Winner Medical Purcotton
Winner Medical Co., Ltd.
Annual Report
Caring for health and life, making a better world
Winner Medical
To Shareholders
Dear shareholders and partners:
The challenging and volatile year of 2023 has passed, and through the collective efforts of the entire Winner Medical team, we
have achieved this hard-won outcome. We are grateful for the strong support of the investors and partners from all sectors,
without whom this accomplishment would not have been possible. On behalf of the Company’s Board of Directors and
management, we sincerely thank you for your understanding and assistance.
For Winner Medical, 2023 was exceptionally difficult.
The macroeconomic environment presented numerous challenges, with a sharp decline in demand for infection protection
products and a volatile and segmented consumer market. These factors significantly impacted our production and operations. The
severity of external impacts made ensuring a smooth transition of the Company’s overall operations the primary concern for
management throughout the year.
In 2023, the entire industrial chain of infection protection products grappled with excess inventory. Despite this challenge, the
medical business team rose to the occasion, innovating and proactively adjusting the product structure while actively seeking
opportunities and breakthroughs. For our infection protection products, we decisively and efficiently managed inventory and
disposed of equipment. Simultaneously, we proactively collaborated with suppliers, distributors, and customers to navigate
through challenges and weather the industry downturn together. We steadfastly uphold the principle that in times of difficulty, we
must not pass the burden onto others but work collectively to find solutions. It’s through joint efforts during crises that we forge
enduring and healthy cooperative relationships. As the domestic market continues to adjust in 2023, we recognize the importance
of seizing opportunities in foreign markets. We dedicated considerable efforts to this endeavor, with management frequently
exploring international markets to secure business opportunities and expand our market share. Additionally, after a year of
empowerment, efficiency enhancements, and resource integration, it yielded positive results in terms of business synergy and
value optimization across the merged companies. Overall, while the scale of medical business revenue experienced a decline due
to a high base figure, our businesses gradually returned to normal this year. Excluding infection protection products, revenue from
conventional medical products saw double-digit growth, stabilizing the fundamentals of our long-term business development and
showcasing the resilience of our operations for sustained growth.
In 2023, amidst the general recovery of the consumer market, the trend of consumption stratification and the coexistence of
pleasure and rationality significantly influenced the competitive landscape of the segment. Moving forward, the Consumer Goods
business team will persist in exploring the essence of “rationality” under pressure. We hold the belief that “rationality” does not
equate to low prices; instead, its core should embody the concept of value for money. As a result, we have consistently upheld our
strategic strength by maintaining product leadership, prioritizing the development of the cotton category, exercising control over
discounts, and ensuring the provision of high-quality, differentiated cotton products to consumers at reasonable prices. We
prioritize consumer demand as our core focus, implementing an explosive product strategy by actively innovating, accelerating
new product launches, and expanding channels. We are committed to strengthening the brand building of Purcotton, refining
management practices, and ultimately driving steady growth in revenue and profitability. Simultaneously, our overseas division of
Purcotton was established in August last year, and we are steadily testing the waters and gradually promoting the brand globally.
The quality of Purcotton’s operations remains robust, demonstrating strong potential for overall development.
Reflecting on the past year, we confronted the challenges of the downturn cycle with resilience, persevering while upholding our
business fundamentals and continually enhancing operational quality. As we reflect on our past experiences, it’s essential to also
gaze ahead to chart our course. As the industry cycle continues to unfold, Winner Medical has adeptly navigated through four
economic cycles over its 33-year history. Our resilience stems from consistently meeting the needs of our target consumers and
customers, maintaining steadfastness in our strategic goals despite short-term temptations most importantly, embodying our core
values of “quality over profit, brand over speed, and social responsibility over corporate value”. These principles have formed the
bedrock of our long-term development and are the critical success factors we must remain committed to.
In the long run, our business has consistently revolved around life, health, and people’s quest for a better quality of life.
The industry we operate in follows a high-quality trajectory with ample opportunities for long-term survival and
expansive growth. Externally, the prevailing trend emphasizes green, health, and sustainable development. Within the medical
sector, the emergence of trends such as the silver economy, domestic substitution, and consumer medical care is poised to unlock
significant market opportunities for Winner Medical. In the consumer goods industry, our products boast just-in-demand,
high-frequency, high-quality, and safe characteristics. The Cotton Era’s commitment to delivering high-quality products will
persist in meeting consumers’ unwavering pursuit of safety and quality of life. Furthermore, our continuously enhancing brand
awareness and reputation will serve as pivotal assurances for steadfast development along the quality trajectory.
2
2023 Annual Report
While our brand and operational management capabilities have accumulated over time, there remains ample room for
refinement. Moving forward, we are dedicated to further enhancing these aspects of our business.
In our medical business, we prioritize investment in research and development, boasting a remarkable advantage in the number of
medical product registration certificates. This forms a robust competitive barrier and supports our strategic goal of “one-stop
procurement of global medical consumables”. Over the past three years, our medical brand has built valuable awareness and
reputation. Converting this reputation into sales and channel capacity to drive growth is now a critical business focus. Moving
forward, we aim to enhance the service response capability for major overseas customers, expedite entry into domestic hospitals,
and advance the best-selling product strategy for C-end channels. We should embrace a strategy of “leading products with
operational excellence” while breaking free from past inertia. It’s crucial to establish specialized capabilities for deep industry
engagement under the new normal. Refined management tailored to the unique characteristics of products and channels is
imperative.
In terms of consumer goods business, Purcotton stands as a national brand with widely acknowledged product quality. We’ve laid
the groundwork for a product concept centered on “comfortable, healthy, and environmentally friendly”, garnering initial traction.
Moreover, our core best-selling products have demonstrated consistent growth in performance. In light of the current era of
rational consumption, we must address challenges without merely chasing short-term trends. Instead, we must approach it
wholeheartedly, taking action to deliver unmatched comfortable, healthy, and environmentally friendly benefits to consumers.
Simultaneously, we should adapt our sales strategies to align with evolving consumer shopping habits, facilitating conversion and
creating synergies. We aim to tell the Purcotton’s story, allowing consumers to recognize our commitment to cotton quality, our
innovations in cotton fabric processing technology, and our ongoing dedication to meeting consumer needs. In terms of channels,
our online e-commerce efforts will focus on boosting product market share to capture a larger portion of the market. Offline stores
will work on enhancing operational efficiency while steadily expanding, aiming to increase store penetration rates.
In terms of operations and management, we’ll leverage cutting-edge information technology, the metaverse, artificial intelligence,
and other advanced technologies to progressively implement basic management processed, process management digitized, and
digital management intelligence, ultimately enhancing overall operational efficiency and quality. Regarding organization and
talent development, we’ll stay committed to the “four highs” talent concept: “high quality, high efficiency, high performance and
high reward”. We’ll gradually adjust the talent structure and actively enhance the organization’s capacity and talent density,
ensuring a solid foundation for strategic policy implementation.
In the long term, corporate culture serves as the intangible asset that unifies and rejuvenates the organization throughout
its development journey. Our core operating principle is “quality over profit, brand over speed, and social value over corporate
value”. We will stick by our core values of “hard work, self-criticism, exploration and innovation, and sustainable development”.
The Company operates with honesty and integrity, actively embracing social responsibility. Our enterprising culture,
characterized by upward striving, inspires all stable and healthy individuals, eventually coalescing into a strong fighting force
driving the Company’s continuous development. This ethos forms the resilient backbone driving our continuous development,
embodying the enduring spiritual essence we uphold.
Encourage people to pave the way for success, one step at a time.
With a development history of 33 years for Winner Medical and 15 years for Purcotton, we believe in the importance of long-term
commitment to navigate through cycles. Our endurance hinges on consistently delivering value to customers and consumers.
Under the strategic framework of “leading products with operational excellence”, the Company has a clear development path. All
staff will adopt an integrated approach, seizing every market opportunity with a proactive mindset, and striving for excellence in
every detail. In the future, we will all continue to strive, forge ahead, and endeavor to propel the Company toward “a century of
Winner Medical”!
Li Jianquan
Chairman and general manager of Winner Medical
April 23, 2024
3
Guo Jingjing
Purcotton
Brand Ambassador
of
Section Ⅰ
Important Notes, Contents, and
Definitions
4
Important Notes
The board of directors, the board of supervisors and directors, supervisors and senior management of the Company hereby
guarantee that no false or misleading statement or major omission was made to the materials in this report and that they will
assume all the responsibility, individually and jointly, for the authenticity, accuracy and completeness of the contents of the
annual report.
Li Jianquan, the head of the Company, Fang Xiuyuan, the head of accounting work, and Wu Kezhen, the head of accounting body
(accountant in charge), guarantee the authenticity, accuracy, and completeness of the financial report in the current year report.
All directors of the Company personally attended the board meeting for reviewing this report.
In 2023, the net profit attributable to shareholders of the listed company amounted to 580 million yuan, marking a year-on-year
decrease of 64.84%. This decline was primarily attributed to three factors: (1) The impact of public health events resulted in a
significant drop in market demand for infection protection products, leading to a decrease in operating income by approximately
3.82 billion yuan compared to the previous year, consequently causing a substantial decline in net profit attributable to the
Company. (2) The Company addressed the decrease in demand for infection protection products by disposing of related
production equipment, resulting in a reduction in net profit of about 250 million yuan. (3) Additionally, the impairment of
goodwill further reduced net profit by approximately 188 million yuan. The Company’s business performance aligns with
industry trends, and there are no significant risks to its ability to continue operating.
The forward-looking contents in this report, such as the future development strategy and performance planning, are the goals sets
by the Company, which are planned matters. The achievement of the goals depends on many factors, including market change,
which is uncertain. So these contents are not the Company’s profit forecast for the next year and do not constitute a substantial
commitment of the Company to investors and related parties. Investors and related parties should be fully aware of related risks
and understand the differences among plans, forecasts, and commitments. Investors are asked to beware of investment risks!
The profit distribution proposal considered and approved by the Board of Directors is as follows: a cash dividend of 5.00 yuan
(inclusive of tax) per 10 shares to all shareholders, based on 583,938,148 shares after deduction of repurchased shares.
Additionally, there are no bonus shares or transfer of shares from the capital reserve.
5
Winner Medical
Contents
Section Ⅰ Important Notes, Contents, and Definitions ............................................................................................ 4
Section Ⅱ Company Profile and Major Financial Indicators .................................................................................. 9
Section Ⅲ Management Discussion and Analysis ................................................................................................ 15
Section Ⅳ Corporate Governance .........................................................................................................................75
Section V Environmental Protection and Social Responsibility .........................................................................101
Section VI Important Matters .............................................................................................................................. 113
Section Ⅶ Changes in Shares and Shareholders ............................................................................................... 126
Section Ⅷ Preferred Shares-related Information ............................................................................................. 136
Section Ⅸ Bond-related Information ..................................................................................................................137
Section Ⅹ Financial Report ..................................................................................................................................138
6
Document Catalog
(I) Financial statements containing the signatures and seals of the person in charge of the Company, the accounting head,
and the person in charge of the accounting body (accounting manager).
(II) The original audit reports with the seal of the accounting firm and the signatures and seals of the certified public
accountants.
(III) The originals of all Company documents and announcements publicly disclosed during the reporting period.
7
Winner Medical
Definitions
Term Refers to Definition
Company, Winner Medical Refers to Winner Medical Co., Ltd.
Reporting period Refers to Sunday, January 1, 2023 to Sunday, December 31, 2023
Purcotton Refers to Shenzhen Purcotton Technology Co., Ltd., a wholly-owned subsidiary of the Company
Longterm Medical Refers to Zhejiang Longterm Medical Technology Co., Ltd., of which the Company acquired 55% equity in 2022
Winner Medical (Hunan) Refers to Winner Medical (Hunan) Co., Ltd., of which the Company holds 68.70% equity after acquisition and capital
increment in 2022
Winner Guilin Refers to Winner Guilin Latex Co., Ltd., of which the Company has acquired its equity in 2022
Winner Jinzhou Refers to Winner (Jinzhou) Latex Products Co., Ltd., a company acquired by its subsidiary Winner Guilin Latex Co.,
Ltd. in 2023 with 100% equity
Junjian Medical Refers to Shenzhen Junjian Medical Device Co., Ltd., of which the Company has acquired 100% equity in 2022
Winner Medical (Huanggang) Refers to Winner Medical (Huanggang) Co., Ltd., a wholly-owned subsidiary of the Company
Winner Medical (Jiayu) Refers to Winner Medical (Jiayu) Co., Ltd., a wholly-owned subsidiary of the Company
Winner Medical (Chongyang) Refers to Winner Medical (Chongyang) Co., Ltd., a wholly-owned subsidiary of the Company
Winner Medical (Jingmen) Refers to Winner Medical (Jingmen) Co., Ltd., a wholly-owned subsidiary of the Company
8
Company Profile and Major
Financial Indicators
Section Ⅱ
Purcotton
Purcotton Home Textiles and
Home Apparel
Global spokesperson Zhao Liying
Winner Medical
I. Company information
Stock abbreviation Winner Medical Stock code 300888
Company name in Chinese Winner Medical Co., Ltd.
Chinese abbreviation of the Company Winner Medical
Company name in foreign language (if any) Winner Medical Co., Ltd.
Company short name in foreign language (if any) Winner Medical
Legal representative of the Company Li Jianquan
F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi
Registered address: Subdistrict, Longhua District, Shenzhen City;
Winner Industrial Park, No.660 Bulong Road, Longhua District, Shenzhen City
Postal code of the Company’s registered address 518131
On June 1, 2021, the Company completed the registration of industrial and commercial change of
registered address from “Winner Industrial Park, No. 660 Bulong Road, Longhua New District,
Change history of the Company’s registered address Shenzhen City” to “F42, Building 2, Huilong Business Center, Shenzhen North Railway Station
Area, Minzhi Subdistrict, Longhua District, Shenzhen City; Winner Industrial Park, No.660 Bulong
Road, Longhua New District, Shenzhen City”
F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi
Office address of the Company
Subdistrict, Longhua District, Shenzhen City
Postal code of the Company’s office address 518131
Website http://www.winnermedical.com
Email investor@winnermedical.com
II. Contacts and contact information
Secretary to the Board of Directors Securities affairs representative
Name Chen Huixuan Liu Yanxiang
F42, Building 2, Huilong Business Center, F42, Building 2, Huilong Business Center,
Contact address Shenzhen North Railway Station Area, Minzhi Shenzhen North Railway Station Area, Minzhi
Subdistrict, Longhua District, Shenzhen City Subdistrict, Longhua District, Shenzhen City
Tel 0755-28066858 0755-28066858
Fax 0755-28134688 0755-28134688
Email investor@winnermedical.com investor@winnermedical.com
10
III. Information disclosure and keeping place
Website of the stock exchange where the Company discloses its annual
http://www.szse.cn/
report
Name and websites of the media on which the Company discloses its annual
http://www.cninfo.com.cn/new/index
report
Place of preparation of the Company’s annual report Securities Department of the Company
IV. Other relevant information
Accounting firm engaged by the Company
BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS
Name of the accounting firm
LLP
Office address of the accounting firm Floor 4, No. 61, Nanjing East Road, Huangpu District, Shanghai
Name of signatory accountant Cheng Jin, Wu Lihong
The sponsor institution engaged by the Company to perform the continuous supervision responsibility during the reporting period
√Applicable □ Not applicable
Name of sponsor
Name of sponsor institution Office address of sponsor institution Continuous supervision period
representative
27th and floors, Tower 2, International
28th
China International Capital Shen Lulu, Wang From the date of initial public offering to
Trade Building, No. 1, Jianguo Menwai Main
Corporation Limited Shenchen December 31, 2023
Street, Chaoyang District, Beijing
The financial advisor engaged by the Company to perform the continuous supervision responsibility during the reporting period
□ Applicable √ Not applicable
V. Major accounting data and financial indicators
Whether the Company needs to retroactively adjust or restate the accounting data of the previous years
√ Yes □ No
Retroactive adjustment or restatement of reasons
11
Winner Medical
Changes in accounting policies
Increase/decrease this
2022 year compared to the 2021
2023 previous year
Before adjustments After adjustments After adjustments Before adjustments After adjustments
Operating income (yuan) 8,185,022,057.20 11,351,331,545.08 11,351,331,545.08 -27.89% 8,037,420,812.91 8,037,420,812.91
Net profits attributable to shareholders of
580,403,232.37 1,650,582,427.43 1,650,717,282.64 -64.84%1 1,239,320,067.26 1,254,164,970.92
listed companies (yuan)
Net profits attributable to shareholders of the
listed company after deduction of 412,027,497.25 1,560,914,973.08 1,561,049,828.29 -73.61% 1,029,005,582.98 1,043,850,486.64
non-recurring profits and losses (yuan)
Net cash flow from operating activities (yuan) 1,063,326,232.23 2,983,472,230.27 2,983,472,230.27 -64.36%2 871,689,901.93 871,689,901.93
Basic EPS (yuan/share) 0.98 3.90 2.79 -64.87% 2.91 2.11
Diluted EPS (yuan/share) 0.98 3.90 2.79 -64.87% 2.91 2.11
Weighted average return on net assets 5.03% 14.89% 14.87% -9.84% 11.76% 11.89%
Increase/decrease at the
end of this year
End of 2022 End of 2021
End of 2023 compared to the end of
the previous year
Before adjustments After adjustments After adjustments Before adjustments After adjustments
Total assets (yuan) 17,112,022,449.97 18,237,749,401.56 18,252,727,626.66 -6.25% 13,266,610,200.37 13,281,456,374.32
Net assets attributable to shareholders of listed
11,533,224,328.00 11,704,606,570.71 11,719,585,811.13 -1.59% 10,674,912,166.80 10,689,757,070.46
companies (yuan)
Note 1: This decline of 64.84% was primarily attributed to three factors: (1) The impact of public health events resulted in a
significant drop in market demand for infection protection products, leading to a decrease in operating income by approximately
3.82 billion yuan compared to the previous year, consequently causing a substantial decline in net profit attributable to the
Company. (2) The Company addressed the decrease in demand for infection protection products by disposing of related
production equipment, resulting in a reduction in net profit of about 250 million yuan. (3) Additionally, the impairment of
goodwill further reduced net profit by approximately 188 million yuan.
Note 2: The 64.36% decline in net cash flows from operating activities was primarily attributed to the decrease in revenue from
the Company’s medical business.
Reasons for changes in accounting policies and correction of accounting errors
On November 30, 2022, the Ministry of Finance promulgated and implemented the Interpretation of Accounting Standards for
Business Enterprises No.16, which stipulates “the deferred income tax related to assets and liabilities arising from individual
transactions shall not be applicable to the accounting treatment of initial recognition exemption”, and shall come into effect from
January 1, 2023. For lease liabilities and right-of-use assets recognized at the beginning of the earliest period of financial
statement presentation in which the provision is first implemented that give rise to taxable temporary differences and deductible
temporary differences as a result of a single transaction to which the provision applies, the Company has adjusted the cumulative
effect to retained earnings at the beginning of the earliest period of financial statement presentation and other relevant financial
statement items in accordance with the said provision and Accounting Standard No. 18 for Business Enterprises - Income Tax.
The Company’s net profits before or after the deduction of non-recurring profit and loss for the last three fiscal years, whichever
is lower, is negative, and the auditor’s report for the latest year shows that there are uncertainties about the Company’s sustainable
operation ability.
□Yes √No
The net profits before or after the deduction of non-recurring profit and loss, whichever is lower, is negative
□Yes √No
12
VI. Key quarterly financial indicators
Unit: yuan
Q1 Q2 Q3 Q4
Revenue 2,352,114,690.56 1,914,723,348.10 1,743,604,478.34 2,174,579,540.20
Net profits attributable to shareholders of
376,938,135.34 304,678,887.35 1,466,156,270.99 -1,567,369,246.941
listed companies
Net profits attributable to shareholders of
the listed Company after deduction of 309,834,876.09 240,223,583.10 70,847,155.84 -208,878,117.78
non-recurring profits and losses
Net cash flow from operating activities -223,247,317.38 381,426,030.27 64,194,457.56 851,121,625.28
Note: 1 (1) The main reasons for the higher net income in the third quarter and the lower net income in the fourth quarter were as
follows: (i) In the third quarter, a gain of 1,360,206,000 yuan was recognized from the disposal of the urban renewal and
renovation project; and (ii) In the fourth quarter, due to the deferral of the progress of the urban renewal project, the Company
reversed the gain of 1,360,206,000 yuan from the disposal of the project as aforementioned. Further details on these matters are
provided in “Section VI Important Matters - ⅩⅥ Description of other important events” and “Section X Financial Report - ⅩⅧ
Other important matters - 7. Other important transactions and matters affecting the decision-making of investors” (2) Factors
contributing to the net loss in the fourth quarter, after excluding the impact of urban renewal and reconstruction, include: (i)
Impairment loss of goodwill amounting to 188.79 million yuan. (ii) Significant net loss on disposal of inventory of infection
protection products and related equipment.
Whether there is significant difference between the above financial indicators or the total sum of them and the financial indicators
related to the quarterly report and semiannual report disclosed by the Company
□Yes √No
VII. Differences in accounting data under domestic and foreign accounting standards
1. Differences between net profits and net assets in financial statements disclosed according to the International
Accounting Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
No difference between net profits and net assets in financial statements disclosed according to the International Accounting
Standards (IAS) and Chinese Accounting Standards during the reporting period.
2. Differences between net profits and net assets in financial statements disclosed according to the Overseas Accounting
Standards and Chinese Accounting Standards Simultaneously
□ Applicable √ Not applicable
No difference between net profits and net assets in financial statements disclosed according to the Overseas Accounting Standards
and Chinese Accounting Standards during the reporting period.
13
Winner Medical
VIII. Non-recurring profit and loss items and amount
√Applicable □ Not applicable
Unit: yuan
Item Amount in 2023 Amount in 2022 Amount in 2021 Description
Profits and losses on the disposal of non-current assets
(including the write-off part of the provision for asset -46,464,882.49 -39,993,220.64 -9,080,387.29
impairment)
Government grants recognized in the current period’s
profit or loss (excluding grants closely related to the
Company’s regular business operations, aligned with 74,822,989.42 84,859,103.35 105,132,971.30
national policies, and meeting specific criteria with a
continuous impact on the Company’s profit or loss)
The substantial
increase in FY2023, as
opposed to FY2022,
Gains and losses from changes in the fair value of was mainly attributable
financial assets and liabilities held by non-financial to short-term
corporations, and gains and losses from the disposal of fluctuations in the net
172,439,376.04 78,921,808.85 158,186,445.51
financial assets and liabilities, excluding effective value of the wealth
hedging operations related to the Company’s regular management market
business operations during Q4 of FY2022,
resulting in a decline in
wealth management
income for FY2022
Income and expenditure other than those mentioned
10,371,355.38 -13,810,132.25 -2,530,827.65
above
Less: Amount affected by income tax 35,321,337.22 17,067,455.98 41,394,596.42
Amount of minority shareholders’ equity affected (after
7,471,766.01 3,242,648.98 -878.83
tax)
Total 168,375,735.12 89,667,454.35 210,314,484.28 --
Other profit and loss items that are consistent with the definition of non-recurring profit and loss:
□ Applicable √ Not applicable
There was no other profit and loss items that are consistent with the definition of non-recurring profit and loss.
Explanation on defining the non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 on
Information Disclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses as recurring profit and loss
items
□ Applicable √ Not applicable
There was no circumstance in which non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 on
Information Disclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses are defined as non-recurring
profit and loss items.
14
Section Ⅲ
Management Discussion and
Analysis 15
Winner Medical
I. The industry in which we operate
1. Industry definition
According to the Classification Rules of Medical Devices (2015) (Order No. 15 of the China Food and Drug Administration) and
the Classification Catalogue of Medical Devices (Notice No. 104 of the China Food and Drug Administration in 2017), the
medical dressings produced and sold by the Company belong to the nursing and protective devices in medical devices. According
to
According to the Industry Classification of National Economy (GB/T4754-2017) and the Industry Classification Guidelines for
Listed Companies (revised in 2012), the industry of the Company is special equipment manufacturing industry (C35) in
manufacturing industry (C).
The products of the Company’s healthy consumer goods include pure cotton tissues, sanitary napkins with pure cotton surface,
cotton wet tissues and other non-woven consumer goods, baby supplies, baby clothing, adult apparel and other textile consumer
goods. According to the Industry Classification of National Economy (GB/T4754-2017) and the Industry Classification
Guidelines for Listed Companies (revised in 2012), the consumer goods operated by the Company mainly belong to the textile
industry (C17) and the textile and apparel industry (C1 8) in the manufacturing industry (C).
2. Development of the industry
With the strengthening of the national policy support for the medical device industry, the substitution of imported medical device
with domestic products has gradually accelerated in recent years. Meanwhile, global aging and chronic disease are becoming
increasingly prominent. According to the United Nations World Population Prospects 2022, the global fertility rates continue to
decline. In the 1950s, women in the world had around 5 children each. In 2021, this has dropped to 2.3. The statistical bulletin on
national economic and social development, released by the National Bureau of Statistics (NBS), indicates that China’s population
aged 60 years and above numbered 280 million at the end of 2022, constituting 19.8% of the country’s population. By the end of
2023, the population aged 60 years and above in China reached 296 million, accounting for 21.1% of the country’s population.
Adapting the social medical environment to the demand of aging population is becoming a major trend. This has provided new
space for the development of the medical device industry and will drive the innovation of the medical device industry.
(1) Development of medical consumables industry at home and abroad
Medical consumables refer to the medical and health materials used in the process of clinical diagnosis and nursing, testing and
repair. With a wide variety of models and wide application, they are important materials for medical institutions to carry out daily
medical and nursing work. From the perspective of value, medical consumables can be divided into high-value medical
consumables and low-value medical consumables.
Size of medical consumables market in china from 2015 to -2025 (100 million yuan)
Data source: China Medical Consumables Market Conditions and Investment Prospect Survey Report 2021-2026, China Medical
Device Blue Book, Chinese Medicine, IBM Report
16
Size of low-value medical consumables market in china from 2015 to 2025 (100 million yuan)
Data source: China Medical Device Blue Book, Chinese Medicine, Magna Information Centre, IBM Report
Compared with high-value medical consumables, low-value medical consumables are mainly medical hygiene materials and
dressings, injection and punching, medical polymer materials and products, medical disinfection materials, anesthetic
consumables, operating room consumables and medical technology consumables, with low entry threshold and fierce market
competition. Due to the wide application and benefit from the improvement of people’s living standards and the continuous
growth of medical demand in China, the market space of low-value medical consumables is huge, and will continue to maintain
high-speed growth in the future. According to the research and analysis of IBM, it is estimated that the market scale of low-value
medical consumables in China will reach 221.3 billion yuan by 2025 (Terminal market price). In addition to medical technology
consumables, the existing business of Winner Medical has covered six of the seven major categories of low-value medical
consumables. The Company’s medical business is positioned as a leader in the medical consumables field, providing one-stop
medical consumables solutions. Low-value medical consumables have the characteristics of rigid demand and high usage
frequency. Relying on good brand reputation, channel coverage and strong manufacturing capability, the Company will continue
to increase its share in the international and domestic markets.
1 Market development of operating room infection control products
Due to the growth of the number of surgical operations and the strengthening of infection control measures, the market of
operating room infection control products is growing continuously. According to the statistics of CMI, the domestic market size
of operating room infection control products is expected to reach USD 3.688 billion in 2026, with an average annual compound
growth rate of 4.9%.
Operating room infection control products can be divided into reusable products and disposable products. Compared with the
reusable products, the disposable operating room infection control products can significantly reduce the risk of cross infection.
According to Coherent, disposable operating room infection control products can reduce the risk of cross infection during surgery
by 60%. The Guide to Operating Room Nursing Practice compiled by the Operating Room Professional Committee of Chinese
Nursing Association also recommends the use of disposable aseptic products in the operating room to reduce the risk of cross
infection during surgery. At the same time, disposable operating room infection control products also have advantages in
convenience compared with reusable products, which makes the demand for disposable products more active.
Compared with individual products, customized surgical package products may be customized according to the type of surgery
and doctor’s needs. Therefore, it may improve surgical efficiency and safety, avoid waste of surgical devices and materials and
reduce hospital costs and environmental burdens. For these reasons, the market of customized surgical package is growing rapidly.
According to the statistics of CMI, the market size of global customized surgical packs is expected to grow to USD 21.347 billion
in 2026, with an average annual compound growth rate of 10.2%. In China, the market size of customized surgical packs is
expected to rise to USD 1.504 billion, with an average compound annual growth rate of 12.2%, which is quite promising.
17
Winner Medical
2 Market development of high-end wound dressing products
Compared to the traditional wound dressings, high-end wound dressings are able to control exudate and have better breathability.
In addition, it does not adhere to the wound, does not destroy new tissue, and may avoid bacterial infection. The typical products
include hydrogel dressings, hydrocolloid dressings, transparent film dressings, foam dressings, alginate dressings, etc. Judging
from the global trend, the demand for high value-added and multifunctional medical dressings made of new materials is
increasing, and the high-end medical dressing industry will usher in good development opportunities. According to the research
compiled by QY Research, the global high-end wound dressings market size reached USD 5.846 billion in 2020, and is expected
to reach USD 7.230 billion in 2027.
The market size in China is growing rapidly and the major factors contributing to the growth of the high-end wound dressings
market include increasing aging population, increasing awareness of high-end wound dressings, increasing number of road
accidents and burn cases, and high incidence of diabetic wounds and chronic infections.
Most of the sales of the high-end wound dressing enterprises in China are still from overseas markets. After years of development,
the product quality has reached a higher level and gained recognition in the international market. With the increase of
consumption by domestic residents, the rising awareness of medical care, the popularization of domestic home care system, and
the gradual convergence with international advanced medical care knowledge, the high-end wound dressings market in China will
embrace a promising future.
In recent years, the relevant government departments and agencies have introduced supporting policies, indicating a general trend
of replacement of international brands by domestic brands. There will also be a greater space in the high-end medical dressings
field for domestic products, and the market concentration in China will further increase.
3 Development status of injection and puncture devices market
The injection and puncture device industry are divided into two categories: infusion and puncture. The main products in the
infusion category are infusion sets, syringes and other infusion devices. Most of them are disposable medical supplies of high
demand. As one of the most conventional medical devices, syringes are mainly used for injecting medicine into human muscles,
subcutaneous tissue and vein. Puncture products mainly refer to puncture needle, and are rich in categories such as nursing and
specialist categories.
According to QY Research, at present, China’s injection and puncture devices industry mainly presents three major development
trends. From the perspective of market concentration, with the rise of volume procurement for medical injection and puncture
devices at the provincial and municipal level, large enterprises are expected to occupy more market by virtue of scale advantage,
and the market of small and medium-sized enterprises will be further compressed. Therefore, the industry concentration will
continue to increase. From the perspective of application scenarios, it is extending from the dominant infusion scenarios to more
scenarios. The demand for puncture needle products arising from the clinical needs mainly includes high-end multi-site biopsy
needles, and needles for assisted reproduction such as egg retrieval. From the technical point of view, high-end, intelligence and
safety will become the technical development trend of infusion and puncture devices.
QY Research estimates that the sales of injection and puncture devices in China will reach 36.75 billion yuan in 2026.
4 Development status of medical latex gloves market
Medical gloves are mainly divided into latex gloves, nitrile gloves, polyethylene (PE) gloves and polyvinyl chloride (PVC) gloves
according to the material; according to the application scenarios, they are divided into medical surgical gloves and medical
examination gloves. Latex gloves feature high elasticity and skin-friendliness, and occupy an important position in medical gloves.
According to QY Research data, the global market size of disposable medical gloves reached $23.014 billion in 2021, with a latex
gloves market size of $6.99 billion, accounting for 30%. Latex gloves are expected to grow at a CAGR of 5.84% during
2021-2027 and will reach a market size of $9,829 million by 2027.
18
(2) Development of consumer goods segmentation industry
In recent years, as people grow more confident on the national culture, the domestic goods have injected new vitality into the
national economy, becoming an important driving force of consumption and domestic demand. At the same time, consumers are
increasingly concerned about the environmental performance and sustainability of products, and the rise of environmental
protection and low carbon concept is also driving the transformation and upgrading of the consumer goods industry. In January
2022, the National Development and Reform Commission and other departments issued the Implementation Plan for Promoting
Green Consumption to comprehensively promote the green transformation of consumption in key areas. It is mentioned in one of
the main goals of the plan that by 2025, the concept of green consumption will be deeply rooted in people’s minds; by 2030, green
consumption will become a conscious choice of the public and green low-carbon products will become the mainstream of the
market.
1 Development of cotton tissues
Because of its more environmental protection and less sensitization, pure cotton tissues can replace traditional paper products and
towels with increasing market penetration. According to the China’s Cotton Tissues Industry Status and Development Trend
Research Report 2019-2025 published by the China IRN Industry Research Institute, based on product attributes, production
efficiency, environmental protection and other advantages, the customers groups of infants, maternity, people with sensitive skin
and people with frequent beauty makeup and skin care needs are more willing to pay higher prices for high-quality products. So
the consumer awareness for cotton tissue product is rapidly increasing, promoting the rapid growth of market demand. According
to Euromonitor statistics, the global cotton tissues market demand reached 61 billion pieces in 2023, indicating a high growth
stage.
The Company developed a new product category for cotton tissues and led the rapid growth of the cotton tissues segment. In 2021,
as the first drafting unit, Purcotton participated in the development of national standards for cotton tissues. Thanks to the
increasingly strict environmental regulation, this segmentation will become more mature and standardized.
2 Development of disposable sanitary products industry
According to Euromonitor statistics, the market of absorptive care products in China increased from 151.1 billion yuan to 160.5
billion yuan in 2017-2023, with an average annual compound growth rate of 1.0%.
Among them, female health care products increased from 82.3 billion yuan in 2017 to 102.1 billion yuan in 2023, with an average
annual compound growth rate of 3.7%. As Chinese women’s health care awareness and consumption ability continue to rise,
consumers are paying more attention to product quality, functionality, material safety and product experience, leading to the
increasing proportion of medium- and high-end sanitary napkin consumption.
19
Winner Medical
In 2023, the market size of baby diapers reached 40.2 billion yuan.
The market scale of adult incontinence products increased from 3.7 billion yuan in 2017 to 6.6 billion yuan in 2023, with an
average annual compound growth rate of 10.1%. Since the overall development of adult incontinence products in China is lagging
behind the feminine sanitary napkins and infant diapers market, it is still in the introduction period. Considering multiple factors
such as growing life expectancy per capita, increasing number of elderly population, increasing disposable income per capita and
increasing hygiene and health awareness, China’s adult incontinence products market is at a stage of rapid growth in sales and
market penetration.
The market scale of wet tissues increased from 6.7 billion yuan in 2017 to 11.6 billion yuan in 2023, with an average annual
compound growth rate of 9.4%. At present, the market is dominated by baby wet tissues and general-purpose wet tissues. Female
hygiene wet tissues, makeup removal wet tissues, home cleaning wet tissues and other categories account for a relatively small
proportion, so there is a large market space to develop.
3 Development of textile industry and textile clothing and apparel industry
According to data released by the National Bureau of Statistics, retail sales of apparel, footwear, headwear, needles, and textiles
increased from 302.4 billion yuan in 2007 to 1,409.5 billion yuan in 2023, representing a compound annual growth rate of 10.1%.
The development of e-commerce industry also led to the transformation and upgrading of textile and apparel. According to
statistics from the Ministry of Commerce, online retail sales of apparel, shoes, hats, needles, and textiles in China accounted for
22.0% of the nation’s online retail sales of physical commodities in 2023, making it the category with the largest share.
According to Euromonitor statistics, the market size of China’s children’s apparel industry fluctuated up from 2016 to 2021, with
slight decline in 2020 and 2022 under the influence of public health events. As of 2023, China’s children’s apparel market size is
about 252.6 billion yuan. In the future, under the influence of the growing attitude of “exquisite child raising”, the children’s
apparel industry still has a large development potential.
As people’s demand for health and comfort continues to rise, the market of intimate apparel (in the broad sense of underwear,
meaning clothing worn close to the skin or under outerwear, including underwear, warm clothing, leisure wear, socks, etc.) is also
evolving in the direction of high quality and comfort. According to the customer group, underwear can be divided into three
categories: men’s underwear, women’s underwear and children’s underwear, of which women’s underwear occupies a dominant
position, accounting for about half of the overall market share. According to the Chinese Lingerie Industry Development Blue
Book released by CIC, the market size of women’s lingerie will reach 217.14 billion yuan and men’s lingerie will reach 84.91
billion yuan by 2026, and the overall market size of men’s and women’s lingerie will increase at a CAGR of 5.2% from 2020 to
2026.
20
The Company needs to comply with the disclosure requirements of the “Textile and Apparel Business” stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
II. Main business of the company during reporting period
The Company needs to comply with the disclosure requirements of the “Medical Device Business” in the No. 4 Guideline of
Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by Growth Enterprises.
Winner Medical is a health enterprise developing both medical and consumption products under its brands of “Winner” and
“Purcotton”. Specifically, the Company has adhered to the core business principles of “quality over profit, brand over speed, and
social responsibility over corporate value”. With the development of domestic and international markets, it has evolved from a
single medical consumables manufacturer into a company that encompasses wound care, infection protection, personal care, home
care, maternal and child care, home textiles, apparel, and other fields of medical care and consumer health enterprises.
Winner Medical
Traditional wound care and
wound dressing products Medical cotton, gauze, bandages, etc.
High-end wound dressing Silicone dressings, alginate dressings, superabsorbent
products dressings etc.
Operating room consumables Surgical gloves, surgical packs, surgical gowns, etc.
Medical Winner Medical
consumables Infection protection Masks, protective clothing, isolation gowns, etc.
Health & personal care Oral and nasal cavity, medical beauty, personal care, nursing
care, etc.
Other products Injection and puncture products, test kits, etc.
Winner
Wet and dry cotton tissues Cotton tissues, wet tissues etc.
Sanitary napkins Sanitary napkins, disposable period panties etc.
Other non-woven products Facial mask, makeup cotton, cotton diapers etc.
Healthy
consumer goods Purcotton
Baby clothing and supplies Baby’s leisure wear, bath towels and quilts etc.
Adult apparel Adult’s leisure wear, outing costume, underwear etc.
Other woven products Bedding, toiletries, etc.
1. Medical consumables section
Winner Medical is a benchmarking enterprise in the domestic medical consumables industry, with its primary product lines
including traditional wound care and wound dressings, high-end wound dressings, operating room consumables, infection
protection, and health and personal care.
21
Winner Medical
The Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain covering cotton
procurement, R&D, production, and direct export. The Company’s products have been certified by the EU CE certification, the
US FDA certification and the Japanese Ministry of Health, Labour and Welfare certification, and exported to Europe, America,
Japan and other countries. In 2005, “Winner” brand entered the domestic hospital and drugstore market. With its excellent product
quality and service, Winner Medical gradually established a good brand and reputation in domestic hospitals and drugstores.
Since the outbreak of public health incident, the “Winner” brand epidemic prevention products have entered the hospital and the
civilian market. Thanks to its public commitment not to increase prices and the quality of its products, it has won the unanimous
praise at home and abroad, from government units and the public, and the brand reputation and popularity have been greatly
improved.
In terms of products, Winner Medical focuses on market demand, is close to clinical and terminal, is driven by R&D and
innovation, and constantly improves product layout. Its business scope extends from sales of single wound care products such as
cotton gauze to sales of integrated solutions of wound care, infection protection, and health and personal care products.
Disposable operating room consumables can more effectively reduce nosocomial infection than reusable medical products. With
more attention of the state and hospitals to nosocomial infection and residents’ attention to personal health environment,
disposable operating room consumables are gradually accepted by the domestic market. Winner Medical’s medical dressing
product line has been expanded from traditional dressing products mainly focusing on gauze products to high-end wound dressing
products, such as silica gel foam dressing, hydrocolloid dressing, super absorbent pad, negative pressure drainage products, etc.,
which are mainly applied to chronic wound healing scenes such as diabetes, large-area burns and wounds. The Company’s
technical level in the field of high-end wound dressings has been in the forefront of the industry, and is expected to become the
core products for the development of Winner Medical.
22
2. Healthy consumer goods section
Purcotton is a healthy life brand with “Medical background, Purcotton philosophy, Quality in our DNA” as its core
competitiveness, which starts with pure cotton spunlace non-woven fabric and takes “medicine close to life, Purcotton care for
health” as its brand proposition. Its products include wet and dry cotton towels, sanitary napkins, baby and children’s apparel and
supplies, adult apparel, and other non-woven/woven products. Purcotton advocates the life concept of “comfortable, healthy, and
environmentally friendly”, replacing chemical fiber with cotton and keeping away from chemical stimulation. It provides overall
solutions for different life scenes, having a good user reputation and formed a fully differentiated brand image in the field of
consumer goods with strong brand appeal.
In terms of products, with excellent quality control ability and technology research and development ability, the Company
continues to introduce medical grade quality consumer goods. Cotton is the main raw material of core products of Purcotton,
which adopts global high-quality cotton to control product quality and safety from the source. According to the high standard of
medical consumables, all kinds of pollution sources are strictly controlled in the production process. Disposable underwear,
newborn baby clothes and other close-fitting clothing are packaged with medical grade sterilization to further ensure the safety
and environmental protection of the products. Purcotton products cover multiple consumer groups, such as mothers and infants,
children and adults, and span multiple product lines, such as high-end pure cotton tissues, female care, baby care, home textile
products and apparel.
23
Winner Medical
(II) Main products and purposes
The product categories of the medical consumables segment are divided into traditional wound care and wound dressing, high-end
wound dressing, operating room consumables, infection protection, health and personal care and other products; the product
categories of the healthy consumer products segment are divided into wet and dry wipes, sanitary napkins, other non-woven
products, baby clothing and supplies, adult apparel and other textile products.
The main categories and images of some products under the Company’s medical consumables section are as follows:
Medical sterile-grade wound care Medical-grade ingredients ensure gentleness and safety
Medical gauze sheets available in multiple specifications Silicon treatment strip (1pc/box)
Traditional wound care and wound dressing
products High-end wound dressing products Operating room consumables
Main Purpose: Main Purpose: Main Purpose:
For absorbing wound exudate, dressing wounds, and sports For creating a moisture balance at the wound interface to For preventing infections in the operating room
protection optimize its benefits for wound healing, reduce the frequency
Product: of dressing replacement, and reduce secondary damage Product:
Medical cotton, gauze, bandages, etc. Product: Surgical gloves, surgical packs, surgical gowns, etc.
Silicone dressings, alginate dressings, superabsorbent
dressings etc.
Wound healing skin repair
Medical-grade sodium hyaluronate repair patch, 1 piece per bag, 5 bags
per box
2
boxes
Infection protection Health & personal care Other products
Main Purpose: Main Purpose: Main Purpose:
For occupational protection of medical staff and patient For wound cleaning and disinfection, and daily health care For health management to meet their medical needs
isolation
Product: Product: Product:
Masks, protective clothing, isolation gowns, gloves, foot Oral and nasal cavity, medical beauty, personal care, nursing Injection and puncture products, test kits, etc.
straps, hats, etc. care, etc.
24
The main categories and images of some products under the Company’s healthy consumer goods section are as follows:
Wet and dry cotton tissues Sanitary napkins
Other non-woven products
Product: Product: Product:
Sanitary napkins, disposable period panties etc. Facial mask, makeup cotton, cotton diapers,
Cotton tissues, wet tissues etc. disposable underwear, etc.
Baby clothing and supplies Adult apparel Other woven products
Product: Product: Product:
Baby’s leisure wear, outing costume, underwear, bath Adult’s leisure wear, outing costume, underwear, footwear, Bedding, toiletries, etc.
towels, handkerchiefs and quilts, etc. etc.
25
Winner Medical
(III) Main operating modes
1. Procurement mode
The Company promotes digital platform management and has established a robust procurement management system, procurement
process, and risk control platform. Procurement is driven by planning, with procurement plans and strategies formulated based on
annual, quarterly, and monthly demands. Different modes of procurement are implemented according to the types of materials
required, including strategic procurement, bidding procurement, centralized procurement, and separate procurement, among other
models. Integrating purchasing needs with R&D, product specifications, and quality standards to establish technical benchmarks,
formulate purchasing strategies encompassing plans, supplier selection, and commercial negotiations, and devise order allocation
plans in conjunction with supplier performance evaluations. In the pursuit of a sustainable supply chain ecosystem, collaborative
suppliers across product development, manufacturing, procurement fulfillment and other domains remain steadfast in their
commitment to achieving low carbon emissions, cost-effectiveness, transparency and social responsibility.
1) Responsible Purchasing: The Company mandates that purchasing requirements be generated by the demand department
based on customer orders, sales plans, and production schedules to fulfill production and sales needs. The Group’s supply chain
then devises tailored purchasing strategies for different procurement types, including strategic, bidding, centralized, and
decentralized purchasing. For instance, strategic procurement rules are uniformly applied to formulate purchasing strategies and
plans for bulk raw materials like cotton and cotton yarn. Centralized purchasing strategies are employed for materials or
categories conducive to group-wide adaptability and scale effects. To ensure the effective implementation of the Group’s
procurement strategy, the Company adopts a system that visualizes the entire procurement process and facilitates supervision and
management. This includes demand assessment, sourcing, quotation, price comparison, contract signing, purchase order issuance
and approval, receipt, warehousing, reconciliation, payment processing, etc. This ensures that the procurement process adheres
strictly to the principles of fairness, openness, and impartiality as outlined in the procurement management system.
2) Procurement control process: The Company has established the Procurement Control Process and Procurement Price
Management System alongside other management protocols to delineate clear responsibilities and approval authorities for each
position. This ensures the reliability of product quality and the stability of product supply. Additionally, by implementing the
Integrity Commitment Agreement with suppliers, the Company fosters a culture of integrity, openness, transparency, and mutual
trust. This cooperative mechanism prioritizes procurement principles such as transparency, quality, and sustainability, thereby
nurturing a sustainable supply chain ecosystem.
3) Implementing hierarchical classification management of supply resources: Based on the Company’s development goals and
commodity planning requirements, reserve resources from at least two or more suppliers. For critical materials or services,
establish a framework for multiple suppliers to compete, ensuring supply stability and mitigating risks. Simultaneously, adhere to
the Company’s supplier evaluation criteria to select vendors aligned with the Company’s requirements, striving for a mutually
beneficial cooperation model with suppliers. Using the supplier evaluation system and considering their overall capabilities,
suppliers are regularly graded and categorized. These assessments guide the creation of cooperation programs and order allocation,
with the goal of cost control, efficiency improvement, and mitigating supply risks.
4) Supplier Management Process
4.1 Admission assessment: New suppliers undergo validation following the Supplier Admission Assessment Specification.
Suppliers are evaluated across various dimensions, including technical capability, quality management, planning and production
capabilities, and corporate social responsibility, through written assessments. On-site audits are conducted for all key suppliers,
with additional audits for other suppliers as needed. The Company enters into agreements such as Purchasing Framework
Contract, Quality Agreement, Confidentiality Agreement, Integrity Commitment Agreement, and others with verified suppliers,
establishing a list of qualified suppliers.
4.2 Performance management: Adhering to the Supplier Performance Management System, conduct routine performance
evaluations of suppliers. Engage in ongoing communication with suppliers regarding their performance status, analyze reasons for
any deficiencies identified, develop improvement plans, monitor the implementation of these plans, and verify their effectiveness.
4.3 Annual review: Adhere to the Supplier Management Program to conduct yearly evaluations for key suppliers, those with
significant deviations or anomalies in the prior year, and suppliers with alterations in production sites or equipment. Issue
improvement notices for any non-compliance identified during the review process, monitor the implementation of improvements,
and verify their effectiveness.
26
4.4 Qualification adjustment: Following the Supplier Grading and Classification Management System and Supplier
Performance Management System, as well as the results of the annual review, supplier qualifications are regularly revised. An
elimination mechanism is activated for suppliers whose improvements prove ineffective.
5) Sustainable supply chain: The Company keeps improving its green and sustainable development, such as cooperation with
schools and hospitals. At the same time, it also aligns the upstream and downstream of the supply chain to further achieve
sustainable development. For example, we have promoted the project of product package de-plasticization; multiple categories of
Purcotton products have obtained carbon footprint certification; we optimize product process to minimize the use of energy, and
upgrade the production equipment to enable energy recovery and reuse.
6) Digital supply chain: In 2023, the Company introduced a Supplier Relationship Management (SRM) and Supply Chain
Management (SCM) supplier collaboration system. Additionally, enhancements were made to the Material Data Management
System (MDC) and Product Lifecycle Management (PLM) data management system. The integration of various systems and
modules advances digital management, significantly enhancing procurement execution efficiency and making pricing modules
more transparent. Implementing end-to-end order delivery and inbound and outbound inventory visualization management;
leveraging internally developed Business Intelligence (BI) visualization tools by the IT team; integrating demand and supply
planning information data to minimize offline communication and enhance overall operational efficiency.
2. Production mode
Aligned with the Company’s business strategy objectives, and directed by the Company-level S & OP sales and operation plan,
we formulate medium and long-term strategic plans and short-term production and procurement plans according to the
Company’s development and customer demand. We also coordinate all related upstream and downstream departments to ensure
the balance from front-end demand to supply and delivery. In the process of order fulfillment, we match capacity according to the
characteristics of different demands and in combination of the actual supply of human, machine, material, method and
environment. Through the flexible deployment of different production modes (MTO (Make to Order), MTS (Make to Store), ETO
(Engineer to Order) and ATO (Assemble to Order)), we continuously improve our service level to meet customer demands and
create value for customers.
1） In the production mode of Make to Order MTO, products are produced according to the customer’s original product design;
procurement is performed according to the BOM for the accepted order. Therefore, inventory basically remains zero. For OEM
customer orders, as the market constantly reduces delivery cycle, it is common now to combine MTO & MTS production modes.
2） In the production mode of Make to Stock MTS, products are not customized for specific customers, and are usually
delivered to different customers; production plans are formulated according to market demand and existing inventory. Safe
inventory is determined for such products according to the production cycle and the frequency of demand to ensure that products
are available when the customer places order.
3） In the mode of Engineer to Order, specific design requirements from a single customer can be met, usually for small
production lots; in the production process, the value mainly lies in product and packaging design work. Support for custom design
is an important part of this production mode. Inventory basically remains zero.
4） In the Assemble to Order mode, the components required for the production of finished products are stocked in advance.
When the customer places order, products can be assembled quickly to meet flexible delivery demands. Common materials are
stocked in advance to maintain balance between rapid delivery and inventory.
27
Winner Medical
3. Sales mode
The Company sells products through multiple channels. The main sales channels are shown in the following figure:
Winner Medical
Third-party B2C platforms, such as Tmall, JD.com
Online channels and Amazon
Hospitals
Medical
consumables Domestic sales Pharmacy/convenience stores
Government and enterprise platform
Offline channels
Private brand
Overseas sales
OEM/ODM sales
Winner
Tmall, JD.com and other traditional
e-commerce platforms
E-commerce TikTok, Kuaishou and other interest
Online channels
platforms e-commerce platforms
Official shopping mall and Wechat mini
Healthy programs of Purcotton
consumer
goods
Directly operated and franchised chain
stores
Offline channels Real stores
Supermarkets, convenience stores and
beauty stores
4. Marketing mode
The Company is developing its products under the Winner Medical and Purcotton in a coordinated way. With 30 years of
experience in the production of medical supplies, Winner is a leading medical consumables brand in the Chinese market and a
brand with a global vision. With “caring for health and life, making a better world” as its vision and industry-leading product
quality as the cornerstone of its brand value, the product marketing and promotion for the brand rely more on its brand reputation.
With pure cotton products as its label, Purcotton ad opts unique, differentiated strategies to build its brand. By integrating multiple
promotion channels such as directly-sales stores, brand roadshows, celebrity endorsements, event sponsorship, new media, and
advertising, Purcotton keeps conveying to consumers its proposition of “medicine close to life, Purcotton care for health” and its
vision of “changing the world with pure cotton”, which helps deepen the meaning of Purcotton brand and increase its brand
awareness and loyalty.
(IV) Main driving factors of performance
1. Medical consumables industry and consumer goods industry will keep growing rapidly
As global healthcare improves and daily healthcare demands rise, the global medical consumables market is experiencing stable
growth and landscape changes. Concurrently, domestic public healthcare institutions are undergoing reform, driven by policies
like national examinations, centralized procurement, and SPD/DRG advancements. These changes are expected to lead to
consolidation and reshuffling within the medical consumables industry. After public health events, there’s heightened focus from
the government, healthcare professionals, and consumers on emergency prevention and personal health management autonomy.
Consequently, demand for family emergency and daily healthcare has significantly increased compared to pre-event levels. The
domestic market for medical and household consumables is rapidly consolidating, providing a favorable external environment for
the development of leading enterprises.
28
In October 25, 2021, the CPC Central Committee and the State Council officially announced the Opinions on the complete,
accurate and comprehensive implementation of the new development concept to achieve carbon peak and carbon neutrality. It is
pointed out that strengthening China’s green and low-carbon technological innovation and continuously expanding green and
low-carbon industries will accelerate the formation of new drivers and sustainable growth poles of green economy. We will
significantly improve the quality and efficiency of economic and social development and provide strong impetus to build China
into a great modern socialist country in all respects. In December 2023, the Opinions on Comprehensive Promotion of Building a
Beautiful China issued by the CPC Central Committee and the State Council emphasized the importance of prioritizing the
construction of a beautiful China in the nation’s development and revival efforts. It underscored the strategic imperative to
strengthen ecological civilization construction, steadfastly pursue a path of civilized development encompassing production,
prosperity, and ecological well-being. The aim is to create a picturesque homeland characterized by clear skies, verdant
landscapes, and pristine waters, while advocating for simple, moderate, green, low-carbon, civilized, and healthy lifestyles and
consumption habits. At the same time, consumers are increasingly concerned about the environmental performance and
sustainability of products, and the rise of environmental protection and low carbon concept is also driving the transformation and
upgrading of the consumer goods industry.
2. High-quality products and precise brand positioning enhance brand value
The Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain covering cotton
procurement, R&D, production, and direct export. The Company is one of the early companies that established a medical-grade
quality management system in the industry, and has passed the ISO13485 Medical Devices Quality Management System
Certification. Its product quality complies with the European, American, Japanese, and Chinese standards. Winner Medical enjoys
a high brand reputation and recognition. In May 2021, Winner Medical was selected by the Federation of Shenzhen Industries as
the “Benchmarking Enterprise in China’s Medical Consumables Sector” and at the same time recognized as an “International
Renowned Brand” by the United Nations Industrial Development Organization. In December 2021, “pure cotton spunlace
non-woven fabrics and its products” of Winner Medical was awarded as the national single champion of manufacturing industry.
In April 2022, Winner Medical was awarded the honor of “National Pioneer Worker” by the All-China Federation of Trade
Unions. Winner Medical has expanded its business from the medical field to the consumer goods field, which has also increased
the brand value of its consumer products.
Purcotton is committed to fulfilling consumers’ demand for high-quality products which are “comfortable, healthy, and
environmentally friendly”. Constantly winning recognition from consumers since its launch in 2009, Purcotton has rapidly grown
into a top brand of maternal and child products on Tmall, and has gained greater market shares in the field of maternal and child
consumer products. In October 2019, Purcotton won the reputation of “70 Brand of the 70th Anniversary of the Founding of New
China” sponsored by CCTV. In January 2021, Purcotton was honored as one of the “Shenzhen Top Brands” by Federation of
Shenzhen Industries. In April 2021, Purcotton was included into the list of the second “Shenzhen Top 100 Brands” announced by
Shenzhen Quality City Promotion Association.
In conclusion, with high brand value, the Winner Medical and Purcotton brands will help the Company enhance customer loyalty,
stabilize product prices, and expand its market share in the competitive market, thereby ensuring its sustainable and stable
profitability.
The Company needs to comply with the disclosure requirements of the “Textile and Apparel Business” stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
III. Analysis of core competitiveness
1. Advantages of business philosophy and corporate culture
The Winner Medical brand embraces the responsibility of “promoting health, nurturing life”, guiding the Company and the
medical dressing industry from humble beginnings to global recognition, transitioning from OEM to an independent brand, and
earning the trust of customers and users. After over 30 years of development, the Company remains committed to R&D
innovation and maintaining product leadership. In the hospital sector, it provides a wide range of medical consumables, including
infusion sets, gloves, high-end wound dressings, and operating room supplies, aiming to be a leading force in this field and
offering comprehensive solutions through an “internal growth + external growth” approach. In the retail sector, the Company
continuously introduces consumers’ favorite home personal health care products, fostering a sense of health guardianship and
companionship.
29
Winner Medical
With its corporate vision of “changing the world with pure cotton”, Purcotton advocates a lifestyle with pure cotton by applying
“comfortable, healthy, and environmentally friendly” in all aspects of daily life, and deliver the brand concept of “reassurance,
happiness and sustainability” to consumers. Sticking to the “cotton fiber only” principle in its operation, Purcotton aims to
develop recyclable and renewable resources, gradually replace chemical fibers with natural fibers, and give full play to the use
value and environmental protection value of cotton fibers, following the path of low carbon, environmental friendly and
sustainable development. The visions and business philosophies regarding the Company’s two brands are focused on human
health, environmental protection, and improving the quality of life, which are in line with humans’ sustainable development
strategy.
Adhering to core business principles “quality over profit, brand over speed, and social responsibility over corporate value”, the
Company consistently delivers superior solutions and service experiences to customers and users while actively contributing to
community development, showcasing its social responsibility. Guided by the values of “hard work, self-criticism, exploration and
innovation, and sustainable development”, we will stay true to the original entrepreneurial spirit and brand-building efforts. At the
organizational level, we prioritize building process-oriented structures while also establishing an integrated organization to
support cohesive business operations. We maintain a long-term focus on enhancing organizational efficiency and capacity to
elevate business value. Our team incentives aim to bolster market competitiveness through fixed salary enhancements and the
implementation of performance-based bonus sharing systems. We incentivize business ownership and growth, retaining core
leaders through the initiation of equity incentive plans. Regarding talent, we embrace a culture centered on the principles of
“high-quality, high-efficiency, high-performance and high-return”, fostering an environment conducive to the rapid growth of
individuals. We aim to remove barriers to the development of top-tier talent and continually fortify our business partner
mechanism.
2. Advantages of R&D and innovation
The Company independently developed the pure cotton spunlace non-woven technology in 2005, and has built a complete
technology cluster based on the technology, obtaining patent licenses in more than 30 countries and regions including the United
States, Europe, and Japan. The silica gel foam dressing and foam dressings successfully developed and launched by the Company
have been awarded with China’s registration certificate for Class II and Class III medical devices respectively. Building upon the
success of last year’s research and development efforts in core materials and mass production applications, the Company has
further refined its technology layout for the second generation of high-end wet wound dressings. New scar repair products have
been successfully introduced to the domestic market, while various antimicrobial dressings and bio-active collagen dressings
developed this year have obtained FDA qualifications for access in the United States. In the field of medical consumables, the
Company focused on the development of core basic materials on the application of operating room consumables such as surgical
gowns, isolation gowns, surgical towels and wipes, to enhance the comfort of the products, reduce the cost of production of the
products, and to further enhance the market competitiveness of the products. It was invited to participate in the formulation of
many national standards and industry standards, including the performance requirements of pure cotton nonwoven surgical
dressings, and technical specifications for contact layer dressings and masks for children. In the field of consumer products, the
Company has developed pure cotton tissues, pure cotton wet tissues, sanitary napkins with pure cotton surface, as well as disposal
cleansing towels, disposable underwear and other products. As the first and major drafter, Purcotton, a wholly-owned subsidiary
of the Company, led the development of national standards for cotton tissues (GB/T 40276-2021), which requires that the fiber
composition and content of cotton tissues shall be identified, and the fiber content tolerance shall comply with the provisions of
GB/T 29862 (implemented on December 1, 2021). In December 2021, “pure cotton spunlace non-woven fabrics and its products”
of the Company was awarded as the national single champion of manufacturing industry. In 2023, we were involved in the
establishment of a group standard for technical requirements in carbon footprint evaluation for several products, including soft
towels, sanitary napkins, and diapers.
Since its establishment, the Company has been attaching great importance to scientific and technological innovation and
cooperation. It has carried out industry–university–research (IUR) projects with many universities and research institutes,
including Hong Kong Polytechnic University, Hong Kong Research Institute of Textiles and Apparel, Wuhan Textile University,
and Soochow University. In January 2022, the Company and Huazhong Agricultural University jointly established the Cotton
Research Institute and appointed Academician Zhang Xianlong as the Chief Cotton Scientist of Purcotton to cooperate in research
and development. The research institute relies on biological breeding technology to cultivate cotton strains that are exclusive to
cotton, and to discover cotton strains that are specialized for spunlace nonwoven fabrics. In June 2022, the Company, together
with Wuhan Textile University and Huazhong University of Science and Technology, jointly declared a major science and
technology project in Hubei to promote the industrialization of the currently developed corrugated structure with slow-release
function artificial blood vessels and polyester large-caliber woven artificial blood vessels, so as to realize the domestic
replacement of artificial blood vessels early, solve the bottleneck project in China, and better serve patients with vascular diseases.
In addition, the Company also joined hands with Wuhan Textile University to set up the Innovation Research Institute of Winner
Medical & Wuhan Textile University to accelerate the transformation of scientific and technological achievements. Xu Weilin,
academician of the Chinese Academy of Engineering, deputy party secretary and principal of Wuhan Textile University, was
appointed as the president of the Research Institute.
As of Sunday, December 31, 2023, the Company has obtained 112 invention patents, 802 utility model patents, and 425 design
patents in China; 28 invention patents and 8 utility model patents have been obtained overseas. The Company was regarded as a
30
“Leading Enterprise in Independent Innovation” by the Shenzhen Municipal People’s Government, and a “Shenzhen Enterprise
with Intellectual Property Advantages” by the Shenzhen Administration for Market Regulation.
3. Advantages of quality control
With a history of more than 30 years since its establishment, Winner Medical has achieved sustainable development and
maintained a leading position in the industry. It is inseparable from the Company’s three core principles of “quality over profit,
brand over speed, social value over corporate value”. In this context, the quality policy of “Rigorous work, strict compliance with
laws and regulations, and continuously improve to win the full trust of customers” was formed and has been implemented to date.
Based on this guideline, Winner Medical Group has adopted EN ISO13485:2016 (ISO13485:2016), China’s Medical Device
Manufacturing Quality Management Practice, the United States 21 CFR Part 820, and the European Union MDD (DIRECTIVE
93/42/EEC), EU MDR (REGULATION (EU) 2017/745) and EU PPE (REGULATION (EU) 2016/425) as cornerstones, forming
a quality management system model based on process management. Under this model, Winner Medical focuses on the research of
product quality standards and regulatory requirements of different countries/regions, and actively passes the corresponding
product registration/certification procedures. It has obtained product access qualifications in China, EU, USA, Japan, UK,
Switzerland, Russia, Australia, Malaysia, Thailand, Saudi Arabia and other countries/regions, providing domestic and foreign
customers with high quality products and good after-sales service. At the same time, Winner Medical has been committed to
building professional, reliable and comprehensive product quality testing capabilities. The Company’s R&D center laboratory and
Jingmen Winner Laboratory have been accredited by the China National Accreditation Service for Conformity Assessment
(CNAS). With professional and reliable product testing capabilities, it not only provides guarantee for product quality control, but
also serves as a source of data for continuous product improvement.
To ensure the safety of raw materials for its products, Purcotton uses high-quality cotton from around the world to produce its
core products, such as its pure cotton tissue, sanitary napkins with pure cotton surface, and pure cotton wet tissues. All the
workshops are managed according to the management requirements for the workshops of medical dressings, which can help
strictly control bacterial contamination and pollution sources. With its strict quantity management control system, Purcotton is
able to provide customers with high-quality consumer goods that are safe and environmentally friendly. Adhering to the concept
of “medicine close to life, Purcotton care for health”, Purcotton not only applies quality natural cotton but also attaches
importance to the environmental friendly weaving and finishing process. To ensure that its products are ecologically safe, no
fluorescent brighteners are added to its products. Some of its products are OEKO-TEX Standard 100 certified. Some non-woven
products have passed the testing performed in accordance with the EU AP (2002) 1 and EC1935/2004 EU Food Contact Materials
Regulation.
4. Product advantages
(1) Medical consumables
The Company’s product categories include high-end wound dressing products, traditional wound care and wound dressing
products, consumable products in operating room, infection protection products and health & personal care products, covering
application scenarios like clinical and medical institutions and families, which can better meet clients’ needs of one-stop
procurement. In addition to traditional wound care products and wound dressing products, the Company has also developed
representative high-end wet dressings like silicone foam dressings, hydrocolloid dressings, super absorbent pads and scar
treatment strip for chronic wounds that are difficult to heal, which has further enrich its products. For the clinical use scenarios,
the Company is committed to changing from selling single products to providing customers with integrated solutions. Its infection
protection products include dozens of surgical packs for various sections, such as heart and brain, abdominal cavity, urology,
reproduction, facial features, and limbs. In terms of protective products, the Company has successfully developed and marketed
biodegradable masks, N95 medical protective masks of high permeability and other products, providing solutions for the
environmental attributes of mask products and greatly enhancing the comfort of mask products. In the field of home care, the
Company provides professional products for clinical use such as hyaluronic acid masks, saline cleaning pads, hydrocolloid
band-aids and medical sheet masks to consumers through portable, sterilized and diversified packages. These professional health
care products and services in daily home care help customers reduce the frequency of going to the hospital.
(2) Healthy consumer goods
The Company’s healthy consumer goods consist of non-woven consumer goods and textile consumer goods. Non-woven
consumer products mainly include wet and dry cotton towels, sanitary napkins, etc.; textile consumer products mainly include
baby clothing and supplies, adult apparel and other textile products. Cotton fiber has ten prominent advantages, including natural,
safe, comfortable, naturally degradable, high output ratio, drought-resistant, salt and alkali-resistant, environmentally friendly,
time-honored, as well as great economic and social value. The Company takes the lead in proposing the innovative concept of
replacing chemical fibers with cotton and getting rid of chemical stimulation, and provides consumers with healthy, comfortable
and environmentally friendly consumer goods. And its cotton tissues are pioneering tissues in the industry, which can partially
replace household paper. Pure cotton tissues are made of degradable cotton after physical processing. There are less chemical
stimulation and the tissues can be reused. The tissues are more comfortable, safe, and environmentally friendly, so consumer
acceptance of the tissues has been significantly improved, and there are many imitators in the market. For pure cotton wet tissues
31
Winner Medical
and sanitary napkins with pure cotton surface, cotton materials are innovatively used in the parts of these products that contact
human skin to replace traditional chemical fiber and effectively reduce chemical irritation, so they are popular in the markets of
baby and female consumers. Due to the excellent breathability and softness of gauze fabrics, the Company’s apparel and textile
consumer products such as gauze children’s apparel, household apparel, bedding and bath towels are getting more popular.
5. Brand advantages
(1) Brand advantages in the field of medical consumables
As a leading enterprise in the medical consumables sector, the Company’s core strategy revolves around “leading products with
operational excellence”. Through global exhibitions, the Stable Academy’s sense control training courses, operating room
management forums, wound training programs, and other initiatives, the “Winner Medical” brand has gained widespread
recognition in the medical industry. Both domestically and internationally, customers trust the Company’s business philosophy
and product quality. The Company’s medical consumables are mainly sold to 110 countries, mainly developed countries and
regions such as Europe, Japan and the United States, and the products under its brand Winner are mainly sold to developing
countries and regions such as Asia, Africa, and Latin America. The Company are providing services for world-renowned medical
supplies companies such as Mlnlycke, Lohmann, and PAUL HARTMANN. The products of “Winner Medical” brands have
covered all public and most private hospitals in Hong Kong.
(2) Brand advantages in the field of healthy consumer goods
Purcotton is a wholly owned subsidiary of Winner Medical. With high quality cotton as the core material, Purcotton insists on
prioritizing quality with heart and soul, bringing comfortable, healthy, and environmentally friendly cotton lifestyle to consumers.
Purcotton products have been recognized and trusted by more than 52.42 million members. Adhering to the brand concept of
“reassurance, happiness and sustainability”, Purcotton advocates the public to use more cotton, reduce environmental pollution
and return to the natural way of life. The Purcotton tissues developed by Purcotton is a pioneering category. Purcotton are creating
new categories and lifestyles by applying cotton materials in its core products, such as its all-cotton cotton wet wipes, sanitary
napkins with pure cotton surface, pure cotton diapers, and its gauze textile products and apparel. It has shaped an brand image of
“new Chinese products” with cotton as the core material and excellent product quality. Its brand awareness is increasing and its
reputation is improving year by year, forming effective competition barriers and bringing powerful added value of products for
Purcotton.
6. Advantages of sales channels
(1) Advantages of online channels
In terms of online channels, the Company’s “Winner Medical” and “Purcotton” have completed the deployment of mainstream
third-party e-commerce platforms, including Tmall, JD.com, Pinduoduo, Vipshop and Amazon. With the huge user traffic
gathered, its sales has covered most online shopping consumer groups, and the sales data indicated that the sales of its products
rank among the top in the relevant product categories in major e-commerce platforms. With the attributes of “sales + social”,
Purcotton’s official website and WeChat mini programs are important platforms for its product display, user interaction, and
brand promotion. At the same time, Purcotton is also cooperating with new social retail platforms such as TikTok, Kuaishou and
Xiaohongshu, which helps it open up new sales growth channels.
(2) Advantages of offline channels
As of the end of 2023, the medical consumables segment has reached over 6,000 medical institutions and 190,000 retail
pharmacies across China. Additionally, the Company’s foreign medical business serves customers and distributors in hundreds of
countries and regions worldwide, including Europe, Japan, and the United States.
In the healthy consumer goods section, as of June 30, 2023, Purcotton has opened 411 offline stores (including 74 franchisees) in
more than 90 mid- and high-end shopping malls in Shenzhen, Shanghai, Beijing, Guangzhou and other key cities in China. The
Company integrates its brand concept into its store design. It hires well-known designers at home and abroad to upgrade its store
image and to enhance its consumer experience with an exhibition-style product display balancing both aesthetics and richness of
products. It also adds an experience area to highlight product display and consumer experience, which has helped increase the
Company’s sales revenue and further increase its brand awareness. As for offline terminals like chain stores and supermarkets,
based on Purcotton’s positioning of high-quality consumer goods, the Company mainly deploys Purcotton products in nationally
renowned supermarket chains, high-end boutique supermarkets, leading regional supermarkets, convenience store chains, beauty
stores, and offline mother and baby stores. Meanwhile, the Company also has set up dedicated sales teams to cover the bulk
purchase or customized purchase needs of corporate clients.
32
(3) Advantages of integration between online and offline channels
The omnichannel retail model is a newly emerging retail form that provides consumers with a consistent shopping experience by
integrating physical stores, third-party e-commerce platforms, and mobile e-commerce channels. In such form, the convenience of
online channels and the consumer experience of offline channels can complement each other. Having a deep insight into the
development trend of integrating online and offline omni-channel integration, the Company thoroughly optimized and integrated
various channels to integrate traffic and sales of offline stores, supermarkets, stores and online apps, and home delivery platforms
(Meituan, daojia.jd.com, and ele.me, etc.), thereby further improving its operating efficiency and performance. Online channels
can meet offline consumers subsequent consumption needs while offline channels can provide online consumers further product
information and service experience. Flows of traffics can be directed between the two kinds of channels, so online and offline
traffic can be effectively obtained. As of December 31, 2023, Purcotton boasted approximately 52.42 million members across all
domains, with over 26 million registered members on the private domain platform (over 12 million in stores and over 14 million
on the official website and mini-programs).
7. Advantages of full industrial chain
Adhering to the business philosophy of “quality over profit”, the Company has been constantly improving its product quality, cost
and delivery management and control, and has built a full industrial chain with advantages from procurement, production,
sterilization, warehousing, to delivery. With eleven manufacturing branches/subsidiaries, the Company annually distributes a wide
range of high-quality medical consumables and health-conscious consumer goods worldwide. Winner Medical (Yichang),
established in 1999, operates with 137 advanced air-jet looms and serves as the primary production base for grey fabrics. Winner
Medical (Tianmen), founded in 2000 and spanning an area of 150,000 square meters, specializes in producing cotton spunlace
nonwoven fabrics, cotton soft towels, medical dressings, and medical protection products. It serves as a key domestic production
base for cotton spunlace nonwoven fabrics and medical gauze. Established in 2005 with an area of 550,000 square meters, Winner
Medical (Huanggang) is the main production site of pure cotton spunlace non-woven fabrics, cotton tissues, sanitary napkins, and
masks; with an area of 67,000 square meters, Winner Medical (Jingmen) is the main production site of gauze apparel, degreased
medical bleached gauze, and dyed medical gauze; with an area of 93,000 square meters, Winner Medical (Jiayu) has four product
categories with pure cotton as basic materials, i.e. the cleaning, disinfection, beauty, and care categories, and two product
collections: medical and daily use products; established in 2001 with an area of 140,000 square meters, Winner Medical
(Chongyang) is the Company’s main force of producing its disposable surgical kits and other infection control products in
operating room, protective clothing and other epidemic prevention products, all kinds of cotton balls and cotton pads; established
in 2017 with a total area of about 467,000 square meters of its phase I and phases II sites, Winner Medical (Wuhan) has brought
in electron beam sterilization and international modern cotton spunlace production line. In January 2022, the Company acquired
an industrial land of nearly 15,000 square meters located in Guanlan Street, Longhua District. In the future, the land will be built
into an industrial base for medical biological and infection control protection in the Guangdong-Hong Kong-Macao Greater Bay
Area, which will be used for scientific research innovation and industrial production of medical biology, high-end medical
dressings and medical infection control protection products. In 2022, the Company acquired three companies, i.e. Longterm
Medical, Winner Guilin, and Winner Medical (Hunan), to solidify the key foundation for building the capability of one-stop
medical consumables solution. Through continuous construction and improvement, the daily management system within the
factory was optimized through lean management, standardization, automation, digitalization and greening. In future, the Company
is also going to explore and build smart factories. It will realize “unmanned production, process-based management, and process
digitalization” step by step.
IV. Analysis of main business
1. Overview
(I) Business analysis
33
Winner Medical
In 2023, the domestic economy fully rebounded, with supply and demand steadily improving, leading to overall economic
enhancement. In the face of the changing external environment under the new situation, Winner Medical positions itself as a
leading healthcare enterprise, emphasizing synergistic development in healthcare and consumer sector. Based on the two
businesses of medical consumables and consumer healthcare products, it has responded positively and adjusted flexibly under the
guidance of the three core business principles of “quality over profit, brand over speed, and social value over corporate value”. In
2023, the Company sticks to the core strategy of “leading products with operational excellence”, maintaining a commitment to
independent innovation and R&D of fundamental materials. We consistently enhance product competitiveness, prioritize core
popular products, expand channel development, and foster the continuous enhancement of brand awareness and reputation.
Additionally, we’ll focus on elevating overall operation and management quality. In the previous year, due to the high base in
infection protection products, market demand sharply declined this year, leading to unfavorable conditions. In 2023, the
Company’s cumulative operating income reached 8.19 billion yuan, marking a year-on-year decline of 27.9%. It achieved a net
profit attributable to shareholders of listed companies of 580 million yuan, with a net profit of 410 million yuan excluding
non-recurring gains and losses, reflecting year-on-year declines of 64.8% and 73.6%, respectively. Excluding infection protection
products, the traditional medical consumables business achieved operating income of 2.95 billion yuan, while the consumer
products business achieved operating income of 4.26 billion yuan. This marks a year-on-year growth of 17.3% and 6.4%,
respectively, highlighting the enduring strength of Winner Medical’s long-term development.
(1) Medical consumables business: significant impact of high base of infection protection products, steady development
of conventional products business
In recent years, under the influence of tightening global medical regulation and accelerated process of population aging and
chronic disease, the medical device industry has ushered in a golden period of rapid development. The medical consumables
sector is in a rapid development stage for its high frequency of use and low industry concentration ratio. Compared with the
global market, China’s medical consumables market is more promising in terms of scale and growth rate.
Our medical consumables brand, Winner Medical, has been cultivating the medical consumables industry for more than 33 years
and has steadily went through several rounds of economic and industry development cycles. In the face of public health events in
the past three years, the Company has made every effort to guarantee the supply of medical supplies. While making due
contributions to society, its brand awareness and reputation have been significantly improved. Our channels have been further
consolidated. In 2023, due to the impact of the high baseline set by infection protection products in the previous year and a
significant decrease in market demand this year, the medical consumables business achieved a cumulative operating income of
3.86 billion yuan. This represents a year-on-year decline of 46.7%. Meanwhile, the core medical consumables sector recorded an
operating income of 2.95 billion yuan, marking a robust 17.3% year-on-year growth. This sets a strong footing for the enduring
advancement of our medical business.
1 Products
Committed to evolving into a comprehensive solution brand for medical consumables, the Company offers a wide range of
products encompassing traditional wound care and wound dressings, high-end wound dressing products, operating room
consumables, infection protection products, and health personal care products. The Company prioritizes R&D investment and
holds a significant advantage in the number of medical product registration certificates, establishing a competitive barrier in the
stable medical sector. As of the end of the reporting period, we hold 883 patents in the medical consumables segment and 367
medical product registrations (including 25 registrations of Category III medical products). In 2023, there were 159 net new R&D
patents and 48 net new medical product registrations.
Throughout the reporting period, market demand for infection protection products notably declined starting from the second
quarter. Coupled with high market inventory, this category experienced a steep year-on-year decrease in annual operating income,
dropping by 3.82 billion yuan or 80.7% due to low sales volume. In addition, the business of conventional medical consumables
developed steadily. Among them, the traditional dressings business generated revenue of 1.15 billion yuan, marking a 7.0%
year-on-year increase; the high-end dressings and operating room consumables businesses achieved operating revenue of 600
million yuan and 560 million yuan, respectively, representing a 27.7% and 17.7% year-on-year growth, demonstrating stronger
growth momentum. Guided by the strategy of “leading products with operational excellence”, several categories upheld robust
competitiveness within their respective segments. In 2023, sales of various core products surged significantly, with surgical kits,
film dressings, and oral-nasal and incontinence care categories all experiencing year-on-year growth rates exceeding 35%.
Through the acquisition of Longterm Medical, Winner Medical (Hunan), Winner Guilin and other companies, the Company
increased product lines in the fields of high-end wound dressings, injection and puncture consumables, latex gloves and condoms,
which strongly improved its industrial layout. Following a year of extensive empowerment and resource integration in 2023, the
merged companies delivered positive outcomes in business synergy and value optimization. In the future, the Company will
continue to strengthen the in-depth integration of M&A companies in multiple fields such as capacity enhancement, product
technology, brand channels and operation management to help the relevant category and the product production lines make
greater contributions to the Company.
34
2 Channel
In 2023, the Company continued to enhance its marketing initiatives through various means and actively expanded its marketing
channels. Besides, changes in the public health event situation restored a more balanced and rationalized revenue structure across
channels.
Throughout the reporting period, despite the multifaceted impacts of the international environment, the Company’s overseas
channels remained resilient, achieving a cumulative operating income of 1.45 billion yuan. This marks a remarkable growth of
15.4% against the prevailing trend and constitutes 37.5% of the revenue of the medical segment. Domestic hospital channels are
steadily expanding. As of the end of 2023, the Company has reached over six thousand medical institutions, generating operating
income of 920 million yuan for the year. This accounts for 23.7% of the revenue share in the medical segment.
The C-suite business saw active development, with e-commerce and domestic pharmacies generating operating revenues of 630
million yuan and 330 million yuan respectively during the year, collectively representing 24.7% of the medical segment’s revenue.
The domestic popular e-commerce product strategy is gaining clarity and focus. Cross-border e-commerce is rapidly growing,
with the core large-item category maintaining its top position on the Amazon platform for cross-border sales. In the domestic
market, the Company’s products were available in over 190,000 over-the-counter (OTC) pharmacies by the end of the period,
marking an addition of over 40,000 pharmacies throughout the year, reflecting significant expansion.
(2) Consumer health products business: remarkable product advantages, and substantial efficiency improvement in store
expansion
According to data from the National Bureau of Statistics, the total retail sales of consumer goods in 2023 reached 47.1 trillion
yuan, marking a 7.2% year-on-year increase and setting another record high. As the overall vitality of the consumer market
continues to improve, the trend of consumption stratification is evident, where both pleasing aesthetics and rationality coexist.
This profoundly influences the competitive dynamics within segmented market tracks. In such a market environment, the
Company is positioned in the premium national product segment, aligning with the contemporary surge in the national trend
economy and demonstrating sustained growth momentum.
Backed by the parent Company with a medical background of more than 30 years, Purcotton, the Company’s healthy consumer
goods brand starts with the technology of cotton spunlace non-woven fabric, and continuously enrich its product categories. The
consumption scene has expanded from maternal and infant to the whole family consumption of women and home. The three core
advantages of “Medical background, Purcotton philosophy, Quality in our DNA” have united a highly loyal customer base in
pursuit of “reassurance, happiness and sustainability” for Purcotton. In 2023, Purcotton continued to strengthen brand building,
emphasizing three major scenarios and implementing the pop-up strategy, achieving operating income of 4.26 billion yuan during
the reporting period. With the base from last year not significantly lower, it grew by 6.4% year-on-year, and by 41.7% compared
to that of 2019, demonstrating strong development resilience.
1 Products
Guided by the principle of “cotton fiber only”, Purcotton continuously invests in technology research and development, and has
built up a differentiated product matrix. In 2023, the Company continued to innovate through research and development,
highlighting the unique selling points of its products. It steadily improved its industry ranking in core categories, achieving
record-high sell-out rates for both infant and adult apparel. Additionally, it significantly reduced inventory turnover days, greatly
enhancing merchandise operations efficiency. Amidst consumption stratification, the Company embraced the brand IP story of
“What She Changed”, launched the brand “Hello, Cotton Color”, and employed scientific marketing strategies such as “Soft
Cotton Tissues ≠ Cotton Tissues”. The official announcement of spokespersons and other promotional activities effectively
highlighted the advantages of Purcotton, resulting in a record-high brand volume.
The Company introduced the cotton soft towel category in 2009, and Purcotton led the formulation of the national standard of
“Soft Towels” in 2021, further promoting its position in the industry. Sales of wet and dry cotton towels, the core flagship
products, have seen steady growth, maintaining a leading market position. In the reporting period, they achieved operating income
of 1.19 billion yuan, marking a 2.8% year-on-year increase. The Purcotton sanitary napkin products transitioned to a 100% cotton
core from wood pulp, boasting skin-friendly and non-allergenic qualities. During the reporting period, the Company achieved an
operating income of 590 million yuan, marking a 4.2% increase. Thanks to the recovery of offline sales, there was a notable
growth rate in adult apparel and other textile products, particularly bedding and toiletries products, which prioritize the sensory
experience. During the reporting period, they achieved operating revenues of 840 million yuan and 410 million yuan, respectively,
representing year-on-year growth of 21.7% and 17.1%. By the end of the reporting period, Purcotton has obtained a total of 492
patents, 67 new patents in 2023. The Company continues to promote green product certification, product carbon footprinting,
research and development of biodegradable products, organic cotton breeding and application, leading the green development of
the industry.
35
Winner Medical
2 Channel
In terms of channels, Purcotton has diversified online and offline channels, including traditional third-party platforms such as
Tmall, JD.com, Vipshop, e-commerce platforms such as TikTok, Xiaohongshu and other interest in e-commerce platforms, as
well as its own official website and applets and other self-owned platforms. In terms of the offline channel, the strategy involves
direct encryption of offline presence in first and second-tier cities, while focusing on joining in the core of third and fourth-tier
cities; At the same time, through the mode of offline experience and online re-purchase, deep integration of multiple channels,
complementary advantages of multiple platforms. In 2023, building on its omni-channel strategy, Purcotton vigorously expanded
its offline presence through high-quality chain superstores and instant retail outlets. Meanwhile, online operations were fine-tuned
with a focus on platforms like the TikTok. As of the end of the reporting period, there were approximately 52.42 million members
in across the domain, an increase of 12.1% from the end of last year.
The offline market witnessed a swift recovery, with offline stores emerging as the primary revenue driver for Purcotton. During
the reporting period, offline stores generated operating income of 1.36 billion yuan, marking an impressive 18.7% year-on-year
increase. Embracing digital transformation, the Company leveraged tools such as smart shelves and tailored display strategies for
different store formats. It also prioritized area efficiency improvement, targeting cabinet and product efficiency enhancements. As
a result, store area efficiency surged by approximately 15% year-on-year. In line with its expansion strategy, the Company
significantly ramped up store openings during the reporting period, launching a total of 84 new stores (comprising 42 new
directly-managed stores and 42 franchise stores). By the end of the reporting period, the Company boasted a total of 411 offline
stores, including 337 directly-managed stores and 74 franchise stores. During the year, Purcotton continued to explore its online
channels. It improves its fine operation ability, focuses on the matrix of new products and popular products, and strengthens the
mutual penetration among categories. Through brand activities, content community, membership system and other in-depth
operation, the conversion rate of new customers and old customers are increased. During the reporting period, the online channel
achieved operating revenue of 2.58 billion yuan, marking a 1.2% year-on-year increase. The development of the supermarket
channel remained steady and promising, contributing revenue of 240 million yuan in 2023, reflecting a solid 4.3% year-on-year
increase.
(3) Company profitability analysis
The profitability performance of the two businesses diverged due to the varying industry conditions they operate in.
In the medical consumables sector, there was a notable decline in demand for infection protection products throughout the year.
This led to a widespread issue of high inventory levels coupled with sluggish sales movement across the industry. On one hand,
the Company decisively and efficiently cleared inventory and disposed of equipment. On the other hand, to safeguard the
sustainable development of the Company’s supply chain, the Company took the initiative to collaborate with suppliers,
distributors, and customers to manage inventory and share the pressure collectively. While these actions impacted profitability for
the current year, they maintained long-term cooperative relationships, reflecting the Company’s commitment to responsibility and
forward-thinking operations. These measures collectively reduced net profit by approximately 250 million yuan for the full year.
In the healthy living consumer product business, Purcotton pursued a multifaceted strategy to enhance profitability in 2023. This
included strict discount control, cost-saving measures, efficiency enhancements, product innovation, structural optimization, and
operational refinement. During the reporting period, Purcotton achieved a gross profit margin of 56.9% for the year, marking a 3.9
percentage point increase year-on-year. Operating profit amounted to 490 million yuan, reflecting a 24.0% year-on-year increase,
with an operating profit margin of 11.4%, indicating steady profitability improvement.
Additionally, due to shifts in the medical consumables industry and market conditions, the two subsidiaries, Winner Medical
(Hunan) and Winner Guilin, acquired by the Company in 2022, experienced lower-than-expected performance during the
reporting period. Signs of goodwill impairment emerged, prompting the Company to engage Yinxin Appraisal Co., Ltd. for a
goodwill assessment. The assessment revealed a goodwill impairment of 160 million yuan for Winner Medical (Hunan) and 30
million yuan for Winner Guilin, significantly impacting the income statement for the period. Throughout 2023, the Company
implemented various operational initiatives to facilitate a stable transition in the acquired companies’ performance and lay a
robust foundation for their long-term development. To boost its overall competitiveness, Winner Medical (Hunan) dedicated itself
to constructing a benchmark project for the second phase of the Medical Device Industrial Park. The goal was to transition into a
smart factory emphasizing precision manufacturing, standardization, automation, intelligence, and digitization. Additionally, the
Company worked to successfully engage overseas strategic cooperation customers in launching high-end infusion products in
Europe and the United States, aiming for dual-wheel growth in both overseas and domestic sales. These efforts aimed to establish
a strong foundation for the long-term development of Winner Medical (Hunan). Throughout the year, Winner Medical (Hunan)
acquired Winner Medical Jingzhou Glove Factory, which offers cost advantages and operates 10 glove production lines. This
acquisition facilitated increased investment in automation, aimed at enhancing cost competitiveness, overcoming capacity
constraints, and striving to expand both domestic and overseas market shares.
36
(II) Business analysis
(1) Product R&D
The Company sticks to independent innovation and development of basic materials. In the field of medical wound care, the
Company continued to improve the second generation of high-end wet wound dressings product line technology arrangements,
had the scar repair new products successfully marketed in China, and several newly developed antimicrobial dressings and
bioactive collagen dressings received FDA clearance in the US. Relying on the success of last year’s research and development of
a variety of core basic materials and mass production and application, the Company in the first half of this year focused on
improving product competitiveness in the direction of product development and upgrading to meet the differentiated customized
design needs of customers. In the field of medical consumables, the Company focuses on the development of core basic materials
on the application of operating room consumables such as surgical gowns, isolation gowns, surgical towels and wipes, to enhance
the comfort of the products, reduce the cost of production of the products, and to further enhance the market competitiveness of
the products, provide a better experience of the products for the medical practitioners and other users, and continue to create
greater value for users. In the area of production and research, in June 2023, the Company and Wuhan Textile University jointly
built a comprehensive technological innovation platform for advanced fiber materials in Hubei Province to carry out industrial
incubation, and trying to complete the in vitro and in vivo biological evaluation of a new series of artificial blood vessels with
high patency rate early, to break the monopoly of artificial blood vessels abroad, and to achieve the substitution with home-made
products. In November 2023, the Company’s bionic artificial cornea project was successfully designated as a major scientific and
technological research project in Shenzhen, in collaboration with the Southern University of Science and Technology. Venturing
into the research of high-value medical bionic implant materials and expanding the application fields of collagen will help the
Company enhance the production capacity of its collagen production line.
