net exposure hedging gain (loss expressed with "-") | ||
| Income from fair value changes (loss expressed with "-") | 59,639,836.03 | 35,182,098.83 |
| Item | Semiannual 2023 | Semiannual 2022 |
| Credit impairment losses (loss expressed with "-") | 2,831,973.61 | -7,749,168.11 |
| Assets impairment losses (loss expressed with "-") | -100,794,883.37 | -73,045,565.34 |
| Income from disposal of assets (loss expressed with "-") | 5,324,751.10 | -547,132.74 |
| III. Operating profits (loss expressed with "-") | 819,277,047.31 | 1,049,679,032.14 |
| Plus: Non-operating income | 6,702,598.77 | 2,152,935.65 |
| Less: Non-operating expenditure | 4,906,948.03 | 8,633,722.09 |
| IV. Total profit (total loss expressed with "-") | 821,072,698.05 | 1,043,198,245.70 |
| Less: Income tax expenses | 114,886,459.15 | 145,670,282.34 |
| V. Net profit (net loss expressed with "-") | 706,186,238.90 | 897,527,963.36 |
| (I) Classified by business continuity | ||
| 1. Net profits from continuing operations (net loss expressed with "-") |
706,186,238.90 897,527,963.36
| 2. Net profits from discontinued operations (net loss expressed with "-") |
| (II) Classified by ownership | ||
| 1. Net profit attributable to shareholders of parent company (net loss expressed with "-") |
681,617,022.69 892,823,503.14
| 2. Minority interest income (net loss expressed with "-") | 24,569,216.21 | 4,704,460.22 |
| VI. Net amount of other comprehensive income after tax | 2,650,491.58 | 1,457,765.86 |
| Net amount of other comprehensive income after tax attributed to parent company owners |
1,563,872.28 874,163.62
| (I) Other comprehensive income that can't be reclassified into profit and loss |
| 1. Remeasure the variation of net indebtedness or net asset of defined benefit plan |
| 2. Other comprehensive income that can't be reclassified into profit and loss in the invested enterprise under equity method |
| 3. Fair value change of other equity instrument investments | ||
| 4. Fair value change of enterprise credit risks | ||
| 5. Other | ||
| (II) Other comprehensive income that will be reclassified into profit and loss |
1,563,872.28 874,163.62
| 1. Other comprehensive income that will be reclassified into profit and loss in the invested enterprise under equity method |
| 2. Fair value change of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income |
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Translation reserve | 1,563,872.28 | 874,163.62 |
| 7. Other |
| Item | Semiannual 2023 | Semiannual 2022 |
Net amount of other comprehensive income after tax attributed tominority shareholders
1,086,619.30 583,602.24
| Net amount of other comprehensive income after tax attributed to minority shareholders | ||
| VII. Total comprehensive income | 708,836,730.48 | 898,985,729.22 |
| Total comprehensive income attributed to parent company owners | 683,180,894.97 | 893,697,666.76 |
| Total comprehensive income attributed to minority shareholders | 25,655,835.51 | 5,288,062.46 |
| VIII. Earnings per share | ||
| (I) Basic earnings per share | 1.1599 | 1.52071 |
| (II) Diluted earnings per share | 1.1599 | 1.5207 |
Note: 1 In the current period, the capital reserve is converted into shares, and the earnings per share in the previous period areadjusted synchronously.In case of business combination involving enterprises under common control in current period, the net profits achieved by themerged party before combination were RMB 0.00 and achieved by the merged party in previous period were RMB 0.00.
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
4. Income Statement of Parent Company
| Prepared by: Winner Medical Co., Ltd. | Unit: RMB |
| Item | Semiannual 2023 | Semiannual 2022 |
| I. Operating income | 1,688,984,838.44 | 3,098,525,248.00 |
| Subtract: Operating costs | 1,107,234,465.65 | 1,934,623,204.93 |
| Taxes and surcharges | 6,199,059.31 | 16,034,785.38 |
| Selling expenses | 171,944,157.54 | 180,002,852.70 |
| Administrative expenses | 119,410,984.58 | 207,912,208.98 |
| R&D expenses | 67,280,160.05 | 93,688,666.00 |
| Financial expenses | -54,781,345.93 | -68,427,155.06 |
| Including: interest expenditure | 21,619,496.73 | 5,567,270.21 |
| Interest revenue | 63,513,874.74 | 57,354,975.22 |
| Plus: other incomes | 9,242,864.74 | 8,538,808.91 |
| Income from investment (loss expressed with "-") | 33,524,358.49 | 717,992,220.00 |
| Including: Income from investment of joint venture and cooperative enterprise |
1,580,818.74 2,348,078.76
| Income from derecognition of financial assets measured at amortized cost | ||
| Net exposure hedging gain (loss expressed with "-") | ||
| Income from fair value changes (loss expressed with "-") |
58,989,477.64 31,577,241.02
| Credit impairment losses (loss expressed with "-") | 4,720,507.23 | -6,534,785.58 |
| Assets impairment losses (loss expressed with "-") | -57,802,348.67 | -4,973,851.97 |
| Income from disposal of assets (loss expressed with "-") | 0.00 | |
| II. Operating profit (loss expressed with "-") | 320,372,216.67 | 1,481,290,317.45 |
| Plus: Non-operating income | 2,045,766.35 | 43,721.08 |
| Less: Non-operating expenditure | 167,212.91 | 324,053.04 |
| III. Total profit (total loss expressed with "-") | 322,250,770.11 | 1,481,009,985.49 |
| Less: Income tax expenses | 43,991,014.19 | 117,459,507.27 |
| IV. Net profit (net loss expressed with "-") | 278,259,755.92 | 1,363,550,478.22 |
| (I) Net profits from continuing operations (net loss expressed with "-") |
278,259,755.92 1,363,550,478.22
| (II) Net profits from discontinued operations (net loss expressed with "-") | ||
| V. Net amount of other comprehensive income after tax | ||
| (I) Other comprehensive income that can't be reclassified into profit and loss |
| Item | Semiannual 2023 | Semiannual 2022 |
1. Remeasure the variation of net indebtedness or net asset
of defined benefit plan
| 1. Remeasure the variation of net indebtedness or net asset of defined benefit plan | ||
| 2. Other comprehensive income that can't be reclassified into profit and loss in the invested enterprise under equity method | ||
| 3. Fair value change of other equity instrument investments | ||
| 4. Fair value change of enterprise credit risks | ||
| 5. Other | ||
| (II) Other comprehensive income that will be reclassified into profit and loss | ||
| 1. Other comprehensive income that will be reclassified into profit and loss in the invested enterprise under equity method | ||
| 2. Fair value change of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Provision for credit impairment of other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Translation reserve | ||
| 7. Other | ||
| VI. Total comprehensive income | 278,259,755.92 | 1,363,550,478.22 |
| VII. Earnings per share | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
5. Consolidated Statement of Cash Flow
| Prepared by: Winner Medical Co., Ltd. | Unit: RMB |
| Item | HY 2023 | HY 2022 |
| I. Cash flow from financing activities: | ||
| Cash from selling goods or offering labor | 4,149,289,686.79 | 5,116,730,407.67 |
| Net increase of customer deposit and deposit from other banks | ||
| Net increase of borrowings from central bank | ||
| Net increase of borrowing funds from other financial institutions | ||
| Cash from obtaining original insurance contract premium | ||
| Cash received from insurance premium of original insurance contract |
| Net increase of deposit and investment of insured | ||
| Cash from interest, handling charges and commissions | ||
| Net increase of borrowing funds | ||
| Net increase of repurchase of business funds | ||
| Net cash from acting trading securities | ||
| Refund of tax and levies | 39,145,772.95 | 54,482,126.94 |
| Other cash received related to operating activities | 152,209,281.69 | 56,108,219.58 |
| Subtotal of cash inflow from operating activities | 4,340,644,741.43 | 5,227,320,754.19 |
| Cash paid for selling goods or offering labor | 2,347,177,845.94 | 2,939,776,049.76 |
| Net increase of customer loans and advances | ||
| Net increase of amount due from central bank and interbank | ||
| Cash paid for original insurance contract claims payment | ||
| Net increase of lending funds | ||
| Cash paid for interest, handling charges and commissions | ||
| Cash paid for policy dividend | ||
| Cash paid to and for employees | 945,931,347.90 | 800,031,019.92 |
| Taxes and fees paid | 539,168,797.14 | 319,812,985.54 |
| Other cash paid related to operating activities | 350,188,037.56 | 366,549,799.59 |
| Subtotal of cash outflow from operating activities | 4,182,466,028.54 | 4,426,169,854.81 |
| Net cash flow from operating activities | 158,178,712.89 | 801,150,899.38 |
| Item | HY 2023 | HY 2022 |
| II. Cash flow from investment activities: | ||
| Cash from investment withdrawal | 3,567,682,315.00 | 4,024,661,820.00 |
| Cash from investment income | 74,573,040.85 | 96,593,854.89 |
| Net cash from disposal of fixed assets, intangible assets and other long-term assets |
3,744,427.60 6,741,954.00
| Net cash received from the disposal of subsidiaries and other business entities | ||
| Other cash received related to investment activities | ||
| Subtotal of cash inflow from investment activities | 3,645,999,783.45 | 4,127,997,628.89 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long term assets |
423,829,164.39 513,652,602.31
| Cash paid for investment | 2,820,573,504.00 | 3,577,034,300.00 |
| Net cash received from reinsurance business | ||
| Net cash paid for obtaining subsidiaries and other business units | 21,176,136.32 | 1,003,862,872.29 |
| Other cash paid related to investment activities | ||
| Subtotal of cash outflow from investment activities | 3,265,578,804.71 | 5,094,549,774.60 |
| Net cash flow from investing activities | 380,420,978.74 | -966,552,145.71 |
| III. Cash flow from financing activities: | ||
| Receipts from equity securities | 14,000,000.00 | |
| Including: Cash received from subsidies' absorption of minority shareholders' investment |
| Cash received from borrowings | 1,113,000,000.00 | 1,050,000,000.00 |
| Other cash received related to financing activities | 50,000,000.00 | |
| Subtotal of cash inflow from financial activities | 1,163,000,000.00 | 1,064,000,000.00 |
| Cash repayments of amounts borrowed | 1,453,050,000.00 | 55,000,000.00 |
| Cash paid for distribution of dividends or profits and for interest expenses |
281,994,493.51 396,090,530.15
| Including: Dividends and profits paid by subsidiaries to minority shareholders | ||
| Other cash paid related to financing activities | 106,678,094.74 | 420,175,720.56 |
| Subtotal of cash outflow from financial activities | 1,841,722,588.25 | 871,266,250.71 |
| Net cash flow from financing activities | -678,722,588.25 | 192,733,749.29 |
| IV. Impact of exchange rate movements on cash and cash equivalents | 5,741,177.61 | 27,600,761.92 |
| V. Net increase of cash and cash equivalents | -134,381,719.01 | 54,933,264.88 |
| Plus: Balance of cash and cash equivalents at the beginning of the period |
4,370,821,958.17 4,088,612,262.04
4,236,440,239.16 4,143,545,526.92
Plus: Balance of cash and cash equivalents at the beginning of theperiodLegal representative: Li Jianquan
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
6. Cash Flow Statement of Parent Company
| Prepared by: Winner Medical Co., Ltd. | Unit: RMB |
| Item | HY 2023 | HY 2022 |
| I. Cash flow from financing activities: | ||
| Cash from selling goods or offering labor | 2,009,939,115.28 | 3,258,287,430.41 |
| Refund of tax and levies | 30,090,751.05 | 7,667,891.23 |
| Other cash received related to operating activities | 127,280,729.54 | 364,335,473.72 |
| Subtotal of cash inflow from operating activities | 2,167,310,595.87 | 3,630,290,795.36 |
| Cash paid for selling goods or offering labor | 793,781,802.03 | 2,053,877,022.21 |
| Cash paid to and for employees | 270,071,817.38 | 213,532,606.79 |
| Taxes and fees paid | 188,487,201.67 | 183,161,300.38 |
| Other cash paid related to operating activities | 545,109,264.17 | 645,932,910.29 |
| Subtotal of cash outflow from operating activities | 1,797,450,085.25 | 3,096,503,839.67 |
| Net cash flow from operating activities | 369,860,510.62 | 533,786,955.69 |
| II. Cash flow from investment activities: | ||
| Cash from investment withdrawal | 2,651,995,000.00 | 2,697,990,188.87 |
| Cash from investment income | 66,170,519.75 | 775,721,707.52 |
| Net cash from disposal of fixed assets, intangible assets and other long-term assets |
3,011,395.00 5,431,000.00
| Net cash received from the disposal of subsidiaries and other business entities | ||
| Other cash received related to investment activities | ||
| Subtotal of cash inflow from investment activities | 2,721,176,914.75 | 3,479,142,896.39 |
| Cash paid for the purchase and construction of fixed assets, intangible assets and other long term assets |
68,641,277.60 73,115,880.93
| Cash paid for investment | 2,123,934,344.00 | 3,396,124,300.00 |
| Net cash paid for obtaining subsidiaries and other business units | ||
| Other cash paid related to investment activities | ||
| Subtotal of cash outflow from investment activities | 2,192,575,621.60 | 3,469,240,180.93 |
| Net cash flow from investing activities | 528,601,293.15 | 9,902,715.46 |
| III. Cash flow from financing activities: | ||
| Receipts from equity securities | ||
| Cash received from borrowings | 400,000,000.00 | 100,000,000.00 |
| Other cash received related to financing activities | 50,000,000.00 |
| Item | HY 2023 | HY 2022 |
| Subtotal of cash inflow from financial activities | 450,000,000.00 | 100,000,000.00 |
| Cash repayments of amounts borrowed | 1,280,000,000.00 | |
| Cash paid for distribution of dividends or profits and for interest expenses |
257,603,321.30 394,672,045.23
| Other cash paid related to financing activities | 11,308,615.92 | 300,624,090.59 |
| Subtotal of cash outflow from financial activities | 1,548,911,937.22 | 695,296,135.82 |
| Net cash flow from financing activities | -1,098,911,937.22 | -595,296,135.82 |
| IV. Impact of exchange rate movements on cash and cash equivalents | 3,014,936.71 | 18,970,584.36 |
| V. Net increase of cash and cash equivalents | -197,435,196.74 | -32,635,880.31 |
| Plus: Balance of cash and cash equivalents at the beginning of the period |
3,540,343,438.87 3,430,110,781.71
| Plus: Balance of cash and cash equivalents at the beginning of the period | 3,342,908,242.13 | 3,397,474,901.40 |
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
7. Consolidated Statement on Changes in Owners' Equity
| Prepared by: Winner Medical Co., Ltd. | Current amount | Unit: RMB |
Item
| Semiannual 2023 | |
| Owners' equities attributable to the owners of parent company | |
MinorityequityTotal owners'equitiesCapitalstock
Capitalreserve
| Other equity instruments | Less: | |
treasury
| stock | Other |
comprehensive
SpecialreserveSurplusreserve
| income | General |
risk
UndistributedprofitOthers Subtotal
provisionPreferredstock
| Preferred stock | Perpetual bond |
Others
| I. Ending balance of the previous year | 426,492,308.00 |
| 4,546,247,611.24 | 500,082,734.11 |
782,778.15
| 420,212,778.13 | 6,810,953,829.30 |
| 11,704,606,570.71 | 478,161,435.74 | 12,182,768,006.45 | ||
| Plus: Changes in accounting policies |
15,161,518.35
15,161,518.35
| 15,161,518.35 | ||
| Prior period error correction |
combination under
| common control |
| Others | |||||||||||||||
| II. Beginning balance in current year | 426,492,308.00 |
| 4,546,247,611.24 | 500,082,734.11 |
782,778.15
| 420,212,778.13 | 6,826,115,347.65 |
| 11,719,768,089.06 | 478,161,435.74 | 12,197,929,524.80 | ||
| III. Increase/decrease in the current period |
(decrease expressed
167,895,05
9.00
-166,925,6
86.35
1,563,872.28
-115,884,510.4
-113,351,2
65.49
39,720,35
5.84
-73,630,909.65
| with the "-") |
| (I) Total comprehensive income |
1,563,872.28
| 681,617,022.68 | 683,180,894.96 | 25,655,835.51 | 708,836,730.47 | |||
| (II) Owner’s invested and decreased capital |
| 969,372.65 | 969,372.65 |
0.00 969,372.65
0.00 0.00 0.00
| 1. Common stock invested by the owner |
| 2. Capital invested by other equity instrument holders |
0.00 0.00 0.00
based payment included
| in the owner's equity |
969,372.6
969,372.6
0.00 969,372.65
| 4. Other | 0.00 |
(III) Profit distribution
797,501,533.1
| 0 |
797,501,5
| 33.10 |
0.00
797,501,533.1
| 0 | ||
| 1. Withdrawal of surplus reserves |
0.00
0.00
| 2. Withdrawal of general risk preparation |
| 3. Distribution to owners (or shareholders) |
797,501,533.1
| 0 |
797,501,5
| 33.10 |
0.00
797,501,533.1
| 0 | |||||||||||||||
| 4. Other | 0.00 | ||||||||||||||
| (IV) Internal transfer of |
owner’s equity
167,895,05
9.00
167,895,0
| 59.00 |
0.00
transfer to paid-in
| capital (or capital stock) |
167,895,05
9.00
167,895,0
| 59.00 |
0.00
transfer to paid-in
| capital (or capital stock) |
0.00
0.00
| 3. Earned surplus covering the deficit |
| 4. Carryforward retained earnings in variation of defined benefit plan |
0.00
0.00
| 5. Carryforward retained earnings of other comprehensive income | |||||||||||||||
| 6. Other | 0.00 | ||||||||||||||
| (V) Special reserve | 0.00 | ||||||||||||||
| 1. Draw in current period |
0.00
| 2. Use in current period | 0.00 |
(VI) Others 0.00
14,064,520.33
| 14,064,520.33 | |||
| IV. Balance at the end of current period | 594,387,367.00 |
| 4,379,321,924.89 | 500,082,734.11 |
2,346,650.43
| 420,212,778.13 | 6,710,230,837.23 |
| 11,606,416,823.57 | 517,881,791.58 | 12,124,298,615.15 |
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
7. Consolidated Statement on Changes in Owners' Equity (continued)
| Prepared by: Winner Medical Co., Ltd. | Prior year amount | Unit: RMB |
Item
| Semiannual 2022 | |
| Owners' equities attributable to the owners of parent company | |
Minorityequity
Total owners'equitiesCapitalstock
Capitalreserve
| Other equity instruments | Less: | |
treasury
| stock | Other |
comprehensive
SpecialreserveSurplusreserve
| income | General |
risk
Undistributed
profitOthers Subtotal
provisionPreferred stock
| Preferred stock | Perpetual bond |
Others
| I. Ending balance of the previous year | 426,492,308.00 |
| 4,549,621,096.81 | 257,992,366.68 |
-1,556,935.43
| 420,212,778.13 | 5,538,135,285.97 |
| 10,674,912,166.80 | 12,196,045.94 | 10,687,108,212.74 | ||
| Plus: Changes in accounting policies |
| Prior period error correction |
| Business |
combination
| under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Beginning balance in current year | 426,492,308.00 |
| 4,549,621,096.81 | 257,992,366.68 |
-1,556,935.43
| 420,212,778.13 | 5,538,135,285.97 |
| 10,674,912,166.80 | 12,196,045.94 | 10,687,108,212.74 | ||
| III. Increase/decrease |
in the
42,396,2
49.94
242,090,367.43
874,163.62
515,059,619.0
316,239,6
65.17
281,115,269
.96
597,354,935.1
| current period (less to be filled out with the minus sign "-) |
| (I) Total comprehensive income |
874,163.62
| 892,823,503.14 | 893,697,666.76 | 5,288,062.46 | 898,985,729.22 | |||
| (II) Owner’s invested and decreased capital |
| 42,396,249.94 | 42,396,249.94 | 275,827,207.50 | 318,223,457.44 | |||
| 1. Common stock invested by the owner |
other equity instrument
| holders |
included in the owner's
| equity |
42,396,2
49.94
42,396,24
9.94
42,396,249.94
4. Other
| 275,827,207.50 | 275,827,207.50 |
(III) Profit distribution
377,763,884.1
| 0 |
377,763,8
| 84.10 |
377,763,884.1
| 0 | ||
| 1. Withdrawal of surplus reserves |
| 2. Withdrawal of general risk preparation |
| 3. Distribution to owners (or shareholders) |
377,763,884.1
| 0 |
377,763,8
| 84.10 |
377,763,884.1
| 0 | |||||||||||||||
| 4. Other | |||||||||||||||
| (IV) Internal transfer of owner’s equity |
transfer to paid-in
| capital (or capital stock) |
transfer to paid-in
| capital (or capital stock) |
| 3. Earned surplus covering the deficit |
| 4. Carryforward retained earnings in variation of defined benefit plan |
| 5. Carryforward retained earnings of other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Draw in current period |
| 2. Use in this current |
(VI) Others
242,090,367.43
242,090,3
| 67.43 |
242,090,367.4
| 3 | |||
| IV. Balance at the end of current period | 426,492,308.00 |
| 4,592,017,346.75 | 500,082,734.11 |
-682,771.81
| 420,212,778.13 | 6,053,194,905.01 |
| 10,991,151,831.97 | 293,311,315.90 | 11,284,463,147.87 |
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
8. Statement on Changes in Owners' Equity of Parent Company
| Prepared by: Winner Medical Co., Ltd. | Current amount | Unit: RMB |
Item
Capital stock
| Semiannual 2023 | ||
| Other equity instruments | ||
Capital reserve
Treasury
| stock | Other |
comprehensive
SpecialreserveSurplus reserve
Undistributedprofit
OthersTotal owners'equities
incomePreferredstock
| Preferred stock | Perpetual bond |
Others
426,492,308.00 4,571,654,373.59
| I. Ending balance of the previous year | 500,082,734.11 |
411,397,111.21 4,868,449,855.81 9,777,910,914.50
| Plus: Changes in accounting policies |
| Prior period error correction |
| Others | ||||||||||||
| II. Beginning balance in current year |
426,492,308.00 4,571,654,373.59
411,397,111.21 4,868,449,855.81 9,777,910,914.50
| 500,082,734.11 | ||
| III. Increase/decrease in the current period (decrease expressed with "-") |
167,895,059.00 -166,925,686.35 -519,241,777.18 -518,272,404.53
278,259,755.92 278,259,755.92
| (I) Total comprehensive income |
| (II) Owner’s invested and decreased capital |
969,372.65 969,372.65
| 1. Common stock invested by the owner |
| 2. Capital invested by other equity instrument holders |
969,372.65 969,372.65
| 3. Amount of share-based payment included in the owner's equity | ||||||||||||
| 4. Other | ||||||||||||
| (III) Profit distribution | -797,501,533.10 | -797,501,533.10 | ||||||||||
| 1. Withdrawal of surplus reserves |
-797,501,533.10 -797,501,533.10
| 2. Distribution to owners (or shareholders) | ||||||||||||
| 3. Other | ||||||||||||
| (IV) Internal transfer of owner’s equity |
167,895,059.00 -167,895,059.00
to paid-in capital (or capital
| stock) |
167,895,059.00 -167,895,059.00
paid-
| in capital (or capital stock) |
| 3. Earned surplus covering the deficit |
| 4. Carryforward retained |
earnings in variation of
| defined benefit plan |
| 5. Carryforward retained earnings of other comprehensive income |
| 6. Other | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Draw in current period | ||||||||||||
| 2. Use in current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Balance at the end of current period |
594,387,367.00 4,404,728,687.24
411,397,111.21 4,349,208,078.63 9,259,638,509.97
500,082,7
34.11
Legal representative: Li Jianquan
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
8. Statement on Changes in Owners' Equity of Parent Company (continued)
| Prepared by: Winner Medical Co., Ltd. | Last term amount | Unit: RMB |
Item
Capital stock
| Semiannual 2022 | ||
| Other equity instruments | ||
Capital reserve
Less: treasurystock
comprehensive
| income |
SpecialreserveSurplusreserve
Undistributedprofit
OthersTotal owners'equities
| Preferred stock | Perpetual bond |
Others
426,492,308.00 4,575,027,859.16 257,992,366.68
| I. Ending balance of the previous year | 411,397,111.21 |
3,391,392,215.70 8,546,317,127.39
| Plus: Changes in accounting policies |
| Prior period error correction |
| Others | ||||||||||||
| II. Beginning balance in current year |
426,492,308.00 4,575,027,859.16 257,992,366.68
3,391,392,215.70 8,546,317,127.39
| 411,397,111.21 | ||
| III. Increase/decrease in the |
current period (less to be filled
42,396,249.94 242,090,367.43 985,786,594.12 786,092,476.63
| out with the minus sign "-) |
| (I) Total comprehensive income |
1,363,550,478.22 1,363,550,478.22
42,396,249.94 42,396,249.94
| (II) Owner’s invested and decreased capital |
| 1. Common stock invested by the owner |
| 2. Capital invested by other equity instrument holders |
| 3. Amount of share-based payment included in the owner's equity |
42,396,249.94 42,396,249.94
| 4. Other | ||||||||||||
| (III) Profit distribution | -377,763,884.10 | -377,763,884.10 | ||||||||||
| 1. Withdrawal of surplus reserves |
-377,763,884.10 -377,763,884.10
| 2. Distribution to owners (or shareholders) | ||||||||||||
| 3. Other | ||||||||||||
| (IV) Internal transfer of owner’s equity |
paid-
| in capital (or capital stock) |
paid-
| in capital (or capital stock) |
| 3. Earned surplus covering the deficit |
| 4. Carryforward retained |
earnings in variation of defined
| benefit plan |
| 5. Carryforward retained earnings of other comprehensive income |
| 6. Other | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Draw in current period | ||||||||||||
| 2. Use in current period | ||||||||||||
| (VI) Others | 242,090,367.43 | -242,090,367.43 | ||||||||||
| IV. Balance at the end of current period |
426,492,308.00 4,617,424,109.10 500,082,734.11
4,377,178,809.82 9,332,409,604.02
411,397,1
11.21
Legal representative: Li Jianquan
| Legal representative: Li Jianquan | Head of accounting work: Fang Xiuyuan | Head of accounting institution: Wu Kezhen |
III. Basic Information of the CompanyWinner Medical Co., Ltd. (hereinafter referred to as the “Company” or “our Company”), formerly known as Winner Industry(Shenzhen) Co., Ltd. (hereinafter referred to as “Winner Industry”), is a wholly foreign-owned enterprise established onAugust 24, 2000 with the approval of Shenzhen Municipal Administration for Industry and Commerce. The original businesslicense number of the Company is: Q.D.Y.S.Z.Zi No. 307199. The original registered capital is HKD 30 million, and the totalinvestment is HKD 60 million. The Company is wholly owned by Winner International Trading Corporation. The registeredcapital was invested in three installments. On April 2, 2001, the registered capital of HKD 18,023,154.30 was invested inmonetary funds, which was verified by the capital verification report (Z.T.Z.T. No.Y2001-1133) of Zhuhai ZhongtuoZhengtai Accounting Firm. The business scope of the original company is: the production and operation of sanitary materials,dressings and their products, medical clothing, textiles, non-woven products and moulded packaging (excluding the productssubject to national export license management).On May 18, 2001, the board of directors of the Company decided to increase the registered capital from HKD 30.00 millionto HKD 60.00 million, and the total investment from HKD 60.00 million to HKD 120.00 million, which was paid in threeinstallments since the date of registration of the Company. On June 5, 2001, the Company obtained the changed businesslicense of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and Commerce and amended theArticles of Association accordingly.As of December 21, 2001, it has received the second installment of the registered capital paid by Winner InternationalTrading Corporation. Winner International Trading Corporation contributed HKD 31,445,194.91 in monetary funds, and thisinvestment was verified by Shenzhen Zhongpeng Certified Public Accountants, Ltd. (S.P.K.Y. Zi [2002] No.037 capitalverification report). As of February 21, 2002, it has received the third installment of the registered capital totaling HKD6,005,722.20 paid by Winner International Trading Corporation, including HKD 3,665,722.20 in currency and HKD2,340,000.00 in kind. This investment was verified by Shenzhen Lishang Certified Public Accountants Co., Ltd . (S.L.S.Y. Zi[2002] No.039 capital verification report)On October 8, 2002, the board of directors of the Company decided to increase the Company's registered capital from HKD
60.00 million to HKD 70.00 million, and the total investment from HKD 120.00 million to HKD 134.00 million. On
December 10, 2002, the Company obtained the changed business license of the enterprise legal person issued by ShenzhenMunicipal Bureau for Industry and Commerce and amended the Articles of Association accordingly. As of May 27, 2003, ithas received the fourth installment of the registered capital totaling HKD 14,525,928.59 paid by (Hong Kong) WinnerInternational Trading Corporation. This capital increase was verified by Shenzhen Yuehua Certified Public Accountants Co.,Ltd. (S.Y.H.Y. Zi [2003] No.339 capital verification report).On May 25, 2003, with the approval of the board of directors of the Company, the shareholder Winner International TradingCorporation signed the Equity Transfer Agreement with Winner Group Limited, under which Winner International TradingCorporation transferred 100% of its equity to Winner Group Limited. On July 28, 2003, the Company obtained the changedbusiness license of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and Commerce andamended the Articles of Association accordingly.On June 8, 2006, the board of directors of the Company decided to increase the Company's registered capital from HKD
70.00 million to HKD 126.00 million, and the total investment from HKD 134.00 million to HKD 270.00 million. The newly
increased registered capital of HKD 56.00 million was transferred from the undistributed profits after tax of the Company,and such newly increased registered capital was invested within half a year after registration of the change. On June 30, 2006,the Company obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau forIndustry and Commerce and amended the Articles of Association accordingly.As of August 30, 2006, the Company transferred undistributed profits HKD 49,423,804.00 to paid-in capital, and the paid-incapital after the change was HKD 119,423,804.00. This capital increase was verified by the Shenzhen Branch of BeijingZhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi [2007] No.043 capital verification report).On December 2, 2006, the board of directors of the Company decided to change the original investment period of theshareholders from June 30, 2006 to December 31, 2006 into June 30, 2006 to June 30, 2007. On December 6, 2006, theCompany was approved by General Administration for Industry and Commerce of Shenzhen to change its corporate typefrom a wholly foreign-owned enterprise into a limited liability company (wholly owned by foreign legal person) and changeits business term.
As of March 15, 2007, the Company transferred undistributed profits of HKD 6,576,196.00 to paid-in capital, and thecumulative paid-in capital after the change was HKD 126.00 million. This capital increase was verified by ShenzhenHengping Certified Public Accountants Co., Ltd. (S.H.P.W.Y. Zi [2007] No.0004 capital verification report). On August 13,2007, the Company obtained the changed business license of the enterprise legal person issued by Shenzhen MunicipalBureau for Industry and Commerce and amended the Articles of Association accordingly. The registration number waschanged from Q.D.Y.S.Z. Zi No. 307199 to 440306503230896.On June 8, 2009, the board of directors of the Company decided to add sterilization technology services to the business scope.On June 30, 2009, the Company obtained the changed business license of the enterprise legal person issued by ShenzhenMunicipal Bureau for Industry and Commerce and amended the Articles of Association accordingly.On April 1, 2010, the board of directors of the Company decided to increase the Company's registered capital from HKD
126.00 million to HKD 192.00 million, and the total investment from HKD 270.00 million to HKD 380.00 million. The
increased amount of the registered capital was contributed by the original shareholders in cash in foreign currency.As of June 18, 2010, it has received the registered capital totaling USD 8,473,500.00 (equivalent to HKD 66,000,653.75)paid by Winner Group Limited. This capital increase was verified by Shenzhen Hengping Certified Public Accountants LLP(S.H.P.S. (W.) Y. Zi [2010] No.13 capital verification report). On July 2, 2010, the Company obtained the changed businesslicense of the enterprise legal person issued by Shenzhen Administration for Market Regulation (since September 9, 2009,Shenzhen Municipal Bureau for Industry and Commerce has been integrated into Shenzhen Administration for MarketRegulation) and amended the Articles of Association accordingly.On April 27, 2011, with the approval of General Administration for Industry and Commerce of Shenzhen, the Companychanged its residence address from No. 1 Wenjian Avenue, Bulong Road, Longhua Street, Baoan District, Shenzhen toWinner Industrial Park beside Bulong Road, Longhua Street, Bao'an District, Shenzhen.On February 20, 2013, the board of directors of the Company decided and agreed to increase the Company's registeredcapital by HKD 4,271,300. The registered capital after the change was HKD 19,6271,300, and the total investment was stillHKD 380.00 million.The shareholder, Winner Group Limited made capital contribution with its equity in the six enterprises. The equitycontribution is as follows:
Name of invested entity
Proportion(%)
equitycontributionnet assets
(RMB
| 10,000) |
Amount of
equitycontribution(RMB10,000)
Amountincluded incapital surplus(RMB 10,000)
Amount of equity
contribution(Convert to HKD
10,000)(a) (b) (c)= (a)- (b)
| (d) = (b)*conversion exchange rate | ||
| Winner Medical (Chongyang) Co., Ltd. (formerly known as "Chongyang Winner Medical Textile Co., Ltd.") |
100.00 3,232.93 32.33 3,200.60 39.94
100.00 3,520.95 35.21 3,485.74 43.50
| Winner Medical (Jiayu) Co., Ltd. (formerly known as "Jiayu Winner Medical Textile Co., Ltd.") |
| Winner Medical (Jingmen) Co., Ltd. |
(formerly
100.00 2,527.24 25.27 2,501.97 31.22
| known as "Jingmen Winner Medical Textile Co., Ltd.") |
| Yichang Winner Medical Textile Co., Ltd. |
100.00 1,800.69 18.01 1,782.68 22.25
| Winner Medical (Huanggang) Co., Ltd. | 75.00 | 19,729.30 | 197.29 | 19,532.01 | 243.76 |
| Winner Medical (Tianmen) Co., Ltd. (formerly known as "Hubei Winner Textile Co., Ltd.") |
100.00 3,760.89 37.61 3,723.28 46.46
| Total | 34,572.00 | 345.72 | 34,226.28 | 427.13 |
After the capital increase, the original shareholders still have 100% of the Company's equity, and the above six companiesbecome the Company's subsidiaries. On July 25, 2013, the Company obtained the changed business license of the enterpriselegal person issued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Associationaccordingly. This capital increase was verified by the Shenzhen Branch of Zhonglian Certified Public Accountants Co., Ltd.(Z.L.S.S.Y. Zi [2013] No.102 capital verification report).On September 2, 2013, the board of directors of the Company decided to increase the Company's registered capital by HKD18,068,200. The registered capital after the change was HKD 214,339,500, and the total investment was still HKD380,000,000. The new investment was subscribed by Shenzhen Kangsheng Investment Partnership (L.P.) (renamed asShenzhen Leyuan Investment Partnership (L.P.), hereinafter referred to as the "Leyuan Investment"), Shenzhen KangxinInvestment Partnership (L.P.) (renamed as Xiamen Yutong Investment Partnership (L.P.), hereinafter referred to as the"Yutong Investment"), Shenzhen Kanglong Investment Partnership (L.P.) (renamed as Xiamen Huikang InvestmentPartnership (L.P.), hereinafter referred to as the "Huikang Investment") with HKD 10,322,400, HKD 4,414,500 and HKD3,331,300 respectively. After the completion of the capital increase, the Company's ownership structure was changed asfollows:
Investor
Proportion (%)
| Capital contribution amount (HKD 10,000) | ||
| Winner Group Limited | 19,627.13 | 91.5703 |
| Leyuan Investment | 1,032.24 | 4.8159 |
| Yutong Investment | 441.45 | 2.0596 |
| Huikang Investment | 333.13 | 1.5542 |
| Total | 21,433.95 | 100.0000 |
On October 17, 2013, the Company obtained the changed business license of the enterprise legal person issued by ShenzhenAdministration for Market Regulation and amended the Articles of Association accordingly. This capital increase wasverified by Shenzhen Hengping Certified Public Accountants LLP (S.H.P.S.Y. Zi [2013] No.035 capital verification report).On October 26, 2013, the board of directors of the Company decided to change its residence from Winner Industrial Parkbeside Bulong Road, Longhua Street, Baoan District, Shenzhen to Winner Industrial Park, No. 660 Bulong Road, LonghuaNew District, Shenzhen. On November 4, 2013, the Company completed the industrial and commercial registration ofchanges, obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau forIndustry and Commerce and amended the Articles of Association accordingly.On July 1, 2014, the board of directors of the Company decided and agreed to increase the Company's registered capital byHKD 3646,600. The registered capital after the change was HKD 21,7986,100, and the total investment was still HKD
380.00 million. The capital increase was made by the original shareholder, Leyuan Investment, which subscribed HKD
3,646,600 with RMB 13,585,000, and the increased registered capital was paid in two installments. After the completion ofthe capital increase, the Company's ownership structure was changed as follows:
Investor
Proportion (%)
| Capital contribution amount (HKD 10,000) | ||
| Winner Group Limited | 19,627.13 | 90.0385 |
| Leyuan Investment | 1,396.90 | 6.4082 |
| Yutong Investment | 441.45 | 2.0251 |
| Huikang Investment | 333.13 | 1.5282 |
| Total | 21,798.61 | 100.0000 |
On July 24, 2014, the Company obtained the changed business license of the enterprise legal person issued by ShenzhenAdministration for Market Regulation and amended the Articles of Association accordingly. This capital increase wasverified by Shenzhen Hengping Certified Public Accountants LLP (S.H.P.S.Y. Zi [2014] No.030 and S.H.P.S.Y. Zi [2015]No.003 capital verification reports).
On July 28, 2014, the Board of Directors of the Company decided to agree that the shareholder of the Company, WinnerGroup Limited, would transfer its 2.9503% equity of the Company to Yutong Investment, Huikang Investment, and thenewly introduced shareholder, Shenzhen Kangli Investment Partnership (Limited Partnership) (renamed as Xiamen ZepengInvestment Partnership (Limited Partnership) during the reporting period, hereinafter referred to as "Zepeng Investment").After the completion of the equity transfer, the Company's ownership structure was changed as follows:
Investor
Proportion (%)
| Capital contribution amount (HKD 10,000) | ||
| Winner Group Limited | 18,984.01 | 87.0882 |
| Leyuan Investment | 1,396.90 | 6.4082 |
| Yutong Investment | 740.83 | 3.3985 |
| Huikang Investment | 447.37 | 2.0523 |
| Zepeng Investment | 229.50 | 1.0528 |
| Total | 21,798.61 | 100.0000 |
On August 29, 2014, the Company obtained the changed business license of the enterprise legal person issued by ShenzhenAdministration for Market Regulation and amended the Articles of Association accordingly.On September 28, 2014, the board of directors of the Company decided and agreed to increase the Company's registeredcapital by HKD 22,550,300. The registered capital after the change was HKD 240,536,400, and the total investment was stillHKD 380.00 million. The new registered capital was subscribed by Beijing Sequoia Xinyuan Equity Investment Center(Limited Partnership) (hereinafter referred to as "Sequoia Xinyuan") with RMB 300.00 million. After the completion of thecapital increase, the Company's ownership structure was changed as follows:
Investor
Proportion (%)
| Capital contribution amount (HKD 10,000) | ||
| Winner Group Limited | 18,984.01 | 78.9236 |
| Leyuan Investment | 1,396.90 | 5.8074 |
| Yutong Investment | 740.83 | 3.0800 |
| Huikang Investment | 447.37 | 1.8599 |
| Zepeng Investment | 229.50 | 0.9541 |
| Sequoia Xinyuan | 2,255.03 | 9.3750 |
| Total | 24,053.64 | 100.0000 |
As of October 31, 2014, it has received RMB 300.00 million from Sequoia Xinyuan in monetary funds. On November 6,2014, the Company obtained the changed business license of the enterprise legal person issued by Shenzhen Administrationfor Market Regulation and amended the Articles of Association accordingly. This capital increase was verified by theShenzhen Branch of Zhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi [2014] No.087 capital verificationreport).On April 30, 2015, through the resolution of the board of directors of the Company, with February 28, 2015 as the base date,Winner Industry was wholly changed into a limited liability Company, with a registered capital of RMB 368 million. Inaccordance with the provisions of the Sponsorship Agreement and Articles of Association, the shareholders converted theiraudited net assets as of February 28, 2015 of RMB 1,058,194,956.32 into 368 million shares at a ratio of 1:0.3478, par valueof each share was RMB 1, and the total share capital was RMB 368 million and held separately by the original shareholdersin accordance with their original proportions; the remaining RMB 690,194,956.32 was included in the capital surplus (due tothe change of calculation policy of Company's receivables bad debt provision during the reporting period, the audited netassets of the Company as of the base date of share reform were adjusted to RMB 1,050,812,354.45, and the correspondingshare conversion ratio was adjusted to 1: 0.3502). On June 4, 2015, with the approval of Economy, Trade and InformationCommission of Shenzhen Municipality, Winner Industry was wholly changed into a limited liability company, renamed as"Winner Medical Co., Ltd.", and obtained the business license of enterprise legal person with the registration number of440306503230896.
