Joyoung Co., Ltd. Abstract of Annual Report 2019
Stock Code: 002242 Stock Abbreviation: Joyoung Report No.2020-004
Joyoung Co., Ltd. Abstract of Annual Report 2019
Section I Important Statements
This is an abstract of Annual Report 2019. Investors are kindly reminded to read the complete version of Annual
Report 2019 on the website which is designated by the China Securities Regulatory Commission to get complete
information about operational results, financial statements and outlooks of the Company.
In the event of any discrepancy between the abstract and the full document of annual report, the complete version in
Chinese shall prevail.
The Board has considered and approved the following dividend distribution plan for the Reporting Period: based on the
Company's total shares of 767,312,000 by the end of December 31, 2019 and deducting the 143, 000 restricted shares to
be repurchased and cancelled by the Company, that is, based on 767,169,000 shares, it is proposed that the Company
should distribute a cash dividend of RMB 5.8 (tax inclusive) and stock dividend 0 share (tax inclusive) per 10 shares to all
the shareholders and should not convert capital reserves into share capital.
Section II Company Profile
1. Company Information
Stock Abbreviation Joyoung Stock Code 002242
Stock Exchange Where the Shares
Shenzhen Stock Exchange
of the Company are Listed
Contact Us Board Secretary Securities Representative
Name Wang Xuning (acting) Miao Minxin
No.760 Yinhai Street, Jianggan District, No.760 Yinhai Street, Jianggan District,
Address
Hangzhou, Zhejiang Province Hangzhou, Zhejiang Province
Tel. 0571-81639093 0571-81639178
E-mail 002242@joyoung.com 002242@joyoung.com
1
Joyoung Co., Ltd. Abstract of Annual Report 2019
2. Business or Product Review in the Reporting Period
In the Reporting Period, the Company continues to focus on the R&D, production and sales of small
household appliances. Following the development strategy of “targeting and upgrading kitchen”, Joyoung
is devoted to improving kitchen and ways to cook. As an American technology cleaning brand, Shark will
customize more high-quality household cleaning appliances for Chinese families.
The Company mainly operates independent R&D, design, sales and self-owned brands. Thanks to
people’s pursuit for a better and quality life and the promotion of consumption upgrade, consumer
demands for refined and user-friendly products of high quality continue to grow. In the Reporting Period,
no major changes have occurred to the Company’s main business. The Company is in the mature period
without obvious cyclical features. Major product categories of the Company all rank top 3 across the
industry domestically in China.
3. Core Competence Analysis
(1) Brand Advantage
As a national brand advocating a healthy lifestyle, Joyoung has always been a leading brand in the
industry. Joyoung has been focusing on the researching, developing, producing and selling of kitchen
appliances for healthy diet. After development of 26 years, the Company has accumulated plenty of
excellent suppliers and distributors, strong R & D team and excellent industry reputation, establishing a
good brand image in both the upstream and downstream, and moreover, in the industry. The Company
has eventually managed to transform from a soymilk maker brand to a quality life solution provider in
small household appliances, and achieved the transformation and upgrade in both brand and strategy.
At present, the Company mainly offers categories including soymilk maker, cell-wall breaking high
speed blender, electric rice cooker, electric pressure cooker, electric stew pot, kettle, noodle maker, slow
juicer, induction cooker, water purifier, dishwasher, auto-wok, air fryer, oven, oven and more. Among
them, main categories including soymilk maker, cell-wall breaking high speed blender, juicer, noodle
2
Joyoung Co., Ltd. Abstract of Annual Report 2019
maker and air fryer rank top 1 in the market and other products also rank top 3 in the market.
Established in Boston 1998, Shark, a brand that excels in cleaning technology, now ranks top 1 in the
sales of cleaning appliances in the United States. Having entered the Chinese market in 2018, Shark has
launched a variety of household cleaning appliances customized for Chinese families, including multi-flex
vacuum, steam mop, WANDVEC, etc.
(2) Channel Advantage
The Company has been deeply involved in the small household appliance industry for many years,
mainly adopting the distribution system with networks and customer resources all over the country. The
Company offers customer-centric experience and scenarios, that is, to demonstrate products and food
made with them to trigger impulsive consumption.