In the healthy consumer goods sector, the Company combined snow cotton yarn technology with the mercerization process to
launch the first cool sensation gauze products. These products surpassed the national standard for cool sensation value by 30%
upon contact. Additionally, by leveraging cotton covering yarn technology and equipment upgrades, the Company achieved a
breakthrough in gauze elasticity with its elastic gauze. Moreover, implementing a low-temperature de-bleaching process enhanced
the softness of cotton-soft towels by 15%. Combining this with high-fluff hydroent spunlace technology increased thickness by
10% while significantly reducing energy consumption through lower production temperatures. Through independent research on
wind-soft cotton yarn, the Company developed a series of warm products called wind-soft cotton warm flannels. These products
boast a heat preservation rate exceeding 30% and are 20% lighter. The development of stretch jersey fabrics has significantly
enhanced the comfort and elasticity of baby and toddler jerseys and pants. The developed ozone bleaching technology can be used
to desize and bleach cotton fabric by gaseous ozone treatment at low temperature. Compared with traditional pretreatment, it
saves 92% of water and discharges zero sewage; and it saves 44% of chemicals, 49% of energy, and reduces carbon dioxide
emissions by 95%. The technology has been pioneered in the application of bedding suits and sandwich quilts. The Company
continues to carry out the excavation and transformation of low-carbon production processes, and has completed the verification
statement of carbon footprint for several core products. In addition, on that basis, the Company has carried out carbon reduction
by the low-temperature de-bleaching technology, with the unit steam consumption reduced by more than 30%. In terms of
production, learning, and research, the Company collaborates with Tianjin Polytechnic University to conduct research on the
wearing comfort of cotton leisure wear. Additionally, it partners with Jiangnan University to enhance the performance of cotton
and cotton-type yarn through technological advancements. Furthermore, the Company conducts research with Soochow
University on the effects of fabrics on the surface temperature of baby blankets and sleeping bags.
(2) Brand building
Winner Medical continued to consolidate the brand image favored by the public and trusted by doctors and nurses, and
continuously improved brand awareness and reputation through effective means. Through clinical promotion, Winner Medical
optimizes end-to-end marketing transformation through content operation, creates brand values through public welfare activities,
and achieves corporate strategies by leveraging brand marketing as a catalyst. During the reporting period, brand building efforts
primarily focused on large-scale tournament activities, collaborations with public relations media, and partnerships with various
industry brand associations. The “55 Hand Care Festival”, an original IP brand of Winner Medical, garnered over 110 million
exposures. Additionally, the Company collaborated with various C-end young brands across different industries, resulting in
online exposure exceeding 16 million. Winner Medical participated in 14 domestic and overseas large and medium-sized
exhibitions, showcasing its product range and overall capabilities to both professional and general audiences. In November 2023,
Winner Medical took part in the inaugural China International Supply Chain Promotion Expo in Beijing, representing the Healthy
Life Pavilion and showcasing Chinese enterprises’ supply chain resilience. As to branding, Winner Medical cooperated and
interacted with leading media and business magnates to co-create positive communications and actively build its brand image.
The advertising on Weibo, WeChat, Xiaohongshu, TikTok, elevator ads and other channels generated an overall exposure of over
1.4 billion. The Company showcased its latest products and state-of-the-art technologies to customers and consumers at home and
abroad.
In terms of brand construction, Purcotton continued to deepen its communication with consumers, and continued to convey to
consumers the multiple advantages of “cotton” in environmental protection and sustainable development through spokespersons,
creation of original high-quality content, offline exhibition tours and press conferences, so as to enhance consumer awareness and
37
Winner Medical
is highly to the brand. In February 2023, Purcotton officially announced new generation actor Sun Qian as its brand ambassador
and held a new product release event. In March 2023, the brand continued to launch its original character documentary series,
“What She Changed” by Bai Xiangen, with over 42 million video views and 734 million microblog topic reads. The Purcotton
Traceability Tour continues its mission of spreading cotton culture and values. During the annual 818 membership day, we
ventured into the cotton fields in Xinjiang, situated at 44° north latitude. With cameras in hand, we captured the life journey of
cotton. Additionally, we hosted the “Hello Cotton Color” cotton color theme exhibition, blending art, science, and humanities.
This innovative exhibition invites the public to explore the vibrant world of cotton and experience its unique “gentle but resilient”
vitality. On August 16, 2023, the “Hello Cotton Color” theme event - Sun Qian meeting took place in Shenzhen, inviting
members to delve into the natural beauty and color charm of cotton. In October 2023, Zhao Liying was announced as the global
spokesperson for Cotton Era Home Textiles and Home Apparel, promoting the soft, light, and warm cotton home lifestyle. CNY
continues its theme of “Every Generation has a Cotton Era”, sharing cotton-related New Year stories that bring joy to every
generation of Chinese people. In February, Winner Medical and Purcotton, as the “Official Partner of 2022 Shenzhen Marathon”
and “Official Sponsor of Shenzhen Marathon 2023”, provided high-quality health protection products and cotton lifestyle
products to convey the concept of “Love Life and Love Health”. To harness the environmental activism of young people, Cotton
Era has introduced the [WE Eco Cotton-Use] Campus Environmental Protection Series in 50 cities across 25 provinces and 296
colleges and universities nationwide. This initiative invites young individuals to embrace a green and sustainable all-cotton
lifestyle through public welfare lectures, packaging design competitions, and various online and offline campus-wide
environmental protection activities. The goal is to promote clean skies, green landscapes, and clear waters.
2. Revenues and costs
(1) Composition of operating income
Overall operating income
Unit: yuan
2023 2022
Year-on-year
Proportion in Proportion increase/decr
Amount operating Amount in operating ease
income income
8,185,022,057.20 100% 11,351,331,545.08 100% -27.89%
Total operating income
By industries
Medical consumables 3,861,746,216.57 47.18% 7,250,181,476.631 63.87% -46.74%
Healthy consumer goods 4,262,578,436.61 52.08% 4,007,570,333.37 35.30% 6.36%
Others 60,697,404.02 0.74% 93,579,735.08 0.82% -35.14%
By products
Medical consumables - traditional wound care and
1,152,978,257.74 14.09% 1,077,558,999.19 9.49% 7.00%
wound dressing products
Medical consumables - advanced wound dressing
595,391,352.74 7.27% 466,329,531.98 4.11% 27.68%
products
Medical consumables - operating room
555,205,865.12 6.78% 471,737,488.55 4.16% 17.69%
consumables
Medical consumables - infection protection
912,495,298.85 11.15% 4,735,248,687.64 41.72% -80.73%
products
Medical consumables - health & personal care
298,890,864.36 3.65% 316,264,298.92 2.79% -5.49%
products
Medical consumables - other products 346,784,577.76 4.24% 183,042,470.35 1.61% 89.46%2
Healthy consumer goods - wet and dry cotton
1,187,127,619.96 14.50% 1,155,141,187.50 10.18% 2.77%
tissues
Healthy consumer goods - sanitary napkins 593,006,956.43 7.25% 569,333,764.43 5.02% 4.16%
Healthy consumer goods - other non-woven
381,405,875.17 4.66% 393,710,479.90 3.47% -3.13%
products
38
2023 2022
Year-on-year
Proportion in Proportion increase/decr
Amount operating Amount in operating ease
income income
Healthy consumer goods - baby clothing and
850,728,263.63 10.39% 848,630,484.33 7.48% 0.25%
supplies
Healthy consumer goods - adult apparel 836,195,171.03 10.22% 687,219,850.71 6.05% 21.68%
Healthy consumer goods - other woven products 414,114,550.39 5.06% 353,534,566.50 3.11% 17.14%
Other businesses 60,697,404.02 0.74% 93,579,735.08 0.82% -35.14%
By regions
Domestic 6,641,101,860.83 81.14% 10,044,710,560.59 88.49% -33.88%
Abroad 1,543,920,196.37 18.86% 1,306,620,984.49 11.51% 18.16%
By sales modes
Medical consumables - direct sales 1,304,478,252.94 15.94% 1,489,139,092.80 13.12% -12.40%
Medical consumables - distribution 1,694,286,484.17 20.70% 4,539,719,035.77 40.01% -62.68%
Medical consumables - agency 235,692,905.75 2.88% 267,075,893.05 2.35% -11.75%
Medical consumables - e-commerce 627,288,573.71 7.66% 954,247,455.01 8.41% -34.26%
Healthy consumer goods - e-commerce 2,582,593,865.54 31.55% 2,552,211,792.04 22.48% 1.19%
Healthy consumer goods - offline stores 1,364,371,807.21 16.67% 1,149,718,252.71 10.13% 18.67%
Healthy consumer goods - supermarket channels 241,650,661.47 2.95% 231,766,054.19 2.04% 4.26%
Healthy consumer goods - key accounts 73,962,102.39 0.90% 73,874,234.43 0.65% 0.12%
Other businesses 60,697,404.02 0.74% 93,579,735.08 0.82% -35.14%
Note: 1- In 2023, the Company undertook a restructuring and management organization adjustment of the PureH2B business. It
merged the health and personal care business of PureH2B into the medical segment for management. Consequently, the data for
FY2022 was synchronously adjusted by reallocating a portion of PureH2B’s business, originally in the consumer goods segment,
to the health personal care products of the medical segment. The adjusted revenue amounted to 47,415,228.79 yuan.
2-Medical Consumables-Other products primarily include infusion products from Winner Medical (Hunan), which experienced an
89.46% increase. This surge is largely attributable to Winner Medical (Hunan)’s consolidation into our operations in July 2022.
Revenue from Winner Medical (Hunan) was consolidated from July to December in 2022, and the full year in the current period.
39
Winner Medical
(2) Industries, products, regions and sales patterns that account for more than 10% of the Company’s operating income
or operating profits
√Applicable □ Not applicable
Unit: yuan
Increase or Year-on-ye
decrease in ar
Year-on-year
Gross profit costs over the increase/de
Revenue Operating costs increase/decre
margin same period of crease of
ase of revenue
the previous gross profit
year margin
By industries
Medical consumables 3,861,746,216.57 2,300,419,930.63 40.43% -46.74% -42.87% -4.03%
Healthy consumer goods 4,262,578,436.61 1,839,082,724.68 56.86% 6.36% -2.36% 3.85%
By products
Medical consumables - infection protection
912,495,298.85 504,221,134.36 44.74% -80.73% -79.35% -3.69%
products
Medical consumables - traditional wound
1,152,978,257.74 756,271,542.20 34.41% 7.00% 4.83% 1.36%
care and wound dressing products
Healthy consumer goods - wet and dry
1,187,127,619.96 560,892,390.86 52.75% 2.77% -4.19% 3.43%
cotton tissues
Healthy consumer goods - baby clothing
850,728,263.63 361,286,447.91 57.53% 0.25% -9.55% 4.60%
and supplies
Healthy consumer goods - adult apparel 836,195,171.03 308,237,685.37 63.14% 21.68% 8.63% 4.43%
By regions
Domestic 6,641,101,860.83 3,289,931,216.04 50.46% -33.26% -36.28% 2.34%
Abroad 1,543,920,196.37 884,666,071.70 42.70% 18.16% 18.39% -0.11%
By sales modes
Medical consumables - direct sales 1,304,478,252.94 777,136,388.30 40.43% -12.40% -5.30% -4.46%
Medical consumables - distribution 1,694,286,484.17 1,051,643,696.25 37.93% -62.68% -60.07% -4.05%
Healthy consumer goods - e-commerce 2,582,593,865.54 1,223,659,985.13 52.62% 1.19% -7.11% 4.23%
Healthy consumer goods - offline stores 1,364,371,807.21 487,857,068.67 64.24% 18.67% 10.42% 2.67%
Note: In 2023, the Company underwent a restructuring and management organization adjustment of the PureH2B business. It
merged the health personal care business of PureH2B into the medical segment for management. Consequently, the data for 2022
was synchronously adjusted by reallocating a portion of PureH2B’s business, originally in the consumer goods segment, to the
medical segment. The adjusted revenue amounted to 47,415,228.79 yuan, and the adjusted cost amounted to 30,538,838.48 yuan.
In the event that the statistical caliber of the Company’s main business data is adjusted in the reporting period, the Company shall
follow the main business data in the past year adjusted by the caliber at the end of the reporting period
□ Applicable √ Not applicable
40
The Company needs to comply with the disclosure requirements of the “Textile and Apparel Business” stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
Unit: yuan
Increase or
decrease in
costs over Year-on-year
Gross Year-on-year
the same increase/decr
Revenue Operating costs profit increase/decre
period of ease of gross
margin ase of revenue
the profit margin
previous
year
By industries
Healthy consumer goods 4,262,578,436.61 1,839,082,724.68 56.86% 6.36% -2.36% 3.85%
By products
Healthy consumer goods - wet and dry
1,187,127,619.96 560,892,390.86 52.75% 2.77% -4.19% 3.43%
cotton tissues
Healthy consumer goods - baby clothing and
850,728,263.63 361,286,447.91 57.53% 0.25% -9.55% 4.60%
supplies
Healthy consumer goods - adult apparel 836,195,171.03 308,237,685.37 63.14% 21.68% 8.63% 4.43%
By regions
By sales modes
Healthy consumer goods - e-commerce 2,582,593,865.54 1,223,659,985.13 52.62% 1.19% -7.11% 4.23%
Healthy consumer goods - offline stores 1,364,371,807.21 487,857,068.67 64.24% 18.67% 10.42% 2.67%
In 2023, the Company split PureH2B’s business and reorganized its management structure. The health and personal care business
of PureH2B was integrated into the medical segment for management. Consequently, the data for 2022 was adjusted accordingly.
The PureH2B business, originally classified under the consumer goods segment, was reclassified to the medical segment. This
resulted in an adjusted income amounting to 47,415,228.79 yuan and an adjusted cost amounting to 30,538,838.48 yuan.
If the statistical caliber of the Company’s main business data is adjusted in the reporting period, the Company shall follow the
primary business data in the past year changed by the caliber at the end of the reporting period
□ Applicable √ Not applicable
Whether the Company has sales terminals in brick-and-mortar stores
√ Yes □ No
Distribution of brick-and-mortar stores
Number of stores
Number of new
Number of closed at the end Brands
Types of stores Area of stores stores during the Reasons for store closings
stores of the reporting involved
reporting period
period
Direct-sale Voluntarily store closing because of
337 107,800 42 13 Purcotton
stores expiration of contract or subjective wishes
Franchises 74 16,591 42
41
Winner Medical
Total area and performances of direct-sale stores
Average performance
of stores
Levels of areas Number of stores Total area Revenue (10,000 yuan) Same period last year
Year-on-year
increase/decrease
300m2 or less 150 33,729.59 47,252.71 40,900.38 15.53%
300-500m2 94 34,454.11 39,980.40 35,413.13 12.90%
500-800m2 36 21,392.89 21,105.56 18,577.52 13.61%
800m2 or more 11 8,750.48 7,332.41 6,594.88 11.18%
Total 291 98,327.07 115,671.09 01,485.92 13.98%
Note: The above stores are Purcotton’s stores opened for more than 12 months as of Sunday, December 31, 2023. This figure
includes stores that were downsized during the current year. After adjusting for the efficiency of direct stores (ping efficiency),
the same-store year-on-year growth rate was 15.5%. It’s important to note that the operating income of offline stores does not
include revenue from offline stores that transitioned to online sales through mini-programs.
Top 5 Stores in terms of Operating Revenues
Average performance of the
S/N Name of stores Opening date Operating income (yuan)
store
1 First October 25, 2017 14,270,991.38 35,298.02
2 Second August 6, 2012 12,723,977.12 21,758.20
3 Third May 15, 2010 12,571,671.70 19,326.17
4 Fourth September 19, 2014 11,473,019.50 15,256.67
5 Fifth November 11, 2017 11,158,182.93 10,061.48
Total 62,197,842.62 17,767.82
42
New stores of listed companies
√ Yes □ No
Property
Address Opening Contract area Investment amount Busine Business Number
Name of stores Product category ownership
of stores time (m2) (yuan) ss type model of stores
status
Direct-sale stores of North Healthy Direct-sale Purcotton
2023 1,148.50 9,058,522.70 Retail 7
Purcotton China consumer goods stores leasing
Direct-sale stores of East Healthy Direct-sale Purcotton
2023 2,114.00 13,286,007.24 Retail 10
Purcotton China consumer goods stores leasing
Direct-sale stores of South Healthy Direct-sale Purcotton
2023 2,012.77 12,302,631.39 Retail 10
Purcotton China consumer goods stores leasing
Direct-sale stores of West Healthy Direct-sale Purcotton
2023 1,565.59 10,898,149.36 Retail 7
Purcotton China consumer goods stores leasing
Direct-sale stores of Central Healthy Direct-sale Purcotton
2023 1818.78 11,038,628.87 Retail 7
Purcotton China consumer goods stores leasing
Direct-sale stores of Northeast Healthy Direct-sale Purcotton
2023 250.00 1,750,056.20 Retail 1
Purcotton China consumer goods stores leasing
South Healthy Franchisee Purcotton
Purcotton franchises 2023 1297.66 3,420,387.79 Retail 6
China consumer goods s franchisees
West Healthy Franchisee Purcotton
Purcotton franchises 2023 3196.64 8,061,534.58 Retail 16
China consumer goods s franchisees
Central Healthy Franchisee Purcotton
Purcotton franchises 2023 1710.82 3,928,841.99 Retail 8
China consumer goods s franchisees
East Healthy Franchisee Purcotton
Purcotton franchises 2023 1601.11 3,495,491.81 Retail 7
China consumer goods s franchisees
North Healthy Franchisee Purcotton
Purcotton franchises 2023 937.13 2,328,504.45 Retail 5
China consumer goods s franchisees
Total 17,653.00 79,568,756.37 84
Note: Investment amount includes: stores’ inventory balance, renovation costs, renovation deposit, 6-month lease and personnel
costs at the end of the reporting period.
Does the Company disclose the information on Top 5 franchises
√ Yes □ No
43
Winner Medical
Top five franchised stores
For more details, please see “Section III Management Discussion and Analysis - 4. Other Information Required by Industry
Disclosure Guidelines - (3) Franchising and Distribution” below.
(3) Whether the Company’s physical sales revenue is greater than the labor service revenue
√ Yes □ No
Year-on-year
Classification of sectors Item Unit 2023 2022
increase/decrease
Sales volume ton 7,044.14 7,173.86 -1.81%
Medical consumables - gauze Output ton 6,983.00 6,957.17 0.37%
Inventory ton 718.10 779.24 -7.85%
Sales volume ‘0,000 pieces 223,322.00 596,641.63 -62.57%
Medical consumables - masks Output ‘0,000 pieces 183,736.00 606,491.33 -69.71%
Inventory ‘0,000 pieces 30,555.19 70,141.19 -56.44%
Sales volume ‘0,000 kits 4,049.36 3,393.69 19.30%
Medical consumables - medical
Output ‘0,000 kits 4,126.75 3,452.04 19.50%
combo kits
Inventory ‘0,000 kits 424.12 346.73 22.30%
Sales volume ‘0,000 kits 18,058.51 17,751.6 1.70%
Healthy consumer goods - cotton
Output ‘0,000 kits 18,537.53 16,558.21 11.95%
tissues
Inventory ‘0,000 kits 2,733.00 2,253.98 21.25%
Sales volume ‘0,000 pieces 74,976.64 69,709.59 7.56%
Healthy consumer goods -
Output ‘0,000 pieces 76,266.63 71,338.37 6.91%
sanitary napkins
Inventory ‘0,000 pieces 20,545.53 19,255.54 6.70%
Reasons for a YoY change of 30% or above in relevant data
√Applicable □ Not applicable
The market demand for masks sharply declined due to recent public health events, resulting in a significant drop in mask
production, sales, and inventory.
(4) Performance of significant sales contracts and significant procurement contracts entered into by the Company up to
the current reporting period
□ Applicable √ Not applicable
44
(5) Composition of operating costs
Classification of sectors and products
Unit: yuan
2023 2022 Year-on-year
Classification of
Item Proportion in Proportion in increase/decr
sectors Amount Amount
operating costs operating costs ease
Direct
Medical consumables 1,554,038,332.02 67.55% 2,998,344,558.83 74.46% -48.17%
material cost
Direct labor
Medical consumables 373,090,284.06 16.22% 566,440,550.52 14.07% -34.13%
cost
Manufacturin
Medical consumables 373,291,314.55 16.23% 461,886,870.12 11.47% -19.18%
g cost
Subtotal of medical
2,300,419,930.63 100.00% 4,026,671,979.47 100.00% -42.87%
consumables
Healthy consumer Direct
1,397,052,162.76 75.96% 1,420,245,134.45 75.41% -1.63%
goods material cost
Healthy consumer Direct labor
186,270,904.11 10.13% 189,156,042.76 10.04% -1.53%
goods cost
Healthy consumer Manufacturin
255,759,657.81 13.91% 274,073,422.55 14.55% -6.68%
goods g cost
Subtotal of healthy
living consumer 1,839,082,724.68 100.00% 1,883,474,599.76 100.00% -2.36%
products
Other businesses 35,094,632.43 0.84% 62,654,238.06 1.05% -43.99%
Total 4,174,597,287.74 100.00% 5,972,800,817.29 100.00% -30.11%
Unit: yuan
2023 2022 Year-on-yea
Proportion in Proportion r
Classification of products Item
Amount operating Amount in operating increase/dec
costs Cost rease
Traditional wound care and
Medical consumables 756,271,542.20 18.12% 721,435,653.90 12.08% 4.83%
wound dressing products
Advanced wound dressing
Medical consumables 267,838,902.18 6.42% 214,388,590.22 3.59% 24.93%
products
Medical consumables Operating room consumables 305,768,350.25 7.32% 324,986,710.26 5.44% -5.91%
Medical consumables Infection protection products 504,221,134.36 12.08% 2,441,987,072.10 40.89% -79.35%
Health & personal care
Medical consumables 181,923,331.62 4.36% 191,426,828.33 3.20% -4.96%
products
Medical consumables Other products 284,396,670.02 6.81% 132,447,124.66 2.22% 114.72%
Subtotal of medical
2,300,419,930.63 55.11% 4,026,671,979.47 67.42% -42.87%
consumables
Healthy consumer goods Wet and dry cotton tissues 560,892,390.86 13.44% 585,437,456.89 9.80% -4.19%
Healthy consumer goods Sanitary napkins 199,809,154.77 4.79% 208,924,450.61 3.50% -4.36%
Healthy consumer goods Other non-woven products 230,564,498.16 5.52% 238,661,531.94 4.00% -3.39%
Healthy consumer goods Baby clothing and supplies 361,286,447.91 8.65% 399,427,311.55 6.69% -9.55%
Healthy consumer goods Adult apparel 308,237,685.37 7.38% 283,748,829.92 4.75% 8.63%
45
Winner Medical
2023 2022
Year-on-year
Classification of products Item Proportion Proportion increase/decr
Amount in operating Amount in operating ease
Cost costs
Healthy consumer goods Other woven products 178,292,547.61 4.27% 167,275,018.85 2.80% 6.59%
Subtotal of healthy living
1,839,082,724.68 44.05% 1,883,474,599.76 31.53% -2.36%
consumer products
Other businesses 35,094,632.43 0.84% 62,654,238.06 1.05% -43.99%
Total 4,174,597,287.74 100.00% 5,972,800,817.29 100.00% -30.11%
In 2023, the Company restructured the PureH2B business, merging its health personal care division into the medical segment for
streamlined management. Consequently, the data for FY2022 was adjusted accordingly. Specifically, a portion of PureH2B’s
business, initially categorized under the Consumer Products Segment, was shifted from Healthy Life Consumer Products-Other
Nonwovens to the Health Personal Care Products category within the Medical Segment. This adjustment amounted to a cost
adjustment of 30,538,838.48 yuan.
(6) Whether the consolidation scope changes in the reporting period
√ Yes □ No
For details, see Section X. Financial Report “Note 10. Interests in other entities”.
(7) Major changes or adjustments of business, products or services of the Company during the reporting period
□ Applicable √ Not applicable
(8) Major customers and major suppliers
The Company’s major customers
Total sales amount of the Top 5 customers (Rmb) 1,197,940,332.64
The proportion of Top 5 customers’ combined sales amount in total annual sales 14.64%
The proportion of related party sales in the total annual sales of the Top 5 customers 0.00%
Information on the Company’s Top 5 customers
S/N Name of customer Sales (Rmb) Proportion in total annual sales
1 First 574,835,439.21 7.02%
2 Second 230,352,491.53 2.81%
3 Amazon 146,990,248.64 1.80%
4 Hengan Group 123,024,162.99 1.50%
5 MO Group 122,747,568.23 1.50%
Total -- 1,197,949,910.60 14.64%
46
Other description of major customers
□ Applicable √ Not applicable
The Company’s major suppliers
Total sales amount of the Top 5 customers (Rmb) 1,197,940,332.64
The proportion of Top 5 customers’ combined sales amount in total annual sales 14.64%
The proportion of related party sales in the total annual sales of the Top 5 customers 0.00%
Information on the Company’s Top 5 suppliers
Proportion in total annual
S/N Name of supplier Purchase amount (RMB)
purchases
1 First 342,533,460.41 10.69%
2 Second 129,263,350.56 4.03%
3 Third 83,927,253.35 2.62%
4 Zhongshan Fendiya Underwear Co., Ltd. 78,123,798.02 2.44%
5 Yichang Diyuan Medical Materials Co., Ltd. 56,888,432.38 1.78%
Total -- 690,736,294.72 21.56%
Other descriptions of major supplier
□ Applicable √ Not applicable
3. Cost
Unit: yuan
Year-on-year Description of significant
2023 2022
increase/decrease changes
Selling expenses 2,090,492,506.10 2,050,176,407.46 1.97% No major changes
Administrative
693,647,621.42 633,614,634.95 9.47% No major changes
expenses
Primarily attributed to reduced
Financial expenses -61,858,959.93 -122,574,572.07 -49.53%
foreign exchange gains.
Mainly due to the decrease in
R&D expenses 322,051,868.43 487,583,652.11 -33.95%
R&D investment
The Company needs to comply with the disclosure requirements of the “Textile and Apparel Business” stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
47
Winner Medical
Composition of selling expenses:
Year-on-year
Selling expenses 2023 2022 increase/decre Description of significant changes
ase
Mainly attributed to Purcotton’s branding and
Advertising and promotion
651,816,390.71 600,156,113.14 8.61% marketing efforts
expenses
Promotion cost
Employee compensation 643,446,712.68 649,605,092.33 -0.95% No major changes
Sales commissions and expenses
261,088,807.68 240,516,336.22 8.55% Primarily e-commerce platform commissions
from the e-commerce platform
Depreciation of Right-of-use assets 196,694,977.33 188,658,565.69 4.26% No major changes
Lease and property management
118,909,705.83 152,186,000.56 -21.87% No major changes
expenses
The reduction in store renovation amortization
in the current period is mainly due to the
transfer and downsizing of Purcotton stores.
Depreciation and amortization 54,120,612.33 82,408,480.44 -34.33%
Additionally, there was an increase in
renovation losses due to store remodeling in
the same period last year.
Moreover, the lower base of travel expenses
in 2022, largely stemming from the impact of
Travel expenses 24,738,868.66 12,266,843.44 101.67%
the public health incident, returned to normal
levels in 2023.
Material consumption 23,880,919.78 29,027,854.76 -17.73% No major changes
Office communication costs 15,318,336.04 17,665,180.74 -13.29% No major changes
Water/electricity fee 12,448,568.50 12,817,521.54 -2.88% No major changes
Primarily due to the increase in export credit
Insurance premiums 7,355,088.51 5,076,079.44 44.90%
insurance
Mainly attributed to the rise in service fees,
Service fees 17,439,391.54 7,485,101.27 132.99%
including consultancy fees
Others 63,234,126.51 52,307,237.89 20.89% No major changes
Total 2,090,492,506.10 2,050,176,407.46 1.97% No major changes
4. Other information required by industry disclosure guidelines
The Company needs to comply with the disclosure requirements of the “Textile and Apparel Business” stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
48
(1) Production capacity
The Company’s own production capacity
Current reporting period Same period last year
More than 10% YoY change in production capacity utilization rate
√ Yes □ No
2023 2022 Percentage
of change in
Business Product Production Production production
Unit Production capability Production capability Change reason description
category category Output Output capacity
capacity utilization capacity utilization utilization
rate rate rate
Gauze ton 10,396 6,983 67.17% 10,396 7,056 67.87% -0.70% No major changes
The mask market saw a decline in
demand due to public health events,
‘0,000 prompting the Company to swiftly
Mask 365,313 183,736 50.30% 726,710 590,693 81.28% -30.98%
pieces adjust production supply. This
adjustment resulted in decreased
capacity utilization rates.
Medical
consumables Conversely, there was a surge in
Medical ‘0,000 demand for sales of combination
4,550 4,127 90.70% 4,550 3,452 75.87% 14.83%
combo kits kits packs, leading to increased output
and higher capacity utilization.
Pure cotton
spunlace
ton 54,330 29,000 53.38% 54,330 29,922 55.08% -1.70% No major changes
non-woven
fabric
Cotton ‘0,000
Healthy 37,641 18,538 49.25% 34,795 16,558 47.59% 1.66% No major changes
tissues kits
consumer
goods Sanitary ‘0,000
63,738 53,012 83.17% 50,078 44,858 89.57% -6.40% No major changes
napkins pieces
Note: The capacity and production in this table are based on the statistics of self-produced capacity and output, while the output in
the Sales-output Ratio Table includes self-produced and purchased outputs, where the output of menstrual pads under “healthy
living consumer product” is lower than that in the Sales-output Ratio Table, which is mainly due to the outsourced processing of
some models of menstrual pads. Additionally, the output of 100% cotton spunlace nonwoven fabrics is the total output, including
the output for direct external sales and that for self-consumption.
Is there overseas production capacity?
□Yes √ No
49
Winner Medical
(2) Sales model and channels
Sales channels and actual operation of products
The Company’s healthy consumer goods are involved in the textile and apparel industries. The sales channels for healthy
consumer goods include online sales, offline stores, supermarkets, key accounts.
Unit: yuan
Gross Year-on-year Year-on-year Year-on-year
Sales channels Revenue Operating costs profit increase/decrease of increase/decrease of increase/decrease of
margin operating income (%) operating cost (%) gross margin ratio
Online sales 2,582,593,865.54 1,223,659,985.13 52.62% 1.19% -7.11% 4.23%
Offline stores 1,364,371,807.21 487,857,068.69 64.24% 18.67% 10.42% 2.67%
Supermarket
241,650,661.47 91,561,909.56 62.11% 5.21% 4.67% 0.34%
channels
Key Client 73,962,102.39 36,003,761.30 51.32% 0.12% -3.65% 1.90%
Reason for the change: In 2023, the Company underwent organizational restructuring, splitting the PureH2B business and
merging its health personal care division into the medical segment. Consequently, the data for 2022 was adjusted to reallocate
online sales and offline store revenues from PureH2B’s consumer goods segment to the medical segment. This resulted in a
revenue adjustment of 47,415,228.79 yuan and a cost adjustment of 30,538,838.48 yuan.
(3) Franchising and distribution
The proportion of franchisees and distributors’ sales revenues exceeds 30%
□Yes √ No
Top 5 franchisees
S/N Name of franchisee Time of cooperation A related party or not Total sales (yuan) Level of franchisee
1 First November 9, 2020 No 5,557,369.21 Primary
2 Second May 1, 2020 No 4,759,814.67 Primary
3 Third December 28, 2022 No 4,389,501.83 Primary
4 Fourth June 26, 2021 No 3,792,428.13 Primary
5 Fifth June 10, 2021 No 3,571,729.92 Primary
Total -- -- -- 22,070,843.76 --
50
(4) Online sales
The proportion of online sales in sales revenues exceeds more than 30%
√ Yes □ No
Is there a self-built sales platform?
√ Yes □ No
Operation starting time January 6, 2014
Number of registered users 14,027,034
Average number of monthly active users 1,648,165
Does it work with a third-party sales platform?
√ Yes □ No
Unit: yuan
Name of platform Transaction amount during the reporting period Return rate
Taobao (healthy consumer goods) 1,292,094,692.54 2.24%
Opening or closing online sales channels by the Company
□ Applicable √ Not applicable
Description of the impact on the current and future development of the Company
(5) Agency operation
Does it adopt agency operation?
□Yes √ No
51
Winner Medical
(6) Inventory
Inventory
Inventory turnover Inventory YoY increase/decrease in
Main products Inventory amount Reasons
in days aging inventory balance
Mainly due to decreased demand for
Raw materials
infection protection products
and goods
243,950,021.65 -143,892,457.63 following the public health incident,
processed by the
resulting in reduced material
commission
preparation
Work in process 166,527,201.33 2,984,188.61
Merchandise
982,467,601.73 52,193,314.38
inventory
Semi-finished
Resulting mainly from decrease in
products shipped 24,716,158.02 -36,673,954.10
shipments
in transit
Low priced and
easily worn 16,665,305.23 791,623.33
articles
Mainly attributed to a decrease in
inventories of infection protection
Total 154 1,434,326,287.96 -124,597,285.41 products and a decline in
inventories of Purcotton textile
products
Provision accrual for inventory depreciation
Amount increased in current period Amount decreased in current period
Closing balance of Current
Class Reversal or Other - Exchange Closing Balance
the previous year consolidated Accrual Others
write-back rate movement
increase
Raw materials and goods
processed by the 54,831,465.50 16,801,848.94 58,042,549.52 13,590,764.92
commission
Work in process 9,184,849.77 26,909,385.39 36,094,235.16
Merchandise inventory 258,680,380.74 1,084,931.09 266,138,204.39 320,646,375.36 -2,814.07 205,259,954.93
Semi-finished products
130,228.78 130,228.78
shipped in transit
Low priced and easily
1,591,988.35 1,352,093.22 1,345,090.99 1,598,990.58
worn articles
Total 324,418,913.14 1,084,931.09 311,201,531.94 380,164,244.65 -2,814.07 256,543,945.59
Inventory information of end channels such as franchises or distributors
The Purcotton had 74 franchisees stores. Its business model requires franchisees to be responsible for store construction and daily
operation while Purcotton provides goods and supply chain supports. After the sales of stores, Purcotton and the franchisees
obtain their respective profits through sharing; the franchise store inventory ownership belongs to Purcotton. As of Sunday,
December 31, 2023, there was an inventory balance of 39.85 million yuan, with average 540,000 yuan in each store.
52
(7) Brand building
Whether the company is involved in the production and sales of branded clothing, apparel and home textile products
√ Yes □ No
Private brand
Main
Brand Trademark Main market
product Features Target customers Main product price bands Level of cities
name name territory
types
Made of 100%
high-quality natural cotton Second- and
Cotton without fluorescent All-age customer third-tier
Purcotton Purcotton 5-30 yuan/pack (100 pieces) Nationwide
tissues whitening agent; mild and base cities and
non-irritating; meeting the above
daily needs of consumers
100% cotton surface layer Second- and
Nice Sanitary (surface layer, spacer, Female population third-tier
Purcotton 1.5-4.99 yuan/piece Nationwide
Princess napkins sanitary wing surface at appropriate ages cities and
layer) above
100% cotton surface layer;
unique in the market; Second- and
Cotton made from natural cotton; third-tier
Purcotton BBNice Parental population 2.45-5.45 yuan/piece Nationwide
diapers 2mm ultra-thin core with cities and
28 times ultra-high above
absorption capacity
100% cotton material; soft Second- and
and non-slippery; gentle All-age customer third-tier
Purcotton Purcotton Wet tissues 20-40 yuan/pack Nationwide
and base cities and
non-irritating above
100% cotton material
Second- and
Baby without fluorescent nor Expecting mothers,
third-tier
Purcotton Purcotton products/cl formaldehyde; the unique newborns, babies, 100-500 yuan /piece Nationwide
cities and
othing gauze fabric to provide toddlers
above
more comfortable care
100% cotton material;
Adult apparel: Outwear: 150-800 yuan/piece;
high-quality cotton
Adult adult men and leisure wear: 200-800 Second- and
without fluorescent nor
apparel / women of all ages; yuan/piece; thermal underwear: third-tier
Purcotton Purcotton formaldehyde; soft to the Nationwide
intimate intimate apparel: 200-600 yuan/piece; underwear: cities and
touch; the unique gauze
apparel customers of all 58-108 yuan/pair (pack); socks: above
fabrics to provide more
ages 20-40 yuan/pair
comfortable care
100% cotton material;
Children bedding: 268-500
high-quality cotton
Expecting mothers, yuan/set; toddler bedding: Second- and
without fluorescent nor
Bedding, newborns, babies, 198-1098 yuan/set; third-tier
Purcotton Purcotton formaldehyde; soft to the Nationwide
toiletries toddlers and adult Adult bedding: 268-3198 yuan cities and
touch; the unique gauze
customer base /set; toiletries: 38-398 yuan above
fabrics to provide more
/piece
comfortable care
53
Winner Medical
Partner brands
Brand and
Main Main Main Level
Trademark Featur Target trademark Partner Cooperatio Cooperation
Brand name product product market of
name es customers rights name n mode period
types price bands territory cities
ownership
Licensed brand
Main
Main Target Main Exclusive
Trademark product Level of License
Brand name product Features customer market Licensor license or
name price cities period
types s territory not
bands
Party A: Koni
The product is
Culture
made from Infants
Purcotton, Second- (Beijing) Co.,
Baby 100% cotton and
Purcotton, China 198-458 and Ltd.
clothing material and young Nationwid 2021.9.15-20
China Aerospace yuan third-tier Party B: No
and designed with children e 23.10.14
Aerospace modeling /piece cities and Hangzhou
supplies China customer
figures above Qianxi Culture
Aerospace group
Communication
image
Co., Ltd.
The product is
Cotton
made from Second- Shanghai
Purcotton, tissues,
100% cotton All-age 21.8-298 and Character
Purcotton, Ultraman wet Nationwid 2021.9.1-202
material and customer yuan third-tier License No
Ultraman modeling tissues, e 4.1.31
designed with base /piece cities and Administrative
characters bath
Ultraman above Co,. Ltd.
towels
cartoon image
Marketing and operation of each brand during the reporting period
Please refer to the “1. Overview” in “IV. Analysis of Main Business” of “Section Ⅲ Management Discussion and Analysis” for
details.
Cases involved in trademark ownership disputes
□ Applicable √ Not applicable
(8) Others
Whether the Company is engaged in apparel design-related business
√ Yes □ No
The number of fashion designers in the Company 41 The number of contracted fashion designers 0
The operation of the built designer platform PLM syetem, 3D design platform and digital color tool
54
Did the Company hold an order meeting?
□Yes √ No
5. R&D expenses
√Applicable □ Not applicable
Name of major R&D Project
Project purpose Objectives Expected impacts on the Company
projects progress
Full forming technology
Through research into fully molded
revolutionizes the traditional knitting
integrated weaving technology, it Adoption of new processes to
process, eliminating stitching and
Research and application streamlines the production process, develop innovative products,
other steps, achieving one-time
of fully molded shortens production cycles, minimizes enhance consumer experience, and
Launched forming knitting of the fabric, and
integrated weaving raw material wastage, achieves rapid bolster the competitive advantage
enhancing wearer comfort. Achieve
technology product iteration akin to 3D printing, of the Company’s offerings in the
a new breakthrough in cotton baby
and meets consumers’ demand for market
products and cotton underwear
high-tech comfort.
category.
Based on the principle of high-count
fine matching, we independently
This project begins with research on
innovate and research wind-soft
cotton blending, integrating spinning
cotton yarn to facilitate
technology, independent innovation, Enhance the added value of
Development and multi-category application
and development of wind-soft cotton products, increase the variety of
expanded application of transformation while ensuring
yarn. It then progresses to fulfill the Launched fall and winter products, and
high-count fine blending optimal quality. This ensures our
demand for fluffy, lightweight, and improve their market
“wind-soft cotton”. autumn and winter products are light,
warm cotton products, aiming to competitiveness.
soft, and warm, all while adhering to
provide a solution for thick and
the principles of comfortable,
lightweight cotton products.
healthy, and environmentally
friendly.
Through a differentiated three-layer
three-dimensional weaving process,
Enhancing the market for traditional utilizing varying structures and yarn
Substitute chemical fiber with
Research and product chemical fiber material air layer or thicknesses, we achieve the desired
cotton to enhance the quality of
development of sandwich fabric to address issues such effect: a tight outer layer, a hollow
fall and winter cotton products,
“Sandwich” hollow as stiffness, lack of breathability, Launched middle layer, and a fluffy inner layer.
leading the technological
warm feeling cotton sweat absorption, and susceptibility to This approach enhances fabric
advancement in the cotton
fabrics creasing, thereby enhancing the warmth and improves the wearing
products industry
wearer’s experience. experience, facilitating the
development of warm cotton
products for fall and winter seasons.
Develop a cotton woven sunscreen
Address the drawbacks of traditional jacket with a wrinkled texture. The
Use cotton to replace chemical
chemical fiber sunscreen apparel, product boasts UPF>50 and
Develop a crepe-feel fiber to improve the quality of
including poor moisture absorption Mass UVA<5%, with the cotton material
fresh cotton sunscreen outwear, leading the technological
and breathability, resulting in production being absorbent and breathable. Its
jacket upgrading and development of
discomfort from sweat buildup and wrinkled texture prevents sticking to
cotton products
skin irritation during wear. the skin, while its thin and elastic
nature ensures comfortable wear.
Publish a white paper on sleep
Research and
Establish a method to evaluate the quality to offer technical support for
development of a system
sleep comfort performance of gauze product design and development, and Address user pain points and
for evaluating human Closed
quilts through subjective sleep provide consumers with a scientific reinforce brand values
deep sleep comfort and
evaluation and EEG test analysis basis for purchasing suitable sleep
cotton gauze bedding
products.
Develop biodegradable agricultural
cultivation fabric materials to expand
Biodegradable Achieve degradation within 2-3 Expand the utilization scope of
the application range of cotton
agricultural cultivation Launched months while meeting material cotton spunlace nonwoven fabrics
spunlace materials, providing
fabric material strength requirements and boost sales
environmentally friendly options for
agricultural cultivation
55
Winner Medical
Name of major R&D Project
Project purpose Objectives Expected impacts on the Company
projects progress
Conduct research and Enhance the thickness and softness The products are more aligned with
Enhance the packaging height and
development on of the material while ensuring consumer demand, enhancing the
improve the comfort experience of Launched
ultra-soft and ultra-thick minimal linting, thereby improving product competitiveness of cotton
cotton soft towel products
cotton spunlace materials the comfort of cotton towel products soft towel products.
Develop unique mask products to
enhance market competitiveness
Developed cotton-lined surgical Ensure high protection while
Cotton-lined surgical and promote the Company’s
masks to enhance comfort and Launched improving the comfort of wearing
mask offerings towards green
eco-friendliness surgical masks
environmental protection and
resource conservation.
Ensure high protection while
Low-resistance industrial Improve the wearing comfort of Expand mask product categories
Launched improving the comfort of wearing
protective masks industrial protective masks to boost sales
surgical masks
Also, mastered the collagen raw
material extraction technology,
Mastered the collagen extraction and
Collagen dressing entered the research field of
Developed a biologically active Mass dressing molding process, and
products bioactive wound repair materials,
collagen dressing for wound care production obtained marketing authorization for
R&D expanded the high-end dressing
the product
product line, and established
technical barriers
Expand the biodegradable mask
product series to enhance the
Develop environmentally-friendly Ensure the high protective competitiveness of the mask
Biodegradable biodegradable masks to protect the Mass performance of masks while keeping category in the market and promote
three-dimensional masks earth and reduce environmental production the biodegradation rate of masks ≥ the development of the Company’s
pollution 95%; core products towards green
environmental protection and
resource conservation
Optimize the research
and development of Development of a hydrogel dressing Mass Obtained marketing authorization Expanded high-end dressing
antibacterial hydrogel product with antimicrobial properties production for the product product line and increased sales
dressing products
R&D personnel of the Company
2023 2022 Proportion of change
Number of R&D personnel (people) 1,259 1,588 -20.72%
Proportion of R&D personnel 9.67% 10.63% -0.96%
Educational background of R&D personnel
Bachelor 314 413 -23.97%
Master 93 102 -8.82%
Age composition of R&D personnel
Under 30 199 316 -37.03%
30 - 40 587 732 -19.81%
56
The amount of R&D investment and the proportion of operating income in the past three years
2023 2022 2021
R&D investment amount (yuan) 322,051,868.43 487,583,652.11 298,162,366.16
The proportion of R&D investment in operating income 3.93% 4.30% 3.71%
Capitalized amount of R&D expenditure (yuan) 0.00 0.00 0.00
The proportion of capitalized R&D expenditure in R&D
0.00% 0.00% 0.00%
investment
The proportion of capitalized R&D expenditure in current
0.00% 0.00% 0.00%
net prot
Reasons for and effects of significant changes in the composition of the Company’s R&D personnel
□ Applicable √ Not applicable
Reasons for significant changes in the proportion of total R&D investment in operating income compared to the previous year
□ Applicable √ Not applicable
Reasons for significant changes in capitalization rate of R&D investment and its reasonable explanation
□ Applicable √ Not applicable
The Company needs to comply with the disclosure requirements of the “Medical Device Business” in the No. 4 Guideline of
Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by Growth Enterprises.
Information on Medical Device Products
√Applicable □ Not applicable
For details, please refer to the Annex “Information on Medical Device Products” at the end of the annual report.
57
Winner Medical
6. Cash flow
Unit: yuan
Year-on-year
Item 2023 2022
increase/decrease
Subtotal of cash inflow from operating activities 9,103,514,793.19 12,542,790,330.22 -27.42%
Subtotal of cash outflow from operating activities 8,040,188,560.96 9,559,318,099.95 -15.89%
Net cash flow from operating activities 1,063,326,232.23 2,983,472,230.27 -64.36%
Subtotal of cash inflow from investment activities 6,589,667,664.51 8,238,580,617.85 -20.01%
Subtotal of cash outflow from investment activities 5,559,389,985.82 12,056,695,936.67 -53.89%
Net cash flow from investing activities 1,030,277,678.69 -3,818,115,318.82 126.98%
Subtotal of cash inflow from financial activities 2,303,457,500.00 2,276,661,290.38 1.18%
Subtotal of cash outflow from financial activities 4,088,884,914.09 1,159,153,982.55 252.75%
Net cash flow from financing activities -1,785,427,414.09 1,117,507,307.83 -259.77%
Net increase in cash and cash equivalents 306,518,824.28 282,209,696.13 8.61%
Explanation of the main influencing factors of significant changes on a year-on-year basis in relevant data
√Applicable □ Not applicable
1. The substantial year-on-year decline in net cash flows from operating activities was mainly driven by a significant decrease
in market demand for infection protection products.
2. The larger year-on-year decrease in the subtotal cash outflow from investment activities was mainly attributed to the
reduced purchase of wealth management products and higher cash disbursements for mergers and acquisitions in 2022.
3. Net cash flow from investment activities was positive in the current period compared to negative in the same period last
year. This was mainly because cash received from redemptions of wealth management products exceeded cash paid for purchases
of wealth management products in the current period, and cash paid for mergers and acquisitions was lower than in the same
period last year.
4. The larger subtotal increase in cash outflows from financing activities and the cash generated from financing activities were
mainly due to the increase in cash paid for debt repayment in the current period. Explanation of the reason for the significant
difference between the Company’s net cash flow generated from operating activities during the reporting period and the net profit
in the current year
√Applicable □ Not applicable
The main reasons for the substantial difference between the net cash flows from operating activities of 1,063 million yuan for the
year and the net profit of 629 million yuan for the year are detailed in “Section X Financial Report - Ⅶ Notes to Items in the
Consolidated Financial Statements 78. Supplementary Information to the Statement of Cash Flows”.
58
V. Non-main operations
√Applicable □ Not applicable
Unit: yuan
Proportion in total
Amount Formation reasons Is it sustainable
profits
It is mainly due to the gain on maturity of
Investment income from joint
Investment income 127,342,880.98 16.98% financial products and the recognition of
ventures Yes, others No
investment income from joint ventures.
It is mainly due to the changes in fair value
Prot/loss from changes in
46,678,103.27 6.23% of financial products (such as structured No
fair value
deposits).
Mainly due to provisions for inventory
Impairment of assets -393,761,240.50 -52.51% value decline, goodwill impairment, and No
fixed asset impairment
Mainly attributed to non-operating income
Non-operating income 16,618,496.48 2.22% from non-current assets, such as gains on No
asset retirement and compensation income
It is mainly due to the losses on the
Non-operating expenses 84,742,148.34 11.30% No
scrapping of non-current assets.
It is mainly due to the expected credit
Credit impairment Loss 4,725,509.30 0.63% losses on the accrual of accounts receivable No
and other receivables.
It is mainly due to the losses on disposal of
Gains from asset disposal 32,201,950.01 4.29% No
non-current assets.
It is mainly due to receiving government
Other incomes 101,105,274.61 13.48% No
subsidies related to operating activities.
59
Winner Medical
VI. Analysis of assets and liabilities
1. Major changes in asset composition
Unit: yuan
End of 2023 Early 2023
The The Increase/dec
Description of significant
proportion proportion rease in
Amount Amount changes
in total in total proportions
assets assets
Cash and cash
4,706,132,071.27 27.50% 4,526,877,578.90 24.80% 2.70% No major changes
equivalents
Accounts receivable 768,602,289.60 4.49% 932,642,061.04 5.11% -0.62% No major changes
Inventory 1,434,326,287.96 8.38% 1,558,923,573.37 8.54% -0.16% No major changes
Investment real estates 7,693,341.79 0.04% 8,747,014.25 0.05% -0.01% No major changes
Long-term equity
20,879,244.20 0.12% 21,747,635.99 0.12% 0.00% No major changes
investment
Fixed assets 2,749,018,750.62 16.06% 2,312,982,598.88 12.67% 3.39% No major changes
Construction in
984,571,329.05 5.75% 765,009,910.63 4.19% 1.56% No major changes
progress
Right-of-use assets 417,496,021.36 2.44% 472,356,125.64 2.59% -0.15% No major changes
Mainly attributed to the
restructuring of short-term and
Short-term loans 1,493,238,955.00 8.73% 2,295,218,930.85 12.57% -3.84%
long-term loans and loan
repayments during the period
It is mainly due to the increased
Contract liabilities 193,262,892.15 1.13% 566,819,254.08 3.11% -1.98% consideration received in
advance from customers.
It is mainly due to the increase
Long-term loans 170,000,000.00 0.99% 0.99%
in long-term bank borrowings
Lease liabilities 292,009,504.04 1.71% 326,459,697.90 1.79% -0.08% No major changes
Mainly due to the decrease in
Tradable financial
2,850,058,540.71 16.66% 4,378,789,960.23 23.99% -7.33% purchases of structured deposits
assets
and other financial products
Amounts receivable Mainly due to a decrease in the
29,348,618.44 0.17% 93,093,113.79 0.51% -0.34%
financing receipt of bankers’ acceptances
Mainly due to the decrease in
Advances to suppliers 122,281,742.75 0.71% 229,225,273.09 1.26% -0.55%
material purchases
Mainly attributed to the increase
Other current assets 378,853,652.64 2.21% 119,059,084.47 0.65% 1.56% in pledged large certificates of
deposit
Other non-current It is mainly due to the purchase
financial 70,000,000.00 0.41% 40,000,000.00 0.22% 0.19% of long-term
Assets financial assets
Mainly due to the increased use
Notes payable 315,902,844.15 1.85% 24,760,000.00 0.14% 1.71% of bankers’ acceptances for
settling payments for goods
Mainly due to a decrease in
Taxes payable 62,877,779.86 0.37% 322,255,874.61 1.77% -1.40% corporate income tax and
value-added tax
Mainly due to the decrease in
Other current advance receipts, corresponding
19,712,328.19 0.12% 59,604,591.85 0.33% -0.21%
liabilities to the decrease in sales tax
pending transfer
Mainly due to the capitalization
Capital stock 594,387,367.00 3.47% 426,492,308.00 2.34% 1.13% of capital surplus during the
period
60
High percentage of foreign assets
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√Applicable □ Not applicable
Unit: yuan
Accumula Impairm
Gain/loss from ted fair ent in
Purchase amount
changes in fair value accrual Sales amount during
Item Opening balance during the reporting Other changes Closing balance
value for the changes of the reporting period
period
period included current
in equity period
Financial assets
1. Tradable financial
assets (excluding
4,378,789,960.23 46,678,103.27 4,409,245,000.00 6,027,240,000.00 42,585,477.21 2,850,058,540.71
derivative financial
assets)
Financial assets subtotal 4,378,789,960.23 46,678,103.27 4,409,245,000.00 6,027,240,000.00 42,585,477.21 2,850,058,540.71
Total of the above 4,378,789,960.23 46,678,103.27 4,409,245,000.00 6,027,240,000.00 42,585,477.21 2,850,058,540.71
Financial liabilities 0.00 0.00
Other changes
The item “Others” mainly refers to the increase by business combination.
Whether there were any significant changes in the measurement attributes of the Company’s major assets during the reporting
period
□Yes √ No
3. Restricted rights to assets as of the end of the reporting period
For details, see “Section X. Financial Report - Ⅶ Notes to consolidated financial statements - 31. Assets with Restricted
Ownership or Use Rights”.
61
Winner Medical
VII. Analysis of investment
1. Overall situation
√Applicable □ Not applicable
Investment amount in the reporting period
Investment amount in the same period of the previous year (yuan) Change percentage
(yuan)
5,203,756,536.64 12,418,231,649.20 -58.10%
Note: The larger decrease in investments in the reporting period compared to the same period of the previous year was mainly due
to (1) a higher amount of financial product investments purchased in the previous year; and (2) a higher number of inputs for the
acquisition of merged companies in the previous year.
2. Significant equity investments acquired during the reporting period
□ Applicable √ Not applicable
3. Significant non-equity investments in progress during the reporting period
√Applicable □ Not applicable
Unit: yuan
Gains Reasons for
realized up not meeting
Investment Industries Cumulative actual
Investment amount to the the Date of Disclosure
Investment in fixed involved in investment amount Source of Project Estimated
Project name in the current reporting scheduled disclosure index (if
method assets or investment as of the end of the funds progress income
reporting period period, progress and (if any) any)
not projects reporting period
not projected
cumulatively earnings
High-end dressing
Medical
production line Independent Yes 30,057,916.26 145,788,435.58 Proceeds 67.23% 0.00 0.00 N/A
consumables
construction project
Healthy
Marketing network
Independent Yes consumer 313,168,743.39 621,494,696.40 Proceeds 100.56% 0.00 0.00 N/A
construction project
goods
Medical
consumables +
R&D Center
Independent Yes healthy 65,615,625.90 189,569,797.87 Proceeds 88.00% 0.00 0.00 N/A
construction project
consumer
goods
Medical
consumables +
Digital management
Independent Yes healthy 78,593,887.95 198,807,408.59 Proceeds 73.96% 0.00 0.00 N/A
system project
consumer
goods
Winner Industrial Park Medical
Independent Yes 193,532,132.51 435,061,389.73 Proceeds 103.59% 0.00 0.00 N/A
(Jiayu) Project consumables
Medical
Phase II Expansion consumables +
Project of Winner Independent Yes healthy 83,428,830.16 609,515,780.73 Proceeds 101.59% 0.00 0.00 N/A
Medical Wuhan consumer
goods
Total -- -- -- 764,397,136.17 2,200,237,508.90 -- -- 0.00 0.00 -- -- --
62
4. Investment in financial assets
(1) Securities investment
√Applicable □ Not applicable
Unit: yuan
Accumula
Accou
Gain/loss from ted fair Purchase Profit or loss
Initial nting Sales amount
Cate Beginning book changes in fair value amount during for the Ending book Accountin Source
Code Abbreviation investment measur during the
gory value value for the changes the reporting reporting value g account of funds
cost ement reporting period
period included period period
mode
in equity
Fair
Trust Tradable
1,340,000,000. value 1,351,258,920.4 1,114,809,273.9 Self-own
prod N/A N/A 3,550,353.51 400,000,000.00 640,000,000.00 22,663,804.95 financial
00 measur 6 7 ed funds
ucts assets
ement
Fair
Tradable Owned +
Othe 3,041,995,000. value 3,027,531,039.7 4,009,245,000.0 5,387,240,000.0 103,097,467.8 1,735,249,266.7
N/A N/A 43,127,749.76 financial raised
rs 00 measur 7 0 0 2 4
assets funds
ement
Shenzhen
Hongtu Yihao Other
Fair
Private Equity non-curre
Fund value Self-own
N/A Investment Fund 40,000,000.00 40,000,000.00 30,000,000.00 70,000,000.00 nt
s measur ed funds
Partnership financial
ement
(Limited assets
Partnership)
4,421,995,000. 4,418,789,960.2 4,439,245,000.0 6,027,240,000.0 125,761,272.7 2,920,058,540.7
Total -- 46,678,103.27 0.00 -- --
00 3 0 0 7 1
Note 1: Trust products primarily consist of risk-rated R2/R3 products and do not involve investments in stocks and real estate.
Note 2: Securities - Others: The amount derived from the change in book value at the beginning of the period, plus gains or losses
on changes in fair value during the period, plus the amount purchased during the period, minus the amount sold during the period,
was 42,585,477.21 yuan lower than the book value at the end of the period. This difference was mainly due to the inclusion of the
increase in the opening balance resulting from the business combination in 2023 in the book value at the end of the period.
(2) Derivatives investment
□ Applicable √ Not applicable
No derivative investment in the Company during the reporting period
5. The use of proceeds
√Applicable □ Not applicable
(1) The overall use of proceeds
√Applicable □ Not applicable
63
Winner Medical
Unit: 10,000 yuan
Proportion
Total
of total
Total Total amount accumulated
amount of Total Amount of
Total amount accumulated of proceeds amount of
proceeds amount of proceeds
Total of proceeds amount of for alteration proceeds for Usage and purposes of
for proceeds not that have
Proceeds amount Net amount used during proceeds purposes alteration proceeds not used
Year alteration used during been idle
Method of of proceeds the current used during during the purposes during the current
purposes the current for more
proceeds reporting the current current during the reporting period
during the reporting than two
period reporting reporting current
current period years
period period reporting
reporting
period
period
Of which: the balance
of cash management
was 780.00 million
2020 IPO 371,500 355,884.93 76,451.15 346,567.62 2,000 11,102.34 2.99% 24,806.64 yuan, and the balance 0
deposited in the
proceeds account was
203.6361 yuan.
Total -- 371,500 355,884.93 76,451.15 346,567.62 2,000 11,102.34 2.99% 24,806.64 -- 0
Description of the overall use of proceeds
The China Securities Regulatory Commission (CSRC) approved that, in its “CSRC License [2020] No. 1822” document, the Company made an initial public offering of 50 million
yuan ordinary shares (A shares) at an offer price of 74.30 yuan per share, and the total proceeds amounted to 3,715.0000 million yuan. After deducting issuance fees of 156.1507
million yuan (excluding tax), net proceeds totaled 3,558.8493 million yuan. The proceeds mentioned above were verified by BDO CHINA SHU LUN PAN CERTIFIED PUBLIC
ACCOUNTANTS LLP with a Capital Verification Report (Xin Kuai Shi Bao Zi [2020] No. ZI210584). In FY2023, the Company utilized proceeds of 764,511,500 yuan, with
764,397,000 yuan allocated to fundraising projects and114,400,000 yuan designated for supplementing working capital. As of the end of 2023, the Company had utilized a total of
3,465,676,200,000 yuan in proceeds. Of this amount, 2,200,237,500,000 yuan was utilized for fundraising projects, including 1,866,346,100,000 yuan invested cumulatively in
fundraising projects and 333,891,400,000 yuan used to pre-invest in fundraising projects by replacing self-financed funds. Additionally, 1,265,438,700,000 yuan was utilized to
permanently supplement liquidity.
(2) Committed proceeds projects
√Applicable □ Not applicable
Unit: 10,000 yuan
Whether Cumulative Investment Benefit Cumulativ
Whethe Whether
the project Total Investment investment progress as s e benefits
Adjusted r there is a
Committed investment has been investment amount in amount as of the end The project reaches realized realized as
total projecte significant
projects and investment changed in the current of the end of the the intended usable in the of the end
investment d change in
of over-raised proceeds (including committed reporting of the reporting status date current of the
(1) benefits project
partial proceeds period reporting period (3) = reportin reporting
are met feasibility
change) period (2) (2)/(1) g period period
Committed investment projects
High-end dressing
production line No 21,685.86 21,685.86 3,005.79 14,578.84 67.23% September 1, 2024 0 0 N/A No
construction project
Marketing network
Yes 70,456.87 61,804.04 31,316.87 62,149.47 100.56% September 1, 2024 0 0 N/A No
construction project
R&D Center
Yes 23,542.15 21,542.15 6,561.56 18,956.98 88.00% September 1, 2024 0 0 N/A No
construction project
Digital management
No 26,881.05 26,881.05 7,859.39 19,880.74 73.96% September 1, 2024 0 0 N/A No
system project
Bolster working capital No 9,102.34 0.21 9,102.34 0 0 N/A No
Subtotal of committed
-- 142,565.93 141,015.44 48,743.82 124,668.37 -- -- 0 0 -- --
investment projects
Investment of over-raised proceeds
64
Whether the Cumulative
Cumulative Investment Benefits Whether
project has Investment benefits
Total Adjusted investment progress as realized Whether there is a
Committed investment been amount in The project reaches realized as
investment in total amount as of of the end of in the projected significant
projects and investment changed the current the intended usable of the end
committed investment the end of the reporting current benefits change in
of over-raised proceeds (including reporting status date of the
proceeds (1) the reporting period (3) = reporting are met project
partial period reporting
period (2) (2)/(1) period feasibility
change) period
Winner Industrial
Yes 42,000 19,353.21 43,506.14 103.59% December 1, 2023 0 0 N/A No
Park (Jiayu) Project
Phase II Expansion
Project of Winner No 60,000 8,342.88 60,951.58 101.59% December 1, 2023 0 0 N/A No
Medical Wuhan
Bolster working capital
-- 117,441.53 11.23 117,441.53 -- -- -- -- --
(if any)
Subtotal of use of
-- 219,441.53 27,707.32 221,899.25 -- -- 0 0 -- --
over-raised proceeds
Total -- 142,565.93 360,456.97 76,451.14 346,567.62 -- -- 0 0 -- --
Description of and reasons for not meeting
the scheduled progress or projected
earnings by projects (including the reasons N/A
for selecting “Not applicable” for
“Whether projected benefits are met”)
Description of significant changes in
N/A
project feasibility
Applicable
On October 12, 2020, the 13th meeting of the Second Board of Directors and the seventh meeting of the Second Board of
Supervisors of the Company reviewed and approved the Proposal Regarding the Use of Some Over-raised Proceeds To Permanently
Supplement the Working Capital, and agreed that the Company could allocate 639 million yuan of the over-raised proceeds to
supplement the working capital permanently. The Fifth Extraordinary General Meeting of 2020 held on October 29, 2020, considered
and approved the proposal. As of November 2, 2020, 639.0000 million yuan of over-raised proceeds have been used to bolster
working capital.
On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors of
the Company reviewed and approved the Proposal Regarding the Use of Over-raised Proceeds for the Investment in Winner
Industrial Park (Jiayu) Project. The proposal was considered and passed by the Sixth Extraordinary General Meeting of 2020 held
on December 15, 2020 and became effective. The main body of the Proposal is as follows: The Company plans to allocate 400.0000
million yuan of the over-raised proceeds to the investment in the Winner Industrial Park (Jiayu) Project. The total investment in
Winner Industrial Park (Jiayu) Project is estimated at 900.0000 million yuan, and the implementing entity is Winner Medical (Jiayu)
Co., Ltd. The project is located in Hubei Jiayu Economic Development Zone, adjacent to the Park’s 2nd Road in the north, 3rd Road in
the south, Jiayu Avenue in the east, and Shijingpu Road in the west. The total land area is about 451 mu. The project relies on
independent research and development of patented technology achievements, and based on the existing advantages of the Company
in the industry, considers natural cotton as the main raw material to innovate and improve degreasing and spunlace technology. It
Amount, purpose and progress of use of adopts comprehensive use of high-pressure “water needle” and other high-efficiency production technologies, and plans to build
over-raised proceeds production projects in relation to spunlace, wash care, wet tissues, medical cotton/gauze/non-woven fabrics, hand sanitizer and other
products. As of Sunday, December 31, 2023, the total amount invested in the above project is 435.0614 million yuan.
On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors of
the Company reviewed and approved the Proposal Regarding the Use of Over-raised Proceeds for the Phase II Expansion Project of
Winner Medical Wuhan. The main body of the Proposal is as follows: The Company plans to allocate 600.0000 million yuan of the
over-raised proceeds to the investment in the Phase II Expansion Project of Winner Medical Wuhan. The total investment in Phase II
Expansion Project of Winner Medical Wuhan totals 1,500.0000 million yuan, and the implementing entity is Winner Medical
(Wuhan) Co., Ltd. The project includes non-woven coil center, sterilization processing center, domestic medical sales and marketing
center, intelligent distribution center of Hubei regional headquarters, regional headquarters in Central China and the second R&D
center of the Group, which are fully invested and independently operated by the Company. Thanks to the project construction, the
Company’s production capacity and market share will be increased, enabling it to become a global leader in overall technical level
and product quality scale. As of Sunday, December 31, 2023, the total amount invested in the above project is 609.5158 million
yuan.
The Company held the sixth meeting of the third session of the Board of Directors and the fifth meeting of the third session of the
Board of Supervisors on April 20, 2022 and reviewed and approved the Proposal Regarding the Use of Some Over-raised Proceeds
To Permanently Supplement the Working Capital, and agreed that the Company could allocate 494.19 million yuan of the over-raised
proceeds and the corresponding cash proceeds to permanently supplement the working capital (and subsequently, together with the
proceeds from finance products, the actually supplemented working capital was 535.4153 million yuan). The proposal was
considered and passed by the Annual General Meeting of 2021 held on May 13, 2022 and became effective.
65
Winner Medical
Applicable
Occurred in the previous year
On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors of
the Company reviewed and approved the Proposal Regarding Capital Increase in Wholly owned Subsidiaries with Some of the
Proceeds, Changes to Implementing Entity of the Fundraising Projects, and Addition of Implementation Sites of Some Fundraising
Change of location for the implementation Projects. The main body of the Proposal is as follows: To further improve the production, management efficiency and comprehensive
of the proceeds investment project utilization rate of resources, seize market development opportunities, and better promote the implementation of fundraising projects,
the Company plans to use some of the proceeds to increase the capital of the wholly-owned subsidiaries and change the implementing
entity of the fundraising projects, and add new implementation sites for the fundraising projects. Among them, the original
implementing entity of the “R&D Center Construction Project” was Winner Medical (Wuhan) Co., Ltd. According to the Company’s
development strategy and actual business needs, it plans to include Winner Medical Products Co., Ltd. as the implementing entity of
“R&D Center Construction Project”, a fundraising project. A new implementation site in Winner Industrial Park, No. 660 Bulong
Road, Longhua New District, Shenzhen is also included accordingly.
Applicable
Occurred in the previous year
The Company held the sixth meeting of the third session of the Board of Directors and the fifth meeting of the third session of the
Board of Supervisors on April 20, 2022, and reviewed and approved the Proposal on Adjusting the Implementation Mode, Extending
Adjustment of the implementation mode of the Construction Period and Permanently Bolstering the Working Capital of Some Fund Raising Projects, which became effective
the proceeds investment project
after the consideration of the 2021 Annual General Meeting of Shareholders held on May 13, 2022. The main contents of the proposal
were as follows: To quickly respond to market changes and improve the utilization efficiency of proceeds, the marketing network
building project increased the investment related to online marketing of Shenzhen Purcotton Technology Co., Ltd., a wholly-owned
subsidiary. Also, due to strategic adjustments, the marketing network building project terminated the investment related to network
building of Shenzhen PureH2B Technology Co., Ltd., a wholly-owned subsidiary.
Applicable
On February 26, 2021, the 18th meeting of the Second Board of Directors and the 12th meeting of the Second Board of Supervisors of
the Company reviewed and approved the Proposal on Opening bank Accounts and the Replacement of Self-financing Funds
Pre-invested in New Projects with Excess Funds Raised, respectively, and agreed that the Company could replace the self-raised funds
pre-invested in the fundraising project with 100.1742 million yuan of proceeds. It has been verified by the [2021] No.ZI10031 Special
Auditor’s Report on Proceeds Replacement of Winner Medical Products Co., Ltd. issued by BDO Certified Public Accountants
(Special General Partnership) on February 23, 2021. Among them: the actual investment amount of the Company’s self-raised funds
pre-invested in the proceeds investment project is 100.1742 million yuan, of which: 85.8942 million yuan was invested in the Wuhan
Phase II expansion project, and 14.28 million yuan was invested in Winner Industrial Park (Jiayu) Project. In February and March
2021, the Company transferred 14.28 million yuan and 85.8942 million yuan respectively from the special account for proceeds to
Pre-investment and replacement of the replace the self-raised funds that had been invested in advance in the proceeds project.
proceeds investment project On October 12, 2020, the 13th meeting of the Second Board of Directors and the seventh meeting of the Second Board of Supervisors
of the Company reviewed and approved the Proposal Regarding the Use of Proceeds to Replace Self-raised Funds Pre-invested in the
Fundraising Project, respectively, and agreed that the Company could replace the self-raised funds pre-invested in the fundraising
project with 233.7173 million yuan of proceeds. It has been verified by the [2020] No.ZI10635 Special Auditor’s Report on Proceeds
Replacement of Winner Medical Products Co., Ltd. issued by BDO Certified Public Accountants (Special General Partnership) on
October 12, 2020. Among them: the actual investment amount of the Company’s self-raised funds pre-invested in the proceeds
investment project is 233.7173 million yuan, of which: 26.5062 million yuan was invested in high-end dressing production line
construction project, 110.0794 million yuan was invested in marketing network construction project, 50.2174 million yuan was
invested in R&D center construction project, 46.9143 million yuan was invested in digital management system project. In October
and November 2020, the Company transferred 73.4204 million yuan and 160.2968 million yuan respectively from the special account
for proceeds to replacing the self-raised funds that had been invested in advance in the proceeds project.
Temporary replenishment of working
N/A
capital with idle proceeds
Amount of and reasons for the balance of
proceeds resulting from project N/A
implementation
Usage and purposes of proceeds not used As of Sunday, December 31, 2023, the balance of unused proceeds of the Company was 248.0664 million yuan, of which: the balance
during the current reporting period of cash management was 88.0000 million yuan and the balance of 160.0664 million yuan was deposited in the account for proceeds.
Problems or other circumstances in the use
and None
disclosure of proceeds
66
(3) Changes in proceeds projects
√Applicable □ Not applicable
Unit: 10,000 yuan
Actual
Actual Investment Benefits Whether there
Total amount cumulative
investment progress as of The project realized Whether is a significant
of proceeds to investment
Corresponding original amount in the the end of the reaches the in the projected change in the
Project after change be invested in amount as of the
committed projects current reporting intended usable current benefits feasibility of
the changed end of the
reporting period (3) = status date reportin are met the changed
project (1) reporting period
period (2)/(1) g period project
(2)
Marketing network Marketing network 2024
61,804.04 31,316.87 62,149.47 100.56% 0 N/A No
construction project construction project September 1st
R&D Center R&D Center 2024
21,542.15 6,561.56 18,956.98 88.00% 0 N/A No
construction project construction project September 1st
Winner Industrial Park Winner Industrial Park 2023
42,000 19,353.21 43,506.14 103.59% 0 N/A No
(Jiayu) Project (Jiayu) Project December 1st
Total -- 125,346.19 57,231.64 124,612.59 -- -- 0 -- --
The Company held the sixth meeting of the third session of the Board of Directors and the fifth meeting of the
third session of the Board of Supervisors on April 20, 2022, and reviewed and approved the Proposal on
Adjusting the Implementation Mode, Extending the Construction Period and Permanently Bolstering the
Working Capital of Some Fund Raising Projects, which became effective after the consideration of the 2021
Annual General Meeting of Shareholders held on May 13, 2022. The investment on the marketing network
building project of PureH2B was terminated. The remaining proceeds not used for the marketing network
building project amounted to approximately 89.6426 million yuan (including the income of financial
Reasons for change, decision-making procedures and information products), which will be used for permanently replenishing the working capital (the actual amount to be
disclosure replenished together with the proceeds of the financial products will be 91.0234 million yuan).
(Depending on specific project) (Announcement No.: 2022-021)
The Company held the twelfth meeting of the third session of the Board of Directors and the ninth meeting of
the third session of the Board of Supervisors on 5 May 2023, and reviewed and approved the Proposal on
Adjusting the Use of Proceeds, Extending the Construction Period of Some Fund Raising Projects, which
became effective after the consideration of the 2022 Annual General Meeting of Shareholders held on May
16, 2022. The proceeds from the research and development center construction project should be adjusted
among the implementation entities, part of the proceeds from the R&D Center Construction Project shall be
moved to the Winner Industrial Park (Jiayu) Project. (Announcement No.: 2023-018)
Information on and reasons for not meeting the scheduled progress The fund-raising capital investment project has not been completed and the benefits generated by the
or projected earnings (by specific project) fund-raising capital investment project cannot be calculated yet
Description of significant changes in the feasibility of the changed There has been no material change in the feasibility of the marketing network building project, the R&D
project center construction project and the Winner Industrial Park (Jiayu) Project
VIII. Sales of significant asset and equity
1. Information of significant assets for sale
□ Applicable √ Not applicable
The Company did not sell any significant assets during the reporting period.
67
Winner Medical
2. Information of significant equity for sale
□ Applicable √ Not applicable
IX. Analysis of major holding companies and joint stock companies
√Applicable □ Not applicable
Information on major subsidiaries and joint stock companies with an impact of 10% or more on the Company’s net profit
Unit: yuan
Company Company
Principal operation Registered capital Total assets Net assets Revenue Operating profit Net profit
name type
Mainly responsible
Winner
for the production
Medical Subsidiarie
of large rolls of 259,459,200.00 1,306,689,791.06 899,666,078.81 1,142,916,472.34 169,616,886.45 135,030,291.42
(Huanggang s
cotton and cotton
) Co., Ltd.
tissues
Acquisition and disposal of subsidiaries during the reporting period
√Applicable □ Not applicable
Method of acquisition and disposal of subsidiaries Impact on overall production operations and
Company name
during the reporting period performances
Winner (Jinzhou) Latex Products Co., Ltd. Acquisition No significant direct impacts
Shanghai Hongsong Medical Device Co., Ltd. Acquisition No significant direct impacts
Description of major holding companies and joint stock companies
N/A
X. Structured subjects controlled by the Company
□ Applicable √ Not applicable
68
XI. Prospects of the Company
(I) Strategic planning
As a leading healthcare enterprise, our core values steer our strategic trajectory. Since its inception 33 years ago, spanning four
global economic cycles, we have maintained robust vitality while upholding our founding vision: “Caring for health and life,
making a better world” and “changing the world with pure cotton”. We consistently adhere to three core principles: quality over
profit, brand over speed, and social responsibility above corporate value. Our commitment to the values of “hard work,
self-criticism, exploration and innovation, and sustainable development” ensures that the steady march of Winner Medical and
Purcotton remains firmly on course. As the world changes, our vision, core principles, and values stay constant. Our original goal
of creating value for consumers and society remains unchanged.
We stick to the strategic guideline of “leading products with operational excellence”. Moving forward, we’re dedicated to
embracing change, tackling challenges, and championing transformative practices and capacity building. We’ll ramp up digital
empowerment and drive digital upgrading towards “basic management processed, process management digitized, and digital
management intelligence”. We’ll boost the organization’s operational capability and talent density, sticking to the “four highs”
talent concept, forging robust business partnerships, leading high-quality development, and navigating the cycle.
1. Medical business
Over the next three years, the Company will maintain its strategic prowess, solidify its financial foundation, and steadily advance
to firmly establish itself as a one-stop expert in medical consumables solutions through both internal and external approaches to
meet market demand. We’ll enhance technology and R&D innovation focusing on materials, user needs, and scenarios, aiming to
drive breakthroughs in overseas business, domestic critical medical care, and everyday consumer medical care, with a primary
emphasis on strategic products.
Refining our commitment to operational excellence, we’ve outlined a clear mission and set of requirements: to establish
internationally renowned, fully automated, intelligent, unmanned, environmentally sustainable lighthouse factories and black-light
workshops within our manufacturing operations. This initiative aims to accelerate the integration and synergy of strategic
acquisitions within the Group while maintaining a steadfast focus on innovation, quality, and value.
2. Healthy consumer goods business
Over the past 15 years, Purcotton has dedicated itself to becoming the epitome of safety, happiness, and sustainability in the eyes
of consumers. In the future, following the strategic guideline of “leading products with operational excellence”, the Company will
adhere to the “four adherence”: adhering to corporate vision and values; adhering to non-woven over spun, cotton over synthetic
fiber; adhering to all-cotton all-categories; adhering to socialist core values. By maintaining strategic strength, the aim is to
achieve the world’s unique “Purcotton.”
Over the next three years, in product leadership: guided by the vision of Purcotton, we will prioritize materials, innovate, and
embrace change. We will remain committed to basic material research and development and cotton cultivation. Through
cotton/genetic modification and technological applications, we aim to unlock more possibilities for cotton. Relying on science and
technology to empower all-cotton products, our ultimate goal is to establish a significant advantage, leading the industry forward.
Clearly focus on five strategic products to establish an absolute advantage. Through innovative marketing strategies, deep market
penetration, and the gradual development of a “cotton for all categories” brand identity, we aim to solidify our position.
Simultaneously, we will concentrate on best-selling products, actively streamline operations, and further enhance overall
efficiency to achieve product leadership.
In terms of operational excellence, the Company has established an efficient operational mechanism comprising three key
elements. Starting with the product as the focal point, we refine our marketing and channel operations management models.
Moving forward, we will maintain our focus on product branding and storytelling, emphasizing the brand and product values of
Purcotton and Nice Princess. We will enhance our strategic product content production and marketing capabilities to enable
precision marketing. The channel prioritizes the growth opportunities of strategic products, delivers excellent customer service,
enhances overall operational awareness, further boosts the Company’s overall profitability, and achieves operational excellence.
69
Winner Medical
(II) FY2024 business plans
1. Medical consumables business
Amidst the ongoing “new healthcare reform” policy, the medical industry is undergoing significant changes and seeking new
ideas. Prioritizing essentials and eliminating unnecessary elements, the procurement of medical equipment bands is underway,
with domestic substitution accelerating. The demand ceiling for urban and rural primary healthcare and the sinking market
remains unmet. Meanwhile, the overseas market pattern and division of labor in the industrial value chain are being reshaped.
Additionally, meeting the public’s demand for more convenient and efficient medical services imposes higher development
requirements on enterprises. Meanwhile, the aging population, worsening chronic diseases, and increased health awareness among
the public have heightened market demand and iterative requirements for products and services in the consumer healthcare
business.
In 2024, the Company will prioritize four management themes: “Aggressiveness, Growth, Efficiency, and Talent”. We will focus
on strategic categories, deepen cultivation and iteration, and enhance integrated combat capabilities through refined operations in
overseas business, serious healthcare, and consumer healthcare. Additionally, we will boost operational excellence through the
upgrading of our digitalization strategy. With these efforts, we aim to confidently navigate changes in the global market, pursue
new growth opportunities, explore new paths, and stimulate new momentum. Our goal is to move forward steadily towards a
hundred years of development.
(1) Commodity strategy: Focus on strategic products, engage in deep iterative development, consistently innovate, accelerate
in-house research, and integrate industry, academia, and medical sectors for innovation. This includes technology, materials,
design, production, and other value chain integrations to enhance combat capability. These efforts aim to drive the upgrade of
core category competitiveness, establish an absolute leading position in strategic product market segments, and foster brand and
scene mindfulness to support the Company’s overall strategic development.
(2) Channel operation: Break through each track with three key strategies, continuously adjust the category structure, and
prioritize strategic categories and customers. Enhance operational thinking, strengthen the foundation, refine operations, and
improve execution efficiency. Prioritize customer-centricity and enhance integration and synergy.
(3) On the manufacturing side, we aim to precisely align and focus on strategic categories and strategic customers. We adopt a
proactive and innovative approach, embracing change with a zero mindset. By benchmarking against industry standards, we
continuously strive for cost reduction, efficiency enhancement, cost control, and supply assurance. This comprehensive effort
aims to upgrade our manufacturing capabilities, creating modernized, high-technology, high-efficiency, and high-quality
productivity. Simultaneously, we continue to accelerate the integration and coordination of M&A business within the group. We
strengthen post-investment management, empower and support investee companies, and drive progress and execution of new
business and projects to achieve maximum value.
2. Healthy consumer goods business
The external environment is changing, but the overall trend of consumers’ awareness of social and environmental protection and
the concept of sustainable living remains unchanged. In the trillion-dollar industry track, the relentless pursuit of quality lifestyles
by mid-to-high-end users has created new consumption opportunities. National brands are innovating and growing, marking an
era of economic strength and national self-confidence. Social awareness of environmental protection and the concept of
sustainable living is on the rise, with the “all-cotton” concept leading the trend of the new era. In 2024, guided by the strategic
principles of leading products with operational excellence, the Company prioritized “aggressiveness, growth, efficiency, and
talent” as the four major business themes. It formulated a series of business plans for merchandise, branding, marketing, channels,
supply chain, and more.
(1) Commodity strategy: Focus on five strategic categories to ensure leadership in market share and competitiveness, driving
penetration across the entire category scene.
(2) Brand strategy: Continuously strengthen the brand development of the Purcotton flagship brand while managing the Nice
Princess sub-brand. Maintain a dual-brand operation, ensuring seamless value transfer and consistency in product effectiveness.
(3) Marketing strategy: Integrate operations around the strategic category GTM (Go-To-Market), strengthen scientific
communication around product selling points, and employ social media for differentiated product seeding to achieve extensive
brand marketing penetration and ensure commercial success
70
(4) Channel strategy: Maintain operational excellence, focusing on platform/store traffic, customer orders, conversion metrics,
and solid foundational management. Strengthen user engagement among high-value users, enhance user communication
capabilities, reinforce brand strength, improve performance, and increase revenue.
(5) Supply chain strategy: Establish a comprehensive organizational and operational mechanism, enhancing the agility and
capability of omni-channel commodity operations. We will establish a quick-response mechanism, with a focus on strategic core
fabrics, strengthen procurement and supplier management capabilities, enhance collaboration with global first-class suppliers, and
streamline the entire chain from R&D to supply to delivery.
In 2024, opportunities and challenges coexist. Confronting risks and challenges in both domestic and international market
economies, competitors, and the natural environment, the Company remains committed to sustainable development and value
creation for customers and consumers. We widen the Company’s competitive advantage through operational excellence, achieve
market leadership through product innovation, and stride confidently toward our centennial milestone!
The above business plan does not constitute a commitment by the Company to investors. Investors are advised to invest rationally,
be aware of investment risks and understand the differences between business plans and commitments.
(III) Possible risks to the Company
1. Risk of changes in industry policies and standards
Medical device, which directly affects users’ life and health safety, has been a key supervised industry. In recent years, as China
further deepens the reform of the medical and health system, relevant government departments have introduced a series of
regulations and policies on industry standards, bidding, price formation mechanisms, circulation systems, etc., which have a wide
and profound impact on the development of the medical device industry. If the Company fails to adapt to profound changes in
industry policies in a timely manner, it may impact the Company’s operations.
2. Risk of raw material price fluctuations and countermeasures
The Company’s main raw materials are cotton as well as cotton yarn and cotton greige fabric for medical use made from cotton.
The prices of cotton are affected by multiple factors such as planting area, natural production, inventory cycle, agricultural price
policy of origin, consumer demand and even futures prices. In addition, the prices of imported cotton are also affected by other
factors such as international trade policies and exchange rate fluctuations. If the purchase price of raw materials such as cotton
continues to rise in the future, it will have a greater cost pressure on the Company’s production and operation. If the Company
fails to the adjustment of sales price with that of raw material price, it may have a negative impact on the stability of the
Company’s profitability.
To manage the risk of cotton price fluctuations, the Company employs a cotton procurement stocking mechanism. Typically, it
procures cotton at relatively low prices. When cotton prices increase to a certain level, the Company adjusts the sales price
accordingly and controls the sales price discount to mitigate the adverse impact on profitability. The Company will invest in
cotton derivative products at the appropriate time to mitigate the impact of cotton price fluctuations on its performance.
3. Exchange rate risks and countermeasures
Medical consumables are the main exports of the Company, which are settled in major international currencies such as US dollars.
In 2023, the Company’s foreign sales amount in the overall revenue accounted for 11%. Additionally, exchange rate fluctuations
will affect the cost of cotton purchased by the Company from abroad. In recent years, with the accelerated pace of China Yuan
internationalization and further marketization of the China Yuan exchange rate formation mechanism, the exchange rate
flexibility of China Yuan has increased. Fluctuations in the RMB exchange rate will, on the one hand, affect the Company’s
product export sales prices; on the other hand, it will also cause the Company to generate exchange gains and losses. Suppose
there is a significant appreciation of China Yuan in the future. In that case, it will affect the Company’s price competitiveness in
overseas markets, and cause exchange losses, which will adversely affect the Company’s operating income and profits.
71
Winner Medical
To reduce the impact of exchange rate fluctuations on the Company’s performance, (1) for long-term stable customers, the
Company has an agreed price adjustment mechanism, and in case of significant fluctuations in key elements affecting the price,
the price shall be adjusted generally according to the agreed price adjustment mechanism; and at the same time, the Company
adjusts the quotation cycle for new orders received, shortens the quotation cycle, and adjusts the quotation exchange rate in a
timely manner; Secondly, the Company conducts forward settlement and sale of foreign exchange business for hedging purposes
according to the market situation. It locks in the forward settlement exchange rate in advance to reduce the risk and hedge against
exchange rate fluctuations in international business. Thirdly, the Company will enhance research and analysis of exchange rates,
closely monitor changes in the international market environment, adjust business strategies as necessary, and minimize the risk of
exchange rate fluctuations.
4. Impairment risk of goodwill and countermeasures
To establish a comprehensive solution for medical consumables, since 2022, the Company acquired Longterm Medical, Winner
Medical (Hunan) and Winner Guilin to improve its industrial chain. As of December 31, 2023, the carrying value of goodwill
amounted to 860 billion yuan, representing 7.49% of the equity attributable to the owners of the parent company. The Company
will conduct impairment tests on goodwill at the end of each year and will make provisions for impairment based on the results of
these tests. Therefore, there is a risk of goodwill impairment, which could negatively impact net profit.
due to shifts in the medical consumables industry and market conditions, the two subsidiaries, Winner Medical (Hunan) and
Winner Guilin, acquired by the Company in 2022, experienced lower-than-expected performance during the reporting period.
Signs of goodwill impairment emerged, prompting the Company to engage Yinxin Appraisal Co., Ltd. for a goodwill assessment.
The assessment revealed a goodwill impairment of 160 million yuan for Winner Medical (Hunan) and 30 million yuan for Winner
Guilin, significantly impacting the income statement for the period. To deal with the risk of impairment of as goodwill, the
Company will make more efforts to strengthen its business management, improve its business performance and reduce the risk of
asset impairment.
5. Risk of not receiving reimbursement for the Medical Investment Project of Winner Medical (Heyuan) and
countermeasures
Due to the planning of the square of Heyuan High-speed Railway Station and the surrounding high-speed railway new town along
the Jiangxi-Shenzhen High-speed Railway, the Agreement on Investment and Construction of Medical Package and Cotton
Household Goods Production Project entered into by and between the Company and the People’s Government of Zijin County,
Heyuan City in May 2016 could not be fulfilled. In November 2019, the International Arbitration Court in Ganjiang New District
issued an Award confirming the termination of the Agreement on Investment and Construction of Medical Package and Cotton
Household Goods Production Project, and the People’s Government of the Zijin County shall compensate the Company for
economic losses of 550 million yuan, with 50% to be paid by the People’s Government of Zijin County by December 31, 2019
and 50% by February 29, 2020. As of the disclosure date of the report, the Company has received a land transfer deposit of 3
million yuan and a compensation payment of 330 million yuan returned by the People’s Government of Zijin County. There is a
risk that the remaining amount of 220 million yuan may not be received on time in accordance with the Award. The Company has
made a provision for bad debts of 110 million yuan in accordance with the accounting policy. The Company has applied to the
court for enforcement and has been accepted by the court. The Company is currently closely following up on the subsequent
payment plan of the People’s Government of Zijin County, Heyuan City.
6. Risks of proceeds projects and countermeasures
The Company plans to allocate the proceeds from this listing to the construction projects of advanced wound dressing production
lines, a marketing network, an R&D Center and a digital management system. Such projects’ development progress and operation
will contribute to the Company’s development and profitability in the next few years. In 2023, the “High-end dressing production
line construction project”, “Phase II Expansion Project of Winner Medical Wuhan” and “Winner Industrial Park (Jiayu) Project”
all reached their intended operational status. These projects were officially closed in January 2024, and the surplus funds were
used to bolster the Company’s working capital. Other projects are progressing as planned. As of December 31, 2023, the
remaining 250 million yuan had not been utilized.