On May 28, 2018, after being voted through and approved by the extraordinary general meeting of shareholders, theCompany agreed to increase the registered capital by RMB 8,492,308, with the registered capital after the change of RMB376,492,308. The new registered capital was subscribed by Shenzhen Capital Group Co., Ltd. (hereinafter referred to as"SCGC") with RMB 300.00 million. After the completion of the capital increase, the Company's ownership structure waschanged as follows:
Investor
Proportion (%)
| Amount of contribution (RMB 10,000) | ||
| Winner Group Limited | 29,043.8848 | 77.1434 |
| Leyuan Investment | 2,137.1232 | 5.6764 |
| Yutong Investment | 1,133.4400 | 3.0105 |
| Huikang Investment | 684.4432 | 1.8179 |
| Zepeng Investment | 351.1088 | 0.9326 |
| Sequoia Xinyuan | 3,450.0000 | 9.1635 |
| SCGC | 849.2308 | 2.2556 |
| Total | 37,649.2308 | 100.0000 |
As of June 13, 2018, it has received RMB 300.00 million from SCGC in monetary funds. On June 15, 2018, ShenzhenAdministration for Market Regulation issued the Notice of Change (Filing) (No.: 21801665051) on this change and approvedthe capital increase. The Company amended the Articles of Association in respect of the above matters. The Companyamended the Articles of Association in respect of the above matters. This capital increase was verified by BDO China ShuLun Pan Certified Public Accountants LLP (X.K.S.B.Zi [2018] No.ZI10525 capital verification report).On February 28, 2018, the Company obtained the renewed business license of the enterprise legal person issued by ShenzhenAdministration for Market Regulation with the unified social credit code 91440300723009295R.On August, 18, 2020, after the reply of China Securities Regulatory Commission on Approval of the Registration of theInitial Public Offering of Winner Medical Co., Ltd. (Z.J.X.K. [2020] No.1822), the Company issued RMB 50 million ofcommon shares to the public, which was listed on the Shenzhen Stock Exchange on September 17, 2020. Upon completion ofthe issuance, the registered capital of the Company was RMB 426,492,308.On July 18, 2023, the Company had a registered capital of RMB 594,387,367 due to the implementation of profit distributionand capital reserve conversion for the year 2022.Business term: sustainable operation.Business scope: General business scope: production of special labor protection articles; sales of special labor protectionarticles; production of labor protection articles; sales of labor protection articles; clothing manufacturing; clothing andapparel wholesale; clothing and apparel retail; sales of sanitary supplies and disposable medical supplies; sales of personalhygiene products; shoes manufacturing; wholesale of shoes and hats; retail of shoes and hats; sales of shoemaking raw andauxiliary materials; manufacturing of maternal and infant supplies; sales of maternal and infant supplies; sales of Class Imedical devices; retail of Class II medical devices; lease of non residential real estate; engagement in investment activitieswith self-owned funds (the above items do not involve special management measures for foreign investment access); sales ofsanitary pesticides. (Except for the items subject to approval according to law, operating activities shall be independentlycarried out with business license according to law). Licensed business scope: production and operation of medical biologicalmaterials, dressings and products, medical clothing, protective articles, textiles, non-woven products and molded packaging(the above products do not include the goods subject to national export license administration) and related products,disposable consumables and molded packaging; wholesale, import and export, retail (including online sales) of cottonhousehold articles, cotton spunlaced non-woven fabric and its products, cotton, disinfection products, daily necessities,cosmetics, protective articles, health care products and instruments and meters, and other related ancillary businesses (if itdoes not involve goods subject to state trading, or involves goods subject to quotas, license management and other specialprovisions, it shall be subject to the application in accordance with relevant regulations of the state); research anddevelopment, production and sales of smart home appliances; development of new materials; provision of the technicalconsulting, technical services and after-sales services for above-mentioned products; sterilization technical services (ifrelevant qualifications are required for operation, it shall be subject to the application in accordance with relevant regulations);Enterprise management consulting, business information consulting, economic information consulting, logistics supply chainmanagement and warehouse services (excluding hazardous chemicals, precursor chemicals, refined oil and other dangerousgoods), self-owned property leasing (only operation with the legal property ownership certificate under the Company's nameis approved); production of Class I medical devices; production of Class II medical devices; sales of Class II medical devices;production of Class III medical devices; operation of Class III medical devices. (The above items do not involve specialmanagement measures for foreign investment access) (Items subject to approval according to the law can only be carried outafter getting the approval of relevant departments. Specific operating projects are subject to the approval documents orpermits of relevant departments.)
Domicile of the Company: F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, MinzhiSubdistrict, Longhua District, Shenzhen City; Winner Industrial Park, No.660 Bulong Road, Longhua New District,Shenzhen.The financial statements were approved by the Board of Directors of the Company on August 15, 2023.As of June 30, 2023, the subsidiaries in the consolidated financial statements of the Company are as follows:
| Subsidiary name |
| Winner Medical (Jingmen) Co., Ltd. (hereinafter referred to as "Winner Medical (Jingmen)") |
| Yichang Winner Medical Textile Co., Ltd. (hereinafter referred to as "Winner Medical (Yichang)") |
| Winner Medical (Tianmen) Co., Ltd. (hereinafter referred to as "Winner Medical (Tianmen)") |
| Winner Medical (Chongyang) Co., Ltd. (hereinafter referred to as "Winner Medical (Chongyang)") |
| Winner Medical (Jiayu) Co., Ltd. (hereinafter referred to as "Winner Medical (Jiayu)") |
| Winner Medical (Hong Kong) Ltd. (hereinafter referred to as "Winner Medical (Hong Kong)") |
| Winner (Huanggang) Cotton Processing & Trading Co., Ltd. (hereinafter referred to as "Winner (Huanggang) Cotton") |
| Winner Medical (Huanggang) Co., Ltd. (hereinafter referred to as "Winner Medical (Huanggang)") |
| Shenzhen Purcotton Technology Co., Ltd. (hereinafter referred to as "Shenzhen Purcotton") |
| Guangzhou Purcotton Medical Technology Co., Ltd. (hereinafter referred to as "Guangzhou Purcotton") |
| Beijing Purcotton Technology Co., Ltd. (hereinafter referred to as "Beijing Purcotton") |
| Shanghai Purcotton Technology Co., Ltd. (hereinafter referred to as "Shanghai Purcotton") |
| Shenzhen Qianhai Purcotton E-Commerce Co., Ltd. (hereinafter referred to as "Qianhai Purcotton") |
| Winner Medical Malaysia Sdn. Bhd. (hereinafter referred to as "Winner Medical Malaysia") |
| Winner Medical (Heyuan) Co., Ltd. (hereinafter referred to as "Winner Medical (Heyuan)") |
| Winner Medical (Wuhan) Co., Ltd. (hereinafter referred to as "Winner Medical (Wuhan)") (former name: Hubei Winner Medical Co., Ltd.) |
| Shenzhen PureH2B Technology Co., Ltd. (hereinafter referred to as "PureH2B") |
| Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd. (hereinafter referred to as "Purunderwear") |
| Huanggang Purcotton Ltd. (hereinafter referred to as "Huanggang Purcotton") |
| Winner Medical Technology (Foshan) Co., Ltd. (hereinafter referred to as "Winner Medical (Foshan)") |
| Zhejiang Longterm Medical Technology Co., Ltd. (hereinafter referred to as "Zhejiang Longterm") |
| Xi'an Longtemu Medical Technology Co., Ltd. (hereinafter referred to as "Xi'an Longtemu") |
| Hangzhou Shengyi Technology Co., Ltd. (hereinafter referred to as "Hangzhou Shengyi") |
| Subsidiary name |
| Deqing Longterm Medical Silica Gel Products Co., Ltd. (hereinafter referred to as "Deqing Longterm") |
| Longterm Medical US LLC (hereinafter referred to as "American Longterm") |
| Winner (Guilin) Latex Products Co., Ltd. (hereinafter referred to as "Winner (Guilin)") |
| Winner Pingan Medical (Hunan) Co., Ltd. (hereinafter referred to as "Winner Pingan") |
| Hunan Ruian Medical Device Technology Co., Ltd. (hereinafter referred to as "Ruian Medical Device") |
| Shenzhen Junjian Medical Device Co., Ltd. (hereinafter referred to as "Junjian Medical") |
| Nature Health Development (Hong Kong) Co., Ltd. (hereinafter referred to as "Nature Health (Hong Kong)") |
| LONGTERM MEDICAL,S.DE.R.L.DE C.V (hereinafter referred to as "Mexico Longterm") |
| Shanghai Hongsong Medical Device Co., Ltd. (hereinafter referred to as "Shanghai Hongsong") |
In this period, a new subsidiary Nature Health (Hong Kong) was established, a new subsidiary Mexico Longterm wasestablished by Longterm Medical, and Shanghai Hongsong was newly established through a business combination not underthe same control. The scope of the consolidated financial statements for this reporting period and its changes are detailed inthe notes "VIII. Consolidation scope changes" and "IX. Interests in other entities".IV. Preparation Basis of Financial Statements
1. Preparation basis
This financial statement is prepared in accordance with the Accounting Standard for Business Enterprises -- Basic Standardissued by the Ministry of Finance, various special accounting standards, guideline for application of accounting standard forbusiness enterprises, ASBE interpretations and other relevant regulations (hereinafter collectively referred to as "AccountingStandard for Business Enterprises") and No.15 of Compilation Rules for Information Disclosure by Companies OfferingSecurities to the Public - General Provisions of Financial Reports issued by China Securities Regulatory Commission.
2. Continual operation
There are no events affecting the Company's going-concern ability and it is expected that the Company will be able to operateas a going concern within the next 12 months. The Company's financial statements are prepared on the basis of theassumption of going concern.
V. Significant Accounting Policies and Accounting Estimates
Specific accounting policy and accounting estimate:
The following significant accounting policy and accounting estimate of the Company are formulated in accordance with theAccounting Standards for Business Enterprises. The business not mentioned is implemented in accordance with the relevantaccounting policies in the Accounting Standards for Business Enterprises.
1. Statement of compliance with accounting standards for business enterprises
These financial statements comply with the requirements of the Accounting Standards for Business Enterprises issued by theMinistry of Finance, and truly and completely reflect the consolidated and parent company financial position of the Companyon June 30, 2023 and the business performance and cash flows of the consolidated and parent company in HY 2023.
2. Accounting period
The fiscal year of the Company runs from January 1 to December 31 of each calendar year.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Reporting currency
The bookkeeping currency of the Company is Renminbi.
5. Accounting treatment of business combination involving enterprises under and not under common control
Business combination involving enterprises under the same control: the assets and liabilities acquired by the merging party inthe business combination (including the goodwill formed by the final controlling party by purchasing the merged party) shallbe measured on the basis of the book value of the assets and liabilities of the merged party in the consolidated financialstatements of the final controlling party on the merger date. The difference between the book value of the net assets obtainedand the consideration paid for the combination (or total par value of issued shares) is adjusted against capital reserve (capitalstock premium); if the capital reserve (capital stock premium) is not sufficient to absorb the difference, the retained earningsshall be adjusted.Business combination not involving enterprises under common control: the cost of combination is the fair value of the assetspaid, liabilities incurred or assumed and equity securities issued by the acquirer on the acquiring date for acquisition of thecontrol right of the acquiree. If the cost of combination is greater than the share of the fair value of the acquiree's identifiablenet assets acquired in the combination, the difference is recognized as goodwill; if the cost of combination is less than theshare of the fair value of the acquiree's identifiable net assets acquired in the combination, the difference is included in theprofit and loss of the current period. The acquiree's identifiable assets, liabilities and contingent liabilities obtained by theacquirer in the combination meeting the recognition conditions are measured at fair value on the acquiring date.The directly related expenses incurred for the business combination are included in the profit and loss of the current period;the transaction costs associated with the issue of equity or debt securities for the business combination are included in theinitially recognized amounts of the equity or debt securities.
6. Methods of preparing consolidated financial statements
1) Scope of consolidation
The consolidation scope of the consolidated financial statements is determined on a control basis and includes the Companyand all subsidiaries. Control means that the Company has the power over the invested entity, enjoys variable returns byparticipating in the relevant activities of the invested entity, and has the ability to use the power to influence the amount ofreturns.
2) Consolidation procedures
The Company regards the whole enterprise group as an accounting entity and prepares consolidated financial statements inaccordance with unified accounting policies to reflect the overall financial position, operating results and cash flow of theenterprise group. The impact of internal transactions between the Company and its subsidiaries and between the subsidiariesare offset. If the internal transaction indicates that impairment loss has occurred to relevant assets, such loss shall berecognized in full. If the accounting policies and the accounting periods adopted by the subsidiaries are inconsistent withthose of the Company, necessary adjustments shall be made in accordance with the accounting policies and the accountingperiods of the Company when preparing the consolidated financial statements.The minority shareholders' share of the subsidiary's owners' equity, current net profit and loss and current comprehensiveincome shall be separately listed under the owners' equity item in the consolidated balance sheet, under the net profit itemand under the total comprehensive income item in the consolidated income statement. If the current loss shared by theminority shareholders of the subsidiary exceeds their share in the owner's equity of the subsidiary at the beginning of theperiod, the minority equity shall be offset by the balance.
(1) Increase of subsidiaries or business
During the reporting period, if subsidiaries or business are increased due to business combination involving enterprises underthe same control, the operating results and cash flow from the beginning of the current period to the end are incorporated intothe consolidated financial statements, and the opening balance in the consolidated financial statements and the related itemsin comparative statements are adjusted, which shall be regarded that the reporting subject after combination has been existedsince the initial control point of the ultimate controlling party.If the invested party under the same control is controlled by the additional investment and other reasons, the equityinvestment held before obtaining the control of the merged party, and the relevant profits and losses, other comprehensiveincome and other net assets and other net assets changes between the date of acquisition of the original equity and the date onwhich the merging party and the merged party are under the same control (whichever is later) and the merger date shall offsetthe period of between the opening retained earnings or current profits and losses in the comparative reporting period.During the reporting period, if subsidiaries or business are increased due to business combination of enterprises not under thesame control, it shall be included in the consolidated financial statements as of the acquisition date on the basis of the fairvalue of all identifiable assets, liabilities and contingent liabilities determined on the acquisition date.If it is able to exercise control over the invested entity that is not under the same control due to additional investment or otherreasons, the equity held by the acquiree before the acquisition date shall be re-measured according to the fair value of theequity on the acquisition date, and the difference between the fair value and the book value shall be included into the currentinvestment income. Other comprehensive income, which can be reclassified into profit and loss in the future, and otherchanges in owners' equity under the equity method as related to the acquiree's equity held before the acquisition date areconverted to the investment income of the current period as of the acquisition date.
(2) Disposal of subsidiary
① General disposal method
When the Company loses the control right over the invested entity due to disposal of part of the equity investment or otherreasons, the residual equity investment after the disposal shall be re-measured at its fair value on the date of losing the controlright. The difference between the sum of the consideration acquired by disposal of the equity and the fair value of the residualequity, minus the sum of the share of the net assets of the original subsidiary continuously calculated from the acquisitiondate or the merging date and the goodwill according to the original shareholding ratio, shall be included in the investmentincome in the period of lose of the control right. Other comprehensive income related to the equity investment of the originalsubsidiary that can be reclassified into profit and loss in the future, and other changes in owners' equity under the equitymethod are converted to the investment income in the period of lose of the control right.
② Disposal of subsidiary by steps
For disposal of the equity investment in the subsidiary by steps through multiple transactions till loss of the control right, theterms, conditions and economic impact of the disposal on each transaction in respect of the equity investment of thesubsidiary are subject to one or more of the following circumstances, which generally indicate that the multiple transactionsare package deals:
i. The transactions were entered into simultaneously or with consideration of their mutual influence;ii. These transactions as a whole can only achieve a complete business result;iii. The occurrence of one transaction depends on the occurrence of at least one other transaction;iv. A transaction is not economical alone, but economic when considered with other transactions.
If each transaction belongs to a package deal, each transaction shall be subject to accounting treatment as a deal for disposalof subsidiary and loss of the control right; the difference between the disposal price and the share of net assets of thesubsidiary corresponding to the disposal of investment before the loss of control right is recognized as other comprehensiveincome in the consolidated financial statements and transferred into the current profit and loss in the period of loss of controlright.
If each transaction does not belong to a package deal, the equity investment of the subsidiary shall be subject to accountingtreatment without loss of control right before losing the control right; and accounting treatment shall be carried out inaccordance with the general disposal method of the subsidiary when losing the control right.
(3) Purchase of the minority equity of the subsidiaries
The difference between the long-term equity investment obtained due to the purchase of minority equity and the share of thenet assets to be enjoyed and continuously calculated from the acquisition date or merging date according to the increasedshareholding ratio is adjusted against the capital stock premium in the capital reserve in the consolidated balance sheet; if thecapital stock premium in the capital reserve is not sufficient to offset the difference, the retained earnings shall be adjusted.
(4) Partial disposal of equity investment in subsidiaries without loss of control right
The difference between the disposal price and the disposal of long-term equity investment and the share of the net assets tobe enjoyed and continuously calculated from the acquisition date or merging date, is adjusted against the capital stockpremium in the capital reserve in the consolidated balance sheet; if the capital stock premium in the capital reserve is notsufficient to offset the difference, the retained earnings shall be adjusted.
7. Joint venture arrangements classification and Co-operation accounting treatment
The joint venture arrangement is divided into joint management and joint venture.Joint management means the joint venture arrangement in which the joint venture parties enjoy the assets and assumes theliabilities related to the arrangement. The Company confirms the following items related to the share of interests in the jointoperation:
(1) Recognize the assets held solely by the Company and the assets jointly held according to the share of the Company;
(2) Recognize the liabilities undertaken solely by the Company and the liabilities jointly undertaken according to the share
of the Company;
(3) Recognize the income generated from the sale of the Company's share of the joint operation output;
(4) Recognize the income generated from the sale of outputs of the joint operation according to the share of the Company;
(5) Recognize the expenses incurred separately and the expenses incurred in joint operation according to the share of the
CompanyThe Company's investment in the joint venture shall be accounted by the equity method. Please refer to Note "V. 22. Long-term equity investment" for details.
8. Determining standards of cash and cash equivalents
Cash represents the Company's cash on hand and the deposit readily available for payment. Cash equivalents represent theshort-term, highly liquid investments that are readily convertible into known amounts of cash and that are subject to aninsignificant risk of change in value.
9. Foreign currency transaction and foreign currency statement translation
1) Foreign Currency Business
Foreign currency transaction adopts the spot exchange rate on the date of the transaction as the conversion exchange rate toconvert the foreign currency amount into RMB for bookkeeping.
At the balance sheet date, the balance of foreign currency monetary items is converted by using the spot exchange rates at thebalance sheet date. Exchange differences arising therefrom are recognized in current profit and loss, except the exchangedifferences related to a specific-purpose borrowing denominated in foreign currency that qualify for capitalization are treatedaccording to the capitalization of borrowing costs.
2) Conversion of financial statements denominated in foreign currencies
The asset and liability items in the foreign currency balance sheets shall be translated at a spot exchange rate on the balancesheet date. Among the owner's equity items, except the ones as "undistributed profits", others shall be translated at the spotexchange rate at the time when they are incurred. The income and expense items in the income statement are converted at thespot rate on the date of transaction.When disposing of the overseas operation, the balance of the financial statements denominated in foreign currencies relatedto the overseas operation shall be transferred from the owner's equity item to the profit and loss of the disposal period.
10. Financial instruments
The Company recognizes a financial asset, financial liability or equity instrument when becoming a party of the financialinstrument contract.
1) Classification of financial instruments
According to the Company's business model of managing financial assets and the contractual cash flow characteristics offinancial assets, the financial assets are classified at the initial recognition as: financial assets measured at the amortized cost,financial assets measured at fair value of which changes are recorded into other comprehensive income, and financial assetsat fair value of which changes are recorded in current profit and loss.The Company classifies the financial assets that meet the following conditions and are not designated to be measured at fairvalue and whose changes are recorded into the profits and losses of the current period as financial assets measured at theamortized cost:
- The business model is aimed at collecting contract cash flows;- The contract cash flow is only the payment of the principal and interest based on the outstanding principal amount.The Company classifies the financial assets that meet the following conditions and are not designated to be measured at fairvalue and whose changes are recorded into the profits and losses of the current period as financial assets measured at fairvalue of which changes are recorded into other comprehensive income (debt instrument):
- The business model is aimed at collecting contract cash flows and the sale of such financial assets;- The contract cash flow is only the payment of the principal and interest based on the outstanding principal amount.For non-trading equity instrument investments, the Company may, at the time of initial recognition, irrevocably designatethem as financial assets measured at fair value of which changes are recorded into other comprehensive income (equityinstrument). The designation is made on a single investment basis and the related investments meet the definition of an equityinstrument from an issuer's perspective.Except the above financial assets measured at the amortized cost and the financial assets measured at fair value of whichchanges are recorded into other comprehensive income, the Company classifies all other financial assets as financial assets atfair value of which changes are recorded in current profit and loss. Upon initial recognition, if accounting mismatches can beeliminated or significantly reduced, the Company may irrevocably designate the financial assets that should have beenclassified as those measured at the amortized cost or measured at fair value of which changes are recorded into othercomprehensive income as the financial assets measured at fair value of which changes are recorded in current profit and loss.Financial liabilities are classified at the initial recognition as: financial liabilities measured at fair value of which changes arerecorded in current profit and loss and financial liabilities measured at the amortized cost.
Financial liabilities that meet one of the following conditions may be designated at the initial recognition as the financialliabilities measured at fair value of which changes are recorded in current profit and loss.
① This designation can eliminate or significantly reduce accounting mismatches.
② Manage and conduct performance evaluation of the financial liability portfolio or financial assets and financial liability
portfolio on the basis of fair value according to the enterprise risk management or investment strategy set forth in the officialwritten documents, and rep ort to the key management personnel within the enterprise on this basis.
③ The financial liability contains embedded derivatives that need to be split separately.
2) Recognition basis and measurement method of financial instruments
(1) Financial asset measured on the basis of post-amortization costs
The financial assets measured at the amortized costs include bills receivable, accounts receivable, other receivables, long-term receivables, debt investment, etc., which shall be initially measured at fair value, and the relevant transaction expensesare included in the initial recognized amount; the receivables excluding major financing components and the accountsreceivable that the Company decides not to consider the financing components of less than one year shall be initiallymeasured at the contract transaction price.The interest calculated by the effective interest rate method during the holding period is recorded into the current profit andloss.Upon recovery or disposal, the difference between the price obtained and the book value of the financial assets shall berecorded into the current profit or loss.
(2) Financial assets measured at fair value of which the changes are included in other comprehensive income (debt
instrument)Financial assets measured at fair value of which the changes are included in other comprehensive income (debt instrument),including receivables financing and other debt investments, are initially measured at fair value and related transaction costsare included in the initial recognized amount. The financial asset is subsequently measured at its fair value, and changes inthe fair value are recorded in other comprehensive income, except the interest, impairment loss or gains and exchange gainand loss calculated by the effective interest rate method.Upon the de-recognition, the accumulated gains or losses previously recorded in other comprehensive income will betransferred from other comprehensive income to current profit and loss.
(3) Financial assets measured at fair value of which the changes are included in other comprehensive income (equity
instrument)Financial assets measured at fair value of which changes are recorded into other comprehensive income (equity instrument),including other equity instrument investment, are initially measured at fair value and related transaction costs are included inthe initial recognized amount. Such financial assets are subsequently measured at the fair value and the change in the fairvalue is recorded into other comprehensive income. The dividends obtained are recorded in current profit and loss.Upon the de-recognition, the accumulated gains or losses previously recorded in other comprehensive income will betransferred from other comprehensive income to retained earnings.
(4) Financial assets measured at fair value of which the changes are included in current profit and loss
Financial assets measured at fair value of which changes are recorded in current profit and loss, including trading financialassets, derivative financial assets, other non-current financial assets, etc., are initially measured at fair value and relatedtransaction expenses are recorded in current profit and loss. Such financial assets are subsequently measured at the fair valueand the change in the fair value is recorded into current profit and loss.
(5) Financial liabilities measured at fair values of which the changes are include in the current profits or losses
Financial liabilities measured at fair value of which changes are included in current profit and loss, including trading financialliabilities, derivative financial liabilities, etc., are initially measured at fair value and related transaction expenses arerecorded in current profit and loss. Such financial liabilities are subsequently measured at the fair value and the change in thefair value is recorded into current profit and loss.Upon the de-recognition, the difference between its book value and the consideration paid is recorded in current profit andloss.
(6) Financial liabilities measured at the amortized cost
Financial liabilities measured at amortized cost, including short-term borrowings, notes payable, accounts payable, otherpayables, long-term borrowings, bonds payable and long-term payables, are initially measured at fair value, and relatedtransaction expenses are included in the initial recognized amount.The interest calculated by the effective interest rate method during the holding period is recorded into the current profit andloss.Upon the de-recognition, the difference between the consideration paid and the book value of such financial liability isrecorded in current profit and loss.
3) De-recognition and transfer of financial assets
The Company shall derecognize the financial assets if one of the following conditions is satisfied:
- Termination of the contractual right to collect the cash flow of financial assets;- The financial assets have been transferred, and almost all the risks and remuneration in its ownership have beentransferred to the transferee;- The financial assets have been transferred, and while the Company has neither transferred nor retained virtually all of therisks and remuneration in the ownership of the financial assets, it has not retained control of the financial assets.In the event of a financial asset transfer, if almost all the risks and remuneration in the ownership of the financial asset areretained, the recognition of the financial asset will not be terminated. The principle of substance over form is adopted whenjudging whether the transfer of financial assets meets the above conditions for de-recognition of financial assets.The Company divides the transfer of financial assets into the whole transfer of financial assets and the partial transfer offinancial assets. If the overall transfer of the financial asset meets the de-recognition conditions, the difference between thefollowing two amounts shall be recorded into the current profits and losses:
(1) The book value of the transferred financial asset;
(2) The sum of the consideration received from the transfer and the cumulative amount of the fair value changes originally
included in owner's equity directly (where the financial asset involved in the transfer is measured at fair value and the changeis recorded in other comprehensive income (debt instrument)).If the partial transfer of the financial asset meets the de-recognition conditions, the book value of the overall transferredfinancial asset is distributed between the derecognized and non-derecognized part according to the relative fair value and thedifference between the following two amounts is included in current profit and loss:
(1) The book value of derecognized part;
(2) Sum of the consideration of the derecognized part and the amount of corresponding derecognized part in the total fair
value changes originally included in owner's equity directly (where the financial asset involved in the transfer is measured atfair value and the change is recorded in other comprehensive income (debt instrument)).
If the transfer of the financial asset does not meet the conditions of de-recognition, such financial asset shall continue to berecognized and the consideration received shall be recognized as a financial liability.
4) De-recognition of financial liabilities
Where the current obligation of a financial liability has been discharged in whole or in part, such financial liability or partthereof shall be derecognized; if the Company enters into an agreement with the creditor to replace the existing financialliabilities by assuming new financial liabilities, and the contract terms of the new financial liabilities and the existingfinancial liabilities are substantially different, the Company shall derecognize the existing financial liabilities and recognizethe new financial liabilities at the same time.If all or part of the contract terms of the existing financial liabilities are substantially modified, the existing financial liabilityor part thereof shall be derecognized, and the financial liabilities after the modification shall be recognized as new financialliabilities.When a financial liability is derecognized in whole or in part, the difference between the book value of the derecognizedfinancial liability and the consideration paid (including non-cash asset transferred out or the new financial liabilityundertaken) is recorded in current profit and loss.If the Company repurchases part of the financial liability, it shall allocate the overall book value of the financial liability onthe repurchase date according to the relative fair value of the continuing recognition part and the de-recognition part. Thedifference between the book value allocated to the derecognized part and the consideration paid (including non-cash assettransferred out or the liability undertaken) is recorded in current profit and loss.
5) Fair value determination method of financial assets and financial liabilities
The fair value of a financial instrument with an active market shall be recognized based on the quotation in the active market.The fair value of a financial instrument without an active market shall be recognized by means of valuation techniques. Uponvaluation, the Company adopts valuation techniques applicable to the current situation and supported by sufficient availabledata and other information, selects input values consistent with the asset or liability characteristics considered by marketparticipants in the transaction of related assets or liabilities, and gives priority to relevant observable input values. TheCompany uses non-observable input values only when relevant observable input values cannot be obtained or are notpracticable to obtain.
6) Test method and accounting treatment method of financial assets impairment
The Company estimates the expected credit losses of financial assets measured at amortized cost, financial assets measured atfair value of which changes are recorded into other comprehensive income (debt instrument) and financial guaranteecontracts on a single or combined basis.The Company calculates the probabilistic weighted amount of the present value of the difference between the cash flowsreceivable under the contracts and the cash flows expected to be received and recognizes the expected credit loss, taking intoaccount reasonable and evidential information concerning past events, current conditions and projections of future economicconditions, and weighting the risk of default.If the credit risks of such financial instrument have increased significantly since the initial recognition, the Company shallmeasure its loss provision according to the amount equivalent to the expected credit loss in the entire duration of suchfinancial instrument. If the credit risks of such financial instrument have not increased significantly since the initialrecognition, the Company shall measure the loss provision according to the amount equivalent to the expected credit loss ofsuch financial instrument in the next 12 months. The amount of the increase or reversal of the loss provision resultingtherefrom shall be recorded into the current profit and loss as an impairment loss or profit.By comparing the risk of default of financial instruments on the balance sheet date with the risk of default on the initialrecognition date, the Company determines the change of the default risk during the expected duration of the financialinstruments, so as to assess whether the credit risks of financial instruments have significantly increased since the initialrecognition. In general, the Company will consider that the credit risks of the financial instrument has increased significantlyif it is more than 30 days overdue, unless there is conclusive evidence that the credit risks of such financial instrument havenot increased significantly since the initial recognition.If the credit risks of the financial instrument are low on the balance sheet date, the Company considers that the credit risks ofthe financial instrument have not increased significantly since the initial recognition.
If there is objective evidence that a certain financial asset has suffered credit impairment, the Company shall make provisionfor the impairment of the financial asset on an individual basis.For receivables and contract assets formed by transactions regulated by Accounting Standards for Business Enterprises No.14- Revenue (2017), the Company always measures its loss provision at an amount equivalent to the expected credit loss overthe entire duration, whether o r not it contains major financing components.For lease receivable, the Company shall always measure its loss provision according to the amount equivalent to the expectedcredit loss within the entire duration.If the Company no longer reasonably expects that the contract cash flow of a financial asset can be recovered in whole or inpart, it will directly write down the book balance of such financial asset.
11. Notes receivable
See “12. Accounts receivable”for details.
12. Accounts receivable
1) Impairment of notes receivable and accounts receivable
For notes receivable and accounts receivable, whether or not they contain major financing components, the Company alwaysmeasures its loss provision at an amount equivalent to the expected credit loss over the entire duration, and the increase orreversal amount of the loss provision thus formed is recorded into the current profit and loss as impairment loss or gain.For notes receivable, the Company shall always measure its loss provision according to the amount equivalent to theexpected credit loss within the entire duration. Based on the credit risk characteristics of notes receivable, it is divided intodifferent portfolios:
| Item | Basis for recognition of combination and accrual method of provision for bad debt |
Bank acceptance bill
listed joint-stock commercial banks), no provision
| for bad debts shall be made; if the acceptor is another bank or financial company, the expected credit loss is analyzed based on historical information and judged whether it is necessary to make provision for bad debts. |
Trade acceptance
The Company combines the notes receivable-trade acceptance, accounts receivable (except in the consolidation) andprepayments with similar credit risk characteristics (aging), and estimates the proportion of bad debt provision for notesreceivable -trade acceptance, accounts receivable and prepayments based on all reasonable and informed information,including forward-looking information, as follows:
Aging
If the acceptor is a non-financial institution, its division is the same as that of accounts receivable (ifaccounts receivable are transferred to notes receivables, the age of accounts is calculatedcontinuously).Accruing proportion ofaccounts receivable (%)
| Accruing proportion of accounts receivable (%) | Accruing proportion of trade acceptance (%) | Accruing proportion of prepaid accounts (%) | |
| Within 1 year (including 1 year) |
5 5 0
| 1~2 years | 10 | 10 | 0 |
| 2~3 years | 30 | 30 | 50 |
| 3~4 years | 50 | 50 | 100 |
| 4~5 years | 80 | 80 | 100 |
| More than 5 years | 100 | 100 | 100 |
If there is objective evidence that a certain note receivable, account receivable or prepayment has incurred credit impairment,the Company shall make a provision for bad debts for the note receivable or account receivable or prepayment separately andrecognize the expected credit loss.
2) Other receivables
The measurement of impairment loss of other receivables other than accounts receivable and notes receivable (includingother receivables, long-term receivables, etc.), shall be made b referring to the “V. 10. Financial instruments 6) Test methodand accounting treatment method of financial assets (excluding receivables) impairment”.
13. Amounts receivable financing
Please refer to "10. Financial instruments".
14. Other receivables
Recognition method and accounting treatment method of the expected credit loss of other receivablesRecognition method and accounting treatment method of the expected credit loss of other receivablesThe measurement of impairment loss of other receivables other than accounts receivable and notes receivable (includingother receivables, long-term receivables, etc.), shall be made b referring to the “V. 10. Financial instruments 6) Test methodand accounting treatment method of financial assets (excluding receivables) impairment”.
15. Inventory
1) Classification and cost of inventories
The inventories are classified as raw materials, low priced and easily worn articles, merchandise inventory, work in progress,goods shipped in transit, goods processed by commission, wrappage, etc.Inventories are initially measured at cost. The inventory cost includes procurement costs, processing costs, and otherexpenses incurred to bring the inventory to its current location and condition.
2) Valuation method of delivered inventory
The sales of purchased finished products are priced according to the moving weighted average method at the time ofshipment; the sales of self-produced products are priced according to the standard cost method at the time of shipment, andthe difference between the actual cost and the standard cost shall be apportioned according to the inventory and sales ratio atthe end of the period.
3) Recognition basis of net realizable value of different types of inventories
The inventories shall be measured on the balance sheet date according to the cost of inventories or net realizable value,whichever is lower. If the cost of the inventories is higher than the net realizable value, the inventory falling price reservesshall be withdrawn. The net realizable value of inventories is the amount of the estimated sale price of the inventoriessubtracted by the estimated cost about to occur in completion, estimated selling expenses and related taxes in daily activities.For the finished products, merchandise inventory, materials for sale and other merchandise inventories directly used for sale,the net realizable value is recognized by the amount of the estimated sale price of the inventories subtracted by the estimatedselling expenses and related taxes in normal production and operation process; for the material inventory required to beprocessed, the net realizable value is recognized by the amount of the estimated sale price of the finished products subtractedby the estimated cost about to occur in completion, estimated selling expenses and related taxes in normal production andoperation process; for the inventories held to perform the sales contract or labor contract, the net realizable value is calculatedon the basis of contract price. If the number of the inventories held is greater than the quantity ordered in the sales contract,the net realizable value of the excessive inventories is calculated on the basis of general sale price.
If the influence factors writing down the inventory value before have disappeared after withdrawal of the inventory fallingprice reserves, resulting in the net realizable value of the inventories higher than the book value, the amount written down isreversed within the originally withdrawn amount of inventory falling price reserves and the amount reversed is included incurrent profits and losses.
4) Perpetual inventory system is adopted as the inventory system.
5) Amortization methods of low priced and easily worn articles and wrappage
(1) The 50-50 amortization method is adopted for low-value consumables;
(2) The packaging adopts the one-time write-off method.
16. Contract assets
1) Methods and standards for the recognition of contract assets
The Company lists the contractual assets or contractual liabilities in the balance sheet according to the relationship betweenperformance obligations and customer payment. The Company's rights to receive consideration for the transfer of goods orservices to the customer (and such rights are subject to factors other than the passage of time) are listed as contractual assets.The contractual assets and contractual liabilities under the same contract are listed in the net amount. The rights that theCompany owns and unconditionally (depending only on the passage of time) to collect consideration from the customer arelisted separately as receivables.
2) Recognition method and accounting treatment method of the expected credit loss of contractual assets
For the recognition methods and accounting treatment methods of the expected credit loss of the contract assets, please referto Note "V. 10. Financial Instruments 6) Testing method and accounting treatment method of financial assets impairment(excluding receivables)”.
17. Contract cost
Contract cost includes the contract performance cost and the contract acquisition cost.If the cost incurred by the Company for the performance of the contract is not within the scope of relevant standards forinventory, fixed assets or intangible assets, it shall be recognized as an asset as a contract performance cost when thefollowing conditions are met:
The cost is directly related to a current or anticipated contract.The cost increases the Company's future resources to meet its performance obligations.The cost is expected to be recoverable.If the Company is expected to recover the incremental cost incurred in acquiring the contract, it shall be recognized as anasset as the contract acquisition cost.Assets related to contract costs are amortized on the same basis as income recognition of goods or services related to the asset;however, if the amortization period of the contract acquisition cost is less than one year, the Company shall record it into thecurrent profit and loss when it is incurred.
If the book value of an asset related to the contract cost is higher than the difference between the following two items, theCompany shall draw an impairment provision for the excess portion and recognize it as the assets impairment loss:
(1) Remaining consideration expected to be obtained as a result of the transfer of the goods or services related to the asset;
(2) The costs is estimated and to be incurred for the transfer of the relevant goods or services.
If the factors of impairment in the previous period change and make the difference above higher than the book value of theasset, the Company shall reverse the withdrawn impairment provision and include it into the current profit and loss, but thebook value of the reversed asset shall not exceed the book value of such asset on the reversal date if the impairment provisionis not withdrawn.
18. Assets held for sales
If the book value of an asset is recovered mainly through the sale (including the non-monetary assets exchange of commercialnature) rather than continuous use of a non-current asset or disposal group, such asset is classified as an asset held for sale.The Company classifies non-current assets or disposal groups as held for sale if they meet the following conditionssimultaneously:
(1) Immediately available for sale under current conditions in accordance with the usual practice of selling such type of
assets or disposal groups in similar transactions;
(2) The sale is highly likely, that is, the Company has resolved a sale plan and obtained a firm purchase commitment, and
the sale is expected to be completed within one year. Where the relevant provisions require the approval of the relevantauthority or regulatory authority of the Company before the sale, the approval has been obtained.Where it is classified as non-current assets (not including financial assets, deferred income tax assets, investment propertiesthat are subsequently measured through the fair value model, the assets formed by the employee compensation) or disposalgroups held for sale, if its book value is higher than the net amount of the fair value minus the selling expense, the book valueis written down to the net amount of the fair value minus the selling expense, the amount written down is recognized as theassets impairment loss and included in the current profit and loss, and the impairment provision for assets held for sale shallbe made at the same time.
19. Debt investment
Please refer to "10. Financial instruments".
