Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
Nanji E-commerce Co., Ltd.
Annual Report 2019
April 2020
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
南极电商股份有限公司
英文年报披露说明
南极电商股份有限公司（以下简称“本公司”）为了更好地服务越来越多的境外投资者，首次
披露英文年报（以下简称“本报告”），旨在向境外投资者更详细地展示公司的经营与财务信
息，传递公司的投资价值。
本次英文版年报翻译过程涉及众多消费品行业、电子商务行业和财务会计的专业术语，公司
已努力确保年报原文内容得到准确的传递，但仍可能会存在不恰当之处。
本英文版年报译自中文版年报，在对中、英文版的理解上发生歧义时，以中文版为准。欢迎
本英文年报的阅读者在发现问题或难以理解的内容时，发邮件至公司董事会秘书
（caoyitang@nanjids.com）询问与交流，也帮助公司提升后续版本的翻译质量。我们诚挚地欢
迎您的批评、指正与建议。
Nanji E-Commerce Co., Ltd.
Disclosure Statement of the Annual Report (English Version)
Nanji E-Commerce Co., Ltd. (hereinafter as “the Company”) discloses the first annual report in
English (hereinafter as “the Report”) to better serve international investors, and aims to
comprehensively disclose the Company's business situation and financial information, and present
the investment value of the Company to international investors.
As the Annual Report’s translation involves many professional terms of the consumer goods industry,
E-commerce industry, and financial accounting, the Company has made great efforts to ensure the
accurate translation of the original content, but there may still be some mistranslations.
This English version is translated from the Chinese version. In case of any discrepancy between the
Chinese version and the English version, the Chinese version shall prevail. Any reader of the Report
is welcome to send an email to the Board Secretary (caoyitang@nanjids.com) for inquiry if
encountering any problems or incomprehensible contents, and at the same time help the Company
improve the translation quality of subsequent reports. We sincerely welcome your criticism,
correction, and suggestions.
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
Letter to Shareholders
In 2019, Nanji E-commerce Co., Ltd. (hereinafter referred to as "the Company") generated the operating revenue
of RMB 3.907 billion, with a year-on-year increase of 16.52%, of which RMB 1.398 billion yuan was achieved by
Nanji Business Units (“NJBU”) , with a year-on-year increase of 34.66%. And with an increase of 36.06% year on
year, the net profit attributable to shareholders of the Company amounted to RMB 1.206 billion, of which RMB
1.099 billion was achieved by NJBU, with a year-on-year increase of 44.81%. At the same time, the Company
achieved the net operating cash flow of RMB 1.255 billion, with a year-on-year increase of 127.59%, of which
RMB 176.72 million was achieved by Timelink, with the net amount changed from negative to positive. In a word,
the Company has maintained steady growth.
In 2019, the Company further enhanced the business and management capabilities in eight aspects, including
the consumer traffic, efficiency, value chain, data empowerment, organization, culture, sharing, and risk
control:
1. Traffic optimization: complied with the traffic rules of the E-commerce channels, promoted the large licensed
store strategy, and achieved better results;
2. Efficiency improvement: the product categories covered by the Company's brands focused on the products with
medium and high frequency of purchase, and the Company took advantage of the digital measures to achieve the
precise allocation of resources of suppliers and distributors, thus facilitating the rapid response of the supply chain;
3. Data empowerment: The Company made full use of the big data empowerment, and independently developed
the data management and business intelligence tools "Nanji Data Cloud" and "Nanji Middle Platform", centering
on the E-commerce platform;
4. Value chaining: 1) design empowerment: cooperated with the excellent design service companies to further
enhance the Company's commodity image; 2) gallery sharing: established the abundant product-packaging and
logistics-packaging photo gallery for utilization by partners;
5. Organizational evolution: The Company established branches in various major industrial zones to provide the
licensed suppliers with one-to-one and inch-by-inch services in quality management, intellectual property
management, packaging management, etc.;
6. Cultural self-motivation: The Company encouraged the employees and partners to find out their own value
points at the Company's platform to achieve the self-motivation and self-fulfillment through the employee work
logs, employee thoughts refinement, client ideas sharing meeting, study tour and other measures;
7. Risk control: The Company has established strategic cooperative relations with many third-party quality
inspection agencies to provide quality consultation, quality management training, sampling inspection, and other
services for suppliers;
8. Value sharing: The Company has implemented the Stock Options Incentive Plan. In the first phase, 122
employees were granted with 13,597,200 stock options in 2019. And allowing the employees to share the benefits
of the Company's growth is one of the sources of the Company's healthy and sustainable development.
Since 2020, although the coronavirus epidemic at the beginning of the year has brought many challenges, the
Company, from top to bottom level, has been fighting hard to win the battle against the epidemic situation. We and
our partners have responded actively and quickly and tried our best to create a safe and healthy work environment
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for employees. Furthermore, we have sent the urgently needed goods and materials to the anti-epidemic areas and
fulfilled our social responsibility. We believe that with the concerted efforts, we can definitely achieve the final
victory.
We will gradually launch new products in 2020. During the coronavirus pandemic, the Company launched the anti-
bacterial and health products, such as “75% alcohol”. In addition, we have been actively expanding our new business
including the internet celebrity business, and have been more diverse and effective in the sales channel operations.
We, on one hand, will train more licensed stores to perform the live streaming in stores, and on the other hand, will
establish a new supply chain system and a new portfolio of live streamers on Tik Tok and Kuaishou, combining
with the live broadcasting product requirements.
Therefore, there are both challenges and opportunities for our Company in the year of 2020. Although there are
certain uncertainties in the external environment, we will continue to enhance our business and management
capabilities in eight aspects, including the traffic, efficiency, value chain, data empowerment, organization, culture,
sharing, and risk control, and strive to build a world-class consumer goods giant!
Many thanks to all shareholders for your trust, understanding, and support towards the management team of the
Company!
Nanji E-commerce Co., Ltd.
Chairman: ZHANG Yuxiang
April 15, 2020
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
Table of Contents
Section 01 Important Notice, Table of Contents and Definitions.............................................................................................................6
Section 02 Company Profile and Key Financial Indicators .....................................................................................................................9
Section 03 Business Overview of the Company ....................................................................................................................................16
Section 04 Management Discussion & Analysis ...................................................................................................................................32
Section 05 Important Matters ................................................................................................................................................................68
Section 06 Changes in Shares and Information of Shareholders .........................................................................................................109
Section 07 Preferred Shares ................................................................................................................................................................. 119
Section 08 Convertible Bonds .............................................................................................................................................................120
Section 09 Directors, Supervisors, Senior Executives and Employees ................................................................................................121
Section 10 Corporate Governance .......................................................................................................................................................133
Section 11 Information on Corporate Bond .........................................................................................................................................141
Section 12 Financial Statements ..........................................................................................................................................................142
Section 13 List of Documents for Reference .......................................................................................................................................335
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
Section 01 Important Notice, Table of Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors, and senior
executives of the Company guarantee that the Annual Report is authentic, accurate, and
complete, without any false record, misleading statement, or significant omission, and
will assume the joint and several legal liabilities.
ZHANG Yuxiang, the Company’s legal representative and person in charge of
accounting, and SHI Yiwei, the finance manager, jointly state that: they guarantee that
the Financial Report of the Annual Report is authentic, accurate, and complete.
All directors attended the Board Meeting for reviewing this Report.
The forward-looking statements such as future plans and development strategies in this
Annual Report shall not constitute a substantial commitment to investors by the
Company. The Company asks the investors to carefully read the full text of this Annual
Report, and pay special attention to "(III) Possible risks" of "IX. Prospect of the
Company's Future Development" in “Section 04 Management Discussion & Analysis”
of this Annual Report.
The Company's proposal for the distribution of profit reviewed and approved by this
Meeting of the Board of Directors is that: based on 2,437,913,476 shares, the Company
will distribute cash dividend of RMB 1.24 (tax inclusive) and 0 bonus share (tax
inclusive) for every 10 shares to all shareholders, and increase 0 share for every 10
shares to all shareholders by transferring the capital reserve.
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
Definitions
Term refers to Description
China, PRC refer to The People’s Republic of China
Company, the Company, listed company, NJDS refer to Nanji E-commerce Co., Ltd., which is the parent company in law
The listed company’s entities other than Beijing Timelink Network
Nanji Business Units, NJBU refer to
Technology Co., Ltd.
Nanji E-Commerce (Shanghai) Co., Ltd., which is a wholly-owned
Shanghai NJDS, NJDS (Shanghai) refer to subsidiary of the listed company, a subsidiary-in-law, and the main body
for the preparation of the Company's financial statements
Fengnan Investment refers to Shanghai Fengnan Investment Center LLP
Xiaodai refers to Shanghai Xiaodai Finance Lease Co., Ltd.
Guangzhou XiEnEn, XiEnEn refer to Guangzhou XiEnEn Culture Communication Co., Ltd.
Timelink refers to Beijing Timelink Network Technology Co., Ltd.
Beijing Henri Jayer, Henri Jayer refer to Beijing Henri Jayer Technology Co., Ltd.
RAYAS refers to Xinjiang RAYAS Network Technology Co., Ltd.
VIVO refers to Vivo Mobile Communications Co., Ltd.
CCPL refers to CARTELO CROCODILE PTE LTD
Abbreviation of “Gross Merchandise Volume”, with the meaning of the
GMV refers to
transaction amount
Abbreviation of Application, which generally refers to "the mobile phone
APP refers to
software"
Abbreviation of “Stock Keeping Unit”, which refers to the smallest
SKU refers to
available unit of goods
Abbreviation of HTML5, which is the fifth version of HTML, with the
H5 refers to
full name of the "HyperText Markup Language"
"Tmall Mall", "Taobao.com" and other E-commerce trading platforms
Ali refers to
affiliated to Alibaba Network Technology Co., Ltd.
VIP.com refers to E-commerce trading platform affiliated to Vipshop (China) Co., Ltd.
E-commerce trading platform affiliated to Beijing Jingdong Century
JD.COM refers to
Trade Co., Ltd.
Social E-commerce refers to Social E-commerce platforms, such as PDD, Aikucun, Yunji, and Beidian.
Online refers to E-commerce sales channels, such as Ali, JD.COM, PDD, and VIP.com.
Traditional sales channels, such as offline stores, shopping mall counters,
Offline refers to
and supermarket channels.
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CSRC refers to China Securities Regulatory Commission
RSM China CPA LLP (former name: Huapu Tianjian Certified Public
Accounting Firm refers to
Accountants LLP)
Reporting Period, the Reporting Period refer to Year 2019
RMB, 10,000 RMB, 100 million RMB refer to RMB (yuan), RMB 10,000 yuan, RMB 100 million yuan
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
Section 02 Company Profile and Key Financial Indicators
I. Company Information
Stock Abbreviation NJDS Stock Code 002127
Stock abbreviation changed (if
N/A
any)
Listing stock exchange Shenzhen Stock Exchange
Chinese name of the Company 南极电商股份有限公司
Chinese abbreviation of the
南极电商
Company
Name of the Company in
Nanji E-Commerce Co., LTD
foreign language (if any)
Abbreviation of the name of
the Company in foreign NJDS
language (if any)
Legal representative of the
ZHANG Yuxiang
Company
Registered address 8/F, Huiying Building, No.388 Dunhuang Road, Shengze Town, Wujiang District, Suzhou, Jiangsu
Postal code of the registered
215228
address
Office address: 7/F-10/F, Building 3, The Springs Center, No.99 Jiangwancheng Road, Yangpu District, Shanghai
Postal code of the registered
200438
address
Company website http://www.nanjids.com/
E-mail nanjids@nanjids.com
II. Contact Person and Contact Information
Secretary of the Board of Directors Representative of Securities Affaires
Name CAO Yitang SHI Yuting
10/F, Building 3, The Springs Center, No.99 10/F, Building 3, The Springs Center, No.99
Address
Jiangwancheng Road, Shanghai Jiangwancheng Road, Shanghai
Tel 021-63461118-8122 021-63461118-8885
Fax 021-63460611 021-63460611
E-mail caoyitang@nanjids.com shiyuting@nanjids.com
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
III. Information Disclosure &Location of Annual Report
Company’s Designated Information Disclosure Media Securities Times
Website designated by CSRC for publishing the Annual
http://www.cninfo.com.cn
Report
Place where the Annual Report is available for
Office of the Secretary of the Board of Directors of the Company
inspection
IV. Change of Registered Information
Organization code 91320500714954842N
According to the resolution of the Second Extraordinary General Meeting of the
Company in 2014, it was agreed that the Company's business scope would be changed
to: the production and sales of textiles and apparel, accessory, and embroidery; sales of
raw and auxiliary materials, textile additives, thread spinner and thread spinner
accessories related to the Company's business; self-management and agency of the
import and export business for all kinds of commodities and technologies (except for the
commodities and technologies that are restricted for operation or prohibited for import
& export by the State); operation of the processing with imported materials and
"processing and compensation trades (i.e., processing with supplied materials,
processing with supplied samples, assembling with supplied parts, and compensation
trade)" business; industrial investment, investment management, and investment
consulting. The registration of relevant industrial and commercial changes has been
completed on December 1, 2014. According to the resolution of the First Extraordinary
General Meeting of the Company in 2016, it was agreed that the Company's business
scope would be changed to: Internet retail and foreign trade; foreign investment,
Changes of the main businesses of the investment management & consulting, enterprise management information consulting;
Company since listed (if any) E-commerce technical support & information consulting, business consulting, and
marketing planning; conference services, brand design, brand management, PR activities
planning, cultural & art exchange activities planning, corporate image planning,
exhibition & display services, photography services, cultural & educational information
consulting; agricultural products processing & sales; development, transfer, consulting,
and service in terms of the network technology, information technology and textile
technology; quality management consulting & technical services; sales of knitwear &
textile, apparel & accessory, leather products, bags & suitcases, shoes & hats, beddings,
craft gifts, washing products, pet supplies, cosmetics, skin-care products, photographic
equipment, toys, audio equipment & apparatus, labor protection products, metal
products, furniture, household appliances, kitchen supplies, communication equipment,
electronic products, water treatment & purification equipment, hardware & electrical
equipment, cultural & educational stationeries, office supplies, clothing fabrics, clothing
accessories. (Any business item, which is required to be approved according to laws,
may not be operated until it is approved by the competent authority.) The registration of
relevant industrial and commercial changes has been completed on March 2, 2016.
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According to the resolution of the 2016 Annual General Meeting of the Company, it was
agreed to add the content of "sales of prepackaged foods (excluding the refrigerated &
frozen foods)" in the business scope of the Company, and the registration of relevant
industrial and commercial changes has been completed on June 8, 2017. According to
the resolution of the Fourth Extraordinary General Meeting of the Company in 2017, it
was agreed to add the content of "design, production, agency, launch of various
advertisements; and software research & development" in the business scope of the
Company; and the registration of relevant industrial and commercial changes has been
completed on November 22, 2017. According to the resolution of the First Extraordinary
General Meeting of the Company in 2020, it was agreed to change the registered address
of the Company to 8/F, Huiying Building, No.388 Dunhuang Road, Shengze Town,
Wujiang District, Suzhou, Jiangsu, and the registration of relevant industrial and
commercial changes has been completed on March 13, 2020.
Changes of controlling shareholders (if any)
No change
during the reporting period
Ⅴ. Other Related Information
Accounting firm employed by the Company
Name of accounting firm RSM China CPA LLP
No. 920-926 of Beijing Foreign Trade Building, No. 22 Fuchengmenwai Street, Xicheng
Office address of accounting firm
District, Beijing
Names of the signing accountants CHU Shiwei and KONG Lingli
Any sponsor institution engaged by the Company to perform continuous supervision duties during the reporting period:
□ Applicable (A) √ Not applicable (N/A)
Any financial adviser engaged by the Company to perform continuous supervision duties during the reporting period:
√ Applicable (A) □ Not applicable (N/A)
Office address of financial Name of main financial
Name of financial advisor Period of continuous supervision
advisor consultant
The period of continuous
supervision lasted from December
6/F, Donghai Securities 2015 to December 31, 2018. After
Mansion, No. 1928 Dongfang WANG Zhongyao and December 31, 2018, the continuous
Donghai Securities Co., Ltd.
Road, Pudong New Area, WANG Yueyu supervision was conducted for the
Shanghai unused funds raised by issuing
shares to purchase assets and raise
the supporting funds in 2015.
19/F & 20/F, West Tower, The period of continuous
CITIC Securities South China
Guangzhou International supervision lasted from December
Co., Ltd. (former name: ZHANG Yu and YU Lihua
Finance Center, No.5 West 2017 to December 31, 2018. After
Guangzhou Securities Co., Ltd.)
Zhujiang Road, Tianhe District, December 31, 2018, the continuous
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
Guangzhou supervision was conducted for the
unused funds raised by issuing
shares to purchase assets and raise
the supporting funds in 2017.
VI. Key Accounting Information and Financial Indicators
Whether the Company needs to make the retroactive adjustment or restatement for the accounting data of previous years?
√ Yes □ No
Rationale for the retroactive adjustment or restatement
Other reasons
Year 2018 Change YoY Year 2017
Year 2019 Before After Before After
After adjustment
adjustment adjustment adjustment adjustment
Operating revenue (RMB) 3,906,848,236.41 3,352,859,972.47 3,352,859,972.47 16.52% 985,786,831.11 985,786,831.11
Net profit attributable to
shareholders of the listed 1,206,136,918.38 886,472,236.97 886,472,236.97 36.06% 534,291,649.78 534,291,649.78
company (RMB)
Net profit attributable to
shareholders of the listed
company after deducting 1,147,929,618.05 841,191,770.57 841,191,770.57 36.46% 501,301,653.39 501,301,653.39
non-recurring profits and
losses (RMB)
Net cash flow from
1,254,911,826.62 551,386,932.66 551,386,932.66 127.59% 537,793,308.69 537,793,308.69
operating activities (RMB)
Basic EPS (RMB/share) 0.49 0.36 0.36 36.11% 0.34 0.23
Diluted EPS (RMB/share) 0.49 0.36 0.36 36.11% 0.34 0.23
Weighted average return
28.13% 26.05% 26.05% 2.08% 27.26% 27.26%
on net assets
Increase or
At the end of 2018 decrease of At the end of 2017
At the end of 2019 YoY
Before After Before After
After adjustment
adjustment adjustment adjustment adjustment
3,820,524,278. 3,820,524,278.
Total assets (RMB) 5,484,815,012.19 4,549,248,714.71 4,549,248,714.71 20.57%
42 42
Net assets attributable to
3,021,168,578. 3,021,168,578.
the shareholders of the 4,858,727,120.86 3,738,582,158.34 3,738,582,158.34 29.96%
39 39
listed company (RMB)
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VII. Accounting Data Differences under Domestic and Overseas Accounting Standards
1. Difference of net profit and net asset disclosed according to IFRS (International Financial Reporting
Standards) and CAS (Chinese Accounting Standards)
□ Applicable (A) √ Not applicable (N/A)
No such case during the reporting period.
2. Difference of net profit and net asset disclosed according to overseas accounting standards
and CAS
□ Applicable (A) √ Not applicable (N/A)
No such case during the reporting period.
VIII. Key Financial Indicators by Quarters
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 824,328,152.30 810,066,302.83 1,012,778,700.10 1,259,675,081.18
Net profit attributable to
122,050,417.60 264,170,858.03 215,876,565.20 604,039,077.55
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
118,975,641.84 242,576,049.56 204,208,165.29 582,169,761.36
after deducting non-recurring
profits and losses
Net cash flow from operating
91,167,763.93 58,984,344.11 141,781,097.22 962,978,621.36
activities
Whether the above-mentioned financial indicators or their total number are significantly different from the financial indicators
related to the quarterly reports and semi-annual reports disclosed by the Company?
□ Yes √ No
IX. Items and amounts of non-recurring profits or losses
√ Applicable (A) □ Not applicable (N/A)
Unit: RMB
Item 2019 2018 2017 Remark
Gains/losses on disposals of non-current
assets (including offsetting amount for the -34,285.41 -1,211,529.23 100,541.10 —
provision of impairment of assets)
Tax refunds or reductions with ultra vires
—
approval or without official approval
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documents
Government grants recognized in current
profit or loss (except government grants that
is closely related to operations and 25,146,036.05 18,442,213.20 17,830,092.35 —
determined based on a fixed scale according
to the national unified standard)
Funds occupation fee recognized in current
—
profit or loss from non-financial companies
The excess of attributable fair value of net
identifiable assets over the consideration paid
—
for subsidiaries, associates or joint ventures
recognized by the Company
Gains or losses on non-monetary assets
—
exchange
Gains on entrusted investments or asset
33,933,372.78 23,715,571.43 8,966,777.19 —
managements
Provision for impairment of each asset due
—
to force majeure such as a natural disaster
Gains or losses on debt restructuring —
Corporate restructuring charge, such as
expenditure for staff resettlement and —
integration cost
Gains /losses from excess of fair value in
—
non-arm’s length transactions
Net gains/losses of subsidiaries arising from
business combination under common
—
control from the beginning of the reporting
period till the combination date
Gains /losses arising from contingencies
other than those related to principal —
activities of the Company
Gains /losses arising from changes in fair
value of held-for-trading financial assets,
derivative financial assets, held-for-trading
financial liabilities and derivative financial
liabilities during the holding period and
—
investment income arising from disposal of
held-for-trading financial assets, derivative
financial assets, held-for-trading financial
liabilities, derivative financial liabilities and
other debt investment except effective
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hedging transactions related to the
Company's principal activities
Reversal of provision for impairment of
accounts receivable or contract assets tested 100,000.00 2,282,922.39 3,261,941.88 —
for impairment individually
Gains /losses arising from entrusted loans to
—
other entities
Gains /losses arising from changes in fair
value of investment properties adopting fair —
value model for subsequent measurement
Impact of one-off adjustment of current
profits or losses based on the requirements of
—
taxation and accounting laws and
regulations
Custody fee income from the entrusted
—
operation
Other non-operating income/expenses
10,199,020.48 8,535,035.43 6,957,271.45 —
except for items mentioned above
Other non-recurring profits or losses defined —
Less: Income tax effect 11,113,272.14 6,479,265.19 4,114,543.78 —
Minority interest effect (after tax) 23,571.43 4,481.63 12,083.80 —
Total 58,207,300.33 45,280,466.40 32,989,996.39 --
Provide explanations for classifying non-recurring profit or loss items defined or listed in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Offering Their Securities to the Public – Non-recurring Profits or Losses, and for classifying
non-recurring profit or loss items listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering
Their Securities to the Public – Non-recurring Profits or Losses as recurring profit or loss items.
□ Applicable (A) √ Not applicable (N/A)
The Company has not classified non-recurring profit or loss items defined or listed in the Explanatory Announcement No. 1 on
Information Disclosure for Companies Offering Their Securities to the Public – Non-recurring Profits or Losses as recurring profit or
loss items during the reporting period.
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Section 03 Business Overview of the Company
I. Main Business of the Company during the Reporting Period
NJDS mainly focuses on the E-commerce channels and strives to build the world-class consumer goods giant
with brand licensing and industry chain services.
During the reporting period, the Company continued to enhance its business and management capabilities in eight
aspects, including the consumer traffic, efficiency, value chain, data empowerment, organization, culture, sharing,
and risk control, and continued to consolidate its competitive advantages.
(I) Overview of Sales Side
1. During the reporting period, the main brand of the Company – NANJIREN (meaning “Antarctican”) took the
household as the usage scenario to provide the distinctive basic products with high cost-performance, penetration
of consumption tier and consumption cycle to consumers on various E-commerce channels, such as Ali, JD.COM,
Social E-commerce, and VIP.com. And the brands of the Company had about 100,000 product links in all E-
commerce channels. The statistically available GMV of the Company in various E-commerce channels has reached
RMB 30.559 billion, with a year-on-year increase of 48.92%. Of which, the GMV of NANJIREN brand is RMB
27.138 billion, with a year-on-year increase of 52.86%.
NANJIREN brand is a leading consumer product brand focusing on the E-commerce channels.
2. NANJIREN brand has attracted numerous visitors, purchasers, and repeat purchasers in various E-commerce
channels with high conversion rate. During the reporting period, the number of pieces paid at the licensed stores of
the Company on the Ali platform was nearly 335 million, and the times of payment was more than 288 million; and
the monthly average number of visitors in NANJIREN underwear category on the Ali platform was about 51.15
million. In addition, the monthly average price per order was about RMB 49.76, with a monthly average conversion
rate of 20.28%.
NANJIREN brand enjoyed a low customer acquisition cost on major E-commerce platforms.
3. The Company has timely complied with the transaction rules of the E-commerce channels, promoted the large
store strategies, and achieved good results;
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The capacity of developing hot-selling product, abundant supply chain, and rapid response of NANJIREN
brand, have quickly formed the scale effect of the licensed stores.
4. The marginal costs and marketing costs for the category expansion of NANJIREN brand were low, mainly due
to the stable flow, the numerous users, and the high repeat purchase rate. Taking Nanjiren Official Flagship Store as
an example, there were about 6,500 SKUs during the reporting period, which had been about 4,800 SKUs in the
same period last year, with a year-on-year increase of 35.42%. In 2019, the proportion of direct promotion fee in
GMV was about 0.87%, which was about 1.04% in 2018, with a year-on-year decrease of 16.35%. During the
reporting period, the GMV of this flagship store reached RMB 1.200 billion, which was RMB 580 million in 2018,
with a year-on-year increase of 107.02%.
NANJIREN brand had obvious advantages in category expansion and marketing costs.
5. During the reporting period on the Ali platform: the GMV of NANJIREN's strong category "Women's/ Men's
underwear/loungewear" was RMB 6.495 billion, which was RMB 4.657 billion in 2018, with a year-on-year
increase of 39.47%. In addition, the market share of this category was 8.42%, which was 6.69% in 2018, ranking
the first in the segment on the Ali platform. And the GMV of "bedding" was RMB 3.503 billion, which had been
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RMB 2.195 billion in 2018, with a year-on-year increase of 59.59%. The market share of bedding was 8.03%, which
was 5.87% in 2018, ranking the first in the segment on the Ali platform.
The market shares of NANJIREN's strong categories have further increased, and there will still be plenty of
room for growth.
6. The Company made full use of the big data for empowerment, and independently developed the data management
and business intelligence tools "Nanji Data Cloud" and "Nanji Middle Platform", centering on the E-commerce
platform.
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The data management tools of the Company have greatly improved the collaborative efficiency between the
distributors and the suppliers, and the operation efficiency of the sales side.
Based on the large user base of the Company, highly competitive product cost-performance, abundant supply
chains, and accurate grasp of platform traffic rules, the Company's products are popular among consumers
at different levels in China. The Company's GMV is expected to continue to grow at a medium to high speed
in the future. In addition, the Company will strive to become a world-class consumer goods giant.
(II) Brand Licensing
During the reporting period, the suppliers and distributors were responsible for all production and sales of
the products.
During the reporting period, the Company had 1,113 licensed suppliers (including about 500 main licensed
suppliers), 4,513 licensed distributors, and 5,800 licensed stores respectively. The division of work was clearer at
different levels of the Company’s licensed stores. The large comprehensive stores sold the "hot-selling products and
hot-selling product groups", and the medium-scale stores conducted the distribution through the supply chain system,
while the small stores identified and tested the distinctive products, which fully reflected the trend of the rise of
large comprehensive stores under the changes in E-commerce traffic rules. The Company took advantage of the
situation and promoted the large store strategies. Furthermore, the Company supported the medium-scale stores to
conduct the distribution through the industrial chain service providers, and implemented the exit mechanism for the
stores with poor performance or with behaviors in the negative list.
(III) Brand Management
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1. Brand gallery sharing service
The Company has continued to attach importance to the upgrading and promotion of brand image. During the
reporting period, the Company has established the abundant product-packaging and logistics-packaging photo
gallery for clients, including 43 packaging pictures in the gallery of the textile & apparel category, 79 packaging
pictures in the gallery of the healthy living category, and 20 packaging pictures in the gallery of the maternal &
infant category. Meanwhile, the Company reviewed 778 packaging pictures in the textile & apparel category
provided by clients. Thus, both the consistency of the Company's brand image and the customized demands of
partners are satisfied at the same time.
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2. Introduction of brand partners
During the reporting period, the Company has signed an agreement with an integrative innovation-design service
company - Lkker ("Lkker Technology Co., Ltd."), which will help the Company to achieve the upgrade and
innovation for the brand products, and further enhance the product image and brand image of the Company.
3. Brand promotion
In order to further enhance the brand awareness, the Company has focused on promoting the new positioning of
NANJIREN, i.e., "My Family Brand", allowing more consumers to know that the products of NANJIREN has
covered many aspects of family life, including underwear, men's/ women's wear, maternal & infant products,
outdoor products, bags & suitcases, shoes, home textiles, and household appliances, so as to increase consumer
awareness of NANJIREN brand. The Company has carried out brand promotion in multiple scenes. During the
reporting period, the Company sponsored the Tmall “Double Eleven” Carnival Night, and advertised on high-speed
rail trains.
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The Company will continue to invest in the image upgrading, advertising, crossover marketing and other
aspects of NANJIREN brand to create a nationally famous family brand, which shall be widely popular
among Chinese consumers.
(Ⅳ) Overview of Supply Side
1. For the factories, the stable order, scale production, healthy cash flow, and low inventory are the key elements for
"good and cheap goods", which have built the existing competitive advantage of NANJIREN brand.
2. With a large user base and high repeat purchase rate, the Company has been operating in the E-commerce
field for nearly 10 years. Its licensed distributors have got strong customer acquisition ability with low customer
acquisition cost, which has provided a guarantee for the licensed factories obtaining enough production orders.
3. The Company has adhered to the correct pricing strategy: " no low price for low purchase frequency, cost-
performance for mid-frequency, high cost-performance for high-frequency."
The Company has complied with the general trend of consumption upgrading and penetration into low-tier markets,
and has been committed to building the world-class consumer goods giant based on E-commerce channels, making
the client's capital turnover and inventory turnover be higher than those of traditional consumer brands.
Thus, our clients can still achieve a satisfactory return on investment, even if under a low gross profit margin.
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4. Supply chain data empowerment: the Company has conducted the in-depth digital guidance to the supply chain
partners, making the consumer demands as the starting point of the business to solve the problems of "Information
Island". The key indicators and analysis of the entire production and sales process for both the sales side and the
supply side were open to all supply chain partners, allowing the entire supply chain to respond to the market changes
quickly.
1) Data empowerment on sales side: set up the data warehouse and establish the long-term available
underlying data services
Based on the business situations of the Company, the data application department of the Company has sorted out
and designed the data warehouse system, containing the two major E-commerce platforms, i.e., Ali and JD.com. It
can effectively support the commercialization of the new products and the development of the original products,
and have considerable performance in the overall computing efficiency and data stability at the same time. With the
implementation of this program, the accumulation and empowerment of data of the Company can be realized in a
long term.
Based on the business situations of the Company, the information development department of the Company has
conducted the statistics for and has sorted out the various brand licensing of the Company for the licensed stores on
different E-commerce platforms and daily GMV data, as well as factory licensing for different suppliers and
trademark procurement data. In addition, it has established the unified control relation of product categories,
business data attribution criteria, and differentiation management standards, and has stored the data in more details
to accommodate the rapidly increasing data volumes and increasingly complex business standards to achieve the
multi-dimensional integration and rapid data analysis finally.
2) Data empowerment on supply side: quality data, equipment data, personnel data, warehousing data,
production capacity data, commodity evaluation, etc.
In addition to the business intelligence module development, during the reporting period, the data application
department and the business units of the Company has achieved a number of joint projects, including the model
research of product selection, shampoo industry research, pet industry research, and industry research of beauty
makeup. At present, the Company has been able to make the deep research for the existing market and perform the
incremental market exploration, with the construction and improvement of data infrastructure, as well as the
establishment of relevant analysis teams, which can match with more in-depth specialized analysis.
During the reporting period, the data-level development was mainly based on the iterative optimization of
supporting data products for business development, aiming at realizing the possibility of supporting data
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empowerment in the vertical scenario. In addition to continuing to help the suppliers and distributors to improve
production and operation efficiency from the product perspective, the Company has also been more proactive in
jointly develop the business growth plans, and conducting the in-depth development and implementation, which has
achieved results in many new projects.
Enable the factory management to understand the data and make use of the data, and help the factory to
conduct accurate production, improve quality, reduce cost, improve turnover, and reduce inventory, so as to
achieve higher production and operation efficiency.
5. Quality management
The Company has continued to promote the quality management for its suppliers, and has made the following
measures during the reporting period:
1) Contracted with the third-party quality inspection agencies: as of the end of the reporting period, the
Company has established the strategic partnerships with 13 third-party quality inspection agencies, among which 7
were added during the reporting period, in order to provide the quality consulting, quality management training,
sampling inspection, and other services for suppliers, and further improve the inspection and monitoring network
of the Company.
2) Optimized the organizational structure: during the reporting period, the Company has further optimized the
organizational structure of the quality management team to be closer to the business, improve efficiency, and achieve
the total quality management. In addition, it has assigned relevant personnel to work in the front-line of the business
units to understand the demands, pain points and difficulties of the quality management of the business units, and
to solve the quality problems in the first place. Meanwhile, the Company has continued to increase its investment
in quality management, and hired much more senior industrial experts to investigate, coach and rectify the quality
management processes, personnel and organizations for the cooperative factories.