Based on the future market forecast, the Company has conducted a prudential and sufficient feasibility study and demonstration of
the proceeds investment project. Thanks to the Company’s rich business experience and market foundation accumulated over the
years, it is expected that the proceeds investment project could realize good investment income. However, if there are changes in
external factors such as the industry market, it cannot rule out that some projects may not be implemented as scheduled or the
actual investment returns may be lower than expected. In accordance with changes in the external market and the internal control
and management system of proceeds projects, the Company will strictly control the progress of capital investment in various
projects and keep an eye on the risk of project investment.
72
7. Risks associated with the Urban Renewal Project of Winner Industrial Park
The Longhua District Government of Shenzhen approved a special plan for the urban renewal project of the Urban Renewal
Project of Winner Industrial Park in May 2023. The plan outlined a total area of 138,915 square meters, with 88,450 square
meters designated for residential use, 39,740 square meters for commercial, office, and hotel buildings, and 10,725 square meters
for public facilities (including underground structures). Following this approval, the Company finalized an agreement with its
partner, SINDA Group, in July 2023, regarding the relocation, compensation, and resettlement of the urban renewal unit within
the Urban Renewal Project of Winner Industrial Park. Subsequently, the Company carried out site clearance and other necessary
tasks as per the agreement. As of December 31, 2023, the Company had received a total of 250 million yuan in cash: A 50 million
yuan deposit was received in April 2017. In February 2020, 100 million yuan was received as prepaid relocation compensation.
Another 100 million yuan, the initial installment of monetary compensation according to the relocation compensation and
resettlement agreement, came in July 2023. Due to significant shifts in the real estate market, in January 2024, after friendly
negotiations, both SINDA Group and the Company agreed to temporarily halt the project’s construction. They signed the
Confirmation Letter on the Revocation of the “Relinquishment of Real Estate Rights Statement”, confirming the suspension of
construction advancement. The Company temporarily rescinded the Statement of Renunciation of Real Estate Rights entirely,
withdrawing all related statements, and similarly withdrew the Declaration of Waiver of Real Estate Rights under the Agreement,
nullifying its contents. Consequently, uncertainty looms over the project’s completion timeline. The Company commits to closely
monitoring real estate market dynamics, fostering communication with SINDA Group, and collaboratively reinstating project
implementation when the real estate market rebounds.
XII. Registration forms for receptions of surveys, communication, interviews and other activities during
the reporting period
√Applicable □ Not applicable
The Company prioritizes investor communication, valuing opportunities to engage with stakeholders. We actively address
inquiries and welcome suggestions from investors, striving to cultivate a positive capital market environment. During the
reporting period, the Company attracted over 600 institutional investors of diverse profiles.
Main contents of Basic
Types of
Time Location Method Objects discussions and information
objects
documents provided index of surveys
For details,
Telephone 119 investors, including China
Headquarter Institutio 2022 annual please refer to
January 17, 2023 communicati Southern Fund, Fullgoal Fund and
conference rooms ns performance forecast SZSE Interactive
on Invesco Great Wall Funds
Ease
For details,
Telephone 32 investors including Huatai Asset
Headquarter Institutio Business overview please refer to
February 18, 2023 communicati Management, Ping An Fund, and
conference rooms ns and operation SZSE Interactive
on Nomura Asset Management
Ease
For details,
Telephone 53 investors including Boshi Fund,
Headquarter Institutio Business overview please refer to
February 20, 2023 communicati China Merchants Fund, and CICC
conference rooms ns and operation SZSE Interactive
on Asset Management
Ease
For details,
87 investors and media including
please refer to
April 25, 2023 Panorama studio Others Others Southern Fund, Dacheng Fund, and FY2022 operation
SZSE Interactive
21st Century Business Herald
Ease
For details,
Telephone 80 investors, including GF Fund,
Headquarter Institutio Business overview please refer to
April 26, 2023 communicati ChinaAMC, WanJia Asset
conference rooms ns and operation SZSE Interactive
on Management
Ease
For details,
4 investors, including CCB Wealth
Headquarter Institutio Business overview please refer to
June 5, 2023 Field surveys Management, Danyi Investment,
conference rooms ns and operation SZSE Interactive
China Europe Fund
Ease
For details,
Telephone 104 investors, including China
Headquarter Institutio Business overview please refer to
July 14, 2023 communicati Southern Fund, Dacheng Fund and
conference rooms ns and operation SZSE Interactive
on Invesco Great Wall Funds
Ease
For details,
164 investors including Harvest
Headquarter Institutio 2023 Half-Year please refer to
August 16, 2023 Field surveys Fund, China Europe Fund, HSBC
conference rooms ns Operations SZSE Interactive
Jinxin
Ease
For details,
Telephone 110 investors including Guo
Headquarter Institutio Business overview please refer to
October 24, 2023 communicati TaiFund, HuaAn Fund, and Dajia
conference rooms ns and operation SZSE Interactive
on Asset Management
Ease
73
Winner Medical
XIII. Progress on the “Dual Enhancement of Quality and Returns” action plan
Has the Company disclosed its action plan for “Dual Enhancement of Quality and Returns”?
√ Yes □ No
The Company detailed its concept of “Dual Enhancement of Quality and Returns” by focusing on building high-quality core
business development, strengthening corporate governance, fulfilling social responsibility, providing high-quality information
disclosure, and emphasizing investor returns.
In terms of advancing high-quality core business development, the Company always upholds the vision of “caring for health and
life, making a better world”, with a mission to “pioneer the movement toward optimal health and fostering harmony between
humanity and the environment”. It adheres to the four corporate values of “hard work, self-criticism, exploration and innovation,
and sustainable development”. The Company operates under the strategic direction of “with leading products as the direction,
innovative R&D as the core, brand marketing as the driver, digital operation as the foundation, intelligent manufacturing as the
weapon, and high-quality, high-efficiency, high-performance and high-return talents as the guarantee, to build a new chapter of
high-quality development”. Winner Medical will stay active to seek opportunities for outward mergers and acquisitions so as to
make great strides towards the strategic goal of “leading in medical consumables and providing one-stop medical consumables
solutions”. In FY2023, the Company experienced robust growth in revenue from its core medical products, while Purcotton
expanded its offline store network. Moreover, the Company significantly increased its patent portfolio and actively contributed to
the development of national, industry, and group standards.
Regarding corporate governance and social responsibility, the Company continued to strengthen its governance structure, enhance
internal controls, and improve risk management practices. These initiatives facilitated informed decision-making and sustained
corporate development while safeguarding shareholders’ interests. The Company has been recognized with honors such as the
“Best Practices of Director’s Office” and “5A Level Performance Evaluation of Secretary of the Board of Directors” by the China
Listed Companies Association (CLCA) for two consecutive years. For three years running, the Company has voluntarily
published its Corporate Social Responsibility Report or Environmental, Social, and Governance Report, demonstrating its
impactful social responsibility practices. As a member of the United Nations Global Compact, the Company actively pursues
sustainable development strategies and has received the 2021 United Nations Global Compact Best Practice Cases for Chinese
Enterprises award. It has also been honored with the “Excellent Practice Cases of ESG for Listed Companies” by the China Listed
Companies Association for three consecutive years.
Regarding information disclosure, the Company not only meets statutory obligations in accordance with securities laws and
regulations but also proactively shares additional valuable information for investors. The Company has been featured as an
outstanding case in the Shenzhen Stock Exchange GEM Board’s annual report for two consecutive years. Furthermore, it has
consistently received an A rating in information disclosure assessments by the Shenzhen Stock Exchange since its listing in
FY2021 and FY2022.
In terms of investor returns, since its listing in September 2020 up to the date of this report’s disclosure, the Company has
executed cash dividends totaling 1.94 billion yuan (excluding the proposed cash dividends for FY2023) and share buybacks
amounting to 640 million yuan, summing up to 2.58 billion yuan, which represents 72.51% of the net proceeds raised during its
debut. Among these, 6,094,659 shares (equivalent to 1.03% of the Company’s total share capital before cancellation) were
repurchased in March 2024 for subsequent cancellation. Furthermore, the Company disclosed the Announcement on the Plans of
Certain Directors, Supervisors, and Senior Management of the Company to Increase Their Purchases of the Company’s Shares
on January 30, 2024. This announcement outlined intentions by Mr. Fang Xiuyuan, Director, Deputy General Manager, and Chief
Financial Officer, Ms. Xu Xiaodan, Director, Ms. Liu Hua, Supervisor, Ms. Chen Huixiang, Vice General Manager and Secretary
to the Board of Directors, Ms. Zhang Li, Deputy General Manager, and other Directors and Supervisors to increase their
purchases of the Company’s shares by a total amount ranging from 3.15 million yuan to 6.3 million yuan. As of the report’s
disclosure date, the aforementioned directors and supervisors had collectively increased their holdings by 96,800 shares and
3.1049 million yuan in total.
74
Section Ⅳ
Corporate Governance
75
Winner Medical
I. Basic state of corporate governance
The Company strictly complies with the Company Law of the People’s Republic of China, the Securities Law of the People’s
Republic of China, the Code of Corporate Governance for Listed Companies, the Shenzhen Stock Exchange GEM Listing Rules,
the Standardized Operation of Listed Companies in the No. 2 Guideline of Shenzhen Stock Exchange Self-Regulatory Guidelines
for Listed Companies, and other relevant laws and regulations promulgated by the CSRC and Shenzhen Stock Exchange, and
formulates the Articles of Association and other internal control rules and regulations to standardize the Company’s behavior. The
corporate governance structure conforms to relevant normative documents on listed corporate governance issued by China
Securities Regulatory Commission.
1. Shareholders and general meeting of shareholders
In strict accordance with the Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of
China, the Rules of Shareholders’ Meeting of Listed Companies, the Articles of Association and the Rules of Procedure of
Shareholders’ Meeting, the Company standardizes the procedures of convening, holding and voting, etc. of the general meeting of
shareholders, treats all investors equally, and enables them to fully exercise their rights to ensure the rights and interests of
minority shareholders. The Company employs lawyers to attend the general meeting of shareholders as nonvoting delegates and
issue legal opinions on the holding and voting procedures of the general meeting of shareholders, fully respecting and
safeguarding the legitimate rights and interests of all shareholders.
2. Company and controlling shareholders, actual controller
The Company has independent and complete main business and independent management ability, independent from the
controlling shareholders and actual controllers in personnel, assets, business, management organization and financial accounting
system, and can independently operate, independently manage and bear responsibilities and risks. The controlling shareholders
and actual controllers of the Company can exercise their rights and undertake corresponding obligations in accordance with the
law. During the reporting period, there was no behavior directly or indirectly interfering in the Company’s decision-making and
business activities and using its controlling position to infringe on the interests of other shareholders beyond the authorization of
the general meeting of shareholders and the board of directors, which had no adverse impact on the corporate governance
structure and independence. Based on its confidence in the long-term development trends of both domestic and foreign medical
and consumer industries, as well as its recognition of the value of Wenwen Medical and its strategic vision, Winner Group
voluntarily committed to extending the lock-up period for its shares of Wenwen Medical from September 16, 2023, to September
16, 2024.
3. Directors and board of directors
The directors of the Company do not have the circumstances that they are not allowed to be directors of the Company as
stipulated in Article 146 of the Company Law. Their appointment and removal strictly comply with the board of directors’
approval procedures and the shareholders’ general meeting, and there is no conflict with relevant laws, regulations or the Articles
of Association. All directors work strictly and diligently during their tenure, can continuously pay attention to the Company’s
operating conditions, actively participate in relevant training, and improve the standard operation level; actively participate in the
board meetings, give full play to their own professional expertise, make prudent decisions and safeguard the interests of the
Company and the majority of shareholders.
The convening and holding procedures of the board meeting of the Company meet the requirements of relevant regulations; the
contents of previous board meeting minutes are true, accurate, complete and under safe preservation; the resolutions of the
meetings are fully, accurately and timely disclosed. Under the Board of Directors is a Strategy and Social Responsibility
Committee, a Nomination Committee, a Remuneration and Assessment Committee and an Audit Committee.
4. Supervisors and board of supervisors
The supervisors of the Company do not have the circumstances that they are not allowed to be supervisors of the Company as
stipulated in Article 146 of the Company Law. Their qualifications meet the relevant requirements of the Articles of Association.
The procedures for convening, holding and voting of the board of supervisors’ meetings of the Company conform to the Rules of
Procedure of the Board of Supervisors. The Company’s supervisors can exercise the functions and powers of the board of
supervisors and fulfill their duties diligently.
76
5. Performance evaluation and incentive and restraint mechanisms
Through performance evaluation, the Company can effectively make a comprehensive evaluation on each employee, and further
understands each employee’s work ability and expertise, so as to effectively adjust the appropriate position and achieve the goal
of performance evaluation. The Company is gradually improving its performance evaluation mechanism. Senior and middle
management remuneration is linked to the Company’s operating performance indicators. The Company has established an
enterprise performance evaluation and incentive system. The performance evaluation standards and evaluation procedures of
directors, supervisors and senior managers are fair and transparent. Their income is linked to the Company’s operating
performance. The appointment of senior managers is open and transparent, complying with the provisions of laws and regulations.
6. Information disclosure and transparency
During the reporting period, the Company disclosed the Company’s information truthfully, accurately, completely, timely and
fairly in strict accordance with the requirements of relevant laws and regulations, Articles of Association and Management System
of Information Disclosure Affairs. The Company has designated China Securities Journal, Shanghai Securities News, Securities
Times and Securities Daily as the designated paper media for information disclosure of the Company, and CNINFO.com is the
website specified for the information disclosure to ensure that all shareholders have fair access to the Company’s information.
Since its listing in 2020, the Company has consistently earned the highest information disclosure rating of A from the Shenzhen
Stock Exchange for two consecutive years, in 2021 and 2022.
7. Investor relations management
Following the requirements of relevant laws and regulations and the Investor Relations Management System, the Company
designates the secretary of the board of directors as the person in charge of investor relations management, responsible for
coordinating investor relations, receiving shareholders’ visits, answering investors’ inquiries, providing investors with the
information disclosed by the Company, etc. The Company responds to investors’ inquiries through telephone, e-mail, investor
relations interactive platform, investor reception day and other forms, which strengthens information communication, promotes
benign interaction with investors, and effectively improves the transparency of the Company. Furthermore, the Company has been
recognized with honors such as the “Excellent Practice Cases of Annual Report Performance Briefing Meeting” by the China
Listed Companies Association for three consecutive years from 2021 to 2023. It also received the “Tianma Award for Investor
Relations of China Listed Companies” by the Securities Times in 2022, and the China Listed Company Investor Relations Award
in 2023 from the Public Company Association, highlighting its exceptional practices in investor relations management.
8. Stakeholders
The Company fully respects and safeguards the legitimate rights and interests of relevant stakeholders, realizes the coordination
and balance of interests of the shareholders, employees, doctors and patients, society and other parties, pays attention to
environmental protection and actively participates in public welfare undertakings while realizing the sustainable and healthy
development of the Company and the interests of shareholders.
9. Establishment and implementation of an internal audit system
An audit committee is set up under the board of directors to establish an internal audit system, and is responsible for the
communication, supervision, meeting organization and verification of the Company’s internal and external audit. The Internal
Audit Department under the audit committee is the daily office. Under the leadership of the audit committee, it independently
exercises its functions and powers to inspect and supervise the establishment and implementation of the Company’s internal
control system, the authenticity and integrity of the Company’s financial information, and the efficiency and effect of business
activities.
Whether there is a significant difference between the actual situation of corporate governance and the rules on listed corporate
governance prescribed by laws, administrative regulations and the China Securities Regulatory Commission
□Yes √No
There is no significant difference between the actual situation of corporate governance and the rules on listed corporate
governance prescribed by laws, administrative regulations and the China Securities Regulatory Commission
77
Winner Medical
II. Independence of the Company from its controlling shareholders and actual controllers in terms of
guaranteeing assets, personnel, finance, institutions and business
Since its establishment, the Company has standardized its operation in accordance with the Company Law of the People’s
Republic of China, the Securities Law of the People’s Republic of China and other relevant laws and regulations as well as the
requirements of the Articles of Association, established and improved the corporate governance structure, completely separated
from the existing shareholders in business, assets, personnel, organizations and finance, and has a complete business system and
the ability to operate independently in the market.
1. Asset independence
The Company has independent and total assets with clear ownership, a separate production system, auxiliary production system
and supporting facilities, and has legal right of plants, land, equipment, trademarks, patents, non-patented technology and other
assets related to production and operation. It has complete control over all the assets of the Company, and there is no behavior of
controlling shareholders and actual controllers occupying the assets of the Company.
2. Personnel independence
The Company has signed labor contracts with its employees, has independent labor, personnel, salary and welfare systems, and
maintains independence with its controlling shareholders, actual controllers and other enterprises under their control. The
Company has established a sound corporate governance structure, and the directors, supervisors and senior managers are legally
selected in strict accordance with the Company Law, Articles of Association and other relevant provisions. The general manager,
deputy general manager, financial chief, secretary of the board of directors and other senior managers of the Company do not hold
any other positions except directors, supervisors and limited partners in the controlling shareholders, actual controllers and other
enterprises controlled by them, and do not receive a salary in the controlling shareholders, actual controllers and other enterprises
controlled by them. The financial personnel of the Company do not work part-time in the enterprises of controlling shareholders,
actual controllers or other enterprises controlled by them.
3. Financial independence
The Company has set up an independent financial department, equipped with full-time financial personnel, and has established an
independent financial accounting system. The Company can make financial decisions independently, and has a standardized
financial accounting system and internal control system, such as internal financial management system for branches and
subsidiaries. There is no situation of controlling shareholders interfering in using the Company’s funds. The Company has an
independent bank account and does not share the bank account with the controlling shareholders, actual controllers and other
enterprises controlled by them. As an independent tax payer, the Company makes tax returns and fulfills its payment obligations
independently in accordance with the law. There is no situation of mixed tax payment with the controlling shareholders, actual
controllers and other enterprises controlled by them. The Company’s financial operation is independent of the controlling
shareholders, actual controllers and other enterprises controlled by them.
4. Organization independence
In strict accordance with the Company Law of the People’s Republic of China, Articles of Association and other relevant
provisions, the Company has established and improved the General Meeting of Shareholders, the Board of Directors, the Board of
Supervisors, the management department and the corresponding rules of procedure of the three meetings, and formed a perfect
corporate governance structure and standardized operation system. According to the development needs of production and
operation, the Company has set up corresponding offices and production and operation organizations, and independently
exercised the operating management authority, and has complete procurement, R&D, production, sales systems and supporting
departments. The Company’s production, operation and office are strictly separated from the controlling shareholders, actual
controllers and other enterprises controlled by them, and there is no mixed operation or joint office with the controlling
shareholders, actual controllers and other enterprises controlled by them.
78
5. Business independence
The Company has the corresponding qualifications required for operation, independent and complete business system,
information system and management system, etc. necessary to engage in operating business, and independent and complete R&D,
production capacity, procurement and sales business systems. The business of the Company is independent of the controlling
shareholders, actual controllers and other enterprises controlled by them. There is no dependence on the controlling shareholders,
actual controllers and other enterprises controlled by them. There is no horizontal competition or unfair related transaction with
the controlling shareholders, actual controllers and other enterprises controlled by them.
III. Horizontal competition
□ Applicable √ Not applicable
IV. Information about the annual general meeting of shareholders and extraordinary general meeting
of shareholders held during the reporting period
1. General meeting of shareholders during the reporting period
Investor
Meeting session Meeting type participation Convening date Date of disclosure Resolutions of the meeting
proportion
Proposals for the 2022 Annual Report,
Proposal on the Plan on the Profit
2022 Annual Annual general
Distribution for 2022, Proposal on
General Meeting of meeting of 76.92% May 16, 2023 May 17, 2023
Adjusting the Use of Proceeds, Extending
Shareholders shareholders
the Construction Period of Some Fund
Raising Projects, and Other Matters
Regarding adjustments to the Proposal on
Adjusting the Company’s Scope of
Business, Registered Capital, and
Amendment to the “Articles of
The 1st
Association”, Proposal on Nominating
Extraordinary Extraordinary
Candidates for the Third Session of the
General Meeting of general meeting of 76.50% July 7, 2023 July 7, 2023
Board of Supervisors on Behalf of
Shareholders in shareholders
Shareholders, and Proposal on Executing
2023
Relevant Agreements on Relocation
Compensation and Resettlement for the
Urban Renewal Project of Winner
Industrial Park.
Regarding the Proposal on the
The 2nd Company’s First Employee Stock
Extraordinary Extraordinary Ownership Plan (Draft) and matters
General Meeting of general meeting of 74.85% September 5, 2023 September 5, 2023 related to the Proposal on the
Shareholders in shareholders Management Measures for the
2023 Company’s First Employee Stock
Ownership Plan, among others.
2. The preferred shareholders with voting rights restored request an extraordinary general meeting of shareholders
□ Applicable √ Not applicable
79
Winner Medical
V. The Company has a voting rights differential arrangement
□ Applicable √ Not applicable
VI. Corporate governance in the red-chip structure
□ Applicable √ Not applicable
VII. Directors, supervisors and senior management
1. Basic information
Number of
Number of Number of Number
shares Other
shares shares of shares
Status held at the increase
Ag increased in decreased in held at the Causes for change in
Name Gender Position of Start date of tenure End date of tenure beginning and
e current current end of the shares
service of the decrease
period period period
period (shares)
(shares) (shares) (shares)
(shares)
Chairman and
Incum
Li Jianquan Male 67 General May 18, 2015 July 12, 2024 0 0 0 0 0 N/A
bent
Manager
Director, Chief
Listed companies
Financial
Fang Incum implement conversion
Male 56 Officer and May 18, 2015 July 12, 2024 40,000 0 16,000 56,000
Xiuyuan bent of capital reserves into
Deputy General
share capital
Manager
Incum
Xu Xiaodan Female 36 Director May 18, 2015 July 12, 2024 0 0 0 0 0 N/A
bent
Guo Incum
Male 40 Director June 28, 2018 July 12, 2024 0 0 0 0 0 N/A
Zhenwei bent
Peng Independent Incum
Male 63 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
Jianfeng director bent
Independent Incum
Xie Jiawei Female 51 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
director bent
Independent Incum
Key Ke Liu Male 60 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
director bent
Chairman of the
Zhang Incum
Female 38 Board of July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
Tingting bent
Supervisors
Employee
Incum
Liu Hua Female 51 Representative July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
bent
Supervisor
Incum
Zhang Yan Female 40 Supervisor July 7, 2023 July 12, 2024 0 0 0 0 0 N/A
bent
Secretary to the
Listed companies
board of
Chen Incum implement conversion
Female 42 directors, May 18, 2015 July 12, 2024 5,300 0 0 2,120 5,300
Huixuan bent of capital reserves into
deputy general
share capital
manager
Deputy general Incum
Zhang Li Female 46 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
manager bent
Listed companies
Former implement conversion
Wang Ying Female 42 Resign May 18, 2015 July 7, 2023 30,000 0 0 12,000 42,000
supervisor of capital reserves into
share capital
Total -- -- -- -- -- -- 75,300 0 0 30,120 103,300 --
80
Dismissal of directors, supervisors and senior management in the term of office during the reporting period
√ Yes □ No
Ms. Wang Ying, the former Supervisor of the Company, submitted a written Resignation Application to the Company on June 5,
2023. The Company convened the First Extraordinary Shareholders’ General Meeting of 2023 on July 7, 2023, and Ms. Zhang
Yan was re-elected to fill her position as Supervisor.
Change of directors, supervisors and senior management
√Applicable □ Not applicable
Name Position held Type Date Reasons
Wang Ying Supervisor Resign July 7, 2023 Resign
Zhang Yan Supervisor Elected July 7, 2023 General meeting election
2. Service status
Professional background, main work experience and main responsibilities currently in the Company of current directors,
supervisors and senior management of the Company
(1) Board of directors
Mr. Li Jianquan, born in 1957, Chinese, a permanent resident of the Hong Kong Special Administrative Region; He holds a
college degree and is currently pursuing an EMBA at PBC School of Finance, Tsinghua University. He created two brands of
“Winner Medical” and “Purcotton” and served as the Chairman and General Manager of Winner Medical Co., Ltd., as well as the
Chairman and General Manager of Shenzhen Purcotton Technology Co., Ltd. He is the founder of the Medical Dressing Branch
of the China Medical Insurance Chamber of Commerce and rotating chairman of the “China Cotton Sustainable Development
Project” of the China Cotton Association, and was honored as one of the “40 People for the 40th Anniversary of the Shenzhen
Special Economic Zone” by the Shenzhen Municipal Party Committee and Municipal Government.
Mr. Fang Xiuyuan, born in August 1968, Chinese, without permanent residency abroad; College degree, Chinese Certified Public
Accountant. He is currently studying for a Finance EMBA at the Chinese University of Hong Kong (Shenzhen). From July 1988
to April 1998, he served as the Accountant and Chief of Finance Department of Hubei Medical and Health Products Import and
Export Corporation. Since 2000, he has been the Director, Deputy General Manager and Chief Financial Officer of Winner
Medical Co., Ltd. Mr. Fang Xiuyuan concurrently holds the posts of Chairman of Zhejiang Longterm Medical Technology Co.,
Ltd. as well as an Executive Partner of Shenzhen Purcotton Technology Co., Ltd., Shenzhen Qianhai Purcotton E-Commerce Co.,
Ltd., Winner Medical (Huanggang) Co., Ltd., Winner Medical (Chongyang) Co., Ltd., Winner Medical (Jiayu) Co., Ltd., Winner
Medical (Jingmen) Co., Ltd., Yichang Winner Medical Textile Co., Ltd., Winner Medical (Tianmen) Co., Ltd., director of Winner
Medical (Wuhan) Co., Ltd. and Xiamen Leyuan Investment Partnership (L.P.). Mr. Fang Xiuyuan is currently a member of the 7th
Shenzhen Standing Committee of the CPPCC and Vice Chairman of the Federation of Industry and Commerce of Shenzhen
Longhua District (general chamber of commerce).
Ms. Xu Xiaodan, born in 1987, Chinese, without permanent residency abroad; She holds a graduate diploma. She joined the
Company in 2010; from August 2013 to January 2015, she was the Purchasing Manager of the Procurement Department of
Shenzhen Purcotton Technology Co., Ltd. From January 2015 to January 2020, she served as the Director of Commodity Center
of Shenzhen Purcotton Technology Co., Ltd., overseeing commodities, major planning, and procurement. In May 2015, she also
assumed the role of Company Director. From February 2020 to March 2024, he held the position of Director of the Company’s
Strategic Planning Department. Starting March 2024, she serves as the Company’s Chief Information Officer (CIO) and Director
of the Strategic Planning Department. At present, Ms. Xu Xiaodan is also a Director of Winner Medical (Heyuan) Co., Ltd. and
Winner Medical (Wuhan) Co., Ltd.
81
Winner Medical
Mr. Guo Zhenwei, born in 1984, Chinese, without permanent residency abroad; Bachelor degree of Central University of Finance
and Economics, EMBA Master Degree of China Europe International Business School. From July 2007 to September 2009, he
was a Senior Auditor of Deloitte Touche Tohmatsu Limited; from September 2009 to July 2010, he was a researcher of China
International Capital Corporation Limited; from July 2010 to now, he has been working at Sequoia Capital China and is currently
the managing director; from June 2018 to now, he has been a director of Winner Medical Co., Ltd. At present, Mr. Guo Zhenwei
is also a director of Shijiazhuang Junlebao Dairy Co., Ltd., Shanghai Buy Quickly Technology and Services Co., Ltd., Liuliu
Orchard Group Co., Ltd., Hangzhou Dahiti Science & Technology Co., Ltd., Deqing Jiajun Beverage Co., Ltd., Sichuan Vanov
New Material Co. Ltd., Shanghai Shouquanzhai E-commerce Co., Ltd., LOHO Holding Inc., Dynamics China Holding Company,
Shanghai Ruishu Electronic Commerce Co., Ltd., and Genki Forest Technology Group Holdings Limited, Director of Jixiangju
Food Co., Ltd., as well as a supervisor of Shanghai Qiyao Automobile Technology Co., Ltd.
Mr. Key Ke Liu, born in 1964, American, Bachelor and Master degree in Chemical Engineering of Northwest University,
Doctorate of City University of New York, USA, Master of Management of Rensselaer Polytechnic Institute, USA, foreign
academician of Australian National Academy of Engineering. He was a Chief Scientist of GE Global Research, a director of
Power Environment and Energy Research Center (PEER) of the California Institute of Technology, a director of the International
Pittsburgh Coal Conference (PCC) Organization, a member of PCC Organization, an independent director of Konfoong Materials
International Co., Ltd., Shenzhen Hifuture Information Technology Co., Ltd., and Hunan Yussen Energy Technology Co., Ltd. He
also has worked for many years with well-known multinational companies such as Exxon-Mobil and UTC. He is currently the
dean of the School of Innovation and Entrepreneurship, President of the Clean Energy Research Institute and chair professor of
the Department of Chemistry, Southern University of Science and Technology, standing director and deputy director of Center for
China and Globalization (CCG), director of Carnegie–Tsinghua Center, and director of Puritek Company Ltd. After returning to
China, he was appointed as the deputy director and Chief Technology Officer (CTO) of National Institute of
Clean-and-Low-Carbon Energy. He was awarded the Top Fifty China Overseas-educated Scholars in Innovation and
Entrepreneurship in 2015, Pitt Award in 2013 and Emerald Honors Special Recognition Award in 2006.
Mr. Peng Jianfeng, born in 1961, Chinese, without permanent residency abroad; master degree of Renmin University of China.
Since 1986, he has successively served as lecturer, associate professor and professor in the School of Labor and Human Resources
of Renmin University of China; previously, he had successively served as the independent director of Telling Telecommunication
Holding Co., Ltd., Sunward Intelligent Machinery Co., Ltd., Goertek Co., Ltd., Chinese Universe Publishing and Media Group
Co., Ltd., Haier Smart Home Co., Ltd., China Merchants Shekou Industrial Zone Holdings Co., Ltd. and Chow Tai Seng
Jewellery Co., Ltd.; currently the independent director of Jinko Power Technology Co., Ltd., non-independent director of Hytera
Communications Corporation Limited, director of CCB Trust Co., Ltd., independent director of Kuang-Chi Technologies Co.,
Ltd., executive director of China Stone Management Consulting Ltd. and executive director of China Stone (Beijing) Corporation
Culture Management Consulting Co., Ltd. Mr. Peng Jianfeng has been deeply involved in enterprises for a long time to provide
consulting services. He has been employed as a senior management consultant and an expert group leader by Shenzhen Huawei,
Guangdong Midea Group, Shandong Liuhe Group, ENN Group, etc.. The expert team led by him has provided consulting services
for hundreds of famous enterprises, and the management consulting team led by him has created the Huawei Basic Law, Charter
of OCT, TCL Fights Scale with Speed, The Third Road of Midea, Samsung (China) Culture, Meager Profit Management and
Service Marketing of Shandong Liuhe Group, Three Mechanisms and Six Systems of Human Resources of Baisha Group, Joint
Programme of Action of Dongfeng Nissan, Lenovo Cultural Studies and Jingdong Culture. He was awarded the “Top Ten Figures”
of the second China Human Resource Management Award and the “Top Ten Respectable Management Consulting Experts” by
the Management Consulting Committee of China Enterprise Confederation.
Ms. Xie Jiawei, born in 1973, Chinese, without permanent residency abroad; Bachelor degree, certified public accountant and tax
accountant. Previously, she successively served as the Deputy Director of Beijing Zhongtian Huazheng Certified Public
Accountants Co., Ltd., Deputy Director of Shenzhen Branch of BDO China Shu Lun Pan Certified Public Accountants LLP, Vice
Chairman of the 6th Council of Shenzhen Institute of Certified Public Accountants, and Independent Director of Shenzhen
Guangju Energy Co., Ltd., Shenzhen Topband Co., Ltd., Guangdong Xinhui Meida Nylon Co., Ltd., and Shenzhen Dynanonic
Co., Ltd., as well as Independent Director of Shenzhen Heungkong Holding Co., Ltd. and Han’s Laser Technology Industry
Group Co., Ltd., a core member of Vanho Securities, and a member of the 6th Council of Guangdong Certified Public Accountants
Association. He is currently a partner of Dahua Accounting Firm.
82
(2) Board of supervisors
Ms. Zhang Tingting, born in 1986, Chinese, without permanent residency abroad; Bachelor degree. She joined the Company in
November 2010, from July 2014 to January 2021, successively served as the Manager of the Supplier Management Department,
Domestic Trade Drugstore Management Department, Distributor Management Department, Product Development Department
and E-commerce Commodity Department from July 2014 to January 2021. She is currently the Deputy Director of Commodity
Department of the Company. She currently serves as a member of the Working Committee of the Two New Parties of Longhua
Street, Secretary of the Company Party Committee, Chairwoman of the Women’s Federation, Secretary of the Youth League
Committee, Party Representative of Longhua District, Member of the 9th Shenzhen Youth Federation, and Representative of the
7th Women’s Congress. She has been awarded the title of “Shenzhen Outstanding Communist Party Member” by the Shenzhen
Municipal Committee of CPC.
Ms. Liu Hua, born in 1973, Chinese, without permanent residency abroad; MBA and Master degree of Tongji University. From
April 2004 to September 2009, she was the Manager of International Trade Department of Winner Industries (Shenzhen) Co., Ltd.;
from September 2009 to November 2011, she served as the Director of Operation Center of Shenzhen Purcotton Technology Co.,
Ltd.; from November 2011 to April 2021, she served as the Deputy General Manager of the Shenzhen Purcotton Technology Co.,
Ltd.; since January 2015, she has been a Director of Shenzhen Purcotton Technology Co., Ltd.; from July 2015 to present, she
serves as director of Shenzhen Qianhai Purcotton E-Commerce Co., Ltd.,; and since April 2021, she has been the Vice President
of Shenzhen Purcotton Technology Co., Ltd.
Ms. Zhang Yan, born in 1984, Chinese, without permanent residency abroad; Bachelor’s degree. Joined the Company in July
2006, and previously held roles including the head of the supply chain at Winner Medical, executive deputy general manager of
the wholly-owned subsidiary Winner Medical Supplies (Jingmen) Co., Ltd., and head of the supply chain at the wholly-owned
subsidiary Shenzhen Purcotton Technology Co., Ltd. Since March 2020 to present, he has served as the rotating CEO of the
Company’s medical sector, concurrently holding positions as the executive director and legal representative of the wholly-owned
subsidiary Winner Guilin Latex Co., Ltd., and the sub-subsidiary of Winner Medical (Jingmen) Co., Ltd.
(3) Other senior management
Ms. Zhang Li, born in 1978, Chinese, without permanent residency abroad; Bachelor’s degree. Joined Winner Medical Products
Co., Ltd. in September 2010. From September 2010 to June 2021, she successively served as the Medical Business Marketing
Director, R&D Director, Export Director, Sales Director, Rotating CEO, and Vice President of the Medical Sector. Currently, she
serves as the Company’s Deputy General Manager, Vice President of Investment Management, and Chairman of Winner Pingan
Medical (Hunan) Co., Ltd.
Ms. Chen Huixuan, born in 1982, Chinese, without permanent residency abroad; Master degree in Finance, University of
Glasgow, UK. From February 2007 to June 2009, she was an Analyst Assistant of Brean Murray, Carret & Co.; from September
2009 to May 2015, she served as a Manager of the Investment Management Department of Winner Industries (Shenzhen) Co.,
Ltd.; since May 2015, she has been the Deputy General Manager and Secretary to the Board of Directors. At present, she also
serves as an Executive Partner of Xiamen Huikang Investment Partnership (L.P.) and Director of Chengdu Winner Likang
Medical Products Co., Ltd. Ms. Chen Huixuan currently serves as a member of the Third Investor Relations Committee of the
China Association of Public Companies and as Deputy Director of the Investor Relations Committee of the Shenzhen Association
of Public Companies. She has been recognized with the “Level 5A Performance Evaluation of the Board Secretary” by the China
Association of Public Companies in 2022 and 2023, as well as prestigious honors including the 18th and 19th New Fortune Gold
Medal Board Secretary awards.
83
Winner Medical
Service status in the shareholder unit
√Applicable □ Not applicable
Whether to receive
Position held in remuneration or
Name of staff Shareholder unit name Start date of tenure End date of tenure
shareholder unit allowance in the
shareholder unit
Li Jianquan Winner Group Limited Director April 8, 2003 No
Xiamen Leyuan Investment
Fang Xiuyuan Partnership (Limited Executive partner May 2, 2013 No
Partnership)
Xiamen Huikang Investment
Chen Huixuan Partnership (Limited Executive partner May 2, 2013 No
Partnership)
Description of
service status in the None
shareholder unit
Service status in other unit
√Applicable □ Not applicable
Whether to receive
Position held in other End date remuneration or
Name of staff Other unit name Start date of tenure
unit of tenure allowance in other
unit
Li Jianquan Glory Ray Holdings Limited Director April 11, 2012 No
Li Jianquan Glory Ray Limited Director May 4, 2012 No
Chairman, general
Li Jianquan Shenzhen Purcotton Technology Co., Ltd. December 7, 2009 No
manager
Shenzhen Qianhai Purcotton E-commerce
Li Jianquan Chairman July 21, 2015 No
Co., Ltd.
Li Jianquan Winner Medical Malaysia Co., Ltd. Director July 17, 2013 No
Li Jianquan Winner Medical (Hong Kong) Limited Director January 14, 2008 No
Chairman, general
Li Jianquan Shenzhen PureH2B Technology Co., Ltd. January 25, 2018 No
manager
Shenzhen Cotton Lining Technology
Li Jianquan Chairman July 9, 2019 No
Innovation Co., Ltd.
Fanyu Innovation Holding (Shenzhen)
Li Jianquan Supervisor September 18, 2021 No
Co., Ltd.
Fang Xiuyuan Shenzhen Purcotton Technology Co., Ltd. Director December 7, 2009 No
Shenzhen Qianhai Purcotton E-commerce
Fang Xiuyuan Director July 21, 2015 No
Co., Ltd.
Fang Xiuyuan Winner Medical (Huanggang) Co., Ltd. Director January 14, 2005 No
Fang Xiuyuan Winner Medical (Chongyang) Co., Ltd. Director November 13, 2001 No
84
Whether to receive
Position held in other End date remuneration or
Name of staff Other unit name Start date of tenure
unit of tenure allowance in other
unit
Fang Xiuyuan Winner Medical (Jiayu) Co., Ltd. Director February 20, 2001 No
Fang Xiuyuan Winner Medical (Jingmen) Co., Ltd. Director December 15, 1995 No
Fang Xiuyuan Yichang Winner Medical Textile Co., Ltd. Director April 22, 1999 No
Fang Xiuyuan Winner Medical (Tianmen) Co., Ltd. Director February 23, 2001 No
Fang Xiuyuan Winner Medical (Heyuan) Co., Ltd. Director May 18, 2016 No
Fang Xiuyuan Winner Medical (Wuhan) Co., Ltd. Director January 23, 2017 No
Fang Xiuyuan Winner Medical (Hong Kong) Limited Director January 14, 2008 No
Chengdu Winner Likang Medical Products
Fang Xiuyuan Director May 31, 2009 No
Co., Ltd.
Fang Xiuyuan Shenzhen PureH2B Technology Co., Ltd. Director January 25, 2018 No
Shenzhen Cotton Lining Technology
Fang Xiuyuan Director July 9, 2019 No
Innovation Co., Ltd.
Zhejiang Longterm Medical Technology
Fang Xiuyuan Chairman May 10, 2022 No
Co., Ltd.
Xu Xiaodan Winner Medical (Heyuan) Co., Ltd. Director May 18, 2016 No
Xu Xiaodan Winner Medical (Wuhan) Co., Ltd. Director January 23, 2017 No
Director, general
Guo Zhenwei Sequoia Capital China October 1, 2010 Yes
manager
Guo Zhenwei Deqing Jiajun Beverage Co., Ltd. Director April 22, 2015 No
Guo Zhenwei Sichuan Vanov New Material Co. Ltd. Director December 5, 2017 No
Shanghai Shouquanzhai E-commerce Co.,
Guo Zhenwei Director July 13, 2018 No
Ltd.
Guo Zhenwei LOHO Holding Inc. Director July 2, 2018 No
Guo Zhenwei New Dynamics China Holding Company Director September 2, 2019 No
Guo Zhenwei Shijiazhuang Junlebao Dairy Co., Ltd. Director March 16, 2020 No
Guo Zhenwei Lium Group Co., Ltd. Director January 14, 2020 No
Hangzhou Dahiti Science & Technology
Guo Zhenwei Director May 21, 2020 No
Co., Ltd.
Genki Forest Technology
Guo Zhenwei Director December 1, 2020 No
Group Holdings Limited
Shanghai Ruishu Electronic Commerce
Guo Zhenwei Director August 26, 2020 No
Co., Ltd.
Shanghai Wanwuyouyang Catering
Guo Zhenwei Director April 8, 2021 No
Management Co., Ltd.
85
Winner Medical
Whether to receive
Position held in other End date remuneration or
Name of staff Other unit name Start date of tenure
unit of tenure allowance in other
unit
Shanghai Huaqiao Catering Management
Guo Zhenwei Director July 5, 2021 No
Co., Ltd.
Guo Zhenwei Sichuan Haocaitou Industrial Co., Ltd. Director March 30, 2020 No
Guo Zhenwei Jixiangju Food Co., Ltd. Director July 19, 2023 No
Guo Zhenwei Pucheng Dairy (Group) Co., Ltd. Supervisor March 12, 2021 No
College Dean and
Southern University of Science and
Key Ke Liu Chair Education The February 19, 2016 Yes
Technology
credit
Key Ke Liu Puritek Company Ltd. Director January 1, 2019 Yes
Beijing Low Carbon and Clean Energy Deputy Director and
Key Ke Liu January 1, 2010 No
Research Institute Chief Scientist (CTO)
Key Ke Liu Carnegie–Tsinghua Center Director January 1, 2015 No
Honorary Professor and
Key Ke Liu Zhejiang University January 1, 2014 No
Doctorial tutor
Executive Director,
Key Ke Liu Center for China and Globalization January 1, 2012 No
Deputy director
Peng Jianfeng Renmin University of China Professor September 1, 1996 Yes
Peng Jianfeng Kuang-Chi Technologies Co., Ltd. Independent director August 4, 2023 Yes
Hytera Communications Corporation
Peng Jianfeng Director December 6, 2019 Yes
Limited
Peng Jianfeng CCB Trust Co., Ltd. Director March 25, 2020 Yes
Peng Jianfeng China Stone Management Consulting Ltd. Executive director January 12, 2006 No
Hunan Happy Times Network Technology
Peng Jianfeng Director December 31, 2015 No
Co., Ltd.
Peng Jianfeng Siwod Education Technology Co., Ltd. Director January 17, 2018 No
Jiangxi Siwod Commercial Development
Peng Jianfeng Director November 18, 2014 No
Co., Ltd.
China Stone (Beijing) Corporation Culture Executive Director,
Peng Jianfeng November 16, 2004 No
Management Consulting Co., Ltd. General Manager
Beijing China Stone Human Resource
Peng Jianfeng Executive director October 30, 2003 No
Consulting Co., Ltd.
Hangzhou China Stone Management
Peng Jianfeng Director May 6, 2009 No
Consulting Co., Ltd.
Peng Jianfeng Beijing Ice Smart Technology Co., Ltd. Director June 1, 2012 No
Beijing China Stone Hunting Network
Peng Jianfeng Supervisor July 9, 2019 No
Technology Co., Ltd.
86
Whether to receive
Position held in other End date remuneration or
Name of staff Other unit name Start date of tenure
unit of tenure allowance in other
unit
Beijing China Stone Human Resources
Peng Jianfeng Supervisor April 21, 2016 No
Management Services Co., Ltd.
Beijing 51 Newbie Education Technology
Peng Jianfeng Supervisor November 13, 2015 No
Co., Ltd.
Dahua Certified Public Accountants Co.,
Xie Jiawei Partner May 4, 2010 Yes
Ltd. Shenzhen Branch
Director and Vice
Liu Hua Shenzhen Purcotton Technology Co., Ltd. January 5, 2015 No
President
Shenzhen Qianhai Purcotton E-commerce
Liu Hua Director July 21, 2015 No
Co., Ltd.
Zhang Yan Winner Guilin Latex Co., Ltd. Executive director May 24, 2023 No
Zhang Yan Winner (Jinzhou) Latex Products Co., Ltd. Executive director July 10, 2023 No
Chengdu Winner Likang Medical Products
Chen Huixuan Director May 1, 2018 No
Co., Ltd.
Zhang Li Winner Medical (Hunan) Co., Ltd. Chairman July 4, 2022 No
Description of
service status in None
other unit
Punishment of current directors, supervisors and senior management of the Company and those who left during the reporting
period by securities regulators in recent three years
√Applicable □ Not applicable
Mr. Peng Jianfeng, an independent director of the Company, engaged in short-term trading by purchasing 215,800 shares of
Hytera Communications Corporation Limited on February 2, 2023, and selling 53,950 shares of Hytera on February 3, 2023,
while serving as a director of Hytera Communications Corporation Limited. On July 11, 2023, the Shenzhen Securities
Regulatory Bureau issued a warning letter to him.
During Mr. Key Ke Liu’s tenure as an independent director of the Company, Shenzhen Hifuture Information Technology Co.,
Ltd., where he served as an independent director, was identified by the SFC as suspected of inaccurate disclosure of information,
misstatement of profits, and irregularities in accounting treatment. On February 1, 2024, the SFC issued a letter of prior notice of
administrative penalty, proposing administrative penalties against Mr. Key Ke Liu, Shenzhen Hifuture Information Technology
Co., Ltd., and other then-directors and supervisors of the Company.
87
Winner Medical
3. Remuneration of directors, supervisors and senior management
Decision-making procedures, determination basis and actual payment of remuneration of directors, supervisors and senior
management
The remuneration of directors, supervisors and senior managers consists of wages, allowances and bonuses. The Company’s
board of directors has a remuneration and assessment committee responsible for formulating performance evaluation standards,
procedures, systems, and main schemes and rewards and punishments. The remuneration plans of directors, supervisors and
senior managers have all gone through the corresponding deliberation procedures in accordance with the Articles of Association,
Remuneration Management System and other corporate governance systems.
Remuneration of directors, supervisors and senior management during the reporting period
Unit: ‘0,000 yuan
Whether to get
Total pretax
remuneration from
Name Gender Age Position Status of service remuneration received
related parties of the
from the Company
Company
Li Jianquan Male 67 Chairman and General Manager Incumbent 307.34 No
Director, Deputy General Manager,
Fang Xiuyuan Male 56 Incumbent 164.49 No
Chief Financial Officer
Xu Xiaodan Female 36 Director Incumbent 106.49 No
Guo Zhenwei Male 40 Director Incumbent 0 No
Peng Jianfeng Male 63 Independent director Incumbent 18 No
Xie Jiawei Female 51 Independent director Incumbent 18 No
Key Ke Liu Male 60 Independent director Incumbent 18 No
Zhang Tingting Female 38 Chairman of the Board of Supervisors Incumbent 68.38 No
Liu Hua Female 51 Employee Representative Supervisor Incumbent 125.94 No
Zhang Yan Female 40 Supervisor Incumbent 66.45 No
Zhang Li Female 46 Deputy general manager Incumbent 113.87 No
Deputy General Manager, Secretary to
Chen Huixuan Female 42 Incumbent 100.34 No
the Board Of Directors
Wang Ying Female 42 Supervisor Resign 36.7 No
Total -- -- -- -- 1,1441 --
Note: 1 The compensation data mentioned above encompasses the compensation received while serving as directors, supervisors,
or senior management during the specified period. Ms. Wang Ying formally resigned from the position of supervisor in July 2023,
and Ms. Zhang Yan assumed the position of supervisor in July 2023. Both individuals served as supervisors for less than one year
in 2023.
Other Information
□ Applicable √ Not applicable
88
VIII. Performance of duties by directors during the reporting period
1. Board of directors during the reporting period
Meeting session Convening date Date of disclosure Resolutions of the meeting
Proposal on the , Proposal on the Plan on the Profit Distribution
Directors
for 2022, etc.
Consideration and adoption of the Proposal on Adjusting
The 12th meeting of the Third Board of
May 5, 2023 May 8, 2023 the Use of Proceeds, Extending the Construction Period
Directors
of Some Fund Raising Projects.
Consideration and adoption of the Proposal on Adjusting
the Company’s Scope of Business, Registered Capital,
The 13th meeting of the Third Board of and Amendment to the “Articles of Association”, as well
June 7, 2023 June 8, 2023
Directors as the Proposal on the Company’s Social,
Environmental, and Governance Report for the Year
2022, among other matters.
Consideration and adoption of the Proposal on
The 14th meeting of the Third Board of Executing Relevant Agreements on Relocation
June 12, 2023 June 14, 2023
Directors Compensation and Resettlement for the Urban Renewal
Project of Winner Industrial Park.
The 15th meeting of the Third Board of Deliberated and adopted the Proposal on holding the 1st
June 21, 2023 June 22, 2023
Directors Extraordinary General Meeting of Shareholders in 2023.
The Proposal on the Company’s 2023 Semi-annual
The 16th meeting of the Third Board of Report and Summary, the Proposal on the Company’s
August 15, 2023 August 16, 2023
Directors First Employee Stock Ownership Plan (Draft), and other
matters were considered and approved.
The Proposal on the Q3 2023 Report, Proposal on the
The 17th meeting of the Third Board of
October 23, 2023 October 24, 2023 Use of Part of Idle Proceeds for Cash Management, and
Directors
other matters were considered and approved.
Consideration and approval of Proposal on the
Repurchase and Cancellation of Remaining Shares in
The 18th meeting of the Third Board of
December 19, 2023 December 21, 2023 the Special Securities Account and Proposal on Closing
Directors
Part of the Project and Permanently Supplementing the
Working Capital with the Surplus Raised Funds
89
Winner Medical
2. Attendance of directors at the board meetings and the general meeting of shareholders
Attendance of directors at the board meetings and the general meeting of shareholders
Times of
Times of
Times of attending Times of Times of attending Times of absences
Whether he has not attending the
Name of the board meetings attending the the board meetings attending the from the
attended two consecutive general
Directors during this reporting board meetings using board meetings board
board meetings in person meeting of
period on site communication by proxy meetings by
shareholders
proxy
Li Jianquan 8 8 0 0 0 No 3
Fang Xiuyuan 8 8 0 0 0 No 3
Xu Xiaodan 8 8 0 0 0 No 3
Guo Zhenwei 8 1 7 0 0 No 3
Peng Jianfeng 8 0 8 0 0 No 3
Xie Jiawei 8 1 7 0 0 No 3
Key Ke Liu 8 1 7 0 0 No 3
Explanation of not attending the board meeting in person for two consecutive times
During the reporting period, there were no instances of a director failing to attend the board of directors in person for two
consecutive times.
3. Objections made by directors on relevant matters
Whether the director raises any objection to the relevant matters of the Company
□Yes √No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
4. Other descriptions of the performance of duties by the directors
Whether the relevant suggestions of the director to the Company have been adopted
√ Yes □ No
Explanation of the relevant suggestions of the director to the Company have or have not been adopted
During the reporting period, the Company’s directors faithfully and diligently fulfilled their duties, actively attending relevant
meetings on time in strict accordance with the Company Law of the People’s Republic of China, the Securities Law of the
People’s Republic of China, and other relevant laws, regulations, and the Articles of Association. By telephone, email, site visits
and other forms, the independent directors kept communication with other directors, senior management and related personnel of
the Company, actively acquire the Company’s production and operation situation and financial position, put forward positive
suggestions on the Company’s development strategy and improvement of corporate governance, and expressed independent
opinions on the Company’s periodic reports, remuneration of directors and senior management and other matters, guaranteeing
the fairness and objectivity of the decisions made by the Company’s Board of Directors. The directors of the Company fulfilled
their duties faithfully and diligently, strove to safeguard the overall interests of the Company and the legitimate rights and
interests of the majority of minority shareholders, and played a positive role in the standardized operation and healthy
development of the Company.
90
IX. Situation of special committees under the board of directors during the reporting period
Number of Convening Important comments and Performance of Details of objection
Name of committee Members Content
meetings date suggestions other duties (if any)
Ensure that the financial Review the
Audit Committee of Xie Jiawei, Key 1. Internal Audit Work Report for Q4 2022 statements truly, accurately Company’s
January 6,
the Third Board of Ke Liu and Fang 1 2. Internal Audit Work Plan for Q1 2023 and completely reflect the financial data and None
2023
Directors Xiuyuan 3. Audit Committee Work Report for Q4 2022 Company’s overall financial related written
position reports
1. Proposal on the 2020 Internal Control
Self-evaluation Report
2. Internal Audit Work Report for Q1 2023
3. Internal Audit Work Plan for Q2 2023 Ensure that the financial Review the
Audit Committee of Xie Jiawei, Key 4. Audit Committee Work Report for Q1 2023 statements truly, accurately Company’s
the Third Board of Ke Liu and Fang 1 April 23, 2023 5. Proposal on the 2022 Annual Report and Its Abstract and completely reflect the financial data and None
Directors Xiuyuan 6. Proposal on the 2022 Financial Final Accounts Company’s overall financial related written
Report position reports
7. Proposal on the Q1 2023 Report
8. Proposal on the Renewal of the Appointment of the
Accounting Firm for the Year 2023
1. Internal Audit Work Report for Q2 2023 Ensure that the financial Review the
Audit Committee of Xie Jiawei, Key 2. Internal Audit Work Plan for Q3 2023 statements truly, accurately Company’s
August 14,
the Third Board of Ke Liu and Fang 1 3. Audit Committee Work Report for Q2 2023 and completely reflect the financial data and None
2023
Directors Xiuyuan 4. Proposal on the Company’s 2023 Semi-annual Company’s overall financial related written
Report and Summary position reports
1. Internal Audit Work Report for Q3 2023
Ensure that the financial Review the
2. Internal Audit Work Plan for Q4 2023
Audit Committee of Xie Jiawei, Key statements truly, accurately Company’s
October 23, 3. Audit Committee Work Report for Q3 2023
the Third Board of Ke Liu and Fang 1 and completely reflect the financial data and None
2023 4. Proposal on the Q3 2023 Report
Directors Xiuyuan Company’s overall financial related written
5. Proposal on the Use of Part of Idle Proceeds for
position reports
Cash Management
1. Proposal on the Confirmation of the Remuneration of
Non-Independent Directors in 2022 It is essential to align salary
Remuneration and 2. Proposal on the Confirmation of the Remuneration of levels with the Company’s
Evaluation Peng Jianfeng, Senior Management in 2022 operational performance and
Review the related
Committee of the Xie Jiawei and Li 1 April 23, 2023 3. Proposal on Achieving Vesting Conditions for the ensure that the implementation None
written reports
Third Board of Jianquan Second Vesting Period of the 2020 Restricted Stock of equity incentives complies
Directors Incentive Plan with legal requirements and
4. Proposal on the Revocation of Part of Granted regulations
Restricted Shares Not Yet Vested
Remuneration and
1. Proposal on the Company’s First Employee Stock It is necessary to ensure that
Evaluation Peng Jianfeng,
August 14, Ownership Plan (Draft) the ESOP scheme complies Review the related
Committee of the Xie Jiawei and Li 1 None
2023 2. Proposal on the Management Measures for the with the requirements of laws written reports
Third Board of Jianquan
Company’s First Employee Stock Ownership Plan and regulations.
Directors
Actively follow
the progress of
Strategy related Li Jianquan, Fang undertaking social
The Company shall actively
Social Responsibility Xiuyuan, Xu responsibility and
Proposal on the Company’s Social, Environmental, and undertake social responsibility
Committee of the Xiaodan, Guo 1 June 7, 2023 the preparation None
Governance Report for the Year 2022 and practice environmental
Third Board of Zhenwei and progress of the
protection concept
Directors Peng Jianfeng social
responsibility
report
91
Winner Medical
X. Work of the board of supervisors
Does the board of supervisors find any risks in the supervision activities of the Company during the reporting period
□Yes √No
The Board of Supervisors has no objection to the supervisory matters during the reporting period
XI. Company employees
1. Number of employees, professional composition and educational background
Number of employees in the parent company at the end of the reporting period (person) 1,120
Number of employees in main subsidiaries at the end of the reporting period (person) 11,894
Total number of employees at the end of the reporting period (person) 13,014
Total number of employees receiving salary in the current period (person) 13,014
Number of retired employees whose expenses need to be borne by the parent company and major
100
subsidiaries (person)
Professional composition
Professional composition categories Number of professionals (person)
Production personnel 6,136
Sales personnel 3,667
Technical personnel 1,259
Financial personnel 147
Administrative personnel 1,805
Total 13,014
Education background
Education background categories Number (person)
Master’s degree or above 254
Bachelor 1,839
Bachelor’s degree or below 10,921
Total 13,014
92
2. Pay policy
To align with the Company’s strategic direction and business planning, and to continuously foster individual value (initiative,
innovation) leading to performance growth, the Company has adjusted its employee salary structure. Moving from the previous
target annual salary system, it now adopts a structure of “fixed salary + bonus + long-term incentives”. The fixed salary is
gradually adjusted to match market standards, bonuses are allocated based on performance contribution greater contributions yield
higher income and long-term incentives are tied to both the Company’s long-term performance and individual long-term
contribution. This adjustment aims to boost team morale, enhance the sense of responsibility and mission among core team
members, implement a business partnership ethos, and refine the salary incentive system for high-performing employees.
Highlight integrated teamwork rather than sharing individual contributions, build a closed performance management mechanism
from strategy, organization to individuals, adopt a balanced scorecard for organizational performance, and link individual
performance to organizational KPIs, while the performance results can be used as the basis for bonus distribution. Variable
compensation employs the distribution logic of stock and excess bonuses, with high incentive for excess business and shared
revenue. The design logic encourages ambitious, high-quality and high-efficiency growth, and promotes the overall pursuit of
short- and long-term benefits, building the capacity of daring to compete and being able to win. Introduce supplementary
insurance on top of the basic social insurance, such as personal accident insurance and supplemental medical insurance. The
Company gradually improves the employee welfare system, starting from basic needs such as: transportation and catering
subsidies, to higher-level needs such as: reunion and anniversary gifts, and provides various forms of welfare to enhance
employees’ sense of security, happiness and identity.
3. Training plan
The Company puts forward the concept of “high-quality, high-efficiency, high-performance and high-return talents” as the targets
of talent attraction and training. It constantly upgrades talent structure, enhances talent team building, improves talent density, and
continues to strengthen the capacity building and training of leading talents and professionals. First, a dual-channel development
mechanism and qualification system has been set up, encouraging professionals to conduct further research and create value in
their areas of expertise to meet the Company’s growing demand for professional capacity enhancement and caring of
professionals, and promote talent specialization and diversification. Second, conduct talent inventory to identify potential
outstanding talents, set benchmarks, and improve talent density in the value plateau. Third, carry out extensive
“industry-university-research collaboration”, strengthen cooperation and exchange with universities and research institutions,
continuously introduce top technical talents, improve the comprehensive quality and professional ability of talent teams, improve
innovation in technology R&D to be a true influencer in the medical industry. Fourth, take the initiative to build training and
development systems, carry out “Leading Program”, skills for product line/marketing line, cost reduction and efficiency, team
leaders, corporate culture interpretation and promotion, general knowledge, etc., allowing for the empowerment of key areas and
posts, talent development, and improvement of generalist skills in all areas of expertise available throughout the system. Finally,
the Company attaches great importance to the new generation of employees. It systematically promotes the training and
development of college students, including camp training, assignment of mentors, rotational practice, and fixed-term development.
This forms a closed-loop management for the training and development of young talents, comprehensively improves their
multi-dimensional development, such as cultural integration, product knowledge, professional skills and professionalism, helping
them transform from students in campus to elites in workplace. All kinds of training systems, covering management, professional
and general training systems, have been prepared for all professional fields. We focus on annual strategic planning and capacity
building of key positions by offering special training. Internal training and external training can be combined to enrich the
existing curriculum. Moreover, the Company integrates online platform resources with offline practical projects to provide rich
training resources, continuously iterate the curriculum system according to the development and changes of the business, and keep
on expanding the faculty to help build the talent team and improve professional capabilities, to support the achievement of the
Company’s business goals.
4. Labor outsourcing
□ Applicable √ Not applicable
XII. Profit distribution and share capital increase from capital surplus
Profit distribution policy during the reporting period, especially the formulation, implementation or adjustment of cash dividend
policy
□ Applicable √ Not applicable
93
Winner Medical
The Company’s profit distribution plan and capital surplus converted into a share capital plan in the reporting period are
consistent with the relevant provisions of the articles of association and dividend management measures
√ Yes □ No □ Not applicable
The Company’s profit distribution plan and capital surplus converted into a share capital plan in the reporting period conform to
the relevant provisions of the articles of association.
Profit distribution and share capital increase from capital surplus in current year
Bonus shares per 10 shares (shares) 0
Dividend per 10 shares (yuan) (including tax) 5.00
Increase shares per 10 shares 0
Share capital base in distribution plan (shares) 583,938,148
Amount of cash dividend (yuan) (including tax) 291,969,074.00
Amount of cash dividend in other forms (e.g. share repurchase) (yuan) 0.00
Total cash dividends (including other methods) (yuan) 291,969,074.00
Distributive profit (yuan) 4,897,039,093.59
Proportion of total cash dividends (including other methods) in total profit distribution 100.00%
This cash dividends
Others
Detailed description of the proposal of profit distribution or share capital increase from accumulation fund
According to the Audit Report of Winner Medical Co., Ltd. in 2023 issued by BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP,
the net profit attributable to the shareholders of the parent company in the consolidated statements of the Company in 2023 is 580,403,232.37 yuan, and the
net profit of the income statement of the parent company in 2023 is 825,570,993.25 yuan. As of December 31, 2022, the parent company’s profit available
for distribution is 4,897,039,093.59 yuan.
On the disclosure date of the distribution plan, the Company’s total share capital stood at 588,292,708 shares, with 4,354,560 shares held in a special
securities account for repurchase. Deducting these repurchased shares, the total share count amounted to 583,938,148 shares. It was planned to distribute a
cash dividend of 5.00 yuan per 10 shares to all shareholders (tax included), with no capital increase or bonus shares. The total cash dividend amounted to
291,969,074.00 yuan, representing 50.30% of the net profit attributable to shareholders of the parent company as per the consolidated income statement.
The Company made profits during the reporting period and the profits available for distribution to shareholders of the parent
company were positive, but no distribution plan for cash dividends.
□ Applicable √ Not applicable
94
XIII. Implementation of the Company’s equity incentive plan, employee stock ownership plan or
other employee incentive measures
√Applicable □ Not applicable
1. Share Incentive
The Company convened the 15th meeting of the second board of directors and the ninth meeting of the second board of
supervisors on November 27, 2020, followed by the sixth extraordinary general meeting of shareholders of 2020 on December 15,
2020. The purpose of these meetings was to review and approve the Proposal on the Company’s 2020 Restricted Stock Incentive
Plan (Draft) and Its Abstract and its Summary, as well as the Proposal on Related Matters. The general meeting of shareholders
authorized the board of directors to determine the grant date of restricted stocks, and relevant matters which is necessary to grant
restricted shares to the incentive object and go through the procedures for granting restricted shares when the incentive object
meets the conditions. For details, please refer to relevant announcements disclosed by the Company on the website
(http://www.cninfo.com.cn) on December 16, 2020 and November 30, 2020.
On December 18, 2020, the Company held the 17th meeting of the second board of directors and the 11th meeting of the second
board of supervisors respectively, deliberated and passed the Proposal on Matters Related to the Adjustment of the Restricted
Stock Incentive Plan in 2020 and the Proposal on the First Grant of Restricted Stocks to the Incentive Objects, and determined
that December 18, 2020 will be the grant date of the incentive plan, 5.833 million restricted shares will be granted to 1,036
eligible incentive objects. For details, please refer to relevant announcement disclosed by the Company on the website
(http://www.cninfo.com.cn) on December 22, 2020.
The Company held the 6th meeting of the Third Board of Directors and the 5th meeting of the Third Board of Supervisors on April
20, 2022, as well as the Annual General Meeting of Shareholders 2021 on May 13, 2021, respectively, deliberated and approved
the Proposal on the Revocation of Part of Granted Restricted Shares Not Yet Vested. 3.366925 million granted but unvested
restricted shares were revoked, because some incentive recipients could not meet the incentive conditions due to their demission
or holding the post of supervisors, while the Company failed to complete the incentive assessment targets for 2021. For details,
please refer to relevant announcements disclosed by the Company on CNINFO.com (http://www.cninfo.com.cn) on April 22,
2022.
The Company convened the 11th meeting of the third board of directors and the 8th meeting of the third board of supervisors on
April 23, 2023, to consider and adopt the Proposal on the Revocation of Part of Granted Restricted Shares Not Yet Vested. Due to
the resignation of 95 additional incentive targets and 419 incentive targets failing to meet individual-level performance appraisal
standards in 2022 under the Company’s 2020 Restricted Stock Incentive Plan, a total of 1,303,935 shares of granted restricted
stocks are planned to be voided. On the same day, the Proposal on Achieving Vesting Conditions for the Second Vesting Period of
the 2020 Restricted Stock Incentive Plan was reviewed and approved. The conditions for the second vesting period of the 2020
Restricted Stock Incentive Plan have been met, with 1,162,140 shares of Class II restricted shares vested.
On April 23, 2024, the Company conducted the 20th meeting of the third board of directors and the 15th meeting of the third board
of supervisors. During this session, the Proposal on the Revocation of Part of Granted Restricted Shares Not Yet Vested was
reviewed and approved. It was confirmed by the Company that incentive recipients who met the assessment standards during the
second vesting period of the first-time grant under this incentive plan have chosen to forgo this vesting opportunity. The Company
intends to void a total of 1,162,140 restricted shares that have been granted but have not yet vested.
95
Winner Medical
Equity incentive granted to directors and senior management
√Applicable □ Not applicable
Unit: share
Number
Number Number Number Market Number Numbe Number of
of Exercise price
of stock of new of Number price at of r of new Number of
exercisa of shares
options stock shares of stock the end restricted shares restricted Grant price restricted
ble exercised
held at options exercise options of the shares unlock shares of restricted shares held
Name Position shares during the
the granted d during held at the reportin held at the ed in granted shares (yuan/ at the end
during reporting
beginning during the the end of the g period beginning the during the share) of the
the period (yuan/
of the reporting reportin period (yuan/ of the current reporting period
reportin share)
year period g period share) period period period
g period
Chairman
Li
and
Jianqua 0 0 0 0 0 0 37.25 40,000 0 0 72.50 44,800
General
n
Manager
Director,
Chief
Fang Financial
Xiuyua Officer and 0 0 0 0 0 0 37.25 25,000 0 0 72.50 28,000
n Deputy
General
Manager
Xu
Director 0 0 0 0 0 0 37.25 15,000 0 0 72.50 16,800
Xiaodan
Secretary to
the board of
Chen
directors,
Huixua 0 0 0 0 0 0 37.25 15,000 0 0 72.50 16,800
deputy
n
general
manager
Deputy
Zhang
general 0 0 0 0 0 0 37.25 20,000 0 0 72.50 28,000
Li
manager
Total -- 0 0 0 0 -- 0 -- 115,000 0 0 -- 134,400
(i) The restricted stocks held by the aforementioned directors and senior managers are Category II restricted stocks, which have fulfilled the vesting
conditions but have not yet undergone the vesting procedures. The Company convened the 20th meeting of the third session of the Board of Directors on
April 23, 2024. During the meeting, the Proposal on the Revocation of Part of Granted Restricted Shares Not Yet Vested was reviewed and approved.
Remark (if any) Since the market price of the Company’s stock is lower than the grant price and the incentive recipients have expressed no intention to vest, the Company
will invalidate the aforementioned restricted stocks that have met the vesting conditions but have not yet undergone the vesting procedures. (ii) The
increase in the number of restricted stocks held at the end of the period was due to the Company’s implementation of converting capital reserves into
equity capital.
Evaluation mechanism and incentive of senior management
The Company has established a target accountability evaluation system for senior management and an annual performance
appraisal system for senior management teams, examined and evaluated the senior management according to the examination and
evaluation system, taking into account the long-term development needs of the Company from the Company’s business
performance, individual level and scientific perspective
2. Implementation of employee stock ownership plan
√Applicable □ Not applicable
All effective employee stock ownership plans implemented during the reporting period
Total number of Proportion of total
Total number
Employee Scope stocks held Change share capital of Sources of funds to implement the plan
of employees
(shares) listed companies
Core employees at director level or Incentive funds raised by employees
14 505,000 None 0.08%
above (if any) themselves and provided by the Company
96
Shareholding status of directors, supervisors, and senior managers in employee stock ownership plans during the reporting period
Number of shares held at the Number of shares held at the Proportion of total share capital of
Name Position
beginning of the period (shares) end of the period (shares) listed companies
N/A N/A 0 0 0.00%
Changes in asset management institutions during the reporting period
□ Applicable √ Not applicable
Changes in equity caused by holders’ disposal of shares during the reporting period
□ Applicable √ Not applicable
Not applicable to the exercise of shareholders’ rights during the reporting period
Other pertinent circumstances and explanations regarding the employee stock ownership plan during the reporting period.
Not applicable
Changes in the membership of the Employee Stock Ownership Plan Management Committee
□ Applicable √ Not applicable
The financial impact of employee stock ownership plans on listed companies during the reporting period and the associated
accounting treatment
√Applicable □ Not applicable
According to the provisions of Accounting Standards for Business Enterprises No. 11 - Share-based Payment, on each balance
sheet date during the vesting period, the relevant costs or expenses and capital reserves are determined based on the best estimate
of the number of exercisable equity instruments and the fair value of the equity instrument on the grant date, reflecting the
services obtained in the current period. In 2023, the total expenses recognized for equity-settled share-based payment were
2,181,718.82 yuan, with the entire amount included in the capital reserve.
Termination of employee stock ownership plans during the reporting period
□ Applicable √ Not applicable
Other description:
Not applicable
97
Winner Medical
3. Other employee incentive measures
□ Applicable √ Not applicable
XIV. Establishment and implementation of internal control system in the reporting period
1. Establishment and implementation of internal control
During the reporting period, the Company adhered to the risk-oriented principle. It continually improved and optimized the
Company’s internal control system on the basis of daily supervision and special supervision of internal control according to the
Basic Norms of Enterprise Internal Control and its supporting guidelines and other internal control supervision requirements,
combined with the internal control system and evaluation methods to constantly adapt to the changes in the external environment
and the requirements of internal management. According to the operation, analysis and evaluation of the internal control system,
the Company effectively prevented risks in management and promoted the realization of internal control objectives.
2. Details of significant internal control defects discovered during the reporting period
□Yes √No
XV. Management and control of the Company over its subsidiaries during the reporting period
Problems Solutions Follow-up
Company name Integration plan Integration progress Progress
encountered taken solution
The Company sets out clear
Build and improve the corporate
requirements through the authority
governance structures for
and responsibility operation manual
subsidiaries, assign directors,
that, for material matters related to
supervisors and financial officers
corporate governance structure and
to the subsidiaries, and appoint
system, strategic planning, investment
general managers. Clarify the
and financing activities, asset leasing
General Manager Responsibility
Longterm Medical, and transfer, financial management,
System under the Group’s
Winner Guilin, Winner human resources, compliance and risk
control structure; formulate
Medical (Hunan), control, information technology N/A N/A N/A N/A
effective plans for business
Junjian Medical, projects and other operational
empowerment, control and
Winner Jinzhou activities, subsidiaries shall, in
synergy according to the
accordance with the authorization
business conditions of
system, report to the Company for
subsidiaries; improve the
approval before implementation, and
efficiency of corporate
submit such material matters to the
operations, and promote the
Company’s Board of Directors for
subsidiaries’ compliance as well
review and approval as per
as orderly, steady development
regulations.
98
XVI. Internal control evaluation report or internal control audit report
1. Internal control evaluation report
Disclosure date of full text of internal control evaluation report April 25, 2024
Disclosure index of full text of internal control evaluation report http://www.cninfo.com.cn
The proportion of the total assets of the unit included in the scope of evaluation
97.61%
in the total assets of the Company’s consolidated financial statements
The proportion of the operating income of the unit included in the scope of
evaluation in the operating income of the Company’s consolidated financial 86.92%
statements
Defect identification standard
Class Financial Report Non-financial reports
Significant defects: Significant defects: lack of democratic decision-making
1) The control environment is invalid; process; the decision-making process leads to major errors,
2) The directors, supervisors and senior management of the Company the important business lacks system control or is
commit fraud and cause significant losses and adverse effects to the Company; systematically invalid, and lack of effective compensatory
3) The certified public accountant finds that there is material misstatement in control; the loss of middle and senior managers and senior
the current financial report, which is not found by the internal control in the technicians is serious; the results of internal control
process of operation; evaluation, especially the significant defects, have not
4) The supervision of the Company’s Audit Committee and the internal been rectified; other situations that have a significant
audit institution over the internal control is invalid. negative impact on the Company.
Major defects: Major defect: democratic decision-making process exists
Qualitative
1) Failure to select and apply accounting policies in accordance with but is not perfect; the decision-making process leads to
standard
generally accepted accounting principles; general errors; there are defects in important business
2) No anti-fraud procedures and control measures have been established; systems or system; the loss of business personnel in key
3) There is no corresponding control mechanism established or no positions is serious; the results of internal control
implementation of and no corresponding compensatory control for the evaluation, especially the major defects, have not been
accounting treatment of non-routine or special transactions; rectified; other situations that have a large negative impact
4) There are one or more defects in the control of the financial reporting on the Company.
process at the end of the period, and it can not reasonably guarantee the prepared Common defects: the decision-making process is
financial statements to achieve the true and accurate goal. inefficient; the general business systems or system has
Common defects: Other internal control defects that do not constitute significant defects; the loss of business personnel in general positions
defects or major defects. is serious; general defects have not been rectified.
Significant defects: 1. potential misstatement of operating income ≥ 2% of the
total operating income in the consolidated financial statement; 2. potential
misstatement of total profit ≥ 5% of the total profit in consolidated financial
statement; 3. potential misstatement of total assets ≥ 2% of the total assets in
consolidated statement.
Major defects: 1. 1% of the operating income in the consolidated financial Significant defects: the amount of loss accounted for 5%
statement ≤ potential misstatement of operating income ＜ 2% of the operating or more of the total profit in the audited consolidated
income in the consolidated financial statement; 2. 2% of the total profit in the financial statement of the previous year;
consolidated financial statement ≤ potential misstatement of the total profit < 5% Major defects: the amount of loss accounted for 2%
Quantitative of the total profit in the consolidated financial statement; 3. 1% of the total assets (included) to 5% of
standards in the consolidated financial statement ≤ potential misstatement of total assets < the total profit in the audited consolidated financial
2% of the total assets in the consolidated financial statement. statement of the previous year;
Common defects: 1. potential misstatement of operating income < 1% of the Common defects: the amount of loss is less than 2% of the
total operating income in the consolidated financial statement; 2. potential total profit in the audited consolidated financial statement
misstatement of total profit < 2% of the total profit in consolidated financial of the previous year
statement; 3. potential misstatement of total assets < 1% of the total assets in
consolidated statement.
When the potential misstatement caused by an internal control defect affects
multiple indexes, the nature of the defect shall be determined according to the
principle of which is lower.
Number of significant defects in financial report 0
Number of significant defects in non-financial report 0
Number of major defects in financial report 0
Number of major defects in non-financial report 0
99
Winner Medical
2. Internal control audit report or authentication report
Not applicable
XVII. Rectification of self-inspection problems in the special action on governance of listed companies
Not applicable.
100
Section V
Environmental Protection and
Social Responsibility
101
Winner Medical
I. Major environmental issues
Whether the listed company and its subsidiaries are key pollutant discharging units announced by environmental protection
authorities
√ Yes □ No
Environmental protection-related policies and industry standards
The Company strictly complies with environmental protection related laws and regulations in its daily production and operation,
including the Environmental Protection Law of the People’s Republic of China, the Law of People’s Republic of China on
Environmental Impact Assessment and Protection, the Law of the People’s Republic of China on the Prevention and Control of
Atmospheric Pollution, the Law of the People’s Republic of China on Prevention and Control of Environmental Pollution by Solid
Waste, the Water Pollution Prevention and Control Law of the People’s Republic of China, the Law of the People’s Republic of
China on the Prevention and Control of Environmental Noise Pollution, Regulations on Administration of Pollutant Discharge
Permits, and the Measures for the Management of Automatic Pollution Sources Monitoring and Guidelines for Automatic
Pollution Sources Monitoring and Management Technology of Hubei Province; and strictly implements relevant national
emission standards, including the Discharge Standards of Water Pollutants for Dyeing and Finishing of Textile Industry
(GB4287-2012), the Integrated Wastewater Discharge Standard (GB8978-1996), the Integrated Emission Standard of Air
Pollutants (GB16297-1996), the Emission Standard of Air Pollutants for Boiler (GB 13271-2014), the Emission Standards for
Odor Pollutants (GB14554-1993), and the Emission Standard for Industrial Enterprises Noise at Boundary (GB 12348-2008).
Administrative license for environmental protection
Project permit status
Branch Project name Approval unit Approval time Acceptance
Medical degreasing gauze series production line September 21, 2005 August 22, 2008
Chongyang County
Sterilization packaging and sterilization
Environmental March 29, 2013 June 26, 2014
Winner production line project
Protection Bureau
Medical Qingshan plant construction project November 18, 2015 March 01, 2016
(Chongyang) Xianning Environmental
Qingshan sewage treatment plant project March 01, 2017 March 20, 2017
Protection Bureau
Newly built 6390M2 workshop project Registration May 17, 2017 /
Annual output of 800 tons of degreased cotton Jiayu County March 20, 2013 September 20, 2014
project Environmental
Winner Protection Bureau
Winner Medical Purcotton construction project December 25, 2014 September 28, 2017
Medical
(Jiayu) Approved by Xianning
Environmental Impact Assessment Report of
Ecological Environment March 15, 2021 Under construction
Winner Industrial Park (Jiayu) Project
Bureau
Winner
Annual output of 90 million meters of medical Zhijiang Environmental
Medical December 19, 2014 October 14, 2015
gauze project Protection Bureau
(Yichang)
Phase I January 25, 2017; Phase II
Pure cotton spunlace non-woven fabric and
March 11, 2015 May 10, 2020; Phase III December
Winner medical dressing products production project
Tianmen Environmental 31, 2022
Medical
Medical dressing production line automation Protection Bureau
(Tianmen) January 19, 2016 March 23, 2018
upgrading project
Medical product sterilization center project January 17, 2022 December 31, 2022
102
Branch Project name Approval unit Approval time Acceptance
30 million meters/year medical gauze bleaching
October 18, 1999 December 14, 2001
and refining production line expansion project Jingmen Environmental
Reform and expansion project of gauze pads, Protection Bureau
September 23, 2003 August 03, 2005
gauze sheets and shrinkage bandages
Jingmen Dongbao
Winner Annual output of 1500t de-bleaching medical
District Environmental April 05, 2006 September 27, 2017
Medical gauze project
Protection Bureau
(Jingmen)
Jingmen Environmental
Winner Medical Purcotton construction project October 19, 2016 September 27, 2017
Protection Bureau
Expansion project of deblended gauze
Jingmen Ecological
production line (Purcotton phase II expansion December 24, 2020 Under construction
Environment Bureau
project)
Phase I of pure cotton spunlace non-woven
Hubei E.P.D. August 5, 2011 May 8, 2012;
fabric production project
Phase II of pure cotton spunlace non-woven
December 31, 2015 January 24, 2017
fabric production project
Winner New project of Purcotton distribution center June 27, 2016 October 10, 2018
Medical Huanggang
Boiler remodeling project January 29, 2018 November 14, 2019
(Huanggang) Environmental
Foam roll production line project (expansion) Protection Bureau February 05, 2018 October 08, 2018
High-end wound dressing production line
November 06, 2018 Construction has not started yet
construction project
Medical protective products renovation project July 20, 2020 October 19, 2021
Hubei Winner Medical Co., Ltd. cotton spun
Phase I January 18, 2020; Phase II
laced nonwovens and products production Wuhan Xinzhou District July 12, 2017
Administration and June 13, 2023
project
Approval Bureau
R&D Center construction project December 24, 2018 Construction has not started yet
Wuhan Environmental Phase I May 15, 2020; Phase II
New electron accelerator irradiator project January 15, 2018
Winner Protection Bureau November 19, 2021
Medical Xinzhou District
(Wuhan) Medical protective equipment renovation project Administrative May 07, 2021 Under construction
Approval Bureau
Winner Medical phase II expansion project Administrative June 21, 2022 Under construction
Approval Bureau of
Innovation research institute construction project Wuhan Ecological August 09, 2022 June 13, 2023
Environment Bureau
Pingshan Songze Industrial Park New Project of
Winner Shenzhen Branch of Winner Medical Co., Ltd. Shenzhen Ecological November 26, 2021 March 18, 2022
Medical Environment Bureau
(Shenzhen) Expansion Project of Shenzhen Branch of Pingshan Administration
August 11, 2023 December 01, 2023
Winner Medical Co., Ltd.
Administrative
Expansion and Technical Transformation Project
Approval Bureau of December 30, 2020 March 2022
of Medical Glove Production Line Capacity
Winner Guilin City
Guilin Annual output of 200 million pairs of
Guilin Ecological
TPU-covered medical gloves, automation May 15, 2023 Under construction
Environment Bureau
upgrading and energy saving retrofit project
103
Winner Medical
Sewage discharge procedures:
All subsidiaries of the Company have applied for discharge permits in accordance with relevant technical specifications, including
Technical Specifications for the Application and Issuance of Pollutant Permit - General Rules (HJ942-2018), Technical
Specifications for the Application and Issuance of Pollutant Permit - Textile and Dyeing Industry (HJ 861-2017), Technical
Specifications for the Application and Issuance of Pollutant Permit - Boiler (HJ953-2018), Technical Specifications for the
Application and Issuance of Pollutant Permit - General Wastewater Treating Process (HJ1120-2020), Self-monitoring
Technology Guidelines for Pollution Sources - General Rules (HJ 819-2017), Technical Specifications for Environmental
Management Ledger and Emission Permit Implementation Report for Pollution Sources - General Rules (Trial) (HJ944-2018),
Self-monitoring Technology Guidelines for Pollution Sources - Textile and Dyeing Industry (HJ 879-2017), and Self-monitoring
Technology Guidelines for Pollution Sources - Thermal Power Generation and Boiler (HJ 820-2017).
The status of emission permits for each and subsidiary is as follows:
Subsidiaries Certificate type Certificate No. Validity Remark
Chongyang Pollutant
91421223732699160U003P August 12, 2023 - August 11, 2028
Plant I discharge permit
Chongyang Discharge
91421223732699160U001P April 28, 2020 - April 27, 2025
Plant II registration form
Chongyang Discharge
91421223732699160U002w April 28, 2020 - April 27, 2025
Plant III registration form
Winner
Pollutant
Medical 91421100767435675X001V September 22, 2023 - September 21, 2028
discharge permit
(Huanggang)
Winner
Pollutant
Medical 914212217261049092001V August 21, 2023 - August 20, 2028
discharge permit
(Jiayu)
Winner
Medical Pollutant
914212217261049092002P September 7, 2023 - September 6, 2028 Inactive
(Jiayu) - New discharge permit
Factory
Winner
Pollutant
Medical 914208006158216140001P August 27, 2023 - August 26, 2028
discharge permit
(Jingmen)
Winner
Pollutant
Medical 914290067261112368001P December 13, 2022-August 30, 2027
discharge permit
(Tianmen)
Winner
Pollutant
Medical 91420000MA48TD7BXB001V September 1, 2023 - August 31, 2028
discharge permit
(Wuhan)
Winner
Discharge
Medical 91420583706860379K001W April 30, 2020 - April 29, 2025
registration form
(Yichang)
Winner
Pollutant
Medical 91440300MA5GKGMX3Y001W November 8, 2023 - November 7, 2028
discharge permit
(Shenzhen)
Pollutant
Winner Guilin 914503008988813841001U March 24, 2022 - March 23, 2027
discharge permit
Winner
Discharge
Medical 91430723565949803B001X June 5, 2020 - June 4, 2025
registration form
(Hunan)
Longterm Discharge
91330500051340478U001Z May 29, 2020 - May 28, 2025
Medical registration form
104
Industry emission standards and details of pollutant emissions involved in production and operation activities
Category of Names of
Numbe
main main Distribut Pollutant
Emis r of Emission Emissions
Company or subsidiary pollutants pollutants ion of emission Total emissions
sion dischar concentratio Total emissions beyond
name and and discharg standards approved
mode ge n/intensity standards
characteristi characteristic e outlets implemented
outlets
c pollutants pollutants
Not
Boiler 6.2mg/m3, 20mg/m3,
Winner Medical Gaseous PM, SO2, NOX: 0.378T, NOX: 13.28T/a, SO2: exceeding
/ 1 discharg <3mg/m3, 50mg/m3,
(Chongyang) Co., Ltd. pollutants NOX SO2: 0.008T 3.32 T/a the
e outlet 136mg/m3 200mg/m3
standard
7.6,
Direc 6-9, 80mg/L, Not
PH, COD, Sewage 65mg/L,
Winner Medical Liquid t 20mg/L, COD: 14.53T, COD: 57.6T/a, NH3-N: exceeding
BOD, 1 discharg 18.4mg/L,
(Chongyang) Co., Ltd. pollutants disch 10mg/L, NH3-N: 0.26T 7.27 T/a the
NH3-N, SS e outlet 0.18mg/L,
arge 50mg/L standard
5mg/L
Not
Boiler 8.3mg/m3, 20mg/m3,
Winner Medical (Jiayu) Gaseous PM, SO2, NOX: 2.692T, NOX: unlicensed, SO2: exceeding
/ 1 discharg <3mg/m3, 50mg/m3,
Co., Ltd. pollutants NOX SO2: 0.078T unlicensed the
e outlet 87mg/m3 200mg/m3
standard
7.4,
Direc 6-9, 100mg/L, Not
PH, COD, Sewage 25mg/L,
Winner Medical (Jiayu) Liquid t 20mg/L, COD: 11.45T, COD: 44.7T/a, NH3-N: exceeding
BOD, 1 discharg 8.0mg/L,
Co., Ltd. pollutants disch 15mg/L, NH3-N : 0.534T 1.19T/a the
NH3-N, SS e outlet 0.323mg/L,
arge 70mg/L standard
9mg/L
1#2# 10.6/8.0mg/ Not
20mg/m3,
Winner Medical Gaseous PM, SO2, boiler m3, <3 NOX: 11.9T, NOX: 23.52T/a, SO2: exceeding
/ 2 50mg/m3,
(Huanggang) Co., Ltd. pollutants NOX discharg mg/m 3, SO2: 0.12T unlicensed the
200mg/m3
e outlet 93/87mg/m 3
standard
7.2,
Indir 6-9, 500mg/L, Not
PH, COD, Sewage 68mg/L,
Winner Medical Liquid ect 300mg/L, COD: 47.06T, COD: 78.5T/a, NH3-N: exceeding
BOD, 1 discharg 14.3mg/L,
(Huanggang) Co., Ltd. pollutants disch 45mg/L, NH3-N: 1.02T 7.85 T/a the
NH3-N, SS e outlet 2.78mg/L,
arge 400mg/L standard
22mg/L
Not
Boiler 2.8mg/m3, 20mg/m3,
Winner Medical Gaseous PM, SO2, NOX: 3.167T, NOX: 16.8764T/a, exceeding
/ 1 discharg <3mg/m3, 50mg/m3,
(Tianmen) Co., Ltd. pollutants NOX SO2: 0.107T SO2: 1.804T/a the
e outlet 104mg/m3 200mg/m3
standard
7.2,
Indir 6-9, 400mg/L, Not
PH, COD, Sewage 45mg/L,
Winner Medical Liquid ect 150mg/, COD: 12.09T COD: 62.573T/a, exceeding
BOD, 1 discharg 24.6mg/L,
(Tianmen) Co., Ltd. pollutants disch 30mg/L, NH3-N: 0.431T NH3-N: 6.2573T/ the
NH3-N, SS e outlet 0.83mg/L,
arge 250mg/L standard
20mg/L
Not
Winner Medical (Wuhan) Gaseous PM, SO2, exceeding
/ / / / / / No boiler, no license
Co., Ltd. pollutants NOX the
standard
105
Winner Medical
Category of Names of
Numbe Pollution
main main Distribu
Emiss r of Emission Solid waste Emissions
Company or subsidiary pollutants pollutants tion of Total emissions
ion dischar concentration/i emission Total emissions beyond
name and and discharg approved
mode ge ntensity standards standards
characteristi characteristic e outlets
outlets implemented
c pollutants pollutants
PH, COD, Indire
Sewage 7.4, 203mg/L, 6-9, 500mg/L, Not
Winner Medical Liquid BOD, ct COD: 32.51T, COD: 90.35T/a,
1 discharg 39.0mg/L, 300mg/L, exceeding
(Wuhan) Co., Ltd. pollutants NH3-N, discha NH3-N: 3.251T NH3-N: 9.04T/a
e outlet 1.1mg/L, 3 45mg/L, 64 the standard
chromaticity rge
Boiler 2.8mg/m3, <3 20mg/m3, Not
Winner Medical Gaseous PM, SO2, NOX: 1.51T, SO2: NOX: 10.83T/a, SO2:
/ 1 discharg mg/m3, 50mg/m3, exceeding
(Jingmen) Co., Ltd. pollutants NOX 0.107T 3.11T/a
e outlet 86mg/m3 150mg/m3 the standard
Indire 8.1, 43mg/L, 6-9, 200mg/L,
Sewage Not
Winner Medical Liquid PH, COD, ct 9.4mg/L, 50mg/L, COD: 9.3T, COD: 19.48T/a,
1 discharg exceeding
(Jingmen) Co., Ltd. pollutants BOD, discha 0.54mg/L, 20mg/L, NH3-N: 0.93T NH3-N: 1.95T/a
e outlet the standard
NH3-N, SS rge 12mg/L 100mg/L
Yichang Winner Boiler 20mg/m3, Decommiss
Gaseous PM, SO2,
Medical Textile Co., / 1 discharg / 50mg/m3, Unlicensed Unlicensed ioned in
pollutants NOX
Ltd. e outlet 150mg/m3 2023
Indire 7.6, 131mg/L, 6-9, 500mg/L,
Yichang Winner PH, COD, Sewage Not
Liquid ct 39.3mg/L, 300mg/L,
Medical Textile Co., BOD, 1 discharg Unlicensed Unlicensed exceeding
pollutants discha 12.5mg/L, 45mg/L,
Ltd. NH3-N, SS e outlet the standard
rge 45mg/L 400mg/L
Producti
Shenzhen Branch of on Not
Gaseous 2.86/0.9mg/m3 100 mg/m3, 80
Winner Medical Co., HCl, VOC / 2 exhaust Unlicensed Unlicensed exceeding
pollutants , 3/0.94mg/m3 mg/m3
Ltd. gas the standard
outlet
Indire 7.4, 54mg/L, 6-9, 300mg/L,
Sewage Not
Winner Guilin Latex Liquid PH, COD, ct 16mg/L, 80mg/L,
1 discharg Unlicensed Unlicensed exceeding
Co., Ltd. pollutants BOD, discha 4.2mg/L, 30mg/L,
e outlet the standard
NH3-N, SS rge 110mg/L 150mg/L
Indire
Sewage Not
Winner Medical Liquid Residual ct
1 discharg 0.2mg/L - Unlicensed Unlicensed exceeding
(Hunan) Co., Ltd. pollutants chlorine discha
e outlet the standard
rge
Indire
Zhejiang Longterm Sewage Not
Liquid PH, COD, ct 7.3, 300mg/L, 6-9, 500mg/L,
Medical Technology 1 discharg Unlicensed Unlicensed exceeding
pollutants NH3-N discha 0.195mg/L 45mg/L
Co., Ltd. e outlet the standard
rge
106
Processing of pollutants
(1) Winner Medical (Jiayu) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater mainly includes domestic sewage and production wastewater.