20. Other debt investments
Please refer to "10. Financial instruments".
21. Long-term receivables
N/A
22. Long-term equity investment
1) Criteria for determining joint control and significant influence
Joint control refers to the joint control over an arrangement in accordance with the relevant agreement, and the relatedactivities of the arrangement can only be decided upon the unanimous consent of the parties sharing the control. Where theCompany and other joint venture parties jointly exercise joint control over the invested entity and enjoy rights over the netassets of the invested entity, the invested entity shall be a joint venture of the Company.
Significant influence means the power to participate in the formulation of financial and operating decisions of the investedentity, but not the power to control or jointly control the formulation of these policies together with other parties. If theCompany is able to exert significant influence on the invested entity, the invested entity is a joint venture of the Company.
2) Recognition of initial investment cost
(1) Long-term equity investment formed by business combination
For the long-term equity investment in a subsidiary formed by business combination under common control, the share of thebook value of the owner's equity of the combining party in the consolidated financial statements of the final controlling party,on the combination date, is regarded as the initial cost of the long-term equity investment. The difference between the initialcost of the long-term equity investment and the book value of paid consideration shall adjust the capital stock premium incapital reserve. If the capital stock premium in capital reserve is insufficient to offset, the retained earnings shall be adjusted.Where it implements the control upon the invested entity under the same control due to additional investment or otherreasons, the difference between the initial investment cost of the long-term equity investment recognized according to theabove principle and the sum of the book value of the long-term equity investment before the combination plus the book valueof the new consideration for the acquisition of further shares on the merging date shall adjust the capital stock premium. Ifthe capital stock premium is insufficient to offset, the retained earnings shall be offset.For the long-term equity investment in a subsidiary formed by business combination not under common control, thecombined cost recognized on the acquisition date is regarded as the initial cost of the long-term equity investment. Where itimplements the control upon the invested entity not under the same control due to additional investment and other reasons,the sum of the book value of the original equity investment plus the new investment cost is taken as the initial investmentcost.
(2) Long-term equity investment acquired by means other than business combination
If the long-term equity investment is acquired by means of cash payment, the initial investment cost shall be the purchaseprice actually paid.If the long-term equity investment is acquired by issuing equity securities, the initial investment cost shall be the fair value ofthe issued equity securities.
3) Subsequent Measurement and Approach for the Determination of Profit and Loss
(1) Long-term equity investment checked by cost method
The long-term equity investment made by the Company in its subsidiaries adopts the cost method, unless the investmentmeets the conditions of holding for sale. Except for cash dividends or profits already declared but not yet paid that areincluded in the price or consideration actually paid upon acquisition of the investment, the Company recognize theinvestment income in current period in accordance with the attributable share of cash dividends or profit distributionsdeclared by the invested entity.
(2) Long-term equity investment checked by equity method
The long-term equity investment of joint ventures and cooperative enterprises shall be calculated by the equity method. Theinitial in vestment cost of the long-term equity investment is not adjusted if it is greater than the difference between the fairvalue share of the net identifiable assets of the invested entity in the investment; if the initial investment cost of the long-termequity investment is less than the difference between the fair value share of the net identifiable assets of the invested entity inthe investment, it is recorded in current profit and loss and the cost of the long-term equity investment is adjusted.The Company recognizes the investment income and other comprehensive income according to its share of net profit or lossand other comprehensive income of the invested entity, and adjusts the boot value of the long-term equity investmentaccordingly; the Company decreases the book value of the long-term equity investment accordingly in accordance with theshare of the profit distribution or cash dividends declared by the invested entity; for changes in owner's equity of the investedentity other than those arising from its net profit o r loss, other comprehensive income and profit distribution (abbreviated as"other changes in owner's equity"), the Company adjusts the book value of the long-term equity investment and records in theowner's equity.
Upon recognizing the share of the net profit and loss, other comprehensive income and other changes in owner's equity of theinvested entity, it shall be recognized after adjusting the net income and other comprehensive income of the invested entityon the basis of the fair value of the identifiable net assets of the invested entity when obtaining the investment, and inaccordance with the Company's accounting policies and accounting periods.The profits and losses of unrealized internal transactions between the Company and joint ventures, cooperative enterprisesshall be calculated according to the proportion that shall be enjoyed by the Company and shall be offset. On this basis,investment income shall be recognized, except that the assets invested or sold constitute business. The unrealized internaldeal loss between the Company and the invested entity is recognized in full amount if attributable to the assets impairmentloss.The net loss incurred by the Company to the cooperative enterprise or joint venture, except for the liability for additional loss,shall be written down to zero by the book value of long-term equity investment and other long-term equity substantiallyconstituting the net investment in the cooperative enterprise or joint venture. If the cooperative enterprise or joint ventureachieves the net profits in the later periods, the Company recovers to recognize the gain sharing amount after making up forthe unrecognized loss sharing amount with the gain sharing amount.
(3) Disposal of long-term equity investment
On disposal of the long-term equity investment, the balance between the book value of the equity disposed of and the actualprice obtained is charged to current profit and loss.If part of the long-term equity investment is disposed of by the equity method, and the remaining equity is still accounted bythe equity method, the other comprehensive income recognized by the original equity method shall be carried forward on thesame basis as the relevant assets or liabilities directly disposed of by the invested entity at the corresponding proportion, andthe changes in other owners' equity shall be carried forward to the current profit and loss on a proportional basis.If the joint control or significant influence on the invested entity is lost due to the disposal of equity investment or otherreasons, other comprehensive income of the original equity investment recognized by the equity method shall be subject toaccounting treatment through adopting the basis for the direct disposal of relevant assets or debts when the equity method isterminated. Other changes in owners' equity will be transferred to current profit and loss when the equity method isterminated.If the Company loses its control rights over the invested entity due to the disposal of part of the equity investment, whenpreparing individual financial statement, in case of the residual equity with joint control or significant influence on theinvested entity, the Company shall calculate and adjust the residual equity with equity method as upon obtaining. Othercomprehensive income recognized before the acquisition of the control right of the invested entity shall be carried forwardproportionately on the same basis as the direct disposal of relevant assets or liabilities by the invested entity, and otherchanges in owners' equity recognized by the equity method shall be carried forward proportionately to the current profit andloss. If the residual equity cannot exercise joint control or exert significant influence on the invested entity, it shall berecognized as financial assets, the difference between its fair value and book value on the date of loss of control shall beincluded in the current profit and loss, and all other comprehensive income and other changes in owner’s equity recognizedbefore obtaining the control right of the invested entity shall be carried forward.If the deals for disposal of the subsidiary’s equity investment by steps through several times of transaction until the loss ofthe control right belong to a package deal, the deals shall be subject to accounting treatment as a deal for disposal of theequity investment in the subsidiary and loss of the control right; the difference between each disposal price and the bookvalue of the long-term equity investment corresponding to the equity disposed of before the loss of control right is, inindividual financial statements, recognized as other comprehensive income and then transferred into the current profit andloss in the period of loss of control right. If it does not belong to a package deal, each deal shall be accounted for separately.
23. Investment real estates
Measurement mode of investment propertiesCost methodDepreciation or amortization method
Investment real estate refers to real estate held for the purpose of earning rent and/or capital appreciation, including leasedland use rights, land use rights held and prepared for transfer after appreciation, leased buildings (including self-constructedbuildings and the buildings that are self built or developed for rent after completion of activities, as well as the buildings thatare under construction or development for future lease).Subsequent expenditures related to investment real estate are recognized as investment real estate costs when the relatedeconomic benefits are likely to flow in and their costs can be reliably measured; Otherwise, it will be included in the currentprofit and loss at the time of occurrence.The existing investment real estate are measured by our Company through the cost method. For investment real estatemeasured through the cost method, buildings for lease is applicable to the same depreciation policy as the Company's fixedassets, right of use the leased land is applicable to the same amortization policy as intangible assets.
24. Fixed assets
(1) Recognition conditions
Fixed assets refer to the tangible assets which are held for production of goods, provision of labor, lease or operatingmanagement and whose service life exceeds a fiscal year. The fixed assets can be recognized when meeting the followingconditions:
① The economic benefits related to the fixed assets are likely to flow to the enterprise;
② The cost of the fixed assets can be reliably measured.
The fixed assets are initially measured according to the cost (and the influence of the expected disposal cost factors).Subsequent expenditure related to fixed assets, if the economic benefits related may flow in and the cost can be reliablymeasured, is included in the fixed asset cost; and the book value of the replaced part is derecognized; all other subsequentexpenditures are recorded into current profit and loss when incurred.
(2) Depreciation method
Class Depreciation method Depreciation life Residual rate
Houses and building
| Yearly depreciation | ||
| Straight-line depreciation |
10-38 years 5.00%-10.00% 2.37%-9.50%Machinery equipment
2-15 years 5.00%-10.00% 6.00%-47.50%Transportation equipment
| Straight-line depreciation |
| Straight-line depreciation |
3-10years 5.00%-10.00% 9.00%-31.67%
| Electronic equipment and office equipment, etc. | Straight-line depreciation |
2-10years 5.00%-10.00% 9.00%-47.50%Depreciation of fixed assets is calculated by straight-line depreciation method and the depreciation rate is determinedaccording to the category, expected useful life and expected net residual rate of the fixed assets. For fixed assets withprovision for impairment, the amount of depreciation shall be recognized in future periods according to the book value afterdeducting the provision for impairment and based on the usable life. If the components of the fixed assets have differentuseful life or provide economic benefits for the Company in different ways, the depreciation is calculated respectively bydifferent depreciation rates or depreciation methods.
(3) Recognition basis, valuation and depreciation methods of fixed assets under financing lease
25. Construction in progress
The construction in progress is measured according to the actual cost. Actual costs include construction costs, installationcosts, borrowing costs eligible for capitalization, and other expenses necessary to bring the construction in progress to apredetermined usable state. The construction in progress will be transferred into fixed assets and begin to subject todepreciation from the following month when it reaches the intended serviceable condition.
26. Borrowing costs
1) Recognition principle of capitalization of borrowing costs
If the borrowing costs incurred by the Company can be directly attributed to the purchase, construction or production of theassets eligible for capitalization, they shall be capitalized and recorded into the cost of the relevant assets; other borrowingcosts shall be recognized as expenses according to the amount incurred at the time of occurrence and shall be recorded intothe current profit and loss.Assets meeting the capitalization conditions refer to the fixed assets, investment properties, inventories and other assetswhich can reach the intended usable or marketable status only after quite a long time of construction or production activities.
2) Capitalization period of borrowing costs
Capitalization period refers to the period from the time point at which borrowing costs begin to be capitalized to the timepoint at which borrowing costs cease to be capitalized, excluding the period during which the capitalization of borrowingcosts is suspended. Capitalization begins when borrowing costs meet the following conditions:
(1) Asset expenditures have been incurred, including expenditures incurred in the form of cash payment, transfer of non-
cash assets or undertaking interest-bearing liabilities for the purchase and construction of or production of assets eligible forcapitalization;
(2) Borrowing costs have been incurred;
(3) The purchase, construction or production activities which are necessary to prepare the asset for its intended use or sale
have started.When the purchase, construction or production of assets that meet the capitalization conditions reach the predeterminedusable or marketable state, the capitalization of borrowing costs shall cease.
3) Capitalization suspension period
If the assets that meet the capitalization conditions are abnormally interrupted in the process of purchase and construction orproduction, and the interruption period is more than 3 consecutive months, the capitalization of borrowing costs shall besuspended; if the interruption is necessary for the purchase, construction or production of the assets that meet thecapitalization conditions to reach the predetermined usable state or marketable state, the borrowing costs shall continue to becapitalized. The borrowing costs incurred during the interruption period are recognized as the current profit and loss, until theborrowing costs continue to be capitalized after the purchase and construction or the production activities of the assets arerestarted.
4) Calculation method of capitalization rate and capitalization amount of borrowing costs
For the specific borrowing for the purchase and construction or production of assets eligible for capitalization, thecapitalization amount of borrowing costs shall be recognized by the borrowing costs actually occurring in the current periodof specific borrowing, minus the amount of the interest income obtained by depositing the unused borrowing funds in thebank or the investment income obtained by making temporary investment.
For the general borrowing occupied for the purchase, construction or production of assets that meet the capitalizationconditions, the amount of borrowing expenses to be capitalized for the general borrowing shall be calculated and recognizedaccording to the weighted average of the accumulated asset expenditure exceeding the specific borrowing multiplied by thecapitalization rate of the general borrowing occupied. The capitalization rate is calculated and recognized according to theweighted average effective interest rate of the general borrowing.During the capitalization period, the difference between the exchange of the principal and interest of the specific foreigncurrency borrowing shall be capitalized and included into the cost of the assets eligible for capitalization. The exchangedifference arising from the principal and interest of foreign currency borrowings other than specific foreign currencyborrowing is recorded into the current profit and loss.
27. Biological assets
N/A
28. Oil and gas assets
N/A
29. Right-of-use assets
Please refer to Note "V. 42: Lease".
30. Intangible assets
(1) Valuation method, service life and impairment test
1) Pricing methods of intangible assets
① The intangible assets are initially measured according to the cost:
The costs of purchased intangible assets include the purchase price, related taxes as well as other expenses incurred to makethe assets reach the intended serviceable conditions and attributable to the assets.
② Subsequent measurement
Pricing methods of intangible assetsThe intangible assets with limited useful life are amortized within the period when the intangible assets bring economicbenefits to the Company; the intangible assets that cannot be expected to bring economic benefits to the Company aredeemed to have uncertain life and are not amortized.
2) Estimation of useful life of intangible assets with limited life
| Item | Expected service life | Basis |
Land use right 38-50 years
| Term of use specified in the land-use right certificate | ||
| Software use right | 2-8 years | Useful life estimated by the management |
Trademark right 5-10 years
Patent right 5-10 years
| Benefit period specified in the certificate of trademark use | ||
| Benefit period specified in the certificate of patent use | ||
| Franchised use right | 3 years | Term of use stipulated in the contract |
| Client relations | 10 years | Useful life estimated by the management |
3) Basis for judging intangible assets with uncertain service life and the procedures for reviewing their service life
4) During this reporting period, there is no intangible assets with uncertain service life in the Company.
(2) Accounting policy of expenditure for internal research and development
1) Specific criteria for dividing research stage and development stage
The expenditure of the Company's internal R&D projects is classified into the expenditure at the research stage and theexpenditure at the development stage.Research stage: the stage of original, planned investigation and research activities to acquire and understand new scientific ortechnical knowledge, etc.Development stage: the stage in which research or other knowledge is applied to a plan or design to produce new orsubstantially improved materials, devices, products, etc., prior to commercial production or use.
2) Specific conditions for the capitalization of expenditures at the development stage
The expenditure at the research stage is charged to the current profit and loss in occurrence. The expenditure at thedevelopment stage can be recognized as intangible assets only when meeting the following conditions and charged to thecurrent profit and loss if not meeting the following conditions:
① Technically feasible to complete the intangible assets, so that they can be used or sold;
② It is intended to finish and use or sell the intangible assets;
③ The ways of intangible assets to generate economic benefits, including those can prove that the products generated by the
intangible assets can be sold or the intangible assets themselves can be sold and prove that the intangible assets to be usedinternally are useful;
④ It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of
sufficient technologies, financial resources and other resources;
⑤ The development expenditures of the intangible assets can be reliably measured
If the expenditure at the research stage and the expenditure at the development stage cannot be distinguished, the R&Dexpenditure incurred is fully charged to the current profit and loss.
The Company needs to comply with the disclosure requirements of the "Medical Device Business" in the No. 4 Guideline ofShenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by Growth Enterprises.
31. Long-term assets impairment
Long-term assets such as long-term equity investment, fixed assets, construction in progress, right-of-use assets, intangibleassets with limited service life, and oil and gas assets, which show signs of impairment on the balance sheet date, shall besubject to impairment tests. If the impairment test results show that recoverable amount of the asset is below its book value,the provision for impairment is withdrawn according to the balance and charged to the impairment loss. The recoverableamount is determined according to the higher of the net amount of the assets fair value subtracted by the disposal costs andthe present value of the expected future cash flow of the assets. The provision for impairment of assets is calculated andrecognized on the basis of single asset. The Company recognizes the recoverable amount of the asset group based on theasset group to which the asset belongs if the recoverable amount of the single asset is difficult to estimate. An asset group isthe smallest group of assets that can generate cash inflows independently.The goodwill formed due to business combination, intangible assets with uncertain service life and intangible assets that havenot yet reached the usable state shall be at least subject to an impairment test at the end of each year, regardless of whetherthere is any signs of impairment.The Company conducts the goodwill impairment tests. For the book value of the goodwill formed due to businesscombination, it shall be apportioned to the relevant asset group by a reasonable method from the date of purchase; if it isdifficult to apportion to the relevant asset group, it shall be apportioned to the relevant asset group combination. The relevantasset group or asset group combination is an asset group or asset group combination that can benefit from the synergies ofbusiness combination.At the time of conducting impairment test on the relevant asset group or asset group combination containing goodwill, ifthere are signs of impairment in the asset group or asset group combination related to goodwill, conduct impairment test onthe asset group or asset group combination without goodwill at first, calculate the recoverable amount and recognize thecorresponding impairment loss compared with the relevant book value. Then conduct an impairment test on the asset groupor asset group combination containing goodwill to compare its book value with the recoverable amount. If the recoverableamount is less than the book value, the amount of impairment loss shall first offset the book value of goodwill amortized tothe asset group or asset group combination, and then offset the book value of other assets proportionally according to theproportion of the book value of assets other than goodwill in the asset group or asset group combination. The aboveimpairment loss of assets will not be reserved in subsequent accounting periods once recognized.
32. Long-term unamortized expenses
Long-term unamortized expenses refer to the expenses that have occurred but shall be burdened in current period and laterperiods with the apportionment period more than one year. Amortization method: long-term unamortized expenses areamortized on an average basis over the benefit period.
33. Contract liabilities
The Company lists the contractual assets or contractual liabilities in the balance sheet according to the relationship betweenperformance obligations and customer payment. The obligations of the Company to transfer goods or provide services tocustomers for which consideration has been received or receivable are listed as contractual liabilities. The contractual assetsand contractual liabilities under the same contract are listed in the net amount.
34. Employee compensation
(1) Short-term compensation accounting method
The Company shall recognize the short-term compensation incurred actually during the accounting period when theemployees provide services for the Company as the liabilities and includes in current profits and losses or related asset costs.
For the social insurance premiums and housing funds paid by the Company for the employees as wells as the labor unionexpenditure and personnel education fund withdrawn according to the provisions, the corresponding employee compensationamount is recognized according to the stipulated accruing basis and accruing proportion during the accounting period whenthe employees provide services for the Company.The employee welfare expenses incurred by the Company shall be recorded into the current profit and loss or relevant assetcost according to the actual amount when actually incurred, and the non-monetary welfare shall be measured at its fair value.
(2) Post-employment benefits accounting method
① Defined contribution plan
The Company pays the basic endowment insurance and unemployment insurance for the employees according to relevantprovisions of the local government, calculates the amount payable according to local payment base and proportion in theaccounting period when the employees provide services for the Company, recognizes the amount payable as the liabilitiesand includes in current profits and losses or related asset costs. In addition, the Company has also participated in thecorporation pension plan / supplementary pension insurance fund approved by the relevant departments of the state. TheCompany pays the fees to the pension plan / local social security institution according to a certain proportion of the totalemployee wages and includes corresponding expenses in current profits and losses or related asset costs.
② Defined benefit plan
The Company attributes the welfare obligations generated from the defined benefit plan to the period when the employeesprovide services by the formula recognized according to the expected cumulative welfare unit method and includes in currentprofits and losses or related asset costs.The deficit or surplus formed from the present value of the defined benefit plan obligation subtracted by the fair value of thedefined benefit plan assets is recognized as a net liability or net asset of the defined benefit plan. In case of surplus in thedefined benefit plan, the Company measures the net assets of the defined benefit plan according to the lower of the surplusand asset upper limits of the defined benefit plan.All defined benefit plan obligations, including the obligations for payment within 12 months after the end of the expectedannual reporting period in which the employees provide services, are discounted according to the national debts matching thedefined benefit plan obligatory term and currency or the market return of the high-quality corporation bonds active in themarket on the balance sheet date.The service costs generated from the defined benefit plan and the net interest of the net liabilities or net assets of the definedbenefit plan are included in current profits and losses or related asset costs; the changes from re-measurement of the netliabilities or net assets of the defined benefit plan are included in other comprehensive income and not written back to theprofits and losses in subsequent accounting period. Upon the termination of the original defined benefit plan, the partoriginally recorded into other comprehensive income within the scope of rights and interests shall be carried forward toundistributed profit.In the settlement of the defined benefit plan, the settlement profits or losses are recognized according to the balance betweenthe present value of the defined benefit plan obligation and the settlement price recognized on the settlement date.
(3) Termination benefits accounting method
Where the Company provides dismission welfare for its employees, it shall recognize the employee compensation liabilitiesarising from the dismission welfare and include it in the current profit and loss on the earlier date below: when the Companyfails to unilaterally withdraw the dismission welfare due to termination of labor relation plan or downsizing suggestions;when the Company recognizes the costs or expenses related to restructuring involving payment of dimission welfare.
(4) Other long-term employee benefits accounting method
35. Lease liabilities
Please refer to Note "V. 42: Lease".
36. Estimated liabilities
The estimated liabilities are recognized when the obligation related to contingencies meets the following conditionssimultaneously:
(1) The obligation is the current obligation undertaken by the Company;
(2) Performance of the obligation is likely to lead to the outflow of economic benefits;
(3) The amount of the obligation can be reliably measured.
The estimated liabilities are initially measured at the best estimate of the expenditure required to perform the relevant currentobligations.In recognizing the best estimate, factors such as risk, uncertainty and time value of money related to contingencies are takeninto account. If the time value of money has a significant impact, the best estimate is determined by discounting the relevantfuture cash outflows.If there is a continuous range of expenditure required and the probability of various outcomes within this range is the same,the best estimate is recognized according to the middle value within this range; in other cases, the best estimates are handledas follows:
? When a contingency involves a single item, the best estimate is recognized by the most possible amount.? When a contingency involves more than one item, the best estimate is recognized according to a variety of possible
outcomes and related probabilities.When all or some of the expenses necessary for the liquidation of an estimated liabilities is expected to be compensated by athird party, the compensation shall be separately recognized as an asset only when it is virtually certain that thereimbursement will be obtained. Besides, the amount recognized for the reimbursement shall not exceed the book value ofthe estimated liabilities.The Company reviews the book value of the estimated liabilities on the balance sheet date, and if there is conclusive evidencethat the book value cannot reflect the current best estimate, it shall adjust the book value according to the current bestestimate.
37. Share-based payment
The Company's share-based payment refers to a transaction in which the Company grants equity instruments or undertakesequity-instrument-based liabilities in return for services from employee or other parties. The Company's share-basedpayments shall consist of equity-settled share-based payments and cash-settled share-based payments.
1) Equity-settled share-based payments and equity instruments
Where the equity-settled share-based payment is exchanged for the services provided by the employee, it shall be measured atthe fair value of the equity instrument granted to the employee. For share-based payment transactions with exercisable rightsimmediately after the grant, it shall be included in the relevant costs or expenses in accordance with the fair value of theequity instrument on the grant date, and the capital reserves shall be increased accordingly. For the share-based paymenttransaction where the service within the waiting period is completed after the grant or specified performance conditions aremet, on every balance sheet date of the waiting period, the Company shall include the service obtained at the current periodinto relevant costs or expenses according to the fair value of the grant date on the basis of the best estimate of the number ofequity instruments with exercisable rights, and increase the capital reserve accordingly.If the terms of the equity-settled share-based payment are modified, the services acquired are recognized at least in terms ofthe unmodified terms. In addition, any modification that increases the fair value of the equity instrument granted, or that isbeneficial to the employee at the date of modification, recognizes an increase in the acquisition of services.During the waiting period, if the granted equity instrument is canceled, the Company will treat the canceled equity instrumentas the accelerated exercise of power, and immediately include the balance that shall be recognized in the remaining waitingperiod into the current profit and loss, and simultaneously confirm the capital reserve. However, if a new equity instrument isgranted and the new equity instrument granted is deemed to be a replacement for the cancelled equity instrument on the grantdate, the granted replacement equity instrument will be handled in the same manner as any amendment to the terms andconditions of the original equity instrument.
2) Cash-settled share-based payments and equity instrument
The cash-settled share-based payments will be measured according to the fair value of the liability confirmed basing on theshares borne by the Company and other equity instruments. For share-based payment transactions with exercisable rightsimmediately after the grant, the Company shall include it in the relevant costs or expenses in accordance with the fair valueof the equity instrument on the grant date, and the liabilities shall be increased accordingly. If the rights can only be exercisedafter the situation that service within the waiting period is completed and set performance is achieved, the service obtained inthe current period, according to the fair value of the liabilities borne by the Company, and basing on the best estimate for thecondition of exercising rights, will be recorded into relevant costs or expenses on each and every balance sheet date duringthe waiting period, and correspondingly recorded into the liabilities. Each and every balance sheet date and settlement beforerelevant liability settlement, the fair value of liability will be remeasured, of which changes occurred will be counted into thecurrent period.If the Company modifies the terms and conditions of the cash-settled share-based payment agreement settled in cash tochange it to equity-settled share-based payment, on the date of modification (whether during or after the waiting period), theCompany will measure the equity-settled share-based payment according to the current fair value of the granted equityinstrument, and include the services acquired in the capital reserve. At the same time, it shall terminate the recognition ofliabilities recognized on the modification date for the cash-settled share-based payment, with the difference recorded into thecurrent profit and loss. If the waiting period is extended or shortened due to the modification, the Company will carry outaccounting treatment according to the modified waiting period.
38. Preferred shares, perpetual bonds and other financial instruments
At the time of initial recognition, the Company classifies the financial instrument or its components as a financial asset,financial liability or equity instrument based on the terms of the contract and the economic substance reflected in the issuedpreferred stock / perpetual bond, and not solely in legal form.In case that the financial instrument such as perpetual bond / preferred stock issued by the Company meet one of thefollowing conditions, it will be classified as financial liabilities at the time of initial recognition in whole or in part:
(1) There are contractual obligations which the Company cannot unconditionally avoid fulfilling by delivering cash or
other financial assets;
(2) It contains contractual obligations of delivering a variable number of its own equity instruments for settlement;
(3) It contains derivative instrument (such as equity transfer, etc.) that is settled with its own equity, and such derivative
instrument does not exchange a fixed number of its own equity instruments for a fixed amount of cash or other financialassets for settlement;
(4) There are contract clauses that indirectly form contractual obligations;
(5) When the issuer liquidates, the perpetual bonds are in the same order of liquidation as the ordinary bonds and other
debts issued by the issuer.In case that the financial instrument such as perpetual bond / preferred stock issued by the Company does not meet one of theabove conditions, it will be classified as equity instrument at the time of initial recognition in whole or in part.
39. Income
Accounting policies for income recognition and measurement
Accounting policies for income recognition and measurementThe Company has fulfilled its contractual obligations to recognize income when the customer acquires control of the relevantgoods or services. Obtaining control of the relevant goods or services is the ability to dominate the use of the goods orservices and gain almost all economic benefits from them.If the contract contains two or more performance obligations, the Company shall, on the commencement date of the contract,apportion the transaction price to each individual performance obligation according to the relative proportion of theindividual selling price of the goods or services committed by each individual performance obligation. The Company'sincome shall be measured according to the transaction price apportioned to each individual performance obligation.The transaction price means the amount of consideration that the Company is expected to be entitled to collect for the transferof goods or services to the customer, excluding payments collected on behalf of third parties and amounts expected to bereturned to the customer. The Company determines the transaction price in accordance with the terms of the contract and incombination with its past practices, and in determining the transaction price, it takes into account the impact of variableconsideration, material financing elements in the contract, non-cash consideration, consideration payable to customers andother factors. The Company determines the transaction price including the variable consideration by an amount not exceedingthe amount of accumulated recognized income which is highly unlikely to be materially reversed when the relevantuncertainty is eliminated. If there is a material financing component in the contract, the Company shall determine thetransaction price based on the amount payable in cash when the customer acquires control of the goods or services, and shallamortize the difference between the transaction price and the contract consideration by the effective interest method duringthe contract period. If one of the following conditions is satisfied, it shall be deemed to have performed its performanceobligation within a certain period of time; otherwise, it shall be deemed to have performed its performance obligation at acertain time point:
? The customer obtains and consumes the economic benefits arising from the Company's performance at the same time ofthe Company's performance.? The customer can control the goods under construction during the Company's performance.? The goods produced by the Company during the performance are of irreplaceable use, and the Company shall be entitledto receive payment for the accumulated part of the performance completed so far during the whole contract period.For the performance obligations performed within a certain period of time, the Company shall recognize the income inaccordance with the performance progress during that period, except where the performance progress cannot be reasonablydetermined. Taking into account the nature of the goods or services, the Company will use the output method or input methodto determine the performance schedule. If the performance schedule cannot be reasonably determined and the cost alreadyincurred is expected to be compensated, the Company shall recognize the income according to the cost already incurred untilthe performance schedule can be reasonably determined.For performance obligations performed at a certain time point, the Company recognizes income at the time point when thecustomer acquires control of the relevant goods or services. In determining whether the customer has acquired control ofgoods or services, the Company considers the following indications:
? The Company has the current collection right for the goods or services, that is, the customer has the current paymentobligation for the goods or services.? The Company has transferred legal ownership to the goods to the customer, that is, the customer has legal ownership of
the goods.? The Company has physically transferred the goods to the customer, that is, the customer has physically possessed the
goods.? The Company has transferred the main risk and remuneration in the ownership of the goods to the customer, that is, the
customer has acquired the main risk and remuneration in the ownership of the goods.? The customer has accepted the goods or services, etc. Specific principles of recognition of income from selling goods:
(1) General foreign sales: recognize the income after commodity inspection, customs declaration and shipment of goods
(the Company's export income settlement mainly adopts FOB and CIF methods. For a very small number of other settlementmethods, such as for those adopting EXW terms, the buyer designates carrier door-to-door delivery as the time point ofrecognition of product sales revenue; for those adopting FCA terms, the delivery of products to the carrier designated by thebuyer shall be the time point of recognition of product sales revenue; for those adopting the DDP/DDU terms, the delivery ofproducts to the destination designated by the buyer shall be the time point of recognition of product sales revenue).
(2) General domestic sales: the recognition time of sales revenue is based on the customer's confirmation of receipt (that is,
the income is recognized after the customer signs for the receipt, but if the contract stipulates that acceptance is needed, theincome will be recognized after acceptance by the customer).
(3) E-commerce business (B2C): the recognition time of sales revenue is based on the customer's confirmation of the
completion of the transaction (i.e., the income is recognized when the customer initiatively confirms receipt of the goods onthe e-commerce platform and when the e-commerce platform automatically confirms receipt of the goods within a certainperiod of time after delivery, whichever is earlier).
(4) Store sales model: sales revenue is recognized according to settlement time and price (that is, the income is recognized
after the store salesperson receives payment and delivers the goods to the customer).
(5) Consignment mode: the Company delivers the goods to the place designated by the agent, and recognizes the income
after receiving the sales list and checking it according to the time of reconciliation agreed in the contract.Differences in income recognition accounting policies caused by different business modes for the same businessN/A
40. Government subsidies
1) Type
Government subsidies refer to the monetary assets or non-monetary assets obtained free of charge by the Company from thegovernment, and are classified into asset related government subsidies and the income related government subsidies.Government subsidies related to assets refer to the government subsidies obtained by the Company for the purchase andconstruction of long-term assets or the formation of long-term assets by other means. Government subsidies related to incomerefer to government subsidies in addition to government subsidies related to assets.The Company's classifying government subsidies as related to assets is subject to the following specific criteria: thegovernment documents clearly stipulate the use of funds, and the expected use direction of the funds is expected to formrelated assets;The Company's classifying government subsidies as related to income is subject to the following specific criteria: thegovernment documents do not stipulate the use purpose, and the expected use direction of the funds is to supplement workingcapital;If the subsidy object is not clearly specified in the government documents, the judgment basis for the Company to classify thegovernment subsidy as related to assets or related to income is as follows: except that the Company designates its purpose asrelated to assets, it will be included in the current profit and loss.
2) Recognition time point
Government subsidies will be recognized when the conditions attached to them are met and received by the Company.
3) Accounting treatment
The government subsidies related to assets write down the book value of the relevant assets or is recognized as deferredincome. If it is recognized as deferred income, it shall be recorded into the current profit and loss by stages in accordancewith reasonable and systematic methods during the service life of the relevant assets (if it is related to the daily activities ofthe Company, it shall be recorded into other income; those not related to the daily activities of the Company shall be includedin non-operating income);
If the government subsidy related to the income is used to compensate the Company's related costs, expenses or losses in thefollowing period, it shall be recognized as deferred income and recorded into the current profit and loss during the period ofrecognition of the relevant costs, expenses or losses (if it is related to the Company's daily activities, it shall be recorded intoother income; if it is not related to the daily activities of the Company, it shall be included in non-operating income) or writedown relevant costs, expenses or losses; those used to compensate the relevant costs, expenses or losses incurred by theCompany shall be directly recorded into the current profit and loss (if it is related to the daily activities of the Company shallbe recorded into other income; if it is not related to the daily activities of the Company, it shall be included in non-operatingincome) or write down relevant costs, expenses or losses.The interest subsidy on policy-based preferential loans obtained by the Company shall be accounted for under the followingtwo conditions:
(1) If the finance department allocates the interest subsidy fund to the lending bank, and the lending bank provides the loan
to the Company at the policy-based preferential interest rate, the Company shall take the loan amount actually received as theentry value of the borrowing, and calculate the relevant borrowing cost in accordance with the loan principal and the policy-based preferential interest rate.
(2) If the finance department allocates the interest subsidy fund directly to the Company, the Company will offset the
corresponding interest subsidy against the related borrowing costs.
41. Deferred income tax assets / deferred income tax liabilities
The income tax includes current income tax and deferred income tax. Except for the income tax arising from the businesscombination and the transaction or item directly booked into the owners' equity (including other comprehensive income), theCompany will record the current income tax and deferred income tax into the current profit and loss.Deferred income tax assets and deferred income tax liabilities shall be calculated and recognized on the basis of thedifference (temporary difference) between the tax basis of the assets and liabilities and their book value.For the deferred income tax assets recognized through deductible temporary difference, it is limited to the amount of taxableincome which is likely to be obtained to offset the deductible temporary difference in the future period. For the deductibleloss and tax deduction that can be carried forward to the subsequent year, the corresponding deferred income tax assets arerecognized within the limit of the future taxable income amount that is possibly obtained to deduct the deductible loss and taxdeduction.For taxable temporary differences, except in special circumstances, the deferred income tax liability is recognized.Special circumstances in which deferred income tax assets or deferred income tax liabilities are not recognized include:
Initial recognition of goodwill;Transaction or item that is neither a business combination nor does it affect accounting profit and taxable income (ordeductible loss) at the time of occurrence.For the taxable temporary difference related to the investment of the subsidiaries, associated enterprises and joint ventures,relevant deferred income tax liabilities are not recognized, unless the Company can control the temporary difference write-back time and the temporary difference will probably not be written back in the foreseeable future. For the deductibletemporary difference related to the investment of the subsidiaries, joint ventures and cooperative enterprises, deferred incometax assets are recognized when it is likely to write back the temporary difference in the foreseeable future or to obtain theincome tax payable used to offset the deductible temporary difference in the future.The deferred income tax assets and deferred income tax liabilities are measured on the balance sheet date according to the taxlaw and the applicable tax rate in the period of expected recovery of relevant assets of liquidation of relevant liabilities.On the balance sheet date, the Company reviews the book value of the deferred income tax assets. If it is likely not to obtainsufficient income tax payable to deduct the interests of the deferred income tax assets in the future, the book value of thedeferred income tax assets is written down. If it is likely to obtain sufficient income tax payable, the amount written down iswritten back.
When the Company has the legal right to settle with net amount and intends to settle with net amount or obtain the assets andliquidate the liabilities simultaneously, the income tax assets and income tax liabilities in the current period are presented bythe net amount after offset.On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are listed in net amount afteroffset when both of the following conditions are met:
The tax payer has the legal right to settle the current income tax assets and current income tax liabilities on a net basis;The deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the same tax collection and management department from the same subject of tax payment or from different subjects of tax payment but thesubject of tax payment involved intends to settle the current income tax assets and liabilities with the net amount or obtain theassets and liquidate the liabilities simultaneously in each future important period when the deferred income tax assets andliabilities are written back.
42. Leased
(1) Accounting treatment method of operating lease
Lease refers to a contract in which the lessor transfers the right to use the asset to the lessee within a certain period of time tofor consideration. On the commencement date of the contract, the Company assesses whether the contract is a lease orcontains a lease. If a party to the contract transfers the right to control the use of one or more identified assets within a certainperiod in exchange for consideration, the contract is a lease or contains a lease.If a contract contains several separate leases information, the Company will split the contract and conduct accountingtreatment for each of the separate leases. When a contract contains both lease and non-lease information, the lessee and thelessor shall separate lease information from and non-lease information.For rent concessions, such as rent reduction and deferred payment, directly caused public health events and agreed on theexisting lease contracts, where the following conditions are satisfied, the Company shall adopt a simplified method for alllease options, and shall not assess on whether there is a lease change or reevaluate the lease classification:
The lease consideration after the concession is reduced or essentially unchanged compared with that before the concession,where the lease consideration can not be discounted or discounted at the discount rate before concession;The concession is only made for lease payments payable before June 30, 2022; If the lease payments payable after June 30,2022 is increased, it shall not affect the condition satisfaction; If the lease payments payable after June 30, 2022 is decreased,it shall not satisfy this condition; The other terms and conditions of the lease were found to be without significant changeafter considering qualitative and quantitative factors.
① The Company acts as the lessee:
1) Right-of-use assets
On the commencement date of the lease period, the Company recognizes right-of-use assets for leases other than short-termleases and leases of low-value assets. The right-of-use assets is initially measured at cost. The cost includes:
The initial measurement amount of the lease liabilities;If there is a lease incentive for the lease payment paid on or before the start of the lease term, the amount of the granted leaseincentive shall be deducted;
The initial direct expenses incurred by the Company;Costs expected to be incurred by the Company to disassemble and remove a leased asset, restore the site where the leasedasset is located, or restore the leased asset to the condition agreed upon under the terms of the lease (excluding costs incurredto produce inventory).The Company subsequently withdraws depreciation of right-of-use assets with the straight-line method. Where it can bereasonably determined that the ownership of the leased assets can be acquired upon the expiration of the lease term,depreciation shall be calculated and withdrawn by the Company within the service life of the leased assets; Otherwise, thedepreciation shall be calculated and withdrawn within a shorter period of the lease term and the service life of the leasedassets.The company determines whether the right-of-use asset has been impaired in accordance with the principles described inNote "V. 31. Long-term assets impairment", and conducts accounting treatment for the identified impairment losses.
2) Lease liabilities
On the commencement date of the lease period, the Company recognizes lease liabilities for leases other than short-termleases and leases of low-value assets. Lease liabilities are initially measured at the present value of outstanding leasepayments. Lease payments include:
Fixed payments (including actual fixed payments), if there is lease incentive, the relevant amount of lease incentive shall bededucted;Variable lease payments that depend on an index or rate;The amount estimated to be paid based on the residual value of the guarantee provided by the Company;The exercise price of the purchase option, provided that the Company reasonably determines that the option will be exercised;The amount to be paid to exercise the option to terminate the lease, provided that the lease term reflects that the Companywill exercise the option to terminate the lease.The Company adopts the interest rate implicit in the lease as the discount rate. However, if the interest rate implicit in thelease cannot be reasonably determined, the incremental borrowing interest rate of the Company will be adopted as thediscount rate.The Company calculates the interest expense of the lease liability during each period of the lease term at a fixed periodic rate,and includes it in the current profit and loss or the cost of related assets.Variable lease payments that are not included in the measurement of the lease liabilities shall be included in current profit orloss or the cost of the related asset when they are actually incurred.After the commencement date of the lease term, in case of the following circumstances, the Company shall remeasure thelease liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use assets has been reducedto zero, but the lease liabilities still need to be further reduced, the difference shall be included in the current profit and loss:
In case of any change in the appraisal results of the purchase option, lease renewal option or termination option, or the actualexercise of the aforementioned options is inconsistent with the original appraisal result, the Company shall remeasure thelease liability according to the present value which is calculated based on the changed lease payment and the revised discountrate;In case of any change in substantial fixed payment, the estimated payable amount of the residual value of the guarantee, orthe index or ratio used to determine the lease payment, the Company shall remeasure the lease liability according to thepresent value which is calculated based on the changed lease payment and the revised discount rate. However, where thechanges in lease payment results from the change in floating interest rate, a revised discount rate will be used for calculationof the present value.