3) Investigated and guided the suppliers: during the reporting period, the Company has investigated 320 factories,
compiled 12 Quality Management Operation Instructions in different categories in total, distributed them to the
factories, and sent the industry experts to perform training. Furthermore, the Company has required the factories to
get to the designated institutions for testing as per the regions, aiming at further improving the quality control of the
factory.
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4) Further improved the licence & termination mechanism of the supply chain partners: the Company has
formulated the negative list system, strictly screened the licence of supply chain partners, and carried out the follow-
up detection for the licensed supply chain partners, performed the training, transformation and even elimination for
those failing to meet the standards to create the genuine domestic products.
5) Formulated and implemented the "Mysterious Buyer" Plan: during the reporting period, the Company
formulated the "Mysterious Buyer" Plan, which means that the Company's spot check staff have purchased the
products of the Company in name of customers. And spot check staff have purchased a total of about 30,000 products
licensed by the Company, and inspected the compliance of the certificate of quality, care label, packaging,
appearance, and trademark use for the products. This plan has been carried out gradually.
6. Industry chain service provider
The Company has learned the supply chain management experience from the excellent retail enterprise such as "7-
Eleven", forging ahead on the road to becoming the industrial chain service provider with NJDS characteristics. At
present, a large number of high-quality supply chain companies in China are facing fierce competition, but lack of
stable orders, sufficient funds, and competitive brands. The Company can help the supply chain partners to carry
out the industrial upgrading, acquire consumer traffic from the E-commerce channels more efficiently, and develop
the hot-selling products effectively through our brands and services. The Company encourages the supply chain
partners to provide services such as "drop shipping" based on the consumer demands, and is committed to realizing
the status of "no bad debts in the suppliers and no out-of-season inventories in the distributors."
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The industrial chain service providers cultivated by the Company can promote the continuous development
of high-quality factories, and at the same time, continue to attract new high-quality factories to cooperate
with the Company, gradually improving the comprehensive competitiveness of the licensed industrial chain.
(Ⅴ) Timelink's service
The main business of Timelink, a wholly-owned subsidiary of the Company, has been focusing on the mobile
internet marketing business, i.e., the advertising marketing business on the mobile terminal, promoting APP and
delivering advertisements for clients in these mobile terminals as an agent of the mobile information flow supplier.
1. Information flow suppliers: mainly including VIVO, Xiaomi, Tencent App Store, Toutiao, etc. Timelink enjoys
a stable cooperation relationship with these information flow providers.
2. Advertising clients: mainly including the high-quality clients, such as Tik Tok, Taobao, VIP.com, 360 IOU, and
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Money Station, whose demands for advertisements were stable with low payment risk.
3. Cash flow optimization: during the reporting period, the net operating cash flow of Timelink changed from
negative to positive, achieving the amount of RMB 176,717,476.52.
4. Business innovation: performed the business innovation through combining with the market situations and the
advantages of the Company, deployed the internet celebrity advertising brokerage business, and enriched the
business of the Company.
Timelink can keep sustainable, stable and healthy development for a long time, based on the operating
principle of "Guaranteeing Stability and Controlling Risks".
II. Major Changes in Key Assets
1. Major Changes in Key Assets
Key assets Explanations for major changes
In 2019, the Company has signed the Transfer Agreement for XiEnEn's equity investment,
Long-term equity investments which thus has not met the recognition criteria for the long-term equity investment, then
was transferred to the account of “assets classified as held for sale”.
At the end of 2019, the fixed assets amounted to RMB 6,718,909.97, with an increase of
122.35% compared with the beginning of the year, mainly due to the relocation of the
Fixed assets
actual operating address of the Company in 2019 and the increased procurement of office
equipment.
At the end of 2019, the held-for-trading financial assets amounted to RMB 1.49 billion,
Held-for-trading financial assets with an increase of 231.01% compared with the beginning of the year, mainly due to the
increased procurement of finance products by the Company.
At the end of 2019, the notes receivable amounted to RMB 73,506,158.00, with an increase
Notes receivable of 82.31% compared with the beginning of the year, mainly because some clients have
increased the amount settled by bank acceptance bills.
At the end of 2019, the advances to suppliers amounted to RMB 229,302,915.74, with a
decrease of 58.52% compared with the beginning of the year, mainly due to the decrease
Advances to suppliers
in the prepaid information flow fees made by the subsidiary – Timelink at the end of the
year
At the end of 2019, other receivables amounted to RMB 88,075,286.90, with an increase
Other receivables of 47.16% compared with the beginning of the year, mainly due to the increase in the
purchase margin to supplier paid by the subsidiary – Timelink within the year.
At the end of 2019, the inventories were RMB 5,471,862.14, with an increase of 62.77%
compared with the beginning of the year, mainly due to the increase in the procurement of
Inventories
ready-to-wear conducted by the subsidiary – Cartelo Cale(Shanghai) Trading Co., Ltd.
within the year, which launched the offline children's wear business in 2019.
Long-term deferred expenses At the end of 2019, the long-term deferred expenses amounted to RMB 7,282,365.40, with
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an increase of 6,574.14% compared with the beginning of the year, mainly due to the
increase in the renovation costs for the newly-leased office building by the Company
within the year.
At the end of 2019, other non-current assets amounted to RMB 1,886,792.26, with a
decrease of 87.42% compared with the beginning of the year, mainly because due to the
Other non-current assets input VAT to be deducted was expected to be deducted completely within the coming year,
thus the Company has reclassified its balance to the account of “non-current assets
maturing within one year”.
2. Key Overseas Assets
√ Applicable (A) □ Not applicable (N/A)
Control Proportion of
Significant
Details of Method of Operating measures to Earning the
Asset size Location risk of
assets formation model guarantee status Company’s
impairment?
asset safety net assets
Measure to
Equity RMB621,847 Brand prevent the
CCPL Samoa Good 12.80% No
acquisition ,417.61 licensing trademark
infringements
Measure to
UNIVERSA
Equity RMB 50 British Virgin Brand prevent the
L NEW Good 1.03% No
acquisition million Islands (BVI) licensing trademark
LIMITED
infringements
III. Analysis on Core Competitiveness
(I) Competitive advantages of the brand licensing and service business
1. Accumulated a huge consumer base through the past ten years of operation
The NANJIREN brand had numerous visitors and purchasers on various E-commerce platforms with a high
conversion rate. In 2019, the number of pieces paid at the licensed stores of the Company on the Ali platform was
nearly 335 million, and the times of payment was more than 288 million; and the monthly average visitor number
in NANJIREN underwear category on the Ali platform was nearly 51.15 million. In addition, the monthly average
order price was RMB 49.76, with a monthly average conversion rate of 20.28%.
NANJIREN brand products are popular among consumers in China.
2. The Company enjoys a good credit in various industrial zones through nearly ten years of supply chain
cooperation
The Company has established the continuous and stable cooperative relationship with a large number of high-quality
suppliers and distributors, and has formed the good relations with factories in the industrial zone, through nearly 10
years of operation. On one hand, the Company has taken advantage of the data empowerment to provide assistance
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in resource referral, R&D, traffic management, data analysis & application for suppliers, so as to help them to
develop the hot-selling products, realize the transformation from low-frequency to high-frequency on product usage,
reduce the inventories, and improve the capital turnover rate, and help the factories to achieve low-cost
transformation, and get out of the predicament with the unstable orders and difficulties in getting loans; on the other
hand, the Company has implemented the policy of “Client First” in benefit distribution, which has eased the funding
pressure of supply chain partners and established the good credit trust system, thus forming the "competition barrier".
3. The Company’s organization has optimized continuously to adapt to changes in the market and
consumption.
The Company has continued to maintain small steps of change and innovation, and insisted on self-transformation,
which has allowed the organization to adapt to the changes of the market and the enterprise management demands,
through such measures as organization and process reengineering, information development, culture and
performance management.
In terms of organizational structure, the front business units have been dynamically performing the integration and
adjustment, according to the differentiation of category in E-commerce industry and the supply chain integration
needs of the Company, cultivating the generalists in management comprehensively; in terms of the team
development, the Company has constantly introduced the professional talents to enrich the staff team; and in terms
of the process management, the Company has continuously optimized the process based on business and
management requirements, thus enhancing the organizational efficiency.
4. Roadmap to build a world-class consumer goods giant based on E-commerce channels
The Company believes:
1) Consumer traffic is the essence of E-commerce;
The NANJIREN brand had a good consumer traffic scale in different major E-commerce channels, with the obvious
comparative advantages in number of visitors, purchasers, and repeat purchasers, which made the brand more
competitive;
2) Efficiency is the essence of retail;
The NANJIREN brand has focused on the products with high- or medium frequency of usage, and the precise
allocation for the resources of suppliers and distributors can help the supply chain to respond to the market quickly;
3) Value chain is the essence of business;
The brands, products and services of the Company have formed the foundation of the value chain of our business.
A good brand is a trust endorsement, and can exceed the expectations. Although the products and services of
NANJIREN brand have gained certain achievements, there will be still much space for improvement;
4) Good organization can achieve sustainable competitiveness;
The Company has continued to enhance its competitiveness through such methods as talent recruitment,
organization optimization, and process transformation, and there will still be much space for improvement;
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5) Good culture can generate self-motivation force;
The Company has encouraged the employees to find out their own value points on the platform of the Company to
achieve self-motivation and self-fulfillment. There is still a certain distance for the Company to become one of the
world's top excellent enterprises;
6) Sharing is the essence of platform;
Allowing the employees, clients and shareholders to share the benefits of the Company's growth is the source of the
healthy and sustainable development of the Company’s platform. And it is the responsibility of the Company to
bring the long-term returns to employees, clients and shareholders.
7) Risk control allows the Company to develop healthily;
Good risk control can make the Company invincible. The Company has always advocated the business moralities
of conducting the operation according to laws, performing the business in an honest and trustworthy way, and
attached importance to the quality management and anti-corruption management, with the aim to pursue the long-
term healthy development.
(II) Timelink's competitive advantages in business
1. Timelink had abundant high-quality client resources
Relying on the abundant internet marketing industry experience and resource accumulation of the management team,
Timelink has quickly explored a series of high-quality clients, such as Toutiao, Alibaba Group, Suning.com, Mogujie,
iQiyi, and Netease, who have high demands for service capability and quality. In addition, the good cooperative
relationship with them has reflected the excellent business capabilities of Timelink. During the business exploration
and development, Timelink has quickly established a good reputation and brand influence.
2. Diversified high-quality information flow resources
Timelink not only had high-quality mobile information flow suppliers, such as VIVO and Xiaomi, but also was the
core agent of the mainstream information flow suppliers, such as Tencent App Store and Toutiao. These are the core
media resources of Timelink. In addition, Timelink has expanded the small and medium-sized business (“SMB”) in
Xiaomi's information flow. The wholly-owned subsidiary of Timelink - RAYAS has obtained the SMB exclusive
agency qualification for Xiaomi Advertising in 2019, which has expanded the client resources and enriched the
client types for Timelink. It can help to improve the market share, resource advantage, and the popularity of Timelink,
laying a good foundation of information flow resources for the steady development.
3. Professional business team with excellent marketing and flow integration capabilities
Relying on the experienced business team and diversified information flow resources, Timelink can realize the more
diversified flow integration strategy in the advertising plan setting, develop the targeted plan based on the actual
demands of the client, select the appropriate media resources for the clients, fully improve the promotion efficiency
of the advertising plan, reduce the advertising costs for clients, and gradually gain full recognition from more clients.
The professional mobile internet marketing team of Timelink has provided not only the capability guarantee for its
business realization, but also the early data accumulation for the gradual improvement of its business support system,
and the technical guarantee for the design indicator setting.
4. Gradually improved business support system
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Based on the industry dynamics and market demands, Timelink has developed and used the big data analysis and
application systems, such as real-time marketing delivery monitoring system, market monitoring platform for
mobile application, and real-time bidding system for advertisements, to effectively track the delivering dynamics,
timely adjust the marketing plans, and improve the delivery efficiency. With the continuous increase of the business
scale of Timelink, the numbers of staff, advertising channels, and clients have been increasing accordingly. Hence,
Timelink has developed the integrated management platform that can make the unified management of business and
organization better and reduce management costs.
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Section 04 Management Discussion & Analysis
I. Overview
(I) Business overview
1. Company Mission: To help China's high-quality supply chains achieve continuous success, and provide high
cost-performance products and services to Chinese families!
2. Company Vision: To become a world-class consumer goods giant!
3. Overall business performance:
During the reporting period, the statistically available GMV for the licensed brand products of the Company
amounted to RMB 30.559 billion, with a year-on-year increase of 48.92%; the total number of licensed suppliers of
the Company was 1,113, including about 500 main licensed suppliers; and the total number of licensed distributors
was 4,513, and the number of licensed stores was 5,800.
During the reporting period, the Company achieved an operating revenue of RMB 3,906,848,236.41, with a year-
on-year increase of 16.52%; and the net profit attributable to shareholders of the listed company was RMB
1,206,136,918.38, with a year-on-year increase of 36.06%.
During the reporting period, the Company continued to strengthen the management towards the accounts receivable.
1) The accounts receivable of NJBU (excluding the factoring business) amounted to RMB 605,576,004.51, with a
year-on-year increase of 38.26%;
2) The accounts receivable for the factoring business of the Company amounted to RMB 24,282,084.36, with a
year-on-year decrease of 85.45%;
3) The accounts receivable for the business of Timelink amounted to RMB 159,846,041.33, with a year-on-year
increase of 33.51%;
During the reporting period, the net operating cash flow of the Company has been significantly improved and
amounted to RMB 1.255 billion, with a year-on-year increase of 127.59%, of which, the net operating cash flow for
NJBU amounted to RMB 1,078,194,350.10, with a year-on-year increase of 86.18%. In addition, the net operating
cash flow of Timelink amounted to RMB 176,717,476.52, which changed from negative to positive.
4. Memorabilia in 2019
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(II) Brand analysis
The main brands of the Company include NANJIREN, Cartelo Crocodile, and Classic Teddy.
1. NANJIREN brand is positioned as a family lifestyle brand for the mass market, which has strived to become a
world-class consumer product brand based on the E-commerce channel. In 2019, the NANJIREN brand’s GMV
amounted to RMB 27.138 billion, with a year-on-year increase of 52.86%, which has become one of the leading
brands of E-commerce consumer products.
2. Cartelo Crocodile brand is positioned as an international fashion brand popular with young people, aiming at
providing consumers with products of international fashion and quality at acceptable prices, and striving to become
an influential brand in the its segment. In 2019, Cartelo Crocodile brand's GMV amounted to RMB 2.986 billion,
with a year-on-year increase of 27.94%.
3. Classic Teddy brand is positioned as an international brand, which focuses on the maternal & infant and Co-
Branding business, and strives to become a model of international brand cooperation. In 2019, the GMV of Classic
Teddy brand amounted to RMB 228 million, with a year-on-year increase of 45.61%.
(III) Channel analysis
In 2019, the GMV of the licensed stores of the Company (“the Company’s total GMV”) amounted to RMB 30.559
billion on various E-commerce platforms, with the specific breakdown as follows:
1. GMV achieved at the Ali channel amounted to RMB 20.317 billion, with a year-on-year increase of 39.13%,
accounting for 66.48% of the Company’s total GMV;
2. GMV achieved at the JD.com channel amounted to RMB 4.682 billion, with a year-on-year increase of 31.50%,
accounting for 15.32% of the Company’s total GMV;
3. GMV achieved at major Social E-commerce channels amounted to RMB 3.965 billion, with a year-on-year
increase of 124.89%, accounting for 12.97% of the Company’s total GMV;
4. GMV achieved at the VIP.com channel amounted to RMB 1.445 billion, with a year-on-year increase of 200.35%,
accounting for 4.73% of the Company’s total GMV.
(IV) Category analysis
1. Category positioning overview
1) The product of NANJIREN brand is positioned as a multi-category of new fast-moving consumer product, which
covers various aspects of family life and enjoys a large expansion space;
2) The product of Cartelo Crocodile brand is positioned as a sports fashion-clothing product, which reflects the
international trend;
3) The product of Classic Teddy brand is positioned as the product of the maternal & infant category, which reflects
the cuteness & leisure style.
(The analysis of the major categories is as follows)
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2. Analysis of Underwear Category
1) Category segmentation
The Company’s primary category of "women's underwear/men's underwear/loungewear" (hereinafter referred to as
"underwear category") included such sub-categories as underpants, socks/leggings/silk stockings/leg-shaping
stockings, pajamas/loungewear suits, thermal suits, thermal blouses, thermal pants, bras, nightdress,
suspenders/vests/T-shirts, tube tops, shaping waistbands/waist clips, robes/bathrobes, nipple covers, pajama
pants/lounge pants, shaping jumpsuits, bodybuilding pants, bra sets, shaping blouses, pajama jackets, inserts/breast
pads, shoulder straps, two-piece shaping sets, etc.
2) Category strategy
The underwear category of the Company involved such brands as NANJIREN, Cartelo Crocodile, and Classic
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Teddy, where NANJIREN is the main brand.
NANJIREN has preferably achieved the accurate matching of "people, goods, market, and time" through the "Eight
Coverage" strategies for the underwear category, and grasped the new consumption trends, clarified the brand
positioning and data empowerment to develop the hot-selling products, identified and maintained the accurate target
consumers, quickly penetrated into the blue ocean market segment, to make the consumers become true fans of
NANJIREN, and further establish the advantage barrier for the NANJIREN underwear category, transforming from
the crowd scale advantage to the fans scale advantage.
3) Operational performance
① GMV ranking
In 2019, the GMV of the four sub-categories, including underpants, thermal underwear, socks and loungewear of
NANJIREN brand, ranked first and the GMV of bra subcategory ranked fifth on Ali platform respectively; in
addition, the GMV of the four sub-categories, including underpants, thermal underpants, socks and loungewear of
NANJIREN brand ranked first, and the GMV of bra sub-category ranked second on JD.com platform respectively.
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② GMV performance
In 2019, the statistically available GMV for the underwear categories of the Company’s all brands amounted to
RMB 8.967 billion, with a year-on-year increase of 46.20%, of which:
GMV from the Ali platform amounted to RMB 6.523 billion, with a year-on-year increase of 38.78%;
GMV from the JD.com amounted to RMB 1.131 billion, with a year-on-year increase of 24.38%;
GMV from major Social E-commerce platform amounted to RMB 754 million, with a year-on-year increase
of 131.14%;
GMV from VIP.com amounted to RMB 538 million, with a year-on-year increase of 190.20%;
GMV from other online platforms amounted to RMB 21 million, with a year-on-year increase of 71.65%.
3. Analysis of Bedding Category
1) Category segmentation
The Company’s primary category of "beddings" included such subcategories as bedding sets/four-piece
sets/multiple-piece sets (collectively referred to as "bedding sets"), quilts, pillows/pillow interiors/health care
pillows/cervical pillows (collectively "pillows"), and mattresses/bed mats/protective mattress pads/tatami
mattresses (collectively referred to as "mattresses"), quilt covers, casual blankets/blankets/flannelette blankets, bed
sheets, fitted sheets, mosquito nets, pillowcases, bed skirts, bed covers, children's beddings, pillow towels, bed
curtains, sleeping bags, summer sleeping mats/bamboo mats/rattan mats/straw mats/leather mats, bedspreads,
bedding’s accessories, customized beddings, fabric cakes/cake towels, electric blankets, etc.
2) Category strategy
The beddings category of the Company involved such brands as NANJIREN, Cartelo Crocodile, NANJIREN home,
Classic Teddy, and NANJIREN+, where NANJIREN is the main brand.
The bedding category of NANJIREN brand aimed at setting up the diversified consumption scenarios to create the
image of “NANJIREN, the World for your Home”, and concentrating the resources to achieve the empowerment of
the "Home" category to create the comprehensive store portfolios. The comprehensive stores, taking NANJIREN
Youxuan Specialty Store as an example, had such features as multiple SKUs, multiple hot-selling products, and
high consumer traffic and conversion rate, etc.
3) Operational performance
① GMV ranking
In 2019, the GMV of the four sub-categories, including bedding sets, quilts, mattresses and pillows of NANJIREN
brand ranked first on Ali platform.
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② GMV performance
In 2019, the statistically available GMV for the "beddings" categories of the Company’s all brands amounted to
RMB 5.356 billion, with a year-on-year increase of 75.78%, of which:
GMV from the Ali platform amounted to RMB 3.560 billion, with a year-on-year increase of 56.35%;
GMV from the JD.com amounted to RMB 928 million, with a year-on-year increase of 60.58%;
GMV from major Social E-commerce platform amounted to RMB 792 million, with a year-on-year increase
of 383.06%;
GMV from VIP.com amounted to RMB 51,030,102.06, with a year-on-year increase of 91.76%;
GMV from other online platforms amounted to RMB 24,280,237.15, with a year-on-year increase of
1,836.07%.
4. Analysis of Men's wear Category
1) Category segmentation
The Company’s primary category of "men's wear" included such sub-categories as men's casual pants, T-shirts,
jeans, shirts, down jackets, knitted shirts/sweaters, hoodies, jackets, cotton-padded clothes, vests/waistcoats, down
pants, wind coats, suit pants, woolen overcoats, leather clothing, Polo shirts, suits, business suits, cotton-padded
trousers, leather pants, western-style suits, and folk costume.
2) Category strategy
The men's wear category of the Company involved such brands as NANJIREN, Cartelo Crocodile, and
NANJIREN+, where NANJIREN is the main brand
The men's wear category strategies of NANJIREN brand focused on the mission of "Sticking to the original
aspiration of the good products with fair prices to become the most popular brand for men's wear", and conducted
the multi-category development, created the high cost-performance goods, covered the multiple-age consumers,
developed the promising category with the much younger styles, continuously promoted the new hot-selling
products, improved the traffic efficiency, and formed the industry-leading position of NANJIREN men's wear.
3) Operational performance
① GMV ranking
In 2019, the GMV of the four sub-categories, including men's casual pants, jeans, shirts, and cotton-padded clothes
of NANJIREN brand ranked second, and the GMV of the five subcategories, including men's T-shirts, knitted
shirts/sweaters, hoodies, vests/waistcoats, down pants ranked third on Ali platform respectively. In addition, the
GMV of the two subcategories, including men's casual pants and jeans, ranked second, and the GMV of the three
subcategories, including men's jackets, hoodies, and cotton-padded clothes, ranked third respectively on JD.com.
② GMV performance:
In 2019, the statistically available GMV for the men's wear categories of the Company’s all brands amounted to
RMB 4.949 billion, with a year-on-year increase of 48.97%, of which:
GMV from the Ali platform amounted to RMB 3.061 billion, with a year-on-year increase of 44.65%;
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GMV from the JD.com amounted to RMB 789 million, with a year-on-year increase of 42.69%;
GMV from major Social E-commerce platform amounted to RMB 887 million, with a year-on-year increase
of 45.57%;
GMV from VIP.com amounted to RMB 148 million, with a year-on-year increase of 1,992.53%;
GMV from other online platforms amounted to RMB 65,191,900.64, with a year-on-year increase of 75.35%.
5. Analysis of Women's wear Category
1) Category segmentation:
The Company’s primary category of "women's swear/female accessory" (hereinafter referred to as the "women's
swear category") included such sub-categories as women’s pants, bust skirts, shoulder vests, suits, dresses, large-
sized women's wear, jeans, POLO shirts, T-shirts, middle-aged and elderly women's wear, woolen coats, fur clothing,
leather coats, woolen sweaters, short coats, waistcoats, down jackets, hoodies/woolen sweaters, business suits, shirts,
wind coats, cotton-padded clothes/cotton-padded sweaters, woolen knitted sweaters, lace shirts/chiffon shirts, etc.
2) Category strategy
The women's wear category of the Company involved such brands as NANJIREN and Cartelo Crocodile, where
NANJIREN is the main brand. Main strategies of NANJIREN women's wear categories are as follows:
①Developed multiple categories, changing the previous situation that the GMV of the core product of women's
wear - "trouser" accounted for more than 80% of the Company’s total GMV of women’s wear. During the reporting
period, the Company has developed key women's wear sub-categories, such as T-shirts, hoodies, jeans, and
downwear.
②Developed the comprehensive store as benchmark. NANJIREN Women's Wear Flagship Store has served as the
benchmark for multi-category licensed stores, and has gradually cultivated the consumption habits for the
consumers of NANJIREN women's wear.
③Focused on the emerging low-tier market, so that the prices and images of our women's wear products would
meet the market development trends.
④Established a multi-category hot-selling product portfolio, and formed a breakthrough in "trend" by combining
with the "Point – Line - Surface" comprehensive efforts.
⑤Continuously improved the appearance and quality of women's wear products and the consumer experience.
⑥Continuously recruited the Taobao brands with powerful strength as the in-depth partners of the Company to
improve the capabilities of the operation and supply chain of the women’swear category.
3) Operational performance
① GMV ranking
In 2019 on Ali platform, the annual GMV of NANJIREN women's wear ranked the ninth, where the annual GMV
of leggings sub-category ranked the first, the best ranking of down pants and bust skirts sub-category was No.1
among the monthly GMV rankings, the best ranking of women's casual pants sub-category was No.4 among the
monthly GMV rankings, and the best ranking of women's sweaters sub-category was sixth among the monthly GMV
rankings respectively.
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② GMV performance
In 2019, the statistically available GMV for the women's wear categories of the Company’s all brands amounted to
RMB 1.848 billion, with a year-on-year increase of 61.48%, of which:
GMV from the Ali platform amounted to RMB 1.409 billion, with a year-on-year increase of 43.65%;
GMV from JD.com amounted to RMB 129 million, with a year-on-year increase of 22.76%;
GMV from major Social E-commerce platform amounted to RMB 259 million, with a year-on-year increase
of 338.95%;
GMV from the newly-expanded platform - VIP.com amounted to RMB 51,754,045.48;
GMV from other newly-expanded platforms amounted to RMB 261,951.00;
6. Analysis of Children's wear and Maternal & infant Categories
1) Category segmentation
① The Company’s primary category of "children's wear/baby's wear/parent-child clothing" (hereinafter
referred to as the "children's wear category") included such sub-categories as children's pants, T-shirts,
children's underwear, children's socks, hoodies/woolen sweaters, children's loungewear, shoulder vests, backward-
dressing coats/dust-coats, children's outdoor clothing, belly bands/abdomen bibs/navel protective bands,
capes/mantles, children's swimwear, boob tube tops, suits, coats/jackets/overcoats, skirts, down garment/down
sweater, children's accessory, baby suits/jumpsuits/rompers, woolen sweaters/knitted sweaters, cotton-padded
jackets/cotton-padded clothes, school uniforms/customized school uniforms, parent-child clothing/parent-child
fashionable dresses, hats/scarfs/masks/gloves/ear-muffs/foot-muffs, children's accessories, shirts, waistcoats,
children's dresses, baby gift sets, etc.
② The Company’s primary category of "infant & children products" (hereinafter referred to as the
"maternal & infant category") included such sub-categories as cloth diapers/urine pads, pull-up diapers, intensive
care diapers, paper nappies, paper diapers, skin-care products for baby bath, baby sleeping bags/summer sleeping
mats/pillows/beddings, baby buggies/baby walkers, water cups/cutleries/grinding products/accessories, children's
cribs/baby cribs/cradles/dining chairs, wet tissues, bottles/bottle related products, collision
prevention/remaindering/safety/protection products, straps/walk learning belts/travel supplies, disinfection/milk
warming/small-household appliances, children's rooms/tables/chairs/furniture, haircuts/nail clippers/other personal
care products, teething gels/toothbrushes/toothpaste, cleaning solutions/laundry detergents/softeners, mosquito
repellent products, pacifier/pacifier related products, etc.
③ The Company’s primary category of "maternity wear/maternity products/nutrition products"
(hereinafter referred to as the "maternity & infant category") included such sub-categories as maternity wear,
loungewear/nursing wear/long underwear, maternity pants/belly pants, nursing bras/underpants/antenatal care pants,
maternal skin-care/washing & cleaning/wrinkles-removing products, pre-delivery supplies, breast pumps /
accessories, breast-feeding supplies, binding belts/corsets/pelvis belts, radiation protection products, maternal
nutrition products, postpartum nutrition products, maternity caps/socks/shoes, mummy packages/bags, maternity
make-up products, maternity repair devices, maternity exercise/yoga/fitness products, etc.
2) Category strategy
The children's wear and maternity & infant category of the Company involved such brands as NANJIREN, Cartelo
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Crocodile, and Classic Teddy, where NANJIREN is the main brand.
The strategies of children's wear and maternal & infant category of NANJIREN brand included: To further improve
the consumer experience through product innovation, packaging upgrading, quality upgrading and product's visual
image optimization; and to achieve more accurate insights and meet the differentiated demands of different
consumers, and achieve the efficient matching of "people, goods, market, and time", continue to promote the product
iteration and upgrading, gather the excellent supply chain resources, create the one-stop NANJIREN multi-
categories shopping experience for different ages, and care for the healthy growth of every child through data
analysis.
3) Operational performance
① GMV ranking:
In 2019, the GMV of the three sub-categories of NANJIREN brand, including children's underwear, children's socks,
and maternity loungewear/nursing wear/thermal underwear ranked first, and the GMV of the five sub-categories,
including children's pants, children's loungewear, baby sleeping bags/summer sleeping mats/pillows/beddings,
nursing bras/underpants/antenatal care pants, and maternity pants/belly pants ranked second, and the GMV of the
sub-category of children's shoulder vests ranked third, and the GMV of the sub-category of children's
hoodies/woolen sweaters ranked fourth, and the GMV of the sub-category of children's T-shirts ranked fifth, on Ali
platform respectively; in addition, the GMV of the three sub-categories of NANJIREN brand, including children's
underwear, children's hoodies/woolen sweaters, and baby sleeping bags/summer sleeping mats/pillows/beddings
ranked first, and the GMV of the three sub-categories, including children's socks, children's loungewear and down
garment/down sweater ranked second, and the GMV of the sub-category of children's pants ranked third, on JD.com
respectively.
② GMV performance:
In 2019, the statistically available GMV for the children's wear and maternity & infant categories of the Company’s
all brands amounted to RMB 3.170 billion, with a year-on-year increase of 31.36%, of which:
GMV from the Ali platform amounted to RMB 2.193 billion, with a year-on-year increase of 21.08%;
GMV from the JD.com amounted to RMB 415 million, with a year-on-year increase of 16.00%;
GMV from major Social E-commerce platform amounted to RMB 278 million, with a year-on-year increase
of 189.76%;
GMV from the VIP.com amounted to RMB 265 million, with a year-on-year increase of 133.94%;
7. Analysis of Healthy Living Category
1) Category segmentation
①Healthy Living & Fashion Technology Business Group I (“HLFTBG I”): responsible for the management
and operation of fourteen primary categories, including large home appliances, automobile
accessories/electronic/cleaning/refitted products, family/personal cleaning tools, 3C digital accessories, stationery
& electrified education products/stationery commodities/business supplies, kitchen/cooking utensils, tableware,
kitchen appliances, storage & clear-up tools, medical equipment, office equipment/consumable materials/related
service products, automobile parts/maintenance/beauty/repair & maintenance products, Internet medical/healthcare
products, audio & video appliances, of which, the core categories were large home appliances and kitchen appliances,
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and there were 26 level-2 categories in the large home appliance category, and 46 level-2 categories in the kitchen
appliance category on Tmall.com.
②HLFTBG II: responsible for the management and operation of four primary categories, including "personal
care/health care/massage devices", "pet/pet food and supplies", "beauty and body care device", and "washing &
cleaning detergent/sanitary napkins/toilet paper/aromatherapy products", of which, the core category was "personal
care/health care/massage device", and there were 23 level-2 categories on Tmall.com.
③HLFTBG III: responsible for the management and operation of two primary categories, including domestic
electrical appliances and household daily products, of which, there were 52 level-2 categories in domestic electrical
appliance category and 24 level-2 categories in household daily product category on Tmall.
The above categories are collectively referred to as the "Healthy Living Category".
2) Category strategy:
The healthy living category of the Company mainly involved NANJIREN brand, and the strategies of NANJIREN
healthy living category mainly included:
① Category strategies of the domestic electrical appliance and household daily product
Expand the new products to achieve the multi-category coverage
Expand the sales channels to achieve the multi-channel coverage
Take advantage of the data to drive the accuracy of product development and improve the operation efficiency
Create a number of comprehensive stores
② Category strategies of the personal care/health care/massage device
The product hierarchy, which had been developed by the Company through centering on the personal care scenario,
included five sub-categories, i.e., personal care appliances, health care device, massage device, beauty &body care
device, and oral care products, which combined with the analysis and application of market data to provide more
diversified and personalized goods for different consumer demands. In addition, the Company would grasp the
consumption trends at a deeper level, clarify the positioning, fully penetrate the blue ocean market with the concept
of "New National Trends, New Domestic Goods" through centering on the "Data Empowerment, Marketing
Intelligence Change", and build a nation-wide healthy living brand.
3) Operational performance
① GMV ranking
Domestic electrical appliances: in 2019, the GMV of the two sub-categories of NANJIREN brand, including electric
blankets and shoe dryers ranked first, and the GMV of the sub-category of lint removers ranked second on Ali
platform respectively;
Household daily products: in 2019, the GMV of the two subcategories of NANJIREN brand, including hot-water
bags and electric blankets ranked first, the GMV of the subcategory of warm pastes/pocket warmers/warm products
ranked second, and the GMV of the two sub-categories, including protective tools and shoe tools ranked third on
Ali platform respectively;
In 2019, the GMV of the personal care/health care/massage device category of NANJIREN brand ranked sixth on
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Ali platform;
② GMV performance
In 2019, the statistically available GMV for the personal care/health care/massage device of the Company’s all
brands amounted to RMB 1.334 billion, with a year-on-year increase of 27.87%, of which:
GMV from the Ali platform amounted to RMB 600 million, with a year-on-year increase of 24.96%;
GMV from JD.com amounted to RMB 469 million, with almost no year-on-year change.