In 2019, the Company has achieved robust development both online and offline. Upon the existing
40,000 plus point of sales nationwide, the Company has been relentlessly optimizing its sales network
and actively exploring new retailing business. During the reporting period, dozens of branded stores and
hundreds of speciality stores have been newly opened. Through a variety interactive offline events with
Joyoung fans, consumer data has been turned into business value. Meanwhile, the Company’s
omni-channel network has also facilitated penetration into diversified customer groups.
As an important contributor of the Company’s revenue, online business has remained a robust
growth. The Company has deployed flagship stores with different focuses on categories, through which it
has better engaged the younger generation, achieved a coverage of diversified consumer groups,
strengthened consumers’ awareness of its brands and products and enhanced communication between
brands and consumers.
(3) Product Advantage
Thanks to people’s pursuit for a better and quality life and the promotion of consumption upgrade,
consumer demands for sleek, smart and quality products continue to grow. Smart appliances make it
more convenient and comfortable to use, saving time and energy for users with improved the
3
Joyoung Co., Ltd. Abstract of Annual Report 2019
user-experience, and eventually enhance the value of products and brands. The Company has launched
products in different brands with different market positioning to satisfy diversified demands of different
consumer groups. By further penetration into the market and expansion of its capacity, the Company has
been progressively obtaining more market share.
In the reporting period, based on consumer insights, the Company continues to focus on core
mainstream categories and develop products that can tackle pain-point issues with the three-tier R&D
system within the Company. The SKY series, including the K series self-cleaning cell-wall-breaking
soymilk maker, the Y series self-cleaning cell-wall-breaking high-speed blender and the S series steam
rice cooker with liner free of inner-coating, has achieved favourable feedback from the market. By
upgrading technology, the above-mentioned product series has expanded to the mass-market price
range to satisfy diversified customer demand. Or, from another perspective, the Company has managed
to penetrate its advantageous products into the mainstream segment.
Shark adheres to the concept of Innovate for User-experience. In addition to its patents in core
technologies like MultiFLEX, Duo Clean, STEAM-BLASTER. etc., Shark has explored synergy in R&D,
customized innovative products for Chinese families and actively launched multiple series of localized
and light-weighted products.
(4) Operating Advantage
In 2019, the Company continued its pursuit of value marketing. Oriented by customer demand, the
Company has been able to build an integrated business model that contributes to brand awareness,
product and user-scenario, with more resources focused on main product categories. It has facilitated the
Company’s robust and quality growth within the consumer industry and elevated brand influence.
In the 5G era, the importance of digitalization and big data utilization is more significant than ever. Via
platforms like Wechat, Weibo and Tiktok, as well as channel networks including points of sales and points
of after sales services, the Company now has over 20 million user-followers. A huge opportunity lies in
maintaining existing user-followers and attracting new ones.
4
Joyoung Co., Ltd. Abstract of Annual Report 2019
To digitalize business operations, user networks and scenarios, the Company is exploring and
practising new retailing and live-streaming. The Company is dedicated to build a one-stop, visible and
interactive shopping scenario for consumers. It is also more convenient to monitor and share data,
interact with fans, direct costumer traffic and dispatch products from warehouses closest to customers.
The Company has also developed a new network operation and maintenance support platform using
modern information systems such as Product Tracking System (PTS), Warehouse Management System
(WMS) to achieve integration of software and hardware intelligence. It has realized equipment
management, remote control, information collection, fault diagnosis, information push, etc., and provided
real-time expert interactive assistance with image function, pre-sales and after-sales services.