3) Short-term leases and low-value asset leases
The Company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and low-value assetleases, and includes the relevant lease payments in the current profit and loss or related asset costs on a straight-line basisover each period of the lease term. Short-term leases refer to the leases with a lease term of not more than 12 months andexcluding purchase options on the commencement date of the lease term. Low-value asset leases refers to the leases with alower value when the single leased asset is a new asset. Where the Company subleases or expects to sublease the leasedassets, the original lease will not be a low-value asset lease.
4) Lease changes
In case of any lease change that meets the following conditions, the Company shall treat the lease change as a separate leasefor accounting treatment: the lease change expands the lease scope by adding the right to use one or more leased assets;The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease uponadjustment based on the contract.If the lease change is not accounted for as a separate lease, on the effective date of the lease change, the Company shallreallocate the consideration of the contract after the change, redetermine the lease term, and remeasure the lease liabilityaccording to the present value which is calculated based on the changed lease payment and the revised discount rate.If the lease change leads to the narrowing of the lease scope or the shortening of the lease term, the Company shall reduce thebook value of the right-of-use asset accordingly, and credit the relevant gains or losses on partial or complete termination ofthe lease into the current profit and loss. If other lease changes result in re-measurement of lease liabilities, the Companyshall adjust the book value of the right-of-use asset accordingly.
5) Rent concessions related to public health events
If the simplified method of rent concessions related to public health events is adopted, the Company will not assess whetherthere is any lease change, continues to calculate the interest expense of the lease liability at the same discount rate as thatbefore the concession and include it in the current profit and loss, and continues to withdraw the depreciation of the right-of-use asset with the same method as that before the concession. In case of rent reduction or exemption, the Company will treatthe reduced rent as variable lease payment amount. When the original rent payment obligation is relieved by reaching aconcession agreement, the Company will offset the relevant asset costs or expenses by the undiscounted amount or theamount discounted at the discount rate before concession, and adjust the lease liabilities accordingly; In case of delayedpayment of rent, the Company will offset the lease liabilities recognized in the previous period upon actual payment.For short-term leases and low-value asset leases, the Company will continue to credit the original contract rent into relevantasset costs or expenses into the same manner as that before the concession. In case of rent reduction or exemption, theCompany will treat the rent reduced as variable lease payment amount and offset the relevant asset costs or expenses duringthe reduction or exemption period; In case of deferred payment of rent, the Company will recognize the rent payable asaccount payable in the original payment period, and offset the account payable recognized in the previous period upon actualpayment.
② The Company acts as the lessor:
The Company classifies leases as finance leases and operating leases at the commencement date of the lease term. Financeleases refers to the leases where almost all risks and rewards related to the ownership of leased assets have been substantivelytransferred regardless of whether the ownership is eventually transferred or not. Operating leases refer to leases other thanfinancial leases. When the Company acts as a sublease lessor, sublease classification will be made based on the right-of-useasset arising from the original lease.
1) Accounting for operating lease
The lease receipts from operating lease are recognized as rental income on a straight-line basis over each period of the leaseterm. The Company capitalizes the initial direct expenses incurred in relation to operating leases, which are amortized andincluded in the current profit and loss on the same basis as the rental income is recognized during the lease term. The variablelease payments not credited into lease receipts shall be included into current profit or loss or when they are actually incurred.In case of any change in the operating lease, the Company shall treat it as a new lease for accounting treatment from theeffective date of the change, and the advance receipts or lease receivables related to the lease before the change shall bedeemed to be the amount received for the new lease.
2) Accounting for finance lease
On the commencement date of the lease term, the Company recognizes finance lease receivables for finance leases andterminates the recognition of the finance lease assets. When the Company initially measures the finance lease receivables, thenet lease investment is regarded as the entry value of the finance lease receivables. The net lease investment is the sum of theunguaranteed residual value and the present value of the lease receipts that have not been received at the commencement dateof the lease, discounted at the interest rate implicit in the lease.The Company calculates and recognizes the interest income during each period of the lease term at a fixed periodic rate. Thederecognition and impairment of finance lease receivables shall be accounted for in accordance with Note "V. 10. Financialinstruments".The variable lease payments that are not included in the measurement of net lease investment shall be included in currentprofit or loss or when they are actually incurred.In case of any lease change that meets the following conditions, the company shall treat the change as a separate lease foraccounting treatment: the change expands the lease scope by adding the right to use one or more leased assets;The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease uponadjustment based on the contract.In case that the change of a financial lease is not accounted for as a separate lease, the Company shall deal with the changedlease under the following circumstances:
If the change takes effect on the commencement date of the lease term, and the lease is classified as an operating lease, theCompany will account for it as a new lease from the effective date of the lease change, and take the net lease investmentbefore the effective date of the lease change as the book value of the leased asset;If the change takes effect on the commencement date of the lease term, and the lease is classified as a financial lease, theCompany will conduct accounting treatment according to the policy in Note "V. 10. Financial instruments" regarding themodification or renegotiation of contracts.
3) Rent concessions related to public health events
If the change takes effect on the commencement date of the lease term, and the lease is classified as an operating lease, theCompany will account for it as a new lease from the effective date of the lease change, and take the net lease investmentbefore the effective date of the lease change as the book value of the leased asset;If the change takes effect on the commencement date of the lease term, and the lease is classified as a financial lease, theCompany will conduct accounting treatment according to the policy in Note "V. 10. Financial instruments" regarding themodification or renegotiation of contracts.
③ Sale-and-leaseback transaction
The Company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale in accordancewith the principles described in the Note "V. 39. Revenue".
1) As a lessee
If the transfer of an asset in a sale-and-leaseback transaction is a sale, the Company, as the lessee, measures the right-of-useasset resulting from the sale-and-leaseback at the portion of the original asset's book value that relates to the right to useacquired by the leaseback, and recognizes a gain or loss related to the right transferred to the lessor only; if the transfer of anasset in a sale-and-leaseback transaction is not a sale, the Company, as the lessee, continues to recognize the transferred assetand at the same time recognizes a financial liability equal to the transfer income. Please refer to the Note "V. 10 Financialinstruments" for the accounting treatment of financial liabilities.
2) As a lessor
If the transfer of assets in a sale-and-leaseback transaction is a sale, the Company, as a lessor, accounts for the purchase of theassets, and accounts for the lease of the assets in accordance with the aforementioned policy of "2. The Company as a lessor";if the transfer of assets in a sale-and-leaseback transaction is not a sale, the Company, as a lessor, does not recognize thetransferred assets, but recognizes a financial asset equal to the transfer income. Please refer to the Note "V. 10 Financialinstruments" for the accounting treatment of financial assets.
(2) Accounting treatment method of finance lease
43. Other significant accounting policy and accounting estimate
1) Discontinued operation
Termination of operation is a separate component that meets one of the following conditions and has been disposed of orclassified into the held for sale category by the Company:
(1) The component represents an independent principal business or an independent principal area of operation;
(2) The component is part of an associated plan proposed to dispose of an independent principal business or an
independent principal area of operation;
(3) The component is a subsidiary acquired exclusively for resale.
2) Hedge accounting
(1) Classification of hedging
1) A fair value hedge refers to a hedge of the fair value change risk of an asset or liability that has been recognized and a
certain commitment that has not been recognized (except foreign exchange risk).
2) A cash flow hedge refers to a hedge of the risk of changes in cash flow arising from a particular type of risk relating to a
recognized asset or liability, an anticipated transaction that is likely to occur, or the foreign exchange risk contained in anunrecognized firm commitment
3) A hedge of net investment in overseas operations refers to a hedge of foreign exchange risks of net investment of overseas
operations. Net investment in overseas operations refers to the equity share of the enterprise in the net assets of overseasoperations.
(2) Designation of hedging relationship and identification of hedging effectiveness
At the beginning of the hedging relationship, the Company has a formal designation of the hedging relationship and hasprepared formal written documents on the hedging relationship, risk management objectives and hedging strategies. Thedocuments specify the nature and quantity of the hedging instrument, the nature and quantity of the hedged items, the natureof the hedged risk, type of hedging, and the Company's evaluation of the effectiveness of the hedging instrument. Hedgingeffectiveness refers to the degree to which the change in the fair value or cash flow of the hedging instrument can offset thechange in the fair value or cash flow of the hedged item caused by the hedged risk.The Company continuously evaluates the effectiveness of hedging and judges whether the hedging meets the requirements ofhedging accounting for effectiveness during the accounting period in which the hedging relationship is designated. If it is notsatisfied, the hedging relationship shall be terminated.
The application of hedge accounting shall meet the following requirements for the effectiveness of hedging:
1) There is an economic relationship between the hedged item and the hedging instrument.
2) In the value changes caused by the economic relationship between the hedged item and the hedging instrument, the
influence of credit risk does not play a dominant role.
3) Adopting the appropriate hedge ratio will not cause the imbalance between the relative weight of the hedged item and the
hedging instrument, thus generating accounting results inconsistent with the hedge accounting objectives. If the hedge ratio isno longer appropriate, but the hedging risk management objectives have not changed, the number of hedged items or hedginginstruments shall be adjusted to make the hedge ratio meet the requirements of effectiveness again.
(3) Hedge accounting treatment methods
1) Fair value hedging
Changes in the fair value of hedge derivative instruments are recorded in the current profit and loss. Changes formed by thefair value of the hedged item due to the hedging risk shall be included in the current profit and loss, and the book value of thehedged item shall be adjusted simultaneously.For fair value hedging related to financial instruments measured at amortized cost, the adjustments to the book value of thehedged item are amortized during the remaining period between the adjustment to the due date and recorded in the currentprofit and loss. Amortization under the effective interest rate method may commence immediately after the book valueadjustment and shall not be later than the adjustment of fair value changes in the termination of hedging risks by the hedgeditem.If the hedged item is terminated, the unamortized fair value is recognized as the current profit and loss.Where the hedged item is a firm commitment that has not been recognized, the accumulative change in the fair value of thefirm commitment caused by the hedging risk is recognized as an asset or liability, and the relevant gains or losses arerecorded into the current profits and losses. Changes in the fair value of hedging instruments are also recorded in the currentprofit and loss.
2) Cash flow hedging
The part of the gain or loss of the hedging instrument that belongs to the effective hedging shall be directly recognized asother comprehensive income, while the part that belongs to the invalid hedging shall be recorded into the current profit andloss.If the hedged transaction affects the current profit and loss, such as when the hedged financial income or financial expense isrecognized or when the expected sale occurs, the amount recognized in other comprehensive income will be transferred to thecurrent profit and loss. If a hedged item is the cost of a non-financial asset or non-financial liability, the amount originallyrecognized in other comprehensive income amount is transferred out and recorded into the amount of initial recognition ofthe non-financial asset or non-financial liability (or the amount originally recognized in other comprehensive income istransferred out during the same period as the non-financial asset or non-financial liability affecting the profit and loss, andrecorded into the current profit and loss).If the expected transaction or firm commitment is not expected to occur, the accumulated gains or losses of the hedginginstrument previously recorded in other comprehensive income are transferred out and recorded in the current profit and loss.If the hedging instrument has expired, been sold, the contract terminated or exercised (but not replaced or renewed), or thedesignation of the hedging relationship is withdrawn, the amount previously recorded in other comprehensive income is nottransferred out until the anticipated transaction or firm commitment affects the current profit or loss.
3) Hedging of net investment in overseas operations
The hedging of net investment in overseas operations, including the hedging of monetary items that are part of the netinvestment, shall be treated similarly to the cash flow hedging. In the gain or loss of the hedging instrument, the part that isrecognized as effective hedging is recorded in other comprehensive income, while the part that is invalid hedging isrecognized as current profit and loss. When disposing of overseas operations, any accumulated gains or losses previouslyrecorded in other comprehensive income will be transferred out and recorded into current profit and loss.
3) Segmental reporting
The Company determines the operating segments based on the internal organizational structure, management requirementsand internal reporting system, and determines the reporting segments based on the operating segments and discloses theinformation of the segments.Operating segments refer to the components of the Company that meet the following conditions at the same time: (1) Thecomponent is able to generate revenue and incur expenses in its daily activities; (2) The management of the Company canregularly evaluate the operating results of the component to determine the allocation of resources to it and evaluate itsperformance; (3) The Company can obtain relevant accounting information such as the financial position, operating resultsand cash flow of the component. If two or more operating segments have similar economic characteristics and meet certainconditions, they may be merged into one operating segment.
4) Repurchase of the Company's shares
If the Company repurchases its shares due to the reduction of its registered capital, it shall debit the "Treasury Stock" andcredit the "Bank Deposits" and other subjects according to the amount actually paid. When the treasury stock is canceled, thetotal par value of the shares calculated according to the par value of the shares and the number of canceled shares shall bedebited to the "Share Capital", and the book balance of the canceled treasury stock shall be credited to the "Treasury Stock".The premium originally recorded in the capital surplus at the time of stock issuance shall be offset according to the difference,and the "Capital Surplus - capital stock premium" shall be debited. The part of the repurchase price exceeding the aboveoffset of "Share Capital" and "Capital Surplus - capital stock premium" shall be debited to the "Surplus Reserves" and "ProfitDistribution - undistributed profits" and other subjects in turn. If the repurchase price is lower than the share capitalcorresponding to the repurchased shares, the difference between the book balance of the canceled treasury stock and theoffset share capital will be treated as an increase in capital stock premium, and debit to the "Share Capital" according to thepar value of the share capital corresponding to the repurchased shares, credit the "Treasury Stock" according to the bookbalance of the canceled treasury stock, and credit the "Capital Surplus - capital stock premium" according to the difference.
44. Significant accounting policy and accounting estimate change
(1) Changes in significant accounting policies
?Applicable ?Not applicable
Content and reasons of changes in accounting policies
Remark
| Approval procedures | |
| On November 30, 2022, the Ministry of Finance promulgated and implemented the |
Interpretation of Accounting Standards for Business Enterprises No.16
come into effect f
| rom January 1, 2023. In case of taxable temporary differences and |
deductible temporary differences arising from the lease liabilities and right-to-
liabil
| ities related to the confirmed abandonment obligations and the corresponding related assets at the beginning of the earliest period of first financial statement presentation, the |
Company will adjust the financial statements with cumulative impact to presen
accordance with this provision and the provisions of
| Accounting Standards for Business Enterprises No.18 - Income Tax. |
(2) Changes in major accounting estimates
?Applicable ?Not applicable
(3) Adjustment of relevant items in financial statements at the beginning of first implementation year as a result of first
implementation of new accounting standards from 2023?Applicable ?Not applicable
Adjustment description
1. Consolidated Balance Sheet
| Item | December 31, 2022 | January 1, 2023 | Adjusted figure |
| Deferred income tax assets | 196,993,751.80 | 322,582,125.98 | 125,588,374.18 |
| Deferred income tax liabilities | 133,677,102.81 | 244,258,589.21 | 110,581,486.40 |
| Taxes payable | 322,255,874.61 | 322,101,244.04 | -154,630.57 |
| Undistributed profit at the beginning of the year |
6,810,953,829.30
6,826,115,347.65 15,161,518.35
2. Balance sheet of parent company
Item
| Item | December 31, 2022 | January 1, 2023 | Adjusted figure |
| Deferred income tax assets | 38,862,577.13 | 50,466,779.11 | 11,604,201.98 |
| Deferred income tax liabilities | 1,510,415.96 | 12,594,840.31 | 11,084,424.35 |
| Taxes payable | 145,381,044.31 | 145,900,821.94 | 519,777.63 |
45. Others
NA
VI. Taxation
1. Main tax categories and tax rates
| Tax category | Taxation basis | Tax rate |
Added value tax
13%,9%,6%,3%,0%
| Calculate the substituted money on VAT on the basis of the income from selling goods and taxable services according to the tax law. After deduction of the withholdings on VAT allowed to deduct in current period, the balance is the VAT payable | ||
| Consumption tax | N/A | N/A |
| Urban maintenance and construction tax | Levied by actual paid value added tax (including the exemption part) and consumption tax |
7%,5%
| Corporate income tax | Levied by income tax payable | 25%,20%,16.5%,15% |
Education surcharge
3%
If there are taxpayers with different enterprise income tax rates, the disclosure statement shall present
| Name of taxpayer | Income tax rate |
| Winner Medical, Winner Medical (Huanggang), Winner Medical (Tianmen), Winner Medical (Jingmen), Winner Medical (Chongyang), Winner Medical (Jiayu), Qianhai Purcotton, Winner Medical (Wuhan), Longterm Medical, Winner Guilin, Winner Medical (Hunan) |
15%
| Winner Medical (Hong Kong) | 16.5% |
| Hangzhou Shengyi, Xi'an Longtemu, Deqing Longterm, Ruian Medical Device | 20% |
2. Tax preference
(1) On December 23, 2021, according to the Notice on Publicizing the List of First Batch of High-tech Enterprises to be
Identified in Shenzhen in 2021 issued by the Leading Group Office of National High-tech Enterprise AccreditationAdministration, the Company passed the High-tech Enterprise Qualification Reexamination (Certificate No.:
GR202144202494). From 2021 to 2023, the corporate income tax can be paid at a preferential tax rate of 15.00%.
(2) According to the Notice on Publicizing the List of the Second Batch of High-tech Enterprises to be Identified in Hubei
Province in 2019, Winner Medical (Huanggang) was identified as the second batch of high-tech enterprises with thecertificate number of GR201942002414, and passed the qualification review of high-tech enterprises in 2022. WinnerMedical (Huanggang) is eligible to pay corporate income tax at a preferential rate of 15.00% from 2022 to 2024.
(3) Qianhai Purcotton was established on July 21, 2015, with its domicile located in Shenzhen Qianhai Shenzhen-Hong
Kong Cooperation Zone. According to the Notice of Enterprise Income Tax Preferential Policies and Preferential Directoryin Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone of Hengqin New Fujian PingtanComprehensive Experimental Area (C.S. [2014] No. 26) issued by the Ministry of Finance and State Taxation Administration,Qianhai Purcotton pays its corporate income tax at the tax rate of 15.00%.
(4) According to the Notice on Publicizing the List of Fourth Batch of High-tech Enterprises to be Identified in Hubei
Province in 2021 issued by the Leading Group Office of National High-tech Enterprise Accreditation Administration onDecember 23, 2021, Winner Medical (Jingmen) obtained the High-tech Enterprise Certificate (Certificate No.:
GR202142004475) on December 03, 2021. From 2021 to 2023, the corporate income tax can be paid at a preferential tax rateof 15.00%.
(5) According to the Notice on Publicizing the List of Fifth Batch of High-tech Enterprises to be Identified in Hubei
Province in 2021 issued by the Leading Group Office of National High-tech Enterprise Accreditation Administration onDecember 23, 2021, Winner Medical (Jiayu) obtained the High-tech Enterprise Certificate (Certificate No.:
GR202142005582) on December 17, 2021. From 2021 to 2023, the corporate income tax can be paid at a preferential tax rateof 15.00%.
(6) According to the Notice on Publicizing the List of Second Batch of High-tech Enterprises to be Identified in Hubei
Province in 2021 issued on December 15, 2021, Winner Medical (Chongyang) and Winner Medical (Tianmen) obtained theHigh-tech Enterprise Certificates (Certificate No.: GR202142000579, GR202142002367) on November 15, 2021. From 2021to 2023, the corporate income tax can be paid at a preferential tax rate of 15.00%.
(7) According to the Notice on Publicizing the List of Second Batch of High-tech Enterprises to be Identified in Hubei
Province in 2022 issued on November 9, 2022, Winner Medical (Wuhan) obtained the High-tech Enterprise Certificate(Certificate No.: GR202242002319) on November 9, 2022. From 2022 to 2024, the corporate income tax can be paid at apreferential tax rate of 15.00%.
(8) Zhejiang Longterm, which was recognized as a high-tech enterprise on November 13, 2017, obtained an updated high-
tech enterprise qualification certificate on December 1, 2020 to pay corporate income tax at a preferential tax rate of 15%with a validity period of three years until November 30, 2023.
(9) Hangzhou Shengyi, Xi'an Longtemu, Deqing Longterm are all small low-profit enterprises. From January 1, 2023 to
December 31, 2024, the part portion of annual taxable income not exceeding RMB 1 million shall be reduced by 25% andincluded into the taxable income, and corporate income tax shall be paid at the rate of 20%.
(10) Winner Medical (Hunan) was recognized as a high-tech enterprise in 2010 to pay corporate income tax at a preferential
tax rate of 15%. It obtained an updated high-tech enterprise qualification certificate on December 2, 2019 with a validityperiod of three years until December 1, 2022, passed the high-tech enterprise certification for the third time in 2022 to obtaina certificate with number of GR202243004478 and expiration date of December 12, 2025.
(11) Hunan Ruian Medical Device Technology Co., Ltd. is a small enterprise with small profits. From January 1, 2023 to
December 31, 2024, the part portion of annual taxable income not exceeding RMB 1 million shall be reduced by 25% andincluded into the taxable income, and corporate income tax shall be paid at the rate of 20%.
(12) On October 23, 2020, Winner Guilin passed the high-tech enterprise certification to obtain the high-tech enterprise
certificate with number of GR202045000476 and validity period of three years. The application for review has been providedin current period and is under review.
3. Others
N/A
VII. Notes to Items in Consolidated Financial Statements
1. Cash and cash equivalents
Unit: yuan
| Item | Closing Balance | Beginning balance |
| Cash on hand | 124,589.58 | 246,825.76 |
| Bank deposit | 4,235,674,316.66 | 4,169,305,311.41 |
| Other monetary capital | 107,397,421.14 | 357,325,441.73 |
| Total | 4,343,196,327.38 | 4,526,877,578.90 |
| Including: Total amount deposited abroad | 21,596,431.39 | 15,822,664.52 |
Other descriptionWherein, the breakdown of monetary funds that are restricted in use due to mortgages, pledges or freezes, restricted inwithdrawal due to centralized management of funds, as well as those deposited outside China with restrictions on repatriationof funds, is as follows:
Item Closing Balance
| Closing balance of the previous year | ||
| Deposit for bank acceptance bill* 1 | 8,340,000.00 | 7,428,000.00 |
| Letter of Credit deposit* 2 | 89,600,000.00 | 139,600,000.00 |
| Performance bond* 3 | 2,803,835.98 | 2,922,681.16 |
| Balance of other restricted monetary funds *4 | 6,012,252.24 | 6,104,939.57 |
| Total | 106,756,088.22 | 156,055,620.73 |
*1 Deposit for bank acceptance bill refers to the deposit deposited by Zhejiang Longterm to apply for bank acceptance bill.
*2 Letter of Credit deposit refers to the deposit made by Winner Medical (Tianmen) for international and domestic Letters ofCredit; the deposits deposited by Winner Medical for the domestic letters of credit to cover the payment to subsidiaries; thedeposits deposited by Shenzhen Purcotton for the domestic letters of credit to cover the payment to Winner Medical(Huanggang).*3 The performance bond refers to the bond deposited by Winner Medical (Hong Kong) for bidding transactions withhospitals; the bond deposited by Zhejiang Longterm for automatic transfer of electricity charges.*4 The balance of other restricted monetary funds refers to the receipt deposit of Winner Medical (Shenzhen); the balance ofspecial deposit accounts for restricted non-budget units opened by Shenzhen Purecotton in accordance with the regulations ofprepaid card issuance formulated by the Ministry of Commerce, and product deposit for the APP and mini program.
2. Tradable financial assets
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Financial assets measured at fair value of which the changes are included in current profit and loss |
3,623,520,946.56 4,378,789,960.23
| Including: | ||
| Bank financial products | 2,163,314,216.16 | 3,027,531,039.77 |
| Trust products | 1,460,206,730.40 | 1,351,258,920.46 |
| Including: | ||
| Total | 3,623,520,946.56 | 4,378,789,960.23 |
Other description:
3. Derivative financial assets
Unit: RMB
| Item | Closing Balance | Beginning balance |
Other description: N/A
4. Notes receivable
(1) Classified presentation of notes receivable
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Bank acceptance bill | 23,164,092.22 | 51,001,784.57 |
| Total | 23,164,092.22 | 51,001,784.57 |
Unit: RMB
Class
| Closing Balance | Beginning balance | ||
| Book balance | Provision for bad debt | ||
Book value
| Book balance | Provision for bad debt |
Book valueAmount Proportion Amount
Amount Proportion Amount
| Accruing proportion | Accruing proportion | ||||
| Including: | |||||
| Including: | |||||
If the bad debt provision of notes receivable is withdrawn according to the general model of expected credit loss, please referto the disclosure method of other receivables to disclose the relevant information of bad debt provision:
?Applicable ?Not applicable
(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: RMBClass Beginning balance
Closing BalanceAccrual
| Amount of change in current period | ||
| Recovered or reversed | ||
Write-off Others
Where the amount of bad debt provision recovered or reversed is important:
?Applicable ?Not applicable
(3) Notes receivable pledged by the Company at the end of the period
Unit: RMB
| Item | Pledged amount at the end of the period |
(4) Notes receivable endorsed or discounted by the Company at the end of the period and not expired yet on the balance
sheet date
Unit: RMBItem
at the end of the period
| Amount with recognition not |
terminated at the end of the
| period | ||
| Bank acceptance bill | 47,164,293.21 | 3,823,275.97 |
| Total | 47,164,293.21 | 3,823,275.97 |
(5) Notes transferred to accounts receivable by the Company at the end of the period due to failure of the drawer to
perform
Unit: RMB
| Item | Amount transferred to accounts receivable at the end of the period |
Other description
(6) Notes receivable actually written off at the current period
Unit: RMB
| Item | Amount written off |
Write-off of important notes receivable:
Unit: yuanUnit name
| Nature of notes receivable | Amount written off | Reasons for write-off | Write-off procedures performed | Whether the payments arise from related transactions |
Description of write-off notes receivable:
5. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: yuanClass
| Closing Balance | Beginning balance | ||||
| Book balance | Provision for bad debt | Book value | Book balance | Provision for bad debt | |
Book valueAmount
Amount
| Proportion | Accruing proportion |
Amount Proportion Amount
| Accruing proportion | ||
| Accounts |
receivableofprovision
9,836,375.05 1.15% 8,484,628.31 86.26% 1,351,746.74 2,811,067.30 0.28% 2,811,067.30 100.00% 0.00
| for bad debt by single item | |
| Including: | |
| Accounts | |
receivableofprovision
combinatio
| n |
844,384,317.48 98.85% 45,147,765.06 5.35% 799,236,552.42 984,485,837.09 99.72% 51,843,776.05 5.27% 932,642,061.04
| Including: | |
| Aging | |
analysis
844,384,317.48 98.85% 45,147,765.06 5.35% 799,236,552.42 984,485,837.09 99.72% 51,843,776.05 5.27% 932,642,061.04
| method | ||||||||||
| Total | 854,220,692.53 | 100.00% | 53,632,393.37 | 6.28% | 800,588,299.16 | 987,296,904.39 | 100.00% | 54,654,843.35 | 5.54% | 932,642,061.04 |
Provision for bad debt by single item:
Unit: yuanName
| Closing Balance | ||||
| Book balance | Provision for bad debt | Accruing proportion | Reasons for provision | |
| Customer I | 158,667.30 | 158,667.30 | 100.00% | Expected to be irrecoverable |
| Customer II | 1,170,400.00 | 1,170,400.00 | 100.00% | Expected to be irrecoverable |
| Customer III | 1,482,000.00 | 1,482,000.00 | 100.00% | Expected to be irrecoverable |
| Customer IV | 273,539.67 | 273,539.67 | 100.00% | Expected to be irrecoverable |
Customer V 6,751,768.08
5,400,021.34 79.98%
| Expected to be irrecoverable in full amount | ||||
| Total | 9,836,375.05 | 8,484,628.31 |
Provision for bad debt by combination: aging analysis method
Unit: RMB
Name
| Closing Balance | |||
| Book balance | Provision for bad debt | Accruing proportion | |
| Within 1 year | 818,380,736.08 | 40,919,036.81 | 5.00% |
| 1~2 years | 22,708,574.37 | 2,270,857.44 | 10.00% |
| 2~3 years | 1,328,997.73 | 398,699.32 | 30.00% |
| 3~4 years | 711,476.43 | 355,738.22 | 50.00% |
| 4~5 years | 255,498.02 | 204,398.42 | 80.00% |
| More than 5 years | 999,034.85 | 999,034.85 | 100.00% |
| Total | 844,384,317.48 | 45,147,765.06 | |
Description of the basis for determining the combination:
On June 30, 2023, the Company reviewed the appropriateness of the provision for bad debts of receivables in the previousyear according to the historical bad debt loss, and believed that the default probability has a strong correlation with the agingof accounts, and the account age is still a sign of whether the credit risk of the Company's receivables has significantlyincreased. Therefore, the Company's credit risk loss on June 30, 2023 is estimated based on the aging of accounts andestimated at the original loss ratio.If the bad debt provision of accounts receivable is withdrawn according to the general model of expected credit loss, pleaserefer to the disclosure method of other receivables to disclose the relevant information of bad debt provision:
?Applicable ?Not applicable
Disclosure by aging
Unit: RMB
| Aging | Closing Balance |
| Within 1 year (including 1 year) | 820,832,523.09 |
| 1~2 years | 23,234,954.34 |
| 2~3 years | 1,328,997.73 |
| More than 3 years | 8,824,217.37 |
| 3~4 years | 2,685,702.03 |
| 4~5 years | 2,331,147.74 |
| More than 5 years | 3,807,367.60 |
| Total | 854,220,692.53 |
(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: RMB
Class
Beginningbalance
Closing BalanceAccrual
| Amount of change in current period | ||
| Recovery or reversal Write-off | ||
Others
54,654,843.35 12,924,501.70 15,501,696.22 1,554,744.54 53,632,393.37
| Provision for bad debt of accounts receivable | |||||
| Total | 54,654,843.35 | 12,924,501.70 | 15,501,696.22 | 1,554,744.54 | 53,632,393.37 |
Where the amount of bad debt provision recovered or reversed is important:
Unit: RMB
| Unit name | Amount recovered or reversed | Recovery way |
(3) Accounts receivable actually written off at the current period
Unit: RMB
| Item | Amount written off |
Write-off of important accounts receivable:
Unit: RMBUnit name
| Nature of accounts receivable | Amount written off | Reasons for write-off | Write-off procedures performed | Whether the payments arise from related transactions |
(4) Accounts receivable with Top 5 ending balances by debtor
Unit: RMBUnit name
| Ending balance of accounts receivable | Proportion in total other ending balance of accounts receivable | Ending balance of bad debt provision | |
| First | 90,821,409.13 | 10.63% | 4,541,070.46 |
| Second | 39,016,368.88 | 4.57% | 1,950,818.44 |
| Third | 28,042,213.28 | 3.28% | 1,402,110.66 |
| Fourth | 24,783,503.09 | 2.90% | 1,239,175.15 |
| Fifth | 24,061,555.94 | 2.82% | 1,203,077.80 |
| Total | 206,725,050.32 | 24.20% |
(5) Accounts receivable derecognized due to transfer of financial assets
NA
(6) Amount of assets and liabilities formed by transferring accounts receivables and continuing involvement
NAOther description:
6. Amounts receivable financing
Unit: yuan
| Item | Closing Balance | Beginning balance |
| Notes receivable - bank acceptance bill | 38,279,923.83 | 93,093,113.79 |
| Total | 38,279,923.83 | 93,093,113.79 |
Changes in the increase and decrease of receivables financing and changes in the fair value in the current period?Applicable ?Not applicableIf the impairment provision of receivables financing is withdrawn according to the general model of expected credit loss,please refer to the disclosure method of other receivables to disclose the relevant information of impairment provision:
?Applicable ?Not applicableOther description:
2023 Semi-Annual Report
7. Advances to suppliers
(1) Presentation of advances to suppliers by aging
Unit: RMBAging
| Closing Balance | Beginning balance | |||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 130,557,434.98 | 96.41% | 226,208,813.98 | 98.32% |
| 1~2 years | 4,465,515.74 | 3.30% | 2,922,303.77 | 1.27% |
| 2~3 years | 375,839.85 | 0.28% | 948,358.84 | 0.41% |
| More than 3 years | 15,000.00 | 0.01% | ||
| Provision for bad debt | ||||
-854,203.50
| Total | 135,413,790.57 | 229,225,273.09 |
Reasons for non-timely settlement of important advances from customers with the aging more than 1 year:
(2) Advances to suppliers with Top 5 ending balances by prepayment object
Advance object Closing Balance
| Proportion in total ending balance of advances | ||
| First | 36,435,795.97 | 26.91% |
| Second | 5,122,543.20 | 3.78% |
| Third | 4,570,000.00 | 3.37% |
| Fourth | 4,207,018.68 | 3.11% |
| Fifth | 3,971,964.44 | 2.93% |
| Total | 54,307,322.29 | 40.10% |
Other description:
8. Other receivables
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Other receivables | 220,541,980.86 | 236,298,390.78 |
| Total | 220,541,980.86 | 236,298,390.78 |
(1) Interest receivable
1) Classification of interest receivable
Unit: RMB
| Item | Closing Balance | Beginning balance |
2) Important overdue interest
Unit: RMB
Borrower Closing Balance Overdue time Overdue reason
Other description:
3) Provision for bad debt
?Applicable ?Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit: RMB
Whether there is impairment and
its judgment basisProject (or invested unit)
| Project (or invested unit) | Closing Balance | Beginning balance |
2) Important dividends receivable with the aging more than 1 year
Unit: RMBProject (or invested unit)
Aging
| Closing Balance | Reason for non-recovery | Whether there is impairment and its judgment basis |
3) Provision for bad debt
?Applicable ?Not applicableOther description:
(3) Other receivables
1) Other receivables classified by nature
Unit: RMB
| Nature of payment | Ending book balance | Beginning book balance |
Compensation for investment and constructionproject of Heyuan Winner
224,655,320.00 224,655,320.00
| Compensation for investment and construction project of Heyuan Winner | ||
| Margin and deposit | 95,972,047.81 | 107,940,240.20 |
| Export drawback | 147,743.12 | |
| Employee pretty cash | 3,134,396.54 | 3,851,541.87 |
| Others | 17,093,646.50 | 20,322,649.47 |
| Total | 340,855,410.85 | 356,917,494.66 |
2) Provision for bad debt
Unit: RMB
Provision for bad debt
Stage 1Expected creditlosses over thenext 12 months
Expected credit lossesover the entire duration
(without credit
| impairment) |
Stage 3Expected credit lossesover the entire duration(with credit impairment)
Total
| Balance on January 1, 2023 | 108,878,474.34 | 11,740,629.54 | 120,619,103.88 | |
| Balance on January 1, 2023 in the current period | ||||
| - Carried over to Stage 3 | -57,953.35 | 57,953.35 | ||
| Accrual in current period | 1,003,444.00 | 1,003,444.00 | ||
| Reversal in current period | 1,258,223.09 | 1,258,223.09 | ||
| Written-off in current period | 57,953.35 | 57,953.35 | ||
| Other changes | 7,058.55 | 7,058.55 | ||
| Balance on June 30, 2023 | 108,572,800.45 | 11,740,629.54 | 120,313,429.99 | |
Changes in book balance with significant changes in the current period of provision for loss?Applicable ?Not applicable
Disclosure by aging
Unit: RMB
| Aging | Closing Balance |
| Within 1 year (including 1 year) | 28,846,160.03 |
| 1~2 years | 15,387,475.31 |
| 2~3 years | 15,996,728.40 |
| More than 3 years | 280,625,047.11 |
| 3~4 years | 236,680,521.73 |
| 4~5 years | 13,785,458.31 |
| More than 5 years | 30,159,067.07 |
| Total | 340,855,410.85 |
3) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: RMBClass
Beginning
balance
Closing BalanceAccrual
| Amount of change in current period | ||
| Recovered or reversed | ||
Write-off Others
120,619,103.88 1,003,444.00 1,258,223.09 57,953.35 7,058.55 120,313,429.99
| Provision for bad debts of other receivables | ||||||
| Total | 120,619,103.88 | 1,003,444.00 | 1,258,223.09 | 57,953.35 | 7,058.55 | 120,313,429.99 |
Where the amount of bad debt provision reversed or recovered is important:
Unit: RMB
| Unit name | Amount reversed or recovered | Recovery way |
N/A
4) Other receivable actually written off at the current period
Unit: RMB
| Item | Amount written off |
| Other receivables actually written off | 57,953.35 |
Write-off of important other receivables:
Unit: RMBUnit name
Nature of otherreceivables
Amountwritten off
Reasons for
write-off
procedures
| performed |
Whether the payments arisefrom related transactionsDescription of write-off of other receivables:
5) Other receivables with Top 5 ending balances by debtor
Unit: RMBUnit name
Nature ofpayment
Closing Balance Aging
total otherending balance
| receivable |
Ending balance ofbad debt provisionFirst
224,655,320.00 3~4 years 65.91% 112,327,660.00
| Receivables related to Heyuan project |
Second Others 2,735,840.08
1~2 years: RMB 19,638.22;2~3 years: RMB 7,240.90;
| 3~4 years: RMB 2,704,101.08 |
0.80% 2,167,659.95
Third
| Margin and deposit |
2,311,115.80 Within 1 year 0.68% 142,147.46
| Fourth | Others | 2,000,000.00 | 2~3 years | 0.59% | 600,000.00 |
| Fifth | Others | 1,960,692.59 | Within 1 year | 0.58% | 98,034.63 |
| Total | 233,662,968.47 | 68.56% | 115,335,502.04 |
6) Accounts receivable involving government subsidies
Unit: RMB
Unit name
Closing Balance Ending aging
| Name of government subsidy project | Estimated collection time, amount and basis |
7) Other receivables derecognized due to transfer of financial assets
Not applicable.