Domestic sewage (including canteen wastewater) is first treated in oil separation tank and septic tank, and then mixed with
production wastewater to enter the sewage treatment station in the plant. The sewage treatment station adopts “hydrolysis
acidification + biological contact oxidation method” for treatment, and then discharged from the drainage outlet through pipeline
after reaching the standard. The wastewater has been installed with on-line monitoring. The sewage treatment station passed the
environmental protection acceptance after completion of Environmental Protection Bureau of Jiayu County on September 28,
2017, implementing the limit value of Discharge Standards of Water Pollutants for Dyeing and Finishing of Textile Industry
(GB4287-2012). The sewage plant’s structure is concrete structure, with a service life of 20 years and environmental protection
equipment for 10 years.
Solid waste is mainly domestic waste of employees; impurities (cotton residue, cotton dust and cotton batting) generated in the
production process and cotton dust collected by dust removal equipment; the leftover materials produced in the slicing process;
sludge from sewage treatment station; the hazardous waste generated is chemical material packaging barrel. For general solid
wastes, disposal agreements are signed with disposal units; for hazardous wastes, disposal agreements are signed with qualified
disposal units.
(2) Winner Medical (Chongyang) Co., Ltd.
It is a key wastewater discharge enterprise. The wastewater of the project mainly includes domestic sewage, production
wastewater and experimental wastewater, etc. The production wastewater is discharged into the wastewater treatment station
(hydrolysis acidification + biological contact oxidation method), and the treatment reaches the standard; the experimental
wastewater is hazardous waste and has been entrusted to a third party company for treatment. The domestic sewage of the
employees and production wastewater generated by the enterprise are directly discharged into the sewage treatment plant and
discharged after reaching the standard. Online monitoring of wastewater has been installed, and the sewage station completed
independent acceptance on March 20, 2017, implementing the limit value of Discharge Standards of Water Pollutants for Dyeing
and Finishing of Textile Industry (GB4287-2012) The sewage plant’s structure is concrete structure, with a service life of 20 years
and environmental protection equipment for 10 years.
Solid waste mainly includes office and domestic waste of employees, dust, leftover materials and unqualified products produced
in production. For domestic waste and general solid waste, disposal agreements are signed with disposal units, and for hazardous
waste, entrustment agreements are signed with third parties.
(3) Yichang Winner Medical Textile Co., Ltd.:
No production wastewater discharge, domestic wastewater enters the municipal pipe network, and clean energy natural gas is used
as fuel. The gas boiler was decommissioned in 2022.
(4) Winner Medical (Tianmen) Co., Ltd.
It is a key wastewater discharge enterprise. The wastewater mainly comes from the production wastewater produced by the
degreasing and bleaching workshop and the domestic sewage in the plant area. The main pollutants are pH, COD, suspended
solids and BOD5. The production wastewater is discharged to the sewage treatment station (hydrolysis acidification + biological
contact oxidation method), and the treatment reaches the standard; domestic sewage enters the sewage treatment station and is
treated with the production wastewater. Online monitoring of wastewater has been installed, and the phase I project of the sewage
station completed independent acceptance on March 23, 2018, implementing the limit value of Discharge Standards of Water
Pollutants for Dyeing and Finishing of Textile Industry (GB4287-2012). The sewage plant’s structure is concrete structure, with a
service life of 20 years and environmental protection equipment for 10 years.
Treatment agreements are signed with disposal units for general solid waste and domestic waste. Hazardous solid waste is mainly
chemical material packaging barrels, which raw material suppliers recycle, and no hazardous waste is transferred for disposal.
107
Winner Medical
(5) Winner Medical (Jingmen) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewater and
domestic sewage. The production wastewater mainly comes from the scouring and bleaching process. The PH value of the
wastewater is obviously alkaline and the COD value is high, but there is no harmful poisonous substance in it. The wastewater is
discharged into the self-built sewage station, treated by “flocculation precipitation + hydrolysis acidification + biological contact
oxidation method + biological aerated filter”, and then discharged into the downstream municipal sewage plant. After simple
treatment in septic tank, domestic sewage will be treated in self-built sewage station. The sewage station has been built, online
wastewater monitoring has been installed, and the pollutant discharge permit has been obtained. It is to be accepted. It implements
the limit value of Discharge Standards of Water Pollutants for Dyeing and Finishing of Textile Industry (GB4287-2012). The
sewage plant’s structure is concrete structure, with a service life of 20 years and environmental protection equipment for 10 years.
For domestic waste and general solid wastes, disposal agreements are signed with disposal units, and for hazardous wastes,
transfer agreements are signed with third-party disposal units.
(6) Winner Medical (Huanggang) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewater and
domestic sewage. The wastewater mainly comes from spun lace forming process, degreasing / bleaching process and soft water
preparation process. Most of the wastewater from spun lace forming process is reused for production after being treated by water
treatment circulation system, while a small part of the wastewater are discharged into the self-built sewage station with that from
degreasing / bleaching process, and then discharged after being treated by “hydrolysis acidification + biological contact oxidation”
and reaching the standard. After simple treatment in septic tank, domestic sewage will be treated in self-built sewage station.
Online monitoring of wastewater has been installed, and the sewage station passed the environmental protection acceptance after
completion of Environmental Protection Bureau of Huanggang City on January 24, 2017, implementing the level III standard
limit in Table 4 of Integrated Wastewater Discharge Standard (GB8978-1996). The sewage plant’s structure is concrete structure,
with a service life of 20 years and environmental protection equipment for 10 years.
The solid wastes of the project include general solid wastes, other solid wastes and hazardous solid wastes. The general solid
wastes are mainly cotton impurities, leftover materials, defective products, boiler coal cinders, sludge from sewage treatment
facilities, etc. generated in the production process. Other solid wastes are domestic wastes generated from office and life. Among
them, cotton impurities, leftover materials and defective products are sold for comprehensive utilization; after the sludge is
dehydrated, it will be treated by the environmental sanitation department together with the domestic waste. Hazardous solid
wastes are mainly chemical waste packaging barrels, which raw material suppliers recycle, and the waste oil is stored in the plant
area, and delivered to qualified units for disposal after reaching the transportation volume.
(7) Winner Medical (Wuhan) Co., Ltd.
It is a key wastewater discharge enterprise. The project’s wastewater mainly includes preparation, spun laced, degreasing,
bleaching, domestic water, etc. The wastewater discharge of the project is 2126.93t/d after the completion of phase I, 4067.11t/d
after phase II, and 6004.5t/d after phase III. The wastewater undergoes treatment using the ‘hydrolysis acidification + anaerobic +
biological contact oxidation method.’ Online monitoring has been installed for the wastewater. The initial phase of the sewage
station completed its independent acceptance on January 7, 2020, while the second phase concluded in 2023. The independent
acceptance of the second phase project was finalized on June 13. The third-level standard limits outlined in Table 4 of the
Integrated Wastewater Discharge Standard (GB8978-1996) were implemented. The sewage plant’s structure is concrete structure,
with a service life of 20 years and environmental protection equipment for 10 years.
The solid wastes of the project are mainly divided into general solid wastes, other solid wastes and hazardous solid wastes.
Among them, cotton impurities, leftover materials, defective products and fiber dust are purchased and recycled, and sludge and
domestic waste are disposed by the environmental sanitation department.
According to the Standard for Pollution Control on Hazardous Waste Storage (GB 18597-2023), the temporary storage room of
hazardous waste shall be constructed and the hazardous waste shall be stored as required. Meanwhile, the daily management of
hazardous waste should be strengthened. Disposal agreements for all hazardous waste are signed with the qualified units.
108
(8) Shenzhen Branch of Winner Medical Co., Ltd.
After the production wastewater is collected, it should be entrusted to a qualified unit for treatment and will not be discharged. A
small amount of acidic waste gas and organic waste gas are discharged after spraying + activated carbon adsorption.
General solid waste mainly consists of waste packaging and stickers, which are collected and processed by specialized recycling
units. Hazardous waste mainly includes waste containers, waste activated carbon, biological waste, etc., which are temporarily
stored in hazardous waste storage rooms and are regularly entrusted to qualified units for centralized processing. Hazardous waste
is stored in accordance with the Standard for Pollution Control on Hazardous Waste Storage (GB18597-2023).
(9) Winner Guilin Latex Co., Ltd.
The wastewater of the project mainly includes mold cleaning wastewater, leaching wastewater, soaking wastewater and
equipment cleaning wastewater, and the production wastewater contains gum, insoluble coagulant and impurities in other raw and
auxiliary materials, which are pretreated and removed before entering the comprehensive wastewater treatment station in the plant.
The existing three-stage septic tank treats the domestic wastewater of employees and then enters the comprehensive sewage
treatment station together with the pretreated production wastewater. The station adopts an air flotation + filtration process and
discharges treated water into the municipal sewage treatment plant. The exhaust gas from compound preparation,
pre-vulcanization tank, latex parking tank, latex dipping drying and post-vulcanization is collected and discharged after treatment
by exhaust gas treatment system (water spray + dehumidification + activated carbon adsorption).
General industrial solid waste is waste rubber, unqualified products, waste packaging shall be taken up by the latex supplier for
regular recycling, sludge and domestic waste shall be taken up by the local sanitation department for unified cleaning and disposal.
Hazardous wastes are waste resin and waste activated carbon. They shall be collected centrally and entrusted to units with
corresponding hazardous waste treatment qualifications for disposal.
(10) Winner Medical (Hunan) Co., Ltd.
A small amount of production wastewater and domestic sewage is discharged, among which production wastewater mainly
includes cleaning wastewater, workshop cleaning wastewater, ethylene oxide exhaust absorption wastewater and pure water
preparation wastewater. The wastewater, including the cleaning wastewater and workshop cleaning wastewater treated by
sedimentation tank, the ethylene oxide exhaust absorption wastewater treated by adsorption method, and the canteen wastewater
pretreated by grease trap, will be discharged to septic tank for treatment, and to Li County Wastewater Treatment Plant for further
treatment through municipal pipeline network. The waste gas, including the Injection molding waste gas, organic waste gas
volatilized from printing process, and organic waste gas from bonding, will be collected and treated by lye spraying tower, and
then sent to the “UV photolysis + activated carbon adsorption device” for treatment. After treatment, the waste gas will be
discharged through a 15m exhaust pipe.
The general industrial solid waste consists of waste fabric and waste packaging materials, which are collected and recycled by the
material company for comprehensive purposes. Hazardous wastes are waste raw material drums, waste activated carbon, waste
mineral oil, waste UV photolysis lamps and waste adsorbent, which are collected centrally after classification and disposed of by
units entrusted with the corresponding hazardous waste treatment qualification.
(11) Zhejiang Longterm Medical Technology Co., Ltd.
Cleaning wastewater, concentrated water for pure water preparation and domestic sewage are discharged. The septic tank in the
factory pretreats domestic sewage, and then piped to Deqing Hengfeng Sewage Treatment Co., Ltd. for centralized treatment with
the concentrated water for pure water preparation and domestic sewage. Process exhaust gas is treated by one set of
photo-oxidation catalytic treatment equipment and then discharged through a 15m exhaust funnel. After the dust is processed by a
bag dust collector, the exhaust gas is discharged through a 15-meter-high exhaust pipe.
The solid wastes are mainly the waste from the daily life of employees and solid wastes from the canteen are disposed of by
sanitation department, the trimmings and defective products generated in the production process, waste packaging bags generated
from raw and auxiliary materials are sold to material recycling companies; hazardous wastes are waste activated carbon generated
in the process of waste gas treatment and ethylene oxide waste liquid generated in the process of sterilization, which is entrusted
to corresponding qualified companies for treatment.
109
Winner Medical
Emergency plan for environmental emergencies
In order to further improve the emergency management system of environmental pollution accidents, improve the ability to deal
with major environmental pollution accidents to ensure the safety of production and operation, improve the ability of employees
to deal with accidents, standardize the Company’s emergency management and respond emergency procedures, and implement
emergency rescue work in a timely and effective manner, prevent and reduce the occurrence of accidents to the greatest extent,
Winner Medical Co., Ltd. and its subsidiaries have set up an environmental accident emergency leading group and formulated the
Emergency Plan for Environmental Accidents.
Environmental self-monitoring scheme
All companies have applied for discharge permits, of which the self-monitoring programs are formulated in accordance with the
relevant industry norms. Pollutants are mainly detected through a combination of manual laboratory tests + commissioned
monitoring + online monitoring. The key sewage subsidiaries involved in the production of wastewater discharge are installed
with online monitoring systems, which are networked with government authorities for real-time monitoring, and the online
monitoring equipment is entrusted to a professional third-party company for operation and maintenance. Commissioned
monitoring and manual monitoring projects are implemented according to the requirements of the monitoring program, and the
monitoring results are released in a timely manner on the provincial pollutant platform. Self-monitoring scheme of each company
is made public on the national pollutant discharge permit management platform.
Investment in environmental treatment and protection and related information on payment of environmental protection tax
In 2023, the Company and its subsidiaries collectively disbursed 133,000 yuan for environmental protection taxes.
Measures taken to reduce its carbon emissions during the reporting period and their effects
√Applicable □ Not applicable
The Company has been actively engaged in energy-saving and consumption reduction activities by taking measures such as
switching to high-efficiency motors, implementing waste heat recovery, and optimizing pipelines. During the reporting period, a
total of 8 million yuan was saved in energy costs.
Administrative penalties imposed due to environmental issues during the reporting period
Company or subsidiary Reasons for Impacts on the production and operation Rectification measures
Violations Punishment
name penalty of listed companies of the Company
N/A N/A N/A N/A N/A N/A
Other environmental information that should be disclosed
None.
Other information related to environmental protection
None
110
The Company needs to comply with the disclosure requirements of the “Textile and Apparel Business” stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
Information on environmental accidents of listed companies
None.
II. Social responsibility
We will always prioritize “quality over profit, brand over speed, and social responsibility over corporate value”. We are
meticulous, responsible, resilient, and committed to fulfilling our social obligations. We believe that by prioritizing the symbiosis
and co-prosperity of corporate and social values, persisting in and innovating within the realm of social responsibility, and
crafting environmentally friendly products endorsed by society, we can seize broader and more diverse innovation opportunities
and advance further along the path of sustainable development.
1. Products and customer responsibilities
In terms of scientific research and innovation, the Company actively drives the implementation of research findings, accelerating
the efficiency of scientific research and technology transformation. Numerous projects in medical dressings and consumer goods
have achieved technological breakthroughs, enabling mass production and marketing. New foam dressing products have been
added to the Shenzhen standard certification catalog for the medical device industry. Furthermore, Purcotton’s gauze bath towels
have earned the industry’s first certification for being free of added softeners, ensuring consumers receive higher quality cotton
products.
In quality management, the Company upholds the principle of “quality over profit” and places significant emphasis on ensuring
product quality. Through the “Winner Medical (Wuhan) Medical Textile Intelligent Manufacturing Demonstration Factory”
project, Winner Medical was successfully selected as one of the intelligent manufacturing demonstration factories listed by the
Ministry of Industry and Information Technology in 2023. Additionally, the quality management center achieved ISO9001 quality
management system certification, and Cotton Era was honored as a “Longhua District Quality Production Demonstration
Enterprise”.
In terms of customer service, we adhere to a customer-centered approach, continually innovating and enhancing service models.
Initiatives such as the “Voice of Customers” and “Mystery Shopper” projects are innovatively designed to enhance customer
satisfaction. Our goal is to share the comfort and beauty of cotton with customers while ensuring their peace of mind.
In terms of production safety, the Company continually enhances the production safety management mechanism. It actively
conducts investigations into potential safety hazards, assesses risks, and implements controls to ensure overall production safety is
manageable. Simultaneously, it focuses on preventing internal and external information security risks to safeguard internal and
external information security. In 2023, the Company incurred no administrative penalties for production safety, and there were no
major production safety accidents.
2. Environment responsibility
Aligned with the goal of “achieving carbon peak by 2027 and carbon neutrality by 2050”, the Company is driving the
development of a green and low-carbon demonstration project through a comprehensive approach spanning production to
consumption. On the production side, Winner Medical (Wuhan) Co., Ltd. was awarded the title of “Green Factory”, recognizing
its expertise in systematic, intelligent energy-saving, and environmental management. On the consumer side, the Company has
implemented the “Zero Plastic Program” for green packaging, distributing a total of 48.05 million non-woven environmental
shopping bags to replace plastic bags, thus contributing to a better environment.
3. Responsibilities of employees and communities
The Company always puts its employees first, continually enhancing their benefits and working environment. It strengthens
employee training programs and offers diverse career development paths to help them realize their potential. Additionally, it
prioritizes employees’ physical and mental health, fostering cohesion and a sense of belonging through various cultural, sports
activities, and health lectures.
111
Winner Medical
The Company actively engages in various philanthropic activities, aiming to provide medical assistance and health education
services to local communities. In December 2023, following the earthquake in Jishishan County, Gansu Province, we partnered
with the Beijing Public Health Foundation to donate supplies worth over one million yuan. These included first aid kits, medical
surgical masks, surgical gloves, cotton sanitary wipes, Fengrou cotton thermal storage sets, and more. Additionally, our brands
Purcotton and Nice Princess promptly initiated disaster relief efforts, collaborating with the China Women’s Development
Foundation to donate 40,000 pairs of pajamas and 800,000 sanitary napkins to the earthquake-affected area. Nearly two million
yuan was allocated to support medical institutions, affected individuals, and disaster relief personnel in the earthquake-stricken
regions. Furthermore, the Company collaborates with charitable organizations to organize donation activities for the elderly,
demonstrating corporate social responsibility through tangible actions.
III. Consolidating and expanding the achievements of poverty alleviation and rural revitalization
Responding actively to the national initiative, we leverage our resource advantages to contribute to rural revitalization. In 2023,
the Company participated in the “Guangdong Expo Rural Classroom” on-campus event, providing active support for educational
development in Luoba Town and promoting cultural creativity to aid rural revitalization efforts. We donated 171 computer
supplies to the Guangdong Provincial Education Foundation, establishing a computer laboratory to enable children in
impoverished mountainous areas to utilize computers for learning, broadening their horizons, and acquiring practical computer
operation skills.
112
Section VI
Important Matters
113
Winner Medical
I. Performance in fulfilling commitments
1. Commitments fulfilled within and not fulfilled by the end of the reporting period by the Company’s actual controller,
shareholders, related parties, acquirer and other commitment parties
√Applicable □ Not applicable
Time limit
Degree of
Commitment Commitment Commitme for
Commitment party Commitment content performan
reason type nt time acceptanc
ce
e
Within 36 months from the date of listing and trading
Commitment of the Company’s shares, the Company shall not
Completio
made at the transfer or entrust others to manage the shares 2023
Winner Group, Li Jianquan, September n of
time of IPO IPO lock-up directly or indirectly held by the Company that have September
Xie Ping, Li Xiaoyuan 17, 2020 performan
or been issued before the initial public offering of the 17th
ce
refinancing Company’s shares, nor shall the Company
repurchase such shares
The Company guarantees that it will abide by the
relevant laws, regulations, departmental rules and
normative documents in force at that time on
Winner Group, Li Jianquan, reducing shareholders’ shares of the listed Company.
Xiamen Leyuan Investment When reducing the shares of the Company that held
Long-term In
Partnership (L.P.), Beijing by the enterprise issued prior to the IPO, the September
IPO reduction performan performan
Sequoia Xinyuan Equity enterprise will inform the Company in advance of the 17, 2020
ce ce
Investment Center (Limited reduction intention and the number of shares to be
Partnership) reduced in written form, The Company shall make an
announcement three trading days in advance, except
when the shares of the Company held by the
enterprise are less than 5%.
There is no fraudulent issuance in the process of this
public offering and listing on GEM; if the securities
regulatory authority, the stock exchange or the
judicial authority determines that the Company has
fraudulent issuance behavior, which has a significant
and substantial impact on judging whether the issuer
Share meets the issuance conditions stipulated by law, the
repurchase Company will be punished by the securities Long-term In
Winner Medical, Winner September
upon IPO regulatory authority, the stock exchange or the performan performan
Group, Li Jianquan 17, 2020
fraudulent judicial authority Within 5 working days from the ce ce
listing date when the illegal facts are finally confirmed by
the stock exchange or the judicial authority and other
competent authority, the stock repurchase plan shall
be formulated in accordance with the relevant laws
and regulations and the Articles of Association, and
all the new shares issued and listed shall be
repurchased
Winner Medical, Winner
Group, Li Jianquan, Fang Commitment
Xiuyuan, Xu Xiaodan, Liu to assume The prospectus has no false records, misleading
Long-term In
Weiwei, Wang Ying, Chen compensation statements or major omissions. We assume September
performan performan
Huixuan, Yin Wenling, Bi liability individual and joint legal liabilities for its 17, 2020
ce ce
Qun, Zhou Xiaoxiong, according to authenticity, accuracy and integrity.
Liang Wenzhao, Guo law
Zhenwei, Ye Yangjing
114
Time limit
Degree of
Commitment Commitment Commitme for
Commitment party Commitment content performan
reason type nt time acceptanc
ce
e
Suppose the stock price of the Company is lower
than the net assets per share within three years after
listing. In that case, the Company and the relevant
responsible parties can choose to implement the
following measures separately or comprehensively to
stabilize the stock price according to the actual
Winner Medical, Winner Commitment situation of the Company and the stock market when
Completio
Group, Li Jianquan, Fang to stabilize the the preconditions for starting the measures to 2023
September n of
Xiuyuan, Xu Xiaodan, Company’s stabilize the stock price are met: 1. The Company September
17, 2020 performan
Chen Huixuan, Yin share price in repurchases the shares; 2. The controlling 17 th
ce
Wenling IPO shareholders and actual controllers increase their
holdings of the Company’s shares; 3.
Non-independent directors and senior managers who
hold posts and receive remuneration in the Company
increase their holdings of the Company’s shares; 4.
Laws, administrative regulations, normative
documents and other methods approved by CSRC.
In order to reduce the impact of the diluted
immediate return of this issuance, we promise to take
the following measures: (I) accelerate the investment
progress of the investment projects with raised funds
Measures and
and strive to achieve the expected benefits of the
commitments
project as soon as possible; (II) Strengthen the Long-term In
to make up for September
Winner Medical supervision of investment projects with raised funds performan performan
the diluted 17, 2020
to ensure the reasonable and legal use of raised ce ce
immediate
funds; (III) Strengthen the operating management
return
and internal control, improve the operating efficiency
and profitability; (IV) Ensure a sustainable and stable
profit distribution system and strengthen the return
mechanism for investors
I/Our Company shall not interfere in the Company’s
operation and management activities beyond my/our
authority, encroach on the Company’s interests,
transfer interests to other units or individuals free of
charge or under unfair conditions, damage the
Measures and
Company’s interests in other ways, or use the
commitments
Company’s assets to engage in investment and Long-term In
to make up for September
Winner Group, Li Jianquan consumption activities unrelated to my/our performan performan
the diluted 17, 2020
performance of duties. I/Our Company promise to ce ce
immediate
fully, completely and timely perform measures of
return
making up for return established by the Company
and any commitment on measures of making up for
return. If I / our Company violates such commitment,
I / our Company is willing to bear corresponding
legal responsibility according to law
1. Shall not transfer interests to other units or
individuals free of charge or under unfair conditions,
or damage the Company’s interests in other ways. 2.
Restrict my duty consumption behavior as a director,
supervisor and senior manager of the Company. 3.
Shall not use the Company’s assets to engage in
investment and consumption activities unrelated to
my performance of the duties of a director,
Measures and supervisor and senior manager. 4. Actively promote
Fang Xiuyuan, Xu Xiaodan,
commitments the improvement of the Company’s salary system. 5.
Chen Huixuan, Yin 2020 Long-term In
to make up for When introducing the Company’s equity incentive
Wenling, Bi Qun, Zhou September performan performan
the diluted scheme (if any), the vesting conditions of equity
Xiaoxiong, Liang Wenzhao, 17th ce ce
immediate incentive shall be linked with the implementation of
Guo Zhenwei,
return the Company’s measures to make up for the return.
6. I promise that I will issue supplementary
commitments in accordance with the latest
provisions of the CSRC, and actively promote the
Company to make new provisions. 7. I promise to
fully, completely and timely perform measures of
making up for return established by the Company
and any commitment I have made to make up for
return.
115
Winner Medical
Time limit
Degree of
Commitment Commitment Commitme for
Commitment party Commitment content performan
reason type nt time acceptanc
ce
e
In order to better protect the legitimate rights and
interests of investors, the Company deliberated and
passed the revised Articles of Association (Draft) at
the second extraordinary general meeting of
shareholders in 2020. The Company determines the
dividend return plan for the next three years: on the
Commitment
premise that the net profit attributable to the Long-term In
on profit September
Winner Medical shareholders of the parent company is positive in the performan performan
distribution 17, 2020
current year, the Company will make profit ce ce
policy
distribution at least once a year, and the board of
directors may propose the Company to make interim
profit distribution according to the Company’s profit
and capital demand. The Company shall prioritize
cash dividend for profit distribution when it is under
the conditions of cash dividend.
1. As of the date of this letter of commitment, our
Company / I do not and will not engage in or
participate in the same or similar business and
activities as the Company’s main business in any
form, and will not engage in or participate in the
same or similar business and activities as the
Company’s main business through investment in
other companies. 2. Our Company / I undertake not
to engage in or participate in any business or
activities that are the same or similar to the
Company’s main business. 3. If the Company further
Commitment expands its business scope on the basis of its existing
Long-term In
on avoiding business, and other enterprises under our Company’s September
Winner Group, Li Jianquan performan performan
horizontal / my control at that time have already produced and 17, 2020
ce ce
competition operated the business, the other enterprises under our
Company’s / my control at that time shall sell the
relevant business, and the Company has the priority
to purchase the relevant business under the same
commercial conditions. 4. In case that the Company
further expands its business scope based on its
existing business scope, and the other enterprises
controlled by the Company/I at that time have not yet
carried out production or operation in this regard, the
other enterprises controlled by the Company/I at that
time will not engage in the same or similar business
and activities as such new business of the Company.
The social security and housing provident fund
management departments of the Company and its
major subsidiaries have issued the Certificate,
confirming that from January 1, 2017 to December
31, 2019, the Company and its subsidiaries have no
records of administrative punishment for violating
laws and regulations related to labor, social security
and housing provident fund. If Winner Medical and
Commitment its subsidiaries are required to make up the social
to indemnity insurance premium or housing provident fund that
for should be paid by Winner Medical and its Long-term In
September
Winner Group, Li Jianquan the recovery of subsidiaries for their employees or claimed by their performan performan
17, 2020
social security employees, or if litigation, arbitration and ce ce
accumulation administrative punishment from relevant
fund administrative departments occur therefrom, our
Company / I shall unconditionally bear the full
amount of the fees that should be made up and bear
the corresponding liability for compensation, to
ensure that Winner Medical and its subsidiaries will
not suffer any losses as a result. The controlling
shareholders and the Company’s actual controller, Li
Jianquan, are jointly and severally liable to each
other
116
Time limit
Degree of
Commitment Commitment Commitme for
Commitment party Commitment content performan
reason type nt time acceptanc
ce
e
The land and real estate authorities of Yichang
Winner issued a certificate to confirm that the
relevant subsidiaries did not violate laws and rules
during the reporting period; moreover, the total area
of the two properties accounts for a small proportion
of the total area of the Company’s and its
Compensation subsidiaries’ own properties. Even if there is a risk of
commitment demolition, it will not have a significant adverse
Long-term In
for demolition impact on the production and operation of the September
Winner Group, Li Jianquan performan performan
of Yichang Company and its subsidiaries. In response to the 17, 2020
ce ce
Winner’s relocation risk of the two properties, the controlling
properties shareholders and the actual controller of the issuer
commit: “if such properties are required to be
demolished within a time limit by the competent
government department, the controlling shareholders
and the actual controller agree to timely,
unconditionally and fully compensate all losses
caused to the Company.”
If we fail to fulfill the relevant commitments
disclosed in the prospectus, we will publicly explain
the specific reasons for our failure to fulfill the
commitments in the general meeting of shareholders
and the information disclosure media designated by
the CSRC, and apologize to all shareholders and
public investors. If we fail to fulfill the relevant
public commitments, the proceeds will belong to the
Company. If we cause losses to the Company or its
shareholders or other investors due to our failure to
fulfill the relevant public commitments, we will
compensate the relevant losses to the Company or its
shareholders or other investors in accordance with
the law. At the same time, we shall not transfer the
Winner Medical, Winner shares (if any) of the issuer directly or indirectly held
Group, Li Jianquan, Fang by us during the period of assuming the
Restraint
Xiuyuan, Xu Xiaodan, Liu compensation above liability. If we fail to bear the
measures for Long-term In
Weiwei, Wang Ying, Chen above compensation liability, we will stop receiving September
IPO failure to performan performan
Huixuan, Yin Wenling, Bi salary (if any) within 10 days after the occurrence of 17, 2020
perform the ce ce
Qun, Zhou Xiaoxiong, the above matters until I fulfill the relevant public
contract
Liang Wenzhao, Guo commitments. If we fail to fulfill, have been unable
Zhenwei, Ye Yangjing to fulfill or have been unable to fulfill our
commitments on time due to objective reasons
beyond our control, such as changes of relevant laws
and regulations, policy, natural disasters and other
force majeure, we will take the following measures:
(1) timely and fully disclose the specific reasons why
we fail to fulfill, have been unable to fulfill or have
been unable to fulfill our commitments on time; (2)
Put forward supplementary commitments or
alternative commitments to the Company’s investors
(relevant commitments shall be subject to relevant
approval procedures in accordance with laws,
regulations and Articles of Association), so as to
protect the rights and interests of investors as far as
possible
Within 12 months from the date when the repurchase
plan was reviewed and approved at the 19th meeting
In
of the third board of directors on January 29, 2024, January 29, Within 12
Others Winner Medical Share buyback performan
the Company’s shares will be repurchased at a price 2024 months
ce
not exceeding 46 yuan per share (inclusive) of 100
million yuan to 2 billion yuan.
A total of 3.15 million yuan to 6.3 million yuan
Fang Xiuyuan, Xu Xiaodan, In
Share holdings worth of Company shares will be added within 6 January 30,
Liu Hua, Zhang Li, Chen 6 months performan
increase months from the announcement of the shareholding 2024
Huixuan ce
increase plan.
117
Winner Medical
Time limit
Degree of
Commitment Commitment Commitme for
Commitment party Commitment content performan
reason type nt time acceptanc
ce
e
Based on its confidence in the long-term
development trends of both domestic and foreign
medical and consumer industries, as well as its
recognition of the value of Wenwen Medical and its
strategic vision, Winner Group voluntarily
committed to extending the lock-up period for its
shares of Wenwen Medical from September 16,
In
Restricted sale 2023, to September 16, 2024. Throughout the sales August 28, September
Winner Group performan
of shares restriction period, Winner Group shall refrain from 2023 16, 2024
ce
transferring or delegating the management of shares
held by Winner Medical, and Winner Medical will
not engage in repurchasing said shares. Moreover,
any shares acquired by Winner Group through share
transfers, bonus shares, or allotments by Winner
Medical during this period will also be subject to the
aforementioned sales restriction requirements.
Whether the commitment is fulfilled on time Yes
If the commitment surpasses the deadline without fulfillment, it’s crucial to specify the reasons for non-completion and outline N/A
the next steps of the work plan
2. In case the Company’s asset or project saw earning expectation, and the term of the earning expectation still covers
the reporting period, the Company shall make a statement about the asset or project fulfilling the original expectation and
the reasons thereof
□ Applicable √ Not applicable
II. Non-operating occupation of funds of listed companies by controlling shareholders and their related
parties
□ Applicable √ Not applicable
No non-operating occupation of funds of listed companies by controlling shareholders and their related parties during the
reporting period.
III. Illegal external guarantee
□ Applicable √ Not applicable
No illegal external guarantee of the Company during the reporting period.
IV. Statement of the board of directors on the latest “non-standard audit report”
□ Applicable √ Not applicable
118
V. Statement of the board of directors, the board of supervisors and independent directors (if any) on
the “non-standard audit report” of the accounting firm during the reporting period
□ Applicable √ Not applicable
VI. Statement of the board of directors on accounting policy, accounting estimate change or significant
accounting error correction in the reporting period
□ Applicable √ Not applicable
VII. Explanation of changes in the scope of combined financial statements when compared with financial
statements of the previous fiscal year
√Applicable □ Not applicable
For details, please refer to “Section X. Financial Report - Ⅸ. Consolidation scope changes”
VIII. Appointment of and dismissal of accounting firms
Accounting firm currently appointed
Name of domestic accounting firm BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP
Remuneration of domestic accounting firm (10,000 yuan) 280
Continuous years of audit services of domestic accounting firm 10
Name of certified public accountant of domestic accounting firm Cheng Jin, Wu Lihong
Continuous years of audit services provided by certified public
3
accountants of domestic accounting firm
Has the accounting firm been changed?
□Yes √ No
Engagement of internal control audit accounting firm, financial consultant or sponsor
□ Applicable √ Not applicable
119
Winner Medical
IX. Delisting confronted upon disclosure of the annual report
□ Applicable √ Not applicable
X. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization of the Company during the reporting period.
XI. Major litigation, arbitration matters
√Applicable □ Not applicable
Whether
Amount to form
Basic information Implementation of Date of Disclo
involved estimate Trial result and influence of
of litigation Progress of litigation (arbitration) litigation (arbitration) disclosu sure
(10,000 d litigation (arbitration)
(arbitration) judgment re index
yuan) liabilitie
s
As of the disclosure date
of the report, the
The ruling of Case No.: (2019)
Company has received the
Jiangxi National Arbitration
land transfer deposit of 3
Letter No. 095 confirmed that the
million yuan and
original Investment Agreement
compensation of 330
was terminated, and the People’s
The People’s Government of Zijin County has million yuan returned and
Winner Medical v. Government of Zijin County had
not yet paid the full amount of compensation paid by the People’s
People’s to return 3 million yuan of land
to the Company in accordance with the award, Government of Zijin
Government of transfer deposit to the Company,
and the Company has applied to the Heyuan County. There remains
Zijin County, and compensate for economic
City Intermediate People’s Court for outstanding compensation
arbitration case of losses of 550 million yuan as well
enforcement and has been accepted by the of 220 million yuan,
contract dispute 55,565.53 No as the lawyer’s fees of 500,000
court. lawyer fees of 500,000
[Case No.: (2019) yuan and legal cost of 2.15532
On December 28, 2023, the court terminated yuan, and arbitration fees
GGZZ No. 095, million yuan. The land,
enforcement due to lack of available property of 2.1553 million yuan yet
(2022) Yue 16 above-ground buildings,
for enforcement. Currently, the process to be paid. The Company
Execution No. equipment and facilities and
involves filing a motion to terminate the has handed over the
299] relevant supporting materials of
enforcement objection project land,
Heyuan Winner investment and
above-ground buildings,
construction project were handed
equipment and facilities
over to the People’s Government
and relevant supporting
of Zijin County. There will be no
materials to the People’s
adverse impact on the Company
Government of Zijin
County.
In June, 2020, the Reexamination and
Invalidation Department of the Patent Office
of China National Intellectual Property
Winner Medical
Administration issued the Decision on If the lawsuit does not support the
(Tianmen),
Examination of Invalidation Request, which plaintiff’s claim, the patent is
Shenzhen
decided to declare the patent right of finally found to be invalid. The
Purcotton, Winner
“production method of cotton non-woven reason for the patent invalidation
Medical
medical dressings” (Patent No. decision is not that the Company
(Huanggang) v.
ZL200510033147.1, valid until February 6, and / or the patent infringes the
China National 0 No N/A
2025) invalid. In August, 2020, Purcotton, rights of others. Therefore, the
Intellectual
Winner Medical (Tianmen), and Winner Company can still use the
Property
Medical (Huanggang) filed a lawsuit to Beijing technology and will not have a
Administration,
Intellectual Property Court in accordance with significant adverse impact on the
administrative
the provisions of the Patent Law for revocation normal production and operation
dispute case of
of the patent invalidation decision. The court of the Company
patent invalidation
of the first instance and the Court of Second
instance subsequently rejected the plaintiff’s
request.
120
Whether
Amount to form
Basic information Implementation of Date of Disclo
involved estimate Trial result and influence of
of litigation Progress of litigation (arbitration) litigation (arbitration) disclosu sure
(10,000 d litigation (arbitration)
(arbitration) judgment re index
yuan) liabilitie
s
Summary of other
small lawsuits in
which the
Company or its In progress according to the
No significant impacts on the Executed according to
subsidiaries are litigation/arbitration process, some cases have
4,718.98 No Company’s production and litigation/arbitration
plaintiffs that do not yet been concluded, and the concluded
operation process
not meet the cases are executed according to the process
criteria for
disclosure of
material litigation
Summary of other
small lawsuits in
which the
Company or its In progress according to the
No significant impacts on the Executed according to
subsidiaries are litigation/arbitration process, some cases have
200.63 No Company’s production and litigation/arbitration
defendants that do not yet been concluded, and the concluded
operation process
not meet the cases are executed according to the process
criteria for
disclosure of
material litigation
XII. Punishment and rectification
□ Applicable √ Not applicable
No punishment or rectification of the Company during the reporting period.
XIII. Credit conditions of the Company, its controlling shareholders and actual controllers
□ Applicable √ Not applicable
XIV. Major related transactions
1. Connected transactions related to daily operation
□ Applicable √ Not applicable
There were no connected transactions related to the daily operation of the Company during the reporting period.
2. Connected transactions arising from the acquisition or sale of assets or equity
□ Applicable √ Not applicable
No connected transactions arising from the acquisition or sale of assets or equity of the Company during the reporting period.
121
Winner Medical
3. Connected transaction of joint foreign investments
□ Applicable √ Not applicable
No connected transactions of joint foreign investment of the Company during the reporting period.
4. Related credit and debt transactions
□ Applicable √ Not applicable
No related claims and debts of the Company during the reporting period.
5. Transactions with related finance companies
□ Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the Company and the finance company with which it is
affiliated and the related parties.
6. Transactions between finance companies controlled by the Company and related parties
□ Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the finance companies controlled by the Company and related
parties.
7. Other major connected transactions
□ Applicable √ Not applicable
No other major connected transactions of the Company during the reporting period.
XV. Major contracts and their performance
1. Trusteeship, contracting and lease
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship of the Company during the reporting period.
122
(2) Contracting
□ Applicable √ Not applicable
No contracting of the Company during the reporting period.
(3) Lease
□ Applicable √ Not applicable
No leasing of the Company during the reporting period.
2. Major guarantee
□ Applicable √ Not applicable
No major guarantees of the Company during the reporting period.
3. Entrusted cash asset management
(1) Information of entrusted financial management
√Applicable □ Not applicable
Overview of entrusted financial management during the reporting period
Unit: ‘0,000 yuan
Amount incurred in The amount of impairment
Source of funds for entrusted Outstanding Overdue amount not
Specific type entrusted financial for overdue financial
financial management balance recovered
management management
Bank financial
Self-owned funds 297,274.5 161,600 0 0
products
Bank financial
Proceeds 103,650 5,800 0 0
products
Trust financial
Self-owned funds 110,000 110,000 0 0
products
Total 510,924.5 277,400 0 0
Specific circumstance of high-risk entrusted financing with significant single amount or with low security and poor liquidity
□ Applicable √ Not applicable
The entrusted financing is expected not to recover the principal or has other circumstances that may cause impairment
□ Applicable √ Not applicable
123
Winner Medical
(2) Information of entrusted loans
□ Applicable √ Not applicable
The Company had no entrusted loan during the reporting period.
4. Other major contracts
√Applicable □ Not applicable
Whethe
r the Performan
Appraised
Book value of Name of Appraisal Transact paymen Affilia ce as of
Name of the Name of the value of
Date of contract assets appraisal reference ion price ts arise ted the Date of
Company to the other party to Contract object contract assets Pricing principle Disclosure index
contract (10,000 yuan) (if institution (if date (if (10,000 from relatio reporting disclosure
contract the contract (10,000 yuan)
applicable) any) any) yuan) related nship period’s
(if applicable)
transact end
ions
CNINFO.com Announcement on the
Shenzhen Land and Based on
Shenzhen Xingda Signing of Agreements on Relocation
Xingda Real buildings/structures valuation reports Transactio
Winner Medical July 10, Real Estate June 30, June 14, Compensation and Resettlement for the
Estate (including 160,100.99 from accredited No N/A n
Co., Ltd. 2023 Development 2023 2023 Urban Renewal Project of Winner
Development appurtenances) within appraisal suspended
Co., Ltd. Industrial Park (Announcement No.
Co., Ltd. Winner Industrial Park organizations
2023-029)
XVI. Description of other important events
√Applicable □ Not applicable
The Longhua District Government of Shenzhen approved a special plan for the urban renewal project of the Urban Renewal
Project of Winner Industrial Park in May 2023. The plan outlined a total area of 138,915 square meters, with 88,450 square
meters designated for residential use, 39,740 square meters for commercial, office, and hotel buildings, and 10,725 square meters
for public facilities (including underground structures). Subsequently, the Company convened the 14th meeting of the third board
of directors on June 12, 2023, and the first extraordinary shareholders meeting of 2023 on July 7, 2023, to scrutinize and endorse
the “Proposal on Executing Relevant Agreements on Relocation Compensation and Resettlement for the Urban Renewal Project
of Winner Industrial Park”. The Company intends to collaborate with Shenzhen Xingda Real Estate Development Co., Ltd.
(“Xingda Company”), a proficient and experienced development operator under the Galaxy Group, for an urban renewal,
relocation, compensation, and resettlement agreement in Shenzhen Longhua District. This agreement encompasses the land and
above-ground buildings situated at the northwest corner of the intersection of Meiguan Expressway and Bulong Road. The
objective is to significantly augment the quality and value of the Company’s pertinent assets, further invigorate its asset portfolio,
and enhance the operational environment, thereby maximizing the Company’s interests. Subsequently, both parties have formally
executed the pertinent agreements. Consequently, in line with the asset disposal principle, the Company will recognize the net
profit corresponding to the asset disposal income in the third quarter of 2023. This recognition will be based on the fair value of
the relocation property assessed by the third-party appraisal agency Yinxin Asset Appraisal Co., Ltd. on June 30, 2023, amounting
to 1.36 billion yuan (calculated as the asset assessment value of 1.6 billion minus income tax expenses corresponding to deferred
income tax liabilities of 240 million yuan). For further information, please refer to the Announcement on the Plan to Execute
Relevant Agreements on Relocation Compensation and Resettlement for the Urban Renewal Project of Winner Industrial Park
disclosed by the Company on June 14, 2023, and the Announcement on the Signing of Agreements on Relocation Compensation
and Resettlement for the Urban Renewal Project of Winner Industrial Park disclosed by the Company on July 11, 2023. As of
December 31, 2023, the Company received a total of 250 million yuan in cash. This includes a deposit of 50 million yuan
received in April 2017, a prepaid relocation compensation of 100 million yuan received in February 2020, and another prepaid
relocation compensation of 100 million yuan received in July 2023, as agreed upon in the relocation compensation and
resettlement agreement.
124
Following the agreement’s signing, the Company vacated the industrial park and transferred it to Xingda Company. Both parties
signed the Transfer Confirmation Letter and settled outstanding water and electricity bills. Subsequently, Xingda Company
commenced the demolition of the old buildings. However, due to significant subsequent changes in the real estate market,
following amicable negotiations between the two parties, the Company and Xingda company signed the Confirmation Letter on
the Revocation of the “Relinquishment of Real Estate Rights Statement” on January 29, 2024. This confirmed the suspension of
project construction and the temporary withdrawal of all Declaration of Waiver of Real Estate Rights made by the Company
under the agreement, along with the withdrawal of all statements made in the Declaration of Waiver of Real Estate Rights.
Consequently, the Company reversed the net income from asset disposal of 1.36 billion yuan recognized in the third quarter of
2023. For further details, please refer to the Announcement on the Suspended Promotion of the Relocation Compensation and
Resettlement for the Urban Renewal Project of Winner Industrial Park disclosed by the Company on January 30, 2024.
The recognition and reversal of relevant profits and losses will take place in different quarters of 2023, and it will not affect the
financial data presented in the annual report.
Subsequently, there is uncertainty regarding the progress of the project’s property delivery and payment. The Company commits
to closely monitoring real estate market dynamics, fostering communication with SINDA Group, and collaboratively reinstating
project implementation when the real estate market rebounds.
XVII. Major events of subsidiaries
□ Applicable √ Not applicable
125
Winner Medical
Section Ⅶ
Changes in Shares and
126 Shareholders
I. Changes in shares
1. Changes in shares
Unit: share
Before this change Increase/decrease (+, -) After this change
Share Share capital
New issue
Quantity Proportion donati increase from Others Subtotal Quantity Proportion
of shares
on reserved funds
I. Restricted shares 290,495,323 68.11% 116,198,129 10,500 116,208,629 406,703,952 68.42%
1. State shareholding
2. State legal person
shareholding
3. Other domestic holdings 56,475 0.01% 22,590 10,500 33,090 89,565 0.02%
Wherein: domestic legal
person shareholding
Domestic natural person
56,475 0.01% 22,590 10,500 33,090 89,565 0.02%
shareholding
4. Foreign shareholding 290,438,848 68.10% 116,175,539 116,175,539 406,614,387 68.41%
Wherein: foreign legal person
290,438,848 68.10% 116,175,539 116,175,539 406,614,387 68.41%
shareholding
Foreign natural person
shareholding
II. Unrestricted shares 135,996,985 31.89% 51,696,930 -10,500 51,686,430 187,683,415 31.58%
1. RMB common share 135,996,985 31.89% 51,696,930 -10,500 51,686,430 187,683,415 31.58%
2. Foreign shares listed in
China
3. Foreign shares listed
abroad
4. Others
III. Total amount of
426,492,308 100.00% 167,895,059 167,895,059 594,387,367 100.00%
shares
Causes for change in shares
√Applicable □ Not applicable
The Company will execute the 2022 equity distribution with June 1, 2023, as the equity registration date. This distribution plan
entails a conversion ratio of 4 shares for every 10 shares, leading to a proportional increase in both shares subject to limited sales
conditions and shares without such restrictions. Moreover, the Company’s former Supervisor, Ms. Wang Ying, tendered a written
resignation report to the Company in June 2023. Her resignation was formalized after the election of a new supervisor at the 2023
First Extraordinary General Meeting of Shareholders held in July 2023. Shares directly held by Ms. Wang Ying are locked,
resulting in a corresponding increase in the Company’s restricted shares.
Approval of changes in shares
√Applicable □ Not applicable
127
Winner Medical
The Company held the 11th meeting of the 3rd Board of Directors, the 8th meeting of the 3rd Board of Supervisors on April 23,
2023, and the 2022 Annual General Meeting on May 16, 2023, respectively, to review and approve the Proposal on the Plan on
the Profit Distribution for 2022. Based on the 419,737,649 shares after deducting the repurchased shares, the Company intended
to distribute a cash dividend of 19.00 yuan (tax-inclusive) per 10 shares to all shareholders, with 4 shares converted into share
capital for every 10 shares without any bonus shares.
Transfer of share changes
□ Applicable √ Not applicable
Influence of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the
Company and other financial indexes in the most recent year and the most recent period
√Applicable □ Not applicable
Influence of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the
Company and other financial indexes in the most recent year and the most recent period. For details, refer to “Section Ⅱ - Ⅴ. Main
Accounting Data and Financial Indicators.”
Other information the Company deems necessary or required by the securities regulatory authorities to disclose
□ Applicable √ Not applicable
2. Changes in restricted shares
√Applicable □ Not applicable
Unit: share
Number of
shares
Number of restricted Number of Number of
released from
Shareholder’s shares at the restricted shares restricted shares at Reasons for restricted The date of lifting the restricted
restricted
name beginning of the increased in the end of the sale sale
sale in
period current periodNote 1 period
current
period
Commitment to
Winner Group postpone the initial
290,438,848 116,175,539 0 406,614,387 September 16, 2024
Company release period by one
year
Unlock 25% of the total number
Shares locked by
of shares held at the beginning
directors, supervisors
Fang Xiuyuan 30,000 12,000 0 42,000 of each year until the number of
and senior
shares held does not exceed
management
1,000 shares.
Unlock 25% of the total number
Shares locked by
of shares held at the beginning
directors, supervisors
Chen Huixuan 3,975 1,590 0 5,565 of each year until the number of
and senior
shares held does not exceed
management
1,000 shares.
Adhere to relevant regulations
Shares locked by
regarding share sales
directors, supervisors
Wang Ying 22,500 19,500 0 42,000 restrictions imposed by
and senior
departing directors, supervisors,
management
and senior management
Total 290,495,323 116,208,629 0 406,703,952 -- --
Note: The Company will implement the 2022 equity distribution plan, with June 2, 2023, designated as the ex-rights and dividend
date. This plan involves a conversion ratio of 4 shares for every 10 shares, resulting in a proportional increase in the number of
restricted shares held by relevant shareholders.
128
II. Securities issuance and listing
1. Securities issuance during the reporting period (excluding preferred shares)
□ Applicable √ Not applicable
2. Changes in the total number of shares and shareholder structure of the Company, as well as the changes in the
Company’s asset and liability structure
√Applicable □ Not applicable
The Company will execute the 2022 equity distribution, with June 1, 2023, set as the equity registration date. At that time, the
Company’s total share capital stood at 426,492,308 shares, with 6,754,659 shares held in the special securities account for
repurchase, resulting in 419,737,649 shares after deducting the repurchase shares. The Company intended to distribute a cash
dividend of 19.00 yuan (tax-inclusive) per 10 shares to all shareholders, with 4 shares converted into share capital for every 10
shares without any bonus shares. Following the share transfer implementation, the total number of Company shares increased
from 426,492,308 shares to 594,387,367 shares.
The Company convened the 18th meeting of the third board of directors and the 13th meeting of the third board of supervisors on
December 19, 2023. During these meetings, the Proposal on the Repurchase and Cancellation of Remaining Shares in the Special
Securities Account was reviewed and endorsed. The Company intends to utilize the remaining 6,094,659 shares in the repurchase
account, excluding those allocated for the first phase of the employee stock ownership plan, for cancellation, thereby reducing the
registered capital. On March 28, 2024, the Company completed the aforementioned industrial and commercial change procedures
to reduce the registered capital. As a result, the total share capital decreased from 594,387,367 shares to 588,292,708 shares.
3. Existing internal employee shares
□ Applicable √ Not applicable
129
Winner Medical
III. Shareholders and actual controllers
1. Number and shareholding of the Company’s shareholders
Unit: share
Total number of
common Total number of preferred
Total number of Total number of preferred
shareholders as of shareholders with voting rights Total number of
common shareholders with voting
the end of the restored as of the end of the shareholders holding
shareholders at 28,332 27,872 rights restored at the end of 0 0 0
previous month previous month before the special voting shares
the end of the the reporting period (if any)
before the disclosure disclosure date of the annual (if any)
reporting period (see Note 9)
date of the annual report
report
Shareholders holding more than 5% shares or top 10 shareholders (Excluding shares loaned through refinancing)
End of the Increase or Number of Number of Pledge, mark or frozen
reporting decrease shares held shares held
Sharehold
Shareholder’s name Shareholder nature period during the with limited with unlimited Status of
ing ratio Quantity
Number of reporting sales sales shares
shares held period Note 1 conditions conditions
Overseas legal
Winner Group Limited 68.41% 406,614,387 116,175,539 406,614,387 0 N/A 0
person
Beijing Sequoia Xinyuan Equity Domestic non-state
4.19% 24,888,027 2,753,885 0 24,888,027 N/A 0
Investment Center (limited partnership) legal person
Xiamen Leyuan Investment Partnership Domestic non-state
2.72% 16,142,550 2,380,375 0 16,142,550 N/A 0
(Limited Partnership) legal person
Xiamen Yutong Investment Partnership Domestic non-state
1.44% 8,560,222 1,235,649 0 8,560,222 N/A 0
(Limited Partnership) legal person
Xiamen Huikang Investment Partnership Domestic non-state
0.87% 5,167,887 749,825 0 5,167,887 N/A 0
(Limited Partnership) legal person
National Social Security Fund 101 Portfolio Others 0.49% 2,940,162 1,376,162 0 2,940,162 N/A 0
Huaxia Life Insurance Co.,Ltd. - Own
Others 0.49% 2,934,540 2,436,240 0 2,934,540 N/A 0
funds
Industrial and Commercial Bank of China
Others 0.48% 2,848,729 2,279,425 0 2,848,729 N/A 0
Limited - E Fund ETF
Basic Endowment Insurance Fund 1001
Others 0.46% 2,754,742 2,754,742 0 2,754,742 N/A 0
Portfolio
Xiamen Zepeng Investment Partnership Domestic non-state
0.45% 2,650,223 418,235 0 2,650,223 N/A 0
(Limited Partnership) legal person
Situation of strategic investors or general legal persons becoming
the top 10 shareholders due to the allotment of new shares (if None
any) (see note 4)
Description of the above-mentioned shareholder association or
None
concerted action
Description of the above shareholders involved in entrusting /
None
entrusted voting right and waiver of voting right
Special note on the existence of repurchase special accounts As of Sunday, December 31, 2023, the Company repurchased 6,249,659 shares held in the “special securities
among the top 10 shareholders (if any) (see Note 10) account for the repurchase of Winner Medical Co., Ltd.”
130
Shareholding of top 10 shareholders with unlimited sales conditions
Number of shares with unlimited sales conditions held at
Shareholder’s name Share type Share type Quantity
the end of the reporting period
Beijing Sequoia Xinyuan Equity Investment RMB common
24,888,027 24,888,027
Center (limited partnership) share
Xiamen Leyuan Investment Partnership (Limited RMB common
16,142,550 16,142,550
Partnership) share
Xiamen Yutong Investment Partnership (Limited RMB common
8,560,222 8,560,222
Partnership) share
Xiamen Huikang Investment Partnership RMB common
5,167,887 5,167,887
(Limited Partnership) share
RMB common
National Social Security Fund 101 Portfolio 2,940,162 2,940,162
share
RMB common
Huaxia Life Insurance Co.,Ltd. - Own funds 2,934,540 2,934,540
share
Industrial and Commercial Bank of China RMB common
2,848,729 2,848,729
Limited - E Fund ETF share
Basic Endowment Insurance Fund 1001 RMB common
2,754,742 2,754,742
Portfolio share
Xiamen Zepeng Investment Partnership (Limited RMB common
2,650,223 2,650,223
Partnership) share
RMB common
Hong Kong Securities Clearing Company Ltd. 2,473,111 2,473,111
share
Description of the association or concerted
action between top 10 public shareholders with
unlimited sales conditions, and between top 10 None
public shareholders with unlimited sales
conditions and top 10 shareholders
Participation in the securities margin trading (if
None
any) (see Note 5)
Note 1: The Company designated June 2, 2023, as the ex-rights and ex-dividend date for the implementation of the 2022 equity
distribution plan, which involves a conversion ratio of 4 shares for every 10 shares. Consequently, this led to an increase in the
total number of company shares held by all shareholders.
131
Winner Medical
The top ten shareholders engaged in the refinancing business and lending of shares
√Applicable □ Not applicable
Unit: share
Top ten shareholders involved in refinancing and share lending
Holdings in ordinary Shares lent under Shares loaned through
Holdings in general accounts
accounts and credit refinancing at the start of refinancing at the end of the
and credit accounts at the end
accounts at the beginning the period that remain period that are yet to be
of the period
Shareholder’s name (full of the period outstanding returned
name) Proportion
Proportion Proportion to Proportion to
to total
Total Total to total share Total total share Total total share
share
capital capital capital
capital
Industrial and Commercial
Bank of China Limited - E 569,304 0.13% 177,200 0.04% 2,848,729 0.48% 52,700 0.01%
Fund ETF
Changes in the top ten shareholders compared to the previous period
√Applicable □ Not applicable
Unit: share
Changes in the top ten shareholders compared to the end of the previous period
Number of shares lent through Number of shares held by shareholders in ordinary
Additions/Exi refinancing at the end of the period accounts, credit accounts, and refinancing loans at
ts during this that have not been returned the end of the period that have not been returned
Shareholder’s name (full name)
reporting
period Proportion to total Proportion to total share
Total Total
share capital capital
Huaxia Life Insurance Co.,Ltd. - Number of
0 0.00% 2,934,540 0.49%
Self-owned funds additions
Industrial and Commercial Bank of China Number of
52,700 0.01% 2,901,429 0.49%
Limited - E Fund ETF additions
Basic Endowment Insurance Fund 1001 Number of
0 0.00% 2,754,742 0.46%
Portfolio additions
Hong Kong Securities Clearing Company
Retreat 0 0.00% 2,473,111 0.42%
Ltd.
Basic Endowment Insurance Fund 808
Retreat 0 0.00% 2,312,860 0.39%
Portfolio
Zheng Junhui Retreat 0 0.00% 1,626,380 0.27%
132
Whether the company has a voting rights differential arrangement
□ Applicable √ Not applicable
Whether the Company’s top 10 common shareholders and op 10 common shareholders with unlimited sales conditions agreed on
a repurchase transaction during the reporting period
□Yes √ No
The Company’s top 10 common shareholders and op 10 common shareholders with unlimited sales conditions did not agree on a
repurchase transaction during the reporting period
2. Controlling shareholder of the Company
Nature of controlling shareholder: foreign holding
Type of controlling shareholder: legal person
Legal Representative / Head of
Name of the controlling shareholder Date of establishment Organization code Main business
Unit
Investment
Winner Group Limited Li Jianquan April 8, 2003 124887
management
Equity of other domestic and foreign listed
companies controlled and invested by
None
controlling shareholder during the reporting
period
Change of controlling shareholders during the reporting period
□ Applicable √ Not applicable
No change in controlling shareholders during the reporting period.
3. Actual controller of the Company and the person acting in concert
Nature of actual controller: overseas natural person
Type of actual controller: natural person
Relationship with actual Granted with the right of residence in other
Name of actual controller Nationality
controller countries or regions
Hong Kong,
Li Jianquan Himself Yes
China
Chairman and General
Main occupation and position
Manager
Domestic and foreign listed companies that have held
None
shares in the past 10 years
133
Winner Medical
Changes in actual controller during the reporting period
□ Applicable √ Not applicable
No change in actual controller during the reporting period.
Block diagram of the property rights and control relationship between the Company and the actual controller
Li Jianquan
Winner Group Limited
Winner Medical Co., Ltd.
The actual controller controls the Company through trust or other asset management
□ Applicable √ Not applicable
4. The cumulative number of pledged shares of the controlling shareholder or the largest shareholder of the Company
and the person acting in concert accounts for 80% of the total number of shares held by them in the Company
□ Applicable √ Not applicable
5. Other corporate shareholders holding more than 10% of the shares
□ Applicable √ Not applicable
6. Restriction and reduction of the shares of controlling shareholders, actual controllers, reorganization parties and
other promised entities
√Applicable □ Not applicable
The company’s controlling shareholder, Winner Group Limited, has pledged not to decrease its holdings of the Company’s shares
for three years from the date of listing, effective until September 17, 2023. Furthermore, Winner Group Limited issued the
Commitment on Voluntarily Extending the Sale Restriction Period on August 28, 2023, prolonging the sale restriction period of its
restricted shares by one year until September 16, 2024.
134
IV. Specific implementation of share repurchase in the reporting period
Implementation progress of share repurchase
□ Applicable √ Not applicable
Implementation progress of reducing repurchased shares by centralized bidding transactions
□ Applicable √ Not applicable
135
Winner Medical
Section Ⅷ
□ Applicable √ Not applicable
No136
preferred shares of the Company during the
Preferred Shares-related
reporting period. Information
Section Ⅸ
Bond-related Information
□ Applicable √ Not applicable
137
Winner Medical
Section Ⅹ
Financial Report
138
I. Audit report
Type of audit opinion Standard unqualified opinion
Date of signing the audit report April 23, 2024
Name of audit institution BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP
Audit report document number X.K.S.B.Zi [2024] No. ZI10222
Name of certified public accountants Cheng Jin, Wu Lihong
Audit Report Text
Audit Opinion
We have audited the accompanying financial statements of Winner Medical Co., Ltd. (hereinafter referred to “Winner Medical”),
including the consolidated and parent company balance sheet as of Sunday, December 31, 2023, consolidated and parent company
income statement, consolidated and parent company cash flow statement and consolidated and parent company statement of
change in equity for the year 2023 and notes to financial statements.
In our opinion, the attached financial statements of Winner Medical have been prepared in accordance with the provisions of the
Accounting Standards for Business Enterprises and give a true and fair view of the consolidated and parent company financial
position as of Sunday, December 31, 2023 and the consolidated and parent company financial performance and cash flows for the
year 2023 in all significant terms.
Basis for Audit Opinion
We conducted our audit in accordance with the China Registered Accountants Auditing Standards(CRAAS). The “Responsibility
of certified public accountants for audit of financial statements” in the audit report further states our responsibility under the
Standards. We were independent of Winner Medical and fulfill other responsibilities in terms of professional ethics according to
the code of professional ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to act as a basis
for our audit opinion.
Key Audit Items
The key audit items are those that we consider most important to audit the financial statements of the current period in our
professional judgment. The response to these items is based on the audit of the financial statements as a whole and the formation
of an audit opinion. We do not comment on these items separately.
139
Winner Medical
The key audit items we identified in the audit are summarized as follows:
Key Audit Items How is the item handled in the audit
Existence of monetary funds and trading financial assets
Our main audit procedures for the existence of monetary funds and trading financial assets
include:
Please refer to Notes III, (X) and Notes V, (I), (II) to the 1. Understand the key internal controls related to the existence of monetary funds and
consolidated financial statements. trading financial assets, evaluate the design of these controls, determine whether they are
On December 31, 2022, the balance of Winner implemented, and test the operation effectiveness of the relevant internal controls;
Medical’s monetary funds and trading financial assets 2. Obtain the bank account statements and check with the book balance. Obtain the bank
was about 7.556 billion yuan, accounting for 44.16% of reconciliation statements for the items with differences, understand the nature of the
the total assets; On December 31, 2021, the balance of reconciliation items, and test the major reconciliation items;
Winner Medical’s monetary funds and trading financial 3. Implement confirmation procedures for monetary funds and trading financial assets, and
assets was approximately 8.906 billion yuan, accounting calculate according to the latest net value as of the balance sheet date provided by the bank.
for 48.79% of the total assets, which is important to the 4. Check large amounts of monetary funds; inspect product specifications and purchase
financial statements. Therefore, we identified the receipts for trading financial assets;
presence of monetary funds and trading financial assets 5. Obtain corporate credit reports and check whether there are pledge guarantee matters
as key audit matters. related to monetary funds;
6. Implement the bank settlement account information inquiry procedure to confirm the
accuracy and completeness of the bank settlement account provided to us by the management.
Recognition of operating income
Our main audit procedures for the operating income recognition of Winner Medical include:
1. Understand the key internal controls related to the recognition of income, evaluate the
design of these controls, determine whether they are implemented, and test the operation
effectiveness of the relevant internal controls; conduct a comprehensive assessment of the main
IT systems within the group, with particular focus on ensuring the implementation of key control
activities in the realm of information management.
For details of the accounting policies for income 2. Check the major sales contracts, understand the terms or conditions of the major
recognition and the analysis of income, please refer to contracts, and evaluate whether the income recognition policy conforms to the provisions of the
Notes III, (XXVII) and Notes V, (XLIII) to the Accounting Standards for Business Enterprises;
consolidated financial statements. 3. Implement substantive analysis procedures for income and gross profit margin according
The income of Winner Medical mainly comes from the to major products, identify whether there are significant or abnormal fluctuations, and find out
sales business of medical consumables and healthy the causes of fluctuations;
consumer goods. 4. Confirm current sales to main customers by sampling combined with the confirmation of
Compared with the previous period, due to adjustment of accounts receivable;
public health events policy and the tightened 1. For domestic sales income, check supporting documents related to income recognition by
government’s epidemic prevention policies in China, the sampling, including sales contract, order, sales invoice, delivery note and customer receipt, etc.;
income of medical consumables experienced a for export income, check supporting documents such as sales contract, export declaration form,
year-on-year decrease of 46.74%, which was a bill of landing by sampling;
significant changes in revenue. Therefore, we determine 2. Implement an analytical review procedure for e-commerce sales income, select the Tao
income recognition as a key audit issue. system, JD.com and official website with the highest proportion of e-commerce, obtain the sales
data of each platform for consumption behavior analysis, and compare it with the carrying
amount of Company’s sales income;
3. Check the capital flow of third-party payment platforms such as Alipay and check it with
the carrying amount;
8. Carry out cutoff test on the income recognized before and after the balance sheet date to
evaluate whether the income is recognized in the appropriate period.
140
Key Audit Items How is the item handled in the audit
Accounting of fixed assets and construction in progress
Please refer to Notes III, (XVI), (XVII) and Notes V,
(XV), (XVI) to the consolidated financial statements.
Our main audit procedures for the accounting of fixed assets and construction in progress of
On December 31, 2023, the net value of fixed assets and
Winner Medical include:
projects under construction totaled 3.734 billion yuan,
1. Check the progress of important fixed assets and construction in progress on the basis of
representing approximately 21.82% of the total assets.
sampling, to determine their existence and pay attention to whether there are idle or damaged
By comparison, on December 31, 2022, the net value of
fixed assets;
fixed assets and projects under construction amounted to
2. Select samples of fixed assets and construction in progress increased or decrease in
3.078 billion yuan, accounting for approximately 16.86%
current year, and check supporting documents such as contracts, invoices, acceptance
of the total assets.
certificates, collection or payment orders, etc.;
Fixed assets and construction in progress are an
3. Check the ownership or control of fixed assets;
important part of the consolidated balance sheet of
4. Check whether the depreciation policies and methods comply with the standards, whether
Winner Medical. The time point when the construction
the estimated service life and estimated net residual value are reasonable, and calculate whether
in progress reaches the predetermined usable condition
the depreciation is correct;
and transfer into the fixed assets, the method of
5. On the basis of sampling, check the date of acceptance report, check debugging and
depreciation calculation of the fixed assets, the judgment
production records, and judge the appropriateness of the time point when the construction in
of the useful life of the fixed assets and the net realizable
progress is transferred into fixed assets.
value of the fixed assets will impact the book value of
6. Confirm relevant economic matters (contract terms, receipt and payment, invoicing,
the fixed assets and construction in progress, and they
transaction balance, project progress, project status) through correspondence.
are of importance to the consolidated financial
statements.
Goodwill impairment tests
Please refer to Notes V, (XIX), VI, (I) to the
consolidated financial statements. Our main audit procedures for impairment test of Winner Medical’s goodwill include:
As of December 31, 2023, net goodwill amounted to 1. Evaluate and test the design and execution effectiveness of internal controls related to
around 864 million yuan, representing approximately goodwill impairment test;
5.05% of total assets. By comparison, as of December 2. Compare the data used in the cash flow forecast with historical data to evaluate the
31, 2022, net goodwill stood at approximately 1.045 rationality of the data used;
billion yuan, accounting for roughly 5.72% of total 3. Compare the income growth rate of the detailed forecast period with the historical income
assets. growth rate to evaluate its rationality. Understand the basis for the management to determine the
During the evaluation of goodwill impairment, the apply income growth rate in the subsequent forecast period, and evaluate its rationality;
key assumptions such as income growth rate, gross profit 4. Compare the gross profit margin of the detailed forecast period with the historical gross
margin and discount rate. Due to the importance of profit margin, and analyze the rationality of the gross profit margin of the detailed forecast
goodwill to the overall financial statements and the period;
involvement of management’s subjective judgments and 5. Review the rationality of the valuation model and key parameters used by management in
significant estimates in impairment test, which are impairment tests with the assistance of internal valuation experts;
inherently uncertain and may be affected by 6. Review the adequacy and completeness of the disclosure of impairment of goodwill in the
management’s bias, we regard goodwill and its notes to financial statements.
impairment test as key audit matters.
Other information
The management of Winner Medical (hereinafter referred to as the management) is responsible for other information, including
the information covered in Winner Medical’s annual report for 2023, but excluding the financial statements and our audit report.
Our audit opinion on the financial statements does not involve other information and we does not made any form of verification
conclusions on other information.
141
Winner Medical
Combined with our audit of the financial statements, it’s our responsibility to read other information. In this process, we shall
consider whether material inconsistency or material misstatement of other information with the financial statements or the
situation understood by us in the audit process.
Based on the work that has been done by us, we should report the fact of material misstatement confirmed in other information.
We have nothing to report in this regard.
Responsibility of management and government for the financial statements
The management is responsible for preparing the financial statements in accordance with the provisions of the Accounting
Standards for Business Enterprises and giving a true and fair view; designing, implementing and maintaining necessary internal
control, so that the financial statements are free from material misstatement, whether due to fraud or error.
When preparing the financial statements, the management is responsible for evaluating the going-concern ability of Winner
Medical, disclosing the matters related to the going-concern (if applicable) and using the going-concern assumption, unless the
management plans to liquidate Spectrum Chemical or stop operation or no other realistic options.
The government is responsible for supervising the financial reporting process of Winner Medical.
Responsibility of certified public accountants for audit of financial statements
Our goal is to obtain reasonable guarantee on inexistence of the material misstatement of the financial statements whether due to
fraud or error and to issue an audit report including audit opinion. Reasonable guarantee is high level guarantee, but it cannot
guarantee that a material misstatement of the audit executed according to the auditing standards will always be found.
Misstatement may be caused by fraud or error. If the reasonable expected misstatements may affect the economic decision made
by the financial statement user according to the financial statements, whether individually or collectively, the misstatement is
generally believed material.
We made professional judgment and maintained professional skepticism in the audit process according to the auditing standards.
We also performed the following:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and
implement audit procedures to address these risks, and obtain sufficient and appropriate audit evidence as the basis for audit
opinion. Since the fraud may involve collusion, forge, intentional omission, false statement or above internal control, the risk of
material misstatement caused by fraud is higher than that caused by error.
(II) Understand internal control related to the audit in order to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the internal control.
(III) Evaluate the appropriateness of the accounting policies being used by the management and the reasonableness of accounting
estimates and relevant disclosure being made by the management.
(IV) Draw a conclusion about the appropriateness of the going-concern assumption used by the management. Meanwhile, draw a
conclusion about the major uncertainty of the matters or circumstances possibly resulting in major concerns about the
going-concern ability of Winner Medical according to the audit evidence obtained. If we draw a conclusion that major uncertainty
exists, the auditing standards require us to request the statement user to notice relevant disclosure in the financial statements in the
audit report; in case of insufficient disclosure, we should issue a modified audit report. Our conclusion is made on the basis of the
information available as of the audit report date. However, the future matters or circumstances may result in going concern failure
of Winner Medical.
(V) Evaluate the overall presentation (including disclosure), structure and content of the financial statements and evaluate
whether the financial statements give a true and fair view of relevant transactions and matters.
142
(VI) Obtain adequate and appropriate audit evidence for the financial information of Winner Medical entity or business activities
to express an opinion on the consolidated financial statements. We are responsible for guiding, supervising and implementing the
group audit and take full responsibility for the audit opinions.
We communicate with the governance on the planned audit scope, time arrangement and major audit findings, including the
internal control defects identified by us in the audit and worthing attention.
We also provide the governance with a statement of compliance with the ethical requirements relating to our independence and
communicate with the governance with respect to all relations and other matters that may reasonably be considered to affect our
independence and the relevant precautions (if applicable).
From the items communicated with the governance, we determine which items are most important to the audit of current financial
statements and thus constitute the key audit items. We describe these items in our audit report, unless the disclosure of these
matters is prohibited by law or regulation, or, in rare circumstances, we determine that we should not communicate the items in
our audit report if it is reasonably expected that the negative consequences of communicating an item outweigh the benefits in the
public interest.
BDO CHINA SHU LUN PAN CERTIFIED PUBLIC
Chinese Certified Public Accountant: Cheng Jin
ACCOUNTANTS LLP
(Project Partner)
Shanghai, China Chinese Certified Public Accountant: Wu Lihong
April 23, 2023
143
Winner Medical
II. Financial statements
Unit of statements in financial notes: yuan
1. Consolidated Balance Sheet
Prepared by: Winner Medical Co., Ltd. December 31, 2023 Unit: yuan
Item December 31, 2023 January 01, 2023
Current assets:
Cash and cash equivalents 4,706,132,071.27 4,526,877,578.90
Deposit reservation for balance
Lending funds
Tradable financial assets 2,850,058,540.71 4,378,789,960.23
Derivative financial assets
Notes receivable 42,963,076.53 51,001,784.57
Accounts receivable 768,602,289.60 932,642,061.04
Amounts receivable financing 29,348,618.44 93,093,113.79
Advances to suppliers 122,281,742.75 229,225,273.09
Premiums receivables
Reinsurance accounts receivable
Provision of cession receivable
Other receivables 218,913,405.18 236,298,390.78
Including: Interest receivable
Dividends receivable
Redemptory cash and cash equivalents for sale
Inventory 1,434,326,287.96 1,558,923,573.37
Contract assets
Assets held for sales
Non-current assets due within a year 4,379,308.17
Other current assets 378,853,652.64 119,059,084.47
Total current assets 10,555,858,993.25 12,125,910,820.24
Non-current assets:
144
Item December 31, 2023 January 01, 2023
Loans and advances
Debt investment
Other debt investments
Long-term receivables 35,689,264.21
Long-term equity investment 20,879,244.20 21,747,635.99
Other equity instrument investments
Other non-current financial assets 70,000,000.00 40,000,000.00
Investment real estates 7,693,341.79 8,747,014.25
Fixed assets 2,749,018,750.62 2,312,982,598.88
Construction in progress 984,571,329.05 765,009,910.63
Productive biological assets
Oil and gas assets
Right-of-use assets 417,496,021.36 472,356,125.64
Intangible assets 995,228,233.51 1,033,109,803.45
Development expenditure
Goodwill 864,289,002.45 1,044,674,814.01
Long-term unamortized expenses 131,090,470.15 132,692,286.03
Deferred income tax assets 175,351,248.02 211,971,976.90
Other non-current assets 104,856,551.36 83,524,640.64
Total non-current assets 6,556,163,456.72 6,126,816,806.42
Total assets 17,112,022,449.97 18,252,727,626.66
Current liabilities
Short-term loans 1,493,238,955.00 2,295,218,930.85
Borrowings from central bank
Borrowing funds
Tradable financial liabilities
Derivative financial liabilities
Notes payable 315,902,844.15 24,760,000.00
Accounts payable 1,116,802,220.38 1,119,574,518.58
Advance from customers
145
Winner Medical
Item December 31, 2023 January 01, 2023
Contract liabilities 193,262,892.15 566,819,254.08
Financial assets sold for repurchase
Deposits from customers and interbank
Acting trading securities
Acting underwriting securities
Payroll payable 254,475,235.72 312,450,241.38
Taxes payable 62,877,779.86 322,255,874.61
Other payables 591,310,917.61 570,843,242.88
Including: Interest payable
Dividends payable
Fees and commissions payable
Dividend payable for reinsurance
Liabilities held for sales
Non-current liabilities due within one year 223,426,826.45 215,946,889.32
Other current liabilities 19,712,328.19 59,604,591.85
Total current liabilities 4,271,009,999.51 5,487,473,543.55
Non-current liabilities
Reserve fund for insurance contracts
Long-term loans 170,000,000.00
Bonds payable
Including: preferred share
Perpetual bond
Lease liabilities 292,009,504.04 326,459,697.90
Long-term payable
Long-term payroll payable 8,511,000.00 8,579,637.94
Estimated liabilities
Deferred income 121,649,364.97 98,791,412.91
Deferred income tax liabilities 138,520,778.30 133,677,102.81
Other non-current liabilities
Total non-current liabilities 730,690,647.31 567,507,851.56
146
Item December 31, 2023 January 01, 2023
Total liabilities 5,001,700,646.82 6,054,981,395.11
Owner’s equity:
Capital stock 594,387,367.00 426,492,308.00
Other equity instruments
Including: preferred share
Perpetual bond
Capital reserve 4,381,126,487.29 4,546,247,611.24
Less: treasury stock 473,552,442.85 500,082,734.11
Other comprehensive income 2,215,369.44 782,778.15
Special reserve
Surplus reserve 420,212,778.13 420,212,778.13
General risk provision
Undistributed profit 6,608,834,768.99 6,825,933,069.72
Total owners’ equities attributable to the owners of
11,533,224,328.00 11,719,585,811.13
parent company
Minority equity 577,097,475.15 478,160,420.42
Total owners’ equities 12,110,321,803.15 12,197,746,231.55
Total liabilities and owners’ equities 17,112,022,449.97 18,252,727,626.66
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Wu Kezhen
147
Winner Medical
2. Balance Sheet of Parent Company
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item December 31, 2023 January 01, 2023
Current assets:
Cash and cash equivalents 3,709,959,628.26 3,657,596,762.00
Tradable financial assets 2,723,751,837.29 3,937,805,999.74
Derivative financial assets
Notes receivable 4,467,239.17 15,100,060.05
Accounts receivable 329,056,250.56 454,131,329.85
Amounts receivable financing 3,373,685.21 72,766,987.70
Advances to suppliers 819,879,677.04 1,247,948,057.70
Other receivables 116,040,893.47 123,628,108.60
Including: Interest receivable
Dividends receivable
Inventory 251,311,204.70 335,624,519.05
Contract assets
Assets held for sales
Non-current assets due within a year 4,379,308.17
Other current assets 219,250,046.91 100,484,526.44
Total current assets 8,181,469,770.78 9,945,086,351.13
Non-current assets:
Debt investment
Other debt investments
Long-term receivables 35,689,264.21
Long-term equity investment 3,628,308,515.87 3,547,654,880.31
Other equity instrument investments
Other non-current financial assets 70,000,000.00 40,000,000.00
Investment real estates
Fixed assets 39,029,180.33 99,683,983.66
Construction in progress 81,523,183.74 28,127,353.45
148
Item December 31, 2023 January 01, 2023
Productive biological assets
Oil and gas assets
Right-of-use assets 53,018,721.37 73,896,162.36
Intangible assets 42,201,830.86 37,561,928.32
Development expenditure
Goodwill
Long-term unamortized expenses 19,425,804.21 20,782,444.19
Deferred income tax assets 38,890,354.71 39,382,354.76
Other non-current assets 41,395,668.54 24,649,870.57
Total non-current assets 4,049,482,523.84 3,911,738,977.62
Total assets 12,230,952,294.62 13,856,825,328.75
Current liabilities:
Short-term loans 1,270,138,900.00 1,010,087,083.33
Tradable financial liabilities
Derivative financial liabilities
Notes payable 104,617,096.39 980,000,000.00
Accounts payable 247,993,184.23 868,496,158.04
Advance from customers
Contract liabilities 90,354,800.16 464,022,623.08
Payroll payable 62,965,400.32 123,859,226.02
Taxes payable 2,852,502.16 145,381,044.31
Other payables 358,800,377.50 346,143,459.66
Including: Interest payable
Dividends payable
Liabilities held for sales
Non-current liabilities due within one year 47,239,311.11 22,369,924.68
Other current liabilities 4,700,685.90 44,098,604.24
Total current liabilities 2,189,662,257.77 4,004,458,123.36
Non-current liabilities:
Long-term loans 170,000,000.00
149
Winner Medical
Item December 31, 2023 January 01, 2023
Bonds payable
Including: preferred share
Perpetual bond
Lease liabilities 51,992,935.59 54,991,421.86
Long-term payable
Long-term payroll payable
Estimated liabilities
Deferred income 1,312,817.62 17,434,675.44
Deferred income tax liabilities 8,333,039.89 1,510,415.96
Other non-current liabilities
Total non-current liabilities 231,638,793.10 73,936,513.26
Total liabilities 2,421,301,050.87 4,078,394,636.62
Owner’s equity:
Capital stock 594,387,367.00 426,492,308.00
Other equity instruments
Including: preferred share
Perpetual bond
Capital reserve 4,380,380,114.80 4,571,654,373.59
Less: treasury stock 473,552,442.85 500,082,734.11
Other comprehensive income
Special reserve
Surplus reserve 411,397,111.21 411,397,111.21
Undistributed profit 4,897,039,093.59 4,868,969,633.44
Total owners’ equities 9,809,651,243.75 9,778,430,692.13
Total liabilities and owners’ equities 12,230,952,294.62 13,856,825,328.75
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Wu Kezhen
150
3. Consolidated Statement of Income
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item Year 2023 Year 2022
I. Total operating income 8,185,022,057.20 11,351,331,545.08
Including: Operating income 8,185,022,057.20 11,351,331,545.08
Interest revenue
Premium earned
Fee and commission income
II. Operating cost 7,285,343,794.63 9,119,688,180.06
Including: Operating costs 4,174,597,287.74 5,972,800,817.29
Interest expenditure
Fee and commission expense
Surrender value
Net payments for insurance claims
Net reserve fund extracted for insurance liability
contracts
Bond insurance expense
Reinsurance costs
Taxes and surcharges 66,413,470.87 98,087,240.32
Selling expenses 2,090,492,506.10 2,050,176,407.46
Administrative expenses 693,647,621.42 633,614,634.95
R&D expenses 322,051,868.43 487,583,652.11
Financial expenses -61,858,959.93 -122,574,572.07
Including: interest expenditure 63,441,562.69 50,043,346.95
Interest revenue 133,913,862.72 123,909,561.75
Plus: other incomes 101,105,274.61 84,373,262.34
Income from investment (loss expressed with “-”) 127,342,880.98 51,470,767.16
Including: Income from investment of joint venture and
1,581,608.21 4,697,834.75
cooperative enterprise
Income from derecognition of financial assets
measured at amortized cost
Exchange gain (loss expressed with “-”)
Net exposure hedging gain (loss expressed with “-”)
151
Winner Medical
Item Year 2023 Year 2022
Income from fair value changes (loss expressed with “-”) 46,678,103.27 32,148,876.44
Credit impairment losses (loss expressed with “-”) 4,725,509.30 -63,943,322.52
Assets impairment losses (loss expressed with “-”) -393,762,054.87 -362,869,340.23
Income from disposal of assets (loss expressed with “-”) 32,201,950.01 3,726,204.37
III. Operating profit (loss to be filled out with the minus sign
817,969,925.87 1,976,549,812.58
“-”)
Plus: Non-revenue 16,618,496.48 10,569,559.38
Less: non-operating expenditure 84,742,148.34 67,613,275.63
IV. Total profit (total loss to be filled out with the minus sign
749,846,274.01 1,919,506,096.33
“-”)
Less: Income tax expenses 121,301,087.57 245,168,629.65
V. Net profit (net loss to be filled out with the minus sign “-”) 628,545,186.44 1,674,337,466.68
(I) Classified by business continuity
1. Net profits from going concern (net loss expressed
628,545,186.44 1,674,337,466.68
with “-”)
2. Net profits from discontinuing operation (net loss
expressed with “-”)
(II) Classified by ownership
1. Net profits attributable to shareholders of parent
580,403,232.37 1,650,717,282.64
company
2. Minority interest income 48,141,954.07 23,620,184.04
VI. Net amount of other comprehensive income after tax 2,623,741.12 3,547,462.46
Net amount of other comprehensive income after tax
1,432,591.30 2,339,713.58
attributed to parent company owners
(I) Other comprehensive income that can’t be
-206,495.38 601,000.00
reclassified into profit and loss
1. Remeasure the variation of net indebtedness or net
-206,495.38 601,000.00
asset of defined benefit plan
2. Other comprehensive income subsequently unable
to be classified into the profits or losses based on equity
method
3. Changes in fair value for other equity instruments
investment
4. Changes in fair value for the enterprise credit risks
5. Others
(II) Other comprehensive income that will be reclassified into
1,639,086.68 1,738,713.58
profit and loss
1. Other comprehensive income that will be
reclassified into profit and loss in the invested
enterprise under equity method
2. Changes in fair value for other debt investment
3. The amount of financial asset subsequently to be
reclassified into other comprehensive income
4. Provisions for impairment of other debt investment
5. Cash flow hedge
152
Item Year 2023 Year 2022
6. Balance arising from the translation of foreign currency
1,639,086.68 1,738,713.58
financial statements
7. Others
Net amount of other comprehensive income after tax
1,191,149.82 1,207,748.88
attributed to minority shareholders
VII. Total comprehensive income 631,168,927.56 1,677,884,929.14
Total comprehensive income attributed to parent company
581,835,823.67 1,653,056,996.22
owners
Total comprehensive income attributed to minority
49,333,103.89 24,827,932.92
shareholders
VIII. Earnings Per Share
(I) Basic earnings per share 0.98 2.79
(II) Diluted earnings per share 0.98 2.79
In case of business combination involving enterprises under common control in current period, the net profits achieved by the
merged party before combination were 0.00 yuan and achieved by the merged party in previous period were 0.00 yuan.