GMV from major Social E-commerce platforms amounted to RMB 257 million, with a year-on-year increase
of 190.74%;
GMV from VIP.com amounted to RMB 5,065,388.71, with a year-on-year increase of 1,130.34%
GMV from other platforms amounted to RMB 3,363,067.49;
In 2019, the statistically available GMV for the domestic electrical appliance of the Company’s all brands amounted
to RMB 538 million, with a year-on-year increase of 56.36%, of which:
GMV from the Ali platform amounted to RMB 350 million, with a year-on-year increase of 28.88%;
GMV from JD.com amounted to RMB 112 million, with a year-on-year increase of 67.59%;
GMV from major Social E-commerce platform amounted to RMB 74,438,685.10, with a year-on-year increase
of 1,172.63%;
GMV from VIP.com amounted to RMB 1,553,185.62;
GMV from other platforms amounted to RMB 243,356.85;
In 2019, the statistically available GMV for the household daily product of the Company’s all brands amounted to
RMB 620 million, with a year-on-year increase of 11.16%, of which:
GMV from the Ali platform amounted to RMB 468 million, with a year-on-year increase of 4.89%;
GMV from JD.com amounted to RMB 89,669,635.96, with a year-on-year increase of 3.37%;
GMV from major Social E-commerce platform amounted to RMB 41,898,141.98, with a year-on-year increase
of 500.82%;
GMV from VIP.com amounted to RMB 17,061,878.15, with a year-on-year increase of 12,122.10%.
(V) Mobile Internet marketing business
1. Information flow suppliers: during the reporting period, the Company's wholly-owned subsidiary - Timelink
has continued to consolidate the cooperation advantages of the existing mainstream suppliers, and has become the
SMB exclusive agent of Xiaomi information flow at the same time; in addition, it has become the core agent of
Tecent App Store with the highest traffic consumption; and by virtue of the continuous high-quality customer service
and industry reputation, it has become the core agent of VIVO in E-commerce and financial industries with the
highest traffic consumption; furthermore, while consolidating the existing information flow resources, Timelink has
become the core agent of -Toutiao’s Tik Tok media, and has started to expand the business of short video information
streaming media.
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2. Advertising clients: To strictly screen the client qualification, improve capital usage efficiency and reduce
operational risk while ensuring capital security; at the same time, 657 new clients were developed during the
reporting period. In addition, while maintaining the existing APP clients of E-commerce, Internet service, finance,
educational tools and other industries, H5 type clients were developed to enrich the client portfolios and obtain new
performance growth resources.
II. Main Business Analysis
1. Overview
Please refer to "I. Overview" of "Section 04 Management Discussion & Analysis" for the relevant contents.
2. Revenues and Costs
(1) Composition of operating revenue
Unit: RMB
Year 2019 Year 2018
Percentage of Percentage of Change YOY
Amount Amount
operating revenue operating revenue
Total operating
3,906,848,236.41 100% 3,352,859,972.47 100% 16.52%
revenue
By industries
Modern service 1,395,896,981.58 35.73% 1,035,152,447.16 30.87% 34.85%
Mobile Internet
2,508,135,146.01 64.20% 2,316,017,013.90 69.08% 8.30%
service
Sales of goods 2,816,108.82 0.07% 1,690,511.41 0.05% 66.58%
By products
Brand comprehensive
1,240,912,123.46 31.76% 899,930,249.10 26.84% 37.89%
service
Distributor brand
65,447,600.05 1.68% 33,855,541.77 1.01% 93.31%
licensing service
Mobile Internet media
2,431,170,375.39 62.23% 2,200,794,790.65 65.64% 10.47%
delivery service
Mobile Internet traffic
76,964,770.62 1.97% 115,222,223.25 3.44% -33.20%
integration service
Web celebrity traffic
46,601,214.37 1.19% 47,231,969.73 1.41% -1.34%
monetization service
Factoring service 35,912,907.06 0.92% 44,730,658.99 1.33% -19.71%
Sales of goods 2,816,108.82 0.07% 1,690,511.41 0.05% 66.58%
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Park platform service 0.00 0.00% 3,045,398.33 0.09% -100.00%
Other services 7,023,136.64 0.18% 6,358,629.24 0.19% 10.45%
By regions
China 3,906,848,236.41 100.00% 3,352,859,972.47 100.00% 16.52%
(2) Industry, product or region accounting for more than 10% of the operating revenue or operating profit
of the Company
√ Applicable (A) □ Not applicable (N/A)
Unit: RMB
YoY change in YoY change in YoY change in
Gross profit
Operating revenue Operating cost the operating the operating the gross profit
margin
income costs margin
By industries
Modern service 1,395,896,981.58 102,043,903.85 92.69% 34.85% 48.89% -0.69%
Mobile Internet
2,508,135,146.01 2,299,176,177.70 8.33% 8.30% 8.34% -0.04%
service
By products
Brand comprehensive
1,240,912,123.46 82,396,270.02 93.36% 37.89% 55.33% -0.75%
service
Mobile Internet media
2,431,170,375.39 2,248,875,980.36 7.50% 10.47% 9.75% 0.61%
delivery service
By regions
China 3,906,848,236.41 2,402,698,452.04 38.50% 16.52% 9.36% 4.03%
The data of the Company's main business in the most recent year was adjusted according to the statistic scale at the end of reporting
period in case of any adjustment on the statistic scale of the data of Company's main business within the reporting period
□ Applicable (A) √ Not applicable (N/A)
(3) Are the Company’s sales of goods greater than sales of service?
□ Yes √ No
(4) Fulfillment of significant sales contracts signed by the Company as of the reporting period
□ Applicable (A) √ Not applicable (N/A)
(5) Composition of operating cost
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By Product
Unit: RMB
Year 2019 Year 2018
Change
By Product Item % of operating
Amount Amount %of operating cost YOY
cost
Brand comprehensive
Purchasing cost 78,890,844.18 3.28% 42,544,897.05 1.94% 1.34%
service
Brand comprehensive
Wage cost 3,502,083.24 0.15% 7,434,868.01 0.34% -0.19%
service
Advertising and
Brand comprehensive
publicity 0.00 0.00% 3,061,885.88 0.14% -0.14%
service
expense
Brand comprehensive Depreciation of
3,342.60 0.00% 4,137.97 0.00% 0.00%
service fixed assets
Distributor brand
Wage cost 3,368,603.48 0.14% 1,176,646.52 0.05% 0.09%
licensing service
Web celebrity traffic Image licensing
12,313,041.34 0.51% 12,320,788.51 0.56% -0.05%
monetization service fee
Web celebrity traffic
Service cost 854,565.81 0.04% 110,179.42 0.01% 0.03%
monetization service
Factoring service Interest expense 252,904.93 0.01% 501,094.33 0.02% -0.01%
Mobile Internet media Media delivery
2,248,875,980.36 93.60% 2,049,096,952.29 93.26% 0.34%
delivery service cost
Mobile Internet traffic Traffic
50,300,197.34 2.09% 73,140,122.52 3.33% -1.24%
integration service integration cost
Park platform service Service cost 0.00 0.00% 356,336.53 0.02% -0.02%
Sales of goods Purchasing cost 1,478,370.49 0.06% 6,367,857.11 0.29% -0.23%
Other services Service cost 2,858,518.27 0.12% 1,026,121.72 0.05% 0.07%
Note
(6) Did the scope of consolidation change during the reporting period?
√ Yes □ No
1. Business combination not under common control: none
2. Business combination under common control: none
3. Disposal of subsidiaries: none
4. Change of consolidated scope caused by other reasons
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(1) Establishment of subsidiaries
① Cartelo Crocodile Kale (Shanghai) Trading Co., Ltd. was a newly established holding subsidiary, invested by
the Company's subsidiary Nanji E-commerce (Shanghai) Co., Ltd. in January 2019, with the registered capital of
RMB 30 million, and the equity held by the Company accounted for 86.67%. The registered capital of RMB 26
million was paid as of December 31, 2019.
② Shanghai Aosang Cultural Communication Co., Ltd. was a newly established holding subsidiary, invested by
the Company's subsidiary Nanji E-commerce (Shanghai) Co., Ltd. in January 2019, with the registered capital of
RMB 10 million, and the equity held by the Company accounted for 96%. As of December 31, 2019, no capital was
contributed.
③ Xinjiang Jingshang E-commerce Co., Ltd. was a newly established holding subsidiary, invested by the
Company in November 2019, with the registered capital of RMB 10 million, and the equity held by the Company
accounted for 100%. As of December 31, 2019, the registered capital of RMB 100,000 was paid.
④ Xinjiang Yuduocheng E-commerce Co., Ltd. was a newly established holding subsidiary, invested by the
Company in November 2019, with the registered capital of RMB 10 million, and the equity held by the Company
accounted for 100%. As of December 31, 2019, the registered capital of RMB 100,000 was paid.
(2) Liquidation of subsidiaries
① Shanghai Shuimishang Culture communication Co., Ltd. has completed the liquidation and cancellation in July
2019 and has finished the industrial and commercial change procedures.
② Shanghai Aosang Cultural Communication Co., Ltd. has completed the liquidation and cancellation in
September 2019 and has finished the industrial and commercial change procedures.
(7) Significant change or adjustment of business, product or service of the Company during the reporting
period
□ Applicable (A) √ Not applicable (N/A)
(8) Major clients and major suppliers
Major clients of the Company
Sales amount from the top five clients of the Company in
1,187,357,783.55
total (RMB)
Proportion of the sales amount from the top five clients of
30.39%
the Company in total to the annual total sales amount
Proportion of the sales amount from related parties of the
sales amount from the top five clients of the Company to 0.00%
the annual total sales amount
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Information on the top five clients of the Company
S/N Client name Sales amount (RMB) % of the annual total sales amount
Shenzhen Qianhai Xinzhijiang Information
1 492,260,132.50 12.60%
Technology Co., Ltd.
2 Beijing Mai *** Co., Ltd. 270,401,252.54 6.92%
Fuzhou 360 Network Petty Loan Co., Ltd.
3 168,452,185.57 4.31%
(Note 1)
4 Beijing Zi ***Co., Ltd. (Note 2) 163,616,946.84 4.19%
5 Taobao (China) Software Co., Ltd. (Note 3) 92,627,266.10 2.37%
Total -- 1,187,357,783.55 30.39%
Other information of major clients
√ Applicable (A) □ Not applicable (N/A)
Note 1: The operating revenue from Fuzhou 360 Network Petty Loan Co., Ltd. in the current period was calculated according to the
consolidated scope, including the sales amounts from its related companies - Shanghai Qiyu Information Technology Co. Ltd., 360
Technology Group Co., Ltd., Guangrui Hengyu (Beijing) Technology Co., Ltd., Beijing Qicai Tianxia Technology Co., Ltd. and Ningbo
Qihuan Information Technology Co., Ltd.
Note 2: The total operating revenue from Beijing Zi***Co., Ltd. in the current period was calculated according to the consolidated
scope, including the sales amounts from its related companies - Beijing Zi***Technology Co., Ltd., Beijing Zhen***Co., Ltd., Beijing
Yue*** Co., Ltd., Jin *** Co., Ltd., and Beijing Micro*** Co., Ltd.
Note 3: The total operating revenue from Taobao (China) Software Co., Ltd. in the current period was calculated according to the
consolidated scope, including the sales amounts from its related company - Alibaba (China) Network Technology Co., Ltd. and
Zhejiang Tmall Technology Co., Ltd.
Main suppliers of the Company
Procurement amount of the top five suppliers of the
2,164,826,798.05
Company in total (RMB)
Proportion of the procurement amount of top five suppliers
of the Company in total to the annual total procurement 90.10%
amount
Proportion of the procurement amount of related parties of
the procurement amount of the top five suppliers of the
0.00%
Company in total accounting to the annual total
procurement amount
Information on the top five suppliers of the Company
Amount of procurement
S/N Supplier name % of the annual total procurement amount
(RMB)
Guangzhou Xiaomi Information Service
1 837,607,461.12 34.86%
Co., Ltd.
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Vivo Mobile Communications Co., Ltd.
2 681,980,492.68 28.38%
(Vivo Communications Technology)
Shenzhen Tencent Computer System Co.,
3 537,926,678.09 22.39%
Ltd.
4 Huawei Software Technology Co., Ltd. 72,326,033.79 3.01%
5 Hubei Jinri Toutiao Technology Co., Ltd. 34,986,132.37 1.46%
Total -- 2,164,826,798.05 90.10%
Other information of major suppliers
□ Applicable (A) √ Not applicable (N/A)
3. Expenses
Unit: RMB
Year 2019 Year 2018 Change YOY Explanations for significant change
Selling and distribution No significant change occurred in
118,640,571.55 111,353,414.51 6.54%
expenses current year.
The administrative expenses in current
period increased by 41.62% compared
with the previous period, mainly due to
General and the Company's business scale
80,441,335.12 56,800,814.91 41.62%
administrative expenses expansion, personnel increase, and the
corresponding increase in salaries,
office building rentals, property fees
and utilities charges.
There was a decrease in the financial
expenses in the current period compared
to the previous period, mainly due to the
following reasons: on the one hand, the
subsidiary Timelink's loans have
decreased during the current period, and
Financial expenses -463,079.95 5,207,249.27 -108.89% the outstanding loans at the end of the
period were all new loans by Timelink
in the second half of the year; On the
other hand, as a result of the Company's
operating accumulation, the cash and
cash equivalents have increased, hence,
the interest incomes have increased.
Research and No significant change occurred in
43,304,603.95 37,800,843.09 14.56%
development expenses current year.
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4. Research and development (“R&D”) investment
√ Applicable (A) □ Not applicable (N/A)
An important operation model of the Company is the "Brand Operation Model", the Company has managed multiple
brands, inducing NANJIREN, NANJIREN+, NANJIREN Home, Cartelo Crocodile, Classic Teddy, etc. And the
related operating activities involved brand promotion, design, production, distribution, warehousing & logistics, etc.
There were a large number of partners, such as licensed factories, E-commerce platforms, distributors, etc. In the
course of the long-term operation, the Company has been reducing costs and improving the profitability of the
Company and partners through continuously improving the information-based system, optimizing and integrating
the supply chains.
Timelink, acquired through major asset restructuring in 2017, has mainly operated the mobile Internet media
delivery services and mobile Internet traffic integration services. Such businesses have continued to optimize
delivery effects and better serve the clients through the information-based system, such as traffic management and
data analysis.
Since the E-commerce industry and the consumer goods industry had higher and more diverse requirements on the
supply chains and products, hence, there would be still much space for improvement in terms of the mutual matching,
response speed, cost control, product quality tracking & design, as well as in terms of the accuracy of the information
and computational accuracy for all supply chain aspects. The Company has kept pace with the times, developed and
optimized information system, and integrated the information of relevant partners quickly and completely, explored
and utilized the information value, improved the control and management efficiency, explored the core value of
supply chain integration, and enhanced comprehensive competitive strength for the brand's supply chain system
fundamentally.
R&D investment of the Company
Year 2019 Year 2018 % of change
Number of R&D personnel
116 147 -21.09%
(person)
Proportion of the number of R&D
personnel in total number of 17.96% 25.17% -7.21%
personnel
Amount invested in R&D (RMB) 43,304,603.95 37,800,843.09 14.56%
Proportion of R&D investment in
1.11% 1.13% -0.02%
operating revenue
Amount of R&D investment
0.00 0.00
capitalization (RMB)
Proportion of capitalization in the
0.00% 0.00%
R&D investment
Reasons for the significant change in the proportion of total R&D investment in operating revenue compared with the previous year
□ Applicable (A) √ Not applicable (N/A)
Reasons and its reasonable explanations for the substantial change of the capitalization rate of R&D investment
□ Applicable (A) √ Not applicable (N/A)
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5. Cash flow
Unit: RMB
Item Year 2019 Year 2018 Change YOY
Subtotal of cash inflow from
3,882,659,498.99 3,663,697,173.41 5.98%
operating activities
Subtotal of cash outflow from
2,627,747,672.37 3,112,310,240.75 -15.57%
operating activities
Net cash flow from operating
1,254,911,826.62 551,386,932.66 127.59%
activities
Subtotal of cash inflow from
5,185,506,764.61 5,074,915,196.31 2.18%
investment activities
Subtotal of cash outflow from
6,781,234,142.02 5,539,015,113.31 22.43%
investment activities
Net cash flow from investment
-1,595,727,377.41 -464,099,917.00 243.83%
activities
Subtotal of cash inflow from
150,000,000.00 90,360,000.00 66.00%
financing activities
Subtotal of cash outflow from
211,415,913.02 448,822,830.50 -52.90%
financing activities
Net cash flow from financing
-61,415,913.02 -358,462,830.50 -82.87%
activities
Net increase / (decrease) in cash
-402,122,128.86 -271,448,414.96 48.14%
and cash equivalents
Explanation of the main influence factors for the significant changes of relevant data on a year-on-year basis
√ Applicable (A) □ Not applicable (N/A)
1) The net cash inflow from operating activities has increased significantly compared with the previous period,
because the Company's operating performance in the current year has increased significantly, with good payment
collection, compared with the previous year.
2) The net cash outflow from investment activities has increased significantly compared with the previous year,
because that the Company has increased the purchase of financial products.
3) The net cash outflow from financing activities has decreased significantly compared with the previous year,
because that the Company had more cash dividends and repurchased shares in the previous year. In addition, the
Company only repurchased shares and did not pay the cash dividends during the current year.
Explanation of the reasons for the material difference between the net cash flow from operating activities of the
Company and the net profits of the current year during the reporting period
□ Applicable (A) √ Not applicable (N/A)
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III. Non-Main Business Analysis
□ Applicable (A) √ Not applicable (N/A)
IV. Analysis of Assets and Liabilities
1. Significant change in asset composition
Implementation of new financial instrument standards, new revenue standards or new lease standards, and
adjustment and implementation of the relevant items in the financial statements at the beginning of the year by the
Company since 2019
√ Applicable (A) □ Not applicable (N/A)
Unit: RMB
At the end of 2019 At the beginning of 2019
Proportion Proportion Change in
Explanations for significant change
Amount of total Amount of total proportion
assets assets
The cash and cash equivalents were
mainly current deposits. And the
decrease in proportion in the total
assets were because that the growth
Cash and cash
1,280,832,033.28 23.35% 1,189,754,162.14 26.15% -2.80% rate of cash and cash equivalents was
equivalents
lower than that of the total assets. In
addition, the incremental funds of the
Company were mainly used to
purchase financial products.
The decrease in proportion of the
accounts receivable of the Company
in the total assets was because that the
Accounts Company has strengthened its
789,704,130.20 14.40% 724,583,591.63 15.93% -1.53%
Receivable collection of accounts receivable, and
the increase rate in the accounts
receivable was lower than that of the
revenue.
No significant change occurred in
Inventories 5,471,862.14 0.10% 3,361,669.70 0.07% 0.03%
current year.
The Company has signed the Transfer
Agreement for XiEnEn's equity
Long-term equity investment in 2019, which has not
0.00 0.00% 14,230,858.19 0.31% -0.31%
investments met the recognition criteria for the
long-term equity investments and was
transferred to the account of “asset
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classified as held for sale”.
The Company's actual business
Fixed assets 6,718,909.97 0.12% 3,021,813.45 0.07% 0.05% address changed in 2019, and the
procurement of the office equipment
increased.
The short-term borrowings were all
guaranteed loans for the business of
Short-term
100,105,694.45 1.83% 70,360,000.00 1.55% 0.28% Timelink, mainly due to the
borrowings
expansion of the business and the
increase in financing demands.
Mainly due to the reason that some
Notes receivable 73,506,158.00 1.34% 40,318,407.59 0.89% 0.45% clients have increased the amount
settled by bank acceptance bills.
Due to the reason that the Company
Held-for-trading
1,490,000,000.00 27.17% 450,140,057.98 9.89% 17.28% has increased the procurement of
financial assets
financial products.
Due to the reason that the subsidiary
Advances to Timelink's prepaid information flow
229,302,915.74 4.18% 552,797,861.17 12.15% -7.97%
suppliers payments decreased at the end of the
current year.
Due to the reason that the purchase
Other receivables 88,075,286.90 1.61% 59,849,623.62 1.32% 0.29% margins paid to the supplier by the
subsidiary Timelink increased.
The Company has signed the Transfer
Agreement for XiEnEn's equity
investment in 2019, which has not
Assets classified
15,441,091.08 0.28% 0.00% 0.28% met the recognition criteria for the
as held for sale
long-term equity investment and was
transferred to the account of “asset
classified as held for sale”.
2. Assets and liabilities measured at fair value
√ Applicable (A) □ Not applicable (N/A)
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Gains/(loss
Provisio
es) arising Accumulate
n for Othe
from d Fair Value Amount of
Item (Unit: Impairm Amount of Sales r
Opening balance changes in Changes Purchase in Closing balance
RMB) ent in in Current Period chan
fair value recognized Current Period
Current ges
in current in Equity
Period
period
Financial
assets
1. Held-for-
trading
financial
assets
450,140,057.98 6,182,000,000.00 5,142,140,057.98 1,490,000,000.00
(excluding the
derivative
financial
assets)
4.Other equity
instrument 100,000.00 100,000.00
investment
Total of items
above- 450,240,057.98 6,182,000,000.00 5,142,140,057.98 1,490,100,000.00
mentioned
Financial
0.00 0.00
liabilities
Content of other changes
Did significant changes occur for the Company’s major asset measurement attributes during the reporting period?
□ Yes √ No
3. Asset with restricted rights as of the end of the reporting period
By the end of the reporting period, the amount of the frozen cash and cash equivalents of the Company was RMB
3.2 million, which was caused by a litigation. Because of the infringement caused by a client of the Company, the
Company became a joint defendant involved in the contentious matter, and as of April 15, 2020, the plaintiff and
the defendant signed a Settlement Agreement, hence, the Company should not have to bear the liability for
compensation.
V. Analysis of Investments
1. General situation
□ Applicable (A) √ Not applicable (N/A)
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2. Significant Equity Investment Obtained During the Reporting Period
□ Applicable (A) √ Not applicable (N/A)
3. Significant Non-equity Investment Ongoing During the Reporting Period
□ Applicable (A) √ Not applicable (N/A)
4. Financial Assets Measured at Fair Value
√ Applicable (A) □ Not applicable (N/A)
Unit: RMB
Gains/(losse
s) arising Accumulated Amount of
Amount of
from fair value purchase Accumulated
Initial sales during Closing Source of
Asset type changes in changes during the investment
investment cost the reporting balance funds
fair value in recognized in reporting income
period
current equity period
period
Self-
Trust
50,000,000.00 50,000,000.00 1,684,110.29 owned
product
fund
Self-
6,132,000,000 5,092,140,057 1,490,000,000
Others 450,140,057.98 32,309,204.51 owned
.00 .98 .00
fund
Self-
Others 100,000.00 100,000.00 owned
fund
6,182,000,000 5,142,140,057 1,490,100,000
Total 450,240,057.98 0.00 0.00 33,993,314.80 --
.00 .98 .00
5. Use of Proceeds
√ Applicable (A) □ Not applicable (N/A)
(1) Overall Use of Proceeds
√ Applicable (A) □ Not applicable (N/A)
(Unit: RMB 10,000)
Total of Total Total Total Proportion Total Use and Proceeds
Year of Method of Total
Proceeds Accumulat Proceeds Accumulat of Total Unused allocation Idled for
Funding Funding Proceeds
Used in ed with ed Accumulat Proceeds of unused over Two
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Current Proceeds Change of Proceeds ed Proceeds Years
Year used Use during with Proceeds
the Change of with
reporting Use Change of
period Use
Directed
Year 2015 27,113.02 0.24 28,205.08 0.24 20,201.19 74.51% 0
placement
Directed
Year 2017 39,149.3 6,928.51 39,194.49 45.31 45.31 0.12% 0
placement
Total -- 66,262.32 6,928.75 67,399.57 45.55 20,246.5 30.56% 0 -- 0
Description for overall use of proceeds
1. In 2019, Nanji E-commerce (Shanghai) used a total of RMB 2,402.10 of the raised funds. Considering that the projects to be
invested by raised funds of the Company were completed, the Company transferred the surplus raised funds for the irrevocable
supplement to working capital, and completed the related procedures for closing the above-mentioned special account for raised
funds. The accumulated current interest income of the special account of the raised funds for the current year was RMB 5.15, and the
net amount was RMB -1,314.85 after deducting the service fee expense of RMB 1,320.00. As of December 31, 2019, the amount of
accumulated used raised funds was RMB 282,050,850.14, all of the raised funds were used up, and the accounts of the raised funds
were completely closed.
2. In 2019, the Company used a total of RMB 69,285,068.09 of the raised funds, including RMB 68,832,000.00 for the cash
consideration of the acquisition payment of Timelink, RMB 99,255.35 for the accumulated current interest income of the special
account of the raised funds for the current year, RMB 594.81 for deducting the service fee expense, RMB 453,068.09 for the balance
of the raised funds. In addition, considering that the projects to be invested by raised funds of the Company were completed, the
Company transferred the surplus raised funds of RMB 453,068.09 for the irrevocable supplement to working capital, and completed
the related procedures for closing the above-mentioned special account for raised funds. As of December 31, 2019, the amount of
accumulated used raised funds was RMB 391,944,859.13.
(2) Statement of Committed Investment Projects of Proceeds
√ Applicable (A) □ Not applicable (N/A)
(Unit: RMB 10,000)
Accumul Investme Date
Committe Total Whether
Amount ated nt When Benefits
d Total Investme feasibility
Project Invested Investme Progress Project Achieved Achieve
Committed Investment Investme nt of project
Changed During nt As of Reaches During ment of
Projects and Uses of nt Amount has
(Partially the Amount 31/12/20 Schedule the Expected
Excess Proceeds Amount after changed
Changed) Reporting as of 19 (%) d Reporting Benefits
from Adjustme significan
Period 31/12/20 (3)=(2)/(1 Availabili Period
Proceeds nt (1) tly
19 (2) ) ty Status
Committed investment projects
E-commerce ecological
service platform Yes 8,000 4,000 N/A Yes
establishment project
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Flexible supply chain
service platform Yes 14,000 5,000 28.58 0.57% N/A Yes
establishment project
Brand building project Yes 8,000 18,255.87 4,157.05 22.77% N/A Yes
Cash payment for
No 39,330.3 39,330.3 6,883.2 39,149.18 99.54% 11,032.12 N/A No
acquisition of Timelink
Irrevocable supplement
Yes 45.55 45.55 N/A No
to working capital
Subtotal of committed
-- 69,330.3 66,586.17 6,928.75 43,380.36 -- -- 11,032.12 -- --
investment projects
Investment of excess proceeds
NONE
Total -- 69,330.3 66,586.17 6,928.75 43,380.36 -- -- 11,032.12 -- --
Status of and reason for
planned progress or
estimated income not N/A
achieved (of a specific
project)
1. Project of "E-commerce ecological service platform establishment"
With the gradual development of the Company’s brand licensing business, and the gradual normalization of
the E-commerce services, the business connotation, data technology system of the E-commerce ecological
service platform would be closely related to the daily business operations of the Company. The update and
improvement of the relevant data system for the E-commerce ecological service platform has accelerated, it
would be necessary to make adjustments accordingly with the business changes. Hence, the relevant
investment should not be too large. In addition, the relative investment amount for data intelligence platform,
photo shooting, store decoration, and operation & maintenance improvement has become smaller, and own
funds can used for subsequent E-commerce platform system construction. The termination of this committed
project would not affect the implementation of the normal E-commerce ecological services of the Company.
Description of major Furthermore, it could improve the fund utilization efficiency through increasing the investment of own funds,
changes in project according to the business development of the Company. The Company has planned to terminate this
feasibility committed project and transfer the remaining balance of the raised funds for the project to the "brand
building" project funds, in order to take advantage of the raised funds more fully and effectively, and protect
the interests of the Company and all shareholders, according to the business development of the Company.
2. Project of "flexible supply chain service platform establishment"
As the Company has formulated the business strategies with the "Brand Portfolio Development" as the core,
according to the actual business development, continued to consolidate and expand the brand portfolio and
expanded the peripheral business of the brand portfolio, hence, the business of flexible supply chain parks
has declined. In addition, the Company has performed the equity transfer or cancellation for partial
subsidiaries of the flexible supply chain system through the comprehensive evaluation, according to the
actual situations. The Company has planned to terminate the committed project and transfer the remaining
balance of the raised funds of the project to the "brand building" project funds, in order to improve the
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
utilization efficiency of the raised funds more fully and effectively, and protect the interests of the listed
company and all shareholders, according to the business development of the listed company.
3. Project of "brand building"
The Company has planned to transfer the balance of the unused raised funds of the "E-commerce ecological
service platform establishment" and "flexible supply chain service platform establishment" projects to the
"brand building" project. The Company has planned to introduce other brands through acquisition,
cooperation, and new establishment, etc., to better build the brand matrix of the listed company, improve the
overall brand influence of the listed company, and meet the diversified and multi-level consumer demands,
as well as promote the brands of the listed company to improve the brand image and brand awareness and
reputation at the same time.
Amount, use and N/A
progress of use of
excess proceeds
Changes in location of N/A
investment projects
using proceeds
Changes in N/A
implementation model
of investment projects
using proceeds
A
Before the proceeds were fully available, as of October 10, 2017, the actual investment amount of the
Pre-investment and Company by investing its self-owned funds of RMB 63,348,320.74 in the committed investment projects in
replacement of advance. After the proceeds were fully available, the 35th Meeting of the 5th Board of Directors and the 31st
investment projects Meeting of the 5th Board of Supervisors of the Company were held on December 1, 2017, in which the
using proceeds Proposal on Replacing the Invested Self-owned Funds with Raised Funds was reviewed and approved to
agree that the Company could replace the self-owned funds already invested in the committed investment
projects with the proceeds of RMB 59,091,791.04.
Supplementing N/A
working capital
temporarily with idled
proceeds
A
Amount of and reason As the committed investment projects of the Company were completed, the Company transferred all the
for balance in proceeds surplus proceeds of RMB 2,402.10 for the irrevocable supplement to working capital on June 26, 2019. As
during project of December 31, 2019, the accumulated investment amount was RMB 282,050,850.14, all of the proceeds
implementation have been used up, and the accounts of proceeds have been completely closed. In addition, the relevant
information has been stated in the Annual Report.
Usage and allocation of As of December 31, 2019, all of the proceeds have been used up, and the accounts of proceeds have been
the unused proceeds completely closed.
Defects and other issues N/A
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that occurred in the use
and disclosure of
proceeds
(3) Statement of Altered Investment Projects of Proceeds
√ Applicable (A) □ Not applicable (N/A)
(Unit: RMB 10,000)
Total
Actual
Amount to Actual Date When
accumulate Investment Benefits
Invest in Amount Project Achieveme Significant
Project Original d progress by Achieved
Projects Invested Reaches nt of Changes to
After Committed investment the end of During the
Using During the Scheduled Expected Project
Change Project by the end the period Reporting
Proceeds Reporting Availability Benefits Feasibility
of the (3)=(2)/(1) Period
After Period Status
period (2)
Change (1)
E-commerce
ecological
service
platform
establishment
project,
Brand flexible
July 01,
building supply chain 23,453.55 0 24,019.21 102.41% N/A No
2018
project service
platform
establishment
project, and
brand
building
project
Total -- 23,453.55 0 24,019.21 -- -- 0 -- --
I. Reason for change: as of April 30, 2017, the fund utilization rates of the two projects "E-
commerce ecological service platform establishment" and "flexible supply chain service
platform establishment" were relatively low, and these two projects have not promoted the
business development of the Company by using the proceeds. The progress of the brand
Reasons for change, decision-making building project was basically in line with the expectations. And the main expenditure was
procedures and information disclosure for the "Classic Teddy" series of Chinese text and graphic trademarks category 1-35, acquired
(by project) by the Company in November 2016. The Company has established the Classic Teddy
Division, and has begun to expand its business in the fields of home textiles, children's wear,
and maternal & infant products, etc.
1. Project of "E-commerce ecological service platform establishment"
With the gradual development of the Company’s brand licensing business, and the gradual
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
normalization of the E-commerce services, the business connotation, data technology system
of the E-commerce ecological service platform would be closely related to the daily business
operations of the Company. The update and improvement of the relevant data system for the
E-commerce ecological service platform has accelerated, it would be necessary to make
adjustments accordingly with the business changes. Hence, the relevant investment should
not be too large. In addition, the relative investment amount for data intelligence platform,
photo shooting, store decoration, and operation & maintenance improvement has become
smaller, and own funds can used for subsequent E-commerce platform system construction.
The termination of this committed project would not affect the implementation of the normal
E-commerce ecological services of the Company. Furthermore, it could improve the fund
utilization efficiency through increasing the investment of own funds, according to the
business development of the Company. The Company has planned to terminate this
committed project and transfer the remaining balance of the raised funds for the project to
the "brand building" project funds, in order to take advantage of the raised funds more fully
and effectively, and protect the interests of the Company and all shareholders, according to
the business development of the Company.