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvement
Not applicable.Other description:
9. Inventory
Whether the Company need to follow the disclosure requirements of real estate industry
(1) Inventory classification
Unit: RMBItem
| Closing Balance | Beginning balance |
Book balance
price reserves orprovision forimpairment ofcontract
| performance costs |
Book value Book balance
price reserves or
provision forimpairment of
contract
| performance costs |
Book value
materials andgoods
| processed by |
the
304,105,950.95
| commission |
26,294,376.27 277,811,574.68
442,673,944.78 54,831,465.50
387,842,479.28
| Work in process |
206,382,586.15
25,450,332.97 180,932,253.18
172,727,862.49 9,184,849.77
163,543,012.72
| Merchandise inventory |
1,156,101,718.17
240,049,219.81 916,052,498.36
1,188,954,668.09 258,680,380.74
930,274,287.35
| Semi- |
finishedproducts
28,477,092.97
| shipped in transit |
28,477,092.97
61,520,340.90 130,228.78
61,390,112.12
| Low priced and easily worn articles |
11,381,673.54
962,039.09 10,419,634.45
17,465,670.25 1,591,988.35
15,873,681.90
| Total | 1,706,449,021.78 | 292,755,968.14 | 1,413,693,053.64 | 1,883,342,486.51 | 324,418,913.14 | 1,558,923,573.37 |
(2) Inventory falling price reserves and provision for impairment of contract performance costs
Unit: RMB
Item
Beginningbalance
Amount increased in current period
Closing BalanceAccrual Others
| Amount decreased in current period | |
| Reversal or write-back | |
Others
54,831,465.50 10,616,808.72
| Raw materials |
39,153,897.95
26,294,376.27
| Work in process |
9,184,849.77 23,924,918.05
7,659,434.85
25,450,332.97
| Merchandise inventory |
258,680,380.74 157,009,803.06
1,074,316.06 176,715,280.05
240,049,219.81
| Semi- |
finishedproducts
130,228.78
| shipped in transit |
130,228.78
| Low priced and easily worn articles |
1,591,988.35 709,144.82
1,339,094.08
962,039.09
| Total | 324,418,913.14 | 192,260,674.65 | 1,074,316.06 | 224,997,935.71 | 292,755,968.14 |
(3) Description of ending balance of inventory containing the capitalized amount of borrowing costs
(4) Description of current amortization amount of contract performance cost
10. Contract assets
Unit: RMB
Item
| Closing Balance | Beginning balance |
Book balance
Book value Book balance
| Provision for impairment | Provision for impairment |
Book valueAmount and reason of significant change in the book value of contract assets in current period:
Unit: RMB
| Item | Amount of change | Reason for change |
If the impairment provision of contract assets is accrued according to the general model of expected credit loss, please referto the disclosure method of other receivables to disclose the relevant information of impairment provision:
?Applicable ?Not applicable
Provision for impairment of contract assets in current period:
Unit: yuanItem Accrual in current period
| Reversal in current period | Write off/verification in current period |
ReasonsOther description
11. Assets held for sales
Unit: yuanItem
| Ending book balance | Provision for impairment |
Ending book value Fair value
| Estimated disposal cost | Estimated disposal time |
Other description
12. Non-current assets due within a year
Unit: yuan
| Item | Closing Balance | Beginning balance |
| Total | 0.00 |
Important debt investments/other debt investments
Unit: yuanDebt item
| Closing Balance | Beginning balance | |
| Book value | ||
Coupon rate Actual rate
| Maturity date | Book value |
Coupon rate Actual rate
Other description
13. Other current assets
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Return cost receivable | 999,992.27 | 1,181,368.44 |
| Interest on fixed deposit / large deposit | 122,446,380.94 | 101,670,459.07 |
| VAT input tax to be deducted / uncertified input tax |
30,619,026.20 5,863,706.62
| Prepaid corporate income tax | 1,726,029.85 | 4,773,735.12 |
| Unamortized expenses | 19,673,276.72 | 4,853,649.47 |
| Others | 234,198.07 | 716,165.75 |
| Total | 175,698,904.05 | 119,059,084.47 |
Other description:
14. Debt investment
Unit: RMBItem
| Closing Balance | Beginning balance |
Book balance
Book value Book balance
| Provision for impairment | Provision for impairment |
Book valueImportant debt investments
Unit: RMB
Debt item
| Closing Balance | Beginning balance | |
| Book value | ||
Coupon rate Actual rate
| Maturity date | Book value |
Coupon rate Actual rate
Provision for impairment
Unit: RMBProvision for bad debt
Maturity
date
Stage 1
Expected credit
| losses over the next 12 months | Stage 2 |
Expected credit losses overthe entire duration (without
| credit impairment) | Stage 3 |
Expected credit losses over
the entire duration (with
Total
| credit impairment) | ||
| Balance on January 1, 2023 in the current period | ||
Changes in book balance with significant changes in the current period of provision for loss?Applicable ?Not applicableOther description:
15. Other debt investments
Unit: RMBItem
Beginningbalance
Accruedinterest
change in
current
| period |
ClosingBalance
Cost
Accumulated fair valuechange
for loss recognized inother comprehensive
| income |
Remark
Important other debt investments
Unit: RMB
Other debt item
| Closing Balance | Beginning balance | |
| Book value | ||
Coupon rate Actual rate
| Maturity date | Book value |
Coupon rate Actual rate
Provision for impairmentUnit: RMBProvision for bad debt
MaturitydateStage 1
Expected creditlosses over the
| next 12 months | Stage 2 |
Expected credit losses overthe entire duration (without
| credit impairment) | Stage 3 |
Expected credit losses overthe entire duration (with
Total
| credit impairment) | ||
| Balance on January 1, 2023 in the current period | ||
Changes in book balance with significant changes in the current period of provision for loss?Applicable ?Not applicableOther description:
16. Long-term receivables
(1) Long-term receivables
Unit: RMBItem
| Closing Balance | Beginning balance |
Discount rate
rangeBook balance
Book value Book balance
| Provision for bad debt | Provision for bad debt |
Book value
Impairment of provision for bad debt
Unit: RMB
Provision for bad debt
Expected creditlosses over the
| next 12 months | Stage 2 |
Expected credit losses overthe entire duration (without
| credit impairment) | Stage 3 |
Expected credit losses over
the entire duration (with
Total
| credit impairment) | ||
| Balance on January 1, 2023 in the current period | ||
Changes in book balance with significant changes in the current period of provision for loss?Applicable ?Not applicable
(2) Long-term receivables derecognized due to transfer of financial assets
(3) Description of the amount of assets and liabilities formed by transferring long-term receivables and continuing
involvement
17. Long-term equity investment
Unit: RMB
Invested unit
Beginningbalance(Book value)
Closing Balance
(Book value)
Endingbalance ofimpairmentprovisionFurtherinvestment
Capitalreduction
| Increase or decrease in current period | ||
| Investment | ||
gains andlossesrecognized by
the equity
Adjustment of
othercomprehensive
income
Changesin otherequity
Declaredpayment of
cashdividends or
profits
Provision
forimpairment
Others
methodI. Cooperative enterprise
| I. Cooperative enterprise | ||
| II. Joint venture | ||
| Chengdu Winner | ||
21,642,696.16 1,580,818.75 23,223,514.91
XianchuangTechnology
| Co., Ltd. |
104,939.83 104,939.83
| Subtotal | 21,747,635.99 | 23,328,454.74 | |||||||||
| Total | 21,747,635.99 | 1,580,818.75 | 23,328,454.74 |
18. Other equity instrument investments
Unit: RMB
| Item | Closing Balance | Beginning balance |
Itemized disclosure of the current non-trading equity instrument investment
Unit: RMBProjectname
Recognized
dividendincome
Accumulatedgains
Accumulatedlosses
comprehensiveincome transferred
| into retained income | Reasons for designating to be |
measured at fair value and itschanges are recorded into other
| comprehensive income | Reasons for other |
comprehensiveincome transferring
Other description:
19. Other non-current financial assets
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Equity instrument investments | 70,000,000.00 | 40,000,000.00 |
| Total | 70,000,000.00 | 40,000,000.00 |
Other description:
20. Investment real estates
(1) Investment real estates using cost measurement mode
? Applicable ? Not applicable
Unit: RMB
Item Houses and buildings Land use right
Total
| Construction in progress | ||||
| I. Original book value | ||||
| 1. Beginning balance | 10,739,083.13 | 10,739,083.13 | ||
| 2. Amount increased in current period | ||||
| (1) Outsourcing | ||||
| (2) Transfer from inventory / fixed assets / construction in progress |
| (3) Increase by business combination | ||||
| 3. Amount decreased in current period | ||||
| (1) Disposal | ||||
| (2) Other roll-out | ||||
| 4. Ending balance | 10,739,083.13 | 10,739,083.13 | ||
| II Accumulated depreciation and accumulated amortization |
| 1. Beginning balance | 1,992,068.88 | 1,992,068.88 | ||
| 2. Amount increased in current period | 522,022.92 | 522,022.92 | ||
| (1) Provision or amortization | 522,022.92 | 522,022.92 | ||
| 3. Amount decreased in current period | ||||
| (1) Disposal | ||||
| (2) Other roll-out | ||||
| 4. Ending balance | 2,514,091.80 | 2,514,091.80 |
Item Houses and buildings Land use right
Total
| Construction in progress | ||||
| III. Provision for impairment | ||||
| 1. Beginning balance | ||||
| 2. Amount increased in current period | ||||
| (1) Withdraw | ||||
| 3. Amount decreased in current period | ||||
| (1) Disposal | ||||
| (2) Other roll-out | ||||
| 4. Ending balance | ||||
| IV. Book value | ||||
| 1. Ending book value | 8,224,991.33 | 8,224,991.33 | ||
| 2. Beginning book value | 8,747,014.25 | 8,747,014.25 |
(2) Investment real estates using fair value measurement mode
?Applicable ?Not applicable
(3) Investment real estates without certificate of title
Unit: RMBItem Book value
Other description
21. Fixed assets
Unit: RMB
Reasons for not obtaining the certificate
of titleItem
| Item | Closing Balance | Beginning balance |
| Fixed assets | 2,362,409,101.13 | 2,312,982,598.88 |
| Total | 2,362,409,101.13 | 2,312,982,598.88 |
(1) Fixed assets
Unit: RMBItem
Houses and
building
Machineryequipment
Transportationequipment
equipment andoffice equipment,
| etc. |
Total
| I. Original book value: | |||||
| 1. Beginning balance |
1,539,756,530.45
1,738,833,686.67 32,042,953.81 173,097,303.06
3,483,730,473.99
| 2. Amount increased in current period |
162,766,323.83
66,620,464.09 3,812,371.25 9,532,098.69
242,731,257.86
| (1) Purchase | 6,712,373.80 | 54,089,929.16 | 1,011,260.61 | 9,170,010.36 | 70,983,573.93 |
| (2) Transfer from construction in progress |
156,053,950.03
12,530,534.93
168,584,484.96
| (3) Increase by |
business
| combination |
2,801,110.64 362,088.33
3,163,198.97
| 3. Amount decreased in current period |
18,779.00
89,347,080.57 1,022,119.89 21,338,014.69
111,725,994.15
| (1) Disposal or scrap |
18,779.00
89,347,080.57 1,022,119.89 21,338,014.69
111,725,994.15
| 4. Ending balance | 1,702,504,075.28 | 1,716,107,070.19 | 34,833,205.17 | 161,291,387.06 | 3,614,735,737.70 |
| II. Accumulated depreciation |
| 1. Beginning balance |
342,594,926.93
597,986,893.92 18,669,157.81 87,708,190.39
1,046,959,169.05
| 2. Amount increased in current period |
34,518,291.00
68,058,018.44 2,387,121.47 15,400,106.32
120,363,537.23
| (1) Provision | 34,518,291.00 | 68,058,018.44 | 1,561,557.83 | 15,261,824.99 | 119,399,692.26 |
| (2) Increase by |
business
| combination |
825,563.64 138,281.33
963,844.97
| 3. Amount decreased in current period |
10,049.47
17,994,884.36 839,520.62 18,448,630.43
37,293,084.88
| (1) Disposal or scrap |
10,049.47
17,994,884.36 839,520.62 18,448,630.43
37,293,084.88
| 4. Ending balance | 377,103,168.46 | 648,050,028.00 | 20,216,758.66 | 84,659,666.28 | 1,130,029,621.40 |
| III. Provision for impairment |
| 1. Beginning balance |
43,277,161.98
79,082,344.13 25,258.85 1,403,941.10
123,788,706.06
| 2. Amount increased in current period |
| (1) Provision | |||||
| (2) Increase by |
business
| combination |
| 3. Amount decreased in current period |
1,448,617.30 43,073.59
1,491,690.89
| (1) Disposal or scrap |
1,448,617.30 43,073.59
1,491,690.89
| 4. Ending balance | 43,277,161.98 | 77,633,726.83 | 25,258.85 | 1,360,867.51 | 122,297,015.17 |
| IV. Book value | |||||
| 1. Ending book value |
1,282,123,744.84
990,423,315.36 14,591,187.66 75,270,853.27
2,362,409,101.13
| 2. Beginning book value |
1,153,884,441.54
1,061,764,448.62 13,348,537.15 83,985,171.57
2,312,982,598.88
(2) Fixed assets that are temporarily idle
Unit: RMBItem
| Original book value | Accumulated depreciation | Provision for impairment |
Book value RemarkHouses and building 36,623.93 22,523.72 8,789.75
5,310.46
| Not needed for now |
Machinery equipment 31,153,006.00 13,350,603.01 13,127,892.48
4,674,510.51
| Not needed for now | ||||
| Electronic equipment and office equipment, etc. |
176,221.69 115,511.29 735.00
59,975.40
| Not needed for now | |||||
| Total | 31,365,851.62 | 13,488,638.02 | 13,137,417.23 | 4,739,796.37 |
(3) Fixed assets leased out by operating lease
Unit: RMB
| Item | Ending book value |
(4) Fixed assets without certificate of title
Unit: RMBItem Book value
| Reasons for not obtaining the certificate of title | ||
| Winner Medical (Tianmen) - Intelligent 3D |
e-
47,799,504.55
The formalities have not yet been
completed
| commerce warehouse for pure cotton business |
| Winner Medical (Tianmen) - No.2 Workshop for finished products |
11,019,389.17
Other description
(5) Liquidation of fixed assets
Unit: RMB
The formalities have not yet been
completedItem
| Item | Closing Balance | Beginning balance |
Other description
22. Construction in progress
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Construction in progress | 1,017,739,015.40 | 765,009,910.63 |
| Total | 1,017,739,015.40 | 765,009,910.63 |
(1) Construction in progress
Unit: RMBItem
| Closing Balance | Beginning balance |
Book balance
Book value Book balance
| Provision for impairment | Provision for impairment |
Book value
467,417,775.16 467,417,775.16 375,173,643.40 375,173,643.40
| Winner Medical (Wuhan) engineering project |
| Winner Medical (Jiayu) engineering project |
355,662,545.00 355,662,545.00 165,245,291.40 165,245,291.40
(Huanggang)
| engineering project |
14,156,488.39 14,156,488.39 83,828,495.28 83,828,495.28
0.00 0.00 36,276,311.67 36,276,311.67
| Jingmen infrastructure project |
| Winner Medical |
(Shenzhen)
39,119,972.83 39,119,972.83 12,844,241.04 12,844,241.04
| engineering project |
| Winner Guilin engineering project |
4,713,203.22 4,713,203.22 1,877,054.35 1,877,054.35
641,726.39 641,726.39 397,954.71 397,954.71
| Tianmen infrastructure project |
| Winner Medical (Hunan) engineering project |
32,519,101.68 32,519,101.68
114,373,682.73 10,865,480.00 103,508,202.73 100,232,398.78 10,865,480.00 89,366,918.78
| Other equipment to be installed and sporadic projects | ||||||
| Total | 1,028,604,495.40 | 10,865,480.00 | 1,017,739,015.40 | 775,875,390.63 | 10,865,480.00 | 765,009,910.63 |
(2) Current changes in major projects under construction
Unit: yuan
Project name Budget number
Beginningbalance
Amountincreased incurrent period
Amount carriedforward to fixedassets in current
period
Otherdecreasesin current
period
ClosingBalance
Proportion
of totalprojectinput to the
budgetProgressof works
Accumulated
amount ofinterestcapitalization
interestcapitalizationfunds in the
current
| period |
Interestcapitalization
rate in thecurrent period
Source
offunds
85,000,000.00 83,828,495.28 277,357.92 84,105,853.20 0.00 98.95% 100.00% Others
| Integrated Workshop Project of Winner Medical (Huanggang) |
| Winner Medical |
(Huanggang)
45,000,000.00 41,378,064.05 281,974.42 41,660,038.47 92.58% 90.00% Others
| production equipment |
| Winner Industrial Park (Jiayu) Project |
272,380,000.00 141,859,864.32 94,845,817.01 236,705,681.33 86.90% 98.00% Others
WorkshopEngineering of Winner
| Medical (Jingmen) |
73,000,000.00 36,276,311.67 32,819,952.47 69,096,264.14 0.00 68.81% 100.00% Others
Engineering of Winner
| Medical (Wuhan) |
268,000,000.00 184,403,669.79 36,880,733.88 221,284,403.67 82.57% 80.00% Others
110,871,722.11 91,545,458.64 0.00 91,545,458.64 82.57% 90.00% Others
| Winner Medical (Wuhan) Phase II Main Project |
| Phase II Plant |
Engineering of Winner
96,000,000.00 21,238,938.05 29,734,513.26 50,973,451.31 53.10% 60.00% Others
| Medical (Wuhan) |
| R&D Center Project of Winner Medical (Wuhan) |
35,666,270.00 19,632,809.17 6,544,269.73 26,177,078.90 73.39% 70.00% Others
33,213,730.00 19,928,238.00 4,190,429.05 24,118,667.05 72.62% 75.00% Others
| Shift Building and Canteen Expansion Project of Winner Medical (Wuhan) |
| Medical Industry Building of Winner Medical (Shenzhen) |
261,723,960.00 2,741,232.41 22,600,628.30 25,341,860.71 10.00% 10% Others
17,500,000.00 10,103,008.63 3,675,103.49 13,778,112.12 79.00% 80% Others
| Chengdu Wenjiang Project of Winner Medical (Shenzhen) |
| Plant Construction |
Project Production
180,450,000.00 1,877,054.35 2,836,148.87 4,713,203.22 3.00% 3.00% Others
| Line Expansion and Transformation of Winner Guilin | ||||||||||||
| Total | 1,478,805,682.11 | 654,813,144.36 | 234,686,928.40 | 153,202,117.34 | 0.00 | 736,297,955.42 |
(3) Provision for impairment of construction in progress in current period
Unit: RMB
| Item | Current accrued amount | Reason for accrual |
Other descriptionN/A
(4) Engineering materials
Unit: RMBItem
| Closing Balance | Beginning balance |
Book balance
Book value Book balance
| Provision for impairment | Provision for impairment |
Book value
Other description: N/A
23. Productive biological assets
(1) Productive biological assets using cost measurement mode
? Applicable ? Not applicable
(2) Productive biological assets using fair value measurement mode
? Applicable ? Not applicable
24. Oil and gas assets
?Applicable ?Not applicable
25. Right-of-use assets
Unit: RMB
| Item | Houses and building | Total |
| I. Original book value | ||
| 1. Beginning balance | 916,984,153.11 | 916,984,153.11 |
| 2. Amount increased in current period | 86,606,025.55 | 86,606,025.55 |
| - New lease | 78,758,510.23 | 78,758,510.23 |
| - Increase by business combination | 7,847,515.32 | 7,847,515.32 |
| 3. Amount decreased in current period | 134,097,378.17 | 134,097,378.17 |
| - Disposal | 134,097,378.17 | 134,097,378.17 |
| 4. Ending balance | 869,492,800.49 | 869,492,800.49 |
| II. Accumulated depreciation | ||
| 1. Beginning balance | 444,628,027.47 | 444,628,027.47 |
| 2. Amount increased in current period | 98,173,196.40 | 98,173,196.40 |
| (1) Withdraw | 97,174,613.52 | 97,174,613.52 |
| - Increase by business combination | 998,582.88 | 998,582.88 |
| 3. Amount decreased in current period | 89,898,453.94 | 89,898,453.94 |
| (1) Disposal | 89,898,453.94 | 89,898,453.94 |
| 4. Ending balance | 452,902,769.93 | 452,902,769.93 |
| III. Provision for impairment | ||
| 1. Beginning balance | ||
| 2. Amount increased in current period | ||
| (1) Withdraw | ||
| 3. Amount decreased in current period | ||
| (1) Disposal | ||
| 4. Ending balance | ||
| IV. Book value | ||
| 1. Ending book value | 416,590,030.56 | 416,590,030.56 |
| 2. Beginning book value | 472,356,125.64 | 472,356,125.64 |
Other description:
26. Intangible assets
(1) Intangible assets
Unit: RMB
Item Land use right Patent right
| Nonpatented technology | Software use right | Franchised use right |
Trademark right Client relations Total
| I. Original book value | ||||||||
| 1. Beginning balance | 566,900,313.57 | 269,943,554.50 | 83,745,573.57 | 10,228,226.53 | 67,090,980.97 | 180,488,908.40 | 1,178,397,557.54 | |
| 2. Amount increased in current period |
12,123,734.51 5,322,715.79 11,440,000.00 28,886,450.30
| (1) Purchase | 12,123,734.51 | 5,322,715.79 | 17,446,450.30 | |||||
| (2) Internal R&D | ||||||||
| (3) Increase by |
business
11,440,000.00 11,440,000.00
| combination |
| 3. Amount decreased in current period |
79,242.43 67,000.00 146,242.43
| (1) Disposal | 79,242.43 | 67,000.00 | 146,242.43 | |||||
| 4. Ending balance | 579,024,048.08 | 269,943,554.50 | 88,989,046.93 | 10,228,226.53 | 67,023,980.97 | 191,928,908.40 | 1,207,137,765.41 | |
| II. Accumulated amortization |
| 1. Beginning balance | 51,413,899.49 | 22,902,340.61 | 48,333,127.60 | 10,228,226.53 | 7,377,554.38 | 5,032,605.48 | 145,287,754.09 | |
| 2. Amount increased in current period |
6,146,452.65 14,559,231.59 3,110,649.09 3,142,500.06 8,541,957.08 35,500,790.47
| (1) Provision | 6,146,452.65 | 14,559,231.59 | 3,110,649.09 | 3,142,500.06 | 8,541,957.08 | 35,500,790.47 | ||
| 3. Amount decreased in current period |
12,135.86 50,250.00 62,385.86
| (1) Disposal | 12,135.86 | 50,250.00 | 62,385.86 | |||||
| 4. Ending balance | 57,560,352.14 | 37,461,572.20 | 51,431,640.83 | 10,228,226.53 | 10,469,804.44 | 13,574,562.56 | 180,726,158.70 | |
| III. Provision for impairment |
| 1. Beginning balance | ||||||||
| 2. Amount increased in current period |
| (1) Provision | ||||||||
| 3. Amount decreased in current period |
| (1) Disposal | ||||||||
| 4. Ending balance | ||||||||
| IV. Book value | ||||||||
| 1. Ending book value | 521,463,695.94 | 232,481,982.30 | 37,557,406.10 | 56,554,176.53 | 178,354,345.84 | 1,026,411,606.71 | ||
| 2. Beginning book value |
515,486,414.08 247,041,213.89 35,412,445.97 59,713,426.59 175,456,302.92 1,033,109,803.45
The proportion of intangible assets formed through internal R & D of the Company in the balance of intangible assets at theend of current period: 0.00%
(2) Land use right without certificate of title
Unit: RMB
| Item | Book value | Reasons for not obtaining the certificate of title |
Winner Medical (Shenzhen) -
of Guifang Road, Guanlan Street Planning
27,253,333.33
| North Side | Land and real estate are regarded as a whole, a real estate certificate can only be applied after the project completion. |
Winner Medical (Hunan) -
for infusion category
109,242,491.65
| Phase II land | Land and real estate are regarded as a whole, a real estate certificate can only be applied after the project completion. | |
| Mexico Longterm plant land | 12,110,619.51 | Without certificate of title |
| Total | 148,606,444.49 |
Other description
27. Development expenditure
Unit: RMB
Item
Beginning
balance
Amount decreased in current period
ClosingBalance
| Amount increased in current period | |
| Internal | |
development
Others
Recognized asintangible assets
Transfer to current
profit and loss
| expenditure | ||
| Total | ||
Other description
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
goodwill forming matter
Beginning balance
| Investee name or | Increase in current period |
Formed by business
| combination | Decrease in current |
period
Closing Balance
| Disposal | ||
| Business combination not under common |
control -
2,681,232.09
| Acquisition of Malaysia Winner |
2,681,232.09
| Business combination not under common |
control -
390,472,978.67
| Acquisition of Zhejiang Longterm |
390,472,978.67
| Business combination |
not under
control -
| Acquisition of Guilin Latex |
244,814,604.75
244,814,604.75
| Business combination not under common |
control -
388,989,258.26
| Acquisition of Winner Medical (Hunan) |
388,989,258.26
| Business combination not under common |
control - Acquisition
20,397,972.33
| of Junjian Medical |
20,397,972.33
| Business combination not under common |
control -
8,903,219.50
| Acquisition of Shanghai Hongsong |
8,903,219.50
| Total | 1,047,356,046.10 | 8,903,219.50 | 1,056,259,265.60 |
(2) Provision for impairment of goodwill
Unit: RMB
matter
Beginning balance
| invested entity name or goodwill forming | Increase in |
current period
| Accrual | Decrease in |
current period
Closing Balance
| Disposal | ||
| Business combination not under common control - Acquisition of Malaysia Winner |
2,681,232.09 2,681,232.09
| Total | 2,681,232.09 | 2,681,232.09 |
Information relating to the asset group or asset group portfolio of goodwillGoodwill impairment test process and recognition method of key parameters (forecast period growth rate when estimating thepresent value of future cash flow, stable period growth rate, profit rate, discount rate and forecast period) and goodwillimpairment loss:
Impact of goodwill impairment testsOther description
29. Long-term unamortized expenses
Unit: RMB
Item Beginning balance
Amount increasedin current period
amount in current
| period |
Other decreases Closing Balance
| Decoration cost | 38,774,369.19 | 2,396,354.12 | 5,918,383.86 | 396,491.90 | 34,855,847.55 |
| Decoration expenses for operating leased fixed assets |
93,917,916.84 9,871,300.20
19,871,524.51
2,757,111.52
81,160,581.01
| Total | 132,692,286.03 | 12,267,654.32 | 25,789,908.37 | 3,153,603.42 | 116,016,428.56 |
Other description
30. Deferred income tax assets / deferred income tax liabilities
(1) Unoffset deferred income tax assets
Unit: RMB
Item
| Closing Balance | Beginning balance | |||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Provision for impairment of assets | 597,192,032.67 | 105,426,667.51 | 635,561,435.85 | 113,878,209.59 |
| Unrealized profit of internal transaction | ||||
105,473,850.56
20,633,341.60 176,701,413.90 33,954,186.63
| Deductible loss | 83,014,377.48 | 20,431,842.96 | 121,028,998.43 | 29,902,881.36 |
| Deferred income | 126,610,563.31 | 19,096,071.17 | 98,791,412.91 | 14,929,042.38 |
Item
| Closing Balance | Beginning balance | |||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Member points | 11,332,289.56 | 2,833,072.39 | 9,067,179.42 | 2,266,794.86 |
| Accrued liabilities | 2,502,622.92 | 625,655.73 | 2,781,740.46 | 624,681.92 |
| Advertising expenses in excess of the tax deductible limit | ||||
6,060,597.53 1,515,149.38 1,176,743.33 176,511.50
5,189,000.26 778,350.04
| Changes in fair value of trading financial assets |
| New lease standards - Lease liabilities |
475,396,715.17 111,989,928.06 533,774,609.44 125,588,374.18
| Dismission welfare | 3,868,908.48 | 603,666.47 | 2,858,415.48 | 483,093.52 |
| Total | 1,411,451,957.68 | 283,155,395.27 | 1,586,930,949.48 | 322,582,125.98 |
(2) Unoffset deferred income tax liabilities
Unit: RMBItem
| Closing Balance | Beginning balance | |||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Asset evaluation increment for business combination not under common control | ||||
623,367,722.74 106,475,380.88 665,595,964.73
109,308,421.87
| Changes in fair value of trading financial assets |
54,778,439.64 8,242,186.32 1,983,960.49
304,114.59
| Depreciation of fixed assets | 130,672,475.76 | 19,600,871.38 | 149,207,192.40 | 22,381,078.85 |
| New lease standards - Right-of-use assets |
416,590,030.56 97,728,425.04 472,356,125.64
110,581,486.40
| Others | 11,223,250.00 | 1,683,487.50 | 11,223,250.00 | 1,683,487.50 |
| Total | 1,236,631,918.70 | 233,730,351.12 | 1,300,366,493.26 | 244,258,589.21 |
(3) Deferred income tax assets or liabilities presented as net amount after offset
Unit: RMBItem
Ending offset amount of
deferred income taxassets and liabilities
deferred income taxassets and liabilities after
| offset | Beginning offset |
amount of deferredincome tax assets and
| liabilities | Beginning balance of |
deferred income taxassets and liabilities after
offsetDeferred income taxassets
283,155,395.27 322,582,125.98
| Deferred income tax assets |
| Deferred income tax liabilities |
233,730,351.12 244,258,589.21
(4) Details of unrecognized deferred income tax assets
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Deductible loss | 250,720,395.68 | 251,019,604.38 |
| Dismission welfare | 996,517.00 | |
| Provision for impairment of assets and amortization of depreciation |
1,060,454.17
7,053,355.76
| Total | 251,780,849.85 | 259,069,477.14 |
(5) Deductible losses on unrecognized deferred income tax assets will expire in the following year
Unit: RMB
| Year | Closing balance | Beginning amount | Remark |
| 2023 | 20,797,157.61 | 25,574,944.59 | |
| 2024 | 48,715,468.37 | 48,794,287.92 | |
| 2025 | 46,546,726.71 | 46,546,726.71 | |
| 2026 | 74,343,804.38 | 74,343,804.38 | |
| 2027 | 55,364,880.58 | 55,364,880.58 | |
| 2028 | 3,756,253.26 | ||
| No maturity date | 1,196,104.77 | 394,960.20 | |
| Total | 250,720,395.68 | 251,019,604.38 |
Other description
31. Other non-current assets
Unit: RMBItem
| Closing Balance | Beginning balance |
Book balance
for
| impairment |
Book value Book balance
for
| impairment |
Book value
payment / equipmentpurchase payment /advance storeengineering and
| decoration payment |
136,785,373.15 136,785,373.15
83,524,640.64
83,524,640.64
| Total | 136,785,373.15 | 136,785,373.15 | 83,524,640.64 | 83,524,640.64 |
Other description:
32. Short-term loans
(1) Classification of short-term loans
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Pledge borrowing | 0.00 | |
| Guaranteed borrowing | 30,000,000.00 | 5,000,000.00 |
| Bill discount | 800,000,000.00 | 1,130,050,000.00 |
| Trade financing (Letter of Credit, etc.) | 700,000,000.00 | 1,000,000,000.00 |
| Mortgage + Guaranteed borrowing | 60,000,000.00 | |
| Debt of honor | 233,000,000.00 | 100,000,000.00 |
| Borrowing interest | 23,992.64 | 168,930.85 |
| Total | 1,763,023,992.64 | 2,295,218,930.85 |
Description on the classification of short-term borrowing:
(2) short-term loans unpaid overdue
The total amount of overdue short-term borrowings at the end of the period is RMB 0.00, of which the important overdueshort-term borrowings are as follows:
Unit: RMB
Borrower Closing Balance Borrowing interest rate Overdue time
Other description
33. Trading financial liabilities
Unit: RMB
Overdue interest
rateItem
| Item | Closing Balance | Beginning balance |
| Including: | ||
| Including: | ||
| Total | 0.00 |
Other description:
34. Derivative financial liabilities
Unit: RMB
| Item | Closing Balance | Beginning balance |
Other description:
35. Notes payable
Unit: RMB
| Type | Closing Balance | Beginning balance |
| Bank acceptance bill | 86,200,204.52 | 24,760,000.00 |
| Total | 86,200,204.52 | 24,760,000.00 |
The total amount of notes payable due and unpaid at the end of current period is RMB 0.00.