4. Key Accounting Data and Financial Indicators
(1) Key Accounting Data and Financial Indicators in Recent Three Years
Whether the Company performed a retroactive adjustment to or restatement of accounting data
□ Yes √ No
Unit: RMB Yuan
2019 2018 Flux (%) 2017
Operating revenues 9,351,439,510.07 8,168,708,704.23 14.48% 7,247,524,855.71
Net profits attributable to
824,105,192.42 754,255,160.96 9.26% 688,918,657.33
shareholders of the Company
Net profits attributable to
shareholders of the Company
754,001,863.43 569,149,447.51 32.48% 605,300,787.82
before non-recurring gains and
losses
Net cash flow from operating
1,253,024,651.38 408,700,191.24 206.59% 48,903,264.69
activities
Basic earnings per share (RMB
1.07 0.99 8.08% 0.90
Yuan /share)
Diluted earnings per share
1.08 0.99 9.09% 0.90
(RMB Yuan /share)
Weighted average ROE 21.22% 20.70% 0.52% 18.40%
As of 31 December, As of 31 December, As of 31 December,
Flux (%)
2019 2018 2017
5
Joyoung Co., Ltd. Abstract of Annual Report 2019
Total assets 7,467,802,731.42 6,660,086,381.54 12.13% 5,350,746,142.18
Net assets attributable to
3,753,065,661.20 3,810,291,395.62 -1.50% 3,574,555,421.97
shareholders of the Company
(2) Main Accounting Data by Quarter
Unit: RMB Yuan
2019 Q1 2019 Q2 2019 Q3 2019 Q4
Operating revenues 1,798,604,618.75 2,388,365,703.12 2,068,019,945.39 3,096,449,242.81
Net profits attributable to
163,025,602.23 242,979,796.99 211,822,515.10 206,277,278.10
shareholders of the Company
Net profits attributable to
shareholders of the Company
153,674,909.70 223,812,148.59 205,099,809.10 171,414,996.04
before non-recurring gains and
losses
Net cash flow from operating
177,432,841.43 -623,370.97 745,207,988.94 331,007,191.98
activities
Whether there are significant differences between the above financial data or the total value previously disclosed quarterly
or interim reports.
□ Yes √ No
4. Shareholders and Shares
(1) Total number of common shareholders and shareholdings of the top ten common shareholders at the
period-end
Unit: share
Total number of Total number Total number of
common of preferred preferred
Total number of
shareholders at shareholders shareholders with
common
the end of the with resumed resumed voting rights
shareholders at 26,458 23,438 0 0
previous month voting rights at the end of the
the end of the
of the disclosure at the end of previous month of the
Reporting Period
date of this the Reporting disclosure date of this
report Period report
Top 10 common shareholders
6
Joyoung Co., Ltd. Abstract of Annual Report 2019
Shareh Pledged or frozen
Nature of Total shares Number of
olding shares
Name of shareholder sharehold held at the restricted
percent
er period-end shares held Status Number
age
Domestic
non-state-
Shanghai Lihong Enterprise
owned 50.11% 384,523,746 Pledged 339,272,626
Management Limited
corporatio
n
Foreign
BILTING DEVELOPMENTS
corporatio 16.93% 129,924,090
LIMITED
n
State-own
ed
Central Huijin Investment Ltd. 4.99% 38,310,500
corporatio
n
Foreign
Hong Kong Securities Clearing
corporatio 4.61% 35,367,420
Co., Ltd.
n
E Fund Management Co., Ltd. -
Social Insurance Fund Portfolio Others 1.11% 8,500,000
No. 1104
Agricultural Bank of China Co.,
Ltd. - CSI 500 Exchange Trade Others 0.40% 3,067,982
Fund
National Social Security Fund
Others 0.40% 3,057,400
Portfolio No. 418
Basic Pension Insurance Fund
Others 0.38% 2,889,224
Portfolio No. 1205
Basic Pension Insurance Fund
Others 0.36% 2,750,098
Portfolio No. 808
Bank of Communications Co.,
Ltd. - E Fund Kexun Mixed Others 0.34% 2,612,360
Securities Investment Fund
7
Joyoung Co., Ltd. Abstract of Annual Report 2019
In April 2019, the shareholding structure of Builting Developments Limited changed.
MR. Xuning WANG, the controlling shareholder of the Company, became the
controlling shareholder of Builting Developments Limited (See Report No. 2019-027 of
the Company on www.chinainfo.com.cn.). As a result, Shanghai Lihong Enterprise
Related or acting-in-concert
Management Co., Ltd. and Builting Developments Limited, both controlled by Mr.
parties among shareholders
Xuning WANG, are defined as acting-in-concert parties by the Administrative
above
Measures for the Takeover of Listed Companies.
Other than the aforementioned related and acting-in-concert parties, the Company is
uncertain about whether there are related or acting-in-concert parties among
shareholders above.