2. Project of "flexible supply chain service platform establishment"
As the Company has formulated the business strategies with the "Brand Portfolio
Development" as the core, according to the actual business development, continued to
consolidate and expand the brand portfolio and expanded the peripheral business of the brand
portfolio, hence, the business of flexible supply chain parks has declined. In addition, the
Company has performed the equity transfer or cancellation for partial subsidiaries of the
flexible supply chain system through the comprehensive evaluation, according to the actual
situations. The Company has planned to terminate the committed project and transfer the
remaining balance of the raised funds of the project to the "brand building" project funds, in
order to improve the utilization efficiency of the raised funds more fully and effectively, and
protect the interests of the listed company and all shareholders, according to the business
development of the listed company..
II. Decision-making procedure: The 26th Meeting of the 5th Board of Directors and the 22nd
Meeting of the 5th Board of Supervisors of the Company reviewed and approved the
Proposal on Changing the Purpose of the Raised Funds; the independent directors of the
Company have issued an independent opinion about agreeing to change the purpose of the
raised fund; in addition, the independent financial advisor has issued the Verification Opinion
of Donghai Securities Co., Ltd. on the Change of the Purpose of Raised Funds by Nanji E-
commerce Co., Ltd.; and the Third Extraordinary General Meeting of the Company in 2017
has voted through the Proposal on Changing the Purpose of the Raised Funds.
III. Information disclosure: On May 26, 2017, and June 22, 2017, the listed company
disclosed the Resolution on the 26th Meeting of the 5th Board of Directors of NJDS,
Independent Director's Independent Opinion on the Relevant Proposal on the 26th Meeting
of the 5th Board of Directors of the Company, Resolution on the 22nd Meeting of the 5th
Board of Supervisors of NJDS, Verification Opinion of Donghai Securities Co., Ltd. on the
Change of the Purpose of Raised Funds by Nanji E-commerce Co., Ltd., and Proposal on
Changing the Purpose of the Raised Funds and Resolution Announcement of the Third
Extraordinary General Meeting of Nanji E-commerce Co., Ltd. in 2017 on
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www.cninfo.com.cn and Securities Times respectively to disclose the change for the purpose
of the raised funds in this period.
Status of and reason for planned
progress or estimated income not N/A
achieved (of a specific project)
Description of major changes in project
N/A
feasibility after changes
VI. Sale of Major Assets and Equity
1. Sale of major assets
□ Applicable (A) √ Not applicable (N/A)
The Company did not sell any major assets during the reporting period.
2. Sale of major equity
□ Applicable (A) √ Not applicable (N/A)
VII. Analysis of Major Companies Controlled or Participated by the Company
√ Applicable (A) □ Not applicable (N/A)
Major subsidiaries and equity participation companies that affect the Company’s net profit by more than 10%
Unit: RMB
Company Registered Operating Operating
Company name Main business Total assets Net assets Net profits
type capital revenues profits
Sales of the clothing
fabrics, clothing
Nanji E- accessories, and
commerce knitwear & textiles, etc., 780,195,690.0 2,513,337,566.7 2,273,548,333.5
Subsidiary 584,714,232.24 465,390,253.24 418,038,247.71
(Shanghai) Co., business information 0 0 1
Ltd. consulting, and
enterprise management
consulting, etc.,
E-commerce (excluding
value-added
Xinjiang telecommunications and
Juchang E- financial business), E-
Subsidiary 10,000,000.00 425,634,609.92 379,376,854.47 321,363,056.15 258,551,987.35 258,551,988.25
commerce Co., commerce information
Ltd. consulting, business
consulting, and
marketing planning;
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Foreign trade and
enterprise management
information consulting,
etc.
E-commerce (excluding
value-added
telecommunications and
financial business), E-
Xinjiang commerce information
NANJIREN E- consulting, business
Subsidiary 10,000,000.00 245,790,565.39 203,128,910.51 239,671,971.75 186,191,614.68 186,191,667.29
commerce Co., consulting, and
Ltd. marketing planning;
Foreign trade and
enterprise management
information consulting,
etc.
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable (A) √ Not applicable (N/A)
Description for the major companies controlled and participated by the Company
Nanji E-commerce (Shanghai) Co., Ltd., with the registered capital of RMB 780,195,690.00, has mainly engaged
in the brand licensing, E-commerce service, flexible supply chain park business, and a small amount of goods sales
business, etc. By the end of the reporting period, the total assets of Nanji E-commerce (Shanghai) amounted to RMB
2.513 billion, with a YOY increase of 23.86%. It achieved a total operating revenue of RMB 585 million, with a
YOY increase of 14.28%, achieved an operating profit of RMB 465 million, with a YOY increase of 11.81%, and
achieved a net profit of RMB 418 million, with a YOY increase of 10.85%.
Xinjiang Juchang E-commerce Co., Ltd., with the registered capital of RMB 10,000,000.00, has mainly engaged in
the brand licensing, E-commerce service, flexible supply chain park business, and a small amount of goods sales
business, etc. By the end of the reporting period, the total assets of Xinjiang Juchang E-commerce amounted to
RMB 426 million, with a YOY increase of 166.52%. It achieved a total operating revenue of RMB 321 million,
with a YOY increase of 65.34%, achieved an operating profit of RMB 259 million, with a YOY increase of 114.17%,
and achieved a net profit of RMB 259 million, with a YOY increase of 113.99%.
Xinjiang NANJIREN E-commerce Co., Ltd., with the registered capital of RMB 10,000,000.00, has mainly engaged
in the brand licensing, E-commerce service, flexible supply chain park business, and a small amount of goods sales
business, etc. By the end of the reporting period, the total assets of Xinjiang NANJIREN E-commerce amounted to
RMB 246 million, with a YOY increase of 909.28%. It achieved a total operating revenue of RMB 240 million,
with a YOY increase of 775.21%, achieved an operating profit of RMB 186 million, with a YOY increase of
1,007.81%, and achieved a net profit of RMB 186 million, with a YOY increase of 1,002.56%.
VIII. Structured Entity Controlled by the Company
□ Applicable (A) √ Not applicable (N/A)
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IX. Prospect of the Company's Future Development
(I) Industry Structure and Development Trend
1. Total Retail Sales of Consumer Goods
According to the statistical data released by the National Bureau of Statistics, the total retail sales of consumer goods
amounted to RMB 41.1649 trillion for the whole year of 2019, with a YOY increase of 8.0%, of which, the retail
sales of commodities amounted to RMB 36.4928 trillion, with a YOY increase of 7.9%. According to the statistics
for the place of business, the urban retail sales of consumer goods amounted to RMB 35.1317 trillion, with a YOY
increase of 7.9%; in addition, the rural retail sales of consumer goods amounted to RMB 6.0332 trillion, with a
YOY increase of 9.0%. The online retail sales of physical commodities amounted to RMB 8.5239 trillion in 2019,
with an increase of 19.5% compared with the previous year, when calculating according to the comparable statistic
scale, accounting for 20.7% of the total retail sales of consumer goods, with an increase of 2.3% compared with the
previous year. E-commerce channels have still maintained the vitality and steady growth, providing a good
economic environment for the business development of the Company.
2. Internet Advertising Industry
According to the description of the Forecast of the Development Scale of China's Internet Advertising Industry and
Development Trend of Advertising Revenue in 2019 issued by China Industry Information Network
(www.chyxx.com) in November 2019, the market size of China's Internet advertisement amounted to RMB 401
billion in 2019, with a YOY increase of 14.28%; in addition, the market size for 2020 is estimated at RMB 441.48
billion, with a growth rate of 10.1%. At the same time, with the gradually-prominent advantages of the improvement
of targeted Internet advertisement and higher media quality, the client’s recognition of Internet advertising has
gradually enhanced, and the market size of Internet advertising is expected to continue to grow in the future.
(II) Development Strategy and Planning of the Company
The Company will continue to stick to the mission of "helping China's high-quality supply chain to achieve
continuous success, and providing high cost-performance products and services to Chinese families", believe in the
vision of "becoming a world-class consumer goods giant", stick to the values of “Diligent, Cooperative, Result-
oriented, Sustainable, Shareable, and Felicific”, and will take the following strategic measures in the future:
1. Further enrich the brand portfolios, optimize the supply chain services, and continuously improve the
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competitive advantages
The Company will continue to enrich the brand portfolio, by appropriately acquiring the brands suitable for the
Company's operation while maintaining the number of existing brands, horizontally and vertically enriching the
product categories, and further improving the cost-performance of products. At the same time, the Company will
continue to improve the effectiveness of supply chain services and help the business partners in performance
improvement, especially in supply chain services such as data analysis and application, consumer traffic
management, and effectively making the services match with the partner demands. In the meantime, the Company
will explore the business collaboration between Timelink and NJBU, leverage the channel and experience
advantages of Timelink in the mobile information flow, explore the effective way to utilize mobile traffic for brands
or products licensing business, and improve the payment conversion rate.
2. Continue to improve corporate governance
The Company is committed to continuously improving the corporate governance, and will continue to optimize the
comprehensive budget, process management, data management, etc., and strengthen the promotion of management
tools for business. At the same time, the Company will continue to strengthen the collaboration between business
units and functional departments, improve the work efficiency, and also lay the foundation for training versatile
employees.
3. Continue to conduct the business innovation and optimize the business structure
The Company will expand the internet celebrity advertising business, online live streaming sales business and
offline retail business through combining with the market trends and the Company's advantages of traffic and supply
chain, etc. The Company will develop more internet celebrities and advertising clients on platforms such as
Xiaohongshu and Tik Tok. In addition, the Company also plans to develop its own brand live streaming or live
streaming services for other brands on short video platforms such as Kuaishou.
4. Continually implement the talent strategic plan
Talent is the key factor for the Company to maintain healthy and sustainable development, and is an important
guarantee for consolidating the existing business and expanding the new business. And the Company currently has
diversified training, incentive, and training measures, especially the implementation of talent incubation mechanism
of the "Amoeba Small Business Division Mechanism" in the business units of the Company, which is conducive to
the rapid and comprehensive growth of talents. At the same time, the Company also pays attention to recruiting
professional and excellent external talents to supplement the fresh blood and maintain organizational vitality. In
addition, it will also continue to implement the equity incentive and partnership plans to allow the employees and
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the Company to share the value of growth.
(III) Possible risks
1. Dependency risks at the E-commerce channel
At present, the products under the Company’s trademarks are mainly sold on E-commerce channels such as Ali,
JD.com, PDD, VIP.com, etc. Therefore, the operating rules and merchant policies, etc., of the E-commerce platform
may have a certain impact on the sales side of the brand licensing and supply chain service of the Company.
However, on the one hand, the Company maintains a good cooperative relationship and interaction with the E-
commerce platforms, on the other hand, the sales scale and supply chain volume of the Company’s brands are
gradually expanding, therefore, this potential risk would not pose a significant impact on the long-term development
and normal operation of the Company.
2. Risk of uncertain performance in new business
During the reporting period, the Company has set up a joint venture with its related parties, and has planned to
cooperate with the high-quality supply chain partners to develop the offline retail business by making the price
difference of commodity sales and consumer membership fees as the main revenue sources but not assuming the
inventory risk. The main purpose is to deploy the offline channels for NJDS, develop the own consumer traffic
entrance, explore the high-quality supply chain, develop the new model of offline retail, and provide the broader
consumers with the high-quality domestic products, through the development and operation of the offline retail
projects of the joint venture. However, this project involves the business related to offline retail and bears risks such
as large investment, long learning curve, and profitability uncertainty, etc.
3. Risk in profit stability and diversified development of Timelink
Timelink has a certain degree of dependency risks on key suppliers, mainly because the key information flow
suppliers, such as Tencent App Store, Xiaomi Store, VIVO Store, etc., occupy the high-quality and stable traffic
resources of the mobile application market. Hence, Timelink has established a long-term relationship with Tencent
and Xiaomi with the stable procurement policy. In the future, Timelink will further strengthen its cooperation with
Tencent, Xiaomi and VIVO, and strengthen the innovative cooperation of information flow resources of Xiaomi,
etc., on the basis of the existing application market cooperation. At the same time, Timelink will further strengthen
its own competitive strength on the supply side. In addition to the existing high-quality information flow suppliers,
it will further expand cooperation with the high-quality information flow suppliers, such as Toutiao and Tik Tok,
and strengthen the depth and breadth of cooperation with the mainstream information flow suppliers. In addition,
Timelink will continue to maintain the mobile Internet flow integration marketing business and increase the
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flexibility of its own media delivery strategy. On the client side, Timelink will have keen insight into the industry
development trend, and continue to explore the new high-quality clients, while strengthening the cooperation with
existing high-quality clients and increasing the business size.
4. Risk of accounts receivable
NJBU has improved the status of accounts receivable by improving the client management and the performance
evaluation system for business personnel, etc. The YOY growth rate of accounts receivable was lower than that of
operating revenue. The Company has accelerated the payment collection of accounts receivable through the
normalized tracking management of accounts receivable.
X. Reception of Research, Communication, Interviews and Other Activities
1. Information on reception of research, communication, interviews and other during the reporting period
√ Applicable (A) □ Not applicable (N/A)
Reception time Reception mode Type of reception object Disclosure index
Record of Investor Relation Activities of February 28, 2019,
February 28, 2019 Phone calls Institutional investors
disclosed at http://irm.cninfo.com.cn on March 1, 2019
Record of Investor Relation Activities of May 9, 2019,
May 09, 2019 Field research Institutional investors
disclosed at http://irm.cninfo.com.cn on May 10, 2019
Record of Investor Relation Activities of May 24, 2019,
May 24, 2019 Phone calls Institutional investors
disclosed at http://irm.cninfo.com.cn on May 24, 2019
Record of Investor Relation Activities of August 22, 2019,
August 22, 2019 Field research Institutional investors
disclosed at http://irm.cninfo.com.cn on August 23, 2019
Record of Investor Relation Activities of October 18, 2019,
October 18, 2019 Phone calls Institutional investors
disclosed at http://irm.cninfo.com.cn on October 19, 2019
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Section 05 Important Matters
I. Profit Distribution and Increase of Share Capital by Conversion of Capital Reserves for the
Common Share of the Company
Status of formulation, execution, or adjustments made to profit distribution policy for common shareholders,
especially the cash dividend policy, during the reporting period.
□ Applicable (A) √ Not applicable (N/A)
The Company’s plan (proposal) for profit distribution to common shareholders and plan (proposal) for increase of
share capital by conversion of capital reserves for the recent three years (including this reporting period):
In 2019, according to the Proposal for Distribution of Profit 2019 reviewed and approved at the 24th Meeting of
the 6th Board of Directors of the Company, it's planned to distribute a cash dividend of RMB 1.24 per 10 shares
(tax inclusive) to all shareholders, based on the number of the total share of 2,437,913,476 after deducting the
repurchased shares (16,956,927 shares) in the repurchase special account, and the cash dividends with the total
amount of RMB 302,301,271.02 would be distributed, and the remaining undistributed profit of the parent company
amounted to RMB 39,453,999.35, which would be temporarily used to supplement the working capital or the
Company’s development, and would be carried forward for the subsequent annual distribution. In addition, the
Company would not transfer capital reserve to share capital and would not distribute the bonus shares.
In 2018, the Proposal for Distribution of Profit 2018 was reviewed and approved at the 11th Meeting of the 6th
Board of Directors of the Company: no profit distribution would be made in 2018, and no capital reserve would be
transferred to share capital.
In 2017, according to the Proposal for Distribution of Profit 2017 reviewed and approved at the 40th Meeting of
the 5th Board of Directors of the Company, the Company planned to distribute a cash dividend of RMB 0.62 per 10
shares (tax inclusive) to all shareholders, based on the base number of the total share of 1,636,580,269 of the
Company as of December 31, 2017, with the total amount of RMB 101,467,976.68, and part of the source of funds
were dividends from subsidiary; at the same time, the Company planned to convert 818,290,135 shares (the specific
total number of shares of conversion shall be subject to the implementation) to all shareholders by increasing 5
shares per 10 shares through conversion of capital reserves. The above-mentioned proposal for distribution of profit
should be reviewed and approved by the General Meeting of Shareholders of the Company.
Cash dividends distributed to common shareholders in the most recent three years (including the reporting period)
Unit: RMB
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Proportion of
Proportion of the total
Proportion of the amount of amount of cash
Net profit cash dividends cash dividends dividends
attributable to in net profit Amount of in other forms Total amount (including
Amount of cash common attributable to cash dividends in the net profit of cash other forms) in
Year dividends (tax shareholders of the common in other forms attributable to dividends the net profit
inclusive) Company in shareholders of (such as share common (including attributable to
consolidated the Company repurchase) shareholders of other forms) common
statements in consolidated the Company shareholders of
statements in consolidated the Company
statements in consolidated
statements
Year 2019 302,301,271.02 1,206,136,918.38 25.06% 84,058,578.41 6.97% 386,359,849.43 32.03%
Year 2018 0.00 886,472,236.97 0.00% 67,597,253.12 7.63% 67,597,253.12 7.63%
Year 2017 101,467,976.68 534,291,649.78 18.99% 0.00 0.00% 101,467,976.68 18.99%
The Company made a profit in the reporting period and the profit distributable to the common shareholders of the
parent company was positive, but it did not put forward a proposal for cash dividend distribution to common shares:
□ Applicable (A) √ Not applicable (N/A)
II. Proposal for Profit Distribution and Conversion of Capital Reserves into Share Capital for
the Reporting Period
√ Applicable (A) □ Not applicable (N/A)
Number of bonus shares per 10 shares (shares) 0
Dividend distribution per 10 shares (RMB) (tax
1.24
inclusive)
Conversion of capital reserves into share capital per
0
10 shares (share)
Share base of the distribution proposal (share) 2,437,913,476
Amount of cash dividends (RMB) (tax inclusive) 302,301,271.02
Amount of cash dividends in other forms (such as
84,058,578.41
share repurchase) (RMB)
Total amount of cash dividends (including other
386,359,849.43
forms) (RMB)
Distributable profit (RMB) 341,755,270.37
Proportion of the total amount of cash dividends
(including other forms) in the total amount for profit 100.00%
distribution
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Cash dividend policy
Others
Details of proposal for profit distribution and conversion of capital reserves into share capital
In 2019, according to the Proposal for Distribution of Profit 2019reviewed and approved at the 24th Meeting of the 6th Board of
Directors of the Company, the Company planned to distribute a cash dividend of RMB 1.24 per 10 shares (tax inclusive) to all
shareholders, based on the base number of the total share of 2,437,913,476 after deducting the repurchased shares (16,956,927 shares)
in this purchase special account, and the cash dividends with the total amount of RMB 302,301,271.02 would be distributed, and the
remaining undistributed profit of the parent company amounted to RMB 39,453,999.35, which would be temporarily used to
supplement the working capital or the Company’s development, and would be carried forward for the subsequent annual distribution.
In addition, the Company would not convert capital reserve to share capital and would not distribute the bonus shares.
III. Fulfillment of Commitments
1. Commitments made by the Company’s actual controllers, shareholders, related parties, acquirers, and
others that were fulfilled during the reporting period and those not fulfilled as of the end of the reporting
period
√ Applicable (A) □ Not applicable (N/A)
Committed Commitment Committed Commitment Fulfillment
Commitment Commitment details
by type time period status
Commitments made
during conversion to
joint-stock company
limited
Commitments stated
in the Report of
Acquisition or
Equity Change
Report
As a shareholder of Timelink, I hereby
make the following irrevocable
commitments and warranties: 1. The
new shares subscribed from NJDS
CHEN Jun;
through this restructuring shall not be
GE Nan;
Commitments made transferred to any third party within 12
LIU Rui; YU Restricted sale November 9,
during asset months from the date of listing; in 2018-11-08 Normal
Hanqing; of shares 2017
restructuring addition, subject to the compliance of
ZHANG
the above-mentioned lockup period, I
Ming;
agree to relieve the restriction on sales
of the subscribed shares of NJDS in the
following manner after 12 months
from the date of listing to make the
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Performance Compensation
Agreement signed between the listed
company and me more exercisable: (1)
12 months after the date of the end of
the share issuance, and after the NJDS
announcing the Special Audit Report
of Timelink in 2017, if the audited
cumulative net profit amount realized
by Timelink at the end of 2017 is not
less than the cumulative committed net
profit amount as of the end of 2017,
then I can transfer 30% of the shares of
the listed company obtained in this
transaction; (2) Upon 2018 Special
Audit Report of Timelink issued by
NJDS, if Timelink's audited ending
accumulative realized net profit in
2018 is not less than the ending
accumulative committed net profit as
of 2018, I can transfer 60% shares of
the listed company obtained from this
transaction; (3) Upon 2019 Special
Audit Report of Timelink issued by
NJDS, if Timelink's audited ending
accumulative realized net profit in
2019 is not less than the ending
accumulative committed net profit as
of 2019, I can transfer 90% shares of
the listed company obtained from this
transaction; After 48 months this
transaction was approved by CSRC, I
can transfer 100% shares of the listed
company obtained from this
transaction; In case of failure in
reaching the performance
commitment, I can transfer the listed
company shares obtained according to
the above mentioned agreement after
performing compensation in the
current period. As for other provisions
imposed by relevant laws, regulations
or CSRC and exchange rules on lockup
period of shares held by Timelink
shareholders, it is a must to follow the
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requirement of such provisions
simultaneously.
I/ESOPII make(s) the following
commitments for restricted circulation
or transfer of RMB common shares of
NJDS subscribed during this
transaction: 1. shares of NJDS
subscribed through this private
placement shall not be transferred
within 36 months from the ending date
of issuance and shall be subject to
relevant regulations of CSRC and
NJDS - Shenzhen Exchange after 36 months.
ESOP II; Restricted sale 2. As for company shares increased November 9,
2020-11-08 Normal
ZHANG of shares due to distribution of bonus shares, 2017
Yuxiang conversion of capital reserves into
share capital and other reasons, such
agreements shall be followed after
issuing shares to raise supporting
proceeds. 3. As for other provisions
imposed by relevant laws, regulations
or CSRC and exchange rules on lockup
period of NJDS shares subscribed by
me this time, it is a must to follow the
requirement of such provisions
simultaneously.
I. Commitments on avoiding
horizontal competition: (I). as of the
signing date of this commitment letter,
I have never engaged in business
involving horizontal competition with
Commitments
NJDS and other companies under its
on horizontal
control including Timelink. (II). In
competition,
order to avoid new (or possible), direct
GE Nan; related-party
(or indirect) business competition with January 24,
LIU Rui; YU transaction 9999-12-31 Normal
the listed company's production and 2017
Hanqing and
operation, during the period I hold
occupation of
NJDS shares after this reorganization,
funds
I hereby make the following
commitments: 1. I will not directly
engage in product production and/or
business operation that are the same
with or similar to those of the listed
company in case of not in favor of the
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listed company; 2. I will not invest in
any enterprise which constituted or
may constitute competition with the
listed company's product production
and/or business operation; 3. I promise
that I will prompt enterprises under my
direct or indirect control and
enterprises where I served as director
and senior executive (collectively
"related parties") not to directly or
indirectly engage in, take part in or
conduct any activity under competition
with the listed company's product
production and/or business operation;
4. In case of my participated
enterprises engaging in product
production and/or business operation
under competition with the listed
company, I will avoid becoming such
enterprises' controlling shareholder or
obtaining such enterprises' actual
controlling right; 5. In case of the listed
company further expanding its product
or business scope thereafter, I and/or
related parties will not undergo
competition with the listed company's
product or business after expansion. If
I and/or related parties undergo
competition with the listed company's
product or business after expansion, I
will in person and/or cause affiliated
enterprises to take measures to exit
such competition in a manner serving
the best interests of the listed company,
including but not limited to: (1) stop
manufacturing products which
constituted or may constitute
competition; (2) stop operating
business which constituted or may
constitute competition; (3) transfer
business under competition to an
unrelated third party; (4) Include
business under competition in the
operation of the listed company. (III). I
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confirm that each commitment listed in
the commitment letter is independent.
The validity of every other
commitment shall remain unaffected if
any single commitment is deemed as
invalid or terminated. II.
Commitments on reducing and
regulating related-party transactions
with Nanji E-commerce Co., Ltd.: as
for related-party transactions that may
be conducted after this transaction
between NJDS and me, enterprises
under my control and enterprises
where I served as director and senior
executive, I hereby make the following
commitments: "after the completion of
this transaction, I, enterprises under
my control and enterprises where I
served as director and senior executive
(hereinafter referred to as "related
parties") will reduce related-party
transactions with NJDS to the greatest
extent, and for inevitable related-party
transactions, the related parties and
NJDS shall sign an agreement
according to laws, implement legal
procedures and perform information
disclosure obligation and handle
relevant reporting and approval
matters according to relevant laws,
regulations, Articles of Association of
Nanji E-commerce Co., Ltd. and other
provisions, and promise not to damage
legal interests of NJDS and other
shareholders through related-party
transactions."
CHEN Commitments I. Letter of commitment on avoiding
Xiaojie; on horizontal horizontal competition: (I). as of the
CHEN Ye; competition, signing date of this commitment letter,
CUI Yifeng; related-party I have never engaged in business January 24,
9999-12-31 Normal
HU transaction involving horizontal competition with 2017
Xianghuai; and NJDS and other companies to be under
HU occupation of its control including Timelink. (II). In
Xiaowei; funds order to avoid new (or possible), direct
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LING Yun; (or indirect) business competition with
LIU Nannan the listed company's production and
SHEN operation, during the period I serve as
Chenxi; NJDS's director/supervisor/senior
WAN Jieqiu; executive after this transaction, I
XU Lifang; hereby make the following
XU Beibei; commitments: 1. I will not directly
YANG Bin; engage in product production and/or
YU Weimin; business operation that are the same
ZHANG with or similar to those of the listed
Yanni; company in case of not in favor of the
ZHANG listed company; 2. I will not invest in
Yuxiang any enterprise which constituted or
may constitute competition with the
listed company's product production
and/or business operation; 3. I promise
that I will prompt enterprises under my
direct or indirect control and
enterprises where I served as director
and senior executive (collectively
"related parties") not to directly or
indirectly engage in, take part in or
conduct any activity under competition
with the listed company's product
production and/or business operation;
4. In case of my participated
enterprises engaging in product
production and/or business operation
under competition with the listed
company, I will avoid becoming such
enterprises' controlling shareholder or
obtaining such enterprises' actual
controlling right; 5. In case of the listed
company further expanding its product
or business scope thereafter, I and/or
the related parties will not undergo
competition with the listed company's
product or business after such
expansion. If I and/or the related
parties undergo competition with the
listed company's product or business
after expansion, I will in person and/or
cause the related parties to take
measures to exit such competition in a
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manner serving the best interests of the
listed company, including but not
limited to: (1) stop manufacturing
products which constituted or may
constitute competition; (2) stop
operating business which constituted
or may constitute competition; (3)
transfer business under competition to
an unrelated third party; (4) Include
business under competition in the
operation of the listed company. (III). I
confirm that each commitment listed in
the commitment letter is independent.
The validity of every other
commitment shall remain unaffected if
any single commitment is deemed as
invalid or terminated. II. Letter of
commitment on reducing and
regulating related-party transactions
with Nanji E-commerce Co., Ltd.: 1.
after the completion of this
restructuring, I and other companies
and other related parties on which I
have actual controlling right or impose
significant impact excluding NJDS
and its holding subsidiaries (including
Timelink proposed to be changed as a
subsidiary of NJDS) will avoid related-
party transactions with NJDS and its
holding subsidiaries to the greatest
extent; as for necessary and inevitable
related-party transactions, it is a must
to conduct such related-party
transactions according to the principle
of justice, fairness and compensation
of equal value, determine the
transaction price in accordance with
the reasonable price recognized by the
market, perform transaction approval
procedures and information disclosure
obligations regulated by relevant laws,
regulations and normative documents,
and practically protect the interests of
NJDS and its minority shareholders. 2.
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I promise that I will legally exercise
shareholder's rights and perform
shareholder's obligations, and will not
take advantage of the status of
shareholder to seek any illegitimate
interests and not damage the legal
interests of NJDS and its minority
shareholders according to the relevant
laws and regulations, rules and
normative documents issued by China
Securities Regulatory Commission,
business rules issued by Shenzhen
Stock Exchange, Articles of
Association of NJDS and other
regulations. In case of losses of NJDS
and its minority shareholders and
holding subsidiaries arising from
transactions with NJDS and its holding
subsidiaries by violating the above-
mentioned commitments, I will
assume the corresponding liability for
damage according to laws.
Commitment on avoiding horizontal
competition: I. As of the signing date
of this commitment letter, I/the
enterprise have/has never engaged in
business involving horizontal
competition with NJDS and other
companies to be under its control
Shanghai Commitments including Timelink. II. In order to
Fengnan on horizontal avoid new (or possible), direct (or
Investment competition, indirect) business competition with the
Center LLP; related-party listed company's production and January 24,
9999-12-31 Normal
ZHANG transaction operation, during the period I/the 2017
Yuxiang; and enterprise serve(s) as NJDS's actual
ZHU occupation of controller and controlling shareholder
Xuelian funds after this transaction, I/the enterprise
hereby make(s) the following
commitments: 1. I/the enterprise will
not directly engage in product
production and/or business operation
that are the same with or similar to
those of the listed company in case of
not in favor of the listed company; 2.
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I/the enterprise will not invest in any
enterprise which constituted or may
constitute competition with the listed
company's product production and/or
business operation; 3. I/the enterprise
promise(s) that I/the enterprise will
prompt enterprises under my direct or
indirect control and enterprises where
I served as director and senior
executive (collectively "related
parties") not to directly or indirectly
engage in, take part in or conduct any
activity under competition with the
listed company's product production
and/or business operation; 4. In case of
my/the enterprise's participated
enterprises engaging in product
production and/or business operation
under competition with the listed
company, I/the enterprise will avoid
becoming such enterprises' controlling
shareholder or obtaining such
enterprises' actual controlling right; 5.
In case of the listed company further
expanding its product or business
scope thereafter, I/the enterprise and/or
the related parties will not undergo
competition with the listed company's
product or business after such
expansion. If I and/or the related
parties undergo competition with the
listed company's product or business
after such expansion, I/the enterprise
will in person and/or cause the related
parties to take measures to exit such
competition in a manner serving the
best interests of the listed company,
including but not limited to: (1) stop
manufacturing products which
constituted or may constitute
competition; (2) stop operating
business which constituted or may
constitute competition; (3) transfer
business under competition to an
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unrelated third party; (4) Include
business under competition in the
operation of the listed company. III.
I/The enterprise confirm(s) that each
commitment listed in the commitment
letter is independent. The validity of
every other commitment shall remain
unaffected if any single commitment is
deemed as invalid or terminated.
Commitment on reducing and
formulating related transactions: 1.
after the completion of this
restructuring, I/the enterprise and other
companies and other related parties on
which I/the enterprise have/has actual
controlling right or impose(s)
significant impact excluding NJDS
and its holding subsidiaries (including
Timelink proposed to be changed as a
subsidiary of NJDS) will avoid related-
party transactions with NJDS and its
holding subsidiaries to the greatest
extent; as for necessary and inevitable
related-party transactions, it is a must
to conduct such related-party
transactions according to the principle
of justice, fairness and compensation
of equal value, determine the
transaction price in accordance with
the reasonable price recognized by the
market, perform transaction approval
procedures and information disclosure
obligations regulated by relevant laws,
regulations and normative documents,
and practically protect the interests of
NJDS and its minority shareholders. 2.
I/The enterprise promise(s) that I/the
enterprise will legally exercise
shareholder's rights and perform
shareholder's obligations, and will not
take advantage of the status of
shareholder to seek any illegitimate
interests and not damage the legal
interests of Nanji E-commerce and its
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minority shareholders according to the
relevant laws and regulations, rules
and normative documents issued by
China Securities Regulatory
Commission, business rules issued by
Shenzhen Stock Exchange, Articles of
Association of NJDS and other
regulations. In case of losses of NJDS
and its minority shareholders and
holding subsidiaries arising from
transactions with NJDS and its holding
subsidiaries by violating the above-
mentioned commitments, I/the
enterprise will assume the
corresponding liability for damage
according to laws.
Letter of commitment on dilution of
immediate return in asset
restructuring: according to the
requirement of Opinions on Further
Strengthening the Work of Protection
of the Legitimate Rights and Interests
CHEN Ye; of Minority Investors in the Capital
HU Markets (No. 110 [2013] of the
Xiaowei; General Office of the State Council),
LING Yun; Guiding Opinions on Matters
LIU Nannan concerning the Dilution of Immediate
SHEN Return in Initial Public Offering,
Chenxi; Refinancing and Material Asset
WAN Jieqiu; Other Restructuring issued by China January 24,
9999-12-31 Normal
XU Lifang; Commitments Securities Regulatory Commission 2017
XU Beibei; and relevant laws, regulations and
YANG Bin; normative documents, the Company's
YU Weimin; directors and senior executives hereby
ZHANG make the following commitments: 1.
Yanni; Promise to perform responsibilities
ZHANG and obligations dutifully and
Yuxiang diligently, and safeguard legal rights
and interests of the Company and all of
its shareholders. 2. Promise not to
transfer interests to other entities or
persons in a voluntary manner or with
unfair conditions, and not to damage
the Company's interests in other ways.
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3. Promise to restrain my consumption
behaviors of the position. 4. Promise
not to employ the Company's assets in
an attempt to perform investment and
consumption activities irrelevant to the
performance of responsibilities. 5.