36. Accounts payable
(1) Presentation of accounts payable
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Within 1 year (including 1 year) | 782,892,485.49 | 1,094,753,592.92 |
| 1~2 years (including 2 years) | 11,096,226.50 | 19,338,059.30 |
| 2~3 years (including 3 years) | 6,811,115.18 | 2,914,279.27 |
| More than 3 years | 4,798,801.56 | 2,568,587.09 |
| Total | 805,598,628.73 | 1,119,574,518.58 |
(2) Important accounts payable with the aging more than 1 year
Unit: RMBItem Closing Balance
Other description:
37. Advance from customers
(1) Presentation of advance from customers
Unit: RMB
| Item | Closing Balance | Beginning balance |
(2) Important advances from customers with the aging more than 1 year
Unit: RMBItem Closing Balance
| Reasons for failure of payment or carryover |
38. Contract liabilities
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Customer consideration received | 228,030,782.74 | 557,752,074.66 |
| Member points | 11,332,289.56 | 9,067,179.42 |
| Total | 239,363,072.30 | 566,819,254.08 |
Amount and reasons for significant changes in book value during the reporting period
Unit: RMB
| Item | Amount of change | Reason for change |
39. Payroll payable
(1) Presentation of payroll payable
Unit: RMBItem Beginning balance
| Increase in current period | Decrease in current period |
Closing Balance
| I. Short-term compensation | 301,139,811.76 | 781,407,960.43 | 890,250,325.56 | 192,297,446.63 |
| II. Welfare after dismission - defined contribution plan |
7,455,497.14 60,961,351.90 60,982,323.48 7,434,525.56
| III. Dismission welfare | 3,854,932.48 | 15,561,847.76 | 15,551,671.76 | 3,865,108.48 |
| Total | 312,450,241.38 | 857,931,160.09 | 966,784,320.80 | 203,597,080.67 |
(2) Presentation of short-term compensation
Unit: RMBItem Beginning balance
| Increase in current period | Decrease in current period |
Closing Balance
297,664,958.99
| 1. Wages, bonuses, allowances and subsidies |
720,763,140.43 829,537,708.04 188,890,391.38
| 2. Employee welfare expenses | 2,789,216.06 | 9,598,926.02 | 10,054,494.37 | 2,333,647.71 |
| 3. Social insurance premium | 409,397.19 | 32,308,113.67 | 32,058,812.11 | 658,698.75 |
| Including: medical insurance premium |
232,375.41
28,794,257.44 28,554,834.58 471,798.27
| Industrial injury insurance premium |
124,437.99
2,095,519.27 2,095,329.57 124,627.69
| Birth insurance premium | 52,583.79 | 1,418,336.96 | 1,408,647.96 | 62,272.79 |
| 4. Housing fund | 3,943.00 | 17,850,395.32 | 17,748,732.32 | 105,606.00 |
| 5. Labor union expenditure and personnel education fund |
272,296.52
887,384.99 850,578.72 309,102.79
| Total | 301,139,811.76 | 781,407,960.43 | 890,250,325.56 | 192,297,446.63 |
(3) Presentation of defined contribution plans
Unit: RMBItem Beginning balance
| Increase in current period | Decrease in current period |
Closing Balance
| 1. Basic endowment insurance | 7,350,564.34 | 58,952,111.29 | 58,973,586.66 | 7,329,088.97 |
| 2. Unemployment insurance premium |
104,932.80
2,009,240.61 2,008,736.82 105,436.59
| Total | 7,455,497.14 | 60,961,351.90 | 60,982,323.48 | 7,434,525.56 |
Other description:
40. Taxes payable
Unit: RMB
| Item | Closing Balance | Beginning balance | ||
| Added value tax | 36,062,802.48 | 96,897,978.48 | ||
| Corporate income tax | 33,478,497.96 | 197,417,079.11 | ||
| Individual income tax | 2,857,585.57 | 4,579,372.68 | ||
| Urban maintenance and construction tax | ||||
3,101,780.92 8,167,572.37
| Housing property tax | 4,725,233.72 | 5,597,557.89 | ||
| Education surcharge and local education surcharge |
2,432,194.74 6,150,636.51
| Land use tax | 1,046,187.10 | 1,153,638.19 | ||
| Environmental protection tax | 36,910.58 | 35,809.57 | ||
| Stamp duty | 798,606.76 | 2,101,599.24 | ||
| Total | 84,539,799.83 | 322,101,244.04 |
Other description
41. Other payables
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Dividends payable | 566,642,012.68 | |
| Other payables | 351,014,682.06 | 570,843,242.88 |
| Total | 917,656,694.74 | 570,843,242.88 |
(1) Interest payable
Unit: RMB
| Item | Closing Balance | Beginning balance |
Important overdue and unpaid interest:
Unit: RMB
| Borrower | Overdue amount | Overdue reason |
Other description:
(2) Dividends payable
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Common stock dividends | 566,642,012.68 | |
| Total | 566,642,012.68 |
(3) Other payables
1) Other payables listed by nature
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Intercourse funds with related parties | 4,356,725.66 | 83,907,582.49 |
| Intercourse funds with the third parties | 42,400,567.41 | 19,647,462.33 |
| Margin and deposit | 102,444,734.32 | 170,299,618.40 |
| Commission | 42,892,474.77 | 58,911,887.83 |
| Freight and other accrued expenses | 143,513,054.23 | 222,336,599.71 |
| Others | 15,407,125.67 | 15,740,092.12 |
| Total | 351,014,682.06 | 570,843,242.88 |
2) Important other payable with the aging more than 1 year
Unit: RMBItem Closing Balance
Other description
42. Liabilities held for sales
Unit: RMB
Reasons for failure of payment
or carryoverItem
| Item | Closing Balance | Beginning balance |
Other description
43. Non-current liabilities due within one year
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Long-term borrowing due within one year | 20,000,000.00 | 8,011,977.78 |
| Bonds payable due within one year | 310,760.32 | 620,000.00 |
| Lease liabilities due within one year | 171,449,633.15 | 207,314,911.54 |
| Total | 191,760,393.47 | 215,946,889.32 |
Other description:
44. Other current liabilities
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Refund payable | 2,502,622.92 | 3,963,108.90 |
| Output tax to be transferred | 16,927,009.27 | 55,641,482.95 |
| Total | 19,429,632.19 | 59,604,591.85 |
Increase/decrease of short-term bonds payable:
Unit: RMB
of
| bond |
Bookvalue
Issuedate
Maturityof bond
Issueamount
Beginning
balance
Current
issue
interest at
| book value | Amortization |
of premium
Currentrepayment
ClosingBalance
| and discount | ||||||||||
| Total |
Other description:
45. Long-term loans
(1) Classification of long-term borrowing
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Debt of honor | 180000000.00 | |
| Total | 180000000.00 |
Description on the classification of long-term borrowing:
Other descriptions, including interest rate range:
46. Bonds payable
(1) Bonds payable
Unit: RMB
| Item | Closing Balance | Beginning balance |
(2) Increase and decrease of bonds payable (excluding preferred shares, perpetual bonds and other financial instruments
classified as financial liabilities)
Unit: RMB
bond
Bookvalue
IssuedateMaturityof bond
Issueamount
Beginningbalance
Currentissue
| Name of | Accrued |
interest at
| book value | Amortization |
of premium
Currentrepayment
ClosingBalance
| and discount | ||||||||||
| Total | -- |
(3) Description of conditions and time of conversion of convertible corporate bonds
(4) Description of other financial instruments classified as financial liabilities
Basic information of the outstanding preferred shares, perpetual bonds and other financial instruments at the end of the periodTable of changes in outstanding financial instruments, such as preferred shares, perpetual bonds at the end of the period
Unit: RMB
financial
| instruments | The beginning of the period |
Increase in current period Decrease in current period
The end of the period
| Quantity | Book value | Quantity | Book value | Quantity | Book value | Quantity | Book value |
Description of the basis for the classification of other financial instruments into financial liabilitiesOther description
47. Lease liabilities
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Lease payments | 341,355,691.18 | 365,030,013.20 |
| Unrecognized financing expenses | -37,408,609.16 | -38,570,315.30 |
| Total | 303,947,082.02 | 326,459,697.90 |
Other description
48. Long-term payable
Unit: RMB
| Item | Closing Balance | Beginning balance |
(1) Long-term payables listed by nature
Unit: RMB
| Item | Closing Balance | Beginning balance |
Other description:
(2) Special accounts payable
Unit: RMBItem Beginning balance
| Increase in current period | Decrease in current period |
Closing Balance CausesOther description:
49. Long-term payroll payable
(1) Table of long-term payroll payable
Unit: RMB
| Item | Closing Balance | Beginning balance |
| I Welfare after dismission - net liabilities of defined benefit plan |
8,890,398.26 9,199,637.94
| Less: Long-term payroll payable due within one year |
-310,760.32 -620,000.00
| Total | 8,579,637.94 | 8,579,637.94 |
(2) Changes in defined benefit plan
Present value of defined benefit plan obligations:
Unit: RMB
| Item | Amount incurred in current period | Amount incurred in previous period |
Planned assets:
Unit: RMB
| Item | Amount incurred in current period | Amount incurred in previous period |
Net liabilities (net assets) of defined benefit plan
Unit: RMB
| Item | Amount incurred in current period | Amount incurred in previous period |
Description of the content of defined benefit plan and its related risks, impact on the Company's future cash flow, time anduncertainty:
Description of significant actuarial assumptions and sensitivity analysis results of defined benefit plan:
Other description:
50. Estimated liabilities
Unit: RMB
| Item | Closing Balance | Beginning balance | Causes |
Other descriptions, including relevant important assumptions and estimation descriptions of important estimated liabilities:
51. Deferred income
Unit: RMBItem Beginning balance Increase in current period
Closing Balance Causes
| Decrease in current period | ||
| Government |
subsidies
| 98791412.91 | 33721500.00 | 5902349.60 | 126610563.31 | Government subsidies related to assets | |
| Total | 98791412.91 | 33721500.00 | 5902349.60 | 126610563.31 |
Projects involving government subsidies:
Unit: RMBLiability item Beginning balance
Amount ofadditionalsubsidy incurrent period
included incurrent non-
operating
| income |
Amount includedin other incomein current period
offsettingthe cost inthe current
| period |
Otherchanges
ClosingBalance
Asset/income related
provincial
| science and |
technology
second batch) -Huanggang
| Winner |
412,500.00 75,000.00 337,500.00
Assetrelated
Huanggang
| Chibi Avenue |
demolitioncompanyplanningchange -Huanggang
2,271,374.07 52,822.64 2,218,551.43
Assetrelated
Liability item Beginning balance
Amount ofadditionalsubsidy incurrent period
included incurrent non-
operating
| income |
Amount includedin other incomein current period
offsettingthe cost inthe current
| period |
Otherchanges
ClosingBalance
Asset/income related
544,772.41 102,994.91 441,777.50
Assetrelated
| Technology Center R & D project subsidy - the Company |
| new medical |
bandage factory
Winner
| company in Pailou Town, |
Jingmen -Jingmen
589,330.00 10,160.00 579,170.00
Assetrelated
| Winner |
| Subsidy funds for municipal |
governmentprojectinfrastructureconstruction -Chongyang
8,443,312.50 206,775.00 8,236,537.50
Assetrelated
| Winner |
| Subsidy funds for land and subsidy funds for sewage |
treatment -
9,395,833.43 203,416.62 9,192,416.81
Assetrelated
| Jiayu Winner |
| 2015 |
Huanggangprovincialbudgetinvestmentplan,HuanggangWinner’scottonspunlacednonwoven
extension
| project subsidy |
- Huanggang
165,000.00 30,000.00 135,000.00
Assetrelated
Liability item Beginning balance
Amount ofadditionalsubsidy incurrent period
included incurrent non-
operating
| income |
Amount includedin other incomein current period
offsettingthe cost inthe current
| period |
Otherchanges
ClosingBalance
Asset/income related
Huanggang
| urban industrial |
development
subsidy -Huanggang
| Winner |
68,750.00 12,500.00 56,250.00
Assetrelated
industrial
| development in |
2015
productsproduction line)- WinnerMedical
| (Huanggang) |
130,000.00 20,000.00 110,000.00
Assetrelated
transformation
| of surgical |
consumables
837,000.00 93,000.00 744,000.00
Assetrelated
| production line - the Company |
| 2016 Tianmen industrial key |
technicaltransformation
project reward -Tianmen
| Winner |
212,477.00 25,002.00 187,475.00
Assetrelated
expansionequipment
| subsidy for |
Tianmen
trade - Tianmen
| Winner |
70,000.00 7,500.00 62,500.00
Assetrelated
boiler subsidy -Yichang
| Winner |
68,000.17 7,999.98 60,000.19
Assetrelated
traditionalindustrytransformation
| subsidy in 2017 |
- Huanggang
888,990.98 104,587.14 784,403.84
Assetrelated
Liability item Beginning balance
Amount ofadditionalsubsidy incurrent period
included incurrent non-operating
| income |
Amount includedin other incomein current period
offsettingthe cost inthe current
| period |
Otherchanges
ClosingBalance
Asset/income related
spunlaced non-
| woven fabric project with the production of |
15,000 tons -Tianmen
316,981.31 39,622.62 277,358.69
Assetrelated
| Winner |
| Key technical reform and |
expansion
spunlungewipes
| production line |
project) -Tianmen
486,487.00 54,054.00 432,433.00
Assetrelated
| Winner |
| Production line project with an annual output of 120 million bales of cotton |
fabric in 2017 -Tianmen
491,826.84 53,653.86 438,172.98
Assetrelated
| Winner |
| Second batch of special funds for the |
transformation
industries -Yichang
| Winner |
131,250.16 12,499.98 118,750.18
Assetrelated
innovation
| subsidy for the |
Purcotton
ExpansionProject -Jingmen
| Winner |
4,159,154.45 83,183.10 4,075,971.35
Assetrelated
transformation
| and expansion projects (cotton spun laced |
wipesproductionproject) -WinnerMedical
641,666.79 49,999.98 591,666.81
Assetrelated
Liability item Beginning balance
Amount ofadditionalsubsidy incurrent period
included incurrent non-operating
| income |
Amount includedin other incomein current period
offsettingthe cost inthe current
| period |
Otherchanges
ClosingBalance
Asset/income related
research,
| science and innovation on |
the technologyof thermo-responsive self-
regeneration
| and repair |
materials - the
552,903.04 119,434.00 433,469.04
Assetrelated
| Company |
| 2018 provincial |
traditionalindustrytransformation
liquidation
| block fund |
subsidies -
1,286,190.50 26,428.62 1,259,761.88
Assetrelated
| Jiayu Winner |
| Subsidies for first batch of |
technologicaltransformation
industrial
| enterprises in |
2018 -Chongyang
584,217.97 53,078.56 531,139.41
Assetrelated
| Winner |
| Provincial |
traditionalindustrytransformation
funds allocation
| plan in Tianmen City |
in 2019 -Tianmen
887,586.22 68,275.86 819,310.36
Assetrelated
| Winner |
| 2018 urban |
technicaltransformation
HuanggangCity -Huanggang
| Winner |
305,555.66 27,777.76 277,777.90
Assetrelated
Liability item Beginning balance
Amount ofadditionalsubsidy incurrent period
included incurrent non-operating
| income |
Amount includedin other incomein current period
offsettingthe cost inthe current
| period |
Otherchanges
ClosingBalance
Asset/income related
traditional
| subsidies in |
2019 -Huanggang
847,000.00 60,500.00 786,500.00
Assetrelated
| Winner |
| 2019 district |
technicalimprovementsubsidy -Jingmen
320,236.88 14,556.18 305,680.70
Assetrelated
| Winner |
| Technical |
transformation
materialproduction
| enterprises for Shenzhen in |
2020 - the
15,500,000.00 1,000,000.00 14,500,000.00
Assetrelated
| Company |
| 2019 district |
technicalimprovementsubsidy -Jingmen
327,999.95 14,909.10 313,090.85
Assetrelated
| Winner |
| 2019 special fund project of |
thetransformation
industries -
| Jiayu Winner |
669,642.92 13,392.84 656,250.08
Assetrelated
- Chongyang
| Winner |
2,846,846.83 216,216.22 2,630,630.61
Assetrelated
purchasing
| equipment in key enterprises of "Three |
Batches" -WinnerMedical
4,415,630.25 281,848.74 4,133,781.51
Assetrelated
Liability item Beginning balance
Amount ofadditionalsubsidy incurrent period
included incurrent non-operating
| income |
Amount includedin other incomein current period
offsettingthe cost inthe current
| period |
Otherchanges
ClosingBalance
Asset/income related
onimplementing
| the technical |
reformation
municipalindustrial
| investment and |
technicaltransformation
Technology
| and Economic |
Information
XinzhouDistrict -WinnerMedical
| (Wuhan) |
6,544,278.21 291,144.36 6,253,133.85
Assetrelated
capacity
| expansion & |
technical
enterprisesproducingmaterials -WinnerMedical
| (Wuhan) |
2,187,396.35 5,351.53 2,182,044.82
Assetrelated
high-quality
| development of |
manufacturing -Huanggang
2,355,140.18 168,224.30 2,186,915.88
Assetrelated
| Winner |
| 2021 urban |
technicaltransformationfund -Huanggang
1,358,958.35 82,361.10 1,276,597.25
Assetrelated
| Winner |
| Equipment subsidies in |
2021 - WinnerMedical
3,825,000.00 850,000.00 2,975,000.00
Assetrelated
| (Jingmen) |
| 2020 Provincial special funds |
for the high-quality
manufacturing -
| Jiayu Winner |
798,245.62 52,631.58 745,614.04
Assetrelated
equipmentinvestmentsubsidies(SpunlacePhase III) -Tianmen
| Winner |
14,625,000.00 750,000.00 13,875,000.00
Assetrelated
Liability item Beginning balance
Amount ofadditionalsubsidy incurrent period
included incurrent non-operating
| income |
Amount includedin other incomein current period
offsettingthe cost inthe current
| period |
Otherchanges
ClosingBalance
Asset/income related
provincial
| special funds for the development of |
manufacturing -
770,234.35 62,730.24 707,504.11
Assetrelated
| Wuhan Winner |
| Received subsidies from |
the
governmentemergencymaterial
| security system for production |
capacityimprovement -
1,923,950.50 102,435.32 1,821,515.18
Assetrelated
| Wuhan Winner |
| Technical |
transformation
areas in 2022 -WinnerMedical(Huanggang)
| (1*) |
4,094,200.00 0.00 4,094,200.00
Assetrelated
technicalupgradingproject -Chongyang
| Winner |
534,545.45 32,727.28 501,818.17
Assetrelated
for multi-layer
| baby facial |
towelproductionprojects in 2022- WinnerMedical
270,581.49 5,057.58 265,523.91
Assetrelated
| (Yichang) |
| Special fund for high quality development of |
manufacturingin
2021 - WinnerMedical
| (Yichang) |
581,197.50 29,805.00 551,392.50
Assetrelated
funds for high-quality
| development in |
2023 - WinnerMedical
6,800,000.00 6,800,000.00
Assetrelated
| (Huanggang) |
| Award for |
technicalupgrading
- WinnerMedical
| (Chongyang) |
800,000.00 28,828.83 771,171.17
Assetrelated
Liability item Beginning balance
Amount ofadditionalsubsidy incurrent period
included incurrent non-operating
| income |
Amount includedin other incomein current period
offsettingthe cost inthe current
| period |
Otherchanges
ClosingBalance
Asset/income related
for the high-quality
| development of |
manufacturingin 2023 -WinnerMedical
2,850,000.00 102,702.71 2,747,297.29
Assetrelated
| (Chongyang) |
| Special funds for technical |
transformation
Science,Technology
| and Economic |
Information
2022 - WinnerMedical
| (Wuhan) |
2,802,500.00 194,085.06 2,608,414.94
Assetrelated
fixed
| investment of |
special account
High-techIndustrialDevelopmentZoneManagementCommittee -WinnerMedical
| (Hunan) |
20,469,000.00 20,469,000.00
Assetrelated
Others 54,167.58 3,075.00 51,092.58
Total 98,791,412.91 33,721,500.00 0.00 5,902,349.60 0.00 0.00
| Asset related | |
| 126,610,563.31 |
Other description:
52. Other non-current liabilities
Unit: RMB
| Item | Closing Balance | Beginning balance |
Other description:
53. Capital stock
Unit: RMBBeginning balance
Closing BalanceNew issueof shares
Sharedonation
| Increase/decrease (+, -) | ||
| Share capital | ||
increase from
Others Subtotal
| reserved funds | ||
| Total amount of shares |
426,492,308.00
167,895,059.00
167,895,059.00 594,387,367.00
Other description:
54. Other equity instruments
(1) Basic information of the outstanding preferred shares, perpetual bonds and other financial instruments at the end of the
period
(2) Table of changes in outstanding financial instruments, such as preferred shares, perpetual bonds at the end of the period
Unit: RMB
financial
| instruments | The beginning of the period |
Increase in current period Decrease in current period
The end of the period
| Quantity | Book value | Quantity | Book value | Quantity | Book value | Quantity | Book value |
The increase and decrease of other equity instruments in current period, the reasons for the change, and the basis of relevantaccounting treatment:
Other description:
55. Capital reserve
Unit: RMBItem Beginning balance
| Increase in current period | Decrease in current period |
Closing Balance
4,457,762,555.30 167,895,059.00 4,289,867,496.30
| Capital premium (capital stock premium) | ||||
| Other capital surplus | 88,485,055.94 | 969,372.65 | 89,454,428.59 | |
| Total | 4,546,247,611.24 | 969,372.65 | 167,895,059.00 | 4,379,321,924.89 |
Other description, including current increase/decrease and change reasons:
56. Treasury stock
Unit: RMB
Item Beginning balance
| Increase in current period | Decrease in current period |
Closing Balance
| Treasury stock | 500,082,734.11 | 500,082,734.11 | ||
| Total | 500,082,734.11 | 500,082,734.11 |
Other description, including current increase/decrease and change reasons:
57. Other comprehensive income
Unit: RMB
Item
Beginningbalance
Amountbeforecurrentincome
tax
Less: amountincluded in othercomprehensive
income inprevious periodtransferred intoprofit and loss in
current period
| Amount incurred in current period | ||
| Less: amount | ||
included inother
income inpreviousperiodtransferredinto retained
income in
| current period |
Less:
Incometaxexpenses
Attributableto the parent
companyafter tax
Attributableto minorityshareholders
after tax
ClosingBalance
comprehensive
| income that can't be reclassified into profit and loss |
601,000.00
601,000.00
| Including: Changes |
arising from re-
601,000.00
| measurement for defined benefit plans |
601,000.00
| II. Other |
comprehensive
181,778.15
2,650,491.
1,563,872.28 1,086,619.30
| income that will be reclassified into profit and loss |
1,745,650.43
| Balance arising from the translation of foreign currency financial statements |
181,778.15
2,650,491.
1,563,872.28 1,086,619.30
1,745,650.43
| Total other |
comprehensive
782,778.15
2,650,491.
1,563,872.28 1,086,619.30
| income |
2,346,650.43
Other explanations, including the adjustment of the effective part of the cash flow hedging gains and losses transferred to theinitial recognized amount of the hedged item:
58. Special reserve
Unit: yuanItem Beginning balance
Increase in current
period
| Increase in current period | Decrease in current period |
Closing BalanceOther description, including current increase/decrease and change reasons:
59. Surplus reserve
Unit: yuanItem Beginning balance
| Increase in current period | Decrease in current period |
Closing Balance
| Statutory surplus reserves | 420,212,778.13 | 420,212,778.13 | ||
| Total | 420,212,778.13 | 420,212,778.13 |
Description of surplus reserves, including current increase/decrease and change reasons:
60. Undistributed profit
Unit: RMB
| Item | Current period | Prior period |
| Undistributed profit at the end of previous period before adjustment |
6,810,953,829.30 5,538,135,285.97
15,161,518.35
| Total undistributed profits at the beginning of the adjustment period (+ for increase and - for decrease) |
| Undistributed profits at the beginning of the period after adjustment |
6,826,115,347.65
681,617,022.68 1,650,582,427.43
| Plus: Net profits attributable to the owners of parent company in current period | ||
| Common stock dividends payable | 797,501,533.10 | 377,763,884.10 |
| Undistributed profits at the end of the period | 6,710,230,837.23 | 6,810,953,829.30 |
Details of undistributed profits at the beginning of the adjustment period:
1). Due to retroactive adjustment of Accounting Standards for Business Enterprises and relevant new regulations, RMB 0.00
of the undistributed profit at the beginning of the period was affected.
2). Due to the change of accounting policy, RMB 15,161,518.35 of the undistributed profit at the beginning of the period was
affected.
3). Due to the correction of major accounting errors, RMB 0.00 of the undistributed profit at the beginning of the period was
affected.
4). Due to the change of consolidation scope caused by the same control, RMB 0.00 of the undistributed profit at the
beginning of the period was affected.
5). RMB 0.00 of the undistributed profit at the beginning of the period was affected by the total amount of other adjustments
61. Operating income and cost
Unit: RMBItem
| Amount incurred in current period | Amount incurred in previous period | |||
| Income | Cost | Income | Cost | |
| Main business | 4,236,069,768.54 | 2,053,153,499.31 | 5,113,877,083.65 | 2,613,729,979.52 |
| Other businesses | 30,768,270.12 | 18,274,707.41 | 44,067,412.07 | 26,826,584.12 |
| Total | 4,266,838,038.66 | 2,071,428,206.72 | 5,157,944,495.72 | 2,640,556,563.64 |
Income related information:
Unit: RMBContract classification Segment 1 Segment 2
Medical consumables
(segment 1)
goods
| (Segment 2) |
Total
| Type of goods | |||||
| Including: | |||||
| Main business | 2,173,056,329.26 | 2,063,013,439.28 | 4,236,069,768.54 | ||
| Other businesses | 30,768,270.12 | 30,768,270.12 | |||
| Classified by operating area | |||||
| Including: | |||||
| Domestic sales | 1,454,062,379.79 | 2,063,013,439.28 | 3,517,075,819.07 | ||
| Overseas sales | 749,762,219.59 | 749,762,219.59 | |||
| Type of markets or clients | |||||
| Including: | |||||
| Type of contracts | |||||
| Including: | |||||
| Sorted by time of goods transfer |
| Including: | |||||
| Sorted by contract duration | |||||
| Including: | |||||
| Sorted by sales channels | |||||
| Including: | |||||
| Total | 2,203,824,599.38 | 2,063,013,439.28 | 4,266,838,038.66 |
Information related to performance obligations:
N/AInformation related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations signed but not yet performed or completed at the end ofthis reporting period is RMB 0.00, of which RMB 0.00 is expected to be recognized as revenue in year 0, RMB 0.00 isexpected to be recognized as revenue in year 0, and RMB 0.00 is expected to be recognized as revenue in year 0.Other description
62. Taxes and surcharges
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period | ||
| Urban maintenance and construction tax | 14,156,008.49 | 18,495,175.61 |
| Education surcharge | 6,616,460.38 | 8,259,222.82 |
| Housing property tax | 6,353,206.48 | 4,020,316.15 |
| Land use tax | 2,683,790.39 | 1,666,760.16 |
| Vehicle and vessel use tax | 11,808.84 | 8,823.96 |
| Stamp duty | 3,296,228.60 | 3,124,207.56 |
| Surcharge for local education | 4,096,996.80 | 5,505,078.38 |
| Environmental protection tax | 61,532.02 | 79,776.79 |
| Others | 70,176.61 | |
| Total | 37,346,208.61 | 41,159,361.43 |
Other description:
63. Selling expenses
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period | ||
| Employee compensation | 315,528,733.79 | 322,603,966.58 |
| Travel expenses | 10,524,681.48 | 3,848,684.40 |
| Office communication costs | 6,090,498.20 | 8,396,979.22 |
| Sales commission | 125,398,549.11 | 118,542,577.52 |
| Insurance premiums | 2,967,753.30 | 3,018,944.71 |
| Depreciation and amortization | 112,902,943.06 | 156,566,925.78 |
| Advertising and promotion expenses | 276,337,254.06 | 235,198,138.16 |
| Rent | 77,531,439.61 | 66,454,933.41 |
| Others | 33,161,058.83 | 35,540,974.96 |
| Total | 960,442,911.44 | 950,172,124.74 |
Other description:
64. Administrative expenses
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period | ||
| Employee compensation | 166,770,159.81 | 153,347,954.56 |
| Equity incentive fee | 969,372.65 | 42,396,249.94 |
| Depreciation and amortization charge | 62,559,814.44 | 31,523,347.61 |
| Consultant and intermediary service fees | 5,393,034.14 | 17,011,517.75 |
| Maintenance cost | 12,638,086.57 | 15,965,110.27 |
| Communication and network services, cloud service fees, etc. |
8,675,647.54 10,844,678.10
| Water/electricity fee | 5,190,635.07 | 4,826,421.80 |
| Material consumption | 872,320.18 | 2,583,067.32 |
| Recruitment fee | 462,635.41 | 2,138,742.55 |
| Others | 26,064,996.33 | 44,754,793.42 |
| Total | 289,596,702.14 | 325,391,883.32 |
Other description
65. R&D expenses
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period | ||
| Employee compensation | 91,378,032.54 | 80,616,282.16 |
| Depreciation and amortization | 12,257,120.71 | 9,034,205.00 |
| Material | 47,320,354.16 | 97,340,715.49 |
| Other miscellaneous expenses | 43,680,694.73 | 51,653,295.97 |
| Total | 194,636,202.14 | 238,644,498.62 |
Other description
66. Financial expenses
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period | ||
| Interest expenses | 32,891,514.25 | 19,119,362.58 |
| Including: Interest expense on lease liabilities | 11,671,553.10 | 13,353,482.15 |
| Less: Interest revenue | 69,863,134.66 | 62,087,089.05 |
| Exchange gain or loss | -16,974,769.11 | -31,671,165.22 |
| Others | 1,151,962.83 | 1,019,739.35 |
| Total | -52,794,426.69 | -73,619,152.34 |
Other description
67. Other incomes
Unit: RMBOther sources of income Amount incurred in current period
| Amount incurred in previous period | ||
| Government subsidies | 46,680,694.51 | 28,747,393.29 |
68. Investment income
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period | ||
| Long-term equity investment gains measured by employing the equity method |
1,580,818.74 2,408,209.89
| Investment income from purchasing financial products | 37,831,622.39 | 29,043,980.01 |
| Total | 39,412,441.13 | 31,452,189.90 |
Other description
69. Net gain on exposure hedging
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period |
Other description
70. Income from changes in fair value
Unit: RMBSources of gains from fair value change
| Amount incurred in current period | Amount incurred in previous period |
Income from structured deposits of bank financial productsand trust products - Structured deposits
59,639,836.03 35,182,098.83
| Income from structured deposits of bank financial products and trust products - Structured deposits | ||
| Total | 59,639,836.03 | 35,182,098.83 |
Other description:
71. Credit impairment Loss
Unit: RMB
Item
| Amount incurred in current period | Amount incurred in previous period | |
| Loss on bad debts of other receivables | 254,779.09 | 571,417.03 |
| Loss on bad debts of accounts receivable | 2,577,194.52 | -8,320,585.14 |
| Total | 2,831,973.61 | -7,749,168.11 |
Other description
72. Assets impairment losses
Unit: RMB
Item
| Amount incurred in current period | Amount incurred in previous period | |
| II. Inventory falling price loss and impairment loss of contract performance costs |
-100,794,883.37
-71,699,155.49
| V. Impairment loss of fixed assets | -1,346,409.85 | |
| Total | -100,794,883.37 | -73,045,565.34 |
Other description:
73. Gains from asset disposal
Unit: RMBSource of income from disposal of assets
| Amount incurred in current period | Amount incurred in previous period | |
| Net gain or loss on disposal of long-term assets | 5,324,751.10 | -547,132.74 |
74. Non-operating income
Unit: RMBItem
Amount incurred in current
period
Amount incurred in
previous period
recurring gains and losses of the
| current period | |||
| Non-current assets scrap gains | 1,894,252.58 | 755,380.00 | 1,894,252.58 |
| Income from compensation or fines | 181,446.52 | 509,551.22 | 181,446.52 |
| Government subsidies | 78,000.00 | 8,545.43 | 78,000.00 |
| Others | 4,548,899.67 | 879,459.00 | 4,548,899.67 |
| Total | 6,702,598.77 | 2,152,935.65 | 6,702,598.77 |
Government subsidies included in current profit and loss:
Unit: RMBSubsidizedproject
Granting
subject
Granting
reason
Type
ofnature
subsidy affectsthe profit andloss of current
| year |
Specialsubsidy or
not
Amountincurred in
currentperiod
Amountincurred inpreviousperiod
Asset/incomerelatedOther description:
75. Non-operating expenses
Unit: RMBItem
Amount incurred in current
period
previous period
| Amounts included in the non- |
recurring gains and losses of the
| current period | |||
| External donations | 225,225.18 | 956,452.02 | 225,225.18 |
| Loss on damage and scrap of non-current assets |
3,478,280.51 2,609,947.50 3,478,280.51
326,411.19 672,809.18 326,411.19
| Compensation or amercement outlay | |||
| Others | 877,031.15 | 4,394,513.39 | 877,031.15 |
| Total | 4,906,948.03 | 8,633,722.09 | 4,906,948.03 |
Other description:
76. Income tax expenses
(1) Income tax expense table
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period | ||
| Current income tax expenses | 90,099,787.82 | 158,472,538.38 |
| Deferred income tax expenses | 24,771,163.62 | -12,007,847.03 |
| Adjustment of the previous annual income tax amount in the current period |
15,507.71
-794,409.01
| Total | 114,886,459.15 | 145,670,282.34 |
(2) Accounting profit and income tax expense adjustment process
Unit: RMBItem
| Amount incurred in current period | ||
| Total profit | 821,072,698.05 | |
| Income tax expenses calculated at the appropriate/applicable tax rate | 123,160,904.71 | |
| Impact of different tax rates applied on subsidiaries | 10,255,854.66 | |
| Impact of income tax before adjustment | 15,507.71 | |
| Impact of weighted deduction of R&D costs | -18,516,794.19 | |
| Impact of weighted deduction of wages for the disabled | -29,013.74 | |
| Income tax expenses | 114,886,459.15 |
Other description:
NA
77. Other comprehensive income
See Note 57 for details
78. Cash flow statement items
(1) Other cash received related to operating activities
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period | ||
| Deposit, margin and quality guarantee deposit received |
55,581,827.38 14,529,056.53
| Interest income received | 14,608,751.97 | 7,191,289.35 |
| Government subsidies received | 74,577,844.91 | 18,335,704.11 |
| Others | 7,440,857.43 | 16,052,169.59 |
| Total | 152,209,281.69 | 56,108,219.58 |
Explanation on other cash received related to operating activities:
(2) Other cash paid related to operating activities
Unit: RMBItem Amount incurred in current period
| Amount incurred in previous period | ||
| Management and development costs paid in cash | 96,646,768.64 | 130,183,042.11 |
| Selling expenses paid in cash | 129,897,821.41 | 117,260,516.70 |
| Deposit, margin and quality guarantee deposit paid | 15,415,236.51 | 16,980,843.60 |
| Bank handling charge | 1,151,962.83 | 1,019,739.35 |
| Others | 107,076,248.17 | 101,105,657.83 |
| Total | 350,188,037.56 | 366,549,799.59 |
Description of other cash paid related to operating activities
(3) Other cash received related to investment activities
Unit: RMBItem Amount incurred in current period
Description of other cash received related to investment activities:
(4) Other cash paid related to investment activities
Unit: yuanItem Amount incurred in current period
Amount incurred in previous
periodAmount incurred in previous
period
Description of other cash paid related to investment activities:
(5) Other cash received related to financing activities
Unit: RMBItem
| Amount incurred in current period | Amount incurred in previous period | |
| L/C loan deposit recovered | 50,000,000.00 | |
| Total | 50,000,000.00 |
Description of other cash received related to financing activities:
(6) Other cash paid related to financing activities
Unit: RMBItem
| Amount incurred in current period | Amount incurred in previous period | |
| Lease liability principal and interest paid on lease payments | 106,678,094.74 | 128,085,353.13 |
| Treasury stock repurchase paid | 242,090,367.43 | |
| L/C loan deposit paid | 50,000,000.00 | |
| Total | 106,678,094.74 | 420,175,720.56 |
Description of other cash paid related to financing activities:
79. Further information on cash flow statement
(1) Further information on cash flow statement
Unit: RMB
| Further Information | Current amount | Last term amount |
1. Reconciliation from net profits to cash flows from operating
activities:
| 1. Reconciliation from net profits to cash flows from operating activities: | ||
| Net profit | 706,186,238.90 | 897,527,963.36 |
| Plus: Provision for impairment of assets | 97,962,909.76 | 80,794,733.45 |
| Depreciation of fixed assets, oil and gas assets and productive biological assets |
119,399,692.26 84,546,487.61
| Depreciation of Right-of-use assets | 97,174,613.52 | 114,777,463.11 |
| Amortization of intangible assets | 35,500,790.47 | 11,264,308.35 |
| Amortization of long-term deferred expenses | 25,789,908.37 | 34,480,229.33 |
| Losses on disposal of fixed assets, intangible assets and other long-term assets (gains expressed with "-") |
-5,324,751.10 547,132.74
| Loss on retirement of fixed assets (gains expressed with "-") | 1,584,027.93 | 1,854,567.50 |
| Loss from fair value change (gains expressed with "-") | -59,639,836.03 | -35,182,098.83 |
| Further Information | Current amount | Last term amount |
| Financial expenses (gains expressed with "-") | -28,104,046.05 | -63,381,020.43 |
| Investment losses (gains expressed with "-") | -39,412,441.13 | -31,452,189.90 |
| Decreased in deferred income tax assets (increase expressed with "-") |
39,426,730.71 -10,159,727.35
-13,913,432.61 -1,977,084.09
| Increase in deferred income tax liabilities (decrease expressed with "-") | ||
| Decrease in inventories (increase expressed with "-") | 48,071,373.02 | -61,057,169.21 |
| Decrease in operating receivables (increase expressed with "-") | 319,055,153.50 | -395,035,590.30 |
| Increase in operating payables (decrease expressed with "-") | -1,214,366,741.68 | 141,628,284.84 |
| Others | 28,788,523.05 | 31,974,609.20 |
| Net cash flow from operating activities | 158,178,712.89 | 801,150,899.38 |
| 2. Significant investment and financing activities not involving cash deposit and withdrawal: |
| Conversion of debt into capital | ||
| Convertible bonds due within 1 year | ||
| Fixed assets under financing lease | ||
| 3. Net changes in cash and cash equivalents: | ||
| Ending balance of cash | 4,236,440,239.16 | 4,143,545,526.92 |
| Less: Beginning balance of cash | 4,370,821,958.17 | 4,088,612,262.04 |
| Plus: Ending balance of cash equivalents | ||
| Less: Ending balance of cash equivalents | ||
| Net increase in cash and cash equivalents | -134,381,719.01 | 54,933,264.88 |
(2) Net cash paid for obtaining subsidiaries in current period
Unit: RMB
| Amount | ||
| Cash or cash equivalents paid in the current period for business combinations occurred in current period |
30,000,000.00
| Including: | ||
| Shanghai Hongsong | 30,000,000.00 | |
| Less: Cash and cash equivalents held by the Company on the acquisition date |
8,823,863.68
| Including: | ||
| Shanghai Hongsong | 8,823,863.68 | |
| Including: | ||
| Net cash paid for obtaining subsidiaries | 21,176,136.32 |
Other description:
(3) Net cash from disposal of subsidiaries in current period
Unit: RMB
| Amount | ||
| Including: | ||
| Including: | ||
| Including: |
Other description:
(4) Composition of cash and cash equivalents
Unit: RMB
| Item | Closing Balance | Beginning balance |
| I. Cash | 4,236,440,239.16 | 4,370,821,958.17 |
| Including: cash on hand | 124,589.58 | 246,825.76 |
| Bank deposit readily available for payment | 4,235,674,316.66 | 4,169,305,311.38 |
| Other monetary capital readily available for payment |
641,332.92
201,269,821.03
| III. Balance of cash and cash equivalents at end of period |
4,236,440,239.16
4,370,821,958.17Other description:
80. Notes to items in statement of owner's equity
State the name of "other" items and the amount of adjustment to the ending balance of previous year:
Not applicable.