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Wu Kezhen
153
Winner Medical
4. Income Statement of Parent Company
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item Year 2023 Year 2022
I. Revenue 2,892,090,654.45 6,524,892,771.82
Subtract: Operating costs 2,034,115,507.03 4,161,507,373.94
Taxes and surcharges 8,489,244.95 36,034,584.59
Selling expenses 387,608,950.08 452,754,200.04
Administrative expenses 313,981,375.21 334,694,723.83
R&D expenses 104,581,622.35 204,606,781.00
Financial expenses -73,711,157.59 -124,366,125.15
Including: interest expenditure 38,242,399.91 22,677,277.27
Interest revenue 121,106,387.31 112,771,887.57
Plus: other incomes 19,329,429.96 20,759,967.82
Income from investment (loss expressed with “-”) 817,024,682.96 727,290,299.21
Including: Income from investment of joint venture and cooperative
1,184,337.91 4,692,894.92
enterprise
Income from derecognition of financial assets measured at
amortized cost (loss expressed with “-”)
Net exposure hedging gain (loss expressed with “-”)
Income from fair value changes (loss expressed with “-”) 44,940,837.55 29,434,882.75
Credit impairment losses (loss expressed with “-”) 8,788,024.82 -72,175,899.92
Assets impairment losses (loss expressed with “-”) -135,881,132.07 -105,473,198.20
Income from disposal of assets (loss expressed with “-”) 21,798,190.53 -94,094.68
II. Operating profit (loss to be filled out with the minus sign “-”) 893,025,146.17 2,059,403,190.55
Plus: Non-revenue 3,058,779.51 1,353,390.78
Less: non-operating expenditure 60,362,700.49 17,761,666.63
III. Total profit (total loss to be filled out with the minus sign “-”) 835,721,225.19 2,042,994,914.70
Less: Income tax expenses 10,150,231.94 187,930,805.33
IV. Net profit (net loss to be filled out with the minus sign “-”) 825,570,993.25 1,855,064,109.37
(I) Net profits from going concern (net loss expressed with “-”) 825,570,993.25 1,855,064,109.37
(II) Net profits from discontinuing operation (net loss expressed with “-”)
154
Item Year 2023 Year 2022
V. Net amount of other comprehensive income after tax
(I) Other comprehensive income that can’t be reclassified into profit and
loss
1. Remeasure the variation of net indebtedness or net asset of defined
benefit plan
2. Other comprehensive income subsequently unable to be classified into
the profits or losses based on equity method
3. Changes in fair value for other equity instruments investment
4. Changes in fair value for the enterprise credit risks
5. Others
(II) Other comprehensive income that will be reclassified into profit and loss
1. Other comprehensive income that will be reclassified into profit and
loss in the invested enterprise under equity method
2. Changes in fair value for other debt investment
3. The amount of financial asset subsequently to be reclassified into other
comprehensive income
4. Provisions for impairment of other debt investment
5. Cash flow hedge
6. Balance arising from the translation of foreign currency financial
statements
7. Others
VI. Total comprehensive income 825,570,993.25 1,855,064,109.37
VII. Earnings per share:
(I) Basic earnings per share 0.0000
(II) Diluted earnings per share 0.0000
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Wu Kezhen
155
Winner Medical
5. Consolidated Statement of Cash Flow
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item Year 2023 Year 2022
I. Cash flow from financing activities:
Cash from selling goods or offering labor 8,846,783,036.30 12,313,842,633.16
Net increase of customer deposit and deposit from other banks
Net increase of borrowings from central bank
Net increase of borrowing funds from other financial institutions
Cash from obtaining original insurance contract premium
Cash received from insurance premium of original insurance
contract
Net increase of deposit and investment of insured
Cash from interest, handling charges and commissions
Net increase of borrowing funds
Net increase of repurchase of business funds
Net cash from acting trading securities
Refund of tax and levies 79,672,356.36 13,034,931.53
Other cash received related to operating activities 177,059,400.53 215,912,765.53
Subtotal of cash inflow from operating activities 9,103,514,793.19 12,542,790,330.22
Cash paid to buy products and accept labor services 5,055,100,441.56 6,458,046,080.74
Net increase of customer loans and advances
Net increase of amount due from central bank and interbank
Cash paid for original insurance contract claims payment
Net increase of lending funds
Cash paid for interest, handling charges and commissions
Cash paid for policy dividend
Cash paid to and for employees 1,794,520,705.17 1,775,089,609.22
Taxes and fees paid 750,512,089.73 723,930,241.85
Other cash paid related to operating activities 440,055,324.50 602,252,168.14
Subtotal of cash outflow from operating activities 8,040,188,560.96 9,559,318,099.95
Net cash flow from operating activities 1,063,326,232.23 2,983,472,230.27
II. Cash flow from investment activities:
Cash from investment withdrawal 6,247,266,220.01 8,019,668,619.78
156
Item Year 2023 Year 2022
Cash from investment income 234,362,316.07 155,708,427.23
Net cash from disposal of fixed assets, intangible assets and other
108,039,128.43 63,203,570.84
long-term assets
Net cash received from the disposal of subsidiaries and other
business entities
Other cash received related to investment activities
Subtotal of cash inflow from investment activities 6,589,667,664.51 8,238,580,617.85
Cash paid for the purchase and construction of fixed assets,
753,066,181.04 1,199,381,228.11
intangible assets and other long term assets
Cash paid for investment 4,659,245,208.32 9,180,242,000.00
Net cash received from reinsurance business
Net cash paid for obtaining subsidiaries and other business units 147,078,596.46 1,677,072,708.56
Other cash paid related to investment activities
Subtotal of cash outflow from investment activities 5,559,389,985.82 12,056,695,936.67
Net cash flow from investing activities 1,030,277,678.69 -3,818,115,318.82
III. Cash flow from financing activities:
Receipts from equity securities
Including: Cash received from subsidies’ absorption of minority
shareholders’ investment
Cash received from borrowings 2,153,100,000.00 2,276,661,290.38
Other cash received related to financing activities 150,357,500.00
Subtotal of cash inflow from financial activities 2,303,457,500.00 2,276,661,290.38
Cash repayments of amounts borrowed 2,803,050,000.00 149,941,702.35
Cash paid for distribution of dividends or profits and for interest
821,623,483.60 400,990,321.44
expenses
Including: Dividends and profits paid by subsidiaries to minority
shareholders
Other cash paid related to financing activities 464,211,430.49 608,221,958.76
Subtotal of cash outflow from financial activities 4,088,884,914.09 1,159,153,982.55
Net cash flow from financing activities -1,785,427,414.09 1,117,507,307.83
IV. Impact of exchange rate movements on cash and cash equivalents -1,657,672.55 -654,523.15
V. Net increase in cash and cash equivalents 306,518,824.28 282,209,696.13
Plus: Balance of cash and cash equivalents at the beginning of the
4,370,821,958.17 4,088,612,262.04
period
VI. Balance of cash and cash equivalents at end of period 4,677,340,782.45 4,370,821,958.17
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Wu Kezhen
157
Winner Medical
6. Cash Flow Statement of Parent Company
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item Year 2023 Year 2022
I. Cash flow from financing activities:
Cash from selling goods or offering labor 2,725,815,354.22 7,024,626,852.61
Refund of tax and levies 68,165,815.59 8,723,940.00
Other cash received related to operating activities 49,890,829.94 45,569,799.37
Subtotal of cash inflow from operating activities 2,843,871,999.75 7,078,920,591.98
Cash paid to buy products and accept labor services 4,071,208,907.64 3,123,159,254.41
Cash paid to and for employees 470,253,224.88 488,580,185.70
Taxes and fees paid 192,076,507.34 314,821,144.26
Other cash paid related to operating activities 115,904,010.32 165,828,956.84
Subtotal of cash outflow from operating activities 4,849,442,650.18 4,092,389,541.21
Net cash flow from operating activities -2,005,570,650.43 2,986,531,050.77
II. Cash flow from investment activities:
Cash from investment withdrawal 4,485,782,040.58 6,428,041,223.52
Cash from investment income 917,554,636.32 120,343,865.20
Net cash from disposal of fixed assets, intangible assets and other long-term assets 106,705,409.51 41,772,465.29
Net cash received from the disposal of subsidiaries and other business entities
Other cash received related to investment activities
Subtotal of cash inflow from investment activities 5,510,042,086.41 6,590,157,554.01
Cash paid for the purchase and construction of fixed assets, intangible assets and
125,841,659.50 129,095,084.78
other long term assets
Cash paid for investment 2,752,606,926.68 7,550,845,323.13
Net cash paid for obtaining subsidiaries and other business units 108,812,000.00 2,020,549,500.00
Other cash paid related to investment activities
Subtotal of cash outflow from investment activities 2,987,260,586.18 9,700,489,907.91
Net cash flow from investing activities 2,522,781,500.23 -3,110,332,353.90
III. Cash flow from financing activities:
Receipts from equity securities
Cash received from borrowings 1,870,000,000.00 1,010,000,000.00
158
Item Year 2023 Year 2022
Other cash received related to financing activities 127,857,500.00
Subtotal of cash inflow from financial activities 1,997,857,500.00 1,010,000,000.00
Cash repayments of amounts borrowed 1,420,000,000.00
Cash paid for distribution of dividends or profits and for interest expenses 819,607,699.75 397,234,965.83
Other cash paid related to financing activities 106,980,345.17 377,499,720.17
Subtotal of cash outflow from financial activities 2,346,588,044.92 774,734,686.00
Net cash flow from financing activities -348,730,544.92 235,265,314.00
IV. Impact of exchange rate movements on cash and cash equivalents 923,515.28 -1,231,353.71
V. Net increase in cash and cash equivalents 169,403,820.16 110,232,657.16
Plus: Balance of cash and cash equivalents at the beginning of the period 3,540,343,438.87 3,430,110,781.71
VI. Balance of cash and cash equivalents at end of period 3,709,747,259.03 3,540,343,438.87
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Wu Kezhen
159
Winner Medical
7. Consolidated Statement on Changes in Owners’ Equity
Prepared by: Winner Medical Co., Ltd. Current amount Unit: yuan
Year 2023
Owners’ equities attributable to the owners of parent company
Other equity
instruments
Other Speci Gener
Item Pref Less:
Capital comprehen al Surplus al risk Undistributed Othe Minority Total owners’
Capital stock erre Treasury Subtotal
Perpetu Oth reserve sive reser reserve provisi profit rs equity equities
d stock
al bond ers income ve on
shar
e
I. Ending balance of 426,492,308.0 4,546,247,61 500,082,734. 420,212,7 6,810,953,82 11,704,606,57 478,161,435.
782,778.15 12,182,768,006.45
previous year 0 1.24 11 78.13 9.30 0.71 74
Plus Changes in 14,979,240.4
14,979,240.42 -1,015.32 14,978,225.10
accounting policies 2
Prior period error
correction
Others
II. Beginning 426,492,308.0 4,546,247,61 500,082,734. 420,212,7 6,825,933,06 11,719,585,81 478,160,420.
782,778.15 12,197,746,231.55
balance in current year 0 1.24 11 78.13 9.72 1.13 42
III. Increase/decrease
in the current period (less to 167,895,059.0 -165,121,123. -26,530,291. 1,432,591.2 -217,098,300. -186,361,483.1 98,937,054.7
-87,424,428.40
be filled out with the minus 0 95 26 9 73 3 3
sign “-)
(I) Total 1,432,591.2 580,403,232. 581,835,823.6 49,333,103.8
631,168,927.55
comprehensive income 9 37 6 9
(II) Owner’s invested
3,151,091.47 3,151,091.47 3,151,091.47
and decreased capital
1. Common stock
invested by the owner
2. Capital invested
by other equity instrument
holders
3. Amount of
share-based payment
3,151,091.47 3,151,091.47 3,151,091.47
included in the owner’s
equity
4. Others
-797,501,533. -797,501,533.1
(III) Profit distribution -797,501,533.10
10 0
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk preparation
3. Distribution of -797,501,533. -797,501,533.1
-797,501,533.10
owners (or shareholders) 10 0
4. Others
(IV) Internal transfer 167,895,059.0 -194,425,350. -26,530,291.
of owner’s equity 0 26 26
1. Capital surplus
167,895,059.0 -167,895,059.
transfer to paid-in capital (or
0 00
capital stock)
2. Earned surplus
transfer to paid-in capital (or
capital stock)
3. Earned surplus
covering the deficit
4. Carryforward
retained earnings in
variation of defined benefit
plan
5. Carryforward
retained earnings of other
comprehensive income
-26,530,291.2 -26,530,291.
6. Others
6 26
(V) Special reserve
1. Draw in this
current
2. Use in this current
26,153,134.8 49,603,950.8
(VI) Others 26,153,134.84 75,757,085.68
4 4
IV. Balance at the end 594,387,367.0 4,381,126,48 473,552,442. 2,215,369.4 420,212,7 6,608,834,76 11,533,224,32 577,097,475.
12,110,321,803.15
of current period 0 7.29 85 4 78.13 8.99 8.00 15
160
7. Consolidated Statement on Changes in Owners’ Equity (continued)
Prepared by: Winner Medical Co., Ltd. Last term amount Unit: yuan
Year 2022
Owners’ equities attributable to the owners of parent company
Other equity
instruments Other Specia Genera
Item Less:
comprehen l Surplus l risk Undistributed Othe Minority Total owners’
Capital stock Prefe Perpet Capital reserve Treasury Subtotal
Oth sive reserv reserve provisi profit rs equity equities
rred ual stock
ers income e on
share bond
I. Ending balance of 426,492,308. 4,549,621,096. 257,992,366 -1,556,935. 420,212,77 5,538,135,285 10,674,912,16 12,196,045. 10,687,108,212.7
previous year 00 81 .68 43 8.13 .97 6.80 94 4
Plus: Changes in
14,844,385.21 14,844,385.21 924.66 14,845,309.87
accounting policies
Prior period error
correction
Others
II. Beginning balance in 426,492,308. 4,549,621,096. 257,992,366 -1,556,935. 420,212,77 5,552,979,671 10,689,756,55 12,196,970. 10,701,953,522.6
current year 00 81 .68 43 8.13 .18 2.01 60 1
III. Increase or decrease in
current period Amount 242,090,367 2,339,713.5 1,272,953,398 1,029,829,259 465,963,449
-3,373,485.57 1,495,792,708.94
(less to be filled out with the .43 8 .54 .12 .82
minus sign “-)
(I) Total 2,339,713.5 1,650,717,282 1,653,056,996 24,827,932.
1,677,884,929.14
comprehensive income 8 .64 .22 92
(II) Owner’s invested
-3,373,485.57 -3,373,485.57 -3,373,485.57
and decreased capital
1. Common stock
invested by the owner
2. Capital invested
by other equity instrument
holders
3. Amount of
share-based payment
-3,373,485.57 -3,373,485.57 -3,373,485.57
included in the owner’s
equity
4. Others
-377,763,884. -377,763,884.
(III) Profit distribution -377,763,884.10
10 10
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk preparation
3. Distribution of -377,763,884. -377,763,884.
-377,763,884.10
owners (or shareholders) 10 10
4. Others
(IV) Internal transfer
of owner’s equity
1. Capital surplus
transfer to paid-in capital (or
capital stock)
2. Earned surplus
transfer to paid-in capital (or
capital stock)
3. Earned surplus
covering the deficit
4. Carryforward
retained earnings in
variation of defined benefit
plan
5. Carryforward
retained earnings of other
comprehensive income
6. Others
(V) Special reserve
1. Draw in this
current
2. Use in this current
242,090,367 -242,090,367. 441,135,516
(VI) Others 199,045,149.47
.43 43 .90
1
IV. Balance at the end 426,492,308. 4,546,247,611. 500,082,734 420,212,77 6,825,933,069 478,160,420 12,197,746,231.5
782,778.15 1,719,585,81
of current period 00 24 .11 8.13 .72 .42 5
1.13
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Wu Kezhen
161
Winner Medical
8. Statement on Changes in Owners’ Equity of Parent Company
Prepared by: Winner Medical Co., Ltd. Current amount Unit: yuan
Year 2023
Other equity instruments Other
Item Less: treasury compre Special Undistributed Total owners’
Capital stock Preferr Perpet Capital reserve Surplus reserve Others
ed ual Others stock hensive reserve profit equities
share bond income
I. Ending balance of previous
426,492,308.00 4,571,654,373.59 500,082,734.11 411,397,111.21 4,868,449,855.81 9,777,910,914.50
year
Plus: Changes in accounting
519,777.63 519,777.63
policies
Prior period error correction
Others
II. Beginning balance in current
426,492,308.00 4,571,654,373.59 500,082,734.11 411,397,111.21 4,868,969,633.44 9,778,430,692.13
year
III. Increase/decrease in the current
period (less to be filled out with the minus 167,895,059.00 -191,274,258.79 -26,530,291.26 28,069,460.15 31,220,551.62
sign “-)
(I) Total comprehensive income 825,570,993.25 825,570,993.25
(II) Owner’s invested and
3,151,091.47 3,151,091.47
decreased capital
1. Common stock invested by the
owner
2. Capital invested by other equity
instrument holders
3. Amount of share-based
3,151,091.47 3,151,091.47
payment included in the owner’s equity
4. Others
(III) Profit distribution -797,501,533.10 -797,501,533.10
1. Withdrawal of surplus reserves
2. Distribution of owners (or
-797,501,533.10 -797,501,533.10
shareholders)
3. Others
(IV) Internal transfer of owner’s
167,895,059.00 -194,425,350.26 -26,530,291.26
equity
1. Capital surplus transfer to
167,895,059.00 -167,895,059.00
paid-in capital (or capital stock)
2. Earned surplus transfer to
paid-in capital (or capital stock)
3. Earned surplus covering the
deficit
4. Carryforward retained earnings
in variation of defined benefit plan
5. Carryforward retained earnings
of other comprehensive income
6. Others -26,530,291.26 -26,530,291.26
(V) Special reserve
1. Draw in this current
2. Use in this current
(VI) Others
IV. Balance at the end of current
594,387,367.00 4,380,380,114.80 473,552,442.85 411,397,111.21 4,897,039,093.59 9,809,651,243.75
period
162
8. Statement on Changes in Owners’ Equity of Parent Company (continued)
Prepared by: Winner Medical Co., Ltd. Last term amount Unit: yuan
Year 2022
Other equity instruments
Item Other
Preferr Perpet Less Treasury Special Undistributed Total owners’
Capital stock Other Capital reserve comprehensiv Surplus reserve Others
ed ual stock reserve profit equities
s e income
share bond
I. Ending balance of previous 4,575,027,859.1 3,391,392,215.7
426,492,308.00 257,992,366.68 411,397,111.21 8,546,317,127.39
year 6 0
Plus: Changes in accounting
277,192.47 277,192.47
policies
Prior period error correction
Others
II. Beginning balance in current 4,575,027,859.1 3,391,669,408.1
426,492,308.00 257,992,366.68 411,397,111.21 8,546,594,319.86
year 6 7
III. Increase/decrease in the
1,477,300,225.2
current period (less to be filled out with -3,373,485.57 242,090,367.43 1,231,836,372.27
7
the minus sign “-)
1,855,064,109.3
(I) Total comprehensive income 1,855,064,109.37
7
(II) Owner’s invested and
-3,373,485.57 -3,373,485.57
decreased capital
1. Common stock invested by
the owner
2. Capital invested by other
equity instrument holders
3. Amount of share-based
-3,373,485.57 -3,373,485.57
payment included in the owner’s equity
4. Others
(III) Profit distribution -377,763,884.10 -377,763,884.10
1. Withdrawal of surplus
reserves
2. Distribution of owners (or
-377,763,884.10 -377,763,884.10
shareholders)
3. Others
(IV) Internal transfer of owner’s
equity
1. Capital surplus transfer to
paid-in capital (or capital stock)
2. Earned surplus transfer to
paid-in capital (or capital stock)
3. Earned surplus covering the
deficit
4. Carryforward retained
earnings in variation of defined benefit
plan
5. Carryforward retained
earnings of other comprehensive
income
6. Others
(V) Special reserve
1. Draw in this current
2. Use in this current
(VI) Others 242,090,367.43 -242,090,367.43
IV. Balance at the end of current 4,571,654,373.5 4,868,969,633.4
426,492,308.00 500,082,734.11 411,397,111.21 9,778,430,692.13
period 9 4
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Wu Kezhen
163
Winner Medical
III. Basic information of the Company
1. Company profile
Winner Medical Co., Ltd. (hereinafter referred to as the “the Company” or “our Company”), formerly known as Winner
Industries (Shenzhen) Co., Ltd. (hereinafter referred to as “Winner Industries”), is a wholly foreign-owned enterprise established
on August 24, 2000 with the approval of Shenzhen Municipal Administration for Industry and Commerce. The original business
license number of the Company is: Q.D.Y.S.Z.Zi No. 307199. The original registered capital is HKD 30 million, and the total
investment is HKD 60 million. The Company is wholly owned by Winner International Trading Corporation. The registered
capital was invested in three phases. On April 2, 2001, the registered capital of HKD 18,023,154.30 was invested in monetary
funds, which was verified by the capital verification report (Z.T.Z.T. No.Y2001-1133) of Zhuhai Zhongtuo Zhengtai Accounting
Firm. The business scope of the original company is: the production and operation of sanitary materials, dressings and their
products, medical clothing, textiles, non-woven products and moulded packaging (excluding the products subject to national
export license management).
On May 18, 2001, the Board of Directors of the Company decided to increase the registered capital from HKD 30.00 million to
HKD 60.00 million, and the total investment from HKD 60.00 million to HKD 120.00 million, which was paid in three
installments since the date of registration of the Company. On June 5, 2001, the Company obtained the changed business license
of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles of
Association accordingly.
As of December 21, 2001, it has received the second installment of the registered capital paid by Winner International Trading
Corporation. Winner International Trading Corporation contributed HKD 31,445,194.91 in monetary funds, and this investment
was verified by Shenzhen Zhongpeng Certified Public Accountants, Ltd. (S.P.K.Y. Zi [2002] No.037 capital verification report).
As of February 21, 2002, it has received the third installment of the registered capital totaling HKD 6,005,722.20 paid by Winner
International Trading Corporation, including HKD 3,665,722.20 in currency and HKD 2,340,000.00 in kind. This investment was
verified by Shenzhen Lishang Certified Public Accountants Co., Ltd. (S.L.S.Y. Zi [2002] No.039 capital verification report)
On October 8, 2002, the Board of Directors of the Company decided to increase the Company’s registered capital from HKD
60.00 million to HKD 70.00 million, and the total investment from HKD 120.00 million to HKD 134.00 million. On December 10,
2002, the Company obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau for
Industry and Commerce and amended the Articles of Association accordingly. As of May 27, 2003, it has received the fourth
installment of the registered capital totaling HKD 14,525,928.59 paid by (Hong Kong) Winner International Trading Corporation.
This capital increase was verified by Shenzhen Yuehua Certified Public Accountants Co., Ltd. (S.Y.H.Y. Zi [2003] No.339
capital verification report).
On May 25, 2003, with the approval of the Board of Directors of the Company, the shareholder Winner International Trading
Corporation signed the Equity Transfer Agreement with Winner Group Limited, under which Winner International Trading
Corporation transferred 100% of its equity to Winner Group Limited. On July 28, 2003, the Company obtained the changed
business license of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and Commerce and amended
the Articles of Association accordingly.
On June 8, 2006, the Board of Directors of the Company decided to increase the Company’s registered capital from HKD 70.00
million to HKD 126.00 million, and the total investment from HKD 134.00 million to HKD 270.00 million. The newly increased
registered capital was invested within half a year after the registration of the change. On June 30, 2006, the Company obtained the
changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and Commerce and
amended the Articles of Association accordingly.
As of August 30, 2006, the Company transferred undistributed profits HKD 49,423,804.00 to paid -in capital, and the paid-in
capital after the change was HKD 119,423,804.00. This capital increase was verified by the Shenzhen Branch of Beijing
Zhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi [2007] No.043 capital verification report).
On December 2, 2006, the Board of Directors of the Company decided to change the original investment period of the
shareholders from June 30, 2006 to December 31, 2006 into June 30, 2006 to June 30, 2007. On December 6, 2006, the Company
was approved by General Administration for Industry and Commerce of Shenzhen to change its type of enterprise from a wholly
foreign-owned enterprise into a limited liability company (wholly owned by foreign legal person) and change its business term.
164
As of March 15, 2007, the Company transferred undistributed profits HKD 6,576,196.00 to paid -in capital, and the cumulative
paid-in capital after the change was HKD 126.00 million. This capital increase was verified by Shenzhen Hengping Certified
Public Accountants Co., Ltd. (S.H.P.W.Y. Zi [2007] No.0004 capital verification report). On August 13, 2007, the Company
obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and
Commerce and amended the Articles of Association accordingly. The registration number was changed from Q.D.Y.S.Z. Zi No.
307199 to 440306503230896.
On June 8, 2009, the Board of Directors of the Company decided to add sterilization technology services to the business scope.
On June 30, 2009, the Company obtained the changed business license of the enterprise legal person issued by Shenzhen
Municipal Bureau for Industry and Commerce and amended the Articles of Association accordingly.
On April 1, 2010, the Board of Directors of the Company decided to increase the Company’s registered capital from HKD 126.00
million to HKD 192.00 million, and the total investment from HKD 270.00 million to HKD 380.00 million. The increased amount
of the registered capital was contributed by the original shareholders in cash in foreign currency.
As of June 18, 2010, it has received the registered capital totaling USD 8,473,500.00 (equivalent to HKD 66,000,653.75) paid by
Winner Group Limited. This capital increase was verified by Shenzhen Hengping Certified Public Accountants LLP (S.H.P.S.
(W.) Y. Zi [2010] No.13 capital verification report). On July 2, 2010, the Company obtained the changed business license of the
enterprise legal person issue d by Shenzhen Administration for Market Regulation (since September 9, 2009, Shenzhen Municipal
Bureau for Industry and Commerce has been integrated into Shenzhen Administration for Market Regulation) and amended the
Articles of Association accordingly.
On April 27, 2011, with the approval of General Administration for Industry and Commerce of Shenzhen, the Company changed
its residence from No. 1 Wenjian Avenue, Bulong Road, Longhua Street, Bao’an District, Shenzhen City to Winner Industrial
Park beside Bulong Road, Longhua Street, Bao’an District, Shenzhen City.
On February 20, 2013, the Board of Directors of the Company decided and agreed to increase the Company’s registered capital by
HKD 4,271,300. The registered capital after the change was HKD 196,271,300, and the total investment was still HKD
380,000,000.
The shareholder, Winner Group Limited made capital contribution with its equity in the six enterprises. The equity contribution is
as follows:
Book value of equity
Amount of equity Amount included in
contribution net Amount of equity contribution
contribution capital surplus
Proportion assets
Name of invested entity
(%) (10,000 yuan) (10,000 yuan) (10,000 yuan) (Convert to HKD 10,000)
(d) = (b)*conversion exchange
(a) (b) (c)= (a)- (b)
rate
Winner Medical (Chongyang) Co., Ltd. (formerly
known as “Chongyang Winner Medical Textile Co., 100.00 3,232.93 32.33 3,200.60 39.94
Ltd.”)
Winner Medical (Jiayu) Co., Ltd. (formerly known as
100.00 3,520.95 35.21 3,485.74 43.50
“Jiayu Winner Medical Textile Co., Ltd.”)
Winner Medical (Jingmen) Co., Ltd. (formerly known
100.00 2,527.24 25.27 2,501.97 31.22
as “Jingmen Winner Medical Textile Co., Ltd.”)
Yichang Winner Medical Textile Co., Ltd. 100.00 1,800.69 18.01 1,782.68 22.25
Winner Medical (Huanggang) Co., Ltd. 75.00 19,729.30 197.29 19,532.01 243.76
Winner Medical (Tianmen) Co., Ltd. (formerly known
100.00 3,760.89 37.61 3,723.28 46.46
as “Hubei Winner Textile Co., Ltd.”)
Total 34,572.00 345.72 34,226.28 427.13
165
Winner Medical
After the capital increase, the original shareholders still have 100% of the Company’s equity, and the above six companies
become the Company’s subsidiaries. On July 25, 2013, the Company obtained the changed business license of the enterprise legal
person issued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Association accordingly.
This capital increase was verified by the Shenzhen Branch of Zhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi
[2013] No.102 capital verification report).
On September 2, 2013, the Board of Directors of the Company decided to increase the Company’s registered capital by HKD
18,068,200. The registered capital after the change was HKD 214,339,500, and the total investment was still HKD 380.00 million.
The new investment was subscribed by Shenzhen Kangsheng Investment Partnership (limited partnership) (hereinafter referred to
as the “Kangsheng Investment”), Shenzhen Kangxin Investment Partnership (limited partnership) (hereinafter referred to as the
“Kangxin Investment”), Shenzhen Kanglong Investment Partnership (limited partnership) (hereinafter referred to as the
“Kanglong Investment”) with HKD 10,322,400, HKD 4,414,500 and HKD 3,331,300 respectively. After the completion of the
capital increase, the Company’s ownership structure was changed as follows:
Investor Capital contribution amount (HKD ten thousand) Proportion (%)
Winner Group Limited 19,627.13 91.5703
Kangsheng Investment 1,032.24 4.8159
Kangxin Investment 441.45 2.0596
Kanglong Investment 333.13 1.5542
Total 21,433.95 100.0000
On October 17, 2013, the Company obtained the changed business license of the enterprise legal person issued by Shenzhen
Administration for Market Regulation and amended the Articles of Association accordingly. This capital increase was verified by
Shenzhen Hengping Certified Public Accountants LLP (S.H.P.S.Y. Zi [2013] No.035 capital verification report).
On October 26, 2013, the Board of Directors of the Company decided to change its residence from Winner Industrial Park beside
Bulong Road, Longhua Street, Bao’an District, Shenzhen City to Winner Industrial Park, No. 660 Bulong Road, Longhua New
District, Shenzhen City. On November 4, 2013, the Company completed the industrial and commercial registration of changes,
obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and
Commerce and amended the Articles of Association accordingly.
On July 1, 2014, the Board of Directors of the Company decided and agreed to increase the Company’s registered capital by HKD
3,646,600. The registered capital after the change was HKD 217,986,100, and the total investment was still HKD 380,000,000.
The capital increase was made by the original shareholder, Kangsheng Investment, which subscribed HKD 3,646,600 with 13.585
million yuan, and the increased registered capital was paid in two installments. After the completion of the capital increase, the
Company’s ownership structure was changed as follows:
Investor Capital contribution amount (HKD ten thousand) Proportion (%)
Winner Group Limited 19,627.13 90.0385
Kangsheng Investment 1,396.90 6.4082
Kangxin Investment 441.45 2.0251
Kanglong Investment 333.13 1.5282
Total 21,798.61 100.0000
On July 24, 2014, the Company obtained the changed business license of the enterprise legal person issued by Shenzhen
Administration for Market Regulation and amended the Articles of Association accordingly. This capital increase was verified by
Shenzhen Hengping Certified Public Accountants LLP (S.H.P.S.Y. Zi [2014] No.030 and S.H.P.S.Y. Zi [2015] No.003 capital
verification reports.
166
On July 28, 2014, the board of directors of the Company decided to agree that the shareholder of the Company, Wenjian Group
Limited, would transfer its 2.9503% equity of the Company to Kangxin Investment, Kanglong Investment, and the newly
introduced shareholder, Shenzhen Kangli Investment Partnership (limited partnership) (hereinafter referred to as “Kangli
Investment”). After the completion of the equity transfer, the Company’s ownership structure was changed as follows:
Investor Capital contribution amount (HKD ten thousand) Proportion (%)
Winner Group Limited 18,984.01 87.0882
Kangsheng Investment 1,396.90 6.4082
Kangxin Investment 740.83 3.3985
Kanglong Investment 447.37 2.0523
Kangli Investment 229.50 1.0528
Total 21,798.61 100.0000
On August 29, 2014, the Company obtained the changed business license of the enterprise legal person issued by Shenzhen
Administration for Market Regulation and amended the Articles of Association accordingly.
On September 28, 2014, the Board of Directors of the Company decided and agreed to increase the Company’s registered capital
by HKD 22,550,300. The registered capital after the change was HKD 240,536,400, and the total investment was still HKD
380.00 million. The new registered capital was subscribed by Beijing Sequoia Xinyuan Equity Investment Center (L.P.)
(hereinafter referred to as “Sequoia Xinyuan”) with 300.00 million yuan. After the completion of the capital increase, the
Company’s ownership structure was changed as follows:
Investor Capital contribution amount (HKD ten thousand) Proportion (%)
Winner Group Limited 18,984.01 78.9236
Kangsheng Investment 1,396.90 5.8074
Kangxin Investment 740.83 3.0800
Kanglong Investment 447.37 1.8599
Kangli Investment 229.50 0.9541
Sequoia Xinyuan 2,255.03 9.3750
Total 24,053.6400 100.0000
As of October 31, 2014, it has received 300.00 million yuan from Sequoia Xinyuan in monetary funds. On November 06, 2014,
the Company obtained the changed business license of the enterprise legal person issued by Shenzhen Administration for Market
Regulation and amended the Articles of Association accordingly. This capital increase was verified by the Shenzhen Branch of
Zhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi [2014] No.087 capital verification report).
On April 30, 2015, through the resolution of the Board of Directors of the Company, with February 28, 2015 as the base date,
Winner Industries was wholly changed into a limited liability Company, with a registered capital of 368 million yuan. Pursuant to
the stipulations outlined in the promoter agreement and articles of association, each shareholder’s audited net assets as of
February 28, 2015, amounted to 1,058,194,956.32 yuan. These assets were converted into 368 million shares at a ratio of 1:0.3478.
Par value of each share was 1 yuan, and the total share capital was 368 million yuan and held separately by the original
shareholders in accordance with their original proportions; the remaining 690,194,956.32 yuan was included in the capital surplus
(due to the change of calculation policy of Company’s receivables bad debt provision during the reporting period, the audited net
assets of the Company as of the base date of share reform were adjusted to 1,050,812,354.45 yuan, and the corresponding share
conversion ratio was adjusted to 1:0.3502). June 4, 2015, with the approval of Economy, Trade and Information Commission of
Shenzhen Municipality, Winner Industries was wholly changed into a limited liability company, renamed as “Winner Medical Co.,
Ltd.”, and obtained the business license of enterprise legal person with the registration number of 440306503230896.
167
Winner Medical
On May 28, 2018, after being voted through and approved by the extraordinary general meeting of shareholders, the Company
agreed to increase the registered capital by 8,492,308 yuan, with the registered capital after the change of 376,492,308 yuan. The
new registered capital was subscribed by Shenzhen Capital Group Co., Ltd. (hereinafter referred to as “SCGC”) with 300.00
million yuan. After the completion of the capital increase, the Company’s ownership structure was changed as follows:
Investor Amount of contribution (10,000 yuan) Proportion (%)
Winner Group Limited 29,043.8848 77.1434
Kangsheng Investment 2,137.1232 5.6764
Kangxin Investment 1,133.4400 3.0105
Kanglong Investment 684.4432 1.8179
Kangli Investment 351.1088 0.9326
Sequoia Xinyuan 3,450.0000 9.1635
SCGC 849.2308 2.2556
Total 37,649.2308 100.0000
As of June 13, 2018, it has received 300.00 million yuan from SCGC in monetary funds. On June 15, 2018, Shenzhen
Administration for Market Regulation issued the Notice of Change (Filing) (No.: 21801665051) on this change and approved the
capital increase. The Company amended the Articles of Association in respect of the above matters. The Company amended the
Articles of Association in respect of the above matters. This capital increase was verified by BDO China Shu Lun Pan Certified
Public Accountants LLP (X.K.S.B.Zi [2018] No.ZI10525 capital verification report).
On February 28, 2018, the Company obtained the renewed business license of the enterprise legal person issued by Shenzhen
Administration for Market Regulation with the unified social credit code 91440300723009295R.
On August, 18, 2020, after the reply of China Securities Regulatory Commission on Approval of the Registration of the Initial
Public Offering of Winner Medical Co., Ltd. (Z.J.X.K. [2020] No.1822), the Company issued 50 million common shares in RMB
to the public, which was listed on the Shenzhen Stock Exchange on September 17, 2020. Upon completion of the issuance, the
registered capital of the Company was 426,492,308 yuan.
At the 2022 Annual General Meeting of Shareholders, the equity distribution plan was reviewed and endorsed. Based on the
419,737,649 shares post the deduction of repurchased shares, the plan includes a cash dividend of 19.00 yuan (tax included) for
every 10 shares, alongside a conversion of every 10 shares into 4 shares of capital stock. Subsequently, the Company’s share
capital was adjusted to 594,387,367.00 yuan.
The Company belongs to textile industry.
Business term: sustainable operation.
Business scope: Engaged in the production and operation of Class II and III 6864 medical and sanitary materials, medical
biological materials, dressings and products, medical clothing, protective equipment, textiles, non-woven products, and molded
packaging (excluding goods managed under national export licenses), along with related products such as disposable consumables
and molded packaging. Additionally, involved in all Class I medical devices, all Class II medical devices (excluding in vitro
diagnostic reagents), and Class III medical devices.
168
Medical hygiene materials and dressings, medical suture materials and adhesives, medical polymer materials and products (except
disposable transfusion apparatus (needle)), general diagnostic instruments, medical cold treatment, low temperature, refrigerating
equipment and tools, cotton household articles, cotton apparel, cotton costume, pure cotton spunlace non-woven fabric and its
manufactured products, cotton, disinfection products, daily necessities, cosmetics, protective equipment and instruments and
meters (if it does not involve goods subject to state trading, or involves goods subject to quotas, license management and other
special provisions, it shall apply in accordance with relevant regulations of the state); provide the technical consulting, technical
services and after-sales services of above-mentioned products; sterilization technical services (if it needs to obtain relevant
qualifications to operate, it shall apply in accordance with relevant regulations); enterprise management consulting, business
information consulting, economic information consulting, warehouse services (excluding hazardous chemicals, precursor
chemicals, refined oil and other dangerous goods), own property leasing (it can be operated only with the legal real estate
ownership certificate under the Company’s name). The above business scope does not include the items subject to special
administrative measures for access stipulated by the state, and those involving the record and licensing qualifications need to
obtain the relevant certificates before operation.
Domicile of the Company: F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi Subdistrict,
Longhua District, Shenzhen City; Winner Industrial Park, No.660 Bulong Road, Longhua New District, Shenzhen.
The financial statements were approved by the Board of Directors of the Company on April 23, 2024.
2. Scope of consolidated financial statements
As of Sunday, December 31, 2023, the subsidiaries in the consolidated financial statements of the Company are as follows:
Subsidiary name
Winner Medical (Jingmen) Co., Ltd. (hereinafter referred to as “Winner Medical (Jingmen)”)
Yichang Winner Medical Textile Co., Ltd. (hereinafter referred to as “Winner Medical (Yichang)”)
Winner Medical (Tianmen) Co., Ltd. (hereinafter referred to as “Winner Medical (Tianmen)”)
Winner Medical (Chongyang) Co., Ltd. (hereinafter referred to as “Winner Medical (Chongyang)”)
Winner Medical (Jiayu) Co., Ltd. (hereinafter referred to as “Winner Medical (Jiayu)”)
Winner Medical (Hong Kong) Ltd. (hereinafter referred to as “Hong Kong Winner”)
Winner (Huanggang) Cotton Processing & Trading Co., Ltd. (hereinafter referred to as “Huanggang Cotton”) (Huanggang Cotton was merged by Winner
Huanggang in 2023.)
Winner Medical (Huanggang) Co., Ltd. (hereinafter referred to as “Winner Medical (Huanggang)”)
Shenzhen Purcotton Technology Co., Ltd. (hereinafter referred to as “Shenzhen Purcotton”)
Guangzhou Purcotton Medical Technology Co., Ltd. (hereinafter referred to as “Guangzhou Purcotton”)
Beijing Purcotton Technology Co., Ltd. (hereinafter referred to as “Beijing Purcotton”)
Shanghai Purcotton Technology Co., Ltd. (hereinafter referred to as “Shanghai Purcotton”)
Shenzhen Qianhai Purcotton E-Commerce Co., Ltd. (hereinafter referred to as “Qianhai Purcotton”)
Winner Medical Malaysia Sdn. Bhd. (hereinafter referred to as “Winner Medical Malaysia”)
Winner Medical (Heyuan) Co., Ltd. (hereinafter referred to as “Winner Medical (Heyuan)”)
Winner Medical (Wuhan) Co., Ltd. (hereinafter referred to as “Winner Medical (Wuhan)”) (former name: Hubei Winner Medical Co., Ltd.)
Shenzhen PureH2B Technology Co., Ltd. (hereinafter referred to as “PureH2B”)
Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd. (hereinafter referred to as “Purunderwear”)
169
Winner Medical
Subsidiary name
Huanggang Purcotton Ltd. (hereinafter referred to as “Huanggang Purcotton”)
Winner Medical Technology (Foshan) Co., Ltd. (hereinafter referred to as “Winner Medical (Foshan)”)
Zhejiang Longterm Medical Technology Co., Ltd. (hereinafter referred to as “Longterm Medical”)
Xi’an Longtemu Medical Technology Co., Ltd. (hereinafter referred to as “Xi’an Longtemu”)
Hangzhou Shengyi Technology Co., Ltd. (hereinafter referred to as “Hangzhou Shengyi”)
Deqing Longterm Medical Silica Gel Products Co., Ltd. (hereinafter referred to as “Deqing Longterm”)
Longterm Medical US LLC (hereinafter referred to as “American Longterm”)
LONGTERM MEDICAL,S.DE.R.L.DE C.V (hereinafter referred to as “Mexico Longterm”)
Winner Guilin Latex Co., Ltd. (hereinafter referred to as “Winner Guilin”)
Winner Medical (Hunan) Co., Ltd. (hereinafter referred to as “Winner Medical (Hunan)”)
Hunan Ruian Medical Device Technology Co., Ltd. (hereinafter referred to as “Ruian Medical Device”)
Shenzhen Junjian Medical Device Co., Ltd. (hereinafter referred to as “Junjian Medical”)
Shanghai Hongsong Medical Device Co., Ltd. (hereinafter referred to as “Shanghai Hongsong”)
Winner (Jinzhou) Latex Products Co., Ltd. 3* (hereinafter referred to as “Winner Jinzhou”)
Wuhan Purcotton Ltd. 4* (hereinafter referred to as “Wuhan Purcotton”)
Hong Kong Purcotton Ltd. 5* (hereinafter referred to as “Hong Kong Purcotton”)
Nature Health Development (Hong Kong) Co., Ltd. (hereinafter referred to as “Pan-China (H.K.)”)
Winner Medical (Wuhan) Digital Technology Co., Ltd. 7* (hereinafter referred to as “Wuhan Digital Technology”)
1*: Mexico Longtai was established in 2023.
2*: Shanghai Hongsong was integrated through Mergers and Acquisitions on April 30, 2023.
3*: Winner Jinzhou was integrated through Mergers and Acquisitions on July 1, 2023.
4*: Purcotton Wuhan was established in 2023.
5*: Purcotton Hong Kong was established in 2023.
6*: Pan-China (H.K.) was established in 2023.
7*: Wuhan Digital Technology was established in 2023.
The scope of the consolidated financial statements for this reporting period and its changes are detailed in the notes “IX.
Consolidation scope changes” and “X. Interests in other entities”.
170
IV. Preparation basis of financial statements
1. Preparation basis
This financial statement is prepared in accordance with the Accounting Standard for Business Enterprises - Basic Standard issued
by the Ministry of Finance, various special accounting standards, guideline for application of accounting standard for business
enterprises, ASBE interpretations and other relevant regulations (hereinafter collectively referred to as “Accounting Standards for
Business Enterprises”) and No.15 of Compilation Rules for Information Disclosure by Companies Offering Securities to the
Public - General Provisions of Financial Reports issued by China Securities Regulatory Commission.
2. Continual operation
There are no events affecting the Company’s going-concern ability and it is expected that the Company will be able to operate as
a going concern within the next 12 months. The Company’s financial statements are prepared on the basis of the assumption of
going concern.
V. Significant accounting policies and accounting estimates
Specific accounting policy and accounting estimate:
The following significant accounting policy and accounting estimate of the Company are formulated in accordance with the
Accounting Standards for Business Enterprises. The business not mentioned is implemented in accordance with the relevant
accounting policies in the Accounting Standards for Business Enterprises.
1. Statement of compliance with accounting standards for business enterprises
These financial statements comply with the requirements of the Accounting Standards for Business Enterprises issued by the
Ministry of Finance, and truly and completely reflect the consolidated and parent Company financial position of the Company on
Sunday, December 31, 2023 and the business performance and cash flows of the Company in the first half of 2023.
2. Accounting period
The fiscal year of the Company runs from January 1 to December 31 of each calendar year.
3. Operating cycle
The operating cycle of the Company is 12 months.
4. Reporting currency
The reporting currency of the Company is RMB.
5. Methodology for determining materiality criteria and selection rationale
□ Applicable □ Not applicable
171
Winner Medical
Item Materiality standard
Important individual accounts receivable with allowances for doubtful
5 million yuan
debts
Provision for bad debts on significant receivables is either recovered or
5 million yuan
reversed
Write-off of important accounts receivable 5 million yuan
Important prepaid accounts aged over one year 5 million yuan
Important accounts payable aged over one year 5 million yuan
The amount incurred or the balance at the end of the period surpasses 30
Important construction in progress
million yuan
Important cooperative enterprises or joint ventures More than 0.5% of total assets
6. Accounting treatment of business combination involving enterprises under and not under common control
Business combination involving enterprises under the same control: the assets and liabilities acquired by the merging party in the
business combination (including the goodwill formed by the final controlling party by purchasing the merged party) shall be
measured on the basis of the book value of the assets and liabilities of the merged party in the consolidated financial statements of
the final controlling party on the merger date. The difference between the book value of the net assets obtained and the
consideration paid for the combination (or total par value of issued shares) is adjusted against capital reserve (capital stock
premium); if the capital reserve (capital stock premium) is not sufficient to absorb the difference, the retained earnings shall be
adjusted.
Business combination not involving enterprises under common control: the cost of combination is the fair value of the assets paid,
liabilities incurred or assumed and equity securities issued by the acquirer on the acquiring date for acquisition of the control right
of the acquiree. If the cost of combination is greater than the share of the fair value of the acquiree’s identifiable net assets
acquired in the combination, the difference is recognized as goodwill; if the cost of combination is less than the share of the fair
value of the acquiree’s identifiable net assets acquired in the combination, the difference is included in the profit and loss of the
current period. The acquiree’s identifiable assets, liabilities and contingent liabilities obtained by the acquirer in the combination
meeting the recognition conditions are measured at fair value on the acquiring date.
The directly related expenses incurred for the business combination are included in the profit and loss of the current period; the
transaction costs associated with the issue of equity or debt securities for the business combination are included in the initially
recognized amounts of the equity or debt securities.
7. The criterion of control the methods of preparing consolidated financial statements
1. The criterion of control
The consolidation scope of the consolidated financial statements is determined on a control basis and includes the Company and
all subsidiaries. Control means that the Company has the power over the invested entity, enjoys variable returns by participating
in the relevant activities of the invested entity, and has the ability to use the power to influence the amount of returns.
2. Consolidation procedures
The Company regards the whole enterprise group as an accounting entity and prepares consolidated financial statements in
accordance with unified accounting policies to reflect the overall financial position, operating results and cash flow of the
enterprise group. The impact of internal transactions between the Company and its subsidiaries and between the subsidiaries are
offset. If the internal transaction indicates that impairment loss has occurred to relevant assets, such loss shall be recognized in
full. If the accounting policies and the accounting periods adopted by the subsidiaries are inconsistent with those of the Company,
necessary adjustments shall be made in accordance with the accounting policies and the accounting periods of the Company when
preparing the consolidated financial statements.
172
The minority shareholders’ share of the subsidiary’s owners’ equity, current net profit and loss and current comprehensive income
shall be separately listed under the owners’ equity item in the consolidated balance sheet, under the net profit item and under the
total comprehensive income item in the consolidated income statement. If the current loss shared by the minority shareholders of
the subsidiary exceeds their share in the owner’s equity of the subsidiary at the beginning of the period, the minority equity shall
be offset by the balance.
(1) Increase of subsidiaries or business
During the reporting period, if subsidiaries or business are increased due to business combination involving enterprises under the
same control, the operating results and cash flow from the beginning of the current period to the end are incorporated into the
consolidated financial statements, and the opening balance in the consolidated financial statements and the related items in
comparative statements are adjusted, which shall be regarded that the reporting subject after combination has been existed since
the initial control point of the ultimate controlling party.
If the invested party under the same control is controlled by the additional investment and other reasons, the equity investment
held before obtaining the control of the merged party, and the relevant profits and losses, other comprehensive income and other
net assets and other net assets changes between the date of acquisition of the original equity and the date on which the merging
party and the merged party are under the same control (whichever is later) and the merger date shall offset the period of between
the opening retained earnings or current profits and losses in the comparative reporting period.
During the reporting period, if subsidiaries or business are increased due to business combination of enterprises not under the
same control, it shall be included in the consolidated financial statements as of the acquisition date on the basis of the fair value of
all identifiable assets, liabilities and contingent liabilities determined on the acquisition date.
If it is able to exercise control over the invested entity that is not under the same control due to additional investment or other
reasons, the equity held by the acquiree before the acquisition date shall be re-measured according to the fair value of the equity
on the acquisition date, and the difference between the fair value and the book value shall be included into the current investment
income. Other comprehensive income, which can be reclassified into profit and loss in the future, and other changes in owners’
equity under the equity method as related to the acquiree’s equity held before the acquisition date are converted to the investment
income of the current period as of the acquisition date.
(2) Disposal of subsidiary
1 General disposal method
When the Company loses the control right over the invested entity due to disposal of part of the equity investment or other
reasons, the residual equity investment after the disposal shall be re-measured at its fair value on the date of losing the control
right. The difference between the sum of the consideration acquired by disposal of the equity and the fair value of the residual
equity, minus the sum of the share of the net assets of the original subsidiary continuously calculated from the acquisition date or
the merging date and the goodwill according to the original shareholding ratio, shall be included in the investment income in the
period of lose of the control right. Other comprehensive income related to the equity investment of the original subsidiary that can
be reclassified into profit and loss in the future, and other changes in owners’ equity under the equity method are converted to the
investment income in the period of lose of the control right.
2 Disposal of subsidiary by steps
For disposal of the equity investment in the subsidiary by steps through multiple transactions till loss of the control right, the
terms, conditions and economic impact of the disposal on each transaction in respect of the equity investment of the subsidiary are
subject to one or more of the following circumstances, which generally indicate that the multiple transactions are package deals:
i. The transactions were entered into simultaneously or with consideration of their mutual influence;
ii. These transactions as a whole can only achieve a complete business result;
iii. The occurrence of one transaction depends on the occurrence of at least one other transaction;
iv. A transaction is not economical alone, but economic when considered with other transactions.
If each transaction belongs to a package deal, each transaction shall be subject to accounting treatment as a deal for disposal of
subsidiary and loss of the control right; the difference between the disposal price and the share of net assets of the subsidiary
corresponding to the disposal of investment before the loss of control right is recognized as other comprehensive income in the
consolidated financial statements and transferred into the current profit and loss in the period of loss of control right.
173
Winner Medical
If each transaction does not belong to a package deal, the equity investment of the subsidiary shall be subject to accounting
treatment without loss of control right before losing the control right; and accounting treatment shall be carried out in accordance
with the general disposal method of the subsidiary when losing the control right.
(3) Purchase of the minority equity of the subsidiaries
The difference between the long-term equity investment obtained due to the purchase of minority equity and the share of the net
assets to be enjoyed and continuously calculated from the acquisition date or merging date according to the increased
shareholding ratio is adjusted against the capital stock premium in the capital reserve in the consolidated balance sheet; if the
capital stock premium in the capital reserve is not sufficient to offset the difference, the retained earnings shall be adjusted.
(4) Partial disposal of equity investment in subsidiaries without loss of control right
The difference between the disposal price and the disposal of long-term equity investment and the share of the net assets to be
enjoyed and continuously calculated from the acquisition date or merging date, is adjusted against the capital stock premium in
the capital reserve in the consolidated balance sheet; if the capital stock premium in the capital reserve is not sufficient to offset
the difference, the retained earnings shall be adjusted.
8. Joint venture arrangements classification and Co-operation accounting treatment
The joint venture arrangement is divided into joint management and joint venture.
Joint management means the joint venture arrangement in which the joint venture parties enjoy the assets and assumes the
liabilities related to the arrangement. The Company confirms the following items related to the share of interests in the joint
operation:
(1) Recognize the assets held solely by the Company and the assets jointly held according to the share of the Company;
(2) Recognize the liabilities undertaken solely by the Company and the liabilities jointly undertaken according to the share of
the Company;
(3) Recognize the income generated from the sale of the Company’s share of the joint operation output;
(4) Recognize the income generated from the sale of outputs of the joint operation according to the share of the Company;
(5) Recognize the expenses incurred separately and the expenses incurred in joint operation according to the share of the
Company
The Company’s investment in the joint venture shall be accounted by the equity method. See Note “V. 22 Long-term equity
investment” for details.
9. Determining standards of cash and cash equivalents
Cash represents the Company’s cash on hand and the deposit readily available for payment. Cash equivalents represent the
short-term, highly liquid investments that are readily convertible into known amounts of cash and that are subject to an
insignificant risk of change in value.
10. Foreign currency transaction and foreign currency statement translation
1. Foreign Currency Business
Foreign currency transaction adopts the spot exchange rate on the date of the transaction as the conversion exchange rate to
convert the foreign currency amount into RMB for reporting.
At the balance sheet date, the balance of foreign currency monetary items are converted by using the spot exchange rates at the
balance sheet date. Exchange differences arising therefrom are recognized in current profit and loss, except the exchange
differences related to a specific-purpose borrowing denominated in foreign currency that qualify for capitalization are treated
according to the capitalization of borrowing costs.
174
2. Conversion of financial statements denominated in foreign currencies
The asset and liability items in the foreign currency balance sheets shall be translated at a spot exchange rate on the balance sheet
date. Among the owner’s equity items, except the ones as “undistributed profits”, others shall be translated at the spot exchange
rate at the time when they are incurred. Income and expense items in the income statement are translated using the annual average
exchange rate.
When disposing of the overseas operation, the balance of the financial statements denominated in foreign currencies related to the
overseas operation shall be transferred from the owner’s equity item to the profit and loss of the disposal period.
11. Financial instruments
The Company recognizes a financial asset, financial liability or equity instrument when becoming a party of the financial
instrument contract.
1. Classification of financial instruments
According to the Company’s business model of managing financial assets and the contractual cash flow characteristics of
financial assets, the financial assets are classified at the initial recognition as: financial assets measured at the amortized cost,
financial assets measured at fair value of which changes are recorded into other comprehensive income, and financial assets at fair
value of which changes are recorded in current profit and loss.
The Company classifies the financial assets that meet the following conditions and are not designated to be measured at fair value
and whose changes are recorded into the profits and losses of the current period as financial assets measured at the amortized cost:
- The business model is aimed at collecting contract cash flows;
- The contract cash flow is only the payment of the principal and interest based on the outstanding principal amount.
The Company classifies the financial assets that meet the following conditions and are not designated to be measured at fair value
and whose changes are recorded into the profits and losses of the current period as financial assets measured at fair value of which
changes are recorded into other comprehensive income (debt instrument):
- The business model is aimed at collecting contract cash flows and the sale of such financial assets;
- The contract cash flow is only the payment of the principal and interest based on the outstanding principal amount.
For non-trading equity instrument investments, the Company may, at the time of initial recognition, irrevocably designate them as
financial assets measured at fair value of which changes are recorded into other comprehensive income (equity instrument). The
designation is made on a single investment basis and the related investments meet the definition of an equity instrument from an
issuer’s perspective.
Except the above financial assets measured at the amortized cost and the financial assets measured at fair value of which changes
are recorded into other comprehensive income, the Company classifies all other financial assets as financial assets at fair value of
which changes are recorded in current profit and loss. Upon initial recognition, if accounting mismatches can be eliminated or
significantly reduced, the Company may irrevocably designate the financial assets that should have been classified as those
measured at the is based amortized cost or measured at fair value of which changes are recorded into other comprehensive income
as the financial assets measured at fair value of which changes are recorded in current profit and loss.
Financial liabilities are classified at the initial recognition as: financial liabilities measured at fair value of which changes are
recorded in current profit and loss and financial liabilities measured at the amortized cost. Financial liabilities that meet one of the
following conditions may be designated at the initial recognition as the financial liabilities measured at fair value of which
changes are recorded in current profit and loss.
1) This designation can eliminate or significantly reduce accounting mismatches.
2) Manage and conduct performance evaluation of the financial liability portfolio or financial assets and financial liability
portfolio on the basis of fair value according to the enterprise risk management or investment strategy set forth in the official
written documents, and rep ort to the key management personnel within the enterprise on this basis.
3) The financial liability contains embedded derivatives that need to be split separately.
175
Winner Medical
2. Recognition basis and measurement method of financial instruments
(1) Financial asset measured on the basis of post-amortization costs
The financial assets measured at the amortized costs include bills receivable, accounts receivable, other receivables, long-term
receivables, debt investment, etc., which shall be initially measured at fair value, and the relevant transaction expenses are
included in the initial recognized amount; the receivables excluding major financing components and the accounts receivable that
the Company decides not to consider the financing components of less than one year shall be initially measured at the contract
transaction price.
The interest calculated by the effective interest rate method during the holding period is recorded into the current profit and loss.
Upon recovery or disposal, the difference between the price obtained and the book value of the financial assets shall be recorded
into the current profit or loss.
(2) Financial assets measured at fair value of which changes are recorded into other comprehensive income (debt instrument)
Financial assets measured at fair value of which the changes are included in other comprehensive income (debt instrument),
including receivables financing and other debt investments, are initially measured at fair value and related transaction costs are
included in the initial recognized amount. The financial asset is subsequently measured at its fair value, and changes in the fair
value are recorded in other comprehensive income, except the interest, impairment loss or gains and exchange gain and loss
calculated by the effective interest rate method.
Upon the de-recognition, the accumulated gains or losses previously recorded in other comprehensive income will be transferred
from other comprehensive income to current profit and loss.
(3) Financial assets measured at fair value of which changes are recorded into other comprehensive income (equity instrument)
Financial assets measured at fair value of which changes are recorded into other comprehensive income (equity instrument),
including other equity instrument investment, are initially measured at fair value and related transaction costs are included in the
initial recognized amount. Such financial assets are subsequently measured at the fair value and the change in the fair value is
recorded into other comprehensive income. The dividends obtained are recorded in current profit and loss.
Upon the de-recognition, the accumulated gains or losses previously recorded in other comprehensive income will be transferred
from other comprehensive income to retained earnings.
(4) Financial assets measured at fair value of which the changes are included in current profit and loss
Financial assets measured at fair value of which changes are recorded in current profit and loss, including trading financial assets,
derivative financial assets, other non-current financial assets, etc., are initially measured at fair value and related transaction
expenses are recorded in current profit and loss. Such financial assets are subsequently measured at the fair value and the change
in the fair value is recorded into current profit and loss.
(5) Financial liabilities measured at fair values, changes of which recorded in the current profits or losses
Financial liabilities measured at fair value of which changes are included in current profit and loss, including trading financial
liabilities, derivative financial liabilities, etc., are initially measured at fair value and related transaction expenses are recorded in
current profit and loss. Such financial liabilities are subsequently measured at the fair value and the change in the fair value is
recorded into current profit and loss.
Upon the de-recognition, the difference between its book value and the consideration paid is recorded in current profit and loss.
(6) Financial liabilities measured at the amortized cost
Financial liabilities measured at amortized cost, including short-term loans, notes payable, accounts payable, other payables,
long-term borrowings, bonds payable and long-term payables, are initially measured at fair value, and related transaction expenses
are included in the initial recognized amount.
The interest calculated by the effective interest rate method during the holding period is recorded into the current profit and loss.
Upon the de-recognition, the difference between the consideration paid and the book value of such financial liability is recorded
in current profit and loss.
176
3. Basis for recognition and method of measurement for derecognition of financial assets and transfer of financial assets
The Company shall derecognize the financial assets if one of the following conditions is satisfied:
- Termination of the contractual right to collect the cash flow of financial assets;
- The financial assets have been transferred, and almost all the risks and remuneration in its ownership have been transferred
to the transferee;
- The financial assets have been transferred, and while the Company has neither transferred nor retained virtually all of the
risks and remuneration in the ownership of the financial assets, it has not retained control of the financial assets.
If the Company and the counterparty modify or renegotiate the contract, and it constitutes a substantial modification, the original
financial asset will be terminated, and a new financial asset will be recognized in accordance with the modified terms.
In the event of a financial asset transfer, if almost all the risks and remuneration in the ownership of the financial asset are
retained, the recognition of the financial asset will not be terminated. The principle of substance over form is adopted when
judging whether the transfer of financial assets meets the above conditions for de-recognition of financial assets.
The Company divides the transfer of financial assets into the whole transfer of financial assets and the partial transfer of financial
assets. If the overall transfer of the financial asset meets the de-recognition conditions, the difference between the following two
amounts shall be recorded into the current profits and losses:
(1) The book value of the transferred financial asset;
(2) The sum of the consideration received from the transfer and the cumulative amount of the fair value changes originally
included in owner’s equity directly (where the financial asset involved in the transfer is measured at fair value and the change is
recorded in other comprehensive income (debt instrument)).
If the partial transfer of the financial asset meets the de-recognition conditions, the book value of the overall transferred financial
asset is distributed between the derecognized and non-derecognized part according to the relative fair value and the difference
between the following two amounts is included in current profit and loss:
(1) The book value of derecognized part;
(2) Sum of the consideration of the derecognized part and the amount of corresponding derecognized part in the total fair value
changes originally included in owner’s equity directly (where the financial asset involved in the transfer is measured at fair value
and the change is recorded in other comprehensive income (debt instrument)).
If the transfer of the financial asset does not meet the conditions of de-recognition, such financial asset shall continue to be
recognized and the consideration received shall be recognized as a financial liability.
4. De-recognition of financial liabilities
Where the current obligation of a financial liability has been discharged in whole or in part, such financial liability or part thereof
shall be derecognized; if the Company enters into an agreement with the creditor to replace the existing financial liabilities by
assuming new financial liabilities, and the contract terms of the new financial liabilities and the existing financial liabilities are
substantially different, the Company shall derecognize the existing financial liabilities and recognize the new financial liabilities
at the same time.
If all or part of the contract terms of the existing financial liabilities are substantially modified, the existing financial liability or
part thereof shall be derecognized, and the financial liabilities after the modification shall be recognized as new financial
liabilities.
When a financial liability is derecognized in whole or in part, the difference between the book value of the derecognized financial
liability and the consideration paid (including non-cash asset transferred out or the new financial liability undertaken) is recorded
in current profit and loss.
If the Company repurchases part of the financial liability, it shall allocate the overall book value of the financial liability on the
repurchase date according to the relative fair value of the continuing recognition part and the de-recognition part. The difference
between the book value allocated to the derecognized part and the consideration paid (including non-cash asset transferred out or
the liability undertaken) is recorded in current profit and loss.
177
Winner Medical
5. Fair value determination method of financial assets and financial liabilities
The fair value of a financial instrument with an active market shall be recognized based on the quotation in the active market. The
fair value of a financial instrument without an active market shall be recognized by means of valuation techniques. Upon
valuation, the Company adopts valuation techniques applicable to the current situation and supported by sufficient available data
and other information, selects input values consistent with the asset or liability characteristics considered by market participants in
the transaction of related assets or liabilities, and gives priority to relevant observable input values. The Company uses
non-observable input values only when relevant observable input values cannot be obtained or are not practicable to obtain.
6. Test method and accounting treatment method of financial instrument impairment
The Company estimates the expected credit losses of financial assets measured at amortized cost, financial assets measured at fair
value of which changes are recorded into other comprehensive income (debt instrument) and financial guarantee contracts.
The Company calculates the probabilistic weighted amount of the present value of the difference between the cash flows
receivable under the contracts and the cash flows expected to be received and recognizes the expected credit loss, taking into
account reasonable and evidential information concerning past events, current conditions and projections of future economic
conditions, and weighting the risk of default.
For receivables and contract assets formed by transactions regulated by Accounting Standards for Business Enterprises No.14 -
Revenue (2017), the Company always measures its loss provision at an amount equivalent to the expected credit loss over the
entire duration, whether or not it contains major financing components.
For lease receivables formed by transactions regulated by Accounting Standards for Business Enterprises No. 21 - Leasing, the
Company opts to consistently measure its loss provisions at an amount equivalent to the expected credit losses throughout the
entire duration.
For other financial instruments, the Company evaluates changes in the credit risk of relevant financial instruments since initial
recognition on each balance sheet date.
By comparing the risk of default of financial instruments on the balance sheet date with the risk of default on the initial
recognition date, the Company determines the change of the default risk during the expected duration of the financial instruments,
so as to assess whether the credit risks of financial instruments have significantly increased since the initial recognition. In general,
the Company will consider that the credit risks of the financial instrument has increased significantly if it is more than 30 days
overdue, unless there is conclusive evidence that the credit risks of such financial instrument have not increased significantly
since the initial recognition.
If the credit risks of the financial instrument is low on the balance sheet date, the Company considers that the credit risks of the
financial instrument have not increased significantly since the initial recognition.
If the credit risks of such financial instrument have increased significantly since the initial recognition, the Company shall
measure its loss provision according to the amount equivalent to the expected credit loss in the entire duration of such financial
instrument. If the credit risks of such financial instrument have not increased significantly since the initial recognition, the
Company shall measure the loss provision according to the amount equivalent to the expected credit loss of such financial
instrument in the next 12 months. The amount of the increase or reversal of the loss provision resulting therefrom shall be
recorded into the current profit and loss as an impairment loss or profit. For financial assets (debt instruments) measured at fair
value and whose changes are included in other comprehensive income, the loss provision is recognized in other comprehensive
income, and the impairment loss or gain is included in the current profit and loss, without reducing the financial asset’s carrying
amount shown on the balance sheet.
If there is objective evidence that a certain receivables has suffered credit impairment, the Company shall make provision for the
impairment of the receivables on an individual basis.
For financial assets (debt instruments) measured at fair value and whose changes are included in other comprehensive income, the
loss provision is recognized in other comprehensive income, and the impairment loss or gain is included in the current profit and
loss, without reducing the financial asset’s carrying amount shown on the balance sheet.
178
The Company measures provisions for losses on promissory notes and receivable financing based on an amount equivalent to the
expected credit losses throughout the entire duration. Based on the credit risk characteristics of notes receivable and receivable
financing, it is divided into different portfolios:
Item Basis for recognition of combination and accrual method of provision for bad debt
Notes receivable:
If the acceptor is a bank with higher credit rating (such as large state-owned commercial banks and listed joint-stock commercial
Banker’s
banks), no provision for bad debts shall be made; if the acceptor is another bank or financial company, the expected credit loss is
acceptance bill
analyzed based on historical information and judged whether it is necessary to make provision for bad debts.
If the acceptor is a non-financial institution, its division is the same as that of accounts receivable (if accounts receivable are
Trade acceptance
transferred to notes receivables, the age of accounts is calculated continuously).
Amounts receivable financing:
Banker’s
If the acceptor is a bank with a higher credit rating, no provision for bad debts will be made.
acceptance bill
The Company’s categorization and determination basis for expected credit losses for notes receivable - commercial acceptance
bills, accounts receivable, other receivables, prepaid accounts, etc. are as follows:
Item Category Class Basis for determination
Accounts receivable:
Amounts receivable from related parties within Unless there is objective evidence that they cannot be recovered, no provision
No credit risk portfolio
the consolidation scope for bad debts will be made for amounts within the scope of consolidation
Segment portfolios based on credit risk characteristics determined by the age of
Amounts receivable from other customers Aging combination
accounts receivable
Other receivables:
There is no credit risk associated with Segment portfolios based on credit risk characteristics determined by the nature
No credit risk portfolio
receivables such as export tax rebates of receivables, primarily including export tax rebates, etc.
Other receivables from related parties within Unless there is objective evidence that they cannot be recovered, no provision
No credit risk portfolio
the consolidation scope for bad debts will be made for amounts within the scope of consolidation
Balance percentage The credit risk characteristics of receivables are divided into combinations based
Security deposit receivable
combination on the nature of the receivables, primarily including deposits and margins.
Segment portfolios based on credit risk characteristics determined by the age of
Other receivables Aging combination
accounts receivable
Advances to suppliers:
Prepaid amounts to related parties within the Unless there is objective evidence that they cannot be recovered, no provision
consolidation scope for bad debts will be made for amounts within the scope of consolidation
Segment portfolios based on the aging of other prepayments to determine credit
Other prepaid amounts Aging combination
risk characteristics
179
Winner Medical
Provision for doubtful accounts for aging portfolio:
Accruing proportion of accounts Accruing proportion of prepaid
Aging Provision rate for other receivables
receivable (%) accounts (%)
Within 1 year (including 1 year) 5 5
1-2 years 10 10
2-3 years 30 30 50
3-4 years 50 50 100
4-5 years 80 80 100
More than 5 years 100 100 100
Bad debt provisions for commercial acceptance bills receivable are accrued according to the expected credit loss rate of accounts
receivable mentioned earlier, with the aging start date of commercial acceptance bills corresponding to that of the accounts
receivable.
The accrual ratio for balance percentage combination is 5% of the balance of accounts receivable.
If the Company no longer reasonably expects that the contract cash flow of a financial asset can be recovered in whole or in part,
it will directly write down the book balance of such financial asset.
12. Notes receivable
Please refer to the Note “V. 11 Financial instruments”.
13. Accounts receivable
This Note “V. 11. Financial Instruments”
14. Amounts receivable financing
This Note “V. 11. Financial Instruments”
15. Other receivables
For the measurement of impairment loss of other receivables other than accounts receivable and notes receivable (including other
receivables, long-term receivables, etc.), it shall be treated by referring to the “V. 11. Financial instruments 6) Test method and
accounting treatment method of financial assets (excluding receivables) impairment”.
16. Contract assets
The Company lists the contractual assets or contractual liabilities in the balance sheet according to the relationship between
performance obligations and customer payment. The Company’s rights to receive consideration for the transfer of goods or
services to the customer (and such rights are subject to factors other than the passage of time) are listed as contractual assets. The
contractual assets and contractual liabilities under the same contract are listed in the net amount. The rights that the Company
owns and unconditionally (depending only on the passage of time) to collect consideration from the customer are listed separately
as receivables.
180
For the recognition methods and accounting treatment methods of the expected credit loss of the contract assets, please refer to
Note “V. 11. Financial Instruments 6) Test method and accounting treatment method of financial assets impairment (excluding
receivables)”.
17. Inventory
1. Classification and cost of inventories
The inventories are classified as raw materials, low priced and easily worn articles, merchandise inventory, work in progress,
goods shipped in transit, goods processed by commission, wrappage, etc.
Inventories are initially measured at cost. The inventory cost includes procurement costs, processing costs, and other expenses
incurred to bring the inventory to its current location and condition.
2. Valuation method of delivered inventory
The sales of purchased finished products are priced according to the moving weighted average method at the time of shipment;
the sales of self-produced products are priced according to the standard cost method at the time of shipment, and the difference
between the actual cost and the standard cost shall be apportioned according to the inventory and sales ratio at the end of the
period.
3. Perpetual inventory system
Adopted as the inventory system.
4. Amortization methods of low priced and easily worn articles and wrappage
(1) The 50-50 amortization method is adopted for low-value consumables;
(2) The packaging adopts the one-time write-off method.
5. Recognition criteria and accrual methods for inventory depreciation provisions
The inventories shall be measured on the balance sheet date according to the cost of inventories or net realizable value, whichever
is lower. If the cost of the inventories is higher than the net realizable value, the inventory falling price reserves shall be
withdrawn. The net realizable value of inventories is the amount of the estimated sale price of the inventories subtracted by the
estimated cost about to occur in completion, estimated selling expenses and related taxes in daily activities.
For the finished products, merchandise inventory, materials for sale and other merchandise inventories directly used for sale, the
net realizable value is recognized by the amount of the estimated sale price of the inventories subtracted by the estimated selling
expenses and related taxes in normal production and operation process; for the material inventory required to be processed, the net
realizable value is recognized by the amount of the estimated sale price of the finished products subtracted by the estimated cost
about to occur in completion, estimated selling expenses and related taxes in normal production and operation process; for the
inventories held to perform the sales contract or labor contract, the net realizable value is calculated on the basis of contract price.
If the number of the inventories held is greater than the quantity ordered in the sales contract, the net realizable value of the
excessive inventories is calculated on the basis of general sale price.
If the influence factors writing down the inventory value before have disappeared after withdrawal of the inventory falling price
reserves, resulting in the net realizable value of the inventories higher than the book value, the amount written down is reversed
within the originally withdrawn amount of inventory falling price reserves and the amount reversed is included in current profits
and losses.
18. Assets held for sales
1. Held for sales
If the book value of an asset is recovered mainly through the sale (including the non-monetary assets exchange of commercial
nature) rather than continuous use of a non-current asset or disposal group, such asset is classified as an asset held for sale.
181
Winner Medical
The Company classifies non-current assets or disposal groups as held for sale if they meet the following conditions
simultaneously:
(1) Immediately available for sale under current conditions in accordance with the usual practice of selling such type of assets
or disposal groups in similar transactions;
(2) The sale is highly likely, that is, the Company has resolved a sale plan and obtained a firm purchase commitment, and the
sale is expected to be completed within one year. Where the relevant provisions require the approval of the relevant authority or
regulatory authority of the Company before the sale, the approval has been obtained.
Where it is classified as non-current assets (not including financial assets and deferred income tax assets, the assets formed by the
employee compensation) or disposal groups held for sale, if its book value is higher than the net amount of the fair value minus
the selling expense, the book value is written down to the net amount of the fair value minus the selling expense, the amount
written down is recognized as the assets impairment loss and included in the current profit and loss. The provision for impairment
of available for sale assets is withdrawn.
2. Discontinued operation
Discontinued operation is a separate component that meets one of the following conditions and has been disposed of or classified
into the held for sale category by the Company:
(1) The component represents an independent principal business or an independent principal area of operation;
(2) The component is part of an associated plan proposed to dispose of an independent principal business or an independent
principal area of operation;
(3) The component is a subsidiary acquired exclusively for resale.
The income statement segregates profits and losses from continuing operations and those from discontinued operations.
Impairment losses, reversal amounts from discontinued operations, other operating gains and losses, and disposal gains and losses
are accounted for within gains and losses from discontinued operations. In the current period, if there are discontinued operations,
the Company will reclassify the information initially presented as profits and losses from continuing operations to profits and
losses from discontinued operations in the comparable accounting period within the current financial statements.
19. Debt investment
Please refer to “11. Financial instruments”.
20. Other debt investments
Please refer to “11. Financial instruments”.
21. Long-term receivables
For details, see Note 41, Lease (2) Accounting treatment of lease as lessor 2) Accounting treatment of finance lease.
22. Long-term equity investment
1. Criteria for determining joint control and significant influence
Joint control refers to the joint control over an arrangement in accordance with the relevant agreement, and the related activities of
the arrangement can only be decided upon the unanimous consent of the parties sharing the control. Where the Company and
other joint venture parties jointly exercise joint control over the invested entity and enjoy rights over the net assets of the invested
entity. The invested entity shall be the joint venture of the Company.
182
Significant influence means the power to participate in the formulation of financial and operating decisions of the invested entity,
but not the power to control or jointly control the formulation of these policies together with other parties. If the Company is able
to exert significant influence on the invested entity, the invested entity is a joint venture of the Company.
2. Recognition of initial investment cost
(1) Long-term equity investment formed by business combination
For the long-term equity investment in a subsidiary formed by business combination under common control, the share of the book
value of the owner’s equity of the combining party in the consolidated financial statements of the final controlling party, on the
combination date, is regarded as the initial cost of the long-term equity investment. The difference between the initial cost of the
long-term equity investment and the book value of paid consideration shall adjust the capital stock premium in capital reserve. If
the capital stock premium in capital reserve is insufficient to offset, the retained earnings shall be adjusted. Where it implements
the control upon the invested entity under the same control due to additional investment or other reasons, the difference between
the initial investment cost of the long-term equity investment recognized according to the above principle and the sum of the book
value of the long-term equity investment before the combination plus the book value of the new consideration for the acquisition
of further shares on the merging date shall adjust the capital stock premium. If the capital stock premium is insufficient to offset,
the retained earnings shall be offset.
For the long-term equity investment in a subsidiary formed by business combination not under common control, the combined
cost recognized on the acquisition date is regarded as the initial cost of the long-term equity investment. Where it implements the
control upon the invested entity not under the same control due to additional investment and other reasons, the sum of the book
value of the original equity investment plus the new investment cost is taken as the initial investment cost.
(2) Long-term equity investment acquired by means other than business combination
If the long-term equity investment is acquired by means of cash payment, the initial investment cost shall be the purchase price
actually paid.
If the long-term equity investment is acquired by issuing equity securities, the initial investment cost shall be the fair value of the
equity securities issued.
3. Subsequent Measurement and Approach for the Determination of Profit and Loss
(1) Long-term equity investment checked by cost method
The long-term equity investment made by the Company in its subsidiaries adopts the cost method, unless the investment meets the
conditions of holding for sale. Except for cash dividends or profits already declared but not yet paid that are included in the price
or consideration actually paid upon acquisition of the investment, the Company recognize the investment income in current period
in accordance with the attributable share of cash dividends or profit distributions declared by the invested entity.
(2) Long-term equity investment checked by equity method
The long-term equity investment of joint ventures and cooperative enterprises shall be calculated by the equity method. The initial
in vestment cost of the long-term equity investment is not adjusted if it is greater than the difference between the fair value share
of the net identifiable assets of the invested entity in the investment; if the initial investment cost of the long-term equity
investment is less than the difference between the fair value share of the net identifiable assets of the invested entity in the
investment, it is recorded in current profit and loss and the cost of the long-term equity investment is adjusted.
The Company recognizes the investment income and other comprehensive income according to its share of net profit or loss and
other comprehensive income of the invested entity, and adjusts the boot value of the long-term equity investment accordingly; the
Company decreases the book value of the long-term equity investment accordingly in accordance with the share of the profit
distribution or cash dividends declared by the invested entity; for changes in owner’s equity of the invested entity other than those
arising from its net profit or loss, other comprehensive income and profit distribution (abbreviated as “other changes in owner’s
equity”), the Company adjusts the book value of the long-term equity investment and records in the owner’s equity.
Upon recognizing the share of the net profit and loss, other comprehensive income and other changes in owner’s equity of the
invested entity, it shall be recognized after adjusting the net income and other comprehensive income of the invested entity on the
basis of the fair value of the identifiable net assets of the invested entity when obtaining the investment, and in accordance with
the Company’s accounting policies and accounting periods.
183
Winner Medical
The profits and losses of unrealized internal transactions between the Company and joint ventures, cooperative enterprises shall
be calculated according to the proportion that should be enjoyed by the Company and shall be offset. On this basis, investment
income shall be recognized, except that the assets invested or sold constitute business. The unrealized internal deal loss between
the Company and the invested entity is recognized in full amount if attributable to the assets impairment loss.
The net loss incurred by the Company to the cooperative enterprise or joint venture, except for the liability for additional loss,
shall be written down to zero by the book value of long-term equity investment and other long-term equity substantially
constituting the net investment in the cooperative enterprise or joint venture. If the cooperative enterprise or joint venture achieves
the net profits in the later periods, the Company recovers to recognize the gain sharing amount after making up for the
unrecognized loss sharing amount with the gain sharing amount.
(3) Disposal of long-term equity investment
On disposal of the long-term equity investment, the balance between the book value of the equity disposed of and the actual price
obtained is charged to current profit and loss.
If part of the long-term equity investment is disposed of by the equity method, and the remaining equity is still accounted by the
equity method, the other comprehensive income recognized by the original equity method shall be carried forward on the same
basis as the relevant assets or liabilities directly disposed of by the invested entity at the corresponding proportion, and the
changes in other owners’ equity shall be carried forward to the current profit and loss on a proportional basis.
If the joint control or significant influence on the invested entity is lost due to the disposal of equity investment or other reasons,
other comprehensive income of the original equity investment recognized by the equity method shall be subject to accounting
treatment through adopting the basis for the direct disposal of relevant assets or debts when the equity method is terminated. Other
changes in owners’ equity will be transferred to current profit and loss when the equity method is terminated.
If the Company loses its control rights over the invested entity due to the disposal of part of the equity investment, when preparing
individual financial statement, in case of the residual equity with joint control or significant influence on the invested entity, the
Company shall calculate and adjust the residual equity with equity method as upon obtaining. Other comprehensive income
recognized before the acquisition of the control right of the invested entity shall be carried forward proportionately on the same
basis as the direct disposal of relevant assets or liabilities by the invested entity, and other changes in owners’ equity recognized
by the equity method shall be carried forward proportionately to the current profit and loss. If the residual equity cannot exercise
joint control or exert significant influence on the invested entity, it shall be recognized as financial assets, the difference between
its fair value and book value on the date of loss of control shall be included in the current profit and loss, and all other
comprehensive income and other changes in owner’s equity recognized before obtaining the control right of the invested entity
shall be carried forward.
If the deals for disposal of the subsidiary’s equity investment by steps through several times of transaction until the loss of the
control right belong to a package deal, the deals shall be subject to accounting treatment as a deal for disposal of the equity
investment in the subsidiary and loss of the control right; the difference between each disposal price and the book value of the
long-term equity investment corresponding to the equity disposed of before the loss of control right is, in individual financial
statements, recognized as other comprehensive income and then transferred into the current profit and loss in the period of loss of
control right. If it does not belong to a package deal, each deal shall be accounted for separately.
23. Investment real estates
Measurement mode of investment real estate
Cost method
Depreciation or amortization method
Investment real estate refers to real estate held for the purpose of earning rent and/or capital appreciation, including leased land
use rights, land use rights held and prepared for transfer after appreciation, leased buildings (including self-constructed buildings
and the buildings that are self built or developed for rent after completion of activities, as well as the buildings that are under
construction or development for future lease).
Subsequent expenditures related to investment real estate are recognized as investment real estate costs when the related economic
benefits are likely to flow in and their costs can be reliably measured; Otherwise, it will be included in the current profit and loss
at the time of occurrence.
The existing investment real estate are measured by our Company through the cost method. For investment real estate measured
through the cost method, buildings for lease is applicable to the same depreciation policy as the Company’s fixed assets, right of
use the leased land is applicable to the same amortization policy as intangible assets.
184
24. Fixed assets
(1) Recognition conditions
1. Recognition and initial measurement of fixed assets
The fixed assets refer to the tangible assets which are held for production of goods, provision of labor, lease or operating
management and whose service life exceeds a fiscal year. The fixed assets can be recognized in the following conditions:
(1) The economic benefits related to the fixed assets are likely to flow to the enterprise;
(2) The cost of the fixed assets can be reliably measured.
The fixed assets are initially measured according to the cost (and the influence of the expected disposal cost factors).
Subsequent expenditure related to fixed assets, if the economic benefits related may flow in and the cost can be reliably measured,
is included in the fixed asset cost; and the book value of the replaced part is derecognized; all other subsequent expenditures are
recorded into current profit and loss when incurred.
(2) Depreciation method
Class Depreciation method Expected service life Residual rate Yearly depreciation
Houses and building Straight-line depreciation 10-38 years 5.00% - 10.00% 2.37% - 9.50%
Machinery equipment Straight-line depreciation 2-15 years 5.00% - 10.00% 6.00% - 47.50%
Transportation equipment Straight-line depreciation 3-10 years 5.00% - 10.00% 9.00% - 31.67%
Electronic equipment and office
Straight-line depreciation 2-10 years 5.00% - 10.00% 9.00% - 47.5%
equipment, etc.
N/A
25. Construction in progress
The construction in progress is measured according to the actual cost incurred. Actual costs include construction costs, installation
costs, borrowing costs eligible for capitalization, and other expenses necessary to bring the construction in progress to a
predetermined usable state. When the construction in progress reaches the intended serviceable condition. it is transferred into
fixed assets and begin to withdraw the depreciation since the next month.
The criteria and timing for transferring the Company’s construction-in-progress to fixed assets are as follows:
Class Criteria and timing for conversion to fixed assets
(1) The main construction project and supporting projects are substantially completed. (2) The construction project meets
the scheduled design requirements and undergoes inspection and acceptance by survey, design, construction, supervision,
Houses and building fire protection, and quality supervision units. (3) The construction project reaches the intended usable state. If final
accounts for completion are pending, it will be transferred to fixed assets at an estimated value based on the actual project
cost from the date of achieving usability.
(1) Relevant equipment and supporting facilities are installed. (2) Equipment operates normally and stably after
Machinery equipment debugging. (3) Production equipment consistently yields qualified products. (4) Equipment is accepted by asset managers
and users post-inspection.
185
Winner Medical
26. Borrowing costs
1. Recognition principle of capitalization of borrowing costs
If the borrowing costs incurred by the Company can be directly attributed to the purchase, construction or production of the assets
eligible for capitalization, they shall be capitalized and recorded into the cost of the relevant assets; other borrowing costs shall be
recognized as expenses according to the amount incurred at the time of occurrence and shall be recorded into the current profit
and loss.
Assets meeting the capitalization conditions refer to the fixed assets, investment real estate, inventories and other assets which can
reach the intended usable or marketable status only after quite a long time of construction or production activities.
2. Capitalization period of borrowing costs
Capitalization period refers to the period from the time point at which borrowing costs begin to be capitalized to the time point at
which borrowing costs cease to be capitalized, excluding the period during which the capitalization of borrowing costs is
suspended. Capitalization begins when borrowing costs meet the following conditions:
(1) Asset expenditures have been incurred, including expenditures incurred in the form of cash payment, transfer of non-cash
assets or undertaking interest-bearing liabilities for the purchase and construction of or production of assets eligible for
capitalization;
(2) Borrowing costs have been incurred;
(3) The purchase, construction or production activities which are necessary to prepare the asset for its intended use or sale have
started.
When the purchase, construction or production of assets that meet the capitalization conditions reach the predetermined usable or
marketable state, the capitalization of borrowing costs shall cease.
3. Capitalization suspension period
If the assets that meet the capitalization conditions are abnormally interrupted in the process of purchase and construction or
production, and the interruption period is more than 3 consecutive months, the capitalization of borrowing costs shall be
suspended; if the interruption is necessary for the purchase, construction or production of the assets that meet the capitalization
conditions to reach the predetermined usable state or marketable state, the borrowing costs shall continue to be capitalized. The
borrowing costs incurred during the interruption period are recognized as the current profit and loss, until the borrowing costs
continue to be capitalized after the purchase and construction or the production activities of the assets are restarted.
4. Calculation method of capitalization rate and capitalization amount of borrowing costs
For the specific borrowing for the purchase and construction or production of assets eligible for capitalization, the capitalization
amount of borrowing costs shall be recognized by the borrowing costs actually occurring in the current period of specific
borrowing, minus the amount of the interest income obtained by depositing the unused borrowing funds in the bank or the
investment income obtained by making temporary investment.
For the general borrowing occupied for the purchase, construction or production of assets that meet the capitalization conditions,
the amount of borrowing expenses to be capitalized for the general borrowing shall be calculated and recognized according to the
weighted average of the accumulated asset expenditure exceeding the specific borrowing multiplied by the capitalization rate of
the general borrowing occupied. The capitalization rate is calculated and recognized according to the weighted average effective
interest rate of the general borrowing.
During the capitalization period, the difference between the exchange of the principal and interest of the specific foreign currency
borrowing shall be capitalized and recorded into the cost of the assets eligible for capitalization. The exchange difference arising
from the principal and interest of foreign currency borrowings other than specific foreign currency borrowing is recorded into the
current profit and loss.
27. Biological assets
N/A
28. Oil and gas assets
N/A
186
29. Intangible assets
(1) Determining the useful life and its basis, estimation, amortization method, or review procedure
1. Pricing methods for intangible assets
(1) The intangible assets are initially measured according to the cost;
The costs of purchased intangible assets include the purchase price, related taxes as well as other expenses incurred to make the
assets reach the intended serviceable conditions and attributable to the assets.
(2) Subsequent measurement
The Company analyzes and judges the useful life of the intangible assets when obtaining.
The intangible assets with limited useful life are amortized within the period when the intangible assets bring economic benefits to
the Company; the intangible assets that cannot be expected to bring economic benefits to the Company are deemed to have
uncertain life and are not amortized.
2. Estimation of useful life of intangible assets with limited life
Item Expected useful life Basis for determining expected service life
Land use right 38-50 years Term of use specified in the land-use right certificate
Software use right 2-8 years Useful life estimated by the management
Trademark right 5-10 years Benefit period specified in the certificate of trademark use
Patent right 5-10 years Benefit period specified in the certificate of patent use
Franchised use right 3 Term of use stipulated in the contract
Client relations 10 Useful life estimated by the management
3. Basis for judging intangible assets with uncertain service life and the procedures for reviewing their service life
During this reporting period, the Company has no intangible assets with uncertain service life.
(2) Collection scope of R&D expenditures and related accounting treatment methods
1. Collection scope of R&D expenditures
The Company’s R&D expenditures are directly associated with its R&D activities, covering employee salaries of personnel
engaged in R&D, direct input material costs, depreciation and amortization expenses, and other relevant expenses. These
expenditures are collected as follows:
Relevant Employee Compensation: This includes compensation for personnel directly involved in R&D activities, as well as
management and service personnel closely linked to R&D efforts. Directly Invested Material Costs: This category encompasses
materials directly invested in R&D activities. Depreciation and Amortization Expenses: These expenses pertain to the
depreciation or amortization of fixed assets or intangible assets utilized for R&D activities. Other Expenses: This includes
additional expenses such as travel expenses for R&D personnel and testing fees directly associated with the Company’s R&D
activities.
2. The expenditure of the Company’s internal R&D projects is classified into the expenditure at the research stage and the
expenditure at the development stage.
Research stage: the stage of original, planned investigation and research activities to acquire and understand new scientific or
technical knowledge, etc.
Development stage: the stage in which research or other knowledge is applied to a plan or design to produce new or substantially
improved materials, devices, products, etc., prior to commercial production or use.
187
Winner Medical
3. Specific conditions for the capitalization of expenditures in the development stage
The expenditure at the research stage is charged to the current profit and loss in occurrence. The expenditure at the development
stage can be recognized as intangible assets only when meeting the following conditions and charged to the current profit and loss
if not meeting the following conditions:
1) Technically feasible to complete the intangible assets, so that they can be used or sold;
2) It is intended to finish and use or sell the intangible assets;
3) Ways of intangible assets to generate economic benefits, including those can prove that the products generated by the
intangible assets can be sold or the intangible assets themselves can be sold and prove that the intangible assets to be used
internally are useful;
4) It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with the support of
sufficient technologies, financial resources and other resources; and
5) The development expenditures of the intangible assets can be reliably measured
If the expenditure at the research stage and the expenditure at the development stage cannot be distinguished, the R&D
expenditure incurred is fully charged to the current profit and loss.
The Company needs to comply with the disclosure requirements of the “Medical Device Business” in the No. 4 Guideline of
Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by Growth Enterprises.
30. Long-term assets impairment
Long-term assets such as long-term equity investment properties using, fixed assets, construction in progress, right-of-use assets,
intangible assets with limited service life, and oil and gas assets, which show signs of impairment on the balance sheet date, shall
be subject to impairment tests. If the impairment test results show that recoverable amount of the asset is below its book value, the
provision for impairment is withdrawn according to the balance and charged to the impairment loss. The recoverable amount is
determined according to the higher of the net amount of the assets fair value subtracted by the disposal costs and the present value
of the expected future cash flow of the assets. The provision for impairment of assets is calculated and recognized on the basis of
single asset. The Company recognizes the recoverable amount of the asset group based on the asset group to which the asset
belongs if the recoverable amount of the single asset is difficult to estimate. An asset group is the smallest group of assets that can
generate cash inflows independently.