Explanation on common
shareholders participating in
N/A
securities margin trading (if
any)
8
Joyoung Co., Ltd. Abstract of Annual Report 2019
(2) Disclose the property rights and control relationship between the Company and the actual controller in
block diagram form
Section III Performance Discussion and Analysis
1. Performance Review of the Reporting Period
At present, post-95s and post-00s have gradually become the mainstream consumer group of the
new era. The younger generation is used to on-line shopping, and more open to new things, new
channels, and new lifestyles with higher standards. The Company has actively explored new categories,
new channels, new media, etc., and explored the integration of on-line and offline development to the
greatest extent to meet the new demands represented by millennial consumer groups.
9
Joyoung Co., Ltd. Abstract of Annual Report 2019
In the context of coexisting consumption upgrades and tiering, the Company adheres to value
marketing. Through technological innovation and smart manufacturing to create mainstream core new
products, the Company endeavours to meet the needs of diversified consumer groups for quality small
household appliances, and strive to improve its profitability and brand influence.
For the year of 2019, the Company has achieved operating revenues of 9,351.44 million Yuan, an
increase of 14.48% year on year. Categories including food processor and nutritious food cooker both
have achieved robust growth. The western appliances category has maintained steady growth. With the
ongoing optimization of product mix, the Company now has a more comprehensive product portfolio
instead of heavily reliant on a single category.
For the year of 2019, cost of sales were 6,310.18 million Yuan, an increase of 13.82% year on year.
Gross profit margin of the Company was up by 0.39 percentage point year on year.
Sales expenses were 1,476.53 million Yuan, up by 7.25% year on year, with sales expenses ratio at
15.79%, down by 1.06 percentage points. General and administrative expenses were 388.89 million Yuan,
up by 25.32% year on year, with its ratio at 4.16%, up by 0.36 percentage point; research and
development expenses were 330.38 million Yuan, a year-on-year increase of 10.99%.
For the year of 2019, total profits of the Company were 939.92 million Yuan, up by 7.91%
year-on-year. Net profits attributable to the Company’s shareholders were 824.11 million Yuan, up by
9.26% year-on-year.
For the year of 2019, net operating cash flow was 1,253.02 million Yuan, a 206.59% year-on-year
increase due to rapid growth of operating revenue and good cash collection.
In the Reporting Period, the company continued to focus on the small household appliance industry,
actively engage in the development of 5G mobile internet, and strive to achieve a comprehensive digital
transformation, achieving cross-border operations in different fields such as social e-commerce, on-line
live streaming, and O2O new retailing, allowing the seamless integration of brands, products, and users.
Pioneer in R&D and Smart Products, with Focus on Mainstream Categories
10
Joyoung Co., Ltd. Abstract of Annual Report 2019
Since established, the Company has always attached great importance to the reserve and output of
technology research and development. In 2019, the Company has explored the forward-looking
innovative technologies, focused on mainstream demand categories, improved the R&D system and
mechanism, and introduced senior R & D talents to effectively promote technological progress and
innovation. In the Reporting Period, the Company has obtained 1,770 new patent rights, including 256
patent rights for inventions, 1,316 patent rights for utility models and 198 patent rights for industrial
designs. By the end of the Reporting Period, the Company owned a total of 6,521 patent rights, including
316 patent rights for inventions, 5,284 patent rights for utility models and 921 patent rights for industrial
designs, which laid a solid foundation for the Company to continuously create advantageous core
products with competitive edges.
With its three-tier R&D system, the Company can react quickly to market demand, satisfy consumer’s
demand for quality lifestyle small household appliances and keep leading the industry. The Company is
highly invested in R&D, bringing sustainable innovation momentum. It strives to provide quality products
with the spirit of craftsmanship, create value and enhance brand property. Hence, customers are
well-aware of Joyoung as an innovative, dynamic and value-added brand that facilitates healthy lifestyle
and can be trusted, which will promote the steady development of the Company.