81. Assets with ownership or use rights restricted
Unit: RMB
Item
| Item | Ending book value | Causes for restriction |
Cash and cashequivalents
106,756,088.22
| Cash and cash equivalents | For details, see "VII. Notes to Items in Consolidated Financial Statements / 1. Monetary Funds". | |
| Total | 106,756,088.22 |
Other description:
82. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMBItem Ending balance in foreign currency
| Conversion exchange rate | Ending balance converted to RMB | ||
| Cash and cash equivalents | 165,609,048.09 | ||
| Including: USD | 19,060,646.41 | 7.2258 | 137,728,418.80 |
| EUR | 265,100.94 | 7.8771 | 2,088,226.61 |
| HKD | 25,155,123.37 | 0.92198 | 23,192,520.64 |
| Yen | 12,797,912.00 | 0.050094 | 641,098.60 |
| Ringgit | 210,422.30 | 1.55118 | 326,402.86 |
| Mexican peso | 3,854,044.57 | 0.42355 | 1,632,380.58 |
| Accounts receivable | 201,971,272.20 | ||
| Including: USD | 26,478,710.84 | 7.2258 | 191,329,868.77 |
| EUR | 477,745.59 | 7.8771 | 3,763,249.79 |
| HKD | 7,448,366.63 | 0.92198 | 6,867,245.07 |
| Yen | 217,761.98 | 0.050094 | 10,908.57 |
| Long-term loans | |||
| Including: USD | |||
| EUR | |||
| HKD | |||
| Other receivables | 1,698,335.39 | ||
| Including: USD | 155,356.35 | 7.2258 | 1,122,573.91 |
| HKD | 624,254.00 | 0.92198 | 575,549.70 |
| Mexican peso | 500.00 | 0.42355 | 211.78 |
| Accounts payable | 1,396,421.36 | ||
| Including: USD | 148,870.71 | 7.2258 | 1,075,709.98 |
| HKD | 334,167.00 | 0.92198 | 308,095.29 |
| Mexican peso | 29,786.54 | 0.42355 | 12,616.09 |
| Other payables | 35,199,937.02 | ||
| Including: USD | 4,493,170.97 | 7.2258 | 32,466,754.80 |
| EUR | 15,985.29 | 7.8771 | 125,917.73 |
| HKD | 2,446,771.22 | 0.92198 | 2,255,874.13 |
| Ringgit | 226,531.00 | 1.55118 | 351,390.36 |
Other description:
(2) Description of overseas operating entities, including for important overseas operating entities, the main overseas
business place, recording currency and selection basis shall be disclosed, and the reasons for changes in recording currencyshall also be disclosed.? Applicable ? Not applicable
83. Hedge
Disclose the qualitative and quantitative information of hedging items, related hedging instruments and hedged risksaccording to the hedging category:
84. Government subsidies
(1) Basic information of government subsidies
Unit: yuanType Amount
| Presented item | Amount recorded in current profit and loss | ||
| 1. Government subsidies related to assets | |||
| Subsidy of 2014 Hubei provincial science and technology support plan project (the second batch) - Huanggang Winner | |||
1,500,000.00
75,000.00
| Deferred income | ||
| Subsidy for Huanggang Chibi Avenue demolition company planning change - Huanggang Winner |
3,169,359.20
52,822.64Technology Center R & D project subsidy - the Company 12,420,000.00
| Deferred income |
| Deferred income |
102,994.91
987,040.00
| new medical bandage factory land acquisition land use right grant fee remission of Winner company in Pailou Town, Jingmen - Jingmen Winner | Deferred income |
10,160.00
1,000,000.00
| Subsidy funds for municipal government project infrastructure construction - Chongyang Winner | Deferred income |
206,775.00Subsidy funds for land and subsidy funds for sewage treatment - Jiayu Winner 11,430,000.00
203,416.62
| Deferred income | ||
| 2015 Huanggang provincial budget investment plan, Huanggang Winner’s |
cotton spunlaced nonwoven (Line 8) extension project subsidy - Huanggang
600,000.00
Deferredincome
30,000.00
| Winner |
| 2014 Huanggang urban industrial development special fund subsidy - Huanggang Winner |
250,000.00
12,500.00
| Deferred income | ||
| Special subsidy funds urban industrial development in 2015 (construction of 2# sanitary products production line) - Winner Medical (Huanggang) |
400,000.00
20,000.00
| Deferred income | ||
| Automatic transformation of surgical consumables production line - the Company |
1,860,000.00
93,000.00
| Deferred income | ||
| 2016 Tianmen industrial key technical transformation and expansion project reward - Tianmen Winner |
500,000.00
25,002.00
| Deferred income | ||
| 2017 increase production and expansion equipment subsidy for Tianmen processing & trade - Tianmen Winner |
150,000.00
7,500.00Yichang gas boiler subsidy - Yichang Winner 160,000.00
| Deferred income |
| Deferred income |
7,999.98
1,900,000.00
| Second batch of traditional industry transformation subsidy in 2017 - Huanggang Winner | Deferred income |
104,587.14
700,000.00
| 2017 cotton spunlaced non-woven fabric project with the production of 15,000 tons - Tianmen Winner | Deferred income |
39,622.62
1,000,000.00
| Key technical reform and expansion project (cotton spunlunge wipes production line project) - Tianmen Winner | Deferred income |
54,054.00
930,000.00
| Production line project with an annual output of 120 million bales of cotton fabric in 2017 - Tianmen Winner | Deferred income |
53,653.86
250,000.00
| Second batch of special funds for the transformation and upgrading of traditional industries - Yichang Winner | Deferred income |
12,499.98
4,755,300.00
| Technical innovation subsidy for the Purcotton Phase II Expansion Project - Jingmen Winner | Deferred income |
83,183.10
1,000,000.00
| Key technical transformation and expansion projects (cotton spun laced wipes production project) - Winner Medical (Tianmen) | Deferred income |
49,999.98
Type Amount
| Presented item | Amount recorded in current profit and loss |
20180311 Subsidies for research, science and innovation on the technology of
thermo-responsive self-curing wound regeneration and repair materials - the
| Company |
1,200,000.00
Deferredincome
119,434.00
1,480,000.00
| 2018 provincial traditional industry transformation and upgrading special funds for the second batch of liquidation block fund subsidies - Jiayu Winner | Deferred income |
26,428.62
1,000,000.00
| Subsidies for first batch of technological transformation award of industrial enterprises in 2018 - Chongyang Winner | Deferred income |
53,078.56
the first batch of block funds allocation plan in Tianmen City in 2019 -
| Tianmen Winner |
1,320,000.00
Deferredincome
68,275.86
500,000.00
| 2018 urban technical transformation fund of Huanggang City - Huanggang Winner | Deferred income |
27,777.76First batch of traditional subsidies in 2019 - Huanggang Winner 1,210,000.00
60,500.002019 district technical improvement subsidy - Jingmen Winner 410,000.00
| Deferred income |
| Deferred income |
14,556.18
20,000,000.00
| Technical transformation project of key material production enterprises for Shenzhen in 2020 - the Company | Deferred income |
1,000,000.002019 district technical improvement subsidy - Jingmen Winner 410,000.00
14,909.10
| Deferred income | ||
| 2019 special fund project of the transformation and upgrading of traditional industries - Jiayu Winner |
750,000.00
13,392.84Surgical gown production line project subsidy - Chongyang Winner 4,000,000.00
| Deferred income |
| Deferred income |
216,216.22
5,590,000.00
| Subsidy for purchasing equipment in key enterprises of "Three Batches" - Winner Medical (Chongyang) | Deferred income |
281,848.74
8,000,000.00
Deferredincome
291,144.36
| Project on implementing the technical reformation policy of "Zero Land" in Wuhan and the municipal industrial investment and technical transformation special fund project of Bureau for Science, Technology and Economic Information Technology of Xinzhou District - Wuhan Winner |
| Subsidy for capacity expansion & technical upgrading of enterprises producing materials - Winner Medical (Wuhan) |
3,645,000.00
5,351.53
| Deferred income | ||
| 2020 special funds for the high-quality development of manufacturing - Huanggang Winner |
3,000,000.00
168,224.302021 urban technical transformation fund - Huanggang Winner 1,520,000.00
| Deferred income |
| Deferred income |
82,361.10Equipment subsidies in 2021 - Winner Medical (Jingmen) 6,800,000.00
850,000.00
| Deferred income | ||
| 2020 Provincial special funds for the high-quality development of manufacturing - Jiayu Winner |
1,000,000.00
52,631.58
| Deferred income | ||
| Annual equipment investment subsidies (Spunlace Phase III) - Winner Medical (Tianmen) |
15,000,000.00
750,000.00
| Deferred income | ||
| 1 million provincial special funds for the development of manufacturing - Wuhan Winner |
1,000,000.00
62,730.24
| Deferred income | ||
| Received subsidies from the development of the central government |
emergency material security system for production capacity improvement -
1,600,000.00
Deferredincome
102,435.32
| Wuhan Winner |
| Technical transformation funds for urban areas in 2022 - Winner Medical (Huanggang) (1*) |
4,094,200.00
Award for technical upgrading project - Chongyang Winner 600,000.00
| Deferred income |
| Deferred income |
32,727.28
276,482.00
| Industrial support funds for multi-layer baby facial towel production projects in 2022 - Winner Medical (Yichang) | Deferred income |
5,057.58
596,100.00
| Special fund for high quality development of manufacturing in Zhijiang in 2021 - Winner Medical (Yichang) | Deferred income |
29,805.00
6,800,000.00
| Provincial funds for high-quality development in 2023 - Winner Medical (Huanggang) | Deferred income |
800,000.00
| Award for technical upgrading project in 2022 - Winner Medical (Chongyang) | Deferred income |
28,828.83
2,850,000.00
| Provincial special funds for the high-quality development of manufacturing in 2023 - Winner Medical (Chongyang) | Deferred income |
102,702.71
Technology and Economic Information Technology in 2022 - Winner
| Medical (Wuhan) |
2,802,500.00
Deferredincome
194,085.06
demolition by Li County High-
| tech Industrial Development Zone Management Committee - Winner Medical (Hunan) |
20,469,000.00
Deferredincome
Others 61,500.00
3,075.00
| Deferred income | |||
| Subtotal: | 163,746,481.20 | 5,902,349.60 |
Type Amount
| Presented item | Amount recorded in current profit and loss | |
| 2. Government subsidies related to income | ||
Tax preferential declaration for impoverished registrants from 2019 to 2021 2,156,050.00
2,156,050.00
| Other incomes | ||
| Freight subsidy for cotton from Xinjiang in 2021 - Winner Medical (Huanggang) |
1,372,215.00
1,372,215.00
| Other incomes | ||
| Export credit insurance subsidy from January 2021 to June 2021 - the Company |
1,232,000.00
1,232,000.00
| Other incomes | ||
| Tax increment award and subsidies for technological transformation of industrial enterprises in Hunan Province in 2021 - Winner Medical (Hunan) |
843,300.00
843,300.00Freight subsidy for cotton from Xinjiang in 2021 - Winner Medical (Tianmen) 1,013,328.00
| Other incomes |
| Other incomes |
1,013,328.00Enterprise R&D investment incentive project in 2021 - the Company 880,164.00
880,164.00
| Other incomes | ||
| Incentive projects for industrial enterprises to expand production and increase efficiency in 2022 - the Company |
1,830,000.00
1,830,000.00
| Other incomes | ||
| High-quality government subsidies for the real economy in 2022 - Winner Medical (Tianmen) |
1,411,100.00
1,411,100.00
| Other incomes | ||
| Special fund allocated by Finance Bureau fund for research on low |
temperature bleaching technology of pure cotton spunlace -
500,000.00
Otherincomes
500,000.00
| Winner Medical (Huanggang) |
| Award for infrastructure production capacity achievement / Huzhou |
Moganshan High-
1,659,612.00
Otherincomes
1,659,612.00
| tech Industrial Development Zone Management Committee - Longterm Medical |
| Li County High-tech Industrial Development Zone Management Committee - Winner Medical (Hunan) |
1,470,700.00
1,470,700.00
| Other incomes | ||
| Subsidy allocated by Industry and Information Technology Bureau of |
Longhua District for enterprise informatization construction in 2021 -
500,000.00
Otherincomes
500,000.00
| Shenzhen Purcotton |
| Subsidy allocated by Industry and Information Technology Bureau of Longhua District for stable industrial growth in 2022 - the Company |
1,000,000.00
1,000,000.00
| Other incomes | ||
| Special fund allocated by Industry and Information Technology Bureau of Longhua District for industry development - the Company |
2,000,000.00
2,000,000.00
| Other incomes | ||
| Special fund allocated by Municipal Science and Technology Bureau for scientific and technological innovation in 2023- Winner Medical (Huanggang) |
1,000,000.00
1,000,000.00
| Other incomes | ||
| Received freight subsidy for cotton from Xinjiang in 2021 - Winner Medical (Wuhan) |
865,551.00
865,551.00
| Other incomes | ||
| Received awards for industrial intelligent transformation demonstration from Economy and Information Technology Bureau - Winner Medical (Wuhan) |
2,000,000.00
2,000,000.00Exemption of value-added tax for key groups - Winner Medical (Huanggang) 1,305,050.00
| Other incomes |
| Other incomes |
1,305,050.00Tax incentives for key groups - Winner Medical (Huanggang) 5,177,000.00
5,177,000.00Others 12,640,274.91
| Other incomes |
| Other income |
/ Non-operating
12,640,274.91
| income | |||
| Subtotal: | 40,856,344.91 | 40,856,344.91 | |
| Total | 204,602,826.11 | 46,758,694.51 |
(2) Basic information of government subsidies
?Applicable ?Not applicableOther description:
85. Others
NA
VIII. Consolidation scope changes
1. Business combination not under common control
(1) Business combination not under common control occurred in current period
Unit: RMBName of theacquiree
Time of equityacquisition
Cost of equityacquisition
Equityacquisitionratio
Method of
equityacquisition
Acquisition
date
Basis fordeterminationof acquisition
date
acquiree from theacquisition date to
the end of the
| period | Net profit of the |
acquiree from theacquisition date to
the end of the
| period | ||
| Shanghai |
HongsongMedical
April 30, 2023 30,000,000.00 60.00%
Shareacquisition
April 30,
2023
Acquisition of
control
7,589,133.39 1,409,443.66
Other description:
(2) Combination cost and goodwill
Unit: RMB
Device Co.,Ltd.Combination cost
| Combination cost | Shanghai Hongsong |
| --Cash | 30,000,000.00 |
| --Fair value of non-cash assets | |
| --Fair value of debt issued or assumed | |
| --Fair value of equity securities issued | |
| --Fair value of contingent consideration | |
| --Fair value of the equity held prior to the purchase date on the purchase date | |
| --Others | |
| Total combination cost | 30,000,000.00 |
| Less: the share of the fair value of identifiable net assets acquired | 21,096,780.50 |
| The amount of goodwill / combination cost less than the share of the fair value of identifiable net assets acquired |
8,903,219.50
Determination method of fair value of combination cost, contingent consideration and explanation of its changes:
Main reasons for the formation of large amount of goodwill:
Other description:
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: RMB
| Shanghai Hongsong | ||
| Fair value on the acquisition date | Book value on the acquisition date | |
| Assets: | 106,465,238.52 | 92,924,460.45 |
| Cash and cash equivalents | 8,823,863.68 | 8,823,863.68 |
| Accounts receivable payments | 28,050,134.19 | 28,050,134.19 |
| Inventory | 3,635,736.67 | 2,200,534.27 |
| Fixed assets | 2,199,354.00 | 1,618,600.25 |
| Intangible assets | 11,440,000.00 | |
| Tradable financial assets | 45,084,821.92 | 45,000,000.00 |
| Advance to supplier | 190,174.00 | 190,174.00 |
| Other receivables | 192,221.62 | 192,221.62 |
| Right-of-use assets | 6,848,932.44 | 6,848,932.44 |
| Liabilities: | 71,303,937.69 | 67,918,743.17 |
| Loan | ||
| Account payable payments | 18,437,112.22 | 18,437,112.22 |
| Deferred income tax liabilities | 3,385,194.52 | |
| Contract liabilities | 696,308.23 | 696,308.23 |
| Payroll payable | 1,715,576.91 | 1,715,576.91 |
| Taxes payable | 1,585,782.84 | 1,585,782.84 |
| Other payables | 38,270,724.51 | 38,270,724.51 |
| Other current liabilities | 90,520.07 | 90,520.07 |
| Non-current liabilities due within one year | 643,315.08 | 643,315.08 |
| Lease liabilities | 6,479,403.31 | 6,479,403.31 |
| Net assets | 35,161,300.83 | 25,005,717.28 |
| Less: Minority equity | 14,064,520.33 | 10,002,286.91 |
| Net assets acquired | 21,096,780.50 | 15,003,430.37 |
Determination method of fair value of identifiable assets and liabilities:
Contingent liabilities of the acquiree incurred in business combinationOther description:
(4) Gains or losses arising from remeasurement of equity held prior to the acquisition date at fair value
Whether there are transactions that realize the business combination step by step through multiple transactions and obtaincontrol right during the reporting period
?Yes?No
(5) Relevant description of the combination consideration or the fair value of the identifiable assets and liabilities of the
acquiree that cannot be reasonably determined on the acquisition date or at the end of current period of the combination
(6) Other description
2. Business combination under common control
(1) Business combination under common control occurred in current period
Unit: RMBNameof
party
Proportionof equityobtained in
businesscombination
Basis ofbusinesscombination
undercommoncontrol
Merger
date
Basis fordetermination
of mergerdate
| merged | Income of the |
combined partyfrom thebeginning of
the date of
| combination | Net profit of |
the combinedparty from thebeginning ofcurrent periodto the date of
| combination | Income of |
thecombined
partyduring the
| comparison period | Net profit |
of thecombined
partyduring thecomparison
Other description:
N/A
(2) Combination cost
Unit: RMB
periodCombination cost
| Combination cost |
| --Cash |
| -- Book value of non-cash assets |
| -- Book value of debt issued or assumed |
| -- Book value of equity securities issued |
| -- Contingent consideration |
Contingent consideration and explanation of its changes:
N/AOther description:
(3) Book value of assets and liabilities of the combined party on the date of combination
Unit: RMB
| Merger date | End of previous period | |
| Assets: | ||
| Cash and cash equivalents | ||
| Accounts receivable payments | ||
| Inventory | ||
| Fixed assets | ||
| Intangible assets | ||
| Debt: | ||
| Loan | ||
| Account payable payments | ||
| Net assets | ||
| Less: Minority equity | ||
| Net assets acquired |
Contingent liabilities of the combined party incurred in business combination:
N/AOther description:
N/A
3. Reverse purchase
Basic information of transaction, basis of transaction forming reverse purchase, whether the assets and liabilities retained bythe listed company constitute business and their basis, determination of combination cost, amount and calculation of adjustedequity in accordance with equity transaction:
4. Disposal of subsidiary
Whether there is a single disposal of investment in subsidiaries, i.e. loss of control right?Yes ?NoWhether there is a situation that the investment in subsidiaries is disposed step by step through multiple transactions and thecontrol right is lost in current period?Yes ?No
5. Change of merger scope for other reasons
Explain the changes in the scope of combination caused by other reasons (such as the establishment of new subsidiaries,liquidation of subsidiaries, etc.) and relevant information:
In this issue, there are two newly established subsidiaries: Nature Health Development (Hong Kong) Co., Ltd. andLONGTERM MEDICAL,S.DE.R.L.DE C.V (Mexico Longterm).
6. Others
N/A
IX. Interests in other entities
1. Interests in a subsidiary
(1) Composition of enterprise group
Subsidiary name Main operation site Registration place Business nature
| Shareholding ratio | Way of obtaining | |||||
| Direct | Indirect | |||||
| Shenzhen Purcotton | Shenzhen City, Guangdong Province | Shenzhen City, Guangdong Province | ||||
Sale of Purcotton products 100.00% Establishment
Beijing Beijing Sale of Purcotton products 100.00% Establishment
| Beijing Purcotton | ||
| Guangzhou Purcotton | Guangzhou City, Guangdong Province | Guangzhou City, Guangdong Province |
Sale of Purcotton products 100.00% Establishment
Shanghai Shanghai Sale of Purcotton products 100.00% Establishment
| Shanghai Purcotton | ||
| Qianhai Purcotton | Shenzhen City, Guangdong Province | Shenzhen City, Guangdong Province |
Sale of Purcotton products 100.00% Establishment
(Huanggang)
| Winner Medical | Huanggang City, |
Hubei Province
Hubei Province
| Huanggang City, | Production and sales of cotton spun |
laced non-
consumables and Purcotton products
100.00%
| woven fabric, medical | Business |
combination
| under common control | ||
| Winner Medical |
(Jingmen)
Province
| Jingmen City, Hubei | Jingmen City, Hubei |
Province
consumables and Purcotton products
100.00%
| Production and sales of medical | Business |
combination
| under common control | ||
| Winner Medical |
(Chongyang)
Hubei Province
| Chongyang County, | Chongyang County, |
Hubei Province
consumables
100.00%
| Production and sales of medical | Business |
combination
| under common control | ||
| Winner Medical |
(Jiayu)
Province
| Jiayu County, Hubei | Jiayu County, Hubei |
Province
Production
consumables and Purcotton products
100.00%
| and sales of medical | Business |
combination
| under common control | ||
| Winner Medical |
(Yichang)
Province
| Zhijiang City, Hubei | Zhijiang City, Hubei |
Province
cloth
100.00%
| Production and sales of medical gray | Business |
combination
| under common control | ||
| Winner Medical |
(Tianmen)
Tianmen City, HubeiProvince
Tianmen City, HubeiProvince
laced non-
| woven fabric and Purcotton |
products
100.00%
combination
| under common control | ||
| Winner Medical |
(Hong Kong)
Hong Kong Hong Kong
healthy living consumer goods
60.00%
| Sales of medical consumables and | Business |
combination
Subsidiary name Main operation site Registration place Business nature
| Shareholding ratio | Way of obtaining | |
| Direct | Indirect | |
Winner(Huanggang)Cotton
Hubei Province
| Huanggang City, | Huanggang City, |
Hubei Province
Cotton trade 100.00%
combination
| under common control | ||
| Winner Medical |
Malaysia
Malaysia Malaysia There is no actual business operation 100.00%
combination
| not under |
common
| control | |||||
| Winner Medical (Heyuan) | Heyuan City, Guangdong Province | Heyuan City, Guangdong Province | There is no actual business operation at present |
100.00% Establishment
(Wuhan)
| Winner Medical | Wuhan City, Hubei |
Province
Province
| Wuhan City, Hubei | Production and sterilization of cotton |
spun laced non-
100.00% Establishment
PureH2B
| woven fabric and Purcotton products | ||
| Shenzhen City, Guangdong Province | Shenzhen City, Guangdong Province | Sales of personal care and other products |
100.00% Establishment
Purunderwear
| Shenzhen City, Guangdong Province | Shenzhen City, Guangdong Province |
Sales of Cotton Lining products 100.00% Establishment
| Huanggang Purcotton | Huanggang City, Hubei Province | Huanggang City, Hubei Province |
Sale of Purcotton products 100.00% Establishment
| Winner Medical (Foshan) | Foshan City, Guangdong Province | Foshan City, Guangdong Province | There is no actual business operation at present |
100.00% Establishment
LongtermMedical
Huzhou, Zhejiang Huzhou, Zhejiang
consumables
55.00%
| Production and sales of medical | Business |
combination
common
| control |
HangzhouShengyi
Hangzhou, Zhejiang Hangzhou, Zhejiang Other technology promotion services 55.00%
combination
| not under |
common
| control | ||
| Xi'an Long |
Temu
Xi'an, Shaanxi Xi'an, Shaanxi
experimental development
55.00%
| Engineering technical research and | Business |
combination
common
| control |
DeqingLongterm
Huzhou, Zhejiang Huzhou, Zhejiang
instruments, equipment and device
55.00%
| Manufacturing of medical | Business |
combination
common
| control | ||
| United States |
Longterm
US US
Manufacturing of medicalinstruments, equipment and device
55.00%
combination
| not under |
common
Winner Guilin
| control | ||
| Xiufeng District, |
Guilin City, Guangxi
Region
| Zhuang Autonomous | Xiufeng District, |
Guilin City, Guangxi
Region
Rubber products industry 100.00%
| Zhuang Autonomous | Business |
combination
common
| control | ||
| Winner Medical |
(Hunan)
Changde, Hunan Changde, Hunan
consumables
68.70%
| Production and sales of medical | Business |
combination
common
| control | ||
| Ruian Medical |
Device
Changsha, Hunan Changsha, Hunan
experimental development
68.70%
| Engineering technical research and | Business |
combination
common
| control |
Junjian Medical
Guangdong Province
| Shenzhen City, | Shenzhen City, |
Guangdong Province
Sales of medical consumables 100.00%
combination
| not under |
common
| control | ||
| Pan-China (H.K.) |
Hong Kong Hong Kong
100.00% Establishment
Mexico Longtai Mexico Mexico
| Sales of medical consumables and healthy living consumer goods |
| There is no actual business operation at present |
55.00% Establishment
ShanghaiHongsong
Shanghai Shanghai Sales of medical consumables 60.00%
combination
| not under |
common
Difference between the shareholding ratio and the voting right ratio in the subsidiary:
N/ABasis for holding half or less of the voting rights but still controlling the invested entity, and holding more than half of thevoting rights but not controlling the invested entity:
For the important structured entity included in the combination scope, the control basis is as follows:
N/ABasis for determining whether the company is an agent or a principal:
N/AOther description:
N/A
(2) Important non-wholly owned subsidiary
Unit: RMBSubsidiary name Minority shareholding ratio
losses attributable to
| minority shareholders | Current dividends |
declared to minority
Ending balance of
minority equity
Difference between the shareholding ratio and the voting right ratio of the minority shareholders of the subsidiary:
N/AOther description:
N/A
(3) Main financial information of important non-wholly owned subsidiaries
Unit: yuanSubsidiary name
shareholdersClosing Balance
| Closing Balance | Beginning balance |
Currentassets
current
| assets |
Totalassets
Currentliabilities
current
| liabilities |
Totalliabilities
assets
| Current | Non- |
current
Totalassets
Currentliabilities
| assets | Non- |
current
Totalliabilities
Unit: yuanSubsidiaryname
| Amount incurred in current period | Amount incurred in previous period |
Operatingincome
Net profit
comprehensive
| income | Cash flow from |
financing
Operatingincome
Net profit
| activities | Total |
comprehensive
| income | Cash flow |
from financing
Other description:
NA
(4) Major restrictions on the use of enterprise group assets and the settlement of enterprise group debts
NA
(5) Financial or other support provided to structured entity included in the consolidated financial statements
NAOther description:
2. Transactions in which the share of ownership interest in a subsidiary changes and the subsidiary is still
controlled
(1) Description of changes in the owner's equity share in the subsidiary
NA
(2) Impact of transactions on minority shareholders' equity and owners' equities attributable to the owners of parent
company
Unit: RMB
activitiesPurchase cost / Disposal consideration
| Purchase cost / Disposal consideration |
| --Cash |
| --Fair value of non-cash assets |
| Total purchase cost / Disposal consideration |
| Loss: The share of the net asset of a subsidiary calculated based on the proportion of equity acquired/disposed |
| Balance |
| Including: Capital reserve adjusted |
| Surplus reserve adjusted |
| Undistributed profit adjusted |
Other description
3. Equity in joint venture arrangement or joint venture
(1) Important cooperative enterprises or joint ventures
cooperativeenterprise or joint
| venture |
Mainoperation site
place
Business nature
| Registration | Shareholding ratio | Accounting treatment | |
method of investment incooperative enterprises or
Direct Indirect
Difference between the shareholding ratio and the voting right ratio in the cooperative enterprise or joint venture:
NABasis for holding less than 20% of the voting rights but having a significant impact, or holding 20% or more of the votingrights but not having a significant impact:
NA
(2) Major Financial Information about Important Cooperative Enterprises
Unit: RMB
joint venturesEnding balance/amountincurred in current period
| Ending balance/amount incurred in current period | Beginning balance/amount incurred in previous period | |
| Current assets | ||
| Including: Cash and cash equivalents | ||
| Non-current assets | ||
| Total assets | ||
| Current liabilities | ||
| Non-current liabilities | ||
| Total liabilities | ||
| Minority equity | ||
| Attributable to the parent company shareholders' equity | ||
| Share of net assets by shareholding ratio | ||
| Adjustment items | ||
| --Goodwill | ||
| --Unrealized profit of internal transaction | ||
| --Others | ||
| Book value of equity investments in joint ventures | ||
| Fair value of equity investments in joint ventures with publicly quoted prices |
| Operating income | ||
| Financial expenses | ||
| Income tax expenses | ||
| Net profit | ||
| Net profit of discontinued operation | ||
| Other comprehensive income | ||
| Total comprehensive income | ||
| Dividends received from joint ventures in current year |
(3) Major Financial Information About Important Jointly Operated Enterprises
Unit: yuan
| Ending balance/amount incurred in current period | Beginning balance/amount incurred in previous period | |
| Current assets | ||
| Non-current assets | ||
| Total assets | ||
| Current liabilities | ||
| Non-current liabilities | ||
| Total liabilities | ||
| Minority equity | ||
| Attributable to the parent company shareholders' equity | ||
| Share of net assets by shareholding ratio | ||
| Adjustment items | ||
| --Goodwill | ||
| --Unrealized profit of internal transaction | ||
| --Others | ||
| Book value of equity investments in cooperative enterprises | ||
| Fair value of equity investments in cooperative enterprises with publicly quoted prices |
| Operating income | ||
| Net profit | ||
| Net profit of discontinued operation | ||
| Other comprehensive income | ||
| Total comprehensive income | ||
| Dividends received from cooperative enterprises in current year |
Other description
(4) Summary of financial information of unimportant cooperative enterprises and joint ventures
Unit: RMB
| Ending balance/amount incurred in current period | Beginning balance/amount incurred in previous period | |
| Cooperative enterprise: | ||
| Total book value of investment | 23,223,514.91 | 21,642,696.16 |
| Total number of following items by shareholding ratio | ||
| -- Net profit | 1,580,818.75 | 2,408,209.89 |
| -- Total comprehensive income | 1,580,818.75 | 2,408,209.89 |
| Joint venture: | ||
| Total number of following items by shareholding ratio |
Other description
(5) Significant restrictions on the ability of cooperative enterprises and joint ventures to transfer funds to the Company
NA
(6) Excess losses of cooperative enterprise or joint venture
Unit: yuan
Name of cooperativeenterprise or joint venture
Accumulated unrecognizedlosses in the previous period
current period(or net profit shared in
| current period) |
Accumulated unrecognizedlosses at the end of current
period
Other descriptionNA
(7) Unconfirmed commitments related to investment in cooperative enterprise
NA
(8) Contingent liabilities related to investment in cooperative enterprise or joint venture
NA
4. Important pooling of interests
Main operation site
| Name of joint operation | Registration place |
Business nature
| Shareholding ratio / share enjoyed | |
| Direct | Indirect |
Difference between the shareholding ratio or share enjoyed and the voting right ratio in joint operation:
NAIf the joint operation is a separate entity, it shall be classified as the basis of joint operation:
NAOther description
5. Equity in the structured entity that is not included in the consolidated financial statements
Description of structured entity not included in the consolidated financial statementsNA
6. Others
NA
X. Risks associated with financial instrumentsThe Company is exposed to various financial risks in the process of operation: credit risk, liquidity risk and market risk,including exchange rate risk, interest rate risk and other price risk. The above financial instruments and the risk managementpolicies adopted by the Company to mitigate these risks are described below:
The Board of Directors is responsible for planning and establishing the Company's risk management structure, formulatingthe Company's risk management policies and relevant guidelines, and supervising the implementation of risk managementmeasures. The Company has formulated risk management policies to identify and analyze the risks to which the Company isexposed. These risk management policies specify specific risks, covering various aspects such as market risk, credit risk andliquidity risk management. The Company regularly evaluates the changes in the market environment and the Company'soperating activities to determine whether to update the risk management policies and systems. The risk management of theCompany is carried out by the Risk Management Committee in accordance with the policies approved by the Board ofDirectors. The Risk Management Committee identifies, evaluates, and avoids related risks through close cooperation withother business departments of the Company. The internal audit department of the Company conducts regular audit on the riskmanagement control and procedures, and reported the audit results to the Audit Committee of the Company.The Company disperses financial instrument risks through appropriate diversified investments and business portfolios, andreduce risks concentrated in a single industry, specific region, or specific counterparty by formulating corresponding riskmanagement policies.
1. Credit risk
Credit risk refers to the risk of financial loss to the Company due to the failure of the counterparty to fulfill its contractualobligations.The Company's credit risk mainly arises from monetary funds, notes receivable, accounts receivable, receivables financing,contract assets, other receivables, debt investment, other debt investments and financial guarantee contracts, as well as debtinstrument investments and derivative financial assets measured at fair value through profit or loss and not included in theimpairment assessment scope. On the balance sheet date, the book value of the Company's financial assets represents itsmaximum credit risk exposure.The Company's monetary funds are mainly deposited in state-owned banks and other large and medium-sized listed bankswith high credit rating. The Company believes that there is no significant credit risk and almost cannot cause significantlosses caused by bank default.In addition, for notes receivable, accounts receivable, receivables financing, contractual assets and other receivables, theCompany makes relevant policies to control credit risk exposure. The Company evaluates the customers' credit qualificationand sets the corresponding credit period based on the customer's financial status, the possibility of obtaining guarantee from athird party, credit records and other factors such as current market conditions. The Company will regularly monitorcustomers' credit records. For customers with poor credit records, the Company would urge payment in writing, shorten thecredit period or cancel the credit period, etc., to ensure that the overall credit risk of the Company is under control.
2. Liquidity risk
Liquidity risk refers to the risk of capital shortage when the Company performs the obligation of settlement by cash paymentor other financial assets.The Company's policy is to ensure that there is sufficient cash to pay the debt due. Liquidity risk is centrally controlled by theFinancial Department of the Company. By monitoring cash balances, securities that can be turned into cash at any time, androlling forecasting of cash flows over the next 12 months, the Finance Department ensures that the Company has sufficientfunds to repay its debts under all reasonable projections, at the same time, it continuously monitors the compliance of theprovisions of the loan agreements, and obtained commitments from major financial institutions to provide sufficient standbycapital to meet short-term and long-term capital needs.The Company's various financial liabilities are shown as follows in terms of undiscounted contract cash flows on maturitydates:
Item
| Closing Balance | |
| Immediate repayment | |
Within 1 year 1~2 years 2-5 years
Total
More than 5yearsShort-termloans
1,763,023,992.64
| Short-term loans |
1,763,023,992.64
| Notes payable | 86,200,204.52 | 86,200,204.52 | ||||
| Accounts payable |
805,598,628.73
805,598,628.73
| Other payables | 917,656,694.74 | 917,656,694.74 | ||||
| Non-current liabilities due within a year |
191,760,393.47
191,760,393.47
| Long-term loans |
180,000,000.00
180,000,000.00
| Lease liabilities | 135,602,321.48 | 129,141,667.72 | 39,203,092.82 | 303,947,082.02 | ||
| Total | 3,764,239,914.10 | 315,602,321.48 | 129,141,667.72 | 39,203,092.82 | 4,248,186,996.12 |
Item
| Closing balance of the previous year | |
| Immediate repayment | |
Within 1 year 1~2 2-5
Total
| More than 5 years | |||
| Short-term loans |
2,295,218,930.85
2,295,218,930.85
| Notes payable | 24,760,000.00 | 24,760,000.00 | ||||
| Accounts payable |
1,119,574,518.58
1,119,574,518.58
| Other payables | 570,843,242.88 | 570,843,242.88 | ||||
| Non-current liabilities due within a year |
215,946,889.32
215,946,889.32
| Lease liabilities |
160,958,289.43
204,071,723.77
365,030,013.20
| Total | 4,226,343,581.63 | 160,958,289.43 | 204,071,723.77 | 4,591,373,594.83 |
3. Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financial instruments fluctuatesdue to the change of market price, including exchange rate risk, interest rate risk and other price risk.
(1) Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to the changeof market interest rate.The interest bearing financial instruments with fixed and floating interest rates expose the Company to fair value interest raterisk and cash flow interest rate risk, respectively. The Company determines the ratio of fixed rate and floating rateinstruments based on the market environment, and maintains an appropriate combination of fixed rate and floating rateinstruments through regular review and monitoring. If necessary, the Company will use interest rate swap instruments tohedge interest rate risk.On June 30, 2023, if other variables remain unchanged, and the borrowing rate at the floating rate rises or falls by 100 basepoints, the Company's net profit will decrease or increase by RMB 1,559,842.08. The management considers that 100 basispoints reasonably reflects a reasonable range of possible changes in interest rate over the next year.
(2) Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to thechange of foreign exchange rate.The Company continuously monitors foreign currency transactions and the scale of foreign currency assets and liabilities tominimize foreign exchange risks. In addition, the Company may enter into forward foreign exchange contracts or currencyexchange contracts to achieve the purpose of avoiding the exchange rate risk. The Company has not signed any forwardforeign exchange contracts or currency swap contracts during the current period and the previous period.
The exchange rate risk faced by the Company mainly comes from financial assets and financial liabilities denominated inUSD. The amounts of foreign currency financial assets and foreign currency financial liabilities converted into RMB arelisted as follows:
Item
| Closing Balance | |||||||
| USD | EUR | HKD | Yen | Ringgit | Mexican peso | Total | |
| Foreign | |||||||
currency
| financial assets |
137,728,418.80
| Cash and cash equivalents |
2,088,226.61 23,192,520.64 641,098.60
326,402.86 1,632,380.58
165,609,048.09
191,329,868.77
| Accounts receivable |
3,763,249.79 6,867,245.07 10,908.57
- -
201,971,272.20
1,122,573.91
| Other receivables |
- 575,549.70 -
- 211.78
1,698,335.39
| Subtotal | 330,180,861.48 | 5,851,476.40 | 30,635,315.41 | 652,007.17 | 326,402.86 | 1,632,592.36 | 369,278,655.68 |
| Foreign |
currencyfinancial
| liabilities |
1,075,709.98
| Accounts payable |
- 308,095.29 -
- 12,616.09
1,396,421.36
| Other payables | 32,466,754.80 | 125,917.73 | 2,255,874.13 | - | 351,390.36 | - | 35,199,937.02 |
| Subtotal | 33,542,464.78 | 125,917.73 | 2,563,969.42 | - | 351,390.36 | 12,616.09 | 36,596,358.38 |
| Net amount | 296,638,396.70 | 5,725,558.67 | 28,071,345.99 | 652,007.17 | -24,987.50 | 1,619,976.27 | 332,682,297.30 |
On June30, 2023, if the RMB appreciates or depreciates by 5% against USD / EUR / HKD / Yen / Ringgit and all othervariables being held constant, the of the Company's net profit will increase or decrease by RMB 14,138,997.64. Themanagement considers that 5% is a reasonable reflection of the reasonable range of possible changes in RMB against USD /EUR / HKD / Yen / Ringgit.
4. Other price risks
Other price risks refer to the risks that the fair value or future cash flows of financial instruments fluctuate due to the changesin market prices other than exchange rate risk and interest rate risk.
XI. Fair value disclosure
1. Ending fair value of assets and liabilities measured with fair value
Unit: RMB
Item
| Closing fair value | |
| Measurement of | |
fair value at first
| level | Measurement of fair |
value at second
Measurement of fairvalue at third level
Total
| level | ||||
| I. Continuous fair value measurement | -- | -- | -- | -- |
| (I) Trading financial assets | 2,163,314,216.16 | 1,460,206,730.40 | 3,623,520,946.56 | |
| 1. Financial assets measured with fair value and with the changes included in current profit and loss |
2,163,314,216.16
1,460,206,730.40
3,623,520,946.56
| (3) Derivative financial assets | 2,163,314,216.16 | 2,163,314,216.16 | ||
| (4) Trust products | 1,460,206,730.40 | 1,460,206,730.40 | ||
| ?Receivables financing | 38,279,923.83 | 38,279,923.83 | ||
| Total assets continuously measured at fair value |
2,201,594,139.99
1,460,206,730.40
3,661,800,870.39
| II. Non-continuous fair value measurement |
--
--
--
--
2. Continuous and non-continuous measurement items of fair value at first level and recognition basis for market price
3. Continuous and non-continuous measurement items of fair value at second level, qualitative and quantitative information
on valuation techniques adopted and important parameters
4. Continuous and non-continuous measurement items of fair value at third level, qualitative and quantitative information on
valuation techniques adopted and important parameters
5. Continuous measurement items of fair value at third level, adjustment information between opening and closing book
value and sensitivity analysis of unobservable parameters
6. For continuous measurement items of fair value, if there is a conversion between different levels in current period, the
reasons for the conversion and the policies for determining the conversion time point
7. Valuation technology change and reason of change in current period
8. Fair value of financial assets and financial liabilities not measured at fair value
9. Others
XII. Related parties and connected transactions
1. Parent company of the Company
Parent companyname
Registrationplace
Business nature Registered capital
of the parentcompany in the
| Company | Voting right ratio |
of the parentcompany in the
| Company | ||||
| Winner Group Limited | Cayman Islands | Equity investment and management business |
HKD 1,143,000.00 68.10% 68.10%Parent company of the CompanyWinner Group Limited was incorporated in the Cayman Islands on April 8, 2003 with registration number 124887 and anauthorized share capital of 360,000,000.00 shares with a nominal value of HKD 1 per share. 1,143,000 shares have beenissued. The registered address is Vistra (Cayman) Limited, P.O. Box 31119, Grand Pavilion, Hibiscus Way, 802 West BayRoad, Grand Cayman KY1-1205, Cayman Islands.The ultimate controlling party of the Company is Li Jianquan.Other description:
N/A
2. Subsidiaries of the Company
See Note "IX. Interests in other entities" for information on subsidiaries of the Company.
3. Cooperative enterprises and joint ventures
See the note "IX. Interests in other entities" for important cooperative enterprises or joint ventures of the Company.Other cooperative enterprises or joint ventures that made related party transactions with the Company in the current period, orformed the balance of related party transactions with the Company in the previous periods are as follows:
| Name of cooperative enterprise or joint venture | Relationship with the Company |
| Chengdu Winner | Cooperative enterprise |
| Hubei Xianchuang Technology Co., Ltd. | Cooperative enterprise |
Other descriptionN/A
4. Situation of other related parties
| Name of other related parties | Relationship of other related parties with the Company |
| Glory Ray Holdings Limited | A company controlled by the actual controller |
Glory Ray Limited
| A company controlled by the actual controller through Glory Ray Holdings | |
| Beijing Sequoia Xinyuan Equity Investment Center (Limited Partnership) |
Shareholder of the Company
| Xiamen Leyuan Investment Partnership (Limited Partnership) | Shareholder of the Company |
| Xiamen Yutong Investment Partnership (Limited Partnership) | Shareholder of the Company |
| Xiamen Huikang Investment Partnership (Limited Partnership) |
Shareholder of the Company
| Shenzhen Capital Group Co.,Ltd. | Shareholder of the Company |
| Xiamen Zepeng Investment Partnership (Limited Partnership) | Shareholder of the Company |
| Chengdu Winner Likang Medical Products Co., Ltd. | Joint venture, with 49% equity hold by the Company |
Wuhan Zhuoling Packaging Co., Ltd.
| A company controlled by close family members of the Company's key managers | |
| Glory Ray Holdings Limited | A company controlled by the actual controller |
| Li Jianquan | Actual controller of the Company |
| Xu Xiaodan | Director |
| Guo Zhenwei | Director |
| Peng Jianfeng | Independent Director |
| Xie Jiawei | Independent Director |
| Liu Ke | Independent Director |
| Zhang Tingting | Chairman of the Board of Supervisors |
| Wang Ying | Supervisor (resigned in current period) |
| Liu Hua | Employee supervisor |
| Chen Huixuan | Secretary to the board of directors, deputy general manager |
| Fang Xiuyuan | Director, deputy general manager, chief financial officer |
| Zhang Li | Deputy general manager |
Huang Jun
Lixian SHRCB Rural Bank Co., Ltd.
| Original shareholder and original director of Winner Medical (Hunan) |
| A company in which Zheng Datian, Vice Chairman of Winner Medical (Hunan), serves as a director |
Jingyi Biotechnology (Shanghai) Co., Ltd.
Shenzhen Nine Stars Printing and Packaging Group Co., Ltd.
| A company actually controlled by Wu Kangping, a shareholder of Longterm Medical |
| A company controlled by the final controller of Winner Guilin before merge |
Shenzhen Junhesheng Technology Co., Ltd.
Shenzhen Shengtianning Medical Device Co., Ltd.
| A company controlled by the actual controller of Junjian Medical before merge |
| A company controlled by the actual controller of Junjian Medical before merge |
Shenzhen Zhengjun Medical Device Co., Ltd.
Zhejiang Kanglidi Medical Supplies Co., Ltd.
| A company controlled by the actual controller of Junjian Medical before merge |
| A company actually controlled by Wu Di, a shareholder of Longterm Medical |
| Name of other related parties | Relationship of other related parties with the Company |
ZheJiang Longmed Medical Technology Co., Ltd.