The goodwill formed due to business combination, intangible assets with uncertain service life and intangible assets that have not
yet reached the usable state shall be subject to impairment test at least at the end of each year regardless of whether there are signs
of impairment.
The Company conducts the goodwill impairment tests. For the book value of the goodwill formed due to business combination, it
shall be apportioned to relevant asset group by a reasonable method from the date of purchase; if it is difficult to apportion to the
relevant asset group, it shall be apportioned to the relevant asset group combination. The relevant asset group or asset group
combination is an asset group or asset group combination that can benefit from the synergies of business combination.
When conducting impairment test on the relevant asset group or asset group combination containing goodwill, if there are signs of
impairment in the asset group or asset group combination related to goodwill, conduct impairment test on the asset group or asset
group combination without goodwill at first, calculate the recoverable amount and recognize the corresponding impairment loss
compared with the relevant book value. Then conduct an impairment test on the asset group or asset group combination
containing goodwill to compare its book value with the recoverable amount. If the recoverable amount is less than the book value,
the amount of impairment loss shall first offset the book value of goodwill amortized to the asset group or asset group
combination, and then offset the book value of other assets proportionally according to the proportion of the book value of assets
other than goodwill in the asset group or asset group combination. The above impairment loss of assets will not be reserved in
subsequent accounting periods once recognized.
31. Long-term unamortized expenses
Long-term unamortized expenses refer to the expenses that have occurred but shall be burdened in current period and later periods
with the apportionment period more than one year.
Amortization method: long-term unamortized expenses are amortized on an average basis over the benefit period.
188
32. Contract liabilities
The Company lists the contractual assets or contractual liabilities in the balance sheet according to the relationship between
performance obligations and customer payment. The obligations of the Company to transfer goods or provide services to
customers for which consideration has been received or receivable are listed as contractual liabilities. The contractual assets and
contractual liabilities under the same contract are listed in the net amount.
33. Employee compensation
(1) Short-term compensation accounting method
The Company recognizes the short-term compensation incurred actually during the accounting period when the employees
provide services for the Company as the liabilities and includes in current profits and losses or related asset costs.
For the social insurance premiums and housing funds paid by the Company for the employees as wells as the labor union
expenditure and personnel education fund withdrawn according to the provisions, the corresponding employee compensation
amount is recognized according to the stipulated accruing basis and accruing proportion during the accounting period when the
employees provide services for the Company.
The employee welfare expenses incurred by the Company shall be recorded into the current profit and loss or relevant asset cost
according to the actual amount when actually incurred, and the non-monetary welfare shall be measured at its fair value.
(2) Post-employment benefits accounting method
(1) Defined contribution plan
The Company pays the basic endowment insurance and unemployment insurance for the employees according to relevant
provisions of the local government, calculates the amount payable according to local payment base and proportion in the
accounting period when the employees provide services for the Company, recognizes the amount payable as the liabilities and
includes in current profits and losses or related asset costs. In addition, the Company has also participated in the corporation
pension plan / supplementary pension insurance fund approved by the relevant departments of the state. The Company pays the
fees to the pension plan / local social security institution according to a certain proportion of the total employee wages and
includes corresponding expenses in current profits and losses or related asset costs.
(2) Defined benefit plan
The Company attributes the welfare obligations generated from the defined benefit plan to the period when the employees provide
services by the formula recognized according to the expected cumulative welfare unit method and includes in current profits and
losses or related asset costs.
The deficit or surplus formed from the present value of the defined benefit plan obligation subtracted by the fair value of the
defined benefit plan assets is recognized as a net liability or net asset of the defined benefit plan. In case of surplus in the defined
benefit plan, the Company measures the net assets of the defined benefit plan according to the lower of the surplus and asset upper
limits of the defined benefit plan.
All defined benefit plan obligations, including the obligations for payment within 12 months after the end of the expected annual
reporting period in which the employees provide services, are discounted according to the national debts matching the defined
benefit plan obligatory term and currency or the market return of the high-quality corporation bonds active in the market on the
balance sheet date.
The service costs generated from the defined benefit plan and the net interest of the net liabilities or net assets of the defined
benefit plan are included in current profits and losses or related asset costs; the changes from re-measurement of the net liabilities
or net assets of the defined benefit plan are included in other comprehensive income and not written back to the profits and losses
in subsequent accounting period. Upon the termination of the original defined benefit plan, the part originally recorded into other
comprehensive income within the scope of rights and interests shall be carried forward to undistributed profit.
In the settlement of the defined benefit plan, the settlement profits or losses are recognized according to the balance between the
present value of the defined benefit plan obligation and the settlement price recognized on the settlement date.
(3) Termination benefits accounting method
When providing dismission welfare, the Company shall recognize the employee compensation liabilities arising from the
dismission welfare and record it in the current profit and loss whenever is earlier below: when the Company fails to unilaterally
withdraw the dismission welfare due to termination of labor relation plan or downsizing suggestions; when the Company
recognizes the costs or expenses related to restructuring involving payment of dimission welfare.
189
Winner Medical
(4) Other long-term employee benefits accounting method
34. Estimated liabilities
The estimated liabilities are recognized when the obligation related to contingencies meets the following conditions
simultaneously:
(1) The obligation is the current obligation undertaken by the Company;
(2) Performance of the obligation is likely to lead to the outflow of economic benefits;
(3) The amount of the obligation can be reliably measured.
The estimated liabilities are initially measured at the best estimate of the expenditure required to perform the relevant current
obligations.
In recognizing the best estimate, factors such as risk, uncertainty and time value of money related to contingencies are taken into
account. If the time value of money has a significant impact, the best estimate is determined by discounting the relevant future
cash outflows.
If there is a continuous range of expenditure required and the probability of various outcomes within this range is the same, the
best estimate is recognized according to the middle value within this range; in other cases, the best estimates are handled as
follows:
When a contingency involves a single item, the best estimate is recognized by the most possible amount.
When a contingency involves more than one item, the best estimate is recognized according to a variety of possible
outcomes and related probabilities.
When all or some of the expenses necessary for the liquidation of an estimated liabilities is expected to be compensated by a third
party, the compensation shall be separately recognized as an asset only when it is virtually certain that the reimbursement will be
obtained. Besides, the amount recognized for the reimbursement shall not exceed the book value of the estimated liabilities.
The Company reviews the book value of the estimated liabilities on the balance sheet date, and if there is conclusive evidence that
the book value cannot reflect the current best estimate, it shall adjust the book value according to the current best estimate.
35. Share-based payment
The Company’s share-based payment refers to a transaction in which the Company grants equity instruments or undertakes
equity-instrument-based liabilities in return for services from employee or other parties. The Company’s share-based payments
shall consist of equity-settled share-based payments and cash-settled share-based payments.
1. Equity-settled share-based payments and equity instruments
Where the equity-settled share-based payment is exchanged for the services provided by the employee, it shall be measured at the
fair value of the equity instrument granted to the employee. For share-based payment transactions with exercisable rights
immediately after the grant, it shall be included in the relevant costs or expenses in accordance with the fair value of the equity
instrument on the grant date, and the capital reserves shall be increased accordingly. For the share-based payment transaction
where the service within the waiting period is completed after the grant or specified performance conditions are met, on every
balance sheet date of the waiting period, the Company shall include the service obtained at the current period into relevant costs
or expenses according to the fair value of the grant date on the basis of the best estimate of the number of equity instruments with
exercisable rights, and increase the capital reserve accordingly.
If the terms of the equity-settled share-based payment are modified, the services acquired are recognized at least in terms of the
unmodified terms. In addition, any modification that increases the fair value of the equity instrument granted, or that is beneficial
to the employee at the date of modification, recognizes an increase in the acquisition of services.
During the waiting period, if the granted equity instrument is canceled, the Company will treat the canceled equity instrument as
the accelerated exercise of power, and immediately include the balance that shall be recognized in the remaining waiting period
into the current profit and loss, and simultaneously confirm the capital reserve. However, if a new equity instrument is granted
and the new equity instrument granted is deemed to be a replacement for the cancelled equity instrument on the grant date, the
granted replacement equity instrument will be handled in the same manner as any amendment to the terms and conditions of the
original equity instrument.
190
2. Cash-settled share-based payments and equity instrument
The cash-settled share-based payments will be measured according to the fair value of the liability confirmed basing on the shares
borne by the Company and other equity instruments. For share-based payment transactions with exercisable rights immediately
after the grant, the Company shall include it in the relevant costs or expenses in accordance with the fair value of the equity
instrument on the grant date, and the liabilities shall be increased accordingly. If the rights can only be exercised after the situation
that service within the waiting period is completed and set performance is achieved, the service obtained in the current period,
according to the fair value of the liabilities borne by the Company, and basing on the best estimate for the condition of exercising
rights, will be recorded into relevant costs or expenses on each and every balance sheet date during the waiting period, and
correspondingly recorded into the liabilities. Each and every balance sheet date and settlement before relevant liability settlement,
the fair value of liability will be remeasured, of which changes occurred will be counted into the current period.
If the Company modifies the terms and conditions of the cash-settled share-based payment agreement settled in cash to change it
to equity-settled share-based payment, on the date of modification (whether during or after the waiting period), the Company will
measure the equity-settled share-based payment according to the current fair value of the granted equity instrument, and include
the services acquired in the capital reserve. At the same time, it shall terminate the recognition of liabilities recognized on the
modification date for the cash-settled share-based payment, with the difference recorded into the current profit and loss. If the
waiting period is extended or shortened due to the modification, the Company will carry out accounting treatment according to the
modified waiting period.
36. Preferred shares, perpetual bonds and other financial instruments
At the time of initial recognition, the Company classifies the financial instrument or its components as a financial asset, financial
liability or equity instrument based on the terms of the contract and the economic substance reflected in the issued preferred stock
/ perpetual bond, and not solely in legal form.
In case that the financial instrument such as perpetual bond / preferred stock issued by the Company meet one of the following
conditions, it, in whole or in part thereof, is classified as financial liabilities at the time of initial recognition:
(1) There are contractual obligations which the Company cannot unconditionally avoid fulfilling by delivering cash or other
financial assets;
(2) It contains contractual obligations of delivering a variable number of its own equity instruments for settlement;
(3) It contains derivative instrument (such as equity transfer, etc.) that is settled with its own equity, and such derivative
instrument does not exchange a fixed number of its own equity instruments for a fixed amount of cash or other financial assets for
settlement;
(4) There are contract clauses that may indirectly lead to contractual obligations;
(5) When the issuer liquidates, the perpetual bonds are in the same order of liquidation as the ordinary bonds and other debts
issued by the issuer.
In case that the financial instrument such as perpetual bond / preferred stock issued by the Company does not meet one of the
above conditions, it, in whole or in part thereof, is classified as equity instrument at the time of initial recognition.
37. Income
Accounting policies for income recognition and measurement
1. Accounting policies for income recognition and measurement
The Company has fulfilled its contractual obligation to recognize income when the customer acquires control of the relevant
goods or services. Obtaining control of the relevant goods or services is the ability to dominate the use of the goods or services
and gain almost all economic benefits from them.
If the contract contains two or more performance obligations, the Company shall, on the commencement date of the contract,
apportion the transaction price to each individual performance obligation according to the relative proportion of the individual
selling price of the goods or services committed by each individual performance obligation. The Company’s income shall be
measured according to the transaction price apportioned to each individual performance obligation.
191
Winner Medical
The transaction price means the amount of consideration that the Company is expected to be entitled to collect for the transfer of
goods or services to the customer, excluding payments collected on behalf of third parties and amounts expected to be returned to
the customer. The Company determines the transaction price in accordance with the terms of the contract and in combination with
its past practices, and in determining the transaction price, it takes into account the impact of variable consideration, material
financing elements in the contract, non-cash consideration, consideration payable to customers and other factors. The Company
determines the transaction price including the variable consideration by an amount not exceeding the amount of accumulated
recognized income which is highly unlikely to be materially reversed when the relevant uncertainty is eliminated. If there is a
material financing component in the contract, the Company shall determine the transaction price based on the amount payable in
cash when the customer acquires control of the goods or services, and shall amortize the difference between the transaction price
and the contract consideration by the effective interest method during the contract period.
If one of the following conditions is satisfied, it shall be deemed to have performed its performance obligation within a certain
period of time; otherwise, it shall be deemed to have performed its performance obligation at a certain time point:
(1) The customer obtains and consumes the economic benefits arising from the Company’s performance at the same time of the
Company’s performance.
(2) The customer can control the goods under construction during the Company’s performance.
(3) The goods produced by the Company during the performance are of irreplaceable use, and the Company shall be entitled to
receive payment for the accumulated part of the performance completed so far during the whole contract period.
For the performance obligations performed within a certain period of time, the Company shall recognize the income in accordance
with the performance progress during that period, except where the performance progress cannot be reasonably determined.
Taking into account the nature of the goods or services, the Company will use the output method or input method to determine the
performance schedule. If the performance schedule cannot be reasonably determined and the cost already incurred is expected to
be compensated, the Company shall recognize the income according to the cost already incurred until the performance schedule
can be reasonably determined.
For performance obligations performed at a certain time point, the Company recognizes income at the time point when the
customer acquires control of the relevant goods or services. In determining whether the customer has acquired control of goods or
services, the Company considers the following indications:
(1) The Company has the current collection right for the goods or services, that is, the customer has the current payment
obligation for the goods or services.
(2) The Company has transferred legal ownership to the goods to the customer, that is, the customer has legal ownership of the
goods.
(3) The Company has physically transferred the goods to the customer, that is, the customer has physically possessed the goods.
(4) The Company has transferred the main risk and remuneration in the ownership of the goods to the customer, that is, the
customer has acquired the main risk and remuneration in the ownership of the goods.
(5) The customer has accepted the goods or services, etc.
The Company determines its role as principal or agent in transactions based on whether it exercises control over the goods or
services before transferring them to the customer. If the Company has control over the goods or services prior to transfer, it acts as
the principal and recognizes revenue based on the total consideration received or receivable. Conversely, if the Company lacks
control over the goods or services before transfer, it acts as the agent and recognizes revenue in the form of commissions or fees
according to expectations.
Specific principles of recognition of income from selling goods:
(1) General foreign sales: recognize the income after commodity inspection, customs declaration and shipment of goods (the
Company’s export income settlement mainly adopts FOB and CIF methods. For a very small number of other settlement methods,
such as for those adopting EXW terms, the buyer designates carrier door-to-door delivery as the time point of recognition of
product sales revenue; for those adopting FCA terms, the delivery of products to the carrier designated by the buyer shall be the
time point of recognition of product sales revenue; for those adopting the DDP/DDU terms, the delivery of products to the
destination designated by the buyer shall be the time point of recognition of product sales revenue).
(2) General domestic sales: the recognition time of sales revenue is based on the customer’s confirmation of receipt (that is, the
income is recognized after the customer signs for the receipt, but if the contract stipulates that acceptance is needed, the income
will be recognized after acceptance by the customer).
(3) E-commerce business (B2C): the recognition time of sales revenue is based on the customer’s confirmation of the
192
completion of the transaction (i.e., the income is recognized when the customer initiatively confirms receipt of the goods on the
e-commerce platform and when the e-commerce platform automatically confirms receipt of the goods within a certain period of
time after delivery, whichever is earlier).
(4) Store sales model: sales revenue is recognized according to settlement time and price (that is, the income is recognized after
the store salesperson receives payment and delivers the goods to the customer).
(5) Consignment mode: the Company delivers the goods to the place designated by the agent, and recognizes the income after
receiving the sales list and checking it according to the time of reconciliation agreed in the contract.
Confirmation and measurement method for differences in income recognition accounting policies caused by different business
modes for the same business
38. Contract cost
Contract cost includes the contract performance cost and the contract acquisition cost.
If the cost incurred by the Company for the performance of the contract is not within the scope of relevant standards for inventory,
fixed assets or intangible assets, it shall be recognized as an asset as a contract performance cost when the following conditions
are met:
1. The cost is directly related to a current or anticipated contract.
2. The cost increases the Company’s future resources to meet its performance obligations.
3. The cost is expected to be recoverable.
If the Company is expected to recover the incremental cost incurred in acquiring the contract, it shall be recognized as an asset as
the contract acquisition cost.
Assets related to contract costs are amortized on the same basis as income recognition of goods or services related to the asset;
however, if the amortization period of the contract acquisition cost is less than one year, the Company shall record it into the
current profit and loss when it is incurred.
If the book value of an asset related to the contract cost is higher than the difference between the following two items, the
Company shall draw an impairment provision for the excess portion and recognize it as the assets impairment loss:
1. Remaining consideration expected to be obtained as a result of the transfer of the goods or services related to the asset;
2. The costs is estimated and to be incurred for the transfer of the relevant goods or services.
If the factors of impairment in the previous period change so that the difference above is higher than the book value of the asset,
the Company shall reverse the withdrawn impairment provision and include it into the current profit and loss, but the book value
of the reversed asset shall not exceed the book value of such asset on the reversal date if the impairment provision is not
withdrawn.
39. Government subsidies
1. Type
Government subsidies refer to the monetary assets or non-monetary assets obtained free of charge by the Company from the
government, and are classified into asset related government subsidies and the income related government subsidies.
Government subsidies related to assets refer to the government subsidies obtained by the Company for the purchase and
construction of long-term assets or the formation of long-term assets by other means. Government subsidies related to income
refer to government subsidies in addition to government subsidies related to assets.
The Company’s classifying government subsidies as related to assets is subject to the following specific criteria: the government
documents clearly stipulate the use of funds, and the expected use direction of the funds is expected to form related assets;
The Company’s classifying government subsidies as related to income is subject to the following specific criteria: the government
documents do not stipulate the use purpose, and the expected use direction of the funds is to supplement working capital;
193
Winner Medical
If the subsidy object is not clearly specified in the government documents, the judgment basis for the Company to classify the
government subsidy as related to assets or related to income is as follows: except that the Company designates its purpose as
related to assets, it will be included in the current profit and loss.
2. Recognition time point
Government subsidies will be recognized when the conditions attached to them are met and received by the Company.
3. Accounting treatment
The government subsidies related to assets write down the book value of the relevant assets or is recognized as deferred income.
If it is recognized as deferred income, it shall be recorded into the current profit and loss by stages in accordance with reasonable
and systematic methods during the service life of the relevant assets (if it is related to the daily activities of the Company, it shall
be recorded into other income; those not related to the daily activities of the Company shall be included in non-revenue);
If the government subsidy related to the income is used to compensate the Company’s related costs, expenses or losses in the
following period, it shall be recognized as deferred income and recorded into the current profit and loss during the period of
recognition of the relevant costs, expenses or losses (if it is related to the Company’s daily activities, it shall be recorded into
other income; if it is not related to the daily activities of the Company, it shall be included in non-operating income) or write
down relevant costs, expenses or losses; those used to compensate the relevant costs, expenses or losses incurred by the Company
shall be directly recorded into the current profit and loss (if it is related to the daily activities of the Company shall be recorded
into other income; if it is not related to the daily activities of the Company, it shall be included in non-operating income or write
down relevant costs, expenses or losses.
The interest subsidy on policy-based preferential loans obtained by the Company shall be accounted for under the following two
conditions:
(1) If the finance department allocates the interest subsidy fund to the lending bank, and the lending bank provides the loan to
the Company at the policy-based preferential interest rate, the Company shall take the loan amount actually received as the entry
value of the borrowing, and calculate the relevant borrowing cost in accordance with the loan principal and the policy-based
preferential interest rate.
(2) If the finance department allocates the interest subsidy fund directly to the Company, the Company will offset the
corresponding interest subsidy against the related borrowing costs.
40. Deferred income tax assets and deferred income tax liabilities
The income tax includes current income tax and deferred income tax. Except for the income tax arising from the business
combination and the transaction or item directly booked into the owners’ equity (including other comprehensive income), the
Company will record the current income tax and deferred income tax into the current profit and loss.
Deferred income tax assets and deferred income tax liabilities shall be calculated and recognized on the basis of the difference
(temporary difference) between the tax basis of the assets and liabilities and their book value.
For the deferred income tax assets recognized through deductible temporary difference, it is limited to the amount of taxable
income which is likely to be obtained to offset the deductible temporary difference in the future period. For the deductible loss
and tax deduction that can be carried forward to the subsequent year, the corresponding deferred income tax assets are recognized
within the limit of the future taxable income amount that is possibly obtained to deduct the deductible loss and tax deduction.
For taxable temporary differences, except in special circumstances, the deferred income tax liability is recognized.
Special circumstances in which deferred income tax assets or deferred income tax liabilities are not recognized include:
1. Initial recognition of goodwill;
2. Transactions or events that are neither a business combination nor affect accounting profit and taxable income (or deductible
losses) at the time of occurrence, and the initial recognition of assets and liabilities does not result in equal amounts of taxable
temporary differences and deductible temporary differences.
194
For the taxable temporary difference related to the investment of the subsidiaries, associated enterprises and joint ventures,
relevant deferred income tax liabilities are not recognized, unless the Company can control the temporary difference write-back
time and the temporary difference will probably not be written back in the foreseeable future. For the deductible temporary
difference related to the investment of the subsidiaries, joint ventures and cooperative enterprises, deferred income tax assets are
recognized when it is likely to write back the temporary difference in the foreseeable future or to obtain the income tax payable
used to offset the deductible temporary difference in the future.
The deferred income tax assets and deferred income tax liabilities are measured on the balance sheet date according to the tax law
and the applicable tax rate in the period of expected recovery of relevant assets of liquidation of relevant liabilities.
On the balance sheet date, the Company reviews the book value of the deferred income tax assets. If it is likely not to obtain
sufficient income tax payable to deduct the interests of the deferred income tax assets in the future, the book value of the deferred
income tax assets is written down. If it is likely to obtain sufficient income tax payable, the amount written down is written back.
When the Company has the legal right to settle with net amount and intends to settle with net amount or obtain the assets and
liquidate the liabilities simultaneously, the income tax assets and income tax liabilities in the current period are presented by the
net amount after offset.
On the balance sheet date, the deferred income tax assets and deferred income tax liabilities are listed in net amount after offset
when both of the following conditions are met:
1. The tax payer has the legal right to settle the current income tax assets and current income tax liabilities on a net basis;
2. The deferred income tax assets and deferred income tax liabilities are related to the income tax levied by the same tax col
lection and management department from the same subject of tax payment or from different subjects of tax payment but the
subject of tax payment involved intends to settle the current income tax assets and liabilities with the net amount or obtain the
assets and liquidate the liabilities simultaneously in each future important period when the deferred income tax assets and
liabilities are written back.
41. Leased
(1) Lease accounting for lessees
Lease refers to a contract in which the lessor transfers the right to use the asset to the lessee within a certain period of time to for
consideration. On the commencement date of the contract, the Company assesses whether the contract is a lease or contains a
lease. If a party to the contract transfers the right to control the use of one or more identified assets within a certain period in
exchange for consideration, the contract is a lease or contains a lease.
If a contract contains several separate leases information, the Company will split the contract and conduct accounting treatment
for each of the separate leases. When a contract contains both lease and non-lease information, the lessee and the lessor shall
separate lease information from and non-lease information.
1. The Company acts as the lessee:
(1) Right-of-use assets
On the commencement date of the lease period, the Company recognizes right-of-use assets for leases other than short-term leases
and leases of low-value assets. The right-of-use assets is initially measured at cost. The cost includes:
1) The initial measurement amount of the lease liabilities;
2) If there is a lease incentive for the lease payment paid on or before the start of the lease term, the amount of the granted
lease incentive shall be deducted;
3) The initial direct expenses incurred by the Company;
4) Costs expected to be incurred by the Company to disassemble and remove a leased asset, restore the site where the leased
asset is located, or restore the leased asset to the condition agreed upon under the terms of the lease (excluding costs incurred to
produce inventory).
195
Winner Medical
The Company subsequently withdraws depreciation of right-of-use assets with the straight-line method. Where it can be
reasonably determined that the ownership of the leased assets can be acquired upon the expiration of the lease term, depreciation
shall be calculated and withdrawn by the Company within the service life of the leased assets; Otherwise, the depreciation shall be
calculated and withdrawn within a shorter period of the lease term and the service life of the leased assets.
The Company determines whether the right-of-use asset has been impaired in accordance with the principles described in Note “V.
Significant Accounting Policies and Accounting Estimates, 30. Long-term assets impairment”, and conducts accounting treatment
for the identified impairment losses.
(2) Lease liabilities
On the commencement date of the lease period, the Company recognizes lease liabilities for leases other than short-term leases
and leases of low-value assets. Lease liabilities are initially measured at the present value of outstanding lease payments. Lease
payments include:
1) Fixed payments (including actual fixed payments), if there is lease incentive, the relevant amount of lease incentive shall be
deducted;
2) Variable lease payments that depend on an index or rate;
3) The amount estimated to be paid based on the residual value of the guarantee provided by the Company;
4) The exercise price of the purchase option, provided that the Company reasonably determines that the option will be
exercised;
5) The amount to be paid to exercise the option to terminate the lease, provided that the lease term reflects that the Company
will exercise the option to terminate the lease.
The Company adopts the interest rate implicit in the lease as the discount rate. However, if the interest rate implicit in the lease
cannot be reasonably determined, the incremental borrowing interest rate of the Company will be adopted as the discount rate.
The Company calculates the interest expense of the lease liability during each period of the lease term at a fixed periodic rate, and
includes it in the current profit and loss or the cost of related assets. Variable lease payments that are not included in the
measurement of the lease liabilities shall be included in current profit or loss or the cost of the related asset when they are actually
incurred.
After the commencement date of the lease term, in case of the following circumstances, the Company shall remeasure the lease
liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use assets has been reduced to zero,
but the lease liabilities still need to be further reduced, the difference shall be included in the current profit and loss:
1) In case of any change in the appraisal results of the purchase option, lease renewal option or termination option, or the
actual exercise of the aforementioned options is inconsistent with the original appraisal result, the Company shall remeasure the
lease liability according to the present value which is calculated based on the changed lease payment and the revised discount
rate;
2) In case of any change in substantial fixed payment, the estimated payable amount of the residual value of the guarantee, or
the index or ratio used to determine the lease payment, the Company shall remeasure the lease liability according to the present
value which is calculated based on the changed lease payment and the revised discount rate. However, where the changes in lease
payment results from the change in floating interest rate, a revised discount rate will be used for calculation of the present value.
(3) Short-term leases and low-value asset leases
The Company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and low-value asset leases,
and includes the relevant lease payments in the current profit and loss or related asset costs on a straight-line basis over each
period of the lease term. Short-term leases refer to the leases with a lease term of not more than 12 months and excluding
purchase options on the commencement date of the lease term. Low-value asset leases refers to the leases with a lower value
when the single leased asset is a new asset. Where the Company subleases or expects to sublease the leased assets, the original
lease will not be a low-value asset lease.
(4) Lease changes
In case of any lease changes that meet the following conditions, the Company shall treat the lease change as a separate lease for
accounting treatment:
196
1) The lease change expands the lease scope by adding the right to use one or more leased assets;
2) The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease upon
adjustment based on the contract.
If the lease change is not accounted for as a separate lease, on the effective date of the lease change, the Company shall reallocate
the consideration of the contract after the change, redetermine the lease term, and remeasure the lease liability according to the
present value which is calculated based on the changed lease payment and the revised discount rate.
If the lease change leads to the narrowing of the lease scope or the shortening of the lease term, the Company shall reduce the
book value of the right-of-use asset accordingly, and credit the relevant gains or losses on partial or complete termination of the
lease into the current profit and loss. If other lease changes result in re-measurement of lease liabilities, the Company shall adjust
the book value of the right-of-use asset accordingly.
(2) Lease accounting for lessors
The Company classifies leases as finance leases and operating leases at the commencement date of the lease term. Finance leases
refers to the leases where almost all risks and rewards related to the ownership of leased assets have been substantively transferred
regardless of whether the ownership is eventually transferred or not. Operating leases refer to leases other than financial leases.
When the Company acts as a sublease lessor, sublease classification will be made based on the right-of-use asset arising from the
original lease.
(1) Accounting for operating lease
The lease receipts from operating lease are recognized as rental income on a straight-line basis over each period of the lease term.
The Company capitalizes the initial direct expenses incurred in relation to operating leases, which are amortized and included in
the current profit and loss on the same basis as the rental income is recognized during the lease term. The variable lease payments
not credited into lease receipts shall be included into current profit or loss or when they are actually incurred. In case of any
change in the operating lease, the Company shall treat it as a new lease for accounting treatment from the effective date of the
change, and the advance receipts or lease receivables related to the lease before the change shall be deemed to be the amount
received for the new lease.
(2) Accounting for finance lease
On the commencement date of the lease term, the Company recognizes finance lease receivables for finance leases and terminates
the recognition of the finance lease assets. When the Company initially measures the finance lease receivables, the net lease
investment is regarded as the entry value of the finance lease receivables. The net lease investment is the sum of the unguaranteed
residual value and the present value of the lease receipts that have not been received at the commencement date of the lease,
discounted at the interest rate implicit in the lease.
The Company calculates and recognizes the interest income during each period of the lease term at a fixed periodic rate. The
derecognition and impairment of finance lease receivables shall be accounted for in accordance with Note “V. Significant
Accounting Policies and Accounting Estimates, 11. Financial instruments”.
The variable lease payments that are not included in the measurement of net lease investment shall be included in current profit or
loss or when they are actually incurred.
In case of any changes to finance lease that meet the following conditions, the Company shall treat the change as a separate lease
for accounting treatment:
1) The change expands the lease scope by adding the right to use one or more leased assets;
2) The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease upon
adjustment based on the contract.
In case that the change of a financial lease is not accounted for as a separate lease, the Company shall deal with the changed lease
under the following circumstances:
1) If the change takes effect on the commencement date of the lease term, and the lease is classified as an operating lease, the
Company will account for it as a new lease from the effective date of the lease change, and take the net lease investment before
the effective date of the lease change as the book value of the leased asset;
2) If the change takes effect on the commencement date of the lease term, and the lease is classified as a financial lease, the
Company will conduct accounting treatment according to the policy in Note “V. Significant Accounting Policies and Accounting
Estimates, 11. Financial instruments” regarding the modification or renegotiation of contracts.
42. Other significant accounting policy and accounting estimate
197
Winner Medical
1. Hedge accounting
(1). Classification of hedging
1) A fair value hedge refers to a hedge of the fair value change risk of an asset or liability that has been recognized and a
certain commitment that has not been recognized (except foreign exchange risk).
2) A cash flow hedge refers to a hedge of the risk of changes in cash flow arising from a particular type of risk relating to a
recognized asset or liability, an anticipated transaction that is likely to occur, or the foreign exchange risk contained in an
unrecognized firm commitment
3) A hedge of net investment in overseas operations refers to a hedge of foreign exchange risks of net investment of overseas
operations. Net investment in overseas operations refers to the equity share of the enterprise in the net assets of overseas
operations.
(2). Designation of hedging relationship and identification of hedging effectiveness
At the beginning of the hedging relationship, the Company has a formal designation of the hedging relationship and has prepared
formal written documents on the hedging relationship, risk management objectives and hedging strategies. The documents specify
the nature and quantity of the hedging instrument, the nature and quantity of the hedged items, the nature of the hedged risk, type
of hedging, and the Company’s evaluation of the effectiveness of the hedging instrument. Hedging effectiveness refers to the
degree to which the change in the fair value or cash flow of the hedging instrument can offset the change in the fair value or cash
flow of the hedged item caused by the hedged risk.
The Company continuously evaluates the effectiveness of hedging and judges whether the hedging meets the requirements of
hedging accounting for effectiveness during the accounting period in which the hedging relationship is designated. If it is not
satisfied, the hedging relationship shall be terminated.
The application of hedge accounting shall meet the following requirements for the effectiveness of hedging:
1) There is an economic relationship between the hedged item and the hedging instrument.
2) In the value changes caused by the economic relationship between the hedged item and the hedging instrument, the
influence of credit risk does not play a dominant role.
3) Adopting the appropriate hedge ratio will not cause the imbalance between the relative weight of the hedged item and the
hedging instrument, thus generating accounting results inconsistent with the hedge accounting objectives. If the hedge ratio is no
longer appropriate, but the hedging risk management objectives have not changed, the number of hedged items or hedging
instruments shall be adjusted to make the hedge ratio meet the requirements of effectiveness again.
(3). Hedge accounting treatment methods
1) Fair value hedging
Changes in the fair value of hedge derivative instruments are recorded in the current profit and loss. Changes formed by the fair
value of the hedged item due to the hedging risk shall be included in the current profit and loss, and the book value of the hedged
item shall be adjusted simultaneously.
For fair value hedging related to financial instruments measured at amortized cost, the adjustments to the book value of the
hedged item are amortized during the remaining period between the adjustment to the due date and recorded in the current profit
and loss. Amortization under the effective interest rate method may commence immediately after the book value adjustment and
shall not be later than the adjustment of fair value changes in the termination of hedging risks by the hedged item.
If the hedged item is terminated, the unamortized fair value is recognized as the current profit and loss.
Where the hedged item is a firm commitment that has not been recognized, the accumulative change in the fair value of the firm
commitment caused by the hedging risk is recognized as an asset or liability, and the relevant gains or losses are recorded into the
current profits and losses. Changes in the fair value of hedging instruments are also recorded in the current profit and loss.
2) Cash flow hedging
198
The part of the gain or loss of the hedging instrument that belongs to the effective hedging shall be directly recognized as other
comprehensive income, while the part that belongs to the invalid hedging shall be recorded into the current profit and loss.
If the hedged transaction affects the current profit and loss, such as when the hedged financial income or financial expense is
recognized or when the expected sale occurs, the amount recognized in other comprehensive income will be transferred to the
current profit and loss. If a hedged item is the cost of a non-financial asset or non-financial liability, the amount originally
recognized in other comprehensive income amount is transferred out and recorded into the amount of initial recognition of the
non-financial asset or non-financial liability (or the amount originally recognized in other comprehensive income is transferred
out during the same period as the non-financial asset or non-financial liability affecting the profit and loss, and recorded into the
current profit and loss).
If the expected transaction or firm commitment is not expected to occur, the accumulated gains or losses of the hedging
instrument previously recorded in other comprehensive income are transferred out and recorded in the current profit and loss. If
the hedging instrument has expired, been sold, the contract terminated or exercised (but not replaced or renewed), or the
designation of the hedging relationship is withdrawn, the amount previously recorded in other comprehensive income is not
transferred out until the anticipated transaction or firm commitment affects the current profit or loss.
3) Hedging of net investment in overseas operations
The hedging of net investment in overseas operations, including the hedging of monetary items that are part of the net investment,
shall be treated similarly to the cash flow hedging. In the gain or loss of the hedging instrument, the part that is recognized as
effective hedging is recorded in other comprehensive income, while the part that is invalid hedging is recognized as current profit
and loss. When disposing of overseas operations, any accumulated gains or losses previously recorded in other comprehensive
income will be transferred out and recorded into current profit and loss.
2. Repurchase of the Company’s shares
If the Company repurchases its shares due to the reduction of its registered capital, it shall debit the “Treasury Stock” and credit
the “Bank Deposits” and other subjects according to the amount actually paid. When the treasury stock is cancelled, the total par
value of the shares calculated according to the par value of the shares and the number of cancelled shares shall be debited to the
“Share Capital”, and the book balance of the cancelled treasury stock shall be credited to the “Treasury Stock”. The premium
originally recorded in the capital surplus at the time of stock issuance shall be offset according to the difference, and the “Capital
Surplus - capital stock premium” shall be debited. The part of the repurchase price exceeding the above offset of “Share Capital”
and “Capital Surplus - capital stock premium” shall be debited to the “Surplus Reserves” and “Profit Distribution - undistributed
profits” and other subjects in turn. If the repurchase price is lower than the share capital corresponding to the repurchased shares,
the difference between the book balance of the cancelled treasury stock and the offset share capital will be treated as an increase
in capital stock premium, and debit to the “Share Capital” according to the par value of the share capital corresponding to the
repurchased shares, credit the “Treasury Stock” according to the book balance of the cancelled treasury stock, and credit the
“Capital Surplus - capital stock premium” according to the difference.
3. Debt restructuring
(1). The Company acts as the lessor:
The Company ceases recognition of claims when the contractual right to collect cash flows from the claims expires. In cases
where debt is restructured through settlement with assets or conversion into equity instruments, the Company recognizes the
relevant assets once they meet the criteria for definition and recognition.
If debt restructuring involves repaying debts with assets, transferred non-financial assets are initially measured at cost upon
recognition by the Company. The cost of inventory comprises the fair value of relinquished claims and other directly attributable
costs such as taxes, transportation fees, loading and unloading fees, insurance premiums, and expenses incurred to bring the asset
to its current location and condition. Similarly, the cost of an investment in an associate or joint venture encompasses the fair
value of relinquished claims and other directly attributable costs such as taxes. The cost of investment real estate incorporates the
fair value of relinquished claims and other directly attributable costs, such as taxes, associated with the asset. Similarly, the cost of
a fixed asset encompasses the fair value of relinquished claims and other directly attributable costs, including taxes, transportation
fees, loading and unloading fees, installation fees, professional service fees, and other expenses incurred before the asset reaches
its intended usable condition. The cost of biological assets comprises the fair value of relinquished claims and other directly
attributable costs, such as taxes, transportation fees, and insurance premiums, associated with the assets. The costs of intangible
assets include the purchase price, related taxes as well as other expenses incurred to make the assets reach the intended
serviceable conditions and attributable to the assets. If debt restructuring involves converting debt into equity instruments,
resulting in the creditor converting its claim into an equity investment in an associate or joint venture, the Company shall measure
it based on the fair value of the relinquished claim and taxes, along with other costs directly attributable to the asset, to determine
its initial investment cost. Upon recovery or disposal, the difference between the price obtained and the book value of the
financial assets shall be recorded into the current profit or loss.
199
Winner Medical
In cases where debt restructuring is conducted by modifying other terms, the Company shall recognize and measure the
restructured claims according to the guidelines outlined in “V. Significant Accounting Policies and Accounting Estimates, 11.
Financial Instruments” of this note.
In the event that multiple assets are utilized to repay debts or a combination is employed to restructure debts, the Company will
first confirm and measure the transferred financial assets and restructured claims in accordance with “V. Significant Accounting
Policies and Accounting Estimates, 11. Financial Instruments” outlined in this note. Subsequently, the fair value ratio of each
asset, excluding the transferred financial assets, shall be allocated to the net amount after deducting the confirmed amount of the
transferred financial assets and restructured claims from the fair value of the relinquished claims. Based on this allocation, the cost
of each asset shall be determined separately using the aforementioned method. The difference between the fair value and the book
value of the relinquished claims shall be recognized in the current profit and loss.
(2). The Company acts as the debtor:
The Company derecognizes a debt once its current obligations are discharged.
If debt reorganization is executed by repaying debts with assets, the Company will derecognize the relevant assets and debts
repaid when they meet the conditions for derecognition. The difference between the book value of the debts repaid and the book
value of the transferred assets shall be included in the current profit and loss.
If debt restructuring involves converting debt into equity instruments, the Company will derecognize the debt when the repaid
debt meets the conditions for derecognition. When initially recognizing an equity instrument, the Company measures it based on
the fair value of the equity instrument. If the fair value of the equity instrument cannot be reliably measured, it is measured based
on the fair value of the debt repaid. The difference between the book value of the debt repaid and the recognized amount of the
equity instrument shall be included in the current profit and loss.
In cases where Debt is conducted by modifying other terms, the Company shall recognize and measure the restructured claims
according to the guidelines outlined in “V. Significant Accounting Policies and Accounting Estimates, 11. Financial Instruments”
of this note.
In instances where multiple assets are utilized to repay debts or a combination is employed to reorganize debts, the Company shall
confirm and measure equity instruments and restructured debts using the aforementioned methods. The book value of the debts
repaid shall be the sum of the book value of the transferred assets and the confirmed amount of equity instruments and
restructured debts. Any difference between this sum and the profit and loss shall be included in the current profit and loss.
4. Segmental reporting
The Company determines the operating segments based on the internal organizational structure, management requirements and
internal reporting system, and determines the reporting segments based on the operating segments and discloses the information
of the segments.
Operating segments refer to components within the Company that simultaneously meet the following conditions:
(1) The component can generate income and incur expenses in daily activities.
(2) The Company’s management can regularly evaluate the operating results of this component to decide on resource allocation
and evaluate its performance.
(3) The Company can obtain relevant accounting information such as the financial status, operating results, and cash flow of
this component.
If two or more operating segments have similar economic characteristics and meet certain conditions, they may be merged into
one operating segment.
43. Significant accounting policy and accounting estimate change
(1) Changes in significant accounting policies
√Applicable □ Not applicable
Unit: yuan
Content and reasons of changes in accounting
Important Affected report item Name Amount of impact
policies
200
(1) Implemented the Interpretation of Accounting Standards for Business Enterprises No.16, which stipulates “the deferred
income tax related to assets and liabilities arising from individual transactions shall not be applicable to the accounting treatment
of initial recognition exemption”.
On November 30, 2022, the Ministry of Finance promulgated and implemented the Interpretation of Accounting Standards for
Business Enterprises No.16 (CK 〔2022〕 No. 31, hereafter referred to as “No.16 Interpretation”), which stipulates “the deferred
income tax related to assets and liabilities arising from individual transactions shall not be applicable to the accounting treatment
of initial recognition exemption”, and shall come into effect from January 1, 2023.
Interpretation No. 16 stipulates that for a company not involved in a business combination, if a transaction doesn’t impact
accounting profits or taxable income (or deductible losses) at the time of occurrence, and if the initial recognition of assets and
liabilities results in equal amounts of taxable temporary differences and deductible temporary differences, then exemptions from
recognizing deferred income tax liabilities and deferred income tax assets don’t apply. Instead, the enterprise should recognize the
corresponding amounts in accordance with relevant provisions such as Accounting Standard No. 18 for Business Enterprises -
Income Tax and other applicable regulations. This includes single transactions that can result in deductible temporary differences,
such as leasing transactions where lease liabilities are initially recognized on the start date of the lease term and included in
right-of-use assets, and transactions involving estimated liabilities for disposal obligations of fixed assets, which are then included
in the cost of related assets.
If a taxable temporary difference and a deductible temporary difference arise from a single transaction covered by the provision,
occurring between the earliest period covered by the financial statements presented for the first time and the date of its application,
and stemming from the recognition of a lease liability and right-of-use asset at the beginning of said earliest period as well as
from the recognition of a projected liability related to an abandonment obligation and the corresponding related asset, the
enterprise shall make adjustments as per the provision.
The Company will implement this regulation starting from January 1, 2023. The main impacts of implementing this regulation are
as follows:
Content and reasons of changes in Affected amount in balance on January 1, 2022
Affected report item
accounting policies Consolidation Parent company
Deferred income tax assets 14,845,309.87 277,192.47
Deferred income tax liabilities
Interpretation of Accounting Income tax expenses -14,845,309.87 -277,192.47
Standards for Business Enterprises
No.16 (No.16 Interpretation) Undistributed profit 14,844,385.21 277,192.47
Minority interest income -924.66
Minority equity 924.66
Consolidation Parent company
Content and reasons of changes in
Affected report item December 31, December 31,
accounting policies 2023.12.31/2023 2023.12.31/2023
2023/2022 2023/2022
Deferred income tax
12,773,788.21 14,978,225.10 519,777.63
assets
Deferred income tax
2,099,092.05 2,099,092.05
Interpretation of Accounting liabilities
Standards for Business Enterprises Income tax expenses 4,303,528.94 -132,915.23 2,618,869.68 -242,585.16
No.16 (No.16 Interpretation)
Undistributed profit 10,693,719.10 14,979,240.42 -2,099,092.05 519,777.63
Minority interest income -18,007.62 -1,939.98
Minority equity -19,022.94 -1,015.32
201
Winner Medical
(2) Changes in major accounting estimates
□ Applicable √ Not applicable
(3) Adjustment of relevant items in financial statements at the beginning of first implementation year as a result of first
implementation of new accounting standards from 2023
√Applicable □ Not applicable
Adjustment description
For details, refer to Note 43, “Significant Changes in Accounting Policies and Accounting Estimates,” specifically focusing on (1)
Significant Changes in Accounting Policies.
44. Others
None
VI. Taxation
1. Main tax categories and tax rates
Tax category Taxation basis Tax rate
Calculate the substituted money on VAT on the basis of the income from
selling goods and taxable services according to the tax law. After deduction
Added value tax 13%, 9%, 6%, 3%, 1%, 0%
of the withholdings on VAT allowed to deduct in current period, the balance
is the VAT payable
Consumption tax N/A N/A
Urban maintenance Actual paid value added tax (including the exemption part) and consumption
7%, 5%
and construction tax tax
Corporate income tax Levied by income tax payable 30%, 25%, 20%, 16.5%, 15%
Actual paid value added tax (including the exemption part) and consumption
Education surcharge 3%
tax
If there are taxpayers with different enterprise income tax rates, the disclosure statement shall present
Name of taxpayer Income tax rate
Winner Medical, Winner Medical (Huanggang), Winner Medical (Tianmen), Winner Medical (Jingmen), Winner
Medical (Chongyang), Winner Medical (Jiayu), Qianhai Purcotton, Winner Medical (Wuhan), Longterm Medical, 15%
Winner Guilin, Winner Medical (Hunan)
Winner Medical (Hong Kong) 16.5%
Hangzhou Shengyi, Xi’an Longtemu, Deqing Longterm, Ruian Medical Device 20%
Mexico Longtai 30%
202
2. Tax preference
(1) On December 23, 2021, according to the Notice on Publicizing the List of First Batch of High-tech Enterprises to be
Identified in Shenzhen in 2021 issued by the Leading Group Office of National High-tech Enterprise Accreditation Administration,
the Company passed the High-tech Enterprise Qualification Reexamination (Certificate No.: GR202144202494). From 2021 to
2023, the corporate income tax can be paid at a preferential tax rate of 15.00%.
(2) According to the Notice on Publicizing the List of the Second Batch of High-tech Enterprises to be Identified in Hubei
Province in 2019, Winner Medical (Huanggang) was identified as the second batch of high-tech enterprises with the certificate
number of GR201942002414, and passed the qualification review of high-tech enterprises in 2022. Winner Medical (Huanggang)
is eligible to pay corporate income tax at a preferential rate of 15.00% from 2022 to 2024.
(3) Qianhai Purcotton was established on July 21, 2015, with its domicile located in Shenzhen Qianhai Shenzhen-Hong Kong
Cooperation Zone. According to the Notice of Enterprise Income Tax Preferential Policies and Preferential Directory in
Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone of Hengqin New Fujian Pingtan
Comprehensive Experimental Area (C.S. [2014] No. 26) issued by the Ministry of Finance and State Taxation Administration,
Qianhai Purcotton pays its enterprise income tax at the tax rate of 15.00%.
(4) According to the Notice on Publicizing the List of Fourth Batch of High-tech Enterprises to be Identified in Hubei Province
in 2021 issued by the Leading Group Office of National High-tech Enterprise Accreditation Administration on December 23,
2021, Winner Medical (Jingmen) obtained the High-tech Enterprise Certificate (Certificate No.: GR202142004475) on December
3, 2021. From 2021 to 2023, corporate income tax can be paid at a preferential tax rate of 15.00%.
(5) According to the Notice on Publicizing the List of Fifth Batch of High-tech Enterprises to be Identified in Hubei Province in
2021 issued by the Leading Group Office of National High-tech Enterprise Accreditation Administration on December 23, 2021,
Winner Medical (Jiayu) obtained the High-tech Enterprise Certificate (Certificate No.: GR202142005582) on December 17, 2021.
From 2021 to 2023, corporate income tax can be paid at a preferential tax rate of 15.00%.
(6) According to the Notice on Publicizing the List of Second Batch of High-tech Enterprises to be Identified in Hubei Province
in 2021 on December 15, 2021, Winner Medical (Chongyang) and Winner Medical (Tianmen) obtained the High-tech Enterprise
Certificates (Certificate No.: GR202142000579, GR202142002367) on November 15, 2021. The prepayment of corporate income
tax shall be at a rate of 15.00% in 2021.
(7) According to the Notice on Publicizing the List of Second Batch of High-tech Enterprises to be Identified in Hubei Province
in 2022 issued on November 9, 2022, Winner Medical (Wuhan) obtained the High-tech Enterprise Certificate (Certificate No.:
GR202242002319) on November 9, 2022. From 2022 to 2024, the corporate income tax can be paid at a preferential tax rate of
15.00%.
(8) Longtai Medical was initially recognized as a high-tech enterprise on November 13, 2017. It subsequently obtained an
updated high-tech enterprise qualification certificate on December 8, 2023, with the certificate number GR202345000323. Pay
corporate income tax at a preferential tax rate of 15% with a validity period of three years.
(9) Hangzhou Shengyi, Xi’an Longtemu, Deqing Longterm are all small enterprises with small profits. The part with annual
taxable income not exceeding 1 million yuan shall be reduced by 12.5% and included into the taxable income, and the corporate
income tax shall be paid at the tax rate of 20%; The part with annual taxable income exceeding 1 million yuan but not exceeding 3
million yuan shall be reduced by 25% and included into the taxable income, and corporate income tax shall be paid at the rate of
20%.
(10) Winner Medical (Hunan) was recognized as a high-tech enterprise in 2010 to pay corporate income tax at a preferential tax
rate of 15%. Longterm Medical obtained an updated high-tech enterprise qualification certificate on Monday with a validity
period of three years until Thursday, December 1, 2022. passed the high-tech enterprise certification for the third time in 2022 to
obtain a certificate with number of GR202243004478 and expiration date of December 12, 2025.
203
Winner Medical
(11) Ruian Medical Device is a small enterprise with small profits. The part with annual taxable income not exceeding 1 million
yuan shall be reduced by 12.5% and included into the taxable income, and the corporate income tax shall be paid at the tax rate of
20%; The part with annual taxable income exceeding 1 million yuan but not exceeding 3 million yuan shall be reduced by 50%
and included into the taxable income, and corporate income tax shall be paid at the rate of 20%. At present, the annual taxable
income of Ruian Medical Device is less than 1 million yuan, and the actual tax rate is 2.5%.
(12) On December 4, 2023, Winner Guilin passed the high-tech enterprise certification to obtain the high-tech enterprise
certificate with number of GR202345000323 and validity period of three years. According to the relevant preferential policies of
China for high-tech enterprises, qualified high-tech enterprises shall be subject to a corporate income tax at a preferential tax rate
of 15% for three years from the year of recognition. Winner Guilin can be entitle to this preferential policy in 2023.
3. Others
None
VII. Notes to items in the consolidated financial statements
1. Cash and cash equivalents
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Cash on hand 76,471.98 246,825.76
Bank deposit 4,676,600,881.85 4,169,305,311.41
Other cash and cash equivalents 29,454,717.44 357,325,441.73
Total 4,706,132,071.27 4,526,877,578.90
Including: Total amount deposited abroad 6,765,888.80 15,822,664.52
Other description:
Wherein, the breakdown of monetary funds that are restricted in use due to mortgages, pledges or freezes, restricted in withdrawal
due to centralized management of funds, as well as those placed outside China with restrictions on repatriation of funds, is as
follows:
Item Closing Balance Closing balance of the previous year
Deposit for bank acceptance bill* 1 10,935,300.00 7,428,000.00
Letter of Credit deposit* 2 100,000.00 139,600,000.00
Performance bond* 3 5,077,060.94 2,922,681.16
Letter of Guarantee bond* 4 6,600,000.00
Balance of other restricted monetary funds *5 6,078,927.88 6,104,939.57
Total 28,791,288.82 156,055,620.73
204
*1 Deposit for bank acceptance bill refers to the deposit deposited by Zhejiang Longterm to apply for bank acceptance bill.
*2 Letter of Credit deposit is the deposit made by Winner Medical (Tianmen) for international and domestic Letters of Credit.
*3 The performance bond refers to the bond deposited by Zhejiang Longterm for automatic transfer of electricity charges; the
bond deposited by Winner Medical (Hong Kong) for bidding transactions with hospitals.
*4 Represents the deposit made by Winner Medical (Hunan) for signing the demand guarantee.
*5 The balance of other restricted monetary funds refers to the receipt deposit of Winner Medical (Shenzhen); the balance of
special deposit accounts for restricted non-budget units opened by Shenzhen Purecotton in accordance with the regulations of
prepaid card issuance formulated by the Ministry of Commerce, and product deposit for the APP and mini program.
2. Tradable financial assets
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Financial assets measured at fair value of which the
2,850,058,540.71 4,378,789,960.23
changes are included in current profit and loss
Including:
Bank financial products 1,735,249,266.74 3,027,531,039.77
Trust products 1,114,809,273.97 1,351,258,920.46
Including:
Total 2,850,058,540.71 4,378,789,960.23
Other description:
None
3. Derivative financial assets
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Other description:
None
4. Notes receivable
(1) Classified presentation of notes receivable
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Bank acceptance bill 42,963,076.53 51,001,784.57
Total 42,963,076.53 51,001,784.57
205
Winner Medical
(2) Classified disclosure according to bad debt accrual method
Unit: yuan
Closing Balance Balance at the beginning of the period
Book balance Provision for bad debt Book balance Provision for bad debt
Class
Accruing Book value Proportio Accruing Book value
Amount Proportion Amount Amount Amount
proportion n proportion
Including:
Including:
Provision for bad debts on promissory notes if based on a general model of expected credit losses:
□ Applicable √ Not applicable
(3) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Balance at the Amount of change in current period
Class Closing Balance
beginning of the period Accrual Recovered or reversed Write-off Others
Where the amount of bad debt provision recovered or reversed is important:
□ Applicable √ Not applicable
(4) Notes receivable pledged by the Company at the end of the period
Unit: yuan
Pledged amount at the end of the
Item
period
(5) Notes receivable endorsed or discounted by the Company at the end of the period and not expired yet on the balance sheet
date
Unit: yuan
Amount with recognition not
Item Amount with recognition terminated at the end of the period
terminated at the end of the period
Bank acceptance bill 334,223,420.29 28,991,818.10
Total 334,223,420.29 28,991,818.10
(6) Notes receivable actually written off at the current period
Unit: yuan
Item Amount written off
206
Write-off of important notes receivable:
Unit: yuan
Nature of notes Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Description of write-off notes receivable:
None
5. Accounts receivable
(1) Disclosure by aging
Unit: yuan
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 802,426,859.44 966,089,497.52
1~2 years 12,583,559.62 15,332,065.15
2~3 years 4,051,224.68 1,968,459.71
More than 3 years 2,899,121.73 3,906,882.01
3~4 years 1,601,949.62 502,727.73
4~5 years 292,384.46 1,622,782.36
More than 5 years 1,004,787.65 1,781,371.92
Total 821,960,765.47 987,296,904.39
(2) Classified disclosure according to bad debt accrual method
Unit: yuan
Closing Balance Balance at the beginning of the period
Book balance Provision for bad debt Book balance Provision for bad debt
Class Accruin
Proporti Accruing Book value Proporti g Book value
Amount Amount Amount Amount
on proportion on proporti
on
Accounts receivable of
provision for bad debt 9,715,810.58 1.18% 9,715,810.58 100.00% 2,811,067.30 0.28% 2,811,067.30 100.00%
by single item
Including:
Accounts receivable of
768,602,289.
provision for bad debt 812,244,954.89 98.82% 43,642,665.29 5.37% 984,485,837.09 99.72% 51,843,776.05 5.27% 932,642,061.04
60
by combination
Including:
768,602,289.
Aging analysis method 812,244,954.89 98.82% 43,642,665.29 5.37% 984,485,837.09 99.72% 51,843,776.05 5.27% 932,642,061.04
60
100.00 768,602,289. 100.00
Total 821,960,765.47 53,358,475.87 6.49% 987,296,904.39 54,654,843.35 5.54% 932,642,061.04
% 60 %
207
Winner Medical
Provision for bad debt by single item: 1
Unit: yuan
Balance at the beginning of the
Closing Balance
period
Name
Provision for bad Provision for bad Accruing
Book balance Book balance Reasons for provision
debt debt proportion
The customer has declared
Better Life Commercial Chain bankruptcy, and the payment
6,387,334.23 6,387,334.23 100.00%
Share Co., Ltd. for the goods is unlikely to be
recovered.
Others 2,811,067.30 2,811,067.30 3,328,476.35 3,328,476.35 100.00% Expected to be irrecoverable
Total 2,811,067.30 2,811,067.30 9,715,810.58 9,715,810.58
Provision for bad debt by combination: aging analysis
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Within 1 year 796,361,879.54 39,638,001.21 5.00%
1~2 years 9,676,946.08 967,694.62 10.00%
2~3 years 3,296,613.23 988,983.97 30.00%
3~4 years 1,601,949.62 800,974.82 50.00%
4~5 years 302,778.77 242,223.02 80.00%
More than 5 years 1,004,787.65 1,004,787.65 100.00%
Total 812,244,954.89 43,642,665.29
Description of the basis for determining the combination:
On Sunday, December 31, 2023, the Company reviewed the appropriateness of the provision for bad debts of receivables in the
previous year according to the historical bad debt loss, and believed that the default probability has a strong correlation with the
aging of accounts, and the account age is still a sign of whether the credit risk of the Company’s receivables has significantly
increased. Therefore, the Company’s credit risk loss on Sunday, December 31, 2023 is estimated based on the aging of accounts
and estimated at the original loss ratio.
If the provision for bad debts on accounts receivable relies on a general model of expected credit losses:
□ Applicable √ Not applicable
208
(3) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Balance at the Amount of change in current period
Class beginning of the Recovered or Closing Balance
period Accrual Write-off Others
reversed
Provision for bad debt of
54,654,843.35 26,628,661.68 29,684,826.02 1,759,796.86 53,358,475.87
accounts receivable
Total 54,654,843.35 26,628,661.68 29,684,826.02 1,759,796.86 53,358,475.87
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
(4) Accounts receivable actually written off at the current period
Unit: yuan
Item Amount written off
Write-off of important accounts receivable:
Unit: yuan
Nature of accounts Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Description of write-off accounts receivable:
None
(5) Accounts receivable with Top 5 ending balances by debtor
Unit: yuan
Ending balance of bad debt
Closing balance Closing balance of Percentage of total closing
Ending balance of provision for accounts receivable
Unit name of contract accounts receivable balance of accounts receivable
accounts receivable and impairment provision for
assets and contract assets and contract assets
contract assets
First 132,804,349.62 132,804,349.62 16.16% 6,640,217.48
Second 28,162,882.67 28,162,882.67 3.43% 1,408,144.13
Third 23,054,581.06 23,054,581.06 2.80% 1,152,729.05
Fourth 21,432,541.07 21,432,541.07 2.61% 1,071,627.05
Fifth 18,989,901.82 18,989,901.82 2.31% 949,495.09
Total 224,444,256.24 224,444,256.24 27.31% 11,222,212.80
209
Winner Medical
6. Contract assets
(1) Contract assets
Unit: yuan
Closing Balance Balance at the beginning of the period
Item Provision for bad Provision for bad
Book balance Book value Book balance Book value
debt debt
(2) Amount and reasons for significant changes in book value during the reporting period
Unit: yuan
Item Amount of change Reason for change
(3) Classified disclosure according to bad debt accrual method
Unit: yuan
Closing Balance Balance at the beginning of the period
Book balance Provision for bad debt Book balance Provision for bad debt
Class
Proportio Accruing Book value Proportio Accruing Book value
Amount Amount Amount Amount
n proportion n proportion
Including:
Including:
Provision for bad debts based on the general expected credit loss (ECL) model
□ Applicable √ Not applicable
(4) Provision, recovery or reversal of bad debt reserves in the current period
Unit: yuan
Recovered or reversed during Write off/verification in
Item Accrual in current period Reasons
the period current period
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
Other description:
(5) Actual contract assets written off during the period
Unit: yuan
Item Amount written off
210
Write-off of important contract assets:
Unit: yuan
Reasons for Write-off procedures Whether the payments arise from
Unit name Nature of payment Amount written off
write-off performed connected transactions
Notes on the write-off of contract assets:
Other description:
7. Amounts receivable financing
(1) Presentation of receivables financing classifications
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Notes receivable - banker’s acceptance bill 29,348,618.44 93,093,113.79
Total 29,348,618.44 93,093,113.79
(2) Classified disclosure according to bad debt accrual method
Unit: yuan
Closing Balance Balance at the beginning of the period
Book balance Provision for bad debt Book balance Provision for bad debt
Class
Proportio Accruing Book value Proportio Accruing Book value
Amount Amount Amount Amount
n proportion n proportion
Including:
Including:
Provision for bad debts based on the general expected credit loss (ECL) model
Unit: yuan
Stage 1 Stage 2 Stage 3
Provision for bad debt Expected credit losses over the Expected credit losses over the Total
Expected credit losses
entire duration (without credit entire duration (with credit
over the next 12 months
impairment) impairment)
Balance on Sunday, January 1, 2023
in the current period
Basis for division of each stage and provision ratio for bad debts
None
Description of significant changes in the book balance of accounts receivable financing, particularly those reflecting adjustments
in loss provisions during the current period:
211
Winner Medical
(3) Provision, recovery or reversal of bad debt reserves in the current period
Unit: yuan
Amount of change in current period
Balance at the beginning of
Class Recovered or Closing Balance
the period Accrual Write off/verification Other changes
reversed
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
Other description:
None
(4) Receivables financing pledged by the Company at the end of the period
Unit: yuan
Item Pledged amount at the end of the period
(5) Receivables financing endorsed or discounted by the Company at the end of the period and not expired yet on the balance
sheet date
Unit: yuan
Amount with recognition terminated at the end of Amount with recognition not terminated at the end
Item
the period of the period
(6) Receivable actually written off at the current period
Unit: yuan
Item Amount written off
Important write-offs of receivables financing
Unit: yuan
Reasons for Whether the amount written off resulted from a related
Unit name Nature of payment Amount written off
write-off transaction
Description of write-off:
None
(7) Changes in the increase and decrease of receivables financing and changes in the fair value in the current period
None
(8) Other description
None
212
8. Other receivables
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Other receivables 218,913,405.18 236,298,390.78
Total 218,913,405.18 236,298,390.78
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
2) Important overdue interest
Unit: yuan
Whether there is impairment and its
Borrower Closing Balance Overdue time Overdue reason
judgment basis
Other description:
3) Classified disclosure according to bad debt accrual method
□ Applicable √ Not applicable
4) Provision, recovery or reversal of bad debt reserves in the current period
Unit: yuan
Amount of change in current period
Balance at the beginning of
Class Recovered or Closing Balance
the period Accrual Write off/verification Other changes
reversed
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
Other description:
5) Interest receivable actually written off during the period.
Unit: yuan
Item Amount written off
213
Winner Medical
Write-off of important interest receivable:
Unit: yuan
Nature of notes Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Description of write-off:
Other description:
(2) Dividends receivable
1) Classification of dividends receivable
Unit: yuan
Balance at the beginning of the
Project (or invested unit) Closing Balance
period
2) Important dividends receivable with the aging more than 1 year
Unit: yuan
Whether there is impairment and its
Project (or invested unit) Closing Balance Aging Reason for non-recovery
judgment basis
3) Classified disclosure according to bad debt accrual method
□ Applicable √ Not applicable
4) Provision, recovery or reversal of bad debt reserves in the current period
Unit: yuan
Amount of change in current period
Balance at the beginning of
Class Recovered or Closing Balance
the period Accrual Write off/verification Other changes
reversed
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
Other description:
5) Actual write-off of dividends receivable for the period
Unit: yuan
Item Amount written off
214
Important write-off of dividends receivable:
Unit: yuan
Nature of notes Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Description of write-off:
Other description:
(3) Other receivables
1) Other receivables classified by nature
Unit: yuan
Nature of payment Ending book balance Beginning book balance
Compensation for investment and construction project of Winner Medical
220,155,320.00 224,655,320.00
(Heyuan)
Margin and deposit 101,019,054.40 107,940,240.20
Export drawback 147,743.12
Employee pretty cash 3,453,440.82 3,851,541.87
Others 13,192,323.37 20,322,649.47
Total 337,820,138.59 356,917,494.66
2) Disclosure by aging
Unit: yuan
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 37,682,315.11 41,891,601.58
1~2 years 17,911,211.16 20,875,710.36
2~3 years 13,979,257.63 20,538,043.37
More than 3 years 268,247,354.69 273,612,139.35
3~4 years 17,098,300.38 240,857,729.75
4~5 years 228,654,779.32 29,659,408.36
More than 5 years 22,494,274.99 3,095,001.24
Total 337,820,138.59 356,917,494.66
215
Winner Medical
3) Classified disclosure according to bad debt accrual method
√Applicable □ Not applicable
Unit: yuan
Closing Balance Balance at the beginning of the period
Book balance Provision for bad debt Book balance Provision for bad debt
Class Accruin
Book value Accruing Book value
Proport g Proportio
Amount Amount Amount Amount proportio
ion proporti n
n
on
Provision for bad
220,391,165.90 65.24% 110,313,505.90 50.05% 110,077,660.00 224,656,320.00 62.94% 112,328,660.00 50.00% 112,327,660.00
debt by single item
Including:
Provision for bad
debt by 117,428,972.69 34.76% 8,593,227.51 7.32% 108,835,745.18 132,261,174.66 37.06% 8,290,443.88 6.27% 123,970,730.78
combination
Including:
Aging combination 16,845,623.22 4.99% 3,565,039.11 21.16% 13,280,584.11 24,821,784.54 6.96% 2,925,861.53 11.79% 21,895,923.01
Margin / deposit
100,583,349.47 29.77% 5,028,188.40 5.00% 95,555,161.07 107,291,647.00 30.06% 5,364,582.35 5.00% 101,927,064.65
combination
Other combination 147,743.12 0.04% 147,743.12
100.00
Total 337,820,138.59 118,906,733.41 35.20% 218,913,405.18 356,917,494.66 100.00% 120,619,103.88 33.79% 236,298,390.78
%
Provision for bad debt by single item:
Unit: yuan
Balance at the beginning of the period Closing Balance
Name Provision for bad Provision for bad Accruing
Book balance Book balance Reasons for provision
debt debt proportion
Government
Zijin County People’s receivables with an
224,655,320.00 112,327,660.00 220,155,320.00 110,077,660.00 50.00%
Government accounting age of 4-5
years.
Expected to be
Others 1,000.00 1,000.00 235,845.90 235,845.90 100.00%
irrecoverable
Total 224,656,320.00 112,328,660.00 220,391,165.90 110,313,505.90
Provision for bad debts based on a combination of credit risk characteristics:
Combined provision items based on aging:
Name Closing Balance
Other receivables Provision for bad debt Accruing proportion (%)
Within 1 year 11,172,638.33 558,631.88 5.00
1~2 years 159,603.64 15,960.37 10.00
2~3 years 54,266.80 16,280.04 30.00
3~4 years 4,801,895.28 2,400,947.65 50.00
4~5 years 420,000.00 336,000.00 80.00
More than 5 years 237,219.17 237,219.17 100.00
Total 16,845,623.22 3,565,039.11 21.16
216
Provision for bad debts based on the general expected credit loss (ECL) model:
Unit: yuan
Stage 1 Stage 2 Stage 3
Provision for bad debt Expected credit losses over the Expected credit losses over the Total
Expected credit losses
entire duration (without credit entire duration (with credit
over the next 12 months
impairment) impairment)
Balance on Sunday, January 1, 2023 108,878,474.34 11,740,629.54 120,619,103.88
Balance on Sunday, January 1, 2023
in the current period
Accrual in current period 2,431,037.90 2,431,037.90
Reversal in current period 4,100,382.86 4,100,382.86
Written-off in current period 57,953.35 57,953.35
Other changes 14,927.84 14,927.84
Balance on Sunday, December 31,
107,166,103.87 11,740,629.54 118,906,733.41
2023
Basis for division of each stage and provision ratio for bad debts
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable √ Not applicable
4) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Balance at the Amount of change in current period
Class beginning of the Recovered or Write Closing Balance
period Accrual Others
reversed off/verification
Provision for bad debts of
120,619,103.88 2,431,037.90 4,100,382.86 57,953.35 14,927.84 118,906,733.41
other receivables
Total 120,619,103.88 2,431,037.90 4,100,382.86 57,953.35 14,927.84 118,906,733.41
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
5) Other receivable actually written off at the current period
Unit: yuan
Item Amount written off
Other receivables actually written off 57,953.35
217
Winner Medical
Write-off of important other receivables:
Unit: yuan
Nature of notes Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Description of write-off of other receivables:
6) Other receivables with Top 5 ending balances by debtor
Unit: yuan
Proportion in total other
Ending balance of bad
Unit name Nature of payment Closing Balance Aging ending balance
debt provision
receivable
Receivables related to Heyuan 4~5 years (including 5
First 220,155,320.00 65.17% 110,077,660.00
project years)
1~2 years (including 2
Second Margin and deposit 2,311,115.80 0.68% 115,555.79
years)
3~4 years (including 4
Third Others 2,000,000.00 0.59% 1,000,000.00
years)
1~2 years (including 2
Fourth Deposit 1,328,196.61 0.39% 66,409.83
years)
Within 1 year (including
Fifth Deposit 1,176,513.00 0.35% 58,825.65
1 year)
Total 226,971,145.41 67.18% 111,318,451.27
7) Recorded under other receivables due to centralized fund management
Unit: yuan
Other description:
None
9. Advances to suppliers
(1) Presentation of advances to suppliers by aging
Unit: yuan
Closing Balance Balance at the beginning of the period
Aging
Amount Proportion Amount Proportion
Within 1 year 119,158,386.43 97.45% 226,208,813.98 98.68%
1~2 years 2,613,992.18 2.14% 2,922,303.77 1.28%
2~3 years 509,364.14 0.42% 94,155.34 0.04%
More than 3 years
Total 122,281,742.75 229,225,273.09
Reasons for non-timely settlement of important advances from customers with the aging more than 1 year:
218
(2) Advances to suppliers with Top 5 ending balances by prepayment object
Advance object Closing Balance Proportion in total ending balance of advances (%)
First 36,429,259.56 29.2
Second 5,158,215.30 4.13
Third 3,967,110.70 3.18
Fourth 2,157,568.73 1.73
Fifth 1,636,461.99 1.31
Total 49,348,616.28 39.55
Other description:
10. Inventory
Does the Company need to follow the disclosure requirements of real estate industry
No
(1) Inventory classification
Unit: yuan
Closing Balance Balance at the beginning of the period
Inventory falling Inventory falling
price reserves or price reserves or
Item provision for provision for
Book balance Book value Book balance Book value
impairment of impairment of
contract contract
performance costs performance costs
Raw materials 257,540,786.57 13,590,764.92 243,950,021.65 442,673,944.78 54,831,465.50 387,842,479.28
Work in
202,621,436.49 36,094,235.16 166,527,201.33 172,727,862.49 9,184,849.77 163,543,012.72
process
Merchandise
1,187,727,556.66 205,259,954.93 982,467,601.73 1,188,954,668.09 258,680,380.74 930,274,287.35
inventory
Semi-finished
products
24,716,158.02 24,716,158.02 61,520,340.90 130,228.78 61,390,112.12
shipped in
transit
Low priced
and easily 18,264,295.81 1,598,990.58 16,665,305.23 17,465,670.25 1,591,988.35 15,873,681.90
worn articles
Total 1,690,870,233.55 256,543,945.59 1,434,326,287.96 1,883,342,486.51 324,418,913.14 1,558,923,573.37
219
Winner Medical
(2) Inventory falling price reserves and provision for impairment of contract performance costs
Unit: yuan
Balance at the Amount increased in current period Amount decreased in current period
Item beginning of the Closing Balance
period Accrual Others Reversal or write-back Others
Raw materials 54,831,465.50 16,801,848.94 58,042,549.52 13,590,764.92
Work in process 9,184,849.77 26,909,385.39 36,094,235.16
Merchandise
258,680,380.74 266,138,204.39 1,084,931.09 320,646,375.36 -2,814.07 205,259,954.93
inventory
Semi-finished
products
130,228.78 130,228.78
shipped in
transit
Low priced and
easily worn 1,591,988.35 1,352,093.22 1,345,090.99 1,598,990.58
articles
Total 324,418,913.14 311,201,531.94 1,084,931.09 380,164,244.65 -2,814.07 256,543,945.59
Inventory impairment provision by portfolio
Unit: yuan
The end of the period The beginning of the period
Combination Balance at the
name Provision for Accruing proportion for Provision for Accruing proportion for
Closing Balance beginning of the
depreciation depreciation provision depreciation depreciation provision
period
The accounting standard for calculating the provision for inventory impairment by portfolio
(3) Description of ending balance of inventory containing the capitalized amount of borrowing costs
(4) Description of current amortization amount of contract performance cost
11. Assets held for sales
Unit: yuan
Provision for Estimated disposal Estimated disposal
Item Ending book balance Ending book value Fair value
impairment cost time
Other description:
12. Non-current assets due within a year
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Long-term receives due within one year 4,379,308.17
Total 4,379,308.17
(1) Non-current assets due within a year
□ Applicable √ Not applicable
220
(2) Other non-current assets due within a year
□ Applicable √ Not applicable
13. Other current assets
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Return cost receivable 779,058.41 1,181,368.44
Interest on fixed deposit / large deposit 97,786,429.67 101,670,459.07
VAT input tax to be deducted / uncertified input tax 51,890,783.52 5,863,706.62
Prepaid corporate income tax 38,171,660.89 4,773,735.12
Unamortized expenses 10,150,883.88 4,853,649.47
Pledged certificate of deposit (1*) 180,000,000.00
Others 74,836.27 716,165.75
Total 378,853,652.64 119,059,084.47
Other description:
1* Shenzhen Winner Medical and Shenzhen Purcotton pledged time deposit certificates to issue bank acceptance bills.
14. Debt investment
(1) Debt investment
Unit: yuan
Closing Balance Balance at the beginning of the period
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Changes in the provision for impairment of debt investments during the period
Unit: yuan
Balance at the beginning of the Decrease in current
Item Increase in current period Closing Balance
period period
(2) Major debt investments at the end of the period
Unit: yuan
Closing Balance Balance at the beginning of the period
Debt item Book Maturity Overdue Book Maturity Overdue
Coupon rate Actual rate Coupon rate Actual rate
value date principal value date principal
221
Winner Medical
(3) Provision for impairment
Unit: yuan
Stage 1 Stage 2 Stage 3
Provision for bad debt Expected credit losses over the Expected credit losses over the Total
Expected credit losses
entire duration (without credit entire duration (with credit
over the next 12 months
impairment) impairment)
Balance on Sunday, January 1, 2023
in the current period
Basis for division of each stage and provision ratio for bad debts
(4) Debt investments actually written off during the period
Unit: yuan
Item Amount written off
Significant write-offs of debt investments
Debt investment write-offs:
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable √ Not applicable
Other description:
15. Other debt investments
(1) Other debt investments
Unit: yuan
Accumulated
Fair value impairment
Balance at the Accumulated
Accrued Interest change in Closing provision
Item beginning of Cost fair value Remark
interest adjustments current Balance recognized in other
the period change
period comprehensive
income
(2) Changes in the provision for impairment of other debt investments during the period
Unit: yuan
Balance at the beginning of the Decrease in current
Item Increase in current period Closing Balance
period period
Other important debt investments at the end of the period
Unit: yuan
Closing Balance Balance at the beginning of the period
Debt item Book Maturity Overdue Book Maturity Overdue
Coupon rate Actual rate Coupon rate Actual rate
value date principal value date principal
222
(3) Provision for impairment
Unit: yuan
Stage 1 Stage 2 Stage 3
Provision for bad debt Expected credit losses over the Expected credit losses over the Total
Expected credit losses
entire duration (without credit entire duration (with credit
over the next 12 months
impairment) impairment)
Balance on Sunday, January 1, 2023
in the current period
Basis for division of each stage and provision ratio for bad debts
(4) Other debt investment actually written off at the current period
Unit: yuan
Item Amount written off
Important write-offs of other debt investments
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable √ Not applicable
Other description:
16. Other equity instrument investments
Unit: yuan
Balance Gain recognized Loss included Accumulated gains Loss accumulated Dividend Reasons for designating to
Closing at the in other in other included in other in other income be measured at fair value
Project name Balanc beginnin comprehensive comprehensive comprehensive comprehensive recognize and its changes are
e g of the income for the income for the income at the end income at the end d during recorded into other
period period period of the period of the period the period comprehensive income
Derecognition occurred in the current period
Unit: yuan
Accumulated gains transferred to Cumulative losses transferred to Reasons for termination of
Project name
retained earnings retained earnings confirmation
Itemized disclosure of the current non-trading equity instrument investment
Unit: yuan
Reasons for designating to
Amount of other Reasons for other
be measured at fair value
Recognized dividend Accumulated Accumulated comprehensive comprehensive income
Project name and its changes are recorded
income gains losses income transferred transferring into retained
into other comprehensive
into retained income income
income
Other description:
223
Winner Medical
17. Long-term receivables
(1) Long-term receivables
Unit: yuan
Closing Balance Balance at the beginning of the period
Discount
Item Provision Book Provision
Book balance Book value Book value rate range
for bad debt balance for bad debt
Finance leases 40,068,572.38 40,068,572.38
Including: unrealized financing
-9,320,807.04 -9,320,807.04
income.
Non-current assets due within a
-4,379,308.17 -4,379,308.17
year
Total 35,689,264.21 35,689,264.21
(2) Classified disclosure according to bad debt accrual method
Unit: yuan
Closing Balance Balance at the beginning of the period
Book balance Provision for bad debt Book balance Provision for bad debt
Class
Accruing Book value Accruing Book value
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Including:
Including:
Provision for bad debts based on the general expected credit loss (ECL) model
Unit: yuan
Stage 1 Stage 2 Stage 3
Provision for bad debt Expected credit losses over the Expected credit losses over the Total
Expected credit losses
entire duration (without credit entire duration (with credit
over the next 12 months
impairment) impairment)
Balance on Sunday, January 1, 2023
in the current period
Basis for division of each stage and provision ratio for bad debts
(3) Provision, recovery or reversal of bad debt reserves in the current period
Unit: yuan
Amount of change in current period
Balance at the beginning of
Class Recovered or Closing Balance
the period Accrual Write off/verification Other changes
reversed
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
224
Other description:
(4) Long-term receivables actually written off during the period
Unit: yuan
Item Amount written off
Significant long-term receivables written off:
Unit: yuan
Nature of notes Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Notes on the write-off of long-term receivables:
18. Long-term equity investment
Unit: yuan
Opening Increase or decrease in current period
balance Investment Adjustme
Declared Ending
Beginning of Furth Capit gains and nt of Change Provisi
payment of Ending balance balance of
Invested unit balance (book provision er al losses other s in on for Other
cash (book value) impairment
value) for invest reduc recognized by comprehe other impair s
dividends or provision
impairme ment tion the equity nsive equity ment
nt profits
method income
I. Joint ventures
II. Cooperative
enterprise
Chengdu Winner 21,642,696.16 1,184,337.91 2,450,000.00 20,377,034.07
Hubei Xianchuang
104,939.83 397,270.30 502,210.13
Technology Co., Ltd.
Subtotal 21,747,635.99 1,581,608.21 2,450,000.00 20,879,244.20
Total 21,747,635.99 1,581,608.21 2,450,000.00 20,879,244.20
The recoverable amount is determined according to the higher of the net amount of the assets fair value subtracted by the disposal
costs
□ Applicable √ Not applicable
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable √ Not applicable
Reasons for the apparent inconsistency between the aforementioned information and the data used in impairment testing in prior
years or external information
N/A
Reasons for the variance between the information utilized in the Company’s impairment testing in prior years and the actual
circumstances of the current year
N/A
Other description:
225
Winner Medical
19. Other non-current financial assets
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Equity instrument investments 70,000,000.00 40,000,000.00
Total 70,000,000.00 40,000,000.00
Other description:
20. Investment real estates
(1) Investment real estates using cost measurement mode
√Applicable □ Not applicable
Unit: yuan
Construction in
Item Houses and buildings Land use right Total
progress
I. Original book value
1. Balance at the beginning of the period 10,739,083.13 10,739,083.13
2. Amount increased in current period
(1) Outsourcing
(2) Transfer from inventory / fixed assets /
construction in progress
(3) Increase by business combination
3. Amount decreased in current period
(1) Disposal
(2) Other roll-out
4. Closing Balance 10,739,083.13 10,739,083.13
II. Accumulated depreciation and accumulated
amortization
1. Balance at the beginning of the period 1,992,068.88 1,992,068.88
2. Amount increased in current period 1,053,672.46 1,053,672.46
(1) Provision or amortization 1,053,672.46 1,053,672.46
3. Amount decreased in current period
(1) Disposal
(2) Other roll-out
4. Closing Balance 3,045,741.34 3,045,741.34
III. Provision for impairment
1. Balance at the beginning of the period
2. Amount increased in current period
226
Construction in
Item Houses and buildings Land use right Total
progress
(1) Accrual
3. Amount decreased in current period
(1) Disposal
(2) Other roll-out
4. Closing Balance
IV. Book value
1. Ending book value 7,693,341.79 7,693,341.79
2. Beginning book value 8,747,014.25 8,747,014.25
The recoverable amount is determined according to the higher of the net amount of the assets fair value subtracted by the disposal
costs
□ Applicable √ Not applicable
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable √ Not applicable
Reasons for the apparent inconsistency between the aforementioned information and the data used in impairment testing in prior
years or external information
N/A
Reasons for the variance between the information utilized in the Company’s impairment testing in prior years and the actual
circumstances of the current year
N/A
Other description:
None
(2) Investment real estates using fair value measurement mode
□ Applicable √ Not applicable
(3) Converted to investment property and valued at fair value
Unit: yuan
Accounts before Approval Impact on profit or Impact on other comprehensive
Item Amount Conversion reason
conversion procedures loss income
(4) Investment real estates without certificate of title
Unit: yuan
Reasons for not obtaining the
Item Book value
certificate of title
Other description:
227
Winner Medical
21. Fixed assets
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Fixed assets 2,749,018,750.62 2,312,982,598.88
Total 2,749,018,750.62 2,312,982,598.88
(1) Fixed assets
Unit: yuan
Transportation Electronic equipment and
Item Houses and building Machinery equipment Total
equipment office equipment, etc.
I. Original book value:
1. Balance at the
1,539,756,530.45 1,738,833,686.67 32,042,953.81 173,097,303.06 3,483,730,473.99
beginning of the period
2. Amount increased
515,581,061.39 244,193,161.07 4,987,640.28 15,506,096.57 780,267,959.31
in current period
(1) Purchase 39,289,356.95 104,783,316.30 1,718,927.89 12,061,059.72 157,852,660.86
(2) Transfer from
422,939,409.33 93,296,726.87 1,637,866.64 517,874,002.84
construction in progress
(3) Increase by
53,352,295.11 46,113,117.90 3,268,712.39 1,807,170.21 104,541,295.61
business combination
3. Amount decreased
45,508,790.43 122,452,296.25 1,486,722.32 24,469,263.69 193,917,072.69
in current period
(1) Disposal or scrap 45,508,790.43 122,452,296.25 1,486,722.32 24,469,263.69 193,917,072.69
4. Closing Balance 2,009,828,801.41 1,860,574,551.49 35,543,871.77 164,134,135.94 4,070,081,360.61
II. Accumulated depreciation
1. Balance at the
342,594,926.93 597,986,893.92 18,669,157.81 87,708,190.39 1,046,959,169.05
beginning of the period
2. Amount increased
69,485,618.51 148,331,950.96 4,626,339.44 26,598,885.75 249,042,794.66
in current period
(1) Accrual 66,327,702.62 145,447,227.12 3,745,028.42 26,356,373.89 241,876,332.05
(2) Increase by
3,157,915.89 2,884,723.84 881,311.02 242,511.86 7,166,462.61
business combination
3. Amount decreased
29,865,953.21 43,192,397.01 1,219,541.07 21,552,966.59 95,830,857.88
in current period
(1) Disposal or scrap 29,865,953.21 43,192,397.01 1,219,541.07 21,552,966.59 95,830,857.88
4. Closing Balance 382,214,592.23 703,126,447.87 22,075,956.18 92,754,109.55 1,200,171,105.83
III. Provision for impairment
1. Balance at the
43,277,161.98 79,082,344.13 25,258.85 1,403,941.10 123,788,706.06
beginning of the period
2. Amount increased
1,457,194.17 13,111.06 1,470,305.23
in current period
(1) Accrual 1,457,194.17 13,111.06 1,470,305.23
3. Amount decreased
4,070,489.91 297,017.22 4,367,507.13
in current period
(1) Disposal or scrap 4,070,489.91 297,017.22 4,367,507.13
4. Closing Balance 43,277,161.98 76,469,048.39 25,258.85 1,120,034.94 120,891,504.16
IV. Book value
1. Ending book value 1,584,337,047.20 1,080,979,055.23 13,442,656.74 70,259,991.45 2,749,018,750.62
2. Beginning book value 1,153,884,441.54 1,061,764,448.62 13,348,537.15 83,985,171.57 2,312,982,598.88
228
(2) Fixed assets that are temporarily idle
Unit: yuan
Accumulated Provision for
Item Original book value Book value Remark
depreciation impairment
Houses and building 36,623.93 24,171.79 8,789.75 3,662.39
Machinery equipment 36,313,653.56 16,519,158.73 3,763,922.85 16,030,571.98
Electronic equipment and office
465,676.93 193,738.05 10,204.04 261,734.84
equipment, etc.