In 2019, the Company intensively promoted the innovative SKY series, including the K series
self-cleaning cell-wall-breaking soymilk maker, the Y series self-cleaning cell-wall-breaking high-speed
blender and the S series steam rice cooker with liner free of inner-coating. By upgrading technology, the
Company has expanded the aforementioned product series to the mass-market price range to satisfy
diversified customer demand. Meanwhile, the Company has also collaborated with trendy IPs, e.g. LINE
FRIENDS, in multiple categories, attracting younger generations and stimulated purchases. Such
collaborations with IPs have helped Joyoung, the national brand advocating healthy lifestyle, further
penetrate to younger generations.
Brand Communication Upgrade and Cross-Channel Integration
11
Joyoung Co., Ltd. Abstract of Annual Report 2019
Healthiness has always been in the DNA of the Company. In recent years, the Company's brand
positioning and communication methods have become younger. In early 2019, the Company signed an
A-lister, Deng Lun as the brand ambassador, reaching the target group in a proactive and precise manner.
The Company is persistent in value creating and value marketing. Upon maintaining traditional media
communication, it has been actively promoting new media such as outdoor media, social media and
vertical media. To cater to the new development trend of 5G mobile internet, it has also been using
emerging communication channels such as short videos, on-line live streaming, content influencing, and
in-depth experience to interact with fans, users, and consumers at high frequency and quality. In such
manner, the Company has been continuously improving the brand influence as well as brand awareness,
loyalty and willingness to purchase among the main consumer groups in the new era.
To adapt to the development of the new economy, the Company has been actively cooperating with
major live-streaming platforms. Having seized the opportunity in on-line live-stream marketing, the
Company was able to broaden communication channels and establish a comprehensive live-streaming
hosts system consists of celebrities, KOLs (Key Opinion Leader) and KOCs (Key Opinion Customer).
During the COVID-19 outbreak, the Company has started a campaign of “stay healthy, stay at home
challenge”. It took the form of live streaming by online and offline stores and shopping guides and created
a huge influence.
In 2019, the Company actively deployed and expanded the offline new retailing channel. It has not
only optimized traditional POS, but also promoted the development of high-end brand stores especially
those in shopping malls, through which the Company has explored offline channel operations with higher
cost, more customer traffic and higher added-value. Facing the drastic changes in traditional retail
channels, the Company proactively adapted to the new trend of online and offline omni-channel
development, gradually diminished the definition and division of labour of traditional channels and
established an omni-channel development strategy. Now, it offers O2O new retailing experience including
content influencing, offline experience, online ordering, quick delivery, and on-site service, which has
12
Joyoung Co., Ltd. Abstract of Annual Report 2019
shortened the distance with consumers, users, and fans. Meanwhile, it has also helped accumulate a
database of tens of millions of users and fans, which has provided massive volume of big data for future
in-depth excavation of digital economy.
In 2019, the on-line retail sales of physical goods were 8.5 trillion Yuan, a year-on-year increase of
19.5%, accounting for 20.7% of the total retail sales of consumer goods. In 2019, the Company's online
business maintained a relatively strong growth, and has contributed substantially to total revenues. The
proportion of online revenue in total revenues of the Company was also higher than much of the industry.
2. Whether there is significant change in the main business during the Reporting Period
□ Yes √ No
3. Products accounting for above 10% of the Company’s main revenue or profit
Unit: RMB Yuan
Gross Operating Gross profit
Operating Operating profits
Product Operating profits profit revenues flux margin flux
revenues flux (%)
margin (%) (%)
Food processor 4,096,943,718.53 1,615,877,668.15 39.44% 20.20% 21.53% 0.43%
Nutritious food
3,105,020,253.15 777,031,079.12 25.02% 13.32% 8.86% -1.03%
cooker
Western
1,153,044,666.20 387,180,794.82 33.58% 7.23% 11.13% 1.18%
appliance
4. Events Related to Financial Statements
(1) Statements of Any Changes in Accounting Policies, Accounting Estimates and Accounting Methods
as Compared to the Financial Report for the Prior Year.
① On March 31, 2017, the Ministry of Finance issued the “Accounting Standards for Business
Enterprises No. 22 – Recognition and Measurement of Financial Instruments” (Accounting [2017] No. 7)
and “Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets” (Finance
[2017] No. 8), on May 2, 2017, the “Accounting Standards for Business Enterprises No. 37 – Financial
Instruments Presentation” (Accounting [2017] No. 14) (collectively referred to as the “New Financial
13
Joyoung Co., Ltd. Abstract of Annual Report 2019
Instruments Guidelines”) was issued and required The listed companies in China alone will be
implemented on January 1, 2019.