Promise to, within the scope of my
responsibility and limit of authority,
try my best to cause the remuneration
system formulated by the company's
Board of Directors or Nomination and
Remuneration Committee to be
pegged to the implementation of the
Company's specific measures for
making up the gap. 6. Promise to,
within the scope of my responsibility
and limit of authority, try my best to
cause the vesting conditions of stock
options incentive to be issued by the
Company to be pegged to the
implementation of the Company's
specific measures for making up the
gap. 7. Promise to practically perform
the Company's relevant specific
measures for making up the gap and
my commitments on such measures for
making up the gap, in case of violating
such commitments and causing losses
on the Company or investors, I'm
willing to assume the liability of
indemnity against the Company or
investors according to laws.
Commitment on non-competition and
confidentiality agreement: according
to the Agreement on Asset Purchase
through Share Issuance and Cash
Payment signed between the listed
Other company and relevant parties, I November 8,
LIU Rui 2022-09-26 Normal
Commitments promised to hold a post in Timelink for 2017
at least 60 months from the delivery
date of target assets, and sign Non-
competition Agreement and
Confidentiality Agreement with Time
Link for at least 60 months.
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Commitment on non-competition and
confidentiality agreement: according
to the Agreement on Asset Purchase
through Share Issuance and Cash
Payment signed between the listed
company and relevant parties, LIU Rui
promised to hold a post in Timelink for
at least 60 months from the delivery
date of target assets, and sign Non-
competition Agreement and
Confidentiality Agreement with
LIU Rui; Yu Timelink for at least 60 months. YU
Hanqing and Hanqing promised to hold a post in
Other September
core Timelink for at least 36 months from 2022-09-26 Normal
Commitments 27, 2017
management the delivery date of target assets, and
team sign Non-competition Agreement and
Confidentiality Agreement with Time
Link for at least 60 months.
Meanwhile, Timelink's core
management team and technical
personnel have signed a letter of
commitment and promised to hold a
post in Timelink for at least 36 months
from the delivery date of target assets,
and sign Non-competition Agreement
and Confidentiality Agreement with
Time Link for at least 60 months.
Arrangement of senior executives of
Timelink: After target assets have been
transferred into the account of NJDS,
NJDS shall appoint relevant personnel
to serve as directors of Timelink and
such number of personnel shall be
more than half of the total number of
LIU Rui and directors of Time Link; appoint
Other September
senior financial principal (by joint external 9999-12-31 Normal
Commitments 27, 2017
executives recruitment) to control Timelink's
financial matters and apply the system
relevant to the financial management
of NJDS subsidiaries. After this
transaction, Timelink shall set a Board
of directors consisting of 3 members,
among which Liu Rui will take a post
of director.
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Letter of commitment on maintaining
the independence of the listed
company: I. Ensure the listed
company's personnel to be
independent 1. Ensure that the listed
company's senior executives including
General Manager, Deputy General
Manager, Finance Director and Board
Secretary are full-time employees of
the listed company with compensation
and have not held a post other than
Director and Supervisor in myself/the
enterprise and its related natural
persons, related enterprises and related
legal persons (collectively " Myself
and Related Parties" and the specific
scope shall be subject to the existing
and effective Stock Listing Rules of the
Shenzhen Stock Exchange); 2. Ensure
CHEN Jun; that the listed company's efforts,
GE Nan; human resources and compensation
LIU Rui; YU Other management are totally independent of January 24,
9999-12-31 Normal
Hanqing; Commitments Myself and Related Parties; 3. I/The 2017
ZHANG enterprise shall recommend candidates
Ming for Director, Supervisor, Manager and
other senior executives to the listed
company through legal procedures,
and shall not interfere with the
Company's board of directors and
shareholders' meeting exercising their
official powers to make decisions with
respect to personnel appointment and
removal. II. Ensure the listed
company's assets to be independent
and complete 1. Ensure that the listed
company possesses independent
business system relevant to operation
and independent and complete assets;
2. Ensure that the listed company's
funds and assets are not subject to
occupation by myself/the enterprise
and its related parties; 3. Ensure that
the listed company's domicile is
independent of myself and related
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parties. III. Ensure the listed
company's finance to be independent
1. Ensure that the listed company has
independent financial department and
independent financial accounting
system, as well as standardized and
independent financial accounting
mechanism; 2. Ensure that the listed
company has opened accounts in
independent banks and did not share
bank accounts with myself and related
parties; 3. Ensure that the listed
company's financial personnel neither
take a part-time job nor get
compensation from myself and related
parties; 4. Ensure that the listed
company has paid taxes independently
according to laws; 5. Ensure that the
listed company can make financial
decisions independently, and no
intervention has been imposed on the
listed company's funds employment by
myself and related parties. IV. Ensure
the listed company's organization to be
independent 1. Ensure that the listed
company has established complete
corporate governance structure and
owned independent and complete
organization; 2. Ensure that the listed
company's shareholders' meeting,
Board of Directors, independent
directors, Board of Supervisors,
General Managers and other personnel
exercise the official powers
independently according to laws,
regulation and Articles of Association
of NJDS. V. Ensure the listed
company's business to be independent
1. Ensure that the listed company has
assets, personnel, qualification and
ability to roll out operation activities
independently and has ability to
continue market-oriented operation
independently; 2. Ensure that I/the
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enterprise impose no interventions on
the listed company's business activities
other than intervention through
exercising shareholder's rights and
interests; 3. Ensure that I/the enterprise
and other enterprises under its control
will avoid engaging in business under
substantial competition with the listed
company; 4. Ensure I/the enterprise
and other enterprises under its control
to reduce and avoid related
transactions with the listed company to
the greatest extent; as for necessary
and inevitable related-party
transactions, it is a must to conduct
such related-party transactions fairly
according to the principle of
marketization at fair price, and
perform transaction procedures and
information disclosure obligations
regulated by relevant laws,
regulations, normative documents and
Articles of Association of NJDS.
Commitment on maintaining the
independence of the listed company:
Before this restructuring, Timelink and
NJDS were independent of myself/the
Shanghai enterprise, and after this restructuring,
Fengnan I/the enterprise will continue to keep
Investment NJDS to be independent, follow the
Center LLP; Other principle of separation and January 24,
9999-12-31 Normal
ZHANG Commitments independence in five aspects i.e. 2017
Yuxiang; business, asset, personnel, financial
ZHU affairs and organization, follow the
Xuelian relevant regulations formulated by
CSRC, not make use of NJDS to
provide guarantee illegally, not occupy
NJDS funds and not constitute
horizontal competition with NJDS.
Shanghai Commitment on not interfering ultra
Fengnan vires in operation and management
Other January 24,
Investment activities of the listed company, not 9999-12-31 Normal
Commitments 2017
Center LLP; encroaching on the interests of the
ZHANG listed company and practically
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Yuxiang; performing the Company's specific
ZHU measures for making up the
Xuelian performance gap: I. The Company's
operation and management activity
shall not be interfered ultra vires by the
company's controlling shareholder and
actual controller; II. the Company's
interests shall not be encroached by the
Company's controlling shareholder
and actual controller. III. the
Company's controlling shareholder
and actual controller shall ensure that
the Company's specific measures are
practically implemented to make up
the performance gap. I/The enterprise,
as the liability subject of above-
mentioned commitments, will assume
liability for damage according to laws
if the Company and investors suffer
from losses due to violation of such
commitments.
1. Shares obtained by me/the
enterprise through the share insurance
for purchasing assets cannot be
transferred during the period from the
ending date of the listed company's
share insurance to the expiration day of
thirty six months and before the day
when the performance compensation
Shanghai
obligations are performed totally by
Fengnan
me/the enterprise (whichever is later).
Investment
Within the above lockup period, shares
Center LLP; Restricted sale January 20,
which increased as a result of the listed 2019-01-19 Completed
ZHANG of shares 2016
company's stock dividend distribution,
Yuxiang;
conversion of capital reserve into share
ZHU
capital and other reasons, shall have
Xuelian
the same lockup period with the above-
mentioned shares. 2. If the listed
company's shares saw a closing price
less than the offering price for
successively 20 trading days within 6
months after I/the enterprise
completed asset purchase through
issuing shares, or the closing price was
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less than the offering price at the end
of 6 months upon the transaction
completion the lockup period of the
listed company's shares held by me/the
enterprise shall be automatically
extended for at least 6 months.
Shares obtained through the listed
company's private placement by Sunny
Special Private Fund No. 1 to No. 3
Sunny
under the management of Sunny
Special
Loantop Co., Ltd. shall not be
Private Fund
transferred within thirty-six months
No. 1; Sunny
from the ending date of share
Special Restricted sale January 20,
insurance by the listed company. 2019-01-19 Completed
Private Fund of shares 2016
Within the above lockup period, shares
No. 2; Sunny
which increased as a result of the listed
Special
company's stock dividend distribution,
Private Fund
conversion of capital reserve into share
No. 3
capital and other reasons, shall have
the same lockup period with the above-
mentioned shares.
1. The Enterprise/I and the enterprises
other than NJDS and its controlling
subsidiaries under my/the enterprise's
holding and substantial control have no
business under competition with NJDS
at present. 2. Except as permitted by
laws and regulations, after the
completion of this transaction, the
Shanghai Commitments
Enterprise/I and other enterprises
Fengnan on horizontal
under the Enterprise's/my control and
Investment competition,
substantial control will neither directly
Center LLP; related-party August 21,
or indirectly operate businesses which 9999-12-31 Normal
ZHANG transaction 2015
constitute competition or may
Yuxiang; and
constitute substantial competition with
ZHU occupation of
main businesses of the listed company
Xuelian funds
nor invest in other enterprises which
constitute competition or may
constitute substantial competition with
main businesses of the listed company.
3. If the listed company affirms that
other enterprises under the
Enterprise's/my holding or actual
control are engaging in or are about to
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engage in businesses which are under
horizontal competition with the listed
company, the Enterprise shall
voluntarily or ask relevant enterprises
to transfer or terminate such businesses
in a timely manner upon objection
raised by the listed company. If the
listed company asks for further
transfer, the Enterprise shall give
priority to the listed company
unconditionally with respect to the
transfer of the above-mentioned
businesses and assets at fair price
audited or assessed by an intermediary
agency with securities practice
qualification. 4. In case of violating
any commitment in this letter of
commitment, the promisee shall
indemnify all direct and indirect losses
suffered by Xinmin Technology. 5.
This letter of commitment shall come
into force after the completion of this
transaction, and remain valid during
the period when the promisee and
Xinmin Technology and its
subsidiaries have non-competition
obligations for associated relationship
according to relevant laws and
regulations.
1. After the completion of this
transaction, I (the Enterprise),
enterprises under my (the Enterprise's)
control and enterprises where I (the
Shanghai
Enterprise) served as director or senior
Fengnan
executive (collectively "related party")
Investment
will reduce related-party transactions
Center LLP; Other September
with Xinmin Technology to the 9999-12-31 Normal
ZHANG Commitments 9, 2015
greatest extent, and for inevitable
Yuxiang;
related-party transactions, the related
ZHU
party and Xinmin Technology shall
Xuelian
sign an agreement according to laws,
implement legal procedures and
perform information disclosure
obligation and handle relevant
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
reporting and approval matters
according to relevant laws,
regulations, Articles of Association of
Jiangsu Xinmin Textile Technology
Co., Ltd. and other provisions, and
promise not to damage legal interests
of Xinmin Technology and other
shareholders through related-party
transactions. 2. I (The Enterprise)
promise(s) that Xinmin Technology
will have the following independence
after the completion of this transaction:
"1. Xinmin Technology has the
independent market-oriented
management ability and independent
sales, operation and service system.
With a complete business process,
NJDS can provide outward service
independently. NJDS has complete
independence in terms of business. 2.
Xinming Technology possesses
electronic equipment, tools, office
equipment, transportation equipment
and other supporting facilities relevant
to operation and has the legal
ownership and right of use of the
house, electronic equipment, office
equipment, trademark and other
facilities related to its business. 3.
Xinmin Technology's General
Manager, Deputy General Manager,
Financial Director, Board Secretary
and other senior executives neither
hold other administrative positions
other than directors and supervisors in
other enterprises controlled by the
controlling shareholder and the actual
controller of NJDS, nor get salaries in
other enterprises controlled by the
controlling shareholder and the actual
controller. There are no such situation
as holding dual posts, which are
prohibited by laws, regulations and
normative documents. Financial staff
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of NJDS are full-time and get paid in
NJDS, without having a part-time job
or get paid in other companies. 4.
Xinmin Technology has opened
independent accounts, set up an
independent financial department,
formulated independent financial
management system and paid taxes
independently. NJDS can make
financial decisions independently.
Thus, there is no intervention by
shareholders in the use of company
funds. NJDS has a set of complete and
independent financial accounting
system. 5. Xinmin Technology
establishes an organization necessary
for its business. All internal
departments operate independently,
without mixed operation or sharing
working space.
1. The Enterprise and the Enterprise's
affiliated enterprises will minimize
and avoid related-party transactions
Wujiang with the joint-stock company. If
Xinmin certain related-party transaction shall
Industrial be implemented according to the
Investment principle of being most superior to the
Co., Ltd. and joint-stock company, the Enterprise
Wujiang Commitments will avoid interfering with the
Xinmin on horizontal independent judgment by the joint-
Commitment made Technology competition, stock company's decision-making
during initial public Developmen related-party institute, roll out just, fair and open August 17,
9999-12-31 Normal
offering or re- t Co., Ltd. transaction transactions with the joint-stock 2006
financing (renamed as and company on the premise of strictly
Dongfang occupation of following regulations relevant to
Xinmin funds related-party transactions in the joint-
Holding Co., stock company's Articles of
Ltd.) before Association, laws, regulations and
offering by normative documents, and will help it
the to fully perform necessary disclosure
Company obligation in a practical manner. 2.
During the period acting as a
shareholder of Xinmin Technology, the
Enterprise and its subsidiaries will not
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directly or indirectly roll out any same
or similar business which institutes
competition against the existing
businesses of Xinmin Technology. 3.
The Enterprise and its holding
subsidiaries shall not occupy funds or
other assets of the joint-stock company
and its holding subsidiaries directly or
indirectly, excluding normal business
dealings.
The
Company's
directors,
supervisors
and senior
executives
indirectly
holding the
Company's
shares
through
Promise to report to the Company the
holding
shares they hold indirectly and the
equities of
changes thereto. The shares transferred
the
each year by any of them during his or
Company's
Commitment her tenure in the Company shall not
shareholders March 2,
for restricted exceed 25% of total shares that he or 9999-12-31 Completed
i.e. Wujiang 2007
sale of shares she holds indirectly in the Company;
Xinmin
such personnel shall not transfer the
Industrial
Company's shares that they hold
Investment
indirectly within half a year after
Co., Ltd. and
resign from the Company.
Wujiang
Xinmin
Technology
Developmen
t Co., Ltd.
(renamed as
Dongfang
Xinmin
Holding Co.,
Ltd.) before
the
Company's
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Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.
offering
Commitment on
equity incentive
Other commitments
made to minority
shareholders of the
Company
Whether
commitments are Yes
performed on time
2. Company statement on meeting original profit forecasts for assets or projects and the reasons therefore,
where such profit forecasts have been made and the reporting period falls within the profit forecast period
√ Applicable (A) □ Not applicable (N/A)
Forecast Actual Reasons for Disclosure
Name of asset or Disclosure date
Start time of End time of performance performance not achieving index of
project in profit of original
forecast forecast (Current) (Current) forecast (if original
forecast forecast
(RMB 10,000) (RMB 10,000) applicable) forecast
Report of Asset
Purchase and
Supporting
Funds Raising
through Share
Insurance and
January 1, December 31, September 20,
Timelink 13,200 11,146.23 N/A Cash Payment,
2016 2019 2017
and Related-
party
Transaction
(Revised) on
www.cninfo.co
m.cn
Commitments made by the Company’s shareholders and counterparties to the reporting year’s operating
performance
√ Applicable (A) □ Not applicable (N/A)
According to the RCZZ [2020]230Z0741 Special Audit Report for Profit Achievement issued by RSM China CPA
LLP, the net profits (excluding non-recurring profits and losses) of the businesses and assets acquired by the
Company in the major asset restructuring in 2017 reached RMB 111.4623 million in 2019.
The accumulated net profits attributable to the owner of the parent company deducting non-recurring profits and
losses of four fiscal years from 2016 to 2019 reached RMB 420.8490 million, higher than the restructuring parties’
commitments of RMB 407 million.
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Fulfilment of performance commitments and their impact on goodwill impairment testing
IV. Status of Capital of the Listed Company Used for Non-operating Purposes by the
Controlling Shareholder or Its Related Parties
□ Applicable (A) √ Not applicable (N/A)
In the reporting period, no controlling shareholder or its related party used capital of the listed Company for non-
operating purposes.
V. Explanations from the Board of Directors, Board of Supervisors and Independent Directors
(If Any) on “Non-standard Audit Report” Issued by the Auditor for the Reporting Period
□ Applicable (A) √ Not applicable (N/A)
VI. Explanations on Changes in Accounting Policies, Estimates and Methods When Compared
to the Previous Financial Year
√ Applicable (A) □ Not applicable (N/A)
1. Significant changes in accounting policies
On April 30, 2019, the Ministry of Finance of China (“MOF”) issued the Notice on Revising and Issuing the
Format of Financial Statements of General Enterprises for 2019 (CK [2019] No. 6) which requires enterprises that
have implemented the new financial instrument standards but have not implemented the new revenue standards and
new leasing standards to prepare financial statements according to the following regulations:
The item "notes receivable and accounts receivable" in balance sheet shall be divided into the items "notes
receivable" and "accounts receivable"; the item "receivables financing" shall be added, so as to reflect the notes
receivable and accounts receivable measured at fair value with changes recorded in other comprehensive income
on balance sheet date; the item "notes payable and accounts payable" shall be divided into the items "notes payable"
and "accounts payable".
The sub-item of "gains /losses from derecognition of financial assets measured at amortized cost" shall be added
under the item of “investment income”.
On September 19, 2019, the MOF issued the Notice on Revising and Issuing the Format of Consolidated Financial
Statements (2019) (CK [2019] No. 16), which should be implemented with CK [2019] No. 6.
The Company prepared the comparative statements in accordance with the format of financial statements regulated
by CK [2019] No. 6 and CK [2019] No. 16, and changed the presentation of financial statements related with
retroactive adjustment.
②The MOF issued the Accounting Standards for Enterprises No. 22 – Recognition and Measurement of Financial
Instruments (CK [2017] No. 7), the Accounting Standards for Enterprises No. 23 – Transfer of Financial Assets
(CK 8 [2017] No.) and the Accounting Standards for Enterprises No. 24 – Hedge Accounting (CK [2017] No. 9) on
March 31, 2017 respectively, and issued the Accounting Standards for Enterprises No. 37 – Presentation of
Financial Instruments (CK [2017] No. 14) on May 2, 2017 (collectively "new financial instrument standards").
Domestic listed enterprises are required to implement new financial instrument standards from January 1, 2019. The
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Company implemented such new financial instrument standards from January 1, 2019 and made adjustments for
relevant accounting policies. For details, see Note V.10.
Due to inconsistency between recognition and measurement of financial instruments before January 1, 2019 and
new financial instrument standards, the Company conducted retroactive adjustment for classification and
measurement of financial instruments (including impairment) according to new financial instrument standards, and
included the difference between the original carrying value of financial instruments and new carrying value on
implementation day (i.e. January 1, 2019) of new financial instrument standards in retained earnings or other
comprehensive income as of January 1, 2019. Meanwhile, the Company has not made adjustment for data on
comparative statements.
③On May 9, 2019, the MOF issued the Accounting Standards for Enterprises No. 7–Exchange of Non-monetary
Assets (CK [2019] No. 8). According to the requirements, the Company has made adjustment for the exchange of
non-monetary assets incurred from January 1, 2019 to the implementation date according to this code, and has not
made retroactive adjustment for the exchange of non-monetary assets incurred before January 1, 2019. The
Company has implemented the Standards since June 10, 2019.
④On May 16, 2019, the MOF issued the Accounting Standards for Enterprises No. 12–Debt Restructuring (CK
[2019] No. 9). According to the requirements, the Company has made adjustment for the debt restructuring incurred
from January 1, 2019 to the implementation date according to the Standards, and has not made retroactive
adjustment for the debt restructuring incurred before January 1, 2019. The Company has implemented the Standards
since June 17, 2019.
The cumulative impact of the above-mentioned accounting policies is as follows:
Unit: RMB
Item Consolidated statement Parent statement
December 31,2018 January 1, 2019 December 31,2018 January 1, 2019
764,901,999.22 — 97,520,342.97 —
Notes receivable and
accounts receivable
— 40,318,407.59 — 700,000.00
Notes receivable
— 724,583,591.63 — 96,820,342.97
Accounts receivable
— 450,000,000.00 — 50,000,000.00
Held-for-trading financial
assets
486,849,976.13 36,849,976.13 54,634,672.85 4,634,672.85
Other current assets
240,057.98 — — —
Available-for-sale financial
assets
— 140,057.98 — —
Held-for-trading financial
assets
— 100,000.00 — —
Other equity instrument
investment
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52,048,994.98 — 23,630,397.14 —
Notes payable and accounts
payable
— — — —
Notes payable
— 52,048,994.98 — 23,630,397.14
Accounts payable
2. Significant changes in accounting estimates
During the reporting period, the Company did not make any significant change in accounting estimate.
3. First Implementation of new financial instrument standards and adjustment of relevant items in the
financial statements at the beginning of the year of first implementation
Consolidated Balance Sheet
Unit: RMB
Item December 31, 2018 January 1, 2019 Adjustment
Current assets:
Cash and cash equivalents 1,189,754,162.14 1,189,754,162.14 —
Held-for-trading financial assets — 450,140,057.98 450,140,057.98
Notes receivable 40,318,407.59 40,318,407.59 —
Accounts receivable 724,583,591.63 724,583,591.63
Advances to suppliers 552,797,861.17 552,797,861.17
Other receivables 59,849,623.62 59,849,623.62
Including: Interests receivable — — —
Dividends receivable — — —
Inventories 3,361,669.70 3,361,669.70 —
Other current assets 486,849,976.13 36,849,976.13 -450,000,000.00
Total current assets 3,057,515,291.98 3,057,655,349.96 140,057.98
Non-current assets:
Available-for-sale financial assets 240,057.98 N/A -240,057.98
Long-term equity investments 14,230,858.19 14,230,858.19 —
Other equity instrument investment N/A 100,000.00 100,000.00
Fixed assets 3,021,813.45 3,021,813.45 —
Intangible assets 562,683,064.77 562,683,064.77 —
Goodwill 889,770,009.82 889,770,009.82 —
Long-term deferred expense 109,113.12 109,113.12 —
Deferred tax assets 6,679,125.79 6,679,125.79 —
Other non-current assets 14,999,379.61 14,999,379.61 —
Total non-current assets 1,491,733,422.73 1,491,593,364.75 -140,057.98
Total assets 4,549,248,714.71 4,549,248,714.71 —
Current liabilities:
Short-term borrowings 70,360,000.00 70,360,000.00 —
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Accounts payable 52,048,994.98 52,048,994.98 —
Advance from customer 369,750,631.85 369,750,631.85 —
Payroll payable 28,396,002.54 28,396,002.54 —
Taxes payable 66,445,511.72 66,445,511.72 —
Other payables 167,238,218.29 167,238,218.29 —
Including: Interests payable 150,492.26 150,492.26 —
Dividends payable — — —
Other current liabilities 30,106,369.18 30,106,369.18 —
Total current liabilities 784,345,728.56 784,345,728.56 —
Non-current liabilities:
Deferred income tax liabilities 634,200.00 634,200.00 —
Total non-current liabilities 634,200.00 634,200.00 —
Total liabilities 784,979,928.56 784,979,928.56 —
Owner's equity (or shareholder’s equity):
Paid-up capital (or share capital) 417,326,994.00 417,326,994.00 —
Capital reserves 1,480,832,771.89 1,480,832,771.89 —
Less: treasury stock 67,590,687.09 67,590,687.09 —
Surplus reserves 131,720,855.52 131,720,855.52 —
Undistributed Profits 1,776,292,224.02 1,776,292,224.02 —
Total owner’s equity attributable to parent 3,738,582,158.34 3,738,582,158.34 —
company
Minority equity 25,686,627.81 25,686,627.81 —
Total owner's equity (or shareholder’s equity) 3,764,268,786.15 3,764,268,786.15 —
Total liabilities and owner's equity (or 4,549,248,714.71 4,549,248,714.71 —
shareholders' equity)
Parent Company Balance Sheet
Unit: RMB
Item December 31,2018 January 1, 2019 Adjustment
Current assets:
Cash and cash equivalents 546,501,650.58 546,501,650.58 —
Held-for-trading financial assets — 50,000,000.00 50,000,000.00
Notes receivable 700,000.00 700,000.00 —
Accounts receivable 96,820,342.97 96,820,342.97 —
Advances to suppliers 349,364.99 349,364.99 —
Other receivables 32,667,995.54 32,667,995.54 —
Including: Interests receivable — — —
Dividends receivable — — —
Inventories 441,903.73 441,903.73 —
Other current assets 54,634,672.85 4,634,672.85 -50,000,000.00
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Total current assets 732,115,930.66 732,115,930.66 —
Non-current assets:
Long-term equity investments 3,938,050,533.14 3,938,050,533.14 —
Fixed assets 34,734.60 34,734.60 —
Intangible assets 101,189.01 101,189.01 —
Other non-current assets 14,684,511.69 14,684,511.69 —
Total non-current assets 3,952,870,968.44 3,952,870,968.44 —
Total assets 4,684,986,899.10 4,684,986,899.10 —
Current liabilities:
Account payable 23,630,397.14 23,630,397.14 —
Advance from customer 28,401,099.61 28,401,099.61 —
Payroll payable 7,552,651.67 7,552,651.67 —
Taxes payable 149,514.97 149,514.97 —
Other payables 115,799,734.66 115,799,734.66 —
Including: Interests payable — — —
Dividends payable — — —
Total current liabilities 175,533,398.05 175,533,398.05 —
Total liabilities 175,533,398.05 175,533,398.05 —
Owner's equity (or shareholder’s equity):
Paid-up capital (or share capital) 2,454,870,403.00 2,454,870,403.00 —
Capital reserves 1,860,926,915.10 1,860,926,915.10 —
Less: treasury stock 67,590,687.09 67,590,687.09 —
Surplus reserves 75,063,622.20 75,063,622.20 —
Undistributed Profits 186,183,247.84 186,183,247.84 —
Total owner's equity (or shareholder’s equity) 4,509,453,501.05 4,509,453,501.05 —
Total liabilities and owner's equity (or 4,684,986,899.10 4,684,986,899.10 —
shareholders' equity)
VII. Retrospective Restatement due to Correction of Significant Accounting Errors in the
Reporting Period
□ Applicable (A) √ Not applicable (N/A)
There's no correction of significant accounting errors requiring retrospective restatement during the reporting period.
VIII. Changes in Consolidation Scope When Compared to the Previous Financial Year
√ Applicable (A) □ Not applicable (N/A)
1. Business combination not under common control: none
2. Business combination under common control: none
3. Disposal of subsidiaries: none
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4. Change of consolidated scope caused by other reasons
1) Establishment of subsidiaries
①Cartelo Crocodile Kale (Shanghai) Trading Co., Ltd. was a newly established subsidiary, invested by the
Company's subsidiary Nanji E-commerce (Shanghai) Co., Ltd. in January 2019, with the registered capital of RMB
30 million, and the equity held by the Company accounted for 86.67%. The registered capital of RMB 26 million
was paid as of December 31, 2019.
② Shanghai Aosang Cultural Communication Co., Ltd. was a newly established subsidiary, invested by the
Company's subsidiary Nanji E-commerce (Shanghai) Co., Ltd. in January 2019, with the registered capital of RMB
10 million, and the equity held by the Company accounted for 96%. As of December 31, 2019, no capital was
contributed.
③Xinjiang Jingshang E-commerce Co., Ltd. was a newly established subsidiary, invested by the Company in
November 2019, with the registered capital of RMB 10 million, and the equity held by the Company accounted for
100%. The registered capital of RMB 100,000 was paid as of December 31, 2019.
④Xinjiang Yuduocheng E-commerce Co., Ltd. was a newly established subsidiary, invested by the Company in
November 2019, with the registered capital of RMB 10 million, and the equity held by the Company accounted for
100%. The registered capital of RMB 100,000 was paid as of December 31, 2019.
2) Liquidation of subsidiaries
①Shanghai Shuimishang Culture Communication Co., Ltd. has completed the liquidation and cancellation in July
2019 and has finished the industrial and commercial change procedures.
②Shanghai Aosang Cultural Communication Co., Ltd. has completed the liquidation and cancellation in September
2019 and has finished the industrial and commercial change procedures.
IX. Appointment or Dismissal of Accounting Firm
Accounting firm engaged at present
Name of domestic accounting firm RSM China CPA LLP
Fee for domestic accounting firm (in RMB 10,000) 135
Consecutive years for domestic accounting firm to provide audit
15
service
Name of CPA of the domestic accounting firm CHU Shiwei and KONG Lingli
Consecutive years for CPA of domestic accounting firm to
3 years, 1 year
provide audit service
Name of foreign accounting firm (if any) N/A
Consecutive years for foreign accounting firm to provide audit
N/A
service (if any)
Name of CPA of the foreign accounting firm (if any) N/A
Consecutive years for CPA of foreign accounting firm to provide
N/A
audit service (if any)
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Did the accounting firm change during the reporting period?
□ Yes √ No
Employment of auditor of internal controls, financial advisor or sponsor
□ Applicable (A) √ Not applicable (N/A)
X. Listing Suspension or Termination after the Disclosure of Annual Report
□ Applicable (A) √ Not applicable (N/A)
XI. Bankruptcy Reorganization
□ Applicable (A) √ Not applicable (N/A)
The Company had no bankruptcy reorganization during the reporting period.
XII. Major Litigation or Arbitration
□ Applicable (A) √ Not applicable (N/A)
The Company had no major litigation or arbitration during the reporting period.
XIII. Punishment or Rectification
□ Applicable (A) √ Not applicable (N/A)
No such case during the reporting period.
XIV. Integrity of the Company, its Controlling Shareholders, and Actual Controller
√ Applicable (A) □ Not applicable (N/A)
The Company and its controlling shareholder and actual controller did not fail to carry out the valid court decision, and did not have
any outstanding matured debt with large amount.
XV. Execution of Stock Incentive Plan, ESOP, or Other Employee Incentives
√ Applicable (A) □ Not applicable (N/A)
1. Employee Stock Ownership Plan II in 2016 (the “ESOP II”)
ESOP II: For details, see NJDS Employee Stock Ownership Plan II (Draft) and its summary, and NJDS Employee
Stock Ownership Plan II (Revised Draft) and its summary which were disclosed on August 15, 2016, January 25,
2017, May 26, 2017, June 6, 2017, July 13, 2017 respectively on www.cninfo.com.cn.
2. Stock Option Incentive Plan in 2019 (the “2019 SOIP”)
1) On September 25, 2019, the Company held the 16th Meeting of the 6th Board of Directors, during which the
Company’s Proposal on 2019’s Stock Option Incentive Plan (Draft) and Its Summary, the Company’s Proposal on
Performance Assessment Management Measures for Implementation of 2019’s Stock Options Incentive Plan and
the Proposal on Submitting to the Meeting of Shareholders for Empowering the Board of Directors to Handle
Matters Concerning Stock Options Incentive were reviewed and approved. The Company's independent directors
have presented independent opinions indicating their approval on matters related to the 2019 SOIP. In the2019 SOIP,
the Company plans to grant 16.9569 million stock options to incentive objects with 13.7472 million stock options
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to be granted to 124 persons for the first time, the strike price for the initial granting to be determined as RMB 6.7
per share and 3.2097 million stock options to be reserved.
2) The Company’s Proposal on 2019’s Stock Option Incentive Plan (Draft) and Its Summary, the Company’s
Proposal on Performance Assessment Management Measures for Implementation of 2019’s Stock Option Incentive
Plan and the Company’s Proposal on Verification of the Incentive Object List in 2019’s Stock Option Incentive Plan
were approved on the fourteenth meeting of the Sixth Board of Supervisors of the Company held on September 25,
2019. During this meeting, the Board of Supervisors reviewed and approved the list of incentive objects and
presented their opinions on the review and verification.
3) The names and titles of the incentive objects were noticed publicly within the Company from September 26 to
October 8, 2019 during which no objection in connection with the incentive objects under the 2019 SOIP was
received by the Company's Board of Supervisors. On October 10, 2019, the Company's Board of Supervisors
published the Board of Supervisors' Statement for the Review Opinions and Disclosure Results of the Incentive
Object List under the Company's 2019 Stock Option Incentive Plan.
4) During the Company's Second Extraordinary General Meeting in 2019 held on October 14, 2019, the Company’s
Proposal on the 2019 Stock Option Incentive Plan (Draft) and Its Summary, the Company’s Proposal on
Performance Assessment Management Measures for Implementation of the 2019 Stock Option Incentive Plan and
the Proposal on Submission of Empowering the Board of Directors to Handle Matters Concerning the Stock Option
Incentive to the General Meeting of Stockholders were reviewed and approved, and the Internal Inspection Report
on the Status of Purchase and Sales of the Company's Stocks Conducted by Holders of the Inside Information of the
2019 Stock Option Incentive Plan was disclosed.
5) On November 13, 2019, the Proposal on Adjusting the List of Incentive Objects and Number of Stock Options to
Be Granted under the 2019 Stock Option Incentive Plan and the Proposal on Granting Stock Option to Incentive
Objects for the First Time were reviewed and approved on the Eighteenth Meeting of the Sixth Board of Directors
and the Seventh Meeting of the Sixth Board of Supervisors held by the Company. The Company's independent
directors presented independent opinions indicating their approval, which stated that the conditions for granting
specified in the 2019 SOIP had been realized, the qualification of the objects to be granted with the incentive was
legitimate and effective and the determined Initial Granting Date conformed with relevant regulations. Since one
incentive object was no longer qualified to be an incentive object due to his voluntary resign for personal reasons
and another incentive object voluntarily waived all the stock options to be granted by the Company for personal
reasons, the quantity of the stock options to be granted for the first time under the 2019 Stock Option Incentive Plan
was adjusted from 13.7472 million to 13.5972 million and the number of the inventive objects was adjusted from
124 to 122 with the quantity of reserved stock option of 3,2097 million as unchanged. November 13, 2019 was
decided by the Company as the initial date for granting stock option at this time on which 122 incentive objects
were granted with 13.5972 million stock options with the strike price for the options to be granted being set as RMB
6.70/share. The date for granting the reserved 3.2097 million stock options will be determined by the Board of
Directors separately.