Total 36,815,954.42 16,737,068.57 3,782,916.64 16,295,969.21
(3) Fixed assets leased out by operating lease
(4) Fixed assets without certificate of title
Unit: yuan
Item Book value Reasons for not obtaining the certificate of title
Winner Medical (Tianmen) - Automated storage 65,000,041.16 The formalities have not yet been completed
Spunlace Phase III No.2 Finished Product Workshop
13,630,500.13 The formalities have not yet been completed
Project of Winner Medical (Tianmen)
Winner Medical (Wuhan) - No.1 Sorting Workshops
63,227,429.04 The formalities have not yet been completed
(Phase II)
Winner Medical (Wuhan) - No.2 Sorting Workshops
123,176,674.20 The formalities have not yet been completed
(Phase II)
Winner Medical (Wuhan) - No.3 Sorting Workshops
55,901,342.48 The formalities have not yet been completed
(Phase II)
Other description:
(5) Impairment testing of fixed assets
√Applicable □ Not applicable
The recoverable amount is determined according to the higher of the net amount of the assets fair value subtracted by the disposal
costs
□ Applicable √ Not applicable
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable √ Not applicable
Reasons for the apparent inconsistency between the aforementioned information and the data used in impairment testing in prior
years or external information
229
Winner Medical
Reasons for the variance between the information utilized in the Company’s impairment testing in prior years and the actual
circumstances of the current year
Other description:
(6) Liquidation of fixed assets
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Other description:
22. Construction in progress
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Construction in progress 984,571,329.05 765,009,910.63
Total 984,571,329.05 765,009,910.63
(1) Construction in progress
Unit: yuan
Closing Balance Balance at the beginning of the period
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Winner Medical
(Wuhan) engineering 312,034,251.51 312,034,251.51 375,173,643.40 375,173,643.40
project
Winner Medical (Jiayu)
308,354,182.04 308,354,182.04 165,245,291.40 165,245,291.40
engineering project
Winner Medical
(Shenzhen) engineering 76,348,750.97 76,348,750.97 12,844,241.04 12,844,241.04
project
Winner Medical
(Hunan) engineering 59,274,700.93 59,274,700.93 597,437.74 597,437.74
project
Longterm Medical
18,342,398.26 18,342,398.26 285,487.51 285,487.51
engineering project
Winner Guilin
46,030,337.25 10,205,833.26 35,824,503.99 1,877,054.35 1,877,054.35
engineering project
Winner Medical
(Huanggang) 12,299,188.10 12,299,188.10 83,828,495.28 83,828,495.28
Engineering Project
Jingmen infrastructure
36,276,311.67 36,276,311.67
project
Tianmen infrastructure
1,009,831.16 1,009,831.16 397,954.71 397,954.71
project
Other equipment to be
installed and sporadic 161,112,922.09 29,400.00 161,083,522.09 99,349,473.53 10,865,480.00 88,483,993.53
projects
Total 994,806,562.31 10,235,233.26 984,571,329.05 775,875,390.63 10,865,480.00 765,009,910.63
230
(2) Current changes in major projects under construction
Unit: yuan
Including: Funds for the
Cumulative investment in the project
Amount Accumulat interest current period
Other
Balance at the Amount carried ed amount capitalizat
decreases Interest
Project name Budget number beginning of increased in forward to of interest ion funds Source
in current Closing Proportion to Progress capitali
the period current period fixed assets in capitalizati in the of
period Balance the budget of works zation
current period on current funds
period rate
Integrated Workshop Project
of Winner Medical 85,000,000.00 83,828,495.28 277,357.92 84,105,853.20 98.95% 100.00% Others
(Huanggang)
Winner Industrial Park
(Jiayu) Project
272,380,000.00 141,859,864.32 43,523,853.22 185,383,717.54 68.06% 68.06% Others
Construction Engineering of
Workshop 1-4
Comprehensive Workshop
Engineering of Winner 73,000,000.00 36,276,311.67 41,574,765.10 77,851,076.77 106.65% 100.00% Others
Medical (Jingmen)
Pile Foundation Works for
242,305,445.7
Phase II 1-3 Sorting Center 268,000,000.00 184,403,669.79 57,901,775.91 90.41% 100.00% Others
0
of Winner Medical (Wuhan)
Winner Medical (Wuhan)
110,871,722.11 91,545,458.64 91,545,458.64 82.57% 95.00% Others
Phase II Main Project
Automated Storage
Engineering in Phase II Plant 96,000,000.00 21,238,938.05 59,469,026.55 80,707,964.60 84.07% 95.00% Others
of Winner Medical (Wuhan)
R&D Center Project of
35,666,270.00 19,632,809.17 11,452,472.03 31,085,281.20 87.16% 95.00% Others
Winner Medical (Wuhan)
Shift Building and Canteen
Expansion Project of Winner 33,213,730.00 19,928,238.00 11,777,162.06 31,705,400.06 95.46% 98.00% Others
Medical (Wuhan)
Medical Industry Building of
261,723,960.00 2,741,232.41 66,245,742.34 68,986,974.75 26.36% 14.00% Others
Winner Medical (Shenzhen)
Winner Medical (Hunan)
Medical Device Industrial 600,000,000.00 597,437.74 58,677,263.19 59,274,700.93 9.88% 60.00% Others
Park Project Phase I
404,262,375.6
Total 1,835,855,682.11 602,052,455.07 350,899,418.32 548,689,497.72
7
(3) Provision for impairment of construction in progress in current period
Unit: yuan
Balance at the
Increase in current Decrease in current
Item beginning of the Closing Balance Reason for accrual
period period
period
Belt pressing and threading
9,899,180.00 9,899,180.00
machine for N95 masks
Loader and others 966,300.00 29,400.00 966,300.00 29,400.00
Winner Guilin - Buildings in Project on hold due to policy
10,205,833.26 10,205,833.26
1-3# Workshops reason
Total 10,865,480.00 10,235,233.26 10,865,480.00 10,235,233.26 --
Other description:
(4) Impairment testing of construction in progress
□ Applicable √ Not applicable
231
Winner Medical
(5) Engineering materials
Unit: yuan
Closing Balance Balance at the beginning of the period
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Other description:
23. Productive biological assets
(1) Productive biological assets using cost measurement mode
□ Applicable √ Not applicable
(2) Impairment testing of productive biological assets using the cost measurement model
□ Applicable √ Not applicable
(3) Productive biological assets using fair value measurement mode
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
(1) Right-of-use assets
Unit: yuan
Item House building Total
I. Original book value
1. Balance at the beginning of the period 916,984,153.11 916,984,153.11
2. Amount increased in current period 215,342,341.68 215,342,341.68
(1) New lease 207,448,900.27 207,448,900.27
(2) Increase by business combination 7,893,441.41 7,893,441.41
3. Amount decreased in current period 266,772,845.29 266,772,845.29
(1) Disposal 266,772,845.29 266,772,845.29
4. Closing Balance 865,553,649.50 865,553,649.50
II. Accumulated depreciation
1. Balance at the beginning of the period 444,628,027.47 444,628,027.47
232
Item House building Total
2. Amount increased in current period 225,687,987.31 225,687,987.31
(1) Accrual 224,710,757.36 224,710,757.36
(2) Increase by business combination 985,973.86 985,973.86
(3) Exchange rate movement -8,743.91 -8,743.91
3. Amount decreased in current period 222,258,386.64 222,258,386.64
(1) Disposal 222,258,386.64 222,258,386.64
4. Closing Balance 448,057,628.14 448,057,628.14
III. Provision for impairment
1. Balance at the beginning of the period
2. Amount increased in current period
(1) Accrual
3. Amount decreased in current period
(1) Disposal
4. Closing Balance
IV. Book value
1. Ending book value 417,496,021.36 417,496,021.36
2. Beginning book value 472,356,125.64 472,356,125.64
(2) Testing for impairment of right-of-use assets
□ Applicable √ Not applicable
Other description:
233
Winner Medical
26. Intangible assets
(1) Intangible assets
Unit: yuan
Nonpaten
ted Software use Franchised use Trademark
Item Land use right Patent right Client relations Total
technolog right right right
y
I. Original book value
1. Balance at the
566,900,313.57 269,943,554.50 83,745,573.57 10,228,226.53 67,090,980.97 180,488,908.40 1,178,397,557.54
beginning of the period
2. Amount
increased in current 14,767,966.00 14,898,538.57 28,080,000.00 9,080,000.00 66,826,504.57
period
(1) Purchase 13,115.00 14,898,538.57 14,911,653.57
(2) Internal R&D
(3) Increase by
14,754,851.00 28,080,000.00 9,080,000.00 51,914,851.00
business combination
3. Amount
decreased in current 33,988,851.00 80,968.09 67,000.00 34,136,819.09
period
(1) Disposal 9,018,493.00 80,968.09 67,000.00 9,166,461.09
(2) Other decreases 24,970,358.00 24,970,358.00
4. Closing Balance 547,679,428.57 269,943,554.50 98,563,144.05 10,228,226.53 95,103,980.97 189,568,908.40 1,211,087,243.02
II. Accumulated
amortization
1. Balance at the
51,413,899.49 22,902,340.61 48,333,127.60 10,228,226.53 7,377,554.38 5,032,605.48 145,287,754.09
beginning of the period
2. Amount
increased in current 13,069,639.33 29,325,576.50 6,832,684.40 7,746,945.04 17,450,479.45 74,425,324.72
period
(1) Accrual 12,448,088.33 29,325,576.50 6,832,684.40 7,746,945.04 17,450,479.45 73,803,773.72
(2) Increase by
621,551.00 621,551.00
business combination
3. Amount
decreased in current 3,791,683.44 12,135.86 50,250.00 3,854,069.30
period
(1) Disposal 3,791,683.44 12,135.86 50,250.00 3,854,069.30
4. Closing Balance 60,691,855.38 52,227,917.11 55,153,676.14 10,228,226.53 15,074,249.42 22,483,084.93 215,859,009.51
III. Provision for impairment
1. Balance at the
beginning of the period
2. Amount
increased in current
period
(1) Accrual
3. Amount
decreased in current
period
(1) Disposal
4. Closing Balance
IV. Book value
1. Ending book
486,987,573.19 217,715,637.39 43,409,467.91 80,029,731.55 167,085,823.47 995,228,233.51
value
2. Beginning book
515,486,414.08 247,041,213.89 35,412,445.97 59,713,426.59 175,456,302.92 1,033,109,803.45
value
The proportion of intangible assets formed through internal R & D of the Company in the balance of intangible assets at the end
of current period: 0.00%
234
(2) Land use right without certificate of title
Unit: yuan
Item Book value Reasons for not obtaining the certificate of title
Winner Medical (Shenzhen) - North Side of Guifang The two certificates are consolidated into one, and the real estate
26,973,333.33
Road, Guanlan Street Planning certificate can be applied for upon completion
Winner Medical (Hunan) - Phase II land for infusion The two certificates are consolidated into one, and the real estate
83,166,813.30
category certificate can be applied for upon completion
Total 110,140,146.63
Other description:
(3) Testing for impairment of intangible assets
□ Applicable √ Not applicable
27. Goodwill
(1) Original book value of goodwill
Unit: yuan
Decrease in
Increase in current period
Invested entity name or goodwill Balance at the beginning current period
Closing Balance
forming matter of the period Formed by business Increase business
Disposal
combination acquisition
Business combination not under
common control - Acquisition of 2,681,232.09 2,681,232.09
Winner Medical Malaysia
Business combination not under
common control - Acquisition of 390,472,978.67 390,472,978.67
Longterm Health
Business combination not under
common control - Acquisition of 244,814,604.75 8,401,335.65 253,215,940.40
Winner Guilin
Business combination not under
common control - Acquisition of 388,989,258.26 388,989,258.26
Winner Medical (Hunan)
Business combination not under
common control - Acquisition of 20,397,972.33 20,397,972.33
Junjian Medical
Total 1,047,356,046.10 8,401,335.65 1,055,757,381.75
235
Winner Medical
(2) Provision for impairment of goodwill
Unit: yuan
Balance at the Increase in current period Decrease in current period
Invested entity name or goodwill forming
beginning of the Closing Balance
matter Accrual Disposal
period
Business combination not under common
2,681,232.09 2,681,232.09
control - Acquisition of Malaysia Winner
Business combination not under common
32,642,673.30 32,642,673.30
control - Acquisition of Winner Guilin
Business combination not under common
control - Acquisition of Winner Medical 156,144,473.91 156,144,473.91
(Hunan)
Total 2,681,232.09 188,787,147.21 191,468,379.30
(3) Information relating to the asset group or asset group combination of goodwill
Operating
Is it consistent with
Name The composition and basis of the asset group or portfolio it belongs to segments and
previous years?
basis
Longtai Medical and its subsidiaries operate related long-term assets, with cash
Longterm Medical and its
inflows generated being largely independent of those generated by other assets or Yes
subsidiaries
asset groups.
Winner Guilin and its subsidiaries operate related long-term assets, with cash
Winner Guilin and its
inflows generated being largely independent of those generated by other assets or No
subsidiaries
asset groups.
Winner Medical (Hunan) and its subsidiaries operate related long-term assets, with
Winner Medical (Hunan) the cash inflows generated being essentially independent of those generated by Yes
other assets or asset groups.
Junjian Medical operate related long-term assets, with cash inflows generated being
Junjian Medical Yes
largely independent Junjian generated by other assets or asset groups.
Changes in asset groups or combinations of asset groups
Objective facts and basis leading to
Name Composition before the change Composition after the change
changes
Winner Guilin and its Operating long-term assets of Winner Operating long-term assets of Winner
Acquisition of subsidiaries
subsidiaries Guilin Guilin and its subsidiaries
Other description
(4) Specific method for determining recoverable amount
The recoverable amount is determined according to the higher of the net amount of the assets fair value subtracted by the disposal
costs
□ Applicable √ Not applicable
236
The recoverable amount is determined based on the present value of expected future cash flows
√Applicable □ Not applicable
Unit: yuan
Key Key
Years of
parameters parameters
Impairment the Basis for determining the key
Item Book value Recoverable amount for the for the
amount forecast parameters of the stable period
forecast stabilization
period
period period
The pre-tax discount rate level is
determined based on the region where
the Company’s main business is located
Longterm Medical and and the business scope, considering the
1,380,269,574.65 1,500,150,000.00 5 [Note 1] [Note 1]
its subsidiaries past performance of the asset group,
production expansion plans, and
expectations for the development of the
market in which it operates.
The pre-tax discount rate level is
determined based on the region where
the Company’s main business is located
Winner Guilin and its and the business scope, considering the
578,432,673.30 545,790,000.00 32,642,673.30 5 [Note 2] [Note 2]
subsidiaries past performance of the asset group,
production expansion plans, and
expectations for the development of the
market in which it operates.
The pre-tax discount rate level is
determined based on the region where
the Company’s main business is located
and the business scope, considering the
Winner Medical (Hunan) 965,514,532.61 738,230,000.00 156,144,473.91 5 [Note 3] [Note 3]
past performance of the asset group,
production expansion plans, and
expectations for the development of the
market in which it operates.
The pre-tax discount rate level is
determined based on the region where
the Company’s main business is located
Junjian Medical 130,313,066.66 214,578,947.95 5 [Note 4] [Note 4] and the business scope, considering the
past performance of the asset group, and
expectations for the development of the
market in which it operates.
Total 3,054,529,847.22 2,998,748,947.95 188,787,147.21
Reasons for the apparent inconsistency between the aforementioned information and the data used in impairment testing in prior years or external
information
[Note 1] Zhejiang Longterm and its subsidiaries are mainly engaged in the research and development, production and sales of products related to
wound care, puncture care, stoma care, disinfection, minimally invasive and others. Based on a comprehensive analysis of its signed contracts,
agreements, development plans, business trends over the years, market competition and other factors, according to specific product categories, it is
predicted that the income growth rates from 2024 to 2028 will be 13.10%, 14.09%, 11.62%, 8.79% and 5.65%, respectively. Gross margins are
45.78%, 45.34%, 45.06%, 44.77%, and 44.51% from 2024 to 2028, respectively. In the stable period, the revenue growth rate is zero, maintaining
consistency with the gross profit margin of 2028, and applying a discount rate of 12.36%.
[Note 2] Winner Guilin and its subsidiaries are mainly engaged in the research and development, production and sales of products such as medical
gloves, protective gloves and condoms. Based on a comprehensive analysis of its signed contracts, agreements, development plans, business
trends over the years, market competition and other factors, according to specific product categories, it is predicted that the income growth rates
from 2024 to 2028 will be 17.99%, 23.80%, 23.61%, 16.42% and 8.37%, respectively. Gross margins are 24.22%, 25.94%, 27.79%, 28.58%, and
28.61% from 2024 to 2028, respectively. In the stable period, the revenue growth rate is zero, maintaining consistency with the gross profit
margin of 2028, and applying a discount rate of 11.72%.
[Note 3] Winner Medical (Hunan) and its subsidiaries are mainly engaged in the research and development, production and sales of disposable
sterile infusion medical devices. Based on a comprehensive analysis of its signed contracts, agreements, development plans, business trends over
the years, market competition and other factors, according to specific product categories, it is predicted that the income growth rates from 2024 to
2028 will be 16.36%, 38.60%, 31.11%, 15.60% and 10.72%, respectively. Gross margins are 27.38%, 24.70%, 26.28%, 27.65%, and 28.23% from
2024 to 2028, respectively. In the stable period, the revenue growth rate is zero, maintaining consistency with the gross profit margin of 2028, and
applying a discount rate of 11.64%.
[Note 4] Junjian Medical is mainly engaged in the sales of medical equipment. Based on a comprehensive analysis of its signed contracts,
agreements, development plans, business trends over the years, market competition and other factors, according to specific product categories, it is
predicted that the income growth rates from 2024 to 2028 will be 8.50%, 18.11%, 23.34%, 19.67% and 18.91%, respectively. Gross margins are
42.67%, 40.86%, 39.62%, 39.51% and 38.90% from 2024 to 2028, respectively. In the stable period, the revenue growth rate is zero, maintaining
consistency with the gross profit margin of 2028, and applying a discount rate of 15.17%.
237
Winner Medical
The Company engaged Yinxin Appraisal Co., Ltd. to perform impairment tests and produce asset evaluation reports regarding the
goodwill generated from the acquisition of equity in its three subsidiaries: Zhejiang Longterm Medical Technology Co., Ltd.,
Winner Guilin Latex Co., Ltd., and Winner Medical (Hunan) Co., Ltd.
In the impairment test, the present value (recoverable amount) of the estimated future cash flows of the three companies was
evaluated using the goodwill formed by the merger and acquisition of Zhejiang Longtai Medical Technology Co., Ltd. by Winner
Medical Co., Ltd. for financial reporting purposes. The evaluation results were obtained from the Asset Evaluation Report on the
Recoverable Amount of the Asset Group (Yin Xin Ping Bao Zi [2024] No. D00027), the Asset Assessment Report on the
Recoverable Amount of the Asset Group for Winner Medical Co., Ltd.’s acquisition of Winner Guilin Latex Co., Ltd. for financial
reporting purposes (Yinxin Pingbao Zi [2024] No. D00026), and the Asset Evaluation Report on the Recoverable Amount of the
Asset Group for Winner Medical Co., Ltd’s involvement in the financial reporting purpose of its merger with Winner Medical
(Hunan) Co., Ltd., (Yin Xin Ping Bao Zi [2024] No. D00025).
Following the assessment, the recoverable amount of Zhejiang Longtai Medical Technology Co., Ltd. exceeded the book value of
the asset group, including goodwill, thus no goodwill impairment provision was made for this period. Conversely, the recoverable
amount of Winner Guilin Latex Co., Ltd. was lower than the book value of the asset group, resulting in a goodwill impairment
provision of 32,642,673.30 yuan in the current period. Similarly, the recoverable amount of Winner Pingan Medical (Hunan) Co.,
Ltd. was also lower than the book value of the asset group containing goodwill, leading to a goodwill impairment provision of
156,144,473.91 yuan in the current period.
The reasons for the variance between the Company’s impairment test information from previous years and the current year’s
actual situation are not applicable.
(5) Completion of performance commitments and corresponding impairment of goodwill
A performance commitment is present when goodwill is established, and the reporting period, or the preceding period, falls within
the commitment period.v
□ Applicable √ Not applicable
Other description:
28. Long-term unamortized expenses
Unit: yuan
Balance at the beginning Amount increased in Amortization amount in
Item Other decreases Closing Balance
of the period current period current period
Decoration cost 38,774,369.19 23,525,966.15 8,729,563.16 17,104,589.82 36,466,182.36
Decoration expenses for
operating leased fixed 93,917,916.84 43,581,658.01 44,585,335.55 1,126,061.50 91,788,177.80
assets
Others 0.00 4,159,913.21 1,323,803.22 0.00 2,836,109.99
Total 132,692,286.03 71,267,537.37 54,638,701.93 18,230,651.32 131,090,470.15
Other description:
238
29. Deferred income tax assets / deferred income tax liabilities
(1) Unoffset deferred income tax assets
Unit: yuan
Closing Balance Balance at the beginning of the period
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Provision for impairment of assets 563,729,896.96 93,836,596.43 635,561,435.85 113,878,209.59
Unrealized profit of internal transaction 95,050,168.29 19,008,937.89 176,701,413.90 33,954,186.63
Deductible loss 162,261,104.42 27,044,245.03 121,028,998.43 29,902,881.36
Dismission welfare 4,779,605.32 716,940.80 2,858,415.48 483,093.52
Deferred income 121,649,364.97 19,453,796.42 98,791,412.91 14,929,042.38
Member points 8,896,543.12 2,224,135.78 9,067,179.42 2,266,794.86
Accrued liabilities 1,171,229.85 292,807.46 2,781,740.46 624,681.92
Advertising expenses in excess of the tax
1,176,743.33 176,511.50
deductible limit
Changes in fair value of trading financial
5,189,000.26 778,350.04
assets
Deferred tax assets arising from leases 494,525,992.95 115,610,000.62 533,664,057.97 125,559,711.50
Total 1,452,063,905.88 278,187,460.43 1,586,820,398.01 322,553,463.30
(2) Unoffset deferred income tax liabilities
Unit: yuan
Closing Balance Balance at the beginning of the period
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Asset evaluation increment for business
647,328,681.03 110,179,927.94 665,595,964.73 109,308,421.87
combination not under common control
Changes in fair value of trading financial assets 41,058,540.71 6,289,451.44 1,983,960.49 304,114.59
Depreciation of fixed assets 116,084,112.68 17,416,107.82 149,207,192.40 22,381,078.85
Others 16,907,993.66 2,536,199.05 11,223,250.00 1,683,487.50
case that the change of a differences arising
457,331,866.07 104,935,304.46 472,356,125.66 110,581,486.40
Deferred income tax liabilities
Total 1,278,711,194.15 241,356,990.71 1,300,366,493.28 244,258,589.21
239
Winner Medical
(3) Deferred income tax assets or liabilities presented as net amount after offset
Unit: yuan
Ending offset amount of Ending balance of deferred Beginning offset amount of Beginning balance of
Item deferred income tax assets and income tax assets and deferred income tax assets and deferred income tax assets
liabilities liabilities after offset liabilities and liabilities after offset
Deferred income tax
102,836,212.41 175,351,248.02 110,581,486.40 211,971,976.90
assets
Deferred income tax
102,836,212.41 138,520,778.30 110,581,486.40 133,677,102.81
liabilities
(4) Details of unrecognized deferred income tax assets
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Deductible loss 237,469,440.67 251,019,604.38
Provision for impairment of assets and amortization of depreciation 1,003,903.52 7,053,355.76
Dismission welfare 996,517.00
Total 238,473,344.19 259,069,477.14
(5) Deductible losses on unrecognized deferred income tax assets will expire in the following year
Unit: yuan
Year Closing balance Beginning amount Remark
2023 25,574,944.59
2024 49,242,056.04 48,794,287.92
2025 53,806,994.23 46,546,726.71
2026 67,039,319.19 74,343,804.38
2027 64,047,377.46 55,364,880.58
2028 2,597,636.60
2029 years and to the following
No maturity date 736,057.15 394,960.20
Total 237,469,440.67 251,019,604.38
Other description:
240
30. Other non-current assets
Unit: yuan
Closing Balance Balance at the beginning of the period
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Advance project payment /
equipment purchases
payment / advance store 84,628,360.75 84,628,360.75 83,524,640.64 83,524,640.64
engineering and decoration
payment
Shenzhen Longhua Industrial
20,228,190.61 20,228,190.61
Park and land use rights
Total 104,856,551.36 104,856,551.36 83,524,640.64 83,524,640.64
Other description:
31. Assets with ownership or use rights restricted
Unit: yuan
The end of the period The beginning of the period
Item Type of Type of
Book balance Book value Restricted situation Book balance Book value Restricted situation
restriction restriction
Margin and
For details, see “VII. Notes to performance deposit
Cash and
Security Items in the Consolidated Security deposited for handling
cash 28,791,288.82 28,791,288.82 156,055,620.73 156,055,620.73
deposit Financial Statements / 1. deposit international and
equivalents
Monetary Funds”. domestic letters of
credit
Fixed assets 189,752,483.28 189,752,483.28 Pledge Mortgage
Large plot of
Longterm Medical,
loan mortgage, daily
Intangible
24,467,616.10 24,467,616.10 Pledge production and
assets
operation needs,
supplementary
working capital
Buildings 7-9# of
Longterm Medical,
loan mortgage, daily
Investment
4,766,112.61 4,766,112.61 Pledge production and
real estates
operation needs,
supplementary
working capital
For details, please refer to Note
“XIII. Other Important Matters
(IV) Other Important Events
Other
that Affect Investors’ Decisions
non-current 20,228,190.61 20,228,190.61
2. Urban Renewal Project of
assets
Winner Industrial Park” Winner
Medical (Shenzhen) - Longhua
Industrial Park
Refer to note “VII. Notes to the
Other Pledged
consolidated financial
current 180,000,000.00 180,000,000.00 certificate
statements, item 13, Other
assets of deposit
current assets.”
Total 229,019,479.43 229,019,479.43 375,041,832.72 375,041,832.72
241
Winner Medical
Other description:
32. Short-term loans
(1) Classification of short-term loans
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Guaranteed borrowing 100,000.00 5,000,000.00
Debt of honor 233,000,000.00 100,000,000.00
Bill discount 1,060,000,000.00 1,130,050,000.00
Trade financing (Letter of Credit, etc.) 200,000,000.00 1,000,000,000.00
Mortgage + Guaranteed borrowing 60,000,000.00
Borrowing interest 138,955.00 168,930.85
Total 1,493,238,955.00 2,295,218,930.85
Description of classification of short-term loans:
Bill discount:
1. Winner Medical (Shenzhen) entered into a banker’s acceptance agreement with Shenzhen Longhua Sub-branch of Industrial
and Commercial Bank of China Limited from May to December 2023: 0400000014-2023 (Acceptance Agreement) No. 00241,
0400000014-2023 (Acceptance Agreement) No. 00242, 0400000014-2023 (Acceptance Agreement) No. 00243, No.
0400000014-2023 (Acceptance Agreement) 00244, 0400000014-2023 (Acceptance Agreement) 00245, 0400000014-2023
(Acceptance Agreement) 00246, 0400000014-2023 (Acceptance Agreement) 00333, 0400000014-2023 (Acceptance Agreement)
No. 00330, 0400000014-2023 (Acceptance Agreement) No. 00331, 0400000014-2023 (Acceptance Agreement) No. 00332,
0400000014-2023 (Acceptance Agreement) No. 00334, 0400000014-2023 (Acceptance Agreement) No. 00335,
0400000014-2023 (Acceptance Agreement) No. 00656, 0400000014-2023 (Acceptance Agreement) No. 00679,
0400000014-2023 (Acceptance Agreement) No. 00678, in the total amount of 670,000,000.00 yuan (six hundred and seventy
million yuan ), with interest rates of 1.15% to 1.85%. As of December 31, 2023, matured bills amounted to 400,000,000.00 yuan,
while the amount of undiscounted bills stood at yuan270,000,000.00 yuan. Additionally, acceptance agreement number
0400000014-2023 (Acceptance Agreement) No. 00656 involves a pledged deposit certificate of 80 million yuan, and the
guarantee contract number is 0400000014-2023 Longhua (Zhi) No. 0466.
2. Winner Medical (Shenzhen) entered into a banker’s acceptance agreement with Agricultural Bank of China, Shenzhen
Jinxiu Jiangnan Sub-branch, Contract No. 81180120230001117 and Contract No. 81180120230001129 totaling 200,000,000.00
(200 million yuan) in December 2023 at an interest rate of 1.20% to 1.22%. As of December 31, 2023, the amount of undue
discounted bills was 200,000,000.00 yuan.
3. In May and October 2023, Winner Medical (Shenzhen) entered into banker’s acceptance agreements with Bank of China
Limited, Shenzhen Longhua Sub-branch. These agreements, numbered 2023 Shenzhen Zhongyin Huachengxie Zi No. 0042-1 and
2023 Shenzhen Zhongyin Huachengxie Zi No. 0042-2, amounted to a total of 400 million yuan, at interest rates of 1.08% and
1.3%. As of December 31, 2023, the outstanding amount of discounted bills was 200,000,000.00 yuan.
242
4. In July and October 2023, Shenzhen Purcotton entered into banker’s acceptance agreements with ICBC Shenzhen Longhua
Sub-branch. These agreements were numbered Acceptance Agreement No. 0400000014-2023 (Acceptance Agreement) 00416,
Acceptance Agreement No. 0400000014-2023 (Acceptance Agreement) 00414, Acceptance Agreement No. 0400000014-2023
(Acceptance Agreement) 00415, and Acceptance Agreement No. 0400000014-2023 (Acceptance Agreement) 00657, totaling
190,000,000.00 yuan. The interest rates ranged from 1.25% to 1.42%. As of December 31, 2023, the outstanding amount of
discounted bills was 200,000,000.00 yuan. Acceptance Agreement No.: 0400000014-2023 (Acceptance Agreement) No. 00657
involves a pledged deposit certificate of 100 million yuan, with the pledge contract number being 0400000014-2023 Longhua
(Pledge) No. 0467.
Trade financing (Letter of Credit, etc.):
On January 10, 2023, Winner Medical (Shenzhen) opened Letter of Credit No. 744101KL23000006 with CITIC Bank Shenzhen
Branch for 200,000,000 yuan at an interest rate of 1.65%. The credit agreement, No. [2022 SZIBANK LONGHUA ZONGZHI
NO. 0024], had a credit limit of 500,000,000 yuan. The beneficiary is Winner Medical (Chongyang) Co., Ltd., with no collateral
guarantee. As of December 31, 2023, the letter of credit has been discounted but has not yet expired.
Credit loan:
1. On March 13, 2023, Winner Medical (Shenzhen) signed a working capital loan contract (No. 81010120230003946) with the
Shenzhen Longhua Sub-branch of Agricultural Bank of China Limited. This agreement is part of No. 4401400202200027 signed
between Steadfast Medical Supplies Company Limited and the Shenzhen Longhua Sub-branch. Under the Credit Line Agreement,
the loan amount is 200,000,000.00 yuan, with an interest rate of 2.5%. The borrowing period spans from March 13, 2023, to
March 12, 2024, and no collateral security is required. The loan has not been repaid as of Sunday, December 31, 2023.
2. Winner Guilin entered into a working capital loan contract with the Guilin Branch of Bank of Communications Co., Ltd. on
January 13, 2023. The loan contract, numbered [Z2212LN15663183], is between Winner Guilin Latex Co., Ltd. and Guilin
Branch of Bank of Communications Co., Ltd. It falls under the Credit Line Agreement No. Z2212IN1566318300001. The loan
amount is 33,000,000.00 yuan, with an interest rate of 0.86% (adjusted from the “Gui Hui Loan” fiscal subsidy loan interest rate
by 2.79 percentage points). The loan period spans from January 13, 2023, to January 11, 2024, and no relevant mortgage
guarantee is involved. The loan has not been repaid as of Sunday, December 31, 2023.
Guaranteed borrowing:
1. Longtai Medical entered into a working capital loan agreement with the Deqing Branch of Bank of China Co., Ltd. on
December 26, 2023. The contract is numbered [Deqing 2023 Renbori 295], with a loan amount of 100,000.00 yuan and a
borrowing interest rate of 3.3%. The loan period spans from December 26, 2023, to June 25, 2024, and no relevant mortgage
guarantee is involved. The loan has not been repaid as of Sunday, December 31, 2023.
(2) short-term loans unpaid overdue
The total amount of overdue short-term borrowings at the end of the period is 0.00 yuan, of which the important overdue
short-term borrowings are as follows:
Unit: yuan
Borrower Closing Balance Borrowing interest rate Overdue time Overdue interest rate
Other description:
243
Winner Medical
33. Tradable financial liabilities
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Including:
Including:
Other description:
34. Derivative financial liabilities
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Other description:
35. Notes payable
Unit: yuan
Type Closing Balance Balance at the beginning of the period
Banker’s acceptance bill 315,902,844.15 24,760,000.00
Total 315,902,844.15 24,760,000.00
The total amount of notes payable due and unpaid at the end of current period is 0.00 yuan.
36. Accounts payable
(1) Presentation of accounts payable
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Within 1 year (including 1 year) 1,088,985,790.28 1,094,753,592.92
1~2 years (including 2 years) 21,481,374.19 19,338,059.30
2~3 years (including 3 years) 1,568,734.69 2,914,279.27
More than 3 years 4,766,321.22 2,568,587.09
Total 1,116,802,220.38 1,119,574,518.58
244
(2) Important accounts payable with Overdue the aging more than 1 year
Unit: yuan
Item Closing Balance Reasons for failure of payment or carryover
Other description:
None
37. Other payables
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Other payables 591,310,917.61 570,843,242.88
Total 591,310,917.61 570,843,242.88
(1) Interest payable
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Important overdue and unpaid interest:
Unit: yuan
Borrower Overdue amount Overdue reason
Other description:
(2) Dividends payable
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Other explanations, including important dividends payable that have not been paid for more than 1 year, shall disclose the reasons
for non-payment:
245
Winner Medical
(3) Other payables
1) Other payables listed by nature
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Margin and deposit (1*) 281,427,299.00 170,299,618.40
Freight and other accrued expenses 186,895,812.59 222,336,599.71
Commission 58,667,353.50 58,911,887.83
VAT & Customs (2*) 12,701,935.49
Intercourse funds with the third parties 12,658,807.80 19,647,462.33
ESOP stock buyback requirement 10,857,500.00
Intercourse funds with related parties 5,395,945.27 83,907,582.49
Others 22,706,263.96 15,740,092.12
Total 591,310,917.61 570,843,242.88
2) Significant overdue accounts payable aged over 1 year or past due
Unit: yuan
Item Closing Balance Reasons for failure of payment or carryover
3) Top five miscellaneous accounts payable with closing balances, grouped by counterparty
Other description:
1*The year-on-year increase is primarily attributed to two key factors: Firstly, the Shenzhen Industrial Park project received a
substantial payment of 100 million yuan from Galaxy. Secondly, the surge in deposits is a result of the expansion of Purcotton
franchise stores.
2*The year-on-year increase is primarily attributed to changes in trading methods by certain foreign trade customers of Winner
Medical (Shenzhen).
38. Contract liabilities
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Customer consideration received 184,366,349.03 557,752,074.66
Member points 8,896,543.12 9,067,179.42
Total 193,262,892.15 566,819,254.08
246
Significant contractual obligations aged over 1 year
Unit: yuan
Item Closing Balance Reasons for failure of payment or carryover
Amount and reasons for significant changes in book value during the reporting period
Unit: yuan
Item Amount of change Reason for change
39. Payroll payable
(1) Presentation of payroll payable
Unit: yuan
Balance at the beginning Increase in current
Item Decrease in current period Closing Balance
of the period period
I. Short-term compensation 301,139,811.76 1,586,574,551.94 1,645,107,046.15 242,607,317.55
II. Welfare after dismission - defined
7,455,497.14 126,381,258.57 125,970,065.49 7,866,690.22
contribution plan
III. Dismission welfare 3,854,932.48 23,679,099.83 23,532,804.36 4,001,227.95
Total 312,450,241.38 1,736,634,910.34 1,794,609,916.00 254,475,235.72
(2) Presentation of short-term compensation
Unit: yuan
Balance at the beginning
Item Increase in current period Decrease in current period Closing Balance
of the period
1. Salary, bonus, allowance and
297,664,958.99 1,438,905,059.45 1,497,798,720.00 238,771,298.44
subsidy
2. Welfare expenses for employees 2,789,216.06 41,770,910.75 41,735,812.20 2,824,314.61
3. Social security 409,397.19 63,505,132.10 63,440,825.53 473,703.76
Including: medical insurance premium 232,375.41 56,051,358.70 56,022,955.70 260,778.41
Industrial injury insurance
124,437.99 4,501,318.91 4,465,378.05 160,378.85
premium
Birth insurance premium 52,583.79 2,952,454.49 2,952,491.78 52,546.50
4. Housing accumulation fund 3,943.00 39,134,046.66 39,113,891.66 24,098.00
5. Union dues and staff education fund 272,296.52 2,510,901.70 2,469,295.48 313,902.74
7. Short-term profit sharing plan 748,501.28 548,501.28 200,000.00
Total 301,139,811.76 1,586,574,551.94 1,645,107,046.15 242,607,317.55
247
Winner Medical
(3) Presentation of defined contribution plans
Unit: yuan
Balance at the beginning of
Item Increase in current period Decrease in current period Closing Balance
the period
1. Basic endowment
7,350,564.34 122,281,431.66 121,887,250.46 7,744,745.54
insurance
2. Unemployment insurance
104,932.80 4,099,826.91 4,082,815.03 121,944.68
premium
Total 7,455,497.14 126,381,258.57 125,970,065.49 7,866,690.22
Other description:
40. Taxes payable
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Added value tax 8,974,689.54 96,897,978.48
Corporate income tax 40,190,413.70 197,571,709.68
Individual income tax 3,866,181.55 4,579,372.68
Urban maintenance and construction tax 946,970.72 8,167,572.37
Housing property tax 6,172,395.17 5,597,557.89
Education surcharge and local education surcharge 837,582.92 6,150,636.51
Land use tax 1,057,104.57 1,153,638.19
Others 42,498.42 35,809.57
Stamp duty 789,943.27 2,101,599.24
Total 62,877,779.86 322,255,874.61
Other description:
41. Liabilities held for sales
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Other description:
248
42. Non-current liabilities due within one year
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Long-term borrowing due within one year 20,138,900.00 8,011,977.78
Lease liabilities due within one year 202,660,926.45 207,314,911.54
Long-term payroll payable due within one year 627,000.00 620,000.00
Total 223,426,826.45 215,946,889.32
Other description:
43. Other current liabilities
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Refund payable 1,950,288.26 3,963,108.90
Output tax to be transferred 17,762,039.93 55,641,482.95
Total 19,712,328.19 59,604,591.85
Increase/decrease of short-term bonds payable:
Unit: yuan
Balance Amortizati
at the Accrued on of Current
Name of Book Coupon Maturity Issue Current Closing Default or
Issue date beginning interest at premium repayme
bond value rate of bond amount issue Balance not
of the book value and nt
period discount
Total
Other description:
44. Long-term loans
(1) Classification of long-term borrowing
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Debt of honor 170,000,000.00
Total 170,000,000.00
249
Winner Medical
Description of classification of long-term borrowing:
On March 27, 2023, Winner Medical (shenzhen) entered a working capital loan agreement with the Shenzhen Longhua Branch of
Bank of China Co., Ltd. The long-term loan, identified by contract number 2023 Zhongyin Huachang Borrower No. 0043,
amounted to 200,000,000.00 yuan, with a maturity date set for March 27, 2025. Initially, the loan carried a floating interest rate.
By December 31, 2023, the outstanding principal of the loan stood at 190,000,000.00 yuan, with amounts due within one year
reclassified as non-current liabilities.
Other descriptions, including interest rate range:
45. Bonds payable
(1) Bonds payable
Unit: yuan
Item Closing Balance Balance at the beginning of the period
(2) Increase and decrease of bonds payable (excluding preferred shares, perpetual bonds and other financial instruments
classified as financial liabilities)
Unit: yuan
Balance Amortizati
at the Accrued on of Current
Name of Book Coupon Maturity Issue Current Closing Default or
Issue date beginning interest at premium repayme
bond value rate of bond amount issue Balance not
of the book value and nt
period discount
Total -- --
(3) Description of convertible bonds
(4) Description of other financial instruments classified as financial liabilities
Basic information of the outstanding preferred shares, perpetual bonds and other financial instruments at the end of the period
Table of changes in outstanding financial instruments, such as preferred shares, perpetual bonds at the end of the period
Unit: yuan
Outstanding The beginning of the period Increase in current period Decrease in current period The end of the period
financial
instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value
Description of the basis for the classification of other financial instruments into financial liabilities
Other description:
250
46. Lease liabilities
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Lease payments 332,663,417.84 365,030,013.20
Unrecognized financing expenses -40,653,913.80 -38,570,315.30
Total 292,009,504.04 326,459,697.90
Other description:
47. Long-term payable
Unit: yuan
Item Closing Balance Balance at the beginning of the period
(1) Long-term payables listed by nature
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Other description:
(2) Special accounts payable
Balance at the beginning of Increase in current Decrease in current
Item Closing Balance Causes
the period period period
Other description:
48. Long-term payroll payable
(1) Table of long-term payroll payable
Unit: yuan
Item Closing Balance Balance at the beginning of the period
I. Welfare after dismission - net liabilities of defined benefit
9,138,000.00 9,199,637.94
plan
Long-term payroll payable due within one year -627,000.00 -620,000.00
Total 8,511,000.00 8,579,637.94
251
Winner Medical
(2) Changes in defined benefit plan
Present value of defined benefit plan obligations:
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
I. Balance at the beginning of the period 9,199,637.94 9,982,066.32
II. Defined benefit expenses recognized in the income statement for
335,000.00 433,000.00
the period
1. Current service cost 16,000.00 42,000.00
2. Past service cost 52,000.00 102,000.00
4. Net interest 267,000.00 289,000.00
III. Cost of defined benefit plans included in other comprehensive
225,081.26 -601,000.00
income
1. Actuarial gain (loss) 225,081.26 -601,000.00
IV. Other changes -621,719.20 -614,428.38
2. Benefits paid -621,719.20 -614,428.38
V. Closing Balance 9,138,000.00 9,199,637.94
Planned assets:
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Net liabilities (net assets) of defined benefit plan
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Description of the content of defined benefit plan and its related risks, impact on the Company’s future cash flow, time and
uncertainty:
Per Accounting Standards for Business Enterprises No. 9 - Employee Compensation and the Company’s accounting policies,
welfare payments made over the years to retired employees, survivors, and those remaining from previous Company restructuring
must undergo actuarial calculation for inclusion as long-term employee remuneration payable. Welfare expenses for retired
employees and survivors undergo actuarial assessment as post-employment benefit plans, while defined benefit plans cover
continuing salary and benefit expenses for retired employees, subject to actuarial evaluation as termination benefit plans.
Actuarial evaluation of a Company’s employee benefit plans entails certain risks, including:
Interest Rate Risk: The discount rate utilized to calculate the present value of the plan’s benefit obligations is derived from the
yield on Chinese government bonds. Falling Treasury yields result in actuarial losses.
Welfare Level Growth Risk: The selection of welfare growth rate assumptions for calculating the present value of plan welfare
obligations relies on historical growth levels of various benefits and the long-term growth rate expectations set by the Company’s
management. An actuarial loss will arise if the actual welfare growth rate exceeds the actuarial assumption.
252
Description of significant actuarial assumptions and sensitivity analysis results of defined benefit plan:
Item December 31, 2023
Annual discount rates for post-retirement benefit plans
2.75%
for different personnel categories
China’s life insurance industry experience life table (2010-2013) for elderly care business,
Mortality rate
segmented into Men’s and Women’s tables.
The discount rate is established using the government bond yield as the benchmark. During evaluation, the cash flow anticipated
from the welfare plan in the future year is initially estimated. Subsequently, the modified duration of the welfare liability at the
evaluation time is calculated based on this cash flow. Finally, the applicable discount rate is determined by referencing the
Treasury bond yield corresponding to that period.
Other description:
49. Estimated liabilities
Unit: yuan
Balance at the beginning of
Item Closing Balance Causes
the period
Other descriptions, including relevant important assumptions and estimation descriptions of important estimated liabilities:
50. Deferred income
Unit: yuan
Balance at the Increase in current Decrease in current
Item Closing Balance Causes
beginning of the period period period
Government Government subsidies related to
98,791,412.91 48,677,287.37 25,819,335.31 121,649,364.97
subsidies assets
Total 98,791,412.91 48,677,287.37 25,819,335.31 121,649,364.97
Other description:
51. Other non-current liabilities
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Other description:
253
Winner Medical
52. Capital stock
Unit: yuan
Increase/decrease (+, -)
Balance at the beginning Share
New issue of Share capital increase Closing Balance
of the period donatio Others Subtotal
shares from reserved funds
n
Total amount of
426,492,308.00 167,895,059.00 167,895,059.00 594,387,367.00
shares
Other description:
53. Other equity instruments
(1) Basic information of the outstanding preferred shares, perpetual bonds and other financial instruments at the end of the
period
(2) Table of changes in outstanding financial instruments, such as preferred shares, perpetual bonds at the end of the period
Unit: yuan
Outstanding The beginning of the period Increase in current period Decrease in current period The end of the period
financial
instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value
The increase and decrease of other equity instruments in current period, the reasons for the change, and the basis of relevant
accounting treatment:
Other description:
54. Capital reserve
Unit: yuan
Balance at the beginning of the
Item Increase in current period Decrease in current period Closing Balance
period
Capital premium (capital stock
4,457,762,555.30 194,425,350.26 4,263,337,205.04
premium)
Other capital surplus 88,485,055.94 29,304,226.31 117,789,282.25
Total 4,546,247,611.24 29,304,226.31 194,425,350.26 4,381,126,487.29
Other description, including current increase/decrease and change reasons:
1. The decrease in capital premium (equity premium) during the period is primarily due to:
(1) As per the equity distribution plan approved at the 2022 Annual General Meeting of Shareholders, the Company distributed
stock dividends to all shareholders, converting 4 shares into capital for every 10 shares. Consequently, the capital premium
(equity premium) decreased by 167,895,059.00 yuan during this period.
(2) Additionally, the Company implemented an employee stock ownership plan, adjusting the treasury shares to match the
repurchase obligation, totaling 26,530,291.26 yuan.
2. The increase in other capital surplus during the period was primarily due to:
(1) The Company recognized incentive expenses totaling 3,151,091.47 yuan for the implementation of restricted stock
incentives in 2020 and the employee stock ownership plan in 2023.
(2) Additionally, Winner Guilin introduced minority shareholders via its capital increase, resulting in passive dilution of the
Company’s equity without loss of control. Other capital reserves amounting to 26,153,134.84 yuan were confirmed.
254
55. Treasury stock
Unit: yuan
Increase in current
Item Balance at the beginning of the period Decrease in current period Closing Balance
period
Treasury stock 500,082,734.11 26,530,291.26 473,552,442.85
Total 500,082,734.11 26,530,291.26 473,552,442.85
Other description, including current increase/decrease and change reasons:
Decrease in current period 10 Additionally, the Company implemented an employee stock ownership plan, adjusting the treasury
shares to match the repurchase obligation, totaling 26,530,291.26 yuan.
56. Other comprehensive income
Unit: yuan
Amount incurred in current period
Less: amount Less: amount
included in other included in other
comprehensive comprehensive Attributable to Attributable to
Item Balance at Amount before Less:
income in income in the parent minority Closing
the beginning current income Income tax
previous period previous period company after shareholders Balance
of the period tax expenses
transferred into transferred into tax after tax
profit and loss in retained income in
current period current period
I. Other comprehensive
income that can’t be 601,000.00 -225,081.26 -206,495.39 -18,585.87 394,504.61
reclassified into profit and loss
Including: Changes arising
from re-measurement for 601,000.00 -225,081.26 -206,495.39 -18,585.87 394,504.61
defined benefit plans
II. Other comprehensive
income that will be reclassified 181,778.15 2,848,822.37 1,639,086.68 1,209,735.69 1,820,864.83
into profit and loss
Balance arising from the
translation of foreign currency 181,778.15 2,848,822.37 1,639,086.68 1,209,735.69 1,820,864.83
financial statements
Total other comprehensive
782,778.15 2,623,741.11 1,432,591.29 1,191,149.82 2,215,369.44
income
Other explanations, including the adjustment of the effective part of the cash flow hedging gains and losses transferred to the
initial recognized amount of the hedged item:
57. Special reserve
Unit: yuan
Balance at the beginning of the
Item Increase in current period Decrease in current period Closing Balance
period
Other description, including current increase/decrease and change reasons:
255
Winner Medical
58. Surplus reserve
Unit: yuan
Balance at the beginning of the
Item Increase in current period Decrease in current period Closing Balance
period
Statutory surplus reserves 420,212,778.13 420,212,778.13
Total 420,212,778.13 420,212,778.13
Description of surplus reserves, including current increase/decrease and change reasons:
59. Undistributed profit
Unit: yuan
Item Current period Prior period
Undistributed profit at the end of previous period before adjustment 6,810,953,829.30 5,538,135,285.97
Total undistributed profits at the beginning of the adjustment period (+
14,979,240.42 14,844,385.21
for increase and - for decrease)
Undistributed profits at the beginning of the period after adjustment 6,825,933,069.72 5,552,979,671.18
Plus: Net profits attributable to the owners of parent company in the
580,403,232.37 1,650,717,282.64
current period
Common stock dividends payable 797,501,533.10 377,763,884.10
Undistributed profits at the end of the period 6,608,834,768.99 6,825,933,069.72
Details of undistributed profits at the beginning of the adjustment period:
1). Due to retroactive adjustment of Accounting Standards for Business Enterprises and relevant new regulations, 0.00 yuan of
the undistributed profit at the beginning of the period was affected.
2). Due to the change of accounting policy, 14,979,240.42 yuan of the undistributed profit at the beginning of the period was
affected.
3). Due to the correction of major accounting errors, 0.00 yuan of the undistributed profit at the beginning of the period was
affected.
4). Due to the change of consolidation scope caused by the same control, 0.00 yuan of the undistributed profit at the beginning
of the period was affected.
5). 0.00 yuan of the undistributed profit at the beginning of the period was affected by the total amount of other adjustments
60. Revenue and cost
Unit: yuan
Amount incurred in current period Amount incurred in previous period
Item
Income Cost Income Cost
Main business 8,124,324,653.18 4,139,502,655.31 11,257,751,810.00 5,910,146,579.23
Other businesses 60,697,404.02 35,094,632.43 93,579,735.08 62,654,238.06
Total 8,185,022,057.20 4,174,597,287.74 11,351,331,545.08 5,972,800,817.29
256
Whether the net profit deducting non-recurring profit and loss after audit is negative
□Yes √ No
Breakdown of operating revenues and operating costs:
Unit: yuan
Segment 1 Segment 2 Medical consumables Healthy consumer goods Total
Contract
classification Operatin Operatin
Revenue Revenue Revenue Operating costs Revenue Operating costs Revenue Operating costs
g costs g costs
3,922,443,620.5 2,335,514,563.0 4,262,578,436. 8,185,022,057.2 4,174,597,287.
Business type 1,839,082,724.68
9 6 61 0 74
Including:
3,861,746,216.5 2,300,419,930.6 4,262,578,436. 8,124,324,653.1 4,139,502,655.
Main business 1,839,082,724.68
7 3 61 8 31
Other businesses 60,697,404.02 35,094,632.43 60,697,404.02 35,094,632.43
Classified by 3,922,443,620.5 2,335,514,563.0 4,262,578,436. 8,185,022,057.2 4,174,597,287.
1,839,082,724.68
operating area 9 6 61 0 74
Including:
2,378,523,424.2 1,450,848,491.3 4,262,578,436. 6,641,101,860.8 3,289,931,216.
Domestic sales 1,839,082,724.68
2 6 61 3 04
1,543,920,196.3 1,543,920,196.3
Overseas sales 884,666,071.70 884,666,071.70
7 7
Type of markets or
clients
Including:
Type of contracts
Including:
Sorted by time of
goods transfer
Including:
Sorted by contract
duration
Including:
Sorted by sales
channels
Including:
Total
Information related to performance obligations:
Is he the
Time to fulfill The nature of the Amounts borne by the Types of quality assurance
Important main
Item performance goods the Company Company that are expected provided by the Company and
payment terms responsible
obligations promises to transfer to be refunded to customers related obligations
person?
Other description
Information related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations signed but not yet performed or completed at the end of this
reporting period is 0.00 yuan, of which 0.00 yuan is expected to be recognized as revenue in year 0, 0.00 yuan is expected to be
recognized as revenue in year 0, and 0.00 yuan is expected to be recognized as revenue in year 0.
257
Winner Medical
Information related to variable consideration in the contract:
Major contract changes or major transaction price adjustments
Unit: yuan
Item Accounting treatment methods Amount of impact on revenue
Other description:
61. Taxes and surcharges
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Urban maintenance and construction tax 23,828,308.48 43,075,435.03
Education surcharge 11,109,423.30 19,248,049.13
Housing property tax 13,826,245.30 10,547,488.67
Land use tax 5,164,407.85 4,462,427.50
Stamp duty 5,292,583.81 7,410,934.06
Surcharge for local education 6,894,324.42 12,835,042.86
Others 298,177.71 507,863.07
Total 66,413,470.87 98,087,240.32
Other description:
62. Administrative expenses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Employee compensation 343,893,839.96 356,528,450.43
Depreciation and amortization charge 126,637,904.03 93,586,310.72
Scrap loss on inventory and material consumption
59,888,593.56 2,451,385.18
(*1)
Travel expenses 6,775,498.55 4,737,997.83
Office allowance 6,399,725.18 3,066,482.44
Consultant and intermediary service fees 31,915,068.83 27,481,281.65
Water/electricity fee 12,013,901.42 11,445,522.43
Information system cost 18,991,236.76 39,836,787.42
Maintenance cost 28,116,320.44 35,254,976.30
Depreciation of Right-of-use assets 24,199,602.13 22,168,279.11
Others 34,815,930.56 37,057,161.44
Total 693,647,621.42 633,614,634.95
258
Other description:
*1 The notable year-on-year increase was primarily attributed to heightened losses stemming from the relocation of Shenzhen
Longhua Industrial Park and the disposal of inventory for infection protection products.
63. Selling expenses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Advertising and promotion expenses 651,816,390.71 600,156,113.14
Employee compensation 643,446,712.68 649,605,092.33
Sales commissions and expenses from the
261,088,807.68 240,516,336.22
e-commerce platform
Depreciation of Right-of-use assets 196,694,977.33 188,658,565.69
Lease and property management expenses 118,909,705.83 152,186,000.56
Depreciation and amortization 54,120,612.33 82,408,480.44
Travel expenses 24,738,868.66 12,266,843.44
Material consumption 23,880,919.78 29,027,854.76
Office communication costs 15,318,336.04 17,665,180.74
Water/electricity fee 12,448,568.50 12,817,521.54
Insurance premiums 7,355,088.51 5,076,079.44
Service fees 17,439,391.54 7,485,101.27
Others 63,234,126.51 52,307,237.89
Total 2,090,492,506.10 2,050,176,407.46
Other description:
64. R&D expenses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Employee compensation 156,098,327.58 164,802,423.37
Depreciation and amortization 20,944,780.06 20,937,418.03
Material 83,875,970.91 232,395,899.93
Other miscellaneous expenses 61,132,789.88 69,447,910.78
Total 322,051,868.43 487,583,652.11
Other description:
259
Winner Medical
65. Financial expenses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Interest expenses 63,441,562.69 50,043,346.95
Including: Interest expense on lease liabilities 28,614,724.12 26,647,978.76
Less: Interest revenue 133,913,862.72 123,909,561.75
Financial discount interest
Exchange gain or loss 7,627,126.27 -52,070,721.48
Bank handling charge and others 986,213.83 3,362,364.21
Total -61,858,959.93 -122,574,572.07
Other description:
66. Other incomes
Unit: yuan
Other sources of income Amount incurred in current period Amount incurred in previous period
Government subsidies 80,639,097.23 76,662,122.86
Tax credits and deductions 20,466,177.38 7,711,139.48
Total 101,105,274.61 84,373,262.34
67. Net exposure hedging
Unit: yuan
Other sources of income Amount incurred in current period Amount incurred in previous period
Other description:
68. Income from changes in fair value
Unit: yuan
Sources of gains from fair value change Amount incurred in current period Amount incurred in previous period
Bank financial products and trust products 46,678,103.27 32,148,876.44
Total 46,678,103.27 32,148,876.44
Other description:
69. Investment income
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
260
Long-term equity investment gains measured by
1,581,608.21 4,697,834.75
employing the equity method
Investment income from purchasing financial
30,114,666.09
products
Income from the redemption of trading financial
125,761,272.77 16,658,266.32
assets
Total 127,342,880.98 51,470,767.16
Other description:
70. Credit impairment Loss
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Loss on bad debts of accounts receivable 3,056,164.34 4,946,266.03
Loss on bad debts of other receivables 1,669,344.96 -68,889,588.55
Total 4,725,509.30 -63,943,322.52
Other description:
71. Assets impairment losses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
I. Inventory falling price loss and impairment
-190,214,320.23 -331,806,543.64
loss of contract performance costs
IV. Impairment loss of fixed assets -1,470,305.23 -19,343,113.09
VI. Impairment loss of construction in progress -10,205,833.26 -10,865,480.00
X. Goodwill impairment loss -188,787,147.21
XII. Others -3,084,448.94 -854,203.50
Total -393,762,054.87 -362,869,340.23
Other description:
The others are impairment losses on prepaid accounts
261
Winner Medical
72. Gains from asset disposal
Unit: yuan
Source of income from disposal of assets Amount incurred in current period Amount incurred in previous period
Gains from disposal of non-current assets 18,934,269.72 4,466,739.85
Including: Gains on disposal of fixed assets 10,540.42 150,442.48
Gains from disposal of right-of-use assets 18,923,729.30 4,316,297.37
Loss on disposal of non-current assets -1,232,319.71 -740,535.48
Including: Loss on disposal of fixed assets -1,232,319.71 -740,535.48
Others (1*) 14,500,000.00
Total 32,201,950.01 3,726,204.37
Note: 1* This is because the infection protection products and equipment are scrapped, leading to the one-time transfer of deferred income that has not yet
been amortized to asset disposal income.
73. Non-operating income
Unit: yuan
Amount incurred in Amounts recorded in the non-recurring
Item Amount incurred in current period
previous period gains and losses of the current period
Government subsidies 171,825.26 485,841.01 171,825.26
Non-current assets scrap gains 2,458,639.59 1,104,717.15 2,458,639.59
Income from compensation or fines 7,273,705.13 2,923,432.97 7,273,705.13
Others 6,714,326.50 6,055,568.25 6,714,326.50
Total 16,618,496.48 10,569,559.38 16,618,496.48
Other description:
74. Non-operating expenses
Unit: yuan
Amount incurred in Amounts recorded in the non-recurring
Item Amount incurred in current period
previous period gains and losses of the current period
External donations 2,088,058.84 2,698,153.48 2,088,058.84
Loss on damage and scrap of
81,125,472.09 44,824,142.16 81,125,472.09
non-current assets
Overdue fines 429,933.94 5,587,691.07 429,933.94
Liquidated damages 95,536.17 11,433,314.10 95,536.17
Others 1,003,147.30 3,069,974.82 1,003,147.30
Total 84,742,148.34 67,613,275.63 84,742,148.34
Other description:
262
75. Income tax expenses
(1) Income tax expense table
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Current income tax expenses 97,007,712.22 318,328,487.05
Deferred income tax expenses 27,814,952.80 -72,656,057.90
Adjustment of the previous annual income tax
-3,521,577.45 -503,799.50
amount in the current period
Total 121,301,087.57 245,168,629.65
(2) Accounting profit and income tax expense adjustment process
Unit: yuan
Item Amount incurred in current period
Total profit 749,846,274.01
Income tax expenses calculated at the appropriate/applicable tax rate 112,476,941.10
Impact of different tax rates applied on subsidiaries 21,013,929.84
Impact of income tax before adjustment -3,521,577.45
The effect of non-taxable income -569,116.82
Impact of non-deductible costs, expenses and losses 28,495,686.47
Impact of deductible losses on unrecognized deferred income tax assets in the prior period -3,454,470.23
Impact of temporary difference or deductible losses on unrecognized deferred income tax assets in the current
1,130,247.95
period
Impact of weighted deduction of R&D costs -34,270,553.29
Income tax expenses 121,301,087.57
Other description:
76. Other comprehensive income
See Note 57 for details.
263
Winner Medical
77. Cash flow statement items
(1) Cash related to operating activities
Other cash received related to operating activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Deposit, margin and quality guarantee deposit
18,253,683.99 20,839,933.57
received
Interest income received 34,146,193.53 29,396,223.39
Government subsidies received 107,118,837.18 74,022,751.98
Others 17,540,685.83 91,653,856.59
Total 177,059,400.53 215,912,765.53
Explanation on other cash received related to operating activities:
Other cash paid related to operating activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Management and development costs paid in cash 168,245,402.79 214,977,555.82
Selling expenses paid in cash 239,409,655.00 239,471,468.15
Deposit, margin and quality guarantee deposit paid 8,959,379.78 8,316,592.48
Bank handling charge 1,921,639.86 3,348,042.45
Others 21,519,247.07 136,138,509.24
Total 440,055,324.50 602,252,168.14
Description of other cash paid related to operating activities
(2) Cash related to investing activities
Other cash received related to investment activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Significant cash received related to investing activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
264
Description of other cash received related to investment activities:
Other cash paid related to investment activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Significant cash paid for investing activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Description of other cash paid related to investment activities:
(3) Cash related to financing activities
Other cash received related to financing activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Security deposit recovered 139,500,000.00
Employee stock ownership plan 10,857,500.00
Total 150,357,500.00
Description of other cash received related to financing activities:
Other cash paid related to financing activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Principal and interest paid on lease liabilities 280,704,130.49 246,700,957.46
Treasury stock repurchase paid 242,090,367.43
Deposit paid on bills and letters of credit (for
183,507,300.00 119,430,633.87
financing purposes)
Total 464,211,430.49 608,221,958.76
Description of other cash paid related to financing activities:
Changes in various liabilities arising from financing activities
□ Applicable √ Not applicable
(4) Instructions for presenting cash flows on a net basis
Item Relevant facts Basis for net presentation Financial impact
265
Winner Medical
(5) Significant activities and financial impacts that do not involve current cash receipts and payments but affect the Company’s
financial status or may affect the Company’s cash flow in the future
78. Supplementary information to the statement of cash flows
(1) Supplementary Information to the Statement of Cash Flows
Unit: yuan
Further information Current amount Last term amount
1. Reconciliation of net profits to cash flows from operating activities:
Net profit 628,545,186.44 1,674,337,466.68
Plus: Provision for impairment of assets 389,036,545.57 426,812,662.75
Depreciation of fixed assets, oil and gas assets and productive biological
241,876,332.05 210,820,306.94
assets
Depreciation of Right-of-use assets 224,710,757.36 215,248,882.88
Amortization of intangible assets 73,803,773.72 55,669,156.15
Amortization of long-term deferred expenses 54,638,701.93 73,413,333.87
Losses on disposal of fixed assets, intangible assets and other long-term
-32,201,950.01 -3,726,204.37
assets (gains expressed with “-”)
Loss on retirement of fixed assets (gains expressed with “-”) 78,666,832.50 43,719,425.01
Loss from fair value change (gains expressed with “-”) -46,678,103.27 -32,148,876.44
Financial expenses (gains expressed with “-”) -35,603,859.98 -43,801,146.50
Investment losses (gains expressed with “-”) -127,342,880.98 -51,470,767.16
Decreased in deferred income tax assets (increase expressed with “-”) 36,620,728.88 -74,410,284.04
Increase in deferred income tax liabilities (decrease expressed with “-”) -8,805,924.74 1,754,226.14
Decrease in inventories (increase expressed with “-”) -53,103,044.13 -73,528,720.88
Decrease in operating receivables (increase expressed with “-”) 182,401,595.94 42,540,286.26
Increase in operating payables (decrease expressed with “-”) -578,417,187.65 526,247,452.59
Others 35,178,728.60 -8,004,969.61
Net cash flow from operating activities 1,063,326,232.23 2,983,472,230.27
2. Significant investment and financing activities not involving cash deposit
and withdrawal
Conversion of debt into capital
Convertible bonds due within 1 year
Fixed assets under financing lease
3. Net changes in cash and cash equivalents:
Ending balance of cash 4,677,340,782.45 4,370,821,958.17
Less: Beginning balance of cash 4,370,821,958.17 4,088,612,262.04
Plus: Ending balance of cash equivalents
Less: Ending balance of cash equivalents
Net increase in cash and cash equivalents 306,518,824.28 282,209,696.13
266
(2) Net cash paid for obtaining subsidiaries in current period
Unit: yuan
Amount
Cash or cash equivalents paid in the current period for business combinations occurred in current period 77,260,000.00
Including:
Shanghai Hongsong 30,000,000.00
Winner Jinzhou 47,260,000.00
Less: Cash and cash equivalents held by the Company on the acquisition date 8,993,403.54
Including:
Shanghai Hongsong 8,823,863.68
Winner Jinzhou 169,539.86
Plus: Cash or cash equivalents paid in the current period for business combinations that occurred in previous periods 78,812,000.00
Including:
Junjian Medical 78,812,000.00
Net cash paid for obtaining subsidiaries 147,078,596.46
Other description:
(3) Net cash from disposal of subsidiaries in current period
Unit: yuan
Amount
Including:
Including:
Including:
Other description:
267
Winner Medical
(4) Composition of cash and cash equivalents
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
I. Cash 4,677,340,782.45 4,370,821,958.17
Including: cash on hand 76,471.98 246,825.76
Bank deposit readily available for payment 4,676,600,881.85 4,169,305,311.38
Other monetary capital readily available for payment 663,428.62 201,269,821.03
III. Balance of cash and cash equivalents at end of period 4,677,340,782.45 4,370,821,958.17
(5) The scope of use is limited but it is still classified as cash and cash equivalents
Unit: yuan
Reasons for retaining cash and cash
Item Current amount Last term amount
equivalents
(6) Monetary funds that are not classified as cash and cash equivalents
Unit: yuan
Reasons for not qualifying as cash and cash
Item Current amount Last term amount
equivalents
Other description:
(7) Description of other significant activities
79. Notes to items in statement of owner’s equity
State the name of “other” items and the amount of adjustment to the ending balance of previous year:
N/A
268
80. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: yuan
Ending balance in foreign
Item Conversion exchange rate Ending balance converted to RMB
currency
Cash and cash equivalents 435,196,098.42
Including: USD 57,390,116.35 7.0827 406,476,977.07
EUR 643,144.41 7.8592 5,054,600.55
HKD 22,971,973.80 0.9062 20,817,202.66
Mexican peso 54,990,865.00 0.0502 2,760,541.42
Ringgit 56,293.69 1.5415 86,776.72
Accounts receivable 169,560,564.27
Including: USD 21,558,056.44 7.0827 152,689,246.35
EUR 598,202.04 7.8592 4,701,389.47
HKD 11,749,192.84 0.9062 10,647,118.55
Mexican peso 60,061.96 0.0502 3,015.11
Ringgit 985,919.42 1.5415 1,519,794.79
Long-term loans
Including: USD
EUR
HKD
Other receivables 604,520.58
Including: HKD 667,094.00 0.9062 604,520.58
Accounts payable 3,910.09
Mexican peso 77,890.25 0.0502 3,910.09
Other payables 1,119,958.02
Including: HKD 845,102.79 0.9062 765,832.15
Ringgit 229,728.10 1.5415 354,125.87
Other description:
(2) Description of overseas operating entities, including for important overseas operating entities, the main overseas business
place, recording currency and selection basis shall be disclosed, and the reasons for changes in recording currency shall also be
disclosed.
□ Applicable √ Not applicable
269
Winner Medical
81. Leased
(1) The Company as the lessee:
√Applicable □ Not applicable
Variable lease payments that are not included in the measurement of the lease liabilities
√Applicable □ Not applicable
Item Current amount
Interest expense of lease liabilities 28,614,724.12
Simplified treatment of short-term lease expenses included in the cost of related assets or current profits and losses 687,850.31
The simplified treatment of low-value asset lease expenses included in the relevant asset cost or current profit and loss
(except for short-term lease expenses of low-value assets)
Variable lease payments excluded from the lease liability measurement, included in the cost of the related asset, or in the
20,627,211.88
current period’s profit or loss
Portion stemming from sale and leaseback transactions
Income from subleasing right-to-use assets 908,441.15
Total cash outflow related to leases 302,019,192.68
Related gains and losses from sale and leaseback transactions
Cash inflow and from sale and leaseback transactions
Cash outflow from sale and leaseback transactions
Lease costs for short-term leases or low-value assets with simplified treatment
√Applicable □ Not applicable
See the figure above
Involvement in sale and leaseback transactions
None
(2) The Company’s role as lessor
Operating leases as lessor
√Applicable □ Not applicable
Unit: yuan
Including: Income related to variable lease payments not accounted for in lease
Item Lease income
receipts
Operating lease commitment 430,764.22
Total 430,764.22
270
Financial leases provided by the lessor
□ Applicable √ Not applicable
Undiscounted lease payments for each of the next five years
√Applicable □ Not applicable
Unit: yuan
Annual lease receipts before discounting
Item
Closing balance Beginning amount
First year 132,000.00 219,483.67
Second year 95,238.10
Reconciliation of undiscounted lease receipts and net lease investment
(3) Recognizing financial lease sales profits and losses as a manufacturer or distributor
□ Applicable √ Not applicable
82. Others
VIII. Research and development expenditure
Unit: yuan
Amount incurred in previous
Item Amount incurred in current period
period
1. Research and development projects eligible for capitalization
Unit: yuan
Balance at the Amount increased in current period Amount decreased in current period
Item beginning of the Internal development Recognized as intangible Transfer to current Closing Balance
period Others
expenditure assets profit and loss
Total
Significant capitalized R&D projects
How economic benefits
Estimated completion The point at which Specific criteria for
Item R&D progress are expected to be
time capitalization begins initiating capitalization
generated
271
Winner Medical
Provision for impairment of development expenses
Unit: yuan
Balance at the beginning of Increase in current Decrease in current
Item Closing Balance Impairment testing
the period period period
2. Important outsourced research projects
The manner in which economic benefits are Judgment standards and specific basis for
Project name
expected to be generated capitalization or expense
Other description:
IX. Consolidation scope changes
1. Business combination not under common control
(1) Business combination not under common control occurred in current period
Unit: yuan
Cash flows of the
Basis for Income of the Net profit of the
Method of acquired entity
Time of Equity determinatio acquiree from the acquiree from the
Cost of equity equity Acquisition from the
Name of the acquiree equity acquisition n of acquisition date to acquisition date to
acquisition acquisitio date acquisition date
acquisition ratio acquisition the end of the the end of the
n to the end of the
date period period
period
Shanghai Hongsong Share
April 30, April 30, Acquisition
Medical Device Co., 30,000,000.00 60.00% acquisitio 29,533,043.04 7,910,958.99 -218,570.29
2023 2023 of control
Ltd. n
Winner (Jinzhou) Share
2023 Acquisition
Latex Products Co., 103,000,000.00 100.00% acquisitio July 1, 2023 1,825,402.15 -10,961,860.92 1,197,505.80
July 1st of control
Ltd. n
Other description:
[Note 1] On October 9, 2022, the Company and the individual shareholders, Zhang Yuqing and Cao Wensong, entered into an
Agreement on Equity Transfer of Shanghai Hongsong Medical Devices Co., Ltd. The Company acquired a 60.00% equity interest
in Shanghai Hongsong from the aforementioned individuals for a consideration of 30 million yuan. Shanghai Hongsong finalized
the registration procedures for industrial and commercial changes on April 28, 2023. The directors appointed by the Company
now constitute the majority of the new board of directors. For accounting purposes, April 30, 2023, was designated as the
acquisition date, and Shanghai Hongsong has been consolidated into the financial statements from April 30, 2023, onward.
[Note 2] Subsidiary Winner Guilin signed the Equity Transfer Agreement and its supplementary agreement with Jiangsu Youjia
Gloves Co., Ltd., Yuyao Wenna Machinery Industry and Trade Co., Ltd., and Guilin Golden Eagle Latex Technology Co., Ltd. on
May 24, 2023. Winner Guilin acquired 100.00% of the equity of Winner Guilin held by the above shareholders for 103 million
yuan. Winner Jinzhou has completed the business change registration procedures on July 11, 2023. The Company has appointed a
majority of directors to the new board of directors. For accounting purposes, July 1, 2023, was established as the acquisition date,
and it has been included in the scope of the consolidated financial statements starting from July 1, 2023.
272
(2) Combination cost and goodwill
Unit: yuan
Combination cost Shanghai Hongsong Medical Device Winner (Jinzhou) Latex Products Co., Ltd.
Co., Ltd.
- Cash 30,000,000.00 47,260,000.00
- Fair value of non-cash assets 55,740,000.00
- Fair value of debt issued or assumed
Fair value of equity securities issued
Fair value of contingent consideration
Fair value of the equity held prior to the purchase date on the purchase date
- Others
Total combination cost 30,000,000.00 103,000,000.00
Less: the share of the fair value of identifiable net assets acquired 30,025,628.52 94,598,664.35
The amount of goodwill/combination cost less than the share of the -25,628.52 8,401,335.65
fair value of identifiable net assets acquired
Method for determining the fair value of consolidation costs:
Contingent consideration and explanation of its changes:
Main reasons for the formation of large amount of goodwill:
The Company acquired 100.00% equity of Winner Guilin Latex Co., Ltd. with a merge cost of 103,000,000.00 yuan. On the
purchase date, the Company obtained the identifiable net assets of Winner Guilin Latex Co., Ltd. with the fair value of
94,598,664.35 yuan, and the difference between the merge cost and the fair value of the identifiable net assets obtained in the
merger of 8,401,335.65 yuan was recognized as goodwill.
Other description:
(
273
Winner Medical
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: yuan
Shanghai Hongsong Medical Device Co., Ltd. Winner (Jinzhou) Latex Products Co., Ltd.
Fair value on the acquisition Book value on the Fair value on the
date acquisition date acquisition date
Assets: 105,903,686.47 94,701,104.45 193,136,941.56 149,741,122.62
Cash and cash equivalents 8,823,863.68 8,823,863.68 169,539.86 169,539.86
Accounts receivable payments 29,718,604.59 29,718,604.59 481,417.05 481,417.05
Inventory 3,631,478.92 2,174,472.57 8,882,511.77 8,261,963.67
Fixed assets 2,199,354.00 1,618,600.25 95,175,479.00 82,920,529.77
Intangible assets 9,080,000.00 42,213,300.00 12,697,399.00
Tradable financial assets 45,084,821.92 45,000,000.00
Advance to supplier 190,174.00 190,174.00 541,660.19 541,660.19
Net other accounts receivable 267,921.81 267,921.81 9,326.71 9,326.71
Other current assets 7,309,869.00 7,309,869.00
Construction in progress 35,243,285.25 34,238,864.64
Net right-to-use assets 6,907,467.55 6,907,467.55
Long-term unamortized expenses 2,859,991.18 2,859,991.18
Other non-current assets 250,561.55 250,561.55
Debt: 55,860,972.26 53,060,326.76 98,538,277.21 87,689,322.48
Loan 21,500,000.00 21,500,000.00
Account payable payments 18,439,452.22 18,439,452.22 32,361,218.69 32,361,218.69
Deferred income tax liabilities 2,800,645.50 10,848,954.73
Contract liabilities 653,648.93 653,648.93 1,015,777.86 1,015,777.86
Payroll payable 1,715,576.91 1,715,576.91 845,715.00 845,715.00
Taxes payable 1,657,742.59 1,657,742.59 427,460.66 427,460.66
Dividends payable 23,192,786.50 23,192,786.50
Other payables 149,420.94 149,420.94 11,857,061.78 11,857,061.78
Non-current liabilities due within one 641,367.96 641,367.96 6,000,000.00 6,000,000.00
year
Other current liabilities 85,910.37 85,910.37 132,051.12 132,051.12
Long-term loans 2,500,000.00 2,500,000.00
Lease liabilities 6,524,420.34 6,524,420.34
Deferred income 11,050,037.37 11,050,037.37
Net assets 50,042,714.21 41,640,777.69 94,598,664.35 62,051,800.14
Less: Minority equity 20,017,085.68 16,656,311.08
Net assets acquired 30,025,628.53 24,984,466.61 94,598,664.35 62,051,800.14
274
Determination method of fair value of identifiable assets and liabilities:
The acquisition target Shanghai Hongsong Medical Device Co., Ltd. has been appraised by Yinxin Appraisal Co., Ltd. with an
issuance of the Assets Appraisal Report on the Market Value Items of Various Identifiable Assets, Liabilities and Contingent
Liabilities of Shanghai Hongsong Medical Device Co., Ltd. Related to the Proposed Merger Consideration Allocation of Winner
Medical Co., Ltd. (Y.X.P.B.Zi [2023] No. D00027), and the appraisal benchmark date of April 30, 2023. According to the
appraisal report, considering the impact of deferred income tax and the impact of the capital increase, the fair value of the
identifiable net assets of the acquired 100% equity of Shanghai Hongsong Medical Device Co., Ltd. is 50,042,714.20 yuan.
The acquisition target Winner (Jinzhou) Latex Products Co., Ltd. has been appraised by Yinxin Appraisal Co., Ltd. with an
issuance of the Assets Appraisal Report on the Market Value Items of Various Identifiable Assets, Liabilities and Contingent
Liabilities of Shanghai Hongsong Medical Device Co., Ltd. Related to the Proposed Merger Consideration Allocation of Winner
Medical Co., Ltd. (Y.X.P.B.Zi [20231] No. D00138), and the appraisal benchmark date of June 30, 2022. According to the
appraisal report, considering the impact of deferred income tax and the impact of the capital increase, the fair value of the
identifiable net assets of the acquired 100% equity of Winner (Jinzhou) Latex Products Co., Ltd. is 94,598,664.35 yuan.
Contingent liabilities of the acquiree incurred in business combination: Other description:
(4) Gains or losses arising from remeasurement of equity held prior to the acquisition date at fair value
Whether there are transactions that realize the business combination step by step through multiple transactions and obtain control
right during the reporting period
□Yes √No
(5) Relevant description of the combination consideration or the fair value of the identifiable assets and liabilities of the acquiree
that cannot be reasonably determined on the acquisition date or at the end of current period of the combination
(6) Other description
2. Business combination under common control
(1) Business combination under common control occurred in current period
Unit: yuan
Income of the Net profit of the
combined party combined party Income of the Net profit of the
Proportion of Basis of business
Basis for from the from the combined party combined party
Name of merged equity obtained in combination
Merger date determination of beginning of beginning of during the during the
party business under common
merger date current period to current period to comparison comparison
combination control
the date of the date of period period
combination combination
Other description:
275
Winner Medical
(2) Combination cost
Unit: yuan
Combination cost
‐ Cash
‐ Book value of non-cash assets
‐ Book value of debt issued or assumed
‐ Book value of equity securities issued
‐ Contingent consideration
Contingent consideration and explanation of its changes:
Other description:
(3) Book value of assets and liabilities of the combined party on the date of combination
Unit: yuan
Merger date End of previous period
Assets:
Cash and cash equivalents
Accounts receivable payments
Inventory
Fixed assets
Intangible assets
Debt:
Loan
Account payable payments
Net assets
Less: Minority equity
Net assets acquired
Contingent liabilities of the combined party incurred in business combination:
Other description:
276
3. Reverse purchase
Basic information of transaction, basis of transaction forming reverse purchase, whether the assets and liabilities retained by the
listed company constitute business and their basis, determination of combination cost, amount and calculation of adjusted equity
in accordance with equity transaction:
4. Disposal of subsidiary
Are there any transactions or events during this period that lead to the loss of control of subsidiaries?
□Yes √No
Whether there is a situation that the investment in subsidiaries is disposed step by step through multiple transactions and the
control right is lost in current period
□Yes √No
5. Change of merger scope for other reasons
Explain the changes in the scope of combination caused by other reasons (such as the establishment of new subsidiaries,
liquidation of subsidiaries, etc.) and relevant information:
Huanggang Cotton was merged by Winner Huanggang during the period
6. Others
None
X. Interests in other entities
1. Interests in a subsidiary
(1) Composition of enterprise group
Unit: yuan
Subsidiary Shareholding ratio
Registered capital Main operation site Registration place Business nature Way of obtaining
name Direct Indirect
Shenzhen 130,000,000.00 Shenzhen City, Shenzhen City, Sale of Purcotton products 100.00% Establishment
Purcotton Guangdong Guangdong
Province Province
Beijing 3,000,000.00 Beijing Beijing Sale of Purcotton products 100.00% Establishment
Purcotton
Guangzhou 1,000,000.00 Guangzhou City, Guangzhou City, Sale of Purcotton products 100.00% Establishment
Purcotton Guangdong Guangdong
Province Province
Shanghai 3,000,000.00 Shanghai Shanghai Sale of Purcotton products 100.00% Establishment
Purcotton
Qianhai 10,000,000.00 Shenzhen City,Shenzhen City, Sale of Purcotton products 100.00% Establishment
Purcotton Guangdong Guangdong
Province Province
Winner 259,459,200.00 Huanggang City,Huanggang City, Production and sales of pure cotton spunlace 100.00% Business combination
Medical Hubei Province Hubei Province non-woven fabric, medical consumables and under common control
(Huanggang) Purcotton products
Winner 23,000,000.00 Jingmen City, Hubei Jingmen City, Hubei Production and sales of medical consumables 100.00% Business combination
Medical Province Province and Purcotton products under common control
(Jingmen)
277
Winner Medical
Subsidiary Shareholding ratio
Registered capital Main operation site Registration place Business nature Way of obtaining
name Direct Indirect
Winner 28,550,000.00 Chongyang County, Chongyang County, Production and sales of medical consumables 100.00% Business combination
Medical Hubei Province Hubei Province under common control
(Chongyang)
Winner 233,040,000.00 Jiayu County, Hubei Jiayu County, Hubei Production and sales of medical consumables 100.00% Business combination
Medical (Jiayu) Province Province and Purcotton products under common control
Winner 12,413,668.87 Zhijiang City, Hubei Zhijiang City, Hubei Production and sales of medical gray cloth 100.00% Business combination
Medical Province Province under common control
(Yichang)
Winner 37,670,000.00 Tianmen City, Tianmen City, Production and sales of pure cotton spunlace 100.00% Business combination
Medical Hubei Province Hubei Province non-woven fabric and Purcotton products under common control
(Tianmen)
Winner 897,570.00 Hong Kong Hong Kong Sales of medical consumables and healthy 60.00% Business combination
Medical (Hong living consumer goods under common control
Kong)
Winner 18,738,690.96 Huanggang City, Huanggang City, Cotton trade 100.00% Business combination
(Huanggang) Hubei Province Hubei Province under common control
Cotton
Winner 4,943,266.40 Malaysia Malaysia There is no actual business operation 100.00% Business combination
Medical not under common
Malaysia control
Winner 100,000,000.00 Heyuan City, Heyuan City, There is no actual business operation at 100.00% Establishment
Medical Guangdong Guangdong present
(Heyuan) Province Province
Winner 400,000,000.00 Wuhan City, Hubei Wuhan City, Hubei Production and sterilization of pure cotton 100.00% Establishment
Medical Province Province spunlace non-woven fabric and Purcotton
(Wuhan) products
PureH2B 150,000,000.00 Shenzhen City, Shenzhen City, Sales of personal care and other products 100.00% Establishment
Guangdong Guangdong
Province Province
Purunderwear 5,000,000.00 Shenzhen City, Shenzhen City, Sales of Cotton Lining products 100.00% Establishment
Guangdong Guangdong
Province Province
Huanggang 10,000,000.00 Huanggang City, Huanggang City, Sale of Purcotton products 100.00% Establishment
Purcotton Hubei Province Hubei Province
Winner 1,000,000.00 Foshan City, Foshan City, There is no actual business operation at 100.00% Establishment
Medical Guangdong Guangdong present
(Foshan) Province Province
Longterm 5,000,000.00 Huzhou, Zhejiang Huzhou, Zhejiang Production and sales of medical consumables 55.00% Business combination
Medical not under common
control
Hangzhou 5,000,000.00 Hangzhou, Zhejiang Hangzhou, Zhejiang Other technology promotion services 55.00% Business combination
Shengyi not under common
control
Xi’an 5,000,000.00 Xi’an, Shaanxi Xi’an, Shaanxi Engineering technical research and 55.00% Business combination
Longtemu experimental development not under common
control
Deqing 2,000,000.00 Huzhou, Zhejiang Huzhou, Zhejiang Manufacturing of medical instruments, 55.00% Business combination
Longterm equipment and device not under common
control
United States US US Manufacturing of medical instruments, 55.00% Business combination
Longterm equipment and device not under common
control
Winner Guilin 86,600,997.00 Xiufeng District, Xiufeng District, Rubber products industry 91.74% Business combination
Guilin City, Guilin City, not under common
Guangxi Zhuang Guangxi Zhuang control
Autonomous Region Autonomous Region
Winner 44,000,111.00 Changde, Hunan Changde, Hunan Production and sales of medical consumables 68.70% Business combination
Medical not under common
(Hunan) control
Ruian Medical 2,000,000.00 Changsha, Hunan Changsha, Hunan Engineering technical research and 68.70% Business combination
Device experimental development not under common
control
Junjian 20,120,000.00 Shenzhen City, Shenzhen City, Sales of medical consumables 100.00% Business combination
Medical Guangdong Guangdong not under common
Province Province control
Mexico 32,320,032.00 Mexico Mexico Production and sales of medical consumables 55.00% Establishment
Longtai
Shanghai 2,000,000.00 Shanghai Shanghai Sales of medical consumables 60.00% Establishment
Hongsong
Winner 87,500,000.00 Jingzhou City, Jingzhou City, Production and sale of rubber products 91.74% Business combination
Jinzhou Hubei Province Hubei Province not under common
control
Purcotton 20,000,000.00 Wuhan City, Hubei Wuhan City, Hubei Sale of Purcotton products 100.00% Establishment
Wuhan Province Province
Purcotton Hong Kong Hong Kong Sale of Purcotton products 100.00% Establishment
Hong Kong
Pan-China 860,840.00 Hong Kong Hong Kong There is no actual business operation at 100.00% Establishment
(H.K.) present
Wuhan Digital 500,000.00 Wuhan City, Hubei Wuhan City, Hubei Software development and sales 100.00% Establishment
Technology Province Province
278
Unit: yuan
Difference between the shareholding ratio and the voting right ratio in the subsidiary:
Basis for holding half or less of the voting rights but still controlling the invested entity, and holding more than half of the voting
rights but not controlling the invested entity:
For the important structured entity included in the combination scope, the control basis is as follows:
Basis for determining whether the company is an agent or a principal:
Other description:
Huanggang Cotton was merged by Winner Huanggang in 2023.
(2) Important non-wholly owned subsidiary
Unit: yuan
Current profits and losses
Current dividends declared to Ending balance of minority
Subsidiary name Minority shareholding ratio attributable to minority
minority shareholders equity
shareholders
Difference between the shareholding ratio and the voting right ratio of the minority shareholders of the subsidiary:
Other description:
(3) Main financial information of important non-wholly owned subsidiaries
Unit: yuan
Closing Balance Balance at the beginning of the period
Subsidiary
name
Current Non-curren Total Current Non-curren Total Current Non-curren Total Current Non-curren Total
assets t assets assets liabilities t liabilities liabilities assets t assets assets liabilities t liabilities liabilities
Unit: yuan
Amount incurred in current period Amount incurred in previous period
Subsidiary Total
Cash flow from Total
name comprehen Cash flow from
Revenue Net profit financing Revenue Net profit comprehensiv
sive financing activities
activities e income
income
Other description:
(4) Major restrictions on the use of enterprise group assets and the settlement of enterprise group debts
(5) Financial or other support provided to structured entity included in the consolidated financial statements
Other description:
279
Winner Medical
2. Transactions in which the share of ownership interest in a subsidiary changes and the subsidiary is still controlled
(1) Description of changes in the owner’s equity share in the subsidiary
Additionally, Winner Guilin introduced minority shareholders via its capital increase, resulting in passive dilution of the
Company’s equity without loss of control. Other capital reserves amounting to 26,153,134.84 yuan were confirmed.
(2) Impact of transactions on minority shareholders’ equity and owners’ equities attributable to the owners of parent company
Unit: yuan
Purchase cost / Disposal consideration
- Cash
- Fair value of non-cash assets
Total purchase cost / Disposal consideration
Loss: The share of the net asset of a subsidiary calculated based on the proportion of equity acquired/disposed
Balance
Including: Capital reserve adjusted
Surplus reserve adjusted
Undistributed profit adjusted
Other description:
3. Equity in joint venture arrangement or joint venture
(1) Important cooperative enterprises or joint ventures
Shareholding ratio Accounting treatment method of
Name of cooperative enterprise or Main operation Registration Business
investment in cooperative
joint venture site place nature Direct Indirect enterprises or joint ventures
Difference between the shareholding ratio and the voting right ratio in the cooperative enterprise or joint venture:
Basis for holding less than 20% of the voting rights but having a significant impact, or holding 20% or more of the voting rights
but not having a significant impact:
280
(2) Major Financial Information about Important Cooperative Enterprises
Unit: yuan
Ending balance/amount incurred in current Beginning balance/amount incurred in previous
period period
Current assets
Including: Cash and cash equivalents
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority equity
Attributable to the parent company shareholders’ equity
Share of net assets by shareholding ratio
Adjustment items
- Goodwill
- Unrealized profit of internal transaction
- Others
Book value of equity investments in joint ventures
Fair value of equity investments in joint ventures with
publicly quoted prices
Revenue
Financial expenses
Income tax expenses
Net profit
Net profit of discontinued operation
Other comprehensive income
Total comprehensive income
Dividends received from joint ventures in current year
Other description:
281
Winner Medical
(3) Major Financial Information About Important Jointly Operated Enterprises
Unit: yuan
Ending balance/amount incurred in current Beginning balance/amount incurred in previous
period period
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority equity
Attributable to the parent company shareholders’ equity
Share of net assets by shareholding ratio
Adjustment items
- Goodwill
- Unrealized profit of internal transaction
- Others
Book value of equity investments in cooperative
enterprises
Fair value of equity investments in cooperative
enterprises with publicly quoted prices
Revenue
Net profit
Net profit of discontinued operation
Other comprehensive income
Total comprehensive income
Dividends received from cooperative enterprises in
current year
Other description:
282
(4) Summary of financial information of unimportant cooperative enterprises and joint ventures
Unit: yuan
Ending balance/amount incurred in Beginning balance/amount
current period incurred in previous period
Cooperative enterprise:
Total number of following items by shareholding ratio
- Joint venture:
Total book value of investment 20,879,244.20 21,747,635.99
Total number of following items by shareholding ratio
- Net profit 1,581,608.21 4,697,834.75
- Total comprehensive income 1,581,608.21 4,697,834.75
Other description:
(5) Significant restrictions on the ability of cooperative enterprises and joint ventures to transfer funds to the Company
(6) Excess losses of cooperative enterprise or joint venture
Unit: yuan
Unrecognized loss in current period
Name of cooperative enterprise or Accumulated unrecognized losses in the Accumulated unrecognized losses at
(or net profit shared in current
joint venture previous period the end of current period
period)
Other description:
(7) Unconfirmed commitments related to investment in cooperative enterprise
(8) Contingent liabilities related to investment in cooperative enterprise or joint venture
4. Important pooling of interests
Name of joint Shareholding ratio / share enjoyed
Main operation site Registration place Business nature
operation Direct Indirect
Difference between the shareholding ratio or share enjoyed and the voting right ratio in joint operation:
If the joint operation is a separate entity, it shall be classified as the basis of joint operation:
Other description:
283
Winner Medical
5. Equity in the structured entity that is not included in the consolidated financial statements
Description of structured entity not included in the consolidated financial statements
6. Others
XI. Government subsidies
1. Government subsidies recognized based on the receivable amount at the end of the reporting period
□ Applicable √ Not applicable
Reasons for the failure to receive the estimated amount of government subsidy at the estimated time
□ Applicable √ Not applicable
2. Projects involving government subsidies
√Applicable □ Not applicable
Unit: yuan
Balance at the Amount of Amounts transferred to Other changes
Accounting Amount included in
beginning of the additional subsidy other earnings during the during the Closing Balance Asset/income related
subject current non-revenue
period in current period period period
Deferred Government subsidies related
98,791,412.91 48,677,287.37 11,319,335.31 14,500,000.00 121,649,364.97
income to assets
3. Government subsidies included in current profit and loss:
√Applicable □ Not applicable
Unit: yuan
Accounting subject Amount incurred in current period Amount incurred in previous period
Other incomes 101,105,274.61 84,373,262.34
Non-operating income 171,825.26 485,841.01
Gains from asset disposal 14,500,000.00 0.00
Other description
284
XII. Risks associated with financial instruments
1. Types of risks arising from financial instruments
The Company is exposed to various financial risks in the process of operation: credit risk, liquidity risk and market risk, including
exchange rate risk, interest rate risk and other price risk. The aforementioned financial risks and the risk management policies
adopted by the Company to mitigate these risks are described below: The Board of Directors is responsible for planning and
establishing the Company’s risk management structure, formulating the Company’s risk management policies and relevant
guidelines, and supervising the implementation of risk management measures. The Company has formulated risk management
policies to identify and analyze the risks to which the Company is exposed. These risk management policies specify specific risks,
covering various aspects such as market risk, credit risk and liquidity risk management. The Company regularly evaluates the
changes in the market environment and the Company’s operating activities to determine whether to update the risk management
policies and systems. The risk management of the Company is carried out by the Risk Management Committee in accordance
with the policies approved by the Board of Directors. The Risk Management Committee identifies, evaluates, and avoids related
risks through close cooperation with other business departments of the Company. The internal audit department of the Company
conducts regular audit on the risk management control and procedures, and reported the audit results to the Audit Committee of
the Company.
