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南极电商:2019年年度报告(英文版)2020-06-24  

						                 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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                                                                     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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    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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                                                   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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           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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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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                                   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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                                                                        Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.


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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                                                                   Full Text of 2019 Annual Report of Nanji E-commerce Co., Ltd.


(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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                              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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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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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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                          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