6) As of November 29, 2019, the registration of the initial granting under the 2019 Stock Option Incentive Plan had
been completed by the Company.
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XVI. Significant Related-Party Transactions
1. Related-party transactions relevant to routine operations
□ Applicable (A) √ Not applicable (N/A)
No such case during the reporting period.
2. Related-party transactions arising from purchase and sale of assets or equities
□ Applicable (A) √ Not applicable (N/A)
No such case during the reporting period.
3. Related-party transactions with joint investments
□ Applicable (A) √ Not applicable (N/A)
No such case during the reporting period.
4. Credits and liabilities with related parties
□ Applicable (A) √ Not applicable (N/A)
No such case during the reporting period.
5. Other significant related-party transactions
□ Applicable (A) √ Not applicable (N/A)
No other significant related-party transactions occurred during the reporting period.
XVII. Material Contracts and Their Execution
1. Status of entrustment, contracting and leases
1) Entrustment
□ Applicable (A) √ Not applicable (N/A)
No entrustment occurred during the reporting period.
2) Contracting
□ Applicable (A) √ Not applicable (N/A)
No contracting matter occurred during the reporting period.
3) Leases
□ Applicable (A) √ Not applicable (N/A)
No leases occurred during the reporting period.
2. Material Guarantees
√ Applicable (A) □ Not applicable (N/A)
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1) Guarantees
(Unit: RMB 10,000)
Guarantees from the Company and its subsidiaries (excluding the guarantees for subsidiaries) to external parties
Disclosure
Guarante
date of Maximum Actual
Actual Guarantee Guarantee Complete e for a
Guarantee party relevant guaranteed guaranteed
occurrence date type period d or not related
announcem amount amount
party?
ent
Guarantees from the Company to its subsidiaries
Disclosure
Guarante
date of Maximum Actual
Actual Guarantee Guarantee Complete e for a
Guarantee party relevant guaranteed guaranteed
occurrence date type period d or not related
announcem amount amount
party?
ent
From the date
of signing the
main contract
for single
loan to two
years after
Xinjiang Henri Jayer April 23, Joint liability
5,000 June 29, 2018 5,000 the period for Yes No
Technology Co., Ltd. 2018 guarantee
debtor's
performance
of debts
under the
main contract
expires
From the date
of signing the
main contract
for single
loan to two
years after
Beijing Henri Jayer January 14, Joint liability
5,000 February 3, 2019 5,000 the period for Yes No
Technology Co., Ltd 2019 guarantee
debtor's
performance
of debts
under the
main contract
expires
Xinjiang Henri Jayer June 29, Joint liability From the date
5,000 July 1, 2019 5,000 No
Technology Co., Ltd. 2019 guarantee of signing the No
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main contract
for single
loan to two
years after
the period for
debtor's
performance
of debts
under the
main contract
expires
From the date
of signing the
main contract
for single
loan to two
years after
Beijing Henri Jayer December December 25, Joint liability
10,000 5,000 the period for No No
Technology Co., Ltd 23, 2019 2019 guarantee
debtor's
performance
of debts
under the
main contract
expires
Total actual guaranteed
Total maximum guaranteed amount
amount for subsidiaries
approved for subsidiaries during the 20,000 15,000
during the reporting period
reporting period (B1)
(B2)
Total actual guarantee
Total maximum guaranteed amount
balance for subsidiaries at
approved for the subsidiaries at the 15,000 10,000
the end of the reporting
end of the reporting period (B3)
period (B4)
Guarantees provided by subsidiaries to subsidiaries
Disclosure
Guarante
date of Maximum Actual
Actual Guarantee Guarantee Complete e for a
Guarantee party relevant guaranteed guaranteed
occurrence date type period d or not related
announcem amount amount
party?
ent
From the date
Xinjiang Henri Jayer November 12, Joint liability of signing the
2,036 2,036 Yes No
Technology Co., Ltd. 2018 guarantee main contract
for single
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loan to two
years after
the period for
debtor's
performance
of debts
under the
main contract
expires
From the date
of signing the
main contract
for single
loan to two
years after
Xinjiang Henri Jayer Joint liability
5,000 July 1, 2019 5,000 the period for No No
Technology Co., Ltd. guarantee
debtor's
performance
of debts
under the
main contract
expires
Total actual guaranteed
Total maximum guaranteed amount
amount for subsidiaries
approved for subsidiaries during the 5,000 5,000
during the reporting period
reporting period (C1)
(C2)
Total actual guarantee
Total maximum guaranteed amount
balance for subsidiaries at
approved for the subsidiaries at the 5,000 5,000
the end of the reporting
end of the reporting period (C3)
period (C4)
Total guaranteed amount provided by the Company (the total of the above three mentioned guarantees)
Total maximum guaranteed amount Total actual guaranteed
approved during the reporting 25,000 amount during the reporting 20,000
period(A1+B1+C1) period (A2+B2+C2)
Total actual guarantee
Total maximum guaranteed amount
balance at the end of the
approved at the end of the reporting 20,000 15,000
reporting
period (A3+B3+C3)
period(A4+B4+C4)
The ratio of total actual guaranteed amount (A4+B4+C4) to the
3.09%
Company's net asset
Wherein:
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Detail of compound guarantee:
The Company’s subsidiary Xinjiang Henri Jayer obtained a short-term loan of RMB 50 million from the Shanghai
Branch of Xiamen International Bank, and the Company and its subsidiary (Timelink) provided joint and several
liability guarantee for Xinjiang Henri Jayer.
(2) Illegal provision of guarantees for external parties
□ Applicable (A) √ Not applicable (N/A)
No such cases during the reporting period.
3. Cash assets managed under trust
(1) Entrusted wealth management
√ Applicable (A) □ Not applicable (N/A)
Entrusted wealth management during the reporting period
(Unit: RMB 10,000)
Amount occurred in
Overdue outstanding
Type Source for entrusted funds entrusted wealth Undue balance
amount
management
Products from banks Self-owned fund 149,000 149,000 0
Products from trust
Self-owned fund 5,000 0 0
companies
Total 154,000 149,000 0
Details of wealth management products with significant amount of a single product or high-risk wealth management
products with low safety, poor liquidity, and without capital preservation.
□ Applicable (A) √ Not applicable (N/A)
The entrusted product is expected to fail to recover the principal, or there may be other circumstances that may
result in impairment.
□ Applicable (A) √ Not applicable (N/A)
(2) Entrusted loan
□ Applicable (A) √ Not applicable (N/A)
No entrusted loan occurred during the reporting period.
4. Other material contracts
□ Applicable (A) √ Not applicable (N/A)
No such cases during the reporting period.
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XVIII. Social Responsibilities
1. Performance of social responsibility
Since the establishment, the Company has been adhering to the mission "helping China's high-quality supply chain
to achieve continuous success, and providing high cost-performance products and services to Chinese families",
emphasizing and enhancing the corporate culture development and actively performing its corporate social
responsibilities. While pursuing economic efficiency and protecting shareholders' benefits, the Company actively
safeguards the legal rights and interests of its creditors and employees, treats its suppliers and clients with integrity,
and creates harmonious development environment for corporate development in an active manner.
1) Protecting interests of shareholders and creditors
The Company regulates the procedure for calling and convening the general meetings of shareholders and voting
on the meetings in strict compliance with the regulations and requirements of the Articles of Association and the
Rules of Procedures for the General Meeting of Shareholders and adopts effective methods such as network voting
for more minor shareholders to participate in the general meetings of shareholders so as to ensure that they can
enjoy the rights to know, participate and vote when there is a significant matter in the Company; besides, the
Company actively performs its information disclosure obligations by disclosing information in a truthful, accurate,
timely, complete and impartial manner and upholds the principle of fairness, justice and openness when dealing
with all investors to safeguard the legitimate rights and interests of all shareholders.
The Company fully respects the creditors' rights to know significant information related to their creditor's interests
and attaches great importance to the legitimate interests of the creditors. During the process of decision making for
its operation, the Company strictly adheres to relevant contracts and rules, keeps creditors informed of significant
information related to creditor's interests in a timely manner and provides cooperation and support for creditors to
get to know the Company's conditions such as related operation and management.
2) Protecting interests of employees
The Company upholds the human-oriented philosophy, attaches importance to the humanistic care to its employees,
and establishes a complete human resource management system in accordance with the laws and regulations such
as Labor Law and Labor Contract Law. The Company takes the happiness of its employees and their family
members as the basis for its endeavor, focuses on employees' health, safety and satisfaction from a practical point
of view and takes joint efforts to safeguard and guarantee the legitimate interests of employees so as to create a
sound environment for employees' occupational development.
The Company organizes its employees to take physical examinations on a regular basis and provides employees
with funds to participate in team-building activities organized by corresponding departments on a yearly basis.
Meanwhile, the Company sets up a care plan named as "Embrace of Love" for its employees. In 2019, the Company
initiated Filial Piety Foundation to offer concern and care to employees' family members and also organized a
program named as "Arrival of Queens" on the Women's Day to offer concern and care to female employees.
The Company actively organizes a series of activities such as new employees training, internal lecturer’s training,
multiple kinds of internal training, PPT skills training and fire protection knowledge lectures so as to improve
employees' development of occupational qualities; besides, the Company also insists on carrying out rich and
colorful cultural activities to enhance a constructive interaction with its employees and strengthen employees'
cohesiveness. During the year of 2019, cultural activities such as "contending for hegemony and challenging the
limit" and the annual party show were held through which the employees' cultural life after work was further
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enriched, their physical and mental health was further improved and their working pressure was further relieved.
In the same year, a scientific and complete human resources policy was developed. By virtue of a bright industrial
development prospect, a diversified talent motivation development mechanism, a broad space for career
development and a sound environment for employees' growth, the Company has become a place attracting a lot of
talents. While aiming to achieve the strategic goal and vision for its corporate development, the Company has been
also working to realize the life value and dream of each employee.
3) Protecting interests of supplier, client and consumer
The Company is always honest and trustworthy to its end consumers, clients and suppliers. It has never obtained
improper benefits via advertisements with false announcements and never infringed the copyright, trademark right,
patent right and other intellectual property rights of its clients and suppliers. The Company has won the national
enterprise title of "honoring contracts and keeping promises" for two successive years and obtained the certificate
of Intellectual Property Management System Certification and the title of “professional, special and new” enterprise
in Shanghai. In addition, it has also become the technological center of Qingpu District of Shanghai. Furthermore,
the Company has been a benchmark enterprise in electronic commerce in Shanghai in 2018 and 2019 for two
successive years.
The Company has been adhering to take quality management as the core and conducting strict monitoring on the
quality of products by methods such as sampling inspection and in-process inspection carried by the Company itself,
sampling inspection by the third-party quality inspection organizations, and sampling inspection by the E-commerce
platforms, so as to provide consumers with high-quality products and protect their benefits. Meanwhile, the
Company has been also paying attention to communication and cooperation with the licensed suppliers and
distributors to achieve mutual benefits and win-win outcomes.
4) Undertaking public relation and social welfare
The Company has been actively undertaking its corporate social responsibilities, strictly performing its taxpayer's
obligations and paying tax in accordance with the law while focusing on social development and fulfilling its social
responsibilities. During the reporting period, the Company has been continuously playing a positive role in the care
plan "Embrace of Love" to help its employees solve practical problems, incorporate caring and thanksgiving culture
into its corporate operation and strengthen regular communication and interaction with government institutions
through which a sound and harmonious relationship with them has been established.
2. Performance of targeted poverty alleviation program
During the reporting period, the Company did not carry out any targeted poverty alleviation program and there is
no follow-up plan.
3. Environmental protection
Did the listed Company and its subsidiaries belong to the major pollutant discharge units announced by the
environmental protection authorities?
□ Applicable (A) √ Not applicable (N/A)
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XIX. Other significant matters
□ Applicable (A) √ Not applicable (N/A)
There were no other significant matters required to be disclosed during the reporting period.
XX. Significant Matters of Subsidiaries
□ Applicable (A) √ Not applicable (N/A)
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Section 06 Changes in Shares and Information of Shareholders
I. Changes in Shares
1. Changes in shares
Unit: shares
Before the change Increase and decrease (+, -) After the change
Shares
New converted
Dividend
Quantity Proportion share from Others Subtotal Quantity Proportion
shares
issued capital
reserve
I. Shares with sales - -
975,038,627 39.72% 558,642,476 22.76%
restriction 416,396,151 416,396,151
3. Shares held by other - -
975,038,627 39.72% 558,642,476 22.76%
domestic entities 416,396,151 416,396,151
Wherein: Shares held by - -
177,635,773 7.24% 7,979,128 0.32%
domestic institutions 169,656,645 169,656,645
Shares held by domestic - -
797,402,854 32.48% 550,663,348 22.44%
individuals 246,739,506 246,739,506
II. Shares without sales
1,479,831,776 60.28% 416,396,151 416,396,151 1,896,227,927 77.24%
restriction
1. RMB-denominated
1,479,831,776 60.28% 416,396,151 416,396,151 1,896,227,927 77.24%
ordinary shares
III. Total shares 2,454,870,403 100.00% 0 0 2,454,870,403 100.00%
Reasons for changes in shares
√ Applicable (A) □ Not applicable (N/A)
1) 75% of the shares held by the Company's directors, supervisors and senior executives at the end of the previous
year shall be locked as the locked shares of senior executives each year since the date they take office;
2) A total of 855,158,265 shares of the listed company that were subscribed by ZHANG Yuxiang, ZHU Xuelian,
Fengnan Investment and the Sunny Special Private Fund No. 1, No. 2 and No. 3 managed by Sunny Loantop
(Zhejiang) Investment Co. Ltd. when the Company issued shares to the aforesaid transaction counterparties to
purchase assets in 2015, and converted from capital reserve in 2016 and 2018 respectively, were released from
restriction on January 20, 2019 (for details, please see the Indicative Announcement on Termination of the
Restriction on Restricted Shares published by the Company on Securities Times on www.cninfo.com.cn on January
17, 2019);
3) 30% of the 103,787,693 shares of the listed company that were subscribed by LIU Rui, GE Nan, YU Hanqing,
CHEN Jun and ZHANG Ming when the Company issued shares to the aforesaid transaction counterparties to
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purchase assets in 2017,and converted from the capital reserve in 2106 and 2018 respectively, was supposed to be
released from restriction on May 9, 2019 as per the share lock-up commitment (for details, please see the Indicative
Announcement on Termination of the Restriction on Restricted Shares published by the Company on Securities
Times and www.cninfo.com.cn on May 8, 2019).
Approval for share changes
□ Applicable (A) √ Not applicable (N/A)
Transfer of share ownership
□ Applicable (A) √ Not applicable (N/A)
Execution of share repurchase
√ Applicable (A) □ Not applicable (N/A)
The Proposal on Repurchase of the Company's Shares for Employee Incentives was reviewed and approved through
the Sixth Meeting of the Sixth Board of Directors and the 2018’s Fifth Extraordinary General Meeting of
Shareholders held by the Company on September 18, 2018 and October 8, 2018, respectively. According to the
Proposal, consent was given to the Company to use its self-owned funds to buy back some shares of the Company
by centralized bidding, block trading and other means permitted by laws and regulations for subsequent stock
incentive or employee stock ownership plan. The total repurchase amount shall be no less than RMB 150 million
and no greater than RMB 300 million (inclusive), the repurchase price shall be no greater than RMB 11/share
(inclusive), and the repurchase period shall not exceed 12 months from the date when the share repurchase plan was
reviewed and approved by the general meeting of shareholders. For details, please see 2018-115 Share Repurchase
Report.
The period for the aforesaid repurchase of the Company's shares expired as of October 7, 2019. The cumulative
number of shares repurchased by the Company through special securities account for share repurchase by
centralized competitive bidding is 16,956,927, accounting for 0.69% of the Company's total shares, where the
maximum transaction price is RMB 10.989/share, the minimum transaction price is RMB 6.895/share and the total
amount paid is RMB 151,655,831.53 (excluding the transaction expenses).
During the reporting period, a total of 7,919,850 shares have been repurchased by the Company through special
securities account for share repurchase by centralized competitive bidding, accounting for 0.32% of the Company's
total shares, where the maximum transaction price is RMB 10.989/share, the minimum transaction price is RMB
7.200/share, and the total amount paid is RMB 84,058,578.41 (excluding the transaction expenses).
Execution of sale of repurchased shares by centralized competitive bidding
□ Applicable (A) √ Not applicable (N/A)
Effect of changes in shares on the basic EPS, diluted EPS, net assets per share attributable to ordinary shareholders
of the Company, and other financial indicators over the last year and the last reporting period
□ Applicable (A) √ Not applicable (N/A)
Other contents deemed necessary by the Company or required by the securities regulatory authorities to be disclosed
□ Applicable (A) √ Not applicable (N/A)
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2. Changes in restricted shares
√ Applicable (A) □ Not applicable (N/A)
Unit: shares
Number of Number of
Number of
restricted Number of restricted restricted
Name of restricted shares Reason for Date of restriction
shares at the shares released in shares at the
shareholder increased in the restriction removal
beginning of the period end of the
period
the period period
617,894,673 shares
were released from
restriction on January
20, 2019; 35,714,284
Restriction
shares will be released
due to
from restriction on
private
November 9, 2020;
placement;
ZHANG Yuxiang 654,576,856 454,492,434 617,894,673 491,174,617 Locked shares of senior
Restriction
executives shall be
due to
subject to the restriction
senior
regulations for
executive
directors, supervisors
and senior executives
during their tenure of
office.
Shanghai Restriction
Fengnan due to
75,118,830 0 75,118,830 0 January 20, 2019
Investment private
Center LLP placement
Restriction
due to
ZHU Xuelian 67,606,947 0 67,606,947 0 January 20, 2019
private
placement
Restriction
due to
NJDS ESOP II 7,979,128 0 0 797,912 November 9, 2020
private
placement
Restriction The restriction will be
due to removed by stages in
private accordance with the
LIU Rui 38,514,964 15,405,985 15,405,985 38,514,964 placement; share lock-up
Restriction commitment; Locked
due to shares of senior
senior executives shall be
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executive subject to the restriction
regulations for
directors, supervisors
and senior executives
during their tenure of
office.
The restriction will be
Restriction
removed by stages in
due to
GE Nan 26,487,485 0 11,351,779 15,135,706 accordance with the
private
share lock-up
placement
commitment
Sunny Loantop
(Zhejiang) Restriction
Investment Co. due to
31,512,606 0 31,512,606 0 January 20, 2019
Ltd. - Sunny private
Special Private placement
Fund No. 1
Sunny Loantop
(Zhejiang) Restriction
Investment Co. due to
31,512,606 0 31,512,606 0 January 20, 2019
Ltd. - Sunny private
Special Private placement
Fund No. 2
Sunny Loantop
(Zhejiang) Restriction
Investment Co. due to
31,512,603 0 31,512,603 0 January 20, 2019
Ltd. - Sunny private
Special Private placement
Fund No. 3
The restriction will be
Restriction
removed by stages in
due to
YU Hanqing 3,783,927 0 1,621,682 2,162,245 accordance with the
private
share lock-up
placement
commitment
The restriction will be
Restriction
removed by stages in
due to
CHEN Jun 3,405,534 0 1,459,514 1,946,020 accordance with the
private
share locking-up
placement
commitment
Restriction The restriction will be
ZHANG Ming 3,027,141 0 1,297,345 1,729,796 due to removed by stages in
private accordance with the
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placement share locking-up
commitment
Total 975,038,627 469,898,419 886,294,570 551,461,260 -- --
II. Issuance and Listing of Securities
1. Issuance of securities (excluding preferred shares) during the reporting period
□ Applicable (A) √ Not applicable (N/A)
2. Descriptions for changes in the Company’s total shares, shareholding structure, asset-liability structure
√ Applicable (A) □ Not applicable (N/A)
1) On September 25, 2019, the Company held the 16th Session of the 6th Board Meeting on which the Company’s
Proposal on 2019 Stock Option Incentive Plan (Draft) and Its Summary, the Company’s Proposal on Management
Measures for Implementation and Performance Assessment of 2019 Stock Option Incentive Plan and the Company’s
Proposal on Submitting to the Meeting of Shareholders for Empowering the Board of Directors to Handle Matters
Concerning Stock Option Incentive were reviewed and approved. The Company's independent directors have
presented independent opinions indicating their approval on matters related to the incentive plan. In the 2019 SOIP,
the Company planned to grant 16.9569 million stock options to incentive objects with 13.7472 million options to
be granted to 124 persons for the first time, the strike price for the initial granting to be determined as RMB 6.7 and
3.2097 million stock options to be reserved.
2) The Company’s Proposal on 2019 Stock Options Incentive Plan (Draft) and Its Summary, the Company’s
Proposal on Performance Assessment Management Measures for Implementation of the 2019 Stock Options
Incentive Plan and the Company’s Proposal on Verification of the Incentive Object List in the 2019 Stock Options
Incentive Plan were passed on the 16th Meeting of the 6th Board of Supervisors of the Company on September 25,
2019. During this meeting, the Board of Supervisors reviewed and approved the list of incentive objects and
presented their opinions on the review and verification.
3) The names and titles of the incentive objects were noticed publicly within the Company from September 26 to
October 8, 2019 during which no objection in connection with the incentive objects under the 2019 SOIP was
received by the Company's Board of Supervisors. On October 10, 2019, the Company's Board of Supervisors
published the Board of Supervisors' Statement for the Review Opinions and Disclosure Results of the Incentive
Object List under the Company's 2019 Stock Options Incentive Plan.
4) During the Company's Second Extraordinary General Meeting in 2019 held on October 14, 2019, the Company’s
Proposal on the 2019 Stock Option Incentive Plan (Draft) and Its Summary, the Company’s Proposal on
Performance Assessment Management Measures for Implementation of the 2019 Stock Option Incentive Plan and
the Proposal on Submission of Empowering the Board of Directors to Handle Matters Concerning the Stock Option
Incentive to the General Meeting of Stockholders were reviewed and approved, and the Internal Inspection Report
on the Status of Purchase and Sales of the Company's Stocks Conducted by Holders of the Inside Information of the
2019 Stock Option Incentive Plan was disclosed.
5) On November 13, 2019, the Proposal on Adjusting the List of Incentive Objects and Number of Stock Options to
Be Granted under the 2019 Stock Options Incentive Plan and the Proposal on Granting Stock Options to Incentive
Objects for the First Time were reviewed and approved on the 18th Meeting of the 6th Board of Directors and the
17th Meeting of the 6th Board of Supervisors held by the Company. The Company's independent directors presented
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independent opinions indicating their approval, which stated that the conditions for granting specified in the 2019
SOIP had been met, the qualification of the object entities to be granted with the incentive was legitimate and
effective and the determined Initial Granting Date conformed with relevant regulations. Since one incentive object
was no longer qualified to be an incentive object due to his voluntary resign for personal reasons and another
incentive object voluntarily waived all the stock options to be granted by the Company for personal reasons, the
quantity of the stock options to be granted for the first time under the 2019 Stock Options Incentive Plan was
adjusted from 13.7472 million to 13.5972 million and the number of the inventive objects was adjusted from 124
to 122 with the quantity of reserved stock options of 3,2097 million as unchanged. November 13, 2019 was decided
by the Company as the initial date for granting stock options, at this time 122 incentive objects were granted with
13.5972 million stock options with the strike price for the options to be granted being set as RMB 6.7. The date for
granting the reserved 3.2097 million stock options will be determined by the Board of Directors separately.
6) As of November 29, 2019, the registration of the initial granting under the 2019 Stock Options Incentive Plan
had been completed by the Company.
3. Existing shares held by internal employees
√ Applicable (A) □ Not applicable (N/A)
Issuing date of the shares held by Issuing price of the shares held by internal Issuing quantity of the shares held by
internal employees employees (RMB/share) internal employees (share)
November 9, 2017 13.44 29,128,942
III. Details of Shareholders and Actual Controllers
1. Number of shareholders and their holdings
Unit: shares
Total number
of preferred
Total number
Total number shareholders
of preferred
of common with voting
Total number shareholders
shareholders at rights
of common with voting
the end of the recovered at
shareholders at rights
20,547 last month 18,411 0 the end of the 0
the end of the recovered at
before the last month
reporting end of
disclosure date before the
period reporting
of the annual disclosure date
period (if any)
report of the annual
(see Note 8)
report (if any)
(see Note 8)
Shares held by shareholders holding more than 5% of the total shares or the top 10 shareholders
Number Change Number Number Pledged or frozen shares
Sharehold
Name of Type of of shares during of shares of shares
ing
shareholder shareholder held at the held with held Status of shares Quantity
percentag
the end of reporting sales without
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e the period restriction sales
reporting s restriction
period s
-
Domestic natural 612,159,2 491,174,6 120,984,5
ZHANG Yuxiang 24.94% 42,740,27 Pledged 120,380,000
person 16 17 99
4
Wujiang Xinmin
Domestic non- -
Industrial 124,358,2 124,358,2
state-owned legal 5.07% 14,855,65
Investment Co., 66 66
person 5
Ltd.
Domestic natural 67,606,94 67,606,94
ZHU Xuelian 2.75% -
person 7 7
Hong Kong
Overseas legal 63,313,86 50,393,17 63,313,86
Securities Clearing 2.58%
person 93 9
Company Ltd.
ICBC - CUAM
Growth Focus 56,448,97 - 56,448,97
Others 2.30%
Hybrid Securities 9 6,379,221 9
Investment Fund
Shanghai Fengnan Domestic non- -
56,339,13 56,339,13
Investment Center state-owned legal 2.29% 18,779,70
0 0
LLP person 0
National Social
54,804,47 23,454,91 54,804,47
Security Fund 418 Others 2.23%
48 4
Portfolio
China Universal
Asset
Management Co., 42,000,09 22,000,09 42,000,09
Others 1.71%
Ltd. - Social 63 6
Security Fund 423
Portfolio
-
Domestic natural 38,515,22 38,514,96
LIU Rui 1.57% 12,838,06 259 Hypothecation 31,260,000
person 3 4
3
National Social
36,417,86 36,417,86 36,417,86
Security Fund 416 Others 1.48%
77 7
Portfolio
Strategic investor or general legal
person who becomes one of the top 10
N/A
shareholders due to the placement of
new shares (if any)
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Among the above shareholders, ZHANG Yuxiang and ZHU Xuelian are in a conjugal
Explanation of the associated relationship and are persons acting in concert with Shanghai Fengnan Investment Center LLP.
relationship or acting-in-concert The Company is not aware of any associated relationship among other shareholders or whether
relationship of the above shareholders they are persons acting in concert as stipulated under the Administrative Measures for the
Disclosure of Information on the Change of Shareholdings in Listed Companies.
Top 10 shareholders holding unrestricted shares
Number of unrestricted shares held at the end of the Share types
Name of shareholder
reporting period Share types Quantity
RMB-
Wujiang Xinmin Industrial Investment
124,358,266 denominated 124,358,266
Co., Ltd.
ordinary shares
RMB-
ZHU Xuelian 67,606,947 denominated 67,606,947
ordinary shares
RMB-
Hong Kong Securities Clearing
63,313,869 denominated 63,313,869
Company Ltd.
ordinary shares
RMB-
ICBC - CUAM Growth Focus Hybrid
56,448,979 denominated 56,448,979
Securities Investment Fund
ordinary shares
RMB-
Shanghai Fengnan Investment Center
56,339,130 denominated 56,339,130
LLP
ordinary shares
RMB-
National Social Security Fund 418
54,804,474 denominated 54,804,474
Portfolio
ordinary shares
China Universal Asset Management RMB-
Co., Ltd. - Social Security Fund 423 42,000,096 denominated 42,000,096
Portfolio ordinary shares
RMB-
National Social Security Fund 416
36,417,867 denominated 36,417,867
Portfolio
ordinary shares
ICBC - CUAM Blue Chip Stably RMB-
&Flexibly Allocated Hybrid Securities 34,435,017 denominated 34,435,017
Investment Fund ordinary shares
RMB-
JIANG Xueming 32,400,000 denominated 32,400,000
ordinary shares
Explanation of the associated Among the above shareholders, ZHU Xuelian is the person acting in concert with Shanghai
relationship or acting-in-concert Fengnan Investment Center LLP. The Company is not aware of any associated relationship
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relationship among the top 10 among other shareholders or whether they are persons acting in concert as stipulated under the
shareholders of unrestricted Administrative Measures for the Disclosure of Information on the Change of Shareholdings in
outstanding shares and between the Listed Companies.
top 10 shareholders of unrestricted
outstanding shares and the top 10
shareholders
Description of the top 10 ordinary
shareholders’ participation in margin N/A
trading (if any)
Did any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company
have any promissory repurchase transaction during the reporting period?
□ Yes √ No
No such cases during the reporting period.
2. Controlling shareholders of the Company
Nature of ultimate controlling shareholders: natural person
Type of controlling shareholders: natural person
Does he/she have any right of residence of other
Name of controlling shareholder Nationality
countries or regions?
ZHANG Yuxiang Chinese No
ZHU Xuelian Chinese No
Primary occupation and title Chairman and General Manager of the Company and spouse
Other domestic or foreign listed companies
controlled or participated during the reporting N/A
period
Change of controlling shareholders during the reporting period
□ Applicable (A) √ Not applicable (N/A)
No such cases in the reporting period.
3. Actual controllers and persons acting in concert of the Company
Nature of actual controllers: domestic natural person
Type of actual controllers: natural person
Does he/she have any right of
Relationship with the actual
Name of actual controller Nationality residence of other countries or
controller
regions?
ZHANG Yuxiang Himself Chinese No
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Acting in concert (by agreement,
ZHU Xuelian Chinese No
kinship or common control)
Shanghai Fengnan Investment Acting in concert (by agreement,
- No
Center LLP kinship or common control)
Primary occupation and title Chairman and General Manager of the Company and spouse
Domestic or foreign listed
companies controlled in the past N/A
10 years
Change of actual controllers during the reporting period
□ Applicable (A) √ Not applicable (N/A)
Actual controllers did not change during the reporting period.
The ownership and controlling relationship between the Company and its actual controllers are detailed as follows:
Actual controllers control the Company by means of trust or other asset management methods
□ Applicable (A) √ Not applicable (N/A)
4. Other institutional shareholders owning over 10% of shares
□ Applicable (A) √ Not applicable (N/A)
5. Details of sales restrictions on shares of controlling shareholders, actual controllers, restructuring parties,
and other commitment entities
□ Applicable (A) √ Not applicable (N/A)
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Section 07 Preferred Shares
□ Applicable (A) √ Not applicable (N/A)
The Company had no preferred share during the reporting period.
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Section 08 Convertible Bonds
□ Applicable (A) √ Not applicable (N/A)
The Company had no convertible bonds during the reporting period.
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Section 09 Directors, Supervisors, Senior Executives and Employees
I. Shareholding Change of Directors, Supervisors and Senior Executives
Increase
Number of Decrease of Other
of shares Number of
shares at the shares in the chang
Tenure Gen in the shares at the
Name Title Age Start date End date beginning of current es
Status der current end of the
the period period (share
period period (share)
(share) (share) )
(share)
Chairma
ZHANG n and Incum Mal
55 February 4, 2016 Present 654,899,490 42,740,274 612,159,216
Yuxiang General bent e
Manager
Incum Mal
LIU Rui Director 41 December 18, 2017 Present 51,353,286 12,838,063 38,515,223
bent e
Total -- -- -- -- -- -- 706,252,776 0 55,578,337 650,674,439
II. Turnover of Directors, Supervisors and Senior Executives of the Company
√ Applicable (A) □ Not applicable (N/A)
Name Position Type Date Reason
On September 19, 2019, LU Lining applied to the Board
Chairman of the
of Supervisors of the Company to resign from the positions
LU Lining Board of Removal October 8, 2019
of the Supervisor and the Chairman of Board of
Supervisors
Supervisors for personal reasons.
On the 15th Meeting of the 6th Board of Directors of the
Company, the Proposal on the Appointment of Senior
Deputy General September 19,
LU Lining Appointment Executives of the Company was examined and approved,
Manager 2019
approving to appoint Ms. LU Lining as a Deputy General
Manager of the Company.
On the First Extraordinary General Meeting of the
Company in 2019, the Proposal on the By-election of
Supervisors of the Company was examined and passed,
Chairman of the approving to appoint Ms. ZHENG Dingxia as the Non-
ZHENG Dingxia Board of Appointment October 8, 2019 employee Representative Supervisor of the 6th Board of
Supervisors Supervisors. On the 15th Meeting of the 6th Board of
Supervisors, the Proposal on the Election of the Chairman
of the 6th Board of Supervisors of the Company was
examined and passed, and Ms. ZHENG Dingxia was
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elected as the Chairman of the 6th Board of Supervisors of
the Company.