The Company disperses financial instrument risks through appropriate diversified investments and business portfolios, and reduce
risks concentrated in a single industry, specific region, or specific counterparty by formulating corresponding risk management
policies.
(1) Credit risk
Credit risk refers to the risk of financial loss to the Company due to the failure of the counterparty to fulfill its contractual
obligations.
The Company’s credit risk mainly arises from monetary funds, notes receivable, accounts receivable, receivables financing,
contract assets, other receivables, debt investment, other debt investments and financial guarantee contracts, as well as debt
instrument investments and derivative financial assets measured at fair value through profit or loss and not included in the
impairment assessment scope. On the balance sheet date, the book value of the Company’s financial assets represents its
maximum credit risk exposure.
The Company’s monetary funds are mainly deposited in state-owned banks and other large and medium-sized listed banks with
high credit rating. The Company believes that there is no significant credit risk and almost cannot cause significant losses caused
by bank default.
In addition, for notes receivable, accounts receivable, receivables financing, contractual assets and other receivables, the
Company makes relevant policies to control credit risk exposure. The Company evaluates the customers’ credit qualification and
sets the corresponding credit period based on the customer’s financial status, the possibility of obtaining guarantee from a third
party, credit records and other factors such as current market conditions. The Company will regularly monitor customers’ credit
records. For customers with poor credit records, the Company would urge payment in writing, shorten the credit period or cancel
the credit period, etc., to ensure that the overall credit risk of the Company is under control.
(2) Liquidity risk
Liquidity risk refers to the risk of capital shortage when the Company performs the obligation of settlement by cash payment or
other financial assets.
The Company’s policy is to ensure that there is sufficient cash to pay the debt due. Liquidity risk is centrally controlled by the
Financial Department of the Company. By monitoring cash balances, securities that can be turned into cash at any time, and
rolling forecasting of cash flows over the next 12 months, the Finance Department ensures that the Company has sufficient funds
to repay its debts under all reasonable projections. at the same time, it continuously monitors the compliance of the provisions of
the loan agreements, and obtained commitments from major financial institutions to provide sufficient standby capital to meet
short-term and long-term capital needs.
285
Winner Medical
The Company’s various financial liabilities are shown as follows in terms of undiscounted contract cash flows on maturity dates:
Closing Balance
Item Immediate More than 5 Total undiscounted
Within 1 year 1-2 years 2-5 years
repayment years contract amount
Short-term loans 1,493,238,955.00 1,493,238,955.00
Notes payable 315,902,844.15 315,902,844.15
Accounts payable 1,116,802,220.38 1,116,802,220.38
Other payables 591,310,917.61 591,310,917.61
Non-current
liabilities due within 223,426,826.45 223,426,826.45
one year
Long-term loans 170,000,000.00 170,000,000.00
Lease liabilities 152,725,191.59 160,706,193.96 19,232,032.29 332,663,417.84
Total 3,740,681,763.59 322,725,191.59 160,706,193.96 19,232,032.29 4,243,345,181.43
Closing balance of the previous year
Item Immediate More than 5 Total undiscounted
Within 1 year 1-2 years 2-5 years
repayment years contract amount
Short-term loans 2,295,218,930.85 2,295,218,930.85
Notes payable 24,760,000.00 24,760,000.00
Accounts payable 1,119,574,518.58 1,119,574,518.58
Other payables 570,843,242.88 570,843,242.88
Non-current
liabilities due within 215,946,889.32 215,946,889.32
one year
Lease liabilities 160,958,289.43 204,071,723.77 365,030,013.20
Total 4,226,343,581.63 160,958,289.43 204,071,723.77 4,591,373,594.83
(3) Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financial instruments fluctuates due
to the change of market price, including exchange rate risk, interest rate risk and other price risk.
1) Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to the change of
market interest rate.
The interest bearing financial instruments with fixed and floating interest rates expose the Company to fair value interest rate risk
and cash flow interest rate risk, respectively. The Company determines the ratio of fixed rate and floating rate instruments based
on the market environment, and maintains an appropriate combination of fixed rate and floating rate instruments through regular
review and monitoring. If necessary, the Company will use interest rate swap instruments to hedge interest rate risk.
286
On December 31, 2023, if other variables remain unchanged, and the borrowing rate at the floating rate rises or falls by 100 base
points, the Company’s net profit will decrease or increase by 3,680,579.09 yuan (December 31, 2022: 1,419,254.31 yuan). The
management considers that 100 basis points reasonably reflects a reasonable range of possible changes in interest rate over the
next year.
2) Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to the change of
foreign exchange rate.
The Company continuously monitors foreign currency transactions and the scale of foreign currency assets and liabilities to
minimize foreign exchange risks. In addition, the Company may enter into forward foreign exchange contracts or currency
exchange contracts to achieve the purpose of avoiding the exchange rate risk. The Company has not signed any forward foreign
exchange contracts or currency swap contracts during the current period and the previous period.
The exchange rate risk faced by the Company mainly comes from financial assets and financial liabilities denominated in USD.
The amounts of foreign currency financial assets and foreign currency financial liabilities converted into RMB are listed as
follows:
Closing Balance
Item
USD EUR HKD Mexican peso Ringgit Total
Foreign currency
financial assets
Cash and cash
406,476,977.07 5,054,600.55 20,817,202.66 2,760,541.42 86,776.72 435,196,098.42
equivalents
Accounts receivable 152,689,246.35 4,701,389.47 10,647,118.55 3,015.11 1,519,794.79 169,560,564.27
Other receivables 604,520.58 604,520.58
Subtotal 559,166,223.42 9,755,990.02 32,068,841.79 2,763,556.53 1,606,571.51 605,361,183.27
Foreign currency
financial liabilities
Accounts payable 3,910.09 3,910.09
Other payables 765,832.15 354,125.87 1,119,958.02
Subtotal 765,832.15 3,910.09 354,125.87 1,123,868.11
Net amount 559,166,223.42 9,755,990.02 31,303,009.64 2,759,646.44 1,252,445.64 604,237,315.16
On December 31, 2023, if the RMB appreciates or depreciates by 5% against aforementioned currencies, all other variables being
held constant, the net profit of the Company will be reduced or increased by 25,321,546.56 yuan (December 31, 2022:
16,092,001.76 yuan). Management considers that 5% is a reasonable reflection of the reasonable range of possible changes in
RMB against USD.
3) Other price risks
Other price risks refer to the risks that the fair value or future cash flows of financial instruments fluctuate due to the changes in
market prices other than exchange rate risk and interest rate risk.
2. Hedge
(1) The Company carries out hedging business for risk management
□ Applicable √ Not applicable
287
Winner Medical
(2) The Company carries out qualified hedging business and applies hedging accounting
Unit: yuan
Cumulative fair value hedging adjustments of Some sources of hedging
Book value related to hedged The impact of hedge accounting on
Item hedged items included in recognized carrying effectiveness and
items and hedging instruments a company’s financial statements
amounts ineffectiveness
Hedging risk type
Hedge type
Other description
(3) The Company engages in hedging activities for risk management purposes and anticipates achieving risk management
objectives but does not apply hedge accounting
□ Applicable √ Not applicable
3. Financial assets
(1) Transfer method classification
√Applicable □ Not applicable
Unit: yuan
Nature of financial assets Amount of financial assets
Transfer method De-recognition Basis for judgment on termination of confirmation
transferred transferred
Bill Retain substantially all of its risks and rewards,
Notes receivable 28,991,818.10 Not terminated
endorsement including default risks associated therewith
Bill Substantially all risks and rewards have been
Notes receivable 334,223,420.29 De-recognition
endorsement transferred
Total 363,215,238.39
(2) Financial assets derecognized as a result of a transfer
√Applicable □ Not applicable
Unit: yuan
Amount of financial assets
Item Methods of transferring financial assets Gains or losses related to derecognition
derecognized
Notes receivable Bill endorsement 334,223,420.29
Total 334,223,420.29
(3) Asset transfer financial assets that continue to be involved
□ Applicable √ Not applicable
Other description
288
XIII. Fair value disclosure
1. Ending fair value of assets and liabilities measured with fair value
Unit: yuan
Closing fair value
Item Measurement of fair Measurement of fair value Measurement of fair
Total
value at first level at second level value at third level
I. Continuous fair value measurement -- -- -- --
(I) Tradable financial assets 1,735,249,266.74 1,114,809,273.97 2,850,058,540.71
1. Financial assets measured at fair value of
which the changes are included in current profit 1,735,249,266.74 1,114,809,273.97 2,850,058,540.71
and loss
(3) Derivative financial assets 1,735,249,266.74 1,735,249,266.74
(4) Others 1,114,809,273.97 1,114,809,273.97
Amounts receivable financing 29,348,618.44 29,348,618.44
Other non-current financial assets 70,000,000.00 70,000,000.00
Total assets continuously measured at fair value 1,764,597,885.18 1,184,809,273.97 2,949,407,159.15
II. Non-continuous fair value measurement -- -- -- --
2. Continuous and non-continuous measurement items of fair value at first level and recognition basis for market price
The input value of the first level is the unadjusted quotation of the same assets or liabilities on the active market that can be
obtained on the measurement day.
3. Continuous and non-continuous measurement items of fair value at second level, qualitative and quantitative
information on valuation techniques adopted and important parameters
The input value of the second level is the direct or indirect observable input value of related assets or liabilities other than the
input value of the first level.
4. Continuous and non-continuous measurement items of fair value at third level, qualitative and quantitative
information on valuation techniques adopted and important parameters
The input value of the third level is the non-observable input value of the relevant assets or liabilities.
5. Continuous measurement items of fair value at third level, adjustment information between opening and closing
book value and sensitivity analysis of unobservable parameters
For the Company’s ongoing Level 3 fair value measurement program, the reconciling information primarily includes valuation
changes, sales, and settlements. There have been no changes in unobservable parameters that could significantly impact fair value.
289
Winner Medical
6. For continuous measurement items of fair value, if there is a conversion between different levels in current period,
the reasons for the conversion and the policies for determining the conversion time point
There were no transitions between levels during the year.
7. Valuation technology change and reason of change in current period
There were no changes to the valuation techniques used during the year.
8. Fair value of financial assets and financial liabilities not measured at fair value
The Company’s financial assets and financial liabilities measured at amortized cost mainly include: notes receivable, accounts
receivable, other receivables, other current assets, notes payable, accounts payable, other payables, non-payments due within one
year. Current liabilities, other current liabilities, and lease liabilities. There is no significant difference between the book value and
fair value of the Company’s various financial assets and financial liabilities measured at amortized cost on December 31, 2023.
9. Others
None
XIV. Related parties and connected transactions
1. Parent company of the Company
Shareholding ratio of Voting right ratio of
Registration
Parent company name Business nature Registered capital the parent company in the parent company in
place
the Company the Company
Cayman Equity investment and
Winner Group Limited HKD 1,143,000.00 68.41% 68.41%
Islands management business
Parent company of the Company
Winner Group Limited was incorporated in the Cayman Islands on April 8, 2003 with registration number 124887 and an
authorized share capital of 360,000,000.00 shares with a nominal value of HKD 1 per share. 1,143,000 shares have been issued.
The registered address is Vistra (Cayman) Limited, P.O. Box 31119, Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand
Cayman KY1-1205, Cayman Islands.
The ultimate controlling party of the Company is Li Jianquan.
Other description:
2. Subsidiaries of the Company
See Note “X. Interests in other entities”.
290
3. Cooperative enterprises and joint ventures
See the note “X. Interests in other entities” for important cooperative enterprises or joint ventures of the Company.
Other cooperative enterprises or joint ventures that made related party transactions with the Company in the current period, or
formed the balance of related party transactions with the Company in the previous periods are as follows:
Name of cooperative enterprise or joint venture Relationship with the Company
Chengdu Winner Cooperative enterprise
Hubei Xianchuang Technology Co., Ltd. Cooperative enterprise
Other description:
4. Situation of other related parties
Name of other related parties Relationship of other related parties with the Company
Glory Ray Holdings Limited A company controlled by the actual controller
Glory Ray Limited A company controlled by the actual controller through Glory Ray Holdings
Beijing Sequoia Xinyuan Equity Investment Center (limited Shareholder of the Company
partnership)
Xiamen Leyuan Investment Partnership (Limited Partnership) Shareholder of the Company
Xiamen Yutong Investment Partnership (Limited Partnership) Shareholder of the Company
Xiamen Huikang Investment Partnership (Limited Partnership) Shareholder of the Company
Shenzhen Capital Group Co., Ltd. Shareholder of the Company
Xiamen Zepeng Investment Partnership (Limited Partnership) Shareholder of the Company
Chengdu Winner Likang Medical Products Co., Ltd. Joint venture, with 49% equity hold by the Company
Wuhan Zhuoling Packaging Co., Ltd. A company controlled by close family members of the Company’s key managers
Glory Ray Holdings Limited A company controlled by the actual controller
Li Jianquan Actual controller of the Company
Fang Xiuyuan Director, deputy general manager, chief financial officer
Xu Xiaodan Director
Guo Zhenwei Director
Peng Jianfeng Independent director
Xie Jiawei Independent director
Liu Ke Independent director
Zhang Tingting Chairman of the Board of Supervisors
Wang Ying Former supervisor
291
Winner Medical
Name of other related parties Relationship of other related parties with the Company
Name of other related parties Relationship of other related parties with the Company
Liu Hua Employee supervisor
Zhang Yan Supervisor
Chen Huixuan Secretary to the board of directors, deputy general manager
Zhang Li Deputy general manager
Huang Jun Original shareholder and original director of Winner Medical (Hunan)
Lixian SHRCB Rural Bank Co., Ltd. A company in which Zheng Datian, Vice Chairman of Winner Medical (Hunan), serves
as a director
Jingyi Biotechnology (Shanghai) Co., Ltd. A company actually controlled by Wu Kangping, a shareholder of Longterm Medical
Shenzhen Nine Stars Printing and Packaging Group Co., Ltd. A company controlled by the final controller of Winner Guilin before merge
Shenzhen Junhesheng Technology Co., Ltd. A company controlled by the actual controller of Junjian Medical before merge
Shenzhen Shengtianning Medical Device Co., Ltd. A company controlled by the actual controller of Junjian Medical before merge
Shenzhen Zhengjun Medical Device Co., Ltd. A company controlled by the actual controller of Junjian Medical before merge
Zhejiang Kanglidi Medical Supplies Co., Ltd. A company actually controlled by Wu Di, a shareholder of Longterm Medical
ZheJiang Longmed Medical Technology Co., Ltd. A company actually controlled by Wu Di, a shareholder of Longterm Medical
ZheJiang Longrising Medical New Materials Co., Ltd. A company actually controlled by Wu Kangping, a shareholder of Longterm Medical
Zheng Junhui Controlling shareholder and actual controller of Junjian Medical before merger
Wu Kangping, Huang Lepei, Wu Di Controlling shareholder of Longterm Medical before merger and its current minority
shareholder
Cao Wensong, Zhang Yuqing Controlling shareholder of Shanghai Hongsong before merger and its current minority
shareholder
Guilin Golden Eagle Latex Technology Co., Ltd. Minority shareholder of Winner Guilin, former shareholder of Winner Jinzhou
Other description:
5. Connected transaction
(1) Connected transaction of purchases and sales of goods, provision and acceptance of services
Purchase of goods/acceptance of services
Unit: yuan
Whether the
Connected transaction Amount incurred in Approved transaction Amount incurred in
Related party
content current period transaction quota quota is previous period
exceeded
Purchasing goods or
Wuhan Zhuoling Packaging Co., Ltd. 16,916,433.65 No 77,258,887.85
services
Chengdu Winner Likang Medical Products Purchasing goods or
216,261.26 No 563,725.61
Co., Ltd. services
Shenzhen Nine Stars Printing and Packaging Purchasing goods or
1,985,289.48 No 352,151.87
Group Co., Ltd. services
292
Whether the
Connected transaction Amount incurred in Approved transaction Amount incurred in
Related party
content current period transaction quota quota is previous period
exceeded
Shenzhen Shengtianning Medical Device Purchasing goods or
897,359.19 No 668,252.32
Co., Ltd. services
Shenzhen Zhengjun Medical Device Co., Purchasing goods or
25,872.75 No 139,551.39
Ltd. services
Zhejiang Kanglidi Medical Supplies Co., Purchasing goods or
No 643,678.38
Ltd. services
ZheJiang Longrising Medical New Materials Purchasing goods or
15,974.14 No 150,642.09
Co., Ltd. services
ZheJiang Longmed Medical Technology Purchasing goods or
225,644.59 No 149,844.78
Co., Ltd. services
Guilin Golden Eagle Latex Technology Co., Purchasing goods or
2,345,811.69 No
Ltd. services
Selling commodities/offering labor
Unit: yuan
Amount incurred in
Related party Connected transaction content Amount incurred in current period
previous period
Chengdu Winner Likang Medical Products Co.,
Sell of goods or services 3,310,936.37 11,746,826.18
Ltd.
Lixian SHRCB Rural Bank Co., Ltd. Sell of goods or services 3,893.81
ZheJiang Longrising Medical New Materials
Sell of goods or services 5,532.76
Co., Ltd.
ZheJiang Longmed Medical Technology Co.,
Sell of goods or services 784,905.96 468,765.43
Ltd.
Zhejiang Kanglidi Medical Supplies Co., Ltd. Sell of goods or services 7,958,719.59 6,735,072.47
Shenzhen Shengtianning Medical Device Co.,
Sell of goods or services 1,427,243.15 9,121,976.34
Ltd.
Shenzhen Zhengjun Medical Device Co., Ltd. Sell of goods or services -424,759.31 399,011.49
Related transaction of purchases and sales of goods, provision and acceptance of services
Sales to Shenzhen Zhengjun Medical Device Co., Ltd. were negative primarily due to returns processed during the period.
(2) Associated fiduciary management/contracting and entrusted management/subcontracting
Entrusted management / contracting of the Company:
Unit: yuan
Fiduciary income /
Name of entrusting Fiduciary / Fiduciary / Pricing basis of
Name of entrusting Entrusted / contracting income
party / contracting start contracting fiduciary income /
party / contractor contracting asset type recognized in current
subcontractor date termination date contracting income
period
Associated fiduciary / contracting
N/A
293
Winner Medical
Entrustment management / subcontracting of the Company:
Unit: yuan
Fiduciary fee /
Entrusting / Entrusting / Entrusting / Pricing basis of
Name of entrusting Name of entrusting subcontracting fee
subcontracting subcontracting start subcontracting fiduciary fee /
party / subcontractor party / contractor recognized in current
asset type date termination date subcontracting fee
period
Description of associated management / subcontracting
not applicable
(3) Related-party lease
The Company as the lessor:
Unit: yuan
Lease income recognized in the Lease income recognized in the
Name of lessee Type of leased assets
current period previous period
ZheJiang Longmed Medical Technology Co., Ltd. Plant 430,764.22 257,033.03
Chengdu Winner Likang Medical Products Co.,
Ltd. Plant 908,441.15
The Company as the lessee:
Unit: yuan
Simplified processing of
Variable lease payments
Type of short-term leases and Interest expenses
Name that are not included in the Right-of-use assets
leased rental expenses of Rent paid incurred on lease
of lessor measurement of the lease increased
assets low-value asset leases (if liabilities
liabilities (if applicable)
applicable)
Amount
Amount Amount Amount Amount Amount Amount Amount Amount Amount
incurred
incurred in incurred in incurred in incurred in incurred in incurred in incurred in incurred in incurred in
in
current previous current previous current previous current previous current
previous
period period period period period period period period period
period
Related-party lease description
(4) Related-party guarantee
The Company as the guarantor
Unit: yuan
Whether the guarantee has
Secured party Amount guaranteed Guarantee start date Guarantee maturity date
been fulfilled
294
The Company as the guarantor
Unit: yuan
Whether the guarantee has
Guarantor Amount guaranteed Guarantee start date Guarantee maturity date
been fulfilled
Wu Kangping, Huang Lepei 150,000,000.00 February 23, 2022 February 22, 2026 Yes
Wu Kangping, Huang Lepei 60,000,000.00 April 13, 2021 April 12, 2027 Yes
Wu Kangping 11,000,000.00 February 7, 2021 February 6, 2025 Yes
Huang Lepei 11,000,000.00 February 7, 2021 February 6, 2025 Yes
Wu Di 11,000,000.00 February 7, 2021 February 6, 2025 Yes
Wu Kangping 10,000,000.00 February 24, 2022 February 23, 2025 Yes
Huang Lepei 10,000,000.00 February 24, 2022 February 23, 2025 Yes
Zhejiang Kanglidi Medical
10,000,000.00 February 24, 2022 February 23, 2025 Yes
Supplies Co., Ltd.
Related-party guarantee
The loan has been repaid as of December 31, 2023.
(5) Related party loan at call
Unit: yuan
Related party Borrowing amount Start date Maturity date Description
Borrowing
Lending
(6) Asset transfer and debt restructuring of related party
Unit: yuan
Amount incurred in current
Related party Connected transaction content Amount incurred in previous period
period
(7) Key management personnel remuneration
Unit: yuan
Amount incurred in
Item Amount incurred in current period
previous period
Key management personnel remuneration 11,823,627.11 13,446,315.05
The “Key management personnel remuneration” here includes the “five insurances and one fund” paid by the Company. The
previous article “Section Ⅳ Corporate Governance - Ⅶ Directors, Supervisors and Senior Management - 3. Remuneration of
Directors, Supervisors and Senior Management” “The medium caliber does not include the “five insurances and one housing fund”
paid by the Company.
(8) Other connected transactions
295
Winner Medical
6. Accounts receivable and payable by related parties
(1) Receivables
Unit: yuan
Closing Balance Balance at the beginning of the period
Project name Related party Provision for bad Provision for bad
Book balance Book balance
debt debt
Accounts
receivable
Chengdu Winner Likang Medical Products
121,107.25 6,055.36 369,395.74 18,469.79
Co., Ltd.
Jingyi Biotechnology (Shanghai) Co., Ltd. 651,786.67 362,599.47 651,786.67 220,006.76
Shenzhen Shengtianning Medical Device
7,331,532.66 366,576.63
Co., Ltd.
Shenzhen Zhengjun Medical Device Co.,
1,762,022.32 88,101.12
Ltd.
Zhejiang Kanglidi Medical Supplies Co.,
6,273,681.66 3,262,314.46 1,837,108.40 91,855.42
Ltd.
ZheJiang Longmed Medical Technology
44,264.20 22,132.10 144,673.40 7,233.67
Co., Ltd.
ZheJiang Longrising Medical New
55,964.00 2,798.20
Materials Co., Ltd.
Advances to
suppliers
Shenzhen Shengtianning Medical Device
274,273.56
Co., Ltd.
Shenzhen Zhengjun Medical Device Co.,
1,170.00
Ltd.
ZheJiang Longmed Medical Technology
62,934.14
Co., Ltd.
Winner Group Limited 516,504.00
Long-term
receivables 1*
Chengdu Winner Likang Medical Products
40,068,572.38
Co., Ltd.
1*This item comprises non-current assets reclassified to maturity within one year.
(2) Payables
Unit: yuan
Project name Related party Ending book balance Beginning book balance
Accounts
Wuhan Zhuoling Packaging Co., Ltd. 763,921.27 23,113,608.45
payable
Chengdu Winner Likang Medical Products
11,682.12 81,750.48
Co., Ltd.
Shenzhen Nine Stars Printing and Packaging
194,545.00
Group Co., Ltd.
Shenzhen Shengtianning Medical Device
54,808.53 9,219.64
Co., Ltd.
Shenzhen Zhengjun Medical Device Co.,
2,964.00
Ltd.
296
Project name Related party Ending book balance Beginning book balance
Zhejiang Kanglidi Medical Supplies Co.,
83,441.97 93,378.17
Ltd.
ZheJiang Longmed Medical Technology Co.,
10,617.60
Ltd.
Guilin Golden Eagle Latex Technology Co.,
7,048,938.08
Ltd.
Other payables
Huang Jun 3,157,385.18 4,490,583.41
Shenzhen Shengtianning Medical Device
470,799.92
Co., Ltd.
Shenzhen Zhengjun Medical Device Co.,
134,199.16
Ltd.
Zheng Junhui 78,812,000.00
Cao Wensong 568,310.09
Guilin Golden Eagle Latex Technology Co.,
1,670,250.00
Ltd.
Contract
liabilities
Shenzhen Shengtianning Medical Device
1,165.93
Co., Ltd.
7. Related party commitment
8. Others
XV. Share-based payment
1. Overall status of share-based payment
√Applicable □ Not applicable
Unit: yuan
Exercised in the current Unlocked in the current Invalidated in the current
Grant object Granted in the current period
period period period
category
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Management
505,000 10,857,500.00
personnel
Total 505,000 10,857,500.00
Stock options or other equity instruments outstanding at the end of the period
□ Applicable √ Not applicable
Other description:
297
Winner Medical
1. 2020 Restricted Stock Incentive Plan
(1) Number of restricted stock granted
On November 27, 2020, the Company held the 15th meeting of the second Board of Directors and the 9th meeting of the second
Board of Supervisors, deliberated and passed the Proposal on the Company’s 2020 Restricted Stock Incentive Plan (Draft) and Its
Abstract. On December 15, 2020, the Company held the sixth extraordinary general meeting of shareholders in 2020 to deliberate
and pass the Proposal on the Company’s 2020 Restricted Stock Incentive Plan (Draft) and Its Abstract. According to the above
proposal, the number of restricted stock (Class II restricted stock) to be granted in this incentive plan is 6.5 million, and the
underlying stock involved is A -share common stock, accounting for about 1.52% of the total capital stock of the Company at the
time of announcement of the draft incentive plan. Among them, 5.9 million shares were granted for the first time, accounting for
about 1.38% of the total capital stock of the Company at the time of announcement of the draft incentive plan, and 90.77% of the
total equity to be granted. 0.6 million shares were reserved to be granted, accounting for about 0.14% of the total capital stock of
the Company at the time of announcement of the draft incentive plan, and 9.23% of the total equity to be granted. No more than
1,053 incentive objects will be granted at the first time, including directors, senior managers, and other persons deemed to need
incentives by the Board of Directors.
On December 18, 2020, the Company’s 17th meeting of the second Board of Directors and the 11th meeting of the second Board of
Supervisors deliberated and adopted the Proposal on the First Grant of Restricted Stocks to the Incentive Objects. In view of the
fact that 17 incentive objects gave up the restricted stock to be granted by the Company due to resignation or personal reasons,
they no longer qualified for the incentive conditions. According to the 2020 Restricted Stock Incentive Plan (Draft), the Company
adjusted the incentive objects and the number of grants. The number of incentive objects granted for the first time was adjusted
from 1,053 to 1,036, and the total number of restricted stock granted for the first time was adjusted from 5.90 million to 5.833
million. The grant price for the initial allocation of restricted stock was 72.50 yuan per share.
(2) Validity, grant date, vesting arrangement and lock-up period of this incentive plan
1 The incentive plan shall be valid for no more than 48 months from the date of the first grant of restricted stock to the date
when all the restricted stock granted to the incentive object is vested or invalidated.
2 After the incentive plan is approved by the general meeting of shareholders of the Company, the Board of Directors shall
determine the grant date, and the grant date must be the trading day. The Company shall grant the restricted stock and complete
the announcement within 60 days after the approval of the general meeting of shareholders. If the Company fails to complete the
above work within 60 days, the implementation of this incentive plan will be terminated, and the restricted stock not granted will
become invalid.
The Company shall, within 12 months after the deliberation and approval of the incentive plan by the general meeting of
shareholders, specify the incentive objects reserved for award. If the incentive objects are not specified for more than 12 months,
the restricted stock corresponding to the reserved part shall become invalid.
3 The vesting arrangement for the first grant of restricted stock in this incentive plan is shown in the following table:
Vesting arrangement Vesting period Vesting ratio
From the first trading day of 17 months from the date of the first grant to the last trading day within 29
First vesting period 50%
months from the date of the first grant
From the first trading day of 29 months from the date of the first grant to the last trading day within 41
Second vesting period 50%
months from the date of the first grant
If the restricted stock corresponding to the reserved part is granted within 2020, the vesting arrangement for granting restricted
stocks reserved in this incentive plan is consistent with the vesting arrangement for the first grant of restricted stock.
298
If the restricted stock corresponding to the reserved part is granted within 2021, the vesting arrangement for granting restricted
stocks reserved in this incentive plan is shown in the following table:
Vesting arrangement Vesting period Vesting ratio
From the first trading day of 12 months from the date of reserved granting to the last trading day within 24
First vesting period 50%
months from the date of reserved granting
From the first trading day of 24 months from the date of reserved granting to the last trading day within 36
Second vesting period 50%
months from the date of reserved granting
If the incentive objects are directors and senior management of the Company, the shares transferred each year during their term of
office shall not exceed 25% of the total number of the Company’s shares they hold; they shall not transfer the shares they hold
within half a year after leaving the Company
The range of exercise prices of the Company’s stock options issued and outstanding at the end of the period and the remaining
term of the contract: In case of the audited operating income in 2021 ≥ 12 billion yuan, the ownership proportion at the Company
level is 100%; in case of 10 billion yuan ≤ the audited operating income in 2021 < 12 billion yuan, the ownership proportion at the
Company level is 80%; in case of the audited business income in 2021 < 10 billion yuan, the restricted stock planned to be vested
by the incentive object shall not be vested and become invalid. In case of the audited revenue in 2022 ≥ the audited revenue in
2021 * (1+30%), the ownership proportion at the Company level is 100%; in case of the audited revenue in 2021 * (1+20%) ≤ the
audited revenue in 2022 < the audited revenue in 2021 * (1+30%), the ownership proportion at the Company level is 80%; in case
of the audited business income in 2022 < the audited revenue in 2021 * (1+20%), the restricted stock planned to be vested by the
incentive object shall not be vested and become invalid.
On April 20, 2022, the Company convened the Sixth Meeting of the Third Session of the Board of Directors and the Fifth
Meeting of the Third Session of the Board of Supervisors to review and approve the Proposal on the Revocation of Part of
Granted Restricted Shares Not Yet Vested. Due to the Company’s failure to complete the performance appraisal requirements in
the first vesting period (2021), 166 incentive targets resigned from the date of initial grant of restricted stocks to April 20, 2022,
and the original incentive targets Ms. Zhang Tingting and Ms. Liu Hua were elected as the Company’s supervisors on July 13,
2021. The Company canceled a total of 3.366925 million restricted shares. At this time, there are 868 remaining incentive targets
and 2,466,075 remaining restricted shares.
On May 20, 2021, the Company implemented the 2020 annual equity distribution, and the grant price of restricted stocks was
adjusted from 72.50 yuan/share to 70.70 yuan/share.
On May 27, 2022, the Company implemented the 2021 annual equity distribution, and the grant price of restricted stocks was
adjusted again from 70.70 yuan/share to 69.81 yuan/share.
On April 23, 2023, the Company convened the Eleventh Meeting of the Third Session of the Board of Directors and the Eighth
Meeting of the Third Session of the Board of Supervisors to deliberate and approve the Proposal on the Revocation of Part of
Granted Restricted Shares Not Yet Vested and the Proposal on Achieving Vesting Conditions for the Second Vesting Period of the
2020 Restricted Stock Incentive Plan. The first grant of restricted shares in this incentive plan will enter the second vesting period
on May 18, 2023. The vesting conditions for the second vesting period have been met, and the Company will use December 18,
2020, as the grant date. 1,162,140 restricted shares were granted to 388 incentive targets at a grant price of 69.81 yuan per share.
2. 2023 Equity incentive or ESOP
The Company held the 16th meeting of the third board of directors and the 11th meeting of the third board of supervisors on
August 15, 2023, and held The 2nd Extraordinary General Meeting of Shareholders of 2023 on September 5, 2023, which
reviewed and approved the Proposal on the Company’s First Employee Stock Ownership Plan (Draft) and Proposal on the
Management Measures for the Company’s First Employee Stock Ownership Plan along with other related proposals.
The purchase price of this employee stock ownership plan was determined to be 43.00 yuan per share. The actual total
subscription funds amounted to 21,715,000 yuan (excluding reserved shares), and the actual subscribed shares were 21,715,000
shares. The ratio of employee self-raised funds to incentive funds set aside by the Company is 1:1. The source of the shares is the
Company’s A-share common shares that have been repurchased in the Company’s special repurchase account.
299
Winner Medical
The Company completed the non-trading transfer of the 2023 Employee Stock Ownership Plan on October 11, 2023.
The duration of this employee stock ownership plan is 60 months, calculated from the date when the shareholders’ meeting
approves the plan and the Company announces the transfer of the underlying stocks to the name of the employee stock ownership
plan. This Employee Stock Ownership Plan will vest the corresponding underlying rights and interests to each holder of the
Employee Stock Ownership Plan in three phases based on the assessment results during the vesting assessment period. The
vesting time points are the transfer of the shareholding plan to the name of the Employee Stock Ownership Plan. After 12 months,
24 months, and 36 months from the date of completion, the vesting proportions will be 30%, 30%, and 40% of the total number of
underlying stocks held by this share ownership plan, respectively.
2. Equity-settled share-based payments
√Applicable □ Not applicable
Unit: yuan
1. 2020 Restricted Stock Incentive Plan: The fair value of the restricted stock is
calculated using the Black-Scholes model option pricing formula; the fair value of
other employee restricted stocks is determined by reference to the stock closing price
Method for determining the fair value of equity instruments on the
on the grant date without taking into account the liquidity discount.
grant date
2. 2023 Employee Stock Ownership Plan: The fair value of the Company’s shares
on the date of grant (calculated based on the closing price of the Company’s shares on
that day).
Significant parameters of determining the fair value of equity
Stock price, risk-free rate of return, historical volatility
instruments on the grant date
On each balance sheet date of the waiting period, the Company makes its best estimate
Basis for the determination of the number of viable equity based on the latest changes in the number of exercisable persons and the corresponding
instruments number of option shares and other subsequent information and revises the number of
stock options expected to be exercisable.
Reasons for significant differences between the current and
None
previous estimates
Accumulated amount of equity-settled share-based payments
91,636,147.41
recorded in capital reserves
Total amount of expenses recognized by equity-settled
3,151,091.47
share-based payments in current period
Other description:
1. 2020 Restricted Stock Incentive Plan: The cumulative amount of equity-settled share-based payment included in capital
reserves is 89,454,428.59 yuan, and the total expenses recognized for equity-settled share-based payment in this period are
969,372.65 yuan.
2. 2023 Employee Stock Ownership Plan: The cumulative amount of equity-settled share-based payment included in capital
reserves is 2,181,718.82 yuan, and the total expenses recognized for equity-settled share-based payment in this period are
2,181,718.82 yuan.
3. Cash-settled share-based payments
□ Applicable √ Not applicable
300
4. Share-based compensation expense for the period
√Applicable □ Not applicable
Unit: yuan
Grant object category Equity share-based payment expense Cash share-based payment expense
Management personnel 3,151,091.47 0.00
Total 3,151,091.47 0.00
Other description:
5. Modification and termination of share-based payment
None
6. Others
None
XVI. Commitment and contingencies
1. Important commitment issues
Important commitments on balance sheet date
(1) Large-scale outsourcing contracts that have been signed or are about to be performed and their financial implications
As of Sunday, December 31, 2023, the outstanding contracts among the large-value contracts signed by the Company and its
subsidiaries that are being or are about to be performed are as follows:
Project name Amount
Item 1 131,980,000.00
Item 2 68,986,974.75
Item 3 57,735,000.00
Item 4 38,400,000.00
Item 5 21,440,000.00
Item 6 16,449,754.57
Item 7 10,600,000.00
Item 8 10,280,522.97
301
Winner Medical
Project name Amount
Item 9 9,000,000.00
Item 10 8,740,000.00
Item 11 7,812,000.00
Item 12 7,453,800.00
Item 13 6,657,744.80
Item 14 5,971,000.00
Item 15 5,514,119.60
Total 407,020,916.69
2. Contingencies
(1) Important contingencies on balance sheet date
As of Sunday, December 31, 2023, the Company has no important contingencies to be disclosed.
(2) Explanation is also required if the Company has no important contingencies to be disclosed
The Company has no important contingencies to be disclosed.
3. Others
XVII. Post-balance sheet events
1. Important non-adjustment items
Unit: yuan
Influence number of financial position and Reasons for influence number cannot
Item Description
operating results be estimated
2. Profit distribution
The profit distribution proposals for the reporting period, approved at the Twentieth Meeting of the Third Session of the Board of
Directors and the Fifteenth Meeting of the Third Session of the Supervisory Committee of the Company, are as follows:
On the date of the disclosure of the distribution plan, the Company’s total share capital was 588,292,708 shares, of which
4,354,560 shares were in the special securities account for repurchase. Based on the 583,938,148 shares after deducting the
repurchase shares, a cash dividend of $5 per 10 shares was planned to be distributed to all shareholders (including tax), totaling
291,969,074.00 yuan in cash dividends to be distributed. Capital reserves will not be transferred to share capital, and no bonus
shares will be issued.
The proposal still needs deliberation and approved by the Company’s annual general meeting of shareholders in 2023.
3. Sales return
NA.
302
4. Other post-balance sheet events
Taking into account the major changes taking place in the current real estate market, after friendly negotiation between the two
parties, the Company and the project partner signed the Confirmation Letter on the Revocation of the “Relinquishment of Real
Estate Rights Statement” on January 29, 2024, and suspended the project construction. For details, see this Report “ⅩⅧ Other
important matters - 7 Other important transactions and matters affecting the decision-making of investors - Urban Renewal
Project of Winner Industrial Park”.
XVIII. Other important matters
1. Retrospective restatement
Unit: yuan
Content of accounting error
Processing procedures Report item name of each affected comparison period Cumulative influence number
correction
(1) Prospective application
Reason for adopting prospective
Content of accounting error correction Approval procedures
application
2. Debt restructuring
3. Assets replacement
(1) Exchange of non-monetary assets
None
(2) Other asset replacement
None
4. Pension plan
None
5. Discontinued operation
Unit: yuan
Income tax Profit from discontinued operations attributable to the
Item Income Cost Total profit Net profit
expenses owners of parent company
Other description:
None
303
Winner Medical
6. Segment information
(1) Determination basis and accounting policy of reporting segment
According to the Company’s internal organizational structure, management requirements and internal reporting system, two
reporting segments have been determined, respectively: medical consumables, healthy consumer goods. Reporting segments of
the Company offers different products or services or operates in different regions. Since each segment requires different
technologies or marketing strategies, the management of the Company manages the operating activities of each reporting segment
separately and regularly evaluates the operating results of these reporting segments to determine the allocation of resources to
them and evaluate their performance.
The inter-segment transfer price is determined on the basis of the actual transaction price, and the expenses indirectly attributable
to the segments are distributed among the segments in proportion to the income (as determined by the Company). Assets are
allocated according to the operations of a segment and the location of the assets. Liabilities of a segment include liabilities
attributable to that segment arising from the operations of a segment. If expenses related to liabilities shared by multiple operating
segments are allocated to those operating segments, such shared liabilities are also allocated to those operating segments.
(2) Financial information of the reporting segment
Unit: yuan
Item Medical consumables Healthy consumer goods Unallocated Offset between segments Total
Revenue 3,922,443,620.59 4,262,578,436.61 8,185,022,057.20
Operating costs 2,335,514,563.06 1,839,082,724.68 4,174,597,287.74
Assets impairment
losses 179,336,815.01 20,912,583.35 188,787,147.21 389,036,545.57
Credit impairment Loss
Depreciation expense
and amortization 146,319,055.56 276,278,820.32 422,597,875.88
expense
Operating profit / loss 340,417,200.52 486,354,544.67 -8,801,819.32 817,969,925.87
Non-revenue and
-68,123,651.86 -68,123,651.86
expense
Assets and liabilities
Total assets 7,300,236,708.35 3,792,798,370.86 6,018,987,370.76 17,112,022,449.97
Total liabilities 1,186,560,471.70 1,581,540,663.14 2,233,599,511.98 5,001,700,646.82
(3) If the Company has no reporting segments, or cannot disclose the total assets and total liabilities of each reporting segment,
the reasons shall be explained
None
(4) Other description
None
304
7. Other important transactions and matters affecting the decision-making of investors
Urban Renewal Project of Winner Industrial Park
(1) Project Overview
On April 6, 2017, the Company and Shenzhen Galaxy Real Estate Development Co., Ltd. (hereinafter referred to as “Galaxy Real
Estate”) signed the Cooperation Agreement on Urban Renewal Project of Winner Industrial Park to apply for and implement the
demolition and reconstruction of urban renewal and reconstruction of Winner Industrial Park in Longhua District, Shenzhen City
(hereinafter referred to as “the Project”). The scope of land to be demolished for the Project is a state-owned land that has been
transferred. The land parcel number is A819-0123. The land area is 29,064.49 m2, and the current use is industrial land.
According to the statutory plan of [Pinus tabulaeformis area] of No.402-19&20&21, Bao’an District, Shenzhen City, the planned
use of this land parcel is a second-class residential land. The land has been registered for title with a construction area of
36,625.89 m2, used for office, plant and dormitory. The Company shall be the sole subject of rights to the said parcel and all the
buildings (structures) and appendages thereon. The first to sixth floors of the second office building, the first to sixth floors of the
third dormitory building, and the first to sixth floors of the fourth dormitory building have been mortgaged at present.
(2) Cooperation mode
The Company agrees to entrust the target land and building to Galaxy Real Estate for application for approval of the urban
renewal unit plan, and accepts the relocation compensation of Galaxy Real Estate according to the conditions agreed in this
agreement. Galaxy Real Estate is responsible for all the work related to the declaration of renewal unit plan of the target land and
building and implementation of urban renewal, responsible for the relocation compensation and demolition and reconstruction
funds, and enjoys the interest in the renewal project as the single market implementer.
After the renewal and reconstruction of the target land and buildings is approved by the urban renewal unit plan, the specific
transformation and development intensity, planned purpose and indicators, etc. shall be discussed by Galaxy Real Estate with the
Company in advance before the formal application for construction, but the final approval shall be subject to the relevant
government departments.
Galaxy Real Estate shall pay the cooperation consideration to the Company by paying the relocation compensation consideration
to the Company. The Company voluntarily chooses the relocation compensation method that combines monetary compensation
and property right exchange (relocation), including: 1) monetary compensation: 400 million yuan; 2) Property right exchange
(relocation): the area of property right exchange (relocation) obtained by Party B shall be determined at 40% of the gross floor
area for sale based on the gross floor area for sale determined in the final approval of the special planning of the renewal unit of
this Project.
(3) Current progress
The Company held the 14th meeting of the third session of the Board of Directors on June 12, 2023, and the first extraordinary
general meeting of shareholders in 2023 on July 7, 2023, respectively, to review and approve the Proposal on Executing Relevant
Agreements on Relocation Compensation and Resettlement for the Urban Renewal Project of Winner Industrial Park. The
Company cooperated with Shenzhen Xingda Real Estate Development Co., Ltd. (hereinafter referred to as “Xingda Company”)
and signed the Agreement on Relocation Compensation and Resettlement for Urban Renewal Units of the Winner Industrial Park
in Longhua District in Shenzhen and the Relinquishment of Real Estate Rights Statement and other relevant documents with
Xingda Company on the land and above-ground buildings of the Industrial Park in Longhua District of Shenzhen City.
After the Company and Xingda Company signed the Agreement on Relocation Compensation and Resettlement for Urban
Renewal Units of the Winner Industrial Park in Longhua District in Shenzhen and the Relinquishment of Real Estate Rights
Statement and other relevant documents, both parties actively promoted the execution of the transaction. The project obtained the
Reply Letter from the Shenzhen Longhua District Urban Renewal and Land Preparation Bureau on the Approval Status of the
“Urban Renewal Unit Planning of Wenwen Industrial Park, Longhua Street, Longhua District” (Shenhua Update Letter [2023]
No. 25). According to the reply letter, the approval status indicates that the current Class I industrial land function of Winner
Industrial Park has been adjusted to planned Class II residential land + commercial land function. The Company vacated the
industrial park and handed it over to Xingda Company on July 17, 2023. The two parties signed the Transfer Confirmation Letter
and settled the water and electricity. Then Xingda Company began to demolish the old buildings. The Company conducted
accounting treatment in accordance with the principle of asset disposal in July 2023. When the industrial park was handed over to
Xingda Company for demolition, a one-time net income of 1.36 billion yuan was recognized from asset disposal, and the fair
value of the relocated house evaluated by a professional appraisal agency was used as the basis for revenue measurement. As of
December 31, 2023, the Company received a total of 250 million yuan in cash. This includes a deposit of 50 million yuan
received in April 2017, a prepaid relocation compensation of 100 million yuan received in February 2020, and another prepaid
relocation compensation of 100 million yuan received in July 2023, as agreed upon in the relocation compensation and
resettlement agreement.
Considering the significant changes occurring in the current real estate market, following an amicable negotiation between the
two parties, the Company and Xingda Company executed the Confirmation Letter on the Revocation of the “Relinquishment of
Real Estate Rights Statement” on January 29, 2024. The primary contents of the aforementioned document are as follows:
Temporarily halting project advancement, the Company retrieved all Relinquishment of Real Estate Rights Statement (original
305
Winner Medical
installment distribution) according to the agreement, and rescinded all the statements contained within the Relinquishment of Real
Estate Rights Statement.
The Company will continue to closely monitor changes in the real estate market with Xingda Company, strengthen
communication, and resume project construction if the real estate market improves in the future. Based on the actual progress of
the project, the Company promises to fully cooperate with Xingda Company in handling relevant procedures. Considering the
project postponement that occurred in December 2023, and the unanimous agreement among the project stakeholders to delay
construction, the Company has rescinded the Relinquishment of Real Estate Rights Statement and withdrawn all statements
contained therein. Xingda Company has also issued a written Statement confirming these actions. This event qualifies as a future
adjustment to the balance sheet. Based on this analysis, the Company has reversed the corresponding net profit of 1.36 billion
yuan in asset disposal income (deducting the income tax expense corresponding to the deferred income tax liability of 240 million
yuan from the assessed value of 1.6 billion yuan). The recognition and reversal of relevant profits and losses will take place in
different quarters of 2023, and it will not affect the financial data presented in the annual report.
Consequently, uncertainty looms over the project’s completion timeline. The Company commits to closely monitoring real estate
market dynamics, fostering communication with SINDA Group, and collaboratively reinstating project implementation when the
real estate market rebounds.
2. Heyuan investment and construction project
(1) Problem background
In 2016, under the guidance and promotion of Shenzhen Longhua District Committee and District Government, the Company
plans to transfer part of the production and logistics functions to Heyuan Zijin Linjiang Industrial Park in response to the policy of
supporting Heyuan City as a counterpart of Shenzhen City. In May 2016, the Company and the People’s Government of Zijin
County of Heyuan City signed the Agreement on Investment and Construction of Medical Package and Cotton Household Goods
Production Project (hereinafter referred to as the “Investment Agreement”), with the construction land of the project covering
200,000 m2
After the agreement was signed and the Land Use Notice was obtained, the Company submitted the planning plan, project
application and approval form as required, and started the construction. In August 2016, Winner Medical (Heyuan) obtained the
Record Certificate of Enterprise Investment Projects in Guangdong Province issued by the Development and Reform Bureau of
Zijin County. In June 2017, Environmental Protection Bureau of Zijin County issued the Approval on the Environmental Impact
Report Form of the Construction Project of Winner Medical (Heyuan) Co., Ltd. In accordance with the agreement, the Zijin
County Government assisted in obtaining a series of licenses such as state-owned land use right certificate and construction land
planning permit.
After the project was signed and started construction, the government required all construction projects under construction in Zijin
Linjiang Industrial Park to stop due to land conflicts between the project site and the planned Heyuan East Station of
Jiangxi-Shenzhen High-speed Railway and the High-speed Railway New Town. Meanwhile, the relevant land use procedures
were suspended.
(2) Current progress
In June 2019, the Regulatory Detailed Planning and Constructional Detailed Urban Design of the Core Area of Heyuan
High-speed Railway New Town was published to the public from June 22, 2019 to July 22, 2019. According to the final publicity
content, it is determined that the square in front of Heyuan East Station of High-speed Railway, National Highway 205 and the
High-speed Railway New Town overlap with the project land of Winner Medical (Heyuan).
In October 2019, the Company signed a tripartite agreement with the People’s Government of Zijin County and the Management
Committee of Heyuan Jiangdong New District to clarify the overall disposal plan. The land used for Winner Medical (Heyuan)’s
project and its above-ground buildings will be recovered by the People’s Government of Zijin County, and the three parties agree
to determine the amount of compensation through arbitration. The People’s Government of Zijin County paid 30 million yuan to
the Company as the performance bond.
In November 2019, International Arbitration Court of Ganjiang New District issued the Award ((2019) G.G.Z.Zi No.095), which
confirmed the termination of the original Investment Agreement, and the People’s Government of Zijin County shall bear the
attorney fees, legal costs and other expenses totaling 2,655,320.00 yuan. The land transfer deposit of 3 million yuan shall be
returned to the Company and compensate for the economic loss of 550 million yuan. The People’s Government of Zijin County
shall pay 50% of the amount before December 31, 2019 and 50% before February 29, 2020. As of Sunday, December 31, 2023,
the Company has received the land transfer deposit of 3 million yuan returned by the People’s Government of Zijin County and
paid the compensation of 319 million yuan. The Company has also handed over the project land, above-ground buildings,
equipment and facilities and relevant supporting materials to the People’s Government of Zijin County.
(3) Impact of this matter on the Company’s operation
Winner Medical (Heyuan)’s business positioning is mainly the production, logistics and warehousing functions of medical
package and cotton daily necessities. At present, the Company has transferred the production, logistics and warehousing functions
of Purcotton daily necessities to the Company’s subsidiary Winner Medical (Wuhan), and the production of medical package has
306
been transferred to the Company’s subsidiary Winner Medical (Chongyang).
Winner Medical (Wuhan) and Winner Medical (Chongyang) have sufficient capacity to undertake the aforementioned production,
logistics and warehousing business originally intended to be undertaken by Winner Medical (Heyuan). The above matters of
Winner Medical (Heyuan) have not caused significant adverse impact on the normal production and operation of the Company.
8. Others
None
XIX. Notes on main items of parent company’s financial statement
1. Accounts receivable
(1) Disclosure by aging
Unit: yuan
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 340,774,634.65 468,679,968.14
1~2 years 1,043,737.97 4,823,718.66
2~3 years 179,652.24 81,233.50
More than 3 years 2,318,934.33 2,311,033.96
3~4 years 57,900.37 168,509.20
4~5 years 118,509.20 1,609,931.76
More than 5 years 2,142,524.76 532,593.00
Total 344,316,959.19 475,895,954.26
(2) Classified disclosure according to bad debt accrual method
Unit: yuan
Closing Balance Balance at the beginning of the period
Book balance Provision for bad debt Book balance Provision for bad debt
Class Accruing Accruing
Proportio Book value Proportio Book value
Amount Amount proportio Amount Amount proportio
n n
n n
Including:
Accounts
receivable
of
provision 344,316,959.1 15,260,708.6 329,056,250.5 475,895,954.2 21,764,624.4 454,131,329.8
100.00% 4.43% 100.00% 4.57%
for bad 9 3 6 6 1 5
debt by
combinatio
n
Including:
Aging
302,550,055.5 15,260,708.6 287,289,346.9 429,616,144.6 21,764,624.4 407,851,520.2
analysis 87.87% 5.04% 90.28% 5.07%
6 3 3 7 1 6
method
Other
combinatio 41,766,903.63 12.13% 41,766,903.63 46,279,809.59 9.72% 46,279,809.59
n
344,316,959.1 15,260,708.6 329,056,250.5 475,895,954.2 21,764,624.4 454,131,329.8
Total 100.00% 4.43% 100.00% 4.57%
9 3 6 6 1 5
307
Winner Medical
Provision for bad debt by combination
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Description of the basis for determining the combination:
Provision for bad debt by combination
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Description of the basis for determining the combination:
If the provision for bad debts on accounts receivable relies on a general model of expected credit losses:
□ Applicable √ Not applicable
(3) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Balance at the Amount of change in current period
Class beginning of the Closing Balance
period Accrual Recovered or reversed Write-off Others
Provision for bad debt of
21,764,624.41 2,817,673.66 9,321,589.44 15,260,708.63
accounts receivable
Total 21,764,624.41 2,817,673.66 9,321,589.44 15,260,708.63
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
(4) Accounts receivable actually written off at the current period
Unit: yuan
Item Amount written off
Write-off of important accounts receivable:
Unit: yuan
Nature of accounts Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Description of write-off accounts receivable:
308
(5) Accounts receivable with Top 5 ending balances by debtor
Unit: yuan
Ending balance of bad
Percentage of total
Closing balance of debt provision for
Ending balance of accounts Closing balance of closing balance of
Unit name accounts receivable and accounts receivable and
receivable contract assets accounts receivable and
contract assets impairment provision
contract assets
for contract assets
First 23,601,630.57 23,601,630.57 6.85%
Second 21,432,541.07 21,432,541.07 6.22% 1,071,627.05
Third 19,372,648.93 19,372,648.93 5.63% 968,632.45
Fourth 14,892,197.04 14,892,197.04 4.33% 744,609.85
Fifth 13,652,094.96 13,652,094.96 3.96% 682,604.75
Total 92,951,112.57 92,951,112.57 26.99% 3,467,474.10
2. Other receivables
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Other receivables 116,040,893.47 123,628,108.60
Total 116,040,893.47 123,628,108.60
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
2) Important overdue interest
Unit: yuan
Whether there is impairment and its
Borrower Closing Balance Overdue time Overdue reason
judgment basis
Other description:
3) Classified disclosure according to bad debt accrual method
□ Applicable √ Not applicable
309
Winner Medical
4) Provision, recovery or reversal of bad debt reserves in the current period
Unit: yuan
Amount of change in current period
Balance at the beginning of
Class Recovered or Closing Balance
the period Accrual Write off/verification Other changes
reversed
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
Other description:
5) Interest receivable actually written off during the period.
Unit: yuan
Item Amount written off
Write-off of important interest receivable:
Unit: yuan
Nature of notes Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Description of write-off:
Other description:
(2) Dividends receivable
1) Classification of dividends receivable
Unit: yuan
Balance at the beginning of the
Project (or invested unit) Closing Balance
period
2) Important dividends receivable with the aging more than 1 year
Unit: yuan
Whether there is impairment and its
Project (or invested unit) Closing Balance Aging Reason for non-recovery
judgment basis
3) Classified disclosure according to bad debt accrual method
□ Applicable √ Not applicable
310
4) Provision, recovery or reversal of bad debt reserves in the current period
Unit: yuan
Amount of change in current period
Balance at the beginning of
Class Recovered or Closing Balance
the period Accrual Write off/verification Other changes
reversed
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
Other description:
5) Actual write-off of dividends receivable for the period
Unit: yuan
Item Amount written off
Important write-off of dividends receivable:
Unit: yuan
Nature of notes Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Description of write-off:
Other description:
(3) Other receivables
1) Other receivables classified by nature
Unit: yuan
Nature of payment Ending book balance Beginning book balance
Compensation for investment and construction project of Winner Medical
220,155,320.00 224,655,320.00
(Heyuan)
Margin and deposit 3,740,072.80 3,941,268.30
Employee pretty cash 558,778.18 592,876.83
Intercourse funds with related parties 4,688,603.35
Others 1,978,710.15 2,426,136.82
Total 226,432,881.13 236,304,205.30
311
Winner Medical
2) Disclosure by aging
Unit: yuan
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 3,533,854.33 8,925,718.50
1~2 years 28,992.00 2,723,166.80
2~3 years 2,714,714.80
More than 3 years 220,155,320.00 224,655,320.00
3~4 years 224,655,320.00
4~5 years 220,155,320.00
Total 226,432,881.13 236,304,205.30
3) Classified disclosure according to bad debt accrual method
Unit: yuan
Closing Balance Balance at the beginning of the period
Book balance Provision for bad debt Book balance Provision for bad debt
Class
Accruing Book value Accruing Book value
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Including:
Including:
Provision for bad debts based on the general expected credit loss (ECL) model
Unit: yuan
Stage 1 Stage 2 Stage 3
Provision for bad debt Expected credit losses over the Expected credit losses over the Total
Expected credit losses
entire duration (without credit entire duration (with credit
over the next 12 months
impairment) impairment)
Balance on Sunday, January 1, 2023 112,676,096.70 112,676,096.70
Balance on Sunday, January 1, 2023
in the current period
Accrual in current period 353,321.25 353,321.25
Reversal in current period 2,637,430.29 2,637,430.29
Balance on Sunday, December 31,
110,391,987.66 110,391,987.66
2023
Basis for division of each stage and provision ratio for bad debts
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable √ Not applicable
312
4) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Amount of change in current period
Balance at the beginning of
Class Recovered or Write Closing Balance
the period Accrual Others
reversed off/verification
Provision for bad
112,676,096.70 353,321.25 2,637,430.29 110,391,987.66
debt
Total 112,676,096.70 353,321.25 2,637,430.29 110,391,987.66
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
Amount recovered or The rationale behind determining the original provision ratio
Unit name Reasons Recovery way
reversed for bad debts and its justification
5) Other receivable actually written off at the current period
Unit: yuan
Item Amount written off
Significant long-term receivables written off:
Unit: yuan
Nature of notes Reasons for Write-off procedures Whether the payments arise from
Unit name Amount written off
receivable write-off performed connected transactions
Notes on the write-off of long-term receivables:
6) Other receivables with Top 5 ending balances by debtor
Unit: yuan
Proportion in total other Ending balance of bad
Unit name Nature of payment Closing Balance Aging
ending balance receivable debt provision
Receivables related to Heyuan
First 220,155,320.00 4-5 years 97.23% 110,077,660.00
project
Second Deposit 2,311,115.80 2-3 years 1.02% 115,555.79
Third Deposit 399,599.00 2-3 years 0.18% 19,979.95
Within 1
Fourth Employee loan 100,000.00 0.04% 5,000.00
year
Within 1
Fifth Employee loan 95,420.00 0.04% 4,771.00
year
Total 223,061,454.80 98.51% 110,222,966.74
313
Winner Medical
7) Recorded under other receivables due to centralized fund management
Unit: yuan
Other description:
None
3. Long-term equity investment
Unit: yuan
Closing Balance Balance at the beginning of the period
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
3,612,018,476.28 4,086,994.48 3,607,931,481.80 3,530,099,178.63 4,086,994.48 3,526,012,184.15
subsidiaries
Investment in
associated enterprises 20,377,034.07 20,377,034.07 21,642,696.16 21,642,696.16
and joint enterprises
Total 3,632,395,510.35 4,086,994.48 3,628,308,515.87 3,551,741,874.79 4,086,994.48 3,547,654,880.31
(1) Investment in subsidiaries
Unit: yuan
Opening balance Increase or decrease in current period Ending balance
Beginning balance Ending balance (book
Invested unit of provision for Further Capital Provision for of impairment
(book value) Others value)
impairment investment reduction impairment provision
Winner Medical
267,491,627.79 267,491,627.79
(Huanggang)
Winner Medical
27,242,761.31 27,242,761.31
(Jingmen)
Shenzhen
130,000,000.00 1,058,457.65 131,058,457.65
Purcotton
Winner Medical
33,629,806.08 33,629,806.08
(Chongyang)
Winner Medical
236,436,595.28 236,436,595.28
(Jiayu)
Winner Medical
39,697,276.28 39,697,276.28
(Tianmen)
Winner Medical
1,456,720.00 1,456,720.00
(Hong Kong)
Winner Medical
18,595,897.41 18,595,897.41
(Yichang)
Winner Medical
4,086,994.48 4,086,994.48
Malaysia
Winner Medical
100,000,000.00 100,000,000.00
(Heyuan)
Winner Medical
400,000,000.00 400,000,000.00
(Wuhan)
PureH2B 150,000,000.00 150,000,000.00
Longterm Medical 727,540,000.00 727,540,000.00
Winner Guilin 450,000,000.00 50,000,000.00 500,000,000.00
Winner Medical
751,921,500.00 751,921,500.00
(Hunan)
Junjian Medical 192,000,000.00 192,000,000.00
Shanghai
30,000,000.00 30,000,000.00
Hongsong
Pan-China (H.K.) 860,840.00 860,840.00
Total 3,526,012,184.15 4,086,994.48 81,919,297.65 3,607,931,481.80 4,086,994.48
314
(2) Investment in associated enterprises and joint enterprises
Unit: yuan
Increase or decrease in current period
Opening
Investmen Ending
Balance at balance Allowanc
t gains Adjustmen balance of
the of Declared e for Closing
Invested and losses t of other Changes the
beginning of provision Further Capital payment of impairme Balance
unit recognize comprehe in other Others provision
the period for investment reduction cash dividends nt of (Book value)
d by the nsive equity for unspent
(Book value) impairme or profits unspecifi
equity income balances
nt ed acts
method
I. Join
t ventures
II. Coo
perative
enterprise
Chengdu 21,642,696.1 1,184,337.
2,450,000.00 20,377,034.07
Winner 6 91
21,642,696.1 1,184,337.
Subtotal 2,450,000.00 20,377,034.07
6 91
21,642,696.1 1,184,337.
Total 2,450,000.00 20,377,034.07
6 91
The recoverable amount is determined according to the higher of the net amount of the assets fair value subtracted by the disposal
costs
□ Applicable √ Not applicable
The recoverable amount is determined based on the present value of expected future cash flows
□ Applicable √ Not applicable
Reasons for the apparent inconsistency between the aforementioned information and the data used in impairment testing in prior
years or external information
N/A
Reasons for the variance between the information utilized in the Company’s impairment testing in prior years and the actual
circumstances of the current year
N/A
(3) Other description
None
4. Revenue and cost
Unit: yuan
Amount incurred in current period Amount incurred in previous period
Item
Income Cost Income Cost
Main business 2,814,210,405.74 2,028,042,457.15 6,424,434,990.51 4,145,092,045.28
Other businesses 77,880,248.71 6,073,049.88 100,457,781.31 16,415,328.66
Total 2,892,090,654.45 2,034,115,507.03 6,524,892,771.82 4,161,507,373.94
315
Winner Medical
Breakdown of operating revenues and operating costs:
Unit: yuan
Segment 1 Segment 2 Total
Contract classification Operating Operating Operating
Revenue Revenue Revenue Revenue Operating costs
costs costs costs
Business type
Including:
Classified by operating area
Including:
Type of markets or clients
Including:
Type of contracts
Including:
Sorted by time of goods
transfer
Including:
Sorted by contract duration
Including:
Sorted by sales channels
Including:
Total
Information related to performance obligations:
Is he the
Time to fulfill The nature of the Amounts borne by the Types of quality assurance
Important main
Item performance goods the Company Company that are expected provided by the Company and
payment terms responsible
obligations promises to transfer to be refunded to customers related obligations
person?
Other description
Information related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations signed but not yet performed or completed at the end of this
reporting period is 0.00 yuan, of which 0.00 yuan is expected to be recognized as revenue in year 0, 0.00 yuan is expected to be
recognized as revenue in year 0, and 0.00 yuan is expected to be recognized as revenue in year 0.
316
Major contract changes or major transaction price adjustments
Unit: yuan
Item Accounting treatment methods Amount of impact on revenue
Other description:
5. Investment income
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Long-term equity investment income checked by cost method 700,000,000.00 699,939,868.87
Long-term equity investment gains measured by employing the
1,184,337.91 4,692,894.92
equity method
Income from the redemption of trading financial assets 115,840,345.05 6,708,135.26
Investment income from purchasing financial products 15,949,400.16
Total 817,024,682.96 727,290,299.21
6. Others
XX. Further information
1. Statement of current non-recurring gain and loss
√Applicable □ Not applicable
Unit: yuan
Descript
Item Amount
ion
Profit and loss on disposal of non-current assets -46,464,882.49
Government grants recognized in the current period’s profit or loss (excluding grants closely related to the Company’s
regular business operations, aligned with national policies, and meeting specific criteria with a continuous impact on 74,822,989.42
the Company’s profit or loss)
Gains and losses from changes in the fair value of financial assets and liabilities held by non-financial corporations,
and gains and losses from the disposal of financial assets and liabilities, excluding effective hedging operations related 172,439,376.04
to the Company’s regular business operations
Income and expenditure other than those mentioned above 10,371,355.38
Less: Amount affected by income tax 35,321,337.22
Amount of minority shareholders’ equity affected (after tax) 7,471,766.01
Total 168,375,735.12 --
317
Winner Medical
Other profit and loss items that are consistent with the definition of non-recurring profit and loss:
□ Applicable √ Not applicable
There was no other profit and loss items that are consistent with the definition of non-recurring profit and loss.
Explanation on defining the non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 on
Information Disclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses as recurring profit and loss
items
□ Applicable √ Not applicable
1. Return on net assets and earnings per share
Weighted Earnings Per Share
Reporting profit average return
on net assets Basic EPS (yuan/share) Diluted EPS (yuan/share)
Net profit attributable to common shareholders of the Company 5.03% 0.98 0.98
Net profit attributable to common shareholders of the Company after
3.57% 0.69 0.69
deduction of non-recurring profits and losses
2. Differences in accounting data under domestic and foreign accounting standards
(1) The difference between net profits and net assets in financial statements disclosed according to the International Accounting
Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
(2) The difference between net profits and net assets in financial statements disclosed according to the Overseas Accounting
Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable √ Not applicable
(3) Causes for differences in accounting data under domestic and foreign accounting standards. If the difference adjustment has
been made to the data audited by the overseas audit institution, the name of the overseas audit institution shall be indicated
□ Applicable √ Not applicable
3. Others
318
Annex:
Information on Medical Device Products
(I) Statistics on the number of registration certificates for medical devices
Statistics on the number of domestic product registration certificate
Registration Categories Opening balance Number of additions Number of failures Closing balance
Class I 110 9 6 113
Category II 126 12 1 137
Category III 22 3 0 25
Total 258 24 7 275
Statistics on the number of foreign product registration certificate
Registration Categories Opening balance Number of additions Number of failures Closing balance
Abroad 61 31 0 92
Note: The statistical caliber of new registration certificates is that of new certificates in the Company’s consolidated financial statements at the end of 2023.
(II) Medical devices in the registration application process
1. Domestic
Whether to apply for
innovative medical
Registratio Registratio devices in accordance
S/N Name of certificates Applicant For clinical purpose Progress
n categories n stages with the regulations of
the national drug
regulatory department.
Suitable for covering wounds and absorbing exudate
Flexible Poly-silicone from wounds such as pressure sores, leg or foot ulcers,
1 Winner Medical Class III Correction In progress No
Foam Dressing and traumatic wounds (such as skin tears and surgical
wounds).
Hydrophilic fiber Registratio
2 Winner Medical Class III In progress No
dressing n review
For covering wounds and absorbing wound exudate,
Winner Medical Registratio
3 Foam dressing Class III such as wounds with more exudate, lower limb ulcers, In progress No
(Huanggang) n review
non-infected diabetic foot ulcers and pressure sores
Used for acute wounds (such as superficial wounds,
post-surgical suture wounds, mechanical wounds,
minor wounds, abrasions, incisions, puncture sites of
puncture instruments, first-degree or shallow
second-degree burn wounds, care of umbilical cord
Registratio
Winner Medical stumps, oral wounds, laser/photon/fruit acid
4 Transparent dressing Class II n In progress No
(Huanggang) peeling/microplastic surgery wounds) to provide a
declaration
microenvironment for wound healing. It can also be
used to care for the puncture site of puncture
instruments (such as catheters and indwelling
intravenous needles) and to secure puncture
instruments.
319
Winner Medical
Whether to apply for
innovative medical
Registratio Registratio devices in accordance
S/N Name of certificates Applicant For clinical purpose Progress
n categories n stages with the regulations of
the national drug
regulatory department.
It is used for nasal irrigation in patients with acute and
Seawater nasal Winner Medical chronic rhinitis, allergic rhinitis, nasal polyps, and
5 Class II Correction In progress No
cleansing solution (Jiayu) sinusitis. It is also used for nasal irrigation after
rhinitis surgery and chemotherapy.
Disposable medical
It is worn on the hands of doctors to examine or
6 nitrile rubber Winner Guilin Class II Correction In progress No
palpate patients’ conditions.
examination gloves
It is used to isolate and protect ultrasound probes and
Sterile ultrasound Registratio
7 Winner Guilin Class II prevent cross-infection during clinical ultrasound In progress No
probe isolation sheath n review
imaging equipment inspections.
It is worn on the hands of surgical personnel to
prevent the spread of skin flakes and bacteria to open
Disposable sterile Registratio
8 Winner Guilin Class II surgical wounds and to prevent the spread of body In progress No
rubber surgical gloves n review
fluids from surgical patients to medical staff, thus
providing two-way biological protection.
Automatic retractable Used to aspirate liquids or perform intradermal,
Winner Medical Registratio
9 safety self-destructing Class III subcutaneous, intramuscular, or intravenous injections In progress No
(Hunan) n review
syringe with needle before or after injecting liquids.
Disposable precision
Winner Medical Using the principle of gravity, it is used for human Registratio
10 filtered infusion set Class III In progress No
(Hunan) intravenous drip. n review
with needle
Disposable extension Winner Medical It is suitable for extending the infusion tubing for Registratio
11 Class III In progress No
tubes (Hunan) human intravenous infusion under the force of gravity. n review
Disposable coreless Used in conjunction with ultra-clean dispensers, it is
Winner Medical Registratio
12 rod syringe for Class II suitable for dissolving and preparing pharmaceutical In progress No
(Hunan) n review
medication dispensing solutions and adding medication.
Disposable light-proof
Winner Medical The light-proof range is 290nm to 450nm, suitable for Registratio
13 dispensing syringe Class II In progress No
(Hunan) formulating photosensitive drugs. n review
with needle
Winner Medical It is suitable for the closure of surgical wounds and Registratio
14 Skin stapler Class II In progress No
(Hunan) linear or approximately linear incisions. n review
It is used to care for the puncture site of puncture
Transparent film
15 Longterm Medical Class II instruments and can also be used to secure puncture Correction In progress No
application
instruments.
Disposable silicone For the negative pressure absorption of exudate from
16 gel micro-negative Longterm Medical Class II patients’ body surface wounds, specifically for Correction In progress No
pressure dressing non-chronic wounds.
Xi’an Longtemu To aid in improving or treating dermatopathic scars
Medical caused by cesarean section, trauma, burns, plastic
17 Scar treatment strips Class II Correction In progress No
Technology Co., surgery, or surgery, and to help prevent the formation
Ltd. of such scars.
Xi’an Longtemu It is used for wound protection after debridement,
Medical postoperative wounds, and newborn umbilical
18 Sterile dressing Class II Correction In progress No
Technology Co., openings. It can also be used to secure intravenous
Ltd. infusion catheters.
Xi’an Longtemu
Polyurethane foam Medical It is used for covering wounds, and absorbing exudate
19 Class II Correction In progress No
dressing Technology Co., from non-chronic wounds.
Ltd.
320
Whether to apply for
innovative medical
Registratio Registratio devices in accordance
S/N Name of certificates Applicant For clinical purpose Progress
n categories n stages with the regulations of
the national drug
regulatory department.
Used for the care of acute wounds (such as superficial
wounds, suture wounds after surgery, mechanical
wounds, minor wounds, abrasions, incisions, puncture
Xi’an Longtemu
sites of puncture instruments, first-degree or shallow
Transparent film Medical Registratio
20 Class II second-degree burn wounds, infant umbilical cord In progress No
dressings Technology Co., n review
stumps, wounds after laser/photon/fruit acid
Ltd.
peeling/micro plastic surgery) and the puncture site of
puncture instruments. It can also be used to secure
puncture instruments.
Xi’an Longtemu
Umbilical protection Medical It is used to protect and care for the traumatic area of
21 Class II Correction In progress No
patch Technology Co., the umbilical cord of infants and children.
Ltd.
2. Abroad
Registration
Region S/N Name of certificates Applicant Product Registration stages Progress
categories
Sterile hydrocolloid dressing
Sterile CMC dressing
Sterile silicone wound contact
layer
EU Quality Management System Winner Sterile silicone gel super
EU 1 Class II a, II b Certification review In progress
Certificate(MDR) Medical absorbent pad
Sterile super absorbent pad with
activated carbon
Pure cotton non-woven fabric
Synthetic non-woven fabrics
Sterile absorbent pads
Sterile cotton
Sterile medical combo kits
Sterile non-woven fabric
dressing
Sterile transparent dressing
Sterile non-stick pad dressing
EU Quality Management System Winner
EU 2 Class I s Sterile wipe combination Certification review In progress
Certificate(MDR) Medical
package
Sterile wipes
Sterile synthetic nonwoven
surgical gown
Sterile skin protective film
Pure cotton non-woven fabric
Synthetic non-woven fabrics
Winner
US 3 510(k) Premarket Notification Unclassified Acellular matrix dressing Substantive review In progress
Medical
Saudi Medical Device Marketing Winner
4 Class I Non-woven dressings (eye pads) Official review In progress
Arabia Authorization Medical
Saudi Medical Device Marketing Winner
5 Class I Silicone tapes Official review In progress
Arabia Authorization Medical
Saudi Medical Device Marketing Winner
6 Class I Silicon scar treatment strips Official review In progress
Arabia Authorization Medical
321
Winner Medical
Registration
Region S/N Name of certificates Applicant Product Registration stages Progress
categories
Winner Non-sterile threaded gauze
Malaysia 7 MDA Certification Class II a Data preparation In progress
Medical products
Winner
Malaysia 8 MDA Certification Class II b CMC dressing Official review In progress
Medical
Four high-end dressings (super
absorbent pad, silicone super
Winner
Russia 9 俄罗斯卫生部证书 Class II b absorbent pad, activated carbon Sample preparation In progress
Medical
super absorbent pad, silicone
foam dressing)
Winner Hydrocolloid and alginate
Russia 10 俄罗斯卫生部证书 Class II b Sample preparation In progress
Medical dressings Winner Medical
Winner
Russia 11 俄罗斯卫生部证书 Class I s Wipe combo kits Data preparation In progress
Medical
Brazil 12 ANVISA registration Class III Winner Guilin Male condom Data preparation In progress
Disposable sterile medical
Brazil 13 ANVISA registration Class II Winner Guilin Data preparation In progress
surgical gloves
Ethiopia 14 EFDA Market Authorization Class II Winner Guilin Male condom Data preparation In progress
Disposable sterile medical
Ethiopia 15 EFDA Market Authorization Class II Winner Guilin Data preparation In progress
surgical gloves
South Disposable sterile medical
16 SABS Permit Class IIa Winner Guilin Official review In progress
Africa surgical gloves
South
17 SABS Permit Class IIa Winner Guilin Male condom Official review In progress
Africa
Winner
EU Quality Management System
EU 18 Class IIa Medical Auto-destruct syringe Official review In progress
Certificate(MDR)
(Hunan)
Winner
EU Quality Management System
EU 19 Class IIa Medical Hypodermic syringe Official review In progress
Certificate(MDR)
(Hunan)
Winner
EU Quality Management System
EU 20 Class IIa Medical Insulin syringe Official review In progress
Certificate(MDR)
(Hunan)
322
(I) Newly registered medical device certificates in 2023
1. Domestic
Registrati
Product record
on Certificate
S/N Name of certificates number/registration For clinical purpose Date of issuance Validity
categorie owner
number
s
It is used by medical staff in medical
Guangdong & Shenzhen institutions to prevent exposure to
Medical isolation Winner
1 Class I Medical Device Record potentially infectious patient blood, body March 10, 2023 /
shoe covers Medical
No. 20230178 fluids, secretions, etc., and act as a barrier
and protection.
It is worn on the hands of surgical
personnel to prevent the spread of skin
Disposable sterile flakes and bacteria to open surgical
Winner Yue Xie Zhu Zhun November 26,
2 rubber surgical Class II wounds and to prevent the spread of body November 27, 2023
Medical No. 20232141954 2028
gloves fluids from surgical patients to medical
staff, thus providing two-way biological
protection.
Disposable medical
Winner Yue Xie Zhu Zhun It is worn on the hands of doctors to November 26,
3 rubber Class II November 27, 2023
Medical No. 20232141953 examine or palpate patients’ conditions. 2028
examination gloves
Winner Hubei Xianning Medical It is used to immobilize the patient’s limbs
Surgical fixation
4 Class I Medical Device Record during surgical procedures, and its usage March 15, 2023 /
instruments
(Chongyang) No. 20230013 duration is temporary.
Winner Hubei Xianning Medical
It is a kind of hygiene care product for
5 Medical pad Class I Medical Device Record May 09, 2023 /
hospital beds or examination beds.
(Chongyang) No. 20230021
It is used to cover the instrument table,
operating table and display screen in the
Winner Hubei Medical Device
Single-use sterile operating room to avoid the infection of
6 Class I Medical Registration Certificate July 18, 2023 July 17, 2028
protective sleeve the patient’s wound caused by the surgeon
(Chongyang) No. 20232144441
touching the instruments mentioned above
during surgery.
Winner Hubei Xianning Medical It is used for cleansing, examining, and
Single-use medical
7 Class I Medical Device Record No. aiding in the immobilization of skin and August 11, 2023 /
examination kits
(Chongyang) 20230044 wounds.
Winner Hubei Xianning Medical It is used in medical institutions outpatient,
Medical isolation
8 Class I Medical Device Record No. wards, laboratories, etc. for general September 15, 2023 /
sleeves
(Chongyang) 20230066 isolation.
Winner It is used to affix dressings to wounds or
Medical breathable Hubei Medical Device
9 Class I Medical fix other medical devices to specific body September 07, 2023 /
adhesive tape Record No. 20230041
(Huanggang) parts.
It is used for the management of acute
Winner Hubei Medical Device wounds (such as superficial wounds,
10 Wound dressing Class II Medical Registration Certificate surgical suture wounds, mechanical October 25, 2023 October 24, 2028
(Jiayu) No. 20232144599 wounds, incisions, first-degree or shallow
second-degree burn wounds).
323
Winner Medical
Registrati
Product record
on Certificate
S/N Name of certificates number/registration For clinical purpose Date of issuance Validity
categorie owner
number
s
It acts as a physical barrier by forming a
Winner Hubei Medical Device protective layer on the surface of the
December 13,
11 Liquid dressing Class II Medical Registration Certificate wound. It is used for the treatment of December 14, 2023
2028
(Jiayu) No. 20232144678 minor wounds, abrasions, cuts, superficial
wounds, and surrounding skin.
It provides barriers for and keeps medical
Medical disposable Winner Hubei Medical Device
staff away from contacting potentially
12 protective Class II Medical Registration Certificate January 19, 2023 January 18, 2028
infectious patient blood, body fluids, and
clothing (Jingmen) No. 20232144182
secretions at work.
It is used in a localized area of the
reproductive tract to physically prevent
Guilin Medical Device
Winner sperm from reaching the uterine opening,
13 Urethanes condom Class II Registration Certificate May 05, 2023 May 04, 2028
Guilin thus obstructing the encounter between
No. 20232180082
sperm and egg to achieve contraceptive
purposes.
Medical Winner Guilin Medical Device It is worn on the hands of doctors to
14 Class I October 10, 2023 /
examination gloves Guilin Record No. 20230111 examine or palpate patients’ conditions.
Disposable bag Winner National Medical Device It is suitable for clinical infusion after
15 infusion set with Class III Medical Registration Certificate dispensing liquid medication and is January 13, 2023 January 12, 2028
needle (Hunan) No. 20233140068 intended solely for gravity infusion.
Disposable
Winner National Medical Device Suitable for human intravenous infusion of
precision
16 Class III Medical Registration Certificate medicinal liquids, intended solely for March 07, 2023 March 06, 2028
filtered infusion set
(Hunan) No. 20233140245 gravity infusion.
with needle
Disposable Winner National Medical Device It is suitable for the intravenous infusion of
17 infusion set with Class III Medical Registration Certificate medicinal liquids into the human body March 07, 2023 March 06, 2028
needle (Hunan) No. 20233140247 under the force of gravity.
It acts as a physical barrier by forming a
protective layer on the surface of the
Zhejiang Medical Device
Longterm wound. It is used for the care of small
18 Liquid dressing Class II Registration Certificate March 22, 2023 March 21, 2028
Medical wounds, abrasions, cuts and other
No. 20232141145
superficial wounds as well as surrounding
skin.
Used for the care of acute wounds (such as
superficial wounds, suture wounds after
surgery, mechanical wounds, minor
wounds, abrasions, incisions, puncture
Zhejiang Medical Device sites of puncture instruments, first-degree
Transparent wound Longterm
19 Class II Registration Certificate or shallow second-degree burn wounds, October 16, 2023 October 15, 2028
dressing Medical
No. 20232141863 infant umbilical cord stumps, wounds after
laser/photon/fruit acid peeling/micro
plastic surgery) and the puncture site of
puncture instruments. It can also be used to
secure puncture instruments.
This product is suitable for closing and
compressing the puncture point to stop
Zhejiang Medical Device
Compression Longterm bleeding after surgical procedures such as December 05,
20 Class II Registration Certificate December 06, 2023
hemostatic patch Medical arterial interventional surgery, or after the 2028
No. 20232142015
removal of the arteriovenous indwelling
needle at the end of surgery.
324
Registrati
Product record
on Certificate
S/N Name of certificates number/registration For clinical purpose Date of issuance Validity
categorie owner
number
s
Xi’an This product is made of medical cotton
Longtemu Shanxi Medical Device swabs soaked in medical alcohol. The
Medical alcohol September 21,
21 Class II Medical Registration Certificate cotton swabs are enclosed in plastic tubes September 22, 2023
swabs 2028
Technology No. 20232140105 made of polypropylene and absorbent
Co., Ltd. cotton.
Xi’an
This product is used to absorb wound
Longtemu Shanxi Medical Device
exudate or drain water from the wound. It December 17,
22 Hydrogel dressings Class II Medical Registration Certificate December 18, 2023
is also used to cover non-chronic wounds 2028
Technology No. 20232140141
such as surgical suture wounds.
Co., Ltd.
Zhejiang Huzhou Medical It is used to affix dressings to wounds or
Longterm
23 Medical tape Class I Device Record No. fix other medical devices to specific body July 10, 2023 /
Medical
20230042 parts.
Zhejiang Huzhou Medical It is used to affix dressings to wounds or
Medical rubber Longterm
24 Class I Device Record No. fix other medical devices to specific body July 10, 2023 /
blanket Medical
20230043 parts.
2. Abroad
Registration Certificate
Region S/N Certificate No. Name of certificates Product Date of issuance Validity
categories owner
July 10, 2023 July 09, 2028
Threaded gauze products July 10, 2023 July 09, 2028
(sheets, pads, balls, rolls)
G10 046241 0073 EU Quality Management Class II a, II Winner Alginate dressings, Foam
EU 1 July 10, 2023 July 09, 2028
Rev.00 System Certificate(MDR) b Medical dressings, Silicone foam
dressings, Super
absorbent pads July 10, 2023 July 09, 2028
July 10, 2023 July 09, 2028
Threadless gauze July 10, 2023 July 09, 2028
products (sheets, pads,
balls, rolls, throat pieces) July 10, 2023 July 09, 2028
G11 046241 0074 EU Quality Management Winner 100% pure cotton
EU 2 Class Is
Rev.00 System Certificate(MDR) Medical spunlace non-woven
fabric surgical gowns, July 10, 2023 July 09, 2028
masks, silicone scar
treatment strips July 10, 2023 July 09, 2028
Winner Non-sterile skin protector
EU 3 DE/CA61/00196280 Notification Class Ins August 17, 2023 /
Medical spray
325
Winner Medical
Registration Certificate
Region S/N Certificate No. Name of certificates Product Date of issuance Validity
categories owner
Winner Non-sterile skin
EU 4 DE/CA61/00196279 Notification Class Ins August 17, 2023 /
Medical protective film wipes
Non-woven products
Switzerla Winner without threads (sheets,
5 / / Class Is February 15, 2023 /
nd Medical pads, balls, rolls) made of
synthetic materials.
Synthetic non-woven
Switzerla Winner
6 / / Class IIa fabrics with threads February 15, 2023 /
nd Medical
(sheets, pads, balls, rolls).
Switzerla Winner
7 / / Class Ins Patient examination kit February 15, 2023 /
nd Medical
Switzerla Winner Medical combo kits (Care September 13,
8 / / Class Is /
nd Medical pack) 2023
Switzerla Winner September 13,
9 / / Class Ins Skin protective film /
nd Medical 2023
Over-the-counter
513(k) premarket Unclassifie Winner
US 10 K221755 antibacterial curved January 13, 2023 /
notification d Medical
cotton.
Over-the-counter
512(k) premarket Unclassifie Winner
US 11 K221754 silver-containing foam January 17, 2023 /
notification d Medical
and silicone foam
OTC& Rx dressings for
511(k) premarket Unclassifie Winner
US 12 K221532 antibacterial non-woven January 30, 2023 /
notification d Medical
cloth
517(k) premarket Winner
US 13 K223232 Class II Mask (OTC) Level 3 March 06, 2023 /
notification Medical
515(k) premarket Unclassifie Winner BZK Antibacterial
US 14 K221311 June 21, 2023 /
notification d Medical Band-Aid OTC
510(k) premarket Unclassifie Winner
US 15 K231152 Collagen dressing October 12, 2023 /
notification d Medical
514(k) premarket Unclassifie Winner Rx & OTC antibacterial November 10,
US 16 K231564 /
notification d Medical flushing agent 2023
516(k) premarket Unclassifie Winner Antimicrobial Hydrogel December 01,
US 17 K231057 /
notification d Medical (Rx) 2023
Registration Confirmation Winner Non-sterile nitrile
EU 18 DE/CA20/00193670 Class Ins May 30, 2023 /
Letter Guilin examination gloves
Registration Confirmation Winner Non-sterile latex
EU 19 DE/CA20/00193594 Class Ins May 30, 2023 /
Letter Guilin examination gloves
326
Registration Certificate
Region S/N Certificate No. Name of certificates Product Date of issuance Validity
categories owner
NON-ADHERENT NON-ADHERENT
NO.G10 083478 0030 Longterm
EU 20 ABSORBENT Class IIb ABSORBENT April 11, 2023 April 10, 2028
Rev.00 Medical
DRESSINGS DRESSINGS
NO.G10 083478 0030 Longterm ALGINATE
EU 21 ALGINATE DRESSINGS Class IIb April 11, 2023 April 10, 2028
Rev.00 Medical DRESSINGS
NO.G10 083478 0030 HYDROCOLLOID Longterm HYDROCOLLOID
EU 22 Class IIb April 11, 2023 April 10, 2028
Rev.00 DRESSINGS Medical DRESSINGS
Foam dressing Negative
NO.G10 083478 0030 POLYURETHANE Longterm Pressure Wound Therapy
EU 23 Class IIb April 11, 2023 April 10, 2028
Rev.00 DRESSINGS Medical dressing (NPWT
dressing)
Silicone foam dressing,
NO.G10 083478 0030 Longterm
EU 24 SILICONE DRESSINGS Class IIb Silicone net 、 NPWT April 11, 2023 April 10, 2028
Rev.00 Medical
silicone foam dressing
No. G20 083478 0031 HYDROCOLLOID Longterm HYDROCOLLOID
EU 25 Class IIa October 16, 2023 October 15, 2028
Rev. 00 DRESSINGS Medical DRESSINGS
No.G21 083478 0029 Longterm
EU 26 SUTURE TAPES Class Is SUTURE TAPES April 11, 2023 April 10, 2028
Rev.00 Medical
ADHESIVE ADHESIVE
No.G21 083478 0029 Longterm
EU 27 DRESSINGS, WITH Class Is DRESSINGS, WITH April 11, 2023 April 10, 2028
Rev.00 Medical
ABSORBENT PAD ABSORBENT PAD
No.G21 083478 0029 Longterm
EU 28 DRESSINGS Class Is DRESSINGS April 11, 2023 April 10, 2028
Rev.00 Medical
No.G21 083478 0029 HAEMOSTATIC Longterm HAEMOSTATIC
EU 29 Class Is April 11, 2023 April 10, 2028
Rev.00 DRESSINGS-OTHER Medical DRESSINGS-OTHER
No.G21 083478 0029 NON-EXTENSIBLE Longterm NON-EXTENSIBLE
EU 30 Class Is April 11, 2023 April 10, 2028
Rev.00 WOVEN PLASTERS Medical WOVEN PLASTERS
MEDICAL USE FACE MEDICAL USE FACE
No.G21 083478 0029 Longterm
EU 31 MASKS, TYPE II AND Class Is MASKS, TYPE II AND April 11, 2023 April 10, 2028
Rev.00 Medical
IIR IIR
327