② On April 30, 2019, the Ministry of Finance issued the “Notice on Amending and Distributing the
Format of Financial Statements of General Enterprises for 2019” (Accounting [2019] No. 6), which revised
the format of general enterprise financial statements. The Company has adopted the retrospective
adjustment method and has adjusted the comparative data of comparable accounting periods
accordingly.
③ On September 19, 2019, the Ministry of Finance issued the “Notice on Revision and Issuance of
the Format of Consolidated Financial Statements (2019 Edition)” (Accounting [2019] No. 16), which is
applicable to companies that implement corporate accounting standards in preparing the 2019
consolidated financial statements and that of subsequent periods. According to the relevant requirements
of the Ministry of Finance, the Company has changed the accounting policies.
(2) Statements about Retrospective Restatement of Major Accounting Errors in the Reporting Period
□ Applicable √ Not applicable
None in the Reporting Period.
(3) Statements for Changes in Scope of the Consolidated Financial Statements as Compared to the
Financial Report for the Prior Year
Hangzhou Jiuyang Company, a subsidiary of the Company, established a non-wholly-owned
subsidiary Hengqinjiujiu Company with a capital of RMB 19,798,000 Yuan on May 24, 2019, with a share
of 98.99%.
Section IV. Outlook for the Company's Future Development
1. Analysis of the External Environment Faced by the Company
In 2019, China's economy faced downward pressure, with increasing external challenges and many
14
Joyoung Co., Ltd. Abstract of Annual Report 2019
other adverse factors. Under the strong leadership of the Central Committee of the CPC represented by
General Secretary Xi, the economy continued to achieve high-quality growth throughout the year, with
people being better off. Earlier, the report of the Nineteenth National Congress of the CPC also pointed
out that the main contradiction of Chinese society has been transformed into "the contradiction between
the people's growing needs for a better life and imbalanced and insufficient development". It identifies that
people’s main aspiration is shifting from subsistence to quality life.
Referencing to the history of household appliances consumption in developed economies, it can be
concluded that, along with the improvement of income level, household appliances consumption will be
shifting from large appliances with emphasis on functionality to small appliances with emphasis on quality
consumption. It is expected that the small household appliance industry will continue to improve in the
future, with much room to grow.
In turn, it is necessary for small appliances companies to make transformation and actively satisfy the
demands of consumer groups in the new economic era in regard of technology R&D, product design,
brand positioning, communication language, sales media, etc. As a leading brand in the domestic small
household appliance industry, the Company has conducted in-depth research on new changes in the
market and has accumulated rich experience and prepared a systematic response strategy.
2. Future Development and Business Operation Plan of the Company
Joyoung has transformed into a younger brand with the launch of its new brand advocate, enjoy
health. In the future, the Company will continue to focus on small household appliances and innovate in
mainstream products and categories by being customer-centric and demand-oriented. Joyoung will
continue to implement the developing strategy of “focus and upgrade kitchen”. In the meantime, Shark will
root itself in household cleaning appliances and dedicated to becoming No.1 in this segment worldwide.
Upon the its commercialization, 5G network will become "the new infrastructure" in the process of
social and economic development. It is particularly important to fully implement the digital transformation
to adapt to mobile internet and explore new retailing model of the future. Driven by momentums in product
15
Joyoung Co., Ltd. Abstract of Annual Report 2019
and channel and oriented by customer demand, the Company proposes to attract more consumers of the
new era with its innovative products that are sleek and light-weighted, smart and easy-to-use and provide
choices of supplementary ingredients. Moving forward, the Company will also actively grasp business
opportunities in the new economy and live streaming, proactively cater to new customer behaviour and
demand, intensively promote digital and social network-reliant new retailing and widely develop new
users, attract new fans and establish new channels, through which it will create a new retail operation
model customized for its development.
In the future, the Company will also continue to explore opportunities of extensive development and
look for favourable expansion opportunities to strategically acquire brands, resources, products, channels,
talents, etc., to sustain longer term development.
16