ZheJiang Longrising New Materials Co., Ltd.
| A company actually controlled by Wu Di, a shareholder of Longterm Medical |
| A company actually controlled by Wu Kangping, a shareholder of Longterm Medical |
Zheng Junhui
Wu Kangping, Huang Lepei, Wu Di
| Controlling shareholder and actual controller of Junjian Medical before merger | |
| Controlling shareholder of Junjian Medical before merger and its current minority shareholder | |
| Zhang Yan | Supervisor (taking office in current period) |
| Cao Wensong | Original shareholder of Shanghai Hongsong |
Other description
5. Connected transaction
(1) Connected transaction of purchases and sales of goods, provision and acceptance of services
Purchase of goods/acceptance of services
Unit: yuan
Related party
Connectedtransaction
Amount incurredin current period
Approvedtransaction quota
transactionquota is
| exceeded | Amount |
incurred inprevious
| period | |||||
| Wuhan Zhuoling Packaging Co., Ltd. | Purchase of goods or services | 11,212,057.11 | No | 37,624,707.33 | |
| Chengdu Winner Likang Medical Products Co., Ltd. | Purchase of goods or services | 142,663.88 | No | 343,008.97 | |
| Shenzhen Nine Stars Printing and Packaging Group Co., Ltd. | Purchase of goods or services | 1,078,762.59 | No | ||
| Shenzhen Zhengjun Medical Device Co., Ltd. | Purchase of goods or services | 32,035.36 | No | ||
| ZheJiang Longrising New Materials Co., Ltd. | Purchase of goods or services | 2,189.50 | No | ||
| ZheJiang Longmed Medical Technology Co., Ltd. | Purchase of goods or services | 196,530.97 | No | ||
| Zhejiang Kanglidi Medical Supplies Co., Ltd. | Purchase of goods or services | 81,451.32 | No |
Sell of commodities/provision of labor service
Unit: RMBRelated party Connected transaction Amount incurred in current period
in previous
| period | |||||
| Chengdu Winner Likang Medical Products Co., Ltd. | Sell of goods or services | 2,900,182.22 | 5,497,777.06 | ||
| SCGC | Sell of goods or services | 59,350.00 | |||
| Shenzhen Shengtianning Medical Device Co., Ltd. | Sell of goods or services | 1,419,274.31 | |||
| ZheJiang Longmed Medical Technology Co., Ltd. | Sell of goods or services | 75,658.29 | |||
| Zhejiang Kanglidi Medical Supplies Co., Ltd. | Sell of goods or services | 4,828,476.21 | |||
Related transaction of purchases and sales of goods, provision and acceptance of services
(2) Associated fiduciary management/contracting and entrusted management/subcontracting
Entrusted management / contracting of the Company:
Unit: RMB
entrusting
party /
| subcontractor | Name of |
entrusted
party /
Entrusted /contractingasset type
Fiduciary /contracting
start date
| contractor | Fiduciary / |
contractingtermination
Pricing basis offiduciary income /contracting income
| date | Fiduciary income / |
contracting incomerecognized in current
Associated fiduciary / contractingN/AEntrusted management / subcontracting of the Company:
Unit: RMBName ofentrusting party /
subcontractor
Name ofentrusted party /contractor
Entrusting /subcontracting
asset type
Entrusting /subcontracting
start date
Entrusting /subcontractingtermination date
Pricing basis offiduciary fee /subcontracting fee
periodFiduciary fee /
subcontracting feerecognized in current
| period |
Associated management / subcontractingN/A
(3) Related-party lease
The Company as the lessor:
Unit: RMBName of lessee Type of leased assets
| Lease income recognized in the current period | Lease income recognized in the previous period | ||
| ZheJiang Longmed Medical Technology Co., Ltd. |
Plant 60,550.46The company as the lessee:
Unit: RMB
Name
oflessor
Type ofleasedassets
Simplified processing
of short-term leases
low-value asset leases
(if applicable)
| and rental expenses of | Variable lease |
payments that are not
included in themeasurement of thelease liabilities (if
Rent paid
Interest expensesincurred on lease
liabilities
Right-of-use assets
increasedAmountincurredin current
period
| applicable) | |
| Amount |
incurred
inprevious
Amountincurredin currentperiod
| period | Amount |
incurred
inprevious
Amountincurredin current
period
| period | Amount |
incurred
inprevious
Amountincurred incurrentperiod
| period | Amount |
incurred
inprevious
Amountincurredin current
period
| period | Amount |
incurred
inprevious
Related-party lease descriptionN/A
(4) Related-party guarantee
The Company as the guarantor
Unit: RMBSecured party Amount guaranteed Guarantee start date
| Guarantee maturity date | Whether the guarantee has been fulfilled |
The Company as the secured party
Unit: RMBGuarantor Amount guaranteed Guarantee start date
| Guarantee maturity date | Whether the guarantee has been fulfilled |
Related-party guaranteeN/A
(5) Related party loan at call
Unit: RMB
| Related party | Borrowing amount | Start date | Maturity date | Description |
| Borrowing | ||||
| Lending | ||||
(6) Asset transfer and debt restructuring of related party
Unit: RMBRelated party Connected transaction
| Amount incurred in current period | Amount incurred in previous period |
(7) Key management personnel remuneration
Unit: RMBItem
| Amount incurred in current period | Amount incurred in previous period | ||
| Key management personnel remuneration |
5,193,963.22 5,879,069.64
(8) Other connected transactions
N/A
6. Accounts receivable and payable by related parties
(1) Receivables
Unit: yuanProject name Related party
| Closing Balance | Beginning balance |
Book balance
Book balance
| Provision for bad debt | Provision for bad debt | |||
| Accounts receivable |
| Chengdu Winner Likang Medical Products Co., Ltd. |
66,564.28
3,328.21
369,395.74 18,469.79
| Jingyi Biotechnology (Shanghai) Co., Ltd. |
651,786.67
385,788.47
651,786.67 220,006.76
| Shenzhen Shengtianning Medical Device Co., Ltd. |
0.00
7,331,532.66 366,576.63
| Shenzhen Zhengjun Medical Device Co., Ltd. |
0.00
1,762,022.32 88,101.12
| Zhejiang Kanglidi Medical Supplies Co., Ltd. |
5,154,577.03
257,728.85
1,837,108.40 91,855.42
| ZheJiang Longmed Medical Technology Co., Ltd. |
69,777.26
6,977.73
144,673.40 7,233.67
| ZheJiang Longrising Medical New Materials Co., Ltd. |
0.00
0.00
55,964.00 2,798.20
| Advances to suppliers |
| Shenzhen Shengtianning Medical Device Co., Ltd. |
0.00
274,273.56
| Shenzhen Zhengjun Medical Device Co., Ltd. |
0.00
1,170.00
(2) Payables
Unit: RMB
Project name Related party Ending book balance
Beginning book
balance
| Beginning book balance | ||
| Accounts payable |
| Wuhan Zhuoling Packaging Co., Ltd. | 1,003,568.19 | 23,113,608.45 | |
| Chengdu Winner Likang Medical Products Co., Ltd. | 105,058.24 | 81,750.48 |
862,536.38 194,545.00
| Shenzhen Nine Stars Printing and Packaging Group Co., Ltd. | |||
| Shenzhen Shengtianning Medical Device Co., Ltd. | 0.00 | 9,219.64 | |
| Shenzhen Zhengjun Medical Device Co., Ltd. | 0.00 | 2,964.00 | |
| Zhejiang Kanglidi Medical Supplies Co., Ltd. | 111,814.01 | 93,378.17 | |
| ZheJiang Longmed Medical Technology Co., Ltd. | 3,739.38 | 10,617.60 | |
| Other payables | |||
| Huang Jun | 4,356,725.66 | 4,490,583.41 | |
| Shenzhen Shengtianning Medical Device Co., Ltd. | 0.00 | 470,799.92 | |
| Shenzhen Zhengjun Medical Device Co., Ltd. | 0.00 | 134,199.16 | |
| Zheng Junhui | 0.00 | 78,812,000.00 | |
| Contract liabilities |
| Shenzhen Shengtianning Medical Device Co., Ltd. | 1,165.93 |
7. Related party commitment
N/A
8. Others
N/AXIII. Share-based payment
1. Overall status of share-based payment
?Applicable ?Not applicable
Unit: RMB
0.00
| Total amount of equity instruments granted by the Company during the current period | |
| Total amount of equity instruments exercised by the Company during the current period |
0.00
| Total amount of equity instruments invalidated by the Company during the current period |
0.00
| Range of the exercise price of the Company's stock options outstanding at the end of the period and the |
remaining term of the contract
proportion at the Company level is 100%; in case of RMB 10 billion <
| the audited operating income in 2021 < RMB 12 billion, the ownership proportion at the |
Company level is 80%
audited operating income in 2
| 021 * (1+30%), the ownership proportion at the Company level is 100%; in case of the audited operating income in 2021 * (1+20%) ≤ the audited operating income in 2022 < the audited operating income in 2021 * |
(1+30%), the ownership proportion at the Company
| level is 80%; in case of the audited business income in 2022 < the audited operating income in 2021 * (1+20%), the restricted stock planned to be vested by the incentive object shall not be vested and become invalid. | |
| Range of the exercise price of the |
Co
N/A
Other description2020 Restricted Stock Incentive Plan
1. Number of restricted stock granted
On November 27, 2020, the Company held the 15th meeting of the second Board of Directors and the 9th meeting of thesecond Board of Supervisors, deliberated and passed the Proposal on the Company's 2020 Restricted Stock Incentive Plan(Draft) and Its Abstract. On December 15, 2020, the Company held the sixth extraordinary general meeting of shareholdersin 2020 to deliberate and pass the Proposal on the Company's 2020 Restricted Stock Incentive Plan (Draft) and Its Abstract.According to the above proposal, the number of restricted stock (Class II restricted stock) to be granted in this incentive planis 6.5 million, and the underlying stock involved is A -share common stock, accounting for about 1.52% of the total capitalstock of the Company at the time of announcement of the draft incentive plan. Among them, 5.9 million shares were grantedfor the first time, accounting for about 1.38% of the total capital stock o f the Company at the time of announcement of thedraft incentive plan, and 90.77% of the total equity to be granted. 0.6 million shares were reserved to be granted, accountingfor about 0.14% of the total capital stock of the Company at the time of announcement of the draft incentive plan, and 9.23%of the total equity to be granted. No more than 1,053 incentive objects will be granted at the first time, including directors,senior managers, and other persons deemed to need incentives by the Board of Directors.
On December 18, 2020, the Company's 17th meeting of the second Board of Directors and the 11th meeting of the secondBoard of Supervisors deliberated and adopted the Proposal on First Granting Restricted Stocks to Incentive Objects. In viewof the fact that 17 incentive objects gave up the restricted stock to be granted by the Company due to resignation or personalreasons, they no longer qualified for the incentive conditions. According to the 2020 Restricted Stock Incentive Plan (Draft),the Company adjusted the incentive objects and the number of grants. The number of incentive objects granted for the firsttime was adjusted from 1,053 to 1,036, and the total number of restricted stock granted for the first time was adjusted from
5.90 million to 5.833 million.
2. Validity, grant date, vesting arrangement and lock-up period of this incentive plan
① The incentive plan shall be valid for no more than 48 months from the date of the first grant of restricted stock to the date
when all the restricted stock granted to the incentive object is vested or invalidated.
② After the incentive plan is approved by the general meeting of shareholders of the Company, the Board of Directors shall
determine the grant date, and the grant date must be the trading day. The Company shall grant the restricted stock andcomplete the announcement within 60 days after the approval of the general meeting of shareholders. If the Company fails tocomplete the above work within 60 days, the implementation of this incentive plan will be terminated, and the restrictedstock not granted will become invalid.The Company shall, within 12 months after the deliberation and approval of the incentive plan by the general meeting ofshare holders, specify the incentive objects reserved for award. If the incentive objects are not specified for more than 12months, the restricted stock corresponding to the reserved part shall become invalid.
③ The vesting arrangement for the first grant of restricted stock in this incentive plan is shown in the following table:
Vesting period Vesting ratio
| Vesting arrangement |
First vestingperiod
| First vesting period | From the first trading day of 17 months from the date of the first grant to the last trading day within 29 months from the date of the first grant |
50%
| Second vesting period | From the first trading day of 29 months from the date of the first grant to the last trading day within 41 months from the date of the first grant |
50%
If the restricted stock corresponding to the reserved part is granted within 2020, the vesting arrangement for grantingrestricted stocks reserved in this incentive plan is consistent with the vesting arrangement for the first grant of restricted stock.If the restricted stock corresponding to the reserved part is granted within 2021, the vesting arrangement for grantingrestricted stocks reserved in this incentive plan is shown in the following table:
Vestingarrangement
Vesting period Vesting ratio
| Vesting arrangement | ||
| First vesting period | From the first trading day of 12 months from the date of reserved granting to the last trading day within 24 months from the date of reserved granting |
50%
| Second vesting period | From the first trading day of 24 months from the date of reserved granting to the last trading day within 36 months from the date of reserved granting |
50%
If the incentive objects are directors and senior management of the Company, the shares transferred each year during theirterm of office shall not exceed 25% of the total number of the Company's shares they hold; they shall not transfer the sharesthey hold within half a year after leaving the Company.
2. Equity-settled share-based payments
?Applicable ?Not applicable
Unit: RMB
on the grant date
| Method for determining the fair value of equity instruments | The fair value of the restricted stock is calculated using the |
Black-
other employee restricted stoc
| ks is determined by reference to the stock closing price on the grant date without taking into account the liquidity discount. | |
| Basis for the determination of the number of viable equity instruments |
N/A
N/A
| Reasons for significant differences between the current and previous estimates |
| Accumulated amount of equity-settled share-based payments recorded in capital reserves |
89,454,428.59
| Total amount of expenses recognized by equity-settled share-based payments in current period |
969,372.65
Other descriptionThe Company held the 6th meeting of the Third Board of Directors and the 5th meeting of the Third Board of Supervisors onApril 20, 2022, as well as the Annual General Meeting of Shareholders 2021 on May 13, 2022, respectively, deliberated andapproved the "Proposal on the Revocation of Partially Granted Restricted Shares Not Yet Vested". A total of 3,366,925restricted shares that had been granted but not vested were revoked, because some incentive recipients could not meet theincentive conditions due to their demission or holding the post of supervisors, while the Company failed to complete theincentive assessment targets for 2021. For details, please refer to relevant announcements disclosed by the Company onCNINFO.com on April 22, 2022. The Company held the 11th Meeting of the Third Session of the Board of Directors and the8th Meeting of the Third Session of the Supervisory Board on April 23, 2023, and deliberated and approved the "Proposal onthe Achievement of the Vesting Conditions for the Second Vesting Period of the 2020 Restricted Shares Incentive Plan", andthe vesting conditions for the second vesting period of the 2020 Restricted Shares Incentive Plan had been accomplished andthe number of the Class II Restricted Shares which could be vested in the current time was The number of Class II restrictedshares that can be vested this time is 1.16214 million shares, and the Company will handle the vesting procedures for the 388incentive recipients who meet the vesting conditions in accordance with the relevant regulations. In addition, the "Proposalon Voiding Part of the Granted Restricted Shares Not Yet Vested" was deliberated and approved, due to the fact that anadditional 95 incentive recipients in the 2020 Restricted Shares Incentive Plan of the Company have left their jobs, and 419incentive recipients failed to meet the standards of performance appraisal at the individual level in the year of 2022 resultingin failure to fully vest the granted restricted shares, the Company intends to void the total number of its granted restrictedshares of 1.303935 million shares.
3. Cash-settled share-based payments
?Applicable ?Not applicable
4. Modification and termination of share-based payment
NA
5. Others
NA
XIV. Commitment and contingencies
1. Important commitment issues
Important commitments on balance sheet date
(1) Large-scale outsourcing contracts that have been signed or are about to be performed and their financial implications
As of June 30, 2023, the outstanding large contracts between the Company or its subsidiaries signed and in the process ofbeing performed or to be performed are as follows:
| Project name | Amount (yuan) |
| Winner Medical (Huanggang) - period panties equipment | 19,600,000.00 |
| Winner Medical (Jiayu) - Workshop construction project | 169,000,395.34 |
| Winner Medical (Jiayu) - Spunlace line | 9,280,000.00 |
| Winner Medical (Jiayu) - Cotton cleaner and carding machine | 5,040,000.00 |
| Winner Medical (Wuhan) - Phase II engineering project | 150,907,172.20 |
| Winner Medical (Jingmen) - Comprehensive workshop | 24,054,000.00 |
| Winner Medical - Guanlan engineering project | 207,000,000.00 |
| Winner Medical (Tianmen) - Hosiery machine equipment | 9,314,000.00 |
| Purcotton - Stereoscopic storage pallet in Yangluo warehouse | 8,717,500.00 |
| Total | 602,913,067.54 |
2. Contingencies
(1) Important contingencies on balance sheet date
The Company has no significant contingencies to be disclosed as of June 30, 2023.
(2) Explanation is also required if the Company has no important contingencies to be disclosed
The Company has no important contingencies to be disclosed.
3. Others
N/A
XV. Post-balance sheet events
1. Important non-adjustment items
Unit: RMBItem Description
| Influence number of financial position and operating results | Reasons for influence number cannot be estimated |
2. Profit distribution
3. Sales return
The Company has no significant sales returns after the balance sheet date.
4. Other post-balance sheet events
XVI. Other important issues
1. Correction of previous accounting errors
(1) Retrospective restatement
Unit: RMB
| Content of accounting error correction | Processing procedures | Report item name of each affected comparison period | Cumulative influence number |
(2) Prospective application
| Content of accounting error correction | Approval procedures | Reason for adopting prospective application |
2. Debt restructuring
N/A
3. Assets replacement
(1) Exchange of non-monetary assets
N/A
(2) Other asset replacement
N/A
4. Pension plan
N/A
5. Discontinued operation
Unit: RMBItem Income Cost Total profit
Income tax
expenses
Net profit
Other descriptionN/A
6. Segment information
(1) Determination basis and accounting policy of reporting segment
According to the Company's internal organizational structure, management requirements and internal reporting system, tworeporting segments have been determined, respectively: medical consumables, health consumer goods. Reporting segments ofthe Company offers different products or services or operates in different regions. Since each segment requires differenttechnologies or marketing strategies, the management of the Company manages the operating activities of each reportingsegment separately and regularly evaluates the operating results of these reporting segments to determine the allocation ofresources to them and evaluate their performance.The inter-segment transfer price is determined on the basis of the actual transaction price, and the expenses indirectlyattributable to the segments are distributed among the segments in proportion to the income (as determined by the Company).Assets are allocated according to the operations of a segment and the location of the assets. Liabilities of a segment includeliabilities attributable to that segment arising from the operations of a segment. If expenses related to liabilities shared bymultiple operating segments are allocated to those operating segments, such shared liabilities are also allocated to thoseoperating segments.
(2) Financial information of the reporting segment
Unit: RMBItem
Profit from discontinued operationsattributable to the owners of parent
companyMedical
consumables
| (Segment 1) | Healthy consumer |
goods
Unallocated
| (Segment 2) | Offset |
between
Total
| segments | |||||
| Operating income | 2,203,824,599.38 | 2,063,013,439.28 | 4,266,838,038.66 | ||
| Operating costs | 1,208,987,554.81 | 862,440,651.91 | 2,071,428,206.72 | ||
| Assets impairment |
loss & credit
69,444,098.17 28,518,811.59 97,962,909.76
| impairment loss | ||
| Depreciation expense and |
amortization
65,430,098.24 122,289,779.97 187,719,878.21
| expense | ||
| Operating profit / loss |
441,577,966.18 266,053,799.50 111,645,281.64 819,277,047.31
| Non-operating income and expense |
1,795,650.74 1,795,650.74
| Assets and liabilities |
| Total assets | 4,374,864,067.67 | 2,879,264,234.68 | 10,034,207,446.28 | 17,288,335,748.63 | |
| Total liabilities | 1,013,419,797.02 | 1,171,226,155.60 | 2,979,391,180.86 | 5,164,037,133.48 |
(3) If the Company has no reporting segments, or cannot disclose the total assets and total liabilities of each reporting
segment, the reasons shall be explained.
(4) Other description
7. Other important transactions and matters affecting the decision-making of investors
1. Urban Renewal Project of Winner Industrial Park
(1) Project Overview
On April 6, 2017, the Company and Shenzhen Xinghe Real Estate Development Co., Ltd. (hereinafter referred to as "XingheReal Estate") signed the Cooperation Agreement on Urban Renewal Project of Winner Industrial Park to implement thedemolition and reconstruction of urban renewal and reconstruction of Winner Industrial Park in Longhua District, ShenzhenCity (hereinafter referred to as the "Project"). The land area of the project is 29,064.49 m
. The land has been registered fortitle with a construction area of 36,625.89 m
, used for office, plant and dormitory.
(2) Cooperation mode
The Company entrusts the target land and building to SINDA Group for the application of urban renewal approval, andaccepts the relocation compensation of SINDA Group as agreed in agreement. SINDA Group shall be responsible for all thework related to renewal approval application for target land and building and implementation of urban renewal andreconstruction, be liable for the relocation compensation and demolition for reconstruction funds, and enjoy the rights andinterests in renewal project as the implementer.The Company voluntarily chooses the relocation compensation method that combines monetary compensation and propertyright exchange (relocation), including: 1) monetary compensation: RMB 415 million; 2) Property right exchange (relocation):
based on the gross floor area for sale determined in the final approval of the special renewal planning of this Project, theCompany shall obtain the area of property right exchange (relocation) according to the proportion negotiated by both parties.
(3) Project progress
On May 23, 2023, the People's Government of Longhua District, Shenzhen issued a planning approval for the project(S.L.H.F.H. [2023] No. 87). On July 8, 2023, the Company signed the Agreement on Relocation Compensation andResettlement for Urban Renewal Units of the Winner Industrial Park in Longhua District, Shenzhen with SINDA Group. OnJuly 17, 2023, the Company handed over the land and buildings located in the Winner Industrial Park in Longhua District toXinghe Real Estate.
(4) Financial impact
① Impact of monetary compensation on the Company
According to the relocation compensation and resettlement agreement signed bu and between the Company and SINDAGroup, the Company will receive a monetary compensation of RMB 415 million from SINDA Group. The monetarycompensation can basically cover the Company's asset retirement loss, relocation expenses, personnel placement expenses, aswell as renovation expenses and rent for newly-added leased properties during the transition period。
② Impact of relocated property on the Company
According to the valuation report issued by Yinxin Appraisal Co., Ltd. on the relocated property (Y.X.Z.B.Zi (2023) No.D0008), the valuation amount of relocated property as of June 30, 2023 is RMB 1.601 billion. Therefore, the Company willconduct accounting treatment in the third quarter of 2023, increasing other non-current assets by RMB 1.601 billion,confirming deferred income tax liabilities by RMB 240 million, increasing asset disposal income by RMB 1.601 billion andincome tax expenses by RMB 240 million. In 2023, the net profit attributable to the parent company is expected to increaseby RMB 1.361 billion.
The above impact of this transaction on the Company's financial condition is only a preliminary calculation within theCompany. The specific impact will be subject to the audited 2023 financial report issued by the accounting firm.
2. Heyuan investment and construction project
(1) Problem background
In 2016, under the guidance and promotion of Shenzhen Longhua District Committee and District Government, the Companyplans to transfer part of the production and logistics functions to Heyuan Zijin Linjiang Industrial Park in response to thepolicy of supporting Heyuan City as a counterpart of Shenzhen City. In May 2016, the Company and the People'sGovernment of Zijin County of Heyuan City signed the Agreement on Investment and Construction of Medical Package andCotton Household Goods Production Project (hereinafter referred to as the "Investment Agreement"), with the constructionland of the project covering 200,000 m
After the agreement was signed and the Land Use Notice was obtained, the Company submitted the planning plan, projectapplication and approval form as required, and started the construction. In August 2016, Winner Medical (Heyuan) obtainedthe Record Certificate of Enterprise Investment Projects in Guangdong Province issued by the Development and ReformBureau of Zijin County. In June 2017, Environmental Protection Bureau of Zijin County issued the Approval on theEnvironmental Impact Report Form of the Construction Project of Winner Medical (Heyuan) Co., Ltd. In accordance withthe agreement, the Zijin County Government assisted in obtaining a series of licenses such as state-owned land use rightcertificate and construction land planning permit.After the project was signed and started construction, the government required all construction projects under construction inZijin Linjiang Industrial Park to stop due to land conflicts between the project site and the planned Heyuan East Station ofJiangxi-Shenzhen High-speed Railway and the High-speed Railway New Town. Meanwhile, the relevant land use procedureswere suspended.
(2) Current progress
In June 2019, the Regulatory Detailed Planning and Constructional Detailed Urban Design of the Core Area of HeyuanHigh-speed Railway New Town was published to the public from June 22, 2019 to July 22, 2019. According to the finalpublicity content, it is determined that the square in front of Heyuan East Station of High-speed Railway, National Highway205 and the High-speed Railway New Town overlap with the project land of Winner Medical (Heyuan).In October 2019, the Company signed a tripartite agreement with the People's Government of Zijin County and theManagement Committee of Heyuan Jiangdong New District to clarify the overall disposal plan. The land used for WinnerMedical (Heyuan)'s project and its above-ground buildings will be recovered by the People's Government of Zijin County,and the three parties agree to determine the amount of compensation through arbitration. The People's Government of ZijinCounty paid RMB 30 million to the Company as the performance bond.In November 2019, International Arbitration Court of Ganjiang New District issued the Award ((2019) G.G.Z.Zi No.095),which confirmed the termination of the original Investment Agreement, and the People's Government of Zijin County shallbear the attorney fees, legal costs and other expenses totaling RMB 2,655,320.00. The land transfer deposit of RMB 3 millionshall be returned to the Company and compensate for the economic loss of RMB 550 million. The People's Government ofZijin County shall pay 50% of the amount before December 31, 2019 and 50% before February 29, 2020. As of June 30,2023, the Company has received the land transfer deposit of RMB 3 million returned by the People's Government of ZijinCounty and paid the compensation of RMB 328 million. The Company has also handed over the project land, above-groundbuildings, equipment and facilities and relevant supporting materials to the People's Government of Zijin County.
(3) Impact of this matter on the Company's operation
Heyuan Winner's business positioning is mainly the production, logistics and warehousing functions of medical package andcotton daily necessities. Prior to 2020, the Company had transferred the production, logistics and warehousing functions ofPurcotton daily necessities to the Company's subsidiary Winner Medical (Wuhan), and the production of medical package tothe Company's subsidiary Winner Medical (Chongyang).Winner Medical (Wuhan) and Winner Medical (Chongyang) have sufficient capacity to undertake the aforementionedproduction, logistics and warehousing business originally intended to be undertaken by Winner Medical (Heyuan). The abovematters of Winner Medical (Heyuan) have not caused significant adverse impact on the normal production and operation ofthe Company.
8. Others
N/A
XVII. Notes on main items of parent company's financial statement
1. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: RMBClass
| Closing Balance | Beginning balance | ||
| Book balance | Provision for bad debt | ||
Book value
| Book balance | Provision for bad debt |
Book valueAmount Proportion Amount
Amount Proportion Amount
| Accruing proportion | Accruing proportion | |||||
| Including: | ||||||
| Accounts | ||||||
receivableofprovisionfor baddebt bycombinatio
357,342,525.
100.00%
16,959,666.
4.75% 340,382,858.59 475,895,954.26 100.00%
21,764,62
4.41
4.57% 454,131,329.85
| n | ||
| Including: | ||
| Aging | ||
analysis
337,052,101.
94.32%
16,959,666.
5.03% 320,092,434.74 429,616,144.67 90.28%
21,764,62
4.41
5.07% 407,851,520.26
| method |
| Other |
combinatio
20,290,423.8
5.68% 0.00 20,290,423.85 46,279,809.59 9.72% 46,279,809.59Total
| n | |
| 357,342,525.40 |
100.00%
4.75% 340,382,858.59 475,895,954.26 100.00%
| 16,959,666.81 | 21,764,624.41 |
4.57% 454,131,329.85
Provision for bad debt by combination: aging analysis combination
Unit: RMBName
| Closing Balance | |||
| Book balance | Provision for bad debt | Accruing proportion | |
| Within 1 year (including 1 year) | 335,340,085.90 | 16,767,004.29 | 5.00% |
| 1~2 years (including 2 years) | 1,604,710.90 | 160,471.09 | 10.00% |
| 2~3 years (including 3 years) | 107,304.75 | 32,191.43 | 30.00% |
| Total | 337,052,101.55 | 16,959,666.81 | |
Description of the basis for determining the combination:
On June 30, 2023, the Company reviewed the appropriateness of the provision for bad debts of receivables in the previousyear according to the historical bad debt loss, and believed that the default probability has a strong correlation with the agingof accounts, and the account age is still a sign of whether the credit risk of the Company's receivables has significantlyincreased. Therefore, the Company's credit risk loss on June 30, 2023 is estimated based on the aging of accounts andestimated at the original loss ratio.
Provision for bad debt by combination: other combination
Unit: RMBName
Book balance
| Closing Balance | ||
| Provision for bad debt | ||
Accruing proportion
| Other combination - related parties within the group |
20,290,423.85 0.00 0.00%
| Total | 20,290,423.85 | 0.00 |
Description of the basis for determining the combination:
According to the Company's accounting policy, the related parties within the group do not make provision for bad debts.If the bad debt provision of accounts receivable is withdrawn according to the general model of expected credit loss, pleaserefer to the disclosure method of other receivables to disclose the relevant information of bad debt provision:
?Applicable ?Not applicableDisclosure by aging
Unit: RMB
| Aging | Closing Balance |
| Within 1 year (including 1 year) | 353,366,496.73 |
| 1~2 years | 1,608,628.73 |
| 2~3 years | 108,405.62 |
| More than 3 years | 2,258,994.32 |
| 4~5 years | 550,226.94 |
| More than 5 years | 1,708,767.38 |
| Total | 357,342,525.40 |
(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: RMBClass Beginning balance
Closing BalanceAccrual
| Amount of change in current period | ||
| Recovered or reversed | ||
Write-off Others
21,764,624.41
| Provision for bad debt of accounts receivable |
4,804,957.60
16,959,666.81
| Total | 21,764,624.41 | 4,804,957.60 | 16,959,666.81 |
Where the amount of bad debt provision recovered or reversed is important:
Unit: RMB
| Unit name | Amount recovered or reversed | Recovery way |
N/A
(3) Accounts receivable actually written off at the current period
Unit: RMB
| Item | Amount written off |
Write-off of important accounts receivable:
Unit: yuanUnit name
Nature of accountsreceivable
Amountwritten off
Reasons forwrite-off
procedures
| performed |
Whether the payments arisefrom related transactions
Description of write-off accounts receivable:
N/A
(4) Accounts receivable with Top 5 ending balances by debtor
Unit: yuanUnit name
| Ending balance of accounts receivable | Proportion in total other ending balance of accounts receivable | Ending balance of bad debt provision | |
| First | 24,061,555.94 | 6.73% | 1,203,077.80 |
| Second | 17,046,600.10 | 4.77% | 852,330.01 |
| Third | 11,967,250.86 | 3.35% | 598,362.54 |
| Fourth | 10,284,791.02 | 2.88% | 514,239.55 |
| Fifth | 10,197,572.95 | 2.85% | 509,878.65 |
| Total | 73,557,770.87 | 20.58% |
(5) Accounts receivable derecognized due to transfer of financial assets
N/A
(6) Amount of assets and liabilities formed by transferring accounts receivables and continuing involvement
N/A
Other description:
N/A
2. Other receivables
Unit: RMB
| Item | Closing Balance | Beginning balance |
| Other receivables | 125,325,368.83 | 123,628,108.60 |
| Total | 125,325,368.83 | 123,628,108.60 |
(1) Interest receivable
1) Classification of interest receivable
Unit: RMB
| Item | Closing Balance | Beginning balance |
2) Important overdue interest
Unit: RMBBorrower Closing Balance Overdue time Overdue reason
Other description: N/A
3) Provision for bad debt
? Applicable ? Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit: RMB
Whether there is impairmentand its judgment basisProject (or invested unit)
| Project (or invested unit) | Closing Balance | Beginning balance |
2) Important dividends receivable with the aging more than 1 year
Unit: RMBProject (or invested unit)
Aging Reason for non-recovery
| Closing Balance | Whether there is impairment and its judgment basis |
3) Provision for bad debt
? Applicable ? Not applicableOther description:
N/A
(3) Other receivables
1) Other receivables classified by nature
Unit: RMB
| Nature of payment | Ending book balance | Beginning book balance |
| Compensation for investment and construction project of Heyuan Winner |
224,655,320.00 224,655,320.00
| Employee pretty cash | 1,298,837.39 | 592,876.83 |
| Margin and deposit | 2,920,068.30 | 3,941,268.30 |
| Intercourse funds with related parties | 4,837,854.44 | 4,688,603.35 |
| Others | 4,373,835.77 | 2,426,136.82 |
| Total | 238,085,915.90 | 236,304,205.30 |
2) Provision for bad debt
Unit: RMBProvision for bad debt
Stage 1Expected credit losses
over the next 12
months
Expected creditlosses over theentire duration
(without credit
| impairment) | Stage 3 |
Expected creditlosses over the entire
duration
(with credit
Total
| impairment) | ||||
| Balance on January 1, 2023 | 112,676,096.70 | 112,676,096.70 | ||
| Balance on January 1, 2023 in the current period | ||||
| Accrual in current period | 103,908.37 | 103,908.37 | ||
| Reversal in current period | 19,458.00 | 19,458.00 | ||
| Balance on June 30, 2023 | 112,760,547.07 | 112,760,547.07 | ||
Changes in book balance with significant changes in the current period of provision for loss? Applicable ? Not applicable
Disclosure by aging
Unit: RMB
| Aging | Closing Balance |
| Within 1 year (including 1 year) | 10,630,881.10 |
| 1~2 years | 484,599.00 |
| 2~3 years | 2,311,115.80 |
| More than 3 years | 224,659,320.00 |
| 3~4 years | 224,655,320.00 |
| 4~5 years | 4,000.00 |
| Total | 238,085,915.90 |
3) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: RMBClass
Beginningbalance
Closing BalanceAccrual
| Amount of change in current period | ||
| Recovered or reversed | ||
Write-off Others
112,676,096.70
| Provision for bad debts of other receivables |
103,908.37 19,458.00 112,760,547.07
| Total | 112,676,096.70 | 103,908.37 | 19,458.00 | 112,760,547.07 |
Where the amount of bad debt provision reversed or recovered is important:
Unit: RMB
| Unit name | Amount reversed or recovered | Recovery way |
4) Other receivable actually written off at the current period
Unit: RMB
| Item | Amount written off |
Write-off of important other receivables:
Unit: RMB
Unit name
| Nature of other receivables | Amount written off | Reasons for write-off | Write-off procedures performed | Whether the payments arise from related transactions |
Description of write-off of other receivables:
N/A
5) Other receivables with Top 5 ending balances by debtor
Unit: RMBUnit name Nature of payment Closing Balance Aging
other ending
| balance receivable |
Ending balance ofbad debt provisionFirst
224,655,320.00 3~4 years 94.36%
| Receivables related to Heyuan project |
112,327,660.00
| Second | Margin and deposit | 2,311,115.80 | 2~3 years | 0.97% | 115,555.79 |
| Third | Others | 1,960,692.59 | Within 1 year | 0.82% | 98,034.63 |
| Fourth | Margin and deposit | 399,599.00 | 1~2 years | 0.17% | 19,979.95 |
| Fifth | Employee pretty cash | 209,600.00 | Within 1 year | 0.09% | 10,480.00 |
| Total | 229,536,327.39 | 96.41% | 112,571,710.37 |
6) Accounts receivable involving government subsidies
Unit: RMBUnit name
Closing Balance Ending aging
| Name of government subsidy project | Estimated collection time, amount and basis |
N/A
7) Other receivables derecognized due to transfer of financial assets
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvement
Other description:
3. Long-term equity investment
Unit: RMB
Item
| Closing Balance | Beginning balance |
Book balance
Book value Book balance
| Provision for impairment | Provision for impairment |
Book value
3,560,960,018.63
| Investment in subsidiaries |
4,086,994.48 3,556,873,024.15 3,530,099,178.63 4,086,994.48
3,526,012,184.15
| Investment on joint ventures |
andcooperative
23,223,514.90
| enterprises |
23,223,514.90 21,642,696.16
21,642,696.16
| Total | 3,584,183,533.53 | 4,086,994.48 | 3,580,096,539.05 | 3,551,741,874.79 | 4,086,994.48 | 3,547,654,880.31 |
(1) Investment in subsidiaries
Unit: yuan
Invested unit
Beginning balance
(Book value)
Closing Balance(Book value)
| Increase or decrease in current period | Balance of | |
impairmentprovision at the
Furtherinvestment
Capitalreduction
Provision forimpairment
Others
| end of period | ||
| Winner Medical (Huanggang) |
267,491,627.79 267,491,627.79
| Winner Medical (Jingmen) |
27,242,761.31 27,242,761.31
| Shenzhen Purcotton |
130,000,000.00 130,000,000.00
| Winner Medical (Chongyang) |
33,629,806.08 33,629,806.08
| Winner Medical (Jiayu) |
236,436,595.28 236,436,595.28
| Winner Medical (Tianmen) |
39,697,276.28 39,697,276.28
| Winner Medical (Hong Kong) |
1,456,720.00 1,456,720.00
| Winner Medical (Yichang) |
18,595,897.41 18,595,897.41
| Winner Medical Malaysia |
4,086,994.48
| Winner Medical (Heyuan) |
100,000,000.00 100,000,000.00
| Winner Medical (Wuhan) |
400,000,000.00 400,000,000.00
| PureH2B | 150,000,000.00 | 150,000,000.00 | |||||
| Longterm Medical |
727,540,000.00 727,540,000.00
| Winner Guilin | 450,000,000.00 | 450,000,000.00 | |||||
| Winner Medical (Hunan) |
751,921,500.00 751,921,500.00
| Junjian Medical | 192,000,000.00 | 192,000,000.00 | |||||
| Shanghai Hongsong |
30,000,000.00 30,000,000.00
| Pan-China (H.K.) |
860,840.00 860,840.00
| Total | 3,526,012,184.15 | 30,860,840.00 | 3,556,873,024.15 | 4,086,994.48 |
(2) Investment in cooperative enterprise and joint ventures
Unit: yuanInvestedentity
Beginning
balance(Book value)
Closing Balance
(Book value)
Endingbalance ofimpairmentprovisionFurtherinvestment
Capitalreduction
Investment gains andlosses recognized by
the equity method
| Increase or decrease in current period | ||
| Adjustment of | ||
othercomprehensive
Changesin otherequity
Declared paymentof cash dividends
or profits
Provision
forimpairment
Others
| income | |||
| I. Cooperative enterprise | |||
| II. Joint venture | |||
| Chengdu Winner | |||
21,642,696.16 1,580,818.74 23,223,514.90
| Subtotal | 21,642,696.16 | 1,580,818.74 | 23,223,514.90 | ||||||||
| Total | 21,642,696.16 | 1,580,818.74 | 23,223,514.90 |
(3) Other description
4. Operating income and cost
Unit: RMB
Item
| Amount incurred in current period | Amount incurred in previous period | |||
| Income | Cost | Income | Cost | |
| Main business | 1,649,626,729.34 | 1,102,744,068.83 | 3,058,391,903.35 | 1,930,682,989.44 |
| Other businesses | 39,358,109.10 | 4,490,396.82 | 40,133,344.65 | 3,940,215.49 |
| Total | 1,688,984,838.44 | 1,107,234,465.65 | 3,098,525,248.00 | 1,934,623,204.93 |
Income related information:
Unit: RMB
| Contract classification | Segment 1 | Segment 2 | Total |
| Type of goods | |||
| Including: | |||
| Classified by operating area | |||
| Including: | |||
| Type of markets or clients | |||
| Including: | |||
| Type of contracts | |||
| Including: | |||
| Sorted by time of goods transfer | |||
| Including: | |||
| Sorted by contract duration | |||
| Including: | |||
| Sorted by sales channels | |||
| Including: | |||
| Total |
Information related to performance obligations:
N/AInformation related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations signed but not yet performed or completed at the end ofthis reporting period is RMB 0.00, of which RMB 0.00 is expected to be recognized as revenue in year 0, RMB 0.00 isexpected to be recognized as revenue in year 0, and RMB 0.00 is expected to be recognized as revenue in year 0.
Other description:
N/A
5. Investment income
Unit: RMBItem
Amount incurred in previous period
| Amount incurred in current period | |
| Long-term equity investment income checked by cost method |
700,000,000.00
1,580,818.74 2,408,209.89
| Long-term equity investment gains measured by employing the equity method |
| Investment income from disposal of long-term equity investment |
-60,131.13
31,943,539.75 15,644,141.24
| Investment income from purchasing financial products | ||
| Total | 33,524,358.49 | 717,992,220.00 |
6. Others
N/A
XVIII. Further Information
1. Statement of current non-recurring gain and loss
√Applicable □ Not applicable
Unit: RMB
| Item | Amount | Description |
| Profits and losses on the disposal of non-current assets (including the write-off part of the provision for asset impairment) |
3,740,723.17
| Government subsidies included into current profits and losses, except the government subsidies which are closely related to the normal business operations |
of the Company and conform to the national policies
46,758,694.51
| and regulations, and continuously granted in accordance with a certain standard quota or amount. |
business operations, the profit and loss from fair value changes
| arising from holding trading financial assets and trading financial liabilities, |
97,471,458.42
| as well as the investment income from disposal of trading financial assets, trading financial liabilities and available-for-sale financial assets |
| Income and expenditure other than those mentioned above | 3,301,678.67 | |
| Less: Amount affected by income tax | 23,439,559.06 | |
| Amount of minority shareholders' equity affected (after tax) | -3,725,567.79 | |
| Total | 131,558,563.50 |
Other profit and loss items that are consistent with the definition of non-recurring profit and loss:
?Applicable ?Not applicableThere was no other profit and loss items that are consistent with the definition of non-recurring profit and loss.Explanation on defining the non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 onInformation Disclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses as recurring profit andloss items?Applicable ?Not applicable
2. Return on net assets and earnings per share
Reporting profit
averagereturn on net
| assets | Earnings Per Share |
Basic EPS (yuan/share)
Diluted EPS(yuan/share)
5.71% 1.1599 1.1599
| Net profit attributable to common shareholders of the Company |
| Net profit attributable to common shareholders of the |
Company after deduction of non-
4.61% 0.9365 0.9365
3. Differences in Accounting Data under Domestic and Foreign Accounting Standards
(1) The difference between net profits and net assets in the financial statements disclosed according to the International
Accounting Standards (IAS) and Chinese Accounting Standards simultaneously?Applicable ?Not applicable
(2) The difference between net profits and net assets in the financial statements disclosed according to the Overseas
Accounting Standards and Chinese Accounting Standards simultaneously?Applicable ?Not applicable
(3) Causes for differences in accounting data under domestic and foreign accounting standards. If the difference adjustment
has been made to the data audited by the overseas audit institution, the name of the overseas audit institution shall beindicated
4. Others