On the 15th Meeting of the 6th Board of Directors of the
Company, the Proposal on the Appointment of Senior
Deputy General September 19,
JI Yanfen Appointment Executives of the Company was examined and approved,
Manager 2019
approving to appoint Ms. JI Yanfen as a Deputy General
Manager of the Company.
On the 15th Meeting of the 6th Board of Directors of the
Company, the Proposal on the Appointment of Senior
Deputy General September 19,
LIN Zecun Appointment Executives of the Company was examined and approved,
Manager 2019
approving to appoint Mr. LIN Zecun as a Deputy General
Manager of the Company.
On the 15th Meeting of the 6th Board of Directors of the
Company, the Proposal on the Appointment of Senior
Deputy General September 19,
FENG Jie Appointment Executives of the Company was examined and approved,
Manager 2019
approving to appoint Ms. FENG Jie as a Deputy General
Manager of the Company.
Director, Deputy
LING Yun resigned from the positions of Director, Deputy
General Manager
LING Yun Resign October 21, 2019 General Manager and Finance Director of the Company for
and Finance
personal reasons.
Director
III. Profiles of Key Personnel
Professional background, main working experience and main duties of incumbent directors, supervisors and senior
executives of the Company
Mr. ZHANG Yuxiang: Born in July 1964. He established the brand of "NANJIREN" in 1998 and Nanjiren
(Shanghai) Textile Technology Co., Ltd. (now renamed as "Nanji E-Commerce (Shanghai) Co., Ltd.") in December
2010 and served as the Chairman and the General Manager. Mr. ZHANG Yuxiang also served as a council member
of Shanghai Underwear Trade Association and the Vice Chairman of the 5th Council of Shanghai Garment Trade
Association. From April 2001 to August 2015, he served as the Executive Director of Shanghai Qiangxiang
Mechanical Equipment Co., Ltd., and then became the Supervisor of Shanghai Qiangxiang Mechanical Equipment
Co., Ltd since August 2015. He has become the Chairman, the General Manager and the actual controller of the
Company since February 2016.
Mr. SHEN Chenxi: Born in May 1987, graduated from Fudan University in Business Administration with a
Bachelor of Management. From May 2008 to April 2009, he was the Head of the Sales Department of Shanghai
Printemps owned by Hong Kong New World Department Store. Since December 2010, he has served successively
as Manager of the E-Commerce Department, Manager of the Distributor Management Department, Director of the
Maternal and Infant Business Center, Deputy General Manager, Director, etc. of Nanjiren (Shanghai) Textile
Technology Co., Ltd. (now renamed as "Nanji E-Commerce (Shanghai) Co., Ltd."). From August 2014 to March
2017, he served as Executive Director and General Manager of Hefei Nanjiren E-Commerce Services Co., Ltd.
From December 2015 to August 2016, he served as the Executive Director of Shanghai Nanweicheng E-Commerce
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Co., Ltd. From September 2015 to August 2018, he served as the Executive Director of Zhuji East China One-Stop
Women's Wear E-Commerce Co., Ltd. From August 2015 to June 2018, he served as Executive Director and
General Manager of Zhuji One-Stop Network Technology Services Co., Ltd. From September 2015 to February
2017, he served as the Executive Director of Tongxiang One-Stop Network Technology Services Co., Ltd. He has
served as the Supervisor of Shanghai Xiaodai Finance Lease Co., Ltd since August 2015. He became the General
Partner of Shanghai Fengnan Investment Center LLP since May 2012. He has served as Director and Deputy
General Manager of the Company since February 2016.
Mr. LING Yun: Born in June 1976, Bachelor’s Degree in Accounting from Shanghai Lixin University of
Accounting and Finance, Semi-senior Accountant. From November 2000 to July 2003, he successively served as
the Finance Manager and the Finance, Human Resources & Administration Manager of International Network
Communications (Shanghai) Co., Ltd. affiliated to China.com. From August 2003 to November 2006, he served as
the Finance, Human Resources & Administration Manager in Shanghai Branch of Beijing Huawang Huitong
Technology Services, Ltd. affiliated to China.com. From December 2006 to September 2008, he served as the
Finance, Human Resources &Administration Director of SmartClub. From October 2008 to May 2009, he served
as the Human Resources &Administration Director of Shanghai Zhihuitong Advertising Transmission Co., Ltd.
From August 2009 to December 2009, he served as the Finance Manager of Shanghai Point Electronics Co., Ltd.
From April 2010 to December 2010, he served as the Preparation Manager of the Network Department of Shanghai
Dushi Industry Design Centre Co., Ltd. From June 2011 to March 2013, he served as the President Assistant of
Feishang Electronic Information Technology (Shanghai) Co., Ltd. affiliated to Fclub. From April 2013 to June 2014,
he served as the President Assistant and the Finance Director of F-club E-commerce (China) Co., Ltd. From
September 2014 to February 2015, he served as the Finance Director of Shanghai Red Star Macalline Hxshop E-
Commerce Co., Ltd. From March 2015 to April 2016, he served as the Finance Director of Shanghai Red Star
Macalline Network Technology Co., Ltd. From May 2016 to October 2019, he served as the Finance Director of
Nanji E-Commerce (Shanghai) Co., Ltd. From August 2016 to October 2019, he served as the Finance Director of
the Company. From May 2018 to October 2019, he served as a Director of Beijing Timelink Network Technology
Co., Ltd. From June 2018 to February 2020, he served as a Director of the Company. From September 2018 to April
2020, he served as a Director of Shanghai Xiaodai Finance Lease Co., Ltd.
Mr. LIU Rui: Born in October 1978, Bachelor. Since January 2013, he has served as a Director of Beijing Wenri
Technology Co., Ltd. Since March 2014, he has served as a Director of When Corporation Limited and When
Corporation (HK). From July 2014 to May 2015, he served as the Vice President of the Marketing Department of
Beijing Shilian Tianxia Technology Co., Ltd. From August 2015 to 2018, he served as the General Manager of
Lhasa HENRI JAYER Technology Co., Ltd. From June 2015 to September 2016, he served as Chairman and
General Manager of Beijing Timelink Network Technology Co., Ltd.; since September 2016, he has served as
Executive Director and General Manager of Beijing Timelink Network Technology Co., Ltd. Since December 2017,
he has served as a Director of the Company.
Mr. YANG Bin: Born in March 1974, MBA. Since 2009, he has served as a Vice President of Far East International
Investment Co., Ltd. Since December 2011, he has served as a Director of Dongfang Hengxin Capital Holding
Group Co., Ltd. From June 2012 to May 2015, he was a Director of Dongwu Cement International Limited. Since
July 2013, he has served as a Director of Dongfang Xinmin Holding Co., Ltd. From September 2013 to February
2016, he served as the Chairman of the Company, and since September 2013, he has been a Director of the Company.
Since May 2016, he has been the CEO of Oriental Strait Capital Management Co., Ltd.
Ms. ZHANG Yanni: Born in November 1975, master’s degree. From March 2004 to April 2006, she worked in
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CSR Times Electric Co., Ltd.; From May 2006 to October 2013, she worked in the investment banking divisions at
Guosen Securities and Great Wall Securities successively. From October 2013 to April 2016, she served as a deputy
general manager and the board secretary of the Company, and since November 2015, she has served as a director
of the Company. Since May 2016, she has served as a Deputy General Manager of Oriental Strait Capital
Management Co., Ltd. and General Manager's Assistant of Orient Hengye Holding Co., Ltd.; From June 2016 to
June 2018, she served as the executive director of WUXI LE-PV Internet TECHNOLOGY Co., Ltd.
Mr. WAN Jieqiu: Born in October 1955, doctoral degree. Professor and doctoral supervisor of Dongwu Business
School of Soochow University since August 2008. He has enjoyed special government allowance from the State
Council since October 1995. In 2001, he was selected as an Outstanding Talent of Jiangsu Provincial Government’s
“333” Talent Project. Currently, he serves concurrently as an independent director of Jiangsu Xinning Modern
Logistics Co., Ltd. (Stockcode: 300013), Jiangsu Wujiang China Eastern Silk Market Co., Ltd. (now renamed as
Jiangsu Eastern Shenghong Co., Ltd., stockcode: 000301), and Suzhou Golden Mantis Construction Decoration Co.,
Ltd. (Stockcode: 002081) respectively. Since February 2015, he has been an independent director of the Company.
Ms. WANG Haifeng: Born on November 22, 1971, doctoral degree. From July 1992 to August 1994, she worked
as a Level-3 Superintendent in Public Security Department of Anhui Province; From January 2004 to January 2005,
she was a visiting scholar at Kennedy School of Government of Harvard University; From January 2009 to January
2011, she worked as a deputy director in the First Branch of Shanghai Municipal People's Procuratorate; Since
January 2011, she has been working as a law professor in the Law Institute of Shanghai Academy of Social Sciences;
From September 1997 to April 2016, she served as a part-time lawyer in GRANDALL LEGAL GROUP (Shanghai) ;
Since May 2014, she has been an arbitrator of China International Economic and Trade Arbitration Commission;
Since May 2015, she has been a special inspector in the Third Branch of Shanghai Municipal People's Procuratorate;
Since May 2016, she has been a part-time lawyer in Shanghai Hengtai Law Office (now renamed as “Hengtai Law
Offices”); Since March 2016, she has been an independent director of Shanghai Will Semiconductor Co. Ltd.
(Stockcode: 603501); Since November 2017, she has been an independent director of YINYI Co., Ltd. (Stockcode:
000981); Since June 2018, she has been an independent director of the Company; Since November 2019, she has
been a Vice Chairman of Shanghai Arbitration Association.
Mr. WU Xiaoya: Born on May 18, 1973, bachelor’s degree. From 1994 to 2000, he worked as the head of
Infrastructure Audit Department in Audit Bureau of Mengcheng County of Anhui Province. From 2001 to 2006, he
worked in as a project manager Anhui Huapu Certified Public Accountants' Firm. From 2007 to 2012, he worked
as the Chief in Anhui Huawan Certified Public Accountants' Firm. Since March 2011, he has been a supervisor of
Anhui Tiandao Enterprise Management Consulting Co., Ltd. Since July 2011, he has been a supervisor of Anhui
Xindadi Agricultural Science &Technology Development Co., Ltd. Since 2013, he has worked as the Head of Anhui
Branch of Zhonghua Accounting Firm (Special General Partnership). Since April 2016, he has been an independent
director of Anhui Yangzi Floor Co., Ltd. (Stockcode: 430539). Since June 2018, he has been an independent director
of the Company; Since December 2019, he has been an independent director of Anhui A-Rising New Energy
Incorporated Company (Stockcode: 834489).
Ms. LU Lining: Born in April 1982, college degree. From May 2003 to November 2004, she was a Business
Supervisor of Shanghai Colin Service Management Co., Ltd. Since 2007, she has successively served as business
assistant, business supervisor, deputy business manager, business manager of Pantyhose BU, senior manager of
Clothing Center, director of Women's Outdoor BU, and deputy general manager of Maternal and Infants BU of
Nanji E-Commerce (Shanghai) Co., Ltd. Since May 2018, she has served as a supervisor of Beijing Time Link
Technology Co., Ltd. From June 2018 to October 2019, she served as a supervisor and Chairman of the Board of
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Supervisors of the Company. Since September 2019, she has been a deputy general manager of the Company.
Ms. ZHENG Dingxia: Born in June 1988, bachelor's degree, Chinese nationality, without the right of permanent
residence abroad. Since 2013, she has successively served as a financial specialist, finance manager and deputy
Finance Director of Nanji E-Commerce (Shanghai) Co., Ltd. Since October 2019, she has served as a supervisor
and Chairman of the Board of Supervisors of the Company.
Mr. HU Xianghuai: Born in April 1974, bachelor's degree. He served as the manager of Engineering Department
of Shanghai Fangjia Construction Decoration Engineering Co., Ltd. and a project manager of Shanghai Taiyi
Enterprise Co., Ltd. Since December 2010, he has served as the administrative manager, engineering manager,
operation manager of directly-operated stores, director of Administration Department, executive deputy director of
Human Resource &Administration Center and supervisor of Nanjiren (Shanghai) Textile Technology Co., Ltd.
(now renamed as “Nanji E-Commerce (Shanghai) Co., Ltd.”). From February 2016 to September 2016, he served
as a supervisor of the Company, and since September 2016, he has served as the Company’s employee
representative supervisor.
Ms. CHEN Xiaojie: Born in September 1981, master’s degree, economic engineer. From August 2007 to December
2010, she served as the Company's administrative assistant. From January 2011 to December 2015, she served as
the Company's administrative assistant and board secretary’s assistant. From January 2016 to the present, she served
as an assistant to the general manager of Suzhou Xinmin Textile Co., Ltd. Since June 2017, she has served as the
manager of General Affairs Department of Wujiang Xinmin Industrial Investment Co., Ltd. From December 2014
to September 2016, she served as the employee representative supervisor of the Company. Since September 2016,
she has served as the shareholder supervisor of the Company.
Mr. CAO Yitang: Born in June 1976, a dual bachelor’s degree of engineering from Shanghai Jiaotong University
and a master’s degree of economics from Fudan University. From July 2001 to April 2002, he served as a financial
analyst at Shanghai Office of Pacific Solutions Group. From April 2002 to December 2002, he served as a senior
manager of Shanghai Richen Asset Management Co., Ltd.; From January 2003 to March 2004, he served as a vice
president of GENES CAPITAL GROUP (Shanghai) Co., Ltd. From March 2004 to May 2007, he served as the
head of Strategic Development and the head of Investor Relations Department of Metersbonwe Fashion Group.
From May 2007 to August 2009, he was the head of Direct Investment Department of Tebon Securities Co., Ltd.
From August 2009 to March 2010, he was the director of Strategic Management Center of Joeone Co., Ltd. From
March 2010 to September 2011, he was the general manager of Zhejiang Lehoo Furniture Co., Ltd. From October
2011 to June 2015, he was a partner of Shanghai DoréHehui Equity Investment Management LLP; Since September
2012, he has been the supervisor of Shanghai tant Capital Consulting Co., Ltd.; From July 2015 to July 2017, he
was the fashion team head of Shanghai Fosun Capital Investment &Management Co., Ltd. (General Manager of
Fosun Ellassay Fashion Fund); From July 2017 to July 2018, he was a managing director of Shanghai CVCapital
Asset Management Co., Ltd.; From August 2012 to August 2018, he was an independent director of VGRASS
Fashion Co., Ltd. (Stockcode: 603518). Since September 2016, he has been an independent director of Zhejiang
Red Dragonfly Footwear Co., Ltd. (Stockcode: 603116); Since May 2017, he has been an independent director of
Jiangsu Zhongnan Construction Group Co., Ltd. (Stockcode: 000961); He has been an independent director of
Guangzhou DIKENI Garment Company Limited since June 2018,as the legal representative of Shanghai Caoyitang
Enterprise Management Center since August 2018, and as the secretary of the Board of Directors and Deputy
General Manager of the Company since October 2018.
Ms. JI Yanfeng: born in July 1988, bachelor’s degree, Chinese nationality, without the right of permanent residence
abroad. She has been working in the Company since January 2012, having successively served as the director of
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Brand Department, director of the PONY Business Unit and Deputy General Manager of Nanji E-commerce
(Shanghai) Co., Ltd., a subsidiary of the Company, since January 2012; She also have served as a director and
General Manager of Jiwenwu (Shanghai) Culture Co., Ltd., a subsidiary of the Company, since November 17, 2016;
Since September 2019, she has been a deputy general manager of the Company.
Mr. LIN Zecun: born in October 1990, college degree, Chinese nationality, without the right of permanent
residence abroad. He acted as the Manager of Procurement Department of Shanghai Lemon Green Tea E-commerce
Co., Ltd. from August 2009 to March 2013. He has been working in the Company since April 2014, serving as the
Supervisor/Manager/Senior Manager/Director of Home Daily Department, Senior Director of Healthy Living
Business Unit, Head of Healthy Living Business Group, Vice General Manager of Nanji E-commerce (Shanghai)
Co., Ltd.; Since September 2019, he has been a deputy general manager of the Company.
Ms. FENG Jie: born in November 1982, bachelor’s degree, Chinese nationality, without the right of permanent
residence abroad. She acted as the Deputy General Manager of Commodity Department of Shanghai Metersbonwe
Fashion & Accessories Co., Ltd. from July 2005 to May 2014; She acted as a Senior Buyer Manager of Samsung
Fashion (Shanghai) Co., Ltd. from May 2014 to May 2016; She acted as the E-commerce Director of Mark
Fairwhale fashion brand of Mark Fairwhale (Shanghai) Commercial Co., Ltd. from May 2016 to May 2018; She
has been working in the Company since May 2018, serving as the Operation Director of Women’s Wear Business
Unit and Director of Women's Wear & Accessories Business Group of Nanji E-commerce (Shanghai) Co., Ltd.;
Since September 2019, she has been a deputy general manager of the Company.
Positions held in shareholder entities
√ Applicable (A) □ Not applicable (N/A)
Receives payment
Name of the Position in the
Name of the shareholder entity Start date End date from the
person shareholder entity
shareholder entity?
YANG Bin Dongfang Xinmin Holding Co., Ltd. Director July 25, 2013 No
Manager of
Wujiang Xinmin Industrial Investment
CHEN Xiaojie General Affairs June 30, 2017 No
Co., Ltd.
Department
Shanghai Fengnan Investment Center
SHEN Chenxi General partner May 15, 2012 No
LLP
Notes to
positions held
N/A
in shareholder
entities
Positions held in other entities
√ Applicable (A) □ Not applicable (N/A)
Receives payment
Name of the Position in End date of
Name of other entities Start date from other
person other entities term
entities?
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ZHANG Shanghai Qiangxiang Machinery
Supervisor August 1, 2015 No
Yuxiang Equipment Co. Ltd.
Beijing Wenri Science & Technology
LIU Rui Director January 1, 2013 No
Co., Ltd.
Beijing Shilian Tianxia Science &
LIU Rui Director March 20, 2014
Technology Co., Ltd.
Shanghai Qishi International Trade Co.,
LIU Rui Director March 9, 2017
Ltd.
LIU Rui When Corporation Limited Director March 1, 2014 No
LIU Rui When Corporation (HK) Limited Director March 1, 2014 No
Far East International Investment Co.,
YANG Bin Vice President January 1, 2009 No
Ltd.
Dongfang Hengxin Capital Holding
YANG Bin Director December 1, 2011 No
Group Co., Ltd.
Oriental Strait Capital Management Co.,
YANG Bin CEO May 1, 2016 No
Ltd.
December 25,
YANG Bin Suzhou Hengkang Life Science Co., Ltd Chairman
2018
Oriental Strait Capital Management Co., Deputy General
ZHANG Yanni May 1, 2016 No
Ltd. Manager
General
ZHANG Yanni Orient Hengye Holding Co., Ltd. Manager May 1, 2016 Yes
Assistant
General
CHEN Xiaojie Suzhou Xinmin Textile Co., Ltd. Manager January 1, 2016 Yes
Assistant
Professor,
Dongwu Business School of Soochow
WAN Jieqiu doctorial August 1, 2008 Yes
University
supervisor
Jiangsu Xinning Modern Logistics Co., Independent
WAN Jieqiu March 1, 2017 Yes
Ltd. director
Independent
WAN Jieqiu Jiangsu Eastern Shenghong Co., Ltd. May 1, 2017 Yes
director
Suzhou Gold Mantis Construction Independent
WAN Jieqiu April 1, 2016 Yes
Decoration Co., Ltd. director
Institute of Law, Shanghai Academy of
WANG Haifeng Researcher January 1, 2011 Yes
Social Sciences
China International Economic and Trade
WANG Haifeng Arbitrator May 1, 2014
Arbitration Commission No
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Third Branch of Shanghai People's Special
WANG Haifeng May 1, 2015
Procuratorate procurator No
Part-time
WANG Haifeng Shanghai Hengtai Law Firm May 1, 2016
lawyer No
Independent
WANG Haifeng Shanghai Will Semiconductor Co., Ltd. March 1, 2016 Yes
director
Independent
WANG Haifeng Yinyi Co., Ltd. November 1, 2017 Yes
director
WANG Haifeng Shanghai Arbitration Association Vice Chairman November 1, 2019 No
Anhui Tiandao Enterprise Management
WU Xiaoya Supervisor March 1, 2011 No
Consulting Co., Ltd.
Anhui Xindadi Agricultural Science
WU Xiaoya Supervisor July 1, 2011 No
&Technology Development Co., Ltd.
Anhui Branch of Zhonghua Accounting
WU Xiaoya Director July 1, 2013 Yes
Firm (special general partnership)
Independent
WU Xiaoya Anhui Yangzi Floor Co., Ltd. April 25, 2016 Yes
director
Anhui A-rising New Energy Incorporated Independent
WU Xiaoya December 1, 2019 Yes
Company director
General
CHEN Xiaojie Suzhou Xinmin Textile Co., Ltd. Manager January 1, 2016 Yes
Assistant
Shanghai tant Capital Consulting Co., September 30,
CAO Yitang Supervisor No
Ltd. 2012
Zhejiang Red Dragonfly Footwear Co., Independent September 13,
CAO Yitang Yes
Ltd. director 2016
Jiangsu Zhongnan Construction Group Independent
CAO Yitang May 16, 2017 Yes
Co., Ltd. director
Guangzhou DIKENI Garment Company Independent
CAO Yitang June 26, 2018 Yes
Limited director
Shanghai Caoyitang Enterprise Legal
CAO Yitang August 28, 2018 No
Management Center representative
Description on
position held in N/A
other entities
Punishments imposed by the securities regulators in the past three years on the Company’s incumbent directors,
supervisors and senior executives and those left in the reporting period
□ Applicable (A) √ Not applicable (N/A)
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IV. Remuneration of directors, supervisors and senior executives
Decision making procedure, determination basis and actual payment of remuneration of directors, supervisors and
senior executives
Remunerations of the Company’s directors and supervisors are proposed by the Company’s Board of Directors
according to the proposal of the Remuneration and Appraisal Committee of the Board of Directors, the Company's
operating conditions and profitability and the duty and performance of each position. The proposal is submitted to
the general meeting of shareholders of the Company for approval.
Remunerations of the senior executives are determined by the Company’s Board of Directors according to the
proposal of the Remuneration and Appraisal Committee of the Board of Directors, the Company's operating
conditions and profitability and performance evaluation of each position. The actual remuneration of a senior
executive is based on the salary of each position
Remunerations of directors, supervisors and senior executives of the Company during the reporting period
(Unit: RMB 10,000)
Whether gained
Total pre-tax
remuneration
Status of remuneration
Name Position Gender Age from the
employment gained from the
Company’s
Company
related parties
Chairman and
ZHANG Yuxiang Male 55 Incumbent 42.60 No
General Manager
Director, Deputy
SHEN Chenxi Male 32 Incumbent 288.96 No
General Manager
Director, Deputy
LING Yun General Manager, Male 43 Resigned 73.67 No
Finance Director
LIU Rui Internal Director Male 41 Incumbent 45.07 No
YANG Bin External Director Male 45 Incumbent Yes
ZHANG Yanni External Director Female 44 Incumbent Yes
Independent
WAN Jieqiu Male 65 Incumbent 7.00 No
Director
Independent
WANG Haifeng Female 49 Incumbent 7.00 No
Director
Independent
WU Xiaoya Male 47 Incumbent 7.00 No
Director
Chairman of
LU Lining Board of Female 37 Resigned No
Supervisors
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Chairman of
ZHENG Dingxia Board of Female 31 Incumbent 40.31 No
Supervisors
Employee
HU Xianghuai Representative Male 45 Incumbent 40.05 No
Supervisor
Shareholder
CHEN Xiaojie Female 38 Incumbent 3.00 No
Supervisor
Deputy General
Manager,
CAO Yitang Secretary of Male 43 Incumbent 125.83 No
Board of
Directors
Deputy General
LU Lining Female 37 Incumbent 111.77 No
Manager
Deputy General
JI Yanfen Female 31 Incumbent 86.43 No
Manager
Deputy General
LIN Zecun Male 29 Incumbent 166.45 No
Manager
Deputy General
FENG Jie Female 37 Incumbent 130.18 No
Manager
Total -- -- -- -- 1,175.32 --
Equity incentives granted to the Company’s directors and senior executives during the reporting period
√ Applicable (A) □ Not applicable (N/A)
Unit: shares
Exercise
price of Market Number of
Number of Number of Granting Number of
the shares price at the Number of Number of restricted
exercisable shares price of restricted
exercised end of the restricted unlocked shares
shares in exercised restricted shares held
Name Position in the reporting shares held shares in granted in
the in the share at the end
reporting period at the the current the
reporting reporting (RMB/shar of the
period (RMB/shar beginning period reporting
period period e) period
(RMB/shar e) period
e)
Director,
SHEN Deputy
0 0 0 10.91 0 0 0 0 0
Chenxi General
Manager
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Secretary
of Board
of
CAO
Directors, 0 0 0 10.91 0 0 0 0 0
Yitang
Deputy
General
Manager
Deputy
JI Yanfen General 0 0 0 10.91 0 0 0 0 0
Manager
Deputy
LIN Zecun General 0 0 0 10.91 0 0 0 0 0
Manager
Deputy
FENG Jie General 0 0 0 10.91 0 0 0 0 0
Manager
Total -- 0 0 -- -- 0 0 0 -- 0
The Company launched the 2019 SOIP during the reporting period, the above 5 directors and senior
Comments (if any) executives were granted with a total of 1,360,000 stock options, accounting for 10.002% of the total granted
stock options. All stock options are not exercisable during the reporting period.
V. Employees of the Company
1. Number, role type and educational background of employees
Number of employees on active duty in the parent company (person) 132
Number of employees on active duty in the major subsidiaries (person) 445
Total number of employees on active duty (person) 646
Total number of employees receiving a salary during the current period (person) 646
Number of retired employees for whom the parent company and major
1
subsidiaries bear the costs (person)
Role type
Category Number (person)
Sales personnel 151
Technical personnel 118
Financial personnel 48
Administrative personnel 44
Management personnel 99
Operational personnel 158
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Staff of supporting departments 28
Total 646
Education background
Category Number (person)
Master's degree 27
Bachelor’s degree 309
College degree 264
Below college degree 46
Total 646
2. Remuneration policy
Following the principle of "competitive externally, fair internally", the Company adopts a remuneration strategy
that leads in the external market. The remuneration is designed according to the relative value of each position to
the Company, work performance and basic living needs for the staff. The staff's remuneration is closely related to
their contribution to the Company. Besides, an adjustment is made on the salary range annually according to changes
in the external market.
Remuneration mainly includes basic salaries, bonuses, subsidies, welfares, long-term incentives. The remuneration
hierarchy is divided into 15 levels according to the position level, and also divided into the professional direction
and management direction according to the position, which focuses on providing incentives for key technical
personnel, management personnel and outstanding employees. Employees have the opportunity to be evaluated for
salary adjustment twice per year. A total of 22 employee welfare items are provided from five perspectives as
position welfare, traditional festival welfare, insurance, cultural development and care for family, which gives full
play to non-cash incentives.
3. Training plan
The Company's overall training goal is to improve the staff's professional skills and quality, enhance the
management concept and the decision-making ability of the middle and senior management. Main training courses
include new employee orientation training, on-the-job training, professional quality training and management
training.
Training courses are arranged on a weekly, monthly and quarterly basis according to different training needs.
Training instructors are mainly selected internally. Attention is paid to the training and motivation of internal
instructors. The training results are evaluated and satisfaction survey is performed for the training courses.
4. Labor outsourcing
□ Applicable (A) √ Not applicable (N/A)
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Section 10 Corporate Governance
I. Basic Information of Corporate Governance
The Company continues to improve the corporate governance structure, establish a modern enterprise system,
consciously fulfill the obligation of information disclosure, achieve good investor relationship management to
continuously enhance the Company’s normalized operation according to requirements of the following laws and
regulations since the Company went public: the PRC Corporate Law, CSRC Securities Law, CSRC Code of
Corporate Governance of Listed Companies, Guidelines for Articles of Association of Listed Companies, Rules
Governing the Listing of Shares on the Shenzhen Stock Exchange.
The Company revised the Company’s Articles of Association and Rules for Short-term Entrusted Wealth
Management according to the actual situation of the Company in the reporting period.
By the end of the reporting period, the actual conditions of Company’s corporate governance met the requirements
of the regulatory documents issued by CSRC regarding the governance of listed companies. The Company will
continue to strengthen corporate governance in the future, establish a long-term mechanism for corporate
governance, improve the internal control system in a better way and strengthen the fulfillment efforts, to lay a solid
foundation for the Company's sustained, healthy and steady development.
1.About shareholders and general meeting of shareholders
The Company stipulates the Rules of Procedure for the General Meeting of Shareholders, and convenes the general
meeting in strict accordance with the provisions and requirements of the Rules. The Company treats all shareholders
equally, in particular, to ensure that minority shareholders can enjoy equal status and fully exercise their rights.
2. About the Company and controlling shareholders
The Company has independent business and operational autonomy and ensures "five independences" with the
controlling shareholders on personnel, asset, finance, organization and business. They make accounting and take
responsibility and risk independently. There is no such situation as illegal occupation of the Company’s funds by
the controlling shareholders. The Company also provides no guarantee for the controlling shareholders. The
controlling shareholders behave normatively without any direct or indirect interfere with the Company’s decision-
making and business beyond the general meeting of shareholders.
3. About directors and Board of Directors
The Company elects directors in strict accordance with the recruitment and selection procedures stated in the
Company’s Article of Association. There are currently 3 independent directors in the Company, accounting for 1/3
of the total number of directors. The number, composition and qualification of directors in the Board of Directors
meet the requirements of relevant laws and regulations. All directors can carry out the work in accordance with the
Guidelines of Shenzhen Stock Exchange for Standardized Operation of Companies Listed on the SME Board, Rules
of Procedure for Board of Directors of the Company, Working Rules for Independent Directors of the Company
and other regulations. They attend board meetings and general meetings of shareholders seriously, participate in the
relevant knowledge training actively, fulfill the obligations of being honest and trustworthy, diligent and responsible.
The Board of Directors standardizes the convening and holding of and voting on the board meeting in strict
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accordance with relevant regulations, to ensure that the board meeting can go on smoothly. There have neither acts
of exercising the power of shareholders' general meeting beyond their authority, nor acts of interfering in the
operation of the board of supervisors and the management beyond their authority. There are Audit Committee,
Nomination Committee, Remuneration &Appraisal Committee, and Investment Decision-making Committee under
the Board of Directors. The committees fulfill their own duties, to further improve the governance structure and
enable the Board of Directors to make decisions in a more scientific and efficient way.
4. About supervisors and Board of Supervisors
The Company elects supervisors in strict accordance with the relevant provisions of the Corporate Law, the
Company’s Articles of Association and other regulations. The number, composition and qualification of supervisors
in the Board of Supervisors meet requirements of relevant laws and regulations. The Board of Supervisors can
convene and hold supervisor meeting in strict accordance with requirements of the Rules of Procedure for the
Company's Board of Supervisors. The voting procedure meets requirements of applicable laws and regulations. All
supervisors can perform their duties conscientiously. The legality and compliance of major matters, financial status
and performance of directors and senior executives are effectively supervised and independent opinions are made
in the spirit of being responsible for the shareholders, to safeguard the legitimate rights and interests of the Company
and its shareholders.
5. About performance evaluation and incentive and disciplinary mechanism
The Company has established and will gradually improve the performance appraisal system, to link employee's
income to their job performance. Senior executives are recruited in an open and transparent manner and in
accordance with provisions of applicable laws and regulations.
6. About information disclosure and transparency
The Company’s Management Rules for Information Disclosure and the Company’s Internal Reporting Rules for
Major Information are formulated according to the Administrative Measures on Information Disclosure by Listed
Companies, Stock Listing Rules of Shenzhen Stock Exchange, Guidelines of the Shenzhen Stock Exchange for
Standardized Operation of Companies Listed on SME Board and other regulations. The Company establishes the
major information reporting system, to standardize information disclosure acts of the Company, ensure the
authenticity, accuracy and completeness of the information disclosed by the Company and safeguard the legitimate
rights and interests of the Company and its shareholders. The Chairman is the first person responsible for
information disclosure. The Secretary of Board of Directors is responsible for the management of investor relations
in the Company. The Securities Department of the Company is responsible for the daily work on investor relation
management. In the reporting period, the Company discloses information in a true, accurate, timely and complete
way on the Company’s website and the designated information disclosure media, to ensure that all investors have
fair access to the Company's information.
Is there any significant difference between the Company’s actual governance status and the relevant rules issued
by China Securities Regulatory Commission?
□ Yes √ No
There is no significant difference between the Company’s actual governance status and the relevant rules issued
by China Securities Regulatory Commission.
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II. Independence of the Company from Its Controlling Shareholders in Terms of Business,
Personnel, Assets, Organization, and Finance
1. Business independence: The Company has the independent market-oriented management ability and independent
sales, operation and service systems. With the complete business process, the Company can conduct businesses
independently. The Company has complete independence in terms of business.
2. Personnel independence: the General Manager, Deputy General Managers, Finance Director and other senior
executives of the Company neither hold other administrative positions other than directors and supervisors in other
enterprises controlled by the controlling shareholders and the actual controllers of the Company, nor get salaries in
other enterprises controlled by the controlling shareholders and the actual controllers. There are no such cases as
holding dual posts, which are prohibited by laws, regulations and rules. the Company’s accountants are full-time
staffs and paid in the Company, without having a part-time job or get paid from other companies.
3. Asset independence: The Company has electronic equipment, tools, office equipment, transportation equipment
and other supporting facilities related to its businesses and has the legal ownership and right of use of houses,
electronic equipment, office equipment, trademarks and other facilities related to its business.
4. Organizational independence: The Company establishes an organization necessary for its business. All internal
departments operate independently, without mixed operation or sharing working space.
5. Financial independence: The Company has opened the independent bank accounts, and set up a Finance
Department, established an independent financial management system, and paid taxes independently. The Company
can make financial decisions independently, without any shareholder interference with the use of the Company's
funds. The Company has a set of complete and independent financial accounting system.
III. Horizontal Competition
□ Applicable (A) √ Not applicable (N/A)
IV. Information about Annual General Meeting and Extraordinary General Meeting of
Shareholders Held in the Reporting Period
1. Shareholder’s general meeting in the reporting period
Proportion of
Session of meeting Type of meeting Date of meeting Date of disclosure Disclosure index
investor participants
Announcement No.
2018 Annual General Annual general
36.46% May 17, 2019 May 18, 2019 2019-034 on
Meeting meeting
www.cninfo.com.cn
Announcement No.
The first extraordinary Extraordinary
35.64% October 8, 2019 October 9, 2019 2019-072 on
general meeting in 2019 general meeting
www.cninfo.com.cn
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The second Announcement No.
Extraordinary
extraordinary general 41.29% October 14, 2019 October 15, 2019 2019-078 on
general meeting
meeting in 2019 www.cninfo.com.cn
Announcement No.
The third extraordinary Extraordinary
35.51% November 4, 2019 November 5, 2019 2019-089 on
general meeting in 2019 general meeting
www.cninfo.com.cn
2. Preferred shareholders whose voting rights have been resumed request for an extraordinary general
meeting Extraordinary Shareholders’ General Meeting requested by the preferred shareholder with
restitution of voting right
□ Applicable (A) √ Not applicable (N/A)
V. Performance of Independent Directors in the Reporting Period
1. Details of independent director attendance at board sessions and shareholders’ general meetings
Details of independent director attendance at board sessions and shareholders’ general meetings
Non-
Board sessions Number of attendance to Number of
Number of Number of
Name of required to board sessions Number of board sessions shareholder’s
board sessions board sessions
independent attend during attended by absences of in person for general
attended in attended under
director the reporting correspondenc board sessions two meetings
person commission
period (times) e consecutive attended
times
WAN Jieqiu 11 3 8 0 0 No 4
WANG Haifeng 11 2 9 0 0 No 4
WU Xiaoya 11 2 9 0 0 No 4
Explanation for failure to attend the board session in person for two consecutive times
□ Applicable (A) √ Not applicable (N/A)
2. Details on independent directors objecting to relevant matters
Did independent directors object to the Company’s relevant matters?
□ Yes √ No
Independent directors did not object the Company’s relevant events in the reporting period.
3. Other details of performance of independent directors
Whether independent directors' recommendations in respect of the Company have been accepted?
√ Yes □ No
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Explanations for acceptance or rejection of recommendations proposed by independent directors
Independent directors of the Company are diligent and responsible, fully exercise their rights as independent
directors, faithfully perform their duties and carefully review all proposals approved by the Board of Directors in
the reporting period. They expressed independent opinions on such major matters as the guarantee made by the
Company to its wholly-owned subsidiaries, distribution of profits, change in the accounting policy, recruitment of
senior executives of the Company, stock options incentive and related-party transactions.
VI. Performance of Special Committees under the Board of Directors in the Reporting Period
There are Audit Committee, Investment Decision-making Committee, Remuneration and Appraisal Committee and
Nomination Committee under the Board of Directors. They work scrupulously to perform their duties in good faith
in the reporting period. They are actively engaged in the Company's management, exert their strengths, skills and
experience, fulfill their duties vigorously and safeguard the rights and interests of the Company and shareholders,
especially the public shareholders.
1. Performance of Audit Committee of the Board of Directors
During the reporting period, the Audit Committee has held Eight meetings, held the periodic meetings at the end of
each quarter, to review drafts of periodic reports of the Company, work plans and reports of the internal audit
department, propose to appoint the head of the Audit Department, etc., and report to the Board of Directors of the
Company. The Audit Committee of the Board of Directors communicated and confirmed with the accounting firm
in advance in the audit work in 2019. Independent directors, members of the Audit Committee and accountants for
the annual audit communicated and discussed the audit plan, key audit areas and other issues in the first annual audit
meeting; The second annual audit meeting was held after accountants for the annual audit of the Company submitted
the financial and accounting statements which have been initially audited. Independent directors, members of the
Audit Committee and accountants for the annual audit met again and they agreed on making the 2019 annual report
and its summary based on the financial and accounting statements which have been initially audited; Before
deliberation on the annual report by the Board of Directors, the Audit Committee held the third annual audit meeting,
on which the 2019 Financial Report of the Company and 2019 Annual Report and Its Summary were reviewed and
passed. They suggested continually appointing RSM China CPA LLP as the auditor for the Company's financial
statements.
2. Performance of Investment Decision-making Committee of the Board of Directors
During the reporting period, the Investment Decision-making Committee has held two meetings to mainly discuss
specific contents related to the establishment of a joint venture company between the Company and its related
parties.
3. Performance of Remuneration and Appraisal Committee of the Board of Directors
During the reporting period, the Remuneration and Appraisal Committee has held three meetings, to review and
approve the Proposal on Remuneration of Directors and Supervisors of the Company, Proposal on Remuneration
of Senor Executives of the Company, and Draft and Summary of 2019 Stock Options Incentive Plan respectively,
and submit them to the boarding meeting for discussion and approval.
4. Performance of Nomination Committee of the Board of Directors
During the reporting period, the Nomination Committee has held to nominate the candidates of the Company’s
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senior executives, and submit the proposal to the board meeting for discussion and approval.
VII. Work of Board of Supervisors
Were there risks in the Company according to the supervision of the Board of Supervisors during the reporting
period?
□ Yes √ No
The Board of Supervisors raised no objection to matters under supervision during the reporting period.
VIII. Appraisal and Incentive Mechanisms for Senior Executives
Quarterly and annual appraisals are mainly adopted for senior executives. The Remuneration and Appraisal
Committee, Human Resources &Administration Center and General Manager Office will form an appraisal team to
perform the appraisal. The quarterly appraisal will be performed according to the job duties of the senior executives
and the achievement of quarterly goals. The annual appraisal is mainly performed in a debriefing way. Senior
executives make debriefing reports towards the appraisal team. The annal performance bonuses for the senior
executives are determined according to the results of the debriefing evaluation and the quarterly performance
appraisal.
Incentives for the senior executives mainly includes annual bonus, salary increase and equity incentive. Stock
options incentive plan is developed according to the length of service and personal contribution of the senior
executives.
IX. Evaluation Report for Internal Control
1. Details on material defects found in the Company’s internal control during reporting period
□ Yes √ No
2. Self-evaluation report for internal control
Disclosure date of full text of Evaluation
April 16, 2020
Report for Internal Control
Disclosure index of full text of Evaluation
Evaluation Report for Internal Control in 2019 on www.cninfo.com.cn
Report for Internal Control
Proportion of total assets included in
100.00%
evaluation scope
Proportion of operating revenue included in
100.00%
evaluation scope
Criteria of defect
Category Financial report Non-financial report
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Major defects: 1. Fraudulent practices of Major defects: decision-making process
directors, supervisors or senior executives of leads to major mistakes; Important
the Company; 2. Restatement of previously business lacks systematic control or faces
issued financial statements by the Company; systematic failure, and lacks effective
3. Material misstatement of financial compensatory control; The turnover of
statements in the current period identified by middle and senior executives and senior
the auditor but not detected by the Company’s technicians is high; Results of internal
internal control;; 4. Ineffective oversight of control evaluation (major defects in
the Company’s internal control on financial particular) have not been rectified; Other
statements by the Audit Committee and Audit circumstances having a major negative
Department. impact on the Company.
Important defects: 1. Failure to select and Important defects: decision-making
apply accounting policies according to process leads to ordinary mistakes; There
Qualitative criteria generally accepted accounting principles; 2. are defects in important business policies
Failure to establish anti-fraud procedures and or systems; High turnover of business
control measures; 3. Failure to establish a personnel in key positions; Results of
control mechanism, or failure to develop and internal control evaluation (important
implement any compensatory control for the defects in particular) have not been
accounting of unconventional or special rectified; Other circumstances having
transactions; 4. One or more defects in the important negative impact on the
control of the final financial reporting process Company.
at the end of period, and failure to reasonably General defects: the decision-making
ensure that authenticity and accuracy of the process is not efficient; There are defects
prepared financial statements in general business policies or systems;
General defects: other control defects other High turnover of business personnel in
than above major defects and important general positions; General defects have
defects. not been rectified.
Major defects: potentially misstated amount
in the financial report: misstated amount ≥ 1%
of the total operating revenue; Important
Major defects: direct property loss ≥
defects: potentially misstated amount in the
RMB 5 million; Important defects: RMB
financial report: 0.5% of the total operating
Quantitative criteria 500,000 ≤ direct property loss < RMB 5
revenue ≤ misstated amount < 1% of the
million; General defects: direct property
operating revenue; General defects:
loss Y≥60, the employee’s S equals to Y %; when
Y<60, the employee’s S equals to 0.
Maximum number of exercisable options of an incentive object in the current year = Individual Exercise Ratio (S) × Number
of Individual Exercisable Options in the current year calculated per the assessment results of the Company’s performance
achieved in the prior year. The employees shall exercise options within their respective maximum number of exercisable
options, and the stock options that cannot be exercised in the year of assessment shall be cancelled by the Company
uniformly.
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2. Equity-settled Share-based Payment
√ Applicable (A) □ Not applicable (N/A)
Unit: RMB
Determination of the fair value of equity instruments at grant date Option pricing model
To be determined according to the number of employees,
Determination of the number of equity instruments that eventually
expected return level of stock options, performance evaluation
vest
of employees, and other factors
Reasons for significant differences between the valuation during the
—
reporting period and prior periods
Cumulative amount of equity-settled share-based payment
4,036,433.14
recognized as capital reserve
Total costs recognized by equity-settled share-based payment in the
4,036,433.14
reporting period
Other notes
3. Cash-settled Share-based Payment
□ Applicable (A) √ Not applicable (N/A)
4. Modifications and Cancellations of Share-based payment
None
5. Others
Note XIV. Commitments and Contingencies
1. Significant Commitments
Significant commitments existing at the balance sheet date
As of December 31, 2019, the Company had no significant commitments required to be disclosed.
2. Contingencies
(1) Significant contingencies existing at the balance sheet date:
As the products of one client of the Company involved trademark infringement, the Company’s subsidiary Shanghai
NJDS was listed as a joint defendant, and the bank deposit of RMB 3.2 million was frozen. As ofApril15,2020, the
plaintiff and the defendant have signed a settlement agreement, Shanghai NJDS shall not be responsible for the
liability for compensation.
As of December 31,2019, the Company had no other significant contingencies required to be disclosed other than
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that mentioned above.
(2) A note is required when the Company has no significant contingency required to disclose.
The Company has no significant contingencies required to disclose other than that mentioned above.
3. Others
Note XV. Events after the Balance Sheet Date
1. Significant Non-adjusting Events
Unit: RMB
Reason for the estimation
Items Content Estimation of its financial effect
cannot be made
2. Profit Distribution
Unit: RMB
Profits or dividends proposed to be distributed 302,301,271.02
Profits or dividends declared to be distributed upon approval 302,301,271.02
3. Sales Returns
None
4. Notes to Other Events after the Balance Sheet Date
As of April 15, 2020, the Company had no other events after the balance sheet date required to disclose other than
those mentioned above.
Note XVI. Other Significant Matters
1. Corrections of Prior Period Accounting Errors
(1) Retrospective restatement method
Unit: RMB
Financial statement line items
Correction of accounting errors Treatment process affected in each comparative Cumulative effects
period
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(2) Prospective application method
Reasons for adoption of prospective
Correction of accounting errors Approval process
application
2. Debt Restructuring
3. Assets Exchange
(1) Non-monetary assets exchange
(2) Other assets exchange
4. Annuity Plan
5. Discontinued Operations
Unit: RMB
Net profit/loss
from
Income tax discontinued
Item Revenue Cost and expense Total profit Net profit
expense operation
attributable to the
parent company
Other notes
6. Segment Information
(1) Basis of identification and accounting policies of reportable segments
The Company identifies operating segments according to its internal organization structure, management
requirements and internal reporting systems. Then the reportable segments are to be determined based on the
Company’s operating segments.
An operating segment refers to a segment of the Company that simultaneously satisfies all of the following
conditions:
① The segment can earn revenues and incur expenses during the daily operations;
② The Company’s management can regularly review the segment’s operating results to determine resources to
be allocated to the segment and to assess its performance;
③ The Company can obtain the accounting information on the segment’s financial position, operating results and
cash flows.
If two or more operating segments have similar economic characteristics and satisfy certain conditions, the
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Company can combine them into one single operating segment.
The Company’s reportable segments include: NJDS brand licensing-related businesses (refer to the businesses other
than the Internet advertising business of the Company’s subsidiary Timelink, hereinafter referred to as the "NJBU
Business") and the Internet advertising business of Timelink (hereinafter referred to as "Timelink Business").
Accounting policies for operating segments of the Company are consistent with main accounting policies of the
Company.
(2) Financial information of reportable segments
Unit: RMB
Items NJBU business Timelink business Eliminations Total
Year 2019
Revenues 1,397,584,877.89 2,510,285,394.83 1,022,036.31 3,906,848,236.41
Costs of revenues 102,063,697.05 2,300,634,754.99 2,402,698,452.04
Operating expenses 171,031,114.87 71,914,352.11 1,022,036.31 241,923,430.67
Total profits 1,171,171,006.59 108,257,263.70 1,423,411.06 1,278,004,859.23
Net profits 1,099,173,887.01 108,418,634.15 1,431,536.25 1,206,160,984.91
Total assets 4,995,853,172.42 666,411,242.37 177,449,402.60 5,484,815,012.19
Total liabilities 398,385,458.50 229,010,001.58 1,307,568.75 626,087,891.33
Net assets 4,597,467,713.92 437,401,240.79 176,141,833.85 4,858,727,120.86
Year 2018
Revenues 1,037,851,981.67 2,316,017,013.90 1,009,023.10 3,352,859,972.47
Costs of revenues 74,904,813.05 2,122,237,074.81 2,197,141,887.86
Operating expenses 154,574,609.81 57,596,735.07 1,009,023.10 211,162,321.78
Total profits 831,137,418.37 130,412,388.91 -1,488,789.49 963,038,596.77
Net profits 759,857,040.33 125,933,857.89 -1,488,789.49 887,279,687.71
Total assets 3,985,746,747.25 767,988,054.86 204,486,087.40 4,549,248,714.71
Total liabilities 375,750,270.14 439,005,448.22 29,775,789.80 784,979,928.56
Net assets 3,609,996,477.11 328,982,606.64 174,710,297.60 3,764,268,786.15
Note: In accordance with the standards for business combination not under common control in the Accounting
Standards for Business Enterprises No. 20- Business Combinations, the acquirer shall recognize the fair value of
the acquiree’s identifiable assets and liabilities acquired in the combination as their book value on the acquisition
date.
The above Income Statement of Timelink Business is a fair value statement after adjustments pursuant to the
standards for business combination not under common control in the Accounting Standards for Business Enterprises
No. 20- Business Combination.
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(3) A note is required if the Company does not have any reportable segment or it is unable to
disclose total assets and total liabilities of the reportable segment.
None
(4) Other notes
① Top five clients of NJBU by operating revenue in 2019
Client name Operating revenue (RMB) % in total operating
revenue of NJBU of the
current year
Zhejiang Shangwei E-commerce Co., Ltd. 54,128,690.61 3.87
Zhejiang A*** Co., Ltd. 53,066,112.28 3.80
Changsha Jiashi Fashion Trading Co., Ltd. 34,932,087.42 2.50
Shanghai Wenjie Textile Co., Ltd. 27,425,011.64 1.96
Quanzhou Quanhong Trading Co., Ltd. 24,713,464.57 1.77
Total 194,265,366.52 13.90
② Top five clients of Timelink by operating revenue in 2019
Client name Operating revenue (RMB) % in total operating
revenue of Timelink of the
current year
Shenzhen Qianhai Xinzhijiang Information Technology Co., 492,260,132.50 19.61
Ltd.
Beijing Mai *** Co., Ltd. 270,401,252.54 10.77
Fuzhou 360 Network Petty Loan Co., Ltd. (Note 1) 168,452,185.57 6.71
Beijing Zi *** Co., Ltd. (Note 2) 163,482,085.91 6.51
Taobao (China) Software Co., Ltd. (Note 3) 92,627,266.10 3.69
Total 1,187,222,922.62 47.29
Note 1: The operating revenue from Fuzhou 360 Network Petty Loan Co., Ltd. in the reporting period shall be calculated according to
the consolidated scope, including the sales amounts from its related companies - Shanghai Qiyu Information Technology Co. Ltd., 360
Technology Group Co., Ltd., Guangrui Hengyu (Beijing) Technology Co., Ltd., Beijing Qicai Tianxia Technology Co., Ltd. and
Ningbo Qihuan Information Technology Co., Ltd.
Note 2: The total operating revenue from Beijing Zi * * * * Co., Ltd. in the reporting period shall be calculated according to the
consolidated scope, including the sales amounts from its related companies, Beijing Zi * * * Technology Co., Ltd., Beijing Zhen * * *
Co., Ltd., Beijing Yue * * * * Co., Ltd., and Beijing Micro * * * Co., Ltd.
Note 3: The total operating revenue from Taobao (China) Software Co., Ltd. in the reporting period shall be calculated according to
the consolidated scope, including the sales amounts from its subsidiary Alibaba (China) Network Technology Co., Ltd. and its related
company Zhejiang Tmall Technology Co., Ltd.
As of December31, 2019, the Company had no other significant matters to disclose other than those mentioned above.
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7. Other Significant Transactions and Matters which may have a Major Impact on Investor’s Decision-
making
8. Others
Note XVII. Notes to the Main Items of Financial Statements of the Parent Company
1. Accounts Receivable
(1) Disclosure of accounts receivable by category
Unit: RMB
Balance at the end of the reporting period Balance at the beginning of the reporting period
Book balance Bad-debt provision Book balance Bad-debt provision
Category Accrual Carrying Accrual Carrying
Proportio Proportio
Amount Amount proportio amount Amount Amount proportio amount
n n
n n
Including:
Accounts receivable
with bad debt
43,008,7 2,210,26 40,798,46 102,147,0 5,326,658 96,820,342.
provisions 100.00% 5.14% 100.00% 5.21%
35.90 8.05 7.85 01.90 .93 97
recognized
collectively
Including:
Group 1: Accounts
receivable arising
from businesses other 43,008,7 2,210,26 40,798,46 102,147,0 5,326,658 96,820,342.
100.00% 5.14% 100.00% 5.21%
than finance leasing 35.90 8.05 7.85 01.90 .93 97
business and
factoring business
43,008,7 2,210,26 40,798,46 102,147,0 5,326,658 96,820,342.
Total 100.00% 5.14% 100.00% 5.21%
35.90 8.05 7.85 01.90 .93 97
Provision for bad debt recognized individually:
Unit: RMB
Balance at the end of the reporting period
Name
Book balance Bad-debt provision Accrual proportion Reason for provision
Provision for bad debt recognized collectively:
Unit: RMB
Name Balance at the end of the reporting period
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Book balance Bad-debt provision Accrual proportion
Group 1: Accounts receivable
arising from businesses other
43,008,735.90 2,210,268.05 5.14%
than finance leasing business
and factoring business
Total 43,008,735.90 2,210,268.05 --
Note to the basis of determining the group:
Provision for bad debt recognized collectively:
Unit: RMB
Balance at the end of the reporting period
Name
Book balance Bad-debt provision Accrual proportion
Note to the basis for determining the group:
In case the bad debt provisions for the accounts receivable are recognized by the general model of expected credit
loss, please disclose the relevant information of bad-debt provision in line with the disclosure method of other
receivables:
□ Applicable (A) √ Not applicable (N/A)
Disclosure by Aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 41,812,110.90
1-2 years 1,196,625.00
Total 43,008,735.90
(2) Changes of provision for bad debt during the reporting period
Provision of bad debt during the reporting period:
Unit: RMB
Balance at the Changes during the reporting period Balance at the
Category beginning of the Recovery or end of the
Provision Write off Others
reporting period reversal reporting period
Bad-debt
5,326,658.93 -3,116,390.88 2,210,268.05
provision
Total 5,326,658.93 -3,116,390.88 2,210,268.05
Including: significant recovery or reversal of bad debt provision during the reporting period:
Unit: RMB
Entity Recovery or reversal amount Recovery method
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(3) Accounts receivable write-off during the reporting period
Unit: RMB
Items Amount written off
Including: Accounts receivable with significant balance write-off during the reporting period:
Unit: RMB
Nature of accounts Due from related
Entity Amount written off Write-off reason Write-off procedures
receivable parties or not
Note to accounts receivable write-off:
(4) Top five closing balances by entity at the end of the reporting period
Unit: RMB
Balance of account % of the balance to the Balance of bad-debt
Entity
receivable at 31/12/2019 total accounts receivable provision at 31/12/2019
Shanghai Xiaodai Finance Lease Co., Ltd. 9,524,117.06 22.14% 476,205.85
Jingzhou Hongye Knitting Apparels Co., Ltd. 6,486,437.08 15.08% 324,321.85
Xinjiang Cartelo E-commerce Co., Ltd. 5,079,281.33 11.81% 253,964.07
Hangzhou Gesa Information Technology Co.,
2,645,318.00 6.15% 132,265.90
Ltd.
Changshu Meite Wei'er Garment Co., Ltd. 2,400,000.00 5.58% 120,000.00
Total 26,135,153.47 60.76%
(5) Derecognition of accounts receivable due to the transfer of financial assets
(6) Assets or liabilities arising from continuing involvement in transferred accounts receivable
Other notes:
2. Other Receivables
Unit: RMB
Balance at the beginning of the reporting
Items Balance at the end of the reporting period
period
Other receivables 4,890,795.89 32,667,995.54
Total 4,890,795.89 32,667,995.54
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(1) Interests receivable
① Interests receivable by category
Unit: RMB
Balance at the beginning of the reporting
Items Balance at the end of the reporting period
period
② Significant overdue interest
Impairment or not (if
Balance at the end of the
Borrower Overdue time Reason for overdue have, the indications for
reporting period
that)
Other notes:
③ Provision for bad debt
□ Applicable (A) √ Not applicable (N/A)
(2) Dividends receivable
① Dividends receivable by category
Unit: RMB
Balance at the beginning of the reporting
Item (or investee) Balance at the end of the reporting period
period
② Dividends receivable over one year with significant balance
Unit: RMB
Impairment or not (if
Balance at the end of the
Item (or investee) Aging Reason for overdue have, the indications for
reporting period
that)
③ Provision for bad debt
□ Applicable (A) √ Not applicable (N/A)
Other notes:
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(3) Other receivables
① Other receivables by nature
Unit: RMB
Book balance at the end of the reporting Book balance at the beginning of the
Nature
period reporting period
Business transaction payment 8,674,881.08 35,009,362.50
Deposit 70,000.00 70,000.00
Others 2,564.87 253,521.41
Total 8,747,445.95 35,332,883.91
② Other receivables by bad debt provision method
Unit: RMB
Stage I Stage II Stage III
Expected credit loss over Expected credit loss over
Bad-debt provision Expected credit loss Total
the entire duration (without the entire duration (with
in next 12 months
credit impairment) credit impairment)
Balance at1 January 2019 2,664,888.37 2,664,888.37
Balance at1 January
2019in the reporting —— —— —— ——
period
Provision in the reporting
1,192,041.69 1,192,041.69
period
Write-off in the reporting
280.00 280.00
period
Balance at December
3,856,650.06 3,856,650.06
31,2019
Book balance changes with significant changes in loss allowance in the reporting period
□ Applicable (A) √ Not applicable (N/A)
Disclose by Aging
Unit: RMB
Aging Book balance
Within 1 year (inclusive) 5,037,117.25
1-2 years 112,100.00
2 to 3 years 6,635.00
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Above 3 years 3,591,593.70
3 to 4 years 3,591,593.70
Total 8,747,445.95
③ Changes of provision for bad debt during the reporting period
Provision of bad debt during the reporting period:
Unit: RMB
Balance at the Changes during the reporting period
Balance at the end
beginning of
Category Recovery or of the reporting
the reporting Provision Write off Others
reversal period
period
Bad-debt provision 2,664,888.37 1,192,041.69 280.00 3,856,650.06
Total 2,664,888.37 1,192,041.69 280.00 3,856,650.06
Including: Significant recovery or reversal of provision for bad debt during the reporting period:
Unit: RMB
Entity Reversal or recovery amount Recovery method
④ Other receivables written off during the reporting period
Unit: RMB
Items Amount written off
Other receivables actually written off 280.00
Including: Other receivables with significant balance write-off during the reporting period:
Unit: RMB
Nature of other Due from related
Entity Write-off amount Write-off reason Write-off procedures
receivables parties or not
Note to other receivable write-off:
⑤ Top five closing balances by entity at end of the reporting period
Unit: RMB
Proportion of the
Balance at 31 Bad-debt provisions
Entity Nature of payment Aging balance to the total
December 2019 at 31 December 2019
other receivables
Nanji E-commerce Intra-company
3,494,298.18 Within 1 year 39.95% 174,714.91
(Shanghai) Co., Ltd. transaction payment
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CARTELO
Intra-company
CROCODILE PTE 3,131,643.70 1-3 years 35.80% 3,111,213.70
transaction payment
LTD
Xinjiang Juchang E- Intra-company
776,763.40 Within 1 year 8.88% 38,838.17
commerce Co., Ltd. transaction payment
Beijing Micro
Business transaction
Streaming Technology 600,000.00 Within 1 year 6.86% 30,000.00
payment
Co., Ltd.
Hema International
Business transaction
Sports Goods 482,350.00 Above 3 years 5.51% 482,350.00
payment
(Shanghai) Co., Ltd.
Total -- 8,485,055.28 -- 97.00% 3,837,116.78
⑥ Other receivables relating to government grants
Unit: RMB
Balance at the end of the Aging at the end of the Estimated date, amount
Entity Government grant
reporting period reporting period and basis for the receipt
⑦ Derecognition of other receivables for transfer of financial assets
⑧ Assets or liabilities arising from continuing involvement in transferred other receivables
Other notes:
3. Long-term Equity Investments
Unit: RMB
Balance at the end of the reporting period Balance at the beginning of the reporting period
Items Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Investment in
3,925,133,859.28 3,925,133,859.28 3,923,819,674.95 3,923,819,674.95
subsidiaries
Investment in
joint ventures and 14,230,858.19 14,230,858.19
associates
Total 3,925,133,859.28 3,925,133,859.28 3,938,050,533.14 3,938,050,533.14
(1) Investment in subsidiaries
Unit: RMB
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Balance at 1 Changes during the reporting period Balance at 31 Balance of
January 2019 December 2019 impairment
Investees Provision for
(carrying Increase Decrease Others (carrying provision at 31
impairment
amount) amount) December 2019
Nanji E-
commerce 2,966,019,674. 2,968,933,859.
2,914,184.33
(Shanghai) Co., 95 28
Ltd.
Shanghai
Shuimishang
Culture 1,800,000.00 1,800,000.00
Communication
Co., Ltd.
Beijing
Timelink
956,000,000.0
Network 956,000,000.00
0
Technology Co.,
Ltd.
Xinjiang
Yuduocheng E-
100,000.00 100,000.00
commerce Co.,
Ltd.
Xinjiang
Jingshang E-
100,000.00 100,000.00
commerce Co.,
Ltd.
3,923,819,674. 3,925,133,859.
Total 3,114,184.33 1,800,000.00
95 28
Note: The increase of the Company's investment in its subsidiary Shanghai NJDS in 2019 is the cost accrued for
the grant of stock options to the management of the subsidiary.
(2) Investment in joint ventures and associates
Unit: RMB
Investees Balance Changes during the reporting period Balance Balance
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at 1 Gains at 31 of
Adjustme Declarati
January /(losses) December impairme
nts of on of cash Provision
2019 on Changes 2019 nt
other dividends for
(carrying Increase Decrease investmen in other (carrying provision
comprehe or impairme Others
amount) ts under equity amount) at 31
nsive distributio nt
the equity December
income n of profit
method 2019
I. Joint ventures
II. Associates
Guangzho
u XiEnEn
-
Culture 14,230,85 1,210,232
15,441,09 0.00
Communi 8.19 .89
1.08
cation
Co., Ltd.
-
14,230,85 1,210,232
Subtotal 15,441,09 0.00
8.19 .89
1.08
-
14,230,85 1,210,232
Total 15,441,09
8.19 .89
1.08
(3) Other notes
4. Operating revenues and Cost of revenue
Unit: RMB
2019 2018
Items
Revenues Costs Revenues Costs
Main business 216,999,814.62 44,031,866.73 305,731,920.09 35,740,754.29
Other business 13,516,592.83 91,698.11 7,143,990.44 48,390.61
Total 230,516,407.45 44,123,564.84 312,875,910.53 35,789,144.90
Whether the new revenue standards have been implemented?
□ Yes √ No
Other notes:
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5. Investment Income
Items (Unit: RMB) 2019 2018
Investment income from long-term equity investments under cost method 84,000,000.00
Investment income from long-term equity investments under equity method 1,210,232.89 427,104.15
Losses on disposal of long-term equity investments -308,692.70
Investment income from bank financial products 10,251,420.05 6,110,042.81
Total 11,152,960.24 90,537,146.96
6. Others
Note XVIII. Supplementary Information
1. Non-recurring Gains or Losses during the Reporting Period
√ Applicable (A) □ Not applicable (N/A)
Unit: RMB
Items Amount Notes
Losses on disposal of non-current assets -34,285.41 —
Tax refunds or reductions with ultra vires approval or without official approval documents —
Government grants recognized in current profit or loss (except government grants that is closely
related to operations and determined based on a fixed scale according to the national unified 25,146,036.05 —
standard)
Funds occupation fee recognized in current profit or loss from non-financial companies —
The excess of attributable fair value of net identifiable assets over the consideration paid for
—
subsidiaries, associates or joint ventures recognized by the Company
Gains/(losses) generated from non-monetary asset exchange —
Gains on entrusted investments or asset managements 33,933,372.78 —
Provision for impairment of each asset due to force majeure such as a natural disaster —
Gains /(losses) on debt restructuring —
Corporate restructuring charge, such as expenditure for staff resettlement and integration cost —
Gains /(losses) from excess of fair value in non-arm’s length transactions —
Net gains /(losses) of subsidiaries arising from business combination under common control from
—
the beginning of the reporting period till the combination date
Gains /(losses) arising from contingencies other than those related to normal operations of the
—
Company
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Gains /(losses) arising from changes in fair value of held-for-trading financial assets, derivative
financial assets, held-for-trading financial liabilities and derivative financial liabilities during the
holding period and investment income arising from disposal of held-for-trading financial assets,
—
derivative financial assets, held-for-trading financial liabilities, derivative financial liabilities and
other debt investment except effective hedging transactions related to the Company's normal
operations
Reversal of provision for impairment of accounts receivable tested for impairment individually 100,000.00 —
Gains /(losses) arising from entrusted loans to other entities —
Gains /(losses) arising from changes in fair value of investment properties adopting fair value
—
model for subsequent measurement
Impact of one-off adjustment to current profit or loss based on the requirements of taxation and
—
accounting laws and regulations
Custody fee income from entrusted operations —
Other non-operating income except for items mentioned above 10,199,020.48 —
Other extraordinary gains/(losses) defined —
Less: Income tax effect 11,113,272.14 —
Effect of minority interests 23,571.43 —
Total 58,207,300.33 --
Provide explanations for classifying non-recurring profit or loss items defined or listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-
Recurring Profits or Losses, and classifying non-recurring profit or loss items listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-
Recurring Profits and Losses as recurring profit or loss items.
□ Applicable (A) √ Not applicable (N/A)
2. Return on Net Assets and Earnings Per Share (‘EPS’)
EPS
Profit for the reporting period Weighted average return on net assets
Basic (RMB/share) Diluted (RMB/share)
Net profit attributable to ordinary
28.13% 0.49 0.49
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
26.77% 0.47 0.47
deducting non-recurring profits or
losses
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3. Differences in Accounting Data under Domestic and Overseas Accounting Standards
(1) Difference of net profit and net asset disclosed according to IFRS and CAS
□ Applicable (A) √ Not applicable (N/A)
(2) Difference of net profit and net asset disclosed according to overseas accounting standard and CAS
□ Applicable (A) √ Not applicable (N/A)
(3) Explanation of difference in accounting data disclosed according to overseas accounting standard and if
the accounting data has been audited by any overseas audit firm, please disclose the name of the audit firm.
4. Others
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Section 13 List of Documents for Reference
(I) Financial statements signed and sealed by the Company’s legal representative, the person in charge of accounting,
and the finance manager (accountant in charge).
(II) Original of the auditor’s report with the seal of the accounting firm and the signature and seal of the certified
public accountants.
(III) Originals of all company documents and announcements publicly disclosed on the websites designated by
CSRC during the reporting period.
Nanji E-commerce Co., Ltd.
Chairman: ZHANG Yuxiang
April 15, 2020
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